WW 851: Between 2 Ferns

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What are your thoughts about today’s show? We’d love to hear from you!

Thanks for holding up the flag for antitrust in the beginning, @Leo ! I keep being impressed by Paul’s rather careless and revealing way of saying: “Ah, well…”

There is no example of a company that achieves a monopoly at scale and does not abuse the market in some way. It’s the natural nature of that thing. Because once you achieve dominance, the next step is to maintain that dominance and extend it. It is impossible not to do anticompetitive acts chuckles to make that happen.

(around the 28-minute mark in the club version)

… to argue that the FCC’s role is not to hinder this behavior, but maybe win some concessions.

That assessment just lacks any sort of foresight. Wonder if he complains when Microsoft has completely cornered the market in 10 years and ratchets up the prices for the one game he plays.

Paul does a fantastic job when he’s critical and cynical about the most valuable companies on earth. He’s far off the mark – in my book – when he’s critical and cynical about societies’ institutions that try to reign these companies in. As he rightly puts it: several of these big companies are “bigger” than many countries and they are certainly more organized and impactful. Why would he argue for the bully? Especially with an argument that boils down to “well, first you get big, then you become a bully, and then you do bully things - it’s the way of the world”. Also the logic that being against large companies is anti-American just sounds like something from a populist’s PR narrative. I call BS, given that most of the digital world is operated and run by the US. The world is hardly anti-American when it comes to tech and whining at the slightest criticism is playing, I believe as is said, the world’s smallest violin.

Granted: in this specific case, Microsoft buying a game company, it’s not the end of the world - today. And what would they do with their gazillion of USD? Can’t really pay everyone better since paychecks are already comfortable. Make the product better? Nah. Why? Instead, what grinds my gears is the underlying philosophy and acceptance of small => big => bully => okay and institutions who are critical of bullies => not okay.

Why not argue: if you have so much money to buy game companies and dominate their markets, why not just make your current products better? More open? 95% of this podcast is a string of fitting criticism of Microsoft products and / or processes. What on earth could you do with many resources? Improve? No. Buy a game company. That simply does not check out. Neither in reality if Microsoft were interested to generate the best quality offer nor in the logic of the podcast over 10 years.

But no, MS must be allowed to dominate because they are big. I don’t really follow that logic. Indeed, it’s a depressing perspective. That’s just building systems that are too big to fail.

I’ll freely admit that, as a non-gamer apart from The Sims and Rollercoaster Tycoon, I probably don’t understand the specifics of your issue regarding not allowing MS to acquire Activision. Still, there is now one fewer game company than there was.
Paul is right that we need to look at the existing monopolies in tech, but we also need to examine new acquisitions, for their potential to be monopolies since it’ll be more challenging to unwind them after the fact.

I can’t remember who said that Windows 3.11 had all the same technical underpinnings as Windows 95 without the new UI. I’m still holding out for them to bring back the classic UI from Windows 2000 and Windows XP… The Windows 10 interface is very close, but I want that exact Windows 2000 UI.

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It’s such a difficult topic. On the one hand, we appreciate the benefits technology, and yes even big tech, bestow on society. And it may well be that market forces and the inevitable business cycle are all that are needed to keep big tech from becoming dominant tech.

On the other hand, free markets have always needed bumper guards at their extremes, and I don’t think there are any economists, even Friedman, who would say that anti-trust isn’t necessary.

But government is so slow compared to the speed of technology innovation that one wonders if it’s capable of reigning in the excesses in a timely and effective fashion.

You see, I see both sides here, and I’m really not sure what the right answer is!


To be honest, I think Paul is correct on this one.

Microsoft need to be looked at for the M365 and Office Online licensing, for example, just like Google, Apple, Facebook etc. need to be looked at for their various practices and collusion.

But, with the concessions that have been made by Microsoft with the take-over, I don’t really feel there is much to criticize on the actual deal, at the moment, certainly not the way the FTC are going about it, and to a lesser extent the UK. The EU are the only ones that came out of this smelling mildly of something floral, they went through the deal, pointed out objections and made Microsoft come up with solutions to the issues they raised.

I really don’t see what the FTC can hope to add, at this late stage. Their problem is, they had over a year to prepare arguments, they were asleep at the wheel and when the deadline hit, they went to court with trumped up accusations that didn’t stand the smell test and now their nose is out of joint and they just appear to be vindictive.

With regards to Windows 10 and 11, one of the reasons companies are sticking with Windows 10 is that they are happy with it, it does what they want and it is “feature stable”. Windows 11, on the other hand, seems to be a rolling beta with new features coming out every month.

Business users generally only use a PC at work, they aren’t interested in the operating system, the PC is a necessary evil for accomplishing their job. They learn how to start the ERP system or CRM system or wherever they spend their working day, and that is it. The last thing they want is to see change.

When Microsoft moved the search dialogs in Office to the title bar of the window, the helpdesk was inundated with calls, because search no longer worked in Office, it had disappeared.

It is the same when features change in Windows. We got a lot of calls, asking what this strange new Edge look-a-like icon with the briefcase was, was it malware? Did they have to worry? Where was the “real” Edge?

The logic being that Microsoft has become big because their products are good, ergo allowing them to become bigger grants the consumer even more good products. What if the FTC stopped Apple after the success of the iPod for dominating the music industry?

Obviously it’s not as simple as that, plenty of companies become big for the wrong reasons; it’s precisely the job of the FTC to determine if a company owes its “bigness” to those wrong reasons, and if that company can be expected to continue exhibiting such behavior following an acquisition.

It is not (and I believe this is the crux of Paul’s argument) the FTC’s job to say “company X is too large - acquisition denied.” If that was the case then why even have an FTC, why not just write a law that prohibits any company from exceeding [n] market cap?

I think Paul’s cynicism for these regulatory institutions comes from frustration. They did a really poor job of examining this acquisition. They based their investigation almost solely on arguments from Sony, who’s interest lies not in the benefit of the consumer, but in their own enterprise. These institutions are publicly funded, so if they fail to investigate from the perspective of the consumer, they’ve failed us.

Personally, I’m optimistic about this acquisition. If anything, I wish the FTC would have investigated the financials behind Microsoft’s Gamepass subscription service. If this program is being heavily subsidized by Microsoft then we may be in a situation where Microsoft drops the hammer on us and ratchets up that price after they’ve reached critical mass.

While probably barely related to the discussion, I want to mention something that happened with me, and I wonder may of happened with other “boomers.” For pretty much most of my life I have felt like Microsoft was the playground bully–especially when Gates was in charge, they were known to “embrace, extend, extinguish” and this always felt wrong. I remember thinking that the Microsoft anti-trust trial was driven by their reputation for being ruthless.

Now to my point: Because of the ruthlessness of Microsoft, I felt when they entered the console wars they were trying the same thing… that they were intent on killing off every other player in that market as they sought domination. For that reason, more than any other, I have never considered owning a Microsoft console. I have never even seen one physically in person, let alone played one. I ensured that everyone I knew embraced Sony and Nintendo, and none of my family nor friends are Microsoft console owners. I wonder if I am the only one “marked” this way, or if others feel likewise.


I see your point @PHolder - and I agree I still have a bad taste in my mouth from Microsoft in the 90s. Yet, this new Microsoft does seem much better. That’s why I always bring up their stewardship of LinkedIn, Minecraft, and GitHub. They’ve kept these companies mostly autonomous, haven’t impeded their respective innovations, and, as far as I can tell, have yet to enshittify any. All the benefits, in other words, of being part of a big company without any of the downsides.

Maybe it’s time to reconsider?

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Makes sense, especially if you came up thru Microsoft’s ruthless age. I probably would have followed your path if I was of such a vintage.

Curious if you’ve seen the Power On documentary about the advent of Xbox? Power On: The Story of Xbox (TV Mini Series 2021) - IMDb

I think this documentary highlights one of the main reasons I believe Xbox never attempted to swallow the gaming market as Microsoft’s reputation would lead one to expect. The doc showed just how silo’d the Xbox group was during the early years. There’s one scene where team members were describing Gate’s surprise at learning that Microsoft had an entire team of artists and designers in employee upon being given a tour of Xbox Game Studios. They were too “under the radar” to be subjected to the evil business whims of that period, and the people at the helm were pure enthusiasts.

I may of inadvertently aged myself a bit :wink: I guess I am technically from “Gen X” according to this page: Boomers, Gen X, Gen Y, Gen Z, and Gen A explained But my first real IT job involved being an administrator for a business that ran on Windows NT Server 3.5, Windows 3.1 and Microsoft Office, so I was fully affected by the good and the bad of the more evil version of Microsoft.

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I’ve had similar feelings many times when I’ve heard Paul talk about the acquisition. But I heard either on this episode or the last something that made his perspective click for me. He said that, after covering the antitrust case against Microsoft he became very aware of what the law says, and what it does and does not allow.

I completely agree with you that Microsoft absolutely cannot be a good steward of their game companies. They will get larger and they will try to create business value out of every unmilked stone, because that is all they know how to do. But I think Paul is expressing that antitrust in the US doesn’t protect consumers from this obvious crap. They have specific definitions of consumer harm, and I don’t think the law can protect us from this type of monopoly.

I understand @Leo is seeing a better side of Microsoft right now, but I’m seeing the same stuff. Right now they are all about open source, creating products like VS Code and maintaining GitHub. But the purpose of these “open” products is to create a chokepoint that they control. VS Code will only let you use their extensions on the proprietary version of the software, not the open source build. It’s basically “at a 2.5 on the Embrace, Extend, Extinguish scale” as a Redditor put it.

What is absolutely bonkers is that the law doesn’t protect from the obvious end-run that all corporations are in. To not be monopolists, all companies have to do is independently destroy other industries entirely to subsidize their entire operations. Microsoft never had to make money on cloud storage because they were an entire cloud office suite. Google never had to make money on cloud office suites because they were a web information business. Apple never had to make money on software because they were a hardware company. At each stage, these businesses were able to remove consumer choice by completely devaluing industries. There’s no way to even hold them to account in court when the industry does not exist.

It’s like putting together a jigsaw puzzle. If you had pieces that were all horizontal rectangles, they would be monopolies. But if you take the same four pieces and distort them into different shapes, they take up the same amount of space while not being defined as monopolies. Everyone sees this garbage and can recognize the BS, but we don’t have any recourse. I guess we’ll wait for the EU to save us as usual?

Well that will age you.

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