Definition of predatory pricing for airlines applicable to software

[Brett Glass <brett@lariat.org>]

The US Department of Transportation has just proposed 
new guidelines to define anti-competitive activities 
in the airline industry, where large airlines frequently
force smaller carriers out of "fortress hubs"
via predatory pricing strategies. Their criterion:
predatory pricing is taking place when the larger
airline forgoes more revenue than the smaller one
could have taken from it. (See

http://www.denverpost.com/business/biz0407b.htm

for the full story.)

What if the DoJ and the courts applied the same
criterion to software? For example, if Microsoft --
by giving Internet Explorer away for free instead of
selling it -- foregoes more revenue than Netscape
could have made selling its browser, then its giveaway
constitutes predatory pricing. (This is likely true,
as Microsoft used more employees to develop IE
than were working at Netscape altogether.)

The same standard could be applied to "sweetheart deals" 
with universities (for example, the recent deal with 
IU to convert the campus to Microsoft software), the 
free bundling of Outlook with Microsoft Office, and the 
giveaway of Outlook 98 to all comers.

The best thing about approaching the Microsoft problem
from this angle is that the DoJ would not have to "play
catch-up," redefining its strategy with every new product
or trend. Yes, there'd still be other sorts of exclusionary
practices to deal with, but since most of them really
center around bundling and giveaways, this would address
many of them as well. What do you think?

--Brett Glass