Originally published at: John Oliver points out some problems with tech monopolies | Boing Boing
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I noticed this in the news recently:
Time to contact Schumer about supporting innovation by preventing major tech firms from continuing their monopolistic practices. Is it a coincidence that an acronym for the three firms highlighted by John Oliver sounds like this?
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The crux of his point is one that many an economist harps on about how important antitrust is: we don’t know what we’re missing. Maybe there’s some company out there than could deliver stuff twice as fast and for half the cost of Amazon, but we’ll never know. Companies get huge doing something that impresses people at first, then becomes good enough, then becomes rent-seeking without anyone noticing. On the contrary, people demand to keep it that way, like frogs in the cooking pot.
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Exactly. We’re now behind the curve because of stifled innovation in too many fields (like alternative energy) because of past corporate influence in regulatory controls and the market. If there was a restriction in place to prevent them from engaging in anti-competitive practices, they found (or created) a loophole. With the rise of the gig economy, we now have more firms that will ignore health, safety, economic, and ethical concerns to create an advantage and eliminate rivals. The report below is just a minor example:
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The medical device industry is nowhere near as consolidated as the big tech companies, yet it has this problem in spades. It’s standard procedure for big med device companies to buy up startups with new & better technology just to kill the competition before it can start.
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One recent argument I’ve heard against monopolies/oligopolies is that when you go to regulate it the only qualified people came from those few large companies. When there’s healthy competition its easier to avoid perceived or obvious bias.
“We don’t know what we’re missing,” like you say, is hard or impossible to calculate. Unable to regulate and too big to fail seem like more concrete reasons.
This is another place where I think regulation can beat unregulated competition. I hate the credit card industry so very much, but am also not a fan of juggling new-fangled tech payment apps. They’re mostly for peer-to-peer payments, but when a business starts using one I wonder, “is there a fee? do they now have my email/phone number to harass me in the future? can I get a refund if there’s a problem? which app do they accept? how do I tie that app to my money?” I just want to pay for my artisanal cookie at the farmer’s market, but I also know that business owner is trying to lower their transaction fee or streamline how their money is handled.
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Absolutely. Imagine where cars would be without regulations to push fuel economy, pollution controls, and safety. Basically everything good in cars today is due to governments (Federal and California mostly) pushing the manufacturers to do better in areas that benefit society but that consumers won’t select for on their own. Regulation plays a crucial role in a competitive market economy.
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