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Regulators will have trouble finding anti-trust cases against amazon for the same reason they'll have trouble finding against conglomerates like Berkshire Hatha
by pilom 9y ago
Regulators will have trouble finding anti-trust cases against amazon for the same reason they'll have trouble finding against conglomerates like Berkshire Hathaway. Both get their price setting ability from being conglomerates rather than monopolies. Size benefits both because one business unit can support other business units for less than their competitors pay and cross selling becomes much easier, both of which allow them to price competitors out of the market. If regulators could wrap their heads around the dangers of a conglomerate like Berkshire Hathaway, they'd be able to see the dangers of Amazon.
- sunflowerfly 9y agoAmazon does have a monopoly in ebooks. I believe they are using that market power in anti-competitive ways. This is against the Sherman act today.
- stale2002 9y agoAmazon has been around for 20 years, and the only thing it has used it market power for is to crash prices, which is good for consumers. Amazon is directly responsible for ebooks being so cheap today. The publishers and Apple wanted prices for ebooks to be high. If Amazon's monopoly power results in low prices for me forever, then I say bring it on. The ONLY purpose of monopoly laws is as a consumer protection. And if prices are permanently low, like they are in the ebook space, that is GOOD for consumers, not bad. In another 20 years, those "inevitable" price increases aren't going to come either.
- chx 9y ago> Amazon is directly responsible for ebooks being so cheap today. Blimey, here I thought ebooks are ridiculously expensive, often costing more than trade paperbacks, especially after a year or two.
- sumedh 9y agoAmazon wants lower ebook prices while book publishers want higher prices.
- lostlogin 9y agoThat's a fairly bold prediction. Why is it ok to apply your logic to Amazon but not other monopoly situations?
- stale2002 9y agoMonopolistic behavior, like buying out a competitor when there are very few players, CAN be bad for consumers, and should be stopped. But price dumping to drive out competitors is fantasy boogieman strategy that basically never works. There has to be huge barriers to entry, for it to work. Because if there aren't, then a competitor can just jump back into the market when the prices rise again. It is just not a profitable strategy for a monopoly to engage in. Price dumping just result in lower prices for consumers.
- lostlogin 9y agoPrice dumping is a great way to destroy competition and has worked effectively in the airline industry (presumably this fits into your high barrier to entry category). The ebook market is presumably easier to enter but far from easy.
- stale2002 9y agoThe airline industry is f'ed up because of geographic barriers to entry and local monopolies. IE, even though there are a dozen or so big players in the airline industry, there is often only 1 carrier going from X to Y. Other examples would include the telecom/internet cable industry, electricity/water.
- aanm1988 9y ago> There has to be huge barriers to entry, for it to work you mean like billions and billions in revenue from a variety of other sources?
- zzalpha 9y agoThe ONLY purpose of monopoly laws is as a consumer protection. No, it's about protecting the marketplace. Consumer protection is a second order effect. Here's a quote from the U.S. Supreme Court with respect to the Sherman Act: The purpose of the [Sherman] Act is not to protect businesses from the working of the market; it is to protect the public from the failure of the market. The law directs itself not against conduct which is competitive, even severely so, but against conduct which unfairly tends to destroy competition itself. As you can see, the court concluded that anti-trust law is about policing market failures, and specifically about the destruction of competition.
- aanm1988 9y agoWill you keep this attitude when you get run out of business by them?
- conanbatt 9y agoI agree partially with what you say. It actually changed my feeling towards it a bit and had to pause for a second. There's another player being squeezed in a theoretical e-book dumping. Writers. Amazon doesn't do for them what publishers do(editing to marketing), and taking out the competition could benefit consumers at the expense of the writers.
- shimon_e 9y agoThat is the definition of price dumping.
- robin_reala 9y agoOut of interest, what is Amazon’s share of the (presumably US) ebook market?
- dublinben 9y agoAs of the beginning of this year, Amazon sells over 83% of ebooks in the US. [0] This is up from only 74% in 2015. [1] [0] http://authorearnings.com/report/february-2017/ http://authorearnings.com/report/february-2017/ [1] http://authorearnings.com/report/october-2015-apple-bn-kobo-and-google-a-look-at-the-rest-of-the-ebook-market/ http://authorearnings.com/report/october-2015-apple-bn-kobo-...
- adventured 9y ago> This is against the Sherman act today. There's no such thing as what you're claiming. Whether their actions are in violation of anti-trust law is overwhelmingly a subjective finding that can't be determined ahead of time in the manner you're claiming. It's a subjective decision reached through a long, typically drawn-out government process, involving trial/s, judges, DOJ prosecutors, witnesses, etc.
- deleted 9y ago[deleted]
- avip 9y agoAddressing conglomerates requires new legislation. In Israel, such a law was passed [1] a few years ago, in an unprecedented unanimous vote (something that essentially never happened since the establishment of the state). I'd speculate the odds of passing a similar act in the US could be rounded to zero. [1] https://en.wikipedia.org/wiki/Israel%27s_Anti-Concentration_Law https://en.wikipedia.org/wiki/Israel%27s_Anti-Concentration_...
- shimon_e 9y agoThanks for the link. This was a great read. Hope other countries follow this lead.