Capitalism rarely discusses how to lower market entry thresholds; when there are no thresholds, rent-seeking will decrease.
Cory Doctorow's article points out that when competition disappears, effective regulatory systems also collapse. Competition not only prevents industry collusion in deceiving regulatory authorities but also weakens corporate profits, leaving them with insufficient capital to manipulate regulators. The author argues that people in modern society cannot independently judge highly technical issues, such as whether the software of anti-lock braking systems in cars is reliable, whether vaccination recommendations are reasonable, or whether building structures are safe. Therefore, they must rely on professional regulators to set rules. This system depends on opposing claims from different companies to check each other, similar to the "peer review" in science, which prevents misdirection and self-deception. However, once an industry consolidates into a few large companies, the familiarity and shared interests among their executives make the entire industry prone to coordination, forming monopolistic groups and using massive funds to influence or bribe regulatory agencies, leading to the phenomenon of "regulatory capture."
Doctorow points out that "regulatory capture" has two aspects. On one hand, captured industries can arbitrarily break laws, harm public interests, exploit labor, or pollute the environment. On the other hand, these companies collude with regulators to jointly attack competitors, startups, or foreign rivals, creating an imbalanced regulation of "leniency internally and harshness externally." He uses tech companies as an example, criticizing them for masking their true nature through apps, creating legal gray areas. For instance, Uber claims it is not an employer because it merely "assigns tasks via an app"; Airbnb packages illegal accommodations as "shared housing"; fintech companies claim to offer innovative services but are essentially unregulated banks; cryptocurrency operators trade unregistered securities via apps; RealPage provides algorithmic advice to landlords to uniformly raise rents but claims it does not constitute price-fixing. Plexure collects customer data via McDonald's app for personalized price hikes. These actions not only allow companies to "bypass laws through app tactics" but also exploit intellectual property laws prohibiting "circumvention" to prevent others from modifying or cracking unfair designs, creating a ridiculous situation where "using apps to commit crimes makes fixing apps itself a crime."
Discussions on Hacker News present diverse viewpoints. Some commenters argue that Doctorow overemphasizes the importance of competition, pointing out that highly competitive industries like real estate and finance are actually more prone to political and regulatory capture, emphasizing that excessive competition makes regulation difficult to enforce. Others discuss Airbnb's issues from the perspective of social contracts, with some claiming Airbnb is similar to traditional rural hospitality customs, while other residents note that short-term renters cause noise and community degradation, damaging existing neighborhood relationships. Discussions also explore the "conflict between law and software": as societal norms are replaced by code, legal systems struggle to monitor software operations, leading to a lack of transparency for the public about why they are prohibited or blocked. Some participants pessimistically believe that a single country's laws are already insufficient to regulate the global software ecosystem effectively.
Critics further challenge Doctorow's logic and rhetoric, arguing that he exaggerates the phenomenon of "using apps to commit crimes," as RealPage's case actually involves a constitutional debate on freedom of speech and market information sharing, not merely evading regulation. Some commenters doubt his examples, such as the widespread adoption of anti-lock braking systems being due to collaboration between large companies and regulators rather than competition from small companies. Others note that tech giants are gradually evolving into "quasi-intelligence agencies" with both information monitoring and market monopolies, with even restaurant chains like McDonald's relying on customer data for profit, sometimes even earning more than from selling burgers. Overall, the discussions highlight two main focuses: one is the concern over "legal failure and software rule," and the other is the divergence in evaluating Doctorow's narrative style and concepts like "enshittification."
https://news.ycombinator.com/item?id=45518136