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EU suggests breaking up Google's ad business in preliminary antitrust ruling

306 points by HatchedLake721 3y ago

flexie 3y ago
Before anyone makes the argument that the EU should have no jurisdiction over an American entity, please remember that Google sells its services in Europe. It's well within the jurisdiction of the EU to regulate how anyone does business here. Google Ireland alone had a 50B euro turnover. The breaking up of monopolies used to be in the toolbox of American antitrust policies, back when America enforced antitrust legislation on its own companies.
- 1over137 3y ago
  >back when America enforced antitrust legislation on its own companies A great book about that era is "Goliath" by Matt Stoller.
- panragon 3y ago
  >Google Ireland alone had a 50B euro turnover. Not to discredit the rest of what you're saying, because it is true the EU has jurisdiction and that anti-trust is a lost art in many places in the world. Still, saying Google Ireland 'alone' is a bit funny when Google (like all multinationals) is known to take advantage of Ireland's tax laws to funnel as much of their EU business through. Whatever money Google is making in Ireland isn't just what they're making from the Irish market, it's also from whatever they're making everywhere else in the EU who's origins are ambiguous enough to not be attached to any single country.
  - Detrytus 3y ago
    Yep, and that's how you get Ireland's GDP per capita artificially inflated to $114k, when in reality it should be maybe a third of that...
    - bee_rider 3y ago
      Eh, we can’t really complain. The international capitalist system owes Ireland a bit more; its predecessor, colonialism, screwed Ireland over for generations.
      - Detrytus 3y ago
        But the point is that Ireland does not really benefit from this money - it is only an accounting trick. Google funnels money through Ireland, but does not employ many people in Ireland, and does not pay much taxes there. In the end, the living standard of typical Irishman is closer to countries with $40-45k GDP, such as Italy or France, than to countries with $100k GDP, such as Norway or Switzerland.
        inamorty 3y ago
        This is not true. If anything Ireland is too reliant on a few multi-national corporations. In 2022, corporate tax was the second highest income stream for the state: https://www.gov.ie/en/press-release/4992b-exchequer-surplus-of-5-billion-in-2022-corporation-tax-surpasses-vat-ministers-mcgrath-donohoe/ https://www.gov.ie/en/press-release/4992b-exchequer-surplus-...
        resolutebat 3y ago
        This article suggests Google employed over 8,000 people in Ireland in 2018, and it's quite likely that number has grown since. https://9to5google.com/2020/03/02/google-dublin-coronavirus/ https://9to5google.com/2020/03/02/google-dublin-coronavirus/
        Detrytus 3y ago
        Which means one employee per $6 millions of revenue. Which is exactly what I’m talking about: their actual presence in Ireland is much smaller than you would expect from revenue number alone, which again supports my claim about “accounting trick”
        toast0 3y ago
  - heywhatupboys 3y ago
    well, that still means they have to follow Irish law. Just like shipping companies register their ships in other countries, that means they have to follow their laws too.
    - Detrytus 3y ago
      yes, but that's not the point of GP comment. Saying "Ireland alone has $50B turnover" might make someone think: "Wow, if they make so much money from such a small country, then how much do they make in the entire Europe?". And the answer to that is: $50B. There's not a single euro-cent is earned in Europe that does not go through Ireland.
  - madeofpalk 3y ago
    You can't have it both ways though. You don't get to take advantage of Irish law to reduce your tax/costs, but then also say that Ireland (and the EU) has no jurisdiction over you.
    - thfuran 3y ago
      But that's not the claim being made.
      - throwaway462910 3y ago
        It's the claim being pre-emptively argued against though
        bbor 3y ago
        Not sure there’s anyone in here arguing for google. Poor little google, being bullied by all us hackers…
        sensanaty 3y ago
        You should check out the thread, lots of people throwing themselves in front of the firing line because I guess they think that messing with Google will somehow translate to messing with their own startups or whatever.
        panragon 3y ago
        Or they just work for Google, of which there's a reasonable amount of members here, but yeah.
        thfuran 3y ago
        The comment they replied to already explicitly stated that the EU has jurisdiction. They're not pre-empting anything.
        panragon 3y ago
- fredgrott 3y ago
  equally good and bad as the fractured tax policies of Europe is what allows Gogle to avoid US corporation taxation.
  - roomey 3y ago
    I think it is fairer to say US tax law allows Google to avoid US corporation tax no?
- LatteLazy 3y ago
  A better argument is simply that the US routinely (and selectively) enforces its rules well beyond its borders. So why shouldn't anyone else with the clout needed...
  - pwb25 3y ago
    Can't wait for the chinese or indian SEC to start suing US nationals for different exotic financial wrongdoings on some half hidden rule
    - LatteLazy 3y ago
      It is a bad approach, but it's a bit of a prisoner's dilemma: no nation will be the only one NOT to pull BS like that...
    - dtech 3y ago
      You've slipped down quite the slope to go from antitrust of companies operating in the jurisdiction to foreign natural persons.
      - pwb25 3y ago
        Not really. When did the Chinese CFTC do something like this to any american? https://en.wikipedia.org/wiki/2010_flash_crash#Evidence_of_market_manipulation_and_arrest https://en.wikipedia.org/wiki/2010_flash_crash#Evidence_of_m...
        LatteLazy 3y ago
        Just for balance, the US had Canada arrest a chinese national who had never been to the USA, for doing business with Iran (and then a bunch of other weird charges) https://en.wikipedia.org/wiki/Meng_Wanzhou https://en.wikipedia.org/wiki/Meng_Wanzhou China then "co-incidentally" arrested 2 Canadians. The whole thing is a shit show and it would be better for everyone if countries were more reasonable and agreed to avoid a "race to the bottom"
- WastingMyTime89 3y ago
  > The breaking up of monopolies used to be in the toolbox of American antitrust policies, back when America enforced antitrust legislation on its own companies. The US Justice Department sued Google in 2020 and is asking for pretty much the same disinvestment for pretty much the same reasons. The EU is trailing the US by two years here. I'm eagerly awaiting the trove of patriotic comments which will undoubtedly follow the posting of such an article and will most likely entirely miss the point as usual.
  - Gareth321 3y ago
    > The US Justice Department sued Google in 2020 and is asking for pretty much the same disinvestment for pretty much the same reasons. While true, 2.5 years later there is still no action. In that same time period, the E.U. released the largest anti-monopoly technology law in its history, the Digital Markets Act. This will take effect near the end of the year and impact all major tech companies. I think it's clear that U.S. antitrust is ineffective at present.
    - bbor 3y ago
      They’re advancing in spurts - a few events this year. Remember when the justice department suggested that google sell its buy side advertising unit, and somehow “what if we just spun it off into its own Bet?” got proposed. Good times. Perhaps the most brazen “FU” from google lawyers in the history of the company
- Mountain_Skies 3y ago
  I used to believe that company breakups should happen automatically when they reach 1% of the country's GDP. There are lots of ways companies could avoid having the government decide how to break them up such as issuing dividends instead of hording cash, spinning off non-core businesses, setting up independent IP companies that would license back IP to the core company (and as an indpendent company, be required to license to anyone else at similar rates), and things like that. The problem comes in if one country follows this paradigm but then you have a company like Samsung that's over 20% of their host country's GDP and there's no appetite in the host country to break them up. How can your domestic companies that are limited in size compete with those of other countries with no limit on their size?
  - gylterud 3y ago
    How about an automatic nationalisation in stead? Where you take companies which have grown too big out of the private ownership’s hands.
    - delfinom 3y ago
      Too dangerous unless it's a service that should be a vital government service. You do not want your government to basically have a permanent monopoly on everything. This just gives power to authoritarian to rise.
      - hef19898 3y ago
        Democracy allows authrotarians to rise in and of itself. Recent ones include Orban, Erdogan and Trump. Historical ones include, yes I know, Mussolini and Hitler.
    - toyg 3y ago
      This is Hacker News, you can't say the N word here.
      - deleted 3y ago
        [deleted]
- donatj 3y ago
  > breaking up of monopolies What’s the monopoly here? There are tons of successful ad companies.
  - shadowgovt 3y ago
    You've hit the nail on the head regarding the difference between the EU concept of antitrust and the American one. EU antitrust law is grounded in harm to companies. If there are many companies, but one has sewn up the market so strongly that others can't really have a chance to prosper, the EU will step in. American antitrust law is grounded in harm to consumers. The US regulators won't go after a successful ad company because other ad companies say it's too hard to compete with them; it'll go after them if consumers say "We don't have any choice but to do business with X, and X's prices are too high / X is too exclusive / X is only doing business with us in market sector A if we agree to use them also for market sector B." That additional bar to regulation means the EU may very well have cause to act before the US does if Google is big enough to muscle around other ad agencies and set the terms by which they can exist, even if they do exist.
  - xps 3y ago
    Please name one credible Google Ads competitor.
    - knowriju 3y ago
      Err... Meta / Microsoft /Yahoo ? Also depending on how you look at it, you can buy ads to showcase your business in Amazon, Apple as well.
  - bbor 3y ago
    I recommend you look into it a bit more if you haven’t - there are buyside and sell side competitors, but google massively controls both markets, which it uses to grow both businesses. For example, the justice department found slides from a project that favored its buyside customers when running supposedly impartial auctions on the sell side - in layman’s terms, brazenly fucking over their competitors. Allegedly. The best part is of course that the google engineers named it “project bernanke” after the Fed chairman, since they thought of it like QE, I.e. “giving out free money” to people who used their buyside products. I’m still not sure if that was a criticism of QE or if they’re honestly that submerged in the Google Kool-Aid… All of that is small potatoes to the main way in which google is a monopoly though: they run the only ad exchange. Trust me, it helps. Facebook spent many billions trying to stand up a competitor and ultimately gave up, which should tell you how valuable that privilege is
- pwb25 3y ago
  and american government agencies try to rule over all countries or citizens all the time too. Or try to make them follow their anti piracy laws
- spacebanana7 3y ago
  There are real questions about how much authority the EU has over an American entity. Can the EU only regulate activities in the EU or does it have global jurisdiction? On one hand, if Google simply restructured, spun off or sold its EU ad business the competitive landscape wouldn't change that much. I'm not sure whether a new European competitor could ever become a peer to Google if it could only compete in the EU market because of the network effects in the ad business. Alternatively, the EU having global jurisdiction would have even bigger issue. With that precedent, could Japan or Australia regulate European businesses? Also how would the EU enforce rules outside of its geography? How complaint would the US court system be in enforcing European decisions?
  - Longhanks 3y ago
    What makes you think the EU would have the slightest jurisdiction at all over any entity outside of its member states? The only reason they speak about Google is because Google does business in the EU.
  - piva00 3y ago
    > Alternatively, the EU having global jurisdiction would have even bigger issue. With that precedent, could Japan or Australia regulate European businesses? That's already what the USA does to global companies operating inside the US. That's exactly how Cuba has been under a blockade from the US, for example...
    - spacebanana7 3y ago
      Sanctions are different from antitrust. With sanctions the US can declare that third parties must choose between doing business with the US and Cuba / ZTE. Because of it's large economy the US would be confident that most of those parties would choose to choose the US over the company / small country. Antitrust enforcement is many ways more difficult than sanctions enforcement because third parties must be compelled in 'how' rather than 'whether' they do business with a company. Even the US would've struggled to break up ZTE / Huawei etc into smaller companies across every jurisdiction for antitrust. Doing so in China would've obviously been impossible but even enforcing this in the Gulf States & South Korea would've stretched the limits of US power.
- golemotron 3y ago
  I'll applaud the first large US company that leaves the EU market entirely and makes a claim of non-jurisdiction. It's overdue. In fact, I don't think they have to go that far. Other countries are free to block internet services or sanction their own citizens for using them. It should not follow that placing a service on the web makes you subject to the jurisdiction of anyone who chooses to use it.
  - bantunes 3y ago
    Why should it not? If you're providing a service (presumably for profit), shouldn't you be bound by rules other commercial service providers have to follow in that jurisdiction as well? If not, you'd be at a massive advantage.
    - golemotron 3y ago
      It's not being provided in that jurisdiction. If you are hosted/domiciled in a country foreign users are entering another jurisdiction when they access the service.
      - bantunes 3y ago
        If you're taking money in that jurisdiction, why is it not "being provided"?
        golemotron 3y ago
        Another way to look at it is that customer is sending money to another jurisdiction. Countries can and do pass laws about whom their citizens can trade with. It seems like that is a better route than inventing jurisdiction over foreign companies.
        bantunes 3y ago
        Again, if you "pass laws about whom their citizens can trade with" isn't that having jurisdiction over a foreign company?
senttoschool 3y ago
Should the US break up LVMH given how dominant they are in luxury goods?
- hfkwer 3y ago
  Can you give a reasonable argument why they shouldn't? I'm not sure you're making the point you think you're making.
  - senttoschool 3y ago
    They think that Google doesn't have enough competition right? So they want to regulate their markets. But as we know, Google's entire business is hugely threatened by LLMs. Over time, all companies die and get outcompeted. Google won't be any different. You don't have to regulate.
    - hfkwer 3y ago
      Are you replying to the correct comment? What you've written is completely unrelated to mine.
    - Etheryte 3y ago
      I don't think this is a very healthy approach. This is similar to saying that we shouldn't regulate what chemicals companies put into food because eventually the companies die and it won't be a problem. We want things to get better now, not in some abstract far away future.
  - Spivak 3y ago
    It's not that they shouldn't but that they won't because every government is skittish to kill their own golden calves. It's easy to penalize foreign companies because it's not your country's income that's affected.
    - hfkwer 3y ago
      So you're simply partaking in whataboutism? What does this bring to the discussion?
akie 3y ago
[flagged]
- aspyct 3y ago
  [flagged]
- okdood64 3y ago
  This is the kind of high quality comment I come to Hacker News for. Thank you for your contribution. But more seriously, please, this is not Reddit. Don't write such low effort, useless comments.
Fyrezerk 3y ago
These rulings for a company of Google's stature/importance are always funny to me. How quickly would public opinion change if Google decided to just shut off their service in the EU for a day? Monopolistic breakups that serve the public's best interest are one thing. But how many people actually care that Google might represent a monopoly? Does it actually affect people negatively if the result is a positive online user experience? The world runs on Google and forcing that to change seems like a step backwards at first glance.
- bilal4hmed 3y ago
  Also imagine breaking one so called monopoly and giving the market away to Apple This will no doubt impact things like android etc.
- hfkwer 3y ago
  > How quickly would public opinion change if Google decided to just shut off their service in the EU for a day? Always this same old tune. Do you realize how outlandish and naive it is to even suggest that? Google is fighting tooth and nail to make sure that EU laws are laxist. You know why? Because they know that they will have to comply, in the end. The market is just too big to let go of. And I don't think you're making the point you think you're making. If a single company can suspend its services and upheave the whole population's life, then it's a ripe for getting antitrust rulings.
  - Fyrezerk 3y ago
    My point, though, is where do we draw the line between antitrust enforcement because it serves the public's best interest, and enforcement that results in a net negative experience?
    - tremon 3y ago
      What makes you think that there's a single sharp line between those?
    - piaste 3y ago
stefan_ 3y ago
Is there anyone who would seriously disagree?
- activiation 3y ago
  Shareholders perhaps...
- senttoschool 3y ago
  I disagree. I think this sets a bad precedence. Who's next? Apple? Microsoft? There needs to be some formal process in which countries can vote/object to these things. Breaking up Google has ramifications for the entire world. Europe should not abuse this sort of power. I don't see Europe breaking up Luxottica, LVHM, De Beers Group.
  - hfkwer 3y ago
    Google can just break off its advertising branch in the EU and keep it integrated with the main company in the rest of the world.
  - RobotToaster 3y ago
    >Who's next? Apple? Please.
  - izacus 3y ago
    > I disagree. I think this sets a bad precedence. Who's next? Apple? Yes please. If we want healthy competitive markets, we need smaller companies that actually _COMPETE_ and their products can be mixed and matched so the customers vote with their wallets and not CEOs with their lobbying checks.
  - sensanaty 3y ago
    > Who's next? Apple? Microsoft? I genuinely can't tell if this is a shitpost or not, because yes absolutely we should target Apple and M$ as well.
- ocdtrekkie 3y ago
  Employees, shareholders, lobbyists, "researchers" who write academic "studies" favoring the company for money, nonprofit orgs which are principally funded by donations in exchange for political support, politicians whose kids work for big tech companies. (Only reason the US didn't pass regulation against tech recently is likely that Chuck Schumer's kids work for big tech and he just... never put the vote on the schedule...) The only reason Google has survived today while operating as pretty much a criminal enterprise is because they spread a massive amount of money to the pockets of influential people.
LatteLazy 3y ago
Assiming this happened, and it worked as expected, the result would be: * more ads, as competition drives down prices * worse ads as cheaper adds don't need to be as relevant but do need to be more eye catching / shocking to compete for attention. * less money to pay for the services ad revenue cover, so maybe you have to pay for gmail or get more spam etc People seem to miss that "Competition" is not an ends in itself. Neither is lower prices. Human well-being should be. Under that model, google should be a regulated monopoly with enforced higher ad prices. That would mean better services, and fewer, better ads. The only counter argument to this is that higher ad costs would mean (slightly) higher product costs. But we already live in that world...
- reaperducer 3y ago
  the result would be: more ads, as competition drives down prices worse ads as cheaper adds don't need to be as relevant but do need to be more eye catching / shocking to compete for attention. That's exactly what happened already — because of Google. Before Google AdSense, web sites used to be able to select high-quality ads from reputable advertising companies. You could get $100+ CPM for some campaigns from TribalFusion. Then AdSense appeared, and drove CPM rates into pennies, which is why web sites are so loaded with advertising now. You used to be able to make a good living running a high quality web site that served one ad per page. I know, because I did it for years. Google destroyed all of that. I won't cry if someone else does it to Google.
  - LatteLazy 3y ago
    So will having 3 different, competing, ad senses driving the price down further help? Or would driving prices UP and guaranteeing a bigger cut for sites be better? :)
seydor 3y ago
it would be better if they broke the ad exchange from the rest. a google without the ad revenue doesnt make sense
- AshamedCaptain 3y ago
  The split Google "Services" part can still contract other ad networks for revenue, including AdSense if competitive. They just won't be able to bundle.
  - shadowgovt 3y ago
    I think people underestimate how deeply intertwined Google's services and apps are. I don't think a split off "Google Services" could survive. Google's fabric is designed to run Google's apps and vice versa. You can't just cram some other company's software into Google's core fabric and you can't just run AdSense on someone else's cloud. ETA: this is partially because of historical accretion and path dependence, but also because offering services at Google scale and reliability is a legitimately hard, abstraction-breaking problem; most fabrics aren't architected for the fault-tolerance and scaling that Google's fabric is (did you really isolate concerns? Are you sure your backing-store is eventually-consistent lock-free?), and most software isn't designed to run on a fault-tolerant, high-reliability fabric (what does your UI do if half the database is missing for ten minutes? Did you break your storage down into a NoSQL database with massive data denormalization because space is almost free, or are you using a relational database with heavy cross-lookup constraints that require high availability? Are your RPCs doctored with enough data to make for useful full-service traces, or do your microservices just spit JSON at each other?). (Source: was there; I saw enough acquisitions go sideways to know how actually hard it is to reshape software from the outside world to fit Google's way of doing computing).
    - hfkwer 3y ago
      That sounds like a problem for Google to solve, not the public. "We setup our business so that it's too difficult to comply with the law" isn't an excuse in any context.
Aunche 3y ago
>EU is “concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack.” There are plenty of competitors in the ad tech space. China created TikTok. Korea created KaoKaoTalk. Even Japan created Line. Meanwhile, the EU, for all it's antitrust regulation, hasn't created anything substantial. Perhaps, it's the burdensome regulation that's the problem.
- brap 3y ago
  EU is repeatedly shooting itself in the foot. Same old story.
  - hef19898 3y ago
    So, you are saying, the most advanced tech out there, the on the EU wont have, is ad tech? Well, I don't really see the problem with that.
    - throw140623 3y ago
      [flagged]
- senttoschool 3y ago
  Well said. Europe creates a high amount of regulation. The startup industry gets completely stifled and unable to compete with US nor China. So all they do now is add more regulation.
  - emanuele232 3y ago
    profit is the most important thing in history ?
    - Aunche 3y ago
      You'd think as such if you're observing the EU. They happily encourage monopolies that they profit from like LVMH and Luxottica.
YetAnotherNick 3y ago
Google will rather split up the internet by pulling out of Europe than follow this. And isn't ads the only profitable business Google has? If they sell it, there Google search, Gmail etc couldn't exist.
- senko 3y ago
  > Google will rather split up the internet by pulling out of Europe than follow this. Citation needed.
- malermeister 3y ago
  They already have a lot of their revenue tied up in their Irish entity. An exit might not be feasible.
- vooffle 3y ago
  If Google's ad business was split from the rest, it would mean the ad business having to pay the search engine business and other Google businesses to advertise on them.
- gmerc 3y ago
  Bullshit. See Facebook in Australia or Hongkong. See every company that went into china anyway. For the EU, google leaving would be a feature.
- anhner 3y ago
  Sure, they'd rather lose 50B+ than do this...
- Gareth321 3y ago
  EMEA is Google's second largest market, and it's not even close for competition. There is no way Google would be willing to cut revenue by $90 billion annually. It would be corporate suicide. The single greatest loss event of investor capital in history. They'll comply, just like Apple will comply with the DMA. They have a fiduciary responsibility to their shareholders. Unlike the U.S., E.U lawmakers can't be bought.
nisegami 3y ago
As expected, the comments here seem generally in support of such a move. But, it is really unclear to me how such a move would improve my life or the lives of most typical users. Genuinely open to having it explained to me.
- ceejayoz 3y ago
  > The EU has previously found Google guilty of “systematically favoring” its own shopping comparison service, abusing its Android market dominance by bundling its search engine and Chrome apps, and preventing AdSense customers from accepting advertising from rival search engines. The sites you frequent are more likely to stick around if they have more revenue options, and we all benefit from competition in the search and browser markets lest we wind up with IE6 all over again.
  - nisegami 3y ago
    >and preventing AdSense customers from accepting advertising from rival search engines This one makes sense to me and is pretty tangible.
- olau 3y ago
  Online store sells great products. But nobody knows about them. Online store buys ads on Google to tell people about their products. People click the ads, and buy the products so the store can scale up and lower their per unit cost. Everyone are happy. Now fast forward a decade. Google drop their "do no evil" motto and jack up ad prices. Online store now pays 10 times as much for their ads and have to raise prices to cover the costs. Google shareholders are happy, everyone else loses - it doesn't matter if they click ads or not, the prices are higher for everyone.
  - aurareturn 3y ago
    >Now fast forward a decade. Google drop their "do no evil" motto and jack up ad prices. Online store now pays 10 times as much for their ads and have to raise prices to cover the costs. This is just not true and not how Google's ads work. Google has a bidding system. You don't have to pay their prices if your ads aren't profitable. You can pull out. You can go somewhere else. You can try other forms of marketing. You can make a better product, better landing page, better messaging so you can convert more users per click. Your company is essentially competing with other companies for the click. If the price 10x, it's because other companies are willing to pay 10x more. If other companies are willing to pay more for the ads, then your product/business/marketing isn't as good as theirs.
pmoriarty 3y ago
"The Commission is concerned that Google’s allegedly intentional conducts aimed at giving [Google’s ad exchange] AdX a competitive advantage and may have foreclosed rival ad exchanges." So the goal is for there to be more competition among advertisers? That might help ad purchasers (ie. mostly corporations), but consumers are still going to be screwed as this does nothing to stop the spying and advertising that are worst scourges that Google has imposed upon the world.
- deleted 3y ago
  [deleted]
- marginalia_nu 3y ago
  Competition is good. Fracturing the market means it's harder for any one actor to have all the information, and encourages the industry to look for other models.
  - pmoriarty 3y ago
    One actor may not get that information directly, but it will still be bought and sold, like any other commodity. Unless the information is impossible to collect in the first place, it will be collected, traded, and consolidated.
- wongarsu 3y ago
  The EU already made multiple attempts to get that under control, notably first with the Cookie Law and later with GDPR. The problem is that those have mechanism that allow the user to accept tracking, and Google does its best to get website owners to make their user agree by any means nessesary. In analytics there's some competition, and I can run self-hosted cookieless Maomo or plausibly.io if I want to get actionable insights without having the user opt-out of privacy protections. In advertising there's much less competition, and thus little in the way of privacy-friendly options. Forcing more competion might solve this.
  - pmoriarty 3y ago
    Cookies have not been necessary for user tracking for decades. Browser fingerprinting and countless other techniques can and are being used as well. The outrage over cookies is quaint, and only demonstrates that people who freak out over them don't understand modern tracking technology at all.
spreeker 3y ago
now also go after the Amazon and more important Microsoft monopolies.
nabla9 3y ago
Why Google Dominates Advertising Markets: Competition Policy Should Lean on the Principles of Financial Market Regulation https://law.stanford.edu/publications/why-google-dominates-advertising-markets/ https://law.stanford.edu/publications/why-google-dominates-a... >Approximately 86% of online display advertising space in the U.S. is boughtand sold in real-time on electronic trading venues, which the industry calls “advertising exchanges.” With intermediaries that route buy and sell orders, the structure of the ad market is similar to the structure of electronically traded financial markets. In advertising, a single company, Alphabet (“Google”), simultaneously operates the leading trading venue, as well as the leading intermediaries that buyers and sellers go through to trade. At the same time, Google itself is one of the largest sellers of ad space globally. This Article explains how Google dominates advertising markets by engaging in conduct that lawmakers prohibit in other electronic trading markets: Google’s exchange shares superior trading information and speed with the Google-owned intermediaries, Google steers buy and sell orders to its exchange and websites (Search & YouTube), and Google abuses its access to inside information. In the market for electronically traded equities, we require exchanges to provide traders with fair access to data and speed, we identify and manage intermediary conflicts of interest, and we requiretrading disclosures to help police the market. Because ads now trade on electronic trading venues too, should we borrow these three competition principles to protect the integrity of advertising? Google Is Dominating Hidden Market With No Rules https://www.nytimes.com/2021/06/21/opinion/google-monopoly-regulation-antitrust.html https://www.nytimes.com/2021/06/21/opinion/google-monopoly-r...
mdrzn 3y ago
Oooooh that'd be a spicy move. Let's go EU! Then do Luxottica and then Anheuser-Busch InBev!
gumballindie 3y ago
And microsoft is walking scot free. They can happily control operating systems, office tools, a slice of search, ides, ads within their os, are allowed to buy large game makers and soon ai. As a bare minimum they should be forced greater compatibility with running their software on linux and ideally be banned from doing ads, ai and gamedev.
- dtech 3y ago
  The EU has brought several antitrust cases against Microsoft regarding Windows and Office and succeeded, and recently fined them for anti-competitive behavior on video calling software.
- juujian 3y ago
  The EU has targeted Microsoft more than once. For example: https://en.wikipedia.org/wiki/Microsoft_Corp._v._Commission https://en.wikipedia.org/wiki/Microsoft_Corp._v._Commission
- vooffle 3y ago
  Microsoft gets a free pass because they're a 1-stop shop for governments and companies running offices. A walled garden is useful when non-technical people have to keep information somewhat securely. Google's search and ad dominance on the other hand are less convenient for governments.
- Yujf 3y ago
  I agree they should be forced to offer office on Linux. It is one of the things that really keeps Linux down for normal people. Why should they not be able to offer ads in their own products though? I don't like ads but I do not immediataly see the issue. I think they should absolutly be allowed to do AI but things like only allowing bing chat in Edge should be banned. The amount of pushing they do is clearly not OK. And same for google they should not be allowed to push chrome on you when you go to gmail or google in a non chrome browser
  - hardware2win 3y ago
    >I agree they should be forced to offer office on Linux They created web version
nologic01 3y ago
Adtech (helping sellers surface advertising to buyers) should be cleanly split from tech provision (selling IT products and services to buyers). Further, the adtech business should be highly regulated, with the collection of data and profiling of individuals based on online behavior ideally prohibited. Digital ads are probably unavoidable, but should really just revert to be like the TV and newspaper ads of old. Surveillance capitalism cannot be reformed, it must be banned. The "market" has malfunctioned big time and produced a monster. There is nothing workable about the status quo. It holds back potentially tremendous potential and value, even just using conventional, monetary, yardsticks. There is no way you can rollout next-gen "AI" and deeply impactful innovations around e.g., finance while the well is poisoned by this commingling of unsavory business models with legitimate pursuits. Tweedledum and Tweedledee until regulators, politicians but also economic actors and the public wake up and smell the coffee.
endisneigh 3y ago
break every company up! Each "bet" in Alphabet needs to be broken. Each business unit within Google needs to be broken. Same with Apple. Break that up to between services and hardware. Force them to open up their new silicon. Why can't other companies use the H1 or H2 chips for their headphones? why are we letting Apple have the competitive advantage? Open up the App Store and force new payment methods. Microsoft also needs to be broken up. force them to sell their OpenAI stake and separate Office, Windows, Azure and Xbox. Once we're done with that we need to break up Adobe (artistic tools and stock assets need to be separate), Uber (Eats and Driving again need be separate) and others as well. moving away from tech, we need to break up these luxury conglomerates to spur more innovation in the fashion industry as well. same for food conglomerates such as Nestle and consumer goods like Unilever. we've only begun the Great Breaking. and while we're at it, we need to put a end to the madness of corporate greed and institute strict profit limits and tax the rest. when you really use your big brain - you'll realize nothing is more anti-competitive than excessive profits! money is power and profit is money, and no company need have power similar to the government. those profits are ultimately what are used to acquire more companies and begin their treacherous anti-competitive practices. break the companies up and lock up the execs for being complicit in literal criminal activity. you show me a BigCo with profit and I'll show you criminal activity.
- aurareturn 3y ago
  Break them up. Give them to the poor. /sarcasm
- pb7 3y ago
  Imprison everyone while we're at it! No freedoms for anyone!
- jefftk 3y ago
  I can't tell whether you're being sarcastic, fyi
  - nologic01 3y ago
    its obviously sarcastic. some people have "forgotten" what healthy competition and competent regulation of markets means.
samwillis 3y ago
Google operates an exchange for a digital asset, is a major vendor/trader of said asset on that exchange and operates an algorithmic trading platform to enable people to buy and sell on that exchange. On top of that the algorithmic trades are a "black box" with no audit trail, and no public insight into how it operates. If that sounds familiar, think illegal crypto exchanges... Obviously "ads" are not "securities", but when you take that along with the monopolistic position Google have between businesses and consumers online, the status quo is not sustainable. The EU is absolutely right to suggest breaking Google up, it should not be allowed to operate as an exchange, broker-dealer, and clearing agency. Google have systematically taken control away from advertisers over the last ten years, it used to be that we would have deep control and insight into our campaigns. Now, it's all purely algorithmic, you put money in, and they promise to send you customers, with very little control from you. Something important I want to draw attention to though, there is obviously much to complain about with Google tracking visitors/consumers, but their tracking and "spying" on businesses using the platform is also incredibly deep. In order to advertise effectively with Google Ads, you now need to provide them with full sales figures from your checkout process. They want to feed the "algorithm" with your revenue numbers, not just from sales resulting from ad clicks, but all your sales. Google have amassed the most incredible insight into any and all businesses online. They know exactly how much you are making, how competitive you are compared to your competition, and how much they can squeeze out of you. They are in the position to design the "algorithm" to maximise their take as they can see your figures. So to finish, they operate a monopolistic exchange, as broker-dealer, clearing agency, and algorithmic trader, at the same time as having full visibility of your books. To me that should clearly be illegal.
- Mistletoe 3y ago
  Crypto is much more transparent than Google Ads due to the fact that most of them at least have a public blockchain. Is there any way to know if Google Ads purchasing isn’t a giant Ponzi of ads? Is there any way to verify they aren’t bidding up the auctions and that any of it is based on reality and competition at all? Crypto also has price discovery through shorting and selling. How would one short a Google Ad or sell one in their marketplace? There’s only one supplier and it’s “trust me bro” for the price discovery. I think it will be very funny if the past decade or so was not only based on a foundation of sand caused by zero interest rates, but also an ad ponzi from the tech giants. We sent our best and brightest not to the moon or to cure cancer, but to find new ways to keep that ad ponzi going. https://www.adexchanger.com/commerce/meet-performance-max-the-blackest-black-box-of-all-google-ad-products/ https://www.adexchanger.com/commerce/meet-performance-max-th...
sylware 3y ago
... and regulate all services which can be done for noscript/basic (x)html browsers to be available. Regulation: the big must interoperate with the small, and stable in time.
s1k3s 3y ago
> The Commission preliminarily finds that, in this particular case, a behavioural remedy is likely to be ineffective to prevent the risk that Google continues such self-preferencing conducts or engages in new ones. Google is active on both sides of the market with its publisher ad server and with its ad buying tools and holds a dominant position on both ends. Furthermore, it operates the largest ad exchange. This leads to a situation of inherent conflicts of interest for Google. The Commission's preliminary view is therefore that only the mandatory divestment by Google of part of its services would address its competition concerns. https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3207 https://ec.europa.eu/commission/presscorner/detail/en/ip_23_... -- How would this work, in practice?
- chx 3y ago
  To quote > Ad exchanges are driven by a simple demand and supply mechanism. Publishers want to sell ad space on their website to the highest bidder and advertisers want to buy ad units that provide good visibility. This is where an ad exchange comes into the picture. > This digital marketplace is part of the programmatic advertising ecosystem and is powered by real-time bidding (RTB) technology. It connects advertisers on a demand-side platform (DSP) with publishers on a supply-side platform (SSP). Google purchased DoubleClick in 2008 which is the largest such. The problem here is, the SSP is also Google -- Google Search most importantly, YouTube as well. There is more! They also run an ad server. To quote again > an ad server is to ads what WordPress is to content So an advertiser loads their ad into Google ad server for serving the ad then participates at a Google exchange to bid on the price of the ad. This gives Google an astounding amount of insight, fairly similar to insider trading which absolutely should not be allowed. So, they could be forced to spin out the ad server and the ad exchange.
Garvi 3y ago
In my opinion the main reason the Soviet economy collapsed (apart from outside pressure), was the state owned sector wide monopolies. It is also in the webs own nature to nurture monopolies for two seemingly contradictory reasons: 1.) Switching to a competitor is just a few clicks away. Moving everyone to the one that provides the most for free (dumping laws ignored as per usual). 2.) Switching to a competitor is hard, because all my social contacts use :thisService:. (now that the competition is dead, you turn the screw on the user: enact subscriptions, censor information, selling of private data, increase ad noise, etc.). Not breaking up monopolies will inevitably lead to the same result - people will be exploited to the point of real harm and will eventually revolt.
- 0xDEF 3y ago
  >In my opinion the main reason the Soviet economy collapsed (apart from outside pressure), was the state owned sector wide monopolies Interesting how China's model with multiple state owned entities competing against each other compares with the Soviet model. However China is practically a capitalist country now. Chinese SOEs make up less of the Chinese GDP than Italian SOEs make up in the Italian GDP.
trapped 3y ago
If forced to breaking up Google should stop giving free services in EU including OS, Browser, Map, Search and any other free service. And charge EU users for each of these services which are top or only one in respective categories. These services are free due to Ad business which is best and can make money to fund other free services. Let EU pay for crappy services built by their own mediocre companies like Nokia which can't compete in market so force regulations. What is EU doing to to curb European monopolies ? Oh wait there are not many.... cause they can't innovate and compete. Easy to be complain than build something to compete.
- aaomidi 3y ago
  Making shit up, and getting angry about it is the internet way I guess. Anyway https://twitter.com/clothildegouj/status/1668561531435470850 https://twitter.com/clothildegouj/status/1668561531435470850 European companies are also going to be regulated. They don’t have many monopolies because they have a completely different way of approaching business and their position in society. Also when it happens, they get split apart way way before you hear about it.
- hnthrowaway0315 3y ago
  It's going to be good for EU in the long-term TBH. Please charge $$ for EU users.
screye 3y ago
I wonder if the internet is naturally predisposed towards monopolies, or the culture of tech companies predisposes them to monopolistic behavior. Let's look at similar industries. Better integration and data allows you to sell your product better, and more sales allows for more data and $$ needed for integration. No reason this vicious cycle only applies to internet companies. Why didn't Ford buy up petrol stations in the US which could only serve Ford cars ? Market consolidation would let them negotiate a lower petrol price for all Ford cars and customers would struggle to switch without the same petrol-network or low-prices. Tesla is clearly demonstrating this as a car company with tech culture. They tried a 'super charger' monopoly thing, were nearly successful, but the presence of existing competitors made it difficult to pull it off. But Ford at its peak would've likely gotten away with it. Tech companies are in an extortionate relationship, and the scale imbalance between their average customer (a 10 people mini-shop) and Google is so massive, that Google can afford to bleed many customers in the effort to find the maximally aggressive deal in the negotiation. How much can we get away with before we start bleeding customers, is a question that Google likely knows the answer to better than anymore. Which brings me to why I think tech heads towards monopolies. It is "competence at scale". Every monopoly can expand vertically or extort data from their customers. But scaling vertically means more employees, more communication friction and inevitable mediocrity through IBM-ization of your company. More data is also not useful unless you can actually do anything useful with it. That's where tech comes in. Tech companies can scale up vertically with products without needing as much human overhead, reducing the aforementioned friction. And most importantly, tech companies figured out how to actually make use of the data. It also helps that tech data collection usually involves clicking a checkbox and not sending thousands of foot-soldiers to take industry wide sensor measurements. I came full circle as I wrote this comment, because I've just had an epiphany : "what is a tech company"? Zillow, WeWork, Doordash etc. are on their surface, a light digital layer on a traditional company. I always wondered why they were considered tech companies. Target has a website and so does my landlord, but they aren't tech companies. In fact, the exact traits that lead to a culture obsessed with becoming a natural monopoly that define a tech company. A tech company has nothing to do with software, other than the fact that it has to do with data. The cultural obsession with finding efficiencies vertically (control e2e) and horizontally (scale), inevitably turning into a gatekeeping monopoly is the core characteristic that defines a tech company. Both require a ton of easy data, and only that, is why tech companies write software. Software companies aren't always tech companies. But tech companies are forced to be Software companies. I've just realized that WeWork was in fact a legitimate tech company because it was a landlord obsessed with vertical and horizontal efficiencies. That's it.
scotty79 3y ago
Recently I learned that single brand can be divided between multiple owners and as they compete the brand competes with itself. I heard of an example of fast food restaurant brand for which that was the case. Maybe we should do that more often when any brand grows too big?
amai 3y ago
Too late, too little. Google must be split up at least into search, YouTube, android, ads, map and news. That would help foster some competition in these markets.

Before anyone makes the argument that the EU should have no jurisdiction over an American entity, please remember that Google sells its services in Europe. It's well within the jurisdiction of the EU to regulate how anyone does business here. Google Ireland alone had a 50B euro turnover. The breaking up of monopolies used to be in the toolbox of American antitrust policies, back when America enforced antitrust legislation on its own companies.

1over137 3y ago
>back when America enforced antitrust legislation on its own companies A great book about that era is "Goliath" by Matt Stoller.
panragon 3y ago
>Google Ireland alone had a 50B euro turnover. Not to discredit the rest of what you're saying, because it is true the EU has jurisdiction and that anti-trust is a lost art in many places in the world. Still, saying Google Ireland 'alone' is a bit funny when Google (like all multinationals) is known to take advantage of Ireland's tax laws to funnel as much of their EU business through. Whatever money Google is making in Ireland isn't just what they're making from the Irish market, it's also from whatever they're making everywhere else in the EU who's origins are ambiguous enough to not be attached to any single country.
- Detrytus 3y ago
  Yep, and that's how you get Ireland's GDP per capita artificially inflated to $114k, when in reality it should be maybe a third of that...
  - bee_rider 3y ago
    Eh, we can’t really complain. The international capitalist system owes Ireland a bit more; its predecessor, colonialism, screwed Ireland over for generations.
    - Detrytus 3y ago
      But the point is that Ireland does not really benefit from this money - it is only an accounting trick. Google funnels money through Ireland, but does not employ many people in Ireland, and does not pay much taxes there. In the end, the living standard of typical Irishman is closer to countries with $40-45k GDP, such as Italy or France, than to countries with $100k GDP, such as Norway or Switzerland.
      - inamorty 3y ago
        This is not true. If anything Ireland is too reliant on a few multi-national corporations. In 2022, corporate tax was the second highest income stream for the state: https://www.gov.ie/en/press-release/4992b-exchequer-surplus-of-5-billion-in-2022-corporation-tax-surpasses-vat-ministers-mcgrath-donohoe/ https://www.gov.ie/en/press-release/4992b-exchequer-surplus-...
      - resolutebat 3y ago
        This article suggests Google employed over 8,000 people in Ireland in 2018, and it's quite likely that number has grown since. https://9to5google.com/2020/03/02/google-dublin-coronavirus/ https://9to5google.com/2020/03/02/google-dublin-coronavirus/
        Detrytus 3y ago
        Which means one employee per $6 millions of revenue. Which is exactly what I’m talking about: their actual presence in Ireland is much smaller than you would expect from revenue number alone, which again supports my claim about “accounting trick”
      - toast0 3y ago
- heywhatupboys 3y ago
  well, that still means they have to follow Irish law. Just like shipping companies register their ships in other countries, that means they have to follow their laws too.
  - Detrytus 3y ago
    yes, but that's not the point of GP comment. Saying "Ireland alone has $50B turnover" might make someone think: "Wow, if they make so much money from such a small country, then how much do they make in the entire Europe?". And the answer to that is: $50B. There's not a single euro-cent is earned in Europe that does not go through Ireland.
- madeofpalk 3y ago
  You can't have it both ways though. You don't get to take advantage of Irish law to reduce your tax/costs, but then also say that Ireland (and the EU) has no jurisdiction over you.
  - thfuran 3y ago
    But that's not the claim being made.
    - throwaway462910 3y ago
      It's the claim being pre-emptively argued against though
      - bbor 3y ago
        Not sure there’s anyone in here arguing for google. Poor little google, being bullied by all us hackers…
        sensanaty 3y ago
        You should check out the thread, lots of people throwing themselves in front of the firing line because I guess they think that messing with Google will somehow translate to messing with their own startups or whatever.
        panragon 3y ago
        Or they just work for Google, of which there's a reasonable amount of members here, but yeah.
      - thfuran 3y ago
        The comment they replied to already explicitly stated that the EU has jurisdiction. They're not pre-empting anything.
      - panragon 3y ago
fredgrott 3y ago
equally good and bad as the fractured tax policies of Europe is what allows Gogle to avoid US corporation taxation.
- roomey 3y ago
  I think it is fairer to say US tax law allows Google to avoid US corporation tax no?
LatteLazy 3y ago
A better argument is simply that the US routinely (and selectively) enforces its rules well beyond its borders. So why shouldn't anyone else with the clout needed...
- pwb25 3y ago
  Can't wait for the chinese or indian SEC to start suing US nationals for different exotic financial wrongdoings on some half hidden rule
  - LatteLazy 3y ago
    It is a bad approach, but it's a bit of a prisoner's dilemma: no nation will be the only one NOT to pull BS like that...
  - dtech 3y ago
    You've slipped down quite the slope to go from antitrust of companies operating in the jurisdiction to foreign natural persons.
    - pwb25 3y ago
      Not really. When did the Chinese CFTC do something like this to any american? https://en.wikipedia.org/wiki/2010_flash_crash#Evidence_of_market_manipulation_and_arrest https://en.wikipedia.org/wiki/2010_flash_crash#Evidence_of_m...
      - LatteLazy 3y ago
        Just for balance, the US had Canada arrest a chinese national who had never been to the USA, for doing business with Iran (and then a bunch of other weird charges) https://en.wikipedia.org/wiki/Meng_Wanzhou https://en.wikipedia.org/wiki/Meng_Wanzhou China then "co-incidentally" arrested 2 Canadians. The whole thing is a shit show and it would be better for everyone if countries were more reasonable and agreed to avoid a "race to the bottom"
WastingMyTime89 3y ago
> The breaking up of monopolies used to be in the toolbox of American antitrust policies, back when America enforced antitrust legislation on its own companies. The US Justice Department sued Google in 2020 and is asking for pretty much the same disinvestment for pretty much the same reasons. The EU is trailing the US by two years here. I'm eagerly awaiting the trove of patriotic comments which will undoubtedly follow the posting of such an article and will most likely entirely miss the point as usual.
- Gareth321 3y ago
  > The US Justice Department sued Google in 2020 and is asking for pretty much the same disinvestment for pretty much the same reasons. While true, 2.5 years later there is still no action. In that same time period, the E.U. released the largest anti-monopoly technology law in its history, the Digital Markets Act. This will take effect near the end of the year and impact all major tech companies. I think it's clear that U.S. antitrust is ineffective at present.
  - bbor 3y ago
    They’re advancing in spurts - a few events this year. Remember when the justice department suggested that google sell its buy side advertising unit, and somehow “what if we just spun it off into its own Bet?” got proposed. Good times. Perhaps the most brazen “FU” from google lawyers in the history of the company
Mountain_Skies 3y ago
I used to believe that company breakups should happen automatically when they reach 1% of the country's GDP. There are lots of ways companies could avoid having the government decide how to break them up such as issuing dividends instead of hording cash, spinning off non-core businesses, setting up independent IP companies that would license back IP to the core company (and as an indpendent company, be required to license to anyone else at similar rates), and things like that. The problem comes in if one country follows this paradigm but then you have a company like Samsung that's over 20% of their host country's GDP and there's no appetite in the host country to break them up. How can your domestic companies that are limited in size compete with those of other countries with no limit on their size?
- gylterud 3y ago
  How about an automatic nationalisation in stead? Where you take companies which have grown too big out of the private ownership’s hands.
  - delfinom 3y ago
    Too dangerous unless it's a service that should be a vital government service. You do not want your government to basically have a permanent monopoly on everything. This just gives power to authoritarian to rise.
    - hef19898 3y ago
      Democracy allows authrotarians to rise in and of itself. Recent ones include Orban, Erdogan and Trump. Historical ones include, yes I know, Mussolini and Hitler.
  - toyg 3y ago
    This is Hacker News, you can't say the N word here.
    - deleted 3y ago
      [deleted]
donatj 3y ago
> breaking up of monopolies What’s the monopoly here? There are tons of successful ad companies.
- shadowgovt 3y ago
  You've hit the nail on the head regarding the difference between the EU concept of antitrust and the American one. EU antitrust law is grounded in harm to companies. If there are many companies, but one has sewn up the market so strongly that others can't really have a chance to prosper, the EU will step in. American antitrust law is grounded in harm to consumers. The US regulators won't go after a successful ad company because other ad companies say it's too hard to compete with them; it'll go after them if consumers say "We don't have any choice but to do business with X, and X's prices are too high / X is too exclusive / X is only doing business with us in market sector A if we agree to use them also for market sector B." That additional bar to regulation means the EU may very well have cause to act before the US does if Google is big enough to muscle around other ad agencies and set the terms by which they can exist, even if they do exist.
- xps 3y ago
  Please name one credible Google Ads competitor.
  - knowriju 3y ago
    Err... Meta / Microsoft /Yahoo ? Also depending on how you look at it, you can buy ads to showcase your business in Amazon, Apple as well.
- bbor 3y ago
  I recommend you look into it a bit more if you haven’t - there are buyside and sell side competitors, but google massively controls both markets, which it uses to grow both businesses. For example, the justice department found slides from a project that favored its buyside customers when running supposedly impartial auctions on the sell side - in layman’s terms, brazenly fucking over their competitors. Allegedly. The best part is of course that the google engineers named it “project bernanke” after the Fed chairman, since they thought of it like QE, I.e. “giving out free money” to people who used their buyside products. I’m still not sure if that was a criticism of QE or if they’re honestly that submerged in the Google Kool-Aid… All of that is small potatoes to the main way in which google is a monopoly though: they run the only ad exchange. Trust me, it helps. Facebook spent many billions trying to stand up a competitor and ultimately gave up, which should tell you how valuable that privilege is
pwb25 3y ago
and american government agencies try to rule over all countries or citizens all the time too. Or try to make them follow their anti piracy laws
spacebanana7 3y ago
There are real questions about how much authority the EU has over an American entity. Can the EU only regulate activities in the EU or does it have global jurisdiction? On one hand, if Google simply restructured, spun off or sold its EU ad business the competitive landscape wouldn't change that much. I'm not sure whether a new European competitor could ever become a peer to Google if it could only compete in the EU market because of the network effects in the ad business. Alternatively, the EU having global jurisdiction would have even bigger issue. With that precedent, could Japan or Australia regulate European businesses? Also how would the EU enforce rules outside of its geography? How complaint would the US court system be in enforcing European decisions?
- Longhanks 3y ago
  What makes you think the EU would have the slightest jurisdiction at all over any entity outside of its member states? The only reason they speak about Google is because Google does business in the EU.
- piva00 3y ago
  > Alternatively, the EU having global jurisdiction would have even bigger issue. With that precedent, could Japan or Australia regulate European businesses? That's already what the USA does to global companies operating inside the US. That's exactly how Cuba has been under a blockade from the US, for example...
  - spacebanana7 3y ago
    Sanctions are different from antitrust. With sanctions the US can declare that third parties must choose between doing business with the US and Cuba / ZTE. Because of it's large economy the US would be confident that most of those parties would choose to choose the US over the company / small country. Antitrust enforcement is many ways more difficult than sanctions enforcement because third parties must be compelled in 'how' rather than 'whether' they do business with a company. Even the US would've struggled to break up ZTE / Huawei etc into smaller companies across every jurisdiction for antitrust. Doing so in China would've obviously been impossible but even enforcing this in the Gulf States & South Korea would've stretched the limits of US power.
golemotron 3y ago
I'll applaud the first large US company that leaves the EU market entirely and makes a claim of non-jurisdiction. It's overdue. In fact, I don't think they have to go that far. Other countries are free to block internet services or sanction their own citizens for using them. It should not follow that placing a service on the web makes you subject to the jurisdiction of anyone who chooses to use it.
- bantunes 3y ago
  Why should it not? If you're providing a service (presumably for profit), shouldn't you be bound by rules other commercial service providers have to follow in that jurisdiction as well? If not, you'd be at a massive advantage.
  - golemotron 3y ago
    It's not being provided in that jurisdiction. If you are hosted/domiciled in a country foreign users are entering another jurisdiction when they access the service.
    - bantunes 3y ago
      If you're taking money in that jurisdiction, why is it not "being provided"?
      - golemotron 3y ago
        Another way to look at it is that customer is sending money to another jurisdiction. Countries can and do pass laws about whom their citizens can trade with. It seems like that is a better route than inventing jurisdiction over foreign companies.
        bantunes 3y ago
        Again, if you "pass laws about whom their citizens can trade with" isn't that having jurisdiction over a foreign company?

senttoschool 3y ago

Should the US break up LVMH given how dominant they are in luxury goods?

hfkwer 3y ago
Can you give a reasonable argument why they shouldn't? I'm not sure you're making the point you think you're making.
- senttoschool 3y ago
  They think that Google doesn't have enough competition right? So they want to regulate their markets. But as we know, Google's entire business is hugely threatened by LLMs. Over time, all companies die and get outcompeted. Google won't be any different. You don't have to regulate.
  - hfkwer 3y ago
    Are you replying to the correct comment? What you've written is completely unrelated to mine.
  - Etheryte 3y ago
    I don't think this is a very healthy approach. This is similar to saying that we shouldn't regulate what chemicals companies put into food because eventually the companies die and it won't be a problem. We want things to get better now, not in some abstract far away future.
- Spivak 3y ago
  It's not that they shouldn't but that they won't because every government is skittish to kill their own golden calves. It's easy to penalize foreign companies because it's not your country's income that's affected.
  - hfkwer 3y ago
    So you're simply partaking in whataboutism? What does this bring to the discussion?

akie 3y ago

[flagged]

aspyct 3y ago
[flagged]
okdood64 3y ago
This is the kind of high quality comment I come to Hacker News for. Thank you for your contribution. But more seriously, please, this is not Reddit. Don't write such low effort, useless comments.

Fyrezerk 3y ago

These rulings for a company of Google's stature/importance are always funny to me. How quickly would public opinion change if Google decided to just shut off their service in the EU for a day? Monopolistic breakups that serve the public's best interest are one thing. But how many people actually care that Google might represent a monopoly? Does it actually affect people negatively if the result is a positive online user experience? The world runs on Google and forcing that to change seems like a step backwards at first glance.

bilal4hmed 3y ago
Also imagine breaking one so called monopoly and giving the market away to Apple This will no doubt impact things like android etc.
hfkwer 3y ago
> How quickly would public opinion change if Google decided to just shut off their service in the EU for a day? Always this same old tune. Do you realize how outlandish and naive it is to even suggest that? Google is fighting tooth and nail to make sure that EU laws are laxist. You know why? Because they know that they will have to comply, in the end. The market is just too big to let go of. And I don't think you're making the point you think you're making. If a single company can suspend its services and upheave the whole population's life, then it's a ripe for getting antitrust rulings.
- Fyrezerk 3y ago
  My point, though, is where do we draw the line between antitrust enforcement because it serves the public's best interest, and enforcement that results in a net negative experience?
  - tremon 3y ago
    What makes you think that there's a single sharp line between those?
  - piaste 3y ago

stefan_ 3y ago

Is there anyone who would seriously disagree?

activiation 3y ago
Shareholders perhaps...
senttoschool 3y ago
I disagree. I think this sets a bad precedence. Who's next? Apple? Microsoft? There needs to be some formal process in which countries can vote/object to these things. Breaking up Google has ramifications for the entire world. Europe should not abuse this sort of power. I don't see Europe breaking up Luxottica, LVHM, De Beers Group.
- hfkwer 3y ago
  Google can just break off its advertising branch in the EU and keep it integrated with the main company in the rest of the world.
- RobotToaster 3y ago
  >Who's next? Apple? Please.
- izacus 3y ago
  > I disagree. I think this sets a bad precedence. Who's next? Apple? Yes please. If we want healthy competitive markets, we need smaller companies that actually _COMPETE_ and their products can be mixed and matched so the customers vote with their wallets and not CEOs with their lobbying checks.
- sensanaty 3y ago
  > Who's next? Apple? Microsoft? I genuinely can't tell if this is a shitpost or not, because yes absolutely we should target Apple and M$ as well.
ocdtrekkie 3y ago
Employees, shareholders, lobbyists, "researchers" who write academic "studies" favoring the company for money, nonprofit orgs which are principally funded by donations in exchange for political support, politicians whose kids work for big tech companies. (Only reason the US didn't pass regulation against tech recently is likely that Chuck Schumer's kids work for big tech and he just... never put the vote on the schedule...) The only reason Google has survived today while operating as pretty much a criminal enterprise is because they spread a massive amount of money to the pockets of influential people.

LatteLazy 3y ago

Assiming this happened, and it worked as expected, the result would be: * more ads, as competition drives down prices * worse ads as cheaper adds don't need to be as relevant but do need to be more eye catching / shocking to compete for attention. * less money to pay for the services ad revenue cover, so maybe you have to pay for gmail or get more spam etc People seem to miss that "Competition" is not an ends in itself. Neither is lower prices. Human well-being should be. Under that model, google should be a regulated monopoly with enforced higher ad prices. That would mean better services, and fewer, better ads. The only counter argument to this is that higher ad costs would mean (slightly) higher product costs. But we already live in that world...

reaperducer 3y ago
the result would be: more ads, as competition drives down prices worse ads as cheaper adds don't need to be as relevant but do need to be more eye catching / shocking to compete for attention. That's exactly what happened already — because of Google. Before Google AdSense, web sites used to be able to select high-quality ads from reputable advertising companies. You could get $100+ CPM for some campaigns from TribalFusion. Then AdSense appeared, and drove CPM rates into pennies, which is why web sites are so loaded with advertising now. You used to be able to make a good living running a high quality web site that served one ad per page. I know, because I did it for years. Google destroyed all of that. I won't cry if someone else does it to Google.
- LatteLazy 3y ago
  So will having 3 different, competing, ad senses driving the price down further help? Or would driving prices UP and guaranteeing a bigger cut for sites be better? :)

seydor 3y ago

it would be better if they broke the ad exchange from the rest. a google without the ad revenue doesnt make sense

AshamedCaptain 3y ago
The split Google "Services" part can still contract other ad networks for revenue, including AdSense if competitive. They just won't be able to bundle.
- shadowgovt 3y ago
  I think people underestimate how deeply intertwined Google's services and apps are. I don't think a split off "Google Services" could survive. Google's fabric is designed to run Google's apps and vice versa. You can't just cram some other company's software into Google's core fabric and you can't just run AdSense on someone else's cloud. ETA: this is partially because of historical accretion and path dependence, but also because offering services at Google scale and reliability is a legitimately hard, abstraction-breaking problem; most fabrics aren't architected for the fault-tolerance and scaling that Google's fabric is (did you really isolate concerns? Are you sure your backing-store is eventually-consistent lock-free?), and most software isn't designed to run on a fault-tolerant, high-reliability fabric (what does your UI do if half the database is missing for ten minutes? Did you break your storage down into a NoSQL database with massive data denormalization because space is almost free, or are you using a relational database with heavy cross-lookup constraints that require high availability? Are your RPCs doctored with enough data to make for useful full-service traces, or do your microservices just spit JSON at each other?). (Source: was there; I saw enough acquisitions go sideways to know how actually hard it is to reshape software from the outside world to fit Google's way of doing computing).
  - hfkwer 3y ago
    That sounds like a problem for Google to solve, not the public. "We setup our business so that it's too difficult to comply with the law" isn't an excuse in any context.

Aunche 3y ago

>EU is “concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack.” There are plenty of competitors in the ad tech space. China created TikTok. Korea created KaoKaoTalk. Even Japan created Line. Meanwhile, the EU, for all it's antitrust regulation, hasn't created anything substantial. Perhaps, it's the burdensome regulation that's the problem.

brap 3y ago
EU is repeatedly shooting itself in the foot. Same old story.
- hef19898 3y ago
  So, you are saying, the most advanced tech out there, the on the EU wont have, is ad tech? Well, I don't really see the problem with that.
  - throw140623 3y ago
    [flagged]
senttoschool 3y ago
Well said. Europe creates a high amount of regulation. The startup industry gets completely stifled and unable to compete with US nor China. So all they do now is add more regulation.
- emanuele232 3y ago
  profit is the most important thing in history ?
  - Aunche 3y ago
    You'd think as such if you're observing the EU. They happily encourage monopolies that they profit from like LVMH and Luxottica.

YetAnotherNick 3y ago

Google will rather split up the internet by pulling out of Europe than follow this. And isn't ads the only profitable business Google has? If they sell it, there Google search, Gmail etc couldn't exist.

senko 3y ago
> Google will rather split up the internet by pulling out of Europe than follow this. Citation needed.
malermeister 3y ago
They already have a lot of their revenue tied up in their Irish entity. An exit might not be feasible.
vooffle 3y ago
If Google's ad business was split from the rest, it would mean the ad business having to pay the search engine business and other Google businesses to advertise on them.
gmerc 3y ago
Bullshit. See Facebook in Australia or Hongkong. See every company that went into china anyway. For the EU, google leaving would be a feature.
anhner 3y ago
Sure, they'd rather lose 50B+ than do this...
Gareth321 3y ago
EMEA is Google's second largest market, and it's not even close for competition. There is no way Google would be willing to cut revenue by $90 billion annually. It would be corporate suicide. The single greatest loss event of investor capital in history. They'll comply, just like Apple will comply with the DMA. They have a fiduciary responsibility to their shareholders. Unlike the U.S., E.U lawmakers can't be bought.

nisegami 3y ago

As expected, the comments here seem generally in support of such a move. But, it is really unclear to me how such a move would improve my life or the lives of most typical users. Genuinely open to having it explained to me.

ceejayoz 3y ago
> The EU has previously found Google guilty of “systematically favoring” its own shopping comparison service, abusing its Android market dominance by bundling its search engine and Chrome apps, and preventing AdSense customers from accepting advertising from rival search engines. The sites you frequent are more likely to stick around if they have more revenue options, and we all benefit from competition in the search and browser markets lest we wind up with IE6 all over again.
- nisegami 3y ago
  >and preventing AdSense customers from accepting advertising from rival search engines This one makes sense to me and is pretty tangible.
olau 3y ago
Online store sells great products. But nobody knows about them. Online store buys ads on Google to tell people about their products. People click the ads, and buy the products so the store can scale up and lower their per unit cost. Everyone are happy. Now fast forward a decade. Google drop their "do no evil" motto and jack up ad prices. Online store now pays 10 times as much for their ads and have to raise prices to cover the costs. Google shareholders are happy, everyone else loses - it doesn't matter if they click ads or not, the prices are higher for everyone.
- aurareturn 3y ago
  >Now fast forward a decade. Google drop their "do no evil" motto and jack up ad prices. Online store now pays 10 times as much for their ads and have to raise prices to cover the costs. This is just not true and not how Google's ads work. Google has a bidding system. You don't have to pay their prices if your ads aren't profitable. You can pull out. You can go somewhere else. You can try other forms of marketing. You can make a better product, better landing page, better messaging so you can convert more users per click. Your company is essentially competing with other companies for the click. If the price 10x, it's because other companies are willing to pay 10x more. If other companies are willing to pay more for the ads, then your product/business/marketing isn't as good as theirs.

pmoriarty 3y ago

"The Commission is concerned that Google’s allegedly intentional conducts aimed at giving [Google’s ad exchange] AdX a competitive advantage and may have foreclosed rival ad exchanges." So the goal is for there to be more competition among advertisers? That might help ad purchasers (ie. mostly corporations), but consumers are still going to be screwed as this does nothing to stop the spying and advertising that are worst scourges that Google has imposed upon the world.

deleted 3y ago
[deleted]
marginalia_nu 3y ago
Competition is good. Fracturing the market means it's harder for any one actor to have all the information, and encourages the industry to look for other models.
- pmoriarty 3y ago
  One actor may not get that information directly, but it will still be bought and sold, like any other commodity. Unless the information is impossible to collect in the first place, it will be collected, traded, and consolidated.
wongarsu 3y ago
The EU already made multiple attempts to get that under control, notably first with the Cookie Law and later with GDPR. The problem is that those have mechanism that allow the user to accept tracking, and Google does its best to get website owners to make their user agree by any means nessesary. In analytics there's some competition, and I can run self-hosted cookieless Maomo or plausibly.io if I want to get actionable insights without having the user opt-out of privacy protections. In advertising there's much less competition, and thus little in the way of privacy-friendly options. Forcing more competion might solve this.
- pmoriarty 3y ago
  Cookies have not been necessary for user tracking for decades. Browser fingerprinting and countless other techniques can and are being used as well. The outrage over cookies is quaint, and only demonstrates that people who freak out over them don't understand modern tracking technology at all.

spreeker 3y ago

now also go after the Amazon and more important Microsoft monopolies.

nabla9 3y ago

Why Google Dominates Advertising Markets: Competition Policy Should Lean on the Principles of Financial Market Regulation https://law.stanford.edu/publications/why-google-dominates-advertising-markets/ https://law.stanford.edu/publications/why-google-dominates-a... >Approximately 86% of online display advertising space in the U.S. is boughtand sold in real-time on electronic trading venues, which the industry calls “advertising exchanges.” With intermediaries that route buy and sell orders, the structure of the ad market is similar to the structure of electronically traded financial markets. In advertising, a single company, Alphabet (“Google”), simultaneously operates the leading trading venue, as well as the leading intermediaries that buyers and sellers go through to trade. At the same time, Google itself is one of the largest sellers of ad space globally. This Article explains how Google dominates advertising markets by engaging in conduct that lawmakers prohibit in other electronic trading markets: Google’s exchange shares superior trading information and speed with the Google-owned intermediaries, Google steers buy and sell orders to its exchange and websites (Search & YouTube), and Google abuses its access to inside information. In the market for electronically traded equities, we require exchanges to provide traders with fair access to data and speed, we identify and manage intermediary conflicts of interest, and we requiretrading disclosures to help police the market. Because ads now trade on electronic trading venues too, should we borrow these three competition principles to protect the integrity of advertising? Google Is Dominating Hidden Market With No Rules https://www.nytimes.com/2021/06/21/opinion/google-monopoly-regulation-antitrust.html https://www.nytimes.com/2021/06/21/opinion/google-monopoly-r...

mdrzn 3y ago

Oooooh that'd be a spicy move. Let's go EU! Then do Luxottica and then Anheuser-Busch InBev!

gumballindie 3y ago

And microsoft is walking scot free. They can happily control operating systems, office tools, a slice of search, ides, ads within their os, are allowed to buy large game makers and soon ai. As a bare minimum they should be forced greater compatibility with running their software on linux and ideally be banned from doing ads, ai and gamedev.

dtech 3y ago
The EU has brought several antitrust cases against Microsoft regarding Windows and Office and succeeded, and recently fined them for anti-competitive behavior on video calling software.
juujian 3y ago
The EU has targeted Microsoft more than once. For example: https://en.wikipedia.org/wiki/Microsoft_Corp._v._Commission https://en.wikipedia.org/wiki/Microsoft_Corp._v._Commission
vooffle 3y ago
Microsoft gets a free pass because they're a 1-stop shop for governments and companies running offices. A walled garden is useful when non-technical people have to keep information somewhat securely. Google's search and ad dominance on the other hand are less convenient for governments.
Yujf 3y ago
I agree they should be forced to offer office on Linux. It is one of the things that really keeps Linux down for normal people. Why should they not be able to offer ads in their own products though? I don't like ads but I do not immediataly see the issue. I think they should absolutly be allowed to do AI but things like only allowing bing chat in Edge should be banned. The amount of pushing they do is clearly not OK. And same for google they should not be allowed to push chrome on you when you go to gmail or google in a non chrome browser
- hardware2win 3y ago
  >I agree they should be forced to offer office on Linux They created web version

nologic01 3y ago

Adtech (helping sellers surface advertising to buyers) should be cleanly split from tech provision (selling IT products and services to buyers). Further, the adtech business should be highly regulated, with the collection of data and profiling of individuals based on online behavior ideally prohibited. Digital ads are probably unavoidable, but should really just revert to be like the TV and newspaper ads of old. Surveillance capitalism cannot be reformed, it must be banned. The "market" has malfunctioned big time and produced a monster. There is nothing workable about the status quo. It holds back potentially tremendous potential and value, even just using conventional, monetary, yardsticks. There is no way you can rollout next-gen "AI" and deeply impactful innovations around e.g., finance while the well is poisoned by this commingling of unsavory business models with legitimate pursuits. Tweedledum and Tweedledee until regulators, politicians but also economic actors and the public wake up and smell the coffee.

endisneigh 3y ago

break every company up! Each "bet" in Alphabet needs to be broken. Each business unit within Google needs to be broken. Same with Apple. Break that up to between services and hardware. Force them to open up their new silicon. Why can't other companies use the H1 or H2 chips for their headphones? why are we letting Apple have the competitive advantage? Open up the App Store and force new payment methods. Microsoft also needs to be broken up. force them to sell their OpenAI stake and separate Office, Windows, Azure and Xbox. Once we're done with that we need to break up Adobe (artistic tools and stock assets need to be separate), Uber (Eats and Driving again need be separate) and others as well. moving away from tech, we need to break up these luxury conglomerates to spur more innovation in the fashion industry as well. same for food conglomerates such as Nestle and consumer goods like Unilever. we've only begun the Great Breaking. and while we're at it, we need to put a end to the madness of corporate greed and institute strict profit limits and tax the rest. when you really use your big brain - you'll realize nothing is more anti-competitive than excessive profits! money is power and profit is money, and no company need have power similar to the government. those profits are ultimately what are used to acquire more companies and begin their treacherous anti-competitive practices. break the companies up and lock up the execs for being complicit in literal criminal activity. you show me a BigCo with profit and I'll show you criminal activity.

aurareturn 3y ago
Break them up. Give them to the poor. /sarcasm
pb7 3y ago
Imprison everyone while we're at it! No freedoms for anyone!
jefftk 3y ago
I can't tell whether you're being sarcastic, fyi
- nologic01 3y ago
  its obviously sarcastic. some people have "forgotten" what healthy competition and competent regulation of markets means.

samwillis 3y ago

Google operates an exchange for a digital asset, is a major vendor/trader of said asset on that exchange and operates an algorithmic trading platform to enable people to buy and sell on that exchange. On top of that the algorithmic trades are a "black box" with no audit trail, and no public insight into how it operates. If that sounds familiar, think illegal crypto exchanges... Obviously "ads" are not "securities", but when you take that along with the monopolistic position Google have between businesses and consumers online, the status quo is not sustainable. The EU is absolutely right to suggest breaking Google up, it should not be allowed to operate as an exchange, broker-dealer, and clearing agency. Google have systematically taken control away from advertisers over the last ten years, it used to be that we would have deep control and insight into our campaigns. Now, it's all purely algorithmic, you put money in, and they promise to send you customers, with very little control from you. Something important I want to draw attention to though, there is obviously much to complain about with Google tracking visitors/consumers, but their tracking and "spying" on businesses using the platform is also incredibly deep. In order to advertise effectively with Google Ads, you now need to provide them with full sales figures from your checkout process. They want to feed the "algorithm" with your revenue numbers, not just from sales resulting from ad clicks, but all your sales. Google have amassed the most incredible insight into any and all businesses online. They know exactly how much you are making, how competitive you are compared to your competition, and how much they can squeeze out of you. They are in the position to design the "algorithm" to maximise their take as they can see your figures. So to finish, they operate a monopolistic exchange, as broker-dealer, clearing agency, and algorithmic trader, at the same time as having full visibility of your books. To me that should clearly be illegal.

Mistletoe 3y ago
Crypto is much more transparent than Google Ads due to the fact that most of them at least have a public blockchain. Is there any way to know if Google Ads purchasing isn’t a giant Ponzi of ads? Is there any way to verify they aren’t bidding up the auctions and that any of it is based on reality and competition at all? Crypto also has price discovery through shorting and selling. How would one short a Google Ad or sell one in their marketplace? There’s only one supplier and it’s “trust me bro” for the price discovery. I think it will be very funny if the past decade or so was not only based on a foundation of sand caused by zero interest rates, but also an ad ponzi from the tech giants. We sent our best and brightest not to the moon or to cure cancer, but to find new ways to keep that ad ponzi going. https://www.adexchanger.com/commerce/meet-performance-max-the-blackest-black-box-of-all-google-ad-products/ https://www.adexchanger.com/commerce/meet-performance-max-th...

sylware 3y ago

... and regulate all services which can be done for noscript/basic (x)html browsers to be available. Regulation: the big must interoperate with the small, and stable in time.

s1k3s 3y ago

> The Commission preliminarily finds that, in this particular case, a behavioural remedy is likely to be ineffective to prevent the risk that Google continues such self-preferencing conducts or engages in new ones. Google is active on both sides of the market with its publisher ad server and with its ad buying tools and holds a dominant position on both ends. Furthermore, it operates the largest ad exchange. This leads to a situation of inherent conflicts of interest for Google. The Commission's preliminary view is therefore that only the mandatory divestment by Google of part of its services would address its competition concerns. https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3207 https://ec.europa.eu/commission/presscorner/detail/en/ip_23_... -- How would this work, in practice?

chx 3y ago
To quote > Ad exchanges are driven by a simple demand and supply mechanism. Publishers want to sell ad space on their website to the highest bidder and advertisers want to buy ad units that provide good visibility. This is where an ad exchange comes into the picture. > This digital marketplace is part of the programmatic advertising ecosystem and is powered by real-time bidding (RTB) technology. It connects advertisers on a demand-side platform (DSP) with publishers on a supply-side platform (SSP). Google purchased DoubleClick in 2008 which is the largest such. The problem here is, the SSP is also Google -- Google Search most importantly, YouTube as well. There is more! They also run an ad server. To quote again > an ad server is to ads what WordPress is to content So an advertiser loads their ad into Google ad server for serving the ad then participates at a Google exchange to bid on the price of the ad. This gives Google an astounding amount of insight, fairly similar to insider trading which absolutely should not be allowed. So, they could be forced to spin out the ad server and the ad exchange.

Garvi 3y ago

In my opinion the main reason the Soviet economy collapsed (apart from outside pressure), was the state owned sector wide monopolies. It is also in the webs own nature to nurture monopolies for two seemingly contradictory reasons: 1.) Switching to a competitor is just a few clicks away. Moving everyone to the one that provides the most for free (dumping laws ignored as per usual). 2.) Switching to a competitor is hard, because all my social contacts use :thisService:. (now that the competition is dead, you turn the screw on the user: enact subscriptions, censor information, selling of private data, increase ad noise, etc.). Not breaking up monopolies will inevitably lead to the same result - people will be exploited to the point of real harm and will eventually revolt.

0xDEF 3y ago
>In my opinion the main reason the Soviet economy collapsed (apart from outside pressure), was the state owned sector wide monopolies Interesting how China's model with multiple state owned entities competing against each other compares with the Soviet model. However China is practically a capitalist country now. Chinese SOEs make up less of the Chinese GDP than Italian SOEs make up in the Italian GDP.

trapped 3y ago

If forced to breaking up Google should stop giving free services in EU including OS, Browser, Map, Search and any other free service. And charge EU users for each of these services which are top or only one in respective categories. These services are free due to Ad business which is best and can make money to fund other free services. Let EU pay for crappy services built by their own mediocre companies like Nokia which can't compete in market so force regulations. What is EU doing to to curb European monopolies ? Oh wait there are not many.... cause they can't innovate and compete. Easy to be complain than build something to compete.

aaomidi 3y ago
Making shit up, and getting angry about it is the internet way I guess. Anyway https://twitter.com/clothildegouj/status/1668561531435470850 https://twitter.com/clothildegouj/status/1668561531435470850 European companies are also going to be regulated. They don’t have many monopolies because they have a completely different way of approaching business and their position in society. Also when it happens, they get split apart way way before you hear about it.
hnthrowaway0315 3y ago
It's going to be good for EU in the long-term TBH. Please charge $$ for EU users.

screye 3y ago

I wonder if the internet is naturally predisposed towards monopolies, or the culture of tech companies predisposes them to monopolistic behavior. Let's look at similar industries. Better integration and data allows you to sell your product better, and more sales allows for more data and $$ needed for integration. No reason this vicious cycle only applies to internet companies. Why didn't Ford buy up petrol stations in the US which could only serve Ford cars ? Market consolidation would let them negotiate a lower petrol price for all Ford cars and customers would struggle to switch without the same petrol-network or low-prices. Tesla is clearly demonstrating this as a car company with tech culture. They tried a 'super charger' monopoly thing, were nearly successful, but the presence of existing competitors made it difficult to pull it off. But Ford at its peak would've likely gotten away with it. Tech companies are in an extortionate relationship, and the scale imbalance between their average customer (a 10 people mini-shop) and Google is so massive, that Google can afford to bleed many customers in the effort to find the maximally aggressive deal in the negotiation. How much can we get away with before we start bleeding customers, is a question that Google likely knows the answer to better than anymore. Which brings me to why I think tech heads towards monopolies. It is "competence at scale". Every monopoly can expand vertically or extort data from their customers. But scaling vertically means more employees, more communication friction and inevitable mediocrity through IBM-ization of your company. More data is also not useful unless you can actually do anything useful with it. That's where tech comes in. Tech companies can scale up vertically with products without needing as much human overhead, reducing the aforementioned friction. And most importantly, tech companies figured out how to actually make use of the data. It also helps that tech data collection usually involves clicking a checkbox and not sending thousands of foot-soldiers to take industry wide sensor measurements. I came full circle as I wrote this comment, because I've just had an epiphany : "what is a tech company"? Zillow, WeWork, Doordash etc. are on their surface, a light digital layer on a traditional company. I always wondered why they were considered tech companies. Target has a website and so does my landlord, but they aren't tech companies. In fact, the exact traits that lead to a culture obsessed with becoming a natural monopoly that define a tech company. A tech company has nothing to do with software, other than the fact that it has to do with data. The cultural obsession with finding efficiencies vertically (control e2e) and horizontally (scale), inevitably turning into a gatekeeping monopoly is the core characteristic that defines a tech company. Both require a ton of easy data, and only that, is why tech companies write software. Software companies aren't always tech companies. But tech companies are forced to be Software companies. I've just realized that WeWork was in fact a legitimate tech company because it was a landlord obsessed with vertical and horizontal efficiencies. That's it.

scotty79 3y ago

Recently I learned that single brand can be divided between multiple owners and as they compete the brand competes with itself. I heard of an example of fast food restaurant brand for which that was the case. Maybe we should do that more often when any brand grows too big?

amai 3y ago

Too late, too little. Google must be split up at least into search, YouTube, android, ads, map and news. That would help foster some competition in these markets.