Trust On Trial: How The Microsoft Case Is Reframing The Rules Of Competition

328 Pages·2001·12.83 MB·English

by  Richard B. Mckenzie

TRUST ON TRIAL
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T R U S T
O N
T R I A L
How the Microsoft Case Is
Reframing the Rules of Competition
RICHARD B. McKENZIE
Graduate School of Management
University of California, Irvine
BASIC
BOOKS
A Member of the Perseus Books Group
New York
Many of the designations used by manufacturers and sellers to distinguish their products are claimed as
trademarks. Where those designations appear in this book and Basic Books was aware of a trademark
claim, the designations have been printed in initial capital letters.
Copyright © 2000,2001 by Richard B. McKenzie
Previously published by Perseus Publishing
Published by Basic Books, A Member of the Perseus Books Group
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or trans-
mitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise,
without the prior written permission of the publisher. Printed in the United States of America.
A CIP record for this book is available from the Library of Congress.
ISBN 0-7382-0481-1
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Text design by Jeff Williams
Set in 11-point Minion by Perseus Publishing Services
First paperback printing, March 2001
For Gary Byrne
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CONTENTS
Preface ix
The Nation's Major Antitrust Laws XIV
1 From Railway Time to Internet Time l
2 Monopoly Mantra 27
3 Little Linux 49
4 Digital Predation 67
5 Digital Switching 83
6 Innovative Thinking 115
7 Mud Farming 141
8 Politics 101 165
9 Politicizing Antitrust 191
10 Antitrust Ironies 217
Epilogue 231
Appendix I 253
Appendix II 257
Notes 263
Index 301
vii
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PREFACE
TRAINS ARE A GRACIOUS WAY TO TRAVEL long distances and at the same time
be able to watch the ever-changing landscape of forests and distant towns go by.
Trains are slow but steady, cramped for sleeping but comfortable. There is no better
experience than to see a snow-capped peak drift by a train's window while sipping
on a glass of wine.
Trains are a throwback to an earlier era when life moved at a slower pace. Indeed,
trains force life onto their schedule; they are often late and sometimes break down
in the middle of nowhere. And they demand that life move at their speed; they chug
along.
So it was when my family decided to see a part of the world at eye level at the
speed of a train, traveling from Los Angeles to Seattle. Why that trip? It was there,
and we also knew the end of the trip would be highlighted with views of spectacular
volcanic mountains, Mount Shasta, Mount Rainier, Mount Saint Helens, and
Mount Hood.
I make note of the train trip because it combined pleasure with work on this
book. Remarkably, the experience straddled two distinct eras, one that operated at
the slow pace of "railway time" and the other that operated at the demanding pace
of "Internet time." How strange it was to be moving along at the speed of a bygone
era while sitting at a lounge-car table rapidly tapping out a portion of a chapter on
a laptop that had more power than many mainframe computers two decades ear-
lier. All the while, I could keep tabs on office calls with a cell phone.
On that trip, each time I booted up my Toshiba laptop with its familiar "Intel In-
side" logo on the side of the screen, the familiar multicolored flag of the Microsoft
Corporation came up. I was able to do things there on the train that people a cen-
tury before could not possibly dream about. Even a generation before, people had
to be tethered to a mainframe computer to do what I was doing on the go, much to
the credit of Intel, Toshiba, and Microsoft—and, it goes without saying, to a host of
inventive people who work for those companies and to those who went before them
at any number of other high-tech firms. I was also able to work with a laptop that
several years before would have cost some multiple of what I paid for the one I had.
ix