Comment by adrianN
5 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.
5 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.
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.
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.
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?
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."
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.
5x as corrupt as it is now, or 5x as corrupt as the Chinese counterpart? Because they're pretty corrupt too...
>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?
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.
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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?
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...
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
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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.
So now you have a state-owned Chinese monopoly controlling your transportation.
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"?
How many companies do you think exist that make these types of machines?
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