Thomas Sowell

According to The Times of London, the city of Munich has replaced Microsoft Windows with a Linux operating system in 14,000 of its computers. This provided a glimpse of economic reality, completely contrary to the premise on which Judge Thomas Penfield Jackson convicted Microsoft of violating the anti-trust laws.

Microsoft's "control" of the market for computer operating systems was based on calculating that company's share of the sales of operating systems for personal computers that used Intel-type chips. Judge Jackson eliminated all Apple computers, all network systems, and PCs that used operating systems such as Linux.

The more narrowly the market is defined, the easier it is to get high percentages showing one company's "control" of the market. That has long been a favorite tactic in prosecuting anti-trust cases.

What happened in Munich showed that this does not make any sense. Obviously there are things you can do with a Microsoft operating system that you can also do with a Linux system. Why then eliminate Linux systems from the definition of competitors in a market for which you are calculating percentage shares?

There is no denying that the two things are different. Otherwise they wouldn't be two things. But the question is whether that means that they cannot compete in the marketplace.

What is called anti-trust "law" might more accurately be called anti-trust tradition or even anti-trust ideology. Its failure to define what competition means and doesn't mean and its relying on murky notions like "control" of the market make it more vague than other laws that courts have struck down as "void for vagueness."

We all agree that the World Series is a competitive process. It is competition whether one team wins four straight or the Series goes all the way to seven games.

In anti-trust "law," however, the fact that one company's product is overwhelmingly preferred by consumers and vastly outsells similar products is taken to mean that the "market" is "controlled" by the company with the bulk of sales, so that there is a lack of competition.

If baseball were not exempt from anti-trust laws, the New York Yankees could be fined and punished for having won so many World Series. Tiger Woods could be in big trouble in golf as well.

Competition means that there are winners and losers. When someone wins big, that is not a sign that the competitive process did not exist or had something wrong with it. Too many judges see the anti-trust laws as protecting competitors, instead of protecting competition as a process.

Thomas Sowell

Thomas Sowell is a senior fellow at the Hoover Institute and author of The Housing Boom and Bust.

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