It’s awful to see engineers, marketers, and entrepreneurs on bended knee before a group of petty bureaucrats, who demand that producers spend their time catering to them, rather than producing and distributing products for customers. The New York Times yesterday carried an article on the capitulation of Microsoft officers to the faceless Eurocrats of Brussels (“Microsoft Makes Changes in Windows Vista to Suit Foreign Regulators“) and an interview with Microsoft CEO Steven Ballmer (“Is Windows Near End of Its Run?“).
The interview with Ballmer made me mad as hell. It’s disgusting to see a business leader being made to kiss the feet of a group of undeserving, small-minded, mean-spirited, and authentically loathesome people who have never produced a thing of value in their entire lives:
Q. Can we talk about Europe?
A. Beautiful place. I lived in Brussels for three years as a kid. I do love Brussels.
Q. I was thinking of what seems to be the continuing conflict — the disputes, penalties and fines — over how Microsoft designs Windows and what features you put in the operating system. Is there a way around that problem?
A. First of all, I wouldn’t call it conflict. We really have — no, I mean this genuinely — have been having a constructive dialogue. Now, no regulator, not in this country nor in Europe, is going to give you a gold star that says, I will attest that everything in Vista is OK. The Department of Justice is not going to do that, and the European Union is not going to do that. At the end of the day, we can get a lot of guidance. And then we have to make the call and we have to take the risk. We really just have to decide whether we think the thing is compliant. It’s not really their issue. It’s kind of our issue in an odd way.
I can just see the puffed-out chests of the little toads in the European Commission when they declared, “Microsoft must shoulder its own responsibilities to ensure that Vista is fully compliant with competition rules and in particular with the principles laid down in the March 2004 commission antitrust decision concerning Microsoft.”
Those petty bureaucrats are making the world running smoother. For the good of the people, the greatest monopoly of the world should keep in mind that it’s not an all-mighty one.
I think Tom’s larger point is dead on target. Effectively, it’s impossible – even (or perhaps especially) for a very large corporation with massive resources at its disposal – for the corporation to know they aren’t breaking the law (or, “the principles”, as Tom quoted).
The only way they can find out is to sell a product, wait for a complaint, go through the EU complaint process, and get a decision from the commission. Not a judge or jury, a commission. The whole thing is ridiculous. A popularity contest designed to look objective to the casual observer.
In high school, we all learn that old adage about “ignorance of the law is no excuse”. But we should also remember “ex post facto” and . That doesn’t seem to apply any longer. No one knows what the laws mean becuase the legislators and regulators deliberately leave things vague to satisfy competing constituencies. Until someone forces the issue up to the top court, no one really knows what the statute means. Do you want to risk your corporation on what a handful of people will decide, after the fact?
I can’t say whether Microsoft has acted ethically or not, I can’t say. I can easily say that legislators and regulators too often are not.
Even when they aren’t deliberately vague, they are often creating situations where corporations have to choose between behaving ethically and behaving legally. See “Trapped: When Acting Ethically Is Against the Law” by John Hasnas for an excellent, readable history of how this sad state of affairs came about in America. Every CEO and CFO ought to read it.
Note, as well, the title of the interview, “Is Windows Near End of Its Run?” They are scrambling to deal with their crumbling “monopoly” as new forms of distribution are surging. The evidence is clear that the market is much better at encouraging improvement of product and consumer welfare through competition than are bureaucrats.
When someone’s broken the law, they should be held to account. But let’s not kid ourselves: Microsoft’s troubles come from those who are trying to weaken it by the political means.
Early on, Microsoft was guilty of political naivete. It either assumed it could ignore that dimension in its business strategy or was blind to it. The less naive of its competitors used regulators’ rational self-interest to create a political gadfly that has distracted and weakened Microsofts ability to compete.
Over the last two decades most (including myself as a computer scientist, technologist and CIO) underestimated and bet against Microsoft’s ability to innovate technically, organizationally and strategically. So it’s perhaps foolish to once again clang the bell and shout, “this is the end of Microsoft!”
But I do. Microsoft now acts like the way out of its mess is to pander in kind with the regulators. A short skip away are the behaviors and outcomes described by Weaver’s “The Suicidal Corporation.” There is “a lot of ruin” in a company the size of Microsoft and it will take a long time… but they’ve already been hobbled.
Microsoft was not the first, only, or last. When the institutions of freedom and the market order are allowed to weaken, government becomes relatively stronger. Some will then recognize government as an alternative means to achieving their ends, and none of us is immune to Sirens’ song of the path of least resistance.
Tom,
I grew up in Europe (but with American parents). While I am no fan of Microsoft, the sad fact is that western Europeans have asking, and voting, for large bureaucracies to centraly manage their economies. Sad to say, but socialist Europe does not understand market economics. A small fraction of the continent’s population does, the rest wish for security. The result: most people live in cramped little apartments, with the major necesities of life expensive relative to the U.S. Comparisons of per capita income actually tell a rosier story than actually exists. They do this while cheering on the bureaucrats in their constant meddling.
I know Apple has also run into some problems with the EU regarding its iTunes and iPod. It’s too bad Europe doesn’t apply it’s harsh regulations on it’s own businesses, like Airbus. My question is, would it not be more wise, instead, for companies like Microsoft and Apple to just simply not do any business there and let the forces of the underground market do the job for them?
R2D2,
They’re making the world run smoother by…forcing Windows not to bundle free software with its OS? Would it really be anarchy otherwise?
Dr. Palmer’s comment about Steve Ballmer kissing regulators’ feet reminds me of a Cato speech by Dinesh D’Souza. Speaking of egalitarianism in America, Dinesh says, if on the street Bill Gates offered 100 Dollars to kiss HIS feet, the average American’s response would be, “Bill: Go to hell!”
Some people just can’t take a joke.
L.R.,
The Microsoft starts from providing you with some free software and one day you may end up having everything around you being made by Microsoft. This would lead us much further from an ideal free market than do some bureaucrats, who are just helping to balance the distortion introduced by monopolies.
I’m not saying that everything done by the EU staff is right. But there is obviously something of Karl Marx in depiction of bureaucrats as an evil in itself (Marx did the same with businessmen). They are doing their job and they are indispensable.
What a joke, Defending Microsoft is like trying to defend WalMart or Kim Jong Il. The sooner they crumble the better off the FREE market will be.
I am not the biggest fan of Microsoft (although I use some of their programs; I tried WordPerfect and I prefer Word), but how is Microsoft like Kim Jong Il? Maybe they are like Walmart, where I have shopped (because the selection was great and the prices were so low that I was able to save my money, which I spent to satisfy other demands). Most of us would consider being able to satisfy more demands with the same money a big benefit. I don’t see how Microsoft or Walmart are in any important way like Kim Jong Il.
“This would lead us much further from an ideal free market than do some bureaucrats, who are just helping to balance the distortion introduced by monopolies.”
Nonsense.
First of all, there are no monopolies in a truly free market. Monopoly (at least in the traditional sense) is a company awarded a license by the government to prevent competition. ATT in the 60s and the East Asia company in the 1700s are examples.
Second, even if there were monopolies in the free market, Microsoft would not be one. As corporations go, Microsoft is small. It sells us less than 10% of our software, even less if you count free software such as Open Source.
Third, even if there were autonomous monopolies, and even if Microsoft was one of them, there is no way — absolutely no way — that a paper pushing bureaucrat could find a way to minimize its market power in a way that did no economic harm.
The Sherman act outlaws “monopolization in restraint of trade,” but the biggest restrainer of trade is government.
As corporations go Microsoft is a small one? They only sell us 10% of the software because they have a 90 percent monopoly and force us to use it embedded in their crappy system. But hey if your happy with your virus ridden heap, then great. Lets not have a choice. Lets just sign on and let the remaining few survivors of the early computer wars die off. Microsoft has been let off the hook so many times its like watching a damn catch a release fishing show. If you think that monopolies dont in a free market, we cant even have a discussion. We do not have a free market or a company like Microsoft wouldnt last past the 5000 bugfix release. Stop accepting mediocrity. You have to use it and you dont have a choice. Go ahead and go to work and express your free market choice and switch from microsoft to what? Linux? Yah talk your Micrsoft certified IT guy into that… hahahha you guys are lost. I sure hope open source continues to grow, but man what a laugh. “authentically loathesome people who have never produced a thing of value in their entire lives” sound like the theifs at microsoft to me, go a head and find one thing in the windows system they didnt steal or strong arm some other company out of.