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I'm glad with this decision. Not sure the exact logic makes sense, but in general the top US tech companies (Google, Amazon, MS, Meta, Apple) are too big. They

by agd 3y ago

I'm glad with this decision. Not sure the exact logic makes sense, but in general the top US tech companies (Google, Amazon, MS, Meta, Apple) are too big. They wield huge power and can snuff out entire startup sectors with loss-leading products. The argument is always 'but we don't have a monopoly in this artificially small sector X', however I don't think that argument is the one we should be looking at when the companies involved are $1trillion+. Can we prove exact consumer harm in each case? No. However, I think most people can accept that there's a risk to consumers, markets, and democracy if companies become too big. Edit. Seeing a lot of comments saying UK couldn't function without Microsoft which kind of supports my point.

pabs3 3y ago
Perhaps it is time to split up some of these tech companies? Lots of their ecosystems are potentially separable into different companies.
3327 3y ago
[dead]
markus_zhang 3y ago
Sadly we are probably too late now. Need to dissect them into multiple entities (and maybe create more jobs) earlier.
- snapcaster 3y ago
  What makes you think it's too late?
  - markus_zhang 3y ago
    They already got enough political power.
jerjerjer 3y ago
Maybe "artificially large"?
rqtwteye 3y ago
Totally agree. These huge companies are terrible for the overall economy, destroy innovation and contribute to inequality.
izacus 3y ago
> hey wield huge power and can snuff out entire startup sectors with loss-leading products. More importantly, they're becoming complacent and lazy, using their legal and financial clout to kill competition, not product improvements. This is why China is so scary - their companies have started being very competitive to US behemoths which have been buying/killing their competition for decade(s) now.
- paganel 3y ago
  > This is why China is so scary - their companies have started being very competitive When it comes to tech regulation the Chinese authorities have at least a 2-3 year advantage against the US/UK, notice how the likes of Alibaba and Tencent have been brought (relatively) down compared to what was expected of them 5 years ago.
  - panick21_ 3y ago
    Lets all celebrate dictatorships not wanting other powerful entities in their country.
    - paganel 3y ago
      You make a good point, that is which institution has more legitimacy inside a de facto authoritarian state? The state itself and its authoritarian leaders? Or a private corporation that got so big as to "submerge" the state? (for the latter case think Samsung and South Korea, if South Korea had kept its 1970s-1980s state-policies).
    - eunos 3y ago
      Unironically
    - izacus 3y ago
      No, let's all celebrate market competition, the most critical part of a functioning economy. Chinese companies aren't competitive due to CCP or authoritarian regime, but they're competitive because they're the underdogs on western markets and can't just curbstomp the competition with lawyers and DRM like US corporations can in their markets. So they're forced to compete on price, quality and features (to some extent - it's not like they're not getting daddy Xis helping hand). Just like companies in other healthy capitalist markets which haven't completely broke due to consolidation.
cubefox 3y ago
Note that Microsoft has an extremely high operating margin of 40%, which indicates insufficient competition. Even Apple has "just" 30%. With all that money laying around, they can just gobble up anything but the biggest fish.
- kgwgk 3y ago
  Different industries have different margins. Apple and Microsoft are not really comparable businesses.
  - drawfloat 3y ago
    You have to take quite a narrow view of the business world to say Apple and Microsoft aren't comparable. They might have different products, but it's not like Apple is a greengrocer.
    - fauxpause_ 3y ago
      From a profit margin perspective they are wildly different. Amazon profits are mostly just AWS. Microsoft is, I think, driven by their enterprise software. Apple is, I think, more hardware and App Store. We shouldn’t expect them to have similar margins.
      - cubefox 3y ago
        Nobody said we should, but they have.
        safog 3y ago
        And so it's a meaningless correlation. Telsa has a 30% margin too. Do you want to lump them along with Apple and MSFT?
        cubefox 3y ago
        This source says 15%: https://companiesmarketcap.com/tesla/operating-margin/ https://companiesmarketcap.com/tesla/operating-margin/
kypro 3y ago
I don't think size is really relevant to the issue at all, it's simply the general anti-competitive practises that size has enabled these companies to pursue as aggressively as needed to crush all competition. What Microsoft is doing with bundling for example is far more destructive to competition than acquisitions. I think what we need is more nuanced regulation to give smaller competitors room to compete with big tech products, if this were the case then who cares about their size or acquisitions? So long as smaller competitors can always rise and challenge the big players then size is fine since it would just correlate to quality and value, rather than an ability and willingness to crush competition. The question to be asking is if a practise is unduly restricting competition. Having a market share of 95% is fine in my eyes so long as there is competition.
Hamuko 3y ago
Yeah, I cannot see this merger being a net benefit for consumers. It reads completely like Microsoft just flexing its financial muscles gained entirely from things unrelated to gaming, and using that money to take over the industry in the long-term. Sure, they did sign on their games with services like Geforce Now for 10 years and bring Call of Duty to Nintendo consoles. However, these all seem like short-term theatre to make everything look nice. First of all, the reason why Microsoft games were not on Geforce Now was because Microsoft PULLED them from it [1]. And considering that Activision-Blizzard is (allegedly) worth $69 billion, I don't believe that they couldn't bring their games onto Nintendo platforms if they saw a market there. Seems like Microsoft is just making up imaginary markets to be able to say "look at all these people who will get Call of Duty because of US". [1] https://www.theverge.com/2020/4/20/21228792/nvidia-geforce-now-microsoft-xbox-game-studios-warner-bros-remove-games https://www.theverge.com/2020/4/20/21228792/nvidia-geforce-n...
Waterluvian 3y ago
I don’t think extra large tech companies are uniquely capable of any meaningful innovation. Ie. there’s no benefit to everyone by having them exist at that size. In fact, I think their size makes them uniquely incapable of innovation. All they can do is push everyone down to stay on top.
- lotsofpulp 3y ago
  I imagine hardware innovation these days requires huge amounts of money.
  - beebeepka 3y ago
    But you mostly need the money, not the headcount
    - lotsofpulp 3y ago
      Where is the money going to come from? The large tech companies are the ones with the best cash flows.
      - beebeepka 3y ago
        They give the money to smaller teams and swallow them upon success. Isn't that how it's been working for a while?
        lotsofpulp 3y ago
        I am confused what we are conversing about. Waterluvian wrote the big tech companies are not capable of innovation, so my response was the funding still needs to come from them. Whether or not it is a large group of employees or a small group of employees doing the innovating is a separate matter, but the need for huge cash flows is there (if my assertion is correct).
        3y ago
Tycho 3y ago
Plus, as we saw recently with Twitter, they are massively over staffed and depriving other companies of workers.
passwordoops 3y ago
>"Seeing a lot of comments saying UK couldn't function without Microsoft" Too Big to Fail should be recast as Too Big to Exist
somenameforme 3y ago
At least in the US it wasn't even about monopolies, but about whether or not a merger would negatively affect competition. [1] But at some point it feels like the FTC simply stopped enforcing its own guidelines, at least when large enough players were involved. Because it's somewhat self evident that the overwhelmingly majority of big corp mergers over the past couple of decades have completely crippled competition. That said, I think this indirectly feeds off your core point - this 'new direction' of the FTC is almost certainly because these companies have become far too 'influential' owing to their size and power. I think one could even generalize a simple test: "Would the immediate collapse of this company meaningfully imperil the US economy, security, or other significant interests?" If so, that company needs to be split up until the answer is no. [1] - https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/mergers https://www.ftc.gov/advice-guidance/competition-guidance/gui...
- fallingknife 3y ago
  Large tech companies are nothing like banks and have no mechanism to immediately collapse. In fact, the fact that their collapse would imperil the US economy is a 100% guarantee that they won't collapse because it means people are dependent on buying their products. And if you did break them up, it wouldn't solve the problem at all. Whatever company is in charge of Windows is still going to be critical no matter the size. It depends on the importance of the software product in the tech industry, not the size of the company like it does in banking.
  - vxNsr 3y ago
    The difference is that if Windows corp isn’t part of the O365 corp then they’re both forced to work with competitors instead of forcing you into their walled garden. How nice would it be if all the features that you get from the windows/O365/Onedrive synergy were available to any cloud competitor? So I could pair word/excel sync with my own self-hosted cloud. I could back up all my files using the native tools to any cloud provider. That’s the sort of benefit you could theoretically have by breaking up Microsoft.
AraceliHarker 3y ago
Have you seen the press release from CMA? They only mention cloud gaming and game pass price increase as the reasons to oppose Microsoft’s acquisition of AB, right?
crazygringo 3y ago
> but in general the top US tech companies... are too big > I think most people can accept that there's a risk to consumers, markets, and democracy if companies become too big. I don't think that's true at all. If you want to make an argument that companies are too big, you need some exact logic to support it. The only solid arguments I'm aware of are specifically regarding banks because of their systemic impact on the economy -- the become "too big to fail" and thereby become a moral hazard situation. Although given the efficiencies of large banks, the solution has become to regulate them more tightly to prevent moral hazards, not to break them up. But the idea that tech companies are too big doesn't have the same kind of logic behind it, and your assertion that they "snuff out entire startup sectors" doesn't seem to be supported by any evidence. To the contrary, they invest in entire startup sectors and competing top tech companies buy competing startups to supercharge them. Competition is thriving as the big tech firms compete with each other. In the modern era of Big Tech, consumers seem to be doing great, markets seem to be doing great, and Big Tech's size is probably not even in the top 50 threats to democracy. The effects of social media is surely in the top 5 threats to democracy, but that has nothing whatsoever to do with the size of the company that owns a social network.
- orra 3y ago
  > I don't think that's true at all. If you want to make an argument that companies are too big, you need some exact logic to support it. It's well known that oligopolies are bad for efficient pricing, just like with (though not as extreme as) monopolies. That's why EU competition law rightly focuses on "significant market power", rather than US competition law which cares little unless there is a literal monopoly. (Currently, the UK retains EU competition law).
- agd 3y ago
  > Competition is thriving as the big tech firms compete with each other. Thriving competition wouldn't result in super profits year on year.
  - safog 3y ago
    Organic growth towards computing and digital does that. Time spent online is increasing, services are getting better, people are moving to the cloud from on-prem etc. etc. It's not a zero sum game right now. The moment FAANGs are in a zero sum game trying to cannibalize each others' market shares I predict HN won't even have an argument around if tech firms are too big. That means tech has plateaued and has become a mature business like Coca cola or Kroger.
015a 3y ago
Its extremely frustrating how we let the tech companies get to be this large, such that now we really have to consider blocking every acquisition, even though this one in particular I think wouldn't be all that bad and may actually be a positive for consumers. Activision is an unusually cruel and extremely horrible company, whereas the Xbox Division of Microsoft has been one of maybe only a couple "great" stewards of the gaming industry for consumers (Epic is also a great company, but beyond those two when it comes to major developers/publishers there's far more bad than good). I'm genuinely of the opinion that all of Xbox, Activision, and their customers will be worse-off without this deal. This is a HackerNews Arm Chair Quarterbacking Stretch, but I think a really positive move for Microsoft would be to spin-off Xbox into a separate company. I can't imagine the division is all that profitable; its grown to confer practically zero positive network effects for Microsoft's other businesses. Culturally its got to be the weirdest thing Microsoft does nowadays. This AB deal likely single-handedly increases the valuation of the division by, jeeze, 50%? Maybe more.
- mikepurvis 3y ago
  I feel like with Gamepass and all their exclusives being day 1 on Windows as well, there's probably more crossover nowadays than there has been in years, but overall you're right that spinning out Xbox entirely would make a lot of sense.
  - newswasboring 3y ago
    Is the xbox division the main gaming division of MS?
  - mehlmao 3y ago
    They can't spin out Gamepass because it is a money pit. There aren't enough subscribers to fund large budget game development. At the same time, Gamepass trains subscribers to not purchase new games, because they'll be on Gamepass eventually.
    - PaulHoule 3y ago
      I hate the idea of Gamepass because I saw it happen to cable television. In the 1980s, for instance, MTV really showed music videos. It got bought by old fogey Sumner Redstone who decided unilaterally that we couldn't see music videos anymore -- funny now that we have YouTube it's been discovered that people want to watch music videos when they can. (A bit of destruction like Musk buying Twitter?) If you buy a game you are voting with your dollar, if you subscribe they're going to make an Assassin's Creed game this year, and next year, and the year after that, and the year after that. The game industry is going to make whatever games it wants to make, and Microsoft will pay them, and I guess people will play them because they don't have a choice. We saw that with cable, since they get paid whether or not you watch, they can skimp on quality and collect increasing payments year after year. The movie and TV industry has been driven mad by streaming because suddenly performance matters... Disney is completely capable of producing a product that upholds it's brand but why do it when you can get $7 a month from every cable subscriber for ESPN whether or not they watch sports?
kartayyar 3y ago
In other words, a shallow big == bad without taking specfic context into consideration? Imo I want competition and choice as a consumer. This basically sets things up so that consoles become a non competitive market because Xbox lacks exclusives that Sony has.
ronnier 3y ago
This will make it easier for large Chinese companies to rule over you that can "snuff out entire startup sectors with loss-leading products".
pyrale 3y ago
> Edit. Seeing a lot of comments saying UK couldn't function without Microsoft which kind of supports my point. The replies advocating for Microsoft to strong-arm a country into submission are chilling.
gigel82 3y ago
In general I agree with you; but in this particular case, this is a "win" for Sony who can continue with their vast array of exclusives unhindered, and a "loss" for gaming customers due to that.
shubb 3y ago
Remember that time meta set up a free vpn app with no meta branding so they could monitor traffic and upcoming rival apps in real time to copy their features and neuter them? https://en.m.wikipedia.org/wiki/Onavo https://en.m.wikipedia.org/wiki/Onavo Onavo vpn
that_guy_iain 3y ago
My personal opinion it it really stops Microsoft being able to fully compete with Sony. Sony did a good job of buying up game studios to make PlayStation exclusive games. Microsoft tries to get into the game and it appears at first glance they're prevented.
adql 3y ago
A lot of people want to see it purely on hope that under MS Actiblizzard will be less shit of a company. Which is... optimistic.
- AlexandrB 3y ago
  It's very optimistic. Even under new leadership the creative talent that Blizzard has lost over the last 10 years is not coming back. Microsoft themselves aren't particularly good at picking talent either - see the Halo Infinite/343 Studios debacle. Maybe there would be less of a push for player-hostile monetization, but I wouldn't count on it. The people who made and executed those decisions at Activision/Blizzard aren't magically going away either.
bgorman 3y ago
The logic doesn't make sense, and Microsoft also doesn't have a market power advantage here. The Xbox Series X/S has been a bit of a boondoggle and Sony is vastly outselling Microsoft this generation. Not to mention the existence of Nintendo, Valve and other PC gaming stores. The argument that this would weaken competition for gaming consoles is laughable. Sony and Nintendo have exclusive games to gain an advantage. Now an American company wants to do the same thing, and they are blocked. American companies are being put at a competitive disadvantage due to ridiculous anti-trust interpretations. Basically the CMA and FTC are trying to prevent any American tech company from acquiring another tech company for political points at home. How did we get to this point? It is extremely dangerous to throw logic out the window, as this results in bureaucrats picking winners and losers.
traceroute66 3y ago
> Edit. Seeing a lot of comments saying UK couldn't function without Microsoft which kind of supports my point. Yup. The NHS (UK National Health Service) is Microsoft's biggest single account for Office/Office365 and probably other stuff too. So I guess add on other parts of UK gov and yeah, "couldn't function without Microsoft" is not far from the truth. I mean, some might argue that the UK government hasn't functioned much since 2016/Brexit anyway, but that's another story. :)
- bloqs 3y ago
  Reminds me of the NHS Linux effort, that the CTO faked interest in, then used as a bartering stick to lower the M365 subscription price, then ghosted the NHS Linux devs
zitterbewegung 3y ago
This is especially pertinent to Microsoft which wants video games for their own hardware while Sony might have exclusives Destiny 2 is still on all platforms. Not to say that Sony is a perfect example in every situation and they do have exclusives.
- bloqs 3y ago
  Sony have been absolutely pathetic in regards to exclusivity agreements. Play either of the last Call of Duty games on a Playstation, you get and entire gamemode, permanent xp boosts, content unavailable for other platforms, or content available early. Insane they could even begin to suggest that they aren't guilty of the same for years.
throwaway675309 3y ago
This. This is exactly why I am ideologically opposed to working for a FAANG. You can do more than just avoiding purchasing their products - giving them your labor and resources allows these companies to gain even more power and influence than they already have.
29athrowaway 3y ago
So what would be better then? Baidu, Alibaba, Tencent, Huawei, Bytedance? At least FB doesn't promote stupid challenges that send people to the hospital with cracked skulls like TikTok.
cabalamat 3y ago
If UK couldn't function without Microsoft, that's reason for the UK to create its own ICT industries so that its ICT sector isn't controlled by foreigners.
gofreddygo 3y ago
I believe all this circus needs is just one big corp poking one big enough government to trigger this super reaction towards entropy. Why? Cz there's $$$ to be had in the fallout for said govt and other competing big corps. And then the next govt follows suit and voila - a super reaction chain !

by agd 3y ago

pabs3 3y ago

Perhaps it is time to split up some of these tech companies? Lots of their ecosystems are potentially separable into different companies.

3327 3y ago

[dead]

markus_zhang 3y ago

Sadly we are probably too late now. Need to dissect them into multiple entities (and maybe create more jobs) earlier.

snapcaster 3y ago
What makes you think it's too late?
- markus_zhang 3y ago
  They already got enough political power.

jerjerjer 3y ago

Maybe "artificially large"?

rqtwteye 3y ago

Totally agree. These huge companies are terrible for the overall economy, destroy innovation and contribute to inequality.

izacus 3y ago

> hey wield huge power and can snuff out entire startup sectors with loss-leading products. More importantly, they're becoming complacent and lazy, using their legal and financial clout to kill competition, not product improvements. This is why China is so scary - their companies have started being very competitive to US behemoths which have been buying/killing their competition for decade(s) now.

paganel 3y ago
> This is why China is so scary - their companies have started being very competitive When it comes to tech regulation the Chinese authorities have at least a 2-3 year advantage against the US/UK, notice how the likes of Alibaba and Tencent have been brought (relatively) down compared to what was expected of them 5 years ago.
- panick21_ 3y ago
  Lets all celebrate dictatorships not wanting other powerful entities in their country.
  - paganel 3y ago
    You make a good point, that is which institution has more legitimacy inside a de facto authoritarian state? The state itself and its authoritarian leaders? Or a private corporation that got so big as to "submerge" the state? (for the latter case think Samsung and South Korea, if South Korea had kept its 1970s-1980s state-policies).
  - eunos 3y ago
    Unironically
  - izacus 3y ago
    No, let's all celebrate market competition, the most critical part of a functioning economy. Chinese companies aren't competitive due to CCP or authoritarian regime, but they're competitive because they're the underdogs on western markets and can't just curbstomp the competition with lawyers and DRM like US corporations can in their markets. So they're forced to compete on price, quality and features (to some extent - it's not like they're not getting daddy Xis helping hand). Just like companies in other healthy capitalist markets which haven't completely broke due to consolidation.

cubefox 3y ago

Note that Microsoft has an extremely high operating margin of 40%, which indicates insufficient competition. Even Apple has "just" 30%. With all that money laying around, they can just gobble up anything but the biggest fish.

kgwgk 3y ago
Different industries have different margins. Apple and Microsoft are not really comparable businesses.
- drawfloat 3y ago
  You have to take quite a narrow view of the business world to say Apple and Microsoft aren't comparable. They might have different products, but it's not like Apple is a greengrocer.
  - fauxpause_ 3y ago
    From a profit margin perspective they are wildly different. Amazon profits are mostly just AWS. Microsoft is, I think, driven by their enterprise software. Apple is, I think, more hardware and App Store. We shouldn’t expect them to have similar margins.
    - cubefox 3y ago
      Nobody said we should, but they have.
      - safog 3y ago
        And so it's a meaningless correlation. Telsa has a 30% margin too. Do you want to lump them along with Apple and MSFT?
        cubefox 3y ago
        This source says 15%: https://companiesmarketcap.com/tesla/operating-margin/ https://companiesmarketcap.com/tesla/operating-margin/

kypro 3y ago

I don't think size is really relevant to the issue at all, it's simply the general anti-competitive practises that size has enabled these companies to pursue as aggressively as needed to crush all competition. What Microsoft is doing with bundling for example is far more destructive to competition than acquisitions. I think what we need is more nuanced regulation to give smaller competitors room to compete with big tech products, if this were the case then who cares about their size or acquisitions? So long as smaller competitors can always rise and challenge the big players then size is fine since it would just correlate to quality and value, rather than an ability and willingness to crush competition. The question to be asking is if a practise is unduly restricting competition. Having a market share of 95% is fine in my eyes so long as there is competition.

Hamuko 3y ago

Yeah, I cannot see this merger being a net benefit for consumers. It reads completely like Microsoft just flexing its financial muscles gained entirely from things unrelated to gaming, and using that money to take over the industry in the long-term. Sure, they did sign on their games with services like Geforce Now for 10 years and bring Call of Duty to Nintendo consoles. However, these all seem like short-term theatre to make everything look nice. First of all, the reason why Microsoft games were not on Geforce Now was because Microsoft PULLED them from it [1]. And considering that Activision-Blizzard is (allegedly) worth $69 billion, I don't believe that they couldn't bring their games onto Nintendo platforms if they saw a market there. Seems like Microsoft is just making up imaginary markets to be able to say "look at all these people who will get Call of Duty because of US". [1] https://www.theverge.com/2020/4/20/21228792/nvidia-geforce-now-microsoft-xbox-game-studios-warner-bros-remove-games https://www.theverge.com/2020/4/20/21228792/nvidia-geforce-n...

Waterluvian 3y ago

I don’t think extra large tech companies are uniquely capable of any meaningful innovation. Ie. there’s no benefit to everyone by having them exist at that size. In fact, I think their size makes them uniquely incapable of innovation. All they can do is push everyone down to stay on top.

lotsofpulp 3y ago
I imagine hardware innovation these days requires huge amounts of money.
- beebeepka 3y ago
  But you mostly need the money, not the headcount
  - lotsofpulp 3y ago
    Where is the money going to come from? The large tech companies are the ones with the best cash flows.
    - beebeepka 3y ago
      They give the money to smaller teams and swallow them upon success. Isn't that how it's been working for a while?
      - lotsofpulp 3y ago
        I am confused what we are conversing about. Waterluvian wrote the big tech companies are not capable of innovation, so my response was the funding still needs to come from them. Whether or not it is a large group of employees or a small group of employees doing the innovating is a separate matter, but the need for huge cash flows is there (if my assertion is correct).
        3y ago

Tycho 3y ago

Plus, as we saw recently with Twitter, they are massively over staffed and depriving other companies of workers.

passwordoops 3y ago

>"Seeing a lot of comments saying UK couldn't function without Microsoft" Too Big to Fail should be recast as Too Big to Exist

somenameforme 3y ago

At least in the US it wasn't even about monopolies, but about whether or not a merger would negatively affect competition. [1] But at some point it feels like the FTC simply stopped enforcing its own guidelines, at least when large enough players were involved. Because it's somewhat self evident that the overwhelmingly majority of big corp mergers over the past couple of decades have completely crippled competition. That said, I think this indirectly feeds off your core point - this 'new direction' of the FTC is almost certainly because these companies have become far too 'influential' owing to their size and power. I think one could even generalize a simple test: "Would the immediate collapse of this company meaningfully imperil the US economy, security, or other significant interests?" If so, that company needs to be split up until the answer is no. [1] - https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/mergers https://www.ftc.gov/advice-guidance/competition-guidance/gui...

fallingknife 3y ago
Large tech companies are nothing like banks and have no mechanism to immediately collapse. In fact, the fact that their collapse would imperil the US economy is a 100% guarantee that they won't collapse because it means people are dependent on buying their products. And if you did break them up, it wouldn't solve the problem at all. Whatever company is in charge of Windows is still going to be critical no matter the size. It depends on the importance of the software product in the tech industry, not the size of the company like it does in banking.
- vxNsr 3y ago
  The difference is that if Windows corp isn’t part of the O365 corp then they’re both forced to work with competitors instead of forcing you into their walled garden. How nice would it be if all the features that you get from the windows/O365/Onedrive synergy were available to any cloud competitor? So I could pair word/excel sync with my own self-hosted cloud. I could back up all my files using the native tools to any cloud provider. That’s the sort of benefit you could theoretically have by breaking up Microsoft.

AraceliHarker 3y ago

Have you seen the press release from CMA? They only mention cloud gaming and game pass price increase as the reasons to oppose Microsoft’s acquisition of AB, right?

crazygringo 3y ago

> but in general the top US tech companies... are too big > I think most people can accept that there's a risk to consumers, markets, and democracy if companies become too big. I don't think that's true at all. If you want to make an argument that companies are too big, you need some exact logic to support it. The only solid arguments I'm aware of are specifically regarding banks because of their systemic impact on the economy -- the become "too big to fail" and thereby become a moral hazard situation. Although given the efficiencies of large banks, the solution has become to regulate them more tightly to prevent moral hazards, not to break them up. But the idea that tech companies are too big doesn't have the same kind of logic behind it, and your assertion that they "snuff out entire startup sectors" doesn't seem to be supported by any evidence. To the contrary, they invest in entire startup sectors and competing top tech companies buy competing startups to supercharge them. Competition is thriving as the big tech firms compete with each other. In the modern era of Big Tech, consumers seem to be doing great, markets seem to be doing great, and Big Tech's size is probably not even in the top 50 threats to democracy. The effects of social media is surely in the top 5 threats to democracy, but that has nothing whatsoever to do with the size of the company that owns a social network.

orra 3y ago
> I don't think that's true at all. If you want to make an argument that companies are too big, you need some exact logic to support it. It's well known that oligopolies are bad for efficient pricing, just like with (though not as extreme as) monopolies. That's why EU competition law rightly focuses on "significant market power", rather than US competition law which cares little unless there is a literal monopoly. (Currently, the UK retains EU competition law).
agd 3y ago
> Competition is thriving as the big tech firms compete with each other. Thriving competition wouldn't result in super profits year on year.
- safog 3y ago
  Organic growth towards computing and digital does that. Time spent online is increasing, services are getting better, people are moving to the cloud from on-prem etc. etc. It's not a zero sum game right now. The moment FAANGs are in a zero sum game trying to cannibalize each others' market shares I predict HN won't even have an argument around if tech firms are too big. That means tech has plateaued and has become a mature business like Coca cola or Kroger.

015a 3y ago

Its extremely frustrating how we let the tech companies get to be this large, such that now we really have to consider blocking every acquisition, even though this one in particular I think wouldn't be all that bad and may actually be a positive for consumers. Activision is an unusually cruel and extremely horrible company, whereas the Xbox Division of Microsoft has been one of maybe only a couple "great" stewards of the gaming industry for consumers (Epic is also a great company, but beyond those two when it comes to major developers/publishers there's far more bad than good). I'm genuinely of the opinion that all of Xbox, Activision, and their customers will be worse-off without this deal. This is a HackerNews Arm Chair Quarterbacking Stretch, but I think a really positive move for Microsoft would be to spin-off Xbox into a separate company. I can't imagine the division is all that profitable; its grown to confer practically zero positive network effects for Microsoft's other businesses. Culturally its got to be the weirdest thing Microsoft does nowadays. This AB deal likely single-handedly increases the valuation of the division by, jeeze, 50%? Maybe more.

mikepurvis 3y ago
I feel like with Gamepass and all their exclusives being day 1 on Windows as well, there's probably more crossover nowadays than there has been in years, but overall you're right that spinning out Xbox entirely would make a lot of sense.
- newswasboring 3y ago
  Is the xbox division the main gaming division of MS?
- mehlmao 3y ago
  They can't spin out Gamepass because it is a money pit. There aren't enough subscribers to fund large budget game development. At the same time, Gamepass trains subscribers to not purchase new games, because they'll be on Gamepass eventually.
  - PaulHoule 3y ago
    I hate the idea of Gamepass because I saw it happen to cable television. In the 1980s, for instance, MTV really showed music videos. It got bought by old fogey Sumner Redstone who decided unilaterally that we couldn't see music videos anymore -- funny now that we have YouTube it's been discovered that people want to watch music videos when they can. (A bit of destruction like Musk buying Twitter?) If you buy a game you are voting with your dollar, if you subscribe they're going to make an Assassin's Creed game this year, and next year, and the year after that, and the year after that. The game industry is going to make whatever games it wants to make, and Microsoft will pay them, and I guess people will play them because they don't have a choice. We saw that with cable, since they get paid whether or not you watch, they can skimp on quality and collect increasing payments year after year. The movie and TV industry has been driven mad by streaming because suddenly performance matters... Disney is completely capable of producing a product that upholds it's brand but why do it when you can get $7 a month from every cable subscriber for ESPN whether or not they watch sports?

kartayyar 3y ago

In other words, a shallow big == bad without taking specfic context into consideration? Imo I want competition and choice as a consumer. This basically sets things up so that consoles become a non competitive market because Xbox lacks exclusives that Sony has.

ronnier 3y ago

This will make it easier for large Chinese companies to rule over you that can "snuff out entire startup sectors with loss-leading products".

pyrale 3y ago

> Edit. Seeing a lot of comments saying UK couldn't function without Microsoft which kind of supports my point. The replies advocating for Microsoft to strong-arm a country into submission are chilling.

gigel82 3y ago

In general I agree with you; but in this particular case, this is a "win" for Sony who can continue with their vast array of exclusives unhindered, and a "loss" for gaming customers due to that.

shubb 3y ago

Remember that time meta set up a free vpn app with no meta branding so they could monitor traffic and upcoming rival apps in real time to copy their features and neuter them? https://en.m.wikipedia.org/wiki/Onavo https://en.m.wikipedia.org/wiki/Onavo Onavo vpn

that_guy_iain 3y ago

My personal opinion it it really stops Microsoft being able to fully compete with Sony. Sony did a good job of buying up game studios to make PlayStation exclusive games. Microsoft tries to get into the game and it appears at first glance they're prevented.

adql 3y ago

A lot of people want to see it purely on hope that under MS Actiblizzard will be less shit of a company. Which is... optimistic.

AlexandrB 3y ago
It's very optimistic. Even under new leadership the creative talent that Blizzard has lost over the last 10 years is not coming back. Microsoft themselves aren't particularly good at picking talent either - see the Halo Infinite/343 Studios debacle. Maybe there would be less of a push for player-hostile monetization, but I wouldn't count on it. The people who made and executed those decisions at Activision/Blizzard aren't magically going away either.

bgorman 3y ago

The logic doesn't make sense, and Microsoft also doesn't have a market power advantage here. The Xbox Series X/S has been a bit of a boondoggle and Sony is vastly outselling Microsoft this generation. Not to mention the existence of Nintendo, Valve and other PC gaming stores. The argument that this would weaken competition for gaming consoles is laughable. Sony and Nintendo have exclusive games to gain an advantage. Now an American company wants to do the same thing, and they are blocked. American companies are being put at a competitive disadvantage due to ridiculous anti-trust interpretations. Basically the CMA and FTC are trying to prevent any American tech company from acquiring another tech company for political points at home. How did we get to this point? It is extremely dangerous to throw logic out the window, as this results in bureaucrats picking winners and losers.

traceroute66 3y ago

> Edit. Seeing a lot of comments saying UK couldn't function without Microsoft which kind of supports my point. Yup. The NHS (UK National Health Service) is Microsoft's biggest single account for Office/Office365 and probably other stuff too. So I guess add on other parts of UK gov and yeah, "couldn't function without Microsoft" is not far from the truth. I mean, some might argue that the UK government hasn't functioned much since 2016/Brexit anyway, but that's another story. :)

bloqs 3y ago
Reminds me of the NHS Linux effort, that the CTO faked interest in, then used as a bartering stick to lower the M365 subscription price, then ghosted the NHS Linux devs

zitterbewegung 3y ago

This is especially pertinent to Microsoft which wants video games for their own hardware while Sony might have exclusives Destiny 2 is still on all platforms. Not to say that Sony is a perfect example in every situation and they do have exclusives.

bloqs 3y ago
Sony have been absolutely pathetic in regards to exclusivity agreements. Play either of the last Call of Duty games on a Playstation, you get and entire gamemode, permanent xp boosts, content unavailable for other platforms, or content available early. Insane they could even begin to suggest that they aren't guilty of the same for years.

throwaway675309 3y ago

This. This is exactly why I am ideologically opposed to working for a FAANG. You can do more than just avoiding purchasing their products - giving them your labor and resources allows these companies to gain even more power and influence than they already have.

29athrowaway 3y ago

So what would be better then? Baidu, Alibaba, Tencent, Huawei, Bytedance? At least FB doesn't promote stupid challenges that send people to the hospital with cracked skulls like TikTok.

cabalamat 3y ago

If UK couldn't function without Microsoft, that's reason for the UK to create its own ICT industries so that its ICT sector isn't controlled by foreigners.

gofreddygo 3y ago

I believe all this circus needs is just one big corp poking one big enough government to trigger this super reaction towards entropy. Why? Cz there's $$$ to be had in the fallout for said govt and other competing big corps. And then the next govt follows suit and voila - a super reaction chain !