Comment by __jal
8 years ago
Would you also say that the original phone system model (basically, ATT owns everything, including your handset) was equally immune to such criticism?
After all, consumers benefitted enormously from the phone system coming into existence. It only cost everyone else their ability to do anything with telephony ATT didn't like.
(Yes, government monopoly vs. private action. It doesn't change anything in terms of the presence or absence of actors in the space.)
> After all, consumers benefitted enormously from the phone system coming into existence.
You're mixing two distinct periods of time. When there was the expansion of telephone systems, there was no consumer harm, but when AT&T stopped others from entering the market by using its monopolistic power to prevent competition, there was harm to consumers.
Those two periods are over half a century apart.
Similarly, when SO invested in horizontal integration, it was great for consumers: the reduction in cost and standardization of plants and materials (oil, metals, etc.) created a boom.
But when it used its monopoly to prevent competition and extract rents, there was consumer harm.