What caught my attention – week of 18 November 2019

Greetings again from Singapore. Below is a list of articles and videos that caught my attention this week, ranging from media, to big tech regulation and a spiritual running race.


1. Media and entertainment

Title: Who will win the media wars?
Many booms turn to bust. Unlike, say, WeWork, most entertainment firms have a plausible strategy, but too much cash is now chasing eyeballs. Netflix is burning $3bn a year and would need to raise prices by 15% to break even—tricky when there are over 30 rival services. It hopes that its fast-growing international markets will create economies of scale. As well as saturation, the other danger is debt. Deals and high spending have caused American media firms to build up $500bn of borrowing. When the shake-out comes, history offers two dispiriting examples of how a consumer-friendly boom can turn into a stitch-up. Telecoms and airlines in America saw a riot of competition in the 1990s only to become financially stretched and then reconsolidated into oligopolies that are known today for poor service and high prices.

2. Chinese SOEs

Title: Some Chinese firms turn out to have lied about their state pedigree
As China’s economy slows, defaults have risen sharply. Such failures, though painful, separate strong companies from also-rans, a process other countries know well. In China there is an extra wrinkle: the downturn is also exposing fake soes. These are companies that misled creditors about their state connections to suggest they would be supported if they ran into trouble. But when trouble arises, the government is nowhere to be found.

3. Big tech antitrust

Following last week’s interview with Rana Foohar on Real Vision I’ve been digging more into this topic. Below is a link to three articles and a very well written legal journal paper. Worth your time to read through at least the highlights.


Amazon’s Antitrust Antagonist Has a Breakthrough Idea (NYTimes)

“Amazon has more revenue than Facebook, Google and Twitter put together, but it has largely escaped sustained examination. That is beginning to change, and one significant reason is Ms. Khan. In early 2017, when she was an unknown law student, Ms. Khan published “Amazon’s Antitrust Paradox” in the Yale Law Journal. Her argument went against a consensus in antitrust circles that dates back to the 1970s — the moment when regulation was redefined to focus on consumer welfare, which is to say price. Since Amazon is renowned for its cut-rate deals, it would seem safe from federal intervention. Ms. Khan disagreed. Over 93 heavily footnoted pages, she presented the case that the company should not get a pass on anticompetitive behavior just because it makes customers happy. Once-robust monopoly laws have been marginalized, Ms. Khan wrote, and consequently Amazon is amassing structural power that lets it exert increasing control over many parts of the economy.”


Big Tech is America’s new ‘railroad problem’ (FT) 
“The internet is the railroad of our times — an essential piece of public infrastructure over which much of the world’s commerce and communication is now conducted. Yet the companies that dominate it are private, profit-seeking entities. And like the rail companies of old, they pose a monopoly problem.”


Lina Khan: ‘This isn’t just about antitrust. It’s about values’ (FT)
“Khan’s breakthrough came two years ago. While still a student at Yale Law School, she wrote a paper, “Amazon’s Antitrust Paradox”, which was published in the school’s influential journal. Academic papers don’t tend to go viral, but this one received a near-unprecedented level of interest from policymakers. Khan’s study seemingly hit a nerve at a time when the overweening power of the Big Techcompanies, from Facebook to Google to Amazon, is rising up the agenda. “The fact that people are paying attention and trying to figure out how we understand and define the problem [of monopoly power] — I think that’s a great exercise to be engaging in,” she says.”


Amazon’s Antitrust Paradox (Yale Law Journal)
This 2017 paper is referenced in the above articles on the same subject. It’s about 100 pages, heavily footnoted, and I found it to be very useful read.


Abstract: “Amazon is the titan of twenty-first century commerce. In addition to being a re- tailer, it is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space. Although Amazon has clocked staggering growth, it generates meager profits, choosing to price below-cost and ex- pand widely instead. Through this strategy, the company has positioned itself at the center of e- commerce and now serves as essential infrastructure for a host of other businesses that depend upon it. Elements of the firm’s structure and conduct pose anticompetitive concerns—yet it has escaped antitrust scrutiny. This Note argues that the current framework in antitrust—specifically its pegging competi- tion to “consumer welfare,” defined as short-term price effects—is unequipped to capture the ar- chitecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output. Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational—even as existing doctrine treats it as irrational and therefore implausible. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors. This Note maps out facets of Amazon’s dominance. Doing so enables us to make sense of its business strategy, illuminates anticompetitive aspects of Amazon’s structure and conduct, and underscores deficiencies in current doctrine. The Note closes by considering two potential regimes for addressing Amazon’s power: restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties.”


4. How the brain works

Title: Mesmerising Video Shows Waves of Spinal Fluid Washing Over The Brain During Sleep

Link: Science Alert

We are quite literally having our brains washed every night. Neuroscientists have now produced a fascinating video that shows this nocturnal pulsing process in action. Waves of watery cerebrospinal fluid (CSF) flow over our brains, this latest study shows, pulsing rhythmically while we’re snoozing, and at the same time clearing out any toxins that shouldn’t be building up inside our heads.


5. 3100: Run and Become

Link: YouTube


Can running lead to enlightenment? Can it transform your life and make you a better human being? This is the Self-Transcendence 3100 Mile Run, the world’s longest race – where competitors must average 59+ miles a day in the 52-day window … all around a 1/2 mile sidewalk loop in NYC. How does one even train for this race? A champion Navajo ultra-marathoner, a hunter from the Kalahari Bushmen and a Japanese Monk illustrate how we, as human beings, can and have always used running to transcend our limitations and connect ourselves to realities beyond the physical.


+1 Book of the week

Author and title: John Krakauer – Into the wild

Fascinating book about stepping out of convention and living life on your own terms. Reminded me a bit of Cheryl Strayed’s book called Wild, though this has a more dramatic ending. Recommend reading it if you are deciding on making changes in your life. There is also a movie with the same title.

“Make a radical change in your lifestyle and begin to boldly do things which you may previously never have thought of doing, or been too hesitant to attempt. So many people live within unhappy circumstances and yet will not take the initiative to change their situation because they are conditioned to a life of security, conformity, and conservation, all of which may appear to give one peace of mind, but in reality nothing is more damaging to the adventurous spirit within a man than a secure future. The very basic core of a man’s living spirit is his passion for adventure. The joy of life comes from our encounters with new experiences, and hence there is no greater joy than to have an endlessly changing horizon, for each day to have a new and different sun. If you want to get more out of life, you must lose your inclination for monotonous security and adopt a helter-skelter style of life that will at first appear to you to be crazy. But once you become accustomed to such a life you will see its full meaning and its incredible beauty.