Compromising Microsoft's Purpose

Jason Burton argues that both consumers and innovators lost out in the latest Microsoft/Department of Justice spat

Microsoft - the company branded a "bully" by corporate executives in a recent survey by Merrill Lynch and Co. - made an uncharacteristic compromise in their much-publicised court case with the Department of Justice. The company was prosecuted under American anti-trust laws for allegedly abusing its dominant position in the operating systems market to promote its web browser Internet Explorer.

Microsoft's climbdown, in providing computer manufacturers with a working version of Windows '95 without the web browser, settles an important side issue in a court case that purports to be about defending consumer choice. However, if in the continuing case against Microsoft the court determines that the company cannot integrate other products into its operating system, serious barriers could be placed in the way of innovation in the world of desktop computing.

According to Assistant Attorney General Joel Kline, head of the Justice Department's anti-trust unit, the DoJ's actions are necessary to "maximise innovation for consumers". Microsoft's competitors seem similarly concerned to defend the interests of the consumer. A spokesman for Netscape (the company that recently reported losses of around USD85 million) warned that "Microsoft's monopoly power is a very serious issue facing our entire society as we move into the digital age, and they are breaking the law by unfairly leveraging their monopoly power in the operating systems market".

But since when has maximising innovation meant standing in the way of the next logical step in the evolution of the Windows environment: greater integration with the Internet? Since when has consumer choice been enhanced by depriving users of free software?

It is clearly true that Microsoft is trying to dominate the Internet market by leveraging Explorer with the help of its popular operating system. Of course Explorer and Windows '95, like most software products today, rely on shared code. And as has been pointed out at great length to Bill Gates, the argument that Explorer is fully integrated with Windows '95 and cannot be removed is somewhat ludicrous. However, there is no reason why Microsoft should have to justify how they choose to ship their software. As Microsoft themselves stated in one court filing, they have the right to bundle "even a ham sandwich" into Windows '95 if they choose.

The language of consumer choice is particularly difficult to swallow when it comes from Microsoft's competitors. True, Microsoft does not have the interests of the consumer at heart when they bundle free software. Microsoft's interest is to make a profit, as is Sun's and Netscape's. This is not to suggest that the anti-Microsoft campaign is just sour grapes on behalf of the company's competitors, although the balance sheets and consumer polls (78 per cent of Americans polled by Fortune magazine described Microsoft products as 'high quality'), suggest many have cause to be jealous.

Critics of Microsoft often focus on the company's arrogance and aggression whether in the court-room or on the market place. From the battle with Sun Microsystems over the design of the Java programming language, to the recent purchase of the web-based email service HotMail, Microsoft is clearly taking no prisoners when it comes to control of the Internet. It also seems unwilling to bow to the US government, as summed up by Executive Vice-President Steve Ballmer's response to the Attorney General's initial complaint in October: "To heck with Janet Reno". In this Microsoft is seen as taking the pursuit of profit too far. This is the real reason why the Department of Justice, the computing industry and various commentators feel at liberty to gang up on Microsoft and why former senator Bob Dole has teamed up with Netscape and Sun Microsystems to form an anti-Microsoft lobbying coalition.

The company that is solely out to make money does not fit the 1990s ethos. While the likes of billionaire Ted Turner and management guru Charles Handy eschew old-fashioned free market values in favour of philanthropy and spirituality, Microsoft's CEO has so far refused to fit into the new mould of 'caring capitalist'. Consequently Bill Gates has become a whipping boy - albeit a very rich whipping boy - for a very '90s brand of moralism that sees ambition and the pursuit of self-interest as problematic. How long Bill Gates and Co. will be able to hold out against this very powerful sentiment is questionable and it may not be long before even Bill decides to take a sabbatical from shaping the future of computing in favour of a more gentle pursuit, such as hot air ballooning like Virgin's Richard Branson. (And Gates has intimated himself that he might well 'give it all away' at some undetermined stage in the future.)

For those of us that use Microsoft's operating systems the DoJ's success in forcing Microsoft to comply with the court order has little immediate consequence. Anyone that wants to use Explorer can still install it for free from any one of a multitude of CD give-aways glued to the front of the computing monthlies. Alternatively, there is the more time consuming approach of downloading it (don't tell Judge Jackson, but Windows '95 also contains a more primitive means of accessing the Internet, known as FTP). The broader issue at stake is the company's ability to create products as it sees fit and to integrate other products into future operating systems such as Windows '98. This will all be determined in the court battle ahead.