One last tilt at the antitrust windmill

I've been obsessing on antitrust this week, which should come as no surprise as a lot of people much more important than me have been stuck on the subject since the Court of First Instance passed down its Microsoft decision Monday. One thing that bothers me about the decision, however, is the perception that market realities can be ignored just because a company is an ajudged monopoly.

I've been obsessing on antitrust this week, which should come as no surprise as a lot of people much more important than me have been stuck on the subject since the Court of First Instance passed down its Microsoft decision Monday. One thing that bothers me about the decision, however, is the perception that market realities can be ignored just because a company is an ajudged monopoly.

Take a point I made frequently in previous blogs, that Apple's business proposition would not exist if they weren't allowed to control what was integrated into Mac OS X.  In response, many claimed that that doesn't matter, as Apple is "not a monopoly" and "allowed" to have such a business model.

Of course, we wouldn't be having this discussion if Microsoft had followed the Apple business model from day one (a path that has more in common with the old school IBM model than with Microsoft). The fact that third parties can customize the Windows experience in the first place is a function of the fact that Microsoft DOESN'T often create hardware and software packages. They are, at essence, a software company.

But noting that Apple is "not a monopoly" misses my point entirely. Are we saying Microsoft's market share is such a problem that they aren't allowed to compete in the "computer as a TV set" space (and by that, I mean, computers that create a highly consistent experience more friendly to less technical users)? Never mind the API baseline that I as a developer like to harp on so much, as the EC is unlikely to insist that Microsoft rip out low-level features that competitors rely upon for their business. Is there no consumer value in creating consistent baseline of high-level functionality (as represented by user-facing applications) that every user of a product can expect exists whenever they approach a random Windows system? Would Apple be the same without iChat, Safari and QuickTime?

I accept that Microsoft should document protocols and make them available for licensing. Further, banning things like exclusive contracts which might foreclose markets before competitors ever got off the ground makes sense to me. Mitigating Microsoft's market power, in other words, should be the goal.

What the EC shouldn't do, however, is force Microsoft to do consumer-unfriendly things using Microsoft's dominant market share as endless justification. Antitrust policy is supposed to have a consumer-oriented point. Integrated UI features are a proven means by which to make life easy for non-technical users. That remains the case irrespective of whether Microsoft is judged a monopoly.

In Kurt Vonnegot's short story "Harrison Bergeron," good dancers are forced to wear lead weights so as not to put other dancers at an unfair advantage. Smart people must contend with headsets that generate loud pinging noises if the system detects that are being excessively clever. How is telling Microsoft that they aren't allowed to offer the same computer experience consistency out of the box as its competitors any different?

Microsoft's integrated features clearly have a distribution advantage. If distribution advantage is the cause of antitrust consternation, don't ban good dancing, prevent them from blocking competitors from entering the dance competition (borrowing an analogy from Vonnegut). Mitigate the distribution advantage by requiring, as an example, that Microsoft make it easy for end users to choose from a list of alternative UI features (they do that with integrated search in IE7). Don't prevent Microsoft from responding to competitive realities in a legitimate fashion, however. If alternatives are easy to find (something that is made that much easier through a global Internet), then new features can be viewed as raising the bar on user expectations of baseline functionality.

Perhaps it was the result of victory exuberance, but these statements by Neelie Kroes should give most people pause.

A market level of much less than 95 percent would be a way of measuring success," European Competition Commissioner Neelie Kroes told a news conference, referring to the market share of Microsoft's Windows operating system.

"You can't draw a line and say exactly 50 (percent) is correct, but a significant drop in market share is what we would like to see," she said.

Microsoft's market share isn't perpetuated at the end of a gun, and dictating a reduction in market share as a goal in itself seems a bit more than even European regulators have the power to manage. The market gave Microsoft its market share, not antitrust regulators, and ordering them to reduce their market share is a bit like me insisting that David Beckham cease to attract so much attention as a soccer player.

Market share is shaped by the market. It is perfectly acceptable to make sure those outcomes don't unfairly lock in results long term, but at the end of the day, there are reasons why one company or another achieves the market share it does. The EC can't change consumer reality, nor should it want to. Markets represent what people actually want and need, not what the experts think they should want and need.

Okay, enough about antitrust already...

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