Chaos or Cartel? It's Not a Binary Choice-- Observations on Microsoft

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Chaos, choice, cartel. The success of the x86 market is largely due to taking the middle path between the two extremes. This has been done by organizing itself around a set of standards: architectural, and operational. The trick with standards is to make them strict enough for interoperability, loose enough for competitive diversity, and open enough to avoid proprietary monopoly. The standard, not the originator, is important.

The early history of the PC had IBM as the main standard. It thought it was more important than the standard and changed it to shut out all others, only to find itself on a proprietary limb. Even then, the platform proved bigger than its creator.

We often refer to Wintel machines as a synonym for x86 machines, but as
“IBM-compatible” shows, such a description is not permanent. AMD shows that one need not have Intel Inside to have a great Wintel machine. However, the same cannot now be said about the other part of “Wintel.”

Just as one does not require Intel, but Intel-compatibility, this market does not require Windows; but Windows-compatibility. Right now, there is only one source for that, unlike any other standard in the x86 world. While this is, it does not have to be.

There is theoretical and realistic choice. If I live fifty miles from my job without mass transit, I theoretically do not have to choose a car to get to work. I could ride a bicycle. I could jog. However, they are not realistic choices. For the average person, choosing between Windows and Linux or MacOS or OS/2 is not the same as choosing between Intel and AMD, or Adaptec and Tekram, or Quantum and Seagate, or even Word and Word Perfect. To say there is theoretical choice for most PC users is like telling me “Go buy a horse.”

The primary benefits to the x86 platform from Microsoft have come from the standards Microsoft have set. This does not mean they must be the sole providers anymore than Intel had to be the only CPU manufacturer. Would the x86 platform be better off if Intel sold all processors? If not, then why are we better off with an OS monopoly of that standard?

Why is it good to have competition under the various PC standards, but bad when it comes to the OS standard? Why should Microsoft, and only Microsoft be the exception to that competitive rule? If proprietary standards are good for the OS, why stop there? If it is good for the OS, why not the processor industry or the BIOS industry or any other part of the x86 industry? There is a company that takes this path. It is called Apple. Should this the new preferred role model?

A judge has ruled that Microsoft has pervasively abused its monopoly power. The general picture that emerges is not one of a champion of innovation but rather more like the Borg, assimilating useful parts from others and destroying that which they do not.

Must the x86 market pay the price of a such a Microsoft monopoly to benefit from an OS standard, or can we do better?

We can. As part of any judgment, make available the code that makes an OS Windows-compatible to all interested parties. License it, just as so much other technology, so as many other standards in the x86 world are licensed. Give competitors the chance to show their innovations while allowing customers to continue to use their current software. Should not those demanding the freedom to innovate welcome such a competition?
If not, why not?

One cannot rationally demand freedom to innovate to further the general interest while systematically using one’s power to deny others that freedom. So many preach the virtues of free enterprise until it applies to them.

Why should one trust a single company to always know and do the right thing any more than a single political party? Why is a monopoly of political power by a Communist party bad for the people, but a monopoly of computer power by Microsoft good? If many suspect political parties or government of acting in its own interests, why would a company be any different? Due to its nature, they would have much reason to be worse.

Is Microsoft the only company that can innovate? If innovation is so highly prized, why does it spend so much time and effort squelching the innovative efforts of others, either by buying them or by cowing others out of supporting them? Does anyone believe there would be less innovation if Microsoft somehow vanished from the face of the earth tomorrow?

Those who call for computer Darwinism neglect to point out that it is often not the fittest species, but the fattest bankroll or best power source that survives. If communism is an excessive form of government, monopoly is an excessive form of capitalism. Like most ideological extremes, they often lead to the same results. Both fear competition and try to stop it.

The benefits of free enterprise to a society depend on competition. It is only through competition that companies moderate their natural desire to make the most money from the least effort. Competition fuels innovation, and provides consumers with the best possible good at the least possible price. When competition ends, companies become slack. Consumers pay more and get less than they would otherwise.

It is government’s proper role to take a broader perspective than that of a company’s shareholders; to ensure that the public interest is considered as well as the private. Competition is good for the public interest, bad for private interest. Monopoly is the opposite.

What is good for Microsoft is not automatically good for America or the world. It would not be any more communistic to regulate a monopolistic Microsoft than it would be to regulate a monopolistic but privately owned power company or other utility, but we can achieve the same with less intrusion. To allow open access to Windows would be no different than allowing access to PCI or RDRAM or any of the other PC standards, or allowing companies like MCI or Sprint access to local phone lines. It would bolster competition, it would bolster free enterprise, it would bolster innovation.

Does this “punish” success? If any or all rules constitute “punishment,” then of course it does. We also punish successful murderers more than failures. Is that also unfair?

We punish natural monopolies by regulating them. We punish economically successful people or companies by taxing them more than poor people or companies. We do this because we as a society believe there are other values to be weighed besides unfettered success, and we regulate and tax even if the people or companies have not broken a single law. How much more so is the case when they have?

A society has the inherent right to set rules of behavior. This society has set rules Microsoft, at least in the opinion of one judge, has broken. Should that finding be upheld, is Microsoft not only above competition, but above the rule of law? If Microsoft does not like the rules set forth by a society, it can decide not to do business with that society, as did many businesses with apartheid South Africa. It can decide to vacate the premise, much as many Hong Kong corporations prior to the turnover of the territory to China. It can try to persuade those who make the laws to change them. But it does not have the right to consider itself a law onto itself, or consider its own success a good overriding all others.

– Edward Stroligo

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