“Consumer Advocate” Calls for Regulation through Government Purchasing

(Washington, D.C.) - Citizens Against Government Waste (CAGW) today criticized Ralph Nader for his letter to the Office of Management and Budget (OMB) urging the government to regulate the Microsoft Corporation through its purchasing power.  The letter, dated June 4, 2002, asked OMB to release the amount of money that the government has spent over the last seven years on Microsoft products, and suggested new regulations for purchasing software regardless of taxpayer benefits.            

“Ralph Nader is searching for new ways to expand government power and regulate Microsoft now that the federal courts have failed to meet his standards,” CAGW President Tom Schatz said.  “Using the federal government’s purchasing power to artificially alter the software market for political purposes would set an ominous precedent for other industries.”

Nader’s letter calls for limiting the number of purchases from any one software provider, while office tools, such as word processing programs, should be required to work with other operating systems to increase competition.  The letter also suggests that the government consider buying the source code of “dominant software providers,” and making it public for further compatibility – in other words, nationalizing private intellectual property.

“Mr. Nader obviously did not have the taxpayer – or incentives to improve software technology – in mind when making these suggestions,” continued Schatz.  “Regardless of the software provider, or even the industry, the government should choose its purchases based on the best quality for the lowest cost.  When purchasing software, the government should examine which products are the most compatible, efficient, technologically advanced, and cost-effective on the market.  Purchasing source codes would provide no inducement for software makers to become competitive and would hinder the development of new products.”

In his conclusion, Nader accuses “one company” of engaging in anticompetitive practices by raising prices and making its products incompatible with competitors’ products.  He then requests a meeting with OMB staff to discuss policies to “reduce waste and promote competition.”

“If Mr. Nader really wants to reduce waste, he would call for an overhaul of the government’s computer systems.  Incompatibility and lack of communication among agencies helped lead to the intelligence failures prior to September 11.  To promote competition, he would encourage software providers to improve their products and offer them at a reasonable price to the government.  His suggestions would only increase waste by forcing the government to purchase costly software that is less effective,” concluded Schatz.  “Luckily, OMB Director Mitch Daniels will see right through Nader’s plan, and continue his quest to eliminate the government’s real problems.”

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.