Quote:
Originally Posted by K. Molen
This scenario is often being used to illustrate why Amazon and others like them are bad, but has this ever happened? I'm genuinely curious, as I can't think of a time or a company that's done what's being described here.
|
It was what was happening in the mainframe market when the U.S. government stepped in and forced IBM to stop following that scenario.
It is what happened in long distance telephony (and then local telephony) in the U.S. until the government forced the breakup of the original AT&T (not the AT&T of today).
It was what was happening in the Microsoft case regarding browsers, which resulted in government action in an attempt to make the browser field more competitive.
Yes, it has happened, albeit not frequently in recent years. Of course, it was much more rampant before the institution of antitrust laws, and was a major reason for the original antitrust legislation.
IBM, AT&T, and others all defended on the premise that new competitors would arise to challenge their supremacy. The argument wasn't bought because of (a) the cost to create a new business from scratch that would be marginally competitive was overwhelming and (b) left unregulated, the existing businesses could lower their prices sufficiently to make any new attempt stillborn.