Antitrust Suit Aimed At Amazon, Borders Books
from the say-what? dept
This has to be a case of someone suing for the sake of suing. It seems that a California consumer is so upset that Amazon is now powering Borders Books' website that he's suing them for antitrust violations. This is ridiculous on many levels. The simple fact that there are tons of other bookstores (both small and large) online should be evidence enough that this is a waste of time. Plus, if anything, Amazon has continued to lower their prices (such as by offering free shipping) as they compete with other booksellers - not exactly the standard practice of a monopolist.
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Amazon
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Re: Amazon
The point of having a monopoly is to extract monopoly profits, and you do that by charging a higher price than what the competitive market would establish. There are ways to determine what the maximizing profit price is in a monopoly, but I won't get into that right now.
If you are charging at or below the competitive price, then you're not a monopoly. Clearly, you're competing on some level, because you're underpricing someone else.
Now... everyone brings up the Microsoft example. Here's the difference: Microsoft isn't underpricing in the market they have the monopoly on. They have a monopoly (of sorts) on operating systems, and they use that monopoly to leverage their way into other markets where they underprice.
If, as this suit is accusing, Amazon has a monopoly on books, then they would be charging more for books - to get the monopoly profits (otherwise, why bother?). If they were underpricing, then it would be in a different area they were using their monopoly power to push their way into.
It doesn't make sense that Amazon would use their monopoly power to leverage their way into the market in which they already have monopoly power. The fact that they need to underprice shows there's competition...
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