[LINK] Apple is turning into the evil empire

Brendan brendansweb at optusnet.com.au
Wed Mar 9 21:38:23 AEDT 2011

On 03/09/2011 03:07 PM, Dr Bob Jansen wrote:
> On 09/03/2011 2:37 PM, Roger Clarke wrote:
>> Tragic and frightening aspects include the following:
>> (1)  users don't understand what they're buying into
>> (2)  users are therefore not giving consent, just being conned
>>        into accepting conditions that are against their interests
>> Tragic and frightening aspects might also include the following:
>> (3)  some of the people who have the capacity to explain that to
>>        them don't do so (or maybe don't even understand the problem?)
> 1. I would argue that most consumers do know what they are buying in to. 
> When they buy a fridge they want something that keeps the contents cold. 
> When they buy a TV they want something that lets them watch TV channels, 
> they don't care whether it is IP TV or  wireless TV, just let me watch 
> the show I want when it is on. As for computers, most consumers I know 
> just want it to do certain things, like web, email and word processing. 
> They understand, as far as their knowledge lets them, what they are 
> buying in to. If it works for them at a price they can afford then 
> that's all they want.
> 2. Like all consumers, we are all at risk of being conned by 
> unscrupulous merchants who sell us stuff against our interest. But what 
> would be the effort to get the complete picture before signing? I would 
> posit that we would not sell anything - it'd all be too difficult and 
> confusing.

It is quite different for online services (which was the start of the discussion).  

1. In "old school" sales it is clear where the relationship between the buyer and seller begins and ends (typically at the point of sale).  In "new school" sales this is not the case - viz the Orwellian post-sale revocation of Orwell's e-books by Amazon a year or two ago.  Dymocks doesn't slink into your house and remove the books you bought after the fact.  It is an unusual "old school" transaction where there is an extended relationship so it is reasonable for consumers to pay more attention to what is going on in those special circumstances.  

1A. there is a natural limiter on "old school" sales in that they have non-trivial incremental costs, while "new school" sales have none (so they are "natural" monopolies *and* can be priced at $0 if necessary once infrastructure is paid for).

2.  the bargain between the consumer and the seller in these circumstances is something along the lines of "If I give you a small benefit for no money down, will you help me build a monopoly (through network effects) over the long term?".  ***The consumer is not competent to enter that bargain.***  

It would not be such an issue if regulators felt they ought to use their competition powers, but they are happy for new operators to be completely unfettered by any competition policy considerations (egs:
a.  practically the only thing an e-corporation can be done for is misuse of market power not the other stuff in the (old) Part IV; and
b.  regulators all seem to be smoking some strong Corporatist weed which makes them believe monopolies are necessary to provide services because they give critical mass.)

That said, I'm more sanguine on the issue of Apple b/c I'm not convinced Android won't cause Apple to change its iTune (so to speak). 

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