The Monopoly That Gets ‘Em When They’re Grieving

There is a lot of litigation nowadays on antitrust, and much of it hasn’t concluded. For instance, a few days ago, a Texas judge issued a ruling in a Federal Trade Commission case, in which a private equity owned firm called U.S. Anesthesiology Partners bought up a series of practices, and then hiked prices across the state. This is called a roll-up, and these practices, he said, can violate the law. Meanwhile, in a D.C. district court, a judge is deliberating on a case about Google’s practice of building out a network reliant on scale, denying that scale to rivals, and then raising rivals’ cost by harming customers who use the services of competitors.

What’s exciting is that for the first time in decades, enforcers are using the law. And using the law is actually foundational. During the late 1990s Microsoft trial, antitrust lawyers were deluged with calls from CEOs in other industries asking how to avoid violating the law. Monopolization declined. But since the mid-2000s, the law has fallen into disrepair, and those calls stopped.

Today, as a result, business leaders shape business strategy around monopolization. There are thousands of firms trying to find markets they can monopolize, doing in small scale what Google did to the internet, and what USAP did to Texas medicine. You can tell this because most have a certain kind of writing style, a boring set of code words that denote monopolization, like ‘moat’ or ‘competitive position.’

Here’s a great example of this kind of writing, from the CEO of the Auction Technology Group, a man named John-Paul Savant. “Our marketplaces have leading competitive positions in each of the geographies and verticals in which they operate.” ATG, which is a British company, runs a set of eBay-style marketplaces for professional auctioneers. Savant comes from PayPal, which was one of the places where executives got training in this kind business model framework and rhetoric.

It’s worth going into this business, not because it’s big – it’s not. But precisely because it shows that monopolization is happening nearly everywhere, to everyone, in every industry. You can identify these kinds of business strategies when you see certain code words, which again, are a result of enforcers not using the law for decades. I learned about ATG because someone who runs professional auctions told me how it’s increasingly difficult to run his business.

To understand this particular would-be monopolist, you have to start with what happens to someone’s stuff when they die. Usually, a lot of it gets sold, fast. When someone needs to sell the bulk of their possessions very quickly (in the event of a death, downsizing, moving, etc), they hire a liquidator to extract what value they can within the time available (usually short turn around).  Liquidators typically charge a commission for this which is on average 40% of gross sales.

Estate liquidations are popular because people can often find cool treasures for a bargain price.  Any given weekend, there may be dozens of liquidations happening and customers turn to estate sale advertising websites, especially www.estatesales.net, to sniff out the best opportunities.  In any given region, there is usually one dominant advertising platform that customers use to  decide where they are going to spend their time and money. “Obviously, companies use a variety of other marketing including private email lists, facebook/Instagram marketing, craigslist ads, etc, but estatesales.net is the primary gateway in our region,” my source told me. “The whole scene has quite a culture and many shoppers see each other frequently at different sales and enjoy comparing notes and treasures.”