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Re: Forbes: OEM's Suffer from Microsoft's 'Scare Tactics'

  • Subject: Re: Forbes: OEM's Suffer from Microsoft's 'Scare Tactics'
  • From: "Rex Ballard" <rex.ballard@xxxxxxxxx>
  • Date: 4 Sep 2006 10:47:36 -0700
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Peter Hayes wrote:
> On Mon, 4 Sep 2006 17:17:01 +0100, Hadron Quark wrote
> (in article <871wqr8v42.fsf@xxxxxxxx>):
>
> > Peter Hayes <not_in_use@xxxxxxxxxxxxxx> writes:
> >

> >> Red Hat 1.0 wasn't even out until 3/10/94, so they weren't in any position
> >> to offer OEMs quantity discounts in 1993, 1994, or even later, in the NT4
> >> era.

The point is that there were Linux distributions, as well as UNIX
distributions going after the market that Microsoft failed to capture
with NT.  There were something like 250 million PCs that were ripe for
upgrades to something, and there were a few competitors who had
legitimate offerings.

> >>> Microsoft "rigged the game".  That's not competition.  That's
> >>> extortion.
> >> Precisely.
> > Its called business.

Sad, that one would view fraud, extortion, blackmail, sabotage, and
obstruction of justice as "business".  This means that drug dealers are
"business", prostitutes are "business".

> There's legal competition. Then there's illegal competition as with
> Microsoft, and Standard Oil.

Or AT&T, or Union Pacific Railroad, or U.S. Steel.

Cargagie built his monopoly by starving his competitors for supplies,
then cutting out the customers.  The mines had to agree NOT to sell to
competitors, which meant that even though US Steel was not necessarily
buying the capacity, they were afraid to NOT cooperate with Carnagie.

The UP Railroad brought farmers to the midwest, gave them 7 years to
clear the land, cut the trees, and sow crops, but at the end of the 7
years, they hired cowboys who would burn the farmers out, often
murdering the fathers, and taking the farms for a fraction of the
value.  Then, the cowboys grazed cattle on the newly cleared land, but
the railroad only needed to stop at the towns at the end of the cattle
drive.

AT&T strung the wires, and in the early days, the wires could only
carry one conversation at a time.  By the time divestature was ordered,
however, AT&T had the technology to share those wires with other
carriers.

> <snip>
>
> > I struggle with these "monopoly" and "strong arming" theories. If a
> > better restaurant opens down the street, the crap one fails. There are
> > no laws telling the new one that it cant undercut the old one. This is
> > called life.

On the other hand, if you wanted to put the competing restaurant out of
the game, you could do it.  You could threaten suppliers.  You could
threaten the patrons (put bugs in the salad, start fires mysteriously.
If you really wanted to manage, you could even stage some drive-by
incidents.  You could even hire people who would work for the
competitor restaurant, and sabotage it.

All of this would be illegal, but it would also be very difficult to
prove, and even more difficult to prosecute successfully.  A series of
unfortunate accidents.  The suppliers know that if they bring in
police, things will get worse for them.  The competitor knows that the
competitor is doing this, but can't prove it according to the rules of
evidence.  The customers might like the targeted restaurant more, but
know that "accidents" happen to people who go there too often.

Before long, the competitor is gone, and the remaining restaurant
becomes a monopoly.  The prices can be increased, the selection can be
reduced, and the service can be shoddy, but since it's the only
restaurant left in town, the monopolist now holds all of the cards.  Of
course, knowing how badly competitors get treated, the Banks won't want
to fund a competitor restaurant.

> Your analogy is flawed, as are most analogies anyway. No restaurant can stop
> another offering the same menu or undercutting prices.
>
> Microsoft stopped OEMs selling competing OSs.

The appeals court ruled that Microsoft had not obtained their monopoly
illegally.  When MS-DOS was first released, most PCs had barely enough
storage (on the floppies) to even consider going for more than one
option.

However, by the time Windows NT was released, the technology for
dual-boot had already been developed.  Microsoft just didn't want to
share.

> Peter


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