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being a monopoly on its own is not illegal under the antitrust laws. Illegal monopolization requires both 1) monopoly power and 2) that the firm acquired, enhan
by stcredzero 7y ago
being a monopoly on its own is not illegal under the antitrust laws. Illegal monopolization requires both 1) monopoly power and 2) that the firm acquired, enhanced, or maintained that power by using exclusionary conduct.
Exclusionary conduct includes things like predatory pricing, exclusive agreements, refusing to deal with a company, most-favored nation clauses, designing your product or service in a way that excludes competition, and more types of anticompetitive behavior.
How is the above different from "having a moat?" Isn't any company that starts and maintains a curated "ecosystem" engaging in some of these behaviors? Isn't Apple guilty of refusing to deal with certain companies and designing their product or service in a way that excludes competition? For that matter, aren't most of the tech giants?
- indopedia 7y agoyes her definitions are very liberal, in more ways than one
- pessimizer 7y agoIt's not at all. "Having a moat" specifically designates anticompetitive activity that can only be engaged in by a huge player in a particular market. It has no other meaning.
- DenisM 7y agoA company that has a monopoly has to follow more rules than other companies because it can do more damage. Certain kind of moat-building is severely restricted for them, such as exclusive contracts or deliberate technology lock-in, while other methods are still legal, such as brand recognition or a rich partner ecosystem or simply a superior product. >Apple guilty of refusing to deal with certain companies Apple does not have anywhere near a monopoly in any of the markets they are in [+], hence the anti-trust rules do not apply to them. By contrast these rules do apply to Microsoft and Google, for example. [+] in the eyes of the law monopoly means control of a market, and market is comprised of interchangeable goods. In this case iPhones and Androids are interchangeable - a consumer is free to buy a Samsung or an Apple phone and neither company is running the risk of excluding the other. Hence the consumer is in no danger of being deprived of choice, and there is no monopoly.
- stcredzero 7y agoApple does not have anywhere near a monopoly in any of the markets they are in [+], hence the anti-trust rules do not apply to them. Having a "moat:" All of the benefits of being a Monopoly, with none of the penalties!
- ggg3 7y agoYes. antitrust law is exactly about having a moat (exclusionary conduct) and more than some pct of the market (monopoly power).