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Why is that a more appropriate term for behaviors that reduce competition?

kevinsundar 7y ago
In your opinion why are behaviors that reduce competition bad? If the answer is it harms consumers... Amazon isn't hurting consumers so you should be okay with it? Amazon got this big because no one wanted to be as customer obsessed as Amazon. Not because they stifled competition.
- losteric 7y ago
  If they are reducing competition, they are hurting consumers. Competition breeds innovation - lower prices, better customer service, new ways of doing things... none of those things happen without competition, because there is no incentive to improve. Look at Comcast / AT&T regional monopolies, which started out promising lower prices until they cornered markets then started raising prices while lowering service quality... or, even before that, Bell Labs suppressed inventions like early hard drives out of fear it would hurt their telephone monopoly.
  - kevinsundar 7y ago
    "Competition breeds innovation - lower prices, better customer service, new ways of doing things... none of those things happen without competition, because there is no incentive to improve." Those are the three things Amazon has done amazing at (lower prices, better customer service, new ways of doing things). Isn't that a paradox? You take the stance that only competition can breed this but in this case Amazon has done those things while still reducing competition. In fact, it is helping consumers that has led to people buying things on Amazon and it getting this big. Not the other way around. Is it that people are afraid that at some point Amazon might stop doing these things? I agree that if what amazon is doing has lead to higher prices, worse customer service, and stagnant methods of doing things that would be bad. But thats not whats happening here.
    - adventured 7y ago
      > You take the stance that only competition can breed this but in this case reducing competition has breed these points too. It's neither. It wasn't active competition (or the lack of it, or it being reduced) that generated that outcome. It was Bezos (just as it was Sam Walton before him), he dictated that approach as the basis for Amazon's best likely ability to reach massive scale. There were no possible alternatives, if the goal was to get very large as a retailer. Amazon is Jeff Bezos, he has raised it like a child from day one, totally in control of what it is and what it became. Bezos was facing a scenario of: approach it that way, or Walmart will take care of it for you eventually and make you redundant. More precisely it was Bezos looking at the future and having to compete with a Walmart that fully awakened to online retailing. In that future forecast sense it was motivated by the threat / fear of competition that would inevitably crush a smaller Amazon. And if it wasn't Amazon or Walmart, someone would have done it most likely, Bezos surely understood that; that the Internet would make a mega platform like Amazon possible. For another example of this premise in action: Microsoft wasn't so wildly aggressive and competitive due to the marketplace, or other competition or animal spirits in the water, it was solely due to the personality of Bill Gates. It mirrored his personality, aggressive nature and competitiveness. Gates ultimately made Microsoft in his image (that earlier version of Microsoft anyway). He dictated what it became, he controlled the growth and nature of its culture (and once you set that in order, it flows in that mold forward, a persistent mimic, until something breaks it).
      - kevinsundar 7y ago
        This is my point exactly. Someone was going to do it. Amazon did it. So if today its Amazon and tomorrow someone else, why be up in arms about it?
        adventured 7y ago
        > So if today its Amazon and tomorrow someone else, why be up in arms about it? Because - I believe - people are overwhelmingly reactionary, easy to excite and short-term focused. Microsoft was the end of the world. Google is the end of the world. IBM before them. Yesterday Walmart was the destroyer of worlds that was going to kill every small business in every town in America. Countless articles were written for a decade espousing that as fact, inevitable, unstoppable. They were pure evil, everyone knew it. Nobody could compete with them. That reactionary emotionalism against The Corporate Overlords, is now retrained on Amazon as the destroyer of worlds, the evil entity that will crush everyone. Tomorrow it will be someone else. The most interesting story about Amazon - which is being almost universally ignored - is that the growth in their retail business has already mostly stopped (some shareholders are finally noticing). In the next few years that growth will continue to trend toward between zero and low single digits. The mighty retail conquerer of worlds is running out of retail growth and mostly that is being ignored because it doesn't bolster the story of the moment that Amazon is going to eat everything.
  - dodobirdlord 7y ago
    > If they are reducing competition, they are hurting consumers. Not if they are reducing competition by virtue of causing less-competitive businesses to lose market share. I feel like there's some cart-before-horse going on in your perspective on this. Competition is wonderful. Competition is amazing. Competition is good for consumers because competitive businesses drive less competitive businesses out of business. Amazon is a perfect example of everything we want to see, panning out in just the way we want. Amazon has materially raised the bar of customer satisfaction, and if Amazon's competition wants to stay in business, they will have to do even better. I look forward to seeing what they come up with!
malandrew 7y ago
If a company is orders of magnitudes better at providing value for consumers such that competitors can't even keep up and go out of business, is that anti-trust behavior?
Nasrudith 7y ago
If sub-divided into how they do it perhaps? One would be "things that anyone with enough scale and willingness to take low margins could technically do" as opposed "things that serve only to lock out competition". For the later if there is a proprietary format on something major and it shuts out competition for no benefit like say "screws only they manufacture and cannot easily take other standards" that would be "anti-competitive" as it does nothing to compete better. For the previous say "better infastructure to lower per unit cost" and producing at an industry standard percentage profit margin could be called hypercompetitive as it does nothing to stop those with sufficient capital from scaling up. In practice however both are classically anti-competitive. The later would by definition reduce the number of potential competitors to those with more resources. There could be some arguements about how they are relatively bad they are and should be treated. Even if both should be "illegal" they are two different types like say arson and murder.

In your opinion why are behaviors that reduce competition bad? If the answer is it harms consumers... Amazon isn't hurting consumers so you should be okay with it? Amazon got this big because no one wanted to be as customer obsessed as Amazon. Not because they stifled competition.

losteric 7y ago
If they are reducing competition, they are hurting consumers. Competition breeds innovation - lower prices, better customer service, new ways of doing things... none of those things happen without competition, because there is no incentive to improve. Look at Comcast / AT&T regional monopolies, which started out promising lower prices until they cornered markets then started raising prices while lowering service quality... or, even before that, Bell Labs suppressed inventions like early hard drives out of fear it would hurt their telephone monopoly.
- kevinsundar 7y ago
  "Competition breeds innovation - lower prices, better customer service, new ways of doing things... none of those things happen without competition, because there is no incentive to improve." Those are the three things Amazon has done amazing at (lower prices, better customer service, new ways of doing things). Isn't that a paradox? You take the stance that only competition can breed this but in this case Amazon has done those things while still reducing competition. In fact, it is helping consumers that has led to people buying things on Amazon and it getting this big. Not the other way around. Is it that people are afraid that at some point Amazon might stop doing these things? I agree that if what amazon is doing has lead to higher prices, worse customer service, and stagnant methods of doing things that would be bad. But thats not whats happening here.
  - adventured 7y ago
    > You take the stance that only competition can breed this but in this case reducing competition has breed these points too. It's neither. It wasn't active competition (or the lack of it, or it being reduced) that generated that outcome. It was Bezos (just as it was Sam Walton before him), he dictated that approach as the basis for Amazon's best likely ability to reach massive scale. There were no possible alternatives, if the goal was to get very large as a retailer. Amazon is Jeff Bezos, he has raised it like a child from day one, totally in control of what it is and what it became. Bezos was facing a scenario of: approach it that way, or Walmart will take care of it for you eventually and make you redundant. More precisely it was Bezos looking at the future and having to compete with a Walmart that fully awakened to online retailing. In that future forecast sense it was motivated by the threat / fear of competition that would inevitably crush a smaller Amazon. And if it wasn't Amazon or Walmart, someone would have done it most likely, Bezos surely understood that; that the Internet would make a mega platform like Amazon possible. For another example of this premise in action: Microsoft wasn't so wildly aggressive and competitive due to the marketplace, or other competition or animal spirits in the water, it was solely due to the personality of Bill Gates. It mirrored his personality, aggressive nature and competitiveness. Gates ultimately made Microsoft in his image (that earlier version of Microsoft anyway). He dictated what it became, he controlled the growth and nature of its culture (and once you set that in order, it flows in that mold forward, a persistent mimic, until something breaks it).
    - kevinsundar 7y ago
      This is my point exactly. Someone was going to do it. Amazon did it. So if today its Amazon and tomorrow someone else, why be up in arms about it?
      - adventured 7y ago
        > So if today its Amazon and tomorrow someone else, why be up in arms about it? Because - I believe - people are overwhelmingly reactionary, easy to excite and short-term focused. Microsoft was the end of the world. Google is the end of the world. IBM before them. Yesterday Walmart was the destroyer of worlds that was going to kill every small business in every town in America. Countless articles were written for a decade espousing that as fact, inevitable, unstoppable. They were pure evil, everyone knew it. Nobody could compete with them. That reactionary emotionalism against The Corporate Overlords, is now retrained on Amazon as the destroyer of worlds, the evil entity that will crush everyone. Tomorrow it will be someone else. The most interesting story about Amazon - which is being almost universally ignored - is that the growth in their retail business has already mostly stopped (some shareholders are finally noticing). In the next few years that growth will continue to trend toward between zero and low single digits. The mighty retail conquerer of worlds is running out of retail growth and mostly that is being ignored because it doesn't bolster the story of the moment that Amazon is going to eat everything.
- dodobirdlord 7y ago
  > If they are reducing competition, they are hurting consumers. Not if they are reducing competition by virtue of causing less-competitive businesses to lose market share. I feel like there's some cart-before-horse going on in your perspective on this. Competition is wonderful. Competition is amazing. Competition is good for consumers because competitive businesses drive less competitive businesses out of business. Amazon is a perfect example of everything we want to see, panning out in just the way we want. Amazon has materially raised the bar of customer satisfaction, and if Amazon's competition wants to stay in business, they will have to do even better. I look forward to seeing what they come up with!

malandrew 7y ago

If a company is orders of magnitudes better at providing value for consumers such that competitors can't even keep up and go out of business, is that anti-trust behavior?

Nasrudith 7y ago

If sub-divided into how they do it perhaps? One would be "things that anyone with enough scale and willingness to take low margins could technically do" as opposed "things that serve only to lock out competition". For the later if there is a proprietary format on something major and it shuts out competition for no benefit like say "screws only they manufacture and cannot easily take other standards" that would be "anti-competitive" as it does nothing to compete better. For the previous say "better infastructure to lower per unit cost" and producing at an industry standard percentage profit margin could be called hypercompetitive as it does nothing to stop those with sufficient capital from scaling up. In practice however both are classically anti-competitive. The later would by definition reduce the number of potential competitors to those with more resources. There could be some arguements about how they are relatively bad they are and should be treated. Even if both should be "illegal" they are two different types like say arson and murder.