The software industry tends toward monopoly because of the tremendous economies of scale and the need users have for compatibility and interchangeability with others. Software companies use the very powerful tools of "lock-in" and "forced upgrades" to control the market and customer base. In any well established category of software there is usually one insurmountably dominant player. The reason is, in the absence of strong regulatory or consumer activist pressure, dominant companies abhor open standards. Without open standards, we are locked into one vendor's software product.
We're inclined--even compelled--to purchase software from the market leader because we want the information we create to continue to be accessible to ourselves as well as to others. This creates a snowball effect, giving the market leader more power to fend off competition, resulting in a near or total monopoly.
We cannot use an alternate product to access our data because software vendors consider formats for storing data to be trade secrets. In effect, software vendors hold our data hostage. They ensure future purchases of their software by leaving us no other way to access or manipulate our data.
Only among vendors of software that manipulate data in open, non-proprietary formats is there no clear dominant vendor. Examples of this software are text editors, HTML editors, and terminal emulation programs.
Software vendors claim there is no market for software that supports open standards. But this is a lie; what they really think is that by locking us into a proprietary file format, they eliminate the risk of losing business to an upstart competitor.
As an analogy, imagine if there was no national unit of currency. Rather, suppose that each banking institution had the freedom to print its own money, and that we could do business only with others who were customers of the same bank. Why would the average person or business choose any but the most dominant bank? To foil any independent exchange brokers that might appear, the dominant bank could keep changing its unit of currency. Other banks would disappear, leaving holders of their money destitute, and a currency monopoly would result. At that point, that private bank controls all money. Yes, the customer can use it as long as it suits the bank's purposes -- but if the bank decides to revalue it, or arbitrarily give different customers better exchange rates, what recourse does the banking customer have?
The currency of intellectual property is the data formats in which we store our information. We need regulation of this currency in the same spirit as the banking industry is regulated. We own our data, not the vendors of the instruments for storing it. What I propose is an intellectual property protection act for software consumers.
I propose that in order to get copyright or patent protection, all vendors of mass marketed computer software be required to publish the full details of their default data storage format. This would apply to any file format used to store information created or gathered by the end user. The law would require the software distribution package to contain the full technical details necessary for any other vendor to decode and access the consumers' data.
Such regulation would meet with significant objection from software companies. The industry would claim that revealing the architecture of their file formats betrays key trade secrets of great intellectual property value. But they would be no more obligated to reveal their technology than makers of foods and drugs, who have to document the ingredients of their products on the package. Software companies would be giving up the ability to monopolize our access to our own data. Enforced disclosure of file format architecture would not only protect our data, but may be the best way to "level the playing field" in the software industry. We need protection from the companies that have the capacity to hold our property hostage.
[Copyleft 1998 by Steve Sergeant: Distribute this far and wide, just leave my name on it somewhere.]