The internet has finally begun to displace traditional fax services, thus granting consumers faster and more reliable capabilities than ever before. This technology shift should, in theory, be a boon for the consumer. Yet, this growing industry has been stymied by an aggressively-maintained monopoly at the hands of one company: J2 Global.
Having entered the internet fax field early, J2 has sustained their dominance over the market through systematic litigation of the competition and clandestine tactics to ensure top-ranking among internet search engines to control over 90 percent of the market. Now, their employment of quiestionable tactics in order to keep the competition out and raise prices at will has begun to besmirch one of the most trusted names in eCommerce: Google.
Online fax may be a niche market, and one that may be unfamiliar to those outside of the business world, but for many companies, it’s important. Rather than relying on phone lines for the communication of faxes between two locations, online faxes instead utilize email. As a result, the cost of long-distance telephones is avoided, and multiple faxes may be sent at once.
While this natural progression may seem like an obvious evolution as internet service begins to fully displace traditional land lines, J2 thinks differently. Having gotten into the market early and obtained a questionable patent over all fax-to-email transmissions, regardless of whether PHP, .NET, or SMTP gateways are employed by the email, J2 has driven out all potential competition through persistent litigation that has left many would-be rivals broken in their wake. Current companies struggling to hang on in their legal battles include Fax87, Nextiva and Ring Central.
Breaking the Competition
In what has been described by many legal analysts as “patent trolling,” J2 has utilized an impressive cadre of lawyers to help enforce this patent at all costs. Yet, J2 has yet to see any of these lawsuits take their full course for one simple reason: were a ruling to be issued, the patent would be likely overturned. Thus, the state of limbo enjoyed by their patent over progress has allowed J2 just enough leeway to serve competitors with disproportionately large lawsuits. When their rivals simply can’t afford the legal team to resist and opt to settle, J2’s patent remains intact and their competition is all but destitute.
Only enterprises already backed by large corporations can hope to survive the aggressive assault form J2’s legal team. On example is Integrated Global Concepts Inc, which filed a suit against J2 in 2007 that alleged J2 used “fraudulently obtained patents to unlawfully create and maintain a monopoly by intimidation against j2's competitors” in order to “crush competition, raise their costs of operation, eliminate them as competitors in the relevant markets entirely and substantially raise the cost of fax to e-mail services to customers.” The case was eventually dismissed for lack of evidence to support Integrated Global Concepts accusations against J2. In response, J2 has responded with lawsuit after lawsuit against Integrated Global Concepts, with the most recent suit filed in July 2013.
While Integrated Global Concepts has managed to hold out against J2, the vast majority of startups attempting to break J2’s unethically-maintained hold over the market have been left with settling out of court as their only recourse. From there, J2 frequently opts to instigate hostile takeovers of their former competition to fully ensure that none can jeopardize their monopoly. As such, another boon to J2 comes from the ashes of their former competition: a new site.
Puppets of J2
As a result of their litigious protection of their market control and forceful acquisition of rival websites, the roster of J2-controlled entities has expanded to include eFax.com, MyFax.com, MetroFax.com, Fax.com, Smartfax.com, and RapidFax.com. Using these websites, J2 is able to trick the average consumer into perceiving choice when there in fact is none, and then adjust prices accordingly. Expectedly, the results are never to the benefit of the consumer; prices are adjusted slightly to give the illusion of a free market while instead ensuring that all revenue flows freely towards J2.
But simply owning a litany of online fax websites isn’t the only way that J2 ensures that consumers will inevitably turn to one of their sites for their online faxing needs. J2 also keeps consumers away from the competition by filling online search results with J2-owned properties. With a search of the keyword “online faxing,” the majority of both ads and regular search results are J2-controlled sites.
The Google Search Problem
Many would assume that this, while disingenuous and at the consumer’s expense, is at least logical. After all, since J2 composes 90 percent of the online fax market, it would seem natural that 90 percent of the ads would be for their sites. However, Google and other search providers realize that this masking of a corporation’s interests hurts their users, and instead maintains a policy that prevents this.
Google Adwords’ “Double Serving” protocol was thus created with the intent of preventing “multiple ads from the same or commonly-owned company from appearing on the same search results page.” Yet, this policy is clearly not enforced in the case of J2 properties, despite Google already having been made aware of the double standard in their double serving policy.
To make matters worse, it’s not just ads that have been compromised. The supposedly reliable search results that the majority of Google users trust and rely on have also been gamed by J2 in a practice known commonly as “grey hat SEO.” This manipulation of search engines is made possible by web pages taking advantage of Google’s PageRank system, which determines the placement of a search result based off of that page’s “popularity.” Popularity is determined in a number of ways, but one significant factor is by the number of pages that link to it. With grey hat SEO, pages take advantage of this system by creating links to other sites in hidden “doorway pages” or invisible text that only can be seen by search engines.
Since J2 now owns so many pages, they can easily create links to their other sites. Thus, J2-owned sites rise to the top of search results, and more often than not, the one at the top of the page is the one that will have consumers paying the most.
While grey hat SEO is also nominally opposed by Google, their willfull ignorance toward J2’s actions raises questions about their complicity in J2’s monopolistic control over this market. Unless they are willing to help correct this problem, it’s safe to suspect that Google is profiting from J2’s actions. And if they are willing to do this with J2, what other markets and sites that lay at the top of Google searches are suspect as well?