3 ms·
Yup. Anti-trust legislation has lost its teeth. Analyzing monopolies based on whether there is harm for the individual consumer is completely insufficient for
by nabnob 8y ago
Yup. Anti-trust legislation has lost its teeth.
Analyzing monopolies based on whether there is harm for the individual consumer is completely insufficient for determining whether a company is a monopoly. From "Amazon's Antitrust Paradox", in the Yale Law Journal:
>This Note argues that the current framework in antitrust—specifically its pegging competition to “consumer welfare,” defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output. Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational—even as existing doctrine treats it as irrational and therefore implausible. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors.
https://www.yalelawjournal.org/note/amazons-antitrust-paradox https://www.yalelawjournal.org/note/amazons-antitrust-parado...
- pitaj 8y agoIf a monopoly exists, and doesn't harm the consumer, what's the issue?
- shadofx 8y agoTracking users and showing ads is blatant harm. Controlling the market and raising costs for sellers results in those costs being passed on to the buyer, causing indirect harm.
- pitaj 8y agoYes, a monopoly which harms consumers is bad. You didn't at all answer my question.
- kd5bjo 8y agoLike any monoculture, markets based on a monopoly are brittle. It takes time for courts to process complaints or for new companies to get started; if the only entity serving a market changes its behavior for any reason, it can shock the entire system and do great harm while our correction mechanisms work to alleviate the problem. You see this in the job market all the time: a local factory closes and puts everyone in town out of work.
- amelius 8y agoTwo points: • You don't know if it doesn't harm the consumer, because if there were more players on the market, the consumer could (possibly) have more choice and access to better products. • The monopoly could harm the consumer in the future. At that point it may be more difficult for the market to bootstrap competing products (especially if the monopoly controls the entire supply chain). This is a bad situation, even if it doesn't harm consumers now.
- pitaj 8y agoYou can know if consumers are dissatisfied, which is a sign of market failure. It's impossible to prove that harm doesn't exist, because you can't prove a negative. If the monopoly does start substantially harming consumers, then I'd say that's when action should be taken, not before the market has a chance to respond.