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Comment by eru | Hacker News Reader

That's a bit of a weird article: the author seems to argue that monopolies etc are bad, but then makes the mental leap and assumes that just because there's something called 'anti-trust legislation' that it'll help.. The author himself almost grasps the problem:

> [...] Oracle became a company more famous for its legal department than new innovation.

Just like most other regulation 'anti-trust' is just another weapon that those with a big enough legal department can wield against the competition.

We need more competition, not less. Eg we need to allow Wal-Mart to open bank accounts.

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> makes the mental leap and assumes that just because there's something called 'anti-trust legislation' that it'll help

I'm not trying to defend the author.

But there's no "mental leap" here; that's exactly the real-world, observable effect of anti-trust legislation when it is enforced. And what we're seeing now with the FTC is precisely the enforcement, for the first time in decades, of existing anti-trust legislation.

If your point is "legislation isn't enough", you're right, but trivially and uselessly right. Of course the real effect comes from enforcement, just as making murder illegal but then not charging and arresting murderers would, obviously and trivially, not decrease the rate of murder.

> But there's no "mental leap" here; that's exactly the real-world, observable effect of anti-trust legislation when it is enforced.

The problem is that it's selectively enforced, which makes the legislation dubious at best. There are hundreds of monopolies or quasi-monopolies out there that will never be challenged.

That’s an issue with enforcement, not the legislation itself. There’s no way to write legislation that prevents its abuse through selective enforcement. You have to address the abuse itself via strong government accountability.

Not having anti-trust legislation isn’t going to increase competition. Say you need more competition, also isn’t going to increase competition. Real markets naturally tend towards monopolies, only governments putting a thumb-on-the-scales to prevent monopolies keeps competition alive long term. Something the US seems to have forgotten in the past couple of decades.

Observation: there exists a few companies whose market positions are very close to monopolies and where the government isn't doing anything that has actual effect.

I don't think it is an issue with enforcement alone, but with laws that do not sufficiently obligate enforcement. Such laws are not created because politicians are corrupt.

Concluding that regulation dosn't help when what we're observing is non-enforcement is a bit disingenuous. If I'm being charitable.

If you’re talking about the US, then the laws absolutely exist. They were created to break up companies like Bell and Standard Oil, and are extremely effective, when used.

But they haven’t been used for decades, because regulators have decided not to use them. There are of course many reasons for that, including political pressure and regulatory capture. But to say the laws don’t exist, is just wrong. They exist, they just haven’t been used for a long time.

Also writing law to obligate enforcement is tautological. All law is meant to be enforced. Who’s gonna enforce the enforcement of enforcement laws? And why would they not be subject to same pressures to under-enforce as well?

> Concluding that regulation dosn't help when what we're observing is non-enforcement is a bit disingenuous. If I'm being charitable.

Why do think I came to that conclusion? My comment argues quite the opposite.

Breaking up Standard Oil was a farce. It was not a monopoly, and none of the arguments about how monopolies allegedly abuse their market power applied.

See eg https://fee.org/articles/the-myth-that-standard-oil-was-a-pr... or https://www.econlib.org/archives/2013/01/great_moments_i_6.h... or https://www.econlib.org/library/Columns/y2017/Hendersonpreda...

> Furthermore, and also in contradiction to monopoly theory, Standard Oil’s share of the market had declined from close to 90 percent in the late 1800s to about 65 percent at the time of the court’s ruling. These facts, however, did not faze the judiciary. The court ruled that because Standard Oil had consolidated some 30 divisions under one single management structure it counted as a monopoly. In other words, Standard Oil did precisely the opposite of what monopoly theory maintains—it reduced rather than raised prices, it increased rather than cut production, it lost rather than “controlled” market share, and it paid its employees more rather than less than its competitors—yet the theory that Standard Oil engaged in “predatory practices” and “exploited” consumers has prevailed in our history books.

I didn't say the laws do not exist. I pointed out that they obviously do not work. And they obviously do not work because politicians are strongly disincentivized to ensure they work.

> There’s no way to write legislation that prevents its abuse through selective enforcement.

Are you suggesting that all legislation is equally prone to abuse through selective enforcement? That's wrong. Legislation differs a lot in how straightforward it is to enforce universally.

Eg legislation about what people do in the privacy of their own bedrooms is almost impossible to enforce. Legislation about which side of the road cars should drive on almost enforces itself: you don't need the police to write you a ticket to figure out that driving on a different side of the road than everyone else in your country is a bad idea.

> Real markets naturally tend towards monopolies

Would really like to see a credible source for this statement. There are industries where this happens (natural monopolies which is stuff like raw commodities, as competitors cannot mine at the place where you mine) but I don't think this holds in general at all.

> I don't think this holds in general at all.

given that all industries consolidate and end up with 2-3 major players in every field, your assumption does not seem to hold at all.

All industries? Huh? Have you had a look at a few industries recently?

> That’s an issue with enforcement, not the legislation itself.

No because the legislation does not clearly define what a monopoly is, making it easy for politicians to hijack it for any reason they want.

Agree there needs to be more antitrust enforcement across the board. This is a movement that’s growing and takes time. There has been decades of non-existent enforcement and even encouragement of monopolies by the government. It’s past time the government break up some of these behemoths

That's not really a problem. It sounds like a problem, but enforcement has to start somewhere. The FTC is targeting a broad range of markets: https://www.ftc.gov/news-events/news/press-releases

Some of the purpose of antitrust enforcement is to establish a baseline to "warn" other companies. They've only really interfered with a handful of tech acquisitions in the last year, but it sure sounds like everyone doing M&A is being very careful right now.

Sometimes a credible threat of enforcement is enough.

> If your point is "legislation isn't enough", you're right, but trivially and uselessly right.

My point is that 'anti-trust' legislation is at best pointless and at worst counter-productive to actually do anything about 'trusts'.

From what I gather from reading Matt Stoller's newsletter on monopolies, there has been little meaningful enforcement of antitrust for a very long time.

Did you know there's a huge cheerleading monopoly [0]? There is essentially one company that runs the competitions, sells the uniforms, and sells the equipment. A quote from the article:

> The most interesting aspect of this case are not the legal arrangements, but the fear that I found in interviewing people in the cheer world. Virtually every interview I did was under the condition that the person remain anonymous for fear of retribution. Often people would email me saying that I had no idea the depths of the scandals in the sport.

How about monopolies in port-a-potties and MMA? [1]

The alternative seems to be that you do...nothing? And just let them keep consolidating a market? That can't be good.

Antitrust needs enforcement so that we can have competition.

[0]: https://mattstoller.substack.com/p/this-is-not-a-democracy-i... [1]: https://mattstoller.substack.com/p/a-land-of-monopolists-fro...

> We need more competition, not less.

To posit a real world example, when the predator overkills, the ecosystem dies.

To cite just a handful of examples:

https://blogs.scientificamerican.com/extinction-countdown/wo...

https://en.wikipedia.org/wiki/Surplus_killing

Top down pressure on monopolies keeps competition healthy and active. A neverending arms race, which is good for innovation. It prevents lethargy, malinvestment, stagnation, and mere taxation.

> To posit a real world example, when the predator overkills, the ecosystem dies.

Huh? What does a biological predator/prey relationship have to do with economic competition?

Do you have any sources to back up your claim that anti-trust is something that’s most often wielded by big companies against smaller ones?

Because it sounds highly unlikely to me.

The whole point of anti-trust is to provide a check on only the most massive companies that over rent-seek their market and cannibalize competitors, before the startups are able to get off the ground, literally crushing competition.

Anti-trust fosters competition by design.

See https://www.econlib.org/library/Enc/Antitrust.html

One of the most worrisome statistics in antitrust is that for every case brought by government, private plaintiffs bring ten. The majority of cases are filed to hinder, not help, competition. According to Steven Salop, formerly an antitrust official in the Carter administration, and Lawrence J. White, an economist at New York University, most private antitrust actions are filed by members of one of two groups. The most numerous private actions are brought by parties who are in a vertical arrangement with the defendant (e.g., dealers or franchisees) and who therefore are unlikely to have suffered from any truly anticompetitive offense. Usually, such cases are attempts to convert simple contract disputes (compensable by ordinary damages) into triple-damage payoffs under the Clayton Act.

> The second most frequent private case is that brought by competitors. Because competitors are hurt only when a rival is acting procompetitively by increasing its sales and decreasing its price, the desire to hobble the defendant’s efficient practices must motivate at least some antitrust suits by competitors. Thus, case statistics suggest that the anticompetitive costs from “abuse of antitrust,” as New York University economists William Baumol and Janusz Ordover (1985) referred to it, may actually exceed any procompetitive benefits of antitrust laws.

See the linked article for more details.

The purpose of antitrust law and merger review and the FTC in general is to preserve and promote competition. It’s the government’s legal department against FB, Google, Amazon, Microsoft’s legal and lobbying departments

>Eg we need to allow Wal-Mart to open bank accounts

Walmart is allowed to offer bank account in the US. They can even buy an existing small bank and spin it up tomorrow.

See Walmart ain't allowed to offer bank accounts, at least not directly. They'd have to buy an existing bank, and even that is not straightforward.

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