> We should not allow a company to have a share over around 10% of any market.
If a company was already at said 10% limit and you wanted to buy something out of them because to you their offer is by far so much better than any of the alternatives, in your opinion what should happen?
It's not a math equation you run through a computer and get a legal result out the other end. Congress (or whatever) could use this measurement as a tool to drive investigations so you can stomp out anti-competitive behavior before it becomes a problem
> It's not a math equation you run through a computer and get a legal result out the other end.
Not really. This has zero to do with math. At all. We have a buyer and we have a seller, both the buyer and the seller wish to perform a transaction, but then we have a regulator which arbitrarily wants to force them not to execute said transaction because of reasons.
And my question is terribly simple: to those who want to force someone like me from buying what I like from a seller I chose but they arbitrarily reject, how exactly do they wish to force me from buying what I'd like from who I chose to buy from?
No math, no numbers. I'm asking a very simple question: what then?
> No math, no numbers. I’m asking a very simple question: what then?
The comment you replied to answered your question. The transaction goes through, absolutely no additional regulation or control comes into play at the transaction level.
NOTE: I am not supporting this position, or opposing it. I’m just stating what the gp post said.
> The comment you replied to answered your question.
It really didn't, instead it weaseled out by putting up a strawman that pretends to put a loophole in a straight-forward and very clear way.
In fact, it's blatantly clear by itself the fact that no one proposed a single idea or suggestion about how to enforce that mysterious 10%. No explanation was given on the impact on customers, and how the sellers would be forced to not go beyond that 10%. Why is that? Is the idea undefendable?
If they are offering, you buy it. Regulation would affect their legal ability and/or willingness (depending on the style of regulation) to make the offer.
For instance, a regulation addressing this could involve a tax on gross receipts (not profits) in a defined market segment that was 0% at up to 8% share, and 50%×(10 - share in %) above that point.
The price would regulate itself by offer/demand balance and you would still be able to buy it if you can afford it.
With no limits, they can actually create artificial lower prices that competition can’t match, and they become exponentially more powerful and dominating.
And sometimes you end up as a customer having less options and lower quality.
if a company is maxing their sells, don't you think they will raise the price?, and play at a 9%, so there will be always room for new buyers willing to pay the price.
And honestly is hard to debate because it's an vaguely defined hypothetical, I guess we are talking about situations where the state limits how much you can produce.
I think is already happening if you think about Spanish Olive Oil for example, EU limits how much countries can produce, so the price goes up, still everyone that can pay for it can buy it, but at a price that represents the scarcity of it, otherwise you can choose other origin of same product.
I'm really not an expert in these topics, but that's my mental model of it, and I'm not even defend it as I'm not sure it is the optimal, specially the EU way about vegetable production.
> a company is maxing their sells, don't you think they will raise the price?
I said nothing about price. It is irrelevant. I shopped for a product and that particular company had exactly what I want, and they offer it in a way that makes it the absolute best option for my preference. The choice was made. The company wants to sell the product, I want to buy that product from them, but they hit 10% market share. What then? Am I free to buy what I want from who I want to buy it from?
This can happen already to you when products go out of stock, because the company doesn’t have enough capacity to produce, or they underestimate the demand, but after the company makes profit and reinvest in the next batch, they can adjust the price to balance the demand.
It’s not like you are already free to buy whatever you want, there are production limitations, and your budget limitation.
Right now big companies are allowed to give 100x better solutions at fraction of the cost, that makes imposible to other companies to compete and your freedom to buy is just not real, as many times you’ll be obligated to buy from the big fish, being the only alternative.
In the other hand limiting them, they will have to raise the prices and then it would make sense that something 100x more convenient is also more expensive.
Right now we have convenience and low cost, but it’s at the expense of killing smaller business and creating virtual monopolies.
> This can happen already to you when products go out of stock (...)
No, it can't. Your case involves a scenario where no transaction is possible because there is no product to buy or sell. It has zero to do with my very simple and very straight-forward example of a customer wanting to buy a product indeed sold and available and on the store of a seller who already reached its 10% market share.
My example is very clear, and for some reason all proponents of this virtuous 10% market share are either unable or unwilling to step up and either think their idea through or explain how they expect to implement their virtuous idea.
And this is a very simple and straight-forward example: a seller has a product I want to buy, I shopped around and that seller has the absolute best offer, I want to buy the product from that seller, the seller has the product on the counter and I have the cash at hand, but the seller already hit the 10% market share. What then? Is the next step so mysterious that no one can even come close to dare explain what they believe should happen?
You keep asking the same, What then? which leads me to think we are parting from very different scenarios.
Perhaps the difference comes from you thinking in a limit that applies as per number of products sold, and you could find yourself on that situation of "what then?" the product being on the shelve but you are unable to buy it.
I'm thinking in a scenario where the limit is on the production, similar to what I mention before, the EU controlling vegetable productions.
So you don't get to find the product on the shelve if it's already gone but you'll find some other brand, the ones that are better will be more scarce and more pricy as a consequence.
Now, do I want as a consumer that the best things are also cheap and available?, yes! of course!
But the question is, is that sustainable? and what happens to the market when we have this huge player that outcompete everyone else, and dictate the rules, and they are in a position to set the quality standards, long term we might be free to buy just from them under their own rules. Is that freedom?
I'm really not familiar with those proponents of the 10% market, I was just talking from my common sense, I don't think is crazy to put some limits, and we already have some in some industries, for better or worse.
I'm dropping it here, but thanks for sharing your point of view, I'll read you if you reply, always learning and open to change my opinion.
> Most answers are likely exploitative in some way
On what basis are you making a claim like that? Toyota sells roughly as may vehicles in the US a Ford and more than the other manufacturers. Their cars are in many ways better than their competitors qualitatively and often cheaper. Do you think they are exploiting people?
I could keep listing examples of market leaders that offer better products that are more aligned with consumer preferences, but I'm not sure that's going to convince you.
Yes, part of how they achieved this was by violating emissions standards for a decade, something that they've been fined for. I'd be willing to wager they engage in similar practices too.
>I could keep listing examples of market leaders that offer better products that are more aligned with consumer preferences,
Their existence alone won't convince me. You need to answer why the competition is unable to produce similar products at similar prices.
This began well after they entered the market and upset the dominance of established players.
> You need to answer why the competition is unable to produce similar products at similar prices.
The same way some people are better at given task. Many older firms are complacent, and operating on an understanding of the market as it existed in the past. Technology, consumer preferences, commodity prices, and other market conditions are constantly changing. If you see something you competitors don't you can offer better cheaper services. The bigger your competitors are, the slower they are to change course.
At bottom, firms are made up of people who are uniquely skilled and qualified. Better people in better systems will perform better. It can be dead simple sometimes. Firms with happier employees are often more productive.
If you don't understand the basics of competitive advantage, then of course you think companies can only gain an edge by doing something immoral. But this is ultimately sophomoric economic thinking.
>This began well after they entered the market and upset the dominance of established players.
I still find it unlikely that it is an isolated incident, but that decade is also when they started to pass the mentioned 10%.
>But this is ultimately sophomoric economic thinking.
Your attempt to explain why the competition may be unable to compete is "they're just better." Beyond that, you just say smaller is better, which is the point of my argument.
I think what OP means is that amazon is using all the data they have from their storefront to beat everyone in the market, which does seem unfair to me.
I get that, but it doesn't seem any different from any national retailer that sells store brand products along side competitors. I'm not even sure how unique this data is. Every corporation in America has access to relatively detailed data about their competitors' sales. There's a time delay, but know what's selling well is really a small part of executing on go to market strategies.
What does that mean - Investigation of what? By whom? and on what basis/framework? Can you propose something workable?
In any case, there are many reasons a company can offer a better deal - they have invested money and developed a new product/service that the competition cannot simply copy or negotiated a better deal with a supplier, or they're simply a better managed company, or about a million other things businesses can do to gain leverage over competition.
Also, like a closely fought game - the advantage could just be temporary. These things are very fluid.
If a company was already at said 10% limit and you wanted to buy something out of them because to you their offer is by far so much better than any of the alternatives, in your opinion what should happen?