Trust-Busting as the Unsexy Answer to Google and Facebook • Hacker News Board

Re: Trust-Busting as the Unsexy Answer to Google and Facebook

#121

Post by AnthonyMouse » Fri, Oct 15, 2021, 5:13 PM UTC

camjohnson26 wrote: post #9

Trust busting can seem like it’s anti free market, but when a company has a monopoly on a network it stops functioning as a company and basically becomes a government. The problem with Facebook/Amazon/Google is that they have a monopoly on a specific information network, for Facebook the social graph, internet discoverability for Google, and online shopping for Amazon. It’s similar to if a single company owned the ro…

> The problem with Facebook/Amazon/Google is that they have a monopoly on a specific information network, for Facebook the social graph, internet discoverability for Google, and online shopping for Amazon.

None of these things are a natural monopoly.

Facebook only stays relevant by buying its competitors. You don't even need to break them up, just disable acquisitions. Then Instagram would be separate, WhatsApp would be separate. You don't even have to break them apart, just wait for the next one and don't let them buy it.

Google is the biggest search engine but search isn't a natural monopoly. Their dominant position comes from all the vertical integration. Google owns YouTube and YouTube is featured prominently in Google Search results. To get Android/Google Play, OEMs have to use Google as their default search engine. To fix this you don't have to regulate the search results, just separate the search engine from the other companies, and stop allowing them to buy competing ad networks.

Amazon doesn't really even have a dominant market position. They're not a railroad, they're Internet Walmart. They're just the biggest player in a highly competitive market. They have no capacity to significantly raise prices or people would immediately switch to any of their hundreds of competitors. Most of the complaints are from competitors butthurt that Amazon is keeping everyone's margins slim -- but that's what they're supposed to be doing.

A railroad is a natural monopoly. You can't really break up a natural monopoly, so you have to regulate it, which is terrible.

None of this tech stuff is like that. The problems here come from consolidation through mergers and vertical integration. They're unnatural monopolies with clear lines across which they can be broken up without long-term regulation. Just stop letting them buy their competitors.

Re: Trust-Busting as the Unsexy Answer to Google and Facebook

#122

Post by oconnor663 » Fri, Oct 15, 2021, 5:14 PM UTC

HWR_14 wrote: post #107

sanderjd wrote: post #46

Earlier quoted context omitted.

I know this is the inevitable and cliche pushback, but it never seems to be grappled with so it remains worth pointing out: none of the three things you mentioned are anywhere close to monopolies. There are lots of social networks (Twitter and TikTok are extremely successful, among others), lots of ways to search the internet, and lots of ways to shop online. The analogy with the railroads simply is not apt, their mo…

The question posed by the monopolies is not "are these the only options". But do these wield too much market power to be controlled by the market. That is, sure, Bing and DDG make up 5% of the global search, but is that enough. Yes, people use Twitter and TikTok, but does that replace the social graph of FB? Yes, I can buy directly online from many places, but if people are going to Amazon instead of Google to search…

I don't know what the formal definitions of any of these things are, but I assume (hope?) that it's important not to equate being successful with being a monopoly by definition. If Ford came out with an amazing new car tomorrow, and suddenly 95% of new cars purchased were Fords, we probably shouldn't initiate trust-busting action against Ford on that basis alone. We want car companies to try to capture market share by making better cars.

I don't know exactly how we contend with this definitional problem, but intuitively I think it should have something to do with prices and behavior. For example, if we were a fly on the wall in a Google exec meeting, we might be curious about whether they're jacking up the price of ads because they know no one can compete with them, or whether they're sensitive to charging more than their smaller competitors do. If they're behaving like their competitors are a serious threat, then intuitively they're probably not a monopoly, and it probably doesn't make sense to trust-bust them.

But anyway I'm not a lawyer, and I don't know what the current thinking is about any of this stuff.

Re: Trust-Busting as the Unsexy Answer to Google and Facebook

#123

Post by thr0wawayf00 » Fri, Oct 15, 2021, 5:18 PM UTC

smooth_remmy wrote: post #53

Instead of trust busting these companies, the libertarian answer to them would be to invalidate their patents. Google partially remains a search monopoly because of its search patents - of which it has many. If the state invalidates its patents and then moves out of the way, other competitors will naturally become successful. There is no need to break up companies. Just take away some of their state-imposed advantage…

> Google partially remains a search monopoly because of its search patents

According to this piece on Google's patent strategy, big tech benefits when the value of patents decreases anyway, which cuts against your argument[0].

Google gets pretty much everything it wants anyway, the gist of this piece is that individual patent holders that sue tech companies get a lot more value out of patents than the big companies do. Big companies benefit as the value of patents decrease, which is what you're calling for here.

One huge reason for this is the network effect advantages that big tech companies have. Anyone can build a Facebook clone that copies most of the primary functionality, but it'll never gain traction because why would anyone leave the already-established social media network? All of their friends are already on there.

In Google's case, numerous search engine alternatives have existed for years and yet Google remains pretty strong. I cannot find a case of Google asserting patent authority over a competing search engine, which tells me that it's doing just fine maintaining it's hold over the search market "naturally".

Consumer technology use is notoriously habitual and cannot achieve market equilibrium when patents are removed. Sorry, but this is an oversimplified argument that doesn't reflect how Google's technology functions in the search market.

0: https://www.ipwatchdog.com/2018/03/21/how-google-and-big-tec...

Re: Trust-Busting as the Unsexy Answer to Google and Facebook

#124

Post by ncallaway » Fri, Oct 15, 2021, 5:20 PM UTC

smooth_remmy wrote: post #53

Instead of trust busting these companies, the libertarian answer to them would be to invalidate their patents. Google partially remains a search monopoly because of its search patents - of which it has many. If the state invalidates its patents and then moves out of the way, other competitors will naturally become successful. There is no need to break up companies. Just take away some of their state-imposed advantage…

Wouldn't invalidating the patents of companies that are too powerful and abusive in the market just be another "trust busting" tactic?

I don't see how that is separate from "trust busting", but rather just another way to bust trusts?

Re: Trust-Busting as the Unsexy Answer to Google and Facebook

#125

Post by Apes » Fri, Oct 15, 2021, 5:20 PM UTC

AnthonyMouse wrote: post #121

camjohnson26 wrote: post #9

Trust busting can seem like it’s anti free market, but when a company has a monopoly on a network it stops functioning as a company and basically becomes a government. The problem with Facebook/Amazon/Google is that they have a monopoly on a specific information network, for Facebook the social graph, internet discoverability for Google, and online shopping for Amazon. It’s similar to if a single company owned the ro…

> The problem with Facebook/Amazon/Google is that they have a monopoly on a specific information network, for Facebook the social graph, internet discoverability for Google, and online shopping for Amazon. None of these things are a natural monopoly. Facebook only stays relevant by buying its competitors. You don't even need to break them up, just disable acquisitions. Then Instagram would be separate, WhatsApp would…

Amazon does leverage their position as market maker to undercut competition with anti-competitive practices though. They run data analytics to figure out what goods are the most profitable, then launch competing products and promote their own over the originals in their listings. Their monopoly gives them the ability to take over nearly any market they want at any time, with no consequences.

Re: Trust-Busting as the Unsexy Answer to Google and Facebook

#126

Post by novok » Fri, Oct 15, 2021, 5:25 PM UTC

Being anti-facebook & anti-google is popular in media circles because they are direct competitors in the advertising space that are eating their lunch. The fact the author does not include amazon, apple or microsoft is telling on it's own. "Cui bono" is something you should always apply to whatever you read.

Re: Trust-Busting as the Unsexy Answer to Google and Facebook

#127

Post by annadane » Fri, Oct 15, 2021, 5:27 PM UTC

jimmaswell wrote: post #62

camjohnson26 wrote: post #9

Trust busting can seem like it’s anti free market, but when a company has a monopoly on a network it stops functioning as a company and basically becomes a government. The problem with Facebook/Amazon/Google is that they have a monopoly on a specific information network, for Facebook the social graph, internet discoverability for Google, and online shopping for Amazon. It’s similar to if a single company owned the ro…

A social network is a natural monopoly due to the network effect. It wouldn't make any sense to split it up. Regulating it like any other natural monopoly could make sense. Amazon is certainly not an online shopping monopoly. It's just a superior service. I can get a similar online shopping experience from Wal Mart and many others. If Amazon can offer us such good service through having its own big network of warehou…

> A social network is a natural monopoly due to the network effect. It wouldn't make any sense to split it up. Regulating it like any other natural monopoly could make sense.

They definitely need to take Whatsapp away from Facebook, though. Regulators only allowed it under specific conditions and Facebook violated those conditions

Re: Trust-Busting as the Unsexy Answer to Google and Facebook

#128

Post by PoignardAzur » Fri, Oct 15, 2021, 5:28 PM UTC

SkeuomorphicBee wrote: post #91

sanderjd wrote: post #46

Earlier quoted context omitted.

I know this is the inevitable and cliche pushback, but it never seems to be grappled with so it remains worth pointing out: none of the three things you mentioned are anywhere close to monopolies. There are lots of social networks (Twitter and TikTok are extremely successful, among others), lots of ways to search the internet, and lots of ways to shop online. The analogy with the railroads simply is not apt, their mo…

> The analogy with the railroads simply is not apt, their monopoly was so powerful because there was often no other way to get from point A to point B, so they had complete leverage. I still believe the analogy holds, just substitute geographical points A and B with person A and person B (or business A to potential client B), and the similarities are obviously clear. There is often no other way to get from person A t…

> There is often no other way to get from person A to person B than to use Facebook, or from person C to D without Twitter, ... . Yes, there are various social networks, but there was also various railway barons

Is that really accurate, though?

How many people use a single social network? And regarding market power, very few companies do their online marketing on a single social network; they usually have a general strategy that they deploy on Facebook, Instagram, Twitter, etc.

Re: Trust-Busting as the Unsexy Answer to Google and Facebook

#129

Post by macmccann » Fri, Oct 15, 2021, 5:30 PM UTC

disgruntledphd2 wrote: post #66

maxwell wrote: post #35

Earlier quoted context omitted.

Snapchat launched their Android app in 2012. Maybe stories landed in iOS before Android?

I sortof exaggerated, they did have an Android app but basically invested nothing in it. I remember that just before FB cloned them (in literally every place they could) they were talking about how iOS was all that mattered, as those users are richer. They didn't seem to get that you either need to show user growth or revenue growth, and failed at both.

Yeah it was pretty well documented that Snap's behavior on Android (literally taking a screenshot of the viewfinder) was way worse than on iOS, and features like e.g. video would always come out on iOS before Android

Re: Trust-Busting as the Unsexy Answer to Google and Facebook

#130

Post by sanderjd » Fri, Oct 15, 2021, 5:33 PM UTC

ncallaway wrote: post #118

sanderjd wrote: post #46

Earlier quoted context omitted.

I know this is the inevitable and cliche pushback, but it never seems to be grappled with so it remains worth pointing out: none of the three things you mentioned are anywhere close to monopolies. There are lots of social networks (Twitter and TikTok are extremely successful, among others), lots of ways to search the internet, and lots of ways to shop online. The analogy with the railroads simply is not apt, their mo…

> none of the three things you mentioned are anywhere close to monopolies. I think it depends on what you consider "the market" to be. If I want to compare Amazon to the "Global Retail Market" (Amazon's preferred framing), then maybe they aren't in a monopolistic position. But I—as ab individual—don't participate in the Global Retail Market. I participate in the "online US retail" and "Pacific Northwest retail" marke…

> I think it depends on what you consider "the market" to be.

It honestly doesn't. None of these are monopolies by any market definition.

Amazon has so many competitors: brick and mortar stores like Walmart and Target and Best Buy remain successful, online competitors again like Walmart and Target and Best Buy but also Ebay and in a different way Shopify and others, are also successful.

Your argument is slightly stronger in the case of Facebook, but still very weak. Facebook's social networks have strong direct competition in Twitter and TikTok. Facebook's communication platforms have strong competitors in iMessage, SMS apps, Signal, Telegram, Discord, etc.

I'm not 'accept[ing] the broadest possible interpretation of "the market"', I'm just not accepting hand-wavy non-definitions of "market" that only include a single company so that it can be called a monopoly by definition.

Again, I think there are major problems and I favor new regulations for all of those problems. But what I don't think makes sense at all is redefining "monopoly" in a way that makes no sense, just because anti-trust law is our only extant tool for solving the problems caused by enormous tech firms.