I wonder if a simpler solution to all this regulartion would be something like imposing a tax (fee?) when larger companies acquire smaller companies? So something like, "For every order of magnitude difference between the acquirer and the aquiree, there will be a 100% tax on the acquisition price paid to the US Federal government."
So this would basically encourage companies to either have their own IPO (no fee at all) or be acquired (merged really) by a company of equivalent size. If you are acquired by a much larger company, that company will have to pay a (logarithmicaly) large fee relative to the acquisition price. If they really want it, no problem, but it will be "cheaper" for a more correctly sized company to acquire them.
Seems like the regulation works well when it is applied. Why is there a need for a simpler solution? Why try to replace it with a 'simpler' tax with none of the human consideration about how the m/a could lead to less competition.
Like if this regulation was replaced in favor of this tax, a big company merging with another big company would be considered fine when obviously big company mergers can be just as concerning as larger companies buying smaller ones
Chesterton's Fence:
>In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, "I don't see the use of this; let us clear it away." To which the more intelligent type of reformer will do well to answer: "If you don't see the use of it, I certainly won't let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it."
Then the companies will just poach all the good employees they want and “license” the IP if they care about it from the shell of the former company. We see that now.
I agree with taxing large companies more, however the log fee could also hinder the sale of companies that are legit only interesting enough for large companies to buy, preventing certain startups from being able to successfully sell.
I haven’t given this much thought, but my gut feeling is that it should be OK for a big company to acquire a smaller one if both sides agree and it’s not blatant anti-trust material (as with Meta acquiring Instagram).
I think merging with equal-sized competitors is sometimes just as bad for competition as acquiring smaller competitors.
What problem does this solve? Then my small company is less likely to receive acquisition offers which is bad for me!
How is that simpler? I am already confused