This article was enlightening in summarizing all the Antitrust activity recently. What I was looking for, but didn't find in the article, is why the FTC has woken up against Big Tech, after 25 years of silence following the Microsoft case.
Whether its friends, family, or every online community I experience, there seems to be a politically impactful grassroots flip in favor of anti-big tech action for many reasons:
1. Normal daily life increasingly happens through gates controlled by a handful of firms.
2. We all noticed when several of these firms crossed from "free" and "wonderful" to enshitiffied services. E.g. Google, Amazon, etc.
3. A general disgust with big tech's handling of social media in terms of user manipulation, and privacy abuses. And disgust with a perception of unhelpful behavior and lack of transparency or responsibility by social media's famous leaders.
4. General feeling that big tech is shafting little people, whether it's social media, physical world gig work, heavily taxing or not paying creators on their sites or in apps, etc.
5. People dealing with big tech mismanagement of their accounts, with great frustration and even fear.
(I almost lost my home when more than one financial firm suddenly decided that having a non-driver's ID after a move somehow made me more risky? Or a good target to demonstrate they are weeding out risky people?I will never know the reasons, and their unexplained decisions are unappealable. A month of hell. Banned for life, without recourse, apparently.)
6. The amount of frivolous and disturbing news that is generated by the tech billionaire class, emphasizing vast inequalities in resources and quality of public behavior between regular people and the super rich.
I don't imagine its just me that has experienced a surge of complaints like these in their techie and non-techie circles.
I think the relative unity behind these negative perspectives comes from them being based in everyone's practical lives, as apposed to having indirect, abstract, tribal or ideological bases.
I'll add another thing someone pointed out. The difference between General Motors circa 1955 and Google circa 2020.
General Motors indirect economic effects were huge and larger than the company itself. Lots and lots of businesses and people were employed indirectly.
Google, nothing, bupkis, they're totally extractive on the rest of the economy. Most of the towns and cities in the US google doesn't employ anyone directly or indirectly. And the places they do they distort the economy in bad ways.
Along those lines, it is interesting that as much as “evil” Microsoft dominated computing and leveraged their power in the 90’s, they still provided a very open (in terms of building on) platform for an enormous number of third parties.
Now Apple manages an enormous platform re iOS apps, but it is not open technologically or economically.
Apple and Microsoft have a very different market share. Windows has something around 85-90% desktop/laptop market share. So you can make a very good argument that they have a functional monopoly over the desktop OS market.
Contrast this with Apple, they have around 10% desktop/laptop market share and around 50% of the smartphone market share. Here you could only argue that they have a duopoly with google on the smartphone OS market.
Microsoft had to open up the platform or they would have gotten destroyed by antitrust laws there and then. They had to let other developers deploy on their OS and support them because if they failed the government would have gotten involved and forced them. So smartly they decided let us no destroy the nice thing we have and play as nice as we have to to keep our profits and our market share. And they mostly succeeded in that regard.
The duopoly difference is real. But either side of a duopoly in a critical global market has tremendous power.
Very hard, often impossible, to be competitive in mobile software if you don’t support iOS.
Microsoft didn’t optimize Windows for third party developers because of legal action.
Supporting third party developer innovation was the foundational Microsoft strategy, long before and after they got into operating systems.
The legal issue was using their platform’s defaults and product bundling to kill the opportunities and economics for potentially competitive platforms (Netscape, the web as an OS platform replacement).
I disagree. Google offers a cheap and effective way of advertising, making it possible for smb’s in rural areas to have a global reach. That’s not nothing.
In some cases yes. In a lot of cases no. Take barbers for instance. Acquiring new customers used to be somewhat "automatic" and organic through Google. You'd set up a website. You'd set up a Google my business listing. And if you did an average job people could start finding you through search and Google Maps.
Now the digital competition is way fiercer. There are way more advertisers. They've improved their craft, websites and copy. Any random barber can't go into the Google marketplace and expect results without either being really good at CPC advertising and CRO (which 99% aren't) or pay top dollar to an agency.
All the while Google is increasing their profits by skimming off what originally was organic search results and moving it into paid results. Through new Ad placements on Google Maps. Shitty placements provided through the "Performance max" placements. Or just even more ads at the top of the SERP.
On top of this the ad bidding system is inherently set up to be extractive. In a perfectly measurable market the price you pay for an acquisition through CPC ads will increase until it has extracted all the profit an advertiser can reasonably give.
This distorts the economy greatly. It concentrates power to those who are the best at digital - at the cost of the average business owner who has no resources, interest or skills in learning it.
This goes for barbers, bakeries, restaurants and all kinds of brick and mortar stores. In a lot of these cases it's a zero sum game where Google has inserted itself in the perfect position to be extractive.
Not to mention the advertising dollars that used to go to the local newspaper is now going to a California behemoth.
Biden chose Khan to lead the FTC (signalling an anti-trust stance from the administration) in 2021. This was as the inflation surge started to form. While we can grant the administration some degree of foresight, I don't think it's reasonable to say at the anti-trust activity originated from the current (post 2021/2022) big tech backlash. Although certainly the backlash if helpful to their current efforts.
My hunch is that it's a realization that the degree of concentration of power and money is really is destabilizing. For the democrats, doubly so, since it's been plain to see since 2016 just how much polarization and anger is fueling Republican strategy and success.
Rather than ask why it woke up, I prefer evaluating why after years of having real anti-trust teeth, it fell asleep & became so inactive.
And for that, the answer is Borkism, which was Reagan's solicitor general rewriting the rules to only measure & go after very narrow anti-trust situations, where only certain types of consumer harm were worthy of note.
That's not a serious problem nowadays. Problems of monopolistic control is like a drop in a lake of water compared to the problems that our lawmakers cause by ridiculously high taxes and bureaucracy. If we're trying to fight monopolies today, we're fighting completely the wrong problems.
Competition doesn't succeed because of taxes. Tearing down Amazon or Google due to reasons of monopoly (and therefore little competition) is like tearing down a newly built building because there was a bad paint job on one of the walls! It doesn't make sense. If there are no other buildings standing, it's because lawmakers don't create an environment where others can succeed (because of taxes and bureaucracy).
We look at Amazon (for example), and say hey, they're really successful, and they're sort of alone, they must have cheated by using monopolistic control measurements, and then we search to find out how. But all alone we miss the real problems: it's the taxes and bureaucracy that don't let others succeed.
Got anything to back that up? Businesses managed to thrive before when taxes were considerably higher. How do you account for the Gilded Age? How were those monopolies different than today and how did taxes and bureaucracy exacerbate issues then? Because there are many parallels between them and now.
This is a fair point. I would also call to attention the ability of the big players to avoid paying a large portion of their taxes. The double irish etc. This giving them a unfair advantage vs small competition that can’t afford the overhead of complex tax structures.
This is actually a great point to illustrate how true my argument is. One reason those companies have succeeded building amazing products and services, that now rake in billions of taxes dollars every month, is because many years ago they were able to get around paying taxes. As a result, they built amazing stuff for us, that we are benefiting both as consumers and as a society, because now they generate tax money for us from all over the world.
You see, when we relieve companies of the unbelievable burden of taxes, what do we get in return: these companies produce tremendously more value for society (via better products and services) which then generate more revenue over the long-haul via taxes for us. It doesn't make sense to tax companies! They are unselfish entities designed to serve society, why would we tax them?????? It's f****** crazy.
Of course, now those tax loops have been filled, and other companies can't build products to competitive with Amazon/Google. But is that Amazon's fault? NO. It's the shitty legislators. You can't punish Amazon for that - insane.
Amazon/Google were able LEGALLY get around paying taxes, that is not illegal, and it's definitely not immoral. Punishing them for that is crazy.
> They are unselfish entities designed to serve society, why would we tax them?????? It's f*** crazy.
This is about the most outlandish claim I've ever seen made in defense of big tech. They literally are not charitable organizations. They serve the selfish desires of their respective CEOs, boards, and shareholders. Second tier consideration to advertisers, then employees and users in distant third. "Society" doesn't factor in, until they arrive at the gates with pitchforks.
I'm not talking about big tech, I'm talking about all businesses/corporations (except for obvious sex/drug/alcohol businesses). Businesses and corporations are always predetermined with a purpose, that purpose is always and unequivocally (barring extremely unusual businesses) to provide some sort of service or product to society. That by definition is an unselfish entity. A corporation is not even a human being, so it cannot be selfish; only when money has been extracted for a business can it become selfish.
Humans, on the other hand, have selfish purposes: I want to become rich, I want to own fast cars, I want to travel the world, I want to eat good food. Businesses build services and products to earn a profit based on creating value for society. Businesses should not be taxed, only when money is extracted to individually should it be taxed!!
This idealistic claptrap has zero relation to reality. The purpose of a great many corporations is to extract maximum rent with minimum (often negative) value added.
Businesses are not human: agreed. Businesses are a legal mechanism to execute on behalf of its owners, while shielding them from liabilities, tax included. This is enshrined in supreme court cases involving Hobby Lobby, Citizens United, etc: corporations enjoy a freedom of speech because otherwise the freedom of the corporations' controllers would be infringed. They have more rights than you and I, and in many regards, less responsibility. The corporations may not be selfish, but their controllers are selfish human beings.
Private jets are a great example. If you buy one, that's expensive! If you start a corporation, the corporation buys a jet, and you make a symbolic effort to rent it out to a friend once and a while, you can write down all of the expense as a loss. Those get deducted from capital gains made in other ventures. Voilá, instead of paying tax, your money goes to luxury expenses instead! And if you're not going to tax the actual profit-making companies, then you get zero taxes from the people extracting the most rent from society.
Free market capitalism has been infected with a mind virus that rents are awesome for society and regulation, liability, and tax are a detriment. You're entirely turned around.
Of course, the system is abused, business costs are used for selfish human purposes by the controllers, but this is a super super minor issue in the global scheme of business. The advantages of taxes businesses have to outweigh the costs, and the costs of taxes business are the following:
1) create unbelievably complex laws to tax here and there and what's allowed, what is exempt, etc etc etc.
2) For all the complex laws, we need:
A) politicians who can understand so that they can be changes
B) Judges who can judges by them
C) Auditors who can make audit businesses following them
D) Business executives who specialize only in finding ways around them
E) Accounts and Tax advisors who also need to learn them
F) Business employees that comply with them (save every receipt, so the costs can approved!)
G) Software developers who can write unbelievable complex software for those unbelievably complex laws (i.e. Accounting software, IRS software, etc.)
H) All the IRS agents who have to do the back office paperwork
And of course all of ^ those have enormous costs. Biden for example wants to spend $60 billion to build IRS tax software. $60 billion. six zero - billion.
3) And finally #3 which you're not going to believe: we take the money from good business, most businesses are good businesses, and we give it the corrupt politicians who piss it down the shithole. Wonderful!!!!! All the work just to transfer the money to someone to spend it even it worse!!!
I think your forgetting that the way the tax avoidance system got into the law is because the large players paid lobbyists and funded campaigns to get the tax code changed such that they could do it. It is "legal" but its also corrupt.
> It doesn't make sense to tax companies! They are unselfish entities designed to serve society why would we tax them??????
What world are you living in? These companies are absolutely selfish, by definition. Publicly traded companies have a "fiduciary duty" to their shareholders to act solely in the companies interest (i.e. maximizing profits). They are not "designed to serve society" - that is the purpose of democratic government - they are designed to make as much money as possible.
Any beneficial-to-society effects are secondary. Or only intended insofar as to generate further profit.
And so we're clear, this is the mechanism behind this popular new "enshittification" term. The name of the game is Money, or Power if you prefer. Google doesn't provide Maps for free to benefit society, they provide it because it's an enormous engine driving their digital moat (not to mention their immediate ad business revenue).
These companies are not your friends. And by this I don't mind that they are a priori your enemy, only that their actions are not intended for your benefit, and they can easily turn hostile if it is in their interest to do so. If you place implicit trust in them, and do nothing to curtail their acquisition of power, nobody will be able to oppose them when they take actions that are harmful to society.
I introduce all of my male relatives to Ayn Rand when they hit 15. Libertarianism is an attractive idea at that age and this gives them a chance to explore it with actual adults.
It’s an inoculation. Three years later they’ll see how disconnected from reality it is and then I can spring On Walden Pond on them.
“Aha!” I say. “It turns out that Libertarianism works as a personal philosophy!”
I don't think I could even begin to parse what you might mean by this. What do you imagine makes a company 'our own' or 'good'? I assure you nobody in big tech is either but I'm curious what you mean.
I do not get it either honestly. All the acquisitions in the past i simply for the life of me do not understand why they ever allowed such a level of consolidation in big tech.
Why did they allow google to acquire waze for example. Google has not shut them down but technically if they start competing with gmaps google do that at any moment.
Why did they allow facebook to acquire instagram and whatsapp?
How can smaller companies compete against these behemoths if you just allow them to buy up all the competitors or potential competitors? Either they have a very good lobbying team (probably do) or the administration wants this concentration of power somehow.
Geopolitically it could help you keep the technological supremacy the US has enjoyed until now. You allow your companies to grow to giant mega corporations. And every time a startup becomes successful internationally you buy it, take the best pieces and manage it into a small steady decline.
One key mechanism to foster collusion was Agri Stats. This corporation gathers pricing,
production, and wage data from every firm in the industry, and then sells those same
firms ‘consulting advice,’ essentially selling price-fixing conspiracies to meat
processors.
Isn't there software along the same lines for realtors to determine rent pricing?
Why is it that no one goes after the biggest price fixing in the world? OPEC does price fixing openly and blatantly. Thousands of skyscrapers, entertainment, airlines, oil wealth owning pretty much everything in the world -- all of this is funded by us. The harms caused by everything else is largely irrelevant.
Oil should have been a commodity which we don't have to think about. Just like salt and tons of other commodities that we consume. [1]
I’m not sure what “go after” means in this context. OPEC is a group of countries, so it’s a diplomatic issue. And the west does apply pressure on them to behave in certain ways. But it’s diplomacy or warfare, not a legal issue.
The same thing amaze me in a bad way.
This is the biggest obvious trust, lots of the bad things in the world comes from oil monarchies and still no-one says anything.
Politics are going after big tech when their effects are still little compared to the oil business.
Antitrust is a matter of applying domestic law to domestic firms. OPEC is a matter of coordinating diplomatic and military sanction towards an economic goal.
35 comments
[ 1.8 ms ] story [ 318 ms ] thread1. Normal daily life increasingly happens through gates controlled by a handful of firms.
2. We all noticed when several of these firms crossed from "free" and "wonderful" to enshitiffied services. E.g. Google, Amazon, etc.
3. A general disgust with big tech's handling of social media in terms of user manipulation, and privacy abuses. And disgust with a perception of unhelpful behavior and lack of transparency or responsibility by social media's famous leaders.
4. General feeling that big tech is shafting little people, whether it's social media, physical world gig work, heavily taxing or not paying creators on their sites or in apps, etc.
5. People dealing with big tech mismanagement of their accounts, with great frustration and even fear.
(I almost lost my home when more than one financial firm suddenly decided that having a non-driver's ID after a move somehow made me more risky? Or a good target to demonstrate they are weeding out risky people?I will never know the reasons, and their unexplained decisions are unappealable. A month of hell. Banned for life, without recourse, apparently.)
6. The amount of frivolous and disturbing news that is generated by the tech billionaire class, emphasizing vast inequalities in resources and quality of public behavior between regular people and the super rich.
I don't imagine its just me that has experienced a surge of complaints like these in their techie and non-techie circles.
I think the relative unity behind these negative perspectives comes from them being based in everyone's practical lives, as apposed to having indirect, abstract, tribal or ideological bases.
General Motors indirect economic effects were huge and larger than the company itself. Lots and lots of businesses and people were employed indirectly.
Google, nothing, bupkis, they're totally extractive on the rest of the economy. Most of the towns and cities in the US google doesn't employ anyone directly or indirectly. And the places they do they distort the economy in bad ways.
Along those lines, it is interesting that as much as “evil” Microsoft dominated computing and leveraged their power in the 90’s, they still provided a very open (in terms of building on) platform for an enormous number of third parties.
Now Apple manages an enormous platform re iOS apps, but it is not open technologically or economically.
Contrast this with Apple, they have around 10% desktop/laptop market share and around 50% of the smartphone market share. Here you could only argue that they have a duopoly with google on the smartphone OS market.
Microsoft had to open up the platform or they would have gotten destroyed by antitrust laws there and then. They had to let other developers deploy on their OS and support them because if they failed the government would have gotten involved and forced them. So smartly they decided let us no destroy the nice thing we have and play as nice as we have to to keep our profits and our market share. And they mostly succeeded in that regard.
Very hard, often impossible, to be competitive in mobile software if you don’t support iOS.
Microsoft didn’t optimize Windows for third party developers because of legal action.
Supporting third party developer innovation was the foundational Microsoft strategy, long before and after they got into operating systems.
The legal issue was using their platform’s defaults and product bundling to kill the opportunities and economics for potentially competitive platforms (Netscape, the web as an OS platform replacement).
Now the digital competition is way fiercer. There are way more advertisers. They've improved their craft, websites and copy. Any random barber can't go into the Google marketplace and expect results without either being really good at CPC advertising and CRO (which 99% aren't) or pay top dollar to an agency.
All the while Google is increasing their profits by skimming off what originally was organic search results and moving it into paid results. Through new Ad placements on Google Maps. Shitty placements provided through the "Performance max" placements. Or just even more ads at the top of the SERP.
On top of this the ad bidding system is inherently set up to be extractive. In a perfectly measurable market the price you pay for an acquisition through CPC ads will increase until it has extracted all the profit an advertiser can reasonably give.
This distorts the economy greatly. It concentrates power to those who are the best at digital - at the cost of the average business owner who has no resources, interest or skills in learning it.
This goes for barbers, bakeries, restaurants and all kinds of brick and mortar stores. In a lot of these cases it's a zero sum game where Google has inserted itself in the perfect position to be extractive.
Not to mention the advertising dollars that used to go to the local newspaper is now going to a California behemoth.
My hunch is that it's a realization that the degree of concentration of power and money is really is destabilizing. For the democrats, doubly so, since it's been plain to see since 2016 just how much polarization and anger is fueling Republican strategy and success.
And for that, the answer is Borkism, which was Reagan's solicitor general rewriting the rules to only measure & go after very narrow anti-trust situations, where only certain types of consumer harm were worthy of note.
As usual, Cory Doctorow has a decent introductory article to this. He's been blogging about these kinds of matters for ages & has covered Khan a number of times. https://pluralistic.net/2022/05/09/rest-in-piss-robert-bork/...
Competition doesn't succeed because of taxes. Tearing down Amazon or Google due to reasons of monopoly (and therefore little competition) is like tearing down a newly built building because there was a bad paint job on one of the walls! It doesn't make sense. If there are no other buildings standing, it's because lawmakers don't create an environment where others can succeed (because of taxes and bureaucracy).
We look at Amazon (for example), and say hey, they're really successful, and they're sort of alone, they must have cheated by using monopolistic control measurements, and then we search to find out how. But all alone we miss the real problems: it's the taxes and bureaucracy that don't let others succeed.
You have a complete misunderstanding of "thriving". Thriving is Google/Amazon in the past 20 years. IDK what thriving businesses you're talking about.
You can't go back to the Gilded Age, dude, that's crazy. We have to keep things relevant.
You see, when we relieve companies of the unbelievable burden of taxes, what do we get in return: these companies produce tremendously more value for society (via better products and services) which then generate more revenue over the long-haul via taxes for us. It doesn't make sense to tax companies! They are unselfish entities designed to serve society, why would we tax them?????? It's f****** crazy.
Of course, now those tax loops have been filled, and other companies can't build products to competitive with Amazon/Google. But is that Amazon's fault? NO. It's the shitty legislators. You can't punish Amazon for that - insane.
Amazon/Google were able LEGALLY get around paying taxes, that is not illegal, and it's definitely not immoral. Punishing them for that is crazy.
This is about the most outlandish claim I've ever seen made in defense of big tech. They literally are not charitable organizations. They serve the selfish desires of their respective CEOs, boards, and shareholders. Second tier consideration to advertisers, then employees and users in distant third. "Society" doesn't factor in, until they arrive at the gates with pitchforks.
Humans, on the other hand, have selfish purposes: I want to become rich, I want to own fast cars, I want to travel the world, I want to eat good food. Businesses build services and products to earn a profit based on creating value for society. Businesses should not be taxed, only when money is extracted to individually should it be taxed!!
Businesses are not human: agreed. Businesses are a legal mechanism to execute on behalf of its owners, while shielding them from liabilities, tax included. This is enshrined in supreme court cases involving Hobby Lobby, Citizens United, etc: corporations enjoy a freedom of speech because otherwise the freedom of the corporations' controllers would be infringed. They have more rights than you and I, and in many regards, less responsibility. The corporations may not be selfish, but their controllers are selfish human beings.
Private jets are a great example. If you buy one, that's expensive! If you start a corporation, the corporation buys a jet, and you make a symbolic effort to rent it out to a friend once and a while, you can write down all of the expense as a loss. Those get deducted from capital gains made in other ventures. Voilá, instead of paying tax, your money goes to luxury expenses instead! And if you're not going to tax the actual profit-making companies, then you get zero taxes from the people extracting the most rent from society.
Free market capitalism has been infected with a mind virus that rents are awesome for society and regulation, liability, and tax are a detriment. You're entirely turned around.
1) create unbelievably complex laws to tax here and there and what's allowed, what is exempt, etc etc etc.
2) For all the complex laws, we need:
And of course all of ^ those have enormous costs. Biden for example wants to spend $60 billion to build IRS tax software. $60 billion. six zero - billion.3) And finally #3 which you're not going to believe: we take the money from good business, most businesses are good businesses, and we give it the corrupt politicians who piss it down the shithole. Wonderful!!!!! All the work just to transfer the money to someone to spend it even it worse!!!
What world are you living in? These companies are absolutely selfish, by definition. Publicly traded companies have a "fiduciary duty" to their shareholders to act solely in the companies interest (i.e. maximizing profits). They are not "designed to serve society" - that is the purpose of democratic government - they are designed to make as much money as possible.
Any beneficial-to-society effects are secondary. Or only intended insofar as to generate further profit.
And so we're clear, this is the mechanism behind this popular new "enshittification" term. The name of the game is Money, or Power if you prefer. Google doesn't provide Maps for free to benefit society, they provide it because it's an enormous engine driving their digital moat (not to mention their immediate ad business revenue).
These companies are not your friends. And by this I don't mind that they are a priori your enemy, only that their actions are not intended for your benefit, and they can easily turn hostile if it is in their interest to do so. If you place implicit trust in them, and do nothing to curtail their acquisition of power, nobody will be able to oppose them when they take actions that are harmful to society.
It’s an inoculation. Three years later they’ll see how disconnected from reality it is and then I can spring On Walden Pond on them.
“Aha!” I say. “It turns out that Libertarianism works as a personal philosophy!”
I don't think I could even begin to parse what you might mean by this. What do you imagine makes a company 'our own' or 'good'? I assure you nobody in big tech is either but I'm curious what you mean.
Why did they allow google to acquire waze for example. Google has not shut them down but technically if they start competing with gmaps google do that at any moment.
Why did they allow facebook to acquire instagram and whatsapp?
How can smaller companies compete against these behemoths if you just allow them to buy up all the competitors or potential competitors? Either they have a very good lobbying team (probably do) or the administration wants this concentration of power somehow.
Geopolitically it could help you keep the technological supremacy the US has enjoyed until now. You allow your companies to grow to giant mega corporations. And every time a startup becomes successful internationally you buy it, take the best pieces and manage it into a small steady decline.
It sounds like they should be worried... :)
Oil should have been a commodity which we don't have to think about. Just like salt and tons of other commodities that we consume. [1]
[1]Turning Oil Into Salt: Energy Independence Through Fuel Choice: https://www.amazon.com/Turning-Oil-Into-Salt-Independence/dp...
Politics are going after big tech when their effects are still little compared to the oil business.
So, it's a matter of free trade?