This conversation has been going on for a little while already. Elizabeth Warren directly addresses proprietary markets (i.e. participating in you own) in her plan to break up big tech companies[0]. Her argument essentially boils down to either participating in someone else's marketplace to sell goods, or running your own marketplace without being able to transact within it, but preventing the ability to run and participate within a single market.

0: https://medium.com/@teamwarren/heres-how-we-can-break-up-big...

This argument against vertical integration sounds a lot like United States v Paramount Pictures, inc [0], which forced Hollywood to end the vertical integration of the “studio system” [1].

Honestly, I’ve wondered if Apple has deferred manufacturing to Foxconn et. al. just to avoid being ruled a (vertical) monopoly with this precedent.

[0]: https://en.m.wikipedia.org/wiki/United_States_v._Paramount_P.... [1]: https://en.m.wikipedia.org/wiki/Studio_system

Companies can easily get around this.

Instead of Facebook opening the Bank. It'll be zuck first banking national forms a partnership with Facebook Inc. Accomplishing the same things.

Only accomplishment will be that it's harder for the two companies to share their point datasets. Albeit, not impossible.

It is not quite as easy as you suppose. The Bank Holding Company act of 1956 (as amended in 1970) places any company that owns 25% or more of a bank under the regulatory supervision of the Fed. The holding company rules for Broker/Dealers (investment banks and retail/institutional brokerages) are less airtight but not insignificant.

I worked on Wall Street for years, many of the them on the business side. Fed supervision is no joke.

Which means steam couldn't be created now, which is a little disappointing

It's problematic because nearly every platform either grows out of an application or needs its sponsor to build the initial suite of applications on the platform. You can't get past the chicken & egg problem otherwise - platforms aren't useful without applications, marketplaces aren't useful without participants, and nobody wants to bother with a platform or marketplace that isn't useful.

This is pretty easily worked around with a revenue threshold, though. If you own a marketplace where $25 is transacted annually and you want to participate in it, go for it. If you own a marketplace where $25B is transacted annually and you want to participate in it, there're some problems with that. This is already part of Warren's plan.

It somehow feels wrong to tell Apple that they can't sell Apps in their own App Store.

...which shows how ingrained the idea of oligopoly & big business is in the U.S.

There's nothing inherently wrong with forcing Apple to divest their in-house apps. They did it before, when they spun out Claris in 1987. Likely, it would lead to better competitors within those markets than we have now; there was a renaissance in Mac office software after Claris was formed, which unfortunately Microsoft won. Perhaps if Microsoft had also been forbidden from building apps for their own platform, we would still have functioning word processing and spreadsheet markets.

(Though remembering this time period, I can think of another problem: file formats. Having a choice between MacWrite, WordPerfect, Ami, and Microsoft Word was great. Having to share your MacWrite files with someone using Ami was miserable.)

We had a good "word processing and spreadsheet market". But somehow people and companies voted with their money for Microsoft.

No one liked Excel better than Lotus 1-2-3. They picked Excel because it worked best on Windows because it used private APIs and also because they would be sold together.

My dad had quite a lucrative decade as a consultant moving people from Lotus to Excel, and every time he was hired the people hiring him would complain about how they were being forced to move to "crappy Excel" because of the purchasing department.

If that’s the case, why couldn’t Lotus compete with Microsoft on Macs - even though they tried? Excel was a better product.

Just like people love to wear rose colored glasses and pretend that the only reason that Netscape lost was because MS was unfairly competing, forgetting that NS was so crashed prone that it was a point of nerd pride on Usenet how well an operating system could handle a Netscape crash.

There are some fairly strong cross-platform network effects between office software, because of file formats. If you had MS Word on the PC and wanted to send documents to a friend who had MS Word on the Mac - well, there were minor issues around disk formats, line terminators, and file transfer protocols, but generally if you had e-mail you could send them a .doc. If you had Lotus 1-2-3 on your Mac and wanted to send files to colleagues with Excel on the PC, you were screwed. (The major software manufacturers did end up reverse-engineering each others' formats by the late 90s, but by then Office had already won.)

If Microsoft had an edge on Windows, which was the majority of computers, then that would translate into inconvenience trying to use any non-MS product on Macs, unless everybody you dealt with used Macs.

Lotus was slow to move any of their products away from the command line. Excel was on the Mac in 1985. Lotus didn’t come to the Mac until 1991 and when it did, it was awful. Microsoft had years of GUI development experience by the time Windows 3.1 shipped because they were producing Mac software. Lotus and WordPerfect were panned for their early Windows products because they were direct ports more or less of their DOS products, not because they couldn’t get access to super secret Windows APIs.

As far as compatibility. By 1990, Apple/Claris had XTND/Apple File Exchange utilities to convert from Rxcel/Word to ClarisWorks. People knew Microsoft’s formats by then.

The Mac was its own little incompatible island back then with incompatible file formats between Mac Word/Windows Word (though they could be translated), resource forks and data forks, file types as part of the file metadata instead of file extensions, heck even text files used different line endings than either Unix or Windows. Mac users didn’t generally worry about seamless interoperability.

On the other hand, back in the day, Office could open every kind of document under the sun.

Not true, theoretically they'd just have to sell their own products on another marketplace.

They'd divest the resources into Apple Apps Co., which would then be a Apple preferred partner on the app store.

Or offer them at a discount with little to no advertising, which is basically what they did with Orange Box.

Or split into steam-the-platform-the-company and valve-the-games-company - and if that happens I predict half life 3 really will follow.

So basically all grocery stores that sell their own branded stuff as well are blocked?

No. From TFA:

"First, by passing legislation that requires large tech platforms to be designated as “Platform Utilities” and broken apart from any participant on that platform.

Companies with an annual global revenue of $25 billion or more and that offer to the public an online marketplace, an exchange, or a platform for connecting third parties would be designated as “platform utilities.”

These companies would be prohibited from owning both the platform utility and any participants on that platform. Platform utilities would be required to meet a standard of fair, reasonable, and nondiscriminatory dealing with users. Platform utilities would not be allowed to transfer or share data with third parties."

Note the word 'tech platform.' TFA also goes on to illustrate that this effort is essentially identical to trust-busting that has occurred multiple times over the past century when a single company became so large that it distorted an entire market.

Not sure why this is voted down. Amazon is just doing a scaled up version of what Walmart, Price Chopper, Trader Joe's and various other supermarkets have done for decades. Why should Steam and Amazon be barred from doing it if others aren't?

No they're not. All of the grocery stores are engaging in "white-labeling" - buying products from other manufacturers and putting their own label on them. It would maybe be a valid comparison if Price Chopper took in 50% of all grocery dollars spent in the US, saw what was popular, cloned those products in house and then used the top 80% of shelf space to prominently display their product, and moved the third party competitors to the very bottom shelf.

Additionally, Trader Joes ONLY sells white-labelled products, so it is even less applicable than your other examples.

> Additionally, Trader Joes ONLY sells white-labelled products, so it is even less applicable...

Their mix is heavily skewed toward private-label products, but "ONLY" is not accurate.

To pick one example: they sell name-brand beer alongside their private labels.

Fair enough. They also don't slap a Trader Joes marque on the produce they resell.

isn't the line between white labeling and competing with cloned products blurry? How much of the manufacturing/creation process must they own for it to no-longer merely be a white label product? Lots of companies contract out manufacturing and it's not automatically white labeling in those cases.

You're right. I think the distinction comes down to companies like Amazon having the kind of vast capital required to not only cut out the middle man but to _become_ the middle man in their own market.

In most cases, a market (in the specific sense, like a store or a site) will white label a product and undercut competitors by leveraging the volume/wholesale pricing that they can get. What's truly dangerous about the AMZNs and GOOGs (and Standard Oils and Ma Bells) of the world is that they can use brute monetary force to buy or subsume competition. To quote the legendary SF grifter Jack Black, "You can't win."

Thanks for letting me know.

Good point. There's a precedent for separating industries when it's in the public interest [0]. I think the argument needs to be that housing both industries under a single roof creates a conflict of interest that's too strong to be managed through normal regulatory actions like fines.

[0] https://en.wikipedia.org/wiki/Separation_of_investment_and_r...

There's also a precedent for preventing companies with a monopoly in something from expanding into other businesses, like Bell. Clearly facebook isn't a recognised regulated monopoly like that, but there are similarities.

Right now it seems we are heading for the CHOAM company. (Fictional company in the Dune 'verse that does everything.) I've joked that Amazon is CHOAM and SpaceX is Weyland-Yutani (from Alien).

There do seem to be consolidation / de-consolidation cycles in business though. In the 1980s people also talked about the birth of EverythingCorps. You can see it a lot in 80s sci-fi. In the 90s you had the opposite trend.

We seem to have both trends concurrently right now: institutional investors push for clean sector separation, when they expect sector A growing they want to be able to buy into companies in that sector with as little baggage in sector B as possible and vice versa. Consequently, "the old tech corporation" (Siemens, Philips, GE) seems to be in a permanent state of shrinkage by spinning out one field after another. At the same time, "new tech" corporations are still growing faster than any sector purity investor agitation could keep up with, some even still under the control of founders so that the entirely different logics of personal empire-building apply.

How about then Amazon becomes the state, viola (sic) state controlled production, give everyone an equal share and we have Communism!

You joke but this is sort of what Marx actually argued. Revolutionary state dictated communism was mostly Lenin. Marx thought capitalism would evolve into communism.

> Perhaps we should start thinking about separation of powers such as modern democracy(eg separation of church and state).

I think it should be in a complete different way: finances should be separated from the state so new financial initiatives based on tech (e.g. Libra, Crypto assets) can be free in the same way that Internet gives us freedom to create decentralized initiatives that cannot be stopped by states.

This does not mean that the state is not able to enforce laws against the financial or technology scams in the same way it has laws against pedophilia that cover what church members do.

So Walmart wouldn’t be able to sell Great Value products. Same with Safeway for signature select. Amazon basics... Kirkland...

I don’t think banning vertical expansion is a very good idea. It’s worse for consumers because you’re taking all of the extra efficiency gains out of the market by eliminating the friction between layers.

The argument that vertical integration harms consumers typically follows that vertical integration lowers competition and choice by either coercive means (e.g. block pricing by Hollywood studios) or by undercutting competitors only until they go out of business.

So should Apple not be allowed to sell Apple products in Apple stores because it also sells third party products? Should the console makers not be allowed to produce and sell their own games in their own stores? Should Amazon not be allowed to both produce their own content and sell third party videos?

I was under the impression that the EU outlawed such practices as part of their anti-trust laws.