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The following is the text of a letter that was sent by CSE Board Chairman C. Boyden Gray to each of the state attorneys general.
March 26, 1999
Dear Attorney General:
Justice is done when the innocent are protected, the wronged are righted and all are afforded the same treatment under the law. Economic regulation bears a very heavy burden of justification, which has not been met, and pursuit of the pending antitrust suit against the Microsoft Corporation is economic regulation pure and simple.
At its essence, economic regulation is a statement of belief. Regulators believe that they know more about what is good for consumers than consumers do. This belief leads to some indefensible conclusions. For example, some of your colleagues believe that they know the best way to organize the marketplace or how to combine various software programs. This is absurd.
Competition in a free market produces the best combination of quality, service and price while encouraging innovation. As a result, consumers benefit. The American consumer can make choices for herself. A man on the street knows more about his needs than any of us. I urge you against the pursuit of new and harmful economic regulation.
If the Department of Justice attempts to float a trial balloon in the form of a proposed "remedy," as chairman of CSE Foundation’s advocacy affiliate, I caution you to three points.
It is premature to discuss remedies when, to date, no harm to consumers has been demonstrated. A remedy must necessarily improve the situation. And, the proposed remedies would do significant short-term harm to the marketplace.
Microsoft is a leader because they did it the old-fashioned way. They built a company from the ground up, not through mergers and acquisitions, but through ideas and valuable products combined with clever marketing and aggressive sales. A divestiture – or its functional equivalent, compulsory licensing – would be unprecedented. Unlike railroad, steel and tobacco, there is no natural "fault line" where a breakup could occur. Regulators would be faced with dividing a company in its organic – or whole – state.
Innovation and the future of America’s dynamic software and computing industries are at stake. It is no small step to introduce such intrusive economic regulation to the marketplace. We may never measure, nor recover from, the long-term effects of a regulated computing and software industry.
Consumers do not need protection from competition, only from harmful economic regulation. All too often, consumers need protection from regulators. If you would like to discuss this issue further, please contact me or the staff at CSE Foundation. Our mission is to promote free market policies; we speak for consumers.
C. Boyden Gray