OK, I'll bite. Why? This is a free transaction between two parties, why should it be banned?
(There are several possible answers, I'm just interested which one motivates your comment.)
You also get economies of scale that lead to capital concentration, razor thin margins and extreme efficiency reliant on capital intensive business models. As a result you wind up with massive barriers to entry for new competitors, and so the usual "someone will come along and outcompete" doesn't really work. It works when you're selling doodads and fruit, but semiconductors and car manufacturing aren't fruit.
In particular, industries that become foundational to the workings of a society become impossible to avoid engaging in. In the US, cars are a given, you have to have a car. One car company does something and gets away with it with their customers, so the rest follow suit and now you're in an environment where everyone does it and there's no way out. There's no direct collusion here, just neither has an interest in competing on a front because the the practice benefits them both.
This is where industry regulation comes in. It comes in only when it isn't an entirely free transaction between two parties. Where a party must use a product or service, or where competitors collude directly or indirectly, state action is warranted. Examples where the party must use a product would be cars, food and car insurance. Direct collusion is interactive, indirect is passive, such as an entire industry without direct cooperation engaging in practices like this.
Also, the claim that the car market is uncompetitive is not so easy to make. The top 5 players have about half of the market.[1] This is less concentrated than (say) the market for breakfast cereal. The market is quite global. Artificial barriers to entry have not stopped numerous recent entrants. It might even be that new pricing strategies like selling services will allow more entrants to the market - Tesla being the obvious example.
[1] https://courses.lumenlearning.com/suny-microeconomics/chapte... - probably not the best source but ok for a quickie.
In Italy, prices started going down for mobile only when, back in 2007, they introduced a law to make unlawful minimum duration of contracts.
After that, given users could switch each month, prices went really down 'cause there was a _real_ market.
Here in Germany, you are locked to an operator for 24 months, and prices are crazy high. So, yes, please, more regulations.
First, there is a huge asymmetry in the relationship between a consumer and such a large entity as a car maker.
Second, you can’t vote with your feet much, as the market is controlled by a very limited number players who can easily collude to manipulate the market without explicitly doing so.
Third, many if not all car manufacturers receive subsidies from the government in various forms. Tesla as an example, selling regulatory credits plus consumer tax credit and rebates. If it is subsidized by tax payers, then why not attach strings to it prohibiting anti consumer behavior.
Well said. There are a handful of entities which control all the major car brands. It's the illusion of choice.
https://www.whichcar.com.au/car-advice/car-manufacturer-bran...
You buy a fan for $20. It works. It has a low, medium, and high setting.
One of the most influential fan makers decides they want to make a new product. It’s fan 2.0. It’s $21 dollars and has a $1 a month fee to unlock high speed. The package says “optional settings for a monthly fee. Buy only what you need and save.”
Other fan makers realize this is a great way to make money. 2 years later, all fans have this option.
Influential fan corp puts a press release for their revolutionary new product that’ll change the world. Fan 3.0. Medium speed is $3 a month.
Second reason: even if it were, 'free transaction' is not a measure of good. We ban carcinogens in food, lawn darts, and all sorts of other things because sometimes collective decisions for the common good are better for people than allowing society to be atomised and taken advantage of. This is the entire premise behind laws in the first place.
Thirdly, if there are ongoing conditions for the use of something after it is sold, laws preventing certain modifications by the buyer, and/or secrets required for its ongoing use/editing of software that are not cha7ngeable or knowable by the buywr, then the product was not 'sold' and representing the $50k paid as anything other than rent is, in any sane society, fraud.
I mean a gunman robbing you on a side of the road is a free transaction between two free parties. Gunman is free to shoot you, and you are free to run away or take the bullet.
Free transaction between peers is what is actually useful considering.