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Of course they're legal; so are oligopolies.

You wrote:
Monopolies are a natural outgrowth of the free market and the only reason we don't see more of them is that we have laws that regulate and prevent them. A free market economy rewards size and success with even more size and success and without anti-trust laws, we would all be getting everything from food to clothing to computers from two or three giant corporations.

Ahm... Kept up with the merger news lately? The trend is for industries to be left with a small number of survivors large enough to compete with the other behemoths.

And... You do know monopolies are legal, right? Microsoft's monopoly was not attacked in the anti-trust case, just their efforts to protect their monopoly against potential threats.

Monopolies have a justification. Windows' main advantage as software was ease of for new users. There were many at the time. In what's called the network effect, developers were pleased not to have to port to many systems, so they happily wrote applications for Windows.
Great self-reinforcing mechanism: developers write for Windows because it's universal, and people buy Windows because that's where the apps are.
Judge Jackson at the first anti-trust trial called it the "applications barrier to entry", being in a sour mood. Like much else, I expect he quoted that from the US government brief.

Eventually industries figure out a way to outgrow the network effect. Linux will slow the process, of course, because it prevents a well-financed competitor from arising. But maybe a company will overcome Linux (or use it as Apple uses Darwin) and be able to compete with full marketing resources.

IBM could do it, for example, but at the moment they're emphasizing the hardware and services aspects. Linux and other open source just lower the total cost of bids.

Posted by: Anton Philidor   Posted on: 02/15/05 You are currently: a Guest | Members login | Terms of Use

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