Trust-Busting as the Unsexy Answer to Google and Facebook
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The same thing happened with railroad barons in the 1800s and also in other areas of the economy, and the trust busting response the government took seems to have worked well to bring back a fair market. Government should keep the information networks predictable and accessible.
This is a core theme in George Gilder’s controversial but imho extremely insightful book Knowledge and Power: The Information Theory of Capitalism and How it is Revolutionizing our World: https://www.amazon.com/Knowledge-Power-Information-Capitalis...
Given the way the world works, if the US breaks Facebook up, (insert here) government-supported competitor takes its place.
Part of creating a fair, diverse playing field is ensuring international competition is playing by the same rules in the internal market (because you have no jurisdiction to prosecute them as a monopoly in their home country).
Which isn't an argument for not breaking Facebook up. But is an argument that if you break Facebook up, you should probably impose substantial limitations on ByteDance and Tencent as they operate in the US.
Co-opting the term "free market" was a fantastically successful bit of propaganda.
https://gutenberg.edu/2013/03/adam-smith-was-no-laissez-fair...
We don't have that though, people are assholes, so we have a regulated market.
I certainly do blame some individuals who are particularly vile, like Zuckerberg and Musk, but for the most part this is just what happens in competition.
The problem is the people. Everything else after that I agree with. For a completely free market to work 100% of the people would have to be moral, upstanding people.
A completely free, unregulated, market is an anarchocapitalist's utopia. Like how a working socialist government is a utopia.
Neither of those is realistic though, so we have a regulated free market.
Noah Smith had a good article on this with links to economics papers and brief summaries:
A "market" isn't some natural emergent property of the physical or social world. They aren't formed by, like, volcanoes. A market, historically, is a space defined deliberately by a governing body where traders are allowed to participate and where trade is allowed to occur under a given set of rules.
It's suposed to be a free market, not a free anything-goes-chaos-and-anarchy.
Not just shopping, but also AWS. It is functionally impossible to use the internet and not patron Amazon because of the ubiquity of AWS. It's not a monopoly because there are technically competitors, but the sheer scope of AWS reach makes consumer choice a practical impossibility.
I do nearly all of my internet shopping away from Amazon, only resorting to it when there's no other choice. But nearly every website I visit is powered by AWS at some level, either directly (the site itself) or indirectly (one of the site's service providers). To my mind, this is something new(ish) that is monopoly-adjacent and needs to be taken a bit more seriously. Telling people not to use the internet, or to deeply audit every service they patron, is not a practical solution at all, even for technical users, nevermind the average non-technical user.
It isn't the job of antitrust law to make sure you don't have to use AWS.
Also: AWS is not plausibly a monopoly at all. It faces competition from a number of other cloud providers AND doesn't have a particularly large market share in cloud services anyway.
~ antitrust economist
A railroad that'd require a toll every mile because you split one company into hundreds wouldn't be viable. If I had to visit multiple web pages to get the same result as a google search, that'd also be bad.
Amazon online shopping has a "monopoly" almost purely because the monopoliness makes it much easier and lower friction than trying to find an online store that is 1) somewhat trustworthy 2) consistent UI 3) ships in a reasonable time 4) isn't going to disappear (and importantly, already has my shipping and payment information). I regularly buy stuff online from elsewhere, but I use Amazon more often because it reduces the cognitive load by centralizing/standardizing everything.
EDIT: what really worries people about monopolies is that it takes more than a generation to see these companies bust. And to, again, optimize it, we come up with antitrust laws... But any optimization, in my opinion, costs risks and never is free (as in lunch).
You can split out payment and address retention easily: paypal and amazon both offer 3rd party checkout systems. If we're trustbusting Amazon, force that to be an independent company, offered on FRAND terms to all.
I think you could probably seperate into three business the fulfilment included marketplace consignment store from the merchant fulfilled marketplace consignment store from the sold by amazon store. Although, since two of those share facilities, it might be a little tough. Perhaps, splitting off the store from the inventory makes more sense --- if Amazon is just one of the marketplace vendors and the marketplace is a separate entity, that eliminates some of the unfair practices (require marketplace vendors to share sources, contract sources directly to undercut marketplace vendors).
You could also split off warehouses off into individual or regional baby-bell style corporations; vendors could send to whichever warehouses they like, the marketplace could choose which warehouse to use to fulfill orders, each warehouse could be reasonably independent.
Shipping/delivery could clearly be made independent. AWS, too.
I think the point of trustbusting is not necessarily to eliminate monopoly or dominant businesses, it's to reduce the scope of the monopoly such that dominance in one area doesn't become dominance in more areas. If there's a single purpose marketplace corporation, it may be dominant, but if it's prevented from controlling warehousing, shipping, and inventory, there's more room in those areas. After the breakup, you can still come back and do more to address the smaller areas, if they prove to be problematic under the new system.
Using Amazon as an example - the larger they've grown, they've actually become less trustworthy and a worse experience for consumers. Amazon has been stricken with all the negative traits that American culture associates with "big" government - bad user experience, bloat, fraud, and arbitrary bureaucracy. I've naturally found myself wanting to use them less and less, the larger they've gotten.
This is a firm being successful, not a monopolist. This is exactly what antitrust law shouldn't (and does not) punish!
~antitrust economist
It becomes harder conceptually if you try to break things in the software layer. Working in Google, I just cannot fathom what would it take to actually allow competing ads platforms in search.
A monopoly functions like a government.
Or inverted: a government functions like a monopoly.
I find both angles interesting.
Suppose we say the municipal water system is a natural monopoly, so we're going to have the government do it.
Well, then the head of the municipal water system should be an elected position, so that if they're screwing it up, people can vote the bums out without having to remove a mayor or governor who might otherwise be doing a good job on some other issues and therefore be hard to remove.
That's the biggest problem with federal elections. Each party does a different set of terrible things and you can't vote against one set of failures without voting for the other one when everything is integrated.
But I also think there are major issues with the current configuration of the tech industry! They just aren't because of monopolies. It is not helpful to misdiagnose a real problem. It is not helpful to have only a hammer and call every problem a nail.
I'm in no way unique in this regard - for all of the talk of how much Amazon dominates e-commerce, the reality is that it's never been easier to successfully run your own e-commerce site (just look at Shopify's market cap).
Sure, if you're selling totally commoditized goods that's a different story, but even there you've got substantial enough web presences from retailers like Walmart and Target that Amazon still can't reasonably be called a monopoly.
It seems like society needs a term for the concept of a company accumulating far too much power, and that we need laws similar to anti-trust laws, that apply to these companies. This is an incredibly difficult problem to address specifically because FB is not a classic monopoly. I'm not even sure what it would mean to "break them up".
Amazon, MS, Apple, and Google are all far easier to split up. Each company has logical seams to split at (i.e., aws/retail, gcp/search/android, itunes/devices, etc). You could split FB and insta, but that doesn't really curb FB's power and influence at all.
The reason there is no law against being “too powerful” is because it is a nebulous description that is not enforceable in a fair manner.
If a company is using its power to do something harmful, write laws against the harmful thing, irrespective of how much power the company has. Illegalizing shadow profiles of non-users would be a good step forward, illegalizing them only for FB-sized companies would be less good.
If a handful of companies are operating as a monopoly, that's already well-defined as an oligopoly.
I think the only other situation where a company can be too powerful is if they get too much power over the regulators. I expect it's rare to get there without becoming a monopoly or oligopoly, but it's probably not impossible.
I agree, hence my explanation of why there are no laws against "too powerful" companies. It is not an actionable condition.
"Although the courts "have not yet identified a precise level at which monopoly power will be inferred"[1]
[1]Section of Antitrust Law, Am. Bar Ass'n, Market Power Handbook 1920 (2005).
I can't tell if you have a reasonably thought out perspective based on your response or if it's just "corporations that are 'big' suck"
This is an oligopoly. Because companies are arbitrary constructs, it's a defacto monopoly by multiple sellers. The terminology is useful, but not in the sense that it is then end-all of qualification.
Collusion often results in this, which is not a dejour monopoly, but a defacto monopoly. Collusion isn't even strictly necessary. Endstage capitalism naturally selects the winners who stay on top. It's a simple concept taught in beginning economics.
"big companies" == oligopoly == monopoly is exactly what people mean when talking about worrisome "big companies", without the commensurate analogies.
A monopoly is about perspective which is about scale not some subjective definition (like sanderjd endlessly trolls about). Legal systems all over the world combat real/threatened monopolies (eg the CCP recently acted unilaterally) in various forms. Whether you think it's a useful reasoning to group companies and use a specific term is irrelevant. I sincerely hope you can understand that.
Good luck with whatever.
Yes, oligopoly is a fine word to use, but you can't just wave your hands around to transmute that into monopoly.
When modelling monopolies economists posit one seller that can set the price because it's simple. Similarly, perfectly competitive markets have an infinite number of competeing firms.
In the real world, monopoly has never been as black and white as that e.g. if someone was granted a monopoly on selling salt, that didn't immediately strike anyone selling salt with a lightning bolt, it just meant you couldn't build an actual business on it since you could hit legal issues.
Similarly, people accused of being monopolies argue that the "market" is bigger (do planes and trains compete for long distance travel?) in a way that is fuzzy and human.
But the bigger issue is how do you tell the difference between someone who doesn't understand something, and someone who refuses to understand something? People pretended that climate change wasn't happening for 3 decades and counting to protect big corporations, so really there's no limit to what their influence can buy.
AT&T was split on geographical lines, so maybe FB could be as well, and the regionals would all have to interoperate with open protocols that would allow for regional competitors.
Personally I would want to be able to host my own tiny Facebook instance that I control. Ideally I could even invite friends and family to share my ad-free self-hosted instance with a chronological newsfeed setup.
The right way to think about this is what kind of splitting would produce the most competitive landscape. We have a really successful example in the way that ISP competition has played out in various markets.
The US has regional ISP near monopolies in gigabit fiber, since the infrastructural outlay is so expensive. This is analogous to the moat FB has from building a vast and deeply connected network graph.
The ISP outcome has been that the US mostly pays extraordinarily high prices for substandard service.
Other countries have avoided this trap by regulating the enforced splitting of the network itself and the service provider. Since building out the physical network (the fiber, or the friend graph) is extremely hard, great that is a natural monopoly. Maybe you might get a couple of huge players, but the barrier to entry for new players is nearly insurmountable.
Each network graph / fiber provider is required by law to offer access to their network to third party service providers who you can contract with to provide you internet service over the network.
Japan for instance has this setup, with a handful of players that have built national (or regional) fiber networks, and when you buy service, you have a split bill. Part of it goes to pay for access to the physical network. The other part is to pay for an ISP that is routing your packets over the network.
I think this is the proper solution for FB. Break the company apart between the network graph provider, and the CLIENT layer. Let third parties provide their own friend graph client with features that people want.
Then you would see a flowering of competition as people feel free to try the client experience they prefer. * How about chronological news feed? * no ads, but paying your interconnect cost by making you pay a subscription * fine grained control of how many stories you ever see from specific over-talkative people. * delivering a subset of your friends' stories only on keyword-matched topics / hiding all stories that match specific topics.
I am not hopeful the technologically illiterate people writing the decisions will understand this though. Geographic splitting is nonsensical for a graph that is inherently global.
In many countries, we still tax it 65%, to ensure a one-time success doesn’t become a “monopoly” of some families over generations.
Likewise for companies. we can’t tax them per generation, but the monopoly laws are here to dismantle them if they keep hold on a market without ongoing “coup de maître” on innovation.
Our forebears have us covered! Antitrust became the popular term, but back in the Gilded Age, it was often referred to as anti-consolidation. I think that is an excellent term for it.
Amazon? eBay? WeChat?
Edit: It also doesn't speak to any of the issues with Amazon. (Also interestingly, Amazon's own advertising business is increasingly making this a tri-opoly.)
Google’s customers are the advertisers who pay and (I’d argue) those who want to show up in search results. You have to either pay for ads or play their algorithm game to be relevant because of their monopoly position on search. It’s basically the same story for Facebook, Twitter, TikTok, etc.
There are no contract cancellations or negotiating or payment loss. It costs zero dollars and zero time. Google owns a huge portion of search simply because they have the best product.
I'm with you here.
> Saying "monopoly" is just shorthand for market power, it's not a binary definition.
No, the word "monopoly" has an actual definition.
Edit to add: And to the "everyone knows what is meant". No, that's not true, lots of people have become confused by the usage of the word "monopoly" to describe the issues with big tech companies, through its pervasive usage in congressional hearings and media. Using confusing inaccurate language is not harmless, it confuses the debate.
> 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.ftc.gov/tips-advice/competition-guidance/guide-a...
Literally this is semantics. Literally, you are arguing about the definition of a word. So yes, by definition, you are quit literally arguing about what a word means, which is semantics.
That's what the word "semantics" means.
This is how the justice department defines them: https://www.justice.gov/atr/competition-and-monopoly-single-...
Yes.
> It's all about concentrated power.
No, absolutely not. There are many activities which violate antitrust law which have nothing to do with "concentrated power". Nor is "concentrated power" something which is banned in antitrust law (because it isn't clear what it is!).
~ Antitrust economist
I still believe the analogy holds, just substitute geographical points A and B with person A and person B (or business A to potential client B), and the similarities are obviously clear. There is often no other way to get from person A to person B than to use Facebook, or from person C to D without Twitter, ... . Yes, there are various social networks, but there was also various railway barons. Just like the railway was not a single nationwide monopoly, but instead a series of smaller regional monopolies, a single social network is not an all encompassing internet-wide monopoly, but instead a monopoly lording over a subgroup.
Is that really accurate, though?
How many people use a single social network? And regarding market power, very few companies do their online marketing on a single social network; they usually have a general strategy that they deploy on Facebook, Instagram, Twitter, etc.
The situation is even worse with messaging apps than with railroads, though, since there is a coordination problem between customers/users of each service, rather than each customer/user being able to make their choice of service in isolation. It's very hard for a messaging service to compete if it requires users to ruin the experience of not just themselves but also at least one of their friends.
It's really just so insane that the complaint being ascribed to monopoly power is that it's a tad inconvenient to use the many freely available competitive products. Yeah! That's what a market that isn't monopolized is like! There are lots of competing products, which is often less convenient than if everyone were using a single monopoly product!
Nope. Have you ever read the article "Facebook is censoring links to competitor social network Tsu and deleting old mentions"?[0]
> There are lots of competing products, which is often less convenient than if everyone were using a single monopoly product!
If I drive a Ford then it doesn't inconvenience me if someone else drives a Honda. This is equivalent to a market where messengers use an interoperable protocol, like email. The "less convenient" world you are describing is one where some roads can only be driven on by Ford cars, and others only by Hondas, causing people to choose their destinations based on which make of car they have.
[0] https://boingboing.net/2015/11/06/facebook-is-censoring-link...
I think it's very lame that Facebook would censor links to a competing site (if that is indeed what they're doing, which I'm happy to stipulate), but Facebook is not in any way the only way for people to see links to that site. Contemporary society provides that site a ridiculously giant number of ways to get the word out. There are lots of other sites where people can share the links, they can buy ads in articles, they can optimize to appear in search results, they can encourage people to share by word of mouth in messaging, email, and real life, they can buy billboards or ads in subway cars or lots of other things. I am not exaggerating when I say that it has never been easier to get the word out about something. That doesn't mean it's easy, it's just that it's always been hard and it's much easier now. This is why advertising has always been big business.
The Facebook of today didn't exist when Facebook was new. How did they ever get the word out and get engagement? They figured out other ways! Facebook is just not a necessary component of spreading the word about a new site. It's very useful, but also very possible to route around it.
The world also doesn't owe Facebook monopoly power over people's social graphs either, and yet Facebook is able to wield that to some extent. In case you think that this is something that Facebook achieved on its own merits, rather than being granted by society/government, it's worth considering the extent to which copyright and hacking laws are used to prevent interoperability.[0]
More generally, though, I believe that profit-seeking corporations should only exist to serve society, and therefore corporations do owe us minimally inconvenient products, however we decide to define "inconvenient" (and taking into account society's other goals, such as employment).
> it has never been easier to get the word out about something.
I think that is a reasonable assumption, but I think it's also true that it's never been easier to travel anywhere in the world, and yet local monopolies of railroads are still bad for society and should be regulated against.
[0] https://www.eff.org/deeplinks/2019/10/adversarial-interopera...
Facebook literally rivals the Catholic Church for participation. Zuck is literally the Pope of his own empire.
So, my question to you, if every non-Google search engine published their formula for rankings, and SEO for going up all their rankings was mutually exclusive with going up in Google's rankings, do you believe any site would implement them?
I doubt anyone would trade higher status on every other engine for lower status on Google. And in that case, they may as well be a monopoly.
I don't know exactly how we contend with this definitional problem, but intuitively I think it should have something to do with prices and behavior. For example, if we were a fly on the wall in a Google exec meeting, we might be curious about whether they're jacking up the price of ads because they know no one can compete with them, or whether they're sensitive to charging more than their smaller competitors do. If they're behaving like their competitors are a serious threat, then intuitively they're probably not a monopoly, and it probably doesn't make sense to trust-bust them.
But anyway I'm not a lawyer, and I don't know what the current thinking is about any of this stuff.
There's an important difference between "capturing market share" and "capturing too much the market share." If Ford's going to put its competitors out of business, turn them into niche players, or even just get into a position where it can rest on its laurels for a few decades, our primary concern is no longer making sure Ford can be rewarded. Honestly, I don't see the downside of regularly breaking up a #1 player with too much market share into successors that are the #2 and #3 payers (and forcing major shareholders to divest one or the other). I want companies to be competing to get to the top, but once they get there, give them a prize for their effort and send them back down.
From my experience as a customer, Amazon's e-commerce operation hasn't improved much (e.g. their search is still as shitty as ever) and has arguably regressed in many ways (e.g. more shady products and fake reviews) in the last decade. That's pretty strong signal to me that they're not under enough competitive pressure.
For an idea of what it could be, try the search on electronic component distributor sites like Digikey[1] and Newark[2]. They are both improving their search in order to attract more customers benefiting all customers in the process.
Try to find a 34 inch 1080p monitor with both VGA and DisplayPort inputs on Amazon and you'll find yourself reading hundreds of monitor product pages. If Amazon had serious competition you could probably find and buy one in 5 or 6 clicks, or easily determine that such a combination of features doesn't exist.
To hazard a guess, I’d speculate that apparent poor quality of search results is more likely Amazon trying to push customers toward items where Amazon earns more margin. The average customer probably just buys the first/cheapest result and isn’t going to spend hours scouring the product pages. There’s a lot of complexity in Amazon’s relationships with suppliers, fee structure, and warehouses/logistics that could affect the revenue-optimizing search ranking but isn’t obvious to the user.
You don't window-shop Digi-key. You're pretty much buying on spec sheets alone. I want to see all 330 ohm 1/4 watt through-hole resistors, now sort by price and availability in the quantity I need, then maybe discard products that don't meet some other criteria that I can't directly filter for. There's very little chance of making a sale through a slicker marketing campaign.
Conversely, people buying a single monitor might be browsing, potentially swayed by the right language and graphics on the landing pages. I'm pretty sure those bloody finches sold more ViewSonic monitors than any other aspect of their product line. For a window-shopping customer, getting the customer to see as many of them as possible improves their chances of a sale.
On the other hand, I will concur that Amazon's search is a disaster for computer products. I suspect it's also terrible in other verticals that have clear, well-defined "faceted search" concepts, but we probably have the most experience with that one here. I suspect it may be a casualty of their broadness of categories-- why spend the labour to provide really killer search if it hasn't proven to be an impediment to sales yet?
No. Not in the economics of antitrust. There is no "too much market share" threshold. Unless consumer welfare is harmed there is no reason to complain that a firm is "too big."
> From my experience as a customer, Amazon's e-commerce operation hasn't improved much (e.g. their search is still as shitty as ever) and has arguably regressed in many ways (e.g. more shady products and fake reviews) in the last decade. That's pretty strong signal to me that they're not under enough competitive pressure.
So go elsewhere! That's how competition should work. Among your other alternatives are Walmart and Target, which have quite robust online operations.
Amazon is not plausibly a monopoly.
https://promarket.org/2019/09/05/how-robert-bork-fathered-th...
And that original interpretation was what worked on the original monopolies (oil etc). The sooner we get back to that, the better.
Consumers are harmed by a "too big" firm that's under little to no pressure to improve its products. The retort to that usually "wait a few decades until the market sorts that out," but frankly, I could be dead by then.
Another poster addressed how the "consumer welfare" standard is not so much an economic argument, but rather a legal enforcement framework. I see little mechanism for consumer welfare to be harmed by the creation of multiple successor companies that all share the same successful formula of the "too big" firm but now have to compete with one another.
https://www.justice.gov/atr/competition-and-monopoly-single-...
~Antitrust Economist.
"her paper highlights how the consumer welfare view of antitrust fails to curb the predatory pricing".
I said it elsewhere, but I not against the idea of trust-busting, but the industry analogies typically brought up don't really fit. The closest I can find in general discussion is that the services are a public good, but we tolerate/promote monopolies in those sectors (like utilities).
A better framing would be to focus on specific problems: "Facebook owning both facebook.com and Instagram and both Messenger and WhatsApp give them too much market power in social sharing and messaging, so Instagram and WhatsApp should be spun back out", "Amazon should not be able to use sales metrics of other platform sellers to inform their own product development", etc. Identify market issues, figure out regulatory language that speaks to those issues.
But "big companies are monopolies that must be broken up" is unhelpfully reductive.
It's my understanding the whole intent of anti-trust is consumer welfare. The connection between Amazon and pricing/competition seems to be a straight-forward connection between hurting consumer welfare and its market power in terms of Amazon's market power. But where does the connection come in between consumer welfare and the social media apps? I.e., how does FB hurt me by having the most/best information regarding my social network?
Or is your stance it shouldn't be framed in terms of consumer welfare at all?
Basically I just don't see anti trust regulation as being the best way to target the diverse set of issues society sees with the big tech companies of the moment.
Antitrust law isn't about stopping people from accumulating a dominant position. It's about stopping people from using that dominant position to maintain itself or to spread to other areas. Ford produces the "Amazing Car" that everyone wants, costs $1, etc. great! When Ford uses an RFID reader to force it to only fill up at Ford Gas Stations antitrust steps in. The issue isn't that Google is the dominant search engine, but that it uses that to become dominant in ads. It's not that YouTube is dominant in video, but that uses that to encourage people to download Chrome.
This is exactly what antitrust law should not punish. Google has a large market share of search because it offers a good product. Antitrust law should preserve competition without punishing success.
People are free to use alternatives, including Bing. If they don't, that doesn't make Google a monopoly (which indeed in search they are not). It makes Google successful! (Though it is a successful firm which does occasionally violate antitrust laws in other areas and should be punished for that.)
No. Google has a large market share of search because it got in early, presented some synergistic products, heavily biased search results towards its own products to reinforce that, heavily gamed advertising bidding in its favor, placed anti-competitive requirements on hardware manufacturers of Android devices, and locked-in consumers' data so that competitors couldn't access it until it was forced by governments to allow consumers to download a copy.
Google, and Alphabet, do not today offer good products. I can go on for hours describing many years-long problems with the product offerings; culminating in my complete non-use of Google as a search engine because its results are so poor, stopped using Google News because of its tracking and curation biases, stopped using Google Mail because of its inability to provide filters that automatically mark emails as spam, stopped using Google Drive because it actively prevents many features from working in Firefox, and ... well the list can go on but I have better things to do.
"got in early" compared to what?
There were dozens of search engines before Google.
It's not that Google should be punished. It's that they should be stopped from using one product line to prop up another.
I think it depends on what you consider "the market" to be.
If I want to compare Amazon to the "Global Retail Market" (Amazon's preferred framing), then maybe they aren't in a monopolistic position.
But I—as ab individual—don't participate in the Global Retail Market. I participate in the "online US retail" and "Pacific Northwest retail" market. So I don't get much benefit out of there being more competition to Amazon in France, so the "Global Retail Market" doesn't seem like it's always the right framing. For me, it's still the case that Amazon doesn't feel like a monopoly, but I could imagine areas where Amazon is much closer to being one of just a small number of options for many products.
Similarly, I'm sure Facebook wants to be evaluated against _all_ communication media, but again I want to communicate with people in my immediate network. If 100% of my social network and business contacts used exclusively Facebook for communication, then from _my_ perspective Facebook might have a monopoly on my communication options (even if they have real competition in China from competitors).
I'm not so convinced that we should just accept the broadest possible interpretation of "the market" that we should evaluate as the correct framing. From the perspective of some individuals, if there is only a single dominant option, then that person still needs to deal with anti-trust issues.
It's similar to the way some of the major internet players will carve up the country into regions of fairly exclusive offerings. Across US broadband, the market may be divided amongst a number of different players such that it doesn't appear to be a monopoly. But when you zoom in to an individual municipality, it might be that there _is_ a monopoly at that level, and the competition that appears to exist in the "national market" is actual a union of separate monopolies (and other regions where there is actual competition).
So, while I totally agree with you that under the legal definitions of monopolies, many of these entities are not there, under individuals _practical_ definition of monopolies, many of these entities _are_ monopolistic.
It honestly doesn't. None of these are monopolies by any market definition.
Amazon has so many competitors: brick and mortar stores like Walmart and Target and Best Buy remain successful, online competitors again like Walmart and Target and Best Buy but also Ebay and in a different way Shopify and others, are also successful.
Your argument is slightly stronger in the case of Facebook, but still very weak. Facebook's social networks have strong direct competition in Twitter and TikTok. Facebook's communication platforms have strong competitors in iMessage, SMS apps, Signal, Telegram, Discord, etc.
I'm not 'accept[ing] the broadest possible interpretation of "the market"', I'm just not accepting hand-wavy non-definitions of "market" that only include a single company so that it can be called a monopoly by definition.
Again, I think there are major problems and I favor new regulations for all of those problems. But what I don't think makes sense at all is redefining "monopoly" in a way that makes no sense, just because anti-trust law is our only extant tool for solving the problems caused by enormous tech firms.
What America is figuring out that, if the US Markets are going to remain uncompetitive, than Chinese companies that don't play by the same rules are going to outcompete these lethargic companies that don't want to get better but instead vacuum up all their competitors. This hurts American's technology advantage and competitiveness in the global marketplace.
>Again, according to the complaint, Facebook chose to buy an emerging threat rather than compete, and announced an agreement in February 2014 to acquire WhatsApp for $19 billion.
>The complaint also alleges that Facebook, over many years, has imposed anticompetitive conditions on third-party software developers’ access to valuable interconnections to its platform, such as the application programming interfaces (“APIs”) that allow the developers’ apps to interface with Facebook. In particular, Facebook allegedly has made key APIs available to third-party applications only on the condition that they refrain from developing competing functionalities, and from connecting with or promoting other social networking services.
https://www.ftc.gov/news-events/press-releases/2020/12/ftc-s...
This is not true for all the reasons I already pointed out in my comment.
You can't just wish this away. You need some other theory of the case. I agree with you that all those things are bad, but those bad things just don't flow from monopoly, they flow from some other problem.
For example, my colleagues are on Twitter but not Mastodon. I can't leave Twitter without leaving my social network. Why does Twitter own access to my colleagues? Why should we allow that to be a competitive advantage? It's certainly at-odds with the principle of innovation--you're not on a platform because it's more innovative than another platform, you're on it because they have a monopoly on your social network.
Contrary to your claim, there's very little competition in these markets because corporate ownership of user social networks is an enormous moat. Not only can users not easily move to another platform, but advertisers can't easily spend their money on some new platform because the new platform is much smaller in all likelihood.
1. The primary product of an MMORPG isn’t access to a social network.
2. The social networks in these games is far smaller than social media platforms (we don’t usually worry about anti-trust for tiny markets)
3. As you mentioned, social media platforms are communications/infrastructure, not recreation.
Exactly. You can switch to another MMORPG and find another level 29 healer to restore your HP, but if your mother only uses Facebook, it's much harder to switch to a different social network and find another woman who gave birth to you.
Regardless of what program I use to communicate with my friends, that program is now a monopoly. Even if I coded up the website myself and my friends and I are the only ones to use it, that website now "owns access" to all my friends. It is absurd to label this website a monopoly.
This is also not actionable. Once my friends and I all decide on a communication platform, that platform is a monopoly and must be broken up (?), by removing some of my friends from the platform (?). In that way, it would literally be impossible for me to have a platform where I can communicate with all my friends, because such a platform would be a monopoly and must be broken up by your definition.
2. It's perfectly actionable: open protocols separate the platform and the network.
https://news.ycombinator.com/item?id=28851867
My contention summarized is that using market share as it has historically been used is not good, because these software-based companies can scale to much greater power than ever before whereas in the past, one had to gain significant market share to wield the same or even less power.
Yeah, the situation involves a contradictory litany of complaints. Google/Facebook/etc are terrible because they suppress free speech and terrible because they allow it. They're terrible because monopolize online advertising and terrible because they facilitate it.
The purpose of breaking up a monopoly is to allow competition to facilitate the provisioning of whatever good a monopoly provides. Lots of people imagine breaking up or regulating Facebook will prevent the variety of abuses that we see. But if you look at the "competitive Internet", you can observe a sea of garbage in the form of endless popups, malware and eCommerce fraud. Things seem little more thought-out than "I want this to stop", which is hardly a recipe for constructive change.
Yes they are. Imagine that I imported alligators to Washington[0] and set up a gumbo resturant in Seattle. I would have a (local) monopoly on alligator meat. The fact that you can easily buy beef or chicken from any number of other places doesn't change this, it just means that my monopoly isn't particularly relevant.
Similarly, Facebook has a monopoly on communication with people and groups that communicate exclusively via Facebook. You could go communicate with someone else, just like you could go buy some other kind of meat in the above example, but there is no competitor for communicating with the people you actually (for some reason) want to communicate with.
The relevant question is whether Facebook's monopoly is broad enough to be relevant. Reasonable people might disagree about that. But there is no question that they have a monopoly.
> their monopoly was so powerful because there was often no other way to get from point A to point B
In such a case, the fact that you could instead choose to go to point C by way of some other railroad, does not mean they don't have a monopoly on travel to point B. (Nor does your theoretical ability to walk to point B, or track down a Facebook user in real life and visit their house.)
0: I'm going to assume noone has already done this.
Who are the competitors in the market OR, if there are none, why is the market definition you have offered the correct one?
This is why the FTC lost their monopolization case against Facebook this January. Instead of offering a market definition, they made vague, hand-waving statements in their complaint which all revolved around it being "obvious" that FB was a monopoly. The judge was not persuaded.
~Antitrust economist.
The Monopoly is on social networks with the exact same features as Facebook, in literally every way, down to the last detail.
Yes, that is a monopoly.
The question that actually matters though, is how much substitute goods there are for Facebook.
But yes, Facebook absolutely has a Monopoly on the product that is exactly the same as Facebook.
This does not mean that they don't occasionally do things which violate antitrust laws! They do. And they should be punished for such violations. But they aren't monopolies.
~Antitrust economist.
In the Industrial Age, you had a monopoly on paperclips if the only way to buy a paperclips was through your company. But paperclips themselves are commodity-like: there are billions of them out there and each is more or less interchangeable with the others.
Information products are not like paperclips. Each piece of information is by definition unique, and its value to the consumer is predicated on that uniqueness. When you buy a picture frame from a store, the first thing you do is throw out the little paper photo that's in it and replace it with yours. Why? The previous image was a picture of a smiling family. Isn't your goal with the product to have a framed photo of a smiling family? Why not just save yourself the trouble and keep the paper?
Well, it turns out that the fact that you want a smiling photo of your family is highly salient.
Sure, there are lots of social networks. If I want to find an app that has humans on it that I can connect with, there is definitely no monopoly. But if I want to find an app that lets me connect with my actual friends, then my choices are limited to exactly the social networks they actually use. If I want an app that doesn't just let me receive event invitations, but let's me receive the actual invitations my real friends send, I sure as hell better be on that one particular app. That app has an iron-clad complete monopoly on those events.
Almost every media or information company has thousands of micro-monopolies on various unique pieces of data. Our simple notion of trusts does not accommodate that concept. We need to update our thinking to the 21st century.
...which is exactly why they never will. This is how you know they are behaving monopolistically.
An analogous problem exists with media companies. Why do we all now have subscriptions to Netflix, Disney+, Hulu, etc. instead of just one? They don't seem to have a monopoly since there are so many. But we don't seem to have much choice either, since we end up having most of them.
The problem is that each has a complete monopoly on certain shows. If you want to watch "Stranger Things", the only way to get it is Netflix.
I think that may be part of the problem, though. We don’t replicate our contact lists very often, and in part that’s because we use each social network for different purposes and would prefer to have different connections on each one.
For relatives and close friends, you probably have multiple ways to contact them including older technologies like email and phone. For other people you might not bother to keep contacts up to date.
A piece of information is not unique. You and I can both know that 2+2=4. We probably both know what the president looks like.
That's the complication.
There's nothing preventing you and your family from being part of multiple social networks. There's nothing stopping a site from being listed in both Google and Bing. None of that information is necessarily unique.
Here's the real rub. Whether or not your friends are on multiple social media networks isn't controlled by Facebook; it's controlled by your friends.
I think it's going to be really hard to argue that Facebook has a monopoly because people use them and refuse to create accounts elsewhere. Facebook isn't taking away your choice to connect with your friends, your friends are. The accounts are free, and Facebook isn't going to ban you for having a Mastodon account.
I still think we need a more open environment. I just think we need a new concept for what's happening instead of trying to logically torture the situation to fit a heavily abstracted notion of a monopoly. And then we need to ban that concept.
Imagine thinking that google doesn’t have a monopoly on search. That Amazon doesn’t have a monopoly on selling goods online, etc.
Now these companies do lots of other things that they don’t monopolize, but they ARE monopolies in specific high value spaces and they leverage those monopolies in their other endeavours.
Let me propose a different way to think about it.
Can I do task <X> and prevent company <Y> from capturing any value from it?
Can I post my own video online and prevent YouTube from capturing any value? The answer is "No." Some jerk will post it to YouTube and a whole bunch of views will go over there and Google will capture ad revenue on it.
That's definitely a monopoly.
See, I think people have been using this term without any actual definition of it for so long that people are actively confused by what is and isn't a monopoly. People have said focusing on this word is "just semantics" but it isn't because people really aren't sure what it means.
https://www.reuters.com/legal/litigation/amazon-copied-produ...
Every interaction with them is blindfolded deep cavity strip search with average 30 agents(30 cookies) without our permission. Even the EU data compliance pop ups don’t show participants of this heinous data molestation.
Forget antitrust, they ought to be tried under racketeering laws or RICCO statues which was used against mafia. Bork and Lina khan doctrine while relevant can’t help us restore the old internet from the current toxic ad littered pages.
It's like we're living in some global Orwellian dystopia or some Communist dictatorship.
1. It being profitable is good for getting more people to get into the market. Taxing it by activity if anything discourages competition! 2. What does degree of profitability have to do with clickbait? Spamming isn't very profitable but it does generate some revenue so we are stuck with the crap. 3. The advertiser network's profit is entirely seperate from how much the individual end-point earns by showing them.
Free markets only exist because of regulation.
It's regulation that allows actors to participate in good faith, and not get smoked by the huge whales and owners of exchanges, etc.
Amazon is certainly not an online shopping monopoly. It's just a superior service. I can get a similar online shopping experience from Wal Mart and many others. If Amazon can offer us such good service through having its own big network of warehouses, drivers, etc. that's impossible with a bunch of smaller companies then I say let them be as big as they are so long as they don't egregiously abuse it.
They definitely need to take Whatsapp away from Facebook, though. Regulators only allowed it under specific conditions and Facebook violated those conditions
Thats exactly why it should be split up and regulated more heavily.
This isn’t entirely accurate. Federated social networking is entirely feasible, and arguably the only reason it isn’t more widespread is because large non-federated social networks have an active interest in not federating.
Breaking up Facebook would make it possible for social-network “hub operators” to compete on the basis of moderation quality, administrative practices, and site quality.
But hey, since we are in pitch-fork mode, we can simply make up stuff to our fellow-brainwashed posters. How is this different from Q?
That is very aptly put. To go on a bit of a tangent, I would go even further and say that companies are always a form of government, even without a monopoly, but the addition of a monopoly just extends the power and reach of such individual government.
In the modern capitalist systems, the collective of all companies together are the branch of govern that decide what will be produced and where-and-how people are going to work, all that under the checks and balances of the free-market and the official branches government. That is, an individual company is a form of tiny local government (not local in geography, but in scope) with the mandate to govern some aspects of the life of their employees (what they will be doing for 40h a weak), and the production of their particular products, being that mandate can be removed and transferred to other company by the free market.
Now, I know that this metaphor I described is not a 100% perfect fit, if stretched to the extremes it will arrive at absurd corners where companies are nothing like governments. But then, no metaphor is perfect, not even the metaphor officially supported by the USA Judiciary branch, that "companies are people". They are only useful, and only fit in small contexts, and as such I believe "companies are government" is a very useful one and should be part of the discourse.
None of these things are a natural monopoly.
Facebook only stays relevant by buying its competitors. You don't even need to break them up, just disable acquisitions. Then Instagram would be separate, WhatsApp would be separate. You don't even have to break them apart, just wait for the next one and don't let them buy it.
Google is the biggest search engine but search isn't a natural monopoly. Their dominant position comes from all the vertical integration. Google owns YouTube and YouTube is featured prominently in Google Search results. To get Android/Google Play, OEMs have to use Google as their default search engine. To fix this you don't have to regulate the search results, just separate the search engine from the other companies, and stop allowing them to buy competing ad networks.
Amazon doesn't really even have a dominant market position. They're not a railroad, they're Internet Walmart. They're just the biggest player in a highly competitive market. They have no capacity to significantly raise prices or people would immediately switch to any of their hundreds of competitors. Most of the complaints are from competitors butthurt that Amazon is keeping everyone's margins slim -- but that's what they're supposed to be doing.
A railroad is a natural monopoly. You can't really break up a natural monopoly, so you have to regulate it, which is terrible.
None of this tech stuff is like that. The problems here come from consolidation through mergers and vertical integration. They're unnatural monopolies with clear lines across which they can be broken up without long-term regulation. Just stop letting them buy their competitors.
Figuring out which products have high margins and entering those markets is an increase in competition.
Promoting their own listings is only a problem if the competitors can't reach those customers in any other reasonable way, which isn't the case because there are many other online retailers and it's quite feasible for a medium sized competitor to sell directly to the customer on their own website.
And how would you stop them from simply replacing their competitors? From the article "Budding companies that resist being acquired are pruned through flagrant copying." Would you pass a law that said Facebook can't expand their business to do anything a competitor is doing? I can't see how that would fly.
And the challenger has an advantage against a conglomerated incumbent because they can add features that reduce profits in ancillary markets the challenger isn't in. The incumbent won't want to copy that and cannibalize their other market, but the users want that feature so the challenger gains market share.
Competent competitors will do that naturally. See TikTok vs Reels.
Ad networks naturally form monopolies. Ad matching algorithms can make better matches (more revenue per click and more desirable product for advertisers) the more ad campaigns they have to select from and the more display properties they have to publish ads to. It's a market extremely prone to winner-takes-all.
I say this as someone who worked internally on an ad system which used to be one of Google's primary competitors. I specifically worked on projects intended to address these runaway network effects. It wasn't possible and the company exited the business (they actually tried to be a customer of google's because it'd be more profitable to just show their ads, but this was blocked on antitrust grounds ...)
The monopolistic aspects of these entities aren't necessarily the customer facing products they market to the masses.
Just because something has a network effect doesn't make it a natural monopoly. The network effect means the network may need a minimum size in order to be viable, but that doesn't mean there can't be a dozen competing networks of that size that are all viable.
Why would you spend more money to buy a less-well performing ad?
Why would you display a less well paying ad on your web property?
If you're doing search ads, you cannot fund the megawatts of infrastructure to keep pace with google if you're working with smaller margins. This is not theoretical - adwords/search has destroyed almost all of the competition, save those who have other ways of funding themselves.
So the smaller networks would make less money than Google. Less money than Google isn't the same as less money than is necessary to run servers.
And servers get cheaper as time goes on. The number of "megawatts" you need to serve a given number of ads is exponentially decreasing over time.
> This is not theoretical - adwords/search has destroyed almost all of the competition, save those who have other ways of funding themselves.
You can't ignore the companies they bought out when you say the others went out of business. They don't have any reason to buy a competitor that was just going to fail anyway, and they empirically have bought several competitors.
This is why search engines have consolidated into Google and Bing. It is not currently possible to create a search engine.
> The number of "megawatts" you need to serve a given number of ads is exponentially decreasing over time.
This is completely backwards. This is not theoretical, this is a fact. Please understand that I spent half a decade building bigger and bigger datacenters because the rate of infrastructure expansion to keep pace with growth is absolutely massive.
> You can't ignore the companies they bought out when you say the others went out of business.
They did not buy out their primary competitor. I have an insider view here and while I can't share the details I can say that you really have no idea what you're talking about.
The idea of liberalism has always been to avoid monopolies, which government is just one form of. The government’s role should be reduced to the minimum, police-army-justice-currency, and even the last one is up for a debate. So the government’s role is to stay small, and make companies stay small enough.
Unfortunately this flew away in 2001 wehn Microsoft had been condemned, but not sentenced, because after 9/11, USA needed their companies to reign upon the rest of the world. Maybe time has come to admit that US reigning on the rest of the world hurt the domestic market with too-large-monopolies, and maybe it is time to come back to a competition market.
Does that have anything to do with weakening the railroad industry at a critical moment just before the automobile industry popped up and ate their lunch?
Could we be risking a similar problem here with the successors to Facebook's social media, Google's internet search algos, and Amazon's shopping experience?
For example I just moved and had to buy lots of stuff. I ordered from Macy's, Walmart, Target, Wayfair, and Amazon.
It's trivial to use Bing or Ducduckgo over Google. When a search engine starts doing better for me I'll switch.
As for Facebook, plenty of people using other services to stay connected
The internet has value besides being a vector for advertising. This is more or less what the parent comment is suggesting.
Who pays the cost of supporting the internet. Internet subscribers. We finance (a) the delivery of advertising, (b) creation metadata about our usage (e.g., empty POST requests, beacons, various forms of telemtry, etc.) and (c) uploading our data to their computers.
The internet example is a more interesting analogy to me because it seems to align more with a utility, which we're okay with having monopolies existing, albeit regulated, because of the greater efficiencies.
So are social networks, online shopping, or search public goods? If so, should they be regulated because we think there is an advantage to having a monopoly in this space? If not, what are their barriers of entry that stifle competition?
I don't necessarily don't think they shouldn't be broken up, but I'm trying to understand whether/how they fit into previous paradigms or if the monopoly paradigm is fundamentally different in this digital era.
I think that’s one of the big differences - they have a monopoly on the means of production (the userbase), which is less ephemeral than say owning all the steel plants and mines.
This IMO is a better argument towards anti-competitiveness. I absolutely get that there needs to be filters for certain privileges, but hard-coding them for big-name apps is not the answer.
Bing and yahoo contain near equal information networks and Google isn’t dominate in many important Asian regions.
Fundamentally, products are always gonna get copied. Google tried to do it to Facebook, back when FB was the size that Snap was at the time, how well did that work?
Fundamentally, while competing with a megacorp sucks monkey balls, Snap shot themselves in the foot with their boneheaded product strategy.
They literally didn't invest in their Android app because they wanted to be exclusive. Given that the vast majority of countries are majority Android, this gave FB the space to clone their product and put it in front of hundreds of millions of users who'd never seen the concept before.
Ultimately, while I do agree with most of the articles points (breaking up the internet behemoths would probably be a good idea), I really dislike the Snap analogy, as they could easily have beaten FB to the punch if they'd had an effective growth strategy.
Mind blown, I had no idea Snapchat was iOS exclusive. I was thinking just yesterday about how Clubhouse's strategy may (who knows really) have backfired, it seems to me by betting on FOMO-manufacturing they just gave time for others (like Twitter Spaces) to catch up before they filled a niche.
They didn't seem to get that you either need to show user growth or revenue growth, and failed at both.
Yeah, it was essentially that kind of mistake. Like, it appears that nobody learned from Fb's mistakes (letting Orkut get a toehold in brazil before they moved there).
> I was thinking just yesterday about how Clubhouse's strategy may (who knows really) have backfired, it seems to me by betting on FOMO-manufacturing
I was so fed up by the lack of the Clubhouse app on Android that I made one myself using reverse-engineered API docs. And, I managed to do it right when it was on top of its popularity. The amount of attention (and not very smart questions from journalists) I got was absolutely mind-blowing. Who would've known that a for-fun 2-day project could do that?..
By the time they did finally release an official Android app several months later, Clubhouse was largely forgotten.
I'll never understand this thing with an excellent iOS app but the Android app being an afterthought. No, there's not THAT much fragmentation any more. This excuse is no longer valid. You really only run into device-specific bugs when you use low-level stuff like video codecs, but even then, these are rare.
This is a oversimplification and wrong. AT&T was controlled by the government until 1984 and only because of this we were able to got technical innovations like UNIX, The C Programming Language and reusable open-source software. This formed not only the foundation of Linux and C but also later the Internet. And all of this happened because AT&T was actually controlled instead of split up. They were not allowed to enter new markets and therefore we benefit all. What happened next? UNIX-Wars, Lawsuits and disastrous situation which enabled especially Microsoft.
The lesson learned here is that - just mere splitting up - doesn't fix anything. The government subsequently did actually nothing against Microsoft and it's contracts with PC-Manufacturers. What I cannot say is whether the government still doesn't understand what software is and it's influence?Especially mass gravitation through user. Or if just no market regulation happens since the 1980ies.
I wonder how Personal-Computers and the handling of source-code would've been evolved if BSD and SysV were have been better friends? The appreciation of source code availability? And maybe an simple option at the store which sold that IBM-PCs with the 386 processors. If you got that "UNIX" thing on our PC with the source - you would probably wondered a lot that the spreadsheet application doesn't came with the source...especially when you pay for it.
How could the growth of answering machines be connected to the break-up of AT&T, which was about separating local from long-distance service? According to https://americanhistory.si.edu/collections/search/object/nma..., there were commercial answering machines being sold in the U.S. in 1960. The increase in the use of answering machines in the 1980s likely had a lot more to do with the emergence of cheap microchips and cassette tapes, which greatly reduced their cost.
And what did the breakup of AT&T have to do with the creation of the first ISPs? Even before the breakup, anyone could create their own separate communications networks if they wanted. There were already commercial computer networks like TymNet and consumer proto-ISPs like CompuServe before the breakup and the breakup had no effect on them.
AT&T enforced a rule that you could not connect "foreign attachments" to the phone network, which included answering machines not made by them.
The break-up didn't happen until 1982.
I believe they are talking about AT&T's ability to impose rules over what devices could be connected to the telephone network, and how. That's one of the reasons that both early answering machines (like the one you linked to) and modems used acoustic couplers. It's true, though, that court cases had eroded how tightly AT&T could control what devices could be connected to phone jacks well before the breakup of the Bell System. Still, 1200 baud modems were only possible with a direct connection, and didn't become commercially available until the year after the Bell System breakup.
Well, you can take a national utility and split it across geographic regions so local calls or electricity bills go into the pockets of the region you are in, and calls between two regions go into the pockets of both according to whatever long distance agreement is in place. That's at least workable. Or you break up an Oil Company that has 500 wells/concessions, into 5 groups of 100 wells/concessions. Or a railroad with a nationwide network, split up into 5 regional networks. That could work, too. That's what we did in the past to break up monopolies.
Now how would that work with google search? Prevent people in region A from loading a website in region B? Is that what we want? crickets
Sure there is low hanging fruit in terms of divesting -- e.g. no reason to keep a video monopoly like youtube with a search monopoly. I'm all for it. But now you just have two monopolies, and have not solved the problem of lack of competition in either video or search, which is ostensibly what you use to justfy these actions.
In fact the consumer pains with long distance in the wake of the ATT breakup is the reason why the law has changed on anti-trust. Now you must show consumer harm to pass constitutional muster and your proposal has to show consumer benefit. A proposal to break off youtube from google is going to have a hard time passing this test.
So yes, we, get it, we solved the problem of anti-trusts in the past, we don't like google, so We Must Do Something. Except those old anti-trust strategies just wont work against monopolies that have no geographic dimension. That no one is willing to touch that explains why we have a deluge of pleas, none of which contain a single workable proposal.
The problem is not really a monopoly (or at least market dominant position) in one business, it's using that dominant position to gain dominance in other businesses.
So, you split out the obvious things: youtube, search, adwords, media ads, g suite stuff, android + chrome OS, payment/wallet, cloud, some sort of bucket for the rest.
Require FRAND terms when baby Gs work with othet baby Gs and restrict the baby Gs from expanding into other lines of business. There's your actionable plan. It leaves you with a handful of mostly viable businesses that are still pretty dominant, but...
If YouTube has the same relationship with its ad network as any other video site could get, other video sites can have a better chance to compete.
Setting up an Android for people new to the internet won't require creating a gmail account and steer your choice of email providers, etc.
Geographic splits don't really make sense for Google. And really, I'm not sure it did for AT&T, except that local vs long distance was a useful split, and I don't know that a nationwide local phone company that can't connect long distance calls would make sense. We certainly didn't get competitive local residential phone service by breaking up AT&T. The telecom act of 1996 came closer to giving us that, until the FCC decided it didn't care.
However I don't think this will solve the issues raised in the original article or the general issues with monopoly.
People used to think that Microsoft had an unfair monopoly with its browser because of bundling. Well, Chrome took over market share pretty easily when it released something better. It turns out it wasn't bundling, but investing more dev resources than the competitor that made the difference. And you can do that if you have surplus profits from a monopoly. It is those profits that allow for more resources that make the difference, not any consumer-facing bundling problems.
So even if you completely eliminate the bundling, you'll still have a situation where off-shoot products by monopolies outcompete other self-funded products. Now, you have to complain not about bundling, but about subsidies -- basically making it illegal for the monopoly to branch out into another business, because all tech investment starts out as subsidies. But now you are really hurting innovation, because a large part -- I would say a large majority -- of innovation happens as subsidized R&D performed by monopolies. From the invention of C at Bell Labs to Android at Google. These are all side projects afforded to monopolies but not to private investors, who would never invest in such things. Thus no standard of consumer harm will result in making this illegal.
So you say, OK, we wont ban a firm from creating other products but we will ban it from purchasing companies. So that takes care of Youtube and Adwords, but not android, office, etc. But now if the monopoly has surplus profits, it has an edge at making competing products and outcompeting smaller incumbents. Yes, it's harder than just buying them, but you have not fundamentally changed the landscape. It's an improvement, yes, but only a marginal improvement.
It's really a tough call, and not at all the same thing as the previous US push on anti-trust, which was conceptually much simpler until you had the ill-advised ATT breakup, which showed the limits of the old approach. Merely longing for the old days of anti-trust in which we were busting up Standard Oil doesn't address any of the reasons why we have moved past that period.
It certainly didn't hurt that they promoted the hell out of it on all of their market dominant properties. (As well as the, then common, practice of paying to have it included it in freeware downloads of all kinds; which to your point is more subsidy than anything else)
I can see your point about R&D. When a company is more profitable/less competitive, there is an ability to do more of the open ended research that can lead to great things that aren't closely related to the company business. But does that justify the lack of competition that results? The consumer harm is difficult to quantify, of course, because consumers are generally not paying in dollars for these services; but maybe search competition would result in fewer ads and a more clear separation between ads and found content, which may be more useful. You could also consider that to some degree, advertising costs drive up the price of goods sold through those ads, and therefore the lack of competition in ads may cause consumer harm in that way (but, of course that's a tenuous argument, a lot of companies will spend their ad budget regardless)
Imagine your consuming history on Amazon in a company by itself, you own dividend-paying shares, and if you don't like their policies, you can take the data elsewhere, or keep it private.
Anyone who wants to use it, including "Amazon" itself, has to pay Amazon Data for it, and they can only use it for approved purposes, all public.
The history of the Internet in FAANG becomes a regulated asset, like a power plant. The "free market" would make much better use of all this data than FAANG itself does now. They are bloated bureaucracies who don't even realize what they have.
Would FAANG scream? Sure, but they would own massive (but not controlling) shares of the FAANG Data companies, so as Larry Page says in my "interview" it works out well for them, too.
[1] https://issuu.com/stanfordchaparral/docs/parody_119_3-4/17
So it is with a heavy heart that I similarly always find myself deeply concerned by the security implications of such a world. As soon as you create data import and export functions, we will collectively realize that most people both have absolutely no idea how to handle it and are incredibly resistant to education on the subject. A lot of well-meaning ordinary people are going to get hurt when they get tricked into mishandling their data. There's already a sizable black market for personal data, and increasing transparency and access is going to grow that by both providing more ways to access data and more ways to use it.
I don't know a good way to reconcile these two. The tension hurts my heart.
If it does not exist it does not need to be ported.
A piece of data which has been put somewhere is there forever. It cannot be moved, only copied.
And we should disincentivize data collection by making it worthless or costly, so only the strict minimum to make something work is collected.
edit: and having a central place where companies can request personal data is to be avoided: it should be hard to know where to find someone's data.
Instauring data dividends would risk encouraging people to share personal data because it could benefit them financially, and that we probably want to avoid as well.
I focused on getting data out of the FAANG Data companies. There would equally be regulations on getting it in. If you want to outlaw face recognition, you would make it illegal to add any data about facial characteristics. Or political affiliations, or porn history, etc. etc.
I think that's it exactly. I suspect HIPAA is a model for this, although not a perfect one. It's like holding health data on large numbers of people -- you need to be registered & bonded, and you have to control access to it. Why is data on your friends & political beliefs any less sensitive than your health?
I hope no one thinks I have a whole manual of how this would operate. That would be the result of a large group saying "This sounds interesting. Let's try to flesh it out."
On the other hand, as I said: breaking up Ma Bell took 14 years. Just saying "break up Big Tech" doesn't answer all the questions, either.
Anyhow, in the spirit of HN working this out together (should we form a bipartisan Working Group for this?):
Any data which, taken together, improperly identifies an individual may not be stored at all. I can't think of any reason why anyone outside of law enforcement needs this location information.
How's that?
> I don't understand this; can you explain?
handrous expressed my point better than me an hour ago [1] but I'll try to give an answer: I think we should focus on limiting data production / collection altogether rather than try to address data portability (re-using the term used in the first sentence of my parent comment).
I agree that we could do both (limiting data production and move data elsewhere / regulate its usage). But I'm not quite sure the problem (privacy) is solved by just moving the data out from its direct users, even as a first step. The data is still "out there" and it's a liability. Your "Amazon Data" can be compromised, receive government requests and pieces of data requested by a FAANG company might as well be forever at this FAANG company as far as your guarantees of privacy are concerned. I see pieces of data as "tainting" those who access them [3]: as soon as someone accesses them, you can't rely on them forgetting these pieces of data. These pieces of data are no longer things you can rely on them not having.
I can see that splitting Amazon in two parts "Amazon Data User" and "Amazon Data Provider" and forcing the former to pay the latter may disincentivize "Amazon Data User" to use your data too much, but it incentivizes "Amazon Data Provider" to sell it so I'm not quite sure where it leads. I also can't see "Amazon Data Provider" as working as an autonomous entity, so I'm not sure splitting quite makes sense.
To be honest, I fail to understand this solution, to be convinced that it may work. (I'm not dismissing your idea, I'm curious and want to understand more!)
edit: I'm all for some kind of HIPPA-like regulation as discussed in [2] however. Do you have an idea on how it would compare to the GDPR?
[1] https://news.ycombinator.com/item?id=28881937
[2] https://news.ycombinator.com/item?id=28882352
[3] not unlike people who have read the source code of Windows cannot contribute to Wine because they are "tainted" forever.
> "I can see that splitting Amazon in two parts "Amazon Data User" and "Amazon Data Provider" and forcing the former to pay the latter may disincentivize "Amazon Data User" to use your data too much, but it incentivizes "Amazon Data Provider" to sell it so I'm not quite sure where it leads. I also can't see "Amazon Data Provider" as working as an autonomous entity, so I'm not sure splitting quite makes sense."
Right now you have credit reporting companies (which are hardly a model of right-thinking behavior, btw), but don't they show that it's at least financially possible to split the data away from the data users (banks, lenders)?
So I don't think the money objection holds up. A bank right now might like to run ML on every credit card holder in the U.S., but that would either be impossible (Equifax just won't give it to them), or ruinously expensive. So Amazon Data User just won't be able to do all the analysis they do now, or at least they'll be more parsimonious about it.
Now, for the "taint" argument: rules like in legal discovery would have to apply. Amazon Data User has to swear that they don't have the data anymore, and we would rely on whistleblowers, subpoenas, and criminal penalties to enforce it. The fact that Jeff Bezos would go to jail ought to be enough incentive for Jeff to make sure it's gone.
If your argument is "this would be complicated!" I'd say "compared to what? the 14-year case against AT&T? the case against Microsoft, which ended in no breakup?" Do you really think a breakup of FAANG would be any simpler?
I spent several years at Google working with ads data. By far most of my work was with anonymous & aggregated data. In my proposal, that work, too, would require a license from the Data company, and the owners of that data would share in the profits from it.
I don't like this as well, but it's pretty alright.
They get to do all of it because they managed to capture the upper class of consumers.
As stated in the review, and presumably in the book: that "the very bigness of present-day companies — especially those in the tech sector — does not just harm consumers, but that it also threatens innovation and undermines the power of government."
The problem that trust-busting is meant to solve is the bigness, and its impact on the government, innovation, and consumer markets.
It's up to the book to make that case. My point is that the issues you describe (misinformation, polarization, engagement baiting, objectionable content) are not mentioned among the problems that trust-busting is meant to solve. Other problems are mentioned.
Look at WhatsApp, founded by an idealistic person whose product was shaped by his experience living under an oppressive government and who succeeded wildly under those values. But no one is going to turn down 14 billion dollars, so it gets absorbed and starts to slowly adopt the same scummy values of Facebook. That purchase clearly shouldn’t have been approved.
It reduces the influence that a monolithic Facebook can bring to bear against its critics in Congress.
It also puts existential risk on the table. Fining Facebook out of existence is, presently, political suicide. Not only does it hit a massive slice of the electorate, it leaves them with no alternative.
Shutting down one of several social media platforms, on the other hand, where user data is given a chance to migrate prior to the servers being turned off (but after shareholders have been wiped out), isn't out of the question.
Would encourage anyone thinking like this to pause and consider if this reaction is coming from a place of reason or a sense that they are coming for our team.
If Mark Zuckerberg is the person you trust to protect your rights over our elected government, you've traded freedom for security and will likely get neither. Congress would love to pass laws restricting what people say on Facebook. Unfortunately, it can't because of the First Amendment. Facebook, on the other hand, is legally unconstrained.
More pointedly, Facebook is fine if Congress tries to regulate speech on its platform. It can point to D.C. and take the blame off its back. What Facebook is not fine with is Congress regulating all the other parts of its organization that it would rather remain hidden. In case it needs to be said, those parts aren't working in your interest.
The only hard part is getting a majority of people to think that's a good idea, or at least to stay silent about it. If you look at history, though, it's actually not so hard. It'll probably happen eventually, although depending on your belief system, you might be upset at the administration that ends up with those abilities.
This isn't about that, it's about allowing more room for competitors in the market. If there's any relation, it would be that facebook wouldn't be able to by itself dictate acceptable speech (against its will, of course; if facebook had its way, it would only censor posts about facebook.)
> How does breaking up Facebook help fight misinformation, polarization, engagement baiting, objectionable content, etc?
Generation Z is almost entirely on TikTok so Facebook/Instagram doesn't have a monopoly on them.
Apple and Google completely control their app stores on their respective platforms.
That means that reaching mobile users means dealing with either both of those two, or (if you want to brave the PWA nightmare, especially on Apple), telco gatekeepers to send notifications to your users (note the new 10DLC requirements and massive fines/fees if you simply want to send SMS notifications to your users)
These are absolutely trusts. They are cartels that control access to their networks.
Not that G/FB controlling most of the ad space isn't concerning, but G/Apple are actually the ones that are the gatekeepers for any other apps that would present mobile ad alternatives.
You want to do something new and interesting in the ad space -- or in any mobile space? Nope. You can't, unless both Google and Apple approve your app.
Google and Apple are killing innovation through their arbitrary, capricious, and selectively enforced app store "guidelines", and their excessive tax on any purchase, regardless of the purpose.
You don't get to bundle a friend list with a news feed with a messaging service, without an option for me to only consume one part of it, or a combination of my own choosing.
You don't get to bundle your political opinion in my search algorithm the same way you don't get to bundle surprise ingredients into my cookies. You get to provide the search service, you get to provide cookies, you don't get to provide magic cookies I don't understand or can make on my own with a bit of effort.
Your service is efficiency at scale, not arbitrary shit bundled with everything because of a power imbalance.
Arguing for trust-busting to solve our problems to me sounds like arguing for a return to artisanal-craftsmanship when faced with the negative effects of modern capitalism. The issues may be identified correctly, the solution is anachronistic and going into the wrong direction.
Instead of attempting to returning to some anarchy of an idealized free-market and opposing large corporations and government, which effectively just means you're going to be sidelined and irrelevant, the goal needs to be to figure out how these big tech mega-structures can be aligned with the interests of the public.
Google isn't a robber baron, the analogies just fail. The only thing they're robbing are other industry oligarchs while users get everything for free.
Google partially remains a search monopoly because of its search patents - of which it has many. If the state invalidates its patents and then moves out of the way, other competitors will naturally become successful.
There is no need to break up companies. Just take away some of their state-imposed advantages like patents.
According to this piece on Google's patent strategy, big tech benefits when the value of patents decreases anyway, which cuts against your argument[0].
Google gets pretty much everything it wants anyway, the gist of this piece is that individual patent holders that sue tech companies get a lot more value out of patents than the big companies do. Big companies benefit as the value of patents decrease, which is what you're calling for here.
One huge reason for this is the network effect advantages that big tech companies have. Anyone can build a Facebook clone that copies most of the primary functionality, but it'll never gain traction because why would anyone leave the already-established social media network? All of their friends are already on there.
In Google's case, numerous search engine alternatives have existed for years and yet Google remains pretty strong. I cannot find a case of Google asserting patent authority over a competing search engine, which tells me that it's doing just fine maintaining it's hold over the search market "naturally".
Consumer technology use is notoriously habitual and cannot achieve market equilibrium when patents are removed. Sorry, but this is an oversimplified argument that doesn't reflect how Google's technology functions in the search market.
0: https://www.ipwatchdog.com/2018/03/21/how-google-and-big-tec...
I don't see how that is separate from "trust busting", but rather just another way to bust trusts?
Thanks for that clarification!
Or audio with full transcript:
https://www.preposterousuniverse.com/podcast/2019/10/21/69-c...
The expansion of monopolies into adjacent and related markets is driven by leveraging the existing monopoly to monopolize new markets, which is already within the scope of acts addressed by traditional anti-trust (whether or not one views it as enabled by “network effects” or “feedback loops”), though regulators have been ineffective at addressing it in the internet space. This isn't a defect in traditional anti-trust law, but in anti-trust enforcement.
But for Facebook I don’t see how it can be broken down. Instagram, Whatsapp, and Messenger, Facebook’s three big children, are not really separate lines of business from Facebook itself. This isn’t due to defects in anti-trust laws or their enforcements. Capitalism itself just isn’t made for the wide-reaching and feedback-loop-y industry that is social media.
2+ competing Facebook's have a lot more deniability, they have less budget to pay for things like moderating or anti-fake-news and they have all the more incentive to engage in exactly the sort of clickbait we want to escape.
I am concerned that "we have to do something and this is something"...
Then the DOJ set sights on Microsoft, but they avoided it.
I wonder what Teddy Roosevelt would think about Google, Twitter, Amazon, Google having so much money and power?
I think Amazon is a different animal, and probably a different conversation. So...
How has Facebook's market penetration harmed you?
Absolutely. The fact that the government's power is being subverted should not be lost going forward with any related discussions. Along the same lines, The Media's status quo is also being banged up. These well established power bases aren't going to surrender without doing battle.
Mind you, I'm not defending Big Tech. Having recently read the robust and extremely thorough "The Age of Surveillance Capitalism" I'd be foolish to pick sides.
https://www.wnycstudios.org/podcasts/otm/segments/living-und...
The arc of the point is, viewing current events with a 20th Century lens is foolish at best. There is a lot going on. Some of it obvious, but far more is covert / stealth.
But there is something to be learned from continuing to read after off-putting hooks, including that the author might have something genuine to say beyond just looping in people that agree with them with inflammatory hooks.
And I know my comment will get buried but I am going to keep saying it. Just like I talked about remote work for years and had those comments downvoted before it suddenly became globally popular.
After that the sharding upgrade + Layer 2 systems (available right now) will boost performance to 100,000 transactions per second.
The problem is they are marketplaces (for information, goods or ads) where they compete in the same space that they own, and they own most of that space as private for profit companies when what they are doing is more like a public utility at this point. But one that completely takes advantage.
What we can do is build platforms to replace them that are actually public using decentralized technologies. For example, much (of course not all) of what Amazon does is connecting people to a very large database of products and making it convenient to buy them.
We could replace that with cryptocurrency and a distributed database or something similar. Such as Ethereum and IPFS or OrbitDB and some related trchnologies. Not saying it's easy or there aren't technical challenges, but they are not insurmountable and the benefits are obvious.
There are open decentralized networks like SSB or Matrix, and a few peer-to-peer ones that may ultimately work out better.
For search and advertising, look at things like YaCy as a potential starting point. But really we have no reason not to explore new and existing distributed protocols for search and information exchange other than sheer laziness. And there is a fair amount of really useful research. But we are lazy.
"Breaking up" Facebook/Instagram is like going for a dinosaur hunt. The FB platforms are already dying.
Healthy capitalism requires antitrust regulation for the same reason football requires referees.
Interpretation 1: Any regulation = communism
Interpretation 2: Communism is a good thing, even given all evidence to the contrary.
Interpretation 3: ... ?
Can you help me out here please?
Personally I think that would be awesome. Imagine if every town, city, and borough of very large cities had their own independent social network or networks.
That's interesting. It opens the door to the possibility that social networks might pay people to leave, in order to open spaces for more long-term-valuable customers.
As for when a technology become good? There are a lot of possible criteria, but that doesn't really matter we can come up with a fuzzy cut off and any transparent criteria for it would be preferrable to the current state.