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Trust busting can seem like it’s anti free market, but when a company has a monopoly on a network it stops functioning as a company and basically becomes a gove

Trust busting can seem like it’s anti free market, but when a company has a monopoly on a network it stops functioning as a company and basically becomes a government. The problem with Facebook/Amazon/Google is that they have a monopoly on a specific information network, for Facebook the social graph, internet discoverability for Google, and online shopping for Amazon. It’s similar to if a single company owned the road systems or the internet, since the structure of these networks means that competitors can’t exist, there can only be one network for it to have value, so the first company to build it will have a monopoly and be able to indefinitely milk it for a profit. The same thing happened with railroad barons in the 1800s and also in other areas of the economy, and the trust busting response the government took seems to have worked well to bring back a fair market. Government should keep the information networks predictable and accessible. This is a core theme in George Gilder’s controversial but imho extremely insightful book Knowledge and Power: The Information Theory of Capitalism and How it is Revolutionizing our World: https://www.amazon.com/Knowledge-Power-Information-Capitalism-Revolutionizing/dp/1621570274 https://www.amazon.com/Knowledge-Power-Information-Capitalis...

ethbr0 5y ago
An associated component to trust-busting should be foreign trust blocking. Given the way the world works, if the US breaks Facebook up, (insert here) government-supported competitor takes its place. Part of creating a fair, diverse playing field is ensuring international competition is playing by the same rules in the internal market (because you have no jurisdiction to prosecute them as a monopoly in their home country). Which isn't an argument for not breaking Facebook up. But is an argument that if you break Facebook up, you should probably impose substantial limitations on ByteDance and Tencent as they operate in the US.
- hellbannedguy 5y ago
  "Given the way the world works, if the US breaks Facebook up, (insert here) government-supported competitor takes its place." I don't think that will happen. Americans selfworth, on a deep psychological level, is tied to making large amounts of money. (And yes, I find it sad) We will have many new Zuck types coding away in the new gold rush if FB is crippled. I sometimes think the only reason FB is as financially successful is because Zuck knew no one would love him without money. America is loaded with white fugly irritating intelligent investors that would love to make more money. Tech will stay here.
dontblink 5y ago
I'd put in Microsoft in there. Their Windows (desktop OS) dominance needs to be reigned in and potentially spun off.
adfrhgeaq5hy 5y ago
Well, duh. "Free market" does not mean "unregulated market". It requires that the market be free from monopolies and that all agents have complete information. Regulation and trust-busting are, in practice, required to bring about a free market. Co-opting the term "free market" was a fantastically successful bit of propaganda.
- maxwell 5y ago
  Exactly, Adam Smith was no laissez-faire ideologue. https://gutenberg.edu/2013/03/adam-smith-was-no-laissez-faire-ideologue/ https://gutenberg.edu/2013/03/adam-smith-was-no-laissez-fair...
- hk1337 5y ago
  It could be that idea of a free market if everyone did what was right and not cheat, screw over, sabotage the competition to get ahead. You beat the competition by being better. We don't have that though, people are assholes, so we have a regulated market.
  - adfrhgeaq5hy 5y ago
    The problem is the system. Let us assume we have 99.9% moral people who never lie and never break the law even if they can gef away with it. Problem is the 0.1% have a competitive advantage. They will accumulate more wealth and power than the others. The others can either compromise on their morality or lose ground against their competition, maybe failing entirely. The amoral people will gain outsized power and will force others to sacrifice their values. The whole system can be corrupted by a tiny minority. I certainly do blame some individuals who are particularly vile, like Zuckerberg and Musk, but for the most part this is just what happens in competition.
    - hk1337 5y ago
      > The problem is the system. The problem is the people. Everything else after that I agree with. For a completely free market to work 100% of the people would have to be moral, upstanding people. A completely free, unregulated, market is an anarchocapitalist's utopia. Like how a working socialist government is a utopia. Neither of those is realistic though, so we have a regulated free market.
BitwiseFool 5y ago
The problem I have with "The Free Market" is that it is a platonic ideal. Going a step further, the whole concept of a Free Market was developed before the advent of the Network Effect and the kind of economy we have today. As such, I think defenders of the Free Market do not have adequate tools to address the kind of "monopoly" that Facebook/Apple/Google enjoy today because of their business models. Free Market competition works great on a small to medium scale. The idea that you have some competitive advantage and can capitalize on that works wonderfully, but not for things like social media and companies with a market cap of over a trillion dollars.
- throw63738 5y ago
  18th century England had strict anti monopoly laws. For example canal owners could not operate their own boats. This type of centralization and monopoly acceptance came with railroads.
sli 5y ago
> and online shopping for Amazon Not just shopping, but also AWS. It is functionally impossible to use the internet and not patron Amazon because of the ubiquity of AWS. It's not a monopoly because there are technically competitors, but the sheer scope of AWS reach makes consumer choice a practical impossibility. I do nearly all of my internet shopping away from Amazon, only resorting to it when there's no other choice. But nearly every website I visit is powered by AWS at some level, either directly (the site itself) or indirectly (one of the site's service providers). To my mind, this is something new(ish) that is monopoly-adjacent and needs to be taken a bit more seriously. Telling people not to use the internet, or to deeply audit every service they patron, is not a practical solution at all, even for technical users, nevermind the average non-technical user.
- ragnarok451 5y ago
  I was surprised by this too, but AWS only has 32% of cloud market share https://www.parkmycloud.com/blog/aws-vs-azure-vs-google-cloud-market-share/ https://www.parkmycloud.com/blog/aws-vs-azure-vs-google-clou....
  - spaced-out 5y ago
    Back in 2018 it was nearly half, people don't realize how much market share they've lost in the last few years
    - niuzeta 5y ago
      Wow, what happened? Loss of 10+ percentage of market share is pretty huge. Or did the market simply expand that quickly?
      - mmcdermott 5y ago
        I've definitely run into companies in Amazon-adjacent fields of endeavor employing a "no AWS" rule.
- huitzitziltzin 5y ago
Robotbeat 5y ago
What I want addressed is how we can bust these companies without making the experience worse for consumers or making things less efficient. A railroad that'd require a toll every mile because you split one company into hundreds wouldn't be viable. If I had to visit multiple web pages to get the same result as a google search, that'd also be bad. Amazon online shopping has a "monopoly" almost purely because the monopoliness makes it much easier and lower friction than trying to find an online store that is 1) somewhat trustworthy 2) consistent UI 3) ships in a reasonable time 4) isn't going to disappear (and importantly, already has my shipping and payment information). I regularly buy stuff online from elsewhere, but I use Amazon more often because it reduces the cognitive load by centralizing/standardizing everything.
- hippich 5y ago
  I have come to a conclusion lately that there is no free lunch. You either optimize and increase risks (of system becoming monopoly like rail roads in the past, or busting like mortgage companies in 2007-8, government becoming tyranny, something like that) or you pay for inefficiencies. I think the free market is really about finding a balance between optimizations and risks. If the company is too optimized and carries significant risk - eventually, it will bust. If the marker is not efficient because of transactions volume - a larger company will inevitably emerge (and if it continues to grow - eventually bust) EDIT: what really worries people about monopolies is that it takes more than a generation to see these companies bust. And to, again, optimize it, we come up with antitrust laws... But any optimization, in my opinion, costs risks and never is free (as in lunch).
- toast0 5y ago
  The railroad example would be solved by forming a single-purpose clearing house business to distribute the tolls, collected by the origin or destination carrier, among all the rail providers on the route. It's the same process in banking --- you can deposit a check drawn on any bank, and a clearing house process routes the funds. It's the same in public stock trading, you can use any brokerage, but almost all shares are owned by Cede & Co on the corporate books. You can split out payment and address retention easily: paypal and amazon both offer 3rd party checkout systems. If we're trustbusting Amazon, force that to be an independent company, offered on FRAND terms to all. I think you could probably seperate into three business the fulfilment included marketplace consignment store from the merchant fulfilled marketplace consignment store from the sold by amazon store. Although, since two of those share facilities, it might be a little tough. Perhaps, splitting off the store from the inventory makes more sense --- if Amazon is just one of the marketplace vendors and the marketplace is a separate entity, that eliminates some of the unfair practices (require marketplace vendors to share sources, contract sources directly to undercut marketplace vendors). You could also split off warehouses off into individual or regional baby-bell style corporations; vendors could send to whichever warehouses they like, the marketplace could choose which warehouse to use to fulfill orders, each warehouse could be reasonably independent. Shipping/delivery could clearly be made independent. AWS, too. I think the point of trustbusting is not necessarily to eliminate monopoly or dominant businesses, it's to reduce the scope of the monopoly such that dominance in one area doesn't become dominance in more areas. If there's a single purpose marketplace corporation, it may be dominant, but if it's prevented from controlling warehousing, shipping, and inventory, there's more room in those areas. After the breakup, you can still come back and do more to address the smaller areas, if they prove to be problematic under the new system.
jeremydeanlakey 5y ago
"when a company has a monopoly on a network it... basically becomes a government." A monopoly functions like a government. Or inverted: a government functions like a monopoly. I find both angles interesting.
- dantheman 5y ago
  A government is a monopoly on violence, and it uses that monopoly to demand payment.
- mrkstu 5y ago
  Generally a government is the entity with a monopoly on force. That is why things like drug cartels or the mafia are so poisonous to the body politic.
- ItsMonkk 5y ago
  I'm found of "a democratically elected government is the least bad monopoly". If you must have a monopoly, it should be a government. But if you can avoid a monopoly, do that instead.
  - AnthonyMouse 5y ago
    An important corollary to this is that monopolies should be isolated rather than integrated. Suppose we say the municipal water system is a natural monopoly, so we're going to have the government do it. Well, then the head of the municipal water system should be an elected position, so that if they're screwing it up, people can vote the bums out without having to remove a mayor or governor who might otherwise be doing a good job on some other issues and therefore be hard to remove. That's the biggest problem with federal elections. Each party does a different set of terrible things and you can't vote against one set of failures without voting for the other one when everything is integrated.
- chiefalchemist 5y ago
  That's the crux of the friction here. The old monopoly (gov) is being overrun by the new "monopoly" (tech). While it might not be a battle for the known universe, controlling the spice (i.e., attention, information, nudges, etc.) is definitely in play.
sanderjd 5y ago
I know this is the inevitable and cliche pushback, but it never seems to be grappled with so it remains worth pointing out: none of the three things you mentioned are anywhere close to monopolies. There are lots of social networks (Twitter and TikTok are extremely successful, among others), lots of ways to search the internet, and lots of ways to shop online. The analogy with the railroads simply is not apt, their monopoly was so powerful because there was often no other way to get from point A to point B, so they had complete leverage. This is not the case for any of these companies you listed, there is a lot of competition in all these markets. But I also think there are major issues with the current configuration of the tech industry! They just aren't because of monopolies. It is not helpful to misdiagnose a real problem. It is not helpful to have only a hammer and call every problem a nail.
- hardtke 5y ago
  The monopoly is not on the consumer side, it is on the advertising side. Google and Facebook are the only companies that have access to data on basically every sale on the internet (almost every site that uses their ad tools reports back their sales). This data gives them a defensible duopoly on digital advertising.
  - spaced-out 5y ago
    > Google and Facebook are the only companies that have access to data on basically every sale on the internet Amazon? eBay? WeChat?
    - hardtke 5y ago
      Sites report their data back to Google analytics and Facebook by implementing their pixels. People don't do this for Amazon, ebay, wechat.
      - sanderjd 5y ago
        Amazon actually does have a quickly growing ads business FWIW.
thou42o34324 5y ago
I'm surprised you don't mention FAANG's egregious censorship. It's like we're living in some global Orwellian dystopia or some Communist dictatorship.
snarf21 5y ago
We really need a funded and functioning SEC and FTC. They have failed us in the 21st century. However, breaking things up won't be a panacea. It worked in the past but even spinning out Instagram won't open up much space for an Instagram competitor given the existing network effects. To fix some of these issues, I think we need a tax on digital advertising revenue. Right now it is way too profitable to just create click-bait and rake in the money.
- Nasrudith 5y ago
  The idea of taxing digital advertising revenue because it is too profitable as an antidote makes no sense on at least three different levels. 1. It being profitable is good for getting more people to get into the market. Taxing it by activity if anything discourages competition! 2. What does degree of profitability have to do with clickbait? Spamming isn't very profitable but it does generate some revenue so we are stuck with the crap. 3. The advertiser network's profit is entirely seperate from how much the individual end-point earns by showing them.
rndmind 5y ago
To piggy back on your comment... Free markets only exist because of regulation. It's regulation that allows actors to participate in good faith, and not get smoked by the huge whales and owners of exchanges, etc.
jimmaswell 5y ago
A social network is a natural monopoly due to the network effect. It wouldn't make any sense to split it up. Regulating it like any other natural monopoly could make sense. Amazon is certainly not an online shopping monopoly. It's just a superior service. I can get a similar online shopping experience from Wal Mart and many others. If Amazon can offer us such good service through having its own big network of warehouses, drivers, etc. that's impossible with a bunch of smaller companies then I say let them be as big as they are so long as they don't egregiously abuse it.
- annadane 5y ago
  > A social network is a natural monopoly due to the network effect. It wouldn't make any sense to split it up. Regulating it like any other natural monopoly could make sense. They definitely need to take Whatsapp away from Facebook, though. Regulators only allowed it under specific conditions and Facebook violated those conditions
- nathias 5y ago
  >A social network is a natural monopoly due to the network effect. Thats exactly why it should be split up and regulated more heavily.
- mhink 5y ago
  > A social network is a natural monopoly due to the network effect. It wouldn't make any sense to split it up. This isn’t entirely accurate. Federated social networking is entirely feasible, and arguably the only reason it isn’t more widespread is because large non-federated social networks have an active interest in not federating. Breaking up Facebook would make it possible for social-network “hub operators” to compete on the basis of moderation quality, administrative practices, and site quality.
deltree7 5y ago
Facebook, Amazon, Google were not the first, they were the best. But hey, since we are in pitch-fork mode, we can simply make up stuff to our fellow-brainwashed posters. How is this different from Q?
SkeuomorphicBee 5y ago
> when a company has a monopoly on a network it stops functioning as a company and basically becomes a government. That is very aptly put. To go on a bit of a tangent, I would go even further and say that companies are always a form of government, even without a monopoly, but the addition of a monopoly just extends the power and reach of such individual government. In the modern capitalist systems, the collective of all companies together are the branch of govern that decide what will be produced and where-and-how people are going to work, all that under the checks and balances of the free-market and the official branches government. That is, an individual company is a form of tiny local government (not local in geography, but in scope) with the mandate to govern some aspects of the life of their employees (what they will be doing for 40h a weak), and the production of their particular products, being that mandate can be removed and transferred to other company by the free market. Now, I know that this metaphor I described is not a 100% perfect fit, if stretched to the extremes it will arrive at absurd corners where companies are nothing like governments. But then, no metaphor is perfect, not even the metaphor officially supported by the USA Judiciary branch, that "companies are people". They are only useful, and only fit in small contexts, and as such I believe "companies are government" is a very useful one and should be part of the discourse.
AnthonyMouse 5y ago
> The problem with Facebook/Amazon/Google is that they have a monopoly on a specific information network, for Facebook the social graph, internet discoverability for Google, and online shopping for Amazon. None of these things are a natural monopoly. Facebook only stays relevant by buying its competitors. You don't even need to break them up, just disable acquisitions. Then Instagram would be separate, WhatsApp would be separate. You don't even have to break them apart, just wait for the next one and don't let them buy it. Google is the biggest search engine but search isn't a natural monopoly. Their dominant position comes from all the vertical integration. Google owns YouTube and YouTube is featured prominently in Google Search results. To get Android/Google Play, OEMs have to use Google as their default search engine. To fix this you don't have to regulate the search results, just separate the search engine from the other companies, and stop allowing them to buy competing ad networks. Amazon doesn't really even have a dominant market position. They're not a railroad, they're Internet Walmart. They're just the biggest player in a highly competitive market. They have no capacity to significantly raise prices or people would immediately switch to any of their hundreds of competitors. Most of the complaints are from competitors butthurt that Amazon is keeping everyone's margins slim -- but that's what they're supposed to be doing. A railroad is a natural monopoly. You can't really break up a natural monopoly, so you have to regulate it, which is terrible. None of this tech stuff is like that. The problems here come from consolidation through mergers and vertical integration. They're unnatural monopolies with clear lines across which they can be broken up without long-term regulation. Just stop letting them buy their competitors.
- Apes 5y ago
  Amazon does leverage their position as market maker to undercut competition with anti-competitive practices though. They run data analytics to figure out what goods are the most profitable, then launch competing products and promote their own over the originals in their listings. Their monopoly gives them the ability to take over nearly any market they want at any time, with no consequences.
  - AnthonyMouse 5y ago
    > They run data analytics to figure out what goods are the most profitable, then launch competing products and promote their own over the originals in their listings. Figuring out which products have high margins and entering those markets is an increase in competition. Promoting their own listings is only a problem if the competitors can't reach those customers in any other reasonable way, which isn't the case because there are many other online retailers and it's quite feasible for a medium sized competitor to sell directly to the customer on their own website.
laurent92 5y ago
Of course. Trust-busting has always been part of liberalism. The idea of liberalism has always been to avoid monopolies, which government is just one form of. The government’s role should be reduced to the minimum, police-army-justice-currency, and even the last one is up for a debate. So the government’s role is to stay small, and make companies stay small enough. Unfortunately this flew away in 2001 wehn Microsoft had been condemned, but not sentenced, because after 9/11, USA needed their companies to reign upon the rest of the world. Maybe time has come to admit that US reigning on the rest of the world hurt the domestic market with too-large-monopolies, and maybe it is time to come back to a competition market.
dont__panic 5y ago
Devil's advocate question: I don't really remember my railroad history in the US, but I do know that railroads are so mediocre as to be barely usable these days. Does that have anything to do with weakening the railroad industry at a critical moment just before the automobile industry popped up and ate their lunch? Could we be risking a similar problem here with the successors to Facebook's social media, Google's internet search algos, and Amazon's shopping experience?
asiachick 5y ago
That road analogy fails pretty quickly. If we wanted to follow that direction then it would like owning a home where there are 20 roads directly in front of your house and you can choose any one of them but you keep choosing Apple/Amazon/Facebook/Google For example I just moved and had to buy lots of stuff. I ordered from Macy's, Walmart, Target, Wayfair, and Amazon. It's trivial to use Bing or Ducduckgo over Google. When a search engine starts doing better for me I'll switch. As for Facebook, plenty of people using other services to stay connected
jonnycomputer 5y ago
Discounting Amazon's grip on the cloud computing sector is a mistake.
1vuio0pswjnm7 5y ago
The only way these companies can generate sufficient revenues is through advertising. It really does not matter what moonshot projects they are working on. There is not enough willingness to pay for that "work" to sustain a business. The internet has value besides being a vector for advertising. This is more or less what the parent comment is suggesting. Who pays the cost of supporting the internet. Internet subscribers. We finance (a) the delivery of advertising, (b) creation metadata about our usage (e.g., empty POST requests, beacons, various forms of telemtry, etc.) and (c) uploading our data to their computers.
bumby 5y ago
One of the issues that I have with your analogy is that the monopolies you mentioned (roads, internet, rail) all have substantial physical assets that are tied to their monopoly power. For example, even without factoring in the cost of land, it can cost up to $700k per mile of rail track. These kinds of upfront costs are one of the major moats they have to keeping outside competitors from emerging. I'm not sure the digital-era monopolies discussed have this same type of barrier to entry. The internet example is a more interesting analogy to me because it seems to align more with a utility, which we're okay with having monopolies existing, albeit regulated, because of the greater efficiencies. So are social networks, online shopping, or search public goods? If so, should they be regulated because we think there is an advantage to having a monopoly in this space? If not, what are their barriers of entry that stifle competition? I don't necessarily don't think they shouldn't be broken up, but I'm trying to understand whether/how they fit into previous paradigms or if the monopoly paradigm is fundamentally different in this digital era.
taurath 5y ago
Building another Facebook isn’t hard, but the network effect makes it almost impossible. Then they have their acquisition team to ensure that anything that does make it through doesn’t last long. The idea that they’re out there competing on their own merits is silly. I think that’s one of the big differences - they have a monopoly on the means of production (the userbase), which is less ephemeral than say owning all the steel plants and mines.
armchairhacker 5y ago
Another problem is that Facebook, Amazon, and Google get special treatment. There are explicit filters in WebKit (and probably mozilla) which allow special features for certain big-name companies. Also the App Store gives exemptions (e.g. VoIP notifications) to certain social apps. And most websites block crawlers but allow Google and Internet Archive. This IMO is a better argument towards anti-competitiveness. I absolutely get that there needs to be filters for certain privileges, but hard-coding them for big-name apps is not the answer.
after_care 5y ago
It’s not accurate to say Google has a monopoly on the “internet discoverability” information network. Bing and yahoo contain near equal information networks and Google isn’t dominate in many important Asian regions.
ZeroGravitas 5y ago
This book sounded interesting to me, but it appears the author is controversial because he doesn't believe in evolution amongst other things which dampens my enthusiasm: https://en.m.wikiquote.org/wiki/George_Gilder https://en.m.wikiquote.org/wiki/George_Gilder

ethbr0 5y ago

An associated component to trust-busting should be foreign trust blocking. Given the way the world works, if the US breaks Facebook up, (insert here) government-supported competitor takes its place. Part of creating a fair, diverse playing field is ensuring international competition is playing by the same rules in the internal market (because you have no jurisdiction to prosecute them as a monopoly in their home country). Which isn't an argument for not breaking Facebook up. But is an argument that if you break Facebook up, you should probably impose substantial limitations on ByteDance and Tencent as they operate in the US.

hellbannedguy 5y ago
"Given the way the world works, if the US breaks Facebook up, (insert here) government-supported competitor takes its place." I don't think that will happen. Americans selfworth, on a deep psychological level, is tied to making large amounts of money. (And yes, I find it sad) We will have many new Zuck types coding away in the new gold rush if FB is crippled. I sometimes think the only reason FB is as financially successful is because Zuck knew no one would love him without money. America is loaded with white fugly irritating intelligent investors that would love to make more money. Tech will stay here.

dontblink 5y ago

I'd put in Microsoft in there. Their Windows (desktop OS) dominance needs to be reigned in and potentially spun off.

adfrhgeaq5hy 5y ago

Well, duh. "Free market" does not mean "unregulated market". It requires that the market be free from monopolies and that all agents have complete information. Regulation and trust-busting are, in practice, required to bring about a free market. Co-opting the term "free market" was a fantastically successful bit of propaganda.

maxwell 5y ago
Exactly, Adam Smith was no laissez-faire ideologue. https://gutenberg.edu/2013/03/adam-smith-was-no-laissez-faire-ideologue/ https://gutenberg.edu/2013/03/adam-smith-was-no-laissez-fair...
hk1337 5y ago
It could be that idea of a free market if everyone did what was right and not cheat, screw over, sabotage the competition to get ahead. You beat the competition by being better. We don't have that though, people are assholes, so we have a regulated market.
- adfrhgeaq5hy 5y ago
  The problem is the system. Let us assume we have 99.9% moral people who never lie and never break the law even if they can gef away with it. Problem is the 0.1% have a competitive advantage. They will accumulate more wealth and power than the others. The others can either compromise on their morality or lose ground against their competition, maybe failing entirely. The amoral people will gain outsized power and will force others to sacrifice their values. The whole system can be corrupted by a tiny minority. I certainly do blame some individuals who are particularly vile, like Zuckerberg and Musk, but for the most part this is just what happens in competition.
  - hk1337 5y ago
    > The problem is the system. The problem is the people. Everything else after that I agree with. For a completely free market to work 100% of the people would have to be moral, upstanding people. A completely free, unregulated, market is an anarchocapitalist's utopia. Like how a working socialist government is a utopia. Neither of those is realistic though, so we have a regulated free market.

BitwiseFool 5y ago

The problem I have with "The Free Market" is that it is a platonic ideal. Going a step further, the whole concept of a Free Market was developed before the advent of the Network Effect and the kind of economy we have today. As such, I think defenders of the Free Market do not have adequate tools to address the kind of "monopoly" that Facebook/Apple/Google enjoy today because of their business models. Free Market competition works great on a small to medium scale. The idea that you have some competitive advantage and can capitalize on that works wonderfully, but not for things like social media and companies with a market cap of over a trillion dollars.

throw63738 5y ago
18th century England had strict anti monopoly laws. For example canal owners could not operate their own boats. This type of centralization and monopoly acceptance came with railroads.

sli 5y ago

> and online shopping for Amazon Not just shopping, but also AWS. It is functionally impossible to use the internet and not patron Amazon because of the ubiquity of AWS. It's not a monopoly because there are technically competitors, but the sheer scope of AWS reach makes consumer choice a practical impossibility. I do nearly all of my internet shopping away from Amazon, only resorting to it when there's no other choice. But nearly every website I visit is powered by AWS at some level, either directly (the site itself) or indirectly (one of the site's service providers). To my mind, this is something new(ish) that is monopoly-adjacent and needs to be taken a bit more seriously. Telling people not to use the internet, or to deeply audit every service they patron, is not a practical solution at all, even for technical users, nevermind the average non-technical user.

ragnarok451 5y ago
I was surprised by this too, but AWS only has 32% of cloud market share https://www.parkmycloud.com/blog/aws-vs-azure-vs-google-cloud-market-share/ https://www.parkmycloud.com/blog/aws-vs-azure-vs-google-clou....
- spaced-out 5y ago
  Back in 2018 it was nearly half, people don't realize how much market share they've lost in the last few years
  - niuzeta 5y ago
    Wow, what happened? Loss of 10+ percentage of market share is pretty huge. Or did the market simply expand that quickly?
    - mmcdermott 5y ago
      I've definitely run into companies in Amazon-adjacent fields of endeavor employing a "no AWS" rule.
huitzitziltzin 5y ago

Robotbeat 5y ago

What I want addressed is how we can bust these companies without making the experience worse for consumers or making things less efficient. A railroad that'd require a toll every mile because you split one company into hundreds wouldn't be viable. If I had to visit multiple web pages to get the same result as a google search, that'd also be bad. Amazon online shopping has a "monopoly" almost purely because the monopoliness makes it much easier and lower friction than trying to find an online store that is 1) somewhat trustworthy 2) consistent UI 3) ships in a reasonable time 4) isn't going to disappear (and importantly, already has my shipping and payment information). I regularly buy stuff online from elsewhere, but I use Amazon more often because it reduces the cognitive load by centralizing/standardizing everything.

hippich 5y ago
I have come to a conclusion lately that there is no free lunch. You either optimize and increase risks (of system becoming monopoly like rail roads in the past, or busting like mortgage companies in 2007-8, government becoming tyranny, something like that) or you pay for inefficiencies. I think the free market is really about finding a balance between optimizations and risks. If the company is too optimized and carries significant risk - eventually, it will bust. If the marker is not efficient because of transactions volume - a larger company will inevitably emerge (and if it continues to grow - eventually bust) EDIT: what really worries people about monopolies is that it takes more than a generation to see these companies bust. And to, again, optimize it, we come up with antitrust laws... But any optimization, in my opinion, costs risks and never is free (as in lunch).
toast0 5y ago
The railroad example would be solved by forming a single-purpose clearing house business to distribute the tolls, collected by the origin or destination carrier, among all the rail providers on the route. It's the same process in banking --- you can deposit a check drawn on any bank, and a clearing house process routes the funds. It's the same in public stock trading, you can use any brokerage, but almost all shares are owned by Cede & Co on the corporate books. You can split out payment and address retention easily: paypal and amazon both offer 3rd party checkout systems. If we're trustbusting Amazon, force that to be an independent company, offered on FRAND terms to all. I think you could probably seperate into three business the fulfilment included marketplace consignment store from the merchant fulfilled marketplace consignment store from the sold by amazon store. Although, since two of those share facilities, it might be a little tough. Perhaps, splitting off the store from the inventory makes more sense --- if Amazon is just one of the marketplace vendors and the marketplace is a separate entity, that eliminates some of the unfair practices (require marketplace vendors to share sources, contract sources directly to undercut marketplace vendors). You could also split off warehouses off into individual or regional baby-bell style corporations; vendors could send to whichever warehouses they like, the marketplace could choose which warehouse to use to fulfill orders, each warehouse could be reasonably independent. Shipping/delivery could clearly be made independent. AWS, too. I think the point of trustbusting is not necessarily to eliminate monopoly or dominant businesses, it's to reduce the scope of the monopoly such that dominance in one area doesn't become dominance in more areas. If there's a single purpose marketplace corporation, it may be dominant, but if it's prevented from controlling warehousing, shipping, and inventory, there's more room in those areas. After the breakup, you can still come back and do more to address the smaller areas, if they prove to be problematic under the new system.

jeremydeanlakey 5y ago

"when a company has a monopoly on a network it... basically becomes a government." A monopoly functions like a government. Or inverted: a government functions like a monopoly. I find both angles interesting.

dantheman 5y ago
A government is a monopoly on violence, and it uses that monopoly to demand payment.
mrkstu 5y ago
Generally a government is the entity with a monopoly on force. That is why things like drug cartels or the mafia are so poisonous to the body politic.
ItsMonkk 5y ago
I'm found of "a democratically elected government is the least bad monopoly". If you must have a monopoly, it should be a government. But if you can avoid a monopoly, do that instead.
- AnthonyMouse 5y ago
  An important corollary to this is that monopolies should be isolated rather than integrated. Suppose we say the municipal water system is a natural monopoly, so we're going to have the government do it. Well, then the head of the municipal water system should be an elected position, so that if they're screwing it up, people can vote the bums out without having to remove a mayor or governor who might otherwise be doing a good job on some other issues and therefore be hard to remove. That's the biggest problem with federal elections. Each party does a different set of terrible things and you can't vote against one set of failures without voting for the other one when everything is integrated.
chiefalchemist 5y ago
That's the crux of the friction here. The old monopoly (gov) is being overrun by the new "monopoly" (tech). While it might not be a battle for the known universe, controlling the spice (i.e., attention, information, nudges, etc.) is definitely in play.

sanderjd 5y ago

I know this is the inevitable and cliche pushback, but it never seems to be grappled with so it remains worth pointing out: none of the three things you mentioned are anywhere close to monopolies. There are lots of social networks (Twitter and TikTok are extremely successful, among others), lots of ways to search the internet, and lots of ways to shop online. The analogy with the railroads simply is not apt, their monopoly was so powerful because there was often no other way to get from point A to point B, so they had complete leverage. This is not the case for any of these companies you listed, there is a lot of competition in all these markets. But I also think there are major issues with the current configuration of the tech industry! They just aren't because of monopolies. It is not helpful to misdiagnose a real problem. It is not helpful to have only a hammer and call every problem a nail.

hardtke 5y ago
The monopoly is not on the consumer side, it is on the advertising side. Google and Facebook are the only companies that have access to data on basically every sale on the internet (almost every site that uses their ad tools reports back their sales). This data gives them a defensible duopoly on digital advertising.
- spaced-out 5y ago
  > Google and Facebook are the only companies that have access to data on basically every sale on the internet Amazon? eBay? WeChat?
  - hardtke 5y ago
    Sites report their data back to Google analytics and Facebook by implementing their pixels. People don't do this for Amazon, ebay, wechat.
    - sanderjd 5y ago
      Amazon actually does have a quickly growing ads business FWIW.

thou42o34324 5y ago

I'm surprised you don't mention FAANG's egregious censorship. It's like we're living in some global Orwellian dystopia or some Communist dictatorship.

snarf21 5y ago

We really need a funded and functioning SEC and FTC. They have failed us in the 21st century. However, breaking things up won't be a panacea. It worked in the past but even spinning out Instagram won't open up much space for an Instagram competitor given the existing network effects. To fix some of these issues, I think we need a tax on digital advertising revenue. Right now it is way too profitable to just create click-bait and rake in the money.

Nasrudith 5y ago
The idea of taxing digital advertising revenue because it is too profitable as an antidote makes no sense on at least three different levels. 1. It being profitable is good for getting more people to get into the market. Taxing it by activity if anything discourages competition! 2. What does degree of profitability have to do with clickbait? Spamming isn't very profitable but it does generate some revenue so we are stuck with the crap. 3. The advertiser network's profit is entirely seperate from how much the individual end-point earns by showing them.

rndmind 5y ago

To piggy back on your comment... Free markets only exist because of regulation. It's regulation that allows actors to participate in good faith, and not get smoked by the huge whales and owners of exchanges, etc.

jimmaswell 5y ago

A social network is a natural monopoly due to the network effect. It wouldn't make any sense to split it up. Regulating it like any other natural monopoly could make sense. Amazon is certainly not an online shopping monopoly. It's just a superior service. I can get a similar online shopping experience from Wal Mart and many others. If Amazon can offer us such good service through having its own big network of warehouses, drivers, etc. that's impossible with a bunch of smaller companies then I say let them be as big as they are so long as they don't egregiously abuse it.

annadane 5y ago
> A social network is a natural monopoly due to the network effect. It wouldn't make any sense to split it up. Regulating it like any other natural monopoly could make sense. They definitely need to take Whatsapp away from Facebook, though. Regulators only allowed it under specific conditions and Facebook violated those conditions
nathias 5y ago
>A social network is a natural monopoly due to the network effect. Thats exactly why it should be split up and regulated more heavily.
mhink 5y ago
> A social network is a natural monopoly due to the network effect. It wouldn't make any sense to split it up. This isn’t entirely accurate. Federated social networking is entirely feasible, and arguably the only reason it isn’t more widespread is because large non-federated social networks have an active interest in not federating. Breaking up Facebook would make it possible for social-network “hub operators” to compete on the basis of moderation quality, administrative practices, and site quality.

deltree7 5y ago

Facebook, Amazon, Google were not the first, they were the best. But hey, since we are in pitch-fork mode, we can simply make up stuff to our fellow-brainwashed posters. How is this different from Q?

SkeuomorphicBee 5y ago

> when a company has a monopoly on a network it stops functioning as a company and basically becomes a government. That is very aptly put. To go on a bit of a tangent, I would go even further and say that companies are always a form of government, even without a monopoly, but the addition of a monopoly just extends the power and reach of such individual government. In the modern capitalist systems, the collective of all companies together are the branch of govern that decide what will be produced and where-and-how people are going to work, all that under the checks and balances of the free-market and the official branches government. That is, an individual company is a form of tiny local government (not local in geography, but in scope) with the mandate to govern some aspects of the life of their employees (what they will be doing for 40h a weak), and the production of their particular products, being that mandate can be removed and transferred to other company by the free market. Now, I know that this metaphor I described is not a 100% perfect fit, if stretched to the extremes it will arrive at absurd corners where companies are nothing like governments. But then, no metaphor is perfect, not even the metaphor officially supported by the USA Judiciary branch, that "companies are people". They are only useful, and only fit in small contexts, and as such I believe "companies are government" is a very useful one and should be part of the discourse.

AnthonyMouse 5y ago

> The problem with Facebook/Amazon/Google is that they have a monopoly on a specific information network, for Facebook the social graph, internet discoverability for Google, and online shopping for Amazon. None of these things are a natural monopoly. Facebook only stays relevant by buying its competitors. You don't even need to break them up, just disable acquisitions. Then Instagram would be separate, WhatsApp would be separate. You don't even have to break them apart, just wait for the next one and don't let them buy it. Google is the biggest search engine but search isn't a natural monopoly. Their dominant position comes from all the vertical integration. Google owns YouTube and YouTube is featured prominently in Google Search results. To get Android/Google Play, OEMs have to use Google as their default search engine. To fix this you don't have to regulate the search results, just separate the search engine from the other companies, and stop allowing them to buy competing ad networks. Amazon doesn't really even have a dominant market position. They're not a railroad, they're Internet Walmart. They're just the biggest player in a highly competitive market. They have no capacity to significantly raise prices or people would immediately switch to any of their hundreds of competitors. Most of the complaints are from competitors butthurt that Amazon is keeping everyone's margins slim -- but that's what they're supposed to be doing. A railroad is a natural monopoly. You can't really break up a natural monopoly, so you have to regulate it, which is terrible. None of this tech stuff is like that. The problems here come from consolidation through mergers and vertical integration. They're unnatural monopolies with clear lines across which they can be broken up without long-term regulation. Just stop letting them buy their competitors.

Apes 5y ago
Amazon does leverage their position as market maker to undercut competition with anti-competitive practices though. They run data analytics to figure out what goods are the most profitable, then launch competing products and promote their own over the originals in their listings. Their monopoly gives them the ability to take over nearly any market they want at any time, with no consequences.
- AnthonyMouse 5y ago
  > They run data analytics to figure out what goods are the most profitable, then launch competing products and promote their own over the originals in their listings. Figuring out which products have high margins and entering those markets is an increase in competition. Promoting their own listings is only a problem if the competitors can't reach those customers in any other reasonable way, which isn't the case because there are many other online retailers and it's quite feasible for a medium sized competitor to sell directly to the customer on their own website.

laurent92 5y ago

Of course. Trust-busting has always been part of liberalism. The idea of liberalism has always been to avoid monopolies, which government is just one form of. The government’s role should be reduced to the minimum, police-army-justice-currency, and even the last one is up for a debate. So the government’s role is to stay small, and make companies stay small enough. Unfortunately this flew away in 2001 wehn Microsoft had been condemned, but not sentenced, because after 9/11, USA needed their companies to reign upon the rest of the world. Maybe time has come to admit that US reigning on the rest of the world hurt the domestic market with too-large-monopolies, and maybe it is time to come back to a competition market.

dont__panic 5y ago

Devil's advocate question: I don't really remember my railroad history in the US, but I do know that railroads are so mediocre as to be barely usable these days. Does that have anything to do with weakening the railroad industry at a critical moment just before the automobile industry popped up and ate their lunch? Could we be risking a similar problem here with the successors to Facebook's social media, Google's internet search algos, and Amazon's shopping experience?

asiachick 5y ago

That road analogy fails pretty quickly. If we wanted to follow that direction then it would like owning a home where there are 20 roads directly in front of your house and you can choose any one of them but you keep choosing Apple/Amazon/Facebook/Google For example I just moved and had to buy lots of stuff. I ordered from Macy's, Walmart, Target, Wayfair, and Amazon. It's trivial to use Bing or Ducduckgo over Google. When a search engine starts doing better for me I'll switch. As for Facebook, plenty of people using other services to stay connected

jonnycomputer 5y ago

Discounting Amazon's grip on the cloud computing sector is a mistake.

1vuio0pswjnm7 5y ago

The only way these companies can generate sufficient revenues is through advertising. It really does not matter what moonshot projects they are working on. There is not enough willingness to pay for that "work" to sustain a business. The internet has value besides being a vector for advertising. This is more or less what the parent comment is suggesting. Who pays the cost of supporting the internet. Internet subscribers. We finance (a) the delivery of advertising, (b) creation metadata about our usage (e.g., empty POST requests, beacons, various forms of telemtry, etc.) and (c) uploading our data to their computers.

bumby 5y ago

One of the issues that I have with your analogy is that the monopolies you mentioned (roads, internet, rail) all have substantial physical assets that are tied to their monopoly power. For example, even without factoring in the cost of land, it can cost up to $700k per mile of rail track. These kinds of upfront costs are one of the major moats they have to keeping outside competitors from emerging. I'm not sure the digital-era monopolies discussed have this same type of barrier to entry. The internet example is a more interesting analogy to me because it seems to align more with a utility, which we're okay with having monopolies existing, albeit regulated, because of the greater efficiencies. So are social networks, online shopping, or search public goods? If so, should they be regulated because we think there is an advantage to having a monopoly in this space? If not, what are their barriers of entry that stifle competition? I don't necessarily don't think they shouldn't be broken up, but I'm trying to understand whether/how they fit into previous paradigms or if the monopoly paradigm is fundamentally different in this digital era.

taurath 5y ago

Building another Facebook isn’t hard, but the network effect makes it almost impossible. Then they have their acquisition team to ensure that anything that does make it through doesn’t last long. The idea that they’re out there competing on their own merits is silly. I think that’s one of the big differences - they have a monopoly on the means of production (the userbase), which is less ephemeral than say owning all the steel plants and mines.

armchairhacker 5y ago

Another problem is that Facebook, Amazon, and Google get special treatment. There are explicit filters in WebKit (and probably mozilla) which allow special features for certain big-name companies. Also the App Store gives exemptions (e.g. VoIP notifications) to certain social apps. And most websites block crawlers but allow Google and Internet Archive. This IMO is a better argument towards anti-competitiveness. I absolutely get that there needs to be filters for certain privileges, but hard-coding them for big-name apps is not the answer.

after_care 5y ago

It’s not accurate to say Google has a monopoly on the “internet discoverability” information network. Bing and yahoo contain near equal information networks and Google isn’t dominate in many important Asian regions.

ZeroGravitas 5y ago

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