Might Makes "Merit"?

Monday, September 17, 2007

This story on the EU's most recent assault on the practice -- and concept -- of free enterprise features the most ironic quote I've ever seen in a story about a misguided attempt by the government to promote "fair" competition -- followed immediately by a confession that such efforts by the government have no basis in reality!

[EU Competition Commissioner Neelie] Kroes told a news conference: "The court has confirmed that Microsoft can no longer prevent the market from functioning properly and consumers are entitled to benefit from choice and more innovative products."

An appeal against the ruling is possible only on points of law and not of fact.

Asked how the Commission would assess progress in the Microsoft case, Kroes said: "A market level of much less than 95 percent would be a way of measuring success ... You can't draw a line and say exactly 50 (percent) is correct, but a significant drop in market share is what we would like to see." [bold added]
Capitalism, as Ayn Rand once noted, "is a social system based on the recognition of individual rights, including property rights". This ruling against Microsoft violates its intellectual property rights for one thing. For another, it works against the very existence of a free market by forcing a vendor to offer goods it doesn't wish to sell and its customers to subsidize the existence of this product. Furthermore, it forces a company to essentially offer opportunities to its competitors!

Microsoft, being unable (unlike the government) to employ force to alter how anyone would behave when left to their own devices, was never able to "prevent the market from functioning properly". But the government can and it is -- and in the name of allegedly forcing a free market on the people of Europe!

And notice the criterion for judging whether Microsoft has been "properly" reigned in: A reduction of its market share. A lawyer for the EU puts this "standard" to the lie:
"If Microsoft, competing on the merits, achieves more dominance, then so be it," Thomas Vinje, lawyer for the European Committee for Interoperable Systems (ECIS), told journalists.
But how does anyone know that Microsoft's market share isn't due to its merits in the first place, rather than its alleged refusal to allow competitors' software to operate smoothly on Windows? What if Microsoft has been "competing on its merits" all along, or has even hobbled itself slightly through its well-known interoperability problems?

It seems to me that a high market share is being taken here as evidence that Microsoft is somehow "cheating" its customers, and that a government remedy is therefore in order. And when Microsoft figures out a way to take this set of rulings into account (or simply continues providing what the market demands), its continued dominance will "prove" that another round of regulations and fines is in order.

-- CAV

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