When we talk of natural monopolies, the usual suspects tend to be utilities like power, gas, waterworks etc. Dominant firms in such industries can easily notch up huge market shares and thwart competition. No wonder then, these industries tend to be regulated around the world.
According to CNNMoney, US regulators are beginning to wonder if Google is a natural monopoly. That seems like a bit of a stretch. After all, isn't the internet a perfectly competitive market place? But 76% dominance of the search market does raise the question whether there's more than meets the eye. However, the company presents several points in its defense. First, 'competition is just one click away'. If internet users turn to Google, it is due to the power of habit and not because the company prevented them from turning to other search engines. Second, it doesn't lock anyone into its software like Google Docs. The software formats are open, so users can move content to rival products.
Because of these reasons, regulators have not been able to make a convincing case so far. Their best chance would have been if Google partnered with a rival like Yahoo. But that's not on the cards. For now, everyone simply has to acknowledge the fact that it is a great business - with a strong competitive advantage.
Look at government inefficiency, food prices have galloped at an alarming rate over the last few months. Some blame it on the poor monsoons. Some blame it on hoarding by greedy middlemen. In my opinion, the government unknowingly itself is a massive hoarder. As per a report in a financial daily, the stock of rice and wheat in government granaries is way above the minimum requirement. Sadly, much of this excess stock is stored in the open. It either rots or feeds pests. In my view, this is a national shame. We cannot get the basics right in such a crucial area when food prices are spiraling out of control and millions of Indians still go hungry. Such stocks should be stored properly and released in small lots to stabilise prices.
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