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".
I know FAANG companies are easy to beat up on, but going after these is just bullying. Go after the actual evil companies.
What customers? They offer you a good service, sure, but what relationship do you really have with Facebook or Google?
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".
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.
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.
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.
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.
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).
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.
> 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.
It wanted to move fast and break things. It did. People don’t like that it did.
“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.
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.
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 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.
.
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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.
I mean the new york times actively advocated for the Iraq -- should they exist, maybe be shut down?
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.
This is just one issue. Not even one of the the major ones.
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.
the crucial difference is due to the digial aspect. digital "material" does not have physical contraints. this simple fact changes everything.
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.
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.
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.
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).
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.
(Note: only trial products operate on a consignment arrangement where the manufacturer only gets paid for units actually sold on.)
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.
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.
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.
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).
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.
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.)
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.
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.
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.
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.
Not what you in mind probably, but here we are.
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.
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.
(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.)
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?
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.)
How far ahead of time is OK?
In the physical goods world, products are usually purchased months or weeks in advance of being sold.
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.
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.
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).