Microsoft must be stopped

By Brett C. Bender

Success breeds envy, but in Microsoft's case, its detractors' accusations carry the sting of truth. The whispering behind Microsoft's back has risen recently to a dull roar, but it can be hard to separate substance from innuendo.

The word from Silicon Valley is that Bill Gates, CEO of Microsoft, is the Devil, while Microsoft would have you believe that Windows provides a view of computing heaven. If we brush aside theology to look at the heart of the matter, we see the facts come down heavily against Microsoft.

On the surface, the issue in this most recent round of legal wrangling, public mudslinging, and spin doctoring is the tying of the Internet Explorer web browser with Microsoft's Windows operating system (OS).

Windows, along with its precursor MS-DOS, has been extraordinarily successful, with some estimates placing their combined share of the personal computer market at up to 90 percent. The Department of Justice contends that this monopoly is being used unfairly to move Microsoft ahead in a race where it is playing catch-up: the competition between Microsoft's Internet Explorer and the dominant browser, Netscape Navigator. According to the Department of Justice, this violates antitrust law.

The legal basis for prosecuting Microsoft is derived from two Supreme Court cases, United States v. Griffith and United States v. Grinnell Corporation. Griffith used its monopoly in many small towns, where it owned the only movie theater, to extract better terms from motion picture companies. If the companies wanted their films to play in the small towns, they had to cut Griffith a deal. Griffith used its monopoly power to obtain lower costs in the small towns and in the competitive market of the big cities.

In the Grinnell case, the Court introd uced a specific test for the illegal use of monopoly power: "(1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as the consequence of a superior product , business acumen, or historic accident."

In effect, this means that monopolization is not illegal, but that the use of monopoly power is. It is legal for Microsoft to be an 800-pound gorilla; it just can't act like one. Historically, consumer demand and competition typically would result in the development and eventual dominance of superior products.

But a recent economic finding shows that the software industry behaves in a strange manner: inferior products have the ability to dominate t he market. Those of us who actually use software, rather than just theorize about the market for it, have long known this fact.

Technical history is brief but fast-paced. Operating systems first came into use around 1960, and eventually began to offer features such as multi-user capability, networking, and virtual memory. Microsoft's first OS, MS-DOS, incorporated none of these modern features. It supported only a single user running a single program on a stand-alone computer.

This inferior product, introduced with the IBM PC in 1981, went on to hold more than a 70 percent share of the market for a decade. It was not until the fourth version of DOS's successor, Windows, was released in 1995 that Microsoft incorporated such developments in th eir OS.

That year, Microsoft entered into an agreement with the Justice Department, that ostensibly prohibited the company from leveraging its domination of the OS market into a domination of the market for software applications. Microsoft, however, is currently attempting to exploit a loophole in the agreement--a clause that specifically allows the company to develop new integral technologies in the OS. And one of these technologies is web browsing.

That's a strange thing to hear about a company whose CEO dismissed the Internet a few years ago as an inconsequential, over-hyped medium. It sounds to me like Microsoft is now scrambling to catch up with upstart Netscape. And one might, given its track record with DOS, suspect that Microsoft is doing so with an inferior product. So how do they intend to succeed?

The folks from Microsoft have recently been seen walking and talking quite a bit like the aforementioned simian. Perhaps it's time that the Department of Justice put them back in their cages. Microsoft should be held responsible for violating the earlier agreement, and the country should take a hard look at how our assumptions about a monopoly and the free-market should or should not apply to the software industry.

Brett Bender is a jun ior in Pierson.

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