Does Microsoft's Web-Browser Policy Violate Antitrust Laws?

By Katz, Ronald S.; Barbour, Haley | Insight on the News, June 1, 1998 | Go to article overview

Does Microsoft's Web-Browser Policy Violate Antitrust Laws?


Katz, Ronald S., Barbour, Haley, Insight on the News


Yes: Microsoft is `marketing' its browser based on its monopoly of operating systems.

Bill Gates, Microsoft's chairman, recently was quoted as saying that "the entire PC industry has a large stake in the introduction and success of Windows 98," Microsoft's latest operating system. He does not seem to realize that this is the problem -- an entire industry should not depend on one product of one company in a properly working competitive economy.

Those who support a broad government case against Microsoft usually say something negative about the company and then assert that government should participate in the competitive process. I do not subscribe to those views, although I support a broad government case against Microsoft. Such a case is necessary because it is the job of the government to create a level playing field for all competitors. Right now, because of the nature of technology, there is no such field. In fact, it is not much of an exaggeration to say that Microsoft owns an important part of the playing field.

It is, however, in the nature of technology that someone must own part of the playing field because useful technology demands standardization. Our society would not have progressed beyond the Tower of Babel if, for example, every telephone company had had to build competing facilities such as long-distance switches, or every airline had had to build competing facilities such as airports. Can you imagine not being able to talk to your neighbor because she subscribed to a different telephone company?

These inefficiencies don't occur in our society because we require that these essential facilities be shared by competitors. In fact, it is the antitrust laws that require that they be shared. This fact is not government interference in the competitive process. Rather, it is the creation of the environment within which the competitive process can occur.

The government must create that environment in our most critical industry -- high technology. That is why the government should bring a broad antitrust lawsuit against Microsoft.

Microsoft is not evil, but it does control an essential facility for reasons not entirely relating to its superiority. Microsoft is clearly one of the great success stories of all time. As a matter of fact, Microsoft's core product helped to bring order out of chaos. This product was the operating-system software of a personal computer, the software that does the internal housekeeping chores that enable a personal computer to run. This operating-system software is different from so-called applications software which does the tasks -- such as word processing or creating a financial spreadsheet -- which customers purchase computers to do.

In order to understand why the government should bring a broad antitrust case against Microsoft, it is important to keep this distinction between operating-system software and applications software in mind. Microsoft's operating systems have been labeled using variations of the names DOS and Windows. Names of some Microsoft applications software include Word (for word processing) and Excel (for creating a financial spreadsheet).

At the time Microsoft's first operating system came out, it was just one of many. In the late seventies and early eighties, each brand of personal computer had its own proprietary operating system, and most applications software would work only with the operating system for which it was designed.

This situation became very inconvenient for customers. If they wanted to use applications software that did not run on their current computer, they literally would have to buy a new computer. This situation created a tremendous need for computers to be compatible with one another.

Therefore, the nature of our technological economy created an overwhelming need for a company -- any company -- to create a standard. It could have been IBM. It could have been Apple. …

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