My experience with mergers and acquisitions is that it's akin to keeping a warm body on life support. When I worked at a company that did a lot of M&A I was sitting around like, "Why couldn't you have just built that?" When I worked at a company that was recently acquired and went through the merger process I was like, "wow I see why you bozos would've never built this yourselves." That isn't to say there aren't companies that do them well or there aren't places where it makes sense in an ultra-competitive landscape but I'm curious - when was the last time anyone really considered tech an ultra competitive landscape?
Post-2015 other than large language models this industry has mostly been riding on intellectual property consolidation. That's basically Lina's point; nobody actually benefits from this - not customers, not share holders, not the American people. The over practice of M&A leaves a small pool of winners who are not the kind of people that post on or read this forum.
bix6 · 1h ago
founders would ultimately benefit from “a world in which you have six or seven or eight potential suitors” rather than “just one or two.”
Real talk Lina
timr · 23m ago
yep. So perhaps don’t block every potential transaction on flimsy pretense? Icing the transaction market seems like a great way to scare off potential competing acquirers in the name of social engineering.
I don’t know. All I know is that Lina is out of power, and suddenly we see an upswing in M&A. Coincidence, I’m sure.
tptacek · 2m ago
I'm not a Khan fan, like, at all, but by the time you're at the point where the FTC is getting involved in your M&A, you've crossed the threshold of success; all the signals to future startups about your path being promising have been sent.
alephnerd · 7m ago
Except the majority of the Figma IPO was captured by banks due to it's severe pop. So while everyone made a lot of money, the overwhelming majority went to the underwriters [0].
The founding team at Figma would have gotten a similar amount much sooner if the acquisition was let thru OR if the underwriters didn't screw them over by underpricing at $33.
Evidence that you can only coast for so long on patents. Eventually you have to get back to work and provide value to customers.
sealeck · 1h ago
That if Amazon acquired it, this would enable it to horizontally integrate and take control of yet another market? This, eventually, woudl lead to lower prices for consumers...
bryant · 52m ago
> This, eventually, woudl lead to lower prices for consumers...
What incentive would Amazon have to drop prices after vertical integration is done?
tomrod · 35m ago
Economies of scope are the common claim.
margalabargala · 31m ago
No, that's what lowers Amazon's costs.
Why would Amazon, having lowered their costs, pass that savings on to the consumer when they could simply profit more?
dgfitz · 28m ago
Are you asking about supply and demand?
x3n0ph3n3 · 20m ago
And yet she allowed Broadcom to purchase and gut VMware.
richwater · 1h ago
Lina Khan's obsession with "big is bad", especially her preexisting prejudice of Big Tech should have disqualified her from any position well before she took the wheel.
How many times did the FTC fail in court under her watch? More than I can count on two hands.
Meanwhile local and state utility and cable tv monopolies continue to _flourish_ without so much as a peep.
sealeck · 1h ago
> especially her preexisting prejudice of Big Tech should have disqualified her from any position well before she took the wheel.
The purpose of the FTC is literally to take regulatory action to prevent unfair competition. Your argument is that you shouldn't appoint a commissioner on the basis that they think large tech companies are engaging in anti-competitive behaviour?? Note that this position isn't playing dictator; the FTC is subject to judicial oversight.
> Meanwhile local and state utility and cable tv monopolies continue to _flourish_ without so much as a peep.
How do we know this isn't just your preexisting prejudice of cable companies? Maybe you've just got an obsession with "big [cable] is bad"? On a serious note – it seems that you _do_ agree with antitrust regulation, just not against Facebook/Amazon for some reason (and only against Comcast)??
bix6 · 1h ago
You expect a perfect success rate against the highest paid lawyers in the world? At least she was trying to enforce antitrust for once.
Big is bad bro. There’s like 5 companies carrying the entire S&P rn how is that good for anyone outside of those 5 companies?
elefanten · 1h ago
Doesn't have to be a perfect success rate... how about just something other than abysmal failure rate?
Asserting a sloganized refrain is not very convincing. Make a real argument. Here are some counterpoints to "big is bad" Neobrandeisianism:
-Scale enables better economics for certain businesses which consumers and other businesses then benefit from.
-Large size allows additional speculative cutting edge R&D funding which the whole world benefits from even if it never pays off.
-Being big on its own is almost never a cheat code to permanent monopoly / monopsony lock-in, especially in the technology business. That comes from actual anti-competitive behavior or regulatory capture (which ARE the parts that should be regulated, rather than targeting or preventing size for its own sake).
The S&P point is more than a bit overstated and it also doesn't really matter? The subset of the S&P that's performing well will naturally get weighted higher over time, until the performance changes. It doesn't really matter if the S&P is driven by 5 enormous companies or 500 equally-sized ones. Whatever works at the moment is what gets rewarded with capital -- that's the point of the system and it's been more effective than any alternatives. Besides, it'd be poor investing practice to be literally all-in on the S&P.
bix6 · 58m ago
Scale enables big companies like Amazon and Walmart to force anti-competitive vendor and pricing agreements that harm small businesses.
Meta is top 10 for DC lobbying. No regulatory capture to see here.
richwater · 1h ago
> Big is bad bro
Using "big" as a synonym for "consumers are worse off than alternatives" does not do anyone justice.
> At least she was trying to enforce antitrust for once.
Her prejudice against big tech and pretty much ignoring any other industries is not something to be proud of.
nicoburns · 1h ago
Big doesn't necessarily mean that consumers will be worse off than small. Just like having a dictator doesn't neccesarily mean that citizens will be worse off then in a democracy. What it does mean in both cases is that if the powerful entity decides to abuse their power for their own gain, it's very difficult (albeit not entirely impossible) to do anything about it. It's therefore better in the long-run to preempt this and bias towards smaller entities that are each less powerful.
lemoncookiechip · 54m ago
- Three major court wins (Illumina, Tapestry/Capri, Kroger/Albertsons), multiple deals dropped.
- Junk-fees ban, click-to-cancel rule (You can thank the current administration for walking back on this), non-compete ban.
-Right to repair, data privacy enforcement, health-care pricing interventions ( reduced out-of-pocket costs for inhalers and insulin).
bix6 · 1h ago
I’m unclear what your first point is saying
FTC under her blocked Kroger/Albertsons, blocked Tapestry/Capri, ended non-competes, enacted click to cancel, made major strides on right to repair, etc. in addition to all the “prejudice against big tech” which are the titans of industry right now…
redserk · 1h ago
Big tech has been ignored for quite some time compared to other industries.
jeffbee · 15m ago
Under Khan, the FTC has abandoned the standard of consumer harm, and now just blocks mergers based on vibes. I really liked this article criticizing her approach:
Her opinion should not be taken seriously on the matter. It's not just the empirically terrible track record she had as a regulator and the baffling cases she brought to bear (imo proof of your point that she had an overgeneralized bias). It's also that she was demonstrably inexperienced at the time she was selected! It was clearly performative political appointment, which the Biden administration was pretty egregious about (and so have both Trump administrations, this is not a political point).
The essay (literally, a homework assignment she did at law school) for which she became famous that criticizes Amazon for being big is so chock full of errors, misconstructions and faulty logic, that it's an indictment of some really poor political habits and instincts that the US is prone to. That due diligence in vetting her as a rigorous and informed thinker on the topic failed is an unequivocal failure.
gruez · 1h ago
>The essay (literally, a homework assignment she did at law school) for which she became famous that criticizes Amazon for being big is so chock full of errors, misconstructions and faulty logic, that it's an indictment of some really poor political habits and instincts that the US is prone to.
She got boosted by an insurgent group of law professors who spearhead whats called the Neobrandeis moment. Their theory is that anti-trust should be preemptively enforced against size for its own sake.
This is the article she wrote for her law review as a law student which put her on their radar and they started calling her a "rising star" etc etc, which snowballed into the performative appointment by the Biden admin.
Feel free to read through it.
estearum · 31m ago
Performative and ineffective but somehow actually deterred a lot of M&A? How does that make sense?
linotype · 20m ago
What errors?
DenverR · 24m ago
Love the FTC getting to decide if you’re permitted to sell your startup or forced to deliver more shareholder value.
breadwinner · 22m ago
If a big company in dominant position is allowed to gobble up any and all upstart competitors that's bad for competition, and it is the FTC's job to preserve competition.
BobAliceInATree · 9m ago
$20 billion sell price is no longer a “startup”
linotype · 23m ago
As an investor that can’t invest in private companies, I love it unsarcastically.
Post-2015 other than large language models this industry has mostly been riding on intellectual property consolidation. That's basically Lina's point; nobody actually benefits from this - not customers, not share holders, not the American people. The over practice of M&A leaves a small pool of winners who are not the kind of people that post on or read this forum.
Real talk Lina
I don’t know. All I know is that Lina is out of power, and suddenly we see an upswing in M&A. Coincidence, I’m sure.
The founding team at Figma would have gotten a similar amount much sooner if the acquisition was let thru OR if the underwriters didn't screw them over by underpricing at $33.
[0] - https://pitchbook.com/news/articles/figma-ipo-pop-spotlight-...
What incentive would Amazon have to drop prices after vertical integration is done?
Why would Amazon, having lowered their costs, pass that savings on to the consumer when they could simply profit more?
How many times did the FTC fail in court under her watch? More than I can count on two hands.
Meanwhile local and state utility and cable tv monopolies continue to _flourish_ without so much as a peep.
The purpose of the FTC is literally to take regulatory action to prevent unfair competition. Your argument is that you shouldn't appoint a commissioner on the basis that they think large tech companies are engaging in anti-competitive behaviour?? Note that this position isn't playing dictator; the FTC is subject to judicial oversight.
> Meanwhile local and state utility and cable tv monopolies continue to _flourish_ without so much as a peep.
How do we know this isn't just your preexisting prejudice of cable companies? Maybe you've just got an obsession with "big [cable] is bad"? On a serious note – it seems that you _do_ agree with antitrust regulation, just not against Facebook/Amazon for some reason (and only against Comcast)??
Big is bad bro. There’s like 5 companies carrying the entire S&P rn how is that good for anyone outside of those 5 companies?
Asserting a sloganized refrain is not very convincing. Make a real argument. Here are some counterpoints to "big is bad" Neobrandeisianism: -Scale enables better economics for certain businesses which consumers and other businesses then benefit from. -Large size allows additional speculative cutting edge R&D funding which the whole world benefits from even if it never pays off. -Being big on its own is almost never a cheat code to permanent monopoly / monopsony lock-in, especially in the technology business. That comes from actual anti-competitive behavior or regulatory capture (which ARE the parts that should be regulated, rather than targeting or preventing size for its own sake).
The S&P point is more than a bit overstated and it also doesn't really matter? The subset of the S&P that's performing well will naturally get weighted higher over time, until the performance changes. It doesn't really matter if the S&P is driven by 5 enormous companies or 500 equally-sized ones. Whatever works at the moment is what gets rewarded with capital -- that's the point of the system and it's been more effective than any alternatives. Besides, it'd be poor investing practice to be literally all-in on the S&P.
Meta is top 10 for DC lobbying. No regulatory capture to see here.
Using "big" as a synonym for "consumers are worse off than alternatives" does not do anyone justice.
> At least she was trying to enforce antitrust for once.
Her prejudice against big tech and pretty much ignoring any other industries is not something to be proud of.
-Over $1.5B refunded. Significant settlements (Epic, MoneyGram, Amazon delivery drivers, etc.)
- Junk-fees ban, click-to-cancel rule (You can thank the current administration for walking back on this), non-compete ban.
-Right to repair, data privacy enforcement, health-care pricing interventions ( reduced out-of-pocket costs for inhalers and insulin).
FTC under her blocked Kroger/Albertsons, blocked Tapestry/Capri, ended non-competes, enacted click to cancel, made major strides on right to repair, etc. in addition to all the “prejudice against big tech” which are the titans of industry right now…
https://insights.som.yale.edu/insights/the-ftcs-antitrust-ov...
The essay (literally, a homework assignment she did at law school) for which she became famous that criticizes Amazon for being big is so chock full of errors, misconstructions and faulty logic, that it's an indictment of some really poor political habits and instincts that the US is prone to. That due diligence in vetting her as a rigorous and informed thinker on the topic failed is an unequivocal failure.
source?
She got boosted by an insurgent group of law professors who spearhead whats called the Neobrandeis moment. Their theory is that anti-trust should be preemptively enforced against size for its own sake.
This is the article she wrote for her law review as a law student which put her on their radar and they started calling her a "rising star" etc etc, which snowballed into the performative appointment by the Biden admin.
Feel free to read through it.