IT IS not entirely accurate to say that increasing returns are simple economies of scale ("The simple idea that lies behind Microsoft's aim to rule the world", 19 February). Increasing returns mean that a product is more likely to succeed simply because it is more widely used. The implications of this argument for the Microsoft case are that the company becomes a "natural" monopoly, and will retain this position irrespective of market or government pressure.
What Microsoft does matters. There are too many stories of predatory or unfair conduct to ignore and the position should be properly investigated, if only to clear the air. Unfortunately the present case brought against the company by the Department of Justice need not establish that Microsoft has broken anti-trust law, merely that it is operating outside the terms of an agreement concluded in settlement of an earlier case.
Meanwhile the rest of the world must wait and see what approach America will take to this "national champion". The view widely held by American anti-trust lawyers is that Microsoft will win its case, at which point the company may find itself under increasing pressure in other jurisdictions. The danger is that the company will either be subject to a plethora of actions and standards around the world, or will go unchecked.
America is resisting moves to introduce competition law into the World Trade Organisation remit, but a global system, which would allow a single considered approach to truly international issues, may be the most appropriate solution to cases such as Microsoft's.
Senior Lecturer in Law
University of Westminster
London W1Reuse content