4 ms·

For a detailed and insightful treatment of the evolution of antitrust law in the US, I recommend “Cornered” by Barry Lynn. The key point is that the interpreta

by pge 7y ago

For a detailed and insightful treatment of the evolution of antitrust law in the US, I recommend “Cornered” by Barry Lynn. The key point is that the interpretation of the law changed in the 80s to a very narrow test of monopoly - whether a company’s dominant position in an industry hurt consumers (ie created higher prices). This ignores, for example, monopolistic behavior that makes it impossible for startups to compete. The current administration is shaking things up by not limiting itself to this historical definition (though what definition it is using instead is unclear). For the last 40 years, Google would never have been challenged as a monopoly because its products were free to consumers, hence there could be no harm to them, hence no monopoly. Same for Facebook.

ashleyn 7y ago
> (though what definition it is using instead is unclear) To me it appears the definition being used is any corporate actor obstructing the current administration's agenda.
arshbot 7y ago
There's a really good Planet Money podcast on this topic. Did you know that pre-1980s, antitrust law was used _very_ liberally? There were many documented cases of the book being thrown at tiny companies looking to merge - the book that changed everyone's mind ( The Antitrust Paradox ) lists examples such as a merger between local groceries being denied as one of many great examples of antitrust law getting in the way of healthy competition instead of promoting it. It seems that for most of the 10th century, antitrust law usage was on one side of the bar being used far too much, and as a reaction it's far too much on the other side - seldom used to the point where most industries are dominated by one or two giants. It's just bad luck this transition seemed to have happened during a boom period of new industries and extreme growth.
- xurias 7y ago
  > examples such as a merger between local groceries being denied as one of many great examples of antitrust law getting in the way of healthy competition instead of promoting it. Maybe I need to read the book but I don't see it. Consolidation of supermarkets has clearly reduced competition in the US. A small handful of companies have cornered the market because the US government stopped using antitrust laws liberally. I'm not sure what popularity has to do at all with economic issues.
  - losvedir 7y ago
    Groceries are like the pinnacle example of capitalism and competition working well. Everyone loves grocery stores, and we have a wonderful product selection for very cheap prices! I don't know if we have just "a small handful of companies" or not, but it certainly doesn't work as a compelling example for me of an anti-trust problem.
    - xurias 7y ago
      Everybody loves Amazon, doesn't mean they aren't horribly monopolistic and don't have widespread economic/social impact on certain classes of people.
      - LanceH 7y ago
        What exactly does Amazon have a monopoly on? They are big and the easiest and most obvious to use and their prices are frequently good, but none of those are exclusively Amazon.
    - ambicapter 7y ago
      > very cheap prices Citation needed on this one. Not my experience at all.
      - fuzz4lyfe 7y ago
        20 pounds of rice, $8.48. [0](Just the first price I found online) At four servings per pound that is 80 servings at $0.106 each. Average yield of a rice plant, 10 grams.[1] 9071.85 grams of rice is 907 plants roughly. That's less than a cent to cultivate, grow, prepare, bag and ship a rice plant. Let alone maintain the store where it is sold and pay the workers who sell it to you. This is the miracle of the free market. What price do you suggest is more fair? [0]https://www.walmart.com/ip/Great-Value-Long-Grain-Enriched-Rice-20-lb/10315883 https://www.walmart.com/ip/Great-Value-Long-Grain-Enriched-R... [1]https://www.quora.com/How-much-rice-does-1-plant-yield https://www.quora.com/How-much-rice-does-1-plant-yield
caseysoftware 7y ago
> For the last 40 years, Google would never have been challenged as a monopoly because its products were free to consumers, hence there could be no harm to them, hence no monopoly. Same for Facebook. This is demonstrably false. The Microsoft anti-trust case began with them giving away Internet Explorer which led to further discoveries of them harming the performance of or outright blocking other applications and eventually that they subsidized manufacturers. If Google, Facebook, et al is giving away a product for free (similar to dumping) to build a moat around their other products.. that's one thing. If that dumping harms or disrupts competitive products, that's another. It has nothing to do with free but with "harm".
- SilasX 7y ago
  In the MS case, they gave away a free product that was tightly coupled to a hard-to-avoid monopoly that they did have (the operating system). It wasn't just the dumping of a free product that got them in trouble. Google doesn't have that for search -- or at least, didn't until they had a broader suite of products with lock-in.
skewart 7y ago
> For the last 40 years, Google would never have been challenged as a monopoly because its products were free to consumers, hence there could be no harm to them, hence no monopoly. Same for Facebook. Google and Facebook's primary products are advertising. Things like web search, email, maps, and social networking are part of their supply chain for building their ad product. (And people who use these services are suppliers who are trading our exposure to ads in exchange for access to search, email, maps, social networking, etc.) Google and Facebook don't give away advertising space for free, and they both have very dominant positions in a number of ad markets.
- skybrian 7y ago
  On the other hand, there is plenty of competition in the ad industry and prices are low in general. It's quite hard for publishers to make money unless they have vast scale. So if you are looking at the cost to advertisers, it's hard to argue for monopoly status there.
PorterDuff 7y ago
"whether a company’s dominant position in an industry hurt consumers (ie created higher prices)." Exactly. Thank you. It's a bummer that the rest of the topic turned into some kind of healthcare talkathon (like the topic on California employment law for contractors). I picked up the same overview on antitrust from The Age of Surveillance Capitalism. The new, scary angle is that defacto monopolies are being built around surveillance, not building cars or pumping oil. A quick wikipedia quote concerning Bork's book on the matter: "Bork argues that Congress enacted the Sherman Act as a "consumer welfare prescription."[4] The Supreme Court embraced this view in Reiter v. Sonotone Corp., 442 U.S. 330 (1979) and in all subsequent decisions."
anoncake 7y ago
Which is a fairly absurd interpretation. If lack of competition did not hurt customers, there would be no need to have a market economy in the first place.
youeseh 7y ago
I wonder why Google is being chosen as the first target. Why not Amazon or Apple? Those companies operate marketplaces where they compete with their own vendors directly. Does Google do the same to anywhere near the same degree?

by pge 7y ago

ashleyn 7y ago

> (though what definition it is using instead is unclear) To me it appears the definition being used is any corporate actor obstructing the current administration's agenda.

arshbot 7y ago

There's a really good Planet Money podcast on this topic. Did you know that pre-1980s, antitrust law was used _very_ liberally? There were many documented cases of the book being thrown at tiny companies looking to merge - the book that changed everyone's mind ( The Antitrust Paradox ) lists examples such as a merger between local groceries being denied as one of many great examples of antitrust law getting in the way of healthy competition instead of promoting it. It seems that for most of the 10th century, antitrust law usage was on one side of the bar being used far too much, and as a reaction it's far too much on the other side - seldom used to the point where most industries are dominated by one or two giants. It's just bad luck this transition seemed to have happened during a boom period of new industries and extreme growth.

xurias 7y ago
> examples such as a merger between local groceries being denied as one of many great examples of antitrust law getting in the way of healthy competition instead of promoting it. Maybe I need to read the book but I don't see it. Consolidation of supermarkets has clearly reduced competition in the US. A small handful of companies have cornered the market because the US government stopped using antitrust laws liberally. I'm not sure what popularity has to do at all with economic issues.
- losvedir 7y ago
  Groceries are like the pinnacle example of capitalism and competition working well. Everyone loves grocery stores, and we have a wonderful product selection for very cheap prices! I don't know if we have just "a small handful of companies" or not, but it certainly doesn't work as a compelling example for me of an anti-trust problem.
  - xurias 7y ago
    Everybody loves Amazon, doesn't mean they aren't horribly monopolistic and don't have widespread economic/social impact on certain classes of people.
    - LanceH 7y ago
      What exactly does Amazon have a monopoly on? They are big and the easiest and most obvious to use and their prices are frequently good, but none of those are exclusively Amazon.
  - ambicapter 7y ago
    > very cheap prices Citation needed on this one. Not my experience at all.
    - fuzz4lyfe 7y ago
      20 pounds of rice, $8.48. [0](Just the first price I found online) At four servings per pound that is 80 servings at $0.106 each. Average yield of a rice plant, 10 grams.[1] 9071.85 grams of rice is 907 plants roughly. That's less than a cent to cultivate, grow, prepare, bag and ship a rice plant. Let alone maintain the store where it is sold and pay the workers who sell it to you. This is the miracle of the free market. What price do you suggest is more fair? [0]https://www.walmart.com/ip/Great-Value-Long-Grain-Enriched-Rice-20-lb/10315883 https://www.walmart.com/ip/Great-Value-Long-Grain-Enriched-R... [1]https://www.quora.com/How-much-rice-does-1-plant-yield https://www.quora.com/How-much-rice-does-1-plant-yield

caseysoftware 7y ago

> For the last 40 years, Google would never have been challenged as a monopoly because its products were free to consumers, hence there could be no harm to them, hence no monopoly. Same for Facebook. This is demonstrably false. The Microsoft anti-trust case began with them giving away Internet Explorer which led to further discoveries of them harming the performance of or outright blocking other applications and eventually that they subsidized manufacturers. If Google, Facebook, et al is giving away a product for free (similar to dumping) to build a moat around their other products.. that's one thing. If that dumping harms or disrupts competitive products, that's another. It has nothing to do with free but with "harm".

SilasX 7y ago
In the MS case, they gave away a free product that was tightly coupled to a hard-to-avoid monopoly that they did have (the operating system). It wasn't just the dumping of a free product that got them in trouble. Google doesn't have that for search -- or at least, didn't until they had a broader suite of products with lock-in.

skewart 7y ago

> For the last 40 years, Google would never have been challenged as a monopoly because its products were free to consumers, hence there could be no harm to them, hence no monopoly. Same for Facebook. Google and Facebook's primary products are advertising. Things like web search, email, maps, and social networking are part of their supply chain for building their ad product. (And people who use these services are suppliers who are trading our exposure to ads in exchange for access to search, email, maps, social networking, etc.) Google and Facebook don't give away advertising space for free, and they both have very dominant positions in a number of ad markets.

skybrian 7y ago
On the other hand, there is plenty of competition in the ad industry and prices are low in general. It's quite hard for publishers to make money unless they have vast scale. So if you are looking at the cost to advertisers, it's hard to argue for monopoly status there.

PorterDuff 7y ago

"whether a company’s dominant position in an industry hurt consumers (ie created higher prices)." Exactly. Thank you. It's a bummer that the rest of the topic turned into some kind of healthcare talkathon (like the topic on California employment law for contractors). I picked up the same overview on antitrust from The Age of Surveillance Capitalism. The new, scary angle is that defacto monopolies are being built around surveillance, not building cars or pumping oil. A quick wikipedia quote concerning Bork's book on the matter: "Bork argues that Congress enacted the Sherman Act as a "consumer welfare prescription."[4] The Supreme Court embraced this view in Reiter v. Sonotone Corp., 442 U.S. 330 (1979) and in all subsequent decisions."

anoncake 7y ago

Which is a fairly absurd interpretation. If lack of competition did not hurt customers, there would be no need to have a market economy in the first place.

youeseh 7y ago

I wonder why Google is being chosen as the first target. Why not Amazon or Apple? Those companies operate marketplaces where they compete with their own vendors directly. Does Google do the same to anywhere near the same degree?