Episode 40
Episode summary
In the midst of a surge of antitrust lawsuits from the last several years, Caleb and Liz break down monopolies, anti-competitive behavior, and what it means for small businesses.
Shownotes
Google, Visa, JetBlue: A Guide to a New Era of U.S. Antitrust Cases [NYT]
‘Google Is a Monopolist,’ Judge Rules in Landmark Antitrust Case [NYT]
After Google Antitrust Ruling, Here’s Where Other Big Tech Cases Stand [NYT]
U.S. Prepares to Challenge Google’s Online Ad Dominance [NYT]
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Transcript
Liz Wilke (00:00:00) – Hi, I’m Liz Wilke.
Caleb Newquist (00:00:02) – I’m Caleb Newquist.
Liz Wilke (00:00:03) – And this is the Gustonomics Podcast. In each episode, we bring you a little bit of economics knowledge so you can be more informed, use the information in your business or work, or have something soothing to bring you down from that pumpkin spice high.
Caleb Newquist (00:00:20) – Please remember to rate, review, and subscribe to the show or share with an economics curious friend. Anything you can do to spread the word about the podcast is greatly appreciated. Liz.
Liz Wilke (00:00:33) – Caleb.
Caleb Newquist (00:00:33) – Are you a pumpkin spice person?
Liz Wilke (00:00:37) – I think I would be on the fringes of the pumpkin spice nation. I don’t dislike-
Caleb Newquist (00:00:44) – The fringes? What are the fringes like?
Liz Wilke (00:00:48) – I don’t dislike pumpkin spice latte, but I’m kind of like the neighbor who passes by a house where like a really good party is going on. And it’s like, I think they are having fun in there, but I don’t really know this person. And it would be weird for me to knock on the door and join.
Caleb Newquist (00:01:06) – Oh, you feel like you’ve missed the party?
Liz Wilke (00:01:11) – I’ve missed the party. Yeah. I support what they’re doing, but I’ve missed. I’m watching from the outside.
Caleb Newquist (00:01:17) – I see. All right. Well, I mean, I am a firm believer in the fact that you are never late to the party regardless of what the party may be. But yeah, I like a pumpkin spice here and there and not just coffee or lattes or whatever hot beverage. I like some pumpkin bread. Pumpkin bread with a little bit of chocolate is very nice. But I know we’re getting ahead of things a little bit, but when Thanksgiving rolls around, I am a pecan pie person. I’m not a pumpkin pie person. So if you’re keeping score of that.
Liz Wilke (00:02:00) – I’m not.
Caleb Newquist (00:02:01) – Okay. Do you have a go-to pie at Thanksgiving?
Liz Wilke (00:02:05) – Bread pudding.
Caleb Newquist (00:02:06) – Oh, all right.
Liz Wilke (00:02:09) – So no is the answer to your question.
Caleb Newquist (00:02:13) – Right. Right. So anyway, speaking of a jolt to your system, there was a different kind of jolt very recently, correct? Liz.
Liz Wilke (00:02:23) – That’s right. There was the jobs opening and labor turnover survey report released today at the time of recording. It’s called the JOLTS report for those of you that are paying attention.
Caleb Newquist (00:02:35) – We’ve talked about it before.
Liz Wilke (00:02:37) – There was not very much jolty about it. It was a very unchanged report.
Caleb Newquist (00:02:43) – Okay.
Liz Wilke (00:02:43) – So the number of job openings is basically the same as it was before. It’s down about a million point three, excuse me. It’s down about 1.3 million over the course of the whole year, but it’s been pretty stable sort of month on month, just a few changes here and there. Hires were more or less stable around 5.3 million. What the most interesting thing about that is that the hires rate is as low as it was in about 2010. So the hires rate is pretty low. If you’re in the job market looking for a job right now, it’s tough to find a job.
Liz Wilke (00:03:20) – On the flip side of that, if you have a job right now, nobody’s really letting you go. Layoffs and discharges inched up just a little bit, but actually the rate went down and separations like quits also were basically stable. So workers are sort of sitting tight and they are sticking around with their employers, sort of waiting to see, you know, what happens with the economy as you are attempting this off landing.
Caleb Newquist (00:03:47) – And what’s your read on this kind of steadiness in those numbers? I would say steady is good sometimes, but as you pointed out, if you’re looking for a job, it’s slightly harder to find a job than it was maybe just a few months ago.
Liz Wilke (00:04:05) – Honestly, I think at this point, while the Fed is cutting rates, right, and we’re sort of not quite sure how the chips are going to fall, kind of no news is good news right now, right? So what’s going to be really tough is if there’s this sort of big reacceleration of demand and consumer spending, and that sort of ruins the inflation progress that we’ve made or sort of pushes us back. So we have higher interest rates for longer. What we also don’t want to happen, right, is sort of the bottom falls out of the labor market.
Liz Wilke (00:04:37) – These are hardly go-go days for the labor market, but the labor market is still in a pretty strong position. And like I said, I think for the time being, no news is good news on the labor market as long, especially as we’re continuing to cut rates.
Caleb Newquist (00:04:51) – Okay, so any meaningful revisions? Because revisions is something that we’ve promised to talk about more often.
Liz Wilke (00:04:57) – I would say there are not, there are revisions, they are not newsworthy or of note. I think the more, the more interesting revisions are about payroll employment, which come out in the employment report, which is not the JOLTS report, but the number of job openings in July was revised up by 38,000 to 7.7 million. The number of hires was revised down by 105,000 to 5.4 million. So if you think about how much 100,000 is on 5.4 million, it’s not so much of an adjustment.
Liz Wilke (00:05:30) – So there were definitely adjustments, there always are, but not anything to really change the story about a prior JOLTS report.
Caleb Newquist (00:05:38) – Liz did have you been to any concerts recently?
Liz Wilke (00:05:41) – I Was at a concert over the summer the yes, yes, I caught COVID at a concert recently
Caleb Newquist (00:05:51) – I’ve done that Okay Do you care to share who you saw?
Liz Wilke (00:05:57) – Yes. I’m very happy to share. I’m a big fan of this band They are called the Struts. They are a British glam rock band I’ve seen them far more times than I have seen any other band in my whole life because their music is very fun and very high energy and they put on a fantastic show So I’ve watched them move from smaller venues to successively bigger venues.
Liz Wilke (00:06:22) – We recently saw them at the Anthem in DC And they put on a they put on a fantastic show. It’s a great time every time
Caleb Newquist (00:06:29) – Great. So if I may ask were you happy with the price of the ticket that you paid for I was perfectly happy with the price of the ticket. Actually, I will say I was perfectly happy with the service charges on top of that ticket. But you’re setting me up for Ticketmaster.
Liz Wilke (00:06:51) – But actually It’s a it’s a rough setup because in my particular case the media company that runs a bunch of the venues in DC Also runs their own ticket service so they don’t go through Ticketmaster.
Caleb Newquist (00:07:06) – You just screwed it all up for me.
Liz Wilke (00:07:08) – I really screwed it up
Caleb Newquist (00:07:09) – Yeah, okay. Well, so the most recent concert I went to
Liz Wilke (00:07:14) – We should use your example. Maybe I If you’d like to yeah, if you
Caleb Newquist (00:07:19) – if you want to turn the tables on me,
Liz Wilke (00:07:21) – All right Caleb, what was the what was your most recent concert?
Caleb Newquist (00:07:25) – So my most recent concert was at Red Rocks Amphitheater Here in Morrison, Colorado, well not here. I don’t live in Morrison, but in nearby Morrison, Colorado, it’s a very famous venue Maybe you’ve been maybe you haven’t but it’s a great outdoor venue and I saw I saw King Gizzard and the Lizard Wizard If you have not heard of this band do yourself a favor and look them up and especially look them up if they’re going to do a live performance near you because it was a lot of fun
Caleb Newquist (00:08:03) – They’re Australian. First of all, they’re Australian and they are the the amount of the different kinds of music they play is really remarkable like they they have like I don’t even know how many albums they’ve put out.
Caleb Newquist (00:08:16) – They’ve been a band for like a dozen years and they’ve put out like 30 albums and but they’re known for their live performances and they play all kinds of different music for these live performances, you know, the they’re they’re really talented musicians and it’s a it’s it’s a fun show and Yeah, I went with a friend of mine who is really into this band and so it was my first time seeing him I had a blast
Liz Wilke (00:08:41) – Caleb. Were you satisfied with the price of your ticket?
Caleb Newquist (00:08:46) – I mean I was I Was okay paying what I paid However For some time now. I have been very unhappy With the prices that I’ve been paying to see live music.
Caleb Newquist (00:09:01) – In fact, I’ve been so unhappy with those prices I have been seeing less live music as a result
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Liz Wilke (00:09:42) – So Caleb, what are you talking about today?
Caleb Newquist (00:09:44) – The topic this week is something I think is very interesting and as a regular consumer, I think is relevant for a lot of people and that is monopolies
Liz Wilke (00:09:58) – Not like the board game
Caleb Newquist (00:10:00) – Not like the board game, which I do enjoy from time to time and kind of an ironic way.
Liz Wilke (00:10:05) – I enjoy it for the first three hours that I’m playing right and then We have to quit the game.
Caleb Newquist (00:10:12) – Yeah, and then it’s time to go to bed Yeah, a monopoly Liz Wilke for those listening who’ve never had an econ course or never played one of the oldest board games known to man. or at least in the modern era, what is a monopoly?
Liz Wilke (00:10:34) – Well, thanks for asking, Caleb. A monopoly is a situation in which a company has a market position that is so dominant, it is effectively the exclusive or almost exclusive provider of goods and services, which means it has an anti-competitive position and that creates what we think are like lots of distortions in a competitive market. We basically think they’re not good for consumers and they’re not good for a functioning economic marketplace.
Caleb Newquist (00:11:03) – Right, so monopolies are bad.
Liz Wilke (00:11:06) – That is the, that’s the place to start. Yeah. Okay. I think by and large monopolies are bad.
Caleb Newquist (00:11:12) – Do you have some classic examples of monopolies that you can give the audience?
Liz Wilke (00:11:17) – There are so many. And what I think is very interesting about this topic is that there has been a lot of action against everyday companies that everybody knows about and has interacted with and has heard about. And the Department of Justice, aka DOJ, under the Biden administration has become very forceful with prosecuting what it seems, what it terms monopoly or anti-competitive behavior. And we can talk about the difference between those two.
Liz Wilke (00:11:42) – So for example, Google currently has an action filed against it saying that Google is trying to monopolize internet search by making the Google Chrome search engine the default on many Samsung and Android phones.
Caleb Newquist (00:11:59) – Right.
Liz Wilke (00:11:59) – Right. And so because that default position is such a privileged position in the marketplace, Google making deals with phone makers to be that default position is effectively pursuing and solidifying Google’s monopoly on Google search, which has a bunch of implications for people who use Google to buy ads and also the people that use Google for search.
Caleb Newquist (00:12:20) – Right. Okay. And small quibble, I believe the suit that was filed with regard to search actually goes back to the Trump administration.
Liz Wilke (00:12:36) – It does.
Caleb Newquist (00:12:37) – It is kind of a bipartisan, I think antitrust. It does have a spirit of bipartisanship in it. It isn’t as political as most things.
Liz Wilke (00:12:48) – No, that’s definitely right. I’ve said the Biden administration has definitely stepped up, but you’re right to critique me. It’s imprecise to say that this is a partisan issue. It’s definitely not a partisan issue.
Caleb Newquist (00:12:59) – Right. And so two other technology or yeah, tech company examples that are also been under scrutiny are Meta, aka Facebook, with regard to their social media business and Amazon, which is under scrutiny for other reasons that I do not recall at the moment. Do you recall at this moment?
Liz Wilke (00:13:24) – Amazon is under scrutiny for many things. Some of the recent antitrust issues that it is under scrutiny for is creating an anti-competitive space for sellers in its marketplace by privileging its own products, right? In product placement, encouraging sellers to use Amazon’s other services like warehousing and logistics in order to get access to that coveted add to cart or buy now button, which really raises revenue for businesses.
Caleb Newquist (00:13:51) – Wow, okay, yeah. So big tech, I would say is probably the flashiest. Well, maybe not the flashiest, but they are certainly flashy examples of either monopoly or anti-competitive activity, but there are some other businesses too. One that I think a lot of people can relate to is Ticketmaster.
Liz Wilke (00:14:14) – Yep.
Caleb Newquist (00:14:15) – And what’s the story with Ticketmaster? For the people who don’t know, there might be a few people out there that don’t know, the people that haven’t been to a live performance of anything in a very long time. But what’s the story with Ticketmaster?
Liz Wilke (00:14:28) – So the story with Ticketmaster is that venues that wanna sell tickets. So Ticketmaster has got a dominant position. When you think about buying tickets, you think about Ticketmaster, right? So it has this sort of built-in advantage. So venues that wanna sell tickets to their customer base want to sell it through Ticketmaster because that’s how they get sold out and whatnot. Ticketmaster is basically requiring exclusivity deals with venues that go through it.
Liz Wilke (00:14:55) – It’s much more complicated than that, but for the purposes of this podcast, we’re gonna keep it sort of as simple as we can. And then because it has these exclusivity deals, it can charge far and above, right, the price of actually transferring the ticket or issuing the ticket from one person to another. And so that is how your $20 concert ticket ends up being $50 by the time you’ve purchased it on Ticketmaster.
Caleb Newquist (00:15:19) – Right, so if I may just give a very brief example, I live in Colorado. A very popular venue here in the Denver area is Red Rocks Amphitheater. If you want to go see a show at Red Rocks, you have to use Ticketmaster in order to go to the concert. There’s no, regardless of anything, whether it’s a comedy show, whether it’s a musical concert, Ticketmaster has an exclusive deal with the venue that says, we will sell your tickets to all your events and no ifs, ands, or buts.
Caleb Newquist (00:15:55) – And yes, then they can pretty much do whatever they want as far as adding fees and other things on it for you to go to that show. So we’ve given some fine examples. Now, I guess my question is, you’ve touched on this a little bit, but why is anti-competitiveness so bad?
Liz Wilke (00:16:17) – Well, I hopefully the Ticketmaster example is sort of the clearest case in point, right? So when you have a monopoly, it means there’s only one seller in the market, right? So if you want to go to a concert at Red Rocks, right, the only person you can buy from or the only company you can buy from is Ticketmaster, which means they can sort of set the price at anything that they want. And that price is almost always right thought to be above and over what the price would be if a bunch of people in the market were selling, right?
Liz Wilke (00:16:48) – So Ticketmaster maybe charges 20 or 30% on the ticket cost. But if Ticketmaster had to compete, right, with maybe another ticket seller or the venue’s own ticket seller or what have you, right, they would have real incentives to lower that cost in order to be competitive, right? Because shoppers could compare ticket prices and then get a better deal. But when there’s only one seller, there is no better deal, right? It’s just the only thing that you can do.
Liz Wilke (00:17:15) – So that’s sort of the first reason is that when there’s only one seller, there’s limited choice and businesses can sort of charge what they want in a way that hurts the customers, right, of that business, but benefits the company.
Caleb Newquist (00:17:27) – Yeah, the customers are ultimately the ones who suffer because they’re paying these very, very high prices when they should be paying a more, just a more fair price.
Liz Wilke (00:17:36) – Yeah, that’s the primary reason. There are two other main reasons. The second reason is that you think that there’s a loss of innovation in the marketplace, right? So if you only have one person selling a product, then they can make as much money as they want selling that one product and they don’t have really good incentives to think about how to deliver products and services better or how to put new products and services in, right? So monopolies reduce innovation, which is bad over the long term. It’s bad for economic growth.
Liz Wilke (00:18:10) – It’s bad for consumers because they have less choice and that sort of thing. That’s sort of the second major reason why we think monopolies are bad.
Caleb Newquist (00:18:16) – Is there a good example, like are any of the cases that we’ve discussed so far a good example of that?
Liz Wilke (00:18:20) – For those of you that remember the early gonzo days of the internet.
Caleb Newquist (00:18:23) – I remember them well.
Liz Wilke (00:18:25) – Netscape was the dominant search engine and there were many, many, many, many search engines, right? And there was Microsoft’s Edge or maybe Netscape.
Caleb Newquist (00:18:35) – Explorer.
Liz Wilke (00:18:36) – Microsoft Explorer was also a very strong player in the market. And there were many, there was Ask Jeeves, there was Webcrawler, there was Yahoo. There was lots and lots and lots. But so Microsoft was trying to solidify a position for web browsing. And so in all of its Microsoft machines, it installed Internet Explorer as a default. And that was how Microsoft overcame the other player Netscape Navigator as the sort of dominant internet search engine before Google ever came up onto the scene.
Liz Wilke (00:19:12) – And so the thought was basically that as long as Microsoft had a monopoly position, which by the way, there was a case about Internet Explorer and Microsoft in the late 90s as part of a big sort of suite of antitrust cases against Microsoft, Microsoft lost and then had to stop automatically installing Internet Explorer as the default, which gave Google, this sort of newcomer to the market, a way in, right, to become the Google that it is today.
Liz Wilke (00:19:42) – So actually, maybe one of the better examples is that while Microsoft had a stranglehold on internet web browsing, there wasn’t really much space for other competitors. And when that was broken, then Google got the opportunity, right, to come in and sort of become the Google that it is today. So the third reason is that, and it’s, I think this is a newer argument, especially with tech companies, is there are other, there could be other, what do you call, consumer harms with a monopoly position, even if consumers or customers don’t pay a higher price.
Liz Wilke (00:20:16) – So for example, search is free, right? I don’t pay to search Google. But Google takes my data and they use it in ways that I may or may not be comfortable with. But because Google is the only search engine out there, right, or Google is the dominant search engine, right, and it’s actually difficult for me to switch to another search engine, I may just accept, right, that Google is going to use my data in ways that I do or don’t approve of, right? So even though I’m not paying for Google, I’m paying for Google, right?
Liz Wilke (00:20:54) – There might be a better outcome for me, but I just can’t get it as a consumer because, right, Google is the dominant search engine. So that’s the third reason is that there, even if you’re not paying a higher, a lower price, you could be paying a price, right, for the lack of, the lack of competition.
Caleb Newquist (00:21:09) – Right. Okay. So is there a, is there a distinction to be made? between a very good business like these are all great businesses that we’ve all these examples that we can these are these are excellent businesses Is there is there is there a distinction to be made between a business just having a good business or a company having a good business and it kind of slipping over into anti-competitive behavior because when you read articles about this stuff the company says we believe this is a robust marketplace with lots of competition Yada, yada, yada, and we just have we we’re just trying to build a superior business so are there clues to the to to draw the distinction between a very good business and and anti-competitive behavior
Liz Wilke (00:21:59) – Not not strong ones. So So that’s the tricky part. I like what looks like good business can also look like anti-competitive behavior and I’m going to take a minute to do a very technical nitpicky thing, which is to say that monopolies and anti- competitive behavior are not the same thing.
Liz Wilke (00:22:20) – Okay a monopoly monopoly behavior is when one company does something to solidify its own position Okay, anti-competitive behavior is when two or more companies work together to solidify a position right and to in to affect the market which we can talk more about ways that those are different but anyway good business practice and anti- competitive monopoly stuff is a very blurry line between those things right and it basically comes down to how good an argument the company can make?
Liz Wilke (00:22:52) – Versus how good an argument the government can make or whoever sues right a monopolist in front of a judge who hopefully knows a thing or two about markets, right? That’s really kind of how it works. There are there are rules of thumb, right? So so for instance if you had a merger between two companies and that was gonna result in a company that owned 80% of the market, right? That would raise a lot of red flags and it would be very very very very hard to argue to a judge Right that that would not create an effective monopoly, right?
Caleb Newquist (00:23:24) – So for example, don’t even think about that Right. So for example the big there’s a there’s a pending merger between Kroger and Albertsons, which are two big grocery store chains, right? That’s right together. They would have I don’t it’s not 80% the example that you gave but they would have a big With if those two companies were to get together.
Caleb Newquist (00:23:42) – They would have a big share of the the grocery business in the United States and but they say well we have to compete with Walmart and we have to compete with Amazon and that those are big huge successful companies and so on the one hand a judge might listen to that argument and say gosh If you have 60% of the market, that’s quite a lot Kroger Albertsons But on the other hand you say oh, but you’re competing with Walmart and Amazon. Oh maybe this would be maybe maybe they’re right.
Caleb Newquist (00:24:13) – Maybe it is a competitive marketplace And so that’s that’s where it gets this is that I think that’s a pretty good example of how it gets real tricky
Liz Wilke (00:24:20) – Yeah, another another example is the proposed merger that I think is currently being blocked between JetBlue and Spirit Airlines, right?
Liz Wilke (00:24:28) – So if they merge they’ll form the fifth largest airline in the US market So it’s not even that it’ll make it the biggest airline in the US market or even the second biggest airline in the US market But it will you know take two companies out of the market make them into one and make them into a big one Yeah, and so the you know The the argument there is it’s consolidation in a market and you’re consolidating a low-cost carrier that creates competitive Pressure for other airlines right with a with a non low-cost carrier, right?
Liz Wilke (00:24:59) – And that you’ll lose a competitive dynamic in the airline ticket market, right by allowing Spirit Which is a very low-cost carrier to merge with JetBlue So I think that’s that’s all snarled up right now for the for the same reason, right? But JetBlue and Spirit would say we we can become a bigger company. We can serve more locations We can you know, we can compete with these bigger these bigger companies in the market, right? So so it really is a fuzzy line between what’s anti competitive and what’s you know?
Liz Wilke (00:25:27) – Just just like good competitive business and and let’s not forget The companies that are doing it have very strong incentives to say that they are not being anti competitive, right? So, I mean there’s there’s like it’s very blurry space there Okay, or for example if if Facebook buys Instagram, right when it’s very young and And doesn’t have a lot of the market. Is it anti competitive or is it adding suite to or is it adding a product right to its suite of products, right? Like many companies do right
Caleb Newquist (00:26:01) – Facebook makes the argument or Meta makes the argument that they’ve invested billions of dollars into Instagram since they have acquired it so it isn’t as if they acquired it and then snuffed it out, which is probably an anti competitive behavior They’re saying well, we’ve we’ve look at all these people we’ve hired. Look at all this money.
Caleb Newquist (00:26:18) – We’ve invested Look at the product changes we’ve made and that’s that’s their case for saying this is not anti competitive behavior this is us investing in a in a very good business.
Liz Wilke (00:26:28) – Yeah, that is the case. You can also again argue that both of those companies use Meta’s data privacy and data security requirements, right? Sort of we’re all subject to that no matter which platform we’re on So if you’re gonna be on any of the major social media platforms, right you kind of have to play by their rules So again, even if you’re not paying for a service, right the the I think Governments are becoming more Open to the argument that there could be other Harms for consumers that aren’t necessarily in the price that comes out of their wallet.
Caleb Newquist (00:27:01) – All right, great Liz. This is all good stuff So let me ask you this.
Caleb Newquist (00:27:05) – Why is this important for regular businesses, not big behemoth tech, or grocer, or ticket brokers, or pharmacy benefits managers, for your regular everyday business, why is this important?
Liz Wilke (00:27:24) – So I think that there are two important dynamics here. And the top one is directly related to the big companies that we’ve talked about. So some of these cases will be won, some of them will be lost. But if they are won, and say Google has to break up its search function, that is gonna change how every small business does internet marketing, right? That is gonna change if Facebook and Instagram were made to be divested from each other, which may or may not happen. That would affect how every small business reaches its customers, right?
Liz Wilke (00:27:58) – And there would actually be two new systems to manage. So it’s worth keeping an eye on because it can really shake up the infrastructure that small businesses use, right, to reach customers and to build their businesses. Amazon, I think, is also a really big one here because so many small businesses sell on Amazon. So if Amazon changes the way that you can get your product listed, right, or featured, or promoted, or added to cart, or what have you, without necessarily needing to use Amazon’s logistics and warehousing and promotional attachments, right?
Liz Wilke (00:28:32) – That’s gonna be a big deal, right, for small businesses. And we don’t know how it’s gonna shake out, but it’s definitely gonna shake something up. The second thing is that not all anti-competitive judgments are about big businesses. So I’ll give you two examples. The first one is related to a company called RealPage, which for those of you that don’t know, yeah, for those of you that don’t know, RealPage is essentially a apartment rental intelligence platform for landlords and property owners.
Liz Wilke (00:29:05) – So they give their information about when they’ve signed a lease, and what the terms of the lease were, and the square footage, and the other features of the apartment. And RealPage basically takes all of that from everybody and creates, and with its algorithm, basically creates a pricing recommendation for when to raise the price of an apartment, when to lower the price of an apartment, et cetera. Landlords love this, right?
Liz Wilke (00:29:29) – Because they feel like they are sharing their information with every other landlord basically in a city, and they are able to arbitrage, right? They’re able to squeeze out, right, any price difference in the market. So they can, this is basically price fixing and collusion, right, among landlords in an industry, is what the DOJ is saying, that basically landlords are all sharing all their information with each other to basically set a price that reduces the opportunity for renters, right, to get good apartments at less than that price.
Liz Wilke (00:30:01) – So if you are a small business, maybe a property management company, maybe a landlord, maybe you have some investment properties, you love this, but the existence of RealPage, right, and its ability to do what it does, right, affects you. So some of these antitrust things directly affect small businesses. And then the other really prime example right now is the settlement with the National Association of Realtors, right, so the NAR settlement went into effect. Realtors are small businesses.
Liz Wilke (00:30:27) – In fact, real estate is one of the most popular small business choices, right, for individuals. And the rules that NAR, that the National Association of Realtors was imposing about seller’s fees and buyer’s fees and who had to split what were deemed to be anti-competitive, right? They said they were artificially raising the price for sellers of properties. And so now the space is wide open, right, for how realtors, buyers, agents in particular set and negotiate their prices because it usually, it was just fixed, right?
Liz Wilke (00:31:03) – So trade associations are squarely within the set of organizations that you can go after for anti-competitive practices, right, by the rules they set, by the licenses they require, et cetera. So it’s not at all clear that some of these decisions won’t directly affect how small businesses operate through, right, the trade associations they have or the services that they rely on.
Caleb Newquist (00:31:26) – Okay, that is it for this episode. We hope you learned something new and useful for your business. I learned a lot today. Please let us know what you think about the podcast by leaving a review or sharing it with a friend or colleague who might enjoy it. I’m Caleb Newquist.
Liz Wilke (00:31:39) – I’m Liz Wilkie. Thanks for listening.
Caleb Newquist (ad) (00:31:42) – The Gustonomics Podcast is made possible by Gusto, the people platform for over 300,000 businesses across America. If you’ve started a business and are ready to hire your first employee or just looking for an easier way to run payroll, visit gusto.com slash podcast to learn more. That’s gusto.com slash podcast.
