Testing our Assumptions about monopolies: “Microsoft Faces
Justice”
(a CBC documentary prepared in 1998; shown in class and not available in
the library however, The CBC has the program archived online.
http://tv.cbc.ca/national/pgminfo/microsoft/index.html
and you can see the documentary through real video and follow their good
links to other articles and overviews)
Overview of lecture:
1. Is Microsoft’s hegemony** “bad” for
the consumer?
2. Is Microsoft’s hegemony “bad” for the “good
of society”?
* what Reich (see article kit) calls “excessive stickiness”
** hegemony = when power and control is “taken for granted” (see
work lecture using Mosco’s terms)
extent of hegemony?: controls O.S. of 94% %
of all world’s personal computers;
how many users use WORD??
What else does MS control? company acquires wholly, or invests in range of
h-t companies--all areas of software + telecommunications markets + Internet
commerce + on-line media ventures (alliance with NBC for example)
+ 1/3 share in a low-orbit satellite system
+ online content of material: rights to Museum’s art works, photo archives,
etc.
+ games
ETC.
**********
1. Is Microsoft’s hegemony “bad” for
the consumer?
consumers should be grateful: “you click a button, and it’s so
easy...how could there be anything wrong with that ”?
“ you ’re getting software for free”
2. Is Microsoft’s hegemony “bad” for our society?
If so, why? (“ethics is about building for the common good.”)
***********
1. Reasons against any monopoly:
* “distorts competition” – drives
other firms out of market
* company gets complacent: could make bad R and D decisions
* controls the range of products for consumers
2. What’s different about this anti-trust
suit?
- there have been other govt. anti-trust suits
in U.S. (e.g., Standard Oil)
- but antitrust laws tied to neoclassical
industrial economics; may not be as applicable to digital world:
how to account for the phenomena of “increasing
returns” ?
(in video, economist called it the “Matthew effect”--”to
him that hath, shall be given”)
-“ in high-tech industries, it is more valuable to users if everyone
uses it.
- everyone adopts to an operating system standard.
- the larger the network, the more incentive for the next person to join.
- customers seek consistency and compatibility.
(However, this is not the view that Mosco takes in “Cyber-Monopoly:
A web of Techno-Myths”: “technology doesn’t change
everything…(see his last paragraph)
Troubles when a h-t product locks up the market...competitor
can’t enter.”
- see Reich’s use of his company “Electrosoft” in “Desperately
Seeking Stickiness”:“what begins as a standard can end up as a
barrier to innovation” (p. 83 in kit)
How establish standards without monopoly?
- couldn’t have mass production without “standards” (nuts
/ wheel sizes, etc.)
But question is: who sets the standards?
- early days of Internet: open and free standards emerged
(Berners-Lee) to let different types of computer networks talk with
one another.
(keyboard: no one has to pay a license fee to manufacture the QWERTY keyboard)
MS’s history has been to create, market and
then manipulate standards.
From operating system --> to “Office suites” to ‘browser” bundled
with computers
--> now what’s at stake is whether Microsoft can bundle Internet Explorer
for “free”.
Access to Internet --the real concern: Who controls
the Internet?
6. Beyond the legal issues, there is a consideration
of ethics in the whole field:
Mitch Kapor’s* conclusion:
...The practice of hypercompetition by MS itself makes
many more gentle spirits, myself included, fundamentally uneasy in
our souls. Whether the ultra-aggressive business tactics of MS are
found to be in violation of antitrust laws or not still leaves open
questions as to what extent, or in what combination, considered in
a moral or ethical context, MS represents the best of ourselves or
the worst. For one as committed as I am to the free-enterprise system,
is ruthlessness in business to be praised, tolerated or transcended?
That, is the most important question....”
(*founder of Lotus Corporation; now chairman of the
Electronic Frontier Foundation--non-profit public interest group) |
