“What antitrust law cares about in this context is leveraging monopolies of one market into another through abusive practices. The Commission found Microsoft employing two abusive practices: bundling and the deliberate obstruction of interoperability.

Horatio Gutierrez of Microsoft is quoted asking “If Microsoft can’t bundle an audio player with Windows, why can Nokia bundle a camera with a phone?” — the answer seems obvious.

It is questionable whether Nokia has 95% market share in mobile phones, but even if that were the case: There is currently no separate market for mobile phone add-on cameras, so there is no neighboring market to be be distorted by monopoly abuse.

If Nokia had 95% domination and if there were such a market, Nokia might find itself in conflict with antitrust authorities if it took active steps to ensure that a) all its phones always came with the camera included and there is no way to buy the phone separately; b) removal of the camera would be very difficult for a normal user and potentially end up damaging the phone; c) the phone would be built in ways to make sure cameras of other vendors would not work and it would be impossible to buy both together.

Microsoft was found doing all of the above with its media player.”

Read the rest of the analysis here:

http://www.groklaw.net/article.php?story=20070923170905803

Very good read.

I think you might have seen the light now on the Nokia ambit too …

Adobe owns much of this market today, not yet a monopolist. The real question is will Microsoft’s monopoly in the OS give them power they could abuse to push Adobe out… it’s the abuse of power that is illegal and which I do think Microsoft needs to keep in check.

Just my opinion of course. A few years back I did take a course on the subject, but by no means would I consider myself an expert in the practice. I think this is good for the industry, and that’s good enough for me.

The world is not as simple as it seems, but I’ll not be surprised if this time next year certain search company is facing similar questions.

http://www.thecorporation.com/

Simon works for a company that is pretty unusual in its high standards of behaviour. But even Sun gets dinged for some of its activities.

Companies of all shapes and sizes ignore laws on, for example, pollution and treatment of waste all the time. GE is a good example, as documented in The Corporation. People says its a good green citizen. I am not sure the Hudson River would agree.
http://www.cleanupge.org/gemisdeeds.html

Companies “bend the rules” or break the law all the time, when those laws are seen to interfere with the business of profit. Corporations are about what can be got away with, not just treating all laws as inviolable.

If MS took its shareholder responsibility seriously, it would recognise itself as an income play rather than a growth stock and pay more regular and generous dividends.

I don’t know of any ‘honest’ marketplace where improving shareholder return excuses illegal activity

As Simon points out, Nokia might be a monopolist camera manufacturer – no problem in itself. It is abuse of that position that is immoral (and illegal in most Western economies) – if Nokia uses its position to prevent (e.g.) Canon from competing in cameras, then it should find itself in Microsoft’s position – convicted and fined.

Your point about MS appreciating antitrust law reminds me of the telco market here – here in Aus Telstra often mimics MS behaviour as the dominant telco … but complains in NZ about Telecom NZ (dominant there) treating them mean.

Finally – I certainly “engage” with the notion that there are pockets of MS doing great things, and not ‘being evil’ … but personally I wouldn’t accept an offer of employment with MS without significantly more evidence that their business model was changing from the ‘asymptotically approaching illegality’ (I’m not quite as fervent as Simon, but that’s a good line!)

i still think it would be good to have some clearer principles, so we didn’t need to leave it up to the lawyers quite so much.

i dont think it is reframing per se. i mean the frame is the same.

i am sorry but i do believe, whatever their reasons for making the arguments they do, that some clarity would be good in this space. I mean look at the current spat between the EU and the DoJ on the subject.

It is odd to me that antitrust law allows market dominance through adjacent market acquisition

They are a monopolist (which is not illegal) and they have been found guilty in both the US and the EU of abuse of that monopoly (which /is/ illegal). That is nothing to do with innovation and everything to do with the maintenance of an open market. This is not about “bundling” or about “freedom to innovate”; it is about monopoly abuse by a company whose guiding principle is to asymptotically approach illegality. It seems their reframing exercise is working well.