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Tech giants consolidate their power

12 November 2018

Two of the biggest names on the Internet are Amazon and Apple.

Alone, each of these companies is a formidable power with massive dominance within their respective markets and both have leveraged this dominance to create businesses worth incredible amounts of money.

And now, it would appear, they are colluding in a way that will effectively wipe out or significantly cripple a significant number of smaller businesses.

I'm talking about the deal which has been struck between Amazon and Apple which will see only "Apple authorised" refurbishers allowed to sell Apple products on Amazon.

This is regardless of the past trading record and levels of customer satisfaction that those smaller operations may have built up over many years through Amazon-based sales.

Can you say "bullies?"

This seems to be just the next step in an ongoing programme by Apple to squash any competition within the Apple ecosystem.

For some time now, Apple has been ramping up the pressure on independent refurbishers and repair shops by shutting down grey-market import channels and starving all non-Apple-Authorised repair shops of parts.

The claim is that Apple wants to ensure that repairs and refurbishments are done only to Apple's own high standards... so as to avoid damaging the brand.

However, it would appear that this is simply a deception because, if independent repairer Louis Rossmann is to be believed (and he seems very credible), Apple's own standards are very, very poor.

Watch this brief YouTube video for some evidence and look back through is channel to see the battles he's faced when trying to do something as import *genuine* refurbished Apple parts for spares.

There seems to be a growing trend, within quite a number of industries, for powerful companies to join forces in an attempt to further dominate their markets -- and thus effectively create monopolies that allow for huge profits and the elimination of competition.

We've seen it in NZ with the proposed merger of our two largest daily news publishers and we've also seen it with Sky TV and Vodafone attempting a merge.

Fortunately, our regulators seem aware of the highly negative effect these mergers of convenience can create through their reduction in competition within the market but no doubt, the pressure will continue.

Indeed, one only has to look at our outrageous supermarket prices and profits to realise that in some industries, we've already reached the point where a tight oligopoly or even duopoly has all-but extinguished competition and aggressive price cutting.

So, it's only natural that Apple and Amazon would get into bed together in this way... it ensures greater profits for both companies and squeezes the little guys out of the market.

I have to say that I am becoming less and less enamored of Apple. Their products are no longer as ground-breaking or desirable as during the Jobs era and their tactics are far from those I would like to support with *my* hard-earned cash.

As for Amazon... well they are seldom the cheapest port of call (there are plenty of cheaper online sources for most things) and they seem to pay scant regard to the rights of their own employees.

I guess however, that ultimately, the power to shape the markets is in the hands of consumers. By choosing where we spend our money, we can also choose the winners and losers.

Sadly, most consumers don't think of the bigger picture when making a purchasing decision and they just opt for whatever is easier or cheaper.

Sad really.

I wonder what we'll do when there are only a tiny handful of companies supplying almost everything we need and want. I guess they'll be able to name their prices and anyone who attempts to challenge them by setting up a new business will simply be squashed.

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