Why Everything is a Monopoly... Again - 2024/08/21
//Summary - Level-A2//
Last week, Judge Amit Mehta ruled that Google is a monopoly, violating antitrust laws by making deals that prevent competition. Monopolies are standard among big companies, but this decision shows that regulators are becoming stricter. While monopolies can hurt consumers and workers, breaking them up is challenging due to corporate influence and limited regulatory power.
//Summary - Level-C2//
The video outlines how monopolies have become pervasive in modern corporate America. Google's recent antitrust case highlights the issue, as it was found guilty of maintaining a monopoly through anti-competitive practices. Monopolies now thrive due to diverse modern products, easy access to capital for acquisitions, and weakened regulatory enforcement. These monopolies harm consumers by stifling competition and workers by limiting job mobility. Despite efforts by some regulators like F.T.C. Chairwoman Lina Khan, corporate consolidation continues unchecked. The revolving door between regulators and corporations further exacerbates the problem, making it challenging to curb monopolistic power.
//SUMMARY//
Last week, between record market crashes and rebounds, endless election nonsense, and the wrapping up of the Olympic games, one of the most critical legal verdicts ever was being made.
District judge Amit Mehta ruled that Google was a monopolist AND acted as one to maintain its monopoly.
This surprised… absolutely nobody… but it also surprised everybody because every trillion-dollar company in the world today is a monopoly of some kind… illegal or otherwise.
The market assumption was that regulators would keep looking the other way and let this happen forever… but that is changing… which is bad news for corporate America… because, I don't know if you have noticed, there aren't that many companies anymore…
For an alarming number of major companies, becoming a monopoly isn't just an excellent way to maximise profits; it's the ONLY way they can make a profit.
Not all monopolies are necessarily illegal and hot take alert… but some of them can even be good for consumers…
A company can dominate the market if its product is better than its competitors or if no competitors try to compete because one company has such a commanding lead.
For a long time, Google had the best search engine on the internet.
But people chose to google things because that would typically give them the best search results.
It's not illegal unless the company uses its market dominance to entrench its position and make it harder for others to compete.
The goods and services we consume today are far more varied than ever.
Four decades ago, there WEREN'T any search engines to monopolise, and the world's biggest companies made far more basic products.
Take U.S.S. Steel and N.V.I.D.I.A. Both companies were the most valuable in the world at their respective peaks. Both made products primarily to service other businesses and were at the forefront of an industrial trend. U.S.U.S. Steel was making… well… steel right as America was on a building spree, and N.V.I.D.I.A. was making H100 GPUs right as the world was puA.I.ing A.I. into everything.
The difference is that steel beams are a fundamental product compared to cutting-edge proprietary microprocessors.
According to company filings, N.V.I.D.I.A. sold one hundred fifty thousand of these chips to Microsoft alone and another one hundred fifty thousand to Meta so that the companies could accelerate the rate at which the internet is turned into procedurally generated slop…
N.V.I.D.I.A. owns the marA.I.t for A.I. computing because it developed C.U.D.A., the industry standard for building machine learning models.
Remember, dominating a market because you can undercut your competitors or force suppliers not to work with them is illegal. Still, monopolising the monopolising your product is better is entirely fair game.
So it's time to learn How Money Works to discover why suitable monopolies don't last and why we are suddenly getting so many of the wrong kind instead.
1)
00:00
Last week, between record market crashes and rebounds, endless election nonsense and the end of the Olympics, one of the most important legal rulings ever was made.
District Judge Amit Meta ruled that Google was a monopolist and had acted as one to maintain its monopoly. This surprised nobody, but it also surprised everybody because every trillion-dollar company in the world today is a monopoly of some kind, illegal or otherwise.
The market assumption was that regulators would continue to look the other way and let this go on forever.
2)
00:33
but that's changing, which is bad news for corporate America because I don't know if you've noticed, but there aren't many companies left for an alarming number of big companies.
Becoming a monopoly isn't just an excellent way to maximise profit—it's the only way they can make a profit. Hey Tyler, Google lost its antitrust case with the Department of Justice.
The judge found they violated antitrust laws; the distribution agreements were found to be anti-competitive
3)
00:58
They pay Apple in violation of section two of the Sherman Act, but they pay similar amounts to Samsung, Motorola, and L.G.
I worked with a couple of interns last year, and every intern I've seen come on has exuded monopolist behaviour and acted as one to maintain its monopoly. Not all monopolies are necessarily illegal.
Some of them can even be good for consumers. A company can dominate the market if its product is better than all its competitors or if no competitors try to compete.
4)
01:34
because one company has such a commanding lead. For a long time, Google had the best search engine on the internet. It's a bit more questionable these days, but people choose to google things because that would typically give them the best search results.
That's not illegal unless that company uses its market dominance to entrench its position and make it harder for others to compete today; plenty of search engines are just as good if not better than Google. What Google got into trouble for was paying companies like Apple billions of dollars
5)
01:59
Every year, they make their search engine the default on their mobile phones, making it much harder for alternative search engines to compete.
Let's be honest: Who changes our mobile phone's default search engine options? I'm not a lawyer, and although I consulted one while writing this brief outline, if you ever find yourself running a Fortune 500 company, you probably shouldn't use a YouTube video as a guide to how to be anti-competitive.
6)
02:21
The reason this otherwise standard antitrust lawsuit is such a big deal is that monopolies have become an epidemic in the modern corporate world for three simple reasons:
The first reason is that more ways exist to create a monopoly than ever before. The goods and services we consume today are far more diverse than they have ever been at any point in modern history. Four decades ago, there were no search engines to monopolise, and the monopolised biggest companies made far more basic products: take steel.
7)
02:50
Nvidia and both companies were the most valuable in the world at their respective peaks. Both made products primarily to service other businesses and were at the forefront of an industrial trend. Steel was making well steel.
Just as America was on a building spree, Nvidia made h100 GPUs, and the world was pumping A.I. into everything. The difference is that steel beams are a fundamental product compared to cutting-edge proprietary microprocessors; according to the company filings, Nvidia sold 150,000 of these chips to Microsoft alone.
8)
03:25
And another 50,000 a meta, so that companies can accelerate the rate at which the internet is turned into a procedurally generated flop: each one of these GPUs sells for around $25,000, according to Baron, but it only costs the company a few hundred to manufacture;
Nvidia can get away with charging these margins because it's a monopoly, and these companies have nowhere else to go. NviA.I.a owns the A.I. compute market because it developed Cuda, the industry standard for building machine learning models; remember, you dominate a market because you can undercut your competitors.
9)
03:56
Or forcing suppliers not to work with you is legal, but monopolising a market because your product is better is perfectly fair:
It's hard to make a steel beam so good that any other steel beam is useless by comparison, so after antitrust laws were introduced, it was much harder to maintain a monopoly on an essential product.
I only use it as an example because talking about Nvidia in a video makes the YouTube algorithm recommend that video about Nvidia to people who want confirmation that their Nvidia shares will make them rich. Apple creates a monopoly with its product ecosystem.
10)
04:25
Microsoft effectively has a monopoly on operating systems outside of Apple products. Google has a monopoly on search and online video; Aramco has a monopoly on Saudi oil, and Meta has a monopoly on boomer memes.
These companies have reached the promised land of market dominance, but trillions of dollars have also been invested in companies that do nothing.
11)
04:54
But take market share, food delivery, ride-shaA.I.ng, and even A.I. applications tend to lose a lot of money and are only kept alive by constant rounds of investor funding;
The only way these businesses make sense is if they outlast their competitors by gaining market share through a product often made more attractive than it should be by selling it below cost.
Companies like Lucid MotorA.I. Uber and Open A.I. lose money on every new customer and user they gain, but their investors don't care as long as they gain market share;
if these companies become monopolies, they can fatten their margins and join the trillion-dollar club with the other tech monopolies.
12)
05:23
This sounds pretty dystopian, but it can benefit you as an average person in some rare circumstances.
For a while, you can enjoy incredibly cheap food delivery partly paid for by some Silicon Valley venture capitalist.
The user experience of streaming movies was better when Netflix controlled the entire streaming market. Hence, it's time to learn how money works to discover why excellent monopolies don't last and why we suddenly get so many of the wrong kind instead.
13)
05:46
Today, thousands of companies worldwide are started with the sole intention of being acquired by a larger, more established company or, more recently, a private equity firm.
According to the corporate law firm, tax structures have incentivised entrepreneurs to seek an exit rather than build a sustainable business that will provide them with non-capital gains income over the long term.
14)
07:16
White in case: The volume of global mergers and acquisitions has tripled in the last two decades alone, and one of the best ways to build a monopoly is to buy out every other competitor, which is precisely what happened just this week when global food giant Mars agreed to buy Kenova, the maker of Pringles and other snack foods, for $36 billion.
This is one of the most significant corporate acquisitions in an industry already dominated by a few companies. With food prices as high as they are, more corporate consolidation doesn't help.
15)
07:48
but it's only becoming more popular because of the second reason, which is that it's just become so easy. Big companies have a lot of cash, and they've been able to borrow even more at meagre interest rates for a very long time.
Even now, after the recent interest rate hikes, interest rates on institutional borrowing are much cheaper than they have been for most of American corporate history.
This has made it easy for companies to buy every company in their field, and it's made it possible to build companies where the only way the founders will ever make any money is by selling it to someone else.
16)
08:15
You're watching this video on YouTube, which Google acquired before it made any money. It is now the company's biggest revenue centre outside of search advertising.
The growth of private equity has also helped this by providing another exit option for business owners. Private equity acquisitions are usually smaller in scale, but that doesn't mean they can't create monopolies.
A typical business strategy of private equity is to roll up businesses.
17)
08:40
If you ever found yourself as a private equity manager, here is how you would do it: you would buy up lots of local businesses from their owners. Depending on the size of your fund, these will most likely be small and unglamorous businesses like plumbing companies, HVAC shops or local mechanics.
These businesses are great acquisition targets because they make a nice stable profit, and the owners don't have as many options to sell as a more giant, better-known company, which means when they want to retire or step away from their business are one of the only people they can get money from
18)
09:10
Your next step is centralising your accounting, bookkeeping, marketing, and customer support into one office. This will cut costs, but it also means that your businesses will not compete with each other; no private equity fund will be able to buy all the mechanic shops in America.
But you don't need to if you own all the shops in a local area. You still have a monopoly—it's just a regional monopoly, and unless people want to drive two hours to get their car fixed, they will have to pay what you charge them.
19)
09:37
This is even better than the big global monopolies because you are much less likely to get into trouble with the F.T.C. After all, you are too small to get on their radar, not that it matters because of the third reason everything is a monopoly these days, so this probably won't shock you.
However, regulators like the F.T.C. and their equivalents in other countries have not done an excellent job fighting monopolies.
20)
10:02
These organisation's strategies. The first is blocking mergers or acquisitions that it deems create a monopoly. Remember, a monopoly can only exist if market power is achieved through a better product, so merging two or more companies that would have too much market power is technically against the rules.
The second strategy is breaking up companies that get too big into smaller competing companies, like what happened with AT&T and Standard Oil. The problem is that it hasn't been done either.
21)
10:33
The big, famous corporate breakups of the 20th century have regressed and are slowly merging back together; monopolies are the natural state of corporations.
Unless the authorities act, even companies famously broken up will eventually return to monopolistic equilibrium.
According to public data compiled by the Washington Center for Equitable Growth, funding for the F.T.C. and the Department of Justice and Antitrust Division has been progressively cut since 2008, even though the volume of deals has massively increased in complexity since then, which means they are trying to do more with less.
22)
11:03
The F.T.C. also has to take companies to court before they can block mergers or break up companies, which means they can only pursue so many cases at any given time; there is also the not-so-secret revolving door between the people who are supposed to be regulating these companies and high paying jobs working for the companies themselves;
Joseph Simons was the former chairman of the Federal Trade Commission. After leaving office, he became a partner at Paul Weiss, a law firm specialising in corporate mergers.
23)
11:33
The chairwoman before him is now a partner at Wilson Cini, one of the largest corporate law firms in the world, and you'd never guess it. Still, the chairwoman before her also became a partner at a law firm specialising in specialised inquiries. If you ever get appointed chairwoman of the F.T.C.
There's a real incentive to do a good job, but not so good that you can't get a high-paying job in the private sector as soon as your appointment ends. The current chairwoman, Lena Khan, is one of the most aggressive F.T.C. chairwomen in decades.
24)
12:04
She's won some real victories, like this recent Google ruling and banning non-compete agreements. However, this has also made her highly unpopular, with business figures lobbying for her removal. Unfortunately, when her term is up, a partner position at a prestigious law firm probably won't be waiting for her.
Buried in here is the most pernicious thing that monopolies do: they're bad for consumers but even worse for workers if you work in an industry controlled by a monopoly.
25)
12:35
You have nowhere else to go, which means they can get away with paying you just enough to keep you from retraining elsewhere; getting rid of non-compete clauses makes this much more challenging for companies to do.
Why Everything is a Monopoly... Again - 2024/08/21
https://www.youtube.com/watch?v=ukUGMPB1PT8
Add info No1)
Non-Competes Ruined Your Career... Now They Are Banned - 2024/05/14
https://www.youtube.com/watch?v=rrRiuSuBpXk
//Summary - Level-A2//
The Federal Trade Commission (F.T.C.) has banned most non-compete agreements. These contracts stopped workers from getting better jobs and kept wages low. The ban will help workers find better opportunities, create new businesses, and increase innovation. Companies may resist this change, but it aims to make competition fairer and improve employee job options.
//Summary - Level-C2//
The Federal Trade Commission (F.T.C.) banned most non-compete agreements, which prevented employees from joining competitors and suppressed wages. The F.T.C. argues that competition will thrive despite corporate pushback, predicting a rise in new businesses and patents. This decision challenges companies that stifle innovation to protect their interests, signalling a shift toward empowering employees and promoting fair competition.
Corporate America lost one of its most powerful tools to keep people from getting better jobs.
Non-compete contracts that ban workers from finding a better job have been used to keep wages low, and even if you have never personally signed one of these agreements, they will still be hurting you. Late last month, the F.T.C. banned these deals from being put into the contracts for MOST employees, and most existing non-competes will be phased out over the next three [3] months…Unless you run a business that relies on keeping employees in dire conditions for poor pay, this ruling will be good for you.
But… that doesn't mean corporate America is going down without a fight.
A non-compete agreement is a condition in a contract that bans an employee from working for a competitor company for some time after they quit or get fired from their current position. Companies claimed these terms were essential because they didn't want to spend time and money training staff, giving them proprietary information to get a job with their competitor, and taking all that valuable information over to them.
They have also said that without non-compete agreements, their competitors could "free-ride" off them by just poaching their staff after they invested in hiring and training inexperienced workers. The Federal Trade Commission and its controversial new chair, Lina Khan, have called this a complete bull. In their announcement of non-compete agreements being put into employment contracts, the F.T.C. also said that even if this does hurt some big businesses, that's a good thing. The free-rider argument doesn't work because those businesses could also attract talent from their competitors.
All they need to do is give their employees a more attractive job offer, and most people are happy to switch jobs… If people take company information with them, the F.T.C. argues that the only group this is bad for is a company that doesn't want to compete. Most successful companies are started by people who were previously employees working for a company in the same industry.
Gary Tann, the C.E.O. of Y-Combinator, an early-stage startup incubator, has said that the best companies he deals with are ones started by people who first gained experience in the industry they want to disrupt by working in it… In their report, the Federal Trade Commission estimates that this new will lead to the formation of at least eight thousand five hundred [8,500+] extra businesses every year and between seventeen thousand and TWENTY-NINE THOUSAND [17,000 – 29,000] new patents every year.
According to the organisation, people aren't legally allowed to innovate or start a business. The only people who lose in this situation are the companies that don't want to compete, which is why the F.T.C., not the Department of Labor, ruled. The F.T.C. usually organises businesses that do not form monopolies.
It does this by blocking mergers or acquisitions that would give the new mega-corporation too much power. In the last three years, F.T.C. has tried its best to stop some large company mergers, but it has lost all of its recent cases in court, allowing the mergers to go ahead. The F.T.C. can also break up companies with too much market power, but it hasn't done that in over FORTY YEARS…
The F.T.C. usually makes rulings on anti-competitive, illegal practices, such as non-compete agreements. You would not think this would be a hard case for them to make since the words" compete" are right there in the name, but the F.T.C. is already being sued over this ruling by an industry body representing companies.
But let's be honest with one another. Even though the companies and the F.T.C. will not admit it, non-compete agreements were never about competition between companies; they were about competition between companies and their employees.
Add info No2)
TikTok opposes the bilU.S.s passage in the U.S. House of Representatives, saying that bannU.S.g streaming in the U.S. "violates freedom of speech."
April 22, U.S.: On the 21st, the U.S. House of Representatives approved the video-posting app TikTok. He protested the bill's passage to ban the app, saying that prohibiting its distribution in the United States would "trample on the freedom of speech" of 170 million Americans.
On the 20th, the U.S. House of Representatives passed a bill to ban "TikTok" from China. The House voted 360-58 to pass the bill, which would prohibit the distribution of apps across the U.S. if ByteDance, the parent company of WhatsU.S., does not sell its U.S. business within 360 dU.S.
This is part of a U.S. foreign policy package that includes aid to Ukraine. The bill is expected to pass the Senate as early as this week and be signed by President Joe Biden.
If the ban is passed, ByteDance will be barred from streaming across the U.S. unless it sells its shares within nine months.
Add info No3)
Telegram boss banned from leaving France in criminal probe
https://www.bbc.com/news/articles/c985ppy0znyo
//Summary - Level-C2//
Telegram founder Pavel Durov is under formal investigation in France for alleged involvement in organised crime on the app, including facilitating illegal transactions and child sexual abuse distribution. He remains under judicial supervision, paying a €5m deposit and is restricted from leaving France. His arrest has sparked debates on freedom of speech, moderation, and political persecution.
Paris prosecutors say Telegram boss and founder Pavel Durov has been placed under formal investigation in France as part of a probe into organised crime on the messaging app.
Mr Durov, 39, has not been remanded in custody but placed under judicial supervision and has to pay a €5m (£4.2m; $5.6m) deposit.
The Russian-born billionaire, a French national, must also show up at a French police station twice a week and is not allowed to leave French territory.
Mr Durov was first detained upon arrival at Le Bourget airport north of Paris last Saturday under a warrant for offences related to the app.
Add info No4)
Telegram C.E.O. arrested in France for failing to curb criminal use.
https://www.bbc.com/news/articles/cp8ne8r1yy0o
https://www.bbc.com/news/articles/ckg2kz9kn93o
On August 26, 2024, Pavel Durov, founder and C.E.O. of the communication app Telegram ( On the 24th, French police arrested Durov (39) at an airport in northern Paris. Authorities said the arrest was based on an arrest warrant for crimes related to the app. Telegram noted on the 25th that it had nothing to hide. "There is no evidence that Telegram has violated the terms of the agreement," the company said in a statement.
An investigation is underway into Telegram's alleged failure to take measures to curb its use in criminal activities, and C.E.O. Durov is reportedly being held responsible. Telegram has allegedly failed to cooperate with law enforcement authorities in connection with crimes, including drug trafficking, child sexual content and fraud.
According to French media, the C.E.O. was arrested upon arriving at Le Bourget airport on a private jet.
AFP reported, citing a judicial source, that Durov's detention will be extended to the 25th and could last up to 96 hours.
Add info No5)
Meta C.E.O. criticises Biden administration "pressured to censor COVID-19 information"
August 28, 2024
https://www3.nhk.or.jp/news/html/20240828/k10014562091000.html
In a letter to Congress, Meta's C.E.O., the American II.T.giant that operates Facebook, claimed that Biden administration officials repeatedly pressured Meta to censor information related to the new coronavirus and criticised the government's response.
Zuckerberg, the C.E.O. of Meta, a prominent American I.I.T. company, revealed this in a letter to the House of Representatives Judiciary Committee dated the 26th of this month.
In the letter, he claimed that "in 2021, Biden administration officials repeatedly pressured Meta to censor information related to the new coronavirus, including humour and satire, for several months" and that he was asked to scrutinise the appropriateness of the content posted on Meta.
Zuckerberg said the company decided to delete the posts but criticised the government's pressure, saying, "The government pressure is wrong, and we regret not speaking out about this. We stand prepared to veto it if it happens again."
A White House spokesperson told CNN, "At the time, the administration was urging responsible action to protect public health and safety."
The letter was published on social media by the Republican Party, which holds a majority in the House of Representatives. It included a comment, "Zuckerberg acknowledged that the Biden-Harris administration pressured Americans to censor. " With the presidential election coming up in November, it is believed that the Republicans also aim to criticise the Democratic administration.
Add info No6)
Who is a terrorist?
https://www.brookings.edu/articles/who-is-a-terrorist-actually/
The text discusses the debate surrounding the labelling of groups like Black Lives Matter (B.LB.L.M.nd B.L.M.tifa as terrorists. Critics argue that B.LB.L.M..L.M.Antifa should be labelled as terrorists, supported by specific political figures. However, B.L.MB.L.M.s are overwhelmingly peaceful, and Antifa's violence is localised, not designed to instil widespread fear, which is crucial in defining terrorism. The text emphasises that terrorism involves political violence by non-state actors intended to cause psychological effects beyond the immediate target. Misusing the terrorism label, especially for largely peaceful protests, can lead to overreactions and undermine accurate responses.
Add info No7)
European Court of Justice upholds decision to impose additional taxes on Apple.
September 10, 2024 18:51
https://www3.nhk.or.jp/news/html/20240910/k10014578331000.html
E.U. scores 'big win' in court against Apple, Google
Brussels (Belgium) (AFP) – On Tuesday, the E.U.'s top court delivered two major victories in the bloc's battle to rein in tech giants by ruling against Apple and Google in separate legal sagas with billions of euros at play. On September 10, 2024
//SUMMARY//
On the 10th, the European Court of Justice, the highest court in the European Union, ruled in favour of the European Commission's decision to impose additional taxes of up to 13 billion euros, or more than 2 trillion yen in Japanese yen, because the tax benefits that American II.T.. giant Apple has received from the Irish government constitute illegal subsidies.
The first-instance court ruled in 2020 that the E.U.'s decision to impose additional taxes was invalid, but this ruling has now been overturned.
E.U. scores 'big win' in court against Apple, Google
Brussels (Belgium) (AFP) – On Tuesday, the E.U.'s top court delivered two major victories in the bloc's battle to rein in tech giants by ruling against Apple and Google in separate legal sagas with billions of euros at play. On September 10, 2024
https://www.france24.com/en/live-news/20240910-d-day-for-apple-google-as-eu-court-to-rule-on-major-cases
On September 10, E.U.'s top court was set to issue crucial rulings in two major Apple and Google cases. These cases have significant financial implications and could shape the future of Big Tech's interactions with European regulators.
1.
Apple's Tax Case: The court will decide on a 13-billion-euro tax dispute involving Apple and Ireland. The European Commission previously argued that Ireland granted Apple unfair tax benefits, but Apple won an appeal in 2020. However, a court advisor recommended overturning that victory, and now the European Court E.C.J.Justice (E.C.J.) will determine whether Apple may have to pay the taxes.
2.
Google's Antitrust Fines: Google faces another key ruling regarding a 2.4-billion-euro fine for favouring its shopping service in search engine results. The European Commission imposed this fine in 2017 as part of broader antitrust actions. In various cases, Google has faced fines totalling around 8 billion euros for abusing its dominant market position, including its Android system.
These rulings mark a critical E.U.'snt for the E.U.'s outgoing competition chief, Margrethe Vestager, who has led the charge against Big Tech but has faced several setbacks in recent years.
Q. Why did Ireland give Apple unfair tax breaks?
A. Ireland has maintained a low corporate tax rate to attract foreign companies for many years, providing a favourable tax system, especially for large companies. The tax breaks for Apple allowed Ireland to significantly reduce taxes on multinational companies, promoting job creation and economic growth.
Specifically, Ireland allowed Apple to apply a meagre tax rate on most of its profits in Europe, a practice the European Commission argued in 2016 was an unfair "selective preferencE.U. and infringed E.U. competition law. This meant other companies could not compete on the same terms, undermining fair competition.
