Re: Where we went astray-- Antitrust and Microsoft

On 10/26/97, John H. Lederer <johnl[_at_]ibm.net> wrote:
>
> We need, I think to rethink anti-trust law, and its applictaion to
> software, and we need to rethink the consequences of applying copyright
> and patent law to software.

As one who also used to practice antitrust law a good deal more than I do now, I'm sympathetic to John's point. Software tends to defy the economic stereotypes used by the likes of Turner and Areeda (and Breyer, from whom it was transmitted to me).

Nevertheless,there are doctrines that can ameliorate the problem. The use of patents and copyrights to extend a first-tier monopoly to other tiers has long been regarded as a violation, so even if MS has a legitimate monopoly on Win95, it can't use that monopoly to create a monopoly in a different market (browsers, for example). The concept of "full line forcing" seems still viable; remember the Morton Salt case, or United Shoe Machinery?

The Robinson-Patman Act is indeed effectively dead, with considerable justification. It was never an antitrust law in the same sense that the Sherman and Clayton Acts (base models) were. Yet the concept of predatory pricing does not come from RPA, it comes directly from the "mother" statutes.

One of the great myths in the realm of law and politics is that the Reagan administration put an end to antitrust enforcement. Not true; they just cut back on major structural cases where the theoretical foundation was not solid. In the bread-and-butter areas of price fixing, territorial allocations and so on, there has never been a serious letup other than for budgetary reasons. So whenever someone decides to bring a "big" case, there hasn't been a lot of backpedaling on the fundamentals (admittedly, there was a significant change in the willingness to challenge mergers, partly for reasons of economic theory); the law is still there, waiting to be used.

• Vance R. Koven * phone: 617-482-3852 *
• attorney at law * fax: 617-482-4972 *
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