Ironic? Your last
paragraph says it is ironic that Sun is now going after the very type
of cross-market bundling that Microsoft was supposedly found guilty of
doing. The real irony is
that anyone seriously thought the Sun, Oracle, DoJ effort against
Microsoft was based on some principle of opposing
Oracle and the others just wanted to freeze the competition while they
played "catch up".
The odd thing about our monopoly law is that some actions are
illegal for monopolies that are not illegal for their competitors.
Further, you don't know you're a monopoly until after your
competitors fail and leave you the sole winner in a market.
Then your competitors bring in the DoJ to "freeze"
your activity in the market (e.g. this one of bundling middleware with
other software and hardware) while they redouble their efforts to
Integration (of markets, hardware, software, distribution, etc.) is
the engine of progress. It
reduces cost and increases standardization, improving productivity.
If carried too far, however, it leads to monopoly and all the
abuses associated with unbridled power.
Apparently our government long ago stumbled into a strange way to
keep the pot stirring, allowing integration but preventing it from
going too far: retroactively
declare any big winner a "monopoly" and dismember it!
Iím reminded of the teachings of Machiavelli who told the
Prince to keep shifting power back and forth between the provinces and
the capitol, thus forever preventing any possible adversary from
gaining sufficient power to threaten the kingdom.
It all sounds very un-American, but quite effective.
I approve of the DoJ activities to the degree they stir the pot of
competition and creativity.
(Though I don't believe it was a necessary expenditure of scarce DoJ
funds given the natural volatility of this market.) To
the degree the proponents of the DoJ position demonize Microsoft and
claim any type of principled "high-ground", I'm compelled to
call them liars or fools. Neither
side is being honest with the citizenry when they claim any moral
superiority in light of the overall reality of this situation.
This article about Sun and Oracle bundling products is a classic
example demonstrating my point.
I was always under the impression that laws could not be
retro-active: e.g. if I
drove a School Bus in Virginia at age 18 because that was legal then,
I can't be prosecuted now that there is a new law that says you have
to be 21. The antitrust
laws, because of their retroactive nature, are most likely
unconstitutional, or at least should be.
But they are valuable to society on the whole in the strange
way I described above.
I'm willing to live with them so long as the citizens recognize
that a "crime" under these laws depend upon the actions of
your competitors, not just yourself.
As such, a "crime" in this arena is certainly does not carry
the burden of guilt that should follow a conscious effort to do
something illegal. I could give a long list of examples
from the history of Microsoft alone where it appeared someone was
about to do to Microsoft what Microsoft had previously done to
IBM: blowing by them with a new idea.
(Talking of irony, would it have been possible for Microsoft to
escape from under the thumb of the monopolistic IBM if, at the time,
IBM wasn't itself under dismemberment pressure from the DoJ?) Unfortunately,
Microsoft's competitors often failed to deliver on their promises,
succeeding only in giving Microsoft an idea and a new market to enter.
If the competitors had been successful, the market would have
been shared and there would have been no "crime".
Because the competitor failed, MS became a "monopoly"
retroactively in the eyes of at least one judge.
A more devious, more confident, less paranoid Microsoft would have
divided the market with their competitors, ensuring protection from
the claim of "monopoly".
Of course, then they would have had to avoid openly consorting
with their competitors, but that is clearly not hard to do.
Simply look at the airline industry!
The result could have been higher profits for all involved and
higher costs to consumers through less standardization and less
amortization of fixed costs (development, etc.)
The result might also have been lower profits and prices if the
competitors could discover hidden economies or invent new solutions.
We'll never know which of these two possible outcomes
represents reality because we cannot ever know what "could have
been invented only if".
The road forks in front of every businessman and investor every
day. No "law"
can before-the-fact assure that the movement down one path or another
does not lead to an after-the-fact monopoly or creative discovery.
So to summarize: the
only ironic thing is that so many "citizens" don't
understand what is going on around them every day.
Comments are always welcome. Corrections, additions and
comments from readers will lead to future updates of this article.
Write me! Your opinions may well be published in a future
update. Thanks in advance!