Re: Where we went astray-- Antitrust and Microsoft

John H. Lederer <johnl[_at_]ibm.net> wrote ...
>
> Software is an exception. The product is intellectual property and the
> marginal cost is often near 0. What is the cost to Microsft of the
> hundred millionth copy of Win95? The cost of printing a certificate--
> Microsft has offloaded the other costs (maintenance, repordcution, etc.)
> to its buyers. Moreover its sales model is incredibly lean-- because
> despite the misconception Micorsft does not market to the end consumer
> -- Microsft sells to computer OEM's -- a market in which 90% of the
> business is probably held by 20 firms.
>
> Software is an exception in another way. At one level there is no
> competition by statute. Windows95 is a monopoly, no one else can make
> it, because Congress, in its undoubted campaign financed wisdom, has
> extended copyright and patent law to embrace software. You go to jail
> if you make Windows95 without Microsoft's consent.

I recently completed a course in Antitrust and am astonished at how much I like it. Couple of thoughts. First, it is true that the marginal cost to MS of the hundred millionth copy of Win95 is near 0, but, given that any developer's marginal cost to produce the millionth or hundred millionth copy is nearly 0, can this explain the MS monopoly? Second, I agree wholeheartedly that it is a major policy gaff to extend patent protection to software; but would you really not extend copyright protection? I'm interested in knowing what you and others see as the answer to the marginal cost dilemma in software, as well as what protections, if any, would ameliorate antitrust concerns.

Tom Dunn
Northeastern Law '98
tdunn[_at_]slaw.neu.edu
tel/fax (617) 247 - 1040 Received on Fri Oct 31 1997 - 04:49:41 GMT