After more than a year of investigations, House Dems have produced a 450-page report on market concentration in the tech industry, with a slate of findings that are obvious and long overdue, and a slate of recommendations that are simultaneously traditional and radical.
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Start with the findings: the market is concentrated and the companies preserve their monopolistic standing with anitcompetitive tactics:
* Apple& #39;s App Store stranglehold raises prices and transfers money from creators to the company
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* Apple& #39;s App Store stranglehold raises prices and transfers money from creators to the company
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* Google preferences its own services in search results
* Facebook buys companies for predatory reasons, to snuff out potential future competition threats
* Amazon rips off its sellers and engages in predatory pricing
https://www.wired.com/story/congress-unveils-plan-curb-big-tech-power/
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* Facebook buys companies for predatory reasons, to snuff out potential future competition threats
* Amazon rips off its sellers and engages in predatory pricing
https://www.wired.com/story/congress-unveils-plan-curb-big-tech-power/
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All obvious, but it& #39;s nice to have it in the record.
Then there& #39;s the traditional AND radical remedies: blocking mergers, prohibiting the creation of vertical monopolies by entering "adjacent lines of business."
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Then there& #39;s the traditional AND radical remedies: blocking mergers, prohibiting the creation of vertical monopolies by entering "adjacent lines of business."
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And then there& #39;s "structural separation" - the rule that banned rail companies from owning freight companies that competed with their customers and banks from owning businesses that competed with the businesses that borrowed money from them.
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There& #39;s a shifting of the default in mergers: the DoJ should presume ALL mergers and acquisitions by large firms are anticompetitive and require the companies to prove otherwise.
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A kind of neutrality in platforms, requiring them not to preference their own products over others. I predict this one will be the source of endless misery because it supposes that there is a "right" way to organize search results.
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Weirdly, this was Google& #39;s position for a long time. If you were an early web writer and you cornered a Google exec at a party to complain about your pagerank, they& #39;d just shrug and say, "Make the page better then."
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The implication being that they were measuring objective quality of your page, like they& #39;d invented a machine for taking pictures of the forms casting shadows on the wall of Plato& #39;s cave. It was an algorithm and algorithms are math and math is objective.
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This excited the world& #39;s governments, who started to say, "Oh, hey, if this is MATH, then it& #39;s not censorship to order you to change the math.
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"If we order you to keep certain things above the fold, or to downrank or banish others, that& #39;s like specifying the equations for structural steel, not like ordering the editor of the New York Times to put certain articles on the front page."
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Hoist on their own petard, Google started working with eminent First Amendment scholars to advance the (correct) position that the math was in service to expression: the programmers and QA teams that wrote and tuned the algorithms were making editorial judgments.
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These were indirect - in the way that, say, a newspaper proprietor might say, "We need more coverage of inflation" or "Let& #39;s call Qanon a & #39;cult& #39; and not a & #39;conspiracy theory& #39;" - but they were acts of human expression.
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I mean, they HAD to be. Google doesn& #39;t have a webcam in Plato& #39;s cave. There is no objective, universal quality metric. And they& #39;re not choosing sites at random, either. So it has to be judgment, and judgment is expression.
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All to say: "Good luck with search neutrality, Congress."
But there& #39;s more! The report calls for increased budgets for antitrust enforcement and killing forced arbitration and its bans on class action suits.
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But there& #39;s more! The report calls for increased budgets for antitrust enforcement and killing forced arbitration and its bans on class action suits.
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And finally, the report calls for overturning 40 years& #39; worth of antitrust case-law, the decisions that depended on the doctrine of the Nixonite criminal Robert Bork, who became a court sorcerer to Ronald Reagan.
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Bork& #39;s doctrine was that antitrust law needed objective standards and objective standards were impossible to come by in markets - you could never hope to objectively define when a company had too much marketshare or was abusing its power.
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This may sound like my argument about "search neutrality" - but there& #39;s a big difference. Bork had a counsel of despair: "Because we can& #39;t identify shenanigans, we shouldn& #39;t try to prevent them."
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But the pre-Borkian enforcement strategy wasn& #39;t grounded only in objective correlates of shenanigans: it was also designed to make it harder for shenanigans to occur. Pre-Bork, we fought monopolies because they were bad - they had the power to distort markets and policies.
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Pre-Bork, we fought monopolies because they were monopolies. Post-Bork, we only fought monopolies if we caught them in the act, and even then, we could only win if we could prove shenanigans - and monopolists got really good at making it hard to prove them.
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For example, they perfected the idea of the "market definition" defense. You hear this with Amazon, when Bezos tells Congress that Amazon isn& #39;t a monopoly because people buy stuff at Walmart.
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By including "Walmart" (or every time in which goods change hands for money) in the definition of Amazon& #39;s market, Amazon can make itself out to be a bit-player.
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Here& #39;s an example of a Borkean giving this line just last year: "Facebook doesn& #39;t have a monopoly because I can still make phone calls."
https://www.youtube.com/watch?v=Y_Jp-GJ9LM0
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https://www.youtube.com/watch?v=Y_Jp-GJ9LM0
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Returning to a pre-Borkean vision of antitrust enforcement is profound and would have far-reaching implications for telecoms, entertainment, pharma, accounting, logistics, energy, transport, aviation, etc.
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But while all these industries got concentrated through the same methods - predatory acquisitions, mergers to monopoly, vertical monopolies - they aren& #39;t all the same. What kind of industry they are MATTERS.
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Tech has two unique characteristics:
First, it is foundational. Our ability to demand better policy and to collaborate to hold policymakers to account depends on tech. We& #39;re not going to organize a global movement by wheatpasting posters on telephone poles.
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First, it is foundational. Our ability to demand better policy and to collaborate to hold policymakers to account depends on tech. We& #39;re not going to organize a global movement by wheatpasting posters on telephone poles.
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And second, tech means computers, and computers are "universal" in a way other industries& #39; products are not. Computers can interoperate with each other in ways that, say, cars or can-openers or beers cannot.
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That interoperability has been the source of enormous dynamism and a check against concentration in the history of tech: what companies thought of as walled gardens that exploited "network effects" became feeding pens for new market entrants.
https://www.eff.org/deeplinks/2019/10/adversarial-interoperability
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https://www.eff.org/deeplinks/2019/10/adversarial-interoperability
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Whether that& #39;s Static Controls - a tiny Taiwanese company that refilled IBM Lexmark& #39;s toner cartridges and got to piggyback on the vast market IBM had developed, growing so large that they ACQUIRED Lexmark or...
https://www.eff.org/deeplinks/2019/06/felony-contempt-business-model-lexmarks-anti-competitive-legacy
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https://www.eff.org/deeplinks/2019/06/felony-contempt-business-model-lexmarks-anti-competitive-legacy
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Apple, which defeated Microsoft& #39;s office dominance by creating Iwork, reverse-engineering the Office file-formats so that Mac users didn& #39;t need to convince their colleagues to switch OSes, they could just share documents with them.
https://www.eff.org/deeplinks/2019/06/adversarial-interoperability-reviving-elegant-weapon-more-civilized-age-slay
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https://www.eff.org/deeplinks/2019/06/adversarial-interoperability-reviving-elegant-weapon-more-civilized-age-slay
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The same tech companies that rose to dominance through this #CompetitiveCompatibility are now its worst enemies, lobbying against #RightToRepair, building products around #DRM, and claiming their terms of service have the force of law under #CFAA.
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Restoring the right of new market entrants to make stuff that plugs into the existing dominant products and services would go a LONG way to restoring dynamism to tech, to making companies& #39; survival reliant on pleasing users, rather then dominating markets.
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And while the Congressional report doesn& #39;t give interop the centrality it deserves, it DOES mention it and discuss its importance.
https://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2020/10/06/investigation_of_competition_in_digital_markets_majority_staff_report_and_recommendations.pdf
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https://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2020/10/06/investigation_of_competition_in_digital_markets_majority_staff_report_and_recommendations.pdf
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