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If you like startups you should love anti-trust

553 points by connor11528 4y ago

efortis 4y ago
> "maintain growth until the heat death of the universe…" > "their pursuit of endless growth…" Let me paste the first headline I can find today: "Layoffs are sweeping Corporate America to kick off 2023"
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- sailfast 4y ago
  I believe the OP meant growth of revenue, and ideally of profit. Layoffs in that case would actually be an improvement.
- ClumsyPilot 4y ago
  At the sane time corporate profuts are record high
monero-xmr 4y ago
My problem with anti-trust is my problem with taxing the rich. How do you define rich? How can you logically explain why, say, $999,999 per year is not rich but $1,000,000 per year is? Wouldn’t a homeless person say everyone with a roof is rich? It’s simply illogical. With anti-trust, it’s defining monopolies. Maybe a company like Google dominates search advertising. But they don’t compete economically in search, they compete economically in digital advertising - or is it all of advertising? Isn’t Amazon and Apple eating their shirt in new spend on search ads? By the time the anti-trust case works itself through the courts it’s often that the “monopoly” has fallen quite a bit from their perch. Now to get to start ups. Startups being acquired WANT to be acquired - otherwise they wouldn’t be sold. There is no gun that makes them be sold - their shareholders agree to it. If you love startups, you should be pro-founder, and that means letting them be sold if they want it. Otherwise it’s simply coercion and authoritarianism to prevent an owner to do what they want with their company they put their blood and sweat into.
- valenterry 4y ago
  What you say isn't really wrong, but I guess there is a different perspective. I wish there were more startups that just keep operating standalone without being bought. Having the often passionate founders staying in control and evolving their company. Of course, if they can sell than they get more money out of that and maybe have time for something else/new. But at the same time, how does it impact society if passionate founders leave all the time? Maybe that isn't really great for the overall progress. On the other hand, were there less startups if they can't be sold/bought as easily? I'm not sure, but I imagine the impact wouldn't be so huge, since I expect for most people, selling their company is more the icing on the cake and not the major reason why they start something on their own.
  - monero-xmr 4y ago
    I believe in freedom and individual rights. It’s so hard to build a company. Very hard. Try it yourself someday if you don’t believe me. Small, medium, large, lifestyle, whatever your endgame is I guarantee it’s 100x harder than you envisioned. You say you wish more startups operated standalone. Is it possible that the same person who can build a company from zero to 100 people isn’t qualified and / or wanting to take it from 100 to 1000 people? Shouldn’t it be her right to sell her asset, and start something new? Some people believe that society has some claim on companies, meaning the government should be able to arbitrarily coerce any company of any size to do anything. Less-logical people claim that society has a claim when a company reaches some threshold of size (which makes no sense as no one can explain what that size is except “eh I guess a billion dollars in revenue”). The only defensible logic is to let the owner do what they want. Otherwise it’s authoritarian.
    - connor11528 4y ago
      I feel like the logic here is that if companies behave badly enough competitors will emerge and kill the bad company. This school of thought was first pioneered by Robert Bork in the 70s along with the “consumer welfare standard” that hey if you can’t prove it’s hurting consumers then who cares. This is the dominant view of establishment antitrust lawyers to this day and why American industries from chocolate to diapers to national defense are concentrated. The reality is that if the owners do what they want they will buy competitors, rent seek and not innovate. If the government seeks to meddle they will buy lobbyists. Additionally firms that have their market cornered will squeeze workers and their vendors. Finally close ties between concentrated industry and the government leads to more authoritarian rule.
college_physics 4y ago
Start with changing the name. Anti-trust evokes a negative vibe, pushing back on success, politics of envy etc. In reality the policies we talk about are the proactive nurturing of a healthy economy. Systems thinking instead of systemic capture. Diversification as a fundamental risk management strategy. Keeping them small to keep them honest. Fostering competition that will unleash creativity. Etc. I have a strong (but hard to prove) feeling that had the past decades in tech not been so dominated by a tiny number of conglomerates, the contribution of tech to society would have been materially much more impactful.
- connor11528 4y ago
  Agree about the naming of antitrust being problematic. It comes from the trust busting days. I prefer talking about building a “decentralized economy” that stands in contrast to an economy controlled by concentrated corporate power
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- diordiderot 4y ago
  This is one of those hedonic treadmill words. Whatever you choose will have a bunch of 'non-profit', think tank, 'institute', Murdoch press releases nudging negative connotations. It's illegal to teach critical reasoning in Texas. Until things like that get fixed no name change will immunize the public from corporate propaganda
  - jon_adler 4y ago
    Can you reference what you mean about being illegal to teach critical reasoning in Texas?
    - burnished 4y ago
      Oh, looks like it was just the dominant political party that wants that. https://www.washingtonpost.com/blogs/answer-sheet/post/texas-gop-rejects-critical-thinking-skills-really/2012/07/08/gJQAHNpFXW_blog.html https://www.washingtonpost.com/blogs/answer-sheet/post/texas...
vouaobrasil 4y ago
I think this article's fundamental premise is wrong. To quote: "The core reason that companies generally, and tech companies more specifically become the very sort of corporation that they once hated and took on with vigor is the need to keep growing, forever." Small startups and companies don't hate large corporations. If they take on large corporations with vigor, it is only to take on a segment of the market, not the corporation itself. The only purpose of startups is to maximize profit like everyone else is doing, and if they can do that by being bought out or by becoming behemoths, of course they will do it. If anything, people in startups LOVE corporations because when they're bought out, they can retire early with a ton of cash. The people who dislike large companies and who should favour anti-trust legislation are consumers. But founders of startups? Nah, they operate on the same profit-maximizing principles as the CEOs of big tech. It's all about money.
- ncallaway 4y ago
  The article doesn’t say if you are a small startup you should like anti trust law. It says if you like small startups you should like anti trust laws. Those are separate claims.
  - JumpCrisscross 4y ago
    > if you like small startups you should like anti trust laws Small start-ups which cannot grow are not start-ups, they’re small businesses. This article is, if genuine, an anti-growth pitch. It ensconces the status quo.
    - vouaobrasil 4y ago
      That is a good point, and I think there is nothing wrong with anti-growth. It should be something we all aspire to.
      - JumpCrisscross 4y ago
        > there is nothing wrong with anti-growth Zero growth means zero-sim games. Pre-modernity. Sucks to be poor if you’re born into that world.
judge2020 4y ago
And yet, most people love the stability of existing systems. Trying something new is betting with your time: if the startup goes defunct in x years, you've created work for yourself to migrate to a competitor, and that's a big risk to take if you're a medium or large business evaluating a B2B product that maybe only has Series B funding (and is dependent on massive growth to survive without being sold off to some investment firm due to pressure from their existing investors).
- kennywinker 4y ago
  With decent anti-trust, we would have many many more stable mid-size companies. I.e. startups that FAANG snapped up on their ascendence to stability, that would now be successful in their own right. Some examples to rattle off a few household names: instagram, whatsapp, youtube, tumblr, android, beats, audible.
  - scarface74 4y ago
    Instagram became big because of Facebook’s cross promotion and adTech. YouTube had huge storage and bandwidth costs and was about to be sued out of existence. Tumblr wasn’t exactly doing great before being bought by Yahoo and Yahoo wasn’t exactly a monopoly when it acquired Tumblr and its current owner is definitely not that big. How do you think Android would have succeeded when better funded companies like Microsoft, RIM and Palm failed to make a dent? Beats was already profitable before being acquired by Apple. No one can credible claim that Apple has a “monopoly” on headphones or in streaming music.
    - dima_vm 4y ago
      Instagram might not became that big, but it definitely was on track to become somewhat big, that's why Facebook bought it, in fear of competition. Same, Youtube might go down, but the idea was out of the box now, someone else would do that. Technology (ContentID) was there as well. As a consumer, I don't mind if it'd be called differently done by different team. It might have been better or worse of course.
sailfast 4y ago
I'm in favor of anti-trust initiatives, and I like startups. That said, there were (anecdatally) a large number of people on here (founders?) for awhile (maybe still?) that subscribed to the Thiel school of ~"first to the monopoly wins!" which is good potentially for a business, but absolutely terrible for any sort of ecosystem (including, say, the earth). I'm not sure I like startups with the goal of monopoly at the outset.
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bigmattystyles 4y ago
As long as the megacorp I work for is exempt, then of course!
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notpushkin 4y ago
I still don't see why anti-trust matters here. Say I make a search engine better than Google. If I market it, I get some share of Google's users. The better my search engine is, the more of user base I “steal”. What's wrong with that? Is there something Google can (legally) do to stop me?
- jcparkyn 4y ago
  They can pay you lots of money to buy it off you, and then do what they want with it. Great for you, but (potentially) bad for all the prospective users. It also might be bad for all the users who would have kept using Google either way, since less competition allows Google to make a worse product (e.g., more ads).
  - scarface74 4y ago
    Why would a VC invest in a company if it knew its main avenue of getting a return was being cut off?
    - jdub 4y ago
      The return.
    - jcparkyn 4y ago
      I'm not sure I follow. How does that relate to my comment?
      - scarface74 4y ago
        The hypothetical search engine isn’t going to exist without investors who are expecting a return.
  - notpushkin 4y ago
    > They can pay you lots of money to buy it off you Only if you have investors that can force you to sell. I know that “just bootstrap your own search engine lol” is not an answer, but I do think there's some middle ground.
scarface74 4y ago
This is dumb and idealistic. The only purpose of VC funded tech companies is to have an exit. Statistically by being bought by one of the giants or being foist onto the public markets where the public is the “greater fool”. In the past decade, only one tech company has made a dent in the market and become consistently profitable - AirBnB.
tluyben2 4y ago
In my experience (so anecdotal) there is a lot of weird reasoning going on by founders, akin to ‘I vote for low taxes and against a more socialist system while I am poor as dirt, because one day I will be rich and then I would’ve shot myself in the foot’. New founders reason it will benefit them when they are huge, while, like in the voting example, that probably will never happen.
- jon_adler 4y ago
  Isn’t this built into the American Dream ethos and a product of individualism at the forefront of American culture?
  - tluyben2 4y ago
    Could be, i'm not American and it's not built into anything of myself. But I know many founders here (in the EU) who think like this as well. And I guess there is even less chance of them making it that big.
echelon 4y ago
We need Apple, Google, and the rest to have holes in them for the good of the entire market. If big players dominate and suck all the air out of the system, all of that money goes to malinvestment and incrementalism. Vanity promo projects that get closed in a year. Big tech should win based on velocity and bringing value to customers. They shouldn't be able to just coast. And little companies should have a way of getting in without surrendering all their margins to, eg., the App Store.
langsoul-com 4y ago
More legal effort should be put into big companies coming in and crushing start ups. They usually build something and price it at a loss, because big companies can afford that till start ups go under. Or unfairly using their services to hinder competiton. Amazon is a big prepetrator of this. There was a smart oven, sold on Amazon. Amazon was also an investor, who made their own into a basics product at a loss.
- franga2000 4y ago
  Many startups do the same thing to established industries. They burn VC money to "disrupt" a field, then when it's time to make money, they hike prices. But by then, there's no competition left.
  - echelon 4y ago
    That is in theory better. - the actual innovators are rewarded - innovators have more skin in the game - innovators live or die by their execution Not so with the monopolies.
    - TeMPOraL 4y ago
      Yeah, but we're now seeing the same problem with "innovation" as we've been suffering from wrt. "profit" for the past several decades - that is, neither "profit" nor "innovation" are a function of being nice and good for the customers, the society or the world. They are at best somewhat aligned - but once all those profitable/innovative and also good ideas were picked, we're left with pursuing profit/innovation that has negative impact on the world. And so, the main innovation of the most successful startups in the last ~decade was in ways of breaking into and destroying (er, "disrupting") markets that before were just fine - not perfect, but at least sustainable.
      - echelon 4y ago
        Uber, for all the hate it receives, is significantly better than taxi service. AirBNB, by the same argument, put offline-only vacation rental services on check. Neither of these is models is going to go away now. The companies may have to deal with debt, may need to increase unit costs, and may have to conduct layoffs, but they fundamentally changed their markets and will remain the dominant players.
majikandy 4y ago
Great movie.
- cheschire 4y ago
  It was a good movie, but IMO was a bit too silly / cliche to be great. Good bones though.
hamilyon2 4y ago
The main and most important mono/oligopolies to break are in finance, medical education and law. These are the primary gatekeepers preventing value to reach consumer, these are rent-seeking vampires. Tech is interesting example, of course, but it's like a tempest in the bowl right now. We should permit to innovate everywhere, not just in web search space and e-commerce.
- Semaphor 4y ago
  I think a big difference might be that in tech, you often have a global monopoly, while finance, medical, and law are more national ones.
- lwhi 4y ago
  I'd argue that tech stands to eventually swallow the companies in the domains you talk about. The truly difficult thing about monopolies is that their power and strength in the marketplace grows exponentially.
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- echelon 4y ago
  The main and most important monopolies are, in this order, 1. Apple 2. Google 3. Amazon > finance, medical education and law Each of the above companies reaches deep into finance. Google and Apple capture real world payments on their devices, take 30% on top of any app software, limit or own the web, etc. They're each trying to break into medical, with big medical endeavors underway right now. Forget textbooks. Look at the fight between Google and Apple for the classroom. These companies have their own film studios, for goodness sake. How the hell did we let that happen? Lord of the Rings is Amazon -- What?!
  - robertlagrant 4y ago
    We didn't let anything happen. 50 years ago Singer sewing machines was making computers[0]! Why didn't people back then ask who let them innovate and risk their money the way they chose to. I think they understood that you can't both have a process that delivers the fastest progress in human history, and dislike the vanishingly few participants who succeed at it inordinately well. [0] https://en.m.wikipedia.org/wiki/Singer_System_Ten https://en.m.wikipedia.org/wiki/Singer_System_Ten
mengibar10 4y ago
All companies strive/want/expect/hope/conspire for one thing for cost: When purchasing for the input it would like to operate with terms of a market economy but when selling their goods/services they would like to be monopolistic. It's very a fundamental and natural desire. Desire to kill competition is just a manifestation of this fundamental rule.
Barrin92 4y ago
When I lived in China and talked to VCs about the volatile regulatory environment and relatively frequent busting of companies one sentence I heard often was always something along the lines of, "sure it's annoying but you know what? For the occassional billionaire that gets toppled there's a hundred millionaires waiting to take their spot, it's just opportunity". This changed my attitude quite a bit. In particular in the US the debate is often framed from the perspective of the very few individuals adverserly impacted by anti-trust. "If you break X apart, who will want to be the next Y? The answer is quite literally: hundreds of people gleefully waiting to take even a fraction of that market. If there is a void to fill, someone will always do it. I think of all the measures one can take, anti-trust is one of the least disruptive things to the ecosystem overall, because it not only doesn't diminish, but strengthens market dynamics.
eru 4y ago
That's a bit of a weird article: the author seems to argue that monopolies etc are bad, but then makes the mental leap and assumes that just because there's something called 'anti-trust legislation' that it'll help.. The author himself almost grasps the problem: > [...] Oracle became a company more famous for its legal department than new innovation. Just like most other regulation 'anti-trust' is just another weapon that those with a big enough legal department can wield against the competition. We need more competition, not less. Eg we need to allow Wal-Mart to open bank accounts.
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- echelon 4y ago
  > We need more competition, not less. To posit a real world example, when the predator overkills, the ecosystem dies. To cite just a handful of examples: https://blogs.scientificamerican.com/extinction-countdown/worst-invasive-predators/ https://blogs.scientificamerican.com/extinction-countdown/wo... https://en.wikipedia.org/wiki/Surplus_killing https://en.wikipedia.org/wiki/Surplus_killing Top down pressure on monopolies keeps competition healthy and active. A neverending arms race, which is good for innovation. It prevents lethargy, malinvestment, stagnation, and mere taxation.
  - eru 4y ago
    > To posit a real world example, when the predator overkills, the ecosystem dies. Huh? What does a biological predator/prey relationship have to do with economic competition?
- routerl 4y ago
  > makes the mental leap and assumes that just because there's something called 'anti-trust legislation' that it'll help I'm not trying to defend the author. But there's no "mental leap" here; that's exactly the real-world, observable effect of anti-trust legislation when it is enforced. And what we're seeing now with the FTC is precisely the enforcement, for the first time in decades, of existing anti-trust legislation. If your point is "legislation isn't enough", you're right, but trivially and uselessly right. Of course the real effect comes from enforcement, just as making murder illegal but then not charging and arresting murderers would, obviously and trivially, not decrease the rate of murder.
samwillis 4y ago
I agree with much of this, I would like to highlight one thing in particular: > The bigger a tech company gets the worse it becomes at providing consumer and customer surplus, because it needs to eat that margin (of a sort) to keep growing. Growth demands that tech companies eventually consume that which first engendered them good will. When that comes to Google, I think they are talking about "eating the margin (of a sort)" of the good experience for end users, people searching. But the reality is they are actually eating the very real margin of the advertisers, their "actual customers". In the last ten years, through the excessive ingestion of data about the advertisers businesses, Google has sought to expand their bottom line by extracting as much revenue from advertisers as possible. The advertisers margin has become Google's target revenue. If (nearly) all advertising is via Google, their only way to grow that revenue is by extracting more of the advertisers margin. When you advertise on Google (and FB for that matter) you now have to transmit to Google's algorithm all data about all transactions on your site. This is sold as training the algorithm to enable the targeting of customers. But what you are in fact doing is telling Google everything about your revenue, they know exactly how much you are receiving from all sales. The algorithm is designed to maximise the extraction of the advertisers margin, to squeeze it as much as possible. This is going to come back and bite them. I believe advertisers are going to fall out of love with Google, if they haven't done so already.
- jimnotgym 4y ago
  I think you are absolutely right. Even on our small ecommerce presence we are seeing it is harder to get a return from Google shopping. A decade ago it was a no brainer, and now it is a money pit. We are seeking instead to expand our influencer involvement.
- l33tman 4y ago
  As a side-note, increasing margins is not the only way to gain revenue, you can increase the market as well. This is what they have been trying all along with all their parallel products. It was very successful with Android, less so with their self-driving car (that could have increased the market by letting drivers consume internet content and ads during the drive instead of driving).
- 4y ago
aj7 4y ago
I wouldn’t approach it in terms of “enforcing antitrust laws.” It’s very hard to win those cases. What I would do is limit the cash that public companies can retain. This has the effect of distributing capital to new ventures and competitors naturally. And it has two knock on effects that are also very positive. If Sergei Brin et al want to develop self-driving cars, let them use their own money, or raise new money, not use an advertising company’s stockholders’ money vainly and cavalierly. Second, with less cash around, there’s less to waste in general, and especially for senior managers, less to steal. We could implement my suggestion by making this more tax favorable for everyone involved. Liberate the cash!
- amelius 4y ago
  I think Stallman proposed limiting the amount of people working for a single company.
- zackmorris 4y ago
  Traditionally the answer to all of the economic problems we're facing today was taxation. You're right that antitrust cases will never be won at the scale needed to have a material impact on the economy. Plus, big companies will never allow reforms anyway, and will lobby their way out of any loss. So what do we do? What are some ethical and amicable solutions that can be applied evenly and fairly to all citizens? * Tax all property, not just homes. The US national property tax averages 1.1%. So we should tax stocks and other assets at around 1% also. Stockholders would choose to give up 1% of their shares each year, or pay their cash value to keep them. The current US stock market cap is $46 trillion, so 1% of that would be $460 billion. We paid $4.8 trillion in taxes last year, so this property tax would lower taxes for the rest of us by about 10%. The average income tax paid is $20,000 per year, so that would be about a $2000 savings per year. * Charge sales tax on all property sales, including stocks. 5% might be a bit high, and some states don't charge sales tax. So a national rate would be needed to establish a baseline on stock trades, something like 0.1% to 1% per trade. Losses could be used as a tax write-off, so a final sales tax could be charged at the end of the year, which might equal the property tax. This could reasonably raise savings to between $2200 and $4000 per year. * Fund UBI with the wealth taxes stated above. $2000/yr is $167/mo, but $4000 is $333 (about the cost of health insurance or a student loan payment or rent in rural areas). Instead of working to make rent, we could get back to getting real work done. * Organize. Tech could move to a cooperative model where gains/losses are split across teams, and form unions to provide actual resistive power against concentrated wealth: https://www.npr.org/2023/01/04/1146861998/video-game-microsoft-union https://www.npr.org/2023/01/04/1146861998/video-game-microso... * Change the culture of tech. We could make the "I've got mine" mentality of tech bros uncool. Wealth concentration makes property a zero-sum game by forcing 90% of the population to subsist on 10% of the wealth. So we could openly criticize people who have assets above what they would need to retire (perhaps $10 million). Wealth beyond that is an effective theft of the time and resources of workers, who are forced to work to continue paying dividends on that wealth. The opportunity cost of that has grown to consume all of our time, giving us a lower standard of living, less leisure time and less upward mobility (by far) than we had before tickle-down economics which started in the early 1980s: https://www.weforum.org/agenda/2020/09/social-mobility-upwards-decline-usa-us-america-economics/ https://www.weforum.org/agenda/2020/09/social-mobility-upwar... Now to me, everything I said above is obvious. It's self-evidently the way to fix the problem. Any child could understand it. The real difficulty is around de-programming the so-called thought leaders who currently benefit from the wealth inequality status quo. We could and should call them out and challenge them at every opportunity.
mkl95 4y ago
If you like startups you should hate noncompete clauses and love anti-trust. Somehow they coexist in many areas.
piyush_soni 4y ago
I never understood anti-trust. Isn't it punishing a legitimate company for working their ass off for years/decades and growing too big for people's liking? It's my OS, I don't want to put your app on it, I want to put mine. What's the problem? It's actually against free market. I understand it from a socialist point of view though. Edit: The comments so far have given me some perspective. It was a genuine question to understand.
- hagbarth 4y ago
  It’s about making the market work for consumers. Monopolies and the like sort of break the market dynamic by removing competition. It’s got nothing to do with socialism.
- theharrychen 4y ago
  The purpose of anti-trust is to prevent firms from exercising market power that leads to predatory pricing and anti-competitive behaviors that lower social surplus and innovation. There's a whole subfield of economics called Industrial Organization that tackles this.
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- hahaxdxd123 4y ago
  > It's actually against free market. If you read a lot of the original liberal thought behind the "free market", it actually spells out something probably more aptly named "competitive market". A "free" as in "you can do whatever you want" market does not provide the same theoretical benefits as a competitive market (e.g. you can make models/derive theorems that the long run profits go to 0 due to competition, etc.) Even the wikipedia page for "Free market" today includes: "For classical economists such as Adam Smith, the term free market refers to a market free from all forms of economic privilege, monopolies and artificial scarcities.[2]" I believe that interpretation can come from the following line in Wealth of Nations: "People of the same trade seldom meet together even for merriment or diversion, but the conversation ends in a conspiracy against the publick [sic], or in some contrivance to raise prices." > I understand it from a socialist point of view though. I hope this provides further understanding from a liberal-capitalist point of view :)
xondono 4y ago
I think the author is unaware that “anti-trust” has been used for decades as a bargaining chip, where big companies trade gestures for barriers of entry with the political establishment. The only reason the internet has been the biggest growth sector for more than 2 decades now is that it has been new enough to be less regulated than other industries, but as the giants (Google, Facebook,…) both settle new cases and push for self serving regulations, the barriers grow tall again, and innovation will stop.
guillem_lefait 4y ago
It looks similar to politics. A new candidate have to bring something on the table: new ideas, new faces, new horizon whereas if an in-place politician is interested in being re-elected, he probably wants to show how great he was and keep its base happy enough to have high retention. Maybe you seek rent when you have non negligible costs to maintain past (think maintenance and tech debt)
revskill 4y ago
I don't trust any article without a TLDR at the beginning of the article.
einpoklum 4y ago
> the anti-establishment startup world A "start-up" is a commercial company, intending to make money by selling products and services, and typically invested with large sums by individual or institutional capitalists. In other words, it is the opposite of anti-establishment; at most, it might be antagonistic to the established providers of the relevant products or services.
lannisterstark 4y ago
The issue with this becomes that anti-trust then becomes the tool of the $CurrentRegime to break up companies THEY dislike. For example, part of the reason US costs for healthcare are skyhigh IS because of US govt regulation. IF the only applied it to healthcare giants, but they won't, because they're not the companies the govt dislikes, also $$$. All this will do is end up giving more power to the govt to break up the only thing that actually has the capability endangers their power-hoarding : big companies. Ultimately, Govt IS the biggest company, and you rarely have a choice to switch. If I don't like Amazon, I can go to walmart, or local store. I can't just willy nilly pack up and leave the country. People support regulations (or hell, $MeasureX) until the govt comes for the thing they like, despite people like us telling them that eventually the govt will do just that. (Eg, abortion in the US : People like us were telling others that if they stampede on our rights, they will stampede on yours too, given the chance).
- Pozzuh 4y ago
  You neglect to mention there actually is a "choice to switch" with regard to the government: it's democracy.
  - lannisterstark 4y ago
    "democracy" is "democracy" in name only in many countries. Eg, in the US, Republicans and Democrats are fairly similar middle of the road people. In India, what democracy lol? Same in egypt. "democracy" also depends on others wnating the same change as you. You alone can't do jackshit. I alone can choose not to shop at amazon and choose walmart intead.
phh 4y ago
One of my personal projects that I never pushed forward is a blog "a monopoly a day" (under-titled "keeps the EU away"). The idea is that everyday, I want to show small-ish negative impact of a big tech monopoly, and explaining it. The goal is that the sheer recurrence is enough to convince people of the negative impact on innovation and societal growth big companies have. (That's with a pretty broad definition of "monopoly", including "user-specific monopoly" like you get with android / ios, notions that I would also try to explain in said blog) One example: > https://mobilesyrup.com/2016/09/27/why-blackberry-never-released-an-android-powered-passport/ https://mobilesyrup.com/2016/09/27/why-blackberry-never-rele... > I believe this one shows how a monopoly can prevent innovation. Blackberry with the Passport had a new form-factor. To make this phone worthwhile, it had to use a mainline OS. At the time, only Android with Google apps was available. However, Google rules back then couldn't allow this. Would HNers be interested in such content? And in contributing to it? (my knowledge wrt monopolies is in my area of expertise, and let's just say I like being employable, so it's better if it doesn't look completely targetted)
- javajosh 4y ago
  Yes, I would like that. It's nice to have a place to record negative experiences in a way that might contribute to a positive outcome eventually. Some of the best (and most verboten) content will come, of course, from insiders. One issue I foresee, similar to how local business groups inevitably get overwhelmed with real-estate agents, is that this venture will get overwhelmed with complaints against ISPs and other utilities.
- snowwrestler 4y ago
  This project would be interesting only to the extent it accurately showed the negative impact of monopolies. Unfortunately, this subject area is full of strong emotions and opinions that make it hard for people to be objective. For example the article you link says that Google and Blackberry worked jointly on the 1:1 format phone, and jointly decided to stop working on it. That hardly sounds like an abusive monopolist. And sure, at that point Android was more popular than the BlackBerry OS. But this actually demonstrates healthy competition. I had a Blackberry for work (edit to clarify: running BlackBerry’s own OS and software), and so did all my coworkers. Blackberry was the dominant mobile platform once. Through complacency and poor decision-making, they stopped innovating and competing. And thus, allowed new products with zero installed base on day one to come in and take their market.
JumpinJack_Cash 4y ago
Stuff like unnecessary anti-trust is how you end up with a 1500$ phone which is completely locked and that you cannot charge while listening to music at the same time. While we could all be enjoying a Windows phone whose OS could be freely torrented and installed by individual users with Fortune 500 companies subsidizing the whole experience.
dalbasal 4y ago
Anti-establishment startups becoming their parents are instances of a very common pattern. Gods murder their primordial parents. Republicans overthrow kings and crown a Napoleon. The liberator-opressor complex litters history. The first step is to notice the cliche and expect it. The phenomenon exists. Next step, tread lightly. Any reason you think up is too specific. Your reason why Microsoft became IBM under Ballmer does not explain why Cronus castrated Uranus or why he wanted to eat baby Zeus. That said... I think "you are what you eat" is inescapable long term. Wikipedia would not have been wikipedia if it had been a startup, IPOed, etc. If you are a giant software company deeply embedded into locked in customers across all industries... you will have IBM-ish tendencies. Ballmer is Thanos, inevitable.
diegoholiveira 4y ago
It's past time for the US to do to big tech what it did to Standard Oil in 1911. In fact, new legislation is needed to prevent this from happening in the first place. And of course, it is also necessary to restrict the powers of the state to end the possibility of a government that can do anything.
dalbasal 4y ago
I don't disagree with anything specifically, but think this is naive. First, startups are deeply intertwined with monopoly. Financially, a startup is a small chance of huge success. The ultimate win scenario is becoming a monopoly like Microsoft or Amazon did. The next best thing is being acquired by one. If they can't become monopolies, there's a lot less reason to fund, found or work at a startup. A startup that plans to participate in a competitive market is low potential. Making great apps isn't a good startup goal. A proper startup goal is to make the appstore. Do startups, as we know them, even exist without monopolies? Second... Abstract economics is abstract. Creative destruction doesn't exist in the way that economic theories want it to. It's almost non-existent at the enterprise/monopoly level. How many S&P 500 really become defunct? Creative destruction doesn't exist here unless you really squint. It exists in some places. Restaurants rise and file rapidly. So do barbers and many types of small business. Creative destruction definitely happens to startups. Most die. Overall though, if take a cold empirical look... Creative destruction is orders of magnitude stronger or weaker, depending on sector. It's effectively a non existent dynamic for Microsoft, Loyds & such. You could argue that creative destruction is out of control in other sectors. The theory though, the theory abstracts all of this away. A firm is a firm. Parts manufacturer, energy supplier, record label or software company. The gradients of reality outweigh the abstract description. This is true about a lot of economic concepts. "Normal" economics like market determined prices, broadly representing marginal costs in an industry... those are inapplicable concepts to most tech giants. They're not really applicable to government adjacent industries, creative industries, financial industries... I don't mean that you can't use "normal economics" to describe these industries. I just mean that it's less describing a textile or commodity electronics manufacturer this way. One striking difference between many monopolies of today and those of the past is the alternative. The alternative to Twitter or Facebook is simply "no Twitter or Facebook." If Toyota stops making cars, either someone else makes more or everyone has less. If facebook stop making facebook... social media is not scarce. People will still consume as much social media as they want. This isn't like Bell. A court will never have to analyze Facebook's business in order to reorganise it into viable smaller companies.
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jokethrowaway 4y ago
A company will grow up to the point the market needs it to grow. In a pure capitalist market without government I would expect to see a few large players where replicating the technology is really hard and then a bunch of large companies being killed by newer competitors. We kind of see these mechanics in our market but nowhere close to enough. The distortion in our model of crony capitalism is that our centralised government gives unfair advantage to existing corporations in the form of bailouts (hey, too big to fail!) and regulations (easy to implement when you're Amazon, a business killer when you're small). I would love to build a fintech startup and do what banks are doing for cheaper, but regulations in the banking sector make it a very expensive endeavour. Anti trust is not the solution, it's merely a small patch which gets applied incoherently and used as a weapon by governments to steal more money from massive companies. I argue that no regulations would have a better effect on disrupting large monopolies, once there is enough money to be made with little risk.
LatteLazy 4y ago
This whole article is such a mess, I don't know where to start... First, all companies try to capture consumer surplus. Second, how are ads "great value for everyone" but ads added later are "rent seeking"!? Third, Anti Trust will change none of this. In fact a company without a reliably monopoly has no option but to capture more surplus and do it sooner. Fourth, OP doesn't know what a zombie company is (one who's debt interest totally consumes it profit, so it exists only because of cheap credit and is not actually economically productive). Op is just throwing more "shit at the wall to see what sticks". Fifth, he seems very confused about corporate "profit" figures. Revenue and costs are fixed, real numbers. Profit is just made up. And since you pay taxes on profit, it's usually much lower than one would expect. Hence why Amazon is insanely large and successful but never actually makes any money. I dislike this, but I also know that as soon as anyone starts talking about a corporations profits they're making things up. Also, if GCP does close (because it's apparently so unprofitable) then that just makes Amazon (AWS) all the more dominant in the industry (so much for anti-trust). Plus how is any "start up" meant to get a few billion USD together to enter that market? And isn't a market with the largest player at 35% and no one making a profit (lol) exactly how competition is meant to look? Not to mention the 1000s of start ups that reply on these services to save them tonnes of cash!? I am no expert on corporate structures, market structures, anti trust, accounting or economics (or anything else OP apparently is AND is the only one who sees this). But I know enough to know it's complex and there are no easy answers and anyone saying there are is either ignorant or lying.
surume 4y ago
When was the last time the government enacted anti-trust laws against a large company?
AtlasBarfed 4y ago
If you were alive in the 1990s, you'd recall the great religion of the free market. That language has disappeared from the political discourse, because almost all markets are at best cartels, at worst outright monopoly. Antitrust died with the Microsoft trial, an open and shit case with blatant public statement and evidence galore, and the court system failed us, likely by design. Best you can hope for now is denial of merger.
nickpp 4y ago
If you like start-ups you don't take away one of the greatest motivations to create them: the possibility of getting acquired. If you love competition you don't take away the ability of the biggest players to enter "hard" markets and disrupt large entrenched incumbents. And if you are in favor of both startups and competition you fight government regulations which corrupt markets, protects incumbents and grants monopolies.
theptip 4y ago
Oft-overlooked, but this applies beyond “big tech” too. The US has for decades lagged behind most developed countries on broadband internet speed, largely due to the uncompetitive markets. Things like Local Loop Unbundling (back when ADSL was a thing) and allowing/encouraging municipalities to run FTTH would improve things a lot, but the incumbents have lobbied hard against such policies that would force more competition.
- TheRealPomax 4y ago
  Sort of, but the problem with ISPs is "who owns the infrastructure?" because it doesn't matter how much you want ISP competition if the actual cables are owned by an ISP rather than an independent infrastructure company that ISPs are only allowed to contract to lay new cable without any say in who gets to use it. (The US absolutely adores vertical integration. A company can own the land, the infrastructure, the access to that infrastructure, the services that run on that infrastructure AND strip your rights to the court by forcing you into accepting binding arbitration instead, and the US will point and it with starry eyes and proclaim it a shining example of success)
  - theptip 4y ago
    Right, LLU addresses exactly this by requiring network operators to open up their local exchanges to competitors, basically forcing a decoupling of the "last mile delivery" (which is a natural monopoly) from the internet service provision (which is more competitive). It's quite clearly beneficial to consumers to do this, but companies hate it of course.
userabchn 4y ago
Progressive corporate tax rates (like personal income taxes, instead of the current flat corporate tax rates) would help small companies to compete with big ones simply and naturally without needing governments to decide what constitutes a monopoly.
AwaAwa 4y ago
It depends on what you like about startups. If it is the potential to make millions (which from my experience is 95% of the startup folk), then they are very much against anti-trust. If you are a fan of disruption, innovation and advancing the world, you are definitely part of the minority that loves anti-trust. I am personally aware of a few folk in FAANG, that pull ~1-3M a year currently and are busy touring asia to set up their "startup" with plans to make 10x their current renumeration. I cannot see these as people who 'love anti-trust'.
rakkhi 4y ago
This is classic putting the process over outcome. The point of anti trust is not to allow more competition. The point is to stop monopolies that hold customers captive, charging monopoly rents (high prices) and stop innovation. There is a classic paper by Alan Greenspan on the breakup of Standard Oil [1]. He makes the point that supreme court was wrong. The breakup was just for competitors, not for the benefit of customers. This is the worst of capitalism where big business use the government to fight competitors. This is the applicable case with today's tech giants. They are providing often a free product to consumers and continue to innovate. The low barriers to entry provided by digital goods and the internet mean that startups have never had it better. The last thing that is needed is government involvement to break up these companies for "anti trust" [1] http://www.polyconomics.com/ssu/ssu-980612.htm http://www.polyconomics.com/ssu/ssu-980612.htm
rednerrus 4y ago
Wasn't increasing pay at FAANGS the biggest impediment to startups?
cyanydeez 4y ago
Or....you hate it because you can't rely on the value proposition that comes from burning cash just so you can be the first monopoly in the growth industry and buy out your competition. That's the dream of things like Uber And twitter

553 points by connor11528 4y ago

> "maintain growth until the heat death of the universe…" > "their pursuit of endless growth…" Let me paste the first headline I can find today: "Layoffs are sweeping Corporate America to kick off 2023"

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sailfast 4y ago
I believe the OP meant growth of revenue, and ideally of profit. Layoffs in that case would actually be an improvement.
ClumsyPilot 4y ago
At the sane time corporate profuts are record high

monero-xmr 4y ago

My problem with anti-trust is my problem with taxing the rich. How do you define rich? How can you logically explain why, say, $999,999 per year is not rich but $1,000,000 per year is? Wouldn’t a homeless person say everyone with a roof is rich? It’s simply illogical. With anti-trust, it’s defining monopolies. Maybe a company like Google dominates search advertising. But they don’t compete economically in search, they compete economically in digital advertising - or is it all of advertising? Isn’t Amazon and Apple eating their shirt in new spend on search ads? By the time the anti-trust case works itself through the courts it’s often that the “monopoly” has fallen quite a bit from their perch. Now to get to start ups. Startups being acquired WANT to be acquired - otherwise they wouldn’t be sold. There is no gun that makes them be sold - their shareholders agree to it. If you love startups, you should be pro-founder, and that means letting them be sold if they want it. Otherwise it’s simply coercion and authoritarianism to prevent an owner to do what they want with their company they put their blood and sweat into.

valenterry 4y ago
What you say isn't really wrong, but I guess there is a different perspective. I wish there were more startups that just keep operating standalone without being bought. Having the often passionate founders staying in control and evolving their company. Of course, if they can sell than they get more money out of that and maybe have time for something else/new. But at the same time, how does it impact society if passionate founders leave all the time? Maybe that isn't really great for the overall progress. On the other hand, were there less startups if they can't be sold/bought as easily? I'm not sure, but I imagine the impact wouldn't be so huge, since I expect for most people, selling their company is more the icing on the cake and not the major reason why they start something on their own.
- monero-xmr 4y ago
  I believe in freedom and individual rights. It’s so hard to build a company. Very hard. Try it yourself someday if you don’t believe me. Small, medium, large, lifestyle, whatever your endgame is I guarantee it’s 100x harder than you envisioned. You say you wish more startups operated standalone. Is it possible that the same person who can build a company from zero to 100 people isn’t qualified and / or wanting to take it from 100 to 1000 people? Shouldn’t it be her right to sell her asset, and start something new? Some people believe that society has some claim on companies, meaning the government should be able to arbitrarily coerce any company of any size to do anything. Less-logical people claim that society has a claim when a company reaches some threshold of size (which makes no sense as no one can explain what that size is except “eh I guess a billion dollars in revenue”). The only defensible logic is to let the owner do what they want. Otherwise it’s authoritarian.
  - connor11528 4y ago
    I feel like the logic here is that if companies behave badly enough competitors will emerge and kill the bad company. This school of thought was first pioneered by Robert Bork in the 70s along with the “consumer welfare standard” that hey if you can’t prove it’s hurting consumers then who cares. This is the dominant view of establishment antitrust lawyers to this day and why American industries from chocolate to diapers to national defense are concentrated. The reality is that if the owners do what they want they will buy competitors, rent seek and not innovate. If the government seeks to meddle they will buy lobbyists. Additionally firms that have their market cornered will squeeze workers and their vendors. Finally close ties between concentrated industry and the government leads to more authoritarian rule.

college_physics 4y ago

Start with changing the name. Anti-trust evokes a negative vibe, pushing back on success, politics of envy etc. In reality the policies we talk about are the proactive nurturing of a healthy economy. Systems thinking instead of systemic capture. Diversification as a fundamental risk management strategy. Keeping them small to keep them honest. Fostering competition that will unleash creativity. Etc. I have a strong (but hard to prove) feeling that had the past decades in tech not been so dominated by a tiny number of conglomerates, the contribution of tech to society would have been materially much more impactful.

connor11528 4y ago
Agree about the naming of antitrust being problematic. It comes from the trust busting days. I prefer talking about building a “decentralized economy” that stands in contrast to an economy controlled by concentrated corporate power
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diordiderot 4y ago
This is one of those hedonic treadmill words. Whatever you choose will have a bunch of 'non-profit', think tank, 'institute', Murdoch press releases nudging negative connotations. It's illegal to teach critical reasoning in Texas. Until things like that get fixed no name change will immunize the public from corporate propaganda
- jon_adler 4y ago
  Can you reference what you mean about being illegal to teach critical reasoning in Texas?
  - burnished 4y ago
    Oh, looks like it was just the dominant political party that wants that. https://www.washingtonpost.com/blogs/answer-sheet/post/texas-gop-rejects-critical-thinking-skills-really/2012/07/08/gJQAHNpFXW_blog.html https://www.washingtonpost.com/blogs/answer-sheet/post/texas...

vouaobrasil 4y ago

I think this article's fundamental premise is wrong. To quote: "The core reason that companies generally, and tech companies more specifically become the very sort of corporation that they once hated and took on with vigor is the need to keep growing, forever." Small startups and companies don't hate large corporations. If they take on large corporations with vigor, it is only to take on a segment of the market, not the corporation itself. The only purpose of startups is to maximize profit like everyone else is doing, and if they can do that by being bought out or by becoming behemoths, of course they will do it. If anything, people in startups LOVE corporations because when they're bought out, they can retire early with a ton of cash. The people who dislike large companies and who should favour anti-trust legislation are consumers. But founders of startups? Nah, they operate on the same profit-maximizing principles as the CEOs of big tech. It's all about money.

ncallaway 4y ago
The article doesn’t say if you are a small startup you should like anti trust law. It says if you like small startups you should like anti trust laws. Those are separate claims.
- JumpCrisscross 4y ago
  > if you like small startups you should like anti trust laws Small start-ups which cannot grow are not start-ups, they’re small businesses. This article is, if genuine, an anti-growth pitch. It ensconces the status quo.
  - vouaobrasil 4y ago
    That is a good point, and I think there is nothing wrong with anti-growth. It should be something we all aspire to.
    - JumpCrisscross 4y ago
      > there is nothing wrong with anti-growth Zero growth means zero-sim games. Pre-modernity. Sucks to be poor if you’re born into that world.

judge2020 4y ago

And yet, most people love the stability of existing systems. Trying something new is betting with your time: if the startup goes defunct in x years, you've created work for yourself to migrate to a competitor, and that's a big risk to take if you're a medium or large business evaluating a B2B product that maybe only has Series B funding (and is dependent on massive growth to survive without being sold off to some investment firm due to pressure from their existing investors).

kennywinker 4y ago
With decent anti-trust, we would have many many more stable mid-size companies. I.e. startups that FAANG snapped up on their ascendence to stability, that would now be successful in their own right. Some examples to rattle off a few household names: instagram, whatsapp, youtube, tumblr, android, beats, audible.
- scarface74 4y ago
  Instagram became big because of Facebook’s cross promotion and adTech. YouTube had huge storage and bandwidth costs and was about to be sued out of existence. Tumblr wasn’t exactly doing great before being bought by Yahoo and Yahoo wasn’t exactly a monopoly when it acquired Tumblr and its current owner is definitely not that big. How do you think Android would have succeeded when better funded companies like Microsoft, RIM and Palm failed to make a dent? Beats was already profitable before being acquired by Apple. No one can credible claim that Apple has a “monopoly” on headphones or in streaming music.
  - dima_vm 4y ago
    Instagram might not became that big, but it definitely was on track to become somewhat big, that's why Facebook bought it, in fear of competition. Same, Youtube might go down, but the idea was out of the box now, someone else would do that. Technology (ContentID) was there as well. As a consumer, I don't mind if it'd be called differently done by different team. It might have been better or worse of course.

sailfast 4y ago

I'm in favor of anti-trust initiatives, and I like startups. That said, there were (anecdatally) a large number of people on here (founders?) for awhile (maybe still?) that subscribed to the Thiel school of ~"first to the monopoly wins!" which is good potentially for a business, but absolutely terrible for any sort of ecosystem (including, say, the earth). I'm not sure I like startups with the goal of monopoly at the outset.

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bigmattystyles 4y ago

As long as the megacorp I work for is exempt, then of course!

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notpushkin 4y ago

I still don't see why anti-trust matters here. Say I make a search engine better than Google. If I market it, I get some share of Google's users. The better my search engine is, the more of user base I “steal”. What's wrong with that? Is there something Google can (legally) do to stop me?

jcparkyn 4y ago
They can pay you lots of money to buy it off you, and then do what they want with it. Great for you, but (potentially) bad for all the prospective users. It also might be bad for all the users who would have kept using Google either way, since less competition allows Google to make a worse product (e.g., more ads).
- scarface74 4y ago
  Why would a VC invest in a company if it knew its main avenue of getting a return was being cut off?
  - jdub 4y ago
    The return.
  - jcparkyn 4y ago
    I'm not sure I follow. How does that relate to my comment?
    - scarface74 4y ago
      The hypothetical search engine isn’t going to exist without investors who are expecting a return.
- notpushkin 4y ago
  > They can pay you lots of money to buy it off you Only if you have investors that can force you to sell. I know that “just bootstrap your own search engine lol” is not an answer, but I do think there's some middle ground.

scarface74 4y ago

This is dumb and idealistic. The only purpose of VC funded tech companies is to have an exit. Statistically by being bought by one of the giants or being foist onto the public markets where the public is the “greater fool”. In the past decade, only one tech company has made a dent in the market and become consistently profitable - AirBnB.

tluyben2 4y ago

In my experience (so anecdotal) there is a lot of weird reasoning going on by founders, akin to ‘I vote for low taxes and against a more socialist system while I am poor as dirt, because one day I will be rich and then I would’ve shot myself in the foot’. New founders reason it will benefit them when they are huge, while, like in the voting example, that probably will never happen.

jon_adler 4y ago
Isn’t this built into the American Dream ethos and a product of individualism at the forefront of American culture?
- tluyben2 4y ago
  Could be, i'm not American and it's not built into anything of myself. But I know many founders here (in the EU) who think like this as well. And I guess there is even less chance of them making it that big.

echelon 4y ago

We need Apple, Google, and the rest to have holes in them for the good of the entire market. If big players dominate and suck all the air out of the system, all of that money goes to malinvestment and incrementalism. Vanity promo projects that get closed in a year. Big tech should win based on velocity and bringing value to customers. They shouldn't be able to just coast. And little companies should have a way of getting in without surrendering all their margins to, eg., the App Store.

langsoul-com 4y ago

More legal effort should be put into big companies coming in and crushing start ups. They usually build something and price it at a loss, because big companies can afford that till start ups go under. Or unfairly using their services to hinder competiton. Amazon is a big prepetrator of this. There was a smart oven, sold on Amazon. Amazon was also an investor, who made their own into a basics product at a loss.

franga2000 4y ago
Many startups do the same thing to established industries. They burn VC money to "disrupt" a field, then when it's time to make money, they hike prices. But by then, there's no competition left.
- echelon 4y ago
  That is in theory better. - the actual innovators are rewarded - innovators have more skin in the game - innovators live or die by their execution Not so with the monopolies.
  - TeMPOraL 4y ago
    Yeah, but we're now seeing the same problem with "innovation" as we've been suffering from wrt. "profit" for the past several decades - that is, neither "profit" nor "innovation" are a function of being nice and good for the customers, the society or the world. They are at best somewhat aligned - but once all those profitable/innovative and also good ideas were picked, we're left with pursuing profit/innovation that has negative impact on the world. And so, the main innovation of the most successful startups in the last ~decade was in ways of breaking into and destroying (er, "disrupting") markets that before were just fine - not perfect, but at least sustainable.
    - echelon 4y ago
      Uber, for all the hate it receives, is significantly better than taxi service. AirBNB, by the same argument, put offline-only vacation rental services on check. Neither of these is models is going to go away now. The companies may have to deal with debt, may need to increase unit costs, and may have to conduct layoffs, but they fundamentally changed their markets and will remain the dominant players.

majikandy 4y ago

Great movie.

cheschire 4y ago
It was a good movie, but IMO was a bit too silly / cliche to be great. Good bones though.

hamilyon2 4y ago

The main and most important mono/oligopolies to break are in finance, medical education and law. These are the primary gatekeepers preventing value to reach consumer, these are rent-seeking vampires. Tech is interesting example, of course, but it's like a tempest in the bowl right now. We should permit to innovate everywhere, not just in web search space and e-commerce.

Semaphor 4y ago
I think a big difference might be that in tech, you often have a global monopoly, while finance, medical, and law are more national ones.
lwhi 4y ago
I'd argue that tech stands to eventually swallow the companies in the domains you talk about. The truly difficult thing about monopolies is that their power and strength in the marketplace grows exponentially.
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echelon 4y ago
The main and most important monopolies are, in this order, 1. Apple 2. Google 3. Amazon > finance, medical education and law Each of the above companies reaches deep into finance. Google and Apple capture real world payments on their devices, take 30% on top of any app software, limit or own the web, etc. They're each trying to break into medical, with big medical endeavors underway right now. Forget textbooks. Look at the fight between Google and Apple for the classroom. These companies have their own film studios, for goodness sake. How the hell did we let that happen? Lord of the Rings is Amazon -- What?!
- robertlagrant 4y ago
  We didn't let anything happen. 50 years ago Singer sewing machines was making computers[0]! Why didn't people back then ask who let them innovate and risk their money the way they chose to. I think they understood that you can't both have a process that delivers the fastest progress in human history, and dislike the vanishingly few participants who succeed at it inordinately well. [0] https://en.m.wikipedia.org/wiki/Singer_System_Ten https://en.m.wikipedia.org/wiki/Singer_System_Ten

mengibar10 4y ago

All companies strive/want/expect/hope/conspire for one thing for cost: When purchasing for the input it would like to operate with terms of a market economy but when selling their goods/services they would like to be monopolistic. It's very a fundamental and natural desire. Desire to kill competition is just a manifestation of this fundamental rule.

Barrin92 4y ago

When I lived in China and talked to VCs about the volatile regulatory environment and relatively frequent busting of companies one sentence I heard often was always something along the lines of, "sure it's annoying but you know what? For the occassional billionaire that gets toppled there's a hundred millionaires waiting to take their spot, it's just opportunity". This changed my attitude quite a bit. In particular in the US the debate is often framed from the perspective of the very few individuals adverserly impacted by anti-trust. "If you break X apart, who will want to be the next Y? The answer is quite literally: hundreds of people gleefully waiting to take even a fraction of that market. If there is a void to fill, someone will always do it. I think of all the measures one can take, anti-trust is one of the least disruptive things to the ecosystem overall, because it not only doesn't diminish, but strengthens market dynamics.

eru 4y ago

That's a bit of a weird article: the author seems to argue that monopolies etc are bad, but then makes the mental leap and assumes that just because there's something called 'anti-trust legislation' that it'll help.. The author himself almost grasps the problem: > [...] Oracle became a company more famous for its legal department than new innovation. Just like most other regulation 'anti-trust' is just another weapon that those with a big enough legal department can wield against the competition. We need more competition, not less. Eg we need to allow Wal-Mart to open bank accounts.

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echelon 4y ago
> We need more competition, not less. To posit a real world example, when the predator overkills, the ecosystem dies. To cite just a handful of examples: https://blogs.scientificamerican.com/extinction-countdown/worst-invasive-predators/ https://blogs.scientificamerican.com/extinction-countdown/wo... https://en.wikipedia.org/wiki/Surplus_killing https://en.wikipedia.org/wiki/Surplus_killing Top down pressure on monopolies keeps competition healthy and active. A neverending arms race, which is good for innovation. It prevents lethargy, malinvestment, stagnation, and mere taxation.
- eru 4y ago
  > To posit a real world example, when the predator overkills, the ecosystem dies. Huh? What does a biological predator/prey relationship have to do with economic competition?
routerl 4y ago
> makes the mental leap and assumes that just because there's something called 'anti-trust legislation' that it'll help I'm not trying to defend the author. But there's no "mental leap" here; that's exactly the real-world, observable effect of anti-trust legislation when it is enforced. And what we're seeing now with the FTC is precisely the enforcement, for the first time in decades, of existing anti-trust legislation. If your point is "legislation isn't enough", you're right, but trivially and uselessly right. Of course the real effect comes from enforcement, just as making murder illegal but then not charging and arresting murderers would, obviously and trivially, not decrease the rate of murder.

samwillis 4y ago

I agree with much of this, I would like to highlight one thing in particular: > The bigger a tech company gets the worse it becomes at providing consumer and customer surplus, because it needs to eat that margin (of a sort) to keep growing. Growth demands that tech companies eventually consume that which first engendered them good will. When that comes to Google, I think they are talking about "eating the margin (of a sort)" of the good experience for end users, people searching. But the reality is they are actually eating the very real margin of the advertisers, their "actual customers". In the last ten years, through the excessive ingestion of data about the advertisers businesses, Google has sought to expand their bottom line by extracting as much revenue from advertisers as possible. The advertisers margin has become Google's target revenue. If (nearly) all advertising is via Google, their only way to grow that revenue is by extracting more of the advertisers margin. When you advertise on Google (and FB for that matter) you now have to transmit to Google's algorithm all data about all transactions on your site. This is sold as training the algorithm to enable the targeting of customers. But what you are in fact doing is telling Google everything about your revenue, they know exactly how much you are receiving from all sales. The algorithm is designed to maximise the extraction of the advertisers margin, to squeeze it as much as possible. This is going to come back and bite them. I believe advertisers are going to fall out of love with Google, if they haven't done so already.

jimnotgym 4y ago
I think you are absolutely right. Even on our small ecommerce presence we are seeing it is harder to get a return from Google shopping. A decade ago it was a no brainer, and now it is a money pit. We are seeking instead to expand our influencer involvement.
l33tman 4y ago
As a side-note, increasing margins is not the only way to gain revenue, you can increase the market as well. This is what they have been trying all along with all their parallel products. It was very successful with Android, less so with their self-driving car (that could have increased the market by letting drivers consume internet content and ads during the drive instead of driving).
4y ago

aj7 4y ago

I wouldn’t approach it in terms of “enforcing antitrust laws.” It’s very hard to win those cases. What I would do is limit the cash that public companies can retain. This has the effect of distributing capital to new ventures and competitors naturally. And it has two knock on effects that are also very positive. If Sergei Brin et al want to develop self-driving cars, let them use their own money, or raise new money, not use an advertising company’s stockholders’ money vainly and cavalierly. Second, with less cash around, there’s less to waste in general, and especially for senior managers, less to steal. We could implement my suggestion by making this more tax favorable for everyone involved. Liberate the cash!

amelius 4y ago
I think Stallman proposed limiting the amount of people working for a single company.
zackmorris 4y ago
Traditionally the answer to all of the economic problems we're facing today was taxation. You're right that antitrust cases will never be won at the scale needed to have a material impact on the economy. Plus, big companies will never allow reforms anyway, and will lobby their way out of any loss. So what do we do? What are some ethical and amicable solutions that can be applied evenly and fairly to all citizens? * Tax all property, not just homes. The US national property tax averages 1.1%. So we should tax stocks and other assets at around 1% also. Stockholders would choose to give up 1% of their shares each year, or pay their cash value to keep them. The current US stock market cap is $46 trillion, so 1% of that would be $460 billion. We paid $4.8 trillion in taxes last year, so this property tax would lower taxes for the rest of us by about 10%. The average income tax paid is $20,000 per year, so that would be about a $2000 savings per year. * Charge sales tax on all property sales, including stocks. 5% might be a bit high, and some states don't charge sales tax. So a national rate would be needed to establish a baseline on stock trades, something like 0.1% to 1% per trade. Losses could be used as a tax write-off, so a final sales tax could be charged at the end of the year, which might equal the property tax. This could reasonably raise savings to between $2200 and $4000 per year. * Fund UBI with the wealth taxes stated above. $2000/yr is $167/mo, but $4000 is $333 (about the cost of health insurance or a student loan payment or rent in rural areas). Instead of working to make rent, we could get back to getting real work done. * Organize. Tech could move to a cooperative model where gains/losses are split across teams, and form unions to provide actual resistive power against concentrated wealth: https://www.npr.org/2023/01/04/1146861998/video-game-microsoft-union https://www.npr.org/2023/01/04/1146861998/video-game-microso... * Change the culture of tech. We could make the "I've got mine" mentality of tech bros uncool. Wealth concentration makes property a zero-sum game by forcing 90% of the population to subsist on 10% of the wealth. So we could openly criticize people who have assets above what they would need to retire (perhaps $10 million). Wealth beyond that is an effective theft of the time and resources of workers, who are forced to work to continue paying dividends on that wealth. The opportunity cost of that has grown to consume all of our time, giving us a lower standard of living, less leisure time and less upward mobility (by far) than we had before tickle-down economics which started in the early 1980s: https://www.weforum.org/agenda/2020/09/social-mobility-upwards-decline-usa-us-america-economics/ https://www.weforum.org/agenda/2020/09/social-mobility-upwar... Now to me, everything I said above is obvious. It's self-evidently the way to fix the problem. Any child could understand it. The real difficulty is around de-programming the so-called thought leaders who currently benefit from the wealth inequality status quo. We could and should call them out and challenge them at every opportunity.

mkl95 4y ago

If you like startups you should hate noncompete clauses and love anti-trust. Somehow they coexist in many areas.

piyush_soni 4y ago

I never understood anti-trust. Isn't it punishing a legitimate company for working their ass off for years/decades and growing too big for people's liking? It's my OS, I don't want to put your app on it, I want to put mine. What's the problem? It's actually against free market. I understand it from a socialist point of view though. Edit: The comments so far have given me some perspective. It was a genuine question to understand.

hagbarth 4y ago
It’s about making the market work for consumers. Monopolies and the like sort of break the market dynamic by removing competition. It’s got nothing to do with socialism.
theharrychen 4y ago
The purpose of anti-trust is to prevent firms from exercising market power that leads to predatory pricing and anti-competitive behaviors that lower social surplus and innovation. There's a whole subfield of economics called Industrial Organization that tackles this.
- deleted 4y ago
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hahaxdxd123 4y ago
> It's actually against free market. If you read a lot of the original liberal thought behind the "free market", it actually spells out something probably more aptly named "competitive market". A "free" as in "you can do whatever you want" market does not provide the same theoretical benefits as a competitive market (e.g. you can make models/derive theorems that the long run profits go to 0 due to competition, etc.) Even the wikipedia page for "Free market" today includes: "For classical economists such as Adam Smith, the term free market refers to a market free from all forms of economic privilege, monopolies and artificial scarcities.[2]" I believe that interpretation can come from the following line in Wealth of Nations: "People of the same trade seldom meet together even for merriment or diversion, but the conversation ends in a conspiracy against the publick [sic], or in some contrivance to raise prices." > I understand it from a socialist point of view though. I hope this provides further understanding from a liberal-capitalist point of view :)

xondono 4y ago

I think the author is unaware that “anti-trust” has been used for decades as a bargaining chip, where big companies trade gestures for barriers of entry with the political establishment. The only reason the internet has been the biggest growth sector for more than 2 decades now is that it has been new enough to be less regulated than other industries, but as the giants (Google, Facebook,…) both settle new cases and push for self serving regulations, the barriers grow tall again, and innovation will stop.

guillem_lefait 4y ago

It looks similar to politics. A new candidate have to bring something on the table: new ideas, new faces, new horizon whereas if an in-place politician is interested in being re-elected, he probably wants to show how great he was and keep its base happy enough to have high retention. Maybe you seek rent when you have non negligible costs to maintain past (think maintenance and tech debt)

revskill 4y ago

I don't trust any article without a TLDR at the beginning of the article.

einpoklum 4y ago

> the anti-establishment startup world A "start-up" is a commercial company, intending to make money by selling products and services, and typically invested with large sums by individual or institutional capitalists. In other words, it is the opposite of anti-establishment; at most, it might be antagonistic to the established providers of the relevant products or services.

lannisterstark 4y ago

The issue with this becomes that anti-trust then becomes the tool of the $CurrentRegime to break up companies THEY dislike. For example, part of the reason US costs for healthcare are skyhigh IS because of US govt regulation. IF the only applied it to healthcare giants, but they won't, because they're not the companies the govt dislikes, also $$$. All this will do is end up giving more power to the govt to break up the only thing that actually has the capability endangers their power-hoarding : big companies. Ultimately, Govt IS the biggest company, and you rarely have a choice to switch. If I don't like Amazon, I can go to walmart, or local store. I can't just willy nilly pack up and leave the country. People support regulations (or hell, $MeasureX) until the govt comes for the thing they like, despite people like us telling them that eventually the govt will do just that. (Eg, abortion in the US : People like us were telling others that if they stampede on our rights, they will stampede on yours too, given the chance).

Pozzuh 4y ago
You neglect to mention there actually is a "choice to switch" with regard to the government: it's democracy.
- lannisterstark 4y ago
  "democracy" is "democracy" in name only in many countries. Eg, in the US, Republicans and Democrats are fairly similar middle of the road people. In India, what democracy lol? Same in egypt. "democracy" also depends on others wnating the same change as you. You alone can't do jackshit. I alone can choose not to shop at amazon and choose walmart intead.

phh 4y ago

One of my personal projects that I never pushed forward is a blog "a monopoly a day" (under-titled "keeps the EU away"). The idea is that everyday, I want to show small-ish negative impact of a big tech monopoly, and explaining it. The goal is that the sheer recurrence is enough to convince people of the negative impact on innovation and societal growth big companies have. (That's with a pretty broad definition of "monopoly", including "user-specific monopoly" like you get with android / ios, notions that I would also try to explain in said blog) One example: > https://mobilesyrup.com/2016/09/27/why-blackberry-never-released-an-android-powered-passport/ https://mobilesyrup.com/2016/09/27/why-blackberry-never-rele... > I believe this one shows how a monopoly can prevent innovation. Blackberry with the Passport had a new form-factor. To make this phone worthwhile, it had to use a mainline OS. At the time, only Android with Google apps was available. However, Google rules back then couldn't allow this. Would HNers be interested in such content? And in contributing to it? (my knowledge wrt monopolies is in my area of expertise, and let's just say I like being employable, so it's better if it doesn't look completely targetted)

javajosh 4y ago
Yes, I would like that. It's nice to have a place to record negative experiences in a way that might contribute to a positive outcome eventually. Some of the best (and most verboten) content will come, of course, from insiders. One issue I foresee, similar to how local business groups inevitably get overwhelmed with real-estate agents, is that this venture will get overwhelmed with complaints against ISPs and other utilities.
snowwrestler 4y ago
This project would be interesting only to the extent it accurately showed the negative impact of monopolies. Unfortunately, this subject area is full of strong emotions and opinions that make it hard for people to be objective. For example the article you link says that Google and Blackberry worked jointly on the 1:1 format phone, and jointly decided to stop working on it. That hardly sounds like an abusive monopolist. And sure, at that point Android was more popular than the BlackBerry OS. But this actually demonstrates healthy competition. I had a Blackberry for work (edit to clarify: running BlackBerry’s own OS and software), and so did all my coworkers. Blackberry was the dominant mobile platform once. Through complacency and poor decision-making, they stopped innovating and competing. And thus, allowed new products with zero installed base on day one to come in and take their market.

JumpinJack_Cash 4y ago

Stuff like unnecessary anti-trust is how you end up with a 1500$ phone which is completely locked and that you cannot charge while listening to music at the same time. While we could all be enjoying a Windows phone whose OS could be freely torrented and installed by individual users with Fortune 500 companies subsidizing the whole experience.

dalbasal 4y ago

Anti-establishment startups becoming their parents are instances of a very common pattern. Gods murder their primordial parents. Republicans overthrow kings and crown a Napoleon. The liberator-opressor complex litters history. The first step is to notice the cliche and expect it. The phenomenon exists. Next step, tread lightly. Any reason you think up is too specific. Your reason why Microsoft became IBM under Ballmer does not explain why Cronus castrated Uranus or why he wanted to eat baby Zeus. That said... I think "you are what you eat" is inescapable long term. Wikipedia would not have been wikipedia if it had been a startup, IPOed, etc. If you are a giant software company deeply embedded into locked in customers across all industries... you will have IBM-ish tendencies. Ballmer is Thanos, inevitable.

diegoholiveira 4y ago

It's past time for the US to do to big tech what it did to Standard Oil in 1911. In fact, new legislation is needed to prevent this from happening in the first place. And of course, it is also necessary to restrict the powers of the state to end the possibility of a government that can do anything.

dalbasal 4y ago

I don't disagree with anything specifically, but think this is naive. First, startups are deeply intertwined with monopoly. Financially, a startup is a small chance of huge success. The ultimate win scenario is becoming a monopoly like Microsoft or Amazon did. The next best thing is being acquired by one. If they can't become monopolies, there's a lot less reason to fund, found or work at a startup. A startup that plans to participate in a competitive market is low potential. Making great apps isn't a good startup goal. A proper startup goal is to make the appstore. Do startups, as we know them, even exist without monopolies? Second... Abstract economics is abstract. Creative destruction doesn't exist in the way that economic theories want it to. It's almost non-existent at the enterprise/monopoly level. How many S&P 500 really become defunct? Creative destruction doesn't exist here unless you really squint. It exists in some places. Restaurants rise and file rapidly. So do barbers and many types of small business. Creative destruction definitely happens to startups. Most die. Overall though, if take a cold empirical look... Creative destruction is orders of magnitude stronger or weaker, depending on sector. It's effectively a non existent dynamic for Microsoft, Loyds & such. You could argue that creative destruction is out of control in other sectors. The theory though, the theory abstracts all of this away. A firm is a firm. Parts manufacturer, energy supplier, record label or software company. The gradients of reality outweigh the abstract description. This is true about a lot of economic concepts. "Normal" economics like market determined prices, broadly representing marginal costs in an industry... those are inapplicable concepts to most tech giants. They're not really applicable to government adjacent industries, creative industries, financial industries... I don't mean that you can't use "normal economics" to describe these industries. I just mean that it's less describing a textile or commodity electronics manufacturer this way. One striking difference between many monopolies of today and those of the past is the alternative. The alternative to Twitter or Facebook is simply "no Twitter or Facebook." If Toyota stops making cars, either someone else makes more or everyone has less. If facebook stop making facebook... social media is not scarce. People will still consume as much social media as they want. This isn't like Bell. A court will never have to analyze Facebook's business in order to reorganise it into viable smaller companies.

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jokethrowaway 4y ago

A company will grow up to the point the market needs it to grow. In a pure capitalist market without government I would expect to see a few large players where replicating the technology is really hard and then a bunch of large companies being killed by newer competitors. We kind of see these mechanics in our market but nowhere close to enough. The distortion in our model of crony capitalism is that our centralised government gives unfair advantage to existing corporations in the form of bailouts (hey, too big to fail!) and regulations (easy to implement when you're Amazon, a business killer when you're small). I would love to build a fintech startup and do what banks are doing for cheaper, but regulations in the banking sector make it a very expensive endeavour. Anti trust is not the solution, it's merely a small patch which gets applied incoherently and used as a weapon by governments to steal more money from massive companies. I argue that no regulations would have a better effect on disrupting large monopolies, once there is enough money to be made with little risk.

LatteLazy 4y ago

This whole article is such a mess, I don't know where to start... First, all companies try to capture consumer surplus. Second, how are ads "great value for everyone" but ads added later are "rent seeking"!? Third, Anti Trust will change none of this. In fact a company without a reliably monopoly has no option but to capture more surplus and do it sooner. Fourth, OP doesn't know what a zombie company is (one who's debt interest totally consumes it profit, so it exists only because of cheap credit and is not actually economically productive). Op is just throwing more "shit at the wall to see what sticks". Fifth, he seems very confused about corporate "profit" figures. Revenue and costs are fixed, real numbers. Profit is just made up. And since you pay taxes on profit, it's usually much lower than one would expect. Hence why Amazon is insanely large and successful but never actually makes any money. I dislike this, but I also know that as soon as anyone starts talking about a corporations profits they're making things up. Also, if GCP does close (because it's apparently so unprofitable) then that just makes Amazon (AWS) all the more dominant in the industry (so much for anti-trust). Plus how is any "start up" meant to get a few billion USD together to enter that market? And isn't a market with the largest player at 35% and no one making a profit (lol) exactly how competition is meant to look? Not to mention the 1000s of start ups that reply on these services to save them tonnes of cash!? I am no expert on corporate structures, market structures, anti trust, accounting or economics (or anything else OP apparently is AND is the only one who sees this). But I know enough to know it's complex and there are no easy answers and anyone saying there are is either ignorant or lying.

surume 4y ago

When was the last time the government enacted anti-trust laws against a large company?

AtlasBarfed 4y ago

If you were alive in the 1990s, you'd recall the great religion of the free market. That language has disappeared from the political discourse, because almost all markets are at best cartels, at worst outright monopoly. Antitrust died with the Microsoft trial, an open and shit case with blatant public statement and evidence galore, and the court system failed us, likely by design. Best you can hope for now is denial of merger.

nickpp 4y ago

If you like start-ups you don't take away one of the greatest motivations to create them: the possibility of getting acquired. If you love competition you don't take away the ability of the biggest players to enter "hard" markets and disrupt large entrenched incumbents. And if you are in favor of both startups and competition you fight government regulations which corrupt markets, protects incumbents and grants monopolies.

theptip 4y ago

Oft-overlooked, but this applies beyond “big tech” too. The US has for decades lagged behind most developed countries on broadband internet speed, largely due to the uncompetitive markets. Things like Local Loop Unbundling (back when ADSL was a thing) and allowing/encouraging municipalities to run FTTH would improve things a lot, but the incumbents have lobbied hard against such policies that would force more competition.

TheRealPomax 4y ago
Sort of, but the problem with ISPs is "who owns the infrastructure?" because it doesn't matter how much you want ISP competition if the actual cables are owned by an ISP rather than an independent infrastructure company that ISPs are only allowed to contract to lay new cable without any say in who gets to use it. (The US absolutely adores vertical integration. A company can own the land, the infrastructure, the access to that infrastructure, the services that run on that infrastructure AND strip your rights to the court by forcing you into accepting binding arbitration instead, and the US will point and it with starry eyes and proclaim it a shining example of success)
- theptip 4y ago
  Right, LLU addresses exactly this by requiring network operators to open up their local exchanges to competitors, basically forcing a decoupling of the "last mile delivery" (which is a natural monopoly) from the internet service provision (which is more competitive). It's quite clearly beneficial to consumers to do this, but companies hate it of course.

userabchn 4y ago

Progressive corporate tax rates (like personal income taxes, instead of the current flat corporate tax rates) would help small companies to compete with big ones simply and naturally without needing governments to decide what constitutes a monopoly.

AwaAwa 4y ago

It depends on what you like about startups. If it is the potential to make millions (which from my experience is 95% of the startup folk), then they are very much against anti-trust. If you are a fan of disruption, innovation and advancing the world, you are definitely part of the minority that loves anti-trust. I am personally aware of a few folk in FAANG, that pull ~1-3M a year currently and are busy touring asia to set up their "startup" with plans to make 10x their current renumeration. I cannot see these as people who 'love anti-trust'.

rakkhi 4y ago

This is classic putting the process over outcome. The point of anti trust is not to allow more competition. The point is to stop monopolies that hold customers captive, charging monopoly rents (high prices) and stop innovation. There is a classic paper by Alan Greenspan on the breakup of Standard Oil [1]. He makes the point that supreme court was wrong. The breakup was just for competitors, not for the benefit of customers. This is the worst of capitalism where big business use the government to fight competitors. This is the applicable case with today's tech giants. They are providing often a free product to consumers and continue to innovate. The low barriers to entry provided by digital goods and the internet mean that startups have never had it better. The last thing that is needed is government involvement to break up these companies for "anti trust" [1] http://www.polyconomics.com/ssu/ssu-980612.htm http://www.polyconomics.com/ssu/ssu-980612.htm

rednerrus 4y ago

Wasn't increasing pay at FAANGS the biggest impediment to startups?

cyanydeez 4y ago

Or....you hate it because you can't rely on the value proposition that comes from burning cash just so you can be the first monopoly in the growth industry and buy out your competition. That's the dream of things like Uber And twitter