The Explorer: Microsoft's Loss Is Not Consumers' Gain - InformationWeek
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Commentary
1/23/2004
01:57 PM
Fred Langa
Fred Langa
Commentary
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The Explorer: Microsoft's Loss Is Not Consumers' Gain

You've no doubt heard that the initial "findings of fact" in the DOJ/Microsoft antitrust case were announced last Friday (Nov 5) and that they were extremely harsh and deeply critical of Microsoft: For example, the concluding paragraph in the 200+ page document states (in part):

"Through its conduct toward Netscape, IBM, Compaq, Intel, and others, Microsoft has demonstrated that it will use its prodigious market power and immense profits to harm any firm that insists on pursuing initiatives that could intensify competition against one of Microsoft's core products."

These findings were based on several key points, and some of them clearly are true. For example, for antitrust law to apply, there must first be a monopoly. Microsoft does hold a de facto (and now legally defined) monopoly power over desktop operating systems. Note that there's nothing inherently wrong or illegal in holding a monopoly; and with a 90 percent desktop market share, Microsoft surely qualifies.

Second, for antitrust law to apply, the monopolist must have abused its monopoly position. For example, it's illegal for a company to use a monopoly in one area to leverage itself into dominance in another, and the Court says, that's what Microsoft did with its Web browser.

But to anyone who has closely examined the operation of both Microsoft's and Netscape's browsers -- as I have -- that assertion has to make you go "Hmmmmm." Most objective analyses show that Microsoft's Internet Explorer is a much better and more standards-compliant browser than is Netscape Navigator or Communicator. Claiming that Netscape's demise was due simply to Microsoft's unfair competition ignores Netscape's once supreme market arrogance and its demonstrably inferior "spaghetti code" product design. (If you think I'm exaggerating ask yourself this: Why, although America Online owns Netscape outright, does AOL continue to use Microsoft IE as its default browser? I believe the simple answer is that the current Netscape browser isn't up to par.)

Likewise, the Court makes no allowances for the missteps of other Microsoft competitors: For example, IBM couldn't package or market OS/2 to save its life, shipping its OS with a butt-ugly user interface hobbled with high prices and extremely poor -- almost hostile -- developer support practices. And yet the Court cites the demise of OS/2 as an example of Microsoft's prowess. In fact, I believe it was due mostly to IBM's bumbling.

To me, it seems that the Court has ignored numerous instances where Microsoft competitors have shot off their own toes. Microsoft may have taken advantage of their failures, but Microsoft isn't responsible for (say) the IBM marketing choices for OS/2, or Netscape's architectural decisions for its browser.

You don't need 70-something days of courtroom drama to find numerous other examples that weaken the claim that Microsoft enjoys unassailable market dominance that prevents competition. For example, even with the Windows desktop as a delivery mechanism, even with owning a chunk of one of the largest access providers in the world, and even with essentially unlimited funds, Microsoft's MSN hasn't been able to make much of a dent in AOL's total dominance of the proprietary online service space. Similarly, after years of trying, Microsoft hasn't been able to do much of anything in the handheld market. Windows CE simply can't hold a candle to the PalmOS's success.

And although Microsoft has done OK in the server space, non-MS servers, such as Apache, are still hugely dominant.

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