[cjcole]

What allows this tactic to work is the size asymmetry between very large companies and smaller companies. It is much less effective against similarly sized companies. Very large companies have much more buffer (reserves of capital, talent, etc.) to draw from. The very large company can absorb layoffs, cancelations, closures, and mindshare losses longer than a much smaller and very likely leaner company can.

Defining what does and does not constitute predatory behavior is difficult to define clearly and concisely.

One potential mitigation, given the above, would be to routinely break up companies above a certain size. To make it perfectly typical, ordinary, and automatic to do so. To shift the burden of proof from the government needing to establish monopoly status to the giant company needing to demonstrate that the consumer benefits due to economies of scale derived from its size outweigh the negative externalities due to its size and subsequent disproportionate power and influence.

Economies of scale leading to lower consumer prices are a positive good. The negative externalities of huge companies due to their size and outsized power and influence aren't given as much consideration as they are less quantifiable, but they are real and should be taken into account.

[moftz]

Forcing companies to break up can have the unintentional effect of creating cartels where the previously joined companies of similar size work together to push out smaller companies with price fixing. If there is only so much business to be done and there's no realistic way for you to cover a majority of the industry, you can make more money pushing out any of the competition that won't keep prices fixed.