[HN Gopher] If you like startups you should love anti-trust
___________________________________________________________________
If you like startups you should love anti-trust
Author : connor11528
Score : 497 points
Date : 2023-01-08 03:46 UTC (19 hours ago)
(HTM) web link (alexwrites.substack.com)
(TXT) w3m dump (alexwrites.substack.com)
| hamilyon2 wrote:
| The main and most important mono/oligopolies to break are in
| finance, medical education and law. These are the primary
| gatekeepers preventing value to reach consumer, these are rent-
| seeking vampires.
|
| Tech is interesting example, of course, but it's like a tempest
| in the bowl right now. We should permit to innovate everywhere,
| not just in web search space and e-commerce.
| Semaphor wrote:
| I think a big difference might be that in tech, you often have
| a global monopoly, while finance, medical, and law are more
| national ones.
| lwhi wrote:
| I'd argue that tech stands to eventually swallow the companies
| in the domains you talk about.
|
| The truly difficult thing about monopolies is that their power
| and strength in the marketplace grows exponentially.
| echelon wrote:
| The main and most important monopolies are, in this order,
|
| 1. Apple
|
| 2. Google
|
| 3. Amazon
|
| > finance, medical education and law
|
| Each of the above companies reaches deep into finance. Google
| and Apple capture real world payments on their devices, take
| 30% on top of any app software, limit or own the web, etc.
|
| They're each trying to break into medical, with big medical
| endeavors underway right now.
|
| Forget textbooks. Look at the fight between Google and Apple
| for the classroom.
|
| These companies have their own film studios, for goodness sake.
| How the hell did we let _that_ happen? Lord of the Rings is
| _Amazon_ -- What?!
| deadpannini wrote:
| What is Amazon's Monopoly?
|
| I don't mean this as a gotcha question: I really don't
| understand what people are claiming when they say this.
|
| All three of those companies are now large conglomerates with
| a lot of power (perhaps too much), but calling them
| "monopolies" is counter-productive (except Google search),
| especially in the context of regulatory or legal framework,
| where the facts have to fit a very precise pattern to take
| action.
| zozbot234 wrote:
| They own a dominant platform for consumer shopping and use
| it to promote their own products. Meanwhile established
| competitors like Walmart cannot be featured on the same
| platform without submitting to rules that Amazon itself
| doesn't have to abide to. It's called a tie-in arrangement
| in antitrust law, and it's not legal.
| deadpannini wrote:
| I'd agree that they are "dominant", and that legal
| authorities should watch Amazon closely for specific
| violations, but they only control 35-40% of the online
| consumer retail market (by most estimates circa 2022).
| scarface74 wrote:
| Really? No retailer has ever let a competitor advertise
| on their platform and store brands have always been a
| thing across retail.
|
| Poor little Walmart is much larger than Amazon in terms
| of revenue and profit.
| zozbot234 wrote:
| Physical retail stores are not a natural monopoly
| platform like a shopping site is. There's nothing
| stopping Amazon from building a physical store next door
| to a Walmart and selling its products there.
| scarface74 wrote:
| How is a shopping site a "natural monopoly" when there is
| an existence proof that there are other large shopping
| sites - like Walmart.com?
|
| If you go on Facebook or Instagram you can find thousands
| of small merchants who advertise there and ship directly
| to consumers.
|
| > There's nothing stopping Amazon from building a
| physical store next door to a Walmart and selling its
| products there.
|
| And there is nothing stopping you from building a website
| and doing targeted advertising that is reachable by
| anyone. Wouldn't you say it's a lot easier creating a
| website than building a physical store?
| scarface74 wrote:
| This is not true for Apple and I assume Google. It came out
| in the Epic trial that 80% of App Store revenue comes from
| pay to win games. If you look right now at many of the most
| popular non game mobile apps, most don't monetize directly
| through the App Store.
|
| Anyone can set up their own online store and many do using
| services like Shopify.
| robertlagrant wrote:
| We didn't let anything happen. 50 years ago Singer sewing
| machines was making computers[0]! Why didn't people back then
| ask who let them innovate and risk their money the way they
| chose to.
|
| I think they understood that you can't both have a process
| that delivers the fastest progress in human history, _and_
| dislike the vanishingly few participants who succeed at it
| inordinately well.
|
| [0] https://en.m.wikipedia.org/wiki/Singer_System_Ten
| ClumsyPilot wrote:
| > think they understood that you can't both have a process
| that delivers the fastest progress in human history, and
| dislike the vanishingly few participants who succeed at it
| inordinately well.
|
| Fastest progress in what? What you smoking mate?
|
| 60 years after Wright Brothers we landed on the moon! We
| went from a flying bit of cardboard to real space rockets.
|
| Now another 60 years have passed, and we achieved fuck all.
|
| It is amazind that free market advocates do not understand
| their most important feature. - competition
| izacus wrote:
| Funny you use "vanishingly few" in your sentence. Why is
| that do you think? Do you those amazing innovator megacorps
| with walled gardens into which new companies can't reach
| have nothing to do with it?
|
| Why do modern Americans hate market competition so much?
| robertlagrant wrote:
| "Vanishingly few" applies not just to the narrow world of
| American tech.
|
| I'm not American, and I'm not just talking about tech.
|
| I'm talking about the general process of progress and
| effort.
| [deleted]
| college_physics wrote:
| Maybe we are all biased about the importance of tech but it is
| a sector that can expand beyond its confines.
|
| Actually its not even a sector anymore. "Big tech" is hardly
| selling tech products or services anymore, its core profit is
| from selling ad or product marketplaces
|
| The finance example is illustrstive. Big tech would love to
| expand into that space and "disrupt" that sector (double the
| size of conglomerates) but so far at least it has been pushed
| back by other equally entrenched oligopolies
| aj7 wrote:
| I wouldn't approach it in terms of "enforcing antitrust laws."
| It's very hard to win those cases. What I would do is limit the
| cash that public companies can retain. This has the effect of
| distributing capital to new ventures and competitors naturally.
| And it has two knock on effects that are also very positive. If
| Sergei Brin et al want to develop self-driving cars, let them use
| their own money, or raise new money, not use an advertising
| company's stockholders' money vainly and cavalierly. Second, with
| less cash around, there's less to waste in general, and
| especially for senior managers, less to steal.
|
| We could implement my suggestion by making this more tax
| favorable for everyone involved. Liberate the cash!
| amelius wrote:
| I think Stallman proposed limiting the amount of people working
| for a single company.
| zackmorris wrote:
| Traditionally the answer to all of the economic problems we're
| facing today was taxation.
|
| You're right that antitrust cases will never be won at the
| scale needed to have a material impact on the economy. Plus,
| big companies will never allow reforms anyway, and will lobby
| their way out of any loss. So what do we do? What are some
| ethical and amicable solutions that can be applied evenly and
| fairly to all citizens?
|
| * Tax all property, not just homes. The US national property
| tax averages 1.1%. So we should tax stocks and other assets at
| around 1% also. Stockholders would choose to give up 1% of
| their shares each year, or pay their cash value to keep them.
| The current US stock market cap is $46 trillion, so 1% of that
| would be $460 billion. We paid $4.8 trillion in taxes last
| year, so this property tax would lower taxes for the rest of us
| by about 10%. The average income tax paid is $20,000 per year,
| so that would be about a $2000 savings per year.
|
| * Charge sales tax on all property sales, including stocks. 5%
| might be a bit high, and some states don't charge sales tax. So
| a national rate would be needed to establish a baseline on
| stock trades, something like 0.1% to 1% per trade. Losses could
| be used as a tax write-off, so a final sales tax could be
| charged at the end of the year, which might equal the property
| tax. This could reasonably raise savings to between $2200 and
| $4000 per year.
|
| * Fund UBI with the wealth taxes stated above. $2000/yr is
| $167/mo, but $4000 is $333 (about the cost of health insurance
| or a student loan payment or rent in rural areas). Instead of
| working to make rent, we could get back to getting real work
| done.
|
| * Organize. Tech could move to a cooperative model where
| gains/losses are split across teams, and form unions to provide
| actual resistive power against concentrated wealth:
| https://www.npr.org/2023/01/04/1146861998/video-game-microso...
|
| * Change the culture of tech. We could make the "I've got mine"
| mentality of tech bros uncool. Wealth concentration makes
| property a zero-sum game by forcing 90% of the population to
| subsist on 10% of the wealth. So we could openly criticize
| people who have assets above what they would need to retire
| (perhaps $10 million). Wealth beyond that is an effective theft
| of the time and resources of workers, who are forced to work to
| continue paying dividends on that wealth. The opportunity cost
| of that has grown to consume all of our time, giving us a lower
| standard of living, less leisure time and less upward mobility
| (by far) than we had before tickle-down economics which started
| in the early 1980s:
| https://www.weforum.org/agenda/2020/09/social-mobility-upwar...
|
| Now to me, everything I said above is obvious. It's self-
| evidently the way to fix the problem. Any child could
| understand it. The real difficulty is around de-programming the
| so-called thought leaders who currently benefit from the wealth
| inequality status quo. We could and should call them out and
| challenge them at every opportunity.
| diegoholiveira wrote:
| It's past time for the US to do to big tech what it did to
| Standard Oil in 1911. In fact, new legislation is needed to
| prevent this from happening in the first place.
|
| And of course, it is also necessary to restrict the powers of the
| state to end the possibility of a government that can do
| anything.
| echelon wrote:
| We need Apple, Google, and the rest to have holes in them for the
| good of the entire market. If big players dominate and suck all
| the air out of the system, all of that money goes to
| malinvestment and incrementalism. Vanity promo projects that get
| closed in a year.
|
| Big tech should win based on velocity and bringing value to
| customers. They shouldn't be able to just coast. And little
| companies should have a way of getting in without surrendering
| all their margins to, eg., the App Store.
| sailfast wrote:
| I'm in favor of anti-trust initiatives, and I like startups.
|
| That said, there were (anecdatally) a large number of people on
| here (founders?) for awhile (maybe still?) that subscribed to the
| Thiel school of ~"first to the monopoly wins!" which is good
| potentially for a business, but absolutely terrible for any sort
| of ecosystem (including, say, the earth). I'm not sure I like
| startups with the goal of monopoly at the outset.
| [deleted]
| mengibar10 wrote:
| All companies strive/want/expect/hope/conspire for one thing for
| cost: When purchasing for the input it would like to operate with
| terms of a market economy but when selling their goods/services
| they would like to be monopolistic. It's very a fundamental and
| natural desire. Desire to kill competition is just a
| manifestation of this fundamental rule.
| efortis wrote:
| > "maintain growth until the heat death of the universe..."
|
| > "their pursuit of endless growth..."
|
| Let me paste the first headline I can find today:
| "Layoffs are sweeping Corporate America to kick off 2023"
| sailfast wrote:
| I believe the OP meant growth of revenue, and ideally of
| profit. Layoffs in that case would actually be an improvement.
| ClumsyPilot wrote:
| At the sane time corporate profuts are record high
| [deleted]
| notpushkin wrote:
| I still don't see why anti-trust matters here.
|
| Say I make a search engine better than Google. If I market it, I
| get some share of Google's users. The better my search engine is,
| the more of user base I "steal".
|
| What's wrong with that? Is there something Google can (legally)
| do to stop me?
| progfix wrote:
| If your engine is better then they will buy it and shut you
| down. Or they will put 100x as much money into marketing as you
| have. Or they will hit you with law suits.
|
| What I am trying to say is in practice big corporations have
| many ways to get rid of their competion. For them there is no
| need to be better.
| jcparkyn wrote:
| They can pay you lots of money to buy it off you, and then do
| what they want with it. Great for you, but (potentially) bad
| for all the prospective users. It also might be bad for all the
| users who would have kept using Google either way, since less
| competition allows Google to make a worse product (e.g., more
| ads).
| scarface74 wrote:
| Why would a VC invest in a company if it knew its main avenue
| of getting a return was being cut off?
| jdub wrote:
| The return.
| jcparkyn wrote:
| I'm not sure I follow. How does that relate to my comment?
| scarface74 wrote:
| The hypothetical search engine isn't going to exist
| without investors who are expecting a return.
| notpushkin wrote:
| > They can pay you lots of money to buy it off you
|
| Only if you have investors that can force you to sell. I know
| that "just bootstrap your own search engine lol" is not an
| answer, but I do think there's some middle ground.
| TeMPOraL wrote:
| If you're actually a threat to them and still think so, it
| just means they haven't offered you _enough_ money. They
| 'll keep doubling the offer until you (or your family)
| starts to question whether sticking to your product vision
| is worth forgoing a once-in-a-lifetime option to literally
| _win at life_ with a single signature.
| ben-schaaf wrote:
| Google owns the web browser your users use to access your
| search engine. Google owns the search engine your users use to
| find yours. Google owns the ad platform you use to market your
| search engine. Google owns a large share of the software used
| to run alternate web browsers. Anti-trust is what stands in the
| way of google: Preventing your search engine from being used
| with chrome. Making your website not work with chrome anymore.
| Delisting your websites from google search. Removing your ads.
| Blocking your emails.
|
| What are you going to do other than close your business when
| you've been effectively blocked from the internet?
| hooande wrote:
| Do you expect Google to do any of these things to OpenAI, if
| ChatGPT becomes the google killer that some people say it
| could be? It's very difficult for me to imagine any of that.
|
| OpenAI isn't one person starting a search engine in their
| garage. But they acquired the reputation and resources to
| protect them from the behavior you describe through
| conventional means. And others can do the same.
| input_sh wrote:
| I don't believe ChatGPT-based solution will ever replace
| Google, but if someone tries and gains enough traction
| they'll encounter at least one of those issues and be on
| top of HN for that.
|
| Google will find some plausible excuse, something deep in
| ToS they broke, competitor will not be able to work around
| it or reach someone within Google to explain to them what
| exactly need to do to restore that part of service.
|
| We'll all suspect Google has done so intentionally and
| maliciously, but nobody will be able to prove that beyond
| doubt.
| ClumsyPilot wrote:
| > they acquired the reputation and resources to protect
| them from the behavior you describe through conventional
| means.
|
| And without antitrust, what would those conventional means
| be? norhing
| connor11528 wrote:
| Google could buy OpenAI in a heartbeat unless the
| government stepped in to disallow it. We've seen this
| before with amazing company Figma founded to beat Adobe.
| Way better product but instead of Adobe dying or having to
| innovate they bought Figma
| ben-schaaf wrote:
| I expect that when Google faces real competition against
| their core business they will be assessing the legal risk
| of every anti-competitive move they make, like every
| monopoly before them.
|
| Be that buying the competition, dumping to kill the
| competitors business, slapping them with lawsuits or making
| their competition illegal through lobbying.
| input_sh wrote:
| > The better my search engine is, the more of user base I
| "steal".
|
| Very bold assumption on your part.
|
| Google's not #1 because it's orders of magnitude better than
| anything else anyone could come up with. It's #1 because
| Chrome's #1, while #2 (Safari) and #4 (Firefox) receive
| millions each year to keep it as default.
|
| Your alternative, even if objectively better (whatever that
| means for a search engine) will never take a significant chunk
| of Google's market share because you can't outpay Google to get
| it into people's pockets by default. That's what anti-trust is
| about.
| notpushkin wrote:
| > Google's not #1 because it's orders of magnitude better
| than anything else
|
| That was the assumption in the OP article - at least, that it
| was better than competitors at first. Of course, being the
| default plays a significant role in it keeping its popularity
| nowadays, but I still believe it can be worked around (and
| will be, but it'll take time).
| input_sh wrote:
| It's still better than everything else in my opinion. I use
| DDG by default, but sometimes have to revert back to
| Google. But those are rare enough that it's not
| _signifanctly_ better than anything else. Something better
| will come eventually, but it 'll be a very uphill battle.
| Enthusiasts will use it (myself included), most other
| people will not.
|
| TikTok is the only example I can think of of something
| succeeding in the past decade that's _not_ from a company
| that also offers like a million other products. That 's the
| power of having a monopoly.
|
| If it gets regulated _a bit_ (example: you get a prompt to
| choose your default search engine when you first open a
| browser), Google /Apple/Microsoft/Amazon might lose a
| dominant position in a category or two, but they have a
| dominant position in so many other categories that it'll
| mean nothing to them.
|
| The only possible solution is regulating them _hard_ ,
| forcing each of those to dissolve into a dozen smaller
| companies and preventing them from buying up the
| competition even further. Then and only then will startups
| have a shot at snatching up a significant number of
| categories to _really_ endanger what we now know as the Big
| Four.
| afterburner wrote:
| Google is paying Mozilla $450 million a year to be the default
| search on Firefox. How well can you compete against that?
| connor11528 wrote:
| Plus $12 billion Google pays Apple every year to be default
| search on safari.
|
| https://www.businessinsider.com/google-apple-search-deal-
| doj...
| nathias wrote:
| if you become good google can just buy you
| jdub wrote:
| Take all the answers to your question. Then consider that
| they're not just the reasons you'll have trouble competing,
| they're the reasons you won't bother starting.
| nativeit wrote:
| Tell you what, go open a customer support ticket with Google
| for assistance with a Google Workspace account.
|
| Now, once you have discovered that this very normal and routine
| process literally does not exist, you might spend a little time
| researching how in the world this could be the case: even if
| you've spent thousands on that Google Workspace account, your
| only options are A) community support forums full of unpaid
| users helping users (Aw, isn't that altruistic of those kindly
| users?) or, B) go away and deal with your problems yourself.
|
| Anti-competitive practices and wielding a de facto monopoly
| position are perhaps not the singular or direct cause of this
| frankly astonishing lack of respect for their users, but it is
| _absolutely_ tightly correlated with such open distaste for the
| people purchasing and using their products.
|
| Lastly, not for nothing, but Google's own origin story and
| wildly successful history are literally the result of anti-
| trust actions taken against their establishment competitors in
| the late 1990's/early 2000's.
| notpushkin wrote:
| To be honest I don't see how this is relevant here.
|
| Anyhow, there's a lot of Google Workspace competitors,
| switching to one of them shouldn't be a problem (at least for
| internal communications; sharing a self-hosted OnlyOffice
| link with somebody expecting a Google Docs document would be
| mildly weird).
| connor11528 wrote:
| I think the point if you're a small customer or vendor big
| companies don't have to care about you and can treat their
| customers like shit. Airlines come to mind. Also, sellers
| on Amazon can be abused by the giant and have little
| recourse because Amazon controls so much internet commerce.
| The point I think is that monopolies can treat their
| customers like shit and get away with it.
| scarface74 wrote:
| And Google Workspaces is a nothingburger in its market and
| you choose its major competitor..
| connor11528 wrote:
| Similar point if you're on Southwest Airlines support. A
| true monopoly could close all support functions and people
| would have to deal with it because there'd be nowhere else
| to go
| return_to_monke wrote:
| Google buys your startup, and then shuts it down.
| scarface74 wrote:
| This is dumb and idealistic. The only purpose of VC funded tech
| companies is to have an exit. Statistically by being bought by
| one of the giants or being foist onto the public markets where
| the public is the "greater fool".
|
| In the past decade, only one tech company has made a dent in the
| market _and_ become consistently profitable - AirBnB.
| lannisterstark wrote:
| The issue with this becomes that anti-trust then becomes the tool
| of the $CurrentRegime to break up companies THEY dislike.
|
| For example, part of the reason US costs for healthcare are
| skyhigh IS because of US govt regulation. IF the only applied it
| to healthcare giants, but they won't, because they're not the
| companies the govt dislikes, also $$$.
|
| All this will do is end up giving more power to the govt to break
| up the only thing that actually has the capability endangers
| their power-hoarding : big companies.
|
| Ultimately, Govt IS the biggest company, and you rarely have a
| choice to switch. If I don't like Amazon, I can go to walmart, or
| local store. I can't just willy nilly pack up and leave the
| country.
|
| People support regulations (or hell, $MeasureX) until the govt
| comes for the thing they like, despite people like us telling
| them that eventually the govt will do just that. (Eg, abortion in
| the US : People like us were telling others that if they stampede
| on our rights, they will stampede on yours too, given the
| chance).
| Pozzuh wrote:
| You neglect to mention there actually is a "choice to switch"
| with regard to the government: it's democracy.
| lannisterstark wrote:
| "democracy" is "democracy" in name only in many countries.
| Eg, in the US, Republicans and Democrats are fairly similar
| middle of the road people. In India, what democracy lol? Same
| in egypt.
|
| "democracy" also depends on others wnating the same change as
| you. You alone can't do jackshit.
|
| I alone can choose not to shop at amazon and choose walmart
| intead.
| theptip wrote:
| Oft-overlooked, but this applies beyond "big tech" too. The US
| has for decades lagged behind most developed countries on
| broadband internet speed, largely due to the uncompetitive
| markets.
|
| Things like Local Loop Unbundling (back when ADSL was a thing)
| and allowing/encouraging municipalities to run FTTH would improve
| things a lot, but the incumbents have lobbied hard against such
| policies that would force more competition.
| TheRealPomax wrote:
| Sort of, but the problem with ISPs is "who owns the
| infrastructure?" because it doesn't matter how much you want
| ISP competition if the actual cables are owned by an ISP rather
| than an independent infrastructure company that ISPs are only
| allowed to contract to lay new cable without any say in who
| gets to use it.
|
| (The US absolutely _adores_ vertical integration. A company can
| own the land, the infrastructure, the access to that
| infrastructure, the services that run on that infrastructure
| AND strip your rights to the court by forcing you into
| accepting binding arbitration instead, and the US will point
| and it with starry eyes and proclaim it a shining example of
| success)
| theptip wrote:
| Right, LLU addresses exactly this by requiring network
| operators to open up their local exchanges to competitors,
| basically forcing a decoupling of the "last mile delivery"
| (which is a natural monopoly) from the internet service
| provision (which is more competitive).
|
| It's quite clearly beneficial to consumers to do this, but
| companies hate it of course.
| userabchn wrote:
| Progressive corporate tax rates (like personal income taxes,
| instead of the current flat corporate tax rates) would help small
| companies to compete with big ones simply and naturally without
| needing governments to decide what constitutes a monopoly.
| mkl95 wrote:
| If you like startups you should hate noncompete clauses and love
| anti-trust. Somehow they coexist in many areas.
| monero-xmr wrote:
| My problem with anti-trust is my problem with taxing the rich.
| How do you define rich? How can you logically explain why, say,
| $999,999 per year is not rich but $1,000,000 per year is?
| Wouldn't a homeless person say everyone with a roof is rich? It's
| simply illogical.
|
| With anti-trust, it's defining monopolies. Maybe a company like
| Google dominates search advertising. But they don't compete
| economically in search, they compete economically in digital
| advertising - or is it all of advertising? Isn't Amazon and Apple
| eating their shirt in new spend on search ads? By the time the
| anti-trust case works itself through the courts it's often that
| the "monopoly" has fallen quite a bit from their perch.
|
| Now to get to start ups. Startups being acquired WANT to be
| acquired - otherwise they wouldn't be sold. There is no gun that
| makes them be sold - their shareholders agree to it. If you love
| startups, you should be pro-founder, and that means letting them
| be sold if they want it. Otherwise it's simply coercion and
| authoritarianism to prevent an owner to do what they want with
| their company they put their blood and sweat into.
| int_19h wrote:
| How about this.
|
| If any person wants to have no restriction on their business in
| terms of size, anti-competitiveness etc, then they are welcome
| to do so - provided that they can build their monopoly without
| incorporating. Hire as many workers as you want, expand as much
| as you want - but you have full personal liability for
| everything that your business does, as it is under natural law.
|
| OTOH if you want a fictitious legal entity to shield yourself
| from liability, then the society is happy to accommodate - but
| it comes with strings attached, and one of those is anti-trust.
| valenterry wrote:
| What you say isn't really wrong, but I guess there is a
| different perspective.
|
| I wish there were more startups that just keep operating
| standalone without being bought. Having the often passionate
| founders staying in control and evolving their company.
|
| Of course, if they can sell than they get more money out of
| that and maybe have time for something else/new. But at the
| same time, how does it impact society if passionate founders
| leave all the time? Maybe that isn't really great for the
| overall progress.
|
| On the other hand, were there less startups if they can't be
| sold/bought as easily? I'm not sure, but I imagine the impact
| wouldn't be so huge, since I expect for most people, selling
| their company is more the icing on the cake and not the major
| reason why they start something on their own.
| monero-xmr wrote:
| I believe in freedom and individual rights. It's so hard to
| build a company. Very hard. Try it yourself someday if you
| don't believe me. Small, medium, large, lifestyle, whatever
| your endgame is I guarantee it's 100x harder than you
| envisioned.
|
| You say you wish more startups operated standalone. Is it
| possible that the same person who can build a company from
| zero to 100 people isn't qualified and / or wanting to take
| it from 100 to 1000 people? Shouldn't it be her right to sell
| her asset, and start something new?
|
| Some people believe that society has some claim on companies,
| meaning the government should be able to arbitrarily coerce
| any company of any size to do anything. Less-logical people
| claim that society has a claim when a company reaches some
| threshold of size (which makes no sense as no one can explain
| what that size is except "eh I guess a billion dollars in
| revenue").
|
| The only defensible logic is to let the owner do what they
| want. Otherwise it's authoritarian.
| connor11528 wrote:
| I feel like the logic here is that if companies behave
| badly enough competitors will emerge and kill the bad
| company. This school of thought was first pioneered by
| Robert Bork in the 70s along with the "consumer welfare
| standard" that hey if you can't prove it's hurting
| consumers then who cares. This is the dominant view of
| establishment antitrust lawyers to this day and why
| American industries from chocolate to diapers to national
| defense are concentrated.
|
| The reality is that if the owners do what they want they
| will buy competitors, rent seek and not innovate. If the
| government seeks to meddle they will buy lobbyists.
| Additionally firms that have their market cornered will
| squeeze workers and their vendors. Finally close ties
| between concentrated industry and the government leads to
| more authoritarian rule.
| monero-xmr wrote:
| In 2021, American companies represented 65% of global
| stock value.
|
| https://www.weforum.org/agenda/2021/07/top-100-companies-
| usa...
|
| America has 4% of global population. This tiny country
| population-wise is beating the shit out of everyone else
| by 1000x in economic and military might. Maybe you should
| see our system in a better light.
| crummy wrote:
| By this argument there can be no flaws in the American
| system, right?
| monero-xmr wrote:
| How about advocating for an economic revolution to align
| the system closer to Argentina and Venezuela is dumb
| considering the US is clearly the best on earth by a
| significant margin? No one prevents you from moving away.
| tchaffee wrote:
| Who here is advocating for Argentina's or Venuzuala's
| economic system?
|
| If it's 100 degrees in the room and I want it to be
| cooler that doesn't mean I'm advocating for the room to
| be 0 degrees. Your need to exaggerate the point of others
| points to a weakness in your own argument.
| tchaffee wrote:
| All of the system? Including the progressive taxes?
|
| You should also consider that we don't serve the economy.
| The economy should serve us.
|
| Of that economic output you're so proud of, the vast
| majority of it ends up in the hands of rich people. Why
| would the average person want to defend that system?
| valenterry wrote:
| Note that 65% of global stock value does _not_ mean 65%
| of global value. The US has a much higher number of
| public companies. That doesn 't mean that they are
| better.
| valenterry wrote:
| > Is it possible that the same person who can build a
| company from zero to 100 people isn't qualified and / or
| wanting to take it from 100 to 1000 people? Shouldn't it be
| her right to sell her asset, and start something new?
|
| Well, they don't have to sell the company to start
| something new. They can hire/appoint someone to take care
| and essentially only roughly supervise them which really
| doesn't take much time. The only difference is really the
| ownership part.
|
| I still get your point and yeah, it is a disadvantage. But
| individual freedom has to be balanced against the needs of
| the whole society too.
|
| > The only defensible logic is to let the owner do what
| they want. Otherwise it's authoritarian.
|
| Not really. Look, the owners of companies benefit from
| society as well. They get infrastructure, stability,
| especially laws and their enforcement and so on. This is
| not a given. The society doesn't let random people do what
| they want, e.g. steal from the owner of the company. Would
| you call that authoritarian? Certainly not. Neither is
| putting boundaries of what you can do with the stuff you
| own.
| jakelazaroff wrote:
| _> My problem with anti-trust is my problem with taxing the
| rich. How do you define rich? How can you logically explain
| why, say, $999,999 per year is not rich but $1,000,000 per year
| is? Wouldn't a homeless person say everyone with a roof is
| rich? It's simply illogical._
|
| We all put our heads together and say "how much money should
| you be able to make before you start needing to give a lot of
| it back?" (or alternately, "how much market share should you be
| able to get before you're broken up?") and then that's the
| number. Some people will want that number to be higher, some
| people will want it to be lower, but ultimately we (mostly)
| agree that it's better for all of us if we follow these rules
| around that number.
| monero-xmr wrote:
| I think you are advocating for a flat tax, meaning everyone
| pays the same percent. This is fair and logical to me.
|
| What I don't understand is progressive taxes, which make you
| pay more once you hit some arbitrary threshold. Very
| illogical.
| [deleted]
| Chinjut wrote:
| From your original post, you seem to feel progressive taxes
| requires some sort of absurdly different treatment for
| people who make $999,999/yr vs $1,000,000/yr, or at
| whatever threshold, but that is not at all how they
| function. Even with discrete jumps in marginal tax rates
| (as in the current system of progressive income tax in the
| U.S.), post-tax income is a continuous monotonic function
| of pre-tax income. Making a little more pre-tax income
| always results in making a little more post-tax income.
| monero-xmr wrote:
| My problem is that no one can logically explain why they
| chose what thresholds. It doesn't mean anything, they
| just decided some number. I can play games and avoid that
| number. It's absurd
| Chinjut wrote:
| Why are you playing games to avoid that number? There's
| no big difference in being slightly above vs slightly
| below that number. Indeed, it's slightly better to be
| slightly above.
| __MatrixMan__ wrote:
| Is saying "if you cross this line, you're rich" any more
| absurd than the whole money thing is in the first place?
| Buttons840 wrote:
| There is a common fallacy that going up a tax bracket can
| result in taking home less money. For example, sometimes
| you'll hear apocryphal stories about someone turning down
| a small raise because they did the math and realized it
| would move them into the next tax bracket and result in
| them taking home less money. That's not how progressive
| taxes work, and such stories are incorrect. I just wanted
| to double check that you understand this, right?
| monero-xmr wrote:
| You are speaking as a non-wealthy person.
|
| If I have significant sums of equities, I can sell half
| on Dec 31 and half on Jan 1 to avoid a new bracket. I try
| to avoid speaking much about my situation, but my tax
| advisors and I use every trick in the book to play all
| the games available, of which this is but one.
|
| My issue is not that I have dedicated a lot of time and
| money to avoid taxes, but really that the tax rules are
| so arbitrary and stupid to begin with.
| Chinjut wrote:
| Your advocacy for a wealth tax on unrealized capital
| gains is compelling. Let us adopt that.
| monero-xmr wrote:
| A wealth tax! Even France tried and abandoned that! Do
| you have any idea the side effects that would cause?
| Suddenly I would be a pauper, how simple this would be.
| [deleted]
| rnk wrote:
| We have wealth taxes. They are called property taxes in
| the US. I have to pay a percentage of the value of my
| house. And I can't sell a tiny piece of my house to cover
| it. I have to use my other funds to pay for it. That
| seems so unfair, the poor weak billionaires of the world
| say. When My house goes up in value, my tax will go up,
| and down works the other way too.
|
| Billionaires cry and moan about the impossibility of
| paying a wealth tax on their billions in stock. They can
| manage to do it, just like all the rest of us. The wealth
| tax is claimed to be this exotic impossible thing. Yet
| most every home owner in the us is paying, us 100 million
| plus people. Surely the rich, those who have millions or
| billions can do the same. The reason they don't is they
| have captured the legislature, their fox new advertising
| is very successful, no one wants to tax the very wealthy
| because surely they will be wealthy one day.
| monero-xmr wrote:
| Out of all the possible ways you can tax me, a wealth tax
| is easily the dumbest and easiest to avoid. I wish the US
| would do it just to show the world why this is so absurd.
| I don't even want to get into it, just that the folly
| would be enormous and my laughter very loud.
| jakelazaroff wrote:
| Is it "suddenly I would be a pauper" or "a wealth tax is
| dumb and easy to avoid"? I'm really not sure what you're
| trying to say here.
| monero-xmr wrote:
| You guys are scatterbrained. The issue seems to be wealth
| - you don't like it! Even if we all started absolutely
| equal, if someone became rich, that is a problem society
| must solve.
|
| But the problem isn't being rich - clearly you replying
| to me are rich - you know what I'm saying, you are
| commenting on HN, I would bet you are upper middle class.
| The problem is being _too rich_ , as defined by you, the
| merely rich. And I am clearly too rich or at least
| advocating support for them for your taste.
|
| So what to do, what to do!?! You want to tax me and give
| it to the democratically elected government to
| redistribute. But how to create rules that tax only me
| and not yourself? And prevent me from looking on paper
| like I'm like you?
|
| Well to start with we have family foundations and donor
| advised funds. I can pay my children and extended family
| (anyone I want) market rates out of that. My son can get
| paid $350k per year with a legit W2 to be a VP of some
| bullshit saving the world. I can immediately move income
| and capital into a DAF to take the tax write off.
|
| My wealth - wow - I could put it all into an entity and
| get a giant loan against it collateralized by this
| bucket. Suddenly I'm not rich, I'm indebted up to my
| eyeballs!
|
| And if you want to pass ever more rules to stop me, well,
| I'm plugged into the elite class and it always seems that
| holes the size of a Mack Truck provide an escape. Google
| QSBS sometime for yet another fun rabbit hole.
|
| Good luck my leftist friends!
| Chinjut wrote:
| You mock leftists as having futile aspirations, thanks to
| your tax dodging abilities. But we do have progressive
| taxation as a rather strongly entrenched policy in the
| United States and most of the rest of the world, so in
| that sense, you are the one with a futile task ahead of
| you, in your aspiration to eliminate it. Good luck!
| monero-xmr wrote:
| It's like looking into a crystal ball that changes as you
| twist it.
|
| On one end, yes, progressive taxation is the goal of laws
| at the high level.
|
| But on the other, the implementation of such a policy is
| impossible, so if you have 3 degrees of separation
| between the goal and individuals trying to act in their
| own self interest, the folly becomes obvious.
|
| Human behavior is unchanging, and so is the nature of
| those in power. The elite leftists will pass any amount
| of nonsense policies but will violate it themselves at
| will and protect their own elites.
|
| I can't really explain it other than you need to view the
| system properly and shake the crystal ball.
|
| Put yourself in my shoes - pay millions in taxes, or pay
| a firm $100k and sign a bunch of documents to save
| millions in taxes. I'm not a sucker.
| jakelazaroff wrote:
| This doesn't really address my question, or any of my
| other comments, and I haven't really said anything about
| being rich or not -- just that we should be able to make
| decisions as a society. That seems to disagree with you?
| So, uh, good luck with whatever weird tax scheme you have
| going on, I guess.
| monero-xmr wrote:
| I guess if you have no position then your commenting
| makes no sense and probably you should not bother.
|
| If what it seems is that you want society to vote on how
| much to steal from me, my point is a flat income tax is
| the most fair and straightforwards, and eliminate as many
| exceptions as you can.
|
| But given my knowledge of this situation that's
| impossible and it won't happen, so good luck with your
| wealth taxes.
| Chinjut wrote:
| Out of all the possible ways you can persuade me,
| refraining from even providing an argument is easily the
| least effective.
| [deleted]
| [deleted]
| kennywinker wrote:
| The logic of a progressive tax is that tax is supporting
| the system that we all exist in and benefit from. I pay
| less tax than someone who makes more than me because they
| are extracting more wealth from the system than I am.
|
| Yes, the brackets are arbitrary. But if everything is
| working in a democracy, then it should be set by the
| majority to follow the curve of what the majority of
| people make in some reasonable way. But, it's not in
| america, because money is speech apparently so rich
| people buy votes and keep their progressive taxes lower
| than they would otherwise be.
| ClumsyPilot wrote:
| > It doesn't mean anything, they just decided some
| number.
|
| You pain doesn't mean anything,you cant even assign it a
| number
|
| What, you want strong painkillers for your surgery? What
| does 'a lot of pain' even means?
|
| If you can't precisely define how much pain you have I
| wont give you a prescription. So illogical!
| jakelazaroff wrote:
| I'm not really advocating for anything. I'm saying that
| some people say "these people making a lot of money are
| benefitting more from society, they should pay more" and
| other people say "actually they deserve to keep what they
| get" and we all argue and vote and come up with a system
| that everyone can mostly live with.
|
| Sure, it's arbitrary, but so is the flat tax percentage
| you're talking about. Tons of laws are arbitrary. Speed
| limits aren't some emergent property of the universe, or
| etched onto stone tablets by Adonai himself, but that
| doesn't mean we should let people do 90 in a school zone.
| rnk wrote:
| That argument is completely unpersuasive. Startups might be
| forced to be in a position to be sold because their huge
| company competitors might be pressuring their potential
| customers not to use them (think amazon vs a new startup
| offering some database capability). If you can bundle your
| version of something or charge almost nothing, you starve the
| startup of any market.
| monero-xmr wrote:
| It sounds like you want to ban competition. Surely if I own
| an ice cream truck, and I want to include a cone with my ice
| cream, that doesn't mean I'm damaging the independent cone
| seller? Why is that fair but bundling a database is not?
| connor11528 wrote:
| Bundling per se isn't a problem. It becomes illegal when a
| firm uses market power to destroy competitors. If you're
| interested in learning more I suggest reading about the
| Robinson-Patman Act (1936) and Clayton Antitrust Act (1914)
| as well as the Sherman Act (1890)
| llbeansandrice wrote:
| What a bogus hypothetical. What market exists to buy
| individual cones?
|
| It's not the bundling that's the problem, it's dropping
| prices of a single product in a single market to destroy
| competition in that space while staying afloat with VC or
| other revenue streams/products.
| monero-xmr wrote:
| So you say! I included a cone for FREE with my ice cream.
| I have dropped the price to zero!
|
| If we banned ice cream trucks from selling cones, surely
| an independent cone business would spring up if market
| demand existed.
|
| This contrived example is to prove my point - you claim
| I'm speaking absurdities, but if I claim bundling a
| database (or caching solution, or search engine,
| whatever) is merely a convenience, you cry foul. Nothing
| is logical here
| hattmall wrote:
| Your example is not analogous. It is more accurate to say
| you are an ice cream seller and the only ice cream
| seller. Their is a thriving market of sellers for donuts
| and you wish to sell donuts so you give away free donuts
| with all the ice cream you sale. Not because this is your
| value proposition, but because you wish to make the donut
| business untenable for anyone other than the largest ice
| cream seller.
|
| That is antithetical to competition. There should be
| limits or a prohibition on subsidizing horizontal or
| vertical business integrations. The limits should be
| related to the long term consumer value proposition.
| Dracophoenix wrote:
| > It's not the bundling that's the problem, it's dropping
| prices of a single product in a single market to destroy
| competition in that space while staying afloat with VC or
| other revenue streams/products.
|
| The same could be said of open-source software. Most
| open-source software are clones of commercial products,
| supported by free labor, and provided at $0. The most
| successful ones undermine their commercial counterpart
| and may go so far as to destroy a previously
| commercially-viable industry.
|
| As an example, do you think Linux should be regulated out
| of existence because its provided at a unsustainably low
| cost with respect to the competition? If Linux didn't
| exist, commercial Unix could still be a competitive
| market. Linux's expansion has also resulted in the
| deterioration of the consumer OS market, where there had
| previously been AmigaOS, AtariTOS, VMS, Solaris, BeOS,
| etc. Linux is also backed by a cartel of commercial
| supporters that influence what gets added, what gets
| supported, and what gets kept out. Obviously, these
| decisions affect what hardware and software consumers
| would consider purchasing/supporting.
| llbeansandrice wrote:
| You're right that these OS projects can and do destroy
| the competitive market for their space, but critically
| they are both free (as in beer and often as in freedom as
| well) and open. Their reason for being free is not for
| market capture to destroy competition and then drive up
| prices.
|
| Amazon bundling a service and providing it at reduced
| cost to capture the market is neither free nor is it
| open.
| tchaffee wrote:
| > How do you define rich.
|
| As social animals humans are exceedingly skilled at determining
| fairness if they decide as a group. They will never get it
| perfect but they will get close enough. Your argument is a
| schoolboy argument: if the pie can't be divided _exactly_ then
| you get most of it because you 're bigger.
|
| Progressive taxes don't need the precision you're demanding.
| It's a strawman argument.
| connor11528 wrote:
| Too much concentration of economic power will translate into
| political power. We see this already with how much Meta, Google
| and Amazon spend on lobbying. Excessive concentration of
| economic power breeds antidemocratic political pressures. Sure
| there's an argument to be had about the freedom to sell your
| company but there's also American industrial policy, workers
| rights, industry resilience and consumer protections to
| consider.
| [deleted]
| phh wrote:
| One of my personal projects that I never pushed forward is a blog
| "a monopoly a day" (under-titled "keeps the EU away"). The idea
| is that everyday, I want to show small-ish negative impact of a
| big tech monopoly, and explaining it. The goal is that the sheer
| recurrence is enough to convince people of the negative impact on
| innovation and societal growth big companies have.
|
| (That's with a pretty broad definition of "monopoly", including
| "user-specific monopoly" like you get with android / ios, notions
| that I would also try to explain in said blog)
|
| One example:
|
| > https://mobilesyrup.com/2016/09/27/why-blackberry-never-rele...
|
| > I believe this one shows how a monopoly can prevent innovation.
| Blackberry with the Passport had a new form-factor. To make this
| phone worthwhile, it had to use a mainline OS. At the time, only
| Android with Google apps was available. However, Google rules
| back then couldn't allow this.
|
| Would HNers be interested in such content? And in contributing to
| it? (my knowledge wrt monopolies is in my area of expertise, and
| let's just say I like being employable, so it's better if it
| doesn't look completely targetted)
| hbrn wrote:
| > The goal is that the sheer recurrence is enough to convince
| people of the negative impact on innovation and societal growth
| big companies have.
|
| I don't think anyone disagrees that monopolies are cancer.
|
| The hard part is coming up with a targeted cure that attacks
| monopolies without hurting innovation.
|
| So far that seems impossible. Almost like monopolies are a
| natural result of innovation.
| javajosh wrote:
| Yes, I would like that. It's nice to have a place to record
| negative experiences in a way that might contribute to a
| positive outcome eventually. Some of the best (and most
| verboten) content will come, of course, from insiders.
|
| One issue I foresee, similar to how local business groups
| inevitably get overwhelmed with real-estate agents, is that
| this venture will get overwhelmed with complaints against ISPs
| and other utilities.
| snowwrestler wrote:
| This project would be interesting only to the extent it
| accurately showed the negative impact of monopolies.
|
| Unfortunately, this subject area is full of strong emotions and
| opinions that make it hard for people to be objective.
|
| For example the article you link says that Google and
| Blackberry worked jointly on the 1:1 format phone, and jointly
| decided to stop working on it. That hardly sounds like an
| abusive monopolist.
|
| And sure, at that point Android was more popular than the
| BlackBerry OS. But this actually demonstrates healthy
| competition. I had a Blackberry for work (edit to clarify:
| running BlackBerry's own OS and software), and so did all my
| coworkers. Blackberry was the dominant mobile platform once.
| Through complacency and poor decision-making, they stopped
| innovating and competing. And thus, allowed new products with
| zero installed base on day one to come in and take their
| market.
| phh wrote:
| > Unfortunately, this subject area is full of strong emotions
| and opinions that make it hard for people to be objective.
|
| I actually think it's not possible to be objective on that
| matter, hence it needs to be properly explained, to
| understand the limitations of one post (but the goal is to
| have many posts, so hopefully readers can reject the ones
| they feel is wrong)
|
| > For example the article you link says that Google and
| Blackberry worked jointly on the 1:1 format phone, and
| jointly decided to stop working on it. That hardly sounds
| like an abusive monopolist.
|
| Let's just say that I've seen a bit of first-hand, and a lot
| of second-hand of "Google working jointly with XXX", and in
| the vast majority, Google-side doesn't spend much engineering
| time on those issues. I completely agree this is not an
| objective point of view. This can hardly be proved, shown or
| explained, so I have no issue with you not taking my word for
| it. Hopefully if other people join this project, there might
| turn out /some/ people that you do trust?
|
| > And sure, at that point Android was more popular than the
| BlackBerry OS. But this actually demonstrates healthy
| competition. I had a Blackberry for work, and so did all my
| coworkers. Blackberry was the dominant mobile platform once.
|
| I wouldn't exactly call the replacement of BBOS by Android a
| "healthy competition", when the main reason Android won was
| that it was an OS completely free of charge, paid for by
| another recurring stream for the company. (I'm not saying
| Android was worse than BBOS, that I have no idea, )
|
| > Through complacency and poor decision-making, they stopped
| innovating and competing. And thus, allowed new products with
| zero installed base on day one to come in and take their
| market.
|
| That's irrelevant, and belongs to opinions.
| snowwrestler wrote:
| The iPhone came out before Android, was more expensive than
| a Blackberry at first, but started taking share from RIM.
| It also caused the Android project at Google to reset
| (their initial phone was similar to a Blackberry before the
| iPhone launch).
|
| RIM's complacency and flat-footed response to the iPhone
| has been very well covered, and can be Googled. By the time
| they were trying to partner with Google, it was already too
| late for them. Android is not what killed the Blackberry.
| oautholaf wrote:
| Not reset, reprioritize. Fred Vogelstein only talked to
| one source who was on the Android team for his book, and
| that source may have had their own agenda.
|
| Other sources, such as Chet Haas's book, make it clear
| that what became the G1 was already on the roadmap. It
| was just prioritized.
| mindslight wrote:
| Except this assumption that there can be only a few
| winners taking all and the rest end up "killed" is
| exactly what effective anti-trust would prevent. Imagine
| the possibility where Blackberry kept making devices that
| fit their niche of hardware keyboards, running Android,
| and selling them to their established customers.
|
| The elephant in the room is the heavy natural monopoly on
| software compatibility/interoperability, and the above
| thought experiment only makes sense because Android is a
| purportedly open platform.
|
| Effective tech anti-trust has to work around _that_ and
| not merely police behavior aimed at restricting
| competition. Modern tech anti-trust should be focused
| around mandating open access to proprietary systems (for
| starters, anything a web user can do, a program running
| on the user 's behalf should be able to do), and privacy
| legislation to make it so that customers have to be
| earned rather than everyone being treated as a data
| subject by default.
| VieEnCode wrote:
| Absolutely, especially as it feels like the "competition is for
| losers" people are completely running the show these days.
|
| Do it and post it on here. Just be prepared to be flagged a
| lot.
| enos_feedler wrote:
| Isn't the whole idea that you would build something new to
| escape the competition of the current monopolies and succeed?
| "competition for losers" might be running the show, but it's
| also the pump in the cycles of disruption. It should always
| be running the show.
| jollofricepeas wrote:
| Have you considered maybe reaching out to Matt Stoller?
|
| It seems what you're envisioning has a ton of overlap with his
| work covering monopolies.
|
| I'm sure you two could work some magic together.
|
| https://mattstoller.substack.com/
| brookst wrote:
| I'd like to encourage you to advance the project, but with
| perhaps less of an ideological "this will prove X" slant.
|
| I think it would be very interesting to explore the boundaries
| of monopoly, and to look at cases where monopolies are probably
| a good thing.
|
| For instance, trademarks are a monopoly, but I don't think many
| of us want any company to be able to co-opt brand names. That
| seems pretty clear.
|
| Getting less obvious, IP-protected interfaces like GoPro mounts
| or those dumb Kureig coffee pods. Nobody likes those
| proprietary interfaces, and they do give monopoly control, but
| are they economically bad?
|
| And how about console games, where all of the makers subsidize
| low Hw margins (therefore higher sales) with monopoly control
| and a cut of game publishing. Would the market be better if
| that was prohibited?
|
| It's going to be pretty easy to dunk on obviously harmful
| monopolies. It might be more interesting to explore more
| nuanced cases.
| phh wrote:
| > I'd like to encourage you to advance the project, but with
| perhaps less of an ideological "this will prove X" slant.
|
| Well, my current conclusion with my post is that wording is
| very very hard :-). What I said is "I want to show small-ish
| negative impact of a big tech monopoly". It will not prove
| it's all bad, even though it'll only give examples of where
| this is bad
|
| > I think it would be very interesting to explore the
| boundaries of monopoly, and to look at cases where monopolies
| are probably a good thing.
|
| Let's just say that the current tendency is to think that
| monopolies are fine, and I'd like to help reverting that. Yes
| your examples are worst discussing, and I have some of my
| own.
|
| For instance, I definitely acknowledge that Android's
| monopoly helped whole unrelated sectors. But I also believe
| that innovation would be much better served if Android was
| opensource-in-spirit and maintained by something like the
| Linux Foundation.
|
| > It's going to be pretty easy to dunk on obviously harmful
| monopolies.
|
| If it was, they would already have been ruled illegal? In
| Europe, I can't really name any "obviously harmful
| monopolies"
| xg15 wrote:
| I want to ask, would you argue the same about a blog that
| showed the negative impacts of state-owned vs privatised
| infrastructure?
| version_five wrote:
| If you haven't already looked at it, Canada is a great case
| study and cautionary tale in monopolies and their ills. Look at
| both our consumer ecosystem (pricing, variety, and service) a
| well as innovation and industry, and at every turn you will
| find an economy optimized for monopolies to accumulate money at
| the expense of regular people.
| omginternets wrote:
| If the research is good, you would have me as a subscriber. I
| sincerely hope you decide to do it.
| surume wrote:
| When was the last time the government enacted anti-trust laws
| against a large company?
| Barrin92 wrote:
| When I lived in China and talked to VCs about the volatile
| regulatory environment and relatively frequent busting of
| companies one sentence I heard often was always something along
| the lines of, "sure it's annoying but you know what? For the
| occassional billionaire that gets toppled there's a hundred
| millionaires waiting to take their spot, it's just opportunity".
|
| This changed my attitude quite a bit. In particular in the US the
| debate is often framed from the perspective of the very few
| individuals adverserly impacted by anti-trust. "If you break X
| apart, who will want to be the next Y? The answer is quite
| literally: hundreds of people gleefully waiting to take even a
| fraction of that market.
|
| If there is a void to fill, someone will always do it. I think of
| all the measures one can take, anti-trust is one of the least
| disruptive things to the ecosystem overall, because it not only
| doesn't diminish, but strengthens market dynamics.
| AwaAwa wrote:
| It depends on what you like about startups. If it is the
| potential to make millions (which from my experience is 95% of
| the startup folk), then they are very much against anti-trust.
|
| If you are a fan of disruption, innovation and advancing the
| world, you are definitely part of the minority that loves anti-
| trust.
|
| I am personally aware of a few folk in FAANG, that pull ~1-3M a
| year currently and are busy touring asia to set up their
| "startup" with plans to make 10x their current renumeration. I
| cannot see these as people who 'love anti-trust'.
| nickpp wrote:
| If you like start-ups you don't take away one of the greatest
| motivations to create them: the possibility of getting acquired.
|
| If you love competition you don't take away the ability of the
| biggest players to enter "hard" markets and disrupt large
| entrenched incumbents.
|
| And if you are in favor of both startups and competition you
| fight government regulations which corrupt markets, protects
| incumbents and grants monopolies.
| guillem_lefait wrote:
| It looks similar to politics. A new candidate have to bring
| something on the table: new ideas, new faces, new horizon whereas
| if an in-place politician is interested in being re-elected, he
| probably wants to show how great he was and keep its base happy
| enough to have high retention.
|
| Maybe you seek rent when you have non negligible costs to
| maintain past (think maintenance and tech debt)
| JumpinJack_Cash wrote:
| Stuff like unnecessary anti-trust is how you end up with a 1500$
| phone which is completely locked and that you cannot charge while
| listening to music at the same time.
|
| While we could all be enjoying a Windows phone whose OS could be
| freely torrented and installed by individual users with Fortune
| 500 companies subsidizing the whole experience.
| AtlasBarfed wrote:
| If you were alive in the 1990s, you'd recall the great religion
| of the free market.
|
| That language has disappeared from the political discourse,
| because almost all markets are at best cartels, at worst outright
| monopoly.
|
| Antitrust died with the Microsoft trial, an open and shit case
| with blatant public statement and evidence galore, and the court
| system failed us, likely by design.
|
| Best you can hope for now is denial of merger.
| college_physics wrote:
| Start with changing the name. Anti-trust evokes a negative vibe,
| pushing back on success, politics of envy etc.
|
| In reality the policies we talk about are the proactive nurturing
| of a healthy economy. Systems thinking instead of systemic
| capture. Diversification as a fundamental risk management
| strategy. Keeping them small to keep them honest. Fostering
| competition that will unleash creativity. Etc.
|
| I have a strong (but hard to prove) feeling that had the past
| decades in tech not been so dominated by a tiny number of
| conglomerates, the contribution of tech to society would have
| been materially much more impactful.
| [deleted]
| amelius wrote:
| How about "pro-competition"?
| college_physics wrote:
| Competition is still a somewhat negative term. Everybody pays
| lip service to it but psychologically nobody actually wants
| it.
|
| "Pro-innovation" maybe?
| philwelch wrote:
| Big tech conglomerates are not especially popular and I don't
| think the term "anti-trust" is going to evoke sympathy for
| them.
| connor11528 wrote:
| Agree about the naming of antitrust being problematic. It comes
| from the trust busting days. I prefer talking about building a
| "decentralized economy" that stands in contrast to an economy
| controlled by concentrated corporate power
| diordiderot wrote:
| This is one of those hedonic treadmill words. Whatever you
| choose will have a bunch of 'non-profit', think tank,
| 'institute', Murdoch press releases nudging negative
| connotations.
|
| It's illegal to teach critical reasoning in Texas. Until things
| like that get fixed no name change will immunize the public
| from corporate propaganda
| jon_adler wrote:
| Can you reference what you mean about being illegal to teach
| critical reasoning in Texas?
| burnished wrote:
| Oh, looks like it was just the dominant political party
| that wants that.
|
| https://www.washingtonpost.com/blogs/answer-
| sheet/post/texas...
| ClumsyPilot wrote:
| > Critical thinking challenges fixed beliefs... hmm..
| That's exactlt what its for!
| langsoul-com wrote:
| More legal effort should be put into big companies coming in and
| crushing start ups.
|
| They usually build something and price it at a loss, because big
| companies can afford that till start ups go under.
|
| Or unfairly using their services to hinder competiton.
|
| Amazon is a big prepetrator of this. There was a smart oven, sold
| on Amazon. Amazon was also an investor, who made their own into a
| basics product at a loss.
| lkrubner wrote:
| Perhaps this happens on a diversity of time frames and in a
| diversity of contexts? The French historian Fernand Braudel
| says that during the 1600s the European merchants in India
| deliberately bought more than they sold, so that Europe was
| running a trade deficit with India for all of the 1600s. But
| offering so much money to India meant that India opened up to
| European merchants, who were then able to turn the situation
| around during the 1700s. Once they had been invited into every
| city and every kingdom in the sub-continent, the European
| merchants were then able to use their international networks
| gain an advantage over the local merchants. And then they added
| even more pressure by hiring local mercenaries to enforce their
| will with military power, thus beginning the conquest of India.
|
| But the pattern seems to repeat on so many levels, and at so
| many different time frames: pump in money in a manner that
| seems generous, so as to gain control of a market. Then use
| that control to maximize one's own profits.
|
| history from Perspective Of The World:
|
| https://www.amazon.com/Perspective-World-Civilization-Capita...
| fallingknife wrote:
| A trade deficit is not the same as a loss. It means that the
| UK ended up with more goods and the Indians ended up with
| more currency. If the goods are more valuable than the
| currency, it's still an economic gain for the UK. The US runs
| a trade deficit every year, and is far from going broke.
| HPsquared wrote:
| And if you count the currency as an "export", it's not
| really a deficit at all - just exporting currency.
| franga2000 wrote:
| Many startups do the same thing to established industries. They
| burn VC money to "disrupt" a field, then when it's time to make
| money, they hike prices. But by then, there's no competition
| left.
| TeMPOraL wrote:
| I started to use the term "fracking" for this[0], because
| that's more-less what the likes of Uber, AirBnB, Doordash,
| etc. do to their respective markets: they pump billions of VC
| money like it was a fracking fluid, in order to _crack_ the
| market, pump out all the value, and leave behind a toxic mess
| for the locals to deal with.
|
| While I agree that startups _can_ disrupt the big monopolies,
| past Uber, I now find them just as dangerous as big companies
| to the customers and the societies they live in. Perhaps more
| so, because big companies don 't have to _disrupt_ anything
| to extract their rents.
|
| I feel startups are not like they used to be. Or maybe they
| always were what they were, and I became disillusioned only
| recently. Either way, today, this is a well-developed process
| of wealth transfer. In a sense, startups aren't something
| opposite to big companies - they're _the means_ big companies
| use to frack an existing market and pump out all value.
| Startups are an integral part of the market ecosystem now,
| and from the POV of those at the top, it 's arguably a
| symbiotic, not parasitic relationship.
|
| --
|
| [0] - I used to call it "strip-mining a market for all its
| worth", pointing at fast extraction of value with no concerns
| about sustainability, but I think "fracking" is better, as it
| also evokes the image of first cracking the market by a
| sudden, focused infusion of seemingly infinite free money.
| b1zguy wrote:
| I did the term 'fracking' in this context. I'll start using
| it.
| pessimizer wrote:
| It's just dumping to me, like heavily subsidized US corn
| exports into Mexico after NAFTA.
| spacemadness wrote:
| I love the turn of perception here that's being
| acknowledged out loud finally. I have a feeling HN would
| have buried this sentiment around 8 years ago a lot of
| folks here were busy fracking as hard as they could. Our
| capitalist system in America in general feels exceptionally
| worn out with guards placed at the gates to any real
| innovative work.
| cudgy wrote:
| One could also call it a "cash bonfire"
| TeMPOraL wrote:
| I'd wish. If all that happened was some people setting
| billions on fire, it wouldn't be _that_ bad. The fracking
| analogy highlights that 1) those billions are used to
| eviscerate markets and industries, 2) it 's a dirty
| process leaving a lot of collateral damage, and 3) the
| parties doing it are actually making a profit, so this
| process is self-sustaining (as long as there still are
| markets to frack).
| cudgy wrote:
| Agreed. There are definitely adverse effects to the
| markets from these practices.
|
| Could it be that the conglomeration of the startups
| controlled or at least heavily influenced by a few
| dominant VC firms essentially creates an oligopoly in the
| tech startup world? In other words, these startups, which
| behave like monopolies by razing certain markets with low
| prices while losing money, are small tentacles of the
| huge vc firms that are funded by large stockholders of
| the FAANG oligopolies.
| thefaux wrote:
| > I feel startups are not like they used to be.
|
| I've had a similar epiphany over the last five years or so.
| Once you take money from the VCs, you are essentially just
| an R&D department of the VC collective with perhaps a bit
| more autonomy than you might have in a BigCo but you are
| still heavily constrained by the demands of your funders.
| This is nothing like the romantic two guys in a garage with
| a great idea taking on the world narrative that we've been
| fed for decades.
| echelon wrote:
| That is in theory better.
|
| - the actual innovators are rewarded
|
| - innovators have more skin in the game
|
| - innovators live or die by their execution
|
| Not so with the monopolies.
| TeMPOraL wrote:
| Yeah, but we're now seeing the same problem with
| "innovation" as we've been suffering from wrt. "profit" for
| the past several decades - that is, neither "profit" nor
| "innovation" are a function of being nice and good for the
| customers, the society or the world. They are at best
| somewhat aligned - but once all those profitable/innovative
| and also good ideas were picked, we're left with pursuing
| profit/innovation that has negative impact on the world.
|
| And so, the main innovation of the most successful startups
| in the last ~decade was in ways of breaking into and
| destroying (er, "disrupting") markets that before were just
| fine - not perfect, but at least _sustainable_.
| echelon wrote:
| Uber, for all the hate it receives, is significantly
| better than taxi service.
|
| AirBNB, by the same argument, put offline-only vacation
| rental services on check.
|
| Neither of these is models is going to go away now. The
| companies may have to deal with debt, may need to
| increase unit costs, and may have to conduct layoffs, but
| they fundamentally changed their markets and will remain
| the dominant players.
| grantsch wrote:
| What about 6 months later when competitors arrive?
|
| Not all markets are winner takes all or even close to it
| TeMPOraL wrote:
| You mean competition by more VC subsidized startups?
|
| The competition (or sometimes faux-competition) lasts until
| investors get bored, then the unsustainable startups slowly
| go away (often extracting more money from the public on
| their way out, by means of an IPO), leaving a broken market
| that needs to be rebuilt, if it's possible at all.
| dalbasal wrote:
| Anti-establishment startups becoming their parents are instances
| of a very common pattern.
|
| Gods murder their primordial parents. Republicans overthrow kings
| and crown a Napoleon. The liberator-opressor complex litters
| history.
|
| The first step is to notice the cliche and expect it. The
| phenomenon exists. Next step, tread lightly. Any reason you think
| up is too specific. Your reason why Microsoft became IBM under
| Ballmer does not explain why Cronus castrated Uranus or why he
| wanted to eat baby Zeus.
|
| That said... I think "you are what you eat" is inescapable long
| term. Wikipedia would not have been wikipedia if it had been a
| startup, IPOed, etc. If you are a giant software company deeply
| embedded into locked in customers across all industries... you
| will have IBM-ish tendencies. Ballmer is Thanos, inevitable.
| vouaobrasil wrote:
| I think this article's fundamental premise is wrong. To quote:
|
| "The core reason that companies generally, and tech companies
| more specifically become the very sort of corporation that they
| once hated and took on with vigor is the need to keep growing,
| forever."
|
| Small startups and companies don't hate large corporations. If
| they take on large corporations with vigor, it is only to take on
| a segment of the market, not the corporation itself. The only
| purpose of startups is to maximize profit like everyone else is
| doing, and if they can do that by being bought out or by becoming
| behemoths, of course they will do it. If anything, people in
| startups LOVE corporations because when they're bought out, they
| can retire early with a ton of cash.
|
| The people who dislike large companies and who should favour
| anti-trust legislation are consumers. But founders of startups?
| Nah, they operate on the same profit-maximizing principles as the
| CEOs of big tech. It's all about money.
| ncallaway wrote:
| The article doesn't say if you _are_ a small startup you should
| like anti trust law.
|
| It says if you _like_ small startups you should like anti trust
| laws.
|
| Those are separate claims.
| JumpCrisscross wrote:
| > _if you like small startups you should like anti trust
| laws_
|
| Small start-ups which cannot grow are not start-ups, they're
| small businesses. This article is, if genuine, an anti-growth
| pitch. It ensconces the _status quo_.
| vouaobrasil wrote:
| That is a good point, and I think there is nothing wrong
| with anti-growth. It should be something we all aspire to.
| JumpCrisscross wrote:
| > _there is nothing wrong with anti-growth_
|
| Zero growth means zero-sim games. Pre-modernity. Sucks to
| be poor if you're born into that world.
| lisper wrote:
| That depends on how you measure growth. If you measure it
| as total wealth then you are right but if you measure it
| as wealth per capita then you can grow for a lot longer
| before you hit a wall if you keep the population under
| control.
| JumpCrisscross wrote:
| If aggregate growth is zero, the system is zero sum. Per
| capita doesn't matter.
| lisper wrote:
| > If aggregate growth is zero, the system is zero sum.
|
| No, it isn't.
|
| > Per capita doesn't matter.
|
| Of course it does. If all of the actors in the system
| perceive themselves to be better off then it doesn't
| matter is there is no actual underlying growth. This can
| happen, for example, through trade. If I have something
| you want and you have something I want we can create
| wealth literally out of nothing simply by exchanging
| those two things.
|
| Or, if you have something I want, and you die and I
| inherit that thing, then I am better off than I was even
| though there has been no actual underlying growth.
| JumpCrisscross wrote:
| > _> If aggregate growth is zero, the system is zero sum.
| No, it isn 't._
|
| Yes, by definition.
| lisper wrote:
| Only if you use a vacuous definition of "growth" that
| fails to distinguish between an actual change in the
| underlying physical situation and a change in people's
| perceptions.
| JumpCrisscross wrote:
| > _if you use a vacuous definition of "growth" that fails
| to distinguish between an actual change in the underlying
| physical situation and a change in people's perceptions_
|
| No, this is fundamental game theory. Independent of what
| you're measuring, if it isn't growing, the game is zero
| sum. By definition. Of course if _something else_ is
| growing _that_ game may not be zero sum.
| DangitBobby wrote:
| Unless there are fewer people. Or you become more
| efficient.
| vouaobrasil wrote:
| Anti-growth doesn't mean zero growth. I meant it more in
| the sense of being against unbridled technological
| innovation, which is a lot different than growth in any
| possible way.
|
| For example, a society could grow in other ways such as
| being restructured or even using less.
| JumpCrisscross wrote:
| > _a society could grow in other ways such as being
| restructured or even using less_
|
| This is not anti-growth. We generate more GDP per unit of
| physical resources or energy than before. That is good.
| That is still growth.
| vouaobrasil wrote:
| If you read the article, it says specifically (such as in the
| quotation I provided), that startups themselves should like
| anti-trust laws.
| ncallaway wrote:
| The quote you provided just did not say specifically that
| startups should like anti-trust law.
|
| Is there another place in the article that says it
| specifically? I didn't see one on a quick second read, but
| I could've missed it.
|
| For most of the article the focus os on consumer surplus
| relative to rents sought, so the article seemed pretty
| clearly to be describing consumer preferences to me
| rakkhi wrote:
| This is classic putting the process over outcome.
|
| The point of anti trust is not to allow more competition. The
| point is to stop monopolies that hold customers captive, charging
| monopoly rents (high prices) and stop innovation.
|
| There is a classic paper by Alan Greenspan on the breakup of
| Standard Oil [1]. He makes the point that supreme court was
| wrong. The breakup was just for competitors, not for the benefit
| of customers. This is the worst of capitalism where big business
| use the government to fight competitors.
|
| This is the applicable case with today's tech giants. They are
| providing often a free product to consumers and continue to
| innovate. The low barriers to entry provided by digital goods and
| the internet mean that startups have never had it better. The
| last thing that is needed is government involvement to break up
| these companies for "anti trust"
|
| [1] http://www.polyconomics.com/ssu/ssu-980612.htm
| tluyben2 wrote:
| In my experience (so anecdotal) there is a lot of weird reasoning
| going on by founders, akin to 'I vote for low taxes and against a
| more socialist system while I am poor as dirt, because one day I
| will be rich and then I would've shot myself in the foot'. New
| founders reason it will benefit them when they are huge, while,
| like in the voting example, that probably will never happen.
| jon_adler wrote:
| Isn't this built into the American Dream ethos and a product of
| individualism at the forefront of American culture?
| eru wrote:
| That's a bit of a weird article: the author seems to argue that
| monopolies etc are bad, but then makes the mental leap and
| assumes that just because there's something called 'anti-trust
| legislation' that it'll help.. The author himself almost grasps
| the problem:
|
| > [...] Oracle became a company more famous for its legal
| department than new innovation.
|
| Just like most other regulation 'anti-trust' is just another
| weapon that those with a big enough legal department can wield
| against the competition.
|
| We need more competition, not less. Eg we need to allow Wal-Mart
| to open bank accounts.
| lotsofpulp wrote:
| >Eg we need to allow Wal-Mart to open bank accounts
|
| Walmart is allowed to offer bank account in the US. They can
| even buy an existing small bank and spin it up tomorrow.
| routerl wrote:
| > makes the mental leap and assumes that just because there's
| something called 'anti-trust legislation' that it'll help
|
| I'm not trying to defend the author.
|
| But there's no "mental leap" here; that's exactly the real-
| world, observable effect of anti-trust legislation _when it is
| enforced_. And what we 're seeing now with the FTC is precisely
| the enforcement, for the first time in decades, of existing
| anti-trust legislation.
|
| If your point is "legislation isn't enough", you're right, but
| trivially and uselessly right. Of course the real effect comes
| from enforcement, just as making murder illegal but then not
| charging and arresting murderers would, obviously and
| trivially, not decrease the rate of murder.
| ekianjo wrote:
| > But there's no "mental leap" here; that's exactly the real-
| world, observable effect of anti-trust legislation when it is
| enforced.
|
| The problem is that it's selectively enforced, which makes
| the legislation dubious at best. There are hundreds of
| monopolies or quasi-monopolies out there that will never be
| challenged.
| connor11528 wrote:
| Agree there needs to be more antitrust enforcement across
| the board. This is a movement that's growing and takes
| time. There has been decades of non-existent enforcement
| and even encouragement of monopolies by the government.
| It's past time the government break up some of these
| behemoths
| avianlyric wrote:
| That's an issue with enforcement, not the legislation
| itself. There's no way to write legislation that prevents
| its abuse through selective enforcement. You have to
| address the abuse itself via strong government
| accountability.
|
| Not having anti-trust legislation isn't going to increase
| competition. Say you need more competition, also isn't
| going to increase competition. Real markets naturally tend
| towards monopolies, only governments putting a thumb-on-
| the-scales to prevent monopolies keeps competition alive
| long term. Something the US seems to have forgotten in the
| past couple of decades.
| bborud wrote:
| Observation: there exists a few companies whose market
| positions are very close to monopolies and where the
| government isn't doing anything that has actual effect.
|
| I don't think it is an issue with enforcement alone, but
| with laws that do not sufficiently obligate enforcement.
| Such laws are not created because politicians are
| corrupt.
|
| Concluding that regulation dosn't help when what we're
| observing is non-enforcement is a bit disingenuous. If
| I'm being charitable.
| avianlyric wrote:
| If you're talking about the US, then the laws absolutely
| exist. They were created to break up companies like Bell
| and Standard Oil, and are extremely effective, _when
| used_.
|
| But they haven't been used for decades, because
| regulators have _decided_ not to use them. There are of
| course many reasons for that, including political
| pressure and regulatory capture. But to say the laws
| don't exist, is just wrong. They exist, they just haven't
| been used for a long time.
|
| Also writing law to _obligate_ enforcement is
| tautological. All law is meant to be enforced. Who's
| gonna enforce the enforcement of enforcement laws? And
| why would they not be subject to same pressures to under-
| enforce as well?
|
| > Concluding that regulation dosn't help when what we're
| observing is non-enforcement is a bit disingenuous. If
| I'm being charitable.
|
| Why do think I came to that conclusion? My comment argues
| quite the opposite.
| bootsmann wrote:
| > Real markets naturally tend towards monopolies
|
| Would really like to see a credible source for this
| statement. There are industries where this happens
| (natural monopolies which is stuff like raw commodities,
| as competitors cannot mine at the place where you mine)
| but I don't think this holds in general at all.
| mrkurt wrote:
| That's not really a problem. It sounds like a problem, but
| enforcement has to start somewhere. The FTC is targeting a
| broad range of markets: https://www.ftc.gov/news-
| events/news/press-releases
|
| Some of the purpose of antitrust enforcement is to
| establish a baseline to "warn" other companies. They've
| only really interfered with a handful of tech acquisitions
| in the last year, but it sure sounds like everyone doing
| M&A is being very careful right now.
|
| Sometimes a credible threat of enforcement is enough.
| tbran wrote:
| From what I gather from reading Matt Stoller's newsletter on
| monopolies, there has been little meaningful enforcement of
| antitrust for a very long time.
|
| Did you know there's a huge cheerleading monopoly [0]? There is
| essentially one company that runs the competitions, sells the
| uniforms, and sells the equipment. A quote from the article:
|
| > The most interesting aspect of this case are not the legal
| arrangements, but the fear that I found in interviewing people
| in the cheer world. Virtually every interview I did was under
| the condition that the person remain anonymous for fear of
| retribution. Often people would email me saying that I had no
| idea the depths of the scandals in the sport.
|
| How about monopolies in port-a-potties and MMA? [1]
|
| The alternative seems to be that you do...nothing? And just let
| them keep consolidating a market? That can't be good.
|
| Antitrust needs enforcement _so that we can have competition._
|
| [0]: https://mattstoller.substack.com/p/this-is-not-a-
| democracy-i... [1]: https://mattstoller.substack.com/p/a-land-
| of-monopolists-fro...
| connor11528 wrote:
| The purpose of antitrust law and merger review and the FTC in
| general is to preserve and promote competition. It's the
| government's legal department against FB, Google, Amazon,
| Microsoft's legal and lobbying departments
| [deleted]
| echelon wrote:
| > We need more competition, not less.
|
| To posit a real world example, when the predator overkills, the
| ecosystem dies.
|
| To cite just a handful of examples:
|
| https://blogs.scientificamerican.com/extinction-countdown/wo...
|
| https://en.wikipedia.org/wiki/Surplus_killing
|
| Top down pressure on monopolies keeps competition healthy and
| active. A neverending arms race, which is good for innovation.
| It prevents lethargy, malinvestment, stagnation, and mere
| taxation.
| ianstormtaylor wrote:
| Do you have any sources to back up your claim that anti-trust
| is something that's most often wielded by big companies against
| smaller ones?
|
| Because it sounds highly unlikely to me.
|
| The whole point of anti-trust is to provide a check on only the
| most massive companies that over rent-seek their market and
| cannibalize competitors, before the startups are able to get
| off the ground, literally crushing competition.
|
| Anti-trust fosters competition by design.
| einpoklum wrote:
| > the anti-establishment startup world
|
| A "start-up" is a commercial company, intending to make money by
| selling products and services, and typically invested with large
| sums by individual or institutional capitalists.
|
| In other words, it is the opposite of anti-establishment; at
| most, it might be antagonistic to the established providers of
| the relevant products or services.
| dalbasal wrote:
| I don't disagree with anything specifically, but think this is
| naive.
|
| First, startups are deeply intertwined with monopoly.
| Financially, a startup is a small chance of huge success. The
| ultimate win scenario is _becoming_ a monopoly like Microsoft or
| Amazon did. The next best thing is being acquired by one. If they
| can 't become monopolies, there's a lot less reason to fund,
| found or work at a startup.
|
| A startup that plans to participate in a competitive market is
| low potential. Making great apps isn't a good startup goal. A
| proper startup goal is to make the app _store._
|
| Do startups, as we know them, even exist without monopolies?
|
| Second... Abstract economics is abstract. Creative destruction
| doesn't exist in the way that economic theories want it to. It's
| almost non-existent at the enterprise/monopoly level. How many
| S&P 500 really become defunct? Creative destruction doesn't exist
| here unless you really squint. It exists in some places.
| Restaurants rise and file rapidly. So do barbers and many types
| of small business. Creative destruction definitely happens to
| startups. Most die.
|
| Overall though, if take a cold empirical look... Creative
| destruction is orders of magnitude stronger or weaker, depending
| on sector. It's effectively a non existent dynamic for Microsoft,
| Loyds & such. You could argue that creative destruction is out of
| control in other sectors. The theory though, the theory abstracts
| all of this away. A firm is a firm. Parts manufacturer, energy
| supplier, record label or software company. The gradients of
| reality outweigh the abstract description.
|
| This is true about a lot of economic concepts. "Normal" economics
| like market determined prices, broadly representing marginal
| costs in an industry... those are inapplicable concepts to most
| tech giants. They're not really applicable to government adjacent
| industries, creative industries, financial industries...
|
| I don't mean that you can't use "normal economics" to describe
| these industries. I just mean that it's less describing a textile
| or commodity electronics manufacturer this way.
|
| One striking difference between many monopolies of today and
| those of the past is the alternative. The alternative to Twitter
| or Facebook is simply "no Twitter or Facebook." If Toyota stops
| making cars, either someone else makes more or everyone has less.
| If facebook stop making facebook... social media is not scarce.
| People will still consume as much social media as they want.
|
| This isn't like Bell. A court will never have to analyze
| Facebook's business in order to reorganise it into viable smaller
| companies.
| LatteLazy wrote:
| This whole article is such a mess, I don't know where to start...
| First, all companies try to capture consumer surplus. Second, how
| are ads "great value for everyone" but ads added later are "rent
| seeking"!? Third, Anti Trust will change none of this. In fact a
| company without a reliably monopoly has no option but to capture
| more surplus and do it sooner. Fourth, OP doesn't know what a
| zombie company is (one who's debt interest totally consumes it
| profit, so it exists only because of cheap credit and is not
| actually economically productive). Op is just throwing more "shit
| at the wall to see what sticks". Fifth, he seems very confused
| about corporate "profit" figures. Revenue and costs are fixed,
| real numbers. Profit is just made up. And since you pay taxes on
| profit, it's usually much lower than one would expect. Hence why
| Amazon is insanely large and successful but never actually makes
| any money. I dislike this, but I also know that as soon as anyone
| starts talking about a corporations profits they're making things
| up. Also, if GCP does close (because it's apparently so
| unprofitable) then that just makes Amazon (AWS) all the more
| dominant in the industry (so much for anti-trust). Plus how is
| any "start up" meant to get a few billion USD together to enter
| that market? And isn't a market with the largest player at 35%
| and no one making a profit (lol) exactly how competition is meant
| to look? Not to mention the 1000s of start ups that reply on
| these services to save them tonnes of cash!?
|
| I am no expert on corporate structures, market structures, anti
| trust, accounting or economics (or anything else OP apparently is
| AND is the only one who sees this). But I know enough to know
| it's complex and there are no easy answers and anyone saying
| there are is either ignorant or lying.
| samwillis wrote:
| I agree with much of this, I would like to highlight one thing in
| particular:
|
| > The bigger a tech company gets the worse it becomes at
| providing consumer and customer surplus, because it needs to eat
| that margin (of a sort) to keep growing. Growth demands that tech
| companies eventually consume that which first engendered them
| good will.
|
| When that comes to Google, I think they are talking about "eating
| the margin (of a sort)" of the good experience for end users,
| people searching. But the reality is they are actually eating the
| very real margin of the advertisers, their "actual customers".
|
| In the last ten years, through the excessive ingestion of data
| about the advertisers businesses, Google has sought to expand
| their bottom line by extracting as much revenue from advertisers
| as possible. The advertisers margin has become Google's target
| revenue. If (nearly) all advertising is via Google, their only
| way to grow that revenue is by extracting more of the advertisers
| margin.
|
| When you advertise on Google (and FB for that matter) you now
| have to transmit to Google's algorithm all data about all
| transactions on your site. This is sold as training the algorithm
| to enable the targeting of customers. But what you are in fact
| doing is telling Google everything about your revenue, they know
| exactly how much you are receiving from all sales. The algorithm
| is designed to maximise the extraction of the advertisers margin,
| to squeeze it as much as possible.
|
| This is going to come back and bite them. I believe advertisers
| are going to fall out of love with Google, if they haven't done
| so already.
| samwillis wrote:
| Something I would like to add to my original point, and why I
| think this is "anti trust". During the last 10 years there has
| been a proactive move to remove controls and visibility from
| advertisers, moving towards a black box algorithm. At the same
| time Google have a (near) monopoly on search advertising. The
| supposed "auction" between advertisers is closed book and
| controlled by secret algorithms.
|
| Google are the ultimate beneficiary of the auction, but don't
| show how it operates, what the other bids were, and how they
| reached a value for the placement.
|
| On top of that as the advertiser you have been forced to give
| Google your full revenue numbers in order to play this game.
|
| In my opinion Google needs breaking up, they should not be able
| to operate as both the marketplace/exchange _and_ the vendor
| when they have a monopolistic position. The advertising
| marketplace /exchange should also be regulated in the same way
| as financial exchanges.
| smoldesu wrote:
| > they should not be able to operate as both the
| marketplace/exchange and the vendor
|
| This should just be codified into law, regardless of
| monopolistic intent. Any vendor that uses their position of
| power to limit the freedom of their customers should be hit
| with the full extent of the law - starting with FAANG, and
| then working our way down from there.
| jimnotgym wrote:
| I think you are absolutely right. Even on our small ecommerce
| presence we are seeing it is harder to get a return from Google
| shopping. A decade ago it was a no brainer, and now it is a
| money pit. We are seeking instead to expand our influencer
| involvement.
| klabb3 wrote:
| Y'all worried about Google. But ads + search/recommendations is
| a lost battle, that's just the status quo - the devil we
| already know.
|
| I'm worried more about Apple. Why? Because Apple has been a
| _counterweight_ to ad-tech. They've been able to champion
| privacy and UX for actual end users, they have literally been
| forced to care. But now they're expanding into ad-tech as well,
| that's terrifying; there is literally only Google left, and
| they're full-on ad-tech already. So that means mobile (by far
| the biggest and most universal computing platform worldwide)
| will have NO customer champions. (Caveat Apple treats customers
| bad already yadda yadda, but this point still holds). This will
| be a truly "advertiser first" world.
|
| I'm no antitrust expert, but I can understand a company
| maximizing its core business (or "do one thing really well"),
| and I can even respect pure ad-tech. What truly sucks though,
| is these "expand into every crack of the market" faceless mega-
| behemoths that these companies all become. (In McKinsey speak,
| I believe this horror is known as vertical integration.) This
| _always_ sucks for the consumer.
| l33tman wrote:
| As a side-note, increasing margins is not the only way to gain
| revenue, you can increase the market as well. This is what they
| have been trying all along with all their parallel products. It
| was very successful with Android, less so with their self-
| driving car (that could have increased the market by letting
| drivers consume internet content and ads during the drive
| instead of driving).
| saghm wrote:
| I've always found it pretty weird how common the idea is that
| companies _need_ to keep growing indefinitely, regardless of
| the size they've reach. If a company is sustainably making a
| profit (i.e. makes more money than it needs to spend to keep
| running) and will continue to for the foreseeable future, why
| do they need to grow their revenue even higher? It seems like
| the expectation is they need to do this so that the stock price
| can go up, but if people only buy the stock to sell it when
| it's worth more due to being larger, what's the actual
| connection between the stock price and the amount of money the
| company makes other than everyone just agreeing to pretend
| there's one? Ostensibly the reason stock is worth anything at
| all is that it could eventually yield dividends, but there's no
| reason that a company already making a profit can't just start
| paying dividends regularly without needing to ever grow any
| larger.
| refurb wrote:
| No industry is stagnant. Consumer demand changes, technology
| changes, competitors changes.
|
| The car industry is a great example. If you're not growing
| (in the most basic sense - new products, new markets), you're
| dying.
|
| That's even more true in tech.
| [deleted]
| evo wrote:
| I suspect in reality the increasing compensation of the
| executive suite in stock, while intended to alleviate the
| principal agent problem, means that it's substantially more
| remunerative for leadership to try to goose their stock price
| by whatever means possible within their tenure than to steer
| the ship in a growth-agnostic fashion. Doubly so with modern
| big tech companies where RSU growth can fuel a big chunk of
| your salary costs for your tech department when your company
| is on the rise, but scare everyone off when the reverse is
| true.
| magic_hamster wrote:
| Some people will say that companies need to grow to increase
| the bottom line, but my experience is that growth is actually
| a byproduct that indicates the health of your business rather
| than the actual goal. Growth is a result of competition, when
| new markets emerge, when competitors come up with better
| products, there is an opportunity to increase your market
| share and take in more revenue. Assuming you don't leave
| money on the table, it's understandable that you will compete
| and if you're doing well you will grow.
| ekianjo wrote:
| growth means constant investment. The day you stop growing,
| your investment is capped or much more constrained, and it's
| only a matter of time until your company is over.
| Radim wrote:
| The standard response is evolutionary:
|
| If you leave profit (growth, resources) on the table, someone
| else will pick them up and beat you with it.
|
| The supposed analogy is biological. You may choose to check
| out of the always-do-more-with-less rat race, or even out of
| existence completely. But that choice will help populate the
| world with "not your successors". Similar with companies:
| your _" sustainably making profit"_ premise is incompatible
| with _" willingly foregoes growth / change"_ - at least in
| the long term, due to competition.
| wizzwizz4 wrote:
| > _at least in the long term, due to competition._
|
| Assuming there's always some proportion of people who
| choose to do otherwise.
|
| Humans are powerful enough now that, if we wanted to, we
| could _stop this_. It 'd require collaboratively punishing
| defectors, of course - because some humans _are_ greedy -
| but until (and if) we meet aliens, we don 't _need_ to live
| like this, provided we can learn to work together.
|
| It's fortunate, then, that motivated collaboration can
| produce better results than competition. The collaborators
| might be able to win the Last Competition.
| kwhitefoot wrote:
| It seems to me that they need to keep growing because they
| are in reality pyramid schemes with the people (and
| investment institutions) at the top wanting ever larger
| profits. The company gets bigger but the number of people at
| the apex of the pyramid does not.
| roenxi wrote:
| Due to inflation, basically. There is an effect like
| inflation which as far as I know is unnamed, where the credit
| growth & money creation in the economy hits asset prices and
| drives them up at a fast rate (eg, gold has been pretending
| to make real annual returns for the last few decades when we
| all know it isn't changing in value). A company that is
| treading water will still be growing in percentage terms
| year-on-year due to this, so a company that isn't growing is
| actually failing to position correctly vs the credit in an
| economy.
|
| If that inflation wasn't part of the picture, companies
| holding steady would be more acceptable.
|
| Although you wouldn't hear about it in the press; the hot
| companies are always the ones that are growing. There isn't
| much to say about companies that just sit there.
| fragmede wrote:
| Would you mind explaining a bit more than "basically"? The
| money they take in also inflates, so if everyone who bought
| one last year buys another one, sales in dollars should
| increase by the same amount as inflation.
| arka2147483647 wrote:
| A company may not be able to increase prices as much as
| inflation eats. Eg, in 6 percent inflation, if you raise
| prices by 6%, it may result in customers shrinking their
| purchases by equivalent, or even larger amount. So after
| the price hike you could be worse off. That is the reason
| most companies often raise prices slowly in small
| increments over the months or years.
| roenxi wrote:
| If we're talking about sales, then sure that should go up
| by CPI inflation. I thought we were talking about stock
| prices. Same difference either way, steady state is for
| economic losers if the money supply is growing
| exponentially.
|
| Historically "growth" has just been a word for increased
| energy availability. If it is supposed to measure
| something else it is a bit meaningless (if some dude
| plays a game for 2 hours a day, then next year spends 2
| hours a day playing a "much better" game on a faster
| XBox, what does growth as a % even mean? If he spends
| more hours on a game is that growth? These are profoundly
| silly questions to spend time on). The rough thinking is
| we should keep pushing for energy growth until we
| physically can't any more, because that helps poor people
| not starve which is actually important.
| codethief wrote:
| > The rough thinking is we should keep pushing for energy
| growth until we physically can't any more
|
| Not sure that's a good idea, see
| https://dothemath.ucsd.edu/2012/04/economist-meets-
| physicist...
| roenxi wrote:
| Yeah. In the long run we always lose to entropy too. Life
| is about what happens before living is no longer possible
| so we may as well jump as high as we can. At least
| someone gets to enjoy themselves.
| [deleted]
| Folcon wrote:
| I forgot about this, but the point stands, we still don't
| use energy that we collect to achieving the outcome he
| states:
|
| > that helps poor people not starve which is actually
| important
|
| If we generalise that meeting a minimal bar on the
| Maslow's Hierarchy of Needs, then we're still pretty poor
| on that front.
|
| Thanks for the link, having read this, it's a valid
| counterpoint against generally increasing GDP as we
| currently think of it.
|
| However a lot of discussions at present don't hold to
| limiting growth to Earth.
|
| What this means however is up for grabs, it could take a
| very long time to figure out how to practically go
| further than Earth.
|
| It is however probably worth more consideration than
| modern economics would give it.
| Folcon wrote:
| If that's the goal and I agree that's not a bad goal at
| all, we seem to have decoupled that from the outcomes.
|
| Are energy companies even really doing that much to grow
| their energy production? Are we seeing much in the way of
| producers materially investing in increasing their
| production thus flooding their markets in a race to the
| bottom? It feels like a lot of these things have stalled
| out at present, or am I being too cynical?
| luma wrote:
| Inflation isn't the problem, it's investors. As others have
| noted, inflation is a wash for most cases. Investors expect
| regular returns and they sit on your board and they are
| NEVER satisfied.
|
| When you put the world's greediest individuals in charge of
| what your business should do next, don't be surprised when
| the answer is ALWAYS "give us more money".
| lotsofpulp wrote:
| People expect their assets to earn 7%+ per year, both via
| individual retirement accounts and taxpayer funded
| defined benefit pensions. If that assumption is not met,
| then those debts cannot be repaid, which means someone
| (or everyone) has to take a hit on quality of life. This
| is politically unpopular because people get disappointed
| when their expectations are not met.
| luma wrote:
| Your argument here is that rich people expect to continue
| getting richer on account of... already being rich.
|
| I will sleep like a baby if their expectations of
| continued "being rich for no work" doesn't pan out for
| them.
|
| Get a job, slackers.
| lotsofpulp wrote:
| My argument is that a very large proportion of people
| benefit from borrowing from the future (obviously some
| more than others). Enough that it is politically
| unpopular to vote against the government ensuring these
| returns.
|
| For example, taxes are lower today because of off the
| books borrowing from the future via these expected future
| asset valuations, as well as people liking their own
| 401k/IRA account numbers going up.
| chalst wrote:
| > My argument is that a very large proportion
|
| What is the actual proportion?
|
| The proportion you argue is neither here nor there.
| lotsofpulp wrote:
| Whatever the actual proportion is, it is evident over
| many decades, that it is sufficiently large to ensure the
| election of leaders that will backstop asset prices.
| wizzwizz4 wrote:
| > _Whatever the actual proportion is, it is evident over
| many decades, that it is sufficiently large_
|
| Sufficiently- _powerful_. Don 't confuse the two. In an
| ideal world, one would be indicative of the other, but
| history suggests this hasn't been the case. (No comment
| on the contemporary political situation.)
| perryizgr8 wrote:
| Population is growing. Your company's target market is a
| subset of population. Unless your target is a niche that
| nobody new is joining, then your company must grow just to
| maintain status quo. If you sell phones and you're not
| growing, it means you are actually contracting. That's why
| everyone is crazy behind growth. It means your business is
| not dying.
| ViViDboarder wrote:
| Theres that kind of growth, and then the expectation that
| you grow into every conceivable vertical to expand more
| rapidly or support stock prices for an otherwise stagnant
| business.
| jasode wrote:
| _> If a company is sustainably making a profit (i.e. makes
| more money than it needs to spend to keep running) and will
| continue to for the foreseeable future, why do they need to
| grow their revenue even higher? [...], but there's no reason
| that a company already making a profit can't just start
| paying dividends regularly without needing to ever grow any
| larger._
|
| Your comment is common but it implicitly assumes a stable
| steady-state in the business landscape. (E.g. phrases such as
| _" profit _will_ continue to for the foreseeable future,"_)
|
| That type of thinking can work for local businesses (isolated
| from _global competition_ ) such as a small family
| restaurant. The owner opens a new restaurant with 10 tables
| and then maybe the business _modestly grows_ to 15 tables a
| few years later _and then stops growing_. The owner is able
| to maintain a steady-state business of repeat patrons at the
| restaurant for decades with predictable profits. Another
| example of somewhat predictable profits on a larger scale are
| legacy oligopoly /monopoly businesses such as railroad
| companies.
|
| But unlike local restaurants, many businesses have to
| aggressively _compete in national and global markets_ and if
| it stops growing, it starts dying. Predictable profits are
| not guaranteed for the foreseeable future. That 's why giants
| like Motorola and Nokia got their mobile phone business
| killed by a (growing) hobbyist computer company named Apple.
| (Motorola and Nokia are still big but not as big as they once
| were.) The businesses in hyper-competitive spaces like
| technology etc are a basically in a Red Queen race:
| https://en.wikipedia.org/wiki/Red_Queen_hypothesis
|
| E.g. Why can't Blockbluster Video stop worrying about growth
| and just pay dividends from profits? Because an upstart like
| Netflix competed away Blockbuster's rental profits. Using
| hindsight, we can see that assuming Blockbuster could just
| pay _" dividends regularly and for the foreseeable future"_
| is flawed. The same broken assumption is happening to Netflix
| today: _Why can 't Netflix stop worrying about growth and
| just pay dividends?_ Because Disney+ and HBO MAX are
| competing away Netflix's profits.
|
| Growing revenue and profits allows adaption to new
| competitive threats.
|
| It isn't just the investors who want growing businesses. The
| prospective employees find them desirable too. Many talented
| graduates of engineering would rather get a job with a
| growing Apple than a declining Motorola/Nokia.
| [deleted]
| acdha wrote:
| I think you have a valid point about not being _complacent_
| but all of your examples highlight how hard it is to pick a
| growth strategy which actually works long-term. Those
| companies all did what Wall Street analysts wanted but
| chasing that growth lead to their downfall: Nokia and
| Motorola cut things like R &D, which is expensive and
| uncertain, and focused on marketing & expansion. They cut
| deals with the cell carriers which produced big numbers but
| turned creative control of their product over to the phone
| companies. Remember all of the calls for Apple to give
| Verizon what they wanted to gain access to their customers?
|
| Blockbuster is a different industry but again they were
| focused on financial growth at the expense of the company.
| Trying to hit those targets meant they opened marginal
| locations and it also meant things like reducing "costs"
| like staffing (but not strategic investments like C-level
| compensation, of course) which had given them something
| Netflix couldn't easily match.
| pixelfarmer wrote:
| > But unlike local restaurants, many businesses have to
| aggressively compete in national and global markets and if
| it stops growing, it starts dying.
|
| How is a company dying if it continues to make profit in a
| changing market?
|
| > Growing revenue and profits allows adaption to new
| competitive threats.
|
| Adaption to "new competitive threats" is done by humans.
| TeMPOraL wrote:
| > _How is a company dying if it continues to make profit
| in a changing market?_
|
| Because, for example. their market is being steadily
| taken away by their competitors, and the company doesn't
| have a way to stop it.
|
| Death takes time, and may not be apparent if you're only
| looking at profits. The company could be profitable, but
| less so every year. Or, the company could be growing its
| profits year by year, but by a smaller factor. In more
| general terms: your profit may be positive, but if any of
| its derivatives (first, second, N-th) is negative and you
| have no way to address it, then you're dying.
|
| >> _Growing revenue and profits allows adaption to new
| competitive threats._
|
| > _Adaption to "new competitive threats" is done by
| humans._
|
| Yes, but having more resources lets those humans invent
| and execute such adaptations better - in the same way
| it's easier for individuals and households to adapt to
| changing life circumstances when they have savings and a
| stable income source, and the more of these they have,
| the easier it gets.
| jnovek wrote:
| "Because, for example. their market is being steadily
| taken away by their competitors, and the company doesn't
| have a way to stop it."
|
| This is circular reasoning: companies must grow because
| because otherwise they will have their lunch eaten by
| other companies who are growing because they must grow.
|
| I realize that this is an absolute basic tenet of
| capitalism that you're talking about, but this response
| only explains where we are, not why we're there.
| TeMPOraL wrote:
| > _This is circular reasoning_
|
| Yes. Or, in other words, _a feedback loop_.
|
| > _I realize that this is an absolute basic tenet of
| capitalism that you're talking about, but this response
| only explains where we are, not why we're there._
|
| It does both: we are here because it's a self-sustaining
| negative feedback loop. How exactly we got here has been
| long lost to history, and the specifics don't matter
| anyway: what matters is, how hard would it be to break
| out of this state, whether it's worth doing in the first
| place, and, if we somehow break the cycle, what's there
| to stop us from immediately falling back into it.
| pixelfarmer wrote:
| The driving motivator is just greed, nothing else. Growth
| is not per se required to run a successful company for a
| long time, that is just plain myth. Nor is growth a
| guarantee to survive for a long period of time. It may
| increase the chances to stay afloat, but that highly
| depends on the circumstances. Also, as soon as you make
| growth the main motivator to run a company you are
| opening yourself up to go bust, inherently so.
| TeMPOraL wrote:
| > _The driving motivator is just greed, nothing else._
|
| In some cases, sure. But I feel it's also a cop-out -
| it's easier to assume those business men are just driven
| by greed, than to look at the messy interplay of
| motivations and incentives that are the actual driver.
|
| Perhaps that's too cynical a take, but I think it's quite
| common for small companies to focus on growth because...
| that's How Business Is Done. Many entrepreneurs are not
| experts in market economy, nor do they have everything
| figured out - they follow their intuition, what other
| entrepreneurs and business press says, etc.
|
| > _Growth is not per se required to run a successful
| company for a long time, that is just plain myth._
|
| Define "long time". I believe that with competition and
| sufficiently long time, it's not a myth, but an
| inevitability.
|
| > _Also, as soon as you make growth the main motivator to
| run a company you are opening yourself up to go bust,
| inherently so._
|
| You can _always_ go bust. If you build a non-expanding,
| sustainable business, it 's only a matter of time before
| change in the market, or competitors, or just plain
| increase of costs of living / inflation in general will
| force you to either grow or give up, as some nonzero
| amount of growth will be required to just maintain your
| status quo.
|
| Turning this around, and giving another answer to the
| "driving motivator" question, you can view it through
| perspective of observer selection: pretty much all
| companies pursue growth, because those that didn't are no
| longer operating.
| doctor_eval wrote:
| I don't understand your argument. Netflix, Blockbuster,
| Motorola and Nokia all pursued growth strategies, yet the
| latter three (at least) ultimately failed to maintain their
| lead in consumer facing markets. So how does that explain
| the need for perpetual growth? It doesn't seem connected to
| your points.
|
| And, in the case of Nokia specifically, maybe they would
| still be a significant player in the handset market if they
| had pursued profit by investing R&D into a smaller number
| of good handsets, rather than their growth strategy that,
| if memory serves, resulted in the release of one janky new
| handset every week.
|
| It's not like what Apple did was magic; it was mostly just
| hard work and vision. Motorola and Nokia lost their
| business by being unfocussed and stupid, not because they
| didn't pursue growth.
| sokoloff wrote:
| It's not the pursuit of growth that matters, but the
| achievement of growth.
|
| Companies need to grow in places because they will
| inevitably be shrinking in some places (as customers age
| or churn out, as competitors come in to compete in
| segments, as new substitutive goods compete for wallet
| share).
|
| Even if you want to stay the same size, you will have
| some amount of growth in your strategy (or you'll fail).
| jasode wrote:
| _> Netflix, Blockbuster, Motorola and Nokia all pursued
| growth strategies, yet the latter three (at least)
| ultimately failed to maintain their lead in consumer
| facing markets. So how does that explain the need for
| perpetual growth?_
|
| You're laying out a cause & effect I didn't claim. I'm
| not saying _" pursue growth guarantees success"_ -- which
| is unrealistic. A variation of your scenario is like
| asking, _" Most novelists pursued growth of their
| audience but most failed so how do those failures explain
| why novelists want to grow their audiences?"_
|
| The # of failures is a different subject from the
| _motivation_ for growth.
|
| My reply to gp was to dissect the _flawed premise that
| profits are predictable and stable_. It 's that flawed
| assumption that makes it seem like growth is unnecessary.
|
| In other words, even if you want to deliberately create a
| new company with a "no growth" policy, the outside world
| has its own freewill and doesn't have to cooperate with
| your goal. New competitors or changing consumer
| preferences can sabotage your "no growth" idea and erase
| the steady-state profits.
| doctor_eval wrote:
| > A variation of your scenario is like asking, "Most
| novelists pursued growth of their audience but most
| failed so how do those failures explain why novelists
| want to grow their audiences?"
|
| Not at all. You said,
|
| > Why can't Blockbluster Video stop worrying about growth
| and just pay dividends from profits? Because an upstart
| like Netflix competed away Blockbuster's rental profits
|
| And I simply don't see the connection.
|
| Blockbuster could have done any number of things to
| prevent their demise but pursuing a growth strategy in
| the face of an obvious threat to their business was not
| one of them. And their size - perhaps achieved from a
| growth strategy - did not protect them. It's possible
| that their size, and the blandness that was necessary to
| get there - actually made them more vulnerable. (We used
| to call it "Lacklustre Video")
|
| The same for Nokia and Motorola. It's a strategy of crap
| products built en masse to drive growth into every
| segment which makes a company vulnerable.
|
| So I think novelists make for a poor analogy. And I think
| there are plenty of companies that pursue a sustainable
| profit strategy rather than a growth strategy.
|
| It's just that you don't hear about them because they
| aren't screaming for your business.
| fragmede wrote:
| Apple's iPhone launch included the vertical monopoly that
| was their magic. It addressed consumer needs like no
| other and everyone else was left playing catch-up.
| arka2147483647 wrote:
| Nokia/Motorola/etc tried to compete and research but
| ultimately failed. This is not a counterargument, but
| rather underlines the cutthroat nature of international
| competition.
|
| > And, in the case of Nokia specifically, maybe they
| would still be a significant player in the handset market
| if they had pursued profit by investing R&D into a
| smaller number of good handsets,
|
| They picked the wrong horse, as the saying goes. At the
| time it was not so obvious which thing was going to win.
| pclmulqdq wrote:
| There are several counterexamples to this idea, including
| companies 300+ years old, where a company does just fine
| without "competitive" expansion of its business, and where
| no competitors show up to eat their lunch.
|
| The poster child for this model, I think, is Zildjian: the
| biggest global maker of cymbals. They have been doing it
| for hundreds of years, never expanded outside of cymbals,
| and continue to do well.
|
| Companies run on this expansionist idea must keep expanding
| to avoid death, however, because they operate at
| unsustainable levels of expenses otherwise, and they hire
| managers on the premise of making bold moves to get
| promotions.
|
| This "grow or die" mentality is entirely a cultural
| phenomenon of modern western companies, and they can
| absolutely opt out of it.
| jasode wrote:
| _> There are several counterexamples to this idea, [...]
| where no competitors show up to eat their lunch._
|
| Yes, I understand that and already provided several
| counterexamples. (Local restaurants and legacy
| railroads.)
|
| _> The poster child for this model, I think, is
| Zildjian: the biggest global maker of cymbals. They have
| been doing it for hundreds of years, never expanded
| outside of cymbals, _
|
| I actually own a bunch of Zildjian cymbals and saw
| several documentaries about the brothers' split into
| Zildjian and Sabian. In any case, Zildjian _did expand_
| into other products outside of cymbals. From wikipedia:
|
| - _In 2010, Zildjian acquired the Vic Firth Company and
| in 2018 acquired the Mike Balter Mallet company expanding
| the company 's product offerings to include a full range
| of drumsticks and percussion mallets._
|
| Zildjian also sells _electronics_ like earphones[1]. The
| daughters that inherited Zildjian wants the company to
| grow. The growth has not been as fast as a tech startup
| but they do want it to grow.
|
| But even without _expanding product categories_ , the
| company can also expand _markets to sell to_. That was
| one of the motivations of Zildjian _expanding their
| manufacturing into Canada_ as that export location
| allowed them to sell cheaper cymbals to Europe.
|
| _> This "grow or die" mentality is entirely a cultural
| phenomenon of modern western companies, and they can
| absolutely opt out of it._
|
| Not just Western companies. Also East Asia companies in
| Japan like Canon, Sony, Toyota wanted growth. Korea
| companies like Samsung and LG. And Africa companies in
| Ethiopia and Nigeria want to grow too.
|
| But I do agree with the point you were trying to make: if
| you happen to pick a business domain that doesn't have
| cutthroat competition, there's less pressure to grow to
| avoid dying.
|
| RIM Blackberry didn't get into the drums cymbals business
| (slower moving competition of hammering round sheets of
| metal) but the phones business (fast iteration
| competition of electronics). They grew until the 2007
| Apple iPhone made their keyboard phones and 2-way pagers
| mostly obsolete.
|
| If you're an entrepreneur who believes the "growth
| treadmill" is insane and stupid, you need to pick the
| type of business that aligns with that philosophy!
|
| [1]
| https://www.google.com/search?q=zildjian+in+ear+monitors
| OtomotO wrote:
| It's a dogma, the dogma of neocapitalism... Endless growth.
|
| Sort of like a malign tumor, which in the end kills the host
| and itself.
|
| It's just propaganda. Nothing grows endlessly, apart maybe
| from human greed and idiocy.
|
| Also some growth is "mandatory" because of inflation. If you
| don't grow your profits but there is inflation, your profits
| in reality shrink.
| [deleted]
| marcosdumay wrote:
| As those things usually go, this is caused by government
| policy (and do not happen on the entire world).
|
| The US in particular greatly disincentive dividends, putting
| larger taxes over them than over any other form of profit
| accumulation.
| mijamo wrote:
| Yo be clear not all companies are expected to grow. But
| growth is the main characteristic of a certain kind of
| companies, and the reason why their stock can have very high
| PE ratio, because shareholders expect to get return in the
| stock going up instead of dividends. You have plenty of vale
| companies that pay dividends and do not grow very much,
| sustaining a healthy business on their market.
|
| But the transition between growth and value is a bit tough.
| You need to stop hiring like crazy, intern promotions
| suddenly go more stale as a result, stock compensation is
| hurt a lot so your employees might not be super happy with
| it, the story is also appealing to a completely different
| kind of people, and your stock goes down a lot at first, all
| your financing suddenly gets a lot more expensive etc.
|
| It is possible that we are witnessing that transition in some
| of the tech companies right now, as the symptoms match, but
| it really is too early to tell.
| fallingknife wrote:
| Advertisers have no choice but to go where the eyeballs are. So
| I don't see how they could possibly drop Google unless Google
| loses those eyeballs. If they could, then Google wouldn't be so
| exploitative.
| lazyasciiart wrote:
| Depends how you define eyeballs. If google traffic actually
| created a loss for them, that traffic would not be worth
| having.
| kandu wrote:
| In principle, the advertisers could buy Google shares and
| influence the company's policy towards an equilibrium that is
| more favourable to advertisers. If a natural monopoly is a
| public company, the entities that depend on this company could
| buy shares and bend the company's actions towards their
| interests. Is this happening? If not, why not?
| marcosdumay wrote:
| So... a dollar, a vote?
|
| That doesn't make for a great democratic rule.
| VBprogrammer wrote:
| Google is a trillion dollar company. You'd need to have
| billions of dollars in Google stock before you opinion even
| mattered around the board room. The majority of the companies
| advertising on Google couldn't even dream of that and for
| those that could it's not exactly clear that this would be a
| wise investment.
| pclmulqdq wrote:
| Google also has dual-class shares. If you aren't Larry or
| Sergei, your opinion won't matter much even if you own
| several hundred billion of the stock.
| ilyt wrote:
| And it's same on the other side of the pipe, content creators
| on YT are getting worse and worse deal every year, that's why
| everyone nowadays runs sponsorships and patreon on it
| piyush_soni wrote:
| I never understood anti-trust. Isn't it punishing a legitimate
| company for working their ass off for years/decades and growing
| too big for people's liking? It's my OS, I don't want to put your
| app on it, I want to put mine. What's the problem? It's actually
| against free market. I understand it from a socialist point of
| view though.
|
| Edit: The comments so far have given me some perspective. It was
| a genuine question to understand.
| theharrychen wrote:
| The purpose of anti-trust is to prevent firms from exercising
| market power that leads to predatory pricing and anti-
| competitive behaviors that lower social surplus and innovation.
| There's a whole subfield of economics called Industrial
| Organization that tackles this.
| [deleted]
| hahaxdxd123 wrote:
| > It's actually against free market.
|
| If you read a lot of the original liberal thought behind the
| "free market", it actually spells out something probably more
| aptly named "competitive market". A "free" as in "you can do
| whatever you want" market does not provide the same theoretical
| benefits as a competitive market (e.g. you can make
| models/derive theorems that the long run profits go to 0 due to
| competition, etc.)
|
| Even the wikipedia page for "Free market" today includes:
|
| "For classical economists such as Adam Smith, the term free
| market refers to a market free from all forms of economic
| privilege, monopolies and artificial scarcities.[2]"
|
| I believe that interpretation can come from the following line
| in Wealth of Nations:
|
| "People of the same trade seldom meet together even for
| merriment or diversion, but the conversation ends in a
| conspiracy against the publick [sic], or in some contrivance to
| raise prices."
|
| > I understand it from a socialist point of view though.
|
| I hope this provides further understanding from a liberal-
| capitalist point of view :)
| IanCal wrote:
| One key thing I'd say is it's about using your power that you
| rightfully gained in one sphere to _unfairly_ win in another.
|
| I've spent years working towards having this motorbike why
| can't I use it in the Tour de France?
|
| Google got into trouble for doing this with their terrible
| shopping thing. They didn't compete on having the best shopping
| tool they just forced theirs to the top knowing it was worse.
| This is bad for consumers as the assumption is that things get
| better as companies compete.
| amelius wrote:
| Did you read the article?
| usrbinbash wrote:
| > It's actually against free market.
|
| Precisely. And that is a good thing.
|
| Why do we like the free market? Because it has proven to be
| able to drive innovation, increase standard of living, and make
| life, in general, better.
|
| But the free market also has problems, that need fixing. If
| these problems remain unfixed, they grow, and choke the things
| we like about the free market out of it.
|
| The concentration of power and control in a few entities, and
| the subsequent effects these entities have on the rest of the
| market is one of these problems. And anti-trust exists
| precisely to reset this problem to a manageable state from time
| to time.
|
| The free market is a great system. It's fair to say that it's
| currently the best system we know how to run the economic side
| of a society.
|
| But it's also not a perfect system, and, like every imperfect
| system, it cannot be left running unchecked. Even the best
| server requires maintenance from time to time. If it isn't
| done, it stops working at some point.
| SettembreNero wrote:
| > Why do we like the free market? Because it has proven to be
| able to drive innovation, increase standard of living, and
| make life, in general, better.
|
| [citation needed], especially in environmental terms and for
| countries outside the first world
| diegoholiveira wrote:
| Countries outside the first world usually doesn't have a
| free market system in place.
| hagbarth wrote:
| It's about making the market work for consumers. Monopolies and
| the like sort of break the market dynamic by removing
| competition. It's got nothing to do with socialism.
| xondono wrote:
| I think the author is unaware that "anti-trust" has been used for
| decades as a bargaining chip, where big companies trade gestures
| for barriers of entry with the political establishment.
|
| The only reason the internet has been the biggest growth sector
| for more than 2 decades now is that it has been new enough to be
| less regulated than other industries, but as the giants (Google,
| Facebook,...) both settle new cases and push for self serving
| regulations, the barriers grow tall again, and innovation will
| stop.
| [deleted]
| jokethrowaway wrote:
| A company will grow up to the point the market needs it to grow.
| In a pure capitalist market without government I would expect to
| see a few large players where replicating the technology is
| really hard and then a bunch of large companies being killed by
| newer competitors.
|
| We kind of see these mechanics in our market but nowhere close to
| enough.
|
| The distortion in our model of crony capitalism is that our
| centralised government gives unfair advantage to existing
| corporations in the form of bailouts (hey, too big to fail!) and
| regulations (easy to implement when you're Amazon, a business
| killer when you're small).
|
| I would love to build a fintech startup and do what banks are
| doing for cheaper, but regulations in the banking sector make it
| a very expensive endeavour.
|
| Anti trust is not the solution, it's merely a small patch which
| gets applied incoherently and used as a weapon by governments to
| steal more money from massive companies.
|
| I argue that no regulations would have a better effect on
| disrupting large monopolies, once there is enough money to be
| made with little risk.
| judge2020 wrote:
| And yet, most people love the stability of existing systems.
| Trying something new is betting with your time: if the startup
| goes defunct in x years, you've created work for yourself to
| migrate to a competitor, and that's a big risk to take if you're
| a medium or large business evaluating a B2B product that maybe
| only has Series B funding (and is dependent on massive growth to
| survive without being sold off to some investment firm due to
| pressure from their existing investors).
| makeitdouble wrote:
| From being on both sides of the fence (providing B2B software
| as a startup, and dealing with small businesses as a client),
| smaller entities will be expected to adapt to the bigger fish.
|
| Startups will bring translation layers to fit inside an
| existing system, and as a big client you can often send them
| the exact interface they need to adhere to and they'll deal
| with it.
|
| In that sense, the switching cost can be minimal (and you might
| keep your existing system running in parrallel), and if you're
| big enough you'll have the option to outright buy the smaller
| business if it were to flail.
|
| It's more complicated I think on the B2C side, where you have
| to buy more trust and establish a brand for people to give your
| their data and/or money.
| kennywinker wrote:
| With decent anti-trust, we would have many many more stable
| mid-size companies. I.e. startups that FAANG snapped up on
| their ascendence to stability, that would now be successful in
| their own right.
|
| Some examples to rattle off a few household names: instagram,
| whatsapp, youtube, tumblr, android, beats, audible.
| scarface74 wrote:
| Instagram became big because of Facebook's cross promotion
| and adTech.
|
| YouTube had huge storage and bandwidth costs and was about to
| be sued out of existence.
|
| Tumblr wasn't exactly doing great before being bought by
| Yahoo and Yahoo wasn't exactly a monopoly when it acquired
| Tumblr and its current owner is definitely not that big.
|
| How do you think Android would have succeeded when better
| funded companies like Microsoft, RIM and Palm failed to make
| a dent?
|
| Beats was already profitable before being acquired by Apple.
| No one can credible claim that Apple has a "monopoly" on
| headphones or in streaming music.
| dima_vm wrote:
| Instagram might not became that big, but it definitely was
| on track to become somewhat big, that's why Facebook bought
| it, in fear of competition.
|
| Same, Youtube might go down, but the idea was out of the
| box now, someone else would do that. Technology (ContentID)
| was there as well. As a consumer, I don't mind if it'd be
| called differently done by different team. It might have
| been better or worse of course.
| scarface74 wrote:
| How was Instagram going to become _profitable_?
|
| YouTube's issue wasn't just being sued, the storage and
| bandwidth costs are huge and YouTube was losing billions.
| Rumors are that YouTube is still not profitable.
| dima_vm wrote:
| "We run ads, senator." (c) Mark
| scarface74 wrote:
| YouTube took years and only became slightly profitable
| after burning through billions of Google's money and then
| only by piggybacking off of Google's existing
| infrastructure and ad network.
| mrkurt wrote:
| YouTube is a tremendous antitrust fail. The very
| definition of price dumping.
|
| It could have been profitable earlier, but it would have
| been much smaller and faced stiff competition. That isn't
| what Google needed from it.
| scarface74 wrote:
| How could YouTube be profitable earlier as it's bandwidth
| and storage costs grew?
|
| Is every company that is not immediately producing a
| profitable product "price dumping" - including every
| startup YC funds?
| mrkurt wrote:
| Price dumping is a bigger deal when it's a company in a
| monopoly position doing it. It's not necessarily anti
| competitive to sell at below cost.
|
| YouTube could have been profitable by charging for their
| services. Like Vimeo. They could not have been profitable
| with ads. Google couldn't afford for YouTube to be small,
| they needed a near monopoly on internet video to extend
| their ad empire.
| jasode wrote:
| _> YouTube could have been profitable by charging for
| their services. Like Vimeo._
|
| Fyi, Vimeo was a money-losing business when IAC bought it
| 2006 and is still unprofitable after IAC spun it out as a
| public company in May 2021.
|
| So it's not convincing that Youtube could have stayed
| independent and become profitable by charging for videos.
| Before the Google acquisition, Youtube was also
| threatened by the billion dollar Viacom lawsuit. The
| young Youtube startup didn't have the money to fight
| expensive legal battles like that and could realistically
| lose in court like Napster lost against the RIAA lawsuit.
|
| Youtube getting acquired by Google got the video startup
| out of several fires: (1) switch to Google's datacenter
| infrastructure which reduces operating costs (2) tap into
| Google's extensive ad network to monetize (3) use
| Google's army of lawyers to settle with Viacom by
| convincing them that the ContentID fingerprinting
| algorithm will filter out piracy.
| mrkurt wrote:
| Oh you're right.YouTube probably couldn't have been
| profitable. They could have gone out of business,
| however.
|
| Vimeo has reasonable unit margins, though, and has since
| the early days.
|
| What I'm mostly irked about is that there was no room for
| experimentation. YouTube was impossible to compete with.
| scarface74 wrote:
| "Unit margins" mean about as much as Ubers made up metric
| where it is profitable as long as you ignore a dozen
| expenses .
| kennywinker wrote:
| Ads or a subscription service. Not that complicated. With
| that many eyeballs you don't need to be a genius to make
| money off it.
| Tanoc wrote:
| Google over-leveraged advertising on Youtube however.
| Most Youtube viewers use an adblocker on PC, and adblock
| is becoming more common on Android with each passing
| month. All because AdSense went with a more lax policy of
| moderation for ads after the 2017 fallout caused by Matt
| Watson scared away big advertisers like Frito-Lay and
| Toyota. The result was all ads were either falsely
| advertised Android games, multi-level marketing scams, or
| even nakedly racist political ads in the runup to the
| 2018 congressional elections. Adblock rates exploded,
| cutting Youtube's income and causing a panic response of
| running even more ads and locking users into seeing them.
| To this day Youtube still has a lax vetting policy for
| advertising partners, and actively hateful, harmful, or
| overtly false ads stay up for weeks until enough users
| report them.
|
| As for subscriptions... Well, they tried that with
| Youtube Red. And then Youtube Premium. And then Youtube
| Music. Every time people turned it down, because the
| benefits weren't worth the cost each month considering
| all the features touted could be found legally for free
| elsewhere. And when video creators outed Red by showing
| they'd get a paltry amount of that revenue, despite
| Youtube saying the money from subscriptions would be used
| to pay them, even more of the viewing audience turned
| against it.
|
| When you're in the uniquely precarious position of
| hosting high cost user-generated content, it's very easy
| for outside forces to break you over their knee and send
| you into a death spiral.
| scarface74 wrote:
| How are ad supported companies outside of Google and
| Facebook doing today?
| shagie wrote:
| Instagram c. 2012 was just burning VC money and had no
| plans for how it could be profitable. It wasn't until
| Facebook bought them that there was some thought about
| how to make it profitable.
|
| https://www.fastcompany.com/3019351/will-instagrams-
| vogue-li...
|
| > On Thursday, the company announced that it would begin
| introducing photo and video advertisements on the
| service, its first attempt to generate revenue since
| Facebook acquired the startup for $1 billion.
|
| > ...
|
| > It's a sentiment Systrom has repeated to me for years-
| and an idea that many revenue-free startups have begun
| parroting. For entrepreneurs without a business model,
| it's become almost fashionable to declare that they're
| simply creating a new model altogether: Whatever it is-by
| god-won't involve pesky traditional ads. No! The ads
| won't be disruptive or annoying-they'll be wanted and
| loved! (I'm waiting for the call, SnapChat.) But when
| push comes to shove, more often than not, the ads turn
| out to be nothing more than, well, traditional
| advertisements. See: any Promoted Tweets.
|
| Yes, it was on track to be something big... but it wasn't
| on track to be able to make any money and was more likely
| to flounder once it ran out of VC interest and get bought
| for cheap by Twitter.
|
| https://www.businessofapps.com/data/instagram-statistics/
|
| There's a reason that chart only starts listing revenue
| in 2015.
|
| While Instagram might have been keeping Zuckerberg up at
| night with nightmares - one shouldn't pretend that it had
| a path to making money and being able to keep running.
| passwordoops wrote:
| And in a world where competition is allowed to see its
| course, Instagram would have disappeared. And further
| down the line, Facebook's poor decisions would have
| spelled oblivion for them too.
|
| It also means the 2010s may have perhaps seen investors
| print billions into businesses that actually matter and
| deliver real innovation
| scarface74 wrote:
| Or it just would have copied Instagram's feature set like
| it's done dozens of times with other competitors.
|
| Or it would have just hired all of its founders to
| recreate it.
|
| Do you now also want to stop acquihires?
| fallingknife wrote:
| If Instagram would have disappeared on its own, Facebook
| would have just built it in house. They spent $1 billion
| on it because it was cheaper to do that than to start
| from scratch. And how could anti-trust possibly stop
| that?
| mrkurt wrote:
| The point of antitrust is to encourage that. That's
| competition. We want Facebook to build net new things.
|
| Facebook's not all that good at building new things,
| though. Most big companies aren't. Partially because they
| don't need to be.
| scarface74 wrote:
| And how would that be a better outcome for the startups?
|
| If you haven't noticed, Microsoft and Apple have both
| been around for over four decades "creating new things".
| mrkurt wrote:
| I don't mind startups failing. I would prefer that
| startups fail. I would prefer big companies fail. It's
| healthy for companies to die.
|
| Apple and Amazon are more of a vertical integration
| problem. They expand their market power by monopolizing
| the vertical supply chain.
|
| Microsoft acquires companies to increase their market
| power. Skype, GitHub, LinkedIn, now Activision.
| fallingknife wrote:
| Monopolizing a vertical supply chain isn't even a concept
| that makes sense. The point is that with a monopoly
| customers have only one purchasing option. This condition
| does not exist when a company integrates vertically.
| mrkurt wrote:
| You're arguing the semantics of a monopoly, but you
| should just mentally replace the word "monopoly" with
| "market power".
|
| When Apple buys components from a vendor, they have less
| market power. When they build their own components, they
| have more market power.
|
| Both Apple and Amazon shipped their own ARM chips. This
| increased their market power. Because they're the only
| companies with access to those chips. Meanwhile,
| independent ARM vendors go out of business about once
| every 3 months because the biggest companies using ARM
| aren't part of their addressable market. Which means
| small companies have limited access to ARM CPUs.
|
| When Amazon builds their own delivery company, they
| increase their market power. When they buy from Fedex and
| UPS, they decrease their market power. And, when they do
| their own deliveries, they limit competitors market
| power.
|
| You can be fine with all of this. Those of us who are
| interested in competitive markets worry about it a lot.
| You don't have to be worried about competitive markets,
| though. It's totally valid to not think increased
| competition is a good thing.
|
| There is a lot of nuance here. If you're stuck on the
| word monopoly, I don't think you're going to really hear
| the things antitrust folks have to say.
| fallingknife wrote:
| Vertical integration doesn't decrease competition, it
| increases it. If there are N companies in a market, and a
| company that purchases from one decides to vertically
| integrate.and enter the market, now there are N+1.
| mrkurt wrote:
| Only if they sell into the market.
|
| Almost no one who vertically integrates competes in the
| market they just shook. You can't get Amazon to ship
| things for you, so they don't compete with Fedex and UPS.
| You can't by an M1 chip from Apple.
|
| Vertical integration is all about shrinking markets, not
| adding to them.
| scarface74 wrote:
| > You're arguing the semantics of a monopoly,
|
| Yes "words mean things".
|
| > When Apple buys components from a vendor, they have
| less market power. When they build their own components,
| they have more market power
|
| So now you're saying a company shouldn't be allowed to
| build and design their own components? Doesn't it help
| competition that Apple, Microsoft, Google, Qualcomm, and
| MediaTek among others are creating and modifying their
| own processors?
|
| > Which means small companies have limited access to ARM
| CPUs.
|
| Any company can buy an ARM processor from Qualcomm and
| MediaTek. Have you looked at all of the phone
| manufacturers who sell in China and India and even the
| US?
|
| > Those of us who are interested in competitive markets
| worry about it a lot. You don't have to be worried about
| competitive markets, though. It's totally valid to not
| think increased competition is a good thing.
|
| Every market you mentioned has a competitor that third
| parties can go to - ARM chips, delivery companies etc.
| scarface74 wrote:
| Yes because Skype and GitHub are market leaders and it's
| really hard to change your git origin.
|
| How is Apple "monopolizing the vertical supply chain"
| while having only 13% of the global cell phone market?
| mrkurt wrote:
| Ok, well, we're not talking about the same stuff here so
| I'm not sure it's worth going back and forth. We can just
| continue to be on different sides of the antitrust issue/
| shagie wrote:
| One could argue that they are purchasing companies to
| incorporate them into the company's product directly
| rather than relying on a 3rd party vendor to supply it.
|
| Two examples: AuthenTech and Kiva
|
| https://www.fromscratchradio.org/show/scott-moody
|
| https://www.fromscratchradio.org/show/mick-mountz
|
| The argument (I believe) is for leaving those companies
| as stand alone and having Apple and Amazon rely upon them
| _not_ going bankrupt or getting purchased by some other
| competitor and disrupting their own company.
|
| You've seen that happen before - BigCo is using a 3rd
| party vendor, someone buys it and then turns around and
| starts charging BigCo lots of money.
|
| To prevent that from happening, BigCo should have bought
| the company when it started using it (if possible) to
| prevent that disruption in its systems, products, or
| services.
| scarface74 wrote:
| And because Apple bought Authentec, it cornered the
| market on fingerprint base authentication...oh wait.
| mrkurt wrote:
| You're not really making coherent points here. No one is
| arguing that vertical monopolization corners a market on
| components.
|
| When Apple bought Authentec, they increased their market
| power and reduced the market power of competitors.
|
| As an independent company, Authentec could sell to Apple
| AND Apple's competitors. Apple obviously won't sell
| components to their competitors. They were incentivized
| to purchase Authentect to restrict competition.
| scarface74 wrote:
| So no one is arguing that a "vertical monopoly" corners
| the market. In that case, what are they monopolizing?
|
| > When Apple bought Authentec, they increased their
| market power and reduced the market power of competitors.
|
| The existence proof is that there were fingerprint
| authentication methods before and after the acquisition.
| Who exactly did they hurt?
|
| > As an independent company, Authentec could sell to
| Apple AND Apple's competitors. Apple obviously won't sell
| components to their competitors. They were incentivized
| to purchase Authentect to restrict competition.
|
| Well if that was the purpose - to prevent competitors
| from having fingerprint sensors - they did a horrible
| job.
| shagie wrote:
| In that model, would it be reasonable for another agency
| (company, PE, billionaire with an axe to grind) to come
| along and buy them and then raise the prices to rent seek
| on Apple?
|
| You appear to be arguing that larger companies shouldn't
| be able to secure their supply chain and instead be
| forced to follow the whims of the market as companies go
| in and out of business forcing the larger company to
| either (a) build it in house or (b) keep redesigning
| every time something changes.
| mrkurt wrote:
| One thing about antitrust is that it's a set of
| restrictions only applies to companies with a certain
| amount of market power. It's not a set of rules that are
| designed to be fair for everyone.
|
| So, yes, some other company could conceivably do
| something to diminish Apple's market power and not run
| afoul of antitrust. And I think that's ok?
|
| Companies with too much market power should not be able
| to vertically integrate to increase their market power.
| They definitely should not be able to do this via M&A.
|
| This is, again, not meant to be "fair". Because there's
| no such thing. Companies of a certain size are inherently
| unfair competition, antitrust rules just limit how they
| can flex.
| wizzwizz4 wrote:
| > _Yes because Skype and GitHub are market leaders and
| it's really hard to change your git origin._
|
| Yes, for exactly those reasons. Have you actually _tried_
| getting everyone on a team to change their git origin?
| And that 's before mentioning the other stuff you have to
| migrate: the issue tracker, the _CI pipeline_ ...
| scarface74 wrote:
| Yes,
|
| You tell everyone to change the git set-origin.
|
| Hardly anyone uses GitHub's rudimentary issue tracker and
| reconfiguring a CI/CD pipeline is child's play unless you
| use GitHub actions and very few if any large companies
| use GitHub actions.
| salawat wrote:
| They really haven't. They've been acquiring startups,
| digesting and rebranding said startups innovations with
| an in house version, and (arguably innovating) in finding
| ways to plaster a transaction layer into solved problems
| that previously lacked a recurring revenue compatible
| transaction framework.
|
| In short, subsidizing themselves by abandoning one time
| purchasable software, and replacing it with either ad
| serving or subscription based versions.
| kennywinker wrote:
| Traditional anti-trust (the kind we haven't seen for at
| least 30 years now) is about preventing companies from
| creating monopolies - which requires proactive steps BEFORE
| they become a monopoly not when they go to purchase their
| last competitor.
|
| That said, afaik the beats acquisition wasn't about
| headphones as much as the streaming service... digital
| music is a market that apple was the largest player in for
| a long time (may still be idk?).
|
| Rim and microsoft were squeezed out _by android_ , That
| wasn't an inevitable outcome - it was the result of google
| buying android. Google staying entrenched as the top search
| engine may also have something to do with their ownership
| of android.
|
| You can pick apart some of my examples, sure, but if even
| one of those is true then of the hundreds (thousands?) of
| companies acquired by faang you must know that a good
| percentage of those would be viable stable workplaces...
| they were purchased usually because of that _exact_ threat!
| and then repeat that for every industry in the economy with
| large players in it...
| scarface74 wrote:
| They were squeezed out by Android that was given away for
| free. How was a hypothetical Android company going to
| survive giving its only product away for free?
|
| > you must know that a good percentage of those would be
| viable stable workplaces
|
| How many former unicorns that did go public in the last
| decade are actually profitable today?
| passwordoops wrote:
| And how many funders, seeing that unicorns are illusions
| bound for failure in a market where anti trust is
| enforced, would invest in better and more stable start
| ups worth actual real-world business plans?
| scarface74 wrote:
| Doesn't that argue against Android being successful as a
| stand alone entity? Android had no business model.
| passwordoops wrote:
| Exactly it doesn't. Android would have gone away or been
| a DIY tool.
|
| And in a proper anti-trust environment, the app store
| (which Steve Jobs really resisted anyway) wouldn't have
| been permitted to act the way it did and probably make
| the iPhone too restrictive for most people to adopt.
|
| So other consumer-driven solutions would have come about.
| It's not rocket science.
| scarface74 wrote:
| Yes because a DIY tool would have really taken off in the
| market.
|
| And how would it have been better for Android not to
| exist?
|
| And yes it's not rocket science, that must be why all of
| the other open source mobile operating systems given away
| for free have been so successful. Who was going to fund
| it in your hypothetical world?
|
| Yes and in a "proper anti trust world" a manufacturer who
| at the time had 1% of the mobile operating system would
| have come under scrutiny because of anti trust.
|
| On stage during the launch, SJ said their goal was to
| capture 1% of the market in the first year. They barely
| reached that by the time the app store was launched.
| wizzwizz4 wrote:
| > _Yes because a DIY tool would have really taken off in
| the market._
|
| *points at Linux, C, algebra, writing*
|
| > _And how would it have been better for Android not to
| exist?_
|
| *points at Boot2Gecko, J2ME, PalmOS*
|
| Also, false dichotomy. Android (or something like it) may
| well have still existed; just, it likely wouldn't've been
| so dominant (and its ecosystem wouldn't've been so
| reliant on proprietary Google libraries, which prevent
| people from running Android programs on non-Google
| systems).
|
| > _Yes and in a "proper anti trust world" a manufacturer
| who at the time had 1% of the mobile operating system
| would have come under scrutiny because of anti trust._
|
| ... Yes. In case you're not aware, Apple already had a
| rather special relationship with telecoms companies at
| the time; something (e.g.) Handspring lacked.
|
| The point of antitrust isn't to break up monopolies
| _after_ they 've already done damage to the market. It's
| to ensure that market dynamics continue to actually
| function in the real world - to ensure that the free
| market at least _somewhat_ resembles a meritocracy.
| scarface74 wrote:
| > points at Linux, C, algebra, writing
|
| And the largest contributors to Linux are corporations.
| Are we really going to bring up the other irrelevant non
| sequiturs?
|
| > points at Boot2Gecko, J2ME, PalmOS*
|
| And they all failed even though they had much larger
| commercial backers. None of them were scrappy startups.
|
| > which prevent people from running Android programs on
| non-Google systems).
|
| Yet over 1 billion people use phones based on Android in
| countries like China without any Google services.
|
| > Yes. In case you're not aware, Apple already had a
| rather special relationship with telecoms companies at
| the time.
|
| Apple had a relationship with _one_ telecom when the App
| Store was introduced - AT &T.
|
| > Handspring lacked.
|
| Palm phones were out before the iPhone existed.
| fakedang wrote:
| Android should have been a foundation a la Linux.
| scarface74 wrote:
| Who was going to write it and maintain it?
| gofreddygo wrote:
| Don't forget Pebble.
| adastra22 wrote:
| I miss my pebble :(
|
| Also Fitbit, nest.
| Danieru wrote:
| Vine
| blowski wrote:
| People are complicated! I like being healthy, but I also like
| eating pizza with mountains of cheese.
|
| Wearing my "enterprise architect" hat, I love stability. I
| don't want to choose a technology that just might be the silver
| bullet but probably isn't, and will in fact be abandoned and
| need replacing in 2 years.
|
| But with my "Hacker News reader" hat on, stability is boring.
| Constantly inventing and testing new ways of doing things is
| how we progress as a species. Anti-trust speeds that up and so
| I love it.
|
| I guess I want a constant churn of innovation with other people
| bearing the risk. Perhaps if anti-trust were more aggressive it
| would at least level the playing field - at the moment, most
| innovation is from companies who can afford to drop $10B as an
| experiment. (And they get a tax refund either way.)
| revskill wrote:
| I don't trust any article without a TLDR at the beginning of the
| article.
| majikandy wrote:
| Great movie.
| cheschire wrote:
| It was a good movie, but IMO was a bit too silly / cliche to be
| great. Good bones though.
| bigmattystyles wrote:
| As long as the megacorp I work for is exempt, then of course!
| [deleted]
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