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Opinions ranging from the defiant to the upbeat have ricocheted around the Department of Justice's reported plan to conduct an informal review of the exclusivity agreements between mobile network operators and smartphone makers. Most notable, of course, is the highly successful, exclusive Apple iPhone-AT&T marketing partnership in the United States.
Do such agreements represent brilliant business strategies or do they fly in the face of antitrust regulation?
"Is it illegal? Who knows?" says Kevin DiLallo, a partner at telecommunications law firm Levine, Blaszak, Block & Boothby, LLP in Washington, D.C. "Is it lousy for buyers? You bet."
The legality/illegality question, presumably, is what the Justice Department intends to look into, in the spirit of conducting a hearing to determine if a trial is warranted. Many folks responding to articles in Network World, the Wall Street Journal and elsewhere have been divided in whether the Justice Department's informal investigation reeks of big government becoming an unnecessary butt-inski or whether consumer best interests are seriously at risk with such partnerships.
For example, DiLallo says he would "wager that if more than one carrier offered the iPhone, both the device and the service would be cheaper than what a single supplier facing no competition will offer."
Personally, I think it's laudable for the Justice Department to look into whatever it thinks warrants investigation. In my book, that's called "doing your job." On the other hand, will it find much to muckrake? Likely not.
Carriers face a slippery slope of maintaining enough control to ensure service integrity and performance levels while at the same time attempting to keep the doors to innovation open. Next time, I'll provide some specific food for thought about this and, in the meantime, would love to hear your opinions on the topic.
Joanie Wexler is an independent networking technology writer/editor in Silicon Valley.
Comments (5)
Here's an idea.. if you don't like the price then don't buy it...By Anonymous on July 13, 2009, 11:34 amHere's an idea.. if you don't like the price then don't buy it. Here's another idea.. if the iPhone is not selling becuase of the price then they would have to...
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Antitrust RegulationBy Karl1West on July 13, 2009, 11:42 amNot investigating this makes as much sense as letting the oil companies combine back into what once was called The Standard Oil Company. Hey we can have one supplier...
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Cellular Exclusivity DealsBy Anonymous on July 13, 2009, 11:54 amCellular Handset Deals: Time for a Change Posted by Michael Finneran, dBrn Associates http://nojitter.com/blog/archives/2009/07/cellular_handse.html
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monopolistic behavior has other traits...By Anonymous on July 13, 2009, 12:25 pmMy company uses Verizon exclusively, so the only way I could use an iPhone is if I handed back my corporate paid smart phone and went out and purchased an AT&T contract....
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NO MORE REGULATION...By Anonymous on July 13, 2009, 4:10 pmWhat we DON'T need is more government regulation and intervention in the free market. I'm a Verizon user, and sure, I'd love to get an iPhone on Verizon, but I can't....
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