MONOPOLY HOUNDS OR JUST SMART BUSINESS PEOPLE?
January 21, 1998
Return to this forum's introduction.
in this forum:
What laws are involved in this dispute? Is Microsoft's practices monopolistic? What is an "operating system"? Why doesn't the Justice Department let the market play out? Can competition and integration co-exist? What are the larger issues of this case? Viewer comments.
January 13, 1998
A background report on the Microsoft anti-trust case.
October 21, 1997
The Justice Department formally files its anti-trust complaint against Microsoft.
August 6, 1997
Microsoft takes a bite out of Apple.
June 11, 1997:
Netscape and Microsoft agreed to limit access to private information online.
September 20, 1996:
Tom Bearden reports on the cyber war between Netscape and Microsoft.
Browse the NewsHour's coverage of cyberspace and the law.
U.S. Department of Justice
Microsoft and Netscape
Timothy P. O'Hara of Hammonton, NJ, asks:
The Microsoft debate really seems to be s situation of smoke without fire. Why does the government even care? Every software producer that has put out a superior product and then back off when challenged. A couple of the more notable examples: (1)IBM's run away from OS 2 Warp, just when it was making in roads against WIN 3.1x; (2) Netscape has a superior browser and it overcharges for the product; (3) Apple's just plain superior computer system and it overcharged an refused to allow licensing of the product to other manufacturers. This seems to be just a case of shortsighted greed and the losers are running to Justice because their myopia is costing them. Shouldn't Justice just let the market play it out?
Mr. Rule, attorney for Microsoft, responds:
Your comment really hits the nail on the head! Antitrust law was designed to facilitate the functioning of competitive markets, not to be used to supplant the competitive process, to pick winners and losers, or to save competitors from their own mistake. The law is not a roving commission to antitrust enforcers to harass particularly successful competitors and to add "sand to their saddle bags" in order to allow the less efficient, less capable competitors to get back in a race in which they cannot compete on their own. In short, as the Supreme Court has noted on several occasions, the antitrust laws protect competition not competitors.
Unfortunately, before a company can ever get its day in court, an interventionist antitrust enforcer can impose a lot of expense and grief (not to mention bad press) on a company. And antitrust enforcers understand that there is no surer way to win adulation among the press and the antitrust bar than to take on the most successful companies. A generation ago it was IBM and AT&T; today it's Microsoft and Intel. The shame is that when those companies attempt to defend themselves against unfair and baseless charges they are called arrogant and overly aggressive.
Mr. Black of the Computer & Communications Industry Association responds:
My Association, CCIA -- the Computer & Communications Industry Association -- has a history of opposing unnecessary government regulation and interference into private sector business decisions. But protecting our marketplace from the anticompetitive conduct of overly dominant companies IS at the heart of our Associations's mission -- and an equally appropriate role for government -- and we feel it is a responsibility that it should not relinquish.
The business decisions of Microsoft competitors -- whether good or bad -- are not relevant here. What is at issue is whether Microsoft has violated the terms of its 1995 agreement with the government and whether it is unfairly leveraging its operating system market dominance to enter related markets and use that dominance and its deep pockets to choke off competitors. If Microsoft eventually dominates the browser market as it has the PC operating system market, we fear that Microsoft will control the future of the Internet. That means that all aspects of electronic commerce -- banking, travel reservations, retail sales, automobile sales, real estate -- will be forced to adhere to Microsoft's standard. That's a mistake. Our industry has thrived when new entrants into the market have tweaked competition, thereby spurring innovation, which leads to new and improved products at competitive prices. This model cannot be achieved when one company controls the on-ramps and the toll-booths along the information superhighway.
Next: Can competition and integration co-exist?