The Wheel of Fate Has Turned

On Friday, March 12, the president of Microsoft testified before the antitrust subcommittee of the Judiciary Committee of the House of Representatives.

The panel is investigating the news business. Traditional newspapers are dying off, and they are being replaced by digitized news sources that seem few and overly powerful.

This was, indeed, the point Microsoft's Brad Smith was making. Google is the big bad monopolist. Nobody else can compete in the world of digital news because Google has blocked all the avenues for doing so. There oughta be a law!!!

The wheel of fate has turned. Not too many years ago, it was Microsoft that was the big bad monopolist, and the forces of government were needed, so we heard, in order to cut MS down to size. But the government lost those cases, and the markets did find a work-around.

Let's pause and contemplate the turn of the wheel. Back in the day when Microsoft was the defendant, these were the arguments: digital computers are a new thing, and network effects are of unprecedented importance in the life of this new thing. This means economies of scale are of unprecedented importance, the diseconomies of scale virtually disappear. That in turn means that monopolization is unprecedentedly easy and incurable by any means other than structural governmental re-wiring of the industry.

That argument failed in the courts, and MS stayed together. Yet amazingly the market did find work-arounds. And now we hear, against Google, and in part from MS, the argument that the 'cloud' is a new thing, that network effects are of unprecedented importance in the life of this new thing. And so forth.

And so it goes.

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