I find her ideas (that Amazon is anti-competitive by being big) interesting, but I find her reasoning unconvincing. Her point is that breaking up large companies, merely because they are big, into smaller companies would improve the economy. She says:
"the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. "
She is upset because companies pursue growth over profits. I'm not sure I see this as a bad thing. Even if it were a bad thing, it's not something that only large companies pursue, it is probably more common among small companies.
She is upset because companies pursue growth over profits. I'm not sure I see this as a bad thing.
Khan is not upset about companies pursuing growth over profits. She believes this phenomenon now makes the Brooke Group recoupment test inadequate to fight predatory pricing. The current doctrine of the court is that predatory pricing must result in higher profits for the accused. If the plaintiff cannot show the predatory pricing led to higher profit, they are very unlikely to win in court. Khan's position is companies are not only driven by profit, and Amazon has been a pioneer in focusing on growth with a near disregard for profit. This is why she thinks the courts need to change their doctrine on how they determine if predatory pricing has occurred. Which in this case means including a growth motivate along with the profit motive.
I guess the only thing she is upset about is the court's reluctance to keep up with the times.
It's not really about "keeping up with the times". This is the way monopoly power has been abused since the 19th century. It's the courts that have regressed in their ability to see the bare basics of how monopolies operate.
It's not really about "keeping up with the times". This is the way monopoly power has been abused since the 19th century. It's the courts that have regressed in their ability to see the bare basics of how monopolies operate.
I am not aware of 19th century monopolists spending decades operating with little to no profit in order to grow their market share. I am under the impression they were making significant profit throughout their monopolistic practices. I'm not a historian though, so I could be wrong. If I'm right, though, things really are different today. At least they are different when it comes to how laws are applied and how liability is determined. I do agree that to a layman it certainly doesn't feel very different.
Strategy introduced by Japanese companies about 40 years ago.
I am unaware of Japanese companies taking a similar approach, at least not on a large scale. For all I know this was common throughout the world before Amazon, just not nearly on the same scale. I tried finding examples among Japan's largest companies, but their automotive companies, Hitachi, Sony, Post Holdings, AEON, etc. are all 70+ year old companies so they don't line up with your timeline. I would be interested to learn more though.
Some of the railroads may have operated that way, borrowing to build their railroad to have a monopoly in transport, perhaps even canal builders before that. In the railroads case, eventually the fix was common carrier status to stop them from leveraging their monopolies. The big difference back then was there just wasn't the cash floating around with the owners having nothing better to do with it then gamble by investing in the Amazon's and Uber's of the time. Banks couldn't loan out much more then they had
WARNING TO ALL PERSONNEL:
Firings will continue until morale improves.
Her paper (Score:3, Insightful)
I find her ideas (that Amazon is anti-competitive by being big) interesting, but I find her reasoning unconvincing. Her point is that breaking up large companies, merely because they are big, into smaller companies would improve the economy. She says:
"the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. "
She is upset because companies pursue growth over profits. I'm not sure I see this as a bad thing. Even if it were a bad thing, it's not something that only large companies pursue, it is probably more common among small companies.
Her second argument addresses A
Re:Her paper (Score:4, Interesting)
She is upset because companies pursue growth over profits. I'm not sure I see this as a bad thing.
Khan is not upset about companies pursuing growth over profits. She believes this phenomenon now makes the Brooke Group recoupment test inadequate to fight predatory pricing. The current doctrine of the court is that predatory pricing must result in higher profits for the accused. If the plaintiff cannot show the predatory pricing led to higher profit, they are very unlikely to win in court. Khan's position is companies are not only driven by profit, and Amazon has been a pioneer in focusing on growth with a near disregard for profit. This is why she thinks the courts need to change their doctrine on how they determine if predatory pricing has occurred. Which in this case means including a growth motivate along with the profit motive.
I guess the only thing she is upset about is the court's reluctance to keep up with the times.
Re: (Score:2)
It's not really about "keeping up with the times". This is the way monopoly power has been abused since the 19th century. It's the courts that have regressed in their ability to see the bare basics of how monopolies operate.
Re: (Score:2)
It's not really about "keeping up with the times". This is the way monopoly power has been abused since the 19th century. It's the courts that have regressed in their ability to see the bare basics of how monopolies operate.
I am not aware of 19th century monopolists spending decades operating with little to no profit in order to grow their market share. I am under the impression they were making significant profit throughout their monopolistic practices. I'm not a historian though, so I could be wrong. If I'm right, though, things really are different today. At least they are different when it comes to how laws are applied and how liability is determined. I do agree that to a layman it certainly doesn't feel very different.
Re: (Score:2)
Strategy introduced by Japanese companies about 40 years ago.
I am unaware of Japanese companies taking a similar approach, at least not on a large scale. For all I know this was common throughout the world before Amazon, just not nearly on the same scale. I tried finding examples among Japan's largest companies, but their automotive companies, Hitachi, Sony, Post Holdings, AEON, etc. are all 70+ year old companies so they don't line up with your timeline. I would be interested to learn more though.
Re: (Score:2)
Some of the railroads may have operated that way, borrowing to build their railroad to have a monopoly in transport, perhaps even canal builders before that. In the railroads case, eventually the fix was common carrier status to stop them from leveraging their monopolies.
The big difference back then was there just wasn't the cash floating around with the owners having nothing better to do with it then gamble by investing in the Amazon's and Uber's of the time. Banks couldn't loan out much more then they had