6 ms·

I'll add that regulation can be an entrenching mechanism, as the overhead of compliance has less relative cost to large existing businesses than to small, new o

by mLuby 5y ago

I'll add that regulation can be an entrenching mechanism, as the overhead of compliance has less relative cost to large existing businesses than to small, new ones. For example: if social media companies were required to ID their users in person within 30 days of sign-up ("think of the children" IDK), the infrastructure to comply with that regulation would make it extremely difficult for a new startups to pull off, while big incumbents with compliance departments already staffed up can make it work. Even worthwhile safety regulations have this effect. You can't just start a hazardous chemical transportation company in a weekend like you can a software company. I'd say that's working as intended, but it does still give larger players a competitive edge just for being larger/older. For my 2¢, limiting acquisitions and mergers is the way to go here. The laws already exist, they just need to be more strictly enforced. If a company's core business grows, the company can and should grow. But we don't want a ravenous corporate blob that absorbs everything tangential to its business, whether that's for growth or defensive reasons.

vlovich123 5y ago
Can’t you have the regulations only kick in once you have a certain number of users or revenue to limit the entrenching impact?
- TrainedMonkey 5y ago
  How do you stop fragmentation of large companies into subsidiaries who are all just below the limit where regulations kick in?
  - vlovich123 5y ago
    Ownership stakes - for example if company X owns >10% of company Y, then the regulations for company X could kick in for company Y. There’s some conceptual precedent for reporting requirements of publicly held companies (if you own more than a certain percentage it has to be publicly reported). The subsidiary fragmentation itself is uninteresting from a regulatory perspective as long as the regulatory environment is carefully crafted to pierce through intentional corporate governance obfuscation.
  - PedroBatista 5y ago
    That's easily solved by ownership. The only problem is the "magic" somehow sudden lack of competence some individuals/institutions have when dealing with these companies.
- KorematsuFredt 5y ago
  In that case you have more terrible scenario where you have certain companies who are not interested in becoming too large. The innovation happens outside the parent company as a separate entity. You end up having lego pieces that come together to build something bigger which becomes economically wasteful. You are imposing a cost on folks to think big. Tesla or SpaceX be vision are trying to be super large behemoths. Among all these calls for "regulation" what is lacking is the broader principle that we will use to regulate not just big tech but for anyone. Google is different than Exxon but I would like the principle that regulations them to be the same. When you look at Texas or Florida trying to pass regulations around tech, they seem pretty terrifying where as California's regulation appears to be a big time nothing-burger.
  - vlovich123 5y ago
    Why is a uniform regulatory application across industries required? That seems to have an aesthetic principle but I can’t imagine why it matters. We already regulate every industry separately since the problems posed within each industry is unique. Tech has a disconnect of scale between size of the company and reach that we haven’t seen. Oil has pollution that tech mostly doesn’t. Nuclear power plants have to deal with nuclear waste. There’s certain overlaps but I think saying “all the regulations that apply to big company X in industry Y have to apply to big company A in industry B” is a weird and arbitrary line to draw. Same goes for your comment about inefficiencies. That seems to presuppose a particular truth without actually presenting any evidence. Sure there can be inefficiencies from having multiple companies involved. Conversely you also can have better innovation as ideas are allowed to be tested without having to get buy in within one large massive corporation. Think for example about Xerox where their Parc laboratory was regularly churning out ground breaking research that was dying on the vine within Xerox. For what it’s worth that’s potentially the case within big tech (eg Vine getting killed within Twitter and then TikTok showing success).
    - KorematsuFredt 5y ago
      Let me respond to the second portion first. > That seems to presuppose a particular truth without actually presenting any evidence. What I have said is mostly classical economics 101. If the point is Google could innovate faster if it is split into 10 companies, Google has all the incentive to do it today or alternatively for a Google competitor to split itself into smaller companies in order to beat Google. In either case, when people are free to chose, they will over time make the most efficient choices. This is part of the reason why markets tend to allocate resources better than government folks. If the law makes it impossible to try certain things you are killing off innovation along that dimension. Again, this does not need empirical evidence (even though there is plenty) but mostly basics of classical economics. Now, one may disagree with the markets as well and call it "superstitious belief in markets" but then I won't have any rebuttal to that claim. > “all the regulations that apply to big company X in industry Y have to apply to big company A in industry B” This is not what I said. The regulation can be whatever, ultimately they will be determined not by Stanford profs but lobbyist behind close doors bribing congress. Principles often are much simpler, easier to explain to people and much easier to judge regulations by looking at the principle. One simple principle could be that "pumping co2 in air is bad". We can agree to disagree but we understand the principle. We can understand if companies who produce more co2 are somehow asked to pay higher taxes. I tried to read book excerpts from the Stanford professors and it appeared to be complete BS vending. Arguments like "Big Tech is too big" ,"Big tech has too much power" etc. simply does not make sensible principles as much as they make excellent rhetorical points.
- PedroBatista 5y ago
  Yes, you can. Fiscal policy makers do that all the time - some say not enough times - but it's unlikely in this case because guess who bought their seats and will be at the table if and when these regulations start to be written?
WalterBright 5y ago
> But we don't want a ravenous corporate blob that absorbs everything tangential to its business, whether that's for growth or defensive reasons. Look what happened to Sears, GM, IBM, GE, HP, Sony, etc. History shows that once corporations get too big, they become unable to adapt, and fall by the wayside.

by mLuby 5y ago

vlovich123 5y ago

Can’t you have the regulations only kick in once you have a certain number of users or revenue to limit the entrenching impact?

TrainedMonkey 5y ago
How do you stop fragmentation of large companies into subsidiaries who are all just below the limit where regulations kick in?
- vlovich123 5y ago
  Ownership stakes - for example if company X owns >10% of company Y, then the regulations for company X could kick in for company Y. There’s some conceptual precedent for reporting requirements of publicly held companies (if you own more than a certain percentage it has to be publicly reported). The subsidiary fragmentation itself is uninteresting from a regulatory perspective as long as the regulatory environment is carefully crafted to pierce through intentional corporate governance obfuscation.
- PedroBatista 5y ago
  That's easily solved by ownership. The only problem is the "magic" somehow sudden lack of competence some individuals/institutions have when dealing with these companies.
KorematsuFredt 5y ago
In that case you have more terrible scenario where you have certain companies who are not interested in becoming too large. The innovation happens outside the parent company as a separate entity. You end up having lego pieces that come together to build something bigger which becomes economically wasteful. You are imposing a cost on folks to think big. Tesla or SpaceX be vision are trying to be super large behemoths. Among all these calls for "regulation" what is lacking is the broader principle that we will use to regulate not just big tech but for anyone. Google is different than Exxon but I would like the principle that regulations them to be the same. When you look at Texas or Florida trying to pass regulations around tech, they seem pretty terrifying where as California's regulation appears to be a big time nothing-burger.
- vlovich123 5y ago
  Why is a uniform regulatory application across industries required? That seems to have an aesthetic principle but I can’t imagine why it matters. We already regulate every industry separately since the problems posed within each industry is unique. Tech has a disconnect of scale between size of the company and reach that we haven’t seen. Oil has pollution that tech mostly doesn’t. Nuclear power plants have to deal with nuclear waste. There’s certain overlaps but I think saying “all the regulations that apply to big company X in industry Y have to apply to big company A in industry B” is a weird and arbitrary line to draw. Same goes for your comment about inefficiencies. That seems to presuppose a particular truth without actually presenting any evidence. Sure there can be inefficiencies from having multiple companies involved. Conversely you also can have better innovation as ideas are allowed to be tested without having to get buy in within one large massive corporation. Think for example about Xerox where their Parc laboratory was regularly churning out ground breaking research that was dying on the vine within Xerox. For what it’s worth that’s potentially the case within big tech (eg Vine getting killed within Twitter and then TikTok showing success).
  - KorematsuFredt 5y ago
    Let me respond to the second portion first. > That seems to presuppose a particular truth without actually presenting any evidence. What I have said is mostly classical economics 101. If the point is Google could innovate faster if it is split into 10 companies, Google has all the incentive to do it today or alternatively for a Google competitor to split itself into smaller companies in order to beat Google. In either case, when people are free to chose, they will over time make the most efficient choices. This is part of the reason why markets tend to allocate resources better than government folks. If the law makes it impossible to try certain things you are killing off innovation along that dimension. Again, this does not need empirical evidence (even though there is plenty) but mostly basics of classical economics. Now, one may disagree with the markets as well and call it "superstitious belief in markets" but then I won't have any rebuttal to that claim. > “all the regulations that apply to big company X in industry Y have to apply to big company A in industry B” This is not what I said. The regulation can be whatever, ultimately they will be determined not by Stanford profs but lobbyist behind close doors bribing congress. Principles often are much simpler, easier to explain to people and much easier to judge regulations by looking at the principle. One simple principle could be that "pumping co2 in air is bad". We can agree to disagree but we understand the principle. We can understand if companies who produce more co2 are somehow asked to pay higher taxes. I tried to read book excerpts from the Stanford professors and it appeared to be complete BS vending. Arguments like "Big Tech is too big" ,"Big tech has too much power" etc. simply does not make sensible principles as much as they make excellent rhetorical points.
PedroBatista 5y ago
Yes, you can. Fiscal policy makers do that all the time - some say not enough times - but it's unlikely in this case because guess who bought their seats and will be at the table if and when these regulations start to be written?

WalterBright 5y ago

> But we don't want a ravenous corporate blob that absorbs everything tangential to its business, whether that's for growth or defensive reasons. Look what happened to Sears, GM, IBM, GE, HP, Sony, etc. History shows that once corporations get too big, they become unable to adapt, and fall by the wayside.