• Are monopolies ever of benefit to consumers?
    120 replies, posted
I'm raising this debate because I've been thinking of Steam's hold on the PC digital distribution market. Although Steam doesn't actually completely control the entire specific market, no other service rivals Steam's market share, with competing services such as Direct2Drive and Gamersgate (as well as many others) only holding a smaller portion of the market. Steam effectively fits the definition of a monopoly. Is Steam's monopoly a good, neutral or bad thing for the consumer? Arguments for being good would include providing ease of use for users with only a single service, neutral being that the developer or publisher happens to set the price of Steam titles, not Valve (therefore price wouldn't be debatable in this issue). Arguments for being bad would be consumers investing completely into only one service, one which may go down in time or one that is subject to much change from only one party. I'm sure we can think of more, can we? This debate doesn't have to be just about Steam, but about monopolies in the market in general. Can a monopoly ever be of benefit to a consumer, even though it reduces much choice for such consumer? [B]I should specify that we should be debating monopolies in the private sector, not public[/B]. Apologies for not mentioning it earlier.
A monopoly is almost never beneficial for the customer. In case of Steam we're lucky that the company leading this monopoly doesn't exploit its position.
I think a monopoly is never preferred, but how back it is depends on the company. I'd rather use Steam if it was managed by Valve and prefer not to use steam if Ubisoft or EA ran it
Ever heard of the monopoly on water? That one's specifically put in place to protect the consumer.
It really all depends on the company, if they are a monopoly then can charge as much as they damn well please and will have no fear of competition (yet), but some people have a heart, such as steam.
Sure they can benefit consumers. Organisations like the postal service benefit the consumers.
If it is a company owned by the state it can be, for example Swedens Systembolaget. Government Monopolies = Good (If used correctly) Private Monopolies = Bad (Usually)
Where a monopoly is not profit-driven it is usually harmless, however the second profits come into the equation the danger is there of exploitation
[QUOTE=Paravin;32587229]A monopoly is almost never beneficial for the customer. In case of Steam we're lucky that the company leading this monopoly doesn't exploit its position.[/QUOTE] I gonna get rated dumb for this, but they exploited it when they changed $ to €.
In many ways things become monopoly's because they offer a greater service/ product but overtime can evolve into a inferior/ more costly option.
Yes natural monopolies where efficiency can only be reached by having one company produce however they have to be tightly regulated as they're prone to slacking due to no competition or exploiting customers. If they're in the rpivate sector then I'd say no, unless there is tons of regulation to force them to benefit the consumer they will tend towards monopolistic behaviour and exploit the customer for extra profit.
[QUOTE=Wizard of Ass;32587446]I gonna get rated dumb for this, but they exploited it when they changed $ to €.[/QUOTE] The publishers determine the prices in each region, not Steam. Blame the publishers for not converting.
If monopolies start messing around with their customers, some of them might seek an alternative, and that will give the other company a chance to catch up.
[QUOTE=Silikone;32587634]If monopolies start messing around with their customers, some of them might seek an alternative, and that will give the other company a chance to catch up.[/QUOTE] Many times the customers don't have an alternative (e.g. in the USA, there are many places where there is only one ISP available)
[QUOTE=Beaverlake;32587301]If it is a company owned by the state it can be, for example Swedens Systembolaget. Government Monopolies = Good (If used correctly) Private Monopolies = Bad (Usually)[/QUOTE] I would say that is absolutely the opposite of the truth. Public monopolies are always bad, and they're the only real form of monopoly that exists. [QUOTE=Paravin;32587229]A monopoly is almost never beneficial for the customer. In case of Steam we're lucky that the company leading this monopoly doesn't exploit its position.[/QUOTE] Did you ever consider for even a moment that the reason they've gained a large percentage of the market share is [i] because[/i] they're good at what they do? What do you people think, that companies rip the money from your pockets? [editline]e[/editline] [QUOTE=VistaPOWA;32587675]Many times the customers don't have an alternative (e.g. in the USA, there are many places where there is only one ISP available)[/QUOTE] If their service is so horrible (or if it isn't, doesn't matter really), companies will try to obtain customers there. If there's 50% customer satisfaction that means they can pull 50% of their customers away.
Natural monopolies are fine but tend to be inefficient since managers and what not presumably realise they don't have to worry too much about profits since the government'll back them up.
A monopoly by the state in the best interests of the people would be such a situation.
[QUOTE=Wizard of Ass;32587446]I gonna get rated dumb for this, but they exploited it when they changed $ to €.[/QUOTE] It's not an exploit if international law stipulates the rates and exchanges you must put on your products, as well as the individual publishers requirements.
[QUOTE=Paravin;32587229]A monopoly is almost never beneficial for the customer. In case of Steam we're lucky that the company leading this monopoly doesn't exploit its position.[/QUOTE] Basically this. The top guys at Steam realize they're sitting on a golden goose at the moment and are trying their best not to quote "fuck it up."
[url]http://en.wikipedia.org/wiki/Carnegie_Steel_Company[/url]
I'm pretty sure publishers choose what they want their games to cost, not Valve. It's like the Apple App Store.
In a monopoly the company can charge whatever ridiculous price they want because there is no competition. So monopoly is bad and is at no benefit to the consumer.
So long as the company that has the monopoly doesn't get greedy I don't see why not. If I had a monopoly over an industry and I could very much afford to make it by on a small profit margin (and all of the employees were well paid and happy) then I'd sure as hell do so. Inflating prices doesn't benefit anyone. In technology all it does it prevents the consumers from getting their hands on the most up to date technology available, thus stagnating the progress of technology, and in things like food/water it's... well, cruel to inflate prices because people NEED to eat and drink. Of course, unfortunately, most of the people who run large companies seem to be or at least become enormous douchebags.
[QUOTE=The Decoy;32589437]In a monopoly the company can charge whatever ridiculous price they want because there is no competition. So monopoly is bad and is at no benefit to the consumer.[/QUOTE] Not always if a monopoly's market doesn't have extra barriers to entry then the monopoly may cut pricing to make it unworthwhile for another company to set up in their market due to low profits. Valve/Steam are generally a good company because they were lucky in that they were made from ex-microsoft high ups, meaning they had the capital to start the business by themselves and so aren't a public trading company and so don't have to please shareholders with ever rising profits (I imagine they have these anyway though)
[QUOTE=The Decoy;32589437]In a monopoly the company can charge whatever ridiculous price they want because there is no competition. So monopoly is bad and is at no benefit to the consumer.[/QUOTE] Mind if I ask where you get your tap water from then?
[QUOTE=sltungle;32589528]So long as the company that has the monopoly doesn't get greedy I don't see why not. If I had a monopoly over an industry and I could very much afford to make it by on a small profit margin (and all of the employees were well paid and happy) then I'd sure as hell do so. Inflating prices doesn't benefit anyone. In technology all it does it prevents the consumers from getting their hands on the most up to date technology available, thus stagnating the progress of technology, and in things like food/water it's... well, cruel to inflate prices because people NEED to eat and drink. Of course, unfortunately, most of the people who run large companies seem to be or at least become enormous douchebags.[/QUOTE] It takes a person like that to get a business like that, you've got to be greedy enough to want more money and to put up with the enormous amount of effort you have to put in to run the whole company. [editline]2nd October 2011[/editline] [QUOTE=teh pirate;32589194][url]http://en.wikipedia.org/wiki/Carnegie_Steel_Company[/url][/QUOTE] Whats your point? The only real monopoly-esque thing I can see is that the workers got replaced by less skilled workers, striked and failed. A good example of a bad monopoly is Standard Oil [url]http://en.wikipedia.org/wiki/Standard_Oil[/url] [editline]2nd October 2011[/editline] [QUOTE=s0beit;32587826] If their service is so horrible (or if it isn't, doesn't matter really), companies will try to obtain customers there. If there's 50% customer satisfaction that means they can pull 50% of their customers away.[/QUOTE] Barriers to entry. Sunk costs, infrastructure, advertising etc a new ISP doesn't have any of these. How do you set up an ISP when the owner of the fibre cables is your competator and won't rent/sell them to you?
[QUOTE=s0beit;32587826]Did you ever consider for even a moment that the reason they've gained a large percentage of the market share is [i] because[/i] they're good at what they do? What do you people think, that companies rip the money from your pockets? If there's 50% customer satisfaction that means they can pull 50% of their customers away.[/QUOTE] Why do you look at it as if the only factor is fair competition, if companies merge or they are the first to a new market they can easily lock out other competition.
Steam, or digital providers in general, are a bad example for monopolies, because of how simplistic it is to create another business. Yes, steam is pretty much the only one out there, but it can never fully get rid of the competition, because a new internet business requires far less resources than a physical one. They also have to not fuck over the consumer, or else the consumer will shift their loyalties to the other, smaller, resellers, and steam will be left to die. ps: I don't know if someone had said this earlier in this thread because I haven't read most of the replies. [editline]2nd October 2011[/editline] [QUOTE=Wizard of Ass;32587446]I gonna get rated dumb for this, but they exploited it when they changed $ to €.[/QUOTE] No, steam doesn't set prices for things. I don't know how many times people have to say this, but resellers do not choose prices, the publisher does.
[QUOTE=s0beit;32587826]I would say that is absolutely the opposite of the truth. Public monopolies are always bad, and they're the only real form of monopoly that exists.[/quote] woah woah what [quote]Did you ever consider for even a moment that the reason they've gained a large percentage of the market share is [i] because[/i] they're good at what they do? What do you people think, that companies rip the money from your pockets?[/quote] that's a hilariously shortsighted and/or naive way of thinking having a monopoly doesn't necessarily mean you got there by being a good business. look at DeBeers or United Fruit for fuck's sake [quote]If their service is so horrible (or if it isn't, doesn't matter really), companies will try to obtain customers there. If there's 50% customer satisfaction that means they can pull 50% of their customers away.[/QUOTE] I don't think you understand how this works Although a lot of this isn't strictly a monopoly, this image is somewhat relevant: [t]http://filesmelt.com/dl/socialism1.png[/t]
[QUOTE=Paravin;32587229]A monopoly is almost never beneficial for the customer. In case of Steam we're lucky that the company leading this monopoly doesn't exploit its position.[/QUOTE] True, and if they did, you'd see a mass of alternatives popping up.
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