Watch Out Google, Obama’s Antitrust Chief Is Looking To Make A Big Case
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Charge more than your competition and your abusing your monopoly.
Charge less than them and your pricing to destroy competition and monopolise the market.
Charge the same as your competition and your colluding on price.
Anti-trust laws simply penalise big, successful companies for the fact that they're successful.
Perhaps the resources allocated to anti-trust measures can be spend more productively on lowering barriers to market entry.
According to your plan, these resources (several billions of dollars) should be invested by the government to create a viable competitor. But the other oil company will battle this every step of the way - it can poach all the quality people who work at the other company, it will sign exclusive deals with tanker companies and so on.
Oversight is not an option, it's a necessity. Companies should know that ethical competition is not just the right thing to do, it's also the law.
"Now let me state the present rules,"
The lawyer then went on,
"These very simple guidelines,
You can rely upon:
You're gouging on your prices if
You charge more than the rest.
But it's unfair competition if
You think you can charge less!
"A second point that we would make
To help avoid confusion...
Don't try to charge the same amount,
That would be Collusion!
You must compete. But not too much,
For if you do you see,
Then the market would be yours -
And that's Monopoly!"
--"The Incredible Bread Machine"And the Taliban only execute gays where there is evidence of homosexuality.
Sorry, the "evidence" bit by itself doesn't make me think that the law is justified.
Also: anarcho-capitalism, silly? Of course it is. Slippery slopes usually lead somewhere silly.
Simply?
Hmmm... let's think about that...
Rockefeller wouldn't ship his oil on anyone's railroads except Vanderbilt's. Vanderbilt wouldn't ship anyone's oil except Rockefeller's. They did this until they were the only 2 left.
That is until we the people said, "Enough of this."
If we treated each other fairly, we wouldn't need rules.
If we followed the rules, we wouldn't need laws.
If we obeyed the laws, we wouldn't need courts.
So many of us hate rules, laws, or lawyers, but still refuse to behave in such a way as to make them unnecessary.
He did tries to run out his competition but he never could completely eliminate them. At one time, Standard Oil only fleeting hold 91% and 85% of final sale. So there were still competitors at the hieght of his empire.
However, by the time the federal government decided to use antitrust charges on Standard Oil, its share of the market dropped tremedously.
In any case, the government is itself responsible for creating legal monopolies such as patents and copyright. It was also supposed to break up supposed monopolies, which may or may not be true. With such conflict of interest and the law of unintended consequence in mind, I am very skeptical about such antitrust claims.
Don't take my word for it though. Do your own research.
The Standard Oil case you reference is widely misunderstood. Standard Oil's market share was dropping for a decade before the anti-trust case. And at the time of the case, 1911, there were some competitors you might recognize, such as Texaco, Shell, and Gulf already established in the market.
And at any rate, do you really believe that society would be better off if these so-called private monopolies (I'm going to exclude the monopolies created by government force here, such as cable franchises, telephone companies for most of history, patents, etc.), such as Google, Standard Oil, or Alcoa, had simply closed their doors? "You're right, we're a monopoly. The world would be better without us. Effective next week, we're all going home to tend to our gardens and take up piano lessons."
See also: http://mises.org/story/2694
And since Google isn't requiring you to load an ActiveX control off their front page that resets your browser home page every time you try to do a Google search, we probably don't have to worry about antitrust actions against their natural monopoly.
When they do decide to add that "feature" to their home page, we aren't going to be asked to do without Google. Just the management team that decided to violate US antitrust law.
1. Larry creates something immensely valuable for the world.
2. Through innovation, Larry is able to sell it for a fraction of its earlier price, or even to give it away for free.
3. At some point, Larry decides he wants to put an ActiveX control on the homepage, lowering its value to you.
4. You advocate stealing Larry's company at this point, or using force to coerce Larry into doing what you want him to do, even though objectively speaking, you are still better off, even with the ActiveX control, than if Larry had never existed. Or at worst, he's done no harm to you, compared to the state in which he didn't exist.
I like how you use the terms "create", "immense value, and "innovation" to support your argument, and "steal", "force", and "coerce" for mine. Clearly, you want to hash this out. =)
But come on, I don't want to argue your specific example -- it is clearly meant to be ridiculous. Real-world natural monopolies tend not to last very long without government support (or a strained and narrow definition of what their market is that ignores substitution), particularly if they aren't serving their customers well. The exceptions that you can think of are just that, exceptions. And even at that, I can't think of very many good counter-examples. Microsoft is perhaps the best case, but even there, by strangling the desktop they arguable accelerated the move towards innovation in the cloud (so that we could get around them). You can see this effect even as early as 1995, when PG started Viaweb as a webapp in part because he didn't want to develop for Windows. Substitution is always the death of an otherwise strong monopoly. The government didn't breakup Microsoft, but no one is worried about them these days anyway (http://www.paulgraham.com/microsoft.html).
You keep falling back on what is or is not lawful. I'm not interested in debating that. It takes an expensive discovery process and a lot of lawyers and judges to determine what is or is not lawful in a complex real-world situation. In my book, lawful does not equal moral, and unlawful does not equal immoral. I find morality more meaningful to talk about.
As for the terms I use, they simply reflect my moral approach to the problem. If you can imagine a scenario in which taking the fruit of a peaceful individual's labor from him or her by force is moral and just, then you're starting from different moral axioms than I am.
I'm not sure I follow you at this point: you don't want to discuss the law, and we agree Google is a bad example of the law applied, so what's your point?
Finally, I object to the way you're portraying my argument. Ridiculous? All I did was translate what Microsoft did to the web. My point is, people look at Google, say "oooh, monopoly!", and start talking about antitrust. But Microsoft wasn't taken to court for doing a great job with Windows 95. They were taken to court for exploiting that success technically, contractually, and financially to suppress entire other markets that concerned them.
Very few reasonable people would disagree that with you that we shouldn't punish companies for their success, even when that success provides a natural monopoly. But unfortunately for your argument, US antitrust law doesn't seem to disagree with you either!
Discussing what the law should be is of interest to me. Using the law as an argument for why a company should be obligated to do something (outside of practical concerns for the company itself) is an argument I find to lack substance.
and we agree Google is a bad example of the law applied, so what's your point?
This thread started with a defense of Standard Oil. I'm making the broader point that anti-trust laws are ineffective (not to mention more likely to be used as a tool against political enemies than as a boon to consumers), unnecessary (because unless the monopoly is propped up by government, the market will route around the roadblock anyway in the few cases where this comes up), and unjust (because unless the monopolist is using force to prop up the monopoly, there is no moral justification for using forceful coercion against the company owners).
That is correct. But let's be specific [1]. So MS went to Dell (let's say) and said, if you sell only Windows, we'll lower your buy-rate from $150 to $75 (I'm making this part up as a representative example). Or they went to one of their channel partners and said, if you push any other operating system than Windows, we're going to stop passing customer leads your way.
If any other company in the world did that, we'd all just consider that a deal term, something to be considered, priced into the deal, and negotiated. At no point did Microsoft commit fraud or threaten or use violence. If Dell decided to accept those terms, it was because they felt it was in their best interest to do so. It isn't as though there weren't other perfectly good operating systems around they could have used for free. They had other options (NeXT seemed to manage without doing a deal to buy Windows licenses). They chose not to take them. And the channel partner might have decided that those leads from Microsoft were worth the loss of other options. So what?
Anti-trust laws use the government to force Microsoft to not do things that are perfectly moral (or at least, not immoral) and reasonable to do in business (even if they are not very nice things to do). And if Microsoft isn't willing to comply, the government is willing to steal the company from them for the benefit of the "public good." So while I'm not trying to castigate you, I really don't think my terms are too harsh. Instead, I believe the abstract nature of the political process [2] leads people to make different moral judgments than the more reasonable ones they would make in the normal course of their lives.
[1] I can't believe I'm about to defend Microsoft here. Please don't conflate the idea that what Microsoft did should be perfectly legal with the idea that how they operated was "good" or even "right." Not everything that is bad should be illegal. Breaking up with your girlfriend via a post-it note is "bad," but should clearly be lawful.
[2] That is to say, the greatly increased distance in time, space, and intermediaries between the moral judgment and its real effects on other people.
Read up on copyright and patents: they exist to provide incentive to create, not to allow the creators to profit.
So if the ActiveX control inhibits future creations, that is enough to for we the people (through our govt.) to take stems to prevent that (in order to ensure our future well being).
Big companies have the resources to compete unfairly against small companies. Oversight is needed in case they are actually abusing their monopoly power.
Of course, in the real world, what they'll do is quietly fund an anti-tobacco zoning ordinance (which they're grandfathered in for, of course), or use some other trick that amounts to keeping out competitors at government-point, because that's what big companies do, if they can. Actual competition isn't nearly as harmful as lobbying.
Microsoft required their OEMs to install and highlight Internet Explorer, their free replacement for a ~$30 startup product, and was then shown in court to have built a deep, complex strategy for exploiting their OS and licensing agreements to undermine their competition.
Even then, they might not have lost had they shown more respect for the courts.
Weren't Web browsers at that time free, expect for Navigator? (And then only for commercial usage, I think.) I used Mosaic, Cello, Navigator, and IE, and never paid for a browser, and don't recall every being expected to.
The idea that an O/S vendor shouldn't bundle some piece of commodity software because someone else decides they want to make a business selling it as an add-on is foolish.
The price was the least of the issues here, but even if that wasn't the case, your argument doesn't work.
Isn't Arrington supposed to be a lawyer? Don't you remember the actual Microsoft case? It wasn't about whether MSFT was a monopoly. It was about the overt predatory actions MSFT undertook to maintain that monopoly. The MSFT action was a "when, not if" situation; MSFT blatantly strangled the browser market using their OEM monopoly.
The only fact TechCrunch has to marshall here is that Google is big and has commanding market share. But so does Apple in music, Microsoft in Office software, Intel in X86, Blackboard in educational software, Monsanto in GM crop strains, Bloomberg in financial terminals, several private health insurers in regional markets, and I can keep clicking through Google News results to generate more of these.
Talk about a conflict of interest...