Market responsibility of monopolies
weekly roundup When one company has a unique monopoly in the market, how does it balance the need to remain innovative and, at the same time, exhibit market responsibility?
Microsoft has some 80 to 90 percent share of the world's desktop market, which puts the software giant in an exclusive club where its members built and earned their monopolistic positions--unlike the incumbents in some telecom markets which may have started out as monopolies immediately after their industry was liberalized.
When Microsoft was founded in 1975, it employed no more than 10 staff. Today, with a global headcount of over 70,000 and revenues of some US$44.2 billion in its last fiscal year, it's a company many would love to hate.
The European Commission (EC) has for years been tussling with Microsoft over antitrust issues, one of which resulted in the software vendor being slapped with a US$357 million fine. The EC's beef revolves around Microsoft's inclusion of add-ons such as Windows Media Player and Internet Explorer, into the Windows OS which, the Commission says, diminishes the opportunity for third-party software makers to effectively sell their wares in the market.
Not everyone in the EC has an axe to grind though, and some have stepped up in Microsoft's defense. Roger Helmer, a member of the European Parliament, chided: "I really can't understand the Commission's position. It is as if they objected to Ford supplying cars with tyres since this reduces the market for retro-fitted tyres."
Supporters in Microsoft's camp often underscore the benefits that innovation from large market players can yield, such as the creation of jobs and intellectual property.
However, it doesn't always seem easy for some of these companies to meet this need to be innovative and, at the same time, avoid running foul with antitrust regulations--at least, it doesn't appear so from Microsoft's vantage point. Despite its multitude of experience in dealing with antitrust issues, the software maker has yet again incurred the EC's wrath with its upcoming Windows Vista.
Brad Smith, Microsoft's chief legal counsel, last year told ZDNet Asia that the company has a "high level of responsibility", and it tries to balance this with its efforts to "keep innovating" by engaging in dialog with government regulators worldwide on a regular basis.
But, from the looks of things, Microsoft obviously hasn't found the middle ground yet.
In other news headlines, find out what Hewlett-Packard is up to this week and why Symbian executives probably won't be seen buying a PC. Also, check out what 1 billion people in the region have been talking about and why some of them no longer need a currency converter when they transact online.