As far as I understand, antitrust laws prevent a monopoly. What I don’t understand is why is there a law against this? If your product is successful enough that everyone wants it/needs it, why is that a bad thing?
I searched for an answer to this, but the questions are more specific. In this question, since I don’t know about the concept, I’d like to know why such law is a thing.
In: Economics
> As far as I understand, antitrust laws prevent a monopoly
No, that is a common misconception. Anti-trust laws prevent companies from abusing their market share to shut competitors out of the market.
The classic example is Wal-Mart coming to town. They would open up their store and offer super-low prices, so low that they were losing money. The local stores can’t compete with those prices so Wal-Mart keeps them there until the local stores go out of business.
Then, when all their competition is out of business, Wal-Mart jacks their prices right back up. That wasn’t genuine competition, WM “won” by being a bigger company, not by delivering goods more efficiently.
That is the kind of behavior that anti-trust laws try to prevent.
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