EC's Microsoft ruling--a big mistake

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No magic to it

But don't answer "than what". Who if not government? I presume you think business is responsible for guiding the economy?

The claim you made was that I was advocating "no regulation." I responded by explaining the difference between setting up a framework for markets and making decisions about the outcomes. So, in answer to your question, the people who make decisions about the outcome are consumers / sellers, a.k.a. free actors in a free market economy.

What business has at its heart the good of the economy?

That's the point. Markets don't rely about businesses altruistically thinking about the market economy. They worry about their OWN interests, and the markets checks and balances keeps them under control. That's a principle that has been well known since Adam Smith.

Yes, quite right. And by putting Windows Media Player on every desktop, and the server on every server, then offering inducements to content publishers to stream only in WMF
(e.g. baseball league) then users are forced into using WMP.

THey're not forced to. They might choose to if people decide the products have what they want. Remember, Media Player's popularity is a new phenomenon after years of the media player product looking like a poor cousin to the more advanced products.

Likewise, the media player format can be run as easily in RealPlayer (media player formats exist as DirectShow filters), and conversely, RealPlayer formats could be played in Media Player provided Real made the encoders available through DirectShow. Very open.

Real might not get their format pre-installed by default, though note that Windows is one of the few OSes (besides Linux) where companies could pay OEMs to preinstall their own products on every PC shipped. Microsoft gets to include its own products, but they spend billions BUILDING those products. RealPlayer just has to use that money to convince OEMs to preinstall their wares.

You also totally discount Microsoft's market power driven by Windows. You're in denial.

I don't discount their market power. I just question whether a) it is the threat people make it out to be, and b) that it can't be overcome by natural market forces.

Just because it happens does not make it right. A natural outcome of anarchy is survival of the fittest. So is anarchy

You seem eager to pigeonhole me as an economic anarchist. If you want that, look to Eric Raymond, not me. I've promoted Hernando de Soto's model of economic success, which presumes governments are there to lay a strong framework for economic activity.

It IS right, however, if billions of consumers in the aggregate decide that the RIGHT solution for them is a unified desktop operating system that offers lower costs, more software choices, and long-term compatibility. What is WRONG is for the minority to insist that the rest can't do that, or for groups of smart bureaucrats to claim that the majority is wrong. If nothing else, history has demonstrated again and again that the majority of consumers IS NOT wrong.

Microsoft's dominance may have been inevitable (it totally destroys your "consumer choice" angle by the way)

Consumer choice exists ATOP the platform. Furthermore, there has ALWAYS been parallel software ecosystems that consumers can choose from if the dominant one doesn't meet their needs. That will exist as long as you can't satisfy everybody with one system (which would never happen).

The majority of software options, developers and products will be oriented around the dominant system. But then again, that's the BENEFIT that led consumers to favor a single dominant standard.

Who are "they"? The governments of Japan and Korea? Presumably they decided that government monopolies were good. There are many instances of government monopolies delivering excellent outcomes because their main aim is to benefit the community.

If they thought that, they wouldn't have stopped protecting the monopolies from competition. Rather, they didn't have this fear of big companies, which is an accident of their history, to be sure, but it led to a more natural winding down of the dominant players market power. NTT DoCoMo (the wireless arm majority owned (at least it was) by NTT) has perhaps a 60% market share, while KT in Korea has a 50% share of the broadband market. Large shares, to be sure, but unavoidable given the concentration of capital built up by government protection of telecom companies.

By leaving these companies alone, they managed to build an economy where LOTS of competitors made LOTS of money, growing to challenge their dominance in new markets.

The main aim of a business monopoly is to enrich the owners and managers of the company.

Yes, which is the point. Enriched companies are profitable companies, which is the kind of thing that builds efficiency, large companies, and national wealth. I WANT companies to worry ONLY about their own profit interests, because if they are doing that, they are engaging in the kind of division of labor which make free markets so effective.

Besides, it is classic misdirection yet again. Microsoft's problems are not because it is a monopoly, but because it is abusing its monopoly power.

Read up on the KT and NTT DoCoMo cases. By European, and perhaps, US standards, both companies "abused" their monopolies by leveraging their dominance in fixed line access to squeeze their way into new markets (KT more than NTT, to be sure, but NTT was helped by its fixed line dominance).

In other words, Korea and Japan took a very different view of "abuse" of their market position, practically defining it away, at least in the case of their former monopoly telecoms.

That is the RIGHT approach. Even dominant companies should be allowed to leverage their skills in one market (dominated or not) to enter new markets.

Posted by: John Carroll   Posted on: 03/31/04 You are currently: a Guest | Members login | Terms of Use

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