[dragonwriter]

> > Monopolies are not, strictly speaking, about "not having any other options".

> They kind of are.

Not in US antitrust law, where market power and monopoly power are mostly defined in relation to empirically demonstrated effective power to raise prices or exclude competitors. [1] The existence of effective competition would deny these abilities (by definition), but actually having other competitors exist in the market at issue doesn't. So, the statement that they are not strictly about "not having any other options" is precisely correct.

[1] See, e.g., http://www.ftc.gov/tips-advice/competition-guidance/guide-an...

[AnthonyMouse]

> Not in US antitrust law, where market power and monopoly power are mostly defined in relation to empirically demonstrated effective power to raise prices or exclude competitors.

There is a difference between what something is and what you can use as evidence of it. There is this whole issue in antitrust law about how you define the market. For example, is MacOS in the same "market" as Windows? The accused monopolist always wants to paint the market as broad. Microsoft says it doesn't have a monopoly because Apple is competing with it. If Microsoft claims the market is that broad, but they can still do all the things you would expect a monopolist to be able to do and customers don't abandon them, it's evidence that the supposedly competing company isn't actually providing competition and they do actually have a monopoly.

> The existence of effective competition would deny these abilities (by definition), but actually having other competitors exist in the market at issue doesn't.

That's just a language trick. Effective competition comes from having competitors. If you don't have effective competition it's because your "competitors" aren't actually competing with you, either because they're cooperating or because they're not actually offering the same product in the same market (i.e. in either case they aren't actually competitors).

[smackfu]

Antitrust law is not well equipped to deal with actors who use their power to drive down prices and reduce profits.

[dragonwriter]

Perhaps, but the particular tactic Amazon is employing here relies on their ability to raise price in a market in which they are dominant (physical book retailing) to acheive an advantage in negotiations related to another market (e-book retailing). It may be that their goal is to drive down prices in the e-book market, but that's orthogonal to whether the action relies on monopoly power in the physical book retail market.

[AnthonyMouse]

The flaw in your argument is that they can't raise the price of that publisher's books in a market, they can only raise the price they charge on their own website. When Amazon raises their price for a particular book, that doesn't change the price it sells for anywhere else the book is available, and they aren't colluding with any of the other retailers to fix prices.

What they're doing is actually a demonstration of their lack of monopoly power. When they raise the price they charge for a book, any customers doing comparison shopping who want that book in particular will get it from a different retailer. If Amazon had monopoly power you would instead expect substantially all customers to either pay the higher price to Amazon or not buy the book from anyone.

The market characteristic that Amazon is taking advantage of is that if they raise the price for books from one publisher, it shifts impulse purchases from that publisher to another for customers looking through Amazon's website to find a new book to read. It's essentially the same strategy as putting the product of the publisher you don't like at the back of the store, or replacing mention of it in your promotional materials with mention of a competing product you also sell. The publisher cares a lot more than Amazon about which publisher's books Amazon sells more of, which provides Amazon with negotiating leverage against the publisher. All retailers have that leverage over their suppliers. It doesn't require monopoly power. Obviously being bigger gives you more leverage, but being big and having a monopoly are not the same thing.