New Rules to Make Free Markets Fairer

If you believe in free markets then as well as allowing people to work hard to become wealthy, you believe they are good for consumers, because competition encourages innovtation, increases quality, reduces price and ultimately improves value. This is particularly important to the poor.

People will choose a range of different ‘best-value points’ on the quality/price graph, usually according to their income. The wealthy get better quality. This incentivises the poor to strive to become rich. You see, I DO understand ‘the idea’ behind Capitalism.

The danger is a supplier that comes to dominate a market to such an extent that it can control that market and disrupt competition. It is a duty of government to prevent such monopolies, even if MPs are shareholders or provide consultancy services.

I want to outline some legislative changes that I think would make to free markets work better for consumers and the environment.

  • Bundling
    It should be illegal to offer discounts for buying more units than you want, unless there is a genuine cost saving to the supplier for supplying in bulk.
    Our planet is running out of resources. We don’t want to rush that.
    Buying food to throw away raises prices for people who can’t afford to eat enough to stay healthy. That is immoral.
    Buying 2 or more completely unrelated products together, at a discount, gives an unfair advantage to large companies.
  • Stop loyalty cards
    Yes, it’s just ‘virtual’ or ‘time-lapse’ bundling.
    People are ‘loyal’ to organisations that give them consistently good value
    A ‘bribe’ is a different thing
  • ‘Walled gardens’
    If 2 different products work together via an interface then that interface should be made public, so that competitors can compete fairly.
    When third-party products, parts or services are used, a supplier should not be able to withdraw warranty for unrelated parts.
    Purchase of Services e.g. an iPhone should be able to buy music easily from a site other than iPlayer and that option should be made as obvious by Apple as its own service. Microsoft were forced to make other browsers available to compete with Internet Explorer.
    A new phone manufacturer should be able to buy music from Google Play by developing its own software, making calls from their software via the same published interface libraries Google use, so it is not put at a competitive disadvantage by another product/service.
    If the original supplier claims that development costs were high and need to be recouped, then fair licensing costs should be charged, in exchange for full exposure of those costs.
    Such competition causes original manufacturers to provide the value their customers require.
    Manufacturers should not be allowed to keep purchase price low by subsidising from the sale of over-priced consumable items later, such as ink cartridges, vacuum cleaner bags or coffee machine capsules, or by suppying devices such as laser-printers with cartridges that are only half full with toner.
    Devices should not be sold at less than manufacturing cost.
    Total running costs should be made clear at point of purchase, in a standard format, to allow comparison with competitors.
    The ‘cost per standard unit’ of consumable items should be clearly marked. e.g. cost per cup of coffee.
    It is best for consumers if open interfaces are used, so offer tax breaks for companies on products that use industry-wide open standards for interfaces, developed in co-operation with all competitors, as that reduces overall costs to citizens.
  • Stop allowing patenting of non-innovative ideas
    Stop all software patents. They are destroying the software industry. Writing software is hard enough without having to constantly check if the idea you just thought of has ever been thought of before, via your legal department, if you have one.
    Small, innovative companies do not have legal departments, allowing large companies to put competitors out of business.
    Stop patents of any ideas, once the development costs + x% have been recouped. x might be different for industries with varying rates of R&D success. Being first to market already has a significant market advantage in fast-moving industries.
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