A new round of antitrust questions can’t go well for Google

https://finance.yahoo.com/news/google-afraid-very-afraid-121312132.html

by Jerry2 • 7 years ago

210 176 7 years ago

finance.yahoo.com

dredmorbius• 7 years ago

Source: https://www.bloomberg.com/opinion/articles/2019-06-01/trump-...

(Post currently points to Yahoo.)

dang2• 7 years ago

OK, changed from https://finance.yahoo.com/news/google-afraid-very-afraid-121....

Jerry2• 7 years ago

Hi dang! Problem with Bloomberg is that it's paywalled. Yahoo News is not.

bediger40002• 7 years ago

Honest question, I'm not trying to incite political discussions, but...

Can Google get out of this by sucking up to Trump? It appears that Trump is susceptible to flattery, and he also appears to play favorites.

The other viewpoint might be: can Google get a fair trial in the US court system? Trump has let the Federalist Society pick all the Federal judges he's nominated, as near as I can tell. Some of them haven't been very knowledgeable about the law. Or maybe, should the DoJ worry that its case won't get a very fair hearing at trial?

My point is that we're living in interesting times. Assumptions commonly made in the past just might not hold today, even in the US Court system.

britch• 7 years ago

I think the tactic would work, but I don't think Google would want to use it. IMO they'd burn through a lot of recruiting/culture credit pretty quickly if they became too friendly with the Trump administration. Say what you will about Google, they still have a reputation for hiring some of the best engineers. I think a lot of that is off the back that many do not view them as an "evil" company. Becoming very close with the Trump administration would be good way of doing that. I don't think Google really wants to give up their reputation, even if the cost is a monopoly investigation.

Being too buddy-buddy with conservatives has resulted in pushback for Facebook[0] and Uber[1] (Apple[2] too, but a little less so).

Personally I believe that Google, Amazon, and Facebook( a little bit less so) should all be broken up. When you look at Google and Amazon they have their fingers in every pie, it's mind boggling.

I am more left than right, and I am very skeptical of what the Trump administration would do about this. It feels like, with Facebook especially, conservatives are not exactly mad that the companies are big. They are mad that the companies are big and not entirely right-wing mouth pieces. There's a lot of anger about "biased" Google results[3] and "censorship" from Facebook[4].

If you look at the business landscape in US, most very large businesses are culturally conservative. Most tech companies prefer to project a younger, liberal image partially for recruiting reasons. I don't think the Trump administration would be interested in pursuing this if Google looked and acted a bit more like Procter and Gamble.

This seems like a winning position for Trump and a losing position for Google no matter how it shakes out.

[0] https://www.nytimes.com/2018/10/04/technology/facebook-kavan...

[1] https://www.nytimes.com/2017/02/02/technology/uber-ceo-travi...

[2] https://www.vox.com/policy-and-politics/2019/3/8/18256467/ti...

[3] https://www.newyorker.com/tech/annals-of-technology/the-sear...

[4] https://www.theguardian.com/technology/2016/may/09/facebook-...

v7p1Qbt1im4• 7 years ago

I pretty much agree. I big part of the reason why I personally like Google is because they, or at least a majority of their employees is actively progressive. Even if that’s just PR it’s still a nice counterweight to the mountains of companies who are just completely neutral or conservative culturally. At the same time, they and facebook facilitate the spread if right wing extremist ideology to some extent.

gesman• 7 years ago

Normal, regular process of government[s] extracting extra tax dollars from large enterprises in forms of penalties/fines for whatever violations.

This will ends when Google will pay up and promise to do some [cosmetic] changes.

devoply• 7 years ago

Yeah it did nothing to Microsoft. Business as usual.

saagarjha• 7 years ago

For antitrust? I’d say it did quite a bit, given that it lead to other companies being able to enter the market and take over market share from Microsoft.

RyJones• 7 years ago

Strong disagree. I was at Microsoft post-conviction, and nobody wanted to put anything in writing.

decebalus1• 7 years ago

bullshit. Saying that Microsoft went through some drastic changes would oversimplify it. As a former employee, Microsoft was basically another company after the anti-trust thing.

hliyan• 7 years ago

The more people with a defeatist attitude, the worse the situation gets.

RickJWagner• 7 years ago

This is interesting to me because Google has the power to greatly influence public opinion.

For me, it's not the business monopoly, it's the influence monopoly. And that's very much worth regulating.

studentrob9• 7 years ago

I don't think they have any more influence than media conglomerates like Comcast, who owns NBC, and who effectively turned the attention from net neutrality to hatred of Facebook, Amazon, and Google. It is rather ridiculous to argue that Google, who provides free services, is any more of a monopoly than broadband ISPs.

dewey2• 7 years ago

If you look at adtech there’s really only Google and Facebook so it’d call this very close to a monopoly. This is also not a free service so you are only comparing a small subset of Google services which are mostly built to fuel the ad part (Search and YouTube being the biggest one probably)

justinclift• 7 years ago

Aren't they in different leagues though?

Google has global impact, whereas Comcast (etc) are mostly US?

creato• 7 years ago

I think you are greatly overestimating their power. It looks to me like they're walking on eggshells precisely because they can't really exercise the power you think they have without immense backlash.

gravypod3• 7 years ago

How do investigations like these work (logistically)? Google is a massive, multinational, multi-industry, R&D/Software/Hardware/Logistics/Cloud/SaaS/Ads/everything platform. Google is also one of the very few who can actually say they are hiring only "the best" engineers (*by Google standards for Google's use case).

How would an entity run an investigation or audit against Google?

If I, or I'm assuming anyone who doesn't work in Google, was asked to come in and develop a fundamental understanding of how everything works within Google's software/infrastructure it would likely take me a long time to do that and I'd likely need a lot of help from real Googlers. They are, of course, the best of the best and I'm just some random SWE.

I'm assuming their business side is as complicated as their software must be and I'm assuming their legal/business/executive team is as smart as their engineers. How practical is it for an outside party to claim that they actually understand what is happening within Google? How many people does that take? How long does that take? Does Google need to provide support staff for these people to aid them in understanding Google's internal business structure?

Also, for audits like this is "understanding what is happening within $company" a factor? If a company is so big that it can't see what it's stepping on (crushing in an noncompetitive way) does it get a pass?

tzakrajs• 7 years ago

I am curious why you think Google, given its spurious record with privacy, security and labor, that it would have the best engineers? Not to mention engineers in the valley often lambast Google for sun setting every decent platform that engineers care about.

gravypod3• 7 years ago

Everyone makes mistakes, few people make multi-billion dollar companies that shape the industry they occupy.

wangii2• 7 years ago

good point, and it's exactly a strong point why it should be investigated.

given what you said, it's not difficult to conclude there is no one in the world actually understand google's business, and/or engineering, including googlers. therefore, who is going to be hold accountable, which person we need to push if anything goes horribly wrong?

Google, facebook and amazon have been way too powerful financially, technologically, politically and culturally. install armies they will be superpowers. it's better to do something before it's too late.

jdc2• 7 years ago

Google, facebook and amazon have been way too powerful financially, technologically, politically and culturally.

Seems true, but also too vague. Is because we can't trust a profit-motivated organization with that much influence?

Is it because they (FAANG) came by it dishonestly?

Are they abusing that power?

Are they unique in that regard?

Or is it because "anything invented after you're thirty-five is against the natural order of things"?

soup10• 7 years ago

Why are you putting Google and its employees on such a pedestal? It's software and business are not magic and there are plenty of people qualified to audit them.

gravypod3• 7 years ago

I'm not putting them on a pedestal. I'm exaggerating the situation to make my question simpler to communicate. I think the complexity of an audit holds true for the FAAN in FAANG. I think it likely also holds true for other large companies as well.

cjhanks• 7 years ago

Yeah... The average Google engineer is better than the average engineer. But there are plenty of competent software engineers who don't want to live in South Bay or near a Google hub. There are engineers with interests outside of Google interests.

And there are certainly business people out there with more knowledge than those in Google - see NY.

sjg0073• 7 years ago

The business side is easy: subpoena email, documents etc... Google has to cooperate within reason. Then add in lawyers etc, all external communications etc... They will run the discovery through analysis software which is pretty standard plus whatever else the gov't has developed.

And the business is easy: Ads, ads, ads.. plus maybe Google Apps / Compute. Using android unfairly.

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

x0x0• 7 years ago

Also, if the feds open an antitrust investigation, the companies and people damaged by google will proactively tell the feds where to look. So they don't just have to go entirely hunting on their own; they have a pretty good notion of where to start.

eg phone manufacturers will be upset about google not allowing them to produce devices that compete with android and android devices; yelp and other sites are upset google scrapes their content, etc.

Const-me• 7 years ago

I know a few people from Google. They're good but not best.

The best software people I know work in their own companies, and/or doing more meaningful things than selling ads.

ssivark• 7 years ago

It's not so impossibly complex. After all, even for a typical big corp like Google a dozen people or so will be respectively responsible for understanding the functioning of each of their sub-organizations. They will have to understand it in and out -- especially the business/human consequences, if not the technical details. Any new member (at "vice president" level or something) will be on-boarded in this matter in a matter of weeks to months. So it's definitely possible for someone to go in now and get to the bottom of some of these questions.

That doesn't require exceptional "intelligence", but it does require a tenacity in finding information and the integrity to relentlessly ask questions till you understand what's going (without prejudice regarding the outcome), without being prematurely satisfied that it's "too complex".

And of course, it will be a when team of people, who would have developed a similar understanding of other comes situations, and they will have significant help, and the authority to ask questions.

If you want a more explicit and hands on understanding of the process, look up narratives of major investigations, eg: the Challenger disaster investigation, or the investigation that led to the breaking up of AT&T.

onetimemanytime2• 7 years ago

Just watch! There are plenty of super-smart and ambitious people looking to take on Google. Just let DOJ start and Oracle, MSFT, AAPL, Yelp and many other companies will tell FBI where to look. The only thing needed is the political will, the rest is easy. Those "best of the best" engineers face jail time and financial ruin, if they lie to cover Google's behind, so they have to think twice.

v7p1Qbt1im4• 7 years ago

If that’s the case then this seems even more politically motivated. Oracle and Yelp in particular are some of the most dirty players out there. They realize there is no future for them, so the only hope is legal action.

fauigerzigerk• 7 years ago

I'm assuming their business side is as complicated as their software

That assumption doesn't hold. Google's business model isn't that complicated. Industry experts and competitors understand perfectly well how Google makes money. Any investigation will focus on a handful areas that are well known and often discussed.

And when it comes to understanding who at Google has done what, why and when, there's prisoner's dilemma to the rescue. If investigators question a couple of managers under penalties of perjury, they will put their own personal interests (i.e staying out of prison) over Google's interests and just tell the truth or at least say something that isn't provably false.

studentrob9• 7 years ago

Wouldn't it make more sense to break up broadband ISP monopolies first? Google, Facebook, Amazon etc. cannot do business without ISPs. Plus, you can always choose to just not use Google.

And no, I don't think the justice department can or will "do both". It's clear this admin is anti-net neutrality, catering to Comcast's whims.

duxup2• 7 years ago

For whatever reason local telco monopolies seem as much tied to state and local setups that protect them and their access.

I don't know how that would play out with a federal anti trust setup.

notatoad• 7 years ago

For whatever reason

It's pretty simple: as you say, they're local. Google and Amazon are the big evil corporations on the other side of the country, but Comcast has an office in your town, and your neighbour's son works for them. They're a significant provider of relatively well-paid low-skill jobs in every community in the country. It's incredibly difficult to come down on that.

bobthepanda2• 7 years ago

I don‘t think states have ever been compelled by antitrust suits to change regulations; there is no state-level version of the WTO where one can sue about this.

Remaking federal regulation to preempt states is laborious and fraught with difficulty; see Obamacare.

loudtieblahblah2• 7 years ago

I use ProtonMail , standard notes, etesync, duckduckgo, Firefox, tresorit, wire/signal, lineageos on mobile and Linux on the desktop.

I still can't entirely opt out of Google.

And certainly can't opt out of their tracking.

They are inescapable.

Hydraulix989• 7 years ago

I'm actually curious how Google is still tracking you with that entirely Google-less stack? (note: I don't work for Google)

50656E6973• 7 years ago

They are inescapable

This seems like a great simplistic unit of measurement for classifying what antitrust action is supposed to target.

When it's extremely difficult, if not practically impossible to escape a private company from extracting/exploiting profit from unwilling persons at scale. When you basically can't opt out.

Lowkeyloki• 7 years ago

Thanks for tresorit. That was the only one I hadn't heard of. Their pricing structure is a little hard for me to grasp, but I'll be keeping them in mind.

studentrob9• 7 years ago

can't opt out of their tracking

How would breaking up Google prevent tracking?

paulcarroty• 7 years ago

lineageos

You can be tracked by every android app, plus DNS and connectivity checks - it's only visible part. Sure any advanced security audit will show much more.

nurb• 7 years ago

Inescapable indeed,

Special mention to reCaptcha, you just doomed to train there AI and it seems to intensify once you start moving away from google. And I bet it's even worst from the 3rd world...

I guess the "don't be evil" way would be to make all those data public. Or just to provide an alternative way to prove your humanity online, without enslaving the whole world.

luckylion2• 7 years ago

Plus, you can always choose to just not use Google.

A customer can, a company cannot. Similarly to how a customer can choose another ISP, but Google cannot choose to just not to business with ISPs: if a business cannot be connected to their customers, that business cannot live.

umanwizard• 7 years ago

I do not think Google peers directly with every ISP in the world. Traffic can take multiple hops.

pfortuny• 7 years ago

But you cannot opt out of being used by google when one of your friends has a gmail account.

mikedilger• 7 years ago

I agree that the ISP monopoly problem in the US is by far the bigger problem.

The "last mile" should be owned and controlled by the government, for similar reasons why roads and power lines are. Then handfuls of ISPs would compete for the business of your household. Here in New Zealand that's exactly how it works. I can choose from at least 20 ISPs and net neutrality is a non-issue because free market competition drives the providers to give us what we want.

Thus my stance on net-neutrality is neither for nor against. I think both stances are equally bad, and the root of the problem is ISP monopoly.

vore• 7 years ago

I don't understand how having free market competition solves the issue net neutrality is addressing here: what if each ISP has different deals with different internet content providers? Net neutrality prevents this kind of vertical balkanization in a way that the free market can't intrinsically address.

7952• 7 years ago

Why stop at the ISP level? Have a system that allows the user device to negotiate a connection with whatever services are available. The service could offer bids from providers which would have to specify a service level and price point. Then have a second price auction for every unit of time (say 10 mins). The user tunes their device to get the level of service and price they want. A contract would then consist of a VPN provider who would make bids on your behalf for a fixed monthly price.

BurningFrog• 7 years ago

Prosecutions are not an ordered prioritized list. The legal system doesn't work like that. You can't use this defense at your traffic ticket hearing.

izacus• 7 years ago

Why aren't they though? What's the point of the justice system if they spend their limited processing capacity in actors that are less damaging to society?

closeparen• 7 years ago

Arguments about prosecution priority are almost the entire content of DA election campaigns.

bediger40002• 7 years ago

Wait, what about "Judicial Economy" (https://definitions.uslegal.com/j/judicial-economy/). I've been annoyed when legal issues I follow get postponed because of "judicial economy" - the economic Judge stays things because he or she hopes that another trial will settle the entire kettle of fish, as it were.

shmerl• 7 years ago

Agreed. ISP monopolies are so obnoxious, and they basically bought legislature in many states to prevent any meaningful competition. All this is amplified by them swallowing each other and huge media companies in billions sized deals.

onetimemanytime2• 7 years ago

>Wouldn't it make more sense to break up broadband ISP monopolies first? Google, Facebook, Amazon etc. cannot do business without ISPs.

Are ISPs favoring Google, Facebook, Amazon etc. ? If so, I agree with you. If not, then...

>Plus, you can always choose to just not use Google.

Not as simple as you make it. Google for one is hurting competition and using their platform, mainly search, to do so. Different rules apply to companies with a certain market share. No one forced people to use Microsoft Windows either: Apple, Linux, or new companies could have invented many new OS-es.

unityByFreedom• 7 years ago

Are ISPs favoring Google, Facebook, Amazon etc. ?

No, ISPs favor their own services. See zero rating,

AT&T is openly advertising that cellular customers can stream the company’s DirecTV Now product without it counting against monthly data caps. Meanwhile, all of the competing video services like Sling TV, Paystation Vue, YouTube TV, Netflix or Amazon Prime count against AT&T data caps [1]

[1] https://potsandpansbyccg.com/2019/02/13/isps-are-violating-t...

pishpash• 7 years ago

Comcast isn't holding anybody back from innovating. If anything, wireless carriers may break their monopoly suddenly. Google, just like old Microsoft, by a vertical monopoly from OS to applications, is actually already doing harm to competition and innovation. You can feel the tech clock slow down in the last ten years. Imagine what small companies would be doing about security and privacy in search and browsers if Google didn't own that space completely. Imagine what the hordes of rest-and-vest half-working Google Ph.D.'s could be doing if they weren't hoarded by Google because of monopoly money.

studentrob9• 7 years ago

wireless carriers may break their monopoly suddenly.

This sounds like Comcast's argument, which is that there is already sufficient competition due to wireless carriers. The fact is, a fixed line will always be faster.

You can feel the tech clock slow down in the last ten years

Sorry, but a lot has happened in the last 10 years, in terms of new languages, frameworks, and software.

Imagine what the hordes of rest-and-vest half-working Google Ph.D.'s could be doing if they weren't hoarded by Google because of monopoly money

Are Google employees not free to do as they please now? If anything, they're being funded to go off and start their own companies. They're not enslaved by high salaries, lol. Quite the opposite.

mastazi3• 7 years ago

I know that this is going on in the US so it's normal that your comment is from an American perspective, but:

1. It is nearly impossible to "choose to just no use Google". Tell me how long you can go without getting through reCaptcha or AMP for example (with AMP, often you don't even realise you're using it).

2. From what I hear, it seems that in the US many ISPs operate mostly in a situation of monopoly but this is rare in many other countries (with the exception of remote/rural areas). I know it's just anecdotal but I used to move frequently for work and I lived in many different countries in Europe/Asia/South America/Oceania and it never happened that I couldn't choose from at least a couple different broadband providers, except in one single case (village in a rural area in a South East Asian country).

chronogram• 7 years ago

Good to hear that about the second point. Here in the Netherlands it’s just one broadband provider per location, and I’ve heard similar stories from people in west Germany. So it’s good to know that it’s different for everywhere else.

jfoster3• 7 years ago

If you don't even realise that you're using AMP, is it actually to the detriment of consumers? How do you even get to an AMP page unless it's from a Google search?

vturner2• 7 years ago

Interesting to note that 97% of the US land is rural.

JumpCrisscross3• 7 years ago

Tell me how long you can go without getting through reCaptcha or AMP for example

To say nothing of websites’ Google Analytics suites phoning home your whereabouts.

nabla94• 7 years ago

you can always choose to

This is too narrow understanding of monopoly power. Market failures happen even when there are multiple suppliers

If some corporation gets into position where customer 'Can always choose' a option that provides less value for them and it's the monopoly power that provides the advantage (size and network effects) markets are not efficient anymore.

studentrob9• 7 years ago

Google's products are free. That's not a monopoly.

headsoup2• 7 years ago

But aren't those monopolies mostly there because of the Government protectionism, not just market dominance? From most articles I see on them, they provide poor value and service, but the government generally gives them a huge amount of leniency and support.

tzs2• 7 years ago

Wouldn't it make more sense to break up broadband ISP monopolies first?

Probably not for the Department of Justice. Some problems with that approach:

1. If you are trying to address the issue of limited choice in ISPs, I don't see how breaking them up addresses that. If you split an ISP that has a monopoly in a state, say, into separate ISPs for, say, each county...you've just gone from having one monopoly to having several monopolies. The limited choice is because there is only one cable coming into my house, and splitting up the company that owns that cable doesn't change that.

Addressing that probably requires something like making the last mile data transport a regulated utility that ISPs operate on top of. That would probably require Congressional action and a new President to do nationwide or to allow states to do individually.

2. Competition among ISPs in a region can vary dramatically city to city, and even neighborhood to neighborhood. I've not extensively researched this so maybe this is wrong, but the impression I've gotten is that an ISP's prices in a region tend to be pretty similar between those places within the region where they are the only choice, and those places within the region where there are alternatives with similar performing alternatives. That could make it hard to show that the ISP is abusing its monopoly in those parts of its territory where it does not have competition.

3. Aside from rural areas that only have DSL via the phone company, in most places there are multiple ISPs available. It's pretty common to have both cable and DSL, and in many cities there is also a fiber option. There's also wireless options, ranging from the regular consumer service of AT&T, Sprint, T-Mobile, Verizon, and the various MVNOs that are built on those networks, and many places also have wireless available that is not based on the cellular networks.

You might argue that, say, cellular wireless is not really a viable option to Comcast or Charter or whoever the cable company is in a given area, due to the vast difference in speed. But you will have to actually make the argument. You won't be able to just say that they speed difference makes them different markets. You'll have to actually look at how people are using these various services and show that they really are not comparable.

I think that the factors in #2 and #3 make it almost impossible to win an antitrust case against a major ISP as a whole. The DoJ would have to bring smaller cases alleging monopolization in specific regions, tailored to the specific way the factors in #2 and #3 play out in that region.

Having to do this region by region, or even city by city in some regions, would make this a very long, expensive pursuit. (And where they win, there is still the question of whether or not there is an effective remedy they can apply).

Thus, it is probably better for the DoJ to leave this issue to Congress to deal with via legislation.

JumpCrisscross3• 7 years ago

Wouldn't it make more sense to break up broadband ISP monopolies first?

No. The ISPs’ argument for breaking neutrality is the tech giants’ capturing of the majority of the profit pie. With competition, those margins should decrease. That, in turn, makes fighting net neutrality less lucrative.

Add on the fact that ISPs are more regulated, federally and at the state level (California can regulate Comcast in a way it can’t Google) and the more-imminent threat is revealed.

studentrob9• 7 years ago

ISPs are more regulated

You must be joking. In the US, broadband ISPs are regional monopolies that can and do charge whatever they want while delivering lousy service. This happens while net neutrality is in place.

Without net neutrality, ISPs are now free to make whatever deals they want with content providers, double dipping, and providing fewer options for consumers.

AT&T is now offering uncapped access to their video services [1]. Without net neutrality, nothing stops them from throttling Netflix & charging Netflix money for "high speed access", thereby passing costs to the consumer. ISPs can profit more from their regional monopolies simply by forcing services like Netflix to pay more. Consumers will not benefit because the broadband ISP has no incentive to improve service or lower costs. They are regional monopolies.

[1] https://potsandpansbyccg.com/2019/02/13/isps-are-violating-t...

hn_throwaway_99• 7 years ago

Plus, you can always choose to just not use Google.

"You" are not Google's real customers, the advertisers are, and most of them most definitely cannot opt out of Google and remain viable.

chvid3• 7 years ago

Why would the US ever breakup Google? This company is key to the American surveillance of the rest of the world.

nabla94• 7 years ago

The theory given in the article seems plausible to me.

myko4• 7 years ago

The NSA could just as easily (probably more easily) hack smaller companies. It isn't as if Google is giving the US government access to user data (except when legally obligated through warrants) - the Prism program was essentially spying on these companies without their knowledge.

chvid3• 7 years ago

NSA does not hack Google; it gets direct access through a series of secret laws and courts. American citizens may have some protection against surveillance but the rest of the world does not.

sfifs2• 7 years ago

It will be interesting to see how prosecutors argue any anti trust case against Google. In American case law, the doctrine of consumer welfare being the objective of anti trust is pretty deeply enshrined in recent case law [1]. The philosophy essentially says that monopoly is not bad as long as consumers benefit and increasing competition through anti trust actions can increase consumer cost. This is very different from how anti trust works in most other places in the world - so they will have the difficult task to prove consumer harm

[1] https://en.m.wikipedia.org/wiki/The_Antitrust_Paradox

headsoup2• 7 years ago

I assume it depends on what harm could be described as: Is harm of lost opportunity to a wider market, user data harvesting, incompatibility of websites due to monopolistic standards definition, Etc?

Does the harm have to be obvious and categorised as emotional/physical or similar?

The linked article there does not clarify the matter, to the point of the certainty of the position being vague at best.

sfifs2• 7 years ago

The change in legal thinking has been that fewer and fewer situations are held "per se" anticompetitive in US law and cases have to be analyzed by the "test of reason". Even vertical pricing actions (fixing ceiling and in some situations floors) have been held to be not anticompetitive. The article has links to cases where these arguments (known as Chicago School) have been cited and have been precedent setting in American case law

The net result is Google can't be prosecuted just because it's a monopoly. It will require provable consumer harm (not necessarily just industry harm) on a case by case basis (not just hypothetical) to win the case.

anoncake4• 7 years ago

I don't understand this philosophy. If monopolies don't harm the customer, why bother having a market at all?

You could argue that freedom requires private property and only a market economy is compatible with private property. But "A planned economy is more efficient but I don't support it because I support private property rights" is a pretty uncommon stance.

casefields• 7 years ago

One of the legal giants in this area, is probably the best place to start: https://www.forbes.com/sites/richardepstein/2019/01/23/bewar...

tzs2• 7 years ago

Monopolies don't inherently harm the consumer. The harm comes from abusing your monopoly once you have it. Hence, the concentration in law more on the harm than on the existence per se of a monopoly.

It goes the other way, too. Just as having a monopoly doesn't automatically mean you are in violation of antitrust law, not having a monopoly does not mean you aren't violating antitrust law. The practices you use to acquire a monopoly are often harmful long before you reach monopoly, or even before you become the biggest competitor in your market, and those are in scope for antitrust.

Antitrust law is really more about monopolization than about monopoly. The distinction is explained well in this report from the Congressional Research Service [1]. From the summary:

Antitrust law does not mandate either that markets be competitive, or that they contain some predetermined number of participants/competitors; it is concerned, rather, with the operation of markets, on the assumption that a properly functioning market (i.e., one in which there is an opportunity for viable competition, and is not skewed by the predatory actions of participants), will best protect consumers. "Monopoly" and "monopolist" are, therefore, merely descriptive terms, used to illustrate situations in which a single entity (or group of entities) possesses effective control of the market in which it operates; neither term implies anything about the lawfulness of the monopoly possessed. "Monopolization," on the other hand, is the term used in antitrust law to characterize as unlawful a situation in which a monopolist—irrespective of whether his monopoly has been lawfully achieved—couples his monopoly status with behavior designed to unfairly exploit, maintain, or enhance his market position. Similarly, "attempted monopolization"connotes a situation in which an entity unlawfully or unfairly attempts to secure a market monopoly. The long-standing, judicially created Rule of Reason, which involves balancing an anticompetitive action with any procompetitive results, underscores those facts.

[1] https://www.everycrsreport.com/reports/RL33708.html

maxwell2• 7 years ago

This is why Amazon pushes their "customer obsession".

lvh• 7 years ago

If that is true, would there be evidence that Amazon did not push the "customer obsession" until it became an antitrust target?

jfoster3• 7 years ago

If anything I think it's the other way around. People tend to reminisce about how great the service used to be from Amazon in the early days. Now it's not as good as it used to be, but probably still the best in most markets.

onion2k• 7 years ago

Isn't the "consumer" in the case of Google advertisers rather than the public at large? The question Google should be facing is whether or not businesses can reasonably buy adverts to advertise on the web from someone else, and whether forcing Google to break up would improve the situation.

Retric• 7 years ago

Google is much further from an advertising monopoly than a search monopoly.

Fnoord• 7 years ago

Correct. The public at large is both Google user and Google product. The advertisers are not the product, except when they're also a Google user.

JumpCrisscross3• 7 years ago

they will have the difficult task to prove consumer harm

Reduced choice and human nature tend to result in harm. The novelty, with Facebook and Google, will require measuring harm without explicit prices.

Such an antitrust argument around privacy was recently made against Facebook:

“This sort of thing happened regularly for years. Facebook would try something sneaky, users would object and Facebook would back off.

But then Facebook’s competition began to disappear. Facebook acquired Instagram in 2012 and WhatsApp in 2014. Later in 2014, Google announced that it would fold its social network Orkut. Emboldened by the decline of market threats, Facebook revoked its users’ ability to vote on changes to its privacy policies and then (almost simultaneously with Google’s exit from the social media market) changed its privacy pact with users.

This is how Facebook usurped our privacy: with the help of its market dominance. The price of using Facebook has stayed the same over the years (it’s free to join and use), but the cost of using it, calculated in terms of the amount of data that users now must provide, is an order of magnitude above what it was when Facebook faced real competition.”

https://www.nytimes.com/2019/05/28/opinion/privacy-antitrust...

dalbasal• 7 years ago

The economics being the legislation behind the case law is anachronistic, and the economics profession has done a poor job of updating its theories.

"Digital Monopolies" are barely similar to the heavy industry or commodity monopolies if days past. If you're trying to gauge the impact of google's market share via and prices...

A big part of the space they monopolize is free. No prices. If your fundamentals are based on prices and proxies for prices.. it's not going to work.

Both the reasons for a business to seek monopoly and the rationale for preventing it are estranged from the law, at this point.

sanguy• 7 years ago

Needs to be split up but the problem is the advertising side needs all the free services to harvest data to drive the ad business.

A split up google may not be a viable business.

perlgeek• 7 years ago

Maybe you can't split ads from search, but you could totally split Google Cloud | Search + Ads | Youtube | Maps -- and who knows what else google makes profit with.

chiefofgxbxl• 7 years ago

The effect on YouTube may be interesting and actually end up more beneficial. They could still run ads based on the videos you are viewing, but maybe they'd have to make up lost revenue by getting more people to pay for subscriptions (e.g. YouTube Red). Those subscriptions would signal to YouTube which users have expendable money (especially if it's a tiered pricing system), and what channels and videos you as a paying customer actually value spending money on. Some of that money could be used to increase payouts for content developers, hopefully increasing quality and user retention, ultimately spurring a positive cycle.

patient_zero• 7 years ago

Financial opinion pieces are always a difficult read for me, as they always seem slanted in favor of the company and against any hint of regulations n such. This one seems to have a tone of "can google survive the big bad regulators?" to it that makes me... tired.

Consider this excerpt:

    "In the U.S. and elsewhere, politicians from all party
 stripes have sought to attack Google or other tech giants for various perceived sins,including being too big for the
 good of industry and consumers. Being Google has meant dealing with perennial regulatory and political nightmares."

"sought to attack"... "perceived sins"... "Being google... has lead to nightmares"

Is this language not considered to be pushing the reader's opinion in a certain direction?

On a related note, I would like to postulate that monopolies are inherently anti-consumer because they are anti competitive by design.

A monopoly as a rule breaks capitalism, which only works because of competition. the fact that harm must be proven somehow is a ridiculous notion and too high a bar. The fact that this is even up for debate is wild on its face and I just don't understand why we're here except for maybe we as a country have a collective case of stockholm syndrome towards the market that the government has shown it is unable to control.

Consider the other Google-related link on this very site. Google decided to break adblocking, and because they are a monopoly they can do that.

This and other anti-trust laws we've slacked off on enforcing is how we've gotten to the point where there are very few choices for the consumer in many aspects of life here in the states.

dragonwriter• 7 years ago

On a related note, I would like to postulate that monopolies are inherently anti-consumer because they are anti competitive by design.

Monopolies are the fact of absence of competition by definition, but not necessarily anti-competitive by design.

But the absence of competition in a market isn't always bad for consumers.

First, a market may not be a consumer market, and more importantly monopolies may be bad for customers because they may improve the product that can be offered. (Netflix acquiring competition had made each streaming services worse, with smaller and less stable libraries and rising prices; it's been a bonanza for content owners, but not consumers.) One factor in why monopolies can be better for consumers is that they tend also to be monopsonies.

A new round of antitrust questions can’t go well for Google

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