Quote:
Originally Posted by SpicyM
Definition of Monopoly:
A pure monopoly is defined as a single seller of a product, i.e. 100% of market share.
In the UK a firm is said to have monopoly power if it has more than 25% of the market share. For example, Tesco @30% market share or Google 90% of search engine traffic.
This is for UK but such laws are everywhere.
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"The Contestability of the market. If barriers to entry are low then the incumbent firm is unlikely to be dominant even with a high market share because new firms can enter if profits are high."
There are dozens of competitors in the search space showing that "barriers to entry are low", consumers can easily switch to another search engine, etc, so I wouldn't agree they have "dominant" position.
Facebook is a 100x better example of "dominant". "Network effect" prevents competitors from easily entering the market, users can't easily switch to another social network, because the whole point is that friends need to be on the same network, etc.
Google really has very little power, I can switch to bing or some other search engine within 2 clicks and never visit google again, so I don't see how they are "dominant".