Home A thought about antitrust proceedings


Now that antitrust proceedings have been instituted against a major tech company after decades of not bothering, the time seems right to make a few relevant observations.  Should a company be broken up simply because it's gotten very big?  Suppose it's gotten that way in part because it's done wrong, such as depriving its customers or users of options to interact with other companies?  And how big do such instances of wrongdoing have to be before full-blown antitrust action should be taken?  And yet, maybe it's gotten big because it offers superior quality, especially in a range of different goods and/or services, even though it has done little or no wrong to employees or customers.  So what really counts?

The most obvious case, I think, is the over-diversified company (or non-profit organization) that does many types of things significantly worse than its more specialized and/or experienced (but not necessarily smaller), competitors do, drawing business away from them with its one-stop-shopping business model.  It might not become a true monopoly as currently defined by law, but goes too far toward becoming a monopoly in multiple product areas or even industries.  In a word, this kind of practice reduces wealth, not just because it worsens customers' choices but because it increases unemployment and decreases compensation because of reduced competition.

There are prominent examples of this;  I leave it up to the reader to think of what they are.

Copyright © 2020 by Dorothy E. Pugh.  All rights reserved.