
Google and Facebook are monopolies. Does it matter? [audio] - sheana_ahlqvist
https://innovationforallcast.com/2018/11/14/the-case-for-regulating-tech-companies
======
umvi
If they are, they are not a traditional monopolies.

Traditional monopolies "control supply of a good or service, and where the
entry of new producers is prevented or highly restricted."

In this case, the supply of a good or service (social networking, webpage
indexing and searching) are not controlled by Facebook and Google because they
aren't finite resources. Anyone can index the web and anyone can build a
social network and Google/Facebook aren't going to crush you with lawsuits or
some other nefarious tactic to maintain their position (AFAIK). Entry of new
producers of these services is not prevented or highly restricted. New social
networks and search engines pop up all the time.

What Facebook and Google have is massive, large scale user loyalty. Despite
alternatives existing (Bing, Mastadon, DuckDuckGo, Myspace, etc.), users are
voluntarily choosing to use Google and Facebook. This is not a monopoly, IMO.

I think we need a new term for this situation.

~~~
belorn
The service google and facebook provide is access to their captured audience.
In the case of google that is the advertisement market with search and the
platform of youtube. It is rather commonly known that many video producers are
extremely unhappy using youtube but feel locked in since thats where the
audience is, and the audience is equally locked in since youtube is where the
producers are. New video platforms pop up all the time but with the captured
market being what it is there is a huge wall for both producers and viewers to
switch. A better video site have a hard time to compete with youtube, not
based on merit but based on market capture.

~~~
oconnor663
> not based on merit but based on market capture

I'm not sure about that distinction. Users prefer something about YouTube
compared to it's competitors. That's merit, even if it's not the particular
merits that content creators would prefer.

~~~
stcredzero
_That 's merit, even if it's not the particular merits that content creators
would prefer._

It's quite a broken concept of merit. It's the kind of concept of "merit"
where an offering with superior content and UX could come along, but it
wouldn't matter because of network effects.

The fact that so many content creators so badly _want_ a different platform
than YouTube to come into being (or for YouTube to change their practices) but
can't afford to move -- this circumstance is very telling. Likewise the number
of users who despise Facebook, but can't afford to leave.

------
ConceptJunkie
Here's the question you need to answer. If they are evil, can they cause a lot
of harm that will be hard to protect against or correct? If so, then it
matters.

Google and Facebook both want to be publishers when it suits them, and common
carriers when it suits them, and both have shown, I think we can all agree, a
propensity to be evil. I think it's telling that Google retired, "Don't be
evil."

I think Google is worse in that regard since they are so much more pervasive.
It's easy enough to permanently opt out of Facebook, but to avoid using Google
is difficult, if not impossible.

The other question is that do these companies allow for competition, not that
they are necessarily explicitly preventing competition (although they may be),
but whether or not they are so successful and have so much of a market share
that it is literally impossible to compete with them, and again, I think the
answer is yes. We see new competitors for Facebook on almost a weekly basis,
and none of them ever get anywhere, not because of whether or not they are any
good, but the fact that they can't compete because pretty much everyone who
isn't actively boycotting Facebook is on Facebook (including me).

As far as Google goes, the best we can hope for the is someone to be able to
compete with them in one particular area, and even that would be tough because
Google, like Microsoft or Apple, can throw so much money at a project that it
can succeed as a loss leader by simply outlasting any would-be competitor.

~~~
lolsal
> to avoid using Google is difficult, if not impossible.

Sincere question - why? Aren't there alternatives to all google services? I
have not opted out of using Google services, so I'm genuinely curious.
Everything I can think of has an easy alternative to use.

~~~
sample2
Maps is the hardest thing to move away from in my opinion. I bike everywhere,
and there is no competitor even close when it comes to bike directions within
cities.

------
kevinmhickey
I think their behavior matters more than their market share. As other
commenters pointed out, defining market share of an infinite resource is not
very useful.

These companies buy potential disruptors at inflated prices. Sometimes they
shut the disruptor down to maintain the status quo; sometimes they guide the
disruptor to create a new market. In either case, it creates a positive
feedback mechanism that increases their influence and further entrenches the
parent company in their customers' lives.

As a market (and governed society) we need to decide if this is something that
we want or not. It may be too late for pure market pressure to stop this
behavior, leaving it to regulators. Or we can decide it's acceptable and let
it go for the benefit of the innovations that these companies create.

I don't know if monopoly is the right word for this, but it's something and it
does matter.

------
yogthos
Of course it matters because these companies play a huge role in how we use
the internet. Facebook is creating a walled garden for their users where they
want to have their own closed version of the internet that they control.
Google wants to become the gatekeeper of the internet and get to decide what
websites people can view. AMP is a perfect example of Google using their
monopoly power to force websites in that direction.

------
truculent
Currently also on the front page of HN:

\- #5: Facebook reportedly discredited critics by linking them to George Soros
([https://news.ycombinator.com/item?id=18460406](https://news.ycombinator.com/item?id=18460406))

\- #10: Facebook’s weapon amid chaos and controversy: misdirection
([https://news.ycombinator.com/item?id=18460962](https://news.ycombinator.com/item?id=18460962))

------
Grieverheart
Not strictly monopolies, but they are so large they can move capital around
making many services/products artificially cheap for the client. In my opinion
this makes competition unfair and constitutes a monopoly in some sense.

------
ABCLAW
Oh boy - it's that time again.

Time for a bunch of people with no competition law or economics background to
get upset over the term 'monopoly'.

~~~
biglenny
You seem to have a unique perspective based on your comment history. Could you
explain why or why not you see F/G as monopolistic forces? I have no opinion
on the matter, but I'm trying to understand.

~~~
ABCLAW
I think the all or nothing discussion linked to the word monopoly is what
causes most of the issue.

Abuse of dominant market position is the most accurate developed term of art
to describe what these firms do. But the devil is in the details - the
treatment, definition and remedies associated with the offense are fairly
arcande, and seemingly innocuous terms can make or break the entire framework.

Here's the EU's brief blurb on the issue:

[http://ec.europa.eu/competition/consumers/abuse_en.html](http://ec.europa.eu/competition/consumers/abuse_en.html)
[http://ec.europa.eu/competition/antitrust/overview_en.html](http://ec.europa.eu/competition/antitrust/overview_en.html)

This is, however, just the basic 101 theory. The reality is a lot less rosy.
In actuality, almost every level of the pro-competitive state regulatory
framework is subverted, and that's by design. A state benefits from
corporations that abuse their dominant market position and act
anticompetitively if the harm suffered is less than the benefits. For
instance, if the harm is primarily suffered in foreign markets, or by a
different financial class, etc.

------
mises
At this point, Google in many cases offers the best service: DuckDuckGo is
good, but Google is better. It is so good that it indexes the CIA's stuff:
[https://thehill.com/opinion/technology/416215-cia-
operations...](https://thehill.com/opinion/technology/416215-cia-operations-
in-iran-china-compromised-for-years-because-of-hubris-and-a)

This is without even considering google dorks, possibly one of the most
powerful tools infosec researchers (or even average people) have to refine
queries.

In the case of Facebook, it offers the best product because its product is
really people (the whole "you-are-the-product" issue). Facebook has the most
people, therefore the best product.

Offering the best product is not a monopoly. Don't forget that MySpace was
"the" social network before Facebook, but was displaced. These are not
necessary traditional monopolies, and therefore should receive consideration
on how they should be treated.

~~~
neolefty
It would be much more difficult to displace Facebook than MySpace — it never
reached 100 million unique users per month, but Facebook is over 2 billion.

~~~
mises
Agreed. That said, I'm wondering if we can justifiably punish people for
success. Punishing anticompetitive practice is good, but success itself
shouldn't be wrong.

------
orteam
I don't get the point on complaining over the "mindshare size" of the faang
products. As, I don't think it's a thing you can complain about. If it were,
the french would be right to complain about English mindshare globally (they
can complain but they can't sue). Also, you can compete locally with faang,
like China and Russia are doing. Admittedly they use restrictions on foreign
tech, but you also need to have high quality products that are catering for
the local market. EU are the ones that feel uncomfortable being dominated by
US tech companies, but it's not like they don't have options.

------
hildaman
I don't think they are monopolies.

I use DuckDuckGo for search & Twitter for social media. I find discovering new
things/People on Twitter more interesting than the sclerotic family/friends
stuff on Facebook.

~~~
paulddraper
See also: Bing, Instagram, Snapchat, Yahoo (though Yahoo now uses Google
because Google was better).

~~~
hildaman
Instagram is Facebook owned now.

~~~
paulddraper
Proof of how successful they were as a competitor to Facebook, rather than
being outcompeted by it.

------
amelius
Meanwhile, FTC employees are sleeping their way to the bank, as they seemingly
couldn't care less. Let's hope that the EU finds some inspiration.

------
BurningFrog
I'm old enough to remember when IBM was the unbreakable monopolist that would
rule the computer industry forever.

Then Microsoft was the unbreakable monopolist that would rule the computer
industry forever.

Now it's apparently FAANG.

Just the fact that we have _five_ monopolists should be enough to show
thinking people that it's not a monopoly situation, if history isn't
convincing enough.

~~~
JumpCrisscross
> _Then Microsoft was the unbreakable monopolist that would rule the computer
> industry forever_

If Microsoft controller browsers, would Facebook and Google and Amazon and
Netflix have had the neutral ground on which to grow and thrive?

------
jumpdxb
Google and FB generate superior returns which should attract new entrants by
definition. Which is not really happening because of structural and strategic
entry & exit barriers. Network effects, economies of scale, switching costs,
etc. Google and FB are not getting disciplined by hit and run competition, its
an uncontested market.

------
digitalneal
Anytime a social network starts to show threatening growth, Zuck tries to buy
them.

------
nradov
You can consider almost any large company a "monopoly" if you define the
market narrowly enough. I'm not convinced that this is a useful exercise.

------
nabla9
The comments in social media related to the issue get repeatedly stuck into
the term monopoly usually in the title in the article. This happens again and
again. Please everyone. Get over it.

The context is monopoly power, market failures, unfair competition and
antitrust law.

Networked plaform technologies are very different from traditional monopolies:
zero price, increasing returns, imperfect competition, spillovers everything
is very different

~~~
gajeam
This view of "traditional monopolies" isn't actually that traditional. From
the end of the Gilded Age to through the LBJ administration, antitrust law was
focused on reducing market concentration, barriers of entry, and anti-
competitive behavior. Only in the 60's did Robert Bork and the Chicago School
start to chip away at this way of thinking. By the end of the Reagan
administration, Bork's idea that a firm is only a monopoly if it reduces
consumer welfare (aka raises prices.) [0]

Google and Facebook have taken full advantage of this new definition. They
provide their products for free, acquire competitors without a peep from the
FCC (Waze, Instagram, WhatsApp), invest heavily in corporate lobbyists, and
have the fastest connections by colocating their data centers and building
fiber optic cables. How can a new competitor be expected to lay undersea fiber
optic cables?

[0] Tim Wu, "The Curse of Bigness: Antitrust in the New Gilded Age", 2018

~~~
nabla9
There are two problems. Enforcing good old-fashioned antitrust system has
effectively stopped and there is no new solutions to new problems.

------
blakesterz
I guess we won't know for a few years still, but it seems like we're seeing
the decline of the Facebook monopoly now. At least in terms of Facebook.com,
maybe not all the things they own, but just Facebook as a social site. There
seems to be soooo much going wrong for them on so many levels right now, it
would surprise me if we're still talking about them in the same terms in 3-5
years.

------
StreamBright
Yes it does and it should be dealt with.

------
hartator
What matter are laws that are making harder to compete with them.

Thanks to GDPR, you’ll probably never see a fb competitor emerge in Europe for
example.

~~~
gajeam
Why is this the case? Don't the data portability rules make it easier for
Europeans to be able to switch to a Facebook alternative?

~~~
paulddraper
The argument for this point of view is that regulations like GDPR (or other
things like corporate taxes) are easier for companies with gobs of capital and
armies of lawyers/accounts to accommodate than companies lacking those
resources.

A tall person may not appreciate flood waters, but a short person appreciates
them even less.

------
aligshow
Google is trying to be "the academic company". As a result, it has infiltrated
and infested UC Berkeley, Stanford's main competition (Google is a Stanford
company).

There is no place in the private sector for wannabe universities. We have real
universities for that. Greed and knowledge do not mix.

------
thwy12321
These companies could disappear over night. Is being a monopoly for a decade
really a big deal? It's completely over hyped how much control they have, for
now they are dominant, but five years from now its entirely possible that they
arent. Also, they have produced so much for the world of technology,
essentially creating all of the big data infrastructure technology, and (bare
with me here) react which is having a material impact on the terribleness of
front end frameworks. The deep learning revolution was started by cheap
compute which sprang out of google. This whole monopoly business is so
overplayed.

~~~
PavlovsCat
> These companies could disappear over night. Is being a monopoly for a decade
> really a big deal?

They could also not disappear. Is being a monopoly forever really a big deal?

> they have produced so much for the world of technology

As did and do _so_ many others. What of what they made could not have been
made with ethical behavior, or more competition?

> they have produced so much for the world of technology [..] This whole
> monopoly business is so overplayed.

Nobody said a monopoly cannot have any positive effect besides the negative
ones. Refuting _one_ argument, and one that nobody even makes, doesn't prove
that anything is "completely hyped". That would require not just refuting one
actual argument, but all of them, hence "completely".

How would you compare it with the opportunity costs, with "what could have
been instead?" We usually consider that zero, because it can't be simply
measured. That doesn't mean there wouldn't have been _anything_ , or just more
Microsoft and IBM, so to speak. It's like weighing two things against each
other, and the one scale is welded to the frame.

Insofar competition leads to innovation, your one argument [for a monopoly
being good] kinda backfires. They did that with barely having to try; imagine
what they could do if they _did_ have to try.

