5 ms·

Haven't we learned that the "break 'em up" fix for monopolies doesn't achieve the desired results? Why not simply get our government to do their jobs and REGUL

Haven't we learned that the "break 'em up" fix for monopolies doesn't achieve the desired results? Why not simply get our government to do their jobs and REGULATE away practices that are not in the public's interest?

seneca 5y ago
Because regulation, even when well-meaning, acts as a barrier to entry and keeps competitors from even getting off the ground. Stifling small companies stagnates the industry and smothers innovation. You can play whack a mole with their bad behavior, but large companies can come up with new dark patterns way faster than you can regulate them with precise and well thought out regulation. You just end up with entrenched interests and an ossified industry. That's not even touching on regulatory capture.
- shakezula 5y ago
  Regulatory capture is the true evil of our current setup. Ajit Pai was inevitable, and he won’t be the last or even the worst.
shakezula 5y ago
The break them up and fix them approach actually worked wonders for the end consumers in Bell, Standard Oil, etc…
deleted 5y ago
[deleted]
majormajor 5y ago
> Haven't we learned that the "break 'em up" fix for monopolies doesn't achieve the desired results? What do you think are failed examples of this? Even though you had eventual re-consolidation, the post-breakup phone industry seemed like a much more interesting and competitive place than the one before it. The fix for re-consolidation, of course, could be pretty simple... Very few people want to do the harder, more innovative, more interesting thing if they can make a comfortable living doing what they've always done. This applies to regulators as much as to companies. We haven't found any better tool to force companies to be in touch with their customers and do what the customers want than competition, but we also have an economic system that encourages consolidation (because competition is HARD!). So the role of government to break things back up to keep competitive incentives feels quite natural. The market isn't gonna do it itself.
- smolder 5y ago
  I can think of some incentives that would prevent hyperconsolidation. Sliding scale taxation based on some formula including a ratio of revenue to people employed. Maybe take away big company's litigation advantage by making them pay an amount somewhat proportional to their size into a pool that covers the total costs of litigation. Let them recover money on wins. I think such incentives/disincentives would be met with the usual: "but if we're hostile to big business and restrict growth, they'll leave the US for greener pastures!". Is that really so bad? Let companies that are hostile to the US public leave the US. Penalize their advantage away in tariffs or something for fleeing to weaker regulatory environments. ISPs can't leave and yet we don't seriously regulate them into doing public good or having a competitive market, which is mysteriously somehow contentious politically. Many others can't leave because their talent pools aren't willing to go with them, and that would be even more true if the workers had a government that worked for us. There is a problem with government being full of people who would rather stay on the receiving end of a money hose than pinch it off for anyone's benefit. All the other apparent problems seem to me to be excuses to protect that. Check greed or we all suffer. You can check greed without stifling ambition. It's a valid choice.
danShumway 5y ago
> Haven't we learned that the "break 'em up" fix for monopolies doesn't achieve the desired results? Breaking up has achieved excellent results before, as far as I can tell. It's not a permanent solution to the problem, but neither is brushing my teeth. It might be OK to have a process that needs to be periodically repeated when companies get out of control. It might even be preferable to large legislative efforts that significantly change what companies can and can't do. Are people really mad that maps show up in Google search, or are people mad that Google owns the world? I'm not sure, but maybe it's better to precisely target a temporary solution at the actual problem. In general, I'm more on board with bills about vertical integration than I am with some other solutions people have proposed. But I'm also not necessarily opposed to skipping the whole thing and directly breaking up those companies instead. It seems to have had good effects in the past. And while I do think vertical integration is a problem, I'm not 100% certain that it's the biggest problem or that this is the best solution. I'm watching these bills kind of carefully.
- andreilys 5y ago
  Breaking up has achieved excellent results before, as far as I can tell. Source?
  - danShumway 5y ago
    Railways, Bell. Source: I use the Internet today and can see the effects firsthand, I'm part of an industry that exists pretty much because of that breakup. This stuff is pretty well documented.
- ethbr0 5y ago
  Approached from a novelty perspective, I think the exception is size and profit margin. These companies are simply too big (in terms of cash on hand & ability to generate profits). That's always been the problem with monopolies -- they get there, and then no one can compete. Which in this case seems a consequence of first mover advantage + capital-light tech scaling (aka large profit margins) + huge total addressable markets. Compared to Saudi Aramco's total profits -- Apple makes 63%, Microsoft makes 44%, Google makes 39%, Facebook makes 21%, & Amazon makes 13%. [0] And that's compared to a business that literally pumps money out of the ground. [0] https://fortune.com/global500/2020/search/?fg500_profits=desc https://fortune.com/global500/2020/search/?fg500_profits=des...
wintermutestwin 5y ago
Maybe I should go back and read up on it more, but I thought Bell was the poster child for the breakup of a monopoly creating a multi-headed hydra problem. Also, wasn't Microsoft a huge waste of taxpayer time and money? AFAIK, Gates got away with his monopolistic practices and has since been recasting himself as a societal boon. Despite any possible gains society could gain by breaking them up, it seems like a herculean task compared to simply having our elected representatives legislate away business practices that are a public harm. (and yes, this would require our representatives to actually represent the people, but so does monopoly breakup)
- majormajor 5y ago
  Microsoft never got broken up so it certainly didn't teach us anything about breaking companies up not being useful. We'll never know what would've happened had they been. It might tell us that our laws are too weak, though. Even if we reduce the story of Bell to "they got split up, then Southwestern Bell/Cingular/AT&T and Verizon gobbled up the rest of the others slowly" then we can see a big win: the n broken-up companies had varying levels of success because they tried different things and executed in different ways. That's a massive A/B test of the usefulness and efficiency of business practices that never would've happened if they'd never been broken up in the first place! And we'd have even less competition than our current wireless market if that breakup had never happened... One interesting side-note I happened across recently was that Rockefeller's peak wealth was after Standard Oil was broken up. So what's the arguments against breaking up megacorps? We all know the value of competition, and we don't trust public companies to look much past the next quarter if left to their own devices, so why wouldn't we want more competition and less giant monoliths?
  - daniel-cussen 5y ago
    > One interesting side-note I happened across recently was that Rockefeller's peak wealth was after Standard Oil was broken up. According to whom? And compared to what? According to what I read the man had (from memory) 24 million at the time of his death, which seems so bizarre. The problem is the accounting is not only difficult, but that the richer you are, the harder it is to account for all of it, and the more expensive it is to do so. It's not like a regular Joe who can just check his wallet or banking app. By the time you've audited your own wealth, as a billionaire, you've lost millions of dollars. The cost of accounting impacts accounting.

seneca 5y ago

Because regulation, even when well-meaning, acts as a barrier to entry and keeps competitors from even getting off the ground. Stifling small companies stagnates the industry and smothers innovation. You can play whack a mole with their bad behavior, but large companies can come up with new dark patterns way faster than you can regulate them with precise and well thought out regulation. You just end up with entrenched interests and an ossified industry. That's not even touching on regulatory capture.

shakezula 5y ago
Regulatory capture is the true evil of our current setup. Ajit Pai was inevitable, and he won’t be the last or even the worst.

shakezula 5y ago

The break them up and fix them approach actually worked wonders for the end consumers in Bell, Standard Oil, etc…

deleted 5y ago

[deleted]

majormajor 5y ago

> Haven't we learned that the "break 'em up" fix for monopolies doesn't achieve the desired results? What do you think are failed examples of this? Even though you had eventual re-consolidation, the post-breakup phone industry seemed like a much more interesting and competitive place than the one before it. The fix for re-consolidation, of course, could be pretty simple... Very few people want to do the harder, more innovative, more interesting thing if they can make a comfortable living doing what they've always done. This applies to regulators as much as to companies. We haven't found any better tool to force companies to be in touch with their customers and do what the customers want than competition, but we also have an economic system that encourages consolidation (because competition is HARD!). So the role of government to break things back up to keep competitive incentives feels quite natural. The market isn't gonna do it itself.

smolder 5y ago
I can think of some incentives that would prevent hyperconsolidation. Sliding scale taxation based on some formula including a ratio of revenue to people employed. Maybe take away big company's litigation advantage by making them pay an amount somewhat proportional to their size into a pool that covers the total costs of litigation. Let them recover money on wins. I think such incentives/disincentives would be met with the usual: "but if we're hostile to big business and restrict growth, they'll leave the US for greener pastures!". Is that really so bad? Let companies that are hostile to the US public leave the US. Penalize their advantage away in tariffs or something for fleeing to weaker regulatory environments. ISPs can't leave and yet we don't seriously regulate them into doing public good or having a competitive market, which is mysteriously somehow contentious politically. Many others can't leave because their talent pools aren't willing to go with them, and that would be even more true if the workers had a government that worked for us. There is a problem with government being full of people who would rather stay on the receiving end of a money hose than pinch it off for anyone's benefit. All the other apparent problems seem to me to be excuses to protect that. Check greed or we all suffer. You can check greed without stifling ambition. It's a valid choice.

danShumway 5y ago

> Haven't we learned that the "break 'em up" fix for monopolies doesn't achieve the desired results? Breaking up has achieved excellent results before, as far as I can tell. It's not a permanent solution to the problem, but neither is brushing my teeth. It might be OK to have a process that needs to be periodically repeated when companies get out of control. It might even be preferable to large legislative efforts that significantly change what companies can and can't do. Are people really mad that maps show up in Google search, or are people mad that Google owns the world? I'm not sure, but maybe it's better to precisely target a temporary solution at the actual problem. In general, I'm more on board with bills about vertical integration than I am with some other solutions people have proposed. But I'm also not necessarily opposed to skipping the whole thing and directly breaking up those companies instead. It seems to have had good effects in the past. And while I do think vertical integration is a problem, I'm not 100% certain that it's the biggest problem or that this is the best solution. I'm watching these bills kind of carefully.

andreilys 5y ago
Breaking up has achieved excellent results before, as far as I can tell. Source?
- danShumway 5y ago
  Railways, Bell. Source: I use the Internet today and can see the effects firsthand, I'm part of an industry that exists pretty much because of that breakup. This stuff is pretty well documented.
ethbr0 5y ago
Approached from a novelty perspective, I think the exception is size and profit margin. These companies are simply too big (in terms of cash on hand & ability to generate profits). That's always been the problem with monopolies -- they get there, and then no one can compete. Which in this case seems a consequence of first mover advantage + capital-light tech scaling (aka large profit margins) + huge total addressable markets. Compared to Saudi Aramco's total profits -- Apple makes 63%, Microsoft makes 44%, Google makes 39%, Facebook makes 21%, & Amazon makes 13%. [0] And that's compared to a business that literally pumps money out of the ground. [0] https://fortune.com/global500/2020/search/?fg500_profits=desc https://fortune.com/global500/2020/search/?fg500_profits=des...

wintermutestwin 5y ago

Maybe I should go back and read up on it more, but I thought Bell was the poster child for the breakup of a monopoly creating a multi-headed hydra problem. Also, wasn't Microsoft a huge waste of taxpayer time and money? AFAIK, Gates got away with his monopolistic practices and has since been recasting himself as a societal boon. Despite any possible gains society could gain by breaking them up, it seems like a herculean task compared to simply having our elected representatives legislate away business practices that are a public harm. (and yes, this would require our representatives to actually represent the people, but so does monopoly breakup)

majormajor 5y ago
Microsoft never got broken up so it certainly didn't teach us anything about breaking companies up not being useful. We'll never know what would've happened had they been. It might tell us that our laws are too weak, though. Even if we reduce the story of Bell to "they got split up, then Southwestern Bell/Cingular/AT&T and Verizon gobbled up the rest of the others slowly" then we can see a big win: the n broken-up companies had varying levels of success because they tried different things and executed in different ways. That's a massive A/B test of the usefulness and efficiency of business practices that never would've happened if they'd never been broken up in the first place! And we'd have even less competition than our current wireless market if that breakup had never happened... One interesting side-note I happened across recently was that Rockefeller's peak wealth was after Standard Oil was broken up. So what's the arguments against breaking up megacorps? We all know the value of competition, and we don't trust public companies to look much past the next quarter if left to their own devices, so why wouldn't we want more competition and less giant monoliths?
- daniel-cussen 5y ago
  > One interesting side-note I happened across recently was that Rockefeller's peak wealth was after Standard Oil was broken up. According to whom? And compared to what? According to what I read the man had (from memory) 24 million at the time of his death, which seems so bizarre. The problem is the accounting is not only difficult, but that the richer you are, the harder it is to account for all of it, and the more expensive it is to do so. It's not like a regular Joe who can just check his wallet or banking app. By the time you've audited your own wealth, as a billionaire, you've lost millions of dollars. The cost of accounting impacts accounting.