Microsoft Could Be Headed for More Days in Court
The fate of Microsoft Corp. is still in the hands of an appellate court and then, perhaps, the Supreme Court. Many people seem to have forgotten this, including, apparently, the top executives of the company.
Microsoft’s competitors have not forgotten, and some of them are stunned by the company’s audacity and ambitions since its conviction on federal antitrust charges a year ago.
Microsoft’s Internet plans are making the company’s critics cry foul. What Microsoft proposes to do in the next few years makes the charges on which it was convicted look rather tame and even somewhat irrelevant now.
On May 15, a group of Microsoft critics, including business competitors Sun Microsystems, Oracle, Netscape and Sybase as well as the Computer and Communications Industry Assn., released a 39-page report about how Microsoft’s announced plans for its future products are even worse threats to competition than its original antitrust charges. (The report is available online at https://www.procompetition.org/headlines.) This group, called the Project to Promote Competition and Innovation in the Digital Age, or ProComp, alleges that Microsoft’s new strategies threaten to extend the company’s desktop software monopoly onto the Internet.
Microsoft already has announced plans to enter several new markets, and companies in those markets are watching these moves warily. Within a year Microsoft is expected to release its so-called Stinger mobile telephone, with Microsoft Windows CE software. In November the company will jump into the computer and video game-box wars with its new Xbox, a TV add-on that some experts believe will clobber Sony and its PlayStation 2 next Christmas. Microsoft is waging war on the MP3 format and pushing its own proprietary format for audio and video, Windows Media Player. Microsoft already is going head-to-head with America Online as a full-service Internet portal, MSN.com, which is tied to Hotmail, MSN Messenger, MSNBC online and various other services.
Nearly all of these elements will be integrated into Microsoft’s two main products, the Windows operating system and Microsoft Office, its ubiquitous suite of software for word processing, spreadsheets, e-mail and presentations. The new version of Office includes “tagsâ€--digital links a user can insert into a document that connect with information Microsoft provides online, such as stock prices or company information. These are free now, but Microsoft expects that soon people will pay for such access on a subscription basis.
That early preview in MS Office points to Microsoft’s so-called .Net strategy, which the company announced last year. The Microsoft .Net plan is for Microsoft software to become indistinguishable from the Internet. This already is true for most people who use Microsoft’s Internet Explorer as a Web browser--it has 88% of the market--and Outlook Express for e-mail. But as the Internet begins to extend into other devices such as phones, hand-held computers, TVs and “smart cars,†Microsoft wants not only to have sold the software on those devices but also to make sure they’re all talking to each other in the language of Windows and .Net.
ProComp argues that Microsoft is bent on controlling these new extended features of the Internet because the desktop PC market is weakening and the landscape of the computer industry is changing rapidly.
By “bolting†new services into Windows, the Microsoft critics charge, Microsoft attempts to scare off any new competitors, even in markets Microsoft is trying to get into itself. That, say the critics, is anticompetitive behavior leveraging the Windows monopoly on the desktop, the same kind of behavior that produced a verdict against Microsoft last year.
Microsoft will have another day in court, and it may get relief from U.S. District Court Judge Thomas Penfield Jackson’s proposed remedy of splitting the company in two.
But Microsoft could be back in court again if its critics are right about its new plans. That raises the question that vexes everyone outside Redmond, Wash.: Just what can be done about Microsoft and its power?
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Gary Chapman is director of the 21st Century Project at the University of Texas at Austin.
