Why AT&T might well have "monopoly" and Lexus does not

[coolwater]

I like Lexus and I like iPhone.

Lexus is my favorite car and I will only drive a Lexus
iPhone is my favorite phone and I will only use iPhone

I can buy Lexus ONLY from a Lexus dealer
I can use iPhone ONLY with AT&T

I am not limited to buy a car other than Lexus
I am not limited to buy a phone other than iPhone

So I choose to buy a Lexus and I choose to buy an iPhone.

No monopoly so far.

But, what would happen if Lexus requires me to use only Allstate for my Lexus' auto insurance because Lexus and Allstate have an exclusive deal with each other? Or, what if I can only get oil change either at Lexus dealer or Jiffy Lube because Lexus and Jiffy Lube have an exclusive deal with each other?

If I don't have auto insurance with Allstate or receive oil change from Shell gas station, Lexus won't honor my warranty and I have to pay the full price for any repair. Yes, I agreed to those terms and signed the document at the Lexus dealer before I received my car keys. Also, I am free to go to any repair shop and have my Lexus repaired without warranty.

So, while Lexus is not "forcing" me to buy auto insurance from Allstate and receive oil changes from Jiffy Lube, Lexus is practically limiting my free choices to one insurance company and one oil-change place.

Some people would say it's no monopoly because no one forced me to buy Lexus at the first place. Well, it might not be a "monopoly" in a strict sense. But, it could well be a violation of consumer protection laws because it practically limits consumers' choices to only one service provider. I believe that violates perfect competition as well.

 

[The General]

Buy a different phone if you don't like AT&T. Or buy one on eBay, unlock it and use it on T-Mobile.

I don't see the problem here.

 

[coolwater]

Buy a different phone if you don't like AT&T. Or buy one on eBay, unlock it and use it on T-Mobile.

I don't see the problem here.

I am using iPhone no matter what.. whether I like AT&T or not. I am only interested to see how the Senate FCC hearing would find the matter.

 

[redrox5]

I am using iPhone no matter what.. whether I like AT&T or not. I am only interested to see how the Senate FCC hearing would find the matter.

I believe depending on who pays them more, that'll be the direction the matter drifts toward.

 

[TheCookie]

Car manufacturers do work to make proprietary technology that can only be serviced by their dealers or by registered mechanics. That's more comparable, and is perfectly legal.

I am using iPhone no matter what.. whether I like AT&T or not. I am only interested to see how the Senate FCC hearing would find the matter.

And there's no such thing as a Senate FCC hearing.

Study some antitrust law before you go making stuff up. Next you're going to start arguing that I should be able to buy Gap clothes at stores other than Gap.

 

[coolwater]

Car manufacturers do work to make proprietary technology that can only be serviced by their dealers or by registered mechanics. That's more comparable, and is perfectly legal.



And there's no such thing as a Senate FCC hearing.

Study some antitrust law before you go making stuff up. Next you're going to start arguing that I should be able to buy Gap clothes at stores other than Gap.

Are you comparing high tech repair to voice calling and texting?

If there is no Senate FCC hearing, call it whatever the government does with FCC to protect consumers. I could care less.

 

[Night Spring]

Next you're going to start arguing that I should be able to buy Gap clothes at stores other than Gap.

The correct analogy will be, if you buy clothes from Gap, you can only wash them at a particular laundry chain. Can't wash them at another laundry store or, god forbid, at your own home.

 

[Phil A.]

Using that argument, you could just as easily claim that Apple should be forced to allow OS X on 3rd party hardware because they are restricting competition. Or, even iPhone OS should be available for use on third party handsets.

There is currently nothing inherently illegal or monopolistic about exclusivity deals and if that does change, I believe it will ultimately be to the detriment of consumers not the benefit: ATT invested massively in their infrastructure on the back of their exclusive deal with Apple for the iPhone, and this happens in other areas too.

 

[TheCookie]

Are you comparing high tech repair to voice calling and texting?

If there is no Senate FCC hearing, call it whatever the government does with FCC to protect consumers. I could care less.

The FCC (Federal Communications Commission) and the Senate are two very separate entities. One is a quasi-executive agency and one is a house of the legislative branch.

Furthermore, monopolies are not investigated by either--they are the purview of the FTC (Federal Trade Commission), which is yet another agency.

So if the FCC is investigating, they are concerned about consumers' access to communications technology, not monopolies. Either way, there are plenty of competitive devices available from other voice/data carriers, and it's unlikely that Apple or AT&T will be found in violation of anything.

And yes, I am. These are high tech items (both) which contain proprietary technology, and companies should be able to sell them under whatever circumstances they deem appropriate.

Limiting the iPhone to AT&T for a period of years has been very profitable for both companies--and preventing other cell phone manufacturers from doing so in the future will do nothing but stifle the innovation that we all love in the iPhone.

 

[Michael CM1]

You don't have a f#%@ing clue what a monopoly is.

In neither case are you even close to forced to do business with anybody. There are numerous phones that compare to an iPhone and can be bought on other carriers. I mean this is as stupid as saying McDonald's has a monopoly because only they will serve you a Big Mac.

Apple doesn't even have a monopoly on the music industry because you can easily buy music online from Amazon or buy a CD at millions of other places.

Please, people, stop thinking that because you want an iPhone and can't get it totally your way that there is some evil illegal operation going on. It's the same exact deal with the BlackBerry Storm on Verizon and the Palm Pre on Sprint. Get effin' over it.

 

[The Californian]

Car manufacturers do work to make proprietary technology that can only be serviced by their dealers or by registered mechanics. That's more comparable, and is perfectly legal.

Your analogy is flawed, companies are allowed to say that if you have their product repaired by someone other than their authorized repair personnel that it voids your warrant, that is simply a company protecting themselves from fraud. If they didn't have this clause, anyone could start banging around in their product and if they damage it more the company would have to repair it at their loss.

A monopoly is when a company is allowed to operate exclusively without competition where there is willing competition and many consumers.

What makes the Apple/AT&T agreement a monopoly is not that you have to have service through AT&T while subsidized, but that you cannot purchase it unlocked or most importantly unlock it once you've finished your contract.

What I really want to know though... Is where is there a Shell that will do oil changes?

 

[MikePA]

Please, people, stop thinking that because you want an iPhone and can't get it totally your way that there is some evil illegal operation going on. It's the same exact deal with the BlackBerry Storm on Verizon and the Palm Pre on Sprint. Get effin' over it.

Threads like this are perfect examples of all too common belief by at least 53% of the population who believes (not thinks) that whenever something 'bad' happens to them, they can run to the federal government for redress.

 

[mikey28]

OP, I think you need to think this through...

 

[Drewsky87]

Someone just finished their economics class this semester lol.

 

[avigalante]

Someone just finished their economics class this semester lol.

I literally laughed out loud at this - nice!

To the OP, you have no idea what you're talking about; I suggest that you research and read up on the following topics: competition, monopolies, anti-trust laws and partnerships.

 

[dancavallaro]

Furthermore, monopolies are not investigated by either--they are the purview of the FTC (Federal Trade Commission), which is yet another agency.

This isn't wrong, but the Department of Justice also plays a large role in litigating antitrust cases.

 

[ptsube]

Even if Lexus requires you to buy Allstate, that would not be a monopoly. There are plenty of other car and insurance companies. Just like there are plenty of competing cell phones and providers.

Competition is a result of business, not government intervention.

Thank you to the other people in this thread that still have common sense.

 

[JonHimself]

...Competition is a result of business, not government intervention...

Ideally, yes, not necessarily always in practice (especially lately)

 

[rKunda]

Someone just finished their economics class this semester lol.

HAHA! That's fantastic.

 

[TheCookie]

This isn't wrong, but the Department of Justice also plays a large role in litigating antitrust cases.

Valid point. I wasn't trying to exhaustively describe how antitrust law works--just point out that the OP didn't know what he was talking about.

 

[bossxii]

These threads are so entertaining, iPhone + AT&T are no where near a monopoly. The service provided (wireless communications) can be purchased thru numerous choices to the consumer in any given area.

AT&T landlines back in the day when you moved into a home and you had no other choice but AT&T and they blocked anyone from provided that service on the installed lines, is a monopoly, which the government broke up.

No one gives a S@#t about someone that thinks a company is monopoly because their personal choice makes them sign a contract they may not like. lol

I'm amazed some people can feed themselves with the retarded statements you find on forums about AT&T being a monopoly, ripping people off about upgrading their 3G iPhone etc...

Thanks to all the "challenged" people for their entertaining threads. Priceless!

 

[GfPQqmcRKUvP]

But, what would happen if Lexus requires me to use only Allstate for my Lexus' auto insurance because Lexus and Allstate have an exclusive deal with each other?

What if Allstate gave you 60% off the price of your Lexus in return for using them for auto insurance?


You see what I did there?