No monopoly can go on forever and there are already signs that the Microsoft one is under threat

No monopoly can go on forever, and there are already signs that the Microsoft one is under threat. Ironically, one of these threats comes from the Internet, where there can be no monopoly. Networking can as easily be accomplished using so called “dumb” terminals as through a PC, for the computer power can be supplied centrally. In other words, there may be no long term need for highly priced PCs, the lynchpin of Microsoft’s market.The other threat comes from Mr Gates himself, who is showing an increasing propensity to use Microsoft as a way of indulging his fancy. Money is being poured into Internet-related projects and the pursuit of artificial intelligence like there’s no tomorrow. As Mr Gates himself puts it: “We are in a good position to take a very long-term view and invest properly in these things.” Whether this is another way of saying that Microsoft can afford to squander its money remains to be seen.Not that anyone can object, given that Microsoft has no need of funding from the capital markets and is still 24 per cent-owned by its founder. Nor given his track record can anyone challenge the Gates’ vision of the world But does it add up to good long-term shareholder value?.

European Commission competition inspectors have carried out dawn raids on the offices of the German car makers Mercedes-Benz and Opel in connection with allegations of price- and distribution-fixing, EU officials revealed yesterday. Brussels sources warned that both companies could be stripped of their exemptions from EU rules that ban exclusive distribution arrangements if inquiries produce evidence of illegality.
The raids followed complaints from consumers who were repeatedly blocked when they tried to purchase the models they wanted in countries where they can be bought most cheaply. It is understood that complaints allege breaches of the EU’s 1995 ruling on car distribution. This permits restrictive dealership and servicing agreements between manufacturers and sales outlets but only subject to strict conditions aimed at giving car buyers more opportunity to shop around to take advantage of the single European market.EU competition Commissioner Karel van Miert renewed the car industry’s longstanding “group exemption” from normal competition rules in June 1995 but insisted on giving dealers greater independence from manufacturers and specifically banned any impediments to the right of consumers to purchase a car anywhere in the Community.News of the crackdown on Opel and Mercedes came as the Commission complained that so-called parallel trade in cars, which occurs when nationals of one EU country opt to buy a vehicle in a cheaper country, is being blocked in Belgium, Germany, Spain and the Netherlands.Price comparisons of the EU’s 75 best-selling models released by the Commission yesterday shows a gap of more than 20 per cent between the lowest and highest prices for 40 cars.

On 1 November list prices varied most for Fiat, Ford, Opel, Citroen, Volkswagen, Nissan and Mitsubishi cars. And prices for some small cars varied by more than 30 per cent.Britain has joined the ranks of the most expensive member states in which to buy a car according to the survey. The Commission says this is due to price hikes by manufacturers and the rise in sterling’s value.Fifteen of the 75 models looked at were most expensive in the UK including the Opel Corsa and Astra, the Peugeot 106 and 306, and the Renault Megane. Britain was cheapest for only three models: the BMW 730i and Volvo’s 850 and 960.Buyers will find no bargains in Germany or France which had the highest list prices in the EU Both countres each had 30 of the dearest models. By contrast, the Netherlands and Portugal are the cheapest countries for cars.The list price for an Opel Astra in Britain was 32.8 percentage points higher than for the equivalent in Portugal. The difference is attributed to exchange rate-induced price increases.The Commission’s six-monthly car price surveys aim to highlight the opportunities for parallel trade and to pressurise car makers into creating a genuine single market.Volkswagen and its subsidiary Audi are already under investigation for alleged malpractice in relation to pricing and distribution.. Virtually non-stop negotiations continued yesterday to prevent the potentially devastating strike by American Airlines pilots due to start at midnight last night, that would shut down the largest US carrier and cost the country $200m (pounds 123m) a day.

As talks here under the aegis of a Federal mediator approached the deadline, pressure was mounting on President Bill Clinton to use his emergency powers and declare a 60-day cooling-off period, during which American’s operations would carry on as normal while arbitrators came up with a settlement binding on both sides.
The White House yesterday was refusing to tip its hand, as Kenneth Hipp, chief mediator, professed himself “somewhat more encouraged” by developments. But, Mr Hipp warned, “major obstacles” still remained, and management and pilots’ union alike have reported next to no progress in the last few days.The main sticking points are pay – where the company has offered a 6 per cent rise between 1997 and 2000, and the pilots are seeking 11 per cent – and the airline’s plans to replace turboprops with small jets at its commuter airline subsidiary, American Eagle.If the strike goes ahead, an estimated 40,000 travellers a day would be stranded. American, whose proposed alliance with British Airways is under regulators’ scrutiny, accounts for 20 per cent of all air travel in the US. It has large hubs at Dallas, Chicago and Miami, and dominates the Caribbean market. The airline cancelled most foreign flights and some round trip domestic flights yesterday.. Shares on Wall Street could not sustain their latest dramatic surge yesterday. But their gain the previous day, along with a further slide in sterling’s exchange rate, helped shares in London set a record.

The FTSE 100 index climbed by nearly 14 points to close at 4,341. Across the Atlantic, investors took advantage of the Dow Jones index bursting through the 7,000 barrier on Thursday to take profits yesterday, despite new figures signalling the absence of immediate inflationary pressures in the American economy The index was 29 points lower at 6,992 in closing trade. The Dow’s gain of more than 1,000 points in only four months reflects investors’ optimism about the strength of the US economy, although some experts remain fearful that share prices could fall sharply from their giddy heights. Just two months ago Alan Greenspan, chairman of the Federal Reserve, warned about the “irrational exuberance” of the financial markets.
A batch of statistics yesterday showed an unexpected fall in prices charged by manufacturers in January, along with flat industrial production and unchanged consumer confidence. The general picture was one of steady growth putting no pressure on the Federal Reserve to increase interest rates in the near future.