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It will be interesting to see how prosecutors argue any anti trust case against Google. In American case law, the doctrine of consumer welfare being the objecti

by sfifs 7y ago

It will be interesting to see how prosecutors argue any anti trust case against Google. In American case law, the doctrine of consumer welfare being the objective of anti trust is pretty deeply enshrined in recent case law [1]. The philosophy essentially says that monopoly is not bad as long as consumers benefit and increasing competition through anti trust actions can increase consumer cost. This is very different from how anti trust works in most other places in the world - so they will have the difficult task to prove consumer harm [1] https://en.m.wikipedia.org/wiki/The_Antitrust_Paradox https://en.m.wikipedia.org/wiki/The_Antitrust_Paradox

headsoup 7y ago
I assume it depends on what harm could be described as: Is harm of lost opportunity to a wider market, user data harvesting, incompatibility of websites due to monopolistic standards definition, Etc? Does the harm have to be obvious and categorised as emotional/physical or similar? The linked article there does not clarify the matter, to the point of the certainty of the position being vague at best.
- sfifs 7y ago
  The change in legal thinking has been that fewer and fewer situations are held "per se" anticompetitive in US law and cases have to be analyzed by the "test of reason". Even vertical pricing actions (fixing ceiling and in some situations floors) have been held to be not anticompetitive. The article has links to cases where these arguments (known as Chicago School) have been cited and have been precedent setting in American case law The net result is Google can't be prosecuted just because it's a monopoly. It will require provable consumer harm (not necessarily just industry harm) on a case by case basis (not just hypothetical) to win the case.
anoncake 7y ago
I don't understand this philosophy. If monopolies don't harm the customer, why bother having a market at all? You could argue that freedom requires private property and only a market economy is compatible with private property. But "A planned economy is more efficient but I don't support it because I support private property rights" is a pretty uncommon stance.
- casefields 7y ago
  One of the legal giants in this area, is probably the best place to start: https://www.forbes.com/sites/richardepstein/2019/01/23/beware-of-populist-antitrust-law/ https://www.forbes.com/sites/richardepstein/2019/01/23/bewar...
- tzs 7y ago
  Monopolies don't inherently harm the consumer. The harm comes from abusing your monopoly once you have it. Hence, the concentration in law more on the harm than on the existence per se of a monopoly. It goes the other way, too. Just as having a monopoly doesn't automatically mean you are in violation of antitrust law, not having a monopoly does not mean you aren't violating antitrust law. The practices you use to acquire a monopoly are often harmful long before you reach monopoly, or even before you become the biggest competitor in your market, and those are in scope for antitrust. Antitrust law is really more about monopolization than about monopoly. The distinction is explained well in this report from the Congressional Research Service [1]. From the summary: > Antitrust law does not mandate either that markets be competitive, or that they contain some predetermined number of participants/competitors; it is concerned, rather, with the operation of markets, on the assumption that a properly functioning market (i.e., one in which there is an opportunity for viable competition, and is not skewed by the predatory actions of participants), will best protect consumers. "Monopoly" and "monopolist" are, therefore, merely descriptive terms, used to illustrate situations in which a single entity (or group of entities) possesses effective control of the market in which it operates; neither term implies anything about the lawfulness of the monopoly possessed. "Monopolization," on the other hand, is the term used in antitrust law to characterize as unlawful a situation in which a monopolist—irrespective of whether his monopoly has been lawfully achieved—couples his monopoly status with behavior designed to unfairly exploit, maintain, or enhance his market position. Similarly, "attempted monopolization"connotes a situation in which an entity unlawfully or unfairly attempts to secure a market monopoly. The long-standing, judicially created Rule of Reason, which involves balancing an anticompetitive action with any procompetitive results, underscores those facts. [1] https://www.everycrsreport.com/reports/RL33708.html https://www.everycrsreport.com/reports/RL33708.html
  - 7y ago
maxwell 7y ago
This is why Amazon pushes their "customer obsession".
- lvh 7y ago
  If that is true, would there be evidence that Amazon did not push the "customer obsession" until it became an antitrust target?
  - maxwell 7y ago
    Amazon seems to have pushed "customer obsession" over overt competitiveness from "the beginning". Regardless of motivations, it seems to act as a kind of shield from allegations/evidence of Microsoft-style anti-competitiveness. The difference is internal emails saying "customers are demanding a better way to run document-oriented databases" instead of talking directly about leveraging AWS market power against $MDB.
- jfoster 7y ago
  If anything I think it's the other way around. People tend to reminisce about how great the service used to be from Amazon in the early days. Now it's not as good as it used to be, but probably still the best in most markets.
onion2k 7y ago
Isn't the "consumer" in the case of Google advertisers rather than the public at large? The question Google should be facing is whether or not businesses can reasonably buy adverts to advertise on the web from someone else, and whether forcing Google to break up would improve the situation.
- Retric 7y ago
  Google is much further from an advertising monopoly than a search monopoly.
- Fnoord 7y ago
  Correct. The public at large is both Google user and Google product. The advertisers are not the product, except when they're also a Google user.
JumpCrisscross 7y ago
> they will have the difficult task to prove consumer harm Reduced choice and human nature tend to result in harm. The novelty, with Facebook and Google, will require measuring harm without explicit prices. Such an antitrust argument around privacy was recently made against Facebook: “This sort of thing happened regularly for years. Facebook would try something sneaky, users would object and Facebook would back off. But then Facebook’s competition began to disappear. Facebook acquired Instagram in 2012 and WhatsApp in 2014. Later in 2014, Google announced that it would fold its social network Orkut. Emboldened by the decline of market threats, Facebook revoked its users’ ability to vote on changes to its privacy policies and then (almost simultaneously with Google’s exit from the social media market) changed its privacy pact with users. This is how Facebook usurped our privacy: with the help of its market dominance. The price of using Facebook has stayed the same over the years (it’s free to join and use), but the cost of using it, calculated in terms of the amount of data that users now must provide, is an order of magnitude above what it was when Facebook faced real competition.” https://www.nytimes.com/2019/05/28/opinion/privacy-antitrust-facebook.html https://www.nytimes.com/2019/05/28/opinion/privacy-antitrust...
dalbasal 7y ago
The economics being the legislation behind the case law is anachronistic, and the economics profession has done a poor job of updating its theories. "Digital Monopolies" are barely similar to the heavy industry or commodity monopolies if days past. If you're trying to gauge the impact of google's market share via and prices... A big part of the space they monopolize is free. No prices. If your fundamentals are based on prices and proxies for prices.. it's not going to work. Both the reasons for a business to seek monopoly and the rationale for preventing it are estranged from the law, at this point.

by sfifs 7y ago

headsoup 7y ago

I assume it depends on what harm could be described as: Is harm of lost opportunity to a wider market, user data harvesting, incompatibility of websites due to monopolistic standards definition, Etc? Does the harm have to be obvious and categorised as emotional/physical or similar? The linked article there does not clarify the matter, to the point of the certainty of the position being vague at best.

sfifs 7y ago
The change in legal thinking has been that fewer and fewer situations are held "per se" anticompetitive in US law and cases have to be analyzed by the "test of reason". Even vertical pricing actions (fixing ceiling and in some situations floors) have been held to be not anticompetitive. The article has links to cases where these arguments (known as Chicago School) have been cited and have been precedent setting in American case law The net result is Google can't be prosecuted just because it's a monopoly. It will require provable consumer harm (not necessarily just industry harm) on a case by case basis (not just hypothetical) to win the case.

anoncake 7y ago

I don't understand this philosophy. If monopolies don't harm the customer, why bother having a market at all? You could argue that freedom requires private property and only a market economy is compatible with private property. But "A planned economy is more efficient but I don't support it because I support private property rights" is a pretty uncommon stance.

casefields 7y ago
One of the legal giants in this area, is probably the best place to start: https://www.forbes.com/sites/richardepstein/2019/01/23/beware-of-populist-antitrust-law/ https://www.forbes.com/sites/richardepstein/2019/01/23/bewar...
tzs 7y ago
Monopolies don't inherently harm the consumer. The harm comes from abusing your monopoly once you have it. Hence, the concentration in law more on the harm than on the existence per se of a monopoly. It goes the other way, too. Just as having a monopoly doesn't automatically mean you are in violation of antitrust law, not having a monopoly does not mean you aren't violating antitrust law. The practices you use to acquire a monopoly are often harmful long before you reach monopoly, or even before you become the biggest competitor in your market, and those are in scope for antitrust. Antitrust law is really more about monopolization than about monopoly. The distinction is explained well in this report from the Congressional Research Service [1]. From the summary: > Antitrust law does not mandate either that markets be competitive, or that they contain some predetermined number of participants/competitors; it is concerned, rather, with the operation of markets, on the assumption that a properly functioning market (i.e., one in which there is an opportunity for viable competition, and is not skewed by the predatory actions of participants), will best protect consumers. "Monopoly" and "monopolist" are, therefore, merely descriptive terms, used to illustrate situations in which a single entity (or group of entities) possesses effective control of the market in which it operates; neither term implies anything about the lawfulness of the monopoly possessed. "Monopolization," on the other hand, is the term used in antitrust law to characterize as unlawful a situation in which a monopolist—irrespective of whether his monopoly has been lawfully achieved—couples his monopoly status with behavior designed to unfairly exploit, maintain, or enhance his market position. Similarly, "attempted monopolization"connotes a situation in which an entity unlawfully or unfairly attempts to secure a market monopoly. The long-standing, judicially created Rule of Reason, which involves balancing an anticompetitive action with any procompetitive results, underscores those facts. [1] https://www.everycrsreport.com/reports/RL33708.html https://www.everycrsreport.com/reports/RL33708.html
- 7y ago

maxwell 7y ago

This is why Amazon pushes their "customer obsession".

lvh 7y ago
If that is true, would there be evidence that Amazon did not push the "customer obsession" until it became an antitrust target?
- maxwell 7y ago
  Amazon seems to have pushed "customer obsession" over overt competitiveness from "the beginning". Regardless of motivations, it seems to act as a kind of shield from allegations/evidence of Microsoft-style anti-competitiveness. The difference is internal emails saying "customers are demanding a better way to run document-oriented databases" instead of talking directly about leveraging AWS market power against $MDB.
jfoster 7y ago
If anything I think it's the other way around. People tend to reminisce about how great the service used to be from Amazon in the early days. Now it's not as good as it used to be, but probably still the best in most markets.

onion2k 7y ago

Isn't the "consumer" in the case of Google advertisers rather than the public at large? The question Google should be facing is whether or not businesses can reasonably buy adverts to advertise on the web from someone else, and whether forcing Google to break up would improve the situation.

Retric 7y ago
Google is much further from an advertising monopoly than a search monopoly.
Fnoord 7y ago
Correct. The public at large is both Google user and Google product. The advertisers are not the product, except when they're also a Google user.

JumpCrisscross 7y ago

> they will have the difficult task to prove consumer harm Reduced choice and human nature tend to result in harm. The novelty, with Facebook and Google, will require measuring harm without explicit prices. Such an antitrust argument around privacy was recently made against Facebook: “This sort of thing happened regularly for years. Facebook would try something sneaky, users would object and Facebook would back off. But then Facebook’s competition began to disappear. Facebook acquired Instagram in 2012 and WhatsApp in 2014. Later in 2014, Google announced that it would fold its social network Orkut. Emboldened by the decline of market threats, Facebook revoked its users’ ability to vote on changes to its privacy policies and then (almost simultaneously with Google’s exit from the social media market) changed its privacy pact with users. This is how Facebook usurped our privacy: with the help of its market dominance. The price of using Facebook has stayed the same over the years (it’s free to join and use), but the cost of using it, calculated in terms of the amount of data that users now must provide, is an order of magnitude above what it was when Facebook faced real competition.” https://www.nytimes.com/2019/05/28/opinion/privacy-antitrust-facebook.html https://www.nytimes.com/2019/05/28/opinion/privacy-antitrust...

dalbasal 7y ago

The economics being the legislation behind the case law is anachronistic, and the economics profession has done a poor job of updating its theories. "Digital Monopolies" are barely similar to the heavy industry or commodity monopolies if days past. If you're trying to gauge the impact of google's market share via and prices... A big part of the space they monopolize is free. No prices. If your fundamentals are based on prices and proxies for prices.. it's not going to work. Both the reasons for a business to seek monopoly and the rationale for preventing it are estranged from the law, at this point.