How about going after Comcast and Verizon first, the actual tech monopolies? I already don’t use Facebook, I buy things online from places other than Amazon, and have email accounts that aren’t hosted by Google. However, all of that goes over Comcast’s network because that’s my only viable choice for Internet service. Also, while FAANG occasionally do things I don’t approve of, they don’t actively lobby congress for things that will make my use of the internet objectively worse (NN, SOPA, etc...).
But no, because Comcast has -bribed- donated to way more congresspeople than Google, because they’re better at playing that game.
>But no, because Comcast has -bribed- donated to way more congresspeople than Google...
Lobbying is tracked and google spent over 33% more than Comcast - in your own words - bribing members of Congress.
The bulk of Google’s lobbying expenditure was for immigration, tax reform and antitrust. I’d say Google’s far better “at playing the game” after all no one is randomly sticking up for Comcast.
You're right, I should have checked the facts before speculating on which company spent more on lobbying. However, the things they are lobbying for/against also matter. As a recent example, Net Neutrality involved massive amounts of lobbing and had very clear "pro-consumer" and "anti-consumer" sides.
> Not only was Google the pro-net neutrality organization that spent the most on lobbying in 2014 — $16.8 million in 2014 — it was the 10th biggest spender on federal lobbying that year. Impressive as that sounds, however, it still ranked behind both Comcast and the National Cable and Telecommunications Association.
And it seems like every dollar that Comcast spends lobbying is directed towards efforts that will have a negative impact on my life, and the lives of everyone not on Comcast's board of directors. At least with Google, sometimes our incentives align, so that's another point in favor of attempting to break up the Comcast monopoly before the Google one.
>As a recent example, Net Neutrality involved massive amounts of lobbing and had very clear "pro-consumer" and "anti-consumer" sides
This isn't as uncontroversial of an opinion as it might appear to be in a place like HN. What you're admitting here basically is that you think Comcast should be broken up because they lobby for things you don't like, but FAANG is fine because they lobby for things you do.
No, you're putting words in my mouth, or misunderstanding my point.
> you think Comcast should be broken up
I think efforts to break up tech monopolies should first be focused on telecommunication companies.
> because they lobby for things you don't like,
Not just me, but are objectively harmful to 99% of the people they would affect
> but FAANG is fine because they lobby for things you do.
I'm mostly focusing on Google here, and yes, they at least occasionally lobby for things I like because sometimes their interests and the interests of the public in general happen to align.
With Comcast (and other ISPs), you have only one choice, and they spend tons of money and effort making sure you only have that one choice, and continue to have only that one choice. Comcast recently spent nearly $1M to prevent Fort Collins from creating a municipal ISP[1]. That is actively anti-competitive and monopolistic by definition.
> With Comcast (and other ISPs), you have only one choice, and they spend tons of money and effort making sure you only have that one choice, and continue to have only that one choice. Comcast recently spent nearly $1M to prevent Fort Collins from creating a municipal ISP[1]. That is actively anti-competitive and monopolistic by definition.
I'm sure if the U.S. government was proposing to sell public bonds to build a search engine or ride-sharing service, you'd see a lot of lobbying from Silicon Valley. It's not "actively anti-competitive and monopolistic by definition" to oppose government backed and funded competition in your industry.
It's municipal, so the magnitude of threat you're implying (oooh Government) is a misdirection. GP's point is that consistently lobbying to shut down the existence of any competition, public or private, is monopolistic behavior. And it is, pretty much by definition.
GP used an example of lobbying against the government entering what had heretofore been a private market. Pushing back on that is not "monopolistic" by any sense of the term. If you have examples of Comcast lobbying to prevent private competition, I'd like to hear them. The biggest impediment to private competition actually comes from the public interest sector, which insists on build-out requirements that make it very difficult to start competing ISPs, on the theory that it's better for nobody to have competing choices than to only have wealthier areas have competing choices.
Monopoly refers to being a sole provider. It is completely by definition monopolistic to take action to prevent a second provider from emerging.
Is it possible for them to have other strategic incentives for their action, such as preventing a type of competitor from emerging? Yes. And if you take the perspective that government is a uniquely troublesome competitor, it's understandable to feel extra strong about it.
But it's still monopolistic in context. A counterpoint to "competition from the government is uniquely unfair" is "having only one provider is uniquely unfair". One is from the perspective of a profitable $100B corporation, the other is from the perspective of the consumers.
The city wanted to launch a municipal internet service. Predictably, it failed because the requirements were to provide service everywhere and the bids all came back too high.
Meanwhile they continue to resist private ISPs who want to expand into neighborhoods where they think they can do so profitably.
Search engine and ride-sharing don't seem to be natural monopolies however. Communication infrastructure in most part of the USA clearly is.
Still I agree breaking up Comcast is not the solution. You will just end up with smaller more localized monopolies. That's pretty much what happened with Bell after all.
The solution would be either nationalizing the infrastructure and leasing it to operators or forcing existing operators to rent their infrastructure to their competitors for a set price. The later is actually working quite well in France. Short of that you will never get competition. It's simply not profitable.
It's working terribly in France. France has some of the slowest broadband in the OECD: https://www.akamai.com/fr/fr/multimedia/documents/state-of-t.... Just 18% of French households have connections faster than 15 mbps, versus 48% of American households.
That's mostly because France never used copper cable as a TV distribution system and is going straight to fiber. Deployment is admittedly slower than it should be especially in the countryside where it will never be profitable due to low density. Meanwhile, people are stuck with ADSL and VDSL which give connections closer to 10mbps than 15.
Cost wise however, you can't even compare the USA and France. In France, a full speed FTTH subscription with no data cap cost 25 euros and you can pay 20 more to get a cell phone plan with unlimited call and unlimited data. If you are ready to switch provider yearly, you can bring that down to 25 euros all included.
According to the December 2017 OECD data, France and the U.S. are basically tied in terms of fiber deployment (12-13% of total broadband connections): https://www.oecd.org/sti/broadband/1.10-PctFibreToTotalBroad.... Which is pretty remarkable because in the U.S., fiber is a relatively smaller upgrade, because fast cable alternatives are available in almost every fiber market. (Just 1/3 of people who can get FiOS actually subscribe, for example. Google fiber has struggled to break 40% too.)
Also note that the French deployment is being heavily subsidized by the government (to the tune of $24 billion). Except for a small amount during the post-2008 economic stimulus, broadband deployment in the U.S. is not subsidized. Whereas the French government is paying a direct subsidy to build fiber in rural areas, in the U.S. rural deployment is financed by a cross subsidy (taxing ISPs in urban areas to subsidize ISPs in rural ones).
Most likely unaffected. You rightfully pointed that the state is paying for much of it. A significant part of the deployment is actually done directly by the state (via the equivalent of counties) which owns the infrastructure.
> Also note that the French deployment is being heavily subsidized by the government (to the tune of $24 billion). Except for a small amount during the post-2008 economic stimulus, broadband deployment in the U.S. is not subsidized. Whereas the French government is paying a direct subsidy to build fiber in rural areas, in the U.S. rural deployment is financed by a cross subsidy (taxing ISPs in urban areas to subsidize ISPs in rural ones).
I don't really see what this has to do with my initial point: mandatory leasing of ISP private infrastructure to their competitors successfully create competition.
It is not subsidies to ISP by the way. Most of this money goes to counties so they can build their own infrastructure which they then lease to ISP. It makes a lot of sense because while this infrastructure wouldn't be profitable if privately built they have a significant positive economic impact on the region where they are deployed.
Wasn't Verizon given billions in subsidies for FTTH (which they installed on the east and west coast, the most profitable areas) and then sold off vast areas they didn't touch to companies like Frontier?
They certainly weren’t given cash like the french government is doing. The most you can say is that Bell Atlantic, Verizon’s predecessor, was allowed to accelerate depreciation of their copper network more quickly than under the previous tax rules.[1] Whether that amounted to a subsidy depends on how quickly the value of the copper plant decreased after fiber was built. The accelerated depreciation was based on the quite reasonable assumption that the value of the copper network depreciated more quickly after fiber was built. I’ve never seen a calculation refuting that premise.
[1] When you build an income-producing capital asset like copper wire in the ground, you can’t deduct the cost from your revenues immediately for tax purposes, like you can with say employee salaries. Instead, you gradually deduct the capital cost over the income-producing life of the asset. If the government allowes you to depreciate an asset faster than the value of the asset actually drops, that nets you some tax benefit due to the time value of money. On the other hand, if the accelerated depreciation reflects the fact that certain types of assets depreciate quicker, then it will result in the correct amount of taxes being paid. For example IT equipment in data centers can generally be written off immediately—unlike wires in the the ground it’s pretty much worthless after a few years.
For 4G data, your bandwith get capped ridiculously low after 60GB. For broadband, it's seems really unlimited yes. As it's often supposed to be for residential use only, I guess they will start asking you questions if your usage becomes very noticeable. I personally don't know anyone who ever had an issue.
What's the purpose of monopoly laws? What is their spirit? Consumer benefit, right? If that is better served by municipal utilities, then while it may not violate the word of antitrust, it certainly violates the spirit.
> I'm mostly focusing on Google here, and yes, they at least occasionally lobby for things I like because sometimes their interests and the interests of the public in general happen to align.
There’s definitely an argument to be made here that their interests don’t align with the public, and that they should therefore be targeted first — public interests is a subjective phrase.
Isn't the point of government to represent the people? Sure, the parent poster is but one person, but on the whole, Americans were in favor of Net Neutrality.
Perhaps outright defending FANG is going too far, but the parent definitely has a point that ISP's should be looked into when we're discussing "breaking up" companies.
There are multiple ways to represent the people and their best interests. It is not always the role of the government to do what is most popular. Raising taxes instead of increased deficit spending is an example of something that is often unpopular, but in many cases the objectively better option.
> Raising taxes instead of increased deficit spending is an example of something that is often unpopular, but in many cases the objectively better option.
I don't think that you could get any reasonably representative range of economists in a room to even agree that this is ever a better option, so I think your claim to objectivity is unwarranted.
Well, if the pre-existing taxes were zero, you could probably get a most economists to agree that raising taxes was better than increasing deficit spending.
> What you're admitting here basically is that you think Comcast should be broken up because they lobby for things you don't like, but FAANG is fine because they lobby for things you do.
Far from being a shocking "admission," it's the least surprising thing in the world that people support policy they like and oppose policy they don't. And ignore policy they're indifferent to.
(People may also at times support policy they don't like and oppose policy they do for various practical political reasons, but that's a different discussion.)
This might be more of an issue in areas where things people do/don't like are arbitrary matters of taste. I'm certainly not saddling up to lead a state-backed charge against the company that produces Peeps despite the fact that I think they're a terrible excuse for candy.
But net neutrality is not an arbitrary matter of taste.
Nor, really, are immigration, tax reform and antitrust issues.
> What you're admitting here basically is that you think Comcast should be broken up because they lobby for things you don't like, but FAANG is fine because they lobby for things you do.
The original point of anti-trust law was to make things better for the consumer. If Comcast is using their power to lobby for anti-consumer practices then they should be broken up. Naturally consumers are going to disagree with anti-consumer practices.
It's uncontroversial to say Net Neutrality is pro-consumer on HN because we're the people who know the technical aspects of the concept; it's uncontroversial anywhere people know what it's about.
But the point is well made. We can't be breaking up companies that don't do what we want, if they're playing by the rules.
The real answer is to change the rules. Warren is running on some populist anger, and that's a dangerous thing to praise.
This is only true if you think that "the rules" can't include breaking up companies when they reach a certain level of market control. I hope you agree that Warren is running to change or enforce some rules; the reason you run for political office is to become a rulemaker or executor.
That's fine also, but I don't think they're mutually exclusive. If lax laws have allowed monopolies to take hold, then the job of the government is to protect consumers by creating a free market - and that may mean breaking companies up. In the case that the monopoly is natural or sufficiently hard to prevent, the government should either take over the industry and run it as a non-profit or intervene in such a way that creates a free market.
In absolutely no way should the government do any of those things. The government should instead pass laws that reflect how the people want corporations to behave, and until they do so, not punish or harm corporations for playing by the rules.
The government running an entire industry, even the threat of such a thing, is a great way to completely destroy innovation in that industry. Why would I invest in research if it's a real possibility the government can come in and take everything from me for nothing?
What you're suggesting doesn't create a free market, it creates a dead market.
Not sure about desirable. I'm not a huge fan of the company/person with the most money to donate basically dictating the direction of our country (as it is now).
I believe net neutrality is a regulatory capture move, and gives Google and Netflix a stranglehold over the industry: https://news.ycombinator.com/item?id=19316513 Marketing to the contrary, I believe there are good, strong justifications for against net neutrality, as a consumer and someone excited about the future of technology.
Additionally, and far more importantly: Comcast is a regional monopoly. They have a lot of power in some geographic areas of the United States. Google is a global monopoly that has power in nearly every home on the planet. You shouldn't be willing to strengthen a global monopoly to try to fight a regional one.
How so? If I don't like my internet provider, my only other option is dialup. If I don't like Google, there's multiple alternatives for all of their services that I use
While you can place your data in services which are not Google, if you want to consume data, you are often going to have to deal with Google. For instance, almost anyone who shares any sort of video whatsoever puts it on YouTube. It doesn't matter if I'm not a YouTube user, I have to go to YouTube if I want to watch someone else's videos.
And Google is far more than just where you go to search or store your email. Somewhere around 90% of the web uses Google Analytics, Google Ads, or Google Fonts, so they can track you regardless of where you go online. And that's before you get into the fact that plenty of websites are on Google's cloud services, which you may not even know. (I left Google Docs for another service, for instance, but it's still hosted on Google's servers.) Even if you're not logged into a Google account, Google is tracking you and profiling your behavior across the web. (Google also collects credit card data, so they can track you in brick and mortar stores now too.)
Using Google's browser to access the web is also becoming increasingly inescapable, now that the company with the second largest market share in web browsers is switching to Chrome's codebase. Firefox is nearly the last remaining holdout against Chromium. In fact, the very protocol we use to talk to the web is constantly being revised primarily on Google's lead and direction. HTTP/3, QUIC, DNS-over-HTTPS, etc. is all about moving the web's standard to something more palatable to Google's business models, and making them harder to block or filter out.
It's incredibly naive to believe you can escape Google. I've spent years de-Googling, and there's plenty of data Google still has on me.
ISP monopolies are a big problem, but they won't follow you when you move. A high bar for escape, to be sure, but escaping Google likely requires an even higher bar: Entering the witness protection program and getting a new identity.
What a joke. To claim that for example using Chrome is “inescapable” is pure hyperbole. You’re worried about Google tracking your credit card purchases but not worried about credit card companies tracking that? Because I assure you they do. And ISP monopolies do follow you when you move: across huge swathes of the US you have one or maybe two options for internet access.
> Firefox is nearly the last remaining holdout against Chromium.
And the reason they don't have more market share is because Chrome is still faster and provides a better experience on average than Firefox does. I switched (back) to Firefox a few years ago, and I'm mostly happy with it. But when I try to get others to switch, those that end up not switching try for a few days and run into horrible performance issues that cripple their browsing experience. Clearly this isn't a universal issue (my experience is fine), but it's a big enough issue that it likely hampers further adoption.
I pretty much never hear "Firefox doesn't work properly on X site" as a reason they can't use Firefox. In the end, people use Chrome because it tends to give a better experience for people, even given its lack of respect for their privacy.
That doesn't make sense - while Google may have a dominant position in a winner takes all ISPs can exclude others from the market far easier. If Google becomes grossly unreasonable it is easier to leave them - in a Geographic area your options are more constrained by physical availability and prices can be raised largely arbitrarily.
You have claimed that it's a stranglehold, but never explained what actually makes it so, given that any would-be Google and Netflix competitor would have access to the same pipes as those two, and on the same terms.
Economy of scale. For instance, Netflix has CDN boxes all over the planet, colocated by the ISPs. ISPs have to colocate them for free, because with net neutrality, they have to either accept the massive network traffic over their peering connections, or accept the box. Any smaller provider would need to pay for the privilege of colocation in an ISP's datacenter, and they'd also have to supply all of those boxes, that a company on Netflix's scale can easily afford.
Without net neutrality, ISPs would be free to charge big players like Google and Netflix more money, and that would leave a lot more room for smaller players to get involved. Getting "the same terms" as Google and Netflix is not always, inherently, a good thing.
> Without net neutrality, ISPs would be free to charge big players like Google and Netflix more money, and that would leave a lot more room for smaller players to get involved.
When ISPs decide that they should charge more for all video traffic, the smaller companies can't pay it but the larger ones can. Why would the ISPs act in the benefit of small companies when they can make more by charging more for all streaming video.
>>Lobbying is tracked and google spent over 33% more than Comcast - in your own words - bribing members of Congress.
That's just members of Congress. What about local governments? Keep in mind a lot of states don't have laws that require publicly disclosing lobbying efforts.
This "tracked" lobbying is drop in the dark matter of political money. There are huge numbers of "career" congressman with disproportionate amount of wealth even though their only supposedly legal income was less than $200K. Magic? You don't get private dinners with presidents with just legal lobbying money.
curious: Do you think tech giants' lobbying is responsible for the recent shift in allowing more highly-skilled H1B visa holders to enter USA? it would, i imagine, lower the companies' cost of labor.
Yep, and given their data mining capabilities google is far more dangerous. Tbh they shouldn't own Android and YouTube, those companies should be spin off from alphabet.
Opensecrets.org will let you search public companies lobbying spend (and other info).
Or you can un-ironically google “google lobbying” and find more detailed articles about Google’s lobbying published by time, fortune, Bloomberg, etc...
By "spent more money on congress people" @psadauskas is not simply just referring to "who spent more money last year", he's implying that the foothole that a Comcast or a Verizon has in the capitol goes much further than say a Google. And that makes since right? Especially from a government's perspective. If you can be chummy with an ISP, you hardly need the help of a downstream application builder (e.g., Google).
Lobbying is tracked and google spent over 33% more than Comcast - in your own words - bribing members of Congress.
Probably because they saw what happened when Microsoft tried to ignore Washington, DC. altogether. Can you blame Google for realizing that they couldn't just turn their backs on the game?
Google has long used lobbying for business objectives. For example, because Google profits from being a middle man for content created by other people, Google has lobbied for weaker copyright protections. Joel Splosky calls this "commoditizing your complement": https://www.gwern.net/Complement, and it explains Google's political positions to a tee. The idea that they were "forced" into it is wishful rationalization.
That's one perspective. Another school of thought says that both the extent and duration of copyright protection is counterproductive if not batshit insane, and lobbying for copyright liberalization benefits almost everyone regardless of the underlying motivation.
It's an unfortunate side effect of the current system. Either no one should be able to influence legislation, or you're going to be negatively impacted by choosing not to.
That said, I'm in favor of the former. Citizens United has been a pox on representatives representing their constituents, which has made lobbying all the more effective and easy.
Also, does the public have the image of Comcast and Verizon CEOs as being specific people who are really rich and dislikable? So that taking them down a notch will make the public happy? And so taking them down a notch is a good political stance?
To be fair, I think there is some argument that some of the larger tech giants would benefit consumer welfare by being broken up. Facebook probably less so since people already have choice.
Warren does herself no favors by using $25 billion as the threshold of a monopoly. What a real monopoly is is when there is no consumer choice at all, leading to large corporate profits that hurt consumers at the pricing level.
By not using consumer choice or harm as the standard (which is what the court uses), Warren comes across (and perhaps actually intends) to be against large companies, regardless of welfare.
In the past couple years, a new legal theory proposed that the definition of monopoloy needs to be updated for the 21st century.
Instead of focusing on consumer welfare, antitrust law should focus on 'anticompetitive behavior'. In this argument, amazon is the platform through which all other online sellers go to market, like railroads in the late 19th century. Behaving as both a platform and participant is anticompetitive, regardless of whether programs like 'amazon basics' make consumers happy.
It's not a new legal theory, though. It's a return to the old one that predated the current state of affairs. In other words, it's a return to what the people who originally wrote our anti-monopoly laws meant them to do.
so we are ok with removing the only thing we as people have going for us, consumer welfare consideration and focus only on how to make it easier for businesses to screw us.
Should I feel better that the business that is screwing me is a "small business" instead of a giant? is that the new standard?
It's not either-or. The problem is that the current interpretation only looks at consumer impact, and ignores a lot of anti-competitive behavior that makes the market less free overall. In practice, this still hurts consumers, it's just that much harder to prove because of indirect effects - and so monopolies get away with it more often than they used to.
I Don't agree with this view. It surely has the potential to hurt the consumers in the future but IF and WHEN it does consumer impact at that time can be used to fight it (break up etc). No need to actually hurt the consumer NOW for the fear that they might be hurt in the future.
>so we are ok with removing the only thing we as people have going for us
The way that the 'consumer welfare' protection is currently implemented has no teeth.
Consider the Comcast/TWC mergers. The companies involved pay 'experts' (Of their choice) to spin fairy tales about how they project that costs to customers will go down. Five years down the road, when they don't (Or, customers suffer because other intangibles degrade, due to lack of competition), nobody actually holds them accountable, after the fact.
the old hay is, if you charge less than your competitor, you're engaging in anticompetitive behavior, if you charge the same as your competitor, you're engaging in collusion, if you charge more than your competitor, you're price gouging, so as a business, the only way to survive is to lobby politicians enough and buy yourself protection.
Amazon Basics is a tiny part of their revenue. The conclusion that they participate in their own platform and therefore need to be broken up makes no sense.
> What a real monopoly is is when there is no consumer choice at all, leading to large corporate profits that hurt consumers at the pricing level.
Well, sure, 100% national market share is obviously a monopoly. But you're also a monopoly if you distort a market (generally markets with less than 3 major players) or have control or distortion over individual markets (you can have a monopoly in NYC but not the US, for example).
I think this obviously applies to telecoms, which often have monopolies over certain areas (and often granted by local government! thanks a lot Philly city council).
I think there's a whole host of bad behavior that's non-monopolistic. That's what I think needs to be cracked down on. Some of these do relate to market share, but I don't think it's as simple as a boolean monopoly / not-monopoly. It's a gradient, and much of the behavior in that gradient should be dealt with. There's often collusion between companies on pricing, or agreements not to compete, etc...
>I think this obviously applies to telecoms, which often have monopolies over certain areas (and often granted by local government! thanks a lot Philly city council).
That's a key distinction. Are there any actual monopolies (I don't mean companies that are merely dominant) that are not backed by government?
Healthcare, insurance often do? I haven't really thought about that too much. According to the FTC, having a monopoly is not in and of itself illegal.
Let's clear up what we're talking about. I don't find monopolies to be a very interesting subject.
What I have a problem with is anticompetitive behavior (which is illegal but the US has been notably slacking on enforcement for years). When a company uses their position as a platform for sales to start pushing into selling actual products in markets they've determined to be profitable, or a company bundles their applications with their mobile platform thereby dominating the app market, or when a company runs the largest platform for search but simultaneously distorts it through advertising and mysterious delisting or account shutdowns, then you have problems. These companies are anti-competitively distorting markets in ways that consumers can't understand and requires regulation.
To be fair, I think there is some argument that some of the larger tech giants would benefit consumer welfare by being broken up. Facebook probably less so since people already have choice.
It's only kinda choice. They have such a dominance over the social graph, most people who "leave" them don't actually completely leave. Most of them keep Facebook around as an address-book+messaging. People who "leave" by actually deleting their account then turn around and create obvious dummy accounts.
It's worth remembering that the career antitrust officials at the FTC felt that Google should face antitrust action back in 2012.
It was the political appointees (from both parties) who shut the investigation down.
>The Federal Trade Commission on Thursday faced renewed questions about its handling of its antitrust investigation into Google, after documents revealed that an internal report had recommended stronger action.
The 2012 report, from the agency’s bureau of competition, said that the agency should sue the Internet search company for anticompetitive practices…
In early 2013, the agency unanimously voted not to bring charges after an investigation.
That's a fair point, but I think that there is also a valid concern about distraction. Does focus on FAANG companies result in less attention given to the potentially more dangerous ISPs? Could the ISPs use concern about Amazon, etc as an argument that they are actually less dangerous and should be ignored?
I'm not "dumping" on her policy, I'm dumping on her choice of targets. I'm not happy about the App Store monopoly, but I'm actually upset at Comcast's behavior in every area they do business.
Suggest bi-partisan regulations sounds like a bare minimum. Gather information from specialists. Suggesting to split companies requires a minimum effort: understand what interactions exist now between the teams. I don’t have the impression that she’s done that.
> Also, while FAANG occasionally do things I don’t approve of, they don’t actively lobby congress for things that will make my use of the internet objectively worse (NN, SOPA, etc...).
Is this true? It depends on your use of the internet and definitions of “worse”, but I know that both Google and Facebook have been strong opponents of state-level Internet privacy legislation. They also spend huge amounts on lobbying, SV outspending Wall Street about 2:1 for the last few years. Do telcos spend more?
Alphabet spends about 50-75% more than Verizon or Comcast on lobbying. Which is amazing considering they’re not in a regulated industry. When you’re in a regulated industry, regulators micro-manage your business so there is a lot of lobbying involved dealing with relatively mundane and uncontroversial things. Not big picture stuff, but like cities vetoing fiber nodes because they’re ugly. Tech companies don’t deal with that, so it’s amazing they manage to spend more.
Google does have Fiber though I imagine the extent of that is still much lower than a full Telecoms company. I think the exceptional spending on lobbying comes from the sheer breadth of services that Google provides:
> "Google said it lobbied on dozens of issues, reflecting how integral its services have become to American lives and commerce. The filing cited privacy, data security, antitrust, taxes, tariffs, trade, the opioid crisis, artificial intelligence, cloud computing, autonomous vehicles, immigration, the future of work, encryption and national security."
> Tech companies don’t deal with that, so it’s amazing they manage to spend more.
It's not really that surprising, because they're not only affected by it but on multiple fronts.
There was a time when Google spent hardly anything on lobbying. Meanwhile Hollywood was promoting things like SOPA, Microsoft was at one point operating a major anti-Google lobbying campaign, ISPs want to violate network neutrality, etc.
It's one thing to not want to fight, something else to not respond when provoked.
IMO, that is not the point. Lobby spending can be more indicative of a looming regulatory threat than to protect monopolies that harm consumers.
I also think that Warren is dead wrong. The internet/FB/GOOGL allow smaller businesses to flourish. 15 years ago, only major brands could afford to advertise or reach an audience, now niche companies can exist with a national or international presence.
If anything, these tech monopolies hurt the previously established, Coke/Kraft/Sears and they hurt VC's who can't find a way to scale a niche brand with smaller TAM's or compete directly with Amazon, etc.
No doubt the internet itself has created new opportunities for small businesses, but why do you say that huge companies like Facebook and Google needed to accumulate market power to achieve that?
> because Comcast has -bribed- donated to way more congresspeople than google
Is that true? [1] indicates Google spent more than Comcast in lobbying in q1 2015. I have no idea how this varies quarter by quarter and since 2015, but Google spends a lot lobbying.
I would not be surprised if that extends to campaign contributions as well. Google donates a ton of money to a ton of politicians.
While I don’t know what Google spent their money lobbying for, so I’m not going to pick a side in my comment. I’d say the more important thing isn’t who spent the most money but what they spent it on. If for example Google spent some of that money fighting for Net Neutrality then that is better in my mind then Comcast spending most of their money fighting against it. I’m not saying this is the case or that Google has lobbied for good things. But knowing generally what they lobbied for would be a more useful piece of information.
She's called out Comcast before too — don't jump to the conclusion that someone can't chew gum and walk at the same time without at least a 10 second Google.
A counter-argument is that even someone like you who doesn't use facebook, amazon, and google is still irrevocably affected by their power and behaviors. You seem to think you've escaped them, but you surely have a Shadow Profile in facebook, you browse websites that show you AdSense ads (google), and oh yeah, your civic institutions are manipulable via popular opinion on facebook. Hmmm, you do have a strong point about Comcast and Verizon, but I think there's a false choice in there.
And how would breaking them up prevent any of that? Facebook doesn't have a monopoly on data collection, Google doesn't have a monopoly on display advertising, and Facebook doesn't have a monopoly on peer pressure.
The value and impact on commercialized surveillance depend critically on the ability to generate large databases, both on the any specific indivual, and on the the number of individuals thus affected. Breaking up dataminers probably would help.
And if we take a step back: this isn't necessarily only about privacy, but about capitalism and competition. Data-miner customers, and data-miner subjects might both get a better deal if there were competition between the middle men, at least more than now.
They have monopolies on the political leverage that comes with all of the above.
Verizon and Comcast could play the same game, but they're still more about money than influence - which is why they've chosen to make their stand on killing net neutrality, not on influencing referendums and elections.
FB particularly is incredibly toxic to genuine democracy - not necessarily more toxic than some of the other monsters in the mainstream media shark tank, but certainly not a company that should be allowed to run riot without oversight.
agree, ISPs, cable-providers and wireless carriers should also be on the top of the list. Same here, there is no alternate to Comcast in where I live offering a similar service. They have been doing very slight improvements in service while almost doubling their prices.
Paying $110/month for a business line with 50 down / 10 up, while recently i was offered then refused a promotion upgrade to $140/month with 150 down / 25 up for 3 years. After three years, the pricing goes close $300. Unbelievable deceiving offerings for reduction in current pricing. Totally stuck... :(
On the other hand, the reasons that ISPs are territorial monopolies (local, state, and federal regulatory capture) are hard to address. Splitting territorial monopolies into smaller territorial monopolies is unlikely to help.
Splitting a large monopoly into smaller territorial monopolies gets you all the drawbacks of a monopoly with none of the benefits of centralization. Pretty much a total loss. Improvement in US telecom probably had more to do with demonopolization wholesale at the national level rather than the formation of the baby bells.. which pretty much all failed.
>...rather than the formation of the baby bells.. which pretty much all failed.
The general premise is that the smaller companies allows competition to enter the market. It is precisely because of this competition that the smaller bells all failed - because they were still stuck in the mentality that they needn't compete, whilst also lacking the resources to drive the competition out of town (e.g.: lobbying, buy them out, etc.). They didn't control the whole chain, anymore.
That's supposed to be the idyllic of the capitalist system, yeah?
I'm genuinely not trying to be contrarian, here, but trying to understand how breaking up a monopoly, such as Bell, didn't have any direct consequences on the territorial monopolies.
For example, if Bell had an agreement with 'x' area that they were the sole provider in that area, then as soon as they were no longer Bell, that monopoly agreement essentially hit dissolution, yeah? In principle, that should have an almost immediate net-positive effect on the area, I would think?
How did the Baby Bells fail? AT&T and Verizon are Baby Bells that merged with other Baby Bells.
They did drive out the competition. The Baby Bells inherited the existing infrastructure. Most competing carriers relied on regulations that allowed them to lease access at wholesale rates. The Baby Bells got those regulations overturned. Investors weren't lining up to fund duplicate infrastructure anyway but especially not when the Baby Bells could tie up any project in court for months or years.
Dividing a national monopoly into regional monopolies did almost nothing to improve competition. Vertical disintegration did while it lasted.
The only companies that really managed to compete with the Baby Bells were cable companies, which had built out infrastructure before they started competing.
Comcast (et. al.) monopolies are largely due to local/municipal franchise agreements. Breaking up Comcast into a bunch of little baby Comcasts would not do any good if they are still granted local monopolies by little town boards and city councils.
Also worth noticing that Comcast owns NBCUniversal/NBC/Chris Hayes. Not saying they instructed him specifically on how to opine on this one issue but there is a general conflict of interest.
Those are hard because the are natural monopolies. In the UK it was decided to privatise the national telecom provider and open the market up to to allow other suppliers. We got one other supplier who built all their infrastructure during a few years in the 90s and only in the choicest urban areas. The old monopolist is now solely responsible for supplying all the hard to reach rural areas.
The best solution is probably to accept the national monopoly and socialise the infrastructure, but like that will ever happen...
Comcast's monopoly is held in place by regulation that prevents competition, not market forces. It doesn't need to be broken up, just relax those regulations.
Also Comcast is more politically mature and dangerous, and more capable in manufacturing consent around issues of monopoly.
The average person will have an easier time understanding the concept that his favorite pundit is less discoverable on Google properties than his political opponent than the concept that Comcast owns Sky, MSNBC, Rotten Tomatoes, Universal Pictures, Telemundo, E!, Vox, The Verge and has all manners of pervasive influence in your thought.
Saying Google == email is a bit naive. Google is search, and the internet starts with search. They definitely have a monopoly on search and it's what's essentially powering almost all of Google revenue right now.
That odd SV myopia. The trend in broadband has been more competition. Verizon competes with Comcast in almost its entire FiOS service area. These days it also competes with cellular—15% (and growing) of households have abandoned wired broadband in favor of cellular. There are four major cellular providers.
In tech, the trend has been in the other direction. If you don’t consider Sprint a viable competitor to AT&T, what does that say about Bing and the search market? If cellular isn’t competitive, what about mobile, where there is just Android and iOS?
It would be odd if it were SV myopia, since I'm 1000 miles from there. In 90% of Denver Metro, your choice is Comcast or 1.5mbit CenturyLink. I just bought a house in a new neighborhood, and one of the major selling points was that both CenturyLink and Comcast offer 1gbit service. CenturyLink's service costs about 3/4 of Comcast, and Comcast's service here is already about 1/2 of what they change for gigabit in other areas that don't have competition.
Sure, Google has the search monopoly, but they don't actively squash (or try to get laws made against) any other company trying to build an alternative search engine. I use DDG for most things, but occasionally have to repeat the search on Google because its just better.
Also, my point isn't that FAANG are perfect citizens and don't need any regulation at all, its that the Telecom companies are far worse If we're gearing up enough citizenry outrage to do some monopoly busting, lets start with them instead.
> The trend in broadband has been more competition.
In the past decade I've lived in three different cities, and in each one Comcast was the only provider available. Do we really not think Comcast has a monopoly?
Google has 90% search market share--Comcast doesn't have that even in areas where it is the sole high-speed wired provider (because DSL and cellular are viable alternatives for a significant part of the population). And over large swaths of its service area it isn't the only high-speed wired option. I don't know where you're located, but I've lived in Chicago, Atlanta, DC, Baltimore, Annapolis, New York, and Philadelphia over the last decade. Each place except Baltimore has multiple providers. And Comcast competes with cellular everywhere.
If you take the view that cellular or DSL aren't legitimate competition (despite having double-digit marketshare even where Comcast has no other competition), then Bing and Yahoo! aren't competition for Google either. In which case Google has a nationwide monopoly in search.
It isn't about market share. It is about consumer choice. Access to google alternatives are available to everyone. Many people don't have a reasonable choice when it comes to broadband.
Economists traditionally analyze market concentration in terms of market share, not the mere existence of choice. I will point out that you felt the need to qualify "choice" with "reasonable"--because Comcast competes with DSL and cellular almost everywhere. But that some qualifier applies to search. Even in markets where Comcast is the only cable provider, it usually doesn't have anything close to 90% market share, because DSL and cellular are a "reasonable choice" for quite a lot of people. (About half of households don't subscribe to any streaming video service.) Thus, judging by market share, Google alternatives are apparently even less viable in the search industry than DSL and cellular are in the home broadband industry.
Competitive markets tend toward monopolies because everyone wants the best product. Monopolies are only prevented by vendor lock in or natural barriers (like geography, which mostly does not exist on the Internet), which is why you have a few pseudo competitors in broadband and cellular.
> Economists traditionally analyze market concentration in terms of market share, not the mere existence of choice.
Actually, many economists - and perhaps most of them - argue that what's fundamental to monopolization concerns is the presence of undue barriers to entry that make the market non-contestable. "Market share" and "choice" are not helpful on their own, because a big market share could be entirely due to the incumbent pursuing efficiency and the consumer's best interests, so as to keep themselves ahead of any possible competitors. But this is a benign dynamic that will be quickly corrected should the incumbent fall behind, as competitors would quickly enter the market.
> The trend in broadband has been more competition.
I'm not in SV, but this is 100% not true in my area. Where I live, my choice for broadband providers consists of Comcast. There is no alternative, nor is there any sign that competition is coming.
You have to look at areas where Comcast is the only choice, what the prices and speeds available are there, and the prices and speeds that are suddenly available when a competitor arises.
And phone service is not a viable alternative. Even 50gb (the standard cap it seems nowadays before throttling) gets you only 10-20 hours of video at high quality.
Sure, in some areas the lack of ISP competition is particularly acute. But on the flip side, lack of competition in tech is a nationwide problem. I’ve got gigabit through both Verizon and Comcast at my house. It’s much easier for me to switch between the two than for me to switch off gmail (which has years of my emails), or to switch off Facebook (which all my aunts and uncles use).
As to cellular—it’s a viable alternative for lots of people. Many people don’t need more than 10-20 hours of high quality video per month. 20% of people are already smartphone-only users, and that figure is growing. At the same time, those data caps are growing. Verizon’s 5G service has no data cap. Even if there is a soft cap of a few hundred GB, that’ll be a viable wired replacement for most people.
The trend in tech, by contrast, is the opposite. We’re not on the precipice of increased competition in search or mobile OSs. Indeed, with Microsoft throwing in the towel on Windows Mobile, there is less competition in that space than ever.
You are fortunate to be in one of the few areas where there is true ISP competition. For most of the country there is none. Yes, it may be hard to move off of gmail but it isn’t impossible unlike changing high speed internet providers for most of the country. You can leave Facebook and communicate in other ways. I’m sure your aunts and uncles have phones so you could text or call them.
I don’t see how splitting up Apple or Google would increase the number of mobile OSs. There have been companies in the past that have tried building a mobile OS either for a specific phone or as an open source OS and none of them have really gained traction. There have been rumors for a couple years now of some of the phone manufacturers talking about building their own OS to use in place of android, yet those still haven’t appeared. Microsoft failed at mobile because they were too late to the party, people already knew which mobile experience they preferred.
> You are fortunate to be in one of the few areas where there is true ISP competition. For most of the country there is none.
That's not true, and I'm not sure where people get that idea. Slightly over half the country has two or more wired choices at 25 mbps, and that's as of a few years ago.
And if you're saying that texting my aunt in Bangladesh is a viable alternative to sharing pictures of my kids on Facebook, then it makes no sense to discount satellite, DSL, and cellular as viable alternatives to Comcast. (And indeed they are for many people--just over half the households in Comcast's footprint actually subscribe to its service.)
Upvoted, seriously this, all the talk about Google, Amazon, Facebook hides many of the real problems and monopolies. These 3 don't even make it to a top 100 list of problematic companies.
You don't get it. She's aptly taking advantage of a liberal trend which is negative sentiment to companies causing income stratification in their respective and potential locations.
She doesn't really care about the underlying cause. If that was so then your points would be valid.
But look at how many news articles got published and how many people are getting excited about the thought. Being against successful technology companies is currently what liberals want and she's feeding her party.
Fascinating. This implies that Facebook, Amazon, Google are hated because they pay their rank and file employees well, instead of senior management and shareholders ahoarding all the wealth like traditional big companies do.
because Google/Amazon/Facebook are more consequential to our life and society. But I agree cable companies should also be looked at. TBH there's no hope competition will ever be a thing where heavy infrastructure spending is at play, those companies should be made public and the infrastructure provided for businesses by the government through fees, just like roads and other basic infra.
You can replace Google/Amazon/Facebook in seconds.
You can not change your cable provider in a large number of areas, and even many of the ones that you can, you only have 2 choices between Comcast/Verizon/ATT/Centurylink.
And, miraculously, as soon as a competitor arrives, you see prices drop and speeds increase. It happened in just about every area Google fiber rolled out to.
Comcast also charge $10 for an extra 50GB of data after hitting the cap, and Comcast just happens to own a major network (which if you stream your tv shows, you won't be watching). It just seems incredibly clear that Comcast and other cable companies are clearly taking advantage of their monopoly status at the expense of customers, which is exactly when trust busting is supposed to come into play.
Google doesn't even have a network effect, they just have the World's best search engine. If it ceased to be the World's best, you could leave immediately. Amazon you can replace by just ordering from any of the other countless online vendors.
Facebook is harder to replace, but people thought Myspace would be around forever for the same reasons.
What's an alternative model for telecommunications operation to what's in place today? We broke up Ma Bell, and now we're thinking about breaking up her descendants.
Even if Comcast et al. get broken up, we'll probably just end up with poor customer service from the resultant components until they merge.
Can you avoid using services that run on AWS, though? Or avoid sites that advertise and get analytics from Google? These companies are so dangerous not only because of their consumer-facing services, but the fact that they've made themselves an integral part of our online infrastructure.
> When visiting a site you have the choice to visit or not. Site owners have the choice of what to put up and how to host it.
Not really — my option is basically "indirectly support AWS" or "forego large swaths of the Internet." Site owners have to choose between directly supporting AWS, indirectly supporting AWS via intermediary services that use it, or giving up the economies of scale that AWS's dominance allows.
> That's like asking the government to break up the react framework because more sites are using it and you have no jquery option.
This is not analogous. AWS is a company. React is an open source project.
Sure it might be hard to avoid AWS but 1) Azure is coming for it fast and 2) from a customer standpoint using AWS is pretty independent of selling products on Amazon. If amazon were deranking products whos owners had switched from aws to azure, i might have a different opinion.
agree, ISPs, cable-providers and wireless carriers should also be on the top of the list. Same here, there is no alternate to Comcast in where I live offering a similar service. They have been doing very slight improvements in service while almost doubling their prices.
Paying $110/month for a business line with 50 down / 10 up, while recently i was offered then refused a promotion upgrade to $140/month with 150 down / 25 up for 3 years. After three years, the pricing goes close $300.
Quite deceiving pushy sales people and their offerings with reduction in current pricing. I am considered a loyal grandfathered customer, yet i am totally stuck... :(
> Neither of these would do much to increase your ISP options.
The first one works if you do it properly. One of the lines of business just operates the physical infrastructure. It not only doesn't provide video service, it doesn't even provide internet service -- the end user is never their customer, their only customers are third party ISPs, who all get the same terms.
The physical infrastructure is what makes everything on top of it possible, and at the same time it is one of the most expensive pieces to build, upgrade, and maintain. There needs to be adequate returns on investment in the infrastructure, and that's hard to do in the unbundled model.
If you want high-quality infrastructure, you need to let the infrastructure builder capture a sufficient portion of the value created by that infrastructure. Consider trains. Trains create value for people using the train to get around, but also value for the real estate by the train station. If you only let the train company recover from the rider, you won't incentives that reflect the true value of investing in the train.
Look at Japan, where train service is exceptional. The train company gets to charge both sides. They charge fares to riders, but also are major land owners around train stations, and charge rent to the businesses who benefit from having train service near them. If you had your model in Japan, where train companies just own the tracks and get a modest fee for allowing people to use them, you would not see that kind of high-quality train service.
> The physical infrastructure is what makes everything on top of it possible, and at the same time it is one of the most expensive pieces to build, upgrade, and maintain. There needs to be adequate returns on investment in the infrastructure, and that's hard to do in the unbundled model.
Why is it hard? You charge a price that reflects the cost of building the infrastructure. 200Mbps service can have a higher price than 50Mbps service, providing an incentive to build the capacity necessary to offer it. Which is still true even if the price for the faster service falls to approach the price for the slower service as upgrade cost is paid off. And then there is another upgrade and 1000Mbps service becomes the more expensive one compared to the now more affordable 200Mbps etc.
> Consider trains. Trains create value for people using the train to get around, but also value for the real estate by the train station. If you only let the train company recover from the rider, you won't incentives that reflect the true value of investing in the train.
You're essentially arguing against there being efficient Coasian bargaining. But the arguments against it are usually related to transaction costs, which don't seem to help you here. If Comcast can't charge anything to Netflix and as a result Netflix service is slightly less expensive to the user and internet service is slightly more expensive to the user, the user is not engaging in any new transactions and the net to the user is approximately zero. Moreover, then there is no transaction happening between Comcast and Netflix, which reduces the overall number of transactions that have to occur.
I think local loop unbundling in the UK might only apply to telephone lines, not cable or fiber lines. If that's the case, then the speed comparison should be between UK and US DSL service, not UK and US broadband in general.
...so maybe it is time to finally admit that ISPs are natural monopolies, just like the water company or power company, and regulate them as a utility and ensure that local municipalities who want to provide these services for their residents have a legal path to do so?
The situation right now is so ridiculous that some states have laws outright barring municipal ISPs. If a breakup into regional private monopolies is the stepping stone to reducing ISP influence on government enough to get a more sane legal framework, I'll take it.
More effective than breaking them up would be imposing regulation. Force the incumbents to allow 3rd parties to use their infrastructure at a regulated wholesale rate, and then compete on service.
In Canada, there's a bunch of smaller cable resellers. For instance, Shaw does cable/phone/tv and also has some wifi infrastructure deals with various commercial businesses, and provides "Shaw Go Wifi" access to internet subscribers.
In my local area, we also have LightSpeed which resells access to Shaw for a cheaper rate, but you need to buy your own modem, and there's no wifi access around town. Trade-offs, and a slightly more healthy marketplace.
"But we need to do X first!" is not a good reason to not do Y, a different-but-still-good thing. All of these companies need to be broken up, and the Department of Justice Anti-Trust division has enough employees to do it.
These monolithic companies are sucking up all of the power in our economy and have destroyed the competitive markets. As the Economist recently said "Profits are too high. America needs a giant dose of competition." https://www.economist.com/briefing/2016/03/26/too-much-of-a-...
Capitalism without competition isn't really capitalism, but feudalism.
Splitting up "monopolies" won't create competition, especially in the case of vertical integration. What would help competition is intellectual property reforms, deregulation, tax simplification, occupational licensing reforms, etc. But almost everyone weaving the "evil monopoly corporations" narrative explicitly ignores practical policies that address those.
I agree that the primary cause of all this is government interference regarding barriers to entry. However, did the regulation help insulate these companies against competition in the first place or did they use their money and power once established to pass laws that would keep competitors at bay? Lobbying reaps disproportionate rewards---those CEOs who stick by their non-rent-seeking principles are leaving big money on the table and will likely be replaced by shareholders. (Econ Talk had a good podcast on this recently.)
Regarding trust busting, it is worth noting that these tech giants give an immense amount of money and support to the left. Might as well give Warren some bipartisan support so we can thrash them a bit---it would be sweet poetic justice to attack these statist zealots with the very government power they worship.
On the internet it's hard to tell if that is real enthusiasm or sarcasm.
Enthusiasm: Telco cartels need more oversight, make them government run, so they are beholden to the people. They serve themselves at a nice profit at everyone's expense, but internet communications have become so intertwined in culture, commerce, national security, that there really is no reason they shouldn't be part of the government apparatus.
Sarcasm: Government run telcos will cost taxpayers even more money, work worse than they do now, and increase government pensions to be payed out. US Internet will stagnate as a result of people getting into telco as a cushy government position.
There's precedent to this in the USA. The US Government once passed regulations that caused one of the largest companies in America to break up into three smaller companies. Today those, three companies are entirely independent, employ over 400,000 people combined, and have a combined net work of over $400B.
Those companies are Boeing Aircraft (153k employees, $244B market value), United Technologies (202k employees, $148B market value), and United Airlines (88k employees, $33B market value).[0]
What most people perceive as a threat to the market is when one company takes over an entire single market. And that is a problem, no doubt. But in the case of Boeing, the problem was that one company had such an advantage vertically- lose money on planes in order to make money on shipping, or vice versa, as needed. It meant it could win in whichever market it wanted to and slowly come to dominate all of those markets. The synergies of doing it all internally meant it could win at everything.
If one uses that situation as a precedent, one can start to see the parallels in many of the FAANG companies today.
[0] "The Air Mail Act of 1934 prohibited airlines and manufacturers from being under the same corporate umbrella, so the company split into three smaller companies – Boeing Airplane Company, United Airlines, and United Aircraft Corporation, the precursor to United Technologies." https://en.wikipedia.org/wiki/Boeing
The problem is this type of vertical splitting doesn't solve the problem of large tech companies. It's like treating a burst appendix with a kidney transplant.
The problem of Amazon is that it is effectively the only online shopping place, and thus can act as a Monopsony in hiring it's workers for warehouses, splitting AWS out of that doesn't fix that problem. Maybe you could require that distribution centers be owned by separate companies. This might work but locally each Center would still be a Monopsony and thus cause the same problem. Maybe if you capped the size of distribution center you could force lots of smaller ones to be built, but at this point I worry that you are going to end up making shipping slower and more expensive.
The problem of Google is they are very dominate in the Ads space splitting out the Ads portion into another company would not solve that. Facebook's problems is everyone has put their data in Facebook has friends in Facebook and feel compelled to keep using it. I don't see how splitting up the company into, Instagram, What's App, and Facebook solves the network effects of those apps.
Splitting up tech companies is not a punishment to make the CEO feel bad or change their ways. It is a technique to change how we need the market works to benefit the large population. As such we need to think about how to split them, the effects, and most importantly if the effect achieves the intended result.
If we had a progressive corporate tax, I think all the problems would sort themselves out.
You want to build a trillion dollar company? Fine. Corporate tax rate of 50%. You're a small business with less than $1M in revenue. Cool. Corporate tax rate of 0%.
Big companies will break up to take advantage of the tax code. Problem solved.
Instead, the bigger you are, the harder you can lobby for tax breaks. Currently, if you're a $1M company, that sucks. You pay 20%+. If you're Amazon, you pay $0.
Only profits are taxed, and they're only vaguely related to revenue, and both profit and revenue are vaguely related to whether a company is a monopoly or not. Profit is an okay-ish measure of how much a monopoly a company is, but not great. Comcast and Amazon turn profits of ~10 billion. Apple is 60 billion, microsoft is 16 billion. Amazon is much more of a monopoly than either of those, and Comcast enjoys a much stronger natural monopoly as well. The industries are just different sizes and the supply/demand curves are different, and for some reason people are just super willing to pay an absurd premium for Apple products.
A progressive corporate tax still makes some sense, and there's basically no excuse for their taxes being less simple than a citizen's. However active management is still required. Markets are fast and efficient but they are often dumb.
> Amazon is much more of a monopoly than either of those
In what market are they a monopoly? Seriously. Amazon retail competes with walmart and target both of which offer online sales and AWS competes heavily with Azure and Google cloud. In what way is Amazon a monopoly?
Taking morality out of it for the time-being, taxes serve as an additional barrier to entry for smaller companies; these tech giants have hordes of lawyers and accountants to make sure they pay very minimal taxes (if any). These companies are also multinational, so they can keep money overseas and search for tax havens globally---a choice smaller companies don't have.
The point is: you can give big companies whatever rate you want, but they're in the strongest position to circumvent it, and they will. The better choice is to lower taxes substantially and give the smaller companies a chance to accumulate capital faster, so they can compete.
I feel like all that will create is "partnership contracts" where a large company will be split into the "ideal" size tax-wise while still being run by an "advisory board". Compensation gets interesting at that point though, so many its an interesting idea.
a constellation of partnerships happening through more tangible corporate boundaries sounds much better. right now it seems to happen in unclear ways, and I assume is much less observable from outside forces (e.g. Sidewalk Labs & Google & Intersection, etc.)
The IRS is pretty awesome and incredibly underfunded, yes.
But we could simplify the tax code... The bigger the surface area, the easier it is to find a vulnerability / loophole. And anymore, the tax code is basically being written by BigCos to protect their interests and provide breaks for themselves.
Enforcing a tax code that's 20-feet tall when printed out when companies are as complicated as they are -- it's a wonder anyone pays taxes. It would take years in court to figure out what a company honestly owes.
If it's simple -- you make x profit or y revenue -- then you pay z dollars -- for any public company, good luck grossly cheating that.
People always ask this as if it's impossible to change laws or have agencies that actually want to follow through on their missions. As if corporations are so devious and brilliant they are unfindable. It's just not true. If you vote for people who actually want taxes, the enforcement takes care of itself. It works the exact same the other way, because these people gut agencies and replace them.
Taxes don't solve these problems. In your setup, companies would "break up" but only on paper to take advantage of tax code. Outside of papers filed in Delaware no one would even know these were separate companies. Many billionaires often have few 100s LLCs filed in such a complex graph of ownerships that would take days to decipher.
> Taxes don't solve these problems. In your setup, companies would "break up" but only on paper to take advantage of tax code. Outside of papers filed in Delaware no one would even know these were separate companies. Many billionaires often have few 100s LLCs filed in such a complex graph of ownerships that would take days to decipher.
An essential point any plan like the GP's would be to make conduct like you describe illegal, and make sure those laws are adequately enforced and have enough teeth to be a deterrent.
I agree it should be harder the bigger you are, but it's not the tax rate. Right now, FAANGs either run a 0% profit margin, or book their profits to Ireland.
I think this is an absolutely incredible idea if it could actually be made in a way such that the taxation and other factors could not be easily avoided. But there's one unspoken problem with taxes and particularly corporate taxes.
Large companies are perceived as being proportionally beneficial to the US economy. If you made the US a place that was meaningfully undesirable for corporations, they can leave. And even if these companies did not leave, you would strongly deter new companies. For instance imagine you were able to create your system such that it could not be simply avoided through various typical methods. So big companies really did risk losing up to 50% of their net. How long would it take before e.g. YCombinator started requiring new companies to incorporate in e.g. Hong Kong (or wherever) instead of the US? Perhaps even moving the entire operation abroad.
So even though I think this would be an absolutely incredible idea, I do not think it would work or be meaningfully considered in practice.
generally, large corporations (and wealthy people) do not, and will not, leave the US because of taxes. people want to live here and companies want to do business here. badly. but they also want an unfair advantage and will say anything (like "we'll just take our toys and leave!") to try to get it.
It was actually common, they still do business here, before the tax law change they would do an inversion so they'd no longer be taxed by the US on their foreign profits (US had worldwide taxation while most every other country did not).
yes, our tilted tax system let them do that without any repercussion. not only can they keep doing business as they always have, they get extra incentive on top. let's just equalize the tax treatment of individuals and corporations already.
I don't think the relationship between monopoly behavior is directly correlated with size. Your solution is a "one size fits all" approach will would probably cause problems for big markets with non-monopoly players.
Splitting AWS out of Amazon isn't the thing that really matters though so much as preventing Amazon from operating a store AND a marketplace on the same site, not to mention having its own product lines. If you want to sell something online and you're not already a household name then you're at a big disadvantage if you're not on Amazon, but if you do sell there then the price is giving Amazon insight into your business. And if Amazon chooses it can basically bury you by promoting your competitors or worse, selling its own copy of your product.
> Splitting up tech companies is not a punishment to make the CEO feel bad or change their ways. It is a technique to change how we need the market works to benefit the large population. As such we need to think about how to split them, the effects, and most importantly if the effect achieves the intended result.
In my opinion, Amazon as a platform has leveraged network effects to be both a monopsony and a monopoly: in essence by aggregating both consumers and suppliers, both sides of the transaction feel compelled to use Amazon as a middle man.
This is very insightful. When one considers how a monolith application could be split into a collection of microservices but STILL serve the same user experience, it becomes evident how trust-busting won't affect meaningful change.
Ma Bell wasn't created naturally at all. It's monopoly status was granted by the federal government. This is fundamentally different from Facebook, Amazon, etc. If anything, the large ISPs like ATT, Verizon, and Spectrum should be looked at, but solving the problems of ISP monopolization will take a lot more than just breaking up territorial monopolies into smaller territorial monopolies.
Why does it matter whether a monopoly is "natural" or not, let alone that the definition of "naturally" is sort of laughable given the legal framework put in place for our government is the economy in the first place? Just as you get a lot of government run monopolies with pure socialism, you get a lot of "market-driven" monopolies with pure capitalism. Both should be broken up.
The point is that they're caused by different processes, and the steps to ensure that it doesn't happen again after you break them up are also very different because of that.
The US also broke up Ma Bell in 1956, forcing the spinoff of Bell Canada and Caribbean operations, and before that in 1925, breaking off other international operations into ITT.
How would this work in practice though? Eg Amazon. Bezos is a major shareholder. Imagine splitting AWS from the retail arm, which I guess would be a sensible split point. If Bezos controls both, then what would really change?
I'm not critical to the idea nor supportive - I'm just curious to learn more.
That was the case when Standard Oil was broken up and it's not a problem. The retail arm becomes free to get their cloud computing needs from others -- say Azure or Google. Bezos can't force them to get a worse deal at AWS simply because he owns the AWS. A lot of the arguments for breaking up companies come from this. It can make the components more efficient once they're freed from the shackles of being locked in. Likewise, the crappy parts of the big conglomerate can't coast on having a guaranteed customer. This is the whole point of capitalism. Monopolies are the anti-thesis of capitalism.
I don't think it's fair to say the break-up was a failure even if in the near term they still coordinated. In the long term, the oil companies competed with each other. Even if Rockefeller became wealthier, it only adds to the original point: breaking up monopolies unlock value for shareholders and increases efficiency. I highly doubt anyone in the main stream schools of economics would call the Standard Oil breakup a failure. That Rockefeller wasn't punished is immaterial to the breakup itself. The point here isn't to punish Bezos or anyone else. It's about efficiency and fairness. In that sense, that goal was accomplished. No single oil company today wields the power that SO once did.
Also, those guys meeting up together at Rockefeller's house to coordinate would likely be illegal today and probably was back then too.
Did you read her proposal? There would be a structural separation from distribution and first party goods. Just like railroads couldn't own interests in the commodities they were transporting, Amazon couldn't operate a market place and also own private label brands.
So what about Walmart who does double Amazon in revenue AND has their own private label brands? They have so much retail power they are known to get manufacturers by the balls and make manufacturers accept the cost they want instead.
or Costco? $130B in revenue and I dont hear clamor for Costco to be split from Kirkland.
By this logic Apple shouldnt be allowed to have Apps in its App store, right? Or are they banned from selling first and third party phone cases in store?
CVS shouldnt be allowed its own generic drugs.
At what point does this become "companies arent allowed to make/sell their own products if they also resell other companies products."
And lets be serious: you want to take away Google's ability to choose the ranking of results? Thats their entire company's purpose. People go to google because they like the order the results come in. If google starts delivering bad results, that opens opportunity for other companies.
> Warren's team said that the proposal would also apply to Apple. "They would have to structurally separate -- choosing between, for example, running the App Store or offering their own apps,
Walmart isn't a platform (excluding Jet.com). They purchase goods (take on risk) prior to selling them.
Amazon is a marketplace meaning the seller takes on all of the risk and pays Amazon for the privilege. Amazon then uses the data that marketplace generates to undercut the sellers with their private labels.
That sucks because every company that actually cares enough about its customer experience eventually vertically integrates, and it results in a better experience.
For instance, Apple makes hardware, software, services and they all fit together perfectly. Tesla distributes cars in addition to making them, leading to a better buying experience.
Everything Amazon does is in-line with this principle as well.
Is the end game laws similar to what we have for alcoholic beverages and cars? Where distribution and manufacturing are artificially separated?
How would this be applied? I feel like nearly every grocery store chain in the USA has it's own brand competing with same 3rd party brands they carry. Whole Foods had "360", Walgreens has "Nice". It's been too long since I've been to a Safeway, a Lucky's, a Ralph's, etc but it became pretty clear that each one had it's own brand. And let's not forget Trader Joe's which is almost 90% all it's own brand.
Companies with an annual global revenue of $25 billion or more and that offer to the public an online marketplace, an exchange, or a platform for connecting third parties would be designated as "platform utilities." … These companies would be prohibited from owning both the platform utility and any participants on that platform.
Thus Safeway would be exempt from the regulation because (a) they do not offer an online marketplace and (b) they do not connect third parties (but instead act as an intermediary).
Similarly, it appears that only Amazon Marketplace, not the retail arm of Amazon, would be affected by this regulation.
Where is the demonstrated consumer harm that warrants monopoly treatment? Adding private labels increases the amount of selection consumers have.
You’d think we would hear more about it since basically every physical retailer owns their own brands that they sell in their own marketplaces already.
As Elizabeth Warren makes clear in her post, "demonstrated consumer harm" isn't the only justification for antitrust action. We can't demonstrate the innovation that would occur in a competitive marketplace, but we break up monopolies with the faith that it will. This was the prevailing view until the late 20th century. Hopefully we'll get back to it.
> ... legislation that requires large tech platforms to be designated as “Platform Utilities” and broken apart from any participant on that platform.
Companies with an annual global revenue of $25 billion or more and that offer to the public an online marketplace, an exchange, or a platform for connecting third parties would be designated as “platform utilities.”
These companies would be prohibited from owning both the platform utility and any participants on that platform. Platform utilities would be required to meet a standard of fair, reasonable, and nondiscriminatory dealing with users. Platform utilities would not be allowed to transfer or share data with third parties.
One of the perceived risks of breaking up the tech giants is that they will be at a competitive disadvantage to their foreign peers. The degree of competitive risk at the time of Boeing's split was perceived as lower. As long as Americans are ok with losing some areas of advantages, they should move forward.
Dems/libs are fools when it comes to this. They never have the backbone to take on foreign Govts. I'm totally against this because we are in a globalized world and these companies need to be large and strong to out-compete with others across the world.
Saying "we are in a globalized world" makes it seem like that is just the nature of things and not the outcome of specific policies taken by primarily the US in the post-WW2 era. Corporate concentration is against capitalism, and dealing with global competitors can be dealt with with the tools we already have, like the current administration is with trade policy.
It is not as simple as it looks. Some degree of globalization already existed for tens of thousands of years, whether through colonialism, Asia-MiddleEast-Europe trade and many more. Even though there are ups and downs in the cycle of regional/global trade, it has continued to move towards more integration, especially due to technological innovations seen in the past 500 years.
Nations that decide to close down in certain areas, may find themselves in a competitive disadvantage to peers making use of data, economies of scale, technology, labour, etc. This is something we have seen happen in history.
Anti-competition law and it's interpretation has changed drastically in the US after Robert Bork's book 'The Antitrust Paradox' (1978). Reagan administration used it as their bible.
Yes. Broadly speaking, the law went from looking at concentration as a bad thing on its own to only looking at whether consumer prices would be impacted. The prevalent idea now is that mega-mergers will reduce prices because of economies of scale.
This is classic example of short term optimization. Sure, prices can be lower now but it might stagnate there for long time because there is no competition allowed. If it is technologically feasible, competition would find the global optimal point eventually in longer term but monopolies will settle in local minima.
Probably why a company like amazon has achieved elusive scrutiny is that they give consumers cheapest prices but squeeze suppliers. Suppliers most definitely hate amazons dominant position.
The law was not changed. The interpretation of the law was changed, as you describe, initially by Republicans but Clinton and Obama maintained the Republican interpretation.
It's a legitimate concern. After Standard Oil was split up, Rockefeller still arranged meetings of the heads of the now-separated companies.
However as long as the companies are well regulated and publicly traded, I think the concern diminishes over time. Each manager has an incentive to look out for their own shareholders, their own bonuses. And if activist shareholders suspect one company is subsidizing another, they can happily buy the undervalued company, raise a ruckus (and maybe some lawsuits), and profit when the subsidies end.
I don’t know about “help”, but it will still change something - over time the different management teams will diverge (in some sense), even if the shareholders stay mostly the same.
Per Das Wiki [1]: "The government had little choice but to return service to the commercial airlines, but did so with several new conditions. The Air Mail Act of June 12, 1934, drafted at the height of the crisis by Black (and known as the "Black-McKellar bill"), restored competitive bidding, closely regulated airmail labor operations,[n 28] dissolved the holding companies that brought together airlines and aircraft manufacturers, and prevented companies that held the old contracts from obtaining new ones."
Comparisons will be made to Microsoft and Internet Explorer but to me the really crucial part of this isn't market dominance in the "what app are you using" sense, it's data.
Facebook, Google and Amazon really do have an unprecedented amount of data on us. And keep vacuuming up more and more of it. Facebook should never have been allowed to buy WhatsApp (and maybe not Instagram though I'm less concerned about that one). Google should never have been allowed to buy DoubleClick.
Question is how you'd effectively roll that back now. I'm concerned that the government doesn't have enough people with the technical knowledge to really tackle the data question, but I'm still glad Warren is starting the conversation. And she's got some interesting ideas:
> Companies with an annual global revenue of $25 billion or more and that offer to the public an online marketplace, an exchange, or a platform for connecting third parties would be designated as “platform utilities.”
> These companies would be prohibited from owning both the platform utility and any participants on that platform. Platform utilities would be required to meet a standard of fair, reasonable, and nondiscriminatory dealing with users. Platform utilities would not be allowed to transfer or share data with third parties.
This is also the first idea I've seen that tries to deal with the free speech problem on the internet. A lot of platforms today apply varying amounts of censorship (like youtube's copyright takedown mess), but there isn't really anything we can do because it's a privately owned platform and they can do whatever they want. But when they control such a large amount of mindshare, we end up putting the idea of free speech at risk.
Perhaps the platform utility designation will let us enforce a kind of "content neutrality" instead.
Just because something has a lot of mindshare doesn't mean you have any business silencing their choices. People who don't agree with the policies of private companies like Facebook can simply not use it. Try Gab if you want a private company that is anti-censorship.
It seems like you are just repeating the same specious point that OP was refuting.
Right now, it feels like companies like Google are mostly silencing hate speech, violent extremists, and pornography, but there is no guarantee that their censorship will remain that way in the future. In a not-so-hypothetical future where a single private company has taken almost whole control over online media and starts imposing heavy censorship over non-offensive speech, are we going to continue saying "it's a private company, and if you don't like it, you can just share your opinions on this platform that nobody reads"?
Presumably if they blocked speech that most people actually wanted to see, they'd leave to one of the billion other messaging tools. You can still say anything you want over email.
Yes, that's exactly what I'm going to do. Your opinion has no right to exist on any platform. Don't like it? You can move off of it. Bring other people to a platform that goes by rules you like. I don't use Gab, I am not interested in it, but it exists and has rules you may prefer if this hypothetical situation were to occur.
I like diverse viewpoints being allowed. It is unacceptable, however, to be so entitled as to try to force companies not to censor whatever they feel like.
Would you be similarly comfortable with your cell provider censoring your calls and/or texts? After all, it's unacceptable to force them not to censor whatever they feel like.
We're talking about protected classes here, and I don't think it's equally unacceptable. On a fundamental level, inherent characteristics (race) are very different from ideas (speech). So I think you can be in favor of anti-discrimination on basis of who you are, while also being against beliefs becoming a protected class.
Though, just so you know where I'm coming from, in my ideal world it would be strong social and business pressures that enforced the idea of protected classes, not regulation. I'd support any competitor which was more ethical, but complex issue.
I used to think like you do, but what changed my mind was that I tried to consider whether a hands-off approach will maximize total freedom.
If, by regulating the way people do business, we can increase total freedom in the world, I think that it's a worthwhile exchange. The way we do business is already regulated, and is one of the powers that we explicitly grant the government in the constitution.
The way I see it, forcing social platforms to accept free speech is really just a commercial regulation, and not a speech regulation. After all, we all understand that this post doesn't reflect the opinions of YC, and thus forcing YC to accept this post doesn't restrict anyone's freedom of speech.
The flaw in this logic is that in today's online world if you want to participate in the relevant discourse, where everyone else is participating, it's Facebook/Twitter/Reddit/etc...
This is like saying if you don't like the debate happening in your city hall or town square, go to the small gathering in the woods to have your conversations.. where no one will hear you, and what you say will have no impact.
I know this the analogy is flawed because there is no "public space" on the Internet.. The places we have chosen to hold our public discourse online are all privately owned..
It's a challenging problem and "go somewhere else" is not a viable solution because it marginalizes and suppresses unpopular opinions or minority groups..
That works to some degree, but there's some point at where it is more beneficial to just spin the platform into its own company and let it be regulated while all your other services can operate freely without having to hide most of their revenue.
Sure, some of your IP moves to a new company that is more restricted in how it can operate. But at least your marketplace doesn't hold back everything else your company is doing.
PG&E is fine with this model and they don't have to give up their IP or profits. Essentially it would turn Google and the other tech platforms into legal monopolies. That being said, I think this is probably the best way we can keep getting awesome technology from Google while at least having some government oversight. I kinda feel like were getting to the point in human evolution where we need giant giant groups of people to work together to solve really big technical problems. While problematic on many levels, a government sanctioned and regulated monopoly around google could potentially accomplish those things.
> Losing IP to what would become a 'public utility' would discourage me from ever trying to develop beyond the 24.9bn mark.
(it wouldn't be a public utility but) I feel like that's kind of the point? Encourage dozens of smaller (if multi-billion counts as "small") businesses to thrive rather than one 25bn+ business. And if you do want to go big, you have to do it in a way that lifts up significantly smaller businesses.
Google isn’t only search and ads. Their adverse is worse in smaller markets like Maps and Cloud, where they use revenue from another market to commoditize and build a moat in another — thereby unfairly competing.
Elizabeth Warren specifically mentions separating Search from Ads as something she'd do to Google. Most likely because that's as deeply as her target audience is going to think about it.
Android is perhaps the closest in comparison to Microsoft/Internet Explorer. Spin off Android into its own company, including the Play Store. There would be nothing stopping Google from keeping their apps in the Play Store, but they would sit on the same level as competing mapping and search apps, and users would choose which one to use instead of have it preinstalled.
You need to remember that android's customers aren't the end users of the phones, its customers are the OEMs. Spinning off android into its own company separate from Google wouldn't mean the end user gets a preference of which mapping or search app to install, it means the company selling the phone (either the phone brand or the cell network) gets to choose.
The end user would get a choice by buying a specific phone, though, no? The Android device market, at least, isn't heavily monopolized, and there are many options, including devices that are explicitly advertised as open and cruft-free.
You have the option as an Android provider to use android and provide your own services OR ship the device with Google Play services. Amazon for example does the former.
I actually think Android is a really bad example precisely because all the useful google apps ARE separate from the OS. Its just that what people think of as android is actually mostly Play Services now.
I would download all those, but there's also a lot of Google stuff pre-installed on my phone that I wouldn't have downloaded: the Google search bar, Google assistant, Google music, Hangouts, Google+, just to name a few.
OK but Android is a loss leader for Google's search business. If you spin off Android and Android is no longer subsidized by the search business doesnt that either
1. Raise prices for customers since now someone has to pay for Android development/upkeep/progress, or
2. Starve and kill Android and leave customers with just one major app store (Apple)?
That would be great. Android has a competition-destroying business model: giving away the OS for free, while subsidizing OS development with ad revenue from unrelated services. It killed companies like Symbian who just sold you an OS in exchange for a license fee, without trying to marry that to services you can't easily switch away from because they have all your data.
So basically big companies will no longer have any reason to work on open source projects anymore if they can't fund them with "unrelated services?" You can head over to github, clone the AOSP tree, and do whatever the heck you want with it. Separately, Google has developed the Play ecosystem, and several of its own apps for Android. If you want you phone to have that stuff, you tell Google and you join the Open Handset Alliance or whatever its called now. If you don't, you start from AOSP (as does Amazon, for example) and don't give Google the time of day. So they give away a massive boost to anyone who wants to make a mobile device, and somehow that's a bad thing?
Possibly true. But the direct exchange of money for a product or service creates a salutory incentive structure. And unfortunately, the rise of open source has been associated with the rise of indirect monetization models that aren't as beneficial, especially in the consumer space.
Painting this as an unintended consequence of open source is really interesting. The rise of free open source alternatives to proprietary products has encouraged companies to provide products free, but these companies aren't going to be motivated to provide these products without some avenue for profit.
Defining by dollar amount is never a good idea due to inflation/market appreciation. There are so many laws and regulations that are pinned to a dollar amount that get more and more out of date each year.
It should always be something that's a better true absolute measure, for example market penetration.
Isn't data collection by the ISPs/phone companies a bigger issue? Consumers truly have no choice there. Whereas you could get by without FAANG, though it'd be inconvenient.
She is inferring that Google/Amazon/Facebook are committing anti-trust crimes? What proof does she have?
>Companies would be barred from transferring or sharing users’ data with third parties.
That can be done without breaking them up. I don't think she realizes that splitting up amazon and amazon basics will do little to nothing.
There are other things that can be done. You could require freedom of speech apply to industry leaders for example. However I suspect the democrats would never propose that because it would be bad for them.
>I don't think she realizes that splitting up amazon and amazon basics will do little to nothing.
I think amazon : amazon basics is a great example of antitrust/unfair monopoly the same as google search : almost all consumer facing google products.
Both amazon and google search are the dominate online market leaders in their respective categories. In amazons case they unfairly use their market position to begin offering amazon private label products on their platform. They know what users are looking for, spend the most on, and they can give their own products dominate positions in the UI. In the case of google they too unfairly use their position as a market leader against their own customers (advertisers), so say you are a hotel booking platform and spend $x with google, google knows the market (searches, clicks, etc...) so google launches their own hotel booking, gives their in-house service priority in search results over existing market incumbents and self bids on google search advertising for key industry terms to drive up costs of advertisers to keep in business.
It’s kind of like standard oil buying up the railroads so they owned the supply chain and no other oil could be moved. It’s unfairly using your market position, not to compete, but to be anti competitive to the detriment of consumers.
I’d like to see the tech giants prevented from unfairly using their market dominance to stifle competition. As we saw with the break up of standard oil...competition is good for consumers.
> In amazons case they unfairly use their market position to begin offering amazon private label products on their platform. They know what users are looking for, spend the most on, and they can give their own products dominate positions in the UI.
1) How is that different than a department store? If you go into housewares at Macy's you'll see their own branded stuff along with other brands. So at issue is not the practice itself, but rather that the digital marketplace makes it easier and more efficient.
2) The consumer (along with Amazon) is a beneficiary here. The losers are brands trying to sell commodity items at a markup. The play is not to undercut all the power strip sellers (to take an example) and once they are out of business, jack up the price. The play is to take the margin due to marketing and brand equity from the sellers and split it between the consumer and Jeff Bezos, so rather than being harmed, the consumer benefits from this.
I think it is different. When a department store buys a third-party product, it pays for it and the Store bears the risk of the item not selling. If Macy's decides to make their own brand, they did so by transferring risk from manufacturer to themselves in the beginning; if a product didn't sell enough, they had stake in it. There are some successes (store-brands) and some failures (brands they bought, never worked)
In the Amazon Basics case, AMZN doesn't own inventory for the product at all. All the risk is to be borne by the 3rd party manufacturer. When Amazon looks at its data and sees a product succeeding, it creates a Basics product with no risk - it knows this thing sells. There is no way Amazon can 'fail' per se.
This essentially is the difference. Any manufacturer is likely scared of success on the Amazon Marketplace. If too successful, it can be Amazon-Basic'ed.
> The consumer (along with Amazon) is a beneficiary here. The losers are brands trying to sell commodity items at a markup.
I think in the short-term for that product - yes, the consumer finds a cheaper product, but Amazon will always have an economies-of-scale advantage.
However, long-term, I think innovators will not know if making a highly successful product (which is always difficult to sell cheap because scale isn't achieved) is worth it.
If Macy's sells a third party product (say, a piece of cookware) and sees it doing well, then makes and sells a copy of it they don't seem to have taken more risk than Amazon.
It also feels pretty similar to what fashion designers have accused department stores of doing for decades: letting them take the risk, then "following fast" (or stealing designs, depending on your perspective) when something turns out to be popular.
> How is that different than a department store? If you go into housewares at Macy's you'll see their own branded stuff along with other brands. So at issue is not the practice itself, but rather that the digital marketplace makes it easier and more efficient.
It's 100% the exact same thing. Go to Walmart and see thousands of "Great Value" products and you'll get the exact same thing. Warren is off her rocker on this one. We have real tech monopolies in the Cable/ISP industry but we're talking about Amazon and Facebook.
The issue comes with the monopoly status. If a company controls a certain % of marketshare, that behavior crosses into anti-competitive.
If 90% of retail stores were Walmart because they owned a significant percentage of real-estate in key markets (thus, preventing other retailers from moving in), then their Great Value offerings would also be anti-competitive.
Amazon's behavior is a textbook anti-competition. They literally build copies of products offered by other merchants on their site, then rank them higher in search results, often times, driving the merchants out of business.
> If a company controls a certain % of marketshare, that behavior crosses into anti-competitive.
That's just incorrect. There's nothing wrong with controlling 100% of the market share, as long as you don't use your position to illegally prevent competition.
> Amazon's behavior is a textbook anti-competition.
That completely counters the point you just made. Amazon accounts for maybe 5% of retail sales, and Walmart is closer to 15%. Even in the eCommerce market their share is around 50%. Vastly lower than the 90% you threw out there.
> They literally build copies of products offered by other merchants on their site
Every retail company does this through suppliers. It's called "white label" and it's an industry standard. And Amazon does not build them, they license another companies product.
> then rank them higher in search results,
Citation needed.
> often times, driving the merchants out of business.
Again, citation needed. Particularly the "often times".
> as long as you don't use your position to illegally prevent competition.
Which is why I said, literally, "their behavior crosses into anti-competitive." You can compete with vendors, or you can control most of the market. But you can't do both: control the market, then use that advantage to drive competition out of business.
> Even in the eCommerce market their share is around 50%.
50% is a staggeringly high market share. For reference, Toyota has less than 10% market share.
> And Amazon does not build them, they license another companies product.
Those companies are accusing amazon of literally copying their unique products. We're not talking about buying batteries or something from a supplier. Amazon is literally copying existing products that do well.
Here's an ex-employee discussing the topic:
> Amazon sees your product is doing very well, they have the retained performance data, and Amazon copies to their best of their ability as a “generic version.” Through subtle advertising, and imitations of the successful attributes of your product, their product cuts straight to the top ranked in your categories.
> Which is why I said, literally, "their behavior crosses into anti-competitive."
Yes, and I'm saying that it isn't true. Merely owning majority market share doesn't make a company anti-competitive. Anti-competitive behavior does. And while it takes the latter following the former to work, it certainly isn't guaranteed.
> You can compete with vendors, or you can control most of the market. But you can't do both: control the market, then use that advantage to drive competition out of business.
They absolutely can drive competition out of business as long as they aren't using their position to do so illegally. Gmail shut down a lot of email providers, not through anti-competitive behavior but through providing a more compelling product. Amazon has yet to successfully drive any supplier out of business. There's an argument that they broke Toys R Us, but that wasn't anti-competitive, that was through introducing toys that weren't severely overpriced. Walmart assisted with that.
> 50% is a staggeringly high market share. For reference, Toyota has less than 10% market share.
Toyota is in a nearly 100 year old industry which has multiple multi-national companies competing. iRobot has a 62% market share but nobody is looking to take down big vacuum.
50% market share of a sub-market within a major market is a weak argument. While they have 50% of online market share, they have something like 9% of actual retail sales, which is considerably less than Walmart.
Your argument was that Amazon ranks them higher in search results. Both of these articles are discussing Amazon using white-label suppliers to build competing products. That's not the same thing. Every major retailer has been building white-label and private-label products for decades.
> Those companies are accusing amazon of literally copying their unique products.
You'll notice what they aren't doing is suing Amazon for patent-infringement. The very article you posted shows that while Amazon makes competing products, they don't violate patents.
> Amazon is literally copying existing products that do well.
No they are making competing products. That's not copying, that's called "competition".
> their product cuts straight to the top ranked in your categories.
That should have been a very clear indicator for you, but you kind of missed the point. Amazon doesn't rank their products higher. The ranking algorithm is generic, and largely tied to top selling items in a category. When you see two products that are very similar, and one is half the cost of the other, you buy the cheaper market.
It seems, to me at least, your issue isn't Amazon. Your issue is the consumer market doing exactly what it's always done.
You seem to be breaking up my arguments into segments so that you can ignore the big picture.
A. Amazon controls almost 50% of market-share.
B. Amazon uses their platform data to determine which products vendors sell are high-margin, then replicates those products and sells them at a lower cost.
C. Amazon-branded products appear higher in search results, which eventually drive the original vendors out of business. Whether this is explicit, or happens by virtue of intimate understanding of Amazon's algorithms is irrelevant.
Individually, A, B, and C are not anti-competitive, but Amazon is doing A and B and C at the same time, which crosses into anti-competitive behavior. Technically, B & C together are enough to warrant anti-trust investigations.
> 1) How is that different than a department store? If you go into housewares at Macy's you'll see their own branded stuff along with other brands. So at issue is not the practice itself, but rather that the digital marketplace makes it easier and more efficient.
The difference would be Amazon's [alleged] monopoly power.
> 2) The consumer (along with Amazon) is a beneficiary here. The losers are brands trying to sell commodity items at a markup. The play is not to undercut all the power strip sellers (to take an example) and once they are out of business, jack up the price. The play is to take the margin due to marketing and brand equity from the sellers and split it between the consumer and Jeff Bezos, so rather than being harmed, the consumer benefits from this.
That seems like a very charitable way of describing the situation, and even if accurate may only remain true in the short term. Whether undercutting branded sellers is the goal or not, that's exactly what's happening--even as you charitably describe it. What happens ten years down the road when those brands are gone due to Amazon's allegedly benevolent undercutting?
I'm not sure about the ultimate merits here (in fact, I'm a bit skeptical of the claim that Amazon has all of the market power that some say it does). But I think you may be dismissing this all a bit too quickly.
> The difference would be Amazon's [alleged] monopoly power.
I don't see Amazon as being particularly more of a monopoly than Walmart. If Amazon was a traditional brick and mortar business, would we even be having this conversation?
I think the difference is that they are better at pissing people off essentially by transgressing status quo norms. Most tech companies are too right for the left and too left for the right in addition to their "upsetting their perceptions of the natural order" aspects.
A big chain consumes the market and puts others our of businesses and it is just how things are. A new internet company goes from niche to cannot be ignored and it is scary change despite the impact being essentially the same.
Combine that with openly envious old media and their selective condemnation. I honestly suspect the real reason is that tech companies don't buy enough TV ads for their liking given the softball treatment of ones that do frequently like cable.
Again, there's a lot more to think about. What about prices? Even if manufacturing costs remain the same, costs for consumers are likely to rise per unit quality in the absence of meaningful competition. There will also be additional downward pressure on prices paid to those factories if there are fewer (or one one) buyer.
As I said before, I'm not convinced that all of these things will actually happen. But the answer can't be as simple as "who cares...Amazon is just cutting out the middle man."
On #1 I too had the same question, but I think the difference there is that department/grocery stores are re-sellers. They've already bought the goods from the third-party and are choosing to re-sell it at a markup. Amazon on the otherhand is a platform which only enables the initial sale.
They call it the back margin. Brands buy shelf space, position, pay for offers and promotions, extra payments (effectively a fine) if volume targets are not reached, etc.
Tesco infamously had 24 ways of extracting extra money from suppliers via back margin. The front margin is the traditional agreed buying price.
Regarding your second point, that is only good for the consumer in the short term. In the long term it harms consumer choice by making it untenable for smaller companies to sell on Amazon when they know a cheaper AmazonBasics version will be released as soon as they see any success.
> I think amazon : amazon basics is a great example of antitrust/unfair monopoly
Store brands have been around *forever."
> They know what users are looking for, spend the most on, and they can give their own products dominate positions in the UI.
If you own a grocery store, you have every right to place the store brand products wherever you think they will sell best. You could (gasp) not sell any name brands at all! And if your grocery store becomes successful, you're allowed to sell advertising inside it however you want.
> It’s kind of like standard oil buying up the railroads so they owned the supply chain and no other oil could be moved.
Railroads are to some extent natural monopolies, and they have a massive barrier to entry. E-commerce websites do not. Many businesses of all sizes still sell products directly from their website and do fine. Now if Amazon bought UPS and FedEx and refused to ship any other packages, that would be different. But all they're doing is running their "department store" the way they want to. If consumers want a competitor, they're free to start one with next to no initial cost.
>It’s kind of like standard oil buying up the railroads so they owned the supply chain and no other oil could be moved.
kind of, but not really at all. Google and Amazon aren't preventing anybody else from using their services - getting other people to use their services is kind of their whole business model. If you want to compare Google or Amazon to transporting oil on railroads, it'd be like if the company that owned nearly all the railroads owned a couple of oil wells (but not all of them) and still transported everybody else's oil for a fair price.
I agree. But if we are going to split up the store platform and the store brands, now youre going to have to split up Target, Walmart etc. Anyone besides Ikea who sells their own store brand and runs as a platform for others to sell their products.
Any grocery store can do the same thing amazon is doing, use data about sales to push clones and store brands of popular products. What percent of products at Target are store brand now? Target is like an Ikea with 3rd party products sprinkled in it, which is what Amazon wants to become.
The difference is that none of those examples dominate their market. The problem isn't "Amazon uses their platform to promote their own products" it's "Amazon uses their market dominance to promote their own products which might not otherwise be competitive"
dominating the market and holding a monopoly are not the same thing. Amazon has a dominant position in many markets, but are not a monopoly on any market unless you re-define the market to be amazon's portion of it.
Does amazon have a retail monopoly? absolutely not. An online retail monopoly? still no. An online book selling monopoly? okay, now we're getting closer but still not a monopoly. A kindle books monopoly? yeah, by definition.
I agree, I just think its Wal-marts playbook, and to single Amazon out is more political than do-goodery. In Wal-marts case its floorspace, in Amazon's its eshelf and datacenter storage.
> gives their in-house service priority in search results over existing market incumbents and self bids on google search advertising for key industry terms to drive up costs of advertisers to keep in business.
It would help if the competition in hotel booking, Expedia, Orbitz, ETC weren't all literally owned by a single fucking company now. The sites are entirely rigged against the user.
She has no proof, she does not need any. this is typical politician using FUD to scare the populace into letting them take actions which in the end only go to bolster their own campaign coffers and personal riches. With the upcoming Presidential campaign you can expect politicians tripping over each other using jealously and fear to get people to plea for action.
Amazon is not a Standard Oil by any measure as they have ample competition when it comes to online sales. Facebook is still an opt in environment. If you don't want to join facebook you don't have to and no retailer is dumb enough (well that might not be true but I haven't found one) to require you to be a facebook member to purchase products or services. Google is, well google. I don't have to use their search engine if I don't want to.
>Google is, well google. I don't have to use their search engine if I don't want to.
When threads like this come up I always wonder how the engineers who worked on Bing must feel. I'd feel pretty disheartened if people had such a low opinion of my product that my competitor was considered a monopoly.
No, the reason OP made that comment is because duckduckgo uses Bing by default to power its search. So duckduckgo is literally just Bing with a duck taped over it basically.
Bing is as good as Google in many cases and is better than Google in some cases. IMO, thats no small feat. Bing is profitable too, unlike many other silicon valley companies so I don't think they feel disheartened.
I read an article a while back about the team behind Bing. I think they had some of the best people working there and they must feel pretty proud. I think after the project picket up and they started managing them from top up most of them left. I tried looking for the article but can’t find it anymore
if you rephrase that as "Amazon has competition, but what competitor can afford to intentionally give consumers millions or billions of value a year in order to dominate a market segment?" it seems sort of generous?
they're taking all this money from venture capitalists funding startups running on AWS, and pumping it into their retail operation so that the working class can have cheaper goods.
and everyone involved in the process consents to it, even!
> Google is, well google. I don't have to use their search engine if I don't want to
I don't have a problem with the dominance of their search engine. I have problems with them using their search engine and other platforms to prompt you to use Chrome, or how they use their quasi-monopoly on Android app marketplaces to force manufacturers to preload just about every Google App in existance on Android phones. Then there's various Google services (some of them near monopolies) performing much worse on anything but Chrome.
If Google would be just search I wouldn't have anything against them, but they are notorious for using the market position of one of their products to push another.
> If Google would be just search I wouldn't have anything against them, but they are notorious for using the market position of one of their products to push another.
So does every department and grocery store in the US, and they have for decades, but nobody seems terribly bothered by Great Value at Walmart, or the the notorious contract negotiations with Walmart that put suppliers at a huge disadvantage, because if you want to be a national brand you need to be in Walmart.
But it's much better to talk about fantasy monopolies because they make nice sound bites.
The point of anti-trust laws is to break up monopolies because they represent a massive and dangerous concentration of market and political power in the hands of the few. You don't need evidence of any specific crime to do it.
You can say you'd prefer it not be that way. But it's a provision of existing law, with precedents. To really argue for your preference you'd need to show how those applications didn't turn out well.
> The point of anti-trust laws is to break up monopolies because they represent a massive and dangerous concentration of market and political power in the hands of the few. You don't need evidence of any specific crime to do it.
Not actually true. To break up an existing company, you need to be taken to court by the United States under the one of the anti-trust acts, and prove a violation of the law.
To be clear the FTC can prevent mergers with no evidence of wrongdoing, based solely on market share, but breaking up an existing company is a rarely used remedy in antitrust cases.
Facebook should be treated the same way and spit up vertically then, not horizontally. Datacenter and infrastructure and all their low level services should be split from client apps, NOT messenger split from whatsapp.
Not sure why this would carry over to Facebook. Amazon sells metered compute or hosting infrastructure used by half the internet, Facebook doesn't sell infrastructure to anyone. Going by their actual levers of market power, you absolutely would split WhatsApp and Instagram off.
I still dont think you can justify any of those as monopolies yet.
Snapchat, twitter, pinterest, reddit, youtube, hangouts/gmessenger, linkedin, skype/groupme, imessage, discord, kik, line, telegram, signal. Especially justifying Instagram, because facebook really made it what it is. WhatsApp MAYBE, but in reality what facebook is doing is owning both the US and INTL messengers, I dont think they overlap in a way that justifies splitting it up, because FB's US marketshare doesnt drastically increase from WA. Is it the justice departments job from to allow the most popular domestic product from merging with the most popular international product? Uber being able to swallow up or own shares in all these regional services should be questioned then. FB/WA still have viable competition from imessage, snapchat, and skype.
George W Bush tried this against Microsoft. They were unsuccessful. You cannot just decide it's a crime to be large. The fundamental rights like unreasonable seizure and freedom of speech. Which means the government cant just steal the corporation from you or prevent your companies from working together.
There's no fundamental right for a corporation (which, to remind, is a separate legal entity) to be of a certain size. This doesn't have anything to do with freedom of speech. And if you trim them down to size by splitting them, the original owners would still own the fragments, so it's not a seizure, either.
In America and in many other countries, the mere fact of monopolizing a market is in fact a crime. The constitution offers no protection against this whatsoever. Go google antitrust law, and read up on some history. The Sherman Act, Standard Oil and AT&T are some good places to start.
> You could require freedom of speech apply to industry leaders for example.
What does this mean? Mark Zuckerberg, Jack Dorsey, Jeff Bezos, et al already have their constitutionally protected speech, except for where their roles as executives at public companies restrict them. If they find those restrictions onerous they can leave their roles.
I think they meant requiring industry-leading companies to apply freedom of speech on their platforms. That is, no censoring of comments, videos, reviews, etc. as long as they don't violate the law.
So the idea is to "require freedom of speech to apply" by prohibiting corporations from setting their own terms of service, spam policies, etc? That sounds like a very serious restraint of speech.
The government cannot compel speech. I don't think that using the power of the government to require some types of speech against the wishes of private entities solves the problem you think it's solving...
If Twitter decides tomorrow to ban the right-wing from their platform. They absolutely legally can. If you watch the recent Joe Rogan video with Tim Pool and Jack Dorsey. They didn't realize they were slowly banning the right-wing and allowing left-wing terrorists to stay on Twitter. They absolutely didn't realize they were doing this and they are going to look at fixing this.
The government however could come in and simply make it that you have freedom of speech on social media. So if Twitter bans someone for saying "a man cannot be a woman" that person can sue them.
The democrats will NOT do this however, the current censorship on social media is benefiting the left-wing.
The company twitter has set its terms of service. That is speech. What you're suggesting is eliminating the corporation's ability to do speak in that manner.
Do you believe the US government has the ability to simply prohibit speech by corporate entities? Is it in accordance with free speech principles for a federal government to prohibit certain types of speech?
By forcing freedom of speech onto twitter for example. I don't see how that would be restricting their speech.
Personally I see this as something that will come eventually. However, I don't think that's what Twitter should do.
My idea is that twitter should act more like the united nations. You create a 'diplomatic immunity' type of account that people can request. It can be something like:
Minimum 50,000 followers.
Account history of 1 year.
If approved you can no longer edit or delete your posts; but you also cant be kicked off twitter or other be harmed by rules of twitter.
this by itself will solve the problem that twitter has.
I don't think terms of service, basically a contract, fall under free speech. If you and I make a verbal contract that you will assassinate someone we are still breaking the law because assassinations are illegal. Our free speech isn't being violated when we are arrested for doing something illegal.
It doesn't have to be illegal to undermine competition. Luxottica owns a vertical of 80% of the brands, the factories, the retail stores, AND the largest insurance company concerning eyeglasses in America. It isn't illegal, but the rents they are extracting from our society by keeping prices artificially high sure as hell SHOULD be.
They've admitted that they work together on censorship issues. They're colluding together to harm potential competitors: Gab is banned from the Google app store, and Google was running a competing social media network Google+. This is exactly what ATT was doing that got them broken up.
> The key components of the Warren plan include passing legislation that would designate companies with annual global revenue above $25 billion that provide marketplace, exchange, or third-party connectivity as “platform utilities” and prohibit those companies from owning participants on their platforms.
As a Googler, speaking for myself, this seems like an interesting idea that could positively impact the tech scene.
Spoiler alert: They probably won't be either way. Our population is too small by comparison, we just lucked out in that it took China/India longer to industrialize.
Luck has absolutely nothing to do with it. If you attribute America industrializing before China/India as luck, then I will lose trust in anything else you say.
By 1915 America had higher GDP per capita than most of Western Europe - BEFORE WW1. Western Europe had higher GDP per capita than China/India by like 1200 AD. You are so so far off the mark.
Also, India's population only started exponentially growing in the late 1800s. By that point America had already industralized and was already the richest.
Go ahead and put your money where you mouth is, sell all of your US stock, and invest in African stocks since population growth is apparently the only thing that matters.
"We were fortunate that we industrialized sooner," not "rate of industrialization is totally random and unpredictable."
Edit: Also, the predictions are for next century. Even if they were making the straw claim you believe they are, they probably won't be around to collect on the super-long-term investment you suggest.
Edit #2: Checked out your comment history, looks like you're just a garden-variety racist who thinks that white people are better than everyone else.
Alright slow down there, chief. I'm making a comment on the internet, I'm not trying to sell your firstborn or something.
I said that the US _lucked out_ in that China didn't industrialize first. I didn't say that industrialization was a product of luck.
If China were to develop to the extent that the US has, which it's on a path to do, then population will absolutely matter. An American company with a market of 650 million potential customers isn't going to hold a candle to a market with 1.4 Billion.
I'd absolutely divest in the US and invest in China if I were going to be alive for another 100 years. Africa wouldn't be a bad bet either... which is why China is already making significant investments there.
The funny thing is that is actually a decent if risky strategy - they have more room to grow as they develop. Essentially diminishing returns run backwards".
American products get used all around the world. China’s market is hard to penetrate for US tech but on the flip side, Chinese tech doesn’t typically fare well outside China either. Maybe TikTok is the only exception. Wechat is used by overseas Chinese or people who want to talk to Chinese people.
Why the $25 billion restriction, I wonder? Is it just to make this more of a "bill of attainder" aimed at the specific companies in question, or there some principled reasoning behind it?
I could get behind something like this if it also presented these platforms with a consistent framework for moderating content. They reach levels where they are more akin to public spaces than digital communities, and should have moderation strategies which mirror this.
I also see Elizabeth Warren has created a set of powerful enemies way too early that will do much to stop her from becoming America's first woman president. If you wanna do something like this wait until you are in office. These are not issues that your average American cares about.
No one can make an informed claim about the correct timing here, and to do so and say we should wait smells of concern trolling.
No, it wouldn't make sense for Warren to wait if she wants progress. She should introduce the idea to the public as soon as possible, move the overton window, and if the idea has merit it'll be easier for someone in the future to carry it forward.
Unfortunately I agree. Since Silicon Valley leans left so heavily this is the sort of thing you sit on until much later in the process. I personally feel that Google, Facebook, et al are too big and powerful now, this is going to immediately set those companies against her so she's kneecapping her campaign before it even gets started.
I really believe it doesn't. No serious concentration of wealth ever does. Yes, personal attitudes in SV are often liberal, but the economic outlook most common in the place is akin to Andrew Carnegie with a git repo. It's this economic outlook where her proposal targets.
Have we seen tech company lobbyists really push a lot of weight around? Companies that seemed to genuinely support net neutrality didn't seem to have much of any impact / participate all that much.
> Companies that seemed to genuinely support net neutrality
Which companies were those? Netflix and google both made statements that they support net neutrality, but I didn't see them lift a finger to do anything about it: it seems to have been mostly a pr move.
FAANG are outlobbying most other industries, they're just doing it to influence issues that aren't currently gathering much scrutiny or media attention.
> Google said it lobbied on dozens of issues, reflecting how integral its services have become to American lives and commerce. The filing cited privacy, data security, antitrust, taxes, tariffs, trade, the opioid crisis, artificial intelligence, cloud computing, autonomous vehicles, immigration, the future of work, encryption and national security.
>>These are not issues that your average American cares about.
Why not? I think there are wings of both the major parties that feel that there is an "us vs the big bad corporations". Both sides feel there are inherent flaws with the current economics, but would solve it in very different ways.
Employment and how multinationals run themselves are things many people care about. They just can't agree on how to fix it.
That said, I don't disagree that pissing off a group of megacorps this early in the race seems like it's just begging for powerful enemies. But it also seems like it's possible this becomes a point that many of the primary candidates pick up. In that case, it basically becomes a moot point since there's no candidate for the pro-FAANG lobby to back in the field that will align closer with their goals. And when it the game becomes <Democrat> Vs. Trump, everything changes.
Does anyone actually believe that the US government's interventions against Microsoft made the slightest bit of difference, as opposed to huge shifts in the internet and mobile landscape?
You could argue that the emergence of Firefox and Chrome was only made possible by the ability to assign a "default" non-IE browser in Windows, but that ability pre-dated any of the anti-trust stuff anyway; all you got out of that was a mandatory pop-up when you installed Windows asking you if you wanted to use a different browser.
The emergence of Firefox was by itself a huge shift, and Chrome another one, against Microsoft's browser monopoly. Its OS monopoly got broken (insofar as it is broken) by a combination of the rise of mobile and Apples re-emergence as a viable platform. Its office application monopoly got broken (insofar as it is broken) by a combination of online email systems (especially gmail) and the increased availability of online alternatives.
All the justice department did was waste their time; they could have just sat by the river and waited for the body of their enemy to float by instead.
I apolgoize that I don't have any references available at the moment, but I've read in several books that Microsoft insiders said it made an enormous difference.
Having the government essentially watching their every move caused them to moderate their actions, and make sure they were on the right side of the law.
They were much more conservative than they otherwise would have been. It was described as a large cultural shift in the company and their way of thinking.
“Anyone who said that the 1990s prosecution of Microsoft didn’t accomplish anything — that it was companies like Google, rather than government lawyers, that humbled Microsoft — didn’t know what they were talking about, Reback said. In fact, he argued, the opposite was true: The antitrust attacks on Microsoft made all the difference. Condemning Microsoft as a monopoly is why Google exists today, he said.”
In the middle of the process there was an election and the new executive didn't want to actually go after Microsoft. They then got off much easier than their misdeeds required. At one point an OS/Office breakup was in the cards and that would actually have been a major shift in the industry. It's not surprising that what was actually done didn't have that much impact.
My point is not whether government interference was impactful. My point is exactly that it made no difference.
Microsoft lost its position of dominance through purely market ends (in my opinion -- certainly between the US actions and the EU actions you could argue that they made a difference).
In retrospect breaking up MS between Windows and Office was not a necessary condition to breaking MS's monopoly, and so we have an excellent test case for government intervention at that scale. Not definitive, of course; MS could very well be the exception, but certainly the Justice Department's actions against Microsoft should not be used as evidence that such actions are effective.
The tech market would be much different today if they had been broken up. That they're not still the largest tech company in the world is not the same as saying they lost their monopoly somehow. They still have the same monopoly on the desktop OS and more importantly in Office and they still very aggressively maintain those monopolies. There are just other even larger markets today.
> In retrospect breaking up MS between Windows and Office was not a necessary condition to breaking MS's monopoly.
Quite the contrary. Since their monopoly is still in full force neither the meager settlement nor the market transformation were sufficient to break the monopoly. Breaking up OS/Office might have been enough but we'll never know.
That it would be different in inarguable. I feel like I can get on board with the statement that the fact they are no longer the biggest is pretty much equivalent to saying they lost their monopoloy.
In a sense they have a monopoly -- they are the only ones selling Windows. But ... even in the desktop/laptop area they are no longer the beast that they once were. And the prevalence of mobile as a platform means that even their dominance in the desktop/laptop market doesn't mean what it once did.
In office products they have a much stronger position, but the barriers to switching are no longer what they once were. I feel like I can confidently say that Microsoft can no longer coast on their monopoly power, but must actively move forward (with things like Office365) in order to stay competitive.
Are you arguing that even now breaking up OS/Office would be a reasonable thing for the Justice department to pursue? That seems like a barely tenable position.
> Are you arguing that even now breaking up OS/Office would be a reasonable thing for the Justice department to pursue? That seems like a barely tenable position.
Breaking them up today is debatable and won't happen so it's not worth discussing. But they're still leveraging their monopoly in anti-competitive ways by for example porting Office to Android but not desktop Linux to protect the very lucrative business of selling Windows licenses to corporates. But that doesn't mean that breaking them up 20 years ago wasn't a good idea. I'm saying two things:
1. Had they been broken up back then we'd almost surely have a much better balanced tech industry by now. It has taken us 20 years to get even a reasonable set of tech consumer markets back up, and it's doubtful we'd have even that if even what little was in the settlement hadn't existed. The Internet Explorer mess would have been enough to stifle Google/Facebook/etc for a while longer. The extremely anti-competitive practices of forcing OEMs to always carry Windows on their hardware would have been enough to at least stifle mobile for a long time if not even to hand over a new monopoly in mobile to Microsoft.
2. Saying that the hard slog through these 20 years to recover from such a distorted market is proof that further actions weren't needed (like breaking up Microsoft) feels almost insulting to those of us that had to live through the impacts of Microsoft's actions in the market. The fact that you no longer consider them a monopoly because they've "only" been able to maintain intact their original monopolies is a hard fought win, and should not be taken as evidence that even more anti-trust remedies were not needed.
I'm not by this taking any position on breaking up Google/Facebook/Amazon. As far as I can tell none of those are even remotely close to the level of anti-trust violations Microsoft got up to.
Microsoft's behavior changed and they stopped trying to own every single niche market within the software field by any means necessary. I think that allowed for an opening by other players in addition to the tech trends you mentioned.
What is the alleged anti-competitive behavior? The article doesn't mention it. It sounds like she is calling for their breakup merely for being big and powerful, and if that were cause enough to break up an entity we would logically start with the government.
For starters, Amazon provided a marketplace platform for third parties to sell goods. They then gathered data on which items sold the best, created their own line of products based off this data, and crushed their customers-turned-competitors using their massive advantage in economies of scale.
You are allowed to crush your competitors with economy of scale provided that you don't do it by selling at a loss. That's actually the entire point of economy of scale. The reference in the article is to passing a law against this so clearly what Amazon did is legal now. Furthermore, we don't need a law for this as this type of thing is well handled by a non-compete clause, which I am surprised wasn't in the seller's agreements with Amazon.
The larger issue is that Amazon does not treat each product equally. When you search for an item, they don’t necessarily even show you the “best item” — most bought or highest reviews. Products which buy advertisements or Amazon’s own brands are bubbled up: its not an even playing field in this sense.
FWIW, while I agree this a problem, large box retailers (Whole Foods before the Amazon acquisition, Walmart, etc) are well known for doing this as well.
So if that's the line you draw, it extends further than just tech giants.
It's a little bit different though, because Amazon has 2 streams of how they get products: Amazon can buy branded from vendor and control price and selection, or those same vendors could list directly on Amazon (as FBA) and the vendor controls price and selection.
Pop sockets got in a fight recently with Amazon, because they wanted to stay FBA in order to have better control of selection and pricing, but Amazon was trying to force them into a more traditional vendor role.
Right, and Walmart only allows products in its store under their terms which is far more restrictive, so I'm failing to understand how this model is worse for competition than Walmart's.
And what happened with PopSockets didn't quite work that way. They were already a vendor on Amazon, and they wanted to remove themselves as a direct vendor and designate a single reseller as their "approved" FBA on Amazon.
So they wanted to change the terms of the agreement, Amazon said no, and that was that.
Perhaps grocery stores have done well to keep their brands on lower shelves and not end cap their own stuff. Amazon brands will often appear first in the list of results, which would be akin to putting Great Value products front and centre on all Walmart shelves.
Don’t brick and mortar stores collect inventory and trend data too? Amazon isn’t the first one to do this, they just put the data closer to the center of their business so it’s more public that they collect data.
Yes and collecting data is a lot more expensive and less detailed for brick and mortar stores
Also Amazon is less likely to have an issue with respect to stock since they do not buy most of the stock they just store it, where as brick and mortar stores invest in their inventory which gives them an higher incentive to promote them. And this also gives them an incentive to have disfounted sales on slow moving products that are either of slightly lower quality to a comparable product or it is a new Unknown brand resulting in a win for the customer. In case of Amazon if a new Unknown product is not selling it is all up to the seller to manipulate the algorithm to move up the seller ranking( we already see all the way sellers manipulate reviews and change products to have a high number of reviews) this is a big loss for the customer. And if the seller puts in all the effort and succeeds Amazon can just copy the product and say MY PRODUCT NOW, and show an Amazon basics product for the exact same price as the buyer and bump him Lower than its own product.
Until recently, brick and mortar really just knew what people tend to buy together. They can't tell, like Amazon, than a single customer buys XYZ over their lifetime. Brick and mortar now employee ways to aggregate using credit card numbers across stores.
If they were the largest retail seller, that would be anti-competitive. Amazon does less than half the revenue of Walmart. Amazon and Costco are the same size.
Looking at the vast majority of Amazon Basics goods, I just don't see how they would have needed to use marketplace data to come up with what products to sell.
Batteries, clothes (lots of clothes), backpacks, these are all products that are cheap to produce and where brand loyalty plays a large role. People generally trust the name Amazon. It's not rocket science to realize people want cheap clothes and batteries.
The Medium article[1] mentions a couple - Google prioritizing their reviews above Yelp in search results, Amazon copying third party products that were successful on its marketplace.
RE Amazon... how is this much different than say, store branded items from a grocery or WalMart, or quasi store brands(ie brands mainly only sold in WalMart, like Brahma boots or Ozark Trail)?
The difference comes down to market share. It's fine to sell store brands if you have 10% of the market because there's plenty of competition. Vendors who refuse to deal with you can do just fine by working with your competitors.
Amazon is approaching 50% market share. They are close to becoming the place for online commerce. So when they compete with vendors by offering similar products, the vendors are effectively put out of business.
Just like with MS and IE. The issue wasn't so much that MS offered IE with Windows so much as the fact that 95% of computers came with Windows, so bundling IE was putting other software providers out of business.
> Google prioritizing their reviews above Yelp in search results
This is one reason I use Google. I can view all Google review w/out downloading an app. I'd classify Yelp reviews in browser search as nothing more than an ad.
A quick search for a local restaurant shows yelp as the top hit. Google shows a info box to the side with their own reviews. I don't see a problem with this, and I can't imagine it being illegal. Companies are allowed to cross-promote between their services. Changing this would go far beyond tech companies.
She's a politician. She doesn't need logic behind her statements. Rather, she's tapping into progressive sentiments and trying to ignite her base during primary season.
well, the element that corrupts government should be removed and a govt for the people restored.
Just breaking it up is as anti productive as just breaking up a company, if the company isnt breaking any laws.
Govt is a different type of entity than a corporation and as enlightening as the comparison might be, a thought exercise is all that comparison should really be.
Perhaps not the government itself which exists within strict constitutional boundaries, but the same logic should apply to the major political parties with hard caps on the amount of incoming donations over which they have to "structurally separate" from the electoral process.
The government is already being dis-intermediated. You could look at this as the government eliminating their competition.
These companies have more revenue and cash on hand than many countries. Looking at the Bay Area, Google and Facebook are taking the lead on repairing and improving infrastructure because the government can't do it alone anymore.
There's a difference, at least on paper, between the government and corporations: the government is big and powerful, but (in a republican society) is accountable in some way to the people and society as a whole. Corporations are also big and powerful, and (in a capitalist society) accountable only to a majority of their shareholders.
So there's a reason to believe that you cannot have corporations serve the public interest without either breaking them up to limit their power or fundamentally redefining what it means to be a corporation, but you can have government serve the public interest while remaining big and powerful. If the federal government followed the views of the American public to the detriment of career politicians, we'd say, "Great, you're actually doing your job." If Amazon followed the views of the American public to the detriment of career managers, we'd be very confused.
(That said, breaking up the government sounds like a fine plan too, I just don't think it needs to be first)
In theory. But in fact it is the opposite. Companies are accountable to their customers above all else, and the government to its voters. If the IRS makes a mistake with your taxes and Amazon makes a mistake with your order, which of these would scare you more?
I'm talking about accountability to society. I'm only a customer of Amazon in very limited ways (I own a Kindle that I received as a gift, which I buy a book for once every few months, and I spend about $30/month on AWS of which $29/month is a VM I should really decommission), but that doesn't change the ways they impact my life - their influence on the book market, the literally-everything-else market, the cloud computing market, their purchase of Whole Foods, their presence as an employer in my city, etc. None of those worries are a worry about Amazon making a mistake with my order.
So I'm a lot more worried about Amazon than the IRS - I feel the IRS is in fact accountable to me in a way which Amazon isn't.
Google/Facebook/Amazon have the power to push any startup competition out of the market in ways that are hard to even enumerate. Think about all of the services, devices, and standards that they control.
Watching the fanboys defend their favorite tech giant is incredible. These companies are not behaving in the markets or people's best interest and they are way too big, at a scale that dwarfs most of the worlds organizations.
> Watching the fanboys defend their favorite tech giant is incredible. These companies are not behaving in the markets or people's best interest and they are way too big, at a scale that dwarfs most of the worlds organizations.
It's not illegal to be big, it's illegal to use your influence to prevent competition in a way that's illegal. There's zero evidence of that, which is why she's talking about a new law.
And please refrain from calling those that disagree with you "fanboys". It diminishes every single point you're attempting to make, because you sound like a jaded teenager rather than an adult that wants to have a conversation.
As long as those services are profitable and they can outcompete startups then there’s nothing illegal or wrong about that. There’s no right that startups need to survive or have bias to succeed.
There's no right that tech giants need to be allowed to exist in their current form, either.
If a person doesn't break any pre-existing laws, then they must not suffer any legal consequences, sure. And nobody is suggesting that Page and Brin should spend a minute in court or pay a cent in fines.
But a corporation isn't a person, it's a business instrument, and if the United States were to judge that the existence of that instrument is detrimental to the greater security / stability / welfare of the nation as a whole, they would have every right to write a new law to ban usage of that instrument, i.e. ban the existence of Google in its current form, as they once wrote a new law to ban the existence of the United Aircraft and Transport Corporation.
Breaking up a company certainly harms people, by diminishing the value of the company's stock, which is private property. Not only people like Page and Brin, but more sympathetic characters like workers whose retirement funds contain Google stock.
This may be worth it for society, but it's a little too convenient to say no people will be harmed.
I ran across two quotes by Warren that caught my attention:
> "unwind tech mergers that illegally undermine competition"
> "I want a government that makes sure everybody — even the biggest and most powerful companies in America — plays by the rules"
The word "illegally" in the first quote really set off my alarm bells. What have large companies like Amazon, Google, FB, etc. done that is considered illegal in this regard?
The "by the rules" in the second quote is confusing too. What does that mean? Which rules are being broken?
The way I see it: Isn't it the goal of entrepreneurs to be as successful as possible? Let's say I found a way to grow a business to that of the size of some of the bigger ones (which would be awesome). To grow a business that big, consumers obviously like what I'm selling/producing. I get the impression that Warren is saying she doesn't like big businesses because they snuff out the little ones. And maybe that's true, but why is that a concern of the government? There's nothing stopping a smaller company (or even an individual) from coming up with a really good idea and trying that idea out in something like his garage, and then reshaping the next generation... kinda like Amazon did in comparison to Sears. Or Microsoft did with IBM.
I'm sure there's going to be plenty of disagreements on my stance, but I guess I'm just not seeing this problem in the same light as Warren.
It's a little hard to tell if you're asking "are there laws against monopolies?" or "should there be laws against monopolies?".
The answer to the first is a certain yes. There are laws against businesses forming monopolies in the United States. You can read up on the Sherman and Clayton antitrust acts from the 1890s and 1910s to start with. There is also considerable case law stemming from this legislation.
The answer to "should there be laws against monopolies" is a little more open. One theoretical justification for breaking up monopolies, is that in some cases monopolies cause economic inefficiencies. Look up "deadweight loss from monopoly pricing".
It's very complicated to measure any efficiencies or inefficiencies from tech monopolies, so I don't think there's a clear answer.
It's also not generally agreed upon that economic efficiency should be the goal of government, so there is a lot of room for debate on that question.
You've confused some things. "Economic efficiency", as espoused by Bork and the rest of his Chicago School crew, came as a result of consolidation. His argument against strong antitrust enforcement was that it lowered economic efficiency to benefit smaller non-monopoly companies.
This of course was a disaster for the American economy and it's taken 30 years of increasing corporate concentration for the politics to finally swing back against monopoly.
You're high if you think someone can compete with Amazon out of their garage now.
Hell, you can't even sell a product on Amazon without a good chance that Amazon will just slap their Amazon Basics logo on it and undercut you to death.
Similar to Wal-Mart many of their competitors are dead because they optimized their supply chain. No one gets that kind of access out of their garage.
And if Amazon is broken up, whoever thinks the US will still win the global E-commerce market against Alibaba is also quite high.
The rules are changing. We need to think about the geopolitics here as well. We need US companies to win global markets in an era of increased competition.
Ya, globalization has changed my opinion on how we should handle these situations. How are US companies supposed to compete against other companies that are just as large if we restrict their size within the US? That just gives us a disadvantage against international competitors.
Because otherwise the companies that do win the global markets do the same thing to US companies that you are saying Amazon does to small companies.
How is it a good thing for the US to limit their own companies, when foreign companies don't have the same limitations? Giant companies will still exist, they will just cease to be US based companies.
Fair take. The US could penalize/limit/tariff those outside megacorps like China does though, right? I'm not sure trade should be completely free when an outside competitor can skirt your local laws.
because Amazon uses their non-retail business profits to identify high selling items, produce them themselves, sell them at a lower price (because they have all the data also), and finally steer customers to those products. They're the market place and a player. This new idea isn't well defined in law, but using your profits from one company to undercut another area is illegal.
> "by the rules"
is the same idea as "illegal", and even if they're not, the point she's trying to make is the fact they are not breaking rules should be setting off alarm bells because...
> "but why is that a concern of the government?"
because America loves the free market, and big business is the enemy of it.
To your first point - Walmart, Target, and almost all Grocery stores in the southern US have private labels for significantly cheaper than name brand labels.
They are the market place and players. And they also drive traffic to their products via website and shelf placement. If you say amazon is illegal here, you can’t simply ignore almost all big players are.
Not sure that’s illegal anyways since the consumer has plenty of choices at Amazon, Walmart, Target, etc.
Historically with Walmart and Target being players and the marketplace, have you seen that damage the consumer? Largely consumers end up getting commodity goods for cheaper, and the goods that are specialized/branded for roughly equivalent prices to other marketplaces.
I see what you're saying about the first part (the illegal part), thanks for your thoughts on that.
I do disagree with your last comment though:
> because America loves the free market, and big business is the enemy of it.
Sure big businesses can raise prices and cause consumers to pay more. But big businesses can also lower prices too by investing in technologies that save money - which we see all the time.
So I guess I don't see big business as the enemy of the free market, after all, there's nothing forcing me to buy from big company A, even if they have a monopoly on a product. The reason is, in a free market, I'm free to discover and pursue ways to side step a monopoly. I don't need the government to help me do that.
I think breaking up the ISPs and media conglomerates would be much more impactful.
I can't think of a single market segment where Google and Amazon lack effective competition. Facebook is already bleeding users, and how would you break up a social media company in an impactful way anyhow? Facebook's ventures outside of social media aren't even close to being monopolies.
Facebook owns Instagram, Whatsapp, and dozens other platforms. Sure, Facebook proper is bleeding users, but the platform gaining the most users right now is Instagram, which is still Facebook.
Google would be fairly easy to break up among Alphabet subsidiaries, and Amazon could be split among Amazon.com, AWS, and Whole Foods.
She actually gets fairly specific about what she her plan is if you actually read the medium article linked in the first paragraph of the OP.
If youre going to break up Amazon, AWS, and Whole Foods for being vertically integrated, how can you not break up the oil companies or the agriculture companies or the chemical companies.
You could also argue that Apple is "too vertically integrated" and separate them into either a Laptop / Phone company or a Hardware / software company. Or break out music / media / Beats into it's own company too.
I think it would be easier to argue that Apple is being anticompetitive by having undocumented API's only their apps can use, and by not allowing end users to change default mail, map, and browser apps etc.
That would be horizontal integration. But that’s even a hard argument to make since Apple doesn’t have a monopoly or large market share of any of those segments — remember how Apple’s growth was supposed to slow down since their customer base has been saturated? Maybe luxury products but that’s a stretch. Apple isn’t vertically integrated since they outsource some of their manufacturing and assembly to other companies.
Yeah, they are not monopolies in the classical sense, so the regulatory position has to be much more nuanced.
But there are issues:
+ Amazon uses profits from AWS to dump in other sectors, selling goods and services below market value. The weird situation could mean Amazon pumps many billion dollars a year into pushing major grocers (who operate on thin margins) out of business. This is not good for anyone - but it's not a case of 'monopoly' so much.
+ Google is dumping in adjacent areas of tech - giving away Android for free, for example.
There should be some regulatory tweaks here, but it's going to be tricky.
As you point out - a much easier win would be to break up value chain consolidation over all.
Carriers, tech providers, content creators, content distributors - might benefit from being separate entities.
I don't think there are any net benefits to society from these entities being consolidated. There are no economies of scale, no proper synergies. There are however, huge incentives for investors to have AT&T own content creation and distribution obviously, so they can subsidize their own assets and not others. There's no long win for consumers so it makes sense to keep them separate.
Finally - there might be an opportunity on platforms. I think that the Apple store may be an anti-competitive issue - the notion that you don't control/own the $1K device you just bought is getting ridiculous. I would require platform makers to at allow open access to the platform. Same would apply to mobile phones being 'locked' onto a network - that should just not happen.
> Amazon uses profits from AWS to dump in other sectors, selling goods and services below market value.
There is big competition in cloud computing so AWS is priced according to market rates. I seriously doubt AWS profit is significant enough to influence the rest of Amazon in way that would be considered monopoly abuse. Amazon's purchase of Whole Foods did not result in WF reducing prices (as was expected) to uncut other grocers in that market.
> Google is dumping in adjacent areas of tech - giving away Android for free, for example.
That ship has sailed; Google effectively eliminated the market for mobile operating systems and Microsoft could basically no longer sell Windows Mobile. But the open-sourcing of Android has led to direct competition as well -- Amazon runs a completely Google-free version of Android on their products.
AWS is 10% of sales but 58% of operating income. Margins on AWS are hovering around 30% and growth has been double-digit every quarter for several years now.
AWS profits were worth a few hundred billion over the past seven years. As Amazon only as $40 billion in cash on hand, it's hard to argue they haven't put that money to good use.
You are off by an order of magnitude. AWS had an operating income of $7.296 Billion USD in the 12 months ending in 2018 [0] and has been growing at about 45% YOY for many years. Extrapolating those numbers gives them about $21.765 billion USD of operating income in the past 7 years.
Predatory pricing to push companies out of business is absolutely illegal, and covered under anti-trust law. It's also very hard to prove without getting the intent in writing.
"Predatory pricing to push companies out of business is absolutely illegal"
It's impossible to prove in most cases because it may have nothing to do with intent.
Amazon's advantage in 'groceries' is inherently structural.
They can sell bananas for 10 cents less than Safeway because their opex may be subsidized, or they can transport cheaper, not 'because they are acting predatorily'.
The nature of this value chain overlap is inherently problematic.
The thought of 'putting grocery chains out of business using surpluses from AWS' never has to even cross Bezo's mind, or the minds of anyone in the entirety of Amazon. It can happen due simply to structural issues.
For much the same way, it's impossible to have a free trade deal with China, so long as they have political controlled financial system and currency. 'Dumping' will be an artifact of the system as a whole. Nobody even needs to think it for it to happen.
In this model, Amazon WANTS grocery stores to stick around, and buy groceries from Amazon wholesale grocery. The same way that amazon wants AWS to be everyones platform, and for their business to flourish.
Yes, in that model, they want 'other grocery makers to exist'
But Amazon is going to open a regular grocery store chain soon, so it won't be just Whole Foods.
What Amazon 'wants' is to make money. If they can control all of the food distribution in the US, they will make not only all the profits from that market - they'll make a 'monopolizers surplus' from having the power to charge higher prices in the long run.
That cash-cow is much bigger than the partial cash-cow of owning only an intermediary layer.
I think we should also consider that even if you do break up a large company like that, you'd need to make sure they don't pull an AT&T and start merging with each other to basically re-create their previous structure.
Yeah, I'm still amazed that when AT&T was split up, there wasn't anything in the ruling preventing them from just joining the parts back together again.
It's a major deficiency of TFA that telecom was unmentioned. The Daughters Bell are a far larger drag on our economy and society than Amazon ever dreamed of being, and have been since before Bell Telephone wrote the Communications Act of 1934. I'd have more faith in Warren if she had led with telecom, but since she didn't I frankly expect her proposal to include a big fat "loophole" for ATTVZN.
The way to look at the 1996 boondoggle is ask ourselves if FCC could have ever been expected to provide even a token enforcement of its terms. The answer is of course not, because FCC was created to protect Bell Telephone and that's most of what it has ever done. Given that, of course all the investments in competing telcos would fail and be gobbled by the incumbents, enriching execs and bankers in the process. Given that, what we've seen was only ever exactly what was planned. The 1996 Act has allowed Bell to shed money-losing rural exchanges, do away entirely with common carriage, pay for wireless infrastructure with money stolen from wireline investors, rearrange assets in ways that would have violated previous consent decrees, pretend that we ever tried competition in telecom, and burrow in even more tightly to its vampire-bite on the neck of USA residents. That was a pretty good con, that Bell execs ran on us, with the assistance of the corrupt in government and the credulous in media.
Yeah it seems ridiculous in hindsight. I think what enabled the mergers though was less someone with a brilliant idea that they could just recombine, and more the drastic change in the government's conception and enforcement of antcompetitiveness laws. That is, they wouldn't have tried to merge back together if the they didn't think the government might let them. The government can and does does block mergers, still, and it makes sense that that they wouldn't just want to ban a specific company from a specific market share for all eternity.
This is the exact issue. The DOJ's Antitrust Criminal Enforcement Division breaks up the companies by making an argument that's then directly contradicted by the DOJ's Merger Enforcement Division's (very outdated) policy on approving mergers. From the Merger Enforcement Guidelines[1] (last updated in 1997):
> By definition, non-horizontal mergers involve firms that do not operate in the same market. It necessarily follows that such mergers produce no immediate change in the level of concentration in any relevant market as defined in Section 2 of these Guidelines.
The Merger Enforcement Division's assumption may have been true in 1997 but it's difficult to argue that simply because Google and Amazon don't operate in the "same market" as their primary businesses that their combination would "produce no immediate change in the level of concentration" of the market for both online advertising and computing services. Yet, under these guidelines, if a Google + Amazon merger were proposed it wouldn't present any immediate issue for the Antitrust Division to oppose it.
Amazon and Google do operate in several of the same markets. Amazon sells Kindle/Fire devices. Google sells Android phones. Amazon does product search. Google has a product search engine.
Antitrust enforcement focuses on the "primary market" of the entities. Google's primary market is advertising and Amazon's primary market is retail products. The DOJ does consider the potential anti-competitive impact on tertiary markets the two entities operate in but it wouldn't be a barrier to the hypothetical merger because those markets have plenty of other competitors.
And the way Warren is describing splits, it sounds like GCP, Azure, and AWS would be spun out. Could you imagine if any combination of those three were allowed in the future to merge!
> ... Google’s ad exchange and businesses on the exchange would be split apart. Google Search would have to be spun off as well.
I think maybe her team needs to do a little more research on what Google's business is. Splitting off Android/Play or GCP at least creates potentially viable businesses. Splitting up search and ads creates two non-viable businesses.
The problem is that 1. is better known as "Search + ads".
To put it differently, how does GSearch decide what and whether to show ads for a given search? Well, they could sell keywords by auction to parties interested in placing ads, and then use clicks and other user feedback to decide how relevant they are (that is, how much UX is lost by placing ads nobody clicks on top of results that users want). Whether they're selling to GAd or directly to merchants, or to SEM companies that act as middlemen in the current world does not seem like the important issue.
You could in theory separate search engine ads from site ads, but I don't think anyone is really complaining about the fact that Google owns so much of that business.
> The parallel she uses to make her case is the breakup of Microsoft, which she weirdly calls “the tech giant of its time” (Microsoft is still a tech giant), and holds as perhaps the last example when government went toe to toe with the technology industry.
> “The government’s antitrust case against Microsoft helped clear a path for Internet companies like Google and Facebook to emerge,” Warren writes.
In what way was Microsoft 'broken up'? The outcome[1] from that antitrust case seems to be that Microsoft had to publicly expose all of Windows' APIs to developers (no secret APIs).
If anything, the outcome of the Microsoft case seems to support non-intervention as AppGoogBook all flourished despite no serious breakup of Microsoft.
Sure, but Microsoft after the lawsuit was not the "Embrace, Extend, Extinguish" powerhouse from the 90s it used to be. They couldn't be, they couldn't risk another antitrust suit that might have real consequences. I think one could argue that Microsoft not being in full on domination mode created the opening that enabled all these other companies to thrive since they no longer had to deal with the extended existential threat of Microsoft.
Microsoft was going to be broken up, until the political landscape changed.
Even without the breakup, Microsoft was under heavy scrutiny and regulation as a result of the court case, which insiders say dramatically changed the company culture (for good or ill.)
It's funny how Microsoft isn't mentioned in the same breath as FAANG companies. It's in the top 3 companies by market cap, has a dozen billion-dollar businesses, does really well in enterprise, is aggressive in the cloud and hardware, has a large seat at the open-source table these days, and has a large set of older products that keep generating billions. If Apple is in there, why not Microsoft? Both are heavily concentrated in one area, pay similarly, have similar prestige. Is it simply because we don't know where to put the M in FAANG? Or is it because they aren't as big in the consumer space?
Microsoft is pretty big in consumer space as well - Xbox, Skype, Bing ...I think its Silicon Valley vs not in Silicon Valley thing. Microsoft is counted out because of not being physically located in SV. Thats my theory.
Planet Money looks prescient again, with a three-part series on how antitrust rules evolved in the US, and how they are changing in response to Big Tech:
Even if it were beneficial (argument in itself), Big Government is unequipped to handle the break-up of these companies in way that protects their value to consumers.
What about AMP, where failure to publish your content using their proprietary toolkit meant that you wouldn’t be featured at the top of the search results?
What US law would dictate that? Google isn't a common carrier, and there are no laws dictating that a privately created platform must give equal weight and promotion to everyone...
Preventing those companies from buying out others and using their incredible size and resources to quashing competition I can support. Splitting into pieces can make sense as well. It looks like Warren's definition of "Fair Use" is more in the context of selling widgets and does not appear to be tied to free speech issues. I guess that Elizabeth Warren isn't supporting a definition of "fair use" of these platforms that matches the United States Supreme court definition of free speech.
There's zero net benefit in breaking up large companies that are driving innovation and improving consumer experiences.
If you don't like the economic result, redistribute some of the growth. Walmart doesn't deserve to be saved by splitting up Amazon if they can't compete.
The thought, clearly expressed in Elizabeth Warren's post, is that Amazon et al are stifling innovation by discouraging entrants and using dominant positions in adjacent industries to crowd out competitors. This isn't a new idea—it's one of the pillars of antitrust.
They're not stifling innovation. Their successes have had massive spillover effects helping other companies to innovate. The Golden Goose is still laying eggs.
This isn't Standard Oil. It's not Ma Bell. When they stop innovating and start extracting rents we can have a reasonable conversation about breaking them up.
All I can say is that a lot of people disagree with you. If you're interested in that perspective, a good book is "World Without Mind" by Franklin Foer.
> The story demonstrates why promoting competition is so important: it allows new, groundbreaking companies to grow and thrive — which pushes everyone in the marketplace to offer better products and services. Aren’t we all glad that now we have the option of using Google instead of being stuck with Bing?
It's dishonest to suggest that the outcome of the US vs Microsoft somehow paved the way for Google. I would argue it was pretty non-consequential but looms in the public conscious.
From wikipedia:
> On November 2, 2001, the DOJ reached an agreement with Microsoft to settle the case. The proposed settlement required Microsoft to share its application programming interfaces with third-party companies and appoint a panel of three people who would have full access to Microsoft's systems, records, and source code for five years in order to ensure compliance.[29] However, the DOJ did not require Microsoft to change any of its code nor prevent Microsoft from tying other software with Windows in the future
...
> Law professor Eben Moglen noted that the way Microsoft was required to disclose its APIs and protocols was useful only for “interoperating with a Windows Operating System Product”, not for implementing support of those APIs and protocols in any competing operating system.
It's been discussed in multiple articles that Microsoft had considered moves it could make to kill Google, but didn't because of it's recent antitrust settlement.
> As the government sued, Microsoft executives became so anxious and gun-shy that they essentially undermined their own monopoly out of terror they might be pilloried again. It wasn’t the consent decrees or court decisions that made the difference, according to multiple current and former Microsoft employees. It was “the constant scrutiny and being in the newspaper all the time,” said Gene Burrus, a former Microsoft lawyer. “People started second-guessing themselves. No one wanted to test the regulators anymore.”
> There had been informal conjectures about reprogramming Microsoft’s web browser, the popular Internet Explorer, so that anytime people typed in “Google,” they would be redirected to MSN Search, according to company insiders.
> Microsoft was so powerful, and Google so new, that the young search engine could have been killed off, some insiders at both companies believe. “But there was a new culture of compliance, and we didn’t want to get in trouble again, so nothing happened,” Burrus said. The myth that Google humbled Microsoft on its own is wrong. The government’s antitrust lawsuit is one reason that Google was eventually able to break Microsoft’s monopoly.
Not at all. It's to split Amazon retail and AWS. Not that I'm opposed to that or not, but it is the most obvious. If you look at templates of prior antitrust action, you'd probably see roadmaps of splitting ad presentation/platform from ad brokering/targeting in all of the companies mentioning.
AWS has plenty of viable competitors. They should split Amazon-the-website and Amazon-the-supplier-logistics-and-physical-retail-company, and force Amazon-the-website to accept listings from competitors fairly and openly.
I think you're getting downvoted because the "AWS has plenty of viable competitors" is not really material - it's just that Amazon gets anticompetitive advantages as a combined entity.
And that's really a shame, because you're also dead on about the logistics/product point. I almost mentioned that, but it's complicated by competition from Walmart, Target, et al. Upvoted you on that basis. That similar to my point of "ad distribution / ad sourcing" split on FB and Google.
windows was never dependent on internet explorer to operate. MS put a simple DLL with HTML and other web tech in the OS, making it easier to serve up help and other content. What they did (IMHO) was completely reasonable in terms of OS integration. Look at ChromeOS today- it's the same idea, taken to its logical conclusion.
> And Windows was dependent in Internet Explorer to operate.
I mean it was and still is dependent on MSHTML for rendering things like the help system as well as rich text in many pre-XAML apps. You don’t want the icon on your desktop, fine, but it certainly is a core part of the OSs rendering system.
Not really; chrome and Android are far more independent.
YT is integrated at every level from infrastructure on up. It depends on Google-internal libraries which are in turn integrated with other parts of the infrastructure... It would pretty much amount to a full from-scratch rewrite of almost the entire product.
Moreover, I'd question whether other providers even have the available public resource capacity to support YT.
I can't really see how. It would literally cost billions of dollars, be extremely wasteful in terms of duplicated efforts, consume millions of SRE and SWE hours, and the result would be slower and worse in many ways. Then people would complain that youtube sucked even more.
To my knowledge, American monopoly laws focus more on the welfare of the consumer and whether customers are being negatively affected rather than the companies themselves. There’s nothing wrong with having a monopoly, but where issues arise is when consumers start to be hurt.
In this context, how do Elizabeth Warren’s comments mesh out?
Monopolies are inherently harmful to consumers, as reduced competition means less parties can compete for the best offering, or push to create a better product. The myth that a monopoly "isn't hurting anyone" is nonsense. It's existence is enough, and yes, impacting other competitors negatively directly harms consumers. There has been an outdated focus on price specifically, which is why many free services have evaded the law for so long.
That being said, Warren directly states something tech companies should be competing on: Privacy. An issue with direct consumer impact, that due to monopoly status, these companies have largely not set as a priority.
I recommend listening to Planet money's series on antitrust. You'll see why your statement was indeed the rationale behind not enforcing the monopoly regulations. Spoiler: it wasn't the care for the welfare of the consumer.
This gets me very excited. As a bay area resident, we've seen the income stratification from these companies ruin our way of life. It's just untenable.
I'd like to say this is just politics but I'm not even sure it's good politics. How many people are really concerned about the size of Amazon, Facebook, Google, etc. If people are that concerned, why do so many people I know have Prime?
The fossil fuel industry continues to run rampant. As does the Military Industrial Complex. The former is a key player in the degradation of the planet; the latter is a money sucking Hover that is sucking the life out of infrastructure, education, etc.
The environment and peace are much bigger issues than taking down and busting up the tech giants.
Editorial: I want to like Liz Warren. I can related to some of her ideals. Unfortunately, as a politician she too often comes off as inexperienced, out of touch and/or naive. This is another one of those times.
> I'd like to say this is just politics but I'm not even sure it's good politics. How many people are really concerned about the size of Amazon, Facebook, Google, etc
Oh, lots and lots.
> If people are that concerned, why do so many people I know have Prime?
The reason so many of the people you know have Prime is because of Amazon's dominant market position.
> The fossil fuel industry continues to run rampant. As does the Military Industrial Complex. The former is a key player in the degradation of the planet; the latter is a money sucking Hover that is sucking the life out of infrastructure, education, etc.
> The environment and peace are much bigger issues than taking down and busting up the tech giants.
Good points, but can we not do all three of these things? (1) Shrink the Defense budget and (2) Invest in renewables including nuclear tech, (3) Tackle Facebook and Google's dominance of net advertising and search and social media and Amazon's of e-commerce and so on …
> Editorial: I want to like Liz Warren. I can related to some of her ideals. Unfortunately, as a politician she too often comes off as inexperienced, out of touch and/or naive. This is another one of those times.
?
“Elizabeth Ann Warren (née Herring; born June 22, 1949) is an American politician and academic serving as the senior United States Senator from Massachusetts since 2013. Warren was formerly a prominent scholar specializing in bankruptcy law. A noted progressive leader, Warren has focused on consumer protection, economic opportunity, and the social safety net while in the Senate. Some commentators describe her position as left-wing populism.[2][3][4]
Warren is a graduate of the University of Houston and Rutgers Law School. She taught law at several universities, including the University of Houston, the University of Texas at Austin, the University of Pennsylvania, and Harvard University.
Warren's initial foray into public policy began in 1995 when she worked to oppose what eventually became a 2005 act restricting bankruptcy access for individuals. Her profile rose due to her forceful stances in favor of more stringent banking regulations following the 2007–2008 financial crisis. She served as chair of the Congressional Oversight Panel of the Troubled Asset Relief Program and was instrumental in the creation of the Consumer Financial Protection Bureau, for which she served as the first Special Advisor.”
> I'd like to say this is just politics but I'm not even sure it's good politics. How many people are really concerned about the size of Amazon, Facebook, Google, etc
Oh, lots and lots.
> If people are that concerned, why do so many people I know have Prime?
The reason so many of the people you know have Prime is because of Amazon's dominant market position.
Yes. But if they are THAT concerned they would be dropping Prime and shopping elsewhere.
The "lots and lots" - if they exist (you added no link) - are likely to be the Coastal Elites. The same minds who were so out of touch we got DJT. Regardless, to think that Middle America is going to go from "build a wall" to "break up Facebook" is, at best, a stretch. As politics goes, this is a non-issue.
p.a. After the crash of 2008 we were told by many a political "leader" (including the POTUS at the time) how there was too much power concentrated on Wall Street. Liz W was one of those "leaders". Yet there were no breakups, etc. While I wouldn't put SV in the same class as WS, it's hard to imagine anything changing.
> Yes. But if they are THAT concerned they would be dropping Prime and shopping elsewhere.
You know and I know that that's not true. People stick with things because of inertia, convenience, network effects, … To use a tech analogy, many people back in the day hated Microsoft's stranglehold on the desktop and server operating system market but very few initially changed to MacOS or Linux. To this day Microsoft still has a stranglehold on the consumer desktop market, the difference being that smartphones and tablets and chromebooks (browser appliances) have given people alternatives.
No, for me (a European) lots and lots refers to the many people outside of the US that would like to see non-US companies taking a bigger slice of the tech pie. Of course Americans are going to have less of a problem with US companies dominating the web.
I hold no firm political allegiance other than it is clear the establishment is happy with the status quo, anybody who promises to tackle concentrations of power in either big media, big tech, big finance, big you name it, gets my approval. If we spent some time talking about concrete issues and policies I bet we'd agree on a lot of things!
Is breaking them up really a priority? What benefit would that have that we couldn't achieve via properly taxing and regulating them in the first place?
It would help give China a fairer chance in the AI race. Due to economies of scale and the sheer amount of resources they command, Facebook and Google are able to conduct research that would otherwise be incredibly expensive (e.g. training AlphaZero), and offer incredibly high salaries to lure in researchers. Apparently 80% of all machine learning engineers work at Google or Facebook! Breaking this concentration of machine learning research power would give companies like Baidu, Bytedance and Tencent, which were not broken up and which enjoy strong government support, the chance to catch up and maybe even overtake the remnants of Google/Facebook.
I don't think its fair to underestimate China. Breaking up Amazon or Google would benefit China more than the west. Sure Amazon and Google are possibly too large, but their Chinese counter parts are equally as large and direct competitors. The idea behind breaking these companies up is to encourage market competition but that competition already exists and will not be broken up in China. Somehow Warren always has the wrong solutions but is generally correct in identifying a problem.
But presumably if other companies in the US got as powerful as Facebook/Google, they'd just be broken up too, for the same reasons, no? And if they weren't that big/powerful, they'd lack the economies of scale to do what Google and Facebook are doing now. So any other country with giant technology companies (which in practice right now is just China) would have an advantage.
There are industry consortiums and partnerships and the like. Surely some of these companies could find a way to work together. And surely the U.S. with the NSA could initiate its own Manhattan Project for A.I.
The original poster asked what benefit breaking them up would have, they didn't necessarily ask for a benefit that's something lots of Americans would see as positive. America and its technology companies aren't super popular in many parts of the world in recent years, and people unfond of it would welcome progress in AI technology becoming less concentrated in the US. Maybe a more left-leaning Senator like Warren might see some benefit in power being more evenly distributed globally, rather than concentrated in a few big US tech companies.
I'm definitely left-leaning economically. I also am very much in favor of giving developing nations a chance at competing with our economy.
However, I would go more or less the opposite direction of what you're suggesting. I support allowing American companies to produce jobs on foreign shores _provided those companies follow American labor laws_. I'm in favor of pro-labor regulation and I'm also in favor of free international trade, but not where the latter is at the expense of the former. A totally free world market would circumvent our protections at home.
All this to say, I wouldn't really call what you're suggesting a benefit by any view.
I think the general theory is that if we allow them to continue getting bigger and swallowing up all potential competitors, we’re basically saying these four or five companies will run everything, forever.
I think that wildly overstates the influence these companies have. Amazon is trivial to avoid. Just don't shop there or at Whole Foods. Facebook is a bit trickier because you might be forced there by a social group and they have a huge web of trackers.
Google is really the issue. They are dominant in search, browser, and maps, and they're half the mobile duopoly. It's very difficult to avoid using their products entirely and even if you did, their dominance allows them to dictate how the internet works, to a certain extent.
Not a huge disagreement here, but I think Facebook is completely trivial to avoid, while Amazon is much less so.
I couldn't care less about Facebook. Yet, while I certainly could live without Amazon (or Whole Foods), their service is very nice and WF has things I can't buy at other grocery stores around me.
I don’t see how Amazon is such an threat to consumers?
Genuine question, can someone explain how they are bad? I might give pushback to help get to understanding other people, but I’m not trying to start a war on here:)
The tech giants are too big, but there are geopolitical consequences for breaking them up. Countries like Russia and China can target smaller companies much easier than the Goliaths.
> Amazon has so much market share that its sheer size distorts the market.
> We should not allow a company to have a share over around 10% of any market. If in a certain field a single dominant company is beneficial for society, that means it is a natural monopoly, and should be served by a regulated utility.
Amazon is eroding brick and mortar mom and pop stores, but it isn't doing that because it's a monopoly (it has 5% of retail sales), it's doing it because people prefer shopping online compared with physical stores. If you broke up Amazon into 5 competing e-commerce sites, strip malls across America would still be closing, and you'd just have 5 Bezos billionaires instead of 1.
And it will do nothing to help the millions of American retail workers who are going to be out of a job, nor the logistics workers who are going to be automated out of jobs.
This is populist demagoguery and scapegoating and not looking at real solutions, like strengthening the social safety net by increasing taxes on these businesses. At least Medical for All, Free College, or UBI have tangible, immediate benefits to people suffering.
Or writing laws on Data Privacy can directly address that issue.
But simply busting up companies? It won't address the underlying economic disruption happening, and if anything, it is likely to simply increase the amount of entities tracking you and risk of hacks.
> Here's how to explain to people the distinction between fighting poverty and fighting economic inequality. If you're fighting poverty, you might say "Let's have universal health care." If you're fighting economic inequality, you have to say "Let's have universal health care. And Larry, please don't start Google." Otherwise Larry's going to mess up your numbers big time.
Since reading that, I've realized that a major part of my political beliefs is that future Larrys should be unable to start future Googles in their current form, and in particular that I don't believe it's a just use of the powers of government to enable the creation of future Googles.
> If you're fighting economic inequality, you have to say "Let's have universal health care. And Larry, please don't start Google." Otherwise Larry's going to mess up your numbers big time.
That's fucking idiocy. Or more accurately, propaganda from a billionaire with extreme vested interest in this topic.
It's pretty straightforward to say "Go ahead and start Google, and if it succeeds we're going to have some basic rules about worker's rights and compensation you'll have to follow, and we're going to tax a much larger percentage of your personal gains, but you'll still be very, very rich". At which point you're also fighting economic inequality.
Agreed. This avoids the common argument against socialism removing incentives to success, while still providing social safety nets. Allow people to succeed, but when they do, tax them and regulate them to benefit the less fortunate members of society. The rich got rich in part because of the protections and services afforded them by our modern society. In having reaped a greater share of benefit, why should they not contribute a greater share of taxes?
There is a stark difference between socialism rooted in the above idea and socialism rooted in jealousy and vindictiveness toward the wealthy just because they're wealthy. We're not trying to punish the wealthy and we can still allow them to be very wealthy. But as the US currently stands, the wealthy could contribute much more while still having far greater quality of life than almost everyone else.
The argument that there won't be incentives for success is and has always been ludicrous. It's not based in any kind of empirical reality, just on an emotional theory that people won't work if you tax them more, and an Ayn Rand novel or two.
The reality is that people compete for status, success, money, and power, within the framework they are given.
I mean we've actually tried this. If you take a group of incredibly skilled business people and tax them heavily you don't get some dystopia, you get Switzerland.
True, but also the Swiss have a direct tax on corporate capital, a VAT, a policy of taxing capital gains as regular old income for professional investors, plus many other subtleties and differences that don't fit on a bumper sticker. I think my point stands.
I mean we've actually tried this. If you take a group of incredibly skilled business people and tax them heavily you don't get some dystopia, you get Switzerland.
And what important/useful companies, tech or otherwise, got their start in Switzerland?
So if a very capable, a hard working, effective person is able to increase their wealth by 20x, and in so doing increases my wealth by 2x without my doing anything, you'd be in favor of using the power of the state to prevent this from happening because it would increase inequality?
If you think the debate is purely about relative wealth, you are misunderstanding most of it.
But even still: relative wealth distribution getting too extremely unequal has negative ramifications for any society, regardless of the absolute wealth. But again: that is NOT the issue in this case.
>>> relative wealth distribution getting too extremely unequal has negative ramifications for any society, regardless of the absolute wealth
Like what exactly?
I do not understand why people are upset over extreme wealth. I think Jeff Bezos deserves to be a billionaire and I would not want to live in a society that does not allow people like him succeed and accumulate this sort of money. The quetion is what happens with his wealth in the second and third generation. Historically in fedualism this was passed down to the next generation and the family would keep it until end of the feudalism era. In a capitalistic society it deisappears within 2-3 egenerations, especially with people like Bill Gates. Not sure what is the problem here.
There's this weird notion that you can improve your lot in life by worrying more about the contents of other peoples' bank accounts than you do your own. I don't get it either.
I don't have time to answer your specific claim about why relative wealth inequality is a problem even if the poor aren't miserably poor. It's a complex and deep subject. There's resources out there if you are curious. And yes, there's a good share of BAD arguments against wealth inequity (lots of people who are just resentful and superficial and believe even factually wrong things) — so you could spend your time convincing yourself that everyone you disagree with is an idiot. There's no shortage of idiocy. But you can also find the real stuff from smart and expressive people discussing these things better, and that's what you should try to find. Sorry for not picking out citations, I'm already procrastinating too much by writing this.
Now, Jeff Bezos is absolutely a remarkable and unique person who worked very hard and intelligently to get to where he is. But on just the pure matter of "deserve" it's so much more complex than the way you are looking at it. We don't live in a fair world. Look up "just world fallacy". In a world that is quite out of alignment from what we'd have if everyone got what they "deserve", it's simplistic to look at select cases like Bezos and judge from there.
But that's not what this is about AT ALL.
The concept of anti-trust and of managing this stuff is about power. The question is whether it's okay for Bezos and the whole company really to not only be wealthy but have monopoly-like power in the market. I have no reason to believe you checked out the link I posted earlier because you went on and repeated arguments about wealth — and this is NOT about that, not philosophically or legally. It's not even about taking away Bezos' wealth! Anti-trust is not about wealth redistribution, it's only about stopping anti-competitive threats to market competition.
> In a capitalistic society it deisappears within 2-3 generations
Well, that's just factually wrong. Capitalism doesn't just automatically do that, and the evidence doesn't support that claim either. And we don't have any sort of "pure" capitalism in existence to even study anyway. You need to get beyond these superficial specious ideas if you want to understand the reality. Start by treating your presumptions as hypotheses and figure out what evidence would be scientifically strong enough to validate or invalidate them and see how they hold up.
Not sure what to make of that first link. The first one is a bunch of quotes about wealthy people worrying that their kids are irresponsible and this one uncited sentence aligned with the headline:
> Indeed, 70% of wealthy families lose their wealth by the second generation, and a stunning 90% by the third, according to the Williams Group wealth consultancy.
What is that? Sounds like a marketing claim by a company catering services to the wealthy about how to keep their family wealth. I can't just accept it blindly.
I agree that in the (unusual) case of Gates, he's obviously not just hoarding and passing on his wealth directly, but the upbringing and advantages his kids are getting plus $10 million leaves them still really wealthy compared to nearly anyone else on the planet regardless of the fact that it's a miniscule fraction of Gates' current wealth.
Not OP, but my take on that is this: if that industrious 20x / 2x value creator could exist in a vacuum there's no reason to stop them. Im fine even with a 1000x / 1.1x split, ceteris paribus. My problem with aggregation of wealth and power is not with numerical inequality, but with the "evil" that can follow--rent seeking, externalization of costs, monopolization. If the externalities end up 0.5x-ing everyone else's wealth, this is a problem.
You should think in the terms of opportunity cost.
The alternative to what you suggest is not zero growth of wealth. It can be even larger growth of wealth when the markets work better.
The type of anti-markets and pro business approach where big corporations are shielded from the markets and monopoly powers are allowed as long as antitrust felony crimes don't happen is perversion of capitalism. The ideological foundation for this tinking was laid out in Robert Bork's book 'The Antitrust Paradox' (1978) that Reagan administration used as their bible.
I'm good at what I do and I work for a hedge fund because they'll compensate me well for it. I increase the productivity of other people at my company, without them doing anything, by giving them better platforms for their work. Chasing salary is the obvious locally rational action for me, but it's inefficient for the world. I could be making life better for the world if I could be funded to work on, say, Debian instead of our in-house build system. And I probably could be funded at about 1/20 of my current salary to do it, and provide 2x productivity benefits for you personally, but the incentives of a capitalist society mean that isn't the right decision for me.
However - you say "using the power of the state to prevent." I am not in favor of that. I am in favor of ceasing using the power of the state to enable. The government could stop recognizing the right of corporations to property and to the labor of individuals at any time.
I think the first remedy should be prevent acquisitions after companies grow past certain size.
Google, Amazon, Facebook and Apple innovated at their own in the beginning, but once the cash from network externalities started to pour in, they stared to buy market share and buy into the markets. Google did not invent Gmail (Postini), Android Inc, YouTube, AdSense (Adscape), Google Analytics (Trendalyzer), Google Maps (Endoxon).
This view misunderstands the nature of modern science and R&D. Interesting R&D is shockingly expensive, and you need mega-corps to do it. The cost of a new fab is $10 billion now, and it's been increasing exponentially. The 747 cost $7.5 billion in inflation-adjusted dollars to develop. The 787 cost almost $30 billion. The future of science and technology is not Edison inventing the lightbulb in his private lab. It's mega-corps doing mega-R&D.
This used to be less true in CS, but that's changing due to machine learning. Google has a huge leg-up in self-driving-car R&D because of the enormous amount of data it has from Google services. In "hard" R&D, even "startups" are spending the kind of capital that previously used to only be in the province of established conglomerates.
I agree you need significant amounts of resources / capital to do it. I disagree you need megacorps to do it. It's inefficient for the means of production to be held by a private company looking out for its own interests and wealth and not the good of society: even if you want the military to be more capable, the military-industrial complex is a bad way to do it. And the argument that startups need to spend money on their own fabs is an argument these shouldn't be in private, competitive hands.
At least the U.S. government does an absolutely terrible job with the capital-intensive infrastructure it touches. Having it be in charge of something like a nuclear reactor or a chip fab would end technological progress.
That reads like Graham is poking fun at Google/Larry opposers, am I missing something? He's saying fighting poverty by bringing up the bottom is noble, but fighting inequality by capping the top end is foolish.
BTW I agree with him in the sense that indices like Gini coefficients etc. are not comprehensive enough, and optimizing for simple numbers leads to distorted outcomes. I also agree with you in the sense that top heavy players in the economy are harmful to the extent that they seek rent and prevent competition.
Yes, he's being sarcastic, but I think his words have a point if taken straight, so I'm being counter-sarcastic. PG says "You believe this thing I think is nonsense, right?" so I say "I absolutely believe this thing which you were serious about, right?"
Depends what you mean by "founders." You can certainly enable people who have interesting ideas for worthwhile projects without enabling them turning into owners of megacorps, and I think he's playing on the confusion. Google the search engine started as a Stanford research project, and we should, as a society (I'm intentionally not saying as government) provide additional support for grad students who want to develop cool projects and make them real who aren't interested in turning into business owners. Saying "Don't start Alphabet Inc." and "Don't start Google the search engine" are very different things.
Awesome, upvoted for more visibility. Who needs advancements in medicine, tech, science? Not us! Everyone’s the same, everyone’s equal, everyone’s the lowest common denominator!!
Was it necessary to make $100B on it? Remember that Google started as a grad school project. Could it have continued and still been the same gift to the world? (Could it have been better?)
I disagree with these proposals, and think the sights should be aimed at companies like Verizon and Comcast, but at least Warren's proposals tend to be coherent. Although, it isn't too hard to be a "policy pacesetter" on the democratic side these days -- they lack any semblance of unified vision, and so far we have been given 3 magical proposals for legislation for fixing all the worlds problem lacking any coherent way to pay for them other than a bunch of magic handwaving and "let's just tax millionaires and billionaires more" -- the most atrocious of them being the "New Green Deal", and the second most atrocious is the "Medicaid for all"
Given recently how AOC and her cohorts were flat out embarrassed by the NY state budget director and given a lesson in basic financial literacy and economics, I think the freshman and sophomore democrats should probably lay low for a while and learn a thing or two from the adults in the room.
What's interesting about this proposal is it goes after "proprietary marketplaces".[1] Anti-trust has historically focused on breaking up huge companies that have acquired/merged with their competition. She's recognizing that another lever of power in the world: owning the platform.
Lots of tech "monopoly" power comes from network effects. Once you're Google or Amazon you don't necessarily need to buy up all the other search engines or ecommerce platforms. They can't even get off the ground.
Also interesting: she doesn't mention Apple at all. Yet they run one of the biggest platforms, and their cut (which they call "service revenue") is one of the highest growth categories for them.
This is 2019. We have come up with so many correct tech solutions to problems, like inventing the Internet Protocol Suite and so on, where we once needed government. We have email instead of the post office. Desktop printing instead of the printing press. Xerox copiers were a game changer back in the day.
Why do we need government’s help to break up these monopolies? When AOL literally was the place everyone went to just be ONLINE, it semed unstoppable. Then came the Web, with its permissionless nature, and over time it completely took over, and led to trillions of dollars of new value. The Web is the plarform on which Google, Amazon, Facebook,
built their businesses, companies that would never get permission do that on top of AOL.
Now we need something similar to disrupt Google, Facebook, Amazon. I believe Wordpress was an early start, and indeed powers 30% of all websites today. But you need four things:
1) Open source and permissionless platform
2) A unified Social Operating System with well designed components for user accounts, permissions, realtime notifications, payments etc. like the graphical OSes had windows, menus and so on. A well-designed cathedral architecture like BSD.
3) A permissionless plugin system and marketplace where anyone could develop their own components and package them into plugins and apps, and sell them to communities.
4) A layer where you could go between many different domains and have a seamless social experience. This is key.
I am really passionate about this. I have put my money where my mouth is - my company Qbix has reinvested half a million dollars over the last seven years to build a platform to do just that.
What I said is just the surface. Please watch this video to understand in depthwhat I mean:
I don't have any insight into the rationale behind the HQ2 search beyond what was reported in the media, but I've long thought that planning for a potential government-forced break up was part of it. A preemptive segregation of business units will help their case if/when this gains some steam.
This seems like a terrible thing to campaign on. There are plenty of other more important issues to deal with. Maybe not everyone, but most people I talk to absolutely love Amazon and the convenience it offers them. Definitely not going to win in the court of public opinion.
Just my 2 cents: Apple currently offers a great user experience in terms of app quality, stability, design, etc... That's because they have a total control over what can and what can't be uploaded to their app store. They run extensive analysis over each one of the apps that are being submitted to the app store and they reserve their right to reject an app even if the slightest bug occurs. That, at the end of the day, turns into a very positive user experience.
My question is: Would it be actually good for the end user if Apple is forced to lose control over the app store?
Enforcing the use of open, federated, interoperable standards when they're technically feasible would be a lot more productive than the crude approach of simply breaking up the companies. To the extent that there is a competition concern it's due to network effects, and open, interoperable standards would go a long way towards resolving these. Even for Amazon, it's only the "UX"-related company that needs to be broken away from the rest. That company would then face an incentive to interoperate will all sorts of suppliers on an equitable basis.
This would require a level of vision & planning we're not likely to see from political leaders, but I agree this is the best take here.
If the goal of antitrust action is to keep the free market competitive, I think a better way to achieve this than enforcing a breakup of big companies is by legally requiring standards for open protocols that allow for competitors to interface with each other and compete on their service quality rather than their network size.
How this would be done is a hard question without an easy answer. But breaking apart Facebook from Whatsapp isn't going to make it any easier for a new social network or a new messaging app to break into the space. Typically new social products can only enter a saturated market by targeting a niche and then expanding (e.g. Signal on a privacy/security focus or Discord on a gaming focus). Enforcing some level of open protocol makes it possible to try a new product without customers giving up because "oh but my friends aren't on here"
Companies do get spun off all the time, if it's determined to benefit shareholders. Why should the government take on this role? It's doubtful they would make decisions that are in the best fiduciary interest of the stock holders, the employees, and the customers. Generally it's best to let market forces play out. Amazon, Facebook & the Goog are pretty massive right now, but things change quickly. Ten years from now, there may be new behemoths that dwarf these companies even as these companies now dwarf former titans like Microsoft and IBM.
I’m curious what people think this would mean for hiring? If all of a sudden there a 8 or 9 smaller, but still quite large, giants competing for talent, I could imagine competing for talent would hit fever pitch.
You shouldn't be resolving such issues after the fact. If the FTC or the DOJ AD weren't diminished into such seemingly titular existences, we wouldn't have this problem in the first place.
She complains that the problem is lax enforcement of existing antitrust laws and her solution is, instead of enforcement of existing antitrust laws, radical new antitrust laws that do not focus on conduct or evidence of consumer harm?
Not only do I think the particular policy is ill-conceived, but the preference for legislation when the entire premise is an assessment that existing law is unenforced rather than defective is even more worrying. And I say that as someone who has up to this point seen Warren as probably the strongest 2020 candidate.
The more I think about this the more I focus on the Amazon case.
Amazon's core competency is logistics. They would not exist at anything like their current scale if they couldn't do 2-day delivery. That's what really gives them a leg up vs doing a Google search, finding a small e-commerce ship that sells what you want, and getting the product.
Breaking that into an independent service-- if it's possible at all-- would have far more impact, and possibly more positive impact, than anything involving house brands or an ec2 split.
I used to work at Amazon and the idea of spinning out Marketplace just seems unworkable. It's like saying that Microsoft should spin out Xbox... they are 100% dependent on each other.
If it were up to Bezos I bet he’d spin off the retail aspect of Amazon but keep AWS, the inventory/shipping logistics, and all the other infrastructure.
I choose not to use Amazon. I choose not to use Facebook.
Very difficult to not interact with Google...
I choose not to use Verizon... however COMCAST is TERRRIBLE and along with Verizon, they have shut down every mom-and-pop ISP and are responsible for the wholesale elimination of robust, in-place copper from the consumer and business markets.
Senator Warren, please add Comcast\Verizon to this list.
That would get my vote... either that or slapping Ajit Pai for me next time you see him. Thanks.
Do you somehow choose to avoid everything hosted on AWS? How do you avoid the wider societal effects of Facebook, and how do you avoid their collection of data on you via third parties?
No I don't (can't) avoid everything hosted on AWS. That's RMS-level commitment. I just don't use them in my work or for projects, and I don't use their marketplace.
I don't avoid the "societal effects" of facebook, I just don't/won't/haven't had a profile. It's not like I would boycott an event if their only RSVP/invite/info page is on facebook, more like voting with my feet when it comes to signing up for and/or utilizing their platform.
The real problem here is the culture that the current crop of entrepreneurs grew up in. No one one wan't to take time to build and grow a company anymore as it is unglamorous. Most of them are just looking to generate hype and sell to any Big Tech corp that throws cash at them as soon as possible.
As long as this culture remains in place, breaking big tech companies won't work. New ones will crop up and everything will continue.
This is one reason I still support Bernie over Warren, his ideas are more sound, and he has a purpose. I feel like Warren can come off fringe on a lot of things, and is really just trying to make herself appear progressive, she tosses out ideas into the progressive ether to see which ones will 'stick' per se and drops others. Some days she sounds on point and very intelligent, and some days she does shit like this and feels completely out of touch.
She's also very self-serving and has no sense of loyalty to other left-leaning politicians - else she might've backed Bernie from day one in 2016, instead of play things 'safe'. Her playing safe hurt her career more than anything else ever will in my opinion.
That aside, I don't think breaking up google, fb, amazon will do much...if I were to break them up, I think the only thing I'd do is perhaps have them split their cloud services from their other offerings, and maybe media services -- youtube | amazon prime video, but it's small potatoes.
I think a MUCH bigger issue is media consolodation -- when 1-2 CEO's control 80% of the media and thus the 'message' that people see, that's a much scarier proposition.
For example Sinclair Broadcasting I think owns something like 90% of local broadcasting stations now - and they send talking points and control what newscasters say in order to get political messages out - it's basically propaganda that they control, and it's very powerful esp in the wrong hands.
Comcast/nbc/hulu, att/time warner, disney/fox/espn/etc are all companies that probably are more dangerous than google/fb/amazon (w/ the exception that FB really needs to get it's privacy shit together or just die...), and if you're going after big tech why not Apple/Microsoft, Microsoft is as big if not bigger than it was when they had their antitrust case, Apple is the biggest company in the world ? Maybe we should also have a 25BN = auto-breakup for banks, since banks caused the last great recession, and are obviously dangerous when they get too big to fail.
Or maybe instead of breaking up companies we just figure out ways to tax them better -- esp. on speculation and at the investment layer, so that the money they make that 'you - the politician' feel they shouldn't be making is used for the benefit of society as well as enrichment of the CEO and their ilk.
You might be able to divide Amazon into two distinct pieces (retail and cloud services), but I don't know how you'd even start with a company like Google or Facebook. Most of the services offered by those two are only justified by the amount of data they provide for ad targeting. You can't take away those services without ruining their ad-revenue model.
Amazon is a "marketplace". Like "Google Play" or iTunes.
This seems very different situation.
As a progressive, I really want to support Warren but her policies need to solid. I am concerned the left is running off the rails with anti-vaxx, anti-GMO, anti-technology, extreme feminist wackadoodle ideas.
Can't just Bernie just dye his hair and wear a proper suit that fits?
Just wondering how weird would it be if someone at the UN proposed to break up "monopolies" like China it the USA itself. And yet, I suppose a good parallel case can be built in support of this.
NOTE: I'm not dissing the monopolies act and understand the dangers. This is just a thought pointing out different yardsticks for corporations and countries.
> The story demonstrates why promoting competition is so important: it allows new, groundbreaking companies to grow and thrive — which pushes everyone in the marketplace to offer better products and services. Aren’t we all glad that now we have the option of using Google instead of being stuck with Bing?
Erm. Should we tell her that Google came before Bing?
The $25B revenue cut off seems really arbitrary and ignore different types of businesses. Some business (like Walmart) have super high revenues, but relatively small profits. While others are smaller revenue, but super high profits.
I know this proposal is just for tech companies, but it seems like it will create as many problems as it solves.
I know that Facebook has instagram and whatsapp, but wouldn't breaking Facebook up leave the still monolithic but waning Facebook proper together? I'm not saying WhatsApp and Instagram aren't massive, but am I wrong in assuming that Facebook is still a monolith regardless if it loses it subsidiaries?
Just off the top of my head, maybe FB Markeplace and Messenger get split out into their own companies? Maybe their Live feature get's split off into it's own thing too.
That makes me think that Amazon might have to give up Twitch too
Why is Apple not part of this? The most valuable company!! What apple does with integration of software, hardware, dongle, accessory and walled garden is nothing but a monopoly! The killing of iMessage if you switch etc. Maybe Amazon, Google, FB didn't pay enough money to Warren's election fund.
This is great because it starts a conversation about monopoly power that's long been needed.
This I think is one of the understated values of primaries and presidential elections. Even if Warren is elected and unable to get legislation passed, she has moved this particular conversation forward.
While I agree that we should break apart giant companies (and not just Amazon, telecoms too), the first large entity that we should break apart, is the government.
The only way to stop monopolies from forming is by getting rid of legislation that heavily benefits large businesses.
> ... the first large entity that we should break apart, is the government.
If you're talking about the United States of America, it is already broken apart. By design we have three distinct branches, due process, and free speech/press.
I'd argue that the government is already broken apart and is in fact a cautionary tale of how doing so can lead to waste and paralyzed decision making. With the House having a Democratic majority, and the Senate and Presidency being Republican, no-one realistically expects anything is going to get done. Add to that mix the layers of state and local government before it gets to the road outside your house that's in need of paving... I think that government is broken up more than enough already.
“Today’s big tech companies have too much power — too much power over our economy, our society, and our democracy,” Warren said in a statement. “They’ve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else.”
True. On the other hand, big tech companies are the only agencies that are taking on big problems, social and technical. Break up big tech and many things won't get done. No ubiquitous high speed networks, no practical general purpose artificial intelligence, no indexed access to the world's knowledge, no voice interface minions, and so forth. Government seems unable and unwilling to do the sort of things Big Tech does.
Breaking up big tech seems to be the wrong approach and is likely to be more difficult and more destructive than it would appear at first glance. Better to enlist big tech to cooperate and make the world a better place.
Of the three I would say Facebook is the most destructive. I don't see articles on Live Science or Science Daily decrying the mental health effects of Amazon or Google, just unfair monopoly implications at Bloomberg and other business sites.
I'm on the fence about antitrust action in general, but here's an assertion from the article that I think is completely untrue:
"Venture capitalists are now hesitant to fund new startups to compete with these big tech companies because it’s so easy for the big companies to either snap up growing competitors or drive them out of business."
The possibility of being "snapped up" is very good money for venture capitalists instead of waiting a decade for an IPO. So regulating acquisitions by the big players may have a chilling effect on capital and, thereby, tech innovation.
In addition, the first mover effect is very powerful and should not be discounted. For example, the competition between Snapchat and Facebook was not as skewed as the outcome would have you believe. Snapchat had and has a large userbase, and is losing because of mistakes (including not agreeing to very good acquisition offers). I can't personally think of too many other examples of megatitans successfully squashing innovative smaller companies with an equivalent product.
This is a really interesting conversation but I really want to read the full proposal. As many have noted, what about AWS? Does Apple's App Store count as a platform? What does the data clause mean? Etc.
Will there be enough political will to get this done even if she becomes president? It seems unlikely that such severe measures would be able to pass unless the named companies help dig themselves deeper by not caring about the distrust and deep disappointment in them (Facebook for one doesn’t seem to care in the sense of really doing something better).
> He (Szabo) added that he also felt Ms. Warren is “wrong in her assertion that tech markets lack competition.”
That’s got to be one of those jokes that go viral. Most of the consumer facing services are heavily concentrated among less than a handful (considering specific areas, and not in general).
It’s time at least some of what she calls for gets done!
This topic is strongly connected with decentralization technologies since they are the most viable way that we will be able to replace the large networks of the technopolies.
This thread defines 'whataboutism'. It's supposed to be about Warren's new 3 page tech regulation bill but has more than 600 comments rehashing telecom regulation issues discussed thousands of times, without engaging a single point raised by Warren. This looks like a derail.
There are urgent issues with Google and monopoly, search, chrome, amp, android and youtube and once you combine that with Facebook a toxic predatory surveillance capitalism model based on harvesting and collating private data to build dossiers that is ominous for any free society.
But for the tech community on the frontlines of this project the old issues of Comcast and Verizon unresolved inspite of decades of heated debate are more urgent. If anyone doubted Upton Sinclars famous insight here is the evidence.
Netflix paying zero tax wasn't actually a loophole, afaik, it was because revenues were re-invested in growth, which includes hiring more people and paying more for infrastructure and such, which is something we want American companies to definitely do.
To clarify, what I mean here is that there may be other things that should probably be prioritized over splitting tech giants. There is usually limited political capital a POTUS has and if Warren had the votes, in my opinion fixing tax structure should higher on her list.
Most people are on the same page about ISPs so I will skip that.
Social networks should be public utility companies or else heavily regulated and treansparent to avoid censorship or what is referred to as surveillance capitalism.
Networks should be open for third parties in a regulated manner after a certain size threshold. This would for example prevent Amazon from creating a massive delivery network in a competition free environment and then use it to squash any new competition for decades and decades.
People might have a choice now to use Amazon or not but as delivery prices decline the options shrink to the point that you might not have any realistic alternative depivery channel.
However with current US political system that has money interest and regulations tied in a biased way towards concentrated capital these will likely not happen.
Honest question, not trying to make a statement...
Is this really a left/liberal/progressive/dem position and if so why?
I'm mainly on the right and so I don't have a lot of insight into why Sen. Warren would be taking this position. To be frank I kinda would have expected something like this from Trump, not from her. Tech companies like Amazon seem to be left leaning (just looking at Bezos and his investment in WaPo). Wouldn't Warren want strong left leaning tech companies? Why would she want to go up against them?
Again I'm not trying to trigger anyone or make any political assertions. I generally don't understand and would love the input of others for familiar with Sen. Warren's platform.
So Democrats are sticking to their guns with their belief that their problem was not going Left enough instead of realising to be more pragmatic and listen to people instead of ideologies.
I like Warren. Also, I believe something needs to be done about these tech companies enormous influence over information flow. I don't think the solution is breaking them up.
If you came here to read the HN comments about this topic, I very highly recommend listening to this podcast that I've enjoyed yesterday [0], it's economist Russell Roberts interviewing Michael Munger; the topic is "crony capitalism".
Seems like Democratic candidates are clamoring over each other to be further left, and I don't quite understand it. I supported Bernie in 2016, and even he is now too far left for my tastes.
Democrats lost the centrist vote in 2016, not the left, and if they don't take a hard right turn after the nomination we'll have 4 more years of Trump.
> Democrats lost the centrist vote in 2016, not the left
They lost huge numbers of working class manufacturing industry workers in the Midwest, who perceived HC as a tool of Wall Street, and rightly or wrongly, instrumental in the secular economic decline of their jobs and communities. This was literally reflected in a schism of working class vs professional class counties in the midwest, with the former going for DJT and the latter going to HC [1]
Michigan, Pennsylvania, and Wisconsin didn't swing to DJT because centrist's didn't have a candidate that spoke to their concerns - that candidate was definitely HC. Even many centrist Republicans who couldn't bring themselves to vote for DJT voted for her.
Those states swung because DJT at least spoke to the working class' economic concerns in a way that at the time seemed authentic, while also invoking their repressed cultural anxieties about demographic and social changes.
Democrats should stay the heck away from the racism and xenophobia that motivated part of his coalition, but they would be fools to ignore the economically-left sentiment that put him in office.
And since DJT's actual economic policy has turned out to be the same Republican trickle down, tax cuts for the wealthy approach, the Democrats have an opportunity to expose that and run against it.
If, as usual, people are voting heavily against their own interests and more according to the lobbyist propaganda fed by economics 101 professors, then you are likely on point.
Maybe we can just assume people are allowed to have different opinions, rather than implying anyone that disagrees with you is one of the "sheeple" huh?
I don't think we need to break up any of these companies. Particularly when an industry like Cable/ISP's exist, which are allowed to have an actual regional monopoly and artificially inflate prices in order to force you to use their other services.
None of these three do anything of the sort. And Amazon, really?
People's actual interests aren't necessarily their stated interests, though. The notion of people as unitary individuals with a coherent executive isn't even right. The agglomeration of desires and drives that I call "me" might spin a good story about who I am and what I want, but it's basically a work of fiction.
Also possible he was saying that people will vote in favor of keeping these companies together and not bringing anti-trust issues to court because lobbyists push hard to feed a "capitalism shouldn't be touched by the government" view which is against the consumers best interests. That would drive them to vote against Warren and her politics.
Also, do you expect people to name names of lobbyists? I think it's pretty safe to assume there are groups who feel that the FAANG companies are too powerful and need to go the way of Bell labs. And many people (wrongly? rightly?) label anything they feel is politically motivated speech as "propaganda".
The US govt has some of the biggest waste I’ve ever seen. Tens to hundreds of millions on failed research thrusts that were extreme long-shots from the beginning. Govt employees that “rest and vest” to extremes, working 20 actual hrs a week at a FTE position and getting pension at 55. It puts to shame actual hardworking Americans who are outside the elitist bubble.
It’s hard to argue when the same side benefitting from big govt wants to print money to “solve” all their problems and shut down opposing virwpoints with such vitrol. One side is actively extatic by shutting down tens of thousands of prospective jobs while not getting that funding and revenue of their projects comes from those jobs.
Walmart sell their own products, but they don't restrain their dealings with other suppliers in order to promote their own product lines. This is a key difference wrt. what Amazon is doing. In a world of fair competition, "Amazon Marketplace" would be the main Amazon Website, and you would additionally be able to restrict your view to products from the suppliers you trust, be they Amazon-the-supplier, Walmart or whoever.
If we're worried about concentration of power, invasions of privacy, and collection of private data, the by far biggest problem is Warren's own employer.
Once we've broken up the federal government, we can start worrying about these much smaller and less powerful entities!
I'm not sure Apple can claim a monopoly the same way those other three can. How would you "break up" Apple when their business is largely focused to one market that has strong competition?
I would argue that the iOS platform (HW/SW and app store) certainly meets the >25 billion annual revenue specified by Warren and should be split from other Apple services, such as Apple Music and rumored upcoming Apple streaming service.
For example, Spotify would have to pay 15-30% of its monthly subscription fee if user paid it through the IAP (which is why Spotify doesn't offer that option), whereas Apple music can do so without the 15-30% fee. Also, Spotify is not allowed to include a link to its website to pay for subscription, because it's against the Apple app store rules. The same applies to Netflix and other digital content/service providers. Apple either gets the 15-30% price advantage, or it gets the added convenience of In-App purchase for the service.
Unless I'm crazy, or HN is messing up, GP completely changed message so this makes no sense now. It used to say something about Apple hiring Al Gore to buy off democrats, and that Google, Amazon, and Facebook should be doing the same.
Just say "no" to more government manipulation of the market. In fact, we need to rollback a lot of the ways government distorts markets today. See, for example: regulatory capture[1] and patent evergreening[2].
Too often it's government intervention which creates the very "problems" that they then turn around and claim to be trying to solve.
Anyone who thinks Google is out there demoting Yelp results is a moron. The much simpler explanation that Yelp is a cancer that everyone hates is more likely. It's sad that Warren falls for FUD like this and we shouldn't forget that these memes originate from Microsoft-funded AstroTurf campaigns designed to mislead European regulators, which worked because eurocrats are gullible. The last thing we need in this election are people without the critical thinking skills needed to see through a disinformation campaign. We need a candidate who can clearly see that Google owning a small thermostat maker is not one of the country's main issues.
Here we go, buckle up. With the amount of power democrats are likely to consolidate in the next few elections there could be some serious movement on this if it becomes a priority for the party.
I think the big three are way too powerful and need to be broken up, but doing so intelligently is a tricky problem that I don't have much faith in government tackling.
Zuckerberg integrating all the services yesterday seems to be a transparent attempt to short circuit splitting the company along these service lines, he knows this is coming. I'll bet $100 he'll soon be talking about how it's impossible to split out insta from facebook because of database keys and integrated AI or whatever.
At this point in the campaign, I think people are just throwing out ideas to see what sticks. If this idea becomes super popular on, say, twitter, then it will probably enter into the rotation of things she talks about at rallies and become part of her platform. If it doesn't really catch on, I could see it not being brought up again.
I don't think it'll be a priority because I'm not really sure if this is a real thing that Warren believes or if she's just throwing this out there to see if it has legs.
If someone other than Warren gets elected, it could very well get put on the back burner. But this is defintely what Warren believes. When she was a professor at Harvard or the head of the CFPB, cracking down on very large, very powerful corporations was always her focus, whether via anti-trust or other means.
I think that's very unlikely. Maybe in the far future, but unless there is some significant campaign finance reform first, the big tech companies have more than enough cash to prevent the "worst" possible outcome (from their perspective).
This is another nonsensical plan, between ideas like this and 70% tax rates (that would certainly apply to people earning far less than $10M+ annually) there would be tanks in the street by 2026.
If there has ever been a monopoly, those 3 companies are it.
I wont speak for social media and search, but Amazon has a complete stranglehold on retail in the United States. People keep saying 'retail is dead', thats bullshit, Amazon has a monopolistic stranglehold on the selling of all goods. If that weren't the case, small shop brick and mortar shopping would still be a thing.
A monopoly means you are the exclusive provider of something. Amazon has a ton of competition. People are CHOOSING to use Amazon because they are the best at what they do, for now. It's convenient. There is NOTHING stopping you from using boutique websites, Target.com, your neighborhood supermarket, or whatever you want. You choose Amazon because they are the cheapest, fastest, and easiest to work with. That is not a monopoly.
If Amazon achieve their goal, you won't have the option of going to your neighborhood supermarket.. because it will have either been run out of business or acquired by Amazon.
The problem is that those who defend Amazon will continue claiming it "isn't a monopoly" as long as there's so much as a single person selling 5 widgets per year on the internet, reducing Amazon's market share to only 99.9999999999999%.
The question is what is the problem you are trying to solve by splitting Amazon. It seems that you are assuming the Amazon retail side will be split. I think AWS vs retail separation is a much more likely scenario. Btw. if it wasn't for the IT needs of retail AWS wouldn't have been born. Many small shops would not have been creating cloud computing as we know today. I am not sure what is the goal here and I think Elizabeth Warren is quite often wrong so I am not convinced that Amazon needs to be split. Companies like Walmart can (and do) challenge Amazon in many aspects and there are other companies like Ebay that are on the market. I do not think that Amazon retail is a monopolistic stranglehold at all.
Amazon isn’t a monopoly the way that AT&T or Comcast are. People have a choice and can easily go to Walmart, Target, or most any other retailers online or at a physical location. In this case, Amazon is winning by out-competing their competition. That’s not monopolistic, it’s winning at competition. Fairly, I might add.
One way they’ve grown is by allowing small companies to easily add their products to their stores. Good luck getting Macy’s to sell your custom line of trollface shirts. Shelf space is live or die for small brands. Amazon has a lower barrier to entry without the strong arm tactics big retailers have used for years.
Retail is often a middleman operation with exclusivity deals and price fixing. Brick and mortar is failing for so many reasons. It’s not that there are restrictions preventing fair competition, it’s that the old guard is slow and incompetent and likely won’t survive the old model of exclusivity on goods.
"Amazon has definitely pioneered online commerce and has excelled at providing a very engaging customer experience and executing the complex supply-chain steps of delivery purchases to consumers. But its success is not the result of that alone. Amazon has also greatly benefited from many years of resolute avoidance of sales tax collection on purchases, giving it an inequitable and potent strategic pricing advantage over bricks-and-mortar retailers that have complied with sales tax requirements. A recent study found that households in states where Amazon collects sales tax reduced their Amazon purchases by eight percent after sales taxes collection was implemented. The effect is more pronounced for large purchases, where the decline was 11 percent. This advantage is slowly coming to an end, but, over the years, it has cost states and cities billions of dollars in lost revenue, while forcing local retailers to compete with one hand tied behind their backs." - https://www.indiebound.org/spotlightamazon
While I believe that Amazon probably would have won regardless of sales taxes, emphasizing "fairly" seems a bit strong.
Independent retail isn't dead but it sure is limping. I've been trying to get a book from a local book store that specializes in computer shit for a week and a half now; they had to special order (even though it's not particularly obscure) and said it would be three to four days, but it still hasn't come in and I think they're getting annoyed with me checking in daily.
If I'd bought it on Amazon, I could have had it within hours. But I wasn't really in a hurry and thought I'd support a local business. I'd probably do the same again, but I can see why many people don't want to put up with this.
I think retail is dead for me. Other than grocery store for food and the drugstore for health care items, I hardly ever go to a physical store for any reason. I was at an Apple store yesterday to get an iPad fixed and before that, I was at a record store just after Christmas.
If Amazon was shut down tomorrow, I'm not going to start going to bricks and mortar stores again. I'd find new online suppliers.
1. Small brick and mortar shopping is still a thing.
2. Amazon has literally thousands of online competitors, many of whom also have physical stores that get tons of traffic: Walmart, Target, BBB, Costco, Home Depot, Lowes, Pharmacies, etc., etc., etc.
The obvious place to start splitting is to separate search from other things, like a non-search ad business, an OS, a browser, a mail client, a mapping and navigation business, and hey, another OS.
But I don't think it's impossible to split up search, either. I'm sure that Google doesn't just have 1000s of people working together in one big room with no structure. Their current organizational lines could tell us a lot about useful ways to break it up. Historically, for example, there were search infrastructure providers like Inktomi that sold services to consumer-facing search engines. Maybe a crawling-and-archiving group is separable; there are times I sure would have paid Google to use their crawl rather than doing my own. Parts of search were previously separate companies that perhaps could be spun out again. E.g., a lot of the structured-data stuff was once Metaweb.
You silo the search engine segment of the business as one company, the advertising segment as a separate business, etc etc. Alphabet is more than just the Google search engine at this point.
You would probably split google's search engine off from the rest of their services/products, so that they can't use their search engine dominance to unfairly harm competition.
Similarly, you could divide Amazon into a platform company that does fulfillment for others and a separate company that sells their own products, as well as splitting off things like AWS into their own companies.
a study of Standard Oil is really instructive. It is not a matter of there being no competition, it's a matter of having such market power that you can dictate rates for your competitors. Standard Oil got paid every time a railroad shipped a competitors oil!
But no, because Comcast has -bribed- donated to way more congresspeople than Google, because they’re better at playing that game.