Microsoft Blames Anti-trust Legal Fees for Price Increases

jm.one writes "BBC news has an article about the Californian anti-trust case and points out that Microsoft tells users would suffer from this: 'Somebody ends up paying for this,' said Microsoft attorney Robert Rosenfeld. 'These large fee awards get passed on to consumers.' Do they really understand why there are laws?"

Comments

Cost of doing business...

[jarich]

MS seems to factor in anti-trust suits as the cost of doing business and rather than take it out of their profits, they just ramp up the price.

I gotta buy some of their stock one of these days... it's not that I believe in the concept or think it's right... it's just working for them so well!

Re:Excellent

[tomstdenis]

As much as that sounds plausible it's not always. My Presario 2180CA laptop [for instance] is fairly Linux resilient. ACPI crashes it and repeatedly it fails to detect the keyboard [I've never had to "configure" a keyboard]. It got to the point where I just put WinXP on my laptop [well the copy that came with my laptop] because I simply just wanted to *USE* my laptop.

So really hardware vendors have to stop cutting corners before you can just blanket state "oh just use Linux".

Tom

Re:They're not complaining about the fines...

[Cryect]

When I worked at a law firm at tech support and we billed someone for 3 hours of research by our lead attorney it meant that he had spent 3 hours of research himself not his paralegals.

The other stuff does get charged just at a lower rate and such.

Econ sidebar: pricing power != monopoly

[kma]

IANAEconomist, but all of the folks saying, "It's econ 101! In competitive industries, companies can't change prices, MS is warning that they're going to change prices, ergo they're a monopoly!" should be aware that economics has retreated from this simple "price setting" == "monopoly" claim since the 1930's. Now, it so happens that microsoft really is a monopoly. However, the fact that there is some elasticity in their pricing doesn't prove it.

By the "economics 101" definition, common sense tells us that very very few modern industries are "competitive," because in almost all real industries, companies have pricing power. E.g., Nike is not a monopoly, but they obviously have a lot of latitude in how they price their shoes.

The classical market model, wherein producers have absolutely no control over the prices of their products, was a great model for the mercantile systems of the 18th and 19th century, when they were developed. If you're a cotton planter, or molasses distributor, or lumber baron, etc. your production accounts for a small enough fraction of available goods that you really can't effect prices at all; you have no choice but to take the going price.

Very few modern industries fit this model, in part because not many modern industries involve true commodities; there's always some difference between McDonald's and Burger King that's important enough to some consumers that they'll pay a bit extra for their favorite. But also because most industries have a few behemoth leaders that are responsible for most of the production. But even for chemically identical commodities like steel and salt, companies end up having pricing power because so few companies account for so much of the production. In the US, if C&H stopped selling sugar, there would be a noticeable "sugar crunch"; this effectively gives C&H an ability to price sugar, since consumers can't credibly threaten to just get all their sugar somewhere else.

(Been reading Galbraith on my AM commute lately. Would genuinely appreciate any real econ types smacking me down.)