4 ms·

The underlying assumption is that this behavior is bad. Why is it bad? Especially bad enough to be regulated by a new law?

II2II 5y ago
It is a conflict of interest that allows them to gain a disproportionate amount of control over the market. It causes direct harm to competitors, through both the access to confidential sales data and access to the market. It also causes harm to consumers (at least in cases of locked down platforms like iOS) since they no longer have access to competitor's products. In short, it is no longer a free market.
sjtindell 5y ago
It hinders fair competition, which hurts consumers. It misallocates dollars to these gatekeepers.
tonightstoast 5y ago
The current chair of the FTC has an interesting paper on this question (written before she became chair). https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.pdf https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.p...
skohan 5y ago
Are you kidding? You don't think this kind of behavior disincentivizes innovation? And it's not exactly new. Common carrier regulations have been a thing forever.
tjpnz 5y ago
Because this kind of behaviour results in monopolies which stifle innovation and invariably harm people.
seanhunter 5y ago
For one thing it's bad because of information asymmetry between the market owner and other participants. The market owner knows all the information but each other participant only knows a fraction of the information. If the information was all completely public it would be less bad probably. This is why in financial markets "dark pools" (private alternative execution venues) ended up getting new regulation from the SEC to prevent abuse https://www.cfainstitute.org/en/advocacy/issues/dark-pools#sort=%40pubbrowsedate%20descending https://www.cfainstitute.org/en/advocacy/issues/dark-pools#s... Antitrust law doesn't come into effect just because something is bad in the abstract sense though, it comes into effect when there is harm to the consumer as a result (that's my understanding anyway). The harm here is due to the market distortion primarily (I would think).

II2II 5y ago

It is a conflict of interest that allows them to gain a disproportionate amount of control over the market. It causes direct harm to competitors, through both the access to confidential sales data and access to the market. It also causes harm to consumers (at least in cases of locked down platforms like iOS) since they no longer have access to competitor's products. In short, it is no longer a free market.

sjtindell 5y ago

It hinders fair competition, which hurts consumers. It misallocates dollars to these gatekeepers.

tonightstoast 5y ago

The current chair of the FTC has an interesting paper on this question (written before she became chair). https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.pdf https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.p...

skohan 5y ago

Are you kidding? You don't think this kind of behavior disincentivizes innovation? And it's not exactly new. Common carrier regulations have been a thing forever.

tjpnz 5y ago

Because this kind of behaviour results in monopolies which stifle innovation and invariably harm people.

seanhunter 5y ago

For one thing it's bad because of information asymmetry between the market owner and other participants. The market owner knows all the information but each other participant only knows a fraction of the information. If the information was all completely public it would be less bad probably. This is why in financial markets "dark pools" (private alternative execution venues) ended up getting new regulation from the SEC to prevent abuse https://www.cfainstitute.org/en/advocacy/issues/dark-pools#sort=%40pubbrowsedate%20descending https://www.cfainstitute.org/en/advocacy/issues/dark-pools#s... Antitrust law doesn't come into effect just because something is bad in the abstract sense though, it comes into effect when there is harm to the consumer as a result (that's my understanding anyway). The harm here is due to the market distortion primarily (I would think).