Comment by clairity
4 years ago
this is a classic example of how companies collude without direct communication. it's a type of game theoretic outcome that's actually taught in business school - how to read your competitor's intentions from public information (like pricing intentions) and legally act and counter-communicate publicly your own intentions to not compete (in many cases by not lowering price).
this can practically only happen in oligarchic markets (those controlled by a few large players) who can safely assume a smaller competitor won't undercut them. unfortunately, most major markets in the US are oligarchic, if not downright monopolized (e.g., cellular service).
This is a great comment. It drives me crazy how often people take concepts that apply to an idealized free market and apply them to an area that's controlled by a small number of entrenched behemoths. Very little of the tech industry these days operates like an Econ 101 free marketplace.
> this is a classic example of how companies collude without direct communication.
In that case, let's have that conversation as a society and as a government. "Are companies listed in Table 1 and 2 in collusion as defined by current law?".
In most of the Apple 30% conversations, the conversations seem to be about an instance (Apple) instead of an object (Digital Store Tax, Collusion etc). Lets set the frame and be clear about the conversation we want to have regardless of the business we talk. We can use Apple, Microsoft et al as examples to make the point. We shouldn't replace them with the overarching discussion.
as i understand it, by not communicating directly, companies avoid the most damning potential evidence that they are colluding. it's theoretically possible to still determine that their behavior is collusive, but quite difficult in practice.
i personally think anti-trust/anti-monopoly regulations should be tightened by an order of magnitude or so. any market that exhibits such extended, obviously inflated profit margins needs to be sliced up more finely. any market participant with more than ~10% market share should be scrutinized closely. piercing the corporate veil should be the norm with any anticompetitive infraction (as well as embezzlement, insider trading, and other such executive crimes).
in short, make markets fair (not just 'free').
and in turn, that should allocate capital more efficiently throughout the economy, rather than letting it accumulate inefficiently in fewer and fewer hands.
"Fair" and "free" are almost opposite values in regards to markets, what you want is not "free", you want regulation. Fairness means you got to oppress a party in favor of another party.
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> in short, make markets fair (not just 'free').
I'm all for it. What's your concrete proposal to change in the current law for digital store distribution "tax"?
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