Should competition law be abolished?

[ryan14]

I think competition(anti trust) law should be abolished. I do not like it because it prevents businesses from being as successful as they want to be. It would be unfortunate if smaller businesses cannot compete with larger ones, but to me that is NOT an excuse to stop businesses from being as successful as they want to be.

For example, lets say BOB was a successful swimmer and won all his races and all the companies only wanted to sponsor BOB and not any other swimmer. I feel sorry for the other swimmers. But if the government required BOB to give up some sponsorship so businesses may choose to sponsor other swimmers, I would be disappointed because BOB should not have to give up some sponsorship to help out other people.

So do you think competition law should be abolished? I do.

 

[Kludge]

It can be relevant. Let's base it off a true story and look at video card companies. There is Video Card A (VCA), Video Card B (VCB), and "PC Assemblers" (PCAs).

VCA wants to knock VCB out of business so they can take their market share. VCA tells PCAs they will receive steep discounts on VCA products if they refuse to sell VCB products. PCAs mostly comply and VCB faces a massive over-supply and is pushed into liquidation.

Sure, VCA has succeeded, but this clearly isn't the ideal solution for consumers and the industry as a whole as VCA will continue using similar tactics to keep competition out of the market. With a monopoly, VCA will increase prices, stop marketing, and dramatically reduce their R&D expenditure.

With anti-trust legislation, VCA loses incentive to gain market share beyond 40-50% through unsavory means. Businesses are still allowed to be successful under the current system, just not purposefully sabotage their competitors.

That said, I oppose the legislation on philosophical grounds.

 

[Kludge]

Walmart sees some monopoly-type benefits in using the reverse of the tactic I listed above. Their purchaser team has their work pretty much done for them.

Walmart controls the lion's share of national retail sales. Let's say Lysol sells 4m units (1m to Walmart) and generally sells product @ $3.29. Walmart's buyers say "Make it $2.20 or we'll stop carrying your product." There are a few major reasons Lysol will be practically forced to comply with Walmart's demand: 1) Walmart "markets" so much of Lysol's products by putting them on their shelves that Lysol would probably see ~20% less sales if they didn't comply. 2) Decreased demand for their product will result in restructuring which is never favorable for the company liquidating. Lysol will need to break contracts with manufacturers, reduce employee/exec. pay, and pass on some of the harsher conditions to the manufacturers, who will also need to "cut the fat" out of their budgets.

What will result is fewer jobs, lower tax revenue, and a less prosperous people. It isn't too much of a stretch for government to claim it's in the Public's interest to restrict Walmart's purchasing tactics.


Edit: the obvious argument against restricting what Walmart does is that it benefits the consumer through lower prices, thus increasing their purchasing power. The point I was trying to hint at, however, was that the ability for Walmart to suddenly demand different prices creates volatility which is inefficient as shown in how Lysol will be liquidating to either meet dramatically lower selling prices or dramatically less volume sold.

 

[ryan14]

wow the poll is in my favor. I feel good that people agree with me.

 

[Icymudpuppy]

Before we dismantle only anti-trust laws, we need to disallow any government regulation of business so that corporations can't legislate their competition out of business.

 

[forsmant]

We still need to regulate business. We need regulations to prevent fraud and to keep business honest. Regulation should assist honest business and punish dishonest ones.

 

[mojobo]

I think competition(anti trust) law should be abolished. I do not like it because it prevents businesses from being as successful as they want to be. It would be unfortunate if smaller businesses cannot compete with larger ones, but to me that is NOT an excuse to stop businesses from being as successful as they want to be.

For example, lets say BOB was a successful swimmer and won all his races and all the companies only wanted to sponsor BOB and not any other swimmer. I feel sorry for the other swimmers. But if the government required BOB to give up some sponsorship so businesses may choose to sponsor other swimmers, I would be disappointed because BOB should not have to give up some sponsorship to help out other people.

So do you think competition law should be abolished? I do.

I can't say for sure but I don't think thats the intent of the law. The anti trust laws are to prevent businesses from colluding and creating trade cartels. Instead of competing to either lower the price or improve the quality of a good or service they simply charge what they want and have no pressure to improve the quality.