Yesterday I commented on Thomas Frank’s interview with Barry Lynn, author of Cornered, an important new book about business monopoly in the USA. I intend to read the book and review it on this web log, but, in the meantime, here are some highlights of the interview, touching on the surprising (to me) extent of monopoly power.
Amazon now essentially governs business within the book industry. Amazon has so much power that it virtually gets to tell really big companies like Hachette, the French publisher, what to do.
You’re gonna sell this book at this price. You’re gonna sell that book at that price. That means Amazon pretty much has the power to determine how many copies of a book a publisher might sell.
That’s not citizens trading with one another in an open market setting those prices, that’s a giant corporation setting those prices. Which means what we are witnessing in the U.S. book industry, I think, is a form of top-down government.
Some years back a company named Tyco decided to take over the business of making plastic clothes hangers. It went out and bought at least four companies, and that gave it the power to jack up prices to clothing retailers. That’s the pattern in pretty much every industrial activity in America.
The Supreme Court [in the mid-1960s] forced Pabst to unwind a merger with Blatz because their combined market share [of beer sales] would have been 4.49 percent. … …
Well, now there’s two foreign companies, Anheuser-Busch InBev, which is controlled out of Brazil, and MillerCoors, which is controlled out of London. And those companies control about 80% of the US market. And until recently they controlled about 90% of the market.
It’s not all that hard to manufacture eyeglasses. But there’s a single company, Luxottica, an Italian company, that controls most of the business in America. You go shopping for eyeglasses.
You go to a place called Lenscrafters. You go to a place called Sunglass Hut. You go to a place called Pearle Vision. You go to Target Optical. You go to Sears Optical. You go to Macy’s Optical.
You’re comparing quality, comparing prices, imagining you live in an open and competitive market. And yet all of these stores and most of the product in them are controlled by Luxottica.