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I think Amazon illustrates that our understanding of 'monopoly' is lacking. It is not just a company which owns 95%+ of the market which is dangerous, but just

I think Amazon illustrates that our understanding of 'monopoly' is lacking. It is not just a company which owns 95%+ of the market which is dangerous, but just normal old large companies that own 20% or 40% or so of markets. Oligopolies have their own effect on markets - the econ 101 explanation is a kinked demand model where there is no incentive for the companies to lower their price.

icebraining 9y ago
Whose understanding of monopoly? For example, the EU antitrust law cares about whether the firm is dominant in the market - a large share is only one way to show that. (And it's not conclusive evidence! A firm can still dispute that they have dominance, despite the large share)
- frgtpsswrdlame 9y ago
  The understanding of US law and those who enforce it. We've dramatically weakened antitrust enforcement in the past 50-60 years.
- emodendroket 9y ago
  US antitrust enforcement has basically settled on "if it's not directly leading to higher costs for consumers leave it alone." This is kind of Matt Stoller's signature issue that he's always writing about.
  - echosmith 9y ago
    I actually like that definition. If it's causing harm to customers - prove it. Efficiency is not a crime.
    - emodendroket 9y ago
      The problem with it is twofold: one, it ignores indirect harms to consumers from monopoly power (for instance, maybe they're not engaging in all-out price gouging but they are keeping competitors or new services out of the market). Two, it ignores other externalities, like regulatory capture or systemic risk, that result from having huge business interests.
whoisjuan 9y ago
"It is not just a company which owns 95%+" Lol! What? Where did you get that ridiculous number form?
- rossdavidh 9y ago
  "A situation, by legal privilege or other agreement, in which solely one party (company, cartel etc.) exclusively provides a particular product or service, dominating that market and generally exerting powerful control over it." That was wiktionary.org, but it's not too different from other dictionary's definition, I bet, and that's because it's what most English-speaking people mean when they say "monopoly". That doesn't mean it's the right way to think about it, of course, but it's not uncommon, and the meaning of an English language word is defined by how the typical native speaker uses it.
Tyrek 9y ago
A very old, classical definition of monopoly is >20% market share. The more modern 95+% definition is a fairly new concept that's emerged from trying to explain Economics to the masses.

icebraining 9y ago

Whose understanding of monopoly? For example, the EU antitrust law cares about whether the firm is dominant in the market - a large share is only one way to show that. (And it's not conclusive evidence! A firm can still dispute that they have dominance, despite the large share)

frgtpsswrdlame 9y ago
The understanding of US law and those who enforce it. We've dramatically weakened antitrust enforcement in the past 50-60 years.
emodendroket 9y ago
US antitrust enforcement has basically settled on "if it's not directly leading to higher costs for consumers leave it alone." This is kind of Matt Stoller's signature issue that he's always writing about.
- echosmith 9y ago
  I actually like that definition. If it's causing harm to customers - prove it. Efficiency is not a crime.
  - emodendroket 9y ago
    The problem with it is twofold: one, it ignores indirect harms to consumers from monopoly power (for instance, maybe they're not engaging in all-out price gouging but they are keeping competitors or new services out of the market). Two, it ignores other externalities, like regulatory capture or systemic risk, that result from having huge business interests.

whoisjuan 9y ago

"It is not just a company which owns 95%+" Lol! What? Where did you get that ridiculous number form?

rossdavidh 9y ago
"A situation, by legal privilege or other agreement, in which solely one party (company, cartel etc.) exclusively provides a particular product or service, dominating that market and generally exerting powerful control over it." That was wiktionary.org, but it's not too different from other dictionary's definition, I bet, and that's because it's what most English-speaking people mean when they say "monopoly". That doesn't mean it's the right way to think about it, of course, but it's not uncommon, and the meaning of an English language word is defined by how the typical native speaker uses it.

Tyrek 9y ago

A very old, classical definition of monopoly is >20% market share. The more modern 95+% definition is a fairly new concept that's emerged from trying to explain Economics to the masses.