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Comment by raldi | Hacker News Reader

One of the primary characteristics of a monopoly is high customer switching costs. For example, a business running on the Microsoft platform in 1995 could not realistically switch to Apple, Solaris, etc. During the heyday of Standard Oil, you could either buy from them or find a way to get your oil shipped from overseas. If you didn't want to use AT&T in 1975, you'd... uh, have to work at the speed of telegrams?

Meanwhile, if someone builds a better search engine, all of Google's customers could switch to it in ten seconds and never look back.

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There is a lot to unpack here.

>One of the primary characteristics of a monopoly is high customer switching costs.

The algorithms are of no value and can be duplicated by anyone. The real value google has is the search click data, which can't be obtained or generated. So yes there is actually an extremely high barrier to entry.

>Meanwhile, if someone builds a better search engine, all of Google's customers could switch to it in ten seconds and never look back.

Well, no, because Google's customers are companies. The users are not the customers. The companies will go where the users go. How do the customers take their advertising data to the new search engine? They cant. Also, building a better product matters only sometimes. "Better" here implies that users are rational and are capable of evaluating competing products. If that were the case most companies would be out of business. Thankfully it isn't. Ironically, I suppose there is _some_ hope. Not by building a better product, but using either trends/fads/viral memes/ or pure marketing or other means of attracting users. But yeah, probably several hundreds of millions of dollars would be my guess.

High switching costs can make monopolies worse. And yes, it is possible to switch away from Google search. But it's still a monopoly, and it's held in place by various means.

For example, the vast majority of people - not tech people like us - do think that they can't switch away. They don't understand the distinction between a web browser, a search engine, email, etc. For them, Google is how they access the internet, and that means google.com, and often also means Chrome and gmail.

The monopoly is also held in place by Android, which defaults to Google services (search, email, etc.) very strongly. Of course, us tech people know how to avoid that if we want, but the majority of people don't even know they can. And even if they do, it's not easy for them.

And Windows defaults to IE and Bing search. I don't see any antitrust case against Microsoft for essentially the same thing you are describing.

Or Apple and Safari.

There was a successful antitrust case against microsoft because of the way they abused their OS to get browser share with IE. I believe that the case was mostly because MS purposefully raised the switching cost by adding non standard features to their browser.

A bigger part was OEM licensing restrictions that prevented other browsers from being pre-installed.

There isn't a single default search that's Google on any OS besides Safari on Apple and Android. Windows defaults to bing, Linux via Firefox defaults to Yahoo. People CHOOSE to use Google. No one is forcing them.

>> if someone builds a better search engine, all of Google's customers could switch to it in ten seconds and never look back.

The point here is not that Google is a monopoly, rather that it's treating its competitors unfairly.

The fact that Google has competitors indeed means the "only shop in town" excuse holds no water. Google does have competitors, except they're not in the search business, they use Google's search business. And Google uses this fact to put them out of business and take their customers.

Also- just because you don't have any options when someone puts a gun to your head doesn't mean it's fair for them to do so.

Antitrust law is emphatically about what's best for consumers, not what's best for competitors.

Healthy competition is best for consumers, and a free market is paramount to this... being able to abuse a dominant position to gain dominance in new markets is anticompetitive and bad for the consumer long term.

Now, a single competitor should not necessarily have a leg to stand on, but the acts of a first party like google have sweeping repercussions.

> Meanwhile, if someone builds a better search engine, all of Google's customers could switch to it in ten seconds and never look back.

Google's customers are advertisers. Someone would have to build a more effective advertising platform to get Google's customers to switch.

And that new platform would have to collect and analyze even more product (a.k.a. users) data, which would likely be an even greater perceived invasion of privacy.

https://news.ycombinator.com/item?id=12096168

Google is paying Apple billions to be the default search engine on iOS.

I am sure a two person startup can do that. /s

I don't understand how this reply is in any way relevant to its parent comment.

It is countering your assertion that switching costs are low. It is not easy for a new player to enter the market on an equal footing with Google.

The difficulty of a new player entering the market has nothing to do with end-user switching costs.

There are also high barriers to entry if you want to start a cola company with worldwide distribution, but that doesn't mean Coke has a monopoly.

See you are arguing that only a monopoly is illegal and unethical. Fact is, there are forms of non monopolistic market manipulation that are illegal. In the US, you can't form cartels or segment markets by colluding with competitors. Similar laws apply in Europe.

> See you are arguing that only a monopoly is illegal and unethical.

No I'm not; what gave you that impression?

So why argue about what makes a monopoly?

> all of Google's customers could switch to it in ten seconds and never look back.

Google's customers are all the businesses buying ads from Adwords.

And yes, Google is a monopoly, the cost of switching away from Adwords will probably drive you bankrupt in 2016.

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