Congress is going to throw the kitchen sink at big tech
bigtechnology.substack.com
bigtechnology.substack.com
Light tech regulation was exactly the correct approach in the 1990s (and arguably the 2000s). It enabled mind-boggling rapid and stunning innovation.
... However, the massive corporate fortunes built by the winners of those times are now primarily enabling rent seeking.
Google and Facebook's other work is interesting in the same way that Bell Labs was interesting -- great for a few, but funded by taxing everyone (albeit via tracking and ad market control in this instance).
And they've learned from their predecessors' demises that part of their winnings need to be continually re-invested in buying startups that might threaten their dominance.
IMHO, everyone will be better off if Facebook, Google, and Amazon are shattered into small enough independent pieces that (1) "get bought" is no longer the startup win condition & (2) they have peer level competitors in all markets in which they participate.
Apple and Microsoft? Mandate open app stores and devices, if an owning user so chooses.
Thinking back to the 90s... if anyone has guaranteed revenue streams out 10 and 20 years these days, the market as a whole isn't competitive enough. That should be enough time for the entire playing field to upend itself.
At least, it used to be.
These corporations control the government because the same people demanding to “break `em up!” have also been demanding “small government!” for decades on end, which in practice simply means a government that works for the corporate private sector.
The morale of this story is that your solution is no solution at all, and to the extent that it is a solution the means to implement it are nowhere to be found.
So proposing these bills is more feasible, because... why exactly? Are you under the impression that corporations aren't allowed to lobby about bills?
What makes you think that legislating tech will be easier than breaking tech up? Complicated rules about vertical integration aren't going to be less susceptible to lobbying and corporate FUD.
One of the most pernicious effects of tech advances in recent decades has been the rise of surveillance state and surveillance capitalism, and the loss of privacy that comes with that.
This enabling of spying on everyone is not going to be addressed by more competition, and might even enable it further if innovation in that space increases.
Another major issue is economic inequality fostered by the internet and tech booms which, again, the breakup up (or even end) of these companies would not address.
Exactly this! Two out of five of FAANG derive effectively all their revenue from global-scale dragnet spying, and all five of them use that kind of data collection as a highly effective moat against competition.
It should simply be outlawed. That should be step #1 for breaking the tech monopolies.
It was done while everyone was looking, and it was explicitly authorized because the market had changed.
Wireless had proliferated, and the value add segment of the vertical had moved (from circuit-switched lines and long distance) to the Internet, where (pre-Time Warner merger in laughably late 2016) ATT didn't compete.
There's also the two other surviving "small" clumps of Bells called Verizon (Bell Atlantic, NYNEX + GTE) & Lumen (US West + Qwest + CenturyLink).
If we want to gripe about the current state of the US ISP market, post-ATT re-mergers shouldn't be top of mind. Exclusive franchise agreements, lack of common and accessible conduit / poles, lack of community-funded competitors, and bundling are above it.
Even a hypothetical worst-current-case scenario where 3+ of the majors ATT, Verizon, CenturyLink, Comcast, & Spectrum were offered at every house, because they all had access to each other's last-mile at non-discriminatory rates would solve current issues.
Things were kind of going ok with that!
That all got royally hosed when pro-big-business Supreme Court activism sided with Verizon's stance that they Verizon should have monopoly rights to fiber, in Verizon vs FCC (2002). Now suddenly telecomms could go back to their nasty old ways, which they have.
For example, if Apple is forcing developers to use their payments SDK to collect 30%, why can't a government agency just force them to stop?
Maybe there was a long official investigation by antitrust regulators, and that kicked off a long bureaucratic process that ends in a mandate restricting Apple from doing a very specific thing, maybe with an appeal/review process, expiration date, etc.
No need to get a bill passed that changes the law for everyone. A smaller company could still do that same thing, but it doesn't matter because due to their size, they're not immune to competitive forces. If anything, they'll have a harder time pulling it off because developers can get a better deal with Apple thanks to the new restriction.
Idk how the law works and whether the relevant regulators are able to do something like this. So maybe this comment is stupid, but it makes sense in my layman head at least.
iOS has 60% of the US market[1], and Android 40%. The App Store has 100% more revenue than the Play Store[2], and the two are responsible for over 99% of all app sales. In the US, Apple has the majority of market share in the mobile operating systems market and the mobile app distribution market.
Both Apple and Google have a duopoly in mobile operating systems, and they leverage that duopoly to maintain their duopoly in the mobile app distribution market. To continue the chain, they then leverage that duopoly to dominate the mobile app payment market, as well.
Further, the colloquial definition of monopoly doesn't with regard to antitrust laws:
> Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power — that is, the long term ability to raise price or exclude competitors. That is how that term is used here: a "monopolist" is a firm with significant and durable market power.
[1] https://www.pcmag.com/news/ios-more-popular-in-japan-and-us-...
[2] https://www.businessofapps.com/data/app-revenues/
[3] https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
(I am not a corporate lawyer) Hopefully didn't take editorial liberties with your quote, but wanted it to stand on its own.
My understanding is that the US, in contrast to many other advanced economies unofficially or officially, takes a dim legal view of singling out a company for any purpose.
Either a company is acting within the law, or they are breaking the law. What company doesn't (shouldn't) matter.
Which I think is wise as a standing order, as detailed specific-company intervention renders it more subject to politics, etc. Better to stick to the laws, and then allow the courts to apply them evenly.
With Bell, standard oil and past monopolies... the goal was to decentralise while keeping oil and telecom viable. We wanted what they made, and didn't want disruptions.
Do we want what FB makes? Is it scarce? I feel like we would have a sufficient supply of likes, shares, messages and posts regardless. There doesn't need to be a $trn company for those to be supplied.
Generally, I think the issues at stake have evolved. Many of the problems with today's monopolies are power related, rather than efficiency related. I think FB is enormously inefficient, but this is kind of besides the point.
By which I mean that Facebook does not make $trn by supplying likes shares messages and posts.
We would also not lack for ways of selling whatever advertisers on FB are selling. They would be different without FB. Different parties would or wouldn't benefit... Connecting consumers to businesses is not scarce.
Google search and on-site ads can be annoying and of questionable relevance, but I rarely see items that are so egregiously ripping off consumers. I dont see this much on twitter promoted tweets either.
What is it about facebook's ad business that encourages such a high proportion of overpriced garbage? Is it the mediums focus on pictures and video that makes these sales work? Is the audience just dumber/less savvy and so these platforms are the only places with enough suckers to do this successfully?
TikTok's sponsored videos seem to be falling into a similar trap to a lesser extent - the markup is less extreme for the few I've looked at out of curiosity.
Do Google and Twitter have some process for quality control to keep the garbage out that Facebook does not? Or is the medium the primary reason for this perceived difference?
The rapid churn when people realize it's harder to make money than it seems means that there is always a new set of people pushing whatever crap is hot that week.
People want a social network that everyone else is on, that works on all their devices, and isn't full of spam bots or bugs. It takes a big company to do this at scale and the network effect makes useful social networks scarce.
Do they, though?
Counterexample: email
Facebook has nothing approaching a monopoly on attention, social media, messaging, anything really. All of their products have serious, billion-dollar, hundreds-of-millions-of-users competitors. Even if they disappeared in a puff of smoke I don't think any competitive landscapes would change much.
Additionally, the privacy review process for new products/features is extremely stringent and time consuming. Product teams have been hamstrung significantly, with some engineers I know complaining that they're not even able to get half as much work done as they used to.
And not also sued and reported for criminal prosecution?
Because if someone didn't particular want a job at facebook, but interviewed for the experience and got the job or had been working there and wasn't happy there and was ready to quit-- the threat of instant termination alone may not be that much of a deterrent.
I think focusing on a rogue employee as the threat it missing the mark. The real threat is the ability for huge corporations to legitimize institutional access to data ("business reasons"), and to fight the legal fight if they are caught doing something wrong. Moral hazards of this mode of failure arguably has much more cumulative societal damage (e.g. Cambridge Analytica).
In other words, I worry less about an evil employee reading my messages than a scaled up corporate machinery milking all my data for dollars that feeds the machine back and also can fight any fight at the courts, DC and the public eye.
...not that you'd miss much, as they're usually spartan, but it's worth mentioning.
It's kind of annoying, because an actual webpage is much better IMO, but it is what it is.
Why not simply get our government to do their jobs and REGULATE away practices that are not in the public's interest?
You can play whack a mole with their bad behavior, but large companies can come up with new dark patterns way faster than you can regulate them with precise and well thought out regulation. You just end up with entrenched interests and an ossified industry.
That's not even touching on regulatory capture.
What do you think are failed examples of this?
Even though you had eventual re-consolidation, the post-breakup phone industry seemed like a much more interesting and competitive place than the one before it. The fix for re-consolidation, of course, could be pretty simple...
Very few people want to do the harder, more innovative, more interesting thing if they can make a comfortable living doing what they've always done. This applies to regulators as much as to companies. We haven't found any better tool to force companies to be in touch with their customers and do what the customers want than competition, but we also have an economic system that encourages consolidation (because competition is HARD!). So the role of government to break things back up to keep competitive incentives feels quite natural. The market isn't gonna do it itself.
ISPs can't leave and yet we don't seriously regulate them into doing public good or having a competitive market, which is mysteriously somehow contentious politically. Many others can't leave because their talent pools aren't willing to go with them, and that would be even more true if the workers had a government that worked for us.
There is a problem with government being full of people who would rather stay on the receiving end of a money hose than pinch it off for anyone's benefit. All the other apparent problems seem to me to be excuses to protect that. Check greed or we all suffer. You can check greed without stifling ambition. It's a valid choice.
Breaking up has achieved excellent results before, as far as I can tell. It's not a permanent solution to the problem, but neither is brushing my teeth.
It might be OK to have a process that needs to be periodically repeated when companies get out of control. It might even be preferable to large legislative efforts that significantly change what companies can and can't do. Are people really mad that maps show up in Google search, or are people mad that Google owns the world? I'm not sure, but maybe it's better to precisely target a temporary solution at the actual problem.
In general, I'm more on board with bills about vertical integration than I am with some other solutions people have proposed. But I'm also not necessarily opposed to skipping the whole thing and directly breaking up those companies instead. It seems to have had good effects in the past. And while I do think vertical integration is a problem, I'm not 100% certain that it's the biggest problem or that this is the best solution. I'm watching these bills kind of carefully.
Source?
Source: I use the Internet today and can see the effects firsthand, I'm part of an industry that exists pretty much because of that breakup. This stuff is pretty well documented.
Which in this case seems a consequence of first mover advantage + capital-light tech scaling (aka large profit margins) + huge total addressable markets.
Compared to Saudi Aramco's total profits -- Apple makes 63%, Microsoft makes 44%, Google makes 39%, Facebook makes 21%, & Amazon makes 13%. [0]
And that's compared to a business that literally pumps money out of the ground.
[0] https://fortune.com/global500/2020/search/?fg500_profits=des...
Also, wasn't Microsoft a huge waste of taxpayer time and money? AFAIK, Gates got away with his monopolistic practices and has since been recasting himself as a societal boon.
Despite any possible gains society could gain by breaking them up, it seems like a herculean task compared to simply having our elected representatives legislate away business practices that are a public harm. (and yes, this would require our representatives to actually represent the people, but so does monopoly breakup)
Even if we reduce the story of Bell to "they got split up, then Southwestern Bell/Cingular/AT&T and Verizon gobbled up the rest of the others slowly" then we can see a big win: the n broken-up companies had varying levels of success because they tried different things and executed in different ways. That's a massive A/B test of the usefulness and efficiency of business practices that never would've happened if they'd never been broken up in the first place! And we'd have even less competition than our current wireless market if that breakup had never happened...
One interesting side-note I happened across recently was that Rockefeller's peak wealth was after Standard Oil was broken up. So what's the arguments against breaking up megacorps? We all know the value of competition, and we don't trust public companies to look much past the next quarter if left to their own devices, so why wouldn't we want more competition and less giant monoliths?
According to whom? And compared to what? According to what I read the man had (from memory) 24 million at the time of his death, which seems so bizarre. The problem is the accounting is not only difficult, but that the richer you are, the harder it is to account for all of it, and the more expensive it is to do so. It's not like a regular Joe who can just check his wallet or banking app. By the time you've audited your own wealth, as a billionaire, you've lost millions of dollars. The cost of accounting impacts accounting.
I’m sure Chinese Tech co’s would absolutely love to have their Western competition knee-capped by their own governments. Will make it a lot easier for them to dominate the globe for decades to come.
For example, break up Amazon and you now create an opening for Alibaba to expand into the US. Spending billions in order to get customers to shift to Alibaba instead of Amazon.
ps: fwiw, I’m against breaking up BigTech. It makes for good headlines but I don’t think it solves much.
Americans don't seem to be interested in using massive platform apps that contain the kitchen sink; WeChat is available but not popular, same for LINE, and Messenger never successfully became that.
Right now the most successful overseas strategy for a software company has been Tencent's games strategy (as opposed to their WeChat one), and in that respect they're mostly just a holding company.
I mean, Facebook's app is basically exactly that.
Facebook reported declines in daily active users in North America during Q3 2020: https://www.engadget.com/facebook-q3-2020-earnings-204642328...
https://www.statista.com/statistics/1100836/number-of-us-tik...
Because international companies wouldn't be exempt from US regulation if they operate in the US.
In some sense, it's a zero sum game, where if your country don't scale or allow companies to scale, they find the next most favorable country. Or another country's companies succeed because of the additional support provided.
But subsidies and government support have always been the biggest fracas in international economic politics for centuries for the same reason.
To which I'd reiterate not_exactly__'s point: although business-harmful actions look like shooting yourself in the foot, hampering competition and supporting companies for extraneous reasons ultimately makes your economy and your companies less competitive globally.
General point being that the US government will tend to avoid doing things that are bad for the US government.
International monopolies will be able to expand into the US and burn cash to acquire users and grow market share. Then when they've run all domestic companies out of business, they will raise prices.
The problem is not only competition in US or Chinese as markets; it is also about global markets.
Besides, everyone in the US benefits from increased competition between our domestic companies.
[1] https://www.npr.org/2021/04/10/986112628/china-fines-alibaba...
[2] https://www.reuters.com/article/us-china-internet-anti-monop...
I think China is okay with big monopolies. Just as long as they control them. This particular anti monopoly fine was part of a larger power struggle with Jack Ma:
https://www.reuters.com/business/chinas-ant-group-become-fin...
This just feels like fear mongering. "Don't tamper with what we have now! The other guys will win"
We’re talking regulation here, so that should definitely be on the table.
The people who built these companies in the 90's and 2000's are not the people running the ship now.
The new folks have very different personalities and motivations.
I doubt all this bluster in Congress is anything more than rhetoric and posturing. There might be some settlements and watered down regulations, but that’ll be it. This is DoJ vs MS all over again.
The ironic thing here is that this goal, being absorbed by corporates, is what startup exits are about.
And honestly, I don't understand it. I want to build something that matters. Morally and ethically, not financially.
I want to build a legacy, not some zuck or bezos weekend shopping item.
The reason buy-outs are more common is because the tech giants have gotten large enough to offer so god damn much money that very few people have enough non-monetary drive to continue the risk. Incentives affect actions in a dose dependent manner.
Yeah, keep that view and you'll succeed. Beware of: children, relationships that expect things from you, anyone that isn't within your reality distortion field.
I'm with you. I guess your in your twenties. Me, early thirties. It does get harder to say no to everything everyone around you is doing successfully, for moral reasons.
Zuck/bezos and your kid stops getting bullied at public school...
Also: money buys legacy. Bezos and zuck can scrub the web of their wrongdoings(not that there are any) with 0.00000001% of they're stash.
Why the sarcasm? Did I offend you?
If I don't stand up for my own values, am I not a fraud when I try to teach a kid what's good and what not? Would you rather live in a world where everyone gave up because the hurdles were too hard to overcome or live in a world where people stand up for their ideals and work for them?
I mean, we as "tech guys" have the luxury of being able to have work available wherever we go, and we can live off it very much above average when it comes to income. You can still live a good life with a family and working part-time...and you don't necessarily have to drive a Tesla to be happy.
I do realize that somewhere along the line we all make compromises, for whatever reasons. But when I'm in my death bed I wanna tell my children about what I fought for, and being able to tell them about my social ideals beyond capitalism or an "influencer life" and about what I imagined, what I thought the world could be.
(also, I am slightly older than you :P)
https://www.grunge.com/143621/the-dark-truth-about-amazon-fo...
I feel like this sentiment doesn't go far enough. "Oh we would break up the monopoly if not for the innovation". Bell Labs innovated far more than FAANGs. It actually produced R&D that benefitted everyone. Big tech is far past the point of Bell Labs.
Would it equally apply to physical stores like Safeway, Kroger, Costco's private labels like "Private Selection", "Simple Truth", "Kirkland", ...
What makes Amazon different in this regard? Is Amazon doing it differently? (Like go out on their own instead of partnering with the product company to produce "Amazon" branded version of theirs)
https://www.businessinsider.com/florida-censorship-law-looph...
A couple of years ago they allowed for four casino licenses in the state, so there's a couple more options.
Safeway/Kroger/Costco do not have direct third-party merchants, do they? They are just resellers. This is fundamentally different from what Amazon is doing.
At least this is how I understand it. I am 100% open to being schooled in how it actually plays out. I'm just a software guy, but I like to learn.
One tl; dr thing is that the supermarkets are a _supplier_ to both end customers and those with products to sell. They supply shelf space and customer reach, in the very literal sense that companies bid for things like endcap placement (the end of the aisle being better than being in the aisle, since everyone making an orbit through, say, the deli section will pass your goods).
I guess it seems a little obvious in retrospect that there must be a bit of that going on, I've long noticed that some suppliers have a lot of responsibility in the store beyond delivering product. Like the beer guy pretty much runs the entire beer aisle. And it's one of the big names supplying all the beer, not just their own.
I've seen similar action in some stores by the soft drink vendors and even the bread vendor. Non-store employees on the floor putting stock directly on the shelf.
They may charge shelf space rent.
The complications come from trying to manage that risk - manufacturers who have better products or marketing can afford to pay for prime shelf space which also means it'll move faster.
We're talking about retail vs Amazon, not retail vs Alibaba reseller #39146527.
Really the modern world allows many optimizations and creative contracts.
It's still not the same as signing up to creating your own store on Amazon though.
No they don't. Standard terms are suppliers get paid 90 days after Walmart takes delivery of the product. You also pay rent from the time a pallet arrives until it is broken down for delivery to stores - so if you deliver too many snow shovels in the middle of summer you might end up owing them money.
There is a whole industry of "supplier financing" that helps smaller players with bridge loans until the product sells.
Agreed ;-). That's why I hang out on HN, hoping to gain some insight and knowledge.
The customer->FBA->merchant relationship is much clearer than in any supermarket I've been in. Maybe I'm really buying from a third party and the supermarket is just acting as the fulfillment center and payment processor, but it is well hidden. I'd love to know more about how the business end works.
Stores would pay for the inventory, but we would rebate them for what would not sell as an incentive to make sure we put out products that actually sold.
But I would literally come in every day to the larger stores and put product on the shelf and argue with the manager about inventory and clean up our area.
None of the stores I worked at explicitly sold shelf space (I think), but our corporate worked with their corporate to determine how much space in each store would maximize their revenue. I am sure newcomers would have to do extra to guarantee they would make enough money for the stores to take risks on them.
Needless to say, they had all of our sales data when it came to developing store brands.
Firstly in an analogue ways - managers are always watching were customers are going/ what they are looking at/etc. The security team at a one co-op bragged that their cameras could read the time on your watch.
Secondly, there are all sorts of new tools stores are trying out to automate this. Software that analyzes footage to generate heatmaps. Or using the in-store wifi access points to generate heatmaps (even if you don't connect, your phone will give away your position when looking for networks). This is especially important in mall settings where they need to calculate foot traffic estimates as a way of pricing storefronts.
Esp. since COVID I imagine a lot of people inputting their passwords in front of a camera at the register.
https://www.getblix.com/retail-foot-traffic
https://www.aislelabs.com/products/flow/
https://documentation.meraki.com/MR/Monitoring_and_Reporting...
One example is TJ's French Village plain nonfat yogurt, which is very obviously Nancy's yogurt from Springfield Creamery in Oregon. Same exact taste and texture in the same packaging. (Nancy's used to come in clear plastic tubs like TJ's. A few years ago they switched to opaque white for their name brand, but it's still the same product.)
Another is some of the frozen Indian foods, which Whole Foods carries under the manufacturer's brand name.
Buy a tub of the French Village yogurt I mentioned, and also buy the same Nancy's yogurt at Whole Foods, and you won't find any difference between the two.
Same with Kroger's - Private Reserve
Same with Trader Joe's
Not that it would matter here, the law in question sets the market cap miles above where Trader Joe's is.
> ‘covered platforms’ (companies that have a half-million monthly U.S. users and more than $600 billion in market cap)
There are only 8 companies in the world that match the market cap. Probably 6 if you add "users": Apple, Microsoft, Amazon, Google, Facebook, and probably Tencent.
Especially with a relatively light "break-up, then allow to recombine as market evolution renders their previous monopoly moot" long-term approach.
With physical stores, your options are always all right in front of you.
The analogy is useless. Consumers are lucky that the internet even gives them a 3rd or 4th page.
Now, which kind of works as an analog to these companies prioritizing their products on the search algorithm, but I don't really think applies to the practice of gathering such data.
Most of you remember Twinkies, its parent company going bankrupt and them being gone... Those products were delivered to stores, fresh every day(ish) by manufacturer employees and put ON THE SHELF by them... This still remains true for tons of products.
For some products grocery stores function like a merchant on amazon.
Data tracking... well that really matters to a grocery store, because people have "brand loyalty" and tend not to return (ever again) if their "item" is out of stock. These anchor items are often loss leaders (detergent is the massive example).
Amazon isn't any different than anyone else, and isn't even the biggest one (Walmart still has that crown).
Oddly I could make an argument that amazon, being allowed to be dominant and pushing large retail out of business would be good for everyone... a return of small retailers might happen on the back of that.
The local ford dealer wast at fault for your pinto exploding of the tires blowing off your SUV.
You didn't get to sue the store that sold you cigarets or round up that gave you cancer...
The idea of "blame the retailer" is, to a degree, protectionist. Your solving the problem of "can't sue the chinese manufacturer" by blaming the retailer. The reality of the world we live in has changed so drastically since those laws were made that we should probably revisit those.
Blaming retailers only serves to have fewer, larger retailers, not choice (and competition). This entire line of thinking presents a massive potential to lead to less choice, in retailers and products, leading to LESS competition.
Your attorney would sue the motorist but maybe they don't have insurance. Maybe they borrowed the car - the owner would get sued. The city would get sued because the curb was too low. The gas station would get sued because there weren't protective barriers around the phone booth. The phone company would get sued because the phone booth was too close to traffic. The maker of the phone booth would get sued because it wasn't made properly. And probably other things that I can't think of.
Fortunately for gas stations there basically aren't phone booths anymore. But be careful loaning your car or gun to somebody else.
https://www.investopedia.com/terms/j/joint-and-several-liabi...
A lot of things that Big Tech is doing is usually fine if you're a company with a small market share.
Nothing, and they aren't. Except they're maybe the biggest.
The intellectual foundation of this new movement isn't specifically anti big tech. It's anti all kinds of anticompetitive business practices, many of which have had huge negative effects outside of tech. Grocery stores are one of them, but one can point to any area of the economy and find businesses engaging in what is currently standard practice that the new movement is seeking to outlaw, or in many cases just restore the teeth to laws that have been ignored for years, or just so narrowly interpreted that they're meaningless.
> Unless the monopoly is granted/enforced by the government this has literally never happened.
It happens often enough. So often, you can find stories about it all over...if you looked.
https://www.nytimes.com/2021/05/25/business/amazon-dc-lawsui...
https://www.theverge.com/2020/9/11/21431962/public-citizen-a...
https://www.wsj.com/articles/googles-secret-project-bernanke...
etc. It's a matter of them getting caught and when, because nothing lasts forever, even for the tech robber barons.
Whats the point in making a budget ketchup brand if Safeway has their own? I can't compete with their margins there especially with that level of competition.
I give a bit of a pass here to kirkland stuff cuz it never feels like a race to the bottom nor do I feel like costco just advertises the hell out of it over other goods.
Depending on which case you look at, they allege different harms. In some cases they allege harm to suppliers or to employees, but in others they make the case for anti-consumer harm.
Hopefully folks won't continue to downvote me. Whether you agree with these folks or not (and I'm not trying to make their case for them here), that is what their position is. It is wise to understand them, even if we don't agree with them.
They mention two key differences. The first is just that Amazon is arguably more dominant than any physical distributor, and has more power over offerings.
The second is that if you make a new product for a retailer, the retailer usually has to invest in you to some extent, by giving you physical space and buying your product for resale. So, there's some shared risk and for developing new products. Amazon, on the other hand, doesn't need to give you anything to see how a new product will play out, so it might have too much of a position of power.
Amazon is a quasi-monopoly for sellers in the sense that many sellers can only be profitable selling on Amazon, they have no choice.
If Amazon has data on their entire customer base, clones their product and puts them out of business, you can view that as monopoly abuse of power.
On the other hand, Ruffles sells their potato chips to hundreds if not thousands of national grocery store chains.
If some stores sell their own potato chips as well, those are just blips. Stores don't have insight into Ruffles' sales nationwide across all chains.
The e commerce market isn’t so different. Amazon has a 40% share. Walmart is a big player, then Shopify et al enable lots of DTC companies.
Amazon is only a monopoly if you redefine the relevant market to be “Amazon”
https://en.m.wikipedia.org/wiki/List_of_supermarket_chains_i...
There are more than 3 grocery chains in your link, I think you may have overlooked the regional chains listed below.
https://www.pymnts.com/news/retail/2021/amazon-walmart-nearl...
I live in NYC, for example, and I don't know a single grocery store here that belongs to a national chain or even a regional one -- they're all local. (With the sole exception of Target, but that surely doesn't make up even 1% of grocery sales here.)
So the ecommerce market is entirely different. There's no grocery store equivalent of Amazon's 40% share. And people can easily visit different grocery stores, but Prime members tend to shop mostly exclusively on Amazon for the obvious reasons, so it's locked-in in a very unique way.
Walmart is the top grocer in the US and has a 27% market share. The top five grocery chains are about 45%. Top five ecommerce are about 53%. It’s not massively different.
They've butted heads with their vendors over the years, and drive pricing decisions nationwide.
1. Whole Foods
2. Trader Joe’s
3. Acme (subsidiary of Albertsons)
4. Wegmans (on GP’s linked list)
5. Fairway / Morton Williams (depends on how you define “regional chain”, but both are Shoprite affiliates and Shoprite is on GP’s linked list)
About the only truly “local” chain grocery stores I can think of in NYC are Gristedes and Westside Market, but I’m not an expert on the subject.
But in my part of Brooklyn everything's extremely local -- FoodTown, Western Beef, Associated, etc. And in Manhattan I indeed always shopped at Gristedes, Westside, Fairway (which looking up their ownership, is at most regional if not local -- and even Shoprite is regional, not one of GP's 3 national chains).
But the main point stands -- across all 5 boroughs, the vast majority of grocery stores are local chains. Grocery stores are in no way concentrated in any way analagous to Amazon.
I’m not going to do like others and say your main point is irrelevant because NYC is unlike the rest of America (although arguably it is an outlier in almost every way), but the fact remains your main point is incorrect, the ‘vast majority’ of grocery stores in NYC are not local chains. I’m not invested in this debate enough to prove it by counting the number of grocery stores in NYC, but I’ve already shown that 5 (if not more) of the top ten grocery store brands in NYC are regional or national chains, so that disproves your “vast majority” claim without further effort in my opinion. YMMV!
Edit: even one of the ones you mentioned (Associated) is a regional chain... https://www.asghq.com/
Edit2: Foodtown is also a regional chain covering three states per their website. Further, Western Beef even has locations in Florida which stretches even the definition of regional to me!
https://www.statista.com/statistics/197621/annual-grocery-st...
https://www.foodindustry.com/articles/a-list-of-the-top-ten-...
There are 38,000+ grocery stores in the US.
There are less than 5,000 Wal-Marts. So if Wal-Mart is the largest grocery store, it's still less than 15% market share. Kroger has 2,800, and Costco has a little over 500.
The overall picture is clear: the long tail of supermarkets is long, and even the largest grocery chains command only a small percentage of overall market share.
There are only ~16 Whole Foods and 9 Trader Joes. And only one Wegman's. And not even a single "Acme", so I don't know where you got that from.
So no, I stand by my claim that the vast majority aren't national chains at all. You haven't "disproven" anything at all -- to the contrary, your list is actually a perfect demonstration of just how tiny of a market share these chains have. And I don't really care about nitpicking between local and regional chains.
My whole original point was that there aren't 3 major national companies that control the majority of grocery stores, and therefore it's totally different from Amazon. And that point still stands entirely.
Shifting goal posts (now it’s “not national chain” vs “everything is local”), dismissing factual information that doesn’t align with your views, yep, all classic signs of “I’m right no matter what” mentality. Have a nice day!
https://www.retail-insight-network.com/features/top-retail-c...
Also, most stores on that list have store brands to compete with many products, and specifically Ruffles.
#1 on the list is famous for pushing suppliers around because they know they can put suppliers out of business by cancelling contracts.
In fact, they established a 3% “fine” on any goods delivered late due to Covid:
https://progressivegrocer.com/walmart-pressures-suppliers-de...
A few rich guys put together Jet.com ~7 years ago. A totally independent operation from Amazon and they sold all sorts of crap before being acquired by Walmart. So what am I missing?
What makes Amazon different is Amazon controls 38% of all online retail sales in the United States[1]. No company comes close to their dominance in the market.
[1] https://www.bloomberg.com/news/articles/2019-06-13/emarketer...
As far as I know (native AmE), the original expression was "everything but the kitchen sink", which evokes the idea of taking everything in the kitchen and using it all in a recipe, only stopping short of dismantling the kitchen itself.
Whether through mishearing or laziness, the "everything but the" part has been dropped. I only noticed it in the last few years, but maybe it's been happening for a lot longer than that. So it's now totally the opposite: the only thing in the expression is the kitchen sink, i guess suggesting that there's a bunch of junk in the sink?
But this title is even better. We have abandoned all pretense of caring about the meaning of the expression. In 2021, Chuck Schumer is going to call Mark Zuckerberg in to testify, and he is going to physically hurl a big metal sink at him.
I know that language evolves and stuff, but it's pretty funny to see such a silly corruption of an already-kind-of-silly idiom in a "serious" title.
One expression still is "everything but the kitchen sink", which means all reasonable effort.
But that means the kitchen sink is now the metaphorical "last thing", i.e. the full extent of our effort, the theoretical maximum.
So to "throw the kitchen sink" at something is to put in all your effort, literally everything you've got. (And there's no need for junk in the sink...)
It's a different expression with a different meaning but derived from the first.
And of course metaphors are very often silly... that's why we love using and abusing them! :)
And the wonderful thing about language is that however most people are using it is by definition what it means:
https://en.wikipedia.org/wiki/Linguistic_prescription
Or even if you won’t:
https://www.chronicle.com/article/50-years-of-stupid-grammar...
Such take downs are often lamenting a lack of rule following in the style guides!
“What’s wrong is that the grammatical advice proffered in Elements is so misplaced and inaccurate that counterexamples often show up in the authors’ own prose on the very same page.”
But according to who?
That's an entirely serious question. Because different "authorities" disagree about the rules and norms, and on top of that people disagree on who the "authorities" are or should be.
That's the whole point.
Whom.
;-)
It has never occurred to me to see that idiom as an analog for effort. It may sound silly, but in multiple lifetimes I've never seen it that way.
By the way the original expression was popular during WWII when describing the effort to fight the enemy[1].
[1] https://english.stackexchange.com/questions/96582/what-is-th...
If that is true, the article is still misusing the expression because congress is in no way using everything that they have to regulate big tech.
>This bill from Rep. Joe Neguse would increase fees for mergers and help fund the regulators.
>Text: “There is authorized to be appropriated for fiscal year 2022— $252,000,000 for the Antitrust Division of the Department of Justice; and $418,000,000 for the Federal Trade Commission.”
Isn't tech specific, let alone big tech specific. Huge fan here.
I wonder if the lesson they will take from this is that, rather than reform, they should invest more in lobbying. Considering how much money and influence on the public opinion they have, that's a rather scary thought.
Absolutely not. You do the opposite of that. You go at layer zero. At the population level and enter the culture wars arena with the goal of winning.
Some of these companies are structured in a way that the founders are poised to retain control of their companies till they retire (Google, Amazon, Facebook, Berkshire).
If you are Zuck or Brin or Dorsey and you want to do this until you are 95 like Buffett then you are better off barking and biting back, acquire a reputation of a fighter so that people like Sanders and Warren would leave you alone. There will be consequences such as employees criticizing and leaving but in the long term you are better off fighting.
When a politician comes after you and your company, you just attack back, if you are not prepared to do this you should simply not start a proper company and opt for a carrer in a hedge fund instead, where you can make money in the dark.
Founders and CEOs should not be the first offender but when they are called out they should absolutely attack back.
Sanders is pouring manure all over corporate America since 2015 and all he had to endure was Michael Bloomberg attacking him back for half a debate, and wouldn't have happened if Bloomberg didn't decide to run.
If a guy like Bezos or Zuck were to tweet back at Sanders something to the tune "I've started a company in a garage and now it has the same credit rating of the US Government, what have you done with your life?"
That would be fair game, politicians prey on weakness, they smell it and keep biting till you lay there unconscious
Can you please expand on this? What exactly are you trying to say here?
Big Tech should be locating large employment centers in strategic locations around the country. And by strategic I don’t mean where the talent, resources, or customers are located but rather where influential Congresspeople, Senators, and Governors are located. Then wield your soft power with these folks, e.g. “You can break us up but it’s just going to cost your district/state massive job losses”.
Next, meet with other agitating politicians to find out their underlying motivations and help them to achieve those things - doesn’t even need to be real, just help make them look good for their next re-election campaign. So Bezos should work out a public deal with Bernie and AOC to raise Amazon’s minimum wage to $20 an hour. Bernie and AOC will look like progressive heroes but would be effectively defanged in continuing to attack Amazon (to a large degree).
Big Tech should be locating large employment centers in strategic locations around the country. And by strategic I don’t mean where the talent, resources, or customers are located but rather where influential Congresspeople, Senators, and Governors are located.
If these companies start doing this they could lose to more efficient competition. Hope they aren't that stupid.
Aside from whether or not this is good to do, do you remember the Amazon News incident? Amazon tried to "fight back" on Twitter and it just made them look bad.
(Maybe incident is too strong a term, but I don't know what else to call it. Tweets such as this: https://twitter.com/amazonnews/status/1374911222361956359)
The graph showed a huge spike in lobbying money after antitrust. Of course, this makes perfect sense in terms of incentives on both sides. Perhaps this [2] was the graph.
[1] https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor...
[2] https://www.washingtonpost.com/wp-srv/business/images/micro1...
Amazon's warehouse network is their most valuable political commodity. They are often the highest paying entry level jobs wherever they are put, represent a huge local bump in payroll and property taxes, and they are being placed in voting districts all around the country.
If you're building mines or manufacturing plants that take years to build and then another year to get running right and then another five to be profitable and your margins are thin you have a much larger interest in ensuring regulations don't change or at least not fast because a few percent change in profit could mean you never recoup your investment over the lifetime of the facility.
It can still take years to build stuff but rarely is it 3+yr and tech margins are fatter and once you have something your can scale up and down much more rapidly.
I think the "natural" amount of lobbying is going to be lower in tech than for industries that do physical things because tech has some things that make working with regulatory uncertainty less terrible.
The left because of anti-trust and anti-ultra-rich sentiment, and the right because of perceptions of social media censorship.
If they were acting properly in their own cronyistic self-interest, they would've cozied up to the right. But the demographics of their employees precluded that.
Yeah that is the rub.
It's like in 1998 "we're gonna break up Microsoft!"
2002: "ok Microsoft will agree to make some some changes to their business but otherwise whatever"
Big tech is going to get bigger. Congress does not want to risk destabilizing the economy and and losing reelection as a result by being too hard on tech. These companies employ a lot of people and generate a lot of econ value even if there are a lot of reasons to complain about their business practices.
The question is can tech boil the frog so they never notice.
Given that tech companies obey court orders, subpoenas, and the letter of the law, I don't think that slippery slope is currently a problem.
Otherwise the only people they hear from are the sleazy lobbyists speaking paid words, and the silly beltway denizens who wouldn't know the real world if it shat on their desk.
So we're largely arguing academic situations. And the thing about that is you then have a lot of people who are virtue signaling rather than genuinely arguing a position because they know their rhetorics, even their votes, won't change anything. It's why opposition parties always vote for campaign finance reform.
So I'm highly skeptical of the need for any government action here, be it sweeping legislation or antitrust. There are several reasons for this:
1. Big tech companies are more fragile than you might think. Government action is slow. As we've seen from Myspace, Yahoo and the like, big companies can disappear almost overnight. If a company can face an existential threat and possibly disappear within a few years then, by definition, it's not the monopoly you think it is. It's certainly not Standard Oil.
2. Western companies have been largely excluded from Chinese markets while those companies have far less restrictions elsewhere;
3. Chinese companies are essentially an extension of the state. US companies are not, not to the same degree anyway.
What we actually need is company-agnostic action that protects consumers, their data and what you can do that with that data. This is sort of happening already thanks to the EU (eg GDPR). The US needs to start extending those protections to US consumers. And that needs to apply to both domestic and foreign companies.
And leading from that, which much less visible behemoths and industries having a kitchen sink or two launched in their direction would generate societal improvement.
- acquisitions are part of what make the startup ecosystem work. It's not at all clear which acquisitions you should block - the bundling approach that google uses makes things like android free - you dont want apps on iOS and android running their own payment infrastructure since some will abuse it
There definitely needs to be regulation, but its not at all easy to see what shape it should take.
How do you draw the conclusion that there definitely needs to be regulation if you have no idea what you would be regulating?
Everything about this pan-societal debate has been disappointing because it boils down to: “how do we draw up Bills of Attainder without calling them that and without completely wiping out the free flow of money and capital in the Valley?”
That's such BS. A startup whose only business plan is to get acquired doesn't deserve to succeed in a competitive market. If that route becomes nonviable and a bunch of silicon valley startups go under, then good riddance.
The US economy needs startups with sustainable business practices and highly competitive products and services. Not acquihire schemes.
In the article they talk about a bill designed to prevent tech companies from buying competitors to squash them, but with the potential consequence of stopping startups that have that as a business model, and that is framed as a negative consequence. They're saying this is a positive consequence, and I have to agree with them. If what you made is really a competitive product then it should be able to be profitable on its own. If it can't be it isn't actually competitive and should fail.
Bill 2 is broader, but not well defined.
Bill 3 is about data portability, a feature nobody actually uses even when available, as it is in Europe.
Bill 4 is about getting the FTC and DOJ enough money to do their jobs. These jobs are hard because Congress hasn't enacted a "bright line" standard that can be easily enforced. Amy Klobuchar, in her book, "Antitrust", suggests defining 30% market share as the point beyond which antitrust enforcement should start. None of these bills go that far.
Bill 5 is about stopping mergers which increase tying. But they're not about really stopping tying.
None of these do any of the following:
- Force Google to pick one business and split off all the others. They could keep search with ads, but would have to sell off third party ads, YouTube, and the data center business.
- Force Amazon to take on all the responsibilities of a seller for all merchandise on their platform.
- Force Facebook to sell off Instagram.
Also, none of these bills address AT&T or Comcast, which have real monopolies, not just market dominance.
This set of bills is thus mostly PR, not real change.
That is probably one easy way to encourage competition. Eliminate the egress fees.
If it costs nothing abnormal to use services across clouds or on premises, then you can likely pick and choose best of breed anywhere as long as there is a decent network.
But part of me wonders, if it did -- might the broken-up companies turn out to be more valuable in aggregate than the original ones? Remember, when the gov't split up AT&T that's exactly what happened.
1. Reduce or eliminate the monopolies.
2. Continue to grant such monopolies, while attempting to limit their overexploitation through other means, such as prohibiting the forms of abuse that were most egregious three or four years ago.
Unaccountably, Congress seems to have chosen option #2. I doubt it will be effective.
Didn't America just elect a big-tech puppet govt or did i miss something.
It wasn't a question of if the feds would screw them it was a question of when.
They pissed off the left by moving in on their turf. Big tech is a direct threat to universities, journalism, media, and entertainment industries. It's not a threat, and even a benefit to transportation, oil/gas/mining, and agriculture, which are more republican industries.
There's a bit of a disconnect between what a FAANG company considers an employee and what the colloquial definition of employees are at a company.
The large corporations have shed every worker they can that's unrelated to their core business, such as by contracting out security or cleaning. Then the large corporations say they treat their employees better and point at the ones remaining who get all the nice perks. The average person however, sees someone who goes to work every day at the same corporate campus and views them as employees who are not treated well
There is a reason why a lot of people consider uber and other similar business tech, even though their core business is not tech.
https://ec.europa.eu/info/strategy/priorities-2019-2024/euro...
> Text: The bill would make it unlawful to do anything that "conditions access to the covered platform or preferred status on the platform on the purchase or use of other products or services offered by the covered platform operator."
> Analysis: This is very clearly aimed at advertising on Amazon, potentially Google as well, where merchants often must pay to gain visibility in the search results.
Doesn't this basically outlaw ads? Aren't all ads "preferred status on the platform"? If I offer a product on amazon, and there are already hundreds of other people offering the same thing, who already have a lot of sales and reviews, how else should I be able to gain visibility other then by buying an ad?
If that's the problem then there should be specific rules addressing that.
> and are typically at the top of any results.
I don't think ads were ever not at the top of the results.
> I would think that ads could still exist if organic results were still prioritised
What does that mean concretely? How many organic results would have to be above the ads?
> If that's the problem then there should be specific rules addressing that.
Honest question, why? If ads make the experience worse for users then the page owner will suffer and be vulnerable to competition. If they make the experience better (possibly by raising money to fund unrelated improvements) it's pro-consumer.
Is the problem that it's deceitful? That it's fraud? That users are tricked into clicking a link? IMO the barrier to regulation should be pretty high, and I'm not sure this is something where the government needs to get involved.
(Now, if the ad content appears to be attributed to someone, I guess that person could consider it defamatory. And if it's untrue or illegal I could see the page owner being liable. But "not clearly an ad" is too thin.)
I've always liked the idea of revenue-neutral progressive taxes on corporate revenue. Tax economy of scale.
Ex. Zero corporate taxes on the first 100k of revenue. For every order of magnitude above this revenue is taxed at ~1% more.
$1M in revunue -> 1%
$1B in revenue -> 4%
$100B in revenue -> 6%
Then reduce other corporate taxes to make it revenue neutral. In the most extreme case, the 1% figure or the curve could be tuned so that this is the only tax corporations pay.
This encourages companies to split: if your economy of scale isn't yielding enough to justify the tax, you could spin off multiple smaller companies that would each be more profitable. The capacity for corporations to do evil is directly proportional to concentration of power. Smaller companies won't be able to afford as many lobbyists, their threats to move their businesses will be less existential for municipalities and they'll get less-sweet sweetheart deals. Being "Too Big to Fail" is unsustainable and wasteful.
This would be a massive boon for competition. Small businesses would be easier to start. Businesses may choose to stop growing: if you're making a healthy profit, don't jeopardize your margin in a perpetual struggle to amass the most power, leaving room in the market for competitors to coexist and meaningfully compete on quality.
It's time for the world to get a BIG reset.
Discussing 5 separate bills sponsored by Democrats in the house like they might actually go anywhere seems ludicrous.
1.https://www.washingtonpost.com/technology/2021/06/09/amazon-...
I'm a little confused here. Are they saying that this would prevent a business to pay to be listed at the top as an ad for some specific searches in those results?
Hopefully they'll also be able to do something about the massive profit-shifting by these companies where they extract massive profits from countries and contribute virtually nothing back in tax.
Its also laughable how they loudly advocate for E2E encryption to "protect people's privacy" whilst they themselves, monetize and invade people's privacy on a scale never before seen in human history.
Big tech truly are the robber-barons of the 21st century.
They play better in the sticks.
No one is going to feel sad. Most will feel vindicated. Good for country unity.
National health expenditures are $3.8 trillion [2].
You'd have to tax FAANG on revenue at a rate of over 1000% for this to be true.
1. https://corporatefinanceinstitute.com/resources/knowledge/tr...
2. https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta...
1. https://ir.aboutamazon.com/news-release/news-release-details...
2. https://www.apple.com/newsroom/pdfs/FY20_Q4_Consolidated_Fin...
Also, the Medicare for All proposal (which seems to have gotten the furthest) would require ~ $4-5 trillion dollars a year. Completely taking Amazon for all it's worth would fund it for 1/3 of a year.
What did these companies think would happen if they became partisan mercenaries? Future reference: always back underdogs or nobody at all because when they win you still have some leverage. The platforms just made themselves disposable stepping stones and now they are being disposed of. I'm untroubled by it because it was staggeringly naive on their part to compromise themselves, and we need fresh platforms anyway, but they really walked right into that one.