[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

DOJ/Microsoft letter re: Browser Market

  Re:  Letter to U.S. Department of Justice regarding
       Microsoft and Internet Browser Market
  The following is a sign-on letter to the U.S. Department of Justice
  asking that the agency take action to prevent Microsoft from
  monopolizing the market for Internet browsers.  Specifically, the letter
  asks DOJ to stop Microsoft from engaging in predatory pricing of
  Microsoft Explorer (MSE), and that Microsoft be prevented from bundling
  MSE with operating system (OS) software such as Windows 95.  If you are
  interested in adding your name, send the following information to James
  Love <love@cptech.org> by October 10, 1997.  
  Name:                   ____________________
  Title (optional):       ___________________
  Affiliation (optional): ____________________
  City, State:            ____________________
  Internet address:       ____________________
  Comments:               ____________________
  (an html version of this is at: 
  The letter follows:
  Joseph I. Klein
  Assistant Attorney General
  Antitrust Division
  U.S. Department of Justice
  Washington, DC
  Dear Mr. Klein:
  We are writing to ask the Department of Justice (DOJ) to protect
  consumers by taking action to prevent Microsoft from using
  anticompetitive practices to monopolize the market for Internet
  browsers.  Specifically, Microsoft should not be permitted to drive
  Netscape and other products out of the market by offering the Microsoft
  Explorer (MSE) for free; and Microsoft should not be permitted to bundle
  the MSE with its operating system, or integrate the MSE with the
  operating system in ways that are unavailable to other firms.
  As you know, Microsoft now has achieved a remarkable degree of monopoly
  power in the worldwide market for the operating system (OS) for personal
  computers.  The problem with this monopoly is not so much that Microsoft
  overprices the OS.  The problem is that Microsoft has used its monopoly
  in the OS market to gain unfair advantages in the markets for
  applications and services which work with the OS.  There is ample
  evidence that Microsoft has used its control over the proprietary
  operating system in a number of anticompetitive ways, such as closely
  controlling access to information about the current and future
  functionality of the OS, making it difficult for competitors to design
  products which fully exploit the capabilities of the OS, while remaining
  compatible with current and future versions of the OS.  
  When Microsoft engages in anticompetitive behavior to monopolize
  applications markets, it effectively drives products out of the market. 
  This has the effect of reducing competition, not only in terms of the
  prices that are charged, but even more importantly, in terms of
  innovation.  As you know, software products compete on more than price,
  and we are very concerned about the impact of Microsoft’s monopoly power
  on software innovation.
  It is the responsibility of DOJ to ensure that Microsoft does not use
  its OS monopoly to monopolize the market for applications. More needs to
  be done in this area. The unfolding drama in the market for Internet
  browsers is our immediate concern.
  	The Importance of the Browser Market
  Today Internet browsers operate on top of the Microsoft OS to manage a
  large number of important applications which run over the Internet.  In
  addition to providing the user interface for viewing and interacting
  with Web pages, browsers can launch new applications, such as streaming
  audio or video.  Independent developers write plug-ins and other
  applications that work with the browsers.  Microsoft correctly sees this
  as a threat to their OS monopoly.  If there are several browsers in the
  market, it is more probable that the standards for browsers, web pages
  and various applications will be open, rather than proprietary.  We are
  concerned that if Microsoft succeeds in bankrupting Netscape or driving
  Netscape from the browser market, by pricing the MSE at zero, Microsoft
  will exercise too much power in key areas of standard setting for
  Internet applications.  
  We also believe consumers have suffered from the dearth of competition
  among firms that could offer competing browser products, if the prices
  for browsers were greater than zero.  While consumers do benefit
  currently from head-to-head competition between Netscape and Microsoft,
  the predatory pricing of the MSE has discouraged other firms from
  entering the market.  The predatory pricing of the MSE has also changed
  the functionality of browsers in important ways, particularly in terms
  of consumer preferences for privacy.
  Since Netscape or new entrants have difficulty in charging the consumer
  for their browsers, they have to rely upon business plans that use the
  browser as an interface for commercial transactions.  This has had a
  profound effect on the design of Browser features, and it is likely to
  have very important effects on future Internet standards for information
  Consider, for example, the dilemma faced by Netscape.  Netscape is now
  largely unable to charge consumers for the browser, but it hopes to set
  non-zero prices for its server software. Important features in the
  server market may involve such issues as tracking the identity of
  consumers, broadcasting advertisements, or tracking the redissemination
  of information.  In each of these areas, consumers may prefer privacy or
  the ability to better avoid commercial content.  This presents
  conflicts.  But the predatory pricing of the MSE pushes Netscape (and
  Microsoft) to model the functionality of the browser to suit the server
  market, rather than address the concerns of end users.  In our view,
  this is a consequence of Microsoft’s predatory pricing.
  Our objection to the predatory pricing of the MSE is not a general
  complaint about free software or even promotional offers.  Indeed, we
  support many of the freeware, shareware and free promotions that are
  offered on the Internet.  What is different about the MSE case is that
  Microsoft is clearly seeking to drive competitors out of the browser
  market to extend its current OS monopoly power to the platform for a new
  generation of Internet applications.
  	DOJ Should Seek Remedies
  We urge DOJ to immediately take steps to protect competition and open
  standards in the area of Internet browsers.  Microsoft should be
  prevented from charging a zero price for the MSE, which it spends untold
  millions of dollars to produce, advertise and distribute.  Microsoft
  should also not be permitted to bundle or integrate its browser into the
  OS, which is a monopoly.  This matter is extremely important to the
  future of an open and competitive platform for Internet communications.
  In considering this issue, DOJ should appreciate the social significance
  of Internet communications.  The market for Internet browsers is
  particularly important because it concerns the technologies used to
  facilitate publishing and broadcasting information over the Internet. 
  The public interest in avoiding the monopolization of this market is
      Names added here...
  James Love | Center for Study of Responsive Law
  P.O. Box 19367 | Washington, DC 20036 | http://www.cptech.org
  voice 202.387.8030 | fax 202.234.5176 | love@cptech.org