5 ms·

Can someone articulate the theory of harm here? How would consumers be worse off than in the counterfactual world where this practice is banned?

by oli5679 10y ago

JoBrad 10y ago
I thought the reasons in the article were good, but here's a concrete one: Comcast was counting data used for Netflix against your data cap, but they were not counting data used for their own streaming video. Keeping with the concept that an ISP is similar to an electric company, this would be like your power company charging you to use lamps from Company A but not lamps made by Company B (whom they've presumably partnered with). This is incredibly anticompetitive, and especially harms small businesses.
- oli5679 10y ago
  Antitrust is designed to protect consumers, not downstream firms. Restraints on trade are only illegal if they are 'unreasonable' in the sense that they are viewed as likely to lead to long-run harm for consumers. To some extent, it is a company's job to 'harm' suppliers, sellers and competitors. It may well be possible to tell a compelling story that this is an unreasonable constraint (I'm not an expert on US case law). I just find it interesting that so many complaints on the topic fail to directly articulate the theory of harm for consumers. https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/antitrust-laws https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
  - JoBrad 10y ago
    Protecting downstream firms (in aggregate), also protects consumers. From the site you linked to: "to protect the process of competition for the benefit of consumers, making sure there are strong incentives for businesses to operate efficiently, keep prices down, and keep quality up."
    - oli5679 10y ago
      Ok so explain that process without hand waving then! There are plenty of cases of bundling that are 1) Allowed to operate under scrutiny of competition authorities 2) Can be theoretically/empirically justified on efficiency grounds. The emphasis is on you to demonstrate that this is not the case if you are arguing that the constraint is unreasonable. This is the basis of modern antitrust enforcement. One possible efficiency justification for bundling. http://s3.amazonaws.com/academia.edu.documents/4170761/10.1.1.83.655.pdf?AWSAccessKeyId=AKIAJ56TQJRTWSMTNPEA&Expires=1479588902&Signature=7c9kWZ2gsh4GEKbVpSA1V2rYyy4%3D&response-content-disposition=inline%3B%20filename%3DBundling_information_goods_Pricing_profi.pdf http://s3.amazonaws.com/academia.edu.documents/4170761/10.1....

Can someone articulate the theory of harm here? How would consumers be worse off than in the counterfactual world where this practice is banned?

by oli5679 10y ago

Can someone articulate the theory of harm here? How would consumers be worse off than in the counterfactual world where this practice is banned?

JoBrad 10y ago

I thought the reasons in the article were good, but here's a concrete one: Comcast was counting data used for Netflix against your data cap, but they were not counting data used for their own streaming video. Keeping with the concept that an ISP is similar to an electric company, this would be like your power company charging you to use lamps from Company A but not lamps made by Company B (whom they've presumably partnered with). This is incredibly anticompetitive, and especially harms small businesses.

oli5679 10y ago
Antitrust is designed to protect consumers, not downstream firms. Restraints on trade are only illegal if they are 'unreasonable' in the sense that they are viewed as likely to lead to long-run harm for consumers. To some extent, it is a company's job to 'harm' suppliers, sellers and competitors. It may well be possible to tell a compelling story that this is an unreasonable constraint (I'm not an expert on US case law). I just find it interesting that so many complaints on the topic fail to directly articulate the theory of harm for consumers. https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/antitrust-laws https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
- JoBrad 10y ago
  Protecting downstream firms (in aggregate), also protects consumers. From the site you linked to: "to protect the process of competition for the benefit of consumers, making sure there are strong incentives for businesses to operate efficiently, keep prices down, and keep quality up."
  - oli5679 10y ago
    Ok so explain that process without hand waving then! There are plenty of cases of bundling that are 1) Allowed to operate under scrutiny of competition authorities 2) Can be theoretically/empirically justified on efficiency grounds. The emphasis is on you to demonstrate that this is not the case if you are arguing that the constraint is unreasonable. This is the basis of modern antitrust enforcement. One possible efficiency justification for bundling. http://s3.amazonaws.com/academia.edu.documents/4170761/10.1.1.83.655.pdf?AWSAccessKeyId=AKIAJ56TQJRTWSMTNPEA&Expires=1479588902&Signature=7c9kWZ2gsh4GEKbVpSA1V2rYyy4%3D&response-content-disposition=inline%3B%20filename%3DBundling_information_goods_Pricing_profi.pdf http://s3.amazonaws.com/academia.edu.documents/4170761/10.1....