November 20, 1998 - Friday - Court not in session. Weekly review.
3:35 PM PST - Microsoft will continue to sabotage Java to the greatest extent possible.
It is becoming very clear that Microsoft will continue to sabotage Java to the greatest extent possible. This attitude by Microsoft is very likely to affect the both the outcome of the antitrust litigation and the remedy should the court find one necessary. And, the remedy is looking more and more like it will be splitting up Microsoft. See the discussions on Vertical versus Horizontal splitting of Microsoft.
The problem is that the courts do not like to continue to see the same defendants come into court time and time again for the same violations of law. But, Microsoft appears to be damaging Java as much as the court will allow. This can be a big mistake. Judge Jackson has already seen the consent decree (agreed to by Microsoft) completely ignored by Microsoft. Now, it sees Microsoft continue to try to fracture the Java technologies which happens to be a primary charge of the antitrust action.
This attitude can convince the judge that only a rather complete solution to the antitrust violations will work.
3:18 PM PST - The creditability of witnesses.
The creditability of witnesses is important for all litigation. The Microsoft antitrust trial is no different. For all the effort by Microsoft attorneys to discredit the DOJ witnesses, they have completely ignored their own.
This "ignorance" does not help their case.
2:15 PM PST Substantial price increases for Windows 2000
"Substantial price increases"? Not only is IE not free. But, Microsoft is planning on increasing the price even further?
Microsoft simply does not think it has any creditable competition. That is clear. (And this had the promise of being a slow news day.)
2:00 PM PST Microsoft admits charging more for windows with IE in it.
Recent documents released discloses that Microsoft charges more for "feature rich" versions of the OS.
What is 98 plus IE? Feature rich, right? Microsoft is speaking out of both sides of their mouth at the same time they force the sale of unwanted and unneeded products. How can IE possibly be free if Microsoft charges more for "feature rich" versions of the OS. IE is not a feature?
So. Microsoft now admits to charging more money as more and more applications are bundled into the OS.
No one should be surprised. Again the question begs, "How much is Microsoft charging everyone for IE?"
1:10 PM PST - Microsoft charges as much as it can?
Is that the pricing strategy? It appears that it might be. But, whatever the thinking within Microsoft it looks less and less like IE is free.
Frederick R. Warren-Boulton testified that he noticed no reference to competing products when Microsoft discussed pricing issues. Sounds reasonable to me. Microsoft does not have any competition that might affect pricing decisions. (Hint: Linux is free or $40 or so. And, Microsoft just ignores it when they discuss pricing.) It appears that Microsoft is only trying to guess how much they can charge before consumers begin to complain. This is typical monopoly thinking.
That thinking also explains the campaign to convince consumers that IE is "free". IE is not a free product. You must in fact purchase it when you buy any personal computer from Apple or IBM or OEM. It is a required purchase (unless you buy your computer in parts).
I truly would like to see a resolution of the board of directors claiming that Microsoft will have to take a financial bath on IE if it is included in the OS bundle. Maybe one of their employees will testify as such?
10:00 AM PST - Microsoft did jack up prices on the OS.
I have been commenting for a long time that Microsoft, obviously having monopoly power, could easily do one of two things (or both). 1) Just jack up the price of Windows to cover bundled applications. or 2) Just add the price of the OS and IE together and sell them as a package.
The quote from Bill Gates back in 1994 suggests that Microsoft has done the latter. The quote from Bill Gates was offered into testimony as proof that Microsoft will give away IE. But, the quote said nothing about price, only "bundling". As I recall, it actually used the word "bundle".
Now, we have testimony from Frederick R. Warren-Boulton that the former may be the case. That is that Microsoft just jacks up the price of what otherwise would be an valid price for windows. Columnist's have said since Windows 98 was released that it was little more than an "fix" worth about $25. I have agreed with that assessment myself for a number of months. (Actually, it does not even fix 95 and has a number of its own problems.)
But, is IE free or not? Well if Microsoft just jacks up the price of the OS (using either choice above) and forces the sale of IE, the harm to consumers and the harm to competitors is the same as a "free" or predatory product. The importance is the impact upon the consumer. If all consumers must install and maintain IE, the market for any competitive browser is eliminated. If the OS were sold at a normal price and bundling IE in with the CD did not increase it, those consumers would not be harmed on the day of sale (but, they may be harmed later and almost certainly will). Microsoft in its PR comparing is hoping that consumers remain dumb about this and just accept the gift horse. The deceit on the part of Microsoft is that the so-called "gift horse" is not free at all. It is not only being purchased by the consumers but no consumers can avoid purchasing it either. They all have to buy it. 100% But, Microsoft is not above using consumer fraud to sell products. They have intentionally chosen to promote IE as free so as to trick consumers into parting with they money.
So. The question remains. Just how much is Microsoft charging for IE? Or, just how much has Microsoft jacked up the price of Windows? For years Microsoft has been adding feature after feature to Windows in the effort to keep the price up high. And, of course, each time it does so one or more competitors find that their market has been ruined or completely dried up.
I still contend that Microsoft's claim that IE is free is just false. A monopolist does not need to give away products bundled with their monopoly product. See choice #1 or choice #2 above. In fact, they try to charge more and more every chance they get. Bundling another application with the OS is an old trick.
The other point that was testified to this week by Mr. Warren-Boulton is that Microsoft holds monopoly power.
Now Microsoft would like to put up a few ghost stories about competition. But, the reality is that they do not have any realistic competition at all. The only product close to competition for Windows is from Apple. And, we have seen from testimony in this trial that Microsoft pretty well tells Apple what they must do including zapping possible competition for Microsoft products (Rhapsody).
Microsoft also would like to fool the public and the court into thinking that somehow Linux is a desktop OS. Well. BeOS is too. And, OS/2 is still available. And, yes some version of Unix actually run on Intel systems. But, none of these compete in any meaningful way with Windows from Microsoft.
And, as Warren-Boulton has testified, if Microsoft is not adjusting it price for windows due to this competition, that so-called competition just does not count. Microsoft knows it does not count. Microsoft's lawyers also know it does not count. But, they are hoping to fool some people with their claims anyway (even if they themselves do not believe it). The internal memo from Microsoft regarding the possibility that Compaq might write its own OS is very telling. Compaq is not alone here. HP could and has written operating systems. IBM could and has written operating systems. IBM even has OS/2. Go back and read the testimony from Mr. Soyring. OS/2 really competes more with NT than the consumer OS. However, anyone who says that it is easy to compete with Microsoft in the Consumer OS market is either lying for they nothing at all about the consumer OS marketplace. Re-read the Warren-Boulton direct testimony. Read it slow if you have to. If you have no idea what it takes to compete in this marketplace, you will certainly learn a lot from that testimony. (Warren-Boulton's testimony assures everyone that Bill Gates is testifying falsely and incompletely.)
Again, you only have to visit your local computer store to realize that Microsoft sells 90% or more of all personal computer operating systems and forces the sale of IE on all Apple products as well. So if you think you can purchase a personal computer without also purchasing a copy of IE, I suggest you try. All consumers are forced to buy IE.
If there was ever a case to illustrate the use of monopoly power to force a new monopoly in another market, this is it. Microsoft is forcing the sale of IE in practically 100% of all new personal computers. (The only exceptions appear to be those systems sold as separate parts.) Not having a modem or already having a browser application does not count. Microsoft is forcing the sale of IE to everyone. No exceptions.
What we have heard by way of testimony is that two major companies in the personal computer industry (Apple and IBM) do not intend to challenge nor compete with Microsoft for the Windows market. Actually, you could say they are trying and they both have superior products. But what? Well. Guess what? Many acts that violate antitrust laws and acts that are deemed to be unfair competition are in fact very effective in precluding competition. Hint: That is why they are illegal.
I still see comments from defenders of Microsoft acting as if the quality of the software is the only factor that determines success or failure in this business. Quality of the software is almost not relevant. Microsoft has proven this time and time again. Today, the quality of the Microsoft software is about the worst in the industry. Almost all operating systems are more reliable and offer advanced and innovative features. But, Microsoft is able to maintain its position primarily due to the prevalence in the industry and illegal acts. Microsoft's acts in regard to Java and the browser illustrate this better than at any time in the history of the industry.
November 19, 1998 - Thursday
4:30 PM PST - Microsoft still using ghost stories and false evidence to suggest that it might have competition. It does not.
Microsoft has introduced an inside Microsoft memo suggesting that it does not charge high prices and force consumers to buy unwanted products because "Compaq might decide to write its own OS?". Huh? This is a ghost story if there ever was one. Microsoft directly suppresses the Next Computer OS intended to be offered by Apple and Microsoft suggests that Compaq might do something? Microsoft blocks out OS/2 from the market with its per system sold pricing, etc., but Microsoft thinks that Compaq might decide to write their own? Microsoft and their attorneys should read the testimony from Frederick R. Warren-Boulton. They might learn something about the industry they work in. The "network" effect and "tipping" effect of a dominant OS product all but precludes any competing OS from entering the market.
Ghost stories prove nothing. Ghost stories do not even count. Sure some companies may wish they were not buying all their stuff from Microsoft. But, look at the very real experience of IBM with OS/2 and do not forget DR-Dos. The product from Apple (Rhapsody) had a shot too. But, just look at what Microsoft did with it. We have testimony in this trial that Microsoft rubbed it out directly and has prevented it from being offered on the market. Other considerably lessor known companies have also had very good operating systems (one in particular ran on Motorola and Intel chips equally well).
Microsoft should find a few employees (they could even be witnesses for this trial) that are willing to go out and start their own company by offering a product in competition with Microsoft. That is a very common event in the computer industry (except it is pretty rare for Microsoft employees). Real Networks is one example. But, Microsoft has just announced it is selling all of its shares before it tries to drive it into the ground. Yes, it will force all consumers to buy the Microsoft Media player so as to snuff out the market for competing products in that market too.
Netscape is not along here. Microsoft attempts to snuff out all companies it can. It tries even harder when they offer truly innovative products. (I guess Bill Gates can not recognize innovation even when he looks at it. Unless it is to snuff it out, as in Java.)
2:08 PM PST
As you read articles on the testimony from Frederick R. Warren-Boulton you really need to compare that testimony to that from Bill Gates. Sure the attorneys try to suggest that Frederick is not credible. That is standard practice. But, can you imagine the answers that Bill Gates would give to the economic questions? They would all be non sequiturs.
Bill Gates understands these issues. In 1994 he threatened the entire industry with bundling IE with the OS should anyone attempt to market such a product on the Windows platform. What is that? What was that threat? Well. It may or may not provide direct evidence of antitrust violations. But, it clearly proves that Bill Gates himself agrees with the conclusions and testimony of Frederick R. Warren-Boulton as to the economic force and power that Microsoft can levy upon the consumer OS industry.
That is obvious.
Bill Gates can play dumb if he really wants. But, no one in industry will believe his testimony and I suspect no one in the court room will either. Not a single attorney on either side will.
The testimony from Frederick R. Warren-Boulton is extremely important in this case. It illustrates his knowledge of the computer industry and it illustrates what Microsoft is doing to consumers and to potential competitors. Read it. If you do not know what is going on, you might learn.
And, Frederick R. Warren-Boulton knows what a monopoly is. It is really quite simple. Press releases from Microsoft are clearly intended to fool as many members of the public as they can on this issue. Maybe Microsoft can find an economist that can testify that they do not have a monopoly in the consumer OS market. This will be real interesting to see. Press releases, PR and advertisements can say just about anything and coming from Microsoft they clearly have made some truly unbelievable claims.
12:40 PM PST
Just how much does IE cost? I have written an article that suggests that a monopolist need not give away any product when bundled with the product over which they hold monopoly power. It is true that they do not or would not have to give it away. The testimony from Frederick R. Warren-Boulton suggests that the DOJ has accepted the claim by Microsoft that IE is a free product. They may stick with this admission by Microsoft. Certainly a free product can easily qualify as a predatory price. And, it may also violate the unfair competition laws of many of the states (do not forget that some 20 states think their laws have been violated too). The truth is that we do not have any testimony yet on the pricing decision by Microsoft for the 98 and IE products. (You can read my article and estimate the cost of IE to consumers as well as I can.)
It might be that Microsoft has actually hired economists to tell them the maximum price that Microsoft could charge for new OS licenses and upgrade OS licenses before consumers would even consider alternative operating systems. For many consumer applications $50 is a magic number. Maybe $100 for an upgrade OS is a magic number. So the question could be "is 98 $100 and IE zero or is 98 zero and IE $100?". Or, are they $30 for the OS and $70 for IE as my article suggests if R&D figures were used?
Certainly if Microsoft wanted to fool consumers (it is called deceit and consumer fraud) it would announce that the OS is $100 and IE is the free one. Did the board of directors decided this pricing scheme? Did Bill Gates? Did someone else in Microsoft decide how much of the product price is attributable to IE?
We do expect a number of Microsoft employees to accept a seat on the stand. Maybe one of them will testify truthfully and tell us how much IE is costing consumers. Frederick R. Warren-Boulton can easily testify as to how much they could charge and he is clearly qualified to conclude that they charge higher prices that they would if Microsoft had any competition. And, right now (compared to Bill Gates) he is the only witness that can address this critical question.
Just how much is Microsoft charging for IE? Is it zero and predatory? Is it $140 and harmful to the consumer? It must be one or other or a blend of the two (which would be harmful to consumers and predatory to competitors). It can not be neither. If everyone is forced to buy it and it costs hundreds of millions in R&D, the answer needs to be determined.
11:52 PM PST
The cross examination of Frederick R. Warren-Boulton begins. Read his direct testimony. It clearly illustrates the realities of the consumer OS market and the role that Microsoft is playing out.
It is actually quite humorous that Bill Gates testifies like a forgetful dufus, Microsoft attorneys in their press releases claim that Microsoft has no monopoly (a claim, by the way, that removes all credibility they ever had), and some journalists prove they do not have the slightest understanding of the dynamics of the computer software industry (names of journalists withheld).
And, then you have Frederick R. Warren-Boulton, an economist, that clearly explains it all. Ask any executive in the computer industry you want (save for those you know give false testimony) and they will agree with what Frederick R. Warren-Boulton is saying.
1. Microsoft has a monopoly and monopoly power.
2. Microsoft uses that power to charge higher prices (either by bundling
or just for the money of it).
3. Microsoft uses that power to preclude or prevent competition to
its monopoly product.
4. Microsoft is harming and will continue to harm consumers by preventing
choices in the market, charging high prices and forcing the sale of unwanted
products.
Even Bill Gates agrees with Mr. Warren-Boulton. Bill Gates himself said that Microsoft will just bundle IE to preclude competition. In 1994, that threat was offered directly to the industry to suppress any competition for browsers on any consumer OS and Bill Gates made that threat because he understood the very concepts laid out in the Warren-Boulton testimony. (Hint: Bill Gates is not a dumb dufus at all, he is only acting like one, hoping no one will see that so he can continue to exercise his power illegally.)
Sometimes the truth is obvious.
November 18, 1998 - Wednesday - Day after Sun is issued an injunction against Microsoft
2:00 PM PST - It is like a breath of fresh air.
You really need to contrast the testimony of Frederick R. Warren-Boulton and Bill Gates.
Bill Gates has accumulated a personal fortune of immense proportions and runs Microsoft Corporation. But, if you compare his testimony with that of Frederick R. Warren-Boulton you would think that Frederick runs Microsoft and Bill is the academic who can not express a single thought or idea correctly without at least one memory failure..
Think about it. False testimony is not that hard to recognize.
12:36 PM PST
The direct testimony for Frederick R. Warren-Boulton is released.
This is interesting testimony. If you find economists boring and dull it could be rough reading. But, it is pretty much all there. The only part I would disagree with is that IE is free. It could be free as Warren-Boulton suggests. And, if it is, it is truly predatory. But, the question remains. Maybe Microsoft will question the conclusion by Mr. Warren-Boulton that no part of the 98 price is attributable to IE.
Also you might want to take a look at a couple of articles written to illustrate the cost for consumers to switch their operating system should the price be too high. Both the "Bubble Gum deal" and the "Jawbreaker deal" address this issue. You can decide for yourself just what you will pay to avoid switching. If you find yourself buying the bubble gum or jawbreakers, Frederick is correct.
It will be interesting to see if Microsoft can invent some new ideas on why all consumers must be forced to buy IE and forget any desires to pick and choose their own applications.
9:22 AM PST
One day following the injunction requiring Microsoft to abide by its contract with Sun and what is Microsoft up to? Trying to figure out the best way to NOT go along.
Microsoft is so hell bent on sabotaging Java that it refuses to honor its own contracts, refuses to abide by the Java License agreement and is apparently plotting on how it can still manage to sabotage Java in light of the most recent court injunction (which only requires Microsoft to do what it said it would do).
This is getting to be a bad habit. Agree to a consent decree, then ignore it. Sign a license agreement, then ignore it. Have two preliminary injunctions issued against your practices, then plot to ignore those too.
The court is going to notice that Microsoft absolutely refuses to abide by any agreement or court order if it can possibly wiggle out of it. This notice may be very significant when it comes time to decide upon remedies in the Microsoft antitrust trial.
Any remedy must be complete and final.
As to the Java litigation it is becoming very clear that Microsoft will do whatever harms Java the most. What Microsoft is demonstrating with Java is a very well thought out and deliberate attempt to suppress innovative products. Innovative products that completely overshadow anything that Microsoft has ever done.
Microsoft will be forever known as the company that suppresses innovative products to the fullest extent possible via both legal and illegal means.
November 17, 1998 - Tuesday
4:12 PM PST - Sun wins injunction against Microsoft.
This court decision will play a major roll in the Microsoft Antitrust case.
This decision will most likely be used as evidence and proof that Microsoft uses illegal acts to suppress competition and sabotage the property of competitors. The acts taken by Microsoft in regard to Java have already been alleged in the antitrust litigation against Microsoft. This case decision will be submitted for judicial notice first thing Wednesday morning. (I assume.)
The injunction itself gives Microsoft 90 days to conform their shipping version of the JVM with the tests as required by Sun.
This is a correct decision. It supports the right of a holder of a trademark to define what that trademark means and to protect the holder against technical and intellectual attacks by license holders of that trademark.
A more detailed review of this decision and how it will affect the Microsoft antitrust litigation will be forthcoming.
3:10 PM PST
Direct testimony for John Soyring is released by the DOJ.
If you want to understand the impact of the "network" and "tipping effect" in the consumer operating system market you will have to read the testimony from John Soyring. It appears that everyone from Microsoft has lost their knowledge of the computer software industry and will only play dumb here on out.
It will also be interesting to watch the lawyers for Microsoft suggest that since IBM included a browser with OS/2, Microsoft should be able to force all consumers to buy IE. You watch. Microsoft lawyers know for a fact that monopolies are held to different standards than companies with out such raw power in their market. But, they will argue it anyway. It is a cheap argument. It does not apply. But, it may be all they have.
By the way, bundling products with non monopoly products does not work well if it affects the cost to consumers because they just buy the primary product elsewhere. A monopoly product is very very different. Bill Gates knows the difference. He even publicly threatened to bundled IE with the OS knowing that no customers could avoid buying both if he did so. (Of course, Bill Gates forgot all about that knowledge and understanding he had back then in 1994.).
And, just as the testimony from Mr. Weadock could have been expected to show, most Microsoft customers also understand that they have no choice but to buy, install and maintain any product that Microsoft bundles with the OS regardless of its merits or cost.
If you are forced to buy IE, then you are forced to buy IE. (The only unknown is the price.)
1:04 PM PST
As the testimony from Glenn Weadock draws to a close a very startling admission is made by Microsoft.
Glenn Weadock's testimony is primarily one illustrating that customers of Microsoft do not want to be forced to buy, install and maintain IE. But rather, for some very profound reasons, they almost all prefer to pick their own applications.
In typical Microsoft arrogance, they have called that testimony "not relevant".
To Microsoft, the needs of the customer is not relevant. That is very plain to see. Does Microsoft truly think that the needs of their own customers are not relevant? It appears that they do. Their attorneys even go out of their way to make the claim.
The only thing of importance to Microsoft is being able to force the
sale of IE. Now if we could just find out how
much Microsoft is selling IE for.
10:36 AM PST
As the cross examination of Glenn Weadock comes to an end it appears that the Microsoft lawyers think that if the OS and IE can not be separated by deleting files or un-installing some code, they should be allowed to force all consumers to buy IE regardless of their needs, interests and rights.
This is a very poor argument. Any programmer worth his salt can blend the code for the Flight Simulator and MS-SQL. Does that mean that those two products can then be forced upon both types of consumers? Of course not. Does that mean that consumers will then forget their desire to pick and choose their applications according to their needs as Mr. Weadock has testified.
Do Microsoft lawyers really think that a product is defined by the files used to make up the installation? It does not. It never has. Glenn Weadock is correct when he testifies that customers and manufacturers define the products by the feature sets, not the file sets.
Microsoft itself defines IE as an application by its very acts of developing the application for many platforms, tracking competing products of the same kind and (just recently) buying a trademark for it.
The suggestion by Microsoft that 98 and IE can not be separated and therefore they should be permitted to force all consumers to buy both is not only a bogus argument but also a very weak one.
Leave it to Microsoft to come up with a technical reason to force all of their customers and the customers of Apple to buy IE regardless of their needs, wants and rights.
9:48 AM PST
As you consider the testimony of Glenn Weadock, keep in mind that Microsoft itself treats IE as an application in almost all respects. They develop the application for other platforms (IE not an OS there) and they track the market share. The industry tracks the market share as well. Even statistical packages for web pages separate out surfers according to the browser used. All browsers have version numbers separate and apart of all operating systems. Even Microsoft offers a beta version independent of their own OS. (Is IE 5 an application? It clearly is.)
Everyone in the industry, both customers and manufacturers treat the browser as an application. Only Microsoft in the hope that it can legally force the sale of IE upon everyone claims IE must be purchased each time you buy an operating system from them or Apple. This idea flies into the face of a very elementary principal regarding the separation of the operating system and applications. And, as has been mentioned even Microsoft continues to treat IE as an application in all respects.
I wonder if Microsoft will be able to find a single customer who will testify that they do not want to pick their own applications? Mr. Glenn Weadock's testimony clearly indicates that consumers want that choice and do not want to be forced into buying IE.
November 16, 1998 - Monday
11:35 AM PST - Microsoft clearly is forcing unwanted products upon all consumers.
Take a look at the direct testimony of Glenn Weadock. He has effectively used his expertise to evaluate and characterize the way that consumers view the difference between an operating system and an application.
What is absolutely clear is that Microsoft is forcing all consumers to buy IE despite their needs, despite their wants and despite their rights as consumers. The only question is how much Microsoft is collecting for IE.
And, what is Microsoft going to do? They will try to discredit Glenn Weadock's testimony and put their own "dummies" on the stand to play just that, "dumb". This is horrible strategy for Microsoft. Trying to make Mr. Weadock look bad only insults major Microsoft customers. But, then if you are going to violate antitrust laws, unfair competition laws and use deceit to sell products you might as well go around hiring lawyers to insult your customers too.
10:30 AM PST - Microsoft sensitive about the bundling issue. (Bill did say he would just bundle it.)
As the cross examination of Glenn Weadock begins it is clear that Microsoft wants to define an operating system as everything that Microsoft can bundled with it. Microsoft still fails in its suggestion that TCP/IP is part of an operating system or that a browser is part of an operating system. TCP/IP services might be bundled with the OS just as a backup utility might be, but that does not make it part of the OS, only part of the minimum purchase.
Microsoft itself does not even treat IE as part of the OS or it would not or could not offer it as an application for HP-UX, 95, Solaris, NT and Apple systems. In fact, nothing that IE does can possibly be part of the OS or it just would not have the same functionality on all of those other platforms not written by Microsoft. Anything IE does only when installed on 98 is not a browser function at all. It can not be.
At Microsoft's insistence IE must be universal as an application or it is of little value at all. They would never have a "standard" (which is what they are trying to force upon everyone) unless it performs the same service on Solaris and 98.
10:00 PST - Bill Gates continues to play dumb and stupid.
A video tape played in court makes Bill Gates (personal fortune of some 50+ billion dollars) look dumb, stupid and a bit of a dufus?
This is nothing but very poor acting and false testimony.
Microsoft continues to force 100% of all consumers for personal computers to buy IE and the main guy plays dumb?. Lies, deceit and misrepresentation are the only words that can be used to describe this act. The act of forcing the sale of IE upon consumers is only a violation of antitrust law. Consumer fraud is the only way to describe the "act" being put on by Microsoft.
Coming up: (Meaningful economic testimony offered by those who actually say what they think and know instead of hiding it.)
The direct testimony for Glenn Weadock was released last Friday by the Department of Justice.
As reported by the San Jose Mercury News Mr. Weadock's testimony will point out that the bundling of an application (IE) with an operating system (98) not only offers little or no benefit to consumers but also harms them significantly.
Bundling any application with the OS will have essentially the same harmful effect. An internet browser is no different. In fact, you can take almost any option available on automobiles and illustrate the same harmful effect. It is very simple.
If you force 100% of all consumers for a particular product to also purchase additional options (see "How Much does IE cost anyway?"), most consumers will be harmed directly by that and few if any will actually realize a benefit. Let's illustrate with a typical option pack for automobiles. The package consists of leather seats, a 10 CD-player, a cell phone and a GPS unit. Each of these items is truly an option on almost all automobiles. Some very expensive cars may only come with leather seats, but most will allow you to deduct for a cloth interior (or at least they will allow you to order a cloth interior). As far as I know, no car model requires you to purchase a GPS unit. However, such a product is available for all models.
Now lets assume that the auto manufacturers got together and forced all consumers to buy the option pack including the seats, Cd unit, cell phone and GPS unit. If you insist you can even assume that the price for none of the car models was increased. Further assume that all manufacturers claim that the option is a "freebie". (What does everyone know? The price of all cars would have dropped without the option pack.)
Now. Are consumers better off or worse off? Microsoft would claim that all consumers receive a benefit. But do they? The simple answer is clearly not. Why?
1. Many consumers do not like leather seats.
2. Many consumers already have a cell phone and do not want another
one.
3. Many consumers would rather pick their own entertainment center
for their car.
4. Most consumers have no idea how to use a GPS unit if they had one.
5. It is deceitful to suggest those options do not in fact keep the
cost of all cars significantly higher than they would be otherwise.
[This compares precisely with IE. Most consumers already have a browser, do not want a browser or would rather pick their own browser. Only a very small minority would want to upgrade their browser by purchasing IE on the same day they upgrade their OS or even buy a new system. They no more want to be forced to upgrade IE than to upgrade their word processor on that day.]
This forced option pack is almost guaranteed to harm almost everyone. But, Microsoft claims their bundle benefits consumers. Microsoft itself does not really believe this but they will lie about it to force the sale. Just which consumers does it benefit, anyway? The majority are clearly harmed both financially and otherwise too..
Only those consumers who would buy that specific option pack when priced competitively as an option would benefit. If all consumers are forced to buy the "leather seat-to-GPS" package, then yes, that selection would be a cheaper "option pack" assuming economies of scale in manufacturing (this is not the case in software however). But forcing all consumers to buy it, just so a few might actually get it a little cheaper is clearly wrong. And, it is deceitful to lie about the cost of the option pack in the first place.
[Microsoft does not even have the integrity to avoid lying about the cost.]
There is little doubt that Microsoft is financially harming consumers to subsidize its developers. Subsidizing developers even strengthens the monopoly that Microsoft already has. This also accounts for the number of ISVs who claim to support Microsoft and even pose as consumers in favor of the whole idea. They are being just as deceitful as Microsoft by not disclosing their financial interest in forcing consumers to buy unwanted products. Some big fat shareholders might also be disguising themselves as so-called "consumers" claiming to support this great new idea of bundling applications with the OS. Anyone who suggests that all consumers should be forced to buy the IE and OS bundles is most likely just a salesman in disguise. The word deceit comes to mind again. And, consumer fraud follows if deceit is used to encourage sales.
The upcoming testimony by Glenn Weadock is highly important. Why? Because it directly addresses the harm to consumers caused when a monopolist forces consumers to buy unwanted products.
Microsoft is very deceitful when they suggest a product costing hundreds of millions in R&D does not increase the cost of a personal computer to all consumers. Remember IE is bundled with Apple products too. So. Almost all consumers are forced to purchase IE with a total and complete disregard for their very fundamental right to pick and choose the applications "they think" are best for their needs.
Microsoft is going beyond arrogance to think they know what every consumer must buy from them. Or to think that if you buy any Microsoft product you MUST ALSO PURCHASE IE. Microsoft is using its pure and powerful monopoly power to force the sale of IE upon 100% of all consumers buying personal computers (including Apple products...remember...they forced Apple to sell IE by threatening them with bankruptcy).
This is the most flagrant abuse of monopoly power in the history of this country. No company has ever shown such disrespect for their own customers. No company has ever forced more consumers to purchase unwanted products. No company has ever levied a greater financial harm upon consumers.
Almost all companies in this industry are required to offer products to the market at a fair and competitive price and then try (via advertisements, etc.) to convince consumers to try their products. The monopolist, Microsoft just takes your money.
Personally, I have estimated that up to 70% of the total cost of the OS is attributed directly to IE. To suggest IE is free is ridiculous. The truth is that IE is costing plenty. The only question is "How much does IE cost?". Take your best guess and multiply by 130 million or so. That is the financial harm directly caused by forcing the sale of IE. Mr. Glenn Weadock will testify as to additional indirect harm caused by forcing the sale of IE.
Every time Microsoft claims IE is free, it is just expanding upon its campaign of deceit. And, the use of deceit to sell products is called consumer fraud.
There is no reason at all that a monopolist need give away a product bundled with a monopoly product. None at all. And, Microsoft has not done so. Microsoft is selling IE. And, it is forcing the sale upon everyone. IE is just the latest reason that the cost of the OS has not declined but stayed high for everyone.
Daily Wrap and Flow - Week Four
Daily Wrap and Flow - Week Three
Daily Wrap and Flow - Week Two
Daily Wrap and Flow - Week One