Re: Should the Fed Gov break up Microsoft? No

[supertimer@aol.com (Supertimer)]

Rubywand <rubywand@swbell.net> wrote:

>Mike Westerfield writes ...
>> 
>> > Tend to disagree. Microsoft has done a good job of delivering a decent
>> > standard OS for PC machines. If they were close to having a monopoly it
>> > is because millions of users 'voted' for Microsoft products.
>> 
>> Much as I hate Windows, I can't find any fault with this. While it's
>> possible for the government to go after a company merely for existing as a
>> monopoly, I can't think of any cases where they have. In other words,
>> _being_ a monopoly is not what triggers government action.
>> 
>> The problem with Microsoft is that they have used this monopoly
>> position to force other companies into decisions they did not want to
>> make.
>> 
>> Think of it as the difference between being big and powerful and being the
>> schoolyard bully: We respect big, powerful people and try to get them on
>> the football team, but we tend to punish bullies.
>
>     Or, we just call those who are successful "bullies" in order to avoid
>criticism when we use government power against them.
>
>     There is nothing forcing anyone to install Windows or any other piece of
>software from Microsoft. If Microsoft wants to sell more of its products and
>sets up Windows 2000 to hate QuickTime, RealPlayer, or whatever, that is
>nobody's business but Microsoft's.
>
>     The cost to Microsoft could be lost business and increased interest in
>alternatives. On the other hand, users may go along with the limitations. (Or
>Apple and the Real Player people may adjust their products to work with
>Windows 2000.)  Such strategems and buyer decisions are what a free
>marketplace is about.

But that's not a free marketplace anymore.  Market theory is that
competition will produce the best product.  That's why consumer
goods in the West have been so much better than in countries
where monopoly is the rule (specifically, the Communist block
countries with their centrally controlled production).  But this is
precisely why a monopoly is so dangerous to innovation.  You
seem to believe that monopolies should go unchecked.  They
cannot.

Being a monopoly itself is not necessarily illegal.  Using the
position of monopoly to coerce and disrupt competition is.  This
is exactly what Microsoft has done.  Microsoft's OS may have
risen to dominance on its own merits.  The fact that this is so
and that it resides on 9 out of 10 desktops is not the problem.
The problem is when Microsoft uses this monopoly position to
stifle competition in browsers, ISPs, PC makers, and to a
lesser extent office software.

>     Having the sock to make things rough on the competition is one of the
>rewards for success. (That's why they call it "competition".)  So is being
>able to "force other companies into decisions they did not want to make".
>Major corporations do it every day. When smaller companies can, they do it,
>too.

And how does this benefit the consumers?  Or does this matter
in your view?  Should one oil company be able to control oil
prices so that consumers pay 5 times more?  Or do we prevent
one company from ever being able to do this?  Should one
telephone company be able to control prices and phone
hardware?  Or should we prevent this and open up the field
to competition?  Would you as a consumer benefit more in
terms of prices and service with 10 different long distance
carriers or one monopoly?  In which case would you HAVE a
choice?  Or telephones.  Should you have the choice to buy
your own phone from a company of your choice for 1/4 the
price?  Or do you want to have one company dictate price
and model to you.  Don't like it?  No phone for you.

If one company takes control in any market, there is no longer
consumer choice.  Without consumer choice, there is no
feedback between the consumer and the producer and that
is where the market economy breaks down.

And just because a company gets to monopoly position by
a superior product in one field does not mean it provides the
best product in ALL fields.  Monopolies can get-by providing
poorer products by using non-competitive means to destroy
better competing products.

There is no doubt about it.  Monopolies are anti-free market.
The Communists are the ultimate examples of monopolies.
They are good at building military hardware, no doubt about
it.  Look at the only country able to challenge the USA in
the nuclear arms race and the space race.  But does this
mean they are good at everything?  No.  That's why US
companies now often use Russian rockets to launch their
satellites, but they don't use Russian autos for their
company cars.

Similarly, although the Microsoft OS is decent, it is obvious
that their browser, their online service, and even their
office software to some extent are not as good as their
competitors.  Netscape browsers and Corel office products
are superior in quality.

>     Corporations serve the public good by delivering products and services
>which people like enough to purchase and by paying employees. Conversely,
>government meddling is almost always a perscription for disaster. Look at
>what happened to phone service and prices after the breakup of 'The Phone
>Company'.

A shrewed consumer using a computer program to chart
which long distance service to use at what time can save
more money today than when there was a single Phone
Company.

>     There was no government action against Apple when, for all those years,
>it limited its mouse and windows OS to a very small market. Yet, it is easy
>to make a case that Apple's actions did more damage to worldwide personal
>computing than anything Microsoft has ever done or attempted.

But Apple never became a monopoly because it never got
to the point of Microsoft's market share.  They prevented
themselves from getting to that point by their own blunders.
The whole Mac versus Apple II thing shredded their user
base.  If Apple had built a Super II instead of a Mac, kept
and expanded its user base to the point of edging out the
PC, dominated nearly all computers, then started using
its monopoly position to stifle good browsers and offer
their own inferior products when the competition is
subdued, then by all means the government should act to
break it up.

>     Again, though, Apple was within its rights in saying: "Hey, you want the
>cool Apple OS? Well, you gotta _buy_ a cool Apple computer."

If I wanted another OS, I can get a PC and run that.  If after
Microsoft uses its monopoly power to destroy competing
companies (Apple, Netscape, Sun, etc.) where would I go
if I wanted to run a non-Microsoft browser?  By that time,
they could pass off an inferior browser and I'd have no
choice but to run it.  Where is the consumer's choice them?

Remember, if any little guy comes out with an alternative,
Microsoft as an unchecked monopoly could use its power
to crush it WITHOUT building a superior product.  This is
NON-competitive.

>     Since the early 90's, Microsoft has faced remarkably inept, no-vision
>competition. If, thanks to Netscape, AOL, Linux, etc., this is changing,
>fine. This is no time for bungling government "solutions". Let users choose
>the winners. Let the fur fly!

The Netscape browser has ALWAYS been an extremely
refined product.  IE, by contrast, sucked.  It has gotten
better, but is hurt by being bonded to the OS.  That's no
place for a browser.

Most people considered IE 3 to be vastly inferior to
Navigator 3.  Yet overnight, it gobbled up 40% of the
market.  Why?  Consumer choice had nothing to do with
it.  It was because Microsoft put IE 3 into Win 95 and
put an icon on the desktop and threatened every ISP
and PC maker that they'd lose their OS licenses if they
put the Netscape software and its icon onto the desktop
too.

Here's an analogy.  Imagine there is a single car company.
The car company is a monopoly.  The car company has
never made tires before.  A brilliant upstart company has
invented a new tire technology.  They make the best tires
in the world.  The consumers are happy.  But now the car
monopoly thinks that tires are the future.  The car monopoly
brings out its own tires.  The tires suck.  Left to competition,
the consumer always chooses the tires from the upstart
company.  The car monopoly does not like this.  So
instead of building a better tire, the monopoly does the
easy thing.  It uses its monopoly power to stifle the superior
competition.  First, it changes the cars it makes so that
it can only take a proprietary wheel with a proprietary rim.
The competition, although superior in tire technology,
cannot fit the new rim.  But the competition does not die
quitely, so the competition changes the tire size to fit
the new rim.  This goes on a couple of times with the
poor upstart company spending lots of money keeping up
with the game.  The monopoly company then blackmails
dealers.  They won't provide cars to any dealers that mount
the superior competition's tires.  At this point, the dealers
have no choice but to offer only the monopoly car
company's inferior tires.  The consumer has no choice.

Is this what you want for computer software?