So this has been Amazon’s plan all along, eh? France gets it wrong, as ever
WHAT is Amazon’s big plan? We know now:
France’s culture minister has attacked Amazon, the online retailer, for deliberately undercutting traditional rivals to create a “quasi-monopoly”, in the latest assault by the socialist government on internet companies.
“Today, everyone has had enough of Amazon which, through dumping practices, smashes prices to penetrate markets to then raise prices again once they are in a situation of quasi-monopoly,” said Aurélie Filippetti, the culture minister.
Put everyone else out of business with low, low, prices, then raise them when you’ve got a monopoly.
But of course this is a French minister speaking so we do have to correct for the ignorance of economics general in that species. You see, the thing is, economists haven’t really been able to find companies that do this.
For the simple enough reason that when you raise your prices again then people will start to compete with you again. The only way you can actually keep all the business to yourself is to keep those low, low, prices forever. And what the hell’s wrong with that? The consumer makes out like a bandit which is the point of the whole exercise in the first place.
But as I say, this is France, they don’t know that over there.
Posted: 4th, June 2013 | In: Money Comment | TrackBack | Permalink
