Tag Archives: Monopoly

Books, Business, Economics, Finance, Observation, Politics, Tech

In: ‘Antitrust: Taking on Monopoly Power from the Gilded Age to the Digital Age’, Amy Klobuchar Takes on World’s Greatest Challenge

Photo Collage / Lynxotic

Is the title above wrong? Depends who you ask…

In her new book, Klobuchar tries to connect the historical roots of antitrust actions to populism and her own ancestry. That’s not all, however. Although difficult, particularly for readers who are not legal scholars, there’s an important and deeper historic thread here that she is aiming to contribute to.

That job is to find a way to illuminate how the digital age, with all its challenges and complexities, can come to terms with the simple question of how to measure damage that is being done by big tech monopolies, through sheer size, power and lack of external accountability.

Moreover, there is an issue of how antitrust law and practice veered away from the remedies and goals, first established during the Gilded Age, toward a laissez-fair, anti-regulatory stance that gained steam in the Regan years.

That shift is, in many ways, to blame for the current extreme state characterized by dangerous levels of concentrated wealth and power by big tech.

This effort may seem like one that is doomed to being ignored by all but the already long-since converted. But, make no mistake, it is a topic that will grow, reverberate and become more relevant as the current administration in Washington consolidates and comes into its own.

“People have just gotten beaten down. I wanted to show the public and elected officials that you’re not the first kids on the block with this. What do you think it was like back when trusts literally controlled everyone on the Supreme Court, or literally elected members of the Senate before they were elected by the public?”

— Amy Klobuchar, in Wired interview with Steven Levey

When President Biden recently nominated Lina M. Khan to the Federal Trade Commission, in addition to Columbia Law School professor Tim Wu, who announced earlier this month he would join the National Economic Council, he set forth a clear path for an antitrust direction that has the potential to be more than just rhetoric and window dressing.

Khan is an unequivocal proponent of a new era of antitrust, one that is, not coincidentally, along the lines of what Klobuchar advocates. Likely sharing these ultra clear views from her long and celebrated research, Khan, along with Wu, is a key addition to Biden’s growing roster of Big Tech critics, and there is already a blueprint for actions and cases that will build to a crescendo over the next several years.

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Biden’s call for the repeal of Section 230 of the Communications Decency Act, meanwhile, a hotly contested and possibly flawed legal shield some feel is exploited by Internet platforms, is another indicator of the tenor of the coming actions.

In a sense, with this bestselling book [on Amazon: #1 in Political Economy, #1 in Government Management, #1 in Business Law (Books)] the gargantuan task of connecting the culpability of massive, nearly infinitely powerful behemoths, each in it’s own territory, to the social and economic catastrophes that they’ve brought down on the world.

However, while politicians like Klobuchar may not have the charisma and energy to set a fire under the population, it is the very deeds themselves that will eventually conspire to ignite an uprising and put pressure on the government and the courts to take real, substantive measures. And with young, new faces and minds such as possessed by Khan and Wu, ultimately there is a bulwark of criticism against monopolist abuses building in government and among the public at large.

“I am never saying, ‘Get rid of their products.’ But let’s have more of the products that give you more choices. You can keep one product, but it’s better to have other products, because we’re not China.”

Amy Klobuchar in Wired interview with Steven Levey

 In response to Klobuchar’s quote above Steven Levey in Wired wrote; “In other words, Facebook could keep it’s main app, but the public might benefit if Instagram and WhatsApp were not Mark Zuckerberg productions.” 

While this kind of “moderate” view may not be the earth shattering remedy that would turn the juggernauts around in a heartbeat, from Zuckerberg’s perspective it would not be ideal, to say the least.

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And, since we have seen the unfettered and viral growth of big tech, for at least a quarter century in some cases, and since there was a aura of hero worship afforded their leaders for most of that time, a break-up, such as that could ultimately turn out to be the beginning of more sweeping changes. A welcome outcome for those that have been harmed the various monopolistic structures that rule nearly all our lives, or at least it seems, at times.

Levey then asked Klobuchar why legislators so often embarrass themselves in hearings with irrelevant partisanship, clueless technical questions, and time-wasting grandstanding. Her response;

“Welcome to my life,” she says. “I get it—there’s going to be hearings that are irritating to people who know a lot. But that’s a great argument for tech to use because they don’t want this oversight.” 

Amy Klobuchar in Wired interview with Steven Levey

In defense of using the word “antitrust in the title, while also advocating its eradication in future she responded:

 “Well, I thought antitrust was an interesting word”. “It’s not only about this body of law; it’s also about not trusting anyone.”

Amy Klobuchar in Wired interview with Steven Levey

Perhaps it is more the course of history that led to the current and incredibly extreme situation and obscene dominance by big tech that is what should never have be trusted to arise in the first place.

Perhaps these firms will one day be seen, looking back from future generations, as a temporarily necessary, but evil mistake of history, as was the toothless interpretation of laws that led to their rise from “scrappy underdog startups” into malignant monopolies run amok.

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Branding, Business, Tech

The Justice Department finally issues antitrust suit against Google for “unlawfully maintaining monopolies”

Internet giants finally receiving long overdue legal scrutiny

After months of investigation and inquiry, the United States’ Justice Department has formally accused Google of illegally sustaining a monopoly over search and search advertising in America. The Department filed the lawsuit on October 20th in the U.S. District Court, beginning what could be a turning point in the Internet economy.

Read More: Amazon, Facebook, and Google will be accountable if Anti-trust law revisions hold

Republicans and Democrats alike have been watching big tech companies for a while now, scrutinizing the big four—Google, Apple, Facebook, and Amazon – as they’ve grown into corporate behemoths and played cat-and-mouse with American antitrust laws. Only now is the federal government (along with over forty states and jurisdictions that have investigated Google) finally making a move to attempt to keep these juggernauts in check.

Antitrust laws essentially make sure that American businesses cannot develop into illegal monopolies. Monopolies are illegal if they are established or maintained through improper conduct, sfor example, exclusionary or predatory acts. 

Conventionally, the laws protect consumers from situations where a single company holds all of the supply. In the current digital age, though, most of these services are nominally free to consumers. Nevertheless, they can still become hegemonic at the expense of competition.

Because the site’s ascendency has left consumers with the impression that they are unaffected, superficially, Google personnel have long been able to refute the fact that they hold a proper monopoly. However, given that eighty percent of Internet searches go through Google, many politicians (and users) suspect something legally dubious at hand.

As is also the case with Amazon and Facebook there are, like an iceberg of crimes hiding beneath the waterline, these giant firms are engaged in many practices are highly anticompetitive. The behaviors, however rampant,  have either gone unnoticed or, in a purported attempt to bolster internet commerce in a general way, have been intentionally overlooked by governing bodies for decades.

In order for the case to effectively convict Google on antitrust laws, the Justice Department must prove two things. First, that Google has dominance over search. Second, that it actively stifles competition in the search market through deals with other companies.

The fact that Google has dominance over search is quite hard to argue against nowadays. To sell the second part of the case, however, the DOJ will have to look into Google’s business behaviors and deals with other companies such as Apple.

Google essentially pays Apple up to $11 billion to be the default search engine on all iPhones, iPads, and Macs. This is just one example of Google buying its way to the top of the market and making sure that other search engines do not stand a chance.

Of course, Google denies doing anything illegal or sidestepping antitrust laws. The company argues that users actually retain choice when it comes to search engines, but people consistently go to Google for quality. As for the deals with companies like Apple, Google likens it to a cereal brand paying a grocery store for a better spot on the shelf. To Google, it’s simple business.

The courts, however, might not find it quite so simple, as many politicians are reframing antitrust laws in their perspective toward the case and the online marketplace.

This is not the end of the story but barely the beginning with many revelations yet to come

American antitrust laws, and how they are applied, are severely outdated. Most of them were written over a century ago when computers (let alone the Internet) were hardly a concept. Despite a few public outings where tech moguls have had to answer before Washington, the Federal government has not taken much action against these massive modern institutions. Exceptions include a 2001 antirust case against Microsoft for maintaining a monopoly over PC software and a former near-trial against Google when the Federal Trade Commission investigated the Alphabet Inc. for antitrust in the early 2010s.

Meanwhile, other countries have been far more active in holding big tech accountable. The European Union enforces much more timely antitrust policies, and has brought three cases against Google in recent years.

In America, however, Google has been riding off of the free market since its very conceptualization at Stanford University in 1998. The same could be said for Amazon, or Facebook and their respective, nearly mythic, ostensibly humble origins. While this nation’s laws and economy give companies the unique ability to grow, thrive, and expand into global phenomenon, they also have a duty to protect the people and even the playing field when those same companies abuse freedom or gain too much power.

This case will not be a short ride. It will likely take years, but such is the slow, magnificent, changing tide of justice and progress.

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Tech

Amazon, Facebook, and Google will be accountable if Anti-trust law revisions hold

New Reports call for laws to rein in giant monopolies

Amid a zany week of political theater and election drama, the federal government has actually managed to make quiet, nonpartisan progress on an important issue. On Tuesday, October 7th, Democratic members of the House Judiciary Subcommittee on Antitrust finally released a long-awaited report concerning the dominant technological companies in America and their legally dubious corporate power.

Read More: Apple is Coming 4U: Facebook, Amazon and Google Surveillance facing US scrutiny and danger from New Software

The report comes at the end of a sixteen-month investigation into the tech giants, arriving to the conclusion that America’s four biggest tech companies—Amazon, Google, Facebook, and Apple— all partake in anti-competitive practices that could be reprehensible by law.

Essentially, with the exception of Apple, these four conglomerates have created near-monopolies in their respective fields. Amazon controls 40% of e-commerce in America, and endorses business models that squander the competition and abuse third-party sellers through data mining. Apple has argued that they do not have a monopoly stake in phones, Android (google) and Samsung, have a larger worldwide base, and in other areas Apple has an even less dominant position. Only in dollar denominated success do they hold the absolute top spot.

 Google has an even larger monopoly on Internet searches, also utilizing data to bind users to their content and prioritize their services over all other websites.

Facebook, meanwhile, is a hegemonic vacuum for social media outlets, endorsing a “copy, acquire, and then kill” technique according to the report. Essentially, rather than compete with other platforms, Facebook sucks them into inescapable, self-serving positions.

Apple is not in quite as much hot water as the other three companies. The report mainly accuses Apple of binding its users to the Apple Store, which creates an extra, sometimes expensive, hurdle for App developers to get over if they want their product widely available. The report accuses Google of doing something similar with Android, saying that the software forces people to use Google on their devices.

Read More: Zuckerberg Promises Change as Facebook Value plummets $56 Billion after Ad Boycott

Of course, all of these companies have denied any illegality in their actions— each citing the free market and defending their business practices as entirely fair when responding to the report.

Generally in gridlock and inept, this is one area where Government must act decisively

However, Congress does not seem to agree. In light of the recent report, many Democrats are in favor of rewriting the U.S. Antitrust Laws to better protect a fair, competitive economy. Traditionally, the Antitrust Laws keep businesses in check on behalf of consumers, but they have not been touched in decades, and capitalism has developed immensely since then.

The amount of power that these three companies have garnered demonstrates that the laws now need to consider affairs between businesses as well, lest a handful of power-hungry entities override the market.

Some Republicans, however, have pushed back against the idea of rewriting the Antitrust Laws. Notably, Representative Kelly Armstrong from North Dakota did not sign the committee’s report on Tuesday. While he agrees that something nefarious is at hand with these tech companies, his remedy focuses on greater oversight from the Department of Justice and the Federal Trade Commission, upping the enforcement rather than adjusting the laws itself.

Read More: Google about to face Long Overdue Antitrust Charges from Department of Justice

Even if certain politicians disagree on how to address the issue, the nonpartisan support for cracking down on big-tech in America is nevertheless a milestone, and it comes at a crucial time. While thousands of Americans are facing economic strife due to the COVID-19 pandemic, billionaires (especially tech moguls) are seeing their stocks skyrocket.

According to a financial study covered in USA Today, billionaires now hold more of the world’s wealth than ever before— $10.8 trillion. Tech billionaires in particular hold $1.8 trillion of that, a whopping 42.5% increase from just a year and a half ago.

The bulk of American Antitrust Laws were written at the turn of the twentieth century. Since then, the state of the world has changed. The state of the economy has changed. And perhaps most immensely, the state of technology has changed. Algorithmic dictatorships are growing almost as quickly as class divides in America. So perhaps it is time for the law to change as well.

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Books, Business, Entertainment

Book Miracle: Gutsy Upstart Aims to Resuscitate Amazon’s Original Targets of Destruction

Photo / Monique Ly

Amazon represents a New Normal but Not Everybody is Happy with That

From a consumer perspective it’s hard to argue with buying things at a very low price, often, in the case of books, below wholesale and with ridiculously fast free shipping. But who is paying for this? Mainly, it’s complicated, but it has traditionally been people and companies that sold books before the existence of Amazon, later known as the grim reaper, destroyed their businesses and livelihoods.

Recently, deep inside the Amazon system the rot is starting to show. Just as a camel is unlikely to pass through the eye of a needle, you don’t get to be a trillion dollar eCommerce retail giant without some internal corruption. A lot of internal corruption. Who knows? …as a customer, you might even encounter expired lemon curd or a used diaper along the way.

Compare this to Apple, a company that charges a premium for the best products and service. And for the caché of being part of a greater whole that stands for something other than “the cheapest no matter what”. Not without soiled hands perhaps, but on the other end of the spectrum from winning by selling at impossible prices. Instead it is a company known for building a brand that stands for quality, luxury and innovation above all.

Somewhere, on the good-guy side yet between these diametrically opposed behemoths now stands a new, tiny, alternative for the book world: Bookshop.Org

A Formula that just might Work, as People Gradually Realize that a Monopsony is Just as bad as a Monopoly

The ORG is important as it signals the true fact that this is a company with a purpose beyond profit and that it is a cooperative venture in nature. The site is founded as a bet that true Booklovers can be persuaded forego a few dollars of artificial price reduction to support a better entity, and still get a premium product and experience.

Bookshop.org is registered as a B-Corp and therefore pledged to place social good ahead of profit. Since profits are predivirted to help independent booksellers, authors and others that choose to affiliate, profits are limited inherently in the business model.

The idea that the thought content of the books themselves can bind together producer, seller and reader, along with the sharing of an affinity towards authors and ideas, is something that has been all but lost, after the decimation of bookstores of all kinds in the wake of the Amazon explosion.

This is also true of other product categories, say, consumer electronics, but books and bookstores were the first target for extermination, thus the experience of sharing a like-minded love of books with a store that will provide them is now, truly, an all but extinct concept.

Created to help those independent book sellers across the country that have survived in spite of the “success” of the below-cost dumping strategy employed by the “Death Star”, Bookshop.org is an alliance that includes the American Booksellers Association as well as the largest book distributer in the US, assuring a vast current selection and an established fulfillment network.

Communicating the value of opting out of the status quo will fall on the booksellers and new partners that join the Bookshop in its quest. By the way, you too can contribute and become an affiliate member at no cost, for example if you are and Author or an Influencer, or if your blog can send potential book buyers to the site.

Finally, For Booklovers who Love Booklovers a site that Loves Indie Booksellers

John Warner of the Chicago Tribune has likened the endeavor to the Starwars Rebel Alliance fighting against Amazon’s Death Star, and the analogy is certainly apt. However, this is more about the option to inhabit a world where there is a book buying choice beyond the obvious and ubiquitous.

Where, in an Amazon world, is it possible to choose an experience that is, in a sense, also an investment in dignity and diversity, and who better to make such an unique choice than the well-read Booklover?

Ammunition on the supplier side is a commission, more like a stipend really, of approximately double the amount a seller receives if they send buyers to Amazon (known as an affiliate commission and attached to virtually all offers across the web), with the extra bit paid for by not being an only for-profit entity. That’s high concept if ever there was.

For a detailed breakdown of the site’s concept and financial structure you can go directly to Bookshop or read Joan Verdon’s excellent article in Forbes.

So, while the richest man on planet earth pays hundreds of million$ to PHDs to come up with new ways to destroy existing competitors – even those that pose no threat whatsoever, you can side-step all that noise and chose to be Hans Solo, reluctant but ultimately heroic, and support the people who love books more than just money.

If you see Lynxotic book reviews, from now on, they will likely have a link to an offer to buy from our Bookshop.org independent bookstore partner cherrybooks who, yes, will reap a small but meaningful reward for joining the cause.

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