The 1st step to create true e-competition is to recognise the existence of e-monopoly as it’s not always as obvious as traditional monopoly.
MySpace is not actually a competition to Facebook despite we group them as “online social network” for convinces. If they were, you should be able to substitute one with another without losing the core benefits. In other words, you should be able to migrate your social network to another service provider if you choose to leave Facebook or Facebook close your account. Currently, this option is blocked by Facebook.
For example, getting your qualification is a core benefit of going to college, that’s not what you should lose when you leave one college to join another in a educational industrial with competition. You may have new campus, new teaching staff or new way of learning, but not losing the qualification you developed and finally achieved from your previous college.
Imaging applying the Facebook-MySpace model for competition in the educational industry. You still have more than one university, they may all offer degrees, except, they are different degrees in different universities. When you leave the Melbourne University and go to the Sydney University, people in Sydney tell you that your qualification in Marine Biology is different from your Marine Biology degree. So you have these “choices”,
- Forget about your previous study and develop your study on Marine Biology in Sydney from scratch to get your degree in Sydney’s style
- Stay in Melburne University
- Study something else from scratch
Do you still think there is competition in the educational industry?
If you think this is ridiculous, wait until you see this.
Luckily, Sydney people is super nice (Yes, we are 
. So you were told that, we are so nice that we are going to recognise your previous study and your degree in Marine Biology. But just before you kick off your celebration party, you get a message from your old uni saying that your degree is not an open one, they are going keep (retrieve) it for you. So after all, you don’t have a degree unless you stay in Melbourne.
Well, there are still more than one institutions under the umbrella of “university”, they all offer education and degree, but how’s competition going? do you think it truly exits?
Definitely not from a consumer choice point of view. It’s a new form of monopoly with multiple leads, which is why it’s harder to spot compared to traditional single-lead monopoly. The multi-lead characteristics create an illusion that there is competition even though there are clearly no viable options for consumers to choose without losing core benefits.
Although in theory multi-lead monopoly can happen in both the real world and the online world, it does tend to happen in the online world much more often than in the real world. Part of the reason can be the ease of the control in online business. A close source software is difficulty to copy, but there are little secret you can keep when you run a shop in the real world.
The current law also lags behind the development of the online business environment. It tends to protect multi-lead monopoly. There is no law to protect competition by requiring software based services to ensure customers can take the core benefits with them when they choose to leave the service.
Multi-lead monopoly was once seen in the telecommunication industry in Australia. Many people may still remember the traumatic experience of being trapped in the dilemma of having to choose tween staying with a service that didn’t suit them or spend days, months or even years to rebuild their personal contacts. You change service provider, you have to change your phone number, a core benefit of a telephone service.
Fortunately, the multi-lead monopoly environment in Australia’s telecommunication industry has changed for good. Consumers no longer have to tight their phone numbers with a company just because you started with it.
Another obstacle on the road to true competition in the online space is the perception that free services like Facebook and MySpace can bypass some well established principles. The “lures and traps” tactics are regarded as unfair business dealing, which are made illegal in most part of the developed world. This applies to both paid and free services. If a company give you free drink with the purpose of developing addition, it’s a unfair dealing regardless the drinks were free.
Further more, Facebook and MySpace rely on users’ participation to increase their popularity to secure sponsorship and advertising revenue. It’s clearly an exchange of benefits, not a charity service.
So what can be done to facilitate true e-competition.
Porting - Social network sites has the responsibility to ensure that users’ social connections are not detained or have to be rebuilt just because their choose to leave one service. Just like when you change to a new mobile phone company, you should be able to keep the same phone number and your phone book is not detained by the old phone company, so you connections with friends and family is not interrupted.
The connections you develop with your friends and associates belong to you. When a user’s association with Facebook discontinues, regardless if the user chooses to leave the service or Facebook decided to close the account, Facebook has the responsibility to ensure he/she can migrate his/her social network to another service without interruption.
Refer to the previous chapter “e-Monopoly” to find out more solutions to ensure e-competition.
It’s about time that choices are given back to the consumers.
It’s about time to have a consumer choice based definition of “competition” to incorporate the arrival of e-competition.
