>"The increasing trend of large tech conglomerates to use one money printing product like AWS or search or the Apple Store to tactically snipe competitors to destroy or acquire them is absolutely abysmal in the long run."
That's literally how every company ever in any industry since the dawn of commerce has operated. You use profits to grow and diversify. You can't perform capital expenditure without capital...
Still, it has been part of capitalism since its dawn... not saying its the best for us all - far from it, but no huge multinational corporation grew to its size by playing nice and polite.
The thing is, amoral behavior can be seen left and right, through large part of history of Silicon Valley (remember Gates & Jobs & Xerox).
To me as an end consumer, Facebook has a true monopoly and progressively shittier products compared to Google - ads comprising half of my feed, their core product is still broken and buggy in many places but that's another topic. Recent UI changes made it much worse product. Google looks great compared. But again that's very personal and limited view.
Those competitors are fueled by VC money which let's them price their products below sustainable levels. In other words they're doing predatory pricing just as much as Amazon. Banning it will probably help Amazon more than it hurts them.
my answer to that is, yes that is how every other industry operates, which is why every other industry is painfully slow. Tech was the rare exception of having the advantage of starting from a blank slate a few decades ago, and it was insanely innovative. There's no excuse to let it calcify into the state of every other industry, and I'd take your point and go further, go to every other industry and do the same.
Go to telecommunications and break the big players up and create marketplaces in which small players can innovate. Do it in news media and undo that awful communications act from 96 that led to industry concentration.
We need to take an activist attitude to anti-trust that actively seeks to create rabidly competitive markets which is what fuelled early tech's growth, instead of letting tech slide into the status quo.
And of course all of these companies will still have access to capital. They'll just need to convince investors that their product is better.
The only reason Google can be Google is economy of scale. No matter how friendly you make the marketplace for proto-Google hopefuls, they an never even approach the infrastructure capable of making the same product.
Telecom and the like are the same, competition leads to fragmentation and destruction of opportunity. Monopolies lead to bad platforms, but platforms that hit the scale divided and broken half solutions never will.
I wouldn’t be so sure of that. Their edge in search and email is eroding. The general public wouldn’t see much difference if their default search engine was DDG. Not saying it’s not a monopoly, but I see it more as brand power than impossible to match by competition. Same for email or maps, you can switch on a individual level for nearly the same experience.
I’m way more concerned by Facebook in terms of monopoly, because here I truly don’t have a choice between products, just to opt out with social consequences. That’s not the case with search or email.
That is a theory; not necessarily a decided reality.
Google is an ad company; their product is an audience and an advertising system. There is no reason that advertising should be untouchable except at scale. There are plenty of tiny players who eke out a profitable existence at small scale with ads. It is likely there is a path from there up into a mega-giant if someone really goes to look for it.
If anything, advertising might suffer diseconomies of scale for most products. Small businesses want to advertise locally.
Each search costs 0.0003 kWh of energy in Google infrastructure. That's just energy bill. Now think about massive infrastructure that is out there giving you sub-second results for 40,000 queries each second all over the world. Think about the man power that does on day-in day-out to make sure things are not gamed in constant war of SEO. I highly doubt Google can function in same way without economy of scale.
Google is a search engine company that gives better results because it has more opportunities to improve the product with each request it sees.
Advertising is the same way: The more opportunities you have to try matching a person with a thing they might like, the more you'll learn.
Google is on a scale that are likely two orders of magnitude more than their closest competitor.
Hilariously, Google is by far the best at mapping local people with local businesses, as they've mapped most commercial centers, and run heavy machine learning across them to extract information their competitors can't even hope to try for another decade.
That is a feature, not a bug. Fragmentation leads to protocols instead of products which is why we have the internet instead of whatever monstrosity Bell would have produced had the arpanet never happened.
Yes, that's why the US has the most absurd cell phone network even while I sit in Silicon Valley, but I don't have reception in a half dozen places during my commute, or in my home.
Why I pay absurd amounts more for my healthcare, even when I can choose between several different insurance companies.
That's why my power in a massive center in California is completely unreliable here, I've experienced more power failures in the past year in a major city than I did in 30 years in the middle of fucking nowhere Canada.
Well, seems like your country is broken, maybe you should reconsider your apparently destructive regulations. Fairly free competition does make it work year-round and cheap all around Europe.
Natural monopolies are best run by the government.
That's why Mussolini got the trains to run on time. He also used them to ship all the Jews to concentration camps, but what's a few million lives compared to being slightly inconvenienced?
This is false. Italy did not ship its Jews to concentration camps during WWII.
After Italy switches sides, and joined the Allies, the Germans, who quickly occupied northern Italy immediately started carrying out the Holocaust.
They were not very successful, because of resistance and non-cooperation by Italian civilian authorities. Less than 10% of Italy's jewish population died in the Holocaust. (Compared to 50% of Romania's, 90% of Poland's, 70% of Hungary's, 30% of Austria's, and 90% of Greece's)
Early markets were fueled by capital, not competition. Capital needs to be reigned in with these monopolies or we’ll just sprout more. Let’s not pretend like competitive markets are possible with the kind of capital needed to compete.
Ok, so you have some spare capital from being successful in one market. You want to move into a new market, and that spare capital is your ticket in. There's a difference between building a sustainable, independent business with that capital, and strangling competitors in the new market by moving in and charging well below your cost until those competitors are dead.
The former benefits consumers by giving them more choice. The latter gives consumers lower prices in the short term, but then hurts them overall when the competitors are forced out and prices inevitably rise again, this time without any competitive pressure to keep costs low, margins reasonable, and product/service quality high.
And regardless of whether or not the latter is common, or has always been common, I maintain that it is a huge negative aspect of capitalism that destroys wealth, creates inefficiency, and hurts consumers. Regulation that targets that practice would be welcome.
If you include traders and creators in the various ecosystems and not just "customer" in the retail sense, examples aren't hard to find.
Google and Facebook. The two biggest ad auction oligopolies own virtually all of ad-space between them. Is there real competition? No, there isn't.
Apple. More and more locked down, less and less reliable, more and more expensive. Want to move? Want to repair something out of warranty? That's going to be... difficult.
Ebay + PayPal. If one doesn't screw on fees, the other will screw you on fees. Ideally both will screw you on fees. Now with added Etsy, because also.
Amazon. The giant changes its mind because something something ToS violation and leaves you with n figures of dead inventory and a locked pay out. What are you going to do?
Spotify. You pay us for the music, we don't pay the artists. [1]
YouTube. The record companies get income even if they don't have the rights to it, for the bargain price of a robo copyright claim. Because recognition algos are so very complicated and they make such terrible mistakes, so much of the time.
These aren't just monopolies, they're massive market distortions where money is so dense it warps the Internet into stagnant pools of pseudo-inevitability, with a chilling effect on real innovation and creativity.
And that's not even getting into issues of privacy, political influence, and the market value of personal data.
[1] Not technically true, but considering the pitiful pay outs it might as well be.
It's hard to find an example, because no company is stupid enough to push out all the competitors. Instead they push out most of the competitors, while keeping one or two around (so they don't get into trouble with monopoly laws), and building big barriers to entry for anyone else.
Then they can increase prices a bit, although the main profit source is in reducing unit costs now you have a big business and making all your profit through volume.
It's certainly non-ideal for customers, but at the same time I think customers usually get a better service for a lower price than in a world with hundreds of competing companies (where overheads work out much larger)
What would be the ideal situation? Like you said, having too many competing companies doesn't lead to great services at low cost because of the extra overhead and lack of volume, and having a monopoly gives one company too much power, then isn't duopoly a nice equilibrium?
Intel sold low core count, repackaged CPUs for ridiculous prices for years, because they didn't have any competition.
Now AMD's managed to claw black some of the market for itself, but it is still at a huge disadvantage compared to Intel. And AMD's only lucky that IBM insisted on two independent OEMs for its PC CPU's and that Intel wanted that deal bad enough.
When it comes to the desktop CPU market itself, x86 has an unquestionable monopoly and no new player can attempt to design x86 chips without getting sued. But without x86 there's no point designing desktop chips in the first place.
Apple designs plenty of chips that have better performance than most computers shipping today. No one really cares about the desktop anymore. Apple alone sells more devices using its own chips than all PC sells combined and they are less than 15% of the market.
Even when it comes to the better margin server market there is a move toward both AMD and custom ARM chips.
As for the performance, we don't really know yet. Single core benchmarks of a CPU with low core count may play out differently with tens or hundreds of cores, 5GHz frequencies, active cooling etc. You can't extrapolate benchmarks in a linear fashion.
No doubt the A Series is impressive, however it hasn't really been tested in a "Mac Pro" yet, so we'd have to see.
Then there's the issue of compatibility and I fail to see how Apple plans to break the Wintel monopoly on the desktop. Sure, it may be able to transition to ARM with the Mac, but unless its chips are available to everybody, (unlikely), there's hardly a route I see for Apple to end x86 dominance.
There is plenty of software for “creative” work for iPads. Adobe in particular has shown how much better performance is on ARM chips than Intel.
The vast majority of consumers are running Mac Pro level hardware. In fact, most computers that are sold are laptops.
Why would Apple care about “dominance” in the PC market? It cares about going after the most profitable share of the market. It’s not like most PC makers are making money hand over fist selling consumer PCs.
In the server market, both Amazon and Google are creating their own Arm chips for their data centers.
We're talking about x86 being a monopoly. Without Windows & major developer buy in, Apple's ARM platform would not affect x86 desktop dominance in a significant way. It would be a platform with a significant niche of macOS users, but x86 would remain dominant.
Windows' deployed in places Mac never visited, like the majority of world's government institutions, schools, (Chromebooks aren't big outside U.S. & Western Europe).
You may argue that Apple will have the "high-value" market, but in terms of sheer numbers I don't see them competing with x86 anytime soon.
As for the iPad being "pro", once you're able to develop serious software on the device itself, we may have a discussion, (I am aware of rumors that XCode is present in iPad OS 14, really curious about that). The existing "Pro" apps still lag behind desktop in many areas and no serious programmer or video editor uses iPad OS full time.
To be clear, am not doubting Apple's ARM chips being really competent, just doubt it will unseat x86 on the desktop.
As for ARM on the server, probably eventually it will be the majority, but I'd guess another decade. Current efforts are more experiments than anything.
My fear is also that if something does displace x86, it won't be a clearly superior, relatively open platform to develop for, but rather a patchwork of workload specific vendor ARM chips with entirely proprietary ways to interact with them. In that scenario, I'd rather take x86.
Despite the HN bubble, there are a lot bigger markets for pro users than developers. I would venture to say that from a profit motive, it makes little sense to bring development to the iPad. There is no money in development tools.
For places that must have bespoke internal apps, a lot of them are moving toward dumb clients and some type of Citrix solution.
In terms of “sheer numbers”, the desktop market is minuscule, the laptop market could easily go to ARM if MS could ever figure out a good transition strategy, and the server market runs Linux where power is big as important as overall power consumption.
Don’t you think that Intel would rather be in ARMs position than what it is now? I don’t have numbers on the server market, but outside of that Apple ships more chips than Intel.
Edit: this was just submitted to HN showing the performance of Intel chips to Amazon’s custom designed ARM chips.
That conclusion is based on the premise that their software would have been priced the same if they hadn't bundled in "free" software. Not sure we have enough data to make that conclusion.
Ultimately you were charged for the "free" bundled software, you just couldn't get a line item break down of how of the bundle price was made up by that "free" software.
Not saying that Microsoft should break down their OS prices by bundled software, or that it makes sense. But without that breakdown you can't make the assertion that "They never pushed up costs".
> That's literally how every company ever in any industry since the dawn of commerce has operated.
Not even close to true, you're describing how "financial capitalism" works which is relatively modern (in the US, it begin in the early 1900s after the creation of the Federal Reserve). Until you financialize an economy, businesses can't use that kind of strategy to compete. Once you do, only those with access to finance can win.
Read up on industrial capitalism which relies on the quality of products and services—not access to finance, aka money printing—to compete in the marketplace. That's how the US was built originally, and what most Americans mean when they say they support "capitalism."
So where does Standard Oil fall into this classification? It spent the 1880s and 1890s using its vast profits from refining oil to buy up railroads to stifle competing oil refineries by restricting access to rail transport.
That's an early example of the general approach taken by financial capitalism (essentially, the prototype for how to do it), though in the case of Standard Oil (aka Exxon), it wasn't through money printing: Standard Oil just reinvested its profits to buy up the competition (with the hopes of raising prices later).
Prior to its monopolization actions, Standard Oil was a successful industrial capitalism firm: they had better oil refinery tech than the competition which is how they came into having money to re-invest in the first place.
This is materially false. Throughout history capital has been used to stop competitors. Capital is not necessarily money in a practical sense. Regardless, money has decided these things for hundreds of years as well. Whether nation states rose or fell depended on whether they could pay mercenaries to fight for them. The largest brick castle in the world, Malbork fell when the Teutonic order was besieged and could no longer pay the castles defenders. They were then “bought out” by a Polish general. This doesn’t just apply to mercenary armies, or war, by the way. This isn’t just some product of “modern capitalism”.
> Throughout history capital has been used to stop competitors.
Your examples are nations, not businesses. Obviously the economics of warfare are different: money (and resources more generally) are how you defeat your "enemies."
I'm talking about capitalism, both industrial (Wealth of Nations-style) and modern financial capitalism which is the domain of business and markets, not war.
Yeah, but these are primates and no primate is evolved enough to handle consolidation without turning into a total fuck-off tyrant. You know at one point the British Empire controlled over a quarter of the entire world? They had a real opportunity to usher in a new era of peace and cooperation. Did they do it? NOOOOO!!! NO ONE EVER DOES!
That's literally how every company ever in any industry since the dawn of commerce has operated. You use profits to grow and diversify. You can't perform capital expenditure without capital...