Posted on 06/20/2002 4:40:17 PM PDT by Alan Chapman
A divided Iowa Supreme Court last week reinstated a class action lawsuit against Microsoft brought by Joe Comes on behalf of himself and his fellow Iowans who purchased computers that came pre-installed with Windows 98. As end-user licensees of the operating system, Comes charged that he was forced to pay “a monopoly price” for the privilege of using Windows, thus he should be justly compensated for this crime against humanity.
Under federal antitrust law, Comes has no case, since the U.S. Supreme Court has held that secondary—or “indirect”—consumers may not assert standing in antitrust cases, since such consumers do not suffer a legal “injury” as the result of companies running amok and subverting competition. Iowa’s own “Competition Law” says that the state will follow the federal interpretation in state antitrust cases, so that the enforcement of said laws are at least consistent.
The Iowa Supreme Court’s decision changes all that.
Now, in the state of Iowa at least, anybody who has ever bought or used Windows can essentially join a class action against the company for antitrust violations.
The court majority ignored the law and decided to impose their own view of what antitrust law should be—making companies pay for daring to produce and compete—and in doing so introduced further chaos into the already “Wild West” world of antitrust litigation. Now interest groups that have an ax to grind with a company can go forum shopping for states that allow secondary consumers to sue under local antitrust laws. This means that any company which sells products via retail will be potentially liable for charging prices that a judge or jury deem “too high”, “unfair” or “anticompetitive”.
Lost in all this is any sense that the consumers are voluntarily purchasing these products in the first instance. Joe Comes didn’t have to buy a computer with Windows pre-installed. He could’ve bought a Mac or installed Linux on the Intel machine he did buy. Instead he’s using the courts like it’s a giant rebate center.
He’s asking us to morally condemn Microsoft for having the audacity to actually take his money when he willingly offered it to them. And the Iowa Supreme Court sees nothing wrong with this—after all, if Microsoft was willing to allow Joe Comes to buy their “monopoly priced” software, who knows what the company will do tomorrow, they could be selling you software that you might want. And then the vicious cycle of supply-and-demand will spin completely out of control.
To: *libertarians
. 2 posted on 6/20/02 4:40 PM Pacific by Alan Chapman
There's something rather hypocritical about libertarians supporting corporate monopolies, don't you think?
To which corporate monopoly are you referring?
It doesn't seem to make much difference.
It's my simple observation that libertarians seem to defend all corporate monopolies.
I get the impression that libertarians prefer corporate "rights" over those of individuals.
Why bother making a point like that?
Consumers get the best deal in a fractured, competitive market where there's no monopolist influence at all.
Bust up the monopolies and restore competition to the market.
What? The $15 - $25 the OEM computer manufacturer pays to Microsoft for Windows? That is hardly a "monopoly" price.
The flaw in that reasoning is that even if he installed Linux or another OS, he still would have been paying for the Windows license. On the other hand, there have always been manufacturers selling PCs with no OS installed. On the third hand, no major OEM would dare to do this, since they fear retaliation by Microsoft.
It doesn't seem to make much difference.
An evasion.
It's my simple observation that libertarians seem to defend all corporate monopolies.
Which corporation do you believe is a monopoly, and why?
I get the impression that libertarians prefer corporate "rights" over those of individuals.
I believe your assessment is prejudiced by your own misconceptions about the market.
How has anyone been gypped?
Not really.
Which corporation do you believe is a monopoly, and why?
We can stay on topic with Microsoft: excessive market share / lack of any real competition.
I believe your assessment is prejudiced by your own misconceptions about the market.
No, MicroSoft truly doesn't have any real competition.
Fair enough. But, as you pointed out he could've bought a computer from a dealer with no OS installed.
Everybody I know who is a Linux aficionado never buys a computer with Windows pre-installed. They either build the computer themselves or buy it from a dealer who sells PC's with no OS. I think the complainer in the article just wanted something for nothing.
Ten years ago the cost of a copy of Windows was about $100 retail. The cost today? The cheapest that I have found a full copy of any supported version of Windows is around $120. Now I'm sure that the price is lower in large quantities, but that was true then too.
This is the cost of a monopoly. A monopoly has no market to push prices lower. A monopoly has no market to force higher quality software.
The perfect example of how a monopoly costs is the cost of a minute of long distance in 1975 and the cost today. Even accounting for inflation, it's lots cheaper today. And no, local calls don't count, the Baby Bells still have local monopolies on local calls.
Whether it's retail or through OEMs, Microsoft is gouging the market with it's monopoly.
It's getting really tiresome to refute this particular lie over and over again.
Please name a nationwide OEM that will sell you a PC without Windows.
If you want a PC with support, you buy from a Gateway, a Dell or an IBM. None of them offer a PC without Windows.
If you will settle for buying a machine from a Mom and Pop operation or if you build it yourself, you can do it without paying the Windows tax. But if you buy from any of the big OEMs, you pay for Windows and you can't get your money back.
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