If they are, they are not a traditional monopolies.
Traditional monopolies "control supply of a good or service, and where the entry of new producers is prevented or highly restricted."
In this case, the supply of a good or service (social networking, webpage indexing and searching) are not controlled by Facebook and Google because they aren't finite resources. Anyone can index the web and anyone can build a social network and Google/Facebook aren't going to crush you with lawsuits or some other nefarious tactic to maintain their position (AFAIK). Entry of new producers of these services is not prevented or highly restricted. New social networks and search engines pop up all the time.
What Facebook and Google have is massive, large scale user loyalty. Despite alternatives existing (Bing, Mastadon, DuckDuckGo, Myspace, etc.), users are voluntarily choosing to use Google and Facebook. This is not a monopoly, IMO.
Agreed, I made a similar point recently[1], that a monopoly should be judged by lock-in, not by raw market percentage, which is an arbitrary measure anyway; no one cares that I have a monopoly on SilasX-labor. What matters is whether it's hard for others to offer alternatives to SilasX-labor and whether buyers can switch to that alternative.
In that sense, you should worry about monopolies on OSes or rail routes, which have those kinds network/lockin effects, not search engines or (as was in the news recently) retail sales of organic foods (where it's easy for numerous grocery stores to enter the market if they wish)[2].
The service google and facebook provide is access to their captured audience. In the case of google that is the advertisement market with search and the platform of youtube. It is rather commonly known that many video producers are extremely unhappy using youtube but feel locked in since thats where the audience is, and the audience is equally locked in since youtube is where the producers are. New video platforms pop up all the time but with the captured market being what it is there is a huge wall for both producers and viewers to switch. A better video site have a hard time to compete with youtube, not based on merit but based on market capture.
I am not sure what you are referring to by a "traditional" monopoly. Your definition, "control supply of a good or service, and where the entry of new producers is prevented or highly restricted," sounds like the definition of any monopoly which seemingly covers Facebook and Google.
Monopolies are extreme examples of lack of competition in a market. One way non-competitive market equilibriums occur are when barriers to entry for potential competitors rises.
For Facebook, the network externality is a bit more straightforward since it is a first order effect in that new users looking to adopt or join a social network choose to join the one which has the most other users they are interested in (typically friends, but could also be public figures). This tendency becomes a self-reinforcing trend as more and more users join the single largest network. This dominance in users attracts advertisers which are the primary source of revenue for Companies whose primary product is a social network.
For Google, it's also an information play. The more users they can have an interaction with the more data they can scrape to feed their advertising engines. Once again, advertisers are incentivised to pay the best/biggest data troves which gives Google the ability to invest even more in providing and improving services to attract users. Which again, becomes a self-reinforcing cycle.
I wouldn't say that user loyalty/user's reticence for change is not a contributing factor, I think it is; I just don't think it would be correct to say Google and Facebook aren't the beneficiaries of monopoly-like market equilibriums. It's a stretch to call them true monopolies (actual singular market suppliers), but their market control and power are rapidly approaching, if not already equal to or greater than, that of historical examples of monopolies and targets of anti-trust legislation.
It’s kind of a rich get richer situation. The cost and difficulty of competing against Google for search, for example, requires just gigantic amounts of resources, time, and research. Meanwhile a Google has had all 3 of those for years and years now. To beat them at their own game requires much of the same thing, unless the answer isn’t based on crawling the web and attempting to parse natural language.
For me, the reason they have such power in the marketplace is because they have the historical data on all these users. "Lock-in" can be overcome. Technical capabilities can be bettered by other companies, but when it comes to training sets, it's hard to start late...
> Traditional monopolies "control supply of a good or service, and where the entry of new producers is prevented or highly restricted."
It might not be prevented or restricted in the traditional sense, but the barrier to relevant market share has become nearly impossible to cross. The alternatives you cite, besides maybe DDG, aren't serious contenders to Google or Facebook.
Now, perhaps they would be if people paid to use those services, then they'd be more likely to pick and choose between the selection because they're going to want to pay for the right one for them, not necessarily the one that everyone else is using. But because the internet is largely ad-funded, hence nobody has to pay for most immaterial things, they're free to flock to wherever the crowd may be. That's why it's particularly bad that Facebook and Google are such "monopolies", even if the word doesn't exactly fit the situation. To compete with these services, you can't just appeal to a person's sensibilities within a market. DDG might be an exception, but it hasn't been around long enough for us to tell whether it's just a fad or will be quickly stamped out by something else.
If they are, they are not a traditional monopolies.
"Traditionally," crossing over a farmer's land entitled the farmer to extract a fee from you, no matter what altitude you crossed over at. The law had to change once the technological reality changed.
In this case, the supply of a good or service (social networking, webpage indexing and searching) are not controlled by Facebook and Google
I think this is a bit of a sham. As you observe, the mere existence of website pages isn't worth anything by itself.
What Facebook and Google have is massive, large scale user loyalty.
Human attention, on timescales measured in hours or days, is still a finite resource. Human attention, measured on a per-capita basis is still a finite resource. If you just call it "loyalty" and make some kind of claim of market sacredness to your hard earned spoils, you're just obfuscating the finite nature of the resource the actual product is based on.
Despite alternatives existing (Bing, Mastadon, DuckDuckGo, Myspace, etc.), users are voluntarily choosing to use Google and Facebook. This is not a monopoly, IMO.
You're actually just begging for a special exception for network effect based monopolies.
I think this is the sticking point. A lot of the time this loyalty is not real. Many people would happily move elsewhere if the service was as good or better. The trouble is, every other alternative is basically doing the same thing as Google and FB, so there's little incentive to move.
However, it's clear that a monopolizing aspect exists because for every email I write, there is (probably) a very high chance that google will read it, because it ends up on their servers.
For every website I visit (if I disable uBlock, of course), there is a very high chance that I'll be subjected to FB tracking.
So, although these companies are not a 'classical' monopoly, I think it's fair to state that they are definitely monopolizing our usage of the internet. The real problem is that all the other 'wannabe' alternatives aren't all that much better, with (perhaps) the exception of the Search Engine space (ddg, startpage).
> where the entry of new producers is prevented or highly restricted.
Is there a term for when a new entry can be easily killed if the other party simply decides to duplicate their product/service/offering? Google and FB do not prevent entry, but they sure can kill new entrants easily with funding. See Instagram implementing 'Stories' which killed Vine. See Twitter Periscope killing Merekat, etc.....
If anything, we need to update the definition of the existing term to include the new manifestations of monopolies that tech companies can form.
While Google and Facebook don't control a finite resource in the traditional sense, they do in the sense of mindshare, which is absolutely a finite resource.
It's called a dominate marketplace. Amazon, google, facebook, microsoft, apple. They have a monopolistic platform that they use to bundle other services and products.
Also, in google and facebooks case the "consumers" are the product and the advertisers are the buyers.
>Anyone can index the web and anyone can build a social network and Google/Facebook aren't going to crush you with lawsuits or some other nefarious tactic to maintain their position (AFAIK).
Maybe but you're also almost certainly going to be acquired by them.
Then Microsoft wasn't a traditional monopoly either.
Maybe the term should be "network monopoly" where the network effect is the mechanism by which they restrict the entry of competitors? That's very much true for social media companies.
If your argument was applied to something like money, the conclusion would be that governments do not have any control over the financial system, because anyone can chose to barter and anyone can chose to break the law.
>What Facebook and Google have is massive, large scale user loyalty.
Google has effective control of web standards.
Edit:
Also, the podcast directly addresses your comment. In fact, that's what it is about.
>Traditional monopolies "control supply of a good or service, and where the entry of new producers is prevented or highly restricted."
Well Courts have ruled the NFL is a monopoly...but there is no control over new entities organizing and playing football games (i.e. not prevented or highly controlled).
Have you actually tried indexing on your own? Most websites whitelist the google crawler and backlist anyone else they detect. If you want to be nice and respect robots.txt a lot of those whitelist only Googlebot.
This isn't the 90s where anyone can crawl the web without countermeasures.
They do have a monopoly because they hold a patent on the search algorithm. While 'anyone' can come up with a new search algorithm, are you really going to best the authority measure used in academia for a hundred years?
Here's the question you need to answer. If they are evil, can they cause a lot of harm that will be hard to protect against or correct? If so, then it matters.
Google and Facebook both want to be publishers when it suits them, and common carriers when it suits them, and both have shown, I think we can all agree, a propensity to be evil. I think it's telling that Google retired, "Don't be evil."
I think Google is worse in that regard since they are so much more pervasive. It's easy enough to permanently opt out of Facebook, but to avoid using Google is difficult, if not impossible.
The other question is that do these companies allow for competition, not that they are necessarily explicitly preventing competition (although they may be), but whether or not they are so successful and have so much of a market share that it is literally impossible to compete with them, and again, I think the answer is yes. We see new competitors for Facebook on almost a weekly basis, and none of them ever get anywhere, not because of whether or not they are any good, but the fact that they can't compete because pretty much everyone who isn't actively boycotting Facebook is on Facebook (including me).
As far as Google goes, the best we can hope for the is someone to be able to compete with them in one particular area, and even that would be tough because Google, like Microsoft or Apple, can throw so much money at a project that it can succeed as a loss leader by simply outlasting any would-be competitor.
> to avoid using Google is difficult, if not impossible.
Sincere question - why? Aren't there alternatives to all google services? I have not opted out of using Google services, so I'm genuinely curious. Everything I can think of has an easy alternative to use.
I think their behavior matters more than their market share. As other commenters pointed out, defining market share of an infinite resource is not very useful.
These companies buy potential disruptors at inflated prices. Sometimes they shut the disruptor down to maintain the status quo; sometimes they guide the disruptor to create a new market. In either case, it creates a positive feedback mechanism that increases their influence and further entrenches the parent company in their customers' lives.
As a market (and governed society) we need to decide if this is something that we want or not. It may be too late for pure market pressure to stop this behavior, leaving it to regulators. Or we can decide it's acceptable and let it go for the benefit of the innovations that these companies create.
I don't know if monopoly is the right word for this, but it's something and it does matter.
Of course it matters because these companies play a huge role in how we use the internet. Facebook is creating a walled garden for their users where they want to have their own closed version of the internet that they control. Google wants to become the gatekeeper of the internet and get to decide what websites people can view. AMP is a perfect example of Google using their monopoly power to force websites in that direction.
Not strictly monopolies, but they are so large they can move capital around making many services/products artificially cheap for the client. In my opinion this makes competition unfair and constitutes a monopoly in some sense.
You seem to have a unique perspective based on your comment history. Could you explain why or why not you see F/G as monopolistic forces? I have no opinion on the matter, but I'm trying to understand.
This is without even considering google dorks, possibly one of the most powerful tools infosec researchers (or even average people) have to refine queries.
In the case of Facebook, it offers the best product because its product is really people (the whole "you-are-the-product" issue). Facebook has the most people, therefore the best product.
Offering the best product is not a monopoly. Don't forget that MySpace was "the" social network before Facebook, but was displaced. These are not necessary traditional monopolies, and therefore should receive consideration on how they should be treated.
It would be much more difficult to displace Facebook than MySpace — it never reached 100 million unique users per month, but Facebook is over 2 billion.
I don't get the point on complaining over the "mindshare size" of the faang products. As, I don't think it's a thing you can complain about. If it were, the french would be right to complain about English mindshare globally (they can complain but they can't sue). Also, you can compete locally with faang, like China and Russia are doing. Admittedly they use restrictions on foreign tech, but you also need to have high quality products that are catering for the local market. EU are the ones that feel uncomfortable being dominated by US tech companies, but it's not like they don't have options.
I use DuckDuckGo for search & Twitter for social media. I find discovering new things/People on Twitter more interesting than the sclerotic family/friends stuff on Facebook.
I'm old enough to remember when IBM was the unbreakable monopolist that would rule the computer industry forever.
Then Microsoft was the unbreakable monopolist that would rule the computer industry forever.
Now it's apparently FAANG.
Just the fact that we have five monopolists should be enough to show thinking people that it's not a monopoly situation, if history isn't convincing enough.
Google and FB generate superior returns which should attract new entrants by definition. Which is not really happening because of structural and strategic entry & exit barriers. Network effects, economies of scale, switching costs, etc. Google and FB are not getting disciplined by hit and run competition, its an uncontested market.
The comments in social media related to the issue get repeatedly stuck into the term monopoly usually in the title in the article. This happens again and again. Please everyone. Get over it.
The context is monopoly power, market failures, unfair competition and antitrust law.
Networked plaform technologies are very different from traditional monopolies: zero price, increasing returns, imperfect competition, spillovers everything is very different
I guess we won't know for a few years still, but it seems like we're seeing the decline of the Facebook monopoly now. At least in terms of Facebook.com, maybe not all the things they own, but just Facebook as a social site. There seems to be soooo much going wrong for them on so many levels right now, it would surprise me if we're still talking about them in the same terms in 3-5 years.
[+] [-] umvi|7 years ago|reply
Traditional monopolies "control supply of a good or service, and where the entry of new producers is prevented or highly restricted."
In this case, the supply of a good or service (social networking, webpage indexing and searching) are not controlled by Facebook and Google because they aren't finite resources. Anyone can index the web and anyone can build a social network and Google/Facebook aren't going to crush you with lawsuits or some other nefarious tactic to maintain their position (AFAIK). Entry of new producers of these services is not prevented or highly restricted. New social networks and search engines pop up all the time.
What Facebook and Google have is massive, large scale user loyalty. Despite alternatives existing (Bing, Mastadon, DuckDuckGo, Myspace, etc.), users are voluntarily choosing to use Google and Facebook. This is not a monopoly, IMO.
I think we need a new term for this situation.
[+] [-] SilasX|7 years ago|reply
In that sense, you should worry about monopolies on OSes or rail routes, which have those kinds network/lockin effects, not search engines or (as was in the news recently) retail sales of organic foods (where it's easy for numerous grocery stores to enter the market if they wish)[2].
[1] https://news.ycombinator.com/item?id=18394628
[2] http://www.washingtonpost.com/wp-dyn/content/article/2007/08...
[+] [-] belorn|7 years ago|reply
[+] [-] gshulegaard|7 years ago|reply
Monopolies are extreme examples of lack of competition in a market. One way non-competitive market equilibriums occur are when barriers to entry for potential competitors rises.
For Facebook and Google, the market externality that contributes to their monopoly-like market power is known as the Network effect (https://en.wikipedia.org/wiki/Network_effect). This effect was first observed with the rise of the Bell System which ultimately required anti-monopoly intervention (https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System).
For Facebook, the network externality is a bit more straightforward since it is a first order effect in that new users looking to adopt or join a social network choose to join the one which has the most other users they are interested in (typically friends, but could also be public figures). This tendency becomes a self-reinforcing trend as more and more users join the single largest network. This dominance in users attracts advertisers which are the primary source of revenue for Companies whose primary product is a social network.
For Google, it's also an information play. The more users they can have an interaction with the more data they can scrape to feed their advertising engines. Once again, advertisers are incentivised to pay the best/biggest data troves which gives Google the ability to invest even more in providing and improving services to attract users. Which again, becomes a self-reinforcing cycle.
I wouldn't say that user loyalty/user's reticence for change is not a contributing factor, I think it is; I just don't think it would be correct to say Google and Facebook aren't the beneficiaries of monopoly-like market equilibriums. It's a stretch to call them true monopolies (actual singular market suppliers), but their market control and power are rapidly approaching, if not already equal to or greater than, that of historical examples of monopolies and targets of anti-trust legislation.
[+] [-] azinman2|7 years ago|reply
[+] [-] sailfast|7 years ago|reply
For me, the reason they have such power in the marketplace is because they have the historical data on all these users. "Lock-in" can be overcome. Technical capabilities can be bettered by other companies, but when it comes to training sets, it's hard to start late...
[+] [-] ravenstine|7 years ago|reply
It might not be prevented or restricted in the traditional sense, but the barrier to relevant market share has become nearly impossible to cross. The alternatives you cite, besides maybe DDG, aren't serious contenders to Google or Facebook.
Now, perhaps they would be if people paid to use those services, then they'd be more likely to pick and choose between the selection because they're going to want to pay for the right one for them, not necessarily the one that everyone else is using. But because the internet is largely ad-funded, hence nobody has to pay for most immaterial things, they're free to flock to wherever the crowd may be. That's why it's particularly bad that Facebook and Google are such "monopolies", even if the word doesn't exactly fit the situation. To compete with these services, you can't just appeal to a person's sensibilities within a market. DDG might be an exception, but it hasn't been around long enough for us to tell whether it's just a fad or will be quickly stamped out by something else.
[+] [-] stcredzero|7 years ago|reply
"Traditionally," crossing over a farmer's land entitled the farmer to extract a fee from you, no matter what altitude you crossed over at. The law had to change once the technological reality changed.
In this case, the supply of a good or service (social networking, webpage indexing and searching) are not controlled by Facebook and Google
I think this is a bit of a sham. As you observe, the mere existence of website pages isn't worth anything by itself.
What Facebook and Google have is massive, large scale user loyalty.
Human attention, on timescales measured in hours or days, is still a finite resource. Human attention, measured on a per-capita basis is still a finite resource. If you just call it "loyalty" and make some kind of claim of market sacredness to your hard earned spoils, you're just obfuscating the finite nature of the resource the actual product is based on.
Despite alternatives existing (Bing, Mastadon, DuckDuckGo, Myspace, etc.), users are voluntarily choosing to use Google and Facebook. This is not a monopoly, IMO.
You're actually just begging for a special exception for network effect based monopolies.
[+] [-] cmroanirgo|7 years ago|reply
I think this is the sticking point. A lot of the time this loyalty is not real. Many people would happily move elsewhere if the service was as good or better. The trouble is, every other alternative is basically doing the same thing as Google and FB, so there's little incentive to move.
However, it's clear that a monopolizing aspect exists because for every email I write, there is (probably) a very high chance that google will read it, because it ends up on their servers.
For every website I visit (if I disable uBlock, of course), there is a very high chance that I'll be subjected to FB tracking.
So, although these companies are not a 'classical' monopoly, I think it's fair to state that they are definitely monopolizing our usage of the internet. The real problem is that all the other 'wannabe' alternatives aren't all that much better, with (perhaps) the exception of the Search Engine space (ddg, startpage).
[+] [-] sfilargi|7 years ago|reply
Most, if not all, websites will block your bot after a couple of request even if it respects robots.txt.
Also they seem to have different rules for GoogleBot and different for yours.
[+] [-] ProAm|7 years ago|reply
Is there a term for when a new entry can be easily killed if the other party simply decides to duplicate their product/service/offering? Google and FB do not prevent entry, but they sure can kill new entrants easily with funding. See Instagram implementing 'Stories' which killed Vine. See Twitter Periscope killing Merekat, etc.....
[+] [-] mc32|7 years ago|reply
Social requires network effects. Even Google with massive resources at its disposition could not compete with Facebook.
Now, from the advertisers’ PoV, Google is a essentially a monopoly in search, but not so much from and end user’s perspective.
[+] [-] ghobs91|7 years ago|reply
While Google and Facebook don't control a finite resource in the traditional sense, they do in the sense of mindshare, which is absolutely a finite resource.
[+] [-] sharemywin|7 years ago|reply
Also, in google and facebooks case the "consumers" are the product and the advertisers are the buyers.
[+] [-] jimjansen1|7 years ago|reply
Maybe but you're also almost certainly going to be acquired by them.
[+] [-] ben509|7 years ago|reply
Maybe the term should be "network monopoly" where the network effect is the mechanism by which they restrict the entry of competitors? That's very much true for social media companies.
[+] [-] gambler|7 years ago|reply
>What Facebook and Google have is massive, large scale user loyalty.
Google has effective control of web standards.
Edit: Also, the podcast directly addresses your comment. In fact, that's what it is about.
[+] [-] will_brown|7 years ago|reply
Well Courts have ruled the NFL is a monopoly...but there is no control over new entities organizing and playing football games (i.e. not prevented or highly controlled).
[+] [-] slededit|7 years ago|reply
This isn't the 90s where anyone can crawl the web without countermeasures.
[+] [-] samnwa|7 years ago|reply
[+] [-] Jack000|7 years ago|reply
[+] [-] dddw|7 years ago|reply
[+] [-] ausbah|7 years ago|reply
[+] [-] thecity2|7 years ago|reply
[+] [-] davidf18|7 years ago|reply
[deleted]
[+] [-] ConceptJunkie|7 years ago|reply
Google and Facebook both want to be publishers when it suits them, and common carriers when it suits them, and both have shown, I think we can all agree, a propensity to be evil. I think it's telling that Google retired, "Don't be evil."
I think Google is worse in that regard since they are so much more pervasive. It's easy enough to permanently opt out of Facebook, but to avoid using Google is difficult, if not impossible.
The other question is that do these companies allow for competition, not that they are necessarily explicitly preventing competition (although they may be), but whether or not they are so successful and have so much of a market share that it is literally impossible to compete with them, and again, I think the answer is yes. We see new competitors for Facebook on almost a weekly basis, and none of them ever get anywhere, not because of whether or not they are any good, but the fact that they can't compete because pretty much everyone who isn't actively boycotting Facebook is on Facebook (including me).
As far as Google goes, the best we can hope for the is someone to be able to compete with them in one particular area, and even that would be tough because Google, like Microsoft or Apple, can throw so much money at a project that it can succeed as a loss leader by simply outlasting any would-be competitor.
[+] [-] lolsal|7 years ago|reply
Sincere question - why? Aren't there alternatives to all google services? I have not opted out of using Google services, so I'm genuinely curious. Everything I can think of has an easy alternative to use.
[+] [-] kevinmhickey|7 years ago|reply
These companies buy potential disruptors at inflated prices. Sometimes they shut the disruptor down to maintain the status quo; sometimes they guide the disruptor to create a new market. In either case, it creates a positive feedback mechanism that increases their influence and further entrenches the parent company in their customers' lives.
As a market (and governed society) we need to decide if this is something that we want or not. It may be too late for pure market pressure to stop this behavior, leaving it to regulators. Or we can decide it's acceptable and let it go for the benefit of the innovations that these companies create.
I don't know if monopoly is the right word for this, but it's something and it does matter.
[+] [-] yogthos|7 years ago|reply
[+] [-] truculent|7 years ago|reply
- #5: Facebook reportedly discredited critics by linking them to George Soros (https://news.ycombinator.com/item?id=18460406)
- #10: Facebook’s weapon amid chaos and controversy: misdirection (https://news.ycombinator.com/item?id=18460962)
[+] [-] Grieverheart|7 years ago|reply
[+] [-] ABCLAW|7 years ago|reply
Time for a bunch of people with no competition law or economics background to get upset over the term 'monopoly'.
[+] [-] biglenny|7 years ago|reply
[+] [-] mises|7 years ago|reply
This is without even considering google dorks, possibly one of the most powerful tools infosec researchers (or even average people) have to refine queries.
In the case of Facebook, it offers the best product because its product is really people (the whole "you-are-the-product" issue). Facebook has the most people, therefore the best product.
Offering the best product is not a monopoly. Don't forget that MySpace was "the" social network before Facebook, but was displaced. These are not necessary traditional monopolies, and therefore should receive consideration on how they should be treated.
[+] [-] neolefty|7 years ago|reply
[+] [-] orteam|7 years ago|reply
[+] [-] hildaman|7 years ago|reply
I use DuckDuckGo for search & Twitter for social media. I find discovering new things/People on Twitter more interesting than the sclerotic family/friends stuff on Facebook.
[+] [-] paulddraper|7 years ago|reply
[+] [-] amelius|7 years ago|reply
[+] [-] BurningFrog|7 years ago|reply
Then Microsoft was the unbreakable monopolist that would rule the computer industry forever.
Now it's apparently FAANG.
Just the fact that we have five monopolists should be enough to show thinking people that it's not a monopoly situation, if history isn't convincing enough.
[+] [-] JumpCrisscross|7 years ago|reply
If Microsoft controller browsers, would Facebook and Google and Amazon and Netflix have had the neutral ground on which to grow and thrive?
[+] [-] jumpdxb|7 years ago|reply
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] digitalneal|7 years ago|reply
[+] [-] nradov|7 years ago|reply
[+] [-] nabla9|7 years ago|reply
The context is monopoly power, market failures, unfair competition and antitrust law.
Networked plaform technologies are very different from traditional monopolies: zero price, increasing returns, imperfect competition, spillovers everything is very different
[+] [-] blakesterz|7 years ago|reply
[+] [-] StreamBright|7 years ago|reply
[+] [-] hartator|7 years ago|reply
Thanks to GDPR, you’ll probably never see a fb competitor emerge in Europe for example.
[+] [-] gajeam|7 years ago|reply