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Wal-Mart Delivers a Lesson to Antitrust Prosecutors

Posted By Madelyn Harwood On October 19, 2012 @ 1:49 pm In Economics | Comments Disabled

Wal-Mart made headlines last week for launching same-day delivery service in direct competition with Amazon.com. This new retail rivalry between the big boys—brick-and-mortar versus virtual—provides yet more evidence that no company, no matter its size, is immune from competition. That’s a lesson federal antitrust prosecutors ought to heed.

The “Wal-Mart To Go” service is slated to launch for the holiday season in northern Virginia, Philadelphia, Minneapolis, San Jose, and San Francisco. No doubt other retailers at some point will introduce similar services or variations on the same-day delivery theme. That’s because in a techno-world, where markets can change in an instant, remaining competitive demands continuous innovation. Businesses are thus under constant threat of losing customers and market power.

Amazon is not the only powerhouse facing competitive pressure. Google, Facebook, and Apple, for example, are engaged in an unremitting contest for customers. And the winner in all this scraping is the consumer.

Meanwhile, the Federal Trade Commission is seriously considering an antitrust suit against Google. The basis of the allegations appears to be that Google favors its own content in search results. Google denies this is so. But if their searches don’t satisfy users, competition would provide a faster and more effective remedy than government antitrust prosecution.

History is replete with examples of retail giants undone by upstarts or their own blunders. The A&P grocery chain, once number one in the country, was undone by its failure to keep current with modern trends in the business. IBM, too, was once considered indomitable—until Microsoft came along.

The Obama Administration should take note. As evidenced by Wal-Mart’s foray into Amazon territory, the market is remarkably self-correcting if unencumbered by government. In the sphere of free markets, there is no hegemon.

Madelyn Harwood is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm [1]


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