Anti-trust: Bust ’em up, or?

Clearly Google, Amazon, Facebook, Apple and a few others are too big, too market expansive, too monopolistic. Apple less so, but the argument would still hold for them.

Those first three are market behemoths with the power and capital to quash any competition — primarily through acquisition. Don’t like that company competing with your searches, online shopping or online ad market? Buy them up.

That’s how monopolies become monopolies. Price fixing (like Apple and Uber) or price gouging, (like Amazon and Microsoft) which drives out competition (or shrinks the competition down so that they become easy acquisition targets), are all tactics to build monopolies.

The Big Three will get disassembled here in the next few years, no doubt about it. The DOJ, once the IBI* in Chief is out of the picture, will get back on track working for the U.S. Citizens.

But what about eliminating the problem created by such companies in the first place?

The below linked Senate Bill tries to do just that. But I wonder if there’s a simple rule that could be put in place that would kill the M&A practice like the evil corporate consolidation game that it is.

What if we use the market capitalization of any company as a filter to determine which companies can buy other companies?

Surely a $Trillion dollar company like Apple has so much cash they could buy nearly any other company they coveted. Apple Buys Uber and then becomes a massive captive distributed transportation monster. Obviously, we’d want to stop that.

So, at what size does a company become too big to allow it to swallow up competition (or expand sideways like Amazon’s purchase of Whole Foods)?

Here’s a simple concept to limit monopolies:
A company that sits at the 90th percentile or higher of market capitalization as ranked on the S&P500 — is banned from ANY and ALL acquisitions.

Right now that would take the top 50 companies out of the possibility of buying other companies. Right now that’s a market cap of about $100B. As this is a percentage, it wouldn’t matter how big or small the actual market cap would be. A simple rule that would severely limit monopoly creation (It might be that the 80th percentile would be better, but you get the point.)

Here’s that senate bill:
https://www.congress.gov/bill/115th-congress/senate-bill/1812/text?r=22

And here’s the list of FINDINGS that were listed in that bill:

(1) competitive markets are critical to ensuring opportunity for all people in the United States;

(2) when companies compete, businesses offer the highest quality and choice of goods for the lowest possible prices to consumers and other businesses;

(3) competition fosters small business growth, reduces economic inequality, and spurs innovation;

(4) concentration that leads to market power and anticompetitive conduct makes it more difficult for people in the United States to start their own businesses, depresses wages, and increases economic inequality;

(5) undue market concentration also contributes to the consolidation of political power, undermining the health of democracy in the United States;

(6) the anticompetitive effects of market power created by concentration include higher prices, lower quality, significantly less choice, reduced innovation, foreclosure of competitors, increased entry barriers, and monopsony power;

(7) monopsony power— (monopsony means only a single BUYER is available)

(A) allows a firm to force suppliers of goods or services to cut their prices to unreasonably low levels, resulting in reduced business opportunities for suppliers and reduced availability and quality of products and services for consumers; and

(B) can result in workers being forced to accept unreasonably low wages;

(8) horizontal consolidation, vertical consolidation, and conglomerate mergers all have potential to cause anticompetitive harm;

(9) unprecedented consolidation is reducing competition and threatens to place the American dream further out of reach for many consumers in the United States;

(10) since 2008, firms in the United States have engaged in over $10,000,000,000,000 in mergers and acquisitions;

(11) between 2010 and 2015, there was a 50-percent increase in the number of mergers and acquisitions reviewed by the Federal Trade Commission and the Antitrust Division of the Department of Justice;

* Incoherent Bloviating Imbecile

 


10 responses to “Anti-trust: Bust ’em up, or?

  • Phil Huston

    There was an old joke in the early days of commoditization, about how McDonalds and the phone company were going to merge and take over the world. This is the same argument as freedom or safety. The issue is are we willing to give up convenience for true grassroots capitalism? Time for “freedom”? More businesses fold than function, and yet people desperate to escape the cubicle matrix or “live the dream” throw their retirement $ at a franchise. I knew a BofA VP who said “ Bring me anything but another strip center franchise.” $10 smoothies and gourmet tacos and I still had to order a straight drop tub drain shoe from “them” because driving around Dallas for two hours trying to solve a bathroom remodel NOW proved pointless. It pissed me off and wasted my time. I use a Behringer mixer. The last one lasted exactly 10 years. No, it doesn’t have some mythical sonic voodoo, no, it is not expensive. It mixes audio inexpensively without introducing artifacts or “character.” It is a commodity. Like insurance. Want to set through a FAB PowerPoint or presentation, or do want a lower rate? Do you want to play traffic roulette looking for something nobody has in stock or do you want it on your porch in two days? Bust the trusts? Please. Shut down Amazon and bring back malls? It might be good to socialize a generation of screen “friends” but make me go pay more, load up a grill and cart it home or drag it off my porch, with a Ring doorbell to prove it was intact when it arrived? Sure it’s corrupt system. But at what point do we cease to decry the machines we “couldn’t live without?” Stop the ease of drive through, do we stop obesity? Stop the ease of Amazon do we breathe life into the local hardware store with our impatience waiting for “special order.” (Remember that shit?) what we need is the next socioeconomic and cultural paradigm that busts the real shit in the parade, the old school publishing, printing, news delivery, content delivery mechanisms. If we abdicate education for marginal employment by the Amazon matrix, then push cultural activities, life enhancing activities, give people some air while they wait for groceries that are two blocks away but it’s a hassle to put on pants and start the car.

    Liked by 1 person

    • Anony Mole

      It’s the power that must be controlled and curtailed. The business models? They can flourish all they want. But when Amazon gets to control the product, the delivery, the consumer — that needs to get shut down pronto.
      If the distributed delivery/service/creation model could get created where local shops could compete to provide a fix for your broken tub, or your BigMacAttack, or your need for a quality website — that’s what we want. But not the Bezos of the world telling US what we need, want or must have. And right now — that’s what that self-made tyrant is doing. Oh he THINKs he’s providing us options. But the reality is that HE doesn’t know what I want no matter how much data he collects from my phone and browser. Corporate monopolies need to die — because only the distributed people on the ground can possibly deliver what I really need or want.

      Liked by 1 person

      • Phil Huston

        Forget that. Business has been deciding what we “want” before the 20th century dawned. Put the Madison Ave types in there and boom. Sears, or what was sears, and Walmart et al have been telling us what we want for a long time. Here is your selection of vacuum cleaners, you can order and wait for accessories. What’s on the floor is what we “want”. The power to drive consumer desire is nothing new. Focus groups ( back before data mining), BPI, Regionalizing, all the way corn to why the Coke bottle is shaped the way it is. Power and business and the power to drive us is a symbiotic relationship that goes on and on. Makes you wonder what’s up with free WiFi in South Korea and why we pay too much for it. To keep a given economic class in the dark? Or as a control group? Good luck poking a hole in the matrix. Business and power are so entertained as to be codependent.

        Liked by 1 person

  • Mr Nothing

    Hmm, finguck good point.
    Where, when and how should there be intervention?
    I like the idea of ‘citizens need to vote with their dollar.’
    But most don’t I guess.
    I mean look at what happened to IBM for instance. In the end, the market seems to adjust things but you require a lot of patience and time.
    My water tells me not to try and control things too much. Then again if you don’t control stuff chaos ensues. A fine line. You need some wise, white hairs (nearly said white beards) to shape things a little.

    Liked by 1 person

  • Tom Being Tom

    George is right, and so are you. I’ve made the argument that we are either an unfettered, capitalistic Randist nation where the few can have unregulated access to absolute power or we are a nation of people, by the people, and for the people, where the gains enjoyed by success are shared by all. Amazon does not become big and rich without (a) the employees, and (b) the consumer. All of us had a hand in the success of these big businesses; all of us risked something to make them huge. If there is enough money for mergers and acquisitions of the nature you described (a trillion a year, I am counting) that make the very few much more rich and powerful, then there is money aplenty to fund national health care, solid safety nets, living wages (or universal basic incomes), and all manner of societal enrichment. Or, we can decide that folks don’t matter and the individual right of the capitalist is more important than the human right to life, liberty, and the pursuit of happiness.

    What nation are we? What nation were we supposed to be? How do we best merge those two ideas and acquire the nation we all deserve?

    Pass that bill, Senate. Cap the power of the monopoly. Do it for all of us.

    Liked by 1 person

    • Anony Mole

      In past posts I tried to analyze why Europe chose a fettered approach to corporate influence. I deduced that their history with nobles, monarchs, royalty in general gave them insight which allowed, when the new capitalistic nobles came into being, to curtail their power — quickly and successfully.
      The United States only ever had quasi-nobles (white male land owners) who touted commoner ideals thereby granting the concept to all “people” that you too could become like us through hard work and judicious business practices.
      “Do not shackle the people with laws that stymie the incentive to grow, expand and innovate.”
      By the time we figured out that we really should have constrained the offshoots of business personified (corporations), it was too late; they’d already been given citizenship, indemnity, and the power to control the government.

      Liked by 1 person

      • Tom Being Tom

        And even though we’ve figured these things out, ourselves, there is still a base of duped who agree that regulation is stifling to business endeavor, a fact that Europe (and other modern nations) have proven wrong. You make a great point about the history of monarchy and its effects on corporate power. I think you may be right.

        Liked by 1 person

  • George F.

    …on the other hand, it’s almost equivalent to punishing them for their success. Apple started in a garage, and the government was nowhere around to help them out…now they’re successful, the government wants to break them up? Anyway, that’s the argument. Anti-trust laws were used to disband AT&T into smaller “baby” bells, and they ended up successful and merging into monopolies anyway. Something like that.

    Liked by 1 person

    • Anony Mole

      Success at the expense of society? Corporations should serve the people, not the other way around. And yet, that’s the way of it in the U.S.

      Liked by 1 person

      • George F.

        Corporations care about profits. Not the US. Not citizens of any country. They are neither Republican nor Democrat. They donate money to whichever party is in power, or is projected to be in power. Corporations are like a Government running The Government. Citizens need to learn to “vote with their dollar.” Don’t like the politics of Walmart? Don’t shop there. Etc. Ad nauseum.

        Liked by 1 person

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