Re: Definition of predatory pricing for airlines applicable to

[Gene Gaines <ggaines@generation.net>]

Brett,

Kudos.  You have said something important.

Gene Gaines
ggaines@generation.net


On Tue, 7 Apr 1998 18:47:22 -0400 (EDT), Brett Glass wrote:
> 
> 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