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June 02, 2006

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Alex Platte

I'm a little surprised that this is an issue of concern. Certainly Microsoft has unique constraints on it because of antitrust considerations, but pdf files are not solely Adobe's domain. There are existing open-source tools that generate pdf files (from LaTeX source, for example). More significantly, Mac OS X allows a user to generate a pdf file from any program that may print a document, including Microsoft Office.

A user who has paid for Microsoft Office on the Mac may generate pdfs without additional charge or hassle; why must Microsoft be careful not to step on Adobe's toes, but Apple apparently not?

Paul

Adobe's PDF/Acrobat format is a monopoly. There is essentionally no competition out there for them. I'm sure there is something, but Adobe has the market locked up. Couple that with Adobe submitting the specification for PDFs as a standard and allowing anyone to make "print to PDF" drivers and give them away free and I'll make a guess that Adobe is abusing their monopoly.

c&d

This post completely ignores the reason why there would be antitrust problems with Mircosoft's proposed software: Microsoft intends to add on its own (certainly proprietary) pdf-like format. If use of XPS was made easy and free, it might become a very common way to distribute files. This seems like a good thing, but it would further strengthen Microsoft's position as a monopolist by making it more costly to switch to another operating or office software program that could not open files in the new widely-used format.

With the added market power resulting from network effects, Mircosoft could increase the price of its software. In then end, more Microsoft monopoly is not free.

p.s. Why don't you encourage your school to use OpenOffice? You can save files as PDF's... truly for free.

Gus

C&D, I think, hits the concern square on the head. The fear is that MS will "embrace and extend" the pdf format into its own format.

I'm not sure that they will do this intentionally in this case. More likely, I think that their implementation will inevitably have bugs in its output. I know that their current one does; for that matter Adobe's own pdf conversion software sometimes doesn't work well. As Alex noted, there are many pdf conversion programs--back when I was writing scientific papers, I routinely had to use about a dozen different programs to get any given paper to convert right.

Inevitably, the concern is, MS's pdf implementation will become the reference implementation that pdf viewers need to work with, bugs and all. Even Adobe, with its power over the reader market, won't be able to push back and force MS to fix its conversion software. People are used to downloading pdf readers (or at least seeing "Get Acrobat Reader" buttons all over the web)--in the consumer mind they are programs that one downloads. PDF converters, especially if there is included in Word, are not thought of in this way. In the MS world, changing converters means changing versions of Word (even if this isn't true; when's the last time you changed an import or export filter in Word?).

That MS isn't in the reader market mitigates this concern to some extent, as does the infrequency with which they change Word's conversion filters. During the browser wars, HTML was evolving at a quick pace. This made it easier for MS to stay ahead of Netscape by frequently adding features. More, the added features could be more complex (requiring a lot of work for Netscape to add compatability), and legitimately added to the web user's experience (arguably--and let's not mention how difficult MS has made it to develop web code that works with both MS and non-MS browsers). PDF is a more evolved format than the web was, any major changes to its format can be more clearly seen and scrutinized, and it is probably easier for programmers to work around the changes/bugs, which limits any power that MS could leverage.

Nonetheless, MS would by default be leveraging its power in the pdf writer market. So long as their conversion program works reasonably well, the pdf reader programs will need to change to support the MS format. This cascades back into the pdf writing market: everyone other than MS will then need to change their programs to generate pdfs that conform to MS's bug-based standard. This assumes that the pdf reader market doesn't modify their readers to support two pdf formats: the buggy MS pdf, and the true pdf. A well engineered reader should be able to identify a MS-created pdf from a non-MS created one (at least in the majority of cases), and to display as appropriate. This costs the pdf reader companies money, because supporting multiple standards is inefficient. But, so long as MS stays out of that market, they can't get any advantage. Creating inefficiency might be bad business practice; but last I heard it's not anticompetitive.

A threshold query is going to be the preponderance of MS-created pdfs relative to non-MS pdfs. If 95% of pdfs are created by MS, then it might make sense for the pdf-reader companies to ignore the pure formats (especially if another 90% of them are generally compatible with MS's bugs). This would signal that we should look at this maket with more scrutiny. But if the numbers are lower, there is no need for antitrust scrutiny.

C&D brings up another interesting point: OpenOffice. Do we want MS to implement conversion filters in Word that allow it to talk to OpenOffice? If Word users could seamlessly interoperate with OpenOffice users, this would reduce Microsoft's market power (assuming that they don't mess with the format. It seems that the same analysis needs to apply to the PDF format as to the OpenOffice format. Either adding a filter for an external format to Word leverages MS's monopoly against the other market, or it lessens MS's monopoly by allowing greater interoperability. (It is possible that the bidirectional nature of the OpenOffice case differentiates it from PDF...)

--Gus

Randy Picker

C&D and Gus,

I understood what you said, but I don’t think that I get it. Try two versions of this. In the one, Microsoft is introducing a format that preserves the look of a page across platforms and programs. This is what I think of pdf as doing. Microsoft does this with a different program—is that what XPS does?—and gives that away for free (in one version of the hypo, as part of Vista or Office, in the other version of the hypo, as a download that works with Vista or Office). In the second version, Microsoft introduces an extended version of pdf.

Are we saying that because that product will do well—indeed, in c&d’s version, achieve a monopoly—Microsoft is not allowed to distribute it? As c&d’s comment recognizes, most of us might think that this “seems like a good thing,” indeed, as competition on the merits coupled with legitimate fruits of Microsoft's success in distributing software. Yes, this might strengthen Microsoft’s monopoly power, but I don’t see how an administrable competition policy deals with this. The alternative seems to be say to that the market leader can’t continue to compete and can’t continue to add functionality to its products.

And remember the DC Circuit’s perspective on this. The accusation was that Microsoft was trying to embrace and extend Java. It did so in a fashion that the court found to be deceptive, but as the court said “a monopolist does not violate the antitrust laws simply by developing a product that is incompatible with those of its rivals.” The court found competition on the merits—competition to make a better version of Java. I would think that that analysis would carry over here.

c&d and Gus, tell me what policy you are suggesting that we implement. Windows and Office have to be frozen as a particular point in time never to change? (I do realize that given Microsoft’s development cycle for Windows, that might seem like a fair description of the current situation, though I do assume that Vista will be delivered some day.) Any new functions have to be distributed separately and charged for separately? That is what Adobe seems to want. Can Microsoft switch to ad-based payment ala Google? Can they have just a few ads in their free software or will we insist on some minimum number of ads so that the “free” software isn’t too free?

Gus

I don't think that I'm disagreeing that the outcome in this case is wrong. Indeed, if this were the result of litigation, and not just failed negotiation, it would reek of the "protect the little guys" and "punish the successful competitor for being successful" memes of generations fortunately past. Rather, I was playing out C&D's post's "embrace and extend" idea. Also, I am pushing back against the idea that this sort of bundling is necessarily not anticompetitive--in some cases I think that it might be.

That said, I think that I am mirroring the DC Circuit's perspective, the next sentence of which says that "In order to violate the antitrust laws, the incompatible product must have an anticompetitive effect that outweighs any procompetitive justification for the design." I'm not ready to say that the allowing MS to bundle this functionality is anticompetitive. But I'm also not willing to create an broad presumption that it isn't.

Interestingly, the DC Circuit's decision looks favourably upon MS's Java implementation because it runs faster than Sun's. This is procompetitive. In the hypothetical case I consider, where MS's modifications to the pdf format are bug-induced, there would be no procompetitive value. Presumably the bugs add no valuable functionality. But MS's ineptitude could benefit it at the expense of competition.

Perhaps a way to think about the XPS vs. PDF hypothetical you give is in terms of hijacking. If MS introduces XPS, it will be in competition with PDF. Yes, it will benefit from MS's monopoly position. But PDF has comparable market power in the reader market to the power that XPS would have in the writer market. In order to be successful, MS's XPS reader would need to be competitive with PDF readers. But when MS introduces a "proprietary" PDF it is leveraging its writer monopoly to hijack Adobe's reader market.

Of course, this doesn't much matter if MS isn't planning to enter the reader market. And so long as they're not entering that market, it is hard to see how they could use this newfound power to its benefit.

There are two difficult twists in these situations. First, as we see in the Java and PDF cases, if MS intentionally adds features, in order to successfully leverage its existing power the new features will need to add value--be procompetitive--and therefore are less likely to have anticompetitive harm. Converesly, if the new "features" are unintentional (ie, are bugs), they are less likely to have procompetitive value, and more likely to cause anticompetitive harm (authors of PDF readers will need to waste time and money rewriting their code to support a new de facto standard (wasteful duplication/deadweight loss), and the new standard's changes will not be in response to competitive forces); but because the bugs alone can't be leveraged to create market power, there is no antitrust violation. (When MS releases a buggy program that costs corporations millions in lost productivity we don't call it anticompetitive--we don't even seriously call it a tort.) Second, as I suggested in my initial reply, if MS tries to add support for PDF, the gut reaction for many is that it is anticompetitive; but if they refuse to add support for OpenOffice formats, the gut reaction is that, too, is anticompetitive. So which is it? Do we want MS to support other formats or not?

The answer, of course, is that we want them to support other formats, but to do so without modification unless that modification is procompetitive.

Which brings me to my final point, in response to your question about my ideal policy. Honestly, I don't think that the current model is too bad--it's important to remember that MS's decision was a business decision, not a judge's (though certainly the potential cost of litigation with Adobe factored into the calculus). Either MS will pay Adobe a couple hundred million dollars, which will add a buck or two to the cost of Word (which has relatively inelastic demand); or users will need to pay Adobe directly or find a lower priced (free) alternative. In either case the consumer foots the bill (even in the free case--the opportunity cost of finding, installing, and using free software is certainly more than a buck or two), and Adobe makes money (I am not sure what Adobe would do if its software were threatened by a non-Microsoft free alternative). This is how it should be, because Adobe has patents that read on the PDF format (see http://partners.adobe.com/public/developer/support/topic_legal_notices.html). We're not going to take away Adobe's patents simply because they have become important. To the extent that you see problems with Adobe's refusal to let MS use PDF, I think that your complaint is with the patent system, not with how Antitrust treats MS when adding features. (Note, I do think that the patent protection of the PDF format is too strong, but that is neither here nor there for this discussion.)

To the broader question of how we treat MS's addition of features to its software, in my dream world I would say unbundling. But in the telecom sense, not in the "everyone needs to buy each component separately" sense. Standards are natural monopolies; and their power derives from (virtual and actual) network effects. As with the telecom model, the difficulty is pricing. But practical things aside, I think it would be great if the developers of OpenOffice could buy a copy of Word at wholesale, add in their own filters and formats, and sell it OpenOffice-brand Word. This would let the OpenOffice developers compete feature-by-feature with Microsoft, instead of requiring that they compete from scratch against a feature-full product whose value is manifoldly multiplied by network effects. We only need one word processor--the question is how do we ensure competitors can compete with the incumbent word processor.

The practical difficulties of determing the pricing model for unbundled software components makes this dream of mine an impossibility--but you asked what I would like the world to look like, so I told you. Ultimately, I fear that the DC Circuit got the basic rule right. So long as MS isn't "embracing and extenting" to anticompetitive ends that outweigh any benefit, there should be no liability.

--Gus

michel

I don't care ONE second about consumer or monopoly or capitalist open-market crap

I care only about one thing: the INDUSTRY, to make money and work need ONE GOOD and EFFICIENT and UNIVERSAL standard.

that standard is pdf. for worst and best

and it's pretty common and efficient. you can even find it in free/opensource software.

what lawyers and industrials should ask is to make pdf an international standard, with plain, free and easy to get implementation of the standard to download, testcase to try so every developpers can do pdf-enabled software WITHOUT errors.

and a test of the program , if it succeeded, bam! a pdf-logo on it.

adobe, as sun, could control the quality of implementation and the evolution of pdf , with some partners (microsoft for example, or apple, xerox, and whatever).
sun do that with java.

please, man, for one minute, forgets "consumers", the whole industry need one simple free and universal standard to exchange and print _professionnaly_ documents.

is it REALLY important.

and it will benefit consumer in the long time.
---

about java
it cannot be a "better java" if it's not 100% compatible to the API and pseudo-binary code level. if it's ONE tiny percent, only ONE function different, one bugs different, it's just a BAD java implementation and a potential risk to destroy the usefulness of the whole java platform and language.

it's the whole problem with the blackdown java project or gnu java class.
because they are 100% exact sun java. there are mostly useless and bad to java universality. but still there little-known project. even in the whole linux/unix community.
but
it's why it was ugly to microsoft to try to do their "own" windows-focus java. the risk to fragmentate java and simply destroy all usefulness of java (-> universal platform).
the same here than pdf, we need more an professional tool, very controled, very restricted than a "consumer-friendly" product.

do not forget, for some people, documents formats and language are here to make Money. not to please "consumers".
we create products and make works with them.

and yes, at the end, it really benefits all people.

Alicia at Fun Games Plaza

There are many software products that create PDFs much cheaper than Adobe Acrobat, some are even free ( however they might show adds or have limitations ).

Before purchasing an pricely Adobe Acrobat Proffessional, consider the cheaper alternatives ( personally I use:

http://www.amicutilities.com/pdf-writer/ - PDF Writer Pro ,

as it simply install itself as a printer driver, and I can print to it documents from different applications, forms, word documents, excel, scaned images, all will be converted to .pdfs )

It can also merge documents ( if the window is left open between prints ) I also tried some free ones but all had nasty limitations.

Alicia

Armend Hetemi

Is good idea but i wanted to know more about how to study in Chicago law school...

mojo

Microsoft has gotten where it has by threatening others for their patents and with government backing. Bill Gates used his former partners, and IBM, Linux, Apple Macintosh, so forth, without sole rights and/or consent to use their software/hardware. Bill Gates manipulated the code to produce his own software/hardware which in all Reality is theft, and we would be punished to the hilt by manipulating Microsoft's and a variety of others' codes and used it as our own. Our beloved Country as well as Bill Gates stages Terrorism such as donations to an Islamic Organization that had taken up residency within our own HOME.

Microsoft has gone World Wide which should be a sure sign of SPYware AKA. "Patriots Act" just as 911 was staged by our own Government to have an excuse to claim WAR against neighboring nations to cover up its own WRONG doings. How much does our Government participate in Microsoft, Enron, etc.?

Many are believing every single bit of the Propaganda and it's reasonable to say why, because it's shoved down our throats every single minute of Every Day and Microsoft has been following suit of Big Brother. Does Martial Law/Police State come to mind? Restrictions on the freedom of Speech, Freedom of the Press, Free Open Source, etc. We all know why? but decide to do nothing about it for the same reasons and one of the reasons is due to the same as Microsoft is doing to Fellow Corps. Money talks and BS walks. The Greediest Nation in the World. "Microsoft Windows Vista Power" Sounds like a Neo Nazi slogan

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