26 Comments
Oct 7, 2020Liked by Matt Stoller

The fact that Google Cloud Platform account is needed to get a google maps account is honestly not a super big deal from a bundling perspective, the map keys had previously been managed in their own weird dashboard that was hard to access, and you always wondered, why the hell isn't this managed the same way as all the other stuff you do in google?

No the thing that's monopolistic is the way they tie together all the various parts of the google maps API, specifically in web browsers and do not let you use them separately. The main parts are

1. A set of basemaps

2. A geocoding service for looking up addresses

3. A directions service for routing from point A to point B

4. A library for displaying maps on a web page.

You are not allowed to load the basemaps, or display results from the geocoding or directions service using any other library, which is often a problem since the google maps JavaScript API has stagnated and not kept up with the features of other map libraries or even with the features on the main google maps website.

The other thing they do is you are banned from saving the results of geocoding or directions queries. If you want to add lat longs to spread sheet of addresses you have, there is no amount of money google will take to let you do that.

That being said in the GIS world they are in many ways the scrappy upstart because the 1000 pound gorilla in the room is the company ESRI which has managed to roll up the governmental mapping space so tightly that many people use the term 'GIS' interchangeably with 'ArcGIS' to refer to their flagship desktop software. The company I work for used to be a business partner with them, until we started doing some google maps work and got ourselves kicked out of the program. When ended up probably being a blessing in disguise since ESRI started competing directly with their business partners for work.

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Thanks, this is fascinating.

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A quick search of https://github.com/openaddresses/openaddresses/tree/master/sources/us shows that at least 60% (1181/1958) of counties in the openaddresses database use ArcGIS. There's certainly more that I didn't catch in my search, because they don't have "arcgis" or "esri" in the URL.

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Oct 8, 2020Liked by Matt Stoller

Hi Matt,

Thanks for the great work in the monopoly sphere, understanding monopoly power has been a great way to expand my knowledge of the economy at large and I'm really glad to see your newsletter is reaching high school age people too!

I work in the advertising industry, specifically film production or content as its now called, video stock footage is a growing business as more and more companies use video as part of their marketing, stock footage can play a part by keeping costs down for small and medium sized enterprises. As someone who both creates the video content and buys it depending on a clients' budget I think it can be very useful.

However today I checked up on the largest name in the business: Shutterstock which provides photo and video content as well as a range of new services. I was considering putting some of our video archive onto Shutterstock in order to make some passive income so I checked the payment structure, to my shock it is volume weighted and extreme! As a content owner/creator you receive between 15% and 40% of the sale, Shutterstock gets between 85% - 60% of every sale - yes you read that correctly, the people that make the thing being sold get a pittance of the sale. In order to get the 40% you need to shift 25,000 clips per year first. Now I know from first hand experience that search-ability for videos is very important, but this price structure seems insane to me as the most work (VALUE) is on the content side. It made me think of the Uber mode and I immediately started to think it has to be a monopoly where content creators cannot go anywhere else. I hope this sparks an interest in you as I'd love to know more.

All the best

Devin Peters

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Thanks. Are there competitors to Shutterstock? Also can you send me an email? I'm at mstoller at economicliberties.us.

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Don't forget somehow Shutterstock is tightly "integrated" into almost all Microsoft applications.

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Oct 7, 2020Liked by Matt Stoller

I'm all for big tech monopolies being broken up although I wonder how the IP will be distributed. For example, if you break up Walmart, presumably lots of companies can perform the same functions since retail doesn't require a specific group of patents. But google, amazon, facebook, etc. - owning the IP is a big part of why they are monopolies. If they are broken down into different lines of business, that's great, but are there plans to require them to license the IP? Is there some prohibition on selling it on? I worry that private equity and/or foreign competitors would try to buy up valuable technologies and create the next google, amazon, etc. outside of US jurisdiction. I don't know anything about the laws and possible solutions, so hopefully someone is on it.. ?  

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Oct 7, 2020Liked by Matt Stoller

Look at what Apple did to manufacturers of Vape products that used apps to control their device. During the vape scare of 2019 they pulled all apps on them. The health concern turned out to be due to illicit THC from the black market but the apps have never been allowed to return. Vaping may be a bad thing but it is legal and these companies have no recourse to recover the capability taken from them overnight by a company with a monopoly on their App Store.

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Hi Matt,

Do give some credit for the norm change to Barry Lynn, who was blowing the whistle by 2008 and shook up many of us complacent economists in 2009 with Cornered, the New Monopoly Capitalism (https://mcleveland.org/blog/index.php/2010/07/cornered-the-new-monopoly-capitalism-and-the-economics-of-destruction-by-barry-c-lynn/.)

Polly Cleveland

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It seems to me that the senate filibuster would, in the consideration of technological antitrust proceedings, accomplish what it is nominally supposed to accomplish. Whereas its use case is frequently more germane, it ostensibly provides for unlimited debate. With an issue as hairy as the regulation of tech giants is concerned, should the senate not deliberate for an extended and public period of time? I worry that a cynicism and an eagerness to see these starts bear fruit will create a partisan solution to a problem that requires bipartisan philosophy. We are dealing with a substance that is as transformative as the cultivation of grain was to early civilizations. In the event that reactionary forces to Trump overreach in their assumption of a mandate, I am wary of the way the miller’s thumb works.

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Pocket Fisherman, see my comment below.

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https://twitter.com/garrytan/status/1390498827694608385

Clever was purchased this week for $500 mil. When a venture capitalists called it a "good outcome" on twitter I shared the student's insightful letter on how these vig-seeking trojan horse platforms disrupt school learning ecosystems, for the worse. No reply from Gary Tan to date! But I've had a lot of success over the years with a "Less Ed Tech is More" approach to getting top math scores and turning around perennially failing math programs and I've always had to fight the vendors who could care less about learning outcomes but always want to sell you something you don't need or that is bad for school learning environments, kids, or teachers.

(intelligently embedding good math software into your school's schedule and incentive/ progress-tracking system _is_ a crucial part of an effective math program— to promote individualized practice, deep understanding, simulations, etc.— and we've used many different products over the years, often seeing them disappear with mergers, etc.)

Over the years there has also been a constant fight over who gets to make Ed Tech decisions: school personnel or Districts. That power began in the schools with Apples and PCs, shifted to the Districts with ethernet allowing ed "learning" platforms, shifted back to the schools temporarily with iPad revolution, and is rapidly shifting (permanently?) back to the Districts with cloud based Ed Tech. The vendors of course want all power with the District so they can use their access and other tactics to force their products into schools no matter what the principals and teachers think: Leading to lovely outcomes like this: https://www.businessinsider.com/kansas-parents-complain-about-a-mark-zuckerberg-funded-learning-app-2019-4?op=1

I'd say that over three decades of Ed Tech is long enough to conclude that good educational outcomes don't go well with good investor outcomes. Never have, never will, Gary. Ed Tech companies should be non-profit (e.g., ST Math: https://www.stmath.com/impact) or perhaps a certified b-corp.

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Facebook, GoogleAPIs, Twitter are an advertising monopoly (Rising 11/19/20). Waiting for a (bowel?) movement for Biden and his lobbyist staff to INFLUENCE (spelled POWER) to move (expulsive movement); but I can wait, to listen to The Bern. Will he fold or go all in; poker politics. I am a patient person. Not sick, but just listening to talking heads.

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Do we really think any antitrust legislation, of the Neo-Brandeisian ilk, will actually be passed with bipartisan support when the Republican Party still operates under the dogmatic view of "supply-side" and "trickle-down" economic theory, not to mention the party is dominated by political advocacy groups like ALEC and the Chamber of Commerce that represent big business? Sure, some Republicans like Senator Hawley and even President Trump, at times, have expressed what I would characterize as rather tepid or equivocal calls for breaking up the Big Tech companies. But I would hardly say these calls for breaking up Big Tech companies are based on a principled notion that over consolidation of economic power is pernicious for maintaining a functional democracy and a dynamic economy. Rather, aren't the Republicans really just posturing here to pressure the Big Tech companies, mainly the social media ones, like FB, Google, and Twitter, from not regulating misinformation and disinformation campaigns on their platforms that benefit the GOP?

Further, from an electoral or political optics perspective, do we expect Republican Senators to vote for an Anti-trust policy pursued by a Biden Administration? As we learned during the Obama years, Mitch McConnell and the other GOP senators were hellbent on preventing Obama from passing any major economic or social welfare legislation because they feared that if Obama earned an aura of being a bipartisan consensus figure, it would undermine their electoral outcomes in 2010 and 2012. Biden is largely campaigning on a return to normalcy and of his ability as a bipartisan consensus builder to return us to a less politically polarized time (of course this message is filled with nostalgia that is historically inaccurate). But why would Republicans bolster this image Biden is trying to construct by passing AT legislation that he proposes come 2021, aren't all the electoral incentives for them to stonewall democrats come 2021, so they can achieve a midterm success in 2022, as they did in 2010?

Ultimately, I think the only way we get major AT legislation is through the elimination of the filibuster (provided that the Dems win a Senate majority, of course). I hope I am wrong and that this legislation can be passed in a bipartisan matter without being watered down, but recent political history makes me wary of this occurring. Anyway, I am curious as to your thoughts, Matt.

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Hi Matt,

Just wanted to ask if you've ever done a piece on ThermoFisher or any of the other big life science monopolies. They have all the hallmarks:

- Huge numbers of acquisitions (Thermo Electron acquiring Fisher Scientific, Applied Biosystems, Gibco, Life Technologies and Qiagen, just to name the ones that jump to mind),

- Regulatory capture (both in licensing, patents, and most importantly approval for certain easily replicable assays as well as in the fact that almost every single institution has a preferred provider contract and stock room with them)

- Major decline in quality and increase in prices. Everyone knows thermofisher reagents costs way more and aren't even close to the highest in quality, so why are these guys still around? Is it the stock rooms? The contracts with institutions? The fact that they sell like half of all the lab equipment?

Let me know if you have thoughts or want details/contacts.

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My very first tip to Matt was the Qiagen buyout :D . He briefly mentioned it here, while stating he doesn't know much about the lab supply market ( https://mattstoller.substack.com/p/congress-responds-to-the-coronavirus ).

I ponder how coincidental it is that NEB's new prep kits look *a lot* like Zymo's kits. Those two companies have almost zero overlap; I could imagine a merger at some point. (Though while Zymo's prep kits are inexpensive and good quality I think Qiagen's plasmid prep kits give a higher yield.)

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Should also add that with Millapore acquiring sigma there are even fewer competitors for a lot of products. Even though a lot of smaller places can compete on pricing, it's just not worth the administrative headache to setup the ordering through them (especially since most purchasers aren't paying with their own money, but rather with the govt's/their corporate budget). The only major companies that I can think of that aren't part of a huge conglomerate in this space are NEB and Zymo, two companies that coincidentally have relatively cheap and high performing products.

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There's also Promega, Macherey-Nagel, Takara, Roche, the up-and-comer Lucigen, off the top of my head.

It's just that none of them are near the size of Life Tech.

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Sorry for triple posting. But just like look at the partial list of brands on thermofisher's wikipedia page. Each of those was a major company. Tracing the provenance of each of these guys is an exercise in merger tracking. For example, try tracking where the GibCo media (the biggest name in cell culture media) comes from.

1. Life technologies (a prolific acquirer) aquires Gibco media

2. Invitrogen (itself a prolific acquirer) merges with Life Technologies in 2000

3. Invitrogen merges with Applied Biosystems (the owners of the original PCR and thermocycler patents, and one of like two major players in the thermocycler space to this day). They (confusingly) rename themselves Life Technologies. (2008)

4. Life Technologies is bought by ThermoFisher (2014).

I've elided a huge number of other acquisitions happening along the way of course, but the consolidation in this field is just so massive, even given the pace of technology.

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Can you guys email me? I'm at mstoller @economicliberties.us

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You left out the big break-up of AT&T in the early 80s, under Reagan, which dramatically changed all aspects of telecommunications in this country. Also, President Trump is well aware of the monopolistic power of FANG+Microsoft, and their collective power to suppress conservative points of view. Also, I would have been interested in Jim Jordan's point of view. If these monopolies contribute do heavily to Democrat campaigns, what is the incentive for Democrats to push this legislation....in other words, how does this legislation enhance their power?

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How much money do you think tech will dump into the other Democratic House Member from Rhode Island's campaign when they lose their 2nd congressional district after this census?

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I don't know how you stay so positive about Congress actually doing something but keep it up. It helps me to see that not all is lost. Thanks for what you're doing.

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Reading this most recent post, I was wondering what your thoughts are of ISPs (Comcast and the like) having government backed lack of net neutrality and whether this conflux of public government and private business (outside of just contracts, but actual law backing private business) could lead to a monopoly eventually through simply established relationship or some other way?

I’m not versed in anything you write about, but your newsletter is approachable and digestible. Thanks for putting it out there!

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How do you think the election could affect the direction actual antitrust legislation goes?

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My guess is that Biden will be tougher on big tech than Trump. Both would start bringing cases.

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