Comment by mtgx | Hacker News Reader

Comment by mtgx | Hacker News Reader

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What did they think was going to happen when Google bought the largest mobile ad network by far for both Android and iOS a decade ago? (AdMob)

Antitrust agencies and governments in general need to set more pro-active ground rules that attempt to prevent monopolies from even happening in the first place.

Punishing them after the fact is both ineffective and too disruptive. I'd rather they didn't allow Google to buy AdMob instead of forcing them to spin it off now. I mean, sure, I'll take it. Still better than nothing. But this shouldn't have been needed because AdMob should have remained a competitor to Google in the mobile ads space, not a division of it.

If large corporations think they have made so much money from their core market that now it's time to spread to new markets, then they must also have the money to start their own competitor in that market from scratch. They shouldn't be allowed to just buy everyone up from that new market.

I think we'd have WAY healthier "free markets" - and more importantly, high competition - if this one thing was implemented.

As much as I agree with the core of what you are saying, it isn't AdMob that is the issue. It's that Google controls both the marketplace, the pub-side and the buy-side, as well as the browser and the devices used to experience ads. Apple is now aiming for a similar level of control in the ad space very blatantly using their ownership of the platform to do what they want to power themselves up.

This vertical integration in the space is what drives the anti-competitive behavior, if the Google buy-side were a separate company that happened to acquire AdMob there would be no real issues as they don't control the whole stack.

FB on the other hand sells a service and lets companies use their APIs to integrate as well as competing with them via their internal sales team.

These companies can do this only because you are forced to work with them because they own such a large part of internet traffic, not because they offer particularly good services or have better technology or prices.

Traditionally vertical integration is fine and horizontal suspicious in antitrust law. Why are ads different?

I’m not sure how you can say that. The first examples of anti trust action have been about vertical integration and ownership of critical infrastructure by a market player not allowing entrance by others because it’s not easy to lay down more railway or more phone cables or telegraph cables. That’s the case for the web advertising situation.

My guess would be: because a single company owns a significant chunk of the market share of each segment of the vertical they're integrating.

Also because our pyramid shaped tax structure favors vertical integration.

Can you explain/expand your reasoning behind that a little more? This is the first I've encountered such a point.

Tax pyramids occur when the total value is taxed at each point of sale instead of the value added. This results in taxes being taxed which effectively increases the tax paid on earlier stages. For example, very few would find it reasonable for a 100% excise tax to be applied to alcohol or automobiles but less would object to a 30% tax and legislating a certain structure for the sale of alcohol, for example farm -> brewery -> distributor -> retail or manufacturer -> dealership, that effective results 185% or 69% whilst only having the appearance of charging 30%.

The easiest and most effective way to reduce this tax burden is simply expanding your vertical. This is why tesla is so staunchly against third party dealerships or why hyperscalers and apple, google, microsoft, and amazon are all starting to make their own chips. Breaking up big tech won't accomplish anything in the long term without fixing the broken tax system and the incentives it creates.

Progressive corporate taxation?

I'm curious about how "pyramid shaped tax structure favors vertical integration". What is a pyramid shaped tax structure? And what about it favors vertical integration? Casual searches on it don't yield much great info atm.

To my knowledge, the US government has wide ranging powers to prevent and break up monopolies. Thanks to standard oil and at&t.

The acquisition needed approval: https://www.ftc.gov/enforcement/cases-proceedings/closing-le...

It's just that the current political climate (including democrats) seem to favour non-intervention.

Not just current, more like "in general since the 70s". This was mostly due to the legal doctrines of Robert Bork, who was Solicitor-General during Nixon and held great influence from the late 70s, which stated that the only good reason to engage in antitrust was to increase consumer welfare (and implicitly, if antitrust would reduce consumer outcomes, antitrust is wrong). The idea basically boils down to "the customer is always right."

Now of course, many arguments being made today are that where the negative effects of a monopoly are felt aren't primarily with consumers, but with smaller enterprises being squeezed out, and with workers at a monopoly deprived of choice, both commonly cited with Amazon. Bork's stance was that these aren't legitimate reasons to engage in antitrust and really end up protecting inefficient existing enterprises.

Anyhow, Bork's Antitrust Paradox (https://www.amazon.com/dp/0029044561/ref=cm_sw_r_cp_apa_fab_...) was and is one of the most cited books in antitrust law, mostly to make the case as to why antitrust in a particular situation is not merited, and the Supreme and lower courts have adopted views from there directly dozens of times.

So it's not just a recent thing, it's a long running, over 40 years now thing

> The Competition and Markets Authority has completed its market study into online platforms and the digital advertising market in the UK.

https://www.gov.uk/cma-cases/online-platforms-and-digital-ad...

See the analysis on DoubleClick etc. there.

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