Nader Love comment on Microsoft finding of fact in NYDN

[James Love <love@cptech.org>]

http://www.nydailynews.com/1999-11-09/News_and_Views/Opinion/a-46604.asp

Judging Microsoft: 
                 It's a blow to real monopoly 

By RALPH NADER and JAMES LOVE 

     The judge's finding of facts in the Microsoft case are a
devastating indictment of the company. The judge found Microsoft
responsible for a litany of anticompetitive and illegal practices
that have harmed consumers.

The 207-page decision is a textbook on the use of monopoly power.
The court found that Microsoft strong-armed personal computer
makers and software publishers to limit consumer choices, engaged
in technological warfare against competitors and sought to limit
competition through collusive agreements with actual or would-be
rivals. 

Much of the decision concerns Microsoft's efforts to crush
Netscape's Internet browser software in favor of Microsoft's
product. For example, the judge quotes Microsoft executive Brad
Chase as recommending changes in the operating system to make
"running any 'other' browser a jolting experience."

Microsoft sought to bind its browser to Windows, Microsoft's PC
operating system that runs on most computers, and force PC makers
to distribute it on all new computers "so that Netscape never
gets a chance on these systems."

Executives were concerned that Microsoft could not expand the
market share of its own browser on its merits alone and were
quoted saying they needed to "leverage [Windows] to make people
use IE [Microsoft's browser] instead of Navigator."

Microsoft made it impossible for consumers or PC manufacturers to
uninstall the Microsoft browser, created a number of situations
where Netscape's browser would not work as expected and withheld
various types of technical information about Windows that made
Netscape less useful to consumers.

While these and many related actions were designed to prevent
consumers from using Netscape, the judge found they also
increased security and privacy risks for consumers,
"unjustifiably jeopardized the stability and security of the
operating system," "increased the likelihood that a browser crash
will cause the entire system to crash" and made PCs more
vulnerable to computer viruses and other security risks.

In these and in many other cases detailed in the findings of
fact, Microsoft was seeking to control and monopolize key sectors
of the PC software market. According to the judge, "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." The judge found further that
Microsoft's anti-competitive actions deter investments in new
technologies and stifle innovation.

The judge also took note of an analysis by Microsoft that it
could charge $49 for Windows 98 but choose a price of $89 as the
revenue-maximizing price as evidence of Microsoft's "substantial
discretion" in setting prices and of its monopoly power.

What does this mean for consumers? It means a Reagan-appointed
judge agrees with the Justice Department that Microsoft's actions
are anticompetitive and must be reined in. It means Microsoft's
dominance in many markets is often due to underhanded efforts to
sabotage rivals rather than to superior products. It means that
the introduction of new and innovative products has been retarded
and sometimes extinguished by Microsoft, reducing consumer
choice.

It means the familiar "blue screen of death" when Microsoft
Windows freezes and crashes could sometimes be avoided if
Microsoft weren't intent on forcing consumers to use its
applications.

Mostly, though, it means the government may do something about
the Microsoft monopoly. This bodes well for the future of
competition and the Internet.

        Nader is a consumer advocate. 
        Love is director of the Consumer Project on Technology.


Original Publication Date: 11/09/1999 
-- 
James Love / Director, Consumer Project on Technology
http://www.cptech.org / love@cptech.org
P.O. Box 19367, Washington, DC 20036
voice 202.387.8030 / fax 202.234.5176