Quote:
Originally Posted by pilotbob
Granted no one "forced" Dell to start making PC's. But, seeing that they required an OS to use and MS basically had the only one available at the time the used that situation to "force" Dell to not install apps that compete with the MS versions. (Which I never understood because MS didn't sell IE or Media player, but I digress).
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This is the key issue. The reason that MS was found to be in violation is that they were, essentially, the only game in town. Not the only source of Windows, but the only source of a mass-market OS.
That is
not the case with Amazon. They are the only source for Mobi, but Mobi is not the only protected ebook format, as eReader (Fictionwise), Sony and Adobe would happily point out. Just because Company X wants to make a reader, and wants to license my software for use on that reader, does not in any way compel me to grant such a license. I am free to negotiate most any terms I like, including the possibility of an exclusivity agreement. You still have consumer choice in terms of comparable competing products (the aforementioned products by Adobe and others).
Similar idea is the sale of cell phones -- the popular ones are often sold exclusively through only one carrier. So if you want the latest LG Whatever, you have to go through a specific carrier to get/use it, but since there are lots of competing phones to choose from, this is not a monopoly.
Back to the issue at hand, an economist would call this imperfect competition (barriers to entry, non-homogeneous products, etc.). You might make an argument for an oligopoly as there are relatively few companies competing, but since the various companies are not cooperating to set prices, limit features, etc., it would be a tough argument to make. OPEC is an example of an oligopoly.
Next week on EconToGo, we will discuss the difference between a monopoly and a monopsony.
Jack