Has that ever been true? Every instance I know of monopolies being broken up has been good for customers.
1970’s Airline breakups were very beneficial to customers with lower prices and more routes popping up virtually overnight (though read “Hard Landing” if you want a more nuanced take), 1980’s AT&T breakup was somewhat beneficial in that long distance and cell rates went down but local rates went up (see “The Deal of the Century”), 1990’s California Energy breakups were basically a net negative for customers allowing energy market speculation and manipulation (“Smartest Guys in the Room”), and in a handful of examples like the Soviet Union or South Africa, deregulation lead to outright collapse of essential sectors in banking, agriculture, and energy and set society/customers back decades (“Sale of the Century”/“After the Party”).
There's no "always" here, the world is not that simple.
Breaking up a large company is often going to be good for some sets of customers, bad for others.
Isn't that caused by the "last mile" problem? Even with the split there was always only one company in control of local infrastructure and from what I understand they could even block newcomers from installing their own, citing concerns over possible service interuptions and various kinds of interference. I think Google Fibre even went through several experimental ways to get its infrastructure in place just so it could avoid dealing with any of that.
They didn’t want the Civil Aeronautics Board dismantled because it protected their monopolies over routes and guaranteed income, and they feared new entrants would disrupt their control.
So, while the airlines weren’t formally ‘broken up,’ the airline business, the route monopolies, and CAB were which directly led to the dissolution of companies like Eastern and Pan Am, and the creation or expansion of new entrants like Frontier, JetBlue, and Southwest which were previously prohibited from competing in these markets.
[1] https://www.bts.gov/air-fares
(edit) I said 'DOT' when I meant 'BTS' Bureau of transportation Statistics
this is all gov regulation
Looking at 1995 prices is not relevant to the question: those are post deregulation prices
That sounds more like due to corruption. Also we are talking about breakups not deregulation.
In a way they were breakups, in the USSR at least, since all almost all sectors of the economy were fully controlled by government monopolies.
I wouldn’t be surprised at all if some divisions of a a company like Stellantis have significantly more autonomy than any of the car companies in the USSR.
Could consumers goods companies adapt to consumer demand by freely increasing/decreasing production? Production targets were still a thing, weren’t they?
e.g. if the production target for the Lada factory was 1000 cars and they were allocated enough supplies for that (but there was enough demand so that 10000 could be sold profitably in the same period) would they be able to freely scale demand or would they be stuck with plan enforced on them by the central “corporate” office?
Again, plenty of modern companies have more control of their production targets, pricing, expansion etc. while being subsidiaries of major corporations than most Soviet “companies” generally did.
You literally named one of the most successful sectors of economy in ex-USSR. Banking sector in most former republics did effectively a greenfield start becoming the most technologically advanced in Europe - if they were able to expand to Europe, they would crush it.
Agriculture? Changed hands from state to private, productivity and yield increased, pre-war exports are all-time high.
Energy? 1990s weren’t great in some republics like Kazakhstan, but having some private companies in the business definitely helped. Not enough is being done on green energy, but that is a different story.
Wasn’t it mostly controlled by foreign banks, though?
That was pretty much unavoidable though. The old Soviet system and institutions were unsustainable and couldn’t coexist with “capitalist” institutions. There was no banking sector (at least how we understand it) to begin with, any company producing consumer goods, electronics, cars etc. collapsed overnight because they were producing garbage products that nobody needed after foreign substitutes became available.
Basically there were only two choices, sell off everything remotely useful to foreign companies and hope that they modernize/fix it or allow the local oligarchs to privatize/steal everything. Arguably the countries that picked the first option came out ahead (but are now stuck with entirely foreign owned banking, telecommunications. Retail sectors with much of their industry either directly foreign owned or incapable of doing anything but subcontracting)
e.g. Belarus tried to hold on much longer, instead it got stuck where it was for several decades with little progress. The Baltic countries crashed and were close to societal collapse for a few years but have been on an almost continuous upwards trend since they recovered.
This was basically a regulatory failure. They broke up the energy market on paper but without making it feasible for new entrants to actually enter the market, which is the sine qua non of making this work. So then the incumbents purposely constrained generating capacity to spike the prices.
Sometimes breaking government monopolies may lead to worse outcomes. In Europe breaking transportation monopolies (especially rail transport) lead to decades-long worsening of services in some countries. Because instead of one company managing everything you now have one company owning moving stock, one company owning rails, one company offering repair services, one company... And all of them delegating and re-assigning blame.
But these situations are more of an exception
if the gov't monopoly was receiving tax payer subsidy, then breaking it up means the taxpayer gets back the cost of the subsidy, and the service being provided returned to private funding model.
If you only consider the outcome as the cost paid for service by the end user, then this looks bad - after all, cost was raised. But you have to also consider the savings in the subsidy that is no longer paid.
It's not black and white. Personally, i would prefer a model of "user pays", as it aligns incentives the most.
You've got to consider other costs as well - higher road use means direct costs, direct deaths, and pollution. Some things simply aren't easy to isolate the effects of and bill an individual for; some things are natural monopolies, some things are economic lighthouses, and we shouldn't be afraid of administrating things via governments in the many cases where a true free market simply isn't a viable option.
They never do. They keep receiving substantial government subsidies.
> If you only consider the outcome as the cost paid for service by the end user, then this looks bad
No. I view it as "prices went up, service levels have gone down: delays, breakdowns, staff shortages have increased"
> Personally, i would prefer a model of "user pays", as it aligns incentives the most.
Then there would be no public transport, as its costs are prohibitive
If you are willing to pay 100€ for a 1h train ride, that is.
Subsidies allow public transport for everyone.
We don't demand that highways generate direct profits/revenue outside of limited application of toll roads, would you also want every road to be pay-per-mile?
In a way it's like having a single one-million-line file vs a clean separation between API, UI, etc etc.
https://www.theregister.com/2017/12/13/google_click_fraud_la... (I think it was this one but search results are saturated with other litigation and antitrust since)
If you want to increase competition and stop the market from consolidating into a few players it's not immediately obvious that breaking up these ad exchanges goes that direction because it deprives reach from everyone except already large companies.
^^ this is possible because the ads are delivered digitally, not because of any magic power google has.
Even if every website was its own independent advertising space (an extreme opposite), they could all still be open to advertising companies big and small by using “open standards”.
The innovations are all technological.
I genuinely don't know how this doesn't precipitate a market-maker who can match up the two groups and who naturally becomes huge because the best matchmakers will be the ones with the largest populations of both groups. The bigger they are the more and better matches that can exist and everyone (theoretically at least) gets better prices because buyers and sellers are in competition in a larger pool.
In finance lingo, Google is the exchange, the market makers, the brokers on both sides and a good fraction of the listed companies to boot.
Can a search company be forced to allow users to choose their as network? Show me whatever results but I want facebook's ads, or bing's ads and so on.
Pretty sure google's going to ask for 30% of what Facebook makes I guess but that's fine, let's start building a business model on that.
Assumption is that search is a monopoly and that's why they will be saddled with regulations. Frame any other constraints and market solutions can be figured.
> Pretty sure google's going to ask for 30% of what Facebook makes I guess but that's fine, let's start building a business model on that.
Why wouldn't Google ask for the equivalent of what they make with their own ads? Which is likely to be more than what a 3rd party ad provider would make.
Search doesn't make money by itself, it makes money by displaying ads. Why should another company get to capture the profit from that?
The ad exchange buys user profile data from those who collect it (which also happens today in addition to first party collection)
Or, am I missing your point?
The “at least” is unwarranted, and even the “theoretically” is being far too kind.
Of course if you allow a monopoly to develop they will protect their own interests to the exclusion of others, and use their power to entrench their position. Even the oldest theories about markets point out the dangers of monopolies.
Hahaha. Maybe if you compare it to getting a master's in marketing...
I'm a user of parts of their ad tech, and I've tried to be a user of more of their ad tech.
It may be affordable. I don't know, because there's not much left to compare it with.
It's probably somewhat effective for loads of people, since it's everywhere.
But it's decidedly NOT "simple". It's a monstrosity. If you come from no ad skills you will have to spend days digging through overly verbose documentation just to figure out which boxes to check. And probably a few hundred to a few thousand to "experiment" and find what's working.
This is absolutely NOT a "spend hundred bucks, get a few interested visitors" solution.
Even at the other end it's getting more complicated. It used to be: here's some HTML, slap it where you want the ad. Now you have to be constantly vigilant that they aren't destroying your site by sneakily enabling Auto Ads or showing interstitials.
When I started this back in '08, there were many of those providers. We could rotate through them to get some variety and get good payouts. ALL of them are now out of business, except Google, who started to magically payout less after competition declined.
As someone who uses them a lot, appreciates their technical ecosystem, who has his bills paid in part by their ad ecosystem, who is generally pro-business and thinks it's fundamentally unfair to punish successful companies for their success, I'll say this: Fuck Google. Break 'm up.
Representing the broker, the publisher and the house is efficient and is how google can spend your ad budget and deliver absolutely nothing in return. It takes expertise (more money) and a long runway to even break even with todays google “ad tech”.
Without Googles ad money, so will Chrome - and then consumers are left with what exactly? Safari for those on Apple devices, sure, but thats about it.
If Android is made to stand up on its own, can it? And even if it does, is it competitive with iOS? And for how long? If each major manufactor ends up forking it, even that is a net loss for consumers.
You can split up ma bell, large airlines, and Standard Oil. But a modern high tech business? That is a lot harder.
Correction: Mozilla will probably die. Firefox, or a fork of it, will undoubtedly live on.
With any hope: probably some browsers that care about users rather than consumers
Or they would be worthless if they are not self sufficient and are only there to funnel users to Google’s profitable products (Ads).
Even something like GCP would struggle, and they aren’t necessarily doing that great compared to competition already.
Android or Chrome on the other hand? They have no direct revenue and wouldn’t have existed in the first place if Google wasn’t allowed to do stuff like this from the beginning.
Webkit is open-source though. Wrapping a browser around it is not too hard (that’s how Chrome started after all).
So it might not be a horrible situation. Just like Google now they’b be subsidizing the cost of development to a significant extent which would result in much lower entry barriers without having a meaningful direct presence in the market themselves (outside of iOS/Mac).
I think same applies for Chromium. It wouldn’t just disappear and MS and other companies would probably pick up the slack to some extent.