Until next time,
The Proprietor.

The Commission says that customers should be charged at a wholesale rate, rather than the consumer rate, which they’re currently paying. Why? Because the above-wholesale rates “are therefore likely to limit the ability of a new entrant mobile phone company to compete”, the Commission said. Fair? In short, yes.

Snapshot: Telecom came about in 1986 as a state-owned enterprise under the Lange administration. It underwent substantial corporatisation over the next four years until it was fully privatised in 1990. Vodafone began its New Zealand venture in 1998 after buying out BellSouth’s operations in New Zealand, which at the time was around 130,000 customers.

A major turning point for the market was in 2003 when Telecom launched its ‘$10 txt’ plan, comprising of unlimited text messaging for just $10 per month. Customers moved to Telecom from Vodafone in their masses, solely for that lucrative deal. If Vodafone had fought back quickly enough by bettering or equalling the offer, they could have probably acquired monopolistic control of New Zealand’s mobile market.

Again, the regulate or not to regulate question arises. However, from a New Zealand perspective, this case is actually quite unique. Telecom spawned from a state-enforced monopoly that began trading as its own entity already armed with a nationwide infrastructure. Vodafone serve as their only competition, and hold their own in the market very adequately with their comprehensive services and superior handset range through GSM technology.

This two-horse market structure in New Zealand has inevitably been a haven for instances of anti-competitive behaviour, which is par for the course in a nation of just over four million people and two mobile operators. 2degrees’ entry to the market next month will add new competition to a previously stagnant and predictable market. Under the powers that be, it could flop. Or it could emerge as an incentive for all three competitors to really fight to keep their customers. Come next month, let the competition commence.

Until next time,
The Proprietor.

In response to the fairly heavy antitrust investigation and regulation of the Kremlin, uh EU I meant sorry, Microsoft have announced they’ll ship Windows 7, their upcoming operating system, without Internet Explorer. Microsoft are to supply Internet Explorer to both manufacturers and users on an “easy to install basis”. The corporation released a statement: “This means that computer manufacturers and users will be free to install Internet Explorer on Windows 7, or not, as they prefer. Of course, they will also be free, as they are today, to install other web browsers”.

The European Commission have shown displeasure in this move, claiming Microsoft have offered consumers less choice, and would prefer it if consumers were supplied with a choice of browsers. My goodness.

Liberal translation: You comrades aren’t grown-up enough to choose for yourself, so we’ll force a private enterprise to make you choose – we didn’t think you could before..

The makers of Norwegian web browser Opera complained in 2007 that Microsoft including their web browser with their own operating system was anti-competitive behaviour. Opera are obviously a smaller market player, well, a very small one in fact. This is the market, if we shall call it that, for web browsers. Without the internet, a web browser is useless. The only entry barrier to the ‘market’ for web browsers is the user’s initiative. Free, open source browsers such as Google Chrome and Mozilla Firefox are readily available for download. For anybody, anywhere. I’ll bet the left wish they could tax them, too.

What we have here, plain and simply, is a heavy-handed intervention that assumes the consumer does not have the initiative or willpower to make a choice of their own in the market. Many internet users seek no more than the basic functions of their browser, which is why a simplistic option such as Internet Explorer satisfies most. Roughly 66% of web users, in fact.

Should Microsoft be asked to supply other peoples’ browsers for their customers to choose from? Absolutely not. If they choose to, fine. However, if Microsoft did happen to cut a deal resulting in another browser option being handed out with Windows, it could well provoke another antitrust case, on the grounds of Microsoft somehow furthering their stronghold on the market.

The EU deem that the market for web browsers is in need of regulation. It’s a market with free goods and services, virtually no existent barriers to entry, a basic commodity is traded and consumers are left to their own devices to choose, so to speak. While there is a tinge of disappointment that antitrust pressure has meant Microsoft will ship out 7 without a browser, that is the full extent of intervention at this stage. October, when 7 launches in Europe, will be interesting indeed.

Until next time,
The Proprietor.

So, what exactly is the deal? It’s alleged that Intel paid rebates to manufacturers who bought most of their x86 processing units from Intel as opposed to product from Advanced Micro Devices (AMD). Furthermore, Intel are also accused of paying off computer manufacturers to only stock systems running Intel gear.

In a nutshell, the EU says that Intel have acted in an anti-competitive, illegal manner abusing their ‘monopoly’. It’s evident the EU has fairly tight antitrust legislation in place, but the future of this case will deem to be fairly interesting indeed. Intel CEO Otellini said in a conference call to reporters that there was “a significant amount of evidence that was either ignored, disregarded, or both”.

The EU’s fine slapped on Intel coincides with the Obama administration vowing they’ll crack down on competition stifling, mergers and antitrust law, which the Bush administration left well alone. President Obama said in a 2007 address to the American Antitrust Association that “antitrust is the American way of making capitalism work for consumers”.

The corporate behaviour of Google is being monitored closely by US antitrust regulators, in particular their settlements with book authors and publishers, eventually seeking to get books online and whether or not it could be breaching antitrust law.

Microsoft are again facing potential antitrust woes over the bundling of Internet Explorer in with their other software and whether or not it’s legal. The infamous United States vs Microsoft case, over a very similar issue, was eventually dropped by the Department of Justice, who no longer sought to break up Microsoft into two separate units but instead pursued a smaller antitrust penalty.

It comes down to one’s idea of whether a government is to carry out its primary role, being in charge of the administration of a nation and its people, or also force its way into the private sector in an uncomfortably socialistic manner, exercising their power unnecessarily in what is essentially the ultimate form of monopoly – a socialistic regime that prevents competition.

It’s safe to say, this case will be interesting.

Until next time,
The Proprietor.

Firstly, welcome. For the record, The AntiTrust is an opinion-based blog which chronicles The Proprietor’s opinion on political, economic, societal and media-related topics. Popular culture, film, music, history, and whatever else comes to mind will undoubtedly surface on The AntiTrust at some point in time as well.

Considering the name of the blog, antitrust law will definitely be a regular feature.

Until next time,
The Proprietor.