Subject: Re: James Love: Federal Judge says Intel CPU platform must be disclosed (fwd)
Brian McDaniel (mcdaniel@law.harvard.edu)
Date: Wed, 15 Apr 1998 02:30:29 -0400
Message-Id: <00b801bd6837$fdc0c180$682bf78c@isomorph> From: "Brian McDaniel" <mcdaniel@law.harvard.edu> To: <roundtable@cni.org> Subject: Re: James Love: Federal Judge says Intel CPU platform must be disclosed (fwd) Date: Wed, 15 Apr 1998 02:30:29 -0400
Richard K. Moore <rkmoore@iol.ie> wrote:
>
> What about Windows? Same argument applies, it seems to me...
>
> "_Microsoft wields absolute power over who will and who will not
> be allowed to participate in that part of the high-end _software
> and _service industry that is based upon the _Windows OS"
Don't get your hopes up. Two things:
1. Intel has very high physical capital costs in its fabrication
plants. While Microsoft's market power may be even greater than
Intel's, that market power relies more on network effects and lock-in.
Judges are (and should be) more comfortable about finding market power
in the presence of physical infrastructure rather than sheer network
effects. Which is not to say that Microsoft will get a free ride - only
that the cases are fairly different in terms.
2. Even having "absolute power" is not itself illegal. "Absolute
power" (ie market power) must be combined with anticompetitive conduct.
In Intel's case the anticompetitive conduct was the use of patents to
pressure Integraph to drop other patent claims against Intel. This put
Integraph (and any other licensee asserting these claims) at a
disadvantage to other licensees.
Allegedlly, Microsoft did similar stuff, putting pressure on OS
licensess, although, in my honest but uninformed opinion what it did
wasn't quite as bad as what Intel did.
But in any case, the remedy is not very dramatic at all. Intel will be
required to license its patents to Integraph on the same basis as it
does to other small manufacturors. Microsoft may be forced to drop some
of the restrictive contracts. The remedy here will be limited to curing
the anticompetitive behaviour.
What would be exciting would be a full-scale dismantling of Microsoft
and Intel, although I doubt that it will happen since: 1) the politics
are pretty bad; and 2) arguably a very concentrated market is a good
thing -- Microsoft and Intel have market power because *we* all want to
standardize on their products; its just easier (and cheaper) to use the
same programs as everyone else does.
Brian McDaniel
<mcdaniel@law.harvard.edu>
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