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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.

Regulation against vertical integration should have much less of such an effect.

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.