Ask Us Anything: ACCC's New Merger Mandatory Notification Thresholds, The Most Insightful Things We've Read + Our Social Media Thoughts

0:00I'm Adam Schwab. I'm Adir Shifman. And this is The Contrarians with Adam and Adir.

0:09And we are back. Episode 129, Ask Us Anything, in quite a turn up. Usually it's Adir's fault we've got issues. Occasionally it's my fault. Basically never it's Mike's fault. Mike's had an absolute mare today, so we've been delayed about 20 minutes while Mike gets his computer set up. So over to the chief questioner asker who can i just say can we don't misrepresent me though it's not like i don't have issues it's just that my issues have been overshadowed by my issues are relatively minimal today exactly i've had probably the worst run of tech we've ever had on this show but hey let's get straight into the episode no need to dawdle okay question one this week comes in from Peter Hare over on LinkedIn.

0:53And Peter asks, I love the podcast, guys. Echo chambers such as those on YouTube and Meta, platforms that profit from reinforcing biases, polarizing politics and keeping people glued to their screens, chasing dopamine hits. Do you think they're ultimately harmful to society? And if so, should the government consider stepping in or is that a step too far? your thoughts. This is three quick questions. I'm going to answer them all quickly because there's three questions in one. One, is there an echo chamber on social media that reinforces biases? Yes and no. Yes, it's definitely an echo chamber. It's much worse than reinforcing biases.

1:33It makes biases more extreme because the algorithm feeds you stuff it thinks you're going to click on. And so if you think something is bad, it feeds you stuff that says, oh, you think that's bad. Look how bad it really is and then it polarizes you further and further. So one, definitely it's terrible. I don't disagree with any of that comment, but do you want to distinguish between different platforms? Because not every social media platform is created the same. Yeah, that's true. Listen, anything that's got a feed is doing that. But something like YouTube with its shorts, well, listen, we'll say this.

2:09I don't know if there's any nefarious undertones going on on any of these platforms. You'd think that if there was, then X would probably be the most nefarious of those given like Elon's very strong views on how the world should work. But they're all trying to get you to click on stuff. And so I don't know if I think one of them is not bad. Which one is not bad? Because they're not really looking at the content. In fact, one of the problems is they don't heavily moderate the content. So I don't think they just got these algorithms that say, oh, I think this is going to get you clicks and this is going to increase views.

2:46Why don't we rate worst to best? Well, I'm not really on most of them. So it's hard for me to judge except for hearsay. Why don't you rate worst to best if you're on them? Okay. In terms of what I find to be the most damaging to mental health or potentially damage to mental health, I'd probably say, so this is for me, this is for sort of court. I think it's different if you're like a 14 year old girl to a 45 year old male so i think twitter's the worst and this is not no i agree that's my tick pre and post alon i don't think a lot's made any worse i think it's pretty well i got off tiktok i said tiktok i got off twitter i never was on tiktok happily i'm happy to say oh i got off um yeah i got off twitter years ago because it's the cesspool from hell and exactly for the reasons that i just said not only does it reinforce your views but it actually just makes you more and more polarized.

3:37So I think Twitter's the worst. I think probably TikTok the next bad, just because it is controlled by the Chinese government, essentially. They can make you see a thousand Palestinian video, pro-gut Palestinian video. I think TikTok's probably second worst. So you say Twitter, I'm going to call it Twitter. I don't want to subscribe to this X stuff. It's ridiculous. So Twitter is the worst by design. TikTok might be the next worst by motivation, let's call it. Yeah, exactly. Exactly. It's the one where maybe it's not just left to the algorithm. There's a bit of stuff going on behind the scenes.

4:10What's next? Then probably Facebook Insta Tosser Coin. Yeah, I agree. They're the same. They ruin your life in different ways, basically, but about equally. Then probably YouTube, and I think LinkedIn's the best, if you call it social media. Yeah, I think that's probably right. Although, I'm not sure you can – LinkedIn is getting worse, and YouTube is not getting worse. The beauty of LinkedIn – no, I don't think so, I think LinkedIn's still got identity, like a really strong identity on there. So I think you get the odd flog on YouTube, on LinkedIn, I should say, but I think YouTube still has anonymity.

4:45So anonymous is the worst. And that's when you've got bots and all that stuff. I mean, when I was during COVID, I was posting on Twitter. You get bots coming from everywhere. I know, but there's a lot of bots on LinkedIn now and a lot of fake accounts, like tons of fake accounts appearing on LinkedIn. But it's harder to fake a LinkedIn account because you can sort of... probably it might be hardest of all to fake it to fake an authorized twitter account because you have to pay for it and provide id and i do not want to advocate for twitter but like i think linkedin you know what i've learned about this identity argument because i'm still a believer that in what you've just said i agree with you look anonymity is worse but what amazes me is how many people are prepared to be terrible human beings and whilst being identified it's like They're not ashamed of it.

5:31They're proud of it. The last part of the question is, should the government do something about it? Which is a whole separate question. So we think it does exacerbate and further polarize views in an echo chamber. We think, and then I'll give you my tip of how to avoid that because I do try to avoid that. Then the next thing is, we think that it's terrible. And then should the government do something about it? Well, I'm actually very supportive of what the government has done about it personally. They're trying to keep young people off the platforms. And beyond that - The 2016 ban you're referring to in Australia.

6:00Yeah, the under-16s ban. I'm supportive of that. And then the question is, because, you know, we don't even – like some other things have been banned as well, like Roblox, which is lots of chat in game. Like that's a form of social media. By the way, that's also terrible. Tons of hate, tons of white supremacy, tons of anti-Semitism. Is Roblox being banned from under-16? Yes. Really? That's right. Yeah. I'm shocked. I didn't realize that was happening. I don't love that. Actually, I'm against YouTube and Roblox being banned. All right. Well, I'll show you some stuff on Roblox that goes on in the chat between kids, and you can tell me how you feel after you see that because - No, I think maybe you can block the chat, but I don't think it should be blocking the game necessarily.

6:40Yeah. All right. That's fine. But the chat is, I can't believe I'm teaching about Roblox. I'm actually embarrassed. My daughter would be so proud of me. But actually, the chat is an inherent part of playing the game. It's all about interacting. I know. My kids are on Roblox, and I can hear them talking. Or maybe you make it so you can chat with people you know. It's the non-people, people you don't know chat. I think, imagine is the problem on roadblocks, not the friends chatting. And do I think they should altogether ban social media? Well, number one, I'm not the person to ask because I'm not very sociable, so I don't really go on these things.

7:08But I dream of winding back the clock. I've been raging against this hell for 10 years, and I went from being looked at with a side eye as some maniac to being, oh, yeah, that's a mainstream view now, right? Yeah, and so I wish you could roll it back, but you can't. I wish it could be moderated properly, but it can't be. Like, that's my view. And so I don't know that there's much governments can do about it other than trying to, unless they're controlled by a foreign government, which is a separate issue in my view, if they're just for-profit, greedy, big tech, I think you can make laws around the fringes of it.

7:45But I think the genie is out of the bottle, so to speak. Yeah, I think you're right. I think Peter's question is a great one. But alas, I think the ship sailed, so to speak. People often ask me, how did you keep your kids off social media? Because my son's 18, my daughter just turned 16. They don't use any social media except for watching some YouTube. Really? I don't even really love them watching YouTube shorts. They don't play Roblox? They play Roblox, but you just told me that's not social media. I don't think it is, but you said it was. So I'm using your definition. I said the chat is problematic, right?

8:19And so kind of banned them, I guess, until they were 13 and said, you're not going on it. but I also try to teach them about what my issue is with it and make them understand and I certainly don't sit over their shoulder banning them now and they're both old enough to not be caught up in this under 16 government ban and they both don't use it and I and I said to my son do you miss out on a lot by not being on insta in terms of socializing with your friends and he said maybe 10 % but like I'm okay with that like I can just make it up with you know in person and on other chats and like um and so i think explaining to kids what you're scared about in terms of the damage it causes in my case was very effective and can i just i know i've talked a lot about this we're gonna say the last line of this which is i deliberately on google because like we don't talk about google being social media but you're logged in on google google is youtube and so i deliberately um go and look at media both in the algorithms inside google and also just in general like I subscribe to the New York Times, most of which I disagree with.

9:25Can't really bring myself to look at The Guardian, but I try to go to sites where when it feeds the algorithms, it will see that I've looked at some diverse content and maybe I will see another perspective in my feed. Did you ever watch Adolescence on Netflix? What do you think? Did you watch? That probably starts with a no. On Netflix doesn't improve it. And Adolescence, way too serious for me to ever watch. I read a review on it. I understand what it's about. Mike, did you watch it? I haven't seen it either. I really want to, but haven't had a chance. It's worth watching. It's only four episodes or four one-hour sort of episodes.

10:00And obviously, it's fiction, not fact. But if you were on the fence about – and this was Instagram. If you're on the fence about social and under-16 kids using it, you'd watch that. Again, obviously not real, but could quite easily have been. And that would certainly convince you further. I think a great question, Peter. So topical and so relevant. I think the social media will be self-limiting by the next generation because fundamentally being online the entire time is ruining the youngest generation and they're realising that and Gen Z is against online dating now and all sorts of things and I think that it will be self-limiting because people won't want to do it as much and hopefully they'll overcome the addiction with one more generation.

10:42Let's hope so. My question too. Yeah and I will encourage people back in In April, I think we did a live show at Smart Company with a Q &A after, and I think we had a little bit more discussion on similar topics. So if you want to hear more on that, just go find that episode in your feed. This question comes in also on LinkedIn into my personal DMs from John Lundstra. John asks, what have you both read this year that you found particularly insightful and profound? Why was it insightful to you? And additionally, I'm curious if Adir has read any Nassim Taleb books and what he thinks of them. Over to you guys.

11:20Well, why don't you start with something you've read that was insightful and then I'll answer about Nassim Taleb. Well, I would have read probably in the last year, Hamilton Helmer, Seven Powers on your recommendation, obviously, and Acquired's recommendation, which was hugely influential in how I think about strategy. And we've talked about that a lot on the podcast. I won't recover old ground. But certainly, as we talked about, if you haven't thought about strategy and you want a book to get started, that is probably the sort of opus of how you think about strategy and competitive advantage.

11:55Yeah. I mean, look, I give frequent book reviews on this pod. I won't revisit it now. And like if someone says, do you have a book recommendation for me? Like I can't give a generic recommendation. It depends what they're interested in. I totally agree with you on Seven Powers. This is the most insightful strategy book I've ever read. But more broadly, I generally push people away from business books. Like people in business, I push them away from business books to broaden minds. I don't want to say broaden their mind. It sounds condescending. I broaden my mind by reading lots of books that aren't business books.

12:24And I find them much more thought-provoking, I suppose, generally speaking, than business books. In terms of Nassim Taleb, so watching video, I mean, I'm going to answer the question as well. But if you, so Nassim Taleb is an economist, has came up with some concepts that are very, very well known and popularized now. The most common one, I think, is probably black swan events, which is usually misunderstood. It effectively means such an improbable event that it's impossible to predict. And so people use it to talk about improbable events that you could account for, but that's not really what it means.

13:07I think his more interesting concept is the concept of anti-fragile, which is that there are things that are robust. That means if you shake them, they don't break. But what's the opposite to that? And it's something where if you shake it, it gets stronger. And so derivatives would be an example where you bet on something going down. And so I think that's a very interesting concept. If you see him speak on YouTube or something, or listen to him on a podcast, you should Listen, because the guy is very knowledgeable and quite hilarious because he has no, I don't know if I'd say self-awareness, but definitely no personal inhibitions in the way that he talks.

13:43And he certainly, he thinks he's very smart. Isn't he disliked by a lot of people? I'm not, I don't know that he's disliked, but it wouldn't surprise me if he's disliked. My understanding was he's one of the most sort of criticized people going around. Obviously, I very much love the Black Swan stuff he talks about, but he seems to cop a lot of criticism. Well, I think his general disposition and disdain for anyone that he perceives as being less intelligent than him, which I think is kind to everyone, I think that might be the reason he might be disliked. I have read two of his books, but when I say I've read them, the current crop of business books over the last 20 years are effectively an article, like enough content for an article that gets padded out into a 250-page book with a trillion examples because no one's going to pay$25 for an article.

14:33Ironically, I'd pay for a shorter book. And so I don't read his whole book. I read maybe the first three chapters of the book, and I'm like, yeah, I get it. And so that's what I'd recommend doing with Nassim Taleb's books. They're very insightful. You can read the first three or four chapters, and that'll do. The rest of it's just more of the same. So that's my view on those. It's great. I just looked at some articles about Nassim. him and there's one headline that says, Nassim Tlaid used to be my hero, but today he's just playing wrong. There's a bit of that. Well, we could all be on the receiving end.

15:03I mean, maybe not the hero part, but definitely we could all be on the receiving end. If I used to think this guy was really smart or this person was really smart, but now I think they're just wrong because we're all going to have that at some point. I think you should just watch him or listen to him. It's very amusing because you don't often have people that just have no hesitation whatsoever to come across as openly feeling that they're smarter than anybody else that they're engaging with? I think the overall sort of answer I'm making is not really answering the question specifically is just read as much as you can.

15:34So like it's unlikely to have one great book. What I find from books or from speaking to people or from watching stuff or whatever it is, often you get one or two great pieces of insight from anything. It's not like you're going to read a book and get your whole life from that book. You're going to get one thing from this book and one thing from that book and one thing from this interview and then one thing from this podcast. So I think it's about getting a wide range of educational sources or management education sources and trying to triangulate all the great pieces of advice that they're giving and adapt them to your life and your work.

16:10And I don't think it's one thing in particular. I think it's many things. So you know how I said I can't make any singular book recommendation, but if someone pushed me and said you can only pick one book that you recommend that you think will impact my life, I would say you should read a book called Parting Words. It's a book written by Benjamin Ferenz who died recently at the age of maybe 100 or some crazy number like that. And he's got a great life story. In the end, he's an American. He was the chief prosecutor at the Nuremberg trials. The guy's like five foot tall or something like that, maybe even shorter.

16:47He came up with the idea of the International Criminal Court or Court of Justice. I can't remember, which obviously hasn't gone well, but started off with good intentions. And he basically has these thoughts about – it's autobiographical with life thoughts about what it's all for, what life is all for and what he's learnt about the things that matter. And lots of people try to write those books. And like the Eddie Jakku book was super popular, right, with the happiest man on earth, I think this parting words book is probably the most life-changing slash thought-provoking book that I've read. I literally bought 40 of them and just gave them out to maybe not 40, maybe 20, and gave them out to a whole lot of people that I thought would get benefit from them.

17:34Obviously, me and Mike didn't qualify for one of those free books, clearly. Well, you tell me everything that I give you is terrible and you give it to your dad and your dad says it's terrible. Not everything. Just that Tata book. The other books have been good. Just that Tata one was horrific. I don't know if that was intentionally gay just to sabotage me. Anyway, we'll go to a super quick break. Thank you for the great question. And back with our third question in a moment.

18:00Over to you, Chief Question Asker, question number three. Great questions coming in. And as always, send them in through LinkedIn, thecontrarianspod.com and any other way you can get in touch with any of us. This question comes in from Shannon Riley. This one's been in the back catalogue for a while. We're finally getting to it. Given Adam and Adir's intimate knowledge of the M &A space, I would love to hear your thoughts publicly on the new ACCC merger mandatory notification thresholds. Do you think it's going to thwart off M &A activity given the increased ACCC oversight and hoops to go through?

18:39Thank you, Shannon. Great question and very topical question. I actually wasn't aware the exact thresholds, but there's a new Australian Managing Merger Control Regime, which actually starts 1 January 26th. I think there's a phase-in period. Basically, what the ACCC has said is that if there's a merger that involves a business with combined revenue of$200 million or more, and either the acquired business Australian revenue is$50 or more, or the transactions value is$250 million or more, then they have to, I think, notify the ACCC and effectively get some sort of, I don't know if they're going to have to get approval, we have to notify the ACCC, I think.

19:14Well, and there's a second part of it, which is if the acquirer has 500 mil of revenue, then the target only needs 10 mil of revenue. Wow, that's very low. So tiny. Yeah. So that basically, I think what previously meant is you didn't have to tell the ACCC if you're doing a merger, if you thought it didn't trigger any competition concerns. Now it looks like you actually have to tell the ACCC. In the ACCC you can then see that and go, oh, yes, I want to look at it more. Oh, no, this is okay. So I think it's to stop sort of mergers sneaking through without ACCC realizing and then having an issue because it's very hard to unscramble an egg.

19:52Yeah. I mean, I think this is crazy, maybe would be my word for it. Like, so a company, so if an international, look, I don't know, this is also for Australian companies buying other Australian companies and it's not just for international companies. Yes, no, no, it's not for, but it's ACC, so it's in Australia. It's basically if the acquirer has 200 mil of Australian revenue and the target has 50 mil of Australian revenue or the acquirer has a 500 mil of Australian revenue and the target has 10 mil, then it's compulsory that you notify the ACCC and what? I mean, look, I kind of had heard about this, but I hadn't really had a good look at it.

20:37I mean, do they have to approve it? Is it just that they can prevent it? I think that had we not have been asked this question, notwithstanding the fact that we're totally refuting this concept to where experts in M &A by my comments. But I haven't really had a good look at this and it's pretty bizarre, isn't it? I'm just having a look. Alan's one of the big law firms has a little timeline here, which is pretty helpful actually. So basically there's three phases. Yes, I know about this. You notify the ACCC. I think the ACCC then has sort of 15 days. If no issue identified, the merger sort of goes through.

21:13If it is, then you've got till day 20 to offer remedies. if that doesn't go if that isn't satisfactory you go to phase two which is 90 business days so you're sort of starting to get a bit starting to get pretty long in the tooth this stuff because that's a long that's basically four months then you have to give a notice of concerns and the parties have another chance to offer remedies and then it goes to another sort of assessment and then you have to if that doesn't get passed you've got to go to a public benefits phase so that's another 50 business days. So, sort of three different sort of steps, I guess, where you have a chance to clear the merger with ACCC, I guess.

21:50So, how in the heck is the ACCC, so based on this model, every company doing this acquisition has got this 15-day period where they're waiting for the ACCC to decide if they're going to waive it through with no concerns, correct? Yeah, yeah. And so, how the hell is the ACCC going to deal with all of this in that that 15-day period. I mean, that's no time. And so, the logical thing to do, just to, I mean, be cynical about this, the logical thing to do if you're under extreme time pressure and the 15 days is ticking and you're not going to get into it, is to flag some competition concern, to buy yourself a ton more time, isn't it?

22:28That's the logical thing to do. And then you're pushing out to like, what, 90 days pretty quickly. The HWC also talks about a pre-notification application. So you can also go to the ACCC before you officially apply. And it looks like you can get some sort of almost tacit sign off, like saying, here's what we're going to do. What's your views, ACCC? So that's probably not a bad thing. Like ultimately, this is a bit Wrath of Lena Kahn style. We saw what happened in the US when Joe Biden made, appointed Lena Kahn, who was I think about 31 at the time, the chairman of the FTC. She basically said, emergency can't happen.

23:00You almost couldn't do anything in the US. And then she probably lost every single case that she brought. Oh, she didn't lose every case. She lost a bunch of them. But I think the biggest problem, a lot of companies just didn't bother doing it. And the problem, or they did what? Like the big techs doing and sort of did an acqua hire and pretended like a$500 million acqua hire instead of a company hire. So companies eventually worked out a way around the wrath of Lena Kahn. But the problem with that is it just sends a chill down the whole industry. It means you don't have exits. So, if VCs and investors aren't getting exit, it means they don't have cash to recycle.

23:36So, they can't fund new startups. So, it actually creates a massive problem, not just for startups trying to get liquidity, whatever. It's more about new startups can't get funded because old startups can't get liquidity and investors can't invest in new startups if they've got their money tied up in old startups. So, it's a real problem when you are too strict on takeovers. And it looks at sort of the$500 million of the acquirer. The problem is if you've got a$500 million company, it means basically every$500 million, any kind of – you don't have to be that big, but any company of somewhat scale can't do an acquisition without going through this whole process now.

24:10Well, I can make this more convoluted for you. Even if your Australian revenue is 200 mil, which is not that high. It kind of puts on the verge of 200 mil AUD basically. Yep, so are we. So it's not just if the target has got 50 mil of revenue. It's also if the cumulative – I'm just reading this. if the cumulative Australian revenue from the target and any similar acquisitions in the last three years is at least 50 mil. So doesn't that mean if you pass the threshold of 50 mil in transaction A, then any future transaction, even if the revenue is$4, is going to have to be reported to the ACCC and they're going to have 15 days to review whether$4 of revenue is anti-competitive?