A Regulatory Crossroads


© Bert Markgraf

While small businesses of the kind I discuss can't be regulated effectively and also don't need to be, since, to be successful, they must be customer-centered, this is not necessarily true of large corporations. In the United States, such corporations are almost exclusively profit-centered and any focus on benefits to consumers goes out the window unless such benefits happen to coincide with higher profits.

In Canada and many European countries the regulation of large corporations for the benefit of consumers is a given but the orientation in the United States has been towards less restrictions.

The progress of the Microsoft case will therefore be a key indication of where the United States is headed. The benefits of forced integration of browser functions in the operating system is of doubtful benefit to consumers and will almost certainly hurt Microsoft's competitors. The first round of this attempt to limit Microsoft's near-monopoly position went to Microsoft in 1995 with a toothless ruling to stop anti-competitive practices. The second round now being fought could still go either way and it will indicate to what extent the United States is prepared to tolerate predatory business practices.

To help make up your own mind on this case, view the initial government press release here. The injunction against Microsoft is described here and Microsoft's reaction here. Read the Microsoft position here. The latest volley from the justice department can be found here and more on Microsoft's position is here.

From a small business point of view, a more regulated big business environment will increase the cost advantage that small businesses have in many areas. Apart from that, Microsoft's relationship to most small businesses is that of a supplier. When a key supplier gets into an all-out fight with its senior government, you'll want to make sure you aren't overly dependent on that supplier. You may also want to sell your Microsoft shares.

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