Weekly Wire
Memphis Flyer Tipping Over the Giant

Will the Justice Department foil Microsoft's aggressive expansion?

By Ann Mulhearn

NOVEMBER 24, 1997:  The Department of Justice’s recent decision to pursue anti-trust action against the proverbial giant of the Pacific Northwest has left most people with more questions than answers. Why now? Why not five years ago? Why Internet Explorer when Microsoft (MS) has done so many other slimy things?

Microsoft has been the subject of intense Department of Justice scrutiny since its meteoric rise to PC dominance in the late ’80s. For better or worse, MS Windows is the operating system for over 80 percent of the nation’s PCs, even higher for new computers. Such a large market share with essentially no competition gives MS a de facto monopoly in the majority of the computing world – except the Internet.

Late to the Internet game, MS has been playing catch-up in the browser war with chief rival Netscape. In an effort to bolster its footing, MS allegedly coerced PC manufacturers and resellers into pre-installing its Internet Explorer on new PCs as a condition to licensing and pre-installing Windows 95. Good business, to be sure, but it’s also in direct violation of a 1995 consent decree MS signed with the Department of Justice.

A consent decree is basically a legally binding agreement between parties that settles a potential case out of court. MS agreed not to use its dominance in the operating-system arena as leverage to promote its other software, such as Internet browsers and word-processing packages.

Sounding a little whiny, MS claims that the Department of Justice is taking sides in the browser war, letting the “perceptions” of competitors and consumers about Windows and Internet Explorer cloud the decision-making. MS, of course, swears that it is abiding by all terms of the order, claiming that Internet Explorer is a vital component of the Windows 95 operating system. William H. Neukum, MS senior vice president for law and corporate affairs, has said that operating is “plainly a part” of Windows 95, that the blending of the operating system and browser was always MS’ intent.

MS also asserts that its proposed integration of the Internet browser and the operating-system desktop is well within the parameters the Department of Justice defined in 1995; a key clause of which states that the language “shall not be construed to prohibit Microsoft from developing integrated [emphasis added] products.”

For its part, Justice points to direct violations of the consent decree as its motivating factor, not prodding from Netscape or any emerging competition between Windows and other products.

The Department of Justice can easily refute the integralness of Internet Explorer, citing the operating system’s initial shipment without the browser as well as Windows 95’s current ability to function without Internet Explorer installed.

Whether this case is settled swiftly or becomes a never-ending saga on Court TV, many of its issues may well be moot points. Why? Because such integration of products is the wave of the future. Netscape has been working on developing a “mini-operating system” since its inception. Its melding of browser, mail, newsgroups, and conferencing is only the beginning. The seamless transition between the desktop and the Internet is the goal of all major players.

As cool as that merger sounds, remember that MS holds over 80 percent of the operating-system market; the overlap into the Internet, the only field in which it faces true competition, could spell trouble for Netscape, as well as other smaller browsers and products. If the operating system and the browser are merged, what happens if you opt for Netscape – are you doomed to the software pickings of an Amiga or Atari user? What about cross-platform compatibility? It’s hard enough getting a file from Mac to PC and back without even more standards muddling the stew.

And what about standards? Will the forthcoming Windows 98 allow the use of other browsers? What about plug-ins, encryption methods, HTML and Java code? The mind boggles.

As much as many would like to see MS (i.e., Bill Gates) fall, and fall hard, to Attorney General Janet Reno’s ax, there are merits to MS’ defenses. They are just taking their operating system to the next logical step; they aren’t doing anything that Netscape isn’t trying to do. So why the uproar over Internet Explorer?

Because MS already dominates the PC and software market. One of the few areas where there is legitimate consumer choice is browser and related Internet software. With Windows becoming the Internet to many novice and business users, the market for separate products will be severely curtailed, if not eliminated. Considering that the Internet is one of the fastest growing segments of the economy, that would, well, suck, for a lot of people.

Reno and the Department of Justice hope to free the consumer from the chains that bind us to Microsoft by curbing its activities and allowing “unfettered competition” between Internet products. Reno dreams of a computer environment developing where applications work regardless of the operating system.

A fairy tale? Hey, a girl can dream can’t she?

Will any of this come to pass? Will Gates go down with the beanstalk or will Reno get her wish? Ahh, grasshopper, that’s up to a judge somewhere in Virginia, who estimates his decision to come down early December. Maybe Reno will get an early Christmas present – she’s been wanting a shiny new ax.

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