Amazon Faces EU Antitrust Probe Into E-Books Contracts

[pwalker8]

Originally Posted by SteveEisenberg

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US trustbusters not only go after foreign companies, they also sometimes -- unlike the EU -- send their executives to prison. I like the EU approach better.

The way I read the Sherman Act, in the US, and Article 101, in the EU, is that they both leave a lot of room for interpretation and case law. So unfairness is certainly possible. But it's also possible that's Amazon's tremendous eBook market share is being defended in ways that make it impractical for smart competitors to succeed. If the EU competition authorities can using evolving civil antitrust standards to do something about that, it sounds good to me.

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* According to an estimate in a 2014 report on the e-book market, Amazon has a 79 percent market share in the United Kingdom, with the largest local e-book seller, Waterstone's, at 3.3 percent. Of course, if Britain leaves the EU, this won't be a good example.

While Amazon does adopt the Walmart approach (i.e. playing extreme hardball with the suppliers), I suspect that the primary barrier to competition is putting together the infrastructure and book contracts together rather than anything that Amazon is doing.

For the most part, I see anti-trust suits as government over reaches. It's pretty hard to maintain a monopoly or cartel for very long barring a government enforcing it. Markets tend to change too fast. Eventually, something will happen to either break Amazon's hold on the ebook market, just like the music market is slowly moving away from buying music to streaming music.

[zerospinboson]

Originally Posted by pwalker8

For the most part, I see anti-trust suits as government over reaches. It's pretty hard to maintain a monopoly or cartel for very long barring a government enforcing it. Markets tend to change too fast. Eventually, something will happen to either break Amazon's hold on the ebook market, just like the music market is slowly moving away from buying music to streaming music.

Oh please. Name me one market of consumer goods that isn't heavily oligopolized, and that doesn't have 5-6 players controlling 70+% of market share (increasingly world-wide). As soon as companies become big enough (and well after the period during which investing in that market was actually 'risky'), they will start lobbying for IP legislation (extensions), for the raising of barriers of entry, etc., while at the same time buying up or undercutting smaller players, thus creating further concentration.
That aside, "eventually everyone dies/Something Will Happen" is just about the worst policy ever. (And as for the music industry, the big 3/4/5 players that are left are still as dominant as they were before, they're just raking in slightly less money at the moment than they used to be.)

[pwalker8]

Originally Posted by zerospinboson

Oh please. Name me one market of consumer goods that isn't heavily oligopolized, and that doesn't have 5-6 players controlling 70+% of market share (increasingly world-wide). As soon as companies become big enough (and well after the period during which investing in that market was actually 'risky'), they will start lobbying for IP legislation (extensions), for the raising of barriers of entry, etc., while at the same time buying up or undercutting smaller players, thus creating further concentration.
That aside, "eventually everyone dies/Something Will Happen" is just about the worst policy ever. (And as for the music industry, the big 3/4/5 players that are left are still as dominant as they were before, they're just raking in slightly less money at the moment than they used to be.)

100 divided by 5 equals 20. Having 20 percent of the market does not a monopoly make. As long as there are multiple companies, there is competition. It's a pretty rare market that can support a large number of companies in a specific niche.

Your post pretty much seems to agree with me. You state that as soon as a company becomes big enough, it tries to get the government to raise barrier of entry. I said, it's rare to have a monopoly without government protection.

Eventually something happens tends to be the best policy. While I know that people tend to be impatient, it's usually best to give this things time to work it's way out. If by the same big 3/4/5 companies in the music industry, you mean the record labels, then I say so what? Musicians have never had so much choice in how they want to put out their music. They can go with one of the big labels, they can go with one of the multitude of small labels out there, or they can go independent. What more can you want? There are a half dozen different music streaming companies out there right now.