10 ms·
As talked about in this article, I think the main catalyst to increased anti-trust scrunity will be a mind shift away from the "consumer welfare" view of anti-t
by 40acres 8y ago
As talked about in this article, I think the main catalyst to increased anti-trust scrunity will be a mind shift away from the "consumer welfare" view of anti-trust.
For the most part, big tech companies provide amazing service. I can't think of another industry that has a product as good as the tech companies of today have. Yes there may be some fakes on Amazon, and DDG in some use cases may be better than Google, but for the majority of consumers these companies provide excellent service.
We really need more scrunity when it comes to acquisitions, the fact that Google was able to acquire YouTube and Facebook was able to acquire Instagram shows a real lack of foresight on regulators. Perhaps this is because when you're busting up Standard Oil you have more tangible view of what the monopoly looks like: the oil company owns the fields, the railroads, the refineries, the whole damn stack. When it comes to tech everything is a data play, Google (a search engine) and YouTube (a video site) look like distinct industry, but at the end of the day the main resource being competed for is attention and data.
- dwater 8y agoI was just watching an interview between Scott Galloway and Richard Kramer discussing if the big 4 will be broken up. An insight I hadn't heard before was that anti-trust in the US is based on consumer harm, and since consumers get services from these companies for free, by this measure there can't be consumer harm. However, if you consider the advertisers (who are actually funding everything) are the consumers, they are being significantly harmed by the lack of competition. An advertiser has essentially no choice, if they wish to reach consumers online they have to deal with the big 4 on their terms. https://www.youtube.com/watch?v=jD7LyAJWkZ0 https://www.youtube.com/watch?v=jD7LyAJWkZ0
- tracker1 8y agoI think it works both ways... the advertisers are harmed by lack of competition (though is it really different than only 3 TV networks), and the users are harmed by mismanaged marketing, leaking personal information and as an attack vector.
- mattmaroon 8y agoI don't think it's logical to say that just because consumers don't directly pay they aren't harmed. What if increased competition would make it such that there would be a way better search engine than today's Google? It's certainly harder to prove harm than monopolistic price fixing though.
- clucas 8y agoIn response to your argument, the U.S. courts would provably respond like the judge in My Cousin Vinny: "That is a lucid, intelligent, well thought-out objection. Overruled." Silly as it is, that's just not how antitrust law works in the U.S.
- jerf 8y agoThat is by far the easier avenue. You can try to come up with some sort of amorphous definition of harm to the consumer w.r.t. excessive tracking and stuff, but you come up against the problem that the government is actually pretty cool with all that stuff. It'll be wrapped up in a prettier bow for public consumption, but that's the fundamental problem. If you don't look at the public face of the companies and look at their balance sheets and income statements instead, you get a very different view of things, and they certainly look monopolistic and/or monopsonistic in some key areas. (Monopsony is the buy-side equivalent of a monopoly, where a market has only one buyer.) Advertising is a pretty significant one. An example of monopsony is that right now, while there's a crapton of places you can host your own video streams, only YouTube is an effective mechanism for monetizing them, which is why they can get away with all their shenanigans. Once you look at it from the balance sheet perspective of these companies, and potentially from a monopsony perspective, there's a lot of avenues for a highly-active government attack against these companies, even if they never claim "the general public" is a direct victim.
- rootusrootus 8y agoPerhaps we need to update our laws to reflect that data has value. Certainly these companies understand how much value it has, so consumers are paying, but because it's more of a barter than actual cash transaction, we treat consumers as if they are getting something for free.
- temporalparts 8y agoPart of the complication is that it would be easy to argue that breaking up these companies built on large network effects will harm consumers (users mainly, but a case can be made for advertisers) because the consumers benefits from the size and robustness of that network. Half the network is worth less than half of the original network.
- taurath 8y agoFrom the video you linked, it seems like the primary argument from the start against breaking them up is: * We can't because they made their services so they can't be broken and * They're smarter than the regulators so its no use trying. I feel like both of those are cop-outs, and to be unchallenged makes me wonder if the two talking have a vested interest in keeping the bigs together (one as a marketing professor and the other being an equity researcher... it seems like they're not ones to push too hard against the status quo). Point 1 seems silly - if the whole business is structured in such a way to be anti-trust proof, doesn't that mean the management is so worried about a real possibility of being broken up that they've been working to shield it? "Well they've centralized their revenue generation so there's no way to take it apart"? It seems incredibly possible to do so. Point 2 is tactical - and that can change at any time. With the generational shift starting to happen in politics, the argument that representatives and senators don't understand the business or their products will cease to be true. I'm sure there's plenty of people in the justice department that understand it well enough as well.
- dsr_ 8y agoYou can keep consumer welfare as the highest goal, as long as you consider that long-term consumer welfare includes a robustly competing marketplace with low barriers to entry, and nearly always requires periodice regulation in the long-term public interest.
- mattmaroon 8y agoIt's also particularly hard to break up attack company because of the value of their digital real estate. You can break Google up into as many companies as you want, but whichever one owns google.com has been basically unaffected. It's unclear how you'd break them up in such a way as to meaningfully increase competition in a search market where consumers reflexively turn to Google.
- hn_throwaway_99 8y agoI don't agree with this at all. If you break up youtube from google, I think people will treat those very separately - they serve very different purposes. Same with facebook and instagram.
- ucaetano 8y agoPeople already treat them very separately, I'd be surprised if most of the public (not HN) even knows that Google owns YT.
- EpicEng 8y agoI assume the GP meant "the people in charge of..."
- mattmaroon 8y agoYouTube is probably like 8% of Google's revenue, not to mention that even if it became a separate company it'd probably just serve Google's ads. And it's the only domain other than the main one that matters enough to separate.
- jerf 8y agoCarving up a company is never easy. I'd say, clone out the search engine entirely, and as to the question of who owns google.com, the answer may well be "none of the above"; it could just turn into a page that offers you a randomly-sorted list of the baby Googles. Business being what it is, even if you simply fork Google, both new halfs are immediately going to seek out some way to differentiate themselves, so I think it's less silly than it sounds.
- Barrin92 8y ago> I can't think of another industry that has a product as good as the tech companies of today have. The first step towards saner attitude towards tech is stopping with this glorification of tech. With the exception of Google or say wikipedia, who have made knowledge accessible in unprecedented manner, modern technology companies (the name is imprecise, because it is really just digital technology) have not as much impact as we think they have. I can think of a lot of technology products that are much older that have much more impact. The car for example, or something as trivial as the soap, or penicillin and vaccines or the conveyor belt. If we measure the impact of technology by its influence on economic growth and productivity, human welfare and health, then most 'tech companies' don't make it high up the list. It's not clear that social media actually enhances welfare or productivity. Slack, one of the most valuable companies in recent years, is a reskinned IRC that eats more RAM. I'd say if hard benchmarks are any indication, we're de-innovating. Sure, there's the argument hat AI is around the corner and soon we'll see an explosion in wealth and pull out of our sluggish growth, but I'll believe it when I see it. Up until then I think the first step is to bring the tech hype down to sane levels.
- 40acres 8y agoI'm not measuring by impact but by service, whether or not Amazon.com is impactful for the history of the world is not the question here. The question is under a jurisprudence of "consumer welfare", how can you go after a company that can ship you anything you want in 2-4 days?
- leetcrew 8y ago> Slack, one of the most valuable companies in recent years, is a reskinned IRC that eats more RAM. in a certain sense you're not wrong, but this is almost infamous-Dropbox-comment level of missing the point. IRC is a great technology and is pretty useful if you only need to communicate with other tech nerds. it's not a very inviting technology to lay users and businesses though. on the client end, the default config exposes your IP address (at least, this was the case when I last used mIRC). on the server side, you need at least one person who actually understands how IRC works to configure it and keep your communications secure. for a fee, slack takes care of all this for you. it's also a lot easier to share stuff that isn't text over slack.
- nradov 8y agoI can't imagine how in practice we could construct a regulatory regime which would prevent large tech companies from acquiring small start-ups which represent only a potential competitive threat with little current market share. How would one even define a "market" in legally defensible way? Would Instagram have been counted as being in a market of just consumer instant messaging mobile apps? All instant messaging services? All social media? All communication tools in general?
- tivert 8y ago> I can't imagine how in practice we could construct a regulatory regime which would prevent large tech companies from acquiring small start-ups which represent only a potential competitive threat with little current market share. How about: once you hit a certain market share, you're no longer allowed to acquire businesses that compete with you in some feature category? There could be some processes where a court adjudicates what the feature categories are in each case and whether or not they're the same. There's already some concept about how to do this, since it's not uncommon for a company to be forced to divest a division or two during a merger.
- nradov 8y agoThat doesn't actually solve anything, it just shifts the problem definition. How do you expect legislators, bureaucrats, and judges to define something as amorphous and constantly changing as a "feature category"? I can't see how that would ever comply with the Constitutional vagueness doctrine.
- shereadsthenews 8y agoAcquisition by Google is the only reason YouTube exists. If they had to pay for their networking they could not have survived (Google owns its own fiber and doesn't pay anyone for transit). If you are taking a consumer benefit angle I don't see how you conclude that Google should have been prevented from buying YouTube.
- tivert 8y ago> Acquisition by Google is the only reason YouTube exists. If they had to pay for their networking they could not have survived (Google owns its own fiber and doesn't pay anyone for transit). Even if that's true (which I doubt), Google is not the only company that owns fiber. > If you are taking a consumer benefit angle I don't see how you conclude that Google should have been prevented from buying YouTube. The GP was talking about a "shift away" from the "'consumer welfare' view of anti-trust," because that view permits acquisitions like that of YouTube by Google.
- ucaetano 8y ago> Even if that's true (which I doubt), Google is not the only company that owns fiber. Would you rather have Verizon owning YouTube? Every single telco has tried to launch their own YT. They launched, and every single one of them failed. The reason they keep failing is that they are telcos, their core capabilities do not play well with an open, network agnostic, consumer-driven video service. They'll prioritize their own content and their own network (look at Verizon and "Oath"). If you "deleted" YouTube, and both Amazon, Google, Verizon, AT&T launched video services, which ones do you think would succeed? Definitely Google's, maybe Amazon's, definitely not Verizon's or AT&T's. Google happens to be a "third-party content access monetizing" company that owns infrastructure, not an infrastructure company trying to be a "third-party content access monetizing" company.
- shereadsthenews 8y agoAny legal theory under which it would have been better for Level3 to buy YouTube than it has been for Google to buy it is, IMHO, worth no further consideration.
- zer00eyz 8y ago> Standard Oil you have more tangible view of what the monopoly looks like: the oil company owns the fields, the railroads, the refineries, the whole damn stack. Standard oil is a great example but your describing vertical integration. Lets take an amazing example of vertical integration that you might experience often but take zero note of. YKK zippers: from the metal smelting for the finished product to the machines they are made ON YKK owns all of it! https://ykknorthamerica.com/the-ykk-difference/vertical-integration/ https://ykknorthamerica.com/the-ykk-difference/vertical-inte... Do other people make zippers? Sure! But use of YKK is costly and a statement of quality on the product around it. Google at this moment isn't any different. If you cut yourself off from google your cutting off lots of secondary companies that use their services (No maps, no uber, no Lyft as an example). Google looks a hell of a lot more like YKK today than standard oil.
- AlexandrB 8y ago> I think the main catalyst to increased anti-trust scrunity will be a mind shift away from the "consumer welfare" view of anti-trust. I don't think it even requires that. If we're paying for these services with our information and attention, more sophisticated tracking and increased data collection are a form of price increase. The anti-trust argument only requires that put a price tag on the data collected or inferred by Google/Facebook and it becomes obvious that "prices" have been going up for years because of monopoly power.
- Impossible 8y agoThe problem with this is a lot of acquisitions that become massive look like toys originally. At the time of acquisition, Instagram was a joke, people (including myself) thought FB overpaid. There are some great comments in this NYT article (https://dealbook.nytimes.com/2012/04/09/facebook-buys-instagram-for-1-billion/ https://dealbook.nytimes.com/2012/04/09/facebook-buys-instag...) and the original Hackernews post (https://news.ycombinator.com/item?id=3817840 https://news.ycombinator.com/item?id=3817840). You can see this playing out now in comments about autonomous vehicles, AR/VR and blockchain. No regulators would have blocked Facebook's Oculus acquisition because virtual reality was basically a non-existent market at the time. If in 10 years we're all wearing Facebook owned AR devices someone else will make the same claim "they have too much power we should have never let them make hardware", but there is an equal chance that we're not and no one cares. You could advocate that big tech should not make acquisitions, and also attempt to regulate internal R&D and product development, but I think then you're making the case that these companies need to be maintenance mode zombie utilities that can't adapt. Its easy to block an acquisition that has immediate anti-trust issues, and hard to block an acquisition that might have issues after 5-10 years of company funded R&D...
- prostoalex 8y agoAlso, would Instagram have become the force that it is without FB's marketing, site reliability, i18n and anti-spam muscle? Just the flawless logins where a newly installed Instagram app recognizes that you're already logged in to Facebook boosted adoption likely. If you look at the press reports from around that era, Instagram's domination was far less assured - Color got tons of funding, PicPlz raised $5 mil, the press favored Hipstamatic, and every day a few new apps with their own twist on photo sharing would launch.