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The Lars Liebeler CNET article cited by Solveig raises interesting issues. The US DOJ and EC suits against Microsoft, as well as antitrust actions with other firms, may have started a disturbing phenomenon: a civil war in the private sector. I’m not talking about commercial competitors trying to beat each other in the market-place; rather, so-called consumer voices that seem to have adopted the DOJ’s and EC's missions, complete with tin-foil hats and all.
I’ll hand it to these self-ordained consumer groups, they are interesting. While claiming to be supporters of free markets, and looking disapprovingly on government interference with the private sector, they would do more harm to creators, consumers and innovation than any government may be capable of.
So, who are they, exactly? I will point to arguments rather than specific groups.
Our dear consumer advocates are romantic. They yearn for absolute free markets, which exist nowhere in the world, and perfect competition, an economic model that has proven itself in almost no industries. And they think that achieving such goals will benefit innovation. At most, the new consumer groups have a niche; as long as there is innovation, they’ll have creators to badger. But be wary of those who derive their usefulness from the productivity of others. They are unable to consider sums, or aggregate effects, they look at minute scenarios that may have no impact on the market, innovation or consumers. They have a low-threshhold for what constitutes harm, so when they want to find evidence of stifled innovation, anything goes.
These self-proclaimed consumer groups proffer policy recommendations with far more damaging potential than those proposed by antitrust regulators. Breaking-up Microsoft years ago would probably not have substantially injured the industry, at least not as much as the long term effects of such a precedence for antitrust regulation. However, the current IP system is far more important than any single company like Microsoft. Thus, its disturbing that our consumer advocates clamor for policy changes like eliminating software patents or repealing the DMCA , which are ill-calculated and would have disastrous consequences for the entire technology industries.
Our new breed of so-called consumer groups should leave innovation to those who innovate, and stop badgering the creators and enterprises that actually bring value to consumers and society. We should be thankful to innovators, not vilify them.
posted by Noel Le @ 6:19 AM | Markets: Business, Investment & Innovation
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