4 ms·

I wonder, besides classical antitrust stuff (which doesn't seem to work at all), is there some sort of measures that would make the process inverse, making gian

I wonder, besides classical antitrust stuff (which doesn't seem to work at all), is there some sort of measures that would make the process inverse, making giant corporations want to disperse into smaller autonomous companies?

gostsamo 3y ago
Regulation. If you forbid verticals on a market, you might prevent mergers or create splits. E.g. american cinema where studios are forbidden from having their own saloons and are forced to license their products. Currently made irrelevant by the streaming services where the rule does not apply.
- nostromo 3y ago
  Regulation often has the opposite effect by raising barriers to entry and reducing competition.
  - rocqua 3y ago
    Regulation against vertical integration should have much less of such an effect.
  - hayst4ck 3y ago
    I think that is a simple view of regulation. "You must do this" style regulation like GDPR does raise barriers of entry. "You can't do this," style regulation like trust busting doesn't seem like it would involve raising barriers to entry. It seems like it would lower them.
    - psd1 3y ago
      On GDPR, broadly speaking it's more "you can't" than "you must". Don't keep people's data and you're fine. Granted, some businesses need to keep some data as a matter of doing business. But the problem that pre-gdpr businesses have with the rules is that they were set up with the mindset that keeping everything is free. A startup need merely nuke stale accounts. So it's an advantage over the incumbents, who have to figure out deletion in databases that weren't designed for it.
      - zeroonetwothree 3y ago
        The startup now has to spend $X more implementing handling those regulations rather than building an MVP and finding PMF. This might be the difference between success and failure. Thus there will be fewer successful startups than in the world without the regulation. Conversely a big corporation will lose some % of profit to dealing with the regulation (or perhaps it will just raise prices if it’s not competitive). But it’s not an existential concern.
    - matkoniecz 3y ago
      It rather depends on whether something has large constant cost that is punishing for small companies and negligible for large. For example if something requires producing 10 000 pages of legalese it will block new companies and be not so problematic for large ones. Or when company needs to heavily research what exactly they can offer/sell and it requires massive effort (it technically is "you can't do this" one).
  - gostsamo 3y ago
    You just repeated a mantra without thinking through it. Regulation is whatever it is made to be.
    - ThunderSizzle 3y ago
      It is made to be a barrier to competition. Good luck setting up an in compliance web store based on the current sales tax rules that Amazon basically brought to us.
      - Timon3 3y ago
        Could you try to clearly explain how regulation against vertical integration raises the barrier to competition? I can't come up with any explanation where it doesn't lower the barrier.
        naveen99 3y ago
        Vertical integration is a value add. By restricting it, you make it harder for challengers who want to start with vertical integration. Example: vertical integration restrictions prohibit car manufacturers from operating dealerships. Tesla used vertical integration in other states to lower costs and create a cheaper electric car business. With tighter rules against vertical integration you may not have tesla.
        Timon3 3y ago
        If the goal of regulation is to prevent vertical integration, it is not really helpful to say "oh, but doing this will prevent vertical integration!". Yes, of course it will, that's what we said it should do. You might think this is a bad idea, but it's not a downside of the regulation.
        naveen99 3y ago
        Vertical integration isn’t an end goal of businesses or regulation. it’s also hard to even define.
nostromo 3y ago
Block more mergers. It’s easier than breaking companies up afterwards.
drbaba 3y ago
Maybe progressive taxation of companies, where they pay more tax the larger they become?
- anshumankmr 3y ago
  If their revenue would increase, would they not be taxed more?
  - Rygian 3y ago
    The amount taxed is not relevant. It's the tax rate that would grow higher.
  - patmorgan23 3y ago
    Revenue is not taxed, only profit (revenue-expenses) is.
- rocqua 3y ago
  Might be to much nuance in dealing with the obvious tax-dodge of a company splitting up into a conglomerate of subsidiaries. But I do very much like the idea.
- zeroonetwothree 3y ago
  Corporate income taxes are already terrible for health and create awful incentives. Ultimately corporate profits go to individuals so we should only tax them at that point. (Or have just a consumption tax, which kind of solves all these problems)
hayst4ck 3y ago
After citizens united the feedback loop of corruption became too strong. Company pays for candidates advertisements so they can win primary -> can only vote on candidates that companies voted for first -> politicians are responsive to their benefactors -> politicians de-regulate/ignore mergers/grid lock themselves -> companies are able to centralize more power -> company increases their influence over the government to get even more influence... This un-virtuous cycle means the only way out is unions (or french-ery). We have openly corrupt supreme court justices who laugh in our face and say "what are you gonna do about it?" Pelosi said "I can trade stock on companies I regulate" and basically said "what are you gonna do about it?" Government intervention can only come after we have an answer for corrupt politicians saying "what are you gonna do about it?" Kroger and Albertsons are gonna merge... "what are you going to do about it?"
- baremetal 3y ago
  We have no way to hold our leaders accountable. On either side of the aisle.
- zeroonetwothree 3y ago
  Corporations actually don’t spend that much on advertising. It’s mostly super PACs that benefit from Citizens United. Many of them are funded by wealthy individuals, not corporations.
rocqua 3y ago
Currently the SEC disclosure work scales sub-linearly with size. Because you only need to report on 'material information' and what counts as material is about relative size. Forcing companies to report on any effort above 1 mil might make reporting on big companies so horrible they prefer to split up?
KirillPanov 3y ago
Graduated corporate income tax. It's real simple. Want a lower tax rate? Do a demerger.
ouid 3y ago
[dead]
zeroonetwothree 3y ago
Larger companies breaking up happens all the time too. It’s part of the natural business cycle.
ilyt 3y ago
Tax the fuck out of them. On income, not profits, based on marketshare they own.

gostsamo 3y ago

Regulation. If you forbid verticals on a market, you might prevent mergers or create splits. E.g. american cinema where studios are forbidden from having their own saloons and are forced to license their products. Currently made irrelevant by the streaming services where the rule does not apply.

nostromo 3y ago
Regulation often has the opposite effect by raising barriers to entry and reducing competition.
- rocqua 3y ago
  Regulation against vertical integration should have much less of such an effect.
- hayst4ck 3y ago
  I think that is a simple view of regulation. "You must do this" style regulation like GDPR does raise barriers of entry. "You can't do this," style regulation like trust busting doesn't seem like it would involve raising barriers to entry. It seems like it would lower them.
  - psd1 3y ago
    On GDPR, broadly speaking it's more "you can't" than "you must". Don't keep people's data and you're fine. Granted, some businesses need to keep some data as a matter of doing business. But the problem that pre-gdpr businesses have with the rules is that they were set up with the mindset that keeping everything is free. A startup need merely nuke stale accounts. So it's an advantage over the incumbents, who have to figure out deletion in databases that weren't designed for it.
    - zeroonetwothree 3y ago
      The startup now has to spend $X more implementing handling those regulations rather than building an MVP and finding PMF. This might be the difference between success and failure. Thus there will be fewer successful startups than in the world without the regulation. Conversely a big corporation will lose some % of profit to dealing with the regulation (or perhaps it will just raise prices if it’s not competitive). But it’s not an existential concern.
  - matkoniecz 3y ago
    It rather depends on whether something has large constant cost that is punishing for small companies and negligible for large. For example if something requires producing 10 000 pages of legalese it will block new companies and be not so problematic for large ones. Or when company needs to heavily research what exactly they can offer/sell and it requires massive effort (it technically is "you can't do this" one).
- gostsamo 3y ago
  You just repeated a mantra without thinking through it. Regulation is whatever it is made to be.
  - ThunderSizzle 3y ago
    It is made to be a barrier to competition. Good luck setting up an in compliance web store based on the current sales tax rules that Amazon basically brought to us.
    - Timon3 3y ago
      Could you try to clearly explain how regulation against vertical integration raises the barrier to competition? I can't come up with any explanation where it doesn't lower the barrier.
      - naveen99 3y ago
        Vertical integration is a value add. By restricting it, you make it harder for challengers who want to start with vertical integration. Example: vertical integration restrictions prohibit car manufacturers from operating dealerships. Tesla used vertical integration in other states to lower costs and create a cheaper electric car business. With tighter rules against vertical integration you may not have tesla.
        Timon3 3y ago
        If the goal of regulation is to prevent vertical integration, it is not really helpful to say "oh, but doing this will prevent vertical integration!". Yes, of course it will, that's what we said it should do. You might think this is a bad idea, but it's not a downside of the regulation.
        naveen99 3y ago
        Vertical integration isn’t an end goal of businesses or regulation. it’s also hard to even define.

nostromo 3y ago

Block more mergers. It’s easier than breaking companies up afterwards.

drbaba 3y ago

Maybe progressive taxation of companies, where they pay more tax the larger they become?

anshumankmr 3y ago
If their revenue would increase, would they not be taxed more?
- Rygian 3y ago
  The amount taxed is not relevant. It's the tax rate that would grow higher.
- patmorgan23 3y ago
  Revenue is not taxed, only profit (revenue-expenses) is.
rocqua 3y ago
Might be to much nuance in dealing with the obvious tax-dodge of a company splitting up into a conglomerate of subsidiaries. But I do very much like the idea.
zeroonetwothree 3y ago
Corporate income taxes are already terrible for health and create awful incentives. Ultimately corporate profits go to individuals so we should only tax them at that point. (Or have just a consumption tax, which kind of solves all these problems)

hayst4ck 3y ago

After citizens united the feedback loop of corruption became too strong. Company pays for candidates advertisements so they can win primary -> can only vote on candidates that companies voted for first -> politicians are responsive to their benefactors -> politicians de-regulate/ignore mergers/grid lock themselves -> companies are able to centralize more power -> company increases their influence over the government to get even more influence... This un-virtuous cycle means the only way out is unions (or french-ery). We have openly corrupt supreme court justices who laugh in our face and say "what are you gonna do about it?" Pelosi said "I can trade stock on companies I regulate" and basically said "what are you gonna do about it?" Government intervention can only come after we have an answer for corrupt politicians saying "what are you gonna do about it?" Kroger and Albertsons are gonna merge... "what are you going to do about it?"

baremetal 3y ago
We have no way to hold our leaders accountable. On either side of the aisle.
zeroonetwothree 3y ago
Corporations actually don’t spend that much on advertising. It’s mostly super PACs that benefit from Citizens United. Many of them are funded by wealthy individuals, not corporations.

rocqua 3y ago

Currently the SEC disclosure work scales sub-linearly with size. Because you only need to report on 'material information' and what counts as material is about relative size. Forcing companies to report on any effort above 1 mil might make reporting on big companies so horrible they prefer to split up?

KirillPanov 3y ago

Graduated corporate income tax. It's real simple. Want a lower tax rate? Do a demerger.

ouid 3y ago

[dead]

zeroonetwothree 3y ago

Larger companies breaking up happens all the time too. It’s part of the natural business cycle.

ilyt 3y ago

Tax the fuck out of them. On income, not profits, based on marketshare they own.