Microsoft announced recently that it was interested in acquiring Yahoo! in an attempt to gain market shares from Google. Read Google’s blog which criticizes Microsoft for exerting the same sort of “inappropriate influence” over the internet as it did with the PC in the 90s. If Yahoo! and Microsoft merge, they would effectively control most of the instant-messaging market on the net. (IM systems is not actually a big market, and if IMing becomes inter-operable, then IM users benefit.) Meanwhile Google is attempting to acquire DoubleClick through the European Union.
Criticism of antitrust legislation from “the right” argues that competition and takeover, a process that Joseph Schumpeter calls “creative destruction” and what James Brock calls “economic Darwinism”, is a natural market occurrence which does not to be intervened with. There is however, criticism of antitrust from the left, although confounding “right” and “left” on this really doesn’t help. I consider myself left, and I reach similar conclusions as those on the right do.
The process of monopolization are modes of securing more perfect integration, and a step in “societal evolution”, said William Graham Sumner. Historical monopolists like John D. Rockefeller and pro-trust lega scholars like Robert Bork say that firms which adapt better to changing consumer preferences succeed, and those that do not eventually become “extinct”. James Brock critiques their arguments by saying that the occurrence of monopoly does not imply that what led to the monopoly was competitive behavior. The distinction here is between technical monopolies and coercive monopolies.
“Creative destruction” is the process by which, if technical monopolies do obtain, the monopolists are always held to a competitive standard because newcomers in the market might be more dynamically efficient than the monopolist and thus acquire its market shares. But what happens when all dynamically efficient rivals can essentially be taken over by coercive monopolists? Is this an anti-competitive practice that we should be concerned with if we accept the long-run view of creative destruction?
Is this giantistic cooperationism?