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Because many voters think that they would be better off if the government enforced antitrust law more strongly in this area. Most agree it was effective when t

Because many voters think that they would be better off if the government enforced antitrust law more strongly in this area. Most agree it was effective when the government broke up Standard Oil, and when they broke up AT&T, among others. Microsoft was not broken up (although it got really close), but they sure got a slap, partly from the EU. And they changed their behavior, rather dramatically, for the better in the years since. The idea being that more competition is better. I think the first question you should be asking is "why do free market economies need antitrust enforcement?" And then take it from there.

qubex 7y ago
The reason why the EU “slapped” Microsoft is instructive though: in a nutshell, the argument was as follows: it is so big that it can crowd out other smaller competitors because it can offer products for almost free (because their marginal cost is basically zero) whereas starting up and/or sustaining a small competitor (perhaps with a subset of functionality, for a lower TCO) is more expensive. Since producers are (as remarked elsewhere) seen as “vehicles for job creation”, this is a net negative.
- robbrown451 7y ago
  Yeah and it is also a net negative for consumers if the big company offering things for almost free stops innovating once their competition goes away. Personally I think that free markets just don't work with products that are zero marginal cost. I don't necessarily have a solution, but it sure seems like the rules just don't work well anymore.
onlyrealcuzzo 7y ago
I wish there was a corporate progressive tax, such that if you're business profit is between $0-$1M you pay no tax, and once your income gets into the tens of billions (in profit), the effective tax rate is over 50%. The big companies would just break themselves up to take advantage of the taxes.

qubex 7y ago

The reason why the EU “slapped” Microsoft is instructive though: in a nutshell, the argument was as follows: it is so big that it can crowd out other smaller competitors because it can offer products for almost free (because their marginal cost is basically zero) whereas starting up and/or sustaining a small competitor (perhaps with a subset of functionality, for a lower TCO) is more expensive. Since producers are (as remarked elsewhere) seen as “vehicles for job creation”, this is a net negative.

robbrown451 7y ago
Yeah and it is also a net negative for consumers if the big company offering things for almost free stops innovating once their competition goes away. Personally I think that free markets just don't work with products that are zero marginal cost. I don't necessarily have a solution, but it sure seems like the rules just don't work well anymore.

onlyrealcuzzo 7y ago

I wish there was a corporate progressive tax, such that if you're business profit is between $0-$1M you pay no tax, and once your income gets into the tens of billions (in profit), the effective tax rate is over 50%. The big companies would just break themselves up to take advantage of the taxes.