FTC Chair Khan: Stop Monopolies Before They Happen (axios.com) 40
FTC chair Lina Khan is hunting for evidence that Microsoft, Google and Amazon require cloud computing spend, board seats or exclusivity deals in return for their investments in AI startups. From a report: At a Friday event, Khan framed today's AI landscape as an inflection point for tech that is "enormously important for opening up markets and injecting competition and disrupting existing incumbents." The FTC chair offered Axios' Sara Fischer new details of how she's handling a market inquiry into the relationship between Big Tech companies and AI startups, in an interview at the Digital Content Next Summit in Charleston, S.C.
In handling the surge in AI innovation and its impacts on the broader tech and media landscape, Khan said she aims to tackle monopoly "before it becomes fully fledged." She said the FTC is looking for chokepoints in each layer of the AI tech stack: "chips. compute, foundational models, applications." Khan said she's also paying close attention to vertical integration -- when players look to extend dominance over one tech layer into adjacent layers -- or when they attempt acquisitions aimed at solidifying an existing monopoly. That includes any potential integration between Sam Altman's nascent chip project and OpenAI, though she said she welcomes chip competition.
In handling the surge in AI innovation and its impacts on the broader tech and media landscape, Khan said she aims to tackle monopoly "before it becomes fully fledged." She said the FTC is looking for chokepoints in each layer of the AI tech stack: "chips. compute, foundational models, applications." Khan said she's also paying close attention to vertical integration -- when players look to extend dominance over one tech layer into adjacent layers -- or when they attempt acquisitions aimed at solidifying an existing monopoly. That includes any potential integration between Sam Altman's nascent chip project and OpenAI, though she said she welcomes chip competition.
Re: Oblig (Score:2)
Re:government to the rescue! (Score:4, Insightful)
Because who doesn't want a handful of companies to own everything [imgur.com] so they can control the market and jack up prices while limiting selection [apnews.com]? We should be thankful for everything they do.
Tell us you don't remember unfettered corporatism [wikipedia.org] without telling us you don't remember unfettered corporatism [wikipedia.org].
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That worked really well during the 1920s and gave us the Great Depression. And when the U.S. decided to let the world do its thing, we got WWII. More recently, the gov. decided to let Wall Street run amok and we got the Great Recession. Thems some mighty thick rose colored glasses you are sporting.
And the inflation had more to do with the U.S. letting American business get tied up to China. When Covid hit, there went the supply chains and up went inflation. Companies decided an inflation is nothing to waste
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Because that worked oh so well for China, right?
Because all that happened was China got rich and started spreading its idea of "good government" around the world. One that generally involves being a dictator and crushing all dissent and opposition. But then again, maybe free speech is a pointless utility, or human rights. Let's re-enslave the population.
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The government, can't afford to allow businesses to too large or too powerful. You can just look at the banana republics [wikipedia.org] to see what happens when a private business gets too powerful. It isn't good for the government and it is isn't good for the inhabitants of the country.
Businesses will naturally want to take every short cut or hack available to them, unless there is a law preventing them doing so. This is no different to how players are subjected to rules in a sports game. We could expect the market playe
Re: government to the rescue! (Score:3, Informative)
All of the examples you cite are results of government meddling in business and you advocate for more.
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If you don’t like too much government in your life then why don’t you move to a country with less of a government? I hear they’re splendid and you get a new “president” pretty often.
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Yes, let's mess with a market that barely even exists yet. What could go wrong?
Perhaps Khan doesn't want to end up with another Windows monopoly scenario? Sounds like welcome prescience to me.
Re: AI (Score:2)
Do you know how Microsoft and Adobe became a monopoly?
It was because the IRS demanded things to be encoded in Adobe proprietary PDF extensions, Microsoft Excel and Word documents, demands IE and ActiveX for tax filings etc. And thatâ(TM)s just the IRS, every regulatory agency ever will only accept bulk data in proprietary formats using proprietary mechanism (eg the entire MOVE-it fiasco), the FDA approval on software which excludes open source, the Navy still spends millions for Windows XP support.
With
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The "there's always a bigger fish" Capitalism of tech ends in one place -- with one or two companies controlling 100% of society.
Isn't that what they said about US Steel? And Standard Oil? And IBM? And AltaVista?
Crap I remember when people were worried that Motorola and Nokia were going to dominate the cell phone market. People were saying Microsoft was as good as dead ten years ago.
As far as breaking up monopolies, go read up on how well the AT&T breakup went. The main effect on end consumers was that long distance phone calls got somewhat cheaper, but overall service was much worse.
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As far as breaking up monopolies, go read up on how well the AT&T breakup went. The main effect on end consumers was that long distance phone calls got somewhat cheaper, but overall service was much worse.
I would argue that the main effect of the first breakup was that the phone company was not allowed to manufacture phones, and had to allow other companies to manufacture phones, which is how modems faster than about 2400 baud became possible, which was a key driving force that made the Internet revolution possible.
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Re:AI (Score:5, Interesting)
Yes, let's mess with a market that barely even exists yet. What could go wrong?
As opposed to letting companies buy up competitors so they can raise prices? Here's one for you. Kroger has "pledged" it will lower prices [marketwatch.com] if it is allowed to buy up its competitior, Albertson's. Why not lower prices now? Why not compete against Albertson's by offering lower prices? Why must people's choices be taken away and a "pledge" made to do something in the process?
Fool me once shame on you (Score:2)
We've been getting those promises from companies for years and years and years and every year the prices go up higher than anyone's wage growth except a handful of people at the very top.
We have been using cheap Chinese consumer goods to wallpaper over the increased costs of everything and China has finished emptying out their rural villages for cheap disposable labor so those good times of ultra cheap Chinese goods made by borderline slave labor are
Wanna stop monopolies? (Score:2, Insightful)
Put realistic limits on patents/copyrights.. and let's have compulsory licensing! But we'll never have it, because industry puppets always win reelection
Require or deal too good to be true? (Score:2)
In the past, they would do things like, "We'll invest and hey here's our product/service at a rate you simply can't refuse!"
As a startup, most money is good money so if FANG is going to invest under reasonable terms -and- give you cheap cloud or whatever, also, who would turn that down?
More like "The Google cloud rate is 75% lower because they're a funder so we might as well use their cloud" than "required".
It's still probably illegal but it isn't "required" per se is my guess.
while I generally support antitrust (Score:5, Insightful)
Economy isn't everything, but it matters a great deal. If this type of attitude prevails, the next generation of MS, FB, Tesla, SpaceX, Apple and the entire silicon valley construct will be based in some country other than the US. Or they won't form at all, because there isn't any country that can replicate the US economy. Not yet, at least, and probably not anytime soon.
We had plenty of innovation and new companies (Score:2)
There is nothing more anti-capitalist then shutting down competition. Capitalism without competition is just monarchy with extra steps
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Quality of life and general happiness are much higher in those "poor European states". We are doing just fine with our regulations, thanks.
This is how you make capitalism work for the people. Set up the rules so that monopolies can't form in the first place, and there is always competition to drive innovation and put downward pressure on prices. As an example, most Europeans have a choice of many different ISPs because the networks were forced to unbundle, where as in the US most people seem to be stuck wit
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France and Germany are both much better places to live than the US, by any reasonable measure.
How does one identify a future monopoly? (Score:2)
Every startup, and many businesses of many sizes, try to lock in their customers to their product or service. It's not a problem until they gain too much market dominance. But how do you predict which of these companies are going to grow to such a size that their strategies will become anticompetitive?
Reaganomics (Score:2)
Yeah stop monopolies (Score:2)
Defanging the FTC (Score:1)
Lina Khan has always been a diehard libertarian playing 4-dimensional chess. By taking so many unwinnable cases to court, she has turned an agency which had a lot of soft power and completely defanged it. Every lost case is another legal precedent clarifying the limits of what the FTC can do. I am her biggest fan and I think that she should get a promotion and a lifetime appointment where she gets to rotate between leading each government agency for a year or so, so that we may finally starve the beast.
I don't get it (Score:2)
The attitude is something I find weird. Monopolies, in and of themselves, are not bad. They are only bad if they are exploited to harm their customers. Assuming that any type of monopoly must be killed off is not only pretty unproductive, but seems ignorant on the face of it.
There are many regions of the country where there is now only one surviving hospital. So they are a monopoly - do we need the FTC to come in and close them? Just because they have no competition? That would be ridiculous.