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Should highly profitable monopolies like Facebook and Google be handled differently than other companies?

Sometimes monopolies are natural and good for consumers. For example, you'd prefer to join social network that has all your friends, a dating site with lots of members, a business networking site with lots of connections, or a shopping site that sells everything. Governments typically step in to break apart monopolies when they financially harm consumers by pricing their products or services higher than otherwise would be with competition... especially when the product is a commodity. Breaking up natural monopolies can result in a worse situation for consumers - would you want to find your friends across 5 mini-Facebooks? Additionally, since Facebook and Google give their services away for "free", governments are at a loss to find a victim. However, the services are not free as consumers end up paying higher prices to buy the advertiser's products. As the cost of running these services is far less than ad revenue, the gross profits soar as shown below.

Monopolistic profits of tech companies should be...

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Admin 8 July 15
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9

Monopoly [economictimes.indiatimes.com]

Definition: A market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute.

Description: In a monopoly market, factors like government license, ownership of resources, copyright and patent and high starting cost make an entity a single seller of goods. All these factors restrict the entry of other sellers in the market. Monopolies also possess some information that is not known to other sellers.

Characteristics associated with a monopoly market make the single seller the market controller as well as the price maker. He enjoys the power of setting the price for his goods.

I can think of pharmaceutical monopoly that fits the definition and description above, but Facebook and Google...? Are we talking about a different kind of monopoly?

Naomi Level 8 July 15, 2020

Both take take the majority of their revenue from advertising. Between them, they control the majority of online ads. Twitter is a distant third. Google 's marketplace is allegedly open to all, but it favors its own properties and takes a big cut from others. So, the two account for what is an anti competitive duopoly. We've had the so called brilliant people in Washington insist a duopoly is a competitive market, but in practice that's never the case. Anyone trying to offer a competitive "free" is at an extreme disadvantage as a result. So Google owns the market for it's suite of generic services and Facebook owns its. The world is full of very smart people that could do better, but with no access to ad revenue, it's nearly impossible to compete.

5

Beware the curse of unintended consequences when you begin tinkering with “monopolies” (which are different things to different people).

Remember the old railroad monopoly? Along came aircraft. How about the Bell monopoly. Wall phones and Yellow Pages died a quick death. FB, Google and Amazon have limited life spans. Netflix already looks less and less like a monopoly because everyone is streaming now.

If you invite politicians and bureaucrats to start messing with groundbreaking tech companies that are the envy of the rest of the world, you’ll do more harm than good. Remember when everyone wanted FB and the others to be more responsible for content? What we ended up with was one-sided censorship.

There’s lots of room for improvement. But tread carefully.

GeeMac Level 8 July 15, 2020
5

Facebook, Google, Twitter, etc... is today's AOL. The true democracy of an open and free market is the best way to serve the public's interest. If you don't like them then vote against them by not using them. It should be recognized that when you engage in a "free" service like these, you and your information is the product being sold to their customers, the advertisers.

I would hold Amazon as a separate category.

4

Constitutional principles cannot foresee every human eventuality, including monopolies. So Congress must make laws and the Supreme Court must interpret them to address the challenges to free enterprise that monopolies present.

Many times very powerful monopolies have greater financial power than the government and successfully defend challenges to their monopolies, not based on the best interests of free enterprise, but because the government can't afford to prosecute. Microsoft is the best example.

Microsoft successfully drove better technologies and products out of business. Companies like WalMart have driven hundreds of "mom&pop" hardware and other kinds of stores out of business across the nation. There are dozens; maybe hundreds of other examples. Was any of that better for the American consumer in the long run. I say no.

driving personal information for targeting. we are already on an alternate discussion forum. seems like spiketalon is the driver on my recent posts bell. it is pretty easy, it would seem, for one or two people to drive info in a way that produces calculated responses. i do appreciate the aggregation spiketalon does throughout the day, but I find it pestering when looking for conversation, but partially necessary. similarly, i say to facebook spying over my microphone and targeting me with ads based off of discussions I have with my doctors and friends. that type of monopolistic targeting makes me distrustful of these data corps with open relationships to the 3 lettered agencies like U.S.A.

4

I think taxation is a mute point when you allow the companies to operate like Gangster outfits. If you came into my shop and I slipped a bug into your pocket to see where you went shopping next and find out where you live etc then sold the info on would you be OK with that? Or that you get wacked if you didn't pay the proper poitical homage to the "tech Godfather"? Or just decide not to pay you if you don't have the right message/connections(De-monetising)?

Social Media are reverse search engines, rather than search the net to get you info they search you to provide the net info. This is the area that Governments need to get a grip on first before using monopoly laws to target the companies structure and market share.

Love the idea of social media as reverse search engines. 👍

4

Live by the sword, die by the sword. The same people who want the rich taxed and monopolies broken apart want some sort of special religious type of dispensation for social media giants. Why? Certainly not out of any principled position. They like them because they agree with them.

This is why socialism always ends up worse than free market countries. They pick winners and losers and usually the winners are total losers.

4

Don't think more taxes are the answer. Then again, can't say I'd feel sorry for organizations like Facebook if they would have to pay higher taxes. Valid point, Facebook and similar organizations do make considerable revenue from ads.

3

Decades ago, they broke up "Ma Bell," the phone company. Opponents of this move tried to claim that we would no longer be able to make calls to people in the new, broken-up companies. In spite of the dire predictions, we never stopped being able to call one another.

If Facebook is broken up, the new companies could collaborate to make profiles visible within all of the platforms. What would change is the rules of each small company. Each would have different rules about allowed content. One or two would be run as the current Facebook is run. They would continue to stifle any discussion that didn't abide by what Zuckerberg wanted people to be able to say. They would continue the COVID-19 hoax. They would continue supporting the BLM and Antifa terrorism. Other companies in the group would be run more along the lines of a conservative version. They might impose a conservative slant on anything allowed on their profiles. Others would have more of a free speech ethic. They would allow people to post anything they wanted as long as it was not directly threatening to anyone. To some extent, each sub-company might not allow certain content to reach their members, but they wouldn't have the power to restrict what anyone belonging to the other companies posts. The leftist version might cover certain memes or stories with their "fact checker" filters for people viewing those memes or stories on the leftist versions, but they wouldn't be able to impose that censorship on the right wing or free speech versions. Likewise, the right wing version might put some kind limiting filter on some leftist content, but that wouldn't stop a leftist from sharing that information freely with others on the leftist or free speech version.

Breaking up YouTube would have the same effect. Different YouTube companies would be able to offer different algorithms for showing videos in the feed. Different YouTube companies would have different standards for allowable content. Right now, YouTube doesn't allow videos that show how to take apart and clean a firearm. In a broken up YouTube, there would be a sub-company that would allow that kind of content.

People on every side would be frustrated that they couldn't impose their filters on everyone, but people who are tired of being filtered and prefer to handle filtering by blocking people who are stupid would be able to post what they want and block what they don't want to see.

2

Neither of these companies are natural monopolies. And frankly, I do not believe that such a thing exists. Any business improves from rigorous competition for customers. Both Goolag and Facebag have been extremely predatory in wiping out competition. At a very minimum, they should be barred from any award of government contracts until they spin off or sell anti competitive business units such as Google's ad marketplace. And if they censor any content that is legal, they should be treated as PUBLISHERS and prosecuted to the full extent of the law for publishing content that incites violence, unlawful activity, etc..

2

Just end censorship everywhere with the obvious exceptions of hardcore pornography, calls for violence or other criminal behavior, I wouldn't even mind profanity being limited. Congress could easily pass an internet bill of rights and While their at it make it illegal for financial institutions to deny services for non financial and non criminal behavior.

wolfhnd Level 8 July 15, 2020

Are profanity and hardcore pornography not part of freedom of expression?

@JacksonNought
If it involves children or any other incapable people.... yes. It should be banned... I have not made up my mind about animal abuse yet... and what should be considered as that.
Otherwise hardcore porn with consenting adults should not be illegal.

@Hanno we can agree there.

@JacksonNought

Is profanity actually necessary to express yourself. It doesn't offend me other than it is not an argument.

@wolfhnd is it necessary, no. Should it be censored, also no.

@JacksonNought

Free speech requires an environment of civility.

2

No. They should have to obey our laws like anybody else. Just because they're huge it doesn't make them special.

2

Taxing a business is just a tax on the consumer using more bureaucracy. It is also a wan for politicians to obtain more graft and promote more corruption.

2

Simple. Don’t tax companies Or businesses at all.

You individual tax wealth progressively. Everything is owned by someone.
Let people become as rich as they want.
You tax income at a flat rate of 20%.
You tax all sales at a flat rate of 10%.
You tax all wealth less that $1m at 0%.
Tax wealth over $1m at 0.5% pa.
Tax wealth over $10m at 1% pa.
Tax wealth over $100m at 2% pa.
Tax wealth over $1000m at 5% pa.

Pay everyone a flat UBI of $200 per week. Too little to live a nice live, enough not to starve.

You can adjust the number up and down yes, but the principle applies.

Apply free market capitalism.

The problem will resolve itself.

Hanno Level 8 July 15, 2020

If some superhero could simplify the tax system it would solve so many problems! I’m not optimistic we’ll ever see that level of government sanity.

2

Are these true monopolies or virtual monopolies? Do FB, Twitter, etc pro-actively prevent competition? I think those are key questions. Because I loathe those platforms, I made the choice not to use them. If they were a necessity on the same level as water, electricity, sewage, etc I'd have a different opinion. But as long as they're not unfairly tilting the playing field in their favor, I see no need to penalize them.

I'm not sure how things are defined. The big players don't prevent competition so much as buy the competition if it proves irritating?

@govols That's a good example of what I would call unfair monopolistic practice, but the question is, what would the courts say?

2

Regulated as a service.

1

It's very hard to remember that time when facebook, twitter, youtube, and all the major platforms just were starting. For some people, they weren't even alive then. I remember having a Myspace page for a second and then I was 100% committed to facebook. Facebook made some extremely powerful connections. The corporations and high profile individuals tend to operate in a kind of "one mind set" that is very biased.

These platforms started as the newest way to be in touch with friends and family. Then they evolved into the most used political platforms for both the United States as well as much of the world. It's hard to sometime remember that even with the amount of people who use these sites still only represent a fragment of the worlds population.

So, I feel taxing or any other kinds of operational regulations is kind of moot. It won't create the kind of truly non biased moderating of content some are looking for. Because the ones in charge of these sites have their own definition of non biased as well as what they consider factual information as well as hate speech.

I left facebook 5 years ago and only use other platforms for hobbies. It's been hard trying to find an open minded and non biased site to go to. Yes, they are still small. And it's hard knowing hardly if any of your friends and family members are there/ want to go there. But, you got to start somewhere.

I don't think it's out of the realm of possibilities that one or more platforms can rise to be a significant competitor. I remember a ton of people had zero desire to join Twitter. And look where Twitter stands today.

So, I'm leaning toward instead of trying to fix these sites, just to leave and find other options. I have seen a few youtubers, facebook users, Twitter etc. get suspended blocked and censored for no reason other than they were "wrong think". When these individuals tried to contact these sites they had no answers back. I don't see them making a sufficient change with the current attitude they have.

I'm unsure if this response accurately answers the questions and points. I'm still nee to this site and am also still seeking solutions to these issues.

1

Enforce the laws we already have and other companies would be able to compete. The reason most tech monopolies exist is because they collude with one another to hold competition down. For example, Gab is banned from the Google and Apple app stores. This prevents a great deal of would-be customers from migrating to it from Twitter. Gab is also banned from all major payment processors. The perfect storm for keeping them from getting a foothold.

I leave you with this interesting video on monopolies:


gadsden Level 4 July 16, 2020

Great video - thanks! Yeah credit card processing and app stores have crazy blocking power.

1

Google and Amazon are different.

Google has been in a self destruct mode for several years now, the end is coming for Google.
See George Gilders book Life After Google
Also do not underestimate the ongoing damage SJW's are doing inside of Google, they appear to be succeeding at destroying Google.

1

Should be taxed based on their gross unadjusted revenue at a 40% rate.

This is about what i was thinking would be fair to avoid breakups so long as these firms also have to remove censorship. They pay less than 20% now.

1

Competition is King, if Facebook, for example, had any serious contender for social networking with the ease of use needed to attract users then millions would have left Facebook already. Google has competition but they've managed to position their browser as the premier one to use. It's not the best anymore and other search engines and better browsers are available. Twitter is now being challenged by Parler, even YouTube can see disturbing competition above their horizon. It could take years to dethrone the current top players in their various spaces, MySpace died pretty quickly once Facebook got traction, Linux is on the rise and is becoming a serious alternative to either Windows or Mac OS. It might only take a couple of laptop companies to fully commit to the Linux platform to turn the tide.

1

I'm with Adam Smith on this one. Free trade is meaningless unless there is fair trade. Monopolies make fair trade impossible, so he advocated for a free market with little regulations unless monopolies show up.

In the case of Facebook, google etc. They need to be held accountable for their interference in the election process, in the discriminator baning based on ideology lines, and censuring of one kind of ideology, one that is officially adopted in Western World and and actively promoting subversive views. and we all know which ones I mean.

Off course being so large, they can buy more political power than others and influence our laws. The big tech all come from same place with same ideologies. The ideologies are not hard to prove that they are not only destructive to established legal and cultural norms but are also self destructive as well. Just look at all the major cities like San Francisko, Seattle, Portland, L.A, New York. Does that look like an ideology under which you want to raise your children? Crime, homeliness, swollen bureaucracy, corruption, welfare states where those that pay taxes pay for those that don't.

1

Largest issue is cancel culture. So yes Google and fb should be abolished

they should cancel google and facebook because of cancel culture!

cancel culture is so evil

@bastion why do you think this.place exists? Large social media was canceling people that never should have in the first place.

As the religious would say, yes it is evil.

Lastly with the 2 largest companies taking up 90% of the market how do you expect for competition to thrive. And not to mention the income of the new age of work?

@IQWisdom Get on gab or parler! these are social media sites for free speech patriots that have cuckbook and gulagoole

1

IMHO most “monopolies” achieve market power as the result of some kind of government assistance, whether by largesse or outright regulation. Railroads and land grants; AT&T and regulation. Facebook by court action (see The Social Network for the Cliff Notes). If you eliminate the advantages bestowed upon them by the government most monopolies would simply whither under the pressure of genuine competition.

1

They shouldn´t be broken up, not even necessarily taxed more, but they should definitely be more strictly regulated.
The law should force them to confirm to the 1st Amendment, in precisely the same way the government has to.

1

You can have multiple phone companies and still talk to each other.

There are several ways to deal with it, given national boundaries and each country having its own stipulations. For Facebook etc the answer would be to have an ombudsman overseeing the company. IOW take the political stuff out of its hands. "Hate Speech" etc, true there is no guarantee that would be more impartial but as a Government agency it should better reflect the political will than the whims of big tech CEOs.

Most federally regulated sectors in Canada (banking, communications, transport) must have an independent ombudsman where complaints can be heard. The effectiveness varies, but it’s a great suggestion.

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