Google on the other hand has close to a monopoly on search (and browsers). Facebook on social medias.
and, if you can prove it, predatory pricing is illegal. amazon is absolutely subsidizing a bunch of stuff with profit from elsewhere. if and what and how the government can do something about that is a huge can of worms with wide reaching implications outside the tech industry.
IF the government wants to get involved with separating product development from distribution, they should be going after splitting primevideo from aws (like saying movie studios cant own theaters), or trying to prove that netflix is being unfairly charged for resources different than primevideo (price discrimination.) they should go after amazon logistics.
amazon is a vertical conglomerate problem not a monopoly problem (if its a problem at all.) whatever amazon is, the law wasnt ready for, but whether amazon is a good or bad thing is more a matter of perspective.
Does that mean that HN should also come under scrutiny because it can price HN free? What if I wanted to start a competitor to HN? Should the government make it so there is an environment that makes that easier?
https://en.wikipedia.org/wiki/Predatory_pricing
http://signalvnoise.com/posts/1407-why-the-drudge-report-is-...
Yes this argument is silly. But it’s no sillier than the other arguments being discussed.
So charging too much is wrong (exploiting your power) but charging too little is wrong (undercutting competitors). Whats the solution? Centrally planned prices have been tried failed.
theres probably some argument to be made that uber/lyft and any of the venture capital products being sold with vc subsidization are kind of doing this.
The whole idea of most VC backed companies is to grow big and lose money until they get acquired.
I’m not saying that YC has ever done that. I’m just taking the argument to it’s logical conclusion.
That is the purpose of all competition in a free market -- to achieve as large a market share as possible. In a stable market, this necessarily involves removing business from your competitors.
You argue that Apple does have competition, and that's nominally true if you are very coarse and sloppy with your comparisons, but due to marketing and their walled garden, they are basically a monopoly over the upper / more artistic portions of the market:
https://wccftech.com/apple-iphone-counterpoint-premium-smart...
Are you really saying that Apple has no competition in computers?
Apple has been competing against commodity PC makers for 40 years.
Or are you saying that Apple doesn’t have competition making MacOS computers? Apple competes with generic PC makers by making a differentiated experience. There was nothing stopping any PC maker from doing the same. It wasn’t like Apple was making massive profits in the late 90s when it bought NeXT and started developing OS X.
You argue that Apple does have competition, and that's nominally true if you are very coarse and sloppy with your comparisons, but due to marketing and their walled garden, they are basically a monopoly over the upper / more artistic portions of the market:
They out competed. Any of the PC manufacturers could have produced a differentiated ecosystem in the 80s or 90s instead of using Microsoft. Apple didn’t have a monopoly on marketing channels.
They can have no competition for their computers when other people are selling computers. The reason the pricing power standard is used in antitrust is that a intuitively appealing descriptive category may not actually be a domain in which all products are actually considered against each other by purchasers and thus may not actually be a single market within which competition occurs.
> They out competed.
That's usually how younger a monopoly, other than a government grant or leveraging another existing monopoly.
It's not a contradiction to having a monopoly.
No, not every company has pricing power, which is the ability to raise prices without losing sales to competitors.
> Coke has pricing power on Coke
That's an interesting claim, but not one I've seen the evidence for.
> and can sell it at premium over Generic Cola.
A premium price alone does not establish pricing power (in fact, that the sustainable price is some additive or multiplicative premium of the price of competing goods would be evidence against pricing power.)
> Does that make Coke a monopoly?
If Coke actually had pricing power such that increases in price did not produce movement to competing products, then, yes, it would mean it was a monopoly, because the descriptively similar products would empirically not be competing with it.
Unless you have an essential good. No company has complete pricing power. If Apple tripled the price of Macs, no one would buy them. The Mac’s demand is far from inelastic.
> Coke has pricing power on Coke That's an interesting claim, but not one I've seen the evidence for.
Have you compared the price of a Coke to a generic cola?
A premium price alone does not establish pricing power (in fact, that the sustainable price is some additive or multiplicative premium of the price of competing goods would be evidence against pricing power.)
And this is different than Apple charging a premium how?
If Coke actually had pricing power such that increases in price did not produce movement to competing products, then, yes, it would mean it was a monopoly, because the descriptively similar products would empirically not be competing with it
And this is different than Apple?
Pricing power doesn't have to have an unlimited range to demonstrate a monopoly in the sense of interest to anti-trust law.
> Have you compared the price of a Coke to a generic cola?
Again, a price premium is not even a related concept to pricing power.
> And this is different than Apple charging a premium how?
I've never made a claim about whether Apple has pricing power or merely a premium price; I've only said the existence of other sellers in the descriptive category of “computers” is not inconsistent with he characterization others made of Apple having a monopoly, because monopoly is designed by empirical evidence of competition (e.g., whether or not pricing power exists), not by whether or not their are other players in a descriptive category.
So how does Apple qualify and Coke doesn’t? How do you decide what the “right” amount of pricing power a company should have?
I've only said the existence of other sellers in the descriptive category of “computers” is not inconsistent with he characterization others made of Apple having a monopoly, because monopoly is designed by empirical evidence of competition (e.g., whether or not pricing power exists), not by whether or not their are other players in a descriptive category.
What exactly does Apple have a monopoly on then? Computers? Phones? Lightning adapters?
I have neither said that Apple does or thar Coke doesn't; I've never said that either of the two does or does not have pricing power.
> How do you decide what the “right” amount of pricing power a company should have?
It's not a question of “should have”; an anti-trust monopoly (which is not itself illegal, but may make other behavior illegal) exists where pricing power exists in any price range.
> What exactly does Apple have a monopoly on then?
I haven't said Apple has a monopoly, only that, again, the fact that other people sell computers doesn't mean that Apple's computers are not a monopoly (and the same would be true of any other product category besides “computers”.) Whether they have a monopoly is determined by empirical evidence of whether consumer substitution occurs between products, not as to whether products fit into some taxonomic category where there are other products.
Yes. It has a monopoly over its product.
In terms of whether we care about their monopoly power, two things matter: 1. Whether they are close substitutes to those products; and 2. Whether there is free entry & exit in the industry.
Given that a monopolist will only operate along the elastic portion of the demand curve it faces, availability of substitutes is almost a given. When the monopolist makes supranormal profits, other competitors see an opening for providing those substitutes which reduces the welfare loss from Coca Cola's monopoly over its products.
Of course not. A company need not have a monopoly in every market they compete in. For example, Apple produces an office suite (iWorks), but due to the competitive nature of that industry doesn't make money off of it.
Apple doesn't have a monopoly on computers, but it does not make much profit off of them. Most of its profit comes from smartphones, where they do have a monopoly on the upper portion of the market, and also within their own walled garden.
For example, in 2015, 50% of Apple's revenue was iPhone: https://www.businessinsider.com/heres-where-apple-really-mak...
Don't forget "if it's free then you're not the customer you're the product" -- which means it's the users who are engaged in predator pricing by not charging for access to their eyeballs.
Of course, the users aren't giving their eyeballs for free, they're trading them for services. And the companies are trading services for eyeballs. There is no money because it's barter, not because there is no exchange of value.
And that's the case with all of this. Because the marginal costs for everything in tech are so low, the "cost" of providing something to the incremental user is negligible and nothing is ever really below cost because the ecosystem benefits to the company are worth more than the incremental cost of providing service to the user.
What creates these conglomerates isn't predatory pricing, it's the network effect. People use Facebook because their friends use it. They buy stuff on Amazon because the sellers are there, and the sellers are there because the buyers are there.
But allow me to disagree with your conclusion. The problem isn't predatory pricing, but the network effects problem is still a problem.
Now, granted, the problem is as much created by the government as anything. The law (CFAA, DMCA) makes it so that people can't create a Facebook "client" without Facebook's permission.
If they could, suddenly you've got a bunch of clients that consolidate many social networks into one interface, which makes it easier for users to switch to others. If Facebook is doing something you don't like, you install another back end to your client and transparently use that service with any friends who also have it. The more people Facebook offends, the more users they lose, without any specific other service ever having to reach some critical mass before most people can stop using Facebook.
That could be brought about by removing laws rather than adding them (though you could also pass new legislation to the same effect), but in either case it does require a piece of legislation to be passed to bring it about.
But it never has to leave your friend's device, and neither would it need to with some different client.
My browser doesn’t have access to scrape all of my Facebook information and all of my friends FB information.
How do we trust that Chrome or Windows isn't currently?
> How does Facebook give access to the customer’s information and ensure that the third party doesn’t abuse it?
It's the customer giving the software access to the data. Facebook has no more to do with it than gmail has to do with whether you use Thunderbird or Outlook.
> My browser doesn’t have access to scrape all of my Facebook information and all of my friends FB information.
Neither would this need to. It has your Facebook credentials and accesses Facebook as you. No special rights, just the ability to do use Facebook in a consolidated interface without ending up in court.
It couldn't do anything a malicious browser couldn't do with your Facebook cookie.
A “Facebook cookie” doesn’t have all of the information to all my friends information
That was Facebook giving a third party everyone's information without consent. This is your friends having the information you shared with your friends.
> A “Facebook cookie” doesn’t have all of the information to all my friends information
It allows you to get all of the information that your account has access to on Facebook, which is all such a client would need.
And, of course, there is literally nothing inherently illegal (in the US, at least) about building a monopoly in any case.
Why should the government punish companies because they were able to disrupt incumbents?
Should we also punish Apple because RIM and Palm couldn’t compete?
Should future competitors to [monopolistic entity] be punished because [previous competitors] were unable to effectively compete?
In any case, I don't think punishment is really an apt metaphor for breaking apart a monopoly.
Every company I named was once dominant. Even Spotify came out of nowhere and made the once dominance iTunes Music Store basically irrelevant without government intervention.
It wasn’t government intervention that caused the once The Beleaguered Computer Company that was about to be crushed by MS what it is today.
> It wasn’t government intervention that caused the once The Beleaguered Computer Company that was about to be crushed by MS what it is today.
The criticisms of Microsoft weren't that it was preventing Apple from selling computers; but that it was using it's monopoly in the operating system to prevent competition against its other software.
> Even Spotify came out of nowhere and made the once dominance iTunes Music Store basically irrelevant without government intervention.
And if Apple decided Spotify could not be on the App Store, how would Spotify do then? (Nevermind we're ignoring the "Apple tax".)
Spotfy is an example. Plenty of Apps do pay the "Apple tax." I'd get into the complexity of how the "Apple tax" affects Spotify even though it doesn't pay it, but you seem to have already made up your mind about all this regardless of the facts.
And you act as if most revenue from online stores is not coming from in app purchases of consumable goods.
Because retail stores have to provide shelf space with real estate cost, unsold inventory cost, etc. How much is that cost to Apple?
> It was 70% to be distributed in online app stores like the ones that Verizon use to run to distribute J2ME apps.
And it costs 0% to be distributed in a Linux package manager.
Possibly something to do with Verizon having the same sort of app monopoly over its device customers that Apple does.
Because retail stores have to provide shelf space with real estate cost, unsold inventory cost, etc. How much is that cost to Apple?
So now the government should also decide what is a “fair” amount of markup?
And it costs 0% to be distributed in a Linux package manager.
And seeing how little money you can make from Linux users, the value add for distributing packages on Linux makes the price about right....
In which case the lesson is that by charging so much in a competitive market, that business unit failed. Which leads to the real point:
> So now the government should also decide what is a “fair” amount of markup?
It's not a matter of setting prices, it's a matter of having competition. Apple gets 30% because it's the only feasible way to distribute to iOS. If Apple was charging 30% and there was a competing Mozilla App Store for iOS charging 5%, I suspect Apple would lose some business to it. And if some people still think Apple's store is worth 30%, no problem -- let them pay 30% while others pay 5%. But the 5% option should exist.
> And seeing how little money you can make from Linux users, the value add for distributing packages on Linux makes the price about right....
The point is that it shows the cost of providing that service. If Debian can do it at scale for nothing, what is Apple doing that justifies 30%, and where is the option to get just the thing Debian does for free?
There was nothing stopping Mozilla from making a “Firefox phone” and having a fully integrated experience. Well they did try and failed to execute. As did Amazon, Ubuntu, and Facebook.
Apple was nowhere near the behemoth it is today when the iPhone was introduced. A company shouldn’t come under government scrutiny because competitors failed to execute.
If app makers don’t think the trade off is worth it, they are free to only target the other 80% of the phone market.
I guess they think selling loot boxes with Apple taking a 30% cut is worth it. Don’t be mistaken, that is where most money being spent on the App Store is being spent - on in app consumables.
The other major market is subscription to third party services and companies can and do sell those outside of the App Store.
The whole issue is that you shouldn't have to succeed in the phone market before you can operate an app store. Tying the phone to a specific app store is the problem. "Integrated experience" is the argument Microsoft failed to convince with when it tied Internet Explorer to Windows.
> If app makers don’t think the trade off is worth it, they are free to only target the other 80% of the phone market.
In other words, Apple has a monopoly over 20% of the app customers, in the same way that Charter may have a broadband monopoly in 20% of the country even if there are other providers in the other 80%.
Notice that this isn't the same thing as saying that Walmart has a monopoly over its own shelf space, because customers can trivially switch from Walmart to Amazon or vice versa at any time but to buy a $1 app from Amazon or Google Play instead of Apple you would first have to replace your $1000 phone. To reach the same position as Walmart, the issue isn't that they control what's in their own store, it's that there are no competing iOS app stores.
Moreover, the problem with the App Store isn't just that Apple takes 30%, it's that they can reject your app for entirely opaque reasons without recourse, explicitly including because it competes with one of theirs.
I can walk into any mobile store and have a choice between dozens of phones. Most people can’t choose their homes internet service provider.
Notice that this isn't the same thing as saying that Walmart has a monopoly over its own shelf space, because customers can trivially switch from Walmart to Amazon or vice versa at any time but to buy a $1 app from Amazon or Google Play instead of Apple you would first have to replace your $1000 phone. To reach the same position as Walmart, the issue isn't that they control what's in their own store, it's that there are no competing iOS app stores.
People can choose whether they want to spend money on an iPhone or an Android phone knowing the trade offs just like people can choose whether to buy an Xbox or PS4.
it's that they can reject your app for entirely opaque reasons without recourse, explicitly including because it competes with one of theirs.
Seeing that there are competing products for everything that Apple sells, this is a boogeymen that doesn’t happen anymore than it happens for the console makers.
You do realize that no software can be sold for consoles without the approval of the console makers - including physical sells.
No, but they can choose their home, which is the relevant analog. If you don't like Charter, just move to another city. If you don't like the Apple App Store, just buy another phone.
If the thing you have to buy to get a choice costs 1000 times more than the thing you're choosing, it's not a real choice.
> People can choose whether they want to spend money on an iPhone or an Android phone knowing the trade offs just like people can choose whether to buy an Xbox or PS4.
"People can choose whether they want to spend money on a house in Charter's service area or Comcast's service area knowing the trade offs..."
And it being no different for consoles only means that the same rules should apply there as well.
> Seeing that there are competing products for everything that Apple sells
What is the competition for Safari then? Notice that "Firefox" on iOS isn't even real Firefox because Apple requires it to use Safari's engine internally.
Also, the App Store is an app.
Yes it was one of the deciding factors when I bought my house was the internet service available.
But if I don’t like Apples policies it’s a lot easier to buy another $500 phone than a $400K house.
What is the competition for Safari then?”
Opera Mini....
Also, the App Store is an app.
Apple “sells” the App Store?
Microsoft is a goddamed convicted monopolist. The conviction significantly changed their internal processes and they were much more careful after that point.
They tried to compete in both the media player, digital music, and phone market and failed.
They are still trying to compete in search.
Yes, they tried to compete, not just buy whoever they could and abuse the rest of the market which means the conviction had the intended effect.
They tried to buy Yahoo.
They were convicted of antitrust violations, sanctions were imposed, and they weren't dominant forever.
Since a key part of Warren's criticism of the past that has led us to the current state of internet giants is that it results from a complete failure to enforce antitrust laws along the way, there is implicitly a contrast with Microsoft where, even if it was fairly light touch in the US due to timely election of an MS-friendly administration, there was enforcement and sanctions.
Microsoft is still just as dominant in the PC operating system market and the desktop productivity market as it was in 1999.
The sanctions were on the way they illegally leveraged that (legally attained) monopoly to monopolize other markets. Something which they've been decidedly less prone to do since. Well, at least for a while, they are now pretty much following the lead of the companies Warren is complaining about and, to the extent the latter are benefitting from lax enforcement, so are they.
You really think they had a strategy meeting and said that their strategy was going to be to always be a strong second?
No, I think they were, at a minimum, more restrained in unlawfully leveraging their existing monopolies to do that thsn they were in the 1990s with the browser, not that they didn't try to dominate those markets.
But as far as being uncompetitive because of a previous business model is the entire premise of the “Innovator’s Dilemma”. It’s not the governments responsibility to protect old business models.
If Facebook were to lock Apple users out of new critically important Instagram filters because they wanted to sell the FacePhone. One could argue that they shouldn't be allowed to abuse their market position in social media to make unfair inroads in the phone market.
IMO, these things are hard to regulate, and most of our walled gardens are surprisingly interoperable :)
This is not true, despite being repeated extremely often. See https://en.wikipedia.org/wiki/United_States_v._Alcoa
I think the modern test is is it possible for someone to compete with Amazon? Costco and Wallmart certainly do. If you break up Amazon, I think online retail will just move to the next biggest player.
As a followup, should that definition remain the legal definition of a monopoly? Do we need a modern appraisal of that definition?
While having a huge market share is a given in such a situation, it's nonetheless not the definition
> A monopoly (from Greek μόνος mónos ["alone" or "single"] and πωλεῖν pōleîn ["to sell"]) exists when a specific person or enterprise is the only supplier of a particular commodity. [1]
1. https://en.wikipedia.org/wiki/Monopoly
The legal definition implies a tremendous advantage such that consumers would have no alternatives if the company raised prices:
> courts ask if the firm has "monopoly power" in any market. This requires in-depth study of the products sold by the leading firm, and any alternative products consumers may turn to if the firm attempted to raise prices [2]
2. https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
I don't think Amazon can raise prices substantially without negatively affecting their market share. Costco, Walmart and Google Express are big enough players that they could handle an increase in volume if Amazon tries to raise prices beyond what the market is willing to bear.
For vendors, the situation looks different - and Amazon certainly does abuse their position towards vendors often enough, e.g. with the AmazonBasics program where they take bestselling stuff, produce it at Amazon scales and then outprice the "competition".
All use sales data to determine what sells best and copy it. I did this for a decade, designing store brand medical devices for all the major retailers.
There are plenty of legitimate critiques of Amazon. The "private label" one is by far the weakest.
With physical retailers, I have to hope I can convince the retailer to stock it, often have to pay up front for shelf space, and then have to continue to pay co-op fees for advertising services of dubious value.
Moreover, with Amazon, I know exactly how many units have been sold at any time and have the ability, for a fee, to get feedback from the buyers. With retail, you only get a rough estimate of sales, usually lagging by a quarter, and have no easy way to survey buyers.
I'm not saying that Amazon is acting like a great corporate citizen, but having worked with Amazon and most of the major national retailers, I'd take Amazon in a heartbeat.
Amazon controls a large but minority of pretty much any market their in, until you start making smaller and smaller market definitions to the point of being ludicrous. As such, not being a monopoly, they're perfectly fine to do all this they want.
It might be that personalization is in effect here (or some sort criteria), but I sometimes would like to better filter marketplace offers I don't even trust.
I believe Warren's argument is that Amazon is abusing their position as the marketplace platform owner by listing their own goods at prices that undercut marketplace retailers.
And then the argument is that the marketplace (where it is easier to get listed) should be regulated more than the retailer (which often uses control over sales to push prices up)?
I'm not onboard with this.
How profitable is Amazon Basics anyway? I bet it's small numbers. If dropping it was enough to get regulators to go away, I bet Amazon would drop it in a heartbeat. Other aspects like Prime and AWS are worth fighting over, both in terms of their value to the company and their potential to harm markets.
In many cases, the Amazon Basics products compete with essentially brandless (or relatively unknown brand) importers. The Amazon Basics brand works in these cases by having significantly more credibility than (insert random name here) USB cables.
Its really the opposite way that store brand products have worked with traditional products in B&M stores, where the branded product generally has a higher natural reputation.
That's not actually how retail works. Products are shipped to stores first, then are sold, and only 1 to 3 months later are the vendors paid.
Unsold products are simply returned with no risk to the store.
On top of that vendors will PAY stores for better shelf space, and will even be willing to stock the shelf, for free, for the store.
What would it take to sell that product at Walmart?
What would it take to sell it on Amazon?
So Amazon might preference another product, while Walmart both preferences other products and doesn't even accept most. Walmart preferences other products online as well.
Yet Amazon is a monopoly? So if Amazon greatly restricted their product offering, they are good to go?
I'm not certain why we seem to be debating the merits of Walmart versus Amazon. I would be willing to venture that Warren supports regulations and potential antitrust action against Walmart, too. Just because she's proposed antitrust action on one type of organization doesn't mean she won't also support another - indeed, she wants the same of many organizations on Wall Street, and previously sponsored legislation to regulate Walmart to prevent poor labor practices [0].
[0] https://thehill.com/policy/finance/224535-warren-puts-pressu...
Totally agree. The reason I bring up Wal Mart is to illustrate how this is essentially click-bait legislation.
Wal Mart tore through main street providing retail space for products they liked, also making their own versions and selling for much cheaper, preferencing products, etc. Dominating the marketplace and forcing businesses to close. We called that good capitalism. To my knowledge, Warren has not submitted or voted on a bill in her tenure to break up Wal Mart.
However now we are presenting Amazon as a unique type of problem and asking to break it up. With the one chief difference being the perception of fairness in presenting products equally because you can upload the listings yourself and it's on the internet.
I'm just trying to figure out why these relatively young, trendy companies, instead of a whole host of other monopolies that are far more important.
If the legislation comes down to semantics around an internet "marketplace" vs a retail store, then that begs another question of whether or not that is actually fair, and what the functional difference between the two actually is.
Whos books the capital sits on while its in a warehouse is absolutely the most arbitrary distinction in all of this. Amazon provides warehouse space, and the product provider takes the risk of unsold product. Its a fair trade that allows exposure companies wouldnt otherwise get, unless they convinced amazon to BUY their stock.
If anything is anti competitive, its walmart/apple etc forcing companies to drastically ramp up production, and then leaving them high and dry unless they accept low ball offers. It's exactly what Apple did to GT Advanced Technologies (forced a furnace company to turn into a manufacturing company, a deal they "couldnt refuse", and when they backed out / failed to deliver the company ended up ~90% smaller.)
Basically, it's not a problem if you happen to be the best in computers. But it's a big no-no to try to force resellers into exclusive contracts and so on. (If you continue to just buy up newcomers to the market that's not a problem, after all investors can just keep funding new competitors and you have to waste money.)
But of course this is a very difficult problem at the intersection of economics, politics, law and sociology.
Just thinking out loud, really.
However, as search becomes increasingly important in our lives, and as past search data becomes more important to ranking algorithms, Google might be at a point where no company ever stands a chance to compete with it.
By using Google, you make it better. It's already the best, and it already captures 85%+ of searches. How is anyone ever going to compete?
Bing even offered to pay people money to use its search engine for a while, and still it got hardly any traction.
I don't think Facebook's and Google's monopolies are too concerning other than the impact they have on online advertising. Google basically made CPC ads 10x more expensive like 10 years ago, and ever since, that's been the price of a click.
Facebook having a monopoly on social advertising clearly had no interest in starting a price war with Google to win ad dollars. They compete in separate spaces. They can each charge a premium.
I'm not sure that this, in and of itself, is a problem. Someone has to be the best, and google's product will still be the best even if you break the company up. It's not as if people will start using bing if search were broken out into a separate company; if anything I'd guess that it might increase market-share as that new company would put all their efforts into making search better rather than on broader initiatives that cut across google as a whole.
Google’s monopoly is on resources required to be a search competitor. It has a giant stash of patents related to search, and it also has an enormous collection of historical data that can never be obtained by a new competitors. On top of that it continues to extract behavioral and structural data about both users and the web from things like analytics, Android, etc. with gigantic reach.
These are gigantic barriers to entry and Google created them.
Now it’s reasonable to argue that there they did nothing insidious or unfair in order to create them.
However just because they didn’t do anything evil to create the barriers to entry they now enjoy doesn’t mean they didn’t create them or that they now enjoy a monopoly position as a consequence.
Patents are not an antitrust violation. Breaking up google doesn't revoke their patents.
> On top of that it continues to extract behavioral and structural data about both users and the web from things like analytics, Android, etc. with gigantic reach.
Breaking up google doesn't mean all this insight disappears. We need better data privacy laws to address this.
> These are gigantic barriers to entry and Google created them.
You haven't described a barrier to entry, you've described a product that is so far ahead of the rest of the market that it's difficult to compete, but there is nothing preventing a competitor from giving it their best shot. If somehow a group of genius polymath programmers developed a superior search product, nothing about google's current business practices (besides brand awareness) would hinder their success.
I have clearly described multiple of those. It’s not just difficult to compete. It is impossible for competitors to acquire the insight that Google has amassed, since it is based on historical data that is not available anymore.
Breaking up google wouldn’t make this insight disappear, but the fact that you acknowledge it exists proves my point that barriers to entry are present.
Your claim that I haven’t described a barrier to entry is therefore false based on the implications of your own statements.
I am not arguing that the remedy should be the breakup of Google, and your complaints about that remedy are irrelevant to what I am saying, and do not refute the contention that Google is in a monopoly position.
Nevertheless I am arguing that Google has critical resources that cannot be replicated by this mythical group of genius polymaths because they are now owned by Google exclusively, and that this is certainly a consequence of their market position, power and business practices.
It is ridiculous to suggest that the only thing preventing this is ‘brand awareness’. It’s hard to believe you are serious about that.
This is 100% incorrect. By that definition every company's private source code is a barrier to entry for their competitors. Clearly this is wrong.
> It is impossible for competitors to acquire the insight that Google has amassed, since it is based on historical data that is not available anymore.
I'm sorry but you are just plain wrong about what constitutes a barrier to entry. "The product is so advanced that nobody can compete" is not a barrier. "All you have to do" is produce a better product; just because that is hard does not make it a barrier.
> I am arguing that Google has critical resources that cannot be replicated by this mythical group of genius polymaths because they are now owned by Google exclusively
I am just going to repeat myself with emphasis since you don't seem to be understanding that patents are not an antitrust violation. I am going to repeat it again: patents are not an antitrust violation. If you want to discuss the ethics of software patents that's a different topic where I likely agree with you, but within the context of anti-competitive behavior owning patents does not qualify. By your logic I suppose you want to break up Tesla since they are a market leader with a massive patent-warchest. If not, why not?
> it is ridiculous to suggest that the only thing preventing this is ‘brand awareness’.
This is a misreading of what I wrote. I'll assume it wasn't deliberate. What I said was that if a group of engineers produced a better product, the only thing that would prevent their product from being successful is google's ubiquitous branding, there is nothing about google's business practices that would prevent a superior product from being successful. Your argument is that google is so advanced that nobody can produce a superior product, but even if thats true, producing a superior product is not anti-competitive.
Nope.
In the case of source code, a competitor has just as much opportunity to solve the same problem in either the same way or a better way.
In the case of data which is no longer available, there is no equivalent way to reproduce it. You either took advantage of it when it was available, or you never can.
These are two different things. Google’s code may be replicable, but their data and access to data are not.
You place "The product is so advanced that nobody can compete" in quote marks as if it’s what I’m saying, but in reality, nobody is saying this. It’s just a straw man that you can keep railing against, as if it’s what other people are saying.
You can repeat your misunderstandings again and again with additional emphasis if you like.
Same is true of google source code.
> In the case of data which is no longer available, there is no equivalent way to reproduce it. You either took advantage of it when it was available, or you never can.
The data is available through the same mechanism that google used to acquire it, i.e. by tracking user behavior; it's a common practice for just about every business with a web presence.
> Google’s code may be replicable, but their data and access to data are not.
True of literally every software company.
> It’s just a straw man that you can keep railing against
It's not a straw man, it's your semantic equivocation in order to make the claim that tracking user behavior to improve the product is somehow disjoint from the product itself. Based on that reasoning we should stop every company from tracking user behavior because that somehow creates a barrier to entry for their competition.
Before you move the goalposts any further away from patents into data collection, any answer for my Tesla question?
It seems like you have a problem with basic comprehension.
You say “Same is true of google source code“ as a retort to my first paragraph. Can you not see that I am actually saying that? Notice that the first two paragraphs are actually connected as part of an argument.
The argument is that although a competitor can potentially produce code that competes with Google’s code, a competitor cannot collect historical information about the web and searches.
Why do I say they can not collect this information?
Because it’s historical - i.e. it was available in the past, but is no longer available.
Google has the advantage of having not only a huge head start, but all the data available up to how about the structure of the web and user searches.
Patents are a separate issue, I did mention them in my original post, but it doesn’t matter whether we agree or disagree on that, since there it only takes one barrier to entry for you to be wrong.
Google isn’t just an algorithm.
It is also data. Data which is not available to competitors because it isn’t present anymore.
Your statement that we should ban user tracking is another example of you creating an absurd remedy as a strawman.
Nobody is proposing that remedy.
That doesn’t mean we have to deceive ourselves into believing that there are no barriers to entry to compete with Google.
It's moving the goalposts because when I countered the argument you dropped it, ignored it, and redoubled on data collection.
> Because it’s historical - i.e. it was available in the past, but is no longer available.
Every company that collects data collects "historical" data.
> advantage of having not only a huge head start
A headstart is not a barrier to entry for your competitors.
> all the data available up to how about the structure of the web and user searches.
Data collection is not a barrier to entry for your competitors. Google isn't stopping you from crawling the web to determine its structure. Just because google collected data on user searches in the past doesn't mean you can't collect data on user searches on your own platform today.
> Your statement that we should ban user tracking is another example of you creating an absurd remedy as a strawman.
I did not propose it as a remedy, it is a deliberately absurd conclusion meant to illustrate the flaw in your reasoning, i.e. the fact that every company collects user data and nobody ever views that practice as barrier to entry for competitors.
> That doesn’t mean we have to deceive ourselves into believing that there are no barriers to entry to compete with Google.
For someone that deigns to project insults about reading comprehension you sure are bad at it yourself. Re-read what I wrote. I never said there are no barriers to entry, I said that google's business model does not create barriers to entry for their competitors. If we're using every single competitive advantage as an example of a "barrier to entry" then the term is meaningless because it applies to every market leader.
But earlier you said:
> ‘All you have to do" is produce a better product; just because that is hard does not make it a barrier.’
Which is it - are you claiming there are no barriers to entry, or do you concede that there actually are?
As to your dismissal or the argument about collecting data. That’s also a false comparison.
Lots of people collect data yes, but they don’t have what Google has, and they aren’t trying to use it to compete with Google.
It’s not relevant, and it’s another example of you creating a straw man.
The point is that the corpus that enables Google’s search quality to be so high is not available.
Amazon has 70%+ market share in many sectors of retail, such as books. But because it's only a fraction of their business, it seems like nothing.
Which are both free products/services. How do you have a monopoly on a freely provide service? They have a monopoly on the supply (eyeballs) of the digital advertising market.