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TODAY'S JOLT
A bright, shiny day for Mr. Bill
BY DAN KENNEDY

FRIDAY, NOVEMBER 2, 2001 — The Justice Department announced this morning (November 2) that it had reached a settlement with Microsoft in the three-year antitrust case it had pursued against the King of All Software Companies.

It’s about time. And when we look back at this case some years from now, we will be amazed at what a colossal waste of resources it amounted to. No doubt it will even be seen as having contributed to the technology bust of 2000 and 2001, although larger forces — particularly the insane dot-com stock bubble — clearly deserve a bigger share of the blame. (Disclosure: I own a few shares of Microsoft stock, although I use a Macintosh rather than the obviously inferior Windows.)

When it comes to behavior of which Microsoft was accused, there is no doubt that it was guilty as charged. My favorite story, whose origins I have since forgotten, was something I picked up in the course of researching an essay on Bill Gates (see "The Geek We Love To Hate," News and Features, June 23, 2000). Sometime in the 1980s, Microsoft was upgrading DOS, the pre-Windows operating system that powered the IBM PC. At the same time, Microsoft was pushing some pathetically inadequate spreadsheet program — I think it was called Multiplan — to compete with Lotus 1-2-3, which was then the industry standard. According to this account, the DOS team’s mantra was: "The job’s not done till Lotus won’t run!"

Sleazy? Absolutely. Probably even a violation of antitrust laws, since the company was trying to use its monopoly in one business (operating systems) in order to establish a monopoly in another (spreadsheet programs). Similar behavior can be traced right up through the origins of the Justice Department case, which was based on Microsoft’s illegal efforts to use its Windows monopoly to destroy the upstart Netscape.

But consider. When government regulators went after Standard Oil, there was no other place consumers could get oil. When they went after AT&T, there was no alternative to buying your telephone service from Ma Bell. But when they went after Microsoft, you could trot yourself right over to CompUSA, buy a Macintosh, and fill all your computer needs without one product coming out of Redmond, Washington. Besides, though Microsoft surely enjoys a monopoly when it comes to Intel-based computers, how important is that, really? We’re living in an age of rapidly changing technology. A monopoly today could mean very little tomorrow. Just ask IBM, whose dominance in the early days of personal computing crumbled in just a few short years.

It would appear that the settlement to be put before US District Judge Colleen Kollar-Kotelly today places few restrictions on Microsoft’s future behavior. As Yale Law School professor George Priest, a consultant for Microsoft, wrote in today’s Wall Street Journal, "Fortunately for consumers, it is backward-looking only — enjoining those past Microsoft actions that the court found illegal. Thus, it should not seriously impair Microsoft’s ability to improve products for the future."

That’s as it should be. And as we Mac aficionados know, Microsoft’s products certainly need plenty of improvement.

The remaining impediments are the 18 state attorneys general who joined the Justice Department in suing Microsoft. In Thursday’s Boston Herald, as it was becoming clear that a deal was imminent, Massachusetts AG Tom Reilly said, "This company needs a change in attitude. What we need to do is put Microsoft in a box."

Please. What we all need is a Microsoft that competes aggressively, with its wings clipped a bit to prevent it from engaging in future antitrust violations. We also need to recognize the essential truth of what Bill Gates has been saying all along: that technology isn’t oil or coal or even the phone system. It is developed and sold in a rapidly changing intellectual environment in which even the mightiest can be quickly and unceremoniously overthrown.

Never mind what Microsoft has done to its competitors. If it stops satisfying its customers, then someone else will rise up to take its place.

Issue Date: November 2, 2001

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