Analysis: Consumers Made Microsoft No. 1

By Bruce Ramsey Seattle Post-Intelligencer | THE JOURNAL RECORD, September 18, 1998 | Go to article overview

Analysis: Consumers Made Microsoft No. 1


Bruce Ramsey Seattle Post-Intelligencer, THE JOURNAL RECORD


James Barksdale, president of Netscape Communications, asked the rhetorical question in March at the Senate Judiciary Committee. How many spectators had computers? Hands went up. How many didn't have Windows? Hands went down.

"Gentlemen, that's a monopoly," Barksdale said.

Microsoft opponents packaged this testimony into a film, which was shown in Seattle last month at a conference on antitrust law. It was a tub-thumper, but Payton Smith, a partner at Davis Wright Tremaine, spotted its weakness. "I would have been more moved by that film if I hadn't seen so many competitors in it," he said.

Sen. Slade Gorton made the same point: that the complaints are from competitors, not customers. He called the case "a private lawsuit being pursued by the government of the United States."

The conference sponsors, the Competitive Enterprise Institute and the Washington Institute Foundation, are both inclined to favor Microsoft. But they had speakers from both sides on the central questions: Is Microsoft a monopoly? Is it bad? Should the government attack it?

Microsoft's critics focused on its conduct. Microsoft, they said, is muscling into cable TV, banking and television -- even political magazines. "Consumers don't like the idea of a single firm controlling everything under the sun," said James Love, executive director of Ralph Nader's Consumer Project on Technology.

Microsoft's supporters responded that the company hasn't been able to control everything. That it has 90 percent shares in a few markets means not that its conduct is bad, but that its products are good. "Products that aren't any good fail," said Jonathan Zuck, director of the Association for Competitive Technology.

Even monopoly itself does not imply high prices, they argued. Stan Liebowitz, professor of managerial economics at the University of Texas, said the price of Microsoft Word fell even as its market share on the Macintosh rose to 100 percent. Microsoft had a monopoly, he said, "but it didn't act like a monopolist."

Both sides claimed the mantle of competition. The anti-Microsoft side had a genteel, supervised version of it, with a lot of little guys, none of them playing to win. The other side gloried in players who slugged it out.

The slug-it-outers sometimes shrank from stating their case plainly. …

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