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They Own the Courthouse (2)
C.A. Behney is skeptical that--even assuming Microsoft owns the
courthouse (and wins all the way up through the Supreme Court)--this
'guarantees an easy victory' for Bill in the end. His reasons:
(1) We're in a global environment 'where court decisions in one
jurisdiction influence but do not bind other jurisdictions.'
(2) Microsoft 'cannot dictate innovation,' which will undermine its
(3) 'Once on the docket, public scrutiny can drive the Court's
decisions.' Even Justice Scalia may not like the idea of having everything
on his computer controlled by 1 company.
(4) 'Microsoft could win the court wars, and still be blindsided by
the anger of an aware and aroused public.'
Logical though these arguments certainly are, I know of no evidence
in the antitrust record of the last couple of decades that would support
them here. As to (1), is antimonopoly policy in the EU, Japan, Australia,
and the rest of the 60 plus countries with antitrust laws on their books
more STRINGENT than that of the U.S.? Hardly. It is almost invariably even
weaker everywhere else than it is here. As for (2), it's true that
technological innovation--as Schumpeter pointed out a half century ago--does
indeed EVENTUALLY erode all monopolies. A life span of 50 years or more,
however, has been typical for most U.S. monopolies (e.g., oil, steel,
aluminum, tobacco). We can live with Bill's monopoly of the computer
industry 'til 2050? While technology is moving considerably faster here
than in, say, oil and steel, Bill is--as I understand the situation--either
stamping it out or buying it up at an even swifter pace. (His fortune is
not exactly stagnating: The reported $20 billion increase in his net worth
in 1997, for example, works out to--according to my cheap calculator--an
average profit of $55 million per DAY.) If it's not his, it won't be
tolerated now or in 2025.
As to (3), the possibility that 'public scrutiny'--once the
Microsoft case reaches the Supreme Court's docket--might somehow deter its 8
pro-monopoly justices from exonerating Bill's monopoly, strikes me as
remote. To be sure, this could occur if the national MEDIA was aroused and
united against the monopolist. But the media is not and cannot be, simply
because it, too, has recently been monopolized. With the killing of U.S.
antitrust in the mid-'70s, ambitious media moguls bought up (or bankrupted)
their competitors, with the result that we now have major American cities in
which there is a single daily newspaper, a single owner of its radio and/or
TV stations, and even the situation where a sole 'conglomerate' controls all
three. No one doubts that the Supreme Court reads the election returns.
But our 1997 media monopolists have every incentive to defend rather than
condemn Bill Gates' monopoly--and thus to shape public opinion in his
favor, not in the public's.
Public anger in the WAKE of a Supreme Court decision, (4),
exonerating the Microsoft monopoly? How is it to arise, given the fact,
again, that the country's media is compelled by its own self-interest to
take a pro-monopoly position--to portray that Court retreat into 19th
century policy notions (bigger the better) as a victory for 'efficiency' and
'technology' and thus as 'pro-consumer?' As a nation, we no longer have a
working mechanism for either the creation or the expression of an informed
public opinion against monopoly. Our media is now a shield for national
monopolies rather than the scourge it once was.
Put your money on Bill's legal team. Our antitrust division at the
Justice Department--after more than 20 years as a bastion of 'laissez-faire'
ideologues whose working motto is, 'Monopoly Is Good,' plus 300 or so idled
lawyers/economists left with nothing to do but plan their retirement over
those 2 decades--has roughly the antimonopoly competence of a local
sheriff's office that can't organize the proverbial 2-car parade. Virtually
zero trials, careers spent drafting toothless 'consent decrees.' How could
the result be anything but institutional rot?
Charles Mueller, Editor
ANTITRUST LAW & ECONOMICS REVIEW