Economist claims Microsoft sanction would punish consumers

At the moment many see the price of Microsoft products and services as high, but if the nine states have their way in the anti-trust case against the Redmond giants consumers will feel the sting of the US judicial system as prices would rise - according to Kenneth Elzinga, a professor of economics testifying on behalf of Microsoft. He stated on Wednesday that the impact of sanctions on the company would be widespread, with prices increasing and the motivation within Microsoft being reduced.

This is obviously the impression Microsoft wants to give, but can it be proven or is this an example of a witness primed to show the judge that Microsoft would suffer, as the last economist who testified is suspected of being? The professor stated in a written testimony to the judge presiding over the case, Colleen Kollar-Kotelly, that the sanctions already imposed on Microsoft were sufficient and there is no need for further sanctions which would constitute a "regulatory regime".

The states are pushing this case as they feel the previous settlement was unsatisfactory and full of "loopholes". As mentioned in a previous Neowin article the states wish to demonstrate and attempt to impose the creation of a modular Windows amongst other things but Elzinga states the sanctions "will cause prices to rise, output to fall, innovation to slow, (and) quality to erode".

This is the second economist to testify after the previous one, Kevin Murphy, admitted links to Microsoft as it was shown that they helped fund his research. In the judges eyes this must seem a second attempt, which isn't always the best impression to give in a court. The hearing could be coming to a conclusion next week, and consumers now must feel this case is involving them more as the impact of the sanctions is beginning to come to light. This has truly been a long eight weeks for Microsoft and now those following the case will be waiting with anticipation for an outcome.

News source: ZDNet UK

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