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Google and Facebook are monopolies. Does it matter? [audio]

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Re: Google and Facebook are monopolies. Does it matter? [audio]

#111

Post by sample2 »

lolsal wrote: post #89
ConceptJunkie wrote: post #76

Here's the question you need to answer. If they are evil, can they cause a lot of harm that will be hard to protect against or correct? If so, then it matters. Google and Facebook both want to be publishers when it suits them, and common carriers when it suits them, and both have shown, I think we can all agree, a propensity to be evil. I think it's telling that Google retired, "Don't be evil." I think Google is wors…

> to avoid using Google is difficult, if not impossible. Sincere question - why? Aren't there alternatives to all google services? I have not opted out of using Google services, so I'm genuinely curious. Everything I can think of has an easy alternative to use.

Maps is the hardest thing to move away from in my opinion. I bike everywhere, and there is no competitor even close when it comes to bike directions within cities.

Re: Google and Facebook are monopolies. Does it matter? [audio]

#112

Post by dragonwriter »

SilasX wrote: post #61
dragonwriter wrote: post #59

Earlier quoted context omitted.

> a monopoly should be judged by lock-in, not by raw market percentage Monopolies are predominantly, in anti-trust law, judged by market (pricing) power, not raw market percentage. This directly relates to whether there is effective competition in the market—which may be slightly different than your question of whether buyers can switch to an alternative; it is more whether the alternative(s) are empirically substitu…

>Monopolies are predominantly, in anti-trust law, judged by market (pricing) power, not raw market percentage. In theory sure. In practice, explain the Whole Foods/Wild Oats case, in which Trader Joe's/Albertson's/etc could start carrying the goods overnight. >This directly relates to whether there is effective competition in the market—which may be slightly different than your question of whether buyers can switch t…

> > Monopolies are predominantly, in anti-trust law, judged by market (pricing) power, not raw market percentage.

> In theory sure. In practice, explain the Whole Foods/Wild Oats case

Pricing power explains that. Pricing power occurs when price increases from one market player do not result in losing business to a competitor; the fact that other players could in principle choose to enter the market and unbermine that pricing power is not an argument against the existence of pricing power.

> Trader Joe's/Albertson's/etc could start carrying the goods overnight.

But, whatever one might argue they could do, they didn't in places Wild Oats or Whole Foods were alone in the segment, with price competition occurring where one of the two opened stores where the other already operated, and avoiding that price competition being documented as Whole Foods own analysis of and CEO’s motivation for the deal.

> My point is that there can be "effective competition" even if there are zero competitors at the moment

Which is false. There can be speculative, potential future competition, but that's not what anti-trust law cares about, for good reason.

Re: Google and Facebook are monopolies. Does it matter? [audio]

#113

Post by samnwa »

umvi wrote: post #3

If they are, they are not a traditional monopolies. Traditional monopolies "control supply of a good or service, and where the entry of new producers is prevented or highly restricted." In this case, the supply of a good or service (social networking, webpage indexing and searching) are not controlled by Facebook and Google because they aren't finite resources. Anyone can index the web and anyone can build a social n…

They do have a monopoly because they hold a patent on the search algorithm. While 'anyone' can come up with a new search algorithm, are you really going to best the authority measure used in academia for a hundred years?

Re: Google and Facebook are monopolies. Does it matter? [audio]

#114

Post by benj111 »

dllthomas wrote: post #107
mcrad wrote: post #104

Earlier quoted context omitted.

You mean, fb/google have monopolistic power over the advertisers and since advertisers are generally not our friends, then go for it, let them pay up?

I think what's being got at is "the power over the users is also concerning, and not something we can get at directly with these laws."

Yes that's what I meant.

Re: Google and Facebook are monopolies. Does it matter? [audio]

#115

Post by benj111 »

dragonwriter wrote: post #108
benj111 wrote: post #90

Earlier quoted context omitted.

I think the interesting thing is that the users aren't the customers in these examples. Anti trust law would be concerned with the advertisers and fb/google. Not the users. I suppose you could make the argument that fb/google are monopolies because the advertisers have to go through them to reach us. It isn't clear to me though that this is the problem we actually want to solve. This leads me to believe that anti mon…

> I think the interesting thing is that the users aren't the customers in these examples. There is an exchange for value between Google (FB, etc.) and consumers; the fact that it's an in-kind exchange rather than money doesn't prevent anti-trust analysis from being applied. There's also the possibility of monopoly in some advertising segment, sure.

You /may/ be right, I don't think that current laws were written with that in mind, but the laws could be munged to encompass the relationship.

I suppose then the anti trust argument would be that they are able to 'ask' for too much private data. It seems to me a first step would be gaining price transparency. Who is the cheapest (asks for the less data).

Actually if your theory holds water, isn't there scope to argue that the consideration (your data) isn't properly defined in the contract, and keeps changing (via defaults, and technological progress). Could then this not then be dealt with via contract law and consumer protections?

Re: Google and Facebook are monopolies. Does it matter? [audio]

#116

Post by dllthomas »

stcredzero wrote: post #106
SilasX wrote: post #105

Earlier quoted context omitted.

But that's my point: it's the network effect (or related lock-in) that determines the monopoly, not the raw marketshare. In fact, you can have "competition" while having all the substance of the monopoly. For example, if there are eight competitors with equal marketshare, but it's impossible for anyone new to enter the market, those eight can easily conspire to charge monopoly profits, despite each one's "small" mark…

If you have a situation where large swathes of the general public desperately want alternatives, but despair of ever seeing a viable one, then something there stinks like a monopoly.

Likely, although "everyone is dissatisfied, but not enough to leave" can also be a result of compromise. If there's value to be had by everyone using the same thing, while everyone wants that one thing to be a little different than what others want, a lot of people will "want alternatives" that they can't really have regardless of how the provider behaves.

Re: Google and Facebook are monopolies. Does it matter? [audio]

#117

Post by SilasX »

stcredzero wrote: post #106
SilasX wrote: post #105

Earlier quoted context omitted.

But that's my point: it's the network effect (or related lock-in) that determines the monopoly, not the raw marketshare. In fact, you can have "competition" while having all the substance of the monopoly. For example, if there are eight competitors with equal marketshare, but it's impossible for anyone new to enter the market, those eight can easily conspire to charge monopoly profits, despite each one's "small" mark…

If you have a situation where large swathes of the general public desperately want alternatives, but despair of ever seeing a viable one, then something there stinks like a monopoly.

People cant want a lot of things that aren't economically feasible.

Toy example: if everyone demands at least $30/pound for some risky kind of coal mining, because it's such a pain to do and they'd rather a) rest or b) do easier work at any lower price ... that doesn't mean coal miners are colluding or that coal mining is a monopoly.

In that case, if you want a $29/pound alternative, your desire is economically unrealistic.

If there's a single coal miner that does it for $29/pound -- and is thus the most efficient one -- that miner will dominate the (tiny, niche) market. But it would not rightly be called a "monopoly", but "a single provider who is legitimately better and would lose business if he started to falter".

Telling me that someone currently dominates a market does not prove monopoly power.

Re: Google and Facebook are monopolies. Does it matter? [audio]

#118

Post by SilasX »

dragonwriter wrote: post #112
SilasX wrote: post #61

Earlier quoted context omitted.

>Monopolies are predominantly, in anti-trust law, judged by market (pricing) power, not raw market percentage. In theory sure. In practice, explain the Whole Foods/Wild Oats case, in which Trader Joe's/Albertson's/etc could start carrying the goods overnight. >This directly relates to whether there is effective competition in the market—which may be slightly different than your question of whether buyers can switch t…

> > Monopolies are predominantly, in anti-trust law, judged by market (pricing) power, not raw market percentage. > In theory sure. In practice, explain the Whole Foods/Wild Oats case Pricing power explains that. Pricing power occurs when price increases from one market player do not result in losing business to a competitor; the fact that other players could in principle choose to enter the market and unbermine that…

>Pricing power explains that. Pricing power occurs when price increases from one market player do not result in losing business to a competitor; the fact that other players could in principle choose to enter the market and unbermine that pricing power is not an argument against the existence of pricing power.

The counterfactual possibility, of entrants eating excess profits, is exactly what keeps businesses from charging those excess profits! The fact that no one currently judges them to be excess profits means the existing players are not really earning monopoly profits, properly considered.

See the coal mining example from the other thread: https://news.ycombinator.com/item?id=18469312

Re: Google and Facebook are monopolies. Does it matter? [audio]

#119

Post by dragonwriter »

SilasX wrote: post #118
dragonwriter wrote: post #112

Earlier quoted context omitted.

> > Monopolies are predominantly, in anti-trust law, judged by market (pricing) power, not raw market percentage. > In theory sure. In practice, explain the Whole Foods/Wild Oats case Pricing power explains that. Pricing power occurs when price increases from one market player do not result in losing business to a competitor; the fact that other players could in principle choose to enter the market and unbermine that…

>Pricing power explains that. Pricing power occurs when price increases from one market player do not result in losing business to a competitor; the fact that other players could in principle choose to enter the market and unbermine that pricing power is not an argument against the existence of pricing power. The counterfactual possibility, of entrants eating excess profits, is exactly what keeps businesses from char…

> The counterfactual possibility, of entrants eating excess profits, is exactly what keeps businesses from charging those excess profits!

Too the extent that's true, yes, there is no pricing power; it was not true in the case you cited, where the dynamics of price competition in local markets showed that, in fact, the speculative possibility you claim existed did not prevent Wild Oats or Whole Foods from charging monopoly rents in places where the other was not present, even though one might argue that other grocers could have chosen to sell similar products with little barrier to entry, but the entry, e.g., of WF into a Wild Oats market did result in price competition. Which internal emails showed was specifically known to Whole Foods and cited by their CEO as a reason for the buyout.

Pricing power explains perfectly the example you asked about.

Re: Google and Facebook are monopolies. Does it matter? [audio]

#120

Post by stcredzero »

SilasX wrote: post #117
stcredzero wrote: post #106

Earlier quoted context omitted.

If you have a situation where large swathes of the general public desperately want alternatives, but despair of ever seeing a viable one, then something there stinks like a monopoly.

People cant want a lot of things that aren't economically feasible. Toy example: if everyone demands at least $30/pound for some risky kind of coal mining, because it's such a pain to do and they'd rather a) rest or b) do easier work at any lower price ... that doesn't mean coal miners are colluding or that coal mining is a monopoly. In that case, if you want a $29/pound alternative, your desire is economically unrea…

The situation is far more like not being able to choose another broadband provider, with network effects taking the place of local cable regulations.

I can picture a scenario where some sites have an insurmountable advantage because of compromised network neutrality. I'm very sure that in that case, the winners would be crowing about how, "the market has spoken," when the reality is that the market is broken.

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