[Sussex] A development in the SVO v IBM case

[Geoffrey Teale]

Adrew Guard wrote:
<snippage>
> For people who don’t know, once upon a time not so long ago IBM was the
> big bad wolf in IT from view point of USA government.  

Less the government, more it's competitors.

> IBM was the boss of
> IT, it controlled the mainframe market.  

A good point, but it's worth noting that at it's peak IBM never 
controlled the same percentage of it's market as Microsofts Windows 
enjoyed of its market, IBM had a broader control over IT however - it 
was in every market and it locked you into using it's software if you 
wanted to use it's hardware (and visa versa).

Microsoft has been tring to emulate what IBM had in the last few years.

> To make long story short they got
> in lot trouble because of this but it the USA having a monopoly on a
> market is not a crime.  

That's an interesting statement.   Monopolies are not inherently a crime 
  anywhere.  If I start making a device to coat turnips in chocolate I'm 
pretty sure I'll have a monopoly in that market, and I  wouldn't be 
comitting any crime (well, maybe a crime against good taste, but who can 
say what that is).

Both IBM and Microsoft have been on the receiving end of antitrust 
actions - these aren't actions that inherently punish them for being 
monopolies, but rather for the actions they took to become monopolies or 
the actions they took to maintain those monopolies.

Monopolies are extremely bad in a free market economy* they completely 
undermime the foundations that make a free market economy work.  For 
this reason antitrust laws exist to ensure that where monopolies do form 
they can be forcebly restricted from using the power they have to stop 
others taking some of their market share.  It's a very strange area 
generally - an action that could be perfectly legal if you control 30% 
of a market may well be deemed to be an antitrust violation if you 
control 80% of the market.

This of course all falls down in practice because in free market 
economoies money equals power and dangerous monopolies have so much 
money that even their own government rarely matches them for power. 
Given that Microsoft just announced profits that are roughly equal to 
the GDP of the state of New York and they have both the US and UK 
governments (and various others throughout the world) sucking on their 
tit you have to wonder who it is whose going to take them down.   Right 
now  our best hope is that the EU has enouh good incorruptable people to 
push through the antitrust measure in Europe.

Back on the subject of IBM - the real reason the action against them 
fell down was that IBM made big errors in the PC market (they basically 
set up Microsoft as a big player and then Microsoft turned on them along 
with the clone manufacturers).  By the time IBM's antitrust case came to 
a head IBM were already on the verge of bankrupcy.  For more info on 
this period in IBM's history take a look at "Who says's elephants can't 
dance" by Louis V. Gerstner Jnr available at amazon:

http://www.amazon.co.uk/exec/obidos/ASIN/0060523808/qid=1107084033/ref=sr_8_xs_ap_i1_xgl/202-4065044-0395857



Footnotes:

* Fortunately there are no free market economies in existance on this 
planet - all government intervene and all governments control 
centralised elements of the economy, i.e. the NHS, NASA, the police 
force, etc.. etc..).

--
Geoff Teale
Free Software Foundation <tealeg at member.fsf.org>