Linked by Thom Holwerda on Wed 21st Feb 2018 23:06 UTC
In the News

In other words, it's very likely you love Google, or are at least fond of Google, or hardly think about Google, the same way you hardly think about water systems or traffic lights or any of the other things you rely on every day. Therefore you might have been surprised when headlines began appearing last year suggesting that Google and its fellow tech giants were threatening everything from our economy to democracy itself. Lawmakers have accused Google of creating an automated advertising system so vast and subtle that hardly anyone noticed when Russian saboteurs co-opted it in the last election. Critics say Facebook exploits our addictive impulses and silos us in ideological echo chambers. Amazon’s reach is blamed for spurring a retail meltdown; Apple's economic impact is so profound it can cause market-wide gyrations. These controversies point to the growing anxiety that a small number of technology companies are now such powerful entities that they can destroy entire industries or social norms with just a few lines of computer code. Those four companies, plus Microsoft, make up America's largest sources of aggregated news, advertising, online shopping, digital entertainment and the tools of business and communication. They're also among the world's most valuable firms, with combined annual revenues of more than half a trillion dollars.

The recent focus on technology companies when it comes to corporate power is definitely warranted, but I do find it a little peculiar that it, at the same time, draws attention away from other sectors where giant corporations are possibly doing even more damage to society, like large oil companies and the environment, or the concentration of media companies.

One has to wonder if the recent aggressive focus on tech companies isn't entirely natural.

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RE[2]: Google is not a monpoly
by jonsmirl on Thu 22nd Feb 2018 02:51 UTC in reply to "RE: Google is not a monpoly"
jonsmirl
Member since:
2005-07-06

That is the difference between EU monopolies and USA monopolies. The EU will categorize someone as a monopoly even if they aren't erecting barriers to protect the monopoly. USA monopolies have to engage in the construction of barriers before they get punished.

I don't subscribe to the EU view. I don't believe simply having a high market share should be a crime. The crime is in erecting the barriers to keep competitors out.

In general I view the complaints toward Google as competitors trying to force Google to help them. For example if Google was going to all of the stores and making them sign contracts saying that they would exclusively offer their goods on Google and not on Foundem, that is monopolistic and should be punished. But if Foundem is arguing that Google has a high share and it should send Foundem free traffic to help them compete, in the USA that would considered ridiculous. Apparently the EU views otherwise.

From my perspective the EU really screwed up on this one. Google was actually helping EU retailers stay visible and make sales. Google was not charging them an affiliate kickback. Foundem on the other hand makes all of their profit from affiliate kickbacks.

The EU's actions have ensured Google is not going to put much effort into vertical shopping engines going forward. I believe the main effect of that is that Amazon will end up dominating EU shopping. I think the EU was very flawed when they ruled that Amazon was not a competitor to Google shopping.

I suspect in five years the EU will look like the USA. Here Google shopping is a joke and Amazon rules retail. And all of the local stores are dying. Check out the total collapse of shopping malls in the USA.

Edited 2018-02-22 02:59 UTC

Reply Parent Score: 1

RE[3]: Google is not a monpoly
by Alfman on Thu 22nd Feb 2018 05:22 in reply to "RE[2]: Google is not a monpoly"
Alfman Member since:
2011-01-28

jonsmirl,

That is the difference between EU monopolies and USA monopolies. The EU will categorize someone as a monopoly even if they aren't erecting barriers to protect the monopoly. USA monopolies have to engage in the construction of barriers before they get punished.

I don't subscribe to the EU view. I don't believe simply having a high market share should be a crime. The crime is in erecting the barriers to keep competitors out.


In the US, there's no law against being a monopoly, only abusing it. Are there laws in the EU that punish corporations just for being a monopoly? If so, I wasn't aware of that, would you cite some examples of companies being punished for their market share alone?



In general I view the complaints toward Google as competitors trying to force Google to help them. For example if Google was going to all of the stores and making them sign contracts saying that they would exclusively offer their goods on Google and not on Foundem, that is monopolistic and should be punished. But if Foundem is arguing that Google has a high share and it should send Foundem free traffic to help them compete, in the USA that would considered ridiculous.


Not necessarily. The thing is capitalism relies on two, sometimes conflicting, foundations. A free market, and competition. They can conflict because a totally free market will often result in monopolies/oligopolies at the top controlling the majority of the market, which is to the detriment of healthy & viable competition.

Therefor, unless we want to end up in an end game where a few individuals/companies control everything, then we need to shift our attention to the other tenant of capitalism, namely competition. We should strive to achieve a balance, ideally with more than just one or two companies controlling the top 90%. It turns out though that this is extremely difficult to achieve not only because of free market concerns, but also because the less competition there is, the stronger the consolidation of power becomes, which means that if there isn't adequate protection for competition over time, then even more interference will eventually be required to correct it in the future.


In any case, US leaders are not willing to tackle market consolation. So for better or worse, I predict things overall to get less competitive over time. This means that for future generations, capitalism isn't going to be as rewarding as it's been for past generations.

Reply Parent Score: 3

jonsmirl Member since:
2005-07-06

In the EU a company with a 'dominant share' is not allowed to 'distort' the market. The EU concluded that Google was distorting the vertical search engine market.

By their reasoning Google has a dominant share on general search. They determined that vertical search engines were dependent on general search and being denied unrestricted access to it. So they fined Google billions and made then give access to the vertical search engines.

Two issues I have with that:
1) The conclusion that vertical search was dependent on access to general search. The continuous ads I see on TV for Trivago are pretty good proof that general search access is nice free marketing, but not a required input.

2) The fact that the EU excluded places like Ebay and Amazon from their definition of vertical shopping search engines. If you include sites like this Google shopping does not have a dominant share.

Finally I think it is utterly ridiculous to fine a company $2.7B over the design of a web page.

Reply Parent Score: -1