Yesterday – actually it was the day before yesterday – the European Commission on behalf of the European Union slammed a $603 million penalty on Microsoft for unfair competition. Not so long ago, the same ruling was given out to Microsoft in the United States though with a heavier penalty – the company was supposed to be split into two different entities. Somehow, Microsoft appealed against the ruling and managed to keep itself in one piece. If my memory does not fail me, the last company that actually was split into several different entities was Standard Oil – now known as Exxon Mobil.
Apart from the half a billion Euro fine, Microsoft also has been ordered by the European Union to disclose relevant information to the public in order to promote a fair competition within a few months.
Currently, Microsoft has announced to appeal against the European ruling.
But is Microsoft really dangerous? Is it okay for the EU to punish Microsoft for being too successful? [Insert some funky music here]
It is no doubt that a monopoly would bring inefficiency into the market. In economic terms, Microsoft is charging the users a price higher than the firm’s marginal cost, gaining too much profit while producing too little. At the same time, deadweight loss to the society is unavoidable. Maybe,
Still, I believe in free market. My belief in laissez faire leads me to believe that it is wrong to punish Microsoft from being too successful.
The clash of the two concepts make me feel uncomfortable. Being both a green and a free-marketeer wannabe is hard.
However, in Microsoft case, one event made it easier for me to decide.
Weeks earlier, it was reported that Microsoft encouraged SCO to launch assault on Linux. SCO has of course denied this allegation but still, the tree doesn’t sway if the wind doesn’t blow.
Ladies and gentlemen, Micro$oft is as evil as Standard Oil and Exxon Mobil. And I support, cautiously, EU’s decision.
