It's Our Money!
Friday, May 26, 1995 by Dave Winer.
On Tuesday I talked with my buddy Fred Davis, email@example.com, on his return from a two-week trip to Amsterdam. Fred came back with a bunch of clean energy and anger. It was a cool talk. It turns out we're angry about some of the same things!
We talked about the hypocrisy of the US Justice Department. The cancellation of the Microsoft/Intuit merger makes no sense. The banking industry sucks. Why not let the software industry have a shot at driving the process instead of the inbred system that gave us the Savings & Loan debacle?
I said to Fred, this sounds like a DaveNet piece!
It's getting tougher and tougher to believe in the justice part of our justice system. Now, it's the Justice Deptartment's turn to make a mockery of what's just in its preening and crowing about busting the Microsoft-Intuit deal. Ann Bingaman -- Janet Reno's antitrust hatchet-person -- proclaimed Microsoft's dropping the Intuit deal a "major victory for American consumers." Hello? Has she ever used a computer? To me, this smells like a giant setback to consumers, who will be delayed in the benefits they might otherwise receive through the efficiencies of electronic shopping and other transactions.
What really burns me about this position is that Bingaman and Co. are presenting the American public with a cynical deception. In the guise of defending the American consumer, what the Justice Dept. has really done is defend one of America's special interests -- the banking industry -- which uses very heavyhanded anti-consumer business practices.
Have we already forgotten the savings and loan debacle and the fact that we're still paying dearly for it? The government and the banking system have long been in collusion to take advantage of hapless consumers, and I'm sure we all have dismal personal experiences with the banking industry that make any kind of support problem I've ever had with Microsoft look trivial.
I don't have all the exact numbers at my fingertips, but fairly simple arithmetic can demonstrate that Microsoft just isn't that big a company to warrant the kind of antitrust paranoia that the Justice Deptartment has been promulgating. If you look at Microsoft's annual revenues, it's apparent that it only controls a small, single-digit portion of the computer industry. It's hard to make a case that a company with a small amount of the pie can be making such egregious violations of antitrust law.
My dad was an IBM lifer, and when I grew up, IBM really did control most of the worldwide computer market -- and their antitrust suit was ultimately dropped by the government. Today's market is much more diverse and open to competition as evidenced by the rapidly changing fortunes of all the various computer companies. Remember, it was just a few short years ago when Lotus was the dominant company in the industry with twice the annual revenue of Microsoft.
Certainly, Microsoft isn't lily white -- the per CPU license deal with OEMs definitely went over the line -- but Microsoft is far from being a monopoly. Maybe if it ever gets to the point where it has 80 percent of all software revenue, we can accuse it of being a monopoly. In the meantime, it's just incredibly successful, which has a lot of people in a jealous rage.
The Justice Dept.'s attitude should definitely be a wake-up call to the computer industry. Despite the enormous contributions that we are making to the economy and to our culture, the government doesn't like us and is out to protect its vested special interests, such as big banking, rather than help what I think most of us believe the most dynamic force, not just in our country, but on the planet today.
My cynical thought is that government will remain a dirty business for some time to come, and the only way the computer industry will be able to get what it deserves is to do a better job at playing along -- which I interpret as a need for a more effective computer lobby. I've got to believe the banking lobby somehow influenced the Justice Dept. and yet the only lobbying the computer industry can respond with is the SPA -- what a joke. By distracting the industry with stupid small-potatoes like software piracy, the SPA is denying the industry the benefits of a truly effective lobbying organization that would work at a much higher level to garner an appropriate place for computer technology in national policy.
Because ours is a new industry that's most been self-reliant, we've never faced the fact that we have to work against the system to make progress. Now that computers are playing a broader role in society, it's even more critical to educate the government and our lawmakers about the issues that we face and how the system can work with rather than against us. I hate the idea of lobbyists manipulating the system, but if we don't fight fire with fire, we're the ones who will wind up getting burned.
PS: Check out Steven Levy's column in the 5/29/95 Newsweek. Spielberg is coming to Silicon Valley! He's going to make our software more emotive and interesting from a human perspective. Show us the way! And he brings something we don't have -- real money for new creative projects. In Silicon Valley, Levy says "a production budget in the low seven figures requires a deep breath and a dispensation from the venture capitalists." True! Ridiculous! Grrrrr. In Silicon Valley we think money is the *most* precious thing. In Hollywood, a low-budget movie from an unknown producer gets $10 million to play with. It seems the LA venture bankers take a risk every once in a while!