The Visible Hand of Law: Microsoft, Standard Oil, and the Causal Maps of Judicial Decision - PowerPoint PPT Presentation

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The Visible Hand of Law: Microsoft, Standard Oil, and the Causal Maps of Judicial Decision

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Title: The Visible Hand of Law: Microsoft, Standard Oil, and the Causal Maps of Judicial Decision


1
The Visible Hand of Law Microsoft, Standard Oil,
and the Causal Maps of Judicial Decision
  • V.K. Narayanan
  • Mari Buche
  • Clyde Stoltenberg

2
Outline
  • Motivation and Background
  • Introduction to Causal Mapping Methodology
  • Discussion of Legal Background
  • Summarize Microsoft Antitrust Case
  • Summarize Standard Oil Case
  • Discuss Complexities Encountered
  • Explain Enhancement to Methodology
  • Conclusion

3
Motivation
  • Press releases covering MS Case
  • Summer Grant for 2000
  • Interesting to compare antitrust cases
  • Desire to learn the RCM methodology with
    practical experience
  • Outcome determinative case comparison
  • Recent developments in MS Antitrust Case

4
Background
  • Judge Thomas Penfield Jackson released findings
    of fact in November 1999
  • Speculation about breakup of Microsoft
  • Historical examples of dissolved mega-companies
  • Impact on consumers

5
Introduction to Causal Mapping Methodology
  • Tolman (1948)
  • Axelrod (1976)
  • Narayanan Fahey (1990)
  • Nelson, Nadkarni, Narayanan, Ghods (2000)

6
Revealed Causal Mapping
  • Select data source (text, interviews, etc.)
  • Independently identify causal statements
  • because, so, ifthen, etc.
  • Compare and discuss statements
  • Calculate inter-rater reliability
  • Extract specific concepts from the statements
  • Develop coding scheme
  • Aggregate concepts into constructs based on
    theoretical basis (recast raw maps into revealed
    causal maps)
  • Perform member checks to validate RCMs

7
Legal Background
Findings
Holding
Liability or Ruling
Precedent
8
Sherman Antitrust Act
  • Section 1 prohibits every contract,
    combination, or conspiracy, in restraint of
    trade or commerce.
  • Includes Tying Arrangements and Exclusive
    Dealings Agreements
  • Monopoly power
  • Exercise or abuse of power
  • Harm or damage

9
Sherman Act
  • Section 2 declares that it is unlawful for a
    person or firm to monopolizeany part of the
    trade or commerce among the several States, or
    with foreign nations
  • Broader interpretation of monopoly power
  • Includes attempts to acquire or maintain monopoly
    power
  • Anti-competitive acts, in general

10
Legal Definitions
  • Must define each of the following
  • Product(s) in question
  • Market affected
  • Tying/Tied Products
  • Jefferson Parish Hospital (1984)

11
Flow of Critical Legal Tests
  • Define the market
  • Existence of Monopoly Power
  • Control price
  • Exclude competition
  • Demonstration of Monopoly Power
  • Are they acting on their monopoly power?
  • Business or Technical reasons to justify or
    support monopoly power
  • Criterion for predatory conduct

12
Comparison of Sources
  • Standard Oil Case
  • Date 1910
  • Length 106 pages
  • Causal Statements 178
  • Concepts 245
  • Constructs 74
  • Microsoft Case
  • Date 2000
  • Length 21 pages
  • Causal Statements 195
  • Concepts 328
  • Constructs 126

13
Summarize Microsoft Antitrust Case
  • Threats
  • Browser Market
  • OEM Channel (Original Equipment Manufacturer)
  • IAP Channel (Internet Access Provider)
  • ICPs, ISVs, and Apple (Internet Content
    Providers, Independent Software Vendors)
  • Operating Systems Market

14
Summarize Standard Oil Antitrust Case
  • This conspiracy was a continuing offense.
  • Agreement
  • Fixing price of crude and refined oil
  • Controlling production
  • Limiting distribution restraining trade and
    commerce
  • Standard Oil Company of Ohio - Trust

15
Complexities Encountered
  • Simple comparison of judges rulings
  • Maps of rulings would overlap in generalities,
    but differ in specifics depending on the industry
  • Expected different perspectives on Antitrust, due
    to historical events

16
Simple Causal Statement Example
  • Our present topic is the militarism of Germany,
    which is maintaining a state of tension in the
    Baltic Area. (Axelrod, 1976)
  • CAUSE LINKAGE EFFECT
  • The militarism maintaining a of Germany
    state of tension in the Baltic area

17
Definitional Complexities
  • Not clearly causal (according to Axelrod, 1976)
  • Must consider the beliefs of the actors

18
Example of Definitional Causal Statement
  • Whether this zone of commercial activity
    actually qualifies as a market, monopolization
    of which may be illegal, depends on whether it
    includes all products reasonably interchangeable
    by consumers for the same purposes. (MS Case,
    2000)

19
Mapping the Definitional Statement
  • CAUSE LINKAGE EFFECT
  • if the zone the zone of
  • includes reasonably commercial
  • interchangeable activity qualifies
  • Products as a market
  • Type ifthen statement (built on a belief)

20
Complexities of Industries
  • Could apply traditional strategy framework
    (Michael Porters Value Chain) reasonably well to
    the Standard Oil Case
  • Moving to Microsoft Case required a mental shift
  • Couldnt simply overlay dictionary from Standard
    Oil
  • The two industries are substantially different in
    structure and complexity of entities involved

21
Software Industry Environment
INTEL
OEM
Competitor Navigator
OP SYS
Bargaining Power Customers
Software
Complimentary Product JAVA
SAP
IAP
22
Complexities of Lenses
  • Strategy
  • Economic environment
  • Regulatory environment
  • Value Chain
  • Legal
  • Judicial hierarchies
  • Binding precedent
  • Findings of Fact and Holdings
  • Definitions of Markets, Products, Monopoly Power
  • Mirroring occurs between the legal and the
    strategy views

23
Complexity of Perspectives
  • Must consider maps for all participants
  • Judge
  • Bound by precedent
  • Plaintiff(s)
  • Wants narrow interpretation of product/market
  • Defendant
  • Strives for broad interpretation of
    product/market
  • English Common Law
  • Standard for legal system in the United States

24
Isomorphic Complexities
  • Approach
  • Per Se
  • Letter of the Law
  • Rule of Reason
  • Economic Justification
  • Common Sense
  • Judicial Judgment

25
4-Dimensional Analysis
Legal
Hierarchy
Def
Strategy
Sec 1
Sec 2
State Laws
Perspective
26
Enhancements to RCM
  • Definitional
  • Labeling and defining relevant terms
  • Beliefs
  • Causal statements based on belief of the speaker
  • Mirroring
  • Legal and Strategic Analysis

27
Conclusion
  • Comparing RCMs of judges rulings
  • Standard Oil Case
  • More discussion of harm to consumers
  • Formal language of source document
  • More use of English Common Law for basis
  • Microsoft Case
  • More use of precedent
  • More discussion of harm to competition
  • Readable broader audience

28
Conclusion (Continued)
  • Methodology paper to cover enhancements
  • Academy of Management
  • Strategic insights into antitrust events
  • Legal insights into judicial decisions
  • Information Systems issues of industry complexity
    and prediction of results due to outcome
    determinative rulings
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