A single company controls much of the computer industry -- a behemoth that ruthlessly uses its dominance in existing technologies to cement its hold over new ones. So the federal government's antitrust lawyers step in to try to smash the monopoly and restore some semblance of competition.
That is one way to spin this week's headlines about the confrontation between the Justice Department and Microsoft. Funny, though, how the same words fit the legendary antitrust saga of an earlier era: the battle between the Justice Department and IBM. That conflict kept armies of corporate lawyers busy for a staggering 13 years beginning in 1969 -- and ultimately proved pointless. By the time the court ruled the suit was without merit, the landscape of the computer industry looked utterly different; minicomputers were whomping IBM's hulking mainframes in the marketplace, and IBM itself was just beginning to ship a little product called the PC -- with an operating system thrown together in a rush by a tiny firm called Microsoft.
So goes the world of antitrust: Yesterday IBM, today Microsoft. As Bill Gates' lawyers once more go to the mat with Janet Reno's, you can't help wondering how effectively the laggardly legal system can intervene in a business as supersonic as the Internet. By the time the courts untangle Internet Explorer 4.0 from Windows 98 and decide whether or not Microsoft's bundling of one with the other is a violation of a 1995 consent decree, both Internet Explorer and its chief competitor, Netscape, will doubtless be up to version 8 or 9, and the "battle for control of the desktop" will have moved on to some other field.
In the meantime, everybody loves a fistfight between titans. As the press went nuts over Monday's news from Washington, there were some peculiar twists. Most of the coverage explained clearly that Justice's lawyers are objecting to Microsoft's practice of forcing computer manufacturers to install its Internet Explorer browser on every new computer that ships with the Windows 95 operating system. Microsoft argues that it's only improving products and giving customers what they want -- adding features to Windows and better integrating the Internet with your computer's local files.
Is integration of the browser and the desktop logical and inevitable? Is it what users want? Microsoft thinks so, but a lot of other people don't. You'd never know that from the coverage. Here's how a story by the San Jose Mercury News' Rory O'Connor put it:
While the case focuses on Microsoft's efforts to promote its Internet Explorer browser -- the software consumers use to tour the World Wide Web -- its thrust is far broader. That's because browsers promise to become the new face consumers see on their computers, displacing the operating system as the primary distinction between one computer and the next. If that evolution occurs, Microsoft's dominance in software could come under assault from a competitor like Netscape Communications Corp., whose Navigator is currently the most popular browser in the world.
An otherwise astute analysis on Wired News struck a similar note:
Should the government's latest attempt to clip Microsoft's wings prove successful, it could play a decisive role in the browser wars and deal the industry and consumers something of a setback by delaying the marriage between browsers and operating systems.
It's a sign of how well-oiled Microsoft's PR machine is that Microsoft's own agenda of marrying browsers and operating systems has so quickly become something of great value to both "industry and consumers." In fact, the only people serious about turning the browser into "the new face consumers see on their computers" are at Microsoft itself. (Netscape might dream of a Java-based operating system with a browser "face," but it's still only a dream.)
As I wrote here last month, you won't find many consumers clamoring for "seamless integration of the Web and the operating system." Most of us are quite happy to know that the browser is our window to the Web and the operating system is our tool for controlling our own computer and hard disk. Microsoft, however, is looking for some way to persuade people to use its browser instead of Netscape's; it hopes to build "seamless integration" into a big plus that its competitor can't match.
Microsoft will maintain in court that its "integration" of browser and operating system has nothing to do with its effort to trounce Netscape. And any sane observer will laugh. (Late Wednesday, Reuters reported what sounded like smoking-gun testimony: a Compaq exec told the Justice Department that Microsoft forced the computer manufacturer to replace Netscape's browser with Internet Explorer. If Compaq didn't comply, Microsoft wouldn't let it install Windows 95 on its computers.)
On the other hand, the prospect of a court trying to draw fine lines between operating-system code and Internet browser functions is also pretty ludicrous. While many in the technology industry are delighted to see Big Bad Microsoft under attack, the prevalent attitude is that the courts are the last place in the world you want to see choices made about technologies. They move too slowly; they just don't get it -- "it" being the unique, innovation-producing, price-reducing nature of the software business.
Microsoft has been testily defiant in the face of the challenge from Washington. (Says Gates: "This is called capitalism.") The real court to whose tune Microsoft jumps is that of the stock market -- which barely hiccuped at the antitrust move on Monday, and boosted MSFT $6 on Tuesday on reports of a strong quarter. (It was down nearly $3 on Wednesday, though -- that's capitalism, too.) A recent article in Slate by a former Microsoft employee listed several hypothetical early-warning signs that might indicate the end of Microsoft's long stock climb; there wasn't a single mention of government antitrust action.
The threatened $1 million-a-day fine against Microsoft sounds huge, but isn't terribly persuasive to a company this rich -- and Gates has already said he'll comply with court rulings rather than pay a cent. Government action against Microsoft isn't going to merit more than a sneer from Redmond until it hits the company's people where it hurts: in their stock options.