# Monopoly?



## ElDiabloConCaca (Apr 8, 2010)

Had a discussion on another forum about monopolies and monopolistic practices.  Just wanted to post a poll and gauge to see if I'd get the same kind of answers here.

Be anonymous, or don't be anonymous -- this type of discussion always provides for a lively debate.


----------



## Rhisiart (Apr 8, 2010)

I suppose it depends on the context in which the monopoly operates. I can't see it being illegal in every instance. However monopolies can be unfair and generally bad for markets and trade. So it is not unreasonable to regulate them.

P.S. Shouldn't we have more than one thread on this subject?


----------



## bbloke (Apr 8, 2010)

So far as I've understood it in the past, being a monopoly is not a problem, but abusing one's position as a monopoly is.  In the UK, I believe that the Competition Commission can get involved when there are proposed mergers of large companies, for instance, and processes can be blocked where there are concerns on behalf of the public interest.


----------



## reed (Apr 10, 2010)

I'm no economist but monopolies have nothing to do with Capitalism. Competition. True blue competition is capitalism. If only I had bought all the "Railroads" and "Water Works" I would have won the game. Then again I would have sold the lot just to make sure all is well in my "game." I lost the game. But I still had Parks Place and boy! when they landed on it I was still alive until I fell on Marven Gardens. Goodbye Charlie.
  No need to go into the greed "people".... and boy! there are so many!

 One goes to the store.... one sees what it cheaper for the same product. One compares prices. If it's the same thing you buy the same product at a cheaper price. No?
 (China "crap" is another thread)
 However, (and I'll make this short), if there is a monopoly...... you HAVE no choice. "They", the ugly monopolies run the show. Again... you have no choice. "Take it or leave it!!!"
  I like to have a feeling that I can decide. When I can't do that there is something wrong. Back to square one. Microsoft? for example?
  It's a tough job, but we must not fall into the trap and be run by a monoply. Good luck to us all. Cheers.


----------



## ElDiabloConCaca (Apr 10, 2010)

I see we have our first "true" -- and to that, I pose this:

Two competing companies exist offering a product to the public, and are in healthy competition with each other.  Nobody else produces this product.  Overnight, one company blows up in a fireball and is wiped off the face of the earth, leaving solely the other.

That remaining company, by no fault nor tactic of their own, is now, by default, a monopoly.

Still illegal?


----------



## Mikuro (Apr 10, 2010)

I'm sure this varies from country to country. In America, a monopoly is not inherently illegal. Anticompetitive practices are illegal. For instance, Microsoft was found guilty in the 90s not because they were a monopoly (strictly speaking, they were not), but because they used their dominance in the OS market to unfairly stifle competition in other markets (most notably the web browser market, but that was only one of many).

If you're not actively handicapping your competition and you simply make a better product that runs them out of business, it's generally not a problem. But this does not happen very often. 

If Pepsi went out of business tomorrow, I don't think any government would need to split apart Coca-Cola.


----------



## Cam (Apr 10, 2010)

I have had some training (by my company as to avoid this behavior) on monopolies. Being a monopoly is not illegal in the US but anti-competitive behavior is illegal. So you can't try to become a monopoly by driving out competition or preventing them from starting. 

I followed the Microsoft story at one time, they settled a complaint of bundling the browser with the OS. 

http://en.wikipedia.org/wiki/United_States_v._Microsoft


----------



## reed (Apr 11, 2010)

Yes, that about sums it up Cam. I suppose my pet peeve is when there is "no choice" which I said earlier and all of you have made very good points. 
  What's the solution? Do the big agrobusiness "farms", for example, that eat up (sorry for the pun) the small ones have the right to dictate what we buy at the super/local market for food?  Pesticides, etc. included.
  I'm a bit worried about that. We must consume what certain agro-mega farm "monopolies" say we must. Diversity in every sense of the word is in danger. What do guys think?


----------



## ElDiabloConCaca (Apr 11, 2010)

Yes, they can do exactly that.  He who controls the market dictates the price and product.

Fair-market being what it is, we wouldn't expect said company to stay in business very long if they got greedy and jacked the price up 1000% or so -- people simply wouldn't buy that product.

The government steps in and regulates (either by completely taking over or splitting up the monopoly [ex: AT&T to SBC and back again]) when this happens -- and when it involves a service that the people seemingly cannot do without or would hurt the economy in a drastic way (gasoline, telecom, credit, etc.).

I know that being a monopoly is not illegal in the US -- it's how one _becomes_ a monopoly that could be illegal (price-fixing between companies, anti-competetive practices, etc.).  This poll stemmed from a discussion on another site that threw around the idea that Apple has some kind of "monopoly" on the App Store (which they do, but "monopoly" isn't really the term) and therefore someone should step in and force them to open it up... or something like that.

I think the poster of that argument somehow misunderstood the basic definition of "monopoly" and thought that monopolies were inherently illegal.  I think a lot of people have this misconception largely due to the whole Microsoft shenanigan, which wasn't about Microsoft having a monopoly on different things so much, but exactly how they got to that point.

Basically, the person just didn't like Apple's vertical-integration style of the App Store and the fact that the iPhone/iPod touch/iPad is a closed platform... no different from your Ford's engine-control computer, or your Sony DVD player, or your microwave oven, or... but you don't hear people complaining that they can't load a different menuing system on their VCR, or they can't change what "power level 10" does on their microwave.

The closed-platform is working for Apple in a huge way, and these confused people don't have to like it, but that doesn't make it illegal.  The level of sense of entitlement is mind-boggling sometimes these days.  Plus it makes me wonder why they bought an iPhone to begin with... in the words of a very intelligent man somewhere, "Don't go running your head into a wall over and over again then come around here bitching about your headache."


----------



## Rhisiart (Apr 11, 2010)

I suppose it boils down to the ethics of the company.  Some monopolies may exist by virtue of having no competitors. But for a large monopoly company to make it difficult for other new businesses to compete fairly in the market is ethically untenable.  Regulation is this the only way to prevent this.

However cartels are another way of unfairly monopolizing markets. Take the utility companies in Great Britain, who often allegedly (and I stress allegedly to all you lawyers out there) pool together prices to keep them artificially high for customers. That is de facto a monopoly.

Going off on a completely different tangent altogether I read somewhere that a company in the US manufacturing home bread making machines were finding sales very slow.  So they brought in a sales consultant who suggested they made a few mega sized and grossly expensive bread making machines and put them in window displays next to their standard cheaper models. 

The bread machine company said that was crazy as no one would be able to afford them. However the sales consultant got it spot on. When people looked in the window display and saw the shiny mega expensive machine they than cast their eyes on the cheaper models and thought Hey thats good value for money! Hence sales shot through the roof.

Just goes to show how customers can be duped into buying things they probably dont need. 

Another example of consumer folly is the guy who goes into a shop to buy a fountain pen, which costs (say) $12. Just before he buys it another customer says Hey, if you head across town to McGills you can get the same pen for $8. So the shopper heads off across town and makes a saving (despite battling though traffic and increased petrol cost).

Two days later the same guy goes into a retail shop to purchase an expensive suit. It costs $468. Sure enough, just before he pays for it another customer says you can get the same suit across town at McFahertys for $450 dollars. Does our man hotfoot it across town? No. He says "What the hell, not worth it at these prices." Yet he could have saved twice as much as he saved on the fountain pen. Nuts isnt it?


----------



## Cam (Apr 11, 2010)

I have also watched the agribusiness a bit. There are some big players that could cause concern, though we still pay less for food here than in other countries. Things like pesticides can turn on them quickly if the public gets outraged. They probably hate the power the public has to change policy or food preferences. I am sure they would like to give us what they find the cheapest. And maybe most do. But the market seems to have legs for alternative supplies to pesticides (or other farming practices that are unsavory - or we the public decide is unsavory). So in this case public awareness and preferences to have a large influence.


----------



## reed (Apr 12, 2010)

Oh, indeed CAM. And it is turning "on them". And us, the consumer, I might add.
 The reason why ecology parties are gaining ground.... 
 In Europe it has become such a major problem. Algae off the Brittany Coast is killing fishing and tourism, for example. The beaches, in certain regions, are awash with this struff ..... all due farmers using pesticides in huge quantities. In Germany to use bio-fuels one has to grow corn fast and furious but the pesticides are poisoning the rivers and the land. A price to pay for lower prices for fruits, vegetables or bio-fuels? Of course, there is the importation from countries that need to export and where the consumer demands certain products, even if off season. Which is an error. But that is another story. 
  Again, it's the "big guys" who are running the show more and more. Organic farming is making headways, but still has a long way to go. 
  This is worldwide. Of course. Bon appetite.

 Keep an eye out for this French documentary which will come out eventually in the States and elsewhere....

 There site is only in French for the moment.........

http://www.solutionslocales-lefilm.com/cartes-des-solutions


----------



## Cam (Apr 13, 2010)

I will have to wait for the translation....


----------



## icemanjc (Apr 13, 2010)

I haven't really looked through this yet to make sure it fully works, but try this out.


----------



## reed (Apr 15, 2010)

yes icemanjc, that's the site. One has to click around. But as I said to Cam it's only in French for the moment. Worth a "look-see" when translated. The film will eventually come out in the States and the UK. But where? Only big cities, like New York? London? All depends on distribution for low-budget but interesting films. See my thread. Cheers.


----------

