Monopolization Defined. The antitrust laws prohibit conduct by a single firm that unreasonably restrains competition by creating or maintaining monopoly power
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.
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.
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.
The internet has enabled the smaller company to have access to customers worldwide without the use of any large retailer. The situation has never been better for smaller retail companies, assuming they can differentiate and protect their IP.
Obviously they are going to get killed going up against Amazon, Target, Walmart, Home Depot, Lowes, Best Buy, etc. But there is no avoiding economies of scale.
That seems like the correct metric to use, no? The other definition didn't make much sense either.
>GOLDSTEIN: 1966, United States v. Von's Grocery - can two local grocery store chains merge in Los Angeles?
>MALONE: I don't know, merger?
>GOLDSTEIN: OK, but after the merger, they'd only have 7.5 percent of the local market.
>MALONE: Supreme Court was like, no. No, you can't do it. It would be too hard on mom-and-pop shops.
>GOLDSTEIN: OK, 1967, Utah Pie v. Continental Baking - can big national frozen pie companies sell really cheap pies in Utah and make business tough for a local pie company?
>MALONE: No way.
>GOLDSTEIN: OK, but what if the local pie company controls most of the local market and keeps making a profit through most of the price war?
>MALONE: Still no, nope.
>GOLDSTEIN: So in case after case, the court kept ruling for the little guy, kept ruling for team David, and expanding the definition of what was illegal, what was bad for competition.
https://www.npr.org/transcripts/696337392
>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.
But amazon didn't get here by a series of mergers?
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!
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-...