
Tech and Antitrust - kaboro
https://stratechery.com/2019/tech-and-antitrust/
======
spunker540
Couldn’t agree more with the analysis- I just wish some of the politicians
running on a “break up big tech” platform could show they’ve thought about
these issues half as much as the author has. They seem to mostly be appealing
to voters emotionally without ever diving into the significant details like
“what is a monopoly”, “are these companies monopolies?”, “what good will come
from breaking them up?”

~~~
jerf
Well, you can't completely understand the calls for breakup until you
understand that the politicians don't really care about the traditional
monopoly issues. They're upset that Facebook, Google, and Twitter have as much
control over the political discourse as they do (note the missing Amazon in
that list, modulo the fact that Amazon's CEO happens to own a major
newspaper). If society is like a big collective brain as it thinks about the
big issues, those companies have installed filters on a significant portion of
the neural links and they aggressively use them.

I personally think this is a bad thing as well, and fully support breaking
them up for this reason alone. In a perfect world, we'd carefully and
thoughtfully craft new laws to address this matter; in reality, we're going to
probably "creatively" read some existing laws in new and unpredictable ways to
get some unprincipled compromise of what several groups want.

So I'm likely to be both unhappy at the theory and the practice of how they
are actually broken up. Isn't government fun. But I do agree they need to be
broken up.

This analysis is then useful as a conventional reading of anti-trust laws, but
I fully expect that if a conventional reading of the laws won't get it done,
then either new laws are going to be made or unconventional readings will be
made.

I also think that these platforms are basically boned in terms of voters and
public opinion. Consider two sets of forces on these platforms: First, the set
of forces that want to insist that they carry any given piece of speech, and
second, the forces that want to insist that they censor any given piece of
speech. (Observe I'm _not_ breaking this up on conventional political lines;
all sides have their lists of both types of things they want.) I submit that
there simply is no solution for a single universal platform that combines all
of them. Almost all even remotely controversial speech is going to be on the
mandatory list from one party and the banned list from another, which means
that in the public opinion war, every political side is going to have an
endless list of grievances against these platforms, literally no matter what
they do. There is no solution for platforms at this scale. This is ultimately
what is going to kill them; even if the government doesn't break them apart,
something will.

In fact, in my first paragraph, when I said they "aggressively use" the
filters, I'm not saying they even necessarily have a choice, or particularly
accusing them of "incorrect" usage. I think at this point, they're simply at a
size where they're boned no matter what they do with those filters. I do have
my own list of particular localized grievances, but if you don't have one now,
you probably will soon. The latest YouTube demonetization purge is hitting a
lot of weird channels, including... a channel dedicated to making completely
a-political cartoon parodies of the Final Fantasy games? Everyone's going to
be pissed at _something_. I don't think there's ultimately a solution to "the
one big site that everyone uses". Applications to the stock price of the
relevant entities left as an exercise for the reader.

~~~
woodgrainz
> They're upset that Facebook, Google, and Twitter have as much control over
> the political discourse as they do

This is the part that resonates with me the most. It's about power. The tech
giants have amassed power in a way not seen before. It's different than
Standard Oil and the Bell phone monopoly. On the balance, consumers aren't
being harmed as they would in a typical antitrust scenario.

~~~
AlexandrB
> On the balance, consumers aren't being harmed as they would in a typical
> antitrust scenario.

I would argue that they _are_. If private info is the new currency we're
paying for access to these services, the price has been constantly increasing
as more and more information is collected through tracking and "partnerships".
This is one reason why it would be nice to put a dollar value on private data:
to make this price increase obvious.

Real competition might look like delivering similar services without requiring
as much tracking data to do so.

~~~
jerf
One of the problems with claiming that customers are being harmed by the
privacy invasion is that the companies can demonstrate that they are only
making a few bucks per year per customer on these "privacy invasions", making
the most naturally _legally defensible_ definition of the "damage" being done
only a few bucks per year, per customer. The argument at that point that the
customer receives far more value than that is very, very easy.

Showing that they do much, much more damage to privacy to make that several
bucks is going to be legally challenging, and trying to convince a judge that
the damage is yet higher because of my aforementioned nebulous concerns about
"the social fabric being censored at the metaphorical-neural level" is going
to fail unless you get a particularly activist judge, because they're not
supposed to be ruling on the basis of such abstract concepts like that.
(That's supposed to be what Congress is making laws based on.)

One of the challenges to my mind here is precisely that on the whole,
individual customers _aren 't_ being harmed. On the whole, individual
customers come out ahead. For most people, this is an acceptable bargain and
they are substantially on the winning side of it. It is only once a single
entity aggregates substantially the entire market that society and democracy
starts to be substantially harmed, even as at every moment, there was never a
transition point where individual customers changed to being harmed.

~~~
Nasrudith
I think the issue of pricing is harder than that - damages and the ammount
earned don't inherently line up.

If I sit at an intersection and record the cars passing and sell it to the
municipal government for say $500 and I note 250 cars they didn't lose $2
each. Just because you can make money off of someone else /doesn't/ mean it is
exploitation.

Conversely if someone broke a MRI Machine to steal the copper wire and sell it
for $5 it doesn't mean the hospital suffered only that much in damages.

~~~
jerf
"I think the issue of pricing is harder than that - damages and the ammount
earned don't inherently line up."

If you read again, you'll see I acknowledged that already. It's just that the
_easiest_ number to defend as the "damages" is the amount earned. But that
number is so low that we're going to be trying to claim numbers literally 3 or
4 orders of magnitude higher. That's going to be much _harder_. Not
necessarily impossible, but much _harder_.

------
dunkelheit
As Peter Thiel wrote in Zero to One, both small and giant companies will try
to creatively redefine the definition of the market they are addressing, in
the first case claiming that they absolutely own a small market segment of
questionable relevance and in the second case claiming that they are small
fish in a much bigger market than the one where they are enjoying a monopoly.
So the results will be determined not by some objective standard but by
relative political power of these companies and their adversaries.

As for durability, I personally fail to see how google and facebook are not
durable monopolies - the network effects are so strong. In google's case it is
even more than that - it is almost impossible to have a product of comparable
quality without the users and the information about their behaviour, which is
impossible to obtain because everyone uses google. Gone are the days when good
search rankings could be inferred from the link graph of the web.

~~~
autokad
to me, ML creates an interesting question concerning monopolies when strictly
looking at data-results. If I have the best data possible, you can't build a
better-competing model. However, forcibly splitting data up among competitors
creates worse models, which is not best for consumers.

------
asark
Apple's walled garden's the only place a pro-consumer, pro-privacy stick has
been successfully used against the broader software industry. The only
alternative to achieve similar levels of privacy and safety are a combination
of hyper-vigilance and just _not doing very much_. I'd hate to see that little
walled city of sanity breached until the worst behavior of the various
software snoops (Google, Amazon, Facebook, but also credit card companies and
others) has been legislated out of existence, assuming that ever happens.

~~~
bduerst
>Apple's walled garden's the only place a pro-consumer, pro-privacy stick has
been successfully used against the broader software industry

Except that Apple has given the iCloud encryption keys of millions of Chinese
users to the Chinese government [1], after forcing users to move their data to
the Chinese data centers [2]. This gives the Chinese government access to
Apple user photos, docs, messages, and other user data at rest, demonstrating
that Apple is more for-profit than for-privacy.

[1] [https://www.theverge.com/2018/7/18/17587304/apple-icloud-
chi...](https://www.theverge.com/2018/7/18/17587304/apple-icloud-china-user-
data-state-run-telecom-privacy-security)

[2] [https://appleinsider.com/articles/18/02/24/apple-to-move-
chi...](https://appleinsider.com/articles/18/02/24/apple-to-move-chinese-
icloud-keys-to-china-servers-opens-door-to-government-data-requests)

~~~
oarsinsync
> demonstrating that Apple is more for-profit than for-privacy

In China. In the other 194 countries in the world, this isn't true.

~~~
bduerst
Intentionally ignoring millions of Apple customers is a _No-True-Scotsman_.

~~~
oarsinsync
Fair.

Do you have any suggestions for any alternatives that are better in regard to
user privacy?

------
chmaynard
From the article:

"Apple is leveraging their iOS monopoly into an adjacent market — the digital
content market — and rent-seeking. Apple does nothing to increase the value of
Netflix shows or Spotify music or Amazon books or any number of digital
services from any number of app providers; they simply skim off 30% because
they can."

If I download and use the Netflix app, Does Apple really take 30% of the
monthly Netflix subscription payment? If so, that seems unreasonable because
Netflix is doing most of the work of streaming the content.

~~~
p_roz
It depends on whether you sign up within the app or sign up on the Netflix
site and simply log into the app. Paying through Apple will give them the 30%
cut.

~~~
bilbo0s
OK. Then that's legal.

If you could _only_ get access to it through Apple, that could be illegal. Of
course, only to the extent that Apple is a monopoly. Or at least a majority
market holder? So, yeah, trying to argue that in front a 9 supremes, who are
sticklers for getting this sort of thing right, is not likely to go well. We
really should have changed the laws, and only after the laws were changed,
should we have gone after the tech companies. Would have been much more
successful.

Doing what we're doing is just a display for the purposes of getting votes.
It's like the politicians don't even think the issue is serious, they just
want to try to get some votes.

Which, I suppose, is their only real goal anyway.

~~~
bduerst
The difference being, that _all_ app subscriptions and payments made on device
are forced to use Apple payments as a supplier. The fact that Netflix is
diverse enough allow an independent web payment option is a red herring,
because there are many iOS apps that are not. Consumers are forced to use
Apple payments by Apple.

------
groveriobio1264
Nutty idea for discussion. Should the US go in the other direction and
officially sanction some of these monopolies with the tradeoff that they have
to accept some extra oversight/regulation (ex. telecoms)?

It could be argued that some sort of oversight of these things is sorely
needed. The well documented ability of mobile apps to influence behavior, and
collect and exfiltrate the detailed personal data of US citizens at population
scale presents an unprecedented national security risk - especially in the age
of AI.

~~~
Nasrudith
That approach is more sensible for exlusive markets like utilities. If a
better product exists they can go the way of Yahoo quickly. Now it could be
argued they have too much inertia and splitting wouldn't actually help much -
even so it raises another big question.

What regulation would even help? What is the actual explicit problem that
could be addressed and is it even something addressable constitutionally?
There is plenty of sloganeering and FUD but little thought into what would
help from even limited to first order effects. Break up Amazon retail into
five and the one with the name would win.

Also how does that qualify as a national security risk? I know the term is
used as a thought terminating cliche for "shut up and obey" but I just don't
see it in any way which respects democracy. People have a right to communicate
with the outside world which allows data gathering and influence. Taking
action to leave people completely "uninfluenced" would be totalitarian
control.

The "unprecedented threat" reminds me of the anti-Catholic "if elected they
would be a puppet of the Pope" \- which shows utter historic ignorance given
how kings interacted with the pope. He wasn't close to being in charge in a
far more homogeneous and theocratic environment.

------
sinemetu11
Is all this antitrust talk directed at tech companies not just a way for media
to direct that energy away from themselves?

------
ilaksh
These companies provide valuable platforms. If you want to bring competition
back, you will need a way to get ubiquitous platforms without the monopolies.

The platforms are going to be provided by decentralization technologies. Such
as cryptocurrency, various content-centric networking, p2p everything apps,
etc. Federation, where people host open services on servers and connect them
is more popular now and may be a significant factor for awhile also. I assume
p2p systems will eventually be more widespread once people figure out how to
do it, since p2p can scale better/more easily.

~~~
Barrin92
I really don't see how p2p scales better in economic terms. Because crypto
currencies lack central authorities they need mechanisms that are highly
energy intensive to guarantee consensus, thus driving up prices for
transactions. The same thing is true for a federated social network. The sum
total of all federated instances is harder to manage than facebook.

The benefit of decentralisation is redundancy and fault tolerance, not the
ability to scale.

~~~
ilaksh
There are less energy intensive cryptocurrency scaling techniques.

~~~
Barrin92
true, but they'll never be as efficient as a centralised system, because
intrinsic to the trustless design is a proof of work or proof of stake, which
is to say the investment of resources to drive up the cost for any given
actor, to make owning the system impossible. There is no way around this by
design.

------
beat
We have two "monopoly" problems here... the legal, and the political. Even for
companies that are probably not legally monopolies, like Facebook, consumers
are very uncomfortable with them, and politicians are leveraging that consumer
fear. So if antitrust doesn't work, think about where politicians might turn
next.

Or they may just go on making blathering promises with no intent to keep them,
like they do about, say, Citizens United.

