7 ms·

The line is not 'you are not allowed to ever do this' but 'this particular instance is hurting competition'. If the vast majority of people shopped at one supe

The line is not 'you are not allowed to ever do this' but 'this particular instance is hurting competition'. If the vast majority of people shopped at one supermarket, and that supermarket's most popular products were largely it's own brand products, and most industries that competed with such products had largely shrunk to providing specialty alternatives or cheap knockoffs because it was so hard to compete, then there might be a case for breaking that supermarket up.

mal10c 7y ago
So not really a leading question, just curious... why shouldn't I be OK with buying the cheap mega-supermarket brand product? As the consumer, I just want a cheap price - I personally don't really care where the money is going. If small companies can't produce a less expensive alternative, then won't breaking up the larger company just increase costs to the consumer? Thanks for your thoughts.
- damnyou 7y ago
  You as the consumer aren't the only entity that matters. The long term health of communities might not be aligned with short term consumer benefit.
- jakelazaroff 7y ago
  To answer with another question: how can you tell the difference between big pseudo-monopolies truly providing the best product or service vs. smaller companies being unable to enter the market with a better one because a big company has locked them out?
  - workblood 7y ago
    I’m sorry, can you clarify what you mean by pseudo-monopoly? It’s not a term of art and I’m trying to understand your argument.
    - jakelazaroff 7y ago
      Maybe pseudo-monopoly was the wrong term… I'm basically saying that if a company has enough market or lobbying power, it can distort the market by blocking entrants who might make better/cheaper products or services. For example, ISPs lobbying to ban municipal competitors.
- deleted 7y ago
  [deleted]
- rapind 7y ago
  Ultimately if all those other brands go out of business, the cheaper option may no longer be that cheap.
  - bduerst 7y ago
    This comes up with predatory pricing antitrust claims, which are complex in themselves, but you shouldn't punish someone or an organization for behavior that they only have the potential to do, but have not done.
    - rapind 7y ago
      I think it's destined to happen when there is less competition. I don't think of it as punishment, but as prevention. Even if we assume a company was altruistic and kept prices artificially low, the lack of competition would at least prevent a product from getting cheaper faster due to less players innovating... and we wouldn't even be able to measure what we're missing out on.
- GuiA 7y ago
  Yes, and effective regulation is precisely about preventing broader emergent patterns that harm innovation, competition, and society as a whole as a result of the (inevitably) short sighted, individual actions of consumers who indeed often only care about the cheapest prices.
- CharlesColeman 7y ago
  > why shouldn't I be OK with buying the cheap mega-supermarket brand product Just some random thoughts, in different contexts: 1. Buying the cheap mega-supermarket can lead to non-obvious degradations in your community (e.g. you find yourself in a news desert because the local paper went bankrupt, following the closure of the local stores who advertised there). 2. Competition keeps competitors honest, but if one company gets too much of a lead, it's competitors give up leaving fewer market-based checks on its behavior (even if it was fantastic and awesome in the first place). Eventually prices will go up or quality down, as the never-ending quest to provide increasing shareholder value continues. 3. The real costs may not be reflected in the sticker price. For instance, you pay for Facebook and Google with your data and privacy, not your money. A competitor that directly charges you $20/year may actually be a better deal.
CWuestefeld 7y ago
I don't think they can specifically address a single entity like that: the laws have to be applicable across the board. I believe otherwise it would be the constitutionally-forbidden "Bill of Attainder".
- LargeWu 7y ago
  It would only be a Bill of Attainder if it targeted and punished specific entities. From what I can gather, this just sets parameters. It would likely fall under our existing antitrust framework.
  - CWuestefeld 7y ago
    if it targeted and punished specific entities Ummm... that's exactly what I said. In response to "The line is not 'you are not allowed to ever do this' but 'this particular instance is hurting competition'." I replied "I don't think they can specifically address a single entity like that: the laws have to be applicable across the board"
    - deleted 7y ago
      [deleted]
- deleted 7y ago
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novok 7y ago
Then it should apply to walmart, target & costco then, which many of the same arguments applied now and 30 years ago and have a similar range of market cap. But these regulations never materialized.
- smhenderson 7y ago
  I don't disagree with you but I think the argument there is that those three compete with each other so no one has absolute dominance over the market place. Oligopolies aren't much better for the public than monopolies but they seem to get a lot less scrutiny from regulators. I am really not a fan of Walmart but I do shop at Costco and Target occasionally and I try to check both when making meaningful household purchases to see which one's cheaper. At some level, they do have to compete with each other on price and service.
  - novok 7y ago
    Thing is the big tech cos also compete with each other. You can online shop at amazon, walmart, ebay and many other small online shops. Same with advertising. You can advertise at google, fb, twitter and a bunch of other small advertising providers. Yes they distort their respective markets and put pressure on suppliers, but so does walmart and other big retailers. So if the law comes into place, it shouldn’t be limited to the online space
ConceitedCode 7y ago
That doesn't strike me as a very clear line. Let's change the scale a bit instead of nationally / internationally. If there's only 1 Walmart store in a small town (no competitors near by), does that mean they can't sell their house brand there? What about a Walmart in a town with a Target and 80% of the sales are at Walmart? Can Target sell their house brand if Walmart can't in this scenario?
- samsonradu 7y ago
  A town is more open to competition, anytime a third player can open up a store with relatively small investment. Meanwhile to take on a dominant player like Amazon is extremely hard. I believe the line is drawn at ‘large-scale winner-takes-all players’. It doesn’t necessarily have to be fair but it is supposed to benefit the entire economy. As long as there’s a relative balance between the economical power of competitors no measures are required.
  - ConceitedCode 7y ago
    > A town is more open to competition, anytime a third player can open up a store with relatively small investment. Meanwhile to take on a dominant player like Amazon is extremely hard. You think it's easier to open a physical store to compete with Walmart than to spin up an ecommerce site to compete with Amazon?
    - exergy 7y ago
      For sure. There are so many more parameters to physical store. Proximity is a HUGE one. Quality of service. Specific items that they stock. These kinds of things allow smaller stores to exist in my small town even while there is a huge supermarket nearby. On the other hand, I do not use ANY one-stop site for online shopping outside of Amazon.
    - wyre 7y ago
      A physical store, at a minimum, has built in advertising based on location. Budget in local advertising and people will shop there if prices, service, location, and the products are good. I couldnt even imagine how a new online store would be able to start competing with Amazon. There are existing webstores that over the years have lost a lot of business to amazon (Newegg, Sweetwater, B&H Photo, etc). Even local stores are losing business to amazon.
jhbadger 7y ago
This situation isn't just hypothetical. In the 1940s the grocery chain A&P was the largest retailer of any sort in the US and there was a real concern that they were anti-competitive because they owned a number of food processing plants in addition to their stores. The Federal government brought suit but didn't succeed in breaking up A&P. Ultimately, of course, A&P didn't succeed in monopolizing groceries, and even went bankrupt a decade or so ago, but they were the WalMart of their time.
fbonetti 7y ago
It's funny that you mention supermarkets, because the A&P grocery store chain was from 1915 to 1975 the largest grocery retailer in the US. At its peak in the 1940s, A&P captured 10% of total US grocery spend. It too came under scrutiny and was accused of being a "monopoly", as its cheap prices forced smaller competitors out of business. And yet despite being a "monopoly", it began to decline in the 1950s when it failed to keep pace with competitors that opened larger supermarkets with more modern features demanded by customers. It continued its slow decline until it completely shuttered in 2015. A&P was once as recognizable as Google or Walmart is today, and yet most people have never even heard of A&P. Sears too once had a "monopoly" on mail order products. People marveled at how amazing it was that you could order a product, mail in a check, and receive the product six weeks later, all without stepping into a store! Now they're bankrupt. The whole concept of a business "controlling" the market is ridiculous. Amazon operates in a highly competitive, low margin industry that requires a tremendous amount of logistical overhead to function. The minute they stop innovating, they're toast.
- CharlesColeman 7y ago
  So if we just let the market work, I can look forward to finally getting out from under the thumb of FAANG when I'm retired?
  - jaredklewis 7y ago
    What exactly is your complaint against FAANG? You are free to buy a Linux or windows laptop, not create a Facebook account, subscribe to Hulu, not Shop amazon, use fast mail etc... Hard for me to get too worked up about tech giants seeing as using them is optional and alternatives abound. I don’t see how my life is made worse if someone else buys a MacBook. None of the things that do irk me about tech companies (security breaches, unethical advertising, spread of fake news, and so on) would be addressed in any way by a breakup.
    - majewsky 7y ago
      > You are free to buy a Linux or windows laptop, not create a Facebook account, subscribe to Hulu, not Shop amazon, use fast mail etc... Try participating in modern society without an Android or Apple smartphone or tablet. It's still possible, but becoming more difficult each day. (And to clarify, I don't mean "leave your phone at home today". I mean not owning a smartphone or tablet at all.)

mal10c 7y ago

So not really a leading question, just curious... why shouldn't I be OK with buying the cheap mega-supermarket brand product? As the consumer, I just want a cheap price - I personally don't really care where the money is going. If small companies can't produce a less expensive alternative, then won't breaking up the larger company just increase costs to the consumer? Thanks for your thoughts.

damnyou 7y ago
You as the consumer aren't the only entity that matters. The long term health of communities might not be aligned with short term consumer benefit.
jakelazaroff 7y ago
To answer with another question: how can you tell the difference between big pseudo-monopolies truly providing the best product or service vs. smaller companies being unable to enter the market with a better one because a big company has locked them out?
- workblood 7y ago
  I’m sorry, can you clarify what you mean by pseudo-monopoly? It’s not a term of art and I’m trying to understand your argument.
  - jakelazaroff 7y ago
    Maybe pseudo-monopoly was the wrong term… I'm basically saying that if a company has enough market or lobbying power, it can distort the market by blocking entrants who might make better/cheaper products or services. For example, ISPs lobbying to ban municipal competitors.
deleted 7y ago
[deleted]
rapind 7y ago
Ultimately if all those other brands go out of business, the cheaper option may no longer be that cheap.
- bduerst 7y ago
  This comes up with predatory pricing antitrust claims, which are complex in themselves, but you shouldn't punish someone or an organization for behavior that they only have the potential to do, but have not done.
  - rapind 7y ago
    I think it's destined to happen when there is less competition. I don't think of it as punishment, but as prevention. Even if we assume a company was altruistic and kept prices artificially low, the lack of competition would at least prevent a product from getting cheaper faster due to less players innovating... and we wouldn't even be able to measure what we're missing out on.
GuiA 7y ago
Yes, and effective regulation is precisely about preventing broader emergent patterns that harm innovation, competition, and society as a whole as a result of the (inevitably) short sighted, individual actions of consumers who indeed often only care about the cheapest prices.
CharlesColeman 7y ago
> why shouldn't I be OK with buying the cheap mega-supermarket brand product Just some random thoughts, in different contexts: 1. Buying the cheap mega-supermarket can lead to non-obvious degradations in your community (e.g. you find yourself in a news desert because the local paper went bankrupt, following the closure of the local stores who advertised there). 2. Competition keeps competitors honest, but if one company gets too much of a lead, it's competitors give up leaving fewer market-based checks on its behavior (even if it was fantastic and awesome in the first place). Eventually prices will go up or quality down, as the never-ending quest to provide increasing shareholder value continues. 3. The real costs may not be reflected in the sticker price. For instance, you pay for Facebook and Google with your data and privacy, not your money. A competitor that directly charges you $20/year may actually be a better deal.

CWuestefeld 7y ago

I don't think they can specifically address a single entity like that: the laws have to be applicable across the board. I believe otherwise it would be the constitutionally-forbidden "Bill of Attainder".

LargeWu 7y ago
It would only be a Bill of Attainder if it targeted and punished specific entities. From what I can gather, this just sets parameters. It would likely fall under our existing antitrust framework.
- CWuestefeld 7y ago
  if it targeted and punished specific entities Ummm... that's exactly what I said. In response to "The line is not 'you are not allowed to ever do this' but 'this particular instance is hurting competition'." I replied "I don't think they can specifically address a single entity like that: the laws have to be applicable across the board"
  - deleted 7y ago
    [deleted]
deleted 7y ago
[deleted]

novok 7y ago

Then it should apply to walmart, target & costco then, which many of the same arguments applied now and 30 years ago and have a similar range of market cap. But these regulations never materialized.

smhenderson 7y ago
I don't disagree with you but I think the argument there is that those three compete with each other so no one has absolute dominance over the market place. Oligopolies aren't much better for the public than monopolies but they seem to get a lot less scrutiny from regulators. I am really not a fan of Walmart but I do shop at Costco and Target occasionally and I try to check both when making meaningful household purchases to see which one's cheaper. At some level, they do have to compete with each other on price and service.
- novok 7y ago
  Thing is the big tech cos also compete with each other. You can online shop at amazon, walmart, ebay and many other small online shops. Same with advertising. You can advertise at google, fb, twitter and a bunch of other small advertising providers. Yes they distort their respective markets and put pressure on suppliers, but so does walmart and other big retailers. So if the law comes into place, it shouldn’t be limited to the online space

ConceitedCode 7y ago

That doesn't strike me as a very clear line. Let's change the scale a bit instead of nationally / internationally. If there's only 1 Walmart store in a small town (no competitors near by), does that mean they can't sell their house brand there? What about a Walmart in a town with a Target and 80% of the sales are at Walmart? Can Target sell their house brand if Walmart can't in this scenario?

samsonradu 7y ago
A town is more open to competition, anytime a third player can open up a store with relatively small investment. Meanwhile to take on a dominant player like Amazon is extremely hard. I believe the line is drawn at ‘large-scale winner-takes-all players’. It doesn’t necessarily have to be fair but it is supposed to benefit the entire economy. As long as there’s a relative balance between the economical power of competitors no measures are required.
- ConceitedCode 7y ago
  > A town is more open to competition, anytime a third player can open up a store with relatively small investment. Meanwhile to take on a dominant player like Amazon is extremely hard. You think it's easier to open a physical store to compete with Walmart than to spin up an ecommerce site to compete with Amazon?
  - exergy 7y ago
    For sure. There are so many more parameters to physical store. Proximity is a HUGE one. Quality of service. Specific items that they stock. These kinds of things allow smaller stores to exist in my small town even while there is a huge supermarket nearby. On the other hand, I do not use ANY one-stop site for online shopping outside of Amazon.
  - wyre 7y ago
    A physical store, at a minimum, has built in advertising based on location. Budget in local advertising and people will shop there if prices, service, location, and the products are good. I couldnt even imagine how a new online store would be able to start competing with Amazon. There are existing webstores that over the years have lost a lot of business to amazon (Newegg, Sweetwater, B&H Photo, etc). Even local stores are losing business to amazon.

jhbadger 7y ago

This situation isn't just hypothetical. In the 1940s the grocery chain A&P was the largest retailer of any sort in the US and there was a real concern that they were anti-competitive because they owned a number of food processing plants in addition to their stores. The Federal government brought suit but didn't succeed in breaking up A&P. Ultimately, of course, A&P didn't succeed in monopolizing groceries, and even went bankrupt a decade or so ago, but they were the WalMart of their time.

fbonetti 7y ago

It's funny that you mention supermarkets, because the A&P grocery store chain was from 1915 to 1975 the largest grocery retailer in the US. At its peak in the 1940s, A&P captured 10% of total US grocery spend. It too came under scrutiny and was accused of being a "monopoly", as its cheap prices forced smaller competitors out of business. And yet despite being a "monopoly", it began to decline in the 1950s when it failed to keep pace with competitors that opened larger supermarkets with more modern features demanded by customers. It continued its slow decline until it completely shuttered in 2015. A&P was once as recognizable as Google or Walmart is today, and yet most people have never even heard of A&P. Sears too once had a "monopoly" on mail order products. People marveled at how amazing it was that you could order a product, mail in a check, and receive the product six weeks later, all without stepping into a store! Now they're bankrupt. The whole concept of a business "controlling" the market is ridiculous. Amazon operates in a highly competitive, low margin industry that requires a tremendous amount of logistical overhead to function. The minute they stop innovating, they're toast.

CharlesColeman 7y ago
So if we just let the market work, I can look forward to finally getting out from under the thumb of FAANG when I'm retired?
- jaredklewis 7y ago
  What exactly is your complaint against FAANG? You are free to buy a Linux or windows laptop, not create a Facebook account, subscribe to Hulu, not Shop amazon, use fast mail etc... Hard for me to get too worked up about tech giants seeing as using them is optional and alternatives abound. I don’t see how my life is made worse if someone else buys a MacBook. None of the things that do irk me about tech companies (security breaches, unethical advertising, spread of fake news, and so on) would be addressed in any way by a breakup.
  - majewsky 7y ago
    > You are free to buy a Linux or windows laptop, not create a Facebook account, subscribe to Hulu, not Shop amazon, use fast mail etc... Try participating in modern society without an Android or Apple smartphone or tablet. It's still possible, but becoming more difficult each day. (And to clarify, I don't mean "leave your phone at home today". I mean not owning a smartphone or tablet at all.)