DC faces Silicon Valley's riches and ever-growing power | Hacker News Reader

DC faces Silicon Valley's riches and ever-growing power

theguardian.com

42 pointselectic46 comments

I feel like these kinds of Valley-flattering articles can only continue as long as the Department of Justice and Department of Labor continue to enforce antitrust and labor laws leniently. Google and Facebook are monopolies, Uber's profit margins shrink whenever the drivers decide to stick up for themselves and demand legal rights and status as employees, and a who's-who list of tech companies have been declared guilty in court of colluding to suppress engineers' salaries and bargaining power.

I look forward to seeing the interesting technologies the tech sector will concoct and market when the strong arm of the law finally forces it to concoct and market technologies rather than collecting monopoly rents or exploiting disadvantaged labor.

http://thebaffler.com/videos/graeber-thiel#.VxPmqyZyhyQ

Another question that's coming up more and more is whether companies like Facebook and Twitter need to be regulated by the FCC as broadcasters or telecoms. Facebook and Twitter have been blatantly influencing feeds and content for political ends and at some point people are probably going to decide they shouldn't be allowed to do that.

It is mixed regulation. The FCC relies as much on the presence of Nielsen, which is private, as broadcasters do.

Twitter, Facebook, et al, don't have a Nielsen.

Uber is a bad example because it's losing billions every year. It may just evaporate when the current bubble pops. In my opinion, they are mistreating employees because they are getting desperate to find a way to make the business profitable.

>Uber is a bad example because it's losing billions every year.

IMHO, that's what makes it a good example. It can only make money by driving its drivers' wages well below what they themselves will accept or what competing, traditional taxi companies currently pay. With the spigot of VC cash turned off, Uber is exposed as having little viable business model besides straightforward exploitation. There's basically nothing innovative or original about them that lets them make money off nothing but an app for coordinating other agents' labor. The drivers are either incredibly exploited wage-workers or independent contractors who therefore don't need Uber, but can't be both.

The problem with your narrative is that:

(1) Traditional taxi companies don't usually have employees. They mostly have independent contractors - just like Uber

(2) In many areas, taxi drivers actually pay the taxi company for the right to use the taxi. They do so because the taxi company owns or rents a government license required to operate a taxi.

If the exercise is to compare being a taxi driver for Uber or a taxi driver for a traditional taxi company, in many areas, there is no case to be made that Uber offers worse working conditions.

Well in that case, app or no app, it's a good thing taxi drivers' godawful working conditions have come under public scrutiny.

Has anyone explored why Uber is hemorrhaging so much money? Is it just over expansion?

They are in a battle for China.

Are you advocating making the US government larger in order to force the US private sector to shrink?

Heretical though it may be, yes, I am in fact suggesting that the US government enforce its existing competition laws, which are already on the books, in order to force a few megacorps down to a size where they will be subject to fair market competition and will have to come up with a business model besides monopoly rent.

Because that is heresy.

> Google and Facebook are monopolies

Which markets are Google and Facebook monopolizing?

Search, and nonprofessional social networking, respectively. As noted below, Eric Schmidt has already de facto admitted to Google holding a monopoly position.

Google seems to recognize they are at, or near, a monopoly in search.

Senator Herb Kohl: "But you do recognize that in the words that are used and antitrust kind of oversight, your market share constitutes monopoly, dominant -- special power dominant for a monopoly firm. You recognize you're in that area?"

Eric Schmidt: "I would agree, sir, that we’re in that area....I'm not a lawyer, but my understanding of monopoly findings is this is a judicial process."

This article seemed rather inane to me, complaining about Cook's standing up for privacy and Zuckerberg's anti-Trump speech or his new foundation, while ignoring the $900 million that the Koch brothers are pouring into down-ticket campaigns or hundreds of millions more from Sheldon Adelson. Somehow the emphasis on political influence got misplaced.

Remarkably, as American, Russian, and Chinese Entrepreneurs amass these giant amounts of wealth, Europe is largely left out and remains more of a middle class society. Will this in the long run be beneficial or not?

The question is, is the wealth that Europe's not concentrating in the hands of its 1% going to the masses instead, or simply not being created at all?

People in America, India and China are pushing technology forward. We've gotten GOOG/FB/Uber/Tesla from the US; WeChat/WePay/mobile stuff + Shenzen ecosystem from China; Infosys, Oyo (and hopefully smart cities) from India, etc.

Imagine what we might have gotten from Europe if they weren't held back by bureaucracy, fear of failure, egalitarianism, and whatever else prevents Europe from competing with the valley. (It's certainly not a lack of smart people - see all the Europeans who do well in the Valley.)

It's hard to see how holding Europe back could possibly be beneficial (of course I'm not a mercantilist).

"Holding Europe back," as you put it allows millions of people to have some job security and not be treated by their employers like trash as they would be in the US or Russia. I'd say that's worth way more than anything silicon valley has ever put out, let alone a bunch of companies that are unlikely to be around in five to ten years that have contributed virtually nothing to society.

As a result Europe contributes very little innovation to the world and just piggybacks off what everyone else built. That's fine - USA and China will move things forward, and India is joining the party. But if everyone did this we wouldn't have all those things that make the modern world great.

(I do wish Europe could at least stop being counterproductive, and just not surrender to terrorists. http://techcrunch.com/2015/06/25/french-anti-uber-protest-tu... http://techcrunch.com/2015/06/29/uber-france-leaders-arreste... )

If you take patent rates Europe (or at least some of its member countries) are pretty competitive. However innovation happens a) in old companies, b) in SMEs which are not venture-backed, hence don't have the same leverage.

So Europe contributes every little innovation to the world... based on which numbers about European tech companies or start-ups? I mean, if you want some conflicting anecdata from a marketing department, here it is: http://www.eu-startups.com/.

The top story on the page is about an AirBnb clone raising money from NY rich people.

You've pretty much answered the question - "if everyone did this", we probably wouldn't even have that German company at the top of the eu-startups.com marketing page.

Can you expand a bit on the bureaucracy in Europe? Do you think it's hard to create a limited responsibility company in Europe? Is it better in China?

Have you seen that law about taxes for ecommerce in Europe? In the US, the shop collects tax for the country the shop is based in. In Europe, the shop has to pay taxes related to the country the people buying the products are in. This significantly increases the complexity of running an ecommerce business in Europe.

https://www.gov.uk/government/publications/vat-supplying-dig...

It was an idea with some logic behind it, but it basically cripples European internet businesses compared to US ones by making taxes that much complicated to calculate.

> In the US, the shop collects tax for the country the shop is based in.

Legally, Americans are obligated to pay sales tax for internet purchases in the state where we live. There's a form for it, every year.

The American move is to shift the burden of tax collection onto the customer, thus ensuring that the taxes are evaded rather than paid. I don't really see moving bureaucracy onto customers rather than businesses - thus increasing the total amount of records that must be kept and paperwork that must be filed to abide perfectly by the law and pay one's taxes - as a good thing.

Agree. But it's not too bad as long as the companies require invoice (in EU sense of the term) to include VAT/VIES/CIF. The cost or price of an outside accountant to deal with your tech is not too affordable for a startup... 20,000+ euro/year just to do the book keeping.

Creating a company, at least in the UK is extremely simple. The one stop VAT rules CM30 mentioned have been onerous enough to stop smaller ecommerce places going EU wide. There were a lot of blog posts about it not being worth the hassle around the time of it's introduction.

But it's not just the bureaucracy, at least in the UK. It's the perception and treatment after a failure. It almost damns you for life. The banks won't want to lend, VCs here seem to want more of a sure thing. There seems to be little of the US attitude of "OK you failed, what you going to try next?". OK that was a lot of sweeping generalisations, and there are exceptions to the rule, but you get the idea.

I've recently given up trying in the EU (for now). In the US, it's really easy (rocketlawyer.com/square.com), here it's a relative nightmare. From accounting and taxes to liability to contract and employment law to even relatively simple things like opening a bank account it's not startup friendly. IMO, most of the EU regulations and frameworks were developed within the confines of local low-risk capitalized companies, such as agriculture or hair salons. And as soon as you try to move money outside the EU, you might as well throw it in a bonfire.

It takes less than a week to set up a company in the UK

The US and EU markets are not as divided and insulated from each other as the US vs China vs Russia markets are. That means that for the most part US tech products find their way here as well as US money used to influence our politicians.

Soooo... Spotify and DeepMind don't exist?

DeepMind is owned by Google and Spotify may not exist in five years due to increased pressure from other streaming platforms like Apple. Spotify is in a make or break phase right now.

DeepMind is a European start-up purchased by Google. The fact that America allows successful firms to grow into economy-dominating megacorps isn't really an argument that Europe somehow prevents the creation of wealth and businesses when you account for the fact that Europe actually enforces competition laws.

>Mark Zuckerberg and Tim Cook wield influence comparable to that of Andrew Carnegie and John Rockefeller

Can anyone point to any influence these people are actually having on American politics?

I mean, according to the tinfoil hat brigade, the Rockefellers are behind every second conspiracy on the planet. How will these other obscenely rich folk get a pass? I think the political tides have already shifted. The 1% are the 1%, regardless of whether we think iPhones are cool. I'll bet on Tim Cook and Mark Zuckerberg having less influence going forward.

Well we first we have the moderation power, as discussed yesterday. https://news.ycombinator.com/item?id=11500234

And then the power that comes with lavish charitable donations.

That's the tragedy of Citizens United. They would have less influence if they couldn't turn dollars into votes.

Unfortunately, they can, and so a few billion dollars buys a fair amount of political support.

Have you paid any attention to the news lately? The number 1 and number 2 candidates of the republican and democrat parties are small money candidates that are embarrassing the shit out of both national parties. The GOP golden boy, Jeb Bush, has had to bow out. Even with a $100mm war chest voters still weren't buying it.

The only thing CU has done is put into law what everyone kind of already knew.

Trump is a populist running on his party base's concerns after they've been whipped up for the past decade about how evil everyone else is. And reaping the long-term consequences of the Southern Strategy of the 1950s/60s Republican party.

Also, he's #121 on the Forbes 400 richest Americans.

Sanders is funding from small donors, but he's #2 in a two person Democratic primary race.

I'm not seeing an explanation here that consoles me about money not having an oversized impact on American democracy.

And "what everyone kind of knew" (but was illegal) is far different from 'explicitly condoned by the Supreme Court.'

Perhaps Zuckerberg and political media, Cook and privacy?

The 'robber barons' had enough power to get the police and national guard deployed to violently put down strikes and to protect employees working during strikes. None of these CEOs have anywhere near that kind of influence.

They have lobbied quite a bit, but quite a few of those lobbying efforts have failed.

In the late 1800s there wasn't any legal support for organized labor. Companies had the right to simply fire everyone who went on strike. After that it's just a question of moving squatters off your property, and for that you go to the police. That's not a question of CEO political influence - the laws unions needed to survive hadn't been passed yet.

No, they also got the police to deploy to remove them from public places, which was clearly protected speech. Violence by their hired security against employees, clearly illegal, was politely ignored. They rather blatantly controlled the police in some cases.

Well, sure, if you're going to throw in the qualifier "in some cases" you can make the case for anything. The normal state of affairs was for the workers to refuse to leave the factory, illegally, and for the local authorities to give them a lot of slack, because there were far more workers than owners. Look at the Homestead Mill strike, for example. The reason the battle itself and the eventual intervention of state militia was the local cops refused to do anything.

My point was that these tech CEOs don't have that kind of influence, and they don't. End of story.

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