Peter Schiff: Government-Protected Monopolies Are the Ones to Fear

It’s virtually impossible to maintain a monopoly in a free market where you compete by offering the best value. That’s why generations of unscrupulous entrepreneurs have turned to the government for “help.” From Peter Schiff at schiffgold.com:

Earlier this week, a federal court threw out an antitrust case against Facebook. The lawsuit filed by the Federal Trade Commission, along with 48 state governors, sought to force Facebook to divest itself of WhatsApp and Instagram, but the court said the FTC failed to prove that Facebook holds monopoly power. In his podcast, Peter Schiff said whatever problems Facebook may present, the only monopolies we should really be afraid of are the government-protected monopolies.

Peter said Facebook isn’t a monopoly and doesn’t need to be broken up.

Antitrust laws were ostensibly passed to protect consumers. If a company achieves monopoly power, it can jack up prices and take advantage of the public. The consumer is served best in a competitive market because competition tends to keep prices low. Therefore, the government needs the power to break up these monopolies and preserve a competitive environment. Peter said the argument that Facebook is gouging consumers falls a little flat given they give their base product away.

If a company is giving its products away for free, by definition, it’s not gouging anybody. So, even if Facebook had a monopoly, which it doesn’t, but even if it did, who cares? It’s giving away the products. They’re free. So, nobody is being harmed by this so-called monopoly.”

You could argue that the public isn’t really the customer. In a sense, people with Facebook accounts are the product. Advertisers pay Facebook to reach those account-holders. But Facebook clearly doesn’t have a monopoly on advertising. Peter said the advertising market may be more competitive than at any time in history.

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