dacs.doc electric

THERE ARE THREE ISSUES at stake in the Microsoft trial as it stumbles toward a conclusion- actually an interim conclusion, since there is bound to be an appeal, whatever happens. These are: Is Microsoft a monopoly? Does it wield monopolistic power in such a way as to disadvantage consumers and/or destroy competitors? If so, what should be done about it?

Is Microsoft a Monopoly?

There can be very little doubt that Microsoft is a monopoly by any traditional definition of the term. In any other industry, if you said that company X had a 95% market share, the question would not even be debated. Think of automobiles, television, or telephones.

A recent article in Business Week referred to Microsoft as an example of "extreme capitalism." There can be very little doubt that Microsoft was in fact out to destroy Netscape or anybody else that got in its way. Aside from the evidence emerging in the trial, Microsoft is legendary for its heavy-handed, "you will be assimilated, resistance is futile" approach (there must be almost as many Bill Gates jokes as there are lawyer jokes). "But," the response runs, "that is what all companies do under capitalism: Seek to gain market share at the expense of competitors. If they are in a position to get the whole pie, so to speak, we should let the free market take its course."

Americans tend to be somewhat schizophrenic on the question of "free market competition." If you ask anyone, they are probably "in favor of it" but don't like the consequences! The basic problem is that untrammeled free-market competition has historically often produced monopolies or near-monopolies, as the Department of Justice's attorneys have been quick to point out. Examples range from Rockefeller's Standard Oil to American Tobacco, Big Steel, Alcoa, major movie studios, IBM, and AT&T. Microsoft falls into this monopoly-producing category. If Bill Gates had lived in the nineteenth century, he would have been right at home with the Rockefellers, Carnegies, Mellons, and other robber barons whose existence originally spawned anti-trust regulations.

Are Consumers Harmed?

One of the technical issues in the trial is this: Are consumers being harmed by Microsoft's practices? The problem here is that the question can be determined only by a series of "what if" scenarios. As anyone who has ever seen Jurassic Park knows, the branch of mathematics known as "chaos theory" convincingly demonstrates that insignificantly small changes in one are can lead to massive (and totally unpredictable) additional changes. For example, if Windows had not "won out," would OS/2 be wielding monopoly power over the operating system? Or would a presently extinct breed of software have a major market share?

However, there is a lot of anecdotal evidence to suggest that consumers are being harmed- financially and in other ways-by the operations of the Microsoft behemoth. Here are some examples:

Consumer software prices have decreased dramatically in the past five to eight years. If the price of Windows "followed the market," it would probably be around $39. However, the price of Windows has remained virtually constant over that time. So in the context of general market prices, it could be argued that Microsoft is effectively "stealing" about $50 or so from everyone who buys Windows.

Have you ever tried to buy a computer without Word installed and get a refund for the price of Word that you don't want? Recently, a number of people have made the news by trying to get refunds for Windows, saying that they have not opened the package, don't agree to the license and won't use it. A few people have gotten their money back, but for most people, good luck!

I recently tried to purchase a server for a client of mine from one of the major hardware companies, with Novell NetWare preinstalled instead of NT Server. I was told by the salesman that they didn't offer that option "because of our close relationship with Microsoft." So not only did I have to pay more than I probably otherwise would have, but in addition, the client had to pay for my time to install NetWare.

Microsoft has not been harmful to everyone, however. As a primary purveyor of software that almost works," Microsoft has been very beneficial for computer consultants. Cynics have suggested that the fact that a consultant will typically derive more income from a site with NT Server installed than from the same site running NetWare (because there is so much more to be done to get the software to work right) may help explain why so many consultants are pro-Microsoft.

What Is To Be Done?

Even if one agrees that Microsoft wields monopoly powers wherever it can, the question of what to do about it is a different story entirely. Microsoft makes a very powerful point when it argues that it would be catastrophic to have the government play a role in deciding how software development should be conducted. For all the criticisms one can make of Windows, I would hate to even imagine what Windows-designed-by-the-government would look like! As a real-life example, look at the government's disastrous attempts to control encryption algorithms.

The most appealing suggestion I've heard (and also one of the most outrageous) is to make Windows into an open source code program so that it could compete with Linux.

Realistically, I suspect that the government will "win" the case (especially since Microsoft continues to shoot itself in the foot by approaching the trial as if it were a marketing campaign), but that nothing much will happen. However, if I don't have to take an hour or two to clean out all the crap from the Windows 98 installation, I will be that much ahead of the game, and if I can buy a server with NetWare preinstalled, I-and my clients-will be better off than we were before.