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Microsoft:
Cyber Trial of the Century
© 1998 by H.B. Koplowitz

It's been called the Cyber Trial of the Century. The U.S. Justice Department's historic antitrust case against software monolith Microsoft and richest nerd in the universe Bill Gates is also being compared to the Progressive Era of a century ago, when the government broke up the gas, rail and steel monopolies of the great robber barons like Rockefeller, Morgan and Du Pont. The issues are complicated and the outcome in doubt, but a variety of websites are providing news and analysis of the Microsoft case.

The Justice Department <www.usdoj.gov> alleges that the software giant is using its Windows monopoly in computer operating systems to crush competition, and extend its monopoly into other areas, especially Web browsers. Its website has information on the case, and is one of the few sites anywhere that lets you download files in WordPerfect but not Microsoft Word.

Microsoft <www.microsoft.com> says it is merely engaging in free enterprise, and its website has press releases and background information with a Microsoft spin.

Many media websites maintain special pages on the trial, like computer magazine publisher Ziff-Davis' "ZDNet" <www.zdnet.com/anchordesk>, which is running in-depth daily reports called "Monopoly Scoreboard."

A site totally devoted to the case is "The US v. Microsoft Homepage" <www.usvmicrosoft.com>, which has links to news agencies, court documents and commentary and editorials from all sides.

Much of the government's case focuses on Microsoft's efforts to muscle in on the Internet browser market that had once been the near monopoly of an upstart company called Netscape. Among the allegations:

- Microsoft used the ultimate in predatory pricing -- giving away its Internet Explorer browser -- so Netscape could not charge for its browser.

- To persuade America Online to make Internet Explorer its default browser, Microsoft offered AOL a spot on its Windows startup screen, considered the most prime real estate in cyberspace.

- To get Compaq Computer Corp., the largest maker of computers that use the Windows operating system, to bundle Internet Explorer instead of Netscape with its computers, Microsoft threatened to stop letting it use Windows.

- In the ultimate capitulation, Apple Computers agreed to make Internet Explorer its default browser when Microsoft threatened not to continue updating Macintosh versions of Word and Excel, the most common software used on the Mac.

- And now Microsoft has integrated Internet Explorer so deeply into Windows that you can't take it off the desktop without crashing your computer.

Ralph Nader's "Consumer Project on Technology" <www.essential.org/antitrust/microsoft> has a resource page on the case, and not surprisingly, it supports the antitrust action. When the trial opened Oct. 19, the site issued a statement saying consumers will see more innovation and lower prices if Microsoft is "reined in by the government."

In the blunt language Nader is known for, the statement continues: "Microsoft's predatory practices have driven innovation out of the market for desktop software, and now Microsoft is attempting to monopolize the market for Internet software. If successful and if not restrained by the government, Microsoft would exercise an astonishing degree of control over electronic commerce and the next generation of Internet-based multimedia applications."

That Microsoft has used its operating system monopoly to manipulate other segments of the computer market seems obvious. But what, if anything, should be done about it is not. Some, like the Marina del Rey-based Ayn Rand Institute <www.aynrand.org>, argue that economic Darwinism should be allowed to run its course.

The antitrust suit against Microsoft is "immoral and anti-American," according to Michael S. Berliner, executive director of the educational organization, established in 1985 to advance novelist Ayn Rand's philosophy of objectivism, reason, rational egoism and laissez-faire capitalism. "Microsoft and other victims of antitrust prosecution are being punished for the same moral values that have helped make America the beacon of the world: hard work, creativity, achievement," Berliner declares in a press release.  "Bill Gates -- no less than the poorest citizen -- has the right to his property and to the pursuit of his own happiness."

The site asserts the government "assault" on Microsoft is being pushed by "Gates's envy-driven competitors," who, "unable to gain profits by voluntary means -- have resorted to the Tonya Harding approach: if you can't win fairly, then physically cripple your opponent."

I've got as much laissez faire as the next guy. But the problem with arguing that the market can regulate itself is that it is based on the shaky premise that all things being unequal, the superior product still wins. And the very success of Microsoft disproves that assumption.

For as noted at the anti-Microsoft website "Microsloth" <microsloth.org>, "The primary crime is essentially unpunishable: Microsoft writes bad software ... The government is not pursuing Microsoft and Bill Gates because they are successful, or because they are rich. The government is concerned with the company's use of leverage to dominate related (and unrelated) markets, and to stifle competition in markets Microsoft has its eyes on. This is the essence of monopoly."
 

copyright 1998 By H.B. Koplowitz, all rights reserved.

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