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Richard Volkman
While U.S. District Judge Colleen Kollar-Kotelly ponders
the remedies facing Microsoft as a consequence of its practices in restraint
of trade, the software giant has once again courted controversy, this
time by excluding users of competitors’ products from certain online
content. And once again, Microsoft’s best defense is to appeal to
the value of “standards.” While there is no doubt that widely
accepted standards offer real value to consumers, it is difficult to take
Microsoft’s defense seriously in light of its own past history.
In conjunction with the release of Windows XP on October 25, the company
revamped the content of its MSN.com website, which is tightly integrated
with many of MS’s software products – including its popular
Office XP suite of applications. The trouble came when users of some non-Microsoft
web browsers discovered they could no longer access the site. Users of
Opera, Mozilla, and other competitors to Microsoft’s Internet Explorer
were redirected to a page explaining that their browsers would not be
able to access the MSN.com site and offering them the ability to download
the latest version of Internet Explorer.
Microsoft’s explanation? It’s all about standards. A c|net
article quotes Bob Visse, director of MSN marketing, as saying, “All
of our development work for the new MSN.com is... W3C standard.... For
browsers that we know don’t support those standards or that we can’t
insure will get a great experience for the customer, we do serve up a
page that suggests that they upgrade to an IE browser.”
Were it not for MS’ past history, this would be a reasonable explanation.
After all, much of the value of the Internet comes precisely from its
openness and accessibility, and these properties are the direct result
of open standards. The economic value of standards is well-known; it is
analyzed in terms of “network effects.” The value of a thing
sometimes relies almost exclusively on its being part of a broader network.
To take a concrete example, if my modem is the only one in the world,
then it is virtually worthless. If there are a hundred modems in the world,
then each has some fairly modest value. But when there are millions of
modems across the world, and they all speak the same language, then my
modem is the ticket to a network worth billions. Similar points apply
to software development and use. Part of the value of Windows (perhaps
the biggest part) is its ubiquity. In light of this, it is obvious why
having Windows on (almost) every desktop computer creates real economic
value, and why compliance with W3C standards is a Good Thing.
But there is reason to be suspicious of Microsoft’s explanation,
especially in light of their documented history of crushing competition
by leveraging the proprietary standard they created. For many users, it
looks like MS is once again using its dominant market position as a club
to knee-cap competitors. As Judge Penfield Jackson documented in
his “Findings of Fact” (which were NOT vacated by later appeals),
MS’ more troubling marketing tactics have specifically included degrading
performance of competitors’ products – regardless of their standards
compliance, one might add. In some cases, MS has actively sought to undermine
a de facto standard in order to advance its own proprietary technologies.
(Witness JavaScript.) It is precisely this sort of combat that harms consumers
and violates the law. It is not illegal to have a monopoly, or to benefit
from the network effects associated with a standard one has created and
owns. However, it is illegal to restrain trade by creating an artificial
barrier to entry for competitors.
The benefits of robust competition stem from strong incentives to innovate,
so it should come as no surprise that such benefits tug in a direction
opposite to standardization. Nor should it be surprising that a dominant
player like MS would use “standardization” as an argument against
its competitors. But economically valuable competition is not combat.
One should like to win market share by being the best, not by preventing
the best from coming to the market.
The case against MS looks even stronger when one discovers that the pages
in question did NOT, in fact, comply with the standards after all. As
a press release from the makers of Opera points out:
The irony of Microsoft’s claim to standards-support is complete when you check the MSN.com site for compliance with the XHTML standard. Anyone can go to the W3C’s standards validation service at http://validator.w3.org/ and type in “www.msn.com.” The document returned demonstrates clearly that not a single document on their site adheres to W3C specifications, and many of their documents do not use XHTML at all, e.g. http://careers.msn.com/.
Add to this Opera Software’s claim that “Opera
is internationally acclaimed and renowned for its strict compliance with
all international Internet standards,” and one becomes very suspicious
indeed of MS’ actions.
Whether MS was trying to crush Opera or not, it is easy to understand
these suspicions. Having earned the reputation of being a bully, MS will
find it very difficult to earn the benefit of the doubt. I suspect that
this will make it more difficult for them to earn dollars too.
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