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Monopolization Defined. The antitrust laws prohibit conduct by a single firm that unreasonably restrains competition by creating or maintaining monopoly power

jjallen 5y ago
What exactly is "monopolization defined"? This is the definition of a monopoly in India? Or where? I know in the US a majority market share is the primary determinant of whether a company has a monopoly or not. Does Amazon.in have a monopoly in India (we can use the definition of >50% market share for this question)? If they do, I am amazed at the progress in the last couple of years since I had read much about Amazon.in!
- thedmstdmstdmst 5y ago
  What about Outerspace or Mars? Looks like an ultimate definition of 'monopolization' is sorely in need.
- bmitc 5y ago
  > I know in the US a majority market share is the primary determinant of whether a company has a monopoly or not. I really feel this should be considered an outdated view. Software, technology, and automation has changed things, and companies can exert market and monopoly power much more easily with less market share than previously found in monopolistic practices. If we read the Justice Department’s own documents, we find: > The Supreme Court has defined market power as "the ability to raise prices above those that would be charged in a competitive market,"(8) and monopoly power as "the power to control prices or exclude competition."(9) The Supreme Court has held that "[m]onopoly power under § 2 requires, of course, something greater than market power under § 1."(10) Precisely where market power becomes so great as to constitute what the law deems to be monopoly power is largely a matter of degree rather than one of kind. Clearly, however, monopoly power requires, at a minimum, a substantial degree of market power.(11)… antitrust law does not regard as illegal the mere possession of monopoly power where it is the product of superior skill, foresight, or industry.(14) Where monopoly power is acquired or maintained through anticompetitive conduct, however, antitrust law properly objects. > Monopoly power is conventionally demonstrated by showing that both (1) the firm has (or in the case of attempted monopolization, has a dangerous probability of attaining) a high share of a relevant market and (2) there are entry barriers--perhaps ones created by the firm's conduct itself--that permit the firm to exercise substantial market power for an appreciable period.(16) Unless these conditions are met, defendant is unlikely to have either the incentive or ability to exclude competition.(17) If we follow these definitions and discussions, it’s clear firms like Amazon and Apple have incredibly substantial market and monopoly power. To me, the fact that they may not have even majority market share in certain markets is inconsequential. If one keeps reading the linked Justice Department document, there’s discussions about percentages of market shares that the courts have typically gone off of. These are seemingly arbitrary and obviously rooted in businesses of a different type. Through technology and scale, firms like Amazon and Apple are among the richest and most powerful corporations ever, despite not necessarily having high percentages of market share in the relevant market, but they absolutely meet the definitions above. So these percentage of market share ideas are outdated and need revamped, in my opinion. https://www.justice.gov/atr/competition-and-monopoly-single-firm-conduct-under-section-2-sherman-act-chapter-2 https://www.justice.gov/atr/competition-and-monopoly-single-...
- Imaiomus 5y ago
  Federal trade commission definition https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct/monopolization-defined https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
rtkwe 5y ago
Anti-trust laws were slowly defanged for decades until the main metric considered was 'will consumers see lower prices?' which is very easy to promise and temporarily deliver for the merging corporations. Then you just start rachetting up prices once you're a year or so out because unwinding a merger is tough.
- lotsofpulp 5y ago
  Retail businesses have had low single digit profit margins for many decades. Is the claim here that Amazon will be able to destroy all other retail and increase the profit margins? And is it not easier than ever for a competitor to start a retail business due to the internet? All you need is a website and UPS/FedEx/USPS. Seems like a bad business to get into if your goal is to earn a lot of profits by raising prices after cornering a market.
  - nerdponx 5y ago
    What are Amazon's profit margins? They are already deep into the "destroy all other retail" part, but it's not just about retail for them. They are vertically integrated, so it's also about distribution, fulfillment, and product search/discovery.
    - lotsofpulp 5y ago
      https://www.macrotrends.net/stocks/charts/AMZN/amazon/profit-margins https://www.macrotrends.net/stocks/charts/AMZN/amazon/profit... Any increase in profit margins from the 2% to 4% range is due to AWS, and earning the commission from resellers (the actual retailers) as a platform. There really is not much left to juice in the business of getting detergent from Procter and Gamble to an end user.
      - fencepost 5y ago
        There really is not much left to juice in the business of getting detergent from Procter and Gamble to an end user. Possibly, but P&G is big enough to have all its own in house production. One place this CAN really hit is any smaller market or company that's using contract manufacturing for smaller lots. In that area the information Amazon can get is actually better than any of the brands or sellers get because Amazon gets sales info across multiple brands /sellers.
0des 5y ago
Regulatory Capture
sschueller 5y ago
The thin line between Anti-trust and Racketeering is getting fainter.
- cbtacy 5y ago
  I've been saying for the past 5 years that Amazon (and Facebook) should be RICO targets.

jjallen 5y ago

What exactly is "monopolization defined"? This is the definition of a monopoly in India? Or where? I know in the US a majority market share is the primary determinant of whether a company has a monopoly or not. Does Amazon.in have a monopoly in India (we can use the definition of >50% market share for this question)? If they do, I am amazed at the progress in the last couple of years since I had read much about Amazon.in!

thedmstdmstdmst 5y ago
What about Outerspace or Mars? Looks like an ultimate definition of 'monopolization' is sorely in need.
bmitc 5y ago
> I know in the US a majority market share is the primary determinant of whether a company has a monopoly or not. I really feel this should be considered an outdated view. Software, technology, and automation has changed things, and companies can exert market and monopoly power much more easily with less market share than previously found in monopolistic practices. If we read the Justice Department’s own documents, we find: > The Supreme Court has defined market power as "the ability to raise prices above those that would be charged in a competitive market,"(8) and monopoly power as "the power to control prices or exclude competition."(9) The Supreme Court has held that "[m]onopoly power under § 2 requires, of course, something greater than market power under § 1."(10) Precisely where market power becomes so great as to constitute what the law deems to be monopoly power is largely a matter of degree rather than one of kind. Clearly, however, monopoly power requires, at a minimum, a substantial degree of market power.(11)… antitrust law does not regard as illegal the mere possession of monopoly power where it is the product of superior skill, foresight, or industry.(14) Where monopoly power is acquired or maintained through anticompetitive conduct, however, antitrust law properly objects. > Monopoly power is conventionally demonstrated by showing that both (1) the firm has (or in the case of attempted monopolization, has a dangerous probability of attaining) a high share of a relevant market and (2) there are entry barriers--perhaps ones created by the firm's conduct itself--that permit the firm to exercise substantial market power for an appreciable period.(16) Unless these conditions are met, defendant is unlikely to have either the incentive or ability to exclude competition.(17) If we follow these definitions and discussions, it’s clear firms like Amazon and Apple have incredibly substantial market and monopoly power. To me, the fact that they may not have even majority market share in certain markets is inconsequential. If one keeps reading the linked Justice Department document, there’s discussions about percentages of market shares that the courts have typically gone off of. These are seemingly arbitrary and obviously rooted in businesses of a different type. Through technology and scale, firms like Amazon and Apple are among the richest and most powerful corporations ever, despite not necessarily having high percentages of market share in the relevant market, but they absolutely meet the definitions above. So these percentage of market share ideas are outdated and need revamped, in my opinion. https://www.justice.gov/atr/competition-and-monopoly-single-firm-conduct-under-section-2-sherman-act-chapter-2 https://www.justice.gov/atr/competition-and-monopoly-single-...
Imaiomus 5y ago
Federal trade commission definition https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct/monopolization-defined https://www.ftc.gov/tips-advice/competition-guidance/guide-a...

rtkwe 5y ago

Anti-trust laws were slowly defanged for decades until the main metric considered was 'will consumers see lower prices?' which is very easy to promise and temporarily deliver for the merging corporations. Then you just start rachetting up prices once you're a year or so out because unwinding a merger is tough.

lotsofpulp 5y ago
Retail businesses have had low single digit profit margins for many decades. Is the claim here that Amazon will be able to destroy all other retail and increase the profit margins? And is it not easier than ever for a competitor to start a retail business due to the internet? All you need is a website and UPS/FedEx/USPS. Seems like a bad business to get into if your goal is to earn a lot of profits by raising prices after cornering a market.
- nerdponx 5y ago
  What are Amazon's profit margins? They are already deep into the "destroy all other retail" part, but it's not just about retail for them. They are vertically integrated, so it's also about distribution, fulfillment, and product search/discovery.
  - lotsofpulp 5y ago
    https://www.macrotrends.net/stocks/charts/AMZN/amazon/profit-margins https://www.macrotrends.net/stocks/charts/AMZN/amazon/profit... Any increase in profit margins from the 2% to 4% range is due to AWS, and earning the commission from resellers (the actual retailers) as a platform. There really is not much left to juice in the business of getting detergent from Procter and Gamble to an end user.
    - fencepost 5y ago
      There really is not much left to juice in the business of getting detergent from Procter and Gamble to an end user. Possibly, but P&G is big enough to have all its own in house production. One place this CAN really hit is any smaller market or company that's using contract manufacturing for smaller lots. In that area the information Amazon can get is actually better than any of the brands or sellers get because Amazon gets sales info across multiple brands /sellers.

0des 5y ago

Regulatory Capture

sschueller 5y ago

The thin line between Anti-trust and Racketeering is getting fainter.

cbtacy 5y ago
I've been saying for the past 5 years that Amazon (and Facebook) should be RICO targets.