
The Google Antitrust Investigations – Learning from Germany’s Facebook Inquiry - partingshots
https://news.bloomberglaw.com/mergers-and-antitrust/insight-the-google-antitrust-investigations-learning-from-germanys-facebook-inquiry
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shadowgovt
Always useful to keep in mind in discussions of monopoly: there is a big
philosophical gap regarding why one might _care_ a monopoly exists, and that
gap can guide thinking on the topic in subtle ways.

American law tends to center around harm to consumers. By that reasoning, it
can be hard to prove a market with a single player is actually anticompetitive
if that player isn't muscling out better options for consumers from the space
(i.e. if they corner 90% of the market because they really do offer the best
value at the lowest price, who cares).

European laws tend to center around the philosophical core that the market
should be a level playing field _for producers or vendors_ , so even if all
other choices than the dominant player are worse for consumers, the market
needs to stay competitive so that business firms don't die and put a bunch of
people out of jobs.

It's useful to know where someone is coming from in considering topics like
this.

~~~
RcouF1uZ4gsC
> American law tends to center around harm to consumers. By that reasoning, it
> can be hard to prove a market with a single player is actually
> anticompetitive if that player isn't muscling out better options for
> consumers from the space.

I think censorship changes the equation a lot. Because of the right of free
association, a company can choose to favor a side of the political spectrum.
This is not problematic in the absence of a monopoly as there will likely be a
diverse range of companies, and new companies can enter that cater to one side
or the other.

However, if a company is a monopoly with a huge barrier to entry because of
network effects and/or data, it can be argued that the monopoly is harmful to
consumers on the other side of the political spectrum because they will not
get the chance to promote their views.

~~~
shadowgovt
The thing is, if Google decides to favor a side and Bing doesn't, Bing search
is just a click away. And if consumers value a politically-unbiased (or other-
biased) opinion, they can migrate to Bing, right?

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Moru
They need to know this bias exist first. And they also need to know that there
is alternatives. And then they also need to know how to change. This is a lot
to ask from a lot of people I'm affraid. Are you willing to bet your and your
countrys future on people switching to bing when someone manages to game
Googles algorithm to favor a side in the next election in whatever country you
live in?

~~~
shadowgovt
That's a large and complicated question. To a first approximation: if people
aren't smart enough to figure out if they need to do that and how to do that,
then my country's future is already in a tailspin because my country is a
representative democracy and a minimal amount of collective intelligence and
savvy is necessary to maintain such a system of government (hence, the public
schools).

~~~
inlined
Arguments about potential political bias are built on some pretty shaky and
dangerous hypotheses. At this point, the number of current and former
employees who have seen Google’s ranking algorithm and _not_ whistle blown
about some political signal makes its existence highly improbable.

~~~
shadowgovt
Definitely. To be clear: my previous lines of reasoning here were assuming a
political bias from Google and noting that even if it exists, the populace has
alternatives. I'm personally of the school of thought "Google seems to have
liberal bias in the US because relative to US politics, reality has a liberal
bias," and not of the conspiracy-to-delude-the-public school of thought. ;)

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robkop
"The court rejected the notion that additional data increases the barriers to
competitive entry, and indicated that this issue “requires closer examination
and a detailed explanation/review and conclusive presentation by the antitrust
authorities.”"

Maybe someone who knows more about this topic could clarify but this suggests
that the court believes network effects and scale don't affect the barrier to
entry? (pending further reviews)

I would be very interested in learning more about how they came to this
decision as from what I've seen a number of large tech products (e.g. youtube)
only seem to become feasible at extreme scale.

~~~
s3r3nity
So I strongly disagreed with that finding, but two possible lines of
reasoning:

1) Say you have a machine learning algorithm, where there could be two ways to
improve the outcomes: get more data, or pick a better model. Google's massive
dataset is a benefit/competitive moat of sorts to its search algorithm, but
_in theory_ you could build a better algorithm or model. You can see some
evidence of this in vertical specific searches (i.e. travel, shopping, etc.)
and in DuckDuckGo's success.

2) The other refrain I hear a lot is that this additional data is not "zero-
sum" \- i.e. multiple apps can collect my location data or email or [insert
data point here,] and I can onboard or offboard that data pretty easily.
Therefore this data isn't a limited resource that can be hoarded like a true
competitive moat.

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shadowgovt
(1) seems to strongly model how Google originally entered an already-packed
search engine market and came to be the dominant ecosystem player.

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djyaz1200
I would suggest that monopolies in one area are not that harmful in tech
because tech changes so rapidly that monopolies are quickly undermined by "the
next thing". What's damaging is when tech companies have a monopoly in one
area that they leverage to extend their monopoly into "the next thing". Famous
example is Windows bundling Internet Explorer. Google is now doing this kind
of thing... Example... Google used to allow businesses to add their own SMS
capable number to their "My Business" profile to allow customers to message
them. They have since removed that option pending the release of their own API
for messaging. They are using their monopoly in search to extend their power
into communication. This harms the businesses (like mine) that were assisting
companies with this messaging and that harm generates damages. The way for the
legal system to stop these monopolies indefinite expansion is to find the
actual places where they are restricting competition/innovation and generating
monetary harm to others in the process... point out these issues and make them
change their behavior, pay or both. If you disagree I'm interested in how you
think the power of these tech giants can be constrained?

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s3r3nity
> companies have a monopoly in one area that they leverage to extend their
> monopoly into "the next thing."

This is also illegal in the States for being anti-competitive. e.g. if you
have a dominant market position in one market, and leverage that to enter
another market and/or gain market share, this tends to be the source of many
Sherman cases.

Ex: Company X is a monopoly in market A but wants to enter market B. If I use
extracted rents from A to significantly undercut prices below competitive
level in market B to gain share, even if it's unprofitable in the short term -
THAT's a problem.

Note that startups don't get as much scrutiny when they do this, partly
because it's very rare for a startup to have dominant market share.

~~~
djyaz1200
It's not even that they are using "extracted rents from A to significantly
undercut prices below competitive level in market B to gain share" they are
locking us and other companies out of the market altogether. This is a crime
and it's happening right now.

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riazrizvi
The German court review of the investigation declared consumers are not harmed
because

> “ There is no evidence that Facebook obtains the consent of users through
> coercion, pressure, exploitation of lack of willpower or otherwise unfair
> means.”

> The court further found that “whether the users act out of indifference or
> because they do not want to spend the necessary time and effort … does not
> matter. Their decision to sign on is ultimately free, uninfluenced and
> autonomous.”

\- so it’s okay to obfuscate consumers with lengthy legal docs, that’s not
considered misleading (gutless but unsurprising ruling)

\- no mention of the competitive threat of 3 of 4 giant companies tracking all
our online behavior, giant companies with massive VC war chests or close ties
to the same, who can pick winners and losers to suit their interests and the
interests of their few board-seated investors

As far as I see, this is the death of free-market capitalism. We are entering
an era of gated-market capitalism. If will erode incentives and ultimately
productivity.

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eccodown
“[The court] found that consumers were not harmed by Facebook, which had
informed them about data use practices in a lengthy terms of service agreement
when they registered as users. “There is no evidence that Facebook obtains the
consent of users through coercion, pressure, exploitation of lack of willpower
or otherwise unfair means.” “

The court seems to have ignored the cases in which consent is never obtained.
Shadow profiling is still happening isn’t it?

