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Google, Facebook, and Amazon benefit from an outdated definition of “monopoly”

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Re: Google, Facebook, and Amazon benefit from an outdated definition of “monopoly”

#71

Post by AnimalMuppet »

matthewmacleod wrote: post #23
AnimalMuppet wrote: post #18

Earlier quoted context omitted.

Nobody owed small bookstores a living. If Amazon can give people more choice at the same or better prices, why should the small bookstores survive? They're less efficient and therefore wasting resources. (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…

I do generally agree, but capital can really distort fair competition in the long run. A large investment can be used to sell products at unsustainable prices until competitors go out of business, before jacking them up for the now-captive market. Classic predatory pricing. It’s often the case that this is harmful to the market in the long term.

I agree. My objection is to amelius, whose claim seems to be that money is automatically or inherently unfair (as opposed to your statement, which is that it can be used that way).

Re: Google, Facebook, and Amazon benefit from an outdated definition of “monopoly”

#72

Post by ucaetano »

smt88 wrote: post #67
ucaetano wrote: post #58

Earlier quoted context omitted.

But that isn't a monopoly. 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.

As others have pointed out, you just seem to be using a different definition than the rest of us are. A single, unreplicated product is never considered a monopoly. A monopoly implies that customers don't have an alternative.

> As others have pointed out, you just seem to be using a different definition than the rest of us are.

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.

Re: Google, Facebook, and Amazon benefit from an outdated definition of “monopoly”

#73

Post by colllectorof »

ucaetano wrote: post #14

It isn't outdated, it is an economics definition of a monopoly, and isn't even that: a monopoly is perfectly fine, AS LONG AS the economic power isn't abused to prevent competition which harms consumers. 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…

>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.

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?

Re: Google, Facebook, and Amazon benefit from an outdated definition of “monopoly”

#74

Post by AnthonyMouse »

toast0 wrote: post #69
wpasc wrote: post #50

Earlier quoted context omitted.

I frequently see people say "Google should be broken up" and I want to hear more on that argument. Meaning Google and Youtube should be separated? but then we're no longer talking about just their search dominance right? How could search alone be broken up if a large part of the complaint is about the dominance of their search? Moreover, it is pretty easy to not use google search? Why couldn't someone use DDG, Yahoo,…

The argument goes roughly as follows: 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 domi…

> Google can (and has) ocassionaly placed banners suggesting a switch to chrome, influencing the browser market.

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?

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

#75

Post by timoth3y »

AnthonyMouse wrote: post #70
Nullabillity wrote: post #17

Earlier quoted context omitted.

> 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. 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, wi…

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

> 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.

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.

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

#76

Post by AnthonyMouse »

twtw wrote: post #68
wpasc wrote: post #50

Earlier quoted context omitted.

I frequently see people say "Google should be broken up" and I want to hear more on that argument. Meaning Google and Youtube should be separated? but then we're no longer talking about just their search dominance right? How could search alone be broken up if a large part of the complaint is about the dominance of their search? Moreover, it is pretty easy to not use google search? Why couldn't someone use DDG, Yahoo,…

IMO, the right approach to regulating Google is similar to the regulations pre-breakup imposed on AT&T. Stuff like all patents and technology must be made public, interoperability, etc.

What is that expected to change? Google is not exactly known for initiating patent litigation. They use standard SMTP, HTTP, DNS etc. -- all open standards, and when they do something like QUIC they write it up and standardize that too. They've had that "download your data" thing for years.

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.

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

#78

Post by asdfasgasdgasdg »

djrobstep wrote: post #42
ucaetano wrote: post #38

Earlier quoted context omitted.

> It's odd that you would be fine with a corporate monopoly exerting dominant power over its market (to extract more profit) Where did you get that idea from? I'm not. > Monopoly definition is political Nope, it is economics.

This might blow your mind but: Economics is political.

And politics is economics. And economics is physics. And physics is chemistry. And chemistry is math. All useless statements in the context of this discussion.

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

#79

Post by asdfasgasdgasdg »

sonnyblarney wrote: post #66
wpasc wrote: post #50

Earlier quoted context omitted.

I frequently see people say "Google should be broken up" and I want to hear more on that argument. Meaning Google and Youtube should be separated? but then we're no longer talking about just their search dominance right? How could search alone be broken up if a large part of the complaint is about the dominance of their search? Moreover, it is pretty easy to not use google search? Why couldn't someone use DDG, Yahoo,…

There are two arguments, one is about Search as a monopoly the other is about that power as it relates to other parts of the value chain. 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 source…

DDG is proof positive that the barriers to entry are extraordinarily low. It is incredibly easy to start a search engine. Now, to make one that is considered good relative to Google, that is hard, because if Google is known for one thing, it's known for executing in search. But if someone wanted to invest billions and billions of dollars, they could take a shot. 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.

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.

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

#80

Post by asdfasgasdgasdg »

KaoruAoiShiho wrote: post #31

Anyone think overaggressive monopoly laws can sometimes harm innovation? For example when Intel was way ahead of AMD by natural instinct it should've wanted to push ahead and "finish off" the company. But perhaps because it feared being labeled a monopoly it took the foot off the pedal and expanded elsewhere instead, harming x86 innovation. However, that's not to say monopolies are ok. I think regulators should do mo…

Companies should not have a goal of destroying each other. That is exactly what monopoly law is designed to prevent. They should be concerned with effectively serving their customers. If Intel had stuck to that path, then they would not have been successfully sued for using monopoly tactics.
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