Linked by Kroc on Thu 30th Aug 2007 13:03 UTC
Editorial I hear often that when something new appears that "competition is good". The primary reasons competition is seen as good, are: it drives down prices; it gives consumers more choice; it pushes technology forward, quicker. Competition is not good because: competition is why consumers have to choose between HD-DVD and BluRay; competition is why DRM exists; and more. In this article, each of the supposed benefits of competition will be looked at in more detail.
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Nice try, but...
by risbac on Thu 30th Aug 2007 13:23 UTC
risbac
Member since:
2007-03-29

Your arguments are right, but to generalize about competitions from two examples (DRM and BluRay/HDDVD) is a bit too easy. If you have done some mathematics, you know it's not valid ;)

There are cases where competition is good, and cases where it's plain bad. When competition is for products relaying on common standards, then it works. You talked about IE and Firefox, that's a good example. Both rely on the HTML standard, and do NOT force the user to use their own standard. You choose the best product for the functionality you are looking for, and you can change whenever you want. That's a sane competition, you choose the product according to its merits.

HDDVD and Bluray are a bit different. Even if they both send video to a display, if you buy 200 bluray discs, you cannot switch to HDDVD easily. That can be a very poor competition. The sane competition about HD would be between manufacturers of players using all the same storage. Then you have to choose between players without really checking if your discs are compatible.

And you explain that competition means to beat the opponent. But who said that you will always succeed in beating the opponent and totally getting rid of it? That just does not happen in most cases. And when it happens, like with IE, it just goes to a monopoly, and you explained it's the worst situation.

Microsoft had no competition, so IE just didn't improve. So monopoly is the Devil, that's what you say, right?

The other possibility is competition, which leads to monopoly. So are we just doomed? ;) That's what I would understand from your demonstration.

I do think competition is the right thing, it pulls things up. But as I said, when it's about dragging customers to a locked system, it's as bad as monopoly which is more or less the same thing: you don't have the choice anymore. So maybe we could say that there are sane competitions and bad competitions? Any comments about this?

Edited 2007-08-30 13:26

Reply Score: 5

RE: Nice try, but...
by dbodner on Thu 30th Aug 2007 16:18 in reply to "Nice try, but..."
dbodner Member since:
2007-07-01

"So maybe we could say that there are sane competitions and bad competitions? Any comments about this? "

Agree completely. The car is the perfect reason to point out good competition. Japanese and European cars forced features into the American public that American manufacturers were forced to match if they wanted to keep business. If you got fed up with your car, the barrier to move to another car was low. Therefore, the consumer won.

Competition like BluRay vs HD DVD can hurt the consumer. The productions are fairly close to equivalent, at least to the point where the average consumer isn't going to notice. But choosing a format and investing in it could hurt the consumer 5 years down the road. There's a huge barrier to change in this technology once you've entered. It leads to people either getting burned years down the line when standards have been set, or a slow adoption rate (leading to consumers using dated technology).

There are times when competition is absolutely necessary. There are also times when standards are necessary to protect the consumer. I don't think these two need to be mutually exclusive.

Reply Parent Score: 2