1. 2  Economic features of the software industry

As we explained at the beginning, no economic legislation has changed and none of the economic phenomena related to information and knowledge technology industries are qualitatively new. What has changed, if anything, is the relative importance of certain economic effects on our society. In ICT industries specifically, in the market interaction between companies and their customers, there is a series of very important economic phenomena that can distort the operation of these markets. We will now look briefly at the following effects:

1) The costs of copying and distributing digital technology.

2) The economics of intellectual property and ideas.

3) Complementarities.

4) Network effects.

5) Compatible products and standards.

6) Costs of change and captive customers.

7) Policies of compatibility and standardisation within a platform and between platforms.

A recent example of this last point is compatibility across platforms and the policy adopted on this issue by the proprietary software company Microsoft, which has led to the intervention of the European Commission in defence of free competition between companies. Given its importance for the proper conduct of business models based on free software, we will also briefly discuss the approach of the European Commission to the matter.