Metropol

It's a non-voting share. It actually saved apple back in the day, which is reasonably un-anti-competitive! The reason it happened is because office for mac was, and is, a nice money spinner for Microsoft.

Also, Mr Q, the iPhone's not alone in being an operator-exclusive handset. With other manufacturers it's only certain models but it's no different in principle. Exclusivity is also half sensible in a technical sense. In the US there are multiple network types over there and, over here, only O2 are doing EDGE and Visual Voicemail stuff so there is a certain level of defence in that area. I'm not saying apple don't gain a lot of money from getting a share in the monthly contracts, of course.

Sput wrote:Also, Mr Q, the iPhone's not alone in being an operator-exclusive handset. With other manufacturers it's only certain models but it's no different in principle. Exclusivity is also half sensible in a technical sense. In the US there are multiple network types over there and, over here, only O2 are doing EDGE and Visual Voicemail stuff so there is a certain level of defence in that area. I'm not saying apple don't gain a lot of money from getting a share in the monthly contracts, of course.

I appreciate there are some technical issues at play, but the exclusivity doesn't actually seem to relate to that. I think its a question of causality: does O2 have the exclusive rights to the iPhone because it handles EDGE and Visual Voicemail, or does O2 have EDGE and Visual Voicemail because it has the exclusive rights to the iPhone? It would be a different matter if only O2 were offering those functions, and therefore iPhone users would only get maximum utility out of their phone by signing up with that operator - O2 would have a monopoly by virtue of the fact that none of their competitors had chosen to offer those services. But if that were the case, you presumably wouldn't need the exclusivity arrangement at all - it would be entirely redundant. I would still argue the presence of the exclusivity arrangement demonstrates an intent to restrict consumer choice, and is therefore anti-competitive.

In terms of other operators doing the same thing, I think this is an interesting point for competition law. Law academics in Queensland have just reviewed the situation with the iPhone (for when it does launch in Australia) and have concluded that such exclusivity is illegal here. Yet according to those academics, that doesn't appear to be the case in other countries - Australia seems better placed to deal with competition in technology markets than other parts of the world are. I don't know how true that is, but it's an interesting point to consider. It certainly doesn't seem to be stopping the EU from beating Microsoft like a piñata.

Mr Q wrote: I think its a question of causality: does O2 have the exclusive rights to the iPhone because it handles EDGE and Visual Voicemail, or does O2 have EDGE and Visual Voicemail because it has the exclusive rights to the iPhone? It would be a different matter if only O2 were offering those functions, and therefore iPhone users would only get maximum utility out of their phone by signing up with that operator - O2 would have a monopoly by virtue of the fact that none of their competitors had chosen to offer those services. But if that were the case, you presumably wouldn't need the exclusivity arrangement at all - it would be entirely redundant. I would still argue the presence of the exclusivity arrangement demonstrates an intent to restrict consumer choice, and is therefore anti-competitive.

Yep, absolutely with you on the chicken and egg bit there, but it's also possible that one of the reasons other operators weren't interested was that they didn't want to implement those technologies. As for consumer choice, if they wanted to restrict they'd make every software update brick every hacked phone. I suspect the situation at the moment is for Apple to APPEAR to be defending the network deal, but in reality they're having their cake and eating it (lots of individual phone sales AND a fair few monthly fee shares).

I think anti-anticompetitive a bit of a stretch here since apple are a minor player in the phone market. There's no lack of competition going on. It's an incredibly diverse and active arena.

Australia seems better placed to deal with competition in technology markets than other parts of the world are.

Does oz have the iphone yet? If the competition laws there make iphones, for example, much more expensive and open to all networks, is that a better situation for the consumer than tying it to a network for a cheaper price?

I don't know how true that is, but it's an interesting point to consider. It certainly doesn't seem to be stopping the EU from beating Microsoft like a piñata.

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That's because Microsoft is utterly dominant in offices, government, the education sector (just) and increasingly so in the server room. Apple isn't in the same situation in anything except mp3 players. They'll never be the dominant choice for phones or computers but that's not the position they've been after. If they were to rise to such power they'd be noticed too, I'm sure. Don't forget, too, that this thread's not about consumer choice, it's about microsoft stifling competition.

Yep, absolutely with you on the chicken and egg bit there, but it's also possible that one of the reasons other operators weren't interested was that they didn't want to implement those technologies.

Absolutely - that's the point I was getting at. Operators have a right to choose which technologies they will and won't implement. If O2 is the only one who wants to offer them, then they're going to enjoy a monopoly - but only because no one else wants to join them. However, in that environment, why would you have an exclusivity arrangement? As I say, it would be redundant.

As for consumer choice, if they wanted to restrict they'd make every software update brick every hacked phone. I suspect the situation at the moment is for Apple to APPEAR to be defending the network deal, but in reality they're having their cake and eating it (lots of individual phone sales AND a fair few monthly fee shares).

Well, we'll wait and see. I know what you're saying - but as I understand it, they have been working on ways to strengthen the 'simlock' for future releases. It may be a case that they've conceded this battle, but could come back stronger in the next round.

Does oz have the iphone yet? If the competition laws there make iphones, for example, much more expensive and open to all networks, is that a better situation for the consumer than tying it to a network for a cheaper price?

No, there's no iPhone here yet, but it's tipped to be launched this year. I'm not sure you can say that the consumer gets the phone for a cheaper price if an exclusivity arrangement means there's no competition on price at the operating end. Ultimately, they're still going to be paying. On balance, we'd prefer to see a scenario where consumers were paying the true cost of the iPhone rather than have it obscured through hidden costs and charges associated with the operator - but ultimately this is something the competition authorities would have to make a determination on. We don't have a formal ruling or anything about whether the exclusivity arrangements, if implemented here, would be anti-competitive - as I say, just some law academics who've made a compelling argument that I tend to support.

That's because Microsoft is utterly dominant in offices, government, the education sector (just) and increasingly so in the server room. Apple isn't in the same situation in anything except mp3 players. They'll never be the dominant choice for phones or computers but that's not the position they've been after. If they were to rise to such power they'd be noticed too, I'm sure.

Look, I understand why Microsoft gets the attention it does, but I think it's a problem when you've got the European Commission almost singularly focussed on Microsoft without considering at all what other, smaller firms in the industry are doing - especially when their actions are more clearly anti-competitive. If you look at the amount of money Microsoft is getting fined, many countries are paying less in their EU membership fees. It's obscene.