“Anti-competitive behaviour.” It’s a term that we associate with abuse of someone’s position of power and unfairness. I want to show you two examples of things that have been called “anti-competitive.” One of them is deserving of these associations, and one of them is not.
Here’s the first example: Telecom New Zealand. Telecom is New Zealand’s largest telecommunications company. It owns New Zealand’s copper telephone line network, and the majority of people in New Zealand who have a landline have Telecom as their Telephone service provider. As a result of its monopoly position in physical resources, Telecom also has significant control over what other companies are able to offer when it comes to both landline and internet services. How did Telecom get to this powerful place? By competing with the other companies in the industry and successfully making its way to the top?
No. Not even close. Wikipedia overs a summary history of the company here. Telecom used to be owned by the New Zealand Government. There literally was no competition. Everyone used Telecom’s services and physical resources because this part of the market was not really a “market” at all, but something more like a government department. In the most obvious sense, this was an “anti-competitive” market, and it prevented consumers from having any choice, removing any need for Telecom to do better than any other company in order to win customers. That is how Telecom gained the position of dominance that it now has. Telecom was privatised in 1990, which immediately improved new Zealand’s telecommunications scene. Competing companies arose and prices and services improved. But when Telecom was privatised, it was sold as one massive block: One private company had a pre-made monopoly because of the immoral advantage that it had enjoyed as a state owned monopoly. Because the government had made the mess in the first place, it has since intervened numerous times to take steps to fix some of that mess. Read about it at that wiki page. In short, Telecom has unfairly (uncompetitively) gained a huge advantage over other companies who have had to work from the ground up to gain enough popularity and market share to compete with Telecom.
This type of “anti-competitive” behaviour is, in my view, the kind of thing that really deserves that name and all the innuendo that goes along with it. The next example, however, does not.
I like Mozilla software. I use Firefox as my browser and Thunderbird as my email client. I had the option of using Microsoft’s Internet Explorer and Outlook Express, but I prefer not to. But it looks like Mozilla don’t think their software is really good enough to catch on. It’s amusing in a strange way that they don’t have as much faith in the merits of their own software as their users do. Here’s what I mean: have a look at this quote from computerworld:
The European Commission has granted Mozilla, the open-source collaboration behind the Firefox Web browser, the right to join the antitrust case against Microsoft, a spokesman said Monday.
The EC, Europe’s top antitrust authority, charged Microsoft last month with distorting competition in the market for Web browsers by bundling in its Internet Explorer browser with the Windows operating system.
If the charges stick, Microsoft could be forced to change the way it distributes IE, as well as pay a fine for monopoly abuse.
Mitchell Baker, Mozilla’s chairwoman, said in a blog posting that appeared over the weekend that she wanted to offer Mozilla’s expertise “as a resource to the EC as it considers what an effective remedy would entail.”
She said there isn’t “the single smallest iota of doubt” that Microsoft’s tying of IE to Windows “harms competition between Web browsers, undermines product innovation and ultimately reduces consumer choice.”
Let’s think about that: Microsoft, a private company, makes an operating system called Windows. Mozilla could make an operating system, but they don’t. They choose to make a web browser and give it away for free. Microsoft makes a web browser (Internet Explorer), which is part of Windows. The fact that they make a popular operating system means that a lot of people have internet explorer, because they buy Windows. This gives Windows a competitive edge in the market. Microsoft have – uncoerced, and enabled by the fact that they are so popular in the marketplace, given their product more exposure and availability to end users.
Does this “harm competition” between Microsoft and the makers of other browsers? No. It is competition. This is Microsoft competing. When you compete, you are trying to give yourself an advantage by getting more people to make the choice to use your products. They can make Windows however they like. They can make Internet Explorer however they like. They own them. They dragged themselves into their position of popularity and market dominance by selling more stuff. Computer makers don’t have to sell Windows with computers, but they choose to. Home users don’t have to buy computers with Windows on them, but they choose to because it’s cheaper than some other options, and customers know how to use Windows. If you want your browser to be more popular, then make it better. Firefox is better than Internet Explorer. This stupid socialist myth that Mozilla entertains, that absurd belief that they have a right for Microsoft to go easy on them and make Windows in such a way as to not tempt people to use Internet explorer is fundamentally immoral. When people compete against you, they are trying to make it harder for you to succeed. Get over it.
I don’t like Microsoft. They lack class and style. Their stuff is expensive when considering its quality (in my humble opinion). However, if you don’t like the fact that Microsoft includes Internet Explorer with Windows, then go and create your own operating system, and include your own browser. Do a ebtter job at what they are doing. What you don’t do is sue somebody else for selling it’s property as it sees fit. Firefox isn’t orange any more. It’s red.
Freakin’ commies. I hate them.