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Old 09-25-2011, 02:06 PM   #222
Andrew H.
Grand Master of Flowers
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Join Date: Oct 2010
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1. Amazon is not a monopoly because it only has 15% of the book market. When Microsoft ran into trouble, it had 90% of the consumer market. And AT&T (the old Bell) had something like 98% of the phone market.

However, to some extent it depends on how you define the relevant market - if you define the market as the e-book market, Amazon has about 67% of that market. A lot more, but still not 90%. (And it is also in a market with robust competition).

2. Monopolies are not illegal. If 90% of authors decided that they wanted to sign exclusive contracts with Amazon because it offered the best deal, there is no legal problem with that.

3. It *is* illegal to use your monopoly power in one area to attempt to gain market power in another. If Amazon had monopoly e-book control, it would be illegal for them to tell authors that Amazon would only carry their e-books if they made their paper books exclusive to Amazon. This would be using their (almost) complete control of the e-book market to attempt to gain control of the paper market - and authors would essentially have no choice if they wanted to have an e-book.

This was basically what got MS in trouble - they were leveraging their OS monopoly to gain market power in the browser market. (There are, of course, certain issues with this ruling, primarily that many people would agree with MS's suggestion that a browser is part of an OS, in the same way that copying, disk defragging, or recovery functionality is (although there were once freestanding programs for all of these). However, there is also the widespread feeling that if MS didn't do this, it did something else just as bad.)

I've forgotten details of the AT&T breakup, but IIRC they were using their monopoly in residential service to control long-distance service (which was overly expensive to make local service overly inexpensive) and also to control the hardware market. (And probably more).

4. FPL is a utility. Which is not like the monopolies described above; it is a monopoly granted by a political subdivision in exchange for increased oversight and regulation. A utility will have a local monopoly on electricity or gas or water, but will be controlled by a political utility board, that will have to approve rate hikes, service changes, and any other issue that significantly affects service.
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