Public Agencies Take Turn Suing Microsoft

by | Sep 7, 2004 | Antitrust, POLITICS

Antitrust settlements are a lot like shark chum–they attract predators instead of staving them off. Consider the case of Microsoft. Microsoft chose to settle an antitrust suit brought by the California class action bar to the tune of $1.1 billion dollars in software vouchers. The suit alleged Microsoft overcharged its customers for its products. Yet […]

Antitrust settlements are a lot like shark chum–they attract predators instead of staving them off. Consider the case of Microsoft. Microsoft chose to settle an antitrust suit brought by the California class action bar to the tune of $1.1 billion dollars in software vouchers. The suit alleged Microsoft overcharged its customers for its products. Yet rather then placate its opponents, the settlement has led to an effort to loot Microsoft further.

When Microsoft Corp. agreed to fork over $1.1 billion in vouchers to settle a California consumer class action, public entities thought they were entitled to a piece of the pie. But they soon found out they were excluded from the January 2003 settlement. Now the public entities — led by the city and county of San Francisco and the county of Santa Clara, Calif., — have filed their own antitrust suit against Microsoft. And they say they won’t be satisfied with vouchers to buy computer products. “We’ve asked for damages,” said Martin Dodd, Santa Clara’s special assistant county counsel. “We’re looking for money.” The suit, filed Friday in San Francisco Superior Court, does not specify damages but Dodd said he expects the amount to be “quite substantial.” [Law.com]

I’m sure the damages will be; after all, Microsoft already has morally conceded that it defrauded its consumers and there’s a lot more money to be made in looting businessmen then in defending them.

Who is to blame? No surprise here: the businessmen themselves. Microsoft decided long ago that it would not challenge the fundamentals of antitrust; that is, it would not challenge the premise that a businessman controlling the makeup and price of his products is a coercive threat to others. It declared that defeating the antitrust bar was not important and allowed its opponents to define the terms of the debate.

What to do? It is earlier then we think. Antitrust will not be defeated absent a cadre of businessmen who reject as a matter of principle any attempt to place them in shackles. How do you achieve that? I thin k it takes more than communicating the evils of antitrust. You have to relentlessly communicate the positive case for freedom–the case for the individual, his mind and his rights; that is, the case for Objectivism. And to do that you have to reach businessmen as their ideas about their place in the world are being formed–before they surrender to their enemies. I am convinced that anything less will both fail to produce the abolition of antitrust and achieve the larger, positive goal–the creation of a society that values the human mind and its compelling need for freedom.

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Nicholas Provenzo is founder and Chairman of the Center for the Advancement of Capitalism.

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