I'm still inclined to think it's a good thing. I'm not educated enough on this topic to agree or disagree with any of the commissioners' opinions, but the FTC is clearly interested in sending a signal to the public.
I'm moderately optimistic, although it will be interesting to see what happens after the next presidential election. It's possible that the commissioners are concerned about it, and are trying to make some kind of mark and set precedent before they're all fired and replaced if a Republican (Trump?) takes office in 2024.
"It is under the word government, that the subtle danger lurks. Understood as a central consolidated power, managing and directing the various general interests of the society, all government is evil, and the parent of evil."
"A strong and active democratic government, in the common sense of the term, is an evil, differing only in degree and mode of operation, and not in nature, from a strong despotism."
This past century, common thought may have shifted to a more "dangerous evil" definition versus the original sense of "unenlightened, capricious will," nevertheless it is indeed a pleasant surprise that the FTC would act in a more "enlightened" (my opinion) or "long overdue" response to corporate misbehavior.
If they were really interested in sending a signal they would do something like shut down Amway. A company that is nothing more than a multi-billion dollar "legal" pyramid scheme which preys on the most vulnerable people in society operates with impunity and has for decades now. Literally brainwashes and robs MILLIONS of people on a daily basis.
The FTC, FCC, and SEC are toothless against billionaires. Just like the IRS, they mainly focus on harassing small-time crooks these days because that's the easiest thing to do. The large scale fraudsters operate with absolute impunity. If anything these organizations actually act as a barrier to entry for people looking to get into fraud, because if you don't get big enough fast enough they will come after you. But once you hit a billion in revenue, you are golden.
So, I know a little about this, unfortunately. My "shameful past job" at one point in the 90s was working for a company that basically made small-business CRM+accounting software you could customize to drive any MLM scheme you could think up.
Amway's not the best example, since they actually sell real goods and because Amway's sellers' best customers have almost always been the sellers themselves. In other words, many sellers used it as a way to buy goods at "wholesale" and never really had any intention of reselling them. At one point, I think that was even part of the Amway pitch, particularly at the time they were inexplicably popular for their (expensive and therefore in theory a better deal discounted) water treatment products.
I don't think there's a price advantage there compared to Costco or online, though--much of what made Amway fade into the background starting in the mid 90s.
So too Stella Dot, Mary Kay, Cutco/Vector, probably Herbalife and even Transamerica, etc. They sell real stuff, whether or not the pricing makes sense, and you can technically turn a profit on it, whether or not the market is really there, so they're not technically considered a pyramid scheme in the scam/illegal sense.
Now, I'm not saying they're good ideas--at all--and they absolutely operate on hype and pipe dream every bit as much as those awful timeshare presentations. They have the same exponential market saturation issue as any pyramid scheme and the same diminishing returns--but they are generally not considered fraudulent, just obnoxious.
The really awful pyramid schemes mostly just sell "new seller kits" to prospective targets that teach them how to sell "new seller kits" to their targets, have no real product or way to make a profit, and the entire rollup is those kits and other overhead fees. They're the financial equivalent of a chain letter.
I'm pretty sure those do get action taken against them if they're identified. The biggest problem there is most are pretty small, take a bunch of people's money, then burn out once it's all rolled to the top ranks who founded the scheme and new marks aren't easy to find.
It's a great example. Sued many times in many regions. Unable to operate in some countries where they aren't able to pay off politicians and government bodies. Founders have faced criminal charges in several countries and had assets seized. Fraud, price-fixing, false claims, tax evasion, racketeering, and the list goes on.
It's a great example because there is just so much about it. It's not some obscure company that has never been sued or never been found guilty. It's a company run by people who commit fraud and get away with it because they are just so wealthy.
It is a criminal organization. They have even pled guilty to criminal charges in the past. But somehow they just get to pay a fine and keep on going.
The whole point of my comment wasn't to focus on Amway but just to point out how ineffective the FTC is. Even when the activity is criminal and/or flagrant they are powerless to actually do anything to stop it. At best you get some modified legal jargon.
Idealistically, I don't disagree. I just meant they're not a great example of something I'd expect the FTC to knock down with a new stance here.
They don't break (current) US laws in terms of being a pyramid--not going to get into their history of fraud, racketeering, etc, which isn't an FTC concern.
Anyway, I know you're basically making a "this cause is more important than that cause " argument, but of course a stricter stance specifically re: being anti-competitive wouldn't touch them at all. They don't lead a market in anything anymore.
What I realistically would expect this to bring down, if anything, is the walled gardens, where they exist on devices that have become so central to our lives that this amounts to broadly restricting what goods or services you're able to consume. The wording of what they released seems very specifically crafted to highlight walled gardens and similar concepts, at least where there's arbitrary action in the name of rent taking happening as well.
I suspect this--along with the anti-competitive payment system decision from the Epic case--is the shot across the bow for Apple and Google to either loosen up on iOS and Android (and very specifically, App Store and Play Store) or be targeted.
That'd be good enough for me, for now. I don't like MLMs either, and this may be a first world problem, but it's a daily one I face.
They don't break the laws because they pay off politicians to write them in their favor. A few years ago they tried to make it explicit and get it written into law that they would be exempt from investigation over the whole "pyramid thing" permanently. They failed then, but give it another few years and they will succeed.
The whole walled garden thing is mostly trivial nonsense. At worst Apple and Google will pay a small fine and a few thousand people will be able to more easily sideload some stuff. Maybe. Probably not though. If it gets to this these companies will simply modify the law so that it doesn't apply to them.
Unfair competition is an American virtue these days. Fair competition is seen as "being weak".
Even this policy statement wasn't approved 4-0. It was 3-1. You've got government bodies that are so politically divided that you literally can't even get FOUR people—WHO RUN THE FTC—to agree that on a simply policy statement that basically says, "Unfair Methods of Competition bad." The dissenting commissioner wrote a 20 page book why she doesn't support this.
And you know what? I mostly agree with the dissenting commissioner. Not wholly because of her views, but because in practice this will be used to harass small(er) business. It will have no material impact on Google, Facebook, Amazon, or Apple.
Your last point is a really good one. We saw that kind of captive behavior with the FCC too, particularly during the last administration with that one yahoo that was running it for awhile.
I too don't see how an anticompetitive rules can be used to thwart MLMs (like Amway).
But IANAL, so I'd need an ELI5.
Either way, I support overreaching rulesets against gig economy biz models with onerous penalties. eg Repeated radical cashectomies.
Scams like Uber, where Labor has to supply their own Capital to participate, receive no benefits, have no collective bargaining, get shunted into arbitration, and are excluded from profit sharing.
While I understand your point, I think society should treat all of this as a distinction without a difference. Herbalife et al. should not be allowed to prey on the vulnerable, regardless of if they happen to sell a “real” product or not. It’s not a real business selling a real product.
Other countries rightfully have seen it this way for some for the companies under discussion.
I'd be fine with a new definition that made them illegal, or at least put such heavy truth-in-advertising laws on them that nobody in their right mind would bite given the real numbers you can expect. They're absolutely exploitative.
I probably made the mistake of speaking a little too specifically for the US situation, though. Here, the criteria are (modulo nuance) roughly what I said for the FTC to care.
I guess a starting step would be people with psychiatric ailments or learning disabilities. I knew a couple that had both between them and spent all their time trying desperately to survive while falling for every scheme out there. This was America in the early 90s and they were in their late 40s so surely dead by now, because nobody survives to an old age in the U.S with that kind of weakness.
Whether or not they sell real stuff is a distraction from the real question. To figure out if it is a scam, you need to look at 1) where profits come from (is it from "selling" the product, or is it from recruiting sellers and "selling startup kits".) If most of their money is from people buying "be your own boss and own a business kits" then that is the product. 2) The next question is if that product they are selling (the kit) is a scam or misrepresented pipe dream.
Even if they sell a product, you need to ask if the product is the product. If all the money is from a pyramid of recruiting people to recruit people to buy startup kits, there should be some kind of action taken against them. The distinction becomes more obvious when you look at something like Cutco/Vector, where there is a product company and a marketing kit company.
In essence you can have two identical companies with two identical business models, and one can be a scam and one can not be a scam based on execution. If the business derives profit primary from sales to end customers, then everything is above water. If millions of "own your own businesses" end up with garages full of unsellable product, its a scam.
I recognize this interpretation takes away the agency and culpability from the person who joins a scheme, buys a bunch of stuff in hopefulness, and fails to execute as a salesperson. I also recognize that markets can dry up, and what was once above water can start to look like a scam. But these companies prey on those types of people. And if preying on vulnerable people is your business, its a scam.
> I don't think there's a price advantage there compared to Costco or online
Yeah, my parents bought some amway stuff regularly, because in the 90s outside of the US it was actually a good deal on cleaning products. The closest wholesale mall equivalent for us was ~3h drive away.
Multi level marketing is closely related but distinct from a pyramid scheme. The critical difference is the actual generation of profits and the health of the organization through time.
Franchise agreements can similarly look really sketchy on the surface especially with a large buy-in, but it’s hard to argue a Mcdonald's franchise agreement is a scam due to the real profits and costs involved. Which isn’t to say every franchise agreement is a good investment.
Where things break down for MLM is really the specific business model and percentages involved. If say 4% of a sales guy’s check gets sent to the chain of people who recruited him then no big deal. However, large percentages or large buy can quickly become very problematic.
Non-MLM franchises don't make their money from sublicensing at all. It isn't like one McDonald's franchise is being paid by other McDonald's stores. It's single-level marketing. So I don't know that the distinction is so fuzzy.
Some franchises are basically scams against the franchisee- subway and Quiznos were famous for not caring much at all and being willing to sell a franchise to anyone with some money (normally franchises are protected from similar franchises within a given area).
I was bringing up one of the more sketchy parts of many MLM companies, the out of pocket cost before someone can actually make money selling product.
The point was buy in can absolutely be used as part of a scam see many 90’s MLM “companies”, but it may also be part of a perfectly reasonable business model.
There are plenty of bad franchises (remember Quiznos anyone?) but McDonalds is probably the best counterexample. Opening a new franchise is almost impossible these days and McDonalds does a lot more due diligence on someone acquiring an existing franchise (with right of refusal) than anyone ever did on SBF or FTX.
Even the scammy MLMs these days come with buyback clauses due to FTC agreements so the MLM meme of someone getting stuck with a garage full of product they can’t sell is largely a leftover from the 90s.
Franchise agreements should have a very narrow path to the top of the chain. Maybe a state / locality, country, and global entity at most and that entirely for tax zoning / similar reasons.
What does “literally brainwashes” mean? I don’t think “brainwashing” is actually a well defined concept. Can you link to an explanation that would clearly exclude persuasion?
I taught my children the correct usage of the word "literally", after we watched an irksome YouTube video in which the host made significant abuse of the word.
Now whenever they hear someone say "literally", they double check with me: "Daddy, is (xyz) a figure of speech?"
It's literally (figuratively) meant figuratively for literally (literally) hundreds of years, depending on context. I was always a language stickler growing up but am becoming more measured in most areas of life as I age and discover the subtle nuances of literally (figuratively) everything, and as long as I'm understanding someone figuratively (figuratively), I won't question their language.
I should clarify, I'm more interested in the use of "brainwashing" than the use of "literally" which I agree has entered common usage to mean figuratively.
While I agree that Amway and other pyramid schemes (including most crypto) should be shut down, it's not because they're anti-competitive. They're fraudulent, which is arguably worse but certainly different.
It's not really fraudulent. Most of the companies com plans are right there.
I don's see it as any more fraudulent then tech companies offering products for free or significantly discounted using investor cash to buy massive market share then once they have a monopoly jacking up prices or loading up search results with ads to the point you need to scroll down to even see search results.
Imagine if when google was first released it was nothing but ads and/or websites with more ads from its ad network
It is fraudulent. Fraud, racketeering, price-fixing, false income claims and operation as an illegal pyramid scheme. Sued many times in many countries. Banned from the UK and most of the EU. Several founders were indicted in Canada on criminal charges.
But somehow it's just not enough for the FTC to really do anything other than settle and let them continue operate.
> If they were really interested in sending a signal they would do something like shut down Amway.
Sure, if the signal was “we just want to get beaten up by the courts for trying to turn a regulatory agency into a lawless dictatorship”.
> The FTC, FCC, and SEC are toothless against billionaires
None of them are in primarily aimed, legally, at indivduals, regardless of wealth.
> Just like the IRS, they mainly focus on harassing small-time crooks these days because that's the easiest thing to do.
I don’t think a review of the actual enforcement record of any of those agencies supports that claim. Vonage, Harley-Davidson, Weber grills, Westinghouse outdoor power equipment, OpenDoor Labs—just to cite FTC enforcement actions in the last couple weeks—aren’t small actors.
That's not true. A pyramid scheme, legally, has no product but itself. Those are illegal.
For example, pay me $20 to join my company and you get the right to recruit people for $20!
Amway is essentially exactly the same except they add a product to the mix to get around the law. They still primarily profit from the "employees" rather than customers.
Changing the definition of a pyramid scheme, for the proposes of law enforcement, to something more akin to "profits primarily off employees" is what needs to be done.
If you have model legislation handy, particularly the specific legal definition of scams like MLM, I'd be very grateful. Otherwise I'll poke around a bit, to see how UK phrased it.
I think one of the interesting signals they are sending is that, in an era where increasingly law seems to feel like ‘whatever you can construct a Supreme Court majority to uphold’, there are other elements within the constitutional checks and balances, and executive agencies enforcing legislative intent is one such important component.
> whatever you can construct a Supreme Court majority to uphold
I find the same thing with liberal courts. For instance with the second amendment. We clearly have a problem here with the court system reflecting their own personal views instead of what’s written in law. But the problem is not coming from the right. Unless your point is that when a court doesn’t agree with you then they’re wrong.
It was not a partisan point. Constructing a court majority goes both ways.
But so does constructing an FTC commissioner board majority! Note that commissioners are seven year senate-confirmed presidential appointees. Similar oversight bodies exist for other federal agencies.
This is a useful reminder that such positions are intended (endowed by powers by legislation, in fact) to set rules and govern executive behavior without stuff having to go to the Supreme Court.
It sounds good as long as the White House doesn't try to use the FTC as a political weapon to disadvantage their opponents. Like going after Amazon for their union stance or Facebook for their censorship stance.
The FTC is an independent federal agency, and the President doesn't have the same amount of control over it that he has over federal executive departments.
For example, the President could fire the Secretary of Labor at any time, for any purpose, because executive department heads serve "at the pleasure of the President." The same is not true for FTC commissioners, who are statutorily protected from firing except for "inefficiency, neglect of duty, or malfeasance in office." SCOTUS held in Humphrey's Executor v. United States (1935) that an FTC commissioner could not be removed by the President for policy reasons, because it was explicitly granted non-executive powers by Congress.
His power to issue Executive Orders to independent agencies is unclear, and often Presidents will "recommend" they do things, rather than "direct" them, as he would an executive department.
>> It sounds good as long as the White House doesn't try to use the FTC as a political weapon to disadvantage their opponents. Like going after Amazon for their union stance or Facebook for their censorship stance.
> The FTC is an independent federal agency, and the President doesn't have the same amount of control over it that he has over federal executive departments.
Isn't that the same as the FCC? We all know what happened with it and Net Neutrality during the Trump administration.
If it's staffed/led by the right people, it could act as a semi-autonomous political weapon.
There’s a difference between having opinions while sharing the goal of having a functional system and being Ajit Pai. There are many civil servants who put aside their personal politics trying to make the government succeed.
You're not wrong, but it's important to remember that Ajit Pai was not a civil servant – he was a political appointee. Civil servants are career government employees, whose jobs are not tied to an election, administration, or term in office.
Civil servants necessarily put their own personal politics aside, because in all likelihood they will serve under several different political administrations. That is not the case, nor the expectation, for political appointees.
Good clarification — I was thinking the appointee level because this thread was talking about the overall direction of the FTC, and I was looking for a comparison which most people here would be familiar with where you could see the difference between people who differ in priorities versus those who seem to think the agency should not exist.
I should have clarified that my next sentence was switching to refer to the people who implement policies set by the senior levels: there are many people who do not agree with all of those decisions but will try their best to implement them because they want to make the country more successful or believe that a law needs to be enforced even if someone on their side broke it.
Don't kid yourself, this is being weaponized. Anytime the government does anything, it is not to help you or me.
It will be used in ways not intended. The Sherman Act has been used by many politicians to go after their political advisories.
If the FTC wants to do this, then they need to go after the banks for their anticompetitive practices. How about Apple?
In the 90s, Janet Reno went after Bill Gates. It wasn't because of the browser in Windows. It was a result of Microsoft's reach into Congress, helping turn Congress over to the Republicans. Microsoft's execs didn't want the tax increases that were coming, so they went all in for Republicans. After the election, Reno directed the DOJ to prosecute M$. What a circus that was to see. Then, you know what really hit the fan, Microsoft backed Dave Stirling in California. Democrats were going to do anything they could to destroy M$.
Can you imagine someone going after Google, or Apple, because they won't let others put software on their devices? How anticompetitive is the Apple Store? Can I please remove Chrome off my Chromebook, and use Firefox? Google and Apple donate heavily to Democrats, as does Microsoft today. You're not going to see it used where it needs to be, related to technology, IMHO.
I'm not picking on Democrats, there are plenty of anticompetitive right leaning companies as well (The Banks, Oil & Gas Industry, Agriculture...).
> Anytime the government does anything, it is not to help you or me.
So you believe the government is entirely a self-serving, wholly corrupt organization, that does nothing to help the people?
This is an extraordinary claim, and requires extraordinary proof.
Or are you assuming that everyone here is among the moneyed elite, and claiming that the government's actions are directed at reducing the power of that class to benefit the common people?
That would be much closer to the truth, but is certainly nowhere near as absolute as you make it sound.
Whatever your intent here, the absolutism you display makes your statement patently false to anyone who has any real understanding of how governments—or, indeed, nearly any large organization—work.
>Anytime the government does anything, it is not to help you or me.
This is a Regan Republican era talking point. Government is supposed to work for the people but for the last 40 years it has been used as a boogieman to push agendas which are actively not in the interest of the people.
In the US much harm has been done by under staffing and purposely slashing budgets of organizations that benefit the people. The amplification of "government doesn't help" comes from those regulated by the government. OSHA enforcing safe working environments? "Government meddling in my business driving my costs up!" IRS auditing, catching tax cheats, and closing loopholes? "Government stealing my hard earned profits!" Look at the attacks on the EPA since they are trying to protect vulnerable waterways that property developers want exploit and manufactures want to dump into.
So let's fund and staff the FTC and let it go after all of them. We need government in our corner going after the Banks, Big Tech, Oil, Commercial Agriculture, Pharma, etc.
The narrative needs to change so we aren't dealing with these issues in a reactive way.
> fyi, arguments become immediately less convincing when they include "m$"
OK... but deviantbit's comment clearly presents Microsoft as the victim of corrupt government officials, which isn't really compatible with calling it M$. It seems more likely that the use of M$ in "Democrats were going to do anything they could to destroy M$" is to present M$ as a label given to Microsoft by the Democrats in order to make it easier to attack. He's trying to tell you that arguments based on the epithet "M$" are or should be unconvincing.
M$ was what Democrats would call Microsoft to demonize them. Just as Biden is demonizing the oil industry. Biden mocked the entire oil industry for making $100 billion dollars. Yet, Apple made $155 billion in 2021.
No democrat has asked Apple to turn those profits over, or wanted a wind fall tax. Why? Apple donates heavily to Democrats, and this is why you will never see an anti-trust suite.
Less well known: it only requires one exception to prove a proposition false.
Not to mention: individual citizens have next to no insight into what really happens within various governmental agencies. And culturally, the tendency is to assume that one's preferred beliefs are true.
Fortunately most of the worst examples the anti-net neutrality crowd used never made sense from both a business model and technology perspective.
Trying to turn the internet into tiered internet packages like early 2000s cable companies offered would be a disaster even without neutrality laws. There's probably a reason the only real-life example in history that Wikipedia lists was some bottom-of-the-barrel Portuguese mobile network that experimented with a discount plan that never took off.
The lobbyists either bought into the bullshit benefits like everyone else or more likely were just taking the default anti-gov interference position.
The internet is so far from ever being the extremely limited centralized platforms that cable offerings were that the analogies never made sense if you spent any amount of time considering them.
Because it has no jurisdiction to do so, and there is no law being broken. You want to give a federal agency the power to discretionarily decide what vaguely "helps" the American people? And what about when a political party you don't favor gets into the presidency and appoints his own chairman to interpret that vague mandate?
Amazon is good for some consumers (people who value convenient shopping and fast shipping) and bad for others (people who really like independent shops). It’s also good for some employees (people who couldn’t have found a better job elsewhere) and bad for others (people who could have found a better job at a business that got outcompeted by Amazon).
Whether it’s a net positive or negative force is basically too complex a question to answer without resorting to an overarching unfalsifiable ideology like neoliberalism or socialism.
However, rule of law, predictability, and stability are unambiguously good for everyone. Attacking businesses or people on pretexts unrelated to the underlying reason a politician wants to hurt them is a hallmark of corrupt countries.
If we decide as a society to legislate stronger union protections then sure, enforce them against Amazon (and everyone else), but it seems bad for that to motivate selectively enforcing unrelated antitrust laws.
> good for some consumers (people who value convenient shopping and fast shipping) and bad for others (people who really like independent shops).
It's bad for them too once the monopoly is strong enough that Amazon can stop caring about those things.
Preventing monopolies isn't done because it satisifies some abstract sense of justice, it's done because they genuinely hurt consumers in the long term, even if the monopoly became a monopoly because they were really good for consumers to begin with.
Independent shops can still exist… just not the useless ones. Amazon is known for more generic commodity items, but if you want premium brands you often still have to go direct to manufacturer. In fact the “independent” shop niche is probably why Shopify even has a market.
> Amazon is good for some consumers (people who value convenient shopping and fast shipping)
Amazon is awful for people who value fast shipping. They used to let you specify your shipping speed! Now the only option they offer is "it'll get there when it gets there". They also feel free to deliver things well after they claimed they would, once they're willing to give you a delivery date at all.
I actually canceled my Prime subscription this year specifically because Amazon's approach to shipping is so abusive.
It seems very tonedeaf to describe the welfare of Amazon employees in terms of the health of the job market. Have you considered the employees who can't find a better job elsewhere, but also feel insufficiently compensated for their time? I believe it likely that you'll find more in that group than either of the two that you described.
You've just described the job market. If this employee cannot find better paying employment (assuming that the job market is operating efficiently) then it is either a skill issue (This hypothetical employee is not sufficiently skilled to demand a higher salary) or a demand issue (There is insufficient demand for your skills in the market).
We can have a fruitful discussion around job market efficiency (e.g. is Amazon a monopsony employer in some local markets), but objecting to the tone of the comment feels very out of place when this is the language that we use to describe the economy.
Why go after Amazon specifically, with a profit margin ~2%, instead of other companies like Apple, for example, with a profit margin of ~30%? It seems like the latter would have much more room to raise employee salaries.
I think that's a very easy question to answer, but I'm going to do so with another question: who do you think employs more stateside? Apple's profit margins obviously come from their use of overseas manufacturing - certainly an ethical problem too, but not the same problem. I'm concerned with the people building their phones as well, but Amazon employees are in my immediate vicinity.
I really can't think of a more apples-to-oranges comparison (pun not intended). The only thing Apple and Amazon have in common is that they're the A's in FAANG.
Presumably because Amazon is such a notorious neat grinder in how it treats its "boots on the ground". They don't exactly have the goodwill necessary to shake it off since mkst people's relationship with them is out of convenience rather than fanaticism. Also unlike some brands with the ability to conveniently ignore where or how their unsafe/underpaid sausage is made (in China) they also get shit for squeezing the hell out of their workers domestically where they can still complain about the mistreatment publicly.
Amazon and Meta are both obviously engaging in "unfair methods of competition". To blame moves from the FTC on anything else seems like a pointless, truth-agnostic move.
The FTC is free to investigate whoever they want, but if it only ends up being companies the White House opposes then that doesn't seem to be furthering the goal of increasing competition. There is the obvious bad behavior of cable companies in uncompetitive markets or the recent consolidation of movie studios or even car dealerships. I will reserve judgment until the FTC announces their targets.
If police only gave speeding tickets to those with Trump bumper stickers, would that not be a misapplication of the law? I think most people would think that is wrong even if they all happened to be speeding.
The difference here is that these "Trump bumper sticker" cars are going 100+ over the speed limit -- why the fuck would you waste your time arresting 10 people going 5mph over instead?
> If police only gave speeding tickets to those with Trump bumper stickers, would that not be a misapplication of the law?
Surely that depends where you live. Seattle (where I live)? Yeah, that would be obvious discrimination. A few counties further inland? Probably not statistically significant.
I’m not sure how or if that reasoning applies to FTC purview, but my intuition is that corporations of the size that might warrant interest aren’t likely to be partisan targets in any stable or persistent way.
Both the previous administration and the current one have expressed issues with those companies, and they couldn't be more opposed to one another.
Most of these big companies are anticompetitive at the very least. Every acquisition over the past decade has been a move towards oligopoly. Add to that widespread union-busting behavior, manipulation of the American people by spreading political or foreign psyops, exerting control over self-contained markets, etc... there's a lot of behavior that's been allowed over the past few decades that should have been reigned in.
Sounds like what you're describing is that certain companies have become scapegoats. Amazon, Apple, Google, Meta, Tesla, and Microsoft all add a lot of value to people's lives both through the products they sell as well as the tax revenue they provide for the greater benefit of all. They aren't the primary drivers of any of our society's largest problems. We could quibble about exactly what those are, but they'd probably include: the high cost of health care, the high cost of housing, climate change, immigration, pollution, crime, etc. And yet these companies occupy the headlines constantly, and evidently the mindshare of our legislators instead of those issues!
> Amazon, Apple, Google, Meta, Tesla, and Microsoft all add a lot of value to people's lives both through the products they sell as well as the tax revenue they provide for the greater benefit of all.
That's a very bold claim, and one that I think is generally untrue and possibly extremely so. That might be true for a wealthy software engineer, but I don't think it's true for most people. For example, anyone who doesn't own a Tesla has benefited exactly 0 from the company's existence. If you don't order from Amazon or aren't doing lots of Google searches... same. And in fact, some of these companies - like Amazon, Meta - take far more than they give back. Amazon has killed local stores nationwide, on demand delivery and packaging is awful for the environment, etc. Meta just consumes attention and spreads misinformation.
> They aren't the primary drivers of any of our society's largest problems.
Except in some cases they quite obviously are. Amazon is the case study for abusive workplaces. It's the poster child for foreign-produced, cheap knockoffs. Meta is credited for spreading misinformation that has resulted in the near-destruction of our democracy. Apple, Microsoft, and many others have been implicated for using slave labor in their supply chains. How many products sold on Amazon are products of such labor?
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I think it's important that we examine these issues critically. These are not benevolent super-corporations. Sometimes they do good, sometimes they do evil, and either way it's generally on a huge scale due to the scale of the companies.
It's much more complicated than that. For one, you're conflating targeting industries vs targeting individual corporations.
One of the core jobs of the president is deciding which lawbreakers to go after. This is needed because (among other reasons) the government is far too small to enforce every law. In general the President is supposed to set general parameters but not pick specific individuals or companies. Deciding a specific sector's violations are more pressing is squarely within the traditional discretion of the executive branch.
Social Media and Online Retail are big nothings compared to Finance and Health Care. Finance shenanigans cause global recessions and health care is consuming 20% of GDP and growing. Since politicians and journalists love Twitter though, we get to hear more about that instead.
On the other hand, healthcare companies aren't an integral part of a cycle which leads to armed mobs.
The other thing to remember is that healthcare costs, while significant, are both familiar and legal, and the government uses the regulatory powers which Congress has granted it. Finance similarly has existing agencies and laws and while there are periods of lax regulation which end badly most people would say that the problem is regulators choosing not to use their powers or Congress underfunding staffing rather than an unclear question of how to handle a particular problem. In contrast, something like what should be acceptable on social media doesn't have public consensus and runs into thorny constitutional issues. It's understandable that this gets more attention, especially a time when one of the major political parties is making unfounded allegations in an attempt to keep their voters active.
My local pizza place is vertically integrating marketing pizza, making pizza dough, making pizza, selling pizza, and delivering pizza.
It’s not the vertical integration that matters but the amount of market power a company has. My pizza place: almost none. Amazon: significantly more than none.
The entire sales process from searching & reviews to delivery. There are allegations that Amazon uses their data to identify the most profitable areas to set up their own competing brands and may even force sellers to disclose information which is helpful in this regard. If true, it seems pretty clear that a sensible antitrust rule would be to split those functions into separate businesses with strict rules about what non-public data they're allowed to exchange so the Amazon Basics guys don't have any information about what's selling where which you couldn't get.
Selling things is selling things. That isn't vertically integrating. A good example would be selling and shipping now that Amazon is getting into delivery as well.
Amazon ships more packages through its DSPs than anyone. But I don’t see them doing delivery as anti-competitive. It is highly integrated and streamlined however.
They put a absolutely massive amount of resources on solving delivery. And they probably do it better than anyone. You couldn’t split that out without totally breaking it.
>as the White House doesn't try to use the FTC as a political weapon to disadvantage their opponents. Like going after Amazon for their union stance or Facebook for their censorship stance.
Hm, lets think for a second and wonder why someone might consider Amazon or Facebook an "opponent" of the government. What's the argument here? That corporations should be immune from the government enforcing a level playing field?
I mean, a law against being a jerk would be great too, but the problem is that everyone thinks the other guy is the jerk. And when we actually try to write rules down for this stuff it gets problematic quickly.
fwiw, I believe if you ask anyone who has interacted with any of the relevant (to competition) agencies globally, any law/rule which gives them more power is obviously bad. The humans who work there tend to be clueless about the specifics of an industry and imagine all kinds of nefarious intent everywhere. They are often intelligent people, but just don't understand the industry.
> The humans who work there tend to be clueless about the specifics of an industry and imagine all kinds of nefarious intent everywhere. They are often intelligent people, but just don't understand the industry.
Sometimes that's a good thing. "Understand[ing] the industry" often means buying into its bullshit and looking at the world from its self-interested perspective.
> fwiw, I believe if you ask anyone who has interacted with any of the relevant (to competition) agencies globally, any law/rule which gives them more power is obviously bad.
And if you've ever interacted with an abusive corporation, you'll see that any rule, or lack of rule, which gives them more power over you, their customer/employee is obviously bad.
I, as a customer/employee/tenant would generally like my bank to not run off with my money after betting it all on red, my employer to not retaliate against me for reporting abuse, and my landlord to not throw me out on my ass because I complained about a rat infestation in his building.
Without any rules against unethical behavior, most organizations with power over you will happily turn to it, and will drive their more ethical competitors out of business.
Tis true. It's a conundrum. Do you give power to the regulator which will help them stop the bad guys, but also enable them to be bad guys at the cost of the good companies, or not?
Free market folks argue that the market can figure out every one of those things you mention. But most of them understand it isn't a free lunch.
It is a conundrum, and it is one of the hardest political problems for humans to solve. It's half the reason we have politics.
I generally think that a case-by-case approach, with clear avenues for both rulemaking and redress, with democratic (direct or representative) control is a good starting point for solving this conundrum.
I allude to the problem of finding market solutions for ethics problems in the last part of my previous point. Markets do not optimize for ethical behaviour. Largely because of information assymetries, largely because people are not perfectly rational agents, largely because of the power imbalance that exists in many of them, and also largely because people are poor at measuring specific examples of long-tail risk.
Good rules also reduce market friction, because they let me make reasonable assumptions, like 'This product is probably not going to kill me when used as instructed, because it adheres to X, Y, Z objective standards', instead of having to go down an endless rabbit hole of 'Buyer beware, do your own research!'
I would go a step further and argue that markets optimize for institutions that will seek to consolidate monopoly power and destroy the freedom of the market in which they formed. They specifically optimize for unethical behavior, as a natural consequence of the incentive systems in place. I argue that this is true even if there is not a large bureaucratic government to take advantage of for regulatory capture.
Basically, classical economics is predicated on a knife-edge equilibrium that ironically needs government intervention in order to prevent people from deviating.
This is speculation and pedantry, but: What if they do? What if they already weed out 90% of it, and the remaining stuff that you notice is the optimal amount given the cost to weed it out (no matter how said weeding is done).
Pedantic counter-example and Exhibit A: The endless litany of unraveled crypto scams that keep getting bigger and better, year over year. There's one that's going bust right now.
It's the poster child for a perfect market environment, where everyone involved is simply trying to optimize their returns, and there are next to no rules. It's also full of hucksters, thieves, conmen, liars, and flat-out frauds, to the utter detriment of any legitimate commerce in the space.
You don't think the market could sort this out through time? Free market believers don't think the market will sort out every problem overnight - it is pretty much the belief that the bad players get shaken out over time.
The harder ones seem to be healthcare (massive info asymmetry) and anything related to pollution (externalities). The market has had time on those and not done so well.
Even if they did, it would be idealized free markets that did that.
Not the very much non-ideal, largely non-free markets we have, rife as they are with information asymmetry, non-commodity products, buyers with urgent time needs, and a host of other aspects that utterly invalidate the Free Market Will Solve Everything gospel that so many try to preach.
For a while I reread William Langwiesche's 2003 article in The Atlantic* about Columbia's last flight[1] every year or so. I find it very easy to empathize with the insiders who actually understand all of the minutiae and imagine the frustration of dealing with outsiders who didn't understand any of the details or all the decision processes you and your team had already been through.
The point was that I didn't want to make the same mistakes, and I wanted to remind myself to be wary of "inside scoop" types of opinions, or placing too much weight on "reports from the frontlines", because I recognized that I was overly biased in this direction. Outsiders views, or fresh perspectives, as well as insights from a big picture also have value.
Every long gone institution or industry that now seems absurd with hindsight, also necessarily had some internal logic if it ever existed for decades.
I'm talking the agencies who get involved in competition law. In the US that's the FTC and the DOJ, and others in different jurisdictions. It's pretty different from the FAA. The FAA is the aviation authority. They are presumably stacked with folks who understand a lot about aviation.
I mean this with complete sincerity but perhaps given current market, business, and global conditions, perhaps we should assume nefarious intent anytime a company breaks a rule in a way that causes them to profit? It's not like evil or shady behavior is in short supply.
The question is mostly what should the rules be, and how much leeway do you give an administrative agency to decide what they are and if they are being broken.
At least in the US, there is a very reasonable argument that the administrative agencies have overstepped.
As an example, from the FTC:
"Unfair methods of competition, the policy statement explains, are tactics that seek to gain an advantage while avoiding competing on the merits, and that tend to reduce competition in the market".
Who decides what "the merits" are, and who decides what the "market" is? They play a lot of games with these definitions. What are the merits in the smartphone business? Did apple abuse their position to unfairly take over the camera business? Is "cameras" even a market anymore? Is a camera so clearly part of a smartphone that it does indeed meet the definition of "merits"? Is Amazon abusing their position in e-commerce to take out the delivery business (fedex etc) by offering "free shipping" ? Is AWS abusing their position in IaaS to unfairly compete in the "server cpu" market? Is that even a market? Or is it not because x86 chips and ARM chips are thought of as different? Read the current case brought against Meta. The definition of "market" is... really pretty awful. Someone is just trying to make their career.
This reply is spot on. A vague policy statement means that the FTC itself can't be and won't be held to any standard. They might define Ecommerce one way when it helps with Amazon's prosecution and define it another way to help with Facebook and Google's prosecution. I read the policy statement - it's so broad that it's meaningless. Just lobby the politicians and hope and pray they keep the FTC at bay is not the way to run a developed country.
> At least in the US, there is a very reasonable argument that the administrative agencies have overstepped.
Only if you ignore most of the text of the congressional acts that have created them. If the FTC's charter consisted of that one paragraph, it would be a reasonable criticism. It doesn't, and it's not.
It's true that there's a reactionary movement in the current SCOTUS that comes up with very odd interpretations of these congressional acts (like concluding that CO2 is not a pollutant, and thereby can't be regulated as one), but just because Amy Coney legislates from the bench that the sky is green doesn't necessarily make it so.
"It's possible that the commissioners are concerned about it, and are trying to make some kind of mark and set precedent before they are all fired and replaced if a Republican (Trump?) takes office in 2024."
It is also possible that this is an incorrect interpretation despite its position as the top HN comment. Note I am not saying it is incorrect, I am saying it is possible it is incorrect. Anything is possible, right. Well, almost.
FTC Commissioners are appointed for terms of seven years,^1 and no more than three can be from the the same political party. The Senate must confirm nominations. The President chooses the Chairperson. See 15 USC 41.
Commissioners frequently resign before their terms expire, but I am not aware of any instances where a Commissioner, or all five of them, as suggested by the parent comment, have been been "fired" for political reasons. Perhaps an astute HN commenter can cite one.
1. The exception is if they are filling a vacancy left by someone who leaves before their term expires.
> Commissioners frequently resign before their terms expire, but I am not aware of any instances where a Commissioner, or all five of them, as suggested by the parent comment, have been been "fired" for political reasons. Perhaps an astute HN commenter can cite one.
Precedent didn’t seem to restrain 45.
45 remains the favored candidate to run as the GOP nominee in 2024 Presidential election.
"45" appointed two Democratic Commissioners and one Republican when he was in office. One is still serving and voted in favour of withdrawing the 2015 Statement on Section 5. The 2015 Statement came under Obama's watch, not 45's.
"Tech" proponents try to politicise any regulation that threatens their privacy-disrepecting, anticompetitive and deceptive "business" practices but that strategy is doomed to fail. At this point politicians on both sides are annoyed by the "tech" company nonsense, perhaps for different reasons.
Yeah forcing Ticketmaster and Live Nation to unmerge, divest venues and reselling platforms, and preventing exclusive contracts with venues would be huge. Even in a very conservative interpretation of antitrust law there has clearly been an increase in prices to end consumers.
A small subset of the B2B-level customers always benefits from monopolies. But this only reduces competition in their own markets... in this case the limited set of musicians and record labels who succeed via special treatment by Ticketmaster's monopoly.
Ultimately it harms more musicians/labels than it benefits. Especially in the long run.
This shows that monopolies not only harm their own markets but plenty of sub-markets as well.
The influence successful companies have on gov policy-making is one of the best arguments against ever more specialized gov intervention in markets. The best solution is gov policy that shuts down anti-competitive behaviour full-stop.
Not creating specialized 200+ page bills that can be exploited by the big players (see how Dodd-Frank resulted in only 5 mega-banks controlling a market while tons of small/medium banks shut down due to their unrealistic requirements) - which is often what's pushed both by politicians and inadvertently by the public who buy into false narratives about punishing corporate greed.
I will sell tickets for your band/venue at whatever price you want, declare x% of the price a "fee," and give most of the fee back to you. I'll happily be the punching bag, but it won't work. Your fans will be upset with you, not me, for choosing a podunk, unheard of ticket seller that charges egregious fees.
The only reason why your band is going to choose Ticketmaster over my is because Ticketmaster already controls the market.
No. You physically can not run a major (arena/stadium) tour without using live nation. They own or have cross deals with the production company, venue, etc. Even pre-merger they had their hands in many many many pies. Its not just ubiquity of the ticketing.
Im 10-15 years out if date, but no. When I was friends with MPA/CAA touring folks no one was pro live nation or ticket master. They were at best a necessary evil that you dealt with in order to get market/venue access. Everyone was moving to make money on merch and direct sales. And that was before the bigger consolidations and “resale marketplace” grift of the past decade.
> Policy statement renews agency’s commitment to exercising
Classic Uncle Sam newspeak. If there previously was commitment, there'd be no need for restatement and/or renewal. Put another way, this is a shameless way of saying, "We've been slacking." Bold.
That aside, taking it on its word, this type of hard left turns are counter-productive. No one - business or society - likes surprises. They need to set a standard, *do their jobs*, and stick to it. They might also want to send a memo to The Fed asking they refrain from pouring gas on the fire that ultimately benefits those best positioned to capitalize on said pouring.
This swerve left only means there'll eventually be a swerve right. And back again. Hardly an effective approach.
Following the links, here's the actual meat of what "unfair methods of competition" means [1, pg 9]:
> There are two key criteria to consider when evaluating whether conduct goes beyond competition on the merits. First, the conduct may be coercive, exploitative, collusive, abusive, deceptive, predatory, or involve the use of economic power of a similar nature. It may also be otherwise restrictive or exclusionary, depending on the circumstances, as discussed below. Second, the conduct must tend to negatively affect competitive conditions. This may include,
for example, conduct that tends to foreclose or impair the opportunities of market participants, reduce competition between rivals, limit choice, or otherwise harm consumers.
> ...the second part of the principle examines whether the respondent’s conduct has a tendency to generate negative consequences; for instance, raising prices, reducing output, limiting choice, lowering quality, reducing innovation, impairing other market participants, or reducing the likelihood of potential or nascent competition.
And selecting from some given examples [taken from pg 13-15]:
> loyalty rebates, tying, bundling, and exclusive dealing arrangements that have the tendency to ripen into violations of the antitrust laws by virtue of industry conditions and the respondent’s position within the industry
> de facto tying, bundling, exclusive dealing, or loyalty rebates that use market power in one market to entrench that power or impede competition in the same or a related market
> using market power in one market to gain a competitive advantage in an adjacent market by, for example, utilizing technological incompatibilities to negatively impact competition in adjacent markets
Parent comment doesn't seem to only be talking about prices. He's talking about Safari being the only browser on iOS. Other vendors are only allowed to reskin it.
WebKit lock in is a way to prevent web apps from disrupting appstore cash cow. Appstore is rentseeking on popularity/market position of the iPhone/iOS - and clearly worded above - appstore distribution monopoly is anticompetitive.
This is another meme. It was revealed in the Epic trial that 80% of App Store revenue comes from games - that would not be in the browser anyway.
If the lack of alternate browsers are the only thing stopping app developers from making better PWAs, then why are all the same developers making iOS apps, Android apps and web apps instead of just making iOS apps and web apps?
And where are all of the successful profitable Android apps that are bypassing the Play Store?
Umm apple was the slowest to adopt webgl 2.0 to the point where it was pointless targeting it because you didn't have reach. And WebKit blocks a lot of other standards.
If iOS had open browser engines I guarantee you two things :
- evolution of web standards would be different
- web mobile games would be a thing
The 30% cut would incentivise big distributors to invest in it (Epic/Steam). It was enough to get epic to risk getting baned from appstore
If Apple is holding back “web mobile games”, why aren’t developers making games for iOS and the web instead of iOS and Android? As a mobile game developer wouldn’t it be logical to skip making a native game for Android and just make one for the web that covers Android and computers?
Just because Android devices can allow for alternative stores, doesn't mean in anyway that it's easy to setup, nor is it simple to write software in the limited sandbox provided that needs to work independently of Google services. This is all by design.
So, how successful do you think a store would be if its made difficult to install and difficult to create software for? Is it any surprise there are no successful profitable apps?
Then let’s limit the discussion to alternate web browsers. If the only reason that Apple is keeping alternate browsers out is because of losing App Store revenue, then we should have plenty of successful “apps” that are iOS/web only instead of iOS/Android/web.
Are browsers the same as app stores? Are browsers designed to search for vetted web apps and provide an environment for them to run without the browser bulk? Are browsers designed for ease of purchase? Are alternative browsers supposed to be competition for app stores?
I’m not aware of any proof this is the case. Regardless of platform, what business is going to invest the time and money required to make a competing platform for app delivery on mobile that rivals the current stores? Both Google and Apple can shutdown you down in an instant if they were to consider you a competitive threat. Why bother?
So businesses won’t invest time and money to create a browser. But companies will invest literally billions of dollars collectively to develop other software?
The Mozilla cooperation mostly survives because of Google funding it to be the default search engine. Even Microsoft decided it didn’t make sense to keep developing its own browser engine. How is a company going to make money creating browser? No company has successful made a profit from people paying for a browser - ever.
Yes, I was around and into computers when the first browsers came out. I was actually writing extensions to a custom Mac Gopher server before the web became popular.
Ok so now we are going into the history of browsers, who said anything about paying for browsers. Your argument was 'why are web apps not popular on Android then', and I explained why.
Browsers are inherently insecure. Even Apple now has an optional “lock down mode” where it turns off performance enhancements in Safari browser that are historically vectors used to hack devices
That's a real stretch in a conversation about anti-competitive practices. These practices were a problem for consumers when MS employed them on Windows and they're a problem now on iOS. Specific to your point, browser vendors competing fairly would almost certainly find advantage in offering the most secure browser, thereby improving the platform for all, including Apple.
I'm purposefully leaving aside the security question and will just respond with a new question of my own. Why would anyone even think of getting into the browser game when they're locked out of competing on arguably the single most important platform in the world?
This is what I was talking about with streaming. Disney is leveraging their position as a massive studio to force the use of their sub-par steaming service. It used to be illegal for film studios to own box offices. The modern equivalent is streaming. Give them a couple of years and they'll be suing Disney.
Every retail store sales at price higher than retail? Do they now... I just bought GoW Ragnorok at retail $30 cheaper than its listing on the PSN Store. This is the same for most new release titles, retail is cheaper.
Besides, you can't compare the real world with digital. The real world isn't a near infinite space with millions of items are available in a single place for everyone in the country with a connected device to view and purchase.
And it’s still selling more than its wholesale cost. Do you think the retail store is selling it and not making a profit?
Oh and guess what? Even when you buy a third party game from a retail store, the console maker still got their cut. Console makers have forced third party developers to pay a license fee for every game sold for over 30 years.
So you complete changed the argument from retail to wholesale. That licensing fee applies to digital and physical copies so why is it relevant?
Retail is a physical space, rent applies to properties in the real world. Rent does not apply to near infinite digital spaces run by a single company.
It was cheaper to purchase in store than on the digital store, why is that? Is it because platforms only allow a single store to be available on their devices, their own. Imagine if there were competing stores? Im sure that 'rent' price would disappear really quick.
I didn’t (mis)use the term “rent seeking” the parent poster did.
Just like Apple gets a cut of every app sold on iOS, the console makers do to. Even when you buy a physical disc
The original poster was calling it “rent seeking” when Apple got 30% of sales. This is what every distributor does - they mark up the price. The “wholesale” price is the price the original manufacturer sells it to distributors for.
Again you are comparing the real world with digital. Are companies manufacturing software from sourced resources, excluding people and labour? Is Apple physically distributing software in trucks to stores across the country. No, none of this applies to digital content hosted on digital stores.
You would think digital content would be cheaper, as it is not bound by real world restraints. It can be duplicated easily, moved quickly and made available at anytime to any person with a connect device.
Apple sets its own mark up of 30%, they can do this through anti-competitive practice of limiting sales to their store only. If companies where able to host their own digital stores and sell their own digital products, Apple could not afford to mark up to 30% on sales because no one would buy anything at the inflated prices on their store.
> Again you are comparing the real world with digital. Are companies manufacturing software from sourced resources, excluding people and labour? Is Apple physically distributing software in trucks to stores across the country. No, none of this applies to digital content hosted on digital stores.
So do you think running the app stores don’t have a cost? Is any company not charging a mark up for being a distributor of digital content?
> You would think digital content would be cheaper,
The physical retail markup is much higher.
> Apple sets its own mark up of 30
As does all of its competitors.
> If companies where able to host their own digital stores and sell their own digital products, Apple could not afford to mark up to 30% on sales because no one would buy anything at the inflated prices on their store.
If that’s the case, why do companies that can sell physical goods on their own choose to sell on Amazon? Why don’t music companies sell their own digital downloads since they can be played on iPhones? Why don’t major publishers of books sell their books from their website? You can download a book from the web directly into the Books app and you can sideload on a Kindle?
The answer is simple, Amazon and Apple are where the customers are and there is no friction buying from either one because your payment details are already on file.
Marco Arment (cofounder of Tumbler and now a well known indie developer) said that one overlooked benefit of subscriptions through the App Store is that everyone keeps their payment information up to date with Apple.
From a consumer standpoint, canceling a subscription through the App Store is much easier than for instance going to the NYTimes abs trying to cancel it.
Again, I bought GoW Ragnorok for $30 cheaper than the digital store ($99 in store, $129 on PSN). Same for most new releases, the PSN store is always overpriced. Same with xbox.
Now we are talking sale of physical items on Amazon. Amazon is popular, doesn’t mean it has no competition. I can easily buy things on eBay, or Walmart or any number of big chain stores. Amazon isn’t the most popular online store where I live, eBay is. Kindle has lock in aswell, side loading is not convenient. most people wouldn’t know what it is. There are however many alternative ebook stores and many people do sell directly from a personal website cheaper.
Many companies do sell their products on their own sites, Music can can be bought from alternative websites. Unlike the App Store, there is no rule that says these items must be sold from a single source.
I do not understand where you're going with all this? Are these continually changing arguments meant to justify Apple locking out competition that allows them to freely set their own pricing? That no one would use alternatives anyway? That it's no different from retail?
> companies where able to host their own digital stores and sell their own digital products, Apple could not afford to mark up to 30% on sales because no one would buy anything at the inflated prices on their store
Yet companies that do have a choice between selling products using their own distribution channels, overwhelmingly decide to sell through aggregators. Why is this?
You keep bringing up buying a game locally as opposed to buying it threw the PS store. My point is the platform provider is still getting a cut.
> alternative websites. Unlike the App Store, there is no rule that says these items must be sold from a single source.
Your argument was why would merchants sell on the App Store if they weren’t forced to. My Counterexample is that even when that choice is available, merchants still chose to sell through aggregators because that’s where the customers are.
> de facto tying, bundling, exclusive dealing, or loyalty rebates that use market power in one market to entrench that power or impede competition in the same or a related market
> using market power in one market to gain a competitive advantage in an adjacent market by, for example, utilizing technological incompatibilities to negatively impact competition in adjacent markets
A few obvious targets that come to mind here are Amazon Prime and, to a lesser extent, Xbox GamePass.
I've often wondered if the infamous Google banners about "you should really be using Chrome for our websites" should be considered a form of this.
Suspecting that them only requesting it, rather than mandating it (in the message) might stop it crossing the threshold. Even though there (at least used to be) plenty of cases where (say) Firefox would outright not work properly with Gmail, so Chrome or a derivative had to be used.
I wonder if super-apps with subscription passes like Uber that combine food delivery and taxi service could be targeted by this rule. Many businesses are forced to expand to multiple verticals to satisfy growth numbers, and they can use dominance is one vertical to oust players in another.
I'm no expert but doesn't seem like it to me. Uber took successful technology from its taxi business and applied that to food delivery. That's just legitimate innovation; they're not exploiting power in one place to gain more in another.
I think the apps are separate too? But "bundling" is more about forcing customers to buy more than they need, not the fact that both services could be operated from the same app.
A good thing, since fair methods of competition is the single differentiating policy of the USA that put it into a dominant world position over the last 200+ years. See Why Nations Fail by Acemoglu and Robinson.
The US really hit the geographic jackpot - long coasts with good harbors on Earth's two biggest oceans, an immense river system connecting basically the whole agricultural heartland, an immense area with good soil and temperate climate capable of supporting large scale agriculture, substantial oil reserves and other mineral wealth, and few regions prone to natural disasters. It's hard to imagine a better starting position.
Given that places like Egypt, India, Mesoamerica, etc were all colonized by Europe despite long histories of advanced civilizations, I don't see how European colonization would imply a place isn't capable of technological advancement.
Illegal immigrants are by definition knowingly breaking a law, a rather uncivilized act. Kayakers or border hoppers, regardless of country of origin, are not behaving in a civilized way.
I am also a legal immigrant, and it was kinda easy being one because of the luck of being born in a particular set of circumstances. If someone is crossing a border because they are failing to feed their family without it, that's a highly civilized act. Please don't demonize people just because they life has been harder than you understand.
Germany had their cheap energy trade agreement with Russia blocked for years by US, and recently had their pipelines attacked. Their ability to freely grow in power is constrained. If they got as even close to as powerful as the US did or were even rising as they have been recently, their neighbors would meddle in their affairs and block their progress. Russia, France, UK, etc. So, US not having a close competitor has aided them greatly in dominating their hemisphere and using the resources available to them to grow into the global power.
Germany dominates EU. The French-German duo have been cooperating for years now. The limits prior to Putin's folly were on German militarization. The French required that given the history between the two. For years in fact there have been vocal voices asking Germany to politically act according to its economic stature.
This singling out of Germany from Europe is Russian propaganda. The core message, as you obviously have learned, is "US is keeping Europe under its thumbs because it is afraid of losing its dominance." What they neglected to add was that this is also the position of many European elites, who do -not- want to go back to Europe before Pax Americana.
In fact, just as in US, so too in Europe and Asia, there is a division amongst the elite regarding the current global regime. It is clear why a loser like Russia would want this, but would say Japan or Taiwan, or France, or even Germany, want to go back to a world where 'balance of powers' and periodic 'big wars' are par per course?
As for US, that bill from Pentagon is not just for 'keeping America safe'. No. It is the price of the replacement of the British Empire and its maintenance of global finance and trade. That shit costs a lot of money. So if we decide to go "multi-polar", we no longer have to spend that much money - let the East Asians duke it out over who controls the island chains. US will remain a powerhouse in every way.
p.s.
re-read the above and the point is opaque. The 'cost' of living in the American era for other countries is possibility of having to sacrifice their national interest in the interest of the global order. US does this routinely btw (which gets a certain subset of Americans quite upset as you know) and so it's not just asking say Germany to give up cheap Russian oil. Remember us giving a whole chunk of our industrial base to China? That was not in our purely national interest but it was in the interest of having a peaceful global order. China had to be integrated.
So, this is my recommendation for all "multi-polar" fans. Reflect on this: WW3, if it happens, will happen post multi-polarity. Just like #1 and #2 followed the breakdown of Concert of Europe in 19th century.
don't forget that the Marshall aid also prevent a massive economic crisis in the US.
After world war 2, employment collapsed because of the downturn of the war economy.
From a realpolitik perspective, its a smart move. Using the marshall aid to get influence in europe, prevent your main competitor from gaining further foothold on the continent and also having market (which requires a near complete rebuildup) for your economy to divert to after the collapse of the war economy.
And war reparations germany never made. Fortunately everyone is now well aware of the damage germany is making to europe. We also know how germany treated east europe by attempting to share it with russia. The pipeline was a warning shot: change course of suffer consequences.
The lack of military invasions has certainly been a boon, but not sufficient to overcome the issues left over by Spanish/Portuguese style colonialism which created land owning aristocracies and rampant corruption. Argentina, Brazil, and Chile really all ought to be superpowers and Venezuela could have been richer than Saudi Arabia.
Sapiens and Guns, Germs and Steel discuss this some. The US also benefits greatly from its geography. Good farming land that stretches through a consistent latitude allows you to use similar techniques and crops across. The same is not true for more mountainous and longitudinally-oriented areas. I believe this applies more to continents than individual countries, and South America is definitely narrower and taller than the US.
Yes on the oceans, but having either jungle and/or a mountain range bifurcating a country tends to make it expensive to integrate into a cohesive country, so the benefits become more limited.
Well India didn't have an event where the locals that spoke different were massacred or reeducated/"civilized" like the other super powers of the US and China.
Actually the idea of modern India is mostly a product of the British, so in that aspect they are a young nation.
Specifically, the US was outside the range of WW2 weapons. At the end of the war our factories were the only ones left. Secret sauce of the American economic boom.
US was in range of WW2 weapons or Pearl Harbor wouldn't have happened. Sure it took more resources and coordination then just shooting a missile, but Japan clearly in range.
Inaccessible to enemy tanks, yes. The UK, Switzerland, Australia, Japan, etc all benefit from the fact that it is very hard to march an army into their territory and thus they can build factories and infrastructure confident tjhey're not going to be destroyed, and engage in trade freely confident that they are not empowering someone who will destroy them.
and the big piece of land full of resources the colonizers stole right in the middle of those two oceans might have been a factor too.
the remarkable thing is what a terrible, unlivable, ugly nation we built out of all that wealth. The Romans built imperial Rome, the French empire built Paris, the US government built... a beige car dependent urban sprawl.
> the US government built... a beige car dependent urban sprawl.
So I agree... BUT its survivor bias. A middle class American (say median income), would absolutely rather take suburban America in the most soulless subdevelopement over whatever a median income roman would live in.
The pretty things in Rome stayed 2000 years because people liked it. Think of everything that didn't make it. They also had hundreds of years more to build them than the US has had. The Empire State Building, much of DC, victorian homes in SF... there's plenty of lasting beauty in America. Many more cities with many more opportunities for lasting beauty. Just look at Boston, its a dynamic city with a mix of old and new... its an example of what the next Rome may look like 2000 years from now.
I would bet every dollar I have that if you had to live in imperial Rome, or Paris during the French Empire, that you would be begging to go back to this "terrible, unlivable, ugly nation."
I looked into "Why Nations Fail" and it looks like it wasn't persuasive enough to survive the last decade. http://whynationsfail.com is a defunct website.
Twitter's C-level privacy, compliance, and security management resigned today (yesterday maybe?). Twitter is currently under two FTC consent decrees. Probably unrelated to anticompetitive practices, but interesting timing.
My take on this:
the stock market tanked, us congress and senate members already sold all their stocks, and now they told the FTC it's safe to go after big tech.
Note that this statement, while semantically true, is highly misleading:
"Congress passed the Federal Trade Commission Act in 1914 because it was unhappy with the enforcement of the Sherman Act, the original antitrust statute."
In truth, the laws were harsher vs anticompetitive conduct before the Sherman Act was passed, with a history going back hundreds of years (in England) under the rubrick "Restraint of Trade." This was common law, not statute law.
The Sherman Act was the first statute, true, but its main function was to kneecap common law penalties by limiting penalty amounts. President Harrison was sincere about limiting monopolies, according to his writings, at least, but it's not at all clear that sly John Sherman (brother of railroad president and General William Tecumsah Sherman), was.
I should have noted that I'm talking about the original Sherman Act, if you read the Sherman Act now, you're reading a longer document that does much more, it's been much revised over time, with broader, more expected agenda.
Unpopular opinion: I wish this law extended to startups using VC cash to offer products at artificially low prices. When done at sufficient scale (ex. Uber), it massively distorts markets and is very much anticompetitive, even if consumers benefit for some time.
This. It’s not just startups, big companies do it too.
The best recent example is Google Photos. Google announced “free and unlimited” photos storage to everyone one day. Every other paid photo app out there fell of a cliff. Nobody else could give away terabytes of cloud storage for free.
Then once there were no good competitors left, Google suddenly reversed course. Now it’s only free for reduced quality. Ok now it’s only free up to 15GB … and if you fill up that 15GB you’ll stop getting your emails!
It's unpopular because it's a bad idea. Sometimes products or services aren't unit economical at small scale and need to be subsidized until they are adopted en masse.
“Chip War” by Chris Miller describes how Silicon Valley first successfully pulled this off, when Robert Noyce spearheaded the selling of chips at or under manufacturing cost in the 60s to wean off dependence on government contracts and get regular customers interested. It did work in that instance, but I guess the real question is when & how that framework should be applied.
A tempting idea is to judge whether or not the final good/service is indispensable for the users (and how likely monopoly can be established), such that prices can be raised to recoup the losses. But that alone doesn’t seem to be sufficient as shown by the MoviePass collapse. Lots of ingredients to get right!
How is it anticompetitive? Charging lower prices means making less profit. If Uber somehow lost money to drive out competitors (an insane strategy), then the capital of any bankrupted taxi company could be bought up for cheaper than the company originally paid by someone who could then continue to compete with Uber.
Check out "Uber is a bezzle" by Cory Doctorow. His allegation is this scheme:
1. Early VC funds are used to subsidize Uber rides at a loss to Uber.
2. The deep discounts made Uber attractive to drivers and customers.
3. Uber's soaring popularity attracts more investment in Uber stock.
4. Uber's early investors cash out. Society is harmed as later investors lose their money, Uber drivers who invested in vehicles can no longer get work, public transit ridership is hollowed out, etc.
If a company used its own prior profits, or profits from another product line, to lower prices and drive a competitor out of business before raising prices again, that would be illegal. Why is it any different when the subsidy comes from outside?
Selling products or services at a loss in order to drive out competitors is a classic anticompetitive tactic that has killed countless otherwise-successful small businesses.
what the hell does "anticompetitive" mean? driving competitors out of business is exactly what competition is; and there are still very many competitors to Walmart!
Nnnno; continuing to compete with competitors is what competition is.
Once you have driven your competitors out of business, there's no one left to compete with. That's why it's "anticompetitive".
And yes; there are still other companies in the same space as Walmart; that's not the point. The point is they drive out competitors in the local area where many of their stores set up, so that if the people who live there want to shop, they have no choice except Walmart.
Uber certainly has most of the rideshare market; I believe around 75% in recent years. It also competes with the local black cabs, with some limited success.
With the recent price hikes Uber is no longer always a dramatic saving compared to black cabs, especially during "surge" periods. After ten years of operating at a loss, plus laws being passed about tax enforcement and driver payments, and a sexual abuse scandal, it seems like they've been forced into a bit of a reality check.
I thought you were claiming that they "never raise prices", but it sounds like I misunderstood. Sorry, but your comments are short and brusque so it's hard to know what you mean.
no, what happened is they had a product that was better than waiting 45 minutes for a cab you had no idea was on the way or not; and other companies came up with similarly good products like Lyft and Didi and are very much competing with Uber
Awesome, when can I expect to see an alternative to Comcast for high-speed (>=1gbps) internet in the Bay Area? The fact that all of Silicon Valley cannot solve this problem after decades is telling of the power of their monopoly.
ISPs are natural monopolies. That's not to say the government shouldn't do anything to improve the situation, but I think it's quite different from what the FTC did today.
Ah, I was specifically talking about Sonic Fiber, which is 1Gbps (but apparently exists in a 10Gbps variant for businesses as well). Too bad it does not service all of SF so far.
I live in San Francisco, and my only option for high-speed is Comcast. AT&T's fiber trunk runs a block away from me, but they are unwilling to run fiber to my home, and have suggested it would be several tens of thousands of dollars if I were to get it done myself.
the main point of loyalty cards was (and still is) data collection (which you've managed to work around) but they are also being used to help condition the public into accepting the idea that some people get (or even "deserve" to get) different prices than other people for the exact same items because of who or what they are.
Businesses always try to frame this as allowing them to offer "deals" to you, but honestly what they want is to raise prices just for you. They stand to make a killing on personalized dynamic pricing. It could massively inflate their profits (entirely at your expense) but what has been standing in their way so far is that consumers find personalized pricing to be invasive, unfair, and discriminatory. Businesses are working very hard to get the public to accept personalized pricing though and loyalty cards/programs are seen as a way to help that.
Unless you like being ripped off and being taken advantage of, try to resist and push back against personalized pricing when you see it.
As someone who worked at Kroger ~10 years ago, even then credit cards were probably only 60-70% of payments. A lot of cash and checks. The loyalty programs had their start when it wasn’t quite so easy to track purely via payment. Also helps to connect a person with a definite address to mail brochures/coupons to, and to link accounts when someone changes credit card numbers, etc.
> credit cards were probably only 60-70% of payments
Do you think it's still that way today? I really have no idea. I worked grocery 20 years ago and remember being amazed how many people pay cash. I can't remember the last time I've seen someone pay with a check at the grocery. I see cash here and there, but mostly credit or tap. But I have no idea what the breakdown would be.
I don't see how they would be considered "unfair competition" under any meaningful definition of "unfair competition" (ie. something that isn't just "bad for consumers"). It costs nothing to sign up for loyalty programs, and being in a loyalty program doesn't hinder your ability to comparison shop or go to the store with the best deals. Yes, it does require you to jump through hoops to get the best price and is effectively price discrimination, but I don't see how it's any different than other forms of price discrimination (eg. having rotating specials so you're forced to plan ahead and/or stock up).
It would probably be a stretch and overreach, but the angle I would take is that they are competing not on the merit of their products.
Consider airline miles. Each time I purchase a ticket, instead of choosing the best deal (fair competition), I am incentivized to choose an airline I have chosen in the past so as not to fragment my points across several accounts. And of course, these "rewards" are all a price passed on to the consumer.
I have been buying flights for 20 years and not once has that crossed my mind.
It goes:
Number of stops -> arrival/departure time -> layover time -> cost.
I also feel like I only ever have 1 nonstop flight option, maybe 2. Maybe the biggest airports have sufficiently redundant flights, but even then, surely most people know points are worth 1% at most, and in my experience, flight prices differ by hundreds.
I would be confused if I learned people were buying flights based on points/miles. I assume the miles/points are mainly utilized by very frequent travelers, or people using credit card rewards.
For anyone not getting the cultural reference, it's due to a 40 year old pop song that used that phone number (as one belonging to a Jenny to be called "for a good time").
In the overwhelming majority of US television and movies, onscreen phone numbers are of the form 555-xxxx to prevent clashes with those telecoms actually hand out. However, numbers of the form 867-xxxx are perfectly valid; and when Brown University made the mistake of handing out 867-5309 to an unfortunate dorm room around 1999 or so, those people were deluged with phone calls asking for Jenny.
Hate to break it you, but that particular Mike Jones (who?) masterwork is nearing voting age.
Mr Jones also included the area code, didn’t repeat the number in the chorus, and didn’t put it in the song title; and “Back Then” also wasn’t nearly as ubiquitous.
That's a 415 area code number, and because Jenny has lived in Marin County the entire time (since 1981) she has never suffered an area code change like many in the Bay Area have over the years. ;)
I wonder if some stores flag it. I've used it a lot with success, but once in a Walgreens they asked me for the name on the loyalty account after I punched it in.
> I think the parent comment was talking about a loyalty card discount at a supermarket
They are & so is the parent of your post. In the US, it's common for supermarket cashiers to lookup loyalty cards by the customer's phone number. The comment you replied to is saying that the phone number <area-code>-867-5309 is almost always tied to an existing loyalty card. Lots of people just give that phone number if they want the discounts without signing up.
Why should they give you a "deal" that they do at a loss or near-loss if you aren't willing to sacrifice the necessary currency for it?
Allowing people who don't care about their privacy to sell it seems like a fair transaction. Sabotaging capitalism & markets by not allowing consumers and producers to engage in barter seems inadvisable.
I personally care about my privacy, so I choose not to use overbearing services. I don't think that I should rob others of the ability to trade their privacy for better deals.
I see it as a dodge around unit pricing. Every price has the price per item and the price per 100ml/100g/whatever is appropriate. It's the law that applies to all shops that aren't small.
Easy to compare, until you come to the discounted prices which don't have unit prices printed. They can be multi buys, Clubcard offers, bundles, or whatever.
No. By allowing the practice, people who are okay with being stalked get compensated for their value. People who don't consent to the transaction in question are not a party to it, and are not being taxed; they're paying the regular price.
No. The "regular" price is whatever people not opting into stalking are paying. Capitalism is based around supply and demand, and people who don't want to be stalked are willing to pay more. That's not an upcharge. That's the default price.
Part of the deal everyone's living under is that we live under a system of rough supply and demand. Selling something for what people will pay for it is not a shell game, it's basic economics. The price for people who choose not to be stalked is the default price.
When pretty much no one pays the ‘default’ price it loses relevance.
In fact, when almost everyone pays the ‘stalking’ price, even when they obviously don’t want to be stalked and go out of their way to screw with the program and attempt to stop the stalking, your comment seems to completely ignores actual reality, which is heavily influenced by marketing, social pressures, price pressures, etc?
You know, actual market forces in a capitalist environment?
A shell game is one where misdirection is used to point someone towards an option which benefits the person running the game if the other player chooses it, by hiding the actual choice they want through confusion and obfuscation.
Seems like a perfectly appropriate description here?
> Allowing people who don't care about their privacy to sell it seems
like a fair transaction. Sabotaging capitalism & markets by not
allowing consumers and producers to engage in barter seems
inadvisable.
This seems intuitively free and fair, but the same sentiment is the
centrepiece of John Stuart Mill's (problematic but fascinating)
examination of Harm Principle and limits of personal liberty.
Namely; not being able to sell yourself into slavery.
Ordinary people (in the technological age) are not really capable of
understanding or valuing their privacy and weighting the consequences
of trading it. For the same reason we don't allow children to enter
contracts I think it could fairly be said the average adult doesn't
have capacity to "trade their privacy".
I don't know about this specifically, but my guess is that when loans are cheap it is much easier to perform a leveraged buyout: taking out a loan on the assets of the company being acquired.
I wouldn't even rate the app store duopoly in my top 10 to go after to be honest. Things like the Luxottica group seem like much higher priorities to me.
Given what we saw in Netherlands with the dating apps this isn't going to make a single bit of difference.
Yes Apple may be forced to allow alternate stores and payment methods. But they will still collect their percentage (in Netherlands it was standard 15% - 3% discount). What happened of course is that apps ended up being far more expensive on alternate stores than on Apple's one.
And even worse for alternate stores is that it would be quite likely for technical reasons that your app could only be sold from one store. Which means you would have to give up the distribution of App Store for your largely insignificant one.
What platform? I already paid Apple for my use of iOS when I bought the phone. Are you implying people should pay Apple for making apps that call up iOS APIs? APIs that all the people who bought the phone and own a copy of iOS already paid for?
As a customer you are implicitly if not explicitly buying an iOS device with the understanding it can only run iOS Apps.
Apple's APIs are proprietary, and they charge 15-30% of all digital sales to to build an iOS App. This is not different than Epic charging X% for use of the Unreal Engine's APIs to build a game.
That said, I would like to see Apple forced to document their hardware, and allow dual booting to other operating systems on their devices. While iOS can be AppStore wall garden, it should be possible for me to install Linux or Android on my iDevice / MacBook.
> This is not different than Epic charging X% for use of the Unreal Engine's APIs to build a game.
It is completely different. You are distributing the Unreal Engine with every game you make. You aren't distributing any proprietary code with your iOS app, it only calls up APIs that are already paid for by the user and for which the user already has a copy.
A good analogy would be me making a new control panel for a mechanical machine, where the panel has metal arms and rods that connect to the machine's original mechanisms to bring about a certain result that the machine itself would be incapable of bringing on its own.
You wouldn't say I can't distribute that new panel I made because the original machine is patented, right?
Well yeah. In this case I'm afraid you're wrong. You don't violate patents or copyrights by making something that's compatible with a copyrighted/patented work, insofar as you don't violate the copyright/patent.
Having your code call an API is not a copyright violation.
It’s not possible to call Apple’s APIs without their SDK and the SDK is closed source and distributed with the App.
Apple is within its rights to request compensation. You could try to reverse engineer them, but then Apple might: 1. Sue for copyright infringement. 2. Continually change iOS so syscalls require a signed certificate in the SDK.
It’s effectively impossible to get around their copyrights on iOS and as such it’s not very different to the licensing and compensation of the Unreal Engine.
All this said, I really would prefer Apple to document and encourage Linux on the iPhone as a secondary boot option (along with a voiding of the device’s warranty). That way iOS would be locked down but other OSs on the iPhone would not need to be.
And they will continue to do so as long as corporate america is as lawless as it is. The FTC can't enforce the rules on everyone at the same time, so they have to choose their targets. And why should businesses play by the rules if in another 8 years at the most the FTC will be gutted again and the spectre ofenforcement disappears?
The only way for this to change is if the corporations start skirting on the right side of the law, and they won't do that voluntarily unless the risk is sufficiently high (see e.g. Sarbanes-Oxley). Don't blame the FTC, blame the purposeful undermining by alternating administrations.
I'm sure that this won't be applied to Amazon, Apple, Google - those donate to the right people. Pretty sure this will be applied to the Kochs, Exxon, etc.
They all deserve it, of course, but there's a finger on the scales of justice and has been since the 90s.
Neither; things like this are planned and scheduled on slower timescales than news cycles.
This one is likely due Biden being done his "settling into office" period, and having begun (over the last 6–12 months) to push regulatory agencies under the executive into more democrat-oriented stances.
If there was any recent event that caused the FTC to (be told to) "pull the trigger" on this, it was the midterm election effectively "taking the temperature of the country", and finding enough confidence remaining there to push through things like this without being likely to set off widespread discontentment in the news media.
1) If your costs are legitimately less than the competition then charging less is not illegal. If you're taking a loss to gain market share and then upping the price once the competitors go out of business that's a problem.
2) Have you seen gas stations? If setting your price to be the same was illegal there'd be so many convicted people.
3) I don't remember profiteering being illegal. Literally a ton of companies have been recording record profit and certainly people have been complaining but who was fined/imprisoned? Martin Shkreli wasn't convicted of profiteering cause it's not a crime.
Sold after they were practically run out of business by Amazon's pricing.
> Quidsi could now taste its own blood. At one point, Quidsi executives took what they knew about shipping rates, factored in Procter & Gamble’s (PG) wholesale prices, and calculated that Amazon was on track to lose $100 million over three months in the diaper category alone.
You're right it has not been demonstrated. Maybe some governing body should investigate and come to a conclusion about whether Amazon engages in unfair methods of competition such as what is purported by Quidsi.
Is a retailer now obliged to run every single product they sell at a profit? So Costco can't do their chicken deal (which costs them millions and customers love), nobody is allowed loss leaders?
I'm saying: Amazon's diaper thing was the same as Costco's chicken thing. Retailers shouldn't be obliged to run every single product at a profit just in case there is a single product retailer.
I'm saying that no one ever said you shouldn't be allowed to do loss leaders. Predatory pricing is a specific set of actions in a specific context that happen to do with selling products at a loss for a period of time.
e.g. Driving a car is legal, driving the getaway car for a bank robbery is not.
I believe you have a good understanding of the nuances here. But I also believe that the nuances can be used by career hungry folks at the relevant agencies to bring bogus cases against companies almost at will (current case against Meta is an example) and any extra power granted (or taken) is a bad thing.
> 2. same as the competition - collusion, price fixing
Only true if you arrived at those prices via collusion
> 3. higher than the competition - gouging, profiteering
In the US gouging is pretty much always legally defined as "raising prices by [xx%] in the immediate aftermath of a civil emergency on necessary items". People might use the terms colloquially but that doesn't make it illegal.
> Only true if you arrived at those prices via collusion
The same prices is evidence enough of collusion to file charges.
> In the US gouging is pretty much always legally defined as "raising prices by [xx%] in the immediate aftermath of a civil emergency on necessary items"
I.e. they can file such charges whenever they like. Note that this does not take into account the cost of supplying these goods.
First of all, the article (and original source [1]) doesn't actually discuss pricing. Page 12 starts a list of historic examples, none mention pricing.
Important quote (page 8):
> "The method of competition must be unfair, meaning that the conduct goes beyond competition on the merits. Competition on the merits may include, for example, superior products or services, superior business acumen, truthful marketing and advertising practices, investment in research and development that leads to innovative outputs, or attracting employees and workers through the offering of better employment terms."
Second of all, this is intentionally one-sided perspective to say all are illegal (its not). Personally, I say screw the giant corps, do what's best for people in society, even at the expense of profit margins. Why do we sympathize with giant corporations? With inflation rising, IMO we should expect that business take smaller profit margins to keep prices from inflating higher. What is the harm in shareholders missing out on profits a bit in 2022? Surely less to society than all the lower-income folks missing out on buying food.
To address the "all three prices are illegal" point (which, again, is not true)
1. If you price your product at a loss in the attempt to drive your competition out of business, then maybe this applies, but only maybe.
2. Only if you actually collude/price fix. You can find the same natural market price as competition without collusion. Coffee shops sell coffee at similar prices because the all the businesses have similar costs, and consumers have a limit to their willingness to spend.
3. Only if you do it under limited circumstances. Price gouging is rare. BMW doesn't price gouge for selling more expensive cars than Toyota, but buying 100% of the supply of a drug and 100x'ing the price just to make more money is bad for society, and more likely to be price gouging.
Giant corps are the engines that drive the economy. Take them away, and you've got an economy in the dumpster. (Small businesses are the future. A healthy economy requires both.)
> we should expect that business take smaller profit margins to keep prices from inflating higher
Businesses neither aid nor retard inflation. Inflation is a monetary phenomenon caused by deficit spending. If you want less inflation, vote against the deficit spenders.
> which, again, is not true
Amusingly, your exposition admits they are all illegal, although selectively applied. Mostly for BS reasons, like Microsoft being charged with giving away a browser for free (no harm to consumers was ever established).
> Giant corps are the engines that drive the economy. Take them away, and you've got an economy in the dumpster.
I didn't say take them away, I said don't prioritize them. There is no reason to cater to big corporations. No one will voluntarily not make more money, so there is no reason to assume that regulation will disincentive growth. Same way taxes don't stop people from wanting to make more money.
Make corporations do things that are in societies interest, not their own. Why do we require people to sign up for the draft or pay taxes? Not because people want to enlist, but because its good for society. Why do we require drivers licenses and car insurance and air bags? Because having competence and protections is good.
> Businesses neither aid nor retard inflation.
Today, there is record inflation constantly in the news. Many businesses are also posting larger profit margins. We could lower prices closer to their pre-inflation values if they lowered their profit margins to pre-inflation values too.
> your exposition admits they are all illegal, although selectively applied.
Yea, thats the difference between legal and not illegal in most cases?
Driving 50 mph is illegal in a school zone but not a highway. Its even more illegal to drive 50 mph into a group of children crossing the road in said school zone. The laws protect against behavior that is bad in a certain context.
> Mostly for BS reasons, like Microsoft being charged with giving away a browser for free
The Microsoft case rested on the fact that bundling the product restricted market entrants ability to compete, not on pricing.
> (no harm to consumers was ever established)
Thats not necessary to prove anti-competitive. Anti-competitive is when you're bad for competition not consumers. Specifically, the FTC claims that their purpose is to prevent monopolies, not to prevent consumer harm...
> ...the legislative history is replete with statements to the effect that Congress wanted the FTC to stop monopolies in their “incipiency"...
> We could lower prices closer to their pre-inflation values if they lowered their profit margins to pre-inflation values too
That's a fantasy. Communist countries have inflation, too (and higher), and the industries don't make any profits.
> Yea, thats the difference between legal and not illegal in most cases?
The difference here is extremely subjective. Selective prosecution is a real thing, and it's not about whether a crime was committed or not.
> The Microsoft case rested on the fact that bundling the product restricted market entrants ability to compete, not on pricing.
It was about giving it away for free. (Microsoft never tried to prevent Netscape from running.) Note that everybody gives it away for free today. As for bundling, operating systems have always "bundled" all sorts of programs and utilities. My Kindle even comes with a browser "bundled" into it. Oh, the humanity!
Apple's walled garden ecosystem is far, far more anticompetitive than MS and Explorer, and not a peep from the Justice Dept.
> Specifically, the FTC claims that their purpose is to prevent monopolies, not to prevent consumer harm...
Or maybe Bill Gates did not acknowledge the authority of the FTC and the FTC decided to show him who's the boss. This is not unfounded, there was a fair amount of talk about that at the time.
All potentially illegal, but more often legal and not even controversial. The important distinction is whether the prices were set to maintain or exploit a non-competitive situation, vs. to compete in a still fair/open market. There's no issue with undercutting competitors if they exist. There's no issue with charging a brand premium. In either case, competitors can respond as they see fit. It's only when there are no competitors that these choices deserve scrutiny.
Clearly the answer is a price that isn't disclosed online, and requires the customer to fill out a form disclosing their name ("ethnicity"), address ("socioeconomic status"), and title/company ("education level") before they can receive a quote on the item. /s
There is also an interesting bit of back-and-forth between the dissent and one of the supporting statements: https://www.ftc.gov/system/files/ftc_gov/pdf/Section5PolicyS...
I'm still inclined to think it's a good thing. I'm not educated enough on this topic to agree or disagree with any of the commissioners' opinions, but the FTC is clearly interested in sending a signal to the public.
I'm moderately optimistic, although it will be interesting to see what happens after the next presidential election. It's possible that the commissioners are concerned about it, and are trying to make some kind of mark and set precedent before they're all fired and replaced if a Republican (Trump?) takes office in 2024.