
FTC hearings on tech companies included economists who take money from them - ocdtrekkie
https://www.fastcompany.com/90253465/should-we-break-up-the-tech-giants-not-if-you-ask-the-economists-who-take-money-from-them
======
lolyallturfin
Next week: Hacker News thread about investigated companies included commenters
who take money from them
([https://news.ycombinator.com/item?id=18257185](https://news.ycombinator.com/item?id=18257185))

------
Kaveren
I'm tired of the big tech alarmism. Nobody needs to break up any of these
companies. Having power does not make a company evil.

You can ask legitimate questions about Amazon's treatment of employees.
Boycott them if you're so inclined. Are they being paid fairly? Are they being
exploited and over-worked? I think it's a conversation worth having. At least
be sensible and call for regulations that address this in particular, not
trying to break up Amazon entirely.

Google is guilty of what, exactly? Do you dislike how they treat you, the
user, as the product? Change your Google privacy settings or better yet switch
to Google alternatives (Protonmail, DuckDuckGo, Microsoft Office, OpenOffice,
the like, YouTube is too useful to abandon).

All I see is a big push to vilify tech companies so politicians can look like
they're for the little guy.

Take the recent Google internal vulnerability case. All of the sudden
politicians come out of the woodwork, when public disclosure of this sort of
thing was never an issue before. In reality, people doesn't seem to understand
that enforced disclosure of internally discovered vulnerabilities will make
more proactive actors look _less_ secure than companies which aren't as
rigorous (and have less to disclose).

If you very understandably don't trust Facebook with your data, simply get off
it. Use Signal, SMS, email, Discord, Slack, anything else you want to talk to
your friends and family.

I suppose telling people not to use Facebook, Instagram, or Google services
doesn't have the same ring to it as tearing companies down though.

Edit: Changed nonsensical sentence about Google's vulnerability disclosure.
Clarified.

Edit: Reclarified still nonsensical Google vulnerability disclosure paragraph.

Edit: Changed "more" to " _less_ " in the disclosure paragraph. Third time's
the charm.

~~~
JumpCrisscross
> _If you very understandably don 't trust Facebook with your data, simply get
> off it_

Facebook compiles shadow profiles of people who _have_ gotten off Facebook
[1]. Their lack of platform security affects users and non-users alike,
particularly when those actions spread violence and political misinformation.

Facebook bought WhatsApp and promptly broke its promises to WhatsApp's
founders and the EU. Facebook bought Instagram and used its heft to copy
Snapchat's product. Using incumbency-resulting scale to copy and destroy
competitors is inefficient. It's a market failure. It's why we have antitrust
law.

When people say "break up Facebook," we mean "update antitrust law to see user
data as capital."

[1] [https://www.cnet.com/news/shadow-profiles-facebook-has-
infor...](https://www.cnet.com/news/shadow-profiles-facebook-has-information-
you-didnt-hand-over/)

------
gjsman-1000
My fear is that if a breakup occurred, it would only allow Chinese tech
companies to come marching in, destroying American competition. (This could
backfire pretty bad...)

~~~
maxxxxx
For a long time I have been told that small nimble companies will succeed so
it seems healthy to me to break up these big, slow companies. I wonder if
there is some level of Stockholm syndrome going on that makes people think we
need these huge, dominant companies.

~~~
rayiner
Or alternatively, maybe it's true that there are major economies of scale to
most businesses, and big companies get big not through "lobbying" and
"regulation" but because they're far more efficient than small companies?

~~~
magicnubs
Or at least, having one big company serving 100 people can be more efficient
than 10 smaller companies delivering 10 people each a similar service.

~~~
maxxxxx
Is this really more efficient for society and innovation in the long run? It
just cements the status quo.

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SilasX
So? Of course you should be able to pay experts to represent you in these
hearings, or hire them for unrelated purposes. The issue is whether such
payments are appropriately _disclosed_.

------
pfisch
Yes, as long as it is one step in the breakup of lots of other
monopolies/conglomerates and not just politically motivated targeting.

~~~
maxxxxx
I am starting to think that companies from a certain size on should be broken
apart automatically. Or we should find other ways to disincentive growing a
company beyond a certain size.

------
PunchTornado
Why would you want to break them? A guy builds a company and then for some
reason somebody who never helped build it thinks it's ok to break it into
little parts?

sounds communistic to me... let the free market decide and if needed, then
regulate it more.

~~~
will_brown
>let the free market decide and if needed, then regulate it more.

That is exactly what happened over a 100 years ago. That additional regulation
was called the Sherman Anti-Trust Act of 1890.

When the US DOJ broke up Standard Oil, who had control of 90% of the market
just like a certain search engine does today, consumers and the market were
better off...and even Rockefeller who lost his illegal monopoly, saw his
fortune double as a result of the breakup making him the richest man in the
world.

------
kareemsabri
What a shit article. Yeah, if you go to the level of economists who work at
elite universities and firms, and are the type to testify before government
bodies, most of them are one degree of separation from the world's biggest
corporations. So what? Either what they're saying is evidence-based and
defensible, or it isn't. The article seems to want to smear these people on
the basis of their links, no matter how tenuous, to big tech corporations.

It's amazing watching [a subset of] the American public clamor for the
destruction of incredible things that could only be created in America, and
should really be sources of pride, imho.

~~~
ocdtrekkie
"It is difficult to get a man to understand something when his salary depends
upon his not understanding it." -Upton Sinclair

The issue is that nearly every single one of these people are paid to believe
big tech is not a problem. This isn't even a scenario where there were
competing viewpoints: The deck was entirely stacked with paid supporters.

And as far as the fact that these companies were created in the first place:
Today's giants only exist because we properly employed antitrust regulations
against the previous generation of giants. Google would not exist without the
antitrust case against Microsoft. And an innovative future depends on us
applying antitrust law again, to the likes of Google, Facebook, and Amazon.

We should be proud of what our country has accomplished, but we must break
them up on occasion to allow for new growth. Movement and innovation is what
keeps us on that leading edge, and resistance to apply regulation against
these companies will allow other countries to surpass us.

~~~
kareemsabri
You edited to include additional claims, and some counterfactuals. I see no
reason to believe that the anti-trust rulings against Microsoft, which were
actually rather weak when all was said and done, is what allowed Google to
come into existence. I don't see how they had any effect on Google, or how
Google was stymied by Microsoft's monopoly. Can you substantiate that claim?

Likewise, you have to prove that these companies are destroying the ability
for other folks to innovate through abuse of monopoly power (the point of the
hearings), not just say that they're big so we need to "break them up".

~~~
ocdtrekkie
A number of Microsoft employees have confirmed that the main reason Microsoft
never did anything to stop Google's growth when it was small was fear of
further antitrust punishments:

 _And most important, as Microsoft lived under government scrutiny, employees
abandoned what had been nascent internal discussions about crushing a young,
emerging competitor — Google. There had been informal conjectures about
reprogramming Microsoft’s web browser, the popular Internet Explorer, so that
anytime people typed in “Google,” they would be redirected to MSN Search,
according to company insiders. Or, perhaps a warning message might pop up:
“Did you know Google uses your data in ways you can’t control?”_

 _Microsoft was so powerful, and Google so new, that the young search engine
could have been killed off, some insiders at both companies believe. “But
there was a new culture of compliance, and we didn’t want to get in trouble
again, so nothing happened,” Burrus said. The myth that Google humbled
Microsoft on its own is wrong. The government’s antitrust lawsuit is one
reason that Google was eventually able to break Microsoft’s monopoly._

[https://www.nytimes.com/2018/02/20/magazine/the-case-
against...](https://www.nytimes.com/2018/02/20/magazine/the-case-against-
google.html)

As an HN user, I assume you are probably familiar with dozens of projects for
products or services that were superior to Google's entrenched ones. Be they
alternative mobile OSes, search engines, email or calendar products, etc. But
thanks to monopoly power, all of them have failed to gain traction from the
incumbents due to their vertical integration with the rest of their product
portfolio.

Gmail is not the best email client (it's not even a particularly good email
client now that it takes two minutes to load), Android is far from the best
mobile OS. But both are dominant because of the inescapable monopoly which
owns them and every other product people use online. Google Search isn't
winning because of the quality of the code or the results, but because Google
has invested billions of dollars every year in ensuring the default search on
nearly every electronic device is Google. No matter how superior someone's
product is, if they don't have Google's scale or their billions, they can't
compete.

~~~
kareemsabri
Fair enough. Note, I'm not arguing that there is no appropriate use of FTC
action to stop anti-competitive behavior. The informally discussed actions
attributed to MSFT employees would probably qualify (certainly using browser
monopoly to effectively block websites). However, it never happened and
"informal conjectures" are pretty dubious. I don't think that rises to the
standard of evidence that Google wouldn't exist had the FTC not intervened.

From the same article

 _What eventually humbled Bill Gates and ended Microsoft’s monopoly wasn’t
antitrust prosecutions, observers say, but a more nimble start-up named
Google, a search engine designed by two Stanford Ph.D. dropouts that
outperformed Microsoft’s own forays into search (first MSN Search and now
Bing). Then those two dropouts introduced a series of applications, like
Google Docs and Google Sheets, that eventually began to compete with almost
every aspect of Microsoft’s businesses. And Google did all that not by relying
on government prosecutors but by being smarter. You don’t need antitrust in
the digital marketplace, critics argue. “When our products don’t work or we
make mistakes, it’s easy for users to go elsewhere because our competition is
only a click away,” Google’s co-founder, Larry Page, said in 2012.
Translation: The government ought to stop worrying, because no online giant
will ever survive any longer than it deserves to._

I am certainly familiar with alternative options to popular digital products.
Some of them _do_ in fact gain adoption, which seems to counter your position
that it's impossible to gain traction because of monopoly power. They often
get bought by the incumbent (Facebook's properties being the most obvious
example). Note that some independents (Snapchat, Twitter) have also managed to
rise post-Facebook and IPO. It's not clear monopoly power is what makes these
supposedly subpar products dominant. Certainly I use Google Calendar because I
use GMail, and I use GMail because I don't care enough to look for another
email provider. It's good enough for me. If a better one came out, worth
switching to, I certainly would. Just like I switched my email from Yahoo! to
GMail when GMail came out. I think there's a difference between a company
being big and holding the lion's share of the market (Tide holds 50% market
share in laundry detergent) and being a monopoly. Telecoms and utilities are
monopolies, in many markets. There are no other options. I don't see why
Google Search is (DuckDuckGo exists and has done pretty well with a focus on
privacy, for example; and of course Bing). But I also disagree that it's _not_
because Google has the best search results. As far as I can tell, they do.
Who's better?

~~~
ocdtrekkie
Bing and DuckDuckGo both have vastly better search products (for different
reasons). DDG obviously has a strong privacy push, and allows you to grab
results from different search engines in a private way, Bing pays for your
searching there with rewards.

Results quality is incredibly similar, and in fact, several times I've read
hyped up announcement articles about new Google Knowledge Graph features or
tools like the metronome when you search "metronome", only to notice that Bing
already had that functionality already. Google isn't really the innovator in
search and hasn't been for a long time. But given that they pay billions to
both Apple and Mozilla to be the default search on iOS and Firefox, and also
control the largest mobile OS, Android, Google remains mostly uncontested for
the 90% or higher market share it has in a lot of countries.

Defaults win, we've seen time and time again. Google didn't explode in
popularity because people set it as their search engine. Sure, nerds like us
did back then, but what happened was Adobe Flash Player and similar apps
started installing the Google Toolbar, which changed your default search
engine to Google. And this is why the EU has finally taken a move to prevent
Google from making Android manufacturers default to Google Search, though it's
likely most will still be paid to provide that default going forward.

