re: Anti-trust laws have been used for AT&T, MS, Std Oil. Why not Google, Facebook, etc.?

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Maybe stop looking for the snarky answer and address the actual issue I raised rather than the one you think I did.

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I wasn't being snarky.

Facebook and google aren't necessary. Your life won't change one bit if they become more of a market share because there will always be competition coming along and,they are free services.

Amazon is the elephant in the corner. They are buying up the competition and are(by optics) looking to corner the market on internet buying.

If they decided to buy UPS they could control a lot of purchasing options.

Kind of like AT&T/Directv looking to buy time Warner

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Facebook and google aren't necessary. Your life won't change one bit if they become more of a market share because there will always be competition coming along and,they are free services

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Respectfully (and I mean that sincerely), you are not talking about the same issue I am.

You are talking about where a consumer spends his time.

I am talking about where a company chooses to spend it's online advertising money. It is definitely not a free service.

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AbuTheMonkey

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Fair enough. Whack away.

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Hopefully something can be done with YouTube or a new platform emerges. They actively demonitize pretty much anything conservative related or any hunting/firearms related videos

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Wtf?

Yep.

They also have recently given out channel strikes to gun channels for stuff like reviewing a collapsible stock. Once you get 3 channel strikes your channel is permanently banned from YouTube

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Abu - here's what Standard Oil Trust of NJ did -

a town has 3 service stations, selling gas for 30 cents. SO comes to town, and charges 26 cents. The 3 incumbents stations go out of business in the price war. SO ups the new rate to 34 cents. Rinse and repeat in town after town.

Anti-trust took the name from the term "Trust" in the SO name. The Sherman Act of 1890 law nowhere mentions "trust"

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That economic activity is generally what the Sherman and Clayton Acts try to prevent.

A good local level example (and one that hopefully illustrates the problem in defining markets) is with local providers in healthcare: if there are three ortho practitioners in town, and they all merge, what generally happens?

Prices rise, usually by a decent bit. But how exactly do you define that market?

Courts and economists use what is called a SSNIP test to actually define the market in these cases.

They were using an outdated model (Elzinga/Hogarty) until relatively recently, and it led to what are, probably (though, not definitively), some pretty shitty outcomes.

Consumer behavior just isn't nearly as well-defined in a lot of markets as it was originally used in the E/H model (which was originally developed for coal markets). They started multi-staging their assessments - determining exactly where on the value chain the price transactions were most important and where the "cognizable differences" were. That has broken down the old model of determining "micro-monopolies", if you will. How exactly does one determine the "market" for a local orthopedic surgeon?

Expand that model out further, and you see how difficult it can be for even brilliant people to actually define these social media or search platforms' markets. Facebook and Google essentially created markets out of thin air. Virtually all of the economic value for both of them was consumer surplus until very recently, so how do you even begin to approach that from an anti-trust perspective, particularly when both services were and still are free?

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But if ad buying is a qualifier then Budweiser would have to be broken up.

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I don't get the analogy. Budweiser is a producer. How much ad space they buy has no affect on other brewers.

If I want to reach an audience online, I generally have to pay Google and/or Facebook.

You could argue that what they do makes my life much easier, which is closer to the Amazon analogy. That Prime is a hell of a drug.

How does the Bud analogy apply?

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AbuTheMonkey

Fair enough. Whack away.

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The core issue is where is the surplus is accumulating, who is defining exactly what is the consumer/producer surplus, and (again) how we are defining markets.

Is Facebook purely a social media company? Are they a data mining company? How do you even define social media? Who are their competitors - is it only LinkedIn, Twitter,SnapChat, Weibo, etc.? Or is it broader and more data-oriented like YouTube, Uber, Amazon, Walmart (seriously - huge player here), big consulting firms like Deloitte and Accenture, Microsoft with Skype, etc., etc.?

These aren't easy questions to answer.

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Abu - here's what Standard Oil Trust of NJ did -

a town has 3 service stations, selling gas for 30 cents. SO comes to town, and charges 26 cents. The 3 incumbents stations go out of business in the price war. SO ups the new rate to 34 cents. Rinse and repeat in town after town.

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This is not true. Prices plummeted and stayed low throughout the standard oil "monopoly". They out competed their competitors, but never jacked up prices in "town after town". Actually, his business model was to win by providing better products cheaper than everyone else.

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Interestingly, a careful reading of the decision reveals that no attempt was made by the Court to examine Standard’s conduct or performance. The justices did not sift through the conflicting evidence concerning any of the government’s allegations against the company. No specific finding of guilt was made with regard to those charges. Although the record clearly indicates that “prices fell, costs fell, outputs expanded, product quality improved, and hundreds of firms at one time or another produced and sold refined petroleum products in competition with Standard Oil,” the Supreme Court ruled against the company. The justices argued simply that the competition between some of the divisions of Standard Oil was less than the competition that existed between them when they were separate companies before merging with Standard.

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Foundation for Economic Education

You are repeating a version of this story that has little basis in fact. If you want to argue that being so good that a company can own 90% of a free entry market is a bad thing, go for it. Consumers were quite happy that their costs were reduced dramatically and the quality of the products increased dramatically.

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John McGee, who studied the Standard Oil case in unprecedented depth, reporting his results in two seminal Journal of Law and Economics articles, contrasted its role as the legendary "archetype of predatory monopoly" in the public imagination with the evidence, and determined that "Standard Oil did not use predatory price cutting to acquire or keep monopoly power."

McGee also went further than the specific evidence in the Standard Oil case to show that even if a firm intended to monopolize an industry, the predatory pricing "story" as a means of achieving it was riddled with logical holes. (That is, predatory pricing costs the supposed predator far more than it costs the prey, who can further expand the cost difference by temporarily shutting down. Unless the predator is allowed to buy up a victim driven to bankruptcy, others can buy up those assets cheaply, thus allowing them to again compete with the predator and reenter effective competition. Without the ability to prevent entry once monopoly pricing is attempted, the monopoly payoff disappears. Because it requires monopoly power to finance predation, predation cannot be the source of monopoly power.)

McGee drew two particularly important conclusions.

"I doubt that predatory pricing is, or is likely to be, or has ever been a significant clog on the competitive process."

"If the popular interpretation of the Standard Oil case is at all responsible for the emphasis that anti-trust policy places on 'unfair' and 'monopolizing' business practices, that emphasis is misplaced."

In contrast to the predatory harm to consumers alleged against Standard Oil, what actually happened?

The mechanism of predatory exploitation of consumers requires substantial monopoly power that is used to increase prices, thereby reducing the outputs sold. But Standard Oil had no initial market power, with only about 4 percent of the market in 1870. Its output and market share grew as its superior efficiency dramatically lowered its refining costs (by 1897, they were less than one-tenth of their level in 1869), and it passed on the efficiency savings in sharply reduced prices for refined oil (which fell from over 30 cents per gallon in 1869, to 10 cents in 1874, to 8 cents in 1885, and to 5.9 cents in 1897). It never achieved a monopoly (in 1911, the year of the Supreme Court decision, Standard Oil had roughly 150 competitors, including Texaco and Gulf) that would enable it to monopolistically boost consumer prices. So it can hardly be argued seriously that Rockefeller pursued a predatory strategy involving massive losses for decades without achieving the alleged monopoly payoff, which was the source of supposed consumer harm.

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Mises.org

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The number of companies responsible for delivering information, communication, and entertainment in this country continues to plummet. If one added up the parent companies of 90% of terrestrial radio stations, newspapers, and cable tv networks, plus the largest search engines, internet service providers, cable companies, mobile phone carriers, record labels, and movie studios, you're looking at not even 2 dozen companies, and every year, that number seems to drop.

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Comcast bought NBC and tried to buy Time Warner. After the merger failed, Charter ending up buying Time Warner. AT&T just bought DirecTV and are attempting to buy a separate division of Time Warner (not the one Charter bought). T-Mobile and Sprint are in the process of merging and Charter is now talking to Cox about a merger.

shite's out of hand. Before long we will have one super company owned by Comcast.