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Durkin Tactical Franklin Armory
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Posted: 4/30/2001 9:12:52 AM EDT
My Marketing 111 class has meddlesome American socialist, Government as meddlesome back seat drivers types.

The question was. "Should government have a greater role in determining price?"

I end up seeing this kind of junk from a freakin' business student!

"When a company begins to become a “monopoly” (you know who I’m talking about) the government should step in. It’s not right for one major company to control all the prices of a particular service or product. This wouldn’t leave any room for smaller companies in the same field to complete. With other companies offering the same product or service that will bring down prices. Customers should at least have a choice of whom they will buy products from. It shouldn’t be just one major company. When the government does this they make sure there is a level playing field."

She's referring to Microsoft. I came down on them thus-

"If you're talking about Microsoft, Why should the government "step in", and take their money, or break up their company? You act as though Macitosh, Linux, Apache and BeOS didn't exist! Microsoft has done NOTHING except create a product which sits on the shelf with competing products. If Microsoft sells more of their software, why exactly does this make them evil?

All people have the choice to use any software in the world, Microsoft sells more, because people prefer their product.

Look at it this way-this is an almost exact analogy.
If you made better muffins than anyone else, and sold them, people would buy your muffins and no one else's. You'd make a lot of money, and other muffin makers would be losing money because your muffins are delicious. Now WHY should the government step in at this point and say "Your muffins are better than everyone else's, and it's unfair to other muffinmakers whose muffins aren't as good as yours. Therefore, we're going to force you to put salt in your muffins and give the other mufffinmakers your recipies, to be "fair" to them."

right now I can buy any software I want. what would be different if the Fed takes away Micrsoft's money, or breaks up their company. Why is it people have such a hard time with the fact that some people are going to go out of business if they don't do as good a job or better than their competitors??

If my software is crummy, and Microsoft's isn't, why should I go running to the Feds to beat up Microsoft to save my company which doesn't make software as well as Microsoft's? We say THIS is a level playing field? When companies become "too" sucessful, we should beat them down?

This is a BUSINESS course, if anyone should understand the frivolousness of the antimonopoly stance, it should be business students. You can't run a company or a business on socialism.

I would really enjoy reading your reply to this, any attempt on your part to defend your position on detroying success in this way(also known as armed robbery) should be quite interesting to read, to say the least."

Now everyone's mad at me for wanting to be so meeeeeeean....

I am sick of these people!
Link Posted: 4/30/2001 9:16:13 AM EDT
BTW, that sort of response came from all but two of the students in a 15 person class. Their answers were almost identical. Funny, though, those who determined that Microsoft earned their money, are 30something business people getting their degree, not 18-19 year olds.

And because I didn't mention it, this is an online course, set up rather like this board, for the students to converse and turn in assignments.
Link Posted: 4/30/2001 9:20:23 AM EDT
Link Posted: 4/30/2001 9:47:14 AM EDT
I agree with you 100% that the government shouldn't step in and crush a successful business or make it a "level playing field" as they call it unless the company completely corners the market and jacks up prices.  I think that when Microsoft was setting up their software to work only with Microsoft browsers, etc is when the feds stepped in.  They were afraid that with the amount of the market that Microsoft controls that this would force consumers to use Microsoft products exclusively (a good strategy for Microsoft) and force smaller internet software and browser companies out of business, therefore hindering innovation and possibly causing a monopoly on that market by Microsoft.  I think that it was the internet software companies that the government was trying to protect and not necessarily computer companies(I too groan every time I'm forced to use an Apple computer).  That is how I understood it anyway.
Having a number of companies in a business is good and bad - Good because if one goes bankrupt others can take its place (remember the problems when UPS went on strike?), they compete to lower the price more, they are always striving for new ideas, etc.  Bad because one company handling everything could lower the price more than multiple companies (Wal-Mart).  The way I see it, the good outweigh the bad for the most part.  However, fineing and busting up a company because they are successful is WRONG!  The most that the feds should do is stop the company from taking whatever action it is that will cause a monopoly.  I too am tired of seeing the successful fined and punished (through higher taxes for the rich, trust laws, etc).  It looks  like "affirnitive action" policies to help out companies turning out inferior products to me.    
Link Posted: 4/30/2001 12:36:37 PM EDT

Ummmm, this time the govt was right.

What most of us assume is that because MS controlled so much market, that is why the gov came down on them.  Not the facts.  MS earned its trip to court.  

MS was abusing its position as market leader to prevent entry into the market.  They would sell to distributors (like CompUSA, etc) at a certain price.  But, if the distributor offered alternative products in a competitive manner (such as Netscape as the primary browser, or package deals of alternative operating system, or equal store display of alternative products, etc)then the price to that distributor changed.  the distributors could not afford to NOT offer MS products, and had to offer them at the same price as other companies in the same business.  No win if they didn't knuckle under.

This is called predatory business practice and it is illegal.  It is good for us that this was called on.

Do I think we need to break up MS?  Nope.  I don't think that is ethical, and I hope it is illegal.  A large fine and efforts on MS part to show good faith adherence to the law is all that is required.

Mind you, it was disgusting how the Clinton administration acted in a manner to use this case to further denigrate big business in general.  But what else would we expect from the "most ethical administration of all time".

Link Posted: 4/30/2001 1:17:58 PM EDT
Remember though, fines haven't worked with microsoft.  The whole SUN Java incedent is a perfect example.  For a while the courts fined microsoft 1 million dollars a day for violating the Java license agreement(which simply states java is completely free to use as long as you conform to the standards and don't introduce proprietary code).  Microsoft said oh well.  Just kept doing it since changing java was forcing people off of netscape, and a million a day was nothing to them.  The courts problem with setting a higher fine, was that it would set a precident that would cripple most buisinesses that end up in microsoft's situation of violating a license agreement.

It is not illegal, or wrong to be a monopoly, but to use that monopoly to force other poeple to use other products you sell, and give you an unfair advantage over the copetition, is illegal.

Selling at a loss when you are a monopoly is illegal.

The antitrust laws are set up very well.  Microsoft breaks them with no thoughts about consequences, and continues to do the same today.

They have never made an effort to change their ways.

This is also the reason patents expire.  There is nothing wrong with being the only guy making a product that people need, and selling it for an outrageous amount.  The illeal act comes from using that monopoly(nothing to do with the money you make or size of your company) to eliminate competition in the same or other fields.

A perfect example is a previous antitrust suit for which microsoft got busted.  In the old days, the Word Perfect suite was #1 by a huge margin.  Microsoft then began to refuse to sell windows(only choice for an OS) to any computer retailer that did not bundle MS office with their new machines.  In under two years, Word perfect was virtually dead and the company was sold several times.  And in the past couple years microsoft has cranked up the price on Office.  Its Rockefeller all over again.

Today for instance, microsoft is trying to kill adobe off since they started packaging Photodraw in the last version of Office.  This will eventually lead to the downfall of photoshop.  Microsoft of course doesn't really care about photoshop, they want to get rid of adobe acrobat, and the pdf format which competes with word as the portable document format on the internet.  So they will kill one of adobe's products to put them out of business, or make adobe cheaper for MS to buy out.

I hope people understand this topic more in the future.  Usually when I hear people arguing on the two sides of the microsoft issue, neither really understand what they are talking about.

Unfortunately Microsoft has to be broken up.  They have lost many antitrust cases, and they just ignore the results.  Fines are somthing about which they don't care.  The only thing left is to take the OS product and seperate it from the applications they produce.  The only reason Office and IE are the mainstream products today are because of previous illegal actions by MS anyway.

I feel strongly on this issue, because in the IT field, microsoft's products are not the best at all.  But you are forced to use them because they are forced on you.  And any new company that tries to compete or make a good product is immediately copied and included for free in one of microsoft's products to eliminate the competition.  And the microsoft versions are of much lower quality.
Link Posted: 4/30/2001 3:43:54 PM EDT
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