4 ms·
It's common for PE to buy many "mom n pop" practices with the goal of reducing competition (eg https://kgnu.org/investigation-finds-that-private-equity-was-runn
by verteu 2y ago
It's common for PE to buy many "mom n pop" practices with the goal of reducing competition (eg https://kgnu.org/investigation-finds-that-private-equity-was-running-an-anesthesiology-monopoly-in-colorado/ https://kgnu.org/investigation-finds-that-private-equity-was... )
Reducing the friction of starting new business is good. But I don't think it's sufficient to protect consumers. (If it was sufficient, we wouldn't need antitrust law at all, right?) For example, the rolled-up firms might have economies of scale that allow it to undercut new competitors.
- devmor 2y agoThey don't really prevent new competition, rather than target markets that specifically have a larger barrier to entry such that new competition is rare to form. i.e. these vet clinics - a PE firm can buy up 40 disparate vet clinics in a large city then raise fees and cut staff. You may be lucky if a few new clinics appear over the next couple years once customers are fed up with the increased price and reduced quality. It's still a win for the PE firm and a loss for most of the consumers.