Antitrust & Competition Policy

Shame on Mozilla

by Adam Thierer on February 10, 2009 · 11 comments

Over at Ars, Ryan Paul has an appropriately sharp-tongued response to the Mozilla Foundation’s troubling move to become a cheerleader for the European Commission’s ongoing antitrust efforts against Microsoft. Apparently Mozilla will assist the EC’s investigation “by offering expertise about the browser market.”

Paul focuses on what’s wrong with this in both a micro and macro sense. He rightly points out that the potential remedies here do not bode well for the future of this sector, since regulatory tinkering with high-tech product standards is bound to end badly and create a terrible precedent for future interventions. “It’s hard to find a rational argument in favor of mandatory standards enforcement,” Paul says. “It would be punitive and unhelpful to the advancement of the web.” Moreover, Paul notes that things have never looked better on the browser front:

Claims that Microsoft’s monopoly status has eliminated competition in the browser market sound hollow in the face of the profoundly vibrant browser market that exists today. The record-setting launch of Firefox 3 added up to over 8 million downloads in the first 24 hours alone. Firefox’s global market share continues to climb every month and the browser has grabbed almost 30 percent of the European market.

And let’s not forget about those two little companies called Google and Apple who have competing products in the field! They’re making serious inroads in the browser wars. Moreover, Microsoft is struggling to hold on to whatever “dominance” they have left in their core market: OS. As Paul concludes:

To the observant tech enthusiast, all signs seem to indicate that Microsoft’s monopoly is on its way out. The Redmond giant is in no danger of annihilation, but it’s definitely not positioned to dictate terms to the rest of the industry anymore.

But what is perhaps most shocking about Mozilla’s call for intervention is the way that Mozilla Foundation chairperson Mitchell Baker minimizes the importance of not just Firefox, but the entire open source movement, when justifying EC intervention in this marketplace.

Continue reading →

11 comments

Book Review: Planet Google by Randall Stross

by Adam Thierer on February 2, 2009 · 23 comments

I finally got around to reading Planet Google: One Company’s Audacious Plan to Organize Everything We Know, by Randall Stross. It’s very well done. Stross is a frequently contributor to the New York Times and the author of several other interesting books on the technology industry. He knows how to weave a story together, and it helps that Google’s story is a pretty amazing one.

Each chapter discusses a different part of Google’s growing family of services — GMail, Google Maps, Google Earth, Book Search, and YouTube. Of course, it all started with search and Stross does a good job explaining how the ingenious Google search algorithm has grown from dorm room project to the greatest aggregator of human knowledge that the world has ever known. This, in turn, has powered Google’s hugely successful online advertising system. The real secret of their success with online advertising, Stross argues, is that “Google’s impersonal, mathematical approach search also provides you with the ability to serve advertisements that are tailored to a search, rather than to the person submitting the search request, whose identity would have to be known.”

Despite the benefits of such generally anonymous searching, as Google has grown and added new services and capabilities, concerns about the sheer volume of data that the company collects have led to heightened privacy concerns. Indeed, privacy is a core theme that Stross uses in the book to tie many of the chapters and issues together. Google is constantly struggling to strike the right balance between providing more access to the world’s information while also being careful not to raise privacy concerns. But it’s unclear exactly how much more information collection that users (or public officials) will tolerate before advocating stricter limits on Google’s reach. As Stross points out:

Guided by its founding mission, to organize all the world’s information, Google has created storage capacity that allows it to gain control of what its users are you doing in a comprehensive way that no other company has done, and to preserve those records indefinitely, without the need to clear out old records to make way for new ones. Moreover, Google differentiates its service by refining its own proprietary software formula to mine and massage the data, technology that it zealously protects from the sight of rivals. This sets up a conflict between Google’s wish to operate a “black box” (completely opaque to the outside) and its users’ wish for transparency.

Continue reading →

23 comments

A Broadband Stimulus Discussion and a ‘Big Ideas’ Lecture by Internet Pioneer David Clark

by Drew Clark on January 29, 2009 · 10 comments

The next several days feature a variety of upcoming events, both on broadband stimulus legislation, and on some of the broader issues associated with the Internet and its architecture.

On Friday, January 30, the Technology Policy Institute features a debate, “Broadband, Economic Growth, and the Financial Crisis: Informing the Stimulus Package,” from 12 noon – 2 p.m., at the Rayburn House Office Building, Room B369.

Moderated by my friend Scott Wallsten, senior fellow and vice president for research at the Technology Policy Institute, the event features James Assey, Executive Vice President for the National Cable & Telecommunications Association; Robert Crandall, Senior Fellow in Economic Studies, The Brookings Institution; Chris King, Principal/Senior Telecom Services Analyst, Stifel Nicolaus Telecom Equity Research; and Shane Greenstein, Elinor and Wendell Hobbs Professor of Management and Strategy at the Kellogg School of Management, Northwestern University.

The language promoting the event notes, “How best to include broadband in an economic stimulus package depends, in part, on understanding two critical issues: how broadband affects economic growth, and how the credit crisis has affected broadband investment. In particular, one might favor aggressive government intervention if broadband stimulates growth and investment is now lagging. Alternatively, money might be better spent elsewhere if the effects on growth are smaller than commonly believed or private investment is continuing despite the crisis.”

And then, on Tuesday, MIT Professor David Clark, one of the pioneers of the Internet and a distinguished scientist whose work on “end-to-end” connectivity is widely cited as the architectural blueprint of the Internet, looks to the future. Focusing on the dynamics of advanced communications – the role of social networking, problems security and broadband access, and the industrial implications of network virtualization and overlays – Clark here tackles new forces shifting regulation and market structure.

David Clark is Senior Research Scientist at the MIT Computer Science and Artificial Intelligence Laboratory. In the forefront of Internet development since the early 1970s, Dr. Clark was Chief Protocol Architect in 1981-1989, and then chaired the Internet Activities Board. A past chairman of the Computer Science and Telecommunications Board of the National Academies, Dr. Clark is co-director of the MIT Communications Futures Program.

I’m no longer affiliated with the Information Economy Project at George Mason University, but I urge all interested in the architecture of the Internet to register and attend More information about the lecture, and about the Information Economy Project, is available at http://iep.gmu.edu/davidclark.

It will take place at the George Mason University School of Law, Room 120, 3301 Fairfax Drive, Arlington, VA 22201 (Orange Line: Virginia Square-GMU Metro), on Tuesday, February 3, from 4 – 5:30 p.m., with a reception to follow. The event is free and open to the public, but reservations are requested. To reserve a spot, please e-mail iep.gmu@gmail.com

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Microsloth Explained, in Part

by Andrew Grossman on January 28, 2009 · 24 comments

Never forget.

Is it any wonder that Vista took 8 years–and that there’s no firm market date for incremental update Windows 7–when even minor changes require updating thousands of pages of technical documentation for a team of state antitrust regulators?

For the depressing details, read today’s “Joint Status Report” filed by 17 states, the District of Columbia, the DOJ, and Microsoft.

The government’s continued meddling with Windows, some 9 years after it was branded an “abusive monopoly” and following the Vista’s fizzling, boggles the mind. In a way, the company’s efforts to sic the antitrust attack dogs on rival Google really are a desparate attempt to level the playing field.

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Feedsqueezer: Another Competitor for Google

by Berin Szoka on January 24, 2009 · 10 comments

Those who criticize Google as a “monopoly” usually focus on the search and advertising markets. Google may indeed have a huge lead in those markets, but it is by no means a “monopoly” in the strict sense of the word as the only (“mono-“) seller in that market.

If the critics are concerned about about true “monopoly” or at least something close to it, perhaps they ought to focus on Feedburner, the free service Google acquired back in 2007. If one takes a very narrow definition of the service Feedburner offers, one could argue that there is no real alternative to Feedburner. But on the other hand:

I have a very simple solution. I use my own RSS feed I don’t need some other company providing a enhanced solution. I have never understood why people used feedburner at all.

Getting statistics from a feed is elementary. There are several services out their that provide podcast statistics.

Stupidity in giving someone else control over ones feed is something I will never get. I have no sympathy for those having feedburner issues.

Regardless, some leading bloggers have expressed outrage over Feedburner’s less-than-perfect reliability—see this recent rant by Michael Arrington. But we call in the federales to “fix” the “problem”—if one properly apply that term to a free service beloved by (nearly all) bloggers everywhere just because it’s not absolutely, positively 100% reliable or instantaneous or simply because some people don’t like the idea of using yet another Google product, no matter how good it is—let’s see what Feedsqueezer, a soon-to-be-launched service, will offer.

Note: The word “monopoly” is now commonly used to mean “control that makes possible the manipulation of prices.” It’s not obvious what that would mean in the case of those Google services, that are both free to the user and not directly related to any price paid by, say an advertiser—as distinct from, say, Adwords or Adsense, where there are at least prices that might, in theory, be controlled.

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Mobile OS Platforms, Competition, & Generativity

by Adam Thierer on January 17, 2009 · 24 comments

As Berin and I have noted here before (here and here), there seems to be no shortage of competition and innovation in the mobile operating system (OS) space. We’ve got:

Apple’s iPhone platform,
Microsoft’s Windows Mobile,
Symbian,
Google’s Android,
BlackBerry,
Palm OS (+ Palm’s new WebOS),
the LiMo platform, and
OpenMoko.

I am missing any? I don’t think so. Even if I have, this is really an astonishing degree of platform competition for a network-based industry. Network industries are typically characterized by platform consolidation over time as both application developers and consumers flock to just a couple of standards — and sometimes just one — while others gradually fade away. But that has not yet been the case for mobile operating systems. I just can’t see it lasting, however. As I argued in my essay on “Too Much Platform Competition?,” I would think that many application providers would be clamoring for consolidation to make it easier to develop and roll out new services. Some are, and yet we still have more than a half-dozen mobile OS platforms on the market.

Regardless, the currently level of platform competition also seems to run counter to the thesis set forth by Jonathan Zittrain and others who fear the impending decline or death of digital “generativity.” That is, technologies or networks that invite or allow tinkering and all sorts of creative uses are supposedly “dying” or on the decline because companies are trying to exert more control over proprietary or closed systems.
Continue reading →

24 comments

IE’s Browser Market Share Down by 8-10% in 2008

by Berin Szoka on January 5, 2009 · 9 comments

Microsoft’s share of the browser market across all versions of Internet Explorer has dropped, by one estimate, dropped from 78.58% in December 2007 to 68.15% in December 2008 (or by just under 8% in another estimate).

[IE’s] share dropped from 69.77% in November to 68.15% in December. [During the same period,] Firefox gained more than half a point and ended up at 21.34%, Safari approaches the [10%] hurdle with 7.93% and Chrome came in at 1.04%, the first time Google was able to cross the 1% mark.

This is particularly interesting:

Since IE6 is used primarily within corporations, its market share is much higher during the week than it is on weekends. As a result, all other browsers gain on weekends and especially during a holiday. Because of that circumstance, Net Applications noted that the December numbers should be taken with a grain of salt. However, it is worth the note that IE6 achieved … market share numbers of about 28% during the week and about 21% on weekends in early 2008. In December, these numbers were down to about 20% during the week and 15% on weekends.

So, Microsoft still has an established base among corporate users, where IT administrators generally prevent employees from installing new applications (including browsers) and the sysadmins often don’t roll out alternative browsers across a corporate network for any one of several possible reasons, including:

They just don’t want to bother having to install, regularly upgrade and support another piece of software;
They may overestimate the security vulnerability of such alternative browsers compared to Internet Explorer;
The crustier sysadmins may not realize that today’s browsers are not only free for individual users, but also for corporate users–unlike the old Netscape Navigator; and
Corporate intranets may be designed for IE, in which case rolling out an alternative browser might cause confusion among less tech-savvy employees.

Microsoft may still have an advantage that could be considered “unfair,” but so what? Continue reading →

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Note to Obama: The FCC Needs Transparency

by Sonia Arrison on December 12, 2008 · 4 comments

This week, the House Energy and Commerce Committee released a report accusing Kevin Martin, the chairman of the Federal Communications Commission, of being deceptive and opaque in his management of the agency’s affairs. That a politician would pull such moves is no surprise, but the report should send a strong signal to the incoming Obama administration.

“Chairman Martin withheld important and relevant data from the other Commissioners during their consideration of the 13th Annual Video Competition Report in an apparent attempt to enable the Commission to regulate cable television companies,” the report states.

This finding was one of many pointing out how the Chairman wielded his power inappropriately.

It is common knowledge that Chairman Martin personally dislikes the cable companies. This animosity seems to be what drove his reintroduction of a rule to require a 30-percent market share cap on cable companies. In 2001, the U.S. Court of Appeals struck down a similar cap; since then, competition in the video services market has skyrocketed.

When asked why Chairman Martin would reintroduce a rule already rejected by the courts, Joy Sims, a spokesperson for the National Cable and Telecommunications Association, simply said, “Look at the House report issued today.”

One man’s vendetta, the report reveals, has the ability to influence an entire industry. To those who marvel at that reality, Berin Szoka of the Progress and Freedom Foundation explains that “the FCC is one of the most unaccountable agencies. The problem is not isolated to Chairman Martin, but was probably worse under him because of his war on cable.”

[…]

Nice to Be Wanted

by Tom W. Bell on November 23, 2008 · 7 comments

“The doggone law. The consarned law. The lousy, frickin’, nit-pickin’, noveau-Prussian, freedom-crushin’ . . . .” Nice to Be Wanted twangs the sad tale:

Like Sensible Khakis and Take Up the Flame, Nice to Be Wanted comes with a license allowing pretty free non-commercial use. Also like those songs, this one requires commercial licensees to tithe 10% to a good cause—here, the Institute for Justice.

We all owe IJ thanks for its Good Works. I owe IJ a special “thank you,” for inspiring the lines in Nice to Be Wanted about the plight of the “charmin’ lady down New Orleans’ way.” Alas, her tale rings all too true. May she—and may we all—win greater freedom to pursue our livelihoods. Go get ’em IJ! (The bit about “pumped his own gas” also draws from a real-world inspiration: just scroll down to Oregon Revised Statute § 480.330.)

I plan at least a few more of these videos, by the way. Subscribe to my channel to catch them all. My efforts remain pretty raw for now, granted; Nice to Be Wanted comes from only the second take of my first visit to a recording studio. Please share your suggestions about how I might improve. (You can skip, “Suck less,” though. I’m already working on that, thanks.)

[Crossposted at Agoraphilia and Technology Liberation Front.]

7 comments

Price Fixing in the LCD Business Sure Doesn’t Seem to Do Much Good!

by Adam Thierer on November 13, 2008 · 19 comments

There’s news today that the Department of Justice (DOJ) is imposing fines on three leading electronics manufacturers — LG Display Co. Ltd., Sharp Corp. and Chunghwa Picture Tubes Ltd. — “for their roles in conspiracies to fix prices in the sale of liquid crystal display (LCD) panels.” According to the DOJ’s press release, of the $585 million in fines, LG will pay $400 million, the second highest criminal fine ever imposed by the DOJ’s Antitrust Division.

Regardless of the merits of the DOJ’s case, I have to ask: Has there ever been a worse attempt at fixing prices in the entire history of price fixing? After all, have you looked at flat-screen prices lately? They do nothing but fall, fall, fall — fast! Here are some numbers from Steve Lohr’s New York Times article about the DOJ case:

The LCD business is a $100-billion-a-year market and growing, but prices are falling relentlessly. Recently, panel prices have often been cut in half each year, a downward trajectory even steeper than in other technology markets known for steady price pressure, like those for computer chips and hard drives. In the last six months alone, the price of a 15.4-inch panel for a notebook PC has dropped to $63, from $97, and a 32-inch LCD for a television has gone to $223, from $321, according to iSuppli, a market research firm. The price-fixing conspiracy, industry analysts said, was an effort to slow the speed of price declines. “These companies were trying to get a toehold to protect profits in a very difficult market,” said Richard Doherty, director of research at Envisioneering, a technology consulting firm.

Yeah, well, that “toehold” didn’t protect squat. And how could it; it’s not like these are the only three companies in the LCD business. And you’ll forgive those of us who only have plasmas or projectors in our homes for wondering what the big deal is (although I am certainly aware that LCDs are the primary technology for smaller flat screen displays in computer monitors, cell phones, and other handhelds).

But hey, I’m sure the DOJ’s effort was worth it at some level. Some lucky handful of consumers will probably get a check for 65 cents once the class action dust settles on this one. In the meantime, if there is some sort of Antitrust Hall of Fame out there, I hearby nominate LG, Sharp, and Chunghwa for the “Worst Price Fixers in History” award.

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