Competition and the Importance of Anti-Trust Laws for Americans- Part 2
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Are Our Favorite Digital Platforms Guilty Of Monopoly Behavior
Consumers love Amazon, Apple and Google. I certainly do.
And there is strong evidence that sites like Amazon are driving consumer prices lower.
How could such popular sites that are are lowering prices and increasing consumer satisfaction be guilty of monopoly or oligopoly business practices?
Yet legal and economic Academia are asking this question and they have labeled it the Amazon Question.
Amazaon:
The Amazon anti-trust paradox is that, while Amazon is lowering consumer prices and generating high consumer satisfaction levels, there is also evidence that Amazon is placing its own products on its platform to the disadvantage of competing products.
Even though this is called the Amazon Question, this anti-trust question touches many of our favorite platforms.
Google:
For example, Google is the dominate Internet search engine.
Google has been accused of placing its services, like maps, at the top of the first search page at the expense of other suppliers of the same service. Is this evidence of monopoly behavior?
(Importantly, this “Google” anti-trust question is not a question of political bias that is currently being raised by the Trump Administration. President Trump’s questions involve First Amendment free speech, information authenticity and transparency issues.)
Apple:
Apple is also being questioned regarding how it manages sales of Apple approved apps.
Apple requires that all Apple approved apps must be sold on the Apple App Store. Apple charges the app developer 20% of revenues for selling their app via the App Store.
Academia is questioning whether Apple’s exclusive sales practice is in fact unfair competition that precludes app developers from independently selling their apps? Could Apple’s practice be blocking suppliers from selling their apps at lower consumer prices?
In each of these cases consumers clearly benefit from the Google, Apple and Amazon’s platforms. (In full disclosure, I am an enthusiastic user of all three platforms.)
What academia is now asking is whether, even if a company is lowering consumer prices and consumers love their service, is that a defense for business practices that limit competition and the expanded consumer benefits that competition can generate?
How that question is answered could shape the future of America’s small businesses.
It almost certainly will shape consumer choices on what to buy and who to buy it from.
What Anti-Trust Actions Means To You and Our Economy
There are three drivers to economic growth. They are:
- Innovation.
- Increased productivity.
- A growing demographic of skilled and motivated workers.
Free and fair business competition is proven to stimulate innovation and increase productivity. It is the cornerstone for growing entrepreneurship.
Monopoly and oligopoly business practices, by definition, limit innovation, entrepreneurship and productivity because they limit competition.
The anti-trust question now being raised by academia is whether a lack of anti-trust actions by Congress and the Justice Department is now threatening America’s entrepreneurship, economic growth and global competitiveness?
There is also an emerging recognition that the floods in Houston and the Carolinas, or the fires out west, are made more intense by climate change created from coal, oil and methane emissions. Is there a link between the potentially anti-trust market powers achieved by large fossil fuel companies through their disproportionally large lobbying and campaign contributions and climate change?
This final anti-trust question is not academic but political which is:
How much more pain will consumers have to endure before academic anti-trust questions become a voter issue?
Related articles:
Competition and the Importance of Anti-Trust Laws for Americans- Part 1
4 Tips for Pursuing a Lemon Law Claim
What Does a “Free” Offer In Advertising Really Cost?
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