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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 preven

by 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?

by umvi 8y ago

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?