I don't think the author really made any case for allowing "segmentation" as he so coyly puts it, to continue.
Let's face it: those of us who are in the distribution channel (and that means the distribution channel for absolutely anything, not just tech goods) are in a bit of a bind when we start to discuss grey or parallel imports. For we're absolutely outraged at the idea that anyone might try to bring in cheaper versions from other …
I don't think the author really made any case for allowing "segmentation" as he so coyly puts it, to continue.
An example: you have three readers, Tom, Dick and Harry. They all love to read. Tom is a big fan of Stephen King and would pay 30 euros for a Stephen King book. He also wants to read his newest book the second it is out of the press; every day after that is causing him anxiety.
Dick likes a good horror book, and Stephen King is a good horror writer. So Dick would pay up to 20 Euros for a Stephen King book.
Harry likes to read, but he can only afford a novel if it costs 10 euros or less. There are lots of Stephen King books he hasn't read yet, so he doesn't have to pick the newest.
If Stephen King's publisher does not segment, they could make the price 30 euro. They'd sell a copy to Tom and get 30 euro revenue. Or make it 10 euros, then they'll sell 3 copies á 10 euros, also 30 euros revenue. At 20 euros, they'd sell 2 copies, and have 40 euros revenue. So they sell it for 20. Tom is happy. Dick has a good book and is happy too. Harry buys no book.
With segmentation, the publisher makes a hardcover edition for 30 euro and a year later, they publish a paperback for 10 euro. At the beginning, Tom buys the hardcover and is happy. A year later, Dick and Harry both buy the paperback for 10 Euros.
Harry is definitely better off with segmentation, because now he gets to read the book. Dick is also better off, because he pays less. Tom pays more than in the non-segmentation case, but is still very happy, because he loves Stephen King. Besides, in a more realistic example, the price of the paperback is not set at the reservation price of the biggest fan, meaning that Tom gets 100 Euro worth of pleasure of his paperback and not 30, so he has good value for his money too. Besides, in a typical market, there are a lot more consumers like Dick than superfans like Tom, so collectively, the segmentation case is better for the consumers.
Of course, it is better for the company too, because it makes a bigger profit. But actually, if classic economic theory holds, it is a win-win situation for seller and customer.
You just knew there was going to be a 'but'!
In (many of) these cases, precisely the same product is being sold for different prices in different markets (countries). So in your example, Tom, Dick and Harry might represent different countries with the same book being sold for 30 euros in some and 10 euros in others. This may well still provide greater revenue for the publisher than selling at a uniform price, but it relies on imperfect markets - that Tom is not aware that the book he is thinking of buying for 30 euros is available for 10 euros somewhere else in the world.
The problem arises when a distributor attempts to buy books in one country for 10 euros and sell them at 20 euros. The publisher will undoubtedly not like this and may try to bring pressure to bear, perhaps by threatening to change to a different distributor. This is where local laws may come into play and restraint of trade issues may apply.
Your summary of the article is quite good, and I agree with it. We need laws to stop the bad guys who game the system.
My comment (complete with the pedant's hat) was meant for the people who read the article and understood it, but objected on the ground that the (segmented) system is inherently bad for "us customers", as opposed to "them corporate". So I pointed out why this is not the case, using a relatively simple example.
Another example why (pure, as opposed to meddled-with-by-grey-imports) segmentation is not unfair for "us customers" is that when we divide the market in "us customers" and "them corporate", "us customers" includes not only the US student who pays 3% of dad's salary for a $50 textbook, but also the Indian student who pays 30% of dad's salary for a $10 Indian version of the same textbook.
If you look at it that way, it is not the Americans who should be complaining about the system being skewed against them, it is the Indians. If we want to make it really fair, we should create a system where the price paid by people commenting in this thread (including myself :( ) is higher, and the price in the third world lower.
And this is not counting the fact that the Indian dad's salary was probably paid for a job requiring 12-hours-a-day contact with cancerogenous chemicals while producing - or burning thrown away - entertainment electronics used by the US student's family.
But this line of argument is a bit harder to use when arguing with the first world people complaining that they are paying too much because of segmentation. I picked a segmentation example based on time+packaging difference as opposed to a geographical difference, so they can freely choose to belong to the low segment (=paperback buyer).
I am aware that the people complaining will probably demand that we use a law to forbid segmentation and force "them corporate" to sell the textbook for $10 to both American and Indian students. Downside: this solution will probably result in the publisher declaring bankruptcy, with less textbooks on the market and more unemployed in the USA. Think of it - if even our term-myopic rating-craving politicians don't use such a simple measure which sounds so good on paper, there must be some reason for it. Like thousands of voters losing employment before the term is up.
There are lots of things which are wrong with today's markets, but producers practising segmentation isn't one of them.
Let's say it is profitable to sell a US produced product in India for $10. More than $40 of the $50 US price must be profit. Given such a huge profit margin competition should be expected to drive the price down to something more like the Indian price. After all, if market economies are efficient, it is precisely because they make it hard to make a profit. Only collusion between suppliers could maintain artificially high prices.
I can't agree with your two example.
In your first example, Tom, Dick and Harry are effectively buying 3 different products. As an "early adopter", Tom is paying a premium to get the product on release day. Dick is paying standard price and the publisher still makes a profit. Harry may be rewarded for his patience with a discount, but only if the publisher wants to shift old stock at a loss to make for new, premium priced stock that Tom will buy. The segmentation is timing, which consumers can easily control, rather than location, which they can't.
Your second example is more compelling, but still misses the fundamental hypocrisy of "them corporates" that demand the right to impose trade barriers when selling their products, while simultaneously decrying any attempt to impose barriers/tariffs/restrictions on their ability to shop around globally for the cheapest materials/labour. Does the Indian student's father get paid more for the products he makes for the western markets or does the premium go straight to the western shareholders? Does the American student's father get made redundant because he can't compete with his Indian competitors, thanks to the "western premium" on his cost of living?
"Let's say it is profitable to sell a US produced product in India for $10. More than $40 of the $50 US price must be profit."
That doesn't follow at all. Your forgetting the initial cost and the marginal cost of manufacturing a product, books in this example. Let's say a publisher has to sell $200,000 in copies to recoup the publishing costs of a textbook, and there are 5000 people in the West who'd pay $50 a copy, and a company in India that can produce a cheap paperback edition and sell 2000 copies there at $10 and still make a slight profit. That certainly doesn't mean the publisher could sell it for $10 in the USA. They might sell 10,000 copies at that price, and instead of a small profit be looking at a $100,000 loss.
We are constantly bombarded with the message that globalisation is good for the economy, and by extension, good for us. This article highlights the hypocrisy of that assertion. Apple and others are quite happy to do their manufacturing in the cheapest location they can find and they kick up a huge stink if any government suggests imposing tariffs on their imports. But try to emulate them by sourcing products outside their regional pricing structure and they send in the lawyers.
Globalisation is there for the big players, not the little guy.
I think that a manufacturer being able to restrict where and how their products are sold is entirely fair. You're saying it's a way to charge more to the gullible. That may be true, but the flipside of that is whether manufacturers should be allowed to sell goods for less to those who can't afford the full price? For example, student licenses for Photoshop, or home packs of MS Office. Manufacturers can only afford to do that if they can put restrictions in place to ensure it's not going to undercut their regular full price sales.
Supposing I decide to sell my product at cost price to charities, or in developing countries, because I want to support them. Why should you be able to buy up a load of stock and sell it on at full price at exhorbitant profit?
That is a different product sku. It's not charging more for the same product in a different place. Or only selling a product in one place.
And a lot of grey market is because something is not available at all. There is lots of stuff on sale in the US that you can't buy in Canada (for example Sansung Canada don't sell laptops/netbooks) so if you want one you have to get one from the US.
The media companies are a big pain for consumers too, look at iTunes. The US and UK sites have loads of stuff (that they will not sell me) that are not available on the iTunes Canada site.
Supposing I'm an ethical manufacturer and decide I don't want to sell my product to the military, or to countries with a poor human rights record. Surely I have the right to decide whether or not I'm willing to supply my product in a particular country or not?
"Supposing I decide to sell my product at cost price to charities, or in developing countries..."
"Supposing I'm an ethical manufacturer and decide I don't want to sell my product to the military..."
You're using edge cases to justify mainstream market abuses. There is nothing ethical about selling your product at cost price to charities and developing countries if your long term plan is to undermine the competition and lock in your customers so you can gouge them once you have a monopoly. There's nothing ethical about manufacturing your products in countries with poor human rights records because you can pay the workforce a pittance and increase your margins.
Is it ethical to allow Megabucks Corp. to use £1=$1 when choosing the price point for their UK product range? Do you feel the US is a third-world country? Surely consumers have the right to buy goods at the lowest price they can find?
They're not edge cases at all, they're real examples. In the past I've donated both my software and my time for free to charities that I wanted to support and where I knew they had little or no budget. If I hadn't given them my software, they wouldn't have bought it somewhere else, they'd have muddled as they had before with a cumbersome manual process and just been much less efficient. There are plenty of other big charities run virtually as commercial concerns, and they can afford to pay the full commercial rate, thank you very much.
It's not a case of wanting to undermine the competion, any more than if I mow my mum's lawn for her it's because I'm trying to bankrupt the local gardening firms.
That the problem with a system that doesn't insist you charge the cost of producing the product/service plus a reasonable incentive for you on top. When it is deemed ok to screw as much as you can out of anyone in order to attract more of society's wealth to you than you could justify being worth. Still I don't see society improving it's ethics anytime soon. Too many with too much to lose.
It's really indefesible and the author's lack of credible arguments reflect that.
In fact, if everyone was doing their job properly segmentation would have been eliminated de facto. Alas it didn't.
And what's with that feeble argument on playstations?
Bring them in at a 15% discount and there will be no end of shops and people willing to get them off your hands even if you called [insert silly name HERE].
At a first cut you might have a point. However, let me continue your example a little further.
Let's suppose a large software producer donates (or sells at a cheap price) software to a charity. Great, so far no problem.
However let's suppose that charity starts issuing press releases saying "lucky us we have a great relationship with this software company, look they've done us a deal, good old software company"
Now, the software company is getting paid in reflected goodwill - how much is worth to them?
And did the people that choose to support that charity want that goodwill to be consumed in that way?
And what is the real cost to the charity?
Then of course there's the client group: apparently, it turns out there's something they get that only works with that software company's product. And it is costing them money time and inconvenience. So what are the real and other costs there?
Then there's the competitive disadvantage experienced by other software companies. What's the cost to society there?
You might well think I'm using a real example - it doesn't matter whether that's true or not. It's the abstract point.
(Apparently) there's an Urdu expression "do your charity and throw it in the river" which I take to mean her, that said software company could have asked their products be treated as white label and sought no publicity - even used open standards, but that wouldn't have been sensible for a profit maximising entity.
Is that the same as JCB refurbishing a life at RFH and Southbank centre painting it yellow in thanks? Personally I don't think so, as JCB don't make lifts and it doesn't displace (ho-ho) other lift installations.
Well... whenever I've donated software (or my time) to charities I want to support I haven't made a big song and dance about it or tried to gain any publicity. But those sort of things are likely to be one offs and not my main point. What about educational or non-commercial use licenses? Clearly, if Adobe sells students Photoshop at a reduced rate it's because they have a vested interest in getting them to use their products moving forward, but it's also a recognition that there's no way they'd be able to afford the full product otherwise, and would likely be forced to use a pirated copy instead. Are you saying it's unreasonable to sell a student, or freelance graphic designer who's just starting out and trying to get his or her first commission, the product for a discount, while insisting that multinational advertising agencies pay full price? Who exactly would be the winners if you made it illegal for them to sell discounted student versions because it's discriminatory?
... you are deploying the crack cocaine argument.
If this hypothetical student has talent then functional skills in a particular product do not appear to be relevant.
OTOH if it's about the product then I prefer competition law to "nice restaurant you've got there" law
I think you'll find many of the manufacturers who are fighting grey imports already have a key defence in place - warranties. Think you'll find many of them do not have global cover, but rather regional. Net result is, if your shiny gadget breaks and it has the wrong serial number, then you'll be looking at expensive repairs or buying a replacement.
One big area where this is definitely the case is camera bodies. While Nikon and Canon give global warranties on lenses, on camera bodies plus compact cameras it's regional.
Sure, often warranties have limited geographical restrictions. But often you won't find out until after you've bought the product and opened the packaging.
The existance of grey imports just adds to the confusion/anxiety over whether you're buying a legit/fully warrantied widget, a genuine product but grey import with dubious warranty validity, or an entirely counterfeit product.
This can actually be counterproductive for sales, as I'm risk-averse and the only way to avoid the risk or being ripped off one way or another, is not to buy at all. Even after purchasing, any lingering doubts can sully the brand-image in my mind, and prevent me getting the "warm fuzzy" feeling the manufacturers' marketing department would like me to have after buying their product.
Premium headphones and aftermarket Li-Ion batteries for cameras/phones etc are a case in point.
The excessive prices for "genuine" parts (especially batteries) only serves to create a highly lucrative market in good-quality counterfeits. Fail.
The case you quote with cars is just about unique, it is also different in that you pay tax in your own location not where you buy the car.
A couple of Christmases ago the must have Christmas present in the UK was a Wii, so following normal Christmas practice, the supply in the UK was near zero till the week immediately before the big day. The news and TV carried stories about the problem and thus hyped up the demand and the marketing zeebs were as happy as Larry.
On the continent there was no shortage. Go to Amazon UK site, no Wii availability. Obviously the same marketing trick doesn't work in France or Germany, so you could have as many as you wanted ... till of course you got to the stage of entering a UK address. At which point they said you weren't allowed to buy them.
I tried to complain to the EU but they said that suppliers were perfectly entitled to sell products were they wanted and not sell them where they didn't want. I tried to point out that this was not the case and used the car example as a case. They just ignored it.
Free movement of goods and services? My a**e
Globalization is good for big companies and screw the little guy...
"suppliers were perfectly entitled to sell products were they wanted" [sic]
The law is indeed quite clear on this - you can sell to whomever you choose. It's important to think this through: Nintendo was free to choose who to sell Wiis to and how many to sell to them it was not able to say who Amazon could sell the Wiis to.
In the case of multinational companies it is also often the case that various national subsidiaries are requested not to compete with each other, which was the case for you. Yes, Amazon's policy may have as much been influenced by the terms it (or its subsidiaries) were able to negotiate with Nintendo as costs of redistribution and currency risk but that is not at issue. There was no restriction on grey market, ie. someone else selling Wiis cross-border*, whether directly or as an intermediary. Amazon may have decided that it could maximise profits by trading internally from say Amazon France to Amazon UK.
* One reason to think twice cross-border purchases is how to deal with returns and reclamations: buy a widget cheaply in Romania and try and get your money back if you're not happy. Here, the EU has worked very hard to facilitate mediation in such cases. And, with the introduction of the SEPA direct debit continues to try and offer individuals the same benefits of cross-border trading that accrue to large companies.
Yes you can sell for whatever you want to different sectors.
But if you want to sell your product across the EU at different prices - and you want the individual countries to ban somebody in the UK buying the cheaper one from Germany then you can't also complain if the German government decides to add a 100% tax to UK software.
If it's a level playing field for goods and services then you can't demand to pay the same tax and the same for raw materials and then not allow the consumers to do the same
I'm amazed that you thought you'd get any kind of sympathy on this site for this kind of wide-boy market screwing. "Market-segmentisation" or whatever American-speak you want to use basically means royally screwing some people over.
There was (and still is) a long tradition of forcing the UK to pay like-for-like pound for dollar rates using all sorts of bizarre excuses like "different standards" or "import costs". Bullsh*t. Since the Internet and more immediate global-awareness, these shameless practises are more blatant and indefensible than ever.
In a free-market economy and a global market, there is NO place for legal restrictions of movement of goods in order to artificially hype prices in one area over another. What is the moral difference between this and cartel price-fixing?
It is only because companies tacitly agree not to compete on price in specific markets that these price differentials exist. The result: markets are only global when multinationals collectively decide they are!
"The law is unclear precisely because it is trying to balance two incompatible desires: to have a single market and yet to allow producers to distinguish themselves in said market."
Your booze example actually demonstrates a third conflicting desire: that of local governments wanting to levy different amounts of tax, which give us "companies" like Indigo Starfish.
You lot in the media roll out the same predictable line about the X type.
"It's just a Mondeo LOLZ!!!!1111onethousandonehundredandeleven"
I'll bet a lot of you are Audi fanbois, yet would cover your ears when I point out that the B5 A4 is just an (Apple-style) overpriced Passat. Or that the A3 is a Golf for junior marketing execs.
The X type conversion wasn't even a simple rebody, the entire front suspension differed, and the chassis was re-engineered to accomodate AWD.
Within a large corporate empire, it makes sense to share development resources. If this means reusing code or sharing a (albeit very good, and I'm not a Ford fan) chassis platform. Every large manufacturer does it. Jaguar needed the X type to attempt to broaden Jaguar's appeal and to try and crack the 3 series stranglehold on the junior exec saloon market. It is the continuation of this that gives us the sublime XF.
I once met a very nice lady in a small European country who was a full-time employee of jeans manufacturer Levi Strauss. She told me that her job was to anonymously visit outlets in the country checking on the Levis they were selling. Ah, I said, you're looking for counterfeit Levis. Yes, she explained, but mostly she was looking for genuine Levis being sold at less than the contractual price.
Now, I've never worn Levis, as it strikes me as wasteful to buy a pair of pants and then cut a foot (30cm, kids) off of each leg to make them useful to me, but it still came as a revelation to me that the price of their products was so artificially high that they could afford full-time employees in small countries to police the grey market so.
I'm older now, and I think I understand global marketing a bit better, so I wish I hadn't turned her down when she wanted me to shag her.
It's sickening that companies can source stuff from all over the planet, taking advantage of materials, labour and tax regimes as they see fit, but when someone else notices a business opportunity in a similar vein, they get sued.
Just more proof that the western world is in thrall to big business.
There does seem to be a way around it though - set up a website in the foreign country, but aimed at the UK market. Surely that can't be illegal yet?
Grey / Parallel importing is expressly permitted in NZ, and certainly helps keep prices competitive. The biggest segment is electronics, with big savings in certain areas like mobile phones (often close to half price compared to the telco's off-plan price) and certain camera brands.
Importers have to provide warranty and meet all the other requirements of the sale of goods act.
Parallel imported Apple products however, don't seem to enjoy any significant savings.
50 states that not only speak the same language and share the same culture but have the same set of national laws. The result is grey importing is much less of an issue here. The only time you hear about it is for Japanese only stuff. I will take a big country with states over a bunch of little countries that pretend to be united any day of the week.
The grey market game has played out for years with governments of all colours looking after the big companies to the disadvantage of the consumer.
Globalisation is all about profit not consumer benefit.
The only answer is legislation that explicitly protects consumers but the chances of it happening are zero.
Whether it is the grey market, DVD and game region coding I have yet to see any government (or the EU) actually admit that their policies antithetic to free trade let alone do anything about it.
I could segment further, selling boiled sweets to Fred for 50p/lb and to Tristan for £2.50/lb.
It might be legal but Tristan finds out, he's going to be (rightly) upset and when he comes to see me with a baseball bat, "I thought you'd be happy to pay more" probably isn't going to fly.
Neither would my attempts to stop Fred from selling to Tristan for £1.75/lb.
If Tristan wanted his sweets boxed and wrapped with a ribbon then fine, charge him more, though charging for sugar in a cafe would probably annoy me enough to never come back and to tell everyone I meet to do the same.
The problem with segmentation based on geography, not the goods/services themselves, is that people simply don't agree with it. Laws passed in democracies which most people don't agree with? That sounds like the corporate corruption of democracy. It isn't good for democracy for its laws to be despised. Everyone hates tax, but pretty much everyone can see that it is required. Legal support for segmentation is not required. As far as trademarks go, if something is a playstation and sold as such by the manufacturer, I should be able to describe it as such if I sell it on.
Hi, the reason there are trademarks and copyrights is to protect the little company, who is a startup and invented a new product, from being copied by some big company and wiped out by them. I worked in the medical Holter field and my company had a 12 year period that no other company could make Holter monitors. Otherwise HP and Spacelabs would have gobbled them up. Which by the way is what happened later. Foxconn has no doubt has a exclusion contract to make iphone for Apple only. They are breaking Apple's agreement and no doubt will face them in court some day. Foxconn needs to clean their house. Other manufacturers like Cisco and IBM won't even let home office resellers market and sell their products because they fear we will sell to low against bigger companies that have more overhead. My company has sold millions for other manufacturers including NASA but they don't care. The cause of these problems, Greed, plain and simple. Every reseller would not sell to low to put them selfs out of business. Or too high and rip off their customers. 15-20% profit is fine for most companies without ripping people off and paying their expenses and having some profit to live on. I was told one manufacturer rep of motherboards is lucky to $3 per motherboard which is too low to stay in business. 15-20% is reasonable profit, any more is greed. Go by an HDMI cable in a retail store they are $40 but cost $10. Merchants rip off people on small items, but not as much on big ticket items.
>> Hi, the reason there are trademarks and copyrights is to protect the little company, who is a startup and invented a new product, from being copied by some big company and wiped out by them.
Which is absolutely nothing whatsoever to do with parallel importing. Parallel importing isn't about someone importing FAKE (ie copied without permission) goods, it's about them importing REAL goods made by the genuine manufacturer. This would be about your company selling Holter monitors to (say) UK buyers at twice the price you charge foreigners - and then getting pissed off when you find UK buyers are importing the 'cheaper version' you sold abroad. You made both, you just aren't getting away with ripping off one segment of customers.
This is where it all goes wrong. Taking Levi jeans. If Levi sell them to a wholesaler for (say) £10/pair, then they clearly accept that £10/pair is a fair price to sell them for. I fail to see any valid argument for them then preventing that wholesaler for selling them to anyone else, anywhere else, for £11/pair. So what if it means they can't sell them to European wholesalers for £20/pair ? We've already accepted that the manufacturer considers £10/pair to be a fair price to sell them for - so charging some buyers £20 is just being greedy, but that is what business is about.
And as for having employees checking on retailers selling below the official price - well I thought retail price maintenance was explicitly illegal in the EU except for certain market segments ?
"That sort of parallel or grey importing ought to be entirely legal over here: it's one of the cornerstones of the entire European Union project that there must be free movement of goods. There are a couple of restrictions (medical devices and drugs are still nationally approved in large part) but other than those very specific areas, anything that it is legal to sell in the EU can be sold anywhere in the EU."
You are right, it IS the cornerstone of EU trade, it is called the Treaty of Rome.
back in 1981, we imported the original IBM PC, we were a raging success for a new company in a new market with just two or three importers and just two PC apps (Visicalc and Easywriter). We were two years ahead of IBM and they tolerated us until 1983 when they planned to launch in the UK.
In came the IBM manager (one Nigel Henzell Thomas) who made all kinds of threats of legal action, our company secretary was a lawyer and dismissed his threat quoting the treaty of Rome. IBM backed off, then they came back offering us a dealership, we took this up for our end user business but continued to grey import for our distrubution business. IBM went after them (not realising it was the same company) and we saw them off too.
Over the next few years things got very interesting, for example we would import the base IBM PC but add our own componets, in the early days this just meant our own memory and floppy drives, then our own hard disks (again before the XT was released).
Pretty soon we sold these components to other IBM authorised dealers, IBM responded by excluding our components from their warranty, but they found it difficult to police as we were able to source their own components in the US through our agreements with IBM and others in the US.
IBM spent many years trying to control it's channel, I seem to remember it ran into trouble when there were imports from South Africa because we could buy UK manufactured (Greenock) IBM PC's there for up to 70% less. This was tricky because we had to still maintain our IBM quotas and as long as we did that IBM did not seem to mind. Of course when our accounts were published they got p'd off because they measured their share of our turnover from the quota, we had to pretend that we had some big contracts for Compaq, Sirius/Victor etc.
As I understand it a manufacturer can control you if you have a legal agreement with them, so they typically control their channel by tracing back serial numbers and threatening the company they have a contract with.
This should be against the law, basic economics is that an unrestricted market is good for business, so if we don't want governments doing it why should we tolerate corporations?
For me, these days the worse offenders are Adobe who sell the very same downloadable version of their software for a huge markup. Companies like Adobe and Microsoft quote all kinds of Bullsh about localisation, but the truth is they are plain greedy. They deserve some bright individual screwing up their market.
As for cars, on the surface the EU says go buy your car wherever, but just try insuring a car manufactured in the US for the Japanese market, you pay eye watering premiums. It does not matter where the car is manufactured the insurance company screws you if it is being driven in a different country to where it was first registered.
The EU is as "bent" and vulnerable to lobbying as the US, they spend a fortune interfering in markets rather than encouraging free trade and the worst thing is we pay for them.
A trademark has absolutely NOTHING to do with selling grey kit and the EU needs to clarify this so that there is free movement of goods. Not only is it unfair but it screws up trade, competition depends on the free flow of goods worldwide. If someone wants to buy a Dell PC in the US with a US keyboard, no problem. If I buy Adobe for half price in the US, all the EU should be concerned with is my payment of VAT and any import duty. Currently we have US companies, charging UK customers for VAT for software bought from US offices on US based servers because they detected an IP address. This is all the EU cares about, the gravy.
If Apple wants to supply the UK with a product with two free apps included to differentiate their UK product, that is fine, but it should NOT be able to block the sale of its grey imported product.
Apple is one of the WORST companies for screwing consumers, from forcing users to use Itunes to disabling Bluetooth and Wifi in the Ipod Touch, invalidating the warranty for an effective software install (unlocking), I hate them. The sooner the EU takes a strong look at Apple the better.
The irony is that Apple would have gone bust if Microsoft did not make a donation to appease the EU.
The more I think about it, the more I think we should abandon the EU.