The DOJ and MSFT - I say a pox on both houses. However Peter, I believe you are oversimplifying the issues ridiculously. Your argument seems to be in opposition to the very concept of a monopoly. That is not only not in accordance with U.S. law (monopolies are legal), but defies common sense.
Please consider how monopolies arise in the first place! Not all monopolies arise because of luck, special circumstances etc. Sometimes they arise because even though there has been competition, one competitor was more nimble than the others. The desktop OS monopoly (or near-monopoly) that MSFT has enjoyed (and to a degree still enjoys) is a case in point. DOS/Windows may not have been the best OS available at the time the monopoly arose, but it got established by a combination of MSFT strategic marketing and the massive incompetence of the major competitors. You will not convince me that Apple didn't have a good chance to be in MSFT's position of dominance - they simply blew it. The same with IBM's OS/2. We can go back as far as we want - pre Apple - didn't Xerox have a chance to change the industry the way Apple did? Why didn't they? They blew it. The fact is that MSFT competitors blew it - period. Sure, MSFT made some good strategic decisions, but as the saying goes "couldn't have done it without you"... meaning their "kind" competitors.
And this brings us to alternatives. What would you propose? Why is it the fault of MSFT that their competitors are incompetent? What should be done, if one company so towers over the others that consumers naturally flock to them? Should we subsidize the competitors with a "I'm dumb, please help me" tax on MSFT, the proceeds of which should have gone to subsidize Apple, IBM, Xerox and a million other losers? Look at NOVL. They have some great products - but they are losing ground to W2K - for a variety of reasons. What should be done? Handicap MSFT to allow the incompetent marketing team at NOVL to have a shot at the market? Do you understand what that would mean? Would we have beaurocrats deciding which technology is the "winnig one", and therefore ought to be bought by consumers? Great! LOL! This is utterly unrealistic, and also undesirable. It is a fact of life that the best technology does not always win - that marketing is part of the equation. And if MSFT is (or was) great at marketing, why should they be punished for it?
How about requiring Michael Jordan to wear a belt with 80 pounds of lead around his waist and a chain around his legs, so that the competing team has a chance? Get real.
I think that had the MSFT desktop monopoly been prevented, you'd have more choice - sure. But would it necessarily result in a BENEFIT to the consumer? No. The only time choice is of benefit to the consumer, is if it is the result of NATURAL competition, not artificial leveling of the field. In the latter case, you'd have NO benefit to the consumer, because competitors need not gain/maintain customers with superior products/services, but can simply rely on government fiat ("we are ENTITLED to X% market share"). The incentive becomes perverted. And the result is not good at all. When you fight for your very life - your incentive to compete and come up w/ the best is much greater. I don't know if you remember the arrogance of Apple which was their downfall - the way they wouldn't listen to consumers or developers. Funny, the same accusations are sometimes heard against MSFT - and w/ far less justification, I may add. Those "feature heavy" application wares are that way, because MSFT throws in the kitchen sink from lists compiled by marketing research teams - in other words, customers REQUEST them. Contrast that with the old Apple attitude of "we know best". There were some brilliant minds working at Apple - but the trouble is that even the most brilliant minds cannot function without adequate feedback from their targets, i.e. the consumers. I don't think that a world where Apple is not subject to the ruthless discipline of the marketplace would be a better place for consumers. Sure, they'd have more choice - but what good is it, if the choice is 15 different OS, all of them bad, bug-ridden mediocrities, because they can always count on having their market share and existence guaranteed by government fiat. It would have been different if that was the result of free competition. Sometimes the result of free competition is a monopoly. And that is not bad for consumers - it is the result of a Darwinian process - and the result may be the best THAT IS POSSIBLE FOR THIS WORLD.
The trouble is, when a monopoly is obtained through unfair competition, and/or maintained/extended by illegal means. And that is where MSFT is in trouble. I'm not sure a successful argument can be made that they got to be a monopoly by illegal practices. But I certainly believe that once they became a monopoly, they engaged in anticompetitive practices that harmed consumers. They illegally extended their power. They illegally destroyed many smaller companies. I believe they have certainly hurt consumers in many ways (suppressing innovation etc.). Thus, the DOJ definitely has a case. So, I'm not a blind defender of MSFT. Becoming or being a monopoly is neither illegal nor harmful to consumers. Abusing the monopoly power, certainly is illegal and harmful.
Now of course the question is what to do about it. One issue is compensation for damages. In some ways there is no way to compensate fully - how do you compensate a company that is out of business due to MSFT dirty tricks - how do you compute the benefit consumers lost due to innovation being suppressed? The damage is irreperable. Surely MSFT should be made to pay - as long as it doesn't throw the baby out with the bathwater - I'm thinking here of Germany after WWI. The Versaille treaty forced Germany to pay huge reparations. Yes, the Germans did cause the damage and were responsible. But the harm that came from forcing them to pay for their crimes outweighed the issue of ideal justice - as Maynard Keynes pointed out at the time. So, after WWII the U.S. wisely chose a different course.
Something similar needs to happen w/ MSFT and the DOJ. Yes, MSFT should pay damages. And further, yes, MSFT should be made to obey the law, should be enjoined from anticompetitive and illegal activities. But let us make sure that we don't lose sight of what the ultimate benefactors are supposed to be: the consumers. Based on Judge Jackson's actions and the DOJ, I have no faith that there is that kind of vision or intellectual firepower at play. It is STUPID to simply break up MSFT. The problem is not that MSFT is a monopoly - and the remedy should not be to break up the monopoly. That merely interferes in the naturel competitive environment, and the process of natural evolution. What needs to be done is to find measures that will effectively prevent MSFT from **ABUSING** that power. I don't think that MSFT can be trusted to police themselves - that is not realistic. We need measures - but it is not a neat process or simplistic solutions like a breakup. Sometimes, unfortunately, there are no simple solutions no matter how appealing they may seem on the surface. Sometimes, it is a complicated and painful process. Incidentally, I think it is laughable for Jackson to compare MSFT to Standard Oil. There is, no chance in hell that MSFT's monopoly can be maintained indefinitely. Technology changes too fast, and the world changes too fast. I remember when everyone thought IBM was invincible - not long after that, there were questions raised about their very survival. Long term, I think MSFT's desktop OS monopoly is not secure, and I don't believe they'll ever dominate the server or hand-held market. So, we may be battling a dying giant - but that is beside the point.
And so, we have a tragedy unfolding. A rogue monopoly - MSFT, and a sheriff that's way out of his depth - the DOJ/Jackson. Whichever way this goes, the consumer will be the loser in all this. Sad, but seems inevitable.
Morgan |
