Re: TBTF for 1999-01-04: Blue moons

Mike Masnick (
Wed, 06 Jan 1999 22:16:10 -0800

At 08:28 PM 1/4/99 -0600, you wrote:
>..An offshore view of free US browsers
> Are Microsoft and Netscape colluding in restraint of trade?
> Robin Miller's article [1], first published in the Baltimore Sun
> last month, suggests that the makers of the Opera browser ought to
> get together with the Norwegian government and mount an interna-
> tional "dumping" suit against the US govenrment and the two dominant
> US browser makers.
> > Opera Software has at least as much right to be angry at
> > Microsoft and Netscape as American steel and auto producers
> > have to be upset by predatory pricing by Asian steel and
> > auto companies... I expect Opera Software and the Norwegian
> > government to sue Netscape, Microsoft, and the U.S. Govern-
> > ment for violating the same treaties and international trade
> > principles held so dear by American smokestack industries.
> I haven't seen this suggestion circulated widely -- it was carried
> on the Politech mailing list and picked up by Andover News [2], for
> which Miller sometimes writes -- but if Opera's developers take the
> hint you'll see it everywhere.
> [1]
> [2]

I think they'd have a hard time proving a dumping argument. They can try,
but if they do, it'll simply be based on blindly trying to support a
company rather than any real economic arguments. This has bugged me
recently about past claims of MS unfairly pricing IE to get at Netscape.
While, I am not an open source zealot, and don't pay much attention to
them, I am interested in the basic economics of the situation (which they
do occasionally touch on).

In order to be dumping, in the true sense, you need to be offering the
product below cost. What's the cost for Opera? Well, an economist would
claim, of course, that it's the marginal cost to produce a copy, and that,
being software, would be zero.

So, the answer is that Opera is marking up the margin on their software too
high, and MS and Netscape are simply taking fair, competitive, advantage of
that. It's not an uncompetitive move. If anything, they've moved to make
the market more efficient.

I don't know much about Opera, beyond having tried it once, but if they
folks behind it are as smart as everyone claims they are, they should look
into the basic economics, and some of the points that the Open Source crowd
make concerning how to build a sustainable business based on giving away
the code (whether or not you give out the source - though the business
arguments could be *stronger* when the source is given away)...