Microsoft retreat should
not result in surrenderThe issue: The Bush administration has
chosen not to continue seeking a breakup
of Microsoft Corp. because of
its allegedly monopolistic practices.TIME should tell whether the Bush administration's decision to stop pursuing a breakup of Microsoft Corp. was a defeatist retreat from aggressive antitrust enforcement or a practical method of assuring a modicum of competition in the computer industry. Microsoft may celebrate its escape from such a severe sanction, but it should not be allowed to run roughshod over software companies trapped in Microsoft's Windows operating system.
Under the Clinton administration, the Justice Department's Antitrust Division had sought to break Microsoft in two. The trial judge ordered such a breakup, to place Windows in one company and everything else in another. However, an appellate panel, while upholding most of the judge's findings, strongly suggested that a breakup of Microsoft would not be appropriate.
The government faced difficult if not insurmountable odds in trying to persuade the new judge who has been assigned to the case to depart from traditional breakup orders in antitrust cases. Those have involved government-sanctioned monopolies, such as AT&T, or monopolies created by mergers. Neither circumstance applies to Microsoft.
The Justice Department instead has chosen to rely on a key ruling upheld by the appellate court, that Microsoft had illegally employed anticompetitive means to protect a monopoly by Windows. The court ruled that sanctions on Microsoft's behavior to increase competition in the software business are appropriate. Thus, the government is in a position to require that Microsoft loosen its restrictions in contracts with computer manufacturers.
Any settlement or court order should free PC makers to select and promote competing software and services and to facilitate consumers' ability to remove some features that Microsoft bundles with Windows. The court found that Microsoft had used bullying tactics to give its software an advantage over competitors, such as Netscape Communications and Sun Microsystems.
Microsoft has continued such conduct during the court case. After Compaq announced recently that its computers would feature America Online, Microsoft announced that it would force Compaq to put three Microsoft icons -- for its Internet Explorer browser, its Windows Media Player and its MSN Internet service -- on its desktop screen. Such tactics should be brought to an end before Microsoft has a chance to employ them in its next-generation operating system, Windows XP.
The Justice Department says it also will call for Microsoft to be more open in sharing information with software rivals so their products can run smoothly on Windows and to reveal price lists for Windows' licenses to keep it from relying on hidden discounts that encourage computer manufacturers to use other Microsoft software.
Those sanctions will need oversight to make sure they are carried out. Any government approach less than that would amount to abandonment of the case, seriously damage the credibility of the Antitrust Division, and would not serve American consumers well.
Published by Oahu Publications Inc., a subsidiary of Black Press.Don Kendall, President
John Flanagan, publisher and editor in chief 529-4748; jflanagan@starbulletin.com
Frank Bridgewater, managing editor 529-4791; fbridgewater@starbulletin.com
Michael Rovner, assistant managing editor 529-4768; mrovner@starbulletin.com
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