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> Perhaps it is paid for by things like Maps and YouTube. This is why monopoly rules exist, and why it's not quite so simple. Leveraging strong market position

> Perhaps it is paid for by things like Maps and YouTube. This is why monopoly rules exist, and why it's not quite so simple. Leveraging strong market position in one market, say search/advertising, to undercut prices in a completely different market is clear-cut anti-competitive behavior. My retort to your argument would be: why even do hardware / Android at all? Because it's a distribution mechanism for _their_ services. If you leverage market dominance to expand that distribution network with fewer / no alternatives for consumers, that's like anti-trust 101.

fixermark 8y ago
> Leveraging strong market position in one market, say search/advertising, to undercut prices in a completely different market is clear-cut anti-competitive behavior. Is it less clear how monopoly rules work if the price is "free?" If a company can offer a service for free by supplementing the cost with bundling (in a market where the going rate is "free") vs. not offering it at all, I'm not sure that's considered the same by US monopoly law (I have no idea of EU monopoly law).
- s3r3nity 8y ago
  It's a reasonable question - but the price can never be truly "free," because there's a cost to investment / build that product - meaning costs are non-zero. Therefore the negative profit in the short-term due to pricing is called "undercutting," as other companies (generally) don't have that luxury in the long run. You have to ask: why is it free? - A thousand engineers working on a non-revenue product for Google is like "pennies," when it might be a whole company anywhere else. - How are you funding that negative profit? Using leverage and profit from strong market position elsewhere. Therefore: anti-competitive, as other companies in the space don't have similar leverage. Now, a startup can, say, operate at negative profit and not count as "anti-competitive," because a startup most likely has fractional market share. But imagine you're building a startup in a brand new space, and Google decides to also enter that space. If you price your product at $10, and Google says "we're pricing at $0," you can imagine how no one could compete with that for the long-term. Hence why monopoly / anti-competitive rules are important.
  - fixermark 8y ago
    If we're talking app stores, I think it's free because no consumer would pay for it. F-Droid is also free.
    - shock 8y ago
      I don't think this argument holds generally. For example people used to pay for GPS apps (iGO, TomTom, etc.) before Google Maps/other navi apps were available for "free" on smartphones. Google, in fact, might have destroyed a market by making Google Maps "free".
      - petre 8y ago
        > Google, in fact, might have destroyed a market by making Google Maps "free". Might is an understatement. Google destroyed the market leading to Navteq and Tele Atlas being aquired by Nokia and TomTom.
      - s3r3nity 8y ago
        Well that, AND prioritizing their Maps product above better offerings in the marketplace in search results early on in its lifecycle, when it was trying to get scale and data to improve while hurting competitors.
        fixermark 8y ago
        I don't remember the existence of better offerings early in the Maps lifecycle that Google search prioritized Maps results over. Maybe I'm too young? There was Mapquest, and to my memory, Google came out of the starting gate with something close to feature parity with them.
        s3r3nity 8y ago
        Mapquest and Yahoo Maps were the dominant mapping platforms until Google Maps removed competitor links in the search results. [1] Google during this time was pushing for "universal search," which would break away from vertical search paradigms into a single blended set of results. This was also when traffic spiked to Google Maps and away from MapQuest / other competitors. And when you look at the data, the change in traffic is not due to users searching for "Google Maps" in the query more - but rather Google just linking to its own results more. [2] It was when I knew the whole "Don't be evil" motto was bullshit. [1] https://searchengineland.com/google-no-longer-linking-to-yahoo-mapquest-maps-10267 https://searchengineland.com/google-no-longer-linking-to-yah... [2] https://searchengineland.com/comscore-to-report-google-maps-now-number-1-16570 https://searchengineland.com/comscore-to-report-google-maps-...
- rayiner 8y ago
  The going rate in the smartphone OS market doesn't have to be "free." Symbian charged a license fee. Microsoft charged a license fee. Google decided to release Android for free, because they could make more money using Android as a vehicle for the rest of its platform. Having done that, and pushed all the competitors out of the market by giving Android away for nothing, Google can hardly argue that it should be allowed to bundle because the "going rate" for a smartphone OS is now free.
gowld 8y ago
Remember when giving away a web browser was illegal? Is giving away open source software and selling consulting services an anti-competitive abuse in the software services market?
- GeekyBear 8y ago
  Giving away a web browser was not what was found to be illegal. Using a large market share in one area (personal computer operating systems) as a weapon against competitors in another area (web browsers) was found to be illegal.
- scarface74 8y ago
  Microsoft didn’t just “give away” the browser. It also forced OEMs not to bundle a competing browser. Much like Google would not allow OEMs to both build Google Android devices and non Google Android devices based solely on AOSP.
deleted 8y ago
[deleted]

fixermark 8y ago

> Leveraging strong market position in one market, say search/advertising, to undercut prices in a completely different market is clear-cut anti-competitive behavior. Is it less clear how monopoly rules work if the price is "free?" If a company can offer a service for free by supplementing the cost with bundling (in a market where the going rate is "free") vs. not offering it at all, I'm not sure that's considered the same by US monopoly law (I have no idea of EU monopoly law).

s3r3nity 8y ago
It's a reasonable question - but the price can never be truly "free," because there's a cost to investment / build that product - meaning costs are non-zero. Therefore the negative profit in the short-term due to pricing is called "undercutting," as other companies (generally) don't have that luxury in the long run. You have to ask: why is it free? - A thousand engineers working on a non-revenue product for Google is like "pennies," when it might be a whole company anywhere else. - How are you funding that negative profit? Using leverage and profit from strong market position elsewhere. Therefore: anti-competitive, as other companies in the space don't have similar leverage. Now, a startup can, say, operate at negative profit and not count as "anti-competitive," because a startup most likely has fractional market share. But imagine you're building a startup in a brand new space, and Google decides to also enter that space. If you price your product at $10, and Google says "we're pricing at $0," you can imagine how no one could compete with that for the long-term. Hence why monopoly / anti-competitive rules are important.
- fixermark 8y ago
  If we're talking app stores, I think it's free because no consumer would pay for it. F-Droid is also free.
  - shock 8y ago
    I don't think this argument holds generally. For example people used to pay for GPS apps (iGO, TomTom, etc.) before Google Maps/other navi apps were available for "free" on smartphones. Google, in fact, might have destroyed a market by making Google Maps "free".
    - petre 8y ago
      > Google, in fact, might have destroyed a market by making Google Maps "free". Might is an understatement. Google destroyed the market leading to Navteq and Tele Atlas being aquired by Nokia and TomTom.
    - s3r3nity 8y ago
      Well that, AND prioritizing their Maps product above better offerings in the marketplace in search results early on in its lifecycle, when it was trying to get scale and data to improve while hurting competitors.
      - fixermark 8y ago
        I don't remember the existence of better offerings early in the Maps lifecycle that Google search prioritized Maps results over. Maybe I'm too young? There was Mapquest, and to my memory, Google came out of the starting gate with something close to feature parity with them.
        s3r3nity 8y ago
        Mapquest and Yahoo Maps were the dominant mapping platforms until Google Maps removed competitor links in the search results. [1] Google during this time was pushing for "universal search," which would break away from vertical search paradigms into a single blended set of results. This was also when traffic spiked to Google Maps and away from MapQuest / other competitors. And when you look at the data, the change in traffic is not due to users searching for "Google Maps" in the query more - but rather Google just linking to its own results more. [2] It was when I knew the whole "Don't be evil" motto was bullshit. [1] https://searchengineland.com/google-no-longer-linking-to-yahoo-mapquest-maps-10267 https://searchengineland.com/google-no-longer-linking-to-yah... [2] https://searchengineland.com/comscore-to-report-google-maps-now-number-1-16570 https://searchengineland.com/comscore-to-report-google-maps-...
rayiner 8y ago
The going rate in the smartphone OS market doesn't have to be "free." Symbian charged a license fee. Microsoft charged a license fee. Google decided to release Android for free, because they could make more money using Android as a vehicle for the rest of its platform. Having done that, and pushed all the competitors out of the market by giving Android away for nothing, Google can hardly argue that it should be allowed to bundle because the "going rate" for a smartphone OS is now free.

gowld 8y ago

Remember when giving away a web browser was illegal? Is giving away open source software and selling consulting services an anti-competitive abuse in the software services market?

GeekyBear 8y ago
Giving away a web browser was not what was found to be illegal. Using a large market share in one area (personal computer operating systems) as a weapon against competitors in another area (web browsers) was found to be illegal.
scarface74 8y ago
Microsoft didn’t just “give away” the browser. It also forced OEMs not to bundle a competing browser. Much like Google would not allow OEMs to both build Google Android devices and non Google Android devices based solely on AOSP.

deleted 8y ago

[deleted]