FTC Preparing Antitrust Case Against Google

jazzc said:

No, you are quoting things from dictionaries and you don't understand the concepts. What *you* think most people feel is irrelevant to science. And for the record, I never said monopolies are good. I said, Google is not monopoly.

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Ok,
Google is not a monopoly.
They simply exert monopoly control over search, exercise monopoly powers, pay off competitors via aggressive merging tactics, price fix, promote their own products in their engine (and other resources) and pay off competing platforms to use them in lieu of competitors at prices that are higher than any small company could pay.

They also use special "double Dutch" transfer pricing schemes to lower their effective tax rate to about 1/3rd what any start up competitors would pay...

But Google being the #1 search engine is absolutely a byproduct of the free market and because they're the best engine.

Guess what? When they become inefficient competitors step in - Don't need to stress to much; remember Microsoft? The only way competitors won't come in is with .. you guess it ... barriers to entry!

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I've talked about Google's barriers several times already... the infrastructure, tax related, market related, payoff related barriers are insane... Google pays Firefox over $1 billion/yr to be the default engine and this is just one barrier (not even the largest one)

Expertpeon said:

Ok,
Google is not a monopoly.
They simply exert monopoly control over search, exercise monopoly powers, pay off competitors via aggressive merging tactics, price fix, promote their own products in their engine (and other resources) and pay off competing platforms to use them in lieu of competitors at prices that are higher than any small company could pay.

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Are we playing with words here? When you decide to argue let me know.

They also use special "double Dutch" transfer pricing schemes to lower their effective tax rate to about 1/3rd what any start up competitors would pay...

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Is that a special law fro Google only? You 're the one mentioning the law all the time in this thread. Go protest to the lawmakers for giving tax breaks to all the companies that wish to.

But Google being the #1 search engine is absolutely a byproduct of the free market and because they're the best engine.

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Yes, unless you think people are forced to "google" stuff instead of "bing" it or "yahoo" it. Usually, oppressed consumers don't make the name of their oppressor a verb. Google about it if in doubt

I've talked about Google's barriers several times already... the infrastructure, tax related, market related, payoff related barriers are insane...

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No you haven't. You just said about taxes and that 's something that applies to all business.

Payoff related barrier of entry?

Google pays Firefox over $1 billion/yr to be the default engine.

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And what stops others from doing so? Hopefully, you won't tell me the price...

jazzc said:

Ok, I 'm confused. You 're saying it 's "the same anti-monopoly fight" but also that Google "isn't a monopoly" at the same time?

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Yes. Why is that so hard to understand?

It's the threat of a monopoly that people are fighting against, not that there actually is one currently, that there is a big possibility of it being there soon.

There 's no abuse of power. It 's their property to do as they see fit. We are not entitled to those accounts by some God given right. That said, if they did something in violation of an agreement between you and them, they are liable and can be sued.

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I agree, it's their property and they can do what they want. But the problem is the violation of the agreement that no small business owner is going to have the funds to fight. Google knows this and slyly keeps their reasoning for account closures vague and hard to appeal (no responses from them or more vague responses). The only way to fight it would be a class action suit which no lawyer is going to take because, again, it's a very large, powerful corporation that resembles a monopoly.

No. In a free world, as a producer you are free to provide your services as high or as low as you deem, just like as a consumer you are free to choose from various vendors based on whatever criteria you like.

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This is where you and I fundamentally disagree and I'm willing to let it go, but I will leave it at this: as I said before, I don't believe a "free market" has to be without *any* regulation in order for it to be free. The whole "truly free" argument is too extremist in my opinion and not realistic or fair.

But suppose we have price controls and everyone is selling at the same price. Tensegrity bakery can create the best bread and make everyone else close shop because the consumer want the best value for their buck. Now we are back on the same result. Are you going to suggest that closing down Tensegrity 's business is beneficial to the consumers?

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No, I don't think that is realistic. First off, there simply is no such thing as "the best quality" and being in IM you should know better! Quality is more opinion than fact (not saying it isn't based on fact, but some people actually like stale bread, believe it or not). But more importantly, if you are selling the same bread as me and I'm getting more business, then it's up to you to come up with a marketing ploy or better product. That is still a free market, and totally fair.

EDIT: and to expound on that, selling something at a lower price just so you can win and make more money is a power game and nothing to do with providing the world with a good product!

Tensegrity said:

This is where you and I fundamentally disagree and I'm willing to let it go, but I will leave it at this: as I said before, I don't believe a "free market" has to be without *any* regulation in order for it to be free. The whole "truly free" argument is too extremist in my opinion and not realistic or fair.

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Not even Nozick, who founded libertarianism, actually thought this was the case.
The only person I know that said anything similar was Friedman... but his philosophy failed demonstrably in several real world cases with regards to business because he did not reconcile the occurrence of big businesses acting as oppressive governments (effectively) to users/competitors/consumers and manipulating the laws around them to avoid reprisal.

<3 Jazzc. Nice to hear some solid econ talk on the interwebs not on mises.org.

It's true that what Jazzc is saying isn't the layman's mental picture when they say "monopoly", but that's part of the problem. Nonsensical definitions lead to nonsensical conclusions. Econ makes a lot more sense with proper definitions.

To the extent that Google uses various government powers either directly, such as a tariff, or indirectly, such as a tax advantage they are utilizing barriers to entry in their market. I believe by and large Google's current status is due to their history of quality search results and clever marketing, even if they are trying their best to ruin it now. The complaint seems to be that Google might use money given to it voluntarily by satisfied customers to do things we don't like. Well, so what? Lots of people do stuff I don't like with their money. Google won't sink itself over night, but there's no reason to have the FTC swoop in and confiscate millions of dollars (like that helps anyone "harmed" by Google's actions anyway). You think it's hard to make money online now, wait until the US Government runs this shit.

WCO12 said:

To the extent that Google uses various government powers either directly, such as a tariff, or indirectly, such as a tax advantage they are utilizing barriers to entry in their market. I believe by and large Google's current status is due to their history of quality search results and clever marketing, even if they are trying their best to ruin it now. The complaint seems to be that Google might use money given to it voluntarily by satisfied customers to do things we don't like. Well, so what? Lots of people do stuff I don't like with their money. Google won't sink itself over night, but there's no reason to have the FTC swoop in and confiscate millions of dollars (like that helps anyone "harmed" by Google's actions anyway). You think it's hard to make money online now, wait until the US Government runs this shit.

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I think the EC's actions here are much better... as they require specific changes in google's practices to avoid anti-trust. ie. Google cannot keep swamping every search result with youtube videos and must use a completely fair algorithm (supposedly?).

Expertpeon said:

Yup it actually IS a special law that applies to companies in the billion+ range. Others cannot afford it...

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Unless you 're talking about some really special law, tax avoidance through transfer pricing is a very common practice in the business sector.

My guess is you'd have to have at least $5 billion/yr in gross profits to even afford to pay off one browser... that's about the biggest barrier to entry into a market I know of... and that's not even the largest barrier (droid being passed out for free with no alternative browser support is)

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So, in your opinion, there are no investors in the world that can come up with money if they saw a good opportunity.

And who said it's a requirement to spend a huge amount of money to become competitive? I 've been tracking Google since its launched, it was run on a small pc those days

Find me an example where a start up has $10-20 billion in start up capital (the 3 or so years needed to generally turn a profit) and we'll go from there.

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Lots of money in this world. If there 's a gap to be filled, investors will not be the problem. Your problem is that there 's no such gap in the search market currently.

2. Something immaterial that obstructs or impedes:
2. anything that prevents or obstructs passage, access, or progress

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Sure. Does that include prowess in your book? Is the fact that world champion of kickboxing is so damn good at what he does an obstacle for the competition? Well, sure, it 's a deterrent for me personally because I will get my butt kicked, but that 's not a barrier to entry. I can still get in if I really think *I* can do better. If there was a law saying that whoever disagrees with Expertpeon can not go into kickboxing, that 's a barrier to entry.

I am done here unless you present a material argument. Applying the Socratic method to everything I say is ridiculous

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The Socratic method is called Maieytiki (me-ef-ti-ki) - (not sure if Greek characters are visible so I wrote it in Latin ones) and I 'm definitely not using it Maieytiki has to do with doing small simple questions that the person can obviously answer and leading him step by step to the truth.

jazzc said:

Sure. Does that include prowess in your book? Is the fact that world champion of kickboxing is so damn good at what he does an obstacle for the competition? Well, sure, it 's a deterrent for me personally because I will get my butt kicked, but that 's not a barrier to entry. I can still get in if I really think *I* can do better. If there was a law saying that whoever disagrees with Expertpeon can not go into kickboxing, that 's a barrier to entry.

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Read Mills on natural monopolies... they have nothing to do with what I'm talking about.
Your argument that Google is one is, of course, false.

In 2009 this may have been true... in 2012, not so much. Most people prefer Bing, but use google because it's ingrained and pervasive.
http://www.theatlanticwire.com/tech...oogle-blind-showdown-closer-youd-think/56595/

I din't notice that before, so I answer now.

Expertpeon said:

Yup it actually IS a special law that applies to companies in the billion+ range. Others cannot afford it (just so you know, if you guess on transfer pricing in an IP issue without doing expensive material studies, you'll get audited and imprisoned most likely)...

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Where 's the link?

But let 's suppose it is as you say for a moment. That means you also want to break up Apple, Microsoft, ExxonMobil, Walmart, Chevron, ConocoPhillips, General Motors, General Electric, AT&T, Verizon, Cardinal Health, IBM, Koch Industries, CVS Caremark and a big bunch of others.

Do you? How about you lobby for taking down that law instead? Nah, that wouldn't make sense

Expertpeon said:

Read Mills on natural monopolies... they have nothing to do with what I'm talking about.

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Let 's leave John Stuart sleep tight on his grave shall we?

Your argument that Google is one is, of course, false.

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By the power of statement alone once again?

Most people prefer Bing, but use google because it's ingrained and pervasive.

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Yes, I know, the classic argument about consumers being stupid and scared sheep. It 's been a very old and tired argument

jazzc said:

Where 's the link?

But let 's suppose it is as you say for a moment. That means you also want to break up Apple, Microsoft, ExxonMobil, Walmart, Chevron, ConocoPhillips, General Motors, General Electric, AT&T, Verizon, Cardinal Health, IBM, Koch Industries, CVS Caremark and a big bunch of others.

Do you? How about you lobby for taking down that law instead? Nah, that wouldn't make sense

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Are you joking? I cannot provide you a link for this because transfer pricing is a god damn specialty.
I spend a huge amount of my time that I should be WORKING dealing with ACCOUNTING issues due to the incoherence in US tax law. I cannot provide you some sort of compact link discussing transfer pricing and barriers therein.
http://www.businessinsider.com/law-...neys-tax-avoidance-schemes-was-illegal-2012-8

Do you have any idea how difficult setting up a credit default swap is, generating active income overseas, avoiding subpart F income, etc?
Not to mention transfer pricing with regards to intellectual property. There is NO IRS guidance for it.

My business actually uses several loopholes to avoid US taxes, but they would not be available to telecommunications (who are explicitly not exempt from current taxation unless they are not a CFC)
http://www.tpa-global.com/PDF/Publications/211209_CT_IP_inTransferPricing.pdf

Making a better engine than google is NOT enough to take google down... It's obvious to anyone with half a brain this is the case.

More about the Double Irish with the Dutch Sandwich (Google has a different set up, with a lot going to Luxembourg from what I understand)
http://www.nytimes.com/interactive/2012/04/28/business/Double-Irish-With-A-Dutch-Sandwich.html

Expertpeon said:

Are you joking? I cannot provide you a link for this because transfer pricing is a god damn specialty.

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No, I don't want you to tell me about transfer pricing tricks. I want a link to the law that has that special 1billion+ only mandate. Unless laws are not allowed to be public where you live

Making a better engine than google is NOT enough to take google down... It's obvious to anyone with half a brain this is the case.

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That 's wrong and Google proved it when it trashed Yahoo as a start-up.

WCO12 said:

<3 Jazzc. Nice to hear some solid econ talk on the interwebs not on mises.org.

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Actually... you are hearing mises I 'm an astute follower of the Austrian School

jazzc said:

No, I don't want you to tell me about transfer pricing tricks. I want a link to the law that has that special 1billion+ only mandate. Unless laws are not allowed to be public where you live

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Contact Accenture and ask for a quote on setting up the above structure. Let me know what they say.
http://www.accenture.com/us-en/pages/index.aspx

I had a quote from a much smaller, but still relatively large accounting firm for this structure, and just the advisement (no accounting, setting it up, filings, paperwork or anything else... just the accountant's memo) was $250,000
I actually found this cheap, but the structuring itself would cost at least 500k to set up, and another 1-2 million/yr to manage.

Additionally. Yahoo in 2005 made about 1.15 billion/quarter in revenue. Google made a similar amount.
Google now makes 37.86B/yr

Hence, the situation is not the same at all as it was in 2005

And that somehow proves your statement about a billion plus special trick?

jazzc said:

And that somehow proves your statement about a billion plus special trick?

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It certainly proves that a small business has basically no hope of taking Google's marketshare...

Most businesses cannot set up such a structure until they're in the 100 million+ profit range...
Again, you're just wrong about a lot here. These are all barriers for entry. Anyway, I need to work again, for some reason one of my Penguin hit sites is now #3 again, so hurray ... for google

(Of course, I make tons from Google, I just hate their passive/aggressive BS)

Expertpeon said:

It certainly proves that a small business has basically no hope of taking Google's marketshare...

Most businesses cannot set up such a structure until they're in the 100 million+ profit range.

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So now that $billion+ only because a mere 100 million? 10x down with just a few posts. If I press the issue more, how low are you going to get it?

You 're a bit to shy to show us the billion+ only legislation for a guy who was using the law as an argument in the whole thread, no?

Edit: I 'm out for now, have fun and I 'll respond later.

jazzc said:

So now that $billion+ only because a mere 100 million? 10x down with just a few posts. If I press the issue more, how low are you going to get it?

You 're a bit to shy to show us the billion+ only legislation for a guy who was using the law as an argument in the whole thread, no?

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The problem is, this law isn't a law at all, it's a loophole in the system of tax codes that are so incoherent that few accountants even understand it. What's worse is that, in order to set it up, a business person has to spend an exorbitant amount of time finding accountants, paying for them, going through all this crap, in order to simply be on a level tax field as Google...

Someone could, in theory, set this up without accountants at all. However, doing so will send you to prison for 10 years. The tax code regarding these topics actually are written as if it's permissible to make any "fair and equitable" evaluation of these things in order to calculate tax revenue. Except, this isn't the case.

Yeah... not a barrier of entry at all.
Furthermore, every one of your posts asks between 2 to 10 questions, and no statements are made. It's incredibly annoying so I'm gone...

Expertpeon said:

The problem is, this law isn't a law at all, it's a loophole in the system of tax codes that are so incoherent that few accountants even understand it.

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So did google write the tax code? And what is stopping it's competitors from using those same loopholes? Who said it would be easy? s0ap and jazzc are exactly right.