> There are plenty of acquisitions which I think are competitive, but the market conditions are the critical evaluation point.

There is an easy circumstance when an acquisition is never "competitive" -- when the takeover target is a healthy business and the acquiring company is a major incumbent in the same market.

Conversely, something like Google buying Android isn't a merger problem. Google's market share in mobile phone operating systems at the time was essentially zero. They were buying it to get to market a little faster and it's very likely that if they'd built a new one instead of buying it, Android would have died and their thing would have ended up where Android is.

Because it wasn't Android's technology that won. Take the median OS and then make it free by funding its development with Google's search engine revenue and also give it free advertising from the largest advertising company. The OS isn't the reason that became one of the two major mobile platforms.

But the problem there not being the merger doesn't mean there's not a problem. It'd be the same problem if they'd developed it internally, because the issue is that it's "free" but it isn't. Anyone can "run Android" on their competing device but they can't then run their bank app because that requires attestation which requires Google. It's an antitrust problem that isn't a merger. Those are a thing too.

> If you think about it in terms of balance equations there have to be exactly as many sellers as there are buyers at a given price and any want-to-be sellers who aren't competitive at that price are eventually forced out of the market through bankruptcy because they can't sell and run out of reserves to hold on.

That's not how it works in practice.

In a market with low fixed costs, you can have an arbitrarily large number of sellers. Some markets have millions of sellers, billions if you count the labor market.

In a market dominated by fixed costs, larger sellers have an advantage, but even that doesn't imply that there is a specific "appropriate" number. If all of the sellers are the same size then none of them has a scale advantage over the others regardless of how many there are.

So we have to distinguish between two different things.

The first is, how many sellers can the market support? In other words, suppose it costs a billion dollars to enter the market, the maximum value customers place on the product would allow for a gross margin of $100, and there are a billion customers. Then the maximum viable number of competitors is 100 because otherwise they can't each get enough customers to recover their costs and go out of business. Whereas if there are 100M customers then it's only 10, and if there are 5M customers then it's 0 and nobody produces that product.

But this being a low single digit positive integer is very rare, because to get there you have to thread the needle exactly and find something that can only support 2 rather than 20 or 5000 or a billion, but also not get so tight that it's 0.9, because anything less than 1 is really 0.

Which brings us to the second thing. You're in the market that can support e.g. 100 suppliers. To support 100 suppliers they each need a gross margin of $100, and customers value the product in that amount when it's not available for less. But now suppose some of the sellers are willing to accept $10 margins. At the lower price the market would only support 10 sellers; they each need 10 times as many customers. At a margin of $1 it would only support one seller. But this is every market where the fixed costs aren't fully zero. And, of course, the fewer sellers there are the less inclined they are to accept the thinnest of margins, or the more likely they are to be operating a large inefficient bureaucracy that eats up the economies of scale through red tape etc.

Notice also that the "maximum" number isn't necessarily the optimal number -- the market could support 100, but you might be better off with 15, because then the margins can be $15 instead of $100, which might be worth it on a $1000 product, whereas trying to save the remaining 1.4% by going all the way to a monopoly is not likely to go in your favor.

Which brings us to the thing that most commonly happens in practice. The market can support 100 sellers but one or two of them have more capital, so they lower their prices temporarily until the others go out of business, then raise them back up again as long as no one new enters the market. Which doesn't work when the barriers to entry are low because then people constantly enter the market anyway, but does work when the barriers to entry are high. Which is why we need to keep them low or, where that isn't possible, need antitrust.

> There's an alternate reality where Facebook fell off, and Instagram never monetized and died like the dozen other competitors it had.

You make its sound like that sort of thing happening is a problem. In practice the only way they both fall off if is something else replaces them. If the something else is the size of Meta, that's the status quo. We're no worse off than what we got. Whereas if it was five other companies or a federated system etc. then we'd have more competition.

Meanwhile the more likely scenario is that Facebook would still have >100M users even if it had less than it does now, and Instagram would have figured out that "put ads on it" is a profitable business model and survived independently as well.

My generation migrated from Facebook to Instagram for keeping up with people / functioning as a social network. They were absolutely substitutes and I don't see how they let the merger go by. I'm almost sure it wouldn't have happened in other countries.

WhatsApp is a bit different since it's more one on one communication and doesn't have the social network stuff so much.

YMMV and the use might be different in the USA.