Tim Wu sez, "I wrote something quick in the New Yorker about America's big blind spot when it comes to big business -- if its not a monopoly, its no problem, so highly concentrated industries can get away with whatever they want."
This blind spot is of particular significance during an age when oligopolies, not monopolies, rule. Consider Barry Lynn’s 2011 book, “Cornered,” which carefully detailed the rising concentration and consolidation of nearly every American industry since the nineteen-eighties. He found that dominance by two or three firms “is not the exception in the United States, but increasingly the rule.” Consumers, easily misled by product labelling, often don’t even notice that products like sunglasses, pet food, or numerous others come from just a few giants. For example, while drugstores seem to offer unlimited choices in toothpaste, just two firms, Procter & Gamble and Colgate-Palmolive, control more than eighty per cent of the market (including seemingly independent brands like Tom’s of Maine).
The press confuses oligopoly and monopoly with some regularity. The Atlantic ran a recent infographic titled “The Return of the Monopoly,” describing rising concentration in airlines, grocery sales, music, and other industries. With the exception of Intel in computer chips, none of the industries described, however, was actually a monopoly—all were oligopolies. So while The Atlantic is right about what’s happening, it sounds the wrong alarm. We know how to fight monopolies, but few seem riled at “The Return of the Oligopoly.”
Things were not always thus. Back in the mid-century, the Justice Department went after oligopolistic cartels in the tobacco industry and Hollywood with the same vigor it chased Standard Oil, the quintessential monopoly trust. In the late nineteen-seventies, another high point of enforcement, oligopolies were investigated by the Federal Trade Commission, and during that era Richard Posner, then a professor at Stanford Law School, went as far as to argue that when firms maintain the same prices, even without a smoke-filled-room agreement, they ought to be considered members of a price-fixing conspiracy. (By this logic, the Delta and US Airways shuttles between New York and Washington, D.C., would probably be price-fixers, since their prices do vary by how far in advance you buy, but are always identical.)
The Oligopoly Problem
I first started writing about the remarkable Joi Ito in 2002, and over the decade and a half since, I’ve marvelled at his polymath abilities — running international Creative Commons, starting and investing in remarkable tech businesses, getting Timothy Leary’s ashes shot into space, backing Mondo 2000, using a sprawling Warcraft raiding guild to experiment with leadership and team structures, and now, running MIT’s storied Media Lab — and I’ve watched with excitement as he’s distilled his seemingly impossible-to-characterize approach to life in a set of 9 compact principles, which he and Jeff Howe have turned into Whiplash, a voraciously readable, extremely exciting, and eminently sensible book.
In Does The Online Card Payment Landscape Unwittingly Facilitate Fraud?, a new paper in IEEE Security & Privacy, researchers from the University of Newcastle demonstrate a technique for guessing secruity details for credit-card numbers in six seconds — attackers spread their guesses out across many websites at once, so no website gets enough bad guesses […]
Michael Geist writes, “The global music industry has spent two decades lobbying for restrictive DMCA-style restrictions on digital locks. These so-called “anti-circumvention rules” have been actively opposed by many groups, but the copyright lobby claims that they are needed to comply with the World Intellectual Property Organization’s Internet treaties. Now the head of the RIAA […]
Holiday shopping is in full swing, and the Striiv Touch is one of the best gift ideas I’ve landed on. Its simple design works for females and males, and its wide range of features makes it suitable for even the non-fitness enthusiasts in your life.Unlike traditional fitness trackers, the Striiv Touch also acts as a smartwatch. It […]
The Pocket Tripod PRO had massive Kickstarter success in 2013, raising almost $85,000 in a single month. But this isn’t just another case of pre-release product hype. This ingenious little device folds out from a credit-card-shaped plastic slab into a sturdy stand with a surprisingly wide range of motion. In portrait orientation, your phone slides […]
Loot Crate is a totally different kind of subscription service that mails subscribers monthly boxes filled with curated geek, pop culture, and gamer paraphernalia. Its cult following awaits a box every month filled with everything from bobble heads to T-shirts to special edition collectibles. But nothing gets Loot Crate fans as excited as the limited […]