Wednesday, 15 February 2017

"Monopolies Are Worse Than We Thought"

Good article on Bloomberg, via Steve S.

No point me summarising, go and have a read.


Shiney said...

"Regulation can increase monopoly power by raising barriers to entry."

'nuff said.

Bayard said...

S, isn't that the point of regulation? It wasn't so long ago that all the Wonga-type loan sharks were crying out to be regulated.

Mark Wadsworth said...

S and B, yes agreed, but that's widely known. The interesting bit was about network effects i.e. agglomeration benefits but applied to products rather than locations.

mombers said...

Our CEO said exactly that about regulation - absolutely brazen about it. More regs will push out the smaller players and allow more mergers

Shiney said...


Network effects have long been known as well. Had a discussion about it 20 years ago with a mate who was Commercial Director for Compuserve UK.

1 fax machine.... useless. 2 fax machines... not very useful. 1 billion fax machines....v useful indeed.

Same with email users, or skype users, or iMessage users, or.....

Mark Wadsworth said...

M, at least he said it.

S, for sure, all these means of communication are great stuff. As long as there are competing paper and ink makers, stage coach services, fax machine manufacturers, telephone manufacturers everything turns out for the best for everybody.

Problem is when one company hijacks that means of communication, and I mean specifically Microsoft. It's shit software but "everybody uses it" so people use it simply because everybody else does. And so Microsoft can help themselves to $50 a year from just about every computer user in the world ad infinitum.

This is clearly not a regulatory issue, there are competing manufacturers, but Microsoft's Achilles Heel is that they rely on governments to enforce their quasi-monopoly i.e. copyright or patents. If this was abolished, we'd all be $50 a year better off.

Shiney said...


Exactly... that is why Facebroke succeeded and Myspace failed - network effects.

Still, yahoo was there before Google but Google was better... so they won. I've no doubt MS, Apple, Google, Facebook yada yada yada will get usurped by the next big thing. At some point.

Government should make sure that all their systems use or are interoperable with, Linux/Open source and mandate that no use of Microsoft/Google/Facebroke/Apple by any of their departments. No more paying MS for Office licences. That'll learn 'em.

Bayard said...

In the early days of computing, I believe the Government weren't averse to using open-source, especially for servers and the like, but Microsoft and their lobbyists soon put paid to that.