[HN Gopher] Mergers ruin everything
___________________________________________________________________
Mergers ruin everything
Author : pseudolus
Score : 160 points
Date : 2022-02-04 14:10 UTC (8 hours ago)
(HTM) web link (mattstoller.substack.com)
(TXT) w3m dump (mattstoller.substack.com)
| Osiris wrote:
| In an unregulated capitalist economy, the inevitable end result
| is monopoly. The best way to compete in the economy is to not
| have to compete.
|
| Without external restraints, any sufficiently large company will
| focus on eliminating competition either through pricing them out
| of the market or just outright buying them.
|
| The only reason the US has more than one cellular network right
| now it because the government has prevented multiple attempts at
| mergers, and even with that effort we're down to three.
|
| edit: if you disagree, I'd love to hear your opinion. The
| government has entire agencies dedicated to maintaining
| competition in the economy. If monopoly was not the inevitable
| end result of capitalism, then such agencies would not be
| required.
| arcbyte wrote:
| Actually there are lots of factors impacting horizontal and
| vertical integration in the capitalist economy.
|
| In general you are right that "external" restraints are needed
| to prevent a firm from competing so aggressively or moving to
| integrate horizontally. However, the external restraints are
| far and away most often free market forces.
|
| Economies of scale are nothing to laugh at, especially in
| ventures with very high fixed costs. However, integration is
| also high risk because it comes with significant downsides.
|
| I don't care to analyze the US cellular market, but I would be
| curious to what extent the way the government has regulated
| this market has pushed it toward mergers. And perhaps that is a
| good thing to have a small number of national cell carriers.
| People who grew up in the early telephone era would probably
| agree its better than having to navigate the byzantine maze of
| regional networks and long distance charges.
|
| There are other mostly unregulated wireless markets that might
| serve as interesting case studies though. Wireless ISPs have
| been a booming business for decades and is still extremely
| dispersed in ownership. They're facing some disruption now from
| Starlink but that is likely years away from posing a serious
| industry challenge.
| Osiris wrote:
| > I don't care to analyze the US cellular market, but I would
| be curious to what extent the way the government has
| regulated this market has pushed it toward mergers.
|
| I believe that auctioning spectrum is a huge factor in
| creating monopolies because only the biggest companies get
| spectrum. No small guy can afford to compete in the auction.
| I don't think that auction (to the highest bidder) is the
| best way to allocate spectrum if the goal is to preserve
| competition.
| lcedp wrote:
| You are right, but it's not the full picture.
|
| The government also has agencies dedicated to maintaining
| monopoly. It is done through patents, copyright, trade secret
| laws.
|
| It's important to maintain a balance between completion and
| monopoly. Monopoly allows collecting huge margins that could be
| invested into further research that would not be otherwise be
| feasible financially.
| Jensson wrote:
| > The government also has agencies dedicated to maintaining
| monopoly. It is done through patents, copyright, trade secret
| laws.
|
| Without those laws the big companies would steal and copy
| every small business idea or IP with no impunity. The laws
| protect small companies much more than big companies. Of
| course big companies sits on a lot of patents so they are
| still powerful, but not as powerful as if they could just
| abuse espionage etc as much as they wanted.
|
| For example, what do you think would happen with the harry
| potter books? Others would just print their own copies, write
| their own books with the same characters and names, and the
| company with the biggest marketing budget to throw around
| would win and sell the most. That doesn't seem very good for
| the little guy to me, rather it would make it basically
| impossible for the little guy to compete.
| mLuby wrote:
| (Intellectual property) rights depend on your ability to
| enforce them. Large companies have many resources to throw
| at enforcement while small companies have few and
| individuals even fewer. In the past, patents may have
| worked for the little guy but no longer. I don't know why
| exactly.
|
| On the Harry Potter thing, "the biggest marketing budget
| would win and sell the most" is indeed what happens, but
| the original creator still has huge power. For example if
| George Lucas (who sold the Star Wars IP to Disney) decided
| to publish his "fan fiction" screenplay for Star Wars
| Episode VII, Disney would have a massive continuity problem
| because he's the original creator--no matter how much The
| Mouse spends on marketing. That is what Disney paid him $4B
| for, to _not_ do that.
|
| Further, isn't "people will write new stories for
| characters they love" a good thing? We could certainly use
| fresh ideas rather than this rut of reboots and sequels. In
| that sense, letting The Market winnow the winners from the
| chaff would improve consumer offerings. It's happened
| before: remember that Twilight fan fiction that became a
| literary sensation and major movie series?
| nostrademons wrote:
| "write their own books with the same characters and names"
|
| Clearly you've never encountered the vibrant and
| exceptionally large world of Harry Potter fanfiction.
|
| Anyway, IP laws usually benefit incumbents simply because
| small companies have neither the legal budget nor attention
| to fight a lawsuit. This is a recurring problem in the
| legal system, where the party most likely to win is usually
| the one that can hire the highest-priced lawyers. It's also
| a very hard problem to fix.
|
| I would definitely disagree that the laws protect small
| companies much more than big companies, having both founded
| small companies and worked at big companies. Big companies
| steal and copy every small business idea or IP with
| impunity anyway, because small companies do not have the
| resources to fight their case in court and still survive in
| business. I've never once heard of a startup successfully
| suing a gigantic company over IP rights and later replacing
| that big company off those IP rights; the best they can
| hope for is usually a negotiated settlement and an
| acquisition. Startups that actually want to survive based
| on IP usually do it by keeping it secret and working on
| problems that are not obviously a big market.
| hn_throwaway_99 wrote:
| Peter Thiel: "Competition is for Losers"
|
| https://web.archive.org/web/20141215224757/https://www.wsj.c...
| pdonis wrote:
| Thiel's argument, to the extent it's valid at all, doesn't
| prove that monopolies are good for consumers (or workers, for
| that matter). It only proves that monopolies are good for
| monopolists.
|
| http://blog.peterdonis.com/opinions/monopoly-money.html
| AnthonyMouse wrote:
| > Without external restraints, any sufficiently large company
| will focus on eliminating competition either through pricing
| them out of the market or just outright buying them.
|
| The counterargument is that this only happens in markets with
| high barriers to entry, which in turn are mostly caused by
| regulatory barriers.
|
| For example, the government makes permanent spectrum auctions,
| so if all the holders of spectrum merge together, no new
| competitors can enter. Suppose instead they held a new auction
| every year or every month for use of the spectrum in a given
| region until the next auction. Then mergers wouldn't prevent
| competitors from entering; a new competitor goes to the next
| auction, places a bid and can get spectrum to launch a
| competing provider.
|
| It's clear that this theory is sometimes true -- that
| regulatory barriers can do this. Whether it's _always_ the
| cause is hard to say and depends mostly on how you define what
| "regulatory barriers" means. But consider the consequences
| either way.
|
| If there are regulatory barriers causing monopolies, you have
| to break them up. If there are some other things causing
| monopolies, you have to break them up. Monopolies are bad. And
| breaking them up, if they are caused by regulatory barriers,
| can hamper the entities lobbying to keep the regulatory
| barriers.
|
| The question is what comes after. You don't want them to just
| reform again, right? Antitrust is a necessary evil, but still
| an evil -- still means you had a monopoly for long enough to
| have to bust it up. So if it's mostly or entirely regulatory
| capture which is causing them, we still need to address that.
| And then we don't need antitrust enforcement as often.
|
| But we still need it whenever a monopoly/oligopoly forms.
| That's just not a thing that can remain.
| nostrademons wrote:
| _Many_ barriers to entry are caused by regulation, but not
| all, and perhaps not even most.
|
| Some problems are just hard, and tend to favor incumbents
| with economies of scale. Until very recently (post-GDPR),
| there were no regulatory barriers protecting Search, for
| example; nevertheless, new entrants found it very difficult
| to get traction because _search is a hard problem_. Same goes
| for putting up cell towers, and burying fiber lines, and
| maintaining an electric grid.
|
| I'd also argue that most oligopolies aren't formed by
| technical or government constraints, but rather by branding
| and consumer behavior. Consumers usually have a desire to
| stick with familiar, trusted brands, and to try new brands
| only when they've been recommended by people they trust. This
| creates barriers to new entrants, because you don't start out
| with any baseline trust and you have to compete against
| companies that have been in use for a century. There's
| nothing technically difficult about bottling carbonated
| sugar-water; regardless, Coca-Cola enjoys enormous margins
| because it's ingrained in the habits of hundreds of millions
| of people.
|
| When there's actual regulatory capture, we should address
| that, and untangle the regulations so new firms can enter.
| But don't expect that solving regulatory capture is going to
| fix all instances of monopoly.
| Osiris wrote:
| Microsoft, with massive resources, has been trying to break
| the Google search monopoly for over a decade without making
| a dent.
|
| Search startup DuckDuckGo uses Bing on the backend rather
| than building their own.
| Rury wrote:
| >Monopolies are bad.
|
| Not entirely... there's a tradeoff. People forget that
| monopolies can be a good thing in that it can force a
| standard. For example, if English were said to have a
| monopoly on language, it would become very easy to speak and
| communicate around the world, as it would be the only
| language spoken everywhere. Contrast, if we have 200 versions
| of spoken languages, we'd have communication barriers to
| overcome when we try to communicate with someone foreign.
| AnthonyMouse wrote:
| > For example, if English were said to have a monopoly on
| language, it would become very easy to speak and
| communicate around the world, as it would be the only
| language spoken everywhere. Contrast, if we have 200
| versions of spoken languages, we'd have communication
| barriers to overcome when we try to communicate with
| someone foreign.
|
| You don't need a monopoly to do this because people can be
| bilingual. English is the de facto language of
| international websites on the internet, so people in Spain
| who speak Spanish and English and people in Russia who
| speak Russian and English go to Twitter or Reddit and talk
| to each other in English.
|
| The same is true of internet standards. Everybody uses
| TCP/IP. Everybody. But nobody has a monopoly on it and
| nobody is prohibiting anyone from using a competitor out of
| anything other than network effect. If IPv8 turns out to be
| super amazing and has many advantages that overcome the
| inertia of IPv4, everyone could switch. Which is the thing
| you don't get with a corporate monopoly.
| [deleted]
| Rury wrote:
| >You don't need a monopoly to do this because people can
| be bilingual
|
| True, but it takes more work/effort to learn two
| languages than one. Whereas if we had one language (as in
| a monopoly), it'd be even simpler/easier.
|
| >The same is true of internet standards. Everybody uses
| TCP/IP.
|
| Yes, if protocols were businesses, they then could be
| thought of as having a monopoly on their domains.
| letitbeirie wrote:
| Spectrum is kind of a weird case though because it kind of
| has to be monopolistic - if you allow multiple, independent
| systems to share the same frequency band, none of them will
| work.
|
| > Suppose instead they held a new auction every year or every
| month for use of the spectrum in a given region until the
| next auction.
|
| This would work if the government or some common third party
| were responsible for putting up towers (and lease them to the
| telecoms like MVNOs), but as it is the telecoms build and
| operate the towers themselves, and the hardware loadout
| changes slightly depending on which frequency bands that
| telecom is allowed to use.
| AnthonyMouse wrote:
| > Spectrum is kind of a weird case though because it kind
| of has to be monopolistic - if you allow multiple,
| independent systems to share the same frequency band, none
| of them will work.
|
| In theory you could actually do this by using TDM with real
| time auctions for spectrum access.
|
| But "monopoly" is still the wrong word because you don't
| have to allocate 100% of the spectrum to the same company.
| If there are a hundred and they each have a "monopoly" on a
| specific 1% of it, they're still in competition with each
| other.
|
| > This would work if the government or some common third
| party were responsible for putting up towers (and lease
| them to the telecoms like MVNOs)
|
| So have the third parties do that. "That would work if we
| do that thing that would work" means it would work.
| tablespoon wrote:
| >> Without external restraints, any sufficiently large
| company will focus on eliminating competition either through
| pricing them out of the market or just outright buying them.
|
| > The counterargument is that this only happens in markets
| with high barriers to entry, which in turn are mostly caused
| by regulatory barriers.
|
| Not necessarily. For instance: if the barriers to entry are
| zero but the monopoly can price things below cost (e.g. due
| to cash reserves or strength in other markets), it can bury
| any competitor. The mere existence of that ability could have
| a deterrent effect that prevents competitors from forming in
| the first place.
| AnthonyMouse wrote:
| > For instance: if the barriers to entry are zero but the
| monopoly can price things below cost (e.g. due to cash
| reserves or strength in other markets), it can bury any
| competitor. The mere existence of that ability could have a
| deterrent effect that prevents competitors from forming in
| the first place.
|
| If barriers to entry are zero, the deterrent doesn't exist,
| because the deterrent works by forcing the competitor to
| pay the cost of entry without ever making any profits to
| recover it.
|
| Now suppose barriers to entry are low. Not even zero -- say
| it's $10,000. Some individual shows up, pays the $10,000,
| and the monopoly slashes prices so they can never recover
| their $10,000. But they got into it because they're a
| stubborn former customer who doesn't like how they've been
| treated, so making billions of dollars isn't the point.
| Their goal is to screw the monopolist. Which means all they
| have to do is sit on the ability to make product
| indefinitely and use it as soon as the monopolist attempts
| to raise prices above cost.
|
| To prevent this the monopolist would have to sell below
| cost indefinitely. But in that case the potential
| competition is keeping them in check as much as actual
| competition would.
|
| And this works even better when disgruntled former
| customers get together, so that it's not one guy willing to
| pay $10,000 to spite the monopolist but 10,000 customers
| each willing to pay $1.
|
| Where this falls down is when the price of entry becomes
| billions and involves a major risk of failure.
| lovich wrote:
| I mean, I'm pretty sure it fails down when the theory
| relies on people willing to burn capital solely to stick
| it to someone else. That's less like innovation and
| investment and more like warfare.
|
| It also runs counter to all observed behavior. A lot of
| these regulatory barriers can be overcome by money and we
| don't see disgruntled people/groups banding together to
| provide services or goods at a loss
| dwohnitmok wrote:
| > Which means all they have to do is sit on the ability
| to make product indefinitely and use it as soon as the
| monopolist attempts to raise prices above cost.
|
| You're underestimating the economic tools at the disposal
| of large companies. Lucrative contracts with suppliers
| that prevent selling to competitors, vertical integration
| where they just buy the suppliers outright, attack
| advertising, poaching employees, etc. A lot of these can
| happen even without active malice.
|
| Selling below cost is just one of many tools. There are
| many many ways an economically powerful player can
| strongarm competitors into submission.
|
| None of these are foolproof (and nothing in politics or
| economics is), but they all make the barrier to entry
| higher, sometimes almost impossibly high even in the
| absence of regulation (that is to say thinking of barrier
| to entry as something that is independent of a monopoly
| is not a good model, monopolies are intrinsically a
| barrier to entry).
| agentdrtran wrote:
| > The counterargument is that this only happens in markets
| with high barriers to entry, which in turn are mostly caused
| by regulatory barriers.
|
| There are hundreds of entire industries that have gigantic
| barriers to entry no matter what the regulations are.
| Covering the country in cell towers, building fleets of
| container ships, designing an operating systems and full
| suite of applications -- these things aren't cheap
| AnthonyMouse wrote:
| That's only because you're defining the market as "has an
| entire fleet of container ships," which is just assuming
| the existence of a consolidated industry.
|
| Each container ship could be its own entity and then you
| just need marketplaces for people to hire them to ship
| things.
|
| You don't have to build a national cellular network, you
| can put up one tower and then sell service to a market of
| MVNOs which buy service from different tower providers in
| different regions.
|
| Every piece of an operating system doesn't have to be built
| by the same entity. See Linux. For that matter, see macOS,
| which is full of BSD code written by many separate
| entities.
| OkayPhysicist wrote:
| You're grossly underestimating transaction costs. It is
| vastly preferrable from a company's perspective to be
| able to make 1 deal with 1 company that has many ships,
| as opposed to many deals woth many companies that have 1
| ship each. Reducing that cost ends up looking like Uber,
| where you've just moved your monopoly point to the
| controller of the marketplace.
|
| Each individual deal an entity makes takes time and
| money.
| AnthonyMouse wrote:
| The transaction costs problem is when you have 100,000
| ships and 100,000 customers and it becomes ten billion
| individual relationships.
|
| You do solve this with things like Uber, but such things
| don't themselves have to be a monopoly, because you don't
| have to make it 100,000:1, you can make it 100,000:20 and
| have twenty competing marketplaces but still not an
| explosively large number of separate relationships.
|
| This works even better with federated marketplaces. There
| are a lot of problems with the international banking
| system, but the general idea that someone in New York can
| make a wire transfer to someone in London even though
| they each use a different bank is based on protocols
| rather than a single centralized world monopoly bank, and
| in that respect is better than the more centralized
| alternative.
| [deleted]
| milkytron wrote:
| > The only reason the US has more than one cellular network
| right now it because the government has prevented multiple
| attempts at mergers, and even with that effort we're down to
| three.
|
| There actually was a monopoly in the telephone system[0] in the
| US that had to be broken up via antitrust.
|
| [0] - https://en.wikipedia.org/wiki/Bell_System
| Osiris wrote:
| And over the last 40 years has slowly consolidated back
| again.
| 0_____0 wrote:
| Thanks, Reagan.
| AnthonyMouse wrote:
| The AT&T breakup actually happened under Reagan, and was
| initiated in 1974 (which was Nixon/Ford). The
| reconsolidation happened under both parties throughout
| the 90s and 2000s.
| gjvc wrote:
| ...and this whole saga, lest we forget (and relevant to
| the HN crowd), was instrumental in giving rise to the
| unix wars of the 90s, due to the AT&T copyright dispute
| with University of California Berkeley. (The relevant
| point here being not the copyright dispute itself, but
| the fact that AT&T was not allowed to sell the UNIX
| system for profit, this being one of the conditions of
| being allowed to operate as a telephone company.)
| Spooky23 wrote:
| I wouldn't use cellular as a success story. Even with billions
| of dollars in investment directly from the Feds, AT&T seems to
| be wallowing.
| Jensson wrote:
| Yeah, power always consolidates unless people use violence (or
| threat of violence) to stop it. Companies merges to bigger
| companies, company owners loves this, that is bad and gives
| people less freedom. Countries merges to bigger countries,
| politicians loves this, that is equally bad. The more the power
| is spread around the better, but everyone who sits on power
| tries to work against that.
|
| Note that giving all the power currently held by capitalists to
| politicians is also consolidation of power, that is bad. Or
| vice versa. So giving the government too much power over
| companies will hurt on the other end, balance is needed and it
| is hard to say where the line should be drawn.
| Osiris wrote:
| Exactly. The phrase "power vacuum" is a good way to visualize
| this idea. When there is an opportunity for someone to gain
| power (of which there are many kinds), someone will exert the
| effort to take that power for themselves.
| cjbgkagh wrote:
| The US allows monopolistic returns because the country
| (politicians) benefit from it. If antitrust successfully kills
| monopolistic returns the beneficiaries of the increase in
| consumer surplus are the customers, many who are foreign.
| Hermel wrote:
| In sectors where products can have infinite variety (like
| fashion), monopolies don't seem to happen because the small
| creative producers can create new market niches faster than the
| monopolies can enter them.
| dwohnitmok wrote:
| That's not clear to me. I don't know much about things like
| clothes fashion, but e.g. eyeglass fashion is completely
| dominated by Luxottica (resulting in eye-wateringly high
| markups) and fashion-adjacent fields such as music are still
| dominated by just a few labels (this one you can say is
| basically a product of legal lobbying for protections).
|
| The pattern there is that small producers for the most part
| fail and fizzle out. The few successful ones get snapped up
| by the big players.
| Spooky23 wrote:
| Exactly. AT&T was a monopoly because it made sense to be one
| given the capital investment requirements and technology.
| Universal access was something that lifted up the whole
| country and had and has enduring value. Think of the bullshit
| and lack of interop between Facebook, Apple and Google
| messaging - without AT&T, you would have had that problem
| with legacy phones.
|
| They were tightly regulated, which worked well until
| technology moved ahead of the operations.
|
| Tight regulation works well when change rates are slow and
| you need to make capital investments. Short term decision
| making driven by final optimization always constrain capital
| investment. That's why your power grid is less robust than it
| was 40 years ago.
| twobitshifter wrote:
| This should happen with pizza, yet we see dominos
| successfully applying a monopoly strategy.
|
| https://www.forbes.com/sites/dalebuss/2019/04/30/fortress-
| ma...
| arrosenberg wrote:
| Eh, maybe 15-20 years ago, but fast fashion producers have
| made it much harder. You get 6-12 weeks before you get
| copied, at best. It's still possible to carve out a small
| business, but a lot of good business operators are being held
| back by those types of companies.
| [deleted]
| antihero wrote:
| This is fascinating but to read the series is it $8/mo? I'm
| confused, that is more than most magazine subscriptions.
| robinjhuang wrote:
| As matt says, you can pay for the truth or get lies for free ;)
| I've been a subscriber for two years and a paid one as soon as
| it was offered. Really recommend it! We also have open forums
| and a discord to talk about anything anti-monopoly.
| antihero wrote:
| It does sound cool but I wish there was like a dollar sub. I
| already pay so much in Patreon fees...I see there's a free
| subscription so I'll see if I keep reading that
| jacobr1 wrote:
| I want substack to have some kind of overall subscription
| where I can allocate my overall subscription spend to the
| newsletters, rather than having a per-newsletter fee.
|
| Maybe something like Kindle's system that has some kind
| page-read/engagement metric against the monthly revenue
| pool.
|
| Maybe something where I get discounting for buying in bulk.
| 10 newsletters for the price of 5 a la carte or whatever,
| and I can allocate my "newsletter credits" at will, even
| switching between them.
|
| Also how can libraries and other institutions subscribe and
| delegate their access?
| WJW wrote:
| I'm sure anyone writing lies can also charge money though,
| just because you pay for something does not make it good.
| pessimizer wrote:
| Maybe 1/10 of of the entries are exclusive to subscribers, and
| they're 95% of the time "open threads" where the commenters are
| talking to each other with Stoller giving them a few topics to
| kick it off. So really, the price is $0/mo.
| baybal2 wrote:
| US is a very, very regulated economy. And if you go into
| securities space, you basically can't even slice a piece of bread
| without a lawyer.
|
| There are countries with much lower amount of regulation, without
| everything rolling into one giant monopoly.
|
| I would say it is exactly that legal minefield, and active
| dirigisme that greatly distorts natural conduct of business into
| non-stop search of how to game the policy.
|
| One thing deserving a look is to what length US legal system is
| set to go to intervene into sale of public companies, which is
| taken as purely a contractual matter in between two companies,
| rather than dispute over "fairness" in pretty much every normal
| country.
|
| An outright fraud should of course be prevented, but courts
| should not be allowed to order somebody to basically be
| compensated for a bad deal.
| dv_dt wrote:
| There are countries with such little regulation, and thus not
| enough of a reliable economic or market framework that the
| economy can't even work it's way up to the point where
| companies can make good medium and long term decisions that
| payoff.
|
| Microsoft evading all sorts of anti-monopoly regulation (in a
| scene of waning anti-monopoly enforcement), caused them to
| destroy all sorts of smaller businesses.
| jandrese wrote:
| So your complaint is that too much regulation is oriented
| around protecting large incumbent players instead of the public
| at large?
| jacobr1 wrote:
| That is one my my complaints. But that doesn't mean we
| shouldn't also ensure competitive markets.
|
| But it isn't so much that the regulation is designed to
| protect the incumbent, it is: - the volume of regulations
| requires a compliance overhead that is more easily amortized
| by larger firms - incumbents are involved in the design (or
| provide feedback) into the regulations such that they are
| able to comply specific rules, which might not actually
| fulfill the intent of the protecting the public. The process
| of codifying and validating practices to check boxes is often
| just waste.
| wpietri wrote:
| Your theory is that Microsoft and Google and Facebook ended up
| with monopoly power because their industries were just too
| darned regulated at the time they established themselves?
| baybal2 wrote:
| Yes, they repeatedly sued their respective competitors, and
| disruptors out of business
| Jensson wrote:
| Which company did Google sue out of business?
| wpietri wrote:
| And let me add to that: How specifically did that suit
| against a competitor leverage regulations that we should
| remove?
| MontagFTB wrote:
| The regulations may not have existed at the time these
| companies established themselves, but could have evolved over
| time. It's a known practice of larger corporations to promote
| regulations that take them little effort to adhere to.
| However, those same regulations raise the bar for startups to
| gain entry and compete in an industry. Ironically enough,
| it's the regulations themselves that become anti-competitive.
|
| This isn't true for regulations categorically, to be sure-
| the established companies can wield lobbying power for
| particular regulations to pass. That makes them look good in
| the public eye, the government wins for adding "oversight",
| but the actual competitive landscape becomes more encumbered,
| not less.
| wpietri wrote:
| Sure, regulations are a way already-established monopolies
| can entrench dominance. But given that major new monopolies
| came up in low-regulation areas of business, regulation is
| not a primary driver of why they exist.
| tablespoon wrote:
| > It's a known practice of larger corporations to promote
| regulations that take them little effort to adhere to.
| However, those same regulations raise the bar for startups
| to gain entry and compete in an industry. Ironically
| enough, it's the regulations themselves that become anti-
| competitive.
|
| This point about "regulatory capture" is a often brought up
| as a clever anti-regulation/free market parry, to create a
| demotivating feeling of "damned if you do, damned if you
| don't" that breaks in the free marketeers' favor.
|
| I think the rhetorical tactic only really works if you look
| at part of the problem in isolation, and it's eliminated or
| at least mitigated with the consideration of action in
| other areas (e.g. more aggressive anti-trust/pro-
| competition regulation, or the kind of oversight regulated
| monopolies get).
| treis wrote:
| >Americans pay $50 billion more per year than Europeans for
| similar cell phone service, which is about $14/month in pure
| profit for every single American
|
| This doesn't really add up. T-mobile's net income is 3-4 billion
| a year on 80 billion on revenue. They're not generating monopoly
| profits.
|
| IMHO I don't think you can really merge your way into a monopoly.
| The existence of multiple companies to merge is effective proof
| that whatever business they're in is not a natural monopoly.
|
| Look at social media as an example. Facebook is the dominant
| player but in the course of their existence Instagram, WhatsApp,
| TikTok, and Snapchat have all become billion+ companies while
| another dozen or so have made it to 100+ million. Allowing them
| to buy Instagram and WhatsApp didn't prevent the rise of Tiktok
| or the continued existence of Snapchat. There's no natural
| monopoly here and probably should be little concern to anti-trust
| regulators.
|
| Compare with phones. You have a stable Android/Apple duopoly but
| it didn't come from mergers. It's a natural monopoly business so
| naturally monopolies formed. Facebook, Amazon, and Microsoft all
| trying to break into the market and failing miserably is also
| strong evidence. This should be a huge concern to anti-trust
| regulators.
| ultrasaurus wrote:
| Maybe "profit" is the wrong word. Anecdotally, the US has a lot
| of dedicated & spacious cell phone stores compared to other
| countries I've been in (where selling SIM cards is part of
| another store, like a 7-11 or an electronics store).
|
| It's possible there's an extra $14/month in _revenue_ going
| towards cell phones as an industry but due to the competition
| such as it is, it 's mostly being spent on more aggressive GTM
| expenses.
| ajsnigrutin wrote:
| The're is a huge difference between telcos and social media
| sites.
|
| Anyone can make a new instagram... just write some code in your
| free time, get (very lucky, and get) some VC to throw some
| money into your company, and you become a new instagram... then
| either get forgotten in a few years, or get bought for some
| huge amount of money. Instagram had just 13(?) employees by the
| time facebook bought them (or some other very low number, i
| forgot).
|
| But a telco? No way... virual operator maybe, but there's no
| real money in that, but just starting to build basestations is
| impossible, you need millions and millions to even get
| frequencies, and you're already late for those, and there's
| basically no realistic way for a new mobile operator to come to
| an existing market now.
| treis wrote:
| T-Mobiles market cap is like 3% of Apple's. If there was ever
| margin to be made Apple could swoop in like it was nothing.
| ajsnigrutin wrote:
| So, when will there be a new frequency auction for apple to
| get frequencies? How much does it take to get a build
| permits for each and every one of the new basestations
| needed from every local municipality (or whatever governing
| body gives out permits for that)? How long does it take to
| get permits to dig out and over all the roads and raileways
| to lay fiber for all those basestations?
|
| Yes, apple has a lot of money, yes apple can buy T-mobile,
| but for apple to build a tower in bumfuck alabama, that'll
| take years and years of bureaucracy and pain, and there are
| a lot of bumfucks around every country.
| RamblingCTO wrote:
| I always find it fascinating what monopolies are allowed in
| other countries. As a European I can only shake my head at the
| consolidation of the gaming industry right now. That would most
| probably not be allowed here. How can two companies buy up
| companies like Bungie and Activision? That's toxic to the
| economy imho.
| orlovs wrote:
| Defining monopoly by marketshare is shallow. Best monopoly is
| when your customers switching costs are high. Thats why some of
| FAMG is with so good friends with Lawmakers. To provide
| political protection.
|
| I am not from US, but what I see from my experience there is
| one huge problem with mergers (besides all other): too big to
| fail. If you become systematical player like big banks and if
| you intentionally or non-intentionally get in trouble. You will
| be bailed out, not go bankrupt. This turns on God mode for
| Corporations, this create intention become reckless. If big
| banks would not be bailled out in 2008. Most likely we would
| see at least some kind of fragmetation.
| missedthecue wrote:
| Still, going by that definition, changing carriers is pretty
| frictionless. Even if you have a contract, competitors will
| buy it out for you.
| missedthecue wrote:
| American cell company workers make more than their European
| counterparts on gross basis. Is this adjusted for in the
| comparison? Cellular companies have a _lot_ of employees and
| comp makes up a huge portion of their cost structure. (ATT has
| over 230,000, Verizon more than 130,000)
| good-idea wrote:
| Should they be squashing instead?
| zentiggr wrote:
| This looks entirely offtopic. Commenting on wrong post?
| oplav wrote:
| It sounds like a git joke about squashing vs merging.
| blendergeek wrote:
| It looks to me like GP may have commented without reading the
| article. "Mergers ruin everything" could be misread as
| "Merges ruin everything". Just reading the title could lead
| someone to think this was a discussion about git best-
| practices.
| brimstedt wrote:
| I was actually hoping for a nuanced view on code branch/merge
| tactics.
|
| Got any suggestions on the topic?
| good-idea wrote:
| I don't have any good resources off-hand (other than what
| shows up in a quick search), but my "best practices" are to
| always squash and keep PRs as small as possible.
|
| When a working branch falls behind main, I prefer to rebase
| it instead of merging from main to keep it up to date.
| However, if you've already pushed your working branch to a
| repo, after rebasing you need to `git push --force` - which
| is a problem if there are others who have previously cloned
| the working branch.
| vincentmarle wrote:
| Squashing also introduces problems when you are resolving
| merge conflicts in your branch: squashing doesn't preserve
| merge conflict resolution so you end up having to resolve
| those conflicts again after merging.
| codyb wrote:
| Great comment and spot on. You can avoid the issue with
| force by using `--force-with-lease` which won't push the
| force if there've been changes upstream.
|
| That's a bunch to type so I alias it to `fwl` In `~/.git
| config` and use it after rebases.
| misterbishop wrote:
| Matt Stoller needs a new schtick. Monopoly is built-into
| capitalism, but he loves capitalism. Capitalism without monopoly
| is utopian.
| dang wrote:
| " _Please don 't post shallow dismissals, especially of other
| people's work. A good critical comment teaches us something._"
|
| https://news.ycombinator.com/newsguidelines.html
|
| Also, please don't take HN threads further into generic
| ideological battle--on internet forums, that's a step towards
| repetitive, dumbed-down discussion that usually just turns
| nasty.
|
| https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...
| julienb_sea wrote:
| There are coherent, legitimate reasons for some degree of
| consolidation within industries. Technology sharing, combining
| assets, reducing the overhead from separate operations and larger
| scale in theory lead to a more efficient business, enabling cost
| reductions that create both profits and a competitive advantage.
|
| Consolidated industries can be highly competitive. An industry
| with multiple large players is more competitive compared to a
| single large player surrounded by many small players.
|
| I acknowledge this is not uniformly the case. Mergers do
| definitionally eliminate competition between the merged players
| and efficiency gains do not always materialize. But, the broad
| theory is well established and has shown success across
| practically any industrial vertical.
| Kinrany wrote:
| It's worse: every possible advantage of mergers is a good thing
| made impossible by competition. Mergers are a sign of the
| market itself being inefficient.
| oli5679 wrote:
| This is a really thorough article on the topic [1]. Here is the
| conclusion.
|
| "American antitrust laws date from a time when changes in
| transportation, communications, and manufacturing technologies
| generated unprecedented economies of scale, fueling the rise of
| industrial behemoths. Today, dramatic advances in information
| technology, combined with globalization, are fueling the growth
| of large and efficient "superstar firms" that are capturing a
| growing share of economic activity. The emergence of the tech
| titans is especially dramatic.
|
| These economic conditions call for a reinvigoration of antitrust
| enforcement in the United States to promote competition, protect
| consumers and workers, and spur economic growth. These valuable
| aims can be achieved by taking a tougher stance toward mergers
| involving market leaders and by vigilantly preventing dominant
| firms from engaging in conduct that excludes their rivals.
| However, moving in that direction is a slow process, requiring
| the antitrust enforcement agencies to take the lead and convince
| inertial and possibly skeptical courts to follow. Those who
| expect dramatic and rapid changes in antitrust will be
| disappointed, unless new legislation is passed. Likewise, those
| who expect antitrust to solve problems unrelated to competition
| will be disappointed. Stronger antitrust enforcement, while
| needed, is not a substitute for badly needed regulations directed
| at reducing the political influence of corporations, protecting
| privacy and data security, and limiting the spread of
| disinformation."
|
| [1] https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.33.3.69
| Spooky23 wrote:
| Positive progress is not going to happen anytime soon.
|
| When the more reactionary members of the legal profession moved
| beyond the various topics that interested then in the 50s and
| 60s, the new generation moved on to business matters, as big
| companies were getting tired of dealing with unions and tight
| regulatory controls.
|
| Over time, the interpretation of the antitrust law was changed
| by "judicial legislation" to narrowly define monopolies to a
| standard involving price increases for consumers. That's why
| the government allows, say oil distribution infrastructure to
| regionally consolidate to two players, while Staples and
| OfficeMax cannot merge despite their irrelevance.
|
| The current system incentives cartels. So when Microsoft buys
| Walmart or Google buys Verizon, that will be fine. 20 years
| from now, 80% of consumer spending will probably be directed at
| a half dozen companies.
|
| Eventually, something really bad will happen. The US will get
| spanked in a war, a regional natural disaster will trigger a
| famine, etc. At that point, maybe you'll see some change. But
| change is slow - the US House passed anti-lynching legislation
| for like 40 years and it never got out of Senate committee
| until Lyndon Johnson championed it.
| elcritch wrote:
| There was a lot of progress in the 1910's, iirc. It's
| possible that enough people will become frustrated enough to
| lobby for effective change. Generally that requires a few
| leaders capable of capturing the angst in a useful way.
| voidfunc wrote:
| People are significantly more exposed to the stock market
| these days than in 1910.
|
| Considering tons of people's 401k's are basically made up
| of the biggest companies in the US thanks to index funds
| there is a lot of incentive to not fuck with those
| companies.
|
| If any leaders gets really serious about breaking up some
| of the Big Tech companies you'll see enormous pressure to
| get them out of office ASAP.
| maxwell wrote:
| Google's brand protection racket [1] and manipulation of
| ad exchanges [2] has resulted in lost economic activity.
| Apple's crippling of the iOS ecosystem [3] has resulted
| in lost economic activity. Breaking them up should raise
| overall economic activity, nationally and globally, along
| with actually increasing the value of the Baby Googs and
| Apple Seeds, as previously with Standard Oil and, until
| allowed to reassemble in '96 [4], AT&T.
|
| I would think that index funds vs. individual stocks
| would translate to investors caring less about particular
| firms and more about economic activity and the resulting
| increases in asset values.
|
| Pressured out of office? Most U.S. politicians have now
| spoken out against Big Tech, the Department of Justice
| and several states have active antitrust suits, a House
| report concluded that Amazon, Facebook, Apple, and Google
| have monopoly power and should be split up [5], etc.
|
| 1. https://altitudemarketing.com/blog/competitors-buying-
| my-nam...
|
| 2. https://www.wired.com/story/google-antitrust-ad-
| market-lawsu...
|
| 3. https://docs.house.gov/meetings/JU/JU05/20190716/10979
| 3/HHRG...
|
| 4. https://en.wikipedia.org/wiki/Telecommunications_Act_o
| f_1996...
|
| 5. https://arstechnica.com/tech-policy/2020/10/house-
| amazon-fac...
| dragonwriter wrote:
| > People are significantly more exposed to the stock
| market these days than in 1910.
|
| [citation needed]
|
| > Considering tons of people's 401k's are basically made
| up of the biggest companies in the US
|
| When defined benefit (pension) funds dominated private
| retirement, guess what they held? (And if you say "but
| people weren't exposed to risk, because 'defined
| benefit'", guess what happened when funds failed...)
| xnyan wrote:
| >People are significantly more exposed to the stock
| market these days than in 1910
|
| >Considering tons of people's 401k's
|
| I'm surprised to hear this, because my understanding is
| the opposite. Something like 60% of Americans have a
| 401k, but the numbers for how much they have in them is
| grim. Almost everyone is underfunded, less than 20% of
| Americans made a contribution last year, and overall 9/10
| stocks are owned by about 1/10th of the population (and
| rising).
|
| >If any leaders gets really serious about breaking up
| some of the Big Tech companies you'll see enormous
| pressure to get them out of office ASAP.
|
| Even if it did tank 401ks, I don't think you can be so
| sure about the public reaction to it. I can't claim to
| perfectly understand human behavior, but I'm very
| confident that it not well predicted simply by applying a
| value-based analysis.
| elliekelly wrote:
| > Over time, the interpretation of the antitrust law was
| changed by "judicial legislation" to narrowly define
| monopolies to a standard involving price increases for
| consumers.
|
| And many of today's biggest tech companies largely get a pass
| because antitrust law focuses on price and ignores all other
| negative externalities that result from monopolistic behavior
| like quality, timeliness, ease of access to customer service,
| user privacy, and corporate social responsibility. But the
| product is "free" so how can the consumer possibly derive any
| further benefit?(/s)
|
| When there is competition in a market not only do prices fall
| but the customer experience improves. Businesses don't (and
| can't) compete on price. They compete on _value_. But US
| antitrust law ignores value entirely and consumers everywhere
| pay the price.
| billjings wrote:
| > Eventually, something really bad will happen. The US will
| get spanked in a war, a regional natural disaster will
| trigger a famine, etc. At that point, maybe you'll see some
| change. But change is slow - the US House passed anti-
| lynching legislation for like 40 years and it never got out
| of Senate committee until Lyndon Johnson championed it.
|
| Bad things like... a supply chain crisis:
|
| https://prospect.org/economy/we-were-warned-about-the-ports/
| AnthonyMouse wrote:
| > Likewise, those who expect antitrust to solve problems
| unrelated to competition will be disappointed. Stronger
| antitrust enforcement, while needed, is not a substitute for
| badly needed regulations directed at reducing the political
| influence of corporations, protecting privacy and data
| security, and limiting the spread of disinformation.
|
| This is wrong. The "political influence of corporations" comes
| from their size and vertical integration. Google has outsized
| influence in politics because it controls the dominant search
| engine and YouTube etc., which gives political influence to
| every other subsidiary of the same company in a way that would
| not occur if they were independent entities.
|
| Privacy and security problems are proportional to size. Bigger
| entities attract stronger attacks (because the benefit to the
| attacker is larger) and then more people are compromised at
| once.
|
| Misinformation is primarily a problem as a result of filter
| bubbles that prevent people from hearing the rebuttal to
| incorrect arguments. Diversity of information distribution
| addresses this.
| [deleted]
| [deleted]
| summari wrote:
| Quick summary of this for those short on time looking to get the
| gist.
|
| https://share.summari.com/mergers-ruin-everything
| samgtx wrote:
| What a neat little tool that is. Bookmarked.
| perlgeek wrote:
| Today I learned that in the US, cheerleading is an industry. I
| always thought this was mostly done by enthusiastic school and
| college kids, not much money in it. How naive of me :-)
| [deleted]
| evancox100 wrote:
| It is mostly done by enthusiastic students, Varsity's monopoly
| is in the apparel, supplies, and accessories that said students
| purchase.
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