Tuesday, 26 February 2008
All over the press today that QUT people Dale Clapperton (of Defending Scoundrels) and Stephen Coroneos have published a paper arguing that a deal that saw the iPhone locked to a single telephone network could breach competition laws.
I’m not a competition lawyer, so I’m not really in a position to assess the validity of the argument from a legal point of view. Nor am I an economist, so I’m not able to tell you whether a deal like the iPhone one would actually pose a danger for competition. But Joshua Gans is, so head on over there for his views. In a word, not impressed. Ouch.
[Image by Hawken King, licensed under CC-BY]
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One Response to “iPhone lock illegal in Australia?”
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February 27th, 2008 at 8:39 pm
Hi Kim,
I never could get the concepts of vertical and horizontal monopoly right. My understanding of it was that horizontal meant trying to control all the outlets to the public; and vertical meant controlling the means of production. But then, it could be the other way around. (insert embarrassed smiley here)
Henry Ford, for example, attempted to control the oil, rubber, and steel needed to make his cars at the turn of the 20th century. With the power of mass production on his side, his Model T’s and Model A’s became iconic.
As Mr Gans pointed out:
Mr Gans, and at least one of his commentators, considered the move a bad business decision. But that depends on the popularity in the Australian market, doesn’t it?
And… Can a monopoly be decided upon popularity? Isn’t that government toying with the market forces and as poor a move as a monopoly?
Many aspects of Apple’s business model are monopolistic. (Ever tried to get a Mac repaired?) The same can be said of Microsoft, if you allow popularity to be the determining factor.
I doubt anyone could model this sort of “monopoly” without outlawing bad business decisions at many levels. Consider the concept of Business Channels…
As is pointed out in the citation from the Clapperton-Corones article, there has been no subsidizing of the sales, so where is the monopoly? (Ford had a multi-tiered price structure for his steel and oil which squeezed out his competitors – and poor performing sales operations!)
Anyway, it’s good to see you posting again to LawFont, Kim. My Bloglines have missed you.
Paul