Rich Uncle Pennybags
For a few days last month, the heat index went well over 100°. I don’t do well in the heat and humidity, so I was struggling. To cope, I just kept reminding myself that in a few short months I’ll be missing this heatwave. Before I know it, I’ll be bundling up, having to shovel and scrape off my windshield, and getting cozy to watch Christmas movies.
While clearly ‘Die Hard’ is the greatest of all Christmas movies, my wife actually disagrees. She loves “It’s a Wonderful Life,” the sappy story of George Bailey and his journey of self-discovery that the world is a better place with him than without him. Without him, his hometown of Bedford Falls would fall prey to the sinister Mr. Potter.
Without George and his savings and loan, Mr. Potter would have taken over every commercial enterprise in town and all of its residents would be under his thumb. That’s great if you’re Mr. Potter, but pretty awful if you’re a consumer.
That’s why Congress made his practices illegal.
In 1890, the Sherman Anti-Trust Act was passed, which outlaws all contracts, combinations, and conspiracies that unreasonably restrain interstate and foreign trade. It is a felony for competitors to agree to fix prices, rig bids, and allocate customers.
The Sherman Act also criminalized monopolies, which exist when one enterprise controls the market for a product or service, and it has obtained that market power by suppressing competition with anticompetitive conduct, as opposed to its product or service being superior to others.
It’s not illegal, however, for an enterprise to take sales away from its less efficient competitors because of its vigorous competition and lower prices – after all, that’s the heart of capitalism and a free market.
When we think of monopolies, we typically think of the era of the Industrial Revolution and J.P. Morgan’s takeover of the steel, shipping and banking trades. In fact, Morgan was the inspiration for Rich Uncle Pennybags, the mascot of the board game ‘Monopoly.’
Even though monopolies feel like a thing of the past, the U.S. Department of Justice just launched an investigation into some of the country’s largest tech giants to determine whether they are monopolies that have harmed consumers.
Like Morgan’s steel and shipping juggernauts, companies like Google, Apple, Amazon and Facebook are presumed to be in the DOJ’s crosshairs. According to the Department, its antitrust division will examine whether these companies “are engaging in practices that have reduced competition, stifled innovation or otherwise harmed consumers.”
Assistant Attorney General Makan Delrahim, head of the DOJ’s antitrust division, said, “Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands.” He then vowed, “The Department’s antitrust review will explore these important issues.”
In addition to providing us with some of our favorite products or services, these tech companies also have access to tons of our personal information. It’s no coincidence that the DOJ’s investigation follows several widely publicized government settlements with tech companies. After a breach that exposed the personal data of 150 million Americans, credit-reporting company Equifax agreed to pay nearly a $700 million settlement. Likewise, after allowing third-party developers to gather data from millions of users without their consent or knowledge, Facebook reportedly reached a settlement with the Federal Trade Commission.
Rumor has it that in addition to being a business tycoon, J.P. Morgan was also very popular with the ladies. Apparently he was a real chick magnate.
Reg P. Wydeven
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