Rivals Wonder If Microsoft Will Turn into 'Macrosoft' Justice Department Challenges Might of Bill Gates's Giant Firm
Mark Trumbull, writer of The Christian Science Monitor, The Christian Science Monitor
LAST year, Bill Gates stood in a darkened convention hall and told a gathering of electric utility executives how computer technology could transform their industry. Bills would be paid electronically. Software in the home would help consumers monitor appliances and manage their energy use.
Mr. Gates, founder of software giant Microsoft Corporation, also said that a host of industries are ripe for technological transformation, from education to banking -- a vision that worries not only Microsoft's rivals, but now the United States Justice Department.
In an antitrust lawsuit filed last week, the Justice Department challenged Microsoft's recent $2 billion bid to buy Intuit Inc., the leading maker of software for paying bills, tracking finances, and preparing taxes on a home computer. The government says a buyout would give Microsoft a monopoly not only in finance software but also, potentially, in the emerging market for on-line financial transactions.
Microsoft is readying an on-line service that could link customers' computers to banks over the phone lines. The Microsoft-Intuit combination would build on Intuit's 70 percent market share in finance software.
"They want a piece of every financial transaction," says Mark Macgillivray, managing director of H&M Consulting, a market-research firm in Sunnyvale, Calif.
"Banking, insurance, real estate, TV -- they're all worried about Microsoft," he says.
The lawsuit comes on the heels of a separate Justice Department investigation that led to a settlement. In that case, Microsoft agreed to stop certain licensing practices that were deemed unfair. That consent decree was rejected by US District Judge Stanley Sporkin as too timid and is now under review.
In the Intuit case, prosecutors cite letters and memos from executives at both Microsoft and Intuit implying the merger will give banks one clear choice of a software vendor to partner with. Monopoly profits could result.
"There are some banks that are very, very concerned with this," says John Hall, an American Bankers Association official.
But even for a powerhouse like Microsoft, there is a big difference between wanting control and winning it. Banks are under no obligation to partner with the Redmond, Wash., company. Rival software waits in the wings. …