- The internet is dominated by a small number of companies who engage in anti-competitive behavior.
- Two bills before Congress could potentially address this issue, but they need to pass soon.
- Historically, the US has taken action to break up harmful monopolies.
- Tech companies use self-preferencing to unfairly promote their own products on their platforms.
- Apple's App Store has a stranglehold on developers and takes a large commission on app sales.
- Google dominates online searches with 90% of the market, leaving little competition.
- Google has exploited its market dominance by manipulating search results.

- Google prioritizes its own content over content from other websites, devoting 41% of the first page of search results on mobile devices to its own properties and direct answers.
- Google's search results often provide information copied from other sources without their knowledge or consent, impacting website traffic and ad revenue.
- Yelp was told by Google that the only way to remove their site's content from Google's search results was to have it removed entirely, which could be detrimental to their business.
- Google Flights is often displayed at the top of search results, potentially leading users to stay on Google instead of clicking on other websites, affecting the travel industry.
- Amazon controls a significant portion of online marketplace sales and favors its own products over competitors, even creating knockoffs of successful products.
- The buy box on Amazon's product pages, where users can instantly click to buy, is highly coveted and often favors Amazon's own products or those fulfilled by Amazon.
- Amazon has been accused of making knockoffs of successful products and promoting its own brands over competitors.
- Amazon's dominance in the marketplace makes it nearly impossible for third-party sellers to compete against them.

- The video discusses Amazon's advantage over its competitors due to its access to independent seller data and the potential preference of its own products.
- Jeff Bezos, the CEO of Amazon, was unable to provide a clear answer when asked if Amazon uses third-party seller data for business decisions.
- Two bills before Congress aim to address issues of self-preferencing and the requirement for app developers to use a company's own payment processor.
- Tech companies are fighting against these bills, using arguments similar to those made by AT&T in the past.
- Claims made by Apple, Amazon, and Google about the potential harm to security and small businesses have been debunked or contradicted.
- The bills have bipartisan support but have not yet moved forward, possibly due to conflicts of interest among members of Congress.
- If the bills are not passed before the August recess, they may not be revisited due to the focus on midterm elections.
- Allowing a few companies to control entire sectors limits innovation and potential for startups, and the bills aim to restore the internet's original purpose of expanding global access to information.

- The internet is dominated by a small number of companies engaging in anti-competitive behavior.
- Two bills in Congress aim to address this issue, but they need to pass soon.
- Tech companies like Apple, Google, and Amazon unfairly promote their own products and have a stranglehold on their respective markets.
- Google manipulates search results, prioritizes its own content, and copies information from other sources without consent.
- Amazon controls a significant portion of online sales and favors its own products over competitors.
- The bills have bipartisan support but have not yet moved forward, possibly due to conflicts of interest among members of Congress.
- If the bills are not passed before the August recess, they may not be revisited due to the focus on midterm elections.
- The bills aim to restore the internet's original purpose of expanding global access to information and promoting innovation and startups.

John Oliver discusses tech monopolies, and how to address the hidden harm they can do.

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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 Dasha's too.

First, Peter was not checking surfing spots or sports statistics.

But also, spare a thought for Dasha there, who just gets also good grades.

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 gonna 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.

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 the 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 are gargantuan businesses that are, for the most part, loved and respected by the most important people, their customers!

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 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.

It's not that tech companies are inherently bad because they are big, it's that they're engaging in anti-competitive behavior.

And here's where, unusually, I actually might have some good news, because there are 2 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.

And let's start with a tiny bit of history.

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 AT&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 AT&T of today.

But crucially, that popularity may well have been because people had no alternatives.

You had to rent your phone from AT&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 Bell, argued that AT&T tried to put it out of business by refusing to provide equipment needed for long-distance transmission.

A key exhibit, AT&T's own notes of a 1972 Florida meeting by company executives in which 1 said, let's choke them off before they get started.

Now, Obviously, fuck AT&T now and forever, but...

Because the only bit to squiggle that I can decode there are the words, dangerous to Samantha's, a dollar sign, something that weirdly might be COVID, and then there is something that's definitely no question, capital B, balls.

♪ -The DOJ then actually filed an antitrust lawsuit, which AT&T fought vigorously for a decade, and when, in 1984, it was formally broken up by the government, AT&T's chairman warned the public that we would come to regret what had just happened.

Oh, I've had the conviction and taken the position in more than 1 forum that, the country in the long run will be sorry.

I find it difficult to believe that things will work as well in the future as they have worked in the past.

Things actually worked better, because it turns out, ending a monopoly is almost always a good thing, whether it's AT&T or Standard Oil, or literally any game of Monopoly.

We didn't know it at the time, but AT&T'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 AT&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 gonna focus on just 1 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 3 companies.

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 $1.50.

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 posts about him, so they could hashtag be seen by Jeremy Renner.

In amounts ranging from $199 to nearly $100 actual dollars, Apple got a cut of that, and that is blood money right there.

-♪ Blood money ♪ -♪ Blood money ♪ 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?

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.

And while Apple will say that it's lowered its commissions for certain small app developers, 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?

They charge similarly high commissions to developers, and the fact is, over 99 percent 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 percent 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.

Bing, their competition, has 2 percent of the market.

People use Google to the extent that Googling something is now a verb.

You can't say that for any other search engine.

No 1 has ever said, -"I'm going to Bing it." -$BING Except for maybe Bing Crosby announcing he's about to masturbate, but that's it.

-$MASTURBATE 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 Google 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 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 percent 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.

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 linked 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 5 interesting facts about dolphins?

And while you've never even thought of that as a possibility, suddenly you're curious, aren't you?

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?

And then you see more questions like, do dolphins protect humans?

After all, we now learned they can love us.

But the answer is, there just isn't any reliable evidence that it's true.

That they're willing to love but not protect us?

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 that 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 1.

But you know the truth before it even appears.

Dolphins are essentially bribed with fish to interact with humans.

And even though you're hurt, at least you can accept that it's not actually you, it was never you, it was the fucking dolphin.

And the point is, throughout that whole emotional rollercoaster, you never even left Google.

In fact, 1 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 you're 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 1 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.

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 gonna affect your business?

Yeah, if you're on the second page, forget it.

And 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.

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.

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 widget 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.

As 1 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 Flights' banner image is a woman and a child hiking somewhere while pointing at an airplane that they are not on, seemingly saying, -"What the fuck?

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...

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 right to Pitbull's identity.

--LAUGHTER --Amazon reportedly controls 65 to 70 percent of all U.S.

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 have to be there because that's where everyone is.

Amazon executives have told us that there are many other options out there.

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.

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 1 click, we could buy a pack for $14.

And 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 product, many at a lower price.

The problem is, most people aren't going to see that.

Because an estimated 80% 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 1 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 1 analysis, finding that the company chose itself for the Buy Box for about 40% of products, while the next highest seller got in just half of 1 percent of popular products.

And even when the buy box did go to a third-party seller, 9 out of 10 times, it went to those that used Amazon's shipping service fulfilled by Amazon.

They make the rules, and they do seem to win a lot of the time.

And as this expert points out, if they're competing with you, you're basically dead.

Third-party sellers have told me that once they see that Amazon is 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.

Amazon is to retailers what dolphins are to the human heart.

If they take an interest in you, you are gonna wind up absolutely devastated.

-♪ ♪ -♪ 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 knockoffs of products that have been successfully sold on its website.

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 bluesign 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 1 of the biggest companies in the world seems to be using the same strategy as knock-off DVDs designed to confuse parents.

Hey, kids, we got you the movies that you asked for, Ratatouille, transmorphers, and chop, kick, panda.

And Amazon has a huge advantage over its competitors because it runs the marketplace.

And it has access to all the independent seller data, like, hypothetically, what bag is proving popular.

And look, Amazon denies that they preference themselves, their own products or sellers that pay for their logistic 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.

Bezos, does Amazon ever access and use third-party seller data when making business decisions?

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.

We have a policy, but I can't guarantee you it hasn't been violated.

That's gotta be 1 of the more incriminating ways to answer a question.

It's right up there with answering, did you break the law with, which law?

Self-preferencing stifles competition, hurts small business, and often results in serving consumers an inferior product.

Well, that brings me back to the good news that I mentioned earlier, because these 2 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 a rival.

And unsurprisingly, tech companies are fighting these bills hard, making basically the same arguments that AT&T 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.

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

00:04 - 26:45