Time for MS to face the anti-trust music

 
At the opening of the most important trial in U.S. corporate history since the break-up of AT&T, District Court Judge Thomas Penfield Jackson sat down and watched the taped deposition of the richest man in the world, Bill Gates. The Microsoft chairman was not delivering his usual oracular pronouncements about the future of information technology this week. He was testifying as to his knowledge of Microsoft's alleged efforts to crush Netscape Communications Corp. and dominate the market for Internet browsing software.
But Gates was addressing only one allegation among many in the suit. The plaintiffs -20 U.S. states and the District of Columbia -contend Microsoft has used its monopoly power in the market for personal computer operating systems to engage in across-the-board anti-competitive business dealings. And it is hard to make an educated guess as to how the case will turn out because the relevant law, the Sherman Antitrust Act of 1890, was drafted to fight monopolists whose trade was steel and oil - not software.
Whatever the outcome, the stakes are enormous. If the plaintiffs prevail, the court may prescribe relief that changes the face of the entire personal computer software industry. To take an extreme possibility, Microsoft, a $234-billion company, might ultimately be chopped up into smaller companies - Baby Bell-style.
Yet the trial seems to have made little impression on Canadians. Gates' testimony is front-page news in the New York Times, but most Canadian papers dispatched its coverage to the business section - where it was given a quiet and decent burial. This was a puzzling news judgment, since Microsoft's dominance of the software market affects Canadians as much as Americans. Microsoft enjoys an equally powerful monopoly on both sides of the border, and the Canadian computer industry is as much under its thumb as its U.S. counterpart.
But aside from the impact on Canada's info-tech, the trial will also have ramifications for the millions of Canadians who use personal computers. In fact, Canadian users should cross their fingers in the hope U.S. courts will end Microsoft's monopolistic abuse of the operating system software market. Here’s why.
For starters, Microsoft is well on its way to driving Netscape out of the Internet browser market. Many readers may not vest this warning with apocalyptic significance. The popular response is probably (a) "what's a browser?" and (b) "who cares?" Each question in turn.
A browser is a program people use to access the World Wide Web. It is vitally important - even though most people who use it do not even realize it is a distinct piece of software, separate from the Internet itself. (My mother, for instance, simply refers to her Netscape browser as "the Internet program.")
Now, here's why you should care: In 1995, when Microsoft started to take the Internet seriously, Microsoft launched its Internet Explorer browser to compete directly with Netscape’s then-dominant Navigator. Although early versions of Explorer were markedly inferior to Navigator, Microsoft quickly built up its market share by using its operating system monopoly to force computer manufacturers and Internet service providers, such as America On-Line, to distribute Internet Explorer with their products and promote its use.
These third parties had little choice but to bend to Microsoft's demands. Computer manufacturers cannot market a computer that does not have Windows loaded. Microsoft can force companies to sign virtually any agreement it cares to draft. As a result, in only two years, Internet Explorer's market share has caught up to that of Navigator. If Microsoft continues its aggressive tactics, there is no reason why it cannot overtake and eliminate Navigator completely in time. Internet users would no longer have any product choice; and Microsoft would no longer have any incentive to improve its product or lower its price. In short, the advantages of a competitive market would be lost with respect to an important consumer product - all because of Microsoft's abuse of monopolistic power. This is the sort of behavior anti-trust laws are classically meant to combat.
But all this is just the first byte of the enchilada. Microsoft's efforts to bump off Navigator are motivated by more than a mere desire to win the war the browser war. They are part of a larger Microsoft campaign to bulletproof the company's existing monopoly of personal computer operating systems.
Many computer users cannot imagine a world without Windows - but alternatives do exist. Currently, these alternatives consist primarily of niche systems like UNIX and Linux that are oriented toward experts. But there is another route to a Windows-less world that is accessible even to ordinary users. Using standardized programming tools like Sun Microsystem's Java language, it may soon be possible to write software that runs independently of the underlying (Microsoft) operating system. Such programs would be accessed through the same browsers used for Internet use. Thus, future (and even existing) non-Microsoft browser technology could eventually help upset Microsoft's operating system monopoly.
This is Bill Gates' private nightmare - because Windows is a vulnerable product. Every user knows its maddening flaws: It crashes constantly and, despite recent improvements, many peripheral devices, such as printers and joysticks, are difficult to install and configure. If someone marketed a realistic alternative that could run a wide variety of programs, Microsoft's monopoly would be broken. If, on the other hand, Microsoft prevails in the U.S. courts, competing technologies will be virtually foreclosed. Windows and Internet Explorer would remain the only show in town for a long time. For personal computer users on both sides of the border, that would be a crash from which they would never be able to re-boot.