> The plan she released consists of several parts. Companies with revenue of twenty-five billion dollars or more that provide an online marketplace would be designated as “platform utilities” and would not be allowed to both own the marketplace and participate on it. Right from the start, Warren says, Amazon would have to separate its “Basics” business, which sells products under a house brand, from the rest of Amazon, and Google’s advertising business and its search business would have to be split apart. Secondly, she pledged to “empower” federal regulators to undo many of the tech-industry mergers that have already happened, such as Amazon’s acquisition of Whole Foods and Zappos; Facebook’s takeover of Whatsapp and Instagram; and Google’s purchase of Waze, Nest, and DoubleClick.
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.
So it's okay for supermarkets and brick/mortar retailers to offer house brands but not online retailers. Pretty arbitrary line.
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.
The line is not 'you are not allowed to ever do this' but 'this particular instance is hurting competition'.
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.
This situation isn't just hypothetical. In the 1940s the grocery chain A&P was the largest retailer of any sort in the US and there was a real concern that they were anti-competitive because they owned a number of food processing plants in addition to their stores. The Federal government brought suit but didn't succeed in breaking up A&P. Ultimately, of course, A&P didn't succeed in monopolizing groceries, and even went bankrupt a decade or so ago, but they were the WalMart of their time.
It's funny that you mention supermarkets, because the A&P grocery store chain was from 1915 to 1975 the largest grocery retailer in the US. At its peak in the 1940s, A&P captured 10% of total US grocery spend. It too came under scrutiny and was accused of being a "monopoly", as its cheap prices forced smaller competitors out of business. And yet despite being a "monopoly", it began to decline in the 1950s when it failed to keep pace with competitors that opened larger supermarkets with more modern features demanded by customers. It continued its slow decline until it completely shuttered in 2015. A&P was once as recognizable as Google or Walmart is today, and yet most people have never even heard of A&P.
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.
The fact that you feel like you’re “under the thumb” of companies that provide a majority of their software products for free is really a testament to how wealthy the market has made us.
The point is, the products aren't really "free". Maybe in pure money terms, but there is a price to be paid to make use of the services, in terms of data.
What exactly is your complaint against FAANG? You are free to buy a Linux or windows laptop, not create a Facebook account, subscribe to Hulu, not Shop amazon, use fast mail etc...
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.
Well sure, I agree that there are only 2 smartphone OSes on the market. But how is that an argument for breaking up the tech companies? Breaking up the tech companies is not going to produce more smartphone OSes.
On the other hand, there are now a couple companies like Purism and Pine that are working on pure Linux smartphones. We'll see if any of them are successful in the long run, but I think that's a pretty good example of the market doing its thing and creating competition.
> 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.
Those are two examples. What about Standard Oil for instance? AT&T?
You seem to be arguing that the same principles of government should apply at every scale. I don't think that can work. Should the small town consider purchasing a couple B2 bombers? Should the national government decide if my road needs to be repaved?
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.
Don’t be so cavalier in shrugging off the person you’re responding to. This kind of national scale governance is equatable to “centralized planning” governance. You have to consider it from the local economy perspective, otherwise you’ll be perpetuating inequality in many parts that you don’t see.
A town is more open to competition, anytime a third player can open up a store with relatively small investment. Meanwhile to take on a dominant player like Amazon is extremely hard.
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.
Except that the specific example everyone sites is Amazon, and Amazon isn't even in the double digits of all retail in the US [0]. WalMart on the other hand is 8.9% of all retail [1] -- nearly double what Amazon captures. Neither one is that much of the total market. Online is also a surprisingly small portion of total retail still, esp. when you start looking at the magnitude of the numbers.
Just to get this out of the way, I’m not saying it’s a good measure but I think it’s trying to tackle a real problem.
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.
> A town is more open to competition, anytime a third player can open up a store with relatively small investment. Meanwhile to take on a dominant player like Amazon is extremely hard.
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?
A physical store, at a minimum, has built in advertising based on location. Budget in local advertising and people will shop there if prices, service, location, and the products are good. I couldnt even imagine how a new online store would be able to start competing with Amazon. There are existing webstores that over the years have lost a lot of business to amazon (Newegg, Sweetwater, B&H Photo, etc). Even local stores are losing business to amazon.
For sure. There are so many more parameters to physical store. Proximity is a HUGE one. Quality of service. Specific items that they stock. These kinds of things allow smaller stores to exist in my small town even while there is a huge supermarket nearby.
On the other hand, I do not use ANY one-stop site for online shopping outside of Amazon.
How is a Walmart easier... Amazon style disruption was the only way Walmart could ever be challenged, precisely because Amazon’s logistics are easier. These kinds of brick and mortar decisions at the town level have like 10 year consequences at a minimum, if not more.
It’s extremely difficult to project forward 10 years in tech.
Sibling comments make a point on how a physical store is easier to bring to market.
> 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.
> 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.
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 agree that the internet is a more liquid and prone to winner-takes-all market. That’s why regulators tend to apply different rules.
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.
So not really a leading question, just curious... why shouldn't I be OK with buying the cheap mega-supermarket brand product? As the consumer, I just want a cheap price - I personally don't really care where the money is going. If small companies can't produce a less expensive alternative, then won't breaking up the larger company just increase costs to the consumer? Thanks for your thoughts.
This comes up with predatory pricing antitrust claims, which are complex in themselves, but you shouldn't punish someone or an organization for behavior that they only have the potential to do, but have not done.
I think it's destined to happen when there is less competition. I don't think of it as punishment, but as prevention. Even if we assume a company was altruistic and kept prices artificially low, the lack of competition would at least prevent a product from getting cheaper faster due to less players innovating... and we wouldn't even be able to measure what we're missing out on.
To answer with another question: how can you tell the difference between big pseudo-monopolies truly providing the best product or service vs. smaller companies being unable to enter the market with a better one because a big company has locked them out?
Maybe pseudo-monopoly was the wrong term… I'm basically saying that if a company has enough market or lobbying power, it can distort the market by blocking entrants who might make better/cheaper products or services. For example, ISPs lobbying to ban municipal competitors.
> why shouldn't I be OK with buying the cheap mega-supermarket brand product
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.
Yes, and effective regulation is precisely about preventing broader emergent patterns that harm innovation, competition, and society as a whole as a result of the (inevitably) short sighted, individual actions of consumers who indeed often only care about the cheapest prices.
Then it should apply to walmart, target & costco then, which many of the same arguments applied now and 30 years ago and have a similar range of market cap. But these regulations never materialized.
I don't disagree with you but I think the argument there is that those three compete with each other so no one has absolute dominance over the market place. Oligopolies aren't much better for the public than monopolies but they seem to get a lot less scrutiny from regulators.
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.
Thing is the big tech cos also compete with each other. You can online shop at amazon, walmart, ebay and many other small online shops. Same with advertising. You can advertise at google, fb, twitter and a bunch of other small advertising providers.
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
I don't think they can specifically address a single entity like that: the laws have to be applicable across the board. I believe otherwise it would be the constitutionally-forbidden "Bill of Attainder".
It would only be a Bill of Attainder if it targeted and punished specific entities. From what I can gather, this just sets parameters. It would likely fall under our existing antitrust framework.
...or...it might lead to where we were in the 90s where you installed un-trusted apps from the web and took your risks with viruses or spyware. I actually like the idea of a central app store where at least there is some process. Perhaps we can have a better process, or more fine grained permissions rights, but to open up the gates seems like a big step backwards.
You can always add moderation on top of something, but once it's on you can't take it off.
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.
Well, what about the EU browsers solution? Google could still have its own app store, but instead of being pre-installed and integrated, the user would have to select one or more during the initial system configuration (and have a menu for changing that later).
> Companies with revenue of twenty-five billion dollars or more that provide an online marketplace
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.
Presumably the wording of the bill would require separation in the online marketplace, but not the retail stores. That is, Walmart stores could still favor "their" own brands, while they would be forbidden from doing so online.
The average $25bn grocery-store chain is. Which was my point. The two criteria really just boil down to one criterion—size—because internet presence follows from size.
The average grocery store chain, even the largest (Kroger) doesn't have online dominance and potentially anticompetitive practices on the same scale that Amazon/Google/Facebook do.
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.
The line between "own produced" and "whitelabed" is also tricky (or maybe it's not, if you're an expert in the industry). Is it "own produced" even if it's by a contract manufacturer, as long as that particular product isn't produced for anyone else? Large retailers demand unique models of things like electronics to prevent comparison shopping/price matching.
Hah yes. My original list was much more than three long, you can find many places to draw the line.
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.
I don't think it's quite that simple. I'm not in the business, but every time this comes up someone points out that stores don't actually always buy inventory. Often times they are simply selling the shelf space and it's up to distributors to stock it themselves.
I know a rep who leases freezer space from our local big chain grocery store and is responsible for that area. Ive heard of quality issues from this specific ice cream before, and it always reminded me of getting poor quality items from non-amazon sellers.
A lot this depends on what they mean by marketplace. Amazon (and Walmart I think) don't just buy and sell stuff. They also let you sell stuff through them.
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.
There are lots of things we don't have specific laws about because they haven't become a problem to everyday people - online retailers absolutely have abused market control to enrich themselves - but if a brick and mortar store ever managed to Amazon things up then I'd be happy to see this law expanded to include them... to my knowledge, as terrible as Walmart is, it isn't quite up to Amazon's level of terrible.
> 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.
...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.
Supermarkets purchase their inventory so it's in their best interest to sell it. Amazon doesn't really care if the 3rd party seller's inventory never moves because it doesn't cost them anything.
Supermarkets are not marketplaces. Amazon is. This is well thought out and it’s a very clear distinction.
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?
It always amuses me how people spend 4$ on a cup of coffee, but refuse to pay 99 cents for an essential productivity tool. If payed GMail means that they actually listen to their users when desigining their interfaces, it sounds like a positive change.
I agree, Amazon having a house brand while knowing the sales numbers and margins for other products is completely analogous to Walmart and CostCo having house brands while selling competing products.
> Walmart and CostCo having house brands while selling competing products
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.
This isn't quite true. It was never disallowed for IE to be bundled.
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.
Wrong. These companies held us back because of their size, and it took a lot for a competitor to come along and unseat them because of their market inertia. Generally, tech had to advance enough to make their dominance obsolete, instead of a better competitor being able to unseat them just by having a better product.
If this hadn't been the case, we'd be farther along now.
IE used ActiveX. Lots of websites back then used ActiveX because IE was "the standard". ActiveX was MS proprietary, so other browsers couldn't use it. This made many websites only usable on Windows.
Wrong. ActiveX ran binary code directly on the machine. You can't do that if you're not on a Windows platform. I suppose maybe you could have used ActiveX to run Sun binaries on a Sun platform, but how useful is that? Any website is only going to have Windows/x86 code, and will fail on a Sun or other platform.
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.
ActiveX failed eventually because of the rise of Javascript, and also because ActiveX was a giant security nightmare.
Well not sure how it is in the USA but the big supermarkets in the UK defiantly abuse their position to bully farmers and even big multi nationals.
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.
> Right from the start, Warren says, Amazon would have to separate its “Basics” business, which sells products under a house brand, from the rest of Amazon, and Google’s advertising business and its search business would have to be split apart.
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 curious how people imagine this would even work in practice. Those departments share the same internal code base[1] and I would expect splitting those dependencies up would take a decade of work, especially when code is constantly changing so almost all development has to be frozen while the split is happening which essentially means those services stop making updates which means it's a dead Internet company.
I think this is kind of the point. If Google’s broad portfolio of products are so coupled together that they massively leverage data/technology from their other products to the point where no startup can meaningfully compete with any of their products, they should be broken up.
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!”
I used to work at Google, so let's look at the practical difficulties with this idea of splitting. It's not impossible - AdSense exists after all - but it'd create a lot of problems.
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.
Right, telecom is a great example of where breaking up an entity benefited the consumer and prevented monopoly. /s (all the bells merged back in some form or another into present day AT&T and Verizon).
Mostly because the SEC has been asleep at the wheel when it comes to breaking up telco merges - and the FCC has been happily steered to help reinforce anti-competitive practices... like, for instance, blocking municipality internet build-outs.
I think a strong case can be made that breaking up Ma Bell has provided all sorts of benefits that have lasted since then. If nothing else, at least we have two behemoths in AT&T and Verizon rather than one.
It would mean the search company would be different than the ad company. They could still work together but it would probably result in lawsuits (by shareholder claiming they're not looking after their interests by not looking to higher profiting contracts) if google search didn't do due diligence in offering up the ad space to auction by other companies.
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 dont understand the reality of this either. So how does 'google search' pay the infrastructure costs? Do they open search to allow other SSPs to bid? but 'google search' would still have to take a % of the price. what about youtube and DCM?
Presumably it means they also couldn't both by Alphabet anymore. For the law to be meaningful in any way, it would have to be written such that they have to be separate companies that do not share a common ancestor.
Why in the world would you want another company to run the App Store?? I for one have no interest in returning to the PC days of crapware.
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.
I think the implication is it should also apply to sales within their brick and mortar shops too, otherwise it's a bit hypocritical. It would also create a disincentive to use online sales channels, which could create knock on negative economic effects.
The bigger question is whether this would affect in-store (vs online) house brands.
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.)
I can definitely see that happening. I wonder if that would reduce the amount of unprofitable/unsustainable but heavily VC-invested companies. The big players we all think of (Uber, WeWork, etc) aren't looking to get acquired anymore, but would investors have been more cautious to invest in these companies if they knew the only exit plan was IPO'ing?
What about Google apps on the Play Store or Apple apps on the app store? Would google be allowed to have videos on Youtube? What about Netflix? It makes sense for Basics but there are many other areas where it kinda breaks down.
We're a nation of laws, so it would apply to all of them too.
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.
So Valve Software would no longer be allowed to distribute Dota 2 through Steam? Most of the people I know who installed Steam were drawn there by Dota 2, CS, Half Life, Portal or Left 4 Dead (all Valve titles). In this case, the third party sellers directly benefited from the user base who were drawn to the platform.
Who really benefits if Valve stops developing games?
Who says that the company running Steam must be the same company that adds new hats to TF2? Valve could easily be split into two companies. It might even force the gamemaker Valve to come up with some new games, which AFAICS they largely stopped doing in recent years.
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.
If they license to one distribution utility, and not the other, then they are in violation by trying to vertically integrate. (The legal term would be "cartel".)
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.
Right, but those equal terms can still be quite expensive, essentially forcing those platforms into a bidding match. If Amazon can afford $100M and Netflix only $80M, Disney can offer their catalog to anyone for $100M, and Netflix would be unable to afford it.
But it would be brain dead for Netflix to not take the deal. If the base cost of everyone is going to be USD100M, then everyone's base cost is USD100M. The law would also require Amazon to give Netflix the same access to its networking platform that it gives its own divisions. (In fact, by my understanding of this whole "platform utility" thing, I'm pretty sure Amazon Prime would have to split from Amazon and buy access to the Amazon network services at the same market price as Netflix and everyone else.)
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.
Netflix was the initial leader simply because they started earlier; now that other competitors appeared, they have a vertically integrated platform holding some extremely popular exclusive content (House of Cards, Stranger Things, Casa de Papel). And you're telling me they'd rather become an undifferentiated platform, competing only on the technical merits of their streaming tech (part of which runs on their competitor's machines!) and price?
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.
>(part of which runs on their competitor's machines!) and price?
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.
I would absolutely love to see the Play Store and App Store spun off into independent governance as an effect of this law... the Play Store is less terrible, but Apple users are pretty much locked into exclusively using the App Store.
In Apple's case I think it would be more like they can't set up the App Store's rules or iOS to privilege Apple apps as the default for things. So like, default mail clients or browsers.
Wouldn't this basically start by destroying many American companies? Nest would have nothing but it's IP seeing as Google owns the platform, same for IG. On the other hand, what is stopping IG/ Nest from licensing the old parent's services? seeing as I imagine all of these post-breakup companies would still have the same investors, what's the difference?
Basically, how would you stop Google from shadow-running Google Ads? What would stop them from preferring Google Ads?
This is very troubling to me. My employer's revenue is quite to this level yet, but it's within view. We're a LAR/VAR of computer products, so naturally we've got an ecommerce website. A minority of the products available on it are for services we provide. This seems to be saying that we wouldn't be allowed to do business this way anymore.
I believe you'd be quite able to continue as long as your business either exclusively listed their own products... or stopped participating on the open marketplace you're hosting.
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.
Right. So my employer is at $10B today, and our growth is such that achieving that arbitrary $25B is a reasonable goal.
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.
>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.
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.
These attacks on tech companies are extremely disappointing. Candidates are too cowardly to go after true evil, such as the Chinese government torturing protestors. https://joelx.com/torture-in-hong-kong/15239/
I’m always curious how much I should trust this sort of reporting. Without more info, it’s possible this is manufactured anti state propaganda. And, in general, I’d rather have a lack of beliefs than a portfolio of beliefs that are 25% fake.
Unclear, but what's known is that China is trying desperately to change the narrative and spread disinformation on HK, making it seem like the protestors don't have legitimate concerns. I can attest from both friends in HK as well as more than plenty of qualified media that the protestors are being peaceful and have real concerns, but the feeling of people in HK seems to be split generationally (older people mostly want peace and not for Chinese forces to be coming over the border).
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.
Duck Duck Go isn't a search engine - they don't index the web except in the most misleading sense of the term. It aggregates results from real search engines like Bing and Yandex, who cover the cost of indexing the web with their own version of adsense.
People say google is a filter bubble, but I've forced myself for years to use DDG on most of my machines and it's not a filter bubble. DDG is just terrible at finding useful results even for basic things. Especially searching for programming related things it seems to prefer sites or posts that are a few years old. 95% of my searches retreat to using !g pretty quick. I don't know why I keep adding the extra step. It's like I'm pitching a penny of idealism into a bottomless well hoping it'll turns into a geyser.
People advocate for DDG not because it's better search but because it's better for you. In the similar way that people advocate using free and open source software and not proprietary.
I get that and that's why I use it. But the 95% !g rate makes it a cargo cult exercise. DDG is our best option, but it's not even close to what it needs to be and that's probably because it's copying the biz model of the big guys but can't do well because of the restrictions that make it attractive as an idol. I suspect that if anything ever delivers on an open promise of web search it will operate very differently and may not show up in the next 5-10 years.
Except DDG is a for-profit company that is not open source - one which doesn't submit to third party audits or validate their privacy claims. As a small company, they don't have much to lose either if they did sell your data since they're essentially just a reskin of other search engines.
The time will surely roll itself back if we put it in the law!!
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.
Alternatively, it would just cause small companies and startups to never innovate, because they know that they can't make money off of it by selling to a bigger company.
Big companies aren't charities, they only buy startups because they expect it will make them money. Why wouldn't they make money by remaining independent?
Because sometimes a technology in and of itself is not profitable, and is instead only profitable to specific large companies that would purchase them.
There are tons of reasons why it would make sense to purchase a company, that would never be profitable on its own.
"No Bill of Attainder or ex post facto Law shall be passed."
- 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.
The Supreme Court has held that this applies to criminal law - you can't change the punishment of a crime or change rules of evidence to convict someone who was acquitted.
You can certainly pass laws to undo a merger or (equivalently) break up a company.
The problem's not the "ex post facto". The problem is the "Bill of Attainder". You can't pass a law that, e.g., breaks up Amazon - to do so would be to deprive them of property without trial.
But you can create a law that Amazon (and potentially others) will be in violation of, and following proper trial, they are broken up.
That makes absolutely no sense. An ex post facto law is a law that criminalizes behavior after the fact. No one is saying the mergers were criminal, nor is breaking up the companies intended to be a legal punishment.
A bunch of folks have pointed out how factually incorrect this comment is in the specifics but I'd also like to mention that amending the constitution isn't a bad thing. "Originalists" are a weird bunch since they seem to hold the original state of the document as immutable while the founders had the foresight to include remedies to amend the constitution within it... it's a living document.
Also, just to reinforce the point other folks have mentioned - that clause doesn't work like that.
Ex post facto only applies to criminal laws (Calder v. Bull). And it generally only applies to punishments for crimes. See how sex offenders had to register even if their crimes were committed before the Adam Walsh bill was passed, because registering as a sex offender is not a punishment.
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.