10 ms·

The monopoly strategy behind the Google/Microsoft mobile patent wars

87 points by webmaven 5y ago

throwawaysea 5y ago
The link here isn't exactly the right one - the same thing happened to me when I tried sharing this article previously as well (https://news.ycombinator.com/item?id=28933313 https://news.ycombinator.com/item?id=28933313). Either we both pasted the wrong URL or maybe HN trims off the hashtag part of the URL (with the #capital-as-power on the end of the URL). Anyways, the correct link is https://pluralistic.net/2021/10/20/vizio-vs-the-world/#capital-as-power https://pluralistic.net/2021/10/20/vizio-vs-the-world/#capit....
- webmaven 5y ago
  I definitely submitted the URL with the hash-mark and fragment[0], so HN must strip it off. [0] https://en.wikipedia.org/wiki/URI_fragment https://en.wikipedia.org/wiki/URI_fragment
  - dang 5y ago
    Yes, that's what happened. Sorry! I've put it back and will try to prevent this from happening again.
    - webmaven 5y ago
      Given that there are sites that use fragment identifiers to encode state, and users may be including fragments mistakenly (eg. click a link in a Wikipedia page's TOC, scroll to the top, share link), figuring out what to do with some random URL submission that includes a fragment isn't straightforward. In THEORY, when the fragment is (semantically?) significant, the site could dynamically alter the link rel="canonical" value to include the fragment such that you could check whether to keep it or not, but in practice I think that canonical links are intended for web crawler deduplication and so nearly always strip fragments off.
      - dang 5y ago
        We're indeed replacing links with canonical URLs now, as of maybe a month ago. But we were stripping anchors from URLs even before that, with a list of exempted sites. I've added pluralistic.net to that list now. If there's a better way to do it, I'm interested.
        webmaven 5y ago
        > If there's a better way to do it, I'm interested. About the only thing I could suggest would be to add a checkbox to the submission form that controlled fragment-preserving vs stripping, but you would probably need to add a review queue to double check it wasn't being abused (not that abuse is a particularly attractive target, in this case), and I am unsure whether the minor additional code and UI complexity is worth it vs. the ad-hoc process you have now. A second possible approach would be to invert that suggestion and simply add a review queue to check whether a removed fragment should have been preserved instead (ordering or filtering the queue by the rank of the submission rather than chronological order, for sanity purposes).
AlbertCory 5y ago
What an ignorant blowhard Cory Doctorow is. "This is a great strategy in light of US anittrust [sic] theories over the past 40 years, during which time antitrust regulators promised to leave companies alone as they formed monopolies, provided they didn't hike price after attaining monopoly dominance." No, Cory, that's not what happened and there was no "promise." The new theory of anti-trust was "consumer harm." Hiking prices is certainly one form of that, but so was forming a monopoly. Microsoft was prosecuted for forming a monopoly and reducing consumer choices. "Google's true operating costs aren't captured by adding up its salaries and servers – a correct accounting must include the costs of acquiring companies and with them, patents. That's the cost Google must incur, if is to retain its power." No, Cory, those are not "operating costs," those are called "capital costs." They're treated real differently in Accounting. I was part of this "acquire patents" effort at Google. I actually interviewed people to be in Legal whose job would be to acquire patents. The theory (since discarded) was that a heavy patent portfolio would give you a better negotiating position if you were sued. There was no thought of actually asserting these patents against Microsoft, or anyone. I actually used some of our internal tools to assess our patent portfolio. Most of those Motorola patents were worthless.
- saghm 5y ago
  > No, Cory, those are not "operating costs," those are called "capital costs." They're treated real differently in Accounting. I'm guessing he's aware that's how things work currently; it sounded to me like he was arguing that it shouldn't work that way, although I don't know if he literally believes that accounting practices should change or if that was more just for rhetorical effect.
- cmrdporcupine 5y ago
  All of this information could have been delivered without also delivering personal insults on the side.
  - AlbertCory 5y ago
    Perhaps, but this is the second article by Doctorow this week.
ece 5y ago
Things like OIN[0] didn't exist when MS and Google bought companies to strip them of their patents. They do exist now, and it's basically a truce over fighting on patents. The Bork view on anti-trust definitely has favored these companies, and Apple and Google can absolutely be accused of having and using monopoly power to keep competitors out. Google pays to be the default search engine on iOS (keeping competitors out), and Apple denies fair platform access to software it thinks has a chance at competing with it's ecosystem (Tile, etc..). Amazon and Facebook can be accused of this pretty easily too (restricting 3rd party sellers, restricting API access respectively). The law[1] is pretty clear on this, but bills exactly like [2] and [3] would clear it up more, which I believe Cory Doctrow supports, at least from reading his Twitter. [0] https://openinventionnetwork.com/ https://openinventionnetwork.com/ [1] 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-... [2] https://www.congress.gov/bill/117th-congress/house-bill/3825/text https://www.congress.gov/bill/117th-congress/house-bill/3825... [3] https://www.congress.gov/bill/117th-congress/house-bill/3816/text https://www.congress.gov/bill/117th-congress/house-bill/3816...
- gowld 5y ago
  What's the difference between keeping competitors our and keeping yourself in? Some goods are unique or scarce and go to the highest bidder.
  - ece 5y ago
    Those aren't the type of goods these companies are making. All of these companies have durable market power (in search, networking/communication, marketplaces); and can and have used it to expand their own power like the article says, and do it at the expense of smaller competitors. Hence the new anti-rust view being one that stops such anti-competitive actions.
- AlbertCory 5y ago
  Re [0], there are zillions of these "open patent" initiatives. Every week a new one comes along. It's easy to get lots of tiny companies to sign up for them. It's a lot harder to get anyone with a really valuable patent. As for the Bork view: all those things you mentioned are "consumer harm" and are not protected. It would be a lot more fruitful to look at the lobbyist spending by the tech giants, and the Astroturf "studies" they fund.
huitzitziltzin 5y ago
Cory Doctorow is ignorant of economics and competition policy. It’s frustrating to see his thoughts shared here so often. There is no credible economic theory of firm “power seeking”. What’s more, you don’t need such a theory to explain what’s going on here. If you want to explain why Google paid so much for Motorola, you can do so via the various defects in intellectual property law. All large firms are at least occasionally involved in patent litigation, frequently with patent trolls (though sometimes with large competitors too). This is familiar enough to everyone on this site. For Google this was a defensive acquisition, but a defense against frivolous litigation. There is no need to invent some theory of firm “power seeking” to make the case.
- AlbertCory 5y ago
  "Everything is about power": this reminds me of the 4-year-old who's just discovered a dirty word, and revels in its effect of shocking the grownups, so he yells it at every opportunity. Yes, boys and girls, "power" is sometimes a motivator. There are other ones, though. Maybe read a few more books.
- guerrilla 5y ago
  > There is no credible economic theory of firm “power seeking” How is the theory of market power combined with everything else we know not that? [1] It seems obviously in the firms interest even if their primary motive were still profit since it ensures increased rates of profit (modulo risk of a regulatory smackdown.) 1. https://en.wikipedia.org/wiki/Market_power https://en.wikipedia.org/wiki/Market_power
  - jgalt212 5y ago
    yes, but if you get powerful enough there is no regulatory smackdown. https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture https://www.goodreads.com/book/show/34397551-the-chickenshit-club https://www.goodreads.com/book/show/34397551-the-chickenshit...
  - huitzitziltzin 5y ago
    Market power is a well defined economic concept. I am an economist who works on that issue. If he wants to talk about market power I think that would be great! (Though not as an explanation for this case.) Indeed, I said I thought he was ignorant of economics in part bc he brought up this weird “capital as power” thing which has nothing to do (AFAICT) with actual market power as we understand it. Furthermore, in this particular case I think you get a much better, more direct explanation of Google’s behavior vis-a-vis its acquisition of Motorola via intellectual property and patent litigation than via market power, let alone via “capital as power”.
mips_avatar 5y ago
The thing I think Doctorow is missing is the motivation at the engineering level to get a patent. There is very minimal strategizing between corporate attorney's about how the patent might be strategic. If something is patentable, the engineering teams will often pursue a patent mostly motivated from a bragging rights perspective. It's a great way to give recognition to engineers. Most of Google's/Microsoft's portfolio are collections of patents like that. Maybe at a portfolio level there is some strategizing, but not at the level of the engineers actually inventing things.
- mogopugh 5y ago
  The patents are usually at least nominally related to a product, and the allocation of engineering to product is very intentional. You're correct that there's some loss in that process, and lots of funny business/perverse incentives besides, but engineers aren't generally patenting totally random things.
AlbertCory 5y ago
A general comment about patent trolls ("NPEs") business model. I actually heard a presentation by a (former) troll about this. They buy a patent which looks good, i.e. applies broadly, hasn't been litigated unsuccessfully, has a few more years to run, ideally has been tested by an unsuccessful IPR. The whole goal is to make back the investment in a few years. Contrary to what someone said, there is not an infinite supply of those. Then they pick out easy targets to sue, i.e. companies which just settle without much fuss. Those settlements don't have to be for large amounts, and typically are not. I should correct the word "sue." Often there is no lawsuit. If a defendant is formally notified that they might be sued, they can seek a Declarative Judgment (DJ) in a friendly venue, which affirms that they're not infringing. The troll does not want to be DJ'ed. So they just threaten without really threatening ("hey, you might want to take a look at this patent!"). Those easy targets build up a war chest, which the troll then uses to go after the bigger and harder targets. These are companies that will fight back, often with an IPR. So the moral is: make yourself a hard target. Never roll over for those people.

87 points by webmaven 5y ago

The link here isn't exactly the right one - the same thing happened to me when I tried sharing this article previously as well (https://news.ycombinator.com/item?id=28933313 https://news.ycombinator.com/item?id=28933313). Either we both pasted the wrong URL or maybe HN trims off the hashtag part of the URL (with the #capital-as-power on the end of the URL). Anyways, the correct link is https://pluralistic.net/2021/10/20/vizio-vs-the-world/#capital-as-power https://pluralistic.net/2021/10/20/vizio-vs-the-world/#capit....

webmaven 5y ago
I definitely submitted the URL with the hash-mark and fragment[0], so HN must strip it off. [0] https://en.wikipedia.org/wiki/URI_fragment https://en.wikipedia.org/wiki/URI_fragment
- dang 5y ago
  Yes, that's what happened. Sorry! I've put it back and will try to prevent this from happening again.
  - webmaven 5y ago
    Given that there are sites that use fragment identifiers to encode state, and users may be including fragments mistakenly (eg. click a link in a Wikipedia page's TOC, scroll to the top, share link), figuring out what to do with some random URL submission that includes a fragment isn't straightforward. In THEORY, when the fragment is (semantically?) significant, the site could dynamically alter the link rel="canonical" value to include the fragment such that you could check whether to keep it or not, but in practice I think that canonical links are intended for web crawler deduplication and so nearly always strip fragments off.
    - dang 5y ago
      We're indeed replacing links with canonical URLs now, as of maybe a month ago. But we were stripping anchors from URLs even before that, with a list of exempted sites. I've added pluralistic.net to that list now. If there's a better way to do it, I'm interested.
      - webmaven 5y ago
        > If there's a better way to do it, I'm interested. About the only thing I could suggest would be to add a checkbox to the submission form that controlled fragment-preserving vs stripping, but you would probably need to add a review queue to double check it wasn't being abused (not that abuse is a particularly attractive target, in this case), and I am unsure whether the minor additional code and UI complexity is worth it vs. the ad-hoc process you have now. A second possible approach would be to invert that suggestion and simply add a review queue to check whether a removed fragment should have been preserved instead (ordering or filtering the queue by the rank of the submission rather than chronological order, for sanity purposes).

AlbertCory 5y ago

What an ignorant blowhard Cory Doctorow is. "This is a great strategy in light of US anittrust [sic] theories over the past 40 years, during which time antitrust regulators promised to leave companies alone as they formed monopolies, provided they didn't hike price after attaining monopoly dominance." No, Cory, that's not what happened and there was no "promise." The new theory of anti-trust was "consumer harm." Hiking prices is certainly one form of that, but so was forming a monopoly. Microsoft was prosecuted for forming a monopoly and reducing consumer choices. "Google's true operating costs aren't captured by adding up its salaries and servers – a correct accounting must include the costs of acquiring companies and with them, patents. That's the cost Google must incur, if is to retain its power." No, Cory, those are not "operating costs," those are called "capital costs." They're treated real differently in Accounting. I was part of this "acquire patents" effort at Google. I actually interviewed people to be in Legal whose job would be to acquire patents. The theory (since discarded) was that a heavy patent portfolio would give you a better negotiating position if you were sued. There was no thought of actually asserting these patents against Microsoft, or anyone. I actually used some of our internal tools to assess our patent portfolio. Most of those Motorola patents were worthless.

saghm 5y ago
> No, Cory, those are not "operating costs," those are called "capital costs." They're treated real differently in Accounting. I'm guessing he's aware that's how things work currently; it sounded to me like he was arguing that it shouldn't work that way, although I don't know if he literally believes that accounting practices should change or if that was more just for rhetorical effect.
cmrdporcupine 5y ago
All of this information could have been delivered without also delivering personal insults on the side.
- AlbertCory 5y ago
  Perhaps, but this is the second article by Doctorow this week.

ece 5y ago

Things like OIN[0] didn't exist when MS and Google bought companies to strip them of their patents. They do exist now, and it's basically a truce over fighting on patents. The Bork view on anti-trust definitely has favored these companies, and Apple and Google can absolutely be accused of having and using monopoly power to keep competitors out. Google pays to be the default search engine on iOS (keeping competitors out), and Apple denies fair platform access to software it thinks has a chance at competing with it's ecosystem (Tile, etc..). Amazon and Facebook can be accused of this pretty easily too (restricting 3rd party sellers, restricting API access respectively). The law[1] is pretty clear on this, but bills exactly like [2] and [3] would clear it up more, which I believe Cory Doctrow supports, at least from reading his Twitter. [0] https://openinventionnetwork.com/ https://openinventionnetwork.com/ [1] 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-... [2] https://www.congress.gov/bill/117th-congress/house-bill/3825/text https://www.congress.gov/bill/117th-congress/house-bill/3825... [3] https://www.congress.gov/bill/117th-congress/house-bill/3816/text https://www.congress.gov/bill/117th-congress/house-bill/3816...

gowld 5y ago
What's the difference between keeping competitors our and keeping yourself in? Some goods are unique or scarce and go to the highest bidder.
- ece 5y ago
  Those aren't the type of goods these companies are making. All of these companies have durable market power (in search, networking/communication, marketplaces); and can and have used it to expand their own power like the article says, and do it at the expense of smaller competitors. Hence the new anti-rust view being one that stops such anti-competitive actions.
AlbertCory 5y ago
Re [0], there are zillions of these "open patent" initiatives. Every week a new one comes along. It's easy to get lots of tiny companies to sign up for them. It's a lot harder to get anyone with a really valuable patent. As for the Bork view: all those things you mentioned are "consumer harm" and are not protected. It would be a lot more fruitful to look at the lobbyist spending by the tech giants, and the Astroturf "studies" they fund.

huitzitziltzin 5y ago

Cory Doctorow is ignorant of economics and competition policy. It’s frustrating to see his thoughts shared here so often. There is no credible economic theory of firm “power seeking”. What’s more, you don’t need such a theory to explain what’s going on here. If you want to explain why Google paid so much for Motorola, you can do so via the various defects in intellectual property law. All large firms are at least occasionally involved in patent litigation, frequently with patent trolls (though sometimes with large competitors too). This is familiar enough to everyone on this site. For Google this was a defensive acquisition, but a defense against frivolous litigation. There is no need to invent some theory of firm “power seeking” to make the case.

AlbertCory 5y ago
"Everything is about power": this reminds me of the 4-year-old who's just discovered a dirty word, and revels in its effect of shocking the grownups, so he yells it at every opportunity. Yes, boys and girls, "power" is sometimes a motivator. There are other ones, though. Maybe read a few more books.
guerrilla 5y ago
> There is no credible economic theory of firm “power seeking” How is the theory of market power combined with everything else we know not that? [1] It seems obviously in the firms interest even if their primary motive were still profit since it ensures increased rates of profit (modulo risk of a regulatory smackdown.) 1. https://en.wikipedia.org/wiki/Market_power https://en.wikipedia.org/wiki/Market_power
- jgalt212 5y ago
  yes, but if you get powerful enough there is no regulatory smackdown. https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture https://www.goodreads.com/book/show/34397551-the-chickenshit-club https://www.goodreads.com/book/show/34397551-the-chickenshit...
- huitzitziltzin 5y ago
  Market power is a well defined economic concept. I am an economist who works on that issue. If he wants to talk about market power I think that would be great! (Though not as an explanation for this case.) Indeed, I said I thought he was ignorant of economics in part bc he brought up this weird “capital as power” thing which has nothing to do (AFAICT) with actual market power as we understand it. Furthermore, in this particular case I think you get a much better, more direct explanation of Google’s behavior vis-a-vis its acquisition of Motorola via intellectual property and patent litigation than via market power, let alone via “capital as power”.

mips_avatar 5y ago

The thing I think Doctorow is missing is the motivation at the engineering level to get a patent. There is very minimal strategizing between corporate attorney's about how the patent might be strategic. If something is patentable, the engineering teams will often pursue a patent mostly motivated from a bragging rights perspective. It's a great way to give recognition to engineers. Most of Google's/Microsoft's portfolio are collections of patents like that. Maybe at a portfolio level there is some strategizing, but not at the level of the engineers actually inventing things.

mogopugh 5y ago
The patents are usually at least nominally related to a product, and the allocation of engineering to product is very intentional. You're correct that there's some loss in that process, and lots of funny business/perverse incentives besides, but engineers aren't generally patenting totally random things.

AlbertCory 5y ago

A general comment about patent trolls ("NPEs") business model. I actually heard a presentation by a (former) troll about this. They buy a patent which looks good, i.e. applies broadly, hasn't been litigated unsuccessfully, has a few more years to run, ideally has been tested by an unsuccessful IPR. The whole goal is to make back the investment in a few years. Contrary to what someone said, there is not an infinite supply of those. Then they pick out easy targets to sue, i.e. companies which just settle without much fuss. Those settlements don't have to be for large amounts, and typically are not. I should correct the word "sue." Often there is no lawsuit. If a defendant is formally notified that they might be sued, they can seek a Declarative Judgment (DJ) in a friendly venue, which affirms that they're not infringing. The troll does not want to be DJ'ed. So they just threaten without really threatening ("hey, you might want to take a look at this patent!"). Those easy targets build up a war chest, which the troll then uses to go after the bigger and harder targets. These are companies that will fight back, often with an IPR. So the moral is: make yourself a hard target. Never roll over for those people.