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Another reminder, alongside the apparent Microsoft GitHub acquision, that regulators need to step up and prevent large tech firms from acting anti competitively

Another reminder, alongside the apparent Microsoft GitHub acquision, that regulators need to step up and prevent large tech firms from acting anti competitively. From another Economist article ("How to Tame the Tech Titans", https://www.economist.com/leaders/2018/01/18/how-to-tame-the-tech-titans https://www.economist.com/leaders/2018/01/18/how-to-tame-the...): > Two broad changes of thinking would go a long way towards sensibly taming the titans. The first is to make better use of existing competition law. Trustbusters should scrutinise mergers to gauge whether a deal is likely to neutralise a potential long-term threat, even if the target is small at the time. Such scrutiny might have prevented Facebook’s acquisition of Instagram and Google’s of Waze, which makes navigation software. To ensure that the platforms do not favour their own products, oversight groups could be set up to deliberate on complaints from rivals—a bit like the independent “technical committee” created by the antitrust case against Microsoft in 2001. Immunity to content liability must go, too. > Second, trustbusters need to think afresh about how tech markets work. A central insight, one increasingly discussed among economists and regulators, is that personal data are the currency in which customers actually buy services. Through that prism, the tech titans receive valuable information—on their users’ behaviour, friends and purchasing habits—in return for their products. Just as America drew up sophisticated rules about intellectual property in the 19th century, so it needs a new set of laws to govern the ownership and exchange of data, with the aim of giving solid rights to individuals.

osrec 8y ago
The problem is that regulators rarely have the farsightedness to see which acquisitions are indeed anti-competitive. And I don't think it's always obvious, especially on the bleeding edge of tech. The farsighted ones are probably part of the acquiring company (or at least acting as consultants to the hiring company).
- weliketocode 8y ago
  Definitely. Instead of a regulatory body proactively thinking about practices as anti-competitive, there appears to be a very reactionary approach of punishing large incumbents that pursue m&a out of necessity or approaching anti-competitiveness as partisan politics.
  - osrec 8y ago
    Yeah, I think regulators realise we have a monopoly brewing once they see people buying Google branded milk from Googlemarts, having driven there in Googlemobiles, using traffic directions from... Google.
    - whatshisface 8y ago
      That's not a monopoly - a monopoly would be if for at minimum one of those things, you could only find a Google-controlled version.
      - Clubber 8y ago
        That's not true, but it's close; at least according to US law. Microsoft was deemed a monopoly in 2000 (which is actually legal) and abused it's monopolistic powers (which is not legal) while other OS's existed in the market: Apple, BeOS, Novell, Linux, OS/2, etc. https://en.wikipedia.org/wiki/United_States_v._Microsoft_Corp https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor....
        1123581321 8y ago
        As you know, Microsoft had more than 90% of the OS market worldwide. While other OSes did exist, they didn’t provide meaningful competition. The person to which you replied meant that Google Milk is only a problem if Google abuses its search monopoly to push the market away from other milk vendors, not that Google isn’t a monopoly as long as another search engine exists. Their main point was that it isn’t abusing a monopoly to launch a broad array of products if each of those products compete in a fair market.
        deleted 8y ago
        [deleted]
      - osrec 8y ago
        I think it is monopolistic. If one company has so much influence in your life that they can direct you to their own products, so that you habitually start relying on them for almost anything, then they have the ability to develop a wide range of monopolies by influencing your choices. E.g. Google has a monopoly as a trusted source of all information - what's even stranger, is that they are seen as a non-interfering third party by most users - because of this, many other monopolies can emerge, because they have the ability to control "truth" and "popular opinion".
BurningFrog 8y ago
> Such scrutiny might have prevented Facebook’s acquisition of Instagram and Google’s of Waze, Then again one of the main reasons people start companies like Instagram and Waze is so they can be bought by these giants.
- replicatorblog 8y ago
  I think people forget how inconsequential Instagram seemed at the time Facebook bought it. It was popular and growing fast, but the notion that this 12-person startup was worth a billion dollars was laughable. Read contemporaneous accounts and many reporters were incredulous. It was prima facie evidence of a bubble. I don't know if a regulator would have had the foresight to see Instagram, which was still as much known for its filters as its social network as anything but a compliment? Look at how Instagram was seen as one of many similar products at the time: https://www.engadget.com/2012/05/25/instacrt-puts-all-other-photo-filter-apps-to-shame-video/ https://www.engadget.com/2012/05/25/instacrt-puts-all-other-... https://lifehacker.com/5970648/five-best-photo-filter-apps https://lifehacker.com/5970648/five-best-photo-filter-apps An early rival, Hipstamatic, was named the Apple App of the Year in 2010: https://techcrunch.com/2010/12/09/apple-top-apps-2010/ https://techcrunch.com/2010/12/09/apple-top-apps-2010/ Insta has taken on a life of its own over the last 2-3 years, but if they had chose to go their own way, whose to say Facebook wouldn't have clobbered them, in much the way they nuked Foursquare. I'm not opposed to regulation, per se, but we should also be careful not to indulge in revisionist history.
  - skinnymuch 8y ago
    Yeah this is definitely correct. I was on board believing FB would become bigger and bigger. But the Instagram acquisition seemed crazy. How many users did Instagram have when it was acquired? 30 million? How could anyone think Instagram would get to where it did (Instagram is supposed to do $6-7B in revenue this year). Also, FB itself wasn’t what it is now at the time either.
    - vii 8y ago
      The big platform companies see engagement and growth metrics for all startups, not just the numbers they are pitched. The public didn't expect Instagram to be a success - Facebook had more information. This information asymmetry is a big issue. It means big platforms can detect competitors early and know when to offer generous acquisition deals to neutralise them. The people working in these competitors don't have this comparative basis to tell how well they're doing. As a small player, it's very hard to see how successful your competitors are. For example, Google and Apple only provide vague statistics about number of downloads in their appstores, rounded very loosely. But they internally can track detailed metrics. Facebook and Twitter are used as distribution mechanisms, for login, and as sources of contact info. They can glean insights from that. Facebook has even better insights through the Onavo VPN, which as it tunnels traffic from other apps, can even show which features are doing well https://techcrunch.com/2018/02/12/facebook-starts-pushing-its-data-tracking-onavo-vpn-within-its-main-mobile-app/ https://techcrunch.com/2018/02/12/facebook-starts-pushing-it...
scarface74 8y ago
Seeing that Github is reportedly unprofitable, if they aren't acquired by a profitable company, what's the alternative? What do you think Microsoft would do to harm Github? I doubt it would be as bad as what became of SourceForge.
- mikekchar 8y ago
  If I had a stake in Github, I would be delighted to sell it to Microsoft. I don't have a stake in Github. I am a user with 2 distinct roles. In one role, I work for a company that pays for Github's services. Github has done a very good job hiring people who have maintained the service as it scaled to very high levels. I am concerned that Microsoft will be unable or even unwilling to keep those teams intact. They may wish to restructure the organisation. They may wish to change middle management in an attempt to make it profitable, etc, etc. Github has had a good track record with us. Organisationally we have no experience with Microsoft, so it's a risk. Personally, I spent a chunk of my career working in the MS world (working with gold/platinum level partners). This is ancient history by now (10 years ago), but my experience with MS support was abysmal. Essentially "support" amounted to having a telephone number where I could report issues. No follow up allowed. No notification if the issue was ever resolved. Upgrade to the next version when it comes out and check for yourself to see if it has been fixed. Hey, that's why we pay for those MSDN subscriptions! Though, if you have about 1000 seats in your license, you can get real support (if you are lucky). Maybe that's all changed and they are fantastic, but once bitten twice shy as they say. In my other role as a consumer with Github, I have my personal repositories there. I still vividly remember MS's push to create a division between "hobbyists" and "professional developers". The idea was to provide different levels of access based on the idea that "professional developers" work for large companies that will pay for high licensing fees and extensive support contracts (which only really seem to count if you have at least 1000 seats... see above). "Hobbyists" are intentionally crippled by giving them just enough access to seem like they can do something, but denying them crucial things. With the release of VSCode, etc, I can see that the company has changed, but old ideas die hard. 10 or 15 years is not enough time for me to feel like I can trust the company. Will they slowly screw me over by using their dominant position to "boil the frog" -- slowly crippling their "hobbyists" without ever doing anything overt enough to cause them to jump out of the pot? Only time will tell, but yes I'm quite concerned. To be fair, MS is not the only potential purchaser who would concern me. At least it isn't Oracle!
tomcam 8y ago
How is it anticompetitive if Microsoft buys GitHub?
iteabagkevin2 8y ago
These would be horrible. You make it harder to sell your startup with random oversight of small acquisitions, you’re going to scare away small and medium sized investors.
watwut 8y ago
If it is true that GitHub run on long term loss, then itself is important anti-competitive problem.
specialist 8y ago
Cashectomies. Applied to wind fall profits, savings, estates, endowments. Keep the money moving.

osrec 8y ago

The problem is that regulators rarely have the farsightedness to see which acquisitions are indeed anti-competitive. And I don't think it's always obvious, especially on the bleeding edge of tech. The farsighted ones are probably part of the acquiring company (or at least acting as consultants to the hiring company).

weliketocode 8y ago
Definitely. Instead of a regulatory body proactively thinking about practices as anti-competitive, there appears to be a very reactionary approach of punishing large incumbents that pursue m&a out of necessity or approaching anti-competitiveness as partisan politics.
- osrec 8y ago
  Yeah, I think regulators realise we have a monopoly brewing once they see people buying Google branded milk from Googlemarts, having driven there in Googlemobiles, using traffic directions from... Google.
  - whatshisface 8y ago
    That's not a monopoly - a monopoly would be if for at minimum one of those things, you could only find a Google-controlled version.
    - Clubber 8y ago
      That's not true, but it's close; at least according to US law. Microsoft was deemed a monopoly in 2000 (which is actually legal) and abused it's monopolistic powers (which is not legal) while other OS's existed in the market: Apple, BeOS, Novell, Linux, OS/2, etc. https://en.wikipedia.org/wiki/United_States_v._Microsoft_Corp https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor....
      - 1123581321 8y ago
        As you know, Microsoft had more than 90% of the OS market worldwide. While other OSes did exist, they didn’t provide meaningful competition. The person to which you replied meant that Google Milk is only a problem if Google abuses its search monopoly to push the market away from other milk vendors, not that Google isn’t a monopoly as long as another search engine exists. Their main point was that it isn’t abusing a monopoly to launch a broad array of products if each of those products compete in a fair market.
        deleted 8y ago
        [deleted]
    - osrec 8y ago
      I think it is monopolistic. If one company has so much influence in your life that they can direct you to their own products, so that you habitually start relying on them for almost anything, then they have the ability to develop a wide range of monopolies by influencing your choices. E.g. Google has a monopoly as a trusted source of all information - what's even stranger, is that they are seen as a non-interfering third party by most users - because of this, many other monopolies can emerge, because they have the ability to control "truth" and "popular opinion".

BurningFrog 8y ago

> Such scrutiny might have prevented Facebook’s acquisition of Instagram and Google’s of Waze, Then again one of the main reasons people start companies like Instagram and Waze is so they can be bought by these giants.

replicatorblog 8y ago
I think people forget how inconsequential Instagram seemed at the time Facebook bought it. It was popular and growing fast, but the notion that this 12-person startup was worth a billion dollars was laughable. Read contemporaneous accounts and many reporters were incredulous. It was prima facie evidence of a bubble. I don't know if a regulator would have had the foresight to see Instagram, which was still as much known for its filters as its social network as anything but a compliment? Look at how Instagram was seen as one of many similar products at the time: https://www.engadget.com/2012/05/25/instacrt-puts-all-other-photo-filter-apps-to-shame-video/ https://www.engadget.com/2012/05/25/instacrt-puts-all-other-... https://lifehacker.com/5970648/five-best-photo-filter-apps https://lifehacker.com/5970648/five-best-photo-filter-apps An early rival, Hipstamatic, was named the Apple App of the Year in 2010: https://techcrunch.com/2010/12/09/apple-top-apps-2010/ https://techcrunch.com/2010/12/09/apple-top-apps-2010/ Insta has taken on a life of its own over the last 2-3 years, but if they had chose to go their own way, whose to say Facebook wouldn't have clobbered them, in much the way they nuked Foursquare. I'm not opposed to regulation, per se, but we should also be careful not to indulge in revisionist history.
- skinnymuch 8y ago
  Yeah this is definitely correct. I was on board believing FB would become bigger and bigger. But the Instagram acquisition seemed crazy. How many users did Instagram have when it was acquired? 30 million? How could anyone think Instagram would get to where it did (Instagram is supposed to do $6-7B in revenue this year). Also, FB itself wasn’t what it is now at the time either.
  - vii 8y ago
    The big platform companies see engagement and growth metrics for all startups, not just the numbers they are pitched. The public didn't expect Instagram to be a success - Facebook had more information. This information asymmetry is a big issue. It means big platforms can detect competitors early and know when to offer generous acquisition deals to neutralise them. The people working in these competitors don't have this comparative basis to tell how well they're doing. As a small player, it's very hard to see how successful your competitors are. For example, Google and Apple only provide vague statistics about number of downloads in their appstores, rounded very loosely. But they internally can track detailed metrics. Facebook and Twitter are used as distribution mechanisms, for login, and as sources of contact info. They can glean insights from that. Facebook has even better insights through the Onavo VPN, which as it tunnels traffic from other apps, can even show which features are doing well https://techcrunch.com/2018/02/12/facebook-starts-pushing-its-data-tracking-onavo-vpn-within-its-main-mobile-app/ https://techcrunch.com/2018/02/12/facebook-starts-pushing-it...

scarface74 8y ago

Seeing that Github is reportedly unprofitable, if they aren't acquired by a profitable company, what's the alternative? What do you think Microsoft would do to harm Github? I doubt it would be as bad as what became of SourceForge.

mikekchar 8y ago
If I had a stake in Github, I would be delighted to sell it to Microsoft. I don't have a stake in Github. I am a user with 2 distinct roles. In one role, I work for a company that pays for Github's services. Github has done a very good job hiring people who have maintained the service as it scaled to very high levels. I am concerned that Microsoft will be unable or even unwilling to keep those teams intact. They may wish to restructure the organisation. They may wish to change middle management in an attempt to make it profitable, etc, etc. Github has had a good track record with us. Organisationally we have no experience with Microsoft, so it's a risk. Personally, I spent a chunk of my career working in the MS world (working with gold/platinum level partners). This is ancient history by now (10 years ago), but my experience with MS support was abysmal. Essentially "support" amounted to having a telephone number where I could report issues. No follow up allowed. No notification if the issue was ever resolved. Upgrade to the next version when it comes out and check for yourself to see if it has been fixed. Hey, that's why we pay for those MSDN subscriptions! Though, if you have about 1000 seats in your license, you can get real support (if you are lucky). Maybe that's all changed and they are fantastic, but once bitten twice shy as they say. In my other role as a consumer with Github, I have my personal repositories there. I still vividly remember MS's push to create a division between "hobbyists" and "professional developers". The idea was to provide different levels of access based on the idea that "professional developers" work for large companies that will pay for high licensing fees and extensive support contracts (which only really seem to count if you have at least 1000 seats... see above). "Hobbyists" are intentionally crippled by giving them just enough access to seem like they can do something, but denying them crucial things. With the release of VSCode, etc, I can see that the company has changed, but old ideas die hard. 10 or 15 years is not enough time for me to feel like I can trust the company. Will they slowly screw me over by using their dominant position to "boil the frog" -- slowly crippling their "hobbyists" without ever doing anything overt enough to cause them to jump out of the pot? Only time will tell, but yes I'm quite concerned. To be fair, MS is not the only potential purchaser who would concern me. At least it isn't Oracle!

tomcam 8y ago

How is it anticompetitive if Microsoft buys GitHub?

iteabagkevin2 8y ago

These would be horrible. You make it harder to sell your startup with random oversight of small acquisitions, you’re going to scare away small and medium sized investors.

watwut 8y ago

If it is true that GitHub run on long term loss, then itself is important anti-competitive problem.

specialist 8y ago

Cashectomies. Applied to wind fall profits, savings, estates, endowments. Keep the money moving.