Google, Facebook, and Amazon benefit from an outdated definition of “monopoly” • Hacker News Board

Re: Google, Facebook, and Amazon benefit from an outdated definition of “monopoly”

#131

Post by pjmlp » Tue, Nov 13, 2018, 1:45 PM UTC

markdown wrote: post #34

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…

I don't think you've thought that through. How would Intel destroying AMD be good for innovation? Once AMD was gone, they'd have no more incentive to innovate at all .

With AMD gone we would all have been using some variation of Itanium by now, instead we got stuck with x86 because AMD found a workaround for 64 bit migration.

Re: Google, Facebook, and Amazon benefit from an outdated definition of “monopoly”

#132

Post by knlinux » Tue, Nov 13, 2018, 1:46 PM UTC

AndrewKemendo wrote: post #98

Look no further than the dozens of examples of major tech companies essentially "dumping" product to kill up and coming startups. 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…

Please change my mind on that, but I don't understand the problem with the diapers store example (or any other product for that matter).

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 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.)

Re: Google, Facebook, and Amazon benefit from an outdated definition of “monopoly”

#133

Post by ChrisLomont » Tue, Nov 13, 2018, 1:52 PM UTC

amelius wrote: post #63

ChrisLomont wrote: post #56

Earlier quoted context omitted.

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

It's not a matter of all or nothing. A different way, for example, would be for Amazon to let small bookstores share in the profits, as a compensation for putting them out of business in such unfair way. (That would be fair, but it is unfortunately not how we have organised things.)

>for putting them out of business in such unfair way

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).

Re: Google, Facebook, and Amazon benefit from an outdated definition of “monopoly”

#134

Post by soundwave106 » Tue, Nov 13, 2018, 1:55 PM UTC

threatofrain wrote: post #108

colllectorof wrote: post #96

Earlier quoted context omitted.

Not sure what Target or Walmart have to do with what I said. 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.

He's talking about his freedom as a consumer to shop at competitors to Amazon, Google, etc. People probably don't feel the same way about AT&T. 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.

You don't have to be a total 100% monopoly market to be successfully accused of anti-competitive behavior, however.

When Microsoft was ruled to have violated antitrust laws in the early 2000s, there were alternatives available for browsers (eg Netscape) and operating systems (eg Linux and Mac OS). However, in the US court's opinion, Microsoft made it too difficult to install competing browsers on Windows. I believe that the courts also frowned at Microsoft forcing OEMs to refrain from offering competing OS products. Thus it was found guilty of antitrust behavior, and was forced to settle with the US government.

(Thus IMHO the original article seems to oversimplify things. In the Microsoft case which is well after the "Chicago school" influence was around, low consumer prices were not really the driving factor in the lawsuits. Also, the "Chicago school" may not be a single monolith opinion. One of the first articles I found on a Google search for current Chicago school antitrust feeling was a Bloomberg article about this paper -- https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3129221 -- which is about the negative effect of corporate monopsony on the labor market... so...)

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

#135

Post by RugnirViking » Tue, Nov 13, 2018, 1:56 PM UTC

ucaetano wrote: post #47

Nullabillity wrote: post #40

Earlier quoted context omitted.

But being blue isn't a defining feature of Facebook (or any other social market), so it's not useful for defining the market that it operates in.

> But being blue isn't a defining feature of Facebook 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.

If somebody can usefully use both commodities at once - (using facebook and twitter) I would say that those two companies aren't competing to the point where they can be called the same market.

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

#136

Post by ChrisLomont » Tue, Nov 13, 2018, 1:57 PM UTC

fzeroracer wrote: post #94

asdfasgasdgasdg wrote: post #91

Earlier quoted context omitted.

You did not provide any evidence that Walmart raised its prices after local competition diminished. Please do not say that you did when you did not. ISPs are often a monopoly, and often a government sanctioned one. I'd not argue against an investigation into their practices.

Walmart's tactics are extremely well-known and well-cited but if you're unable to even glance at the Wikipedia page: [1] [2] [3] [4]. 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…

None of your links support 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." Every one of them support that Walmart is selling goods cheaper than competitors who then file suit.

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.

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

#137

Post by sigzero » Tue, Nov 13, 2018, 1:59 PM UTC

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…

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

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

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

#138

Post by knlinux » Tue, Nov 13, 2018, 2:19 PM UTC

username90 wrote: post #101

My theory is that apple is intentionally targeting the profitable 10% and ignoring the rest just so they don't have to deal with monopoly laws. They still essentially have a monopoly on profit since they have the most profitable users, but nobody can say that 10% market share is a real monopoly.

Tim is first of all targeting the issue of privacy in that linked article (which has nothing to do with monopolies), and it does it because Apple handles that issue the best among the other big players by not being really interested in your personal data (selling $1000 iPhones is good enough). Using Tim's quote as a support for author's further claims seems manipulative. Also, note that more regulation hurts small business more (future Amazons and Googles). Large corporations are usually already profitable and can handle hiring "Privacy Engineers" or whatever the next big issue is going to be, a startup that struggles to be profitable, very often can't.

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

#139

Post by AndrewKemendo » Tue, Nov 13, 2018, 2:34 PM UTC

knlinux wrote: post #132

AndrewKemendo wrote: post #98

Look no further than the dozens of examples of major tech companies essentially "dumping" product to kill up and coming startups. 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…

Please change my mind on that, but I don't understand the problem with the diapers store example (or any other product for that matter). 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 pro…

I feel like you outlined the problem pretty well.

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.

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

#140

Post by ucaetano » Tue, Nov 13, 2018, 2:37 PM UTC

Vinnl wrote: post #120

ucaetano wrote: post #36

Earlier quoted context omitted.

> 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…

> Who cares? Antitrust doesn't exists to protect companies, it exists to protect consumers. Is that not exactly what that example is about? I, as a consumer, will not be able to experience their super-cola.

Again, who cares? Consumer protection isn't about letting you taste some weird cola. It is about price.

Read the Supreme Court's definition.