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Competition

Google Amazon & Facebook are Standard Monopoly Distribution Networks

 

Washington increasingly is asking what are Google, Amazon, and Facebook?

That’s because they seem to be in the middle of many vexing problems spanning culture, politics, civility, economics, competition, jobs, investment, national security, public safety, consumer welfare, etc.

At core, Google, Amazon, and Facebook are unregulated, economy-wide, distribution networks, that de facto are taking control over core economic processes.

They are modern-day Standard Oils. Google is Standard Data. Amazon is Standard Commerce. Facebook is Standard Social.

Doubt it? Consider reality.

Standard Data: Alphabet-Google is the distribution network for over 4 billion search users, 2 billion Android devices, 15 million publisher partners, 5 million advertiser clients, and 400,000 Android developers. Google’s network has over 200 data-capturing products and services, 15 of the world’s fastest, highest-capacity data centers, and 2000 server points of presence in over 150 countries.

Google commands 19 of the top 25 Android apps downloaded over a billion times including: Search, Play, Gmail, Maps, YouTube, Google+, Text-to-Speech, Chrome, Play Books, Play Games, Play Music, Play Newsstand, Play Movies & TV, Drive, Photos, and StreetView.

Google’s Government Influence Nixed Competition for Winner-Take All Results

Facts are stubborn things.

Know what one finds when one puts the evidence of Google’s many antitrust, IP, and privacy offenses into one telling timeline of what Google did from 2008-2017?

One sees a tale of two terms. Commendably, the evidence shows the first Obama Administration term featured very tough antitrust, IP, and privacy law enforcement against Google. Sadly, the second term was the direct opposite – featuring virtually no antitrust, IP, or privacy law enforcement against Google.

Know what one finds when one overlays the telling timeline of improper influence of Google’s Government Guardians, i.e. senior Google executives and outside counsels placed in all the right places to protect and advance Google’s business -- with the timeline of Google’s antitrust, IP, and privacy law enforcement problems?

One can see predictable patterns. Shortly after Google Guardians show up, those Google’s government problems go away. Same administration, different personnel, near completely opposite outcomes. It’s a quintessential example of the old Washington adage that “personnel is policy.”

Asymmetric Absurdity in Communications Law & Regulation

You can’t make this stuff up.

Asymmetric Realities: The five most valuable companies – Apple $802b, Alphabet-Google $688b, Microsoft $585b, Facebook $500b, and Amazon $475b – are together worth an unprecedented $3 trillion and widely-appreciated to be dominant in the communications-driven businesses of smartphones, search advertising, subscription business productivity software, social advertising, and ecommerce platform services respectively.

In Washington’s theater of the absurd, these well-known, winner-take-all platforms, are playing the role of victims of potential harms, that supposedly can’t afford to shoulder the potential risks for the potential net neutrality problems that they allege are potentially serious, when they produce $131b annually in free cash flow and have $357b in cash (mostly overseas).

Debunking Edge Competition Myth Predicate in FCC Title II Broadband Order – FCC Comments

SUMMARY:

In 2015, the FCC’s Title II Open Internet broadband order was predicated on a demonstrably false central competitive premise: that the Internet’s edge was competitive while the broadband Internet core was not competitive. The facts prove the opposite.

The 2015 FCC’s competition premise is myth.

While there is plenty of information in the record, and in the July 17 comments, that broadband is  competitive, until now there has been little data and research on the overall competitiveness of the Internet edge providers, save for NetCompetition’s July 17th comments that showed how concentrated the Internet edge is using the Internet Association as a proxy.

To further rebut comments that were predicated on the demonstrably false central premise that the Internet’s edge is competitive, NetCompetition submits additional Internet competition research below.

Why Amazon and Google Are Two Peas from the Same Monopolist Pod

Summary: Amazon’s monopolization ambitions, strategies, and tying tactics are eerily like Google’s.  Both these companies likely have not earned their respective dominances purely on merit, but also via illegal anti-competitive behaviors.

At a minimum, Amazon’s proposed acquisition of WholeFoods warrants an FTC “second request” for information, i.e. a fuller antitrust investigation of whether the acquisition could “substantially lessen competition” in any implicated relevant markets.

The Internet Association Proves Extreme U.S. Internet Market Concentration

Those who think the U.S. Internet market is competitive, and not extremely concentrated, need to read on.

In a nutshell, for the first time, publicly available evidence shows that the cumulative effect of well-known “winner-take-all” platforms (WTAPs) Google, Amazon, Facebook, and Microsoft, is a “four-winners-take-all Internet sector.” Four different dominant platforms collectively command ~80% of overall Internet market share in revenues, new absolute annual revenues generated, market capitalization, and employees.

Imagine if the 94% of the economy that is offline-based, were as extremely concentrated as the 6% of the economy that is online-based/the Internet sector, per the Internet Association.

That would be an offline economy with basically one information company, one sharing company, one retailer, and one business software company, that collectively commanded 80% revenue share of the 94% of the economy that is offline based with ~4,000 publicly traded companies.

Trump Administration Implications for Google Antitrust in EU, US & Markets

Conclusions:

Most of what we have learned in the five months since the election indicates that the Trump Administration is not going to be Google’s antitrust advocate and protector like the Obama Administration effectively was from 2013-2016, in de facto shutting down any real U.S. antitrust scrutiny of Google, and in turn implicitly discouraging antitrust enforcement of Google in the EU and around the world.  

This antitrust enforcement sea change has three big picture implications: for the EU, for the U.S., and for markets.

FCC Should Sunset Set-Top Box Provision Because Market is Fully Competitive

House Energy and Commerce Committee Republicans formally asked FCC Chairman Agit Pai to close the docket on the set-top box proceeding because it is no longer under active consideration, and because it “remains an unnecessary regulatory threat to the content creation and distribution industries” and casts a “shadow over investment and innovation.”

This is a wise, pro-competitive, pro-property rights, and good government request from Congress to the new Pai FCC.

The FCC should efficiently utilize this decision opportunity to employ the statutory sunset provision in the law to permanently sunset and remove this unnecessary and serious regulatory threat to competition, copyrighted contractual content and its creation, investment, and innovation.

America’s Indefensible Media Concentration Double Standard

Apparently America does not have “equal justice under law” when it comes to media concentration limits.

Seldom can one find a starker commercial example of unequal legal, law enforcement, and regulatory treatment of very similar commercial activities than that between old media and Internet/new media companies concerning media concentration and antitrust enforcement.

Both legacy old media companies and Internet/new media companies are in the communications business, own and/or produce media of some type, and distribute media in different physical ways, consumption formats, and time/situation dimensions.

Please see this one-page graphic that illustrates how America’s media concentration double standard treats similar old and new media companies completely dissimilarly, and how it results in a predictable stark market share dichotomy.  

Ultimately old media concentration has been limited by the traditional antitrust limits that apply to all industries and companies over the years.

That’s no longer true for Big-Internet companies like Google and Facebook.

How Internet Commons Policies Lessen Growth Jobs & Security – Daily Caller

Please don’t miss my latest Daily Caller op-ed: “How U.S. Internet Commons Policies Lessen Growth Jobs & Security.

It spotlights how U.S. Internet commons policies – where “free” means a price of zero and “open” means no property -- create winner-take all economic outcomes for the Netstablishment at the expense of everyone else.

 

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Q&A One Pager Debunking Net Neutrality Myths