DISQUS

Really interesting post, Joe.

I recently started running Zune software on my home media center PC and fell in love with it. Partially because of the 'value concept,' but more for the lifestyle concept they were trying to pitch in the earlier ads, "music discovery." In this capacity, Zune blows away iTunes. The software not only can help you identify sounds-a-like, and people who bought this...also bought, but actual bands that influenced the artist. And with Zune pass, you can simply check it all out with having to 'invest' in it (or load up a P2P service and all the problems that come with those..).

Any chance I can get the DRM content onto my iPhone?

Well said, Philosopher. There is no question that Google's Search market share has been built on the quality of its product. They have built a great product and are being rewarded for it. Microsoft and others argue that there are network effects that make catching up with Google in terms of quality search results (the more searches done on your system, the more information you can analyze, the better your results...), but I don't think that is where the interest from regulators has really been focused.

During the review of the Yahoo! deal and the merger with DoubleClick, the market that was being analyzed was the market for internet advertising, usually the market for search advertising. The question here is whether the market share Google has gained through completely legal means is being used to distort prices for advertisers and revenue agreements with content providers.

Billybob,

I'm sorry i wasn't more clear in my point, and did not give you the full definition of the term 'natural monopoly.' However, the fact that natural monopolies are formed through completely LEGAL means remains true, even in Wikipedia.

I generally agree with you that the browser market, operating system market, and Internet search markets are NOT natural monopolies. However, some try to make the argument that they are natural monopoly markets because of network effects.

I'm not sure I buy your formally educated analysis of the Microsoft case, however. First of all, Microsoft does not have "monopoly over the supply of" operating systems. This is not the Steel market where having control of the supplies of raw materials has any relevance. Microsoft does not have any control over supply of "operating systems," but they do have a dominant share of the operating system market and can control supply, pricing, and design of the Windows OS. This is a bit more complex than you make it out to be.

But this is really neither here nor there, except I would like to remind both you and Joe (who should know better) of an important fact this is all too often ignored in the retelling of the Microsoft case. The ONLY reason that the Bush administration got involved in helping to negotiate a settlement is that the Appeals Court (Not the Bush admin) struck down the Break Up order and voided a lot of the findings of Judge Jackson's court. We can have a rational debate about whether the eventual settlement was tough enough or not, but it wasn't Bush and cronies that saved Microsoft from a breakup, it was the judicial system. Also, we should not forget that the DOJ and States got Microsoft to agree to remedies as part of that settlement that were completely unrelated to the case at hand including: server-to-client interfaces, media player competition, etc.

Billybob,

Like Joe, I've learned a few things about competition law from following Microsoft's trips through the ringer. The term 'natural monopoly' is generally not meant to suggest something nefarious. Instead it refers the a company that has developed it large marketshare/monopoly through completely legal means. Therefore their monopoly marketshare is not a problem, only their attempt to translate that market share into market power to illegally prevent competition (monopoly maintenance). That said, the rules are different for a company with 20% market share than a company with 90%.

And the case against Google is far from a slam dunk. However, you need to look at the Internet advertising market, not the search market, to get a sense of where the real potential abuses would lie. All the money and the power is in advertising, search is a just a sideshow and a means for getting and improving the profitability of ad placements.

However, for the FSF a suit is a matter of last resort--they have always tried to resolve issues of non-compliance with the GPL by negoitating, explaining and assisting FIRST.

Actually, many would argue that lawsuits are a last resort for the FSF because they really don't want to test the GPL in court. Also, they like to shake down 'violators' for cash to fund the FSF (ie their settlement with Cisco re: GPL code in Linksys routers).

Additionally, it could easily be said that MS also has "always tried to resolve issues of non-compliance...by negoitating, explaining and assisting FIRST." They have never sued anyone over a patent as far as I know.

Well, judging by Microsoft's past actions (review the case of a little company called AddStor for example) I would be very surprised if MS was unaware that, when they went in to discuss patents with Dell, that Dell understood that they were talking to the owner of the monopoly PC OS. Of course, as that monopoly diminishes, it seems likely that MS's bargaining position will weaken. So let's see what deals they will be able to get in three years or so...

Even if I ignore the fact that MS is banned from using that kind of leverage against OEMs based on its CD with the government, how does your little theory explain the actions of Samsung and Xerox? I'll help you. It doesn't!

Why don't you just give up the ghost and say what you really mean: "They are sofware patents. I don't like software patents, especially any software patents MS has. ipso facto - they simply can't be valid. And anyone that conceeds otherwise is a coward or a lair."

I think the Tims have a great point: "The iPhone can be a catalyst for change in mobile networks." This kind of revolutionary product can make that happen and we'd all prefer this to happen through market forces rather than a ham-handed response by the FCC or Congress.

In the end, however, we do want to preserve flexibility in the business model. Personally, I like the fact that T-Mobile gave me the MDA at a subsidized rate for choosing their service plan and commiting for a couple years. I think that kind of option is great, as long is it isn't the ONLY option.

Um, Enigma... you may not have noticed, but it isn't like Microsoft (or even ACT) is the only one that has problems with the language of GPLv3.

Second, I think your premise of "how MS will fight these" is off the mark. If you've been reading Eben's comments about the GPLv3 and the supposed trap they've created for MS as a distributor of GPLv3 code in Linux, well... it's unlikely that MS will be the one suing to test the GPLv3. It will be the FSF.

Also, you seem to misunderstand how patent discussions happen between major companies. With companies like Dell, Xerox, and Samsung, it's a lot more civil than you might think. Microsoft presents its patents and the technologies it believes infringe on those patents, the other company's lawyers review that information and make a decision based on a legal/technical analysis of the situation - not some bullying/hardball tactics by MS. These companies have serious lawyer and the money & patent portfolios necessary to fight MS if they thought the claims were bogus.

Interesting post, Tim.

Social norms clearly play an important role in the Free Software community, but not sure that they trump the legal structures embodied in the licensing. It really depends on the circumstances.

For those companies that are working with both OSS and proprietary software, they and their investors need legal certainty...not just the will of the Free Software community.

Google, however, is in a bit of a pickle with the Free Software community because they rely so heavily on them. They have bought themselves a lot of good will over the past few years, which is probably why the FSF didn't include a mandatory Affero provision in the final GPLv3.

If they don't find a way to stem this growing tide of distrust, from Stallman, Moglen, et al... they could find themselves in the shoes of Tivo. And Tivo, is arguably a better Free Software communtiy citizen than Google. Tivo actually gives the vast majority of their code back to the community and allow them to modify at will! Their only sin is that they don't let you put the modified code back on the box and avoid paying the Tivo service fee. It would bankrupt them given that they sell you that box for less than it costs to make...

Anyhow, I also find it very interesting that the
FSF decided to launch the GPLv3 today of all days.