Gateway to Think Tanks
来源类型 | Article |
规范类型 | 评论 |
Getting the Facts Straight on Microsoft | |
Albert L. Nichols | |
发表日期 | 2001-05-01 |
出版年 | 2001 |
语种 | 英语 |
摘要 | In his recent Policy Matters (“Microsoft and the Antitrust Laws: Old-Fashioned Problems and a New Economy Company”), Irwin Stelzer asserts that the district court’s branding of Microsoft as an abusive monopolist is “nothing more than an unremarkable step down a well-trodden path to the preservation of a competitive economy.” In reaching his conclusion, however, Stelzer appears to have paid little attention to the facts of this case or of the denouement of earlier proceedings against Microsoft. His key claim—that Microsoft attained its leading position in PC operating systems illegally—has never been asserted by the government, despite a decade of near-continuous investigation and three rounds in court. Stelzer argues that Microsoft could not have achieved its leading position by legitimate means because the company found it “necessary to prevent PC manufacturers from incorporating other operating systems in its [sic] machines.” Yet that was never part of the government’s case. Indeed, in 1995, the Department of Justice noted that “[n]either the government nor the amici [three anonymous competitors of Microsoft who filed a brief urging a breakup] contend that Microsoft achieved monopoly power unlawfully.” Nor did the Department or any of its five expert economists in the most recent proceedings claim that Microsoft attained its position by illegitimate means. Instead, they asserted that Microsoft has a monopoly because computer buyers demand Windows so that they can run the widest possible variety of software applications. Stelzer may be alluding to contracts between Microsoft and PC manufacturers in the early 1990s that some claimed put other PC operating system suppliers at a disadvantage. But no knowledgeable observer believes those contracts had much impact on Microsoft’s fortunes. In his declaration for the Department of Justice, the Nobel Prize winning economist Kenneth Arrow testified that the licensing practices in question “made only a minor contribution to the growth of Microsoft’s installed base.” And the offending provisions were removed in 1994 under the terms of a consent decree between Microsoft and the Justice Department. Without benefit of the supposedly anticompetitive contract terms, Microsoft doubled the number of operating systems it sold annually over the next two years. For the record, though, consider the two issues in dispute back in 1994. The government objected to “minimum commitments”–mechanisms for implementing quantity discounts. The larger the minimum number of copies of software a computer maker agreed to buy, the lower the price—hardly an unusual concept in the software business (or many others). The second problematic contract provision, “per-processor licenses,” gave manufacturers an additional discount if they agreed to install Microsoft’s operating systems on entire lines of computers. But the recommended discount was small ($0.50 per copy by the time the Department of Justice began its investigation) and manufacturers could, and often did, reject the inducement. Stelzer also repeats the government’s more recent claim that Microsoft “tied” its Web browser to its operating system. The government started out arguing that Microsoft had acted anticompetitively by including Internet Explorer (IE) with Windows at no separate charge. It asked the court to order Microsoft to offer PC manufacturers a browserless version of Windows. Yet virtually all operating systems have included Web browsing software as part of the package for years; arch-rival IBM beat Microsoft to the punch by more than half a year, incorporating its browser into OS/2 in 1995. In any event, integrating the browser never limited the ability of PC manufacturers to include another browser with new computers, and many did so. Nor did it prevent Netscape from distributing 160 million copies of Navigator in 1998 alone. Microsoft never made it difficult to run Navigator with Windows. Take it from the expert: Netscape’s CEO, Jim Barksdale, testified that Navigator was “perfectly interoperable” with Windows 98. Those facts, coupled with the June 1998 ruling of the DC Circuit Court that Microsoft had legitimately integrated IE into Windows, and thus had not violated the consent decree’s prohibition on tying, forced the government to change its tying theory. In the end, the government admitted that it was OK to distribute IE free and to integrate its functions into Windows so that other software developers could use them in their own programs. And it was OK for Microsoft to spend lots of money improving and marketing the browsing features in its platform. The antitrust violation occurred only when Microsoft refused to let computer manufacturers hide the presence of IE from customers in order to encourage them to use Netscape Navigator. That’s like saying that it’s OK for a car manufacturer to include a “free” radio in every new car, but must allow dealers to remove the knobs and faceplate in order to encourage customers to consider the purchase of an after-market stereo. Such a policy probably would appeal to after-market radio vendors, but it’s hard to see how consumers would benefit. The government was reduced to arguing that letting computer manufacturers hide IE would eliminate the dreaded icon barrier to entry. It claimed that Microsoft foreclosed Netscape from the Windows desktop because computer manufacturers were afraid that customers would be confused when confronted with icons for two different browsers. In fact, the two browsers easily coexist, as millions of users who choose to install both can testify. And, as anyone who has bought a new computer targeted at the home market in the last five years knows, computer manufacturers are happy to clutter the desktop with icons if they think it will increase sales or promotional payments from vendors. Judge Jackson admitted that if he accepted the DC Circuit’s earlier ruling that Microsoft’s integration of IE was legitimate, he could not find Microsoft guilty of tying. So he took refuge in an older series of cases that had nothing to do with technological integration–particularly Jefferson Parish, which involved a hospital that required all patients having surgery in its facilities to buy the services of its in-house anesthesiologists. But Microsoft did not force customers to use IE. It’s as if the Jefferson Parish Hospital had added anesthesiology to its standard surgical services (covered by a single fee), but given patients the option of bringing in an outside anesthesiologist. Stelzer also raises the ancient claim (circa 1990) that Microsoft denies access to the nuts and bolts of Windows, which is “crucial for firms that compete with it in other product markets.” But both the FTC and the Justice Department investigated those claims, and neither found any basis for bringing charges. In the current case, the issue came up only in one narrow context. Netscape complained that Microsoft was unable to give it a workable version of one of the new features in Windows 95 as soon as Netscape wanted. That function was one that Microsoft had trouble debugging in time to include in the final release of Windows 95 and one that Netscape and other applications software vendors had provided themselves to run on earlier versions of Windows–hardly the stuff of a dark conspiracy to deprive competitors of “crucial” information. Ironically, Microsoft is widely recognized as providing far more support to outside application developers than any other maker of operating systems. Indeed, one of the keys to Microsoft’s success has been its heavy investment in making it easier for developers to write Windows applications software. Microsoft devotes about 2,000 employees and spends more than $600 million per year on support for outside developers. Long before a new operating system version is released, developers (including direct competitors of Microsoft’s own applications software) can download each daily “build” to test their applications. Measured by revenues, about 80 percent of the software that runs on Windows is from companies other than Microsoft. Finally, Stelzer lauds the radical breakup ordered by Judge Jackson (but now stayed pending appeal) as both commensurate with the offense and pleasingly free of the need for ongoing judicial oversight. But even if one believes that Microsoft committed grave offenses, the proposed breakup has nothing to do with the case that was tried. It would leave the supposed source of evil–Microsoft’s alleged monopoly in operating systems–intact. Moreover, as Paul Krugman of Princeton and other independent economists have pointed out, standard economic analysis implies that separating ownership of the operating system from ownership of applications that run on it is likely to raise prices to consumers. Neither company would have an incentive to restrain its prices in order to sell more of the other’s complementary product. With all of the discussion of Microsoft’s alleged transgressions and their impact on its rivals, it is easy to lose sight of the intended beneficiaries of antitrust law. In late 1995, before Microsoft began to compete vigorously with Netscape, consumers who wanted a modern Web browser had only one real choice–Netscape Navigator. Netscape made Navigator free for many individual users, but required some individuals and all businesses to pay for the browser, at list prices ranging from $39–$79. Because of Netscape’s dominance, many Web sites used new features that only Navigator users could access. Now fast forward to mid-2000, when Judge Jackson issued his breakup order after almost five years of allegedly anticompetitive actions by Microsoft. Navigator was greatly improved. But according to the vast majority of reviewers, IE was even better–the consequence, no doubt, of the $100 million per year that Microsoft had invested in the software. Both browsers were free, and PC manufacturers still paid less than $65, on average, for a copy of Windows–an amazing bargain in light of the complexity of the software and the prices of major applications. IE’s share of users had surpassed Navigator’s, though it still had not reached the dominant level achieved by Netscape in late 1995. Both browsers had such large user bases that most Web sites followed open industry standards so that their content was accessible to users of either. And Netscape was hardly destitute, having been acquired by AOL in the spring of 1999 for $10 billion in stock. Moreover, AOL/Netscape had entered into a close alliance with Sun, the leading manufacturer of the high-powered computers that run the largest Web sites and a self-declared enemy of Microsoft. The Web itself is emerging as the preferred platform for new software development, with many competitors, including Microsoft, Sun, Oracle, AOL-Time Warner, and IBM. Microsoft has announced its .Net vision for the future, but many observers are skeptical that it will succeed, and Sun’s Java software platform continues to grow in popularity in its new role as a tool for writing applications that run on Web servers. It is thus hard to imagine how consumers would be better off today if Microsoft had competed less vigorously against Netscape and others. Do Microsoft’s critics really think the world would be a better place if software companies charged for browsers? Or that allowing PC manufacturers to hide IE on new machines would have made a significant difference in the outcome in the browser wars? And whatever one thinks of Microsoft’s past behavior, there is no evidence that consumers would now benefit from the unprecedented break-up of one of America’s most successful companies. Albert Nichols is a vice president of National Economic Research Associates (NERA) and a consultant to Microsoft. |
主题 | Economics |
标签 | competition ; microsoft |
URL | https://www.aei.org/articles/getting-the-facts-straight-on-microsoft/ |
来源智库 | American Enterprise Institute (United States) |
资源类型 | 智库出版物 |
条目标识符 | http://119.78.100.153/handle/2XGU8XDN/237379 |
推荐引用方式 GB/T 7714 | Albert L. Nichols. Getting the Facts Straight on Microsoft. 2001. |
条目包含的文件 | 条目无相关文件。 |
个性服务 |
推荐该条目 |
保存到收藏夹 |
导出为Endnote文件 |
谷歌学术 |
谷歌学术中相似的文章 |
[Albert L. Nichols]的文章 |
百度学术 |
百度学术中相似的文章 |
[Albert L. Nichols]的文章 |
必应学术 |
必应学术中相似的文章 |
[Albert L. Nichols]的文章 |
相关权益政策 |
暂无数据 |
收藏/分享 |
除非特别说明,本系统中所有内容都受版权保护,并保留所有权利。