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>"The increasing trend of large tech conglomerates to use one money printing product like AWS or search or the Apple Store to tactically snipe competitors to de

>"The increasing trend of large tech conglomerates to use one money printing product like AWS or search or the Apple Store to tactically snipe competitors to destroy or acquire them is absolutely abysmal in the long run." That's literally how every company ever in any industry since the dawn of commerce has operated. You use profits to grow and diversify. You can't perform capital expenditure without capital...

new_realist 6y ago
That’s not the anti-competitive behavior described above.
Barrin92 6y ago
my answer to that is, yes that is how every other industry operates, which is why every other industry is painfully slow. Tech was the rare exception of having the advantage of starting from a blank slate a few decades ago, and it was insanely innovative. There's no excuse to let it calcify into the state of every other industry, and I'd take your point and go further, go to every other industry and do the same. Go to telecommunications and break the big players up and create marketplaces in which small players can innovate. Do it in news media and undo that awful communications act from 96 that led to industry concentration. We need to take an activist attitude to anti-trust that actively seeks to create rabidly competitive markets which is what fuelled early tech's growth, instead of letting tech slide into the status quo. And of course all of these companies will still have access to capital. They'll just need to convince investors that their product is better.
- monadic2 6y ago
  Early markets were fueled by capital, not competition. Capital needs to be reigned in with these monopolies or we’ll just sprout more. Let’s not pretend like competitive markets are possible with the kind of capital needed to compete.
  - erichocean 6y ago
    > Let’s not pretend like competitive markets are possible with the kind of capital needed to compete. The entire purpose of injecting capital in such large amounts is to prevent competition. That's literally the entire point.
- bobdole12345 6y ago
  The only reason Google can be Google is economy of scale. No matter how friendly you make the marketplace for proto-Google hopefuls, they an never even approach the infrastructure capable of making the same product. Telecom and the like are the same, competition leads to fragmentation and destruction of opportunity. Monopolies lead to bad platforms, but platforms that hit the scale divided and broken half solutions never will.
  - roenxi 6y ago
    That is a theory; not necessarily a decided reality. Google is an ad company; their product is an audience and an advertising system. There is no reason that advertising should be untouchable except at scale. There are plenty of tiny players who eke out a profitable existence at small scale with ads. It is likely there is a path from there up into a mega-giant if someone really goes to look for it. If anything, advertising might suffer diseconomies of scale for most products. Small businesses want to advertise locally.
    - bobdole12345 6y ago
      Google is a search engine company that gives better results because it has more opportunities to improve the product with each request it sees. Advertising is the same way: The more opportunities you have to try matching a person with a thing they might like, the more you'll learn. Google is on a scale that are likely two orders of magnitude more than their closest competitor. Hilariously, Google is by far the best at mapping local people with local businesses, as they've mapped most commercial centers, and run heavy machine learning across them to extract information their competitors can't even hope to try for another decade.
    - sytelus 6y ago
      Each search costs 0.0003 kWh of energy in Google infrastructure. That's just energy bill. Now think about massive infrastructure that is out there giving you sub-second results for 40,000 queries each second all over the world. Think about the man power that does on day-in day-out to make sure things are not gamed in constant war of SEO. I highly doubt Google can function in same way without economy of scale.
kelnos 6y ago
Ok, so you have some spare capital from being successful in one market. You want to move into a new market, and that spare capital is your ticket in. There's a difference between building a sustainable, independent business with that capital, and strangling competitors in the new market by moving in and charging well below your cost until those competitors are dead. The former benefits consumers by giving them more choice. The latter gives consumers lower prices in the short term, but then hurts them overall when the competitors are forced out and prices inevitably rise again, this time without any competitive pressure to keep costs low, margins reasonable, and product/service quality high. And regardless of whether or not the latter is common, or has always been common, I maintain that it is a huge negative aspect of capitalism that destroys wealth, creates inefficiency, and hurts consumers. Regulation that targets that practice would be welcome.
- missedthecue 6y ago
  >"but then hurts them overall when the competitors are forced out and prices inevitably rise again," Can you provide a contempory example of this happening?
  - TeaDrunk 6y ago
    Microsoft?
    - missedthecue 6y ago
      Microsoft did the opposite. They bundled for free. They never pushed up costs
      - avianlyric 6y ago
        That conclusion is based on the premise that their software would have been priced the same if they hadn't bundled in "free" software. Not sure we have enough data to make that conclusion. Ultimately you were charged for the "free" bundled software, you just couldn't get a line item break down of how of the bundle price was made up by that "free" software. Not saying that Microsoft should break down their OS prices by bundled software, or that it makes sense. But without that breakdown you can't make the assertion that "They never pushed up costs".
jacobwilliamroy 6y ago
Yeah, but these are primates and no primate is evolved enough to handle consolidation without turning into a total fuck-off tyrant. You know at one point the British Empire controlled over a quarter of the entire world? They had a real opportunity to usher in a new era of peace and cooperation. Did they do it? NOOOOO!!! NO ONE EVER DOES!
metrokoi 6y ago
Deliberately targeting growing competitors using things like predatory pricing [0] is not the same as growing and diversifying. [0] https://www.aei.org/technology-and-innovation/who-should-antitrust-protect-the-case-of-diapers-com/ https://www.aei.org/technology-and-innovation/who-should-ant...
- saiya-jin 6y ago
  Still, it has been part of capitalism since its dawn... not saying its the best for us all - far from it, but no huge multinational corporation grew to its size by playing nice and polite. The thing is, amoral behavior can be seen left and right, through large part of history of Silicon Valley (remember Gates & Jobs & Xerox). To me as an end consumer, Facebook has a true monopoly and progressively shittier products compared to Google - ads comprising half of my feed, their core product is still broken and buggy in many places but that's another topic. Recent UI changes made it much worse product. Google looks great compared. But again that's very personal and limited view.
  - buzzkillington 6y ago
    >Still, it has been part of capitalism since its dawn... So was slavery. Yet somehow we managed to legislate that away.
    - marcinzm 6y ago
      Those competitors are fueled by VC money which let's them price their products below sustainable levels. In other words they're doing predatory pricing just as much as Amazon. Banning it will probably help Amazon more than it hurts them.
- scarface74 6y ago
  How is that any different than every VC backed startup?
monadic2 6y ago
That ain’t a good thing, it just means this kind of hellscape is inevitable.
erichocean 6y ago
> That's literally how every company ever in any industry since the dawn of commerce has operated. Not even close to true, you're describing how "financial capitalism" works which is relatively modern (in the US, it begin in the early 1900s after the creation of the Federal Reserve). Until you financialize an economy, businesses can't use that kind of strategy to compete. Once you do, only those with access to finance can win. Read up on industrial capitalism which relies on the quality of products and services—not access to finance, aka money printing—to compete in the marketplace. That's how the US was built originally, and what most Americans mean when they say they support "capitalism."
- tridentlead 6y ago
  This is materially false. Throughout history capital has been used to stop competitors. Capital is not necessarily money in a practical sense. Regardless, money has decided these things for hundreds of years as well. Whether nation states rose or fell depended on whether they could pay mercenaries to fight for them. The largest brick castle in the world, Malbork fell when the Teutonic order was besieged and could no longer pay the castles defenders. They were then “bought out” by a Polish general. This doesn’t just apply to mercenary armies, or war, by the way. This isn’t just some product of “modern capitalism”.
  - erichocean 6y ago
    > Throughout history capital has been used to stop competitors. Your examples are nations, not businesses. Obviously the economics of warfare are different: money (and resources more generally) are how you defeat your "enemies." I'm talking about capitalism, both industrial (Wealth of Nations-style) and modern financial capitalism which is the domain of business and markets, not war.
- spc476 6y ago
  So where does Standard Oil fall into this classification? It spent the 1880s and 1890s using its vast profits from refining oil to buy up railroads to stifle competing oil refineries by restricting access to rail transport.

new_realist 6y ago

That’s not the anti-competitive behavior described above.

Barrin92 6y ago

my answer to that is, yes that is how every other industry operates, which is why every other industry is painfully slow. Tech was the rare exception of having the advantage of starting from a blank slate a few decades ago, and it was insanely innovative. There's no excuse to let it calcify into the state of every other industry, and I'd take your point and go further, go to every other industry and do the same. Go to telecommunications and break the big players up and create marketplaces in which small players can innovate. Do it in news media and undo that awful communications act from 96 that led to industry concentration. We need to take an activist attitude to anti-trust that actively seeks to create rabidly competitive markets which is what fuelled early tech's growth, instead of letting tech slide into the status quo. And of course all of these companies will still have access to capital. They'll just need to convince investors that their product is better.

monadic2 6y ago
Early markets were fueled by capital, not competition. Capital needs to be reigned in with these monopolies or we’ll just sprout more. Let’s not pretend like competitive markets are possible with the kind of capital needed to compete.
- erichocean 6y ago
  > Let’s not pretend like competitive markets are possible with the kind of capital needed to compete. The entire purpose of injecting capital in such large amounts is to prevent competition. That's literally the entire point.
bobdole12345 6y ago
The only reason Google can be Google is economy of scale. No matter how friendly you make the marketplace for proto-Google hopefuls, they an never even approach the infrastructure capable of making the same product. Telecom and the like are the same, competition leads to fragmentation and destruction of opportunity. Monopolies lead to bad platforms, but platforms that hit the scale divided and broken half solutions never will.
- roenxi 6y ago
  That is a theory; not necessarily a decided reality. Google is an ad company; their product is an audience and an advertising system. There is no reason that advertising should be untouchable except at scale. There are plenty of tiny players who eke out a profitable existence at small scale with ads. It is likely there is a path from there up into a mega-giant if someone really goes to look for it. If anything, advertising might suffer diseconomies of scale for most products. Small businesses want to advertise locally.
  - bobdole12345 6y ago
    Google is a search engine company that gives better results because it has more opportunities to improve the product with each request it sees. Advertising is the same way: The more opportunities you have to try matching a person with a thing they might like, the more you'll learn. Google is on a scale that are likely two orders of magnitude more than their closest competitor. Hilariously, Google is by far the best at mapping local people with local businesses, as they've mapped most commercial centers, and run heavy machine learning across them to extract information their competitors can't even hope to try for another decade.
  - sytelus 6y ago
    Each search costs 0.0003 kWh of energy in Google infrastructure. That's just energy bill. Now think about massive infrastructure that is out there giving you sub-second results for 40,000 queries each second all over the world. Think about the man power that does on day-in day-out to make sure things are not gamed in constant war of SEO. I highly doubt Google can function in same way without economy of scale.

kelnos 6y ago

Ok, so you have some spare capital from being successful in one market. You want to move into a new market, and that spare capital is your ticket in. There's a difference between building a sustainable, independent business with that capital, and strangling competitors in the new market by moving in and charging well below your cost until those competitors are dead. The former benefits consumers by giving them more choice. The latter gives consumers lower prices in the short term, but then hurts them overall when the competitors are forced out and prices inevitably rise again, this time without any competitive pressure to keep costs low, margins reasonable, and product/service quality high. And regardless of whether or not the latter is common, or has always been common, I maintain that it is a huge negative aspect of capitalism that destroys wealth, creates inefficiency, and hurts consumers. Regulation that targets that practice would be welcome.

missedthecue 6y ago
>"but then hurts them overall when the competitors are forced out and prices inevitably rise again," Can you provide a contempory example of this happening?
- TeaDrunk 6y ago
  Microsoft?
  - missedthecue 6y ago
    Microsoft did the opposite. They bundled for free. They never pushed up costs
    - avianlyric 6y ago
      That conclusion is based on the premise that their software would have been priced the same if they hadn't bundled in "free" software. Not sure we have enough data to make that conclusion. Ultimately you were charged for the "free" bundled software, you just couldn't get a line item break down of how of the bundle price was made up by that "free" software. Not saying that Microsoft should break down their OS prices by bundled software, or that it makes sense. But without that breakdown you can't make the assertion that "They never pushed up costs".

jacobwilliamroy 6y ago

Yeah, but these are primates and no primate is evolved enough to handle consolidation without turning into a total fuck-off tyrant. You know at one point the British Empire controlled over a quarter of the entire world? They had a real opportunity to usher in a new era of peace and cooperation. Did they do it? NOOOOO!!! NO ONE EVER DOES!

metrokoi 6y ago

Deliberately targeting growing competitors using things like predatory pricing [0] is not the same as growing and diversifying. [0] https://www.aei.org/technology-and-innovation/who-should-antitrust-protect-the-case-of-diapers-com/ https://www.aei.org/technology-and-innovation/who-should-ant...

saiya-jin 6y ago
Still, it has been part of capitalism since its dawn... not saying its the best for us all - far from it, but no huge multinational corporation grew to its size by playing nice and polite. The thing is, amoral behavior can be seen left and right, through large part of history of Silicon Valley (remember Gates & Jobs & Xerox). To me as an end consumer, Facebook has a true monopoly and progressively shittier products compared to Google - ads comprising half of my feed, their core product is still broken and buggy in many places but that's another topic. Recent UI changes made it much worse product. Google looks great compared. But again that's very personal and limited view.
- buzzkillington 6y ago
  >Still, it has been part of capitalism since its dawn... So was slavery. Yet somehow we managed to legislate that away.
  - marcinzm 6y ago
    Those competitors are fueled by VC money which let's them price their products below sustainable levels. In other words they're doing predatory pricing just as much as Amazon. Banning it will probably help Amazon more than it hurts them.
scarface74 6y ago
How is that any different than every VC backed startup?

monadic2 6y ago

That ain’t a good thing, it just means this kind of hellscape is inevitable.

erichocean 6y ago

> That's literally how every company ever in any industry since the dawn of commerce has operated. Not even close to true, you're describing how "financial capitalism" works which is relatively modern (in the US, it begin in the early 1900s after the creation of the Federal Reserve). Until you financialize an economy, businesses can't use that kind of strategy to compete. Once you do, only those with access to finance can win. Read up on industrial capitalism which relies on the quality of products and services—not access to finance, aka money printing—to compete in the marketplace. That's how the US was built originally, and what most Americans mean when they say they support "capitalism."

tridentlead 6y ago
This is materially false. Throughout history capital has been used to stop competitors. Capital is not necessarily money in a practical sense. Regardless, money has decided these things for hundreds of years as well. Whether nation states rose or fell depended on whether they could pay mercenaries to fight for them. The largest brick castle in the world, Malbork fell when the Teutonic order was besieged and could no longer pay the castles defenders. They were then “bought out” by a Polish general. This doesn’t just apply to mercenary armies, or war, by the way. This isn’t just some product of “modern capitalism”.
- erichocean 6y ago
  > Throughout history capital has been used to stop competitors. Your examples are nations, not businesses. Obviously the economics of warfare are different: money (and resources more generally) are how you defeat your "enemies." I'm talking about capitalism, both industrial (Wealth of Nations-style) and modern financial capitalism which is the domain of business and markets, not war.
spc476 6y ago
So where does Standard Oil fall into this classification? It spent the 1880s and 1890s using its vast profits from refining oil to buy up railroads to stifle competing oil refineries by restricting access to rail transport.