<story><title>Mergers ruin everything</title><url>https://mattstoller.substack.com/p/mergers-ruin-everything</url></story><parent_chain><item><author>treis</author><text>&amp;gt;Americans pay $50 billion more per year than Europeans for similar cell phone service, which is about $14&amp;#x2F;month in pure profit for every single American&lt;p&gt;This doesn&amp;#x27;t really add up.  T-mobile&amp;#x27;s net income is 3-4 billion a year on 80 billion on revenue.  They&amp;#x27;re not generating monopoly profits.&lt;p&gt;IMHO I don&amp;#x27;t think you can really merge your way into a monopoly.  The existence of multiple companies to merge is effective proof that whatever business they&amp;#x27;re in is not a natural monopoly.&lt;p&gt;Look at social media as an example.  Facebook is the dominant player but in the course of their existence Instagram, WhatsApp, TikTok, and Snapchat have all become billion+ companies while another dozen or so have made it to 100+ million.  Allowing them to buy Instagram and WhatsApp didn&amp;#x27;t prevent the rise of Tiktok or the continued existence of Snapchat.  There&amp;#x27;s no natural monopoly here and probably should be little concern to anti-trust regulators.&lt;p&gt;Compare with phones.  You have a stable Android&amp;#x2F;Apple duopoly but it didn&amp;#x27;t come from mergers.  It&amp;#x27;s a natural monopoly business so naturally monopolies formed. Facebook, Amazon, and Microsoft all trying to break into the market and failing miserably is also strong evidence.  This should be a huge concern to anti-trust regulators.</text></item></parent_chain><comment><author>ajsnigrutin</author><text>The&amp;#x27;re is a huge difference between telcos and social media sites.&lt;p&gt;Anyone can make a new instagram... just write some code in your free time, get (very lucky, and get) some VC to throw some money into your company, and you become a new instagram... then either get forgotten in a few years, or get bought for some huge amount of money. Instagram had just 13(?) employees by the time facebook bought them (or some other very low number, i forgot).&lt;p&gt;But a telco? No way... virual operator maybe, but there&amp;#x27;s no real money in that, but just starting to build basestations is impossible, you need millions and millions to even get frequencies, and you&amp;#x27;re already late for those, and there&amp;#x27;s basically no realistic way for a new mobile operator to come to an existing market now.</text></comment>
<story><title>Mergers ruin everything</title><url>https://mattstoller.substack.com/p/mergers-ruin-everything</url></story><parent_chain><item><author>treis</author><text>&amp;gt;Americans pay $50 billion more per year than Europeans for similar cell phone service, which is about $14&amp;#x2F;month in pure profit for every single American&lt;p&gt;This doesn&amp;#x27;t really add up.  T-mobile&amp;#x27;s net income is 3-4 billion a year on 80 billion on revenue.  They&amp;#x27;re not generating monopoly profits.&lt;p&gt;IMHO I don&amp;#x27;t think you can really merge your way into a monopoly.  The existence of multiple companies to merge is effective proof that whatever business they&amp;#x27;re in is not a natural monopoly.&lt;p&gt;Look at social media as an example.  Facebook is the dominant player but in the course of their existence Instagram, WhatsApp, TikTok, and Snapchat have all become billion+ companies while another dozen or so have made it to 100+ million.  Allowing them to buy Instagram and WhatsApp didn&amp;#x27;t prevent the rise of Tiktok or the continued existence of Snapchat.  There&amp;#x27;s no natural monopoly here and probably should be little concern to anti-trust regulators.&lt;p&gt;Compare with phones.  You have a stable Android&amp;#x2F;Apple duopoly but it didn&amp;#x27;t come from mergers.  It&amp;#x27;s a natural monopoly business so naturally monopolies formed. Facebook, Amazon, and Microsoft all trying to break into the market and failing miserably is also strong evidence.  This should be a huge concern to anti-trust regulators.</text></item></parent_chain><comment><author>ultrasaurus</author><text>Maybe &amp;quot;profit&amp;quot; is the wrong word. Anecdotally, the US has a lot of dedicated &amp;amp; spacious cell phone stores compared to other countries I&amp;#x27;ve been in (where selling SIM cards is part of another store, like a 7-11 or an electronics store).&lt;p&gt;It&amp;#x27;s possible there&amp;#x27;s an extra $14&amp;#x2F;month in &lt;i&gt;revenue&lt;/i&gt; going towards cell phones as an industry but due to the competition such as it is, it&amp;#x27;s mostly being spent on more aggressive GTM expenses.</text></comment>