And this would equally apply to Apple and Google who have a number of apps on their app stores. This would then lead to even more bundled apps on the phone e.g. Garageband which would decrease competition.
Most of these policies are really not well thought out.
If the vast majority of people shopped at one supermarket, and that supermarket's most popular products were largely it's own brand products, and most industries that competed with such products had largely shrunk to providing specialty alternatives or cheap knockoffs because it was so hard to compete, then there might be a case for breaking that supermarket up.
Just some random thoughts, in different contexts:
1. Buying the cheap mega-supermarket can lead to non-obvious degradations in your community (e.g. you find yourself in a news desert because the local paper went bankrupt, following the closure of the local stores who advertised there).
2. Competition keeps competitors honest, but if one company gets too much of a lead, it's competitors give up leaving fewer market-based checks on its behavior (even if it was fantastic and awesome in the first place). Eventually prices will go up or quality down, as the never-ending quest to provide increasing shareholder value continues.
3. The real costs may not be reflected in the sticker price. For instance, you pay for Facebook and Google with your data and privacy, not your money. A competitor that directly charges you $20/year may actually be a better deal.
Ummm... that's exactly what I said. In response to
"The line is not 'you are not allowed to ever do this' but 'this particular instance is hurting competition'."
I replied
"I don't think they can specifically address a single entity like that: the laws have to be applicable across the board"
I am really not a fan of Walmart but I do shop at Costco and Target occasionally and I try to check both when making meaningful household purchases to see which one's cheaper. At some level, they do have to compete with each other on price and service.
Yes they distort their respective markets and put pressure on suppliers, but so does walmart and other big retailers. So if the law comes into place, it shouldn’t be limited to the online space
If there's only 1 Walmart store in a small town (no competitors near by), does that mean they can't sell their house brand there?
What about a Walmart in a town with a Target and 80% of the sales are at Walmart? Can Target sell their house brand if Walmart can't in this scenario?
I believe the line is drawn at ‘large-scale winner-takes-all players’. It doesn’t necessarily have to be fair but it is supposed to benefit the entire economy. As long as there’s a relative balance between the economical power of competitors no measures are required.
You think it's easier to open a physical store to compete with Walmart than to spin up an ecommerce site to compete with Amazon?
On the other hand, I do not use ANY one-stop site for online shopping outside of Amazon.
[0] https://techcrunch.com/2018/07/13/amazons-share-of-the-us-e-... -- 49% of ecommerce, 5% of total retail [1] https://www.pymnts.com/consumer-insights/2018/walmart-amazon...
Regarding the ecommerce market share I’d like to know the current numbers and the trend over the years. One should not wait for 99% to start taking measures, all competitors will be dead by then.
Regarding the physical stores Amazon isn’t really trying to capture it as the barrier to entry is much lower than online and margins are low anyway.
It’s extremely difficult to project forward 10 years in tech.
> It’s extremely difficult to project forward 10 years in tech.
I think this is a common misconception. Tech giants rise mostly because they create new markets. Since their beginnings nobody beat Microsoft on operating systems, nobody beat Google in search, nobody beat Facebook on social network market share.
The point would be that once you're dominant in a market it's very hard to be moved away and it takes more than a decade. I find it hard to believe a 1T dollar company can be outcompeted during less than a few decades.
Also as the tech/online market matures things naturally tend to slow down.
Isn't this just another way of saying survivor bias? They are big because they survived and out-competed the competition, no? There were and are other operating systems, other search engines, other social networks. And sometimes even having the same things said about them... Think MySpace before Facebook. Until they got conquered.
These giants are huge because the internet -- to some approximation -- has no geographic boundaries. It's much easier to consolidate and hold power when you don't have to literally expand to every corner of the world where people physically live to capture them. Amazon and Facebook can acquire entire towns with nothing but a few more servers in the rack.
I’m not sure if MySpace could be considered a giant at the time. Sure, it had popularity and market share, but it was not spraying billions around buying up competition or consolidating its business (Instagram, Whatsapp).
So Facebook didn’t take down any giants, instead it won a fair market competition. That was my point.
The plan we are discussing is a plan for national scale governance, and since your example is not on a national scale, the plan would not apply. If the isolated town wishes to enact their own laws to regulate Walmart, they may do so.
The locals may govern themselves locally. National leaders govern on a national scale.
Sears too once had a "monopoly" on mail order products. People marveled at how amazing it was that you could order a product, mail in a check, and receive the product six weeks later, all without stepping into a store! Now they're bankrupt.
The whole concept of a business "controlling" the market is ridiculous. Amazon operates in a highly competitive, low margin industry that requires a tremendous amount of logistical overhead to function. The minute they stop innovating, they're toast.
There's no such thing as a free lunch. You pay for that software even if you're unused to putting a dollar-price on its cost.
Hard for me to get too worked up about tech giants seeing as using them is optional and alternatives abound. I don’t see how my life is made worse if someone else buys a MacBook.
None of the things that do irk me about tech companies (security breaches, unethical advertising, spread of fake news, and so on) would be addressed in any way by a breakup.
Try participating in modern society without an Android or Apple smartphone or tablet. It's still possible, but becoming more difficult each day.
(And to clarify, I don't mean "leave your phone at home today". I mean not owning a smartphone or tablet at all.)
Those are two examples. What about Standard Oil for instance? AT&T?
The centralization benefits are not geared towards consumers, and they never were.
What I mean by that is that Apple isn't the only company that could vet apps. Anyone could put together a list of "trusted" apps into a software repository/store and you could pick whichever one you trusted and use only it. This is already how Linux works.
In the long run, this is probably even better for people who want to only run vetted apps. Apple's app store policies have to cover everyone who runs iOS, which means that even with the best intentions, they can't be as permissive or as strict as some people want. If Apple wasn't in that boat, you could have an app store that had much harsher rules about data collection, performance, and permissions.
My experience has been that specialized platforms usually produce better results for their target audiences than generalized alternatives. As the sole gatekeeper to iOS, the best Apple is ever going to be able to provide is a generalized storefront.
I think Walmart fits that definition. Any sufficiently-large brick-and-mortar business inevitably expands to have an online marketplace, whether it's their main line of business or not.
Your average grocery-store chain would only not fall under these regulations for lack of size.
A significant quantity of stuff sold with the Kirkland label is just whitelabeled, with varying degrees of hidden-ness. Their recent beer for instance is labeled Kirkland up top, but also have the company (Hopf Malz something), and it's a pretty trivial amount of digging to get to the underlying Gordon Biersch.
I don't know where you draw the line though
* white labeled but not really because it's still got the original name on it
* white labeled without the original name
* self produced
Probably you could get finer grained than that too.
So it's entirely possible that you could pass a law banning large chains from doing whitelabeling, but actually you'd still get the same stuff on the shelves with their original labels and it'd be fine.
Or it's possible you could pass a law banning chains from selling their own produced stuff, but still have whitelabeled "house brand" be ok. But then if you were equitable about that in online space, - amazon couldn't sell fire phones or echo dot alexa things, but they could sell an "amazon choice" if it's just whitelabeled. So idk.
Going in another dimension, you can introduce the kind of wonkiness you get around "made in the USA" labeling on products which have all their parts manufactured elsewhere and then some trivial last step done on US soil.
- Brick and Mortar stores buy inventory and choose from what they own to sell inside their stores.
- Online platforms make revenue by being open to anyone to sell their own inventory through.
You still need to outbid existing inventory space, which is not the same as an open platform for anyone to sell through.
In contrast brick and mortar has no idea what does well until they start buying the product to sell themselves.
Target on the other hand have an online store but you are always buying from Target.
So if the law considers "online marketplace" from "online store" then it doesn't apply to Target.
...or it could cause Google and/or Apple to spin off their app store as an independent company, and allow other independent companies to offer their own competing app store.
If Wal-Mart started allowing anyone to set up shop and sell there, it would be a more apt comparison.
Apple and Google will have to spin out divisions that sell apps on their app stores. They can still partner under this plan, but must be independent entities. What’s the problem there?
I sure hope not!
The 80/20 rule for insurance companies is a good example - now they have an incentive for prices to go up, not down.
Not really. CostCo and supermarket house brands are often manufactured by the same companies that makes name brands. Also retail stores aren't "marketplaces" like Amazon is, they buy the products they offer. In short, it's often not competition, just a way to segment customers.
Amazon, on the other hand, runs an actual marketplace AND competes in it, which has different dynamics.
Though, personally, I'd rather Amazon shut down its marketplace and go back to something more like a traditional store. Either that, or they need to be make responsible for the rampant fraud that they've allowed in their marketplace.
Bundling Internet Explorer into Windows was only disallowed because Windows was a monopoly.
There was a court case about it, and then they lost the case, and then Bush took over the White House and the DOJ just completely dropped the whole case, so MS was never punished nor made to unbundle IE.
IE is still bundled in Windows to this day.
If this hadn't been the case, we'd be farther along now.
I don't see how, for example, Explorer being free held anyone back.
Do I need to spell this out any more for you?
Besides, many other browsers are available on Windows. ActiveX failed in the marketplace.
And no, at the time, many other browsers were not available on Windows, as they had a tiny market share, largely due to how incompatible they were with sites.
ActiveX failed eventually because of the rise of Javascript, and also because ActiveX was a giant security nightmare.
Forcing then to cut costs and corners (hence the adulterated meat scandals a few years ago) and bullying them into paying for in store promotions even big companies like Heineken have been shaken down.
The big 4 probably should be forced to divest themselves of their audit functions as well.
Would this not apply to Walmart and Target too?
If this only applies to digital stores, then yeah, it's total bull. Because Amazon could just build some stores like Target and Walmart.