Look Forward on Microsoft
The problem the government is trying to solve in the Microsoft antitrust case is real. While founder Bill Gates asserted again Tuesday that Microsoft “has done absolutely nothing wrong,” few antitrust experts dispute U.S. District Judge Thomas Penfield Jackson’s conclusion that Microsoft used its monopoly in Windows--an operating system that runs 300 million PCs worldwide--to thwart competition in all sorts of software applications, from Web browsers to word processors.
However, the government’s desired solution--a breakup into a company that makes the Windows operating system and a company for other software--manages to be both intrusive and ineffective, putting government bureaucrats in charge of free-market forces they don’t understand without gaining much for consumers. Jackson should instead accept just the more modest “interim restrictions” the government is also recommending.
The government, which must submit its proposed remedies to Jackson by the end of the day Friday, contends that a breakup would create incentives for increased competition in computer operating systems. But the government’s breakup plan would in no way alter Microsoft’s monopoly, wherein Windows runs 85% of the world’s computers. A new applications software company would have no more incentive to write programs for alternative operating systems than Microsoft has now.
A breakup also would carve out a new company based on Microsoft’s dominance in a world of stand-alone desktop computers. But that world is already becoming obsolete. Wireless and broadband technologies are encouraging the development of palmtop-sized networked computers, with increasing data storage on Internet servers. Jackson would be better off pointing Microsoft in the right general direction--toward freer and more open competition.
One sensible remedy the government is likely to request is requiring Microsoft to make its now-secret “source codes” more available to independent programmers, who could then customize and improve on both operating and software applications. Currently, only programmers blessed by Microsoft can develop Windows programs. Lesser remedies include requiring Microsoft to offer a bare-bones operating system--one not loaded with other Microsoft software--for those who want it that way.
Even if Jackson decides to support a breakup when he holds a hearing on remedies May 24, it is almost certain to be stayed pending appeal. The judge could more immediately serve consumers by focusing on common-sense encouragement of software competition in the future. His challenge will be to uphold antitrust laws while not losing sight of another worthy rule, the law of unintended consequences.
