Her point is that m&a isn’t the best thing for the economy or founders. Unchecked m&a creates cannibal capitalism where one mega zombie firm scoops up all competition.
Her point is that m&a isn’t the best thing for the economy or founders. Unchecked m&a creates cannibal capitalism where one mega zombie firm scoops up all competition.
An interesting read on this kinda thing in South Korea: https://www.reddal.com/insights/growing-korean-smes-and-star...
Possibly interestingly, it would have been good for _customers_ of VMware if their acquisition by Broadcom had been blocked.
The VMware shareholder's value though probably went up from that deal.
Yet there are plenty of examples of monopoly or near monopoly businesses getting their butts handed to them by startups.
Yahoo, BlackBerry, Kodak, Nokia, Sears.
So it’s clearly not “once you have a monopoly it’s game over for competition”. Markets aren’t stagnant, and as they change it provides opportunities for new competitors to do that “new thing” better than the monopolies.
And how many businesses do you estimate have been killed or eliminated because of unchecked m&a? Expanding the data set to include non-tech industries indicates strongly that it's not always the case that a big monopoly will eventually fail. Healthcare for example is filled with instances of bigger companies acquiring smaller ones and killing the competition to their product, a quick Google search will show you that.
Can you give me a specific example? Last I checked no insurer has more than 30% market share.
With the exception of yahoo (which is still a large company I should note), None of those examples were killed by a start up competitor. They were killed by foundational technology shifts that were orthogonal to the industry. Yahoo, is the closest example with google, but kind of proves Kahns point in that a competitor they tried to buy—-google—- refused to be acquired and then innovated them out of the market. Imagine how much worse the world would have been if yahoo bought google and mothballed it. Blackberry and Kodak were both put out of business by apple which was a computer and software company not a phone or camera company. Sears was bought buy Edward Lampert, an private equity bro that fancied himself the next Warren Buffet but in the end gutted it by selling it for parts to keep the cash for himself
> They were killed by foundational technology shifts that were orthogonal to the industry.
That's the point. Markets aren't stagnant. When changes happen, monopolies are susceptible to being unseated.
This is very wrong because monopolies destroy the very competitive and innovative landscape that is necessary to unseat them, and in the process impose massive social harm in the form of higher prices, worse products or services, increased concentration of wealth, reduced employee compensation, political corruption.
America experienced uncheck monopolies during the Gilded Age. Most thought that rapid industrialization, economic growth, and technological advances would have resulted in enough competition to create an economic utopia. Instead, even while the United States experienced a surge in wealth and prosperity, the underlying reality of political corruption, social inequality, and labor unrest created a nasty, brutish existence that was only solved when the Trust Busting Roosevelt's transformed America by breaking up the monopolies.
If you like free market capitalism you can't be in favor of monopolies, and if you dont want monopolies you need STRONG enforcement of antitrust M&A regulation. We are well past a correction since Regan stopped antitrust enforcement. I would argue that all of our political chaos since the 1980's can be traced primarily back to that single decision.