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Amazon, monopolies, and anti-trust
From: "Dave Farber" <farber () gmail com>
Date: Mon, 7 Aug 2017 17:23:16 -0400
Begin forwarded message: From: David Magda <dmagda () ee ryerson ca> Subject: Amazon, monopolies, and anti-trust Date: August 7, 2017 at 5:08:43 PM EDT To: Dave Farber <dave () farber net> [For IP?] A 24,000-word article on (the lack of) anti-trust enforcement in recent decades, using Amazon as an example:Although Amazon has clocked staggering growth, it generates meager profits, choosing to price below-cost and expand widely instead. Through this strategy, the company has positioned itself at the center of e-commerce and now serves as essential infrastructure for a host of other businesses that depend upon it. Elements of the firm’s structure and conduct pose anticompetitive concerns—yet it has escaped antitrust scrutiny. This Note argues that the current framework in antitrust—specifically its pegging competition to “consumer welfare,” defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output. Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive.http://www.yalelawjournal.org/note/amazons-antitrust-paradox Cory Doctorow has a bit of a summary:Last January, a 28-year-old law student named Lina Khan published a 24,000-word article in the Yale Law Journal unpicking a half-century's shifts in anti-trust law in America, using Amazon as a poster child for how something had gone very, very wrong […] .[…]The Chicago School holds that monopolies are only bad when they result in higher prices ("price theory") and that everything else -- the "structuralist" worry about rich people amassing political power, or making inferior goods, or screwing their workforce, or holding back innovation -- is just a distraction.[…]Using Amazon as her poster-child, Khan argues that whatever problems this approach had in bricks-and-mortarland (she highlights several), the combination of networks, digital goods, data-oriented retail, and huge pools of investment capital willing to float businesses like Amazon using their profits from one area to sell goods below cost in others to the detriment of their competitors, make mincemeat out of price-theory. The digital world -- where each customer might pay a different price, where retailers can use algorithms to price their competition out of existence -- is one where costs of one category of goods can't possibly capture the wider harms of monopolistic practice.[…]The problem with Amazon isn't that it's now really easy to get a wide variety of goods without having to shlep all over the place trying to find the right widget (or book). The problem is the effect that this has on workers, publishers, writers, drivers, warehouse workers, and competition.https://boingboing.net/2017/08/07/economists-so-fragile.html
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- Amazon, monopolies, and anti-trust Dave Farber (Aug 07)