Wednesday, August 31, 2011

Competitition Doesn't Mean No Consumer Choice

Which is reason enough to be pleased about this:
The U.S. government sued to block AT&T Inc. (T)’s proposed $39 billion acquisition of T-Mobile USA Inc., saying the deal would “substantially lessen competition” in the wireless market. AT&T shares fell as much as 5 percent.
In the complaint filed today in federal court in Washington, the U.S. is seeking a declaration that Dallas-based AT&T’s takeover of T-Mobile, a unit of Deutsche Telekom AG (DTE), would violate U.S. antitrust law. The U.S. also asked for a court order blocking any arrangement implementing the deal.
Of course that particular merger wouldn't have resulted in just one large firm in any local market. But the mood of the times has very much been pro-monopoly and anti-competition. That is funny, because the arguments used for the monopoly building are taken right out of the literature about competition.

Monopolies are bad news. They mean no real pressure to keep prices down and no consumer choice other than not to consume at all. The fewer firms we have in an industry, the closer we get to this situation.

It's odd that I feel the need to write that down! It's so obvious. But the so-called pro-competition lobby has now been a pro-monopoly lobby for many years and we all might get confused about the meaning of the word "competition." That the monopoly boyz have managed to take over a whole doctrine is because they have the money and the political access offered by money.