Bork pontificates on Antitrust:
Bork held an e-mail "exchange" with Eleanor Fox of NYU Law School about mergers, in which he said some interesting things about antitrust which I believe also have some ramifications for Microsft's case with DOJ.
slate.com
First, there's this old conservative stand-by for why you don't want a lot of government involvement in antitrust:
The American economy is remarkably resilient and adaptive, and these days it reacts with positively breathtaking speed to profit-making opportunities. If, in some geographic or product segment somewhere, there is a lack of competition, that circumstance will not last long. Competition will probably appear in less time than it takes the government to prepare and litigate a case.
So true, in every case except Microsoft's, right Bob?
There is a chasm between the effects on competition of monopolies and of two-firm markets (duopolies). That is evident everywhere in the real world as opposed to mathematical theories of oligopoly or duopoly behavior. In the United Shoe Machinery case, for example, United's profits were far higher where it was the sole supplier than in markets where it faced even one smaller competitor. In complex products such as military hardware the situation is far too complicated and constantly changing to permit managements to restrain competition without overt collusion.
Just a couple of stupid questions from the peanut gallery:
1. Consistency is the hobgobblin of small minds, but does that mean that we can all breathe easier due to the fact that Microsoft, as you say, "face[s] even one smaller competitor" in the form of, say, Linux or IBM or maybe even Apple, in the OS market?
2. How, if at all, does the fact that software is "far too complicated and constantly changing to permit managements to restrain competition without overt collusion" affect Bork's analysis of the Microsoft case?
And, we have this tantalizing tidbit about Microsoft:
Microsoft's attempt to purchase Intuit, which offers the leading money management software, is probably too close to the matter in which I am engaged for me to comment. Except, perhaps, to note that Microsoft has closer to 95 percent, rather than the 80 percent you mention, of operating system software for personal computers. I am not sure, in any event, that this would have been only a vertical merger. Microsoft has considerable influence or control (whichever way you want to put it) in applications software.
Yeah, but Microsoft would have divested "Money" to Novell. My question to Bork is: would that have been enough to maintain the "duopoly" characteristics of the market for personal finance software, thereby preserving the competitive aspects of a duopoly market as in the United Shoe Machinery case mentioned previously? If not, why not?
Also, why does Bork treat "applications software" as a single market? If he were to treat it as more than one market, could Microsoft still be said to have "control" over all of them?
And, how does Bork derive the 95 percent statistic? If he's talking newly-manufactured IBM-compatible PC's, I agree. If he's talking about the total PC market (including Apple, Be and the rest), Fox may be closer to the mark. And what happens if you break the different flavors of Windows into separate markets?
Finally, let me close with one last "choice cut":
The proper remedy for the government's antitrust enforcers is a large dose of Valium.
But I guess before it OD's on Valium, DOJ better take care of Microsoft, eh Bob? ;)
God, I hate hypocrites. I hope I'm not smelling one here. |
