This is a topic that drives me nuts, monopolies. No, not the board game that takes hours to finish and can destroy friendships in the process, I’m talking about business liability, economic impact, what is technically deemed illegal, monopolies.
A monopoly is defined as the exclusive possession or control of the supply or trade in a commodity or service.
There are so many different angles one can examine this. Could certain monopolies be beneficial to the American economy? Absolutely. Do certain monopolies cripple the startups, and entrepreneurs within a said industry? Absolutely.
Our job as a society (or in this case the FCC) is to define a fine line between what monopolies are beneficial, and what monopolies potentially cripple the economy.
That’s the biggest issue right there, the definition of a monopoly is beyond vague, and corporations can always figure ways around it. This comes down to the FCC laying down a clear law, entailing obviously labels as to what a monopoly entails.
To the FCC’s credit they’ve blocked numerous purchases from gigantic corporations in the past. AT&T attempted to buy T-Mobile in 2011, the FCC blocked this purchase claiming the mobile industry would become a monopolized industry with few choices for consumers. However, apparently the FCC/recent judge ruling saw no such issue with AT&T purchasing Time Warner Cable. AT&T also bought DirecTV a few short years ago, which was also a deal that went through.
If a consumer thinks about their ‘cable’ options (excluding online streaming services), the major ‘players’ were Comcast, Verizon, DirecTV, Time Warner Cable, AT&T, Dish, and a few others.
Fast forward to 2018, Comcast, Verizon, oh… AT&T just bought half of the major competition. Well then…
This is where the FCC screws up. For some reason the T-Mobile purchase was a monopoly, but when it came to buying two major cable companies (in a span of a few years) the transactions are approved. Huh? Did I miss something? Is that not the same idea? Different industry, but the same idea.
So FCC, when we only have 2 mobile carriers, 3 ISPs, and 3 cable options in ten years down the line, it will be your fault because your lack of consistency.
Now not all major business transactions are negative towards consumers. A little over a year ago Verizon completed the purchase of Yahoo. Verizon obviously didn’t own a search engine, nor did Yahoo offer telecommunication services. A transaction like this benefits consumers as you combine two strong companies offering different services, that ultimately create an even better option. All meanwhile no competition was eliminated (see FCC, good transaction).
One of the biggest monopoly related gripes (I’m still stunned was allowed to happen) was Disney;s purchase of 21st Century Fox. Disney has purchased and currently owns Vice Media, Marvel Entertainment, Lucas Films, Pixar, Touchstone Pictures, ABC Networks, ESPN, A&E, Lifetime, the History Channel, and the list can go on…
‘Well, who’s left then?’
Great question. Essentially the only direct competitors standing our Universal Studios, 21st Century Fox, wait, sorry, Paramount Pictures (owned by Viacom), Sony Pictures, maybe a few other smaller ‘players’.
Was Star Wars not enough Walt? Was obtaining Marvel and making billions annually on repetitive movies not enough? No?
If this isn’t the definition of a monopoly, then they just need to ax the term all together, as it as officially become a mute term.
Going back to my initial statement, either redefine what a monopoly is clearly, or just acknowledge if it makes money, we allow it.
Going off of this, I think within that defined sentiment, create some type of location bylaw that states only a certain amount of retailers (of the same industry) can be located within a certain mile radius. Why?
Well people talk about how retailers are shutting their doors, food chains, corporate giants that have been open for decades. How is this happening?
When you put a McDonald’s next to a Burger King, across the street from a Wendy’s you really think all three (locations) will be able to survive in the long run? When you have a mall that contains a Sears, a JC Penny’s, and a Macy’s, you think all three stores remain open? Or when you put a Verizon next to an AT&T, next to a Sprint, you think Sprint is going to get enough customers to survive in the long-haul? No. You think Sprint wants to have a store 100 yards away from those two? Doubt it.
Put a type of location stipulation within this ‘monopoly’ bylaw, and it ultimately creates longer longevity for brands, retailers, and corporations of a vast variety.
It comes down to creating clarity of what a monopoly is, what kind of business transaction should be considered a positive transaction, and which are just pointless, greedy transactions that make one company rich, and eliminate consumer options.
Will we ever get this clarity? The fact the FCC attempted to repeal net neutrality likely tells us it’s kept unclear for a reason.