Economics: What a monopoly isn't.

[GloryofGreece]

All three have competitors.
Monopolies are protected from competition.

Nothing is preventing new oil companies, new steel refineries, or new telecoms from arising.

No, I’m afraid anywhere you find a market where competition is forbidden, those restrictions are enforced by the government.

You really believe that shit, honestly?
We live in a world that is chalk full of oligopolies that yes are usually intertwined with the government but not always and not completely. No government no monopolies. A company can make it near impossible for a viable competitor by buying out the "competition" o idk like Google and Facebook have done over and over again. Just off the top.

[GloryofGreece]

Funny, I’m reading a textbook and it says marketshare is irrelevant to monopoly. Only thing that determines a monopoly is whether or not competitors can enter the marketplace.

Your arguing semantics. A small amount of companies control a lot of industries with and without the government's help.

[DBTrek]

You really believe that shit, honestly?
We live in a world that is chalk full of oligopolies that yes are usually intertwined with the government but not always and not completely. No government no monopolies. A company can make it near impossible for a viable competitor by buying out the "competition" o idk like Google and Facebook have done over and over again. Just off the top.

Who is stopping you from starting an oil company?

... and did you just call FB and Google monopolies? Because there are no other search engines? Because there are no other social media platforms?

You point to successful corporations that do not have sole control of their markets, and who have active competitors. Meaning your feelings of animosity toward them aren't stemming from any kind of monopoly, but rather a loathing of success in general.

Therein lies the danger - when academics, politicians, and socialists use a word like "monopoly" to take action against what is really "success".

[Speaker to Animals]

Oil is an oligopoly. It's a different dynamic. Did Sowell give you a toy definition of that too?

You can easily break into oil prospecting. That's wide open. That's actually a good area to get into in the coming years as we inch closer to peak.

Actual oil production? Not really. There are a few small firms that work with the high risk of dictators and the like, but they usually get burned (like when Venezuela stole all their assets about 11 years ago).

[DBTrek]

Government brings anti-trust legislation against company mergers effecting less than 8% of the market (not once, but repeatedly) - and Sowell is the one handing out toy definitions.


Whooo!

Good one.

[tue4t]

The idea that market share equals monopoly is demonstrably false. If I own the only shoe store in Topeka, Kansas, I’m not a monopoly - even if I have 100% of the Topeka shoe market. It’s not a monopoly because others can compete with me.

Think about it - any new, unique product would automatically be a monopoly upon release if market share determined monopolies.

“Brand new widget X goes on sale today”

“Quick, destroy that company. They have a monopoly on widget X markets!”

That’s not how it works.
It’s all about restricting competition.
Government can restrict new competitors from challenging Comcast, but Comcast can’t forbid start-ups from competing with them. To have a monopoly you need to suppress competitors and government is the tool of the suppression.

That's literally the definition of a monopoly, dude. A monopoly enjoys enough market share to be able to price competitors out and then adjust prices above efficient price once they control the whole thing. Monopoly. Textbook definition thereof.

No, monopoly derives from the ancient greek 'monopolion'. mono, meaning one. poleo, meaning I sell.

Only I can sell.

It refers to an exclusive right to deal or trade in a thing granted by an enforcing body. The word literally originated as a means to describe a constructed legal privilege. Think of a merchant buying monopolium rights to a certain spice within a certain area.

The ability to 'price compete' out relatively inefficient players does not in any meaningful sense indicate monopoly. You just basically described the operation of market competition root and stem. What are you going to do, abolish the market and centralise everything like the communists did?

Further, market players sell imperfect substitutes at higher and lower prices than their competitors all the time in the real world. Apple has yet to be 'priced out' despite charging relatively large mark ups on their smart phones, laptops etc. compared to the rest of their competitors. Are you arguing that it is moral for Apple to charge high prices, but immoral to charge low prices? What is the right price?

[Okeefenokee]

Just gonna point out that the Rockefeller model of bringing in the muscle aint really an option these days.

Blue Origin didn't get their foot in the door by burning down the rockets in the the Musk rocket yard.

Just because it happened then doesn't mean they have to do it now.

[jediuser598]

The three major Federal antitrust laws are:

The Sherman Antitrust Act
The Clayton Act
The Federal Trade Commission Act.
The following information on these laws comes from the Antitrust Enforcement and the Consumer guide.

The Sherman Antitrust Act
This Act outlaws all contracts, combinations, and conspiracies that unreasonably restrain interstate and foreign trade. This includes agreements among competitors to fix prices, rig bids, and allocate customers, which are punishable as criminal felonies.

The Sherman Act also makes it a crime to monopolize any part of interstate commerce. An unlawful monopoly exists when one firm controls the market for a product or service, and it has obtained that market power, not because its product or service is superior to others, but by suppressing competition with anticompetitive conduct.

The Act, however, is not violated simply when one firm's vigorous competition and lower prices take sales from its less efficient competitors; in that case, competition is working properly.

The Clayton Act
This Act is a civil statute (carrying no criminal penalties) that prohibits mergers or acquisitions that are likely to lessen competition. Under this Act, the Government challenges those mergers that are likely to increase prices to consumers. All persons considering a merger or acquisition above a certain size must notify both the Antitrust Division and the Federal Trade Commission. The Act also prohibits other business practices that may harm competition under certain circumstances.

The Federal Trade Commission Act
This Act prohibits unfair methods of competition in interstate commerce, but carries no criminal penalties. It also created the Federal Trade Commission to police violations of the Act.

Related Offenses
The Antitrust Division also often uses other laws to fight illegal activities that arise from conduct accompanying antitrust violations or that otherwise impact the competitive process, as well as offenses that involve the integrity of an antitrust or related investigation, including laws that prohibit false statements to Federal agencies, perjury, obstruction of justice, conspiracies to defraud the United States and mail and wire fraud. Each of these crimes carries its own fine and imprisonment term, which may be added to the fines and imprisonment terms for antitrust law violations.

https://www.justice.gov/atr/antitrust-laws-and-you

[jediuser598]

Here is how the government defines monopolization:

Monopolization Defined
The antitrust laws prohibit conduct by a single firm that unreasonably restrains competition by creating or maintaining monopoly power. Most Section 2 claims involve the conduct of a firm with a leading market position, although Section 2 of the Sherman Act also bans attempts to monopolize and conspiracies to monopolize. As a first step, courts ask if the firm has "monopoly power" in any market. This requires in-depth study of the products sold by the leading firm, and any alternative products consumers may turn to if the firm attempted to raise prices. Then courts ask if that leading position was gained or maintained through improper conduct—that is, something other than merely having a better product, superior management or historic accident. Here courts evaluate the anticompetitive effects of the conduct and its procompetitive justifications.

Market Power
Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power — that is, the long term ability to raise price or exclude competitors. That is how that term is used here: a "monopolist" is a firm with significant and durable market power. Courts look at the firm's market share, but typically do not find monopoly power if the firm (or a group of firms acting in concert) has less than 50 percent of the sales of a particular product or service within a certain geographic area. Some courts have required much higher percentages. In addition, that leading position must be sustainable over time: if competitive forces or the entry of new firms could discipline the conduct of the leading firm, courts are unlikely to find that the firm has lasting market power.

Exclusionary Conduct
Judging the conduct of an alleged monopolist requires an in-depth analysis of the market and the means used to achieve or maintain the monopoly. Obtaining a monopoly by superior products, innovation, or business acumen is legal; however, the same result achieved by exclusionary or predatory acts may raise antitrust concerns.

Exclusionary or predatory acts may include such things as exclusive supply or purchase agreements; tying; predatory pricing; or refusal to deal. These topics are discussed in separate Fact Sheets for Single Firm Conduct.

Business Justification
Finally, the monopolist may have a legitimate business justification for behaving in a way that prevents other firms from succeeding in the marketplace. For instance, the monopolist may be competing on the merits in a way that benefits consumers through greater efficiency or a unique set of products or services. In the end, courts will decide whether the monopolist's success is due to "the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident."

Example: The Microsoft Case
Microsoft was found to have a monopoly over operating systems software for IBM-compatible personal computers. Microsoft was able to use its dominant position in the operating systems market to exclude other software developers and prevent computer makers from installing non-Microsoft browser software to run with Microsoft's operating system software. Specifically, Microsoft illegally maintained its operating systems monopoly by including Internet Explorer, the Microsoft Internet browser, with every copy of its Windows operating system software sold to computer makers, and making it technically difficult not to use its browser or to use a non-Microsoft browser. Microsoft also granted free licenses or rebates to use its software, which discouraged other software developers from promoting a non-Microsoft browser or developing other software based on that browser. These actions hampered efforts by computer makers to use or promote competing browsers, and discouraged the development of add-on software that was compatible with non-Microsoft browsers. The court found that, although Microsoft did not tie up all ways of competing, its actions did prevent rivals from using the lowest-cost means of taking market share away from Microsoft. To settle the case, Microsoft agreed to end certain conduct that was preventing the development of competing browser software.

https://www.ftc.gov/tips-advice/competi ... on-defined

[DBTrek]

I like how this rather eye-opening truth:

That is how that term is used here: a "monopolist" is a firm with significant and durable market power.

a.k.a. “Successful”

... is followed by something I’ve already demonstrated through case citations to be a lie - that courts generally only consider 50% market share or greater as monopolies. Tell the Brown Co shoe company or Von Gricers about that.

Oh wait, you can’t- because after the government trust-busted them both of these “staggering monopolists” went out of business.

Derp.