Bonum Certa Men Certa

Intellectual Duopolists, Intellectual Oligopolies and Intellectual Mono

Microvell



What's increasingly found these days is diplomacy that leads to reformation of old-age Trust, where companies like Novell are invited to join the Microsoft ecosystem provided that they share the same pool of software patents. It makes these two an "Intellectual Duopoly".

An interesting set of a well-crafted explanations were recently recommended to us. These speak about what's known as "Intellectual Monopoly", which is wrongly (and deliberately) called all sorts of other things to add a positive connotation. In the index you will find a succinct description of the fallacies and their negative impact.

It is common to argue that intellectual property in the form of copyright and patent is necessary for the innovation and creation of ideas and inventions such as machines, drugs, computer software, books, music, literature and movies. In fact intellectual property is not like ordinary property at all, but constitutes a government grant of a costly and dangerous private monopoly over ideas. We show through theory and example that intellectual monopoly is not neccesary for innovation and as a practical matter is damaging to growth, prosperity and liberty.


A perfect example of this, which also fits the theme of this Web site, is Microsoft. As the following old essay states, Microsoft is resistant to change because of existing dominance; therefore it's reluctant to disrupt its own market with improved and more cost-effective solutions. A decade later, the same arguments remain very valid.

Despite its reputation among some consumers as an innovative company, Microsoft's number one goal is actually the opposite of innovation. Microsoft, like any other monopolist, can only succeed by preventing innovation. Here is a short summary of how they do it.

[...]

The control of the demand for a product involves controlling perceptions, which usually involves controlling advertising. If you build the world's best mousetrap, people will come to your door -- if they can find it! So the monopolist's duty in a high-tech industry will generally involve disinformation campaigns disguised as brilliant marketing.

This is where Microsoft's favorite marketing practices come in, such as preannouncing products long in advance, overstating their capabilities, and occasionally even announcing products they have no intention of shipping. However, these lies are only the beginning; Microsoft also uses an even dirtier trick of raising the entry cost for small companies into the marketing arena.


With Novell's helping hand, Microsoft is permitted to elevate the price of GNU/Linux, assuming you obtain it from the wrong places. Additionally, it wasn't more than a fortnight ago that a Windows 7 vapourware routine got pulled to "freeze the market" [1, 2] (Microsoft's own words). This harms the customer, which becomes misinformed and develops high expectations.

Overall, the main message to take from this is that whenever Microsoft boasts "innovation", it is worth noticing that it abstains from affecting its existing revenue sources. It won't, for example, permit Web-based applications to de-elevate the role of the operating system unless there is no other choice (Google, Salesforce and smaller players take the lead and take matters into their own hands, for example). Ever since the mid-nineties, when Bill Gates discovered the potential of Web-based applications in Netscape, Microsoft has viciously tried to squash this disruptive trend. It has been successful, until recently, but it continues to exclude rival operating systems in the process.

"COM/OLE programming in C++ was declared a success in order to block language invocation."

--Bill Gates

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