What the author is proposing is that regulation is no longer based on economics and economic power, but on a vague definition of monopoly, and people are absurdly trigger-happy when calling something a monopoly.

The reason why anti-trust is based on precise economic definitions is that it leaves as little room as possible for the government to favor friendly players. When you need to prove harm to consumers, the bar is high, as it should be.

Otherwise, any government in power will simply abuse their own monopoly on regulation to favor and transfer wealth from society to friends.

The classic example is: Coca-Cola has a 95% market share of the cola market in some countries. Does it mean it has a monopoly? No.

If it had 100% of the cola market, would it have a monopoly? No.

Because the cola market doesn't exist in isolation. Colas compete with all other sodas, with water, juices, etc. for a share of wallet and a share of stomach.

Yeah, I'm sure that allowing companies to merge right until the point where they make consumer's lives a living hell is great for the society and the economy.

>The classic example is: Coca-Cola has a 95% market share of the cola market in some countries. Does it mean it has a monopoly? No.

There is no such thing as "cola market". There are soft-drinks, and there are tons of them in every store. (Although, most people don't realize how many of those brands are owned by Coke or Pepsi, and what kind of shit they're doing to buy out and suppress the competition.)

But more importantly, soft drinks don't control any aspect of people's lives. Google, Facebook, and Amazon control not only what you can do as a consumer, but also how smaller companies can interact with you and how those companies run their businesses.

Here is a fun mental exercise for the reader. Imagine that you run Alphabet and want to destroy an arbitrary medium-size business that threatens you in any way. How hard would it be, considering you control pretty much all the search queries on the web and tons of other things?

???

I'm not sure this is true?

I don't feel like they are controlling me when I go to Target or Walmart??? But I'm not sure if there is something maybe with the advertising that is making me go to Target and Walmart? Either way, it's totally up to me as a consumer where I spend my money I would think.

And .. what do you know? Google really doesn't like my tight uBlock Origin / Chameleon / Firefox Container / uMatrix / Privacy Badger setup, and every time I need to prove I'm not a robot (by providing free labour) I get longer and longer sequences.

Similarly, Facebook (through their WhatsApp acquisition) now decides who I get to talk to, because they have a monopoly on messaging where I live.

Amazon doesn't control where you buy random stuff, but they have disproportionate influence in some areas, like books. I'm pretty sure they are already in the position to make or break some brands simply by banning or promoting them.

Consumers prefer Google and Amazon, and it would cost them little to switch. Most consumers have no choice but to accept AT&T or Comcast.

But you do have to have done something that is anti-competitive in some market. (Not only that, but you have to have a competitive advantage in the market in which you take the anti-competitive action.)

Merely being better than the competition is not the traditional (outdated) definition of monopoly.

Probably very easy, but consistently using this strategy would ruin my own business, in effect helping my competition. Now imagine you're Facebook, how easy it was to rule the social media world, and because of series of equally stupid hard-balls you've mentioned, you're 5 years away from being MySpace.

Effectively, yes. Why is the market so disfunctional that a single company has effectively swallowed all competition?

> If it had 100% of the cola market, would it have a monopoly? No.

Err, yes.

> Because the cola market doesn't exist in isolation. Colas compete with all other sodas, with water, juices, etc. for a share of wallet and a share of stomach.

And AT&T wasn't a monopoly, since you could just walk to the person you want to talk to. Oh, wait..

This is actually pretty common in hypercompetitive commodity markets. The largest player has a slight cost advantage due to economies of scale, so they have the best price and everyone buys from them. But they still have no market power because their market share doesn't come from barriers to entry.

> Err, yes.

It's not necessarily a monopoly even at 100% when there are competitors who could immediately enter the market if the incumbent were to be so audacious as to raise prices by 4%, or do anything else the customer even mildly dislikes -- because that fact keeps them from ever doing it.

Notice that this is not how it works for Comcast, because it's not cheap or quick to wire a city with fiber, so they can get away with a great deal of abuse before anyone else would show up to compete -- even if they only had 50% market share, as long as the other 50% is another company doing all the same abusive stuff.

> And AT&T wasn't a monopoly, since you could just walk to the person you want to talk to. Oh, wait..

To be a substitute it has to be a practical alternative that can be used for the same purpose at approximately the same cost. Having to spend an hour walking is not the same cost as picking up the phone.

This is not true at all. Looking at actual competitive commodity markets for things like lumber, oil, copper, etc, we see a lot of players in the market. I can't think of a single commodity market where there is a monopoly.

Those times in history where a monopoly has occurred in commodities markets it has been grossly abused. IAR, from the trusts of the early 1900s to the cornering of the silver market one player controlling a commodity market has not turned out well.

Those are all things that come from the earth (so inherently have diffuse supply), sell into the global market (so the market is large and diverse, leaving space for upstarts to find a niche) and are of strategic interest to national governments many of which then act to ensure that an independent local industry exists.

Examples of markets where this actually happens: Coca Cola (as discussed), Walmart (in local areas), YKK in zippers, AB inBev in Brazil, Luxottica in eyewear.

It's also common for this to happen with open source software, e.g. Linux on embedded devices, OpenSSH as an ssh client/server, for many years gcc as a compiler for Unix-like systems (until Apple poured money into clang to make it competitive after FSF moved gcc to GPLv3), Android on phones, etc.

None of these is the result of the "slight price advantage" and increased efficiencies you claimed. Luxottica is expensive and uses their vertically integrated monopoly power to keep competitors like Oakley out. Warby Parker gained success so quickly largely because of this dysfunctional system. Coke, where it controls the market it does so by controlling distribution, menus, and retail space, not by offering cheaper products.

> It's also common for this to happen with open source software, e.g. Linux on embedded devices, OpenSSH as an ssh client/server,

These are not monopiles. They are more akin to standards. It's like saying the kilogram has a monopoly. It's kind of true if you play with the meaning of the word a bit, but in terms of markets, there is no monopoly power.

The eyewear market is weird because opticians use free eye exams as a loss leader to sell expensive frames, and if you have insurance then the insurance is paying and customers aren't sensitive to price, so the market selects for expensive high margin frames even though they're an inexpensive commodity with low barriers to entry. (This is a primary reason why healthcare is so expensive in general.)

The scale advantage then isn't low "price" (because the market selects for a specific high price, namely the limit on what insurance will pay), rather the advantage is lower cost which leaves the seller with more to spend on marketing etc.

And this leaves a niche for the likes of Warby Parker to capture the segment of the market which is paying out of pocket and is actually sensitive to price.

> Coke, where it controls the market it does so by controlling distribution, menus, and retail space, not by offering cheaper products.

But it still sells at competitive prices. Having retail space gives them volume, not pricing power.

> These are not monopiles. They are more akin to standards. It's like saying the kilogram has a monopoly. It's kind of true if you play with the meaning of the word a bit, but in terms of markets, there is no monopoly power.

That's the point. They have overwhelming market share but minimal market power. If suddenly Linux cost a lot of money, people would switch to BSD.

Because it has the best product. That doesn't make anything dysfunctional.

If people just like their product more, what's the problem? There's no point in punishing them for being cheaper or more liked than the competition.

One way it could be a problem is that it makes it extremely difficult for new entrants to appear. If Coca Cola pays for all the shelf-space in all the leading supermarkets, how is society ever going to experience my super-cola made from unicorn tears and sun-drops?

Who cares? Antitrust doesn't exists to protect companies, it exists to protect consumers.

Cola is just a flavor of soda, which is just a type of drink, and can be easily interchangeable with an enormous number of drinks: water, juices, teas, etc.

As long as Coke's actions are not stopping competition in that larger market with the result of harming consumers, why should anyone care?

Is that not exactly what that example is about? I, as a consumer, will not be able to experience their super-cola.

Read the Supreme Court's definition.

And it doesn't seem like they do, there is plenty of competition in the non-alcoholic drink space.

Imagine Coca-Cola creates a new flavor, with a taste so unique that nobody else is able to replicate it.

Is that a monopoly? Is Coca-Cola abusing its power?

No, and no.

A single, unreplicated product is never considered a monopoly. A monopoly implies that customers don't have an alternative.

The Supreme Court has defined market power as "the ability to raise prices above those that would be charged in a competitive market,"(8) and monopoly power as "the power to control prices or exclude competition."

You can use whatever definition you want, doesn't make it right or useful. HN readers talking about economics is largely like economists talking about computer science.

How is it any different?

Or look at the browser. Adblockers have been the number 1 extension since browser extensions were a thing. It doesn't take a genius to see why they aren't built into Chrome/FF. It's another classic abuse of a monopoly. They used search to bully their way into being the dominant browser and they use that dominance to protect their ad business.

You mean maps? The Maps API is still far cheaper than what you'd have to pay to license and deploy maps from a 3rd party before them.

Hard to argue that things are worse now...

PS: Even then, there are a lot of other map APIs available in the market, and users have been switching. That is literally the antithesis of a monopoly...

You mean the API is cheaper now than what other companies offered 13 years ago? That's irrelevant even if it's true.

>Hard to argue that things are worse now...

It's clearly worse. Instead of being able to choose from competing vendors you're effectively stuck with Google and your business depends on their whims.

No, it isn't. How can you prove consumer harm if there's more choice at lower prices?

> Instead of being able to choose from competing vendors you're effectively stuck with Google and your business depends on their whims.

There are plenty of other vendors to choose from. Did you miss all the "we switched from Google Maps to XXX" posts on Hacker News?

I'm not sure if you're being deliberately obtuse or really don't understand. To be extremely clear, the important comparison would be the market as it is vs a hypothetical one where Google didn't abuse it's position. Comparing now to what was 13 years ago is meaningless in the tech world.

>There are plenty of other vendors to choose from. Did you miss all the "we switched from Google Maps to XXX" posts on Hacker News?

There's really not. At best there's plenty of vendors reselling Open Street Map. And they don't really match Google Maps. Which is why they have a tiny market share compared to Google Maps.

No, that's not how it works. You can't compare to a random, made up scenario. Go look up antitrust cases...

Seriously, I'm not sure if you're being deliberately obtuse or really don't understand.

> And they don't really match Google Maps.

Your product sucking is not a antitrust issue, it is simply your incompetence.

Asking that Google or Coca-Cola be punished for having a better product isn't only naive, is ignorance.

>Seriously, I'm not sure if you're being deliberately obtuse or really don't understand.

You're wrong about this:

>The plaintiff must demonstrate that there is a likelihood that the scheme alleged would cause a rise in prices above a competitive level sufficient to compensate for the amounts expended on the predation, including the time value of the money invested in it

https://www.law.cornell.edu/supct/html/92-466.ZS.html

The test is "above a competitive level" and not more than prices before the scheme.

>Your product sucking is not a antitrust issue, it is simply your incompetence.

No, it's because your competitor is willing to spend more money than you and give their product away for free to protect their monopoly in another area.

>Asking that Google or Coca-Cola be punished for having a better product isn't only naive, is ignorance.

That's not what anyone is asking. If Google can make better maps for less cost than everyone else, bully for them. But that isn't what they do. They devote more resources than their competitors to make better products while giving them away for free. And they do it to extinguish competition and further cement their search/ad monopoly.

... That's exactly the issue with the current paradigm of monopoly enforcement. You can subvert a market, then if you fly under the radar for long enough, the competition bureaus have no ability to determine that pricing pressure is being exerted because the market is already non-competitive at the point of the comparison.

You conflate the limits of our current enforcement framework with the principles that underlie the effort in the first place throughout this thread.

That's why, to actually talk about a monopoly, you need to very precisely define the market.

Take Facebook: Facebook has a monopoly in online, blue-themed social networks owned by Harvard dropouts.

It doesn't have a monopoly on social networks, on communication, on online networks, on online ads, on online ads in social networks, on blue-themed online social networks, and even on blue-themed online social networks with a timeline feature.

Indeed, nor is it a defining feature of the market. That is exactly my point: if your labe of "monopoly" relies on a non-defining feature of a market that sets it apart from other markets (meaning that there is little competition between borders), you definition of monopoly is useless.

Indeed, and that's the key point here. That's what people are failing to understand.

> other side that would suggest that a large company like that would be inherently harmful without actually deliberately leveraging its market share in anticompetetive ways

You might claim that, but your burden of proof is very, very high. And that has nothing to do with monopoly or anti-trust, so you need to create a new law and regulatory framework to act on.

As I mentioned in another comment: The Supreme Court has defined market power as "the ability to raise prices above those that would be charged in a competitive market,"(8) and monopoly power as "the power to control prices or exclude competition."

CPMs are falling, users never had so much choice, and DDG, Snapchat and Tik Tok can easily enter the search, social media and ads market.

In other words, even if what you're saying is true, it has nothing to do with this discussion.

Except for that anyone can spend 30 seconds looking up how Coca Cola abuses their monopoly position to prevent competition; Richard Branson is perpetual the case study.

No. You can always create a market where a company has a "monopoly" (in the market share sense of the word).

> Why is the market so disfunctional that a single company has effectively swallowed all competition?

Where did you get that from? This is a sign that you don't understand the market you're talking about.

> And AT&T wasn't a monopoly, since you could just walk to the person you want to talk to. Oh, wait..

That doesn't make any sense, you're not even wrong.

It isn't just because you can create a mental analogy about a subject you don't understand, that the analogy is actually valid.

In most places there just isn't any competition really. It's a brand war.

Coke taught the locals to love Coke. And so they do.

It's more of a mind share / branding monopoly - although there are some issues with distribution as well.

Part of the reason might be that Coca-Cola depends on decocainized coca leaf for its characteristic flavor, but regulations make it (effectively) impossible for upstarts to access this particular herb. Coca-Cola was grandfathered in from a time when coca leaves were legal.

I don't want to get all political, but the people pushing for this definition change are (usually) economic leftists that are naturally worried about the size and power of corporations. It's their default state. There's nothing wrong with that, but be upfront with your motives and don't mask empirical concern with political ideology.

These people would have broken up Walmart in the 90s and Sears in the 70s if they could, and look where both of those companies are now.

No, it doesn't. At least not by the economic definition of monopoly, which, when talking about regulation, is the one that matters.

And even then, it is irrelevant, because the cola market doesn't exist in isolation.

For a company to have a 'monopoly power' it does not have full monopoly. Antitrust laws start to apply to corporations long before they have full monopoly.

No, it is used as shorthand for "market share in a market I define arbitrarily".

Proving monopoly power is a much more complex and academic process.

You can read here how it is defined and identified in practice.

https://www.justice.gov/atr/competition-and-monopoly-single-...

The Supreme Court has defined market power as "the ability to raise prices above those that would be charged in a competitive market,"(8) and monopoly power as "the power to control prices or exclude competition."

Those are the tests you need to pass to take action. And measuring that is a highly academic exercise.

Just go talk to the economics professors and consultants that act as experts in those cases.

No, they're saying a company can have too much economic power without being a full monopoly.

But that's not a problem.

Monopolies are problems, not strong economically powerful companies. I mean, up in my neck of the woods, ADM and Cargill are unimaginably powerful economically speaking. But it just makes no sense to say that they are as dangerous as having one company that IS the entire food market.

Please reconsider the easy targets of tech companies and have the courage to face true evil in these dictatorships

Facebook had lobbyists targeting every member of Congress. Apple works tirelessly to put their profits in tax shelters. Amazon has well-documented stories of pushing its warehouse workers past their limits. Google’s chairman spent years openly laughing at the idea of “privacy.” You think these companies need help from foreign actors to look bad?

If this line of thinking is common in SV, the echo chamber effect is worse than I suspected.

I think this is an ungenerous reading of the parent. The fact there are disinformation campaigns running all the time is known beyond a shadow of a doubt. Are Russia and China _solely_ behind the bad press that tech is getting? Decidedly not. But do they also benefit, as in, Chinese and Russian tech companies benefit if American and European ones are damaged? Yes. IMO they are busy frying bigger fish, but I have little doubt that given the chance to tip the scale of public opinion this way or that, they'd prefer tech companies catch some flack.

It's odd that you would be fine with a corporate monopoly exerting dominant power over its market (to extract more profit) but are distrustful of government exerting power to limit that from happening.

Monopoly definition is political -- the idea that governments cannot and should not step in to police markets is a novel idea.

Where did you get that idea from? I'm not.

> Monopoly definition is political

Nope, it is economics.

You don't understand how much Coke owns or creates do you? They own brands that do bottled water, tea, coffee, juice, milk, sports drinks, energy drinks, alcohol and more [1][2]. Hell, if its a beverage, Coke probably owns a brand that makes it. [3]

[1] https://www.coca-colajourney.com.au/brands/ [2] https://www.coca-colacompany.com/packages/brands [3] https://en.wikipedia.org/wiki/List_of_Coca-Cola_brands

Oh please...

For this reason, antitrust law does not regard as illegal the mere possession of monopoly power where it is the product of superior skill, foresight, or industry. Where monopoly power is acquired or maintained through anticompetitive conduct, however, antitrust law properly objects.

A monopoly that doesn't abuse its market power to prevent competition is either a natural monopoly or a temporary situation.

Neither of those are anti-trust issues.

From a anti-trust perspective, not-illegal is perfectly fine.

> I would argue that any situation where there is a natural monopoly it should be state run rather than privately run because that situation is, by its very nature, anti-competitive (first in, best dressed!)

Argue as much as you want, the real world has consistently shown that government-run enterprises, with rare exceptions, are inefficient drains of resources.

That is a ridiculous assertion, that stems purely from libertarian propaganda.

This is a big deal because they can abuse their advertising clout for evil purposes. (E.g., advertise Chrome but put out a prohibitive pricing scheme for Firefox.)

But it's not a monopoly yet because Facebook and Amazon are competing actors in this space in the USA, and other nations have their own local actors.

In theory, though, if Google went on a really aggressive attack via their Chrome, Android and Analytics properties then they could kill off the competition.

That's not true. Not even from a particular viewpoint. You might want to rephrase that.

Google's primary revenue stream is from online advertising. They have a myriad of products, without which, the revenue stream would dry up. Youtube is a platform and a product and a brand. Google Search. GMail. Etc.

However I believe the reason nothing changes despite these obvious market distortions is that super profits are self perpetuating: companies invest in politicians to keep the distortions in place. The technical definition of monopoly is just a smoke screen.

No, it doesn't. Making up your own definition of monopoly (or the meaningless "effective monopoly") doesn't make it true, valid, or useful.

The Supreme Court has defined market power as "the ability to raise prices above those that would be charged in a competitive market,"(8) and monopoly power as "the power to control prices or exclude competition."(9) The Supreme Court has held that "[m]onopoly power under § 2 requires, of course, something greater than market power under § 1."

Nope. Because monopoly isn't just about market share. That's what people here don't seem to understand.

Power that can be abused will be abused.

b) "a monopoly is perfectly fine, AS LONG AS the economic power isn't abused to prevent competition which harms consumers."

This is kind of a non sequitur ... Of course they will prevent competition, that's the essential name of the game. Every company does this - this is not 'abuse' it's just how it works. Ergo, by your definition monopolies are all bad.

I actually think some monopolies are good - when you have well run actor that has some external controls on prices etc. it provides stability among other things.

c) To the extent that colas can be defined as a market, then they have a monopoly. 'Search' does exist aside an adjacent market in which content can be replaced, so it's not helpful.

Google needs to be broken up.

Search is so fundamentally essential ... it's like 'information neutrality'.

The FANGS are total hyprocrits pushing for 'Net Neutrality'.

Just as Comcast should not be able to offer anything but QoS and not read the content of my bites ... Google should not be able to offer anything but quality search. All their other products depend on their search monopoly. Much like Comcast would leverage looking at your packets. Much like Microsoft leverages their OS power to control office software etc..

Search, OS, maybe even Browsers - should be independent, just as Carriers can't use their power to get into other lines of business.

The AT&T merger is bad news, they shouldn't be in the content business.

Moreover, it is pretty easy to not use google search? Why couldn't someone use DDG, Yahoo, Bing, etc.? despite it being defaulted to in browsers (you can change this), most people elect to use Google. If a company dominates a single sector through consumer choice, should they be broken up (esoecially when consumer could walk away)?

I'm not try to be facetious, I would just like counter arguments

Google is able to use its lead in search to exert undue influence on other markets. Google can (and has) ocassionaly placed banners suggesting a switch to chrome, influencing the browser market. Google showcases YouTube videos above other video results, regardless of the relative merits of the videos. Similar things in other verticals.

Additionally, search dominance leads to dominance in the related search ads and text ads generally space. In part, because of market size, Yahoo was unable to attract the same kind of advertising market as Google, and famously chose to contract that out to Microsoft, which also was unable to make it work well. I was at Yahoo during parts of that time, and my feeling is that market size wasn't a big part of that failure, but it could be argued that it was a part.

Is any of this compelling enough to be worth an anti-trust case? I don't think so, but maybe?

How could you break up Google if this was considered egrigious enough? Split into several actually separate companies: software, containing chrome, android, and chrome os; search, providing web search apis, but not a front end; advertising, providing advertising apis, but not hosting any sites that use then; consumer services, including a web search front end, Gmail, YouTube, etc; business services, including the Google cloud stuff and maybe g suite; I dunno about the alphabet soup bits. Make the search and ads services contracts be on FRAND and public terms.

But so can anybody else. Google sells ads on their search engine to anyone. If you asked nicely enough with a large enough pile of money they would presumably even sell you a banner placement.

What is the objection supposed to be? That Google didn't pay itself for the ad space? How would it have changed anything if they did?

I work at Google; opinions are my own.

I believe the objection is that it's an unfair competitive advantage and hurts competition. The reasoning is similar to that given when Google was fined for Google Shopping in the EU.

> But so can anybody else. Google sells ads on their search engine to anyone. If you asked nicely enough with a large enough pile of money they would presumably even sell you a banner placement.

You could make the same argument about Microsoft with Internet Explorer then no? I'm sure if someone offered to pay many billions of dollars, Microsoft would have gladly included their browser with Windows too.

Being able to do the same thing with a sufficiently large sum of money doesn't imply that something is not an anticompetitive practice. If anything, it may show that it is indeed anticompetitive..

But the advantage is just having more resources. Mozilla could likewise pay Facebook/Reddit/Yahoo to push Firefox... if they could afford it. You could call it "unfair" that they don't have the money, but that has nothing to do with Google search in particular.

> You could make the same argument about Microsoft with Internet Explorer then no? I'm sure if someone offered to pay many billions of dollars, Microsoft would have gladly included their browser with Windows too.

But that's the opposite of how tying works. The classic tying case is you have a monopoly on cars and you require all your customers to buy your brand of gasoline, so you also monopolize the market for gasoline.

The Internet Explorer case was really bizarre, because they kept talking about the browser market, but what they were really tying to Windows was (web) apps. It was the same thing with Java. Microsoft wanted to tie the app ecosystem to Windows, so you had to use their platform-specific APIs and the app developer and all their customers get tied to Windows. Microsoft never made a dime from the browser market, nor ever intended to.

But Google pushing Chrome is the other side of the coin. They also have no intention to make any money selling web browsers, but their goal isn't to tie Google search to Chrome -- it works fine in Firefox and IE -- their goal was to prevent Microsoft from using dominance in the browser market to tie Google search (the web app) to Windows through the browser. It's an anti-tying move.

To get where Microsoft was they would have to be preventing other browsers from using Google search while preventing Chrome from using non-Google search (as Microsoft interfered with Netscape running on Windows, prevented IE from being removed and discontinued IE for non-Windows platforms as soon as it gained share), and then at the same time filling Chrome with non-standard proprietary APIs with no public spec (as Microsoft did with IE/ActiveX/etc.) so that third party pages would only work in the browser that only worked with Google search, and competing browsers would have no efficient way to know how to produce the same behavior.

Just promoting a free standards-compliant browser with published source code isn't anywhere near that.

There's no guarantee (read the demand partner legal disclaimers, there's specifically NO guarantees) that there's an equitable distribution. There have been analyses to show that the algorithm has short-circuits to benefit Google products, featured here on HN and other places. I don't have them onhand, but it's openly discussed (meaning beyond being taboo):

https://www.cnbc.com/2018/09/21/google-staff-discussed-tweak...

Analyses by competitors who don't like their search ranking. The analyses show a bias alright, but whose?

> I don't have them onhand, but it's openly discussed (meaning beyond being taboo)

That's not a discussion of purposely harming competitors, it's partisans being partisan -- and getting shut down by internal processes designed to prevent exactly that.

Large organizations don't prevent misbehavior by hiring perfect humans. They do it by having layered defenses against it. The fact that the partisans failed is if anything evidence that the internal controls are effective.

My guess is they would have considered it before they had their own browser, but now that chrome is something they've invested in, it seems like something that is not for sale.

How much of an impact is that placement? I don't really know, but I bet Google has data on it. Discovery on a case like this would be interesting.

Anyway, the point is that's something they can do, because they control so much of search. Bing putting up a banner that says hey, why don't you use Edge, pretty please doesn't have as much impact, because Bing has a smaller market share.

They're under no obligation to sell their endorsement. And what difference does the specific price make for placement? Suppose it was a lot.

> Anyway, the point is that's something they can do, because they control so much of search. Bing putting up a banner that says hey, why don't you use Edge, pretty please doesn't have as much impact, because Bing has a smaller market share.

How is it different than a company that just has more money and can therefore afford to buy more advertising? It's effectively what they're doing -- they could have sold the space they're using to advertise Chrome to a third party for its market value. By using it themselves they're foregoing that revenue, essentially the Chrome division purchasing the space from the search division.

Google search is fundamentally better than DDG (for most purposes) because it has massive advantages that make it effectively unassailable. For example, I stopped using DDG because I rely on reverse image search. FYI DDG does not have its own crawler, it gets data from other sources. And it won't get reverse image search unless it does it itself ... which I doubt will happen. Maybe. And of course Yahoo is not a search engine either, it's not really an alternative at all.

In order to compete with Google effectively, you'd have to build your own crawler etc.. It's essentially impossible. The number of engineers, data centres other components ... my gosh man.

Consider for a moment that Google is a massive cash printing machine. Do you not think that VC's would be lining up, piling billions of dollars into competitors in order to take a piece of the action?

Why is nobody - not even intelligent actors with a lot of cash to burn - investing in the most profitable business model of our era?

Because the barriers to compete are absurdly high.

It's a monopoly.

And if it is - then we have to be very concerned about their relationship to adjacent layers of the value chain because of their ability to subsidize products to put others out of business.

So you're aware that in free trade deals between nations, part of the deal includes measures to bar state actors from participating in some economies, and also, rules against 'dumping'. This is because if a nation state actor wants to, they could subsidize their own industries, wipe out competition in other nations, and then let their industry dominate.

The same applies in value chain monopolies.

Standard Oil didn't have 'better oil' or better practices than other Oil companies - they used control and ownership of the railroads to increase prices on their competitors and put them out of business. In a truly competitive landscape, there would be no Standard Oil.

When Microsoft uses their ownership of the OS to put all other 'Office' solutions out of business, is that good for consumers?

By the way - MS is still printing money hands over fist in Office Software. They are making billions. They are a de-facto standard, arguably a monopoly there. Why aren't investors lining up to create competitive solutions? (Because it's an unassailable monopoly).

If Google decides to get into your line of business, and you are small, they will absolutely wipe you out if they want to, and it has nothing to do with having 'a better product'.

Also consider for a moment how many of Google's other business parts could stand on their own as businesses?

Google Analytics? Android? Chrome? Google Docs? Maps?

They are all all money pits, strategic investments (i.e. 'moats') by Google to ensure the dominance of Google Search.

How could a mobile OS vendor compete in a market where Google is using billions from one market, to dominate a different one, like mobile OS? They can't. Maybe in China, wherein there are non-market factors to protect their own makers.

For the same reason that governments have mostly separated the transport of electricity from electricity production, for the same reason we have net neutrality, Google Search should possibly be pared off from the other businesses.

Amazon is using massive profits from AWS to put retailers out of business. Amazon is not hugely profitable, but their AWS business unit is, ergo, the retail unit is probably losing money.

How can retailers compete against Amazon, which is effectively selling at a loss? They can't.

Consumers generally don't win when a de-facto or real monopoly in one market, uses that power to wipe out competition in others.

There is essentially no real competition in search, nobody is putting money in it. Same for office software. Given how much money is being minted in those markets, it's a sure sign of monopoly.

As a thought experiment, lets say that three people came up with a WAY better search engine than google. Like way better. Will this new company be able to take search market share away from Google? No.

Why? Chrome is now the dominant browser with Google search built in. Google is the default search on Apple and Android Devices. Google has Billions in marketing for search.

But most importantly, Google has the best engineers on the planet and they can re-build what this crack team did, deploy it to a billion people and drain you in court if you decide to fight them.

Wouldn't you rather just sell to them and cash out instead of getting taken out?

That's how this game goes.

The Internet Archive does this with an annual budget of $10M. That is clearly not a lot of money compared to the amount on the table.

> If Google decides to get into your line of business, and you are small, they will absolutely wipe you out if they want to, and it has nothing to do with having 'a better product'.

That is what happens if any multi-billion dollar company decides to get into your line of business.

> How could a mobile OS vendor compete in a market where Google is using billions from one market, to dominate a different one, like mobile OS?

This is conspicuously disproven by basically every mobile device maker around, who all maintain their own Android forks, plus Apple.

The point of Android wasn't to dominate the OS market, it was to commodify it -- which it did. But that's the opposite of anticompetitive. Now entering the OS market is trivial because you can start with Android, make zero or more changes to it and you have yourself an OS without paying Google or anyone else a dime. You don't even have to use Google search.

It's also hard to build a new car company, or a new chemical manufacturing conglomerate, or a new anything. That is not a defining feature of a monopoly.

Yes, but it's impossible to build a quality one, that will compete with Google.

"Microsoft has been taking their shot for years, and so far it isn't working, but that's not because of barriers to entry. It's because they do not execute as well as Google does."

MSFT is one of the greatest companies in the world, with tons of high tech workers, brand recognition and the like. If they can't make a dent in search, then again I hold this up as evidence of monopoly.

When there is only 1 primary player, despite everything else, then that alone is evidence of monopoly.

If VC's could spend 1 Billion and take a piece out of Google - they would in a heartbeat.

I think that's a little unfair to Microsoft.

Google has spent way more engineer team on all the infrastructure required to make Search great. Microsoft's main products were a desktop OS and application, so presumably their existing internal tooling probably wasn't as mature for scalable web services.

I work at Google but opinions are my won.

The biggest problem with Google is that they're collecting too much data on people. But that has basically nothing to do with market share or market power or competition. It would be exactly the same problem if they had a dozen competitors.

Diapers.com was the ultimate example of this [1]

Soon after, Quidsi noticed Amazon dropping prices up to 30 percent on diapers and other baby products. As an experiment, Quidsi executives manipulated their prices and then watched as Amazon’s website changed its prices accordingly. Amazon’s pricing bots—software that carefully monitors other companies’ prices and adjusts Amazon’s to match—were tracking Diapers.com.

This is unambiguously Amazon using their Market power to stifle competition.

Now, you might say something like - yea that's just competition, or to the victor go the spoils. However that's the whole point of this kind of advocacy - to prevent companies from taking significant market power and spreading out the competitive landscape. The language may not perfectly fit between "monopoly" or otherwise, but the end result is the same: Small players can't compete. Best thing you can hope for is an acquisition.

This is especially bad in technology, where information advantages grow with the scope of the company.

[1] https://slate.com/technology/2013/10/amazon-book-how-jeff-be...

Amazon lowers the price, so the consumers will get to buy cheaper diapers (sounds good). Apparently Amazon can sell them at a very low margin, it's just choosing one that's just below what competition can offer. Then of course you have an issue with dumping (selling diapers with profit < $0), but I guess Amazon can afford to sell them at $0+eps profit, so its end game is to sell diapers at a lowest price to outcompete diaper stores on a crazy low margin. Well, maybe there won't be online diapers stores anymore. Most likely Amazon will then bump up the price back.. Well, so the diaper stores will appear again (if the new bumped-up price is above a margin at which an individual store can again operate). What will Amazon do then? Go back to step 1? Great, more cheap diapers at "eps" margin. This, of course, requires the third party stores to have low "startup" costs.

And maybe the bottom-line here is, that there is not going to be diapers.com and alike anymore. Well, maybe online diapers store is not a branch of industry one can enter in 2018 and expect to win big just by having a nicer website, without proposing something truly innovative that a giant like Amazon cannot offer (see how dollar shave club competed with Gilette/Wilkinson etc.)

Amazon, because they have information and economic advantage, can effectively manipulate the price of any good they want to make it uneconomical for any other company to play.

That's a single company having outsized power to determine the state of the market.

Using your example let's say that no other company can sell diapers online. That means for consumers that either don't want to or can't buy from Amazon, they are materially hurt from the lack of competition. Not only that, if they tried to start their own, they would be crushed just like the others. So in the end it's anti competition and increases friction for new business creation. A fundamental tenet of markets is that diverse competition is the primary forcing mechanism to ensure accessibility and quality.

The only possible argument here is that it's possible to have a singular organization that provides everything better than a diverse competitive market could. Neither history nor theory supports this thesis and the secondary effect on economies and political power compounds the downsides.

If a group of consumers can't or don't want to shop at Amazon, then they've just created a niche in the market (be it due to geography or anti-Amazon sentiment), that would create a demand for a diaper store that would serve those customers, because, by definition, they have just outcompeted Amazon by being more available or appealing to the consumers.

> The only possible argument here is that it's possible to have a singular organization that provides everything better than a diverse competitive market could. Neither history nor theory supports this thesis and the secondary effect on economies and political power compounds the downsides.

I believe history shows that as long as said singular organization it keeps providing everything, it will prevail (in everything). The moment it stops, it collapses and new players come in its place. This is, of course, as long as state doesn't decide to bail it out like it historically did in several heavily regulated industries, which are hard to enter partially because of said regulations. Consumers are rarely hurt in the process, as long as you let the big company take the fall, and let the new better companies grow its place once it stops delivering. If you regulate something like Search, to Google it's just extra operational costs, but as a side effect, Google becomes too big to fall, because no one else can really step in its boots anymore and enter the market.

Not only that, if they tried to start their own, they would be crushed just like the others.

As did you in the original reply. So we're going in circles on that point.

You're missing the broader point though. Even if a firm did everything, it would be bad for the economy because of lack of diversity. That's effectively what the Soviet Union did. It's not because it's the government that things don't work that way, it's because the government doesn't have competition that things fail when centrally managed.

changes to the economic definition and legal enforcement of anti-monopoly are one issue, but a general slowdown in the pace of technological innovation combined with globalization/spread of technology is the primary force driving consolidation/horizontal/vertical integration in many industries

It's my understanding that the Chicago School types were not impressed, but that was probably to be expected.

but us the searchers and friends are not the customer. FB and google are selling ads, and they are in direct competition with each other. If I want to buy advertising space online, I have plenty of options and the innovation for me to reach my target customers is astounding. The system is working exactly as it should. Or so it goes from a monetary point of view.

cached because current link is unavailable

http://archive.is/ye5RY

Apple - own device demand, not the apps (or the default search).

Google - own search demand, not the content.

Facebook - own social demand, but not the content.

Airbnb - own lodging demand, but not the real estate.

Uber - own transportation demand, but not any vehicles.

Uber eats - own hunger, but not any food or restaurants

In many cases the economic concept of choice is idealized and doesn't work in the real world. For instance what choice does a consumer concerned about privacy have beyond Android and IOS, or in telecom, oil and other polluting industries and other dysfunctional markets? The network effects of social media cannot be ignored and one may often be forced to participate in a damaging environment that does not respect consumers privacy and basic rights.

Consumers may want a privacy respecting Internet and products but there is no way for them to affect that outcome only through choice, so choice on its own is not empowering. You can only choose what is available. And this is where in democratic societies democratic institutions are expected to step in to limit harm.

For example, how is it fair that a bunch of investors make a pile of money so big that it puts small bookstores out of business?

(Yes, I know, small bookstores provide a whole different experience than shopping on Amazon. The thing is, nobody cares. Or at least too few people care to make the small bookstores into viable businesses.)

How did Amazon "out-money" small bookstores in a way that wasn't simply "more efficiently providing a competing service"?

By saying that you're basically throwing the whole concept of "fairness" out of the window, so that's no argument.

In my view, Amazon does provide a more complete service than smaller bookstores, but they achieved this with external money; money obtained from outside the book-selling business.

A similar thing is happening to restaurant owners. Companies like Uber Eats (started through enormous investments) build a portal where people can order food. Suddenly, restaurant owners have to pay a sum of money to these companies to stay in business. This is totally unfair, in my view.

Is fairness forcing people to spend more money on less desirable products and firms simply because those firms exist?

That seems pretty unfair to me. And it's been shown to be bad economics time and time again.

Fair seems letting people decide which business they want to purchase from, even if that means less desirable ones don't get paid.

Again, is it fair for good and efficient businesses to be forced to support bad and inefficient businesses?

If so, what will stop people from starting inefficient businesses to make the good ones hand them charity?

Most of our standard of living increases is the result of inefficient companies and processes being replaced by more efficient ones. What you propose slows this down (or perhaps stops it completely), so now is it fair you're robbing the future of quality of life gains simply to hand charity to inefficient actors?

Do you routinely buy overpriced goods to support your beliefs?

This is simply bad economics, and it's the kind of belief that leads to terrible societal outcomes when enough people enforce this via political power.

I find it fair for companies to compete for customers via better products, lower prices, better service, or any combination of things their customers want, and those companies that cannot compete through obsolescence, inefficiency, market changes, to fade away. This seems pretty fair to me, and has less societally painful side effects than any system I've seen tried (and I've read quite a bit on such things).

> By saying that you're basically throwing the whole concept of "fairness" out of the window, so that's no argument.

Not at all. I'm saying that, if the small bookstores are less efficient at providing books to people, then there is room for a more efficient competitor to drive them out of business without any unfair competition taking place.

> In my view, Amazon does provide a more complete service than smaller bookstores, but they achieved this with external money; money obtained from outside the book-selling business.

So what if the money was from outside the book-selling business? You seem to be declaring all outside capital investment to be unfair, which strikes me as a bizarre stance. Were railroads unfair competition to wagons because the railroads had to raise capital on Wall Street?

Uber for example is not more efficient than RideAustin, the local non-profit ridesharing alternative. What they do have however, is a large amount of funding behind them which allows them to artificially lower the true cost and choke out competitors. Once they've bled the competition dry, they can raise the prices again and benefit from full control over various parts of a market.

This is the same tactic that Walmart has used in order to destroy many local towns by severely undercutting local businesses into oblivion. We should consider this to be an objectively bad thing, considering if said sole company ends up leaving the area due to profitability reasons they leave the residents with nothing [1].

This is how the 'free market' works in practice. The largest companies with the most money don't actually compete on the same level as local companies and it would be naive to think that small bookstores vanishing is solely due to inefficiency.

[1] https://www.theguardian.com/us-news/2017/jul/09/what-happene...

A thing that HNers have been speculating will happen for years, but which has so far failed to materialize.

You can also look at how dreadful the situation is for ISPs in America.

ISPs are often a monopoly, and often a government sanctioned one. I'd not argue against an investigation into their practices.

You would have to be not arguing in good faith to somehow not be aware of all of the monopolistic and anti-consumer tactics Walmart has pulled, been accused of and has had to legally dealt with over the long period of time they've been active. So if you want to make any arguments about how the free market works, I think you should start by looking deeply at how Walmart is ran.

[1] https://web.archive.org/web/20051027020550/http://www.newrul...

[2] https://web.archive.org/web/20060820080242/http://www.harper...

[3] https://www.nytimes.com/2006/11/30/business/30pharmacy.html?...

[4] https://ilsr.org/walmart-settles-predatory-pricing-charge/

For example, your last link specifically states Walmart was selling things cheaper than their competitors, the competitors sued, and in the agreement with the Wisconsin Department of Agriculture, Trade, and Consumer Protection, Walmart admitted no wrong doing and was not fined whatsoever.

If you're going to post links supporting your claim that "Once they've bled the competition dry, they can raise the prices again and benefit from full control over various parts of a market." don't post links with zero support for that. It's a waste of our time.

Let's take the Uber Eats example. You think that restaurants owe Uber money for simply being present on their platform (necessary for survival these days for restaurant owners). But Uber doesn't owe restaurants anything?

It's not investments that are the problem. It's the way whole professions are "enslaved" by investors who simply make a pile of money, scale things up and build a portal, which then becomes the new market leader.

(Of course, if you keep thinking inside the box of the free-market, then you will think this is all ok, but that is not the point).

Uber Eats provides value to (at least some) eaters, who therefore use it to decide which restaurants to patronize. (I can't tell you why they do so; I don't use it myself, and I don't understand why anyone would want to.) The restaurants then have to be part of Uber Eats (at a cost), or to miss out on those customers who use Uber Eats. If Uber Eats charges more than it's worth, then the restaurants won't sign up.

> It's not investments that are the problem. It's the way whole professions are "enslaved" by investors who simply make a pile of money, scale things up and build a portal, which then becomes the new market leader.

You don't become a market leader by having a lot of money and building a portal. You do it by providing something that people want enough for them to use your portal. Otherwise you get ignored.

> (Of course, if you keep thinking inside the box of the free-market, then you will think this is all ok, but that is not the point).

I think my box matches the reality of the world more than your box does. Maybe you need to think outside of your box a bit too...

It’s often the case that this is harmful to the market in the long term.

How would Intel destroying AMD be good for innovation?

Once AMD was gone, they'd have no more incentive to innovate at all.

However, because MS was close to a monopoly everything they do was suspect. On the other hand modern day apple seems to profit immensely from being NOT a monopoly. By not having a monopoly in a single area they're allowed to vertically expand as much as they want. Imagine if apple weren't allowed to offer siri, or icloud, or facetime, or imessages? The vertical expansion turns out to be more profitable than horizontal domination while at the same time being as abusive as MS ever was.

Some companies are willingly selling to some other companies, so let's forcibly break some companies apart. How is former a problem, and latter, a solution?

so on the side note, is there economic simulator, that can simulate such scenario ?

Tech moves too fast, I dont think we will need to worry about a monopoly when FAANG stock starts falling.

http://content.time.com/time/magazine/article/0,9171,997265,...

(sadly paywalled)

[1] https://transition.fcc.gov/transaction/aol-tw/exparte/disney...

Personally I think this is only half of the story because consumer welfare is not just prices but also quality which depends on competition. The suppression of competition was primary clause used for free IE on Windows anti-trust lawsuit.

So I think article is not well researched and is spreading half-truths.

For reference, please see Pixar's WALL-E.

"‘Antitrust was defined by Robert Bork. I cannot overstate his influence.’'

https://www.washingtonpost.com/news/wonk/wp/2012/12/20/antit...

https://www.cato.org/policy-report/julyaugust-1999/cato-book...

Bork's "landmark" treatise on monopoly remains curiously unavailable at many libraries:

https://www.worldcat.org/title/antitrust-paradox-a-policy-at...

This reflects earlier treatment of monopoly within Libertarian economics texts for popular consumption, notably Harry Hazlitt's Economics in One Lesson, which addresses monopoly by ... dispensing with it virtually entirely:

https://fee.org/resources/economics-in-one-lesson/

Contrast Alfred Marshall, Principles, 8th ed, leading collegiate text at the time, with a 15 page chapter and a multitude of mentions.

https://archive.org/details/in.ernet.dli.2015.149776/page/n4...

Barak Y. Orbach, "THE ANTITRUST CONSUMER WELFARE PARADOX":

“Consumer welfare” is the only articulated goal of antitrust law in the United States. It became the governing standard following the 1978 publication of Robert Bork's The Antitrust Paradox. The consumer welfare standard has been instrumental to the implementation and enforcement of antitrust laws. Courts believe they understand this standard, although they do not bother to analyze it. Scholars hold various views about the desirable interpretations of the standard and they selectively use random judicial statements to substantiate opposite views. This article introduces the antitrust consumer welfare paradox: it shows that, under all present interpretations of the term “consumer welfare,” there are several sets of circumstances in which the application of antitrust laws may hurt consumers and reduce total social welfare. This article shows that, when Bork used the term “consumer welfare,” he obscured basic concepts in economics....

https://academic.oup.com/jcle/article-abstract/7/1/133/75097...