U.S. states file updated antitrust complaint against Google
reuters.com
reuters.com
Apple's App Store insider knowledge lets them discover popular apps, then boot them off the platform when they decide to compete. Amazon sees what products are successful and profitable, then makes knock-offs which they promote over the originals. And now, reading into this, Google is manipulating their ad markets using inside knowledge.
It's all very profitable.
If we cannot trust large companies to not abuse this kind of power, then they should be prevented by law from playing both sides. This may result in the breakup of some very large companies, akin to the 1934 Air Mail Act that broke up Boeing.
Why is it bad? Especially bad enough to be regulated by a new law?
https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.p...
And it's not exactly new. Common carrier regulations have been a thing forever.
Antitrust law doesn't come into effect just because something is bad in the abstract sense though, it comes into effect when there is harm to the consumer as a result (that's my understanding anyway). The harm here is due to the market distortion primarily (I would think).
In such a situation you would see a degradation of store product quality vs price. It might not be so clear with internet search because Google’s ascendence was coincident with innovation that it has hoovered up. But once you see competition restored, with things like the return of a Search API, or of more transparent ranking metrics, or of customizable ranking algorithms then you will begin to see what you are missing.
I’m assuming they are less than that with regards to the advertisement market (I’m not super familiar with the space, but as I understand Facebook is a huge player there as well).
If search wasn't profitable then ads in search and SEO wouldn't exist.
This is the wrong way to think about it. How much would _Google_ be willing to pay to maintain that position? Well, Mozilla's primary source of revenue, is afaik, from having Google as the default search engine, so at least that much, for whatever percent of the browser market-share.
The vast majority of web users have their eyes and attention directly guided by one of these [0]. If they decide you do not exist, then you will effectively cease existing for billions of people on the web because they do not know a web outside of Google/YouTube or the Facebook ecosystem.
[0] https://staltz.com/the-web-began-dying-in-2014-heres-how.htm...
The big tech companies have a much higher market share. For phone app makers, the App Store is the only point of access to the majority of affluent Americans; Google controls access to the rest of the 1st world population (sideloading is possible on Android but 99.9% of normies won't use your app if it's not on the store). Amazon does have competitors and you can also run your own e-shop, but they are the gatekeepers for a large portion of the online sales market - getting kicked off of Amazon is going to hurt bad for any online retailer. Of course getting kicked out of Walmart is also bad, but there are lots of competitors that lots of people use (grocery stores which have regional chains as well as smaller local chains, Target, Costco, Amazon, etc.).
Which leads into the second point - Apple has a long history of integrating cool features/apps into their OS and then kicking out the original creator from the app store. This destroys the creator / original company and basically transfers the idea's profits to Apple. Retail stores and Amazon do make knockoffs, but generally the original product is still sold alongside it. In many cases the branded product is superior to the generic product and many people will pay extra for it; in many other cases the brand also supplies the generic label product so that's beneficial for both parties.
To use real figures, Apple has 60% of the mobile operating system market in the US[1], and Google has 40%. Apple's App Store has 100% more revenue than Google's Play Store[2], and the two are responsible for over 99% of all mobile app sales in the US. Both Google and Apple dominate the mobile app payment market in the US, as well, since they both ban all other forms of app payments on their app stores.
[1] https://www.pcmag.com/news/ios-more-popular-in-japan-and-us-...
I think my answer is yesno. It isn't about the action of making and selling the competing products, but about how the internet and FAANG scale changes the customer-business dynamics. Consider that when you browse wares in a physical store like Costco or Walmart, the selection is constrained to what can fit within a building, thus the absolute worthless garbage junk and knockoffs will be culled to make space for less return-prone items ( At Costco, I don't see 5 pages or aisles of identical products listed under different brands that are mechanically indistinguishable from 'kirkland signature' products). Costco also seems to care about counterfeits and whether or not something they sold was found to be bad (this has happened to me, a food item at costco was found to be the source of a few food poisoning cases and was traced back to a single item at costco, and costo went around calling everyone who had that batch on their purchase history to let them know). I've wound up with counterfeit pieces of junk off Amazon that I'm not going to go through the effort of refunding/returning/complaining about, so it's all slippage that AMZN gets away with. Returns and replacements are so fast at brick and mortar stores 5 miles away from home!
when you see brand-name products on a shelf at wal-mart beside their own-brand, it's because wal-mart has purchased that product and is re-selling it. wal-mart has taken the risk of buying the stock in the first place. brands still have a chance to succeed.
when a brand acts as a marketplace, they aren't taking on the risk. they're selling shelf space, not buying things to put on the shelves. when they participate in the marketplace as well as operating it, they are competing with their own customers. that's the behaviour that's essentially a recipe to destroy competition.
Goods on the shelf at stores in general are a mix of items on consignment, the vendor provided the goods and the vendor will be paid only if or when the goods sell; goods that were purchased on net-30 or net-N terms where the goods are delivered but not paid for until 30 (or N) days later; and also some goods that were purchased and paid for before delivery to the store (or store warehouse). Of course, even when the goods aren't on consignment, larger stores often negotiate favorable terms for unsold goods; typically the vendor must refund the store as well as pay for return shipping or disposal. A large amount of risk still falls to the vendor.
Anyway, store brands are fine, IMHO, but there's two things Amazon does that weird me out: a) in some categories they apparently have several store brands and it's not always clear it's an amazon brand, whereas Costco uses a single brand and most other stores use just a couple; b) there have been reports that Amazon will request supplier information from merchants of products that are selling well, and then Amazon goes to those suppliers and negotiates bulk purchases; it seems to me, that's making your merchants do all the work to discover items of interest and where to get them made and then Amazon swoops in and takes over.
Retailers stick their neck out to put an item on the shelf because space is limited. The product is made. It's on the shelf. If it doesn't sell then someone loses money. If Equate brand sucks I can choose an alternative. If everything on the shelf sucks I can go to another store.
in no way is it a "monopoly." If you look at growth rates Amazon is slowing and others are gaining
not to mention the comparison is foolish to begin with as Amazon doesn't have physical locations. a better comparison is total amount of sales, in which Amazon isn't even the plurality.
This is nothing new, as brick and mortar retailers have store brands for popular products as well.
While I'm glad that the move to the internet lets us reevaluate some of the social relations, I have a reeeeaaaaal hard time finding any way that this sort of thing harms consumers.
The analogy seems spurious to me. Do brick and mortar retailers charge other brands for being a market-place ? Don't they actually buy products of other brands ?
I bet there are clauses in those agreements that state that the retailer should "make my brand of ketchup the first brand that customers see" and that they cater to that clause "for a small fee".
Joe's corner store and Walmart work differently, only one negotiates brand deals.
Brick and mortar stores are dealers, Amazon is a broker. Dealers have inventories - they purchase items from the suppliers and resell them - if they misjudge demand, they're left off with useless goods. Brokers simply facilitate a transaction between two parties - there's no risk involved. The fact that brokers get to charge a higher mark-up than dealers is just bizarre
Everything is negotiable. If a retailer has more power than a supplier, then the retailer can demand a guaranteed sale clause in the contract, requiring the supplier to take back unsold goods and refund them.
https://www.comcapfactoring.com/blog/walmart-vendor-financin...
They tend to exist only where there is a huge asymmetry in power between retailer (usually large chains) and suppliers.
Anyways, large chains don't deal exclusively in consignment either.
There's also a matter of the level of dominance that the platform has. Something like half of e-commerce takes place on Amazon; most online ads are via Google; and Apple literally invented the name "App Store".
As for consumer harm, when the market is manipulated to remove competition, we are all harmed. Not today, not directly, but every day after that.
I think that you'll find that most grocery retailers have nearly as large a monopoly inside their geographic area as Amazon does in the retail space.
Amazon doesn’t work like a supermarket: a closer analogy would be a shopping mall also providing cash registers to the stores. Amazon doesn’t buy from the producers nor act as a distributor on most transactions. The risk is all externalized, and they face minimal penalty (no loss of shell space, no stocking risk) by having their product alongside the original one.
I have resorted to using an old school notepad for my development ideas pretty much. A software company I used to work for got shuttered just 3 months after a big software company paid the startup a visit to observe operations back in 98, I've always been wary of corporate espionage since.
Google's engineers are notoriously loose-lipped (which is a good thing!!!). There's no way they would be able to keep a secret like this. Anytime a customer's private data gets accessed, you either a) need approval by someone or b) "break the glass", which is only reserved for oncall fires. Either way, it gets audited.
The only way I would believe something like this is if an executive/higher up requests data access, gets it, and the person auditing looks the other way.
And even if they don't access file or email content, metadata like access data like Play Store performance, Google searches for competing products, and Google Analytics data, might seem like fair game.
And the source for that claim is not even a Google engineer, but apparently somebody who heard how Google engineers are "notoriously loose-lipped".
From which loose-lipped Google engineer did you get that information about "needing approval", "breaking glass" and "audits"?
> The only way I would believe something like this is if an executive/higher up requests data access, gets it, and the person auditing looks the other way.
It's much easier to believe once you remember how Google actually makes its money [0].
In that context it not only becomes believable, but it actually fits perfectly into their MO [1].
[0] https://www.eff.org/deeplinks/2020/03/google-says-it-doesnt-...
[1] https://www.theregister.com/2016/03/09/google_ventures_yield...
Your first link explains how Google doesn't actually give your data to anyone else. Your second link is about a company that Google Ventures invested in. The equivalent would be that some company claims a YC-backed startup stole some of their IP, and that somehow YC is at fault, which is silly. Google isn't even a party to the lawsuit (further, it's not clear that the company who sued even won and to an extent it looks like they might be a patent troll).
> From which loose-lipped Google engineer did you get that information about "needing approval", "breaking glass" and "audits"?
A bunch of it is public: https://cloud.google.com/access-transparency. Access Transparency provides the access logs to the customer, and Access Approvals allows a cloud customer to prevent Google from accessing their data without approval from the company. But yes, you could also go searching HN for discussion of these topics and probably find quite a lot from people.
Nobody said Google "gives data away", the article explains how Google monetizes the data.
> Access Approvals allows a cloud customer to prevent Google from accessing their data without approval from the company
All Access Approval does is prevent individual Google employees from accessing the data, which is not the same as "Google as a whole". It also seems to have a long list of Google services were it does not apply as no AT logs are created or other exceptions apply.
And while that might be nice, it's neither special, nor does it change the nature of Google's business, it's just virtue signaling and building plausible deniability along the lines of "We really do care about privacy! At least in as so far as we don't want to get regulated!"
You know, just like claiming how Google "doesn't give data away", when in reality it very much sells all the useful insights, said data gives, to the highest bidder.
With the scale of surveillance data available to Google, this is how they have their cake and eat it too.
Once you know that note-taking apps (e.g.) are a hugely growing space, it's easy to use publicly available data to find the startups making a splash. Not once did Google's data tell them Startup X is an acquihire target. And yet, here they are at Startup X's door.
If there's no infosec and it's just infra and developers and CTO's signing contracts with vendors, even Google, you have an issue.
Got a source for that?
Look at attempts to prelegislate things which do not really exist yet and you get utter embarrassments of law at best and at worst hamstring your nation by laws which assume that a TI graphing calculator has the potential to go rogue and start deliberately killing people.
https://en.wikipedia.org/wiki/Federal_Analogue_Act
> ...any chemical "substantially similar" to a controlled substance listed in Schedule I or II to be treated as if it were listed in Schedule I
The only way in which your analogy could possibly apply is if you're saying Netflix is free to create its own mobile OS ecosystem where they can impose asymmetric rules and taxes on Apple TV. But it's neither possible nor desirable for every app maker to create their own OS and perhaps even their own hardware.
The definition of "competitive" you seem to be using here is not useful.
That is an option for Netflix. If they made their own platform they could offer a more competitive price.
Apple was created in 1996. Netflix was made in 1997. Maybe a good strategy of having a dominant streaming platform in 202x would have been to launch a mobile platform. Netflix had the same chance as Apple to take that path, but they didn't. Apple can now capitalize on good moves that it made in the past. In chess you can't just recognize that you are in a bad position and then ask a tournament organizer if you can be reset into an equal position again. Either you continue playing that bad position, or you resign.
>But it's neither possible nor desirable for every app maker to create their own OS and perhaps even their own hardware.
If you have no choice but to charge more than your competitors and you can't justify the extra cost with extra features or whatever and people stop using your service and you go bankrupt then you have lost the game.
>The definition of "competitive" you seem to be using here is not useful.
It seems useful to me. It's the basis of what makes this game interesting.
Anyway, Apple began in 1976, not 1996. And by '96 they had both an established hardware brand and decades more expertise than when Netflix launched.
It may be an option for Netflix. It may be an option for Facebook. But it's not an option for 99.999% of app makers and it would be bad for consumers. Very bad. Imagine you had to buy one device per service you're using. I don't want to buy a Netflix device to watch Netflix movies. This is just bonkers.
>It seems useful to me. It's the basis of what makes this game interesting.
No. It's more than just useless. It is a great demonstration of how every ideology becomes insanity if you take it to its extremes.
Then you will just have to live with being disadvantaged to a platform's creator when competing on their platform. They have the home field advantage.
>No. It's more than just useless. It is a great demonstration of how every ideology becomes insanity if you take it to its extremes.
You are the one making it extreme. If you think the strategic decision of developing your own mobile ecosystem is silly then there is always the option to not do it.
There is no rule in this game that it has to be profitable to release stuff on the app store. Apple could just decide one day that third party apps are a security and privacy problem and then remove them all leaving only Apple apps.
But you're wrong about me just having to live with being disadvantaged. Apple is built on top of a platform as well. It's called society. And society makes some rules that govern what advantages platform operators like Apple can enjoy as a benefit of having created a successful platform and what advantages are unfair and/or damaging for consumers. So we'll see about who has to live with what.
I never did that. Take for example the capture the flag game made. Some parts of maps are stronger for one team than the other. That doesn't mean the game is not competitive it just means that it is something you need to take in mind. What I described is a spot on the map where Apple has an advantage.
>But you're wrong about me just having to live with being disadvantaged. Apple is built on top of a platform as well. It's called society.
Sure, but it's with existing base ideas like freedom of association Apple can just not work with Netflix at all.
doesn't even have to be regulation. these companies can do it in good faith but alas, life's not fair.
The Music app which now has a streaming service…
iTunes is not a subscription service like Spotify.
Well, not sold in this case, but given away for free to increase the moat, then banned.
Because if you are only talking about opening a stand and selling your lemonade, then you don't have the same foothold as Apple, Google or Amazon.
Yes, this is the problem. Participating in the market they create is not. If that were true every grocery store that has a bakery, deli, or meat counter is a problem.
They are too big. Monopolistic forces are the problem.
Looking at what’s happening now, Apple and Google are not under scrutiny because of our collective petitioning or votes, it’s solely because of competitors with deep enough pockets to duck it in court.
As a proof of that, there’s no one to fight Facebook so not much effectively changes on that front, despite all the outcry and editorials thrown at them.
Like the government?
If the government is not meeting the demands of the people, we elect a different one (in theory).
Can someone rephrase this and possibly explain like I'm five? I'm not following the mechanics...
- google is basically offering bid shading on both sides of the transaction. (RPO on pub side according to this tweet) - Both dynamically increasing floor to buy NyTimes.com based on the current likely bid - And for buyers increasing/decreasing bid to pay the best 2nd price auction clearing price
which imho is the main problem that should be legislated; you can't own all sides of a transaction AND the pipes. instead of trying to convince a jury of some complicated insider trading monopoly confusing mess.
I guess the claim was that they manipulated where bids were placed based on who had the highest bid. So that if a non Google advertiser was going to win the auction, they removed the second highest bid if it was a Google advertiser s.t. the price paid for the slot dropped (second price auction). So in effect, they maintained a higher payout for pubs when Google programmatic bidders won by dropping the second price floor on non Google-programmatic winners. Thus making more money AND converting people towards programmatic.
I believe their counter argument is that the data they had actually just made programmatic better from the start by predicting these outcomes, no fraud needed
[1] https://www.wsj.com/articles/googles-secret-project-bernanke...
This is a second price auction that we speak of. Every ad company is polled to send no more than two bids. Naturally those would be the two highest bids from thousands that they handle. So let's say that Google first and second bids are G1 and G2, Facebook F1, and F2, some other company C1 and C2 and so on. So if those bids are sorted in descending order it may look like, for example,
A1 > B1 > A2 > C1 > B2 > C2 > ...
That's why it is called "second price" auction. If it was a first price auction, the A1 advertiser would pay A1 bid price, and could save some money by bidding slightly lower, but still more than B1. Neither of these companies know up-front what the other bid will be, but with a second price auction there is no need for it, the A1 advertiser pays the amount of B1 bid.
Same goes for bids G1 and G2, they don't know what other bids will be. It could end up like this:
G1 > G2 > C1 > ...
G'2 > G'1 > C1 > ...Or it could change only what the price is, for example if it ends up like this, the price will lower from G2 to C1
G'1 > C1 > G'2 > ...
The "inflate only the bids belonging advertisers who used the company's Google Ads" is a mixture of G'1 > G'2 > G2 > ... and G'1 > C1 > G1 > ... and that sort of stuff
There is no accumulating money in a pool, keeping it to spending later on something; there is a need for balancing the two effects above, so that the overhaul won't go overboard either way.
The case of C1 > G'1 > G1 > ... is missing from the Reuters snippet. If it is in the lawsuit, it would end up as "secretly forcing the advertisers who used competing ad network to pay more", I guess
- WSJ: "Texas alleges that Google used its access to data from publishers’ ad servers—where more than 90% of large publishers use Google to sell their digital ad space—to guide advertisers toward the price they would have to bid to secure an ad placement."
- This is bid optimization & bid shading no? Both helping buyers place a high enough winning bid. And then also offering bid shading probable. With a second price auction the winning bid clear price is 2nd price + .01 or whatever. All DSPs offer this and use the open market data?
- Next WSJ graph seems like the crux of the insider trading is not really accurate? If all major bidding platforms (dsp's) offer this feature. e.g. it doesn't " unfairly compete against rival ad-buying tools and pay publishers less on its winning bids for ad inventory." ?
- "Google allegedly dropped the second-highest bids"
- So publishers still got paid the highest bid?
- Or maybe see above about bid shading. Maybe this could lower the clearing amount paid to the publisher? E.g. $10, $7, $5 bids. Drop $7, winning price is now $5.01 ?
- "accumulated money into a pool and then spent that money to inflate only the bids belonging advertisers who used the company's Google Ads"
- I don't understand this. The WSJ article also doesn't mention what money is pooled.
> - "Google allegedly dropped the second-highest bids" >> - So publishers still got paid the highest bid?
During the relevant period and until end of 2021, Google is running a second price auction. The highest bid wins and then pays the second highest bid.
If that's the flat out only thing literally happening, I can't think of a reasonable reason that would be in the best interest of the publishers paying google to sell supply side.
it's all jumbled when you control all sides of the auction and infrastructure which is the real problem IMHO.
Maybe I can see a scenario where bid shading is conflated here a bit or at least complicates the scenario.
For instance 'drop' the 2nd bid maybe means placing a lower bid instead of 'deleting' one.
all DSPs have a good sense of what will win the auction and offer bid shading to buyers.
Just trying to think through that line of thought. For instance I buy political ads. Google knows that video inventory X usually sells for $30 CPM, but my settings have $50 CPM max bids because during the election it's hard to get scale sometimes. my DSP would bid shade lower to say $30.01 on that individual impression, and if I happen to be the 2nd price maybe that is 'drop' they are refering too?
IDK i don't think traditional news media reporting here will ever give enough information / they understand enough
You need to realize just one more thing: to ensure that there is no peeking into bids of other networks, the actual code of the auction could be executed on a remote server. But only a naive implementation would ask every ad network client to send all their ad bids to the server; on the other hand having ad networks send only the highest bid would not be enough for a second-price auction...
adx ssp sends 1 bid of $10, even though their next highest internally is $9 mopub ssp or whoever sends 2 bids of $5 and $7
So if nytimes.com is doing a header bid on their own (or even through google's ad serving product - again imho the biggest problem) they don't see the $9 and the clearing price becomes $7.01
I guess it would be a question of contracts. This is beyond what I do so I have no idea what the standard number of bids each SSP sends to a header bidding auction, obviously don't want to send google scale 1 billion lol...
https://ia601404.us.archive.org/8/items/gov.uscourts.nysd.56...
There may be more details in the 3rd amended complaint that was just filed. Has anyone found a copy online.
It would be surprising if anyone could ELI5 the mechanics of Project Bernanke in a HN thread. If they could, the state AGs would probably like to hear from them. :)
"ECPC works by automatically adjusting your manual bids for clicks that seem more or less likely to lead to a sale or conversion on your website"
Of course, it is based on historical data
But you end up having a quite complicated code calculating the auction bid.
I doubt that you could code it easily based on a cursory reading of the About Enhanced CPC page.
Even more futile is guessing what specific details of that code function that project Bernanke optimized, if your only source is the lawsuit doc and newspapers relating it
https://ia601404.us.archive.org/8/items/gov.uscourts.nysd.56...
Judge Castel reminded them that they must produce those documents to the state AGs.
https://ia601404.us.archive.org/8/items/gov.uscourts.nysd.56...
Perhaps this team can benefit from the discovery conducted by the DOJ.
> Google does not want documents produced to the DOJ to be shared with the state AGs.
In 2009 we were finally getting rid of IE and the web browser market was a healthy ecosystem with lots and lots of innovation happening.
Today we are soon back on a browser monoculture with the owner of the most popular product being a company that has enormous interest in killing certain parts of the ecosystem and also has a long history of killing of their own products.
How did it happen? In my opinion: massive abuse of power in two other markets (search and ads) to push their way into browsers as well. (Well, I'm feeling I might have been too generous above: I could add 2 more - video and office tools - by pointing how they selectively make Google Docs and YouTube perform worse in Firefox, being so brazen about it that just changing the headers so that Firefox identifies itself as Chrome makes the problems go away.)
Gist: https://gist.github.com/VictorB/1d0f4ee6dc5ec0d6646e
HN comments at the time: https://news.ycombinator.com/item?id=8606879
I called authorities again earlier this week and they promised to get back to me if they need more evidence.
- The Google engineer's explanation (https://news.ycombinator.com/item?id=8495498) - do you think he was just plain lying?
- The Firefox performance bug he mentioned (https://bugzilla.mozilla.org/show_bug.cgi?id=1087963). Do you think Google engineers went out of their way to search for new performance bugs in Firefox, then figure out how to introduce those bugs in Inbox's code?
- If Google wanted to use Inbox support to hurt competitors, why would they invest engineering resources in making an Inbox app for iOS? Considering that Android vs iOS competition has much more impact on Google's business than Chrome vs Firefox competition (e.g. see how much Google pays to be the default iOS search provider).
Even Microsoft wasn't this dirty with IE, you could always install other browsers.
I'll listen
- when Safari has anyone near the marketshare across all mobile devices as Chrome has on desktop and mobile.
- Apple has spent billions on promoting it
- has intentionally gimped several top ten web properties for other browsers
until then this is a problem for iOS users, including me, not an internet problem.
I get it, Safari is annoying, but lets not compare Apple fleecing their own users (including me) with Google trying to finish off what Microsoft failed to: to kill the open web.
It's not a technical requirement. It's purely policy. Nothing but policy stops others from compiling their own runtimes for iOS.
Sensors are different, you need to access the hardware. Browsers are just general purpose software.
And Microsoft is worst company than apple in browser till today. Their product Skype doesn't even work on Firefox. And in macos you can easily switch firefox but in win11 good luck.
I've started on Firefox before it was Firefox (2003?), then switched to Chrome when Firefox became slow, then switched back to Firefox when something annoyed me about Chrome (I don't even recall what), then switched to Firefox when I wanted more customization (how do I still live without custom tab colors? sigh), then switched to Chrome again because Firefox started to clamp down on extensions/customization and also it was kinda slow again. As far as I can tell, Firefox is currently in really bad shape... but I would switch instantly if I thought it was better.
Google makes the best browser (IMO/so far/for an average user). There only compelling reason for an average user to use a different browser is lack of information.
I bet they're perhaps regretting their witty code name right now.
(I feel compelled to point out that as far as I can tell, there doesn't seem to be a solid consensus that quantitative easing was objectively poor policy under the circumstances; a lot of this discourse apparently fell somewhere in the gray area between good-natured ribbing, vacuous memeing, economics school schisms, and mockery of the ostensible hypocrisy of "fiscally conservative" Republicans).
It says a lot about the quality of public discourse on finance that the debate around QE has mostly been around whether it is inflationary, and not who benefits from this rather peculiar way of dealing with the failure of traditional monetary policy at the zero lower bound.
It seems to me that if antitrust action were taken that really eats into FAANG profits, that industry pay would decline. Not overnight of course, but gradually in real terms. May still rise in nominal terms.
Startups/companies have been forced to raise wages over time to compete with FAANG.
It's this. Apple and Google control the entire mobile software market. They tax it excessively, to the point that they get a 15% to 30% cut of almost every mobile app transaction, and have for decades. If a business can't afford to give up 15% to 30% of their total revenue, forever, then they're effectively prevented from bringing their mobile apps to market. Apple and Google also effectively decide what apps are distributed to the vast majority of Americans, as their app stores are responsible for 99% of all mobile app downloads[1].
It's insane that a duopoly has been allowed to heavily tax and stifle innovation over entire markets in the mobile space for more than a decade now. The entire mobile app, operating systems and payments markets are dominated by two companies, and they're doing everything in their power to remain dominant, at the expense of consumers and healthy, efficient markets.
But a lot of comp in tech is benchmarked against FAANG. Specifically if you are a startup trying to hire top 80th-90th percentile people. If their pay fell, I'm pretty confident the top end of industry pay would as well, despite more competition/productivity. Median pay likely unaffected.
Even when you consider the low marginal cost to produce SaaS and similar, the same is true of any competitor. So you'd expect a highly competitive cloud (e.g.) landscape to be low margin despite low cost to provide.
Looking specifically at Azure, AWS, Google Cloud... They become somewhat of a local monopoly over their customers due to costs of switching. The higher barrier/cost to switching to a competitor, the greater pricing power the company has. Even considering that the first choice has a lot of competition.
Anyway, long story short, I think regulation that enables low cost of switching is inevitable in the longer run. As this provides the most competitive landscape, this highest net benefit to society. Would need to be crafted intelligently though.
Ultimately, prices are not determined by costs, and that applies to the labor market, as well.
[1] https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
There’s gonna be high-fives and cigars for all of the lawyers and lobbyists who have successfully executed on the strategy to spin off the ultra-high-revenue-generating but secretly-ultra-toxic asset into a standalone entity before the heat got turned on. J&J is trying to do this with the whole talc thing but it’s probably too late.
I am totally, totally impressed by Google’s government and legal people. They’ve gotten the company out of almost every mess unscathed, and even done something to erase its most senior executives’ rumored associations with Jeffrey Epstein. It’s truly remarkable. In my ultimate fantasy, they’d be working for the greater good, rather than against it, but alas.
I still remember how Google escaped antitrust enforcement during the Obama presidency. There was a "revolving door" for Google execs and White House officials who would fill positions at both places [2].
When FTC prepared a massive report of Google's antitrust violations [3], the enforcement was quashed as a result of White House lobbying by Google's lobbyists (most of whom worked for the government a year or two prior.) [4]
Lots of emails were released under FOIA showing how (former) Google execs who were at the White House told the FTC not to bring on the lawsuit. [5] [6]
[1] https://en.wikipedia.org/wiki/Regulatory_capture
[2] https://theintercept.com/2016/04/22/googles-remarkably-close...
[3] https://graphics.wsj.com/google-ftc-report/
[5] https://www.theregister.com/2016/08/18/google_had_obamas_ear...
[6] https://www.wsj.com/articles/google-makes-most-of-close-ties...
States really have little leverage, they want competition but could really just wind up completely unserviced as a corporation says bye bye to their irrelevant market.
The feds dont go heavy handed as they have the capability to and massive leverage, but actually debilitating a company could be giving the market to the other remaining companies which from their perspective is worse because they created the monopoly.
It's a complicated, error-prone business, trying to disrupt monopolies effectively in such a way that is actually beneficial to the community. If you think about it, the cost/benefit analysis is based largely on economic predictions which are never that accurate.
It's arguably unjust for the government to handicap specific people, but also unjust for others not to feel like they all have a fair shot to capture the market. Any time people, not fate, are in charge of handicapping some people will think they are getting the shaft.
What would be rational is if we actually endeavored as a society to make sure everyone is accountable to the same rules to the same degree. By using this magical thinking / cost benefit analysis, we're simply incentivizing victory for the best storytelling middleman.
The statement "everyone is accountable to the same rules to the same degree" could be either pro- or anti- federal action.
Find a monopoly and you'll probably find a regulation propping it up.
For many of these tech companies it's DMCA 1201 and other things that prohibit adversarial interoperability.
If you have a law that lets you boot competitors out of adjacent markets once you have dominance in one of them, you take over the other one too. Then nobody can compete with you unless they can replace you in both markets, meanwhile you enter a third.
The first thing we need is to get rid of such laws.
The defining characteristic of a natural monopoly is that customer is paying a large amount per unit to cover costs that stay the same no matter the amount of usage. The per-unit cost for most of this tech stuff is approximately zero, and the ones that aren't zero (e.g. semiconductor manufacturing) have significant unit production costs and are not a natural monopoly either.
It's also questionable whether even "natural monopolies" would be monopolies absent regulation. It's more efficient to have a single power grid, but if there was no law granting a statutory monopoly to a single provider and the existing provider became abusive, somebody would build a parallel power grid. Because having two would cost twice as much as having one, but that's still less than paying five times as much to an unrestrained monopolist. So the result of unregulated "natural monopoly" still isn't a monopoly, it's just competition which is unusually inefficient.
That exactly matches wiki: "A natural monopoly has a high fixed cost for a product that does not depend on output, but its marginal cost of producing one more good is roughly constant, and small."
With software, there are so many users that the difference between $X/N and $2X/N is still ~zero. You can have two providers, or ten, and you're in no danger of them being unable to recover their development costs even at low prices. The cost of paying a number that rounds to zero twice is well worth the benefits of competition.
In other words, the barriers to entry are low (absent some artificial constraint). It isn't that the fixed costs are high, they're only "high" relative to the essentially non-existent unit cost. That's totally different. It means that if you want to enter the market for email clients or messaging apps or phone games, that can be done by an individual or a small business. A small business can't build their own power grid.
The state of Texas has a GDP similar to that of Canada, the state of New York to that of Russia, the state of California to that of France. Are these irrelevant markets? Even Vermont, all the way at the bottom, is beating out El Salvador, Honduras, Haiti, etc.
Also note that multiple states are joining together in the same suit.
Even if a corporation was willing to abandon an entire state over this, then all the people in that state would need something else, and that something else would become big enough for third parties to have to care about it and thereby become a viable competitor everywhere. Which might just be the best thing that could happen.
I'm not saying it wasen't a problem, but America thought these FANG companies were solving our problems.
I never liked Google Executives going to the White House, but I don't think it was because Obama sold out. Tech was very new. Google honestly wanted to help.
It seemed like every young guy wanted to be Zuck. Hell even Zuck thought he could run for president one day.
It was all so inspiring. Now it's just ugly.
But I'm surprised you could find much drama or political commentary through all the app spam of the late 00's in Facebook.
(Can't speak generally to zuck, but at least from what I saw people didn't really view Facebook and zuck the same way)
> I'm not saying it wasen't a problem, but America thought these FANG companies were solving our problems.
You are unintentionally projecting what you believed to be the truth, thinking that others also believed the same as you. I can assure you that not all of America thought those FANG companies were solving our problems.
The career antitrust officials at FTC thought Google should be prosecuted, but the political appointees (of both parties) that control the agency shut down their investigation.
>The investigators, who handed the document to the five FTC commissioners who would decide whether to launch an antitrust suit, found in 2012 that the search company's "conduct has resulted -- and will result -- in real harm to consumers and to innovation in the online search and advertising markets."
https://www.cnet.com/tech/services-and-software/google-cause...
Meanwhile, the EU proceeded with their own antitrust investigation into many of the same issues and Google was found to be guilty.
For example, in the linked article (https://www.reuters.com/technology/dozens-us-states-sue-goog...),
"The states want the consumers to get their money back. They also called for civil penalties and a court-imposed monitor to ensure Google eases the process for consumers, app developers and smartphone makers to use or promote alternatives to the Play Store and the official payment system for 20 years. In addition, the states seek to stop Google's payments to Samsung and developers."
> accuses Google of using monopolistic and coercive tactics with advertisers in its efforts to dominate and drive out competition in online advertising.
https://storage.courtlistener.com/recap/gov.uscourts.nysd.56...
Abusing your (near) monopoly position to drive out competition is illegal.
Yes, but it happens so often with so little attention paid that stories like this more often make me think a politician is looking for election funding rather than trying to enforce the law.
How about app stores implementing "privacy dashboards" where you can see what data an app collects and how it uses it? With the idea that app makers become more careful in what they do because it becomes so obvious. That's a result of the GDPR.
Things take a while when the law is designed for not being used as a ban hammer but to coerce better behavior. The DPAs are mostly working in the background to get actors into compliance. Every time you see a lawsuit over such things, a multi-year process broke down to the point where that's the last recourse.
It seems interesting that "Old Media" is coming off unscathed and the ire is all directed at "New Media".
Do you have examples, I’m aware of a few examples where Apple built features in that used to be 3rd party apps. But kick them off?
I'm even more sure there was something going on even more recently with a third party apple watch keyboard for blind or something who got booted because "they abused accessible features" or something that had never been a problem before, and it so happened that Apple had a solution ready on their own launch a few days later.
Google’s actions here systematically undermine auctions to their direct financial benefit, while delivering sub-optimal results for advertisers. In a way that is not an accident, but deliberately engineered and even given snappy project names that allude to the exact purpose of the deception. A better comparison is how certain banks were found to be reordering transactions to maximise the number of overdraft fees owed.
Apple only have a handful of apps and of those fewer are paid apps (they’re the pro-level tools). To claim that apple uses its knowledge of the store to make app duplications, then boot the original concepts off the store is plainly false.
An example given below by another reader is talking (I believe) about a company called Luna which produces a dongle that allows the mac to share their screen onto an iPad. Apple has always had this feature through the screen sharing service (I did the same, without a dongle, using VLC on a gen 1 iPad, long before Luna had a product - thus the feature is arguably obvious.) Over the years Apple have increased the functionality and ease of use of the screensharing features as their hardware has become more capable of running them - including the latest macos update which expanded these features further. Luna however feels they should have a monopoly on any screensharing functions with their dongle hardware. I’m yet to hear a convincing argument from this developer.
I think the core issue is that the app store is large and invariably any changes Apple make to their own software can be tenuously attributed as copying of some random title on the app store. Common-sense arguments such as: apple don’t charge for the feature, the feature is obvious, or the feature is merely an enhancement of an existing feature, are readily discounted in favour of depictions of an evil mastermind preying on utterly tiny revenue sources.
An interesting detail instead arises from the other cases. The one case Google apparently WANTS to settle out of court is the case on the use of data!
Now, this should tell the careful reader quite a bit about what Google thinks is really important here.
Generally, companies want to settle out of court in order to bring a case to a defined conclusion and limit future liabilities. Along that vein, it's not an accident that this case is now news after the judgement in the EU.
Even not signed into an account, which, I don't sign in to any Google services at work in interest of protecting IP, Google was able to track enough via cookies / me being on an si corp network to throw that to me.
[1] Pic I took on my phone: https://i.imgur.com/7X7ybUv.jpeg
> "ISTR that only works from the USA."
I guess that the simplest solution is to forbid Google from being in the ad exchange business. Take down AdX and most of the monopolizing effects they have on the ecosystem would be dampened.
No one is blaming tech for debt or financial ruin.
It is a serious point. Protecting advertising companies from each other is a perplexing choice of resource allocation given the alternatives.
I don't like taxing so I would never advocate for taxing a person or a company.
Coincidentally, around the same time big tech came into being, the nation that birthed, nurtured, and protected them started losing its world dominance to rival sovereignties that took the opposite approach in dealing with these generous givers by monitoring their behaviour, limiting their power and influence over the nation and its citizens, enforcing compliance with national policy (for good or bad), and extracting a fair share of the profits in return for their use of public infrastructure.
The US had a little moment of time where it was the dominant power. It wasn't the dominant power in 1900 and it won't be in 2050. The idea that the decline is because of Google etc defies a much simpler explanation. As soon as China moved off of straight communism they were bound for dominance due to their population and general work ethic. There is no reason that over the long term China should have lower GDP per person than the US. Hence they'll have about 4x the total GDP and be able to spend 4x as much on military due to their 4x population size v US.
It's not free when you are the product being sold.
The AG should be doing this and the appropriate people should be doing their jobs to improve education and medicine as well.