Inside the U.S. Antitrust Probe of Google
wsj.com
wsj.com
The problem with Google, as far as the US Government is concerned, is that it is not a government regulated monopoly. They fear anything with such vast scope and influence / power, that they don't have a certain level of direct control over.
The purpose of pursuing Google on anti-trust is to bring them under supervision of the US Government. The same reason the Feds were interested in Microsoft. It surprisingly takes very little to cause anti-trust problems for a major company, as little as one powerful senator dedicated to the issue. Google will be brought under a consent decree in the next few years most likely, and by the time the Feds get around to doing that, the market will have likely already made Google's dominance in search a lot less important.
Anyway, with that digression out of the way, if you want to understand the relationship between government regulators and telecommunications companies, I highly recommend Tim Wu’s book The Master Switch. Government regulation of telecommunications industries has often been contingent, contradictory, and somewhat chaotic (in the sense that small nudges lead to dramatic unpredictable changes).
Can you elaborate on how that might happen, operationally?
I think Peter Thiel alluded to this in an interview recently. From what I recollect, he suggested that by the time Feds act, the monopoly has already been disrupted elsewhere.
45 minute mark of this interview http://thisweekinstartups.com/peter-thiel-launch-festival/
Google will continue to make money from ads delivered into this virtual space and it will also have more leverage to regulate 3rd party apps, giving it access to the space within the apps as well. Oh, and also all these virtual spaces will have private and public modes.
The biggest problem really is screen area. The only reason Google can't exploit Android to its fullest potential is that phone screens just aren't large enough to dedicate a sufficient screen area to advertisement (it's a funny paradox: the phone as a real-life implement is limited to a form factor that precludes advertising space, which by its nature is always limited to 'sub-prime real-estate'). Perhaps OLED will be the solution to this, though I am more partial to drone-phones that hover beside their owners and use lasers to project the "screen" onto special eye contacts.
Their cozy relationships with the big banks could've fooled me.
In that case, new companies have to lay new cables and provision new data centers and hire new people, whereas TWC only has to ship out a cable modem and allow access to pre-existing capacity.
One way around this would be to force TWC and Comcast and so on to divest themselves of the physical infrastructure up to their in-plant demarcation points, spin off new natural monopolies to only own the cables, and force those new companies to lease to all comers at the same low rate, with a managed X% profit spelled out in regulations. That way, an upstart would only have to provision new data centers and hire new people; that's still more than Comcast has to do, but it's a lot less than the current state of affairs.
This is related to Net Neutrality, in that the neutrality rules are more urgently needed as long as ISPs have unshakeable monopolies on a regional basis, but even if competition were more robust it would still make sense to ensure no ISP could become that predatory.
Three providers would be unthinkable for a true natural monopoly, like roads or water.
You're lucky. I only have Cable and (crappy) DSL. My cable is good, but the DSL is so awful that if my cable provider decided to triple their rates I would have no choice but to acquiesce and pay up. I think that's the very definition of a natural monopoly.
A very large number of Americans have no, or only one high speed internet provider - and that was by the 2010 standard of "high speed": http://broadbandnow.com/report/2013-underserved/
( Relevant YC discussion here: https://news.ycombinator.com/item?id=9044719 )
Where I live there is either cable (which exists because of cable TV) and terrible DSL (which exists because of phone lines). There has never been any attempt to wire the area only to provide internet service. And as far as I know, there is only one set of wires for cable TV. So, it sure appears to be a natural monopoly to me.
Any opinions on that?
And Jason Calacanis is all upset because the report says that Google tweaked their algorithm to hurt competitors, which he claims killed his human-powered search engine, Mahalo [2]
[1]http://www.theverge.com/2015/3/19/8260073/google-ftc-leaked-...
[2]https://twitter.com/Jason/status/578731213554233346/photo/1
It doesn't seem anticompetitive to me - it seems like common sense.
>According to the report, for one example, Google took content from companies like Yelp, TripAdvisor, and Amazon. In the latter case, Google lifted product rankings and placed them in their own search results for those products. When the companies complained to Google about the process, Google threatened to remove them entirely from results.
That sounds pretty bad, if accurate.
Google's Knowledge Graph is where Google scrapes facts that other sites have compiled, most notably from Wikipedia, and presents it as its own data. This devalues all the sites that have compiled the facts, but greatly enhances Google.
When Google acts as a content site in its own right it inevitably comes into competition with the sites it ranks on the search engine, hence the (inevitable) anti-competitive behavior seen in the report.
Snippets in search have long been held to be fair use and, quite honestly, I see the Wikipedia thing as an SEO crank red flag: even beyond the fair use argument, Wikipedia is explicitly licensed to enable that sort of transformative use. Remix culture and all that.
It is vain, however, to call simply for clearer statutory definitions of monopolistic practice. For the vagueness of the law results from the impossibility of laying down a cogent definition of monopoly on the market. Hence the chaotic shift of the government from one unjustifiable criterion of monopoly to another: size of firm, "closeness" of substitutes, charging a price "too high" or "too low" or the same as a competitor, merging that "substantially lessens competition," etc.
That's not even remotely true.
> No business can know whether they have committed a crime or not
That's not even remotely true. There are plenty of factors that characterize 100% of businesses not investigated (much less, penalized) for their alleged anti-competitive practices. It is very possible to determine whether a business carries any risk of investigation.
> For the vagueness of the law results from the impossibility of laying down a cogent definition of monopoly on the market.
Again, you just aren't paying any attention. Regulatory capture has indeed made it far more challenging to bring an effective action, as well as de-fanging of antitrust regulation that served our parents' generation pretty well. But it's not actually difficult to use existing law to differentiate Google (natural monopoly) from cartel monopoly maintenance behaviors.
That something is clearly a pony.
Also related to this story is the massive amount of lobbying Google did to avoid charges being filed.
http://www.washingtonpost.com/politics/how-google-is-transfo...
Google was born into Microsoft's monopoly era. They have executed their monopoly in a profoundly different way. They don't have to commit anti-competitive acts to maintain their monopoly.
This is exactly the kind of monopoly we should want.
While they are usually more subtle about it, I am not very surprised. I personally am aware of at least one deal where they used their size to squeeze a smaller company. Only they called it a "level playing field" (https://www.mattcutts.com/blog/level-playing-field/). Sounds so much nicer! Except what it means is, "Our users want to take their data from our service to yours, but it's not 'level', so hey, give us something in return". And of course, who can forget the whole YouTube thing with Zoe Keating.
This has been a trend for a while now, only their PR has been pretty good at covering it up. Like calling it a "level playing field".
I think you may be confusing monopolistic practices with anti-competitive practices. The former does not imply the latter. If Google were also illegally protecting a monopoly (e.g. leveraging monopoly in another market, let's pretend they have an office software monopoly, to protect their monopoly in web search) then we would have a problem, but that hasn't been shown.
> I personally am aware of at least one deal where they used their size to squeeze a smaller company.
Again, the facts would have to show anti-competitive practice and not just being bigger. Are they doing anything unfair like taking a loss in their victim's market, or threatening their vendors?
The actual laws are more involved, including legal theories like "tying" that I can't claim to understand (and I suspect most here can't either) but this looks no different than what Microsoft was accused of doing, which was portrayed as leveraging a desktop OS monopoly to compete in the browser market (as silly as that sounds today).
I understand how similar it looks. However, I also note that regulators who are expert in the relevant legal topics have investigated and found no cause for action. Microsoft was not shy about providing all the detail they could to help the investigations in Europe, either.
My best guess is ratings and local reviews are also search, or 'search' isn't a market on paper the way it seems to us as consumers.
Fixed it
If you have strong feelings about the issue, use that emotional fuel to write something substantive, or take it to Reddit.
Can one 'do' evil without 'being' evil? Maybe, if you think that the ends justify the means.