CATO Summary on Browser Innovation

[Charles Behney <charlesaugust@theriver.com>]

http://www.cato.org/pubs/pas/pa-296.html

Here is a warm-up on the most excellent debate, sponsored by the CATO
Institute. I'm glad these guys are above the fray being generated by the
Edelman pogrom.
They only want innovation. Whatever that means....

CAB


                          MICROSOFT AND THE BROWSER WARS
                                          Fit To Be Tied

                                           by Robert A. Levy(1)

                           Mr. Levy is Senior Fellow in Constitutional
Studies at the Cato Institute



                                           Executive Summary

        Do our antitrust laws still make sense -- if they ever did? That
is the question we should be debating while the courts decide whether
        Microsoft's browser is integrated with its operating system. At
the very least, antitrust law should be modified so that "tying
arrangements"
        are no longer prohibited.

          Today's software industry, where innovation proceeds at an
astonishing pace, stands in stark contrast to the sterile marketplace
that
                   would emerge if government were to butcher the
incentives that lead to new and improved products.

         In real markets, the impetus for growth comes from vigorous
exertions by producers struggling to establish market power. That power
is
          invariably short-lived -- unless government-created barriers,
arising out of special-interest legislation or misguided regulations,
prevent
                 competitors from entering the market. The obvious
remedy is for government to stop creating those barriers.

           Despite intense competition in the information technology
market, the Department of Justice (DOJ) persists in its crusade to force

           Microsoft to offer two versions of its Windows operating
system -- one with its internet browser, one without -- even if both are

                         identically priced. That option, according to
DOJ, would settle the current dispute.

          Yet if Microsoft can dispel DOJ's concerns by offering an
inferior product, at no reduction in price, which consumers will likely
reject,
          then the government's position is quite simply unfathomable.
In the end, consumers and taxpayers will foot the bill for this legal
fiasco.
                             More important, government micromanagement
will chill innovation.


snippage...