Bill Gates is Wrong

Bill Gates Is Wrong In two landmark antitrust lawsuits filed Monday, the Justice Department and the attorneys general of California and 19 other states correctly contend that Microsoft has crushed competition and stifled innovation in the software industry. To help right this wrong, say the suits, Microsoft must give computer makers and buyers greater choice over which programs can be bundled into Microsoft’s popular Windows operating systems.

Microsoft chairman Bill Gates dismissed the lawsuits as a “step backward for America . . . [for] freedom and innovation. . . . It’s like telling Coca-Cola it must take something out of its formula.” Wrong. Microsoft’s ambition to have Windows play an integral role in virtually every American lifestyle is more like Coke telling Americans that from now on it will be their beverage, main course and dessert.

The debate has taken place over the heads of many computer users, with its focus on operating systems and Internet browsers. Others know the lingo but don’t much care. Nevertheless, federal and state regulators are right to force Microsoft’s hand in court. They pressed their suit after realizing that the computer giant is beginning to make monopolistic claims on less obscure applications than browser software.

The current lawsuits focus on forcing Microsoft to allow computer manufacturers to offer versions of Windows 98, scheduled to hit store shelves on June 25, with either Microsoft’s Internet Explorer or a competing World Wide Web browser, Netscape Navigator. Gates contends that this is impossible because Internet Explorer has become an “inseparable” component of the Windows operating system.

On the same basis, Microsoft is beginning to argue that banking, video conferencing and just about all other “lifestyle” activities that can be performed on a computer are also “inseparable” components of Windows. As anyone who has listened to Microsoft executives’ increasing association of the word “lifestyle” with Windows knows, Microsoft is poised to argue that Windows should be integral to these activities, for which Microsoft will, of course, collect a fee.

Microsoft executives dismiss those who disagree with their vision as modern-day Luddites intimidated by high technology. But while Microsoft presents its vision as a kind of inevitability of computer science, it’s really just a clever, monopolistic marketing strategy.

If Microsoft does not compromise, the Justice Department might be forced to embrace a heavy-handed solution such as regulating Microsoft as a utility (deeming Windows the modern equivalent of railroad terminals) or breaking the company up into “Baby Bills.” But in the short term, the lawsuits have properly put the big issues on the table.

By helping preserve competition in the software industry, the lawsuits should guard against what Gates has said is one of his biggest fears, that Microsoft will grow lazy as did IBM with its monopoly in large computers. If he learns to think about issues bigger than his own market share, Gates will realize that the Justice Department and state attorneys general may actually be doing him a favor.