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I don't know what the formal definitions of any of these things are, but I assume (hope?) that it's important not to equate being successful with being a monopo

I don't know what the formal definitions of any of these things are, but I assume (hope?) that it's important not to equate being successful with being a monopoly by definition. If Ford came out with an amazing new car tomorrow, and suddenly 95% of new cars purchased were Fords, we probably shouldn't initiate trust-busting action against Ford on that basis alone. We want car companies to try to capture market share by making better cars. I don't know exactly how we contend with this definitional problem, but intuitively I think it should have something to do with prices and behavior. For example, if we were a fly on the wall in a Google exec meeting, we might be curious about whether they're jacking up the price of ads because they know no one can compete with them, or whether they're sensitive to charging more than their smaller competitors do. If they're behaving like their competitors are a serious threat, then intuitively they're probably not a monopoly, and it probably doesn't make sense to trust-bust them. But anyway I'm not a lawyer, and I don't know what the current thinking is about any of this stuff.

tablespoon 5y ago
> I don't know what the formal definitions of any of these things are, but I assume (hope?) that it's important not to equate being successful with being a monopoly by definition. If Ford came out with an amazing new car tomorrow, and suddenly 95% of new cars purchased were Fords, we probably shouldn't initiate trust-busting action against Ford on that basis alone. We want car companies to try to capture market share by making better cars. There's an important difference between "capturing market share" and "capturing too much the market share." If Ford's going to put its competitors out of business, turn them into niche players, or even just get into a position where it can rest on its laurels for a few decades, our primary concern is no longer making sure Ford can be rewarded. Honestly, I don't see the downside of regularly breaking up a #1 player with too much market share into successors that are the #2 and #3 payers (and forcing major shareholders to divest one or the other). I want companies to be competing to get to the top, but once they get there, give them a prize for their effort and send them back down. From my experience as a customer, Amazon's e-commerce operation hasn't improved much (e.g. their search is still as shitty as ever) and has arguably regressed in many ways (e.g. more shady products and fake reviews) in the last decade. That's pretty strong signal to me that they're not under enough competitive pressure.
- cornellwright 5y ago
  Amazon's search is so bad that it's almost certainly intentional in order to get customers to look at more products. This is a great example of them using their monopoly power to increase their revenue to the detriment of consumers. For an idea of what it could be, try the search on electronic component distributor sites like Digikey[1] and Newark[2]. They are both improving their search in order to attract more customers benefiting all customers in the process. Try to find a 34 inch 1080p monitor with both VGA and DisplayPort inputs on Amazon and you'll find yourself reading hundreds of monitor product pages. If Amazon had serious competition you could probably find and buy one in 5 or 6 clicks, or easily determine that such a combination of features doesn't exist. [1] https://www.digikey.com/ https://www.digikey.com/ [2] https://www.newark.com/ https://www.newark.com/
  - fshbbdssbbgdd 5y ago
    I’m skeptical that making users spend a long time trying to find the right monitor would actually be good for Amazon’s revenue or that Amazon would intentionally optimize for it. If the typical user really experienced that struggle, many would probably give up without making a purchase. To hazard a guess, I’d speculate that apparent poor quality of search results is more likely Amazon trying to push customers toward items where Amazon earns more margin. The average customer probably just buys the first/cheapest result and isn’t going to spend hours scouring the product pages. There’s a lot of complexity in Amazon’s relationships with suppliers, fee structure, and warehouses/logistics that could affect the revenue-optimizing search ranking but isn’t obvious to the user.
    - cornellwright 5y ago
      Amazon deliberately leading users to a suboptimal product because they get more margin seems like exactly the sort of thing that competition should help to resolve (or at least limit). The fact that search is so bad is probably evidence of too little competition.
    - PixyMisa 5y ago
      Amazon has ads in search results.
bmitc 5y ago
The Justice department has some good documentation. https://www.justice.gov/atr/competition-and-monopoly-single-firm-conduct-under-section-2-sherman-act-chapter-2 https://www.justice.gov/atr/competition-and-monopoly-single-...
- bumby 5y ago
  This is interesting because it defines monopoly and market power in terms of prices. How does the traditional monopoly definition fit when we're talking about "free" goods (to the general consumer) like FB or Google search? Is the thought that they exert too much power over ad pricing?
  - huitzitziltzin 5y ago
    This is a fascinating and unresolved question in antitrust economics, but explains why very few people in the profession think FB is a monopoly. And indeed - the FTCs failure to make a plausible market definition argument which showed why FB was a monopoly in that market is why the FTC got slapped by the judge in January of this year. ~Antitrust Economist.
  - sanderjd 5y ago
    It doesn't fit. The point is that we need new regulatory language that does fit.
    - bumby 5y ago
      Is there a proposed new language/definition? The article's discussion still seems to be centered on price. "her paper highlights how the consumer welfare view of antitrust fails to curb the predatory pricing". I said it elsewhere, but I not against the idea of trust-busting, but the industry analogies typically brought up don't really fit. The closest I can find in general discussion is that the services are a public good, but we tolerate/promote monopolies in those sectors (like utilities).
      - sanderjd 5y ago
HWR_14 5y ago
> suddenly 95% of new cars purchased were Fords, we probably shouldn't initiate trust-busting action against Ford on that basis alone. Antitrust law isn't about stopping people from accumulating a dominant position. It's about stopping people from using that dominant position to maintain itself or to spread to other areas. Ford produces the "Amazing Car" that everyone wants, costs $1, etc. great! When Ford uses an RFID reader to force it to only fill up at Ford Gas Stations antitrust steps in. The issue isn't that Google is the dominant search engine, but that it uses that to become dominant in ads. It's not that YouTube is dominant in video, but that uses that to encourage people to download Chrome.
- kfarr 5y ago
  Yes Google was able to catapult YouTube playback pages in all Google search results after acquisition, just one example
- sjtindell 5y ago
  Good take, very much agree. That’s why so many of the antitrust work against Google/FB, etc. has focused on acquisitions. They become successful, then use their data and infinite money printers to buy anyone who would compete.

tablespoon 5y ago

> I don't know what the formal definitions of any of these things are, but I assume (hope?) that it's important not to equate being successful with being a monopoly by definition. If Ford came out with an amazing new car tomorrow, and suddenly 95% of new cars purchased were Fords, we probably shouldn't initiate trust-busting action against Ford on that basis alone. We want car companies to try to capture market share by making better cars. There's an important difference between "capturing market share" and "capturing too much the market share." If Ford's going to put its competitors out of business, turn them into niche players, or even just get into a position where it can rest on its laurels for a few decades, our primary concern is no longer making sure Ford can be rewarded. Honestly, I don't see the downside of regularly breaking up a #1 player with too much market share into successors that are the #2 and #3 payers (and forcing major shareholders to divest one or the other). I want companies to be competing to get to the top, but once they get there, give them a prize for their effort and send them back down. From my experience as a customer, Amazon's e-commerce operation hasn't improved much (e.g. their search is still as shitty as ever) and has arguably regressed in many ways (e.g. more shady products and fake reviews) in the last decade. That's pretty strong signal to me that they're not under enough competitive pressure.

cornellwright 5y ago
Amazon's search is so bad that it's almost certainly intentional in order to get customers to look at more products. This is a great example of them using their monopoly power to increase their revenue to the detriment of consumers. For an idea of what it could be, try the search on electronic component distributor sites like Digikey[1] and Newark[2]. They are both improving their search in order to attract more customers benefiting all customers in the process. Try to find a 34 inch 1080p monitor with both VGA and DisplayPort inputs on Amazon and you'll find yourself reading hundreds of monitor product pages. If Amazon had serious competition you could probably find and buy one in 5 or 6 clicks, or easily determine that such a combination of features doesn't exist. [1] https://www.digikey.com/ https://www.digikey.com/ [2] https://www.newark.com/ https://www.newark.com/
- fshbbdssbbgdd 5y ago
  I’m skeptical that making users spend a long time trying to find the right monitor would actually be good for Amazon’s revenue or that Amazon would intentionally optimize for it. If the typical user really experienced that struggle, many would probably give up without making a purchase. To hazard a guess, I’d speculate that apparent poor quality of search results is more likely Amazon trying to push customers toward items where Amazon earns more margin. The average customer probably just buys the first/cheapest result and isn’t going to spend hours scouring the product pages. There’s a lot of complexity in Amazon’s relationships with suppliers, fee structure, and warehouses/logistics that could affect the revenue-optimizing search ranking but isn’t obvious to the user.
  - cornellwright 5y ago
    Amazon deliberately leading users to a suboptimal product because they get more margin seems like exactly the sort of thing that competition should help to resolve (or at least limit). The fact that search is so bad is probably evidence of too little competition.
  - PixyMisa 5y ago
    Amazon has ads in search results.

bmitc 5y ago

The Justice department has some good documentation. https://www.justice.gov/atr/competition-and-monopoly-single-firm-conduct-under-section-2-sherman-act-chapter-2 https://www.justice.gov/atr/competition-and-monopoly-single-...

bumby 5y ago
This is interesting because it defines monopoly and market power in terms of prices. How does the traditional monopoly definition fit when we're talking about "free" goods (to the general consumer) like FB or Google search? Is the thought that they exert too much power over ad pricing?
- huitzitziltzin 5y ago
  This is a fascinating and unresolved question in antitrust economics, but explains why very few people in the profession think FB is a monopoly. And indeed - the FTCs failure to make a plausible market definition argument which showed why FB was a monopoly in that market is why the FTC got slapped by the judge in January of this year. ~Antitrust Economist.
- sanderjd 5y ago
  It doesn't fit. The point is that we need new regulatory language that does fit.
  - bumby 5y ago
    Is there a proposed new language/definition? The article's discussion still seems to be centered on price. "her paper highlights how the consumer welfare view of antitrust fails to curb the predatory pricing". I said it elsewhere, but I not against the idea of trust-busting, but the industry analogies typically brought up don't really fit. The closest I can find in general discussion is that the services are a public good, but we tolerate/promote monopolies in those sectors (like utilities).
    - sanderjd 5y ago

HWR_14 5y ago

> suddenly 95% of new cars purchased were Fords, we probably shouldn't initiate trust-busting action against Ford on that basis alone. Antitrust law isn't about stopping people from accumulating a dominant position. It's about stopping people from using that dominant position to maintain itself or to spread to other areas. Ford produces the "Amazing Car" that everyone wants, costs $1, etc. great! When Ford uses an RFID reader to force it to only fill up at Ford Gas Stations antitrust steps in. The issue isn't that Google is the dominant search engine, but that it uses that to become dominant in ads. It's not that YouTube is dominant in video, but that uses that to encourage people to download Chrome.

kfarr 5y ago
Yes Google was able to catapult YouTube playback pages in all Google search results after acquisition, just one example
sjtindell 5y ago
Good take, very much agree. That’s why so many of the antitrust work against Google/FB, etc. has focused on acquisitions. They become successful, then use their data and infinite money printers to buy anyone who would compete.