Google, Facebook, and Amazon benefit from an outdated definition of “monopoly”

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.

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...

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.

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.