Posted by
ryuzaki0
on from the you-knew-it-would-happen dept.
mochaone writes "The NY Times has an article [free reg. req.] about some lawyers in California who plan on filing a suit Monday - that's today - on behalf of some victims of Microsoft's monopoly power. Can you say, 'Open the floodgates?'"
For those without passwords...
by
Anonymous Coward
·
· Score: 5
November 22, 1999
Microsoft Faces a Class Action on 'Monopoly'
By STEVE LOHR
Lawyers say they will file a class-action suit against Microsoft on Monday on behalf of millions of Californians, in the first of what legal experts say could become a flood of private litigation springing from the Justice Department's antitrust action against the company.
The suit, to be filed by three longtime class-action lawyers, will accuse Microsoft of using its monopoly in operating systems software to overcharge buyers of Windows 95 and Windows 98. The complaint does not estimate the financial impact to Windows users, but the lawyers are seeking triple damages if the suit leads to an eventual finding of financial harm.
The big software maker's vulnerability to private suits increased sharply earlier this month when Judge Thomas Penfield Jackson issued his findings of fact in the government's antitrust case against Microsoft. Jackson concluded that Microsoft is a monopoly whose anticompetitive acts have stifled innovation and harmed consumers.
Unlike conclusions of law, a judge's findings of fact in a federal antitrust case are not generally considered admissible as evidence in private suits. But Jackson's findings agreed so strongly with the case presented by the Justice Department and 19 states that antitrust experts say his final verdict, expected early next year, will almost surely find that Microsoft is a monopoly that violated the law.
The biggest financial threat to Microsoft may come not from corporate suits, but from class actions on behalf of the millions of users of the company's industry-standard Windows operating system. Such consumer suits, legal experts say, have the potential to cost Microsoft hundreds of millions of dollars, perhaps even billions, in damage claims. "This is the start of the race to get to the courthouse," observed Stephen Axinn, a partner in Axinn, Veltrop & Harkrider who is an antitrust litigator. "It could be like the tobacco litigation, in the sense that you have lots of plaintiffs lawyers in different states sharing information."
Reducing the financial risk from such litigation, according to legal experts, should be a powerful incentive for Microsoft to seek an out-of-court settlement in the government case. The chances of a settlement appeared to increase last Friday when Jackson appointed Richard A. Posner, a federal appeals court judge and leading antitrust scholar, as mediator in settlement talks between Microsoft and the Justice Department and the states.
"The prospect of a flood of private follow-on cases -- with their triple damages in private antitrust cases -- are lawsuits with potentials that Microsoft simply cannot ignore," said Herbert Hovenkamp, a professor at the University of Iowa law school.
Yet, publicly at least, Microsoft insists that its risk from private antitrust suits is exaggerated. "That litigation is something we're prepared to defend and defend aggressively, if necessary," said Tom Burt, a Microsoft lawyer.
In consumer class actions, legal experts say, Microsoft has defenses that will lessen its potential liability and present formidable obstacles for plaintiffs. For example, most computer users do not purchase Windows directly from retail software stores in shrink-wrapped boxes. Generally, the operating system is already loaded on personal computers when they are purchased. An estimated 90 percent of Windows 98 users got it preloaded on new machines.
The legal significance is that a 1977 Supreme Court ruling -- the Illinois Brick Company vs. the State of Illinois -- declared that indirect purchasers of goods could not recover damages in class-action antitrust cases.
Since 1977, however, 18 states including California and New York have passed laws allowing indirect purchasers to qualify for triple damages in antitrust class actions.
And while Jackson's findings do provide a road map for plaintiffs' lawyers, there remains a lot to prove in court. Jackson, for example, found that Microsoft has a monopoly, but he did not say precisely when it achieved monopoly status. He found consumers were harmed by Microsoft, but the class-action lawyers must put a figure on how much users were overcharged.
"The econometrics on damages will be very complex," Axinn said. "There's no question that Microsoft has some good cards to play on defense."
Still, Jackson provided class-action lawyers with some tantalizing details. In asserting that consumers may have paid more for Windows than they would have in a competitive market, he cited a Microsoft study suggesting possible prices of $49 and $89 for the retail upgrade to Windows 98. Microsoft chose to charge $89, which the study identified as the "revenue maximizing" price.
"That portion of the judge's findings was an invitation to a class-action lawsuit," said Robert Litan, a former senior official in the Justice Department's antitrust division who is now at the Brookings Institution.
Microsoft replies that the November 1997 study was garden-variety pricing analysis. Trying to estimate an optimal, or revenue maximizing, price is something that every consumer product company routinely does for each of its offerings.
The judge's discussion of the Microsoft pricing study, according to Terry Gross of Gross & Belsky in San Francisco, is "a clear marker." But, he said, it is mainly the overall drift of Jackson findings that provides a solid starting point for the class-action suit that he and his colleagues are filing.
"Throughout the judge's findings," Gross said, "he makes it clear that all Windows users were harmed by paying too high a price for Windows."
The class action, which the lawyers plan to file in California Superior Court in San Francisco, does not specify the number of members in the class of both individual and corporate users of Windows. But Gross estimated that the number in California was "at least 10 million," and he said the suit covers Windows users since the introduction of Windows 95. The complaint does not estimate the financial damage to Windows users in California.
Earlier this month, a small New York advertising company that purchased Windows, Seastrom Associates Ltd., sued Microsoft and sought class-action status to represent thousands of similar corporate customers in New York state.
But to take on Microsoft in a class action, legal experts say, will require experience, skill and resources. They note that the three lawyers behind the California suit -- Gross, Daniel J. Mogin of San Diego, and Francis O. Scarpulla of San Francisco -- are experienced state class-action lawyers who have worked for two decades on antitrust cases involving products ranging from snack foods to tires.
The lawyers say they will continue their litigation even if the federal case is settled out of court. Jackson's findings of fact alone, they insist, ease the way for suits like theirs.
"A settlement in the government's case wouldn't make our case go away," Gross said. "We still have these findings that Microsoft is a monopoly that abused its power by overcharging consumers."
Typically, only a final ruling -- not the findings of fact -- can be used as evidence in other cases. But a judge's fact findings and final ruling are ordinarily issued at the same time. Jackson took the unusual step of separating his findings of fact from his findings of law, which gave his fact findings greater importance.
Still, legal experts say Microsoft will surely challenge any attempt by class-action lawyers to build a case on the findings of fact alone.
Reposted without permission. Feel free to moderate down or delete if you need to CYOA, slashdot owner types.
Class Actions and Social Policy
by
werdna
·
· Score: 3
Several of our colleagues have observed that class actions of this kind are being brought by law firms with only $$$ in their eyes. Yea, verily this is probably the truth. Class action plaintiff firms are indeed an entrepreneurial bunch.
But several of these messages suggested that the truth of this proposition also implies that class actions so brought do not serve the purposes of justice. Here (though I primarily practice law on behalf of commercial defendants in such actions), I will part company with my/. colleagues and will speak on behalf of my bretheren at the plaintiff's bar.
It is not uncommon for businesses to engage in commercial activities in violation of the law and the policy set by legislatures, rulemakers and the courts. In many cases, there is no "real harm" to any one member of the public, but hundreds of thousands of dollars can be made, scattering the costs over millions and tens of millions of customers, each suffing only at most a few pennies or dollars of damage at most. A primary example occurs in the mis-collection of sales taxes from consumers.
Indeed, few people would even monitor this conduct, least of all the government, whose enforcement resources are limited at the end of the day. Were there no enforcement by the government, why would businesses tow the line?
The answer: because there exists a small cabal of class action plaintiff law firms who specialize in this kind of practice. They investigate these micro-violations, and bring civil actions on behalf of the consumers who were overcharged, each only pennies at a time.
True, consumers will get a pittance back at the end of the day compared to what was taken, but they will get something they would not have gotten otherwise, and at little cost and with minimum disruption to their lives. More important, the bringing of such actions STOPS the bad practices, and deters companies from "overreaching by neglect." It is easy to look the other way when your "mistakes" are making you money.
If such actions could not be brought, there would be no check on this kind of microviolation. Class action disputes of this kind (see also qui tam actions) are the only meaningful engine to assure enforcement of certain kinds of social policies.
Why let lawyers get rich at the expense of a Microsoft or other company, with little revenue actually flowing to the victims? The answer is simple: so that the company will be deterred from microviolation conduct in the future. Here is where you will find the justice.
Think ahead: a statutory class action remedy for excessive spamming by or on behalf of commercial entities!
This is why its bad to hurt M$, the only winners will be the bottom feeding scum sucking lawyers.
I'm thinking of trying to organize an anti-outrageous class-action lawyer fee system.
Basically, the idea would be something like "The undersigned refuse to be considered the member of any class in a class action lawsuit unless the lawyers agree to the following fee schedule, based on total cash payments to class members: 30% of damages up to $200,000, %20 of damages from $200,000 to $1,000,000, %10 of damages from $1,000,000 to $2,000,000, 5% of damages from $2,000,000 to $50,000,000, and 1% of damages above that $50 M. (All this working like tax schedules, so for $500,000 in damages, it would be 30% of $200,000 + 20% of $300,000.) For coupons or vouchers, fees would be based on half of the amount of coupons actually redeemed within one year of issuance."
If very large numbers of people signed such a statement and it was given legal weight, the bottom-feeders wouldn't get so rich and would have to work towards getting actual money for their clients, not just useless coupons that no one redeems.
-- Ooh, a sarcasm detector. Oh, that's a real useful invention.
As a disgruntled Windows 98 user, I have suffered extreme amounts of emotional damage from using windows, and I demand compensation! Why just last night I was downloading a 200 meg Swedish teenage lesbian erotica video on my box, and the damn thing BSOD'ed on me after 6 hours, while I was 98% done! Realizing my hours of downloading were in vain, I not only sobbed uncontrollably, but I have also lost all sexual function and have been forced to undergo months of therapy to regain it. My sex life has been destroyed thanks to MS and its buggy OS, and had I not been forced to run Windows, I would be having a delicious pr0n spree right now. Running Windows has ruined my life, and it's your fault, MS! Oh, and all that little monopoly stuff wasn't that nice either.
Re:Hey I want in!
by
Anonymous Coward
·
· Score: 3
Agressive consumer legal action is the most effective tools American consumers have to curtail abuse of corporate power.
Submitted for your approval, the facts about the McDonald's coffee suit.
Another little econ lesson...
by
itachi
·
· Score: 3
So far I've seen a lot of comments where people are yelling at each other as to whether or not MS being a monoploy hurt consumers, and if so, which consumers. So, here's the basic free market lowdown on monopolies (Which should apply to most readers, whether you like it or not)
In a normal market, you have supply and demand. Pretty basic. Price on the vertical axis, supply on the horizontal. S & D look like an x. As price rises, producers are willing to make more. As price falls, consumers want more. For instance, say 5 people would want a pc if it costs 1 million USD. 10 people want one if it costs 750,000 USD. etc on down to a whole lot of people if it costs roughly 2,000 USD. Same deal for supply - producers will make x pc's at price n. 2x pcs at price 2n. These two curves intersect at some point. Assuming that nobody interferes with the market, the intersection of the supply and demand curves will show you the price per unit of the good and the total production of the good. Now, if you can't differentiate between the various versions of the good (butter is butter is butter, no brand names), then the only difference is price. So one company charges more, and their version doesn't sell because it's more expensive. When brand names and quality get added in, it gets more complicated, but the same basic notions are there. It's an issue of paying for the consumer preferences. Take beer. Nobody could mistake Guiness for Bud, no matter what. Now, Guiness has a higher price per volume, but since consumer preferences for beer vs. pisswater come into play, Guiness can be sold at a higher price because some consumers are willing to pay more for actual beer rather than buying cheaper pisswater. However, bud and miller are priced pretty similarly, because the two goods are very very similar, and price can very easily be a differentiating factor.
I'll assume everyone is following so far. So now we have our consumer market for operatin systems. Way back when, in those long ago days of the Carter years and early Reagan years, you could buy several commercial operating systems for your computer. And they were priced in a way not too different from the beer pricing I described above. Sure, server OSes might cost more, but the consumer of server OSes feels okay because they are getting a serious OS, as opposed to something like ms-dos, which fits consumer needs but certainly wont be driving your big, bad, company mainframe. Then, time goes by. For whatever reasons, the number of OSes starts to fall. Soon, we only have the MS OS family.
Before, we had two products that were competing, and the differences between the two, as far as the market cared, were price and consumer preferences. The existance of competition kept the prices close. If consumers were indifferent to which OS they used, price was the only differentiation. Now, with just Windows left on the market, there's nothing holding prices down. So prices go up. Which means that, for any physical good, quantity produced drops. After all, putting that extra money into production just raises our costs. And, as a monopoly producer, we want to minimize costs while maximizing price. This is profit maximization. If we make software, this means skimping on the product testing while notching the price up as much as the consumers will stand. Now, our monoploy is going to set it's price based on the lowest possible production costs. Now, the lowest possible production level is going to be expensive - you build a single prototype car, you have to pretty much handbuild it from scratch. Build a limited run - you have dicounts for buying/building a part in bulk, etc. But costs scale back up as you start to use up limited resources - if you try to buy every sparkplug ever made, it's starts to get pricey. Software mucks with this, since once it's compiled, duplicating it is nearly free, so it's not entirely clear to me what the monopoly effect would have on a software company. However, there are some costs. The CD/floppy that it ships on, the manual, the box, the plastic wrap and paper with the EULA on it. So each shipped copy costs somewhere between a dollar and 10, depending on the quantities shipped. Well, it's a monopoly, so they'll make as many copies as they need to to get the lowest possible price. And they set the selling price based on that. So the consumer ends up paying more for the good than the market indicates the good is worth. Which, pardon the pun, isn't good.
If the above doesn't make sense, I probably left something out. I don't think I did, but it's been a while...
So, the conclusion, the whole point. MS is a monoploy, for whatever reasons, and abused it. Given the fact that a monopolies goods are priced higher than they otherwise would be, MS has hurt anyone who has bought a computer since MS became a monopoly. Higher prices hurt consumers - less money left to spend on other goods. And not just computer consumers, either. Because artificially high price of windows kept consumers from having that money to spend on alternate goods. Whatever the difference between the market price for an OS and the price that was charged for monoploy Windows is money that should have gone into other markets - computer games, waterskis, water buffalo, whatever. So any market that you didn't spend money in because of the inflated price of Windows was hurt by MS. Now, IANAL, nor am I an expert witness in the area of economics, but I do know economics, and I have studied economics as applied to law, and I feel relatively confident that this conclusion isn't too far out in left feild. I wouldn't try to file a class action suit on behalf of the waterski industry, but I will say without a doubt that MS has done a serious injury to free market consumers and should not be allowed to just walk away.
is this copyright violation?
by
jemfinch
·
· Score: 3
I'm pretty sure this qualifies as copyright violation. Considering that registration is free, I can't see any reason this should be supported by slashdot.
Legally, can slashdot copy someone else's news word for word? These companies make money from banners, and slashdot is bypassing that. You guys need to watch yourselves.
Slashdot Mirror
Microsoft Faces a Class Action on 'Monopoly'
By STEVE LOHR
Lawyers say they will file a class-action suit against Microsoft on Monday on behalf of millions of Californians, in the first of what legal experts say could become a flood of private litigation springing from the Justice Department's antitrust action against the company.
The suit, to be filed by three longtime class-action lawyers, will accuse Microsoft of using its monopoly in operating systems software to overcharge buyers of Windows 95 and Windows 98. The complaint does not estimate the financial impact to Windows users, but the lawyers are seeking triple damages if the suit leads to an eventual finding of financial harm.
The big software maker's vulnerability to private suits increased sharply earlier this month when Judge Thomas Penfield Jackson issued his findings of fact in the government's antitrust case against Microsoft. Jackson concluded that Microsoft is a monopoly whose anticompetitive acts have stifled innovation and harmed consumers.
Unlike conclusions of law, a judge's findings of fact in a federal antitrust case are not generally considered admissible as evidence in private suits. But Jackson's findings agreed so strongly with the case presented by the Justice Department and 19 states that antitrust experts say his final verdict, expected early next year, will almost surely find that Microsoft is a monopoly that violated the law.
The biggest financial threat to Microsoft may come not from corporate suits, but from class actions on behalf of the millions of users of the company's industry-standard Windows operating system. Such consumer suits, legal experts say, have the potential to cost Microsoft hundreds of millions of dollars, perhaps even billions, in damage claims. "This is the start of the race to get to the courthouse," observed Stephen Axinn, a partner in Axinn, Veltrop & Harkrider who is an antitrust litigator. "It could be like the tobacco litigation, in the sense that you have lots of plaintiffs lawyers in different states sharing information."
Reducing the financial risk from such litigation, according to legal experts, should be a powerful incentive for Microsoft to seek an out-of-court settlement in the government case. The chances of a settlement appeared to increase last Friday when Jackson appointed Richard A. Posner, a federal appeals court judge and leading antitrust scholar, as mediator in settlement talks between Microsoft and the Justice Department and the states.
"The prospect of a flood of private follow-on cases -- with their triple damages in private antitrust cases -- are lawsuits with potentials that Microsoft simply cannot ignore," said Herbert Hovenkamp, a professor at the University of Iowa law school.
Yet, publicly at least, Microsoft insists that its risk from private antitrust suits is exaggerated. "That litigation is something we're prepared to defend and defend aggressively, if necessary," said Tom Burt, a Microsoft lawyer.
In consumer class actions, legal experts say, Microsoft has defenses that will lessen its potential liability and present formidable obstacles for plaintiffs. For example, most computer users do not purchase Windows directly from retail software stores in shrink-wrapped boxes. Generally, the operating system is already loaded on personal computers when they are purchased. An estimated 90 percent of Windows 98 users got it preloaded on new machines.
The legal significance is that a 1977 Supreme Court ruling -- the Illinois Brick Company vs. the State of Illinois -- declared that indirect purchasers of goods could not recover damages in class-action antitrust cases.
Since 1977, however, 18 states including California and New York have passed laws allowing indirect purchasers to qualify for triple damages in antitrust class actions.
And while Jackson's findings do provide a road map for plaintiffs' lawyers, there remains a lot to prove in court. Jackson, for example, found that Microsoft has a monopoly, but he did not say precisely when it achieved monopoly status. He found consumers were harmed by Microsoft, but the class-action lawyers must put a figure on how much users were overcharged.
"The econometrics on damages will be very complex," Axinn said. "There's no question that Microsoft has some good cards to play on defense."
Still, Jackson provided class-action lawyers with some tantalizing details. In asserting that consumers may have paid more for Windows than they would have in a competitive market, he cited a Microsoft study suggesting possible prices of $49 and $89 for the retail upgrade to Windows 98. Microsoft chose to charge $89, which the study identified as the "revenue maximizing" price.
"That portion of the judge's findings was an invitation to a class-action lawsuit," said Robert Litan, a former senior official in the Justice Department's antitrust division who is now at the Brookings Institution.
Microsoft replies that the November 1997 study was garden-variety pricing analysis. Trying to estimate an optimal, or revenue maximizing, price is something that every consumer product company routinely does for each of its offerings.
The judge's discussion of the Microsoft pricing study, according to Terry Gross of Gross & Belsky in San Francisco, is "a clear marker." But, he said, it is mainly the overall drift of Jackson findings that provides a solid starting point for the class-action suit that he and his colleagues are filing.
"Throughout the judge's findings," Gross said, "he makes it clear that all Windows users were harmed by paying too high a price for Windows."
The class action, which the lawyers plan to file in California Superior Court in San Francisco, does not specify the number of members in the class of both individual and corporate users of Windows. But Gross estimated that the number in California was "at least 10 million," and he said the suit covers Windows users since the introduction of Windows 95. The complaint does not estimate the financial damage to Windows users in California.
Earlier this month, a small New York advertising company that purchased Windows, Seastrom Associates Ltd., sued Microsoft and sought class-action status to represent thousands of similar corporate customers in New York state.
But to take on Microsoft in a class action, legal experts say, will require experience, skill and resources. They note that the three lawyers behind the California suit -- Gross, Daniel J. Mogin of San Diego, and Francis O. Scarpulla of San Francisco -- are experienced state class-action lawyers who have worked for two decades on antitrust cases involving products ranging from snack foods to tires.
The lawyers say they will continue their litigation even if the federal case is settled out of court. Jackson's findings of fact alone, they insist, ease the way for suits like theirs.
"A settlement in the government's case wouldn't make our case go away," Gross said. "We still have these findings that Microsoft is a monopoly that abused its power by overcharging consumers."
Typically, only a final ruling -- not the findings of fact -- can be used as evidence in other cases. But a judge's fact findings and final ruling are ordinarily issued at the same time. Jackson took the unusual step of separating his findings of fact from his findings of law, which gave his fact findings greater importance.
Still, legal experts say Microsoft will surely challenge any attempt by class-action lawyers to build a case on the findings of fact alone.
Reposted without permission. Feel free to moderate down or delete if you need to CYOA, slashdot owner types.
Several of our colleagues have observed that class actions of this kind are being brought by law firms with only $$$ in their eyes. Yea, verily this is probably the truth. Class action plaintiff firms are indeed an entrepreneurial bunch.
/. colleagues and will speak on behalf of my bretheren at the plaintiff's bar.
But several of these messages suggested that the truth of this proposition also implies that class actions so brought do not serve the purposes of justice. Here (though I primarily practice law on behalf of commercial defendants in such actions), I will part company with my
It is not uncommon for businesses to engage in commercial activities in violation of the law and the policy set by legislatures, rulemakers and the courts. In many cases, there is no "real harm" to any one member of the public, but hundreds of thousands of dollars can be made, scattering the costs over millions and tens of millions of customers, each suffing only at most a few pennies or dollars of damage at most. A primary example occurs in the mis-collection of sales taxes from consumers.
Indeed, few people would even monitor this conduct, least of all the government, whose enforcement resources are limited at the end of the day. Were there no enforcement by the government, why would businesses tow the line?
The answer: because there exists a small cabal of class action plaintiff law firms who specialize in this kind of practice. They investigate these micro-violations, and bring civil actions on behalf of the consumers who were overcharged, each only pennies at a time.
True, consumers will get a pittance back at the end of the day compared to what was taken, but they will get something they would not have gotten otherwise, and at little cost and with minimum disruption to their lives. More important, the bringing of such actions STOPS the bad practices, and deters companies from "overreaching by neglect." It is easy to look the other way when your "mistakes" are making you money.
If such actions could not be brought, there would be no check on this kind of microviolation. Class action disputes of this kind (see also qui tam actions) are the only meaningful engine to assure enforcement of certain kinds of social policies.
Why let lawyers get rich at the expense of a Microsoft or other company, with little revenue actually flowing to the victims? The answer is simple: so that the company will be deterred from microviolation conduct in the future. Here is where you will find the justice.
Think ahead: a statutory class action remedy for excessive spamming by or on behalf of commercial entities!
This is why its bad to hurt M$, the only winners will be the bottom feeding scum sucking lawyers.
I'm thinking of trying to organize an anti-outrageous class-action lawyer fee system.
Basically, the idea would be something like "The undersigned refuse to be considered the member of any class in a class action lawsuit unless the lawyers agree to the following fee schedule, based on total cash payments to class members: 30% of damages up to $200,000, %20 of damages from $200,000 to $1,000,000, %10 of damages from $1,000,000 to $2,000,000, 5% of damages from $2,000,000 to $50,000,000, and 1% of damages above that $50 M. (All this working like tax schedules, so for $500,000 in damages, it would be 30% of $200,000 + 20% of $300,000.) For coupons or vouchers, fees would be based on half of the amount of coupons actually redeemed within one year of issuance."
If very large numbers of people signed such a statement and it was given legal weight, the bottom-feeders wouldn't get so rich and would have to work towards getting actual money for their clients, not just useless coupons that no one redeems.
Ooh, a sarcasm detector. Oh, that's a real useful invention.
As a disgruntled Windows 98 user, I have suffered extreme amounts of emotional damage from using windows, and I demand compensation! Why just last night I was downloading a 200 meg Swedish teenage lesbian erotica video on my box, and the damn thing BSOD'ed on me after 6 hours, while I was 98% done! Realizing my hours of downloading were in vain, I not only sobbed uncontrollably, but I have also lost all sexual function and have been forced to undergo months of therapy to regain it. My sex life has been destroyed thanks to MS and its buggy OS, and had I not been forced to run Windows, I would be having a delicious pr0n spree right now. Running Windows has ruined my life, and it's your fault, MS! Oh, and all that little monopoly stuff wasn't that nice either.
So far I've seen a lot of comments where people are yelling at each other as to whether or not MS being a monoploy hurt consumers, and if so, which consumers. So, here's the basic free market lowdown on monopolies (Which should apply to most readers, whether you like it or not)
In a normal market, you have supply and demand. Pretty basic. Price on the vertical axis, supply on the horizontal. S & D look like an x. As price rises, producers are willing to make more. As price falls, consumers want more. For instance, say 5 people would want a pc if it costs 1 million USD. 10 people want one if it costs 750,000 USD. etc on down to a whole lot of people if it costs roughly 2,000 USD. Same deal for supply - producers will make x pc's at price n. 2x pcs at price 2n. These two curves intersect at some point. Assuming that nobody interferes with the market, the intersection of the supply and demand curves will show you the price per unit of the good and the total production of the good. Now, if you can't differentiate between the various versions of the good (butter is butter is butter, no brand names), then the only difference is price. So one company charges more, and their version doesn't sell because it's more expensive. When brand names and quality get added in, it gets more complicated, but the same basic notions are there. It's an issue of paying for the consumer preferences. Take beer. Nobody could mistake Guiness for Bud, no matter what. Now, Guiness has a higher price per volume, but since consumer preferences for beer vs. pisswater come into play, Guiness can be sold at a higher price because some consumers are willing to pay more for actual beer rather than buying cheaper pisswater. However, bud and miller are priced pretty similarly, because the two goods are very very similar, and price can very easily be a differentiating factor.
I'll assume everyone is following so far. So now we have our consumer market for operatin systems. Way back when, in those long ago days of the Carter years and early Reagan years, you could buy several commercial operating systems for your computer. And they were priced in a way not too different from the beer pricing I described above. Sure, server OSes might cost more, but the consumer of server OSes feels okay because they are getting a serious OS, as opposed to something like ms-dos, which fits consumer needs but certainly wont be driving your big, bad, company mainframe. Then, time goes by. For whatever reasons, the number of OSes starts to fall. Soon, we only have the MS OS family.
Before, we had two products that were competing, and the differences between the two, as far as the market cared, were price and consumer preferences. The existance of competition kept the prices close. If consumers were indifferent to which OS they used, price was the only differentiation. Now, with just Windows left on the market, there's nothing holding prices down. So prices go up. Which means that, for any physical good, quantity produced drops. After all, putting that extra money into production just raises our costs. And, as a monopoly producer, we want to minimize costs while maximizing price. This is profit maximization. If we make software, this means skimping on the product testing while notching the price up as much as the consumers will stand. Now, our monoploy is going to set it's price based on the lowest possible production costs. Now, the lowest possible production level is going to be expensive - you build a single prototype car, you have to pretty much handbuild it from scratch. Build a limited run - you have dicounts for buying/building a part in bulk, etc. But costs scale back up as you start to use up limited resources - if you try to buy every sparkplug ever made, it's starts to get pricey. Software mucks with this, since once it's compiled, duplicating it is nearly free, so it's not entirely clear to me what the monopoly effect would have on a software company. However, there are some costs. The CD/floppy that it ships on, the manual, the box, the plastic wrap and paper with the EULA on it. So each shipped copy costs somewhere between a dollar and 10, depending on the quantities shipped. Well, it's a monopoly, so they'll make as many copies as they need to to get the lowest possible price. And they set the selling price based on that. So the consumer ends up paying more for the good than the market indicates the good is worth. Which, pardon the pun, isn't good.
If the above doesn't make sense, I probably left something out. I don't think I did, but it's been a while...
So, the conclusion, the whole point.
MS is a monoploy, for whatever reasons, and abused it. Given the fact that a monopolies goods are priced higher than they otherwise would be, MS has hurt anyone who has bought a computer since MS became a monopoly. Higher prices hurt consumers - less money left to spend on other goods. And not just computer consumers, either. Because artificially high price of windows kept consumers from having that money to spend on alternate goods. Whatever the difference between the market price for an OS and the price that was charged for monoploy Windows is money that should have gone into other markets - computer games, waterskis, water buffalo, whatever. So any market that you didn't spend money in because of the inflated price of Windows was hurt by MS. Now, IANAL, nor am I an expert witness in the area of economics, but I do know economics, and I have studied economics as applied to law, and I feel relatively confident that this conclusion isn't too far out in left feild. I wouldn't try to file a class action suit on behalf of the waterski industry, but I will say without a doubt that MS has done a serious injury to free market consumers and should not be allowed to just walk away.
I'm pretty sure this qualifies as copyright violation. Considering that registration is free, I can't see any reason this should be supported by slashdot.
Legally, can slashdot copy someone else's news word for word? These companies make money from banners, and slashdot is bypassing that. You guys need to watch yourselves.
Jeremy
Looking for a Python IRC bot?