Linked by Thom Holwerda on Wed 14th Mar 2018 00:43 UTC

President Trump on Monday blocked Broadcom's $117 billion bid for the chip maker Qualcomm, citing national security concerns and sending a clear signal that he was willing to take extraordinary measures to promote his administration’s increasingly protectionist stance.

In a presidential order, Mr. Trump said "credible evidence" had led him to believe that if Singapore-based Broadcom were to acquire control of Qualcomm, it "might take action that threatens to impair the national security of the United States." The acquisition, if it had gone through, would have been the largest technology deal in history.

This US administration would eventually stumble onto doing the right thing - infinite monkeys and all that - so here we are. To explain why this is a good move, Ben Thompson's article about this issue is a fantastic, must-read explainer.

There is a certain amount of irony here: the government is intervening in the private market to stop the sale of a company that is being bought because of government-granted monopolies. Sadly, I doubt it will occur to anyone in government to fix the problem at its root, and Qualcomm would be the first to fight against the precise measures - patent overhaul - that would do more than anything to ensure the company remains independent and incentivized to spend even more on innovation, because its future would depend on innovation to a much greater degree than it does now.

The reality is that technology has flipped the entire argument for patents - that they spur innovation - completely on its head. The very nature of technology - that costs are fixed and best maximized over huge user-bases, along with the presence of network effects - mean there are greater returns to innovation than ever before. The removal of most technology patents would not reduce the incentive to innovate; indeed, given that a huge number of software patents in particular are violated on accident (unsurprising, given that software is ultimately math), their removal would spur more. And, as Qualcomm demonstrates, one could even argue such a shift would be good for national security.

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RE: Trump
by woegjiub on Wed 14th Mar 2018 03:31 UTC in reply to "Trump"
Member since:

That vile man is the open laughing-stock of the entire world (sans US).

Far from MAGA, he's driving you all into the ground, but I don't care - China and Europe are far more important trading partners. The US can burn.

Reply Parent Score: 3

RE[2]: Ignoring the USA
by shotsman on Wed 14th Mar 2018 08:48 in reply to "RE: Trump"
shotsman Member since:

I can remember a time when I'd see the words

"Not for Sale or Issue in the USA" on many books.

I think that it won't be long before companies decide to vote with their feet and not trade (import or export) with the USA while the current POTUS is in place.

Sadly, it seems that far too many Americans think there is no civilised (in their opinion) world outside the lower 48.

Reply Parent Score: 4

RE[3]: Ignoring the USA
by darknexus on Wed 14th Mar 2018 18:50 in reply to "RE[2]: Ignoring the USA"
darknexus Member since:

Nah. Part of being good in business is learning to keep your emotions in check--something people around here could due to learn--and look at the broader picture. At the most, a U.S President will reign for eight years. That's not that long, in terms of business and, if someone theoretically decided to absent themselves from a market, it would simply give a competitor time to take advantage and get the sales the absent business otherwise would have gotten and, for what? Emotional dislike of one individual? That would be a very stupid thing for a competent business manager to do.

Reply Parent Score: 0

RE[3]: Ignoring the USA
by woegjiub on Wed 14th Mar 2018 21:53 in reply to "RE[2]: Ignoring the USA"
woegjiub Member since:

Unless the next US President continues down this path, I don't know how many large businesses will ignore the states completely.

It's not unlikely that they'll reduce the levels of product they're trading, and refrain from issuing particular SKUs to the states, but surely anyone already doing business there will keep the relationships they have with other partners in place, to ramp up again should they become less protectionist.

Reply Parent Score: 2