They Own the Courthouse (2)

[charles mueller <cmueller@metrolink.net>]

          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
  monopoly.
  
          (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
          http://webpages.metrolink.net/~cmueller
  
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