This would really change the landscape if implemented. On thing that it would do is force the companies to innovate themselves, knowing that they can't just acquire every innovative company that challenges their dominance.
And this would equally apply to Apple and Google who have a number of apps on their app stores. This would then lead to even more bundled apps on the phone e.g. Garageband which would decrease competition.
Most of these policies are really not well thought out.
If the vast majority of people shopped at one supermarket, and that supermarket's most popular products were largely it's own brand products, and most industries that competed with such products had largely shrunk to providing specialty alternatives or cheap knockoffs because it was so hard to compete, then there might be a case for breaking that supermarket up.
Sears too once had a "monopoly" on mail order products. People marveled at how amazing it was that you could order a product, mail in a check, and receive the product six weeks later, all without stepping into a store! Now they're bankrupt.
The whole concept of a business "controlling" the market is ridiculous. Amazon operates in a highly competitive, low margin industry that requires a tremendous amount of logistical overhead to function. The minute they stop innovating, they're toast.
There's no such thing as a free lunch. You pay for that software even if you're unused to putting a dollar-price on its cost.
Hard for me to get too worked up about tech giants seeing as using them is optional and alternatives abound. I don’t see how my life is made worse if someone else buys a MacBook.
None of the things that do irk me about tech companies (security breaches, unethical advertising, spread of fake news, and so on) would be addressed in any way by a breakup.
Try participating in modern society without an Android or Apple smartphone or tablet. It's still possible, but becoming more difficult each day.
(And to clarify, I don't mean "leave your phone at home today". I mean not owning a smartphone or tablet at all.)
Those are two examples. What about Standard Oil for instance? AT&T?
If there's only 1 Walmart store in a small town (no competitors near by), does that mean they can't sell their house brand there?
What about a Walmart in a town with a Target and 80% of the sales are at Walmart? Can Target sell their house brand if Walmart can't in this scenario?
The plan we are discussing is a plan for national scale governance, and since your example is not on a national scale, the plan would not apply. If the isolated town wishes to enact their own laws to regulate Walmart, they may do so.
The locals may govern themselves locally. National leaders govern on a national scale.
I believe the line is drawn at ‘large-scale winner-takes-all players’. It doesn’t necessarily have to be fair but it is supposed to benefit the entire economy. As long as there’s a relative balance between the economical power of competitors no measures are required.
 https://techcrunch.com/2018/07/13/amazons-share-of-the-us-e-... -- 49% of ecommerce, 5% of total retail
Regarding the ecommerce market share I’d like to know the current numbers and the trend over the years. One should not wait for 99% to start taking measures, all competitors will be dead by then.
Regarding the physical stores Amazon isn’t really trying to capture it as the barrier to entry is much lower than online and margins are low anyway.
You think it's easier to open a physical store to compete with Walmart than to spin up an ecommerce site to compete with Amazon?
On the other hand, I do not use ANY one-stop site for online shopping outside of Amazon.
It’s extremely difficult to project forward 10 years in tech.
> It’s extremely difficult to project forward 10 years in tech.
I think this is a common misconception. Tech giants rise mostly because they create new markets. Since their beginnings nobody beat Microsoft on operating systems, nobody beat Google in search, nobody beat Facebook on social network market share.
The point would be that once you're dominant in a market it's very hard to be moved away and it takes more than a decade. I find it hard to believe a 1T dollar company can be outcompeted during less than a few decades.
Also as the tech/online market matures things naturally tend to slow down.
Isn't this just another way of saying survivor bias? They are big because they survived and out-competed the competition, no? There were and are other operating systems, other search engines, other social networks. And sometimes even having the same things said about them... Think MySpace before Facebook. Until they got conquered.
These giants are huge because the internet -- to some approximation -- has no geographic boundaries. It's much easier to consolidate and hold power when you don't have to literally expand to every corner of the world where people physically live to capture them. Amazon and Facebook can acquire entire towns with nothing but a few more servers in the rack.
I’m not sure if MySpace could be considered a giant at the time. Sure, it had popularity and market share, but it was not spraying billions around buying up competition or consolidating its business (Instagram, Whatsapp).
So Facebook didn’t take down any giants, instead it won a fair market competition. That was my point.
Just some random thoughts, in different contexts:
1. Buying the cheap mega-supermarket can lead to non-obvious degradations in your community (e.g. you find yourself in a news desert because the local paper went bankrupt, following the closure of the local stores who advertised there).
2. Competition keeps competitors honest, but if one company gets too much of a lead, it's competitors give up leaving fewer market-based checks on its behavior (even if it was fantastic and awesome in the first place). Eventually prices will go up or quality down, as the never-ending quest to provide increasing shareholder value continues.
3. The real costs may not be reflected in the sticker price. For instance, you pay for Facebook and Google with your data and privacy, not your money. A competitor that directly charges you $20/year may actually be a better deal.
I am really not a fan of Walmart but I do shop at Costco and Target occasionally and I try to check both when making meaningful household purchases to see which one's cheaper. At some level, they do have to compete with each other on price and service.
Yes they distort their respective markets and put pressure on suppliers, but so does walmart and other big retailers. So if the law comes into place, it shouldn’t be limited to the online space
Ummm... that's exactly what I said. In response to
"The line is not 'you are not allowed to ever do this' but 'this particular instance is hurting competition'."
"I don't think they can specifically address a single entity like that: the laws have to be applicable across the board"
The centralization benefits are not geared towards consumers, and they never were.
What I mean by that is that Apple isn't the only company that could vet apps. Anyone could put together a list of "trusted" apps into a software repository/store and you could pick whichever one you trusted and use only it. This is already how Linux works.
In the long run, this is probably even better for people who want to only run vetted apps. Apple's app store policies have to cover everyone who runs iOS, which means that even with the best intentions, they can't be as permissive or as strict as some people want. If Apple wasn't in that boat, you could have an app store that had much harsher rules about data collection, performance, and permissions.
My experience has been that specialized platforms usually produce better results for their target audiences than generalized alternatives. As the sole gatekeeper to iOS, the best Apple is ever going to be able to provide is a generalized storefront.
I think Walmart fits that definition. Any sufficiently-large brick-and-mortar business inevitably expands to have an online marketplace, whether it's their main line of business or not.
Your average grocery-store chain would only not fall under these regulations for lack of size.
A significant quantity of stuff sold with the Kirkland label is just whitelabeled, with varying degrees of hidden-ness. Their recent beer for instance is labeled Kirkland up top, but also have the company (Hopf Malz something), and it's a pretty trivial amount of digging to get to the underlying Gordon Biersch.
I don't know where you draw the line though
* white labeled but not really because it's still got the original name on it
* white labeled without the original name
* self produced
Probably you could get finer grained than that too.
So it's entirely possible that you could pass a law banning large chains from doing whitelabeling, but actually you'd still get the same stuff on the shelves with their original labels and it'd be fine.
Or it's possible you could pass a law banning chains from selling their own produced stuff, but still have whitelabeled "house brand" be ok. But then if you were equitable about that in online space, - amazon couldn't sell fire phones or echo dot alexa things, but they could sell an "amazon choice" if it's just whitelabeled. So idk.
Going in another dimension, you can introduce the kind of wonkiness you get around "made in the USA" labeling on products which have all their parts manufactured elsewhere and then some trivial last step done on US soil.
- Brick and Mortar stores buy inventory and choose from what they own to sell inside their stores.
- Online platforms make revenue by being open to anyone to sell their own inventory through.
You still need to outbid existing inventory space, which is not the same as an open platform for anyone to sell through.
In contrast brick and mortar has no idea what does well until they start buying the product to sell themselves.
Target on the other hand have an online store but you are always buying from Target.
So if the law considers "online marketplace" from "online store" then it doesn't apply to Target.
...or it could cause Google and/or Apple to spin off their app store as an independent company, and allow other independent companies to offer their own competing app store.
If Wal-Mart started allowing anyone to set up shop and sell there, it would be a more apt comparison.
Apple and Google will have to spin out divisions that sell apps on their app stores. They can still partner under this plan, but must be independent entities. What’s the problem there?
I sure hope not!
The 80/20 rule for insurance companies is a good example - now they have an incentive for prices to go up, not down.
Not really. CostCo and supermarket house brands are often manufactured by the same companies that makes name brands. Also retail stores aren't "marketplaces" like Amazon is, they buy the products they offer. In short, it's often not competition, just a way to segment customers.
Amazon, on the other hand, runs an actual marketplace AND competes in it, which has different dynamics.
Though, personally, I'd rather Amazon shut down its marketplace and go back to something more like a traditional store. Either that, or they need to be make responsible for the rampant fraud that they've allowed in their marketplace.
Bundling Internet Explorer into Windows was only disallowed because Windows was a monopoly.
There was a court case about it, and then they lost the case, and then Bush took over the White House and the DOJ just completely dropped the whole case, so MS was never punished nor made to unbundle IE.
IE is still bundled in Windows to this day.
If this hadn't been the case, we'd be farther along now.
I don't see how, for example, Explorer being free held anyone back.
Do I need to spell this out any more for you?
Besides, many other browsers are available on Windows. ActiveX failed in the marketplace.
And no, at the time, many other browsers were not available on Windows, as they had a tiny market share, largely due to how incompatible they were with sites.
Forcing then to cut costs and corners (hence the adulterated meat scandals a few years ago) and bullying them into paying for in store promotions even big companies like Heineken have been shaken down.
The big 4 probably should be forced to divest themselves of their audit functions as well.
Would this not apply to Walmart and Target too?
If this only applies to digital stores, then yeah, it's total bull. Because Amazon could just build some stores like Target and Walmart.
What exactly does this mean? Google ads can't show on Google search? Couldn't they just lease out ad space to whatever Alphabet company gets spun off to handle search? Same thing with Amazon basics.
I’m sure it was really inconvenient and difficult for the once-shared infrastructure of Standard Oil or AT&T to be broken up among different companies, but it was necessary. Google can’t hold the market hostage because it’s “too big to be split”. Changing the status quo is difficult, but that doesn’t mean “too hard, just leave a monopoly, oh well!”
¹ I mean by law, not technically unable.
Firstly, it's not simply about drawing some arbitrary lines between search and AdWords and saying, right, split done. Other companies have to be able to compete on equal footing. Today Google is one company with a unified infrastructure for everything. It's not a bunch of unrelated businesses loosely strapped together as Warren seems to be imagining. For instance "undoing" the merger of DoubleClick would be impossible as DoubleClick doesn't exist anymore, in any form. One of the first things Google did after the acquisition was reinterview everyone and fire about half the staff. Their tech infra is long gone, etc.
So what does that mean in practice. Well, the ad auction has to run physically very close to the search engines, because search responds very fast which means ads must also run very fast. This would be hard for other firms to do well because Google datacenters are often built in the middle of nowhere for various reasons. If a search has to hit a Google DC then go back out and across America to some other DC run by some other ad firm, then search latency will go up and people will search less, or more likely, those ads will just miss their deadline more often, won't run, and lose out to son-of-AdWords which is faster.
Could competing firms run colocated in Google datacenters? Maybe. Google Cloud exists. But you can't choose in Google Cloud to run in space allocated next to existing Google services, in fact their locations constantly change and isn't public. Ads datasets and processing requirements can be very large. If a building is full, and a new ad company says "to be competitive we must be physically close", that means something else has to move out to make space. To what extent is Google allowed to say, no, we need that space to run Maps servers or something like that? How often can Google force co-located servers to move? Does a regulator start micro-managing Google's datacenter space?
Now what about the rest of the integration? Clickfraud detection involves deep integration between web search and the ads system. Is Google obliged to make all that infrastructure on the web side available to any ad firm that requests it? What stops me creating a trivial "legit" ad firm, obtaining all of Google's secrets and then selling them to click fraudsters for massive profit?
In theory all these problems can be solved, but likely only by creating constant political fights, everywhere, all the time. And for what? Warren is engaged in leftist populism: the vast majority of people in the real world don't care about splitting tech firms up like that. Even in anti-US-tech Europe, polls show people's top concerns are usually immigration and terrorism. "Can other firms compete in the AdWords auction" doesn't appear in the list at all, it's a non issue.
Worst outcome would be that your search history would be up for sale to multiple companies unless an exclusivity deal was financially more reasonable (or the backlash could be argued to make the sale unprofitable in other ways).
It would also be interesting to see how other parts of the company are split up and whether their sole source of revenue would be charging for previously free services to customers or out right selling user data to the Google Ad division or whatever company will pay the most.
Meanwhile Google Ad would have to be doing it's due diligence in buying this data. Does it make sense to pay for redundant data when someone runs google ads, analytics, recaptchas, and apis, does that mean the slow death of one.
Meanwhile google cloud might be making bank charging all the little googlets as they slowly transition to azure or aws.
Definitely be a huge shakeup though it's reasonable that transition plans and deals would significantly slow this down to a longer time scale rather than over night.
I think it means they couldn't both be google, any more.
: to be specific, they couldn't both be alphabet companies anymore, I worded that sloppily but following the quoted material.
A part of Microsoft’s 2001 consent decree with the DOJ was they couldn’t dictate what middleware couldn’t/ should be installed. The second order effect of that is bloated terrible PC’s with massive security vulnerability surface area.
If the rule only affected online house brands, it would tilt the field in favor of Walmart, Costco, and Kroger, who could all continue selling their house brands in stores. For e.g. Kroger, where online sales are a tiny percentage, this would essentially represent a carve-out.
Looked at another way, this could be seen as a tax on people with mobility challenges. (Because no house brands on the delivery services => higher costs.)
Of course, in some of these cases, it only increases the stranglehold. Because now no one else can be a large app distribution platform and an app dev for instance. (Think about it, Steam and Epic would have to really think about the way forward.) Or, famously, for Netflix, no one else can distribute video and create video. So Disney would be forced to license their stuff to Netflix. The only reason Netflix started creating content in the first place was because the creators wouldn't license their content to Netflix. So now Netflix can dump all of that content creation, confident that content creators will be forced to license their offerings to Netflix. Not only that, Netflix can be confident in the knowledge that large content creators would never be allowed to go into distribution.
Who really benefits if Valve stops developing games?
Having said that, Valve would probably be way below the 25-billion-dollar revenue threshold that Warren proposes.
You see incorrectly. Valve has released Underlords (doing well) and Artifact (doing badly) in the last 7 months, while also continually updating Dota 2 and reaching an all time high in quality.
It's like American Sugar. It's not only when you have your own stores, it's also illegal if you only sell to certain stores. Basically, American Sugar had to sell to all stores without discrimination. Anything short of that means that you are still in the business of distribution. So in Netflix terms, it means that whatever deal that, say, Hulu or Amazon Prime gets, Netflix would get too. Or else Disney is colluding with Hulu to skirt their restriction on being a distributor.
For businesses like Netflix, plans like Warren's are music to their ears. I bet creating all that content is a huge part of their costs. Now they can dump all of that, and acquire content at the same terms as all their competitors.
So any way this whole thing shakes out, Netflix wins. Because whatever it costs, it costs that much for everyone, and Netflix gets the same content catalog as everyone.
I'm no business expert, but that doesn't sound likely at all to me. There's a reason why ISPs are always trying to vertically integrate with content production. Moving bits around is a low-margin business.
Only the new law ensures that none of it will be running on their competitors machines. A stricture mandated by law for Natflix.
That's the brilliance of the law! (Well, for Netflix anyway.)
And if you think House of Cards and Stranger Things are as valuable as franchises as Star Wars, Star Trek, and the Disney Archive, I have a bridge in Brooklyn to sell you. As far as content swaps go, you happily make that trade every time.
Basically, how would you stop Google from shadow-running Google Ads? What would stop them from preferring Google Ads?
It'd be interested to see if this law would interact poorly with partner product reselling - "Oh yea, if you buy our CAD module we'll throw in a free copy of CAD with it" might actually come afoul the law, depending on the specifics. I'm sorta okay with losing that though.
That said, it only seems to apply to marketplaces and platforms, not to regular retailers. I'm not sure what a LAR/VAR counts as, though.
I've been with the company since we were less than $500M.
So at what arbitrary point do we cross from being a good guy to being an evil corporate titan that must be broken up? I don't feel like we've gotten evil; it feels like as we've grown we've built a greater capacity to server our customers better.
I don't know man?
My reading, at least how I understand it, they wouldn't be allowed to claim that they "innovated" their way into those other markets either.
I think if they are "platform utilities", they just can't do any of the other stuff period. Doesn't matter if they write the code themselves.
AdWords vs AdSense https://www.google.com/search?q=adwords+vs+adsense&ie=UTF-8
Breaking them up doesn't mean that Google Search may not monetize by placing AdSense ads, it means that the Corporate structure exists such that Facebook could offer monetization to Google Search at a competing price.
And with disparate boards/shareholders.
TBH I don't see any difference from her platform then the one Trump had, which is to turn back the clock and make America like its in the 80s, perhaps just with less racism.
There are tons of reasons why it would make sense to purchase a company, that would never be profitable on its own.
- US Constitution, Article 1 Section IX Clause 3
Undoing the mergers sounds like ex post facto law. I'd appreciate it, Senator Warren, if you would amend the constitution first. And I can't wish you luck with that amendment.
You can certainly pass laws to undo a merger or (equivalently) break up a company.
But you can create a law that Amazon (and potentially others) will be in violation of, and following proper trial, they are broken up.
Also, just to reinforce the point other folks have mentioned - that clause doesn't work like that.
Not true. They make money by monitoring their customers' online activity and using the data to target ads, which they sell to advertisers.
I can't take anyone's reporting or opinion on FB and Google seriously if they don't understand this extremely important distinction.
That's only half the truth. In real-time bidding system, personal identifiable information is actually sent to advertisers at scale.
It's not directly selling the information, but advertisers who make generate too little revenue can't participate in those RTB platforms, so there is effectively a minimal amount that advertisers pay per potential click, so close enough to actually selling the data.
If you can target with enough granularity, which is fairly typical of these modern ad networks like Facebook/Google, then you have the data about those users who click through by the fact that they saw that targeting. It may not be perfect data, but it's close enough to be incredibly valuable to companies.
I can't buy an email list from Facebook with salaries attached, but I can target those who have a salary in the range I'm interested in and see who I get through.
You're right that this is a distinction, but I think it has very similar outcomes.
I don't care about being shown ads for products I might buy. I care about targeted disinformation being fed to "persuadables" in order to affect massive political upheaval (current political breakdown in the United States, Brexit in the UK, other instances all across the globe in smaller nations.)
The only important thing here is that e.g. Facebook has the data and sells access to nefarious actors. Selling the data "directly" or not isn't the point.
If you were strip Google to just search and Facebook to just Facebook then they would have to more aggressively go after advertising dollars to ensure they are growing revenue. And since they would've already been broken up they would surely do this by invading privacy even more.
Surely the smarter move is to focus on heavily regulating their ability to track users. And make approaches like Apple did with WebKit mandatory.
An example of the type of business relationship Warren probably wants to encourage: the way Google pays Mozilla to keep Google Search as Firefox's default search provider.
So, if Google were split up into Google-the-search-engine and Google-the-ad-agency, Google Search's main source of revenue would still be from ads—but it'd be via the separate company of Google Ads, paying Google Search for ad placement.
This would almost certainly lead to less privacy. Google Search, instead of just sourcing ads from Google Ads would have to open bidding to a wide variety of ad networks.
That means your personal search history wouldn't just be accessed by Google, it would be publicly available to any upstart ad network that wanted to bid for Search ad placement.
But, saying that breaking them up would only make them invade privacy more in your view, that's the view of someone in an abusive relationship. Whether or not Facebook and Google are violating your privacy rights should be a separate question that calls for other regulatory action, regardless of the entity's size. We need to have both conversations.
Disclaimer: I work as a lowly grunt for Google, but my opinions are my own and do not represent them.
Aren't you assuming that they are not already giving it all they've got?
The first is how many industries are against it -- Google's not the half of it. Google would still make a mint if all they could do was show ads for car insurance when people search for car insurance and so on. But meaningful privacy regulation would effectively prohibit the likes of Equifax, and then you would get huge pushback from the finance industry and realtors.
Then there's the fact that a lot of politically powerful government surveillance agencies want all your stuff to be in The Cloud instead of on your own device where they can't read it, so they'd fight it too.
And the biggest problem is that you need the rules to be good rules that are at the same time effective without destroying small entities and entrenching the incumbents, which is really hard and there is a high probability they'll screw it up (especially with the aforementioned constraints), but doing it wrong can easily be worse than doing nothing. Then you don't get privacy but you destroy the upstart alternatives that might have made it possible for the people who most need it, or could have presented a challenge to the incumbents given more time.
The problem is you don't just need some law to be passed, it also has to be a good law, which is the really hard part.
And it's a lot easier for Equifax than tech because if Equifax would dry up and blow away it would only make the world better. Their entire business is doing the thing nobody should be doing at all. No part of what they do actually needs to be saved.
The problem with Google is that they also make a search engine. We need search engines and email providers and video hosts to continue to exist even if their funding source changes. So it's no help to pass a law that just makes them impossible, or makes it so that nobody can do it unless they're a multibillion dollar corporation. That makes it worse rather than better, because competition is the greatest practical method of thwarting corporate misbehavior. Laws alone can't do it -- see also pre-breakup AT&T, post-breakup AT&T and Comcast, various failed attempts at totalitarian communism, etc.
Especially if you make rules that cause the incumbents to get so big and entrenched that it becomes inevitable that they capture the regulators.
The best thing laws can do is to ensure that competition is thriving. But most of them in practice do the opposite.
Regarding competitive markets being the antidote to bad behavior, that's simply counterfactual. Examples from Uber to Boeing to Wells Fargo to Foxconn to Equifax itself prove that simply because you have strong, viable competitors does not mean that you have to treat anyone or anything well.
And the truth is that many markets are naturally winner-take-all. In the absence of regulatory releveling, there is no natural market force which prevents behemoths from emerging and creating the regulatory capture you fear. The conclusion to draw from that is that regulatory action must be taken before capture is possible, and therefore potentially before actual abuse. Such is the position we are broadly in with giants like Amazon.
Can you find the quote that says "it can't be done" instead of saying it's really hard and there is a major risk that we screw it up and make it worse? Because I've been saying the same thing since the first post.
> And yet, Equifax is unquestionably less abusive than it once was.
That's debatable. It's only differently abusive. They collect different kinds of information now than in 1969, but they collect more of it now and sell it to more people, and have invested a lot more in ensuring regulatory capture. The legislative response to that data breach should have been that their industry would cease to exist, so the fact that it hasn't demonstrates that the relevant legislators are under their thumb.
> It's clear that legislative action is both possible (contrary to your point in your first post) and survivable (which you imply isn't possible in the more recent post).
You're still using Equifax as an example, which I've already explained the problem with -- they don't need to be saved so anything that hurts them is irrelevant and comes at no significant cost.
> The odds that regulatory action could be taken which left intact much of the good that Google does while curtailing its most egregious abuses seem correspondingly good to me.
How? So much of what they do is ML on large data sets. They use the same data for targeting ads, but they also actually need it to provide the service. How do you propose to make Waze operate without user location data? But regardless of the ads, the risk is then that they know too much and it could be compromised or used for more nefarious purposes in the future. It's inherently a trade off which will be more acceptable to some people than others, so what's needed isn't laws prohibiting what they're doing, it's more competitors who do something different for the people who prefer better privacy.
> Regarding competitive markets being the antidote to bad behavior, that's simply counterfactual. Examples from Uber to Boeing to Wells Fargo to Foxconn to Equifax itself prove that simply because you have strong, viable competitors does not mean that you have to treat anyone or anything well.
Why are you holding up uncompetitive industries as examples of strong competition? Boeing is the only major US commercial aircraft manufacturer and one of only two in the world. And all of your other examples, even the ones with limited competition, have done well for their customers. But you are not the customer of Equifax. You can't choose not to patronize their service, in the way that you can choose not to use Facebook or Gmail and block all of their tracking bugs with browser plugins. The problem is the limited competition, which comes from laws like DMCA 1201 and the CFAA which prohibit adversarial interoperability and lock customers into vertically integrated platforms.
> And the truth is that many markets are naturally winner-take-all.
Hardly any real markets are winner-take-all. Making them that way is the primary goal of regulatory capture, which is why enabling it by passing rules that destroy small competitors is so problematic. Even classic textbook examples like utility companies are only that way because of rules that favor large statewide entities with uniform rates and build out requirements that exist to implicitly subsidize rural areas at the expense of urban ones. There is no natural market force preventing a new ISP from forming at the scale of an individual neighborhood, it's only regulatory capture by the incumbents (or other political forces that have the same effect).
> Such is the position we are broadly in with giants like Amazon.
Amazon is the least monopolistic of all the tech companies. They have a single digit percentage of the US retail market, maintain their market share almost entirely through competitive pricing and compensate their employees as well or better than most of their competitors do. The people complaining about them aren't customers, they're sore loser competitors who don't like aggressive price competition.
Google is growth oriented because it has so much money that it can experiment with things. Maybe that’s dumb?
At this stage of the election cycle a few presidential elections ago Obama was promising socialized medicine if elected, what we got from a democratically controlled house and senate was Obamacare. This is what always happens.
> In the 2008 Obama-Biden health care plan on the campaign’s website, candidate Obama promised that “any American will have the opportunity to enroll in [a] new public plan.”
Then why not telecom? By the same logic shouldn't Comcast no longer be allowed to own NBCUniversal?
Or for media - would Disney not be allowed to launch their new video platform thing? Does Newscorp also have to be broken up? Certainly they have platforms for distributing media, but also a staggeringly large amount of content being generated.
1. why only online, and not also physical? (Are there just not large enough physical marketplaces?)
2. What about walmart (in the context of online) - would they need to divest their online marketplace too?
3. What about telecom/media industries? Would they need to be broken up as well?
I can't buy reams of data from Google. There are data brokers out there, but big adtech companies won't sell me the source of their ad success. Most of the data market is composed of smaller companies which don't run ad networks and wouldn't even come close to the eye of an antitrust program.
I'm not really complaining but even tech savvy people can underestimate just how much of their information is out there.
The only difference is that Google/Facebook/Similar get to pretend to be clean, even though they are the enablers.
Running enough ads with your own tracking on SV platforms, will get you the data you want about your targets.
What am i missing?
Google, Facebook, Amazon, etc. do not "own" anything. They are businesses that exist in a fiercely competitive environment in which consumers have zero loyalty and will gladly switch to the next hot thing at the drop of a hat. These businesses are successful because they continually innovate and deliver products that people want. There's no guarantee that any of these companies will still be around in a decade, much less "own" the market they operate in.
And monopoly regulation put an end to that and allowed Netscape to come in and make it a competition.
It was really an absurd case considering that 100% of internet users use a free browser these days.
Netscape was selling their browser before Microsoft got smacked down by the DOJ.
In fact, Microsoft's bundling of IE with Windows was some of the strongest evidence showing that they were abusing their market position. By bundling a free alternative they basically destroyed the market of for-pay web browsers, and killed off Netscape while they were at it.
Also, even if we wanted unregulated capitalism and natural selection of markets, we would need to first eliminate the existing monopolies, oligopolies, and externalities, since they all cause market failure.
Trade in the market creates wealth. The efficiency of the market lowers the costs of goods. These two things work together to make everyone richer.
> Also, even if we wanted unregulated capitalism and natural selection of markets, we would need to first eliminate the existing monopolies, oligopolies, and externalities, since they all cause market failure.
Market failures are only made worse by government intervention. Unforeseen negative consequences distort the market which causes more problems.
Yes, I agree. That's basically why politics exists.
> Market failures are only made worse by government intervention.
This is a blanket statement that doesn't really make sense. There is no way to correct externalities without regulation, right? Genuine question, I am obviously not an economist. Government intervention distorts the market, which is desirable in some cases. This seems like a pretty uncontroversial statement. There would be a market for paid assassinations, but we've made that market "worse" by outlawing them. I feel like it's impossible to argue that the market is always "right".
> Unforeseen negative consequences distort the market which causes more problems.
Government intervention doesn't have to be unforeseen. Good regulations are announced in advance, and businesses are informed during the legislation process and given guidelines to adapt and comply.
> Government intervention doesn't have to be unforeseen. Good regulations are announced in advance, and businesses are informed during the legislation process and given guidelines to adapt and comply.
You seem to not understand what is meant by "unforeseen negative consequences". These are results of a policy which weren't foreseen by the proponents of that policy. Often, policies meant to have positive_effect_A have negative_effect_B, C, D, etc. Sometimes they entirely fail to have positive_effect_A and even have the opposite of that effect. Rent control is one popular example (meant to reduce the cost of housing for the poor, but in reality raises the cost of housing by reducing the supply). Sometimes nobody sees these issues coming, but often opponents of the policy point out these problems but the policies are pushed through anyways, due to emotional support.
Now for the rest
> This is a blanket statement that doesn't really make sense.
Yeah it is a little too absolute, I should have said "Market failures are rarely improved by government intervention, and often made worse".
> There is no way to correct externalities without regulation, right?
Common misconception. Often externalities are caused by government policy in the first place, so reversing that policy can fix it. Another option is increased liability tort law: allow individuals to sue for damages and you'll quickly see companies make changes.
In my opinion, one of the policies with the most negative consequences is the creation of "limited liability corporations". Of course when the owners and operators of a firm aren't liable for the actions of the firm, they don't have a vested interest in instituting internal policies to limit the firm's harm.
> Government intervention distorts the market, which is desirable in some cases.
Desirable to some, again it's subjective. Often distortion is created and used by rent-seekers at the expense of everyone else.
> There would be a market for paid assassinations, but we've made that market "worse" by outlawing them.
Assassinations are in an entirely different class of action, one which is not part of an ideal free market. A free market is one in which all interaction is purely voluntary. Violent crimes, fraud, theft, etc are actions in which the victim did not consent.
Actions which violate consent should be illegal, and the justice system should be focused on taking every possible action to make the victims whole. This is different from how the justice system currently works, which is focused on punishment of criminals rather than reparations to victims.
Market failures result from actions which do not violate consent but do still cause harm to a third party. Air pollution is one strong example, and regulations for that (and other forms of pollution) are the most justified regulations IMO.
People will also bring up "natural monopolies" and "oligopolies" when talking about market failures. However, there is very little evidence of a hostile monopoly or oligopoly ever existing without government assistance, while there are countless examples of cartels failing and diseconomies of scale destroying large organizations.
> I feel like it's impossible to argue that the market is always "right".
Because "right" is subjective, that is impossible. There are things like so-called "price gouging" in disaster situations which many people perceive as wrong, but in actuality are a necessary signalling behavior of the market in order to allocate more resources to those areas. Banning such things only results in shortages which _do have_ measurable negative consequences.
We can look at metrics like cost-of-living adjusted standard of living, inequality, innovation, economic growth, etc and all of those correlate strongly with how free an economy is.
I am having trouble putting my thoughts in order to respond. One thing I can say is that I agree with your criteria for justifiable regulations, I think I (and Elizabeth Warren) just have a much more expansive definition of "harm to a third party". I think a lot of important harm is not captured by metrics like average standard living and economic growth and "innovation", and I was unable to find any correlation between inequality and the Fraser Institute's economic freedom ranking.
> There are things like so-called "price gouging" in disaster situations which many people perceive as wrong, but in actuality are a necessary signalling behavior of the market in order to allocate more resources to those areas. Banning such things only results in shortages which _do have_ measurable negative consequences.
It doesn't make sense to talk about appropriate market behavior in a disaster situation, which can never be a functioning free market. In a disaster, buyers are forced to buy immediately, they cannot shop around, compare products, and choose not to buy if the price is too high. A key feature of a free market is that nobody is forced to buy or sell. High prices are only an effective signal when there is a low barrier to entry to enter the market, and willingness to pay roughly correlates with need. Neither of these are true in a disaster.
This is similar to healthcare, another "market" that by definition cannot be free and should never be treated as such. Participants are coerced into buying, knowledge about quality and price of goods is hidden from buyers, comparison shopping is impossible in an emergency, and ability to pay has nothing to do with need. A market cannot function when many mandatory purchases cost more than many participants' net wealth.
There have been quite a few technology IPO's over the last couple years and I'm sure many of these companies were approached by incumbents but did not sell. And some of these companies will become giant slayers.
Friendly reminder that (1) through (3) are the actual stakes of the policy, not what Vaheesan says to the reporter about forcing companies to "behave in more socially responsible ways." That editorializing will never, ever become law, and it is entirely secondary to the actual debate here.
Of course, it may be easier to do this for electricity, where the fundamental technology doesn't change quickly anymore (as far as I know), than for internet connectivity, where we are still undergoing fairly rapid technological change, relatively speaking.
Essentially you take the "last mile" (from home/business to exchange) and either turn it into a full public utility or turn it into a private utility that needs to treat all service providers equally. You ban the private utility from also running an ISP on their own network.
You'd still get service from an ISP (inc. Comcast), they would run the exchange side of things, rent space on the last mile utility (fee used for maintaining/upgrading it), and their competition would do the same.
Competition would substantially increase, prices would fall, and we'd stop laying redundant cabling just due to "ownership."
I'm not saying there aren't problems with large companies, tech or otherwise, but how exactly are they depressing wages? Who's getting screwed?
 https://www.npr.org/sections/money/2019/06/18/733510647/appl... which references https://harvardlawreview.org/wp-content/uploads/2018/12/536-...
That is the scarcity mindset. Instead, engineers should be getting million+ salaries instead of the measly 150k+.
I think you mean a X/10 Engineer. A -10X engineer would have to work backwards.
While this depresses jobs more than it does wages, it makes it equally as hard for a competitor to compete on the cost of labor as suppressing wages would do. Either way, the net effect is to suppress competition.
A greater problem comes when a market dominator extends their power into other market niches controlled only by cost, like generics and foodstuffs, as Amazon especially is doing.
One solution is to disable entry of a monopolist into these downstream markets, as Warren is proposing. But a more lasting redress must somehow diminish the company's position of monopoly.
SWE's who do not get hired at all because there are so few competitive ecommerce, search, online advertising, and social networking companies.
From a politician's perspective, it may be a far more powerful vote-getter to have policies where 3X people are employed at $70K than one where X people are employed at $210K.
Sounds like she might have a case, rather than just naked pandering.
I think it’s good to have a variety of intellectual positions and to work the best possible policies, and to ask if we would be better off without some some sacred cows
This article, for the wealth tax, basically makes the argument that the justices should stay true to their 'originalist' principles and uphold it, rather than actually examining the law.
I think this is the best precedent for something like this: When the court ruled that a federal tax on property was unconstitutional, which is similar to what Warren is trying to do. The court has ruled on this in the past.
> ...Congress cannot impose a duty or tax upon personal property...
You could argue that the preceding parts of the constitution prohibit a wealth tax, though, and that the 16th doesn't carve out space for one.
> When, therefore, this court adjudges, as it does now adjudge, that Congress cannot impose a duty or tax upon personal property... including invested personal property, bonds, stocks, and investments of all kinds...
The court has clearly ruled on this issue in the past.
At that point, there would be a lot of pressure on state legislatures to ratify an amendment. Anyone who voted against it would be putting a target on their back in the next election.
Like everything involving new laws and the constitution, it will fall to the surpreme court to decide whether or not it is constitutional.