Focus Point - Splitting Microsoft

Commentary by Pete du Pont

I'm Pete du Pont with the National Center for Policy Analysis. The government's spending a lot of time and effort to break up Microsoft, but is the law of unintended consequences lurking in the weeds? Alan Reynolds of the Hudson Institute thinks so. He asks why splitting Microsoft in two won't just create two monopolies.

To anti-trust lawyers, "monopoly" just means market share. So if Microsoft has tied up both operating system and office suite markets, it must have a monopoly. But to economists, monopoly means consumers have no choices, and prices go up, not that most of them prefer the same product. And when it comes to both operating systems and office suites, people do, and prices are going down.

The problem is, even with alternatives, most people just prefer Microsoft products over its competitors. And breaking the company in two will just make two so-called monopolies instead of one, not because of Microsoft's machiavellian designs, but because it's doing a good job.

Those are my ideas, and at the NCPA we know ideas can change the world. I'm Pete du Pont. Next time, the bioengineering bias.