Re: Bundling and operating systems

["Lewis A. Mettler" <lmettler@lamlaw.com>]

Simon,

Simon Cooke wrote:
> 
> >From: "Lewis A. Mettler" <lmettler@lamlaw.com>
> >Bundling always causes two affects:
> >
> >1) the price in increased to cover the cost
> >2) choice is removed from the consumer in both the short and long run
> 
> There's a logical fallacy in both points.
> 
> (1) What happens if the price remains constant? Or if the cost drops? The
> retail-store cost of Windows (3.1, 95, 98, 98SE) has dropped over the years.
> Windows 98 has IE included. It costs approximately the same as Windows 95 -
> and that's BEFORE you take into account inflation, in which case it costs
> less.

Change in price over the years does not matter one bit.

It is the competitive prices at the time of the bundle that count.

Products A and B combined will always cost more than only product A or
only product B.

Witness office suite products over time.

Individual products in the suite always cost less than the suite price.

> 
> As has been said before over and over and over and over and over and over
> when you made this SAME argument over and over and over and over and over
> (and were allegedly "censored" for) on MSNBC's Tech BBS, products are priced
> at what the market will bear. 

False.  Read the findings of facts.

The judge found that Microsoft could unilaterally set price due to
monopoly power.

That is not the same concept as " what the market will bear".  What the
market will bear assumes competition and competitive prices.


> The cost of a product bears only very little
> resemblance to what it sells for - or rather, it sets a floor. 

Yes. Monopolist set it where ever they wish.


> And then
> there's the completely contrary mechanisms which don't appear on the face of
> it to make sense - such as rebate deals whereby you can buy - say - a surge
> protector at CompuUSA for $15, with a $15 rebate.
> 
> The thing is Lewis, you continuously ignore this side of the equation. Which
> in fact, invalidates your argument. If I were you, I'd spend more energy
> considering how this behavior affects competitors, rather than consumers, as
> the harm to consumers is NOT found in their pocketbooks.*

Sorry. In monopoly markets the monopolist decides prices.  Other forces
are not in play at all.

> 
> (2) choice being removed in the short & long run?
> 
> In the long run? Maybe - if it puts competitors out of business.
> In the short run? No way - or rather, you always have the ultimate choice -
> don't buy that thing. 

Bundling A with B means you MUST IN FACT BUY B IF YOU WANT A.

You do not have a choice over B.


> Vendors sell what *they* want to sell - not the other
> way around. 

OEMs are told what to sell.  Netscape can not sell at all.

Only the monopolist is able to sell what they want to.

You really should read the findings of facts.

> If you want special treatment, talk to the vendor. If enough
> people want that option, it will magically make itself available.

Bull.  You are a joke.

You must have gone back to Microsoft for some more silly arguments. 
They are pretty bad.

-- 
Lewis A. Mettler, Esq.(Attorney and Software Developer)
lmettler@LAMLaw.com
http://www.lamlaw.com/ (detailed review of the Microsoft antitrust
trial)