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It isn't outdated, it is an economics definition of a monopoly, and isn't even that: a monopoly is perfectly fine, AS LONG AS the economic power isn't abused to

It isn't outdated, it is an economics definition of a monopoly, and isn't even that: a monopoly is perfectly fine, AS LONG AS the economic power isn't abused to prevent competition which harms consumers. What the author is proposing is that regulation is no longer based on economics and economic power, but on a vague definition of monopoly, and people are absurdly trigger-happy when calling something a monopoly. The reason why anti-trust is based on precise economic definitions is that it leaves as little room as possible for the government to favor friendly players. When you need to prove harm to consumers, the bar is high, as it should be. Otherwise, any government in power will simply abuse their own monopoly on regulation to favor and transfer wealth from society to friends. The classic example is: Coca-Cola has a 95% market share of the cola market in some countries. Does it mean it has a monopoly? No. If it had 100% of the cola market, would it have a monopoly? No. Because the cola market doesn't exist in isolation. Colas compete with all other sodas, with water, juices, etc. for a share of wallet and a share of stomach.

chrisco255 8y ago
That would depend on the antitrust laws in said country. And if Coke had 95% market share in the U.S., it could easily be ruled a monopoly.
- ucaetano 8y ago
  > And if Coke had 95% market share in the U.S., it could easily be ruled a monopoly. Nope. Because monopoly isn't just about market share. That's what people here don't seem to understand.
Nullabillity 8y ago
> The classic example is: Coca-Cola has a 95% market share of the cola market in some countries. Does it mean it has a monopoly? No. Effectively, yes. Why is the market so disfunctional that a single company has effectively swallowed all competition? > If it had 100% of the cola market, would it have a monopoly? No. Err, yes. > Because the cola market doesn't exist in isolation. Colas compete with all other sodas, with water, juices, etc. for a share of wallet and a share of stomach. And AT&T wasn't a monopoly, since you could just walk to the person you want to talk to. Oh, wait..
- imgabe 8y ago
  But you couldn't walk to any person to talk. Not in any way remotely similar to how you can drink water instead of Coke.
- tylerhou 8y ago
  You can easily substitute juice/off-brand colas for coke. You can also easily substitute FaceTime/Skype/Hangouts for phone calls (provided you’re not using mobile data)...
- matthewmacleod 8y ago
  That’s not a particularly convincing argument - it’s like saying that Sony has a monopoly in the PlayStation market - possibly true, but not that useful!
  - ucaetano 8y ago
    Exactly: you can absolutely always define a market here a company has a close-to-100% market share. That's why, to actually talk about a monopoly, you need to very precisely define the market. Take Facebook: Facebook has a monopoly in online, blue-themed social networks owned by Harvard dropouts. It doesn't have a monopoly on social networks, on communication, on online networks, on online ads, on online ads in social networks, on blue-themed online social networks, and even on blue-themed online social networks with a timeline feature.
    - Nullabillity 8y ago
      But being blue isn't a defining feature of Facebook (or any other social market), so it's not useful for defining the market that it operates in.
      - ucaetano 8y ago
        > But being blue isn't a defining feature of Facebook Indeed, nor is it a defining feature of the market. That is exactly my point: if your labe of "monopoly" relies on a non-defining feature of a market that sets it apart from other markets (meaning that there is little competition between borders), you definition of monopoly is useless.
inherentFloyd 8y ago
Power corrupts, man. Simply hiding behind a monopoly doesn't really absolve a company of wrongdoing simply because a monopoly isn't wrong. Also, in your example, Coke definitely has a monopoly on the cola market, even if it doesn't on the entire soda market. That's like saying a smaller cola company stands a chance on the global market because the smaller competitor is selling soda.
- ucaetano 8y ago
  > Also, in your example, Coke definitely has a monopoly on the cola market, even if it doesn't on the entire soda market. No, it doesn't. At least not by the economic definition of monopoly, which, when talking about regulation, is the one that matters. And even then, it is irrelevant, because the cola market doesn't exist in isolation.
nicoburns 8y ago
> What the author is proposing is that regulation is no longer based on economics and economic power, but on a vague definition of monopoly, and people are absurdly trigger-happy when calling something a monopoly. No, they're saying a company can have too much economic power without being a full monopoly.
- bilbo0s 8y ago
  >No, they're saying a company can have too much economic power without being a full monopoly... But that's not a problem. Monopolies are problems, not strong economically powerful companies. I mean, up in my neck of the woods, ADM and Cargill are unimaginably powerful economically speaking. But it just makes no sense to say that they are as dangerous as having one company that IS the entire food market.
  - AndrewKemendo 8y ago
    Yes, strong economically powerful companies are a problem. Or rather, lets say it like this: This history of strong economically powerful companies points to them being problematic for democratic societies. Why? Because the stickier the product, the more "powerful" the company, and the more likely they are to do things like regulatory capture and exert significant control of democratic levers. Make no mistake that corporations are political entities and are not-neutral in that respect. So the bigger the company, the more they can exert influence well beyond their ability to provide goods/services.
nimish 8y ago
Markets only work if they are competitive. Governments do not need to obey market rules, and shouldn't if it helps society. It's odd that you would be fine with a corporate monopoly exerting dominant power over its market (to extract more profit) but are distrustful of government exerting power to limit that from happening. Monopoly definition is political -- the idea that governments cannot and should not step in to police markets is a novel idea.
- ucaetano 8y ago
  > It's odd that you would be fine with a corporate monopoly exerting dominant power over its market (to extract more profit) Where did you get that idea from? I'm not. > Monopoly definition is political Nope, it is economics.
  - djrobstep 8y ago
    This might blow your mind but: Economics is political.
    - deleted 8y ago
      [deleted]
    - asdfasgasdgasdg 8y ago
      And politics is economics. And economics is physics. And physics is chemistry. And chemistry is math. All useless statements in the context of this discussion.
  - deleted 8y ago
    [deleted]
sonnyblarney 8y ago
a) They are monopolies by the classic definition. b) "a monopoly is perfectly fine, AS LONG AS the economic power isn't abused to prevent competition which harms consumers." This is kind of a non sequitur ... Of course they will prevent competition, that's the essential name of the game. Every company does this - this is not 'abuse' it's just how it works. Ergo, by your definition monopolies are all bad. I actually think some monopolies are good - when you have well run actor that has some external controls on prices etc. it provides stability among other things. c) To the extent that colas can be defined as a market, then they have a monopoly. 'Search' does exist aside an adjacent market in which content can be replaced, so it's not helpful. Google needs to be broken up. Search is so fundamentally essential ... it's like 'information neutrality'. The FANGS are total hyprocrits pushing for 'Net Neutrality'. Just as Comcast should not be able to offer anything but QoS and not read the content of my bites ... Google should not be able to offer anything but quality search. All their other products depend on their search monopoly. Much like Comcast would leverage looking at your packets. Much like Microsoft leverages their OS power to control office software etc.. Search, OS, maybe even Browsers - should be independent, just as Carriers can't use their power to get into other lines of business. The AT&T merger is bad news, they shouldn't be in the content business.
- wpasc 8y ago
  I frequently see people say "Google should be broken up" and I want to hear more on that argument. Meaning Google and Youtube should be separated? but then we're no longer talking about just their search dominance right? How could search alone be broken up if a large part of the complaint is about the dominance of their search? Moreover, it is pretty easy to not use google search? Why couldn't someone use DDG, Yahoo, Bing, etc.? despite it being defaulted to in browsers (you can change this), most people elect to use Google. If a company dominates a single sector through consumer choice, should they be broken up (esoecially when consumer could walk away)? I'm not try to be facetious, I would just like counter arguments
  - sonnyblarney 8y ago
    There are two arguments, one is about Search as a monopoly the other is about that power as it relates to other parts of the value chain. Google search is fundamentally better than DDG (for most purposes) because it has massive advantages that make it effectively unassailable. For example, I stopped using DDG because I rely on reverse image search. FYI DDG does not have its own crawler, it gets data from other sources. And it won't get reverse image search unless it does it itself ... which I doubt will happen. Maybe. And of course Yahoo is not a search engine either, it's not really an alternative at all. In order to compete with Google effectively, you'd have to build your own crawler etc.. It's essentially impossible. The number of engineers, data centres other components ... my gosh man. Consider for a moment that Google is a massive cash printing machine. Do you not think that VC's would be lining up, piling billions of dollars into competitors in order to take a piece of the action? Why is nobody - not even intelligent actors with a lot of cash to burn - investing in the most profitable business model of our era? Because the barriers to compete are absurdly high. It's a monopoly. And if it is - then we have to be very concerned about their relationship to adjacent layers of the value chain because of their ability to subsidize products to put others out of business. So you're aware that in free trade deals between nations, part of the deal includes measures to bar state actors from participating in some economies, and also, rules against 'dumping'. This is because if a nation state actor wants to, they could subsidize their own industries, wipe out competition in other nations, and then let their industry dominate. The same applies in value chain monopolies. Standard Oil didn't have 'better oil' or better practices than other Oil companies - they used control and ownership of the railroads to increase prices on their competitors and put them out of business. In a truly competitive landscape, there would be no Standard Oil. When Microsoft uses their ownership of the OS to put all other 'Office' solutions out of business, is that good for consumers? By the way - MS is still printing money hands over fist in Office Software. They are making billions. They are a de-facto standard, arguably a monopoly there. Why aren't investors lining up to create competitive solutions? (Because it's an unassailable monopoly). If Google decides to get into your line of business, and you are small, they will absolutely wipe you out if they want to, and it has nothing to do with having 'a better product'. Also consider for a moment how many of Google's other business parts could stand on their own as businesses? Google Analytics? Android? Chrome? Google Docs? Maps? They are all all money pits, strategic investments (i.e. 'moats') by Google to ensure the dominance of Google Search. How could a mobile OS vendor compete in a market where Google is using billions from one market, to dominate a different one, like mobile OS? They can't. Maybe in China, wherein there are non-market factors to protect their own makers. For the same reason that governments have mostly separated the transport of electricity from electricity production, for the same reason we have net neutrality, Google Search should possibly be pared off from the other businesses. Amazon is using massive profits from AWS to put retailers out of business. Amazon is not hugely profitable, but their AWS business unit is, ergo, the retail unit is probably losing money. How can retailers compete against Amazon, which is effectively selling at a loss? They can't. Consumers generally don't win when a de-facto or real monopoly in one market, uses that power to wipe out competition in others. There is essentially no real competition in search, nobody is putting money in it. Same for office software. Given how much money is being minted in those markets, it's a sure sign of monopoly.
nabla9 8y ago
In articles like this monopoly is used as shorthand for monopoly power. For a company to have a 'monopoly power' it does not have full monopoly. Antitrust laws start to apply to corporations long before they have full monopoly.
- ucaetano 8y ago
  > monopoly is used as shorthand for monopoly power No, it is used as shorthand for "market share in a market I define arbitrarily". Proving monopoly power is a much more complex and academic process.
  - nabla9 8y ago
    Antitrust law is based on it. You can read here how it is defined and identified in practice. https://www.justice.gov/atr/competition-and-monopoly-single-firm-conduct-under-section-2-sherman-act-chapter-2 https://www.justice.gov/atr/competition-and-monopoly-single-...
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    - ucaetano 8y ago
      Yep, and from the link: The Supreme Court has defined market power as "the ability to raise prices above those that would be charged in a competitive market,"(8) and monopoly power as "the power to control prices or exclude competition." Those are the tests you need to pass to take action. And measuring that is a highly academic exercise. Just go talk to the economics professors and consultants that act as experts in those cases.
colllectorof 8y ago
>The reason why anti-trust is based on precise economic definitions is that it leaves as little room as possible for the government to favor friendly players. When you need to prove harm to consumers, the bar is high, as it should be. Yeah, I'm sure that allowing companies to merge right until the point where they make consumer's lives a living hell is great for the society and the economy. >The classic example is: Coca-Cola has a 95% market share of the cola market in some countries. Does it mean it has a monopoly? No. There is no such thing as "cola market". There are soft-drinks, and there are tons of them in every store. (Although, most people don't realize how many of those brands are owned by Coke or Pepsi, and what kind of shit they're doing to buy out and suppress the competition.) But more importantly, soft drinks don't control any aspect of people's lives. Google, Facebook, and Amazon control not only what you can do as a consumer, but also how smaller companies can interact with you and how those companies run their businesses. Here is a fun mental exercise for the reader. Imagine that you run Alphabet and want to destroy an arbitrary medium-size business that threatens you in any way. How hard would it be, considering you control pretty much all the search queries on the web and tons of other things?
- bilbo0s 8y ago
  >Google, Facebook, and Amazon control not only what you can do as a consumer... ??? I'm not sure this is true? I don't feel like they are controlling me when I go to Target or Walmart??? But I'm not sure if there is something maybe with the advertising that is making me go to Target and Walmart? Either way, it's totally up to me as a consumer where I spend my money I would think.
  - colllectorof 8y ago
    Not sure what Target or Walmart have to do with what I said. Amazon doesn't control where you buy random stuff, but they have disproportionate influence in some areas, like books. I'm pretty sure they are already in the position to make or break some brands simply by banning or promoting them.
    - threatofrain 8y ago
legostormtroopr 8y ago
> Because the cola market doesn't exist in isolation. Colas compete with all other sodas, with water, juices, etc. for a share of wallet and a share of stomach. You don't understand how much Coke owns or creates do you? They own brands that do bottled water, tea, coffee, juice, milk, sports drinks, energy drinks, alcohol and more [1][2]. Hell, if its a beverage, Coke probably owns a brand that makes it. [3] [1] https://www.coca-colajourney.com.au/brands/ https://www.coca-colajourney.com.au/brands/ [2] https://www.coca-colacompany.com/packages/brands https://www.coca-colacompany.com/packages/brands [3] https://en.wikipedia.org/wiki/List_of_Coca-Cola_brands https://en.wikipedia.org/wiki/List_of_Coca-Cola_brands
- ucaetano 8y ago
  > You don't understand how much Coke owns or creates do you? Oh please...
chrisco255 8y ago
The government can rule it however they want. They can use existing trust-busting precedent to pick apart the large firms if they want to, just like Standard Oil, AT&T, etc. It would take an act of Congress or the FTC. It would take a lot, but it could be done. Microsoft fit your definition with 90+% of desktop OS market share in the 90s and they had to settle with the government (https://en.wikipedia.org/wiki/United_States_v._Microsoft_Corp https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor...). That the government has been asleep at the wheel as Apple, Amazon, Facebook and Google have risen up is irrelevant. All it would take is an aggressive anti-trust leaning Congress or President to shake things up again.
bepotts 8y ago
Exactly. I don't want to get all political, but the people pushing for this definition change are (usually) economic leftists that are naturally worried about the size and power of corporations. It's their default state. There's nothing wrong with that, but be upfront with your motives and don't mask empirical concern with political ideology. These people would have broken up Walmart in the 90s and Sears in the 70s if they could, and look where both of those companies are now.
- dools 8y ago
  What is an "economic leftist"?
  - TulliusCicero 8y ago
    Someone who is left-wing economically? Are you just asking what values qualify as economically left-wing?
    - dools 8y ago
      Sure, what values qualify as economically left-wing?
joelx 8y ago
China and Russia have major disinformation campaigns running in the United States and around the world. These campaigns have been heavily documented by news organizations and American defense agencies. A major branch of Russia and China's attack is the ongoing negative PR campaign against tech companies like Facebook, Google, and Amazon. Can these companies improve? Sure. But their infractions are incredibly minor compared to the dictatorships rising in Russia, China, Turkey, etc that are murdering foreign citizens as well as large numbers of their own. They are stealing billions of dollars from their own citizens and taking the world down a terrifying path. Please reconsider the easy targets of tech companies and have the courage to face true evil in these dictatorships
- throwawayinside 8y ago
  This is the most insane conspiracy nonsense I’ve read on HN. Facebook had lobbyists targeting every member of Congress. Apple works tirelessly to put their profits in tax shelters. Amazon has well-documented stories of pushing its warehouse workers past their limits. Google’s chairman spent years openly laughing at the idea of “privacy.” You think these companies need help from foreign actors to look bad? If this line of thinking is common in SV, the echo chamber effect is worse than I suspected.
  - titzer 8y ago
    > This is the most insane conspiracy nonsense I think this is an ungenerous reading of the parent. The fact there are disinformation campaigns running all the time is known beyond a shadow of a doubt. Are Russia and China _solely_ behind the bad press that tech is getting? Decidedly not. But do they also benefit, as in, Chinese and Russian tech companies benefit if American and European ones are damaged? Yes. IMO they are busy frying bigger fish, but I have little doubt that given the chance to tip the scale of public opinion this way or that, they'd prefer tech companies catch some flack.
anoncake 8y ago
> AS LONG AS the economic power isn't abused to prevent competition which harms consumers. Power that can be abused will be abused.
- austhrow743 8y ago
  For many situations though, it can't be abused. Without large barriers to entry and need, the monopoly can only be maintained through providing good value. There isn't much coca cola can do to abuse consumers with a 100% cola monopoly.
dools 8y ago
"a monopoly is perfectly fine" <-- where do you pull that statement from?
- ucaetano 8y ago
  From the Department of Justice: For this reason, antitrust law does not regard as illegal the mere possession of monopoly power where it is the product of superior skill, foresight, or industry. Where monopoly power is acquired or maintained through anticompetitive conduct, however, antitrust law properly objects. A monopoly that doesn't abuse its market power to prevent competition is either a natural monopoly or a temporary situation. Neither of those are anti-trust issues.
  - dools 8y ago
    Okay so they're not illegal. I wouldn't say "perfectly fine" though... As you point out, it's a temporary situation in the case that they're not being anti-competitive. I would argue that any situation where there is a natural monopoly it should be state run rather than privately run because that situation is, by its very nature, anti-competitive (first in, best dressed!)
    - ucaetano 8y ago
      > Okay so they're not illegal. I wouldn't say "perfectly fine" though From a anti-trust perspective, not-illegal is perfectly fine. > I would argue that any situation where there is a natural monopoly it should be state run rather than privately run because that situation is, by its very nature, anti-competitive (first in, best dressed!) Argue as much as you want, the real world has consistently shown that government-run enterprises, with rare exceptions, are inefficient drains of resources.
      - dools 8y ago
        > the real world has consistently shown that government-run enterprises, with rare exceptions, are inefficient drains of resources. That is a ridiculous assertion, that stems purely from libertarian propaganda.
otabdeveloper1 8y ago
Google's only product is online advertising, the only kind of advertising that matters in the 21st century. This is a big deal because they can abuse their advertising clout for evil purposes. (E.g., advertise Chrome but put out a prohibitive pricing scheme for Firefox.) But it's not a monopoly yet because Facebook and Amazon are competing actors in this space in the USA, and other nations have their own local actors. In theory, though, if Google went on a really aggressive attack via their Chrome, Android and Analytics properties then they could kill off the competition.
- ArchTypical 8y ago
  > Google's only product is online advertising That's not true. Not even from a particular viewpoint. You might want to rephrase that. Google's primary revenue stream is from online advertising. They have a myriad of products, without which, the revenue stream would dry up. Youtube is a platform and a product and a brand. Google Search. GMail. Etc.
melbourne_mat 8y ago
If a company has a persistently high market share and has had for a long while, it has an effective monopoly whether or not it has ineffectual competitors. However I believe the reason nothing changes despite these obvious market distortions is that super profits are self perpetuating: companies invest in politicians to keep the distortions in place. The technical definition of monopoly is just a smoke screen.
- ucaetano 8y ago
  > If a company has a persistently high market share and has had for a long while, it has an effective monopoly whether or not it has ineffectual competitors. No, it doesn't. Making up your own definition of monopoly (or the meaningless "effective monopoly") doesn't make it true, valid, or useful. The Supreme Court has defined market power as "the ability to raise prices above those that would be charged in a competitive market,"(8) and monopoly power as "the power to control prices or exclude competition."(9) The Supreme Court has held that "[m]onopoly power under § 2 requires, of course, something greater than market power under § 1."

chrisco255 8y ago

That would depend on the antitrust laws in said country. And if Coke had 95% market share in the U.S., it could easily be ruled a monopoly.

ucaetano 8y ago
> And if Coke had 95% market share in the U.S., it could easily be ruled a monopoly. Nope. Because monopoly isn't just about market share. That's what people here don't seem to understand.

Nullabillity 8y ago

> The classic example is: Coca-Cola has a 95% market share of the cola market in some countries. Does it mean it has a monopoly? No. Effectively, yes. Why is the market so disfunctional that a single company has effectively swallowed all competition? > If it had 100% of the cola market, would it have a monopoly? No. Err, yes. > Because the cola market doesn't exist in isolation. Colas compete with all other sodas, with water, juices, etc. for a share of wallet and a share of stomach. And AT&T wasn't a monopoly, since you could just walk to the person you want to talk to. Oh, wait..

imgabe 8y ago
But you couldn't walk to any person to talk. Not in any way remotely similar to how you can drink water instead of Coke.
tylerhou 8y ago
You can easily substitute juice/off-brand colas for coke. You can also easily substitute FaceTime/Skype/Hangouts for phone calls (provided you’re not using mobile data)...
matthewmacleod 8y ago
That’s not a particularly convincing argument - it’s like saying that Sony has a monopoly in the PlayStation market - possibly true, but not that useful!
- ucaetano 8y ago
  Exactly: you can absolutely always define a market here a company has a close-to-100% market share. That's why, to actually talk about a monopoly, you need to very precisely define the market. Take Facebook: Facebook has a monopoly in online, blue-themed social networks owned by Harvard dropouts. It doesn't have a monopoly on social networks, on communication, on online networks, on online ads, on online ads in social networks, on blue-themed online social networks, and even on blue-themed online social networks with a timeline feature.
  - Nullabillity 8y ago
    But being blue isn't a defining feature of Facebook (or any other social market), so it's not useful for defining the market that it operates in.
    - ucaetano 8y ago
      > But being blue isn't a defining feature of Facebook Indeed, nor is it a defining feature of the market. That is exactly my point: if your labe of "monopoly" relies on a non-defining feature of a market that sets it apart from other markets (meaning that there is little competition between borders), you definition of monopoly is useless.

inherentFloyd 8y ago

Power corrupts, man. Simply hiding behind a monopoly doesn't really absolve a company of wrongdoing simply because a monopoly isn't wrong. Also, in your example, Coke definitely has a monopoly on the cola market, even if it doesn't on the entire soda market. That's like saying a smaller cola company stands a chance on the global market because the smaller competitor is selling soda.

ucaetano 8y ago
> Also, in your example, Coke definitely has a monopoly on the cola market, even if it doesn't on the entire soda market. No, it doesn't. At least not by the economic definition of monopoly, which, when talking about regulation, is the one that matters. And even then, it is irrelevant, because the cola market doesn't exist in isolation.

nicoburns 8y ago

> What the author is proposing is that regulation is no longer based on economics and economic power, but on a vague definition of monopoly, and people are absurdly trigger-happy when calling something a monopoly. No, they're saying a company can have too much economic power without being a full monopoly.

bilbo0s 8y ago
>No, they're saying a company can have too much economic power without being a full monopoly... But that's not a problem. Monopolies are problems, not strong economically powerful companies. I mean, up in my neck of the woods, ADM and Cargill are unimaginably powerful economically speaking. But it just makes no sense to say that they are as dangerous as having one company that IS the entire food market.
- AndrewKemendo 8y ago
  Yes, strong economically powerful companies are a problem. Or rather, lets say it like this: This history of strong economically powerful companies points to them being problematic for democratic societies. Why? Because the stickier the product, the more "powerful" the company, and the more likely they are to do things like regulatory capture and exert significant control of democratic levers. Make no mistake that corporations are political entities and are not-neutral in that respect. So the bigger the company, the more they can exert influence well beyond their ability to provide goods/services.

nimish 8y ago

Markets only work if they are competitive. Governments do not need to obey market rules, and shouldn't if it helps society. It's odd that you would be fine with a corporate monopoly exerting dominant power over its market (to extract more profit) but are distrustful of government exerting power to limit that from happening. Monopoly definition is political -- the idea that governments cannot and should not step in to police markets is a novel idea.

ucaetano 8y ago
> It's odd that you would be fine with a corporate monopoly exerting dominant power over its market (to extract more profit) Where did you get that idea from? I'm not. > Monopoly definition is political Nope, it is economics.
- djrobstep 8y ago
  This might blow your mind but: Economics is political.
  - deleted 8y ago
    [deleted]
  - asdfasgasdgasdg 8y ago
    And politics is economics. And economics is physics. And physics is chemistry. And chemistry is math. All useless statements in the context of this discussion.
- deleted 8y ago
  [deleted]

sonnyblarney 8y ago

a) They are monopolies by the classic definition. b) "a monopoly is perfectly fine, AS LONG AS the economic power isn't abused to prevent competition which harms consumers." This is kind of a non sequitur ... Of course they will prevent competition, that's the essential name of the game. Every company does this - this is not 'abuse' it's just how it works. Ergo, by your definition monopolies are all bad. I actually think some monopolies are good - when you have well run actor that has some external controls on prices etc. it provides stability among other things. c) To the extent that colas can be defined as a market, then they have a monopoly. 'Search' does exist aside an adjacent market in which content can be replaced, so it's not helpful. Google needs to be broken up. Search is so fundamentally essential ... it's like 'information neutrality'. The FANGS are total hyprocrits pushing for 'Net Neutrality'. Just as Comcast should not be able to offer anything but QoS and not read the content of my bites ... Google should not be able to offer anything but quality search. All their other products depend on their search monopoly. Much like Comcast would leverage looking at your packets. Much like Microsoft leverages their OS power to control office software etc.. Search, OS, maybe even Browsers - should be independent, just as Carriers can't use their power to get into other lines of business. The AT&T merger is bad news, they shouldn't be in the content business.

wpasc 8y ago
I frequently see people say "Google should be broken up" and I want to hear more on that argument. Meaning Google and Youtube should be separated? but then we're no longer talking about just their search dominance right? How could search alone be broken up if a large part of the complaint is about the dominance of their search? Moreover, it is pretty easy to not use google search? Why couldn't someone use DDG, Yahoo, Bing, etc.? despite it being defaulted to in browsers (you can change this), most people elect to use Google. If a company dominates a single sector through consumer choice, should they be broken up (esoecially when consumer could walk away)? I'm not try to be facetious, I would just like counter arguments
- sonnyblarney 8y ago
  There are two arguments, one is about Search as a monopoly the other is about that power as it relates to other parts of the value chain. Google search is fundamentally better than DDG (for most purposes) because it has massive advantages that make it effectively unassailable. For example, I stopped using DDG because I rely on reverse image search. FYI DDG does not have its own crawler, it gets data from other sources. And it won't get reverse image search unless it does it itself ... which I doubt will happen. Maybe. And of course Yahoo is not a search engine either, it's not really an alternative at all. In order to compete with Google effectively, you'd have to build your own crawler etc.. It's essentially impossible. The number of engineers, data centres other components ... my gosh man. Consider for a moment that Google is a massive cash printing machine. Do you not think that VC's would be lining up, piling billions of dollars into competitors in order to take a piece of the action? Why is nobody - not even intelligent actors with a lot of cash to burn - investing in the most profitable business model of our era? Because the barriers to compete are absurdly high. It's a monopoly. And if it is - then we have to be very concerned about their relationship to adjacent layers of the value chain because of their ability to subsidize products to put others out of business. So you're aware that in free trade deals between nations, part of the deal includes measures to bar state actors from participating in some economies, and also, rules against 'dumping'. This is because if a nation state actor wants to, they could subsidize their own industries, wipe out competition in other nations, and then let their industry dominate. The same applies in value chain monopolies. Standard Oil didn't have 'better oil' or better practices than other Oil companies - they used control and ownership of the railroads to increase prices on their competitors and put them out of business. In a truly competitive landscape, there would be no Standard Oil. When Microsoft uses their ownership of the OS to put all other 'Office' solutions out of business, is that good for consumers? By the way - MS is still printing money hands over fist in Office Software. They are making billions. They are a de-facto standard, arguably a monopoly there. Why aren't investors lining up to create competitive solutions? (Because it's an unassailable monopoly). If Google decides to get into your line of business, and you are small, they will absolutely wipe you out if they want to, and it has nothing to do with having 'a better product'. Also consider for a moment how many of Google's other business parts could stand on their own as businesses? Google Analytics? Android? Chrome? Google Docs? Maps? They are all all money pits, strategic investments (i.e. 'moats') by Google to ensure the dominance of Google Search. How could a mobile OS vendor compete in a market where Google is using billions from one market, to dominate a different one, like mobile OS? They can't. Maybe in China, wherein there are non-market factors to protect their own makers. For the same reason that governments have mostly separated the transport of electricity from electricity production, for the same reason we have net neutrality, Google Search should possibly be pared off from the other businesses. Amazon is using massive profits from AWS to put retailers out of business. Amazon is not hugely profitable, but their AWS business unit is, ergo, the retail unit is probably losing money. How can retailers compete against Amazon, which is effectively selling at a loss? They can't. Consumers generally don't win when a de-facto or real monopoly in one market, uses that power to wipe out competition in others. There is essentially no real competition in search, nobody is putting money in it. Same for office software. Given how much money is being minted in those markets, it's a sure sign of monopoly.

nabla9 8y ago

In articles like this monopoly is used as shorthand for monopoly power. For a company to have a 'monopoly power' it does not have full monopoly. Antitrust laws start to apply to corporations long before they have full monopoly.

ucaetano 8y ago
> monopoly is used as shorthand for monopoly power No, it is used as shorthand for "market share in a market I define arbitrarily". Proving monopoly power is a much more complex and academic process.
- nabla9 8y ago
  Antitrust law is based on it. You can read here how it is defined and identified in practice. https://www.justice.gov/atr/competition-and-monopoly-single-firm-conduct-under-section-2-sherman-act-chapter-2 https://www.justice.gov/atr/competition-and-monopoly-single-...
  - deleted 8y ago
    [deleted]
  - ucaetano 8y ago
    Yep, and from the link: The Supreme Court has defined market power as "the ability to raise prices above those that would be charged in a competitive market,"(8) and monopoly power as "the power to control prices or exclude competition." Those are the tests you need to pass to take action. And measuring that is a highly academic exercise. Just go talk to the economics professors and consultants that act as experts in those cases.

colllectorof 8y ago

>The reason why anti-trust is based on precise economic definitions is that it leaves as little room as possible for the government to favor friendly players. When you need to prove harm to consumers, the bar is high, as it should be. Yeah, I'm sure that allowing companies to merge right until the point where they make consumer's lives a living hell is great for the society and the economy. >The classic example is: Coca-Cola has a 95% market share of the cola market in some countries. Does it mean it has a monopoly? No. There is no such thing as "cola market". There are soft-drinks, and there are tons of them in every store. (Although, most people don't realize how many of those brands are owned by Coke or Pepsi, and what kind of shit they're doing to buy out and suppress the competition.) But more importantly, soft drinks don't control any aspect of people's lives. Google, Facebook, and Amazon control not only what you can do as a consumer, but also how smaller companies can interact with you and how those companies run their businesses. Here is a fun mental exercise for the reader. Imagine that you run Alphabet and want to destroy an arbitrary medium-size business that threatens you in any way. How hard would it be, considering you control pretty much all the search queries on the web and tons of other things?

bilbo0s 8y ago
>Google, Facebook, and Amazon control not only what you can do as a consumer... ??? I'm not sure this is true? I don't feel like they are controlling me when I go to Target or Walmart??? But I'm not sure if there is something maybe with the advertising that is making me go to Target and Walmart? Either way, it's totally up to me as a consumer where I spend my money I would think.
- colllectorof 8y ago
  Not sure what Target or Walmart have to do with what I said. Amazon doesn't control where you buy random stuff, but they have disproportionate influence in some areas, like books. I'm pretty sure they are already in the position to make or break some brands simply by banning or promoting them.
  - threatofrain 8y ago

legostormtroopr 8y ago

> Because the cola market doesn't exist in isolation. Colas compete with all other sodas, with water, juices, etc. for a share of wallet and a share of stomach. You don't understand how much Coke owns or creates do you? They own brands that do bottled water, tea, coffee, juice, milk, sports drinks, energy drinks, alcohol and more [1][2]. Hell, if its a beverage, Coke probably owns a brand that makes it. [3] [1] https://www.coca-colajourney.com.au/brands/ https://www.coca-colajourney.com.au/brands/ [2] https://www.coca-colacompany.com/packages/brands https://www.coca-colacompany.com/packages/brands [3] https://en.wikipedia.org/wiki/List_of_Coca-Cola_brands https://en.wikipedia.org/wiki/List_of_Coca-Cola_brands

ucaetano 8y ago
> You don't understand how much Coke owns or creates do you? Oh please...

chrisco255 8y ago

The government can rule it however they want. They can use existing trust-busting precedent to pick apart the large firms if they want to, just like Standard Oil, AT&T, etc. It would take an act of Congress or the FTC. It would take a lot, but it could be done. Microsoft fit your definition with 90+% of desktop OS market share in the 90s and they had to settle with the government (https://en.wikipedia.org/wiki/United_States_v._Microsoft_Corp https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor...). That the government has been asleep at the wheel as Apple, Amazon, Facebook and Google have risen up is irrelevant. All it would take is an aggressive anti-trust leaning Congress or President to shake things up again.

bepotts 8y ago

Exactly. I don't want to get all political, but the people pushing for this definition change are (usually) economic leftists that are naturally worried about the size and power of corporations. It's their default state. There's nothing wrong with that, but be upfront with your motives and don't mask empirical concern with political ideology. These people would have broken up Walmart in the 90s and Sears in the 70s if they could, and look where both of those companies are now.

dools 8y ago
What is an "economic leftist"?
- TulliusCicero 8y ago
  Someone who is left-wing economically? Are you just asking what values qualify as economically left-wing?
  - dools 8y ago
    Sure, what values qualify as economically left-wing?

joelx 8y ago

China and Russia have major disinformation campaigns running in the United States and around the world. These campaigns have been heavily documented by news organizations and American defense agencies. A major branch of Russia and China's attack is the ongoing negative PR campaign against tech companies like Facebook, Google, and Amazon. Can these companies improve? Sure. But their infractions are incredibly minor compared to the dictatorships rising in Russia, China, Turkey, etc that are murdering foreign citizens as well as large numbers of their own. They are stealing billions of dollars from their own citizens and taking the world down a terrifying path. Please reconsider the easy targets of tech companies and have the courage to face true evil in these dictatorships

throwawayinside 8y ago
This is the most insane conspiracy nonsense I’ve read on HN. Facebook had lobbyists targeting every member of Congress. Apple works tirelessly to put their profits in tax shelters. Amazon has well-documented stories of pushing its warehouse workers past their limits. Google’s chairman spent years openly laughing at the idea of “privacy.” You think these companies need help from foreign actors to look bad? If this line of thinking is common in SV, the echo chamber effect is worse than I suspected.
- titzer 8y ago
  > This is the most insane conspiracy nonsense I think this is an ungenerous reading of the parent. The fact there are disinformation campaigns running all the time is known beyond a shadow of a doubt. Are Russia and China _solely_ behind the bad press that tech is getting? Decidedly not. But do they also benefit, as in, Chinese and Russian tech companies benefit if American and European ones are damaged? Yes. IMO they are busy frying bigger fish, but I have little doubt that given the chance to tip the scale of public opinion this way or that, they'd prefer tech companies catch some flack.

anoncake 8y ago

> AS LONG AS the economic power isn't abused to prevent competition which harms consumers. Power that can be abused will be abused.

austhrow743 8y ago
For many situations though, it can't be abused. Without large barriers to entry and need, the monopoly can only be maintained through providing good value. There isn't much coca cola can do to abuse consumers with a 100% cola monopoly.

dools 8y ago

"a monopoly is perfectly fine" <-- where do you pull that statement from?

ucaetano 8y ago
From the Department of Justice: For this reason, antitrust law does not regard as illegal the mere possession of monopoly power where it is the product of superior skill, foresight, or industry. Where monopoly power is acquired or maintained through anticompetitive conduct, however, antitrust law properly objects. A monopoly that doesn't abuse its market power to prevent competition is either a natural monopoly or a temporary situation. Neither of those are anti-trust issues.
- dools 8y ago
  Okay so they're not illegal. I wouldn't say "perfectly fine" though... As you point out, it's a temporary situation in the case that they're not being anti-competitive. I would argue that any situation where there is a natural monopoly it should be state run rather than privately run because that situation is, by its very nature, anti-competitive (first in, best dressed!)
  - ucaetano 8y ago
    > Okay so they're not illegal. I wouldn't say "perfectly fine" though From a anti-trust perspective, not-illegal is perfectly fine. > I would argue that any situation where there is a natural monopoly it should be state run rather than privately run because that situation is, by its very nature, anti-competitive (first in, best dressed!) Argue as much as you want, the real world has consistently shown that government-run enterprises, with rare exceptions, are inefficient drains of resources.
    - dools 8y ago
      > the real world has consistently shown that government-run enterprises, with rare exceptions, are inefficient drains of resources. That is a ridiculous assertion, that stems purely from libertarian propaganda.

otabdeveloper1 8y ago

Google's only product is online advertising, the only kind of advertising that matters in the 21st century. This is a big deal because they can abuse their advertising clout for evil purposes. (E.g., advertise Chrome but put out a prohibitive pricing scheme for Firefox.) But it's not a monopoly yet because Facebook and Amazon are competing actors in this space in the USA, and other nations have their own local actors. In theory, though, if Google went on a really aggressive attack via their Chrome, Android and Analytics properties then they could kill off the competition.

ArchTypical 8y ago
> Google's only product is online advertising That's not true. Not even from a particular viewpoint. You might want to rephrase that. Google's primary revenue stream is from online advertising. They have a myriad of products, without which, the revenue stream would dry up. Youtube is a platform and a product and a brand. Google Search. GMail. Etc.

melbourne_mat 8y ago

If a company has a persistently high market share and has had for a long while, it has an effective monopoly whether or not it has ineffectual competitors. However I believe the reason nothing changes despite these obvious market distortions is that super profits are self perpetuating: companies invest in politicians to keep the distortions in place. The technical definition of monopoly is just a smoke screen.

ucaetano 8y ago
> If a company has a persistently high market share and has had for a long while, it has an effective monopoly whether or not it has ineffectual competitors. No, it doesn't. Making up your own definition of monopoly (or the meaningless "effective monopoly") doesn't make it true, valid, or useful. The Supreme Court has defined market power as "the ability to raise prices above those that would be charged in a competitive market,"(8) and monopoly power as "the power to control prices or exclude competition."(9) The Supreme Court has held that "[m]onopoly power under § 2 requires, of course, something greater than market power under § 1."