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Comment by adrr | Hacker News Reader

Complaint is based on the Sherman act. Sherman act requires harm to the end customer which be interesting to see how they show a negative impact to the public. I have free email, web browser, maps and other things paid for by google.

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The customer in the context of ad buys is every business attempting to do online marketing. You are the product.

> customer in the context of ad buys is every business attempting to do online marketing

Courts interpreting § 1 of the Sherman Antitrust Act have generally used the term "consumer welfare," which sidesteps this issue. (The original text makes no reference to this concept.)

but Google ads are successful because their targeting allows you to put the right ads in front of the right eyeballs. It's way cheaper to run a targeted ad campaign than buy up a bunch of billboards on a busy freeway. It's also more effective because people can click through and buy right away. All the ads are sold on an auction basis, so their price is directly connected to their utility to the buyer. I fail to see how the ad buyer is harmed.

This is from the suit and is pretty damning, at least to my non lawyer eyes.

"In the end, Facebook curtailed its involvement with header bidding in return for Google giving Facebook information, speed, and other advantages in the auctions that Google runs for publishers’ mobile app advertising inventory each month in the United States. In these auctions, Facebook and Google compete head-to-head as bidders. Google’s internal codename for this agreement, signed at the highest-level, was REDACTED a twist on the character name from Star Wars. The parties agree on for how often Facebook would publishers’ auctions—literally manipulating the auction with for how often Facebook would bid and win."

Well now I really want to know the internal codename.

Well now I want to know what character they used from Star Wars? I'm going to guess "Darth Bidder"?

DARTH - Dynamic Advertising Revenue Trading Heuristic

e-vader

> "REDACTED a twist on the character name from Star Wars."

If I were a betting man, I'd think it was something like "Fando Calrissian" or something akin to that; FAN from Facebook Ad Network and Lando because of the famous "I'm altering the deal; pray I don't alter it any further" dialogue between him and Vader.

If they have helped the user through A, B, C, D and E, and hurt them through F, you can still take them to task for F specifically. The fact that they funded the rest from profits gained through F isn't really a valid defense.

I thought this was a dead horse, but you are not the customer.

Courts have generally interpreted the customer-welfare aspects of the Sherman Antitrust Act as meaning “customer, as opposed to business”, rather than “customer, as in the one making the purchase”. Courts have generally not been bothered when one corporation screws over other corporations if there’s no demonstrated harm to non-corporate entities in the marketplace. The Sherman Antitrust Act wasn’t intended to protect corporations from being out competed, and no corporation has a right to their business model being viable. Corporations screwing each other over so that they can provide the best possible experience for non-corporate members of the market is exactly the “competition” that the act was devised to encourage.

> The Sherman Antitrust Act wasn’t intended to protect corporations from being out competed

But that's entirely different from what is at issue in the advertising market.

Huh, that's funny. And here I thought corporations were people. shrug

Could you make the argument that because it’s nearly impossible to compete with their free offerings, no other company has a chance in that space?

From what I've read, this is the direction some anti-trust lawyers want the interpretation of the law to go in.

For Facebook, but Snapchat, Twitter, TikTok are all counterexamples of this.

Yes, but usually you start to get the legal theory developed before decisions start changing. They have to come up with new arguments for why to interpret anti-trust law differently before the courts will agree with them. Also, public sentiment obviously has a big impact on the courts, as the Obergefell ruling demonstrates.

Hopefully this doesn't work. That will cause enormous harm to consumers, particularly as compute and bandwidth costs continue to fall.

Free to consumers is generally a net good, since it gives them access to things they wouldn't otherwise have.

Google isn't going to give up their free services, that's how they get eye balls (attention which equals ad revenue) the have a Monopolistic advantage. A fly wheel to make money.

>Free to consumers is generally a net good, since it gives them access to things they wouldn't otherwise have.

Unless "access to things they wouldn't otherwise have" is free and fair market competition.

There's a very good reason that anti-dumping laws exist in almost every nation in the context of international trade, and the one and only reason reason a company dumps a product (selling it below 'normal' price) is to kill any local competition that might arise.

YouTube, as far as I'm aware, is offered at a price that doesn't meet its full cost of production, and as such should constitute illegal dumping in any country that has or wants to have a tech industry of its own.

The laws of trade just haven't caught up to this yet; of course, there's nothing stopping countries from updating their laws and banning YouTube and similar sites- unfortunately for them, banning services "sold" in this way would end up causing massive civil unrest, since its citizens now have a bunch of time to deal with the government who took their primary source of entertainment away and aren't as concerned about what the local tech industry might look like in 10 years without unfair competitive practices. Also, the US would take a very dim view of countries that modernize their trade law in a way that restricts how its most valuable companies make their money.

> YouTube, as far as I'm aware, is offered at a price that doesn't meet its full cost of production, and as such should constitute illegal dumping in any country that has or wants to have a tech industry of its own.

This an big misconception that I've seen before of HN. I don't know why that is.

Youtube standalone revenue is $15B/year[1]. Netflix is around $20B/year, but Netflix spends about $15B/year producing professional content and yet still produces around $1B/quarter in profit[2].

There's nothing at all to indicate that Youtube isn't actually highly profitable.

[1] https://www.theverge.com/2020/2/3/21121207/youtube-google-al...

[2] https://techcrunch.com/2020/10/20/heres-why-netflix-shares-a...

The current legal theory for monopolies is that they're only bad if they increase consumer prices. Tech companies who give out products for free don't seem to do this.

> Having reached its monopoly position, Google now uses its immense market power to extract a very high tax of [redacted] percent of the ad dollars otherwise flowing to the countless online publishers and content producers like online newspapers, cooking websites, and blogs who survive by selling advertisements on their websites and apps. These costs invariably are passed onto the advertisers themselves and then to American consumers

I am not disagreeing with you, but I wanted to point out also that if there is collusion between Google and Facebook for pricing advertising, then, doesn’t the consumer end up paying more for purchases because advertising costs are factored into product pricing?

That assumes the amount of advertising is constant, but buyers could simply purchase less, so I don't think it's necessarily true.

It assumes advertisers have fixed ad budgets and get fewer impressions for the same amount of money.

That’s going to be hard to prove. You’ll need to prove the cost of marketing went up when it actually got cheaper due advances in targeting. Google has a legitimate argument that owning vast digital properties allows them to provide more effective targeting and a cost savings to companies.

The end customers for advertising are businesses.

The argument in the complaint is this (paragraph 16):

The monopoly tax Google imposes on American businesses—advertisers like clothing brands, restaurants, and realtors—is a tax that is ultimately borne by American consumers through higher prices and lower quality on the goods, services, and information those businesses provide. Every American suffers when Google imposes its monopoly pricing on the sale of targeted advertising.

Digital marketing is one channel of marketing and arguably the most cost effective compared to out of home, direct mail, direct response, tv/radio, endorsements etc. Google will argue because of cost efficiencies in the market, it has allowed hundreds of brands to effectively compete against established players creating a more competitive landscape.

Here’s an example: Dollar Shave Club launched with a only digital marketing strategy and pressured Gillette to significantly cut prices to the net benefit of consumers. Without digital marketing, DSC wouldn’t have got off the ground.

I think there's a lot of truth to this.

But there is also truth to the argument that more competition would (probably) have driven prices down, and that Google and FB colluding to fix prices in auctions caused this

The. Consumer in this case is businesses themselves. There isn't a magucal difference between B2B consumers and B2C consumers except that B2B's have the luxury of pushing costs down to customers. You don't get to hide behind that you enabled the transaction at all when you acquired everyone else who was also doing so, and colluded with your chief competitor. It's the central trade-off between a Hamiltonian monolith, and a Jeffersonian bazaar. The Monolith can probably get you cheaper prices for a while, but at the cost of any new entrants to the market. The bill is paid in Liberty. In a Jeffersonian bazaar, tge wide variety of competing models and lower barrier of entry keeps everyone honest even if you can't exploit the same level of hyper-optimization the monolith brings to the table. You also avoid tge risk inherent to the Hamiltonian approach of the Monolith destructively influencing everything around it. Too big to fail is less of an issue because there are other fish, not just pods of whales.

Edit: May be confusing Hamilton and Jefferson with Hobbes and Locke again.

The only service Google offers for free is showing ads. Everything else is just the vehicle used to improve or display those ads.

The Sherman act does not require harm to the end consumer. That standard was instituted relatively recently (Reagan administration, if I remember correctly). Interpretation before that (which the Trump admin has leaned toward) would encompass broader monopolistic behavior, such as collusion that prevents competition even if it does not directly result in a price increase for consumers.

Given how much these issues are going to be discussed in the coming months, it's probably worth giving [1] a read. I selected that article for brevity, recency, and because the author is well known among HN readers.

[1] https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?art...

Video streaming alone creates an argument for consumer harm against most major platform vendors, since nearly every FAANG has at some point been locked out from paying customers within another one's hardware ecosystem. Prime Video and YouTube were unavailable on each other's devices for years, Apple TV briefly wasn't carrying Netflix, Apple services are paywalled behind Apple devices, etc. Additionally, the ones that do work still depend on access to integrations for features like voice control, leading to scattershot functionality across any from third parties.

Google in particular has also abandoned support for open specs in favor of deepening the Chromecast ecosystem -- having both removed DIAL support from later versions of the Cast protocol and Miracast support from Android itself.

And that's before you get into the interop for purchases within these ecosystems, because under the DMCA you can't legally do anything about the incompatible DRM schemes, even for media that other devices are more than technically capable of playing.

Another, related issue is that the additional set of proprietary APIs on top of AOSP amounts to an Android ecosystem that's "open," but renders any implementation that they haven't blessed as a second-class citizen. This has tangibly impacted compatibility efforts by other vendors, ranging from Amazon (Fire devices) to Huawei (loss of Play Services via the ban) to Microsoft (Project Astoria) -- for reasons that, in part, involved maintaining a walled garden of complementary hardware.

To be completely fair about this one, it's not strictly that cut and dry, as the ability to leverage vendors with Play licensing has also forced widespread adoption of solutions like Treble. But over time, large sections of the OS have been abandoned in favor of proprietary Google apps, and the API incompatibility hampers the growth of alternative ecosystems, even if you're another FAANG that can bring your own cloud and develop your own hardware.

To that point - while I personally think Oracle's SCOTUS case amounts to brazen trolling, it's, uh, not great optics for that whole argument that API compatibility is fair use when Android apps across several different categories will break just because updating your EOL'd device or getting rid of manufacturer bloatware will trip SafetyNet -- or because your vendor is a competitor and your device just isn't allowlisted by SafetyNet in the first place.

> Apple services are paywalled behind Apple devices, etc.

Apple TV is available on other devices. Today was announced Apple TV will be avilable on Chromecast https://blog.google/products/google-tv/apple-tv/

Last week was announced that Apple Music is available from Google Nest speakers https://blog.google/products/google-nest/never-miss-beat-app...

Oh! Yeah, I just saw the Apple TV one about 5 minutes ago myself (it was too late to update the above w a correction), but admittedly hadn't known about Apple Music.

Apple services are paywalled behind Apple devices

AppleTV has been in Sony, LG, and other devices for several years.

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