Antitrust

Apple is playing right out of Microsoft’s playbook—and it’s one they complained about a lot

Someone named David Balto, quoted in the Wall Street Journal.

Microsoft feared all of these technologies because they facilitated the development of user-oriented software that would be indifferent to the identity of the underlying operating system.

This is quoted from the findings of fact in the Microsoft anti-trust lawsuit.

Here’s a brief rundown of the Microsoft playbook:

License DOS from a small company (because you have no in-house capability to do something similar yourself) and then license that code to IBM. When the resulting property becomes incredibly valuable, screw over the original developer.

It’s widely rumored that Microsoft deliberately broke Lotus 1-2-3 with upgrades to DOS on two occasions (DOS 2 and DOS 3.31), but it looks like someone did some detective work to show this is probably not the case. (DOS 2 did break Lotus 1-2-3’s floppy-based copy protection, but this may have been inadvertent; DOS3.31 broke both Excel and Lotus, but that seems to just be incompetence.)

When Microsoft was publicly beta-testing Windows 95 it inserted code in the loader to detect programs compiled with Borland compilers and insert an error message, making it look as though any program produced using Borland products was not to be trusted. Microsoft initially denied this was deliberate, then claimed it had a legitimate reason for doing so (but couldn’t supply one).

Microsoft did its very best to undermine all efforts at making file formats open and interchangeable in an effort to protect its monopoly on desktop office software.

It’s probably instructive to look at the findings of fact from the Microsoft anti-trust lawsuit as well. If I may summarize:

  • Microsoft created its own, incompatible implementation of Java in an effort to undermine it, and then induced third parties to use it over Sun;’s version
  • Microsoft gave away a free alternative to NetScape, “rewarded” third parties to target or distribute it over NetScape, and did its best to undermine NetScape in other ways.
  • Microsoft did its best to damage rival multimedia platforms (QuickTime and RealNetworks).

It’s not like these are isolated incidents in an otherwise unblemished record. Microsoft has consistently acted in a predatory and underhanded manner — e.g. it’s hard to think of a major release of Windows that didn’t put several third party developers out of business with clones of their products given away. Remember Stac? Lots of pundits conveniently forget that Microsoft’s $150M cash injection into Apple in 1997 in part settled a very embarrassing lawsuit (which involved, among other things, Microsoft stealing source code from Apple and then threatening to pull Office for the Mac when Apple called them on it).

Based on the above, I’d have to say that Apple’s moves resemble Microsoft’s in one important way (it doesn’t want cross-platform middleware to make its platform irrelevant) but that’s about it. The differences between the two are much greater than the similarities.

First of all, Microsoft’s platform lock-in was based on the difficulty of porting software from a technical standpoint. There was pretty much no end-user benefit involved, since Microsoft didn’t tend to differentiate its platforms with any real innovations (more like, hey our new OS copies some more stuff from our rivals and fixes these glaring deficiencies). Microsoft wasn’t afraid its superior user experience would be marred by a generic, ugly, non-standard UI running on a cross-platform runtime (although in the case of Java this would have been a legitimate fear). On the contrary, it was simply afraid that people would be able to develop equally good, or even better software that ran on anything.

The one case where Microsoft really tried to innovate its way to success was probably Internet Explorer. The main way to entice websites to support IE over NetScape was to provide superior development platforms and APIs. Most notably, Microsoft added AJAX and .NET. But even with IE, Microsoft couldn’t resist doing Evil stuff on the way, such as trying to “embrace and extend” both Java and JavaScript to death, and halting the progress of web standards once IE became dominant (IE6-8). Only now, as IE’s position is threatened on the mobile web, is Microsoft once again trying to produce a good browser, rather than a container for its proprietary technologies.

Does Safari represent part of Apple’s platform lock-in? Does it support proprietary web extensions (such as .NET or ActiveX) that would result in websites that only work properly in Safari running on a Mac? On the contrary, Safari is open source and standards-based. Anything written to run well on Safari will run well pretty much anywhere, including on IE9. And, in any event, webkit has been adopted by both Google and Adobe, so it’s hardly affording Apple much of a platform-specific advantage.

Microsoft didn’t ban third-party development tools, instead it tried to undermine them and sabotage them based on strategic business imperatives. Apple, instead, has stated that it wants to offer users a first-rate native experience and has explicitly barred all tools which (in its opinion) violate this. It’s not like Apple has tricked developers into building tools for the iPhone and then pulled the rug out from under them; instead it has made it very clear it doesn’t want third-party platforms running on the iPhone and makes its wording more explicit every time someone finds a loophole.

And, finally, Apple isn’t in a monopoly position (except maybe in the music player market, which isn’t the question at hand). When Microsoft did all this it had over 90% of the desktop computer market (and it still does). Right now, Apple isn’t even dominant in the “smart phone” market (except, perhaps, in Japan). In the cell phone Apple has large rivals with significant market share who are free to compete with Apple either by eschewing its tactics or embracing them.

It seems to me that if we want to complain about the cell phone market, we really ought to be complaining about Android. After all, why can’t we buy Android handsets that automatically keep up-to-date (or, at least, allow us to keep up-to-date) with the latest OS? In Google’s lust for market share, it has allowed handset makers and carriers to do anything they like with Android, and what they like is locked in customers with crippled phones. In a choice between crippleware and a walled garden, users are opting for the walled garden — wouldn’t it be nice if we actually had a choice between a real open platform and the iPhone?

  • The other chief difference between Safari and IE, is that Safari isn’t baked into the OS the way IE is. You can’t actually uninstall IE from Windows without breaking it, while Safari is just another app. And iTunes isn’t just a nice skin on a Safari window and some media plugins.
    Another major difference, if I’m not mistaken, is that IE was a reaction to Netscape being successful on Windows while Safari was largely a reaction to the absence of web browsers for MacOS. IE was alternating between being two versions behind to not being developed at all. Netscape was dead, and FF didn’t have the support base on the Mac that it did for Windows and Linux, so Apple developed their own browser.
    This seems to reflect how the two companies have operated. MS sees anyone adding value to their platform as competition, while Apple doesn’t see anyone adding value to their platform.

  • Interesting graph showing where Adobe’s money comes from:

    http://www.businessinsider.com/chart-of-the-day-adobe-revenue-2010-5

    Note that its revenues from “platform” are small and pretty constant (I imagine that this is a combination of Cold Fusion, Flash Server, and Flash DRM revenue). I’m guessing the dip in creative solutions revenue is a result of the leadup to CS5, and not part of a general downward trend.