or Connect
AppleInsider › Forums › General › General Discussion › In-depth report finds Apple moved $8B in untaxed profits out of Australia over past decade
New Posts  All Forums:Forum Nav:

In-depth report finds Apple moved $8B in untaxed profits out of Australia over past decade - Page 5

post #161 of 188
Developing products cost dedication time and money !
Copying products is piracy
post #162 of 188
Quote:
Originally Posted by SpamSandwich View Post

Marvin...back to his old anti-free market competition drivel...

Competition led to the creation of the iPhone, personal computers and so many of the modern conveniences you regularly rely on. I often wonder if you take the position you've staked out just to avoid boredom, because it makes no sense to me.

 

You're clearly unaware that most of the basic R&D in materials and theoretical computer science comes out of academia. It's more cost effective for companies to purchase it rather than do everything in house with no certainty of fruition or usable results. Consider how much R&D Apple had to purchase to create the iphone. It was probably not feasible to solve all of those problems in house due to the potential for failure or extended timetables and known research already shown in other products (most having nothing to do with a phone).

post #163 of 188
Quote:
Originally Posted by pauldfullerton View Post

I have absolutely no reason to believe that Apple did anything illegal in Australia, but what it has done is certainly not ethical. Nor is it good business practice because it risks a consumer and government backlash in many countries, particularly Australia. And Apple really doesn't need to take that sort of risk with its brand.

Apple would be wise to admit that these taxation policies are unethical, and make very significant payments to countries that have been 'diddled' out of taxation revenue by transfer pricing practices. It would be interesting to see how Google and Microsoft responded to this.

They will probably be very quiet and keep out of the spotlight, as there is solid chance they also have some butter on their heads, too.
post #164 of 188
Quote:
Originally Posted by Marvin View Post

I notice you didn't comment on how the free market can't prevent anti-competitive monopolies. I have nothing against the free market in its entirety, my objection is to it being applied to everything under the assumption that it's a perfect system. Ignoring instances when it fails doesn't make those failures go away.

If you had a completely unregulated market then as soon as the iPhone came out, Apple's competition would have cloned it, like this:



and they'd have been able to sell it side by side in stores with the original at a fraction of the price. As soon as you introduce any form of regulation then the results are not solely defined by competition. It's competition within a set of necessary boundaries for fair competition.

These regulations for fair competition include the tax rates. They can't be zero and they can't be fixed value. They have to be setup to promote growth in order to prevent anti-competitive/monopolistic scenarios. If a big company can get away with paying low single digit taxation, it's harder for a new company to compete in the same market. If the normal rate of profit increase was the same for both but one pays 1/5th of the tax rate, the bigger company's profits would grow faster year on year as they'd have more capital to reinvest.

This is the same issue you see with income differences between the wealthy and poor. The wealthy have no reason to be in debt, can reinvest income and they lower their tax rates too so their assets grow faster. This is a danger to liberty because it puts too much power into the hands of too few people. Just look at Samsung's level of control in Korea:

http://www.independent.co.uk/news/world/asia/tax-evasion-bribery-and-pricefixing-how-samsung-became-the-giant-that-ate-korea-8510588.html

Is one family owning so much to be considered a success or failure of the free market considering the importance of competition? Contrary to popular belief, it doesn't regulate itself.
That's correct. I didn't. And, that was intentional. It wasn't my aim to enter into an unregulated, free-wheeling conversation with you or anyone else. I asked what I wanted to know and got sufficient information to satisfy my curiosity. I had no need to go further in that vein or into a wider query.
post #165 of 188
Quote:
Originally Posted by macaholic_1948 View Post

Enforcing net neutrality and education efforts are not moderation activities.
A clumsiness in terminology by me. Point being, an internet without government intervention would not have net neutrality enforced and possibly not followed, and children may receive little or no education about caution when accessing the web. So the government may have a role to play there.
Quote:
Originally Posted by macaholic_1948 View Post

As to the rest: you have entered slippery slope territory and the slope is very slick.
The rest being the criminal activity I want to be policed? Really? That's a "slippery slope"?

I'm sure I must have misunderstood, because that's bonkers.

censored

Reply

censored

Reply
post #166 of 188
You
Quote:
Originally Posted by Crowley View Post

A clumsiness in terminology by me. Point being, an internet without government intervention would not have net neutrality enforced and possibly not followed, and children may receive little or no education about caution when accessing the web. So the government may have a role to play there.
The rest being the criminal activity I want to be policed? Really? That's a "slippery slope"?

I'm sure I must have misunderstood, because that's bonkers.
must have misunderstood. Why? Because some countries consider simple criticisms of their government, women's faces, pictures of women driving, dissension, criticisms of religion and other activities to be illegal activities. Silly isn't it.
post #167 of 188
If that's the case then I hardly see why the "slippery slope" is a problem, you're already up to your eyeballs in problems. Countries that have hugely oppressive laws aren't really in the "moderation" conversation.

censored

Reply

censored

Reply
post #168 of 188
Quote:
Originally Posted by Crowley View Post

If that's the case then I hardly see why the "slippery slope" is a problem, you're already up to your eyeballs in problems. Countries that have hugely oppressive laws aren't really in the "moderation" conversation.
Really? More and more countries have shown interest in censoring the internet. There are those in Europe and America that want to as well. Moderation as you call it, particularly when a significant %age of the world's population would be negatively impacted is not only a slippery slope but a major concern as well. But, if you can sleep well knowing that a couple of billion people or so re being oppressed and receiving biased and incorrect education and information, then I guess the rest of us should as well.

Or, perhaps, you are one of those individuals who want to oppress.

Whatever and whichever, have a nice day and please understand that I think your idea of acceptable moderation is extremely dangerous.
post #169 of 188
Quote:
Originally Posted by macaholic_1948 View Post


Really? More and more countries have shown interest in censoring the internet. There are those in Europe and America that want to as well. Moderation as you call it, particularly when a significant %age of the world's population would be negatively impacted is not only a slippery slope but a major concern as well. But, if you can sleep well knowing that a couple of billion people or so re being oppressed and receiving biased and incorrect education and information, then I guess the rest of us should as well.

Or, perhaps, you are one of those individuals who want to oppress.

Whatever and whichever, have a nice day and please understand that I think your idea of acceptable moderation is extremely dangerous.

 

In Australia (and a lot of other countries) American businesses want to trample our right to the presumption of innocence, right to a fair trial, requirement to show "just cause" and misinterpretation of "fair use" under OUR copyright laws, they are actively lobbying for this in the "war" against piracy.

 

Unfortunately our Government is quite happy to go along with this as it presents the means to control citizens' use of the Internet, for our "own good" of course.

Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
post #170 of 188
Quote:
Originally Posted by hill60 View Post

In Australia (and a lot of other countries) American businesses want to trample our right to the presumption of innocence, right to a fair trial, requirement to show "just cause" and misinterpretation of "fair use" under OUR copyright laws, they are actively lobbying for this in the "war" against piracy.

Unfortunately our Government is quite happy to go along with this as it presents the means to control citizens' use of the Internet, for our "own good" of course.
If you are talking about RIAA and it's efforts with respect to copyright, then I won't argue with you. I will suggest that other countries' have organizations with similar goals in mind. It isn't just American companies. If, however, you intended your comment as an across-the-board shot, your aim is really too broad.

You comment, valid or not, has absolutely nothing to do with what I am talking about either. But, I think you know that.

As for the more narrow issue you refer to, I understand what you are saying. I think that the DMCA and similar laws, created and/or perpetuated by organizations like the DMCA, often go too far and put too much unfettered power into the hands of a few. But, I also think that copyright holders do need some ability to protect their financial interests in their creative works as well. Having been a victim of those who used my copyrighted material without permission and for their financial gain, the only means I have to collect fair compensation when the thief refuses to pay for their use of my material is a take-down notice or the threat of the same. Without that, I have had people refuse to compensate me for using my work. Further, failure to protect my work is to lose copyright protection on that work. I have no choice. Obviously, if people did not steal others' work, there would not be a need for the DMCA.

The primary problem of such laws is that they make it too easy to assert protections too broadly and make the potential damages asserted too high without proof of real damage or even proof of ownership. And, the restrictions on use can be construed as overly broad and vague. I have mixed feelings about such laws. However, would such laws even be needed if so many people didn't erroneously consider it their right to steal the works of others and use them in an unfair manner? Or, as some seem to think, that such use is not stealing because those materials belong to everyone.
Edited by macaholic_1948 - 3/11/14 at 5:37am
post #171 of 188
Quote:
Originally Posted by macaholic_1948 View Post

Really? More and more countries have shown interest in censoring the internet. There are those in Europe and America that want to as well. Moderation as you call it, particularly when a significant %age of the world's population would be negatively impacted is not only a slippery slope but a major concern as well. But, if you can sleep well knowing that a couple of billion people or so re being oppressed and receiving biased and incorrect education and information, then I guess the rest of us should as well.

Or, perhaps, you are one of those individuals who want to oppress.

Whatever and whichever, have a nice day and please understand that I think your idea of acceptable moderation is extremely dangerous.
Perhaps I worded my initial post badly, but you've taken "moderation" in a different way that I intended. I wasn't saying that government should moderate the internet. I was saying that government involvement (the intention was broad, but applies to involvement in the internet) is and has been beneficial, but should be moderate, i.e. not all-encompassing or oppressive. Equally the free market has a role, but should not be all-encompassing and with regulation making it subject to common laws, and some internet-specific laws. You seem to have extrapolated what I said to sponsorship of an Orwellian intervention, but common sense should tell you that's not what I mean at all, I'm saying that sensible measures can and could be take to fend off a nightmare of a different kind - a lawless free for all. In addition my initial point was about how government had created or sponsored the creation of a lot of the technologies that led to the current state of technology industries. If government had no role we wouldn't be where we are today, and it's managed to do that in a broadly balanced and unoppressive way, up until the last 10 years where things have gone a bit wrong. Hence, moderation of activity is good, not complete abstention.

"Moderate" in the conservative adjective sense, not the censoring verb sense.

censored

Reply

censored

Reply
post #172 of 188

Apple are not based in Ireland.  They are based in the USA.  They have some subsidiaries in Ireland, but that is not the same thing.

The Apple entities ARE based in Ireland. They are subsidiaries but that is of no legal consequence in this discussion.

 

And I believe, although I not sure, that Apple had an incorporated entity inAustralia even before it opened its own stores there.

post #173 of 188
Quote:
Originally Posted by plovell View Post
 

The Apple entities ARE based in Ireland. They are subsidiaries but that is of no legal consequence in this discussion.

We weren't talking specifically about legal consequence, we were talking about the conceptual model of corporation tax being paid at the place where the company is headquartered.  Apple headquarters is not in Ireland, the main company is incorporated in the USA.  The use of subsidiaries as profit retaining entities in a low (or no) tax jurisdiction is exploiting a loophole (i.e. a lack of internationally applied unitary taxation) to get around the normal expectation of how corporation tax works.  Which is tax avoidance, by most people's reckoning; not illegal, but of a dubious business ethical practice.

censored

Reply

censored

Reply
post #174 of 188
Quote:
Originally Posted by Crowley View Post
 

We weren't talking specifically about legal consequence, we were talking about the conceptual model of corporation tax being paid at the place where the company is headquartered.  Apple headquarters is not in Ireland, the main company is incorporated in the USA.  The use of subsidiaries as profit retaining entities in a low (or no) tax jurisdiction is exploiting a loophole (i.e. a lack of internationally applied unitary taxation) to get around the normal expectation of how corporation tax works.  Which is tax avoidance, by most people's reckoning; not illegal, but of a dubious business ethical practice.

You miss the point - which is that Apple's Irish operations ARE headquartered in Ireland, and not in the U.S. So what Apple is doing is tax minimization rather than tax avoidance. I'll grant that it is rather dubious that these operations are incorporated in Ireland yet not directed there, thereby enabling part of the "double Irish - Dutch sandwich".

OTOH, Apple Ireland has paid its proportionate share of development costs ever since 1980 - this is no recent change. So profits resulting from that development effort rightly belong there rather than being ascribed to the U.S. entity. Moving profit from a high-tax country (U.S.) to a lower-tax one (Ireland) is NOT what is happening here. The profit in Ireland was generated from development paid for by Apple Ireland.

post #175 of 188
Quote:
Originally Posted by plovell View Post

You miss the point - which is that Apple's Irish operations ARE headquartered in Ireland, and not in the U.S. So what Apple is doing is tax minimization rather than tax avoidance. I'll grant that it is rather dubious that these operations are incorporated in Ireland yet not directed there, thereby enabling part of the "double Irish - Dutch sandwich".
OTOH, Apple Ireland has paid its proportionate share of development costs ever since 1980 - this is no recent change. So profits resulting from that development effort rightly belong there rather than being ascribed to the U.S. entity. Moving profit from a high-tax country (U.S.) to a lower-tax one (Ireland) is NOT what is happening here. The profit in Ireland was generated from development paid for by Apple Ireland.

You seem to have missed the point that altho Apple Sales International is headquartered in Ireland and thus should be paying their tax obligations to Ireland according to you, they are not. In fact they're paying them to no one at the moment.
melior diabolus quem scies
Reply
melior diabolus quem scies
Reply
post #176 of 188
Quote:
Originally Posted by plovell View Post
 

You miss the point - which is that Apple's Irish operations ARE headquartered in Ireland, and not in the U.S.

I don't miss the point, but think calling what Apple is doing with ASI its "Irish operations" is rather dubious in any real sense.  By Apple's own legal descriptions to tax authorities, ASI is not directed by any Irish executive, it is controlled by its US mother corporation.  Also, very little of what it does has any tangible relationship to Ireland.  And that's the point, all companies that exist as wholly owned subsidiaries of other companies in this way cannot really be said to have an effective "headquarters" in the way the corporation tax model understands it.  The headquarters is the headquarters of the mother, i.e. 1 Infinite Loop, Cupertino, California, for all of Apple's operations bar the most local sales and retail (I appreciate there is a grey area, but the majority of what we're talking about is well outside of the grey area).

 

I'm not denying the legal fact that ASI is based in Ireland and has the legal right to report profits as income in that jurisdiction and be subject to local tax, I'm saying that the economic reality does not line up with that legal arrangement.  And it is my opinion that the tax laws should require companies to report profits in line with the economic reality of what is going on, not use gimmickry and offshore shell companies to siphon off the value add of their business into low-tax jurisdictions.  And this is far from an Apple problem, this is a tax law problem that many, many multinational companies take advantage of.

censored

Reply

censored

Reply
post #177 of 188
Quote:
Originally Posted by Crowley View Post

And this is far from an Apple problem, this is a tax law problem that many, many multinational companies take advantage of.

And doing it rightfully so: what is the main goal for a company to do business: make money. Corporations doing this Double Irish thing is a good thing, an understandable one, and something every company should try to do if possible. Until the tax law prohibits this.
post #178 of 188

I disagree, and think that this companies vs government/taxation idea is extremely unhealthy.  Companies should do what is right within the spirit of the law and community, not just what is best for them.

 

The idea that the law should prohibit every undesirable behaviour is shifting the responsibility for good behaviour entirely on the government.  I don't think that's right or reasonable.  Corporations are not immune from ethical considerations and a social obligation to behave in an honest, forthright, and responsible manner.

 

The fact that they don't means that a collective government clampdown with regard tax is going to become necessary, and will probably need to be excessively harsh to curb this kind of behaviour.

censored

Reply

censored

Reply
post #179 of 188
Quote:
Originally Posted by Gatorguy View Post


You seem to have missed the point ...

I did not miss that point. My comment included it quite specifically ...

 

>I'll grant that it is rather dubious that these operations are incorporated in Ireland

>yet not directed there, thereby enabling part of the "double Irish - Dutch sandwich".

post #180 of 188
Quote:
Originally Posted by plovell View Post

I did not miss that point. My comment included it quite specifically ...

>I'll grant that it is rather dubious that these operations are incorporated in Ireland
>yet not directed there, thereby enabling part of the "double Irish - Dutch sandwich".

Then my question to you would be where do you believe Apple should pay the taxes due on it's profits for products sold to Australian and European customers? " No where" wouldn't seem to be an acceptable answer as that would imply you and other individual taxpayers are OK with covering for their shortfall yourself. Simply because something is not illegal doesn't make it right does it?
Edited by Gatorguy - 3/11/14 at 10:47am
melior diabolus quem scies
Reply
melior diabolus quem scies
Reply
post #181 of 188
Quote:
Originally Posted by Crowley View Post

I disagree, and think that this companies vs government/taxation idea is extremely unhealthy.  Companies should do what is right within the spirit of the law and community, not just what is best for them.

The idea that the law should prohibit every undesirable behaviour is shifting the responsibility for good behaviour entirely on the government.  I don't think that's right or reasonable.

Good point. There indeed is such a thing as ethical practices.
Quote:
Corporations are not immune from ethical considerations and a social obligation to behave in an honest, forthright, and responsible manner.

Still, they do what the law requires of them. Maybe I'm looking at this too Black or White, I or O, Yes or No, but 'if I were to run an international multinational' I certainly would hear my CFO out on the possibility of paying less tax.
post #182 of 188
Quote:
Originally Posted by Crowley View Post

I think that this companies vs government/taxation idea is extremely unhealthy.  Companies should do what is right within the spirit of the law and community, not just what is best for them.

The only solution that won't be fought against is for government to be funded without asking for money. People have an inherent dislike towards paying for things they don't see an immediate personal benefit from. It doesn't matter if they got an education out of it, waste treatment, transport/communications infrastructure, people take all that for granted now.

The problem is how to remove the supply that goes to pay the government from the private sector in order to avoid too much inflation. Say for example they worked out the US GDP at $17 trillion for 2013 and decided to fund the government at a fixed rate of that e.g 20% = $3.4 trillion. They just create that extra money supply like they did for quantitative easing. Then they just have to take that amount out of the private sector. If they fail to take it out, inflation happens and so it's in the best interests of tax payers for this not to fail. But, the tax can be taken through the banks via transaction fees. Every time a payment is made in a business deal (not individual to individual), the bank adds a small fee like Paypal or credit cards. This fee doesn't have to be anywhere near 20% because it's for every transaction and these fees repay the government's debt taken from the central banks.

What this means is that the government can eliminate all forms of explicit taxation - no income tax, no sales tax, no tax return forms either and no tax authority, just compliance officers for the banks (or money handler) - there's more freedom to do business without tracking every sale. Some people still use cash but it's going to all-digital:

http://www.mastercardadvisors.com/cashlessjourney/

What would be really helpful is if the government could eliminate physical cash entirely. To do this, they can make physical cards/wallets that have hardware identifiers along with digital cash that is just a set of sequential identifiers. The cards would have a balance display on them and can be pin protected. This can be integrated into phones. If you get on public transport, you can just bluetooth the transaction from the digital card so no need to have the correct change ever again. These cards can have a maximum capacity (e.g $250) to lower the risk of theft but still pin protected anyway. The tricky part is tracking the cash without a network but there will be a way to do it with some encryption scheme. If someone hacks it, their card identifiers will be flagged during a regular online scan of coin ids and they'll be tracked down quickly. We are on the verge of having ubiquitous networks anyway and basic GPRS is all that's required.

With no income tax or sales tax, it would increase disposable income so there would be more transactions made. We brush off 2.5% card fees so as long as there was a high enough volume of transactions (it would also apply to things like rent/mortgage payments, which helps), it would make up the 20% and like I say, the downside to not making enough is inflation. This inflationary value would also act as a regulator on how large the percentage of GDP should be allocated to the government.
Quote:
Originally Posted by Crowley View Post

a collective government clampdown with regard tax is going to become necessary, and will probably need to be excessively harsh to curb this kind of behaviour.

And the brunt of that is felt by the people at the bottom, which is the case now. That's why I think that small business owners would side with the large companies but it's because of the effectiveness of the avoidance at the top that it forces tax authorities to be harsh with everyone. $1b avoided at the top means having to chase the thousands owed by the hundreds of thousands of people at the bottom to make up the deficit.
post #183 of 188
Quote:
Originally Posted by Gatorguy View Post
Then my question to you would be where do you believe Apple should pay the taxes due on it's profits for products sold to Australian and European customers? " No where" wouldn't seem to be an acceptable answer as that would imply you and other individual taxpayers are OK with covering for their shortfall yourself. Simply because something is not illegal doesn't make it right does it?

That's a soft-pitch question. The easy answer is that Australian profits should be taxed in Australia and that profits earned in the various countries should be taxed in those countries.

 

The hard question is to determine what is the "profit" earned in the various countries. Unfortunately I have no good answer for that. I know that "retail price less cost of product ex-China" is NOT the right answer, although it is a part of the answer. On top of that base cost must be added costs of developing the hardware and software, software maintenance, ongoing services (iCloud is not "free"), warranty/guarantee and many others. That will give you a cost-of-product into Australia, Germany, France etc. Some of these may be in-country costs - for example the warranty costs may be split between the specific country and Apple Ireland and/or U.S. Once you have a cost-of-product and then additional cost-of-sales you can start to work out a number for "profit". That is - what is the value added by the Australian/German/French operation over the total price of the incoming product, less expenses to make the sale. Australia does not get to claim as profit the difference between total sales ($26.7 billion) and cost (manufacturing cost $15.5 b + operating cost $2.1 b).

 

AFR goes on at length about "profits that escaped from Australian tax" but this is just click-bait. Apple Ireland (the "ASI" in AFR's charts) has a very healthy margin on the products it sells to Apple Australia. The fact that Irish law does a poor job of tax collection is Ireland's problem, not Australia's. 

 

One might well wonder, as I do, if ASI's price to Australia is unduly inflated. Maybe, but then the AFR original article includes this ...

"There is no suggestion by the Financial Review that this arrangement is anything but proper within Australian tax laws." and

"Apple’s transfer pricing method since 2001 had been formally confirmed and agreed by the Australian Tax Office under an Advanced Pricing Agreement."  So I guess AFR and ATO just agree to disagree.

 

The essence of the "Irish problem" is here, again from the original AFR piece ...

" Apple Sales International and its parent, Apple Operations International, pay no tax in Ireland, according to Irish law, because they are managed and controlled in California. They pay no US tax either because US law disregards where a company is managed and only looks at where a company is legally registered."

 

So it seems to me that Apple is paying the taxes due on its Australian operations. And at the same time is being creative about minimizing tax paid by the Irish holding companies. And AFR gets lots of clicks, and politicians get to grandstand in Canberra ...

post #184 of 188
Quote:
Originally Posted by Gatorguy View Post

You seem to have missed the point that altho Apple Sales International is headquartered in Ireland and thus should be paying their tax obligations to Ireland according to you, they are not. In fact they're paying them to no one at the moment.

Apple are paying the correct amount of tax in Ireland under Irish law.

Ireland has the sovereign right to set tax laws as they see fit.

So Mr expert in all things Google, how will clamping down on Apple affect Google's bottom line, given that they use exactly the same method to avoid tax?
Edited by hill60 - 3/11/14 at 2:47pm
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
post #185 of 188
Quote:
Originally Posted by Gatorguy View Post




Then my question to you would be where do you believe Apple should pay the taxes due on it's profits for products sold to Australian and European customers? " No where" wouldn't seem to be an acceptable answer as that would imply you and other individual taxpayers are OK with covering for their shortfall yourself. Simply because something is not illegal doesn't make it right does it?

I think the ethical and probably acceptable option would for Apple Ireland to "sell" products to Apple Australia at prices to result in a reasonable (re-sale) profit for Apple Australia...that way, Apple Australia would pay more in corporate taxes  to Australian gov't.

 

As it is now, I believe Apple Ireland sells products to Apple Australia at an inflated price?

post #186 of 188
Quote:
Originally Posted by Marvin View Post

There is no part of free market trading that prevents a monopoly on the supply of goods. Just look at Comcast/Time Warner Cable. You can't say it's not the free market just because it fails. Food and consumer electronics have enough diversity that there's enough competition. This isn't the case with everything. If someone takes control or ownership of a supply of a limited resource like drugs or oil then there is no possibility for competition and that's when people run to the government to break up the monopoly. If there's a lot of competition, profits are driven down to unsustainable levels and it prevents new competitors. This is what happened with ebooks. Competitors in the free market never try to encourage competition, they try everything they can to prevent it with patents/trademarks/copyrights, buying up smaller rivals, undercutting prices and so on. If this was completely unregulated, we'd end up with a handful of companies controlling everything.

I don't think all monopolies are necessarily bad. You pointed out that, even with no competitors left in ebooks, Amazon was still forced to keep the price down, to prevent new entrants. Eliminating all your competitors is not the same as eliminating the threat of competition. 

 

There's also market size to consider. I'm sure once upon a time there were many companies making horse buggies but they were slowly displaced by cars. Nowadays they are a specialty item for giving tourists a ride through the park, and with such a low level of demand, one company might be the right number.

 

And then there's technological change. This is my personal favourite monopoly buster. For example oil itself was a monopoly buster (of Whale Oil). And in my lifetime I have seen the Microsoft monopoly caught flat footed by the tablet computer. 

 

And there is also people power. Even if you have a government that is against monopoly busting, that doesn't stop the people themselves simply boycotting any company that behaves immorally in some way. A good example of people power effecting the fate of a company happened here in Australia last week (though of the opposite kind). A 100 year old well-liked fruit cannery was going to go out of business, and asked the government for $25m assistance. The current administration does not believe in corporate welfare and said "No." So people got together on social media and got behind the company and, seeing how well liked the brand was, a national supermarket chain gave the fruit company a 5-year $70m contract to sell their fruit in their stores.

 

So yeah, my answer to a Ministry of Monopoly Smashing is that not all monopolies are necessarily bad, and sometimes they even make sense, and when they don't there's always people power, or failing that new tech usually gets them eventually.

post #187 of 188
Quote:
Originally Posted by ascii View Post
 

I don't think all monopolies are necessarily bad. You pointed out that, even with no competitors left in ebooks, Amazon was still forced to keep the price down, to prevent new entrants. Eliminating all your competitors is not the same as eliminating the threat of competition. 

 

There's also market size to consider. I'm sure once upon a time there were many companies making horse buggies but they were slowly displaced by cars. Nowadays they are a specialty item for giving tourists a ride through the park, and with such a low level of demand, one company might be the right number.

 

And then there's technological change. This is my personal favourite monopoly buster. For example oil itself was a monopoly buster (of Whale Oil). And in my lifetime I have seen the Microsoft monopoly caught flat footed by the tablet computer. 

 

And there is also people power. Even if you have a government that is against monopoly busting, that doesn't stop the people themselves simply boycotting any company that behaves immorally in some way. A good example of people power effecting the fate of a company happened here in Australia last week (though of the opposite kind). A 100 year old well-liked fruit cannery was going to go out of business, and asked the government for $25m assistance. The current administration does not believe in corporate welfare and said "No." So people got together on social media and got behind the company and, seeing how well liked the brand was, a national supermarket chain gave the fruit company a 5-year $70m contract to sell their fruit in their stores.

 

So yeah, my answer to a Ministry of Monopoly Smashing is that not all monopolies are necessarily bad, and sometimes they even make sense, and when they don't there's always people power, or failing that new tech usually gets them eventually.

 

Goodbye Qantas, goodbye Ford, Holden and Toyota.

Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
Reply
post #188 of 188
Quote:
Originally Posted by hill60 View Post
 

 

Goodbye Qantas, goodbye Ford, Holden and Toyota.

It is sad that Ford, Holden and Toyota are leaving (I wouldn't say Qantas yet). But it's been on the cards for ages, and I don't really want my taxes going to companies.

New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: General Discussion
AppleInsider › Forums › General › General Discussion › In-depth report finds Apple moved $8B in untaxed profits out of Australia over past decade