Code Warriors in Washington

Code Warriors in Washington

October 01, 1998

On August 28th, the Competitive Enterprise Institute joined forces with our Seattle colleagues at the Washington Institute Foundation to host a conference entitled Code Warriors vs. The Trustbusters: A Half-Day Examination of Antitrust in Cyberspace.

Seattle’s Washington Convention and Trade Center served as the setting for this lively clash of ideas over the merits of the Justice Department’s case against software giant Microsoft. The event was attended by a diverse group of attorneys, industry representatives, and media.

Senator Slade Gorton (R-WA) delivered the opening keynote address, noting that antitrust can itself be abused for anticompetitive purposes. Sen. Gorton even went so far as to link Sen. Orrin Hatch’s (R-UT) aggressive pursuit of Microsoft to the presence of prominent competitors in Utah.

The first panel featured Stan Liebowitz of the University of Texas, James Love of the Consumer Project on Technology, and Jonathan Zuck of the Association for Competitive Technology. Liebowitz is well-known as the debunker of the theory that the market has inefficiently locked consumers into using the Q-W-E-R-T-Y keyboard, VHS videotapes and Microsoft Windows. In Seattle he provided an overview of new research documenting that prices of major software packages like spreadsheets and word processors did not start falling significantly until Microsoft gained significant share in these markets. Microsoft’s growing market share thus appears to be a boon to consumers, not an example of monopoly harm.

James Love criticized Microsoft’s business practices, arguing that the company leverages its operating systems to dominate other markets. He urged that Microsoft provide technical data to software developers so that its programmers will not have a leg up on others. Love also described the merits of alternative operating systems such as Linux.

Jonathan Zuck outlined and criticized three assumptions typically made and regarded as self-evident facts about Microsoft. The first is the notion that Microsoft truly is a monopoly. The second is that the company is always trying to crush competitors and that they do not care about consumers. The third false assumption is that the government is the answer to those problems. Zuck posed the question: Should ideas move at the speed of light or at the speed of government?

Rep. Rick White (R-WA) offered mid-morning comments in defense of Microsoft and noted his efforts to avoid any star chamber-like hearings in the House similar to those held in the Senate by Orrin Hatch. White was followed by a panel featuring George Priest of Yale Law School and Ed Black of the Computer and Communications Industry Association. Black featured a video outlining what the CCIA regarded as monopolistic behavior, while Priest criticized the Justice Department’s antitrust action, citing Judge Robert Bork’s 1978 book, The Antitrust Paradox.

The event drew considerable attention. Stories profiling the debates appeared in the Seattle Times, InfoWorld and the Seattle Post-Intelligencer. Wired News offered an online preview and post-conference commentary, and WTV — the Washington state version of C-SPAN, provided television coverage.