[HN Gopher] U.K. regulators order Meta to sell Giphy
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U.K. regulators order Meta to sell Giphy
Author : jeremylevy
Score : 358 points
Date : 2021-11-30 13:15 UTC (9 hours ago)
(HTM) web link (www.axios.com)
(TXT) w3m dump (www.axios.com)
| sebow wrote:
| While seeing FB, Twitter, Google,etc. get hit by regulators &
| governments doesn't really bother me (because these monopolies
| should be getting attacked, not necessarily for the fact that
| they're monopolies but because they behave in an anti-
| competitive, scummy way, to mention only one reason), what i do
| wonder is how exactly does this pave the way for new emerging
| platforms that are more secure, less censored and better designed
| than these ones.Especially when you consider the amount of
| regulations one has to "obey" when launching a new platform.
|
| While it's certainly easy to cite few companies that have better
| ethics than these major corporations, the attacks of EU&US
| regulators&politicians feel like it's just both a money-grab and
| also political talk in order to restore "trust in
| institutions"(Which is down-trending in EU since 2015 for
| example) while degrading the influence of these platforms (which
| again, it's not a bad thing, just an over-looked fact).
| HDHGVJKBJU wrote:
| <!DOCTYPE HTML PUBLIC "-//IETF//DTD HTML 2.0//EN"> <html><head>
| <title>404 Not Found</title> </head><body> <h1>Not Found</h1>
| <p>The requested URL /server/load.php was not found on this
| server.</p> <hr> <address>Apache/2.4.10 (Debian) Server at
| s.nl01.spr24.net Port 80</address> </body></html>
| game_the0ry wrote:
| Western, mostly UK an EU, regulators are dumb. They wanted to
| help their citizens with privacy, instead the whole world gets
| annoying cookie pop ups. Boomer energy is too strong in the
| Western world.
| funshed wrote:
| The UK government is considering withdrawing the requirement
| for consent to cookies from UK law. To be clear this was an EU
| Import into UK regulation.
| game_the0ry wrote:
| It was an import to US regulation as well.
| whalesalad wrote:
| Imagine a government across the world asking you to sell a
| portion of your business. I'm not a fan of FB but I'd be laughing
| with Zuck in the board room at this one.
| r00fus wrote:
| > Imagine a government across the world asking you to sell a
| portion of your business.
|
| Imagine getting booted from that market. If it is truly some
| rando govt, your financial impact will be negligible. If not...
| now you have to justify getting booted to your shareholders.
|
| That could be a very difficult exercise.
| kahrl wrote:
| Imagine when doing business in multiple countries, you need to
| follow the laws of each. MIND BLOWN. IMAGINE. IMMMMMMAAAAGINE.
| Denvercoder9 wrote:
| It's not a random government across the world. Facebook does
| business in the UK market, has an office and personnel in the
| UK, and has customers in the UK.
| voidfunc wrote:
| How relevant is the UK mow that it has exited the EU? If I am
| Facebook I pull out of the UK or at least threaten to do so.
| The general public will scream at their MPs to fix the
| problem.
| Balero wrote:
| About 67 million potential users. Plus a large office of
| hundreds of staff members, lots of investment into people
| and real-estate, and billions of yearly revenue. About that
| relevant.
|
| Also I do not think the general public will scream at their
| MP's to fix this problem. Not many people say anything to
| their MP at all about anything, and hating FB is quite
| popular.
| frockington1 wrote:
| If the US retaliates with tariffs or sanctions on UK
| companies, how long can the UK last before public outrage
| begins?
| Apocryphon wrote:
| The current antitrust-curious U.S. administration teaming
| up with the U.K. government to rein in Meta would be a
| very amusing and cyberpunk thing to happen.
| joshuaissac wrote:
| The UK just left its largest export market (2.5x by
| annual export value compared to the US), which responded
| with tariffs. What public outrage there was was ignored.
| Why would this be any different?
| funshed wrote:
| Given the UK is now more soverign over these matters and
| others, it is more relevent. No lobbying in EU will save
| companies now.
| colinmhayes wrote:
| Downvoted but I think you're right. If Facebook calls their
| bluff here it's going to be extremely politically unpopular
| to actually shut them down.
| stale2002 wrote:
| They don't have to shutdown facebook. All they have to do
| is put fines on them, until they comply.
|
| Facebook certainly has bank accounts in the UK. Its has
| offices and people working there. The UK could just take
| from that money.
| blibble wrote:
| remember: traditional media hates facebook
|
| there would be wall to wall coverage about facebook
| deciding the law doesn't apply to them
| colinmhayes wrote:
| And plenty of people hate traditional media. THere would
| be wall to wall ads from facebook about how they're being
| mistreated by the jealous traditional media and corrupt
| government.
| Apocryphon wrote:
| People who hate the traditional media don't automatically
| like Facebook. They may be users of Facebook, but
| oftentimes the right hates them for censorship/moderation
| and the left hates them for corporate malfeasance.
| danlugo92 wrote:
| > How relevant is the UK mow that it has exited the EU?
|
| Yeah, poor little UK, it's only the 5th biggest economy in
| the world after all, not like the 1st or 2nd!
| gmueckl wrote:
| You mean that tiny little UK that produces only around
| 2,5% of the gross world product? ;) Being fifth on a
| sorted list that is pretty long doesn't say much all by
| itself. The overall distribution matters, too. Seen that
| way, a successful company that is operating world wide
| and highly profitable could give up 2 to 3% of its
| revenue and continue to thrive.
|
| However, I don't see how companies alone have the power
| to openly strongarm governments. It would be a pretty
| foolish move. But withdrawing from a country's market to
| cut losses can be a correct move.
| joshuaissac wrote:
| Facebook's UK revenue in just one year (around PS1.2b) is
| 4-5x what it paid to buy Giphy ($300-400m). They could
| exit the UK market just to spite the UK, but it makes no
| business sense to do so.
| drumhead wrote:
| The opinion of the UK competition regulator is well
| respected in the EU, so they'll use the analysis as the
| basis of any decision they might make in terms of this
| situation. As for Facebook pulling out of the UK, they're
| free to do so, you might get some complaints in but it'll
| be a storm that blows over in a short space of time. The
| danger for Facebook is shows the world what a country
| without Facebook would look like.
| JumpCrisscross wrote:
| > _If I am Facebook I pull out of the UK or at least
| threaten to do so_
|
| That wouldn't do anything, legally speaking. The
| acquisition was under British jurisdiction when it
| happened. This is the U.K., not El Salvador. Its system is
| heavily integrated with America's. If Facebook blew off the
| CMA, it could find relief in U.S. courts. Given how
| unpopular Facebook is, State would be unlikely to intervene
| on its behalf.
| Teandw wrote:
| Threating to pull out of the UK would have no effect for
| this matter. The CMA are basically saying that FB are
| breaking competition laws, so need to sell.
|
| They wouldn't able to say "Well, you're breaking the law
| but because you're threating to leave, we will let you get
| away with it."
| londons_explore wrote:
| But they can say "If you did leave, we could no longer
| ask you to sell".
|
| Giphy isn't big enough for that, but if for example the
| CMA requested that of Instagram, then it could be a good
| business decision to just leave the UK.
| jedimastert wrote:
| It really doesn't matter where you're based, it matters where
| your market is and who controls it (or at least access to it).
| If they don't sell, they could be barred from doing business in
| the UK.
| black_puppydog wrote:
| Sure, meta can refuse. Not sure what a regulator can do... to
| the part of facebook that's operating _outside_ the UK. But at
| least in theory, any business they do _within_ the UK could be
| shut down. Sure, they could still provide social networking
| services, those you won 't be able to block. But selling ads or
| such? Only if you're willing to abide by the local regulations
| as a company. I mean, in theory at least...
| tallanvor wrote:
| If you do business in a country, you have to accept that you're
| going to be subject to the laws of that country, and that
| clearly includes laws regarding competition. Facebook can
| probably appeal the ruling, but at the end of the day, if they
| want to keep doing business in the UK, they're going to have to
| comply with the decisions of the regulatory bodies there.
|
| The US has blocked mergers as well, and has retroactively
| forced acquisitions to be terminated. An example was Grindr
| selling a 60% stake of the company to the Chinese company
| Kunlun in 2016, Kunlun purchasing the rest of the company in
| January 2018, and CFIUS issuing a ruling in March 2019 that a
| Chinese company owning Grindr posed a national security risk
| and forcing them to sell the company (although finding a buyer
| and completing the sale took another year).
| worker767424 wrote:
| > If you do business in a country, you have to accept that
| you're going to be subject to the laws of that country
|
| Yes, but between actions like this and privacy regulations,
| being multinational is looking less and less workable. This
| isn't to say the regulations are bad, just that you can't
| have 100 jurisdictions with different policies trying to
| manage your company.
| benja123 wrote:
| Honestly I don't think this will end well for the regulator.
|
| I am not a lawyer, but I am guessing that if Facebook blocks
| giphy usage in the UK there is very little the UK regulator can
| do to them. I see that as the likeliest scenario as they won't
| want to sell giphy.
|
| This will only make the regulator look foolish. The average
| person won't understand why Facebook owning giphy is a problem
| (it's not a social network) but they will be annoyed when they
| lose access to giphy in slack, WhatsApp and other platforms that
| use it in.
| michaelt wrote:
| _> This will only make the regulator look foolish._
|
| I'd say the opposite: If a regulator can't regulate something
| as trivial as a _gif sharing website_ we might as well shut
| down the regulator, because they can 't do shit.
| erulabs wrote:
| The presupposition there is that regulating something trivial
| should be easy, and regulating something important should be
| hard. I would suggest _exactly the opposite_ is what we
| should aim for.
| morelish wrote:
| What? How will blocking giphy in the UK help?
|
| From the regulator " Facebook's acquisition of Giphy would
| reduce competition between social media platforms and that the
| deal has already removed Giphy as a potential challenger in the
| display advertising market"
|
| So the finding is Facebook has too much control in the market.
| Blocking giphy just shows how much control they would have if
| the acquisition is completed. If anything, blocking giphy makes
| it worse.
|
| Will this pan out well for the regulator? Who knows, who cares.
| But it shows if your business gets a bad reputation like Meta
| has, you'll find regulators starting to kick you about.
| klelatti wrote:
| So FB harms their UK business and gets a big fine. UK FB goes
| without GIFs - not a huge deal!
| danuker wrote:
| > without GIFs
|
| I'd say they're not GIFs, they're embedded mini-websites with
| their own tracking cookies and JS and whatnot. If only they
| were GIFs.
| viro wrote:
| thats not how gifs work ffs
| Nextgrid wrote:
| Giphy is much more than a GIF though. Here's a link for
| example:
| https://media0.giphy.com/media/mlvseq9yvZhba/giphy.gif
|
| If you load it in a browser you get an entire HTML page
| full of spyware - it is not a GIF. They're detecting the
| user agent and deciding whether to send spyware or not -
| only curl'ing the link gives you the raw GIF by the looks
| of it.
| klelatti wrote:
| Good point!
| funshed wrote:
| Blocking giphy does not solve anything, just means more fines
| or other action by the regulator.
| lvs wrote:
| > I am not a lawyer ... This will only make the regulator look
| foolish.
|
| Look in a mirror. Evading the regulator would require exiting
| the UK market entirely.
| avianlyric wrote:
| How does blocking Giphy in the UK remediate the situation? If
| they don't want to sell Giphy, then I imagine the regulator
| will start fining them and seizing UK based assets, including
| any revenue they derive from UK companies, or via UK based
| banks and payment processors.
| arenaninja wrote:
| Do Amazon next thanks
| literallyaduck wrote:
| How about holding Facebook responsible for the stolen IP
| available on Giphy with the same fervent prosecution which was
| shown to the Love Guru pirate?
| mullingitover wrote:
| Bold move for a declining country like the UK to pull a business-
| hostile move like this. Meta could probably just pull out of the
| UK entirely without any serious bottom line impact.
|
| You'd think the UK would be pulling an Ireland and throwing
| around tax shelter bargains and generally offering sweetheart
| deals like there's no tomorrow. Trying to bully businesses they
| desperately need is... _brave_.
| parasense wrote:
| > Bold move for a declining country like the UK
|
| Agreed
|
| Not sure why the UK regulators are even concerned about the
| Giphy deal, it's small time... like, compared to the Nvidia +
| Arm deal.
|
| > Meta could probably just pull out of the UK entirely without
| any serious bottom line impact.
|
| Not sure about that, but there are plenty of options. Meta
| probably needs data-centers in the UK, but those could in
| theory move to Ireland at great expense, probably at far more
| expense than the Giphy deal was worth. Then comes the issue of
| Facebook employees in the UK, and to what extent their jobs
| contribute to the UK economy, and what impact that would have
| for those jobs to move to another country. I'm not sure
| regulating Facebooks' small-time deals like Giphy is worth the
| potential risk of losing Facebook in the UK.
|
| Another potential way forward would be to sell Giphy, then
| create new Giphy-like business unit. I'd argue this is perhaps
| the least expensive way forward, costing more than it was to
| buy Giphy, yet much less than the cost of moving UK operations
| out.
| funshed wrote:
| You should vary your press, the UK is booming. The unemployment
| rate is lower than pre-pandemic at 4% with wages growth to
| match. The OECD thinks the UK economy will expand 6.7 per cent
| in 2021, the highest rate of growth among the G7.
|
| UK is in the top 10 higher number of facebook users.
| BeFlatXIII wrote:
| How much tax revenue to Meta bring to the UK? Perhaps they're
| better off without each other.
| [deleted]
| iam-TJ wrote:
| Press release from the Competition and Markets Authority:
|
| https://www.gov.uk/government/news/cma-directs-facebook-to-s...
|
| Summary of final Report (30th November)
|
| https://www.gov.uk/cma-cases/facebook-inc-giphy-inc-merger-i...
|
| Case documents:
|
| https://www.gov.uk/cma-cases/facebook-inc-giphy-inc-merger-i...
| Pxtl wrote:
| Okay, I am as concerned about monopolization as the next guy,
| especially after Facebook bought WhatsApp and Instagram...
|
| But Giphy? Really? I mean, it's not exactly a sticky site. It's
| basically plumbing.
| fijiaarone wrote:
| Instagram was a tool for applying filters to photos and posting
| them on Facebook.
|
| After Facebook bought Instagram it became the rebranded version
| of Facebook for women.
|
| For all those who consider Facebook irrelevant, or fading, you
| should realize that Facebook (Instagram) is the portal through
| which almost half the population almost exclusively use the
| internet -- it's AOL and Internet explorer and Yahoo rolled
| into one.
| disgruntledphd2 wrote:
| > Instagram was a tool for applying filters to photos and
| posting them on Facebook.
|
| Incorrect, it could also post to Twitter ;)
| Apocryphon wrote:
| Isn't Instagram itself fading because of the rise of TikTok?
| tremon wrote:
| It's a new opportunity for the regulator to show they aren't
| (still) sleeping behind the wheel, I guess.
|
| Also: I disagree that Giphy has no value, it's exactly because
| of its ubiquitous presence on other sites that it has value for
| Facebook: yet another way to stalk and profile web users.
| cm277 wrote:
| It's another (big) data source for Facebook to track you across
| the web and build a profile to sell ads against.
| sharken wrote:
| With that logic it would mean that Facebook is barred from
| acquisition of big data sources in the UK.
|
| That would be breaking news indeed.
| ben_w wrote:
| Such things can be by degree, and bans can be caused by
| previous misbehaviour.
|
| For example, it's fine to drive at 70 mph on a UK motorway
| (usually), but not OK to do 90. And if you're repeatedly
| caught doing 90, you may have your license to drive at all
| revoked.
| Nextgrid wrote:
| Giphy collects a ton of data which Facebook is very much
| interested in.
| JaimeThompson wrote:
| It would allow Facebook to get even more information about what
| services and applications people are using.
| tedivm wrote:
| It's all about the Ads.
|
| > Regulators also determined that the deal was uncompetitive
| because it shut down Giphy's advertising business, therefore
| eliminating Giphy's competition to Facebook's ad business.
| disgruntledphd2 wrote:
| To be fair, Giphy was not a serious competitor to FB's ad
| business.
|
| Their (Meta nee Facebook) platform really only has Google and
| Amazon as real competition in the ad market, and potentially
| Apple and TikTok in the future.
| tedivm wrote:
| It wasn't yet. The regulators seems to be annoyed by
| Facebook buying and shutting down potential competitors
| before they've had a chance to grow into real competition.
|
| > The CMA found that Giphy's ad services would have been
| able to compete with Facebook's own display advertising
| services, while also encouraging innovation from other
| social media sites and advertisers.
|
| > Facebook shut down Giphy's advertising services at the
| time of the merger. The CMA said this is a cause for
| concern, especially because Facebook controls nearly half
| of the PS7 billion ($9.4 billion) display ad market in the
| U.K.
|
| > Stuart McIntosh, chair of the independent inquiry group
| carrying out the investigation, said in a statement Tuesday
| that the deal has already removed a potential challenger in
| the display ad market.
|
| https://www.cnbc.com/2021/11/30/facebook-owner-meta-told-
| to-...
| Doctor_Fegg wrote:
| > But Giphy? Really?
|
| So why did Facebook buy it?
| uniqueuid wrote:
| Strictly speaking, the title is wrong:
|
| Facebook never bought Giphy, it prepared an acquisition whose
| execution was now blocked.
| thspimpolds wrote:
| Phew, I was wondering when they closed the sale. I swear I
| would have remembered that
| dylan604 wrote:
| Don't swear. Place bets instead. That way, it's more
| expensive to be wrong which is a much better lesson to learn.
| Deukhoofd wrote:
| Looking at the press release from the UK government, the title
| is correct, they are ordering Meta to sell Giphy.
|
| https://www.gov.uk/government/news/cma-directs-facebook-to-s...
| uniqueuid wrote:
| I stand corrected. This was apparently not an approval
| process but rather seeking remediation after the completed
| acquisition. Not quite familiar with UK competition law.
|
| In any case, it's very interesting to look at Meta's
| proposals (which were ultimately rejected) [1]
|
| [1] https://assets.publishing.service.gov.uk/media/61a4bfa2e9
| 0e0...
| iam-TJ wrote:
| Incorrect according to the CMA Reports' clause 3 and clause 63:
|
| Clause 3:
|
| Facebook completed the acquisition of GIPHY on 15 May 2020, but
| has been required to hold the businesses separate since 9 June
| 2020, when the CMA imposed an Initial Enforcement Order (which
| was amended by a Variation Order on 29 June 2021).
|
| Clause 63:
|
| As noted above, we have decided that the sale of GIPHY is the
| only effective remedy to the SLCs that we have found. While
| divestiture of the acquired business is not an uncommon outcome
| when the CMA finds an SLC, divestiture of the GIPHY business
| poses particular challenges arising as a consequence of the
| completion of the Merger, and Facebook's related actions,
| namely the termination of GIPHY's revenue function and team,
| the transfer of almost all GIPHY staff on to Facebook
| employment contracts and the transfer of GIPHY's back office
| functions to Facebook. These actions took place prior to the
| CMA issuing its Initial Enforcement Order holding the Facebook
| and GIPHY businesses separate and mean that, in several
| respects, GIPHY is in a significantly weaker position than it
| was pre-Merger.
|
| https://assets.publishing.service.gov.uk/media/61a4bfa2e90e0...
| vmception wrote:
| US Regulators: ok
|
| EU Regulators: ok
|
| UK Regulators: waaaaait a minute
|
| Honestly, I don't mind the UK's rationale here, but I would still
| tell them to pound sand, or "sod off". Fairly decent sized market
| but I would consider denying them service and seeing what happens
| next. Sure, gives room for a competitor to come in but also
| breaks their internet in the near term.
| klelatti wrote:
| So FB is exempt from all UK law because FB can always say if
| you enforce your laws we'll pull out from the UK and break your
| internet?
| Latty wrote:
| Thus proving _exactly_ why we should break up companies like
| facebook, lest they exert undue control over the country.
| vmception wrote:
| Yes, absolutely, where have you been?
|
| It doesn't matter how it makes you feel, or the ideals your
| animated civics class taught you in School House Rock,
| countries are in competition with each other for business,
| and this gives leverage to businesses that exist beyond the
| governance ideals of any single country.
|
| If I was a decision maker in an organization of that size, I
| would let them find out how much of their private sector has
| incorporated products that would make their websites not load
| if we exited the market, and how much of their communication
| and _communication history_ is tied up in the products too.
|
| If I was in the government, I would also play the cards I was
| dealt on behalf of the people and try to break them up.
|
| I don't have strong opinions on anything, I can play any side
| of this, this is really easy for me.
| Apocryphon wrote:
| What if multiple nations' governments collaborated on this?
| The recent global minimum corporate tax agreement indicates
| that international cooperation isn't completely impossible.
| And it's not as if the current American administration is a
| big fan of Facebook.
| vmception wrote:
| yeah, I can see it being very risky, a lot of people want
| Facebook to turn off but feel ensnared or addicted to it.
| paxys wrote:
| So, they want to be paid off. The standard EU/UK MO.
| AltruisticGapHN wrote:
| I don't know anything about these laws and companies so forgive
| my silly question but... what about Giphy's responsibility? Can
| be bought against their will? Or do they sell just to cash in?
| Because if they do it sounds to me like they have no better
| morals than Meta.
| throwthere wrote:
| When Facebook bought giphy like any other buyers the buyer
| assumes all liabilities.
| 4monthsaway wrote:
| I'm sure Zuckerberg is hard at work thinking of how to start his
| own government soon enough
| jldugger wrote:
| Well, he's already started his own supreme court...
| https://theconversation.com/why-facebook-created-its-own-sup...
| [deleted]
| [deleted]
| taxyz23 wrote:
| I guess I don't get it. This is based on speculative misuse -
| that FB may in the future deny access to Giphy to competitors. So
| if you own a tool that your competitors may use then that's anti-
| competitive? Seems like that could apply to a lot of companies.
| Why not wait for actual misuse and base a case on that?
|
| Also what's so special about Giphy? Seems it could be duplicated
| fairly easily by any serious competitor.
|
| And competition being defined as other social media platforms?
| Pretty broad definition.
|
| Seems FB hatred is making bad law. And that bad law will bite
| others not just FB.
| jedimastert wrote:
| > Also what's so special about Giphy? Seems it could be
| duplicated fairly easily by any serious competitor.
|
| Imgur already exists, and I believe (?) Giphy was created as an
| answer to it?
| lopis wrote:
| Giphy started as the place to upload mp4 "gifs" to post on
| reddit. There was the giphy bot that would convert any .gif
| to a giphy. But naturally they had to pay the bills, so the
| grew.
| nowherebeen wrote:
| > Also what's so special about Giphy? Seems it could be
| duplicated fairly easily by any serious competitor.
|
| Just cause its easily duplicated doesn't mean others can
| compete. You can easily duplicate Instagram, Twitter,
| Pinterest, etc. But unless you are as big as Facebook, you will
| not be about to compete. Its called network effect.
| ComodoHacker wrote:
| If Telegram shows anything, you can.
| oblio wrote:
| Telegram was launched 8 years ago. By a Russian
| billionaire.
|
| Facebook/WhatsApp/Instagram have ~3 billion users and
| Telegram only has 500 million, after FB has been under
| constant attack for about 3 years and Telegram has received
| a ton of free advertising as a result.
|
| If you call that easy (after all, that what the comment you
| were replying to was asking), then everything in this life
| is easy. Heck, getting resurrected is probably "easy".
| hansel_der wrote:
| hehe, yea!
|
| tg value proposition is based around a superior user
| experience, that's what competition is all about.
| tjpnz wrote:
| >Also what's so special about Giphy? Seems it could be
| duplicated fairly easily by any serious competitor.
|
| They're not buying it for the tech, they're buying it for the
| user base so they can sell their data to advertisers.
| luma wrote:
| And also to prevent it from growing in such a way that it
| could threaten existing Meta properties. This is the typical
| behavior in monopolies these days, get big enough to simply
| buy out any potential competition. Seems like the UK has had
| enough.
| Spivak wrote:
| Which is fine, they're an advertising company. At the moment
| that regulators say that it's okay for Facebook to exist and
| operate the way they do -- collecting and organizing data to
| use for ad targeting, you can't really be on a high-horse
| about them doing that.
| DaiPlusPlus wrote:
| Doesn't Giphy also have rights-agreements with major movie
| studios - thus allowing their users to exchange clips of
| copyrighted content without fear of litigation (something
| about Giphy persuading litigious studios that allowing clips
| is basically free marketing)?
| crispyporkbites wrote:
| Don't know what Giphy has, but creating and sharing a gif
| from a movie would be fair use and not subject to
| copyright.
|
| You're not going to watch a movie in gif format, and it
| would be a derivative anyway.
| kadoban wrote:
| Fair use isn't that cut and dry, it depends on how much
| of the work you're using, what you're using it for, how
| much you transformed it, etc.
|
| It's really not "well it's only a gif, you can't touch
| me".
| sbarre wrote:
| Sure as an individual, but a movie studio would
| absolutely go after a company that is in the business of
| indexing, hosting and serving clips from their movies.
|
| I suspect this is why Giphy got that license. And I bet
| it comes with some terms like allowing studios to remove
| GIFs they don't like, etc..
| DaiPlusPlus wrote:
| > And I bet it comes with some terms like allowing
| studios to remove GIFs they don't like, etc..
|
| Y'ever noticed how the "send a GIF" panels in apps (often
| using Giphy behind-the-scenes as whitelabel) often have
| the top few rows of "trending" (quotes intentional) GIFs
| are mostly taken from recent major Hollywood releases?
| Most of the time it's whatever the most recent Marvel MCU
| film was - or some other mass-market action film - so if
| not the MCU then it'll be from whatever Disney's latest
| Star Wars movie or TV show just-so-happens to be.
|
| ...so yeah, that's very likely paid product placement
| right there. Not only is it free advertising for Marvel,
| but it's advertising that people actually want to share
| with each other!
|
| Of course, what gives Giphy its credibility with net-
| savvy users is that they let people upload and cut their
| own GIFs. If you instead imagine Giphy as just being a
| free, maybe even banner ad-free, repository of GIFs but
| was strictly read-only (maybe have a likes system?) and
| comprised of only rightsholder-approved GIFs (but imagine
| the selection was still substantial so 75%+ of the time
| you'd still be able to find the right reaction GIF for
| your situation: it's just it'd all be the same well-known
| actors playing the same roles in all the same kinds of
| films and TV shows; no user-generated-content or really
| any material that isn't owned by a Fortune 500 media
| company) - but would people still use it? I think they
| would - especially if the E2E user-experience quality is
| there... as opposed to most other kinds of sites that do
| tolerate their users committing acts of copyright
| violation, but plaster the site in the worst online ads
| of all (because most of their users are smart enough to
| be offended by homogenized and consolidated entertainment
| media then they're going to be smart enough to run
| adblock too).
|
| Disney Co is now at the point where they can choose to
| give Giphy a sweet deal (e.g. a covenant not to sue or
| even an explicit copyright license, provided Giphy
| promotes pro-Disney GIFs) and use Giphy not necessarily
| for their own direct benefit (i.e. GIFs as advertising
| new films), but to choose to actively support, fund and
| promote Giphy to ensure Giphy stays the default place for
| GIF editing and exchange, but because Disney then
| effectively "owns" Giphy, they can shut-off and shut-out
| promotion for all other non-Disney franchises just to
| ensure Disney laps up people's mindshare and
| imaginations: soon, in a few decades, Disney will own the
| rights to all new original thoughts.
| sbarre wrote:
| Yes agreed there is also paid placement for sure.
| gjhr wrote:
| Fair use is not a global concept.
| nicce wrote:
| So, even more guaranteed users ?
| [deleted]
| tlb wrote:
| The acquisition was announced 18 months ago and the regulators
| have only just announced that there's a problem. That's about
| how long it takes to make a decision like this.
|
| If FB wanted to use Giphy to squash an upstart competitor, 18
| months is plenty of time to accomplish it. So regulators
| preemptively forbid some kinds of abusable power, especially
| when the company has abused its monopoly power in the past.
|
| It would be better if regulators could act fast only when
| needed, but I'm not holding my breath for that to happen.
| TheRealDunkirk wrote:
| > The acquisition was announced 18 months ago and the
| regulators have only just announced that there's a problem.
| That's about how long it takes to make a decision like this.
|
| It's about as long as it takes to figure out that Facebook
| didn't grease enough palms in order to let this pass muster,
| and won't be shelling out any more, so they're going to make
| it public, in the hopes it will spur Facebook to reconsider.
|
| This is as predictable as the dance a company does when they
| have to fire an executive for shameful behavior, and the
| resulting PR to-do list dealing with the press and investors.
| somehnacct3757 wrote:
| Giphy is already integrated in lots of juicy places that
| Facebook could never get an integration with their current
| reputation and competitors. A gif embed service, from a
| business perspective, is a tracking pixel generator.
|
| So Facebook is buying the ability to see who you talk to in
| android keyboards, slack, discord, etc
| paxys wrote:
| That isn't how it works. Giphy/Facebook cannot see what is
| going on in your Slack channel just because you posted one of
| their GIFs.
| Nextgrid wrote:
| They can't see the content of the Slack channel. But they
| can absolutely correlate the web request that loads the GIF
| with the other (illicitly-collected) data they have on you
| and have an even better signal on who you are, which
| companies/people you talk to, etc.
| paxys wrote:
| All they can see is that a user on slack.com is
| requesting the GIF. If you are using the Slack desktop
| app there's no other session to correlate it to.
| Nextgrid wrote:
| The IP address and user-agent is enough of a session over
| time (remember that it loads every time you open your
| client as long as the GIF is in your recent history, so
| you get multiple data points to refine your search).
| Cookies or browser-specific state is on its way out
| anyway as more and more browsers impose restrictions.
| tengbretson wrote:
| Couldn't Giphy uniquely identify a gif when you post it to
| a channel, and when the reader(s) fetch said gif, fb could
| reconstruct the graph of channel/chat participants?
| sen wrote:
| Absolutely. Slack channel URL crossed with IPs that
| pulled the GIF then profile via user agents and other
| fingerprinting that tied it to known Facebook accounts.
|
| They'll know exactly who is in every single slack channel
| together, discord server, subreddit, etc etc.
| oblio wrote:
| Heck, it's worse than that.
|
| We're talking about GIFs. You know, short messages,
| memes, practically short text messages. They can
| literally extract context from those conversations, if a
| decent enough amount of them are used in the same place.
|
| That would actually be quite a cool machine learning
| exercise.
| black_puppydog wrote:
| for a very particular definition of "cool" that IMHO
| should be retired asap.
| LatteLazy wrote:
| The current UK government is very corrupt. The issue here is
| that someone at FB missed their request for a "donation". I'm
| sure this can all be sorted for a low 6 figure sum...
| andylynch wrote:
| Arguably yes, at least by British standards. And according to
| the Times' tapes a few years ago of the former Conservative
| treasurer and now Baron Cruddas you're right about the 6
| figures.
| pjc50 wrote:
| Facebook literally employ the former deputy Prime Minister.
| LatteLazy wrote:
| Yeah, but he was never really "in" with the current lot
| (not corrupt, different political party, not an old boy)
| and he hasn't been part of a government for 7 years.
|
| It's time for a new hire/donation/whatever
| ddek wrote:
| This is a regulator, not a political appointee or contracted
| agency.
| LatteLazy wrote:
| Im not quite sure what you mean. In the UK system everyone
| is a political appointee. Just how blatent a PM is about
| interfering in "independent" agencies depends on the PM.
| And Boris literally just sacked the head of the standards
| commission and dissolved it to save a political nobody who
| isn't even needed to shore up a majority.
|
| There is no separation of powers here, as long as the PM is
| the PM, he is basically god.
| sam0x17 wrote:
| > Also what's so special about Giphy? Seems it could be
| duplicated fairly easily by any serious competitor.
|
| You're right, a reasonable regulator following the U.S. anti-
| trust regulations as they were written in the early 1900s would
| also require Whatsapp, Instagram, and Facebook to all be
| cordoned off into separate companies at a minimum.
| breakfastduck wrote:
| Great, lets get on it then
| baby wrote:
| That's a dumb idea.
| vorpalhex wrote:
| Try to make arguments and not just insults.
|
| WhatsApp has been a goldmine for Facebook and they've
| been terrible stewards of the platform, with significant
| moderation woes cutting both ways. It's meant to be their
| foray into countries that don't typically use Facebook
| and serves to force people onto their platform.
|
| I'd be very ok if Facebook was forced to offload it.
| baby wrote:
| > WhatsApp has been a goldmine for Facebook
|
| Come on, FB ran whatsapp for many years with zero
| revenue. Whatsapp would not be what it is today without
| FB.
|
| > they've been terrible stewards of the platform
|
| In what sense? When they enabled end-to-end encryption
| for billions of people? Or launched encrypted backups?
| vorpalhex wrote:
| > Come on, FB ran whatsapp for many years with zero
| revenue.
|
| And Walmart undercut prices to the point of losing
| revenue to establish their position. Your lack of
| profitability does not somehow undo your monopolizing.
|
| > When they enabled end-to-end encryption for billions of
| people?
|
| Whatsapp still does not have global E2E [1].
|
| > Or launched encrypted backups?
|
| Yet the FBI still puts pen registers on the service [2]
| which makes backups moot.
|
| > Whatsapp would not be what it is today without FB.
|
| I think WhatsApp would be a much better product in
| someone elses hands. [3] [4]
|
| [1] - https://nypressnews.com/news/technology/meta-
| confirms-messen...
|
| [2] - https://propertyofthepeople.org/document-
| detail/?doc-id=2111...
|
| [3] - https://m.dw.com/en/whatsapp-in-india-scourge-of-
| violence-in...
|
| [4] - https://techhq.com/2021/11/after-record-gdpr-fine-
| whatsapp-f...
| sam0x17 wrote:
| I also think if we're being charitable, AWS would be split
| off from Amazon, and possibly sub-divided further, likewise
| for the other public clouds -- Google search and Google
| Cloud shouldn't be owned by the same entity, etc.
| ivirshup wrote:
| How so?
|
| Facebook buying Instagram and WhatsApp is essentially
| them buying out their competition.
|
| Google running a cloud service is more like renting out
| excess capacity - which is quite common across
| industries. Plus there's a lot of competition in the
| cloud space.
| sam0x17 wrote:
| Yeah, a charitable reading of the old trust-busting laws
| and the motivations behind them would suggest that
| something like a search engine company should not have
| any products other than the search engine itself, lest
| there be a massive conflict of interest. If you have an
| interest in receiving incoming web traffic, you have a
| conflict of interest if you also own a search engine (or
| online advertising network, for that matter).
| oblio wrote:
| There's a clear conflict of interest when owning the
| platform and services on top of it.
|
| You'll be <<very>> tempted to do things to the platform
| to favor your own services.
|
| The incentives are so strong I don't think we've even
| invented things to prevent this on a long enough time
| scale.
| inetknght wrote:
| > _Google running a cloud service is more like renting
| out excess capacity_
|
| If that were actually the case, then sure.
|
| But it's not. Alphabet's Google Cloud services have whole
| data centers dedicated to renting to the public and
| Alphabet's Google and other businesses entities are their
| own customer.
| JulianMorrison wrote:
| > Also what's so special about Giphy?
|
| At a guess: a large existing library of GIFs.
| nicce wrote:
| This might be the real motivation. Facebook(Meta) is data
| hungry and data driven company. It cares about existing data
| and the potential for getting more data. Known platform has a
| high chance to provide more data.
| JulianMorrison wrote:
| https://media0.giphy.com/media/DwrnYsZCXspu8/giphy.gif?cid=
| 7...
| klelatti wrote:
| > I guess I don't get it. This is based on speculative misuse -
| that FB may in the future deny access to Giphy to competitors.
| So if you own a tool that your competitors may use then that's
| anti-competitive? Seems like that could apply to a lot of
| companies. Why not wait for actual misuse and base a case on
| that?
|
| On the face of it this sounds reasonable but doesn't work in
| practice.
|
| Precisely what service do they have to offer? What quality
| standards. How much can they charge? Do they have to innovate
| or can they let it stagnate. How do you police it? If FB want
| to limit the service they will (and they have a history in this
| area).
|
| See also Nvidia / Arm.
| alibarber wrote:
| Many services and products can be duplicated. I think the major
| concern is the network effect - it's the users that they are
| interested in.
| notatoad wrote:
| >And that bad law will bite others not just FB.
|
| this is anti-trust regulation, not precedent that will be
| applied to any company. the context is important. they're
| looking at the scale and business practices of facebook
| specifically and making a decision that _facebook_ shouldn 't
| own giphy, not that any company can't own a tool that
| competitors may use.
| oohaargh wrote:
| Not an expert in the law or in this case, but blocking large
| companies from acquiring other companies which operate in the
| same space in order to cement monopolies is a pretty
| fundamental part of what a competition regulator is there for,
| it's hardly "bad law" or some arbitrary campaign against
| facebook
| baby wrote:
| How is giphy "the same space"?
| vorpalhex wrote:
| Giphy had an advertisement network that was based around
| gifs. Facebook shut down that advertisement network when
| they bought Giphy and rolled their own ads instead.
| oohaargh wrote:
| Mate, the whole article is 11 sentences, including the bit
| that explains what a gif is, and 2 of those 11 sentences
| answer your question
| cletus wrote:
| I can't help but think of Aesop's fable about the goose that laid
| the golden eggs. That goose is the tech industry and what may
| kill it is pointless, kneejerk political or regulatory action.
|
| In the social media space, if Facebook has such a monopoly, why
| have there been a number of competitors that have come along and
| represented an existential threat in the same way Facebook did to
| Myspace? Examples: Instagram, Twitter, Snapchat and Tiktok.
|
| But this regulatory ruling isn't even about Facebook's dominant
| business, it's about the _potential_ harm to the _advertising_
| business from a $30m easyily-reproducible company. Sure, Giphy
| had a lot of installs but it 's not even the only such company in
| this space (eg Tenor? IIRC).
|
| And if you're going to go after a company for dominance in
| advertising and you go after _Facebook_ and not _Google_? How
| does any of this make sense?
|
| These companies are also facing competition from competitors who
| aren't and won't be shackled by the threat of government
| intervention. Instead, those companies are extensions of the
| state. I am of course talking about China and the likes of
| Tencent, Alibaba, Tiktok and so on.
|
| So I'm confused by this move because it seems ultimately
| pointless. Anyone claiming it's "sending a message" miss the
| point that this cuts both ways. It can embolden those who oppose
| regulation as government overreach and this may hurt actual
| anticompetitive practices rather than potential anticompetitive
| practices.
|
| All around, this just seems so... dumb.
| Nextgrid wrote:
| > That goose is the tech industry and what may kill it is
| pointless, kneejerk political or regulatory action.
|
| The only "geese" that will be hurt by this are those that feed
| on "engagement", illicit data collection and human misery in
| general. I'd say those geese can go and burn in hell.
|
| The legitimate tech industry that make real, sustainable
| products/services in exchange for money will not be affected by
| this at all.
|
| Only those whose "business model" (if you can call it that) is
| to get tons of VC cash and either end up as a monopoly or get
| bought out by a bigger fish is going to be affected, and again
| I'd argue that's a net win.
| Teandw wrote:
| 1) "But this regulatory ruling isn't even about Facebook's
| dominant business, it's about the potential harm to the
| advertising business"
|
| Yes, using it's dominance to control a market and decide where
| people get to advertise, rather than people having a choice.
|
| 2) If you think Giphy is easily-reproducible, it shows how
| little you know about things in general.
|
| 3) "And if you're going to go after a company for dominance in
| advertising and you go after Facebook and not Google?"
|
| 1 minute of research would show you that the CMA already are
| and have been at Google's doors too. More recently about
| Google's power when it comes to third-party cookies; which is
| for advertising.
|
| The CMA are pretty much always going at the big companies for
| something.
|
| It seems like you need to understand what you're talking about,
| before you try and talk about it.
| jimbob45 wrote:
| >If you think Giphy is easily-reproducible, it shows how
| little you know about things in general
|
| Is Giphy fundamentally different in some way than Imgur,
| Photobucket, Tenor, Gfycat, or Animoto? Seems like there's a
| pretty healthy amount of competition in the space unless I
| just don't understand what makes Giphy special.
| Teandw wrote:
| Imgur, Photobucket and Animoto aren't comparable to Giphy.
| They're targeting different things. That would be like
| comparing Youtube to LinkedIn. Both social websites but
| ultimately have different goals/aims.
|
| What makes Giphy special is the content/user moat that it
| has.
|
| Anyone can easily create a Giphy website and search engine.
| You can most probably buy a Wordpress theme for $20 to do
| it. You can not easily-replicate what Giphy has achieved in
| regards to content moat and user numbers. I wouldn't call 2
| other businesses in the same industry, healthy competition.
| MAGZine wrote:
| You seem to have a lot of very strong opinions stemming from a
| blocked acquisition of an "easily reproducible company that
| doesn't really matter."
|
| The idea that regulators shouldn't regulate because someone
| (the regulated?) might be upset is laughable. We don't acquit
| murderers because their community would miss them.
|
| The only people who will oppose this are "captial-at-all-
| costs," folks who are happy with the continued consolidation of
| power/resources.
| cletus wrote:
| The only reason Giphy isn't reproduced is because there's no
| need. If FB shut off Giphy tomorrow, do you honestly think
| it'd take more than a few days for some other GIF extension
| to take over? Really? If nothing else, Tenor and other
| existing companies would immediately fill the void.
|
| > The idea that regulators shouldn't regulate because someone
| (the regulated?) might be upset is laughable.
|
| So let me address this straw man by stating what I'm actually
| saying:
|
| 1. The time to block an acquisition is prior to the
| acquisition;
|
| 2. If you placed conditions on that acquisition (which
| regulators often do), you should need an _actual_ violation
| of those conditions rather than a _theoretical_ violation;
|
| 3. Regulators should focus on actual problems. In the US, the
| Sherman Act was a result of the Standard Oil monopoly.
| Standard Oil controlled production, refining and distribution
| of petroleum products (primarily kerosene). It's just not the
| same with many of the so-called big tech problems today.
|
| FB's most troublesome acquisition is WhatsApp and even in
| that case it was a company started by someone who famously
| got rejected by a job with Facebook in the late 2000s (ie
| Brian Acton). If you can establish a real threat to a company
| after that company has a huge lead, it's pretty good evidence
| that that company doesn't have the wall around their
| "monopoly" you think they do.
|
| There's a lot of political grandstanding around this now. My
| point is that companies shouldn't be regulated. It's that
| rolling back Giphy is just such a pointless exercise of that
| regulatory power.
| tschellenbach wrote:
| Succession season 3 describes this accurately
| worker767424 wrote:
| I don't know what Giphy's financials looked/look like, but it
| felt like the type of startup that could only ever run on VC
| funding to eventually be bought up by a larger player. I'm not
| convinced there's a self-sustaining business, there.
| easytiger wrote:
| Farcical CV padding.
| krallja wrote:
| Who is padding their CVs? The ... regulators?
| google234123 wrote:
| Yes
| easytiger wrote:
| Yup.
| pmontra wrote:
| > Meta argued that the regulator was "sending a chilling message
| to start-up entrepreneurs: do not build new companies because you
| will not be able to sell them."
|
| This overlooks the traditional and perhaps now unpopular reason
| to start a company: making money by selling something useful. No
| need to sell the company. By the way, Facebook buys, does not
| sell.
| notahacker wrote:
| Ironically, that statement is the strongest argument in favour
| of blocking the acquisition I've heard.
|
| Any company so arrogant about its market dominance it assumes
| that the only way for an entrepreneur to succeed in building a
| company in its market is to sell _to them_ deserves to be
| broken up.
| Aunche wrote:
| There isn't any other way to make money from something like a
| gif hosting platform. Plenty of new companies get started all
| the same without being acquired.
| paulcole wrote:
| I think that's the only way for a gif hosting/copyright
| infringing platform to succeed.
|
| https://medium.com/@pasql/giphy-is-stealing-from-
| artists-689...
|
| Other companies that exchange money for goods and services
| might have better luck.
| danudey wrote:
| Too many people are trying to create a startup with short-
| term success in order to get acquired. Get that $500m
| acquisition in the bag and then retire. Boom, done.
| parasense wrote:
| It's not ironic at all, nor is it very persuasive.
|
| It's pretty well established truism by now that start-ups are
| a business model where the founders and angel investors
| become wealthy once the business sells. It would be
| interesting to see the breakdown of how many start-ups
| sellout, continue as an independent entity, or completely
| fail. Regardless, just because Facebook recognizes the
| business culture in the SF Bay area is not a persuasive
| argument for why they should be broken up.
| notahacker wrote:
| > It's pretty well established truism by now that start-ups
| are a business model where the founders and angel investors
| become wealthy once the business sells.
|
| It's a pretty well established truism that startups in most
| markets would have absolutely no difficulty at all in
| selling their business via many different exit routes if
| one particular player wasn't able to go through with an
| acquisition for any reason. If it was too early to go
| public the could sell to Instagram Inc or WhatsApp PLC, or
| a private equity firm that wants to get into a sector where
| many, many firms have become stable and profitable.
| Facebook's statement that if _they 're_ not allowed to buy,
| entrepreneurs [in their market] won't be able to sell [to
| anyone else] is a truism specific to the social media
| market Facebook dominates, and a direct consequence of it
| having the sort of monopoly power that gets them
| scrutinised by the Competition Commission.
| frankfrankfrank wrote:
| Not to sound too obvious, but that is precisely the current
| state that is also ever increasing. As with seemingly most
| things, we are witnessing a reemergence of a system similar
| to what existed before the American Revolution, the
| feudalistic, aristocratic, monarchical system where you must
| show fealty to your vassal lord corporation.
|
| Even the subject supposed effort to prevent monopolization is
| not understanding the underlying issue, that competition (a
| form of freedom) has for all intents and purposes been
| totally subverted because rather than monopolizing an
| industry or sector, today's monopolists/cartels realized they
| should just totally supplant the whole market so people have
| no choice but to kiss their royal ring. That is something
| that has effectively been accomplished and society may just
| have not understood yet what's going on, or likely those who
| would be expected to ward this off were also totally
| compromised and corrupted ($$$).
|
| What we need is reinstatement of conditions that lead to are
| allow competition. That may take on several different forms,
| e.g., (not to pick on Apple, but to use a recent example)
| that Apple must provide the same access to core integration
| (based on reasonable technical specifications anyone can
| meet) that AirTags utilize to competitors like Tile,
| including the whole apple device network (AirTags are real
| reason that SARS-CoV-2 "contact tracing" was snuck in to save
| us all, btw). Another example; Apple and Google, may not
| block or ban any user or any app that meets its general and
| public technical specifications and are not a violation of
| law and human rights like free expression, whether out vassal
| lord corporations like what users have to say or if an app is
| a competitor or does something they don't like or not. The
| alternative should simply be that Apple and Google can just
| build their own internet if they wish to violate people's
| rights on the public internet and communications ... at the
| very least.
| random314 wrote:
| > As with seemingly most things, we are witnessing a
| reemergence of a system similar to what existed before the
| American Revolution, the feudalistic, aristocratic,
| monarchical system where you must show fealty to your
| vassal lord corporation.
|
| This is not something new, but has always been the case.
| Capitalism is the 2nd iteration of feudalism. When the
| French revolution threw feudalism into jeopardy, the feudal
| lords - conservatives who sat in the right wing of the
| French parliament- hoped capitalism would rescue feudalism
| and help maintain social hierarchies. Democracy is seen as
| anti feudal and anti capitalist in its genesis, by giving
| everyone one vote independent of wealth. Earliest proposals
| for elections were only for Male land owners.
|
| The founding fathers were capitalists for the most part.
| Apocryphon wrote:
| Don't forget that many of Japan's large zaibatsu
| corporations were founded by former samurai clans during
| the Meiji Restoration.
| tehjoker wrote:
| Most of them owned rather than rented their labor, but
| yes they did start the US with the idea of suppressing
| mass universal democracy, calling it mob rule.
| AnthonyMouse wrote:
| What kind of ahistorical criticism is this?
|
| The US was the first modern democracy. Were they supposed
| to go from dictatorial monarchy to universal suffrage in
| one day or be condemned forever?
|
| If you want to criticize something, criticize the fact
| that we _still_ don 't have universal suffrage. In many
| states, felons can't vote. Which is cynically claimed as
| denying them something as punishment for their crimes,
| but in reality is done to prevent the victims of mass
| incarceration from becoming a large voting bloc to end
| it.
| Feint1 wrote:
| This isn't really true. Before the declaration of
| independence the people of the American colonies couldn't
| vote in British general elections, yet the Parliament of
| the United Kingdom of Great Britain (as it was known
| then) had full legal rights to legislate for the
| colonies. This is due to the way the British constitution
| works, where Parliament has supreme power over
| everything, including the the Monarch, the Monarch's
| government and any territories outside of the United
| Kingdom. This remains the same for all existing British
| overseas territories such as Bermuda and the Cayman
| Islands where there is no representation in Parliament.
|
| The individual American colonies had legislatures for
| their own territory, with limited powers as defined in
| their charters. One example is the legislature of
| Virginia which has had elected members since its
| inception 150 years before American Independence and
| still continues to hold elections to this day.
| AnthonyMouse wrote:
| This is kind of my point. Should we condemn the Magna
| Carta as well?
|
| We should spend less time whinging about the people who
| did better than their fathers and more time doing better
| than ours.
|
| The people allowing themselves to be consumed by "hate
| your neighbor" propaganda and mistaking that for a
| protest movement are getting played. Fight who's above
| you, not who's beside you.
| mbg721 wrote:
| It is true that the French Revolution and subsequent
| counter-revolution were not as successful as the American
| Revolution was, and that the non-democratic features of
| the American system are a major reason for that.
| JumpCrisscross wrote:
| > _that the non-democratic features of the American
| system are a major reason for that_
|
| It's unfortunately unpopular to point out that we have
| ample evidence, from history and contemporaneously, that
| democracy _per se_ doesn 't work. It devolves into a
| populist, majoritarian and often authoritarian mess as
| reliably as (non-monarchical) dictators fall into chaos.
|
| The men who founded our Republic understood this, which
| is why they explicitly created a system that balances the
| strengths and weaknesses of monarchy, oligarchy and
| democracy. (Hint: they're our three branches of
| government.) At some point, we wrote that balance out of
| our cultural history, and we're partly paying the price
| now.
| tehjoker wrote:
| There are many liberal republics and socialist republics
| doing fine all over the world. This is just trendy neo-
| feudalist rhetoric. The US is dissolving due to
| inadequate democracy where people feel they have no
| control over their government or life's destiny.
| qwytw wrote:
| Are there any democratic 'socialist republics' not social
| democratic (or social market economy) ones but actually
| socialist? Scandinavian countries are definitely not
| socialist they have strong social safety nets and high
| taxes which results in a relatively high government
| spending to GDP ratio (44% in the US vs 58%, 54%, 53% in
| Norway, Denmark and Sweden) but that's about it. And if
| we're talking about "neo-feudalism" Sweden for instance
| has one the highest wealth inequality coefficients in
| Europe, it's even slightly higher than in the US, so from
| a purely cynical perspective they are just giving their
| 'peasants' enough to keep them quiet while a huge
| proportion of all private wealth in the country is held
| by a few families.
| fragmede wrote:
| According to https://en.m.wikipedia.org/wiki/List_of_coun
| tries_by_income_..., the US is higher than Sweden now,
| before taxes and transfers, and that gap only widens if
| taxes and transfers, the primary mechanism governments
| have to reduce inequality, are taken into account.
| qwytw wrote:
| I meant wealth inequality rather than income inequality.
| JumpCrisscross wrote:
| > _liberal republics and socialist republics doing fine
| all over the world_
|
| These are policy preferences. One can have a liberal,
| conservative, socialist and/or capitalist monarchy,
| oligarchy or democracy. The latter talk to how power is
| divided. The former to how it used.
|
| Naturally, some power divisions tend to lead to certain
| policy preferences. But that is a correlation
|
| > _just trendy neo-feudalist rhetoric_
|
| This is the cultural amnesia I'm talking about. These
| ideas aren't new. From Federalist No. 10:
|
| "From this view of the subject it may be concluded that a
| pure democracy, by which I mean a society consisting of a
| small number of citizens, who assemble and administer the
| government in person, can admit of no cure for the
| mischiefs of faction. A common passion or interest will,
| in almost every case, be felt by a majority of the whole;
| a communication and concert result from the form of
| government itself; and there is nothing to check the
| inducements to sacrifice the weaker party or an obnoxious
| individual. Hence it is that such democracies have ever
| been spectacles of turbulence and contention; have ever
| been found incompatible with personal security or the
| rights of property; and have in general been as short in
| their lives as they have been violent in their deaths.
| Theoretic politicians, who have patronized this species
| of government, have erroneously supposed that by reducing
| mankind to a perfect equality in their political rights,
| they would, at the same time, be perfectly equalized and
| assimilated in their possessions, their opinions, and
| their passions.
|
| A republic, by which I mean a government in which the
| scheme of representation takes place, opens a different
| prospect, and promises the cure for which we are seeking.
| Let us examine the points in which it varies from pure
| democracy, and we shall comprehend both the nature of the
| cure and the efficacy which it must derive from the
| Union.
|
| The two great points of difference between a democracy
| and a republic are: first, the delegation of the
| government, in the latter, to a small number of citizens
| elected by the rest; secondly, the greater number of
| citizens, and greater sphere of country, over which the
| latter may be extended.
|
| The effect of the first difference is, on the one hand,
| to refine and enlarge the public views, by passing them
| through the medium of a chosen body of citizens, whose
| wisdom may best discern the true interest of their
| country, and whose patriotism and love of justice will be
| least likely to sacrifice it to temporary or partial
| considerations. Under such a regulation, it may well
| happen that the public voice, pronounced by the
| representatives of the people, will be more consonant to
| the public good than if pronounced by the people
| themselves, convened for the purpose. On the other hand,
| the effect may be inverted. Men of factious tempers, of
| local prejudices, or of sinister designs, may, by
| intrigue, by corruption, or by other means, first obtain
| the suffrages, and then betray the interests, of the
| people."
|
| [1] https://guides.loc.gov/federalist-
| papers/text-1-10#s-lg-box-...
| TazeTSchnitzel wrote:
| > One can have a liberal, conservative, socialist and/or
| capitalist monarchy, oligarchy or democracy. The latter
| talk to how power is divided. The former to how it used.
|
| I don't think you can make such a separation so easily.
| Legislative power is almost dwarfed by the power of
| capital. When you have a "liberal democracy", the two
| parts are in constant conflict. (I don't mean to say
| socialist democracy wouldn't have similar problems, just
| that the structure of power is deeper than just
| elections.)
| tehjoker wrote:
| The US was the first of the series of republican
| revolutions of that era and the most conservative of all
| of them (compare with the radicalism of 1789 France for
| example). There are things to admire about it, but I
| think it is better to call it a war of independence than
| a proper social revolution.
|
| The reason to be critical today is we are _still_ living
| in that framework! We have to do better.
| dnautics wrote:
| this is patently not true. It would do to remember that
| we are currently in version 2.x of the US, the US was
| _started_ , mostly by the same framers, not with that
| idea of suppressing universal democracy (articles of
| confederation), and _then_ they rolled back a tad bit on
| democracy (constituion).
| tehjoker wrote:
| Articles of confederation vs. constitution related to
| compact between the states vs the strength of the federal
| government. Most of the people who signed the decl. of
| independence owned slaves or were lawyers for people who
| do. I'll grant maybe a few more people in the
| constitutional convention might not have been slave
| holders.
|
| However, it would be good to recall that during the era
| of good feelings, a huge number of presidents were slave
| holders from Virginia. That's who held the balance of
| power in the country. The constitution itself was a
| compromise over slavery, modeled after English government
| (house/senate -> commons/lords, pres/vice pres ->
| king/heir apparent). Voters were landed white male
| adults, senators were elected indirectly by the states,
| as was the president (and still is though we have papered
| over it!). Supreme court judges were given life terms to
| enable disruption from below to be smoothed out by prior
| appointments.
|
| The whole idea of the country was to guarantee rights to
| the upper class and place the country under new
| management and diffuse lower class energy via grants of
| land in westward expansion. The "genius" of the
| constitution became apparent when the entire thing broke
| down only ~70 years later in a bloodbath over the issue,
| slavery, they papered over at the convention which was a
| direct affront to the rhetoric of the revolution.
| dnautics wrote:
| > diffuse lower class energy via grants of land in
| westward expansion
|
| Which would make them property owners, and therefore
| eventually able to vote via the statehood process. Your
| premise is self-contradictory.
| tehjoker wrote:
| The Jeffersonian idea was to create a nation of self-
| sufficient yeoman farmers (they thought slavery would go
| away over time due to its heavy tobacco emphasis that was
| depleting the soil). The industrial revolution, the
| cotton gin, and other world historical factors made this
| vision (which was a vision of a faction, not the entire
| elite) implausible.
|
| They wanted to do this to _relieve popular pressure from
| below_ by creating "responsible" landowners that had a
| stake in the system. The landowners would continue to be
| white and male, but with an expansion of who gets to
| participate. The American system repeatedly does this
| under stress. A system that was actually liberatoratory
| would work in the interest of the people, not simply
| respond to threats.
| dnautics wrote:
| > The landowners would continue to be white and male, but
| with an expansion of who gets to participate.
|
| I also don't think this is quite right, either. There
| were black landowners, specifically in virginia, but
| other states too like maryland and louisiana, many of
| whom were yeoman farmers, and even a few who owned
| slaves, and were successful petitioners to suits heard at
| the house of burgesses, until the late 18th-century, but
| eventually it just became too convenient to be lazy and
| label "black == slave".
|
| You could be a black landowner in connecticut and vote
| until 1814, well after the constitution was passed. It's
| kind of a common narrative that the US was born in
| racism, but I think it was more "the US did not know what
| to do with the issue of race and grew into racism" which
| is scarier, if you ask me.
|
| correction: until the early 18th century, which is when
| the black codes were passed in Virginia. However, several
| other states allowed free blacks to vote around the time
| of the constitution.
| waterheater wrote:
| By modern standards, we view their actions as morally
| wrong. Owning slaves is morally wrong. Only permitting
| white males to vote is morally wrong.
|
| Yet, we also forget that the world then was not like the
| world today. Who received comprehensive education back
| then, the kind needed to run states and countries?
| Typically, the rich, and within that, men. The
| inequalities of the world in those times were immense and
| could not be mended in even one generation. Liberal
| countries such as USA fought against the powerful forces
| of British imperialism, with the promise of a better
| tomorrow for all citizens, however long that takes.
|
| >The constitution itself was a compromise over slavery
|
| If you've ever tried to make significant change in an
| organization of any type and size (including government),
| you MUST take inertia into account. What you claim was
| willful choice, I claim was inertia. Slavery was not
| banned in the Constitution because a few Southern states
| would have refused to sign it, their claim being such
| action would render economic devastation. The very day it
| became possible, the importation of slaves was federally
| prohibited by Jefferson. As slavery became increasingly
| restricted by the federal, the southern states dug in
| their heels and refused to change their labor practices.
| The eventual Civil War was one of economics, with the
| general population heavily propagandized by those wealthy
| slaveowners wanting to preserve their livelihood.
|
| >diffuse lower class energy via grants of land in
| westward expansion
|
| Your analysis is overly simplistic. Those grants of land
| to lower-class citizens ensured the new Western lands
| would be worked by citizens. It was great opportunity
| many lower-class citizens jumped on, especially those who
| didn't own land before. By relocating to a smaller
| community, a lower-class citizen became immediately more
| influential in their local community by numbers alone.
| Yes, it diffuses that energy, but that's not inherently
| bad. In different terms, I see that decentralization as
| an intentional, value-adding feature, not an
| unintentional bug.
| tehjoker wrote:
| > Yet, we also forget that the world then was not like
| the world today.
|
| False. Contemporary preachers were regularly commenting
| that slavers were going to hell. They didn't have a
| different morality, just different economic incentives
| (i.e. they thought they could get away with it).
| Luminaries such as Jefferson even expressed that slavery
| was wrong, though he didn't actually free his slaves
| during his lifetime. Show respect for people of the past,
| they weren't stupid. It wasn't even that far into the
| future that the slavery abolition movement got going _in
| other countries such as the UK_.
|
| > Those grants of land to lower-class citizens ensured
| the new Western lands would be worked by citizens.
|
| The land was Native American land and this was only
| achieved via genocidal means.
| waterheater wrote:
| >They didn't have a different morality, just different
| economic incentives (i.e. they thought they could get
| away with it).
|
| Exactly, slavery was a significant economic factor in the
| world back then. It is no longer a significant economic
| factor in the world today. Also, don't think that
| preachers speak their message without understanding the
| nature of their congregation. The preacher chooses a
| message they feel the congregation should hear. Rare is
| the sermon which chastises the economic means of that
| church body's membership.
|
| >The land was Native American land and this was only
| achieved via genocidal means.
|
| Native American tribes were weakened by disease, defeated
| by technology, and subdued by law (the title of "Guns,
| Germs, and Steel" captures this point nicely, though I
| don't agree with all of Diamond's arguments). Would you
| judge one Native American tribe similarly should they
| commit genocide upon another tribe and take their lands?
| Based on your comments here, I suspect no, and I also
| suspect such is still considered morally wrong but less
| morally wrong than Western expansion through kinetic
| force.
|
| Racist laws are morally wrong and must be eschewed. There
| is no doubt that Native Americans were eventually subdued
| by such laws, but it took decades of fighting for Native
| Americans to reach their low point. So, I submit to you a
| serious question to ponder: if two warring entities are
| technological equals, is their fighting "better" in some
| sense?
| bcrosby95 wrote:
| Hell, some states required land ownership to vote in the
| USA up to the 1850s.
| jfk13 wrote:
| > "While constitutionally given the right to vote by the
| Fifteenth Amendment in 1870 and 19th Amendment in 1920,
| the reality of the country was such that most African
| Americans and some poor whites could not vote until the
| passage of the Voting Rights Act of 1965."
|
| https://en.wikipedia.org/wiki/Universal_suffrage#cite_not
| e-V...
| bencollier49 wrote:
| > Capitalism is the 2nd iteration of feudalism.
|
| The Whigs and Tories opposed each other in the UK
| parliament for a long time precisely because this is not
| the case.
|
| There is a divide in the UK Conservative Party between
| Tories and Liberals.
| [deleted]
| ben_w wrote:
| The Communist Manifesto certainly sees things that way,
| but I don't think capitalism has been like that in the
| USA since roughly Roosevelt's New Deal. (I don't want to
| suggest this happened everywhere at the same time:
| weirdly, my British history lessons don't cover anything
| the British did or experienced between the two World Wars
| other than "Chamberlain was naive").
|
| The iconic images of the downfall of Communism was the
| economic catastrophe, shops with empty shelves, etc.;
| Capitalism had a similar experience in the Great
| Depression, was changed by it, but the name remained.
| kaibee wrote:
| > Capitalism had a similar experience in the Great
| Depression, was changed by it, but the name remained.
|
| Unfortunately a lot of those New Deal changes were
| reverted since then. For one, the minimum wage was
| supposed to be a living wage one could raise a family on.
| Spivak wrote:
| Or ya know, that startups talk about having an _exit_ that 's
| either getting bought by someone or an IPO. Nobody in the
| startup world seems terribly interested in building a
| lifestyle business.
| mikepurvis wrote:
| Isn't there a selection bias going on here? The only
| entrepreneurs allowed in the club who don't fit the go-for-
| broke mold are those who make it there by being celebrities
| in other ways (thinking Fried/DHH or someone like Maciej
| Ceglowski).
| dd36 wrote:
| The media only talk about companies with investors.
| Investors want exits. Investors influence the media to talk
| about companies they're invested in.
| willcipriano wrote:
| Back in my day, businesses that made income by selling
| goods or services to customers were just called businesses,
| not lifestyle businesses.
| BrianOnHN wrote:
| Another crazy old idea:
|
| Businesses that prioritize people over capital.
| lotsofpulp wrote:
| Or governments take care of people, businesses focus on
| selling products and services.
| actually_a_dog wrote:
| Or, maybe.... just maybe... both businesses _and_
| governments consider and prioritize the humans in the
| equation.
| Pxtl wrote:
| Businesses that don't prioritize winning in the market
| will be outperformed by businesses that do.
|
| Let the government do the job of setting the boundaries
| on the market so they can do what's best for humans, and
| let businesses do the job of optimizing for victory
| within the market.
|
| That's where their respective incentives lie, so that's
| what they do best at.
|
| tl:dr; don't hate the player, hate the game.
| [deleted]
| actually_a_dog wrote:
| Ok. That's what your economics textbook thinks. What do
| _you_ think?
|
| Competition is _not_ the only way to get things done.
| Humans are definitely _capable_ of collective action. You
| may recall a few weeks ago where hundreds of millions of
| Americans just said "fuck 2 AM, it's now 1 AM" early one
| Sunday. How would you harness that?
| [deleted]
| JumpCrisscross wrote:
| > _businesses that made income by selling goods or
| services to customers were just called businesses, not
| lifestyle businesses_
|
| No, they were called shops. Where the business stops
| working without the owner-manager's labor. "Business"
| referred to industrial-scale activity. (Before the
| industrial revolution, "commerce" was the broad term
| including trade merchants and shopkeepers.)
|
| Similar to the industrial revolution's change in
| nomenclature, the advent of modern computing has
| delineated small businesses, which include shops and
| shop-like tech firms, from enterprises, which are
| industry-like ones. Mom-and-pops thinking of themselves
| as businesses is a modern phenomenon.
| donkleberriest wrote:
| If the owner-manager of Delphi goes home for the night,
| automotive parts do not stop being made. If the owner-
| manager of JBS goes home, McDonald's still gets their
| hamburger patties. Semiconductors. Raw ore. Train wheels.
| All of those things were enterprise _businesses_ , not
| shops, long before computers were heard of
|
| Your response is through the same exact lens being
| critiqued. Even today there's a vast economy of
| businesses, not shops, that fulfill key parts of the
| world economy and aren't building for an exit. The idea
| that that's weird/lifestyle is a modern, SV VC phenomenon
| and has nothing to do with computing nor the industrial
| revolution at all
|
| This is obvious enough to most people that we sometimes
| wonder why we call startups businesses. Really they're a
| new model of offshore R&D which often amounts to a hole
| into which to pour capital speculatively in hopes it will
| grow a tree
| Spivak wrote:
| How do you think startups make money? We're talking about
| two different things -- one is the value the business
| provides to their customers which is selling goods and
| services, and the other is the value the business
| provides to the founders and investors which is profit.
|
| Whether or not something is a lifestyle business is a
| shuffling around of who owns the business and gets the
| profit, not at all about how the business operates except
| as second order effects.
| dspillett wrote:
| _> How do you think startups make money?_
|
| Do you think most modern startups actually _do_ make
| money?
|
| A great many don't, they lose it hand over fist.
| Especially those that intend to grow fast and get bought
| (or IPO) fast. It worked for a number of current big
| names, and many smaller names that those big names since
| bought.
| Spivak wrote:
| You're just describing a growth strategy. The whole time
| they're burning cash they're still providing value to
| their customers. Nonprofits don't make money either and
| still provide value.
| willcipriano wrote:
| Are the providing value or reallocating it from VCs
| temporarily in order to obtain enough market share to
| then extort consumers for higher prices (less value per
| dollar) later on?
| JumpCrisscross wrote:
| > _obtain enough market share to then extort consumers
| for higher prices (less value per dollar) later on?_
|
| Are there many examples of this extortion?
|
| Casper and Blue Apron plummeted after adjusting pricing
| because they weren't providing sufficient value. Uber
| became profitable. It probably lost some customers. But
| nobody I know felt extorted by it--those who didn't like
| the new prices stopped using it.
| Apocryphon wrote:
| https://news.ycombinator.com/item?id=23216852
| M2Ys4U wrote:
| >Are there many examples of this extortion?
|
| Uber is definitely such an example - a lot of taxi
| companies disappeared because they couldn't compete with
| the scale of Uber with its subsidised prices.
|
| Now Uber have significantly increased their prices there
| are a lot fewer alternatives to turn to.
| JumpCrisscross wrote:
| > _Now Uber have significantly increased their prices
| there are a lot fewer alternatives to turn to_
|
| Can you give an example of a city where Uber has a
| meaningful monopoly? Hell, I'll even give you Uber _and_
| Lyft. Where the alternative modes of transport--be it
| private cars, public transport or taxis--are non-existent
| to someone who would have otherwise made use of them?
| spoonjim wrote:
| It's not that the alternatives are non-existent, it's
| that their cost (in dollars or some other parameter) have
| gone up a lot. For example, if you don't use Uber or Lyft
| in San Francisco, it takes a LOT longer to hail a taxi on
| the road than it used to.
| mlonkibjuyhv wrote:
| Or undermining other similar businesses that actually
| have to make more money than they spend. After said
| businesses are gone, and the investor cash dries up, what
| benefit is actually left?
| Spivak wrote:
| How does that work with other kinds of investments like
| loans? You don't "save up" to open a restaurant, you put
| together a business plan and go to a bank. VCs are just
| doing that but willing to take on riskier businesses in
| exchange for equity instead of interest payments.
| thfuran wrote:
| I suspect you'll find few restaurants opening up with the
| intention of opening as many locations as possible as
| quickly as they can be built, all providing food at under
| cost for years on end until the local restaurant scene is
| sufficiently disrupted that McDonalds buys them to make
| them go away.
| Spivak wrote:
| I mean you're essentially describing DoorDash +
| competitors and HelloFresh + competitors. But in the
| restaurant industry proper it's the same thing except
| your exit isn't to get bought by McDonalds but to
| secretly dominate the mid-high tier dining scene in a
| given area and collect all the profits. So they won't
| build a bunch of the same restaurants but will take on
| massive debt to buy everything in a trendy area. I didn't
| really expect that in 2018ish that there would be a pivot
| from these companies to a real-estate play so they don't
| even have to own the restaurants anymore but can force
| them to use the company payment system and suppliers but
| it makes total sense in a boring dystopia way.
|
| "Support Local Restaurants! (being puppeted by a massive
| hybrid restaurant/real-estate conglomerate)"
| lol768 wrote:
| > Nonprofits don't make money either and still provide
| value.
|
| They can make a surplus? And then reinvest it to further
| their cause?
| logicx24 wrote:
| Which is also what growth companies do? They reinvest
| their own earnings along with outside investment, which
| is the same as nonprofits (via donations).
| [deleted]
| notahacker wrote:
| There are markets where one potential acquirer being unable
| to do so doesn't completely scupper your chances of any
| exit though.
|
| If the antitrust regulators came down on Microsoft again, I
| don't think we'd see their lawyers argue that there's no
| other route for B2B software vendors to cash out except to
| sell to them.
| CivBase wrote:
| Yeah, that's one thing that's always bugged me about
| startups and VC.
|
| There seems to be general agreement that two big problems
| we're facing in the economy are 1) a slow consolidation of
| businesses into a handful of mega-corps which span across
| many markets and 2) an obsession with short-term gains to
| appease investors and shareholders. Yet the startup world
| seems to be fixated on "exit strategies" which perpetuate
| those two problems.
| Spivak wrote:
| Because founders and early stock-holding employees want
| to get paid out, move on to something else, and let
| someone else handle the long-tail maintenance of the
| business. This is valuable work in the economy because
| you want people who are good at starting businesses,
| proving markets, getting investors, yada yada to be doing
| that and people who are good at running businesses to do
| that once it has roots.
|
| The intractable problem is that corporations with loads
| of capital are the ones equipped to run businesses long-
| term. I would love a world where an exit is turning the
| business over to the employees and a newly hired CEO in
| exchange for a payout from the business itself but
| massive corporations will pay more, have cash on hand,
| and won't default.
| XMPPwocky wrote:
| "This is valuable work in the economy because you want
| [...trimmed...] people who are good at running businesses
| to do that once it has roots."
|
| In my experience, things tend to get dramatically worse
| for users when a business is acquired or sold, not
| better. Long-term sustainability also seems to be
| significantly _decreased_ by acquisitions, not increased-
| even when the business isn 't closed outright (e.g.
| Pebble). And, from your second paragraph, it seems like
| you recognize this too. So, yeah, you might want people
| who are good at running businesses to do that - but
| selling a business does not seem to put people who are
| good at running businesses in charge of it. If anything,
| it's the opposite.
| viro wrote:
| This is how the entire VC market works either get bought or
| IPO.
| londons_explore wrote:
| Option 3 is to become very profitable and give big
| dividends back to those VC's... Few take that route
| though...
| danudey wrote:
| Option 3 is to become very profitable and then have
| Facebook create its own competitor and integrate it into
| their own apps, killing your business overnight.
| swiftcoder wrote:
| I think you'll find that VCs aren't in it for dividends.
| If they were content with 10% per annum they'd play the
| S&P 500...
|
| You can certainly build a long-term profitable business,
| but you wont find VC funding for that.
| londons_explore wrote:
| But some businesses that take VC funding _could_ pay out
| 1000% dividends every year, especially businesses that
| don 't take much initial funding and manage to become a
| monopoly in some small niche market and decide not to
| expand further.
| jensensbutton wrote:
| Because that's not what VCs want.
| asdfman123 wrote:
| Yeah, now that you say it it does seem to be very close to
| "plata o plomo."
|
| (Translating as literally "silver or lead": take this money
| or take a bullet)
| dheera wrote:
| Well good. Now get rid of GIF and make it H.264y. There is
| literally zero reason to use GIF anymore in 2021.
| colejohnson66 wrote:
| Giphy wasn't even GIF based. They were WEBP(?). The name
| comes from public perception: a short animated clip is a
| "gif", not a "two second video file with no audio track".
|
| "Gif" as a word has been redefined to mean more than the file
| format.
| pawelk wrote:
| GIF is just a concept here, but if you upload an animated
| .gif to just about any large image sharing platform, they
| will convert it to a video format and serve in a <video>
| element to save on bandwidth. I'm not sure who was the first
| to do this, perhaps imgur with their invention of ".gifv" url
| suffix? [1] However right-click -> save image as... on "gifs"
| ceased to be an option long ago.
|
| [1] https://blog.imgur.com/2014/10/09/introducing-gifv/
| ludamad wrote:
| You can also sell them to the public. The real crux is that
| Facebook was the highest bidder, so it does lower potential
| valuations not being able to be purchased. All well in my
| books. I'm still salty about Red Hat optimizing the short term
| and becoming an IBM arm
| ldehaan wrote:
| That's a moronic HN type of idea, most people build businesses
| to help the people around them, this crowd does it, lies,
| cheats and steals to con people into working with them and then
| turn around and stab every employee in the back so they can get
| rich... it's weird to see a comment dissing the very existence
| of HN at the top, guess the mods haven't gotten here yet.
| mbg721 wrote:
| I thought people built businesses because they had to eat,
| and selling something useful was an effective and morally
| acceptable way to obtain food-money. Sure, most people aren't
| sociopaths, but businesses don't exist primarily out of
| philanthropy.
| BurningFrog wrote:
| This feels like a wilful misunderstanding.
|
| FB doesn't claim selling the company is the _only_ reason to
| start one.
|
| But it _is_ a top 3 "exit strategy" for startups, so limiting
| it would have a chilling effect on startup formation. How _big_
| that effect would be is probably a better avenue for counter
| arguments.
| kranke155 wrote:
| Of course it is a blatant lie just like almost everything
| they say now.
|
| Giphy is free to sell itself to almost any other company on
| Earth except FB. This has no chilling effect whatsoever
| jensensbutton wrote:
| Name another company that wants to buy it.
| sophacles wrote:
| Good point, it's almost as if allowing large monopolists
| to have their way has a chilling effect on people wanting
| to compete with them.
| kranke155 wrote:
| It's not the regulator's job to find other buyers for
| Gyphy. There's a million companies who could buy it,
| doesn't mean they will. But the goal here from FB is
| clearly to monopolise data aggregation, which regulators
| rightly have to stop.
| amyjess wrote:
| > limiting it would have a chilling effect on startup
| formation
|
| I'm okay with that. Startup culture is toxic, and the world
| would be a much better place if the only legal reason to
| found a business would be to make a steady profit selling
| your product. If your company only exists so you can sell it
| (as in the company as a whole) to someone else, your company
| shouldn't exist.
| djbusby wrote:
| Where is the limit though? There are literally 1000s of other
| places to sell the company. It's only blocking one HUGE
| company from this one deal.
| jonas21 wrote:
| Do you have a few examples of those other places?
|
| I'd imagine that anyone interested in buying Giphy would
| fall into one of two categories:
|
| 1. Large tech companies for which the same antitrust
| arguments would apply.
|
| 2. Companies that can't afford to pay anywhere near $400M
| for a GIF sharing service.
| [deleted]
| Apocryphon wrote:
| Imgur? Reddit?
| fuzzer37 wrote:
| > Imgur? Reddit?
|
| Both of which fall under arguments 1 and 2
| legostormtroopr wrote:
| > Companies that can't afford to pay anywhere near $400M
| for a GIF sharing service
|
| What makes a free GIF sharing service worth $400M dollars
| - apart from the data harvesting Facebook can do to
| better target users with ads.
|
| We don't need to outlaw these sales, just outlaw the
| integration of data from purchased services, and then
| you'll see what the true value of the company is.
| rchaud wrote:
| > This overlooks the traditional and perhaps now unpopular
| reason to start a company: making money by selling something
| useful.
|
| Was Giphy even set up to be a business? It's just a database of
| gifs converted to video, for use in social media posts or Slack
| channels. Who would ever pay for that, besides a social media
| behemoth?
| detaro wrote:
| They had some advertising thing, and getting paid by social
| media behemoths for integrations is what now gets them into
| trouble in a way?
| Nextgrid wrote:
| It's been set up to collect personal data and either build an
| advertising network (unsure how successful it would be) or
| sell to a highest bidder.
|
| If this failed acquisition discourages future
| advertising/data collection companies it will be a major win
| for society.
| caturopath wrote:
| This is a catchy take, but a silly one. The quote didn't say
| that the only purpose of a new company is to get acquired, it
| just said that it's chilling to have one option less available,
| which isn't wrong.
| libertine wrote:
| We're deprived from options on a daily basis thanks to these
| monopolies, so I guess we can live well with one less option.
| caturopath wrote:
| That viewpoint makes sense, but I don't think really works
| against what I was saying. It seems like the OP was saying
| "this cost is fake/gross" and you're saying "this cost is
| worth paying".
| JumpCrisscross wrote:
| It also screams their weakness: Facebook and its employees are
| so universally reviled that it's politically tenable, perhaps
| even popular, to do things with them that one couldn't with
| others.
|
| Ordinarily, a British regulator telling two American firms what
| they can and can't do would create backlash from the U.S. In
| this case, that would be shocking.
| [deleted]
| mrkramer wrote:
| But sometimes you need to sell your company because simply you
| do not have enough resources to fulfill your mission and
| vision.
| thesuitonym wrote:
| Traditionally we would call that a failed business.
| chrisseaton wrote:
| If the business has a value more than you put into it then
| you haven't failed.
| mrkramer wrote:
| Instagram and YouTube were failed businesses? They sold to
| big companies in order to scale to billions of users and
| millions of SMBs because they didn't have knowledge nor
| human and financial resources for such task.
| TheRealDunkirk wrote:
| Maybe if they hadn't scaled to, oh, I don't know, THE
| ENTIRE PLANET, maybe some MORE companies could come in
| and build successful businesses in the space, and, hey,
| maybe even figure out how to federate and interoperate. I
| know, I know. Crazy talk.
| JumpCrisscross wrote:
| > _maybe some MORE companies could come in and build
| successful businesses in the space_
|
| This rejects that these businesses required scale to be
| successful, strengthening the claim that they were not
| "failed businesses."
| thesuitonym wrote:
| They only need scale if you accept the premise that they
| need to be the only provider in that space.
| klelatti wrote:
| Did Google and FB have to sell to stake to billions of
| users and millions of SMBs? no!
| hotpotamus wrote:
| I wonder about youtube - I see people say it still loses
| money though I don't know if that's true, but if it is,
| then is it a successful business? It's an amazing feat no
| doubt, but other than that I don't know what to make of
| it as a business or a force in the world.
| dfadsadsf wrote:
| Youtube is printing money right now as traffic/computers
| are cheap which was not the case 10 years ago. It's a
| very successful (multi $B profit) business right now.
| They reinvest some profits into original content but it's
| probably peanuts compared to overall profits.
| micromacrofoot wrote:
| They didn't have the knowledge or resources to figure out
| that they can't indefinitely burn money and needed to
| sell user data and ads?
| delecti wrote:
| There's no way to know whether they would have failed
| without being acquired. That isn't the point being made
| though.
| Spivak wrote:
| Products that can't be profitable as a standalone business
| but can be as part of a larger company's portfolio isn't
| really a useful definition of failed unless you redefine
| the term.
| Philadelphia wrote:
| If they can't be profitable as standalone businesses, by
| definition they're failing as businesses.
| globular-toast wrote:
| That's what the stock market is for.
| Hamuko wrote:
| Or just funding rounds.
| globular-toast wrote:
| Yes, but the stock market would be better as it would
| allow the public to invest. Funding rounds are just a way
| to let the rich and privileged get even richer.
| oblio wrote:
| No, you're wrong. They're still taking risks.
|
| You see, when you have 1000 million and you invest 500
| million in chunks of 1 million into 500 different
| companies, practically guaranteeing a return of >500
| million [1], then you're taking a huge risk! Almost like
| the Average Joe/Jane investing on the stock market :-)
|
| [1] Since it's supremely unlikely all 500 companies fail,
| and it's much more likely that at least 1 of them comes
| up with a decent return on investment.
| klelatti wrote:
| Meta argued that the regulator was "sending a chilling message
| to start-up entrepreneurs: do not build new companies without a
| viable business model because you will not be able to rely on a
| competition harming sale to a dominant market player for an
| exit."
|
| More realistic interpretation.
| viro wrote:
| You understand that the goal of most VC-funded businesses is
| to get bought, right?
| amyjess wrote:
| I think we should consider outlawing "most VC-funded
| businesses" then. The sole reason anyone should ever start
| a business should be to make long-term sustainable profit,
| and anything else should be illegal.
| mbg721 wrote:
| That is great in principle, but sounds very difficult to
| enforce.
| Nextgrid wrote:
| But do you understand that being in business is not a right
| and that if your business relies on harming consumers to
| make a profit then maybe it shouldn't exist?
| klelatti wrote:
| > "a competition harming sale to a dominant market player"
|
| Fine except for those that rely on this.
| viro wrote:
| what constitutes a market? Giphy hadn't generated any
| revenue it was operating off the $20 million of VC money.
| Or are you just trying to say big American tech companies
| shouldn't be allowed to buy companies?
| matheusmoreira wrote:
| > Or are you just trying to say big American tech
| companies shouldn't be allowed to buy companies?
|
| Exactly. Not only should futher consolidation be
| prohibited under anti-trust, big tech should be _forcibly
| broken up_ into several businesses.
| Nextgrid wrote:
| The advertising market. Giphy has plans to make an
| advertising network which would compete with Facebook and
| force the latter to be more competitive (which at least
| _may_ result in better outcomes for end-users of both
| products).
| kevinventullo wrote:
| I'm pretty sure Facebook is more worried about
| competition from Snapchat than Giphy. Which is to say,
| not at all.
| adamsb6 wrote:
| There are many problems in the world that only a handful of
| companies have. You could make money joining those companies
| and helping them solve the problem as an employee. You could
| potentially make much more money by creating a company that
| solves that problem and then selling it to one of those bigger
| companies.
| [deleted]
| gwelson wrote:
| Agreed. I also think that once you grow beyond one employee
| (yourself) as a founder, you acquire a deep moral and ethical
| (although not legal) responsibility to the wellbeing of your
| employees. The very notion/term "exit" has always made my skin
| crawl, at least in the context of "serial entrepreneurs".
|
| Treating a company - a thing that often dozens, hundreds, or
| even thousands of people depend on for their livelihoods - as
| nothing more than an assert that can be bought and sold at the
| whims of a founder is fundamentally gross to me. Sure, not
| every acquisition leads to layoffs, but many (most?) do and I
| think that's abhorrent.
|
| I know it's how the world works, but I don't think the culture
| of starting a company to get acquired for a nice "exit" should
| be celebrated and I think policy measures that can stop or
| diminish this culture are fundamentally good.
| adamsb6 wrote:
| When I've joined startups in the past they've been up front
| about their exit strategies during interviews.
|
| Everyone knows that they're making a risky bet that might end
| with the company folding or might result in a big windfall.
| nunez wrote:
| Yeah but those employees benefit from exits as well
| reaperducer wrote:
| _Some_ of the employees _may_ benefit from exits
| _sometimes._
|
| There is no shortage of exits that screwed the employees.
| tick_tock_tick wrote:
| > as a founder, you acquire a deep moral and ethical ...
| responsibility to the wellbeing of your employees
|
| No, everyone knows what they are getting into this is a
| horrible concept and should be pushed back against at every
| turn. If you want someone to be responsible for another adult
| petition the government to do it.
| [deleted]
| Angostura wrote:
| If the regulator habitually stopped sales, I think Facebook
| would have a point.
|
| But I think the regulator makes a good case for why there are
| very specific factors that suggest that this _particular_
| takeover is not a hood idea.
|
| Full statement here: https://www.gov.uk/government/news/cma-
| directs-facebook-to-s...
| dzonga wrote:
| something that is missing is a bunch of VC companies these days
| are built to be sold. they don't have to have sustainable
| business meant for the long run.
|
| here's PG > Our startup, Viaweb, was built to be sold. We were
| open with investors about that from the start. And we were
| careful to create something that could slot easily into a
| larger company. That is the pattern for the future. -
| http://paulgraham.com/bubble.html
|
| and given YC is the arguably the largest and most influential
| accelerator - hence why most startups are build to sell to
| FAANG
| Hamuko wrote:
| It's not even correct because you'll still be able to sell
| companies, just not to form monopolies.
| lordnacho wrote:
| Indeed, you have to wonder if the world might be a better place
| if mergers were just not allowed. There's a famous Adam Smith
| quote about people in the same business coming together to
| screw the consumer. Mergers are perhaps the ultimate collusion.
|
| For instance, what if the default position was that mergers
| were banned, except where you could convincingly show that
| everyone is better off? For instance in dying industries where
| scale is necessary.
| politician wrote:
| Cartels would still exist.
| thehappypm wrote:
| This is kind of a dumb take.. mergers are often done to
| enable efficiency. A jet engine company might suck at
| marketing.
| Apocryphon wrote:
| That's why ad agencies exist.
| Animats wrote:
| The EU had a study that indicated that you need at least four
| competitors before price competition appears. Two or three
| act like a monopoly, almost automatically. The free market
| thing requires multiple players to work. So mergers that
| bring the number of competitors below four should be
| prohibited.
|
| The US is down to three big banks, three mobile phone
| companies, and three drugstore chains, and they don't compete
| on price much. If an industry gets below four, maybe the
| companies should be given the choice of breaking up or
| converting to a common carrier or regulated public utility.
| woah wrote:
| What does this even mean? No business is allowed to buy
| another business? This would force economic activity to be
| centered around wealthy individuals (even more than it
| already is).
|
| People feel that wealthy individuals having majority control
| over big businesses is a bad thing (Bezos, Zuckerberg, etc),
| but your proposal would enshrine this in law.
|
| For example think about the case of Steel, inc. vs John
| Smith. Steel, inc. is a corporation with a broad set of
| owners (hell, let's make it employee owned). It makes steel.
| John Smith is a rich guy who has bought controlling interests
| in a number of privately held businesses which are all in the
| steel industry.
|
| John Smith will easily be able to outcompete Steel, inc.
| Steel, inc. is encumbered by your law, while John Smith is
| not. If John Smith's empire needs an ore mine, he can just
| buy it. If Steel, inc. needs an ore mine, the only thing they
| can do is find a new ore deposit, and buy all the machinery
| needed on the open market.
|
| Your law mandates that all business be controlled by rich
| individuals instead of groups of shareholders.
| kedean wrote:
| It doesn't seem like much of a stretch to also stop
| allowing an individual to buy up multiple businesses like
| that. Starting lots of businesses is one thing, buying them
| up like Pokemon provides very little value to the world.
|
| John Smith could still buy up controlling shares in various
| companies, but it's also not a big stretch to regulate that
| sort of thing too. I don't really buy the idea that we need
| huge corporations to protect us from the rich.
| jeroenhd wrote:
| I think a world without mergers would cause a lot of trouble
| for companies nearing bankruptcy and especially their
| workforce. When a company is about to fall over because if
| cashflow issues, another can come in with its reserves and
| save hundreds or thousands of jobs. That's good for everyone.
|
| I'd argue for a world with only limited possibilities for
| mergers, where mergers are a last resort rather than the goal
| of a startup. So many companies these days produce absolutely
| nothing of value in the hopes of being bought out by a big
| conglomerate.
| lotsofpulp wrote:
| A lot of money (including taxpayer money) would be spent on
| lawyers and courts figuring out how to "convincingly show
| that everyone is better off".
| hallway_monitor wrote:
| A lot of money is spent on useless things. This would be
| completely worth doing and may be the change in corporate
| law that we need.
| abduhl wrote:
| Probably less in aggregate than is currently spent on
| lawyers figuring out how to structure these deals.
| ethbr0 wrote:
| It's an interesting point, and ultimately kind of boils down
| to "Is a more profitable company good for consumers?"
|
| To which the answer seems inarguably "Sometimes." Scale that
| reduces production costs (and therefore prices), yes. Or
| prices could be maintained and the increased profits given to
| shareholders, in which case no.
|
| I think the broader question is "What systemic features exist
| that make giant companies more efficient than a network of
| smaller, independent companies?"
|
| And to _that_ , I'd argue that in the 21st century, not many.
| The market and communication B2B inefficiencies that drove
| conglomeration in the 20th century have most been reduced to
| zero.
|
| The only reason to have a hyperscale company these days is to
| deploy capital at scale in loss-making enterprises in hopes
| of capturing market share... and I'm not sure that's
| something that's been healthy in aggregate?
| rlpb wrote:
| > And to that, I'd argue that in the 21st century, not
| many. The market and communication B2B inefficiencies that
| drove conglomeration in the 20th century have most been
| reduced to zero.
|
| There's still the efficiencies of mass production for
| physical goods. For digital services that include any
| element of social network, there's the network effect. I
| think these are still a significant factor in most markets
| today. For match-making services in particular, brand
| recognition is important; otherwise users have difficulty
| in _finding_ quality from a directory of smaller,
| independent companies. And arranging effective federation,
| while possible, is expensive and development of such
| systems is slow.
| ethbr0 wrote:
| True. But I imagine what would evolve would be a few B2C
| "face" brands, backed by a web of unmentioned B2B
| companies that customers never directly interact with.
|
| Which is essentially the dynamic now, except the B2C last
| mile companies can parlay their relationship and just buy
| everything high value upstream of them.
|
| Which... I'm not sure is great for competition.
|
| Anything that moved the market away from one in which all
| customers are "an Apple customer" or "a Google customer"
| or "a Facebook customer", with those companies
| unconstrained in their ability to leverage that, seems
| better.
| BurningFrog wrote:
| A major reason to group companies together in a
| "hyperscale" company is to influence government regulation,
| which is where you can access _real_ money and power.
| lvs wrote:
| > making money by selling something useful.
|
| This one weird trick venture capitalists hate!
| sam0x17 wrote:
| As an entrepreneur this gives me absolutely zero pause. I don't
| care if the fed splits up the thing that acquires me once I get
| acquired. I just want to get acquired. It's on meta to decide
| if they are flying too close to the sun.
| jonplackett wrote:
| How is it the UK reg has the power to do this? I thought Giphy
| was a US company.
|
| Shame they didn't have the balls to stop ARM getting bought
| originally too.
| M2Ys4U wrote:
| > How is it the UK reg has the power to do this? I thought
| Giphy was a US company.
|
| Because both Facebook and Giphy are active in the UK market.
|
| If they don't want to be subject to UK regulation then
| they're free to stop doing business in the UK.
| gorgoiler wrote:
| It seems odd for the CMA to order a sell off when Facebook and
| Giphy are both US companies.
|
| Wouldn't it make more sense to require Giphy UK to cease trading,
| and force Facebook UK to compete on its own? UK authorities
| policing UK companies and all.
|
| (Please don't respond to this as a hot take on globalisation --
| my comment is a serious question about how the UK competition
| authority can be most effective, not a wide eyed lamentation on
| why we can't have world peace etc.)
| avianlyric wrote:
| Facebook is free to stop operating in the UK if it wants. If
| wants to continue operating in the UK, and retain ownership of
| Giphy, then any UK based assets they have (such as revenue from
| UK business) will probably end up being forfeited via fines
| from the regulator.
| gorgoiler wrote:
| Cmon. They have a huge engineering office there bringing in
| massive amounts of tax revenue already. UkGov doesn't want to
| chase off 1000x employees bringing in PS100M of income tax
| revenue. FB's VAT on ad sales in the UK is probably only
| PS500m.
| joshuaissac wrote:
| > FB's VAT on ad sales in the UK is probably only PS500m.
|
| It is probably closer to PS0. VAT is only chargeable on
| non-business ad sales. Where a Facebook does pay VAT for a
| sale to a business, that cost is passed on to the buyer,
| which can claim it back from HMRC. The exception being very
| small businesses that are below the VAT registration
| threshold.
| funshed wrote:
| Facebook paid just PS28.5m in UK corporation tax in 2018,
| despite record PS1bn in UK Sales.
| gorgoiler wrote:
| Once again, cmon.
|
| Facebook has a significant and legitimate cost centre in
| Menlo Park, CA.
|
| As in, sure, FBUK sell ads, but the value is backed by a
| 4billion eyeball set of social networks that didn't just
| build themselves.
| dazc wrote:
| Remedies proposed by Facebook, such as a promise to keep the
| service open to rivals, were not sufficient to address the
| competition concerns, the regulator added.
|
| https://www.telegraph.co.uk/business/2021/11/30/facebook-ord...
|
| They would break a promise - surely not?
| chippiewill wrote:
| > They would break a promise - surely not?
|
| I think the CMA stopped listening to promises from US companies
| after Kraft completely reneged on their takeover of Cadburys.
| Hamuko wrote:
| > _They would break a promise - surely not?_
|
| What, again?
| callamdelaney wrote:
| Oh, it means facebook.
| boh wrote:
| It's just open season on Meta and big tech in general. Giphy
| isn't exactly an ad powerhouse nor a real competitor to Meta, but
| any acquisitions are now opportunities for political theater.
| YXNjaGVyZWdlbgo wrote:
| Giphy is and was always just a metadata aggregator with the
| side effect of hosting funny little copyright infringing
| videos.
| dylan604 wrote:
| They are not infringing copyright. They definitely qualify
| for use under several parts of the copyright law.
| llacb47 wrote:
| You mean fair use, and not necessarily. Also "fair use" is
| not a law in the U.K.
| dylan604 wrote:
| Works used for satirical work are allowed. Seems like
| what these are being used for.
| detaro wrote:
| _Parody_ is fair use. Satire usually isn 't.
|
| And I'd doubt most use of e.g. posting gifs on social
| media in response to something counts as "satire".
| Doctor_Fegg wrote:
| And as the ancestor comment pointed out, there's no such
| thing as "fair use" in the UK. There is a very distinct
| concept of "fair dealing".
| detaro wrote:
| True, on quick search the UK indeed doesn't make that
| distinction as obviously, thanks for the correction. So
| only the second part of my comment applies.
| thesuitonym wrote:
| True, but perhaps big tech shouldn't be so big. If Facebook's
| mergers had been under this much scrutiny in the past, the web
| would probably be a better place today.
|
| It's too little too late, but it's not exactly a witch hunt.
| Teandw wrote:
| You don't understand how valuable data is to companies like
| Meta etc.
|
| Things like Giphy are amazing data builders. Think of all the
| cookies that get placed around the web for FB to use, when a
| giphy is embeded on a website.
|
| Even the types of Giphy's people use, are useful data points.
| judge2020 wrote:
| curl -v
| https://media.giphy.com/media/bKgCINrtZWQ39wZCxU/giphy-
| downsized-large.gif 2>&1 | grep set-cookie | wc -l 0
| hansel_der wrote:
| sure, but this does not prove anything.
|
| besides who would want to give a cookie to curl UA?
| mdoms wrote:
| Now try loading it in a browser like everyone else. You
| will find cookies for giphy.com and cookies.giphy.com.
| Please stop spreading misinformation.
| throwthere wrote:
| s/cookie/ip data and referrer tracking/.
| pawelk wrote:
| I opened this URL in my browser, and I was offered a
| `didomi_token` cookie that assigned me a user_id of
| 17d72dbe-d667-610e-ba58-323f0a33f7b1. When viewed in a
| browser as opposed to cURL it's actually a HTML page
| containing, among other things, the actual gif image hosted
| at https://i.giphy.com/media/bKgCINrtZWQ39wZCxU/giphy-
| downsized... (this one comes without cookies).
| tyingq wrote:
| curl -s https://cookies.giphy.com/global-
| cookies.f54c0b98fd75c8afe8abb8e12bf0d8a9297f480a.html |less
| manojlds wrote:
| User agents aren't a thing?
| JumpCrisscross wrote:
| > _open season on Meta and big tech in general_
|
| On Facebook, not big tech in general. Tech is still immensely
| powerful, popular and politically supported. Facebook is not.
| a-dub wrote:
| good to see that post-brexit britain is remaining just as
| relevant as ever...
| akamhy wrote:
| Okay, I'm dumb. But can anyone please explain how the UK has any
| right to stop an American Company(Meta) from acquiring another
| American Company(Giphy)? If the UK can, can Germany, India, or
| even China and Russia do something similar?
| that_guy_iain wrote:
| They can remove their access to the country. The EU has been
| doing the same for quite a while.
|
| Also, Facebook UK is a thing.
| sircastor wrote:
| The UK could arbitrarily block Facebooks IPs, I guess. I
| imagine this would end up like the carriage fee battles
| between networks and cable operators, with Facebook and the
| UK running ad campaigns about who is in the right here. I
| think UK citizens would bed more annoyed at the government
| than at FB.
| Vespasian wrote:
| More likely is that they would ban British companies (or
| companies operating in Britain) from publishing ads on
| Facebook and doing business with them (including local data
| center operators and ISPs, Google and Apple as app store
| operators).
|
| It's all about economic power. The UK has to think about
| potential retaliation by the US.
|
| In the end,Trade wars are often bad for everyone. Usually
| it's beneficial to find a compromise if possible.
| Teandw wrote:
| You don't have economic power when you're breaking the
| law. (Generally)
| sircastor wrote:
| I don't follow this. All kinds of economic power exists
| outside of legal boundaries, on large and small scales.
| Everything from street prices for drugs to bribery
| demands at government levels.
|
| Even laws designed curb market abuse through fines can be
| considered a cost of doing business rather than a
| disincentive, making it an economic tool for the
| perpetrators.
| Teandw wrote:
| I refer to this specific situation.
| Apocryphon wrote:
| Maybe they could just ban Giphy while it's still Meta-
| owned?
| JumpCrisscross wrote:
| > _UK could arbitrarily block Facebooks IPs, I guess_
|
| If Facebook defied a British order like that, the U.K.
| could enforce quite a lot through American courts.
| Denvercoder9 wrote:
| Both Meta and Giphy operate in the UK market, and the UK can
| set conditions for operating in that market. The EU, India,
| China and Russia can do the same.
| worker767424 wrote:
| What would happen if they just disabled Giphy in the UK?
| aigo wrote:
| Any company has to follow the law where they operate. Being an
| American-headquartered company doesn't really mean anything in
| this context.
| frockington1 wrote:
| They could probably get the American government to flex if
| needed. 'Drop these demands or no Aston Martin will be sold
| in the US'. The problem with both companies being American is
| that the American government can retaliate with popular
| support, the ads write themselves
| joshuaissac wrote:
| It depends on how far either side is willing to go. The UK
| is one of the few countries with which the US has an annual
| trade surplus ($21.8bn),[1] which is worth a lot more each
| year than Giphy's purchase price or even Facebook's UK
| revenue, so there is a lot of room for retaliation.
|
| Traditional British media will drum up support for anti-
| Facebook actions, and the current UK government was elected
| on a mandate of defending perceived British sovereignty,
| with economic considerations being less important.[2] The
| UK government has already engaged in actions that harm its
| economic interests to safeguard its sovereignty.[3]
|
| 1. https://ustr.gov/countries-regions/europe-middle-
| east/europe...
|
| 2. https://ukandeu.ac.uk/new-polling-reveals-shift-from-
| immigra...
|
| 3. https://www.cer.eu/insights/ten-reflections-sovereignty-
| firs...
| JetSetWilly wrote:
| Meta is free to entirely pull out of the UK market if it wants
| to ignore the ruling. Any country is free to say "if you want
| to operate here, you must do X" but how onerous X can be before
| the company concerned pulls out, will depend on the market
| importance of that country. I doubt that Meta would obey an
| equivalent order by Liechtenstein.
| miracle2k wrote:
| Certainly any country can claim for itself all manner of
| powers, which sometimes will run up against limits of
| enforcement capability. The OPs question only makes sense if
| understood in a normative sense: even if they can, what gives
| them the right? or, is it a good idea?
|
| We can assume for certain, I think, that UK regulators
| operate within a set of rules, and in many cases they will
| not have the power to interfere with an acquisition between
| two foreign businesses - for good reason. Regulators in other
| countries may not have the power to stop this particular deal
| in the first place.
|
| Maybe the powers of UK regulators need to be further
| restricted.
| Barrin92 wrote:
| >what gives them the right?
|
| The sovereignty of the United Kingdom over its own
| territory and incorporated businesses, through laws created
| by the British parliament which derives its power from the
| British people, very straightforward.
|
| And if you think the British people are more sympathetic to
| Facebook than the British regulators you have another
| surprise coming
|
| Whether a business is foreign or not is irrelevant as far
| as its operations in the UK is concerned. Do you think
| Chinese owned businesses in the US don't have to comply
| with American law on American soil?
| zo1 wrote:
| You can basically ask that same question of everything that
| government does.
| Kbelicius wrote:
| I think you aren't understanding this at all. UK regulators
| aren't stopping anything, the merger already happened. UK
| regulators are simply saying that if Facebook wants to
| continue its operations within the borders of UK they need
| to sell Giphy. They were given this right by the
| democratically elected government of UK. Regulators in
| every other country have the same power, dictate conditions
| on which one participates in their markets.
| miracle2k wrote:
| I am merely saying that the UK electorate has the
| responsibility to limit the power of its regulators
| (unless you are of the believe that their power should be
| unlimited).
|
| The interesting discussion to be had here is about what
| good policy is, not to say "A country can make whatever
| laws it likes". Well duh.
|
| We all have an interest in a functional global system. To
| that end, it is beneficial of countries at times defer to
| the laws of other nations
| (https://en.wikipedia.org/wiki/Comity). Maybe this is
| such a case. Possibly we would prefer not to have other
| countries try to interfere with mergers happening without
| our own jurisdiction too often.
| detcader wrote:
| Two countries having different laws says nothing inherent
| about the need to "limit" the power of one to enforce a
| specific set of laws within their borders, unless We
| assume the U.S. is inherently Exceptional compared to
| other countries, and so if another country has some weird
| hang-up that threatens Our Economy, it is quite
| concerning and really the citizens need to rise up
| against their leaders' tyranny and ensure U.S. Law is
| truly global before one of Our Corporations loses some
| Money.
| ben_w wrote:
| Although I agree with you, about 5 years ago the British
| electorate decided they wanted their own government to
| set all regulations within the country without having to
| listen to what foreign courts -- specifically the courts
| of a friendly region with a much larger GDP than itself
| -- had to say, so I doubt the UK electorate would act in
| a way you consider responsible.
| whimsicalism wrote:
| It seems like a perfectly reasonable power to me, i
| certainly would not vote against regulators being able to
| do so if I were a UK citizen.
|
| As an American citizen, would you want to restrict
| regulators from being able to block the business of a
| company that merged with a CCP controlled company in
| China?
| miracle2k wrote:
| > As an American citizen, would you want to restrict
| regulators from being able to block the business of a
| company that merged with a CCP controlled company in
| China?
|
| On what grounds would that business be blocked?
|
| On grounds having being state controlled? I'm not sure US
| regulators do have that power. On some pretend grounds,
| to be able to wield it as a geopolitical weapon? Probably
| not.
|
| On some narrow national security reasons? Maybe.
| oblio wrote:
| Are you for real? Do you know that Cuba's being embargoed
| because Cuban Americans in Florida are an important
| political group?
|
| How much more geopolitical do you have to get? You've
| been trying to starve an entire country for more than
| half a century because a bunch of your citizens are
| pissed off they got kicked out of there 30+ years ago and
| your politicians need them to win vital nation-wide
| elections.
|
| Yes, I know about all the Cuban abuses and all that other
| garbage, but that doesn't make it right because the US is
| allied to <<soooo>> many other human rights violating
| countries and it doesn't even bat an eye.
| whimsicalism wrote:
| Have US regulators not blocked multiple such businesses
| already?
| JumpCrisscross wrote:
| > _On what grounds would that business be blocked?_
|
| Any grounds pertinent to American interests, frankly.
| zzzeek wrote:
| > On grounds having being state controlled? I'm not sure
| US regulators do have that power. On some pretend
| grounds, to be able to wield it as a geopolitical weapon?
| Probably not.
|
| overall, the Commerce Clause in article I of the US
| constitution grants the federal government power to
| regulate commerce with foreign nations, which includes
| import / export restrictions. For example you can't
| really buy things from Iran or Cuba without major
| restrictions if at all.
|
| if a trade embargo doesn't fall under the realm of
| "geopolitical weapon" I don't know what does.
| alainv wrote:
| The assertion that other countries should simply abandon
| their sovereign regulators' powers is baseless hubris.
| The fact that the US seems happy to allow corporate
| titans to reach ever new sizes does not mean anyone else
| is on board.
|
| If the US wants their regulators' decisions to carry
| weight in another country, they can pay for the privilege
| via trade agreements, same as it ever was.
| Latty wrote:
| When the US government finds its responsibility to limit
| the power of its companies (unless you are of the belief
| that their power should be unlimited), come back to me on
| that.
|
| Companies are a tool that should serve the public, if
| they cease to serve the public, they should be bought in
| line, destroyed, or (as is threatened in this case)
| exiled. A democracy is meant to be for the people, not
| for profit. Profit is just a motive to try and
| incentivise things that are valuable for society, when
| that isn't achieved, regulators should step in to fix it.
|
| Companies that are too large have too much money, and too
| much power. They are inherently anti-consumer and cause
| harm to the very fabric of democracy. In any sane world,
| we would be breaking up a huge number of these large
| corporations into _much_ smaller pieces.
|
| The electorate has a responsibility to protect democracy
| and not let companies break the law of the land, they
| have no responsibility at all to companies.
| [deleted]
| gtirloni wrote:
| They have a legal presence in the UK (a subsidiary of the
| Facebook HQ) and probably want to merge those two UK companies
| as well.
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