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the problem with “breaking up big tech” is it only breaks up american companies. it has a long run impact of letting foreign companies take over american market

the problem with “breaking up big tech” is it only breaks up american companies. it has a long run impact of letting foreign companies take over american market share

mavelikara 5y ago
> the problem with “breaking up big tech” is it only breaks up american companies. I understood it as targeting companies whose products are used by Americans.
- deleted 5y ago
  [deleted]
jayd16 5y ago
If the premise is it makes the companies stronger through competition, this isn't a concern, right?
- rblatz 5y ago
  That isn’t the premise at all. It makes the market stronger through competition. Typically it makes the company itself weaker since it no longer can leverage power in one market to corner another.
  - jayd16 5y ago
    We agree. I said companies, plural, as a whole as in the whole economy.
    - rblatz 5y ago
      Oh missed that. My bad.
chitowneats 5y ago
From where? Not Europe, where they don't have any of these companies, and have even more stringent regulations. China or Russia then? Easy, just ban their services like they do for ours.
- fridif 5y ago
  Everything you touch or use has a component going through china
  - chitowneats 5y ago
    We are a market for them. If you're suggesting they would stop selling us anything in response to us blocking a few of their services online, I think you're overestimating their likely response.
  - oblio 5y ago
    I used to think the American leverage over China was not that great (I'm not American). Then Huawei was put on that Entity List (or whatever it's called) and prohibited from doing business with US companies. Huawei was the world's #2 phone producer after Samsung and rising rapidly, I think the forecast was that within 2 quarters it would be #1, overtaking Samsung. One year later, with the ban still ongoing, Huawei fell out of the top 5, its sales having shrunk 60% or more (https://www.gsmarena.com/sa_smartphone_market_surges_24_in_q1_2021_huawei_no_longer_in_top_5-news-48741.php https://www.gsmarena.com/sa_smartphone_market_surges_24_in_q...).
    - fridif 5y ago
      I would buy a Huawei phone running a Huawei operating system that operates as wifi/data only, purely for the meme factor.
simias 5y ago
Do you have a particular example in mind or is it a theoretical concern? I can definitely see how it could benefit foreign competitors, but at the same time the American tech giants are so largely ahead of the competition that it's hard for me to imagine a foreign competitor managing to overtake them. It might level the playing field a little bit, but it's not necessarily a bad thing, even from a US-centric point of view.
- aerosmile 5y ago
  You should take a look at Tik Tok. Companies with large marketing budgets and focused on digital channels spend the majority of it on Facebook and Google. Traditionally, the rest went to Pinterest and Snapchat, but Tik Tok has 1) built a huge audience and 2) built a good enough ad platform (which only continues to improve) that they went from nowhere to choice #3 in a shockingly short amount of time. Sound familiar? Yes, that's exactly how to Facebook surprised Google as well, only much slower.
  - tmotwu 5y ago
    If we were to break up Facebook or Google, it would be of the granularity of YouTube or Instagram, which is actually what TikTok competes with. I cannot see how YouTube or Instagram could suffer or lose market share.
    - aerosmile 5y ago
      > The impact TikTok has had on the social media landscape is undeniable. This year, it is projected to reach 2.1 billion users, and its success hasn’t gone unnoticed by other key players, most notably Instagram. [1] > in addition to gaining more users than Instagram, TikTok is also earning the attention of top power users. [2] [1] https://digitalagencynetwork.com/tiktok-vs-instagram-who-is-winning-at-social-media/ https://digitalagencynetwork.com/tiktok-vs-instagram-who-is-... [2] http://instagram-tiktok.com/tiktok-vs-instagram-which-one-wins-the-social-media/ http://instagram-tiktok.com/tiktok-vs-instagram-which-one-wi...
      - 5y ago
shakezula 5y ago
Historically, breaking up monopolies has been very good for the end consumer. Bell Labs and Standard Oil both ended up being good things. Instead of breaking them up though, we should simply be more stringent with anti trust hearings and merger approvals. There have been a few mergers recently that absolutely shouldn’t have been approved.
- zepto 5y ago
  > Bell Labs and Standard Oil both ended up being good things. These are nothing like the current tech companies. Their monopolies were based on commodities. Oil hasn’t changed since standard oil was broken up. AT&T’s monopoly was based on access to real estate to build a network.
- ABCLAW 5y ago
  >Instead of breaking them up though, we should simply be more stringent with anti trust hearings and merger approvals. There have been a few mergers recently that absolutely shouldn’t have been approved. Recently? Competition bureaus have been green lighting consolidation in key industry sectors for bullshit reasons with bad evidence for decades. Also, if we acknowledge that bureaus have allowed the over-consolidation of a number of industries, then why wouldn't we break them up? The harm to competition is already done - we already have titans accumulating the lucre of uncompetitive margins. The market's health cannot be judged in respect of what margins currently are; they have to be judged in respect of what they would be under situations of proper competition.
  - clairity 5y ago
    yes, and the focus on tech is a red herring distraction du jour. every company over $100MM should be scrutinized for breakup into smaller entities. m&a should be default deny, with extraordinary evidence required for approval, with penalties that pierce the corporate veil for not meeting stated fair market objectives. that would actually encourage competition and functional markets without harming substantive efficiency/productivity gains from economies of scale, which, despite the popular conception, tend to be sublinear rather than superlinear. that's because coordination problems scale superlinearly with size (a la mythical man month), which in turn is why there is a optimum firm size both for the firms themselves as well as for the markets they compete in. markets (independent actors loosely coordinating via price signals) actually specifically arose to solve these very coordination problems.
darksaints 5y ago
Bullshit. We have the same anti-trust power over foreign companies operating in America. We've never used it because we've never needed to. For the companies that don't operate in America, but import into America, we can and regularly do impose import restrictions and quotas.
zozbot234 5y ago
Antitrust enforcement on large platforms should be done by enforcing vertical separation and interoperability, not by simple breakup. Even the AT&T breakup didn't create a plurality of incompatible landline networks; the resulting companies were all connected in a single phone network, and could seamlessly interoperate. A large interoperable platform can easily preserve its total market share over any foreign competitor aspiring to a monopoly of their own, since it derives greater benefits from network effects.
mikeiz404 5y ago
Maybe I’m taking you too literally here but none of the bills in the article talk about splitting companies up. The bills mentioned limit acquisitions of their competitors, increase funding for merger investigations, require data portability, limit self-preferencing on platform, and limit self-preferencing across business areas. At least this is what is stated in the article. I have not read the bills.
- aerosmile 5y ago
  "Breaking up big tech" or "throwing monkey wrenches into their gears" is related enough that it might be worth paying attention to the OP's overall point - we're applying these rules only to American companies which will automatically a) help Chinese companies like Tik Tok compete against Facebook and Snap, and b) disincentivize them from opening US offices. Why isn't there a 6th bill saying something like: "because we cannot control Chinese companies directly, we'll control them indirectly through American app stores or what have you." I know it's a pipe dream, but we better dream quickly or those companies will get so big that we'll be all using a Chinese OS soon enough and then that last ability to control any aspect of their business model will be gone. EDIT: someone posted that these bills will equally affect American and international companies. I don't see how that's possible. Eg: > The “Platform Competition and Opportunity Act” prohibits acquisitions of competitive threats by dominant platforms Who is going to prevent ByteDance from acquiring every competitive Chinese company? Once they start doing that and we see some massive consolidation in China, ByteDance will go from being the most profitable private company worth $140B to being close to Facebook's $1T market cap. This is not some fiction scenario, it's literally how American companies got big as well. While I wish the American consolidation never happened, I am not sure if the right solution is to just prevent it domestically.
  - rkk3 5y ago
    > Who is going to prevent ByteDance from acquiring every competitive Chinese company China's social platform ecosystem probably has more diversity than the US. This hypothetical doesn't work great since Tencent(WeChat) is it-least twice the size of ByteDance... I do agree with the premise that regulation on American companies does have an effect on how competitive they are globally.
hyperpallium2 5y ago
Historical parallel: a movement to abolish patents in England in 1850-1880 foundered because it would enable cheap imports, threatening local manufacturing jobs. But big tech employs proportionately few, and pays no tax.
paulpauper 5y ago
i don't see why this would be the case or why it would be bad. maybe consumers would benefit from foreign competition rather than US tech giants having so much control and power.
toast0 5y ago
I can't think of any foreign companies in a monopoly/monopolistic position in the US that don't have a US counterpart in a similar position. T-Mobile is/was German and is in a monopolistic position, but it doesn't have any specific advantage over AT&T or Verizon, and is subject to the same type of regulatory scrutiny over aquisitions, etc. There's a lot of foreign pharma corps, but afaik, they don't do anything more monopolistic than US pharma corps. Same with oil and chemical companies. Would be happy to consider something I missed, however.
rsynnott 5y ago
In practice, large countries can regulate companies which operate within their borders. It’s normal for mergers of multinationals to seek approval from US authorities, the EC, and sometimes Chinese authorities today, over competition issues. Today, the EC is typically the fussiest, but it doesn’t seem that out there to imagine a world where the US gets stricter.
- mr_toad 5y ago
  > operate within their borders That can be a problematic concept for online businesses with no local presence. You can try and apply tariffs on imports, but policing imports, especially of services, is hard.
  - rsynnott 5y ago
    Do you think American internet companies are following the GDPR in their European operations just for fun? Or Chinese rules in their Chinese operations? In practice, most multinationals are not too comfortable blatantly violating the law in large markets.
    - mr_toad 5y ago
      Those are organisations that have a local presence, over which some leverage can be exerted. Many US companies with no EU operations are simply ignoring the GDPR.
kmeisthax 5y ago
The US could almost certainly make it a condition of future trade deals. We are absolute masterclasses in short-circuiting democracy by way of international relations. See also: the policy laundering that got us DMCA 1201 and the Sonny Bono Copyright Term Extension Act.

the problem with “breaking up big tech” is it only breaks up american companies. it has a long run impact of letting foreign companies take over american market share

mavelikara 5y ago

> the problem with “breaking up big tech” is it only breaks up american companies. I understood it as targeting companies whose products are used by Americans.

deleted 5y ago
[deleted]

jayd16 5y ago

If the premise is it makes the companies stronger through competition, this isn't a concern, right?

rblatz 5y ago
That isn’t the premise at all. It makes the market stronger through competition. Typically it makes the company itself weaker since it no longer can leverage power in one market to corner another.
- jayd16 5y ago
  We agree. I said companies, plural, as a whole as in the whole economy.
  - rblatz 5y ago
    Oh missed that. My bad.

chitowneats 5y ago

From where? Not Europe, where they don't have any of these companies, and have even more stringent regulations. China or Russia then? Easy, just ban their services like they do for ours.

fridif 5y ago
Everything you touch or use has a component going through china
- chitowneats 5y ago
  We are a market for them. If you're suggesting they would stop selling us anything in response to us blocking a few of their services online, I think you're overestimating their likely response.
- oblio 5y ago
  I used to think the American leverage over China was not that great (I'm not American). Then Huawei was put on that Entity List (or whatever it's called) and prohibited from doing business with US companies. Huawei was the world's #2 phone producer after Samsung and rising rapidly, I think the forecast was that within 2 quarters it would be #1, overtaking Samsung. One year later, with the ban still ongoing, Huawei fell out of the top 5, its sales having shrunk 60% or more (https://www.gsmarena.com/sa_smartphone_market_surges_24_in_q1_2021_huawei_no_longer_in_top_5-news-48741.php https://www.gsmarena.com/sa_smartphone_market_surges_24_in_q...).
  - fridif 5y ago
    I would buy a Huawei phone running a Huawei operating system that operates as wifi/data only, purely for the meme factor.

simias 5y ago

Do you have a particular example in mind or is it a theoretical concern? I can definitely see how it could benefit foreign competitors, but at the same time the American tech giants are so largely ahead of the competition that it's hard for me to imagine a foreign competitor managing to overtake them. It might level the playing field a little bit, but it's not necessarily a bad thing, even from a US-centric point of view.

aerosmile 5y ago
You should take a look at Tik Tok. Companies with large marketing budgets and focused on digital channels spend the majority of it on Facebook and Google. Traditionally, the rest went to Pinterest and Snapchat, but Tik Tok has 1) built a huge audience and 2) built a good enough ad platform (which only continues to improve) that they went from nowhere to choice #3 in a shockingly short amount of time. Sound familiar? Yes, that's exactly how to Facebook surprised Google as well, only much slower.
- tmotwu 5y ago
  If we were to break up Facebook or Google, it would be of the granularity of YouTube or Instagram, which is actually what TikTok competes with. I cannot see how YouTube or Instagram could suffer or lose market share.
  - aerosmile 5y ago
    > The impact TikTok has had on the social media landscape is undeniable. This year, it is projected to reach 2.1 billion users, and its success hasn’t gone unnoticed by other key players, most notably Instagram. [1] > in addition to gaining more users than Instagram, TikTok is also earning the attention of top power users. [2] [1] https://digitalagencynetwork.com/tiktok-vs-instagram-who-is-winning-at-social-media/ https://digitalagencynetwork.com/tiktok-vs-instagram-who-is-... [2] http://instagram-tiktok.com/tiktok-vs-instagram-which-one-wins-the-social-media/ http://instagram-tiktok.com/tiktok-vs-instagram-which-one-wi...
    - 5y ago

shakezula 5y ago

Historically, breaking up monopolies has been very good for the end consumer. Bell Labs and Standard Oil both ended up being good things. Instead of breaking them up though, we should simply be more stringent with anti trust hearings and merger approvals. There have been a few mergers recently that absolutely shouldn’t have been approved.

zepto 5y ago
> Bell Labs and Standard Oil both ended up being good things. These are nothing like the current tech companies. Their monopolies were based on commodities. Oil hasn’t changed since standard oil was broken up. AT&T’s monopoly was based on access to real estate to build a network.
ABCLAW 5y ago
>Instead of breaking them up though, we should simply be more stringent with anti trust hearings and merger approvals. There have been a few mergers recently that absolutely shouldn’t have been approved. Recently? Competition bureaus have been green lighting consolidation in key industry sectors for bullshit reasons with bad evidence for decades. Also, if we acknowledge that bureaus have allowed the over-consolidation of a number of industries, then why wouldn't we break them up? The harm to competition is already done - we already have titans accumulating the lucre of uncompetitive margins. The market's health cannot be judged in respect of what margins currently are; they have to be judged in respect of what they would be under situations of proper competition.
- clairity 5y ago
  yes, and the focus on tech is a red herring distraction du jour. every company over $100MM should be scrutinized for breakup into smaller entities. m&a should be default deny, with extraordinary evidence required for approval, with penalties that pierce the corporate veil for not meeting stated fair market objectives. that would actually encourage competition and functional markets without harming substantive efficiency/productivity gains from economies of scale, which, despite the popular conception, tend to be sublinear rather than superlinear. that's because coordination problems scale superlinearly with size (a la mythical man month), which in turn is why there is a optimum firm size both for the firms themselves as well as for the markets they compete in. markets (independent actors loosely coordinating via price signals) actually specifically arose to solve these very coordination problems.

darksaints 5y ago

Bullshit. We have the same anti-trust power over foreign companies operating in America. We've never used it because we've never needed to. For the companies that don't operate in America, but import into America, we can and regularly do impose import restrictions and quotas.

zozbot234 5y ago

Antitrust enforcement on large platforms should be done by enforcing vertical separation and interoperability, not by simple breakup. Even the AT&T breakup didn't create a plurality of incompatible landline networks; the resulting companies were all connected in a single phone network, and could seamlessly interoperate. A large interoperable platform can easily preserve its total market share over any foreign competitor aspiring to a monopoly of their own, since it derives greater benefits from network effects.

mikeiz404 5y ago

Maybe I’m taking you too literally here but none of the bills in the article talk about splitting companies up. The bills mentioned limit acquisitions of their competitors, increase funding for merger investigations, require data portability, limit self-preferencing on platform, and limit self-preferencing across business areas. At least this is what is stated in the article. I have not read the bills.

aerosmile 5y ago
"Breaking up big tech" or "throwing monkey wrenches into their gears" is related enough that it might be worth paying attention to the OP's overall point - we're applying these rules only to American companies which will automatically a) help Chinese companies like Tik Tok compete against Facebook and Snap, and b) disincentivize them from opening US offices. Why isn't there a 6th bill saying something like: "because we cannot control Chinese companies directly, we'll control them indirectly through American app stores or what have you." I know it's a pipe dream, but we better dream quickly or those companies will get so big that we'll be all using a Chinese OS soon enough and then that last ability to control any aspect of their business model will be gone. EDIT: someone posted that these bills will equally affect American and international companies. I don't see how that's possible. Eg: > The “Platform Competition and Opportunity Act” prohibits acquisitions of competitive threats by dominant platforms Who is going to prevent ByteDance from acquiring every competitive Chinese company? Once they start doing that and we see some massive consolidation in China, ByteDance will go from being the most profitable private company worth $140B to being close to Facebook's $1T market cap. This is not some fiction scenario, it's literally how American companies got big as well. While I wish the American consolidation never happened, I am not sure if the right solution is to just prevent it domestically.
- rkk3 5y ago
  > Who is going to prevent ByteDance from acquiring every competitive Chinese company China's social platform ecosystem probably has more diversity than the US. This hypothetical doesn't work great since Tencent(WeChat) is it-least twice the size of ByteDance... I do agree with the premise that regulation on American companies does have an effect on how competitive they are globally.

hyperpallium2 5y ago

Historical parallel: a movement to abolish patents in England in 1850-1880 foundered because it would enable cheap imports, threatening local manufacturing jobs. But big tech employs proportionately few, and pays no tax.

paulpauper 5y ago

i don't see why this would be the case or why it would be bad. maybe consumers would benefit from foreign competition rather than US tech giants having so much control and power.

toast0 5y ago

I can't think of any foreign companies in a monopoly/monopolistic position in the US that don't have a US counterpart in a similar position. T-Mobile is/was German and is in a monopolistic position, but it doesn't have any specific advantage over AT&T or Verizon, and is subject to the same type of regulatory scrutiny over aquisitions, etc. There's a lot of foreign pharma corps, but afaik, they don't do anything more monopolistic than US pharma corps. Same with oil and chemical companies. Would be happy to consider something I missed, however.

rsynnott 5y ago

In practice, large countries can regulate companies which operate within their borders. It’s normal for mergers of multinationals to seek approval from US authorities, the EC, and sometimes Chinese authorities today, over competition issues. Today, the EC is typically the fussiest, but it doesn’t seem that out there to imagine a world where the US gets stricter.

mr_toad 5y ago
> operate within their borders That can be a problematic concept for online businesses with no local presence. You can try and apply tariffs on imports, but policing imports, especially of services, is hard.
- rsynnott 5y ago
  Do you think American internet companies are following the GDPR in their European operations just for fun? Or Chinese rules in their Chinese operations? In practice, most multinationals are not too comfortable blatantly violating the law in large markets.
  - mr_toad 5y ago
    Those are organisations that have a local presence, over which some leverage can be exerted. Many US companies with no EU operations are simply ignoring the GDPR.

kmeisthax 5y ago

The US could almost certainly make it a condition of future trade deals. We are absolute masterclasses in short-circuiting democracy by way of international relations. See also: the policy laundering that got us DMCA 1201 and the Sonny Bono Copyright Term Extension Act.