Steve Minor at the SWVa LawBlog suggested yesterday that the federal government should have brought a product liability suit against Microsoft, rather than its monopolization case. I have no idea whether the product liability approach (as described in a ZDNet article cited by Steve) will succeed legally or provide Microsoft users with much relief or security. But, I am virtually certain that vibrant competition in the marketplace for operating systems and web browsers would have produced higher quality systems, with far superior security protection, than we have now.
Antitrust law exists to deter and punish conduct that prevents meaningful competition and all its benefits. As the Supreme Court said in its Professional Engineers Case, 435 U.s. 679, 695 (1978):
The Sherman Act reflects a legislative judgment that ultimately competition will produce not only lower prices, but also better goods and services. “The heart of our national economic policy long has been faith in the value of competition.” Standard Oil Co. v. FTC, 340 U.S. 231, 248 . The assumption that competition is the best method of allocating resources in a free market recognizes that all elements of a bargain – quality, service, safety, and durability – and not just the immediate cost, are favorably affected by the free opportunity to select among alternative offers.
Complex antitrust suits against powerful, misbehaving monopolists may take too long, be too difficult to explain in tiny sound bites, and offer imperfect remedies, but a government that failed to bring such cases would be sending a terrible message to every firm that hopes to succeed by offering more value than the predominant firm. The message would have been particularly irresponsible and devastating when the largest corporation on the planet is abusing its market power in a product market that affects virtually every consumer and is at the core of our economy.
- Competition and its benefits do not happen automatically — especially in a marketplace where technology favors the creation of predominant firms.
- Antitrust law is not self-enforcing.
- Consumers cannot reap the benefits of healthy competition if antitrust police are dissed and disarmed.
If Microsoft had faced vigorous competition, it would have been forced to improve its products — or to lose business to competitors offering customers more desirable options (including better security, platform stability, user-interfacing, or price). Even when the average computer purchaser was more than satisfied with the Windows experience and all the “free” features, meaningful competition for the business of better-informed or more discriminating customers would have increased the quality across the board.
Product liability suits might help solve some security problems, but competition would have prevented a lot of the quality problems that only a self-satisfied monopolist can ignore, perpetuate and perpetrate.
- If you came to this website today to read about legal ethics, and you missed my post in June saluting the Sherman Act and its meaning for lawyers and consumers of legal services, click here for “Happy Birthday, Sherman Act”