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A Braindead Alternative To Current Competition Policy

Thanks for all the fish, obviously

Given that this is from the Counterbalance we know it’s going to be remarkably stupid but here’s someone trying to convince us on what European antitrust policy should be:

When firms are super-big, I would start from the structural presumption that ‘I don’t want you, the companies, to merge.’ I block it. But then I pass you the ball. Because the authorities don’t have the information: the merging parties do. So I say – and this is the reversal of the burden of proof, which is rebuttable – ‘can you prove that this merger is the only way to bring these benefits?’

I would say “You, Google, the most almighty firm in the world, why do you need to purchase Fitbit to achieve these benefits? Can’t you do it yourself, with all the smart guys you have? And leave Fitbit on its own, or available for purchase by someone without your market power, as this will increase competition? Prove that you really cannot do it without buying Fitbit. It is beyond my comprehension. Show me.”

The answer to this is that this is someone else’s property. The definition of property being that you may dispose of it as you wish. Banning Fitbit from selling to Google is a diminution of the property rights of the owners of Fitbit over Fitbit.

OK, I agree, there are times when property rights are justly violated. Wars, emergencies, we can all think up exceptions as to when this might be justifiable. But that a bureaucrat doesn’t understand – “beyond my comprehension” – isn’t one of those justifiable exemptions.

That a bureaucrat can show that this is a bad idea for consumers might well be just such a justification. But the dimness of the bureaucrat is not.

The underlying point here is that the bureaucrat is infested with that European – Napoleonic – idea that he should be the planner of society rather than just the arbiter in conflicts.

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The Mole
The Mole
21 days ago

The request is even worse than you say.
Rather than allowing the big companies to reward entrepreneurs and start-ups by buying them out (at generally inflated prices) they are instead insisting the companies should use their market power to develop a competing product and drive the original firm out of business.

Google afterall aren’t buying Fitbit for their technology – they can easily reproduce that, it is mostly just the convenience of having an established brand and customer base, plus maybe a bit of intellectual property.

Spike
Spike
21 days ago
Reply to  The Mole

Yes, getting at the mailing list is the driver for many mergers. That’s always annoyed me, as many customers do business with the company to be acquired because they don’t like the acquirer.

They also see the companies’ overhead functions as duplicative and hope to achieve instant profit by combining them and laying off people.

TD
TD
21 days ago

Back in the dot.com era of the late ‘90s many firms went public despite having little revenue and generating dramatic losses. After the bubble burst new laws made it more difficult for a firm to go public. That naturally meant that selling out to a larger firm could become the best option.

I don’t think you’ll find many on the left who care about property rights, save perhaps their own.

You have to wonder how long this present alignment between tech companies and left wing parties will last.

Michael van der Riet
Michael van der Riet
20 days ago

Right so you walk into the chemist and you say to the bloke, “I want to buy a condom.”

He says, “I don’t want you and your amour to make love. Can you prove that lovemaking is the only way to bring about the benefits you claim? Prove that you really cannot do it without buying a condom. It is beyond my comprehension.”

With the punchline, “Show me.”

Charles
Charles
19 days ago

It’s also possible that there are multiple different ways to achieve something, so it’s impossible to prove that any one is essential, but one of them is. So a threshold of having to prove that this particular action is necessary is stupid on those grounds alone.

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