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Regulation and anti-trust is rarely about consumer protection. I was thinking about the old anti-trust suit brought against Microsoft over a decade ago. The claim went something like this: Microsoft developed its own web browser (Internet Explorer) that it packaged for “free” with its windows operating system software. Most hardware devices contracted with Microsoft to preinstall windows on their machines. Thus, most purchasers of computers already had this internet exploring software on it. This was unfair to the competition (Netscape) because users would have little incentive to go out and purchase Netscape or some other browser when Microsoft was giving theirs away AND had the built in advantage of having their software bundled with Windows software.

My point here is not to debate whether Microsoft’s acts were bad for consumers (I argue that they are not, especially if you understand the dynamic nature of competition), but to merely ask another question. Couldn’t the very same argument be made about ANY program or function that Microsoft’s Windows software contained? For example, on every version of windows I have ever had, there is always a “free” calculator that I use extensively. Heck there is always a free version of solitaire. So why is there not a major anti-trust case brought against them on behalf of the proprietary calculator software developers? Or really upset game developers? No one will ever pay money to buy a computer game if Microsoft just “gives” theirs away and bundles it into the devices you are buying.

5 Responses to “Big Bad Browser Wars”

  1. Greg V. says:

    Competition has certainly made web browsers a lot better. Internet Explorer is terrible now and most users now rely on Firefox and Google Chrome for web browsing, which are both free. To bad for Netscape that they took the big bad wolf to court rather than trying to develop a way to successfully compete.

  2. ckr says:

    You certainly got this one right. I always felt like screaming: STOP THEM BEFORE THEY GIVE MORE AWAY! It’s like that Burger King commercial where the King’s largess is out of control.

    This MS suit wasn’t about protecting consumers but protecting competitors. The antitrust suit was obviously incited Microsoft’s envious competitors (Oracle, Sun, IBM, etc.) who merely used Netscape as the ‘poster-child in the wheel-chair.’ Shame on the Clinton DOJ for falling for it. What were they thinking? Who was that prosecutor? Bois or something like that? Did anyone ever take a peek at his stock portfolio?

    I recall with a sense of mirth the ‘remedies’ being bandied about at the time:
    1) order MS to unbundle the browser from the OS,
    2) split up Microsoft into two or more companies,
    3) force Microsoft to give away their proprietary source code,
    4) (and of course everyone’s favorite ) levy a huge fine against MS (to go to whom?).

    Now what exactly has happened after the rapacious Microsoft essentially ‘got away with it’ and the consumers were left to the mercies of the free market? Apple has found renewed vigor in the desktop market and its market cap now rivals MS (who would have believed that 10 years ago)? And on the new emerging dominant platform, i.e. mobile devices, Microsoft is struggling to stay relevant in a market dominated by Google and Apple. Consumers seem to be doing just fine.

  3. Rod says:

    After losing two successive hard drives to viruses, I switched operating systems and now use Ubuntu, which is Swahili for “Bill Gates Sucks.” It is a linux-based system and is free. I use Firefox for my browser.

    Even though my computer guy says Ubuntu is user-friendly, when you want to install a printer driver for an old Brother laserjet fax/printer, it is impossible for an old guy like me, and I used to be the company expert on a Xenix operating system.

  4. Harry says:

    In Econ 103 in the Sixties, topic A in studying prices, supply, and demand was the huge gap between efficient prices and monopolistic prices, and their close cousin, oligopolistic prices. These graphs were supposed to illustrate two things.

    The first was to justify how much our well-being was due to the Progressives’ rescuing us from predators like Jay Gould, J.D. Rockefeller, and Andrew Carnegie.

    The second was to impress on us the need for some of us, who would administer the future, the need to be watchful of future monopolistic crimes. All of this doctrine was swallowed whole without a whimper.

    This was a time when there were fewer gasoline marketers than there are today — few enough for the political class to complain that they constituted an oligopoly, which implied they had profits in excess of what some thought to be “fair”.

    Yet on the road between Hartford and New Haven there were gas wars. It took just two or three hungry competitors to demolish the oligopolistic theory being taught at Yale, Weslyean, and Trinity.

    How come that big gap in the graph never changed, and how come the obsession with antitrust continues?

    Part of the answer is that there is a whole industry dedicated to quantify, then magnify, and then to litigate over that gap, which always never had any values in dollars on the X axis.

    Could it be that twentieth-century notions about anti-trust are wrong?

    Another question: if concentration of economic power can be bad, how come there is so little talk about public employee unions? How about unions that represent faculty at state universities?

    That last question is asked with full appreciation for academic freedom, which I am sure everyone in the academic community agrees, be they employed by a state or free institution.

  5. Rod says:

    A quick note about my operating system, Ubuntu. After I made a post here about it, my computer crashed, and I had to reinstall Ubuntu. You get what you pay for.

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