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Re: bundling (again)
Doug,
Doug Masson wrote:
>
> So have we figured out what constitutes bundling? When does a single
> product become a combination of products? And, if someone figures a way to
> split a product, does the former product become bundled products? Or is it
> like the philosophical notion of an atom, incapable of being split without
> becoming something else?
I think if you try to answer questions like these in the abstract you
will have problems.
You are better off evaluating the practice of combining products
(usually only works for a monopolist) for the purpose of preventing
someone else from selling their product.
Just assume you have products A and B. Your competitor sells a
competitive product to B.
Now you can ask your questions:
1. "When does a single product become a combination of products?"
Well. Maybe they never do.
Do you consider a Ford truck a single product? Most people would say
"yes". It may have options like rear bumpers and a pick-up bed but it
is basically a single product. But is it? What about the engine? Can
you buy a Ford engine without the truck? As a replacement you sure can
because they wear out. But, you can also buy a "Ford Industrial Engine"
which is basically the same thing for installation into any device you
happen to have that needs an internal combustion engine as a power
source. So is Ford "bundling" when they sell you a pick-up?
The answer is that it does not matter. You can say "they are" or you
can say "they are not". It really does not matter. The question is
"Why does it not matter?".
The most direct answer to that is that it does not matter simply because
they do not make Ford Pickups with engines in order to preclude a
competitor from making and selling competitive industrial engines. Do
other companies sell industrial engines? Of course they do. The
Cummings Diesel is an good example for this evaluation. The Cummings
Diesel is available as an industrial engine for many applications AND as
a diesel engine in your pickup (I believe Dodge and Chevy offer it as an
option).
Now if Ford wanted to preclude Cummings from selling their diesel
engines they could think they were doing that when they sell all their
Ford pickups with Ford engines, but of course that would not stop
Cummings from selling their engines separately or selling them wholesale
to Dodge or Chevy, right? And, this is where you have to realize that
few if any of the "things" (including bundling) that monopolists could
engage in with the purpose of precluding competitors even work as
intended unless monopoly power in fact exists. Ford can put an engine
in their pickups (whether or not it really needs one) but doing so is
not going to preclude Cummings from the market.
Does the fact that the company doing the packaging (bundling) is a
monopolist or not matter? The answer is absolutely. If you assume that
diesel engines could only be used to motorize pickups and only Ford made
pickups, then the above scenario would have a very different outcome.
Of course, the pickup market does not have that character nor can
engines only be used to motorize pickups.
The direct answer to this question is "always". A single product is
always a combination of products. That may not be true in all product
categories but in automobiles and computer software it is absolutely
true. There is only a question of packaging that various companies
engage in to satisfy consumer demand.
But, you must keep in mind the fact that a monopolist NEVER needs to
package to satisfy consumer demand. It is almost by definition that a
monopolist can unilaterally decide packaging (& pricing) and just ignore
consumer demand. This is why when Microsoft Corporation claims to be
only responding to consumer demand in their "bundling" of products they
only prove themselves to be either completely ignorant of basic
economics or highly deceitful. Bill Gates may have flunked out of
college but he can hire smart people. So it is not ignorance. It is
only deceit. And, deceit used to get your money is fraud. If you think
that 100 million downloads of Navigator is not proof positive of
consumer demand for a product you need a brain transplant because the
one you have is not working properly.
Would the current case be different if Gates instead of Gore invented
the internet and the browser? What if Microsoft added browser
capability to the OS simply because of some stupid insight or idea they
mustered up? Maybe on one of their "retreats" someone blurted out the
idea for the first time? What if Windows just gained the ability to
browse the internet? Would that be different? Would it make a
difference in the antitrust case? Well. It would or at least it
might. But it depends. If Windows just gained that ability (i.e.
Andreesen and Barksdale did not exist or were doing other things) would
it be different? But, the real answer here ties back into the question
first asked above. When does a single product become a combination of
products? In the scenario raised here you might be able to answer the
question. Windows would become a combination of products when and if
Microsoft (or perhaps someone else) would write a browser for a system
other than Windows. Windows would also become a combination of
products when Microsoft secures a trademark for the internet
technologies which in fact they did AFTER the antitrust suit was under
way.
In simple terms Microsoft has forced Windows 98 to be a combination of
products by securing two different trademarks (Windows and Internet
Explorer). As you recall the Internet Explorer trademark was actually
owned by another company until just recently. Now you can have
trademarks for subsystems within Windows. I believe their disc
compression has a few although I am not sure they are actually
registered trademarks. They do have tradenames. But, in NT, the disc
compression does not have a tradename.
Microsoft has also forced Windows to be a combination of products by
marketing and distributing IE totally independent and separate from any
OS. When you write a bode of code that runs on multiple operating
systems and in fact distribute that as such any idiot with any technical
training at all MUST IN FACT CONCLUDE that the body of code is an
application or subsystem. Microsoft just lies about that hoping to fool
enough consumers. But it is only "fraud". Even if IE originated as a
feature of Windows (say 95) it ceased to be so when IE was distributed
for Solaris, HP-UX, the Mac, WebTV, NT, Windows 95, etc. Once Microsoft
offered the feature outside of a single OS it became an application or
subsystem and no longer could be possibly considered OS code. You can
still lie about it all you want. But, when code is moved to other
systems it is no longer operating system code. It might be OS patches.
It might be a subsystem. It might be an application. It may fit a
number of different characterizations. But, it is not OS code anymore.
And, you do not be so silly as to claim that if Microsoft writes the
code it is OS code but if the same code is written by someone else then
it is not OS code. No matter what I or anyone may write (i.e. patches,
subsystems, applications or whatever) it does not become the OS as
defined by the "Windows" trademark once it is no longer tied to a single
OS.
Microsoft did not even want internet technologies to be provided by the
OS. That would be stupid and they have acknowledged the same. In fact,
there is no reason what so ever for Microsoft to want that to be the
case save for a fabricated defense for antitrust violations. And, of
course, a fraudulent campaign levied against consumers.
Why is it so stupid for the OS to provide those capabilities? Well.
Look at what Microsoft is doing. First they put IE on many platforms
because consumers (many but NOT all) want that application and not
everyone runs Windows 95. Secondly, the product cycle and product
advancement is very different for internet technologies. Most consumers
who run Windows just do not need to go past Windows 95. So Microsoft
must make IE an application or wait until current customers buy their
next computer or upgrade their OS. Microsoft knows for a fact that
waiting until consumers upgrade their OS or buy a new machine is a sure
way to never be successful in a fast moving market. So IE is on a
different product cycle and distribution system. Just witness the
changes since Windows 98 was introduced (i.e. IE 5.0, IE 5.5, etc.).
And, of course IE 5 and IE 5.5 have nothing to do with Windows 98 except
being an application. But, it is also an application for a number of
other operating systems.
Lying about the technical realities is still lying. Perjury about the
technical realities is still perjury.
Question 2: "And, if someone figures a way to split a product, does the
former product become bundled products?"
Well. In the browser case, IE was always a separate product and remains
so today. It has to remain that way in order for it to work on other
platforms. If IE ceases to be available for the Mac and Solaris its
character could change. But for as long as IE runs on another OS, it
simply IS NOT an OS. (Yes. Some operating systems do run other
operating systems. The Windows 3.1 GUI does run on OS/2. And, recently
BeOS announced that the BeOS, or a part of it, will be offered to run in
Windows. But, no one is claiming that IE on Solaris is one OS running
on another OS.)
The above question can be addressed better by considering a
spellchecking capability for a word processor. If you can separate out
the spell checker in WordPerfect does it make WordPerfect a bundled
product? The answer may be technically "yes". However, the answer may
not be important unless some other company is being precluded from the
marketplace.
The question used the "B" word. But, from a lay standpoint you can
substitute "packaged" or "suite" if you want. The "B" word has a bad
legal connotation and that is why Bill Gates and his PR boys removed it
from their vocabulary. (Of course, they also ignore the common and
accepted use of all other industry related terms that tend to explain
what their illegal market plan is up to.)
A product can be correctly labeled as "bundled" or "tied" when that act
is used to preclude competitors from the marketplace. It is not a
technical question at all. Anyone can split any product into a million
pieces if they so choose. And, anyone can combine any products into a
single product if they so choose. Software is infinitely malleable. So
the answer to this question must be based upon the fact that anyone and
everyone can split or combine products at will. Because of that
capability (which does not exist in most products), it can not be the
determining factor for any other consideration. The entire Microsoft
product line can be made or blended in with the OS if Microsoft just
wants to spend the time and money to do it. Of course, Microsoft would
just lie about it and proceed to distribute applications upon their own
cycle just as they have done with IE.
Software's malleability does not give Microsoft Corporation the right to
opening lie about product boundaries, commit perjury in court with their
sworn testimony and fraud in their advertisements while using very
different boundaries in product development and distribution.
However, the question above can be answered directly. If Microsoft
offers Word, Excell and Access only as a Pro suite and not separately,
they are "bundling" products. But, they do not do that, right? They
sell Word, Excell and Access all as separate products. So. Suites are
not the same as illegal bundles as long as the individual products are
also sold separately. IE is. The monopoly product, the consumer OS is
NOT. IE may be available freely because the market for internet
technologies is completely ruined by Microsoft and that affects IE,
Opera and Navigator. A large number of related products (internet
technologies) are also ruined by Microsoft Corporation. Media players
is one example. There are potentially hundreds of product categories
that are pre-emptively runined by Microsoft Corporation and its illegal
acts. The judge himself made special note of this fact in his findings.
Question 3: "Or is it like the philosophical notion of an atom,
incapable of being split without becoming something else?"
This question was really answered above. "Software is infinitely
malleable." This simply means that there are NO technical reasons for
any product configurations. Product configurations are ALL based upon
marketing considerations.
This is why it is so deceitful for a greedy monopolist to lie about why
certain products are packaged the way they are.
This is why is is so deceitful for a economist hired by Microsoft to lie
about the economic concepts in play for the industry.
Any idiot who suggests that a software product needs to be packaged this
way or that way is a liar. They are also highly deceitful and a fraud.
That is simply true due to the very nature of computer software.
Only a highly deceitful and fraudulent monopolist would suggest that
their product configurations are based upon consumers demand while at
the same time submitting evidence in court that over 100,000,000
consumers think to the contrary. They even made a special deliberate
effort to buttress the credability of their evidence regarding the
hundred million copies. Microsoft Corporation has proven that it
deliberately ignores consumers interests in its product packaging
decisions. There is no other conclusion you can reach. Read the
evidence.
In summary, you can not decide "bundling" issues in the abstract. You
must only do so in context.
You have a company with products A and B. And, you have competitors
with products that compete with B only.
I know that Microsoft wants you to all think that antitrust issues can
be resolved in the abstract or while discussing facts in other
industries. Or, for that matter, discussing the general computer
software industry but ignoring the specific markets that give Microsoft
Corporation it's monopoly power. But, a fraud is easy to detect. Bill
Gates is a fraud. Allchin is a fraud. And, that Holbert their COO is
also a fraud. And, I must say that the Microsoft lawyers also
intentionally misrepresent the law so as to confuse and fool the
technical press and consumers.
But, the bundling issue must be evaluated in context. Can a monopolist
selling products A and B preclude a competitor from offering a product
in competition with B? The simple answer is yes if monopoly power does
exist in product A and the monopolist bundles or ties the A product with
B. Then it is a done deal. All consumers must pay the monopolist for B
and competitors are unable to sell their products.
Focus upon the ability of Microsoft to preclude competition.
>
> If we've already figured that part out, then I guess we can begin our work
> ridding the world of the agonizing question of what constitutes
> "fairness".
Are you planning on beating consumers into submission? This is not an
agonizing question at all.
All consumers agree that it is fair when they can buy the products "they
decide they need" and do not have to buy the products "they decide they
do not need". Have you ever purchased anything?
What is so hard to understand about that?
Remember the $100 deal? If a single person on this list thinks that any
one consumer does not want to pick and choose the products they buy,
please speak up. If you want to convince anyone else of your
"conviction" in that regard you can send your $100. I'll UPS your
product.
But, if you recall, a number on list list specifically asked "what was
in the box?". Obviously, those who ask that question demand to exersize
"their right to pick and choose". Everyone does.
However, a monopolist can force you to buy products dispite your
insistance upon picking and choosing your products. That is why
Microsoft Corporation can and does force hundreds of millions to
purchase Internet Explorer and not one person is 'forced' to send me
their $100. That is the difference between the power I have to sell
software and the power that the monopolist, Microsoft Corporation has.
Neither the quality nor the price is even relevant. You want more
proof? Read the article on the "bubblegum deal". Read the article on
the "jawbreaker deal". In both of those cases, your sweet tooth is not
relevant.
> _____________________________________________________
> Doug Masson There is no windchill
> dmasson@well.com at absolute zero.
>
> On Fri, 3 Dec 1999, Joe Moore wrote:
>
> > "Lewis A. Mettler" wrote:
> > > Let me say it again in simple English, "bundling is inherently unfair to
> > > consumers".
> > >
> > > If for any reason you do not think so or can not understand that obvious
> > > observation, then please explain how bundling is fair. That is
> > > precisely what I have been trying to get others to do for the last
> > > "whatever period of time". When NO ONE does that, I begin to assume
> > > that bundling is in fact "inherently unfair to consumers".
> >
> > Is that all consumers? If so, then a contradiction can be shown by
> > finding a consumer to whom bundling is fair. Bundling applications
> > with an operating system is fair to those consumers who want the
> > functionality of all elements of the bundle. Therefore, bundling is not
> > inherently unfair to all consumers.
> >
> > Are there consumers for which bundling is unfair? Yes. But your
> > generalization is not justified.
> >
> > If you mean that "bundling is inherently unfair for some consumers", I
> > would say that the fairness is not inherent to the bundling, since it is
> > not universal. So your generalization is not justified.
> >
> > --Joe
> >
> > --
> > IBM's vision is apparently to make IBM hardware "scream with Microsoft
> > software" --The Register,
> > http://www.theregister.co.uk/990927-000003.html
> >
> > I have visions of screaming with (at and about) Microsoft software, too.
> >
> >
> >
--
Lewis A. Mettler, Esq.(Attorney and Software Developer)
lmettler@LAMLaw.com
http://www.lamlaw.com/ (detailed review of the Microsoft antitrust
trial)