The Observer, March 7, 2008
Volume XL, Issue 20
Unpopular Reason: Successful businesses should not be harassed by government
These days, it seems that hating Microsoft is in vogue. With the rise of companies like Apple and Google, the technological giant is facing unprecedented levels of competition in every sector in which it dares to compete. Yet at the same time, it is coming under more governmental assault than ever. Just days ago, the European Commission announced an additional $1.4 billion in fines for "failure to comply with an anti-trust decision," according to competition commissioner Neelie Kroes.
But is this really fair? Can we really expect businesses to implement injurious policies that harm stock returns when no clear benefit exists? And should we be punishing companies for their success in the marketplace? The answer to each of these questions is no.
Even if we were to assume monopoly laws were valid, to claim that Microsoft now holds one is intellectually dishonest. Take Internet Explorer, one of the alleged monopolistic abuses of power. According to XiTi Monitor, at the end of 2007 Microsoft's share of the European market stands at 66.1 percent and is going down. That means more than a third of the market is filled by competing products, primarily by Mozilla Firefox, but also by Opera, Safari, Netscape (now a legacy browser), and dozens of others. In some European nations like Finland, 45 percent of the people use Firefox. Clearly, Microsoft isn't the major force it once was. Similarly, there is plenty of competition in the media player market, from Apple's iTunes and QuickTime players, to the former heavyweight RealPlayer, to more niche media players, like my favorite, VLC. And all of these browsers and media players, to say nothing of the open source program this article was written with, can be freely installed on Windows operating systems. Regardless of the legitimacy of anti-trust laws, it is painfully clear that Microsoft is not a controlling, unchallenged market dominator deserving of special attention or legal action.
Were the circumstances different, the question of legitimacy would then arise. It must be asked whether the role of government is to regulate industry into submission, and force the adoption of unsound practices, as European regulators want. Microsoft realizes that users want a simple operating system that is ready to go after a painless installation. For that to happen, there needs to be a built-in browser. Otherwise, most people would have no clue how to go about getting one, thus hampering access to the Internet and turning less technologically literate individuals away from embracing the Internet and other digital advancements. And what is gained from doing that? Microsoft would still have the sort of name recognition that would make their browser the most widely downloaded and installed. The average person simply does not care to test out dozens of browsers to decide which they like best. If it works, which Internet Explorer essentially does, they are satisfied. Why shouldn't Microsoft have a right to include it, or similarly expected applications like a media player?
Seeing that Microsoft is not indeed a monopoly, and that the expectations of the regulators are unreasonable and detrimental to both the market and to societal advancement, the question of punishing success must be dealt with. In nations with repressive, socialist economies, the answer would certainly be to treat profits, especially on a great scale, as wrong or criminal. Europe, while not quite socialist, leans in that direction more often than not. In its eyes, such a notion has a degree of merit. Yet, I cannot think of a valid justification for this position. Large profits suggest that the company is making a product that is either vital or well liked, and is therefore beneficial to the society and its members. To punish a company for bettering the lives of its consumers is not only irrational, but also dangerous. It stifles innovation, and drives businesses out, leading to a weaker economy. This has been seen throughout history, and is now playing out quite clearly in nations such as India. After decades of socialist-oriented economic policy, India has opened up its economy and welcomed corporations in their effort to satisfy consumer demand. Consequently, it is experiencing an economic boom. The same situation played out in Eastern Europe less than two decades ago with the fall of Communism. Clearly, this is not a fluke, but a fact. Punishing profit retards national progress.
In view of all the evidence, it seems exceedingly clear that the Europeans are on the wrong side of the issue. Sadly, we too have harassed legitimate businesses that proved highly successful, and are thus not a stellar example. The best hope any nation has of advancing, thriving, and imposing just standards is to end this alarming anti-corporate disposition, instead allowing the market to solve such matters.
Caleb Posner is a freshman political science major.
