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

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 paper 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.