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James Peery Cover's avatar

The classic idea of a firm monopolizing an industry is that it raises price and reduces output. The classic criticism of the US government’s use of antitrust law is that it goes after companies only on the basis of their size and often makes cases against firms that have been lowering prices. That is they apply antitrust law to help competitors rather than consumers. I don’t think anyone is looking at this case correctly. The real problem is consumers don’t know what they are paying for google’s services. They are paying by giving to google valuable information about their behavior. This occurs when households use gmail, as well as when they do searches. Similarly with other large internet companies such as Facebook. The way to help consumers in this environment is to require these firms to share the revenue with their users.

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Sam Iam's avatar

The government seems to not be seeing the angles here. Google is right that defaults don't matter much. They found that out when they dropped default payments to Firefox and people changed to Google anyway. Why then is Google still paying Apple... and not just a small default fee, but tens of billions a year? They are paying them to not start an Apple search engine business. Google is not afraid of Bing, very concerned about a potential Apple search engine. It will be interesting to see how Google argues that A) Defaults don't matter B) We are paying Apple $10b a year... for nothing.

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