Originally published at: Pluralistic: Convicted monopolist prevented from re-offending (27 Apr 2023) – Pluralistic: Daily links from Cory Doctorow
- Convicted monopolist prevented from re-offending: Microsoft won't be allowed to buy Activision.
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Convicted monopolist prevented from re-offending (permalink)
In blocking Microsoft's acquisition of Activision-Blizzard, the UK Competition and Markets Authority has made history: they have stepped in to prevent a notorious, convicted monopolist from seizing control over a nascent, important market (cloud gaming), ignoring the transparent, self-serving lies Microsoft told about the merger:
Cloud gaming isn't really a thing right now, but it might be. That was Microsoft's bet, anyway, as it plonked down $69b to acquire Activision-Blizzard – a company that shouldn't exist, having been formed out of a string of grossly anticompetitive mergers that were waved through.
Activision-Blizzard is a poster-child for the failures antitrust law over the past 40 years, a period in which monopolies were tolerated and even encouraged by the agencies that were supposed to prevent monopolies from forming and break up the ones that slipped past their defenses. Activision-Blizzard is a giant, moribund company whose "innovation" consists of endless sequels to its endless sequels, whose market power allows it to crush its workers while starving competitors of market oxygen, ensuring that gamers and game workers have nowhere else to go.
Microsoft is another one of those poster-children, of course. After being convicted of antitrust violations, the company dragged out the legal process until George W Bush stole the presidency and decided not to pursue them any further, letting them wriggle off the hook.
The antitrust rough ride tamed Microsoft…for a while. The company did not use the same dirty tricks to destroy, say, Google as it had used against Netscape. But in the years since, Microsoft has demonstrated that it regrets nothing about its illegal conduct and has no hesitations about repeating that conduct.
This is especially true of cloud computing, where Microsoft is using exclusivity deals and illegal "tying" (forcing customers to use a product they don't want in order to use a product they desire) to lock customers into its cloud offering:
Locking customers into Microsoft's cloud also means locking customers into Microsoft surveillance. Microsoft's cloud products spy in ways that are extreme even by the industry's very low standards. Office 365 isn't just a version of Office that you never stop paying for – it's a version of Office that never stops spying on you, and selling the data to your competitors:
Microsoft's Activision acquisition was entirely cloud-driven. The company clearly believes the pundits who say that the future of gaming is in the cloud: rather than playing on a device with the power to handle all the fancy graphics and physics, you'll use a low-powered device that streams you video from a server in the cloud that's doing all the heavy lifting.
If cloud gaming comes true (a big if, considering the dismal state of broadband, another sector that's been enshittified and starved by monopolists), then Microsoft owning the Xbox platform, the Windows OS, and the Game Pass subscription service already poses a huge risk that the company could grow to dominate the sector. Throw in Activision-Blizzard and the future starts to look very grim indeed.
It's a nakedly anticompetitive merger. As Mark Zuckerberg unwisely wrote in an internal memo, "it is better to buy than to compete."
(These guys can not stop incriminating themselves. FTX got mocked for its group-chat called "Wirefraud," but come on, every tech baron has a folder on their desktop called "mens rea" full of files with names like "premeditation-11.docx.")
Naturally, the FTC sued to stop the merger (after 40 years, the FTC has undergone a revolution under chair Lina Khan and is actually protecting the American people from monopoly):
The FTC was always in for an uphill battle. "Cloud gaming," the market it is seeking to defend from monopolization, doesn't really exist yet, and enforcing US antitrust law against monopolies over existent things is hard enough, thanks to all those federal judges who attended luxury junkets where billionaire-friendly "economists" taught them that monopolies were "efficient":
But the FTC isn't the only cop on the beat. Antitrust is experiencing a global revival, from the EU to China, Canada to Australia, and South Korea to the UK, where the Competition and Markets Authority is kicking all kinds of arse (see also: "ass"). The CMA is arguably the most technically proficient competition regulator in the world, thanks to the Digital Markets Unit (DMU), a force of over 50 skilled engineers who produce intensely detailed, amazingly sharp reports on how tech monopolies work and what to do about them.
The CMA is very interested in cloud gaming. Late last year, they released a long, detailed report into the state of browser engines on mobile phones, seeking public comment on whether these should be regulated to encourage web-apps (which can be installed without going through an app store) and to pave the way for cloud gaming:
The CMA is especially keen on collaboration with its overseas colleagues. Its annual conference welcome enforcers from all over the world, and its Digital Markets Unit is particularly important in these joint operations. You see, while Parliament appropriated funds to pay those 50+ engineers, it never passed the secondary legislation needed to grant the DMU any enforcement powers. But the DMU isn't just sitting around waiting for Parliament to act – rather, it produces these incredible investigations and enforcement roadmaps, and releases them publicly.
This turns out to be very important in the EU, where the European Commission has very broad enforcement powers, but very little technical staff. The Commission and the DMU have become something of a joint venture, with the DMU setting up the cases and the EU knocking them down. It's a very heartwarming post-Brexit story of cross-Channel collaboration!
And so Microsoft's acquisition is dead (I mean, they say they'll appeal, but that'll take months, and the deal with Activision will have expired in the meantime, and Microsoft will have to pay Activision a $3 billion break-up fee):
This is good news for gaming, for games workers, and for gamers. Microsoft was and is a rotten company, even by the low standards of tech giants. Despite the sweaters and the charity (or, rather, "charity") Bill Gates is a hardcore ideologue who wants to get rid of public education and all other public goods:
Microsoft has a knack for nurturing and promoting absolutely terrible people, like former CEO Steve Ballmer, who has played a starring role in Propublica's IRS Files, thanks to the bizarre tax-scams he's pioneered:
So yeah, this is good news: Microsoft should have been broken up 25 years ago, and we should not allow it to buy its way to ongoing dominance today. But it's also good news because of the nature of the enforcement: the CMA defended an emerging market, to prevent monopolization.
That's really important: monopolies are durable. Once a monopoly takes root, it becomes too big to fail and too big to jail. That's how IBM outspend the entire Department of Justice Antitrust Division every year for twelve years during a period they call "Antitrust's Vietnam":
Preventing monopoly formation is infinitely preferable to breaking up monopolies after they form. That's why the golden age of trustbusting (basically, the period starting with FDR and ending with Reagan) saw action against "incipient" monopolies, where big companies bought lots of little companies.
When we stopped worrying about incipiency, we set the stage for today's Private Equity "rollups," where every funeral home, or veterinarian, or dentists' practice is bought out by a giant PE fund, who ruthlessly enshittify it, slashing wages, raising prices, stiffing suppliers and reducing quality:
Limiting antitrust enforcement to policing monopolies after they form has been an absolute failure. The CMA knows that an ounce of prevention is worth a pound of cure – indeed, we all do.
(Image: Microsoft, Activision; fair use)
Hey look at this (permalink)
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This day in history (permalink)
#20yrsago Spam turns 25 https://www.templetons.com/brad/spam/spam25.html
#10yrsago Suburban Express bus-line sends bullying, cowardly legal threat to Reddit, discovers Streisand Effect https://arstechnica.com/tech-policy/2013/04/express-to-internet-hate-bus-company-threatens-redditor-with-lawsuit/
#10yrsago Congress fixes “sequester” air traffic control disaster just in time for their own flights home https://www.csmonitor.com/USA/Politics/2013/0426/Before-members-rush-for-airports-Congress-ends-sequester-flight-delays
#5yrsago Thinking through the “What should we do about Facebook?” question https://memex.craphound.com/2018/04/27/thinking-through-the-what-should-we-do-about-facebook-question/
#5yrsago Scott Pruitt can’t answer a yes-or-no question to save his life (or even his ass) https://www.theverge.com/2018/4/26/17286684/scott-pruitt-hearings-epa-congress-ethics-scandals-questions
#1yrago Laura Jean McKay's "The Animals in That Country": A brilliant debut novel of too much understanding https://pluralistic.net/2022/04/27/im-a-backdoor-man/#doolittle
#1yrago How police backdoors for online services let sextortionists target children https://pluralistic.net/2022/04/27/im-a-backdoor-man/#pedo-backdoor
Today's top sources:
- A Little Brother short story about DIY insulin PLANNING
Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. FIRST DRAFT COMPLETE, WAITING FOR EDITORIAL REVIEW
The Bezzle, a Martin Hench noir thriller novel about the prison-tech industry. FIRST DRAFT COMPLETE, WAITING FOR EDITORIAL REVIEW
Vigilant, Little Brother short story about remote invigilation. ON SUBMISSION
Moral Hazard, a short story for MIT Tech Review's 12 Tomorrows. FIRST DRAFT COMPLETE, ACCEPTED FOR PUBLICATION
Spill, a Little Brother short story about pipeline protests. ON SUBMISSION
Latest podcast: How To Make a Child-Safe TikTok https://craphound.com/news/2023/04/17/how-to-make-a-child-safe-tiktok/
- Red Team Blues at SFPL with Annalee Newitz (San Francisco), Apr 30
Red Team Blues at Powell's with Andy Baio (PDX/Cedar Hills Crossing), May 2
Red Team Blues at Books, Inc with Mitch Kapor (Mountain View), May 5
Bay Area Bookfest (Berkeley), May 6/7
Open Source Summit (Vancouver), May 10
Massy Books Red Team Blues event with Sean Cranbury (Vancouver), May 10
Wordfest (Calgary), May 11
Gaithersburg Book Festival, May 20
Public Knowledge Emerging Tech keynote (DC), May 22
WEPFest with Ron Diebert, Dave Bidini and Nancy Olivieri (Toronto), May 23
HowTheLightGetsIn (Hay), May 28
HowTheLightGetsIn (Hay), May 29
Red Team Blues event with Tim Harford (Oxford), May 29
Red Team Blues event with Christian Reilly (Nottingham), May 30
Red Team Blues event with Ian Forrester (Manchester), May 31
UCL Peter Kirstein Lecture, Jun 1 (London):
Cymera Festival, Jun 3 (Edinburgh)
Red Team Blues with Martha Lane Fox at the British Library, Jun 5 (London):
Re:publica keynote, Jun 7 (Berlin)
- Media Death Cult
IFTF Future Now
Examining capitalism's chokepoints (Changelog)
- "Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com
"Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The Washington Post called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html
"How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59 (print edition: https://bookshop.org/books/how-to-destroy-surveillance-capitalism/9781736205907) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)
"Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html
"Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p2682/Corey_Doctorow%3A_Poesy_the_Monster_Slayer_HB.html#/.
- Red Team Blues: "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books, April 2023
The Internet Con: A nonfiction book about interoperability and Big Tech, Verso, September 2023
The Lost Cause: a post-Green New Deal eco-topian novel about truth and reconciliation with white nationalist militias, Tor Books, November 2023
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