
Where Warren’s Wrong - nikbackm
https://stratechery.com/2019/where-warrens-wrong/
======
chj
The author is nitpicking. Warren may be wrong about the history of bing and
google, but that's not really important. She's 100% right about Amazon, and
the author conveniently forgot to mention.

Most people in tech industry always strive to build monopoly and dominance. In
their eyes, Warren's idea is of course insane. But viewing from another point,
in order to protect competition and small businesses, her proposal is mostly
sound. The concept of "Platform Utility" may seem arbitrary, but actually a
very helpful check and balance.

The perfect solution is that the platform should be run like an open
blockchain, trouble is no one has a clue how to build it yet.

~~~
cm2187
Actually amazon is the one that I would say doesn't have a monopoly. It
doesn't have a monopoly in the retail space (far from it), nor in the cloud
hosting (let alone server hosting) business, nor in online streaming
(music/tv).

Google on the other hand has close to a monopoly on search (and browsers).
Facebook on social medias.

~~~
mtmail
"[Amazon] has captured 43 percent of all internet retail sales in the United
States, with half of all online shopping searches starting on Amazon. In 2016,
it had over $63 billion in revenue from online sales in the United States — or
more than the next 10 top online retailers combined. It controls 74 percent of
e-book sales, is the largest seller of clothes online and is set to soon
become the biggest apparel retailer in the country."
[https://www.nytimes.com/2017/06/21/opinion/amazon-whole-
food...](https://www.nytimes.com/2017/06/21/opinion/amazon-whole-foods-jeff-
bezos.html)

~~~
sib
Exactly, so, not a monopoly in ecommerce. And only a single-digit share of
_commerce_.

And, of course, there is literally nothing inherently illegal (in the US, at
least) about _building_ a monopoly in any case.

~~~
oflannabhra
I'm not so sure we should be heralding the fact that a single company has not
captured _all of commerce_ as a win for competition.

~~~
scarface74
And it “captured it” because of the incompetence of the previous incumbents in
retail - Barnes and Noble, Toys R Us, Tower Records, Walmart, etc.

Why should the government punish companies because they were able to disrupt
incumbents?

Should we also punish Apple because RIM and Palm couldn’t compete?

~~~
cgriswald
You seem to be arguing for a winner-take-all approach to the market.

Should _future competitors_ to [monopolistic entity] be punished because
[previous competitors] were unable to effectively compete?

In any case, I don't think punishment is really an apt metaphor for breaking
apart a monopoly.

~~~
scarface74
So back in 1999 people thought that Microsoft would be dominant forever - how
did that work out?

Every company I named was once dominant. Even Spotify came out of nowhere and
made the once dominance iTunes Music Store basically irrelevant without
government intervention.

It wasn’t government intervention that caused the once The Beleaguered
Computer Company that was about to be crushed by MS what it is today.

~~~
cgriswald
> So back in 1999 people thought that Microsoft would be dominant forever -
> how did that work out?

> It wasn’t government intervention that caused the once The Beleaguered
> Computer Company that was about to be crushed by MS what it is today.

The criticisms of Microsoft weren't that it was preventing Apple from selling
computers; but that it was using it's monopoly in the operating system to
prevent competition against its other software.

> Even Spotify came out of nowhere and made the once dominance iTunes Music
> Store basically irrelevant without government intervention.

And if Apple decided Spotify could not be on the App Store, how would Spotify
do then? (Nevermind we're ignoring the "Apple tax".)

~~~
scarface74
Spotify doesn’t pay an “Apple Tax”. You can’t subscribe to Spotify within the
App store.

~~~
cgriswald
> Spotify doesn’t pay an “Apple Tax”. You can’t subscribe to Spotify within
> the App store.

Spotfy is an example. Plenty of Apps do pay the "Apple tax." I'd get into the
complexity of how the "Apple tax" affects Spotify even though it doesn't pay
it, but you seem to have already made up your mind about all this regardless
of the facts.

~~~
scarface74
You mean companies have to pay to be a part of a marketplace? Software
distributors use to pay retailers 60% of the retail price to be sold in
stores. It was 70% to be distributed in online app stores like the ones that
Verizon use to run to distribute J2ME apps.

And you act as if most revenue from online stores is not coming from in app
purchases of consumable goods.

~~~
AnthonyMouse
> Software distributors use to pay retailers 60% of the retail price to be
> sold in stores.

Because retail stores have to provide shelf space with real estate cost,
unsold inventory cost, etc. How much is that cost to Apple?

> It was 70% to be distributed in online app stores like the ones that Verizon
> use to run to distribute J2ME apps.

And it costs 0% to be distributed in a Linux package manager.

Possibly something to do with Verizon having the same sort of app monopoly
over its device customers that Apple does.

~~~
scarface74
You could download J2ME apps from anywhere. Honestly I used Verizon as an
example but thinking back, Sprint’s store was a better example. I think
Verizon used something different.

 _Because retail stores have to provide shelf space with real estate cost,
unsold inventory cost, etc. How much is that cost to Apple?_

So now the government should also decide what is a “fair” amount of markup?

 _And it costs 0% to be distributed in a Linux package manager._

And seeing how little money you can make from Linux users, the value add for
distributing packages on Linux makes the price about right....

~~~
AnthonyMouse
> You could download J2ME apps from anywhere. Honestly I used Verizon as an
> example but thinking back, Sprint’s store was a better example. I think
> Verizon used something different.

In which case the lesson is that by charging so much in a competitive market,
that business unit failed. Which leads to the real point:

> So now the government should also decide what is a “fair” amount of markup?

It's not a matter of setting prices, it's a matter of having competition.
Apple gets 30% because it's the only feasible way to distribute to iOS. If
Apple was charging 30% and there was a competing Mozilla App Store for iOS
charging 5%, I suspect Apple would lose some business to it. And if some
people still think Apple's store is worth 30%, no problem -- let them pay 30%
while others pay 5%. But the 5% option should _exist_.

> And seeing how little money you can make from Linux users, the value add for
> distributing packages on Linux makes the price about right....

The point is that it shows the cost of providing that service. If Debian can
do it at scale for nothing, what is Apple doing that justifies 30%, and where
is the option to get just the thing Debian does for free?

~~~
scarface74
_If Apple was charging 30% and there was a competing Mozilla App Store for iOS
charging 5%,_

There was nothing stopping Mozilla from making a “Firefox phone” and having a
fully integrated experience. Well they did try and failed to execute. As did
Amazon, Ubuntu, and Facebook.

Apple was nowhere near the behemoth it is today when the iPhone was
introduced. A company shouldn’t come under government scrutiny because
competitors failed to execute.

If app makers don’t think the trade off is worth it, they are free to only
target the other 80% of the phone market.

I guess they think selling loot boxes with Apple taking a 30% cut is worth it.
Don’t be mistaken, that is where most money being spent on the App Store is
being spent - on in app consumables.

The other major market is subscription to third party services and companies
can and do sell those outside of the App Store.

~~~
AnthonyMouse
> There was nothing stopping Mozilla from making a “Firefox phone” and having
> a fully integrated experience. Well they did try and failed to execute.

The whole issue is that you shouldn't have to succeed in the _phone market_
before you can operate an _app store_. Tying the phone to a specific app store
is the problem. "Integrated experience" is the argument Microsoft failed to
convince with when it tied Internet Explorer to Windows.

> If app makers don’t think the trade off is worth it, they are free to only
> target the other 80% of the phone market.

In other words, Apple has a monopoly over 20% of the app customers, in the
same way that Charter may have a broadband monopoly in 20% of the country even
if there are other providers in the other 80%.

Notice that this isn't the same thing as saying that Walmart has a monopoly
over its own shelf space, because customers can trivially switch from Walmart
to Amazon or vice versa at any time but to buy a $1 app from Amazon or Google
Play instead of Apple you would first have to replace your $1000 phone. To
reach the same position as Walmart, the issue isn't that they control what's
in their own store, it's that there are no competing iOS app stores.

Moreover, the problem with the App Store isn't just that Apple takes 30%, it's
that they can reject your app for entirely opaque reasons without recourse,
explicitly including because it competes with one of theirs.

~~~
scarface74
_In other words, Apple has a monopoly over 20% of the app customers, in the
same way that Charter may have a broadband monopoly in 20% of the country even
if there are other providers in the other 80%._

I can walk into any mobile store and have a choice between dozens of phones.
Most people can’t choose their homes internet service provider.

 _Notice that this isn 't the same thing as saying that Walmart has a monopoly
over its own shelf space, because customers can trivially switch from Walmart
to Amazon or vice versa at any time but to buy a $1 app from Amazon or Google
Play instead of Apple you would first have to replace your $1000 phone. To
reach the same position as Walmart, the issue isn't that they control what's
in their own store, it's that there are no competing iOS app stores._

People can choose whether they want to spend money on an iPhone or an Android
phone knowing the trade offs just like people can choose whether to buy an
Xbox or PS4.

 _it 's that they can reject your app for entirely opaque reasons without
recourse, explicitly including because it competes with one of theirs._

Seeing that there are competing products for everything that Apple sells, this
is a boogeymen that doesn’t happen anymore than it happens for the console
makers.

You do realize that no software can be sold for consoles without the approval
of the console makers - including physical sells.

~~~
AnthonyMouse
> I can walk into any mobile store and have a choice between dozens of phones.
> Most people can’t choose their homes internet service provider.

No, but they can choose their home, which is the relevant analog. If you don't
like Charter, just move to another city. If you don't like the Apple App
Store, just buy another phone.

If the thing you have to buy to get a choice costs 1000 times more than the
thing you're choosing, it's not a real choice.

> People can choose whether they want to spend money on an iPhone or an
> Android phone knowing the trade offs just like people can choose whether to
> buy an Xbox or PS4.

"People can choose whether they want to spend money on a house in Charter's
service area or Comcast's service area knowing the trade offs..."

And it being no different for consoles only means that the same rules should
apply there as well.

> Seeing that there are competing products for everything that Apple sells

What is the competition for Safari then? Notice that "Firefox" on iOS isn't
even real Firefox because Apple requires it to use Safari's engine internally.

Also, the App Store is an app.

~~~
scarface74
_No, but they can choose their home, which is the relevant analog. If you don
't like Charter, just move to another city. If you don't like the Apple App
Store, just buy another phone._

Yes it was one of the deciding factors when I bought my house was the internet
service available.

But if I don’t like Apples policies it’s a lot easier to buy another $500
phone than a $400K house.

 _What is the competition for Safari then?”_

Opera Mini....

 _Also, the App Store is an app._

Apple “sells” the App Store?

------
comnetxr
Agree 95%, but one point he uses to crticize Warren seems wrong:

Where Warren says "America’s big tech companies have achieved their level of
dominance in part based on two strategies: using Mergers to Limit
Competition,..." he argues that they achieved dominance by making good
products and were already dominant when they started making major mergers, and
that Warren doesn't understand this.

It sounds like he's missing the whole point here: google, amazon, and apple of
course did achieve dominance by making a good product, but then they leveraged
that dominance over one product to dominance over the whole tech sector with a
combination of more good products and anticompetitive moves. Warren does not
argue that companies that make good products shouldn't be allowed to get big -
just that they should be scrutinized and not allowed to make anticompetitive
moves. Indeed, all of the tech companies she has proposed breaking up would
still be huge companies with "dominating" products (including control over
their respective platforms - search, app store, amazon store); but hopefully
the ecosystem on those platforms can flourish without competition from the
platform companies.

~~~
Shivetya
Sorry, but the idea that Apple needs to be separated from the App store is
ludicrous. If you don't like the App store don't buy Apple products. There are
hundreds of other phones to choose from and some get equal or better reviews.
It would be one thing if Apple was the only cell phone maker in existence but
that is so far from the truth.

Amazon and online purchases, again, there are so many choices that you never
ever have to visit Amazon to buy anything. If they were preventing resellers
from selling elsewhere then we would have an issue. Like when Intel was trying
to force Dell not to sell AMD. Amazon is in truth their own worst enemy now
with so many bad products that venturing off known brands is a risk.

She is doing what politicians do best, using resentment, jealousy, and more,
to gain more power and money. Not just at the voting booth but by intimidating
companies into contributing more the PACs and political campaigns. We see this
all the time and sadly people buy into it because using market tested phrases
has become standard operating procedure for politicians. They pay to find out
how to divide people.

An example of why PACs are truly bad is a recent political office run revealed
that one candidate, who could not see fit to pay their taxes on time, nor
their school loans, had been on the part time pay roll of a PAC for nearly
200k a year. Seriously, you want to see how politicians roll in the money look
how the shake down really pays them.

~~~
patrec
There are just two phone makers in existence: Google and Apple. If you care
about privacy and security, there is just a single phone maker: Apple. The
only difference between different brands of Google phones is how much
additional insecurity and crap the notional manufacturer adds on top.

Amazon has complete dominance over books in the US and are on their way to
abolishing book ownership outright.

~~~
DeepThoughts
No one is currently preventing you from homerolling a mobile operating system
and building your own smartphone (provided that you avoid or license existing
patents). It would be difficult to break into that market, establish share and
make money in the short term, but no one is actively being prevented from
doing so (see Chinese knockoffs).

I fail to see how you see the above scenario as some flavor of monopoly.

The problem here is that Warren was arguing in either ignorance or bad faith
by implying these orgs need to be broken up because they are too big or
monopoly’s. They are neither. I could sit down today and create a new
Facebook, Instagram, or Amazon and release it. There will be no consequences
or jackbooted thugs coming to shut me down.

Just because you don’t like something doesn’t mean you should be able to use
scary words to shut it down.

The reality is that people like Warren want to dictate winners and losers in
the market. If you feel privacy or business practices aren’t to your liking,
you don’t have to use Facebook or Amazon. Don’t like that Google is censoring
(or not censoring) something? Use Duck Duck Go, or Ask. But don’t pretend to
be Teddy Roosevelt when you’re really just trying to project your personal
biases on the market.

~~~
treis
You're arguing against a strawman here. No one is using "jackbooted thugs will
shut me down" as the definition of a monopoly.

------
philipodonnell
I have to admit I'm a little taken aback by the focus on how the stated
rationale is weak or doesn't fit every company equally while agreeing that
there are real problems that would be addressed. Is there a word for this? Its
almost nit-picking? Pedantry? Like dismissing someone who is fighting against
anti-vaxxers because they didn't quote the most definitive study as rationale.
Explanations of policy ideas aren't targeted at experts but at laypeople so I
don't see the problem with using terms or rationale they understand even if
its not perfect.

I mean the core of the whole idea is that no one should both control the
platform and simultaneously participate in it. Is the author against that? The
pushback seems to be that it would lead to lawsuits which is almost a cliche
from anyone trying to dismiss an idea.

~~~
maxxxxx
I had the same impression. But this is how political discourse seems to work
this day. Instead of making suggestions for improvement an idea gets dismissed
completely and nothing happens as a result. Happened with Obamacare and also
with the discussion about regulations. Instead of suggesting specific
improvements it turns into a black and white debate without results.

~~~
monkbent
This is why the entire second half of the article was detailing where I think
focus should be.

~~~
maxxxxx
Maybe the title was already too confrontational. How about "How I would
improve Warren's plan" or something like that?

~~~
your-nanny
yes that would have been better. didn't finish article, but headline would
have kept me reading to the end because I would have expected critique to be
followed with constructive suggestions

------
resalisbury
A lot is wrong, but I appreciate than Ben gives credit where due.

”Let me reiterate a point I have made twice now: I appreciate Senator Warren
raising these issues; they are indeed critical not only for the world today,
but also the world we wish to create in the future."

And

"This is why I have called Facebook’s acquisition of Instagram The Greatest
Regulatory Failure of the Past Decade, and called for an end to social
networks being allowed to buy other social networks."

------
jmrobertson
Reading her stuff, it seems like proposals to separate Apple from the App
store indicate a total lack of awareness about InfoSec, and at best a poorly
researched policy proposal from a technical standpoint. The only reason the
App Store isn't a simmering cesspool of malware is that Apple heavily
moderates what gets on there, and Google does somewhat the same. That doesn't
mean that there perhaps isn't a less MSFT + IE type of solution, and I don't
necessarily disagree with her, but her not mentioning that sort of nuance at
all makes it rather clear the policy doesn't extend too far into anything more
than populism.

~~~
yathaid
It's not Apple's oversight of the app store that is the problem Warren is
targeting, it is the participation. Apple can either take 30% from Spotify or
have iTunes, not both. Similar argument for Amazon and Amazon Basics.

The article does raise an interesting point though about not thinking of these
companies as "tech"; the Amazon argument can be applied to any private label I
guess, hence the point about unintended consequences.

It is an interesting concept though, almost like the logical extension of the
net neutrality argument. DirecTV, HBO and ATT merging would be something that
directly runs foul of this. You either get to provide the platform (be an ISP)
or be a content producer, not both.

~~~
scarface74
So is she going to break up the PlayStation, XBox, Nintendo, and Kindle Stores
from their platforms?

Is she going to stop physical retailers from having store brands that “compete
unfairly”?

~~~
0xffff2
I think she's saying that Sony, Microsoft and Nintendo shouldn't be game
developers or publishers and that Amazon shouldn't be a book publisher.

~~~
chillacy
And Tesla shouldn’t be a car dealership. But going direct to consumer was the
best thing for consumers imo. Why would I want to deal with economically
inefficient middlemen? The new laws could create digital versions of car
dealerships

~~~
jmrobertson
To be fair, that's inaccurately reframing the argument. Apple with an Apple
store for Apple Apps is the equivalent to what you're saying. Tesla doesn't
sell Teslas _and_ BMWs.

~~~
jmrobertson
I don't disagree with you so not sure your point, see my original point. I'm
stating that the Tesla comparison doesn't apply to what Apple's specific
situation is, and therefore what policy proposals/considerations apply.

~~~
0xffff2
Did you mean to reply to yourself?

------
anon0000
Noticeably absent from Warren's target list is Comcast. IMHO, they are more
anti-trust than any of the tech companies she is targeting. Comcast also
happens to be the 15th biggest donor to her campaign.
[https://www.opensecrets.org/members-of-
congress/contributors...](https://www.opensecrets.org/members-of-
congress/contributors?cid=N00033492&cycle=2018)

~~~
apcragg
Wow. Your post is so misleading it borders on outright lying. Those $31k
contributions come entirely from individuals. Comcast the company did not
donate any money to her. Conflating individual contributions with Corporate
contributions is massively misleading. Comcast has 164k employees. Do you
honestly expect that most employees of Corporations agree with the political
goals and objectives of their parent companies?

~~~
Cyph0n
If the donor's employer has no impact whatsoever, then why is the employer
listed at all?

~~~
nagVenkat
It has a long history about how corporations will use employees to pay for
candidates.

[https://politics.stackexchange.com/questions/8383/u-s-
presid...](https://politics.stackexchange.com/questions/8383/u-s-presidential-
campaign-donations-must-submit-employer-and-occupation)

~~~
Cyph0n
Thanks for the link, but it was a Socratic question (or at least an attempt at
one).

------
gilbetron
> This is a restriction on competition produced not by market dominance, at
> least not directly, but rather contracts that OEMs could not afford to say
> ‘No’ to.

I'm not seeing a significant difference here. They couldn't afford to say "no"
because MS was so dominant.

~~~
hopler
He's trying to draw a meaningless boundary between competitors being unable to
access the market, and competitors being blocked by collusion.

------
thebooktocome
It's really hard to read an article that conflates moral or ethical concepts
(should FAANG exist?) with legal ones (are FAANG vulnerable to existing
antitrust laws?), particularly in the context of comparative international
law.

------
mcguire
" _What is more striking is that, in retrospect, the core piece of the
government’s case doesn’t make any sense: of course a browser should be
bundled with an operating system; a new computer without a browser would be
practically useless (for one, how do you install a browser?). Moreover, Apple,
not without merit, argues that restricting rendering engines to the one that
ships with the OS (all browsers on iOS have no choice but to use the built-in
rendering engine) has significant security benefits; this is debatable, but
ultimately, most don’t care, simply because browsers are means to information,
not ends._ "

Someone may want to revisit this argument.

1\. The same way Netscape achieved its original dominance?

2\. Integrating a _browser engine_ with the core operating system increases
security...how?

~~~
akkartik
This caught my eye as well.

 _"...a new computer without a browser would be practically useless (for one,
how do you install a browser?)."_

He's confusing network access with a browser, which seems an atrocious
mistake. You don't need a browser to support [http://](http://) links in the
OS.

------
martythemaniak
There's a lot of common sentiment around politicians that goes something like
"It doesn't matter if they got the details wrong, what matters is that they're
_essentially_ correct because they see the Big Picture"

We see this here, with fans of Warren saying getting things wrong is
irrelevant, because we all know FANG is too powerful and she says it. Thus,
quibbling over details is nitpicky pedantry. This tactic is also used by Trump
fans, who keep telling us we must "take him seriously, but not literally",
where any random nonsense he says is re-interpreted to hint at a larger truth.

In this world, Birtherism for example, has absolutely nothing to do with
racism and we shouldn't be so nitpicky, because it hints at the larger truth
that Obama's life-arch is very different from that of the average American,
and they are thus correct to feel that he is more "foreign".

Whoever you support, you should not let your guy/gal off the hook like this.
Once you start, there's no feedback mechanism to hold you back, you can
justify any nonsense using only bits of clever rhethric.

~~~
jtr1
This smacks a little too much of "both-sidesism." The substantive difference
between the two is that Warren will hire a cabinet of seasoned policy
specialists who have the bandwidth to write accurate distinctions into law,
while there was never any corollary action for Trump because birtherism was
never going to be translated into policy; it was a play to prejudice.

~~~
zaphar
Yes she will undoubtedly hire seasoned specialists to write her policy into
law for her. But will she be looking for people who are on board with her
framework or will she be looking for people who will challenge her framework
and change her mind on some things.

It's worth asking which of those it will be because that is what determines
how effective her efforts will be. It's not certain in my mind which one
she'll do and as written her proposal does fail to account for some of the
causes of the current crop of large scale goliaths in tech.

------
gimmeThaBeet
> the next generation of great American tech companies can flourish. To do
> that, we need to stop this generation of big tech companies from throwing
> around their political power to shape the rules in their favor and throwing
> around their economic power to snuff out or buy up every potential
> competitor.

This is part I find interesting. If there is a difference between the titans
of now vs old, its that they behave like Kronos, swallowing any potential
threat for fear someone may disrupt them as they themselves had done to the
original mammoths, not brushing off the threat they know is there, no matter
how small.

But, on a separate note, I think that the current anti-trust philosophy isn't
equipped to deal with companies whose business isn't driven by physical
products, or behaves a certain way in highly competitive markets (i.e. Apple).

Matt Levine often talks about how practically, modern anti-trust in the US
isn't there to regulate bigness, but protect consumers via promoting price
competition.

I can see that they have a lot of power, and some of the effects that power
can have, I just struggle to see how potentially impacting the way these
businesses operate leads to better outcomes for consumers and citizens as
customers.

~~~
sdenton4
The arguments are about stifled competition, rather than direct consumer
impact. There's less funding for early startups because it's hard to compete
with the Giants, and the Giants walk where they want to. As a result, no one
gets a chance to do better than the Giants are currently doing... Even if
consumers are kinda ok with how things currently are.

(Now, it's also pretty easy to imagine breakups going horribly horribly wrong
for consumers, precisely because consumers are pretty happy with the state of
play. I would hate paying for a calendar app at this point in history, and I
would also hate having to comparison shop for one that didn't suck...)

~~~
WaltPurvis
> _it 's hard to compete with the Giants, and the Giants walk where they want
> to. As a result, no one gets a chance to do better than the Giants are
> currently doing..._

I'm old enough to remember when Michael Dell said Apple could never compete
with giants like Dell and should just dissolve itself and disburse whatever
money it had left to shareholders, and almost every business pundit in the
world agreed. (I'm sure Michael Dell could tell stories about pundits who said
he could never compete against the giant among giants, IBM.)

I'm also old enough to remember when pundits said Amazon would never be able
to compete with giants like Barnes & Noble and Borders (Borders is a company
that doesn't exist anymore, but twenty years ago it was a giant — look it up).

I also remember when tiny little Google was nothing more than a feature
(search, how boring) that giant Yahoo would obviously just buy or duplicate.

And I remember when Netflix's stock price was so depressed you could have
bought the entire company for less than the production cost of one summer
blockbuster, and everyone was sure it could never survive competing against
Blockbuster.com. (Blockbuster is a company that doesn't exist anymore, but
fifteen years ago it was a giant – look it up.)

It's obviously hard to compete with entrenched giants, but I'm skeptical of
any notion that it's any different now than in the past (if anything, it's
probably slightly easier these days).

------
wslh
It is interesting that this discussion is happening but we need to apply
rational thinking in both ways (in favor and against).

For example, this paragraph:

> There is certainly an argument to be made that Google, not only in Shopping
> but also in verticals like local search, is choking off the websites on
> which Search relies by increasingly offering its own results. At the same
> time, there is absolutely nothing stopping customers from visiting those
> websites directly, or downloading their apps, bypassing Google completely.
> That consumers choose not to is not because Google is somehow restricting
> them — that is impossible! — but because they don’t want to. Is it really
> the purview of regulators to correct consumer choices willingly made?

The truth is that most consumers will not find alternatives because that
involves much work and the platform putting the offerings just in front
consumer eyes wins. Stratechery writes about this which is basically about UX,
attention and search economy. Google, for example, is making users believe
that they are showing the best results based on "an alhorithm" and not
hardcoding parts if the results to benefit them. This is a kind of dark
pattern that cannot be tolerated.

------
balthasar
If it makes more sense to keep these tech giants as conglomerates then there
exists other methods of using the resources more economically. For instance
lowering their transfer payments(raising taxes on their activities in
classical economics.)

------
monster2control
While I agree to some extend with the author, he too is making large leaps
without truly backing them up. He's fighting over semantics. While Warren may
be wrong in her history, she's not truly wrong in the results. Amazon does
exactly what she says, Amazon sees a Marketplace item is selling really well,
so they start to sell it too at or slightly cheaper.

The reason people tend to use Google over Yelp as in his example isn't really
choice, but a lot of times because people don't know. My mother as an example
has no idea of the difference between Google and the internet, they are the
same thing to her if Google promoted Yelp and other restaurant review sites
over their own, she might use them, but she only knows what google shows her.
This is a lot more common than people with an understanding of tech realize
for the average consumer.

Google's business should be that, advertising and showing accurate search
results. But they need people to stay on their pages longer, so that they get
more ad dollars, so they start duplicating other popular sites to maintain the
user's attention. They are in a position of power that no other company has,
and when they decide they are going to compete with your idea, they have a
completely unfair advantage, strictly because they have become, to many, the
Gatekeepers of the Web. They also provide the most popular Web Browser, which
defaults to Google. Think that's fair? Think the average consumer knows any
better.

His discussion of the Microsoft Antitrust is also a little dumb, while a
computer coming bundled with a Web browser does make it more useful, it was
the way that Microsoft did it, to ensure their only competition had no real
way of competing by using their dominance to make the web a IE only land.
Proprietary Web API that only worked in IE that didn't follow the standard
meant a lot of early developers only targeted IE because it was too hard or
expensive to target Netscape too. This was the heart of the antitrust, and
while Google may have emerged non-the-less, we would not have Firefox or
probably even chrome and they Web would definitely not be what it is today,
because Microsoft didn't foster innovation on the Web, that was thanks to
Mozilla and other open-source browsers. The web might have eventually become
what it is today, but most experts agree Microsoft is a large part of the
reason we aren't farther ahead because they killed competition at the drop of
a hat. The author seems to forget how bleak and shitty the web was when IE was
the only choice and Microsoft didn't update IE from version 6 for almost 5
years, when they finally released the garbage that was IE 7.

Tech is a much different beast and while Warren could certainly use some help
to clarify her reasons for wanting to break up these tech giants, she's not
completely wrong either. However, big tech isn't where her focus should be
completely. Comcast, ATT, Version. These companies essentially control the
internet backbone and are monopolies in many areas. Consumers have little to
no competition for how they get internet access and that's one of the biggest
issues.

~~~
dnautics
It wasn't Microsoft's meddling with the browser that was it's major
anticompetitive sin; it was it's control over the bootloader.

[https://birdhouse.org/beos/byte/30-bootloader/](https://birdhouse.org/beos/byte/30-bootloader/)

Yet here we are, and windows is not at all the dominant consumer os, and is
not the dominant general purpose os any longer.

~~~
re-actor
Windows still hovers around 90% market share, how is that not dominant?

~~~
SlowRobotAhead
He's counting mobile which is an "yea O.K." at best when he's also talking
about general purpose OS.

------
scottlegrand2
Amazon's cloud service has plenty of competition. No need to antitrust that
part in my opinion.

What's hard to disrupt is their amazing logistics network for delivering
impulse purchases on the cheap and fast.

But while I have nothing but contempt for sponsored products, enabling Amazon
arbitrage like it's eBay, and for deleting keywords to increase the size of
search results because that defeats my spearfishing for specific products, it
doesn't seem like something someone else couldn't build.

Start by addressing all of the bad customer experiences with counterfeit
products, badly shipped items, and lousy customer support. What makes this
difficult is that (beyond the challenge of execution itself) I don't think
traditional venture-capital would invest in this so you have a chicken and the
egg problem that I suspect will never be solved until someone manages to come
up with a business model better than Amazon's at a time when Amazon is too
large and inefficient to respond properly.

And I think they're getting there. I worked there for six years and left
recently. I'm never going back. The culture in my opinion is horrible. And
that's a second area where you could do better than Amazon and brain drain
them. I'm sure there's more.

------
georgeecollins
In the article: "Worst, it would do so by running roughshod over the idea of
judicial independence, invite endless lawsuits and bureaucratic meddling
around subjective definitions, and effectively punish consumers for choosing
the best option for them."

This seems like a FUD (fear, uncertainty and doubt) argument. How is breaking
up a tech giant going to create more of these problems than breaking up AT&T
did? We lived through that.

------
bhauer
> _Moreover, Apple, not without merit, argues that restricting rendering
> engines to the one that ships with the OS (all browsers on iOS have no
> choice but to use the built-in rendering engine) has significant security
> benefits; this is debatable, but ultimately, most don’t care, simply because
> browsers are means to information, not ends._

I care about being able to install an alternative browser engine on my
devices.

I think the reason we're today debating the risks of large social networks and
the tech titans in general is that there were finally enough voices of concern
that we could no longer be ignored. That had to start somewhere, and it did.
It started with a smaller group who have been raising concerns about these
companies centralizing user data and surveilling on their users for years. So
dismissing a potential future battlefield (browser consolidation versus
browser engine choice) seems an echo of those who dismissed concerns about
social network overreach five years ago.

That said, I personally favor promoting alternatives and educating people
about those alternatives. I don't use Facebook and yet I am able to easily
communicate with friends and family. Do I want to destroy or break-up
Facebook? Meh, not really. I'm fine with Facebook simply not being a part of
_my_ life. That includes blocking its domains via DNS. Improving the ability
for laypeople to fully block the various surveillance tools of these firms is
where I'd like to see more effort spent, not in application of government
power.

Looping back to the point above, the tough one right now is mobile: You either
choose the surveillance apparatus called Android or the walled garden called
iOS. There are some fringe options, among which Purism 5 looks particularly
promising.

------
abalone
I’m worried about breaking up Apple. Control of the App Store is how they keep
the iPhone secure and malware free. They make money on things sold through the
store, yes, but they make most of their money in the phone itself. Break that
up and now whoever runs the store has a lot more pressure to make money by
exploiting your data, cutting back on curation, etc.

~~~
yeldarb
I don't think that's what's being proposed.

It's that if they _are_ going to control the App Store they can't also
participate with their own apps.

For instance, Apple Music, which has gotten over 50 million paying users not
by being the best music app but by being pushed heavily by Apple as the
platform owner.

In Warren's plan, Apple Music could not be controlled by Apple. It would have
to compete in the App Store on its own merits.

~~~
abalone
_> For instance, Apple Music, which has gotten over 50 million paying users
not by being the best music app but by being pushed heavily by Apple as the
platform owner._

Apple Music has more music, a longer free trial and integration with iTunes
which lets you upload your own music and sync it to all your devices among
other features. By one estimate it converts free users into subscribers at 3X
the rate of Spotify.[1] That’s a sign of happier customers, not just being
pushed by the platform. Worth mentioning they pay artists more too.

And what are you saying, Warren would let Apple run the store but would have
to break off Music into a separate entity? All their other bundled apps too
like Maps? I didn’t get that from the proposal.. and it doesn’t strike me as
consumer friendly.

[1] [https://bgr.com/2018/09/25/apple-music-vs-spotify-paid-
subsc...](https://bgr.com/2018/09/25/apple-music-vs-spotify-paid-subscribers/)

------
oflannabhra
It seems like the overwhelming response to this article is that the author is
nit-picking.

I'd argue that the main point of the article is to drive to first-principles:
How did these giants get so big? What is fundamentally different about tech
companies that makes current antitrust legislation ineffective?

Antitrust legislation and enforcement has had several "generations" of
philosophy in the United States:

\- 1890s-1970s Sherman Antitrust Act targeting American Standard Oil. In this
era enforcement focused on how a company practiced its business, with a chief
goal being maximal competition.

\- 1970s-now After _The Antitrust Paradox_ [1] was published by Robert Bork,
enforcement shifted to "consumer welfare," with the chief goal being maximal
welfare.

(Planet Money is currently doing a series [2] that covers this)

I believe Ben Thompson is advocating that a new generation of philosophy needs
to begin, because "consumer welfare" cannot be directly applied to these
companies, their unfair advantages, or how to prevent the next "wave." Indeed,
their size is a direct result of their serving "consumer welfare" (ie,
consumers choose them because their offerings are best).

Nitpicking or not, I'd prefer the result of the current discussion to result
in actionable change, and I believe the points in this article (ie, the
"nitpicks" it makes) are required for such a result.

[0] -
[https://en.wikipedia.org/wiki/United_States_antitrust_law#Th...](https://en.wikipedia.org/wiki/United_States_antitrust_law#Theory)

[1] -
[https://en.wikipedia.org/wiki/The_Antitrust_Paradox](https://en.wikipedia.org/wiki/The_Antitrust_Paradox)

[2] -
[https://www.npr.org/sections/money/2019/02/15/695131832/anti...](https://www.npr.org/sections/money/2019/02/15/695131832/antitrust-1-standard-
oil)

------
Cyclone_
If she's complaining about those companies using private information for
profit she'll be quite surprised once she learns what happens on the internet.
Many political campaigns use some sort of data mining operations.

------
jondubois
>> This is decidedly not the case when it comes to enterprise-focused
startups: that sector is thriving with all kinds of new businesses being
created, acquired, and going public.

Bullshit. If you don't have VC investment under your belt, no corporation
would use your services. I have seen this first hand. They refuse to deal with
small bootstrapped players. It doesn't matter how great your tech is.

------
jondubois
>> and effectively punish consumers for choosing the best option for them

Consumers today are fat and lazy. Whatever small part of me is a consumer, I
don't care about that part. We should care about producers and their right to
participate in a fair and open marketplace. The biggest problem in people's
lives today is not related to a lack of options in terms of what to consume,
it is related to a lack of options in terms of what they can produce and how
they can produce it.

>> Start with the most obvious error: Bing was not even launched until 2009

Actually, her statement makes perfect logical sense. OP is the one who doesn't
understand history. If the antitrust lawsuits against Microsoft did not
succeed, Internet Explorer would have been the only internet browser which
could run on Windows (which itself was a near total monopoly in the personal
computing space) and therefore, through their control of IE, they could have
created Bing and made it the only search engine in the IE address bar. Maybe
they could even have blocked google.com completely if it started to become a
threat or maybe they could have added an overlay on top of google.com so that
they could replace Google ads with their own ads... The possibilities of what
Microsoft could have done to stop Google would have been endless if it wasn't
for the antitrust cases brought against Microsoft.

If anything, her point is too clever and too insightful for some people to
comprehend.

Basically Elizabeth Warren seems to actually understand how the world works
and she understands the huge impact of goverment policy on the economy instead
of pretending that there is no impact.

------
JackFr
When Disney creates a streaming service, are they using their market power to
crush Netflix? Or when Netflix promotes their own original content are they
using their platform to unfairly compete. When I buy store brand cough syrup,
rather than the name brand, am I being harmed? Is the cough syrup
manufacturer?

------
beager
I wish the author and anyone writing about this would disclose their positions
in these companies or that they have none. The merits of any argument on this
topic are only worth considering if we know that they're being presented in
good faith.

And to be clear, this applies to people who are pro-dismantling and anti-
dismantling.

~~~
monkbent
[https://stratechery.com/about/#ethics](https://stratechery.com/about/#ethics)

------
scarface74
After reading through all of the comments, I don’t see how many of the same
people who worry about the power of private companies are okay with giving the
government more power - the only entity with the legal right to take your
property, life, and liberty.

I’m much more afraid of government power than private corporations.

~~~
shadowtree
Try not paying a mortgage and see what happens. Banks can take away a lot,
starting with your credit score. And without government, you'd not even have
any recourse.

~~~
scarface74
If I don’t pay my mortgage - a contract that I freely entered into knowing the
consequences - why shouldn’t the bank take away my house? If the credit score
accurately reflected that I didn’t pay the mortgage, why shouldn’t that be
recorded?

------
specialist
Winner takes all (preferential attachment) is just math. This new trouble is
because the internet has resulted in fewer, larger markets.

Markets would need to become more fragmented or more fluid to mitigate winner
takes all. I don't have any notions on what to do about that.

------
objektif
I would take anything the tech industry and even tech focused journalists say
about this topic with a grain of salt. It is very likely that they have a
conflict of interest. Either they have shares or their jobs require not
alienating big tech.

~~~
monkbent
[https://stratechery.com/about/#ethics](https://stratechery.com/about/#ethics)

------
known
I've a simple/enforceable solution; Tax their revenues;

------
tabtab
Re: _" Bing was not even launched until 2009, eight years after the Microsoft
case was settled. MSN Search, its predecessor, did launch in 1998, but with
licensed search results from Inktomi and AltaVista; Microsoft didn’t launch
its own web crawler until 2005"_

Had MS not been pressured by anti-trust scrutiny, they may have bought out
early search startups. Therefore, MS may have been "late" to search due to
anti-trust pressure, and not because they fumbled, as the author suggests. (We
may never really know because this would have happened inside of Bill Gates'
head.)

Ironically, MS may have gotten its start by the fact that IBM felt pressured
to make an open-architecture PC due to anti-trust scrutiny. Otherwise, they
would have prefered to hard-wire their system for their own PC operating
system (created or purchased).

Re: _" of course a browser should be bundled with an operating system; a new
computer without a browser would be practically useless"_

Including and bundling are not necessarily the same thing. An OS can include
multiple browser brands and/or make it easy for new buyers to install another
brand.

Re: _" but rather the entire web; what ties things together are not APIs, but
links."_

But standards are needed for links & browsers to work right across brands, and
standards and API's are pretty much the same thing.

Re: _" Google would have emerged with or without antitrust action against
Microsoft"_

We don't know that. See above.

Re: _" Facebook was dominant before it bought Instagram and WhatsApp, Google
before it bought DoubleClick or YouTube, and Amazon before it bought..."_

True, but they were even more dominant after. It's a winner-take-all economy
these days, reducing competition. They may have got big being good, but that
alone is no guarantee they'll stay good. It's human nature to slack when
competition fades. It's why the Gov't is not efficient. (Google Maps has been
slipping in quality of late I've noticed.)

Re: _" the app market on PCs died in large part due to security concerns"_

Come again?

Re: _" Google, Facebook, Amazon, and Apple dominate because consumers like
them. Each of them leveraged technology to solve a unique user needs"_

True, but once big they start using other tricks besides being good.
Oligopolies and monopolies almost always jack up prices and limit choice once
competition goes away. MS left blatant bugs in MS-Access for several years
once they flattened the other desktop databases. Good capitalism is based on
competition. Competition shrinks, and corporate jerkification and slacking
goes up. They shift focus from making a better mouse-trap to keeping others
out of the mouse-trap business.

Warren's argument may not be perfect, but lack of competition clearly stifles
the market in my observation of several decades dealing with the likes of
Microsoft and the big telecoms, let alone the history of airlines, IBM, AT&T,
eyeglasses, etc.

------
nabla9
Stratechery is weirdly insular site. I don't know the background but it looks
like the writer/writers just read business news and create their own ideas and
don't like to study or read economics.

The "Aggregation Theory" is perfect example of this. It's like the author is
not aware that the idea he came up has not been under study for decades and
has well developed concepts, terminology and research subject.

~~~
hopler
Aggregation Theory is brand name he made up to market his consulting services.
He's not ignorant, he's selling. The business consulting and person
health/self-help industries are full of this sort of thing.

~~~
nabla9
Ah. That makes sense.

------
shadowtree
Classic framing problem:

Immediately assume it is wrong, then work backwards proving it, using minute
details.

Would be more interesting to assume we're doing it, then think through the
consequences. Or, define the stated end goal (fairer marketplace) and then see
if the break up helps.

Super irony: In the NGINX gets bought by F5 thread, people complain about AWS
being killer competition, ruining the market for open source.

The emotions here are also nationalistic, as it hits US companies. Breaking up
Ali or TenCent would get a different reaction.

