An Essential Part of Capitalism is Playing Fair
I usually enjoy reading Chris Knudsen's articles. However, his apparent love affair with Microsoft has me concerned. A major part of the problem with Microsoft is how it apparently got to where it is.
Most countries have laws against monopolies. The constant struggle of intellectual property is the grant of limited monopolies in exchange of improvement in science and the useful arts. The antitrust laws are designed to protect against the situation where someone gets so much power that they can direct the market just because they are such a dominant player. Monopolies create mediocre product and charge unreasonably high prices. Despite findings by lower courts that Microsoft is a monopolist, Microsoft always seems to avoid the fate of AT&T.
Does anyone remember AT&T? - no not the current one - the one that used to lease you your telephone (yep - they all looked alike) and charged a lot of money to make a telephone call. Yes, for those who are younger than 30, there used to be a day when there was basically one telephone company and a middle class family would plan to call grandma and grandpa once a month because of the expense of a long distance call. Finally, the government stepped in an broke up "Ma Bell" and what was the result. Lower telephone prices, better service, more options and even AT&T's stock holders made a killing. Much of the innovation in telecommunications would never have happened (or would have been much slower) if AT&T still had its monopoly.
Microsoft has a monopoly. Unless you are one of the relatively few who uses exclusively Apple or Linux, you probably use Microsoft's operating system several times a day. I prefer Windows, but I will not give Microsoft a fee pass if it uses its monopoly improperly. (Many thought open source would break Microsoft's monopoly - It just has to get through 235 patents to do so.)
There appears to be some pretty strong evidence that Microsoft has resorted to things such as programming its software to give false error messages when a competitor's software is loaded to gain a competitive advantage. Remember - they control the operating system - so that can do this to any competitor who runs on Windows. Likewise, it appears that Microsoft is not above using bogus release dates for upgrades to kill interest in competitor's products. There have also been numerous issues about whether its licensing practices and tying arrangements have been used to improperly exclude competition. A discussion of a few of the many claims against Microsoft are contained in Judge Benson's decisions in Caldera v. Microsoft (Order 1; Order 2).
Not only does Microsoft's monopoly give it the ability to crush potential competition, it also allows it to effectively use whatever technology it wants. If you are a small company and invent something cool, Microsoft can simply take it. IF you have the money to sue, you may win $100 million or more, as others have done. You may also go bankrupt. Eitherway, it is not a threat to Microsoft. They can either buy you or pay. (Rumor is they paid Caldera $275 million to make the case go away). Last I heard they have $60 billion in cash on the books.
I am all for competition and I am all for people making grundles of cash. I use and will keep using Microsoft's products. However, I also believe that capitalism only works when there is true competition and people play fair. No Chris, I would not create false error codes when my competitor's product attempts to load. I would not use a monopoly in one area to boost business another area - its illegal. I would not lie and claim that I have a new upgrade when I don't just to wipe out the demand for my competitor's product. If I cannot compete based on my price, my service or my technology - I should do something else.
If someone believes competition by ANY means is acceptable - they are the problem.
Most countries have laws against monopolies. The constant struggle of intellectual property is the grant of limited monopolies in exchange of improvement in science and the useful arts. The antitrust laws are designed to protect against the situation where someone gets so much power that they can direct the market just because they are such a dominant player. Monopolies create mediocre product and charge unreasonably high prices. Despite findings by lower courts that Microsoft is a monopolist, Microsoft always seems to avoid the fate of AT&T.
Does anyone remember AT&T? - no not the current one - the one that used to lease you your telephone (yep - they all looked alike) and charged a lot of money to make a telephone call. Yes, for those who are younger than 30, there used to be a day when there was basically one telephone company and a middle class family would plan to call grandma and grandpa once a month because of the expense of a long distance call. Finally, the government stepped in an broke up "Ma Bell" and what was the result. Lower telephone prices, better service, more options and even AT&T's stock holders made a killing. Much of the innovation in telecommunications would never have happened (or would have been much slower) if AT&T still had its monopoly.
Microsoft has a monopoly. Unless you are one of the relatively few who uses exclusively Apple or Linux, you probably use Microsoft's operating system several times a day. I prefer Windows, but I will not give Microsoft a fee pass if it uses its monopoly improperly. (Many thought open source would break Microsoft's monopoly - It just has to get through 235 patents to do so.)
There appears to be some pretty strong evidence that Microsoft has resorted to things such as programming its software to give false error messages when a competitor's software is loaded to gain a competitive advantage. Remember - they control the operating system - so that can do this to any competitor who runs on Windows. Likewise, it appears that Microsoft is not above using bogus release dates for upgrades to kill interest in competitor's products. There have also been numerous issues about whether its licensing practices and tying arrangements have been used to improperly exclude competition. A discussion of a few of the many claims against Microsoft are contained in Judge Benson's decisions in Caldera v. Microsoft (Order 1; Order 2).
Not only does Microsoft's monopoly give it the ability to crush potential competition, it also allows it to effectively use whatever technology it wants. If you are a small company and invent something cool, Microsoft can simply take it. IF you have the money to sue, you may win $100 million or more, as others have done. You may also go bankrupt. Eitherway, it is not a threat to Microsoft. They can either buy you or pay. (Rumor is they paid Caldera $275 million to make the case go away). Last I heard they have $60 billion in cash on the books.
I am all for competition and I am all for people making grundles of cash. I use and will keep using Microsoft's products. However, I also believe that capitalism only works when there is true competition and people play fair. No Chris, I would not create false error codes when my competitor's product attempts to load. I would not use a monopoly in one area to boost business another area - its illegal. I would not lie and claim that I have a new upgrade when I don't just to wipe out the demand for my competitor's product. If I cannot compete based on my price, my service or my technology - I should do something else.
If someone believes competition by ANY means is acceptable - they are the problem.
I don't think I said that competition by ANY means is acceptable. You should always do what is ethical and legal. I support legal action against MS if they have broken the law. However, what is "fair" and "ethical" is subjective.
In the case of MS, I see that they have a strong desire to protect their position. You would too if you were them.
Reply to this
Furthermore, I kind of resent the "love affair" comment. I just believe in giving credit where credit is due.
Reply to this
I really hope that what is ethical is not subjective.
Reply to this
@Rand:
Did you write the book on ethics? Of course what is ehtical and what is not ethical is subjective.
Reply to this
BTW, you say:
"An Essential Part of Capitalism is Playing Fair"
Says who? I believe that an essential part of capitalism is playing legal.
How do you define "fair"? Your definition of "fair" may be different that mine. That doesn't mean that my definition is unethical.
When I play - I play to win. Would you bring a gun to a knife fight just to be fair?
That's business...
Reply to this
No, I did not write the book on ethics. I try to read it periodically so I can periodically answer the question, am I honest/ethical in my dealings with others. I play to win as well. However, if I can't win fairly, I shouldn't be in the race. Fortunately, most races are merely qualifying heats and the people who win are the ones who follow the rules over the long term. Its a Karma kind of thing.
There are plenty of ways to make a lot of money if that is how you define winning. I could run a porn cite or run a brothel in Nevada. I could even right contracts which take advantage of retirees and legally take their life savings. But, in the end of the day, I want to be able to tell my wife and kids how I won.
People who "win" by being unethical are the only real losers.
Reply to this
"People who "win" by being unethical are the only real losers."
Agreed. I think we're on the same page - do you?
Reply to this
"People who "win" by being unethical are the only real losers."
Agreed. I think we're on the same page - do you?
Reply to this
Chris:
Agreed.
Reply to this
Microsoft has evolved into a very sophisticated and obviously very powerful entity. I’m sure that they have done things along the way that would be considered by some to be unethical in some arenas illegal. I’m a firm believer in the principle that you reap what you sew. There have been several cases were Microsoft has been held accountable for some practices that were considered illegal; I’m of the opinion though that Microsoft should not penalized for their success nor should they be broken up because of their success or market dominance.
Reply to this