8 ms·

Tech Giants Spend $80B to Make Sure No One Else Can Compete

140 points by lawrenceyan 8y ago

esalman 8y ago
I think internet is not meant to be regulated. But (US) companies like Google and Facebook dominate how people use the internet. It is all too obvious that these companies are greedy. Their goal is to maximize profit, and they will do anything to achieve that as long as within the US law. That includes putting thousands of human lives at stake. The new LastWeekTonight episode that came out today deals with this issue- how Facebook has been used to instigate ethnic cleansing in Myanmar.
- zavi 8y ago
  #FeelTheBern Those greedy corporations in their tophats and monocles.
hn_throwaway_99 8y ago
What a weird title. I don't disagree that the powers of America's tech giants are cause for concern, but what else would you expect these tech giants to do? Shouldn't we applaud them for investing to stay competitive? What would the author rather have them do with their money, more stock buybacks and executive bonuses?
- dawhizkid 8y ago
  anti-trust?
  - threeseed 8y ago
    It's only an anti-trust issue if we have a failed, monopoly market. In the case of Apple for example they are buying these machines to prevent a whole range of competitors e.g. Samsung, Microsoft, Lenovo from using aluminium in their products.
    - jplayer01 8y ago
      This only means that modern anti-trust regulations are mismatched and insufficient for the modern marketplace, not that companies like Google are innocent of monopoly-like behavior.
  - zavi 8y ago
    Anti-trust your mom
    - dang 8y ago
      If you continue to post unsubstantive comments to HN, we're going to have to ban you, so would you please stop?
- mc32 8y ago
  It's very clock-bait. While the what the article says is true for tech, the same is true for most major industries: The continue to invest in order to remain competitive, from Petrochemicals, to Heavy Industry, to Car MFGs, to Pharmaceuticals. It's nothing new. the only thing "new" is that tech is such large piece if that investment pie.
altoidaltoid 8y ago
Ongoing disruption is expensive
- vuln 8y ago
  You're damn right. Look at the defense budget. Even under a Democrat it increased.
threeseed 8y ago
To be fair they are spending that money to make sure that other giant competitors can't compete. It doesn't really affect the majority of startups or SMBs.
- vuln 8y ago
  Really? Looks like they buy out anyone that ever had a chance to compete. https://en.m.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Facebook https://en.m.wikipedia.org/wiki/List_of_mergers_and_acquisit...
  - threeseed 8y ago
    Are you saying these companies didn't want to be acquired ? Because pretty sure they were thrilled to (a) get paid and (b) have their product be used by pretty much the entire planet.
    - grandmczeb 8y ago
      Not to mention, a successful exit encourages new startups in the same area.
    - jplayer01 8y ago
      Who cares how thrilled they are? It doesn't change the fact that it stifles innovation. As for being used by the entire planet, I guess you missed all the companies/products that are shutdown after being bought?
fzeroracer 8y ago
While I think the article is pretty low quality I agree with the premise all the same. The internet as a whole is probably one of the least regulated markets you can find yourself in (ignoring the oncoming ISP problems for a second), and yet we see it dominated by a few large companies What stops smaller search engines from competing? Or smaller social media alternatives to Facebook? To me I think the answer is simple: Once you reach a certain size you can continue to squash competition through sheer momentum. For the people who are more tech savvy we might switch to using DuckDuckGo or Vivaldi but even my parents who are nigh-illiterate when it comes to computers knows about Facebook, Google and Chrome. Heck, every time we tell someone to 'just Google it', we see how successful Google is with capturing mind share.
- twblalock 8y ago
  As a counterpoint: in the 1990s the US government was convinced that Microsoft was an unassailable monopoly dominating all areas of technology. Competition could not defeat it; only government action could defeat it. All of the arguments you made in your post, about size and market domination, were made about Microsoft in the late 1990s. The government did not break up Microsoft, but then Google came along, and nobody saw it coming. And Apple became a major player after nearly going out of business in the 90s, and Facebook dominated a market category called "social media" that nobody was thinking about in the late 1990s. It turned out that government action was not necessary, because competition actually did work, and it worked by creating new technologies that nobody expected. I doubt the people who are concerned about market dominance in 2018 know more than the people who were concerned about it in the late 1990s, and they are probably just as wrong.
  - fzeroracer 8y ago
    To be fair, there are many people nowadays that would argue that Microsoft is at or reaching monopoly-levels of dominance. Linux might as well not exist outside of software fields and developers. We see them exert that control every now and then too (such as their rampant ads and attempts to control browsers). Google, Facebook, Microsoft and Apple all tend to control different but large spheres of the internet. In those spheres they exert almost ironclad control over everything and we see them slowly creep more and more into our personal lives or gathering our personal data. I'm not sure how to say competition really worked in this case because we've seen new fields pop up followed by complete dominance by one company over that field.
ekianjo 8y ago
The comparison with GM does not hold much water. GM has been spending a lot more cumulatively over the years. They are in a mature industry and the ongoing capital spending is going to remain at lower levels compared to internet giants suddenly investing from scratch in manufacturing.
tylerjwilk00 8y ago
What a manipulative title. Have you no shame. In other news: McDonald's buys beef to make sure no one else can compete.
jondubois 8y ago
Also, another major force is that big companies tend to only do business with other big companies or startups that are connected to big VC funds which they themselves control or have strong connections with. If your startup did not receive funding from a big VC, then big companies will not do business with you and they will not use your product. It's incestuous and downright discriminatory. Companies are not legally allowed to discriminate based on race, gender or religion but they are allowed to discriminate based on how much capital you have and where you got it from. It's discrimination against the financially disconnected; it's not better at all and it's a vicious cycle.
- ladberg 8y ago
  While I don't really like the idea of what follows from it, companies choosing which other companies to do business with based on their capital makes perfect sense and shouldn't be banned.
  - quxbar 8y ago
    What about companies choosing to use inferior products because their board own a stake in the producer? What if the majority of shareholders are hurt by this choice, but they're unaware that it's being made? It's extremely common in my field and causes noticeable market inefficiency.
    - jondubois 8y ago
      Exactly, it's the same force at play and it's arguably capitalism's biggest problem. Nepotism (if it can be called that) tends to be inversely proportional to efficiency. In most technical fields, the person you know is almost certainly not the best person for the job.
anoplus 8y ago
I wonder if crowd funded open source search engine could be successful. If crowd funding done right and transparent, I am sure there will be a strong community behind it.

140 points by lawrenceyan 8y ago

I think internet is not meant to be regulated. But (US) companies like Google and Facebook dominate how people use the internet. It is all too obvious that these companies are greedy. Their goal is to maximize profit, and they will do anything to achieve that as long as within the US law. That includes putting thousands of human lives at stake. The new LastWeekTonight episode that came out today deals with this issue- how Facebook has been used to instigate ethnic cleansing in Myanmar.

zavi 8y ago
#FeelTheBern Those greedy corporations in their tophats and monocles.

hn_throwaway_99 8y ago

What a weird title. I don't disagree that the powers of America's tech giants are cause for concern, but what else would you expect these tech giants to do? Shouldn't we applaud them for investing to stay competitive? What would the author rather have them do with their money, more stock buybacks and executive bonuses?

dawhizkid 8y ago
anti-trust?
- threeseed 8y ago
  It's only an anti-trust issue if we have a failed, monopoly market. In the case of Apple for example they are buying these machines to prevent a whole range of competitors e.g. Samsung, Microsoft, Lenovo from using aluminium in their products.
  - jplayer01 8y ago
    This only means that modern anti-trust regulations are mismatched and insufficient for the modern marketplace, not that companies like Google are innocent of monopoly-like behavior.
- zavi 8y ago
  Anti-trust your mom
  - dang 8y ago
    If you continue to post unsubstantive comments to HN, we're going to have to ban you, so would you please stop?
mc32 8y ago
It's very clock-bait. While the what the article says is true for tech, the same is true for most major industries: The continue to invest in order to remain competitive, from Petrochemicals, to Heavy Industry, to Car MFGs, to Pharmaceuticals. It's nothing new. the only thing "new" is that tech is such large piece if that investment pie.

altoidaltoid 8y ago

Ongoing disruption is expensive

vuln 8y ago
You're damn right. Look at the defense budget. Even under a Democrat it increased.

threeseed 8y ago

To be fair they are spending that money to make sure that other giant competitors can't compete. It doesn't really affect the majority of startups or SMBs.

vuln 8y ago
Really? Looks like they buy out anyone that ever had a chance to compete. https://en.m.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Facebook https://en.m.wikipedia.org/wiki/List_of_mergers_and_acquisit...
- threeseed 8y ago
  Are you saying these companies didn't want to be acquired ? Because pretty sure they were thrilled to (a) get paid and (b) have their product be used by pretty much the entire planet.
  - grandmczeb 8y ago
    Not to mention, a successful exit encourages new startups in the same area.
  - jplayer01 8y ago
    Who cares how thrilled they are? It doesn't change the fact that it stifles innovation. As for being used by the entire planet, I guess you missed all the companies/products that are shutdown after being bought?

fzeroracer 8y ago

While I think the article is pretty low quality I agree with the premise all the same. The internet as a whole is probably one of the least regulated markets you can find yourself in (ignoring the oncoming ISP problems for a second), and yet we see it dominated by a few large companies What stops smaller search engines from competing? Or smaller social media alternatives to Facebook? To me I think the answer is simple: Once you reach a certain size you can continue to squash competition through sheer momentum. For the people who are more tech savvy we might switch to using DuckDuckGo or Vivaldi but even my parents who are nigh-illiterate when it comes to computers knows about Facebook, Google and Chrome. Heck, every time we tell someone to 'just Google it', we see how successful Google is with capturing mind share.

twblalock 8y ago
As a counterpoint: in the 1990s the US government was convinced that Microsoft was an unassailable monopoly dominating all areas of technology. Competition could not defeat it; only government action could defeat it. All of the arguments you made in your post, about size and market domination, were made about Microsoft in the late 1990s. The government did not break up Microsoft, but then Google came along, and nobody saw it coming. And Apple became a major player after nearly going out of business in the 90s, and Facebook dominated a market category called "social media" that nobody was thinking about in the late 1990s. It turned out that government action was not necessary, because competition actually did work, and it worked by creating new technologies that nobody expected. I doubt the people who are concerned about market dominance in 2018 know more than the people who were concerned about it in the late 1990s, and they are probably just as wrong.
- fzeroracer 8y ago
  To be fair, there are many people nowadays that would argue that Microsoft is at or reaching monopoly-levels of dominance. Linux might as well not exist outside of software fields and developers. We see them exert that control every now and then too (such as their rampant ads and attempts to control browsers). Google, Facebook, Microsoft and Apple all tend to control different but large spheres of the internet. In those spheres they exert almost ironclad control over everything and we see them slowly creep more and more into our personal lives or gathering our personal data. I'm not sure how to say competition really worked in this case because we've seen new fields pop up followed by complete dominance by one company over that field.

ekianjo 8y ago

The comparison with GM does not hold much water. GM has been spending a lot more cumulatively over the years. They are in a mature industry and the ongoing capital spending is going to remain at lower levels compared to internet giants suddenly investing from scratch in manufacturing.

tylerjwilk00 8y ago

What a manipulative title. Have you no shame. In other news: McDonald's buys beef to make sure no one else can compete.

jondubois 8y ago

Also, another major force is that big companies tend to only do business with other big companies or startups that are connected to big VC funds which they themselves control or have strong connections with. If your startup did not receive funding from a big VC, then big companies will not do business with you and they will not use your product. It's incestuous and downright discriminatory. Companies are not legally allowed to discriminate based on race, gender or religion but they are allowed to discriminate based on how much capital you have and where you got it from. It's discrimination against the financially disconnected; it's not better at all and it's a vicious cycle.

ladberg 8y ago
While I don't really like the idea of what follows from it, companies choosing which other companies to do business with based on their capital makes perfect sense and shouldn't be banned.
- quxbar 8y ago
  What about companies choosing to use inferior products because their board own a stake in the producer? What if the majority of shareholders are hurt by this choice, but they're unaware that it's being made? It's extremely common in my field and causes noticeable market inefficiency.
  - jondubois 8y ago
    Exactly, it's the same force at play and it's arguably capitalism's biggest problem. Nepotism (if it can be called that) tends to be inversely proportional to efficiency. In most technical fields, the person you know is almost certainly not the best person for the job.

anoplus 8y ago

I wonder if crowd funded open source search engine could be successful. If crowd funding done right and transparent, I am sure there will be a strong community behind it.