RE: POL: Reaction to Microsoft Ruling

From: Billy Brown (
Date: Fri Apr 07 2000 - 15:41:46 MDT

Matt Gingell wrote:
> I appreciate the argument that monopolies are unstable - maybe that's
> so. It's a punctuated equilibrium model - a stable looking
> configuration can spontaneously shatter and something totally
> unexpected and new can replace it. On the other hand, maybe a monopoly
> is a kind of local maximum - a bottom up economic optimization system
> gets stuck and it needs to be perterbed from outside before it can get
> going again. What does seem clear though is that, presently, there's a
> problem. Whether government intervention is necessary or beneficial
> is a separate question. Maybe, left alone, the market will change and
> the situation will resolve itself - or maybe we can save 20 years of
> stagnation by stepping in and doing something about it now.

There is abundant evidence that it is extremely difficult for a real
monopoly to exist at all, and that large market share does not imply an
ability to gouge customers. All of the existing "monopolies" familiar to
modern Americans were created by government fiat, usually because an
industry wanted special protections from competition. The historical
examples cited by anti-trust proponents are generally inaccurate and
discredited. All in all, there is no good reason to believe that monopolies
would be a major problem if anti-trust laws were abolished.

That is important, because there is abundant effort that the existence of
anti-trust laws imposes major costs on consumers and significantly retards
innovation. The actual effect of such laws is to reduce competition, punish
success, and encourage the formation of inefficient government-mandated
monopolies that waste vast sums of the consumers' money.

> This is an over simplification. If Microsoft gains a competitive
> advantage from control of the Windows platform, rather than because
> they're offering a better product, then superior products will fail
> for reason irrelevant to their quality. I would like to see an
> environment where products succeed on their own merits, not because
> their maker controls the distribution channel or a proprietary
> standard.

There is no plausible mechanism by which Microsoft could exert such an
alleged advantage. The fact that they own the OS does not automatically
enable them to build superior programs, and it certainly doesn't let them
charge more or work more efficiently.

But don't take my word for it. Look at the history of the market.
Microsoft has had lots of products flop, even after they became the dominant
OS vendor. Their typical pattern is to misjudge a market, release a lousy
product, and get hammered for a couple of version numbers while they figure
out what the customers want. Then they come out with a product that meets
more customer needs than any of their competitors, usually at a lower price,
and their market share shoots up to 80-90%. you can easily verify this by
looking at product reviews before and during the shift in market share.

Now, last I heard, that is exactly what companies are supposed to do. so
what is the problem?

> For instance, I'd like to see a public operating system
> specification - something like Posix - and a law prohibiting
> government agencies from purchasing operating systems that do not
> conform to that standard or buying application software which doesn't
> run on some minimalist public reference implementation.

So, you want the government to decide what an OS should do and how it should
be implemented, and then pressure application vendors to only write
applications for the official government OS? Who on Earth could possibly
benefit from that?

If you could actually do it, you would stifle innovation to an extent no
monopolist could ever dream of. The government would select OS features on
the basis of political influence, and it would take forever to get anything
new added to the standard.

> Vendors could
> than compete and differentiate themselves on the basis of efficiency,
> robustness, etc, of their particular version.

What's wrong with letting vendors competing on the basis of whatever
combination of speed, efficiency, reliability and features the customers
consider important?

Billy Brown

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