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> The plan she released consists of several parts. Companies with revenue of twenty-five billion dollars or more that provide an online marketplace would be des
by RcouF1uZ4gsC 7y ago
> The plan she released consists of several parts. Companies with revenue of twenty-five billion dollars or more that provide an online marketplace would be designated as “platform utilities” and would not be allowed to both own the marketplace and participate on it. Right from the start, Warren says, Amazon would have to separate its “Basics” business, which sells products under a house brand, from the rest of Amazon, and Google’s advertising business and its search business would have to be split apart. Secondly, she pledged to “empower” federal regulators to undo many of the tech-industry mergers that have already happened, such as Amazon’s acquisition of Whole Foods and Zappos; Facebook’s takeover of Whatsapp and Instagram; and Google’s purchase of Waze, Nest, and DoubleClick.
This would really change the landscape if implemented. On thing that it would do is force the companies to innovate themselves, knowing that they can't just acquire every innovative company that challenges their dominance.
- fkdo 7y agoI think it would change the VC market too. A lot of companies are funded because they potentially make good acquisitions for larger companies.
- rauchp 7y agoI can definitely see that happening. I wonder if that would reduce the amount of unprofitable/unsustainable but heavily VC-invested companies. The big players we all think of (Uber, WeWork, etc) aren't looking to get acquired anymore, but would investors have been more cautious to invest in these companies if they knew the only exit plan was IPO'ing?
- threeseed 7y agoSo it's okay for supermarkets and brick/mortar retailers to offer house brands but not online retailers. Pretty arbitrary line. And this would equally apply to Apple and Google who have a number of apps on their app stores. This would then lead to even more bundled apps on the phone e.g. Garageband which would decrease competition. Most of these policies are really not well thought out.
- Avshalom 7y agoA lot this depends on what they mean by marketplace. Amazon (and Walmart I think) don't just buy and sell stuff. They also let you sell stuff through them. Target on the other hand have an online store but you are always buying from Target. So if the law considers "online marketplace" from "online store" then it doesn't apply to Target.
- RugnirViking 7y agoThe line is not 'you are not allowed to ever do this' but 'this particular instance is hurting competition'. If the vast majority of people shopped at one supermarket, and that supermarket's most popular products were largely it's own brand products, and most industries that competed with such products had largely shrunk to providing specialty alternatives or cheap knockoffs because it was so hard to compete, then there might be a case for breaking that supermarket up.
- mal10c 7y agoSo not really a leading question, just curious... why shouldn't I be OK with buying the cheap mega-supermarket brand product? As the consumer, I just want a cheap price - I personally don't really care where the money is going. If small companies can't produce a less expensive alternative, then won't breaking up the larger company just increase costs to the consumer? Thanks for your thoughts.
- damnyou 7y agoYou as the consumer aren't the only entity that matters. The long term health of communities might not be aligned with short term consumer benefit.
- jakelazaroff 7y agoTo answer with another question: how can you tell the difference between big pseudo-monopolies truly providing the best product or service vs. smaller companies being unable to enter the market with a better one because a big company has locked them out?
- ehsankia 7y agoWhat about Google apps on the Play Store or Apple apps on the app store? Would google be allowed to have videos on Youtube? What about Netflix? It makes sense for Basics but there are many other areas where it kinda breaks down.
- bilbo0s 7y agoWe're a nation of laws, so it would apply to all of them too. Of course, in some of these cases, it only increases the stranglehold. Because now no one else can be a large app distribution platform and an app dev for instance. (Think about it, Steam and Epic would have to really think about the way forward.) Or, famously, for Netflix, no one else can distribute video and create video. So Disney would be forced to license their stuff to Netflix. The only reason Netflix started creating content in the first place was because the creators wouldn't license their content to Netflix. So now Netflix can dump all of that content creation, confident that content creators will be forced to license their offerings to Netflix. Not only that, Netflix can be confident in the knowledge that large content creators would never be allowed to go into distribution.
- icebraining 7y agoWhy would they be forced to license to Netflix specifically? They could still only license to other platforms who offered them better conditions.
- bilbo0s 7y agoIf they license to one distribution utility, and not the other, then they are in violation by trying to vertically integrate. (The legal term would be "cartel".) It's like American Sugar. It's not only when you have your own stores, it's also illegal if you only sell to certain stores. Basically, American Sugar had to sell to all stores without discrimination. Anything short of that means that you are still in the business of distribution. So in Netflix terms, it means that whatever deal that, say, Hulu or Amazon Prime gets, Netflix would get too. Or else Disney is colluding with Hulu to skirt their restriction on being a distributor. For businesses like Netflix, plans like Warren's are music to their ears. I bet creating all that content is a huge part of their costs. Now they can dump all of that, and acquire content at the same terms as all their competitors.
- humanrebar 7y agoWhy restrict it to online marketplaces? Should Wal-Mart have house brands? Should Comcast own NBC?
- nemothekid 7y agoWalmart has an online marketplace, and has 500B in revenue. I'm not sure who this wouldn't apply to. Costco, Target, even Macys would fall under this?
- novok 7y agoI think the implication is it should also apply to sales within their brick and mortar shops too, otherwise it's a bit hypocritical. It would also create a disincentive to use online sales channels, which could create knock on negative economic effects.
- runako 7y agoThe bigger question is whether this would affect in-store (vs online) house brands. If the rule only affected online house brands, it would tilt the field in favor of Walmart, Costco, and Kroger, who could all continue selling their house brands in stores. For e.g. Kroger, where online sales are a tiny percentage, this would essentially represent a carve-out. Looked at another way, this could be seen as a tax on people with mobility challenges. (Because no house brands on the delivery services => higher costs.)
- deleted 7y ago[deleted]
- manfredo 7y ago> Right from the start, Warren says, Amazon would have to separate its “Basics” business, which sells products under a house brand, from the rest of Amazon, and Google’s advertising business and its search business would have to be split apart. What exactly does this mean? Google ads can't show on Google search? Couldn't they just lease out ad space to whatever Alphabet company gets spun off to handle search? Same thing with Amazon basics.
- icebraining 7y agoWell, one of them wouldn't be an Alphabet company anymore, much like AT&T had to divest from its Baby Bells.
- cmpolis 7y agoRight, telecom is a great example of where breaking up an entity benefited the consumer and prevented monopoly. /s (all the bells merged back in some form or another into present day AT&T and Verizon).
- wavefunction 7y agoI think a strong case can be made that breaking up Ma Bell has provided all sorts of benefits that have lasted since then. If nothing else, at least we have two behemoths in AT&T and Verizon rather than one.
- munk-a 7y agoMostly because the SEC has been asleep at the wheel when it comes to breaking up telco merges - and the FCC has been happily steered to help reinforce anti-competitive practices... like, for instance, blocking municipality internet build-outs.
- d1zzy 7y agoI'm curious how people imagine this would even work in practice. Those departments share the same internal code base[1] and I would expect splitting those dependencies up would take a decade of work, especially when code is constantly changing so almost all development has to be frozen while the split is happening which essentially means those services stop making updates which means it's a dead Internet company. [1] https://news.ycombinator.com/item?id=17605371 https://news.ycombinator.com/item?id=17605371
- hirundo 7y ago"No Bill of Attainder or ex post facto Law shall be passed." - US Constitution, Article 1 Section IX Clause 3 Undoing the mergers sounds like ex post facto law. I'd appreciate it, Senator Warren, if you would amend the constitution first. And I can't wish you luck with that amendment.
- afthonos 7y agoThat makes absolutely no sense. An ex post facto law is a law that criminalizes behavior after the fact. No one is saying the mergers were criminal, nor is breaking up the companies intended to be a legal punishment.
- bendmorris 7y agoThe Supreme Court has held that this applies to criminal law - you can't change the punishment of a crime or change rules of evidence to convict someone who was acquitted. You can certainly pass laws to undo a merger or (equivalently) break up a company. https://en.wikipedia.org/wiki/Calder_v._Bull https://en.wikipedia.org/wiki/Calder_v._Bull
- CWuestefeld 7y agoThe problem's not the "ex post facto". The problem is the "Bill of Attainder". You can't pass a law that, e.g., breaks up Amazon - to do so would be to deprive them of property without trial. But you can create a law that Amazon (and potentially others) will be in violation of, and following proper trial, they are broken up.
- deleted 7y ago[deleted]
- favorited 7y agoEx post facto only applies to criminal laws (Calder v. Bull). And it generally only applies to punishments for crimes. See how sex offenders had to register even if their crimes were committed before the Adam Walsh bill was passed, because registering as a sex offender is not a punishment.
- bilbo0s 7y ago>On thing that it would do is force the companies to innovate themselves, knowing that they can't just acquire every innovative company that challenges their dominance. I don't know man? My reading, at least how I understand it, they wouldn't be allowed to claim that they "innovated" their way into those other markets either. I think if they are "platform utilities", they just can't do any of the other stuff period. Doesn't matter if they write the code themselves.
- CWuestefeld 7y agoThis is very troubling to me. My employer's revenue is quite to this level yet, but it's within view. We're a LAR/VAR of computer products, so naturally we've got an ecommerce website. A minority of the products available on it are for services we provide. This seems to be saying that we wouldn't be allowed to do business this way anymore.
- icebraining 7y agoDo your services compete with those of third-parties you sell on the site?
- 0xffff2 7y agoIs that a distinction Warren has made? It doesn't appear to be a distinction made in the article.
- icebraining 7y agoYou're right; I went looking for the plan, and it's not there: https://medium.com/@teamwarren/heres-how-we-can-break-up-big-tech-9ad9e0da324c https://medium.com/@teamwarren/heres-how-we-can-break-up-big... That said, it only seems to apply to marketplaces and platforms, not to regular retailers. I'm not sure what a LAR/VAR counts as, though.
- munk-a 7y agoI believe you'd be quite able to continue as long as your business either exclusively listed their own products... or stopped participating on the open marketplace you're hosting. It'd be interested to see if this law would interact poorly with partner product reselling - "Oh yea, if you buy our CAD module we'll throw in a free copy of CAD with it" might actually come afoul the law, depending on the specifics. I'm sorta okay with losing that though.
- mc32 7y agoI think it would apply to companies with $xX billions in annual revenue.
- Aperocky 7y agoThe time will surely roll itself back if we put it in the law!! TBH I don't see any difference from her platform then the one Trump had, which is to turn back the clock and make America like its in the 80s, perhaps just with less racism.
- stale2002 7y agoAlternatively, it would just cause small companies and startups to never innovate, because they know that they can't make money off of it by selling to a bigger company.
- icebraining 7y agoBig companies aren't charities, they only buy startups because they expect it will make them money. Why wouldn't they make money by remaining independent?
- stale2002 7y agoBecause sometimes a technology in and of itself is not profitable, and is instead only profitable to specific large companies that would purchase them. There are tons of reasons why it would make sense to purchase a company, that would never be profitable on its own.
- nv-vn 7y agoGoogle search would not exist without AdSense
- LargeWu 7y agoWouldn't exist =/= wouldn't be as wildly profitable
- cronix 7y agoHow did it exist before it, and successfully?
- 0xffff2 7y agoDid it? AdSense and AdWords are nearly as old as Google itself according to Wikipedia.
- espeed 7y agoYou mean AdWords I suspect... AdWords vs AdSense https://www.google.com/search?q=adwords+vs+adsense&ie=UTF-8 https://www.google.com/search?q=adwords+vs+adsense&ie=UTF-8
- smileysteve 7y agoCounter example; Duck Duck Go and Mozilla. Breaking them up doesn't mean that Google Search may not monetize by placing AdSense ads, it means that the Corporate structure exists such that Facebook could offer monetization to Google Search at a competing price. And with disparate boards/shareholders.
- bduerst 7y agoDuck Duck Go isn't a search engine - they don't index the web except in the most misleading sense of the term. It aggregates results from real search engines like Bing and Yandex, who cover the cost of indexing the web with their own version of adsense.
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- cududa 7y agoWhy in the world would you want another company to run the App Store?? I for one have no interest in returning to the PC days of crapware. A part of Microsoft’s 2001 consent decree with the DOJ was they couldn’t dictate what middleware couldn’t/ should be installed. The second order effect of that is bloated terrible PC’s with massive security vulnerability surface area.
- ascagnel_ 7y agoThe consent decree was also used by not-really competitors like Symantec to try to block MS from hardening the OS kernel in Vista/Win7. https://searchsecurity.techtarget.com/tip/Microsoft-PatchGuard-Locking-down-the-kernel-or-locking-out-security https://searchsecurity.techtarget.com/tip/Microsoft-PatchGua...
- joelx 7y agoThese attacks on tech companies are extremely disappointing. Candidates are too cowardly to go after true evil, such as the Chinese government torturing protestors. https://joelx.com/torture-in-hong-kong/15239/ https://joelx.com/torture-in-hong-kong/15239/
- xvector 7y agoBecause it's something they can control, so it makes them feel better to control it even if they are doing so for the worse.
- joelx 7y agoYou are being downvoted, but you are right.
- smallgovt 7y agoI’m always curious how much I should trust this sort of reporting. Without more info, it’s possible this is manufactured anti state propaganda. And, in general, I’d rather have a lack of beliefs than a portfolio of beliefs that are 25% fake.
- azinman2 7y agoUnclear, but what's known is that China is trying desperately to change the narrative and spread disinformation on HK, making it seem like the protestors don't have legitimate concerns. I can attest from both friends in HK as well as more than plenty of qualified media that the protestors are being peaceful and have real concerns, but the feeling of people in HK seems to be split generationally (older people mostly want peace and not for Chinese forces to be coming over the border).
- thegayngler 7y agoThis is one of the few things I disagree with her on. With that said she is my favorite candidate thus far.
- AgloeDreams 7y agoWouldn't this basically start by destroying many American companies? Nest would have nothing but it's IP seeing as Google owns the platform, same for IG. On the other hand, what is stopping IG/ Nest from licensing the old parent's services? seeing as I imagine all of these post-breakup companies would still have the same investors, what's the difference? Basically, how would you stop Google from shadow-running Google Ads? What would stop them from preferring Google Ads?