Uncle Sam and the Microsoft Machine
Washington reined in the railroad barons, IBM and AT&T; Why not Microsoft Corp.?
That's the issue facing Congress and the White House as Microsoft continues to expand its operating system empire into the Web browser market, the online content sector, the Internet-TV arena and the cable TV business.
For the moment, members of Congress will let the courts settle the issue. Lawyers for Microsoft Corp. and the Justice Department are to meet this month to argue over the company's adherence to the 1995 consent decree between the Justice Department and Microsoft that was supposed to curb Microsoft's dominance of the high-tech sector.
But there is much Congress - and industry - can do to ensure competition in the high-tech sector, even if they can't do anything for Apple Computer or Netscape Communications Corp., whose markets have been gobbled up by the Microsoft
machine over the last few years.
Some of these options were dropped into the Senate's lap during the Nov. 4 hearing before the Committee on the Judiciary, chaired by Sen. Orrin Hatch, R-Utah:
Divorce the infrastructure business - operating systems, phones, hardware - from the business of developing applications, such as software for banking, publishing or entertainment.
Establish rules for "plug and play" that would require vendors to sell products that are compatible with other technology.
We've seen similar rules imposed on AT&T and also IBM, which was forced to unbundle its software and services from its dominant mainframe business during the 1950s and 1960s.
Those decisions were good for the nation - and great for Microsoft - which grew up in the space provided by these antitrust measures.
But it would be preferable if the market would take care of the problem by itself. Perhaps what we are seeing is a brief period where Microsoft's technology conquers all - until the next paradigm-shattering product appears.
There's some possibility that the Java computer language, or even the trend toward dumb terminals championed by Oracle Corp., may push Bill Gates off his pedestal.
There is also some, but not much, possibility that the increased public scrutiny will force Microsoft to curtail its hard-nosed policy, which includes the threat to cut off Compaq Computer's legs if it dared substitute Netscape's browser for Microsoft's browser on the PCs that Compaq sells.
So far, Microsoft has not softened its rhetoric and continues to claim that it is innocent of the charges laid against it by the Justice Department and its industry rivals. Microsoft officials have called these complaints sour grapes by industry executives lacing stiff competition.
Microsoft is half-right. Much of the complaints are sour grapes and there's little doubt that other information technology executives would try the same tactics as Microsoft if they had the leverage.
But that's where the federal government comes in.
While it is clear that Congress and the administration are, ahem, not the most technically advanced organizations in the nation, it is abundantly obvious that only they have the legal, moral and political authority to step in with a compromise antitrust policy if Microsoft is indeed abusing its lock on the operating system market to win domination of other markets.
Hatch used the televised hearing to make clear his interest in the issue and fired several warning shots across Microsoft's bow.
"I have not made any secret of the fact that I have serious concerns about Microsoft's recent efforts to exercise its monopoly power, and that I plan to continue to examine the company's practices," he said.
Whatever the federal government does, it should declare up front that the issue is not how to cut Gates' $39 billion personal fortune, but how to ensure continued competition.
The degree of competition should not be measured by Microsoft's share of any number of markets, but by whether there is room for new players to threaten the established barons of cyberspace by offering the consumers better products.
Hatch understands this clearly: "The government certainly should not use antitrust law to pick winners and losers in the marketplace, but it should use them to ensure that it is the consumers who get to pick the winners and losers, based on the merits of competing products."
If Microsoft continues to dominate all competition even after competition-preserving antitrust rules are imposed, so be it. At least Uncle Sam will get his cut of Bill's capital gains.
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