Microsoft were accused of being a monopoly and abusing it in the US. The case was settled[0] with Microsoft retreating in the browser wars and other things.
There were further cases brought by the EU over media players.
> The proposed settlement required Microsoft to share its application programming interfaces with third-party companies and appoint a panel of three people who will have full access to Microsoft's systems, records, and source code for five years in order to ensure compliance
Are you arguing that this had no effect? What about the effect it had on having to tread more carefully in the future?
The mechanism for breaking up the companies would be new laws. Yes, it's generally considered fair for democratically elected governments to draft legislation regulating companies.
The argument is certainly not attempting to be rational.
If you want to break up Apple due to its economic power, then you have dozens of other corporations to slice into pieces. How? Who knows, some bureacrat with likely zero relevant qualifications will get to decide.
If you take apart Apple, then you have to rip apart:
Berkshire Hathaway, 3M, Johnson & Johnson, Caterpillar, Intel, Oracle, Cisco, nVidia, Netflix, Adobe, Activision Blizzard, Priceline, Exxon, Chevron, Pfizer, Merck, Amgen, AbbVie, Abbott Labs, Gilead, Qualcomm, Broadcom, Lockheed Martin, Visa, JP Morgan, Bank of America, Wells Fargo, Citi, AT&T, Verizon, Comcast, Procter & Gamble, Coca Cola, Pepsi, Kraft Heinz, Walmart, Costco, Home Depot, Lowes, McDonald's, Starbucks, Nike, DowDupont, Disney, Boeing, CVS, Walgreens. I'd add GE to that list, but they've decided to take care of it themselves.
You also reasonably have to start dealing harshly with similarly massive corporations HQ'd outside your jurisdiction, when they attempt to operate within your borders. Whether that's SAP, Toyota, Alibaba, AmBev, etc.
Now, on some of those, without question, a large audience is shaking their head yes. For example, the big banks. There is a large segment that overwhelmingly thinks they need broken up. How do you forcibly break up 3M, Boeing and Home Depot? That's just begging for disaster.
Then after you're done screwing with the economy, you have to pass a law that prevents nearly any acquisitions, so the giants outside your borders don't just scoop up the now weaker smaller entities and so that new giants never get constructed again.
Nitpick: don't conflate conglomerates and other corporations, like BH and Apple. BH owns a lot of smaller companies but themselves don't do much as a holding company, whereas Apple is one big company that does a lot directly.
I'm intentionally including Berkshire, with full awareness of the difference between a conglomerate and eg Apple.
This is about economic power, reach, influence over daily life. Berkshire reaches into daily American life every bit as much as Amazon does. The difference is you don't see a lot of what Berkshire does.
Berkshire's energy position is massive. They operate one of the largest railroads. They operate one of the world's largest insurance businesses (or several of them if you view them seperately). They have huge influential stakes in everything from the largest banks to Coca Cola to Kraft Heinz. They're one of the largest owners of Apple.
I'd argue their influence on daily American life exceeds that of Amazon.
Does a single BH board have direct control over all of that influence on a daily basis, or is it broken up? However wrong many of its arguments are, the piece is arguing from a point of actual exercise of influence, in addition to theoretical holding of influence.
My thoughts are that this is a moot point. They are being anti-competitive and are beginning to be shown to be in courts of law, at least in the <snark> free world </snark>[0][1]. In all seriousness the USA seems to have lost all appetite to pursue anti-trust cases, whereas it seemed rather keen on it in the early-mid 20th century.
Regarding the tax avoidance, I notice Suckerberg and Thiel and their sub-Randian tax free fruitopian ideas. Perhaps we should let them avoid tax, and at the same time deny them the capital and property protecting powers that the state was designed for. No more copyright, patents, no access to courts at all. No criminal protection either, from hackers/DDOSers et al. At the same time if they want to use our state educated employees they can pay a special transfer fee to buy them of the state school system. There has developed a cult of 'I did this whole thing myself', which massively downplays the role society has in allowing the formation of a corporation and providing the protection of property and capital. None of which is free, and why should the regular Joe payroll tax payer pick up the tab?
edit: I feel like I should have expressly mentioned limited-liability. Imagine if the investors in a private equity outfit hat to pick up the tab of all of the start-ups that go bankrupt? That is libertarian
Just because tax-funded services play a role in somebody's success doesn't mean that person morally owes arbitrary amounts of money to the government.
Taxes are proportional to earnings, but the amount of money you cost the government is not. Why should you start paying more just because you were successful?
If you actually wanted to implement "Suckerburg" and Thiel's "fruitopian" ideas, you should charge them a reasonable price based on the services they use, rather than based on how much money they earn.
I suspect they pay substantially more taxes than most of us do.
>Taxes are proportional to earnings, but the amount of money you cost the government is not
You don't think Google places rather more demand on the government than me? For instance I go to court occasionally to collect debts from customers. These are single 10 minute sessions before a judge. Compare this to Oracle Vs Google.
Or we have a fleet of 11 delivery vehicles using the highways that society created, Amazon has hundreds.
We have 100 employees that the state brought up, kept healthy (Yeah I know this is different in the US), educated and delivered to us at 16 ready to work. Google has 74k employees, Amazon has 566k.
Then there is regulation, I am not in a position to abuse the market, these guys are and should pay for the arbitration and oversight that this needs.
> charge them a reasonable price based on the services they use
Yes, a reasonable price, hundreds of millions of dollars every year in every territory where they operate.
Not the OP but one reason to tax by earnings could be to capture unmeasured externalities, like fewer choices in the absence of competition. (Although that example would assume earnings strongly relates to marketshare.)
Because the profits a company makes are a good proxy for the amount they cost the government, because larger companies require much more state intervention. I think I covered that above already.
Turning the question back on you, how would you measure the cost to the government? Per patent, per line of copyrighted material you are protecting? Per mile driven, per minute the regulator had to spend on them? Per employee they take on? Per police call perhaps? Per crime they were a victim of? Per minute the politicians had to spend on them? Per the amount of debt that the government is allowing them to run up, whilst offering limited liability?
That sounds like a pretty expensive return to fill out?
The OECD suggest that one measure of good taxation is it's efficiency. Progressively taxing profits seems to meet that goal. 'Cost to the government' sounds tricky to measure however
I think you may have misunderstood. When the OECD talk of efficiency, they mean a tax that is efficient to collect. It is one of the fundamental principles of taxation in the study of economics.
"Efficiency: Compliance costs to business and administration costs for governments should be minimised as far as possible."
That is a quote from
OECD (2014), "Fundamental principles of taxation", in Addressing the Tax Challenges of the Digital Economy, OECD Publishing, Paris.
This seems like a fair criticism of the post above where something other than a progressive income/profit tax was being suggested.
RE: Marxism
I don't really think you have taken the time to find out who the OECD are. The OECD are the "Organisation for Economic Co-operation and Development". Their role is to spread the market economy, and in particular work on double taxation treaties between countries. The antithesis of Marxism.
> This suggests we should simply invent money as-needed. Destroy it when not-needed.
This is the kind of misunderstanding you get when you model national finance like a household budget. Money is created and destroyed constantly by governments, and even more so by banks. When banks lend money it comes from nowhere. Governments run deficits for years, where they create money that didn't exist before.Taxation is exactly the destruction of money. This is not Marxism, it is economics.
>I don't have any idea how taxes should be based on what you cost
The system is unfair, but better than any other system then?
> punishing success
Is an emotive term, and nonsense. How is it a punishment? I know Zuckerberg looks like he can't afford a suit, but he doesn't seem to be particularly oppressed by the state. In fact he seems to have scrimped and saved $70bn despite the pillaging. How about a different term, 'sharing success with the society that helped create it'?
> For me personally, it's quite clear that in years where I make more money and therefore pay more taxes, I haven't cost the government any more.
And your business operations come at no cost to society, and don't use any of the benefits society created? Could it be the inverse is true, in the years where you were less profitable the government reduced your tax burden below your actual cost to nurture and encourage your enterprise? And later you earned more and paid something back towards it?
I see a dangerously double-edged argument. To base the deriving of society’s expenses per a person on that person’s earnings is odd. Especially if you limit your view to the 99% of population who are either just normal employees, or their dependents, or even welfare receivers of some kind. If I am making 50% more in my 30s than I did in my 20s - do I really cost more? In my 70s I would likely make nothing, except the pension, but my healthcare bills would grow.
So taking your point to extreme - should my “taxes” (on what?) be the highest in my 70s?
Does that mean a society where we have the disabled and sick pay extra? And those who have children and attend school services should also potentially pay extra? And those who are rural should also pay extra?
> At the same time if they want to use our state educated employees they can pay a special transfer fee to buy them of the state school system.
You may not have known this, but those people aren't owned by the state. They can't be sold. Or are you advocating for something else...? Maybe you think it's better than libertarianism?
You should use your words in a better way if you'd like to convey why these companies should have to "buy" "employees" who were educated by the state. You should also explain how these companies are more special than others and why they in particular need to pay. You should also explain how they should pay in some way meaningfully different from the taxes we already pay.
But mostly, I am curious about what you actually mean about buying students. I'm not being obtuse, I don't understand what you meant because I'm sure you're not really advocating what it sounds like.
Apple and Amazon are fundamentally different from Google and Facebook and shouldn’t even be mentioned together. The former want to sell you real products and services, the latter just want to trick you out of your personal data so they can sell it on.
Except Google also sell products that compete with Amazon and are seeking to restrict access to certain mainstream services from Amazon products! It's worse than you thought!
"Fair" should not even be on the vocabulary when talking about what we should do to companies. Companies aren't people. What we do to them is secondary to whatever we do to actual people.
Now, how a split would affect the people involved, that's another story. But if you weight the number of people in those companies, versus the number of people they affect worldwide, well… the moral weight of the company is a rounding error. The only thing that really counts is how stuff like a split would affect the rest of the world. And if it means putting those four companies out of business, well, tough luck. The greater good must prevail. And even then, there are ways to compensate for the subsequent spike in unemployment.
A corporation is not a group of people, it is a body in itself. This is fundamental to the concept of a corporation.
We can consider the rights of the various stakeholders of the company, consumers, shareholders, employees, neighbours and suppliers. But the idea that the corporation itself has anything equivalent to human rights is very distasteful.
The idea of corporate personhood is a thing in US law at least, but it is the idea that the corporation is a person, not that it is a group of people.
I don't agree with the idea that any type of company is a body in itself, or that it should be considered a person under law. It's a group of people who work together to achieve common goals.
The concept of rights doesn't even apply, in the same way that "society" doesn't have rights. Individuals have rights. Taking money from a company means taking money from the people who own it. It doesn't exist apart from them. Making it seem so just makes it easier to violate the rights of the individuals involved.
You most certainly heard about a thing called "law". In short, it's a paper that limits actions of everyone, including the government, to some known safe subset.
Arbitrarily breaking the law, that is, limiting the so-called "rights" of people, is considered bad, that very law prohibits it. You cannot just go and prevent somebody from doing a thing not prohibited by the law, such as carrying an iPhone, because suddenly you realize that you need to grab the iPhone and split it to pieces to make the world as a whole a better place.
Same applies to other properties, like companies. Unless owners of these are breaking the law, you can't grab and split their companies, because you consider it a greater good.
Of course, there were numerous examples when people ignored law and did arbitrary things, because "revolutionary conscience", "divine right of kings", or just plain having a gun as an argument. While merits of these options can be discussed, they all are incompatible with "rule of law", let alone "democracy", that many hood dear and consider the very soil on which the economic prosperity has grown. (We have most of Africa and Central Asia as a control group.)
All true, but please allow for the fact that certain kinds of market practices are against the law in certain jurisdictions and some of the companies mentioned have already been found guilty of these.
The process of changing laws is usually relatively slow, and involves discussing various consequences the change may have. I just wish this process was applied in the case.
The government, in the US at least, is more powerful in matters of life and death, i.e. militarily. That doesn't make it right or fair to use that power. Not even the democratic will of the people makes it fair to simply break up a company.
Why is it fair or unfair to break up these companies? The government should be powerful isn't a reason.
I'll start: it's not protecting the consumer from monopoly prices. Google and Facebook don't charge the primary "consumer" anything, and ads are cheap. Amazon has competition (Walmart, Target). Apple has competition.
What might be fair is using the democratic will of the people (although this is really just something done by representatives who can be influenced and don't always act on our will) to pass laws specifying behavior of these companies as illegal. Actual behavior, things like collecting gigabytes of personal data per individual to target ads, not things like "having too much money." The companies are not outright destroyed if they can find a way to make money without leaning on that behavior.
Except for the notion of inalienable individual rights. One of the hallmarks of the US form of democracy is that government is NOT the greatest power. Its power is limited and must protect the individual rights of its constituents (people and states in some contexts).
I wonder if that's why Alphabet was created. Did Google see this coming and broke up itself and its other companies into smaller pieces to be ruled by Alphabet.
I'm not sure what US law considers when breaking up companies. I recall AT&T being broken up but did it have any control over the new companies?
If the four companies get too big and cause problems (tax avoidance) yes break them up. But if not I'd say leave them as is.
? is google that much more of a hoarder of billions and harmer of the public good than ExxonMobil and BP ?
hmmm
> You could merge the world’s top five advertising agencies (WPP, Omnicom, Publicis, IPG, and Dentsu) with five major media companies (Disney, Time Warner, 21st Century Fox, CBS, and Viacom) and still need to add five major communications companies (AT&T, Verizon, Comcast, Charter, and Dish) to get only 90 percent of what Google and Facebook are worth together.
It's political. Liberals are generally suspicious of large companies, but are used to getting nowhere in fighting them. The conservative agenda has been controlled by big companies for a long time.
(This is the black-and-white version. I know it is inaccurate and oversimplified! Obviously the true story is more complicated.)
But these tech companies are big companies that are liberal to an unheard-of extent. So when a few liberals target them, the usual opposition is strangely missing.
> In many cases, there's no choice, unless you're willing to accept a certain level of inconvenience, or a monetary cost.
Yes, choices come with tradeoffs, that doesn't mean you don't have a choice. The big 4 are successful because they are incredibly convenient and good at what they provide.
> Need to stay in contact with a diverse and spread out group of friends, without manual mailing lists? Facebook is your choice.
What was your choice before Facebook?
> It is borderline impossible to live a reasonably connected life today, without at least one of the big four, and probably most of them.
If you're willing to use an AOSP phone it seems like it is pretty easy to avoid using the big 4. Don't buy things on Amazon, use DDG or another search engine, use another email provider, don't buy Apple products, don't use Facebook.
Sure, it is inconvenient to not use those things, but that's because they are the best at providing what they provide. If they weren't you would already be using something else.
They were already too big 5 to 10 years ago, and thus bought their way into continuing to be the best at providing what the provide (subsuming smaller innovative companies and arguably leaving us worse off than we would have been had they been left to innovate independently). Many of the market leaders cited in the piece were already market leaders when they were bought by these 4 (I'd add MS to the list).
The USA now evaluates monopolies based on just one thing: their ability to control and manipulate prices charged to to household customers. Using market power to raise prices to household customers, the way Enron did to California electricy users, is against public policy.
The anti-trust dismantling of the tech behemoths advocated by this author cannot happen unless public policy changes so it also discourages monopsonmies. https://en.wikipedia.org/wiki/Monopsony In other words, companies like Amazon and Walmart don't increase prices to their customers. Instead, they have power to decrease their payments to suppliers. But that's not against current US public policy.
Also, I wonder about the wisdom of using market cap as a measure of a business's size. That's a peculiarly sili-valley way of measuring things, and can be very inflated. Take Uber. It's a pirate (informal) cab company with an excellent app. It loses money every year. Most cab companies would run out of gas if they did that. But not Uber.
It may be better to measure company size by revenue or even, gasp, by size of payroll or by profit.
And, the word "firm," used by this author, is jargon from the academic field of economics. It's a tell about theoretical vs. real-world advice.
The ONLY way that Amazon even GOT a fucking monopoly in the first place, was the absolutely fucking retarded ruling that awarded them a patent on "one-click shopping".
Standard Oil, Ford, GM and US Steel to name four, dominated American life as much or greater than today's giants. Standard Oil essentially ruled the US economy, literally, for a few decades at its peak. Today's tech giants are comically weak compared to that sort of power and direct control over the economy.
Amazon in no way is dominating American life. Their retail sales are a third that of Walmart. They have lively competition in cloud computing, Microsoft is actively taking market share from them there, and Google is intent on competing aggressively (they can both afford to and have the technical chops to do it). If Amazon is lucky, one day they'll grow up to be as powerful in retail as Walmart was at its peak of dominance ~10 years ago.
Facebook is losing users in the US and that trend is almost guaranteed to continue. Competitors with appealing products will slowly siphon off users, new and old. Such platforms universally have an ebb and flow to them, they do not maintain peak power perpetually.
Google search is quite a bit less important than it was six or seven years ago. Their economic power is still slightly rising, their search product power is slowly fading. Microsoft knows that feeling, re Windows.
Apple? That one is almost pure bullshit. They've botched the home AI gadget competition. Siri is a mess. iTunes + iPod has lost its quasi monopoly. They have no dominant position in traditional computers. The iPhone is a juggernaut - so what. So is Boeing in airplanes and McDonalds in mediocre low priced hamburgers and Starbucks in coffee.
Those who don't know history are doomed to repeat it. It kind of makes you wonder why the subject is made so damned boring in school when it would take little effort to make it very exciting indeed.
I can, (and usually do) quite easily get by without Microsoft, Intel, Amazon, and Apple. I'd love it if everyone dumped FaceBook. Google would be more difficult, but not impossible. Part of what keeps these companies going is the inertia and "friends" factors, but much of it is that people like how well they work. They have to keep in mind that they're one good competitor away from having a serious chunk of their business taken .... assuming they don't just buy out the competitor.
Do they now? Out of these four the only one I really use daily is Google, followed by Amazon.
Apple doesn't have the highest market share in any category. Samsung for example, even if they're not quite there in terms of net income due to lower margins, is a much larger company. Actually there are plenty of companies who are both larger and wield considerably more power/influence.
Facebook is pretty much a dead man walking in my social circles. The last time I opened Facebook, it was to change my relationship status roughly a month ago. I don't know why I even bothered.
People have no problem with migrating to another social network. It happened plenty of times in various countries (from and to facebook), and it will happen again.
Saying that these companies "dominate" (i.e. control) our daily lives is laughable.
Most are hardly more than a tool. I am not dominated by my screwdriver just because I use it daily.
You seemed to be arguing that Apple were in no position to be a monopoly. I was showing that they have had the market position to have been included in some monopoly investigations already, and in that other part of the article have engaged in tax avoidance where they made an illegal sweetheart agreement with a nation state. I am suggesting that they have rather more dominance than you were making out.
Now a potential merger is being investigated by competition authorities which supports the article and directly contradicts your comment. Nice brush of though?
You’ve got the causality pretty far out of whack on Qualcomm -> Apple, it seems to me.
Apple has been trying to escape from Qualcomm’s non-FRAND licensing terms for a long time, so pointing to a deal Apple didn’t want and saying that was Apple’s doing seems pretty far fetched.
It's difficult to say, Apple did benefit from billions of dollars in rebates. However it is also true that years latter Apple did launch legal action to get out of the deal.
Perhaps it benefited in the beginning, but by 2016 felt it had enough market clout to get a better deal with Intel?
> You’ve got the causality pretty far out of whack on Qualcomm -> Apple, it seems to me.
I did say that the regulator found it was Qualcomm that were legally at fault. I don't think I was that far out of whack? Apple did however sign up to and benefit from the deal. The wronged parties were other chip manufacturers. I still think that leaves a moral question hanging over Apple
I interpreted your “which was the supplier’s fault, of course” as sarcasm, from using the same phrase for Ireland. Poe’s law strikes! If in fact you weren’t being sarcastic, then I apologize.
It’s true that Apple benefitted cost-wise, but note that this deal was generally available (in direction, if not magnitude) to most of Qualcomm’s customers, so I was more making the point that Apple wasn’t particularly special in taking the best deal on offer; they’re more unusual in fighting against Qualcomm.
No I apologise, I think I was being at least half sarcastic.
I fully recognize that Apple didn't legally do anything wrong by taking Qualcomm up on a deal which was clearly in breach of competition rules for Qualcomm to offer.
However it could only be market abuse due to Apple's size and dominance in the phone/tablet field, and it is also true to say that Apple would have known that the deal they were being offered was unlawful. If they had offered this deal to my kickstarter single board computer project it would have been insignificant. Apple do not have clean hands in this.
>they’re more unusual in fighting against Qualcomm.
Yes, but didn't this begin in an argument over the size of the rebate they were due? I may be wrong in supposing it was a primary factor. Either way this is after they benefited for some years.
I feel like we are agreeing, but emphasizing different areas?
There are a lot of cases regarding Qualcomm's licensing scheme, but the 'fighting qualcomm' came first.
In 2015, the Korean FTC launched an antitrust suit against Qualcomm & Apple testified in it.
Qualcomm said that Apple mislead & withheld information from the KFTC. They've also stated that this breeches the terms of their licensing agreement, and Qualcomm hasn't given Apple any rebates since.
Apple disagrees, and in January 2016, they sued Qualcomm over it. Put simply, their argument was that they were owed all the withheld rebates, because they hadn't broken Qualcomm's terms. The anti-trust implications of the license were mentioned, but weren't really the point.
The broader anti-trust suit in the US was brought by the FTC just a couple of days prior, so a lot of news blended the two together. Apple, provided information in the FTC's case, and Qualcomm has sued Apple over that too.
> I am not dominated by my screwdriver just because I use it daily.
That's because a third party cannot pay money to bump you and your demographic on the heads with the screwdriver.
Hm... it's a bit worse than that because the third party is showing you ads on the screwdriver, and your demographic has no idea how a screwdriver actually works in the first place. (In fact even the people at Free Screwdriver Foundation can only speculate how an ad-based screwdriver network with billions of users works in practice.)
Given such a tool, what is the likelihood that your demographic is screwing something you chose vs. screwing something the third party chose? Keep in mind the third party isn't acting arbitrarily but instead based on a rich set of data about your pre-existing predilections, frustrations, party affiliation, geographical location, plus your favorite materials to screw together.
> Actually there are plenty of companies who are both larger and wield considerably more power/influence [than Apple].
Apple has had the greatest market capitalization of any publicly traded company for the past five years (with a few short exceptional periods yielding to Exxon Mobil or Alphabet).
> Well, yes and no. The Four have so much power over our lives that most of us would be rocked to the core if one or more of them were to disappear. Imagine not being able to have an iPhone, or having to use Yahoo or Bing for search, or losing years’ worth of memories you’ve posted on Facebook. What if you could no longer order something with one click on the Amazon app and have it arrive tomorrow?
83 comments
[ 3.5 ms ] story [ 154 ms ] thread[1] https://www.seattletimes.com/seattle-news/qa-honking-can-be-...
If the companies are not being anti competitive is it fair for a Government to break up private enterprise that is not breaking the law?
I feel that it's going too far allowing Government to split apart corporations acting legally just for being successful.
What are your thoughts?
Illegal anti-competitive practices? Have we forgotten about Microsoft already?
Fuck if I know, I'm not a Federal prosecutor.
Point is, it's not hard to draw a line between legal history (United States vs. Microsoft) and various software giants and their practices.
We've got a collective short-memory.
There were further cases brought by the EU over media players.
https://en.wikipedia.org/wiki/United_States_v._Microsoft
Heck, they are opening up for years by themselves now.
> The proposed settlement required Microsoft to share its application programming interfaces with third-party companies and appoint a panel of three people who will have full access to Microsoft's systems, records, and source code for five years in order to ensure compliance
Are you arguing that this had no effect? What about the effect it had on having to tread more carefully in the future?
Threading more carefully : you may have a point there.
Please explain how those measures have cost them money or market share.
If you want to break up Apple due to its economic power, then you have dozens of other corporations to slice into pieces. How? Who knows, some bureacrat with likely zero relevant qualifications will get to decide.
If you take apart Apple, then you have to rip apart:
Berkshire Hathaway, 3M, Johnson & Johnson, Caterpillar, Intel, Oracle, Cisco, nVidia, Netflix, Adobe, Activision Blizzard, Priceline, Exxon, Chevron, Pfizer, Merck, Amgen, AbbVie, Abbott Labs, Gilead, Qualcomm, Broadcom, Lockheed Martin, Visa, JP Morgan, Bank of America, Wells Fargo, Citi, AT&T, Verizon, Comcast, Procter & Gamble, Coca Cola, Pepsi, Kraft Heinz, Walmart, Costco, Home Depot, Lowes, McDonald's, Starbucks, Nike, DowDupont, Disney, Boeing, CVS, Walgreens. I'd add GE to that list, but they've decided to take care of it themselves.
You also reasonably have to start dealing harshly with similarly massive corporations HQ'd outside your jurisdiction, when they attempt to operate within your borders. Whether that's SAP, Toyota, Alibaba, AmBev, etc.
Now, on some of those, without question, a large audience is shaking their head yes. For example, the big banks. There is a large segment that overwhelmingly thinks they need broken up. How do you forcibly break up 3M, Boeing and Home Depot? That's just begging for disaster.
Then after you're done screwing with the economy, you have to pass a law that prevents nearly any acquisitions, so the giants outside your borders don't just scoop up the now weaker smaller entities and so that new giants never get constructed again.
Good luck.
This is about economic power, reach, influence over daily life. Berkshire reaches into daily American life every bit as much as Amazon does. The difference is you don't see a lot of what Berkshire does.
Berkshire's energy position is massive. They operate one of the largest railroads. They operate one of the world's largest insurance businesses (or several of them if you view them seperately). They have huge influential stakes in everything from the largest banks to Coca Cola to Kraft Heinz. They're one of the largest owners of Apple.
I'd argue their influence on daily American life exceeds that of Amazon.
Regarding the tax avoidance, I notice Suckerberg and Thiel and their sub-Randian tax free fruitopian ideas. Perhaps we should let them avoid tax, and at the same time deny them the capital and property protecting powers that the state was designed for. No more copyright, patents, no access to courts at all. No criminal protection either, from hackers/DDOSers et al. At the same time if they want to use our state educated employees they can pay a special transfer fee to buy them of the state school system. There has developed a cult of 'I did this whole thing myself', which massively downplays the role society has in allowing the formation of a corporation and providing the protection of property and capital. None of which is free, and why should the regular Joe payroll tax payer pick up the tab?
[0]https://www.theguardian.com/business/2017/jun/27/google-brac... [1]http://www.techradar.com/news/new-standards-for-the-indian-o...
edit: I feel like I should have expressly mentioned limited-liability. Imagine if the investors in a private equity outfit hat to pick up the tab of all of the start-ups that go bankrupt? That is libertarian
Taxes are proportional to earnings, but the amount of money you cost the government is not. Why should you start paying more just because you were successful?
If you actually wanted to implement "Suckerburg" and Thiel's "fruitopian" ideas, you should charge them a reasonable price based on the services they use, rather than based on how much money they earn.
I suspect they pay substantially more taxes than most of us do.
No proportional amounts of money
>Taxes are proportional to earnings, but the amount of money you cost the government is not
You don't think Google places rather more demand on the government than me? For instance I go to court occasionally to collect debts from customers. These are single 10 minute sessions before a judge. Compare this to Oracle Vs Google.
Or we have a fleet of 11 delivery vehicles using the highways that society created, Amazon has hundreds.
We have 100 employees that the state brought up, kept healthy (Yeah I know this is different in the US), educated and delivered to us at 16 ready to work. Google has 74k employees, Amazon has 566k.
Then there is regulation, I am not in a position to abuse the market, these guys are and should pay for the arbitration and oversight that this needs.
> charge them a reasonable price based on the services they use
Yes, a reasonable price, hundreds of millions of dollars every year in every territory where they operate.
Turning the question back on you, how would you measure the cost to the government? Per patent, per line of copyrighted material you are protecting? Per mile driven, per minute the regulator had to spend on them? Per employee they take on? Per police call perhaps? Per crime they were a victim of? Per minute the politicians had to spend on them? Per the amount of debt that the government is allowing them to run up, whilst offering limited liability?
That sounds like a pretty expensive return to fill out?
This suggests we should not tax at all. This suggests we should simply invent money as-needed. Destroy it when not-needed.
Some call that "Marxism".
"Efficiency: Compliance costs to business and administration costs for governments should be minimised as far as possible."
That is a quote from
OECD (2014), "Fundamental principles of taxation", in Addressing the Tax Challenges of the Digital Economy, OECD Publishing, Paris.
This seems like a fair criticism of the post above where something other than a progressive income/profit tax was being suggested.
RE: Marxism
I don't really think you have taken the time to find out who the OECD are. The OECD are the "Organisation for Economic Co-operation and Development". Their role is to spread the market economy, and in particular work on double taxation treaties between countries. The antithesis of Marxism.
> This suggests we should simply invent money as-needed. Destroy it when not-needed.
This is the kind of misunderstanding you get when you model national finance like a household budget. Money is created and destroyed constantly by governments, and even more so by banks. When banks lend money it comes from nowhere. Governments run deficits for years, where they create money that didn't exist before.Taxation is exactly the destruction of money. This is not Marxism, it is economics.
For me personally, it's quite clear that in years where I make more money and therefore pay more taxes, I haven't cost the government any more.
The system is unfair, but better than any other system then?
> punishing success
Is an emotive term, and nonsense. How is it a punishment? I know Zuckerberg looks like he can't afford a suit, but he doesn't seem to be particularly oppressed by the state. In fact he seems to have scrimped and saved $70bn despite the pillaging. How about a different term, 'sharing success with the society that helped create it'?
> For me personally, it's quite clear that in years where I make more money and therefore pay more taxes, I haven't cost the government any more.
And your business operations come at no cost to society, and don't use any of the benefits society created? Could it be the inverse is true, in the years where you were less profitable the government reduced your tax burden below your actual cost to nurture and encourage your enterprise? And later you earned more and paid something back towards it?
So taking your point to extreme - should my “taxes” (on what?) be the highest in my 70s?
You may not have known this, but those people aren't owned by the state. They can't be sold. Or are you advocating for something else...? Maybe you think it's better than libertarianism?
But mostly, I am curious about what you actually mean about buying students. I'm not being obtuse, I don't understand what you meant because I'm sure you're not really advocating what it sounds like.
Apple and Amazon are fundamentally different from Google and Facebook and shouldn’t even be mentioned together. The former want to sell you real products and services, the latter just want to trick you out of your personal data so they can sell it on.
https://mashable.com/2017/09/27/amazon-echo-show-youtube-acc...
Now, how a split would affect the people involved, that's another story. But if you weight the number of people in those companies, versus the number of people they affect worldwide, well… the moral weight of the company is a rounding error. The only thing that really counts is how stuff like a split would affect the rest of the world. And if it means putting those four companies out of business, well, tough luck. The greater good must prevail. And even then, there are ways to compensate for the subsequent spike in unemployment.
We can consider the rights of the various stakeholders of the company, consumers, shareholders, employees, neighbours and suppliers. But the idea that the corporation itself has anything equivalent to human rights is very distasteful.
The idea of corporate personhood is a thing in US law at least, but it is the idea that the corporation is a person, not that it is a group of people.
The concept of rights doesn't even apply, in the same way that "society" doesn't have rights. Individuals have rights. Taking money from a company means taking money from the people who own it. It doesn't exist apart from them. Making it seem so just makes it easier to violate the rights of the individuals involved.
To me, it's as ridiculous as things like this https://en.wikipedia.org/wiki/United_States_v._$124,700_in_U...
Arbitrarily breaking the law, that is, limiting the so-called "rights" of people, is considered bad, that very law prohibits it. You cannot just go and prevent somebody from doing a thing not prohibited by the law, such as carrying an iPhone, because suddenly you realize that you need to grab the iPhone and split it to pieces to make the world as a whole a better place.
Same applies to other properties, like companies. Unless owners of these are breaking the law, you can't grab and split their companies, because you consider it a greater good.
Of course, there were numerous examples when people ignored law and did arbitrary things, because "revolutionary conscience", "divine right of kings", or just plain having a gun as an argument. While merits of these options can be discussed, they all are incompatible with "rule of law", let alone "democracy", that many hood dear and consider the very soil on which the economic prosperity has grown. (We have most of Africa and Central Asia as a control group.)
Also allow that laws may be changed.
The process of changing laws is usually relatively slow, and involves discussing various consequences the change may have. I just wish this process was applied in the case.
…is a separate notion from fairness. Looks like you've read way too much in my comment.
Incidentally, laws can lawfully be changed.
Why is it fair or unfair to break up these companies? The government should be powerful isn't a reason.
I'll start: it's not protecting the consumer from monopoly prices. Google and Facebook don't charge the primary "consumer" anything, and ads are cheap. Amazon has competition (Walmart, Target). Apple has competition.
What might be fair is using the democratic will of the people (although this is really just something done by representatives who can be influenced and don't always act on our will) to pass laws specifying behavior of these companies as illegal. Actual behavior, things like collecting gigabytes of personal data per individual to target ads, not things like "having too much money." The companies are not outright destroyed if they can find a way to make money without leaning on that behavior.
I'm not sure what US law considers when breaking up companies. I recall AT&T being broken up but did it have any control over the new companies?
If the four companies get too big and cause problems (tax avoidance) yes break them up. But if not I'd say leave them as is.
Tech is too big, OK. but why not:
* oil
* finance
* media
? is google that much more of a hoarder of billions and harmer of the public good than ExxonMobil and BP ?
hmmm
> You could merge the world’s top five advertising agencies (WPP, Omnicom, Publicis, IPG, and Dentsu) with five major media companies (Disney, Time Warner, 21st Century Fox, CBS, and Viacom) and still need to add five major communications companies (AT&T, Verizon, Comcast, Charter, and Dish) to get only 90 percent of what Google and Facebook are worth together.
well that's a Thing, I guess
(This is the black-and-white version. I know it is inaccurate and oversimplified! Obviously the true story is more complicated.)
But these tech companies are big companies that are liberal to an unheard-of extent. So when a few liberals target them, the usual opposition is strangely missing.
More regulation means more government power. They are more powerful then all the tech companies you listed.
Why give them more power?
Need a phone that is reasonably modern? Google or Apple, that's your choice.
Need to stay in contact with a diverse and spread out group of friends, without manual mailing lists? Facebook is your choice.
Sure there is actually a cost, but it is invisible to most people.
It is borderline impossible to live a reasonably connected life today, without at least one of the big four, and probably most of them.
Big companies basically own the US government.
Yes, choices come with tradeoffs, that doesn't mean you don't have a choice. The big 4 are successful because they are incredibly convenient and good at what they provide.
> Need to stay in contact with a diverse and spread out group of friends, without manual mailing lists? Facebook is your choice.
What was your choice before Facebook?
> It is borderline impossible to live a reasonably connected life today, without at least one of the big four, and probably most of them.
If you're willing to use an AOSP phone it seems like it is pretty easy to avoid using the big 4. Don't buy things on Amazon, use DDG or another search engine, use another email provider, don't buy Apple products, don't use Facebook.
Sure, it is inconvenient to not use those things, but that's because they are the best at providing what they provide. If they weren't you would already be using something else.
The anti-trust dismantling of the tech behemoths advocated by this author cannot happen unless public policy changes so it also discourages monopsonmies. https://en.wikipedia.org/wiki/Monopsony In other words, companies like Amazon and Walmart don't increase prices to their customers. Instead, they have power to decrease their payments to suppliers. But that's not against current US public policy.
Also, I wonder about the wisdom of using market cap as a measure of a business's size. That's a peculiarly sili-valley way of measuring things, and can be very inflated. Take Uber. It's a pirate (informal) cab company with an excellent app. It loses money every year. Most cab companies would run out of gas if they did that. But not Uber.
It may be better to measure company size by revenue or even, gasp, by size of payroll or by profit.
And, the word "firm," used by this author, is jargon from the academic field of economics. It's a tell about theoretical vs. real-world advice.
The ONLY way that Amazon even GOT a fucking monopoly in the first place, was the absolutely fucking retarded ruling that awarded them a patent on "one-click shopping".
Standard Oil, Ford, GM and US Steel to name four, dominated American life as much or greater than today's giants. Standard Oil essentially ruled the US economy, literally, for a few decades at its peak. Today's tech giants are comically weak compared to that sort of power and direct control over the economy.
Amazon in no way is dominating American life. Their retail sales are a third that of Walmart. They have lively competition in cloud computing, Microsoft is actively taking market share from them there, and Google is intent on competing aggressively (they can both afford to and have the technical chops to do it). If Amazon is lucky, one day they'll grow up to be as powerful in retail as Walmart was at its peak of dominance ~10 years ago.
Facebook is losing users in the US and that trend is almost guaranteed to continue. Competitors with appealing products will slowly siphon off users, new and old. Such platforms universally have an ebb and flow to them, they do not maintain peak power perpetually.
Google search is quite a bit less important than it was six or seven years ago. Their economic power is still slightly rising, their search product power is slowly fading. Microsoft knows that feeling, re Windows.
Apple? That one is almost pure bullshit. They've botched the home AI gadget competition. Siri is a mess. iTunes + iPod has lost its quasi monopoly. They have no dominant position in traditional computers. The iPhone is a juggernaut - so what. So is Boeing in airplanes and McDonalds in mediocre low priced hamburgers and Starbucks in coffee.
Apple doesn't have the highest market share in any category. Samsung for example, even if they're not quite there in terms of net income due to lower margins, is a much larger company. Actually there are plenty of companies who are both larger and wield considerably more power/influence.
Facebook is pretty much a dead man walking in my social circles. The last time I opened Facebook, it was to change my relationship status roughly a month ago. I don't know why I even bothered. People have no problem with migrating to another social network. It happened plenty of times in various countries (from and to facebook), and it will happen again.
Saying that these companies "dominate" (i.e. control) our daily lives is laughable. Most are hardly more than a tool. I am not dominated by my screwdriver just because I use it daily.
Even if it has some advertising on it.
Apple had illegal tax arrangements in the Republic of Ireland[1], which was Irelands fault of course.
Apple may just have too much clout in the music biz[2]. This one is on them
[0] https://www.bloomberg.com/news/articles/2018-01-24/qualcomm-...
[1]http://europa.eu/rapid/press-release_IP-16-2923_en.htm
[2]http://www.cityam.com/280169/eu-warns-apples-bid-shazam-coul...
Now a potential merger is being investigated by competition authorities which supports the article and directly contradicts your comment. Nice brush of though?
My anecdotes largely match your anecdotes though :)
Apple has been trying to escape from Qualcomm’s non-FRAND licensing terms for a long time, so pointing to a deal Apple didn’t want and saying that was Apple’s doing seems pretty far fetched.
Perhaps it benefited in the beginning, but by 2016 felt it had enough market clout to get a better deal with Intel?
> You’ve got the causality pretty far out of whack on Qualcomm -> Apple, it seems to me.
I did say that the regulator found it was Qualcomm that were legally at fault. I don't think I was that far out of whack? Apple did however sign up to and benefit from the deal. The wronged parties were other chip manufacturers. I still think that leaves a moral question hanging over Apple
It’s true that Apple benefitted cost-wise, but note that this deal was generally available (in direction, if not magnitude) to most of Qualcomm’s customers, so I was more making the point that Apple wasn’t particularly special in taking the best deal on offer; they’re more unusual in fighting against Qualcomm.
I fully recognize that Apple didn't legally do anything wrong by taking Qualcomm up on a deal which was clearly in breach of competition rules for Qualcomm to offer.
However it could only be market abuse due to Apple's size and dominance in the phone/tablet field, and it is also true to say that Apple would have known that the deal they were being offered was unlawful. If they had offered this deal to my kickstarter single board computer project it would have been insignificant. Apple do not have clean hands in this.
>they’re more unusual in fighting against Qualcomm.
Yes, but didn't this begin in an argument over the size of the rebate they were due? I may be wrong in supposing it was a primary factor. Either way this is after they benefited for some years.
I feel like we are agreeing, but emphasizing different areas?
In 2015, the Korean FTC launched an antitrust suit against Qualcomm & Apple testified in it.
Qualcomm said that Apple mislead & withheld information from the KFTC. They've also stated that this breeches the terms of their licensing agreement, and Qualcomm hasn't given Apple any rebates since.
Apple disagrees, and in January 2016, they sued Qualcomm over it. Put simply, their argument was that they were owed all the withheld rebates, because they hadn't broken Qualcomm's terms. The anti-trust implications of the license were mentioned, but weren't really the point.
The broader anti-trust suit in the US was brought by the FTC just a couple of days prior, so a lot of news blended the two together. Apple, provided information in the FTC's case, and Qualcomm has sued Apple over that too.
That's because a third party cannot pay money to bump you and your demographic on the heads with the screwdriver.
Hm... it's a bit worse than that because the third party is showing you ads on the screwdriver, and your demographic has no idea how a screwdriver actually works in the first place. (In fact even the people at Free Screwdriver Foundation can only speculate how an ad-based screwdriver network with billions of users works in practice.)
Given such a tool, what is the likelihood that your demographic is screwing something you chose vs. screwing something the third party chose? Keep in mind the third party isn't acting arbitrarily but instead based on a rich set of data about your pre-existing predilections, frustrations, party affiliation, geographical location, plus your favorite materials to screw together.
False. They do still have the largest market share in tablets and just lost first place in phones to Samsung.
> Out of these four the only one I really use daily is Google, followed by Amazon.
> Facebook is pretty much a dead man walking in my social circles.
Your whole post is anecdotal and further proves you're writing from your bubble's POV.
Apple has had the greatest market capitalization of any publicly traded company for the past five years (with a few short exceptional periods yielding to Exxon Mobil or Alphabet).
Uh.. I'd survive.