Perfect markets need perfect information and rational players. This doesn't happen in the real world. People buy shiny bloated things and complain later. And then buy the next shiny bloated thing.

Also, in technology, product features move forward much faster than there's time to markets to 'find equilibrium'. So, I guess when smartphones stop advancing in features, people will find more value in those phones that don't have bloatware.

The choice is often between a dull, bloating thing, and a shiny bloated thing, sadly.

People seem to think that the free market will automagically drive towards their arbitrary measure of goodness because, in theory, if consumers share that arbitrary measure of goodness they won't buy something that doesn't offer that. But in reality, there is only one truism in free-markets, businesses need to make money and that sometimes runs contrary to whatever issue I personally think the market should optimize for.

This is a straw-man; while some may believe all consumers have and require perfect information, not all free-marketers do.

If there are many under-informed consumers, these will often select pseudo-randomly, and the few well-informed consumers will select well. The small number of well-informed consumers will often make the difference between a profitable product and an unprofitable product (especially in highly competitive markets).

In many cases, ill-informed consumers will pay for information about products which are significant to them; this is why "Consumer Reports" sells new and used car buying guides, as well as why video game reviews exist, and why Amazon.com has reviews.

In cases where purchases are less costly to the consumers, or a repeat purchase is involved, people will often correct based on personal experience and brand reputation, which is imperfect, but relatively effective.

You're overlooking the huge factor that is marketing, which effectively injects misinformation into the market...

Your assumption that a few well-informed consumers can make the difference between an unprofitable product and a profitable one is only true if sellers cannot significantly increase their profit margins by offering an inferior, but hard to distinguish, product at the same price.

Were you responding to my post? It seems non-sequitur. Since you seem lost on this point, how about I provide a notional example?

Suppose you have a very strong personal belief, it doesn't matter what it is, but let's say for purpose of argument that your belief is that no car should be sold without Rattan Cooling Seat Covers. You point to all kinds of studies about how it improves circulation and prevents hemorrhoids and is more comfortable and all that. Because it's a health issue you take it up as a moral obligation that these be sold with every car. One car manufacture even goes so far as to sell some of their models with this cover and you point to this one as an example of what should be done.

This is your "arbitrary measure of goodness".

If you were also a free marketer you'd argue "there shouldn't be a regulation to force car manufacturers to put Rattan Cooling Seat Covers, the market should drive towards it". But what the free market knows, even with imperfect information, is that putting $100 of Rattan Cooling seat covers in every car doesn't make them money. In fact, the one maker that puts them in their cars are only marginally popular so it doesn't seem to be driving sales and if every car maker put them in, it wouldn't be a market differentiator anymore anyway! The market knows, even imperfectly, that there is no demand for such a thing in their products, and the after market serves the small percentage that really want it.

But you argue, "this is a moral imperative! Circulation!" You post on message boards about the benefits of Rattan Cooling seat covers, you raise money and take out advertisements, you do everything to build market demand short of going to your local congressperson/parliamentarian because you don't believe this should be regulated and the market will simply correct for your arbitrary measure of goodness...even if the market isn't interested.

Suppose you're successful, now every car is $250 more expensive (you can't possibly believe they'd throw in $100 of Rattan Cooling seat covers, available at any after market stores, at cost do you?). Congratulations, arbitrary measure of goodness is met, cars are more expensive. But as a result fewer cars are purchased. Do car makers make more money? Does the free market win? After all, they're making $150 on each set of seat covers! They should be! You're a hero, asses are saved and car makers make more money, win-win!

But we don't actually know the outcome. Cars are more expensive, fewer people buy them as a result. Or the used market grows as people can buy cars without Rattan Cooling seat covers without the extra "ass-tax" as it's come to be called on internet car enthusiast forums. It could turn out to be a wash, who knows? The market has imperfect information and can't predict the outcome.

But it's more likely that you'll fail because the market, because of imperfect information, isn't interested because there's no guarantee that they'll make more money selling cars with the seat covers, and lots of potential they'll lose money doing so. One company interprets this imperfect information as still sells their cars with the seat covers, but the rest interpret it more conservatively and seek other money making opportunities instead.

Just because it was your arbitrary measure of goodness, doesn't mean the market will follow it.

Just like in this case, just because a bunch of nerds on tech forums don't like carrier crapware installed on phones, doesn't mean the market has any reason to correct for it. Even in the presence of a competitor that doesn't install the software on their phones, the market still chooses the crapware infested phone at rates exceeding the alternative. The market has actually already chosen crapware infested phones at something like 88% of the global smartphone market. And companies, using this signalling, and the bigger signalling of the revenue that comes with allowing carriers to install garbage on their phones, have listened to this imperfect information and sell phones with this "feature". The market optimizes to make money, not solve our arbitrary measures of goodness.

The alternative is for us tech forum nerds to try and raise awareness about why this is vaguely bad for consumers (it's usually mildly annoying at worst to the vast vast majority of consumers and likely has almost no measurably impact on their purchasing decision), and convince the market to drive towards phones that don't have this problem. But it's an uphill battle.

The result of this legislation has three possible outcomes.

1) Phones will cost more. The revenue that went to Samsung for whoring out their phones to various carriers will simply be passed along to consumers.

2) Phones will be made more cheaply so prices can remain at parity. Features will be dropped, or upgrades won't happen till technology advances a bit more and BOMs can fit within some profitability model.

3) Phone makers will feel a great wave of sympathy for their consumers and the small minority who has an arbitrary measure of goodness for "don't install garbage on my phone I can't remove" and continue on as-is, eating into their margins and making less money.

I can tell you that I'm not betting on #3.

I agree with your thinking, though I think we'd still have bloatware on phones even if there were more competition among wireless carriers.

PC market is quite competitive, yet most computers come with bloatware. The difference is, they can be uninstalled, but I suspect that may be due to OEM licensing agreement with Microsoft, than the competition among PC makers.

But at least with PCs, some of the revenue gained from bloatware is passed onto customers by the way of lower pricing.

In the end, this regulation is beneficial as long as the wireless market is competitive, so the carriers simply don't pass off the cost back onto the consumers. In that sense, I share with some other poster's sentiment that government regulations should focus on ensuring competitive landscape first.

The main difference it that I can install a fresh copy of Windows or Linux on my PC and it works, while there is no such thing as "stock Android". It depends on the hardware, so the OEM have all the power.

I got a Nexus S loaded down with crapware I couldn't even use (since it was all in Chinese), but which drained the battery like you wouldn't believe.

Within a couple days, I had removed whatever godawful contrivance was on there when I bought it in favor of CyanogenMod. Truly, the OEM (NB: the OEM here didn't even install the crapware) has all the power.

CyanogenMod is the equivalent of installing a fresh copy.

at the cost of your warranty

What do the Nexus lines of phones come with?

The "Google Experience" version of Android

I think that if the market was fully competetive, everyone was fully informed and both customers and companies made optimal decisions, then most phone wouldn't have bloatware. Otherwise, it would mean that phones with bloatware are actually better than (perhaps slightly more expensive) clean phones. But I just don't think this is the case, bloatware simple doesn't have much real value.

Even in extremely competitive market, there's room for bloatware if many customers don't mind it in exchange for lower pricing. However, what a competitive market WILL ensure is discovery of an 'acceptable level & implementation' of bloatware that 'some' customers will tolerate given the choice of lower pricing vs no bloatware.

Think two versions of Amazon Kindle with and without ads. There's market for both. The problem with carriers is that their monopolistic positions enable them to engage in abusive practices. (like installing bloatware to the point of annoyance, prevent user-removal, and not passing on savings)

I think one big feature of bloatware is differentiation. They want customers to choose phone based on which bloatware it has or doesn't have, because software is cheap. If everyone just wanted to maximize benchmark points or whatever technical spec for a given budget, and it was possible to do straight comparisons, profit margins would decrease. So they make up those extremely hard to compare offers to prevent that. Since customers will presumably try to find a product on the efficient surface, no one wants a product that is inferior in every respect, the approach is to make dimensionality as high as possible.

With offer a you get a fast cpu, a weather app, and free surf between sunday 1pm and sunday 3pm. With offer b you get lots of ram, control your tv app, and cheap calls within our network.

The reasoning you describe is not the only reason people oppose market regulation. Personally, I find the idea disgusting that somebody could be imprisoned (and killed if they resist) simply for selling something to somebody else, something that the other person was happy to buy.

The idea that violence is perfectly justified just because somebody provided a shitty phone experience almost physically sickens me.

Well, it rarely leads to actual violance. But I get your point. The way I look at it is that citizens collectively own this place, so they can collectively decide on the rules. Laws and regulations are just group decision on a high level.

I'm sorry, but you're committing an error in your reasoning: one doesn't need to assume that markets are perfect to oppose regulations; one just needs to consider that, as bad as free markets can be, they're never worse than the political system that creates the regulations.

Arnold Kling endorses free markets not because they are foolproof or flawless. They aren’t. Arnold supports them because the alternative is generally much worse: an especially flawed institution that fosters unusual amounts of foolishness.

http://www.fee.org/the_freeman/detail/klinging-to-reality#ax...

Are you just pointing out an error in his/her reasoning, or do you actually believe what you said? If the latter, do you consider regulation regarding food safety, medical profession and energy industry bad?

I'm playing Devil's advocate in at least half of what I write on political issues; often I don't have a strong personal opinion, since I'm reasonably aware of my ignorance.

I'd like to see some proof that they are better? I consider them on par with each other.

Mainly, because I don't see how Free Markets don't collapse into a Regulated Market by the will of major players? If you are in a relatively Free Market and you gain a monopoly it's wiser, in short term, to invest into instruments to prolong your monopoly, rather than research and development. In other words it is in interest of major monopolies to create regulations to stop competition.

You are correct that investing in attaining a government granted monopoly has a very high return on investment.[1]

This is exactly why many free-market advocates believe that the government should not be allowed to regulate at all, or at least without very strong evidence that the intervention is necessary and proper, as well as limited in time and scope. These people believe that regulators are subject to 'public choice' problems.[2]

[1] http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1375082

[2] http://en.wikipedia.org/wiki/Public_choice

So you think that antitrust laws are wrong?

Anti-trust laws are at least poorly implemented, and at worst intended to protect local special interests (against the trusts and their descendants).

>"[W]e have no coherent and comprehensive account that differentiates between legal and illegal practices. Nor do we have any good way of devising remedies in complex cases that don’t create more distortions than the illegal practices they are supposed to eliminate."[1]

[1] http://www.forbes.com/2009/05/18/christine-varney-antitrust-...

That's possible (I have a very vague knowledge of the antitrust laws in the US). But a good antitrust law is better than no antitrust law. Do you think that a secret price-setting agreement between AT&T, Verizon and Sprint should be legal? It would be profitable to these companies. In a model, competetive market, this wouldn't work, because a competitor would immediately appear on stage and started offering equivalent products for lower price. But the actual market is absolutely different, that's why regulation is needed.

Have you considered that the US mobile market may be less competitive because of other regulations? Who assigns spectrum and shuts down unlicensed providers?

Yes, that's certainly possible. My position is that zero regulation is often not the optimal amount of regulation.

Regulation is an ill-defined concept, so that statement is meaningless to me. If you mean the same as when people usually call "unregulated", which actually means heavily but baldy regulated, then we're in agreement.

You shouldn't assume that I think regulations are bad from what I wrote; I didn't say it was my position.

I didn't assume it, that's why I asked. Anyway, what exactly was the error in my argument above? All I said was that the common reasoning "regulation in model market is wrong, therefore regulation in real market is wrong" is flawed. Perhaps there are other reasons why regulated markets are always under any circumstances wrong. If so, I'll be happy to discuss them, although I'm convinced they're flawed too (lot of anecdotal evidence).

That statement is true for every industry not just laptops. Generally, government intervention to give "choice" is far better than something that bans a product outright.

With this kind of regulation people will now get into the technicalities of what constitutes a "bloatware" and will spend countless hours in legal battles.

It's not an Apple, Nexus or Windows Phone problem, it's a 'free' Phone OS (Android) problem. The price of a cheaper phones has to come from somewhere.

That makes no sense at all. If anything, the makers of Windows Phones would have more incentive to add crapware in order to offset to license costs without having to raise the price.

And iOS doesn't even have a price tag.

I'll explain: The cheap Android phones do this to earn a few bucks from the provider and/or crapware providers. The audience interested in cheap Android phones is less educated than people paying a premium for their phones. People pay a premium to get a good phone with a good experience. Crapware will kill marketshare.

If Windows Phone added crapware they'd be dead in the water. I can't see them doing this, there is too much competition in the market.

No. The providers want to have the crapware and simply won't subsidize a phone without it, which means that phone does not sell. Apple is able to prevent that only because their brand is stronger than the providers'.

The audience interested in cheap Android phones is more educated (or more price sensitive) than people paying a premium for a status symbol.

> If Windows Phone added crapware they'd be dead in the water. I can't see them doing this, there is too much competition in the market.

Funny then that they have always done just that: http://forums.wpcentral.com/nokia-lumia-521/229156-bloatware...

Thanks for the reply. Windows Phone indeed has apps you can't remove, just like Apple they're mosty standard aps and ringtones. From your link: "You can't uninstall any of the core operating system apps from Microsoft. I just helped my neighbor clear out all the bloatware from the carrier. And you are correct that you can NOT remove any of the pre-installed ringtones. Why, I have no clue, but it is, what it is. It's just not this phone, but all the WP8 devices you can not remove the existing ringtones. If you add ringtones, you can remove those. " So, you can remove the carrier-app-crap. Unlike most cheap android phones.

With regards to Android consumers: Android Is Popular Because It's Cheap, Not Because It's Good http://gizmodo.com/5977625/android-is-popular-because-its-ch...

The last study conducted by the Pew Research Center's Internet & American Life Project shows that Android is the chosen smartphone of people without money. Among respondents, 22-percent of those with annual incomes below $30,000 were Android owners, as opposed to just 12 percent for iPhone. With those towards the lower-middle class, the trend holds: Android owns 23-percent of incomes up to $50,000, with iPhones at 18. The data makes it clear: the less money you have, the more likely you are to opt for an Android phone over something more expensive.

So you just disproved free market economics with "very simple" reasoning along the lines of "their assumptions are wrong".

Yes, many of the conclusions are wrong, because the assumptions are wrong.

As usual arguments against free market ideologies are based on misunderstanding.

They don't assume an idealized market model and don't derive conclusions from it. I don't see why I should elaborate when you're happy with simple contradictions and patronizing comments like "you fell for a simple trick".

Well, I can't defend against your statement, you say I'm wrong, but don't say why exactly.

> free market ideologies

The name "ideology" suggest that the whole theory is built on top of some assumptions or dogmas. What are they?