There are parts of these businesses that have successfully driven off competition through pricing (free typically) enabled by revenue from other parts of these businesses. Ad revenue seems to enable a lot of this and it is hurting third party businesses when e.g. FB or Google can give away services for free for years on end without even attempting to drive revenue from them simply by tapping into the revenue from elsewhere in their business.
In my view forcing a more level playing field for competitors that don't have a strangle hold on the ad business is kind of the whole point of having antitrust legislation. If certain business units in Google/FB are not sustainable without benefiting from ad revenue, then perhaps them failing would be a good thing for the market as it creates opportunities for others to step up.
Search is a good example of an insanely lucrative effective monopoly where Google funnels ad revenue into search R&D and then forces e.g. news papers that are highly dependent on their own ad revenue to optimize for Google's search engine with features that directly conflict with their own revenue models (e.g. AMP) just to ensure that users can actually find their way to articles. Then add Google News to the mix and you have a nice mix of abuse of power that has resulted in fines for Google on several occasions. Breaking them up would be a logical next step given that the record high fines seem to pale in comparison to the revenue/profit and seem to not lead to a change in behavior.
|| In my view forcing a more level playing field for competitors that don't have a strangle hold on the ad business is kind of the whole point of having antitrust legislation.
Actually no antitrust legislation isn't supposed to force competition just for the sake of it but TO PROTECT CONSUMERS. And while there is the potential that consumers can be hurt in a hypothetical abusive future,right now with products like Free maps, free search etc the consumers aren't hurt at all.
Protecting consumers is a useful side effect but not the main goal. The real goal is ensuring markets continue to function, which indirectly serves consumers as well as stimulating economic growth by allowing businesses. Without regulation, the whole capitalist system reverts back to feudalism without any form of real competition.
There are lots of ad driven businesses that source their ads from these companies. There's no good reason why Google's search engine would be any different if it were a separate business. Same with maps.
it is debatable what function means. The Digital Economy created these years principally based on technology created by subsidizing their costs internally by ads is far greater than what is lost.
If the market is segmented in thousands of competitors it might sound good but it will stagnate because noone will have the power to really innovate.
The example of mail and Maps was not accidental. we had Thousands of mail providers before and all it brought us was 5MB mailboxes, maps were out of reach for the average consumers and costed hundreds of $ for each country you wanted to have access too (updated maybe once in 2-3 years and only route information and very few POI). The market was segmented and noone had any real interest or the power to push the envelope.
I disagree with some of the premises here and the certainty of his conclusions.
For example, if Search and AdSense were separated, Search could just become one of many AdSense clients. Search could even force the various ad brokers to compete to integrate with it.
Even better, Search could explore alternate revenue streams. I'd happily pay for Search, Gmail, and many other Google services if I had a guarantee of privacy and ad-free usage.
Large acquisitions can be handled like antitrust cases, but small acquisitions include "acqui-hires", pulling in cliques of friends one by one, and for all practical purposes hiring individual employees.
Besides, monopolies have to be regulated and/or broken up, to stop the damage they are doing right now, not merely restricted from further growth by subjecting them to sportsmanlike handicaps.
In my view forcing a more level playing field for competitors that don't have a strangle hold on the ad business is kind of the whole point of having antitrust legislation. If certain business units in Google/FB are not sustainable without benefiting from ad revenue, then perhaps them failing would be a good thing for the market as it creates opportunities for others to step up.
Search is a good example of an insanely lucrative effective monopoly where Google funnels ad revenue into search R&D and then forces e.g. news papers that are highly dependent on their own ad revenue to optimize for Google's search engine with features that directly conflict with their own revenue models (e.g. AMP) just to ensure that users can actually find their way to articles. Then add Google News to the mix and you have a nice mix of abuse of power that has resulted in fines for Google on several occasions. Breaking them up would be a logical next step given that the record high fines seem to pale in comparison to the revenue/profit and seem to not lead to a change in behavior.