Microsoft Monopoly Questions Arise nytimes.com
Another timeless headline. Behind it, a long article from AP, mainly dealing with the content providers exclusionary deals I think. It's not a great article, notable mainly for length and timing. AP also seems a little bit too proud of themselves. Here's the leadin:
The world's most influential software company had a rule for some of the people it does business with: Don't do business with our competition.
An intricate contract between Microsoft and some of its key business partners said as much, though not in simple language. Was this good business practice, or unfair exercise of marketplace muscle?
Microsoft maintained it was merely the same as asking Michael Jordan not to wear Reebok when he's promoting Nike.
But on Thursday, after The Associated Press asked about the contract, the company said it would drop the exclusionary language.
Funny implication there. The exclusionary contracts are pretty old news, and Microsoft had agreed to drop them in the EU a couple months ago at least. Under antitrust pressure there, but that was totally unrelated of course.
There's a nice little summary I got to cut out of the middle though.
Today, 85 percent of the personal computers in the world use Windows. And 95 percent of the new computers on the market come with Windows 95, the current version of Microsoft's operating system, already installed.
Microsoft's critics say this dominance constitutes a monopoly. Microsoft disagrees.
''A monopolist, by definition, is a company that has the ability to restrict entry by new firms and unilaterally control prices,'' Gates, chairman and chief executive of Microsoft, testified before Congress in March. ''Microsoft can do neither.''
But that's not how case law generally defines a monopoly. The courts have held that a company is a monopoly if it controls 70 percent of a market.
Not that a monopoly is inherently illegal or even improper. Our capitalist system inevitably produces both winners and losers. The late Learned Hand, a prominent jurist, once said that you can't encourage competition and then punish the winners.
But the winners have to play fair. They may not use their dominant position in the marketplace to scuttle competition or block innovation. Antitrust laws set the rules for fair play. Microsoft and its critics disagree on whether the company is playing by the rules.
Some critics wonder whether Microsoft is willing to acknowledge that certain rules exist. Maybe they're just getting bad legal advise from old Rick Rule, who unfortunately for Bill & co. is no longer in position to control enforcement of those rules, or maybe Bill is fibbing about liking F. Scott Fitzgerald and prefers the more prolix prose of a different novelist.
Cheers, Dan. |
