Posted on 06/20/2002 4:40:17 PM PDT by Alan Chapman
A divided Iowa Supreme Court last week reinstated a class action lawsuit against Microsoft brought by Joe Comes on behalf of himself and his fellow Iowans who purchased computers that came pre-installed with Windows 98. As end-user licensees of the operating system, Comes charged that he was forced to pay “a monopoly price” for the privilege of using Windows, thus he should be justly compensated for this crime against humanity.
Under federal antitrust law, Comes has no case, since the U.S. Supreme Court has held that secondary—or “indirect”—consumers may not assert standing in antitrust cases, since such consumers do not suffer a legal “injury” as the result of companies running amok and subverting competition. Iowa’s own “Competition Law” says that the state will follow the federal interpretation in state antitrust cases, so that the enforcement of said laws are at least consistent.
The Iowa Supreme Court’s decision changes all that.
Now, in the state of Iowa at least, anybody who has ever bought or used Windows can essentially join a class action against the company for antitrust violations.
The court majority ignored the law and decided to impose their own view of what antitrust law should be—making companies pay for daring to produce and compete—and in doing so introduced further chaos into the already “Wild West” world of antitrust litigation. Now interest groups that have an ax to grind with a company can go forum shopping for states that allow secondary consumers to sue under local antitrust laws. This means that any company which sells products via retail will be potentially liable for charging prices that a judge or jury deem “too high”, “unfair” or “anticompetitive”.
Lost in all this is any sense that the consumers are voluntarily purchasing these products in the first instance. Joe Comes didn’t have to buy a computer with Windows pre-installed. He could’ve bought a Mac or installed Linux on the Intel machine he did buy. Instead he’s using the courts like it’s a giant rebate center.
He’s asking us to morally condemn Microsoft for having the audacity to actually take his money when he willingly offered it to them. And the Iowa Supreme Court sees nothing wrong with this—after all, if Microsoft was willing to allow Joe Comes to buy their “monopoly priced” software, who knows what the company will do tomorrow, they could be selling you software that you might want. And then the vicious cycle of supply-and-demand will spin completely out of control.
Note: I'm not laughing. I live in one of the 9 states still pursuing litigation against Microsoft. I simply suggested it as a way to add additional "pressure" to those 9 states to stop this stupid lawsuit. Imagine the consumer pressure on these states from people like myself who have home PC's and can no longer get an operating system of my choice on it. Nothing like a good old VOTER revolt to bring about change in those 9 states, huh?
As far as the case you cited, that's very interesting and YES, I see very specific parallells. If seed companies can get away with it, why not Microsoft? A "shrink wrap license" whether it's for seed or software is basically the same thing. Frankly, I'm surprised the seed companies have been able to get away with it, but if the precedent has been set, why not?
Who gives a rat's patoot what either of you think?
A market characterized by only one supplier without competition is the fundamental definition of a monopoly. Regardless of any effort (or no effort) by that entity to control the market, the monopoly still exists. There is no choice in the market.
Your adolescent linguistic gymnastics to come up with multiple interpretations of the word "is" is extremely boring.
Hey, that's a good deal.
Next time, try adjusting for inflation. If, in 1992, the price for Windows 3.1 was $100, that's $127.80 in 2002 dollars, according to the trusty inflation calculator. So, in reality, the price of Windows has dropped in real terms - $120 today is $93.90 in 1992 dollars. That's almost 10% cheaper than it used to be.
My industry brother tells me that the original piece of internet software was developed and owned by a little Chicago company known as early as '87 or '88 as "Internet Explorer." It was a good product and the name had been originally and duly registered by this mom and pop size outfit.
When it came time for Microsoft to crank its attention, its hoary siege cannon in that little company's direction, Gates decided he liked the name almost as much as he hated the useability and high quality of the little company's sole product -- which was designed as a browser first and a massive venue for advertising second.
So, in the style of the good old robber barons, (who, like Gates always traveled with bodyguards, for obvious reasons) Gates simply decided to call his new browser, get ready, "Internet Explorer," what else? He's Bill Gates, he gets to do this kind of thing.
When this small company had finally finished trying to defend itself from the life crushing and business ruining bohemoth by bringing suit in court, after some four or five years appeals, counter appeals, counter double-whammy counter suits, etc. etc., they discovered that they had, after legal fees and the confusion of Gates grabbing the market by using their name, more massive counter-suits by Gates, etc. --these guys discovered they had exactly enough money left over to pay a small severance package to their forty or so employees and turn out the lights. And of course turn out the lights on their now re-mortgaged and re-possessed homes, etc.
If Gates really were a hard-charging, brilliant young whiz-kid entrepreneur, as his hugely expensive self-imaging job has claimed over the years, he would have been too busy designing and building a better browser using its own, and not another guy's, name. But that's not how he operates.
His first step was typical of how he proceeded afterward, he sold DOS before he owned it himself. He did not write the language, he simply gave it a name.
The guy is really really smart, in the same way that a virus is really smart. It tricks the body's own cells into replecating not themselves, but the virus. He's a genius.
And if I were to find out that he is a member of the Church of Scientology, I would not be surprised.
Now THAT would be a wonderful and entertaining face-off. Gates vs. the "Church" of Scientology. Battle of the Reptiles or what?
Have a nice Libertarian Dream of a day, everybody...
BUMPITTY-BUMP
I said no such thing; I was pointing out that the issue was not as simple as the article claimed. I don't believe the class action suit has merit, but it is worth considering the huge barrier to entry for other OSes created by Microsoft's deals with OEMs.
Case closed?
Wow, what a great story. Of course, there's a major plot hole here - Tim Berners-Lee didn't start working on the WWW until about 1989, and the HTML/WWW spec wasn't made publicly available to anyone outside of CERN until the summer of 1991. So whatever the hell this anonymous company did, it sure wasn't a web browser.
But, despite that, I still know what you're talking about. And if you'd like to get the story right, you can look up the Synet case, and come to a conclusion based on something resembling facts, rather than secondhand bashing...
Given the dollar amounts quoted here, why wasn't the original suit filed in small claims court? How did it get class-action status?
Or was it filed as a class-action suit at the beginning? If so, which law firm(s) is really looking for a payday?
Or... are consumers and lawfirms just latching on to the state attorneys general suits like remoras on sharks?
a confused balrog
He’s asking us to morally condemn Microsoft for having the audacity to actually take his money when he willingly offered it to them. And the Iowa Supreme Court sees nothing wrong with this—after all, if Microsoft was willing to allow Joe Comes to buy their “monopoly priced” software, who knows what the company will do tomorrow, they could be selling you software that you might want. And then the vicious cycle of supply-and-demand will spin completely out of control.
OUCH!
Ten years ago the Microsoft operating system that came with your computer accounted for about 10% of the cost of the machine. Today, with the prices of PCs falling the cost of a Microsoft operating system accounts for between 20% and 30% of the cost of a new PC.
The computing power that cost five hundred dollars today cost a million dollars twenty years ago.
Ten years ago the cost of a copy of Windows was about $100 retail. The cost today? The cheapest that I have found a full copy of any supported version of Windows is around $120. Now I'm sure that the price is lower in large quantities, but that was true then too.
The Windows OS integration and performance that cost a hundred dollars today would have cost thousands of dollars ten years ago.
There's no other industry that I know of that can touch those beyond-exponential increases in value. Fortunately, it's because the computer industry has had the least regulation foisted on it by politicians and bureaucrats -- parasitical elites versus market-driven hosts.
Government intervention into peaceful, private activity -- free association wherein any or all parties are free to walk away -- will make things worse rather than better.
Any government agency that is a value to the people and society could better serve the people by being in the private sector where competition demands maximum performance.
Wake up! They are the parasites. We are the host. We don't need them. They need us.
If competition is prevented from entering the market because of regulatory barriers put in place by government then a monopoly exists. But, an absence of competition, all by itself, does not constitute a monopoly.
Hypothetical situation: suppose the risks associated with a particular product or service are so extreme that only one company is willing to provide the product or service to consumers. Does the company have a monopoly? No. Why? Because there is nothing stopping other companies from competing.
A monopoly cannot exist in a free-market economy.
Who gives a rat's patoot what either of you think? Your adolescent linguistic gymnastics to come up with multiple interpretations of the word "is" is extremely boring.
None of that is an argument. Again, you seem unable to engage in civil discourse without resorting to name-calling.
You touched on some very good points. As you pointed out big business often lobbies for stricter controls on the market because they can bear the costs while small business cannot. Big business can pay the taxes, afford the licenses, and can afford to comply with burdensome regulations. The barriers to entry into some markets are so cumbersome and cost prohibitive that some people don't even bother trying.
I had an interesting experience of my own. Several years ago I went to work for a medical company. I had nowhere to sit on my first day at work. The logistics manager said they were bringing me a desk out of storage but they had to order a chair. I told the logistics manager that I could simply pick up one of those cheap, high-back leather chairs from Office Depot and then the company could reimburse me. They cost about $100. She said it wasn't allowed because the chair didn't comply with Cal OSHA ergonomic requirements. I asked her how much an OSHA-compliant chair costs. She said $500. The company had 200 employees at the time. Do the math.
I think people are riding the wave of government anti-trust lawsuits and consumer animosity toward Microsoft to try and get something for nothing.
Incessant repetition of this false statement like a mindless drone isn't going to make it true.
Absence of competition is the very definition of a monopoly, regardless of any overt attempt to control the market by the single participant. You can get a clue from the word itself: "mono-", meaning "one".
Whine about the name-calling all you want, you haven't said anything to earn respect.
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