Tech Monopolies: Last Week Tonight with John Oliver (HBO)

moving on our main story tonight concerns the internet a world-changing resource that was initially sold to us like this we installed the internet on our computer just a short time ago and i haven't been able to get the kids off it ever since not only do they play the typical computer games that all the kids enjoy but their curiosity for learning has skyrocketed peter is constantly quoting sports statistics and he can tell you the best surfing spots around the globe not to mention the improvement in peter's grades and dashes too okay first peter was not checking surfing spots or sports statistics peter was masturbating that is what peter was doing but also spare a thought for dasha there who just gets also good grades you deserve better dash i hope you grew up to be an early investor in cell phones made millions of dollars and never spoke to your weird family ever again specifically we're going to talk about the fact that our experiences on the internet are now dominated by a very small handful of companies who are getting pretty used to throwing their weight around in 2020 the house judiciary subcommittee on antitrust released a massive 450 page report detailing anti-competitive conduct by apple amazon facebook and alphabet that's the parent company of google and the findings couldn't have been clearer each platform serves as a gatekeeper over a key channel of distribution allowing these giants to pick winners and losers throughout our economy and i know for some that's part of the appeal apple's the empire of the smartphone with all its attendant services facebook's a repository of your identity amazon's the online wall backed by cloud infrastructure and alphabet is all things search now these companies have all created incredible products that we can't live without they're gargantuan businesses that are for the most part loved and respected by the most important people they're customers are they a monopolist i honestly don't care i don't wake me up when someone else can do it better okay so there's a few problems with that first in order to be woken up at some point you do need to go to sleep something that i feel jim cramer a man who constantly exudes big running late to my child's thing energy hasn't done in the last decade but second a big thing these companies are accused of doing is suppressing their competition so completely that we never actually know if someone else could do it better because they'll never get a fair chance to try that is the problem here it's not that tech companies are inherently bad because they are big is that they're engaging in anti-competitive behavior here's where unusually i actually might have some good news because there are two bills before congress right now with bipartisan support that could curtail at least some of big tech successes but for reasons that we will get into later if they don't pass in the next month or so they're not likely to pass at all so tonight let's talk about tech monopolies the hidden harm that they can do and how best to address that let's start with a tiny bit of history because in the past the us has actually taken strong action to break up harmful monopolies in the early 20th century we broke up standard oil and as recently as 40 years ago the government took action against who else but a t and t our business daddy who left for cigarettes and never came home they were actually the largest firm on the planet back then and broadly well respected and considered good which is to say completely unrecognizable from the a t and t of today but crucially that popularity may well have been because people had no alternatives you had to rent your phone from a t and they were in charge of both local and long distance services which as we now know were wildly overpriced and when mci a much smaller company tried to offer long distance phone service at a lower rate at t was not having it mci which charges up to 50 percent less than bill argued that a t tried to put it out of business by refusing to provide equipment needed for long distance transmission a key exhibit att's own notes of a 1972 florida meeting by company executives in which one said let's choke them off before they get started now obviously at t now and forever but is that what that said because the only bit of squiggle that i can decode there are the words dangerous to samantha's a dollar sign something that weirdly might be covered and then there is something that's definitely no question capital b balls the doj then actually filed an anti-trust lawsuit which 18t fought vigorously for a decade and when in 1984 it was formally broken up by the government att's chairman warned the public that we would come to regret what had just happened i've had the conviction and taken the position in more than one forum that the country in the long run will be sorry i find it difficult to believe that difficult to believe that things will work as well uh in the in the future as they have worked in the past yeah but he was wrong things actually worked better because it turns out ending a monopoly is almost always a good thing whether it's att or standard oil or literally any game of monopoly we didn't know it at the time but att's dominance was seriously holding back innovation but as soon as it wasn't controlling the phone lines and what you could attach to its network many new products started proliferating from the answering machine to the modem the breakup of atm t was actually a key step in producing the internet revolution giving us the web as we now know it and peter the ability to look up sports stats surfing spots and what we all know he was really doing there the point is when harmful monopolies end innovation flourishes and i want you to bear that in mind as we talk about the monopolies of today tech companies and tonight we're going to focus on just one way that they use their monopoly power something called self-preferencing it's when companies unfairly favor their own products on their own platforms which have now become so big that most of us have no choice but to use them this is a particularly big problem with these three companies and we're going to start with apple specifically its app store which is basically the only place to download software for your iphone which is already a little bit weird when you think about it right you can download any software you like to your desktop computer but if you have an iphone apple has set it up so that its app store is the only game in town and apple has been accused of unfairly pushing its own apps to the top of search results now the company denies doing this but the wall street journal found apple apps that generate revenue through subscriptions or sales like music or books showed up first in 95 percent of searches related to those apps but regardless perhaps more important is the stranglehold that apple has on developers who want to get their apps onto your phone because they are required to use apple's payment processor which takes a huge piece of every dollar that customers spend on those apps and any digital purchases within them apple takes a 30 commission on sales of apps and in-app purchases so if an app costs 4.99 upfront apple collects a dollar fifty same goes for if you use an app to buy digital goods like virtual weapons or sign up for a subscription to a monthly service it's true and that was pretty shocking to me because it means that every time someone spent money on the jeremy renner app something real people actually did to boost their post about him so they could hashtag be seen by jeremy renner again something human beings wanted in amounts ranging from 199 to nearly 100 actual dollars apple got a cut of that and that is blood money right there apple makes literally billions and billions every year just on commissions on app store purchases and some app developers have tried to find ways around this tinder for instance charges a higher price if you subscribe through the app than if you do it on their website and if you open netflix on your iphone and you don't have an account you get a message reading trying to join netflix you can't sign up for netflix in the app we know it's a hassle after you remember you can start watching in the app and you can see why netflix would do that it doesn't want to lose a third of its subscription revenue to apple because it needs that money to promote its netflix pride month collection which is absolutely great simply scroll by the dozen stand-up specials mocking the trans community and it's right there shine with pride guys and while apple will say that it's lowered its commissions for certain small app developers and and now even allows some apps to link to an external website and bypass commissions a key reason that happened is that they were put under extreme pressure from lawsuits and from regulators overseas and if you are thinking well apple is not the only game in town right what about google's app store they charge similarly high commissions to developers and the fact is over 99 of smartphones are part of either google's or apple's app ecosystem let's actually talk a bit about google now because their app store is clearly only a small part of their story as i'm sure you know they absolutely dominate online searches last year google conducted 90 of the world's internet searches when billions of people asked trillions of questions it was google that provided the answers using computer algorithms known only to google they have this phrase they use competition is just a click away they have no competition being their competition has two percent of the market they have 90 exactly people use google to the extent that googling something is now a verb you can't say that for any other search engine no one has ever said i'm going to bring it except for maybe bing crosby announcing he's about to masturbate but that's it and google has exploited their market dominance in subtle ways having to do with the search results that it shows you because it used to be when you googled something you got a page that looked like this a series of blue links to various pages across the internet that google's algorithm had determined to be the most relevant and that was the company's goal at the time as its co-founder larry page said in 2004 most portals show their own content above content elsewhere on the web we feel that's a conflict of interest we want to get you out of google and to the right place as fast as possible but when you search for something today you get a lot of google content before anything else appears in fact the markup found google devotes 41 of the first page of its results on mobile devices to its own properties and what it calls direct answers meaning that a user would have to scroll nearly halfway down the page before reaching the first organic result in that search now google disputes their methodology but think about what it is like when you search for something let's say you want to look up dolphins so you google dolphin animal and you get this a bunch of pictures of dolphins on google images a bunch of buttons up top like sounds that mostly lead you to videos on youtube also owned by google by the way a section on the right side that's mostly links to related google searches like orca or amazon river dolphin and a box of direct answers to questions that people have asked about dolphins like what are five interesting facts about dolphins or is dolphin a friendly animal or can a dolphin love you and while you you've never even thought of that as a possibility suddenly you're curious alright so you click on it and it says dolphins have also shown loving emotions towards humans and your heart kind of flutters for a moment because who knew there was room in a dolphin's heart for love maybe there is room in one for you and then you see more questions like do dolphins protect humans which they must write after all we now learned they can love us but the answer is there just isn't any reliable evidence that it's true what the does that mean that they're willing to love but not protect us they're just gonna throw our love away and as the feeling of betrayal starts to creep in you see that others have searched are dolphins evil and the answer is dolphins have a huge capacity for evil which of course they do they're monsters with no understanding you might have opened up to them for the first time in a long time and they'd abandon you like you're nothing and then you see what do dolphins think of humans and you can barely even breathe as you open this one but you know the truth before it even appears dolphins are essentially bribed with fish to interact with humans and even though you hurt at least you can accept that it's not actually you it was never you it was the dolphin and the point is throughout that whole emotional rollercoaster you never even left google in fact one analysis found that two-thirds of searches on google ended without ever clicking to another web property and the thing is information that google feeds you in searches like that may have been copied from other sources sometimes without their knowledge or consent and if thinking well you know it's free information why does it matter if i read it on google or on the site that they took it from site traffic is one of the major tools that many websites especially free ones use to sell ad space so taking away visitors to their site is essentially taking money out of their pocket and when yelp explicitly refused to have their data scraped google told them the only way to have their site's content removed was for it to be removed from google's general results entirely and as the ceo of yelp explains that is basically a death sentence how important is that first page it's not even just the first page it's the first few links on the page is the vast majority of where user attention goes and where the traffic flows so if you're not at the top of the page or the bottom of the first page or on the second page that's going to affect your business yeah if you're on the second page forget it you're not a real business exactly i'm putting the merits of yelp aside google's algorithm shouldn't determine whether or not someone's business is real frankly that distinction should only be withheld if someone's business includes the words instagram influencer because that is not a job you're not a business you're just attractive independently wealthy and it's sunny outside that is all that is happening there and before jim cramer says who cares build a better product and you'll land on the front page the top results google feeds you may not be the best ones take google flights it used to be that if you googled nyc to boise your top results will be links to sites like these but now you'll almost always get this google flights widgets at the top of the page already set up so that you can stay on google and find a flight without clicking anywhere else and while you personally might scroll down past that many don't and the industry has felt this as one travel analyst wrote the fact that google is leveraging its dominance as a search engine into taking market share away from travel competitors is no longer even debatable and google might say that it's at the top because it is the best but the markup found that google flights did not always display the cheapest fares or all available flights so i guess that does kind of explain why google fights banner image is a woman and a child hiking somewhere while pointing at an airplane that they are not on seemingly saying what the there are flights here google told us our best option was to walk to denver now google like apple will quibble with a lot of what i have just told you they will tell you that they send billions of clicks outside of google every day and that they don't preference google flights in searches which okay okay google they will also tell you that yelp and other companies now have tools to specify what information gets scraped although that only happened after serious pressure from the ftc and if you're noticing a theme here that these companies only do the right thing when they're pushed up against the wall that's a little bit the point but arguably the company most guilty of self-preferencing is amazon founded of course by a man rich enough to buy absolutely anything including seemingly the rights to pitbull's identity amazon reportedly controls 65 to 70 percent of all u.s online marketplace sales it hosts about 2.3 million active third-party sellers from all around the world and to those sellers like this man who sold sporting goods it is close to the only game in town you've got to be on amazon you have to be there because that's where everyone is that's 100 million prime subscribers amazon executives have told us that there are many other options out there there is walmart there's alibaba as a seller you've got options i've heard that response from amazon executives before and we did that we were listed we listed all of our products on every other online marketplace all of the others that were non-amazon combined did about 10 of what we were doing on amazon exactly amazon basically is the marketplace it's essentially the only place to sell anything on the internet unless that is you're looking to offload some human teeth because then it's craigslist all the way baby and for a third-party seller the most important thing in the world is something called the buy box it's that little box that shows up on any amazon product page where you can instantly click to buy so when we search for duracell aaa batteries we got this page and here is the buy box right here where with just one click we could buy a pack for fourteen dollars you might assume that that is the best deal but if you click on this little box below you can see multiple other sellers who are offering the same products many at a lower price the problem is most people aren't going to see that because an estimated 80 percent of amazon sales go through that first buy box and it's even more for mobile purchases because if we've learned anything so far tonight it's that nobody ever ever wants to scroll down so only one seller gets to be in that box and nobody except amazon knows how its algorithm picks the winner but it sure seems to consistently favor amazon with one analysis finding that the company chose itself for the buy box for about 40 percent off products while the next highest seller got in just half of one percent of popular products and even when the buy box did go to a third party seller nine out of ten times it went to those that used amazon's shipping service fulfilled by amazon basically it is amazon's playground they make the rules and they do seem to win a lot of the time and as this expert points out if they are competing with you you're basically dead third-party sellers have told me that once they see that amazon is telling selling the same good that they're selling they liquidate their inventory they know it's impossible to compete against amazon on amazon's own platform of course think about it of course it is you don't stand a chance amazon is to retailers what dolphins are to the human heart if they take an interest in you you are going to wind up absolutely devastated you flipper and the thing is amazon isn't just a marketplace or indeed a shipping company it's also started coming up with its own products now because it currently has approximately 158 000 private label products across 45 in-house brands and it has been accused of preferencing them over its competitors or even worse making clear knock-offs of products that have been successfully sold on its website take a small company called peak design it made this camera bag and when it noticed a suspiciously similar bag being sold by amazon it made this pretty decent snarky video in response this is the everyday sling by peak design and this is the everyday sling by amazon basics it looks suspiciously like the peak design everyday sling but you don't have to pay for all those needless bells and whistles like years of research and development recycled blue sign approved materials a lifetime warranty fairly paid factory workers and total carbon neutrality instead you just get a bag designed by the crack team at the amazon basics department yeah and it does sure seem that amazon is putting out a cheap copy with essentially the same name and design and it's pretty weird that one of the biggest companies in the world seems to be using the same strategy as knockoff dvds designed to confuse parents hey kids we got you the movies that you asked for ratatouille transmorphers and chop kick panda why are you crying it's what you wanted and amazon has a huge advantage over its competitors because it runs the marketplace and has access to all the independent seller data like hypothetically what bag is proving popular and look amazon denies that they prefer themselves their own products or sellers that pay for their logistics services and they also deny ripping off products based on internal data though when jeff bezos was asked about that directly his answer wasn't great let me ask you mr bezos does amazon ever access and use third-party seller data when making business decisions and just a yes or no will suffice her i can't answer that question yes or no what i can tell you is we have a policy against using seller specific data to aid our private label business but i can't guarantee you that that policy has never been violated not great jeff we have a policy but i can't guarantee you it hasn't been violated it has got to be one of the more incriminating ways to answer a question it's right up there with answering did you break the law with which law look it is pretty clear self-preferencing stifles competition hurts small business and often results in serving consumers and inferior products so what can we do here well that brings me back to the good news that i mentioned earlier because these two bills are currently before congress and would address some of the problems that you've seen tonight among other things they'd stop massive companies that operate app stores like apple and google from requiring developers use the company's own in-app payment processor and they ban advantaging a platform's own products services or lines of business over those of arrival and unsurprisingly tech companies are fighting these bills hard making basically the same arguments that att made 40 years ago that if you tamper with them things just won't work as well in the future as they did in the past although this time they also have trade groups running ridiculous ads like this washington is full of problems not solutions every time they get involved in a new area of our lives they just seem to make things worse and now politicians are boasting about a plan to control my devices and how i use them their silly ideas could ruin some of the services i rely on if i need directions i simply click one button and it gets me straight to where i need to go in their search for popularity and power dc doesn't care whether they mess up what i need from the internet my message to washington focus on fixing america's real problems and leave my phone alone what is going on with that unsettling man focus on america's real problems like me and whatever my deal is because what is going on with me what's that thing in my truck is it a trash can taped to a desk a jab with a hot barge taped to a chimney also what did i just do to it and why my broader point seems to be that i'd like government to pay less attention to whatever weird that i am definitely up to basically to leave my phone and whatever obviously incriminating is on there alone or i will lunge at you i will lunge right at you washington these companies have pushed some wild arguments from claiming the bills will help china to say they'll somehow hurt people of color and we don't have time to go through every boogeyman that they have come up with but none of them really stand up and some have fallen apart spectacularly apple for instance claims that they have to have exclusive control of the apps you can download otherwise it would expose users to serious security risks ignoring the fact that these bills have explicit carve-outs for that if apple can prove that those risks genuinely exist now as for amazon and google they've been arguing that small businesses would be harmed by these bills funding lobbying groups like this one the connected commerce council which supposedly represents 5 000 small businesses who all oppose antitrust regulation but when politico reached out to its members nearly all of the businesses that they contacted said they'd never heard of the connected commerce council and i do get why amazon in particular wouldn't have filled them in about it because when it directly asked its third party sellers to oppose these bills one of them wrote back any informed seller is going to support massive action taken against amazon in the antitrust arena we are not morons and know how to read and think for ourselves which is basically a polite way of saying you and the spaceship that you rode in on the truth is these bills are narrow arguably too narrow but that is probably why they do have broad bipartisan support both bernie sanders and josh hawley want to pass these bills that's basically the only thing they have in common apart from the fact that both their smiles are exclusively upper teeth no lip so why haven't the bills move forward well some believe that it doesn't help that at least 17 members of congress currently have children who work or have recently worked for four of the biggest tech companies including crucially chuck schumer's daughters one of whom works as a marketing manager at meta and one of whom is a literal registered lobbyist for amazon and the reason that is interesting is because chuck schumer is the person who needs to call these bills to a vote and while he has certainly said that he will do that he also hasn't done it yet and if he doesn't do it before congress leaves for his august recess the bills are probably dead because in the fall everyone's going to have moved on to focusing on the midterm elections where as we all know the democrats will be absolutely annihilated so we have a very small window right now to actually do something about this and if any part of you is thinking who cares things basically work fine for me right now it's just worth remembering people thought that things worked fine with att before they were broken up because they literally did not know what they were missing the problem with letting a few companies control whole sectors of the economy is that it limits what is possible for startups by and if i may quote att's incoherent memo choking them before they can even get started an innovative app or website or product might never get off the ground because it could be surcharged to death buried in search results or ripped off completely these bills would crack the door back open for innovation and nudge the internet back towards what it was supposed to be from the start a revolutionary tool that expands global access to information and the absolute best place to research surfing spots get yours peter get yours

Channel: LastWeekTonight

Views: 6,850,961

Keywords:

Id: jXf04bhcjbg

Length: 26min 50sec (1610 seconds)

Published: Sun Jun 12 2022

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[u/propagandavid]

Can't, because a traditional media monopoly owns the rights in my country and won't allow me to watch John Oliver videos until 2 weeks after they broadcast on TV.

[u/toekneedee13]

It’s the same thing the fossil fuel industry is doing to renewable energy. It doesn’t even make sense from a capitalist perspective to be anti wind, solar or any of the other alternative energy sources.

[u/piccolo917]

John Oliver and his team*

I always feel that while the presenters of shows like this give credit to the staff doing the majority of the work, the general public doesn't.

[u/Sneet1]

https://www.goodreads.com/book/show/32999998-platform-capitalism

Highly recommend this book, it's a relatively short read and good leftist theory.

This talk also briefly discusses it from a further left perspective.

https://www.youtube.com/watch?v=Ghx0sq_gXK4

[u/quitthegrind]

I would love to but my zoom calls and long distance work, which I love, apparently put me over my data cap and my isp has me data throttled atm.

So I cannot watch the funny British American man OR Cody’s Showdy.

[u/GordonRamsey666]

Yah fuck australia.

[u/Dr-Satan-PhD]

I'm gonna watch this later after I do some research on the best surfing spots around the world.

[u/RobertusesReddit]

Also, link that bill and phone bank the shit out of it to everyone 24/7 and tell Chuck Schumer's daughters to get off our necks.