Coke sued 68 mill in antimonopoly suit

[Eli]

Originally posted by: Vic

Originally posted by: Eli
Can't believe some of you are siding with Coke on this.

If Intel was doing this same sh!t to AMD, you would all sh!t a brick.

It's simple. If you own a business, you have the right to sell your product to whomever you please, and even with contractual conditions attached. Same thing here with Coke. The flaw in thinking of the anti-Coke argument is the false assumption that the woman had some type of god-given right to sell Coke. That's simply not true. In reality, she has the choice of which brand she which to sell. One or the other, but not both. This is not unusual.

As an example, Ford may require that its new car dealers not also sell new Chevrolets on the same lot. This is not monopoly, this is typical brand protection.

Intel has been doing this same sh!t to AMD for decades. And as AMD grows marketshare, it will in turn do the same thing to Intel.

I'm confused then..

It sounds to me as if you're saying a Monopoly can't exist.

Why do we, and Mexico, have anti-monopoly laws then?

 

[Vic]

Originally posted by: mugs

Originally posted by: Vic
The protected class are obvious, and this particular case (from my reading of the article) does not involve a member of a protected class.

No one said she was a member of a protected class. 😕

You brought it up. I shut it down.

 

[mugs]

Originally posted by: Vic

Originally posted by: mugs

Originally posted by: Vic
The protected class are obvious, and this particular case (from my reading of the article) does not involve a member of a protected class.

No one said she was a member of a protected class. 😕

You brought it up. I shut it down.

😕 I never said or implied that she was a member of a protected class.

Reread this post:

Originally posted by: mugs

Originally posted by: Vic
That court was in Mexico. 'Nuff said. In the US, a distributor can refuse to sell to any reseller on almost any basis except the protected classes.
I think you idealists should do well to think these types of scenarios through. Any law that says that one group must sell can be equally used to force another group to buy.


edit: bolded a part to deal with mugs' strawman edit

Now, I am not a lawyer so I don't know if this still applies, but from posts in this thread it appears that it does: Clayton Antitrust Act

The Clayton Act prohibits:
<snip>
sales on the condition that the buyer not deal with the seller's competitors. (Section 3)

So... Does it or doesn't it? 😕


Strawman? :roll: I was simply giving an example where a business's right to refuse a sale is not absolute, because you've been stating that it is. It is not outside the realm of possibility that there may be other reasons for which a business cannot refuse a sale, and apparantly there are, or at least there were as of 1914.

Edit: "Bolding added for the comprehension diminished."

 

[Vic]

Originally posted by: Eli
I'm confused then..

It sounds to me as if you're saying a Monopoly can't exist.

Why do we, and Mexico, have anti-monopoly laws then?

Actually, a non-coercive monopoly can exist, but only in way that purely beneficial to the consumer. Lowest cost, lowest prices, etc.

Why? For a combination of strong government control in business and as a protection for favored weaker businesses. Contrary to popular belief, the big corps want strong government regulation. It protects them from their competitors. What if one of its competitors found a way to strengthen its business model to the point of acheiving domination of the market? It's corruption.

The origin of monopoly laws in the US stems from a problem-reaction-solution situation. In the late 1800's, the federal government created certain coercive monopolies to run the early transcontinental railroads, and those RR's abused their status as well they could. In response, the people demanded laws against monopolies. The media conveniently went along, citing the dangers of trust barons, etc.
But in reality, a cartel is far more dangerous than any non-coercive monopoly, and what should be more strongly regulated. But we have multiple cartels in the US, namely recording, motion picture, various agriculture, and oil, among others.

 

[Vic]

I never said a business' right to sell was absolute, and excluded the protected classes from the beginning. But you brought it up again as though you were actually making a real argument when you weren't. Now, you're stuck on this like a broken record because you have nothing left to argue with. :roll:

 

[mugs]

Originally posted by: Vic
I never said a business' right to sell was absolute,

Perhaps I read too much into what you said, or confused you for Amused... my apologies.

But you brought it up again as though you were actually making a real argument when you weren't. Now, you're stuck on this like a broken record because you have nothing left to argue with. :roll:

I was, and I did, and for some reason you're ignoring the part of my post where the Clayton Antitrust Act contradicts what you've said. I am not above reproach, and I have been wrong in the past, but if the Clayton Antitrust Act does not apply in this case I'd like to know why.

 

[ElFenix]

"stop selling their product or starve"

yup, that's a free market right there. perfect compeitition at its finest.

 

[ElFenix]

Originally posted by: Vic
But in reality, a cartel is far more dangerous than any non-coercive monopoly, and what should be more strongly regulated. But we have multiple cartels in the US, namely recording, motion picture, various agriculture, and oil, among others.

cartels are, of course, regulated by the same acts that regulate monopolies. and they are regularly hit with actions.

opec isn't because opec is other countries. and you can't really sue other countries in federal court and expect the other country to abide by the decision.

and of course MS has a monopoly (on desktop operating systems and perhaps office suite software) without any government intervention.

 

[Vic]

Originally posted by: ElFenix
"stop selling their product or starve"

yup, that's a free market right there. perfect compeitition at its finest.

The retailer was never without the option to sell other products. She wasn't going to starve.

Originally posted by: ElFenix
and of course MS has a monopoly (on desktop operating systems and perhaps office suite software) without any government intervention.

MS' monopoly originally came about in a non-coercive fashion. The consumers decided, amidst competing choices, that MS software was what they wanted. And MS' position was aided by the need for compatibility in computer software. MS haters aside, it really can't be argued that Windows was not the best software at the best price. And consumers bought it because it was the best.
I have not and am not arguing that a monopoly cannot exist on its own. What I am arguing is that a harmful monopoly, i.e. one that provides an unreliable product at high prices, cannot exist on its own in a free market. It's an economic impossibility.
It's like Wal-Mart (which is not an actual monopoly but is being attacked like one). The only groups that really hate Wal-Mart are its competitors. Otherwise, the consumers love the low prices. It's not Wal-Mart, but its competitors, that hate the free market in action in that case.

 

[mugs]

Originally posted by: Vic
I have not and am not arguing that a monopoly cannot exist on its own. What I am arguing is that a harmful monopoly, i.e. one that provides an unreliable product at high prices, cannot exist on its own in a free market. It's an economic impossibility.

I don't believe that's true. Once a company has enough market share to have a monopoly, they can easily afford to temporarily lower prices enough to drive any attempts at competition out of the market. Once they thwart the competition they can raise the prices back to whatever they want. Fortunately that's another tactic prohibited by the Clayton Antitrust Act.

 

[ElFenix]

Originally posted by: Vic

Originally posted by: ElFenix
"stop selling their product or starve"

yup, that's a free market right there. perfect compeitition at its finest.

The retailer was never without the option to sell other products. She wasn't going to starve.

i guess if going out of business is an option. sell a cola that 10% of the market is interested in, yeah she's going to get a lot of sales. 'you can have any horse in the stable, as long as it's the first one,' i think is how it goes.

MS originally came about in a non-coercive fashion, but competing on features/price isn't necessarily the way they're maintaining a monopoly. strongarming competitors and competiting on threats (which MS did) rather than features/price isn't helpful.

and of course, who is to say that no one could make a better mousetrap? that has to be one of your assumptions. but it's counterfactual. no one in their right mind is going to bother competing with MS for the desktop market because of the very strong network effects in place. you want software developed for your OS, you better have big market share. you want big market share, you better have software. it's a classic chicken and egg, catch 22.

you say that no one could maintain selling a crappy product at above competitive prices in a free market. that's true. but we're not dealing with a free market. we're dealing with reality. and the reality is that we can only get close to a free market. in reality there are at the very least transaction costs. transaction costs include, of course, the gathering of information. in the free market that all economists (myself included) like to prosetylize about, there are so many non realistic assumptions about the knowledge of people in the system (about the product and the nature of the system), the ability of people to recognize that an industry has higher than competitive profits, and the ability of competitors to enter that using a hypothetical free market should really only serve as a guide to how you can improve reality, and should not substitute for the rules that reality operates in.

so, two of your assumptions about the nature of the market could be wrong. someone could invent a better mousetrap. the market, however, is so distorted by the position of the high barriers to entry, low variable cost monopoly position that the person simply doesn't invent a better mousetrap. and the other is that it is a free market, because obviously a free market assume low costs to entry.

there is a company that helps law student study for the bar. it's name bar/bri. what they do is gather the law into neat little outlines and have people explain it to students. it's what you thought you were going to learn in law school, but didn't. it's tremendously expensive to gather the law like this, but once you have it it doesn't cost much to maintain it. so there are high barriers to entry, but low variable costs. if you don't see where i'm going here (not necessarily you, vic, but others) that is the classic setup for a monopoly. the one time that bar/bri (owned, somehow or another, by west) had effective competition (lexis was trying to get into the action) they dropped their prices to well below where lexis (having to pay all those upfront costs) could afford to compete.

and of course that sends a signal to anyone else who thinks they might enter. so, not only does it keep lexis out of the market, but also anyone else who thinks they might have a go at the high profits bar/bri makes.

no government intervention involved. and yet, the harm of the monopoly is there.

this is harmful becuase without the competition there are people who simply can't afford the bar classes that would be able to in a true free market, and so deadweight loss is involved. and deadweight loss is harmful. no matter how you try to spin it, the loss of value creating transactions associated with all monopolies (well, except for perfect price discriminators, which don't exist) is the primary harm.

you sound like you're stuck in a chicago school rut, vic. guess what? cartels can be maintained. about the only way they're busted anymore is if there is a whistleblower.

 

[ElFenix]

Originally posted by: mugs

Originally posted by: Vic
I have not and am not arguing that a monopoly cannot exist on its own. What I am arguing is that a harmful monopoly, i.e. one that provides an unreliable product at high prices, cannot exist on its own in a free market. It's an economic impossibility.

I don't believe that's true. Once a company has enough market share to have a monopoly, they can easily afford to temporarily lower prices enough to drive any attempts at competition out of the market. Once they thwart the competition they can raise the prices back to whatever they want. Fortunately that's another tactic prohibited by the Clayton Antitrust Act.

well, it would be if the judiciary didn't take a crabbed interpretation of it. see brown v. williamson tobacco.

 

[mchammer187]

Originally posted by: Cooler
if this happened in us she would have got jack.

if you read the article she did get jack

they were fines imposed by the government

the mexican government keeps those fines

 

[slpaulson]

Originally posted by: Ornery
You numbnuts do understand that restaurants here can sell Coke, OR Pepsi, but not both, right? Any clue why? Do you have a clue about anything? 😕

I think has more to do with the restaurant not wanting to buy another dispenser.

For example, my cafeteria has Coke and Pepsi products in the soda fountains. Hell I think they even have both Coke and Pepsi products in the same fountains.

I imagine chains probably get deals for only selling one or the other, but It's bullcrap if you can't sell both...

 

[halik]

Originally posted by: mugs

Originally posted by: halik

WRONG,
exclusive pricing deals are subject to antitrust lawsuits. Anything that attemps to limit competition is in vilation of the sherman and clayton acts.

It kinda depends on how good your lawyer teams is, beacuse after all it's just a lawsuit. Most of these are not decided per se, so if you can show that the current scheme is relatively efficent, you're ok.

I don't know, I've seen it first-hand myself, and we all know it goes on in restaurants and colleges.

It's most likely due to the fact that there's really no reason for a restaurant to offer coke or pepsi... they're virtual direct substitutes. You can just just sell coke or just sell pepsi, but coke can't force you to just sell coke.

 

[halik]

Originally posted by: mugs

Originally posted by: Vic
I have not and am not arguing that a monopoly cannot exist on its own. What I am arguing is that a harmful monopoly, i.e. one that provides an unreliable product at high prices, cannot exist on its own in a free market. It's an economic impossibility.

I don't believe that's true. Once a company has enough market share to have a monopoly, they can easily afford to temporarily lower prices enough to drive any attempts at competition out of the market. Once they thwart the competition they can raise the prices back to whatever they want. Fortunately that's another tactic prohibited by the Clayton Antitrust Act.

Actually there is a set precedent from one antitrust case that basically says that any price changes that demonstrate market power are violating the Clayton Act. I can't remember the case off hand, but it had something to do with a club of doctors that set MAXIMUM allowed prices for procedues. Court said this is illegal, because the fact that they can do it shows their market power and the ability to collude on price.

 

[halik]

Originally posted by: Vic

Originally posted by: mugs
The flaw in your thinking is that Coca-Cola distributors have the right to refuse to sell to her on the basis that she is selling a competing product. Clearly from the court's ruling that is not true.

That court was in Mexico. 'Nuff said. In the US, a distributor can refuse to sell to any reseller on almost any basis except the protected classes.
I think you idealists should do well to think these types of scenarios through. Any law that says that one group must sell can be equally used to force another group to buy.


edit: bolded a part to deal with mugs' strawman edit

There are no protected classes, you're talking outta your ass. Clayton Act is actually rulled per-se, because firms would always cheat otherwise (expected outcome if you do the game theory outcomes). Clayton Act spells it out word for word - basically any action that will hinder competition (DOJ burden of proof) is illegal.

Par. 1 Clayton Act:
"where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition "

 

[jjones]

There's not enough information in the article for some of you to be giving these replies. The article makes no mention of a contract, or the terms of a contract, if there is one. This is a small mom and pop store and Coke has already set precedent by selling to them. To later deny those sales because of the presence of a competitor's product is unfair. I'm not up on Mexican law, but it may be that exclusivity agreements of this type are not permitted, or that this woman never signed such an agreement with Coke.

If she did sign a contract of exclusivity, and the contract as such is legal in Mexico, then this ruling IMO is not correct. But I have a strong feeling that no such stipulation of exclusivity was ever in any contract this woman may have signed, and therefore I think the ruling is right on.

 

[Phoenix86]

Originally posted by: Eli
Can't believe some of you are siding with Coke on this.

If Intel was doing this same sh!t to AMD, you would all sh!t a brick.

Like.... DELL? Man you really walked into that one. People sh!t a brick about that all the time.

 

[Vic]

Originally posted by: mugs

Originally posted by: Vic
I have not and am not arguing that a monopoly cannot exist on its own. What I am arguing is that a harmful monopoly, i.e. one that provides an unreliable product at high prices, cannot exist on its own in a free market. It's an economic impossibility.

I don't believe that's true. Once a company has enough market share to have a monopoly, they can easily afford to temporarily lower prices enough to drive any attempts at competition out of the market. Once they thwart the competition they can raise the prices back to whatever they want. Fortunately that's another tactic prohibited by the Clayton Antitrust Act.

I'm not arguing the law (which IMO is useless), I'm arguing the economic theory. In reality, a company can NEVER "thwart the competition" enough to "raise the prices back to whatever they want" because there will ALWAYS be investment capital waiting to create new competition in that event.
Example: Coca-Cola market-dumps and puts Pepsi out of business. Coke then raises prices 1000%, extracting massive profits. XYZ investment firm on Wall Street looks at Coke's profits and quickly invests in creating a new competing beverage distributor, looking for a piece of that action.

 

[ElFenix]

Originally posted by: Vic
I'm not arguing the law (which IMO is useless), I'm arguing the economic theory. In reality, a company can NEVER "thwart the competition" enough to "raise the prices back to whatever they want" because there will ALWAYS be investment capital waiting to create new competition in that event.
Example: Coca-Cola market-dumps and puts Pepsi out of business. Coke then raises prices 1000%, extracting massive profits. XYZ investment firm on Wall Street looks at Coke's profits and quickly invests in creating a new competing beverage distributor, looking for a piece of that action.

again, you're stuck in a chicago rut that has since been discredited by later theories and by fact. the only people that buy into that theory anymore are the courts (see brown v. williamson tobacco)

 

[Vic]

Originally posted by: ElFenix

Originally posted by: Vic

Originally posted by: ElFenix
"stop selling their product or starve"

yup, that's a free market right there. perfect compeitition at its finest.

The retailer was never without the option to sell other products. She wasn't going to starve.

i guess if going out of business is an option. sell a cola that 10% of the market is interested in, yeah she's going to get a lot of sales. 'you can have any horse in the stable, as long as it's the first one,' i think is how it goes.

MS originally came about in a non-coercive fashion, but competing on features/price isn't necessarily the way they're maintaining a monopoly. strongarming competitors and competiting on threats (which MS did) rather than features/price isn't helpful.

and of course, who is to say that no one could make a better mousetrap? that has to be one of your assumptions. but it's counterfactual. no one in their right mind is going to bother competing with MS for the desktop market because of the very strong network effects in place. you want software developed for your OS, you better have big market share. you want big market share, you better have software. it's a classic chicken and egg, catch 22.

you say that no one could maintain selling a crappy product at above competitive prices in a free market. that's true. but we're not dealing with a free market. we're dealing with reality. and the reality is that we can only get close to a free market. in reality there are at the very least transaction costs. transaction costs include, of course, the gathering of information. in the free market that all economists (myself included) like to prosetylize about, there are so many non realistic assumptions about the knowledge of people in the system (about the product and the nature of the system), the ability of people to recognize that an industry has higher than competitive profits, and the ability of competitors to enter that using a hypothetical free market should really only serve as a guide to how you can improve reality, and should not substitute for the rules that reality operates in.

so, two of your assumptions about the nature of the market could be wrong. someone could invent a better mousetrap. the market, however, is so distorted by the position of the high barriers to entry, low variable cost monopoly position that the person simply doesn't invent a better mousetrap. and the other is that it is a free market, because obviously a free market assume low costs to entry.

there is a company that helps law student study for the bar. it's name bar/bri. what they do is gather the law into neat little outlines and have people explain it to students. it's what you thought you were going to learn in law school, but didn't. it's tremendously expensive to gather the law like this, but once you have it it doesn't cost much to maintain it. so there are high barriers to entry, but low variable costs. if you don't see where i'm going here (not necessarily you, vic, but others) that is the classic setup for a monopoly. the one time that bar/bri (owned, somehow or another, by west) had effective competition (lexis was trying to get into the action) they dropped their prices to well below where lexis (having to pay all those upfront costs) could afford to compete.

and of course that sends a signal to anyone else who thinks they might enter. so, not only does it keep lexis out of the market, but also anyone else who thinks they might have a go at the high profits bar/bri makes.

no government intervention involved. and yet, the harm of the monopoly is there.

this is harmful becuase without the competition there are people who simply can't afford the bar classes that would be able to in a true free market, and so deadweight loss is involved. and deadweight loss is harmful. no matter how you try to spin it, the loss of value creating transactions associated with all monopolies (well, except for perfect price discriminators, which don't exist) is the primary harm.

you sound like you're stuck in a chicago school rut, vic. guess what? cartels can be maintained. about the only way they're busted anymore is if there is a whistleblower.

And you sound like a lawyer, the worthless types that defended the wealthy and big corps from risk and got us in the rut to begin with.
A non-coercive monopoly is only harmful to the competition that can't keep up. If bar/bri maintains its position on low prices to the consumer, at a level its former competition could not stay in business and which no competition can afford to enter, then of what harm are its profits? NONE.

And I find it hard to believe that you consider yourself a fan of the free market when you think this retailer was entitled to sell a particular product. Meh. The only harm in the free market is the government. But you're a lawyer (or law student). If you enter economics as a lawyer, your job will be the manipulation of government intervention on behalf of wealthy interests. For example (and you should know this), the woman wasn't the real winner in this trial (neither was Coke either, but that's obvious). Of course, a lawyer would defend anti-trust acts, they keep you in business.

 

[Vic]

Originally posted by: ElFenix

Originally posted by: Vic
I'm not arguing the law (which IMO is useless), I'm arguing the economic theory. In reality, a company can NEVER "thwart the competition" enough to "raise the prices back to whatever they want" because there will ALWAYS be investment capital waiting to create new competition in that event.
Example: Coca-Cola market-dumps and puts Pepsi out of business. Coke then raises prices 1000%, extracting massive profits. XYZ investment firm on Wall Street looks at Coke's profits and quickly invests in creating a new competing beverage distributor, looking for a piece of that action.

again, you're stuck in a chicago rut that has since been discredited by later theories and by fact. the only people that buy into that theory anymore are the courts (see brown v. williamson tobacco)

Post the theories. Post the facts.

Look, the only people who are trying to lie to and convince the world that capitalism is flawed are communists and lawyers. The former has an agenda and the latter needs a job.

 

[NikPreviousAcct]

Originally posted by: ElFenix
"stop selling their product or starve"

yup, that's a free market right there. perfect compeitition at its finest.

It's MEXICO. She owns a store. She's better off than 99% of the rest of the country.

 

[cliftonite]

Originally posted by: Nik

Originally posted by: Cooler
if this happened in us she would have got jack.

For two reasons:

1) She's Mexican.
2) Ignorant people seem to have a problem with understanding what "monopoly" means. If some company agrees to let you sell their product and you agree to their terms, then you shouldn't be able to sue them for the terms that you agreed to. :roll:

Ignorant BONEHEADS.

What does the Mexican constitution have to do with this?

I have an excellent solution. STOP DOING BUSINESS WITH MEXICO.

Whats wrong with Mexico or being Mexican?