> You simply decide that having less than 5 suppliers at any level is unacceptable and you bust companies up, repeatedly until you have those suppliers.

This is a very extreme solution, and eliminates many of the benefits from horizontal integration even when the benefits are passed onto customers. Consider:

- insurance companies

- banking

- utilities

It’s also hard to implement. What counts as a supplier? Is Google the sole supplier for search functionality? If 4 suppliers provide 1% of demand, and one supplies 96%, does that comply? If there’s only one company offering some new service (e.g. driverless cars), do they immediately get broken up?

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bsder 2 hours ago | parent [-]

> do they immediately get broken up?

Yes. Always. At all levels. I might provide a limit below which that doesn't happen (like $50 million in revenue), but as soon as you cross that limit, scrutiny should be automatic.

> This is a very extreme solution, and eliminates many of the benefits from horizontal integration even when the benefits are passed onto customers. Consider: - insurance companies - banking

There is no advantage to horizontal integration for consumers in those industries. If anything, the value is negative. The fact that people are quite a bit happier about credit unions than Chase says everything you need to know.

Sure, there are "efficiencies" to be gained by horizontal integration. What we have seen is that the horizontal integration is so strong that the industries are sclerotic in the face of crisis or change (see: toilet paper manufacturers in Covid who couldn't switch gears). It has become repeatedly clear that we need resilience and competition more than we need efficiency.

> utilities

Should be limited to natural monopolies and strongly controlled by the government. We have seen what happens when you create hybrid-type utilities that try to have some existence in the market (rather than being solidly government regulated) and the result is poor (see: PG&E).

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pinkmuffinere 2 hours ago | parent [-]

> There is no advantage to horizontal integration for consumers in those industries. If anything, the value is negative. The fact that people are quite a bit happier about credit unions than Chase says everything you need to know.

IMO this claim is just too strong. I think you'd end up breaking up (or trying to) Lloyds of London, Spacex, Fedex, DHL, Boeing, Panasonic, ASML, Google, Apple, and many other very specialized companies. These businesses would be very expensive if they could only supply 1/5 of the market, to the point that many people would be totally priced out. The world can barely support 1 ASML, imagine if we had to pay for 5 of them. We'd be sent back to the 2000s, and that's _just_ computing.

	▲	bsder an hour ago \| parent [-]
		> I think you'd end up breaking up (or trying to) Lloyds of London, Spacex, Fedex, DHL, Boeing, Panasonic, ASML, Google, Apple, and many other very specialized companies. I see exemplars and no counterexamples. Boeing turned to garbage when it took on McDonnel-Douglas--we were better off with the separate companies. YouTube not being bought by Google means that you don't have a single giant ad juggernaut and the copyright infringement that goes along with it. Apple being busted up means we have a division that actually focuses on computers in their own right rather than being a vestigial graft to the phone services division. Fedex was enough of a monopoly problem that Amazon bought carriers and, very painfully, set up its own delivery system. > The world can barely support 1 ASML, imagine if we had to pay for 5 of them. So, you prefer that we are two Chinese drone strikes from having a chip economy meltdown? This is the kind of stuff that absolutely needs diversity. And part of the reason the ASML stuff is so expensive is because it doesn't have enough volume. So, for example, if the US had multiple fab lines that could consume the ASML machines, that would reduce the costs for ASML.