[Wytwwww]

That's am understandable perspective but wouldn't this more or less apply to any product any large company is selling as part of a bundle?

e.g. selling Word/Excel/PowerPoint together is hurting any start-up that might want to enter the document processing/spreadsheet/etc markets? Free browsers killed the entire market that was starting to appear in the 90s etc. etc.

Should office suites be banned? Should Adobe be only allowed to sell subscriptions/licenses for individual apps?

At the end of the day it should only matter if Microsoft's practices are hurting consumers rather than their competitors.

[Perseids]

> At the end of the day it should only matter if Microsoft's practices are hurting consumers rather than their competitors.

Focusing on short term repercussions for consumers has significantly hurt long term consumer interests and there is evidence that it hurt the economy in general. In the decades preceding the 1980s it was generally understood that competition itself is a necessity for effective free markets and that extreme power concentration (as we e.g. see today in the IT sector) is hard to reconcile with efficient markets and political freedom.

See [1] for details, here is an excerpt:

> An emerging group of young scholars are inquiring whether we truly benefitted from competition with little antitrust enforcement. The mounting evidence suggests no. New business formation has steadily declined as a share of the economy since the late 1970s. “In 1982, young firms [those five-years old or younger] accounted for about half of all firms, and one-fifth of total employment,” observed Jason Furman, Chairman of the Council of Economic Advisers. But by 2013, these figures fell “to about one-third of firms and one-tenth of total employment.” Competition is decreasing in many significant markets, as they become concentrated. Greater profits are falling in the hands of fewer firms. “More than 75% of US industries have experienced an increase in concentration levels over the last two decades,” one recent study found. “Firms in industries with the largest increases in product market concentration have enjoyed higher profit margins, positive abnormal stock returns, and more profitable M&A deals, which suggests that market power is becoming an important source of value.” Since the late 1970s, wealth inequality has grown, and worker mobility has declined. Labor’s share of income in the nonfarm business sector was in the mid-60 percentage points for several decades after WWII, but that too has declined since 2000 to the mid-50s. Despite the higher returns to capital, businesses in markets with rising concentration and less competition are investing relatively less. This investment gap, one study found, is driven by industry leaders who have higher profit margins.

[1] https://archive.is/HEik3#selection-1737.0-1737.346 (original: https://hbr.org/2017/12/the-rise-fall-and-rebirth-of-the-u-s... )

[fauigerzigerk]

What makes this so difficult is that it would be hard to fix even if there was agreement on the problem.

If governments were to parcel up markets and stop companies from crossing rather arbitrary dividing lines, it would effectively stop all investment in disruptive technologies because any real disruption most likely infringes on some of these laws.

If you stop large companies from expanding into neighbouring industries, e.g by bundling new stuff with their existing offering, you stop them from becoming bigger but at the same time you are reducing competition. The risk is that you might end up with smaller companies but even less competition.

I'm not ideologically opposed to government intervention. I just don't know how to do it. All discussions on how to break up some tech giant quickly reveal how devilishly complex the problem is. And it's different for each of them and for each industry.

What would be a general rule to prevent growing concentration without damaging innovation, ossifying existing market structures and make impossible demands on the political system in terms of keeping all those detailed rules up-to-date and fit for purpose?

[pydry]

>If governments were to parcel up markets and stop companies from crossing rather arbitrary dividing lines

There is absolutely no need to do this until you become Microsoft's size and no government has or likely ever will.

There was a lot more innovation enabled by the antitrust action against Microsoft in the early 2000s.

[fauigerzigerk]

>> If governments were to parcel up markets and stop companies from crossing rather arbitrary dividing lines

>There is absolutely no need to do this until you become Microsoft's size and no government has or will.

I'm not so sure. Debates about how to break up the tech giants often revolve around which particular activities shouldn't be under the same roof because there is an intrinsic conflict of interest.

For instance, some of the accusations against Amazon appear to be pointing to a potential solution where Amazon would no longer be allowed to compete with Amazon Marketplace traders or with publishers. Not sure if Lina Khan has anything like this in mind or not.

We also had many debates about whether media companies should be allowed to be internet access providers or operate internet backbones. Net neutrality is supposed to stop any misuse of power, but net neutrality itself is under constant fire from deregulators.

The thing is, it doesn't make much sense to break up a specific company because doing both A and B causes a conflict of interest but then let other companies do A and B. That's why in my view any such breakup implies a need for defining boundaries between markets that cannot be crossed.

[ClumsyPilot]

> boundaries between markets that cannot be crossed.

This only applies to dominant companies/ monopolies.

But there is merit to the idea - like should investment banks be allowed to profit from taking a position against the position of their customer, even if that was done on their advise?

[Wytwwww]

> defining boundaries between markets that cannot be crossed

So basically entrenched companies in specific markets would be extremely hard to challenge unless you have very large amounts of capital just laying around doing nothing? Even start-ups would struggle a lot more to get funding because no established company outside of that specific market would be allowed to purchase them. I'm not sure overall that would benefit consumers that much (IMHO the complete opposite but it's debatable).

Of course it depends on how the boundaries are defined, but just in tech:

Apple (being a computer company) would have never been allowed to develop the iPod/Phone/Pad without spinning them off into independent companies?

Google (being an OS provider) wouldn't have been able to sell Pixel phones themselves, but that wouldn't be an issue since Android probably wouldn't have been a thing in the first place.

So we'd be permanently stuck with Symbian and Nokia/Sony Ericsson/Blackberry/etc.

Same applies to MS, which is a great counterexample, despite all their resources and power they completely failed to leverage that in the mobile market. Then you have Intel vs ARM, Google and social media, even Kodak to an extent.

Having a lot of money, resources and great engineering is not necessarily such a huge competitive advantage when trying to enter an adjacent market. You must also be capable of developing competitive/innovative products while not being afraid to cannibalize your current revenue streams. Especially if we're talking about major public companies. Pouring billions into some (potential) boondoggle without any immediate return is hard to pull off without generating a severe backlash from your investors.

Having a seemingly "perfectly" competitive market (i.e. margins are close to the "risk-free" rate of return) doesn't necessarily lead to a lot of innovation because companies in such markets can't afford to make risky investments and tend to just focus on maximizing efficiency of current technologies. e.g. yes Google being able to fund Waymo with their Search/Ad revenue/etc. is not exactly fair to their potential competitors but IMHO preventing that would have significantly slowed down any real progress in the field.

[fauigerzigerk]

That's exactly what worries me. So if something is done to prevent growing market concentration it better be something that doesn't rely on this sort of fine grained market segmentaion.

One alternative that could work is to mandate open APIs and a requirement for large platforms to carry all legal traffic and content. I know this is incredibly tricky as well. Who pays for the infrastructure? What about security and privacy issues? It raises many questions but it seems more promising as a direction of travel.

[joshjje]

Yeah I don't know how you would break up Microsoft Office or regulate that. There are competitors but it's so pervasive, most companies use it. You'd have to create a public API that other competitors could use, and the HR lady is going to be pissed!

[Wytwwww]

> preceding the 1980s it was generally understood that competition itself is a necessity for effective free markets and that extreme power concentration (as we e.g. see today in the IT sector)

Yet Bell wasn't broken up until 1982 so I'm not sure if it was a such a turning point. IMHO allowing AT&T's monopoly to exist for that long was much more detrimental to consumers than whatever MS, Apple and other tech companies are doing these days.

But yeah I certainly overall agree that competition has generally been the driving force behind most of human progress and economic growth at least over the last few hundred years. It's just not entirely clear what measures should governments use to maximize the competitiveness of markets without introducing inefficiencies and costs that slow down economic growth and technological progress (while not providing that many benefits to consumers either).

[Aloha]

I fully believe we lost more than we gained from the breakup of AT&T - local access prices went up significantly, and while long distance rates declined, it did so roughly linearly with the decreasing cost of bandwidth.

In the end we pay about as much as we ever have in aggregate - but at a loss of all of the benefits the AT&T monopoly - subsidized general science research from the labs, a plethora of union jobs, and an overall loss of US manufacturing capacity.

My belief having working in the sector, anything that looks like a utility is better off as a tightly regulated monopoly than being open to the winds of competition.

[CamperBob2]

I fully believe we lost more than we gained from the breakup of AT&T - local access prices went up significantly

Interesting. Out of curiosity, may I ask how old you are?

[Aloha]

Early 40's - about the same age as the divestiture.

[CamperBob2]

I was a teenager at the time, and what I remember, above and beyond pricing alone, was just how firm a grip Ma Bell had on our entire civil communications infrastructure. The Carterfone decision was still a relatively-recent thing with radical implications -- you mean I can plug stuff besides phones into the wall socket?! -- and it was definitely time for things to open up further.

Intra-LATA calling between neighboring towns got a bit more expensive for a while, yes, but long distance almost immediately became much cheaper. It was like the move from film photography to digital -- suddenly everybody was taking photos freely, because the marginal cost was almost gone.

Post-breakup long distance calling became something people weren't inherently reluctant to use, and that was a big deal. Especially with the concurrent rise of BBSes. There's no way I'd ever agree that we were better off with the status quo.

[swores]

> At the end of the day it should only matter if Microsoft's practices are hurting consumers rather than their competitors.

On the one hand that's a broadly reasonable goal, however the point of having laws preventing anti-competitive behaviour is founded in the logic that one company unfairly preventing there being competition from other companies is in itself a form of consumer harm due to the fact that it both prevents consumers from having choice, and also therefore in the longer term allows the monopolistic company to raise prices without consumers having any option other than to pay more or go without.

So in reality the harming or competitors can be considered the harming of consumers.

[ThunderSizzle]

However, this is an interesting problem. By nature of competition, every customer a competitor takes is a customer missed. So when is competition anti-competive?

In the story above, a competitor to Teams couldn't "keep up". Is that really Microsoft's problem? Should Microsoft have made Teams more useless, more expensive, or less integrated so that competitors that couldn't make their own cheaper or better version had a chance to keep getting customers?

[Perseids]

Market concentration is really the underlying problem. Microsoft should never have been allowed to buy GitHub. Microsoft Windows should have long been split into a separate company to Microsoft Office etc. If there wasn't this one gigantic business, then whichever smaller business made Teams would have a much more equal footing with other competitors, as they would not be at an unfair advantage for integration into other currently-Microsoft-owned products as well as the aggressive bundling Microsoft does with Teams.

[ThunderSizzle]

The number of anti-Microsoft people that still use Github is astounding to me, and then just blame Microsoft for buying it.

At some point, if people want an alternative to Github, perhaps it starts with people not using Github and switching to alternatives.

Honestly, it would seem people like market concentration. I don't think people like having to use multiple repository management websites. However, I do wish it was centralization in experience over a federated system, rather than what we have noe. e.g. a "source control browser" that normalizes github, bitbucket, sourceforce, sourcehut, etc. into a single seamless interface.

But even that doesn't seem to be high on anyone's list.

[swores]

> "The number of anti-Microsoft people that still use Github is astounding to me, and then just blame Microsoft for buying it."

Voting with your wallet (or with your attention & time for free things) makes sense if there's an alternative you can choose that's as good as the one from the company you dislike, or if you consider the impact on you of any deficits in the alternative to be less important than sending a message by voting with your wallet/time.

But it's completely understandable, and very common, for people to be in a situation that while they want to boycott a company/product because of how they act in some way (from software UI decisions to using child labour in sweatshops to...) but are faced with the choice between using/buying one of their products or suffering from what they consider to be a significantly worse and/or more expensive product.

And if you wish that one or both of Microsoft selling / giving away Github, or MS changing how they run Github, would happen, then why not publicly express blame in the hope that enough similar complaints build pressure, regardless of whether you're avoiding it or feeling you need to use it?

(Personally I don't feel I use Github enough to be a useful voice on how MS have handled it since the acquisition, but I feel like many people have expressed being pleasantly surprised that they've broadly let Github be Github, at least compared to worst-case fears of how much they might try to make it more Microsofty.)

[godzillabrennus]

Network effect. Especially for open source. The thinking is basically that GitHub is where developers find your project so if you don’t use GitHub you won’t find developers.

[vips7L]

I think this ignores just how much better GitHub is compared to its competitors — at least from my experience of using bitbucket at work. GitHub rightfully should have more market share.

[ClumsyPilot]

> The number of anti-Microsoft people that still use Github is astounding to me

This is silly, they will just buy up all the competition, what choose will you have

[Wytwwww]

I'm not sure that's so obvious these days at least. The era of tech mega corps just being able to buy up all the competition seems to be mostly over(ish) for now (.e.g Figma, ARM, Broadcom/Qualcomm, Visa/Plaid)

[SkiFire13]

Microsoft forced anyone wanting to buy the Office suite to also buy Teams. That's actively harming customers, because they didn't get the choice to pay less and only buy what they wanted (which is just Office).

Once customers bought Office+Teams the cost of using Teams is 0, because they paid for it. How can competitors make a cheaper product then? You can't get cheaper than that! Even if someone wanted to use your product they most likely would still have to pay for Teams by buying Office.

[Wytwwww]

> Microsoft forced anyone wanting to buy the Office suite to also buy Teams

True, but that also applies to every other single app and service that they are bundling with the subscription. I only want Excel but I'm also forced to pay for PowerPoint. And how deep should we go? Should they be forced to turn Edge into a paid product you have to buy separately? They crippled if not outright killed the consumer anti-virus industry by starting to bundle Windows Defender/(whatever it's called)? That certainly wasn't fair to McAfee/Norton/Kaspersky/(any other shovel ware provider) but did it hurt consumers? One might argue this would also apply to [File] Explorer and every other basic app.

How is the situation with Teams at all different and where exactly do we draw the line?

[lesuorac]

When it's a separate application I think the line has already been drawn.

I don't think you should have to turn Edge into a paid product similar to how I don't think grocery stores should be forced to charge you if you use a shopping cart. If Microsoft wants to include Windows Defender for free but if they're increasing the cost of a Windows License to accommodate that development effort then it's not ok.

Microsoft can offer you a volume discount for buying say Excel + Word + X but bundling is anti-competitve (see every complaint about TV bundles ever).

[ThunderSizzle]

But bundling exists everywhere. Why is Microsoft the only offender?

Like you pointed out with cable, if I want just Disney Kids on cable, I need to buy all of Disney's channels, including ABC, etc. This is because that's how the cable provider has to buy it from the networks.

Why aren't they being told they have to unbundled channels from each other? I can't pay per view sports games - they offer subscriptions that bundle the entire season. The NFL is the worst on this. Why can't I just pay a few bucks to watch one game?

It seems like if bundling Teams with Office is that big of a deal, then customers should stop using Office, and use a competitor, just like I avoid cable.

[ClumsyPilot]

> In the story above, a competitor to Teams couldn't "keep up". Is that really Microsoft's problem?

If Microsoft start providing kickbacks and bribes to CTOs for choosing Microsoft, many competitors won’t be able to keep up. Is that Microsoft’s problem?

No, it’s our problem. We get to decide what they are allowed to do, whats fair and what isn’t.

[SideburnsOfDoom]

> Should Microsoft have made Teams more useless,

Hard to see how.

MS could devote resources to making MS Teams more useful, but they don't have to, so they don't.

It's not competing with Slack on features and usability or fun. It's competing with Slack on "you get a chat app and hey, it's free (with office)" and that makes the board happy.

[ThunderSizzle]

I dont disagree with that. Honestly, I think chat should just go away in favor of emails and meetings (and meeting minutes). I've had too much business knowledge disappear into the Slack or Teams void that I can never get back.

[linuxandrew]

> In the story above, a competitor to Teams couldn't "keep up". Is that really Microsoft's problem? Should Microsoft have made Teams more useless, more expensive, or less integrated so that competitors that couldn't make their own cheaper or better version had a chance to keep getting customers?

Well, they should at very least make Teams interoperable like every other goddamn service should be - or be forced to do so.

[antifa]

> At the end of the day it should only matter if Microsoft's practices are hurting consumers rather than their competitors.

MSTeams hurts users 24/7 around the clock.

[SideburnsOfDoom]

Agreed. No company settles on MSTeams because it's good.

They use it because it's effectively free (1), and Slack is not.

It doesn't have to be good. And so it isn't.

1) Free with existing MS Office licences.

[doron]

It's hard to argue that Slack is significantly better; it got increasingly messy over time. It's not that teams are better; the alternative isn't.

[indoordin0saur]

As someone who uses both I still contend that Slack is superior. The messiness seems to come from too many channels being made and needs to be actively pruned by management and company practices around Slack need to be communicated to employees.

[SideburnsOfDoom]

When I changed from a Slack-using employer to a MS Teams-using employer around 2 years ago, I found it impossible to argue that the usability of MS Teams was even close to the usability of Slack. Slack was significantly better in this regard.

MS Teams had better integration with some other MS services such as OneDrive. That's obviously going to be so, that's what it's for.

[darknavi]

We use Slack for text comms and Teams for video meetings. Seems like a decent balance, Slack video calls seems very unpolished compared to the Teams video experience.

[SideburnsOfDoom]

Good point, teams video calls seems better; Slack video was a late addition.

The Slack-using employer also used Zoom. MS is the all-in-one in this regard too.

[antifa]

It's extremely easy to argue that Slack is much better than MSTeams, but now the market does not exist for anyone who wanted to make something better than Slack.

[giancarlostoro]

The issue is a ton of companies already had Office subscriptions. Versus Teams being an added cost, so its a no brainer to just go "Well why the heck do we need Slack if we are getting Teams at no additional cost?" and now any startup in said space is competing against Office proper, which is a losing battle and a lot of added requirements to get your product off the ground.

If I were Microsoft I'd reconsider bundling Loop, since it's going to disrupt tools like Notion. I mean, why would I bother using Notion, if I can just use Loop? : - )

[ClumsyPilot]

> wouldn't this more or less apply to any product any large company is selling as part of a bundle?

That’s absolutely the basic idea of antitrust.

Using dominance in Market A to get advantage in market B

[cujaneway]

Is hurting competitors not the same as hurting consumers?

[Wytwwww]

Companies intentionally trying not to hurt their competitors can't really be described as anything else than a cartel (even if it's not explicit) that's almost invariably horrible for consumers (.e.g. telecom companies, banks, etc. in many countries).

Ideally you always want to see companies trying to run their competitors out of business by undercutting them and offering better products at lower prices. The issue when the playing field isn't level e.g. what MS is doing here is basically predatory pricing. But even then it's not exactly clear cut, e.g. did Uber running out many taxi companies out of business (or destroying their profit margins) was a net-negative or a net positive to consumers?

[rkuodys]

Net negative. Long term it's gonna be net negative due to lower competition, as now there are usually only 2 players in town. Inevitably they are going to raide prices for customers and reduce earnings for drivers

[Wytwwww]

> Net negative

Compared to taxis? Well I guess it depends on where you live, but I wouldn't' generally agree.

It's also a highly commoditized market with little real barriers to entry (at least on the local level) and drivers/users can pretty much instantly switch to a different app so I think it will be reasonable hard for Uber/etc. to do that without someone undercutting them.

> due to lower competition

Still better than no competition and prices being set by a legal cartel (i.e. how taxis worked/work in many places)

[croes]

I think the real problem is that MS can cross-subsidize its Office bundles.

I doubt the price covers the costs, especially after they added Teams.

Kill the competition, raise the price. G-MAFIA/FAANG playbook

[hellojesus]

> I think the real problem is that MS can cross-subsidize its Office bundles.

Wouldn't this apply to any company that sells more than one product or service? Amazon uses Aws margins to subsidize a bunch, including r&d. A lot of biotech companies use profits from one drug to subsidize bad sales in another trying to break into the market.

> Kill the competition, raise the price. G-MAFIA/FAANG playbook

This is a solid business strategy, but it also falls prey to entrants back into the market when the large player raises its prices.