4 ms·

Traditional notions of market share were companies selling commodities (oil, rail travel) with undifferentiated products. Now everything is extremely different

Traditional notions of market share were companies selling commodities (oil, rail travel) with undifferentiated products. Now everything is extremely differentiated so it's hard to find any products that are clearly competing apples to apples. The markets of these things overlap funnily such I almost wonder if the graph of "quasi-competing" products is fully connected. ----- The institutional power of these firms isn't just in the things they sell. It is also in people's dependence on the non-fungible free services, etc. We do need new laws so issues with the courts in some sense are good to force the issue.

lwhi 5y ago
Surely these companies are advertising platforms selling attention?
- Ericson2314 5y ago
  Absolutely. But isn't like one can trivially redirect part of an Instagram addiction into a YouTube one based on which company one hates less each morning.
  - lwhi 5y ago
    The more I think about it, the more I'm convinced the issue should focus on the effect a monopolistic company has on competition and new entrants. If a company is in the sights of Facebook, and could be acquired .. they should stand to benefit from any legislation put in place.
    - Ericson2314 5y ago
      > they should stand to benefit from any legislation put in place. Keep in mind many startups don't want to do the work of becoming an actual sustainable company, and rather have the higher values of the acquisition market. Also keep in mind that a more fragmented digital ads market without the total surveillance from monopolies might not be very profitable at all. I don't think a disaggregated private sector is capable an entirely filling big tech's vacuum. I also don't think that is a reason not to break up big tech. The fact is software wants to be free, and free software wants to be funded by something other than profits. But I don't think our courts or legislatures are willing to grapple with this truth. And so we will waffle and keep the monopolies intact.
      - lwhi 5y ago
        I think you're setting two very different concepts at odds with each other Many startups aim to become acquired, because there is no alternative. It's the only viable route to success. Continue 'feeding the beast'. This isn't a desirable scenario though .. we all know that there are political, social and economic consequences to allowing monopolistic behaviour to carry on unchecked. The best reason for introducing legislation is to improve life for a huge amount of people. -- > Also keep in mind that a more fragmented digital ads market without the total surveillance from monopolies might not be very profitable at all. Then we should fully do away with those markets. Regulation sets a bar. It stops the worst problems associated with unregulated capitalism from taking root and prospering. -- > I don't think a disaggregated private sector is capable an entirely filling big tech's vacuum. I also don't think that is a reason not to break up big tech. I agree, it's not a reason to _not_ break it up. I also agree it won't be business as usual; nor should it be. There's a pragmatism to open standards and free software that works well with capitalism. We will need to embrace open standards to provide interoperability between products once they're split.
        Ericson2314 5y ago
        > This isn't a desirable scenario though To some founders, maybe? But the fact is fewer acquisitions will mean more outright failures, if also more a few massive successes. Investors might not like that. It will take time also for the number of starts to break through and chip away at monopolization, until that happens, we have a "worst of both worlds" where monopolies still crush you but you also can't sell out. That will definitely not be popular. > Then we should fully do away with those markets. I fully agree, but so many popular things are dependent on advertising, I worry the politicians have no guts here. If people just loose all their free entertainment heads will roll. I think the best way to fund art / entertainment is UBI and crowdfunding, but that's a massive shift that, again, takes a lot of guts. > I also agree it won't be business as usual; nor should it be. :) > There's a pragmatism to open standards and free software that works well with capitalism. Actually I think those have a very awkward relationship with Capitalism. On one hand, sharing ideas is clearly more efficient, on the other hand, they undermine the competition that makes capitalism work. There was a lot more systems innovation in non-micro-computers before Unix, by virtue AT&T limited in how they were allowed to capture the value, predominated. Then Linux also wiped out all the proprietary Unixes to a large extent. The biggest thing attacking the stagnation of OSe might be the the increasingly bespoke cloud platforms. So basically FOSS gets in a "no profit to be found here" rut in a sub-sector, until a bunch of proprietary things the exist mainly but to increase switching costs get us back to "proprietary diversity", and the process repeats. A stupid take mean anti-trust means banning FOSS too, kind of like how the sherman anti-trust act was used against unions. A better take might be we need something other than competition for profits to push FOSS forward.
huitzitziltzin 5y ago
> Traditional notions of market share were companies selling commodities (oil, rail travel) with undifferentiated products This is not correct. Market shares are perfectly well defined and understood in the differentiated products case. Indeed, it is precisely the fact that products are differentiated that makes market definition an important part of nearly every antitrust proceeding: where should the market start and stop? What market is being monopolized? The FTC failed to come up with a good market definition here, among other problems.
- Ericson2314 5y ago
  > This is not correct. Market shares are perfectly well defined and understood in the differentiated products case. Yes, we do know more about https://en.wikipedia.org/wiki/Monopolistic_competition https://en.wikipedia.org/wiki/Monopolistic_competition, but clearly many industries are extremely consolidated. Are you saying existing anti-trust law is good enough and we simply need to start enforcing it? > Indeed, it is precisely the fact that products are differentiated that makes market definition an important part of nearly every antitrust proceeding: where should the market start and stop? What market is being monopolized? Well with my second part, I was trying to get towards the relationship Facebook and Google have with their users, which does not involve money by being exchange by and large, probably couldn't be characterized in a way that would please the court. Indeed, perhaps it would be hard to characterize it as a market in the traditional sense at all. > The FTC failed to come up with a good market definition here, among other problems. Indeed the FTC's move does look bad based on what the court is saying, but I am skeptical that they would be able to do sufficiently better to win something big --- which is breaking up big companies. (Fines will never cut it.) That some of the recently drafted laws are seeming written to hit tech and not other large firms is also disappointing.

lwhi 5y ago

Surely these companies are advertising platforms selling attention?

Ericson2314 5y ago
Absolutely. But isn't like one can trivially redirect part of an Instagram addiction into a YouTube one based on which company one hates less each morning.
- lwhi 5y ago
  The more I think about it, the more I'm convinced the issue should focus on the effect a monopolistic company has on competition and new entrants. If a company is in the sights of Facebook, and could be acquired .. they should stand to benefit from any legislation put in place.
  - Ericson2314 5y ago
    > they should stand to benefit from any legislation put in place. Keep in mind many startups don't want to do the work of becoming an actual sustainable company, and rather have the higher values of the acquisition market. Also keep in mind that a more fragmented digital ads market without the total surveillance from monopolies might not be very profitable at all. I don't think a disaggregated private sector is capable an entirely filling big tech's vacuum. I also don't think that is a reason not to break up big tech. The fact is software wants to be free, and free software wants to be funded by something other than profits. But I don't think our courts or legislatures are willing to grapple with this truth. And so we will waffle and keep the monopolies intact.
    - lwhi 5y ago
      I think you're setting two very different concepts at odds with each other Many startups aim to become acquired, because there is no alternative. It's the only viable route to success. Continue 'feeding the beast'. This isn't a desirable scenario though .. we all know that there are political, social and economic consequences to allowing monopolistic behaviour to carry on unchecked. The best reason for introducing legislation is to improve life for a huge amount of people. -- > Also keep in mind that a more fragmented digital ads market without the total surveillance from monopolies might not be very profitable at all. Then we should fully do away with those markets. Regulation sets a bar. It stops the worst problems associated with unregulated capitalism from taking root and prospering. -- > I don't think a disaggregated private sector is capable an entirely filling big tech's vacuum. I also don't think that is a reason not to break up big tech. I agree, it's not a reason to _not_ break it up. I also agree it won't be business as usual; nor should it be. There's a pragmatism to open standards and free software that works well with capitalism. We will need to embrace open standards to provide interoperability between products once they're split.
      - Ericson2314 5y ago
        > This isn't a desirable scenario though To some founders, maybe? But the fact is fewer acquisitions will mean more outright failures, if also more a few massive successes. Investors might not like that. It will take time also for the number of starts to break through and chip away at monopolization, until that happens, we have a "worst of both worlds" where monopolies still crush you but you also can't sell out. That will definitely not be popular. > Then we should fully do away with those markets. I fully agree, but so many popular things are dependent on advertising, I worry the politicians have no guts here. If people just loose all their free entertainment heads will roll. I think the best way to fund art / entertainment is UBI and crowdfunding, but that's a massive shift that, again, takes a lot of guts. > I also agree it won't be business as usual; nor should it be. :) > There's a pragmatism to open standards and free software that works well with capitalism. Actually I think those have a very awkward relationship with Capitalism. On one hand, sharing ideas is clearly more efficient, on the other hand, they undermine the competition that makes capitalism work. There was a lot more systems innovation in non-micro-computers before Unix, by virtue AT&T limited in how they were allowed to capture the value, predominated. Then Linux also wiped out all the proprietary Unixes to a large extent. The biggest thing attacking the stagnation of OSe might be the the increasingly bespoke cloud platforms. So basically FOSS gets in a "no profit to be found here" rut in a sub-sector, until a bunch of proprietary things the exist mainly but to increase switching costs get us back to "proprietary diversity", and the process repeats. A stupid take mean anti-trust means banning FOSS too, kind of like how the sherman anti-trust act was used against unions. A better take might be we need something other than competition for profits to push FOSS forward.

huitzitziltzin 5y ago

> Traditional notions of market share were companies selling commodities (oil, rail travel) with undifferentiated products This is not correct. Market shares are perfectly well defined and understood in the differentiated products case. Indeed, it is precisely the fact that products are differentiated that makes market definition an important part of nearly every antitrust proceeding: where should the market start and stop? What market is being monopolized? The FTC failed to come up with a good market definition here, among other problems.

Ericson2314 5y ago
> This is not correct. Market shares are perfectly well defined and understood in the differentiated products case. Yes, we do know more about https://en.wikipedia.org/wiki/Monopolistic_competition https://en.wikipedia.org/wiki/Monopolistic_competition, but clearly many industries are extremely consolidated. Are you saying existing anti-trust law is good enough and we simply need to start enforcing it? > Indeed, it is precisely the fact that products are differentiated that makes market definition an important part of nearly every antitrust proceeding: where should the market start and stop? What market is being monopolized? Well with my second part, I was trying to get towards the relationship Facebook and Google have with their users, which does not involve money by being exchange by and large, probably couldn't be characterized in a way that would please the court. Indeed, perhaps it would be hard to characterize it as a market in the traditional sense at all. > The FTC failed to come up with a good market definition here, among other problems. Indeed the FTC's move does look bad based on what the court is saying, but I am skeptical that they would be able to do sufficiently better to win something big --- which is breaking up big companies. (Fines will never cut it.) That some of the recently drafted laws are seeming written to hit tech and not other large firms is also disappointing.