Markets Without Fair Competition and Effective Regulation
ALMOST 30 years ago the computer (and particularly computer software) industry reached a point where not having Windows was "difficult" because everyone was expected to have Windows to run "standard" programs or get so-called "computer skills" (which schools and workplaces expected pupils/professionals to possess or have long trained for, either formally or by experience, i.e. prolonged use akin to 'addiction'). This more or less meant that in the early 2000s Microsoft was already grossly overcharging people. Microsoft did a lot of illegal stuff other than that.
No competition (or no viable alternatives for particular proprietary formats and precompiled binaries) means people will just pay a high price, typically tied very strictly to the price of a new physical computer. Microsoft was selling to OEMs, not people. It was gaming the channel to actively restrict choice.
There are many examples where a lack of true choice encourages cartels (like the OEMs above), higher prices, and price-fixing (ensuring prices artificially remain high; patents do this too).
Some people become very rich this way. But at whose expense and is this moral? Is this desirable? Antitrust laws exist for a reason.
AMD and Intel are a good example of this. Two sides of a similar coin. Intel is suffering because nowadays most computers don't use x86 processors and don't even have a keyboard. In the server room too alternatives computer architectures are explored. This means Intel does not command the price anymore. It lost that.
But outside the areas (domains) of microprocessors and software there are also several examples. Some were discussed today and yesterday in IRC.
Let me use the example of batteries (finger-sized, the "classic" stuff, notably AA and AAA sizes). It's very fresh in my mind. I spent the past 2 days doing lots of work... sort of researching this market, both online and offline. I checked stuff in my drawer (from the 1990s mostly), including the charger that's sturdy, over 30 years old, and still works. I also checked the state of very old rechargeable batteries, effectively chemicals inside a metal vessel/tube. What I generally found was, almost every shop around here stocks no rechargeable batteries (the small local shops anyway) and bigger shops either don't have them or sort of "hide" them, encouraging people to instead buy batteries over and over again, never reusing them. Most stores only stock the two famous brands, nothing else (I won't say the brands out loud). I checked Argos, Sainsbury's, Tesco (both Express and Online), Asda (physical megastore) and another place near us, even if only to make a point or study the situation in order to report it. Eventually I checked eBay, knowing that many physical markets don't stock rechargeable batteries (I already checked in prior months). I'll no longer explore the matter because I made a purchase this morning, but the main lessons are:
- Many shops take advantage of people being too busy or lazy (having a job and kids contributes to a lack of time), so they mercilessly overcharge them
- Two (or just one) brands dominate the shelves to the exclusion of any "generic" (as in, lesser known) competition. It's a bit like Pepsi and Cola (most places offer only one or the other; even the water and orange/fruit juice would be owned by the same supplier/parent company of the soda; this market consolidation lets them overcharge for just syrup and water blended inside a cardboard cup). Asda is the exception, but it even goes out of its way to promote the "big" (expensive) brands, maybe because of some marketing arrangement/display agreement. The whole section/stand promotes one particular brand.
- There seems to be an effort to hide rechargeable options; in Asda, for instance, they hide those around the corner, so even if a few are available, it's almost impossible to see and to really find them without store assistance (they're also overpriced)
- There may be price-fixing going on because the "big two" are almost the same price/s and various shops all stock them for the same price (or almost the same), so it does not feel like there's any competition happening
How did "the market" become this bad? How was choice narrowed down to the point where people can only choose between expensive and another expensive? (Unless they walk the extra mile)
If we value the planet (the only planet we have) and recognise the harms done by the metals and chemicals inside batteries, why aren't there campaigns to use rechargeable batteries by default or for shops to promote rechargeable batteries by default? Because less batteries would get sold?
Disposable, single-purpose junk seems to have become the norm/al, even for the chargers, which look like plastic toys, not appliances. How safe are these? How long will they last before becoming fire hazards?
There are precedents for it, e.g. the Phoebus cartel. Here are some articles about that:
- The Phoebus Cartel – yes, light bulbs lifespans were lowered for profit
- The Great Lightbulb Conspiracy
- Light Bulb Cartel
The Phoebus cartel is now 100 years old. It'll officially turn 100 in about 70 days. To quote IEEE (second above): "On 23 December 1924, a group of leading international businessmen gathered in Geneva for a meeting that would alter the world for decades to come. Present were top representatives from all the major lightbulb manufacturers, including Germany’s Osram, the Netherlands’ Philips, France’s Compagnie des Lampes, and the United States’ General Electric. As revelers hung Christmas lights elsewhere in the city, the group founded the Phoebus cartel, a supervisory body that would carve up the worldwide incandescent lightbulb market, with each national and regional zone assigned its own manufacturers and production quotas. It was the first cartel in history to enjoy a truly global reach."
The world would destroy itself (or rather, mankind would destroy its habitat) if we put profits before people. █