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Comment by ticklemyelmo | Hacker News Reader

How is it that Google search results are considered a public service that must run in any particular way other than their own whim?

Is it simply a matter of scale?

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Compare that to three banks who were fined only a sum of 485m euros. Laughable.

Source: https://www.theguardian.com/business/2016/dec/07/hsbc-jpmorg...

Google is a monopoly in the search engine market and monopolies are heavily regulated.

This isn't really a regulated monopoly in the sense of a utility. It more has to do with the illegal practice of using a monopoly in one market (search) to gain advantage in another (translation, etc.). Right or wrong, that's where the line is often drawn.

Is it some form of tying? https://en.m.wikipedia.org/wiki/Tying_(commerce)

Yes and no - it's using a competitive advantage in one market to drive anti-competitive / unfair practices in another market. In Google's case, they're not quite _requiring_ you to use a service they prioritize ahead of others.

Hypothetical example: company A has such a large market share and super wide margins in the market for widgets, so they decide to enter the market for books and undercut all of the competition on prices. They can fund that undercutting strategy with the margin from their widget business, but it's not quite fair / competitive because of the "moat" that they've built.

For the search market, it's a little less clean-cut, but I can see both sides. I am old enough to remember MapQuest back in the day as the primary mapping tool most people used, but there was a big hoopla/outcry that Google was possibly prioritizing an inferior product (Google Maps at the time) in its search rankings so that the tool could get more usage and get better, at the expense of MapQuest. At the time it was virtually impossible to prove, so it didn't go anywhere.

On the other side, Google has argued that super-low switching costs exist in the search engine market, so Google doesn't _really_ have a monopoly. This is where my knowledge of anti-competitive / monopolistic law breaks down (as well as where I ethically stand as a user,) as I'm not quite sure what should determine a monopoly: the market share _alone_, or the switching costs with competitors for the consumer?

What normally determines a monopoly is market or pricing power—the ability to raise prices in some range without losing customers to competitors.

It's plausible that Google has market/pricing power in search advertising. It's less plausible that they have that in search.

Market dominance is not the same as a monopoly.

Eric Schmidt gave an interesting answer to Senator Herb Kohl during antitrust hearings.

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

Mr. Schmidt: "I would agree, Senator, that we're in that area. Again, with apologies because I'm not a lawyer, my understanding of monopoly findings is it's actually a judicial process..."

https://www.gpo.gov/fdsys/pkg/CHRG-112shrg71471/html/CHRG-11...

Google doesn't have the "durable market power" described here: https://www.ftc.gov/tips-advice/competition-guidance/guide-a...

They can't raise prices and exclude competitors long term.

This internal FTC report that was leaked: http://graphics.wsj.com/google-ftc-report/

Has this conclusion: "Google has unlawfully maintained its monopoly over general search and search advertising"

The report ended up being buried, but it at least shows that credible people with lots of experience in the area believe strongly they are a monopoly.

That's a really great source. Though they do note that Google's market power isn't all that durable (because they don't charge, and competitors exist), they obviously conclude that they have unlawfully obtained monopolistic status.

You don't think Chrome's new ad blocker is an example of excluding their competitors in advertising?

> They can't raise prices and exclude competitors long term.

Of course they can–remember: they get paid by advertisers, but it's the users that make the decision to use them.

For many businesses, search is the only online ad channel that actually works, and it's not straightforward to see how any competitor could catch up to their technological advantage in search.

Technological advantage is a legal means to become a monopoly, according to the SEC link above.

But it's not. I never use Google for searching and I do a lot of searching. It's merely the largest search engine.

"It's the largest search engine, but I never use it, so it must not be a monopoly" :slow-clap:

The lack of a viable alternative is the pretty much definition of monopoly. Just because lots of people use something doesn't mean there is a monopoly.

Def: "the exclusive possession or control of the supply or trade in a commodity or service."

Google has a very nice search engine but I personally fail to see how they control the supply enough to be considered a monopoly. Sure most people use them, but that is by choice. There are viable alternatives.

Standard Oil only maxed out at 90% market share. US Steel only reached 60% of the steel market. There were banks other than JP Morgan. A more nuanced view of monopoly has to do with how much power they can wield in the markets.

And of those which ones had successful antitrust litigation against them? Just Standard Oil I believe.

Microsoft was declared a monopoly when every computer in my school was a Mac. Internet Explorer was considered a monopoly when everyone I knew was running Netscape/Firefox. It's obvious that the US federal government and the EU disagrees with you. You don't have to have 100% control over a market in order to be considered a monopoly.

"Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power"

It's not just the EU that thinks Google has a monopoly in search. The FTC investigators from the US that looked into thought so as well. Their bosses decided not to act on it though, for reasons unknown.

The 160 page document[1] is very comprehensive, and worth a read. There's a few surprising things in there. The way they manually adjusted the algorithm several times specifically to demote "comparison shopping engines" (CSE) is very telling. Their manual testers liked CSE properties, and found the results relevant and useful. Google kept changing the criteria and questions until they found a combination that justified demoting them...so that their own CSE would get more traffic.

One of the conclusions: "Google has unlawfully maintained its monopoly over general search and search advertising"

[1]http://graphics.wsj.com/google-ftc-report/

The reason the FTC investigation was never going to go anywhere is because Google lacked durable market power. The reason they can't be accused of a monopoly is because they can't "raise prices" using their market dominance. Monopolies are not illegal in the US. Utilizing monopolies to harm consumers is.

I suggest you look into the former FTC Commissioner, Joshua Wright, which should give you some idea where the interests of the FTC's leadership has been, and likely will continue to be: https://theintercept.com/2016/11/15/google-gets-a-seat-on-th...

This says a lot more about why the FTC didn't go forward with its staff's recommendations to go forward with charges than anything else.

I don't know how definitive that is. Search may not have "prices", but they can use their monopoly in search to manipulate consumers for products they sell that do have prices. The CSE situation I mentioned is specifically something that does involve prices.

I can't find anything that says that's the reason action wasn't taken either.

You somehow managed to contradict yourself in just a couple of sentences.

Not sure how it works in the EU, but in the US antitrust law really kicks in once you monopolize an industry. So yes, at the very least relative scale matters.

Because in Europe, Google owns 90% of search. It's pretty much a monopoly. And one reason for that, probably the prime reason, is that they got in very early and in localized searches they're light years ahead of competition.

> probably the prime reason, is that they got in very early

What? Altavista, Lycos, Yahoo, ...

The reason is that they were just a little bit better than those three competitors. And the market was still small, and thus the market could still converge on another contender. So time played a role.

None of them is/was as good as Google in localized results.

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