“Over a decade later, Facebook has earned the prize of domination. It is worth half a trillion dollars and commands, by my estimate,more than 80 percent of the world’s social networking revenue. It is a powerful monopoly, eclipsing all of its rivals and erasing competition from the social networking category. This explains why, even during the annus horribilis of 2018, Facebook’s earnings per share increased by an astounding 40 percent compared with the year before. (I liquidated my Facebook shares in 2012, and I don’t invest directly in any social media companies.)”
” “Big tech” companies like Google and Facebook are, in reality, the products of hundreds of mergers. Each root below represents a company acquired by a tech giant at a particular moment in its history. A vast majority of these acquisitions, funded by public markets, have received minimal media coverage and limited regulatory scrutiny. But that is changing, given new concerns about consolidation in the tech industries.
(Alphabet)270 Total Acquisitions171 Competitive 55 Conglomerate 44 Others
David Lindsay: Yes, yes, yes. We should break up Amazon, Facebook, Google, and California.
Seriously, Amazon should be forced to sell every company it forced to sell to itself, like Diapers.com, as reported in Bloomberg Businessweek.
It appears that the other two giants are also guilty of throwing their weight around.
BUARLH! Break Up And Regulate Like Hell!
Many Americans pay close to $100 a month for smartphone service. And this pricetag isn’t some natural reflection of the service’s value. In many other countries, smartphone plans cost much less.
The economists Luigi Zingales of the University of Chicago and Mara Faccio of Purdue estimate that Americans pay $50 billion per year more than they would if they instead were paying European prices — for the same quality service. That translates into about an additional $30 per month for every American household.
Zingales discusses this research in a Times op-ed and argues — correctly, I believe — that it highlights the problem with antitrust policy in the United States. We have allowed companies to grow too large, to the point that many of them have outsize power. They can raise prices, as they are doing in the cellphone market, as well as hold down wages and unduly influence government policy.
European officials said Google, which makes the Android mobile operating system used in smartphones, broke antitrust laws by striking deals with handset manufacturers such as HTC, Huawei and Samsung. The agreements required Google’s services, such as its search bar and Chrome browser, to be favored over rival offerings. European authorities said those moves unfairly boxed out competitors.
“Google has used Android as a vehicle to cement the dominance of its search engine,” said Margrethe Vestager, Europe’s antitrust chief. “These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under E.U. antitrust rules.”
Soon the Raffs began daydreaming about turning their idea into a moneymaker. They didn’t have the funds to compete with huge dating sites like Match.com, so they applied for a couple of patents and began brainstorming. They believed that their vertical-search technology was good — better, in fact, than almost anything they had seen online. Best of all, it was built to work well on almost any kind of data set. With just a bit of tinkering, it could search for cheap airline tickets, or great apartments, or high-paying jobs. It could handle questions with hard-to-compare variables, like what’s the cheapest flight between London and Las Vegas if I’m trying to choose between business class or leaving after 3 p.m.?
As far as they could tell, their search technology performed better on such problems than Google did, which Adam discovered when he tried to buy an iPod online. “I spent half an hour searching Google for the lowest price, and it drove me completely mad,” he told me. It was impossible for him to figure out which sites were selling iPods and which were selling accessories, like headphones or charging cords. Or Google would show Adam one price, but then the actual price was completely different. Or there was an extra charge for shipping. It seemed to Adam his technology would do a much better job.
Google executives, had they known of Adam’s frustrations, probably wouldn’t have been surprised. For years, Google had been trying to build a tool for comparing online prices. “The idea was you should be able to input any item, and we’d show you the best place to buy it,” says Brian Larson, a technical lead for what was then named Froogle and today is called Google Shopping. Larson’s team was small — just himself and one other programmer at first, and roughly a dozen people at its height — and Larson would regularly test how Froogle compared with other online price-comparison services. “Sometimes we were neck and neck; sometimes, not so much,” Larson said. “We had a hundred million product listings, which was better than competitors.” But they were often outperformed by sites like PriceGrabber.com, which had many more employees devoted to price comparisons.
Froogle’s limitations tended to pop up particularly when users included too many search parameters. For a while, Larson had a specific test search that Froogle kept failing, something like “white running shoes and cheap and free shipping.” Inevitably, the first result would be a Christmas elf wearing running shoes that some guy was selling online. No matter how Google’s engineers fiddled with their coding, they couldn’t stop the elf from appearing as the top link. Eventually, a manager bought the elf so it wouldn’t appear in the search results anymore. “We made elf T-shirts,” Larson told me. “It became our mascot.”
Adam and Shivaun’s technology was good enough to tell the difference between an elf wearing running shoes and an actual pair of running shoes. It was good enough, in fact, to figure out which websites charged hidden shipping fees and which offered truly good deals. So the Raffs quit their jobs, hired a few programmers, spent months perfecting their technology and, in early 2006, unveiled Foundem.com, a vertical-search engine for finding cheap online prices, to a small group of friends and associates. Each time someone used Foundem to buy something, the Raffs would receive a small payment from the website making the sale. Adam and Shivaun weren’t sure their company would succeed — there were already a couple of other big price-comparison search engines, like PriceGrabber, NexTag and, of course, Google itself — but they figured this was how the internet was supposed to work: Two people with a new idea can take on giants and, if their technology is good enough, grow into colossi themselves.
From the archive of Thanh Nien Daily, 9/16/2016 From Bloomberg News.
“These companies used to sell heroin and Agent Orange. Now, they want to form the world’s largest supplier of seeds and pesticides.
EU seen approving weed-killer ingredient glyphosate amid cancer row Dow and DuPont to merge in deal to create $130 billion chemical giant French court confirms Monsanto guilty of chemical poisoning Trade wars: Monsanto’s return to Vietnam Monsanto weed killer can ‘probably’ cause cancer: World Health Organization
Two giants of the farming and chemical industries agreed to merge Wednesday in a $66 billion deal: the U.S.’s Monsanto and Germany’s Bayer, the original maker of aspirin. It’s the year’s biggest deal and will create the world’s largest supplier of seeds and farm chemicals, with $26 billion in combined annual revenue from agriculture. If the merger goes through, it will combine two companies with a long and storied history that shaped what we eat, the drugs we take and how we grow our food.”
This is a merger of two giants, that I hope does not get approval.
“Google suffered a major blow on Tuesday after European antitrust officials fined the search giant a record $2.7 billion for unfairly favoring some of its own services over those of rivals.
The penalty, of 2.4 billion euros, highlights the aggressive stance that European officials have taken in regulating many of the world’s largest technology companies, going significantly further than their American counterparts.
By levying the fine against Google — more than double the previous largest penalty in this type of antitrust case — Margrethe Vestager, the European Union’s antitrust chief, also laid claim to being the Western world’s most active regulator of digital services, an industry still dominated by Silicon Valley.”
Good article, thank you. We need and deserve more information. Is it true, as I heard today on NPR, that some of Google’s competitors find that their offerings in a “want to buy x” search, appear on page 4, while the google owned retailer is at the top of page 1. Does Google own retailers, and ecommerce sites? Which ones.
Should it be illegal for Google to charge for top placement? This is how they get their money, instead of making us pay a fee each month to use their search engine capability. If I were one of regulators, I would think about requiring Google to identify the companies that it owns. It already identifies paid ads, which one can hardly quibble with.