huitzitziltzin

Not true. Look at the market for meat. There are lots of farmers, a small number (really three or four) processors (who appear to carve up the national market into non overlapping regions) and then a large number of retail customers.

To me that looks like an actual antitrust violation but the DoJ and FTC aren’t investigating bc they are obsessing about “big tech” uselessly and bringing bad cases they are going to lose!

If you want your regulators to actually do something about a lack of competition in the US economy (which they really should be doing!) there are a ton of markets worth investigating before they waste their time on this loser of a case.

I have logged into gmail via safari recently so I’m not entirely sure I know what you’re referring to here???

Some of those other claims are quite strong, IMO. There’s a good case to be made there.

However, asking for a structural remedy like divestiture after so much time is going to be a tall order, to say the least. Generally courts don’t like to meddle directly in the way firms are run (correctly, in my view).

>> The government is claiming that the search market is being monopolized, not by having the best results, but by paying $45 billion dollars/year to various browser suppliers to make Google the default browser. That's the illegal act.

And google is going to say correctly that consumers are free to switch search engines. They are free to enter “bing.com” in google chrome and it will take them right where they want to go: to another search engine!

I note above that I am not sure google’s payments are pro-competitive. They probably aren’t. It’s fair to be uncomfortable with them. But to make an antitrust case on monopolization of search you are going to need more evidence than those payments.

>> Don't you think the counter argument to this, is, "No it's not that easy to just go to bing when you buy out the default search on rivals' browsers and operating systems and have the browser and mobile os with the world's largest market shares"?

I’m looking for an analogy for you. The claim is that Google has monopolized the search market. It’s difficult to find actual monopolies in real life bc generally antitrust regulation works well (pace Lina Khan).

Think about a small city with two independent hospitals which then merge. That’s closer to a monopoly. There is a potential harm to consumers here bc traveling to go out of your local market for hospital services brings real costs: travel time, inconvenience, etc. That gives the newly merged hospitals power in the market. (Maybe not to the level of a monopoly, but likely substantial market power nonetheless.)

Applying something like this analogy to your counter argument: literally all the consumer has to do to avoid Google’s so-called monopolization of the search market is type the letters “b-i-n-g-.-c-o-m”. That’s entirely different from the hospital case.

It’s going to be very very very hard for the government to establish that google has anything like monopoly power here. Remember: making a better product and as a result having a large market share is not a crime. Google is going to say that since consumers can costlessly switch to a competitor who is also free, the reason they have 95% market share is bc their product is better.

I find it very hard to imagine that they will lose this case. It’s possible! But it seems really unlikely to me.

Essentially none of the issues you cite are antitrust issues. You could be right or wrong on the merits but they won’t be part of this case about the monopolization of the search market.

(There are really important antitrust issues in the ad exchange but that isn’t the case the government brought!)

Bundling IE was anticompetitive for the same reason bundling Teams now is anticompetitive. They (= Microsoft) deserved to lose that case (as they deserve to lose a similar case about Teams). This is not the same.

Notably the claim is being made that the search market is being monopolized, not that there is a bundle at issue. If the government thinks there’s a bundle here they can make that claim.

It is a defense. It is the defense that they will use and probably the only one they need.

The government lost Ohio vs. Amex, which was in any event about a two sided market. Google is definitely active in two sided markets but this case does not make those claims.

Good luck to DoJ if they are arguing that the quality of the product is lower! They are going to fall on their faces.

I’m not saying google doesn’t engage in anticompetitive behavior. There is a good case to be made on various things they do. But to go at google for “monopolizing the search market” is just pointless. The DoJ should bring a stronger case! Such cases can be made.

>> The MS case was about including IE with Windows for free.

This is exactly where the anticompetitive effects of bundling arise.

>> With Google, the products are paid for by the ad revenues instead of Windows and Office licenses.

That’s why it’s going to be impossible to argue that this is bundling in the anticompetitive sense.

That’s not relevant to the monopolization claim here though.

Hey - if you think you can do it go ahead. No one in the economics profession would oppose a usable definition of market which covered all of these cases (or even a subset of them) and made it easy.

We aren’t failing to offer definitions here bc we’re in the tank for big tech. To immediately suggest we have malign motivations isn’t charitable. It’s genuinely a hard problem.

>> People need to realize their privacy has value, a lot of value actually,

I mean… maybe? (How much is your data worth to google in dollars? Probably not that much.) But I think consumers understand how google makes their money. If your argument in court is “consumers are misunderstanding in dollar terms how much this is harming them,” then you are going to lose.

There are a whole bunch of edge cases you aren’t thinking about. Markets can be highly local (hospital markets, eg.), firms go out of business, new products enter new markets (smart phones, tablets), even defining “the market” is hard (does Sirius XM have a meaningful “monopoly” on satellite radio?). So your “make 95% market share illegal” idea is quite challenging (actually impossible) to work out

>> Would drive, docs and gmail be free if you divorced them from the ad revenue products?

If they are all free then it’s not a bundle in the antitrust relevant sense. Microsoft Teams is a great example of an anticompetitive bundle if you want one.

If they don’t they should fire their lawyers. (They will.)

In other words… it’s free. Google search is free.

All of this “… then you are the product” stuff is totally meaningless legally and economically.

“Bundling” can be anticompetitive but is not at issue in the actual case the government has filed. Nor can I personally identify a meaningful bundle from google in the right sense. You may be using the word informally.

>> That is, saying that customers /could/ switch is not necessarily relevant

On the contrary, it’s the whole ballgame in a case like this. Google’s claim will be: “we have high market share because our product is good. Look - customers could switch for free if they didn’t like it.” The government cannot make a monopolization claim solely on the basis of high market share in this case. It’s not remotely persuasive. (Indeed: who do you do your searches with??)

>> “there is evidence…”

Totally agree with this sentence. But it’s not going to be decisive for the government. It will not be remotely sufficient. Again - it’s not clear to me personally that this behavior is pro-competitive. But I’ve already told you what google is going to say. If you’re going to argue monopolization you have to define the market (here search) and then show it’s monopolized. Market share isn’t enough.

>> could see it more as collusion…

Not legally. Sorry. Not without some specific evidence of a conspiracy.

That’s not the law, so it’s irrelevant to the legal issues.

The DoJ is welcome to make a claim on monopolizing the ad market. The case here is about monopolizing the search market.

The government could make antitrust claims regarding google’s behavior vis a vis advertisers. (I’m sympathetic to some claims that could be made there!)

Monopolization of the ad market is not the issue here, because the specific claim is that google has monopolized the search market. You can read that right in the linked article.

Google’s payments to be the default are (as I already said) not obviously pro-competitive to me. I don’t know if you and I disagree there.

But again… in Google’s defense they are going to say (accurately!) “everyone gives search away for free so consumers are free to switch.”

It’s going to be impossible (IMO) to argue that consumers are harmed in the search market. It just won’t be credible.

The department of justice is likely wasting its time, which is similar to the recent behavior of the FTC under Lina Khan which is (if you are American) wasting taxpayers’ time taking on losing cases, while letting mergers which really deserve critical scrutiny through. Microsoft Activision is a prominent recent example.

And if the Justice Department actually does show up in court with a filing that says: “No, your search engine was awesome, but it’s increasingly ad-filled crap. You’re too powerful, you’re too lazy, and America needs some real competition” (this is a direct quote from Stoller’s article) they are going to be laughed out of town and they will richly deserve it.

So again… I like the attention Stoller pays to antitrust issues but his analysis of the economics (especially in the case of some tech firms) is just bad.

The point of antitrust law is to protect competition. It’s not to protect small firms nor to prevent the emergence of large ones. The kind of law you want is different, and in my opinion as an antitrust guy a very bad idea. To my knowledge no such law exists in any industrial democracy.

Because it’s a bad idea?

You shouldn’t ensure that three potentially inferior products stay on the market. That makes no sense.

It also reduces the incentives those firms have to invest in quality - at some point there is a hard limit on how much competition they face. That would be a terrible, terrible law.

I appreciate the passion Matt Stoller brings to antitrust issues but his analyses are not good on the economics, to say the very least.

I agree that some of google’s conduct is very questionable. It’s not obvious to me that paying to be the default search product is pro-competitive.

On the other hand, the case that Google is going to make (and which I think is going to be really hard for the government to overcome) is this: we (google) give our product away for free and so do our competitors. What’s more, the cost of switching search engines is literally zero: just type Bing instead of Google.

If customers are choosing our search product among two free options, then our product is better. It’s going to be very difficult to establish that there’s an abuse of dominant position in that case. (There is other behavior by google which is more questionable, but in search they are on firm ground.)

Having a large market share is not an antitrust violation, nor should it be.

Any parent who waited months and months and months after getting their own vaccine before they could vaccinate their own kids against COVID-19 has first-hand experience with this. If ever there was a time to be more slightly more innovative about the approval regime, a widespread active pandemic was it. The FDA failed completely on that dimension and millions of kids paid for it in various ways, especially for a vaccine which is ex post completely safe and even at the time was obviously safe.

I don’t mind appealing to authority when I know the economics profession personally.

To be clear: it is an embarrassing error. Everyone also thinks this. They have been dragged for it quite a bit. But it was not deliberate.

In terms of the “total loss of credibility” … the fraction of empirical papers with some coding error approaches 1. The question is how bad it is.

Completely and totally different case. You are wrong on the facts.

There is no one in the economics profession who thinks Reinhardt or Rogoff deliberately made that error bc they had something personal at stake in convincing policymakers that austerity policies were the right outcome. Quite unlike the cases of ariely or gino or various others.

They made an embarrassing error but ultimately it was a coding error.

I like the comparison but I think Scientist Time is an important missing part of the equation. (Also disclosure that I wrote my dissertation project in Julia, which made use both of multi threading and the ability to parallelize easily in an HPC environment.)

Not knowing rust, a lot of this material looks like it would have high initial investment (to learn rust) and an ongoing variable cost to implement (ie, figuring out all of these complexities in a particular use case). There is surely a trade off on accuracy but everything in science is about trade offs.

If you can publish three papers working in julia while the rust programmer gets through only one… we know who is going to get tenure.

I am not a lawyer and I don’t defend what Shein has done, but racketeering seems like the wrong description for this? Maybe the plaintiffs are really stretching for a legal theory bc what shein has done is not illegal, even if it is wrong?

Inflation is down, the labor market is robust and we are not in a recession so you can expect that the Federal Reserve will quite likely raise interest rates a quarter point at their next meeting. The decrease in inflation is good news for consumers and for policymakers. We still have a bit to go to get to a level of inflation the Fed is comfortable with. Barring a dramatic change in the labor market or the level of overall economic activity, expect further interest rate increases.

This is my interpretation as an economist not at the fed or in another government agency and with access only to the same public information you have, but with a bit more background in macro. As always, I may be wrong!