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The other reason this framing is important is because it frames out opening opposition's concerns about mergers and acquisitions. Why is that? Because these industries are already highly concentrated, so the additional marginal benefit of further economies of scale is relatively limited. Like, genuine question: these a... |
What does this look like in practice? To be clear, I just want to be very clear about this before someone strawmans us: our argument is not that we will break up all big tech companies everywhere in the world and they will all go to smithereens. Our claim, more sensibly, is that there is a higher probability under our ... |
Why is this valuable? Three reasons for closing government. Reason number one: large tech companies constitute an existential threat to democracy. The platform of Facebook literally has more users than the entirety of the Catholic Church, and this is a problem for two reasons. Reason number one: large tech companies ha... |
But secondly, it often happens that these companies control what information people are exposed to. They'll say, "Ah, but there's competition between different social media companies." But there's an oligopoly at play: a small number of social media firms and a small number of platforms. This means that the algorithms ... |
<poi> |
The big tech companies are enormously productive, which we explain is on externalities because better technology grows unpredictably. Things help the environment, like energy technology, through cross-consumption... |
</poi> |
But there's an unproven claim here: why do you need the extra large economy of scale? We'll flip this: there are huge diseconomies of scale. The larger and larger a company is, for example, there are huge communication inefficiencies across the corporation. You are more efficient on our side of the house. Just to be cl... |
Reason number two: we are more likely to get innovation on our side of the house. Why is that? First, you're more likely to get lending to smaller companies when the perception amongst investors is that smaller tech companies now have a viable chance because they will not immediately be killed or sued into the ground b... |
Reason number two: smaller companies are more able to access the crucial resources that are needed for innovation—like data, like power sources and electricity, like rare earth elements—which are currently monopolized by large tech companies. If small tech companies cannot get their hands on the data, they'll never bui... |
</mg> |
<mo> |
Two things in the speech. Firstly, I want to vertically explain why larger Companies are more important economically. Secondly, I want to talk more about why regulation is better on the house and why it’s important to have skill larger companies actually abide by regulation and also follow the social good in the first ... |
I think the reason judges aren't going to care to some extent about economic interests is because oftentimes, in terms of the way the government is going to appoint judges, there is a conflict of interest. The premise of this argument is that the government has an incentive to win the case that they bring to court. Thi... |
We can have incentives in these cases. What is the implication of this? The implication here is that it means that states have incentives to appoint judges with similar ideological interests conceptualizing what the social good is. So when they bring cases to the FTC, the judges that exist are likely to actually approv... |
In response to the government, what are the actual harms of this? The first thing I want to do is explain why economies of scale are actually important for lowering costs. The government just says in a single line that they get economies of scale. This means they have efficiency, which lowers prices. These are just wor... |
So the premise is that capital is a fixed cost. So when companies want to produce, they also have to invest in fixed capital, which takes a substantial amount of money. The difference now is they don’t have to duplicate capital across firms. If you save a significant amount of development costs, we can increase product... |
So Company A has very good and efficient manufacturing capital, but Company B has more efficient resources for innovation in other areas. You can use the best resources from each company to combine them. You can have better capital allocation, and you can actually have a company that is working more efficiently because... |
Secondly, I want to explain why we also get better innovation because again, the government fails to explain why larger companies are actually needed to get more innovation, saying that bigger firms are doing more research because the total money in an industry stays the same. They don’t explain why having it all conso... |
So I think that, firstly, similar to the economy, research has upfront costs where you have to invest in R&D. Most critically, R&D is often incredibly speculative and risky. I can put a lot of money into research and development, but it can all just go to waste if it produces nothing in the end. You have to have a larg... |
Secondly, it’s important for innovation because you get more talent and knowledge sharing across companies. When the most talented workers, innovators, and researchers from two different companies can come together and share knowledge and resources, they can also, for example, share company secrets and engage in indust... |
Thirdly, it’s important for innovation because larger firms can also borrow at lower interest rates because they are often perceived as more stable and less risky to go under because they have more capital to work with. This is important because if you’re perceived as more safe, you can borrow at lower interest rates. ... |
Similarly, for example, bonds are higher; it’s easier to raise money, and yields are lower because you’re perceived as safer as well. Finally, the last economic thing I want to add, which is completely distinct from the opening conference, is that companies also have less incentive to want to expand as a company as wel... |
I think the government also put forth their characterization, and the reason this is because of an incentive to not want to expand as a company is because oftentimes you’re uniquely afraid of, for example, being busted because of all the reasons given about why this is going to be overused. The reason that you risk bei... |
Similarly, expansion carries some risks. When you break into unknown markets, if you fail to adapt to the market, all of your money can go to waste. So this becomes a unique tipping point to not want to undertake the process of trying to expand into other markets and make more profit if you think you’re going to be bro... |
This uniquely harms underdeveloped regions. After this, I think all the need to be expanded to are emerging markets that currently don’t have businesses to neglect, the significant part of the world that currently does not have access to goods and services. Opening |
<poi> |
Companies can grow in the absence of mergers and acquisitions, but M&A as a mode of growth often comes with massive layoffs to thousands of workers, dips in productivity, and the process of aligning business activities can also lead to mergers and acquisitions. |
</poi> |
Because the reason you want to use M&A in the first place is you know have the necessary resources to grow in the market. It’s not what the CG says; we have economies of scale. If you’re like economies of scale, you’re not going to have the same trade-off and regulation. |
So I want to first begin by explaining why scale is actually important by abiding by the social goods. This is because it’s often not profitable to abide by these social goods. For example, having less profit means you have to spend money on lawyers to make sure you’re compliant with regulation in the first place. You ... |
Companies have incentives for regulation, but I also want to respond to government arguments. I think, firstly, citizens themselves have a growing demand in many democratic countries. For example, if they want to, they can protest or boycott companies with bad environmental or social practices. These protests, even if ... |
I think shareholders have many other incentives to care about as well. Often, for example, oil is becoming increasingly volatile, making it more sustainable in the long term. This is also bad for shareholders, even if the company can survive it, as it harms, for example, the profit and the amount of equity or dividends... |
I want to explain finally why this upregulation exists. I think the reason this regulation stops existing in other houses is that voters start to become complacent and trust in being safe is insufficient. This means that we have single-issue voters on the idea of imposing regulations in the first place. |
which me have less broad regulations, which is bad. Regulations apply to all companies. This is a more important impact on this for all these reasons we oppose. |
</mo> |
<gw> |
So this debate is not a debate about whether antitrust is good or bad. As for both the OO and CO case, which is the biggest problem on their case because their met is our standard results in more enforcement, and that's bad. Our exception being this: we explain to you why this doesn't actually apply to the vast majorit... |
This is largely a debate about how we want to regulate and how we want to curb the growth and anti-competitive expansion of large tech companies. That immediately minimizes all of the impacts that both teams want to talk about. More importantly, I don't think it's very fair the way this characterize your exception. Our... |
We give you three independent reasons why we get more innovation on side CG. First, more investments into smaller tech companies that are currently prohibited due to these large companies' dominance. They buy out these smaller companies before they can even grow in the first place. Second, we reduce diseconomies of sca... |
For these companies to make sure the product can even get off the ground in the first place, there is no response detriment from their side. Two questions: first, let's talk about M&A and investments because that seems to be the only thing both sides want to talk about. Obviously, that has spin-off things like innovati... |
Now, the first thing that M&A investment says, whether these large companies are good or bad, there are two ways to actually take out this argument. As long as I prove either one is true, the argument is out. The first is M&As don't actually significantly reduce, or this debate isn't about that, so the impact is minima... |
Method one: the vast majority of mergers outside of all the reasons that has already given why they're not relevant in this round that happen are small-scale mergers. Increasingly, if you read reports from places like The Economist or companies like Bank of America, you realize that most mergers currently engaged right... |
Because why? One, you tend to be able to increase your deal flow more, and two, often they're easier to negotiate within a shorter amount of time. Because often, guess what? Mergers and acquisitions are really negotiation-heavy and costly, because often companies can't agree on the same price. Third, they often require... |
What this means is that it's just empirically untrue that the majority of mergers right now are large. Often, they get so large to the point where you have these concerns in the very first place. This isn't a nice way, and like because OG CL, the M&A goes down. |
Oh, to Pro, our CL is the scale that isn't nearly as large as the either team wants to say. Also, case not applicable, all my friends. But no, no, no, let's take the case of their very best. This is not about whether it actually goes down, but a perception problem. |
So there's the fear from investors of uncertainty, but the large companies that tend to be implicated in anti-competitive mergers—think companies like Walmart, like Google, like Meta—are companies that are probably quite lucrative investments regardless. This is Google already having weights in Gemini. |
This is Microsoft rolling up the Microsoft Go pilot program to increase coding efficiency. These are companies with long track records and relatively high levels of performance. So at best, I think the impact is very, very minimal on their side. |
The second thing, the second way argument is that large companies, especially tech companies, are terrible as our case because, um, all the places, things like economies of scale are good; they're able to have upfront investments, and they can borrow at lower rates. |
So like, OO says these words, CO says it slightly fancier terms. Like, I don't know to what extent you want to credit the two sides; it doesn't really affect our argument. So we don't disagree with the fact that obviously there are some benefits that come from having a larger company. |
Our argument is comparative. This is why we don't care as much about those benefits as the part that actually harms. So even if we believe everything that CO says about how, and also OO about how economies of scale happen, like with terms of upfront capital and fixed capital—which, by the way, isn't a really good expla... |
So clearly, there are some benefits and power, but the importance of this is intensified harms with a group of people versus very diffused and speculative benefits that CG uniquely foresees. |
So yes, 30,000 people in China will die in cancer villages and live out because the Apple factories have dumped toxic chemical waste there for years and decades. So maybe the 1 million iPhone buyers every year can save five bucks each or have a slightly clearer camera. |
The reason why we care about the former group of people who face intensified harms so much is for three reasons. One, there is a greater degree of harm per person. This matters more because it substantially affects their lives more. This is their health and life or death, whereas for the other person, it's inconvenient... |
No, but also, second, those who are often intensely harmed face other disadvantages in their lives, which means it's hard for them to voice out their concerns. So, for example, if you live in a cancer village or if you live in really poor places, you don't have the ability to voice out; you don't have the ability to tr... |
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