Economists offer different views on Microsoft antitrust case
WASHINGTON (IDG) -- Microsoft's fate in its battle against the Department of Justice's accusations of anti-competitive behavior will be determined not by how much evidence is offered up or how well the company defends itself, but by how the letter of the law is interpreted, two experts said Thursday.
At the Upside Summit here, two professors of law and economics at Yale Law school -- one current and one former -- offered radically different conclusions about Microsoft's practices based on the same set of examples and applying the rules of antitrust.
Judge Robert Bork, the former Yale professor and current consultant to Microsoft competitor Netscape, offered three examples of what he called exclusionary behavior that render the company in violation of antitrust laws.
Professor George Priest, Bork's successor at Yale who spoke as an independent observer, countered that the actions in question could in no way be defined as predatory.
Bork said Microsoft's bundling of the Internet Explorer browser with the Windows operating system was exclusionary because it was designed to give Microsoft a foot in a market that the browser could not crack alone, by giving it away for free with Windows, the market-leading OS.
But Priest said the move could not be considered anti-competitive because Microsoft was answering consumers' needs -- if Internet Explorer was a more effective product than Netscape Navigator, then the consumer wins; and if Navigator was more effective, then consumers could use Navigator.
Bork then said Microsoft struck exclusionary agreements with PC makers that prevent them from interfering with the Windows logo that appears on a computer screen at boot. Microsoft worked this clause into its agreements with PC makers in an attempt to help solidify its mind share among users and to prevent Netscape's logo from appearing on the screen first, according to Bork.
Priest argued that such a clause cannot be considered a source of market power because both the PC makers and purchasers could easily remove the screen logo.
"It's not a serious barrier to competition" when a 12-year-old can delete the screen, Priest said.
Bork also pointed to Microsoft's agreements with Internet service providers and content providers, offering them prominent logo placement on the Windows desktop if they optimized their Web sites for Internet Explorer and used some Microsoft technology in building their Web sites. Bork emphasized his point by quoting e-mail messages of Microsoft officials that said top-tier content providers had begun using Microsoft's technology because they were forced to.
To this, Priest said that the issues are "legally moot" because such promotions are either unimportant or have already been dropped by Microsoft.
Neither speaker suggested how the government might deal with Microsoft if it wins the case, but both offered scenarios of what the post-trial industry would be like if Microsoft loses.
"Consumers will benefit from multiple sources of innovation," Bork said.
Priest replied that if Microsoft loses, the affects on broader issues will be "harmful for the future of the industry."
Cara Cunningham is an editor for InfoWorld.
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