Break Up the Tech Giants? No, Just Level the Field
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Uber flaunting taxi regulations is a special case (IMHO).
Outside of that, be careful what you ask for. In the US, certain utilities are absolutely NOT liable for user content. If you use a cell phone to plan a crime, Verizon is not liable for what is said or written.
I do think the emerging tech monopoly is a problem (Google, Apple, Amazon, Facebook), but it's not because of lack of application of old regulations to new use cases.
It's because: technology moves quickly, there are strong network effects, and law+regulations have failed to adapt quickly enough.
Meanwhile, in every city where Uber pops up transportation gets better. Taxi monopolistic laws were meant to be disrupted, and I'm glad Uber has done it.
Uber than devoured the market by using rich guy connections to raise money, and ignoring regulations. And that's what people hate.
Though Uber etc. still haven't completely solved the attitude problem of drivers who seem to feel they're doing you a favour rather than providing a service.
> I love how people are now all of a sudden defending the "Taxi regulations" as if an artifical monopoly that was serving no one's best interests except for the monopoly was somehow a great thing.
Conjecture, disregarding.
> It's a lazy argument, especially for HN where old industries with arcane rules are meant to be broken.
I cannot refute this.
> calling a cab 1 hour before you needed it was required, and you wouldn't know if they would actually come or not
This is still very true.
> after waiting 1 hr they didn't come, you would be out of luck.
This is true.
> in every city where Uber pops up transportation gets better.
This is the only thing I could come close to refuting, but it'd be an argument built wholly on anecdotal evidence.
We should not be so easily provoked.
In reality, I can be both pro-taxi and pro-Uber, or vice versa. Furthermore there are plenty of Uber defenders as well as attackers here on HN, so suggesting people are "all of a sudden defending taxis" seems a stretch.
I agree that the taxi industry had and continues to have many problems, but I don't agree with much of Uber's behaviour either.
I don't remember that, because I live in a country that doesn't have awful taxis, and where Uber has little to offer except dubious insurance status.
https://www.bcbusiness.ca/vancouver-has-fewer-taxis-than-any...
I think the main thing about tech is that it makes accessing the global market easier than ever. Monopolies in one sector can now extremely easily hop into another market. If anything it feels like an accelerated version of the railroad barons
It sure feels like antitrust laws could be used effectively. Ultimately monopolies do have a lot of money and lobbying power though. Imagine being big enough to basically absorb the billions in fines from the EU. You're either a bank or Google.
How do you fix that apart from ripping the company up into small pieces like with AT&T
Regulation should be focused on removing FB / Google's ability to unfairly leverage their size to thwart up and coming competitors.
Otherwise you simply freeze the status quo and cement FB and Google into unassailable market constants.
Sure you can regulate them to keep them from acting poorly, but what's the point if they can still squash the next Facebook or Google?
Edit: Curious on thoughts on this, but it doesn't seem to me like a progressive corporate tax rate (including mandatory minimum) based on market share (with the overage dedicated to funding basic research) would be a terrible idea.
If you have outsized market share, you're probably receiving more than your fair share of the commons, so reasonable to pay that back.
It's not rocket science. We (humans) use it every day. It's just contextually and subjectively defined by group consensus.
What's the average between "leave them alone," "tax them more," "dismantle them," and "hang the founders as an example to others"? I've seen all these options voiced here. Since you do this "every day," please help me understand how to average those "fairly"
Should you wish to continue these lines of questioning then I suggest you author and submit an article. Your line of questioning would both fit better and garner better responses in a thread if its own.
Why would you ask if the point of view is upsetting, then drastically rephrase your comment to "clarification"?
Changing your comment that drastically is quite disingenuous. The original better demonstrated intent, which was to demean, not clarify.
If the "community" set up these systems(on which these companies are parasitic on), they can change them in a way that benefits the community at large.
As an outsider, it's fascinating to watch the process unfold. The current drum that's being beat by the media is tax-reform. Is this really the most pressing issue? Is the need for reform a given as the media suggests without question (right or left), or are there marching orders from the conglomerate overlords to push for a lucrative agenda?
I think sometimes there's a commingling of "the system is complex" and "an individual is powerless" in recent political narratives, to the detriment of hope.
The "system" (by which I mean elected politicians, lobbyists, campaign contributions, the Illuminati, etc) is ultimately grounded in popular will. Clinton lost because people were upset.
I'm not denying regulatory capture, revolving door lobbying, and corporate interests aren't part of the system.
But you know what else is? Local primaries. Local executive officials (school board, mayor, etc). Visiting your congressperson and framing your issues in a way that speaks to them. Making campaign contributions.
I think it's too easy to nihilistically say "the game is hard, therefore I'm not going to play."
Bullshit. The democracy game is as it has always been (and a helluva lot less corrupt now than in previous centuries). But all that's required for evil to triumph is that good people don't engage.
Regulation (invasive action is general) is for when enough people are really unhappy. Who's unhappy in this instance? The innovators?
The issue with monopolies (e.g. ATT in the Ma Bell days) is not that they're intrinsically evil, but that they're terrible at allowing innovations to reach the market.
These billions in fines are based on % of revenue; so by definition almost every business will be able to absorb the EU's fines; it's this big to be an actual disincentive to an entity that is Google-sized.
Large entities are in many ways actually far easier to regulate than small entities, since you can actually keep track of them and hold them accountable.
> How can these benign, universally loved innovators be stopped from turning into evil, soulless corporate behemoths? Break up companies such as Facebook, Google and Amazon, (...) Or perhaps recognize them as utilities (...) Neither makes sense in most cases.
In fact they advocate for c): Tech giants should be treated as classical business. Amazon like a retailer, Uber like a taxi comp, Airbnb like an hotel brand, …
For Facebook they talk more about the fact if it was treated as a media company they should keep track of who is running ads and follow regulations on political ads.
"These giant tech companies are doing too well, we need to burden them with regulation like utilities (Verizon, AT&T, etc) and that will give competitors a chance."
Let me ask you: are you happier with Apple or with AT&T? Apple? Then why are you trying to give Apple incentives to behave more like AT&T?
That's a really interesting proposition and one that I think bears looking at.
Facebook and Google are effectively trying to become privately owned utilities, aka natural monopolies, for access to the internet. Facebook with their internet.org and google with googlefiber. So there is a case to make there for those companies being looked at like utilities.
However I'm not sure how Amazon fits that narrative. Amazon Marketplace is a tiny chunk of their sales revenue, despite it becoming the largest part of their fulfillment. AWS isn't infrastructure in the same way as facebook and google are trying to do.
I think it's too far a reach politically - they can't even get ISP's classified as utilities.
I think the major problem here is that because these companies don't need to operate from a fixed location in the same way a steel mill, power plant etc... would that there isn't really that many ways that the government can muscle them. They feel the pressure and they just pick up and move (legally first) or shift workers around. So regulators don't have a framework for how to muscle these companies in the same way as old industry.
My perhaps naive belief is the only thing stopping these companies is outside ambition and will. Is this overthinking the utility thing? It seems so defeatist and reactionary. Oh no, nobody has beaten Facebook after 13 years, it's never gonna happen.
The government could arguably do two things here:
1. Tell them that they have to comply with common carrier style rules for any infrastructure that is deemed utility like
2. Nationalize the services which are utility like
Both are politically hard to do with #2 being arguably impossible in the US. Hell, even the railroads are still privately owned - despite the monopoly hell they went through with Roosevelt.
If anything would happen though it would be #1 as it's fairly straight forward like the FCC did with ISPs under Title II - now repealed. Again, politically difficult.
Something like how a phone number is portable between mobile cos.
With a standard protocol/API a Facebook user could move to another social network provider without losing the data or the connections.
The protocol itself can be designed as other market standard protocols are defined, no gvmt intervention required there.
It also applies to basic messaging.
Question: It's bad or good that you can send text msgs between different carriers and phone brands?
The standardization of HTML was a cause of the reduction of power by the monopolist, not an effect. Microsoft only started playing ball when their marketshare had been dropping for a while.
If you force Facebook into a standards group, they'll delay as much as they can (question the legitimacy of certain members, criticize the methodology, etc), and then they'll veto anything except a protocol that is both hard to implement for small players but also very limited, and then they'll have plausibly deniable "bugs" in the implementation.
The tech giants have locked competitors out of using their technology using government patents. Amazon held a patent on "1-click checkout" from 1997-2017. Google has patented ALL of the good web search algorithms.
https://qz.com/1057490/a-patent-that-helped-amazon-take-over... http://searchengineland.com/google-granted-patent-for-panda-...
We as a society to move past patent regulations, they are artifacts of the industrial revolution and are abused by powerful corporations. Without a team of lawyers, a simple website will be sued out of existance.
Can you think of a better way to fairly incentivize and compensate innovators while solving the problem at hand?
If I had to make a change to software patents right now, I would shorten them to five years. Maybe less.
Why is this a problem? No one forces people to get news from Facebook, search results from Google, or online purchases from Amazon. If any of these companies does or starts doing something that is truly detrimental to consumers, the switching costs are low for all of those products, and there are plenty of competitors ready and able to steal marketshare if they can offer better alternatives.
Some people worry about monopolies, but I don't - they only have power when I choose to give them my money (unlike governments who keep power by force). I worry about society being lulled into the enticing-but-false narrative that we need more regulation in every corner of our lives.
So if you live in rural Alabama and only Comcast services your area, because they're a monopoly, and your tech job requires internet what are you to do as an individual?
1) Further the monopoly and buy Comcast internet
2) Decide to not have internet and inevitably lose your job
3) Try to compete, but fail to have the start-up costs as you're a small player.
The disagreement stems from a difference in understanding of what companies are and what their responsibilities should be. Some people mistakenly believe companies should serve society out of a sense of moral obligation, regardless of profits. It's a nice idea in theory, but that's not how a free and fair market operates. History has shown that companies serve society best when profit incentives are left to the market. If consumers care about intangible contributions to society (or "goodwill") such as helping local communities, reducing environmental impact, etc., then profits from consumers' buying choices will naturally end up in the hands of companies that perform best in those areas. If other qualities are more desirable to consumers, the companies that deliver those qualities will capture more market share. In other words, companies should be held to the law (which ideally exists to protect individual property rights, not much more). Beyond that, we as consumers have direct influence on which companies survive or fail based on the votes of our dollars.
As soon as governments try to intervene and force different social benefits than those demanded by consumers, things get worse. The core profit-seeking incentives for companies remain in effect, but they now have incentives to work around regulation in the most efficient ways possible. As regulation tends to favor some companies more than others (as a result of ever-present loopholes and lobbying - or to put it differently, the government's unavoidable tendency to follow money and choose winners), those legislative efforts usually end up only making the situation worse.
If there is a problem, its cause is government, no matter what the problem is and no matter what empirical observation says about the cause.
And...
In a "free" market, it is impossible for a monopoly to develop.
And...
There is no middle ground between laissez-faire utopia, and North Korea.
You certainly seem like a rigorous and intellectually honest interlocutor.
Hence their further claim that words were being put into their mouth.
Monopolies will develop, but they will also occasionally fail and exit.
The reason why governments elevate single companies in a natural monopoly line of business to de jure monopolies is that those periods where zero companies exist could be disastrous to the functioning of other businesses. If all the local water companies go bust, the toilets stop flushing.
In a free market, if Comcast is the local ISP monopolist, it cannot stop anyone from investing in an entirely new fiber network. If you have the money to do so, you can walk into town, lay fiber, undercut Comcast on monthly service costs, and drive them to either try to compete or lose all customers. If they compete, it is a war of attrition, and the company that runs out of money first loses (if the local telecoms business is indeed a natural monopoly, which is debatable). If they lose all customers, you are the new monopoly, and you now have the option to reduce service quality and raise prices. As long as the threat of potential competition exists, a monopolist has to operate by monopolistic competition instead of secure monopoly. It is a completely different microeconomics calculation for determining price and output. Generally speaking, the price is lower and output higher than for secure monopoly, but still higher price and lower output than the market-clearing price of perfect competition.
In short, rather than charging as much as you can for as little as you can produce, you have to produce as much as is necessary so that no competitor can establish a competitive foothold by targeting your unserved or under-served customers, and set prices accordingly.
So there are real differences between the monopolies produced by the free market, and those protected by government.
That's an interesting claim. What evidence do you have that supports it?
Clearly autocracy isn't optimal, but it appears that neither is a totally free market.
> Comcast isn't the problem, but the regulations...
Anybody can "write the law" and have their well-compensated politician do the formalities.
More advanced players will simply put their stooge in an office of power (see Ajit Pai).
Do you (as many other do) really think the best course of action involves more legislation from those we know can't be trusted? Or do you expect companies to simply "shape up" because a group of people wag a finger at them?
The bigger the government becomes, the easier it is for these kinds of things to fly under the radar. As government grows, so does its power, and as power grows, so do the incentives to infiltrate and control that power. If you'd like it to stop, reduce the size of the organization ultimately responsible rather than add fuel to the fire.
Unfortunately, lobbying is also easy to abuse when you have very powerful amoral and greedy entities use it and vast sums of money, directly or indirectly, to influence politicians against the interests of the people.
> ...or is it the government's fault for _allowing_ lobbyists to exert...
Notice, however, that NOT "allowing" the lobbyists of carriers to override the good of the people is sort of a form of "regulation".
The fact that these politicians don't have their asses handed to them upon the next election illustrates that this is a bigger problem than just regulation or not. Citizens who aren't informed are as much to blame as Comcast and the politicians who are lining their pockets with Comcast money.
At the same time, there is evidence of real anticompetitive behavior that crops up from time to time.
> Some people worry about monopolies, but I don't - they only have power when I choose to give them my money...
I sort-of agree that regulation in the form of more rules isn't answer, at least not the full answer. What we REALLY need are informed consumers (AND CITIZENS) and enforcement with the ability and authority to swiftly neutralize, liquidate or "de-fang" these entities when they do wrong. Sadly, that's not the way things are going. I think its a good idea to be "worried" about monopolies.
What we really need is a friendly post-singularity AGI, or an omnipotent omnibenevolent god that directly and noticeably runs the government. But, we can't get those. What if we can't get more informed consumers either?
Informing yourself is hard work, and there's no clear way to do it (see: multitudes of bullshit everywhere on everything). Most people aren't wouldn't know how to do it even if they 1. knew they were lacking understanding, 2. wanted to change that enough to put in hours a week of research.
I mean, in theory if you go talk to people about problem X they'll be "more informed consumers", but your evangelism doesn't scale, and human nature won't magically improve any more than it did the last 2000 years of hoping it would.
What if we can't get more informed consumers?
when they dropped their initial naivety and took stock of what their business really was it was sufficiently obvious to them that they were media companies and that selling ad inventory was their business. they now fully embrace being media companies but are able to do so in a way that has, at least so far, evaded the traditional cultural and legal regulatory frameworks that other media companies deal with. I think this era will come to an end rapidly though.
Yes, and to add to that: Facebook is also a telecommunications company (their WhatsApp provides a messaging and voice platform). As such, they should open their network for competition. And they should not be allowed to harvest private information about users.
Neither Google or Facebook are innovative. Search is not innovation, for Google efficient, yes. Facebook is timing. The bulk of the hard work in computing is the result of decades of work by academics funded by the public. TCP/IP is the innovation. So market fundamentalists prone to come in when all the hard work is done and see perfect markets everywhere have little ground for complaints about innovation.
You can already see abuse of power in Google and Facebook. Zuckerberg's political ambitions will prevent egregious bad behavior for now but that just underlines the potential for abuse.
There are other issues too. Lobbying, inability to apply anti-competitive laws - amp is a glaring problem, and the wild west situation with tracking and user data, there needs to be some control and constraints here. You need to create a level playing field where disruption becomes possible and problems can be addressed by market forces before they take the field with them.
Googles search beat out lots of other companies. Their search was innovative, their business model was innovative.
Facebook convienced millions (billions?) of people to share their information on the internet. That's not innovative?
You're effectively saying that the person who has the initial idea is the innovator, not that one that brings it to success. I'd argue that if anything it's the successful implementor that's innovative.
The way it works right now is that everyone is basically agreeing to publish any information when they use these platforms. If Facebook, Apple or Google leaks this information they are not legally liable. For the ad-based revenue models they couldn't be, their entire business model is selling this information!
- Comcast
- Verizon
- Time warner cable
- Power and water companies
Tech giants:
- Microsoft
Do you want your tech companies to be more like your utilities, or your utilities to be more like your tech companies? Personally, i'd very much prefer the latter. Tech companies have monopolies granted by superior user experiences. They are deeply afraid of losing that superiority. Utility companies have government granted monopolies - they fear only changing regulation. Companies align with their incentives. If they do not, they will be replaced by those that do. I'm much more comfortable with a company who's monopoly rests on the back of my happiness, personally.
For example.
1. Google emerged in a market where there were dominate search engines, such as Alta Vista. 2. Facebook emerged in a market where MySpace was dominating. 3. Facebook is disrupting Google.
etc.
I firmly believe that the market is ripe and ready always for new ideas and tech. Are you going to be able to build a better search engine than Google? Probably not because it works well. Google will be disrupted in some other way we haven't considered, maybe AI.
Why do you believe this?
1.) The inherent mediocrity in large bureaucracies. They always turn mediocre. People inherently form factions within corporations and become politicians. This destroys the old culture and creates adverse incentives.
2.) Technology is always evolving at a massive pace. Old infrastructure in a large company becomes a burden, and stifles innovation. Startups are built to seize opportunities with new technology.
3.) Which tech companies that have historically been dominant since the 80s are still dominant? Intel? IBM? AOL? Yahoo? Microsoft (maybe but still somewhat irrelevant). Apple may be the only company, but they are in a different game.
What is exactly fraudulent about U.S. political ads placed by foreign customers?
Feels almost inevitable to me after phrasing it this way.