Is Koala Kare Harming You?

Before 1990, in a restroom, a mom had no place to diaper her infant. Placing the baby on the floor, she had to kneel, grab a wad of toilet paper, search her bag for the clean diaper, and hope the area was clean.

But then a Minnesota medical device salesman had a better idea.

 A Good Monopoly

He designed a mounted change station, got the patent, and called it Koala Kare. Next, once he convinced the male business owners (that equipped the bathrooms) sales soared. McDonald’s, Target, and Burger King all realized that Koala Kare could boost business. By 1997, 200,000 restrooms had change stations.

This is a 1990s Koala Kare ad:

Soon, though, the company’s expansion hit some bumps because of flopped acquisitions and debt. However, when the maker of the first hand-soap dispenser came to the rescue, Koala Kare benefited from some good judgement and luck. After Pennsylvania’s potty parity mandate, men’s restrooms also needed change stations. Similarly, when a federal Babies Act said all men’s bathrooms in federal buildings had to have changing stations, Koala Kare was their destination.

As a result, in 2024, Koala Kare’s 85% market share could be called a monopoly.

But that takes us to a question.

Why do U.S. and EU antitrust regulators target Apple and Amazon and Microsoft…but not Koala Kare?

Our Bottom Line: Monopoly Regulation

As economists, we could say that federal antitrust concerns relate to where we place Koala Kare on the following competitive market continuum:

The farther right we move, the less competitive we get. A perfectly competitive market structure has many small firms that make almost identical products and sell to thousands of customers. The firm has almost no power. Its price and costs are dictated by the market. However, as we move to the right along the scale, companies get increasingly powerful until we reach the far right. Because there, firms with monopoly power can determine price and swamp competition, the Sherman Act kicks in saying there is “restraint of trade.”

But it only kicks in when there is harm to the customer. We can guess that Koala Kare is doing no harm?

My sources and more: Thanks to The Hustle for inspiring today’s post. From there, do take a look at the monopolies that might not be good.