Microsoft Hatred FAQ

[Steven D'Aprano]

On Thu, 20 Oct 2005 09:47:43 -0700, T Beck wrote:

> So what I'm getting here is, that they abused their monopoly power to
> secure their initial deal with IBM.  

No they didn't. They didn't have a monopoly -- they didn't even have a
product. (Lying to IBM, while unethical, is not against the law.)

Microsoft's success is directly attributable to one thing: the US
Department of Justice was investigating IBM for abuse of *their* monopoly
position, and where threatening to split IBM up.

Since the DoJ back in the 1970s actually had teeth, IBM was seriously
concerned to not only obey the law, but also been seen to obey the law. So
even though they were quite capable of creating their own operating system
for the PC, they went out and licenced a third-party product.

Unfortunately, in IBM's rush to sign an agreement quickly, they allowed
Microsoft to pressure them into a licence where they paid for every PC
that they shipped whether or not it had DOS on it.

> Nobody made IBM sign that deal, IBM thought that it
> worked out OK for both parties.  As for later deals with OEM
> manufacturers, if it's OK for MS to make that deal with IBM, 

It isn't okay. It is anti-competitive behaviour, and should be discouraged.

> then why
> does it suddenly become an "abuse of their power" if they're using the
> same business model?

That's basic economics. Something which can be allowed or ignored or even
encouraged when done by small businesses in a competitive market can
easily become harmful and bad for the economy when done by a monopolist or
duopolist in an uncompetitive market.


-- 
Steven.