The Standards War Between ODF and OOXML: Does Competition Between Overlapping ISO Standards Lead to Innovation?

The Standards War Between ODF and OOXML: Does Competition Between Overlapping ISO Standards Lead to Innovation?

Tineke M. Egyedi (Delft University of Technology, The Netherlands) and Aad Koppenhol (Sun Microsystems, The Netherlands)
DOI: 10.4018/jitsr.2010120704
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Abstract

A strong belief exists that competition between de facto standards stimulates innovation and benefits consumers because it drives down the costs of products. The tenability of this belief, and its preconditions and limits, has been widely scrutinized. However, little has been written about competition between negotiated, de jure (i.e., committee) standards. Are competing de jure standards a good thing? Blind (2008) equals de jure to de facto standards and concludes that competition between de jure standards increases social welfare. In this article we argue that it is important to distinguish between de jure and de facto standards; therefore, that Blind’s basic assumption is incorrect. We illustrate our argument with the same example as Blind, that is, the standards war between the document formats of ODF and OOXML. In our view, the implications of condoning—and even encouraging—competition between de jure standards will have far-reaching consequences for public IT-procurement. It will hinder innovation and counteract supplier-independent information exchange between government and citizens.
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An Ill-Founded Assumption

Blind’s key question is how competing standards should be theoretically evaluated in particular in respect to their effect on innovation.1 He identifies eight parameters2 that are relevant to determine whether one should immediately choose between standards or prolong the period of competition before making a choice. 
Our objections to Blind’s view do not so much concern the arguments he uses, but rather the underlying assumptions and implicit shift in research question. Blind claims that it makes no difference whether we are dealing with de facto standards like Blu-Ray or formal de jure and consortium standards like ETSI’s GSM standard and W3C’s XML standard. In developing his argument he extensively uses the Anglo-Saxon body of economic literature on standardisation, which centres on de facto standards (Blind, 2004). In doing so, he confines his discussion to situations and problems which are typical for de facto standards and obscures answering the initial research question.

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