[ucaetano]

It isn't outdated, it is an economics definition of a monopoly, and isn't even that: a monopoly is perfectly fine, AS LONG AS the economic power isn't abused to prevent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

Otherwise, any government in power will simply abuse their own monopoly on regulation to favor and transfer wealth from society to friends.

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.

If it had 100% of the cola market, would it have a monopoly? No.

Because the cola market doesn't exist in isolation. Colas compete with all other sodas, with water, juices, etc. for a share of wallet and a share of stomach.

[colllectorof]

>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?

[bilbo0s]

>Google, Facebook, and Amazon control not only what you can do as a consumer...

???

I'm not sure this is true?

I don't feel like they are controlling me when I go to Target or Walmart??? But I'm not sure if there is something maybe with the advertising that is making me go to Target and Walmart? Either way, it's totally up to me as a consumer where I spend my money I would think.

[beagle3]

More and more websites I need (including government and pseudo government websites, e.g. parking ticket payment that was outsourced) use Recaptcha. As a result, my government forces me to provide Google with free labour for basic functions, and additionally, it is possible for Google -- if they don't like me -- to declare me a robot and stop me from using those websites.

And .. what do you know? Google really doesn't like my tight uBlock Origin / Chameleon / Firefox Container / uMatrix / Privacy Badger setup, and every time I need to prove I'm not a robot (by providing free labour) I get longer and longer sequences.

Similarly, Facebook (through their WhatsApp acquisition) now decides who I get to talk to, because they have a monopoly on messaging where I live.

[Vinnl]

I think I'm on the "clear definition of monopoly" side, but in this specific example: if Amazon is able to make specific companies go bankrupt, that product will no longer be available to you any more even if you go to Target or Walmart.

[colllectorof]

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.

[threatofrain]

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.

[soundwave106]

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...)

[bilbo0s]

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

But you do have to have done something that is anti-competitive in some market. (Not only that, but you have to have a competitive advantage in the market in which you take the anti-competitive action.)

[leereeves]

There are alternatives to AT&T or Comcast; you could dismiss concerns by saying consumers prefer their service over wireless or satellite Internet.

[paulryanrogers]

The price and quality of service are very different with satellite or wireless. Compared to cable the alternatives are slower, higher latency, less reliable, and more expensive.

[knlinux]

> 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?

Probably very easy, but consistently using this strategy would ruin my own business, in effect helping my competition. Now imagine you're Facebook, how easy it was to rule the social media world, and because of series of equally stupid hard-balls you've mentioned, you're 5 years away from being MySpace.

[Nullabillity]

> 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, with water, juices, etc. for a share of wallet and a share of stomach.

And AT&T wasn't a monopoly, since you could just walk to the person you want to talk to. Oh, wait..

[AnthonyMouse]

> 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 not necessarily a monopoly even at 100% when there are competitors who could immediately enter the market if the incumbent were to be so audacious as to raise prices by 4%, or do anything else the customer even mildly dislikes -- because that fact keeps them from ever doing it.

Notice that this is not how it works for Comcast, because it's not cheap or quick to wire a city with fiber, so they can get away with a great deal of abuse before anyone else would show up to compete -- even if they only had 50% market share, as long as the other 50% is another company doing all the same abusive stuff.

> And AT&T wasn't a monopoly, since you could just walk to the person you want to talk to. Oh, wait..

To be a substitute it has to be a practical alternative that can be used for the same purpose at approximately the same cost. Having to spend an hour walking is not the same cost as picking up the phone.

[timoth3y]

> 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.

[AnthonyMouse]

> Looking at actual competitive commodity markets for things like lumber, oil, copper, etc, we see a lot of players in the market.

Those are all things that come from the earth (so inherently have diffuse supply), sell into the global market (so the market is large and diverse, leaving space for upstarts to find a niche) and are of strategic interest to national governments many of which then act to ensure that an independent local industry exists.

Examples of markets where this actually happens: Coca Cola (as discussed), Walmart (in local areas), YKK in zippers, AB inBev in Brazil, Luxottica in eyewear.

It's also common for this to happen with open source software, e.g. Linux on embedded devices, OpenSSH as an ssh client/server, for many years gcc as a compiler for Unix-like systems (until Apple poured money into clang to make it competitive after FSF moved gcc to GPLv3), Android on phones, etc.

[timoth3y]

> Examples of markets where this actually happens: Coca Cola (as discussed), Walmart (in local areas), YKK in zippers, AB inBev in Brazil, Luxottica in eyewear.

None of these is the result of the "slight price advantage" and increased efficiencies you claimed. Luxottica is expensive and uses their vertically integrated monopoly power to keep competitors like Oakley out. Warby Parker gained success so quickly largely because of this dysfunctional system. Coke, where it controls the market it does so by controlling distribution, menus, and retail space, not by offering cheaper products.

> It's also common for this to happen with open source software, e.g. Linux on embedded devices, OpenSSH as an ssh client/server,

These are not monopiles. They are more akin to standards. It's like saying the kilogram has a monopoly. It's kind of true if you play with the meaning of the word a bit, but in terms of markets, there is no monopoly power.

[AnthonyMouse]

> Luxottica is expensive and uses their vertically integrated monopoly power to keep competitors like Oakley out.

The eyewear market is weird because opticians use free eye exams as a loss leader to sell expensive frames, and if you have insurance then the insurance is paying and customers aren't sensitive to price, so the market selects for expensive high margin frames even though they're an inexpensive commodity with low barriers to entry. (This is a primary reason why healthcare is so expensive in general.)

The scale advantage then isn't low "price" (because the market selects for a specific high price, namely the limit on what insurance will pay), rather the advantage is lower cost which leaves the seller with more to spend on marketing etc.

And this leaves a niche for the likes of Warby Parker to capture the segment of the market which is paying out of pocket and is actually sensitive to price.

> Coke, where it controls the market it does so by controlling distribution, menus, and retail space, not by offering cheaper products.

But it still sells at competitive prices. Having retail space gives them volume, not pricing power.

> These are not monopiles. They are more akin to standards. It's like saying the kilogram has a monopoly. It's kind of true if you play with the meaning of the word a bit, but in terms of markets, there is no monopoly power.

That's the point. They have overwhelming market share but minimal market power. If suddenly Linux cost a lot of money, people would switch to BSD.

[slededit]

Strange you ignored the greatest monopoly of all time, Rockefeller's Standard Oil. Despite getting split up in 1911, its successor Exxon is the largest non-government owned oil company in the world.

[barry-cotter]

Wouldn’t have been broken up under modern American antitrust law. Prices declined consistently and quality rose as they crushed their competitors through superior expertise, quality control, research and development and economies of scale.

[sigzero]

> 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.

[nitwit005]

> Effectively, yes. Why is the market so disfunctional that a single company has effectively swallowed all competition?

If people just like their product more, what's the problem? There's no point in punishing them for being cheaper or more liked than the competition.

[tannhaeuser]

Anti-trust regulation isn't about punishment. It's about maintaining fair market access in the best interest of a civil society, and having an economical system with currencies, civil law, courts, etc. work for most people rather than just very few. In fact, if a democracy doesn't push against monopolies, it would just become a farce.

[markdown]

There may or may not be a problem, but it's still a monopoly.

One way it could be a problem is that it makes it extremely difficult for new entrants to appear. 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?

[ucaetano]

> 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 long as Coke's actions are not stopping competition in that larger market with the result of harming consumers, why should anyone care?

[Vinnl]

> 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.

[ucaetano]

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

Read the Supreme Court's definition.

[smt88]

> As long as Coke's actions are not stopping competition in that larger market with the result of harming consumers, why should anyone care?

This makes sense as a theory, but in practice, monopolies never exist without abuse/harm. It's likely the only way to sell a single brand to wildly varying customers with different tastes.

[ucaetano]

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.

[matthewmacleod]

That’s not a particularly convincing argument - it’s like saying that Sony has a monopoly in the PlayStation market - possibly true, but not that useful!

[ucaetano]

Exactly: you can absolutely always define a market here a company has a close-to-100% market share.

That's why, to actually talk about a monopoly, you need to very precisely define the market.

Take Facebook: Facebook has a monopoly in online, blue-themed social networks owned by Harvard dropouts.

It doesn't have a monopoly on social networks, on communication, on online networks, on online ads, on online ads in social networks, on blue-themed online social networks, and even on blue-themed online social networks with a timeline feature.

[Nullabillity]

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.

[ucaetano]

> 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.

[RugnirViking]

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.

[Alex3917]

> That’s not a particularly convincing argument - it’s like saying that Sony has a monopoly in the PlayStation market - possibly true, but not that useful!

Except for that anyone can spend 30 seconds looking up how Coca Cola abuses their monopoly position to prevent competition; Richard Branson is perpetual the case study.

[ucaetano]

> Effectively, yes.

No. You can always create a market where a company has a "monopoly" (in the market share sense of the word).

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

Where did you get that from? This is a sign that you don't understand the market you're talking about.

> And AT&T wasn't a monopoly, since you could just walk to the person you want to talk to. Oh, wait..

That doesn't make any sense, you're not even wrong.

It isn't just because you can create a mental analogy about a subject you don't understand, that the analogy is actually valid.

[sonnyblarney]

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

In most places there just isn't any competition really. It's a brand war.

Coke taught the locals to love Coke. And so they do.

It's more of a mind share / branding monopoly - although there are some issues with distribution as well.

[smt88]

It's not a brand war in a lot of places. Coke is notorious for getting favorable deals (e.g. water rights) from local governments that give them effective monopolies.

[ucaetano]

Every beverage company does the same (see Nestle).

[tylerhou]

You can easily substitute juice/off-brand colas for coke. You can also easily substitute FaceTime/Skype/Hangouts for phone calls (provided you’re not using mobile data)...

[scythe]

>Effectively, yes. Why is the market so disfunctional that a single company has effectively swallowed all competition?

Part of the reason might be that Coca-Cola depends on decocainized coca leaf for its characteristic flavor, but regulations make it (effectively) impossible for upstarts to access this particular herb. Coca-Cola was grandfathered in from a time when coca leaves were legal.

[imgabe]

But you couldn't walk to any person to talk. Not in any way remotely similar to how you can drink water instead of Coke.

[bepotts]

Exactly.

I don't want to get all political, but the people pushing for this definition change are (usually) economic leftists that are naturally worried about the size and power of corporations. It's their default state. There's nothing wrong with that, but be upfront with your motives and don't mask empirical concern with political ideology.

These people would have broken up Walmart in the 90s and Sears in the 70s if they could, and look where both of those companies are now.

[dools]

What is an "economic leftist"?

[TulliusCicero]

Someone who is left-wing economically? Are you just asking what values qualify as economically left-wing?

[dools]

Sure, what values qualify as economically left-wing?

[inherentFloyd]

Power corrupts, man. Simply hiding behind a monopoly doesn't really absolve a company of wrongdoing simply because a monopoly isn't wrong. Also, in your example, Coke definitely has a monopoly on the cola market, even if it doesn't on the entire soda market. That's like saying a smaller cola company stands a chance on the global market because the smaller competitor is selling soda.

[ucaetano]

> Also, in your example, Coke definitely has a monopoly on the cola market, even if it doesn't on the entire soda market.

No, it doesn't. At least not by the economic definition of monopoly, which, when talking about regulation, is the one that matters.

And even then, it is irrelevant, because the cola market doesn't exist in isolation.

[nabla9]

In articles like this monopoly is used as shorthand for monopoly power.

For a company to have a 'monopoly power' it does not have full monopoly. Antitrust laws start to apply to corporations long before they have full monopoly.

[ucaetano]

> monopoly is used as shorthand for monopoly power

No, it is used as shorthand for "market share in a market I define arbitrarily".

Proving monopoly power is a much more complex and academic process.

[nabla9]

Antitrust law is based on it.

You can read here how it is defined and identified in practice.

https://www.justice.gov/atr/competition-and-monopoly-single-...

[ucaetano]

Yep, and from the link:

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."

Those are the tests you need to pass to take action. And measuring that is a highly academic exercise.

Just go talk to the economics professors and consultants that act as experts in those cases.

[nicoburns]

> 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.

No, they're saying a company can have too much economic power without being a full monopoly.

[bilbo0s]

>No, they're saying a company can have too much economic power without being a full monopoly...

But that's not a problem.

Monopolies are problems, not strong economically powerful companies. I mean, up in my neck of the woods, ADM and Cargill are unimaginably powerful economically speaking. But it just makes no sense to say that they are as dangerous as having one company that IS the entire food market.

[AndrewKemendo]

Yes, strong economically powerful companies are a problem.

Or rather, lets say it like this: This history of strong economically powerful companies points to them being problematic for democratic societies.

Why? Because the stickier the product, the more "powerful" the company, and the more likely they are to do things like regulatory capture and exert significant control of democratic levers.

Make no mistake that corporations are political entities and are not-neutral in that respect. So the bigger the company, the more they can exert influence well beyond their ability to provide goods/services.

[joelx]

China and Russia have major disinformation campaigns running in the United States and around the world. These campaigns have been heavily documented by news organizations and American defense agencies. A major branch of Russia and China's attack is the ongoing negative PR campaign against tech companies like Facebook, Google, and Amazon. Can these companies improve? Sure. But their infractions are incredibly minor compared to the dictatorships rising in Russia, China, Turkey, etc that are murdering foreign citizens as well as large numbers of their own. They are stealing billions of dollars from their own citizens and taking the world down a terrifying path.

Please reconsider the easy targets of tech companies and have the courage to face true evil in these dictatorships

[throwawayinside]

This is the most insane conspiracy nonsense I’ve read on HN.

Facebook had lobbyists targeting every member of Congress. Apple works tirelessly to put their profits in tax shelters. Amazon has well-documented stories of pushing its warehouse workers past their limits. Google’s chairman spent years openly laughing at the idea of “privacy.” You think these companies need help from foreign actors to look bad?

If this line of thinking is common in SV, the echo chamber effect is worse than I suspected.

[titzer]

> This is the most insane conspiracy nonsense

I think this is an ungenerous reading of the parent. The fact there are disinformation campaigns running all the time is known beyond a shadow of a doubt. Are Russia and China _solely_ behind the bad press that tech is getting? Decidedly not. But do they also benefit, as in, Chinese and Russian tech companies benefit if American and European ones are damaged? Yes. IMO they are busy frying bigger fish, but I have little doubt that given the chance to tip the scale of public opinion this way or that, they'd prefer tech companies catch some flack.

[nimish]

Markets only work if they are competitive. Governments do not need to obey market rules, and shouldn't if it helps society.

It's odd that you would be fine with a corporate monopoly exerting dominant power over its market (to extract more profit) but are distrustful of government exerting power to limit that from happening.

Monopoly definition is political -- the idea that governments cannot and should not step in to police markets is a novel idea.

[ucaetano]

> 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.

[djrobstep]

This might blow your mind but: Economics is political.

[asdfasgasdgasdg]

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.

[legostormtroopr]

> Because the cola market doesn't exist in isolation. Colas compete with all other sodas, with water, juices, etc. for a share of wallet and a share of stomach.

You don't understand how much Coke owns or creates do you? They own brands that do bottled water, tea, coffee, juice, milk, sports drinks, energy drinks, alcohol and more [1][2]. Hell, if its a beverage, Coke probably owns a brand that makes it. [3]

[1] https://www.coca-colajourney.com.au/brands/ [2] https://www.coca-colacompany.com/packages/brands [3] https://en.wikipedia.org/wiki/List_of_Coca-Cola_brands

[ucaetano]

> You don't understand how much Coke owns or creates do you?

Oh please...

[chrisco255]

The government can rule it however they want. They can use existing trust-busting precedent to pick apart the large firms if they want to, just like Standard Oil, AT&T, etc. It would take an act of Congress or the FTC. It would take a lot, but it could be done. Microsoft fit your definition with 90+% of desktop OS market share in the 90s and they had to settle with the government (https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor...). That the government has been asleep at the wheel as Apple, Amazon, Facebook and Google have risen up is irrelevant. All it would take is an aggressive anti-trust leaning Congress or President to shake things up again.

[dools]

"a monopoly is perfectly fine" <-- where do you pull that statement from?

[ucaetano]

From the Department of Justice:

For this reason, antitrust law does not regard as illegal the mere possession of monopoly power where it is the product of superior skill, foresight, or industry. Where monopoly power is acquired or maintained through anticompetitive conduct, however, antitrust law properly objects.

A monopoly that doesn't abuse its market power to prevent competition is either a natural monopoly or a temporary situation.

Neither of those are anti-trust issues.

[dools]

Okay so they're not illegal. I wouldn't say "perfectly fine" though... As you point out, it's a temporary situation in the case that they're not being anti-competitive. I would argue that any situation where there is a natural monopoly it should be state run rather than privately run because that situation is, by its very nature, anti-competitive (first in, best dressed!)

[ucaetano]

> Okay so they're not illegal. I wouldn't say "perfectly fine" though

From a anti-trust perspective, not-illegal is perfectly fine.

> I would argue that any situation where there is a natural monopoly it should be state run rather than privately run because that situation is, by its very nature, anti-competitive (first in, best dressed!)

Argue as much as you want, the real world has consistently shown that government-run enterprises, with rare exceptions, are inefficient drains of resources.

[dools]

> the real world has consistently shown that government-run enterprises, with rare exceptions, are inefficient drains of resources.

That is a ridiculous assertion, that stems purely from libertarian propaganda.

[otabdeveloper1]

Google's only product is online advertising, the only kind of advertising that matters in the 21st century.

This is a big deal because they can abuse their advertising clout for evil purposes. (E.g., advertise Chrome but put out a prohibitive pricing scheme for Firefox.)

But it's not a monopoly yet because Facebook and Amazon are competing actors in this space in the USA, and other nations have their own local actors.

In theory, though, if Google went on a really aggressive attack via their Chrome, Android and Analytics properties then they could kill off the competition.

[ArchTypical]

> Google's only product is online advertising

That's not true. Not even from a particular viewpoint. You might want to rephrase that.

Google's primary revenue stream is from online advertising. They have a myriad of products, without which, the revenue stream would dry up. Youtube is a platform and a product and a brand. Google Search. GMail. Etc.

[melbourne_mat]

If a company has a persistently high market share and has had for a long while, it has an effective monopoly whether or not it has ineffectual competitors.

However I believe the reason nothing changes despite these obvious market distortions is that super profits are self perpetuating: companies invest in politicians to keep the distortions in place. The technical definition of monopoly is just a smoke screen.

[ucaetano]

> If a company has a persistently high market share and has had for a long while, it has an effective monopoly whether or not it has ineffectual competitors.

No, it doesn't. Making up your own definition of monopoly (or the meaningless "effective monopoly") doesn't make it true, valid, or useful.

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."(9) The Supreme Court has held that "[m]onopoly power under § 2 requires, of course, something greater than market power under § 1."

[chrisco255]

That would depend on the antitrust laws in said country. And if Coke had 95% market share in the U.S., it could easily be ruled a monopoly.

[ucaetano]

> And if Coke had 95% market share in the U.S., it could easily be ruled a monopoly.

Nope. Because monopoly isn't just about market share. That's what people here don't seem to understand.

[anoncake]

> AS LONG AS the economic power isn't abused to prevent competition which harms consumers.

Power that can be abused will be abused.

[austhrow743]

For many situations though, it can't be abused. Without large barriers to entry and need, the monopoly can only be maintained through providing good value. There isn't much coca cola can do to abuse consumers with a 100% cola monopoly.

[sonnyblarney]

a) They are monopolies by the classic definition.

b) "a monopoly is perfectly fine, AS LONG AS the economic power isn't abused to prevent competition which harms consumers."

This is kind of a non sequitur ... Of course they will prevent competition, that's the essential name of the game. Every company does this - this is not 'abuse' it's just how it works. Ergo, by your definition monopolies are all bad.

I actually think some monopolies are good - when you have well run actor that has some external controls on prices etc. it provides stability among other things.

c) To the extent that colas can be defined as a market, then they have a monopoly. 'Search' does exist aside an adjacent market in which content can be replaced, so it's not helpful.

Google needs to be broken up.

Search is so fundamentally essential ... it's like 'information neutrality'.

The FANGS are total hyprocrits pushing for 'Net Neutrality'.

Just as Comcast should not be able to offer anything but QoS and not read the content of my bites ... Google should not be able to offer anything but quality search. All their other products depend on their search monopoly. Much like Comcast would leverage looking at your packets. Much like Microsoft leverages their OS power to control office software etc..

Search, OS, maybe even Browsers - should be independent, just as Carriers can't use their power to get into other lines of business.

The AT&T merger is bad news, they shouldn't be in the content business.

[wpasc]

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, Bing, etc.? despite it being defaulted to in browsers (you can change this), most people elect to use Google. If a company dominates a single sector through consumer choice, should they be broken up (esoecially when consumer could walk away)?

I'm not try to be facetious, I would just like counter arguments

[toast0]

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 dominance in the related search ads and text ads generally space. In part, because of market size, Yahoo was unable to attract the same kind of advertising market as Google, and famously chose to contract that out to Microsoft, which also was unable to make it work well. I was at Yahoo during parts of that time, and my feeling is that market size wasn't a big part of that failure, but it could be argued that it was a part.

Is any of this compelling enough to be worth an anti-trust case? I don't think so, but maybe?

How could you break up Google if this was considered egrigious enough? Split into several actually separate companies: software, containing chrome, android, and chrome os; search, providing web search apis, but not a front end; advertising, providing advertising apis, but not hosting any sites that use then; consumer services, including a web search front end, Gmail, YouTube, etc; business services, including the Google cloud stuff and maybe g suite; I dunno about the alphabet soup bits. Make the search and ads services contracts be on FRAND and public terms.

[AnthonyMouse]

> 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?

[rifung]

> What is the objection supposed to be?

I work at Google; opinions are my own.

I believe the objection is that it's an unfair competitive advantage and hurts competition. The reasoning is similar to that given when Google was fined for Google Shopping in the EU.

> 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.

You could make the same argument about Microsoft with Internet Explorer then no? I'm sure if someone offered to pay many billions of dollars, Microsoft would have gladly included their browser with Windows too.

Being able to do the same thing with a sufficiently large sum of money doesn't imply that something is not an anticompetitive practice. If anything, it may show that it is indeed anticompetitive..

[AnthonyMouse]

> I believe the objection is that it's an unfair competitive advantage and hurts competition.

But the advantage is just having more resources. Mozilla could likewise pay Facebook/Reddit/Yahoo to push Firefox... if they could afford it. You could call it "unfair" that they don't have the money, but that has nothing to do with Google search in particular.

> You could make the same argument about Microsoft with Internet Explorer then no? I'm sure if someone offered to pay many billions of dollars, Microsoft would have gladly included their browser with Windows too.

But that's the opposite of how tying works. The classic tying case is you have a monopoly on cars and you require all your customers to buy your brand of gasoline, so you also monopolize the market for gasoline.

The Internet Explorer case was really bizarre, because they kept talking about the browser market, but what they were really tying to Windows was (web) apps. It was the same thing with Java. Microsoft wanted to tie the app ecosystem to Windows, so you had to use their platform-specific APIs and the app developer and all their customers get tied to Windows. Microsoft never made a dime from the browser market, nor ever intended to.

But Google pushing Chrome is the other side of the coin. They also have no intention to make any money selling web browsers, but their goal isn't to tie Google search to Chrome -- it works fine in Firefox and IE -- their goal was to prevent Microsoft from using dominance in the browser market to tie Google search (the web app) to Windows through the browser. It's an anti-tying move.

To get where Microsoft was they would have to be preventing other browsers from using Google search while preventing Chrome from using non-Google search (as Microsoft interfered with Netscape running on Windows, prevented IE from being removed and discontinued IE for non-Windows platforms as soon as it gained share), and then at the same time filling Chrome with non-standard proprietary APIs with no public spec (as Microsoft did with IE/ActiveX/etc.) so that third party pages would only work in the browser that only worked with Google search, and competing browsers would have no efficient way to know how to produce the same behavior.

Just promoting a free standards-compliant browser with published source code isn't anywhere near that.

[ArchTypical]

> But so can anybody else. Google sells ads on their search engine to anyone.

There's no guarantee (read the demand partner legal disclaimers, there's specifically NO guarantees) that there's an equitable distribution. There have been analyses to show that the algorithm has short-circuits to benefit Google products, featured here on HN and other places. I don't have them onhand, but it's openly discussed (meaning beyond being taboo):

https://www.cnbc.com/2018/09/21/google-staff-discussed-tweak...

[AnthonyMouse]

> There have been analyses to show that the algorithm has short-circuits to benefit Google products, featured here on HN and other places.

Analyses by competitors who don't like their search ranking. The analyses show a bias alright, but whose?

> I don't have them onhand, but it's openly discussed (meaning beyond being taboo)

That's not a discussion of purposely harming competitors, it's partisans being partisan -- and getting shut down by internal processes designed to prevent exactly that.

Large organizations don't prevent misbehavior by hiring perfect humans. They do it by having layered defenses against it. The fact that the partisans failed is if anything evidence that the internal controls are effective.

[toast0]

How much would Google charge me to put a prominent banner next to the search box saying that Google recomends w3m for the best browsing experience on Google search?

My guess is they would have considered it before they had their own browser, but now that chrome is something they've invested in, it seems like something that is not for sale.

How much of an impact is that placement? I don't really know, but I bet Google has data on it. Discovery on a case like this would be interesting.

Anyway, the point is that's something they can do, because they control so much of search. Bing putting up a banner that says hey, why don't you use Edge, pretty please doesn't have as much impact, because Bing has a smaller market share.

[AnthonyMouse]

> How much would Google charge me to put a prominent banner next to the search box saying that Google recomends w3m for the best browsing experience on Google search?

They're under no obligation to sell their endorsement. And what difference does the specific price make for placement? Suppose it was a lot.

> Anyway, the point is that's something they can do, because they control so much of search. Bing putting up a banner that says hey, why don't you use Edge, pretty please doesn't have as much impact, because Bing has a smaller market share.

How is it different than a company that just has more money and can therefore afford to buy more advertising? It's effectively what they're doing -- they could have sold the space they're using to advertise Chrome to a third party for its market value. By using it themselves they're foregoing that revenue, essentially the Chrome division purchasing the space from the search division.

[sonnyblarney]

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 sources. And it won't get reverse image search unless it does it itself ... which I doubt will happen. Maybe. And of course Yahoo is not a search engine either, it's not really an alternative at all.

In order to compete with Google effectively, you'd have to build your own crawler etc.. It's essentially impossible. The number of engineers, data centres other components ... my gosh man.

Consider for a moment that Google is a massive cash printing machine. Do you not think that VC's would be lining up, piling billions of dollars into competitors in order to take a piece of the action?

Why is nobody - not even intelligent actors with a lot of cash to burn - investing in the most profitable business model of our era?

Because the barriers to compete are absurdly high.

It's a monopoly.

And if it is - then we have to be very concerned about their relationship to adjacent layers of the value chain because of their ability to subsidize products to put others out of business.

So you're aware that in free trade deals between nations, part of the deal includes measures to bar state actors from participating in some economies, and also, rules against 'dumping'. This is because if a nation state actor wants to, they could subsidize their own industries, wipe out competition in other nations, and then let their industry dominate.

The same applies in value chain monopolies.

Standard Oil didn't have 'better oil' or better practices than other Oil companies - they used control and ownership of the railroads to increase prices on their competitors and put them out of business. In a truly competitive landscape, there would be no Standard Oil.

When Microsoft uses their ownership of the OS to put all other 'Office' solutions out of business, is that good for consumers?

By the way - MS is still printing money hands over fist in Office Software. They are making billions. They are a de-facto standard, arguably a monopoly there. Why aren't investors lining up to create competitive solutions? (Because it's an unassailable monopoly).

If Google decides to get into your line of business, and you are small, they will absolutely wipe you out if they want to, and it has nothing to do with having 'a better product'.

Also consider for a moment how many of Google's other business parts could stand on their own as businesses?

Google Analytics? Android? Chrome? Google Docs? Maps?

They are all all money pits, strategic investments (i.e. 'moats') by Google to ensure the dominance of Google Search.

How could a mobile OS vendor compete in a market where Google is using billions from one market, to dominate a different one, like mobile OS? They can't. Maybe in China, wherein there are non-market factors to protect their own makers.

For the same reason that governments have mostly separated the transport of electricity from electricity production, for the same reason we have net neutrality, Google Search should possibly be pared off from the other businesses.

Amazon is using massive profits from AWS to put retailers out of business. Amazon is not hugely profitable, but their AWS business unit is, ergo, the retail unit is probably losing money.

How can retailers compete against Amazon, which is effectively selling at a loss? They can't.

Consumers generally don't win when a de-facto or real monopoly in one market, uses that power to wipe out competition in others.

There is essentially no real competition in search, nobody is putting money in it. Same for office software. Given how much money is being minted in those markets, it's a sure sign of monopoly.

[AndrewKemendo]

This is well written and I would add that the counterargument people are throwing up about how there are no "barriers to entry" for search etc... is a red herring. Really, it's misunderstanding what is required for entry.

As a thought experiment, lets say that three people came up with a WAY better search engine than google. Like way better. Will this new company be able to take search market share away from Google? No.

Why? Chrome is now the dominant browser with Google search built in. Google is the default search on Apple and Android Devices. Google has Billions in marketing for search.

But most importantly, Google has the best engineers on the planet and they can re-build what this crack team did, deploy it to a billion people and drain you in court if you decide to fight them.

Wouldn't you rather just sell to them and cash out instead of getting taken out?

That's how this game goes.

[AnthonyMouse]

> In order to compete with Google effectively, you'd have to build your own crawler etc.. It's essentially impossible. The number of engineers, data centres other components ... my gosh man.

The Internet Archive does this with an annual budget of $10M. That is clearly not a lot of money compared to the amount on the table.

> If Google decides to get into your line of business, and you are small, they will absolutely wipe you out if they want to, and it has nothing to do with having 'a better product'.

That is what happens if any multi-billion dollar company decides to get into your line of business.

> How could a mobile OS vendor compete in a market where Google is using billions from one market, to dominate a different one, like mobile OS?

This is conspicuously disproven by basically every mobile device maker around, who all maintain their own Android forks, plus Apple.

The point of Android wasn't to dominate the OS market, it was to commodify it -- which it did. But that's the opposite of anticompetitive. Now entering the OS market is trivial because you can start with Android, make zero or more changes to it and you have yourself an OS without paying Google or anyone else a dime. You don't even have to use Google search.

[asdfasgasdgasdg]

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.

[kinkrtyavimoodh]

DDG doesn't maintain its own indexes. It uses Bing and Yandex, the only two other global-level English language web indexes. So DDG isn't proof positive of anything.

[sonnyblarney]

"It is incredibly easy to start a search engine"

Yes, but it's impossible to build a quality one, that will compete with Google.

"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."

MSFT is one of the greatest companies in the world, with tons of high tech workers, brand recognition and the like. If they can't make a dent in search, then again I hold this up as evidence of monopoly.

When there is only 1 primary player, despite everything else, then that alone is evidence of monopoly.

If VC's could spend 1 Billion and take a piece out of Google - they would in a heartbeat.

[rifung]

> 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.

I think that's a little unfair to Microsoft.

Google has spent way more engineer team on all the infrastructure required to make Search great. Microsoft's main products were a desktop OS and application, so presumably their existing internal tooling probably wasn't as mature for scalable web services.

I work at Google but opinions are my won.

[twtw]

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.

[AnthonyMouse]

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.