U.S. House's antitrust report hints at break-up of big tech firms: lawmaker | Hacker News Reader

U.S. House's antitrust report hints at break-up of big tech firms: lawmaker

reuters.com

391 pointscblconfederate482 comments

I was at MS in the late 90s, left in 2000. It should have been broken up then. But to break up or be broken up is the wrong phrasing. It connotes a kind of destruction, to make something less than it was, but this is not the case at all.

Any value that something this large has, is in its ability to exhaust resources from the ecosystem, control the market, the workers and the ability to resist changing its behavior when better things come along. Companies exist in a system that should serve everyone and when an imbalance occurs the whole system morphs around them. They are no longer players but dictators, willingly or not. Their sheer size forces rules of the game in ways even they do not control.

Breaking up large companies isn't even about them. It is about us and the world we want to live in. Remember the wage fixing scandal between Pixar, Google, Apple and bunch of other companies in the bay? [1] They ultimately controlled where those people worked (and their horrible commutes), who they were friends with, what schools their kids went to and who they married. All because the execs at these companies wanted to maintain total control of the workforce and suppress wages. That is too much power for a company to have or wield. And these large companies due to their size alone are doing this on an unconscious level. On a conscious level they can do much worse.

Microsoft stagnated for what 10-15 years? But it isn't just MS that is stagnating, it is all the people in those markets. There were a bunch of us WITHIN the company that wanted the divisions repotted so each could grow on its own. If value is being lost when an organization that large is distributed to a smaller number of units, then the value is selfish, it only serves the org and not the system it operates in.

What is the end state if we let this continue? 20 large corporations in America and a field of small feeder gig economy vendors? We will all be serfs (NPCs) in a feudal corporate cosplay.

[1] https://www.theregister.com/2012/01/20/doj_emails_anti_poach...

> What is the end state if we let this continue? 20 large corporations in America and a field of small feeder gig economy vendors? We will all be serfs (NPCs) in a feudal corporate cosplay.

The reality is that this is what we're moving to, break-up or not. The ownership of these publicly traded companies remains the same disparate set of high-capitalization funds.

very true

People don't seem to realize that sooner or later EVERYONE will be under attack from this sort of '10 large companies that own everything' model

They seem to think - Oh my job is safe, so what do I care if taxi drivers/waiters/delivery people/warehouse workers have a tough life

sooner or later you will be a target, and then you will wish you had not ignored when everyone else was being taken out

because there will be no one left to save your job

Definitely there is a problem with people not realizing the oligopoly problem.

That said, I'm not as confident that changing public perception will actually have any impact on what the law does. There is pretty compelling evidence that in cases where public opinion and the opinion of large capital holders diverge w.r.t. a law, there is no relationship between the public opinion and what law is actually passed. [0]

[0]: https://scholar.princeton.edu/sites/default/files/mgilens/fi...

Very well put. The game is about concentrating wealth into as few hands as possible. If we allow it to continue in that direction, it will keep getting worse and accelerate. If we allow the economic elite to have their way and we turn a blind eye to their manipulations, it will be a signal for them to dial up the manipulations even more.

If you are not sufficiently connected to the financial and political elite, you will eventually lose everything. It will happen in your lifetime. Nobody will be left to protect you against gross injustice. Worse than that; nobody will care.

We all have to take a stand and make a small effort at least.

Already, highly intelligent people are beginning to fall through the cracks of the system by the millions.

Thats why i m already hoarding Brawndo stocks.

Good idea. After Monsanto (excuse me, Bayer) falls and there are no more plants, we'll still need electrolytes. Definitely a long-term growth stock.

South Korea?

> They ultimately controlled where those people worked

[citation needed]. I was a "victim" of that scandal, but if I ever decided to change employers I knew where the door was and I knew my résumé would get me considered at the other players. The agreement was mostly to keep their phone bank of recruiters from polling me continuously and the managers like four levels above me from playing pachinko with the pay and benefits packages (to the detriment of the folks at my level).

Regardless, the agreement was illegal and existing law broke it up without breaking up any of the companies. I don't see how the existence of that scandal supports the hypothesis that larger corporate breakups are either needed or beneficial.

Microsoft of today is an OS company, browser company, videogame development company, and cloud computing company, and they seem to be doing pretty well overall at it; happy users, good products, decent inter-operation.

There is a lot to unpack here, but I think it needs to be addressed since your comment is getting so much exposure.

>> They ultimately controlled where those people worked

This is entire point of the anti-solicitation agreement. I don't need to cite anything.

Read the transcripts from Jobs and tell me again how it was to protect you from recruiters. How did you get sufficient protection after they lost the suit?

The point is showing the behavior of large companies that wield too much power and control large portions of the market, either from the customer's standpoint or the employees. They stopped their behavior only after being sued by the employees, who gained very little, the lawyers won and the GAFS ultimately profited from this endeavor.

Microsoft today is immaterial to the MS that should have been replanted in the 90s. Does not follow.

BTW it is hard to respond when your post is continually ninja-edited.

> Microsoft today is immaterial to the MS that should have been replanted in the 90s. Does not follow.

Microsoft of today follows from the MS that wasn't replaced in the '90s. Of course it's material.

Follows it in time only. MS today is not because of the stagnated Microsoft, but in spite of it. Nadella saved MS.

You are committing fallacies of conflating cause and effect and surviorship bias.

You claim MS "should have been replanted" in the '90s, but that claim makes the assumption that the end-result would be better than what we have now, does it not?

I don't think that's a safe assumption.

> The agreement was mostly to keep their phone bank of recruiters from polling me continuously and the managers like four levels above me from playing pachinko with the pay and benefits packages

Do CS majors not understand marginal thinking? High-level people in business certainly do.

Yes, each of those things might not sound that bad - who cares if the recruiters don't poll me if I "know the door." The problem is that phone polling does have a real impact on people switching jobs and it does depress wages if businesses agree to not do it.

Not really in an ecosystem where there's some hundred startup opportunities in addition to the big established players. The mathematics on that are far more complicated than "big company doesn't pay more ----> everyone's wages are lower."

Besides, I have a hard time worrying about if my wages were lower than they "should" be when they're already more money than I'd see in any other field. Apple, Google, Pixar, et. al. employees are extremely well-compensated.

> Besides, I have a hard time worrying about if my wages were lower than they "should" be when they're already more money than I'd see in any other field.

Ah. So yes, CS majors don't understand marginal thinking.

Or they're not as monetariliy greedy. There's multiple forms of value.

So you've retreated from "actually there was no harm" to "maybe CS majors don't care if they are paid substantially less than they could be due to collusion in the labor market."

I'm not going to continue responding.

It really depends on how you define "harm" and who is harmed. Classifying "not paid as much as some theoretical model claims a person should be paid" as "harm" without examining the theoretical model in detail is naive.

For example, let's assume we care about improving people's lives. It's probably a short walk to assume that more independent software companies (both big players and smaller startups) satisfy that goal better than only a few players, or one player.

A collusion-free labor market encourages players at the top to spend on labor until they bleed. Eventually, if nothing checks that cycle, they bleed out competing for a small pool of top talent, with the winner being the one with the deepest pockets who can afford to bleed longest. Then, the winner gobbles up the talent and resources of the bankrupting companies, and there are fewer players in the market (and the remaining players get to dictate labor prices on the grounds of being the only players).

Ironically, a soft salary cap can benefit the ecosystem in the long-term; employees aren't paid as much as they could be, hypothetically, short-term, but there's more job security because a price spiral is unlikely to disrupt their employer. And there's a more diverse set of independent companies in operation, likely leading to a more diverse set of software solutions and more improvement in people's lives than if salary spirals meant that only big players could afford to play.

It's one scenario among many possible, but it's interesting to observe how maybe not paying software engineers much as they could be in a completely laissez-faire market creates long-term benefits for the engineers, their employers, and consumers.

> salary spirals meant that only big players could afford to play.

The collision was between big players, who were already outbidding smaller players except Facebook with had absolutely massive funding. Smaller players weren't helped by this. (Pixar was smallish but in context it's best seen as part of Apple/Jobs)

> laissez-faire market

Calling anti-collision regulation "laissez-faire market" is strange.

Are you assuming all of these companies are going after the same top talent? There are plenty of average and above average talent who they can hire and not "bleed". You don't need to hire a team of Ken Thompsons to build a CRUD service.

If companies would stick to hiring the developers they can afford given the needs of whatever project they are hiring for, there would be no (or less drastic) upward spiral of labor cost.

In the case of Apple / Google / Pixar / etc., yes. They are definitely trying to grab every Ken Thompson they can. For Google in particular, I believe it is part of their hiring goals.

It's undoubtedly true that these companies' actions suppress wages at the margin. The first order effect is some level of harm to the impacted employees.

I can understand the argument you put forward about second order effects but I don't agree with it, underpriced labor will lead to overconsumption compared to what is optimal.

I'd also like to note that the soft cap is the outcome of laissez-faire policy, it's regulations and law that is attempting to remove it.

This talks to a society wide problem, basic logical thinking tools (thinking at the margin, elementary statistics, etc) aren't taught in school and most of the population are ignorant of them.

They're not the most difficult concepts to grasp but high school students are busy memorizing facts instead, and these thinking tools are only taught in very specific university courses that not everyone will take.

There's an interesting book on how learning these tools changes one's political philosophy.

https://www.amazon.com/Myth-Rational-Voter-Democracies-Polic...

> I have a hard time worrying about if my wages were lower than they "should" be when they're already more money than I'd see in any other field.

Never get complacent. Always demand more. Give it away if you don't need it, but get what you're worth.

That's one philosophy but not one I subscribe to. I target win-win.

You won’t be hired and you won’t work for a company in the first place if it wasn’t a win-win agreement between the employer and employee.

What working for lower wages than you’re worth contributes to is a win-lose situation between employers in your field and employees in your field where the employees lose.

It will become a problem for you not now, but in the future when you are looking for a different job or when you want a raise (even if you’re satisfied now with your salary, inflation can catch up with you quickly, for example).

Win-win is a fine philosophy when negotiating person-to-person. Not so much when it's person-to-organization.

How do you feel about profiting sharing?

It doesn't seem like a bad idea.

Google’s minister of misinformation Laszlo Bock explained it at TGIF as

1) Google did nothing wrong because 2) Outbound recruiting has no effect 3) So execs just spent a ton of time working out a complicated arrangement to prevent outbound recruiting

It amazed me that Google would brag about hiring “the smartest people” then feed them directly contradictory information and expect them to buy it, which shockingly many did. For all the typical criticism of Trump supporters being a misinformed cult coming from Googlers, I saw a ton of similarities in the logical brain turns off when dear leaders explain things.

> just spent a ton of time working out a complicated arrangement

A few emails and phone calls isn't a complicated arrangement.

Anyway, just because the defendant said something doesn't mean the plaintiffs believed it.

> depress wages

Which is not even close to OP's extreme claims.

I think OP was just listing out the consequences of switching jobs.

They also engaged in agreements to not counteroffer in competition with each other above their initial offer so that employees couldn't negotiate between offers.

do you know Fred Huxham? What you say about "mostly recruiters" is literally false

I'm afraid I don't. All attempts to learn more are telling me about track & field, which is not what I assume you're referring to.

> decent inter-operation

We don't want interoperation only between Microsoft products, but between all products. Customer lock-in is an anticompetitive act. That's a big deal, and breaking up companies would be very advantageous to the consumer in that regard.

Would it? Because in general, when I look at the software ecosystem (in the open-source community and the closed-source cross-company community), I see a minefield of impedance mismatches and a programmer's lifetime of writing shim code.

The one-company ecosystems are incentivized to make their software work with its siblings. I've never seen any such strong incentive in other environments. I'd expect open-source to succeed at it, except instead it's a compatibility nightmare because people are interested in their own apps and not in making them talk to each other.

A textbook example is interop in email vs interop in instant messengers. Email was standardized, while instant messengers are left to the whims of individual companies. Normal interop isn't a hard problem, unless there's complicating circumstances (but then you have bigger problems), it's just that companies are incentivized to restrict it for their benefit.

> We will all be serfs (NPCs) in a feudal corporate cosplay.

Perfect.

Great statement, excellent articulation.

" isn't even about them. It is about us and the world we want to live in. "

... we have to recognize that 'we don't own this stuff'.

Yes - I do support anti-trust and possibly 'breaking up companies' but we have to be very, very careful at how we intercede into private groups affairs.

The agents doing the 'breaking up' might just believe that they have incredible ability to 'oversee markets' and leverage the power for what they believe to be the 'greater good'.

The power of 'free markets' is often overstated but we should remind ourselves that there is a lot of value there, more importantly it's not obvious. In the short run, it's easy for someone to delude themselves in to the view that 'one's responsibility to the ostensible greater good as governor' combined with 'the grand view of markets' should legitimately empower towards control and market manipulation. After all - a bunch of 'really smart analysts' should be able to maximize social utility through some kind of restructuring of whatever exists at any given time in the markets.

It's a vey slippery slope and a hard thing to 'get right' - so any gains to be made here are going to be really correlated with how thoughtful and intelligent government will be on this one. Even with the greatest intentions it could be a mess.

Whoever doing this needs to be really, really smart about it.

> private groups affairs.

No such thing. They are relying on societal assurances that contracts they enter will be enforced, that property they hold will be protected, etc. Society is free to regulate those "private group affairs" since they are externalizing the costs onto society.

> there is a lot of value there, more importantly it's not obvious

Sure, but generally in the cases where politicians mistakenly intervene in markets with distortionary effects, economists are pretty united that the intervention will be a bad idea (see: rent control).

On anti-trust, economists recognize monopolies as a pretty clear market failure and it seems to be the tech employees who are deploying the "free market" arguments in defense of Google, FB, et al.

" Society is free to regulate those "private group affairs" since they are externalizing the costs onto society."

Private property, freedom of association is a very real thing.

It's a very serious thing to take private people's stuff from them.

So we have to be careful.

There's no state of nature where people are engaging in private transactions with legally enforced contracts, creating corporations with limited liability up to the size of the investment, etc. Those are all constructs of society.

Your idea that there are these transactions and property 'outside of society' that we have to protect from interference from society does not seem coherent to me, when the existence of a society that does grant private property rights is what allows a Google to exist in the first place.

This is totally upside down.

What is 'coherent' is a civil society that is consistent with the application of it's constitution.

Of course 'private property' is a construct - but that construct is fundamental, Constitutional. It's like voting.

If you take away people's property, your making some very deep transgression of the societal compact, and it's wrong.

There are cases where we need to make change - like lowering or increasing the voting age, we have to be careful with that.

It's also a very serious thing to use the resources of society to protect people's private accumulations.

If people get to use the force of law to keep their stuff from being stolen, they do have an obligation to pony up for the shared costs of that law enforcement.

Sure, markets are hard to beat with central control... But if the market is sufficiently consolidated, it's got a lot more in common with central control than what we would call a free market.

Markets work because people can use purchasing power to solve their problems. When you have only one (or two basically identical) players in a market, there's no ability to use purchasing power to signal that one approach or another is better for your needs. Part of the point is that the best system might involve many approaches for different kinds of end user. What we currently have in many situations is people's problems are being ignored because they don't have any real alternatives.

Simultaneously, Facebook (for example) is ultimately incentivized to solve the problems of their paying users (ad firms and political advertisers) over their non-paying users (humans). They've aggressively bought the competition which ensures that remains the reality.

Political regulation of markets exists to ensure that the interests of the polis are ultimately served by businesses, precisely because markets have MANY failure modes that prioritize other interests to the detriment of overall societal health.

Exactly this. Markets are incredibly powerful, but it's a double-edged sword.

They also have failure cases and it is important to be aware and guard against those cases.

This is a good point, there is more to antitrust laws than just economics, they were put in place to protect our democratic republic. Senator John Sherman is quoted: "If we will not endure a king as a political power we should not endure a king over the production, transportation, and sale of any of the necessaries of life." The Sherman Antitrust Act is the foundation of modern antitrust law.

I think this gets to the heart of the difference between republicanism and liberalism (the ideologies, not the political parties).

Let's add "communicate" to that. It's crazy how much of the world's communication is controlled by a few guys in Silicon Valley and their arbitrary ToS.

But you have such a large number of choices for communication: Meet, Hangouts, Allo, Messages, Duo, Skype, Lync, Skype for Business, and Teams.

Yeah and all of them will ban if you say the wrong thing

Lync is "Skype for Business" now, afaik.

And I think communication is one of the more open stacks. WebEx? Zoom? Slack? WeChat?

Those are all controlled by three companies, at most: Google (Meet, Hangouts, Allo, Duo), Microsoft (Lync, Skype, Skype for Business, Teams), and whatever company controls "Messages".

> They ultimately controlled where those people worked (and their horrible commutes), who they were friends with, what schools their kids went to and who they married. All because the execs at these companies wanted to maintain total control of the workforce and suppress wages.

This is ridiculous. It was a non-recruitment pact that led to lower pay (for already wealthy people, just not as wealthy ad that execs), not wage-fixing nor non-hiring nor control over where people live or went to school or who they marry.

And the insulation that the wealthiest 1% of people are entitled to send their child to a better school than their non-tech-star neighbors is horrific. It exposes a worldview that extreme inequality is only bad if you aren't on top

> NPCs

What does this even mean? Being poorly paid and not having healthcare is bad, but being an "NPC" has nothing to do with it. How is being employed as a driver/cook/whatever more of a "PC"?

I think by NPC the parent meant a total lack of agency/mobility, perhaps comparable to feudal serfdom. Sure, you have a means of sustaining yourself, but if any job you can take or business you can create all involve a kickback to a monopolistic tech company, then your existence tends to serve their interests more than yours.

It is no news that big-co can induce great harm, but let us not get swallowed into conspiratorial thinking. Large companies first and foremost benefit from economies of scale, not any dictatorial dynamics they might pursue.

This is important, because when we decide to draw a line based on size (easy) and not on demonstrated harmful behavior (difficult), we have to answer the question "how big exactly we should allow corporations get then?". The answer to this question will determine if we as a society can enjoy certain things or not, because some goods' and services' existence requires that economies of scale.

> Breaking up large companies isn't even about them. It is about us and the world we want to live in. Remember the wage fixing scandal between Pixar, Google, Apple and bunch of other companies in the bay?

How is multiple companies colluding related to the question of a single company being broken up? Again, what they did was wrong, but let's not smuggle unnecessary emotional rhetoric into a rational argument.

> That is too much power for a company to have or wield.

Power concentrates whether we like it or not. Who should wield that power? Nation states? Religions? Or do we mandate a constant break up? You might break up your nation's companies but that doesn't prevent another country's corporations dominating the world market including yours, unless you pull a NK.

Yes corporate power concentration can/does cause great harm, but I haven't heard a suggestion that can actually work in the real world. How about strengthening the opponent process of government and other democratic processes to undertake the difficult task of disincentivizing demonstrated harmful behavior? Developing mechanisms more sophisticated than "just break it up"? American big-co's are not the only big-co's in the world, maybe compare notes with how other nations handling these?

Being able to significantly alter public perception and influence the political process is one of the most important advantages of scale.

Yes, and maybe our political and public perception apparatus doesn’t scale well to the long tail of public interest topics and a singular strong entity with clear goals is simply taking advantage of that mismatch.

> Large companies first and foremost benefit from economies of scale, not any dictatorial dynamics they might pursue.

Economies of scale are dictatorial dynamics. Economy of scale means you're putting unbalanced pricing pressure on suppliers.

> Economies of scale are dictatorial dynamics. Economy of scale means you're putting unbalanced pricing pressure on suppliers.

I think you are confusing economies of scale with monopolistic/monopsonistic dynamics.

Nope. Not confused at all.

But economies of scale are independent of the supplying market - having one skilled industrial engineer (who may be the owner) set up a fully automated line to make screws would be an economy of scale as the automated would sustain a lower price per item vs a manned line or masses of tinkers machining every screw by hand.

Said situation also says nothing about your suppliers as a bunch of small steel producers vs one massive steel monopoly themselves.

The economic power wielded is a maximia of the difference per item in efficency essentially - as any attempt to leverage it would result in the old less efficient way being cheaper and negate the competive edge.

To call the hypothetical sole industrial engineer "dictatorial" is quite the strange definition.

Automation and production efficiency isn't what people mean by "economies of scale", though, especially in relation to antitrust. When large companies make gains from "economies of scale" it's almost always because they've attacked margins, usually by wielding enough power they can convince suppliers to make less money, sometimes by replacing other parts of the vertical market by doing things in house.

If you think about the tech giants, they're not making gains by automating more production. They're buying up fiber, building their own chips, creating their own shipping companies, etc. They are big enough to alter most markets in ways that are favorable to them.

How would you have broken up MS? The Office programs are better together, Windows might be split of from the rest, but then what about IE? You can't sell a browser anymore, so either that dies (which would be bad back then because it was the most advanced browser) or it gets bundled with something else and the problem continues.

I'd keep all the software together - Windows, Office, CRM, etc.

Spinning out Bing/Microsoft Ads and Azure as separate companies feels kind of obvious, and could be interesting. I'm sure Azure could easily stand on it's own (might even be beneficial?!), but I wonder about the financial dependencies between Ads and Windows?

Thank you for painting such a memorable picture. Too often we retreat to abstract intellectual arguments about what's right or how the world works. We have to remember that these decisions are about our wellbeing, as industry workers, consumers and the ecosystem as a whole.

>Any value that something this large has, is in its ability to exhaust resources from the ecosystem, control the market, the workers and the ability to resist changing its behavior when better things come along. Companies exist in a system that should serve everyone and when an imbalance occurs the whole system morphs around them. They are no longer players but dictators, willingly or not. Their sheer size forces rules of the game in ways even they do not control.

This isn't really the whole story. Large firms don't just exist because of power, but also because to manage an increasingly complex environment (scientifically, economically etc) large institutions are required to hold the necessary knowledge to function effectively. The concentration towards larger firms is thus not just a power grab, but a necessary condition for modern production.

This was Schumpeter's basic insight. Monopolistic competition is more dynamic than the free, small-firm dominated market. Size gives companies the ability to earn surplus profit which is turned into long-term innovation rather than short-term fighting for market share.

The central dynamic around data collection in the information economy even amplifies that trend. Smaller firms are not going to reap benefits on the same scale as large firms can, and the primary economic case for break ups, which is that large firms are unproductive due to being unable to deal with complexity, has been turned on its head. Information now functions as a way to make centralisation more efficient, not less.

_ Monopolistic competition is more dynamic than the free, small-firm dominated market. Size gives companies the ability to earn surplus profit which is turned into long-term innovation rather than short-term fighting for market share._

Ah yes, this good ol’ myth. To debunk it, look around you at all the major players in tech who are hoarding cash like there is no tomorrow while doing incremental improvements to products rather than building something interesting.

The larger a company becomes, the more bloated and bureaucratic it becomes. Once they’re big enough, innovation is close to impossible, and the self-preservation instinct kicks in. Again, you can see that in almost all BigTech players today.

What I can see, literally, by looking around is that my phone is made by Huawei, my TV by Samsung, my medicine is made by a large pharmaceutical company, the train I take to work and the rail network are built by a state owned company, the web framework I used yesterday is made by a colossal tech giant, so is the text editor I use (granted that one may vary), and the cloud infrastructure my software runs on. So are the cars on the sideways looking out of the window. All big firms.

Large firms are quite literally who built all the complicated stuff at huge scale that pretty much everyone relies on all the time. I actually have to search around before I find something that was made by a small business.

And that's not because of some conspiracy, it's because they happen to make the best stuff cheap, which is a consequence of their scale. It's not a myth, you can literally confirm that by I suppose checking who makes the stuff you voluntarily buy each day.

None of those things were “invented” or truly brought to the edge of technological abilities by the companies you described. They piggyback off of existing invention, and pretty much are interested in keeping things as-is.

Your phone manufacturer doesn’t care about invention as much as they care about you buying the next, slightly better model.

Your TV manufacturer is interested in recouping the losses they have on selling you a cheap device by pushing as much advertising as possible.

The pharma company is interested in gouging as much money as they can through holding patents - they don’t develop medicine out of the goodness of their hearts.

You get the point.

> None of those things were “invented” or truly brought to the edge of technological abilities by the companies you described.

Actually, the large conglomerates do have R&D labs working on semiconductors, chemistry, manufacturing, and so on, so that they can come up with improvements to sell.

The reason why semiconductors get smaller, TVs get brighter colors, larger panels have acceptable manufacturing yields, is exactly because of this R&D.

A few large firms competing with each other is very different from a monopoly. Some of the things you mentioned have reasonable competition (phones, TVs, cars) and some are deeply steeped in anti-competitive practices (medicine, public transit).

Your argument was used to make Boeing into a monopoly and look how that turned out. It's easy to cherry-pick examples for either side, but I'd say take a step back and look at the trends and which way the evidence favors. At the end of the day it all comes down to incentives - and what incentive does a monopoly have to compete?

> few large firms competing with each other is very different from a monopoly.

very true but that's what we've been talking about in the comment chain, there's no actual global monopoly or one static entity, hence the explicit reference to Schumpeter's 'monopolistic competition'.

There is still competition between large firms, but the dynamism is temporal, few firms for years or decades seize outsized marketshare to dominate and innovate sectors before being replaced by other substantial firms, rather than a sort of bazaar economy of small firms competing at the same time. It's myspace being superceded by facebook maybe being eaten by tiktok that's going to drive technological innovation in social media, not mastodon instances.

Of course it's easy to cherry-pick, but you don't need to cherry pick. You can look at the economic development in mature economies vs developing economies. This tendency towards consolidation and innovation occurs in every single one. That's why South Korea and Japan have more large firms and are more productive than most of their Asian peers, it's why China with its economic model has outgrown India, where the same process is occuring now (see Jio).

And that is why the only innovation large corporations create is through acquisitions of smaller companies, which still have a creative spirit. Then they just consume the specifically desired parts of the acquisition and discard the rest.

And then the consumer/acquired parts become completely derailed/destroyed/super-monetized. This is conjecture, but awfully common.

Are we living in the same world?

> To debunk it, look around you at all the major players in tech who are hoarding cash like there is no tomorrow while doing incremental improvements to products rather than building something interesting.

Putting billions of dollars into VR/AR? Facebook acquired Oculus for >2 billion, and the project had mixed success, and Facebook is still investing more but into AR instead. Microsoft has had two versions of their AR product that are bulky and expensive, and with few users. But the 2nd generation of hardware much improved over the 1st. Apple is rumored to be developing AR glasses as well.

How about self driving cars? Google is the only company with actual driverless cars on the roads. Many startups made big promises but so far have nothing publicly available. Other large companies like Ford had previously announced their intent to develop autonomous cars, but backed out, saying the challenge is too hard. This shows that a truly large company is needed to develop autonomous cars, because billions of dollars are required for a project that carries high risk.

> Once they’re big enough, innovation is close to impossible, and the self-preservation instinct kicks in. Again, you can see that in almost all BigTech players today.

What about Amazon? Nothing could be further from the truth. They keep expanding into entirely new markets. In AWS, IoT, multiple retail stores, online video, healthcare, and probably other industries I'm forgetting.

And what about Google Stadia and Xbox game streaming? Or Facebook Libra? Or all of Google's NLP research? Project Loon? Fuchsia? Go? These are fundamentally new r&d projects.

> Your phone manufacturer doesn’t care about invention as much as they care about you buying the next, slightly better model.

Gestures broadly at 2G, 3G, 4G, LTE, and 5G Phase 1. Constantly improving display technology like OLED and transparent displays and improved cameras.

The things you are describing are not even close to being the revenue drivers or “reasons for existence” for the companies you listed. As someone who worked at FB, there is nowhere CLOSE to the amount of funding that Oculus gets compared to other parts of the company. I would venture to say the same about MS - Hololens is nothing more than an experiment, that is not the funnel in which Microsoft is pouring its revenue from other parts of the business. I am not arguing that companies don’t innovate. I am, however, arguing that companies, once reached a certain size, are less and less incentivized to do so.

> I am, however, arguing that companies, once reached a certain size, are less and less incentivized to do so.

Well, I am not sure I agree with that. Large companies can afford to take the risks. For medium-sized companies the same effort is much higher chance of going out of business. e.g. If a smaller company like Sonos announced development of an AR product I think that would be really surprising.

Clayton Christensen covered that in Innovators Dilemma. Large companies, on average, are very risk-averse.

Magic Leap comes to mind.

Magic Leap is a startup, I mean established mid-sized companies. The ones that are making money and steadily growing. For them taking a big risk can end the company. A startup is already expecting that they'll go out of business, and funding a startup is a big risk in general.

Sorry, where are you getting these views from? Every tech company I've worked at, or have talked to people who work at them, become incredibly risk averse to innovation as they grow.

The only time they makes serious investments in innovation is when they buyout smaller companies that pose a risk to their business, or who have innovated and proven that their innovation might actually be useful. And the reason for those investments is more to protect their business rather than to foster innovation itself.

> Large firms don't just exist because of power, but also because to manage an increasingly complex environment (scientifically, economically etc) large institutions are required to hold the necessary knowledge to function effectively.

Large firms don't exist because of power, but because with their power they can use resources to do things other firms can't?

Sounds like they exist because of power. And it sounds like unnecessary complexity is something they would evolve to create, not diminish, because it's a great moat for them to hide behind.

Is that what we're hoping to accomplish? Create a few hypercorporations with tens of thousands of people working bullshit jobs because they've shaped industries in such a way so as to force that bullshit to be the cost of entry?

No thanks.

I think Barron92 is drawing a distinction between "lust for power" vs "effective use of power".

To be frank that approach is historically best described as "nationally suicidal". Deciding to ignore advances because it would "unfairly centralize in somethinf other than us" tends to lead to no longer existing and either a subordinate replacing the leader in a coup and moderated because the other see that insisting on charging massed rifle instead of adopting them is a losing strategy or sticking to it and letting reality assert its brutal toll. Knowledge is power can be literal and it not being something you personally can understand is not the same as "nonsense" or "doesn't work". The benefits of capital investment are real and clear and "banning it" won't make things better, just the opposite really.

>The central dynamic around data collection in the information economy even amplifies that trend. Smaller firms are not going to reap benefits on the same scale as large firms can

I think data collection and company size is a very interesting topic. It's very hard to effectively anonymize data. It's been shown numerous times that just a little bit of extra information can undo that.

A large company, such as Google, can use the data they collect themselves. They are capable extracting value from this data through other products and ideas. A small company is much less likely able to capture the value from the data they have. So they sell it. They will anonymize it and do everything that is the standard at the time, but in the long term that data probably won't stay anonymous.

Would you rather have a megacorp use your data themselves or for your data to be bought and sold by different (smaller) companies that may or may not use your data? Which one would lead to less abuse of the data?

My intuition hates this but intellectually I’m forced to accept it. I’ve handed a huge portion of my private life to Google in the form of my browser, my phone, my search engine, my email, and a handful of other services. I arrived at that for the reasons you lay out - better all my privacy eggs in one basket where I know what they intend to do with it than to spread them around to several smaller orgs who may have more incentive to use it in ways I wouldn’t approve of.

One of the fundamental tensions I see in economics is this:

Cooperation enables greater efficiency. You don't burn resources in efforts that exist just to harm your competitor. You get all of the economies of scale of sharing information, expertise, and technology.

But competition incentivizes greater efficiency. A monoculture can stagnate because there is less risk from failure, less urgency to grow and improve.

I think the point of maximum efficiency is somewhere in the middle where there's enough scale that you don't have the economic equivalent of millions of subsistance farmers each using hand tools to hoe their own patch, but where there are enough independent players to create some urgency and make regulatory capture harder.

The hard part is that there is no stable equilibrium near that regionn of efficiency. Businesses naturally consolidate and form cabals and capture regulation, so you have to constantly push against that.

I pretty much completely agree with this comment. I would add: the sweet spot is different in different industries (and may different in the same industry at different points in history), and economic policy would do well to recognise that rather than advocating for a blanket policy for everything.

"Cooperation enables greater efficiency. You don't burn resources in efforts that exist just to harm your competitor. You get all of the economies of scale of sharing information, expertise, and technology."

Exactly if you consume or spoil all the resources you get Tragedy of the commons [1] "The tragedy of the commons is a situation in a shared-resource system where individual users, acting independently according to their own self-interest, behave contrary to the common good of all users by depleting or spoiling the shared resource through their collective action."

Market players can self regulate and cooperate for the sake of common interest if not then it becomes zero sum game.

[1] https://en.wikipedia.org/wiki/Tragedy_of_the_commons

> Size gives companies the ability to earn surplus profit which is turned into long-term innovation rather than short-term fighting for market share.

Except when companies don't, and instead use that surplus profit for:

- lobbying the Government for laws favorable to the company - funding laws and groups that favor breaking up the power of workers (e.g. no increase in minimun wages, anti-labor union laws) - investing that surplus into buying back the shares of the company, enriching its investors

There have been some investments in pure research and product R&D, definitely. But expecting companies to invest the majority of gains from centralization into research isn't what we've observed over the past few decades.

> This was Schumpeter's basic insight. Monopolistic competition is more dynamic than the free, small-firm dominated market. Size gives companies the ability to earn surplus profit which is turned into long-term innovation rather than short-term fighting for market share.

what was schumpeter's evidence for this?

Very insightful comment. I also focus on the element of the world we want to live in, and whether the status quo or where we are heading is really it.

They get this big by buying up that many successful startups. I don't know about microsoft because it was for my time but Amazon bought Kiva Systems and now it is called Amazon Robotics. This ensures Amazon is the only company able to extract value from Kiva's robotics. Their robots drive the inventory around in fulfillment centers where order get picked on a rate of 300 per hour. Because they had a double frog leap on the competition Kivy would probably have IPOed by now.

All of the technology companies have a specialized VC arm which rake up extraordinary talent before they become a competitor. Whatsapp was build with 12 engineers when they hit 1 billion users. FANG have a talent kartel.

Even with the price fixing scandal, TC is still much higher at the big corps than at small companies, isn’t it? Seems like the monopolistic largesse outweighs the competition factor, at least for tech work.

The economics are different in other ways too: a big company hires someone who’s good at CS fundamentals and gives them time to learn whatever stack, while a small one needs someone with experience in exactly the right version of a framework. A big company can hire people for long term R&D while a small one needs features right now.

It may be best for the economy that the spoils of monopoly be redistributed, but we are partly the beneficiaries of them.

This is a great take.

> What is the end state if we let this continue?

One of the pillars of capitalism is the idea of "creative destruction" (https://en.wikipedia.org/wiki/Whale_fall). That is, when a moderately-sized company falls apart, it's actually a long-term positive for the economy as a whole. It's decomposed, sold off, and its former pieces are repurposed for the good of all.

One purpose of antitrust law is to keep the cycle of whale falls going. If antitrust law is unenforced, the whales never fall, which has a negative impact on the fragility of our economy: if and when these megacorps become anemic, they threaten to take down the whole economy/whale-decomposition process with them.

Microsoft stagnated only because of leadership executing on a weak vision. Microsoft was at war with open source under a mantra of make the world Microsoft and their market didn’t care. It’s like Microsoft was executing from the same playbook as Apple before Apple discovered media licensing even though Microsoft was 20x larger. Outdated vision. By embracing the opposite approach they turned things around.

Break them up! The recent jump in engineers pay the past few years can be attributed to stopping this conduct by the large players:

>Remember the wage fixing scandal between Pixar, Google, Apple and bunch of other companies in the bay?

In addition when it comes to monopolies I always think of the Snapchat situation where a healthy, dynamic company comes up with a creative feature(stories) only to have the monopoly that is facebook completely rip it off and copy it in their own products thereby depressing snapchat's stock price and siphoning off its users. The fact that pinterest, twitter, and snapchat are not $100B+ companies and thriving is almost wholly due to facebook and its illegal monopolistic practices.

My thoughts on this:

- Microsoft stagnated or reversed computer software in many ways during the 80's and 90's. How long did we go without multitasking? (on the other hand, it was solely responsible for the commoditization of hardware which gave us countless benefits)

- being an employee in a company with robust competition is the best. (also for customers) Working in a company that is either too dominant or weak is an easy way to a job that lacks meaning.

That would raise a ton of questions. Most of the deals Facebook did to buy WhatsApp, Instagram and others where approved by the US government. But if those approvals can be reversed, why bother requiring them to begin with?

Google only develop Android and Chrome to fuel their ad business, those two product can’t turn a profit on their own, as proven by Mozilla. Would the lawmakers force a creation of companies who are doomed to fail?

Lawmakers should have been more careful about which mergers and purchases they approved. Many of the issues we face with big tech is because lawmakers are to inept at seeing the long term consequences of the deals they themselfs approved.

I don't think this argument is entirely justified. There is a "sandpile" effect as more acquisitions come about, plus the merging of profiles in the context of social media platforms. The net effect is definitely more than the sum of the parts, so the monopoly effect is much more than the sum of the individual parts' market shares.

Moreover, pointing out to earlier oversights cannot be a justification for an absence of oversight now.

> Moreover, pointing out to earlier oversights cannot be a justification for an absence of oversight now.

Got confused trying to parse this, then realized you are probably using the word “oversight” in two diametrically different ways in this sentence.

"Oversight" is its own antonym! https://en.wikipedia.org/wiki/Auto-antonym

> Google only develop Android and Chrome to fuel their ad business

Maybe, maybe not. Loss leaders are definitely a thing. Nothing forces them to be "doomed to fail" however.

> those two product can’t turn a profit on their own, as proven by Mozilla

Proven? Mozilla failed, sure. That does not mean its a foregone conclusion.

Actually your comment brings an idea into my head. What if loss leaders could be a great probe into whether or not the behavior is anti-competitive. I know loss leaders exist, but how do they exist in a positive aspect? They seem to purely exist in order to siphon off capital from one business arm in order to extinguish competition in the loss-leader's sector. It seems to be it gets at the crux if this issue.

Ding ding ding, we have a winner.

At least until you realize most bars utilize the same mechanism. It needs to be more of a combination of a high degree of departure from one's primary industrial/service vertical as well to really work as a canary though.

Loss leaders are fine when they’re the same business. Like McDonalds offering a loss leading burger or drink; or even a cinema offering a slightly loss leading ticket to make up on concessions.

The act of using loss leaders to destruct a market, beyond growing a business, is called “dumping”. It’s a very old tactic, some regulations do exist against it...

To add to it not being a forgone conclusion:

One anti-trust argument is that Mozilla couldn't succeed against Chrome due to Google's use of a monopoly position in Android and search results.

The beta version of Firefox was released in 2002, the same year that the final ruling came down on the Microsoft anti-trust case. The first release of Firefox was 2004, and it quickly beat out IE, and was the market leader until Chrome overtook it. It is hard to say what would happen if Chrome were not the default browser on Android, and Chrome ranking above Firefox in search results and Google Play.

Chrome was also advertised relentlessly, for years. For something which isn't being sold as a product, Google certainly spend a lot of time and money promoting it. And that was certainly not out of altruism. They wanted the control and influence, and let's face it, they have got it. Unfortunately, I don't think antitrust covers strong-arming web "standards" and related influences.

Android can be profitable. All the ripoffs like OneUI and MIUI have a shitload of ads. So charge them a small amount per device.

Chrome will have default search engine as Google. It is already profitable.

Not sure what you're on about. I have a Xiaomi Mi 9 and generally like MIUI - I see no ads.

They can be device and geo specific. Generally the cheaper the device, the more ads.

> Lawmakers should have been more careful about which mergers and purchases they approved.

What you're saying locks people into thinking that minds can never be changed with new information. That's wrong on so many levels.

I've found that posts related to anti-trust enforcement of big tech on here generally have these sort of sloppily-reasoned comments at the top.

The reality of "It is difficult to get a man to understand something when his salary depends upon his not understanding it" hits home in pretty much every discussion I have on anti-trust.

We know from the Oracle lawsuit that Android is a multi-billion dollar business. Android may be open source but Google Play Services is not, so that's a few dollars of revenue for every phone sold. In addition, Google Play app store revenue for 2019 was $21.9 billion, and Google takes a 30% cut on most of that.

Android is probably more profitable outside Google than in it. Apple gets something like 7 billion a year just for Google being the default search engine on their devices. Add in stuff like maps, hangout/meet, youtube etc. and that number goes up.

Which they also want to make illegal.

Ah but if Android was a separate company from Google, and Palm and Blackberry were in the field too, with separate app stores and revenue split between them, what would the landscape look like?

Palm and Blackberry failed before Android succeeded.

> Lawmakers should have been more careful about which mergers and purchases they approved. Many of the issues we face with big tech is because lawmakers are to inept at seeing the long term consequences of the deals they themselfs approved.

A) The pool of lawmakers is in constant flux.

B) Most lawmakers are bribed by the very companies that they seek to regulate.

C) Companies lie all the time in their filings, and the moment they have the flimsiest of justifications, turn around and do the exact thing they promised not to

D) People who make a bad decisions in the past should be encouraged to fix it.

> A) The pool of lawmakers is in constant flux.

Unfortunately due to the absence of any meaningful term limits, this is not the case. People who make it into Congress and play ball with establishment elites tend to stay there for their entire remaining lifespan.

> C) Companies lie all the time in their filings, and the moment they have the flimsiest of justifications, turn around and do the exact thing they promised not to

Yes, because they get away with it. Perhaps if the incentive structure were different we'd see different results.

97 of 535 Congresspeople are in their first term this session. That's a healthy amount of turnover every few years. The average term in Congress is for people serving after 1950 is 12 years, so two terms.

Yeah, some Congresspeople operate in "safe" districts and never see a challenger, but those are rare (and valuable).

https://en.wikipedia.org/wiki/List_of_freshman_class_members...

12 years is 2 terms for the Senate but for the majority of Congress, it's 6 terms.

The FTC and DoJ approve mergers and acquisitions not lawmakers.

> Google only develop Android and Chrome to fuel their ad business, those two product can’t turn a profit on their own, as proven by Mozilla.

Microsoft and Apple have shown that licensing an OS and selling cell phones can both be lucrative. Google's Android business does both of these things; if it were spun out on its own, why would it be doomed to fail?

I don’t think there’s all that much more money to be pulled out of Android, since (a) it’s available under a very permissive license and (b) it’s used all over the world by people who don’t have much more money to spend on their phone. Google already barely has influence over the OEM’s that choose to use it, case in point their recent spat with Samsung over the fact that Samsung keeps patching the kernel in ways that introduce security vulnerabilities. Samsung hasn’t stopped, Google has just started publishing the vulnerabilities to shame Samsung into maybe doing something about it. Is this a scenario where it looks like Google is leaving money on the table? And if this is all the money available from Android that spells bad news for an independent company, since we know from the Google v Oracle filings that Android has made Google something like $10B total over all the years it’s been operating. Android might break even, but I assume it’s operating at a loss so that Google can benefit in a bunch of less direct ways from the fact that it exists.

> [...] we know from the Google v Oracle filings that Android has made Google something like $10B total over all the years it’s been operating.

Over the last year and a half, Google has made over $46b in app revenue ($29.3b 2019 [1] and $17.3b H1 2020 [2]) which at a 30% cut is around $14b. That's just apps on Google Play — not counting other forms of media, Pixel sales, Android licenses (they can always re-license if it's too permissive), etc.

Do you have a source for that $10b figure? I imagine some specific part related to the suit has made much over its lifetime. It seems like Google's Android business as a whole has made much more.

[1] https://sensortower.com/blog/app-revenue-and-downloads-2019

[2] https://sensortower.com/blog/app-revenue-and-downloads-1h-20...

The $10B figure is for Android licensing and hardware sales, and doesn’t include app revenue or the play store, which OEM’s don’t have to include e.g. in China where Google’s services are all banned. If the Play store went with Android to a new spinoff company that would certainly be a more financially viable company, but that’s a much, much more invasive dismantling of Google than separating out Android the OS and hardware platform. Once a proposed division gets deep enough to be partitioning datacenters it becomes less a discussion of spin-off companies and more a discussion of abolishing Google and seeing where the pieces fall.

I think it’s reasonable to assume that in this hypothetical scenario, the app part of Google Play would get split off and follow their Android business.

Lawmakers should have been more careful about which mergers and purchases they approved.

The Lawmakers in question are not involved in the actual approval process. They create the rules, but sadly don't do the full rule making[1] nor do they administer the rules. So, this is their check on what the executive branch has done.

1) its amazing how many laws are passed with the actual rules determined by departments in the executive branch. That's why it is so important to look at the announcements in the federal register.

8-9 years ago there was a small movement to popularize Federal Register highlights on reddit. I hope it works someday. If there were a Federal Register fact of the day TikTokker, I would follow them

>Most of the deals Facebook did to buy WhatsApp, Instagram and others where approved by the US government. But if those approvals can be reversed, why bother requiring them to begin with?

Most of those deals had pre-conditions and promises by Facebook. Facebook has ignored most of the obligations with basically a "what are you going to do about it" attitude.

For instance:

>The FTC’s Bureau of Consumer Protection, in a letter to the two companies on Thursday, said WhatsApp must adhere to its current privacy practices after the merger, including a promise not to use WhatsApp users’ personal data for targeted ads.

https://www.reuters.com/article/us-facebook-whatsapp/faceboo...

So they directly ignore that requirement and try to claim "well it's in the T&C!" which they KNOW users don't read. And even if they did, end-users accepting a T&C doesn't give you some magical power to ignore a government mandate.

https://techcrunch.com/2016/08/25/whatsapp-to-share-user-dat...

> Most of the deals Facebook did to buy WhatsApp, Instagram and others where approved by the US government.

Facebook promised at the time that Instagram and WhatsApp would operate independently, which probably played a part in the govt. decision.

That promise has been broken. Seems fair that the approval might be reconsidered in light of this.

they also promised to not share data between services

which is also broken

I think the change is coming because Zuck couldn't make his end of the bargain with Congress.

It's a boilerplate deal. We've seen it with railroads, telecoms, sugar, cigarettes, etc. The industry gets a little too rowdy for the good of the country and other businesses. Congress gets them to testify for a few hours and makes sure that they tell a lie somewhere in that timeframe. Now, Congress has leverage on the industry. In return, the industry gets to write the laws surrounding themselves. They become, effectively, a poly/monopoly. Sure, the big gains are gone, but so are the losses. Your industry, yourself, and all your relatives and descendants will never be poor again. You make a tidy 3% profit for eternity.

Congress gave Zuck that deal. Clean up social media; this Russia/flat-earth/vaccine stuff has got to stop. But Zuck can't do it. The ML/AI approach gets you to 99.9%. But to actually clean up the mess and get all the plebs to take their vitamins again takes 99.999% (or something like this). You need real people monitoring the site, like China's 50-cent army. But those people cost way too much to make FB profitable. It's the same for all the social media sites. They don't have a business if it's a clean one.

It took a while (hey, it's Congress), but the folks on Capital Hill finally got the message that Zuck can't do it. But, look, it just has to be clean. The mess is affecting other businesses now. Those 5G towers are expensive and took a lot of investment, we can't have people just hacksawing them. So we're going to see the congresscritters start to find ways to get the job done. One way, per this article, is to split them up. Take all the Facial-Feature-books (NoseBooks? EarBooks? EyeBooks?) and clean them up or let them fail outright. I'm sure we'll see negotiations with Zuck in the near future.

But the end objective, powered by the hulking slow weight of congressional subpoenas, is the same: no more messes.

This works for FB but how about Google, Apple, and Amazon? FB's messes go beyond market domination as you point out. But for the others, where and when did they cross the line?

>as proven by Mozilla

Because Mozilla hasn't existed as a company for 20 years? The fact that they still exist despite multiple companies massively subsidizing their products for market share means nothing apparently.

90% of mozillas revenue comes from Google paying to be the default search engine. Seems more like a subsidy than a successful business model

Disclosure: I work for GOOG

Paying money for a valuable service is commerce, not subsidy.

Half of Google's revenue is paying people for traffic from AdSense to browser search bars and all in between.

Is my business nonviable just because it's funded by Google ad placements?

There is a pretty big difference between Google directly paying you to exist using money it makes from ads in a different product segment and making money for displaying ads through Google.

Do you know how the payment amount is determined?

I don't, but other such things are often structured as revenue share agreements, in which case it would not be exactly "ads in a different product segment", but rather "a fraction of the ad revenue directly attributable to Firefox". At which point it's really no different from how AdWords or the like work.

In theory you are correct. However, I wonder how much of Google paying is actually 'we better have a competitor to avoid anti-trust' rather than paying for the searchbar.

Mozilla should have gotten a smaller amount last time due to falling behind in marketshare, yet that did not happen.

> Mozilla should have gotten a smaller amount last time due to falling behind in marketshare

That assumes that the amount of money in the market stayed the same. But it didn't: the number of users of the internet grew. So it's possible that the actual benefit to Google of Mozilla's users using their search engine grew.

Disclaimer: used to work for Mozilla, not privy to details of the Google agreements.

Google pays other companies (e.g. Apple) for the same thing: search engine placement. Obviously Apple has a business model outside of that deal, but do you feel that the payment to Apple is also a "subsidy"?

If Chrome could not exist, Google would likely pay Mozilla even more to fund Firefox and get Search traffic (or pay MS for IE or some thing). Sure, it'd still be supported by the ads business, but that doesn't mean it isn't a profitable enterprise.

> Google only develop Android and Chrome to fuel their ad business, those two product can’t turn a profit on their own

The Google Play store has multiple billions of dollars of revenue. Revenue which comes from consumer spending, not ads.

An article from SensorTower (https://sensortower.com/blog/app-revenue-and-downloads-1h-20...) says that in the first half of 2020, people spent $17.3 billion through Google Play.

Assuming Google gets a 30% cut of all of that, it would be $5.2 billion of revenue for half a year, so annualized that'd be over $10 billion/year. Perhaps Google doesn't get a 30% cut of absolutely every transaction (different rules could apply to books, music, TV, and movies), but it gives you a ballpark number.

The Play store and the Android OS aren't the same thing, of course, but creating Android obviously helped put Google in the position to get that Play revenue. And if it were to stop developing Android, that would probably hurt Play revenue.

Do they spend more than $5B on android though? I don't know, though I wouldn’t be especially surprised.

Edit: I made a typo and left out “wouldn’t” which reverses the sense of my comment.

If they do, then it’s uncompetitive and it deserves to be broken up. We may not be in a mobile OS duopoly if Google wasn’t allowed to dump infinite amounts of money into a loss leading product.

In that case every device should allow users to trivially change their OS, or hardware manufacturers who make operating systems could be accused of the same thing. Many companies make products that don't make money but help promote and sell their products that do. My point is that os/app store metrics are too narrow rather than approval, because I am far from in love with the business model of any of the companies targeted by this report. Although I think the right move would be more consumer-friendly regulation rather than break ups.

Google dumps money into Firefox too. They can argue there is no special treatment for Android, and they could justify it after a breakup by the Android company serving “major ads” for Google.

>so annualized that'd be over $10 billion/year

Funny that is the amount Google paid Apple for being the default search engine.

> Google only develop Android and Chrome to fuel their ad business, those two product can’t turn a profit on their own

That's a good point. If we took these products to be public infrastructure, like roads, would we consider them being owned by ad companies a good idea? I'm leaning towards maintainence schemes for these public infrastructure projects similar to what we have for physical public infrastructure, like roads, rail, bridges, etc. Them being international would be an interesting challenge of course, but I think it's solvable.

I don’t want my government making a web browser, but I do want it to keep a competitive market for web browsers.

Making and financing open-source isn't the same thing. If you want privately funded browsers, they will be either subscription based or ad-oriented. Neither is good. Healthy competition is also hardly possible because of how bloated Web is. It's so expensive to maintain that we only have ~3-5 well maintained browsers.

> Google only develop Android and Chrome to fuel their ad business, those two product can’t turn a profit on their own

That's doubtful.

> as proven by Mozilla

Mozilla? You mean that one terrible company that only exists due to Google's pity? Or rather, Google's strategic philanthropy so that they can show regulators that they aren't a monopoly because Firefox exists.

The reason we don't see other competitors in the space is because Google's (and Apple's on iOS) monopoly makes it extremely difficult to compete. I could totally see myself paying for a high quality, privacy-focused, cross-platform, ad-blocker-friendly web browser. I wouldn't pay Mozilla, I wouldn't pay Google, and I wouldn't pay Microsoft, Amazon, or Apple. But I would pay a small software company who isn't trying to exploit me at every turn in the pursuit of unsustainable growth (or LARPing in Mozilla's case).

Maybe not everyone would agree with me, but I'm sure a lot of people would. Maybe enough to build a sustainable business. I feel like people are forgetting that a company doesn't need to be a Google-scale behemoth or monopoly in order to be successful and sustainable.

>Would the lawmakers force a creation of companies who are doomed to fail?

Strongly disagree. The current market structure with free browsers forces the users to pay for a browser with their private data, having little control over it. If the antitrust laws instead forced the users to pay for the browser directly, they would be in much better control, leading to increased competition and better products.

Not everyone can afford to pay for a browser. Get off your privileged horse and stop imposing your privacy argument on everyone. A mother in the bronx fighting for survival is not going to pay for a browser. The free browser is a godsend.

You don't need to be on a privileged horse to make both the privacy argument and the welfare argument.

You don't have to argue against them. There's options for public funding of such things. I know that's nowhere near where our political mindset is, but you could require a browser to be paid, but have government programs and subsidies that make the browsing free for most people. Then all the incentives are properly accounted for.

This will take 50 years to pass and countless kids will again be at a disadvantage while searching the Internet.

This is tricky. She is still paying for it because when she buys a box of cereal from the store, X% of the price goes to the ad budget, Y% of which goes to Google, and Z% of that goes to the Chrome developers. She also pays by getting a lower wage, because if most of the people had to pay $1/month for a browser, the salary cutoff point, beyond which people would simply not want to work, would be $1 higher. And then through supply/demand, it would slightly raise the average salaries. And, BTW, she would have one more opportunity to save money by not paying for a browser, and instead reading from a library computer. Or maybe using a cheaper volunteer-maintained Linux-like browser.

The thing is, money is just a token of passing value between people. If Alice is developing the browser and Bob is using it, there will be a mechanism to pass value from Bob to Alice to compensate for it. It can be either straight-forward (putting Bob in control) or centralized (through some social program, or ad revenue or whatever), but there will be one. Otherwise, Alice would spend her day playing ping-pong with friends, or cycling, or whatever people do when they don't have to work.

BTW, I do think that many social problems we are recently facing come from the fact that people are getting more disconnected from consciously producing value. If the abstract mother in Bronx had a clear path to making more money by opening a business and selling something to others, she would take that chance. And she would happily grow as a person and respect others who went the same path, regardless of their skin color. Except how many % of your monthly budget have you spent on owner-operated businesses vs. sector monopolies that treat people like drones and de-facto discourage professional growth to keep people more replaceable? That might also answer the question why the median salary in most areas barely covers rent, while the stock market is record high. Except instead of asking those questions and finding a way for people to contribute value in each others' lives without middlemen, we are turning tribal and trying to blame races, genders and political affiliations for a problem that truly affects us all.

All of this sounds great in theory but a dollar on food vs a dollar on a browser, I know what that mom is spending it on.

In practice it's junk food and brand name sneakers unfortunately.

As someone who was born to poverty beyond what even the poorest Americans have, and made it all the way up, I can see that most of the people's problems come from bad planning and lack of self-discipline. But, of course, the fact the I made it, makes me "privileged" and gives an easy excuse to discard my opinion.

You easily discarded others' woes to some lack of self discipline. Rather than acknowledging how hard even one mistake in that condition could be. Miss out on a loan, oh pay some exorbitant penalty etc. Cycle keeps on going.

Rather than showing empathy you're saying that "it must be their fault they can't make it". Don't pretend to know everyone's story. And if you feel this strongly, why don't you make a paid browser product ? Half the people here won't even pay for it, let alone the world.

> Would the lawmakers force a creation of companies who are doomed to fail?

I would think that Gmail, YouTube, and Search would be three profitable companies. But you can never underestimate the government’s stupidity.

> But if those approvals can be reversed, why bother requiring them to begin with?

certainly not to provide a guarantee of unknown economic markets in perpetuity.

As much as you would like to hold law makers accountable for not seeing into the future, It’s ridiculous to think law makers approving mergers lead to anti-trust violations.

Big tech companies are culpable because they unfairly use their market position to stifle competition to the detriment of consumers. Anti-trust is not purely about market size and dominance, it’s about the disgustingly gross behavior of the people in those companies with that type of power and influence.

Mozilla is an interesting case, but I don't think it's representative of the wider ecosystem because it's unique. It's a corporation which isn't selling its products, and it's also a nonprofit which doesn't use its donations to finance its product development. And its main income source is Google advertising money. While I have some fondness for Mozilla, it's on a path to failure in the long term. It's trying to be both a corporation and an open source project and it's failing at both. I don't think the Google funding has been at all healthy for it.

There is a demand for mobile operating systems and web browsers. While it is currently funded through advertising and other means, if this method of funding was ended, the demand would not vanish. The market would adjust to support that demand. After all, we did historically pay for operating systems and applications. Entire corporations' fortunes were made from software sales.

In many ways, I would prefer a return to this model. It's simpler and it's honest. I very much prefer to be a valued paying customer rather than a product, with all of the privacy and other problems which result. It also results in a better product since the companies' incentives are more aligned with the paying end user.

Absolutely agreed about the lawmakers being more careful. Looking back at the Microsoft antitrust trial, that seems small beans compared with what big tech is up to today. And even then, I personally think that a broken up Microsoft would have been better for both the company and the wider world. And I think that applies tenfold to the tech behemoths we have allowed to accrete today.

>Lawmakers should have been more careful about which mergers and purchases they approved. Many of the issues we face with big tech is because lawmakers are to inept at seeing the long term consequences of the deals they themselfs approved.

Lawmakers (in the US, the House of Representatives and Senate) have no role in approving or disapproving specific transactions.

In case you aren't American and are unaware, unlike many (but not all) nations, sitting legislators (lawmakers) may not serve in both the Legislative and Executive Branches at the same time.

As such, since it's the Executive Branch that executes and enforces the laws passed by the Legislative Branch, lawmakers have no say as to how the law is executed/enforced -- except by changing/repealing/passing laws.

Instead, the Executive Branch, in these cases, the Federal Trade Commission[0], the Department of Justice[1] and perhaps other regulatory agencies (such as the FCC[2], FDA[3], etc.) that have a particular industry under their purview make such decisions.

[0] https://www.ftc.gov/

[1] https://www.justice.gov/

[2] https://www.fcc.gov/

[3] https://www.fda.gov/

Conditional approvals are only valid as long as the conditions are held. It's the same as using open source software: You are bound by the license and if you break the license you loose the permission to use the software and maybe even have to pay a fine to the copyright holders.

Facebook willfully broke the conditions set for the merger, so now its time to reverse said mergers and if this means Facebook has to bleed then that's the price they pay for breaking the rules.

Can... Can we go do the same to Comcast? They fail to fulfill merger promises time and again.

Your point about more care during the merger is very true.

However, just because antitrust regulators think it will be ok doesn't mean they can't change their mind. If it did, then breaking up monopolies would be impossible.

Consistency in the law is critical (current US administration demonstrates this), but the economy is dynamic, and consistent principles ("no monopolies") are completely fine, and may give different results when applied to the same entities at different times.

It’s hard to see how that would happen after Robert Bork (and SCOTUS) reduced the criteria for antitrust enforcement to ”it causes higher prices for the consumer”

https://en.m.wikipedia.org/wiki/The_Antitrust_Paradox

Situations can change, as can our understanding of the situation. What seems benign at one point in time can seem like a bad idea with more information. Revisiting decisions based on new information or a changed situation seems like a hallmark of good governing to me.

Consider Freon. It was legal to use for a long time. With evidence that it's bad for the environment, it's no longer legal for most uses.

Then make very specific company-agnostic behaviors illegal, like with Freon. They didn't say "we ban company X from making any fridges", it was a general ban. If there's a certain behavior that's problematic (still not sure what specifically you would be referring to here), then ban that, not handpicked companies.

This is the TikTok crap all over again. They want to help national security and user privacy, but instead of banning data collection, they target TikTok specifically, because they know other US owned apps do very similar data collection.

> This is the TikTok crap all over again. They want to help national security and user privacy...

Am I the only one who thinks that TikTok was more about geopolitics concerning US/China and much less about user privacy?

Facebook selling your data to advertisers is annoying. TikTok et al vacuuming up data to be stored by the CCP for things like blackmail[0] is horrifying and basically geopolitical chess moving to give them leverage on things like putting Muslims in detention camps [1]. Treating the two as equivalent is somewhere between intentionally ignorant or acting in bad faith.

[0] - https://www.theepochtimes.com/china-has-a-database-on-americ...

[1] - https://www.msn.com/en-au/news/other/china-confirms-death-of...

> Facebook selling your data to advertisers is annoying.

Facebook selling your data to advertisers is also horrifying. American "businesses" accept foreign investments and money all the time. Nothing stops those same countries from buying data from Facebook. The only difference between that and TikTok is that money is exchanged. It's just as horrifying.

Unlike the CCP, Facebook isn't literally harvesting organs [2] or implanting intelligence assets [3]. Facebook shouldn't be reckless with user data, but when it's users start getting black bagged and having their vital organs removed, then we can compare the two.

Mind you, all the major foreign companies are already banned in China so they can't possibly be involved.

[2] - https://www.nbcnews.com/news/world/china-forcefully-harvests...

[3] - https://thediplomat.com/2020/09/two-recent-alleged-episodes-...

> Facebook shouldn't be reckless with user data, but when it's users start getting black bagged and having their vital organs removed, then we can compare the two.

TikTok's association with CCP is horrifying, yes.

Facebook's hands aren't clean either.

There’s levels of clean.

No they just interfer with local politics via lobbying, i.e. buying politicians, i.e foreign agents.

Facebook isn't selling your data. They're selling access to you.

That's an arbitrary line to draw, and really misses the forest for the trees.

It makes little difference in the end if it's a corporation blackmailing and ruining a person's life or a government. Facebook can share your data with whoever they want to, so the government can probably get it anyway. We have no idea who Facebook shares data with, who inside Facebook can see it, etc. Every company claims they have great security and follow best practices, until it's found out that they don't, so taking their word for it that your data is safe is naive.

In both cases the end user is powerless unless they stop using the service altogether.

Um, Advertizing is not the same as blackmail. Not even close.

I don't see how those two things are really any different. Would it be okay if the CCP bought Facebook's data and used that to blackmail people? What if Facebook itself decided it wanted to blackmail people, is that any better? What if China just uses that information to sell to advertisers, is it okay then?

I mean it obviously was, that was kinda my point. If they cared about user privacy they would've passed a user privacy bill instead. I should've phrased it "They pretend to care about national security and user privacy..."

As one youtuber put it, if the CCP wanted to cause chaos in the US, one thing they could do is have an "accidental" data breach and disclosure of every TikTok users private communications. Or like FB use the platform to influence what people see in order to cause unrest. So yes? It's a geopolitical thing and not about user privacy.

Surely the CCP could get better value for $75B rather than burning one of their tech stars to the ground.

A data breach has rarely burned a company to the ground. The other option of using it for direct influence is probably a bigger threat anyway.

> [the CCP could] have an "accidental" data breach and disclosure of every TikTok users private communications. [...] So yes? It's a geopolitical thing and not about user privacy.

That sounds like both.

From an individuals point of view yes. But if the US government cared about our privacy they'd do something about FB, Amazon and Google.

More effectively, they could use tiktok data to blackmail specific people.

If the CCP wanted to cause chaos in the US, they would stop container ships from leaving China bound for North America.

the problem is that unlike chemical compounds, no two companies have exactly identical business models.

banning "specific" behaviors is the exact opposite of what you want, because then companies will rules-lawyer their way around it in the corporate equivalent of "I'm not touching you!"

what you need is strong bans on general patterns of activity such that companies decide it's better not to try and find the exact limit and just stay the hell away from it. The model here is fincen "structuring" - it is illegal to avoid financial controls, and it is illegal to try and find ways to get around the monitoring regimes. If you think you've found a clever way to avoid it, that is itself illegal and they will fuck your shit up.

https://en.wikipedia.org/wiki/Structuring

It's not a popular sentiment here on HN where many people's salaries depend on pretending not to understand it, but this is what GDPR gets exactly right. There isn't a prohibition on specific usages of data, there is a blanket ban on using private customer data for any purpose that is not directly related to the provision of serve. People pretend not to understand it because they want to keep doing the things that are prohibited but the regulations are actually quite clear and quite simple. Could the service be provided without the use of the data? If no, use it. If it could, don't use it, and don't collect it. That's the bright-line. If you don't attempt to push the limit, structuring style, then you won't get in trouble.

Does anyone else feel like releasing this report prior this close to the elections is a miscalculation on the part of Democrats?

Like it or not, these tech companies hold a lot of influence via lobbyists as well as their platforms themselves. I’m not saying they will actively try to get a candidate elected who is more friendly to their agendas. However, I don’t see them going out of their way to prevent others from doing it knowing what the future holds should there be an administration change.

I’d also be surprised if moderate voters actually give a crap about anti-trust issues, at least not enough to sway their vote one way or the other. If anything, it could have the opposite effect of turning off voters that see this as government overreach, since many moderates are fiscally conservative.

This post is out of curiosity and to hear the thoughts of others, so hopefully it isn’t taken the wrong way.

> I’d also be surprised if moderate voters actually give a crap about anti-trust issues, at least not enough to sway their vote one way or the other.

It’s not about anti-trust per se, that’s just an excuse. The goal is to hit the big tech where it hurts, and effectively diminish their power for a long time. This is very popular attitude among Trump voters.

To clarify, are you saying Trump supporters want to see big tech broken up? If so, I just can’t see this persuading a Trump supporter to change their vote.

Me neither, I was just clarifying the stance on the topic of people whom HN crowd has very little interaction with or understanding of.

Biden has former Google/Fb/Apple lobbyists on staff[1], Harris comes from California. I doubt that Biden will take an overly aggressive stance on tech, or at least more aggressive than the Trump campaign would, section 230 reform etc.

[1] https://theintercept.com/2019/05/06/joe-biden-pac-coporate-s...

I think that’s a good point. The timing of this announcement just seems a bit bizarre, given the stakes. This could have easily been announced next month.

One thing that occurred to me is the potential that Democrats could be using the threat of anti trust actions to pressure the tech companies to be more proactive, re: misinformation prior to the elections. Guess we will know if they make any significant policy changes over the next week or two.

Miscalculation? No. It's just drumming up support around a policy they think people broadly support (but actually don't care about). It'll be tough talk for a bit, and then representatives will quickly remember where those campaign contributions come from.

I get in theory why they would do it, under pretty much anytime other than the month before a pretty consequential election. The timing of this is what seems a bit suspicious (in addition to the points I made and you made, re: campaign contributions).

Pelosi - among other politicians - is pretty savvy and I suspect other things are going on behind the scenes. Either that or, in my opinion, this is a pretty boneheaded move.

Maybe they want more campaign dollars for re-election and plan to get it from lobbyists who want to lobby against their legislation? The monopolies have, almost by definition, the deepest pockets.

The steady share prices for these stocks do not indicate that this is concerning to investors.

I'm feeling a pretty strong tech backlash growing, especially with the social dilemma opening a lot of people's eyes. I don't have the polls, but I'm sure the strategists are seeing good numbers for standing up to big tech.

I don't know what their endgame is but it seems they timed the release well strategically. Two hours earlier, Trump tweeted that he was ending stimulus negotiations, which led to a big market selloff into the close. Any selloff of FAAMG attributable to the breakup big tech announcement will be unnoticeable, but may accelerate or extend an overall decline which could pressure some connected fiscal conservatives to call for continuation of stimulus talks, and prompt some leans-right voters to consider market decline. So much of the messaging all around seems bizarre that I've started to assume it's simply 'optimized,' and it registers with some subset of voters, making them more likely to vote. If it all seems disjointed, you're not the audience, you check both boxes of 'will vote' and 'vote decided.'

I seriously doubt that your average down-and-out Democrat think tech monopolies are a pressing issue - any more than I think the average hillbilly Republican thinks that reducing taxes on the 1% is a pressing issue ;)

This report is pretty clearly bipartisan if you read it. There’s a growing consensus on these issues.

"He agreed with some of the report’s recommendations, such as (...) allowing consumers to take control of their data through data portability and interoperability between platforms."

This is the key. If I'm able to talk with my WhatsApp friends from Signal, or migrate my whole Facebook account to another platform, it would make it much harder for the companies to create and keep their monopolies.

If I were a lawmaker, I'd focus my time on how to do this properly.

this is user-generated content and it should belong to the user, i.e. they should be able to export it in an interchangeable format, like we had RSS a long time ago. But it would also mean the end of lock-in for many companies, so i don't think they 'll allow it

We already have export in interchangeable format, because of the GDPR, but it doesn’t make people move their data because it’s difficult, and often, there isn’t really anywhere to move it to.

What would you import your Facebook data, your Strava tracks, etc. into? Even if there were a product with feature parity, your friends still would be on Facebook, and all your old URLs would die.

Right now that data is not truly equivalent. E.g. twitter/fb have email addresses, and use them to notify friends, but they won't give you your followers' email list. There could be a way to ask your followers to give them for example, or at least a hash of it, so they can be discovered in another network. The issue here is that whatever value is in friend lists /subscribers is locked into these companies, but in reality it's the users who have earned it.

There is a privacy problem there. If I can export my social graph from Facebook, that isn't just information about me -- if you are my friend, then my graph also contains information about you (specifically, that you are my friend).

If enough of your other friends export their social graphs too, then it wouldn't be too hard to reconstruct yours, even though you never exported it yourself or intended to share that information with other social networks.

Nothing on Facebook is private right now. So, what exactly are you concerned about?

I can see the SPAM argument, but splitting things up across multiple networks makes it harder to reconstruct your social graph. Either way getting access to a single site gives access to your fiends, but now you need to compromise multiple sites to gets your friends of friends list.

When you go down this rabbit hole enough though you realize how totally inept pretty much every government has been in facilitating standards and supporting infrastructural software throughout the tech sector since its inception.

Projects like BSD, ARPANET, etc were largely public money going into public software that was liberally licensed. Huge swathes of modern tech are built on foundations of public funding. But by and large today there is absolutely no interest or investment at the state actor level into infrastructural software - Linux is built by corporate involvement, html by whatwg, and fundamental technologies like how ubiquitous Blink and V8 are becoming throughout the software stack are corporations acting as authorities on structural software because public actors have totally failed to fill a necessary role in providing these interoperabilities for decades.

The IETF was publicly funded before 93 but became a nonprofit thereafter. There are now dozens of similar foundations relying on largely corporate sponsorship to develop standards - new ones like Matrix, old ones like XMPP, or are just largely dumps of corporate will on our collective experience like PDF.

Activitypub is a W3C standard but the W3C is basically a private club for university departments at this point. Again, it had public funding and involvement in the 90s that atrophied over time.

The consequences of our fragment ecosystems built largely on lock-in for-profit motives have wasted a billion man hours of human labor reinventing the same wheels and have produced a software ecosystem where free software is predated by the most powerful and wealthy companies to ever exist on Earth to produce insane profits never before realized. And its largely a consequence of totally non-existent climates of public infrastructural software development being funded and paid for by tax revenues.

If humanity survives in some form long term future generations will look back at this period and ask "how were these monkeys so stupid as to not collectivize coherent standards and have them deployed ubiquitously to make the benefits of software more available to all and to push the envelope of progress faster?"

Hell the premier way to do complex research or theoretical experiments in software today is with CUDA, a holistically proprietary toy of Nvidia used to sell 5000% marked up workstation graphics cards because public institutions have been totally unable to even recognize that's a problem let alone do anything about it.

Its a problem the west is having in many industries. The cult like idolization of the profit motive as a means to every end means roads crumble, bridges collapse, Internet infrastructure goes undeveloped, transit is nonexistent, housing is a nightmare, and software is in a perpetual wild-west state of eating itself reinventing the same wheels in perpetuity to try to appease gambling addict shareholders.

The problem is which technologies to fund publicly.

The market, while far from ideal, tends to invest into tech that works, and often to the tech that works well. Those who choose and insist on unsound tech risk going bust.

Governmental agencies act differently. Sometimes they seem to have the right structure and the right people at helm, like DARPA used to, and they provide great results. Sometimes this is not the case, and we e.g. end up with B-2, F-35, or Zumwalt.

With all that, I do support the idea that research done on tax money should be free to use for any US company, without patent restrictions and so on, even if not made public domain.

If we survive into a long term future it won’t be because we froze today’s technologies into “standards” and hobbled ourselves to them.

Can someone help me understand what the problem is here? I, like billions of other people, am a heavy Google user: I use gmail, Google search, Google maps, Youtube, etc. I don't pay a cent and the quality of the service is impeccable. Competition is good to benefit the consumer at the cost of the producer. But in this case, I, as the consumer, pay nothing for my services and am happy with the quality of those free services. What is the antitrust trying to achieve? "When you don't pay, the product is you", they say. Ok, fine, so maybe the "true" consumer is the advertisers. Is the antitrust here designed to benefit the advertisers? Who is Congress trying to help here? Are they simply punishing success for the sake of punishing success?

Those free users are the product. Just because you’re not paying money doesn’t mean there’s not value.

“Are they simply punishing success”

You could have said the same about Standard Oil and Carnegie Steel. The problem is when these companies get to a size and market position that enables extremely anticompetitive behavior like what we’re seeing with app stores and all the purchasing of other successful companies/engineers in the space.

While it's nice that your needs are met, others do exist in this world. It's not terribly difficult to listen to them. Why do you feign ignorance?

Ultimately trust busting comes down to the impact on the consumer. A monopoly is defined as having market power, exclusionary conduct and business justification (1). In theory, if consumers are happy, nothing happens.

As you state with Google, you're pretty happy with the services they provide. At some point, Google stops trying to compete with better products and simply uses its dominate position to takeover markets. For example, Google Flights. Is Google Flights a better product? Does it save me money or provide more options? I honestly have no clue but the fact that Google can just integrate with the top of search, pushing down the market tested existing companies is bad for consumers. Google can just singularly introduce worse products and instantly gain significant market share by putting them at the top of search. Similarly, they have an infinite adwords budget.

As for punishing success, I wouldn't frame it that way. In general, if the companies split, it will make way more money for the existing equity holders. They get shares in all the new companies and they tend to do well.

1) https://www.ftc.gov/tips-advice/competition-guidance/guide-a...

You're right that big companies should only be broken up if it would benefit consumers. The point I'd raise is first that you may be unaware of better alternatives because of anticompetitive behaviour by Google and second by Google's very nature they could limit the discoverability of competitors.

(I have no idea whether better competitors exist or whether Google could, let alone does, hide them.)

Antitrust cases are hard to generalize I believe. If an airline lowers prices on a route following the entrance of a (smaller) competitor, it's hard to know whether that is or should be illegal without knowing a whole lot of specifics.

> you may be unaware of better alternatives because of anticompetitive behaviour by Google

google provides all of the best services in each of its major consumer categories unless you value privacy, except when there's a major competitor. there's no hidden gem better than youtube that would scale as well.

>you may be unaware of better alternatives

Better is in the eye of the beholder.

> the quality of the service is impeccable

Well I disagree with that, and perhaps that is the foundation of the problem. When something is easy to use, and free, you will miss the other stuff that is out there, or you might stifle the progress and competition of the other stuff that is out there.

There are much better platforms out there for email, documents, video, and more, but you may not know they exist so you are satisfied by something that is honestly fairly mediocre at this point.

And, how do you find Google's competitors? Are you going to use Google's own service, Google.com, to look for alternatives to Google? Well there's a problem right there.

I’d use bing? Or DuckDuckGo? I’d use one of those on Firefox on a Mac.

>There are much better platforms out there...

Your argument is stop liking what I don't like.

>how do you find Google's competitors?

Google search provides pages and pages of alternatives to Google services.

US companies can no longer innovative in these areas and Chinese began to take over. TikTok is a prime example, if nothing changes the USA will have to use muscles(like Trump is trying to do) to keep their internet companies relevant or have its citizens use Chinese networks. Both options are bad for the consumer in the long run.

TikTok is only one example but soon others will come. The quality of Gmail and Google Search is not what it used to be, Huawei are aiming for Apple-like integration on their platforms(and on Android, there's no one else doing it) and so on. Google And Facebook are simply printing ad money, I don't even remember what was the last "Wow moment" with them.

I think we give too much credit to an application that plays videos on a phone. Just because its popular and used by millions doesn't make the app and the idea impressive. Vine was excellent and it was killed. You can talk about neat UX/UI ideas in Tiktok, but it's not that groundbreaking. If anything else, its the infrastructure that allows them to scale it is impressive. Both FB and Google are masters at scaling so its a non issue.

Innovation in China will continue, no doubt. But let's put things into perspective. You're comparing a $40b app, that is Tiktok (similar to Airbnb valuation) to completely different monsters - Some trillions in valuation (1.5T Microsoft, 2T Apple, 1T Google, 700B FB).

>I think we give too much credit to an application that plays videos on a phone

And what Youtube or Instagram does? Doing laundry on a phone?

If it was a simple UX tweak situation the USA wouldn't be using it's muscles to force a take over by an US company. Unless of course there are no designers left in SV due to high rents. How much was that to take over TikTok USA operations? 50 billion? I am sure that you can hire designers for that money.

And any argument over a strong current situation reminds me of this: https://www.youtube.com/watch?v=eywi0h_Y5_U

Exactly my point - it is the scaling that makes it impressive as I stated. And Google/FB are experts at doing just that. Lol at the video!

I am not defending US Gov. All I am saying is getting traction is extremely valuable and those are the numbers you hear (ARPU, etc) in quarter conference calls. $40 billion dollars is for the users not for the stupid UX/UI.

> the USA wouldn't be using it's muscles to force a take over by an US company

This is almost entirely Trump and his stupidity. Don't think he truly represents the USA, once he is out we will almost certainly have to wash our collective hands of him

And TikTok has yet to prove itself as more than a passing fad. Someone will add a new twist on TikTok's/Vine's formula and the kids will be off to obsessing over something else. They've already done so with Instagram, Snapchat, Vine...

>Don't think he truly represents the USA, once he is out we will almost certainly have to wash our collective hands of him

You can't wash your hands of him, He is democratically elected as a representative of you.

But I agree that TikTok is yet to prove itself. That said, I think it is an example what is about to come if the USA doesn't close off its market(which will lead to others close off their markets to foreigners and the internet will become balkanised) or break up its current Internet companies situation. Sure, FB and Google will continue to earn an enormous amount of ad money in the years to come just like Nokia continued to sell it's phones until it couldn't anymore.

> You can't wash your hands of him, He is democratically elected as a representative of you.

What I mean by that is that his actions do not represent the American public at large. The nature of his victory is highly suspicious and he did not secure a majority vote. I don't know how much you know about our politics but there is a lot of nuance that you are glossing over.

Additionally, his popular support is at an all-time low. Election polls for 2020 show him lagging considerably behind Biden. At this point he is very likely to be one of the few presidents that will not be elected to a second-term; the first in 28 years.

Whatever propaganda you are reading or seeing or hearing about us, you would do well to question it

>He [Trump] is democratically elected...

False. The election of the President and Vice President is fundamentally undemocratic (by design). Only Congress is democratically elected.

Here are the problems

A) Google pushing its own services over better services owned by others

Example: Yelp was the best reviews service for quite a while

Google was stealing their data and putting Google Reviews first in results

This was an obvious negative for customers as instead of getting more reviews and better reviews at Yelp they were getting lower reviews and lower quality reviews at Google Reviews

B) Google doing secret investments (such as in RetailMeNot) and sending customers to RetailMe Not instead of other discount sites by putting RetailMeNot #1 in every search result

3 to 4 years later REtailMe Not was sold and only then did it become public knowledge that Google Ventures had invested in it

Google was not looking at who had the best deals for each retailer and putting that first. It was putting the company it had a personal stake in, first

C) Companies that were growing very fast, such as Vroom and were considered dangerous

Google was inundating search results with negative reviews and negative posts about such companies

This was inaccurate and misleading. That particular company ended up IPO'ing

However many other that were offering customers a great deal/better service got hurt by Google search engine manipulations and were not able to survive

D) Google miscategorizing and manipulating results for potential competitors

This is the law suit and the European fine that Google got

There were companies like Findem that had to close down because Google 'disappeared' them from search, as they were potential competitors

So instead of what is best for customers - multiple search engine options - Google was hiding what it considered dangerous competitors

E) Pushing Chrome and taking market share and building a second monopoly (in browsers)

Microsoft had an anti trust law suit and was almost broken up for pushing IE using Windows

Google is doing EXACTLY the same thing

Google Search Google Docs all google properties are constantly pushing Google Chrome

not based on any criteria other than Google owns Chrome and sets Google Search as default browser on Chrome

Basically, the list is super long

Google is using the defence that users pay nothing

HOWEVER, it is taking user data and monetizing it and another company can share that monetized money with users OR can provide a better service

We don't see it clearly because it is being done in almost every area

any promising company that might do well, is attacked or hidden

In China we have lots of new companies come up

However, no such rise in US

US look at companies going IPO. It is almost all Enterprise

Why?

Because Google, Amazon, Facebook are doing a very effective job of stifling innovation and killing off any fast rising company via various illegal means

If not for the Apple App Store we would see even fewer customer side/consumer side startups

Google is using control of Google Search, Android, and Chrome to keep out ANY company that competes in any way with Google (and google does lots of things)

Amazon is using control of marketplace to make sure no 3rd party sellers can become very big

Facebook is using its monopoly in social media and understanding of what is growing fast to buy up anything that it considers dangerous, and limit those that might become dangerous

These are all well documented

Your questions are postured like Big Tech talking points

This claim is downright laughable -> the quality of the service is impeccable

For many Google properties there are much better options

We can see many things such as Google+ closing down

However, other very good upcoming products are never given a fair chance

We should completely remove 'advertiser' angle. That's a false direction

The right direction is

What is best for customers?

Is Google interfering with that?

If so, then it is abuse of their monopoly position

As simple as that

Just because you offer a free service, does not mean you can do anything illegal you want and claim 'customer is not paying anything' so it is not an abuse of monopoly power

Basically what Google is doing, or trying to do

-> Screw over EVERYONE who is on the customer facing side

If you run ANY company that is growing fast and adding lots of customers, then Google wants to stop your growth/kill you

because they consider every fast growing customer/consumer side company a threat

-> Most startups don't realize this fully. The large tech companies are attacking EVERYONE with a divide and conquer strategy

They know that tech is very fluid and things can change very quickly

So they basically have a list of 1,000 to 10,000 consumer-facing companies they consider dangerous (possible rivals)

and they are manipulating search results, hiding organic traffic, and doing other attacks against ALL of these companies

When it becomes too big, or too late, then you see things like the Attacks against Tik Tok

Lawmakers did not just wake up one morning and decide to push antitrust forward. I would love to see which companies or people are pushing for, or against, it.

Yelp was singularly active in bringing scrutiny to Google years ago - https://www.cnbc.com/2017/07/01/yelps-six-year-grudge-agains... "antitrust law is boring, complicated and political"

I think antitrust has been asleep for decades but the shear scope of the damage of these monopolies is forcing congresspeople to finally ignore their special interests. Bear in mind, plenty of people ready to move forward on antitrust now are people literally receiving campaign money from Google. It's just not working anymore: Congresspeople aren't completely stupid (well, except Jim Jordan) and they can see their jobs are under threat due to Big Tech interference in the media and politics.

So what? Considering how big these companies are, it's hard to claim that they can be bullied by lobbyists.

I'm not claiming they are being bullied by lobbyists. I'm claiming that the antitrust arguments have a long history of political motivation, as opposed to broadly beneficial economic motivation.

It would not surprise me to find out that telco lobbyists had a lot to do with this. It's not shocking that this whole movement to break up FAANG started after the Net Neutrality loss.

Telcos have largely been able to avoid breakups and scrutiny for years because they invest very heavily in lobbying.

No, they invest very heavily in cooperation with the NSA. Much better than lobbying.

>Telcos have largely been able to avoid breakups and scrutiny for years because they invest very heavily in lobbying.

Big Bell has been broken up a couple a dozen times. It keeps getting back together because communication is a natural monopoly.

This is one of my favorite classics of Hacker News: searching for the nefarious companies behind the anti-trust action.

It's interesting because it's clearly an attempt to take populist suspicion of corporations and redirect it towards opposing a policy that would reduce consolidated control in markets.

It would be a wholly incomplete picture to think that such actions are happening organically. Whether antitrust is justified or not, ignoring the behind the scenes maneuvering will do a disservice to the discussion.

Only if the behind the scene is backed with facts.

I don't think it'll work anyway. Previous actions to disassemble companies worked because they were the only ones able to serve the customer.

Phone companies, operating system installed on computer, airlines, railroads, etc.

The behavior here is not related to the companies being big.

Break up a tech company, and some other company will equally likely feed you the same info, find your personal data to sell, deliver you biased news, etc.

You've solved nothing.

And I hate to be the bringer of discouraging news, but the reason tech companies are succeeding at selling us our own data is that we want it.

In every click we make to like something, buy something targeted at us, listen to media we like, we teach companies or algorithms that we want what they have. And so yelling at the company for delivering what we have shown we want is a bit like yelling at yourself for eating so much ice cream.

Until we put down our phones and stop reinforcing the outcome, we're a big source of our own problems. You might as well try to change human nature.

This is fairly disingenuous. Our online behaviour is driven largely by billion/trillion dollar companies microtargeting people like you and manipulating our emotions and our neolithic era brain parts.

Adspending is way overvalued. Ad-people are buying adwords for their own company brand and do Powerpoints of the impressive conversion rate.

Furthermore, showing ads for something I am allready looking for is probably not as profitable as the adspacebuyer thinks. They underestimate the chance of me buying their stuff anyway.

And I hate to be the bringer of discouraging news, but the reason car manufacturers are succeeding at selling us polluting gas guzzlers is that we want it.

Every time we buy an SUV and pay for gas, we teach companies and their executives that we want what they have. And so yelling at the company for delivering what we have shown we want is a bit like yelling at yourself for eating so much ice cream.

Until we start using electric cars or transit, we're a big source of our own problems. You might as well try to change human nature.

---

Yeah nope, this insight from the '80s didn't age well. Regulation has repeatedly fixed broken markets, and the whole ad tracking / data broker industry is beyond broken.

The real "human nature" is responding to incentives. Applies to companies too. Adjusting those incentives with regulation has a long track record of being effective when done with even a modicum of goodwill and competence, which despite politicking is usually the case.

Of course, breakups of individual companies won't achieve much as you said. But that doesn't justify jumping to "it's up to individuals to change their behaviour" mantra. That's exactly the bullshit that the plastics industry successfully used to pollute the whole planet with their garbage, blaming individuals for not recycling. You can debate the morals of that kind of blame, but you can't deny that it's completely ineffective at solving the problem.

I disagree.

There's different ways of solving techy-techy stuff. One is to have 2 or less mega-platforms (e.g. iPhone/Android is a duopoly, Google & Facebook are monopolies) that are barely compatible.

The other is that the ecosystem is so open that competition is easy - e.g. email.

The fears of some lawmakers about "if we break up US companies, then Chinese alternatives will take over" are misguided. This is pretty easy to prevent by (1) mandating compatibility (e.g. all social media must be open / federated, all phones must support all app frameworks) or (2) simply banning "rogue" companies (e.g. Chinese or in general those linked with security agencies and/or totalitarian regimes).

In the long term, in particular (1) would IMO foster a lot of competition, and be hugely beneficial to consumers. In part because the market would be much more open - if some company wrongs you (sells/leaks your data?) you just move to another company.

Your argument is exactly the problem. The fragmentation is what would happen, and the consumers suffer from it rather than benefit from it. This has been proven over and over again by history. When AT&T was broken up, there were like a hundred smaller players, incompatible with each other, and everyone has to pay extra cost to communicate with each other. It is a backward step for the society. The consumers benefit from nothing. Don't just assume more smaller companies means better competition and better for the consumers. It is not necessarily true.

I wish they would break up the big ISPs too, for all their anti-competitive suppression of alternatives.

Not only anti-competitive, but also far more privacy invading.

Never gonna happen, NSA needs fewer bigger ISPs.

That's why they threw Qwest's CEO in prison and loaned CenturyLink the money to buy Qwest. Go ahead, check CL's SEC filings. They've had those mysterious NON-REGISTERED, NON-TRADEABLE Qwest acquisition bonds on their books for a decade now, all held by a single, non-disclosed entity. Gee I wonder who. Then they pulled the same stunt in order to buy Level3.

https://ir.centurylink.com/news/news-details/2020/CenturyLin...

Would breaking them up do that much? They already barely compete with each other. Seems like making them provide open access to any other ISP would be a better way to go about it. Separate the infrastructure from the service.

It's just too bad we don't have more municipally owned infrastructure.

>It's just too bad we don't have more municipally owned infrastructure.

Yeah that's what I really want, municipal fiber. The big ISPs are constantly suing municipalities that try to build that though.

Two-sided market and multi-sided platform create situations where old antitrust paradigms break down and regulators must step in hard.

It seems still be uphill battle to explain this to the public, because at least social media comment sections are filled with 'what it is to me' anecdotal thinking in personal level that is "Not even wrong".

Meh, it's straightforward. Platform should not compete on their platform. The incentives to muck around is too high. There is not a reasonable economies of scope argument here, in practice this self dealing tends to have lower quality products.

> Platform should not compete on their platform.

This is just one issue. Not even one of the the major ones.

Do tell?

Right, so Target, grocery stores, hardware stores, and everyone else, can't sell their own value products too then right? Seems like those shelves are platforms to me.

I'm fine with 'big tech' not being able to sell products/services on their platform, but i want the same standard for other businesses as well.

a store (even a multi-location physical retailer) is not the same thing as a digital platform

the crucial difference is due to the digial aspect. digital "material" does not have physical contraints. this simple fact changes everything.

Sure they aren't the same thing, but doesn't mean you can't manipulate the physical layout among other variables in order to push your own products at the expense of your competitors.

You also have access to sales trends for competitors, giving you a leg-up in market research (i.e. Target decides to enter Chips market because they see Lays data). I mean it's not that dissimilar to what Amazon does, it's just done in the physical world.

It's not the same as what Amazon does, not even close.

Target owns the products on its shelves so it can do with them what it wants, even give them away for free. Importantly, the product manufacturers are not its competitors because they aren't in the retail business; they are in the wholesale business of making and selling to retailers.

Amazon does not own the products in its marketplace. The sellers in the marketplace do not sell their products to Amazon. They are all sellers, like Amazon, and that is why Amazon's practices are an antitrust issue.

Potentially — loss-leaders, company towns with company stores, and state-run businesses all come to mind — but at the moment I don’t know of any examples of physical stores having this problem even across a single capitalist nation.

First-party apps made a lot of sense in the early days, and still do for brand-new features, but I think it would have been better if Apple had promoted existing AR tape measures rather than preinstalling their own; ditto time monitoring.

Yeah, I mean why have nice built in stuff - far better to go and buy everything separately. For instance cars should have seats, stereos, gps, etc... it'd be better for you to go to 3rd party sellers and buy them.

I think the analogy in this case would be a car company which gives you a choice of three different types of seat, five different types of stereo, and the option of built-in GPS from whoever when you configure your new car in the first place.

I’m not even against first-party apps, I just want them to be competing fairly instead of being mandatory pre-installs (with the exception of security-critical parts like the OS, the phone and SMS apps, the wallet apps, the App Stores themselves; but even then, there is room for them to be opened securely, it is just harder to do right, and should probably be replaceable later rather than during setup).

> at the moment I don’t know of any examples of physical stores having this problem even across a single capitalist nation.

Retailers bully wholesalers and manufacturers all the time when they represent a significant amount of total sales.

You always hear stories of "this was great until the bean counters told us we needed to shave 25c off the production costs and that killed its longevity." What you don't hear is that the bean counters were told by the sales managers that the retailer wouldn't list the product at $X because they didn't think their customers would pay more than $Y, and $Y would make the project unprofitable. And the retailer does 50% of our sales in the US, so we can't tell them to screw off!

One solution to all these problems is to enshrine direct-to-consumer sales in law, for digital and physical goods.

That sounds like a different problem, though still a real problem.

I've never heard anyone talk about that issue without actually saying "Walmart" before.

I didn't mean Walmart when I wrote that.

Not the same thing. Retailers are the customers of the product manufacturers. They pay for all of the products that show up on their shelves, even the store brands.

(Note: only trial products operate on a consignment arrangement where the manufacturer only gets paid for units actually sold on.)

>Not the same thing. Retailers are the customers of the product manufacturers. They pay for all of the products that show up on their shelves, even the store brands

That's not really true. They force manufacturers to accept returns of unsold product and have met 30-90 day payment terms. The effect is that these large retailers don't buy the product until after it's sold.

They also just rent shelf space to companies and have little if anything to do with what is stocked there and how it's priced.

They force manufacturers to accept returns of unsold product and have met 30-90 day payment terms. The effect is that these large retailers don't buy the product until after it's sold.

This is false. Net payment terms don't change who holds title to the product, just when the money changes hands.

Additionally, retailers only force manufacturers to accept returns of unsold product for products that overwhelming failed to sell. They don't return small batches of unsold product.

They also just rent shelf space to companies and have little if anything to do with what is stocked there and how it's priced.

True, but this is such a small portion of the retail market that it would be a rounding error of a rounding error. Generally, most retail companies don't do this.

Holding title and nitpicking return policy doesn't change the core of my point. Retailers haven't paid for the products on their shelves. Holding title doesn't change that nor does having a minimum return size.

Holding title changes everything in legal terms, and since antitrust is a legal issue, that is what matters.

Retailers haven't paid for the products on their shelves.

Net payment terms aren't net of sale to customer. They're net of delivery to retailer. Some products sell before payment is due (i.e., perishable foodstuffs); many do not (i.e., electronics, toys, most non-food items). Title transfers before payment is due, since transfer of title is a huge consideration for a myriad of other legal issues, like product liability. Usually, title transfers when received by the retailer, but sometimes it transfers when handed off to the shipper. Actual timing depends on the contract between retailer and manufacturer, and there is an entire body of law dedicated solely to this.

Returns to manufacturers (for working/undamaged goods) are literally beside the point here, since they only happen for products that simply fail to sell through to end customers, even after substantial discounts by the retailer. Generally, outside of book sales, this happens rarely, and when it does happen the manufacturer almost always just provides discounts on other goods. (For books, returning unsold copies to the publisher is SOP, and the publisher usually takes them back and refunds the store because they want the store to purchase future books. Unlike other retail, book sales are heavily hit-driven and transient, so financial considerations differ.)

In the case of new products: for small manufacturers without a record, stock is usually provided on consignment with the manufacturer getting paid after units sell; for big/established manufacturers, the stock is purchased by the retailer at a substantial discount from wholesale price or for exchange of services such as marketing efforts by the store to move the product.

No, the comment you are applying to is 100% correct. Store brands are a form of price discrimination, which is anti-competitive and illegal. Courts and regulators significantly weakened enforcement in the 80s, but the laws haven't changed.

No, the comment I am replying to is 100% wrong.

Store brands are a form of price discrimination, which is anti-competitive and illegal. Courts and regulators significantly weakened enforcement in the 80s, but the laws haven't changed.

Price discrimination (known as price segmentation in the business world) is perfectly legal, as long as it is between products and not between customers (and even there it might still be as long as the discrimination isn't based on a protected class). Price segmentation of products has always been legal in the US.

Store brands have been a thing for centuries. Most stores used to just sell the house brand.

Indeed, the concept of selling a "third party" brand in a store is a relatively recent development that can largely be traced to farm supply stores and the rise of department stores...which, notably sold their own store brands alongside those of other companies for decades without antitrust issues. (In fact, Sears' antitrust issues related to their use of market power to obtain discounts or to fix prices in certain geographic markets. They never had issues with selling store brands).

If we were in 1930 and discussing a bunch of independent locals, I would agree with you. In this case, we are talking about vertically aligned retail giants producing store brands as a form of further vertical alignment.

Amazon/Walmart/Target know how much of a given product sells off their shelves. They use that data in order to develop store brands in order to further monopolize profits from their position as a distributor. This behavior is clearly anti-competitive, as numerous complaints from merchants on Amazon marketplace or from vendors who have to deal with Walmart's predatory purchasing teams can attest to. It is effectively a monopsony or oligopsony.

If you want to talk about vertically aligned retail giants producing store brands, it would be very helpful for you to understand that retailers like Walmart and Target are not vertically aligned and do not produce their own store brands. They buy them as white label products from other companies, most of whom make the name-brand products that appear in their stores alongside the store brands.

Tesla would be an example of a vertically aligned company, as would Apple to a lesser extent.

Amazon does not operate like Walmart or Target, so none of what I am saying applies to Amazon. I agree with you that Amazon is violating antitrust with its policies. There are fundamental differences in how Amazon's marketplace works compared to how retail sales work that drive that analysis.

They use that data in order to develop store brands in order to further monopolize profits from their position as a distributor.

The second half of that statement is false ("in order to..."), and demonstrates a fundamental misunderstanding of how the retail market works. Product manufacturers derive their profits from selling to retailers not to end customers. They sell their goods at "wholesale prices" that are far below what the end customers pay. The wholesale prices for store brand products are generally the same or close to the same as the price of name-brand products.

Once on the shelves, the products compete on the basis of marketing. Manufacturers do this by advertising, like on TV. Stores do this by discounting their products or placing them in a better position on the shelf.

And you know what? Advertising simply works better. People prefer the name brand even though the store brand of comparable quality (and often the same underlying product) is right there next to it. There are hundreds of studies on this, and literally trillions of dollars of consumer spending supporting this.

Also, in many cases the stores work with the product makers and provide them data about in-store sales statistics to help them determine marketing spend (including advertising, product design, package design, etc.), because they care more about getting people into the store to buy any product than they do about making a tiny bit more from selling a store brand item instead of Name Brand Product X.

> If you want to talk about vertically aligned retail giants producing store brands, it would be very helpful for you to understand that retailers like Walmart and Target are not vertically aligned and do not produce their own store brands. They buy them as white label products from other companies, most of whom make the name-brand products that appear in their stores alongside the store brands.

This is a distinction without a difference. The mere fact that they don't own the factory producing the goods doesn't change the fact that they are acting as both producer and distributor in the same marketplace. If Costco buys bottled water from Nestle they are only a distributor, and there is no conflict of interest. When they put Kirkland Signature water on the shelf next to it, there is a pretty clear conflict of interest that allows Costco to leverage it's power as a distributor into pricing power against producers. Additionally, there is only a single buyer for the product line, regardless of whether the producer is legally independent. This is a vertically aligned operation - if Costco stopped selling Kirkland Signature tomorrow, it would cease to exist. The fact that they are buying the store brand products from the same producers who make the name brand product makes the entire operation look more aligned and concentrated, not less.

> The second half of that statement is false ("in order to..."), and demonstrates a fundamental misunderstanding of how the retail market works. Product manufacturers derive their profits from selling to retailers not to end customers. They sell their goods at "wholesale prices" that are far below what the end customers pay. The wholesale prices for store brand products are generally the same or close to the same as the price of name-brand products.

Don't be patronizing. The entire dynamic as it exists gives chain stores negotiating leverage against those name-brand products, allowing them to get better prices on goods than a smaller, independent operator would be able to get. That is price discrimination, and it's why small businesses in the US are getting killed and big, consolidated corporations keep getting larger.

This is a huge distinction. They don't simply not own the factory, they don't produce the goods under any legal definition of the term. Nor are they a distributor under the legal definition of the term; they are a retailer which has specific and different legal meaning. (A distributor sells products or other parties that sell to end-customers. The manufacturer is usually the distributor of its own products.)

If Costco buys bottled water from Nestle they are only a distributor, and there is no conflict of interest. When they put Kirkland Signature water on the shelf next to it, there is a pretty clear conflict of interest that allows Costco to leverage it's power as a distributor into pricing power against producers.

No, it doesn't. Costco pays Nestle or one of Nestle's competitors for Kirkland Signature water. Absolutely none of the Kirkland Signature products are made by Costco itself other than the assembly of food in the food court.

Additionally, there is only a single buyer for the product line, regardless of whether the producer is legally independent. This is a vertically aligned operation - if Costco stopped selling Kirkland Signature tomorrow, it would cease to exist.

Note: by vertically aligned you actually mean "vertically integrated" (and I should have edited my earlier comment to correct the terminology). A vertically integrated company must own at least two of the following levels: the suppliers, distributors, or retailers of its products. (If it is a retail company, that would mean it needs to own one of the other levels of companies to be vertically integrated.)

The fact that they are buying the store brand products from the same producers who make the name brand product makes the entire operation look more aligned and concentrated, not less.

No, it's exactly backwards. The manufacturers don't just sell to Costco. They sell to other retailers as well. Vita Coco, for example, sells white-label coconut water to both Costco and Kroger (i.e., Ralphs), among other retailers. (Vita Cocoa used to be a client of mine.)

The entire dynamic as it exists gives chain stores negotiating leverage against those name-brand products, allowing them to get better prices on goods than a smaller, independent operator would be able to get.

Yes, that is how market power works. A participant with greater market power can use that as leverage to negotiate pricing. This is an acceptable use of market power; for example, it is the basis behind insurance pools, coops, group discounts, etc.

It would not be acceptable if the big retail chain used its market power to effect how a supplier deals with other parties or in other markets, such as by attempting to restrict a supplier from selling to competitors. (But note: exclusives are fine, so long as the exclusive product is not a condition of, or conditioned upon, restrictions on the sale of non-exclusive products, because a manufacturer can simply refuse exclusivity and offer it to competitors exclusively or non-exclusively or can negotiate the terms of the exclusive product with the retailer before them. See, for example, Orgain's nut-based protein powder, or the myriad models of TVs that are "exclusive" to each retailer.)

However you want to define it, store brands in the current environment are being used to play pricing games. Perhaps it makes more sense to say that retailers are a participant and beneficiary of the bad behavior of whoever is selling the water to both Costco and Nestle.

In either case, it gives companies like Costco/Walmart/Target the ability to gain greater market share in ways that aren't accessible to small businesses. If you don't mind economic concentration, I can see why this wouldn't seem like an issue to you. I believe that America functions best when wealth and economic activity are geographically well distributed, and when individuals have greater control over their own ability to be productive. That means diminishing chain retailers and giving more agency to individual retailers. Pricing games are the number one way that retail chains are able to drive small, local retailers out of business — they've been doing it with varying levels of success for over 100 years.

> Yes, that is how market power works. A participant with greater market power can use that as leverage to negotiate pricing. This is an acceptable use of market power; for example, it is the basis behind insurance pools, coops, group discounts, etc.

That's not an acceptable use of market power. It specifically disadvantages small businesses that do not have access to private label brands. It's a competitive advantage exclusive to chain stores that allows them to engage in discriminatory pricing games. Employer healthcare also creates an anti-competitive advantage for larger companies for the same reason, but that's a separate issue.

You are basing your arguments on a view of market power that has never existed in the U.S.

That's not an acceptable use of market power. It specifically disadvantages small businesses that do not have access to private label brands.

Small retailers can also have private label brands. Many do. There are a great many suppliers, large and small, to service all retail market niches. Gelson's, for example, is a CA grocery chain with 27 stores. It has its own store brand.

Most small stores and chains don't have store brand products simply because it's not worth the costs. With a store brand, the store is on the hook for all marketing spend, and that's in addition to the money they spend on the inventory itself, which generally isn't materially cheaper than brand name products purchased at wholesale.

And customers don't go to a store for the store brand products (Costco aside), they go for the name brand products like Coke and Nabisco. Do you honestly believe companies spend billions on marketing for nothing?

Employer healthcare also creates an anti-competitive advantage for larger companies for the same reason, but that's a separate issue.

Employer healthcare is a product of the world war ii wage controls that has survived due to favorable tax treatment. Small companies can also offer health care, and many do without issue.

That means diminishing chain retailers and giving more agency to individual retailers.

Do you know why chain stores are successful? It's because their market power allows them to acquire products cheaper from suppliers, which lets them sell those products for cheaper than smaller stores. Lower costs = lower prices = customers benefit. It's silly to say that we need the small store to survive if it sells product X for more than the chain store without offering any other benefit than merely providing the product.

Small/indie stores have survived in the markets where factors other than pricing drive customer purchasing decisions, such as apparel, recreational outdoor equipment, restaurants, etc.

> Do you know why chain stores are successful? It's because their market power allows them to acquire products cheaper from suppliers, which lets them sell those products for cheaper than smaller stores. Lower costs = lower prices = customers benefit. It's silly to say that we need the small store to survive if it sells product X for more than the chain store without offering any other benefit than merely providing the product.

Which is exactly why we have laws on the books from the era when my theory of market power never existed.

Low price = customer benefit isn’t written in stone, except on Robert Bork’s grave.

Customers benefit from a fair distribution of economic activity also, it’s just harder to quantify. Unfortunately some unscrupulous economists have used that fact to push pro-concentration policies.

There's no way it's that simple. It's the equivalent of telling Wal-Mart, Costco, and Target they cant sell Great Value, Kirkland, and Good & Gather. Does that mean if Ikea mostly sells their own brand, they cant also sell some third party products.

Is this rule only going to apply in the digital realm, to non physical goods? Does that mean that game publishers can no longer own game studios? Are game engines a platform, or only virtual stores? Can GameStop no longer make an inhouse game? Making a "simple" rule like that, would cascade much further than you lead on.

Actually I like all the rules you proposed, except that smaller players should be exempt.

Not what you in mind probably, but here we are.

If thats the way to fix problems (I'm not convinced necessarily) thats fine. It's just not simple.

You do have some good ideas there

I do find it kind of strange that Walmart has such a big monopoly in the US, but i can only assume that they are viewed positively by most people or else they 'd have faced antimonopoly action. Same with their brand products, I m sure some other brands will have complained about unfair competition , but maybe their anticompetitive behavior hasn't been egregious enough to bring the ire of politicians. Tech OTOH has been quite aggressively monopolistic in certain areas, and needlessly so, with things like the App Store(apple has way too much profit to justify keeping the app tax so high). In a way ... they make themselves look overly greedy and bring it upon themselves.

Note: while Walmart has potential antitrust concerns, it's due to how they impose pricing demands on suppliers, and possibly for their online marketplace.

The fact that they sell store brands in their retail locations is immaterial, as that has been a part of retail since before third party brands existed.

See, e.g., the Sears case, in which it was Sears' ability to fix prices due to its market dominance that concerned antitrust regulators. They didn't care that Sears sold store brands alongside competing products.

In the retail world, the retailers buy the physical goods from the manufacturers (i.e., the store is the customer), so it's not an issue to have store brands. The big name product manufacturers are usually making the store brands as well.

(Consignment is brought up a lot in this discussion as a counterpoint but it's a very small minority of product sales; generally used only for trial products.)

So if Apple pre-buys digital apps, and resells them with some markup and maybe a rebranding, then its ok?

I would expect this sort of just-in-time prebuy to have no noticeable effect on the market. They would just be predicting whats about to become popular, and buy copies of it, days, hours, minutes before it gets popular. Could they just have one in stock at a time, and constantly buy another as their stock runs out?

So if Apple pre-buys digital apps, and resells them with some markup and maybe a rebranding, then its ok?

No, because that doesn't change the economic reality of the transaction, that the end-user is the actual customer and Apple is just acting as a transient purchaser.

If Apple were to pre-buy digital apps ahead of time, and them offer those purchased licenses on the app store, then that could be okay. But a JIT pre-buy is not a pre-buy at all.

(Believe it or not, but courts are adept at piercing through sham transactions, and such transactions usually make things worse.)

>If Apple were to pre-buy digital apps ahead of time, ... then that could be okay

How far ahead of time is OK?

Nobody knows, since nobody does that for digital goods.

In the physical goods world, products are usually purchased months or weeks in advance of being sold.

It would be much easier to just start enforcing our existing pro-competition laws, break up the interlocking parts, the huge chain stores and end price discrimination altogether. The same paradigm works for distributors of both digital and physical goods.

I don't think your questions are that hard to figure out if we just enforce the rules on the books, as they are supposed to be enforced.

> Does that mean that game publishers can no longer own game studios?

Yes

> Are game engines a platform, or only virtual stores?

Is the engine distributing physical or digital goods? If not, it is probably not an issue.

> Can GameStop no longer make an inhouse game?

Yes.

Does that mean Nintendo can no longer launch the next console with Mario and Zelda games? That's 100% competing in their own store, but I also wouldn't own a switch if there wasn't a new Zelda game on it.

Philosophically, the hardware and software should probably be broken up. Practically, there are much bigger fish and only so many hours in the day. That wouldn't be my priority if I was a legislator or regulator.

This was mentioned in other comments, but retailers are not platforms. They purchase their inventory.

Rather, eBay, Comcast, phone networks, Amazon Marketplace, financial market makers and similar are what people refer to as two-sided or multi-sided markets.

Without the existence of a platform the market would fail to exist, in many cases.

I'd be cautious about this. Unless the regulations are carefully crafted, this might lead to a situation where platform owners decide to completely vertically integrate software on their platform, rather than allow third party vendors to play in their walled garden.

Look at gaming platforms and their respective stores, for example. If Microsoft isn't allowed to compete with third party publishers on their platform, they might very well say, "screw it, Xbox doesn't run third party games anymore, it only runs Microsoft games". Then you're in a situation where the Xbox is nothing but a vessel for Microsoft software.

To a certain extent, we've already seen the gaming industry move slightly in this direction, with Microsoft and Sony buying an ever expanding list of gaming studios. It's wouldn't exactly be a huge leap for them to restrict their respective consoles to running games coming from their in-house studios. Heck, the console manufacturers might actually prefer this model, as they get to keep 100% of game sales revenue, rather than 30% (or whatever it is).

The firm's who are treating their customers best are the FAANG companies. I know a lot of folks here nitpick the things they do wrong, but why aren't you more concerned about the far greater wrongs of tobacco, oil, pharmaceutical companies? About patent trolls?

I know FAANG companies are easy to beat up on, but going after these is just bullying. Go after the actual evil companies.

Don't you think this comment represents tremendous whataboutism? Don't cure one tractable problem--which may yet develop into a greater, less tractable problem--because there exist other troubles?

The parent comment asks why we can't we prioritize handling the companies which the author perceives are a greater evil. Why can't that prioritization happen without it being "whataboutism"?

Do you imagine the same governmental bodies and regulators work on all of trade and antitrust, public health (tobacco), and energy and environmental policy? In other words, does it really follow that the problem of oil is being ignored in order to address monopolists?

> The firm's who are treating their customers best

What customers? They offer you a good service, sure, but what relationship do you really have with Facebook or Google?

What relationship do I have with Verizon, or Comcast, or Pfizer or Du Pont? It seems to be one where they sell call metadata logs and consistently under deliver on contracts (Verizon, Comcast, other telcos), dump chemicals, push doctors to prescribe medicines unnecessarily, etc. etc.

You pay them money, they sell you a product/provide you a service.

I think you are breezing over an enormously important point... Facebook and Google provide their services completely FREE of charge. They provide a massive value for free.

Even when I was a real customer of Google they treated me like shit.

Our relationship with FB and Google is that we exchange our data for a free digital service. That data is then sold to advertisers

I mean maybe Apple and Netflix do. When was the last time Google provided meaningful customer support without the customer getting some attention on Twitter/HN? Amazon is getting mega-lazy with their shipping practices; damaged goods are pretty normal. Meanwhile Facebook keeps shoving services you don't want in your face (Reels), pushing algorithmic feeds to the detriment of the user's mental health, and collecting information on you whether you consent or not. Oh yeah, and the recent move to make Facebook logins mandatory for Oculus (which no customer seemed to be happy with).

FAANG companies mostly treat us like trash. We've just come to accept poor service, UX dark patterns, and all-pervasive tracking as the norm. I've had much, much better customer service experiences from smaller, more focused companies.

Edit: I feel like I breezed over Google. They've also killed multiple popular services (Reader), tried to force G+ on everyone (again with UX dark patterns and no consent), and degraded their main product (search) to the point that some keywords return only one or two organic results "above the fold".

It’s a really popular meme around here to bash Google for killing products, and Google’s behavior here annoys me a lot.

However I’m skeptical whether many consumers care; Google’s favorability ratings are very high:

https://www.cnet.com/news/googles-approval-ratings-best-appl...

This is just the top result from Google, I’ve seen others similar.

I’m in favor of strengthening antitrust (and that applies to a bunch of other industries too, not just tech), but you really have to be careful not to destroy more value than you preserve with this sort of thing.

excuse me, what's the point of "favorability ratings" when there is no competition to compare them to ?

There are popular and well-known competitors to Google for search, maps, free email hosting, web browsers, laptop OSes, phone OSes, blog hosting software, collaborative productivity software, and, if you are on the seller side, paying for ad space.

Outside the US, particularly in China, there are large video hosting services, and within the US, Twitch, Facebook, Snapchat, and Instagram serve as not-quite-apples-to-apples equivalents for video hosting.

It’s hard to engage with a statement like this. Can you name a Google product that doesn’t have a competitor? I can’t think of any.

This isn’t about your definition of “evil”. It’s an antitrust report, which deals specifically with monopolistic behaviour.

> firm's who are treating their customers best are the FAANG companies

Haha nice. E.g. google treats their customers (advertisers) best while dumping tons of garbage on billions of users. And AFAIK they dont even have customer support. Way to miss the fiorest here.

> Go after the actual evil companies.

Big tech is no less evil that tobacco/big oil . The honeymoon days of the 2000s are over and done.

Really? Really? What harm are they actually causing?

Do I really need to enumerate?

Yes. Also, please share what benefit tobacco companies provide to society.

There are tons of articles written on the benefits and evils caused by these companies. To claim that they have no drawbacks because they have been a net benefit overall is preposterous. Tobacco may be a net detriment, but they do provide jobs, and profits of course, everyone loves profits and stocks going up!

You 'll notice from the comments here that views on big tech have changed a lot and they are no longer placed in a pedestal as they used to be. Some commenters seem surprised by this, probably because they live in the SV bubble.

>Tobacco may be a net detriment, but they do provide jobs, and profits of course, everyone loves profits and stocks going up!

That has nothing to do with tobacco. Jobs can just as easily be provided in any other industry. What does tobacco provide to society?

As for the rest of your comment, on the contrary, I find this negative tech sentiment only present on Hacker News and similar tech-heavy forums. Regular people outside of tech hubs couldn't care less except for what the media is feeding them (no derogation, I am similarly fed by the media in industries I am not familiar with).

> Jobs can just as easily be provided in any other industry.

What do pervasive ads provide to society? What does instagram? How did the obliteration of newspapers help? Tobacco provides stimulation to nicotinic acetylcholine receptors which increase alertness, heart rate, reaction times etc. Some people highly value this, even though overall it s an unhealthy habit.

It's not black or white. You see more complaints here because there are a lot of IT professionals who have seen how these things work. Average folk dont know much beyond what with Big Tech's marketing departments spew. There's also a lot of pushback from mainstream press, which was to be expected since BigTech took all their ad incomes.

Ads provide something to other companies, but I would agree not much to society at large. But that's because ads are the monetization -- their purpose isn't to provide value to the end users. It's like asking, what value does taking money from customers provide them? Well, the product/service they paid for. Ads monetize all sorts of useful products and services at scale like information, communication, and entertainment. Google being free means someone that wouldn't be able to afford a $25/mo (or way more) subscription gets equally good access to information. YouTube being free means people have access to entertainment created by independent creators who can be compensated for their efforts without being a part of a large organization. Facebook et al. being free means everyone can be connected without any one person being left out because they can't afford it. I think you know all of these things and we're basically debating on where the balance is between value from service and the cost of privacy, etc.

Gradual social/political destabilization, caused at least in part and certainly accelerated by social media (FB/Twitter) and pervasive adtech in personal life (led by Google) seem to be the big ones here. Arguably as bad as Big Tobacco or Big Oil.

Most of the political destabilization (in america) has been going on before social media: https://www.wired.com/story/why-are-we-polarized-dont-blame-...

> EK: ... The core story of the book is that over the past 50 years, the country’s dominant political coalitions have sorted by ideology, race, religion, geography, psychology, consumer behavior, and cultural preferences. This has, in turn, kicked off a series of feedback loops in which political institutions ... adopt more polarized strategies to both respond and appeal to a more polarized audience, which further polarizes the audience, which further polarizes the institutions, which further polarizes the audience, and so on.

> Social media is one of those institutions, and in my view, is clearly a polarization accelerant. In the coming years it may prove a primary driver. But the bulk of the run-up in American party polarization predates social media, which means social media isn’t core to the story.

Facebook was used as a tool to incite genocide in Myanmar.

My understanding is it was the military and police that committed genocide. The people who are normally responsible for massive violence.

While true, and while it may be the case that the propaganda which led to the genocide would’ve used a different route had Facebook not been available, they did allow themselves to be a tool of a state engaged in genocide despite the T&C giving them the means to prevent such use.

Genocide has existed long before Facebook.

Facebook is not water, it is a thing both made by and employing people, people which many other people hold to a higher standard than Facebook has lived up to.

It wanted to move fast and break things. It did. People don’t like that it did.

Facebook is a tool. It can be used for good (the majority of the use) or it can used for evil (some of the use). You can attribute the same good-evil distribution to virtually everything.

Yes, it is a tool.

“Evil flourishes when good men do nothing”. They are giving every appearance of doing as little as they can get away with, while pretending to do more. Should the rest of us let them do as little as possible?

Perhaps the outward appearance is different from the internal reality, but I cannot judge except by appearance.

The rest of us make up the people that are on these platforms driving the problem. Should Facebook-the-company do more to limit the abuse? Absolutely -- it's within their power and ability. Is Facebook-the-company the party responsible for spreading misinformation? No, misinformation is driven by people and organizations who, without Facebook, would find different ways of doing so like they have before Facebook.

That's my opinion and I understand there are many folks who have similarly logical opinions countering mine. For what it's worth, I don't even use Facebook and haven't for years. I personally don't find use in it but know others who do.

> Is Facebook-the-company the party responsible for spreading misinformation? No, misinformation is driven by people and organizations who, without Facebook, would find different ways of doing so like they have before Facebook.

I disagree on two grounds:

1. Facebook actively manages and develops an algorithm for what to show to whom

2. Joint liability, or possibly several liability

Facebook is far more dangerous to society than any patent troll.

Facebook is in the business of selling the ability to coerce people into doing things that are against their best interests. It's very dangerously good at it. Facebook has also turned a blind eye to its platform being used to organize politically-motivated violence.

It needs to be heavily regulated or shut down completely.

That said, I don't expect Washington to break up the tech giants. Meaningful anti-trust enforcement has not happened in decades and would go against very long standing, but unspoken, precedents against Washington harming large piles of money. Any action taken by the government would likely be for show (in no small part to pander to conservative fears over platform bias, and possibly to extract superficial concessions from the tech sector on this front), and would be very unlikely to survive the post-Trump Supreme Court intact.

Please cite some sources for your claims - because to the best of my knowledge facebooks is basically no different than any other media company.

I mean the new york times actively advocated for the Iraq -- should they exist, maybe be shut down?

Given that you're involved in a discussion regarding Facebook's connections to the Rohingya genocide elsewhere in this thread, it's hard not to conclude that your demand for sources connecting Facebook to politically-motivated violence is disingenuous.

It's a matter of opinion whether Facebook is responsible in any way for that genocide, but it's a matter of record that Facebook did very little to prevent its platform from being used to organize it.

As for 'sources' for the outcome I expect from any anti-trust enforcement, it's really not appropriate to demand an a cited essay/publishable work reviewing the past fifty years of antitrust law and practice combined with a detailed analysis of the GOP platform and the established views of Trump's USSC justices. That kind of analysis takes a lot of time and isn't usually done for free.

It's not disngenous; they could have done more, but I don't think 1 then caused it and 2 had any material impact on it. It was a military/government run operation - did they need Facebook?

I believe it is fair to break up these companies. However, how do we expect them to compete internationally against state sponsored monopolies such as those coming from China a decade from now?

On the contrary, breaking them up will only strengthen our technology ecosystem, allowing innovation to continue. If we don't break them up, the next disruptive tech giant will be founded overseas.

How do you imagine this playing out? For example if you were to break up Apple, Samsung/Huawei phones would probably dominate the landscape.

The idea is that without the huge barriers to entry big tech creates smaller companies will be better able to innovate. I tend to agree with you though.

But what huge barrier to entry is Apple putting up to block a competitor in the smartphone industry? Just that Apple is better and nobody can realistically start from scratch and compete? No amount of selling a superior product constitutes anticompetitive behavior.

Why doesn't the European Union have tech giants other than SAP?

And yet, we already have this story in WSJ today - "Partisan Divisions Hinder House Big Tech Report"[1]. Submitted as a separate article at [2].

I believe Big Tech and their lobbyists are already one step ahead of the game and current polarization plays very well to their advantage by averting a unified action by the US government.

[1] https://www.wsj.com/articles/partisan-divisions-hinder-house...

[2] https://news.ycombinator.com/item?id=24699039

Big tech today learned from Microsoft’s failures. They invest heavily in lobbying, government affairs, and other non profits setup to help their causes.

Realistically the upcoming testimonies are just grandstanding by lawmakers hoping for some brownie points in the upcoming election.

There was a similar outcry over Facebook's testimony after the Cambridge Analytica scandal and nothing happened afterwards.

I would also love to see more regulation around the same company owning several brands which appear to compete with each other.

For example their's only a handful of big tech recruiting firms, one of which has at least 4 brands which all report to the same home office. This in itself isn't wrong , but their needs to be much greater transparency.

Like if you own 5 different hotdog chains nation wide , and your HotDog Inc , you should have to put 'Dave Dogs, by HotDog inc'

In this manner if Dave Dogs get me sick I can avoid HotDog Inc in the future. Not likely to ever happen, but it would be nice.

I can't help but think that requiring tech firms to declare a "single line of business" just changes the ecosystem to a federation of "independent" companies under a holding company without really changing the market itself.

If the law can't break up Alphabet it's toothless, and if it can break up Alphabet I don't see how it couldn't also break up any major consolidation firm that gets into the business of buying and flipping companies.

The issue is not buying and selling companies, it's cross-domain consolidation.

If Amazon can enter e.g. the diapers market not because they are good at making diapers but because they can leverage their other businesses to kill competition, you have a problem.

If google can pour unaccounted billions in advertising for any new product they launch while killing competitors' visibility, there is aa problem.

The solution is not to force e.g. alphabet to sell all of their companies, but to make these companies act independently.

The question, to my mind, is how.

So let's say Amazon declares their business is e-commerce, and they can't manufacture things they sell.

And now there's ADiapers, that happens to make diapers.

And Amazon Holdings, which owns ADiapers and Amazon.

What stops ADiapers from optimizing their product to sell well on Amazon, Amazon building algorithms that preference ADiapers, and Amazon Holdings profiting off of this on both sides?

You don't even need Amazon Holdings to own them, the same results can happen from regular old business partnerships. Maybe the government can forbid new deals between the offshoots, but that just creates middlemen. Or maybe ADiapers isn't viable on its own, so Amazon forms a deal with BDiapers instead, but the same net result happens. (Product placement deals are commonplace.) In the worst case you get the same anti-competitive behavior, where Amazon and BDiapers form a partnership where Amazon subsidizes BDiapers to kill off the diaper competition and then gets paid back after BDiapers jacks up prices.

The government could put a stop to that too (and does occasionally stop anti-competitive practices of various sorts) even though there's no single company to breakup. There are other methods than breakup to strongarm companies into doing things. So why not use them instead of all this mess that would result from breaking up Amazon? Especially if we can't even show their diaper venture was particularly effective in anti-competitive goals? We don't even need to invent a diaper business, we have the whole Amazon Basics line as well as their Amazon hardware to analyze. Those do get preferential treatment, yet other in-kind hardware and products still show up and sometimes do better anyway (Energizer is #1 in 9V batteries), plus the alternatives have the larger share (majority) of non-Amazon commerce locations where they don't compete with Amazon. They may compete with store-brands of those places of course.

Meanwhile for customers, the top 3 most trusted brands in America are USPS, Amazon, and Google. This talk is not about what the public wants or what's good for the public at all.

> What stops ADiapers from optimizing their product to sell well on Amazon, Amazon building algorithms that preference ADiapers, and Amazon Holdings profiting off of this on both sides?

There are plenty of regulated markets that work pretty decently. Financial markets are one example where preventing the market operator to compete against clients was a critical condition to create conditions for the market to thrive.

Ironically, most big tech companies that come to mind today _do_ lobby to have carriers broken and regulated as utilities. Do you imagine Verizon, Comcast, etc demanding 30% of Internet's revenue?

Google's never been able to bully an inferior product into the market. Their major successes (Search, Gmail, Chrome, Maps, Android) the product was clearly better than their competitors. Others where it wasn't (Plus, ChromeOS, GCloud, Wave, Hangouts, Duo, Shopping) they don't dominate the market.

Firefox took half a decade to reach 20% market share against IE. In the same time, Chrome became the dominant browser. I'm pretty sure that the FF-IE gap warrants to use FF as an example of organic growth, while Chrome is a clear example of aggressive marketing. You can acknowledge that Chrome was a good product _and_ that it got insane marketing, at zero cost.

As for examples of pushing inferior products into market, some google search cards are good examples of it.

Chrome was also technologically better. People seem to forget that it was the first browser to offer sandboxed processes. That was a game changer, especially in an era where we still used browser plugins Bel ize that weren't as well tested as the browser core and would periodically crash the entire process.

I'm not arguing that Chrome was not an upgrade from FF. I'm arguing that FF was arguably an even bigger upgrade from IE, and despite that, it had a slow progression.

To me, it seems hard to deny that advertising wasn't a key factor in Chrome's faster adoption.

Nobody says being Google doesn't help in launching products. It's just not a decisive factor. They get exposure but if the value proposition isn't there then they don't win in the market.

Great. Do the telcos next.

They've already been broken up once - it's shocking that some of the recent mergers have been allowed to go forward. So, unironically, yes we should do the telcos next.

Unless there is a monopoly (or agreements between telcos to raise prices without competing) then why? How will breaking up Google, Microsoft, Facebook, Amazon do anything to help US consumers? It might help their competitors, many of whom are very large (Alibaba).

America is largely a nation of producers, and our current state of malaise (or whatever you want to call it) seems to be strongly correlated to being re-branded as consumers, and being forced into a system that treats us as such. There is a higher good than low prices for consumers.

Consolidation destroys small business and the ability of the average American to support themselves through independent, private enterprise. All 5 of the FAANG companies have caused consolidation in tech, retail and other verticals, and they are acting as private regulators to manipulate the markets. I don't want 5 companies controlling my destiny, and I can't figure why any rational person would, even if you genuinely see yourself as a consumer.

Over the 16 years from 1998 to 2014 where FAANG is even relevant, small business share of GDP declined from 48% to 43.5%. (Their dollar amount has grown 1.4% annually vs. 2.5% for large businesses.)

Is 43.5% too little? Or perhaps it's too high? Across the EU, the figure I found has 99% of all enterprises employing fewer than 250 people, whereas in the US it's 98%. For enterprises with 1-9 people employed, in the US it's 67%, vs 88% in France, 93% in Czech Republic, 78% in UK, 61% in Germany...

I don't think this paints a dire picture for small(er) independent businesses. Why stop consolidation now? What numbers would we need to see to loosen up on consolidation restrictions again in the future? In other words, what is your model here? What values should trigger action? Given a value, what should we be able to predict? Then we can go look at random other countries and see if the model is any use.

On a more general side of discussion, before breaking up big tech companies, I'd sooner break up big government. In a few months regardless of who wins the election, there will still be someone roughly 50% of the country despises who is going to claim to rule me and try to control my destiny from the other side of the continent. Why any rational person would want such a situation is beyond me, even if you genuinely see yourself as a Federalist.

1998 is well past the frame of reference I would use for what a healthy distribution looks like. I tried to find data from the 50s and 60s, but only found the same report you did.

> In other words, what is your model here?

American history clearly shows that economic concentration leads to market crashes, recessions/depressions, political unrest. For 40 years we put clear rules into place to prevent concentration and keep power broadly distributed - small business owners and farmers has power that could match the financiers and industrialists - and we had no major crashes, no depressions, far fewer lives ruined due to jobs and homes lost. You don't need to look at random other countries, just look at what worked in this one.

> Why any rational person would want such a situation is beyond me, even if you genuinely see yourself as a Federalist.

That 50% is more like 60M adults who vote Republican, and probably some of their children, so more like 20-25%. Most of those people are angry for good reasons, but there is always a chance one of the candidates can really help people like FDR and LBJ did. The whole notion of breaking up big government is an ambiguous, ideological statement that doesn't mean anything. You have a choice between private interests (mostly in finance and tech) deciding the rules you get to live by, or you can choose an elected public body. I'd rather have one hand on the wheel than none.

I do wonder what breaking up large US tech corporations does to the competitiveness of the US on the world scale.

The article seems to leave out Microsoft. They are probably less of a threat since they aren’t in the business of controlling what the public sees.

I noticed this, too. Is Microsoft just left out of the article, or are they being left out of consideration for potential government break-up?

Should be a mandatory read for anyone who shills for big tech here:

"Lack Of Anti-Trust Enforcement"

https://blog.dshr.org/2020/08/lack-of-anti-trust-enforcement...

If someone is really shilling they won't be persuaded by any information you provide. If someone isn't shilling but may have doubts about the proposed regulation they won't be persuaded by you insulting them as a shill.

Not going to get broken up. Apple has Samsung. Amazon has to compete with Google and every other e-commerce store. Facebook is in a natural monopoly business and has taken steps to be politically involved. Google owns the web through search and other products. Google is the only risk and even then maybe.

> Amazon has to compete with Google and every other e-commerce store.

Amazon has majority market share in e-commerce. Google isn't even close.

It's interesting - the comments section appears to be a litany of excuses for big tech just to see what sticks. I think focusing on a single, higher-quality argument against anti-trust might be better.

> It's interesting - the comments section appears to be a litany of excuses for big tech just to see what sticks.

Not sure what comments section you're reading. In the one I see, most of the top comments are celebrating the possibility of these companies getting broken up. There's only the niggling problem that the law probably doesn't provide a provable cause of action supporting said breaking up.

> There's only the niggling problem that the law probably doesn't provide a provable cause of action supporting said breaking up.

Well, I think we should change our anti-trust law to deal with platforms. I think it is pretty confident of you to say that a priori there is no legal reason you could break up these companies.

The top comment when I commented was this one https://news.ycombinator.com/item?id=24698720. You're right that the tenor of the top comments now has already shifted.

> I think it is pretty confident of you to say that a priori there is no legal reason you could break up these companies.

I'm actually making this statement a posteriori, specifically a posteriori of reading up on what the antitrust laws in this country currently allow and don't allow. That being said, I could easily be wrong, which is why I said "probably." :)

As to changing the laws, this is all well and good, but it's hard to see that happening under a divided government, given Democrats and Republicans have different ideas of the effects they'd like to see out of such a break-up. If they can't do something extremely popular like legalizing marijuana or providing universal healthcare, I am not sure how effective they're going to be at less popular actions like breaking up Google or Facebook. We'll see I guess.

> As to changing the laws, this is all well and good, but it's hard to see that happening under a divided government,

I think the laws ought to change. I agree that it is likely that a combination of a divided government, plus political capture of Democrats by the tech industry, means that it unlikely we will see a shift towards economic justice any time soon.

>. Facebook is in a natural monopoly

Facebook isn't even a monopoly. And that would have been even more true if they hadn't been allowed to buy Instagram and WhatsApp.

FAANGM needs to be stripped off of their for-profit status, they are necessary in the current society in their large form but not as commercial entities.

By what right do you have any standing to propose something so radically confiscatory and transgressive of property rights?

Because public good overwhelms private property, and stakeholders will be compensated in the process. Moreover, they are an essential business, where a split would cause unnecessary expenditure, whereas making them non-profit would not. Maths win. I even coined a name for that: utilisation.

I explained the process in the nutshell 2 months ago: https://news.ycombinator.com/item?id=24094535

Why regulate size and not behaviour?

The problem isn't that a company is too big, but that it engages in behaviour that makes it hard for competitors to thrive. And, yes, they may use size a leverage for this. But breaking up the company isn't the only (or best) solution for this.

Because size is easy to measure while behavior is highly subjective.

Well, when you're a big enough company that you can have extensive lobbying efforts and have connections to the congresspeople who would over see you (Schumer's daughter works at Facebook for example) it might get hard to do anything except break them up.

A regulation can get watered down at the outset, eaten away by following legislation or legal challenges, but breakup could have a lot longer of an affect.

Related discussion on reports of bribery fueling antitrust focus on tech companies: https://news.ycombinator.com/item?id=24694454

Its going to be painful. They're going to split up the companies along the wrong lines. The products these companies produce are going to suffer tremendously.

It still needs to be done.

Why is the corporate tax rate not progressive? If companies with higher earnings get charged a higher tax rate, they would naturally want to break themselves up.

This (it is, well, it was more progressive before 2018)! Except larger companies seem to net lower tax because they can afford to keep more money offshore and uses for that.

It doesn’t really make sense, for the same reason that corporate income tax in general doesn’t make much sense. A corporation is owned by people, when the corporation makes money, that money, one way or another, ends up in the hands of people who pay progressive tax on it. If you think that the government isn’t making enough money off of corporations, the answer is to raise capital gains taxes.

Progressive income taxes on corporations are bad policy for many of the same reasons that corporate income taxes are bad policy in the first place. Corporations are artificial constructs and they have a really easy time reorganizing to behave in artificial ways to shed tax burden. Institute a progressive corporate income tax and watch as every major corporations spontaneously transforms into hundreds of micro-corporations that own each other’s stock, and “contract” all of their responsibilities to each other without changing anything except to increase inefficiency and make internal job transfers more complex. Just tax people and be done with it, taxing corporations is taxing people, just with an added incentive for wasteful tax-avoidance.

Everything you said makes a lot of sense. But how do we stop monopolistic behaviour?

A corporation being very large doesn’t necessarily mean that it has a monopoly. I don’t find the argument that there are significant monopolies in the high-tech industry to be persuasive.

Moreover, the competitive landscape among America’s high-tech industry is very active. Each of the major tech companies is regularly sniping at each other’s major markets. Microsoft introduced Bing to compete with Google Search and Azure to compete with AWS. Google introduced Google Cloud to compete with AWS, GSuite to compete with Microsoft’s productivity suite, and unsuccessfully introduced Google Plus to compete with Facebook. Amazon is ramping up an advertising wing to compete with Google Ads and investing in Twitch to compete with YouTube. And everybody these days seems to have a video streaming service of some sort competing with Netflix. This seems like a golden age of competition.

Breaking up a high-tech monopoly would be tough because unlike historically successful breakups it would make no sense to do geographically. But for now it doesn’t seem like anything needs to change.

After they just let 2 out of the only 4 National cell networks merge, this looks a bit like shutting the barn door after the horse has left

Have you heard the argument that the cell network industry is so capital intensive, it's more competitive to have a combined Sprint & T-Mobile take on AT&T and Verizon, as opposed to AT&T and Verizon severely outcompeting Sprint and T-Mobile into bankruptcy, leaving a duopoly?

We have all these problems with these companies because they are controlled by interests that help us only incidentally on their way to world domination. Why don't we put 1 and 1 together and just take control? It won't solve every problem, but a huge number of them will suddenly become pliable as the companies are run in the people's interest.

I'm confused as to why the US government would break up large tech now. Surely tech has reached the status of being a national interest, especially in relation to information and communication? What stops foreign firms from buying out large swaths of American tech after it has been broken up? TikTok shows how far foreign tech can penetrate the US market, and how nervous that makes the government.

I feel that the only reason the current Trump administration would want to break up tech giants, is so the remnants can be auctioned to the highest bidder. Maybe they are feeling emboldened by this TikTok/Oracle deal, as botched as it is.

>I'm confused as to why the US government would break up large tech now. Surely tech has reached the status of being a national interest, especially in relation to information and communication?

Harry Truman said in 1945 about the atomic bomb, "We thank God that it has come to us, instead of to our enemies". I feel the same way about FAANG and Silicon Valley as a whole (and Wall Street, and Hollywood, and SpaceX/Tesla, and the Ivy League), that they are in the United States.

That doesn't mean I approve of everything they do. That doesn't mean I can't or won't decry their putting thumbs on scales toward a certain type of bien-pensant ideology. That does mean that, overall, I am very, very glad that they are American instead of Russian, Chinese, or even British, French, or German.

>I feel that the only reason the current Trump administration would want to break up tech giants

This report is from the House of Representatives, which is Democratic-controlled.

> What stops foreign firms from buying out large swaths of American tech after it has been broken up

Why? They are way overpriced. If chinese or russians wanted to compete worldwide they could fund it much cheaper locally. Besides a lot of of their value is in the network effect / lock-in, not on the software itself. And why would they invest in a company that would be ultimately under control by the US administration.

How much of this is pre-election sabre rattling?

People love to throw around the big "Break up" but what they really want is probably much more nuanced. What do break ups achieve? To use an example from Benedict Evans, suppose Windows and Office were broken up... at the end of the day, you'd eliminate cross-leveraging of Windows and Office, but as far as crops of new PC operating systems licensors or productivity software companies popping up go, things would probably have remained more of the same. If the goal of a break up is to eliminate a complete market grip, we need to think a few steps more deeply. Google and Facebook both operate in two sided markets. If you break that up, you'll just end up creating more leverage for advertisers and less power to the successor companies. A better example is probably telecom in Europe, where regulators decided that instead of one big telecom provider, they would build the lines nationally and rent access to those lines to a slew of network operators. This created a rich and competitive market where consumers can get a data plan for a reasonable price and plenty of companies have made plenty of money.

The crux of Evan's argument is that what makes FB/GOOG/AMZ/MS strong is the network effects they possess, not their sheer size. Google failed at creating a social network, Facebook wouldn't even try taking an aim at search. So, any reasonable unit these orgs can be "broken" into wouldn't achieve the intended effect.

Regulators need to look at things like price capping, requiring big platforms to offer up certain data entities for use by third parties, requiring consumers to choose their default search provider instead of selling the position, et cetera. Get over the break up already

These companies don't need to innovate, just buy up the competition or small companies and absorb them into their own. Or if they won't sell, just copy all the features or clone the app and use their big name to push it out there and crush them.

I presume the White House has backtracked on Oracle "acquiring" TikTok right? Because if this is truly about preventing monopolies and not a political witch hunt, allowing a company like Oracle to own a company like TikTok is the antithesis of their supposed goals.

How about breaking up ISP or media monopolies? They get free pass and only consolidate all the time.

I think things could work out if you replace those platforms with decentralized protocols.

Related recent discussion of mega corps eating the world: https://news.ycombinator.com/item?id=24679514

Hrm, I think there are probably a lot of details and nuance and good arguments both ways. But this is just not the right moment, politically speaking, to be taking that on. Maybe in a year or two?

I see this as an attack on encryption. Break up all these companies and break up their ability to keep fighting governments' long-standing anti-encryption stance.

Breaking these big tech companies seems only fair. My question is why are big banks not being broken? Why are big oil companies not being broken?

Good. At any other time in the last hundred years trust-busting regulators would've already smashed these companies into tiny pieces.

Can you list some ways Google has hurt you? You know, aside from all the harm they caused by giving you access to almost limitless knowledge, providing you tons of free storage, helping you navigate the world around you, providing an open source competitor to iOS, and providing countless hours of free entertainment and educational videos on YouTube?

All of those activities make them money. None of them are charity.

Hmm, some ways Google has hurt me. They bought Revolv and turned my expensive home automation into a paperweight to try and force me to buy into the Nest ecosystem. That's a good example.

Frustrating for sure, but you're comparing access to limitless knowledge and literally life transforming technologies that people even a few decades ago would have sold their soul for... to a home product that I think Google would refund you the price of. Keep things in perspective.

Whatever the evolving digital advertising ecosystem looks like, separate entities should control separate portions of the value chain.

In my entire life I've only ever felt screwed over by two--and only two--entities: Comcast and private universities.

Not Apple, not Google, not Facebook, not Amazon, not banks, not credit card companies, not even my cell carrier. On the whole—as a customer at least—I feel like all my dealings with these "big tech firms" have been fair and mutually beneficial. I love Apple products, I think Google basically deserves a Nobel Prize for their democratization of knowledge and their creation of useful tools, and I can sing the praises of how much Amazon has simplified my life with easy ordering and reliable product reviews. Frankly, I even sorta like getting targeted ads!

In contrast, Comcast keeps sneakily raising my bill, charging me BS fees they don't disclose ahead of time, locking me into punitive contracts, providing mediocre service—and I literally can't do a damn thing because they are the ONLY service provider in my area.

As for universities, they demanded that I take out hundreds of thousands of dollars in debt to pay their insane tuition bills. They would in fact prevent me from registering for classes and would even withhold my diploma if I was even a little late paying their bills!. They employed these draconian tactics despite having endowments in the billions and receiving many hundreds of millions of dollars in federal grants each year. And, these universities received all their money up front and pawned off any repayment risk to the Government or private lenders... And despite asking me to mortgage my future to pay their bills, they now have the outrageous gall to send me letters almost weekly asking for more even donations. And, very conveniently for somebody, educational debt is non-dischargeable in bankruptcy.

That's my longwinded way of asking: who the hell decided that regulating big tech is America's most pressing issue right now? I have nothing but goodwill toward big tech.

Meanwhile, I don't hear any politicians saying a anything about Comcast (in fact, I see many Comcast execs throwing fundraisers for Joe Biden), and all hear about universities from many Congresspeople is how we need to increase their funding and make sure more students can pay their insane tuition bills—not actually reigning in those bills.

Something seems... off.

Tim Bray had a recent blog article related to this: https://www.tbray.org/ongoing/When/202x/2020/06/08/Anti-mono...

I love his quote from The Myth of Capitalism: “The tech giants love startups, but in the same way that lions love feasting on lifeless carcasses of gazelles.”

I think this is great. The reality is that we live in the era of 'big government'. Until we have figured out a solution to make government smaller without causing poverty to skyrocket, then we have to assume that the government is going to be running the show; as such, it needs to ensure the well-being of all its stakeholders (citizens) and it needs to treat all of its citizens equally.

The government should have full permission to break up companies that it sees as too big. It should also have the power to shut down corporations at will (in the same way that corporations can shut down internal projects that don't align with shareholder incentives).

The government needs to rise up and take ownership of the economy. We live in crony-capitalism and in this system, it's better to put power in the hands of the government where the cronyism is more evenly distributed and is subjected to the necessary checks and balances.

I hope every VC is lobbying for this. What's the point in investing in tech if the market is full of big fat gorillas that will just copy everything you do and put 10X the capital behind it, not to mention hiring everyone at 10X the salary a startup can afford to pay.

> not to mention hiring everyone at 10X the salary a startup can afford to pay.

This is how a functioning talent market works. It isn't unfair to the startup that big companies pay more, it's unfair to the startup employees that the startup isn't paying more. I'd argue that if a startup can't pay market rate for the employees it wants (be it cash or equity) then it wasn't properly funded in the first place.

Yes, but if we equalize the tech industry on the company level, startups will be able to pay more, and a lack of monopsony around high-level programmer talent will further drive up wages.

Unless FAANG is unionized or something, the trust-busted alternative of the status quo is definitely better for labor.

> startups will be able to pay more

The OP's proposal is that startups should be able to pay less and hire talent, if it wasn't for those pesky FAANGs driving everyone's wages up. If only they were able to pay less would VCs have been able to keep even more for themselves, I mean, would the market have been more equitable (?@!@)

Well if that's what OP is saying they are wrong.

Don't look at the market from the perspective of the one of the participants, look at it as a whole. And don't try to evaluate something like anti-trust in a marginal way, when the effects are so numerous. Better to take a more stateless / path-independent approach and just find the new equilibrium, for the first rough-cut analysis.

From those perspectives, higher Gini coefficient clearly means lower median, etc.

From your other comment it looks like you agree with my conclusions, at least.

More competition would mean lower prices for consumers, paying more employees building redundant products, and less money per employee for salary.

But we're talking about breaking up vertical monopolies. That doesn't necessarily create more redundancy.

There is also the end-user to consider. Big fat salaries for engineers to create shitty/sheisty marketing/ads while squashing real innovation is not a net-benefit to society. There has to be some medium.

By that standard, Putin's russia is a "functioning talent market" since it's a corrupt oligopoly. Or the CCP. "If they have not ties to the party, they shouldnt have tried to compete". It's functionally equivalent.

If you want a functioning market, you don't want an oligopoly

That's a huge stretch so that you could pull two boogeymen into the conversation and stand them next to my argument. The big tech companies may have undesirable effects on the world but paying individuals too much isn't one of them. Literally the only complaint is that other owners can't hire for under market rate? Who cares?

Thats not what i m objecting to, but the idea that having huge salaries is enough to call a market "good". It's not.

Anyway, we all have our biases, and i do understand you work for a FAANG.

I do work for a FAANG company and bear that bias, yes. I haven't always worked at a FAANG company though -- before I did I appreciated the upward pressure FAANG companies were putting on salaries.

I took another look at your comment I replied to, I must have glossed over the "If they have not ties to the party, they shouldnt have tried to compete" part. I apologize. I want to be clear that I'm not suggesting these companies shouldn't compete, I'm glad for all of the employers we have in tech. What I am suggesting is that they pay the price the market for that talent is currently willing to bear and if that results in less concentrated ownership for the ones that eventually do come to dominate the industry I won't be losing any sleep. For those that think current giants are "unbeatable" -- current FAANG companies were tiny and irrelevant 20 years ago and the industry was dominated by a different set of "unbeatable" giants.

there 's nothing to apologize for. Its understanable we all have different biases on the issue (I'm a solopreneur so not particularly inclined to side with VCs either).

Concentrating tech in a few companies in a small area may have been good for that small ecosystem but a lot of people feel left out. A lot more also feel that tech has stagnated, largely because those companies have saturated the attention levels of users and are just regurgitating slightly modified versions of the same products. As for whether they are unbeatable -- they are less beatable today than they were 20 years ago, as the market has evolved and consolidated and the low hanging fruit have been reaped, as happens in all new industries. In my view the incumbents are as old and established as car brands or banks -- the internet grew so fast that it's already old.

Look into the phrase "dumping".

Uber and Lyft are allowed to run permanent losses because they have privileged access to cheap capital. If you have a better platform but you actually need to turn a profit, your ship is sunk before you leave the harbor.

And a lot of the people earning "10x" at the RAMJAC companies would almost certainly earn more in equity appreciation in a competitive market.

This era is bizarre. All the free market rhetoric from the 1980s is being recycled to defend central planning that is now totally cool because the central planner has a corporate charter.

Central planning is about risk and force; if someone want to take a risk with their own money then it's not central planning.

In fact that there are many different companies in the transportation market: byrd, lyft, uber, taxis, spacex, tesla, nikola, cruise, boring company, etc... Shows it's not centrally planned.

> If you have a better platform but you actually need to turn a profit, your ship is sunk before you leave the harbor.

Why wouldn't a VC fund this amazing platform?

> Uber and Lyft

Wait, why does Lyft exist if Uber's funding prevents any competitor from existing?

VC's won't fund anything in Big Tech's "kill zone", and bootstrapped projects need profits to sustain themselves. It is very difficult to turn a profit while facing a competitor that can run perpetual losses.

I find the "kill zone" theory plausible and supported by available evidence [1,2,3]. Others (a large consulting firm) disagree [4].

[1] https://www.aei.org/economics/incumbents-vs-startups-the-cas...

[2] https://www.dallasfed.org/-/media/Documents/research/events/...

[3] https://www.wsj.com/articles/facebooks-destroy-modemyth-or-r...

[4] https://www.aei.org/economics/a-new-analysis-takes-a-shot-at...

As an industry, going from vertical integration -> vertical modularity with interfaces that aren't just 80s microcomputers + layers of back-compat will also be revolutionary.

(How will that happen? Well say Apple is forced to allow Samsung to install iOS on their phones. You can sure bet Apple will break a gazillion interfaces to make this as difficult as possible for Samsung. But Samsung will do it anyways, and now we'll get way less legacy-encumbered commoditized building blocks as a result!)

I think it's the other way around. One of the reasons tech companies got so big in the last 10 years is that there have been no startups emerging to compete with them because either (a) VCs have funded for the short term and encouraged exits to big companies over waiting it out for an IPO and (b) VCs have made mega funding rounds diluting out employee equity and making it a no-brainer to work for a FAANG

But the tech conglomerates don't just copy and kill you, first they ask to acquire you and then when they get rejected they copy and kill you. It costs less to acquire a company with an existing project and team that is successful than it costs to stand up a new team on a new product that is unproven.

VC's like having conglomerates that have lots of cash to throw around and can acquire their investments at nice multiples. Even if the startup sucks, they are almost guaranteed a decent exit as long as it doesn't suck TOO much.

> first they ask to acquire you and then when they get rejected they copy and kill you

Is that like a law or sth? And do they "ask nicely", or essentially blackmail?

VCs don’t rely too heavily on this. In fact, taking a early buy out is one of the outcomes that can be very good for a founder but terrible for a VC. VCs need outsize returns to boost the market overall portfolio, which has many zero outcomes. Getting acquired for 110% of your series A valuation doesn’t do anything for them.

That said, getting acquired as a strategic acquisition is a good outcome for VCs. However that’s much more rare and isn’t specific to big tech companies.

This is the 'outsource our R&D to venture-backed startups' model, rather than the 'have actual innovation and competition' model. Hey, it's still better than our defense contracting industry, which explicitly outsourced their R&D expenses to Congress.

Ah yes, I remember how Google copied and killed WhatsApp with GTalk, Facebook with Google+, and SnapChat with Photos.

Just more hacking at the branches of evil.

Yea reverse all acquisitions you guys approved cause you know at the time you were for the Big Tech and now you are against it.

What about Microsoft?

I highly doubt that this will ever succeed due to the S&P 500 and similar stock indexes. Over the past year (looking at September 6 2019 comparing that to today) there has been 15% growth in the S&P 500, which is insane considering the global pandemic and economic shutdowns. This means it is on track to double every 5 years. For a bit of context, if you were given 1,000 dollars on your 18th birthday and instead of buying a cruddy used car you invested it and made 15% interest every year, you're have over $700,000 dollars by the time you hit 65 and can retire on it. This 15% is including the massive dip that happened as the world came to a halt, without it who knows what insane growth there would have been reported.

Now with that out of the way and established, this was literally all due to big tech. All the profit is from monopolies. Apple specifically experienced over 100% growth over the last year, taking into account its weight[1] of 7% in the S&P 500 that means if my math is correct that roughly half of the growth of the S&P 500 was entirely apple. When you calculate out the weights of AAPL (Apple), MSFT (Microsoft), AMZN (Amazon), FB (Facebook), GOOGL (Alphabet stock 1), and GOOG (Alphabet stock 2) you have 24% of the total S&P 500 index. Their total change in value over the past year averaged based on their weight in the S&P 500 shows that they had a growth of 69%, when multiplied by .24 you get a bit over 15%. Making the S&P 6 most of the S&P 500s profit. By this math, which may be incorrect, it appears the remaining S&P 494 unsurprisingly is slightly down about 1% over the last year, pretty good considering the pandemic and all but the people demand stonk.

The % of S&P 500 profits attributable to each company (google stocks combined) according to my excel sheet: Apple - 48%, Amazon - 26%, Microsoft - 20%, Facebook - 7%, and Alphabet - 5%

With this in perspective, it isn't that surprising that lawmakers will never bust these companies. The DOW is slightly more resilient to big tech (only a quarter of their total profits were microsoft and apple, they didn't have the other 3 big tech companies) and there are of course other stock indexes. However, politicians love to point to the stock market as proof of their economic successes and the S&P 500 is one of the common ones. If big tech is broken up, these companies will obviously make less profit once they're no longer a monopoly and with them the stonks go away.

It also really isn't a surprise why Buck is focusing on "conservative allegations that some platforms have tried to stifle conservative voices". Of those companies, only 2 could really be considered as having social media platforms. Both of which are the small fries when it comes to weighted profit on the stock market.

Sorry for going so long winded, but this article sparked over an hour of poking around and I wanted to share.

tl;dr, big tech monopolies cause most stonking and politicians love that too much

[1] - Apparent weightings for S&P 500 https://www.investopedia.com/top-10-s-and-p-500-stocks-by-in...

"All the profit is from monopolies"

Monopoly is the ultimate goal of every for profit company and if they achieve it through fair market competition then there is nothing illegal to worry about.

As far as I know every Big Tech company achieved dominant market position through fair market competition.

Facebook could've purchased Instagram and shut it down but it didn't. Apple could've purchased Android Inc. and shut it down but it didn't.

Your post explaining economy and finance is very good btw.

Trump is really hitting all the right notes on the economy.

That said, smart breakups would make sense. FB/Insta would be a start.

What makes Facebook/Instagram a better target than, say, Amazon the virtual big box store and Amazon the cloud computing company?

I refuse to believe with this administration that any trust-busting will occur.

The only company Donald Trump will break up is Amazon, out of a personal grudge against Jeff Bezos.

What is your basis on that opinion?

Amazon seems like one of the least vertically integrated monopolies (though I agree they need to be curtailed).

I think what they are correctly pointing out is that this administration does not take a rational approach to, well, anything, so it doesn't matter what the facts are regarding Amazon's actual practices. It's just a grudge.

The current administration transparently considers "the stock market" to be their primary gauge of success. Going after any of the top 5 companies in the S&P500 is going to negatively impact the stock market. Ergo, I also doubt we will see any anti-trust activity originating from this administration.

But this conversation is a bit irrelevant since the current administration probably has less than four months left in office, which is not enough time to put anything together. I don't expect a settlement from anyone either, so we are looking at several years worth of investigations and subsequent lawsuits, appeals, etc.

Least vertically integrated?

They have their own ecomerse platform, running on their own compute, selling products they brand and manufacture, complete with warehouses and a delivery fleet

I fully expect something to be done, but only if Trump wins the next election. Facebook/Twitter/et. al., aren't throwing all of their support behind Biden because they think he's going to hurt them.

Big Tech is bringing us in an era of renewed feudalism. They can't be broken up too soon, or in too many pieces.

What about patent trolls? What about tobacco, pharmaceuticals, oil? What about airlines with hub monopolies keeping up prices?

> What about patent trolls

What's the largest patent troll even worth? $10 million?

> What about tobacco, pharmaceuticals, oil

All of them are already intensely regulated, the exact opposite of big tech

> What about airlines with hub monopolies keeping up prices

What's an example of this? The biggest problem with airlines today is that there are too many of them, and so none of them are sustainable.

All bad things. You should add telecom and cable as well. But here is the thing, search, social media, video, and micro broadcast messaging companies have picked political sides and have become propaganda machines. Even if one agrees with the political side they align with, smart folks should realize the dangers to our liberal traditions. The very idea of inalienable rights, open debate of difficult problems, and protection of minority rights are at risk.

What about newspapers and book publishers - they pick sides and hell even endorse candidates -- how can we allow them to exist?

"What about" arguments deflect attention without addressing any real issues. The closest you can get to justifying using one is to acknowledge that regulators have finite bandwidth to deal with issues and that some prioritization is needed.

But the regulators' prioritization metrics may not match your own. I don't always work on the biggest or most difficult of my household chores. Sometimes I work on ones I can complete today or which mitigate my most severe annoyances or which have a deadline for some reason.

>What about airlines with hub monopolies keeping up prices?

What about them? Flying is way too cheap right now.

The emergence of a new "tech-feudalism" is even the subject of Cédric Durand's last book: https://www.editions-zones.fr/livres/technofeodalisme/

Cédric Durand is an economics professor in Paris Sorbonne and Geneva University.

https://en.wikipedia.org/wiki/Whataboutism

We fix the things that are broken. Those things are bad but not we are talking about, we should fix those as well.

Please participate in a discussion about the topic rather than derail and deflect.

Part of it is these companies should be paying WAY MORE taxes back into the system.

Having large tech companies IS a good thing because it basically leads to natural tech standards and advances things. I'll just stick with mobile area- we have iOS & Android. What if we didn't have ANY big tech companies and there were 10+ mobile OSs. Sound great for competition? Yeah I guess. But in reality, it would never have allowed mobile to take off. How do you put resources into developing an app when you have to make it work on 10+ OSs? All with their different quirks? It's hard enough with 2.

So I think there are a lot of advantages of a small number of large tech firms.. HOWEVER. When they are able to accumulate 100+ BILLION DOLLARS it can only be clear that they are NOT contributing back into the system to "pay" for their quasi-monopolies.

We have 1 HTML and 1 CSS standard, despite dozens of browsers. In fact we have more fractiousness in the mobile space than in the web.

In all cases monopolies are bad. If you see it from a socialist POV, a monopoly should only be public and democratically controlled; if you look at it from the capitalist/libertarian side, any actor who can manipulates a market by itself prevents this market from working, stifles competition and should be broken up.

If there was a public, open standard such as Android (without google apps), many makers from around the globe could compete by shipping their hardware and a variety of software options. It happens only partially because of Google heavy hand, but it would work perfectly well without google (as it does in India and China).

Large tech companies/the oligopoly we have now erodes standards because there are vendors with significant enough market power that they can make break-away standards, hurting the overall effort.

In what way? I see nothing to show that breaking up these companies wouldn't produce the same behavior by smaller companies who take their place.

In economics, a well-functioning market is a market where no single actor can manipulate prices all by itself. That's why monopolies (oligopolies - monopsonies) are fundamentally bad.

In some situations where a monopoly makes sense (there is no sense in having 2 autonomous rail systems for instance), typically for infrastructures, there are strong provisions to be applied to keep the monopoly in control. Historically, these monopolies were often simply managed by a publicly-owned company (USPS, or interstate highways, for instance).

As I said in another comment, there is no rational way to defend or explain away monopolies. If you're a free-market capitalist, well you want a functioning free market, thus no monopolies. If you're a socialist, you want them publicly-owned and democratically controlled.

Large powerful monopolies are a tremendous menace to democracy, simple as that. It's not a question of their CEOs being nice people or not, it's deeply ingrained in the logic of being a monopoly.

Break up companies while allowing insider trading by members of the House. Who do you think is going to know the outcomes of these decisions first and act upon them?

I propose a “51% tax”. Once a given organization takes over 51% of a given market, their revenue begins to be taxed. This tax is then used to either fund public R&D or consider that to be a tax credit evenly distributed (somehow) to their competitors.

Non voting control of the market doesn’t count (so for example, if intel bought a bunch of AMD shares and didn’t use them to vote, that would be okay)

Breaking companies at a moment in history at which most of the worlds largest player are tightly coupled with their respective goverments agenda? It seems to me that someone here is still convinced that US can play by "free market" rules. Wrong. It could do it when it was effectively the only player in the world. I do not believe that innovation and flexibility can overcome sheer power in a world when everything can be freely emulated or bought out. Don't get me wrong - I would laugh to tears if Google would be broken up. Still I would wonder what will take this space.

I really want to see the harm articulated. More and more we see vague 'problems' and 'harm' but it's never clearly stated. These companies provide damn good service and at a great cost. If we want to look at harm - why don't we look at the medical industry, drug industry, cable/internet -- these companies are outright abusive to their customers and extract massive amounts of money from them and are often granted monopolies by the government.

This is the dumbest idea and it screams that the House just wants to appease their constituents. You can't break up tech companies; we've been through this before with Microsoft.

What happens is, congress breaks up a big tech company then the people who started said big tech company invest large sums of money into the next generation of tech companies and effectively control them. The next set of boy geniuses get to be the face of these new companies for recreating ideas that the big monopolists weren't allowed to finish because they were broken up.

See Microsoft and Facebook; Mark Zuckerberg is the "boy genius" who recreated an idea that wasn't allowed to be completed by Microsoft.

See Bill Gates starting Microsoft recreating a bunch of ideas that weren't allowed to be completed by Xerox.

> You can't break up tech companies; we've been through this before with Microsoft.

All of your arguments appear to be reasons for continued anti-trust enforcement and all of the problems you identify seem to be caused by stringent, followed by lax, anti-trust enforcement.

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