YOU HAVE to hand it to Jonathan Swift's dauntless Lemuel Gulliver. When he woke up that fine spring morning to discover himself hog-tied by a bunch of tiny island natives, he didn't fight. He just lay back and accepted things, like all good giants do when staring down the barrel of a no-win situation. In light of recent events, there can be no better example for Microsoft Chairman and CEO Bill Gates to follow.
On Nov. 5, the U.S. Department of Justice whooped up on Gates, Lilliputian style. In his much-anticipated findings of fact, District Court Judge Thomas Penfield Jackson wrote that Microsoft used illegal tactics to cheat consumers and bully possible competitors into full retreat. Though Jackson's pithy document technically is not a final decision in the judicial sense, his invective against Microsoft signals that onerous legal sanctions are in store for the company.
For nearly 15 years, Microsoft has led innovations in computer technology, readily supplying consumers with PC operating systems like Windows 95 and 98. These systems, highly praised for their user-friendliness, have made Bill Gates an eye-popping $75 billion fortune, and allowed his stock portfolio to go platinum. Last May, however, the Justice Department, in conjunction with 20 states, initiated an anti-trust lawsuit against his plum operation.
According to the 1890 Sherman Anti-Trust Act, on which the suit takes its basis, no corporation may monopolize any part of the trade or commerce among the several states, or with foreign nations. In other words, it's illegal for any single business to dominate the market for a particular product. In a free market economy, consumers always have the liberty to choose among several manufacturers to supply their product demands. This forces companies to price their merchandise competitively, thus contributing to a healthy economy. A monopoly occurs when a certain manufacturing body grows too large to facilitate this type of fair competition.
After assessing the current evidence, Judge Jackson determined that, more likely than not, Gates' firm is guilty of just such an offense. Microsoft enjoys so much power that "it could charge a price for Windows substantially above [that elicited by the existence of] a competitive market," he said. The key to Microsoft's power, Jackson reasoned, lies in the nearly 70,000 software applications the Windows operating system supports. It seems everything finds a home (and an icon) on Gates' desktop, from the simplest card game to any number of word-processing programs, audio players and Internet browsers. By contrast, Apple's Mac-OS can accommodate only about 12,000 applications - and this is Microsoft's biggest current competition. Something is very wrong with this picture.
Gates, of course, denies all accusations of anti-competitive conduct, maintaining his company competes legally with rival corporations. Um, right. Of course Microsoft is a monopoly. The fact that Windows boasts so many software possibilities makes it impossible for other companies to compete. In Jackson's words, it is "prohibitively costly" for companies like Apple to develop new applications to compete with Windows. As it stands, Microsoft is under no legal obligation to share its technology. This effectively stifles the industry - how many of us can name another PC or Mac operating system on par with Windows? Failing that, who can name another PC or Mac operating system, period?
A court decision against Microsoft could force the software giant to publish the intimate specifications of certain programs. Freely circulating this information would help rival companies produce similar operating systems to eclipse Gates' much-touted applications. The competition will encourage Microsoft to set fairer prices, and perhaps even develop more innovative software applications in an effort to stay one step ahead. In the end, the computing industry will advance significantly.
And why not? After all, communication facilitates both science and business. The truth is, Microsoft has had too solitary a ride on the information superhighway it helped pave. Introducing a little healthy competition to the mix only will benefit the corporation, and of course, the consumers who fuel the computing industry with their hard-earned dollars. With all the genius Bill Gates displays, he'll come up with some way to maintain himself and his company in the technological race. For now, however, he must give the little people a fair chance to succeed.
(Kiki Petrosino's column appears Wednesdays in The Cavalier Daily.)
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