Remix.run Logo
adrianN 16 hours ago

The European champion would still be ten times smaller than the Chinese but would have factual monopoly in Europe. I don’t think blocking the merger was entirely unreasonable.

graeme 15 hours ago | parent | next [-]

The parent comment is describing a scenario where the Chinese company may get a factual monopoly in Europe because it can outcompete the two European companies due to economies of scale.

hayd 13 hours ago | parent | next [-]

Or outcompete because it's state-funded, and can inject things like remote access (that the state might like the option to use one day).

It's really confusing that the EU don't consider this "dumping". I thought that was this big thing that they cared about.

jacquesm 8 hours ago | parent [-]

I definitely would not rule out the occasional strategic bribe. China has a ton of interests in Brussels. Ditto the USA.

numpad0 8 hours ago | parent | prev | next [-]

Chinese companies will get a factual monopoly no matter what, as long as they keep comparing imports vs domestics on prices. It's not like East Asian "subsidies" are going to end in 3 to 6 months, years, even decades. The imports from timbuktu will be just perpetually cheaper by being imports.

kelnos 14 hours ago | parent | prev [-]

Wouldn't cases of possible corporate-enabled espionage, like the one being discussed be a big competitive advantage for the European companies, regardless of their pricing or scale?

And that competitive advantage could presumably give them more scale?

IAmBroom 16 hours ago | parent | prev | next [-]

Euro/North American, but still smaller than China's company.

Your second sentence is quite a jump, however: "It won't be as big, so there's no point in trying to compete at all."

izacus 16 hours ago | parent | prev | next [-]

Also it would probably be 5x as corrupt.

The things you see in EU public tenders is just amazing, especially when they's little to no competition.

toyg 15 hours ago | parent | next [-]

5x as corrupt as it is now, or 5x as corrupt as the Chinese counterpart? Because they're pretty corrupt too...

buellerbueller 16 hours ago | parent | prev [-]

>The things you see in EU public tenders

Can you give examples of what you (obviously, since you're commenting) have seen, and how typical it is?

izacus 14 hours ago | parent | next [-]

So the major, common and probably most destructive, theme is the ecosystem of specialised tender companies. I mostly know this from the software side, but if you start working on such projects, you'll quicky find out that there's a persistent ecosystem of companies which specialize for these tender signups.

People employed there optimize for winning them (at any cost - quid-pro-quo agreements aren't rare in my experience). It's common for several such companies to collude in a way that they get awarded the tenders in a circle ("I get this one, next one is for you.")

Afterwards, they outsource the work to the cheapest lowest bidder (usually IT studends in the cases I've seen for software development, but essentially they'll be bottom of the barrel juniors). The quality of such products is about the same as the quality of any outsourced product which is built only to satisfy a checklist at the end. The US equivalent of that would be a corporation getting a defense contract and then basically have everything built by the cheapest outsourcer in India or similar location. Funny enough, university labs (or spinoffs) tend to be major part of this ecosystem, using grad students as workforce - their credentials tend to give them legitimacy over smaller companies.

The results are as disastrous as you can expect - companies a HNer could expect to win usually don't (due to lack of specialized knowledge on how to game the tender process, lack of connections and cost) and those that do are really there to do the bare minimum, shed the work as much as possible and deliver something they can't get sued over.

It's also not uncommon to see whole chains of such companies - the winner sometimes shares some outsourcing work with "losers" they outsource work further, skimming the funds on top and essentially outsourcing everything to the cheapest engineer they can find.

Dealing with any public EU project has been nothing but misery for me personally (as you can imagine from this post :) and this environment bred some of the most toxic workplaces I've worked with. The products were universally terrible and rarely actually useful for the purpose.

As much as I want independent EU software ecosystem, I don't think using public funding can breed anything but more corruption.

gunalx 14 hours ago | parent | next [-]

The system as bad as it is can be good as well. Let some consultants find out how to get the bids, and others how to do it well, and can be a outsourced third party. It gives differentiation without everyone needing to be large enough to actually bid on the contracts.

bsder 11 hours ago | parent | prev | next [-]

> As much as I want independent EU software ecosystem, I don't think using public funding can breed anything but more corruption.

Well, you described what happens when you outsource everything.

Governments used to ... gasp ... employ people to do tasks so that you didn't have to outsource every single piddly task. And since those employees could do the tasks, there was a floor such that selecting nobody and doing it in house was always an option.

Yes, that has different failure modes. However, you have more levers over those failure modes as opposed to a single lever of "Head to court and try to win a legal case."

buellerbueller 14 hours ago | parent | prev [-]

It sounds like you are describing capitalism.

tony69 13 hours ago | parent [-]

He is describing how bidding for publicly funded projects fails, because the bidding process designed to avoid corruption has been poorly designed (or corrupted by lobbying) such that it effectively sidelines honest and qualified bids. I would say this is a typical outcome with well meaning bureaucrats in a democracy, not capitalism

lovich 12 hours ago | parent [-]

It sounds exactly like how business works in my experience. It’s just the principle agent problem showing up in the government that same way it does in the private sphere.

I mean, if you’re at a place that uses staff aug and managing a project it’s just something you have to watch out from your vendors as table stakes. Whenever a new vendor was hired my fellow low level managers would be making bets on how long before they switched out their best guys with some fresh out of college junior that they’d give a fancy title to.

mtrovo 15 hours ago | parent | prev | next [-]

As someone who barely interacts with the people that care about tenders, my impression is that people that usually win are the ones better at playing the game rather than better at the job. The job later is potentially repackaged in chunks and offered to other players that in turn will do the same downstream. Something like Romania gets EU fund money to build roads in Romania with a German engineering project, German contractors, German supplied materials, but Romanian workers. Or in a more particular case part of recycling trash in Germany is basically being dumped illegally in Poland for a while and the same companies keep operating and winning contracts because why not.

You create a political class full of lawyers, and you get a country where lawyers thrive, who would have thought?

fragmede 15 hours ago | parent | prev | next [-]

Here's a short 30 pages on corruption and collusion risks in Hungary and Poland from the Yearbook of European Law, Volume 41, 2022

https://academic.oup.com/yel/article/doi/10.1093/yel/yeac009...

DiggyJohnson 16 hours ago | parent | prev [-]

This is one of those things that is so obvious as to not require a source. Just sharing my perspective on this conversation, I don’t think it’s an unreasonable question to ask if you’re unfamiliar with the space

noir_lord 15 hours ago | parent [-]

> What can be asserted without evidence can also be dismissed without evidence.

Hitchen's Razor.

"Everyone knows" is always a dangerous place to stand in any argument.

funcDropShadow 3 hours ago | parent | prev | next [-]

So, in order to avoid the negative consequences of a European monopoly, we make sure that a Chinese monopoly prevails? That doesn't seem like a wining strategy for Europe.

jack_tripper 16 hours ago | parent | prev | next [-]

I'm with you on this. I feel like too much boogye-man-ing and FUD scaremongering is taking place on the cover of "China evil and has giants" in order to justify breaking anti-monopoly laws and allowing our own monopolies to form under this justification, that will only benefit shareholders of those companies but eventually harm European consumers via lack of innovation due to lack of competition, price gouging and the European workers via the inevitable layoffs that follow such mergers.

If you have two large, slow, bureaucratic and uncompetitive companies, then merging them together won't make the resulting giant less so, but the contrary, it'll be even more inefficient and uncompetitive, and then expect government bailouts because now they're too big to fail.

dguest 2 hours ago | parent [-]

You either believe that monopolies produce worse products or you don't.

If you believe it, the "I know they are bad" -> "but we need to complete with the boogie man" -> "we need to build our own monopoly" argument is just confusing. So we should make worse products to be competitive?

If you don't believe it, you should be explaining why monopolies make better products, not arguing that desperate times call for desperate abandonment of logic.

thinkingtoilet 14 hours ago | parent | prev [-]

So now you have a state-owned Chinese monopoly controlling your transportation.

marcosdumay 13 hours ago | parent [-]

Just don't buy from them. Do you think making a local monopoly in Europe will lower European prices?

Who the fuck invented that logic of "those companies prices are too high, we have to let them consolidate into a monopoly so they lower their prices"?

HFguy 9 hours ago | parent | next [-]

Prices aren’t the problem.

China turning off your transportation is.

thinkingtoilet 13 hours ago | parent | prev [-]

How many companies do you think exist that make these types of machines?

marcosdumay 12 hours ago | parent [-]

At least 2 in Europe alone, apparently thanks to a single person in a markets protection agency.