I totally agree with what Texrat is saying.

I think what he means is that free markets do work as long as they're genuinely free for everyone, but when companies reach certain size they are able to stop the markets being free.

A small example I might have mentioned before: there is an ice cream company in the UK which dominates the market, and they use the vast amount of cash they get from this position to give retailers freezers covered in their brand's advertising. For a while they tried to force retailers to only stock their ice cream in these freezers, so any smaller brands of ice cream were shut out of that retailer because there was only space for one freezer. The shop's customers no longer had a choice of what brand of ice cream to buy.

In other words, in those retailers who took the freezers it was no longer a free market for ice cream, it was a centrally-planned economy run by the largest ice cream maker who could dictate prices and product lines without fear of competition. That eventually leads to expensive shoddy goods.

The UK government stepped in and banned this, they said you can give away freezers if you want but you cannot use them to shut your rivals out of retailers, because that's destroying the free market. The only thing that should decide the success of a product is a consumer choosing it from amongst its rivals, all on the same shop shelf.

The market isn't there for its own sake or for companies' sakes, the market is ultimately there for the benefit of consumers. If monopolies go against the interests of the consumer, then they have to be regulated somehow or broken up so they are no longer monopolies.


Well, it's swings and roundabouts, in some areas of business the US is a much freer market than other countries, but as you say it certainly isn't in the phone world, and that's done real damage to the US phone industry.

Just compare the prices, coverage and services of US carriers with the prices, coverage and services of those in Europe and you'll see a world of difference. Americans pay more but get less, and this is probably because it's much harder to change networks in America so there's far less competition.

America lags way behind Europe and Asia in terms of handset technology and network quality, with odd moments of brilliance like the iPhone being the exception rather than the rule (and despite its UI design, even the iPhone is technologically backward by European or Asian phone standards as it lacks 3G or 3.5G).

US phone prices and network charges are extremely high, with coverage and network speeds extremely low. America must have been one of the last places in the world to continue supporting analogue mobile phones, and it has one of the lowest mobile phone penetration rates in the developed world.

It doesn't have to be this way: if the US government banned phone locking and forced carriers to allow their SIM cards to be used in any compatible device, the US phone market would become extremely competitive and start to resemble the US ISP market, which has some of the lowest prices and highest quality services in the world.

Finland DID ban phone locking, and all of the above came true. Did it harm the Finnish phone industry? Absolutely not, it made it more competitive, more professional and higher quality. It kept companies fit because they had to work harder to win customers.

ISPs don't tell you what computer to connect to their network, so why should mobile phone networks?