DOJ antitrust chief Makan Delrahim looking to the past to combat tech giant monopolies

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The head of the U.S. Justice Department's antitrust efforts, Makan Delrahim, drew comparisons on Tuesday between past monopolies like AT&T and the state of the modern tech industry, including companies like Apple and Google.

Makan Delrahim


At one point before its breakup Standard Oil likewise offered cutting-edge technology and low prices, Delrahim told an Israeli conference via video link, according to Reuters. Another infamous monopoly, AT&T, similarly defended itself by claiming that its market status offered better prices and innovation -- in reality it was an early example of the "network effect," Delrahim said, by way of its opposition to independent companies using its long-distance lines. That made it difficult or impossible for smaller rivals to compete.

The problem extended into Microsoft's anti-competitive efforts against Netscape in the 1990s, and antitrust action was a solution, Delrahim argued.

"The government's successful monopolization case against Microsoft may very well have paved the way for companies like Google, Yahoo and Apple to enter with their own desktop and mobile products," he remarked.

When considering antitrust actions the DOJ is said to watch for collusion, higher prices, and falling quality standards. Delrahim used diminished privacy as an example of poor quality, likely referring to scandals at Amazon, Facebook, and Google.

The DOJ isn't inherently opposed to companies buying up each other, Delrahim noted.

"Acquisitions of nascent competitors can be pro-competitive in certain instances and anti-competitive in others," he explained. "I will note the potential for mischief if the purpose and effect of an acquisition is to block potential competitors, protect a monopoly, or otherwise harm competition."

The DOJ recently received jurisdiction to launch an antitrust probe of Apple as part of a much wider examination of the tech industry. While Apple has escaped privacy complaints, critics have still pointed out that the company maintains absolute control of iOS app distribution, blocking developers from selling anywhere but the App Store -- where it normally claims 30% from each transaction, and enforces tough rules that for instance block "duplicates" of its own apps and services.

Democratic Senator and U.S. Presidential candidate Elizabeth Warren recently called on Delrahim to recuse himself from probing Apple and Google. He lobbied for both companies between 2006 and 2007, something Warren suggests is a conflict of interest.
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Comments

  • Reply 1 of 23
    gatorguygatorguy Posts: 20,617member

    "A popular idea is to splinter the companies of their properties, which could prove a financial windfall for investors. Facebook could create billions of dollars in additional value through the spinoff of WhatsApp and Instagram, and Google could do the same with YouTube, according to Scott Galloway, a marketing professor at New York University and author of “The Four: The Hidden DNA of Amazon, Apple, Facebook and Google.”

    Needham analyst Laura Martin wrote in a note Tuesday that cleaving parts of Alphabet would likely result in more valuable pure-play properties for investors. Separately, Cowen analyst John Blackledge estimated Amazon Web Services would be worth $500 billion as a separate company, making it one of the world’s 10 most valuable companies.

    The problem with that approach is that the individual businesses could actually better compete against pure-play startups that can benefit from being singularly focused when facing off with a large company. Instead of four large companies ruling the tech world, there could be many that still have ties to a former corporate parent but are actually better equipped to harm competition.

    “The threat of a Microsoft-like judgment could drive some of these (four) companies to spin off certain business lines in an effort to be seen as promoting competition,” Day said. “Whether such actions will, in fact, promote meaningful competition or just further reinforce the position of existing players or platforms remains to be seen.”


    By the way, another good article delving in the possible cures is here:

    https://www.marketwatch.com/story/breaking-up-big-tech-is-a-big-task-2019-06-10

    edited June 12 FileMakerFeller
  • Reply 2 of 23
    lkrupplkrupp Posts: 7,096member
    In Apple’s case Tim Cook made the decision to twist the dragon’s tail over privacy and legal access to devices by authorities. While many here applauded the decision all it did was turn the dragon’s attention towards Apple. These forums heat up every time we read of an incident where access to an iOS device is demanded and refused on 5th Amendment grounds, whether or not a search warrant was issued. I’m here to tell you that we have already lost the war. From face recognition to video cameras we have already lost our privacy and there’s no going back. Be it Democrat or Republican regimes the surveillance dystopia is here. The government will eventually know everything about our lives both public and private. Even now we are beholding to the government. Many of us are completely dependent on the government for our very existence. The government is not beholding to us because we can’t vote any of them out.
  • Reply 3 of 23
    lkrupplkrupp Posts: 7,096member
    Now Apple’s app store policies are under attack both here and elsewhere. Supporters of Apple’s app store like to claim that third party app stores will open the floodgates to spyware, malware, and all manner of nastiness. They also claim Android is already there but we never see objective reports of just how many Android users have had their bank accounts emptied out, their private photos stolen, or their devices locked down by ransomware. Where are those statistics? If this comes to past will there really be a thriving third party app market? How many developers will actually choose to distribute their apps in third party app stores rather than Apple’s official one? Are there thriving third party app stores for Android because I’ve never heard of one other the Google’s own store. The fake techies are always pounding their chest over SIDE LOADING!!!
  • Reply 4 of 23
    Delrahim's past lobbying for Google (which was specifically related to anti-trust issues) and Apple doesn't just "suggest" a conflict of interest. It is a clear conflict of interest.
    dysamoriamuthuk_vanalingam
  • Reply 5 of 23
    jbdragonjbdragon Posts: 2,120member
    lkrupp said:
    Now Apple’s app store policies are under attack both here and elsewhere. Supporters of Apple’s app store like to claim that third party app stores will open the floodgates to spyware, malware, and all manner of nastiness. They also claim Android is already there but we never see objective reports of just how many Android users have had their bank accounts emptied out, their private photos stolen, or their devices locked down by ransomware. Where are those statistics? If this comes to past will there really be a thriving third party app market? How many developers will actually choose to distribute their apps in third party app stores rather than Apple’s official one? Are there thriving third party app stores for Android because I’ve never heard of one other the Google’s own store. The fake techies are always pounding their chest over SIDE LOADING!!!
    Because Google has zero presence in China, they have their own 3rd party app stores and they are infested wit everything you can think of. But these politicians thinking Google and Facebook and others as a Monopoly? They're not!!! How about going after the real Monopolies, the Cable Company's!!! ISP are the real monopolies out there. Sky high prices along with CAPS to help protect their own services, etc. Why not do something about that. Like killing all these lock downs that keep them a monopoly. We should have Comcast and TMC and everyone else fighting for customers in every town and city out there. Creating new Fiber Networks to people should be far simpler. Not be fraught every step of the way.
    FileMakerFellerbadmonk
  • Reply 6 of 23
    frantisekfrantisek Posts: 470member
    Concentrating too much power in irresponsible hands is never good. We see it on privacy issues everywhere.Wise new rules for holding big power would be essential. As there is one important aspect.

    Economics have to serve society not society economics.

    dysamoria
  • Reply 7 of 23
    lkrupp said:
    Now Apple’s app store policies are under attack both here and elsewhere. Supporters of Apple’s app store like to claim that third party app stores will open the floodgates to spyware, malware, and all manner of nastiness. They also claim Android is already there but we never see objective reports of just how many Android users have had their bank accounts emptied out, their private photos stolen, or their devices locked down by ransomware. Where are those statistics? If this comes to past will there really be a thriving third party app market? How many developers will actually choose to distribute their apps in third party app stores rather than Apple’s official one? Are there thriving third party app stores for Android because I’ve never heard of one other the Google’s own store. The fake techies are always pounding their chest over SIDE LOADING!!!
    Popular app stores for Android: Play Store, Amazon App Store. OEM app stores from Samsung, Huawei, Xiaomi and others.  Major Chinese App stores like Tencent's MyApp, Baidu's Mobile Assistant, 360 Mobile Assistant. Xiaomi also has a dedicated Game Center App Store.  There are many more large players in the Android app universe, and a ton more medium and small players.  That revenue pie gets split 6 ways from Sunday.  That's one of the reasons US and EU regulators are looking at Apple.  iOS revenue gets split one way and one way only.   
  • Reply 8 of 23
    SpamSandwichSpamSandwich Posts: 31,131member
    Delrahim's past lobbying for Google (which was specifically related to anti-trust issues) and Apple doesn't just "suggest" a conflict of interest. It is a clear conflict of interest.
    A lobbyist who no longer lobbies for certain clients is no different from a salesman who stops selling Hondas and starts selling Fords. Where’s the conflict of interest if the prior association was divulged and it no longer exists?
    gatorguylolliver
  • Reply 9 of 23
    Delrahim's past lobbying for Google (which was specifically related to anti-trust issues) and Apple doesn't just "suggest" a conflict of interest. It is a clear conflict of interest.
    A lobbyist who no longer lobbies for certain clients is no different from a salesman who stops selling Hondas and starts selling Fords. Where’s the conflict of interest if the prior association was divulged and it no longer exists?
    That's reductionist and wrong.  The salesman who stops selling Hondas and starts selling Fords has -here's the crux- no influence over the sales of all cars.  Delrahim's job gives him influence over all companies.  He should recuse himself to remove the appearance of conflict of interest.  There is no win for him in this situation.  Hypothetically, should it come to pass that he rules in favor of the tech companies, interested parties could claim they had favorable status due to an established relationship.  A ruling against tech companies could elicit claims of bias against former employers.  Lose/lose.  Not knowing the extent of his relationship with the companies after employment simply invites more questions.  

    Look no further that Ajit Pai for an example of how this relationship can be viewed.
    foregoneconclusiondysamoriamuthuk_vanalingamFileMakerFeller
  • Reply 10 of 23
    SpamSandwich said: Where’s the conflict of interest if the prior association was divulged and it no longer exists?
    Conflict of interest = potential for bias. He doesn't need to be currently lobbying for Google/Apple or hiding his lobbying career with Google/Apple in order to be viewed as potentially biased in an antitrust case involving those specific companies. 
    dysamoriamuthuk_vanalingam
  • Reply 11 of 23
    gatorguygatorguy Posts: 20,617member
    SpamSandwich said: Where’s the conflict of interest if the prior association was divulged and it no longer exists?
    Conflict of interest = potential for bias. He doesn't need to be currently lobbying for Google/Apple or hiding his lobbying career with Google/Apple in order to be viewed as potentially biased in an antitrust case involving those specific companies. 
    It's been about 12 years since he had any connection to those two but you are correct it's about appearances more so than an ability to be non-biased.
    muthuk_vanalingam
  • Reply 12 of 23
    1348513485 Posts: 50member
    That's reductionist and wrong.  The salesman who stops selling Hondas and starts selling Fords has -here's the crux- no influence over the sales of all cars.  Delrahim's job gives him influence over all companies.  He should recuse himself to remove the appearance of conflict of interest.  There is no win for him in this situation.  Hypothetically, should it come to pass that he rules in favor of the tech companies, interested parties could claim they had favorable status due to an established relationship.  A ruling against tech companies could elicit claims of bias against former employers.  Lose/lose.  Not knowing the extent of his relationship with the companies after employment simply invites more questions.  

    Look no further that Ajit Pai for an example of how this relationship can be viewed.
    So claims of bias if a favorable ruling, or claims of bias if an unfavorable ruling. How is this different between any opposing viewpoints regarding any decision?

    It hinges on proving that a past association still represents a conflict of interest. So Spam is correct. 

    I'm well aware that the current political situation seems to have made lobbying a prerequisite experience for any administrative job, and I'm not in the Agit Pai fan club.
  • Reply 13 of 23
    gatorguy said:
    SpamSandwich said: Where’s the conflict of interest if the prior association was divulged and it no longer exists?
    Conflict of interest = potential for bias. He doesn't need to be currently lobbying for Google/Apple or hiding his lobbying career with Google/Apple in order to be viewed as potentially biased in an antitrust case involving those specific companies. 
    It's been about 12 years since he had any connection to those two but you are correct it's about appearances more so than an ability to be non-biased.
    It's been 12 years since he's worked with those companies in an official capacity.  We have no idea his connection to the people he worked with at each company.  I still have relationships with former co-workers from more than 20 years ago.  Some good, some not so much.  Nothing good can come of his participation.  The specter of bias, for or against, would always be a part of any proceeding he'd be heading.
    foregoneconclusiondysamoriamuthuk_vanalingam
  • Reply 14 of 23
    thttht Posts: 3,212member
    SpamSandwich said: Where’s the conflict of interest if the prior association was divulged and it no longer exists?
    Conflict of interest = potential for bias. He doesn't need to be currently lobbying for Google/Apple or hiding his lobbying career with Google/Apple in order to be viewed as potentially biased in an antitrust case involving those specific companies. 
    For SpamSandwich, the rules are supposedly different for government employees. For private to private, there are not any rules really.

    For government employees, who make or who take part in the decision making for the distribution of billions of dollars and pass regulations that control the flow of billions of dollars (or less), there are some rather serious rules. Broken every day, but there are rules. There are rules because of rampant abuse in past history. There minimally needs to be a suitable time period where the influence of a company’s money (employment, stock options, power, etc) stops have an influence on a government employee’s decisions.

    It goes both ways for government employees. A government employee can’t quit and work for a company whom they had some kind of monetary or regulatory influence on while a government employee. They have wait 1 to 2 years. It really should be 5 to 10 years. This supposedly prevents the government employee from making a favorable decision for a company and being rewarded through employment, money from the same company later. Same thing in reverse, a new government employee shouldn’t be in the position to reward prior interests as that can enrich themselves as well.

    Who knows, maybe this guy has been out of the lobbying business for tech giants for several years, in which case, he’ll pass muster. But, bah, I don’t see any favorable consequence from these actions whatsoever. It’ll surely enrich some people (you can already see the fund managers salivating), but for the public at large? My bet is they will get nothing, if not, will have a worse outcome, with higher costs and less convenience.
  • Reply 15 of 23
    gatorguygatorguy Posts: 20,617member
    gatorguy said:
    SpamSandwich said: Where’s the conflict of interest if the prior association was divulged and it no longer exists?
    Conflict of interest = potential for bias. He doesn't need to be currently lobbying for Google/Apple or hiding his lobbying career with Google/Apple in order to be viewed as potentially biased in an antitrust case involving those specific companies. 
    It's been about 12 years since he had any connection to those two but you are correct it's about appearances more so than an ability to be non-biased.
    It's been 12 years since he's worked with those companies in an official capacity.  We have no idea his connection to the people he worked with at each company.  I still have relationships with former co-workers from more than 20 years ago.  Some good, some not so much.  Nothing good can come of his participation.  The specter of bias, for or against, would always be a part of any proceeding he'd be heading.
    Heck we don't know if the people heading this up might be Google haters and long-time Apple fans or vice-versa. One or some with influence could be one of the irrational/uninformed Apple or Android trolls we run into once in awhile. We don't know if this is politically influenced, meant to pressure the techs into "voluntary" cooperation, or driven by real antitrust concerns for consumers. Who knows?

    We're trusting everyone involved in the decision-making process to be non-biased but there's no assurances they are since we wouldn't have any way to know. Personally I think Delrahim might be the least of anyone's concerns. Everyone is watching him for signs of bias. What do we know about anyone else, who they've worked for in the past, who their friends are now, what their personal opinions are of Google and Apple, etc.? Nothing.
    edited June 12
  • Reply 16 of 23
    13485 said:
    That's reductionist and wrong.  The salesman who stops selling Hondas and starts selling Fords has -here's the crux- no influence over the sales of all cars.  Delrahim's job gives him influence over all companies.  He should recuse himself to remove the appearance of conflict of interest.  There is no win for him in this situation.  Hypothetically, should it come to pass that he rules in favor of the tech companies, interested parties could claim they had favorable status due to an established relationship.  A ruling against tech companies could elicit claims of bias against former employers.  Lose/lose.  Not knowing the extent of his relationship with the companies after employment simply invites more questions.  

    Look no further that Ajit Pai for an example of how this relationship can be viewed.
    So claims of bias if a favorable ruling, or claims of bias if an unfavorable ruling. How is this different between any opposing viewpoints regarding any decision?

    It hinges on proving that a past association still represents a conflict of interest. So Spam is correct. 

    I'm well aware that the current political situation seems to have made lobbying a prerequisite experience for any administrative job, and I'm not in the Agit Pai fan club.
    It's different because there is a provable relationship already established.  If there was no history, there'd be no basis for a claim of bias beyond sour grapes.  There is history.    It also does not hinge on proving anything.  Not really sure where you got that.   
  • Reply 17 of 23
    gatorguy said:
    gatorguy said:
    SpamSandwich said: Where’s the conflict of interest if the prior association was divulged and it no longer exists?
    Conflict of interest = potential for bias. He doesn't need to be currently lobbying for Google/Apple or hiding his lobbying career with Google/Apple in order to be viewed as potentially biased in an antitrust case involving those specific companies. 
    It's been about 12 years since he had any connection to those two but you are correct it's about appearances more so than an ability to be non-biased.
    It's been 12 years since he's worked with those companies in an official capacity.  We have no idea his connection to the people he worked with at each company.  I still have relationships with former co-workers from more than 20 years ago.  Some good, some not so much.  Nothing good can come of his participation.  The specter of bias, for or against, would always be a part of any proceeding he'd be heading.
    Heck we don't know if the people heading this up might be Google haters and long-time Apple fans or vice-versa. One or some with influence could be one of the irrational/uninformed Apple or Android trolls we run into once in awhile. We don't know if this is politically influenced, meant to pressure the techs into "voluntary" cooperation, or driven by real antitrust concerns for consumers. Who knows?

    We're trusting everyone involved in the decision-making process to be non-biased but there's no assurances they are since we wouldn't have any way to know. Personally I think Delrahim might be the least of anyone's concerns. Everyone is watching him for signs of bias. What do we know about anyone else, who they've worked for in the past, who their friends are now, what their personal opinions are of Google and Apple, etc.? Nothing.
    True we don't know anything about anyone connected to this... 'cept one person: Delrahim.  We know he was employed by Google and Apple.  We know his employment dealt specifically with anti-trust issues.  Would those relationships affect his judgement? IDK. Is it worth the risk to find out?  Nope. Especially when we have a way to avoid it.  It's why recusal is a thing.  Speculating about unknown motivations of unknown entities is folly and ultimately useless.  Speculation about someone with a known relationship to affected parties, who can materially affect events is relevant...  There is no upside to Delrahim presiding over anything related to Apple and Google.  It introduces unnecessary complication where none has to be.
    edited June 12 dysamoriamuthuk_vanalingamFileMakerFeller
  • Reply 18 of 23
    SpamSandwichSpamSandwich Posts: 31,131member
    gatorguy said:
    SpamSandwich said: Where’s the conflict of interest if the prior association was divulged and it no longer exists?
    Conflict of interest = potential for bias. He doesn't need to be currently lobbying for Google/Apple or hiding his lobbying career with Google/Apple in order to be viewed as potentially biased in an antitrust case involving those specific companies. 
    It's been about 12 years since he had any connection to those two but you are correct it's about appearances more so than an ability to be non-biased.
    When a person leaves a job in which there’s a potential for conflict of interest or potential competitive conflict, they are typically contractually restricted for a year, sometimes longer. Certainly not ten or twelve years. There’s no conflict of interest here.
    edited June 12
  • Reply 19 of 23
    dysamoriadysamoria Posts: 2,152member
    The conflict of interest that has me even more concerned is that this is happening under the Trump administration. I don’t see this as remotely believably aimed at fixing anticompetitive practices and helping consumers. I suspect it is the targeting of entities that are perceived as political opponents. The tech giants seem to lean left (only because tech tends to lean toward science and science tends to appear to have a left-leaning political bias) AND they also have power (money is power and information technology is power). That’s a threat to the authoritarian-leaning current administration.

    Under another administration, I’d be in support of this attempt at regulation. This administration is explicitly against regulation. This situation therefore has the odor of ulterior motivation.
    muthuk_vanalingamFileMakerFeller
  • Reply 20 of 23
    sdw2001sdw2001 Posts: 17,035member
    dysamoria said:
    The conflict of interest that has me even more concerned is that this is happening under the Trump administration. I don’t see this as remotely believably aimed at fixing anticompetitive practices and helping consumers. I suspect it is the targeting of entities that are perceived as political opponents. The tech giants seem to lean left (only because tech tends to lean toward science and science tends to appear to have a left-leaning political bias) AND they also have power (money is power and information technology is power). That’s a threat to the authoritarian-leaning current administration.

    Under another administration, I’d be in support of this attempt at regulation. This administration is explicitly against regulation. This situation therefore has the odor of ulterior motivation.

    You can suspect whatever you want, but there is no evidence it's true.  Now, on the other hand, the Obama administration provably targeted political opponents with the IRS.  They targeted journalists.  They spied on Sheryl Atkinson, and tried to criminally pursue James Rosen.  They also used intelligence agencies and the State department to spy on, frame, and attempt to remove the duly-elected President.   This stuff actually and provably happened.  Right now, your position seems to be that you don't trust Orange Man, so his entire administration must be corrupt and can't be trusted to even look at these matters fairly.   

    That position doesn't make sense, no matter what you think of the Orange Man.  Under whose administration did these probes really get moving?  Hint:  It wasn't Obama.  It was under Trump and his new AG.  Moreover, Trump has worked with Cook, far more than has been publicized.  True, he goes after Bezos, but that's presumably more about WaPo.   
    FileMakerFeller
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