The anticompetitive effects of the near-monopolies enjoyed by companies like Facebook, Google and Amazon preventing other players from entering their markets, and the anticompetitive effects of them using IP and tax loopholes to pay little or no tax are two different problems. We obviously need to fix the latter, but this article does nothing to address what could even be done about the former.
Isn't the problem partly the global economy, where the US benefits from having those behemoths within their borders? If the US government would take regulatory measures against those companies, some other government would gladly take their position.
> If it is recognized that Facebook is a media company, it will be legally liable for its content.
Yes, and to add to that: Facebook is also a telecommunications company (their WhatsApp provides a messaging and voice platform). As such, they should open their network for competition. And they should not be allowed to harvest private information about users.
If the companies are merely facilitators and marketplaces, they should treat everything and everyone using them exactly the same.
That's a really interesting proposition and one that I think bears looking at.
Facebook and Google are effectively trying to become privately owned utilities, aka natural monopolies, for access to the internet. Facebook with their internet.org and google with googlefiber. So there is a case to make there for those companies being looked at like utilities.
However I'm not sure how Amazon fits that narrative. Amazon Marketplace is a tiny chunk of their sales revenue, despite it becoming the largest part of their fulfillment. AWS isn't infrastructure in the same way as facebook and google are trying to do.
I think it's too far a reach politically - they can't even get ISP's classified as utilities.
I think the major problem here is that because these companies don't need to operate from a fixed location in the same way a steel mill, power plant etc... would that there isn't really that many ways that the government can muscle them. They feel the pressure and they just pick up and move (legally first) or shift workers around. So regulators don't have a framework for how to muscle these companies in the same way as old industry.
Does classifying them as utilities simply lock them in? There's no special recognition given to them currently, they are just big business that can get beat by other businesses. If you make them a utility, you're giving them recognition and connecting the to government in ways specific to them. Maybe they would have been beaten given a couple decades, but with the above scenario you've simply ensured they'll be around for 80 years and we have to deal with their boring and uninnovative products.
My perhaps naive belief is the only thing stopping these companies is outside ambition and will. Is this overthinking the utility thing? It seems so defeatist and reactionary. Oh no, nobody has beaten Facebook after 13 years, it's never gonna happen.
If you make them a utility, you're giving them recognition and connecting the to government in ways specific to them.
The government could arguably do two things here:
1. Tell them that they have to comply with common carrier style rules for any infrastructure that is deemed utility like
2. Nationalize the services which are utility like
Both are politically hard to do with #2 being arguably impossible in the US. Hell, even the railroads are still privately owned - despite the monopoly hell they went through with Roosevelt.
If anything would happen though it would be #1 as it's fairly straight forward like the FCC did with ISPs under Title II - now repealed. Again, politically difficult.
And ironically, if anything Google Fiber didn't create a monopoly for Google; it pushed other ISPs to increase their quality of service for consumers. I say this as someone who recently was able to get fiber-to-the-home from CenturyLink.
That seemed high to me. Looking at the financial statement for Q1 2017, AWS is 3,661 million USD in net sales out of 35,714 million in net sales overall. I don't know if Q1 is unusual but this is around 10% for AWS.
I think AWS is the majority of their profit but not revenue, it basically allows them to subsidize the rest of their business to gain market share off the absurd AWS profit margin.
I dunno for the other cases, but Facebook could be forced to have an standard protocol, an imposition justified because data and connections (friends) belong to the user not the company.
Something like how a phone number is portable between mobile cos.
With a standard protocol/API a Facebook user could move to another social network provider without losing the data or the connections.
The solutions for browsers didn't involve government regulation. "Applying the same solution" here means "doing nothing and hoping for things to get better".
Govmnt just imposes the existence of a common protocol for social networks. The justification is to ensure a free market and competition in the social network service.
The protocol itself can be designed as other market standard protocols are defined, no gvmt intervention required there.
It also applies to basic messaging.
Question: It's bad or good that you can send text msgs between different carriers and phone brands?
The standardization of HTML was a cause of the reduction of power by the monopolist, not an effect. Microsoft only started playing ball when their marketshare had been dropping for a while.
If you force Facebook into a standards group, they'll delay as much as they can (question the legitimacy of certain members, criticize the methodology, etc), and then they'll veto anything except a protocol that is both hard to implement for small players but also very limited, and then they'll have plausibly deniable "bugs" in the implementation.
I am not sure why Sales Revenue would be the metric you want to look at, sure it's much smaller than 1P sales revenue but that's because you can't count the sales price of the marketplace in sales revenue. Total GMV is higher on the marketplace and the margins are incredibly higher.
Fighting tax evastion is a problem. Monopolies are problem. People alywas want to be free, so we'll always have new ways of doing business without conforming to the opressive system. Regulated business will never stand a chance to the free one. If we can do without brick'n'mortar stores and buy directly it will happen anyway.
The article mentions nothing of the most important problem we have yet to solve. Who is liable for protecting private data?
The way it works right now is that everyone is basically agreeing to publish any information when they use these platforms. If Facebook, Apple or Google leaks this information they are not legally liable. For the ad-based revenue models they couldn't be, their entire business model is selling this information!
> Some 45 percent of American adults get news from Facebook. Google's search market share in the U.S. approaches 86 percent. About 43 percent of all online retail sales in the U.S. last year went through Amazon.
Why is this a problem? No one forces people to get news from Facebook, search results from Google, or online purchases from Amazon. If any of these companies does or starts doing something that is truly detrimental to consumers, the switching costs are low for all of those products, and there are plenty of competitors ready and able to steal marketshare if they can offer better alternatives.
Some people worry about monopolies, but I don't - they only have power when I choose to give them my money (unlike governments who keep power by force). I worry about society being lulled into the enticing-but-false narrative that we need more regulation in every corner of our lives.
> Some people worry about monopolies, but I don't - they only have power when I choose to give them my money
So if you live in rural Alabama and only Comcast services your area, because they're a monopoly, and your tech job requires internet what are you to do as an individual?
1) Further the monopoly and buy Comcast internet
2) Decide to not have internet and inevitably lose your job
3) Try to compete, but fail to have the start-up costs as you're a small player.
Comcast isn't the problem, but the regulations making it more difficult for competitors to operate in many local markets are a problem. The governments are literally creating the anticompetitive problems you describe.
It sounds like you're only looking at half of what I said. I don't worry about monopolies themselves because if the market were left alone, they wouldn't be a problem. But I do worry about anticompetitive practices enabled by unnecessary regulation. That's exactly what is allowing Comcast to abuse power in certain markets. Hence, the problem lies not in monopolies, but in the government.
If governments didn't create those problems, those problems wouldn't exist, so the blame should be placed at the cause rather than on the consequence.
The disagreement stems from a difference in understanding of what companies are and what their responsibilities should be. Some people mistakenly believe companies should serve society out of a sense of moral obligation, regardless of profits. It's a nice idea in theory, but that's not how a free and fair market operates. History has shown that companies serve society best when profit incentives are left to the market. If consumers care about intangible contributions to society (or "goodwill") such as helping local communities, reducing environmental impact, etc., then profits from consumers' buying choices will naturally end up in the hands of companies that perform best in those areas. If other qualities are more desirable to consumers, the companies that deliver those qualities will capture more market share. In other words, companies should be held to the law (which ideally exists to protect individual property rights, not much more). Beyond that, we as consumers have direct influence on which companies survive or fail based on the votes of our dollars.
As soon as governments try to intervene and force different social benefits than those demanded by consumers, things get worse. The core profit-seeking incentives for companies remain in effect, but they now have incentives to work around regulation in the most efficient ways possible. As regulation tends to favor some companies more than others (as a result of ever-present loopholes and lobbying - or to put it differently, the government's unavoidable tendency to follow money and choose winners), those legislative efforts usually end up only making the situation worse.
Lots of imprecision here. While they did claim that monopolies today are mostly caused by government action, and they did claim that lots of problems are caused by government ... they didn't claim that all problems are inevitably caused by government. Nor did they claim that monopolies cannot have non-government causes as well as government causes. (If a company has a perfect enough reputation+pricing+etc. that nobody thinks it worthwhile to compete with that company ... then so be it!)
Hence their further claim that words were being put into their mouth.
In a "free" market, a natural monopoly business will fluctuate between periods where zero companies exist, where one company exists as an incumbent monopolist, and where one or more challenger companies exist that are all frantically trying to unseat the incumbent before going out of business.
Monopolies will develop, but they will also occasionally fail and exit.
The reason why governments elevate single companies in a natural monopoly line of business to de jure monopolies is that those periods where zero companies exist could be disastrous to the functioning of other businesses. If all the local water companies go bust, the toilets stop flushing.
In a free market, if Comcast is the local ISP monopolist, it cannot stop anyone from investing in an entirely new fiber network. If you have the money to do so, you can walk into town, lay fiber, undercut Comcast on monthly service costs, and drive them to either try to compete or lose all customers. If they compete, it is a war of attrition, and the company that runs out of money first loses (if the local telecoms business is indeed a natural monopoly, which is debatable). If they lose all customers, you are the new monopoly, and you now have the option to reduce service quality and raise prices. As long as the threat of potential competition exists, a monopolist has to operate by monopolistic competition instead of secure monopoly. It is a completely different microeconomics calculation for determining price and output. Generally speaking, the price is lower and output higher than for secure monopoly, but still higher price and lower output than the market-clearing price of perfect competition.
In short, rather than charging as much as you can for as little as you can produce, you have to produce as much as is necessary so that no competitor can establish a competitive foothold by targeting your unserved or under-served customers, and set prices accordingly.
So there are real differences between the monopolies produced by the free market, and those protected by government.
Historically, if we look at societies with more market freedom vs those with more government control, it's pretty clear which ones do better. If you don't believe that, you may want to try living in Venezuela or North Korea.
Should we blame Comcast for attempting to maximize their own profits in legal ways (the purpose for which their company exists)? Or is it the government's fault for allowing lobbyists to exert that kind of control over legislation? One of the two organizations has the power to create and enforce laws; the other does not.
If legislators are so easily influenced by those with money, how is that not a failure of government? If a criminal gets caught and blames his peers for being a poor influence, do you suppose he should go free because he can't help being influenced to commit crime? Why then should we act as if the problem lies in the companies and special interest groups attempting to influence government?
Do you (as many other do) really think the best course of action involves more legislation from those we know can't be trusted? Or do you expect companies to simply "shape up" because a group of people wag a finger at them?
The bigger the government becomes, the easier it is for these kinds of things to fly under the radar. As government grows, so does its power, and as power grows, so do the incentives to infiltrate and control that power. If you'd like it to stop, reduce the size of the organization ultimately responsible rather than add fuel to the fire.
The criminal bribing a cop has broken the law by bribing a cop, whereas lobbying is perfectly legal (and justifiably protected as free speech), so there's a pretty big difference.
Sure, lobbying is legal. I can see how, for instance, it can be helpful and needed to inform politicians about complex issues faced by corporations.
Unfortunately, lobbying is also easy to abuse when you have very powerful amoral and greedy entities use it and vast sums of money, directly or indirectly, to influence politicians against the interests of the people.
> ...or is it the government's fault for _allowing_ lobbyists to exert...
That's a good question.
Notice, however, that NOT "allowing" the lobbyists of carriers to override the good of the people is sort of a form of "regulation".
The fact that these politicians don't have their asses handed to them upon the next election illustrates that this is a bigger problem than just regulation or not. Citizens who aren't informed are as much to blame as Comcast and the politicians who are lining their pockets with Comcast money.
> Some people worry about monopolies, but I don't - they only have power when I choose to give them my money...
Well, in the case of google and facebook, you're not even their customer. They provide services and environments which aren't easy or convenient to get elsewhere for most people (that's why they're called "monopolies", after all). Its only a matter of time before one of these giants decides to do something truly harmful with their data. When that happens, the bullshit legalese in the EULA will be nothing more than a mere speed bump and offer no protection to those which are harmed. The sheer scale of these entities is staggering and they can "outgun" virtually anyone in any legal or public-relations arena.
I sort-of agree that regulation in the form of more rules isn't answer, at least not the full answer. What we REALLY need are informed consumers (AND CITIZENS) and enforcement with the ability and authority to swiftly neutralize, liquidate or "de-fang" these entities when they do wrong. Sadly, that's not the way things are going. I think its a good idea to be "worried" about monopolies.
What we really need is a friendly post-singularity AGI, or an omnipotent omnibenevolent god that directly and noticeably runs the government. But, we can't get those. What if we can't get more informed consumers either?
Informing yourself is hard work, and there's no clear way to do it (see: multitudes of bullshit everywhere on everything). Most people aren't wouldn't know how to do it even if they 1. knew they were lacking understanding, 2. wanted to change that enough to put in hours a week of research.
I mean, in theory if you go talk to people about problem X they'll be "more informed consumers", but your evangelism doesn't scale, and human nature won't magically improve any more than it did the last 2000 years of hoping it would.
Interesting article. I don't think Facebook or Google set out originally to be newspapers, but the author of this argues that that is essentially what they have become and they should therefore be subject to the same regulations and taxes as all ad-driven media businesses. Makes sense to me. I think we all cheered them when they were using technology to seemingly turn the archaic media company model on it's head (and give us "free" services), but when it came time to pay back investors Google and Facebook quickly adopted the same old model of selling advertising space.
I think they stumbled into being media companies out of naivety and not understanding, initially anyway, that they had duplicated a media company business model with everything except the content generation. they simply replaced the content generation part of the business model with what was being given to them, for free, on the internet by users and other original content creators.
when they dropped their initial naivety and took stock of what their business really was it was sufficiently obvious to them that they were media companies and that selling ad inventory was their business. they now fully embrace being media companies but are able to do so in a way that has, at least so far, evaded the traditional cultural and legal regulatory frameworks that other media companies deal with. I think this era will come to an end rapidly though.
TL;DR The tech monopoly problem is because Silicon Valley has convinced regulators these firms are entirely new things, not subject to existing rules. Google+Facebook+Amazon+Uber+etc should (a) pay their full corporate taxes and (b) be treated like utilities. For example, if Facebook were a media company, they'd be liable for user content.
Uber flaunting taxi regulations is a special case (IMHO).
Outside of that, be careful what you ask for. In the US, certain utilities are absolutely NOT liable for user content. If you use a cell phone to plan a crime, Verizon is not liable for what is said or written.
I do think the emerging tech monopoly is a problem (Google, Apple, Amazon, Facebook), but it's not because of lack of application of old regulations to new use cases.
It's because: technology moves quickly, there are strong network effects, and law+regulations have failed to adapt quickly enough.
I love how people are now all of a sudden defending the "Taxi regulations" as if an artifical monopoly that was serving no one's best interests except for the monopoly was somehow a great thing. It's a lazy argument, especially for HN where old industries with arcane rules are meant to be broken. I guess you don't remember how shitty taxis were pre-Uber, when calling a cab 1 hour before you needed it was required, and you wouldn't know if they would actually come or not. And after waiting 1 hr they didn't come, you would be shit out of luck.
Meanwhile, in every city where Uber pops up transportation gets better. Taxi monopolistic laws were meant to be disrupted, and I'm glad Uber has done it.
I agree but the Uber hate on HN is so strong that no-one will admit the positive impact they've actually had. Would love to see some real counter-arguments though.
The positive impact was happening without Uber. There had been a variety of ride sharing programs for several year before Uber started, and the rise of smart phones would soon allow for easy charging people for the service.
Uber than devoured the market by using rich guy connections to raise money, and ignoring regulations. And that's what people hate.
I went to a wedding in the countryside last year (5 miles from a decent town, hardly remote) and was reminded of how things still are outside cities. I literally could not get a taxi from the local firms and had to wait for a guest driving my way to leave naturally.
Though Uber etc. still haven't completely solved the attitude problem of drivers who seem to feel they're doing you a favour rather than providing a service.
Why is this comment being grayed? Despite the language, this is a legitimate rebuttal.
>
I love how people are now all of a sudden defending the "Taxi regulations" as if an artifical monopoly that was serving no one's best interests except for the monopoly was somehow a great thing.
Conjecture, disregarding.
> It's a lazy argument, especially for HN where old industries with arcane rules are meant to be broken.
I cannot refute this.
> calling a cab 1 hour before you needed it was required, and you wouldn't know if they would actually come or not
This is still very true.
> after waiting 1 hr they didn't come, you would be out of luck.
This is true.
> in every city where Uber pops up transportation gets better.
This is the only thing I could come close to refuting, but it'd be an argument built wholly on anecdotal evidence.
The comment seems to be suggesting there are only two possible positions - pro-taxi or pro-Uber. Furthermore, it suggest that HN has taken an aggregate position.
In reality, I can be both pro-taxi and pro-Uber, or vice versa. Furthermore there are plenty of Uber defenders as well as attackers here on HN, so suggesting people are "all of a sudden defending taxis" seems a stretch.
I agree that the taxi industry had and continues to have many problems, but I don't agree with much of Uber's behaviour either.
You probably never use taxis in Vancouver then and/or you don't understand the value proposition that Uber brings. There are tens of thousands of people in SF alone that now earn money that previously didn't, and customers that have a much better transportation option that they are willing to pay for.
I think the Uber hate comes from their business practices, and people are reaching to jump on the bandwagon to hate uber at all cost. I think it's been a good service compared with taxis. But we're in this weird double standard, where we tolerate them breaking some rules but ignoring others. (Tolerating the taxi regulations, but violating basic decency [safety, passenger rights, etc])
I think the main thing about tech is that it makes accessing the global market easier than ever. Monopolies in one sector can now extremely easily hop into another market. If anything it feels like an accelerated version of the railroad barons
It sure feels like antitrust laws could be used effectively. Ultimately monopolies do have a lot of money and lobbying power though. Imagine being big enough to basically absorb the billions in fines from the EU. You're either a bank or Google.
How do you fix that apart from ripping the company up into small pieces like with AT&T
Imho, article is largely missing the bigger point: stifling of innovation.
Regulation should be focused on removing FB / Google's ability to unfairly leverage their size to thwart up and coming competitors.
Otherwise you simply freeze the status quo and cement FB and Google into unassailable market constants.
Sure you can regulate them to keep them from acting poorly, but what's the point if they can still squash the next Facebook or Google?
Edit: Curious on thoughts on this, but it doesn't seem to me like a progressive corporate tax rate (including mandatory minimum) based on market share (with the overage dedicated to funding basic research) would be a terrible idea.
If you have outsized market share, you're probably receiving more than your fair share of the commons, so reasonable to pay that back.
Every time I see that phrase I know the person who said it will never be able to answer this, but I still am tempted to ask: please define "fair share" and who exactly determines it and how.
Who in the "community" decides which burdens are equitable to which others? Consensus between whom? Shall we have a 100% democratic vote where every citizen participates to decide the new regulatory burden on these companies?
What's the average between "leave them alone," "tax them more," "dismantle them," and "hang the founders as an example to others"? I've seen all these options voiced here. Since you do this "every day," please help me understand how to average those "fairly"
Your question is one very close with bike shedding. I'm unsure why you would want to bring up the subject, having offered no solutions yourself. Your comment history suggests you have the answer to the question already or the ability to seek it quickly
Should you wish to continue these lines of questioning then I suggest you author and submit an article. Your line of questioning would both fit better and garner better responses in a thread if its own.
The community has always decided the wealth distribution in society. It is not some "invisible hand" that controls it. The wealth distribution, as it exists today, is a result of purposeful decisions starting all the way at the Enclosure of the Commons. The tax code, legal system, concept of property(intellectual and otherwise) etc. are not the result of inevitable market forces ordained by a higher power, they are carefully designed.
If the "community" set up these systems(on which these companies are parasitic on), they can change them in a way that benefits the community at large.
The "community" == revolving door lobbyists, right? Or am I reading too much into your comment. The average citizen has little say in the rules the so-called "community" designs.
As an outsider, it's fascinating to watch the process unfold. The current drum that's being beat by the media is tax-reform. Is this really the most pressing issue? Is the need for reform a given as the media suggests without question (right or left), or are there marching orders from the conglomerate overlords to push for a lucrative agenda?
Yes, decision making power has been hijacked from the population at large and put into the hands of a few. But the point I was trying to make was that these are still just decisions made by somebody, decisions that can change(or be forced to change). They are not the result of some inevitable process that it is foolish to try to change, as is often claimed by proponents of "free" markets etc. There is no "natural" distribution of wealth and resources that will be undermined by redistribution, because the current distribution of wealth is itself the result of hundreds of years of redistribution, from the commons into private hands, from the third world into the first, and from the disenfranchised to the wealthy.
> The average citizen has little say in the rules the so-called "community" designs.
I think sometimes there's a commingling of "the system is complex" and "an individual is powerless" in recent political narratives, to the detriment of hope.
The "system" (by which I mean elected politicians, lobbyists, campaign contributions, the Illuminati, etc) is ultimately grounded in popular will. Clinton lost because people were upset.
I'm not denying regulatory capture, revolving door lobbying, and corporate interests aren't part of the system.
But you know what else is? Local primaries. Local executive officials (school board, mayor, etc). Visiting your congressperson and framing your issues in a way that speaks to them. Making campaign contributions.
I think it's too easy to nihilistically say "the game is hard, therefore I'm not going to play."
Bullshit. The democracy game is as it has always been (and a helluva lot less corrupt now than in previous centuries). But all that's required for evil to triumph is that good people don't engage.
I don't think government agencies are at all concerned with 'stifling of innovation'. I don't think your average intelligent person is at all concerned with it, let alone everyone else.
Regulation (invasive action is general) is for when enough people are really unhappy. Who's unhappy in this instance? The innovators?
Society in general, when Facebook and Google becomes the next ATT and all innovation much be funnelled through (and approved by) them.
The issue with monopolies (e.g. ATT in the Ma Bell days) is not that they're intrinsically evil, but that they're terrible at allowing innovations to reach the market.
> Imagine being big enough to basically absorb the billions in fines from the EU.
These billions in fines are based on % of revenue; so by definition almost every business will be able to absorb the EU's fines; it's this big to be an actual disincentive to an entity that is Google-sized.
Large entities are in many ways actually far easier to regulate than small entities, since you can actually keep track of them and hold them accountable.
> How can these benign, universally loved innovators be stopped from turning into evil, soulless corporate behemoths? Break up companies such as Facebook, Google and Amazon, (...) Or perhaps recognize them as utilities (...) Neither makes sense in most cases.
In fact they advocate for c):
Tech giants should be treated as classical business. Amazon like a retailer, Uber like a taxi comp, Airbnb like an hotel brand, …
For Facebook they talk more about the fact if it was treated as a media company they should keep track of who is running ads and follow regulations on political ads.
many will disagree with me, but i remain very surprised that these firms have not been hit by a lot more equal opportunity lawsuits from state and federal agencies.
Your basic point is that this problem is cause by a LACK of regulation and will be fixed by MORE regulation.
"These giant tech companies are doing too well, we need to burden them with regulation like utilities (Verizon, AT&T, etc) and that will give competitors a chance."
Let me ask you: are you happier with Apple or with AT&T? Apple? Then why are you trying to give Apple incentives to behave more like AT&T?
The tech giants have locked competitors out of using their technology using government patents. Amazon held a patent on "1-click checkout" from 1997-2017. Google has patented ALL of the good web search algorithms.
We as a society to move past patent regulations, they are artifacts of the industrial revolution and are abused by powerful corporations. Without a team of lawyers, a simple website will be sued out of existance.
Agreed. I also don't think that's the fault of any patent holder though. If you're running a business and you have a way to get a legal monopoly why wouldn't you? If you don't there is a chance you competitor will get that patent or one similar enough.
I think the main problem with patents is their duration. 20 years is absurdly long for the software space. It may be justified for physical objects since making a hardware patent into a marketable product usually requires more investment and time to get to market (e.g. to design and build a factory producing the product), but in software, a 20-year-old product is usually already on display in some museum.
If I had to make a change to software patents right now, I would shorten them to five years. Maybe less.
There is not a problem with "tech monopolies." As new tech emerges, new platforms, new ideas, the market WILL be disrupted.
For example.
1. Google emerged in a market where there were dominate search engines, such as Alta Vista.
2. Facebook emerged in a market where MySpace was dominating.
3. Facebook is disrupting Google.
etc.
I firmly believe that the market is ripe and ready always for new ideas and tech. Are you going to be able to build a better search engine than Google? Probably not because it works well. Google will be disrupted in some other way we haven't considered, maybe AI.
Yeah, I do believe some type of AI has a decent chance at disrupting google. Their current infrastructure is very good, and is their competitive advantage. But if some algorithm doesnt need that infrastructure, and provides a much better experience than google, they can be dismantled. All tech companies eventually get disrupted.
1.) The inherent mediocrity in large bureaucracies. They always turn mediocre. People inherently form factions within corporations and become politicians. This destroys the old culture and creates adverse incentives.
2.) Technology is always evolving at a massive pace. Old infrastructure in a large company becomes a burden, and stifles innovation. Startups are built to seize opportunities with new technology.
3.) Which tech companies that have historically been dominant since the 80s are still dominant? Intel? IBM? AOL? Yahoo? Microsoft (maybe but still somewhat irrelevant). Apple may be the only company, but they are in a different game.
There are a largish number of issues converging here. Broadly the naive idea that power and control is used for good needs to be jettisoned. It only seeks its own concentration with negative outcomes for everyone else, and thus requires societal intervention before it becomes a problem.
Neither Google or Facebook are innovative. Search is not innovation, for Google efficient, yes. Facebook is timing. The bulk of the hard work in computing is the result of decades of work by academics funded by the public. TCP/IP is the innovation. So market fundamentalists prone to come in when all the hard work is done and see perfect markets everywhere have little ground for complaints about innovation.
You can already see abuse of power in Google and Facebook. Zuckerberg's political ambitions will prevent egregious bad behavior for now but that just underlines the potential for abuse.
There are other issues too. Lobbying, inability to apply anti-competitive laws - amp is a glaring problem, and the wild west situation with tracking and user data, there needs to be some control and constraints here. You need to create a level playing field where disruption becomes possible and problems can be addressed by market forces before they take the field with them.
I honestly don't know how you can say that Facebook and Google are not innovative companies.
Googles search beat out lots of other companies. Their search was innovative, their business model was innovative.
Facebook convienced millions (billions?) of people to share their information on the internet. That's not innovative?
You're effectively saying that the person who has the initial idea is the innovator, not that one that brings it to success. I'd argue that if anything it's the successful implementor that's innovative.
Uber's ability to skirt cab regulations in particular has always baffled me. They've always argued that their drivers are independent contractors, not employees, and that they merely facilitate the arranging of rides & fare payments. If that's actually the case, then how are the drivers not textbook cabbies? How does a driver using an app to receive requests for rides differ at all from a driver using a phone dispatcher to receive requests for rides? I can't think of any difference that should exempt Uber drivers from submitting to the same regulations as regular cabbies other than the argument that existing regulations are obnoxiously burdensome and often protectionist.
Taxis are allowed to pick up people that are hailing them on the street. Uber works much a like a private car company does - you call them and they send a car. So it is different than a taxi. The difference between uber and a private car company is that uber can respond as fast as a taxi.
> If it is recognized that Facebook is a media company, it will be legally liable for its content, and it will be forced to keep better track of fraudulent anonymous usage, like U.S. political ads placed by foreign customers.
What is exactly fraudulent about U.S. political ads placed by foreign customers?
The weirder part of this statement is that they count "political ads [being] placed by foreign customers" as "anonymous usage". If it's anonymous, how do they know they were foreign?
Do you want your tech companies to be more like your utilities, or your utilities to be more like your tech companies? Personally, i'd very much prefer the latter. Tech companies have monopolies granted by superior user experiences. They are deeply afraid of losing that superiority. Utility companies have government granted monopolies - they fear only changing regulation. Companies align with their incentives. If they do not, they will be replaced by those that do. I'm much more comfortable with a company who's monopoly rests on the back of my happiness, personally.
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[ 2.9 ms ] story [ 166 ms ] threadYes, and to add to that: Facebook is also a telecommunications company (their WhatsApp provides a messaging and voice platform). As such, they should open their network for competition. And they should not be allowed to harvest private information about users.
That's a really interesting proposition and one that I think bears looking at.
Facebook and Google are effectively trying to become privately owned utilities, aka natural monopolies, for access to the internet. Facebook with their internet.org and google with googlefiber. So there is a case to make there for those companies being looked at like utilities.
However I'm not sure how Amazon fits that narrative. Amazon Marketplace is a tiny chunk of their sales revenue, despite it becoming the largest part of their fulfillment. AWS isn't infrastructure in the same way as facebook and google are trying to do.
I think it's too far a reach politically - they can't even get ISP's classified as utilities.
I think the major problem here is that because these companies don't need to operate from a fixed location in the same way a steel mill, power plant etc... would that there isn't really that many ways that the government can muscle them. They feel the pressure and they just pick up and move (legally first) or shift workers around. So regulators don't have a framework for how to muscle these companies in the same way as old industry.
My perhaps naive belief is the only thing stopping these companies is outside ambition and will. Is this overthinking the utility thing? It seems so defeatist and reactionary. Oh no, nobody has beaten Facebook after 13 years, it's never gonna happen.
The government could arguably do two things here:
1. Tell them that they have to comply with common carrier style rules for any infrastructure that is deemed utility like
2. Nationalize the services which are utility like
Both are politically hard to do with #2 being arguably impossible in the US. Hell, even the railroads are still privately owned - despite the monopoly hell they went through with Roosevelt.
If anything would happen though it would be #1 as it's fairly straight forward like the FCC did with ISPs under Title II - now repealed. Again, politically difficult.
https://muninetworks.org/communitymap
Something like how a phone number is portable between mobile cos.
With a standard protocol/API a Facebook user could move to another social network provider without losing the data or the connections.
The protocol itself can be designed as other market standard protocols are defined, no gvmt intervention required there.
It also applies to basic messaging.
Question: It's bad or good that you can send text msgs between different carriers and phone brands?
The standardization of HTML was a cause of the reduction of power by the monopolist, not an effect. Microsoft only started playing ball when their marketshare had been dropping for a while.
If you force Facebook into a standards group, they'll delay as much as they can (question the legitimacy of certain members, criticize the methodology, etc), and then they'll veto anything except a protocol that is both hard to implement for small players but also very limited, and then they'll have plausibly deniable "bugs" in the implementation.
Feels almost inevitable to me after phrasing it this way.
The way it works right now is that everyone is basically agreeing to publish any information when they use these platforms. If Facebook, Apple or Google leaks this information they are not legally liable. For the ad-based revenue models they couldn't be, their entire business model is selling this information!
Why is this a problem? No one forces people to get news from Facebook, search results from Google, or online purchases from Amazon. If any of these companies does or starts doing something that is truly detrimental to consumers, the switching costs are low for all of those products, and there are plenty of competitors ready and able to steal marketshare if they can offer better alternatives.
Some people worry about monopolies, but I don't - they only have power when I choose to give them my money (unlike governments who keep power by force). I worry about society being lulled into the enticing-but-false narrative that we need more regulation in every corner of our lives.
So if you live in rural Alabama and only Comcast services your area, because they're a monopoly, and your tech job requires internet what are you to do as an individual?
1) Further the monopoly and buy Comcast internet
2) Decide to not have internet and inevitably lose your job
3) Try to compete, but fail to have the start-up costs as you're a small player.
The disagreement stems from a difference in understanding of what companies are and what their responsibilities should be. Some people mistakenly believe companies should serve society out of a sense of moral obligation, regardless of profits. It's a nice idea in theory, but that's not how a free and fair market operates. History has shown that companies serve society best when profit incentives are left to the market. If consumers care about intangible contributions to society (or "goodwill") such as helping local communities, reducing environmental impact, etc., then profits from consumers' buying choices will naturally end up in the hands of companies that perform best in those areas. If other qualities are more desirable to consumers, the companies that deliver those qualities will capture more market share. In other words, companies should be held to the law (which ideally exists to protect individual property rights, not much more). Beyond that, we as consumers have direct influence on which companies survive or fail based on the votes of our dollars.
As soon as governments try to intervene and force different social benefits than those demanded by consumers, things get worse. The core profit-seeking incentives for companies remain in effect, but they now have incentives to work around regulation in the most efficient ways possible. As regulation tends to favor some companies more than others (as a result of ever-present loopholes and lobbying - or to put it differently, the government's unavoidable tendency to follow money and choose winners), those legislative efforts usually end up only making the situation worse.
If there is a problem, its cause is government, no matter what the problem is and no matter what empirical observation says about the cause.
And...
In a "free" market, it is impossible for a monopoly to develop.
And...
There is no middle ground between laissez-faire utopia, and North Korea.
You certainly seem like a rigorous and intellectually honest interlocutor.
Hence their further claim that words were being put into their mouth.
Monopolies will develop, but they will also occasionally fail and exit.
The reason why governments elevate single companies in a natural monopoly line of business to de jure monopolies is that those periods where zero companies exist could be disastrous to the functioning of other businesses. If all the local water companies go bust, the toilets stop flushing.
In a free market, if Comcast is the local ISP monopolist, it cannot stop anyone from investing in an entirely new fiber network. If you have the money to do so, you can walk into town, lay fiber, undercut Comcast on monthly service costs, and drive them to either try to compete or lose all customers. If they compete, it is a war of attrition, and the company that runs out of money first loses (if the local telecoms business is indeed a natural monopoly, which is debatable). If they lose all customers, you are the new monopoly, and you now have the option to reduce service quality and raise prices. As long as the threat of potential competition exists, a monopolist has to operate by monopolistic competition instead of secure monopoly. It is a completely different microeconomics calculation for determining price and output. Generally speaking, the price is lower and output higher than for secure monopoly, but still higher price and lower output than the market-clearing price of perfect competition.
In short, rather than charging as much as you can for as little as you can produce, you have to produce as much as is necessary so that no competitor can establish a competitive foothold by targeting your unserved or under-served customers, and set prices accordingly.
So there are real differences between the monopolies produced by the free market, and those protected by government.
That's an interesting claim. What evidence do you have that supports it?
Clearly autocracy isn't optimal, but it appears that neither is a totally free market.
Anybody can "write the law" and have their well-compensated politician do the formalities.
More advanced players will simply put their stooge in an office of power (see Ajit Pai).
Do you (as many other do) really think the best course of action involves more legislation from those we know can't be trusted? Or do you expect companies to simply "shape up" because a group of people wag a finger at them?
The bigger the government becomes, the easier it is for these kinds of things to fly under the radar. As government grows, so does its power, and as power grows, so do the incentives to infiltrate and control that power. If you'd like it to stop, reduce the size of the organization ultimately responsible rather than add fuel to the fire.
Unfortunately, lobbying is also easy to abuse when you have very powerful amoral and greedy entities use it and vast sums of money, directly or indirectly, to influence politicians against the interests of the people.
Notice, however, that NOT "allowing" the lobbyists of carriers to override the good of the people is sort of a form of "regulation".
The fact that these politicians don't have their asses handed to them upon the next election illustrates that this is a bigger problem than just regulation or not. Citizens who aren't informed are as much to blame as Comcast and the politicians who are lining their pockets with Comcast money.
At the same time, there is evidence of real anticompetitive behavior that crops up from time to time.
I sort-of agree that regulation in the form of more rules isn't answer, at least not the full answer. What we REALLY need are informed consumers (AND CITIZENS) and enforcement with the ability and authority to swiftly neutralize, liquidate or "de-fang" these entities when they do wrong. Sadly, that's not the way things are going. I think its a good idea to be "worried" about monopolies.
What we really need is a friendly post-singularity AGI, or an omnipotent omnibenevolent god that directly and noticeably runs the government. But, we can't get those. What if we can't get more informed consumers either?
Informing yourself is hard work, and there's no clear way to do it (see: multitudes of bullshit everywhere on everything). Most people aren't wouldn't know how to do it even if they 1. knew they were lacking understanding, 2. wanted to change that enough to put in hours a week of research.
I mean, in theory if you go talk to people about problem X they'll be "more informed consumers", but your evangelism doesn't scale, and human nature won't magically improve any more than it did the last 2000 years of hoping it would.
What if we can't get more informed consumers?
when they dropped their initial naivety and took stock of what their business really was it was sufficiently obvious to them that they were media companies and that selling ad inventory was their business. they now fully embrace being media companies but are able to do so in a way that has, at least so far, evaded the traditional cultural and legal regulatory frameworks that other media companies deal with. I think this era will come to an end rapidly though.
Uber flaunting taxi regulations is a special case (IMHO).
Outside of that, be careful what you ask for. In the US, certain utilities are absolutely NOT liable for user content. If you use a cell phone to plan a crime, Verizon is not liable for what is said or written.
I do think the emerging tech monopoly is a problem (Google, Apple, Amazon, Facebook), but it's not because of lack of application of old regulations to new use cases.
It's because: technology moves quickly, there are strong network effects, and law+regulations have failed to adapt quickly enough.
Meanwhile, in every city where Uber pops up transportation gets better. Taxi monopolistic laws were meant to be disrupted, and I'm glad Uber has done it.
Uber than devoured the market by using rich guy connections to raise money, and ignoring regulations. And that's what people hate.
Though Uber etc. still haven't completely solved the attitude problem of drivers who seem to feel they're doing you a favour rather than providing a service.
> I love how people are now all of a sudden defending the "Taxi regulations" as if an artifical monopoly that was serving no one's best interests except for the monopoly was somehow a great thing.
Conjecture, disregarding.
> It's a lazy argument, especially for HN where old industries with arcane rules are meant to be broken.
I cannot refute this.
> calling a cab 1 hour before you needed it was required, and you wouldn't know if they would actually come or not
This is still very true.
> after waiting 1 hr they didn't come, you would be out of luck.
This is true.
> in every city where Uber pops up transportation gets better.
This is the only thing I could come close to refuting, but it'd be an argument built wholly on anecdotal evidence.
We should not be so easily provoked.
In reality, I can be both pro-taxi and pro-Uber, or vice versa. Furthermore there are plenty of Uber defenders as well as attackers here on HN, so suggesting people are "all of a sudden defending taxis" seems a stretch.
I agree that the taxi industry had and continues to have many problems, but I don't agree with much of Uber's behaviour either.
I don't remember that, because I live in a country that doesn't have awful taxis, and where Uber has little to offer except dubious insurance status.
https://www.bcbusiness.ca/vancouver-has-fewer-taxis-than-any...
I think the main thing about tech is that it makes accessing the global market easier than ever. Monopolies in one sector can now extremely easily hop into another market. If anything it feels like an accelerated version of the railroad barons
It sure feels like antitrust laws could be used effectively. Ultimately monopolies do have a lot of money and lobbying power though. Imagine being big enough to basically absorb the billions in fines from the EU. You're either a bank or Google.
How do you fix that apart from ripping the company up into small pieces like with AT&T
Regulation should be focused on removing FB / Google's ability to unfairly leverage their size to thwart up and coming competitors.
Otherwise you simply freeze the status quo and cement FB and Google into unassailable market constants.
Sure you can regulate them to keep them from acting poorly, but what's the point if they can still squash the next Facebook or Google?
Edit: Curious on thoughts on this, but it doesn't seem to me like a progressive corporate tax rate (including mandatory minimum) based on market share (with the overage dedicated to funding basic research) would be a terrible idea.
If you have outsized market share, you're probably receiving more than your fair share of the commons, so reasonable to pay that back.
It's not rocket science. We (humans) use it every day. It's just contextually and subjectively defined by group consensus.
What's the average between "leave them alone," "tax them more," "dismantle them," and "hang the founders as an example to others"? I've seen all these options voiced here. Since you do this "every day," please help me understand how to average those "fairly"
Should you wish to continue these lines of questioning then I suggest you author and submit an article. Your line of questioning would both fit better and garner better responses in a thread if its own.
Why would you ask if the point of view is upsetting, then drastically rephrase your comment to "clarification"?
Changing your comment that drastically is quite disingenuous. The original better demonstrated intent, which was to demean, not clarify.
If the "community" set up these systems(on which these companies are parasitic on), they can change them in a way that benefits the community at large.
As an outsider, it's fascinating to watch the process unfold. The current drum that's being beat by the media is tax-reform. Is this really the most pressing issue? Is the need for reform a given as the media suggests without question (right or left), or are there marching orders from the conglomerate overlords to push for a lucrative agenda?
I think sometimes there's a commingling of "the system is complex" and "an individual is powerless" in recent political narratives, to the detriment of hope.
The "system" (by which I mean elected politicians, lobbyists, campaign contributions, the Illuminati, etc) is ultimately grounded in popular will. Clinton lost because people were upset.
I'm not denying regulatory capture, revolving door lobbying, and corporate interests aren't part of the system.
But you know what else is? Local primaries. Local executive officials (school board, mayor, etc). Visiting your congressperson and framing your issues in a way that speaks to them. Making campaign contributions.
I think it's too easy to nihilistically say "the game is hard, therefore I'm not going to play."
Bullshit. The democracy game is as it has always been (and a helluva lot less corrupt now than in previous centuries). But all that's required for evil to triumph is that good people don't engage.
Regulation (invasive action is general) is for when enough people are really unhappy. Who's unhappy in this instance? The innovators?
The issue with monopolies (e.g. ATT in the Ma Bell days) is not that they're intrinsically evil, but that they're terrible at allowing innovations to reach the market.
These billions in fines are based on % of revenue; so by definition almost every business will be able to absorb the EU's fines; it's this big to be an actual disincentive to an entity that is Google-sized.
Large entities are in many ways actually far easier to regulate than small entities, since you can actually keep track of them and hold them accountable.
> How can these benign, universally loved innovators be stopped from turning into evil, soulless corporate behemoths? Break up companies such as Facebook, Google and Amazon, (...) Or perhaps recognize them as utilities (...) Neither makes sense in most cases.
In fact they advocate for c): Tech giants should be treated as classical business. Amazon like a retailer, Uber like a taxi comp, Airbnb like an hotel brand, …
For Facebook they talk more about the fact if it was treated as a media company they should keep track of who is running ads and follow regulations on political ads.
"These giant tech companies are doing too well, we need to burden them with regulation like utilities (Verizon, AT&T, etc) and that will give competitors a chance."
Let me ask you: are you happier with Apple or with AT&T? Apple? Then why are you trying to give Apple incentives to behave more like AT&T?
The tech giants have locked competitors out of using their technology using government patents. Amazon held a patent on "1-click checkout" from 1997-2017. Google has patented ALL of the good web search algorithms.
https://qz.com/1057490/a-patent-that-helped-amazon-take-over... http://searchengineland.com/google-granted-patent-for-panda-...
We as a society to move past patent regulations, they are artifacts of the industrial revolution and are abused by powerful corporations. Without a team of lawyers, a simple website will be sued out of existance.
Can you think of a better way to fairly incentivize and compensate innovators while solving the problem at hand?
If I had to make a change to software patents right now, I would shorten them to five years. Maybe less.
For example.
1. Google emerged in a market where there were dominate search engines, such as Alta Vista. 2. Facebook emerged in a market where MySpace was dominating. 3. Facebook is disrupting Google.
etc.
I firmly believe that the market is ripe and ready always for new ideas and tech. Are you going to be able to build a better search engine than Google? Probably not because it works well. Google will be disrupted in some other way we haven't considered, maybe AI.
Why do you believe this?
1.) The inherent mediocrity in large bureaucracies. They always turn mediocre. People inherently form factions within corporations and become politicians. This destroys the old culture and creates adverse incentives.
2.) Technology is always evolving at a massive pace. Old infrastructure in a large company becomes a burden, and stifles innovation. Startups are built to seize opportunities with new technology.
3.) Which tech companies that have historically been dominant since the 80s are still dominant? Intel? IBM? AOL? Yahoo? Microsoft (maybe but still somewhat irrelevant). Apple may be the only company, but they are in a different game.
Neither Google or Facebook are innovative. Search is not innovation, for Google efficient, yes. Facebook is timing. The bulk of the hard work in computing is the result of decades of work by academics funded by the public. TCP/IP is the innovation. So market fundamentalists prone to come in when all the hard work is done and see perfect markets everywhere have little ground for complaints about innovation.
You can already see abuse of power in Google and Facebook. Zuckerberg's political ambitions will prevent egregious bad behavior for now but that just underlines the potential for abuse.
There are other issues too. Lobbying, inability to apply anti-competitive laws - amp is a glaring problem, and the wild west situation with tracking and user data, there needs to be some control and constraints here. You need to create a level playing field where disruption becomes possible and problems can be addressed by market forces before they take the field with them.
Googles search beat out lots of other companies. Their search was innovative, their business model was innovative.
Facebook convienced millions (billions?) of people to share their information on the internet. That's not innovative?
You're effectively saying that the person who has the initial idea is the innovator, not that one that brings it to success. I'd argue that if anything it's the successful implementor that's innovative.
What is exactly fraudulent about U.S. political ads placed by foreign customers?
- Comcast
- Verizon
- Time warner cable
- Power and water companies
Tech giants:
- Google
- Facebook
- Microsoft
Do you want your tech companies to be more like your utilities, or your utilities to be more like your tech companies? Personally, i'd very much prefer the latter. Tech companies have monopolies granted by superior user experiences. They are deeply afraid of losing that superiority. Utility companies have government granted monopolies - they fear only changing regulation. Companies align with their incentives. If they do not, they will be replaced by those that do. I'm much more comfortable with a company who's monopoly rests on the back of my happiness, personally.