Comment by kalaksi

> Don't bigger companies also often benefit from scale in multiple ways so it gets harder and harder for newcomers to compete?

That is one of the ways a Moat can happen and a monopoly can occur. For example if you were the only person with a loom and everyone else had to make jumpers by hand, you could make them so cheap they would have to close down.

In some markets those ways you can benefit from scale exist, in others there are drawbacks. In many cases those advantages only exist due to either regulation or lac thereof.

For example ways companies might have an advantage is by manufacturing in cheaper countries, but that only works because those workers have less rights and the cost of transporting is not properly taxed. Carbon taxes on shipping would make manufacturing in China pretty comparatively priced to many european countries. But if you let them contaminate the ocean with crude oil boats, then their manufacturing prowess and cheaper labour cost will offset the shipping cost and destroy a newcomer.

These are very basic examples and they all require nuance but hope it helps to explain it a bit more.

Another example is restaurants, you used to have some advantages from being a chain, but you would still constantly see mom and pop joints compete and even win. But as rent prices keep increasing (the non elastic market of the ground under the lease), suddenly the advantages of scale start beating the disadvantages of worse food and service.

MS did a lot of lobbying to prevent European governments from trying to migrate to Linux and/or OpenDocument.

Groklaw was a website that was started by a paralegal to try to understand, explain and report on the SCO lawsuit - who benefited and how they benefited. It ended up expanding into the EU anti-trust action against Microsoft and OpenDocument (and how OpenOffice was created as a trojan horse to defang OpenDocument).

https://en.wikipedia.org/wiki/Groklaw