Earlier quoted context omitted.
Suppose that you have an opportunity to play a game. The game is you roll a fair normal six sided die. If it comes up a 6, you get $60B. If it comes up a 5 or 4 you get $30B. If it comes up 3 or less, you get $0. This is clearly a valuable game! It is worth in expectation $20B. But it also has a 50% chance of being worthless to you. Someone offers to buy it from you for $20B. You agree, giving up some upside for some…
You raise a valid point about ex ante uncertainty. We can't know future outcomes with certainty, and yes, Figma theoretically could have failed. But antitrust analysis isn't about predicting exact valuations. It's about market structure and competitive dynamics. The FTC had observable facts: Adobe's dominant market share, Figma's rapid growth trajectory, and a purchase price of 50x revenue (extraordinary even for sof…
Lina Khan points to Figma IPO as vindication of M&A scrutiny
441–450 of 451 posts
Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#442Earlier quoted context omitted.
I'm saying that what google did is effectively an acquisition except it broke the equity and it avoided regulation. You keep making examples that are less clear-cut, but whatever I agree there are things a company can do that aren't effectively acquisitions. I'm not saying how to write the rule, I'm just saying google is on the wrong side. > You are specifically saying that a company shouldn’t be allowed to license I…
The FTC caused this issue with over regulation and by creating an environment of fear that every acquisition is going to be scrutinized. Google had no fiduciary duty to do what’s in the best interest of WindSurf’s investors. Google had every right to give the WindSurf employees offers to leave. The employees had every right to accept the offers. There is no world where the government should have been involved in that…
Ridiculous. They intervene so rarely, even at the peak.
> Which part should have been illegal?
Not my problem to solve. Ever heard of "structuring" though? It's not unsolvable.
> There is no law that you can come up with that doesn’t make it worse for both the employees and Windsurf.
If doing an actual acquisition would have been allowed, that would have been better for them.
If it wouldn't have been allowed, then yes the hypothetical law is worse for them but it's an acceptable loss. Sorry you can't use a workaround to get the benefit of an illegal deal.
Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#443Earlier quoted context omitted.
The FTC caused this issue with over regulation and by creating an environment of fear that every acquisition is going to be scrutinized. Google had no fiduciary duty to do what’s in the best interest of WindSurf’s investors. Google had every right to give the WindSurf employees offers to leave. The employees had every right to accept the offers. There is no world where the government should have been involved in that…
> The FTC caused this issue with over regulation and by creating an environment of fear that every acquisition is going to be scrutinized. Ridiculous. They intervene so rarely, even at the peak. > Which part should have been illegal? Not my problem to solve. Ever heard of "structuring" though? It's not unsolvable. > There is no law that you can come up with that doesn’t make it worse for both the employees and Windsu…
1. Google to hire the employees and force the employees to stay at the company and how?
2. Google to be able to hire the employees and then Windsurf not be allowed to license their IP to a company who is willing to give them a bunch of money?
The reason that this shit show happened in the first place is because overzealous lawmakers and regulators put policies in place without thinking through the consequences.
What exact policies and guidelines should they put in place?
Or in Figma/Adobe’s case. What if Adobe just said, Forget it, we will pay all of the developers we want a shit ton of money (less than $20 billion) to rebuild the entire application from scratch and leave the auxiliary staff behind. Would you also outlaw that?
In the current political environment, the best way to get FTC to approve a merger is to bribe the President (see Paramount). The way to make sure it doesn’t get approved is to do something the President doesn’t like. Do you really want to give this government mire power?
Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#444Earlier quoted context omitted.
> The FTC caused this issue with over regulation and by creating an environment of fear that every acquisition is going to be scrutinized. Ridiculous. They intervene so rarely, even at the peak. > Which part should have been illegal? Not my problem to solve. Ever heard of "structuring" though? It's not unsolvable. > There is no law that you can come up with that doesn’t make it worse for both the employees and Windsu…
You still didn’t answer the question. Do you want to make it illegal for: 1. Google to hire the employees and force the employees to stay at the company and how? 2. Google to be able to hire the employees and then Windsurf not be allowed to license their IP to a company who is willing to give them a bunch of money? The reason that this shit show happened in the first place is because overzealous lawmakers and regulat…
Perhaps telling Google they can do one or the other but not both. Or not both unless they want to treat it like an acquisition.
Again I'm taking it as a given that it's fine to restrict company actions. If you dislike that entire concept then take it up with the people that put FTC in charge of acquisitions, not me. Not every willing transaction should be legal.
> The reason that this shit show happened in the first place is because overzealous lawmakers and regulators put policies in place without thinking through the consequences.
Only if they allow this to succeed. If they slap it down then no company will attempt it again. They'll just file for acquisition.
> What exact policies and guidelines should they put in place?
I refuse. You're asking an unreasonable amount of detail from me.
> Figma/Adobe’s case
If they want to make individual job offers and not try to negotiate group things or talk to figma at all then they can go ahead and try.
I'd be surprised if they didn't already do that.
> In the current political environment, the best way to get FTC to approve a merger is to bribe the President (see Paramount). The way to make sure it doesn’t get approved is to do something the President doesn’t like. Do you really want to give this government mire power?
Even with the risk of corruption I prefer regulating acquisitions to allowing everything.
Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#445Earlier quoted context omitted.
> We have a problem where regulators are bad at their jobs most of the time, and then people develop the heuristic that all regulation is bad. No, we have a problem where 95% of regulations work so well that no one even remembers that they exist (child labor, etc). A media environment that reports on outliers for clicks and corporations that want to dump industrial waste in rivers.
> No, we have a problem where 95% of regulations work so well that no one even remembers that they exist (child labor, etc). This is quite false. There are a few regulations that have a high cost/benefit ratio (e.g. ban leaded gasoline), and a few that are completely upside down (e.g. DMCA 1201), and then there are the vast majority which are the regulatory bureaucrat equivalent of busy work and are neutral at best.…
I think you mean to say that it had a very low cost/benefit. Otherwise, citation seriously needed.
Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#446Earlier quoted context omitted.
> No, we have a problem where 95% of regulations work so well that no one even remembers that they exist (child labor, etc). This is quite false. There are a few regulations that have a high cost/benefit ratio (e.g. ban leaded gasoline), and a few that are completely upside down (e.g. DMCA 1201), and then there are the vast majority which are the regulatory bureaucrat equivalent of busy work and are neutral at best.…
> There are a few regulations that have a high cost/benefit ratio (e.g. ban leaded gasoline), I think you mean to say that it had a very low cost/benefit. Otherwise, citation seriously needed.
Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#447Earlier quoted context omitted.
So in what world are startups going to have the funding or the infrastructure to have warehouses worldwide to compete with Amazon or servers to compete with AWS? Or in Google’s case the infrastructure to design custom processors with the demand to actually buy enough slots from TSMC to make it affordable? You can’t make laws to undue scale efficiencies. A startup isn’t going to make a phone in their garage to compete…
> So in what world are startups going to have the funding or the infrastructure to have warehouses worldwide to compete with Amazon or servers to compete with AWS? In a competitive market you don't have that. Instead of a massive conglomerate having a warehouse in every region, Alice, Bob and Carol each have a warehouse near New York, Dan, Erin and Frank have one near Houston, etc., and then a dozen independent aggre…
If I want a regionally redundant infrastructure do I now have to negotiate with multiple companies in a region (multi AZ) and multiple regions? Do I have to negotiate with thousands of Points of preference for my CDN?
Do all of these companies who want their own TPUs have to negotiate with TSMC?
Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#448Earlier quoted context omitted.
> So in what world are startups going to have the funding or the infrastructure to have warehouses worldwide to compete with Amazon or servers to compete with AWS? In a competitive market you don't have that. Instead of a massive conglomerate having a warehouse in every region, Alice, Bob and Carol each have a warehouse near New York, Dan, Erin and Frank have one near Houston, etc., and then a dozen independent aggre…
Everything you suggested gives customers a worse user experience - see Android vs iOS and Windows vs Macs - and higher prices because each component in the chain needs to make a profit and slower product cycles than when one company can offer an integrated experience. If I want a regionally redundant infrastructure do I now have to negotiate with multiple companies in a region (multi AZ) and multiple regions? Do I ha…
None of that is true and the impression only comes about because concentrated markets create a small sample size and Microsoft and Google in particular care less about user experience than Apple.
Putting aside things like third party support (which come from incumbency and scale rather than design choices), which desktop operating system has the best user experience: Windows, macOS, or Linux? It's Linux by a hair, then macOS, with Windows a mile behind either of them. Which doesn't make any sense if vertical integration is a huge advantage, but makes perfect sense if specifically Microsoft sucks and being insulated from real competition allows them to.
"Each company has to make a margin" doesn't increase costs whatsoever because each company only gets the margin on the part they're doing. If the RAM has a net production cost of $20 and the flash is $25 and they're both made by the same company with a 10% margin then the total cost is $45 + 10%. If they're made by two different companies then one costs $20 + 10%, the other costs $25 + 10% and the total is still $45 + 10%.
And the same is true for steps that happen in series rather than in parallel, because margins aren't a fixed percentage, they're the amount you can get away with before the customer goes to a competitor, which in a competitive market is related to the cost of production + cost of capital. Having a combined retailer and wholesaler means the combined entity then has combined costs -- the "retailer" has to negotiate with manufacturers and the "wholesaler" has to operate retail stores, and therefore needs both margins to operate.
Meanwhile market consolidation is the thing that actually increases prices, because the lack of competition is what allows the supplier to increase their margins without losing business to competitors.
> If I want a regionally redundant infrastructure do I now have to negotiate with multiple companies in a region (multi AZ) and multiple regions? Do I have to negotiate with thousands of Points of preference for my CDN?
If you want a cart full of groceries, do you have to negotiate with hundreds of orange groves and chicken farms? No, supermarkets do that and then you go to any of the numerous supermarkets to get your groceries. That doesn't require the supermarkets to own the orange groves or chicken farms.
> Do all of these companies who want their own TPUs have to negotiate with TSMC?
Do all of the companies that want their own GPUs have to negotiate with TSMC? No, AMD/nVidia/Broadcom/NeoMagic/Qualcomm/etc. negotiates with TSMC/Samsung/GlobalFoundries/Intel/etc. and then you buy a GPU from a GPU company instead of the GPU/TPU customer needing to design their own GPU/TPU.
Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#449Earlier quoted context omitted.
Everything you suggested gives customers a worse user experience - see Android vs iOS and Windows vs Macs - and higher prices because each component in the chain needs to make a profit and slower product cycles than when one company can offer an integrated experience. If I want a regionally redundant infrastructure do I now have to negotiate with multiple companies in a region (multi AZ) and multiple regions? Do I ha…
> Everything you suggested gives customers a worse user experience - see Android vs iOS and Windows vs Macs - and higher prices because each component in the chain needs to make a profit and slower product cycles than when one company can offer an integrated experience. None of that is true and the impression only comes about because concentrated markets create a small sample size and Microsoft and Google in particul…
Let’s look at the set top box market and integrated smart TV OS. There is Roku, Amazon, Samsung and LG off the top of my head. All of them suck compared to the AppleTV and use cheaper hardware.
Android OEMs have been customizing Android for years and they are all worse than either Apple or even stock Android.
In the PC market which was commoditized like you want, have you seen the crap the OEMs do to their computers when left to their own devices?
> Putting aside things like third party support..
“Other than that, how was the play Mrs. Lincoln?”
> It's Linux by a hair, then macOS, with Windows a mile behind either of them.
Did I somehow miss “the year of Linux on the desktop”?
User experience means for me - long battery life, runs cool, app availability, integrates well with my other devices, runs quietly.
> doesn't increase costs whatsoever because each company only gets the margin on the part they're doing. If the RAM has a net production cost of $20 and the flash is $25 and they're both made by the same company with a 10% margin then the total cost is $45 + 10%. If they're made by two different companies then one costs $20 + 10%, the other costs $25 + 10% and the total is still $45 + 10%.
That makes absolutely no sense mathematically.
> If you want a cart full of groceries, do you have to negotiate with hundreds of orange groves and chicken farms? No, supermarkets do that and then you go to any of the numerous supermarkets to get your groceries. That doesn't require the supermarkets to own the orange groves or chicken farms.
So you suggest I go through a middle man with their own markup?
Right now, I can with one text file of yaml or one CDK app create a globally redundant infrastructure with databases, VMs, queues, load balancers, a CDN, network infrastructure a cloud hosted call center (one of my specialties), storage (S3) and access 6-7 LLM’s all running on one set of infrastructure along with fast interconnects owned by one company.
And when I have a problem, I talk to one organization. Are you suggesting I should go through a third party now to do all of that? What do I gain?
> Do all of the companies that want their own GPUs have to negotiate with TSMC? No, AMD/nVidia/Broadcom/NeoMagic/Qualcomm/etc. negotiates with TSMC/Samsung/GlobalFoundries/Intel/etc. and then you buy a GPU from a GPU company instead of the GPU/TPU customer needing to design their own GPU/TPU.
And out of all those companies, who have top of the line mobile chips or desktop chips that are designed in conjunction with their hardware and have a good experience?
If you like commoditized phones and computers where dozens of manufacturers can choose what to pick up off the shelf, you are welcomed to buy a PC or Android device. Apple is in no shape form or fashion a monopoly in the mobile space or desktop space.
AWS is not a monopoly in cloud computing and devoutly doesn’t stop someone from using a Colo.
None of these big tech companies are hard to avoid.
It is fairly easy with around a quarter million of capital to start your own phone hardware business, fly to China and negotiate with ODMs (not a typo) and they will customize a run for you where you choose from one of their “platforms” and run your own version of AOSP.
Re: Lina Khan points to Figma IPO as vindication of M&A scrutiny
#450Earlier quoted context omitted.
> Everything you suggested gives customers a worse user experience - see Android vs iOS and Windows vs Macs - and higher prices because each component in the chain needs to make a profit and slower product cycles than when one company can offer an integrated experience. None of that is true and the impression only comes about because concentrated markets create a small sample size and Microsoft and Google in particul…
> None of that is true and the impression only comes about because concentrated markets create a small sample size and Microsoft and Google in particular care less about user experience than Apple. Let’s look at the set top box market and integrated smart TV OS. There is Roku, Amazon, Samsung and LG off the top of my head. All of them suck compared to the AppleTV and use cheaper hardware. Android OEMs have been custo…
> Android OEMs have been customizing Android for years and they are all worse than either Apple or even stock Android
The thing you're objecting to here is the anti-competitive behavior. If the software it comes with is worse than stock Android then people should be replacing it with stock Android, or a community Android fork which is even better. Except that they're prevented from doing this by the OEM or Google, which is the anti-competitive thing that should be prohibited.
And isn't the hardware being cheaper the advantage? They're all fully capable of playing the video, so why would you want the device to cost more than necessary to perform its function?
> In the PC market which was commoditized like you want, have you seen the crap the OEMs do to their computers when left to their own devices?
The PC market has both OEMs that install crapware and those that don't. But they get paid to install crapware, which allows them to charge slightly less, and then because it's not a locked platform, you can remove it. Which means it can be to your advantage to take the discount and then remove the crapware rather than paying more, which makes that option popular. The option to pay slightly more for one that comes without it is also available.
That's the benefit of competition. You get to choose what you want.
> “Other than that, how was the play Mrs. Lincoln?”
Third party support comes from market share, which yields a massive incumbency advantage. The #1 and #2 desktop operating systems are both from companies founded in the 1970s.
Meanwhile Linux desktop market share is up to 5% this month, +40% YoY: https://www.reddit.com/r/linux/comments/1lpepvq/linux_breaks...
And unlike the long-term trend of that coming at the expense of Windows, this year it came at the expense of Apple.
Because the user experience is actually good and the market share is getting high enough that the third party support is getting better.
> User experience means for me - long battery life, runs cool, app availability, integrates well with my other devices, runs quietly.
Battery life, runs cool and runs quietly are all related hardware design trade offs. To make that happen you either need a low-power processor (low-performance or you need the latest fabrication process to get high performance at low power which is high-cost), or you need a big battery and heatsink to make a high-power processor quiet with long battery life, which adds weight.
None of that has anything to do with vertical integration. Apple is taking the trade-off in favor of high cost, but a competitive market gives you every one of those options and lets you choose. It also has Apple Silicon as a separate company whose chips are available in any device that wants to pay for them.
And "integrates well with my other devices" is the thing where you want open standards. Nobody has any trouble with Safari or Chrome "integrating" with nginx or apache even though they're made by independent entities. The problem only comes when some unrepentant oligopoly is trying to lock you into a specific ecosystem while you're trying to use devices from a different one, which is the thing that ought to get them in hot water.
> That makes absolutely no sense mathematically.
Are you actually disputing that ($20 x 1.10) + ($25 x 1.10) is the same total as ($20 + $25) x 1.10?
> So you suggest I go through a middle man with their own markup?
I feel like you're misunderstanding how markups work in a competitive market.
If a company is doing nothing of value and yet has no monopoly on anything, nobody patronizes them.
An aggregator is doing something of value. It's doing something that a vertically-integrated monopoly would be doing internally, but doing it as a separate entity. If that thing is made reasonably easy to do then lots of competitors offer aggregation services which keeps their margins thin because the customer will choose the one offering a reasonable level of service at the most competitive price.
Which makes the margin they can add less than the one the monopolist would, because unlike the monopolist, the company operating in a more competitive market can easily lose your business to a competitor if they try to charge more.
> And when I have a problem, I talk to one organization.
If you don't like the oranges you got from the supermarket then you talk to the supermarket rather than the orange grove. That still doesn't require them to be the same entity.
> Are you suggesting I should go through a third party now to do all of that? What do I gain?
You get a more competitive market and in turn more options and lower prices. If Google Cloud has TPUs and Amazon S3 has cheaper object storage then the aggregator offers you both from a single source and prevents you from getting locked into a single cloud. Meanwhile the aggregator itself has competitors which require them to keep their own margins thin.
> And out of all those companies, who have top of the line mobile chips or desktop chips that are designed in conjunction with their hardware and have a good experience?
The state of the market is poor because they're allowed to keep buying each other. New chip companies are formed that start to offer the things customers want and then Qualcomm or Broadcom buys them up. Apple is allowed to buy out all of TSMC's leading-edge fab capacity.
> If you like commoditized phones and computers where dozens of manufacturers can choose what to pick up off the shelf, you are welcomed to buy a PC or Android device.
Android isn't a real competitive market. It's captured by Google and has limited competition on the hardware side. In particular, the ability to run stock Android with a vanilla Linux kernel on a competitive phone is quite lacking.
> AWS is not a monopoly in cloud computing and devoutly doesn’t stop someone from using a Colo.
AWS is not a monopoly, but who was claiming that they were to begin with? They do some unsatisfying things to lock you into their platform if you make use of them, but computing infrastructure is a fairly competitive market in general.
It's iOS and Android that are the trouble.
> None of these big tech companies are hard to avoid.
What practical phone can I use that avoids both Google and Apple?
Even less than that, show me even a mid-range Android phone that can run the vanilla Linux kernel with in-tree drivers.