June 28, 2000
Facts Refute Oracle CEOs Wild Claims that Institute is a Front Group that Received Secret Funding from Microsoft
OAKLAND, CaliforniaThe Independent Institute issued the following statement from its Founder and President, David J. Theroux, regarding a front-page story in the June 28, 2000 edition of The New York Times, and another story in the Wall Street Journal, that software maker Oracle hired investigators to use clandestine tactics to try and smear the Institutes work.
We were disappointed to learn that our San Francisco Bay Area neighbor, Oracle Corporation, hired Investigative Group International (IGI) in an unsuccessful attempt to smear us by calling into question the legitimacy of our 14-year scholarly, public policy research program.
Instead of being willing to address the issues openly, Oracle has apparently felt the need to employ back-alley tactics, subterfuge, and disinformation in order to achieve its aims.
For an organization that uses IGI, Upstream Technologies, and others to front its operations, we fail to see how Oracle has a leg to stand on. And, since Oracle grew out of a contract with the CIA and is proudly named after that CIA project, what does this say about the corporate culture at Oracle?
We challenge Oracles executivesand renew our invitation to Assistant Attorney General Joel Kleinto publicly debate the central economic, legal, and social issues of antitrust, competition, and high technology.
Evidently, Oracles clandestine campaign was triggered by the impact of the Institutes research findings and public discussions resulting from our Open Letter on Antitrust Protectionismwhich criticizes the antitrust prosecution of Microsoft and other high-tech firms as having nothing to do with consumer welfare and everything to do with corporate welfare.
To set the record straight, the Open Letter was organized, written, and promoted entirely at our initiative. Two hundred and forty of the nations leading economists and other scholars signed the Open Letter, none of whom was paid for his or her involvement. The Institute used its general funds to publish the Open Letter on June 2, 1999 in two national newspapers as a public service.
The Open Letter was organized as part of the Institutes long-running work in this field. Our research and work in this area predates the Microsoft case, the browser wars, and even the Internet industry itself. Research by professors Stan Liebowitz and Stephen Margolis, culminating in our widely-acclaimed book, Winners, Losers & Microsoft, draws upon the authors systematic research of independent software reviews from computer magazines over the past 15 years.
As we acknowledged at our press conference in Washington, D.C. on June 2, 1999, Microsoft has been a member of The Independent Institute for the past two years.
Microsofts support has not altered any aspect of the substance or conclusions of our consistent and indeed independent work, stretching back over ten years. Microsofts support constitutes a gift, which any first-year lawyer can tell you is insufficient to support a legally-enforceable contract.
Unlike Oracle and Investigative Group International, The Independent Institute has never performed contract research and never will.
All of our work is strictly based on the excellent, scholarly standards of peer-reviewed science, for which we will not accept contract funding, and there is no aspect of government policy nor social or economic issue that we might not address.
Here we have a federal court case that will affect the future of global markets in a field that is producing the single greatest economic revolution since the dawn of the industrial age. Pursued at the behest of a group of multi-billionaire business leaders, this case is based on a fundamentally flawed economic theory (path dependence) that has no empirical evidence to support it and no evidence of consumer harm.
Meanwhile, opinion polls show that the general public is overwhelmingly opposed to the case and ranks Microsoft at the highest order. We shouldnt let the sideshow of public relations campaigns and corporate espionage mask the real story in this casethe pervasive existence of corporate welfare and corporate statism in the U.S., of which antitrust protectionism is one major aspect.
Since its publication, Winners, Losers & Microsoft, has received glowing reviews from top economists and other scholars in the field. It would appear that perhaps the inconvenient, timely, and well-received findings of our work might not have exactly set too well with some of those at Oracle, and perhaps elsewhere, who have a special-interest stake in the outcome of the Microsoft case.
Winners, Losers & Microsoft: Competition and Antitrust in High Technology, by Stan Liebowitz and Stephen Margolis
Antitrust and Monopoly: Anatomy of a Policy Failure, by Dominick T. Armentano
Is Microsoft a Monopolist? by Richard McKenzie and William Shughart [Article from The Independent Review (pdf or html)]
Antitrust and the Commons: Cooperation or Collusion? by Bruce Yandle [Article from The Independent Review (pdf)]