Tuesday, April 26, 2016 [Tweets] [Favorites]

Antitrust and Aggregation

Ben Thompson:

The Play Store is the one part of the Google Mobile Services suite that is irreplaceable and thus the leverage enforcing the various requirements the [European] Commission objected to, like making Google Search and Chrome defaults, and forbidding AOSP forks.

[…]

This monopoly, though, is a lot different than the monopolies of yesteryear: aggregators aren’t limiting consumer choice by controlling supply (like oil) or distribution (like railroads) or infrastructure (like telephone wires); rather, consumers are self-selecting onto the Aggregator’s platform because it’s a better experience. This has completely neutered U.S. antitrust law, which is based on whether or not there has been clear harm to the consumer (primarily through higher prices, but also decreased competition), and it’s why the FTC has declined to sue Google for questionable search practices.

[…]

One more implication of aggregation-based monopolies is that once competitors die the aggregators become monopsonies — i.e. the only buyer for modularized suppliers. And this, by extension, turns the virtuous cycle on its head: instead of more consumers leading to more suppliers, a dominant hold over suppliers means that consumers can never leave, rendering a superior user experience less important than a monopoly that looks an awful lot like the ones our antitrust laws were designed to eliminate.

Comments

Stay up-to-date by subscribing to the Comments RSS Feed for this post.

Leave a Comment