4 ms·

What makes this so difficult is that it would be hard to fix even if there was agreement on the problem. If governments were to parcel up markets and stop comp

What makes this so difficult is that it would be hard to fix even if there was agreement on the problem. If governments were to parcel up markets and stop companies from crossing rather arbitrary dividing lines, it would effectively stop all investment in disruptive technologies because any real disruption most likely infringes on some of these laws. If you stop large companies from expanding into neighbouring industries, e.g by bundling new stuff with their existing offering, you stop them from becoming bigger but at the same time you are reducing competition. The risk is that you might end up with smaller companies but even less competition. I'm not ideologically opposed to government intervention. I just don't know how to do it. All discussions on how to break up some tech giant quickly reveal how devilishly complex the problem is. And it's different for each of them and for each industry. What would be a general rule to prevent growing concentration without damaging innovation, ossifying existing market structures and make impossible demands on the political system in terms of keeping all those detailed rules up-to-date and fit for purpose?

pydry 2y ago
>If governments were to parcel up markets and stop companies from crossing rather arbitrary dividing lines There is absolutely no need to do this until you become Microsoft's size and no government has or likely ever will. There was a lot more innovation enabled by the antitrust action against Microsoft in the early 2000s.
- fauigerzigerk 2y ago
  >> If governments were to parcel up markets and stop companies from crossing rather arbitrary dividing lines >There is absolutely no need to do this until you become Microsoft's size and no government has or will. I'm not so sure. Debates about how to break up the tech giants often revolve around which particular activities shouldn't be under the same roof because there is an intrinsic conflict of interest. For instance, some of the accusations against Amazon appear to be pointing to a potential solution where Amazon would no longer be allowed to compete with Amazon Marketplace traders or with publishers. Not sure if Lina Khan has anything like this in mind or not. We also had many debates about whether media companies should be allowed to be internet access providers or operate internet backbones. Net neutrality is supposed to stop any misuse of power, but net neutrality itself is under constant fire from deregulators. The thing is, it doesn't make much sense to break up a specific company because doing both A and B causes a conflict of interest but then let other companies do A and B. That's why in my view any such breakup implies a need for defining boundaries between markets that cannot be crossed.
  - ClumsyPilot 2y ago
    > boundaries between markets that cannot be crossed. This only applies to dominant companies/ monopolies. But there is merit to the idea - like should investment banks be allowed to profit from taking a position against the position of their customer, even if that was done on their advise?
  - Wytwwww 2y ago
    > defining boundaries between markets that cannot be crossed So basically entrenched companies in specific markets would be extremely hard to challenge unless you have very large amounts of capital just laying around doing nothing? Even start-ups would struggle a lot more to get funding because no established company outside of that specific market would be allowed to purchase them. I'm not sure overall that would benefit consumers that much (IMHO the complete opposite but it's debatable). Of course it depends on how the boundaries are defined, but just in tech: Apple (being a computer company) would have never been allowed to develop the iPod/Phone/Pad without spinning them off into independent companies? Google (being an OS provider) wouldn't have been able to sell Pixel phones themselves, but that wouldn't be an issue since Android probably wouldn't have been a thing in the first place. So we'd be permanently stuck with Symbian and Nokia/Sony Ericsson/Blackberry/etc. Same applies to MS, which is a great counterexample, despite all their resources and power they completely failed to leverage that in the mobile market. Then you have Intel vs ARM, Google and social media, even Kodak to an extent. Having a lot of money, resources and great engineering is not necessarily such a huge competitive advantage when trying to enter an adjacent market. You must also be capable of developing competitive/innovative products while not being afraid to cannibalize your current revenue streams. Especially if we're talking about major public companies. Pouring billions into some (potential) boondoggle without any immediate return is hard to pull off without generating a severe backlash from your investors. Having a seemingly "perfectly" competitive market (i.e. margins are close to the "risk-free" rate of return) doesn't necessarily lead to a lot of innovation because companies in such markets can't afford to make risky investments and tend to just focus on maximizing efficiency of current technologies. e.g. yes Google being able to fund Waymo with their Search/Ad revenue/etc. is not exactly fair to their potential competitors but IMHO preventing that would have significantly slowed down any real progress in the field.
joshjje 2y ago
Yeah I don't know how you would break up Microsoft Office or regulate that. There are competitors but it's so pervasive, most companies use it. You'd have to create a public API that other competitors could use, and the HR lady is going to be pissed!

pydry 2y ago

>If governments were to parcel up markets and stop companies from crossing rather arbitrary dividing lines There is absolutely no need to do this until you become Microsoft's size and no government has or likely ever will. There was a lot more innovation enabled by the antitrust action against Microsoft in the early 2000s.

fauigerzigerk 2y ago
>> If governments were to parcel up markets and stop companies from crossing rather arbitrary dividing lines >There is absolutely no need to do this until you become Microsoft's size and no government has or will. I'm not so sure. Debates about how to break up the tech giants often revolve around which particular activities shouldn't be under the same roof because there is an intrinsic conflict of interest. For instance, some of the accusations against Amazon appear to be pointing to a potential solution where Amazon would no longer be allowed to compete with Amazon Marketplace traders or with publishers. Not sure if Lina Khan has anything like this in mind or not. We also had many debates about whether media companies should be allowed to be internet access providers or operate internet backbones. Net neutrality is supposed to stop any misuse of power, but net neutrality itself is under constant fire from deregulators. The thing is, it doesn't make much sense to break up a specific company because doing both A and B causes a conflict of interest but then let other companies do A and B. That's why in my view any such breakup implies a need for defining boundaries between markets that cannot be crossed.
- ClumsyPilot 2y ago
  > boundaries between markets that cannot be crossed. This only applies to dominant companies/ monopolies. But there is merit to the idea - like should investment banks be allowed to profit from taking a position against the position of their customer, even if that was done on their advise?
- Wytwwww 2y ago
  > defining boundaries between markets that cannot be crossed So basically entrenched companies in specific markets would be extremely hard to challenge unless you have very large amounts of capital just laying around doing nothing? Even start-ups would struggle a lot more to get funding because no established company outside of that specific market would be allowed to purchase them. I'm not sure overall that would benefit consumers that much (IMHO the complete opposite but it's debatable). Of course it depends on how the boundaries are defined, but just in tech: Apple (being a computer company) would have never been allowed to develop the iPod/Phone/Pad without spinning them off into independent companies? Google (being an OS provider) wouldn't have been able to sell Pixel phones themselves, but that wouldn't be an issue since Android probably wouldn't have been a thing in the first place. So we'd be permanently stuck with Symbian and Nokia/Sony Ericsson/Blackberry/etc. Same applies to MS, which is a great counterexample, despite all their resources and power they completely failed to leverage that in the mobile market. Then you have Intel vs ARM, Google and social media, even Kodak to an extent. Having a lot of money, resources and great engineering is not necessarily such a huge competitive advantage when trying to enter an adjacent market. You must also be capable of developing competitive/innovative products while not being afraid to cannibalize your current revenue streams. Especially if we're talking about major public companies. Pouring billions into some (potential) boondoggle without any immediate return is hard to pull off without generating a severe backlash from your investors. Having a seemingly "perfectly" competitive market (i.e. margins are close to the "risk-free" rate of return) doesn't necessarily lead to a lot of innovation because companies in such markets can't afford to make risky investments and tend to just focus on maximizing efficiency of current technologies. e.g. yes Google being able to fund Waymo with their Search/Ad revenue/etc. is not exactly fair to their potential competitors but IMHO preventing that would have significantly slowed down any real progress in the field.

joshjje 2y ago

Yeah I don't know how you would break up Microsoft Office or regulate that. There are competitors but it's so pervasive, most companies use it. You'd have to create a public API that other competitors could use, and the HR lady is going to be pissed!