3 ms·

> No, I think it is a pretty clear example of rent-seeking on Google's behalf. If anything, rent-seeking would be the other way, but that's still a big stretch

> No, I think it is a pretty clear example of rent-seeking on Google's behalf. If anything, rent-seeking would be the other way, but that's still a big stretch. The phone manufacturers know that searches are valuable to search engines, so they charge for it even though they're not doing anything but being a broker for their users. But while that is getting a cut (literally seeking rent), calling it "rent seeking" is a stretch, because clearly that brokering and OS space is naturally valuable and the phone companies aren't just injecting themselves into someone else's money-making process.

whimsicalism 6y ago
The rent seeking is on the other end. Google pays off phone manufacturers to sign onerous contract preventing them from installing other app stores or displaying other options on the home screen or during the setup process -> They then collect rent from the companies that have to offer their apps on the Play Store. From wikipedia, "An example of rent-seeking in a modern economy is spending money on lobbying for government subsidies in order to be given wealth that has already been created." In this instance, the phone vendors are the politicians.
- magicalist 6y ago
  >> Of all the things in the tech world they chose Google paying Apple, Samsung, et.al. to be the default search engine to sue over. That's not really evidence of Google blocking competition. That's evidence of phone manufacturers using their power in one market (phone sales) to extract cash out of another (search/ads). > No, I think it is a pretty clear example of rent-seeking on Google's behalf. Not sure what conversation you're having in the above comment, but this is the one that I was responding to :)
  - whimsicalism 6y ago
    Google engages in anti-competitive behavior (ie. using their capital to increase the entry barriers for other app store markets on Android), so that they can then collect rent on their app store (among other things, like search/advertising). The anti-competitive actions (paying off phone vendors) that Google takes are part of that rent-seeking behavior, just as companies that lobby politicians to increase barriers to entry so they can raise prices are engaging in rent-seeking. If you want to nit-pick and say the play store pricing is the rent-seeking and the paying off of the phone vendors is the anti-competitive behavior, I wouldn't have a huge quibble with that.
    - magicalist 6y ago
      It's not nit picking to say you're giving non sequiturs to the comments you were responding to. > Google engages in anti-competitive behavior (ie. using their capital to increase the entry barriers for other app store markets on Android), so that they can then collect rent on their app store (among other things, like search/advertising). There is an argument that could be made that companies taking a 30% cut of app store revenue is rent seeking, but it makes no sense to say that Google is paying Apple per-user search acquisition fees in iOS Safari so that Google can then turn around and collect fees in the iOS App Store (because obviously that's not a thing).
      - whimsicalism 6y ago
        You're absolutely correct, I misread the original comment and doubled-down rather than double-checking, which is my fault. I was thrown off by the reference to the "OS space" in your comment. I still think what I'm saying is true, but agree that it is not quite the same issue.
        sixstringtheory 6y ago
        It seems like you're both right and we're just looking for the right words... there are anti-competitive as well as rent-seeking behaviors, would the combination of those be racketeering?
- jariel 6y ago
  This is definitely not a good example of 'rent seeking'. 'Rent seeking' is real-estate. You buy a property, you seek 'rent' for the rights to access it. It's that simple. It's considered different than other economic activity because it's not productive in nature. Edit: 1) From Investoopedia: "Economic rent is the income earned from utilization of resource ownership. Entities that own resources can lend them to earn interest rents, lease them to earn rental income, or they may utilize their resources in other income-producing ways." 2) Here is Carl Marx agreeing with literally Adam Smith "Adam Smith correctly defines rent as “the price paid for the use of land” ([O.U.P., Vol. I, p. 162; Garnier,] t, I, p. 299) - in 'Theories of Surplus Value'. Renting out a plot of land is the easiest, simplest, most obvious example of rent-seeking.
- xxpor 6y ago
  >Google pays off phone manufacturers to sign onerous contract preventing them from installing other app stores or displaying other options on the home screen or during the setup process GOOD Here's the problem. You want to make it illegal for google to stop phone manufacturers from installing even more crapware than they do already? How would that be a win for anyone besides Samsung/LG/Sony/etc? Encouraging even more fracturing of the Android ecosystem and the lack of updates? Google is protecting consumer welfare. This should be encouraged, not looked at skeptically. This is not the MS in the 90s situation where manufacturers couldn't install Linux instead of Windows. This would be MS saying you can't install BonziBuddy and sell it with our logo and services on it.
  - whimsicalism 6y ago
    If it was a win for Samsung/LG/Sony to install crap-ware, then they would be doing it already rather than signing lucrative contracts that help Google maintain its monopoly position.

whimsicalism 6y ago

The rent seeking is on the other end. Google pays off phone manufacturers to sign onerous contract preventing them from installing other app stores or displaying other options on the home screen or during the setup process -> They then collect rent from the companies that have to offer their apps on the Play Store. From wikipedia, "An example of rent-seeking in a modern economy is spending money on lobbying for government subsidies in order to be given wealth that has already been created." In this instance, the phone vendors are the politicians.

magicalist 6y ago
>> Of all the things in the tech world they chose Google paying Apple, Samsung, et.al. to be the default search engine to sue over. That's not really evidence of Google blocking competition. That's evidence of phone manufacturers using their power in one market (phone sales) to extract cash out of another (search/ads). > No, I think it is a pretty clear example of rent-seeking on Google's behalf. Not sure what conversation you're having in the above comment, but this is the one that I was responding to :)
- whimsicalism 6y ago
  Google engages in anti-competitive behavior (ie. using their capital to increase the entry barriers for other app store markets on Android), so that they can then collect rent on their app store (among other things, like search/advertising). The anti-competitive actions (paying off phone vendors) that Google takes are part of that rent-seeking behavior, just as companies that lobby politicians to increase barriers to entry so they can raise prices are engaging in rent-seeking. If you want to nit-pick and say the play store pricing is the rent-seeking and the paying off of the phone vendors is the anti-competitive behavior, I wouldn't have a huge quibble with that.
  - magicalist 6y ago
    It's not nit picking to say you're giving non sequiturs to the comments you were responding to. > Google engages in anti-competitive behavior (ie. using their capital to increase the entry barriers for other app store markets on Android), so that they can then collect rent on their app store (among other things, like search/advertising). There is an argument that could be made that companies taking a 30% cut of app store revenue is rent seeking, but it makes no sense to say that Google is paying Apple per-user search acquisition fees in iOS Safari so that Google can then turn around and collect fees in the iOS App Store (because obviously that's not a thing).
    - whimsicalism 6y ago
      You're absolutely correct, I misread the original comment and doubled-down rather than double-checking, which is my fault. I was thrown off by the reference to the "OS space" in your comment. I still think what I'm saying is true, but agree that it is not quite the same issue.
      - sixstringtheory 6y ago
        It seems like you're both right and we're just looking for the right words... there are anti-competitive as well as rent-seeking behaviors, would the combination of those be racketeering?
jariel 6y ago
This is definitely not a good example of 'rent seeking'. 'Rent seeking' is real-estate. You buy a property, you seek 'rent' for the rights to access it. It's that simple. It's considered different than other economic activity because it's not productive in nature. Edit: 1) From Investoopedia: "Economic rent is the income earned from utilization of resource ownership. Entities that own resources can lend them to earn interest rents, lease them to earn rental income, or they may utilize their resources in other income-producing ways." 2) Here is Carl Marx agreeing with literally Adam Smith "Adam Smith correctly defines rent as “the price paid for the use of land” ([O.U.P., Vol. I, p. 162; Garnier,] t, I, p. 299) - in 'Theories of Surplus Value'. Renting out a plot of land is the easiest, simplest, most obvious example of rent-seeking.
xxpor 6y ago
>Google pays off phone manufacturers to sign onerous contract preventing them from installing other app stores or displaying other options on the home screen or during the setup process GOOD Here's the problem. You want to make it illegal for google to stop phone manufacturers from installing even more crapware than they do already? How would that be a win for anyone besides Samsung/LG/Sony/etc? Encouraging even more fracturing of the Android ecosystem and the lack of updates? Google is protecting consumer welfare. This should be encouraged, not looked at skeptically. This is not the MS in the 90s situation where manufacturers couldn't install Linux instead of Windows. This would be MS saying you can't install BonziBuddy and sell it with our logo and services on it.
- whimsicalism 6y ago
  If it was a win for Samsung/LG/Sony to install crap-ware, then they would be doing it already rather than signing lucrative contracts that help Google maintain its monopoly position.