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Trust on Trial: How the Microsoft Case Is Reframing the Rules of Competition

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Fascinating View of Microsoft Propaganda
obviously biased analysis
Richard McKenzie: Trust on Trial
The Government's case is baseless and destructive
good ideas, not enough followup

Trust on Trial: How the Microsoft Case Is Reframing the Rules of Competition
Richard B. McKenzie
Manufacturer: Basic Books
ProductGroup: Book
Binding: Paperback

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Is Microsoft truly a classic monopoly, whose aggressive pursuit of markets for Internet browsers and operating systems is harmful to consumers and worthy of government intervention? Or has it actually been a victim of aggressive rivals (led by Sun, Novell, Oracle, and IBM) who called in high-level favors to keep Bill Gates & Company out of the lucrative market for network servers? Richard McKenzie, a noted economist with the University of California at Irvine and the author of more than 20 books, is convinced of the latter. He advances a formidable argument on that behalf in Trust on Trial, which maintains "the Microsoft case has shown--and not for the first time--how politics can taint the antitrust enforcement process." Starting with copies of major U.S. antitrust laws, McKenzie shows how cases such as this eventually may affect consumers in both the short and long term. With some people unconditionally opposed to anything out of Redmond, of course, his thesis won't convince everyone the government proceedings are a sham. But even many of Microsoft's detractors should concede that he makes a compelling point, particularly with his overriding contention that the process is usually political. "More than Microsoft is now on trial: trust in antitrust enforcement is on trial," he says. --Howard Rothman

Book Description

An incisive argument proving that current rules of business competition are rendered obsolete by the dynamics of information-age companies.

Trust on Trial, a hard-hitting examination of competition in the modern marketplace, tackles the monopoly issue head-on. Through the lens of the Microsoft case, the first large-scale antitrust proceedings of the digital age, it challenges the efficacy of modern antitrust enforcement. While testing the appropriateness of new economic assumptions-from network effects to lock-ins-it forces us to ask whether nineteenth-century antitrust law, combined with twentieth-century enforcement norms, is applicable to the twenty-first-century problems of business organizations.

Customer Reviews:

Fascinating View of Microsoft Propaganda.......2002-02-10

Mr. McKenzie's piece on the Microsoft monopoly is amusing if factually biased and tendered towards Microsoft.

Considering all legal disputes in regards to Microsoft's guilt are a moot point, the nature of this works is to try the legal system to deflect attention from Microsoft's anticompetitive behavior. These circumstances lead one to wonder what the class status of a lawbreaker is such that it can argue that it is in fact the law that is incorrect, not the behavior.

This title is a fascinating lobbying piece and a valid historical reference of Microsoft Propaganda in the Antitrust Years.

obviously biased analysis.......2001-06-27

As an attorney with a background in antitrust law, I was anxious to find a book that could cut through all the hype surrounding the Microsoft case. McKenzie approaches the case with an obvious axe to grind in favor of Microsoft; now, that's okay, as long as he still makes rational arguments. But his argumentation reads like a law school student trying to prove his antitrust professor wrong. I will give just one example--he argues that Microsoft isn't a "monopolist" because they "only" control 90% of the market. Anyone familiar with antirtrust law knows that the term "monopoly" need not be taken literally, and that market power can be exercised by a firm controlling far, far less than 90% of a market. Such spurious argumentation make you wonder if Bill Gates didn't subsidize this book.

Richard McKenzie: Trust on Trial.......2001-03-08

As an economist specializing on public policy, I have found the Microsoft case fascinating enough to have plowed through the economists' testimony in the case, the briefs from DOJ and Microsoft, the judge's findings, and a bit of the interpretive writings.

Mc Kenzie proved an excellent guide. My assessment is that the government totally failed in establishing the critical premises that Microsoft had a monopoly and predatory practices were a plausible strategy. The government's case on these points barely existed, and its lead expert contracticed himself and his prior writings. In contrast, Microsoft's expert economist present a coherent argument about why Microsoft should not be considered a monopolist and why the charges of predation were invalid. The government sought to hide this deficiency by concentrating on the tertiary point that Microsoft was aggressive. The government's experts and the judge got so steamed up about the appearances that they forgot the fundamental economic point the aggression without monopoly is useless.

The judge showed no understanding of the economcs and was not particularly astute about what any experience computer user knows. For example, he swallowed the government nonsense about the difficulties of downloading. (If it were so difficult, this site would not be as good as it is. )

McKenzie's careful, economically sound review of the case gives a perspective sadly lacking in the journalistic accounts that I have seen (including the press and magazine articles that were the basis for two of the three available journalistic accounts).

McKenzie, in particular, concentrates on the germane issue of why Microsoft should not be considered a monopolist out to overcharge consumers. He shows that the case really is one of rivals, unable to compete in the marketplace, running to Washington for aid. The book is a readable introduction to these critical economic points. It tells how the case developed and what the underlying economics are. People wanting a treatment of what really matters in the case should skip the journalists and try McKenzie. He is evidence that technical problems that journalists fear to treat can be made understandable.

The Government's case is baseless and destructive.......2000-07-30

This book by Professor McKenzie shows how baseless and destructive the Government's antitrust case against Microsoft is. He shows that the case is harming the economy, consumers, and the stock market. Significantly, in 1998 the Government lost the primary part of the case that it is now pursuing against Microsoft, the combining of a brower with the operating system. Those of us who use computers know that Microsoft has continually made the process easier throughout the years.

The Government's case is certain to fail, and will only serve to help elect George Bush, because of its devastating impact on the world's single most important company, and the American stock market. With friends like Joel Klein, Al Gore doesn't need any enemies.

David W. Lee Edmond, Oklahoma

good ideas, not enough followup.......2000-07-12

This book makes many correct arguments, but too often does not flesh them out sufficiently. This is especially frustrating because the meat is there to be had; the DoJ's case IS absurd. McKenzie could have used more input from someone well-versed in computers.

An example: McKenzie mentions Jacksons "application barrier to entry", but doesn't bring up the obvious reasons why that particular argument falls flat on its face. Applications are not magic beans that can detect the underlying OS and only run on approved ones. They are just data that you feed to an OS, like you feed "data files" to applications. So it is entirely plausible to create an application which takes other applications as data. A straightforward extension of this idea is creating a program on, say, Macintosh that can execute Windows programs -- and in fact such programs already exist. This renders the "application barrier" nonexistent, and the entire monopoly charge right with it. But McKenzie missed this entire line of argument.

And, of course, there is Java, which is essentially the same idea. The Judge seems aware of Java's "platform independence capability" but he is too technically ignorant to see that this undermines his entire applications barrier premise. Sadly, McKenzie is, too.

Still a book worth reading, though.

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