30 industry executives and noted economist say “remedies” will be disruptive and expensive
WASHINGTON, D.C. – Consumers will pay the price of a $30 billion increase in software costs if some critics have their way and split Microsoft into multiple companies or force the company to license its code, according to a study released today. Both proposals, suggested as remedies in the Microsoft antitrust trial, would create multiple versions of the Windows operating system, fracturing a popular product many consumers have chosen to run their personal computers.
Stan Liebowitz, Professor of Managerial Economics and Associate Dean of the University of Texas at Dallas, authored the study, which examines just one of the consumer costs of breaking up Windows.
“In the first three years alone, increased software costs will mount to nearly $30 billion,” Dr. Liebowitz announced today. “This cost is particularly expensive and disruptive when you consider the lack of consumer benefit to these types of remedies.”
“The enormous costs we’ve shown, which are only one part of the story, are in no way balanced by potential benefit,” Dr. Liebowitz said. “While this study focuses on software development, we know that additional costs would be incurred by OEMs, resellers, trainers and corporate IT companies. In addition to higher prices, consumers will also pay with having fewer choices and greater confusion.”
In reaching the conclusions, the author examined independent reports on PC software company costs, industry forecasts of software sales on the Windows desktop platforms, and personal interviews with software companies.
The study was released in Washington, DC today in connection with a day of Congressional meetings planned for member companies of the Association for Competitive Technology (ACT) and The ASCII Group, Inc. ACT is the fastest-growing industry trade association; ASCII is the world’s largest group of computer resellers. Company executives met with more than thirty Congressional offices to discuss regulation in the IT sector and the impact these remedies would have on their businesses. Mostly small- and medium-sized, the companies included computer resellers, software developers, trainers, Internet companies and IT consultants.
“The companies represented here begin to tell the story of how decisions in Washington affect IT businesses across the country,” said ACT President Jonathan Zuck. “We’re going to see significant costs of breaking-up Windows, but we’ve yet to see how it will benefit consumers.”
ACT is an industry trade association representing businesses and professionals in computer software and hardware development, and consulting and Internet services businesses. Protecting the freedom to achieve, compete and innovate, ACT is dedicated to preserving the role of technology companies in shaping the future of the industry.
