European antitrust regulators have taken the worst of American antitrust “analysis” and made it even worse, that is, even more blatantly protectionist of competitors and dismissive of consumer welfare. Antitrust law is one U.S. export that both U.S. and European consumers could well do without. The recent EU attack on Microsoft shows why. [Full Article]
Source link: http://blog.mises.org/3110/microsoft-in-wonderland/
Microsoft in Wonderland
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This just in, the Galactic Court has ruled that the operating system in the Starfleet starships violates anti-trust laws because it comes bundled with transporter software….
Der Spiegel published an interview with Mr. Gates in which he gave a rather good account of himself.
For more details, please see the entry “More for less? What a rip-off!” on our blog at http://sage.typepad.com/
I think Microsoft has plenty enough rope to hang themselves without help from any government.
On a tangetial note, I just got my Mac Mini, and it is a joy to work with. Small, beautiful, and oh so quiet. I think Apple have a hit on their hands.
About time somebody drew attention to this typically vacuous decision (typical of the European Commission that is). Competition law is supposed to be rooted in consumer welfare. We are expected to believe that forcing Microsoft to sell Windows without Media Player is somehow going to benefit the consumer. On a personal note I purchased a computer complete with a bundled Media player and have found it very useful. Had it not been included I probably would not have bothered to obtain it on my own account and my satisfaction with the product so purchased would have been diminished (insofar as it would have prevented me downloading certain files). And if I ever become dissatisfied with it, I – or any other consumer – can try competing players. The fact that we do not (by and large) is a tribute to Microsoft’s product.
I would sympathize with Mr. Gates if he wasn’t such a globalist liberal type who imports foreign workers into Redmond Washington to work at substanially reduced wages from what Americans get. He’s just part of a system that eats its own.
BTW, Windows Media Player is so slow and bulky, I’ve really got to have a great reason to use it. So a copy of XP without is really nothing to get excited about.
At the risk of appearing to be a statist troglodyte, it seems to me one of the assumptions in this critique is that Microsoft has gotten to its present position solely by sweat of its brow. A gross fiction entirely unfounded. MS has been one of the main recipients of government assistance, and thus does not qualify to be excused from restriction by other governments less friendly to its commercial desires.
Because the US government remains not only one of MS’ main customers, but because the Commerce Department of that government has actively promoted false and misleading claims for MS products around the world, MS hardly stands as a good candidate for defense as a participant playing on a level field in the free-market.
It appears not widely known outside the professional technical community that MS has perpetuated a “marketing” approach which has relied mainly on “FUD” (fear, uncertainty, and doubt) rather than technical excellence to gain market share. One commentator aptly characterized the company as “fast followers”.
Anyone not born in a cave is perfectly aware that MS software is perpetually revealed full of holes easily exploitable by persons having no greater skill than the average high-school geek. Thus the requirement for the almost daily issuance of security patches attempting to heal new problems (problems usually discovered by others outside MS, curiously enough).
The growing world-wide resistance to MS owes to its unrelenting efforts to make proprietary any technology it lays its hands on to exact a profit from its customers for using it. Most of the best software available today — and that most relied upon for serious purposes (e.g. the vast majority of internet service providers) — is Open Source. The issue isn’t financial cost, MS railing to the contrary, but reliability and transparency. Neither are strong suits for MS. And never have been.
Perhaps the most humerous encounter MS has ever had with the real world happened in Peru, when MS (with the active aid of the US Consulate) attempted to induce the Peruvian government to adopt MS for its use. The reply by Peruvian Senator Villaneuvias to the MS proposal document was an utterly devestating — and entirely courteous — indictment of false and misleading arguments in the proposal. The good senator invited further response from MS, but there is no record they ever even tried.
This letter, in particular, got much attention outside the US, and many governments agreed with the points logically and plainly laid out by the senator, which called MS to account for its various fibs and fables. That it had no response has been telling, and not lost on other governments who also understood the MS “hooks” the senator pointed out. There are many sources on the web; here’s just one …
Ref: http://twiki.iwethey.org/twiki/bin/view/Main/PeruvianSenatorVillaneuvasLetterToMicrosoft?rev=1.2
Any company that gains a reputation for misleading its customers and prospects eventually suffers. But it can be shielded from such suffering by a complicit government joined with it in duplicitous marketing.
Any conclusion that a company promoted by one government should be immune to limitation by others governments having different interests relied on deeply flawed reasoning. It also promotes the pernicious notion that “positive” domestic government support for a commercial company is ok, but “negative” resistance by foreign governments is not.
That seems to me utterly contrary to libertarian, free market philosophy.
from what i understand, the complaint with microsoft’s defacto monopoly vis-a-vis the windows operating system gives microsoft an “unfair” advantage with regards to opportunity cost of their other products, namely their media player (including wmv format + digital rights management), internet explorer browser, etc.
i think this complaint is legitimate. though, i don’t see how government interference solves it. if anything, government interference legitimizes windows as a monopoly, which makes it that much more difficult to dis-entrench as a substandard market product.
what i would propose (of course), would be deregulation by way of nullifying software patents, such that anyone may legally reverse-engineer any microsoft product and improve it by way of their own ingenuity — specifically with regard to compatability and security. for example, anyone could develop a “windows update” workalike and people could subscribe for “distributions” of windows, rather than having to administer the system themselves (which gets to be frustrating the 3rd or 4th time around of installing windows, which you have to do about every 6 months due to “installation rot”). i think this would be as natural as “package management” would get on the windows platform (akin to “ports” on BSD or “portage” (gentoo), “apt-get” (debian), or “rpm” (redhat) installations of gnu/linux). this is probably a sorely needed market anyway, as so many obscure settings in the registry need to be configured to make windows more stable and fix security holes.
-z
Bud, the link is dead. In fact, the site seems to have gone down the memory hole. There’s an interview on Linux Journal, and LinuxToday has the English translation of the original document here.
As far as the browser goes, Microsoft appears to have shot itself in the foot by not making Internet Explorer virus-resistant. Many are switching to Firefox for that very reason, and it won’t be long before the same thing happens with office suites and media viewers. Even though I view MS sympathetically from an antitrust standpoint (they do NOT have an OS or desktop monopoly), I have no use for the crash-prone, virus-ridden crap they turn out. I also have no use for the FUD (fear, uncertainty and doubt) they spin when talking about other operating systems.
The point of Antitrust-American and European as well-is making public a private good like an operating system, so that a “market failure” occurs and calls for regulation; in other words, they create monsters. As a libertarian, I think that only Microsoft has an absolute right to manufact its own product the way it prefers, even if such freedom would impede upgrade or changes in the media player.
I love to bash Microsoft based on the quality of their products and especially on the fallacies promoted by their marketing department in order to smear the competition.
But as has been said many times, ones neighbors rights must be defended just as one wants their own rights to be defended. Microsoft is a target of convenience created by the governments who now prosecute them.
I have watched for years as file and protocol compatibility efforts have gone on and on, while Microsoft throws their programming muscle behind efforts to obfuscate their own programs such that they cannot be trusted to interact nicely with others, as file formats are changed so much and so often that Microsoft software cannot read files that were written not all that long ago by Microsoft software.
Absurd patent protections created by government indeed do create the monsters that devour competition by choking away the ability to interoperate.
Or, if you read the EULA, it says you can return the software (XP) to the place you bought it from if you disagree with the license. But the place you bought the computer or OS from won’t take it back, nor issue a refund. Name any other person or corporation that can ignore contract terms.
MS Window’s flaws often cause a great deal of harm. If automobiles did the same things you would say “just sue the manufacturer”, or return the defective product. But you can’t do that here either. Ah, but more exemption from the common law.
I thought libertarianism was not identical with corporatism. If corporations can ignore contracts if they don’t want to bother honoring the terms they seem to be agreeing to, and don’t have to answer or fix longstanding dangerous defects, how is that a free market?
The Europeans might be using the wrong weapon or method, but just because a government does something, it does not give absolution to the target.
If Microsoft has the “right” to manufacture the product it prefers, it should have the “responsibility” to fix problems, and the “right” should be limited to standard copyright. If they want privileges, they ought to expect equal and opposite penalties.
No, you can’t remove WMP without standing on your very tech savvy head. There is no removal option in the “Add/Remove Programs” menu and I shudder to think what would happen if you did go through the song and dance needed to remove it by hand, if that is, in fact possible.
You can of course tell your Real Player or Music Match or whatever to be the default player and just remind them who’s boss when WMP tries to take over.
nullifying software patents, such that anyone may legally reverse-engineer any microsoft product and improve it by way of their own ingenuity — specifically with regard to compatability and security. for example, anyone could develop a “windows update” workalike and people could subscribe for “distributions” of windows
ok, maybe i was getting ahead of myself there. how about we start just with repealing the Digital Millennium Copyright Act (DMCA)???
microsoft’s purposeful incompatability and counter-interoperability are solely protected by political powers of law (copyright, patent, dmca). combined with a greater than 90% of the end-user marketshare as a result of, i highly suspect, users compromising their market values for the sake of one — compatability with their path-dependency (which is probably as old as ms-dos or windows itself) — i consider windows a defacto monopoly. because microsoft sure acts like one, and if it walks like a duck and talks like a duck…
-z
I have no problem with Microsoft bundling WMP with XP. What I do have a problem with is trying to use a competing media player and how somehow the introduced media player has “problems” eventually and must be shut down. Heh. Call me paranoid, but it has happened to me a lot, even after making the competing media player the default. Now that’s antitrust material.
Ever since Microsoft started threatening schools and other organizations with lawsuits – unless they bought new copies of WIndows for donated computers and conducted “software audits” of all their installations – I’ve stopped seeing them as a capitalistic enterprise. (A few examples are linked from http://lugod.org/microsoft/?filter=edu) Microsoft and the EU may both be bullies, but in this case, I hope Microsoft gets taken down as many pegs as possible.
In the meantime, I’ve replaced all my Microsoft products with alternatives, and I’ve discovered in doing so that these alternatives are cheaper, more secure, and make me more productive.
Paul D, yes, it would be nice if Microsoft is going to use their enforcement arm, the BSA, to bully others into compliance with the “law” and their “End User License Agreement”, that they would be liable for the refund that they define for unused software like my WinXP.
Simple hypocrisy. And tz shouldn’t worry about Austrians and Libertarians being “corporatist”. The problem is the ignorance with which the governments are attacking Microsoft. The stupidity of prosecuting for doing what doesn’t actually harm anyone else, while failing to prosecute for the unending ways that Microsoft does indeed harm the end users, like Paul and I, who have no recourse when Microsoft doesn’t fulfill their own EULA.
One good thing, Microsoft has not yet figured out how to legally require the use of their software. The DMCA goes a long way, since I cannot legally watch a DVD on my Linux box, but not far enough for the RIAA’s, MPAA’s, Microsoft’s and Apple’s tastes.
tz- Our legal system is in the crapper. BTW, corporations hate libertarians and free markets without government subsidies and protection.
In a libertarian economy there would be a lot of things different. The contract would be the very basis of economic interaction, and the law would demand that both sides fulfill the contract.
Of course they could also go to private arbitration and settle the differences.
If I understand Mr. Armentano he is distraught because the state is interfeering in the free market. While state interference is a valid concern, in the specific case of microsoft it is not. The reason state interference with microsoft is acceptable is because microsoft does not compete in the free market. Microsoft competes in the government market.
Microsoft makes money by selling licenses to copyrighted software. If we examine the copyright system we will find that copyright is a state granted monopoly on the use and distribution of creative works (Such as software). Microsoft has no natural property rights on Windows, Media Player, or any other of the software it produces. The very idea of copyright only extends back a few hundred years. Hence, Microsoft is not competing in the free market but rather the regulated market.
Because Microsoft has chosen to play in the states sandbox, because they have chosen to accept the benefits of their monopoly why should they complain when the state punishes them for breaking the states rules. If Microsoft would truly compete in the free market then they would have cause for complaint. However, they have chosen too use the state to artificially raise their prices*. Thus why are they complaining when the state changes the rules mid game.
Copyright and patents are, when examined, the state attempting to control ideas. The very idea of intellectual property is an abomination. I call on all freedom lovers to call for an end to this wretched state monopoly!
* As we all know, in a free market, over time the price of a product will approach its marginal cost. The marginal cost of software is zero. As software is very far from zero we can infer that the software market is not free.
Justice, Liberty and the Free Market.
A pure free market is based upon the axiomatic principle “that no man or group of men may aggress against the person or property of anyone else”.
This is the very principle which the courts and the legal system should follow.
I hereby quote some old writing written by Elisha Williams (1744);
“As reason tells us, all are born thus naturally equal, i.e. with an equal right to their persons, so also with an equal right to their preservation…and every man having a property in his own person, the labour of his body and the works of his hands are properly his own, to which no one has right but himself; it will therefore follow that when he removes anything out of the state that nature has provided and left it in, he has mixed his labour with it, and joined something to it that is his own, and thereby makes it his property…Thus every man having a natural right to (or being a proprietor of) his own person and his own actions and labour, which we call property, it certainly follows, that no man can have a right to the person or property of another. And if every man has a right to his person and property; he has also a right to defend them…and so has a right of punishing all insults upon his person and property.”
Corporations are owned by individuals.
Aggressions against corporations are, of course, aggressions against their individual owners and should be considered crimes.
In Man, Economy and State, page 1144, for instance, Murray Rothbard wrote and I quote;
“It should be clear from previous discussion, however, that corporations are not at all monopolistic privileges; they are free associations of individuals pooling their capital. On the purely free market, such men would simply announce to their creditors that their liability is limited to the capital specifically invested in the corporation, and that beyond this their personal funds are not liable for debts, as they would be under a partnership arrangement. It then rests with the sellers and lenders to this corporation to decide whether or not they will transact business with it. If they do, then they proceed at their own risk. Thus, the government does not grant corporations a privilege of limited liability; anything announced and freely contracted for in advance is a right of a free individual, not a special privilege. It is not necessary that governments grant charters to corporationsâ€.
Go to; http://mises.org/rothbard/mes/chap15d.asp#3R._Policy_Toward_Monopoly
Property rights and the theory of contracts.
I hereby quote from the book “The Ethics of Liberty†(page 133), written by Murray Rothbard;
“the right to contract is strictly derivable from the right of private property, and therefore that the only enforceable contracts (i.e., those backed by the sanction of legal coercion) should be those where the failure of one party to abide by the contract implies the theft of property from the other party. In short, a contract should only be enforceable when the failure to fulfill it is an implicit theft of property. But this can only be true if we hold that validly enforceable contracts only exist where title to property has already been transferred, and therefore where the failure to abide by the contract means that the other party’s property is retained by the delinquent party, without the consent of the former (implicit theft). Hence, this proper libertarian theory of enforceable contracts has been termed the “title-transfer†theory of contractsâ€.
Go to;
http://mises.org/rothbard/ethics/nineteen.asp
Violation of copyright is a violation of contract and theft of property.
And this regardless of state laws. If someone sells his property to a person under the condition that the buyer has no right to copy it, the buyer has all rights to the property except the right to copy it. That is, as long as the property is a physical object and is alienable. To find out more on this position go to; http://mises.org/rothbard/ethics/sixteen.asp
Björn Lundahl
Göteborg Sweden
When Government regulates the public loses!
I think it is good if Microsoft competes aggressively. I do not think that they should be regulated in any way. It is, otherwise, like stopping, a political party for getting†too many votes†and for competing aggressively and then accusing the winning party to be a monopolist (in the political process you will have this “monopoly†by only getting majority votes).
When people buy products, they, by these very actions, actually, vote for those products. We should accept and respect that. Talk is really cheap and only actions count. Only by actions people manifest their true values. The political process is, therefore, no substitute for the complex market process. If, for instance, people do not like Microsoft’s actions and “attitudeâ€, they will try out alternatives. Those values counts and influence the market outcome.
It is not, only, the quality of the products that counts. Advertising is very important too. If consumers do not know about products, what good are they? How can products that no one knows about benefit the common man?
Innovation in itself is of no value if the consumers do not demand it. If some products are technologically superior to others and are not demanded, it does not prove that anything is wrong. It is an illusion to ask the “experts†which products that should “dominate the marketplaceâ€. Because people are happy in those cases with the inferior ones and it is this “happiness†and consumer satisfaction that counts. If this “happiness†is dependent upon ignorance, advertising, as mentioned, is demanded and will be profitable.
The price of a product depends upon how much the consumer values it. For instance, the market price for a house is not the same as the market price for a glass of milk. If, for example, the OS Vista will not be highly valued by the consumer, the price of it will fall. If it will be highly valued, consequently, the price will be high. So, Microsoft has every incentive to make, in the point of view of the consumers (and not in the eyes of some “expertsâ€), a valued OS.
I also think that it is good that Apple and Linux compete aggressively with each other and with Microsoft. In some market segments Apple is the leader and in the server market, Linux is the leader.
The essence with this comment is that the market process is a very complex thing and all sorts of values are “computed†and taking account for. Only the market process can handle this complexity and satisfy human wants and this process can only work properly if the market is free. Governments are no substitutes for the market process.
Björn Lundahl
Göteborg Sweden
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