Comment by Jerry2 | Hacker News Reader

Comment by Jerry2 | Hacker News Reader

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I find it sad that all this is coming from state AGs and not from the DOJ and FTC. It just shows how corrupt our federal institutions are due to regulatory capture [1].

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/

[4] https://archive.md/74r5F

[5] https://www.theregister.com/2016/08/18/google_had_obamas_ear...

[6] https://www.wsj.com/articles/google-makes-most-of-close-ties...

The DOJ has a lawsuit against Google in the works, it's even mentioned in the article. [[I'm hesitant to provide a citation as I'm not sure of the latest source]]

Also aside from corruption and capture, there are external forces.

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.

> 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 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.

When a service has a little asterisk that singles out some states they dont operate, its not necessarily because of a specific law, it can be in response to specific regulatory action against that service that they opted not to deal with

So? Do nothing and let the current monopoly get stronger?

I think it is a safe bet that there will always be new monopolies developing. There are always new markets, and benefits often don't scale linearly with growth.

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.

Shouldn't the DOJ not be concerned with the economic impact? Isn't their objective Justice not Economic Prosperity?

In the US, they are concerned with economic impact, they do a whole in-depth economic cost/benefit analysis as part of determining if it's worth breaking up a monopolist. Whatever 'justice' means in this scenario seems highly subjective. If a monopolist was providing by far the best/cheapest goods and services, more people might prefer that scenario to an alternative competitive market with less benefit on average.

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.

That sounds rational, but it's not. There's nobody, public or private sector, nobody at all that can make a real economic assessment of the value of a service line Facebook or Google. Those who claim otherwise are stupid, lying, or selling something. Markets and economics are unpredictable systems that have nothing to do with models of rational actors behaving in their own self interest. They're fundamentally extensions of chaotic biological systems and inherently resistant to oracles as a matter of mathematical reality.

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.

I think the difficulties/uncertainties you mention here are a large factor in the feds reluctance to break up monopolies. I have no personal opinion on these methods without taking a much deeper dive into the details. It does seem like the big breakup of Ma Bell worked out well, though.

The statement "everyone is accountable to the same rules to the same degree" could be either pro- or anti- federal action.

> I think it is a safe bet that there will always be new monopolies developing. There are always new markets, and benefits often don't scale linearly with growth.

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.

https://en.wikipedia.org/wiki/Natural_monopoly

This tech stuff isn't a natural monopoly.

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.

I would argue it basically is because the high fixed costs are from paying the developers to write and maintain good competitive software and the marginal cost of each new user is basically free.

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."

The traditional definition wasn't really contemplating software, because the important thing that makes it a natural monopoly is that building a second one would cause the user to have to pay a lot more. If you have one power grid, it costs a billion dollars to operate, so the average user has to pay $1B/N where N is the number of users on the grid. If you have two power grids, now the average user has to pay $2B/N, which is twice as much, and most importantly, is a large difference.

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.

They just try to make their stance clear that they want competition to be more organic than whatever they are reacting to. Monopolies arent prohibited, anti-competitive practices are sanctionable.

During Obama it didn't seem like the problem it is today.

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.

You lived in a bubble, nobody wanted to be Zuck in my circles and he was mocked ruthlessly for how out of touch and selfish he was. His comment about becoming president was seen to reinforce that. Facebook was also widely seen as rapidly becoming the place for drama and vapid political commentary. This was ... college during 2008, so not exactly last year.

Yes, no one I knew wanted to be zuck.

But I'm surprised you could find much drama or political commentary through all the app spam of the late 00's in Facebook.

Same here, so many of us have been eagerly waiting for this bs to unfurl for a very long time now.

>During Obama it didn't seem like the problem it is today.

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.

I was there in DC with Google from 2006-2012, and I think that's a fair view. We got asked if we could help, and wanted to help, so we tried where we could. Of course now everyone just wants to paint everything with malicious and negative intent so I'm sure someone will in response, but it really was just a bunch of smart techies trying to help.

(Can't speak generally to zuck, but at least from what I saw people didn't really view Facebook and zuck the same way)

> During Obama it didn't seem like the problem it is today.

> 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.

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