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Oh hell no. More lawyers to find more loopholes. How about addressing the root cause: the lack of competition? The way to do this is lower the barrier to entry, which is made of 100% over-regulation.

You can involve all the antitrust you want, as long as you don't lower the barrier to entry you're just lying to yourself and adding more useless middlemen.






The barrier to entry is definitely not "100% over-regulation". Starting an airline would be extremely difficult even if it were entirely unregulated. You need airplanes, pilots, and a variety of flight and ground crew. You need landing slots at busy airports. And then you need a customer base big enough to fill up your flights.

Even if all of that were easy, you still want anti-trust regulation, because airlines are a cutthroat business. If you start up NerdBird Inc, specializing in SF-Austin flights, it is absolutely in the interests of United and American to undercut you on that route for as long as it takes to drive you out of business. Which will probably not be very long, as airlines are expensive to run and margins are thin.


Look at what happened to Virgin America? It was a consumer-focused airline that was doing very well financially, and it was forcibly acquired because of regulations that US airlines must be US owned.

Nope. That was a problem early on for Virgin America. But Branson was quite explicit: consolidation was the problem: https://www.virgin.com/richard-branson/virgin-america

Yeah, read the article. He was against the merger - regulation drove the forced consolidation, which he did not want. He posted about it a ton when it happened.

If you remove regulations, businesses will raise barriers to entry. Businesses don't like to compete. Competition is a zero-sum game that they might lose. Instead, they prefer to form cartels and turn it into a non-zero sum game where they all win (and consumers all lose).

World history clearly shows that lack of regulation inexorably leads to trusts, cartels, price fixing, price dumping, and all sorts of other anti-competitive agreements. It's trivially easy for a monopoly or cartel to raise their own barriers to entry to maintain their hegemony.

In fact, there's a good argument that the governmental barriers to entry you are lamenting were in fact driven by entrenched businesses as an example of regulatory capture and not a flaw in regulation itself.

If you let businesses get so big that not only are they not regulated, but they have taken over control of regulation itself, you're in a real pickle.


But what is the minimum size for a business to "get so big they have taken over control of regulation"? I have seen very small companies (like, think size of one) deftly manipulate state- and federal- level regulations to their advantage.

> But what is the minimum size for a business to "get so big they have taken over control of regulation"?

This is sort of like asking, "What is the minimum weight you can put on a seesaw before it tips?" The answer depends entirely what's on the other side.

One way to look at free markets is that they provide economic stability in the same way that tensegrity [0] structures provide physical stability. They work not because any element provides stability, but because — when very carefully composed together! — the elements exert opposing forces which all balance out leading to a stable system.

The "brilliant idea" of markets is taking advantages of forces that already exist — human selfishness and the desire to profit — and harness that to produce a system with some level of efficiency. The downside is that there's no real way to evaluate market participants in isolation.

[0]: https://en.wikipedia.org/wiki/Tensegrity


At least on its face, I don't buy that high barriers to entry in every market is "made of 100% over-regulation." Depending on the market in question, there may be extremely high capital costs that have little to do with regulation. What you're trying to do may be highly dependent on partners who be motivated not to give you the best products/services available at reasonable prices. Competition may be entrenched simply by virtue of having been in business much longer than their new competitors, taking advantage of their scale in ways that startups can't -- including locking up potential customers through contracts.

I don't have experience in Hipmunk's field, but I do have experience, in another life, with CLECs, "competitive local exchange carriers." CLECs bloomed thanks to deregulation of their industry in the early 1990s, which is great -- but they were virtually all gone within a decade, not due to re-regulation but to the simple fact that achieving scale and profitability was monumentally expensive and difficult. The company I was at, Intermedia Communications, was bringing in close to a billion dollars of revenue annually by the time they threw in the towel and agreed to be purchased... and they still hadn't come close to turning a profit. But by that point the writing was already on the wall, and the industry was collapsing from hundreds of players to dozens. (The rise of wireless, of course, was the final death blow, but the industry was basically undead by then.)

I don't take Hipmunk's demise as a sign of "too much regulation" at all; airlines went through a similar contraction to CLECs, and what killed Hipmunk -- airlines choking off their pricing data -- will act to prevent any new competitors. That's not a function of too much regulation -- it's a function of not regulating the right things. What if airline pricing data was subject to FRAND ("fair, reasonable, and non-discriminatory") licensing?

Regulation is absolutely used too often to protect incumbents, but you simply can't blame lack of competition in every industry on too much regulation. Arguably, when implemented correctly, regulation can increase competition, not harm it.


Do you expect to ever end the arms race of finding loopholes vs closing them? What would this look like?

I don't believe it's possible. You can't fight bad actors by hoping they'll just somehow lose. The unregulated "more competition" market quickly turns into a "less competition" market as the most ruthless parties establish dominance through whatever means necessary. Your barriers to entry, in the extreme case, become things like physical intimidation.


Maybe but in this case, a lower barrier to entry wouldn't have helped but regulation would have.

How would you lower the barrier to entry into something like Facebook or Amazon? Or Google trips for that matter? Or in this example, Hipmunk?

Require federation. And prohibit dropping interoperability.

Remember that golden era when XMPP was federated across Facebook, Google Talk, AOL, etc. It wasn't perfect but did give users more options.




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