Identity Management - Google's next sector of absolute dominance?

As Axel Springer's CEO Mathias Döpfner elaborated in his open letter, cooperating with Google in the online marketing field is not a matter of choice anymore, and cooperation is not an encounter at eye level as well.
Social identities from Google and FB enjoy an uptake in the low assurance area, but Google is pushing to improve the quality of their identities, with better authentication technology (FIDO Alliance) including a second factor, and attributes such as street address.
Google has been a supporter of OIX ("An Open Market Solution for Online Identity Assurance"). OIX' fundamental whitepaper includes Microsoft's Principles of Openness, stating lawfulness, transparency, data protection and redress.
The open question is that of long-term stability. Market dynamics could easily lead to an extreme the-winner-takes-all outcome, as it happened in the search engine market. It could be even more extreme because two or more overlapping two-sided markets could be created:

  • Federated identity management is a 2-sided market negotiating between users on one and service and content providers on the other side;
  • The business model of free services in exchange for behavioral and personal data is 2-sided, with users on one and advertisers on the other side;
  • The free client platform (Chrome, Android and their appstores) that has a huge potential to drive both authentication and identification) and would be a multi-sided market for users, app-developers and device makers.

2-sided markets yield control to the dominant single player or small group of players. Multiple 2-sided markets would annihilate the choice of both users and providers.
I do not suggest that Google's thinkers and engineers plan for improved orwellian market control, but rather for smart solutions in a networked society. But the Principles of Openness lack fundamental governance principles for long-term stability. If control is taken away from the market participants, platform owners may change those to their benefit. Governments have a hard time to protect fair and efficient markets, as shown in the case Google vs. European publishers.
The European public sector has been heavy handed in establishing universal e-identity systems that could be an alternative. There is little impact in the private sector, and large scale pilots are in fact many years away from reaching a network effect, if ever.