Summary

Several factors suggest the Ayres-Nalebuff scenario is unlikely to occur. First, producing a media player is not difficult: Cnet.com lists 31 free players. Second, although firms that own encoding standards can make money by licensing the standard, to monopolize encoding, Microsoft would need to exclude rival formats, forcing consumers to use its WMA format. Third, they assume that the ubiquity of one audio format means that content encoded in other formats will disappear. We believe it won’t.

Recommended Citation

Coate, Malcolm B. and Fischer, Jeffrey H. (2005) "Microsoft's Market Realities: A Letter Commenting on "Going Soft on Microsoft? The EU's Antitrust Case and Remedy" by Ian Ayres and Barry Nalebuff," The Economists' Voice: Vol. 2 : Iss. 2, Article 10.
Available at: http://www.bepress.com/ev/vol2/iss2/art10