GETTING TOUGH WITH MICROSOFT Is the Justice Department stifling or protecting innovation? May 26, 1998

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[Editor's Note: George Gilder's responses were not available at the time of posting.] Questions asked in this forum: Should the Justice Department consider "vaporware" an unfair practice? Why hasn't a similar suit come about earlier? What occupies the 10 percent of the market Microsoft doesn't control? What innovations is Microsoft responsible for? Is there less public resentment towards Microsoft than other monopolies? NewsHour Coverage May 18, 1998 The Justice Department files an antitrust suit against Microsoft. May 18, 1998 George Gilder and Paul Gillin help put the Microsoft suit in historical perspective. April 14, 1998 Is Microsoft using its power to stifle competition? March 3, 1998 Leaders of the computer industry testified against Microsoft. January 13, 1998 Microsoft's antitrust battle with the Department of Justice. October 21, 1997 The Justice Department charges Microsoft with building an illegal monopoly. December 14, 1995 A report on the joint Microsoft/NBC venture, MSNBC. Browse the NewsHour's coverage of business.

The official battle that will help shape digital age industries is set to begin. Today, the Department of Justice and 20 attorneys general filed separate suits against Microsoft. The suits charge the software giant with using its "chokehold" on computer operating systems to limit competition on the Internet. Microsoft's Windows operating software runs on 90 percent of the world's personal computers. The Justice Department maintains that the company is trying to extend its monopoly to control the gateway to online business and communication, a violation of antitrust laws. THE DEPARTMENT OF JUSTICE SEEKS A PRELIMINARY INJUNCTION THAT WOULD: - Require Microsoft to include Netscape's competing browser on Windows 98. If Microsoft chooses not to include Netscape, it must unbundle its own browser software from its operating system. -Require Microsoft to let computer manufacturers choose what icons appear on the first screen after the computer boots up. -Prevent Microsoft from enforcing contractual limitations on the promotion or use of competitors' products and services. "Today, we are taking another step to keep our marketplace competitive," said Attorney General Janet Reno who will seek a preliminary injunction to force Microsoft to give consumers a choice in the browser they use with the new Windows 98. However, Microsoft said the Justice Department was moving in the wrong direction. "This is a step backwards for America, for consumers and for the personal computer industry that is leading our nation's economy into the 21st century," Microsoft head Bill Gates said in response to the today's announcement. Microsoft has argued that the Justice Department's attempt to keep the marketplace "open for the next Microsoft" may kill Microsoft itself. The company has repeatedly argued that monopolies do not exist in the digital age; technology changes too quickly for any one company to secure lasting control of the market. In this light, Microsoft contents, Windows 98 is not an example of software bundling, but an attempt to stay competitive by offering consumers the convenience and ease of software integration. Do consumers need protection? Is Microsoft correct that regulation will stifle competition? Are the laws against monopolies obsolete in the computer industry? Paul Gillin and George Gilder, who discussed the Microsoft antitrust case on The NewsHour with Jim Lehrer, will be continuing the discussion online. Should the Justice Department consider "vaporware" an unfair practice? Why hasn't a similar suit come about earlier? What occupies the 10 percent of the market Microsoft doesn't control? What innovations is Microsoft responsible for? Is there less public resentment towards Microsoft than other monopolies?

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