Capital -- Intellectual Property: Old Rules Don't Apply
YOU CAN ALMOST feel sorry for Microsoft Corp. Last year, when the company was looking like the techno-has-been of the Internet age, its antitrust problems seemed to be fading. But now, with the upstarts put down -- and with interesting new products on the horizon -- Microsoft's business prospects have been revived. So, too, have its antitrust woes. Antitrust scrutiny seems to be an inevitable byproduct of success.</br></br>"I suspect that as long as we keep doing a good job, the level of interest in our business will not go away from competitors nor from appropriate government authorities," complains Chief Executive Steve Ballmer.</br></br>Much of Microsoft's problem is of its own making. The company's exclusionary contracts and other competitive practices were custom-made to attract the scrutiny of antitrust cops. But much, too, may be an inevitable outgrowth of the kind of business Microsoft is in.</br></br>It's increasingly clear that products whose primary value lies in intellectual property -- products such as software, pharmaceuticals, movies, records and many of the other things that drive today's economy -- are fundamentally different from staples of the industrial economy such as autos and steel, or service-economy products such as banking and insurance. And those fundamental differences are wreaking havoc with traditional notions of economics that underlie antitrust laws, patent laws, copyright laws and indeed, the whole public policy underpinnings of today's economy.</br></br>Businessmen, economists and policymakers are struggling with the profound implications of those differences. Mr. Gates took a stab at describing them in a speech he gave during his CEO summit in May.