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Author Topic: Sainsbury's-Asda merger.  (Read 5522 times)
teddybloat
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« Reply #30 on: February 22, 2019, 06:54:50 PM »

The point is we don't need government intervention to break up monopolies. And when companies approach effective monopoly power they tend not to reduce output. When they stagnate competition breaks them up anyway.

Governments create monopolies all the time through zoning, licencing, bowing to lobby groups etc. Rent seeking and cronyism is a much bigger problem and causes directly by government involvement.

Much better to keep them out of markets altogether.

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buffyslayer1
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« Reply #31 on: February 22, 2019, 08:06:16 PM »

buffyslayer1

Well stars are not a monopoly by any means. they acquired a huge market share by out competing bigger rivals on price, spread of games and customer service. they may be currently be exploiting their customers but there are sites like party poker and new start ups like RIO poker that are seeking to innovate and take back their market share.

years ago planet poker or party were the monoliths.


government should be staying out of mergers altogether.


if there ever is a case where companies can simply exploit customers by increasing profits without increasing output then very quickly they will attract rivals. and competition does not usually come from imitation, big companies are blindsided by innovation.

EMI buys virgin and is blind sided by the ipod.

Nokia completely owns the mobile market and doesnt see the iphone.

Microsoft is famously run through the courts for bundling internet explorer and exploiting  monopoly power and at the same time open source projects like firefox overtake them. they are also out manoeuvred by apple and google. they lose market share not to other PC operating systems but people using tablets, televisions and phones to access the internet and perform computing tasks. They could not have seen these changes coming.

IBM's monoploy case lasts about 15 years, by the time it came to an end it was a bit part player as the home computer had become ubiquitous and its mainframe monopoly wasn't worth a carrot.

we didnt need governments to break up these so called monopolies. its worth noting that none of those companies attempted to reduce output when they had so called monopoly power.

you may get some short term protection for some consumers but in the long term breaking up companies, preventing them from merging, and not allowing signals to be sent to markets makes us all worse off.

re suppliers.


Suppliers prices may well be squeezed. but they cant be forced below the marginal cost, otherwise they would be better off not selling at all.

an equilibrium will be found and the although a small sector will see reduced profits the benefits are accrued by consumers.

You are factually just wrong here.

Pokerstars is effectively a monopoly especially in specific areas like sit and gos and sngs they have the overwhelming share of the market.

In fact I believe under UK terms a company only has to have around 25% of the market to be considered a monopoly. They have way way more than that with just .com/es alone not even including .es
Just because they became a monopoly by being the best supplier of games doesn't get away from the fact that they are one.
From the day they acquired ftp and amaya took over they have been exploiting their position.


Does this mean they will always be #1 by such a huge margin no. But that's not the point. You asked if any monoply had actually abused their position and there are countless examples I just happened to name one.

Which they almost certainly are at the moment and basically getting away with it.


« Last Edit: February 22, 2019, 08:09:44 PM by buffyslayer1 » Logged

teddybloat
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« Reply #32 on: February 22, 2019, 08:17:35 PM »

and what will happen to them because of that?

would customers be served by stars being split into two or three smaller sites?

poker is a weird market in that it will tend to there being one big provider as people want to play where the guarantees, spread of games and traffic is best. the market isnt big enough for multiple sites with queues of people wanting to play 6 max SnGs

stars is the latest incumbent of that role. if they exploit their customers they might not be for very long. it might not be another poker site that takes their place either.

also its worth noting that although high volume professionals and people running bots have moved to sites like party that welcome that sort of customer, stars has made massive changes that appeal to recreational players - gamification of rewards and poker, high variance short stacked jackpot poker, etc etc. those players may not feel as exploited as players who are rake sensitive and rely on poker for a living.

would you argue for government involvement in stars?


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Jon MW
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« Reply #33 on: February 22, 2019, 08:25:20 PM »

It's a bit weird that you're arguing that monopolies exploiting their customers is ok because they might not be able to do it forever.
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buffyslayer1
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« Reply #34 on: February 22, 2019, 08:27:06 PM »

and what will happen to them because of that?

would customers be served by stars being split into two or three smaller sites?

poker is a weird market in that it will tend to there being one big provider as people want to play where the guarantees, spread of games and traffic is best. the market isnt big enough for multiple sites with queues of people wanting to play 6 max SnGs

stars is the latest incumbent of that role. if they exploit their customers they might not be for very long. it might not be another poker site that takes their place either.

also its worth noting that although high volume professionals and people running bots have moved to sites like party that welcome that sort of customer, stars has made massive changes that appeal to recreational players - gamification of rewards and poker, high variance short stacked jackpot poker, etc etc. those players may not feel as exploited as players who are rake sensitive and rely on poker for a living.

would you argue for government involvement in stars?




No I would not and nowhere mentioned that I even think government intervention is they way forward.

I really am struggling to work out what your point is.

You said you could not think of a single example of a monoply exploiting its customers. I simply provided one of which there are countless.

Hell, Argos who I was a senior buyer for got taken to court for price fixing in toys category which they had a monopoly on at the time. Exploiting their customers into paying higher prices and paid some huge fine. Though actually it was one the the manufactures doing it.

Nike and Addidas have been price fixing for 20 years between them to make consumers pay higher prices. The prices of their products to retailers are exactly the same to the penny and always have been (I used to buy sports equipment).

Their are so many examples of customers/suppliers being screwed over by firms with monoploy powers in a market. In general they are very anti competitive and make huge barriers to competition.

Eventually it seems the market corrects itself, I.e Tesco were abusing their power for years no longer dominant. Argos who I used to work for no longer dominant in toys. Stars I am sure will go the same way (hopefully).

It doesn't mean they are not damaging in the short to medium term though which was what I was stating.
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teddybloat
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« Reply #35 on: February 22, 2019, 09:09:39 PM »

but it is only short term. and monopolies are broken up by competition and innovation.

we don't need government involvement.

think of the time and money wasted in the court sytem for the microsoft  or ibm cases. they dragged on for years. and by the time the cases against them ended they were both somewhat peripheral players in markets that didnt even exist when the anti-trust / monopoly cases where being made against them.

that's an incredible amount of human capital and money being wasted by governments having a very static and narrow view of a dynamic world.

keep them out of it.

it wouldn't bother me in the slightest if there ended up being just one player in a particular market as capitalism is a destructive as well as creative force and very quickly the incentives and capital for innovation would flow into that sector and the benefits are accrued by consumers.
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Pokerpops
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« Reply #36 on: February 23, 2019, 06:57:59 AM »

Does the monopoly position held by your local water company operate to any consumer advantage?

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teddybloat
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« Reply #37 on: February 23, 2019, 08:39:22 AM »

I dont think monopolies work to consumer advantage.

I simply don't believe that the economy is static enough for a company to reduce output and increase profits without attracting competition. That competition will not be by imitators, but innovators and that we benefit.

If the Tesco merger goes ahead they will not be able to stagnate and maintain profits. There's already too much competition and who knows in 15 years we might be printing our food on our homes three diamonds printer.

And we shouldn't have an expensive court case to prevent them merging.
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