This is a really thorough article on the topic [1]. Here is the conclusion.
"American antitrust laws date from a time when changes in transportation,
communications, and manufacturing technologies generated unprecedented economies of scale, fueling the rise of industrial behemoths. Today, dramatic advances
in information technology, combined with globalization, are fueling the growth of large and efficient “superstar firms” that are capturing a growing share of economic activity. The emergence of the tech titans is especially dramatic.
These economic conditions call for a reinvigoration of antitrust enforcement
in the United States to promote competition, protect consumers and workers, and
spur economic growth. These valuable aims can be achieved by taking a tougher
stance toward mergers involving market leaders and by vigilantly preventing dominant firms from engaging in conduct that excludes their rivals. However, moving in that direction is a slow process, requiring the antitrust enforcement agencies to take the lead and convince inertial and possibly skeptical courts to follow. Those who expect dramatic and rapid changes in antitrust will be disappointed, unless new legislation is passed. Likewise, those who expect antitrust to solve problems unrelated to competition will be disappointed. Stronger antitrust enforcement, while needed, is not a substitute for badly needed regulations directed at reducing the political influence of corporations, protecting privacy and data security, and limiting the spread of disinformation."
Positive progress is not going to happen anytime soon.
When the more reactionary members of the legal profession moved beyond the various topics that interested then in the 50s and 60s, the new generation moved on to business matters, as big companies were getting tired of dealing with unions and tight regulatory controls.
Over time, the interpretation of the antitrust law was changed by “judicial legislation” to narrowly define monopolies to a standard involving price increases for consumers. That’s why the government allows, say oil distribution infrastructure to regionally consolidate to two players, while Staples and OfficeMax cannot merge despite their irrelevance.
The current system incentives cartels. So when Microsoft buys Walmart or Google buys Verizon, that will be fine. 20 years from now, 80% of consumer spending will probably be directed at a half dozen companies.
Eventually, something really bad will happen. The US will get spanked in a war, a regional natural disaster will trigger a famine, etc. At that point, maybe you’ll see some change. But change is slow - the US House passed anti-lynching legislation for like 40 years and it never got out of Senate committee until Lyndon Johnson championed it.
> Over time, the interpretation of the antitrust law was changed by “judicial legislation” to narrowly define monopolies to a standard involving price increases for consumers.
And many of today's biggest tech companies largely get a pass because antitrust law focuses on price and ignores all other negative externalities that result from monopolistic behavior like quality, timeliness, ease of access to customer service, user privacy, and corporate social responsibility. But the product is "free" so how can the consumer possibly derive any further benefit?(/s)
When there is competition in a market not only do prices fall but the customer experience improves. Businesses don't (and can't) compete on price. They compete on value. But US antitrust law ignores value entirely and consumers everywhere pay the price.
There was a lot of progress in the 1910's, iirc. It's possible that enough people will become frustrated enough to lobby for effective change. Generally that requires a few leaders capable of capturing the angst in a useful way.
People are significantly more exposed to the stock market these days than in 1910.
Considering tons of people's 401k's are basically made up of the biggest companies in the US thanks to index funds there is a lot of incentive to not fuck with those companies.
If any leaders gets really serious about breaking up some of the Big Tech companies you'll see enormous pressure to get them out of office ASAP.
Google's brand protection racket [1] and manipulation of ad exchanges [2] has resulted in lost economic activity. Apple's crippling of the iOS ecosystem [3] has resulted in lost economic activity. Breaking them up should raise overall economic activity, nationally and globally, along with actually increasing the value of the Baby Googs and Apple Seeds, as previously with Standard Oil and, until allowed to reassemble in '96 [4], AT&T.
I would think that index funds vs. individual stocks would translate to investors caring less about particular firms and more about economic activity and the resulting increases in asset values.
Pressured out of office? Most U.S. politicians have now spoken out against Big Tech, the Department of Justice and several states have active antitrust suits, a House report concluded that Amazon, Facebook, Apple, and Google have monopoly power and should be split up [5], etc.
>People are significantly more exposed to the stock market these days than in 1910
>Considering tons of people's 401k's
I'm surprised to hear this, because my understanding is the opposite. Something like 60% of Americans have a 401k, but the numbers for how much they have in them is grim. Almost everyone is underfunded, less than 20% of Americans made a contribution last year, and overall 9/10 stocks are owned by about 1/10th of the population (and rising).
>If any leaders gets really serious about breaking up some of the Big Tech companies you'll see enormous pressure to get them out of office ASAP.
Even if it did tank 401ks, I don't think you can be so sure about the public reaction to it. I can't claim to perfectly understand human behavior, but I'm very confident that it not well predicted simply by applying a value-based analysis.
> People are significantly more exposed to the stock market these days than in 1910.
[citation needed]
> Considering tons of people's 401k's are basically made up of the biggest companies in the US
When defined benefit (pension) funds dominated private retirement, guess what they held? (And if you say “but people weren't exposed to risk, because ‘defined benefit’”, guess what happened when funds failed...)
> Eventually, something really bad will happen. The US will get spanked in a war, a regional natural disaster will trigger a famine, etc. At that point, maybe you’ll see some change. But change is slow - the US House passed anti-lynching legislation for like 40 years and it never got out of Senate committee until Lyndon Johnson championed it.
> Likewise, those who expect antitrust to solve problems unrelated to competition will be disappointed. Stronger antitrust enforcement, while needed, is not a substitute for badly needed regulations directed at reducing the political influence of corporations, protecting privacy and data security, and limiting the spread of disinformation.
This is wrong. The "political influence of corporations" comes from their size and vertical integration. Google has outsized influence in politics because it controls the dominant search engine and YouTube etc., which gives political influence to every other subsidiary of the same company in a way that would not occur if they were independent entities.
Privacy and security problems are proportional to size. Bigger entities attract stronger attacks (because the benefit to the attacker is larger) and then more people are compromised at once.
Misinformation is primarily a problem as a result of filter bubbles that prevent people from hearing the rebuttal to incorrect arguments. Diversity of information distribution addresses this.
In an unregulated capitalist economy, the inevitable end result is monopoly. The best way to compete in the economy is to not have to compete.
Without external restraints, any sufficiently large company will focus on eliminating competition either through pricing them out of the market or just outright buying them.
The only reason the US has more than one cellular network right now it because the government has prevented multiple attempts at mergers, and even with that effort we're down to three.
edit: if you disagree, I'd love to hear your opinion. The government has entire agencies dedicated to maintaining competition in the economy. If monopoly was not the inevitable end result of capitalism, then such agencies would not be required.
> The only reason the US has more than one cellular network right now it because the government has prevented multiple attempts at mergers, and even with that effort we're down to three.
There actually was a monopoly in the telephone system[0] in the US that had to be broken up via antitrust.
The AT&T breakup actually happened under Reagan, and was initiated in 1974 (which was Nixon/Ford). The reconsolidation happened under both parties throughout the 90s and 2000s.
...and this whole saga, lest we forget (and relevant to the HN crowd), was instrumental in giving rise to the unix wars of the 90s, due to the AT&T copyright dispute with University of California Berkeley. (The relevant point here being not the copyright dispute itself, but the fact that AT&T was not allowed to sell the UNIX system for profit, this being one of the conditions of being allowed to operate as a telephone company.)
Yeah, power always consolidates unless people use violence (or threat of violence) to stop it. Companies merges to bigger companies, company owners loves this, that is bad and gives people less freedom. Countries merges to bigger countries, politicians loves this, that is equally bad. The more the power is spread around the better, but everyone who sits on power tries to work against that.
Note that giving all the power currently held by capitalists to politicians is also consolidation of power, that is bad. Or vice versa. So giving the government too much power over companies will hurt on the other end, balance is needed and it is hard to say where the line should be drawn.
Exactly. The phrase "power vacuum" is a good way to visualize this idea. When there is an opportunity for someone to gain power (of which there are many kinds), someone will exert the effort to take that power for themselves.
The US allows monopolistic returns because the country (politicians) benefit from it. If antitrust successfully kills monopolistic returns the beneficiaries of the increase in consumer surplus are the customers, many who are foreign.
In sectors where products can have infinite variety (like fashion), monopolies don't seem to happen because the small creative producers can create new market niches faster than the monopolies can enter them.
Exactly. AT&T was a monopoly because it made sense to be one given the capital investment requirements and technology. Universal access was something that lifted up the whole country and had and has enduring value. Think of the bullshit and lack of interop between Facebook, Apple and Google messaging - without AT&T, you would have had that problem with legacy phones.
They were tightly regulated, which worked well until technology moved ahead of the operations.
Tight regulation works well when change rates are slow and you need to make capital investments. Short term decision making driven by final optimization always constrain capital investment. That’s why your power grid is less robust than it was 40 years ago.
That's not clear to me. I don't know much about things like clothes fashion, but e.g. eyeglass fashion is completely dominated by Luxottica (resulting in eye-wateringly high markups) and fashion-adjacent fields such as music are still dominated by just a few labels (this one you can say is basically a product of legal lobbying for protections).
The pattern there is that small producers for the most part fail and fizzle out. The few successful ones get snapped up by the big players.
Eh, maybe 15-20 years ago, but fast fashion producers have made it much harder. You get 6-12 weeks before you get copied, at best. It's still possible to carve out a small business, but a lot of good business operators are being held back by those types of companies.
Actually there are lots of factors impacting horizontal and vertical integration in the capitalist economy.
In general you are right that "external" restraints are needed to prevent a firm from competing so aggressively or moving to integrate horizontally. However, the external restraints are far and away most often free market forces.
Economies of scale are nothing to laugh at, especially in ventures with very high fixed costs. However, integration is also high risk because it comes with significant downsides.
I don't care to analyze the US cellular market, but I would be curious to what extent the way the government has regulated this market has pushed it toward mergers. And perhaps that is a good thing to have a small number of national cell carriers. People who grew up in the early telephone era would probably agree its better than having to navigate the byzantine maze of regional networks and long distance charges.
There are other mostly unregulated wireless markets that might serve as interesting case studies though. Wireless ISPs have been a booming business for decades and is still extremely dispersed in ownership. They're facing some disruption now from Starlink but that is likely years away from posing a serious industry challenge.
> I don't care to analyze the US cellular market, but I would be curious to what extent the way the government has regulated this market has pushed it toward mergers.
I believe that auctioning spectrum is a huge factor in creating monopolies because only the biggest companies get spectrum. No small guy can afford to compete in the auction. I don't think that auction (to the highest bidder) is the best way to allocate spectrum if the goal is to preserve competition.
The government also has agencies dedicated to maintaining monopoly. It is done through patents, copyright, trade secret laws.
It's important to maintain a balance between completion and monopoly. Monopoly allows collecting huge margins that could be invested into further research that would not be otherwise be feasible financially.
> The government also has agencies dedicated to maintaining monopoly. It is done through patents, copyright, trade secret laws.
Without those laws the big companies would steal and copy every small business idea or IP with no impunity. The laws protect small companies much more than big companies. Of course big companies sits on a lot of patents so they are still powerful, but not as powerful as if they could just abuse espionage etc as much as they wanted.
For example, what do you think would happen with the harry potter books? Others would just print their own copies, write their own books with the same characters and names, and the company with the biggest marketing budget to throw around would win and sell the most. That doesn't seem very good for the little guy to me, rather it would make it basically impossible for the little guy to compete.
(Intellectual property) rights depend on your ability to enforce them. Large companies have many resources to throw at enforcement while small companies have few and individuals even fewer. In the past, patents may have worked for the little guy but no longer. I don't know why exactly.
On the Harry Potter thing, "the biggest marketing budget would win and sell the most" is indeed what happens, but the original creator still has huge power. For example if George Lucas (who sold the Star Wars IP to Disney) decided to publish his "fan fiction" screenplay for Star Wars Episode VII, Disney would have a massive continuity problem because he's the original creator—no matter how much The Mouse spends on marketing. That is what Disney paid him $4B for, to not do that.
Further, isn't "people will write new stories for characters they love" a good thing? We could certainly use fresh ideas rather than this rut of reboots and sequels. In that sense, letting The Market winnow the winners from the chaff would improve consumer offerings. It's happened before: remember that Twilight fan fiction that became a literary sensation and major movie series?
"write their own books with the same characters and names"
Clearly you've never encountered the vibrant and exceptionally large world of Harry Potter fanfiction.
Anyway, IP laws usually benefit incumbents simply because small companies have neither the legal budget nor attention to fight a lawsuit. This is a recurring problem in the legal system, where the party most likely to win is usually the one that can hire the highest-priced lawyers. It's also a very hard problem to fix.
I would definitely disagree that the laws protect small companies much more than big companies, having both founded small companies and worked at big companies. Big companies steal and copy every small business idea or IP with impunity anyway, because small companies do not have the resources to fight their case in court and still survive in business. I've never once heard of a startup successfully suing a gigantic company over IP rights and later replacing that big company off those IP rights; the best they can hope for is usually a negotiated settlement and an acquisition. Startups that actually want to survive based on IP usually do it by keeping it secret and working on problems that are not obviously a big market.
> Clearly you've never encountered the vibrant and exceptionally large world of Harry Potter fanfiction.
That is the point, it is fanfiction and not books written by giant corporations churning out clones as their main business practice. That makes a huge difference.
> Big companies steal and copy every small business idea or IP with impunity anyway
No they don't. Without these laws this would happen with every new rising startup: A really good guy applies and wants to work for you. First day he gets to see your code he sends it all in an email to his old company, quits and gets a huge bonus from them. The next day that company launches a clone using your codebase, with your branding and they then start to put a lot of people to use the "embrace, extend extinguish" practice where their part is interopable with your part but yours isn't with theirs.
Big companies can't do this today, but if you legalised it then they would do it. Do you see the difference here? And worst is, this is super cheap to do, so big companies could do it for every single startup that gets more than a thousand users, at that point their branding isn't strong enough to protect them from a bigger company taking over their branding entirely. When you search Google for your product the top result would be their perfect clone of it, looking and behaving 100% as it should.
> I've never once heard of a startup successfully suing a gigantic company over IP rights and later replacing that big company off those IP rights
That is because every single big company already knows where the line is and just toes it, they wont steal things in a too blatant manner since then there are no lawyers good enough to save them. If you move the line they will start to get more blatant about it, if you remove it entirely then they will do what I talked about above.
Thiel's argument, to the extent it's valid at all, doesn't prove that monopolies are good for consumers (or workers, for that matter). It only proves that monopolies are good for monopolists.
> Without external restraints, any sufficiently large company will focus on eliminating competition either through pricing them out of the market or just outright buying them.
The counterargument is that this only happens in markets with high barriers to entry, which in turn are mostly caused by regulatory barriers.
For example, the government makes permanent spectrum auctions, so if all the holders of spectrum merge together, no new competitors can enter. Suppose instead they held a new auction every year or every month for use of the spectrum in a given region until the next auction. Then mergers wouldn't prevent competitors from entering; a new competitor goes to the next auction, places a bid and can get spectrum to launch a competing provider.
It's clear that this theory is sometimes true -- that regulatory barriers can do this. Whether it's always the cause is hard to say and depends mostly on how you define what "regulatory barriers" means. But consider the consequences either way.
If there are regulatory barriers causing monopolies, you have to break them up. If there are some other things causing monopolies, you have to break them up. Monopolies are bad. And breaking them up, if they are caused by regulatory barriers, can hamper the entities lobbying to keep the regulatory barriers.
The question is what comes after. You don't want them to just reform again, right? Antitrust is a necessary evil, but still an evil -- still means you had a monopoly for long enough to have to bust it up. So if it's mostly or entirely regulatory capture which is causing them, we still need to address that. And then we don't need antitrust enforcement as often.
But we still need it whenever a monopoly/oligopoly forms. That's just not a thing that can remain.
>> Without external restraints, any sufficiently large company will focus on eliminating competition either through pricing them out of the market or just outright buying them.
> The counterargument is that this only happens in markets with high barriers to entry, which in turn are mostly caused by regulatory barriers.
Not necessarily. For instance: if the barriers to entry are zero but the monopoly can price things below cost (e.g. due to cash reserves or strength in other markets), it can bury any competitor. The mere existence of that ability could have a deterrent effect that prevents competitors from forming in the first place.
> For instance: if the barriers to entry are zero but the monopoly can price things below cost (e.g. due to cash reserves or strength in other markets), it can bury any competitor. The mere existence of that ability could have a deterrent effect that prevents competitors from forming in the first place.
If barriers to entry are zero, the deterrent doesn't exist, because the deterrent works by forcing the competitor to pay the cost of entry without ever making any profits to recover it.
Now suppose barriers to entry are low. Not even zero -- say it's $10,000. Some individual shows up, pays the $10,000, and the monopoly slashes prices so they can never recover their $10,000. But they got into it because they're a stubborn former customer who doesn't like how they've been treated, so making billions of dollars isn't the point. Their goal is to screw the monopolist. Which means all they have to do is sit on the ability to make product indefinitely and use it as soon as the monopolist attempts to raise prices above cost.
To prevent this the monopolist would have to sell below cost indefinitely. But in that case the potential competition is keeping them in check as much as actual competition would.
And this works even better when disgruntled former customers get together, so that it's not one guy willing to pay $10,000 to spite the monopolist but 10,000 customers each willing to pay $1.
Where this falls down is when the price of entry becomes billions and involves a major risk of failure.
I mean, I’m pretty sure it fails down when the theory relies on people willing to burn capital solely to stick it to someone else. That’s less like innovation and investment and more like warfare.
It also runs counter to all observed behavior. A lot of these regulatory barriers can be overcome by money and we don’t see disgruntled people/groups banding together to provide services or goods at a loss
> Which means all they have to do is sit on the ability to make product indefinitely and use it as soon as the monopolist attempts to raise prices above cost.
You're underestimating the economic tools at the disposal of large companies. Lucrative contracts with suppliers that prevent selling to competitors, vertical integration where they just buy the suppliers outright, attack advertising, poaching employees, etc. A lot of these can happen even without active malice.
Selling below cost is just one of many tools. There are many many ways an economically powerful player can strongarm competitors into submission.
None of these are foolproof (and nothing in politics or economics is), but they all make the barrier to entry higher, sometimes almost impossibly high even in the absence of regulation (that is to say thinking of barrier to entry as something that is independent of a monopoly is not a good model, monopolies are intrinsically a barrier to entry).
Many barriers to entry are caused by regulation, but not all, and perhaps not even most.
Some problems are just hard, and tend to favor incumbents with economies of scale. Until very recently (post-GDPR), there were no regulatory barriers protecting Search, for example; nevertheless, new entrants found it very difficult to get traction because search is a hard problem. Same goes for putting up cell towers, and burying fiber lines, and maintaining an electric grid.
I'd also argue that most oligopolies aren't formed by technical or government constraints, but rather by branding and consumer behavior. Consumers usually have a desire to stick with familiar, trusted brands, and to try new brands only when they've been recommended by people they trust. This creates barriers to new entrants, because you don't start out with any baseline trust and you have to compete against companies that have been in use for a century. There's nothing technically difficult about bottling carbonated sugar-water; regardless, Coca-Cola enjoys enormous margins because it's ingrained in the habits of hundreds of millions of people.
When there's actual regulatory capture, we should address that, and untangle the regulations so new firms can enter. But don't expect that solving regulatory capture is going to fix all instances of monopoly.
Spectrum is kind of a weird case though because it kind of has to be monopolistic - if you allow multiple, independent systems to share the same frequency band, none of them will work.
> Suppose instead they held a new auction every year or every month for use of the spectrum in a given region until the next auction.
This would work if the government or some common third party were responsible for putting up towers (and lease them to the telecoms like MVNOs), but as it is the telecoms build and operate the towers themselves, and the hardware loadout changes slightly depending on which frequency bands that telecom is allowed to use.
> Spectrum is kind of a weird case though because it kind of has to be monopolistic - if you allow multiple, independent systems to share the same frequency band, none of them will work.
In theory you could actually do this by using TDM with real time auctions for spectrum access.
But "monopoly" is still the wrong word because you don't have to allocate 100% of the spectrum to the same company. If there are a hundred and they each have a "monopoly" on a specific 1% of it, they're still in competition with each other.
> This would work if the government or some common third party were responsible for putting up towers (and lease them to the telecoms like MVNOs)
So have the third parties do that. "That would work if we do that thing that would work" means it would work.
> The counterargument is that this only happens in markets with high barriers to entry, which in turn are mostly caused by regulatory barriers.
There are hundreds of entire industries that have gigantic barriers to entry no matter what the regulations are. Covering the country in cell towers, building fleets of container ships, designing an operating systems and full suite of applications — these things aren't cheap
That's only because you're defining the market as "has an entire fleet of container ships," which is just assuming the existence of a consolidated industry.
Each container ship could be its own entity and then you just need marketplaces for people to hire them to ship things.
You don't have to build a national cellular network, you can put up one tower and then sell service to a market of MVNOs which buy service from different tower providers in different regions.
Every piece of an operating system doesn't have to be built by the same entity. See Linux. For that matter, see macOS, which is full of BSD code written by many separate entities.
You're grossly underestimating transaction costs. It is vastly preferrable from a company's perspective to be able to make 1 deal with 1 company that has many ships, as opposed to many deals woth many companies that have 1 ship each. Reducing that cost ends up looking like Uber, where you've just moved your monopoly point to the controller of the marketplace.
Each individual deal an entity makes takes time and money.
The transaction costs problem is when you have 100,000 ships and 100,000 customers and it becomes ten billion individual relationships.
You do solve this with things like Uber, but such things don't themselves have to be a monopoly, because you don't have to make it 100,000:1, you can make it 100,000:20 and have twenty competing marketplaces but still not an explosively large number of separate relationships.
This works even better with federated marketplaces. There are a lot of problems with the international banking system, but the general idea that someone in New York can make a wire transfer to someone in London even though they each use a different bank is based on protocols rather than a single centralized world monopoly bank, and in that respect is better than the more centralized alternative.
What I mean is, it assumes the industry has to operate as it does when consolidated, i.e. that the market can only exist as conglomerates with fleets of container ships and not individual container ships shipping freight as separate entities.
It's like saying the trucking market has high barriers to entry because you have to buy a fleet of trucks, which only billionaires can afford, and individual owner operators are impossible. Obviously not.
Not entirely... there's a tradeoff. People forget that monopolies can be a good thing in that it can force a standard. For example, if English were said to have a monopoly on language, it would become very easy to speak and communicate around the world, as it would be the only language spoken everywhere. Contrast, if we have 200 versions of spoken languages, we'd have communication barriers to overcome when we try to communicate with someone foreign.
> For example, if English were said to have a monopoly on language, it would become very easy to speak and communicate around the world, as it would be the only language spoken everywhere. Contrast, if we have 200 versions of spoken languages, we'd have communication barriers to overcome when we try to communicate with someone foreign.
You don't need a monopoly to do this because people can be bilingual. English is the de facto language of international websites on the internet, so people in Spain who speak Spanish and English and people in Russia who speak Russian and English go to Twitter or Reddit and talk to each other in English.
The same is true of internet standards. Everybody uses TCP/IP. Everybody. But nobody has a monopoly on it and nobody is prohibiting anyone from using a competitor out of anything other than network effect. If IPv8 turns out to be super amazing and has many advantages that overcome the inertia of IPv4, everyone could switch. Which is the thing you don't get with a corporate monopoly.
>a dominant protocol of a certain domain where there's no other widely used alternative: TCP/IP
>a dominant business of a certain industry where there's no other widely used alternative: monopoly
I think you might be missing the point I'm making. If you carefully re-read what I wrote, I never said monopolies came without bad properties or were immune to being bad. I also never said protocols were in fact the same things as businesses. I merely pointed out a good tradeoff people aren't acknowledging: Monopolies can provide a common, standard of something which can make certain things easier (just like TCP/IP does). And that's not the same as saying: "TCP/IP comes without problems..."; "monopolies come without problems..."; "TCP/IP is a monopoly..."
Also, please don't take HN threads further into generic ideological battle—on internet forums, that's a step towards repetitive, dumbed-down discussion that usually just turns nasty.
US is a very, very regulated economy. And if you go into securities space, you basically can't even slice a piece of bread without a lawyer.
There are countries with much lower amount of regulation, without everything rolling into one giant monopoly.
I would say it is exactly that legal minefield, and active dirigisme that greatly distorts natural conduct of business into non-stop search of how to game the policy.
One thing deserving a look is to what length US legal system is set to go to intervene into sale of public companies, which is taken as purely a contractual matter in between two companies, rather than dispute over "fairness" in pretty much every normal country.
An outright fraud should of course be prevented, but courts should not be allowed to order somebody to basically be compensated for a bad deal.
Your theory is that Microsoft and Google and Facebook ended up with monopoly power because their industries were just too darned regulated at the time they established themselves?
The regulations may not have existed at the time these companies established themselves, but could have evolved over time. It's a known practice of larger corporations to promote regulations that take them little effort to adhere to. However, those same regulations raise the bar for startups to gain entry and compete in an industry. Ironically enough, it's the regulations themselves that become anti-competitive.
This isn't true for regulations categorically, to be sure- the established companies can wield lobbying power for particular regulations to pass. That makes them look good in the public eye, the government wins for adding "oversight", but the actual competitive landscape becomes more encumbered, not less.
Sure, regulations are a way already-established monopolies can entrench dominance. But given that major new monopolies came up in low-regulation areas of business, regulation is not a primary driver of why they exist.
> It's a known practice of larger corporations to promote regulations that take them little effort to adhere to. However, those same regulations raise the bar for startups to gain entry and compete in an industry. Ironically enough, it's the regulations themselves that become anti-competitive.
This point about "regulatory capture" is a often brought up as a clever anti-regulation/free market parry, to create a demotivating feeling of "damned if you do, damned if you don't" that breaks in the free marketeers' favor.
I think the rhetorical tactic only really works if you look at part of the problem in isolation, and it's eliminated or at least mitigated with the consideration of action in other areas (e.g. more aggressive anti-trust/pro-competition regulation, or the kind of oversight regulated monopolies get).
There are countries with such little regulation, and thus not enough of a reliable economic or market framework that the economy can't even work it's way up to the point where companies can make good medium and long term decisions that payoff.
Microsoft evading all sorts of anti-monopoly regulation (in a scene of waning anti-monopoly enforcement), caused them to destroy all sorts of smaller businesses.
That is one my my complaints. But that doesn't mean we shouldn't also ensure competitive markets.
But it isn't so much that the regulation is designed to protect the incumbent, it is:
- the volume of regulations requires a compliance overhead that is more easily amortized by larger firms
- incumbents are involved in the design (or provide feedback) into the regulations such that they are able to comply specific rules, which might not actually fulfill the intent of the protecting the public. The process of codifying and validating practices to check boxes is often just waste.
I don't have any good resources off-hand (other than what shows up in a quick search), but my "best practices" are to always squash and keep PRs as small as possible.
When a working branch falls behind main, I prefer to rebase it instead of merging from main to keep it up to date. However, if you've already pushed your working branch to a repo, after rebasing you need to `git push --force` - which is a problem if there are others who have previously cloned the working branch.
Squashing also introduces problems when you are resolving merge conflicts in your branch: squashing doesn’t preserve merge conflict resolution so you end up having to resolve those conflicts again after merging.
Great comment and spot on. You can avoid the issue with force by using `—force-with-lease` which won’t push the force if there’ve been changes upstream.
That’s a bunch to type so I alias it to `fwl` In `~/.git config` and use it after rebases.
It looks to me like GP may have commented without reading the article. "Mergers ruin everything" could be misread as "Merges ruin everything". Just reading the title could lead someone to think this was a discussion about git best-practices.
As matt says, you can pay for the truth or get lies for free ;) I've been a subscriber for two years and a paid one as soon as it was offered. Really recommend it! We also have open forums and a discord to talk about anything anti-monopoly.
It does sound cool but I wish there was like a dollar sub. I already pay so much in Patreon fees…I see there’s a free subscription so I’ll see if I keep reading that
I want substack to have some kind of overall subscription where I can allocate my overall subscription spend to the newsletters, rather than having a per-newsletter fee.
Maybe something like Kindle's system that has some kind page-read/engagement metric against the monthly revenue pool.
Maybe something where I get discounting for buying in bulk. 10 newsletters for the price of 5 a la carte or whatever, and I can allocate my "newsletter credits" at will, even switching between them.
Also how can libraries and other institutions subscribe and delegate their access?
Maybe 1/10 of of the entries are exclusive to subscribers, and they're 95% of the time "open threads" where the commenters are talking to each other with Stoller giving them a few topics to kick it off. So really, the price is $0/mo.
>Americans pay $50 billion more per year than Europeans for similar cell phone service, which is about $14/month in pure profit for every single American
This doesn't really add up. T-mobile's net income is 3-4 billion a year on 80 billion on revenue. They're not generating monopoly profits.
IMHO I don't think you can really merge your way into a monopoly. The existence of multiple companies to merge is effective proof that whatever business they're in is not a natural monopoly.
Look at social media as an example. Facebook is the dominant player but in the course of their existence Instagram, WhatsApp, TikTok, and Snapchat have all become billion+ companies while another dozen or so have made it to 100+ million. Allowing them to buy Instagram and WhatsApp didn't prevent the rise of Tiktok or the continued existence of Snapchat. There's no natural monopoly here and probably should be little concern to anti-trust regulators.
Compare with phones. You have a stable Android/Apple duopoly but it didn't come from mergers. It's a natural monopoly business so naturally monopolies formed. Facebook, Amazon, and Microsoft all trying to break into the market and failing miserably is also strong evidence. This should be a huge concern to anti-trust regulators.
Maybe "profit" is the wrong word. Anecdotally, the US has a lot of dedicated & spacious cell phone stores compared to other countries I've been in (where selling SIM cards is part of another store, like a 7-11 or an electronics store).
It's possible there's an extra $14/month in revenue going towards cell phones as an industry but due to the competition such as it is, it's mostly being spent on more aggressive GTM expenses.
I always find it fascinating what monopolies are allowed in other countries. As a European I can only shake my head at the consolidation of the gaming industry right now. That would most probably not be allowed here. How can two companies buy up companies like Bungie and Activision? That's toxic to the economy imho.
Defining monopoly by marketshare is shallow. Best monopoly is when your customers switching costs are high. Thats why some of FAMG is with so good friends with Lawmakers. To provide political protection.
I am not from US, but what I see from my experience there is one huge problem with mergers (besides all other): too big to fail. If you become systematical player like big banks and if you intentionally or non-intentionally get in trouble. You will be bailed out, not go bankrupt. This turns on God mode for Corporations, this create intention become reckless.
If big banks would not be bailled out in 2008. Most likely we would see at least some kind of fragmetation.
American cell company workers make more than their European counterparts on gross basis. Is this adjusted for in the comparison? Cellular companies have a lot of employees and comp makes up a huge portion of their cost structure. (ATT has over 230,000, Verizon more than 130,000)
The're is a huge difference between telcos and social media sites.
Anyone can make a new instagram... just write some code in your free time, get (very lucky, and get) some VC to throw some money into your company, and you become a new instagram... then either get forgotten in a few years, or get bought for some huge amount of money. Instagram had just 13(?) employees by the time facebook bought them (or some other very low number, i forgot).
But a telco? No way... virual operator maybe, but there's no real money in that, but just starting to build basestations is impossible, you need millions and millions to even get frequencies, and you're already late for those, and there's basically no realistic way for a new mobile operator to come to an existing market now.
So, when will there be a new frequency auction for apple to get frequencies? How much does it take to get a build permits for each and every one of the new basestations needed from every local municipality (or whatever governing body gives out permits for that)? How long does it take to get permits to dig out and over all the roads and raileways to lay fiber for all those basestations?
Yes, apple has a lot of money, yes apple can buy T-mobile, but for apple to build a tower in bumfuck alabama, that'll take years and years of bureaucracy and pain, and there are a lot of bumfucks around every country.
Surely one factor in this is America being significantly less densely populated than Europe? One operator that's got some popularity in my part of the middle of the country is UScellular, which fills in gaps serviced by none of the bigger companies.
There are coherent, legitimate reasons for some degree of consolidation within industries. Technology sharing, combining assets, reducing the overhead from separate operations and larger scale in theory lead to a more efficient business, enabling cost reductions that create both profits and a competitive advantage.
Consolidated industries can be highly competitive. An industry with multiple large players is more competitive compared to a single large player surrounded by many small players.
I acknowledge this is not uniformly the case. Mergers do definitionally eliminate competition between the merged players and efficiency gains do not always materialize. But, the broad theory is well established and has shown success across practically any industrial vertical.
It's worse: every possible advantage of mergers is a good thing made impossible by competition. Mergers are a sign of the market itself being inefficient.
While this is true, to some extent, it also implies that "being inefficient" is necessarily bad.
Optimizing for efficiency has led to some of the worst problems we've seen in recent years. Just off the top of my head, "lean staffing", which is an abusive management practice, and the inability to comfortably withstand shocks to the system, as we saw when COVID hit.
A merger is an admission that a company has no better internal development project to put money into. (This also applies to stock buybacks.)
This is an admission that the management has failed. Doubly so if they simply shut down the acquired business.
The proper "capitalistic" solution would be to allow the competitor to grow big and kill the dinosaur.
We need to block mergers even from a purely "capitalist" viewpoint because it prevents the efficient new competitors from displacing the old inefficient ones.
It's also a testament to how "endless growth" has become an unquestioned, but ever more stupid 'goal'.
If you can innovate at a certain scale, stay successful within x standard deviations year over year, paying dividends and making profits...why MUST it always end up being underpinned by 'the market' demanding endless scaling.
If what you want is to expand horizontally or the so-called pie gets bigger and more to gain? Fine. But that, as the end all and be all itself, is growing quite daft.
Today I learned that in the US, cheerleading is an industry. I always thought this was mostly done by enthusiastic school and college kids, not much money in it. How naive of me :-)
They also manipulate the competitions to favor those purchasing their products.
There’s more than blocking advertising and distribution at these competitions. Webb admitted that in at least one contest, cheerleaders got more points if they used more Varsity equipment as props. In other words, it’s not just a rigged game as some sort of metaphor, Varsity actually rigged the rules of its cheerleading competition to coerce purchases of Varsity products. Indeed, Webb has testified in court that the competitions exist solely for the “promotion of his cheerleading supply business.”
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[ 7.5 ms ] story [ 518 ms ] thread"American antitrust laws date from a time when changes in transportation, communications, and manufacturing technologies generated unprecedented economies of scale, fueling the rise of industrial behemoths. Today, dramatic advances in information technology, combined with globalization, are fueling the growth of large and efficient “superstar firms” that are capturing a growing share of economic activity. The emergence of the tech titans is especially dramatic.
These economic conditions call for a reinvigoration of antitrust enforcement in the United States to promote competition, protect consumers and workers, and spur economic growth. These valuable aims can be achieved by taking a tougher stance toward mergers involving market leaders and by vigilantly preventing dominant firms from engaging in conduct that excludes their rivals. However, moving in that direction is a slow process, requiring the antitrust enforcement agencies to take the lead and convince inertial and possibly skeptical courts to follow. Those who expect dramatic and rapid changes in antitrust will be disappointed, unless new legislation is passed. Likewise, those who expect antitrust to solve problems unrelated to competition will be disappointed. Stronger antitrust enforcement, while needed, is not a substitute for badly needed regulations directed at reducing the political influence of corporations, protecting privacy and data security, and limiting the spread of disinformation."
[1] https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.33.3.69
When the more reactionary members of the legal profession moved beyond the various topics that interested then in the 50s and 60s, the new generation moved on to business matters, as big companies were getting tired of dealing with unions and tight regulatory controls.
Over time, the interpretation of the antitrust law was changed by “judicial legislation” to narrowly define monopolies to a standard involving price increases for consumers. That’s why the government allows, say oil distribution infrastructure to regionally consolidate to two players, while Staples and OfficeMax cannot merge despite their irrelevance.
The current system incentives cartels. So when Microsoft buys Walmart or Google buys Verizon, that will be fine. 20 years from now, 80% of consumer spending will probably be directed at a half dozen companies.
Eventually, something really bad will happen. The US will get spanked in a war, a regional natural disaster will trigger a famine, etc. At that point, maybe you’ll see some change. But change is slow - the US House passed anti-lynching legislation for like 40 years and it never got out of Senate committee until Lyndon Johnson championed it.
And many of today's biggest tech companies largely get a pass because antitrust law focuses on price and ignores all other negative externalities that result from monopolistic behavior like quality, timeliness, ease of access to customer service, user privacy, and corporate social responsibility. But the product is "free" so how can the consumer possibly derive any further benefit?(/s)
When there is competition in a market not only do prices fall but the customer experience improves. Businesses don't (and can't) compete on price. They compete on value. But US antitrust law ignores value entirely and consumers everywhere pay the price.
Considering tons of people's 401k's are basically made up of the biggest companies in the US thanks to index funds there is a lot of incentive to not fuck with those companies.
If any leaders gets really serious about breaking up some of the Big Tech companies you'll see enormous pressure to get them out of office ASAP.
I would think that index funds vs. individual stocks would translate to investors caring less about particular firms and more about economic activity and the resulting increases in asset values.
Pressured out of office? Most U.S. politicians have now spoken out against Big Tech, the Department of Justice and several states have active antitrust suits, a House report concluded that Amazon, Facebook, Apple, and Google have monopoly power and should be split up [5], etc.
1. https://altitudemarketing.com/blog/competitors-buying-my-nam...
2. https://www.wired.com/story/google-antitrust-ad-market-lawsu...
3. https://docs.house.gov/meetings/JU/JU05/20190716/109793/HHRG...
4. https://en.wikipedia.org/wiki/Telecommunications_Act_of_1996...
5. https://arstechnica.com/tech-policy/2020/10/house-amazon-fac...
>Considering tons of people's 401k's
I'm surprised to hear this, because my understanding is the opposite. Something like 60% of Americans have a 401k, but the numbers for how much they have in them is grim. Almost everyone is underfunded, less than 20% of Americans made a contribution last year, and overall 9/10 stocks are owned by about 1/10th of the population (and rising).
>If any leaders gets really serious about breaking up some of the Big Tech companies you'll see enormous pressure to get them out of office ASAP.
Even if it did tank 401ks, I don't think you can be so sure about the public reaction to it. I can't claim to perfectly understand human behavior, but I'm very confident that it not well predicted simply by applying a value-based analysis.
[citation needed]
> Considering tons of people's 401k's are basically made up of the biggest companies in the US
When defined benefit (pension) funds dominated private retirement, guess what they held? (And if you say “but people weren't exposed to risk, because ‘defined benefit’”, guess what happened when funds failed...)
Bad things like... a supply chain crisis:
https://prospect.org/economy/we-were-warned-about-the-ports/
This is wrong. The "political influence of corporations" comes from their size and vertical integration. Google has outsized influence in politics because it controls the dominant search engine and YouTube etc., which gives political influence to every other subsidiary of the same company in a way that would not occur if they were independent entities.
Privacy and security problems are proportional to size. Bigger entities attract stronger attacks (because the benefit to the attacker is larger) and then more people are compromised at once.
Misinformation is primarily a problem as a result of filter bubbles that prevent people from hearing the rebuttal to incorrect arguments. Diversity of information distribution addresses this.
Without external restraints, any sufficiently large company will focus on eliminating competition either through pricing them out of the market or just outright buying them.
The only reason the US has more than one cellular network right now it because the government has prevented multiple attempts at mergers, and even with that effort we're down to three.
edit: if you disagree, I'd love to hear your opinion. The government has entire agencies dedicated to maintaining competition in the economy. If monopoly was not the inevitable end result of capitalism, then such agencies would not be required.
There actually was a monopoly in the telephone system[0] in the US that had to be broken up via antitrust.
[0] - https://en.wikipedia.org/wiki/Bell_System
Note that giving all the power currently held by capitalists to politicians is also consolidation of power, that is bad. Or vice versa. So giving the government too much power over companies will hurt on the other end, balance is needed and it is hard to say where the line should be drawn.
They were tightly regulated, which worked well until technology moved ahead of the operations.
Tight regulation works well when change rates are slow and you need to make capital investments. Short term decision making driven by final optimization always constrain capital investment. That’s why your power grid is less robust than it was 40 years ago.
The pattern there is that small producers for the most part fail and fizzle out. The few successful ones get snapped up by the big players.
https://www.forbes.com/sites/dalebuss/2019/04/30/fortress-ma...
In general you are right that "external" restraints are needed to prevent a firm from competing so aggressively or moving to integrate horizontally. However, the external restraints are far and away most often free market forces.
Economies of scale are nothing to laugh at, especially in ventures with very high fixed costs. However, integration is also high risk because it comes with significant downsides.
I don't care to analyze the US cellular market, but I would be curious to what extent the way the government has regulated this market has pushed it toward mergers. And perhaps that is a good thing to have a small number of national cell carriers. People who grew up in the early telephone era would probably agree its better than having to navigate the byzantine maze of regional networks and long distance charges.
There are other mostly unregulated wireless markets that might serve as interesting case studies though. Wireless ISPs have been a booming business for decades and is still extremely dispersed in ownership. They're facing some disruption now from Starlink but that is likely years away from posing a serious industry challenge.
I believe that auctioning spectrum is a huge factor in creating monopolies because only the biggest companies get spectrum. No small guy can afford to compete in the auction. I don't think that auction (to the highest bidder) is the best way to allocate spectrum if the goal is to preserve competition.
The government also has agencies dedicated to maintaining monopoly. It is done through patents, copyright, trade secret laws.
It's important to maintain a balance between completion and monopoly. Monopoly allows collecting huge margins that could be invested into further research that would not be otherwise be feasible financially.
Without those laws the big companies would steal and copy every small business idea or IP with no impunity. The laws protect small companies much more than big companies. Of course big companies sits on a lot of patents so they are still powerful, but not as powerful as if they could just abuse espionage etc as much as they wanted.
For example, what do you think would happen with the harry potter books? Others would just print their own copies, write their own books with the same characters and names, and the company with the biggest marketing budget to throw around would win and sell the most. That doesn't seem very good for the little guy to me, rather it would make it basically impossible for the little guy to compete.
On the Harry Potter thing, "the biggest marketing budget would win and sell the most" is indeed what happens, but the original creator still has huge power. For example if George Lucas (who sold the Star Wars IP to Disney) decided to publish his "fan fiction" screenplay for Star Wars Episode VII, Disney would have a massive continuity problem because he's the original creator—no matter how much The Mouse spends on marketing. That is what Disney paid him $4B for, to not do that.
Further, isn't "people will write new stories for characters they love" a good thing? We could certainly use fresh ideas rather than this rut of reboots and sequels. In that sense, letting The Market winnow the winners from the chaff would improve consumer offerings. It's happened before: remember that Twilight fan fiction that became a literary sensation and major movie series?
Clearly you've never encountered the vibrant and exceptionally large world of Harry Potter fanfiction.
Anyway, IP laws usually benefit incumbents simply because small companies have neither the legal budget nor attention to fight a lawsuit. This is a recurring problem in the legal system, where the party most likely to win is usually the one that can hire the highest-priced lawyers. It's also a very hard problem to fix.
I would definitely disagree that the laws protect small companies much more than big companies, having both founded small companies and worked at big companies. Big companies steal and copy every small business idea or IP with impunity anyway, because small companies do not have the resources to fight their case in court and still survive in business. I've never once heard of a startup successfully suing a gigantic company over IP rights and later replacing that big company off those IP rights; the best they can hope for is usually a negotiated settlement and an acquisition. Startups that actually want to survive based on IP usually do it by keeping it secret and working on problems that are not obviously a big market.
That is the point, it is fanfiction and not books written by giant corporations churning out clones as their main business practice. That makes a huge difference.
> Big companies steal and copy every small business idea or IP with impunity anyway
No they don't. Without these laws this would happen with every new rising startup: A really good guy applies and wants to work for you. First day he gets to see your code he sends it all in an email to his old company, quits and gets a huge bonus from them. The next day that company launches a clone using your codebase, with your branding and they then start to put a lot of people to use the "embrace, extend extinguish" practice where their part is interopable with your part but yours isn't with theirs.
Big companies can't do this today, but if you legalised it then they would do it. Do you see the difference here? And worst is, this is super cheap to do, so big companies could do it for every single startup that gets more than a thousand users, at that point their branding isn't strong enough to protect them from a bigger company taking over their branding entirely. When you search Google for your product the top result would be their perfect clone of it, looking and behaving 100% as it should.
> I've never once heard of a startup successfully suing a gigantic company over IP rights and later replacing that big company off those IP rights
That is because every single big company already knows where the line is and just toes it, they wont steal things in a too blatant manner since then there are no lawyers good enough to save them. If you move the line they will start to get more blatant about it, if you remove it entirely then they will do what I talked about above.
https://web.archive.org/web/20141215224757/https://www.wsj.c...
http://blog.peterdonis.com/opinions/monopoly-money.html
The counterargument is that this only happens in markets with high barriers to entry, which in turn are mostly caused by regulatory barriers.
For example, the government makes permanent spectrum auctions, so if all the holders of spectrum merge together, no new competitors can enter. Suppose instead they held a new auction every year or every month for use of the spectrum in a given region until the next auction. Then mergers wouldn't prevent competitors from entering; a new competitor goes to the next auction, places a bid and can get spectrum to launch a competing provider.
It's clear that this theory is sometimes true -- that regulatory barriers can do this. Whether it's always the cause is hard to say and depends mostly on how you define what "regulatory barriers" means. But consider the consequences either way.
If there are regulatory barriers causing monopolies, you have to break them up. If there are some other things causing monopolies, you have to break them up. Monopolies are bad. And breaking them up, if they are caused by regulatory barriers, can hamper the entities lobbying to keep the regulatory barriers.
The question is what comes after. You don't want them to just reform again, right? Antitrust is a necessary evil, but still an evil -- still means you had a monopoly for long enough to have to bust it up. So if it's mostly or entirely regulatory capture which is causing them, we still need to address that. And then we don't need antitrust enforcement as often.
But we still need it whenever a monopoly/oligopoly forms. That's just not a thing that can remain.
> The counterargument is that this only happens in markets with high barriers to entry, which in turn are mostly caused by regulatory barriers.
Not necessarily. For instance: if the barriers to entry are zero but the monopoly can price things below cost (e.g. due to cash reserves or strength in other markets), it can bury any competitor. The mere existence of that ability could have a deterrent effect that prevents competitors from forming in the first place.
If barriers to entry are zero, the deterrent doesn't exist, because the deterrent works by forcing the competitor to pay the cost of entry without ever making any profits to recover it.
Now suppose barriers to entry are low. Not even zero -- say it's $10,000. Some individual shows up, pays the $10,000, and the monopoly slashes prices so they can never recover their $10,000. But they got into it because they're a stubborn former customer who doesn't like how they've been treated, so making billions of dollars isn't the point. Their goal is to screw the monopolist. Which means all they have to do is sit on the ability to make product indefinitely and use it as soon as the monopolist attempts to raise prices above cost.
To prevent this the monopolist would have to sell below cost indefinitely. But in that case the potential competition is keeping them in check as much as actual competition would.
And this works even better when disgruntled former customers get together, so that it's not one guy willing to pay $10,000 to spite the monopolist but 10,000 customers each willing to pay $1.
Where this falls down is when the price of entry becomes billions and involves a major risk of failure.
It also runs counter to all observed behavior. A lot of these regulatory barriers can be overcome by money and we don’t see disgruntled people/groups banding together to provide services or goods at a loss
You're underestimating the economic tools at the disposal of large companies. Lucrative contracts with suppliers that prevent selling to competitors, vertical integration where they just buy the suppliers outright, attack advertising, poaching employees, etc. A lot of these can happen even without active malice.
Selling below cost is just one of many tools. There are many many ways an economically powerful player can strongarm competitors into submission.
None of these are foolproof (and nothing in politics or economics is), but they all make the barrier to entry higher, sometimes almost impossibly high even in the absence of regulation (that is to say thinking of barrier to entry as something that is independent of a monopoly is not a good model, monopolies are intrinsically a barrier to entry).
Some problems are just hard, and tend to favor incumbents with economies of scale. Until very recently (post-GDPR), there were no regulatory barriers protecting Search, for example; nevertheless, new entrants found it very difficult to get traction because search is a hard problem. Same goes for putting up cell towers, and burying fiber lines, and maintaining an electric grid.
I'd also argue that most oligopolies aren't formed by technical or government constraints, but rather by branding and consumer behavior. Consumers usually have a desire to stick with familiar, trusted brands, and to try new brands only when they've been recommended by people they trust. This creates barriers to new entrants, because you don't start out with any baseline trust and you have to compete against companies that have been in use for a century. There's nothing technically difficult about bottling carbonated sugar-water; regardless, Coca-Cola enjoys enormous margins because it's ingrained in the habits of hundreds of millions of people.
When there's actual regulatory capture, we should address that, and untangle the regulations so new firms can enter. But don't expect that solving regulatory capture is going to fix all instances of monopoly.
Search startup DuckDuckGo uses Bing on the backend rather than building their own.
> Suppose instead they held a new auction every year or every month for use of the spectrum in a given region until the next auction.
This would work if the government or some common third party were responsible for putting up towers (and lease them to the telecoms like MVNOs), but as it is the telecoms build and operate the towers themselves, and the hardware loadout changes slightly depending on which frequency bands that telecom is allowed to use.
In theory you could actually do this by using TDM with real time auctions for spectrum access.
But "monopoly" is still the wrong word because you don't have to allocate 100% of the spectrum to the same company. If there are a hundred and they each have a "monopoly" on a specific 1% of it, they're still in competition with each other.
> This would work if the government or some common third party were responsible for putting up towers (and lease them to the telecoms like MVNOs)
So have the third parties do that. "That would work if we do that thing that would work" means it would work.
There are hundreds of entire industries that have gigantic barriers to entry no matter what the regulations are. Covering the country in cell towers, building fleets of container ships, designing an operating systems and full suite of applications — these things aren't cheap
Each container ship could be its own entity and then you just need marketplaces for people to hire them to ship things.
You don't have to build a national cellular network, you can put up one tower and then sell service to a market of MVNOs which buy service from different tower providers in different regions.
Every piece of an operating system doesn't have to be built by the same entity. See Linux. For that matter, see macOS, which is full of BSD code written by many separate entities.
Each individual deal an entity makes takes time and money.
You do solve this with things like Uber, but such things don't themselves have to be a monopoly, because you don't have to make it 100,000:1, you can make it 100,000:20 and have twenty competing marketplaces but still not an explosively large number of separate relationships.
This works even better with federated marketplaces. There are a lot of problems with the international banking system, but the general idea that someone in New York can make a wire transfer to someone in London even though they each use a different bank is based on protocols rather than a single centralized world monopoly bank, and in that respect is better than the more centralized alternative.
Well, consolidated industries currently exist, and they don't take too kindly to competition.
It's like saying the trucking market has high barriers to entry because you have to buy a fleet of trucks, which only billionaires can afford, and individual owner operators are impossible. Obviously not.
Not entirely... there's a tradeoff. People forget that monopolies can be a good thing in that it can force a standard. For example, if English were said to have a monopoly on language, it would become very easy to speak and communicate around the world, as it would be the only language spoken everywhere. Contrast, if we have 200 versions of spoken languages, we'd have communication barriers to overcome when we try to communicate with someone foreign.
You don't need a monopoly to do this because people can be bilingual. English is the de facto language of international websites on the internet, so people in Spain who speak Spanish and English and people in Russia who speak Russian and English go to Twitter or Reddit and talk to each other in English.
The same is true of internet standards. Everybody uses TCP/IP. Everybody. But nobody has a monopoly on it and nobody is prohibiting anyone from using a competitor out of anything other than network effect. If IPv8 turns out to be super amazing and has many advantages that overcome the inertia of IPv4, everyone could switch. Which is the thing you don't get with a corporate monopoly.
True, but it takes more work/effort to learn two languages than one. Whereas if we had one language (as in a monopoly), it'd be even simpler/easier.
>The same is true of internet standards. Everybody uses TCP/IP.
Yes, if protocols were businesses, they then could be thought of as having a monopoly on their domains.
>a dominant protocol of a certain domain where there's no other widely used alternative: TCP/IP
>a dominant business of a certain industry where there's no other widely used alternative: monopoly
I think you might be missing the point I'm making. If you carefully re-read what I wrote, I never said monopolies came without bad properties or were immune to being bad. I also never said protocols were in fact the same things as businesses. I merely pointed out a good tradeoff people aren't acknowledging: Monopolies can provide a common, standard of something which can make certain things easier (just like TCP/IP does). And that's not the same as saying: "TCP/IP comes without problems..."; "monopolies come without problems..."; "TCP/IP is a monopoly..."
https://news.ycombinator.com/newsguidelines.html
Also, please don't take HN threads further into generic ideological battle—on internet forums, that's a step towards repetitive, dumbed-down discussion that usually just turns nasty.
https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...
There are countries with much lower amount of regulation, without everything rolling into one giant monopoly.
I would say it is exactly that legal minefield, and active dirigisme that greatly distorts natural conduct of business into non-stop search of how to game the policy.
One thing deserving a look is to what length US legal system is set to go to intervene into sale of public companies, which is taken as purely a contractual matter in between two companies, rather than dispute over "fairness" in pretty much every normal country.
An outright fraud should of course be prevented, but courts should not be allowed to order somebody to basically be compensated for a bad deal.
This isn't true for regulations categorically, to be sure- the established companies can wield lobbying power for particular regulations to pass. That makes them look good in the public eye, the government wins for adding "oversight", but the actual competitive landscape becomes more encumbered, not less.
This point about "regulatory capture" is a often brought up as a clever anti-regulation/free market parry, to create a demotivating feeling of "damned if you do, damned if you don't" that breaks in the free marketeers' favor.
I think the rhetorical tactic only really works if you look at part of the problem in isolation, and it's eliminated or at least mitigated with the consideration of action in other areas (e.g. more aggressive anti-trust/pro-competition regulation, or the kind of oversight regulated monopolies get).
Microsoft evading all sorts of anti-monopoly regulation (in a scene of waning anti-monopoly enforcement), caused them to destroy all sorts of smaller businesses.
But it isn't so much that the regulation is designed to protect the incumbent, it is: - the volume of regulations requires a compliance overhead that is more easily amortized by larger firms - incumbents are involved in the design (or provide feedback) into the regulations such that they are able to comply specific rules, which might not actually fulfill the intent of the protecting the public. The process of codifying and validating practices to check boxes is often just waste.
Got any suggestions on the topic?
When a working branch falls behind main, I prefer to rebase it instead of merging from main to keep it up to date. However, if you've already pushed your working branch to a repo, after rebasing you need to `git push --force` - which is a problem if there are others who have previously cloned the working branch.
That’s a bunch to type so I alias it to `fwl` In `~/.git config` and use it after rebases.
Maybe something like Kindle's system that has some kind page-read/engagement metric against the monthly revenue pool.
Maybe something where I get discounting for buying in bulk. 10 newsletters for the price of 5 a la carte or whatever, and I can allocate my "newsletter credits" at will, even switching between them.
Also how can libraries and other institutions subscribe and delegate their access?
This doesn't really add up. T-mobile's net income is 3-4 billion a year on 80 billion on revenue. They're not generating monopoly profits.
IMHO I don't think you can really merge your way into a monopoly. The existence of multiple companies to merge is effective proof that whatever business they're in is not a natural monopoly.
Look at social media as an example. Facebook is the dominant player but in the course of their existence Instagram, WhatsApp, TikTok, and Snapchat have all become billion+ companies while another dozen or so have made it to 100+ million. Allowing them to buy Instagram and WhatsApp didn't prevent the rise of Tiktok or the continued existence of Snapchat. There's no natural monopoly here and probably should be little concern to anti-trust regulators.
Compare with phones. You have a stable Android/Apple duopoly but it didn't come from mergers. It's a natural monopoly business so naturally monopolies formed. Facebook, Amazon, and Microsoft all trying to break into the market and failing miserably is also strong evidence. This should be a huge concern to anti-trust regulators.
It's possible there's an extra $14/month in revenue going towards cell phones as an industry but due to the competition such as it is, it's mostly being spent on more aggressive GTM expenses.
I am not from US, but what I see from my experience there is one huge problem with mergers (besides all other): too big to fail. If you become systematical player like big banks and if you intentionally or non-intentionally get in trouble. You will be bailed out, not go bankrupt. This turns on God mode for Corporations, this create intention become reckless. If big banks would not be bailled out in 2008. Most likely we would see at least some kind of fragmetation.
Anyone can make a new instagram... just write some code in your free time, get (very lucky, and get) some VC to throw some money into your company, and you become a new instagram... then either get forgotten in a few years, or get bought for some huge amount of money. Instagram had just 13(?) employees by the time facebook bought them (or some other very low number, i forgot).
But a telco? No way... virual operator maybe, but there's no real money in that, but just starting to build basestations is impossible, you need millions and millions to even get frequencies, and you're already late for those, and there's basically no realistic way for a new mobile operator to come to an existing market now.
Yes, apple has a lot of money, yes apple can buy T-mobile, but for apple to build a tower in bumfuck alabama, that'll take years and years of bureaucracy and pain, and there are a lot of bumfucks around every country.
Consolidated industries can be highly competitive. An industry with multiple large players is more competitive compared to a single large player surrounded by many small players.
I acknowledge this is not uniformly the case. Mergers do definitionally eliminate competition between the merged players and efficiency gains do not always materialize. But, the broad theory is well established and has shown success across practically any industrial vertical.
Optimizing for efficiency has led to some of the worst problems we've seen in recent years. Just off the top of my head, "lean staffing", which is an abusive management practice, and the inability to comfortably withstand shocks to the system, as we saw when COVID hit.
This is an admission that the management has failed. Doubly so if they simply shut down the acquired business.
The proper "capitalistic" solution would be to allow the competitor to grow big and kill the dinosaur.
We need to block mergers even from a purely "capitalist" viewpoint because it prevents the efficient new competitors from displacing the old inefficient ones.
If you can innovate at a certain scale, stay successful within x standard deviations year over year, paying dividends and making profits...why MUST it always end up being underpinned by 'the market' demanding endless scaling.
If what you want is to expand horizontally or the so-called pie gets bigger and more to gain? Fine. But that, as the end all and be all itself, is growing quite daft.
It's goddamn inane.
https://share.summari.com/mergers-ruin-everything
There’s more than blocking advertising and distribution at these competitions. Webb admitted that in at least one contest, cheerleaders got more points if they used more Varsity equipment as props. In other words, it’s not just a rigged game as some sort of metaphor, Varsity actually rigged the rules of its cheerleading competition to coerce purchases of Varsity products. Indeed, Webb has testified in court that the competitions exist solely for the “promotion of his cheerleading supply business.”
https://mattstoller.substack.com/p/this-is-not-a-democracy-i...