6.08.00
Rip It Apart

5.24.00
Give That Train a Green Signal!

5.24.00
Feeding Bill's Legacy

5.16.00
This Ain't the Free Market

4.28.00
Stop Knocking Dads

6/08/00 12: 30 p.m.
Rip It Apart
The right way to deal with Microsoft.

By Eric M. Johnson

ost conservatives have defended Microsoft in its antitrust battle against the Justice Department. Unfortunately, they are misguided: Judge Thomas Penfield Jackson's ruling that Microsoft should be broken up into two separate companies, one for operating systems and one for applications, is a welcome development for the computer industry. If it isn't overturned on appeal, the decision will ensure healthy competition in vital areas of technology.

Political commentators generally fail to understand the technical issues involved in the Microsoft case. (Same goes for mainstream journalists.) Even Robert Samuelson, one of the shrewdest columnists today, got it wrong in his June 7 column. He describes the prosecution of the case as "'industrial policy' — an avowed attempt to intensify competition and innovation in an industry where they're already plentiful...." Actually, back in the bad old days of the 1970s, industrial policy was supposed to quell competition, because it was wasteful. Companies were supposed to get along and act in concert with government experts who told them what to produce, how much to pay their workers, and how much profit they could have. The antitrust suit is supposed to open up competition, not stifle it.

Conservatives use Samuelson's tactic nearly every time they address the Microsoft case. They point to the astonishing technological leaps of the '80s and '90s, when the software giant was establishing itself as the dominant player, and conclude that since computers and software are cheaper, Microsoft must have been responsible, or at least didn’t harm anyone.

Today, however, the innovations and improvements are happening in Internet access, microchips, and electronic commerce, among others. Microsoft does not own those markets (yet), and so there is still a titanic battle raging over the best kind of high-speed Internet access, for example.

Where Microsoft reigns, though, stagnation is the rule. Their consumer-grade operating system has changed little since the release of Windows 95 a half-decade ago; not to mention word processors, spreadsheets, and presentation programs, which have undergone cosmetic changes and little else. Why invest the millions of dollars to write a new spreadsheet, other potential competitors ask, when they would have to compete with Excel? And anyway, Microsoft would probably give Excel away rather than allow a competitor to establish a foothold in the productivity-software market.

To appreciate Microsoft's awful reputation in the computer industry, even among some of its biggest customers, consider the eerie parallels between President Clinton and Microsoft. Their tactics are similar — the sleazy denigration of opponents; the co-opting of other people's ideas as their own; the megalomania. They have both survived by sheer gall, despite legions of enemies who have legitimate grievances against them. And both Bill Gates and Bill Clinton have lied under oath in a Federal court.

Gates wasn't tripped up by a stained dress, but by his company's e-mail system, which recorded his thuggish efforts to smash companies many times smaller than his. The facts show that Gates thinks he's above ethics and the law:

• Microsoft created secret functions in Windows and wrote its applications to take advantage of them. Competitors, denied the ability to use the operating system to its fullest, operated at a huge disadvantage. This is manifestly against the antitrust laws, as companies are forbidden to use their monopoly status in one market to dominate another market.

• When OS/2, IBM's technically superior operating system that could run Windows software, began to gain ground against Windows in the early '90s, Microsoft ordered staffers to circulate rumors about how dangerous it was to install OS/2. They didn't bother to identify themselves as employees, and it caused the company much embarrassment when the episode was revealed. By then, the damage to OS/2 was fatal.

• Microsoft mandated that computer manufacturers must load its Internet Explorer browser and deprecate Netscape Navigator.

• In the trial, executives from several smaller companies testified that they were given a choice: If they followed Microsoft's wishes, they would be allowed to survive, but if they attempted to fight back, the behemoth would crush them. If these were private citizens making a similar offer to a corner shopkeeper, this would be called extortion. Conservatives want to defend it as hard-headed but fair business tactics.

Given the present administration's witless cheerleading for the Internet, one might have expected Justice to leave Microsoft alone, rather than jeopardize the "new economy" that everyone chatters about. If Judge Jackson's ruling comes to fruition, software companies will be free from bullying, and consumers will benefit.

Conservatives do no one any favors when they automatically assume a business is in the right, and that government must automatically be in the wrong. Such attitudes (and they are attitudes, not principles) play into the old liberal caricature of conservatives as geisha girls for rapacious private industry.

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