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Ugh, not this again. The only real monopolies are those which are protected by government regulation or control. Google is out there on the freewheeling inter

by brc 12y ago

Ugh, not this again. The only real monopolies are those which are protected by government regulation or control. Google is out there on the freewheeling internet competing. It has a broad portfolio of products, but their main revenue stream - ads from search engine - has about the lowest switching costs of any product known to man. Google is far from an angel, and the days of 'don't be evil' are a quaint memory. But these European Regulators should look in their own backyard, and perhaps spend some time dismantling their own regulatory mess. You never know, undoing some of that red tape might even get their economy to grow. Stranger things have happened.

oblio 12y ago
If a monopoly forms through natural means, is it not still a monopoly?
matthewmacleod 12y ago
The only real monopolies are those which are protected by government regulation or control. This is utter, objective nonsense. Look at Microsoft as a case in point, which had a near 100% market share of desktop operating systems. Nobody would claim that wasn't a monopoly. Google is out there on the freewheeling internet competing. It has a broad portfolio of products, but their main revenue stream - ads from search engine - has about the lowest switching costs of any product known to man. It does, but the question is whether Google—which has a 90% market share—is unfairly using the power that brings to promote their other services. That's a perfectly valid question, and is pretty much the entire reason for the existence of antitrust rules. But these European Regulators should look in their own backyard, and perhaps spend some time dismantling their own regulatory mess. You never know, undoing some of that red tape might even get their economy to grow. Stranger things have happened. Currently, in Europe, Google has a share of the market that apparently Europe-level government feels is doing harm to the industry through abuse of monopoly. Isn't this exactly the sort of area we want government to intervene in?
- vixen99 12y ago
  You mean the unelected officials who decide these matters in non-smoke filled rooms in an organisation that hasn't been passed by its own auditors in more than 13 years (a business would have been taken to court by now) and has a current black hole of £34 billion which has willy-nilly to be filled from national coffers - no questions asked. All irrelevant to the subject under discussion? I don't think so.
  - matthewmacleod 12y ago
    I'm sure it is relevant, and the EU has serious issues that need to be fixed. But that doesn't affect the question of whether or not Google has a monopoly which is causing market harm.
    - danieldk 12y ago
      Indeed, and besides that, this vote was by the European Parliament, which is directly elected by EU citizens.
    - vixen99 12y ago
      Yes you are right (I got a bit carried away there!) but let's note "The ultimate decision will rest with EU competition commissioner Margrethe Vestager." - an unelected official. And while I'm on the irrelevancy track (apologies) - how about an unelected foreign minister with, as reported by observers, no demonstrable talents and certainly no mandate. What are we coming to?
      - lotsofmangos 12y ago
        I don't think she has ever been Foreign Minister, she's been an elected Danish MP for 13 years, serving as Minister of Education and Ecclesiastical Affairs, Deputy Prime Minister and Minister for Economic and Interior Affairs before being nominated to serve as Denmark's EU Commissioner by Denmark's elected government. I'll note that the public in Denmark did not vote for her to be Deputy Prime minister, they voted for her to be an MP, being a Deputy Prime minister is a nominated position. There are lots of nominated positions in representative democracies. In this case, the position is nominated by the elected government of a host country, then the selected nominations get voted on by the elected EU parliament. It is a bit like the process of nomination to the US supreme court, only the whole set gets voted on. There is an argument for the Commissioners to be initially selected by election in member states rather than through nomination and that was raised in 2010 by European Parliament President Jerzy Buzek, though I don't know how it is progressing. She couldn't be a foreign minister though, if you meant it in the other sense, as she is definitely from Europe and is in an EU post.
- brc 12y ago
  Had a near lock on desktop operating systems. For a brief period of time. Which was quickly eroded by better, cheaper, more agile competition. If that is the definition of a monopoly you'd wonder why it is the bogey man. A monopoly is supposed to be enduring and accrue endless profits and competitors, not just be a successful business. You ask whether this is what we want the government to intervene in? Quite frankly, no. Whatever ham-fisted attempts they make to try and 'intervene' will end up making things worse, as it usually does. The market will sort google out sooner or later. They have an operating overhead budget that makes your eyes bleed and an extremely low switching cost product.
Tyrannosaurs 12y ago
Switching costs are low but the barriers to entry into the market are massive - Larry and Sergi starting out today wouldn't be able to build a competitive search engine. The more interesting question (to me at least) is whether search will be as important going forward as it has been for the past 20 years. As more data and activity moves into apps, more stuff is being silo-ed off from Google. Sure apps might be a blip before stuff moves back to the web but if they're not then Google may remain dominant in search but search itself may become a smaller part of the whole.
netheril96 12y ago
> The only real monopolies are those which are protected by government regulation or control. Not according to the law. Any one who basically controls the market is a monopoly. Microsoft faced antitrust charges before as well and they were not protected by government regulation or control either. Monopoly itself is not a crime, though. Abusing the power of monopoly is, which is something the European Union has to prove.
- brc 12y ago
  Controlling the market would mean excluding competitors and capturing all the profits. Microsoft is a poor example of a monopoly as any long term shareholder will tell you, because they have little power in the market, a scant ten years or so after they peaked in market share. That is an extremely lame monopoly if it is one. All businesses are subject to market forces and cannot sustain a monopoly, Microsoft and Google included. Neither really meet the definition of a monopoly, which is generally the exclusion of all competition in a market. A real monopoly is something like control over a city transportation network, something like taxi licensing. Which can only happen through government control.
  - netheril96 12y ago
    > All businesses are subject to market forces and cannot sustain a monopoly This is a very old view of free market, and perhaps only the proponents of classic economics can agree with you. Market forces have a natural tendency for monopoly, which is why monopoly laws are needed in the first place. For example, oil companies and ISPs are all monopolies naturally formed. Now, the IT companies may be different. As you say, the technology in this area advances so rapidly that a monopoly at one time soon becomes irrelevant at another time. Still a monopoly Microsoft is in the area of desktop operating system, but the power of such monopoly has faded away. But I don't think the European regulators would take this into account.

by brc 12y ago

oblio 12y ago

If a monopoly forms through natural means, is it not still a monopoly?

matthewmacleod 12y ago

The only real monopolies are those which are protected by government regulation or control. This is utter, objective nonsense. Look at Microsoft as a case in point, which had a near 100% market share of desktop operating systems. Nobody would claim that wasn't a monopoly. Google is out there on the freewheeling internet competing. It has a broad portfolio of products, but their main revenue stream - ads from search engine - has about the lowest switching costs of any product known to man. It does, but the question is whether Google—which has a 90% market share—is unfairly using the power that brings to promote their other services. That's a perfectly valid question, and is pretty much the entire reason for the existence of antitrust rules. But these European Regulators should look in their own backyard, and perhaps spend some time dismantling their own regulatory mess. You never know, undoing some of that red tape might even get their economy to grow. Stranger things have happened. Currently, in Europe, Google has a share of the market that apparently Europe-level government feels is doing harm to the industry through abuse of monopoly. Isn't this exactly the sort of area we want government to intervene in?

vixen99 12y ago
You mean the unelected officials who decide these matters in non-smoke filled rooms in an organisation that hasn't been passed by its own auditors in more than 13 years (a business would have been taken to court by now) and has a current black hole of £34 billion which has willy-nilly to be filled from national coffers - no questions asked. All irrelevant to the subject under discussion? I don't think so.
- matthewmacleod 12y ago
  I'm sure it is relevant, and the EU has serious issues that need to be fixed. But that doesn't affect the question of whether or not Google has a monopoly which is causing market harm.
  - danieldk 12y ago
    Indeed, and besides that, this vote was by the European Parliament, which is directly elected by EU citizens.
  - vixen99 12y ago
    Yes you are right (I got a bit carried away there!) but let's note "The ultimate decision will rest with EU competition commissioner Margrethe Vestager." - an unelected official. And while I'm on the irrelevancy track (apologies) - how about an unelected foreign minister with, as reported by observers, no demonstrable talents and certainly no mandate. What are we coming to?
    - lotsofmangos 12y ago
      I don't think she has ever been Foreign Minister, she's been an elected Danish MP for 13 years, serving as Minister of Education and Ecclesiastical Affairs, Deputy Prime Minister and Minister for Economic and Interior Affairs before being nominated to serve as Denmark's EU Commissioner by Denmark's elected government. I'll note that the public in Denmark did not vote for her to be Deputy Prime minister, they voted for her to be an MP, being a Deputy Prime minister is a nominated position. There are lots of nominated positions in representative democracies. In this case, the position is nominated by the elected government of a host country, then the selected nominations get voted on by the elected EU parliament. It is a bit like the process of nomination to the US supreme court, only the whole set gets voted on. There is an argument for the Commissioners to be initially selected by election in member states rather than through nomination and that was raised in 2010 by European Parliament President Jerzy Buzek, though I don't know how it is progressing. She couldn't be a foreign minister though, if you meant it in the other sense, as she is definitely from Europe and is in an EU post.
brc 12y ago
Had a near lock on desktop operating systems. For a brief period of time. Which was quickly eroded by better, cheaper, more agile competition. If that is the definition of a monopoly you'd wonder why it is the bogey man. A monopoly is supposed to be enduring and accrue endless profits and competitors, not just be a successful business. You ask whether this is what we want the government to intervene in? Quite frankly, no. Whatever ham-fisted attempts they make to try and 'intervene' will end up making things worse, as it usually does. The market will sort google out sooner or later. They have an operating overhead budget that makes your eyes bleed and an extremely low switching cost product.

Tyrannosaurs 12y ago

Switching costs are low but the barriers to entry into the market are massive - Larry and Sergi starting out today wouldn't be able to build a competitive search engine. The more interesting question (to me at least) is whether search will be as important going forward as it has been for the past 20 years. As more data and activity moves into apps, more stuff is being silo-ed off from Google. Sure apps might be a blip before stuff moves back to the web but if they're not then Google may remain dominant in search but search itself may become a smaller part of the whole.

netheril96 12y ago

> The only real monopolies are those which are protected by government regulation or control. Not according to the law. Any one who basically controls the market is a monopoly. Microsoft faced antitrust charges before as well and they were not protected by government regulation or control either. Monopoly itself is not a crime, though. Abusing the power of monopoly is, which is something the European Union has to prove.

brc 12y ago
Controlling the market would mean excluding competitors and capturing all the profits. Microsoft is a poor example of a monopoly as any long term shareholder will tell you, because they have little power in the market, a scant ten years or so after they peaked in market share. That is an extremely lame monopoly if it is one. All businesses are subject to market forces and cannot sustain a monopoly, Microsoft and Google included. Neither really meet the definition of a monopoly, which is generally the exclusion of all competition in a market. A real monopoly is something like control over a city transportation network, something like taxi licensing. Which can only happen through government control.
- netheril96 12y ago
  > All businesses are subject to market forces and cannot sustain a monopoly This is a very old view of free market, and perhaps only the proponents of classic economics can agree with you. Market forces have a natural tendency for monopoly, which is why monopoly laws are needed in the first place. For example, oil companies and ISPs are all monopolies naturally formed. Now, the IT companies may be different. As you say, the technology in this area advances so rapidly that a monopoly at one time soon becomes irrelevant at another time. Still a monopoly Microsoft is in the area of desktop operating system, but the power of such monopoly has faded away. But I don't think the European regulators would take this into account.