The Ne w Ec onom y Doc t r i ne : W ha t The Cour t - PDF document

I T a nd Publ i c Pol i c y – Nov. 4, 2004 Hi s t or y The M i c r os of t Ca s e The Ne w Ec onom y Doc t r i ne : W ha t The Cour t Sa i d Re a di ng t he Le ga l Te a Le a ve s Pol i cy Conc l us i on: Ta ki ng St oc k St e phe n M . M a ur e r 1 2 Gol dm a n Sc hool of Publ i c Pol i c y 1890: The She r m a n Ac t 1969 -1980: I BM I nnova t i on 1911: St andar d Oi l Re l i e f 1956: AT&T I Ne t wor k Ef f e c t s 1974 -1982: AT&T I I I nnovat i on I s s ue s Re l i e f 3 4 1994 -1995: M i c r os of t I 2004 - ? : M i c r os of t I I I ( E. C. ) Li c e ns i ng & De vel ope r Se r ver M a r ke t Agr e em e nt s M e di a Pl ayer 1998 -2002: M i c r os of t I I Expl or e r & J ava Tr i a l , Appe a l , Rel i e f Pha s e 5 6 1

De f e nda nt No. Subj e c t M a t t e r ? W i ns La w Ye s . Se c t i on 1 No. Subj e c t M a t t e r ? De f e nda nt No. Li a bi l i t y W i ns Ye s . Ye s . “ Eve r y cont r a c t , c om bi na t i on i n t he f or m of De f e nda nt No. De f e ns e s & t r us t or ot he r wi s e , or c ons pi r a cy, i n r e s t r a i nt of J us t i f i c a t i ons W i ns t r a de or c om m e r c e a m ong t he s e ve r a l St a t e s , or wi t h f or e i gn na t i ons , i s de c l a r e d t o be i l l e ga l . ” Ye s . No. Ye s ! De f e nda nt Pl a i nt i f f Re l i ef 15 USC §1. W i ns W i ns 7 8 La w La w Se c t i on 1 Se c t i on 2 No. No. Subj e c t M a t t e r ? Subj e c t M a t t e r ? Ye s . Ye s . “ Eve r y pe r s on who s ha l l m onopol i z e , or a t t e m pt t o Re qui r e s M ul t i pl e Pa r t i e s m onopol i z e , or c om bi ne or cons pi r e wi t h a ny ot he r W ha t Doe s I t M e a n? pe r s on or pe r s ons , t o m onopol i z e a ny pa r t of t he t r a de or c om m e r c e a m ong t he s e ve r a l St a t e s , or wi t h f or e i gn na t i ons , s ha l l be de e m e d gui l t y of a f e l ony . . . 9 10 La w La w Se c t i on 2 No. No. Subj e c t M a t t e r ? Subj e c t M a t t e r ? Ye s . Ye s . An Ec onom i c St a t ut e ? “ I f we wi l l not e ndur e a ki ng a s a pol i t i c a l powe r we s houl d Doe s NotRe qui r e M ul t i pl e Pa r t i e s not e ndur e a ki ng ove r pr oduc t i on, t r a ns por t a t i on, and s al e of a ny of t he ne ce s s a r i e s of l i f e . ” W ha t Doe s I t M e a n? - -J ohn She r m a n 11 12 2

An Ec onom i c St a t ut e ? La w La w No. No. Subj e c t M a t t e r ? Subj e c t M a t t e r ? “ M a xi m i z i ng Cons um e r Ye s . Ye s . An Ec onom i c St a t ut e ? W e l f a r e ” “ Powe r t ha t cont r ol s t he e conom y s houl d be i n t he ha nds A De t e r m i na t e St a nda r d? of e l e c t e d r e pr e s e nt a t i ve s of t he pe opl e , not i n t he ha nds of a n i ndus t r i al ol i ga r c hy. ” “ Fos t e r i ng Com pe t i t i on” - -W i l l i a m O. Dougl a s Ea r l y Theor i e s – M ode r n Appr oa c h 13 14 An Ec onom i c St a t ut e ? La w La w No. No. Subj e c t M a t t e r ? Subj e c t M a t t e r ? Ye s . Ye s . “ Fos t e r i ng Com pe t i t i on” A M i c r oe conom i c Conc e pt De m a nd Com pe t i t i on v s .I nnova t i on DW L M . C. 15 16 Te a Le a ve s Te a Le a ve s Sc hum pe t e r i a n No. No. Subj e c t M a t t e r ? Subj e c t M a t t e r ? Com pe t i t i on Ye s . Ye s . Ne t wor k Ext e r na l i t i e s “ W e de c i de t hi s c a s e a ga i ns t a ba c kdr op of s i gni f i c a nt de ba t e a m ong a c a de m i c s a nd The Ent r e nc hm e nt I s s ue pr a c t i t i one r s ove r t he e xt e nt t o whi c h ‘ ol d The Ext e r na l i t i e s I s s ue e c onom y’ §2 m onopol i z a t i on doc t r i ne s s houl d a ppl y t o f i r m s c om pe t i ng i n dyna m i c t e c hnol ogi c a l m a r ke t s c ha r a c t e r i z e d by ne t wor k e f f e c t s . ” [ 11] 17 18 3

Te a Le a ve s Te a Le a ve s The Ent r e nc hm e nt The Ent r e nc hm e nt No. No. I s s ue Subj e c t M a t t e r ? Subj e c t M a t t e r ? I s s ue Ye s . Ye s . Bus i ne s s a s Us ua l ? “ I nde e d, t he r e i s s om e s ugges t i on t ha t t he e c onom i c c ons e que nc e s of ne t wor k e f f e c t s Gui da nc e v s .Ca s e - by- c a s e Rul e s . a nd t e c hnol ogi c a l dynam i s m a c t t o of f s e t one a not he r , t he r e by m aki ng i t di f f i c ul t t o f or m ul a t e c a t e gor i c a l a nt i t r us t r ul e s a bs e nt a pa r t i c ul a r i z e d a na l ys i s of a gi ve n m a r ke t ” 19 20 Pol i cy La w Copyr i ght vs . Ant i t r us t No. ( I nnova t i on vs . Com pet i t i on) No. Subj e c t M a t t e r ? Subj e c t M a t t e r ? The Ext e r na l i t i e s I s s ue Ye s . Ye s . M i c r os of t ’ s a r gum e nt t ha t Doe s t he Cour t “ Ge t I t ” ? ? ? c opyr i ght a l l ows i t t o pr e ve nt pe opl e f r om c ha ngi ng t he de s kt op “ . . . i s no m or e c or r e c t t ha n t he pr opos i t i on t ha t one ’ s pe r s ona l pr ope r t y, s uc h a s a ba s e ba l l ba t , c a nnot gi ve r i s e t o t or t l i a bi l i t y” [ p. 33] 21 22 Se c t i on 1 La w La w The or i e s No. No. Li a bi l i t y Rul e of Re a s on Li a bi l i t y Ye s . Ye s . De f i ni ng The M a r ke t Ba l a nc i ng Pos i t i ve a nd Nega t i ve Ef f e c t s M onopol i z i ng PC M a r ke t [ §2] Pe r Se Rul e s At t e m pt e d M onopol y of Br ows e r s [ §2] Pr i c e Fi xi ng Tyi ng W i ndows t o Expl or e r [ §1] Ge ogr a phi c Di vi s i ons Boycot t s e t c . , e t c . … 23 24 4

Se c t i on 1 Se c t i on 1 Tyi ng Tyi ng La w La w No. No. El e m e nt s : Li a bi l i t y Li a bi l i t y Ye s . Ye s . ( 1)Two s e pa r a t e pr oduc t s Tr a di t i ona l r a t i ona l e : ( 2)M a r ke t powe r i n t he t yi ng pr oduc t Le ve r a gi ng M onopol y ( 3)Cons um e r s ha ve no c hoi c e i n t he t i e An I nc ohe r e nt Doc t r i ne ? ( 4)Subs t a nt i a l vol um e of c om m e r c e i s a f f e c t e d. La w Ec onom i c s 25 26 Se c t i on 2 Se c t i on 1 La w La w Tyi ng M onopol i z a t i on No. No. of t he PC M a r ke t Li a bi l i t y Li a bi l i t y Ye s . Ye s . M i c r os of t I I Rat i onal e : Cons um e r c hoi c e . El e m e nt s 1) M a r ke t Powe r - Ef f i c i e nc y of i nt e gr a t i on; “ Nove l , + pur por t e d e f f i c i e nc i e s ” [ . p. 79] 2) Ant i c om pe t i t i ve Conduc t 27 28 Se c t i on 2 Se c t i on 2 M onopol i z a t i on: La w La w M onopol i z a t i on: M a r ke t Powe r No. No. M a r ke t Powe r Li a bi l i t y Li a bi l i t y Ye s . Ye s . De f i ni ng M a r ke t Sha r e W ha t i s t he M ar ke t ? M a r ke t Powe r Shoul d M i ddl e war e Count ? = M a r ke t Sha r e+ Ba r r i e r s t o Ent r y De f i ni ng Ba r r i e r s t o Ent r y The Appl i c a t i ons Ba r r i e r 29 30 5