just wanted to say, I learn more reading your newsletter than from any other writer I've discovered in ages (started reading your work after a nudge from Greenwald/Taibbi); keep up the great work!
It's not at all obvious that offering products for sale and fulfilling sales are two separate lines of business. That's like saying a grocery store can't offer home delivery. In fact, a great deal of the reason why Amazon succeeded is because of superior fulfillment. Amazon Prime was a success because it removed shipping costs as friction; the buyer sees one price and that - plus sales tax - is the final price. No inflated shipping costs, handling charges, and other gouges that were the hallmarks of mail order sales before Amazon. One might reasonably see Amazon's cloud services as a separate business, but not order fulfillment.
Another excellent letter - your weekly edition has gone to the top of my „must read“ pile and always feel like a lesson in applied capitalism and history in one.
The SCOTUS isn't really pro-monopoly, and its NCAA ruling shouldn't be that surprising. The NCAA is not a monopoly in this case, so much as a labor market monopsonist. The "restraint of trade" aspect is so obvious, no consumer benefit criterion comes into play. Neither the NCAA nor the players are final consumers in any case.
For the breakup bill, is there a "sold separately" clause. I would say that if Amazon vertically integrated, and only sold marketplace, Prime, and Fulfillment as a bundle, that would be OK. A "sold separately" clause would mean that they couldn't offer their own products on the same platform (i.e. the platform is only a 3rd-party marketplace) which would prevent them from selling against marketplace participants, and as it's a bundle you wouldn't be able to play games with preferences for different parts of the platform - everyone would have every part. Essentially, it disallows semi-vertical integration. This is a big part of the platform strategy, going back to "embrace, extend". You first establish a control point that intermediates 2 parts of an ecosystem, preferably with multiple users on both sides (consumers and sellers, system component providers and OEMs, etc). Then you integrate the components into the core platform - "grow share of wallet". This is the standard industry playbook.
Thanks Matt for staying on top of this. Really, almost nothing is more critical to this economy and our freedom than reducing the monopolistic power of these companies. Bit Tech is not the ONLY industry as you well know that needs to be addressed.
I think that exposing the political leadership cleavages is the key. The devil is in the details and if the government is not 'thinking like a criminal" (awesome reference in the article) then they are not going to be winning the battle against Erics team.
Can you do more to expose who on the left and right are on the right side of this argument and are they gaining in power or reclining in power?
I support anti-trust legislation but it seems like it will be a slow grind. What if the monopolies wanted to break themselves up? I suggest a progressive corporate tax rate in addition to anti-trust legislation, we need to fight the oligarchy on multiple fronts.
Get rid of the corporate flat tax and bring in a progressive corporate tax scheme, like we already have for personal income taxes - the biggest and most profitable corporations would pay at a higher RATE. For example the top corporate rate might be 50%, the next lower bracket would be 40% etc etc down to the smallest businesses rate of 15% for tiny one person businesses. No more flat tax - it is a stupid idea for personal income taxes and was a stupid idea for corporations, and yet that is what we have right now.
Big monopolies would break themselves into smaller units in order to descend into lower tax brackets, under a progressive tax structure. They would break themselves up even more quickly and efficiently than the government could do it, because nothing motivates corporations more than greed. Another benefit of a progressive corporate tax is that smaller businesses which are more competitive and generate more jobs and are more innovative would pay a lower rate than the monopolies which are currently crushing them out of existence.
A minimum global corporate tax (to eliminate tax havens) combined with a progressive corporate tax rate would restore the free market and get big business to pay their fair share. They have had their taxes cut too much, they need to pay more.
In other news, the Second Circuit just trashed what had been a significant FTC victory against 1-800-Contacts. Even if we have a dozen competing search engines, if competitors can agree (or be coerced to agree) not to do competitive keyword advertising on any of them, consumers will continue to lose out.
Historically, anti-trust actions are only brought after they are pointless because market forces are already in the process of destroying the existing monopoly. Government action is a following indicator, not a leading indicator.
This action doesn't show that government is finally moving. Rather, it shows that these "monopolies" are already in the process of being destroyed. Facebook was already debilitated as its massive user base slowly dies off and is not being replaced. But, that's a minor problem compared to the elephant in the room: blockchain.
The nascent blockchain technologies have already begun the process of destroying the social media giants. Youtube, for instance, is even now being replaced by LIBR. The best blockchains are decentralized, not owned by any particular individual or entity. The new government activity merely signals what tech watchers know. The social media giants are already dead. They just don't know it.
Matt - I wish you would write on the terribly COMMUNIST activities by the TX Railroad Commission & other State Agencies if not designed to, certainly practicing separation of Texans from their USC-protected rights to trials by jury of peers.
TX had 128 citizens die of the BIG FREEZE of MAR2021 and Gov Abbott lied about the causes wrongly blaming ERCOT when in fact it is just these MONOPOLY Gas Pipelines like my situation that illegally shutin my well for 12 months violating SWR 3.73b which simply states: "No pipeline may disconnect from a producer without having first applied for authority from TX RRC adn secondly having recieved same; except, should a producer in writing agree to disconnection".
NONE of hte requirements of SWR73b were met. The facts were not in dispute. AND YET, ALJ Chico dismissed my case after refusing to penalize Eastman Gas Company for violating SWR73b by shutting in my well for 12 mos. Her reasoning was that literally 22 hrs b4 the hearing, they agreed to restore service.
This is a long-employed tactic by pipelines to "Force Down" bad contracts upon producers. It leaves the producer with the only choices of: 1) accept a bad contract, or 2) have your well shutin until you decide to accept a bad contract or lose your leases for non-production!
Additional, as seen this past MAR2021, it kills Texans due to inability to receive the much-needed natural gas during bitterly cold weather.
Our TX RRC is corrupt. Our TX Govt - largely Rethuglicans for the entirety of my 35 Yrs as Prof Engr practicing in the state - is corrupt. Our Rethuglican Gov, AG, DAs, Courts and Legislature apparently can't be bothered with justice when profits for monopolists are at stake.
Wish you could help b4 we small, private producers are BKd in favour of TBTJWS PUBLIC E&Ps and Monopoly Pipelines' profits and more Texans needlessly die purely for the greed, avarice and hubris of complicit Govt Actors. The Docket # b4 TX RRC was OG-20-00005143.
Thanks in advance - D. Mark Loyd, Pres of Imagery Exploration, Inc.
It's stupid to lump all these firms together. Amazon and Google are by far the biggest offenders, whereas Apple works within its own ecosystem and is not a monopoly. Are Apple's rules sometimes capricious, distasteful, or even douchey? Probably. But nobody is forcing anyone to do business with them.
Meanwhile, the ever-expanding TicketMaster monopoly goes unpunished, despite being a textbook example of a consumer-harming monopolistic entity.
just wanted to say, I learn more reading your newsletter than from any other writer I've discovered in ages (started reading your work after a nudge from Greenwald/Taibbi); keep up the great work!
It's not at all obvious that offering products for sale and fulfilling sales are two separate lines of business. That's like saying a grocery store can't offer home delivery. In fact, a great deal of the reason why Amazon succeeded is because of superior fulfillment. Amazon Prime was a success because it removed shipping costs as friction; the buyer sees one price and that - plus sales tax - is the final price. No inflated shipping costs, handling charges, and other gouges that were the hallmarks of mail order sales before Amazon. One might reasonably see Amazon's cloud services as a separate business, but not order fulfillment.
Another excellent letter - your weekly edition has gone to the top of my „must read“ pile and always feel like a lesson in applied capitalism and history in one.
The SCOTUS isn't really pro-monopoly, and its NCAA ruling shouldn't be that surprising. The NCAA is not a monopoly in this case, so much as a labor market monopsonist. The "restraint of trade" aspect is so obvious, no consumer benefit criterion comes into play. Neither the NCAA nor the players are final consumers in any case.
For the breakup bill, is there a "sold separately" clause. I would say that if Amazon vertically integrated, and only sold marketplace, Prime, and Fulfillment as a bundle, that would be OK. A "sold separately" clause would mean that they couldn't offer their own products on the same platform (i.e. the platform is only a 3rd-party marketplace) which would prevent them from selling against marketplace participants, and as it's a bundle you wouldn't be able to play games with preferences for different parts of the platform - everyone would have every part. Essentially, it disallows semi-vertical integration. This is a big part of the platform strategy, going back to "embrace, extend". You first establish a control point that intermediates 2 parts of an ecosystem, preferably with multiple users on both sides (consumers and sellers, system component providers and OEMs, etc). Then you integrate the components into the core platform - "grow share of wallet". This is the standard industry playbook.
Thanks Matt for staying on top of this. Really, almost nothing is more critical to this economy and our freedom than reducing the monopolistic power of these companies. Bit Tech is not the ONLY industry as you well know that needs to be addressed.
I think that exposing the political leadership cleavages is the key. The devil is in the details and if the government is not 'thinking like a criminal" (awesome reference in the article) then they are not going to be winning the battle against Erics team.
Can you do more to expose who on the left and right are on the right side of this argument and are they gaining in power or reclining in power?
I support anti-trust legislation but it seems like it will be a slow grind. What if the monopolies wanted to break themselves up? I suggest a progressive corporate tax rate in addition to anti-trust legislation, we need to fight the oligarchy on multiple fronts.
Get rid of the corporate flat tax and bring in a progressive corporate tax scheme, like we already have for personal income taxes - the biggest and most profitable corporations would pay at a higher RATE. For example the top corporate rate might be 50%, the next lower bracket would be 40% etc etc down to the smallest businesses rate of 15% for tiny one person businesses. No more flat tax - it is a stupid idea for personal income taxes and was a stupid idea for corporations, and yet that is what we have right now.
Big monopolies would break themselves into smaller units in order to descend into lower tax brackets, under a progressive tax structure. They would break themselves up even more quickly and efficiently than the government could do it, because nothing motivates corporations more than greed. Another benefit of a progressive corporate tax is that smaller businesses which are more competitive and generate more jobs and are more innovative would pay a lower rate than the monopolies which are currently crushing them out of existence.
A minimum global corporate tax (to eliminate tax havens) combined with a progressive corporate tax rate would restore the free market and get big business to pay their fair share. They have had their taxes cut too much, they need to pay more.
There must be prison time and stiff fines included.
In other news, the Second Circuit just trashed what had been a significant FTC victory against 1-800-Contacts. Even if we have a dozen competing search engines, if competitors can agree (or be coerced to agree) not to do competitive keyword advertising on any of them, consumers will continue to lose out.
Historically, anti-trust actions are only brought after they are pointless because market forces are already in the process of destroying the existing monopoly. Government action is a following indicator, not a leading indicator.
This action doesn't show that government is finally moving. Rather, it shows that these "monopolies" are already in the process of being destroyed. Facebook was already debilitated as its massive user base slowly dies off and is not being replaced. But, that's a minor problem compared to the elephant in the room: blockchain.
The nascent blockchain technologies have already begun the process of destroying the social media giants. Youtube, for instance, is even now being replaced by LIBR. The best blockchains are decentralized, not owned by any particular individual or entity. The new government activity merely signals what tech watchers know. The social media giants are already dead. They just don't know it.
Matt - I wish you would write on the terribly COMMUNIST activities by the TX Railroad Commission & other State Agencies if not designed to, certainly practicing separation of Texans from their USC-protected rights to trials by jury of peers.
TX had 128 citizens die of the BIG FREEZE of MAR2021 and Gov Abbott lied about the causes wrongly blaming ERCOT when in fact it is just these MONOPOLY Gas Pipelines like my situation that illegally shutin my well for 12 months violating SWR 3.73b which simply states: "No pipeline may disconnect from a producer without having first applied for authority from TX RRC adn secondly having recieved same; except, should a producer in writing agree to disconnection".
NONE of hte requirements of SWR73b were met. The facts were not in dispute. AND YET, ALJ Chico dismissed my case after refusing to penalize Eastman Gas Company for violating SWR73b by shutting in my well for 12 mos. Her reasoning was that literally 22 hrs b4 the hearing, they agreed to restore service.
This is a long-employed tactic by pipelines to "Force Down" bad contracts upon producers. It leaves the producer with the only choices of: 1) accept a bad contract, or 2) have your well shutin until you decide to accept a bad contract or lose your leases for non-production!
Additional, as seen this past MAR2021, it kills Texans due to inability to receive the much-needed natural gas during bitterly cold weather.
Our TX RRC is corrupt. Our TX Govt - largely Rethuglicans for the entirety of my 35 Yrs as Prof Engr practicing in the state - is corrupt. Our Rethuglican Gov, AG, DAs, Courts and Legislature apparently can't be bothered with justice when profits for monopolists are at stake.
Wish you could help b4 we small, private producers are BKd in favour of TBTJWS PUBLIC E&Ps and Monopoly Pipelines' profits and more Texans needlessly die purely for the greed, avarice and hubris of complicit Govt Actors. The Docket # b4 TX RRC was OG-20-00005143.
Thanks in advance - D. Mark Loyd, Pres of Imagery Exploration, Inc.
BRAVO - thank you VERY much for this update.
And - something else, of high interest:
IT’S TIME TO BUILD by Marc Andreessen IT'S TIME TO BUILD - Andreessen Horowitz (a16z.com)
https://a16z.com/2020/04/18/its-time-to-build/
It's stupid to lump all these firms together. Amazon and Google are by far the biggest offenders, whereas Apple works within its own ecosystem and is not a monopoly. Are Apple's rules sometimes capricious, distasteful, or even douchey? Probably. But nobody is forcing anyone to do business with them.
Meanwhile, the ever-expanding TicketMaster monopoly goes unpunished, despite being a textbook example of a consumer-harming monopolistic entity.
Matt, are you looking at the KCS/CN rail merger? What is there like one railroad left in this f'n country? The STB is reviewing this thing now. https://theloadstar.com/cn-and-kcs-hopeful-of-merger-green-light-from-us-stb-this-month/