
Break Up the Tech Giants? No, Just Level the Field - mcone
https://www.bloomberg.com/view/articles/2017-09-11/break-up-the-tech-giants-no-just-level-the-field
======
payne92
TL;DR _The tech monopoly problem is because Silicon Valley has convinced
regulators these firms are entirely new things, not subject to existing rules.
Google+Facebook+Amazon+Uber+etc should (a) pay their full corporate taxes and
(b) be treated like utilities. For example, if Facebook were a media company,
they 'd be liable for user content._

Uber flaunting taxi regulations is a special case (IMHO).

Outside of that, be careful what you ask for. In the US, certain utilities are
absolutely NOT liable for user content. If you use a cell phone to plan a
crime, Verizon is not liable for what is said or written.

I do think the emerging tech monopoly is a problem (Google, Apple, Amazon,
Facebook), but it's not because of lack of application of old regulations to
new use cases.

It's because: technology moves quickly, there are strong network effects, and
law+regulations have failed to adapt quickly enough.

~~~
pfarnsworth
I love how people are now all of a sudden defending the "Taxi regulations" as
if an artifical monopoly that was serving no one's best interests except for
the monopoly was somehow a great thing. It's a lazy argument, especially for
HN where old industries with arcane rules are meant to be broken. I guess you
don't remember how shitty taxis were pre-Uber, when calling a cab 1 hour
before you needed it was required, and you wouldn't know if they would
actually come or not. And after waiting 1 hr they didn't come, you would be
shit out of luck.

Meanwhile, in every city where Uber pops up transportation gets better. Taxi
monopolistic laws were meant to be disrupted, and I'm glad Uber has done it.

~~~
DanBC
> you don't remember how shitty taxis were pre-Uber

I don't remember that, because I live in a country that doesn't have awful
taxis, and where Uber has little to offer except dubious insurance status.

~~~
pfarnsworth
You probably never use taxis in Vancouver then and/or you don't understand the
value proposition that Uber brings. There are tens of thousands of people in
SF alone that now earn money that previously didn't, and customers that have a
much better transportation option that they are willing to pay for.

[https://www.bcbusiness.ca/vancouver-has-fewer-taxis-than-
any...](https://www.bcbusiness.ca/vancouver-has-fewer-taxis-than-any-other-
canadian-city)

------
AndrewKemendo
_If the companies are merely facilitators and marketplaces, they should treat
everything and everyone using them exactly the same._

That's a really interesting proposition and one that I think bears looking at.

Facebook and Google are effectively trying to become privately owned
utilities, aka natural monopolies, for access to the internet. Facebook with
their internet.org and google with googlefiber. So there is a case to make
there for those companies being looked at like utilities.

However I'm not sure how Amazon fits that narrative. Amazon Marketplace is a
tiny chunk of their sales revenue, despite it becoming the largest part of
their fulfillment. AWS isn't infrastructure in the same way as facebook and
google are trying to do.

I think it's too far a reach politically - they can't even get ISP's
classified as utilities.

I think the major problem here is that because these companies don't need to
operate from a fixed location in the same way a steel mill, power plant etc...
would that there isn't really that many ways that the government can muscle
them. They feel the pressure and they just pick up and move (legally first) or
shift workers around. So regulators don't have a framework for how to muscle
these companies in the same way as old industry.

~~~
PaulHoule
Hasn't Google Fiber stopped expanding? Many people in America are still stuck
with Frontier, Century Link, etc.

~~~
plandis
And ironically, if anything Google Fiber didn't create a monopoly for Google;
it pushed other ISPs to increase their quality of service for consumers. I say
this as someone who recently was able to get fiber-to-the-home from
CenturyLink.

------
sol_remmy
_Software patents are the real problem here_.

The tech giants have locked competitors out of using their technology using
government patents. Amazon held a patent on "1-click checkout" from 1997-2017.
Google has patented ALL of the good web search algorithms.

[https://qz.com/1057490/a-patent-that-helped-amazon-take-
over...](https://qz.com/1057490/a-patent-that-helped-amazon-take-over-online-
commerce-is-about-to-expire/) [http://searchengineland.com/google-granted-
patent-for-panda-...](http://searchengineland.com/google-granted-patent-for-
panda-algorithm-187573)

We as a society to move past patent regulations, they are artifacts of the
industrial revolution and are abused by powerful corporations. Without a team
of lawyers, a simple website will be sued out of existance.

~~~
NickNaraghi
While I agree with you about patents being the problem, I'm not sure that
moving past patents entirely is the solution.

Can you think of a better way to fairly incentivize and compensate innovators
while solving the problem at hand?

~~~
majewsky
I think the main problem with patents is their duration. 20 years is absurdly
long for the software space. It _may_ be justified for physical objects since
making a hardware patent into a marketable product usually requires more
investment and time to get to market (e.g. to design and build a factory
producing the product), but in software, a 20-year-old product is usually
already on display in some museum.

If I had to make a change to software patents _right now_ , I would shorten
them to five years. Maybe less.

------
m12k
The anticompetitive effects of the near-monopolies enjoyed by companies like
Facebook, Google and Amazon preventing other players from entering their
markets, and the anticompetitive effects of them using IP and tax loopholes to
pay little or no tax are two different problems. We obviously need to fix the
latter, but this article does nothing to address what could even be done about
the former.

------
mi100hael
Uber's ability to skirt cab regulations in particular has always baffled me.
They've always argued that their drivers are independent contractors, not
employees, and that they merely facilitate the arranging of rides & fare
payments. If that's actually the case, then how are the drivers not textbook
cabbies? How does a driver using an app to receive requests for rides differ
at all from a driver using a phone dispatcher to receive requests for rides? I
can't think of any difference that should exempt Uber drivers from submitting
to the same regulations as regular cabbies other than the argument that
existing regulations are obnoxiously burdensome and often protectionist.

~~~
dantheman
Taxis are allowed to pick up people that are hailing them on the street. Uber
works much a like a private car company does - you call them and they send a
car. So it is different than a taxi. The difference between uber and a private
car company is that uber can respond as fast as a taxi.

------
curiousgeorgio
> Some 45 percent of American adults get news from Facebook. Google's search
> market share in the U.S. approaches 86 percent. About 43 percent of all
> online retail sales in the U.S. last year went through Amazon.

Why is this a problem? No one forces people to get news from Facebook, search
results from Google, or online purchases from Amazon. If any of these
companies does or starts doing something that is truly detrimental to
consumers, the switching costs are low for all of those products, and there
are plenty of competitors ready and able to steal marketshare if they can
offer better alternatives.

Some people worry about monopolies, but I don't - they only have power when I
choose to give them my money (unlike governments who keep power by force). I
worry about society being lulled into the enticing-but-false narrative that we
need more regulation in every corner of our lives.

~~~
tabeth
> Some people worry about monopolies, but I don't - they only have power when
> I choose to give them my money

So if you live in rural Alabama and only Comcast services your area, because
they're a monopoly, and your tech job requires internet what are you to do as
an individual?

1) Further the monopoly and buy Comcast internet

2) Decide to not have internet and inevitably lose your job

3) Try to compete, but fail to have the start-up costs as you're a small
player.

~~~
curiousgeorgio
Comcast isn't the problem, but the regulations making it more difficult for
competitors to operate in many local markets _are_ a problem. The governments
are literally creating the anticompetitive problems you describe.

~~~
tabeth
That's irrelevant. You said that you don't worry about monopolies. They're
clearly a problem, regardless of _why_ they exist.

~~~
curiousgeorgio
It sounds like you're only looking at half of what I said. I don't worry about
_monopolies_ themselves because if the market were left alone, they wouldn't
be a problem. But I _do_ worry about anticompetitive practices enabled by
unnecessary regulation. That's exactly what is allowing Comcast to abuse power
in certain markets. Hence, the problem lies _not_ in monopolies, but in the
government.

~~~
sidlls
> ...if the market were left alone, they wouldn't be a problem.

That's an interesting claim. What evidence do you have that supports it?

~~~
curiousgeorgio
Historically, if we look at societies with more market freedom vs those with
more government control, it's pretty clear which ones do better. If you don't
believe that, you may want to try living in Venezuela or North Korea.

~~~
sidlls
It's not at all clear actually.

------
krupan
Interesting article. I don't think Facebook or Google set out originally to be
newspapers, but the author of this argues that that is essentially what they
have become and they should therefore be subject to the same regulations and
taxes as all ad-driven media businesses. Makes sense to me. I think we all
cheered them when they were using technology to seemingly turn the archaic
media company model on it's head (and give us "free" services), but when it
came time to pay back investors Google and Facebook quickly adopted the same
old model of selling advertising space.

~~~
metaphorm
I think they stumbled into being media companies out of naivety and not
understanding, initially anyway, that they had duplicated a media company
business model with everything except the content generation. they simply
replaced the content generation part of the business model with what was being
given to them, for free, on the internet by users and other original content
creators.

when they dropped their initial naivety and took stock of what their business
really was it was sufficiently obvious to them that they were media companies
and that selling ad inventory was their business. they now fully embrace being
media companies but are able to do so in a way that has, at least so far,
evaded the traditional cultural and legal regulatory frameworks that other
media companies deal with. I think this era will come to an end rapidly
though.

------
amelius
> If it is recognized that Facebook is a media company, it will be legally
> liable for its content.

Yes, and to add to that: Facebook is _also_ a telecommunications company
(their WhatsApp provides a messaging and voice platform). As such, they should
open their network for competition. And they should not be allowed to harvest
private information about users.

------
throw2016
There are a largish number of issues converging here. Broadly the naive idea
that power and control is used for good needs to be jettisoned. It only seeks
its own concentration with negative outcomes for everyone else, and thus
requires societal intervention before it becomes a problem.

Neither Google or Facebook are innovative. Search is not innovation, for
Google efficient, yes. Facebook is timing. The bulk of the hard work in
computing is the result of decades of work by academics funded by the public.
TCP/IP is the innovation. So market fundamentalists prone to come in when all
the hard work is done and see perfect markets everywhere have little ground
for complaints about innovation.

You can already see abuse of power in Google and Facebook. Zuckerberg's
political ambitions will prevent egregious bad behavior for now but that just
underlines the potential for abuse.

There are other issues too. Lobbying, inability to apply anti-competitive laws
- amp is a glaring problem, and the wild west situation with tracking and user
data, there needs to be some control and constraints here. You need to create
a level playing field where disruption becomes possible and problems can be
addressed by market forces before they take the field with them.

~~~
plandis
I honestly don't know how you can say that Facebook and Google are not
innovative companies.

Googles search beat out lots of other companies. Their search was innovative,
their business model was innovative.

Facebook convienced millions (billions?) of people to share their information
on the internet. That's not innovative?

You're effectively saying that the person who has the initial idea is the
innovator, not that one that brings it to success. I'd argue that if anything
it's the successful implementor that's innovative.

------
folksinger
The article mentions nothing of the most important problem we have yet to
solve. Who is liable for protecting private data?

The way it works right now is that everyone is basically agreeing to publish
any information when they use these platforms. If Facebook, Apple or Google
leaks this information they are not legally liable. For the ad-based revenue
models they couldn't be, their entire business model is selling this
information!

------
amelius
Isn't the problem partly the global economy, where the US benefits from having
those behemoths within their borders? If the US government would take
regulatory measures against those companies, some other government would
gladly take their position.

------
darawk
Utilities:

\- Comcast

\- Verizon

\- Time warner cable

\- Power and water companies

Tech giants:

\- Google

\- Facebook

\- Microsoft

Do you want your tech companies to be more like your utilities, or your
utilities to be more like your tech companies? Personally, i'd very much
prefer the latter. Tech companies have monopolies granted by superior user
experiences. They are deeply afraid of losing that superiority. Utility
companies have government granted monopolies - they fear only changing
regulation. Companies align with their incentives. If they do not, they will
be replaced by those that do. I'm much more comfortable with a company who's
monopoly rests on the back of my happiness, personally.

------
redm
There is not a problem with "tech monopolies." As new tech emerges, new
platforms, new ideas, the market WILL be disrupted.

For example.

1\. Google emerged in a market where there were dominate search engines, such
as Alta Vista. 2\. Facebook emerged in a market where MySpace was dominating.
3\. Facebook is disrupting Google.

etc.

I firmly believe that the market is ripe and ready always for new ideas and
tech. Are you going to be able to build a better search engine than Google?
Probably not because it works well. Google will be disrupted in some other way
we haven't considered, maybe AI.

~~~
corporateslave3
Yeah, I do believe some type of AI has a decent chance at disrupting google.
Their current infrastructure is very good, and is their competitive advantage.
But if some algorithm doesnt need that infrastructure, and provides a much
better experience than google, they can be dismantled. All tech companies
eventually get disrupted.

~~~
hnaccy
>All tech companies eventually get disrupted.

Why do you believe this?

~~~
corporateslave3
Three reasons:

1.) The inherent mediocrity in large bureaucracies. They always turn mediocre.
People inherently form factions within corporations and become politicians.
This destroys the old culture and creates adverse incentives.

2.) Technology is always evolving at a massive pace. Old infrastructure in a
large company becomes a burden, and stifles innovation. Startups are built to
seize opportunities with new technology.

3.) Which tech companies that have historically been dominant since the 80s
are still dominant? Intel? IBM? AOL? Yahoo? Microsoft (maybe but still
somewhat irrelevant). Apple may be the only company, but they are in a
different game.

------
wuch
> If it is recognized that Facebook is a media company, it will be legally
> liable for its content, and it will be forced to keep better track of
> fraudulent anonymous usage, like U.S. political ads placed by foreign
> customers.

What is exactly fraudulent about U.S. political ads placed by foreign
customers?

~~~
majewsky
The weirder part of this statement is that they count "political ads [being]
placed by foreign customers" as "anonymous usage". If it's anonymous, how do
they know they were foreign?

------
exabrial
Competition is a wonderful thing. I'm not sure new regulations are needed, I'd
rather see existing ones applied where they are applicable.

------
spacemanmatt
Good old-fashioned anti-trust enforcement would make me so happy, right now.

------
j_s
Competitive advantage/network effect/moat too big? Ask the government to pave
over it!

Feels almost inevitable to me after phrasing it this way.

