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danbricklin.com/log
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Ethical issues
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Ethical issues
Why do people feel so strongly about this issue? What is the background in our heritage that relates to competition?
Ethical issues
msdojethics.htm
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What's in our society's background that relates to this case?
The issue of competition and what's "fair" and accepted is one I'm interested in. People who are unconnected to this case have strong feelings about how companies should act and that adds to the interest in the case. I thought I'd explore this space.
It is often said that many of our laws come from the Judeo-Christian ethics and laws. I have some familiarity with the Jewish background, so I thought I'd present some of that. These teachings, that many people learn from childhood, color our view of the world. Many of the framers of our laws were religious people, so were similarly influenced by religion. Understanding these religious teachings is like reading source documents used by legislators to understand the meanings of laws written long ago.
Biblical sources
In the book of Leviticus, chapter 19, there are a set of statements elaborating on the commandment not to steal. As I see it, these commandments help set up the framework for a society that functions well. Starting in verse 11, there is "You are not to steal, you are not to lie...You are not to withhold (property from) your neighbor...You are not to keep-overnight the working wages of a hired-hand with you until morning." In the middle, in verse 14, is one of my favorite lines in the Bible:
Before the blind you are not to place a stumbling-block.
To me, and many commentators, this is not just about people who are visually impaired. Coming in a list of "fair dealing" commandments, this is another example of fair dealing. You are not to take advantage of someone who is in a disadvantageous position. It is clear from this part of the Bible, with references to employers not withholding wages from a mere day laborer, that those in a position of strength over another must act differently and with restraint compared to those in equal positions.
This attention to the relative positions of strength of parties is clear in many laws in the US. Contracts must be signed as an act of freewill, without coercion or else they don't count. If someone asks you for money, you may give it to them and it is legal. If they use deadly force when they ask, it is illegal. Various relations are allowed between "consenting" people, but if one is "underage" it is assumed that there is an imbalance of power and consent is by law assumed not to be given. This line of what makes it imbalanced (deadly force, underage, no coercion, blind) is what the laws try to define.
Monopoly law is related. It is assumed that the company with the monopoly position has a position of unusual strength over the competition and therefore must behave in a less competitive manner. Even in sports, a metaphor for a society, a team beating another team decisively, and expected to do so, is considered to be "unsportsmanly" if they act too aggressively. So sacking the quarterback, "in your face" celebrating after new scores, etc., are frowned upon and sometimes penalized when the game result is not in doubt.
So, from all this we see that in our society we expect companies that are the leaders in their industry to behave more "gentlemanly" than their more scrappy, smaller competitors.
The Talmud: Competitive issues from 1,800 years ago
In addition to Biblical laws, much of Jewish law is based on discussions of the early rabbis (carried out over hundreds of years). The Talmud chronicles some of this discussion. It has lots of "Rabbi so-and-so said this, but Rabbi such-and-such thought the law should be otherwise, learning from the teachings of Rabbi this-and-that."
There is a section in the Talmud in the part called Baba Batra that discusses legal barriers to entry, namely when is a business allowed to set up shop nearby another and take away someone's livelihood. These discussions, taking place between 1,500 and 1,800 years ago, get into some of the same areas covered in the MS/DOJ case. They discussed relevant market-- in their case it was geographical where within the same neighborhood was considered different than within the town or region. (The exact line between allowed and disallowed areas was explicitly left unresolved and I guess up to the individual judges in a case, just like today.) Competitive practices were discussed, such as could a storekeeper distribute free sweets to children so they get "accustomed" to that store and "when a child is sent to make purchases, he will go to that store" (most of the sages decided to allow the practice). To the question "May the shopkeeper lower his prices to attract business?" it says "...the sages said, 'The memory of the shopkeeper who lowers prices shall be blessed' [since he benefits the community by lowering prices]." (With All Your Possessions: Jewish Ethics and Economic Life, Meir Tamari, page 100.) A level playing field (all parties paying the same taxes) is also covered.
In later years, when the Talmudic discussions were put into explicit laws, Tamari points out in his book (page 104): "...the basic premise [is] that all entrepreneurs can emulate the price cutting or other forms of competition engaged in by others." This speaks to taking monopoly position into account. He also quotes Rabbi Joseph Ibn Migas, of 11th century Spain, as writing: "...that local businessman can prevent outsiders from operating similar businesses [even if the outsiders pay the applicable taxes], provided there is no loss caused to the consumers...If, however, they offer the same goods more cheaply or provide goods or services of better quality, then they cannot be prevented from operating. The reason for this is that we cannot make a ruling that will benefit part of the population [the local businessmen] at the expense of the other part [the consumers.]" This idea of the pro-consumer-good trumping other issues seems to be part of Microsoft's arguments.
So, the issues in this case are age-old, and bring up deep-rooted feelings about fair-dealing while doing good.
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