4 ms·

That is absolutely insane. Should we seriously be considering anti-trust regulators to crack down on their insane growth?

by omot 9y ago

solomatov 9y ago
As far as I understand, In the US monopoly is fine unless it leads to increase of price paid by consumers. EU probably has different opinion.
- jonbarker 9y ago
  In this case then since the users are the product and rightfully as said product pay zero dollars to be the product, maybe fb is an advertising monopoly?
- omot 9y ago
  Didn't the article state that advertisers are indeed paying higher rates?
  - jonbarker 9y ago
    fb can claim (maybe legitimately) that the higher rates are thanks to higher quality performance in the form of conversion rates on various things.
- darpa_escapee 9y ago
  I was under the impression that even this was okay, it was using a monopoly position in one market to take over another market that wasn't kosher.
  - jonbarker 9y ago
    If I recall correctly in the US court case history they ruled one couldn't both own the means of production (ie movie studios) and the means of distribution of content (ie movie theaters). Not sure if the movie business used market power in one to take over the other, but that would be interesting to know. If you take it as an assumption that the only things that changed with the internet were 1) the volume of content increased and 2) the barrier to entry reduced, then it gets tricky. Example: the Huffington Post proved that content creators would be willing to do so for personal brand exposure instead of pay (kind of like I'm doing now as I am now realizing...). FB has created a content collection and distribution engine "employing" people who are willing to populate it for free in exchange for some non-monetary benefit. This doesn't really get FB out of the antitrust problem IMO.
  - icebraining 9y ago
    It's more complex than that. The law says they can't "unreasonably restrict competition", and then courts have to decide what that actually means. https://en.wikipedia.org/wiki/Sherman_Antitrust_Act https://en.wikipedia.org/wiki/Sherman_Antitrust_Act
- JCole 9y ago
  Decrease you mean I think
- askafriend 9y ago
  That's the issue here. Price as a proxy works in a world where manufactured goods account for a large portion of economic value being generated but not in this new unprecedented digital world where the value is intangible and the services are often free. Networks are the new monopolies in this new world and Facebook has the largest and most engaged one which makes it damn near impossible for new incumbents to participate in the market. Just look at Snap. The question is this: how many companies or products were not created or could not sustain due to Facebook's built in monopoly? And of those that were created, how many will thrive? And of those that can thrive, how many can afford to not to be bought by FB? I don't have the answers, but I'm convinced that these are the right questions. Price as a proxy just doesn't seem to make sense in this context.
TomSawyer 9y ago
The point of anti-trust laws is not to punish success, but to police against an entity using their dominant position in one market to take over a different market.
- Silhouette 9y ago
  This is an interesting question for two-sided operations like Google and Facebook. Having a near-monopoly in online search also gives Google a near-monopsony in online search advertising. Likewise for Facebook with social networking. I'm wary of introducing regulation without clear evidence of its necessity. However, there is a reasonable argument that if exploiting a monopoly to gain advantage in an adjacent market can be harmful, then exploiting a monopoly to gain an advantage in an opposing market could be harmful too. It therefore seems reasonable to ask whether the traditional applications of anti-trust principles are still appropriate for these huge modern tech markets.
  - hueving 9y ago
    I'm sorry, but what are you suggesting is harmful here?
    - Silhouette 9y ago
      Businesses too small to have a real point of contact with either Google or Facebook living or dying by the whims (or mistakes) of their algorithms, for one thing. Prices paid by the advertisers more generally, for another. There are only two games in town, and both of them go out of their way to obscure what you're really getting in return for your money.
- loceng 9y ago
  So what about FB replicating all of SNAP and overtaking them rapidly, taking the advertising growth market share they would of had otherwise? Time to breakup FB?
  - nradov 9y ago
hueving 9y ago
I'm curious, what leads you to think that super successful companies should be broken up if they aren't engaging in anti-competitive practices?

That is absolutely insane. Should we seriously be considering anti-trust regulators to crack down on their insane growth?

by omot 9y ago

That is absolutely insane. Should we seriously be considering anti-trust regulators to crack down on their insane growth?

solomatov 9y ago

As far as I understand, In the US monopoly is fine unless it leads to increase of price paid by consumers. EU probably has different opinion.

jonbarker 9y ago
In this case then since the users are the product and rightfully as said product pay zero dollars to be the product, maybe fb is an advertising monopoly?
omot 9y ago
Didn't the article state that advertisers are indeed paying higher rates?
- jonbarker 9y ago
  fb can claim (maybe legitimately) that the higher rates are thanks to higher quality performance in the form of conversion rates on various things.
darpa_escapee 9y ago
I was under the impression that even this was okay, it was using a monopoly position in one market to take over another market that wasn't kosher.
- jonbarker 9y ago
  If I recall correctly in the US court case history they ruled one couldn't both own the means of production (ie movie studios) and the means of distribution of content (ie movie theaters). Not sure if the movie business used market power in one to take over the other, but that would be interesting to know. If you take it as an assumption that the only things that changed with the internet were 1) the volume of content increased and 2) the barrier to entry reduced, then it gets tricky. Example: the Huffington Post proved that content creators would be willing to do so for personal brand exposure instead of pay (kind of like I'm doing now as I am now realizing...). FB has created a content collection and distribution engine "employing" people who are willing to populate it for free in exchange for some non-monetary benefit. This doesn't really get FB out of the antitrust problem IMO.
- icebraining 9y ago
  It's more complex than that. The law says they can't "unreasonably restrict competition", and then courts have to decide what that actually means. https://en.wikipedia.org/wiki/Sherman_Antitrust_Act https://en.wikipedia.org/wiki/Sherman_Antitrust_Act
JCole 9y ago
Decrease you mean I think
askafriend 9y ago
That's the issue here. Price as a proxy works in a world where manufactured goods account for a large portion of economic value being generated but not in this new unprecedented digital world where the value is intangible and the services are often free. Networks are the new monopolies in this new world and Facebook has the largest and most engaged one which makes it damn near impossible for new incumbents to participate in the market. Just look at Snap. The question is this: how many companies or products were not created or could not sustain due to Facebook's built in monopoly? And of those that were created, how many will thrive? And of those that can thrive, how many can afford to not to be bought by FB? I don't have the answers, but I'm convinced that these are the right questions. Price as a proxy just doesn't seem to make sense in this context.

TomSawyer 9y ago

The point of anti-trust laws is not to punish success, but to police against an entity using their dominant position in one market to take over a different market.

Silhouette 9y ago
This is an interesting question for two-sided operations like Google and Facebook. Having a near-monopoly in online search also gives Google a near-monopsony in online search advertising. Likewise for Facebook with social networking. I'm wary of introducing regulation without clear evidence of its necessity. However, there is a reasonable argument that if exploiting a monopoly to gain advantage in an adjacent market can be harmful, then exploiting a monopoly to gain an advantage in an opposing market could be harmful too. It therefore seems reasonable to ask whether the traditional applications of anti-trust principles are still appropriate for these huge modern tech markets.
- hueving 9y ago
  I'm sorry, but what are you suggesting is harmful here?
  - Silhouette 9y ago
    Businesses too small to have a real point of contact with either Google or Facebook living or dying by the whims (or mistakes) of their algorithms, for one thing. Prices paid by the advertisers more generally, for another. There are only two games in town, and both of them go out of their way to obscure what you're really getting in return for your money.
loceng 9y ago
So what about FB replicating all of SNAP and overtaking them rapidly, taking the advertising growth market share they would of had otherwise? Time to breakup FB?
- nradov 9y ago

hueving 9y ago

I'm curious, what leads you to think that super successful companies should be broken up if they aren't engaging in anti-competitive practices?