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Google and Facebook are monopolies. Does it matter? [audio]

deleted 8y ago
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- deleted 8y ago
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umvi 8y ago
If they are, they are not a traditional monopolies. Traditional monopolies "control supply of a good or service, and where the entry of new producers is prevented or highly restricted." In this case, the supply of a good or service (social networking, webpage indexing and searching) are not controlled by Facebook and Google because they aren't finite resources. Anyone can index the web and anyone can build a social network and Google/Facebook aren't going to crush you with lawsuits or some other nefarious tactic to maintain their position (AFAIK). Entry of new producers of these services is not prevented or highly restricted. New social networks and search engines pop up all the time. What Facebook and Google have is massive, large scale user loyalty. Despite alternatives existing (Bing, Mastadon, DuckDuckGo, Myspace, etc.), users are voluntarily choosing to use Google and Facebook. This is not a monopoly, IMO. I think we need a new term for this situation.
- azinman2 8y ago
  It’s kind of a rich get richer situation. The cost and difficulty of competing against Google for search, for example, requires just gigantic amounts of resources, time, and research. Meanwhile a Google has had all 3 of those for years and years now. To beat them at their own game requires much of the same thing, unless the answer isn’t based on crawling the web and attempting to parse natural language.
  - thwy12321 8y ago
    Google's original infrastructure was their main advantage, this is quickly being eroded. Ten years down the rode its not unreasonable to think that the costs to join the search business as a new competitor have gone way down.
    - philipkglass 8y ago
      I upvoted you because that is a good point about computing infrastructure. But I also feel that diminished costs from the now-widespread use of cheap commodity hardware with horizontal scaling may be countered by the changing nature of the web. A lot of news and shopping sites try to exclude crawling by bots with sometimes-exceptions for the agents of large, established businesses like Google. Spammers have been engaged in a furious arms race with existing search engines, and if your new search engine doesn't invest a lot of effort against sophisticated spammers, the user experience will be poor. I suspect that my increasing dissatisfaction with Google as a search engine may be a byproduct of the arms race against spammers; maybe it doesn't easily find good niche content the way I remember it doing 10 years ago because the signals of 10 years ago are too easily gamed. If that's true, then no new search engine is ever going to be as impressive as Google was when it first arrived. Similar to how no new antibiotic is going to be as impressive as penicillin originally was. The pathogenic elements have evolved too much resistance to permit the same "miracle product" experience again.
  - umvi 8y ago
    There are lots of products and services that require massive amounts of resources, time, and research in order to compete. Like spacecraft, military aircraft, pharmaceuticals, etc. Basically you can only compete on those fronts if you are a billionare/huge corporation. It would be very hard for a new player to compete with SpaceX given their head start. That doesn't mean SpaceX has a monopoly on spacecraft, you can always buy a Russian rocket. A monopoly (in my mind) would be more like Comcast. Since they've lobbied for laws in a lot of places that make it extremely hard to dig up the ground and put in new telecomm infrastructure, they completely control the supply of terrestrial internet service and there are literally no other ISP choices in many places. Thus, your only alternatives are non-terrestrial ISPs (LTE, satellite, etc).
- belorn 8y ago
  The service google and facebook provide is access to their captured audience. In the case of google that is the advertisement market with search and the platform of youtube. It is rather commonly known that many video producers are extremely unhappy using youtube but feel locked in since thats where the audience is, and the audience is equally locked in since youtube is where the producers are. New video platforms pop up all the time but with the captured market being what it is there is a huge wall for both producers and viewers to switch. A better video site have a hard time to compete with youtube, not based on merit but based on market capture.
  - oconnor663 8y ago
    > not based on merit but based on market capture I'm not sure about that distinction. Users prefer something about YouTube compared to it's competitors. That's merit, even if it's not the particular merits that content creators would prefer.
    - gaius 8y ago
      Users prefer something about YouTube compared to it's competitors That something is the vast amount of copyrighted content...
    - TeMPOraL 8y ago
      That sounds like a definition of lock-in. Path dependence. Viewers prefer YouTube because that's where the content is. The content is there because that's what creators prefer. Creators prefer YouTube because that's where the viewers are. It's a ratchet.
    - stcredzero 8y ago
      That's merit, even if it's not the particular merits that content creators would prefer. It's quite a broken concept of merit. It's the kind of concept of "merit" where an offering with superior content and UX could come along, but it wouldn't matter because of network effects. The fact that so many content creators so badly want a different platform than YouTube to come into being (or for YouTube to change their practices) but can't afford to move -- this circumstance is very telling. Likewise the number of users who despise Facebook, but can't afford to leave.
- ravenstine 8y ago
  > Traditional monopolies "control supply of a good or service, and where the entry of new producers is prevented or highly restricted." It might not be prevented or restricted in the traditional sense, but the barrier to relevant market share has become nearly impossible to cross. The alternatives you cite, besides maybe DDG, aren't serious contenders to Google or Facebook. Now, perhaps they would be if people paid to use those services, then they'd be more likely to pick and choose between the selection because they're going to want to pay for the right one for them, not necessarily the one that everyone else is using. But because the internet is largely ad-funded, hence nobody has to pay for most immaterial things, they're free to flock to wherever the crowd may be. That's why it's particularly bad that Facebook and Google are such "monopolies", even if the word doesn't exactly fit the situation. To compete with these services, you can't just appeal to a person's sensibilities within a market. DDG might be an exception, but it hasn't been around long enough for us to tell whether it's just a fad or will be quickly stamped out by something else.
  - jhall1468 8y ago
    The reason Google remains market dominant is because nobody is offering alternatives that the larger consumer market cares about, including DDG. People are more than willing to sell themselves to advertisers for a good experience, and that's exactly what Google provides. If some search engine came and produced vastly superior results to Google, people would absolutely switch. That's how Google came to power in the first place: their results were just better. Not sure what we can be expected to do. Split up Facebook and everyone will eventually flock to 1 maybe two services. Split up Google and you take away the majority of "free to use" apps because those are dependent on Google's advertising.
    - ravenstine 8y ago
      > If some search engine came and produced vastly superior results to Google, people would absolutely switch. True, although that's unlikely to happen any time soon. (then again, how can we really predict any of this) > That's how Google came to power in the first place: their results were just better. That was also back when the barrier to entry was much lower, and there was a lot of low-hanging fruit for Google to pick both in search and other areas. Let's say that someone today manages to get enough money and talent to build something that is at least equivalent to Google: I think people will overwhelmingly stick with Google because of the brand recognition and because "everyone else uses it." As both services would be free to use, there's nothing to force people to closely consider what merits their dollars will be spent on. Google could be highly censored and totally corrupt in other ways, but people will continue to use it because, as their wallets aren't being punished or used for nefarious purposes, they'll be willing to put up with seemingly benign abuse that they feel they have no part in perpetuating. This is one reason why, even though I am not against advertising in and of itself, I despise what the state of digital advertising has done to the web and the world depending on it. And, as you stated, Google's advertising platform enables them to have many tentacles without the inherent need to own other companies; instead, they can have individuals businesses they don't own depend on their applications funded by ad revenue, making it a tremendously difficult choice for policy makers to split them up.
- SilasX 8y ago
  Agreed, I made a similar point recently[1], that a monopoly should be judged by lock-in, not by raw market percentage, which is an arbitrary measure anyway; no one cares that I have a monopoly on SilasX-labor. What matters is whether it's hard for others to offer alternatives to SilasX-labor and whether buyers can switch to that alternative. In that sense, you should worry about monopolies on OSes or rail routes, which have those kinds network/lockin effects, not search engines or (as was in the news recently) retail sales of organic foods (where it's easy for numerous grocery stores to enter the market if they wish)[2]. [1] https://news.ycombinator.com/item?id=18394628 https://news.ycombinator.com/item?id=18394628 [2] http://www.washingtonpost.com/wp-dyn/content/article/2007/08/18/AR2007081800074.html http://www.washingtonpost.com/wp-dyn/content/article/2007/08...
  - maratd 8y ago
    > What matters is whether it's hard for others to offer alternatives It is monstrously hard to offer alternatives. The barrier to entry is the massive engineering effort to compete. Google is not just a search engine. It is an email server and client, a calendar, an online office suite, a cloud provider, a mobile platform, and I can go on listing things to fill up several pages of what Google is. Even if DuckDuckGo is a better search engine, it offers 1% of the feature set and can't compete. The engineering effort needed for it to compete effectively is astronomical. Imagine what it would take to build out all of those Google services that are tightly integrated and not just build them out (like Microsoft), but build them out well. That is the barrier to entry.
    - umvi 8y ago
      > It is an email server and client, a calendar, an online office suite, a cloud provider, a mobile platform, and I can go on listing things to fill up several pages of what Google is. In my mind search, email, calendar, cloud, drive are all separate services. Just because I use Google Search doesn't mean I use google drive and gmail. In fact, I use Microsoft's OneDrive most of the time instead of Google Drive, and I don't use Calendar at all (much prefer Outlook). You do not have to build out that entire list to compete with Google - you can build and compete with a superior version of just one. Even indie developers can (and do - successfully) compete with services like Calendar.
- ProAm 8y ago
  > where the entry of new producers is prevented or highly restricted. Is there a term for when a new entry can be easily killed if the other party simply decides to duplicate their product/service/offering? Google and FB do not prevent entry, but they sure can kill new entrants easily with funding. See Instagram implementing 'Stories' which killed Vine. See Twitter Periscope killing Merekat, etc.....
  - umvi 8y ago
    I'm not an expert, but I believe that's why patents and trade secrets exist - to protect your product from simply being cloned. If your product has no secret sauce or patent-worthy mechanism, why shouldn't it be cloned?
  - leetcrew 8y ago
    the end goal of antitrust rules is (or should be) protecting consumers. if Facebook can kill your startup by adding a couple features to their platform, it implies that users would rather have the feature on Facebook than on a standalone platform, so they are probably not being hurt. if Facebook does the same thing and then charges money for the feature after your startup goes under, maybe the users are getting the short end of the stick.
- will_brown 8y ago
  >Traditional monopolies "control supply of a good or service, and where the entry of new producers is prevented or highly restricted." Well Courts have ruled the NFL is a monopoly...but there is no control over new entities organizing and playing football games (i.e. not prevented or highly controlled).
  - tokyodude 8y ago
    Is that really true? I guess I'd assume the NFL have exclusive contracts with most cities for their stadiums and for teams as in they probably have a contract that disallows the city from having another team?
    - will_brown 8y ago
      People don’t recall but when the USFL popped up in the 80’s it was actually pretty successful as a “Spring Time” football league. Playing in Spring they didn’t compete with NFL or College Football and provided a product people wanted to fill the gap between seasons. It was good old Donald Trump who lead the effort to change the season and compete directly with NFL by changing the season to Fall. Of course the USFL went bankrupt and Trump sued including a claim anti-trust/monopoly. The Court famously agreed NFL was in fact a monopoly but awarded Trump damages in the amount of $1.
- ghobs91 8y ago
  If anything, we need to update the definition of the existing term to include the new manifestations of monopolies that tech companies can form. While Google and Facebook don't control a finite resource in the traditional sense, they do in the sense of mindshare, which is absolutely a finite resource.
- jimjansen1 8y ago
  >Anyone can index the web and anyone can build a social network and Google/Facebook aren't going to crush you with lawsuits or some other nefarious tactic to maintain their position (AFAIK). Maybe but you're also almost certainly going to be acquired by them.
  - sheana_ahlqvist 8y ago
    Yeah, and I'm glad that this episode touched on how acquisitions should be thought of in the context of monopolies. It may be time to start thinking in terms of anti-trust when larger companies acquire teeny tiny companies, not just when large companies merge.
- sailfast 8y ago
  "Datapoly" For me, the reason they have such power in the marketplace is because they have the historical data on all these users. "Lock-in" can be overcome. Technical capabilities can be bettered by other companies, but when it comes to training sets, it's hard to start late...
  - sharemywin 8y ago
    IT's also the interactions. Think "likes" and website visits. All of which is packaged up and sold to advertisers.
    - sailfast 8y ago
      Agreed - that fits squarely under my definition of "data". If you have ten years worth of behaviors before anyone realizes it's valuable, that's quite a lead.
- gambler 8y ago
  If your argument was applied to something like money, the conclusion would be that governments do not have any control over the financial system, because anyone can chose to barter and anyone can chose to break the law. >What Facebook and Google have is massive, large scale user loyalty. Google has effective control of web standards. Edit: Also, the podcast directly addresses your comment. In fact, that's what it is about.
  - dexterdog 8y ago
    But FB/Google can't force you to use their systems and enforce that action with an army (yet).
    - deleted 8y ago
      [deleted]
    - gambler 8y ago
      No one can force you to use money either. You can chose not to partake in any financial transactions and starve to death. According to the logic above, we just established that financial system is 100% voluntary. You can chose not to ever fly on an airplane. According to the logic above, it's just a convenience. Nevertheless, people generally don't dismiss issues with air travel by saying that you can just chose to drive. In reality, a lot of the systems you think are essential to your day-to-day life are technically opt-in. Except you cannot opt-out without cutting yourself off from the society. Also, societies are not established by armies. They are established by social conventions with enough clout to become self-sustaining. The Internet was originally established in a way that was very different from the current version of an offline society with its hyper-centralization and authorities. But the consolidation of services and infrastructure significantly changed that model.
- dddw 8y ago
  new term: Menopoly? Meritocroply? Sheepoly? ugh...
- sfilargi 8y ago
  > Anyone can index the web Most, if not all, websites will block your bot after a couple of request even if it respects robots.txt. Also they seem to have different rules for GoogleBot and different for yours.
- mc32 8y ago
  I think social is different from search. With search it’s hard to unseat an incumbent, but you can iteratively improve quality and grow a following. Social requires network effects. Even Google with massive resources at its disposition could not compete with Facebook. Now, from the advertisers’ PoV, Google is a essentially a monopoly in search, but not so much from and end user’s perspective.
- ben509 8y ago
  Then Microsoft wasn't a traditional monopoly either. Maybe the term should be "network monopoly" where the network effect is the mechanism by which they restrict the entry of competitors? That's very much true for social media companies.
- ausbah 8y ago
  Is this just not an network effects and lock-in?
- gshulegaard 8y ago
  I am not sure what you are referring to by a "traditional" monopoly. Your definition, "control supply of a good or service, and where the entry of new producers is prevented or highly restricted," sounds like the definition of any monopoly which seemingly covers Facebook and Google. Monopolies are extreme examples of lack of competition in a market. One way non-competitive market equilibriums occur are when barriers to entry for potential competitors rises. For Facebook and Google, the market externality that contributes to their monopoly-like market power is known as the Network effect (https://en.wikipedia.org/wiki/Network_effect https://en.wikipedia.org/wiki/Network_effect). This effect was first observed with the rise of the Bell System which ultimately required anti-monopoly intervention (https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System). For Facebook, the network externality is a bit more straightforward since it is a first order effect in that new users looking to adopt or join a social network choose to join the one which has the most other users they are interested in (typically friends, but could also be public figures). This tendency becomes a self-reinforcing trend as more and more users join the single largest network. This dominance in users attracts advertisers which are the primary source of revenue for Companies whose primary product is a social network. For Google, it's also an information play. The more users they can have an interaction with the more data they can scrape to feed their advertising engines. Once again, advertisers are incentivised to pay the best/biggest data troves which gives Google the ability to invest even more in providing and improving services to attract users. Which again, becomes a self-reinforcing cycle. I wouldn't say that user loyalty/user's reticence for change is not a contributing factor, I think it is; I just don't think it would be correct to say Google and Facebook aren't the beneficiaries of monopoly-like market equilibriums. It's a stretch to call them true monopolies (actual singular market suppliers), but their market control and power are rapidly approaching, if not already equal to or greater than, that of historical examples of monopolies and targets of anti-trust legislation.
- sharemywin 8y ago
  It's called a dominate marketplace. Amazon, google, facebook, microsoft, apple. They have a monopolistic platform that they use to bundle other services and products. Also, in google and facebooks case the "consumers" are the product and the advertisers are the buyers.
- Jack000 8y ago
  I'm pretty sure this is called a natural monopoly in microecon
- slededit 8y ago
  Have you actually tried indexing on your own? Most websites whitelist the google crawler and backlist anyone else they detect. If you want to be nice and respect robots.txt a lot of those whitelist only Googlebot. This isn't the 90s where anyone can crawl the web without countermeasures.
- davidf18 8y ago
  Firms like Facebook, Google, Intel, and Microsoft have monopoly rents [1]. The structure of the business makes it difficult to have competitors. e.g. Intel architecture and Windows OS for most PCs. [1] https://en.wikipedia.org/wiki/Economic_rent#Monopoly_rent https://en.wikipedia.org/wiki/Economic_rent#Monopoly_rent See also: Rent-Seeking: https://en.wikipedia.org/wiki/Rent-seeking https://en.wikipedia.org/wiki/Rent-seeking
- thecity2 8y ago
  They are market makers.
- cmroanirgo 8y ago
  > large scale user loyalty I think this is the sticking point. A lot of the time this loyalty is not real. Many people would happily move elsewhere if the service was as good or better. The trouble is, every other alternative is basically doing the same thing as Google and FB, so there's little incentive to move. However, it's clear that a monopolizing aspect exists because for every email I write, there is (probably) a very high chance that google will read it, because it ends up on their servers. For every website I visit (if I disable uBlock, of course), there is a very high chance that I'll be subjected to FB tracking. So, although these companies are not a 'classical' monopoly, I think it's fair to state that they are definitely monopolizing our usage of the internet. The real problem is that all the other 'wannabe' alternatives aren't all that much better, with (perhaps) the exception of the Search Engine space (ddg, startpage).
- stcredzero 8y ago
  If they are, they are not a traditional monopolies. "Traditionally," crossing over a farmer's land entitled the farmer to extract a fee from you, no matter what altitude you crossed over at. The law had to change once the technological reality changed. In this case, the supply of a good or service (social networking, webpage indexing and searching) are not controlled by Facebook and Google I think this is a bit of a sham. As you observe, the mere existence of website pages isn't worth anything by itself. What Facebook and Google have is massive, large scale user loyalty. Human attention, on timescales measured in hours or days, is still a finite resource. Human attention, measured on a per-capita basis is still a finite resource. If you just call it "loyalty" and make some kind of claim of market sacredness to your hard earned spoils, you're just obfuscating the finite nature of the resource the actual product is based on. Despite alternatives existing (Bing, Mastadon, DuckDuckGo, Myspace, etc.), users are voluntarily choosing to use Google and Facebook. This is not a monopoly, IMO. You're actually just begging for a special exception for network effect based monopolies.
- samnwa 8y ago
  They do have a monopoly because they hold a patent on the search algorithm. While 'anyone' can come up with a new search algorithm, are you really going to best the authority measure used in academia for a hundred years?
nradov 8y ago
You can consider almost any large company a "monopoly" if you define the market narrowly enough. I'm not convinced that this is a useful exercise.
thwy12321 8y ago
These companies could disappear over night. Is being a monopoly for a decade really a big deal? It's completely over hyped how much control they have, for now they are dominant, but five years from now its entirely possible that they arent. Also, they have produced so much for the world of technology, essentially creating all of the big data infrastructure technology, and (bare with me here) react which is having a material impact on the terribleness of front end frameworks. The deep learning revolution was started by cheap compute which sprang out of google. This whole monopoly business is so overplayed.
- PavlovsCat 8y ago
  > These companies could disappear over night. Is being a monopoly for a decade really a big deal? They could also not disappear. Is being a monopoly forever really a big deal? > they have produced so much for the world of technology As did and do so many others. What of what they made could not have been made with ethical behavior, or more competition? > they have produced so much for the world of technology [..] This whole monopoly business is so overplayed. Nobody said a monopoly cannot have any positive effect besides the negative ones. Refuting one argument, and one that nobody even makes, doesn't prove that anything is "completely hyped". That would require not just refuting one actual argument, but all of them, hence "completely". How would you compare it with the opportunity costs, with "what could have been instead?" We usually consider that zero, because it can't be simply measured. That doesn't mean there wouldn't have been anything, or just more Microsoft and IBM, so to speak. It's like weighing two things against each other, and the one scale is welded to the frame. Insofar competition leads to innovation, your one argument [for a monopoly being good] kinda backfires. They did that with barely having to try; imagine what they could do if they did have to try.
giantsloth 8y ago
This podcast sounds like an exercise in Sam Harris/Elon Musk type navel gazing tech bro aggrandizement. I personally find it weird and gross to celebrate the exploitation of programmers capacity to create for American Psycho’s Patrick Bateman types. However, I believe you’ll (unfortunately) find a large audience for this type of content amongst the mouth breathing “I would have been a finbro, but I played video games and lauded Steve Jobs growing up, so I’m making a todo app that will change the world” types. Good luck.
glenrivard 8y ago
Difference is anyone can create a web site and compete. That is the big difference.
hartator 8y ago
What matter are laws that are making harder to compete with them. Thanks to GDPR, you’ll probably never see a fb competitor emerge in Europe for example.
- pjmlp 8y ago
  Which is a good thing. As for FB itself, once upon a time Hi5 and MySpace were all that matter for social networking. Also many European social networking sites like Xing are doing pretty ok, in spite of GDPR.
- gajeam 8y ago
  Why is this the case? Don't the data portability rules make it easier for Europeans to be able to switch to a Facebook alternative?
  - paulddraper 8y ago
    The argument for this point of view is that regulations like GDPR (or other things like corporate taxes) are easier for companies with gobs of capital and armies of lawyers/accounts to accommodate than companies lacking those resources. A tall person may not appreciate flood waters, but a short person appreciates them even less.
- sheana_ahlqvist 8y ago
  The argument they made in support of GDPR for reducing monopolies was pretty strong.
yogthos 8y ago
Of course it matters because these companies play a huge role in how we use the internet. Facebook is creating a walled garden for their users where they want to have their own closed version of the internet that they control. Google wants to become the gatekeeper of the internet and get to decide what websites people can view. AMP is a perfect example of Google using their monopoly power to force websites in that direction.
blakesterz 8y ago
I guess we won't know for a few years still, but it seems like we're seeing the decline of the Facebook monopoly now. At least in terms of Facebook.com, maybe not all the things they own, but just Facebook as a social site. There seems to be soooo much going wrong for them on so many levels right now, it would surprise me if we're still talking about them in the same terms in 3-5 years.
Grieverheart 8y ago
Not strictly monopolies, but they are so large they can move capital around making many services/products artificially cheap for the client. In my opinion this makes competition unfair and constitutes a monopoly in some sense.
deleted 8y ago
[deleted]
aligshow 8y ago
Google is trying to be "the academic company". As a result, it has infiltrated and infested UC Berkeley, Stanford's main competition (Google is a Stanford company). There is no place in the private sector for wannabe universities. We have real universities for that. Greed and knowledge do not mix.
kevinmhickey 8y ago
I think their behavior matters more than their market share. As other commenters pointed out, defining market share of an infinite resource is not very useful. These companies buy potential disruptors at inflated prices. Sometimes they shut the disruptor down to maintain the status quo; sometimes they guide the disruptor to create a new market. In either case, it creates a positive feedback mechanism that increases their influence and further entrenches the parent company in their customers' lives. As a market (and governed society) we need to decide if this is something that we want or not. It may be too late for pure market pressure to stop this behavior, leaving it to regulators. Or we can decide it's acceptable and let it go for the benefit of the innovations that these companies create. I don't know if monopoly is the right word for this, but it's something and it does matter.
hildaman 8y ago
I don't think they are monopolies. I use DuckDuckGo for search & Twitter for social media. I find discovering new things/People on Twitter more interesting than the sclerotic family/friends stuff on Facebook.
- paulddraper 8y ago
  See also: Bing, Instagram, Snapchat, Yahoo (though Yahoo now uses Google because Google was better).
  - hildaman 8y ago
    Instagram is Facebook owned now.
    - paulddraper 8y ago
      Proof of how successful they were as a competitor to Facebook, rather than being outcompeted by it.
nabla9 8y ago
The comments in social media related to the issue get repeatedly stuck into the term monopoly usually in the title in the article. This happens again and again. Please everyone. Get over it. The context is monopoly power, market failures, unfair competition and antitrust law. Networked plaform technologies are very different from traditional monopolies: zero price, increasing returns, imperfect competition, spillovers everything is very different
- gajeam 8y ago
  This view of "traditional monopolies" isn't actually that traditional. From the end of the Gilded Age to through the LBJ administration, antitrust law was focused on reducing market concentration, barriers of entry, and anti-competitive behavior. Only in the 60's did Robert Bork and the Chicago School start to chip away at this way of thinking. By the end of the Reagan administration, Bork's idea that a firm is only a monopoly if it reduces consumer welfare (aka raises prices.) [0] Google and Facebook have taken full advantage of this new definition. They provide their products for free, acquire competitors without a peep from the FCC (Waze, Instagram, WhatsApp), invest heavily in corporate lobbyists, and have the fastest connections by colocating their data centers and building fiber optic cables. How can a new competitor be expected to lay undersea fiber optic cables? [0] Tim Wu, "The Curse of Bigness: Antitrust in the New Gilded Age", 2018
  - nabla9 8y ago
    There are two problems. Enforcing good old-fashioned antitrust system has effectively stopped and there is no new solutions to new problems.
BurningFrog 8y ago
I'm old enough to remember when IBM was the unbreakable monopolist that would rule the computer industry forever. Then Microsoft was the unbreakable monopolist that would rule the computer industry forever. Now it's apparently FAANG. Just the fact that we have five monopolists should be enough to show thinking people that it's not a monopoly situation, if history isn't convincing enough.
- JumpCrisscross 8y ago
  > Then Microsoft was the unbreakable monopolist that would rule the computer industry forever If Microsoft controller browsers, would Facebook and Google and Amazon and Netflix have had the neutral ground on which to grow and thrive?
digitalneal 8y ago
Anytime a social network starts to show threatening growth, Zuck tries to buy them.
amelius 8y ago
Meanwhile, FTC employees are sleeping their way to the bank, as they seemingly couldn't care less. Let's hope that the EU finds some inspiration.
mises 8y ago
At this point, Google in many cases offers the best service: DuckDuckGo is good, but Google is better. It is so good that it indexes the CIA's stuff: https://thehill.com/opinion/technology/416215-cia-operations-in-iran-china-compromised-for-years-because-of-hubris-and-a https://thehill.com/opinion/technology/416215-cia-operations... This is without even considering google dorks, possibly one of the most powerful tools infosec researchers (or even average people) have to refine queries. In the case of Facebook, it offers the best product because its product is really people (the whole "you-are-the-product" issue). Facebook has the most people, therefore the best product. Offering the best product is not a monopoly. Don't forget that MySpace was "the" social network before Facebook, but was displaced. These are not necessary traditional monopolies, and therefore should receive consideration on how they should be treated.
- neolefty 8y ago
  It would be much more difficult to displace Facebook than MySpace — it never reached 100 million unique users per month, but Facebook is over 2 billion.
  - mises 8y ago
    Agreed. That said, I'm wondering if we can justifiably punish people for success. Punishing anticompetitive practice is good, but success itself shouldn't be wrong.
truculent 8y ago
Currently also on the front page of HN: - #5: Facebook reportedly discredited critics by linking them to George Soros (https://news.ycombinator.com/item?id=18460406 https://news.ycombinator.com/item?id=18460406) - #10: Facebook’s weapon amid chaos and controversy: misdirection (https://news.ycombinator.com/item?id=18460962 https://news.ycombinator.com/item?id=18460962)
ABCLAW 8y ago
Oh boy - it's that time again. Time for a bunch of people with no competition law or economics background to get upset over the term 'monopoly'.
- biglenny 8y ago
  You seem to have a unique perspective based on your comment history. Could you explain why or why not you see F/G as monopolistic forces? I have no opinion on the matter, but I'm trying to understand.
  - ABCLAW 8y ago
    I think the all or nothing discussion linked to the word monopoly is what causes most of the issue. Abuse of dominant market position is the most accurate developed term of art to describe what these firms do. But the devil is in the details - the treatment, definition and remedies associated with the offense are fairly arcande, and seemingly innocuous terms can make or break the entire framework. Here's the EU's brief blurb on the issue: http://ec.europa.eu/competition/consumers/abuse_en.html http://ec.europa.eu/competition/consumers/abuse_en.html http://ec.europa.eu/competition/antitrust/overview_en.html http://ec.europa.eu/competition/antitrust/overview_en.html This is, however, just the basic 101 theory. The reality is a lot less rosy. In actuality, almost every level of the pro-competitive state regulatory framework is subverted, and that's by design. A state benefits from corporations that abuse their dominant market position and act anticompetitively if the harm suffered is less than the benefits. For instance, if the harm is primarily suffered in foreign markets, or by a different financial class, etc.
ConceptJunkie 8y ago
Here's the question you need to answer. If they are evil, can they cause a lot of harm that will be hard to protect against or correct? If so, then it matters. Google and Facebook both want to be publishers when it suits them, and common carriers when it suits them, and both have shown, I think we can all agree, a propensity to be evil. I think it's telling that Google retired, "Don't be evil." I think Google is worse in that regard since they are so much more pervasive. It's easy enough to permanently opt out of Facebook, but to avoid using Google is difficult, if not impossible. The other question is that do these companies allow for competition, not that they are necessarily explicitly preventing competition (although they may be), but whether or not they are so successful and have so much of a market share that it is literally impossible to compete with them, and again, I think the answer is yes. We see new competitors for Facebook on almost a weekly basis, and none of them ever get anywhere, not because of whether or not they are any good, but the fact that they can't compete because pretty much everyone who isn't actively boycotting Facebook is on Facebook (including me). As far as Google goes, the best we can hope for the is someone to be able to compete with them in one particular area, and even that would be tough because Google, like Microsoft or Apple, can throw so much money at a project that it can succeed as a loss leader by simply outlasting any would-be competitor.
- lolsal 8y ago
  > to avoid using Google is difficult, if not impossible. Sincere question - why? Aren't there alternatives to all google services? I have not opted out of using Google services, so I'm genuinely curious. Everything I can think of has an easy alternative to use.
  - sample2 8y ago
    Maps is the hardest thing to move away from in my opinion. I bike everywhere, and there is no competitor even close when it comes to bike directions within cities.
rdxm 8y ago
It absolutely matters! The key takeaway is how the regulatory bodies adapt to the new world. It's the same challenge faced in the old world, but, this is arguably more important because lines of communication and network effects impact a far larger body of people...
StreamBright 8y ago
Yes it does and it should be dealt with.
jumpdxb 8y ago
Google and FB generate superior returns which should attract new entrants by definition. Which is not really happening because of structural and strategic entry & exit barriers. Network effects, economies of scale, switching costs, etc. Google and FB are not getting disciplined by hit and run competition, its an uncontested market.
orteam 8y ago
I don't get the point on complaining over the "mindshare size" of the faang products. As, I don't think it's a thing you can complain about. If it were, the french would be right to complain about English mindshare globally (they can complain but they can't sue). Also, you can compete locally with faang, like China and Russia are doing. Admittedly they use restrictions on foreign tech, but you also need to have high quality products that are catering for the local market. EU are the ones that feel uncomfortable being dominated by US tech companies, but it's not like they don't have options.

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umvi 8y ago

If they are, they are not a traditional monopolies. Traditional monopolies "control supply of a good or service, and where the entry of new producers is prevented or highly restricted." In this case, the supply of a good or service (social networking, webpage indexing and searching) are not controlled by Facebook and Google because they aren't finite resources. Anyone can index the web and anyone can build a social network and Google/Facebook aren't going to crush you with lawsuits or some other nefarious tactic to maintain their position (AFAIK). Entry of new producers of these services is not prevented or highly restricted. New social networks and search engines pop up all the time. What Facebook and Google have is massive, large scale user loyalty. Despite alternatives existing (Bing, Mastadon, DuckDuckGo, Myspace, etc.), users are voluntarily choosing to use Google and Facebook. This is not a monopoly, IMO. I think we need a new term for this situation.

azinman2 8y ago
It’s kind of a rich get richer situation. The cost and difficulty of competing against Google for search, for example, requires just gigantic amounts of resources, time, and research. Meanwhile a Google has had all 3 of those for years and years now. To beat them at their own game requires much of the same thing, unless the answer isn’t based on crawling the web and attempting to parse natural language.
- thwy12321 8y ago
  Google's original infrastructure was their main advantage, this is quickly being eroded. Ten years down the rode its not unreasonable to think that the costs to join the search business as a new competitor have gone way down.
  - philipkglass 8y ago
    I upvoted you because that is a good point about computing infrastructure. But I also feel that diminished costs from the now-widespread use of cheap commodity hardware with horizontal scaling may be countered by the changing nature of the web. A lot of news and shopping sites try to exclude crawling by bots with sometimes-exceptions for the agents of large, established businesses like Google. Spammers have been engaged in a furious arms race with existing search engines, and if your new search engine doesn't invest a lot of effort against sophisticated spammers, the user experience will be poor. I suspect that my increasing dissatisfaction with Google as a search engine may be a byproduct of the arms race against spammers; maybe it doesn't easily find good niche content the way I remember it doing 10 years ago because the signals of 10 years ago are too easily gamed. If that's true, then no new search engine is ever going to be as impressive as Google was when it first arrived. Similar to how no new antibiotic is going to be as impressive as penicillin originally was. The pathogenic elements have evolved too much resistance to permit the same "miracle product" experience again.
- umvi 8y ago
  There are lots of products and services that require massive amounts of resources, time, and research in order to compete. Like spacecraft, military aircraft, pharmaceuticals, etc. Basically you can only compete on those fronts if you are a billionare/huge corporation. It would be very hard for a new player to compete with SpaceX given their head start. That doesn't mean SpaceX has a monopoly on spacecraft, you can always buy a Russian rocket. A monopoly (in my mind) would be more like Comcast. Since they've lobbied for laws in a lot of places that make it extremely hard to dig up the ground and put in new telecomm infrastructure, they completely control the supply of terrestrial internet service and there are literally no other ISP choices in many places. Thus, your only alternatives are non-terrestrial ISPs (LTE, satellite, etc).
belorn 8y ago
The service google and facebook provide is access to their captured audience. In the case of google that is the advertisement market with search and the platform of youtube. It is rather commonly known that many video producers are extremely unhappy using youtube but feel locked in since thats where the audience is, and the audience is equally locked in since youtube is where the producers are. New video platforms pop up all the time but with the captured market being what it is there is a huge wall for both producers and viewers to switch. A better video site have a hard time to compete with youtube, not based on merit but based on market capture.
- oconnor663 8y ago
  > not based on merit but based on market capture I'm not sure about that distinction. Users prefer something about YouTube compared to it's competitors. That's merit, even if it's not the particular merits that content creators would prefer.
  - gaius 8y ago
    Users prefer something about YouTube compared to it's competitors That something is the vast amount of copyrighted content...
  - TeMPOraL 8y ago
    That sounds like a definition of lock-in. Path dependence. Viewers prefer YouTube because that's where the content is. The content is there because that's what creators prefer. Creators prefer YouTube because that's where the viewers are. It's a ratchet.
  - stcredzero 8y ago
    That's merit, even if it's not the particular merits that content creators would prefer. It's quite a broken concept of merit. It's the kind of concept of "merit" where an offering with superior content and UX could come along, but it wouldn't matter because of network effects. The fact that so many content creators so badly want a different platform than YouTube to come into being (or for YouTube to change their practices) but can't afford to move -- this circumstance is very telling. Likewise the number of users who despise Facebook, but can't afford to leave.
ravenstine 8y ago
> Traditional monopolies "control supply of a good or service, and where the entry of new producers is prevented or highly restricted." It might not be prevented or restricted in the traditional sense, but the barrier to relevant market share has become nearly impossible to cross. The alternatives you cite, besides maybe DDG, aren't serious contenders to Google or Facebook. Now, perhaps they would be if people paid to use those services, then they'd be more likely to pick and choose between the selection because they're going to want to pay for the right one for them, not necessarily the one that everyone else is using. But because the internet is largely ad-funded, hence nobody has to pay for most immaterial things, they're free to flock to wherever the crowd may be. That's why it's particularly bad that Facebook and Google are such "monopolies", even if the word doesn't exactly fit the situation. To compete with these services, you can't just appeal to a person's sensibilities within a market. DDG might be an exception, but it hasn't been around long enough for us to tell whether it's just a fad or will be quickly stamped out by something else.
- jhall1468 8y ago
  The reason Google remains market dominant is because nobody is offering alternatives that the larger consumer market cares about, including DDG. People are more than willing to sell themselves to advertisers for a good experience, and that's exactly what Google provides. If some search engine came and produced vastly superior results to Google, people would absolutely switch. That's how Google came to power in the first place: their results were just better. Not sure what we can be expected to do. Split up Facebook and everyone will eventually flock to 1 maybe two services. Split up Google and you take away the majority of "free to use" apps because those are dependent on Google's advertising.
  - ravenstine 8y ago
    > If some search engine came and produced vastly superior results to Google, people would absolutely switch. True, although that's unlikely to happen any time soon. (then again, how can we really predict any of this) > That's how Google came to power in the first place: their results were just better. That was also back when the barrier to entry was much lower, and there was a lot of low-hanging fruit for Google to pick both in search and other areas. Let's say that someone today manages to get enough money and talent to build something that is at least equivalent to Google: I think people will overwhelmingly stick with Google because of the brand recognition and because "everyone else uses it." As both services would be free to use, there's nothing to force people to closely consider what merits their dollars will be spent on. Google could be highly censored and totally corrupt in other ways, but people will continue to use it because, as their wallets aren't being punished or used for nefarious purposes, they'll be willing to put up with seemingly benign abuse that they feel they have no part in perpetuating. This is one reason why, even though I am not against advertising in and of itself, I despise what the state of digital advertising has done to the web and the world depending on it. And, as you stated, Google's advertising platform enables them to have many tentacles without the inherent need to own other companies; instead, they can have individuals businesses they don't own depend on their applications funded by ad revenue, making it a tremendously difficult choice for policy makers to split them up.
SilasX 8y ago
Agreed, I made a similar point recently[1], that a monopoly should be judged by lock-in, not by raw market percentage, which is an arbitrary measure anyway; no one cares that I have a monopoly on SilasX-labor. What matters is whether it's hard for others to offer alternatives to SilasX-labor and whether buyers can switch to that alternative. In that sense, you should worry about monopolies on OSes or rail routes, which have those kinds network/lockin effects, not search engines or (as was in the news recently) retail sales of organic foods (where it's easy for numerous grocery stores to enter the market if they wish)[2]. [1] https://news.ycombinator.com/item?id=18394628 https://news.ycombinator.com/item?id=18394628 [2] http://www.washingtonpost.com/wp-dyn/content/article/2007/08/18/AR2007081800074.html http://www.washingtonpost.com/wp-dyn/content/article/2007/08...
- maratd 8y ago
  > What matters is whether it's hard for others to offer alternatives It is monstrously hard to offer alternatives. The barrier to entry is the massive engineering effort to compete. Google is not just a search engine. It is an email server and client, a calendar, an online office suite, a cloud provider, a mobile platform, and I can go on listing things to fill up several pages of what Google is. Even if DuckDuckGo is a better search engine, it offers 1% of the feature set and can't compete. The engineering effort needed for it to compete effectively is astronomical. Imagine what it would take to build out all of those Google services that are tightly integrated and not just build them out (like Microsoft), but build them out well. That is the barrier to entry.
  - umvi 8y ago
    > It is an email server and client, a calendar, an online office suite, a cloud provider, a mobile platform, and I can go on listing things to fill up several pages of what Google is. In my mind search, email, calendar, cloud, drive are all separate services. Just because I use Google Search doesn't mean I use google drive and gmail. In fact, I use Microsoft's OneDrive most of the time instead of Google Drive, and I don't use Calendar at all (much prefer Outlook). You do not have to build out that entire list to compete with Google - you can build and compete with a superior version of just one. Even indie developers can (and do - successfully) compete with services like Calendar.
ProAm 8y ago
> where the entry of new producers is prevented or highly restricted. Is there a term for when a new entry can be easily killed if the other party simply decides to duplicate their product/service/offering? Google and FB do not prevent entry, but they sure can kill new entrants easily with funding. See Instagram implementing 'Stories' which killed Vine. See Twitter Periscope killing Merekat, etc.....
- umvi 8y ago
  I'm not an expert, but I believe that's why patents and trade secrets exist - to protect your product from simply being cloned. If your product has no secret sauce or patent-worthy mechanism, why shouldn't it be cloned?
- leetcrew 8y ago
  the end goal of antitrust rules is (or should be) protecting consumers. if Facebook can kill your startup by adding a couple features to their platform, it implies that users would rather have the feature on Facebook than on a standalone platform, so they are probably not being hurt. if Facebook does the same thing and then charges money for the feature after your startup goes under, maybe the users are getting the short end of the stick.
will_brown 8y ago
>Traditional monopolies "control supply of a good or service, and where the entry of new producers is prevented or highly restricted." Well Courts have ruled the NFL is a monopoly...but there is no control over new entities organizing and playing football games (i.e. not prevented or highly controlled).
- tokyodude 8y ago
  Is that really true? I guess I'd assume the NFL have exclusive contracts with most cities for their stadiums and for teams as in they probably have a contract that disallows the city from having another team?
  - will_brown 8y ago
    People don’t recall but when the USFL popped up in the 80’s it was actually pretty successful as a “Spring Time” football league. Playing in Spring they didn’t compete with NFL or College Football and provided a product people wanted to fill the gap between seasons. It was good old Donald Trump who lead the effort to change the season and compete directly with NFL by changing the season to Fall. Of course the USFL went bankrupt and Trump sued including a claim anti-trust/monopoly. The Court famously agreed NFL was in fact a monopoly but awarded Trump damages in the amount of $1.
ghobs91 8y ago
If anything, we need to update the definition of the existing term to include the new manifestations of monopolies that tech companies can form. While Google and Facebook don't control a finite resource in the traditional sense, they do in the sense of mindshare, which is absolutely a finite resource.
jimjansen1 8y ago
>Anyone can index the web and anyone can build a social network and Google/Facebook aren't going to crush you with lawsuits or some other nefarious tactic to maintain their position (AFAIK). Maybe but you're also almost certainly going to be acquired by them.
- sheana_ahlqvist 8y ago
  Yeah, and I'm glad that this episode touched on how acquisitions should be thought of in the context of monopolies. It may be time to start thinking in terms of anti-trust when larger companies acquire teeny tiny companies, not just when large companies merge.
sailfast 8y ago
"Datapoly" For me, the reason they have such power in the marketplace is because they have the historical data on all these users. "Lock-in" can be overcome. Technical capabilities can be bettered by other companies, but when it comes to training sets, it's hard to start late...
- sharemywin 8y ago
  IT's also the interactions. Think "likes" and website visits. All of which is packaged up and sold to advertisers.
  - sailfast 8y ago
    Agreed - that fits squarely under my definition of "data". If you have ten years worth of behaviors before anyone realizes it's valuable, that's quite a lead.
gambler 8y ago
If your argument was applied to something like money, the conclusion would be that governments do not have any control over the financial system, because anyone can chose to barter and anyone can chose to break the law. >What Facebook and Google have is massive, large scale user loyalty. Google has effective control of web standards. Edit: Also, the podcast directly addresses your comment. In fact, that's what it is about.
- dexterdog 8y ago
  But FB/Google can't force you to use their systems and enforce that action with an army (yet).
  - deleted 8y ago
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  - gambler 8y ago
    No one can force you to use money either. You can chose not to partake in any financial transactions and starve to death. According to the logic above, we just established that financial system is 100% voluntary. You can chose not to ever fly on an airplane. According to the logic above, it's just a convenience. Nevertheless, people generally don't dismiss issues with air travel by saying that you can just chose to drive. In reality, a lot of the systems you think are essential to your day-to-day life are technically opt-in. Except you cannot opt-out without cutting yourself off from the society. Also, societies are not established by armies. They are established by social conventions with enough clout to become self-sustaining. The Internet was originally established in a way that was very different from the current version of an offline society with its hyper-centralization and authorities. But the consolidation of services and infrastructure significantly changed that model.
dddw 8y ago
new term: Menopoly? Meritocroply? Sheepoly? ugh...
sfilargi 8y ago
> Anyone can index the web Most, if not all, websites will block your bot after a couple of request even if it respects robots.txt. Also they seem to have different rules for GoogleBot and different for yours.
mc32 8y ago
I think social is different from search. With search it’s hard to unseat an incumbent, but you can iteratively improve quality and grow a following. Social requires network effects. Even Google with massive resources at its disposition could not compete with Facebook. Now, from the advertisers’ PoV, Google is a essentially a monopoly in search, but not so much from and end user’s perspective.
ben509 8y ago
Then Microsoft wasn't a traditional monopoly either. Maybe the term should be "network monopoly" where the network effect is the mechanism by which they restrict the entry of competitors? That's very much true for social media companies.
ausbah 8y ago
Is this just not an network effects and lock-in?
gshulegaard 8y ago
I am not sure what you are referring to by a "traditional" monopoly. Your definition, "control supply of a good or service, and where the entry of new producers is prevented or highly restricted," sounds like the definition of any monopoly which seemingly covers Facebook and Google. Monopolies are extreme examples of lack of competition in a market. One way non-competitive market equilibriums occur are when barriers to entry for potential competitors rises. For Facebook and Google, the market externality that contributes to their monopoly-like market power is known as the Network effect (https://en.wikipedia.org/wiki/Network_effect https://en.wikipedia.org/wiki/Network_effect). This effect was first observed with the rise of the Bell System which ultimately required anti-monopoly intervention (https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System). For Facebook, the network externality is a bit more straightforward since it is a first order effect in that new users looking to adopt or join a social network choose to join the one which has the most other users they are interested in (typically friends, but could also be public figures). This tendency becomes a self-reinforcing trend as more and more users join the single largest network. This dominance in users attracts advertisers which are the primary source of revenue for Companies whose primary product is a social network. For Google, it's also an information play. The more users they can have an interaction with the more data they can scrape to feed their advertising engines. Once again, advertisers are incentivised to pay the best/biggest data troves which gives Google the ability to invest even more in providing and improving services to attract users. Which again, becomes a self-reinforcing cycle. I wouldn't say that user loyalty/user's reticence for change is not a contributing factor, I think it is; I just don't think it would be correct to say Google and Facebook aren't the beneficiaries of monopoly-like market equilibriums. It's a stretch to call them true monopolies (actual singular market suppliers), but their market control and power are rapidly approaching, if not already equal to or greater than, that of historical examples of monopolies and targets of anti-trust legislation.
sharemywin 8y ago
It's called a dominate marketplace. Amazon, google, facebook, microsoft, apple. They have a monopolistic platform that they use to bundle other services and products. Also, in google and facebooks case the "consumers" are the product and the advertisers are the buyers.
Jack000 8y ago
I'm pretty sure this is called a natural monopoly in microecon
slededit 8y ago
Have you actually tried indexing on your own? Most websites whitelist the google crawler and backlist anyone else they detect. If you want to be nice and respect robots.txt a lot of those whitelist only Googlebot. This isn't the 90s where anyone can crawl the web without countermeasures.
davidf18 8y ago
Firms like Facebook, Google, Intel, and Microsoft have monopoly rents [1]. The structure of the business makes it difficult to have competitors. e.g. Intel architecture and Windows OS for most PCs. [1] https://en.wikipedia.org/wiki/Economic_rent#Monopoly_rent https://en.wikipedia.org/wiki/Economic_rent#Monopoly_rent See also: Rent-Seeking: https://en.wikipedia.org/wiki/Rent-seeking https://en.wikipedia.org/wiki/Rent-seeking
thecity2 8y ago
They are market makers.
cmroanirgo 8y ago
> large scale user loyalty I think this is the sticking point. A lot of the time this loyalty is not real. Many people would happily move elsewhere if the service was as good or better. The trouble is, every other alternative is basically doing the same thing as Google and FB, so there's little incentive to move. However, it's clear that a monopolizing aspect exists because for every email I write, there is (probably) a very high chance that google will read it, because it ends up on their servers. For every website I visit (if I disable uBlock, of course), there is a very high chance that I'll be subjected to FB tracking. So, although these companies are not a 'classical' monopoly, I think it's fair to state that they are definitely monopolizing our usage of the internet. The real problem is that all the other 'wannabe' alternatives aren't all that much better, with (perhaps) the exception of the Search Engine space (ddg, startpage).
stcredzero 8y ago
If they are, they are not a traditional monopolies. "Traditionally," crossing over a farmer's land entitled the farmer to extract a fee from you, no matter what altitude you crossed over at. The law had to change once the technological reality changed. In this case, the supply of a good or service (social networking, webpage indexing and searching) are not controlled by Facebook and Google I think this is a bit of a sham. As you observe, the mere existence of website pages isn't worth anything by itself. What Facebook and Google have is massive, large scale user loyalty. Human attention, on timescales measured in hours or days, is still a finite resource. Human attention, measured on a per-capita basis is still a finite resource. If you just call it "loyalty" and make some kind of claim of market sacredness to your hard earned spoils, you're just obfuscating the finite nature of the resource the actual product is based on. Despite alternatives existing (Bing, Mastadon, DuckDuckGo, Myspace, etc.), users are voluntarily choosing to use Google and Facebook. This is not a monopoly, IMO. You're actually just begging for a special exception for network effect based monopolies.
samnwa 8y ago
They do have a monopoly because they hold a patent on the search algorithm. While 'anyone' can come up with a new search algorithm, are you really going to best the authority measure used in academia for a hundred years?

nradov 8y ago

You can consider almost any large company a "monopoly" if you define the market narrowly enough. I'm not convinced that this is a useful exercise.

thwy12321 8y ago

These companies could disappear over night. Is being a monopoly for a decade really a big deal? It's completely over hyped how much control they have, for now they are dominant, but five years from now its entirely possible that they arent. Also, they have produced so much for the world of technology, essentially creating all of the big data infrastructure technology, and (bare with me here) react which is having a material impact on the terribleness of front end frameworks. The deep learning revolution was started by cheap compute which sprang out of google. This whole monopoly business is so overplayed.

PavlovsCat 8y ago
> These companies could disappear over night. Is being a monopoly for a decade really a big deal? They could also not disappear. Is being a monopoly forever really a big deal? > they have produced so much for the world of technology As did and do so many others. What of what they made could not have been made with ethical behavior, or more competition? > they have produced so much for the world of technology [..] This whole monopoly business is so overplayed. Nobody said a monopoly cannot have any positive effect besides the negative ones. Refuting one argument, and one that nobody even makes, doesn't prove that anything is "completely hyped". That would require not just refuting one actual argument, but all of them, hence "completely". How would you compare it with the opportunity costs, with "what could have been instead?" We usually consider that zero, because it can't be simply measured. That doesn't mean there wouldn't have been anything, or just more Microsoft and IBM, so to speak. It's like weighing two things against each other, and the one scale is welded to the frame. Insofar competition leads to innovation, your one argument [for a monopoly being good] kinda backfires. They did that with barely having to try; imagine what they could do if they did have to try.

giantsloth 8y ago

This podcast sounds like an exercise in Sam Harris/Elon Musk type navel gazing tech bro aggrandizement. I personally find it weird and gross to celebrate the exploitation of programmers capacity to create for American Psycho’s Patrick Bateman types. However, I believe you’ll (unfortunately) find a large audience for this type of content amongst the mouth breathing “I would have been a finbro, but I played video games and lauded Steve Jobs growing up, so I’m making a todo app that will change the world” types. Good luck.

glenrivard 8y ago

Difference is anyone can create a web site and compete. That is the big difference.

hartator 8y ago

What matter are laws that are making harder to compete with them. Thanks to GDPR, you’ll probably never see a fb competitor emerge in Europe for example.

pjmlp 8y ago
Which is a good thing. As for FB itself, once upon a time Hi5 and MySpace were all that matter for social networking. Also many European social networking sites like Xing are doing pretty ok, in spite of GDPR.
gajeam 8y ago
Why is this the case? Don't the data portability rules make it easier for Europeans to be able to switch to a Facebook alternative?
- paulddraper 8y ago
  The argument for this point of view is that regulations like GDPR (or other things like corporate taxes) are easier for companies with gobs of capital and armies of lawyers/accounts to accommodate than companies lacking those resources. A tall person may not appreciate flood waters, but a short person appreciates them even less.
sheana_ahlqvist 8y ago
The argument they made in support of GDPR for reducing monopolies was pretty strong.

yogthos 8y ago

Of course it matters because these companies play a huge role in how we use the internet. Facebook is creating a walled garden for their users where they want to have their own closed version of the internet that they control. Google wants to become the gatekeeper of the internet and get to decide what websites people can view. AMP is a perfect example of Google using their monopoly power to force websites in that direction.

blakesterz 8y ago

I guess we won't know for a few years still, but it seems like we're seeing the decline of the Facebook monopoly now. At least in terms of Facebook.com, maybe not all the things they own, but just Facebook as a social site. There seems to be soooo much going wrong for them on so many levels right now, it would surprise me if we're still talking about them in the same terms in 3-5 years.

Grieverheart 8y ago

Not strictly monopolies, but they are so large they can move capital around making many services/products artificially cheap for the client. In my opinion this makes competition unfair and constitutes a monopoly in some sense.

deleted 8y ago

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aligshow 8y ago

Google is trying to be "the academic company". As a result, it has infiltrated and infested UC Berkeley, Stanford's main competition (Google is a Stanford company). There is no place in the private sector for wannabe universities. We have real universities for that. Greed and knowledge do not mix.

kevinmhickey 8y ago

I think their behavior matters more than their market share. As other commenters pointed out, defining market share of an infinite resource is not very useful. These companies buy potential disruptors at inflated prices. Sometimes they shut the disruptor down to maintain the status quo; sometimes they guide the disruptor to create a new market. In either case, it creates a positive feedback mechanism that increases their influence and further entrenches the parent company in their customers' lives. As a market (and governed society) we need to decide if this is something that we want or not. It may be too late for pure market pressure to stop this behavior, leaving it to regulators. Or we can decide it's acceptable and let it go for the benefit of the innovations that these companies create. I don't know if monopoly is the right word for this, but it's something and it does matter.

hildaman 8y ago

I don't think they are monopolies. I use DuckDuckGo for search & Twitter for social media. I find discovering new things/People on Twitter more interesting than the sclerotic family/friends stuff on Facebook.

paulddraper 8y ago
See also: Bing, Instagram, Snapchat, Yahoo (though Yahoo now uses Google because Google was better).
- hildaman 8y ago
  Instagram is Facebook owned now.
  - paulddraper 8y ago
    Proof of how successful they were as a competitor to Facebook, rather than being outcompeted by it.

nabla9 8y ago

The comments in social media related to the issue get repeatedly stuck into the term monopoly usually in the title in the article. This happens again and again. Please everyone. Get over it. The context is monopoly power, market failures, unfair competition and antitrust law. Networked plaform technologies are very different from traditional monopolies: zero price, increasing returns, imperfect competition, spillovers everything is very different

gajeam 8y ago
This view of "traditional monopolies" isn't actually that traditional. From the end of the Gilded Age to through the LBJ administration, antitrust law was focused on reducing market concentration, barriers of entry, and anti-competitive behavior. Only in the 60's did Robert Bork and the Chicago School start to chip away at this way of thinking. By the end of the Reagan administration, Bork's idea that a firm is only a monopoly if it reduces consumer welfare (aka raises prices.) [0] Google and Facebook have taken full advantage of this new definition. They provide their products for free, acquire competitors without a peep from the FCC (Waze, Instagram, WhatsApp), invest heavily in corporate lobbyists, and have the fastest connections by colocating their data centers and building fiber optic cables. How can a new competitor be expected to lay undersea fiber optic cables? [0] Tim Wu, "The Curse of Bigness: Antitrust in the New Gilded Age", 2018
- nabla9 8y ago
  There are two problems. Enforcing good old-fashioned antitrust system has effectively stopped and there is no new solutions to new problems.

BurningFrog 8y ago

I'm old enough to remember when IBM was the unbreakable monopolist that would rule the computer industry forever. Then Microsoft was the unbreakable monopolist that would rule the computer industry forever. Now it's apparently FAANG. Just the fact that we have five monopolists should be enough to show thinking people that it's not a monopoly situation, if history isn't convincing enough.

JumpCrisscross 8y ago
> Then Microsoft was the unbreakable monopolist that would rule the computer industry forever If Microsoft controller browsers, would Facebook and Google and Amazon and Netflix have had the neutral ground on which to grow and thrive?

digitalneal 8y ago

Anytime a social network starts to show threatening growth, Zuck tries to buy them.

amelius 8y ago

Meanwhile, FTC employees are sleeping their way to the bank, as they seemingly couldn't care less. Let's hope that the EU finds some inspiration.

mises 8y ago

At this point, Google in many cases offers the best service: DuckDuckGo is good, but Google is better. It is so good that it indexes the CIA's stuff: https://thehill.com/opinion/technology/416215-cia-operations-in-iran-china-compromised-for-years-because-of-hubris-and-a https://thehill.com/opinion/technology/416215-cia-operations... This is without even considering google dorks, possibly one of the most powerful tools infosec researchers (or even average people) have to refine queries. In the case of Facebook, it offers the best product because its product is really people (the whole "you-are-the-product" issue). Facebook has the most people, therefore the best product. Offering the best product is not a monopoly. Don't forget that MySpace was "the" social network before Facebook, but was displaced. These are not necessary traditional monopolies, and therefore should receive consideration on how they should be treated.

neolefty 8y ago
It would be much more difficult to displace Facebook than MySpace — it never reached 100 million unique users per month, but Facebook is over 2 billion.
- mises 8y ago
  Agreed. That said, I'm wondering if we can justifiably punish people for success. Punishing anticompetitive practice is good, but success itself shouldn't be wrong.

truculent 8y ago

Currently also on the front page of HN: - #5: Facebook reportedly discredited critics by linking them to George Soros (https://news.ycombinator.com/item?id=18460406 https://news.ycombinator.com/item?id=18460406) - #10: Facebook’s weapon amid chaos and controversy: misdirection (https://news.ycombinator.com/item?id=18460962 https://news.ycombinator.com/item?id=18460962)

ABCLAW 8y ago

Oh boy - it's that time again. Time for a bunch of people with no competition law or economics background to get upset over the term 'monopoly'.

biglenny 8y ago
You seem to have a unique perspective based on your comment history. Could you explain why or why not you see F/G as monopolistic forces? I have no opinion on the matter, but I'm trying to understand.
- ABCLAW 8y ago
  I think the all or nothing discussion linked to the word monopoly is what causes most of the issue. Abuse of dominant market position is the most accurate developed term of art to describe what these firms do. But the devil is in the details - the treatment, definition and remedies associated with the offense are fairly arcande, and seemingly innocuous terms can make or break the entire framework. Here's the EU's brief blurb on the issue: http://ec.europa.eu/competition/consumers/abuse_en.html http://ec.europa.eu/competition/consumers/abuse_en.html http://ec.europa.eu/competition/antitrust/overview_en.html http://ec.europa.eu/competition/antitrust/overview_en.html This is, however, just the basic 101 theory. The reality is a lot less rosy. In actuality, almost every level of the pro-competitive state regulatory framework is subverted, and that's by design. A state benefits from corporations that abuse their dominant market position and act anticompetitively if the harm suffered is less than the benefits. For instance, if the harm is primarily suffered in foreign markets, or by a different financial class, etc.

ConceptJunkie 8y ago

Here's the question you need to answer. If they are evil, can they cause a lot of harm that will be hard to protect against or correct? If so, then it matters. Google and Facebook both want to be publishers when it suits them, and common carriers when it suits them, and both have shown, I think we can all agree, a propensity to be evil. I think it's telling that Google retired, "Don't be evil." I think Google is worse in that regard since they are so much more pervasive. It's easy enough to permanently opt out of Facebook, but to avoid using Google is difficult, if not impossible. The other question is that do these companies allow for competition, not that they are necessarily explicitly preventing competition (although they may be), but whether or not they are so successful and have so much of a market share that it is literally impossible to compete with them, and again, I think the answer is yes. We see new competitors for Facebook on almost a weekly basis, and none of them ever get anywhere, not because of whether or not they are any good, but the fact that they can't compete because pretty much everyone who isn't actively boycotting Facebook is on Facebook (including me). As far as Google goes, the best we can hope for the is someone to be able to compete with them in one particular area, and even that would be tough because Google, like Microsoft or Apple, can throw so much money at a project that it can succeed as a loss leader by simply outlasting any would-be competitor.

lolsal 8y ago
> to avoid using Google is difficult, if not impossible. Sincere question - why? Aren't there alternatives to all google services? I have not opted out of using Google services, so I'm genuinely curious. Everything I can think of has an easy alternative to use.
- sample2 8y ago
  Maps is the hardest thing to move away from in my opinion. I bike everywhere, and there is no competitor even close when it comes to bike directions within cities.

rdxm 8y ago

It absolutely matters! The key takeaway is how the regulatory bodies adapt to the new world. It's the same challenge faced in the old world, but, this is arguably more important because lines of communication and network effects impact a far larger body of people...

StreamBright 8y ago

Yes it does and it should be dealt with.

jumpdxb 8y ago

Google and FB generate superior returns which should attract new entrants by definition. Which is not really happening because of structural and strategic entry & exit barriers. Network effects, economies of scale, switching costs, etc. Google and FB are not getting disciplined by hit and run competition, its an uncontested market.

orteam 8y ago

I don't get the point on complaining over the "mindshare size" of the faang products. As, I don't think it's a thing you can complain about. If it were, the french would be right to complain about English mindshare globally (they can complain but they can't sue). Also, you can compete locally with faang, like China and Russia are doing. Admittedly they use restrictions on foreign tech, but you also need to have high quality products that are catering for the local market. EU are the ones that feel uncomfortable being dominated by US tech companies, but it's not like they don't have options.