6 ms·

"That is great. except when all other competition dies (because who can compete with a better, freer version of your product?) google starts charging pretty red

"That is great. except when all other competition dies (because who can compete with a better, freer version of your product?) google starts charging pretty rediculous rates." This is what happened with big malls in Europe, small retailers could not compete in price so they got out of business. Now some of the malls have bigger prices that what small retailers had, as they have way less competition. E.g Carrefour bought all the malls here so all them are Carrefour now.

ekianjo 15y ago
Actually, this kind of law does not make any sense. In the case of carrefour, since they are charging such high prices nowadays, what prevents a bunch of farmers to associate themselves and open their own mall to sell cheaper and regain market share? Nothing, absolutely nothing. They just can't be bothered. Lack of competition is not only about big brands killing small ones. It's also part of the culture. It's been a long time that entrepreneurship is dead in France. I know what I'm talking about, I AM french.
- kolinko 15y ago
  Isn't this what game theory is about? Smaller competitors won't open up, because even if Carrefour has high prices, the chain can lower prices any time to wipe out the competitors again. So, the monopolist can have arbitrarily high prices because nobody will invest in opening shops. This is one of the situations in which free market fails to deliver the optimal (for consumers) solution.
  - ekianjo 15y ago
    It's not just about prices. It was only about prices, then there would be McDonalds everywhere and nothing else. If farmers were to open their own stores, they could still manage to have reasonable prices, and make their point on "best quality", "organic food", plus offering some plants / species you would never be able to find in a big supermarket. You can't go head to head against Carrefour by just providing the same service. They would have to differentiate. That's how free market works. There are always needs that the big competitor will not be able to cater to.
    - mattmanser 15y ago
      You do realise you're actually arguing against your own point 2 up? You said the reason the small traders went out of business is price, but now they suddenly shouldn't differentiate on price? You don't really seem to understand monopolies or free markets or how they operate. 1. Monopoly emerges 2. Competitor opens 3. Monopoly slashes prices in local store, while maintaing prices in all others 4. Competitor runs out of cash, closes 5. Monopoly puts prices back up That's how it works. You can also replace 3 with 'Monopoly slashes prices everywhere and relies on its cash reserves'. But hey, you ARE French, of course you're right. The same thing of big chains killing all small towns isn't happening in the UK too for example. Oh wait, it is.
      - paulhauggis 15y ago
        "That's how it works. You can also replace 3 with 'Monopoly slashes prices everywhere and relies on its cash reserves'." So are we going to have laws now where big companies can't lower and raise their prices? If you want to blame anyone, blame the consumers that only shop for the lowest price. Walmart is a good example of this in the US. The other problem is that as a small business, you just don't have the resources as the big guys. For example, you might order 1000 widgets from a supplier for $10,000, but because your competitor orders 100,000, they can get a bulk discount and charge a lower price. Unless we have laws that prevent a business from getting to a certain size and keeping them all small (which I am against), there isn't any way to stop the above scenario. Similar to how software, music, and movie companies need to change their business model, so do small companies. With globalization becoming easier and easier, they need to offer something that the big guys can't. Trying to compete on price will only put you out of business quickly
        mattmanser 15y ago
        I didn't say that, I was just pointing out that when you get to the point of a monopoly it's very hard to get back. Worse still the big company then starts lobbying to make sure it stays a monopoly, America's phone networks are a good example of that. Also the other big problem with monopolies is that they squeeze their supplier dry as they're the only game in town. So here in the UK the supermarkets are squeezing the farmers' margins to the extreme as if they take their business elsewhere that farmer's out of business. Who else can he sell the millions of tonnes he has in the ground to? Further problems are caused by the big guys doing stuff like pumping water into chicken breast to make it look plump and increase the weight, increased revenues, customers think they're getting more for their money based solely on price/weight. I also lament the death of bakeries, for example bread from supermarkets is horrible. Donuts suck. We used to have Chelsea Buns where I grew up, the dross they sell in supermarkets is roughly a tenth of the 'tastiness', it's just crap. But all the bakers are out of business because who wants to visit ten stores and pay more when you can visit one? Over here in the UK they used to restrict how close a supermarket could be built to a town centre in order to curb their growth. I think they've relaxed that now as they've definitely got closer than they used to be. That's one example of how they used laws to try and give the smaller guys an advantage. Another example is they have restricted the opening hours, but the supermarkets are now opening convenience stores, in my city centre alone there are 6 Tescos within 5 minutes walking distance of each other. How to stop it? Should we stop it? I don't have any answers unfortunately. If I did I'd probably have a Nobel prize. EDIT: The part of me that wants it to stop is that it's all so homogenous, all the stores are laid out exactly the same, they've all got the same 6 ready meals, the same 6 meat items, the same 6 larger brands, the same 6 cakes, the same 12 brands of crisps, the same 15 chocolate bars. Where's the local produce? Where's the seasonal produce? What if I don't want a pepporoni pizza, I want a chicken one? Is life really supposed to be that fucking boring? I rarely swear here, but I feel it, really feel worried for our collective soul.
  - ttt_ 15y ago
    >> This is one of the situations in which free market fails to deliver the optimal (for consumers) solution. I never considered the free market idea to be based on delivering the optimal solution for consumers, actually the oposite, it delivers the optimal solution for enterprises, specially the big ones where the real money and power is made and retained or traded. Market does not preocupy with people, the state does (In theory. In practice the state may just pretend to preocupy or simply perform poorly or corruptly). Nevertheless, Market's only concerns are Buy and Sell, anything it says is Marketing and everything it does is Strategy.
    - aptwebapps 15y ago
      Maybe you don't look at it that way, but a lot of other people do. Indeed, it is a central tennet of the free market philosophy.
  - oh_sigh 15y ago
    The free market doesn't fail in this case. Consumers fail. Just like when there is traffic on a highway, it isn't networking theory that fails, it is drivers. Consumers choose to shop at Carrefour, and fill their coffers with money to smash smaller chains. Maybe if consumers were smarter, or cared a little bit more, they wouldn't shop there? I can only blame ignorant consumers and not carrefour or the free market in general. Even if 10% of consumers thought that Carrefour was onerous and damaging to their society, and were willing to pay slightly higher prices - they would provide enough demand for other smaller shops to open. But they don't, because people don't want to bother spending 50 cents more on gas, and paying 5€ more on their 70€ purchase.
    - oh_sigh 15y ago
      Thank you everyone who is providing intelligent rebuttals and not just downvoting me.
    - msluyter 15y ago
      I suspect you're getting downvoted because your suggestion suffers from the free-rider problem: everyone who chooses to continue shopping at Carrefour free rides off those who don't, yet they still obtain any supposed social benefits.
      - oh_sigh 15y ago
        How? How is someone who buys at Carrefour free riding off of those who don't? Carrefour has very efficient supply chains set up, and can therefore provide cheap goods. I don't pay more for a tomato from my neighborhood farm because Carrefour imports tomatoes from Algeria
        Zakharov 15y ago
        You're suggesting these people are paying more because Carrefour was "onerous and damaging to their society". In other words, they're treating competition to Carrefour as a social good. Society is better off if enough people shop at competing stores, but no individual customer has an incentive to shop at competing stores.
  - toyg 15y ago
    And the response to this is... to force the monopolist to keep its prices unnaturally high, hence raking in even more profit and making it even more likely that competition will be squashed, and screwing consumers? Because that's what this judge is arguing, basically: that Google and other mapping companies should "cartel up" and just be fair among themselves, smaller companies (and progress) be damned.
- AlisdairO 15y ago
  > Actually, this kind of law does not make any sense. In the case of carrefour, since they are charging such high prices nowadays, what prevents a bunch of farmers to associate themselves and open their own mall to sell cheaper and regain market share? The knowledge that the big mall will simply temporarily lower its prices below what the collective could reasonably do (due to their lower size/efficiency) until they're dead, and then re-raise them again?
- batista 15y ago
  Actually, this kind of law does not make any sense. In the case of carrefour, since they are charging such high prices nowadays, what prevents a bunch of farmers to associate themselves and open their own mall to sell cheaper and regain market share? Nothing, absolutely nothing. They just can't be bothered. Nothing? Never had any experience in retail business ownership, right? For starters, because Carrefour has a HUGE cross country AND multi-national supply chain. Because of it's mass wholesale ordering it can assure killer prices and it also has money-to-burn in the bank. So, if they threaten it, it can lower it's prices for a while to compete, until it destroys them. They cannot afford do the same. Second, Carrefour has the scale, which means it also has: thousands of other goods, exclusive deals, loss leaders, etc. Even if Carrefour couldn't compete on price (which it can, 200%), but had somewhat similar prices, it wouldn't make much sense for the buyer to spend gas plus time to go to two places just to buy some stuff cheaper in one, if he can get everything he wants in Carrefour. Third, Carrefour with its size, get the lion's share of advertising. Which DOES matter. Lastly, it's the bloody cost. It's another thing to open a retail outlet in a competitive environment, and totally another to open one where a few big mega-malls have saturated the market and killed everybody else. Uncertainty, and the ample opportunities for the big guy to crash you at will makes the move all too risk. That's it, in a nutshell. Why you'd believe that the problem is that they haven't thought of it, or that they aren't "entrepreneurial" enough? (Btw, such moves are even attempted in a lot of places with similar conditions. Very rarely they end well).
  - cousin_it 15y ago
    > So, if they threaten it, it can lower it's prices for a while to compete, until it destroys them. Thanks, this argument for antitrust laws is new to me. Is this a standard argument in economics, and do proponents of the free market have some standard answer to it?
    - eli 15y ago
      http://en.wikipedia.org/wiki/Predatory_pricing http://en.wikipedia.org/wiki/Predatory_pricing in particular the Criticism section
  - 15y ago

ekianjo 15y ago

Actually, this kind of law does not make any sense. In the case of carrefour, since they are charging such high prices nowadays, what prevents a bunch of farmers to associate themselves and open their own mall to sell cheaper and regain market share? Nothing, absolutely nothing. They just can't be bothered. Lack of competition is not only about big brands killing small ones. It's also part of the culture. It's been a long time that entrepreneurship is dead in France. I know what I'm talking about, I AM french.

kolinko 15y ago
Isn't this what game theory is about? Smaller competitors won't open up, because even if Carrefour has high prices, the chain can lower prices any time to wipe out the competitors again. So, the monopolist can have arbitrarily high prices because nobody will invest in opening shops. This is one of the situations in which free market fails to deliver the optimal (for consumers) solution.
- ekianjo 15y ago
  It's not just about prices. It was only about prices, then there would be McDonalds everywhere and nothing else. If farmers were to open their own stores, they could still manage to have reasonable prices, and make their point on "best quality", "organic food", plus offering some plants / species you would never be able to find in a big supermarket. You can't go head to head against Carrefour by just providing the same service. They would have to differentiate. That's how free market works. There are always needs that the big competitor will not be able to cater to.
  - mattmanser 15y ago
    You do realise you're actually arguing against your own point 2 up? You said the reason the small traders went out of business is price, but now they suddenly shouldn't differentiate on price? You don't really seem to understand monopolies or free markets or how they operate. 1. Monopoly emerges 2. Competitor opens 3. Monopoly slashes prices in local store, while maintaing prices in all others 4. Competitor runs out of cash, closes 5. Monopoly puts prices back up That's how it works. You can also replace 3 with 'Monopoly slashes prices everywhere and relies on its cash reserves'. But hey, you ARE French, of course you're right. The same thing of big chains killing all small towns isn't happening in the UK too for example. Oh wait, it is.
    - paulhauggis 15y ago
      "That's how it works. You can also replace 3 with 'Monopoly slashes prices everywhere and relies on its cash reserves'." So are we going to have laws now where big companies can't lower and raise their prices? If you want to blame anyone, blame the consumers that only shop for the lowest price. Walmart is a good example of this in the US. The other problem is that as a small business, you just don't have the resources as the big guys. For example, you might order 1000 widgets from a supplier for $10,000, but because your competitor orders 100,000, they can get a bulk discount and charge a lower price. Unless we have laws that prevent a business from getting to a certain size and keeping them all small (which I am against), there isn't any way to stop the above scenario. Similar to how software, music, and movie companies need to change their business model, so do small companies. With globalization becoming easier and easier, they need to offer something that the big guys can't. Trying to compete on price will only put you out of business quickly
      - mattmanser 15y ago
        I didn't say that, I was just pointing out that when you get to the point of a monopoly it's very hard to get back. Worse still the big company then starts lobbying to make sure it stays a monopoly, America's phone networks are a good example of that. Also the other big problem with monopolies is that they squeeze their supplier dry as they're the only game in town. So here in the UK the supermarkets are squeezing the farmers' margins to the extreme as if they take their business elsewhere that farmer's out of business. Who else can he sell the millions of tonnes he has in the ground to? Further problems are caused by the big guys doing stuff like pumping water into chicken breast to make it look plump and increase the weight, increased revenues, customers think they're getting more for their money based solely on price/weight. I also lament the death of bakeries, for example bread from supermarkets is horrible. Donuts suck. We used to have Chelsea Buns where I grew up, the dross they sell in supermarkets is roughly a tenth of the 'tastiness', it's just crap. But all the bakers are out of business because who wants to visit ten stores and pay more when you can visit one? Over here in the UK they used to restrict how close a supermarket could be built to a town centre in order to curb their growth. I think they've relaxed that now as they've definitely got closer than they used to be. That's one example of how they used laws to try and give the smaller guys an advantage. Another example is they have restricted the opening hours, but the supermarkets are now opening convenience stores, in my city centre alone there are 6 Tescos within 5 minutes walking distance of each other. How to stop it? Should we stop it? I don't have any answers unfortunately. If I did I'd probably have a Nobel prize. EDIT: The part of me that wants it to stop is that it's all so homogenous, all the stores are laid out exactly the same, they've all got the same 6 ready meals, the same 6 meat items, the same 6 larger brands, the same 6 cakes, the same 12 brands of crisps, the same 15 chocolate bars. Where's the local produce? Where's the seasonal produce? What if I don't want a pepporoni pizza, I want a chicken one? Is life really supposed to be that fucking boring? I rarely swear here, but I feel it, really feel worried for our collective soul.
- ttt_ 15y ago
  >> This is one of the situations in which free market fails to deliver the optimal (for consumers) solution. I never considered the free market idea to be based on delivering the optimal solution for consumers, actually the oposite, it delivers the optimal solution for enterprises, specially the big ones where the real money and power is made and retained or traded. Market does not preocupy with people, the state does (In theory. In practice the state may just pretend to preocupy or simply perform poorly or corruptly). Nevertheless, Market's only concerns are Buy and Sell, anything it says is Marketing and everything it does is Strategy.
  - aptwebapps 15y ago
    Maybe you don't look at it that way, but a lot of other people do. Indeed, it is a central tennet of the free market philosophy.
- oh_sigh 15y ago
  The free market doesn't fail in this case. Consumers fail. Just like when there is traffic on a highway, it isn't networking theory that fails, it is drivers. Consumers choose to shop at Carrefour, and fill their coffers with money to smash smaller chains. Maybe if consumers were smarter, or cared a little bit more, they wouldn't shop there? I can only blame ignorant consumers and not carrefour or the free market in general. Even if 10% of consumers thought that Carrefour was onerous and damaging to their society, and were willing to pay slightly higher prices - they would provide enough demand for other smaller shops to open. But they don't, because people don't want to bother spending 50 cents more on gas, and paying 5€ more on their 70€ purchase.
  - oh_sigh 15y ago
    Thank you everyone who is providing intelligent rebuttals and not just downvoting me.
  - msluyter 15y ago
    I suspect you're getting downvoted because your suggestion suffers from the free-rider problem: everyone who chooses to continue shopping at Carrefour free rides off those who don't, yet they still obtain any supposed social benefits.
    - oh_sigh 15y ago
      How? How is someone who buys at Carrefour free riding off of those who don't? Carrefour has very efficient supply chains set up, and can therefore provide cheap goods. I don't pay more for a tomato from my neighborhood farm because Carrefour imports tomatoes from Algeria
      - Zakharov 15y ago
        You're suggesting these people are paying more because Carrefour was "onerous and damaging to their society". In other words, they're treating competition to Carrefour as a social good. Society is better off if enough people shop at competing stores, but no individual customer has an incentive to shop at competing stores.
- toyg 15y ago
  And the response to this is... to force the monopolist to keep its prices unnaturally high, hence raking in even more profit and making it even more likely that competition will be squashed, and screwing consumers? Because that's what this judge is arguing, basically: that Google and other mapping companies should "cartel up" and just be fair among themselves, smaller companies (and progress) be damned.
AlisdairO 15y ago
> Actually, this kind of law does not make any sense. In the case of carrefour, since they are charging such high prices nowadays, what prevents a bunch of farmers to associate themselves and open their own mall to sell cheaper and regain market share? The knowledge that the big mall will simply temporarily lower its prices below what the collective could reasonably do (due to their lower size/efficiency) until they're dead, and then re-raise them again?
batista 15y ago
Actually, this kind of law does not make any sense. In the case of carrefour, since they are charging such high prices nowadays, what prevents a bunch of farmers to associate themselves and open their own mall to sell cheaper and regain market share? Nothing, absolutely nothing. They just can't be bothered. Nothing? Never had any experience in retail business ownership, right? For starters, because Carrefour has a HUGE cross country AND multi-national supply chain. Because of it's mass wholesale ordering it can assure killer prices and it also has money-to-burn in the bank. So, if they threaten it, it can lower it's prices for a while to compete, until it destroys them. They cannot afford do the same. Second, Carrefour has the scale, which means it also has: thousands of other goods, exclusive deals, loss leaders, etc. Even if Carrefour couldn't compete on price (which it can, 200%), but had somewhat similar prices, it wouldn't make much sense for the buyer to spend gas plus time to go to two places just to buy some stuff cheaper in one, if he can get everything he wants in Carrefour. Third, Carrefour with its size, get the lion's share of advertising. Which DOES matter. Lastly, it's the bloody cost. It's another thing to open a retail outlet in a competitive environment, and totally another to open one where a few big mega-malls have saturated the market and killed everybody else. Uncertainty, and the ample opportunities for the big guy to crash you at will makes the move all too risk. That's it, in a nutshell. Why you'd believe that the problem is that they haven't thought of it, or that they aren't "entrepreneurial" enough? (Btw, such moves are even attempted in a lot of places with similar conditions. Very rarely they end well).
- cousin_it 15y ago
  > So, if they threaten it, it can lower it's prices for a while to compete, until it destroys them. Thanks, this argument for antitrust laws is new to me. Is this a standard argument in economics, and do proponents of the free market have some standard answer to it?
  - eli 15y ago
    http://en.wikipedia.org/wiki/Predatory_pricing http://en.wikipedia.org/wiki/Predatory_pricing in particular the Criticism section
- 15y ago