5 ms·

That's not monopolistic abuse; what you described is just investment in a new sector with profits from an existing one. Companies, investors and funds do it all

by jeswin 6y ago

That's not monopolistic abuse; what you described is just investment in a new sector with profits from an existing one. Companies, investors and funds do it all the time. Abuse would be when a company leverages a monopoly to enter or influence another market, such as bundling Internet Explorer with Windows.

mytherin 6y ago
Perhaps monopoly abuse is not the right term, but Microsoft did buy their way into the gaming industry by selling millions of consoles at a loss. There is no way for any company that is not already a multi-billion dollar company to compete with that. The same happens in many other areas where large tech companies use their inertia and tons of existing capital to make it impossible for anyone but other tech giants to compete with them. This is extremely problematic because these companies almost win “by default” just by swinging their weight around, even if their product might not be the best product in that area.
- transperceneige 6y ago
  Predatory pricing is what you are refering to.
- p_l 6y ago
  You might want to change your example, as while the tactic is reprehensible and common to VC-backed companies, selling consoles at loss is standard practice for I think all makers (they recoup it by license fees on games)
  - mytherin 6y ago
    Nintendo doesn’t sell at a loss - only Sony and Microsoft do. Both are huge multi-billion dollar companies that entered the console market using money they had from other ventures. There is also effectively no other competition on this market besides those companies. I think my example is fine.
ZeroGravitas 6y ago
If the profits come from a monopoly, I'd argue that it's monopolistic abuse. If they weren't abusing the monopoly, they wouldn't have the profits to do whatever the next thing is, which often involves losing money in the short term to tie up a market in the longer term (i.e. further abuse of monopoly).

by jeswin 6y ago

mytherin 6y ago

Perhaps monopoly abuse is not the right term, but Microsoft did buy their way into the gaming industry by selling millions of consoles at a loss. There is no way for any company that is not already a multi-billion dollar company to compete with that. The same happens in many other areas where large tech companies use their inertia and tons of existing capital to make it impossible for anyone but other tech giants to compete with them. This is extremely problematic because these companies almost win “by default” just by swinging their weight around, even if their product might not be the best product in that area.

transperceneige 6y ago
Predatory pricing is what you are refering to.
p_l 6y ago
You might want to change your example, as while the tactic is reprehensible and common to VC-backed companies, selling consoles at loss is standard practice for I think all makers (they recoup it by license fees on games)
- mytherin 6y ago
  Nintendo doesn’t sell at a loss - only Sony and Microsoft do. Both are huge multi-billion dollar companies that entered the console market using money they had from other ventures. There is also effectively no other competition on this market besides those companies. I think my example is fine.

ZeroGravitas 6y ago

If the profits come from a monopoly, I'd argue that it's monopolistic abuse. If they weren't abusing the monopoly, they wouldn't have the profits to do whatever the next thing is, which often involves losing money in the short term to tie up a market in the longer term (i.e. further abuse of monopoly).