alt Hacker NewsApologies for the meta:
I feel that our understanding of trust and antitrust, along with the legal and regulatory premises... Just isn't very useful in the 21st century.
I understand the motivation, and justification for employing antitrust. Google's business model, and much of modern tech economy is really all about Monopoly-like market power.
In fact, one of the main concerns for AI investors is price competition, insufficient lock-in, weak network effects and consumer choice. They call this commodification... a telling choice of word. It's a worry that $trn valuations are impossible without something resembling monopoly to ensure longevity and high margins.
Peter Thiel gave a talk in favour of monopoly. It's worth reading. Even if you completely disagree, there are some subtle points that are relevant either way. A company facing market dynamism, price competition... Is unlikely to be investing billions in speculative r&d, for example.
Our core ideas about Monopoly, and antitrust... Tend to be highly derived of the industrial revolution, which is in turn all about manufacturing. Capital, labor, technology, marginal costs, marginal utility, price theory, etc. you can count the number which it's coming off the assembling line to understand the productivity of the firm. The product is concrete, and therefore productivity can be reasoned about.
There's no real way of applying this to Google. Google's users generally don't pay anything. Google doesn't have marginal costs.There is no price. The AdWords auction, is very clearly designed assuming monopolistic dynamics.. the seller is price maker and the buyer is a price taker. Prices are set as close as possible to buyer marginal value. Competition has no effect on pricing.
Otoh, where is the EU or any other antitrust regulator going with any of this. In the 90s, the Microsoft Monopoly was the biggest antitrust case. They used their os Monopoly to crush Netscape.
Now that it's history, we can look back and learn that the antitrust case just didn't matter one way or another. Nothing was really gained by victory, and nothing would have been lost by defeat.
The theory appears to be (a) regulated capitalism is good (b) tech monopolies clearly have market power and abuse it. There is no theory of desired outcome or the benefits of such an outcome. Are they regulating monopolies, preventing monopolies, pursuing an abstract notion of Justice?
Replies
> A company facing market dynamism, price competition... Is unlikely to be investing billions in speculative r&d, for example.
The comparison to manufacturing isn't necessary because this seems to be contradicting by much of tech history itself. Plenty of companies have spent plenty of billions on R&D to outpace their real competitors.
If we're to update our view of monopoly (and I agree we should) it should be to clamp down on them even more.
Yours is a common misunderstanding about antitrust being about prices. That is a distinctly American view, and not useful for analyzing European antitrust decisions. Read https://www.newyorker.com/business/adam-davidson/teddy-roose...
>Now that it's history, we can look back and learn that the antitrust case just didn't matter one way or another. Nothing was really gained by victory, and nothing would have been lost by defeat.
You are missing the fact that the US administration did change and Microsoft was not broken... similar to the fact google/alphabet escaped that too
> A company facing market dynamism, price competition... Is unlikely to be investing billions in speculative r&d, for example.
Simple solution: tax companies more heavily and use the money for public investment in research.
The problem with people like Thiel is they’re incapable of thinking past their own self-interest, which makes many perfectly good solutions seem unthinkable to them. No one should listen to them when it comes to anything resembling public policy.
PT's theory is full of strawmen, subtle leaps of logic, unproven postulates, and plain self-serving lies.
It seems he basically posits to have single-handedly reinvented monopoly theory. But such extraordinary claims require extraordinary evidence, which I'm not quite seeing. Some cherry-picked examples (like that old MS antitrust case) just don't cut it. And the mere existence of these monopolies in our time is not at all sufficient proof of a positive outcome (for whom, anyway?) in the end (what end, has anybody seen it yet?). In fact, I'd argue that it takes some quite rose-tinted glasses or a billionaire's mile-high distance to the ground to not see the huge problems they're posing to society right now.
The fact that this is coming from his position of great power, and that he himself is benefitting immensely from the theory he advocates, should be enough to make you pause and think really hard about what philosophy he's trying to sell you there, and why.
The puppet master wants you to cheer for our tech overlords and accept them as benevolent dictators because trust me bro. But do you really think what's driving this man's reasoning is the good of mankind - of you and me? If so, I have a bridge to sell you.
Peter Thiel himself is a good reason to avoid monopolies. He is dangerous fascist with political goals that would make life of most of us hell. He defends monopilies, because he is seeking to create one and then use its power to harm the rest of us.
So the best we can do for the future is to prevent Thiels of the world from monopoly creation.
> Nothing was really gained by victory
Windows users have a prompt to choose their browser after installing the OS.
Even in a digital world, monopolies bring clear downsides. The case of Google being able to simply create realities by way of Chrome the rest of the market is forced to follow is a good example here.
I agree that the common understanding of antitrust regulations has become a leaky abstraction, but the general idea is still completely sound to me: A corporation should never be in a position where it can actively suppress competition, or act in a way that is harming consumers without an alternative available.
> Are they regulating monopolies, preventing monopolies, pursuing an abstract notion of Justice?
I suppose all of it; opportunities to prevent some monopolies were missed, to the detriment of all, so regulating them is the only option left. In other cases, we can still act to actively work against emerging monopolies. And above all is clearly a notion of justice, without which democracy itself would be a pretty futile exercise in bureaucracy.
Put differently, what do you suppose the EU should do? Just let global mega-corporations have their way? Even if Google users by and large don't pay for the services, we're all aware they monetise off of users still. To me, this is an implementation detail that doesn't really make a difference to the observation that yes, Google is (and other big tech corps are) clearly in a market dominating position it (they) should not be in.