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

>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 to an alternative; it is more whether the alternative(s) are empirically substitutes rather than parallel non-substituting markets, whether or not buyers are able to switch.

My point is that there can be "effective competition" even if there are zero competitors at the moment; what matters is whether someone could come online and compete away the excessive profits, so you can't just look at the current competitors.

That's the point of toy example: there is zero alternative to me for SilasX-labor. You should not thereby conclude that there is "ineffective competition".

There are two problems. Enforcing good old-fashioned antitrust system has effectively stopped and there is no new solutions to new problems.

I am not sure what you are referring to by a "traditional" monopoly. Your definition, "control supply of a good or service, and where the entry of new producers is prevented or highly restricted," sounds like the definition of any monopoly which seemingly covers Facebook and Google.

Monopolies are extreme examples of lack of competition in a market. One way non-competitive market equilibriums occur are when barriers to entry for potential competitors rises.

For Facebook and Google, the market externality that contributes to their monopoly-like market power is known as the Network effect (https://en.wikipedia.org/wiki/Network_effect). This effect was first observed with the rise of the Bell System which ultimately required anti-monopoly intervention (https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System).

For Facebook, the network externality is a bit more straightforward since it is a first order effect in that new users looking to adopt or join a social network choose to join the one which has the most other users they are interested in (typically friends, but could also be public figures). This tendency becomes a self-reinforcing trend as more and more users join the single largest network. This dominance in users attracts advertisers which are the primary source of revenue for Companies whose primary product is a social network.

For Google, it's also an information play. The more users they can have an interaction with the more data they can scrape to feed their advertising engines. Once again, advertisers are incentivised to pay the best/biggest data troves which gives Google the ability to invest even more in providing and improving services to attract users. Which again, becomes a self-reinforcing cycle.

I wouldn't say that user loyalty/user's reticence for change is not a contributing factor, I think it is; I just don't think it would be correct to say Google and Facebook aren't the beneficiaries of monopoly-like market equilibriums. It's a stretch to call them true monopolies (actual singular market suppliers), but their market control and power are rapidly approaching, if not already equal to or greater than, that of historical examples of monopolies and targets of anti-trust legislation.

> Then Microsoft was the unbreakable monopolist that would rule the computer industry forever

If Microsoft controller browsers, would Facebook and Google and Amazon and Netflix have had the neutral ground on which to grow and thrive?

At this point, Google in many cases offers the best service: DuckDuckGo is good, but Google is better. It is so good that it indexes the CIA's stuff: https://thehill.com/opinion/technology/416215-cia-operations...

This is without even considering google dorks, possibly one of the most powerful tools infosec researchers (or even average people) have to refine queries.

In the case of Facebook, it offers the best product because its product is really people (the whole "you-are-the-product" issue). Facebook has the most people, therefore the best product.

Offering the best product is not a monopoly. Don't forget that MySpace was "the" social network before Facebook, but was displaced. These are not necessary traditional monopolies, and therefore should receive consideration on how they should be treated.