The point of antitrust isn’t to make companies work better. It’s to make them fail better. It’s to ensure that abusive employers can’t buy off the NLRB, that payday lenders can’t buy off the CFPB, that polluting industrialists can’t buy off the EPA, that murderously reckless aerospace companies can’t buy off the FAA, that intergenerational pharma crime families can’t buy off the FDA.
It doesn’t matter if a monopoly is efficient. If we let rich people structure our lives — if we yield to the right’s eugenic insistence that some are born to rule, the rest to be ruled —we pay a price so high that it erases any “efficiency” gains.
In the short term, it’s “efficient” to build an apartment complex with no fire doors; to toss your waste into the street; to drive drunk rather than paying for a taxi.
Tag: Anti-Trust
There’s a very basic misunderstanding at play here – you can’t ban a platform from having ‘any’ feature, service or product that someone else might want to make, because that describes literally every single thing that a platform does. There is, to repeat, a very real problem here – this was the whole Microsoft/Netscape case. You can certainly carve out specific issues, such as Apple Music, or private label on Amazon, though as I wrote here, worrying about private label is a pretty irrational moral panic. But, you’ll need to spend a lot more time thinking about how this stuff works and what the word ‘platform’ really means, because this law wouldn’t just ban Apple Music and Google Maps – it would ban iOS and Android.
Tech is the logical place to start, not just because everyone is fed up with tech, but because tech is so central to everything else we do – it provides the communications and coordination that are at the heart of every mass movement. And tech’s flexibility – that protean, foundational ability to plug everything into everything else – means that tech trustbusters have a uniquely suitable tool for prying apart monopolies: interoperability.
Forcing interop back into tech won’t be the end of the anti-monopoly fight, but it’ll be the end of the beginning – the necessary but insufficient step we’ll take before moving on to far more ambitious projects.
Cory Doctorow continues his discussion of anti-trust and the break-up of monopolies. He argues that the place to start is with technology companies. Using the example of the challenge of Australian railways to demonstrate what interoperability would mean for technology companies.
Despite all the handwringing over the inaccessibility of old digital data, the reality is that new computers can emulate old computers and run the programs that were used to create and read that data in the deep past of computing (getting the data off of old storage media that is physically deteriorating is another story). If Australia’s middle-gauge muddle were a matter of digital incompatibilities, some programmers could whip up a “translation layer” that mediated between different tracks and cars and unify the system. If we can connect billions of devices running millions of versions of scores of operating systems to each other via the internet, getting six Australian states’ railcars to connect to each others’ (digital) tracks is a piece of piss.
Although we need to do more than open platform capitalism up in regards to interoperability, it is the start that has the potential to get the ball rolling in regards to change.
One of the interesting points that Docotorw made was that in the end the companies are really all the same, just with different flavours.
Maybe large companies all have the same ideology (“profit”). Maybe the distinctions between their characters are as meaningful as the “flavors” of the different marshmallows in a box of Lucky Charms. Maybe the reason John Legere worked at AT&T and Sprint before going to T-Mobile is that they are interchangeable monopolies whose top ranks all came up together, know each other, take vacations together, and are godparents to one-another’s children. Maybe they aren’t really rivals.
Maybe monopolists have class solidarity, is what I’m saying.
Beyond the GDPR, an even more radical and useful approach would be to throttle Facebook’s (or any company’s) ability to track everything we do and say, and limit the ways it can use our data to influence our social connections and political activities. We could limit the reach and power of Facebook without infringing speech rights. We could make Facebook matter less.
Imagine if we kept our focus on how Facebook actually works and why it’s as rich and powerful as it is. If we did that, instead of fluttering our attention to the latest example of bad content flowing across the platform and reaching some small fraction of users, we might have a chance. As Marshall McLuhan taught us 56 years ago, it’s the medium, not the message, that ultimately matters.
Now some consumer groups and members of Congress are calling for a sweeping data protection law, along with a dedicated federal regulator to enforce it. The idea is to provide Americans with the same level of safeguards for apps as they have for appliances.
Politicians want to rein in the retail giant. But Jeff Bezos, the master of cutthroat capitalism, is ready to fight back.
Charles Duhigg takes a deep dive into the world of Amazon. Central to all of this is the notion of the flywheel and the relentless push for growth and development. An important aspect to this is sticking to your ideas:
Bezos explained, “If you have a really good idea, stick to it, but be flexible on how you get there. Be stubborn on your vision but flexible on the details.” Executives at other companies tended to lay out definitive plans. But Bezos urged his people to be adaptable. “People who are right a lot change their mind,” he once said. “They have the same data set that they had at the beginning, but they wake up, and they re-analyze things all the time, and they come to a new conclusion, and then they change their mind.”
This is something that reminds me of Angus Hervey’s call to ‘Hold on tightly and let go lightly’.
In addition to this, there is a ‘Day One Thinking’ when it comes to leadership:
A willingness to treat every morning as if it were the first day of business, to constantly reëxamine even the most closely held beliefs. “Day Two is stasis,” Bezos wrote, in a 2017 letter to shareholders. “Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day One.”
An example of such relentless mentality is where the failure of the Fire Phone is pivoted to the success of the Echo voice activated devices.
On the flipside of all this is the reality of working within it, especially as a warehouse worker or a delivery driver. As well as the problem of ‘process’ with the many of the challenges that come with this:
Amazon is the shopping mall now, and, normally, if you open a store in a shopping mall, you can expect certain things—like the mall operator will clean the hallways, and they’ll make sure Foot Locker isn’t right next door to Payless, and if someone sets up a kiosk in front of your store and starts selling fake Air Jordans, they’ll kick them off the property.” He continued, “But Amazon is the Wild West. There’s hardly any rules, except everyone has to pay Amazon a percentage, and you have to swallow what they give you and you can’t complain.”
One criticism is that the company is able to track which products are successful and is then produces copies sold under the Amazon Prime brand. They also fail to properly regulate manufacturers selling forgeries.
This seems to be all coming to head, with many questioning the current anti-trust laws. For Duhigg, this is similar to rise of General Motors in the 1930’s and the challenges that they also faced. However, the company is pushing back.
Interestingly, although the piece mentions Amazon Web Services, there is little mention of ICE or home surveillance. However, it offers a great starting point for considering the place of Amazon in our lives today.
My paper, “The Antitrust Case Against Facebook,” details the quintessential market power fact-patterns that standard economics and competition law have made familiar. Facebook’s ability to inflict harm today on both consumers and news publishers rests heavily, though not exclusively, on a single practice that Facebook engages in: surveillance. Facebook not only tracks users while they are on its site; it also follows them after they leave Facebook itself. This singular ability to surveil customers—across millions of independent and sometimes competitive businesses—is the source of Facebook’s unusually high profit margins in digital advertising, as well as its ability to inflict harm on market participants. Facebook could not get away with this when it faced real competition.
Dina Srinivasan summarises the case against Facebook.
Srinivasan’s paper is a sprightly and readable thing, but it clocks in at 80-some pages, so you may prefer her summarizing articlefor the Institute for New Economic Thinking. Either way, take note of the legal maneuvers she makes, which go even farther than Kahn did: Srinivasan makes a solid case that even the nearly useless Reagan version of antitrust law can be stretched to fit Facebook, in light of the case she lays out.
Cory Doctorow discusses Dina Srinivasan’s new paper The Antitrust Case Against Facebook published in the Berkeley Business Law Journal. Srinivasan documents the rise of the platform and how it would not have been possible in a pre-Reagan era. The association between monopoly and surveillance is also explored:
Srinivasan’s history of Facebook’s surveillance rollout makes link between monopoly and surveillance clear. For its first ten years, Facebook sold itself as the pro-privacy alternative to systems like Myspace, Orkut, and other competitors, repeatedly promising that it wouldn’t track or analyze its users activity. As each of Facebook’s competitors disappeared, Facebook advanced its surveillance technology, often running up against user resistance. But as the number Facebook alternatives could go declined — because Facebook crushed them or bought them — Facebook’s surveillance became more aggressive. Today, with Facebook as the sole dominant social network, people who leave Facebook end up joining Instagram, a Facebook subsidiary.
This is a topic Tim Wu, Charles Duhigg and Lina Khan have discussed. A summary of the paper was also published by the Institute for New Economic Thinking.
I really like Adobe as a company, but I think their suite has become so costly and unavoidable for the average creative consumer that they need to be a little bit smaller, so as to allow smaller players to compete without feeling like they have to go up against an impossible behemoth to even make a dent. Maybe Adobe fans won’t like to hear this, but I swear my case here is for the creative community’s best interests.
Ernie Smith explains why Adobe’s role at the center of the creative ecosystem should be of concern. The issue is that there is no longer any space for competition and innovation in this space. We often speak about Google and Facebook in regards to platform monopolies, but Adobe’s move to create and manage the marketing process is worrying.
Adobe is increasingly not only trying to run the software that can create your flyer or logo or commercial, but it’s trying to own the whole marketing process, too, soup to nuts. Some companies might love that sort of integration, and it’s a big reason why Adobe is making all these aggressive acquisitions. But a single company with that much power over a single field is worrying.
“Start by breaking off WhatsApp and Instagram.”
Nilay Patel explores the idea of reimagining anti-trust laws. At the moment there is too much grey for lawyers to argue about in regards to changes in price. Tim Wu and Hal Singer suggest that we need to think of anti-trust from the perspective of competition, not just cost. This is something that has been said about Google as much as Facebook. Cory Doctorow has also written about the problems big tech.
Antitrust has never been just about costs and benefits or fairness. It’s never been about whether we love the monopolist. People loved Standard Oil a century ago, and Microsoft in the 1990s, just as they love Google today.
Rather, antitrust has always been about progress. Antitrust prosecutions are part of how technology grows. Antitrust laws ultimately aren’t about justice, as if success were something to be condemned; instead, they are a tool that society uses to help start-ups build on a monopolist’s breakthroughs without, in the process, being crushed by the monopolist. And then, if those start-ups prosper and make discoveries of their own, they eventually become monopolies themselves, and the cycle starts anew. If Microsoft had crushed Google two decades ago, no one would have noticed. Today we would happily be using Bing, unaware that a better alternative once existed. Instead, we’re lucky a quixotic antitrust lawsuit helped to stop that from happening. We’re lucky that antitrust lawyers unintentionally guaranteed that Google would thrive.
Charles Duhigg takes a look at the history of Anti-Trust laws and the breaking up of monopolies. From oil to IBM, he explains why it is important for this large companies to be broken up. Not because of the consumer, but rather for the sack of developnent and innovation.
He uses the case of the vertical search site, Foundem.com, to demonstrate the way in which Google kills competition by removing them from searches.
In 2006, Google instituted a shift in its search algorithm, known as the Big Daddy update, which penalized websites with large numbers of subpages but few inbound links. A few years later, another shift, known as Panda, penalized sites that copied text from other websites. When adjustments like these occurred, Google explained to users, they were aimed at combating “individuals or systems seeking to ‘game’ our systems in order to appear higher in search results — using low-quality ‘content farms,’ hidden text and other deceptive practices.”
Left unsaid was that Google itself generates millions of new subpages without inbound links each day, a fresh page each time someone performs a search. And each of those subpages is filled with text copied from other sites. By programming its search engine to ignore other sites doing the same thing that Google was doing, critics say, the company had made it nearly impossible for competing vertical-search engines, like Foundem, to show up high in Google’s results.
Rather than living off their innovation, Adam and Shivaun Raff have spent the last twelve years campaigning against Google. Supported by Gary Reback, they took their case to European Commission in Brussels.
Reback had told Adam and Shivaun that it was important for them to keep up their fight, no matter the setbacks, and as evidence he pointed to the Microsoft trial. Anyone who said that the 1990s prosecution of Microsoft didn’t accomplish anything — that it was companies like Google, rather than government lawyers, that humbled Microsoft — didn’t know what they were talking about, Reback said. In fact, he argued, the opposite was true: The antitrust attacks on Microsoft made all the difference. Condemning Microsoft as a monopoly is why Google exists today, he said.
If such changes and challenges is dependent on individuals such as the Raff’s standing up, it makes you wondering how many just throw it all in. Cory Doctorow captures this scenario in his novel, The Makers.