Anticompetitive Innovation in Vista

CNET this morning is covering a Yankee Group report (Report: Vista to hit anti-spyware, firewall markets) supposedly hitting desks today that addresses the potential effects Vista will have on the market for Windows security software. "Yankee Group expects Vista to significantly shrink the aftermarket for antispyware and desktop firewalls," says Andrew Jaquith in the report. The article goes on to address the difference between security and antivirus software, as Windows Live OneCare will be sold as a seperate product and not bundled with Vista.

The fun starts over at Techdirt, where Mike reminds us of a question they asked almost a year ago (Caught Between Bad Security And Antitrust Questions):

However, late last week, the company began to talk about how it would offer a complete security package for a fee... leading some to mock the company for causing the pain in the first place, and then selling the solution. Of course, the situation might not be that simple. Given Microsoft's trouble in the past with anti-trust violations, it's easy to see how Microsoft could then be accused of using its monopoly position in operating systems to wipe out the desktop security business.

In this morning's post (Will Vista Decimate Third Party Security Sales? Is That An Antitrust Issue?), Mike tells of how this shouldn't worry anyone, as Microsoft doesn't ship squeeky-clean code:

If Microsoft is including all this security software in their operating system, do they get accused of antitrust violations for "bundling" this security software with the operating system? After all, isn't that what they're repeatedly accused of doing with things like Internet Explorer and Windows Media Player? Of course, this seems a bit absurd when you think about it. Would the same accusations hold in a fantasy world where Microsoft produced perfectly secure code (remember, I said a fantasy world)? It would seem like the act of making their products secure would leverage their monopoly power to suppress a thriving industry in security software...

This whole thing smacks of Lessig's article in the latest issue of Wired, which addresses the danger of preserving inefficiency in government. He tells an amazing story about California's tax experiement (Wired 14.05: Posts - Crushing Competiton):

In 2005, the state of California conducted an experiment. Hoping to make paying taxes easier, it launched a pilot program for people who were likely to file "simple returns." The state already had the payroll information some taxpayers needed to file their returns, so it filled out 50,000 of those forms for them. Way in advance of the filing deadline, the state mailed the taxpayers their completed ReadyReturns. Like a Visa statement, the ReadyReturn itemized the taxes due, making the process easier for the taxpayer and more accurate for the government. People could either file the ReadyReturn or use the information to fill out forms on their own. Of taxpayers who hadn't yet filed, 30 percent used the return; more than 95 percent of that group said they would do so again. Praise for the program was generally over-the-top.

Soon after ReadyReturn was launched, lobbyists from the tax-preparation industry began to pressure California lawmakers to abandon the innovation. Their opposition was not surprising: If figuring out your taxes were easy, why would anyone bother to hire H&R Block? If the government sends you a completed form, why buy TurboTax?

The conclusion of Lessig's article is exactly the point for anyone who has concerns about Vista's security software:

And efficiency is good regardless of who it might hurt; it is especially good if it hurts those who feed off inefficiency. Thus, lawyers are good, but a world that needed fewer of them would be much better. Doctors are great, but that's no argument against better health. And TurboTax is fantastic, but it shouldn't prevent the government from making paying taxes easier.

So there it is. For those of you keeping score at home, yes it is much easier to write astute posts when rely on excerpts from professional journalists and Stanford law professors ;)