antitrust — Page 13

Posts tagged as:

European Regulators Think Consumers Too Stupid to Know How to Download a Different Browser

by Adam Thierer on June 11, 2009 · 30 comments

According to Ina Fried of CNet News, Microsoft plans to remove its Internet Explorer web browser from the new versions of Windows 7 when it ships it in Europe later this year. [Additional coverage at ZDNet.] MS is apparently doing so to assuage the concerns of EU antitrust officials, who have been obsessed with the company for the past decade. [Update: Here is MS official announcement.]

Apparently, European officials think their citizens are too stupid to find an alternative browser. I mean, seriously, how hard is it? Does the competition lack name recognition such that consumers can’t find them? Hmmm… Google and Apple seem to be pretty well known brands, and their browsers (Chrome & Safari) are pretty easy to find. And then there’s Mozilla’s Firefox browser (my PC favorite) and Opera (my mobile phone favorite), which are outstanding browsers. [Incidentally, Firefox already has 31% share of the European market.]

OK, OK, the regulators might say, but these competitors are just too expensive! Uh, no, wait… every one of them is free. So, strike that theory.

Well, the regulators need another theory then. How about illegal tying of products and services! You know, there’s only certain sites or services you can use with IE, right? Nope, that theory doesn’t work either. And does anyone believe that MS could really tie OS functionality to the use of IE? How long would the world tolerate Outlook e-mails or Word documents that only allowed linking to URLs via IE?? Come on.

OK, any other theories left? Not that I can think of. Which brings us back to the only theory the Euro-crats have left: people are sheep. They’ll take whatever MS bundles into the OS free, you see, and they will use it more than they use competing products. Thus, we regulators have to save them from their own stupidity! The masses just don’t know what’s good for them! These free, integrated services are harming them! And, therefore, the only remaining solution is to kill innovation by crippling functionality and removing the free offering. That’s pro-consumer! … or so say the European antitrust bureaucrats.

Meanwhile, back in the real world, a whole lotta innovation continues to take place. But shhhh.. don’t tell the Euro-crats. They need a company to pick on. Welcome to the Theater of the Techno-Absurd.

30 comments

What the EU Doesn’t Get: Harming Competitors is Called Competition (and shouldn’t be illegal)

by Braden Cox on May 13, 2009 · 11 comments

The European Commission is a loose cannon when it comes to antitrust and competition law. It’s record $1.45 billion fine is emblematic of what the Commission just doesn’t get: there’s a difference, a difference that matters, between consumer and competitor harm.

EU Commissioner for Competition Neelie Kroes said otherwise: Intel had “used illegal anticompetitive practices to exclude its only competitor and reduce consumers’ choice — and the whole story is about consumers.”

No, the whole story is not about consumers, Ms. Kroes. It’s clear that the only harm that Intel has carried out is on it’s main rival AMD–and that’s called competition. Over at the ACT blog, my colleague Mark Blafkin has a good post that details the lack of consumer harm.

Here’s the main point–competition shouldn’t be illegal. But according to EU law, companies with a dominant position in the market have a legal duty to not eliminate competition, while in the U.S. only monopoly power imparts this duty. U.S. culture, reflected (partially) in antitrust law, holds that the competitive process of driving other companies out of business makes an economy efficient and innovative.

11 comments

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

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.

24 comments

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.

10 comments

Microsoft, Google, the Innovator’s Dilemma and the Future of Search & Web Ads

by Berin Szoka on January 17, 2009 · 143 comments

Jerry Yang’s departure as Yahoo! CEO opens the door to a renewed bid by Microsoft to buy Yahoo!’s search business (or Yahoo! itself). Such a merger could produce a significantly stronger challenger to Google in the search market. With this possibility in mind, the WSJ just ran a fascinating history of the “paid search” business—the placement of “contextually targeted” ads next to search engine results based on the search terms that produced those results.

In a nutshell, Microsoft failed to see (back in 1998-2003) the enormous potential of paid search—just as small start-ups (such as Google) were starting to develop the technology and business model that today account for a $12+ billion/year industry, which is twice the size of the display ad market and which supports a great deal of the online content and services we have all come to take for granted online. Microsoft first put its toe in the water of paid search with a small-scale partnership with Goto.com in 1999-2000. But this partnership failed because of internal resistance from the managers of Microsoft’s display-ad program. In 2000, Google launched Adwords and thus began its transformation from start-up into economic colossus. By 2002, Microsoft realized that it needed to catchup fast, and approached Goto.com (by then renamed Overture) about a takeover. But Microsoft ultimately chose in 2003 not to buy the startup because Bill Gates and Steve Ballmer “balked at Overture’s valuation of $1 billion to $2 billion, arguing that Microsoft could create the same service for less.”

Microsoft, meanwhile, spent the next 18 months deploying hundreds of programmers to build a search engine and a search-ad service, which it code-named Moonshot. The company launched its search engine in late 2004 and its search-ad system in May 2006.

But Microsoft’s ad system came too late:

Advertisers applauded Moonshot for its technical innovation. But Microsoft had trouble coaxing people to migrate to its search engine from Google; advertisers were unwilling to spend large sums on MSN’s search ads. By building a new system instead of buying Overture, Mr. Mehdi says, “we really delayed our time to market.”

What’s most fascinating about the piece is that it seems to suggest that Microsoft missed its opportunities to get into paid search not because it was “dumb,” “uninnovative” or a “bad” company, but for the same sorts of reasons that big, highly successful and even particularly innovative companies fail. The reasons companies generally succeed in mastering “adaptive” innovation of the technologies behind their established business models are the very reasons why such great companies struggle to encourage or channel the “disruptive” innovation that renders their core technologies and business models obsolete. Continue reading →

143 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 →

9 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.

19 comments

All Kinds of Competition for Google Is in Development

by Jim Harper on October 2, 2008 · 9 comments

Information Week has an article in its September 29th issue that illustrates why regulatory interventions to temper Google’s dominance are folly – things like antitrust scrutiny of the Yahoo! deal. But it takes a little understanding of how markets work.

The article lists all kinds of innovative startups that plan to challenge Google and take the field of search in all kinds of new directions. “The burst of activity over the past 12 months is more befitting a land rush than a market dominated by one powerhouse,” it says. Read it. There’s lots of interesting stuff going on.

But it’s not going just because. It’s going on because there’s a dominant player in the market. It’s going on because venture capitalists, innovators, and entrepreneurs can see the large profit that Google is making, and they want a piece of it. Excess profits act as an invitation and a spur to others, bringing new businesses and business ideas to that market.

If profits are “managed” and “brought under control” by curtailing a company’s ability to make deals (like Google would make with Yahoo!), that signal – that there is money to be made here – dissipates. Fewer innovators come to the market.

A second signal also goes out: “If you come up with something truly revolutionary in this field, we’re going to reward you with a haircut.” That dissuades investors – telling them that high profits will not come to them if they produce something great.

It’s a shame that the federal government is working to stanch the flow of innovation coming to search by going after Google.

9 comments

Advising Google on Antitrust

by Braden Cox on September 18, 2008 · 3 comments

Over the past week there’s been a lot of Google blogging (here, here, here…) on TLF, so now it’s my turn. And I’ll defer to the post of my colleague Mark Blafkin on the ACT blog, provocatively titled Why is Google Pointing that Gun at its Foot?

Here’s a snippet:

Google has not yet learned that when you’re under antitrust scrutiny, EVERYTHING YOU DO is going to be analyzed through that lens. Every move your company makes will communicate something to the regulators, partners, customers, and competitors that are now watching you more closely. The last thing you want to do is give regulators more ammunition. At times, this may require changing decision making processes throughout the company, even in seemingly unrelated aspects of business.

ACT was engaged in the Microsoft antitrust case. Google can learn a lot from Microsoft’s battle, and by the way governments characterized what’s “anti-competitive.”

3 comments

← Previous Entries

Next Entries →