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If you cut any industry finely enough, you will find a monopoly. The pizza restaurant next door is a monopolist in the pizza category on my street. So if you d

If you cut any industry finely enough, you will find a monopoly. The pizza restaurant next door is a monopolist in the pizza category on my street. So if you don’t want policy to be completely arbitrary, you’ll need some principles to follow when drawing industry boundaries.

hn_throwaway_99 6y ago
> The pizza restaurant next door is a monopolist in the pizza category on my street. That's ridiculous. Sure, it may be easiest to order from the guy next door, but if you don't like the pizza next door, you can easily call the guy 3 blocks down the street. My point is you have options when it comes to pizza. There are many types of businesses that simply do not have any options besides Google. Don't believe me? Ask literally anyone who works in digital advertising. If you were planning any kind of digital ad campaign that relied on search, and you said you weren't going to spend on Google, they'd think you were insane. "Oh yeah, I've decided to put all my search ad spend on Bing." It sounds ridiculously laughable just writing it out.
- aaronAgain 6y ago
  I work for Bing. Awwww, man. ;-)
- cageface 6y ago
  By this logic Apple is a monopoly in the mobile space since nobody can afford to ignore them when building apps.
  - ethbro 6y ago
    Yes.
  - sudosysgen 6y ago
    People absolutely can afford to ignore Apple in the mobile space, except if your app is 100% reliant on the US market. iOS is only about 20-25% of the global market.
    - cageface 6y ago
      We're talking about US antitrust law and its enforcement in this thread. And in the US market iOS is the priority for app developers.
      - sudosysgen 6y ago
        Very few US companies operate only in the US as far as app development, and none of the statistics I've seen so far concern solely the US. In any case, if you're making a social media app or other international app, an Android version is likely more important.
        bananabreakfast 6y ago
        You're kind of completely missing the point you're responding to. There is no such thing as international anti-trust. In this conversation the US market is the only thing that matters since we are talking about US law. Hence, android does not really matter much for revenue.
        sudosysgen 6y ago
        That is not entirely true, because the internet is inherently international. It is a different kind of anti-trust, though I recognize that laws haven't caught up to it. Even in the US, Apple does not have even close to a monopoly over Android, anyways. At best they have 50% of the marketshare.
        fauigerzigerk 6y ago
        iOS has 58.54% market share in the US according to https://gs.statcounter.com/os-market-share/mobile/united-states-of-america https://gs.statcounter.com/os-market-share/mobile/united-sta...
    - pb7 6y ago
      And yet iOS generates 80% more revenue than Android does[0]. If you want to make money, you can't ignore Apple. [0] https://appleinsider.com/articles/19/07/03/apples-app-store-generated-80-more-revenue-than-google-play-with-a-third-as-many-installs-in-first-half-of-2019 https://appleinsider.com/articles/19/07/03/apples-app-store-...
  - danaris 6y ago
    That would be closer to a monopsony (single buyer), though the details get a bit fuzzy when talking about platforms rather than straight customer-seller relationships.
  - ponker 6y ago
    Yes, it is. Not in defanged US antitrust law, but in reality.
  - hackerbrother 6y ago
    I think there are lots of monopolies, yeah
  - thayne 6y ago
    That's because Apple is a monopoly, or at least Google and apple form a duoopoly. And if you make mobile apps you have to pay the google tax, apple tax, or more likely both.And play by their rules.
    - TheSpiceIsLife 6y ago
      This raises and interesting point: Would consumers be better served if app developers had to pay the Google tax, the Apple tax aaaaaand the Microsoft tax, the Samsung tax, the HTC tax, etc etc etc?
      - fauigerzigerk 6y ago
        Yes, because if there was competition, that "tax" would likely be lower. For instance, Microsoft's fees for one-off purchases are just half of what Apple/Google are charging.
    - mrep 6y ago
      On android, you can publish yourself which Fortnite did [0]. iOS you cannot though and in fact they are getting sued for their "abusive monopoly in iOS app/in-app distribution services" [1]. [0]: https://www.bbc.com/news/technology-45063002#:~:text=The%20developer%20of%20Fortnite%20has,30%25%20cut%20of%20sales%20made https://www.bbc.com/news/technology-45063002#:~:text=The%20d.... [1]: https://www.hbsslaw.com/uploads/case_downloads/apple-dev/2019-06-04-complaint-apple-developers.pdf https://www.hbsslaw.com/uploads/case_downloads/apple-dev/201...
      - thayne 6y ago
        Yes, it is technically possible. But good luck getting your users to do that if you aren't as big as fortnite.
  - haroldship 6y ago
    https://www.google.com/amp/s/www.theverge.com/platform/amp/2019/6/4/18652460/apple-class-action-lawsuit-monopoly-app-store https://www.google.com/amp/s/www.theverge.com/platform/amp/2...
    - lexs 6y ago
      NO AMP: https://www.theverge.com/2019/6/4/18652460/apple-class-action-lawsuit-monopoly-app-store https://www.theverge.com/2019/6/4/18652460/apple-class-actio...
- xapata 6y ago
  Doesn't that mean spending on Google is profitable? You can simply set a bid limit at less than your customer lifetime value (multiplied by conversion rate) on all channels. If someone outbids you systematically, then your spend in that channel drops to zero. Who cares whether it's Google or anyone else. The right move is to spend on all profitable channels, and if you run out of money, borrow more. Why pass up profit when capital is so cheap?
smnrchrds 6y ago
>If you cut any industry finely enough, you will find a monopoly And inversely, if you cut any industry coarsely enough, you will never find any monopolies. "Don't break us up! Sure, we may own the entire telephone service, but we do not have a monopoly. See, you should be looking at total human communications. People talk in person, send letters, etc. We own a teeny tiny slice of total human communications." "Don't break us up! Sure, we may own the entire rail network, but we do not have a monopoly. See, you should be looking at entire human travel. People walk, ride horses, travel by ships, etc. We own a teeny tiny slice of total travel industry."
- dantheman 6y ago
  The only monopoly is the government granted monopoly, ma bell was one.
  - smnrchrds 6y ago
    So if Verizon manages to, through mergers and acquisitions and like, get a 100% market share in the US, it would still not be a monopoly, because it is not government granted?
    - nyx_ 6y ago
      Of course not. If you don't like paying the monopoly prices, you can just, uh... you can just start your own backyard wireless telecommunications service provider.
      - wbl 6y ago
        MCI was created to compete with Ma Bell and did so.
    - akiselev 6y ago
      In Verizon's specific case it would be a government granted monopoly either way. Between infrastructure easements to wireless spectrum to state laws banning municipal competition, that industry is government granted through and through.
summerlight 6y ago
We already have a framework to define markets, called hypothetical monopolist test. It's conceptually simple; given a market definition, can a hypothetical monopolist impose significant increases in price without customers turning away? If not, it means there's competitors so it's not monopoly. In this definition, Google's not going to be a monopolist as advertisers can easily reallocate their budget to alternative options (FB, Amazon, etc) to improve their ROI if Google decides to increase their fee significantly. Publishers don't have much options other than AdSense to sell their ad slots so it's monopsony(=single buyer controls the market). Not sure if the US antitrust law can handle this situation. If so, then this is going to be a landmark case.
- hn_throwaway_99 6y ago
  > In this definition, Google's not going to be a monopolist as advertisers can easily reallocate their budget to alternative options (FB, Amazon, etc) to improve their ROI if Google decides to increase their fee significantly. That is the point I 100% absolutely disagree with. Ask any digital marketer, most of them see FB and Amazon as serving different purposes than what targeted search ads do. If you put 'Bing' or 'DuckDuckGo' I would agree with you, but in that case you'll find that the way Adwords bidding work that Google pretty much already takes a huge portion of potential margin - in many areas with deep-pocketed investors who think they'll eventually turn profitable Google actually takes more than 100% of potential margin.
  - summerlight 6y ago
    > Ask any digital marketer, most of them see FB and Amazon as serving different purposes than what targeted search ads do. I'm very well aware of this, but this doesn't necessarily mean that budget planning will be done completely independent across multiple different channels. We already have observed a significant fraction of search advertisements budget has been moved from Google to Amazon as Amazon becomes a more effective ads platform. In fact, nowaway this becomes a much more attractive option since Amazon now owns literally everything from advertisements, auction, optimization and measurements in a single platform. > in many areas with deep-pocketed investors who think they'll eventually turn profitable Google actually takes more than 100% of potential margin. Most of the Google's largest advertisers are big, conventional companies with a strong cash flow, not those burning the money from investors. They really care about incrementality, efficacy, measurement and performance. Sure, you can probably burn a few million dollars without a good reason but you cannot spend x100 like that.

hn_throwaway_99 6y ago

> The pizza restaurant next door is a monopolist in the pizza category on my street. That's ridiculous. Sure, it may be easiest to order from the guy next door, but if you don't like the pizza next door, you can easily call the guy 3 blocks down the street. My point is you have options when it comes to pizza. There are many types of businesses that simply do not have any options besides Google. Don't believe me? Ask literally anyone who works in digital advertising. If you were planning any kind of digital ad campaign that relied on search, and you said you weren't going to spend on Google, they'd think you were insane. "Oh yeah, I've decided to put all my search ad spend on Bing." It sounds ridiculously laughable just writing it out.

aaronAgain 6y ago
I work for Bing. Awwww, man. ;-)
cageface 6y ago
By this logic Apple is a monopoly in the mobile space since nobody can afford to ignore them when building apps.
- ethbro 6y ago
  Yes.
- sudosysgen 6y ago
  People absolutely can afford to ignore Apple in the mobile space, except if your app is 100% reliant on the US market. iOS is only about 20-25% of the global market.
  - cageface 6y ago
    We're talking about US antitrust law and its enforcement in this thread. And in the US market iOS is the priority for app developers.
    - sudosysgen 6y ago
      Very few US companies operate only in the US as far as app development, and none of the statistics I've seen so far concern solely the US. In any case, if you're making a social media app or other international app, an Android version is likely more important.
      - bananabreakfast 6y ago
        You're kind of completely missing the point you're responding to. There is no such thing as international anti-trust. In this conversation the US market is the only thing that matters since we are talking about US law. Hence, android does not really matter much for revenue.
        sudosysgen 6y ago
        That is not entirely true, because the internet is inherently international. It is a different kind of anti-trust, though I recognize that laws haven't caught up to it. Even in the US, Apple does not have even close to a monopoly over Android, anyways. At best they have 50% of the marketshare.
        fauigerzigerk 6y ago
        iOS has 58.54% market share in the US according to https://gs.statcounter.com/os-market-share/mobile/united-states-of-america https://gs.statcounter.com/os-market-share/mobile/united-sta...
  - pb7 6y ago
    And yet iOS generates 80% more revenue than Android does[0]. If you want to make money, you can't ignore Apple. [0] https://appleinsider.com/articles/19/07/03/apples-app-store-generated-80-more-revenue-than-google-play-with-a-third-as-many-installs-in-first-half-of-2019 https://appleinsider.com/articles/19/07/03/apples-app-store-...
- danaris 6y ago
  That would be closer to a monopsony (single buyer), though the details get a bit fuzzy when talking about platforms rather than straight customer-seller relationships.
- ponker 6y ago
  Yes, it is. Not in defanged US antitrust law, but in reality.
- hackerbrother 6y ago
  I think there are lots of monopolies, yeah
- thayne 6y ago
  That's because Apple is a monopoly, or at least Google and apple form a duoopoly. And if you make mobile apps you have to pay the google tax, apple tax, or more likely both.And play by their rules.
  - TheSpiceIsLife 6y ago
    This raises and interesting point: Would consumers be better served if app developers had to pay the Google tax, the Apple tax aaaaaand the Microsoft tax, the Samsung tax, the HTC tax, etc etc etc?
    - fauigerzigerk 6y ago
      Yes, because if there was competition, that "tax" would likely be lower. For instance, Microsoft's fees for one-off purchases are just half of what Apple/Google are charging.
  - mrep 6y ago
    On android, you can publish yourself which Fortnite did [0]. iOS you cannot though and in fact they are getting sued for their "abusive monopoly in iOS app/in-app distribution services" [1]. [0]: https://www.bbc.com/news/technology-45063002#:~:text=The%20developer%20of%20Fortnite%20has,30%25%20cut%20of%20sales%20made https://www.bbc.com/news/technology-45063002#:~:text=The%20d.... [1]: https://www.hbsslaw.com/uploads/case_downloads/apple-dev/2019-06-04-complaint-apple-developers.pdf https://www.hbsslaw.com/uploads/case_downloads/apple-dev/201...
    - thayne 6y ago
      Yes, it is technically possible. But good luck getting your users to do that if you aren't as big as fortnite.
- haroldship 6y ago
  https://www.google.com/amp/s/www.theverge.com/platform/amp/2019/6/4/18652460/apple-class-action-lawsuit-monopoly-app-store https://www.google.com/amp/s/www.theverge.com/platform/amp/2...
  - lexs 6y ago
    NO AMP: https://www.theverge.com/2019/6/4/18652460/apple-class-action-lawsuit-monopoly-app-store https://www.theverge.com/2019/6/4/18652460/apple-class-actio...
xapata 6y ago
Doesn't that mean spending on Google is profitable? You can simply set a bid limit at less than your customer lifetime value (multiplied by conversion rate) on all channels. If someone outbids you systematically, then your spend in that channel drops to zero. Who cares whether it's Google or anyone else. The right move is to spend on all profitable channels, and if you run out of money, borrow more. Why pass up profit when capital is so cheap?

smnrchrds 6y ago

>If you cut any industry finely enough, you will find a monopoly And inversely, if you cut any industry coarsely enough, you will never find any monopolies. "Don't break us up! Sure, we may own the entire telephone service, but we do not have a monopoly. See, you should be looking at total human communications. People talk in person, send letters, etc. We own a teeny tiny slice of total human communications." "Don't break us up! Sure, we may own the entire rail network, but we do not have a monopoly. See, you should be looking at entire human travel. People walk, ride horses, travel by ships, etc. We own a teeny tiny slice of total travel industry."

dantheman 6y ago
The only monopoly is the government granted monopoly, ma bell was one.
- smnrchrds 6y ago
  So if Verizon manages to, through mergers and acquisitions and like, get a 100% market share in the US, it would still not be a monopoly, because it is not government granted?
  - nyx_ 6y ago
    Of course not. If you don't like paying the monopoly prices, you can just, uh... you can just start your own backyard wireless telecommunications service provider.
    - wbl 6y ago
      MCI was created to compete with Ma Bell and did so.
  - akiselev 6y ago
    In Verizon's specific case it would be a government granted monopoly either way. Between infrastructure easements to wireless spectrum to state laws banning municipal competition, that industry is government granted through and through.

summerlight 6y ago

We already have a framework to define markets, called hypothetical monopolist test. It's conceptually simple; given a market definition, can a hypothetical monopolist impose significant increases in price without customers turning away? If not, it means there's competitors so it's not monopoly. In this definition, Google's not going to be a monopolist as advertisers can easily reallocate their budget to alternative options (FB, Amazon, etc) to improve their ROI if Google decides to increase their fee significantly. Publishers don't have much options other than AdSense to sell their ad slots so it's monopsony(=single buyer controls the market). Not sure if the US antitrust law can handle this situation. If so, then this is going to be a landmark case.

hn_throwaway_99 6y ago
> In this definition, Google's not going to be a monopolist as advertisers can easily reallocate their budget to alternative options (FB, Amazon, etc) to improve their ROI if Google decides to increase their fee significantly. That is the point I 100% absolutely disagree with. Ask any digital marketer, most of them see FB and Amazon as serving different purposes than what targeted search ads do. If you put 'Bing' or 'DuckDuckGo' I would agree with you, but in that case you'll find that the way Adwords bidding work that Google pretty much already takes a huge portion of potential margin - in many areas with deep-pocketed investors who think they'll eventually turn profitable Google actually takes more than 100% of potential margin.
- summerlight 6y ago
  > Ask any digital marketer, most of them see FB and Amazon as serving different purposes than what targeted search ads do. I'm very well aware of this, but this doesn't necessarily mean that budget planning will be done completely independent across multiple different channels. We already have observed a significant fraction of search advertisements budget has been moved from Google to Amazon as Amazon becomes a more effective ads platform. In fact, nowaway this becomes a much more attractive option since Amazon now owns literally everything from advertisements, auction, optimization and measurements in a single platform. > in many areas with deep-pocketed investors who think they'll eventually turn profitable Google actually takes more than 100% of potential margin. Most of the Google's largest advertisers are big, conventional companies with a strong cash flow, not those burning the money from investors. They really care about incrementality, efficacy, measurement and performance. Sure, you can probably burn a few million dollars without a good reason but you cannot spend x100 like that.