I have gone to Aspen Colorado for over 25 years. It's a lovely place with beautiful scenery, mild winds and attractive infrastructure. The buildings are from the Silver Boom in the late 19th century and provide a wonderful Western flair. As a coffee junkie, I initially fell in love with a shop called Zele. Soon enough, I found what happens with many shops. The business was so successful that the owner of the real estate kicked them out and put in one of their own. It turns out that this phenomenon has a name: wholesale transfer pricing.
Wholesale transfer pricing is the bargaining power of company A that supplies a unique product XYZ to Company B which may enable company A to take the profits of company B by increasing the wholesale price of XYZ. In this case, the Aspen real estate owner supplied Zele with a perfect location that ultimately the real estate owner could take by either jacking up rents or kicking out the business. Nothing evil here, but it's a crushing dynamic if you're on the wrong end.
As current suits stack up against Google, Facebook, Apple and Microsoft, it just reminds me of the Aspen Zele dynamic. These Big Tech companies have simply created and own the critical real estate. Businesses can come in and build very successful businesses on top of that real estate, but to quote the labor union at UPS, Big Tech can simply say to those businesses "you make more, we take more." Rules of the road. The critical part is not to be invested to heavily that relies on another company with such bargaining power.
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