2 ms·

A few of points. The first is “competitors existing” and “practical competitors” existing are not the same, and that is relevant in antitrust law. Imagine a hyp

by olliej 3y ago

A few of points. The first is “competitors existing” and “practical competitors” existing are not the same, and that is relevant in antitrust law. Imagine a hypothetical world where there was one corner store, and there was Amazon. In said extreme world there is a “competitor”, but in practice there isn’t. The obvious counter “create new stores” runs into the next issue: Amazon could use its clout to prevent or limit creation of new competitors - there are many ways to do this (see MS monopoly case) - like requiring suppliers to prefer it over other parties, conditioning prices for some goods on discounts on others (“windows is the default/only install on all your machines or we will charge you a higher price for it”) Then there’s using funds from one place you have significant dominance to to undercut (including running at a loss) in the new industry - I’m much iffier on exactly at what point this becomes uncompetitive as it seems a fairly common thing for many companies to do. The important thing to note in the above is specifically pricing related, it’s about using market power to control the ability of competitors to actually compete (how can you compete if Amazon has ensure the best price you can ever get for any product is >= to the price they get) Now it’s also important to realize antitrust regulation is not about producing the cheapest product for the end user/consumer, it’s about ensuring a fair market. IIRC the Sherman act did not touch on consumer pricing, but rather producer prices: standard oil had a functional monopoly on the market so would tell people who found oil what they would get, regardless of the amount, value, or final sale price of the oil. So consumers may have been getting “cheaper” goods, but the people selling oil were getting screwed. That’s where I’m going to guess antitrust is going to be targeting Amazon - just based all the stories over the last few years of them screwing third party sellers - for such sellers they _could_ sell directly (and many do) but if you aren’t on Amazon you essentially don’t exist, then Amazon has been found to duplicate successful products and sell them cheaper than the original product. I have no idea how prevalent that behavior is, but that sounds awfully like the kind of thing that would be subject to antitrust concerns.

Osiris 3y ago
People still haven’t learned the lessons of Standard Oil. There were other places to get gas but they could use their wealth to undercut pricing until the other guy went out of business, or just buy them outright, or get gas at better deals, etc. They used strong arm tactics to prevent any meaningful competition.
Arialonomus 3y ago
> Then there’s using funds from one place you have significant dominance to to undercut (including running at a loss) in the new industry - I’m much iffier on exactly at what point this becomes uncompetitive as it seems a fairly common thing for many companies to do. I think the distinguishing factor in something like this would be beyond running at a loss, but doing so in a way that would be no way sustainable unless you had massive cash reserves or income streams from your other business verticals—-which you allude to. Most businesses operate at a loss initially, and sometimes competitive pricing is a part of that, but you typically can’t price your services far far below market rate and not quickly go out of business unless you just have insane amounts of seed funding or you’re abusing your market power as a large corporation. Of all the qualifiers you listed, though, I’d agree it’s definitely the one with the biggest gradient between competitive and anti-competitive practices.

by olliej 3y ago

Osiris 3y ago

People still haven’t learned the lessons of Standard Oil. There were other places to get gas but they could use their wealth to undercut pricing until the other guy went out of business, or just buy them outright, or get gas at better deals, etc. They used strong arm tactics to prevent any meaningful competition.

Arialonomus 3y ago

> Then there’s using funds from one place you have significant dominance to to undercut (including running at a loss) in the new industry - I’m much iffier on exactly at what point this becomes uncompetitive as it seems a fairly common thing for many companies to do. I think the distinguishing factor in something like this would be beyond running at a loss, but doing so in a way that would be no way sustainable unless you had massive cash reserves or income streams from your other business verticals—-which you allude to. Most businesses operate at a loss initially, and sometimes competitive pricing is a part of that, but you typically can’t price your services far far below market rate and not quickly go out of business unless you just have insane amounts of seed funding or you’re abusing your market power as a large corporation. Of all the qualifiers you listed, though, I’d agree it’s definitely the one with the biggest gradient between competitive and anti-competitive practices.