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Jewish World Review / June 8, 1998 / 14 Sivan, 5758
Thomas Sowell
FEW THINGS DEVELOP AS FAST as technological change in the computer industry. And few
things are as slow as antitrust cases. So an antitrust case against a computer software
company like Microsoft is about as big a combination of opposites as you can find.
Five years is breakneck speed for completion of a major antitrust case and it is not
unknown for a decade or more to elapse before the appellate courts say the last word
on one of these cases. Five years is at least two generations when it comes to
computers. A decade ago, laptops were a novelty of the rich.
Antitrust law is so full of ambiguous phrases, mushy concepts and elusive definitions
that it cannot really be considered law. Laws are supposed to tell you in advance what
you can and cannot do, not just allow government officials to nail you when they don't
like what you are doing or want you to do it their way.
Antitrust cases can involve years of wrangling in the courts and many millions of dollars
in legal fees, even when the plain facts of the case are not in serious dispute. That is
because the terms used have no clear and consistent meaning. Microsoft is accused of
being a "monopoly" that uses its "power" to prevent rival software producers from
being able to compete. The Justice Department claims to be trying to protect
"competition" by reining in Microsoft's ability to exclude other companies' software from
its Windows operating system.
Let's begin at square one: Is Microsoft a "monopoly"? By the plain dictionary definition
-- one seller -- it is not. Apple computers have a different operating system, for
example. By an economic concept of monopoly -- a firm able to prevent other firms
from engaging in the same activity -- it is likewise not a monopoly.
Slippery words like "controls" insinuate what can seldom be plainly stated and proved.
If a high percentage of the customers buy your product, that statistic after the fact
does not prove that you controlled anything before the fact.
Those same customers can change their minds tomorrow and you will be history. That
is why Microsoft keeps updating its operating system and adding new features. If it
really controlled its market, it could relax and let the good times roll, instead of
constantly scrambling to stay ahead of its rivals and potential rivals.
While the Justice Department's Antitrust Division claims to be trying to protect
"competition," it is in fact trying to protect competitors. Competition, like monopoly, is a
set of conditions in the market. It cannot be reduced to an outcome like percentages of
sales.
There is competition in boxing when the champion agrees to fight the leading challenger
-- even if the champ knocks him out in the first round. Competition is about a set of
initial conditions, not about outcomes.
The Antitrust Division wants to prescribe outcomes by asking the courts to force
Microsoft to include rival Netscape's Internet software in its own Windows system.
Some in the media have spread the disinformation that Microsoft makes it impossible
to put non-Microsoft software in its system or on the Windows screen.
My own computer came with non-Microsoft software, including Netscape, on the
Windows 95 screen -- and I didn't even order Netscape. The computer manufacturer
put it there. Moreover, Windows is set up so that the consumer can easily install all
sorts of other software. Why some media people don't bother to check out the simplest
facts is beyond me.
Some media pundits have been calling Microsoft founder Bill Gates "arrogant" for
dismissing the Justice Department's arguments as nonsense. But Gates' real problem
may be that he is not a lawyer, and so does not realize that much nonsense is already
an established part of antitrust law and
Fast computers and slow antitrust
The idea of slowing down innovation in the computer industry to the glacial pace of the
legal system is grotesque. Yet that is what the Justice Department's Antitrust Division
tried to do when it asked the courts to stop the recent introduction of Microsoft's new
Windows 98 operating system until the legal fine points could be argued out.
In antitrust law, however, numbers and percentages can be used to claim that a
particular company "controls" a certain share of the existing market. If that share is
very high, then the firm may be considered to be a rough equivalent of a monopoly.
6/3/98: Can stalling backfire?
5/29/98: The insulation of the Left
5/25/98: Missing the point in the media
5/22/98: The lessons of Indonesia
5/20/98: Smart but silent
5/18/98: Israel, Clinton and character
5/14/98: Monica Lewinsky's choices
5/11/98: Random thoughts
5/7/98: Media obstruction of justice
5/4/98: Dangerous "safety"
5/1/98:
Abolish Adolescence!
4/30/98: The naked truth
4/22/98: Playing fair and square
4/19/98: Bad teachers"
4/15/98: "Clinton in Africa
"
4/13/98: "Bundling and unbundling
"
4/9/98: "Rising or falling Starr
"
4/6/98: "Was Clinton ‘vindicated'?
"
3/26/98: "Diasters -- natural and political"
3/24/98: "A pattern of behavior"
3/22/98: Innocent explanations
3/19/98: Kathleen Willey and Anita Hill
3/17/98: Search and destroy
3/12/98: Media Circus versus Justice
3/6/98: Vindication
3/3/98: Cheap Shot Time
2/26/98: The Wrong Filter
2/24/98: Trial by Media
2/20/98: Dancing Around the Realities
2/19/98: A "Do Something" War?
2/12/98: Julian Simon, combatant in a 200-year war
2/6/98: A rush to rhetoric
