Google Is Now the East India Company of the Internet

Long ago, another company tried to control global connectivity—it had an unhappy ending

Can you imagine a company so powerful that it controls half of the world’s trade?

It actually happened. But only one time in history. It’s a remarkable story filled with lessons for those willing to learn them.

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No business ever matched the power of the East India Company. It dominated global trade routes, and used that power to control entire nations. Yet it eventually collapsed—ruined by the consequences of its own extreme ambitions.

Anybody who wants to understand how big businesses destroy themselves through greed and overreaching needs to know this case study. And that’s especially true right now—because huge web platforms are trying to do the exact same thing in the digital economy that the East India Company did in the real world.

Google is the closest thing I’ve ever seen to the East India Company. And it will encounter the exact same problems, and perhaps meet the same fate.

The concept is simple. If you control how people connect to the economy, you have enormous power over them.

You don’t even need to run factories or set up retail stores. You don’t need to manufacture anything, or create any object with intrinsic value.

You just control the links between buyers and sellers—and then you squeeze them as hard as you can.

That’s why the East India Company focused on trade routes. They were the hyperlinks of that era.

So it needed ships the way Google needs servers.

The launch of the massive East India merchant ship, the Edinburgh—which brought tea from China

The seeds for this rapacious business were planted when the British captured a huge Portuguese ship in 1592. The boat, called the Madre de Deus, was three times larger than anything the Brits had ever built.

But it was NOT a military vessel. The Portuguese ship was filled with cargo.

The sailors couldn’t believe what they had captured. They found chests of gold and silver coins, diamond-set jewelry, pearls as big as your thumb, all sorts of silks and tapestries, and 15 tons of ebony.

The spices alone weighed a staggering 50 tons—cinnamon, nutmeg, cloves, pepper, and other magical substances rarely seen in British kitchens.

This one cargo ship represented as much wealth as half of the entire English treasury.

And it raised an obvious question. Why should the English worry about military ships—or anything else, really—when you could make so much money trading all this stuff?

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Not long after, a group of merchants and explorers started hatching plans to launch a trading company—and finally received a charter from Queen Elizabeth in 1600.

The East India Company was now a reality, but it needed to play catchup. The Dutch and the Portuguese were already established in the merchant shipping business.

By 1603, the East India Company had three ships. A decade later that had grown to eight. But the bigger it got, the more ambitious it became.

The rates of return were enormous—an average of 138% on the first dozen voyages. So the management was obsessed with expanding as rapidly as possible.

They call it scalability nowadays.

But even if they dominated and oppressed like bullies, these corporate bosses still craved a veneer of respectability and legitimacy—just like Google’s CEO at the innauguration yesterday. So the company got a Coat of Arms, playacting as if it were a royal family or noble clan.

The company adopted the motto: Deus Indicat. Deo Ducente Nil Nocet. It translates as “God is our leader. When God leads, nothing can harm.”

When you consider all the brutal, terrible things this company did, you ‘re dumbfounded that they dared adopt that slogan—much like the “Don’t Be Evil” that once served as Google’s motto.

But their real god was profit maximization. Of course it was—when your return on investment is so high, you try to grow as fast as possible.

So the East India Company bought new ships. And they bought old ships, too. To accelerate their growth, they even started leasing ships.

They eventually created their own shipyards—just like web platforms nowadays that decide to make their own hardware. In business, this is called backward integration.

And, also like companies today, it sold shares on the stock exchange to finance these investments.

Soon the East India Company owned a fleet larger than most navies.

There are only two businesses that call their clients users—drug dealers and Internet businesses. The East India Company is a role model for both.

But it’s hard to control the world without getting your hands dirty. Google learned that—and ditched the company’s originating vision of “Don’t Be Evil.”

So the East India Company turned into a military force—ready to use violence whenever necessary. Just two years after its founding, the East India Company launched an attack on a Portuguese ship and seized its cargo. This was a faster way to make money than just trading.

Let’s be honest, they were now no better than pirates, extracting profits without adding value. In this way, they resemble a search engine that steals news from journalists to sell ads or uses AI knockoffs to take revenues from human creators.

But the company’s managers would tell you they didn’t have a choice. If you wanted to control the high seas, you either attacked or got attacked. There was no other option.

This always happens, sooner or later, when greed is unrestrained. Fair competition is too slow. You make money faster when you totally destroy all enemies.

So the East India Company eventually controlled more than a quarter of a million soldiers—at some points it had twice as many combatants under its command as the Royal British Navy.

It fought wars. It started wars. It ran blockades. It conquered territories, and subjugated the populace. Sometimes it forgot trade entirely, and just imposed taxes on the people it had captured.

Troops of the East India Company (Source)

And when you’ve done all that, why worry about other ethical considerations? At an early stage, the company began trading slaves. It continued doing so for the next two hundred years.

But opium was especially profitable. Like today’s web platforms, the East India Company learned that it could exploit addiction—if the client was hooked, you could squeeze even more cash out of them.

I note that there are only two businesses that call their clients users—drug dealers and Internet businesses. The East India Company is a role model for both.

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But there’s a problem with greed and ambition pushed to such extreme limits. And the East India Company eventually paid a price for its evil ways.

The company was hated. Subjugated people fought back. Politicians also grew increasingly alarmed at a business that had more power than the government.

So they denounced the company’s corruption and abuses of monopoly power, and imposed restrictions. Constant overreaching also led to financial setbacks and reprisals from a growing number of enemies.

But the simpler explanation is karma is real.

Total domination never works in the long run. Just look at all the oppressors of the past—who believed that they had grown so strong, nobody could stop them. They never realize, until it’s too late, that creating so many enemies, day after day, is a bad long term strategy.

That’s why they get knifed by their former friends in the Roman Senate. Or get exiled to Elba. Or commit suicide in a Berlin bunker.

Retribution is inevitable. That’s because human beings are not like rats in a maze. If you push them too far, they will go to extreme lengths—even sacrifice their own lives—to get revenge.

It took a long time for the opponents of the East India Company to mobilize. But eventually hundreds of millions of people hated them. Even the government officials they had manipulated for so long started to push back—nobody wants to be bullied, and even David finds a way to take down Goliath.

The ultimate irony is that shares of the East India Company still exist today. And an Indian bought them up to gain control.

This is called getting the last laugh.

A comparison with Google is striking. And not just because an Indian-born exec is CEO.

Just like a shipping company that controls the port, Google’s search engine is the port of departure for digital voyages today. And like the East India Company, Google decided that it can exploit anybody who uses its port—and destroy them if they want.

So Google destroyed the journalism business. That’s why your neighborhood newspaper went broke—the folks in Palo Alto siphoned off all the advertising revenues. And they have killed off thousands of other businesses and jobs.

They didn’t need to do this. The same is true of shipping companies—they don’t try to subjugate nations anymore. They learned this lesson from the collapse of the East India Company. Google hasn’t learned its lesson—yet—and so it believes that controlling search gives it the right to dominate anything that is searched for.

I’ve argued elsewhere that AT&T could have done the same thing when it controlled the telephone system. But it didn’t.

AT&T operated with a code of ethics that Google abandoned years ago. Otherwise it would have been a parasite on every business that used a phone—demanding a cut of revenues from any transaction conducted via their network.

Google is shameless. If you pay them money, people can find your business. If you stop paying them money, you disappear from view. They want every business on the planet to pay for placement—from toys for tots to funeral homes for elders. Even essential services, such as healthcare, are expected to pay to play.

And it’s not just their search engine. They always invest in businesses that put them in the ‘trade routes’—controlling the linkages, and never getting involved in the creation of tangible value.

Source

That’s their philosophy at YouTube, for example. Other people do the creating—Google just swallows up cash as the intermediary. And that’s also why they launched the Chrome web browser and Gmail. Even their map apps will destroy businesses that don’t play by their rules.

They want to stand between you and everything you interact with digitally—taking a cut of the action each time.

This is their true character: Google is a tolltaker on the digital roads, not an innovator in the physical world. We don’t call them trade routes anymore, but from Google’s perspective that’s what they are. Like the East India Company, this is where they exert force and seek to dominate.

They are like the bouncers at the door of the nightclub—but meaner and greedier than any bouncer you have ever seen. After all, no bouncer would ever assume that controlling the door allows you to bully the bar owner.

Like the East India Company, they now make every decision based on a never-sated ambition for more money and power. Even now—after the senior management is fabulously wealthy—they want more and more.

But users don’t like being used. And—also like the East India Company—Google now has enemies in government, who fear its monopolistic initiatives.

By the way, don’t try to learn about Google’s monopoly from Google. If you do a search, it only wants you to read articles about their responses, not the initial accusations.

When you ask Google about antitrust, it provides these links

In the days of the East India Company, this kind of abusive behavior was known as mercantilism. That was how you controlled the links back then.

What Google is doing is a new kind of digital mercantilism. As was true of its predecessor, this is an abuse of power.

While it’s working, it looks invincible. But a time of reckoning comes, sooner or later.

It comes when subjugated people push back. And Google is now manipulating more people than even the East India Company at the peak of its domination.

I’m not certain what the tipping point will be. But the governments of many (maybe even most) countries in the world now view Google as a hostile entity. And hundreds of millions of people feel the same way.

These things play out slowly, usually over the course of decades. But, meanwhile, the resistance gets stronger and stronger. And all the software in the world won’t be enough to stop the backlash that’s coming.