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Categorized | the roundup

The Roundup May 11

In the best-news-for-entrepreneurs department . . .!

Christine Varney, head of the Department of Justice’s antitrust division, said on Monday she was revoking a Bush administration antitrust doctrine that she said advocated “extreme hesitancy in the face of potential abuses by monopoly firms”. . . .

While the Bush administration did not pursue companies alleged to have over-extended themselves with vertical integration – buying up their own supply chain – the DoJ did take a hard line on cartel activity, which was judged to be a more clear-cut abuse of the law.

But in a key report published in September and revoked on Monday by Ms Varney, the administration had said there should be no interference in “the rough and tumble of beneficial competition”.

(“US to get tough on competition issues,” Financial Times, May 11) One of the great ironies of antitrust laws since the 1970′s is that they benefit the biggest and most monopolistic of companies while doing precious little for, well, the little guys. The irony is this: big companies and monopolies love anti-trust laws . . . unless they’re on the receiving end of a suit. But they don’t hesitate to through antitrust lawsuits hither and yon when it would make it easier for them to compete. Microsoft, for instance, has been bruised pretty badly by antitrust suits, but it’s also led the antitrust charge against other companies, such as Google and Sun. But the lax enforcement by the Bush administration meant that antitrust laws no longer benefitted entrepreneurs, startups, and small businesses, all of which could be easily drowned by a bigger competitor using unfair and illegal competitive means. And, after they’ve been drowned, how will they sue? Who’s on their side? Clearly, the changes in DoJ policy are meant to increase the competitiveness of the dreamers and the doers — which is good news for free markets, good news for consumers, and good news for our society as a whole.


When big box stores roll downhill . . .

The retail exodus is forcing some cities to scramble in the face of lost sales tax revenue at a time when money is already tight. Meanwhile, they’re grappling with how to resurrect the zombie neighborhoods, where many of the remaining merchants complain about declining foot traffic and the eyesores of buildings plastered with “for lease” signs.

(“Empty big-box stores drag down their neighbors,” San Francisco Chronicle, May 11) This is a story that needed to be written. While much ink has focused on big business failures and closings, like Mervyns and Circuit City, nobody is paying attention to the small businesses that get dragged under the water with them. I had a client who ran a high-end flooring and remodeling business which did very well before the credit crunch. A large amount of his foot traffic came from the Expo across the street. The credit crunch and the closing of the Expo stores was a double whammy the business could not survive. There are literally thousands of similar entrepreneurs and small businesses suffering similar fates.

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