20131437

Yusuf Salman 1 - REVISED

Deriving Competition from Monopolised Markets: the ICT User as a Consumer

1. Introduction
The competitive market model accommodates two different multi-user structures. The First is the
consumers, who try to maximise their utility by buying goods and services in a competitive
market, and second is the producers that have the resources to produce, and try to maximise their
utility (profit) by selling goods and services in the same market. This market, by definition of the
model, consists of indefinite numbers of consumers and producers, where each has a negligible
individual effect on the markets dynamics, but all create an environment for an optimal price
according to the cumulative supply and demand. Therefore, all actors are price takers. This article
will take this economic model as a basis alongside Consumer Theory and approach the idea of
users of information and communication technologies (ICTs) as the consumers.
A typical discussion on users and suppliers of goods and services in this context is concerned
with patent laws, software copyrights, competition law, and cross-media ownership. While
multinational corporations monopolising the ICT markets is still an issue of interest, some
models of approach and methods of legislation intended to increase competition should be
questioned in terms of the user as an active, unstable force that does not always act as an
insignificant individual actor in the market. Other stakeholders like the state or other interest
groups aside, this issue has the two most significant groups of stakeholders: the users of ICTs,
and ICT firms creating goods and services. Assuming that the interests of both groups will need
as little protection as possible through the natural functioning of the market, the competitive
market model serves both sides in theory. On the other hand, the concept of competition is one

20131437

Yusuf Salman 2 - REVISED

not fixed and stable in real life, but a dynamic, unstable concept. 1 Moreover, do the legal
measures and concepts to increase competition and protect both the individuals (ICT users) and
organisations (ICT firms) in terms of privacy, ownership, and similar issues actually create a
monopolised market in terms of an opportunity approach that would try to achieve a competitive
equilibrium of opportunity, rather than a price equilibrium in a perfect competition? This article
will outline a basic set of principles and approaches in theoretical models in economics and
intellectual property law, to investigate how economic models relate to the current competitive
issues discussed under intellectual property law in reference to the subjects like the rights of the
users2, regulations implied by states or other authorities, and the possible outcomes of policy
regarding ICTs.
2. Competitive Market Model and Consumer Theory
According to Consumer Theory, when an exchange takes place by voluntary decisions, we
assume the exchange makes both sides better off, as such an exchange would not have taken
place voluntarily if it did not favour both sides. So, an exchange of money, with a device such as
a mobile phone or a service such as a subscription to a social networking website already creates
some form of positive marginal utility for the consumer and the seller, as an individual would not
spend his/her money if it did not increase his/her utility. The phrase some form of here is
associated with the assumptions about exchange under Consumer Theory, such as parties in an
act of exchange being perfectly rational.3 Besides, such assumptions not only are concerned with
1 Noll, Roger G., The Conflict over Vertical Foreclosure in Competition Policy and
Intellectual Property Law, SIEPR, No. 03-22 , 2004.
2 Users in general.
3 Prasch, Robert E., Toward a General Theory of Market Exchange, Journal of
Economic Issues, Vol 29 (3), 1995, pp. 807-828.

20131437

Yusuf Salman 3 - REVISED

the individual dynamics benefiting individuals, but the society benefiting from the collection of
individual actions as well.4 Some discussions on the monopolisation of ICT markets and
intellectual property rights include this approach as a negative element, as people are naturally
not perfectly rational, or the idea that some intervention is required to protect the consumer or the
producer is common. So, in the scope of this article, such a form of positive marginal utility is
explained as the idea of marginal utility for the user. That is, even if the user might not actually
be better off by buying a new mobile phone, they would not have bought it if they thought they
would be worse off. In this example, the consumer at least thinks that they are better of, and this
is a form of utility.
While approaching the ICT market on this level, one might argue that the competition argument
regarding both sides should be a utility-optimising one, rather than a utility-maximising one. The
reason for this is that, with these models and concepts, the utility already exists, but must be
shared almost evenly within individuals or individual organisations in each group of stakeholders.
Utility also cannot be materially quantified; that is, Person As utility after consuming an apple
may be higher than Person Bs utility after buying a new car. The notion of utility in this sense
calls for the introduction of other concepts like emotions, privacy, human rights, and creative
industries in the discussion of the ICT market. According to Vilfredo Pareto, microeconomic
decisions made by individuals are largely irrational, and only rational behaviour in economic
decisions would be either repeating the thing that seems to work, or approaching utility as a
function derived from experience of having consumed a thing and being satisfied with the
consumption.5 According to Bruni and Sugden, Paretos approach in this matter and the current
approaches in behavioural economics suggest that economics is a separate behavioural science
4 Thomton, Mark, Cantillon and the Invisible Hand, Quarterly Journal of Austrian
Economics, Vol. 12(2), 2009, 27-46.

20131437

Yusuf Salman 4 - REVISED

that is independent of psychology.6 In any case, both of Paretos identification methods for
logical behaviour would stay outside of the assumptions of rationality, because repeating what
seems to work is not necessarily logical, but most of the time a flawed emotional way of thinking
that might not lead to what is rational, but maybe could help individuals reach what seems
rational. The consumption of something tried and felt satisfying might stand as first-hand
evidence because it is beneficial; however, it might also interfere with the possibility that the
consumer will be willing to try something else that might be even more beneficial. In this sense,
an opportunity approach would oppose some assumptions of the competitive model and
Consumer Theory, as it is about the opportunity and fairness in entering the market, regardless
of the fairness of conditions within the market. For example, with this approach, a company
worth $10 million and able to make $1 million a year has the same level of opportunity with
another company worth $1 million, but able to make $100 thousand a year.

The basic

competitive model does not take into account the differences in capital, opportunities in
investment, or the intermediaries which break the hypothetical competitive cycle that consists of
two sets of actors.
The competition approach dictates that any Firm A has as much right to exist as any other Firm B,
while the individual has the right to have as many choices as possible in consumption. In the real
world, this approach is not concerned about creative input, or emotional utility. So, in order for
the user to make a rational choice about one particular kind of good, the differences among
different brands should be present. So, in real life, consumers have preferences depending on
5 Bruni, Luigino, Sugden, Robert, The Road Not Taken: How Psychology Was
Removed from Economics, and How It Might be Brought Back, The Economic
Journal, Vol. 117(516), 146-173.
6 Ibid.

20131437

Yusuf Salman 5 - REVISED

many different material differences among brands and models of goods and services, and various
personal characteristics. Prasch also argues that this is a factor that undermines standard theories
about exchange, as the utility that a person receives from a particular exchange is, under certain
circumstances, not independent of the nature of the traded goods, their income, or social status. 7
According to the competitive model, an ideal market requires identical products from different
producers, which does not reflect individual preferences in real life. While this article makes use
of the competitive model, the definition of competition here should be being able to choose and
be chosen among materially different alternatives with individual opportunities as uniform as
possible.
Within the scope of this article, the competition is not necessarily one of goods and services, but
of opportunities, especially the distinction of formal equality and compensatory equality of
opportunities. Joseph asserts that formal equality of opportunities is essentially a principle of
non-discrimination or procedural fairness which thus includes concepts like recruitment
according to merit, on the other hand defining compensatory equality as a form of equality of
opportunities that demands compensation for the ones who started off in a disadvantaged
position.8 This article completely ignores the second type of equality of opportunities, as it is not
the aim here to try to go deeper into individual actors complex personal or commercial interests.
The assumption here comes from the preferences approach of Consumer Theory, and the question
of would the consumer consume a Good A, if it did not feel considerably superior to a Good B?
By the opportunity approach, Good A must have the same right to be considerably superior to any
7 Thomton, Mark, Cantillon and the Invisible Hand, Quarterly Journal of Austrian
Economics, Vol. 12(2), 2009, 27-46.
8 Joseph, Lawrence B., Some Ways of Thinking about Equality of Opportunity, the
Western Political Quarterly, Vol. 33(3), 1980, 393-400.

20131437

Yusuf Salman 6 - REVISED

other good, in direct proportion to its capacity as a product that has a function, meaning, and an
opportunity cost9.With this question of superiority in mind, the competitive model seems to fail as
a fully equipped tool to understand real-life dynamics between consumers and producers, because
it is merely a model. It still is an approximation of how markets should work under a certain
perspective, and it is at least helpful in understanding the differences between monopoly and
competition.
3. Competitive Approaches in the Literature
This section of the article approaches two different competitive concepts to clarify the concept of
competition in intellectual property law.

The Privacy by Design Approach, while largely

competitive, does not seem to be a competitive option in terms of opportunities, when it is a

requirement or form of standardisation. On the other hand, this approach may also be used as a
separate choice by a producer in promotion of its products. In such a case a consumer who is
more concerned about privacy will choose the product based upon these principles, and another
consumer who is more concerned about other functions will choose the product based upon other
types of functions. Secondly, the captive audience doctrine explains how concepts like freedom
of choice and freedom of options, or opportunities relate to intellectual property rights, and how
such concepts might be utilised to achieve a balance of opportunities. The third part of this
section compares and incorporates monopolistic rights and innovations, and is based upon
questioning the divisibility and relationships between the two.
3.1.

Privacy by Design Approach

9 The opportunity cost here is the cost including the emotional, personal cost of
choosing Good A over another good.

20131437

Yusuf Salman 7 - REVISED

The Privacy by Design Approach is a control-based approach concerning the control of the user
over the ICT tools and services they use. The Privacy by Design Approach which argues that
interactive/mobile goods, applications and services should be designed to protect privacy, rather
than setting privacy as a rule to cope up with user concerns, has been adopted by the Federal
Trade Commission10 in the United States and the European Commission11 in the year 2012. On
this level, the respect for the privacy of the individual is an aspect of a good or a service that
provides utility. Among the seven basic principles provided by Ann Cavoukian about this
approach12, one is directly related to this article: positive-sum, rather than zero-sum in
functionality of the goods and services. Here, Cavoukian argues that traditional zero-sum
assumptions require unnecessary trade-offs in usage. As argued here, dichotomies like privacy vs.
security, or privacy vs. functionality might be considered false dichotomies, and these couples of
concepts might as well exist simultaneously. However, the preference of the user as a consumer
is what creates the utility in the first place. For example, the user may find more utility in a
widely functional design with almost no concern in respect for privacy. On the other hand,
visiting back the exchange argument of Consumer Theory, the user somehow has already agreed
to have limited control over the product they bought, as the information about the product was
available to them to a considerable extent, and they would not have made the voluntary choice if
10 Federal Trade Commission, Protecting Consumer Privacy in an Era of Rapid
Change: Recommendations for Businesses and Policymakers. 2012.
http://www.ftc.gov/os/2012/03/120326privacyreport.pdf
11 European Commission, Proposal for a Regulation of the European Parliament and
of the Council on the Protecton of Individuals with regard to the Processing of
Personal Data and on the Free Movement of Such Data (General Data Protection
Regulatoin). 2012. http://ec.europa.eu/justice/dataprotection/document/review2012/com_2012_11_en.pdf
12 Cavoukian, Ann. Privacy by Design: the 7 Foundational Principles. 2009.
http://www.privacybydesign.ca/content/uploads/2009/08/7foundationalprinciples.pdf

20131437

Yusuf Salman 8 - REVISED

that information did not create utility for them. At this stage, the Privacy by Design Approach
might be considered as an approach that undermines personal choice, and tries to make the user
better off despite the user herself. In this sense, the rights and the competitive opportunities of
the user to transfer the control over their personal data, or the intellectual property they buy or
rent including the design of the goods and services- to another party, usually being the producer,
is also a form of control over such information. The user still has control, though not absolute,
over their personal data, by letting the device, the software or the producer use their data, not
transferring their rights on the data itself. They still own the data. The ownership discussion is
also popular in academic publications.13 Again, academics typically should be able to agree
and/or choose to accept that their work will be either placed in the public domain, or owned by
themselves. So, according to the concept of competition under the scope of this article, that the
user is not perfectly rational, or that the choice is not perfectly free of external factors does not
undermine competition, as the existence of competition in opportunities assumes material
differences. To ensure theoretically equal opportunities, such differences among any given set of
stakeholders must be equal to any other; however, this issue is only secondary to the main
argument about opportunities. Again, the user is free to choose from a set of goods and services
available to her, but the competitive problem here is that there actually is not an indefinite
number of equally available options.
3.2.

Captive Audience Doctrine

Monopolistic or oligopolistic control of the market is not always dependent on, or supported by
the preferences of the user. The Captive Audience Doctrine recognises an individuals interest in
13 Owen-Smith, Jason, Intellectual Property, Between the Ivory Tower and the
Market, Who Owns Academic Work? Battling for Control of Intellectual Property by
Corynne McSherry, Science, Vol. 295(5561), 2002, 1840-1841.

20131437

Yusuf Salman 9 - REVISED

being free from forced communication.14 For example, an advertisement on a billboard is not
technically forced upon an individual, but if the piece of advertisement is in the form of an audio
content inside a moving bus, the individual cannot avoid being subjected to it. That individual is
part of a captive audience. The sticky relationships created by monopolised ICT markets are
similar in nature. For instance, a user might be consuming services within the Google ecosystem.
They might be using e-mail services by Google at work, sharing files via Google Drive with their
colleagues, and attending meetings on Google Hangouts. Different factors interfere with their
choices here, and these are not usually about personal preferences. The more investment they and
their connections make into the same ICT ecosystem, the harder it will be for them to leave this
ecosystem.15 So, in a way, they are stuck in there, and they cannot choose to avoid
communication in that particular ecosystem, which makes them a part of a captive audience. This
resembles the concept of network externality that refers to an increase in consumer utility for a
product if the number of other people increases. This increase theoretically comes from the
reduced cost of using a product after buying it, such as having to put less time and effort in
learning such a product, or overall the technological advantages of the community of users and
producers as the advancement in technology is intellectually sponsored, in a way, promoted by
the larger user base.16 However, this concept has two significant differences from the doctrine of
captive audience. The sticky relationships between ecosystems and consumers in the example
affect the consumer directly, as they are the one stuck in the Google ecosystem. On the network
14 Fallon, Jr., Richard H., Sexual Harassment, Content Neutrality, and the First
Amendment Dog That Didnt Bark, The Supreme Court Review, Vol. 1994, pp. 1-56.
15 Baruh, Lemi, Salman, Yusuf, Mobil Mecralarda Veri Gizlilii ve Tasarmla Veri
Korunmas Yaklam, Pi: Pazarlama ve letiim Kltr Dergisi, 2014, 16-23.
16 Conner, Kathleen R., Rumelt, Richard P., Software Piracy: An Analysis of
Protection Strategies, Management Science, 1991, 125-139.

20131437

Yusuf Salman 10 - REVISED

externalities part, it is the producer that loses the limited number of users to whom the product
would actually be more beneficial if other buyer did not join in. Conner and Rumelt suggest that
the QWERTY keyboard layout is still the most popular layout for production, as almost everyone
uses it, despite the fact that many other layouts have proven to be more practical, faster, or less
prone to typing mistakes.17 The second significant difference is the level of obligation in the
continuation of usage. A user who is in a working environment will have too little or no choice in
using a different e-mailing service, file-sharing application or a device. For a softer approach, a
user will also be much less socially advantaged if they decide to leave Facebook, on which
almost all of their friends are. On the network externalities side, same rules may apply for the
producer, for example, in deciding to produce a totally different keyboard layout no one has ever
heard of. However, while such a thing is almost always a commercial decision for the producer 18,
the consumers choice here is almost always personal.
The example of a workplace might be too complicated here, as organisations can also have
commercial preferences. On a personal level, there is still a competitive problem about ICT
goods and services. Commercial preferences of organisations might require ICT goods and
services to be designed as to hold users responsible for following up on their rights to acquire
them, instead of recognising their rights by default.
Information ecosystems experienced through digital devices are increasingly inimical to
user disengagement both by the nature of their content-delivery architecture, design
which, we argue, is meant to prevent the user from switching to a competing brand, and

17 Ibid.
18 The almost here takes into account the hypothetical producer who might want
to introduce a new keyboard layout with their lovers name on the top row.

20131437

Yusuf Salman 11 - REVISED

by the nature of the users investment in customization of online and mobile services,
which create disincentives for users to repeat the customization process on different
platforms.19
Someone who has invested more in creating a profile on and getting used to Facebook will have
more difficulty moving away from it and to another social networking site. The Facebook
example itself still does not contradict with the idea of competition in this article, as the user
already had preferences and made the choice to invest in that particular platform; however, they
did not have enough options to begin with. There were not virtually identical platforms that
provide different functions but the same level of opportunities in the market of social networking
sites. So, the vacuum of opportunities created by Facebook created websites like Twitter. In the
online social networking market, none has a monopoly over opportunity; however, they are
materially different, and some people use Facebook, while others use Twitter, or both at the same
time like many.
3.3.

Intellectual Property Rights: Competition vs. Innovation

Intellectual property rights are monopolistic by nature. They give the right-holder a monopoly
over intellectual content. According to Mellor and Alexander, such rights also contradict with the
Treaty of Rome, which requires abolition of national barriers, as they remain territorial in
application and differences.20 Such an idea of monopoly over content not only damages
competition over the content as a good or a service, but also creates different circumstances about
19 Baruh, Lemi, Popescu, Mihaela, Trapped in My Mobility: How a Principle of
Control over Communicative Interaction Can Guide Privacy by Design in Mobile
Ecosystems
20 Mellor, James, Alexander, Daniel, Intellectual Property, the International and
Comparative Law Quarterly, Vol. 39(3), 1990, pp. 695-699.

20131437

Yusuf Salman 12 - REVISED

the content within different borders, therefore undermining the assumptions of equal
opportunities. Different conditions of entry into markets, and different conditions of operation in
such markets, while such differences are not proportionate to the overall opportunities of
consumers and producers in a hypothetical closed system, do not imply equal opportunities.
However, this monopoly does not necessarily have to extend to a market of intellectual content.
Two main approaches describe the competitive nature of such rights. By the pure understanding
of the Competitive Market Model, the first view is that IP concepts such as patents and
copyrights create unfair advantages in a market and harm the competition. On the other hand,
such rights encourage innovation by individuals and organisations.
By the utility assumption, the artist produced artistic content at least partly because of the utility
they get from the intellectual property rights. These rights, in this sense, might also be the only
source of their income, networking capabilities, or artistic development. Again, by the exchange
argument, the audience would not demand and consume, for example, a book with a price
including the royalties, if it did not contribute to their utility; that is, if the book did not present
artistic development, or a considerable amount of quality added by the writers incentive to
produce content that would bring the writer extra income. Another example is, according to a
tear-down report by a research firm, the iPhone 6 costs Apple about $200 to make, which shows a
profit margin of approximately 70%.21 This issue has many other sides, but Consumer Theory and
the Competitive Market Model explain some aspects of this monopoly rent, largely based on the
devices popularity. More than two times the profit over cost does not tell us anything good about
the absolute competition in that market; however, people are not buying iPhones primarily for
21 iPhone 6 Plus: $100 Costlier for Consumers to Buy Just $15.50 More Expensive
for Apple to Make, IHS, 2014, http://press.ihs.com/press-release/design-supplychain/iphone-6-plus-100-costlier-consumers-buy%E2%80%94just-1550-moreexpensive-

20131437

Yusuf Salman 13 - REVISED

things like making calls, sending SMSs, and similar activities, which they could easily do with a
$20 device. The iPhone has the added intellectual value to it, and users buy it to increase their
utility. The iPhones popularity might be because of its proclaimed unique design, the additional
functions it presents, the culture it represents or however significant it is- the innovation it
brings into the market. The existence of the iPhone as it is, is by itself a way to increase user
demand for the iPhone, and decrease the demand for other brands and models of smartphones,
as different models and brands of smartphones constitute substitute goods in the market. The
innovation activities performed by Apple definitely create some form of monopoly over some
user categories, and decrease the competition by creating a competitive advantage, but not
necessarily an unfair one. Apples right to have this competitive advantage encourages others to
innovate. The benefit of a governments promise to grant intellectual property rights is the
creation of incentives to invest in the research and development of new products. 22 Such
potential monopolization of the market forces the others to step up their game, and create more
desirable goods and services for the users. However, according to Schmalensee, especially large
patent portfolios owned by corporations might be used to hurt competition and harm other
competitors via infringement cases.23 On the other hand, this creates another potential of marginal
utility for the user, and the user is less likely to demand absolute competition in the market, while
they might easily be considering themselves as a part of a different, or cooler community, by
taking advantage of their preferences. On the other hand, for example, the same user would be
less likely to buy the new iPhone, if it were sold for $10,000 each. With this logic, the way to
create a perfectly competitive market of opportunities should come from creating a market that is
22 Wu, Tim, Intellectual Property, Innovation, and Decentralized Decisions,
Virginia Law Review, Vol. 92(1), 2006, pp. 123-147.
23 Schmalensee, Richard, Standard-Setting, Innovation Specialists and Competition
Policy, the Journal of Industrial Economics, Vol. 57(3), 2009, 526-552.

20131437

Yusuf Salman 14 - REVISED

competitive enough to allow entry and provide the consumer with a sufficient number of choices,
and monopolised enough to create a momentum that would allow innovation to constantly reach
a point of opportunity that seeks more competition.
The competition argument about innovation works the other way, too. The existence of
competition forces innovation and the existence of innovation forces counter-innovation for
others to compete. Having less competitive advantage creates a need to gain such advantage,
which in turn may result in an overall increase in innovation in the market. Competition may
increase the incremental profits from innovating, and thereby encourage R&D investments aimed
at escaping competition.24 In other words, the existence of patents held by Apple is not
actually a competitive problem for Samsung or Google, but an innovation opportunity to show
how they are better than Apple, just because they are different from Apple. Trying to escape
competition might also create a competitive environment for opportunities among different
stakeholders, where one invests in innovation to be in the competition, and another invests in
innovation to get away from it, locking both kinds of stakeholders in a constant race of
innovation. Samsung and Google are, at least currently, big market actors that have the resources
to create different solutions in this competition in a limited scope. On the other hand, maybe LG
or HTC would find it more difficult to compete with these top few. Further down the scale, it is
not easy to provide solutions for the small or mid-sized enterprise owner. On this stage, the
consumer can still utilise their options, and can be happy, but they can also be happy with
consuming Huawei products that are usually cheaper in price, and can do most of the things a
Samsung device can do. Arguably, this price different still does not guarantee that they will have
the same marginal utility by using a Huawei product with an Android operating system, as they
24 Aghion, Phillippe, et al., Competition and Innovation: An Inverted-U
Relationship, the Quarterly Journal of Economics, Vol. 120(2), 2005, 701-728.

20131437

Yusuf Salman 15 - REVISED

would have, if they used a Samsung product with the same specifications and operation system.
Additionally, trying to balance the marginal utilities of the consumer and the producer requires
optimisation, not maximisation of utilities. This optimisation approach ensures that the consumer
and the producer cannot be protected in the competition at the same time and on the same level,
which leaves the aim to focus on creating a fairly competitive market of opportunities, rather than
utilities, and estimate the optimal balance of utilities, rather than optimal utilities for each party
on an individual level.
4. A Monopoly of Standards
Standardisation of approaches for intellectual property rights might benefit competition in the
ICT markets. Different implementations of these monopolising rights bring new restricting
mechanisms into otherwise more competitive markets, and lock the different groups of users into
different ecosystems. For example, Apple and Microsoft holding on to different digital rights
management (DRM) encryption methods usually prevents the user from utilising the same
content that is locked in one platform in another platform. Simple commercial decisions like
distributing a music album via a BitTorrent Bundle 25 also locks at least some users out of fully
utilising the content they paid for. Any kind of standardisation here, even restrictions within the
ecosystems, prevents the content from becoming the users property. For example, the user who
buys content via iTunes has the right to use the product without altering it (usus), but they do not
have the right to derive profit over it (fructus). Moreover, the user also does not have the full right
to abuse the product, or transfer their rights over it to someone else or alter it in ways not
intended by the producer (abusus). A standardisation approach that would bring restrictions on
25 Thom Yorke released his recent album Tomorrows Modern Boxes as a Torrent
Bundle. A Torrent Bundle utilises peer to peer (p2p) sharing applications and
allows the content creator to sell his/her own work. http://pitchfork.com/news/56876thom-yorke-announces-new-album-tomorrows-modern-boxes/

20131437

Yusuf Salman 16 - REVISED

producers rights to restrict the users right on the product, would in turn obstruct the voluntary
choice of a consumer who might choose to be restricted in exchange of additional functionality.
This whole issue prevents any user from actually and completely owning content, by not letting
the user surrender their data or partially share their rights on the data with the producer,
therefore not having the complete voluntary option to abuse the product. Here the intellectual
property rights enable the rights-holder to decide on how the property itself is going to be used by
the others, especially those who paid for usage. 26 By this function of these monopolising rights,
the content, or the goods and services in general with ICT natures are already owned by some
persons or organisations. In the iTunes example, there are people or organisations that have the
full control over the purchased songs. They can profit over them, they can alter them in ways they
did not previously intend. So, purchasing songs on such platforms might not pose a significant
example of owning songs as pieces of property, but it provides ways to understand how
property-like such goods and services are. Considering usus, fructus, and abusus, such goods and
services might be considered not property at all. However, from a general perspective, those can
also be considered as partly-property. The user does not own the product, but they own the rights
to for this example- listen to the product, and they actually bought those rights within the
market. A standardisation that aims to achieve price equilibrium, or distribute rights over content
in a competitive market, therefore eliminating monopoly or oligopoly in a larger sense, would
also be an infringement of the producers rights on the content or the good and services.
Standardization also brings other problems. Setting a basis of standards in intellectual property
rights and forcing every agent to comply with those is problematic. Now, different platforms
using different DRM protections lock people into different ecosystems, just like selling books
26 Gimbel, Mark, Some Thoughts on the Implications of Trusted Systems for
Intellectual Property Law, Stanford Law Review, Vol. 50(5), 1998, pp. 1671-1687.

20131437

Yusuf Salman 17 - REVISED

from different publishers in different sets of stores. If a regulator decides to enforce the same
method of approach for every situation, for example, like the privacy by design approach, this
also locks people and firms into something: a monopoly of methods. Any person or organisation
that creates content would be locked out of such a market if condoning to technical
standardisations is not profitable. Forcing any monopoly or oligopoly in this matter to settle for
standardisation is forcing the smaller-scaled organisations more. Larger establishments often tend
to be more prepared for the potential changes in the market, and they often have the necessary
resources to compensate for such changes. Standardisation for the sake of weakening the
monopoly would only make the market harder to enter, therefore strengthening the existing
monopolistic or oligopolistic structures.
On the other hand, the issue of cross-media ownership is also a concern in this context. Many
countries have legislation against owning different kinds of media platforms to some extent.
These measures are usually designed to increase competition and challenge conglomeration. On a
producer vs. consumer basis, this again is a two-sided issue. Monopolisation of the market is by
default considered as a difficulty in entering the market; however, this also has another side. In a
monopolised market, monopoly rent is created. The actors on the monopolised side are not the
price takers anymore, as they can fix prices on a level that is more than a perfectly competitive
price and actually set the prices themselves. This monopolistic advantage usually makes the
market harder to enter, as the price setters are usually the ones dominating the market, but in a
more competitive market, when compared to a perfect monopoly, the monopoly rent makes the
market more attractive to new entries. A first actor earning monopoly rent over the competitive

20131437

Yusuf Salman 18 - REVISED

price will encourage a second actor who desires to have a slice of that rent. 27 Conglomeration
may also provide the content creator with additional power over content. People or companies
holding intellectual property rights over a particular piece of content would not be able to use it in
a different medium in any way they choose by themselves anyway. The creator(s) of Batman
would not find it easy to cope up with the general market, and most of their actions about creating
anything outside the comic book ecosystem would have legal consequences, as they have
already agreed to transfer some of their rights to the publisher. Conglomeration may be profitable
for the content creator, and this profitability actually would make the market worth entering.
However, not everyone can have a multi-million-dollar idea.
This whole approach is connected to the conditions of exemption in competition law. Most
approaches to the concept of competition suggest that competition for the sake of competition
itself should not be the aim.28 As the emphasis on competition is defined firstly as the protection
of the interests of the parties, competition as a blanket requirement may be undermined in certain
cases, to pursue the interests of an agent. Turkish Competition Law allows exemption from
competition for the following reasons:
a) New improvements and developments in the services related to the production or the
distribution of goods, or, achieving economic or technical innovation,
b) Interest of the consumer,
c) Such an exemption does not remove competition from a substantial portion of the
market of concern

27 Ferguson, James M., Daily Newspaper Advertising Rates, Local Media CrossOwnership, Newspaper Chains, and Media Competition, Journal of Law and
Economics, Vol. 26(3), 1983, pp. 635-654.
28 Seville, Catherine, EC Competition Law. Dominant Position and Exemption, the
Cambridge Law Journal, Vol. 51(2), 1992, 206-208.

20131437

Yusuf Salman 19 - REVISED

d) Competition is not limited to an extent that exceeds the amount required to achieve the
aims in items (a) and (b).
With the addition in 2005, such exemptions from the competition law may be subject to
consideration of specific conditions or time limits.29
As long as the overall competition is achieved in the market, and the rights or interests of the
consumer are pursued, there is no legal problem with a limited amount of competition in a certain
market. Besides, such exemptions are also subject to some conditions.
Not every entrepreneur or content creator has the option to be backed by a conglomerate
featuring, for example, a design company for licensing out official t-shirts and toys, a movie
production company shooting movies, a publication agency publishing magazines and comic
books. Additionally, not everyone has the option to follow a vertical integration on every stage of
production due to budget concerns. Like consumers, producers are also limited by their budget
constraints. In this sense, in the long run, every actor in the market would have the same
possibility and opportunities to become a conglomerate, and take part in different particular
markets of their choice at the same time, that is, of course, if they desire so. In a perfectly
competitive set of markets, conglomeration would not be a problem, as the conglomerates in
particular, single markets would be in the same position as anyone else. In many examples,
conglomerates usually speed up the industrial development. 30 The monopolisation problem here
is a problem about monopolisation itself, not particularly and necessarily conglomeration. Here, it
just happens to be that conglomerates tend to be richer, and have larger resources to monopolise
29 Art. 5, Turkish Competition Law, Law No. 4054.
30 Peng, Mike W., Lee, Seung-Hyun, and Wang, Denis Y. L., What Determines the
Scope of the Firm over Time? A Focus on Institutional Relatedness, the Academy of
Management Review, Vol. 30(3), 2005, pp. 622-633.

20131437

Yusuf Salman 20 - REVISED

the markets; but do the consumers really care? On the other hand, problems occur when larger
establishments or conglomerates in this case abuse their dominant positions in the markets. In the
case of Turkey, Trk Telekom, which also owns different companies in markets like mobile
communications, call centre outsourcing and internet services, is the sole provider of landline
telephone infrastructures. This gives Trk Telekom an unfair advantage and virtually unlimited
power to decide on the price of goods and services they provide. The European Community
policy about dominant positions regarding such issues is based on the Treaty of Rome which
states such establishments must not be allowed to take one or more dominant positions in the
Common Market or a substantial part of it. 31 In any case, according to the Treaty of Rome, it is
not the existence of a dominant position that creates problems and that should be prohibited, but
the abuse of such a dominant position.32 In comparison to the example of the Turkish Competition
Law, mergers, acquisitions or price manipulations by abusing a dominant position is not in the
best interest of the public or the market. Such behaviour undermines a substantial proportion of
competition in a certain market or sometimes in the economy as a whole, and should be opposed
in both price and opportunity approaches in competition.
With the existing to some extent monopolised market structures, the consumer only seeks to
raise their utility. Having different versions of things a consumer likes or prefers in a widely
spread set of different markets benefits the consumer if the sole concern is the current, short-term,
not investigated utility here. On the other hand, in many cases, having similar opportunities in
the same preference category or association set might actually lead to a lower utility in the long
run, but the consumer is a person whose sole purpose is to increase their utility here and now, in
31 Art. 86, the Treaty of Rome.
32 George, Ken, Jacquemin, Alexis, Dominant Firms and Mergers, the Economic
Journal, Vol. 102(410), 1992, 148-157.

20131437

Yusuf Salman 21 - REVISED

line with their budget constraints. As far as they can get their utility from consuming intellectual
property, still not their property, and as long as they are a satisfied consumer, they will not be
bothered to care about how conglomeration or cross-media ownership damages the competition.
In any case, a Harry Potter novel fan will demand Harry Potter movies, t-shirts and toys, and will
get significant utility out of them. Regardless of long term consequences regarding their utility,
the consumer interested in intellectual content will find, as described about a form of utility in
things they like. The phrase things they like explains how the conglomerates get things done in
an exchange scenario, and appeal to current utility perceptions of the users. Conglomeration
provides the user with content similar to those they like in different forms.
The current industrial context of conglomeration and concentration significantly extends
film musics promotional reach and commercial functions. In addition to selling
soundtrack CDs, film music functions as a site for launching new artists, providing a
renewed platform for singles or leftover tracks, and, most importantly, organising
consumption patterns by positioning media products according to the imagined tastes,
preferences, and habits of idealized target demographics.33
However, the focus is on markets where the consumer is happy (or has utility) and nothing else
matters, or on attempts to optimise this happiness among a hypothetical set of both consumers
and producers? The meaning of competition under the scope of this article contains two assumed
rights: the right of the consumer to have as many choices as possible with the same opportunities
to choose, and the right of the producer to exist in a market regardless of its size and resources in
the first place, and have the opportunities to enter or leave any market, or operate in such markets
33 Tompkins, Joseph, Whats the Deal with Soundtrack Albums? Metal Music and
the Customized Aesthetics of Contemporary Horror, Cinema Journal, Vol. 49(1),
2009, pp. 65-81.

20131437

Yusuf Salman 22 - REVISED

as fairly proportionate to its financial resources and reach of different markets. Of course, its size
and resources will affect how it will survive in competition, but what is discussed here is that the
big firm, and the small firm should have the same opportunities and possibilities in entering into
and surviving with the markets to ensure producer satisfaction, competition and consumer
interest. Aiming to optimise a general set of markets in consumers and producers interests at the
same time, it would not be wise to treat the set of consumers as a flock of wild animals in a cruel
natural environment that will kill them no matter how they behave in their nature. What
producers do or experience also matters, and it especially affects the utility of the consumer in the
long run. Commercial decisions made by both the consumers and the producers matter in a larger
perspective.
5. Conclusion
Most measures within intellectual property law, legislative discussions and commercial policy
that are aimed at increasing competition in the markets of goods and services might actually fight
against competition in the markets of opportunities for both the consumers and the producers.
Trying to explain the difference between these two types of competitive markets would be
meaningful if one takes the user of ICT technologies and platforms as a consumer. Within the
scope of this article, the question is not whether intellectual property rights ultimately create
irreversible monopolisation of different markets or not, but it is can we utilise monopolisation
in different markets of goods and services in favour of the competition in different markets of
opportunities? The term opportunity in question is one of entering a market under different
conditions, but the same set of principles that are proportional to the size and power of the entity.
The competitive market model still remains a utopia that is used to understand the market

20131437

Yusuf Salman 23 - REVISED

dynamics in real life; however, truly competitive markets of opportunities may actually be
achieved through non-competitive real-life examples of the markets of goods and services.