FREE ESSAY ON MICROSOFT

MICROSOFT

violations. In October of this year, the government finally asked a judge to order
Microsoft to stop requiring PC makers to include Internet Explorer when they install
Windows 95 in their computers. Attorney General, Janet Reno, who referred to the company
as a monopoly several times in her press conference, claimed that the company had
violated the 1994 settlement, and that the Justice Department would seek a $1 million per
day fine if they didn't stop the practice. She said, This administration has taken great
efforts to spur technological innovation, promote competition and make sure that the
consumers have the ability to choose among competing products. [This} action shows that
we won't tolerate any coercion by dominant companies in any way that distorts
competition. (Labaton 2) The government's petition seeks an order that would bar
Microsoft from compelling PC manufacturers to accept their browser as a condition of
receiving the OS, Windows 95. It also asks the court to order the company to notify
Windows 95 users that they can use any compatible Internet Browser, as well as provide
instructions on how to remove Internet Explorer from their computer. In response to the
petition, Bill Gates, Microsoft's chairman and chief executive, said that his company was
not violating the antitrust agreement. He proclaimed his belief that his company had
every right to improve and add to the basic features of the Windows OS. He went on to say
that he hoped to further improve Windows by adding new capabilities, such as speech
recognition and machine vision, to it. The Justice Department has several key issues that
it has to deal with in its case against Microsoft. By deal with, I mean they have to get
around Microsoft's answers to their charges. First, the department is accusing the
company of threatening computer makers who delete the Internet Explorer icon. The company
answers this by claiming that "…computer manufacturers are free to ship any
competitor product they wish, but they are not allowed to disable features of our
products," (Just Dept v MS 2). Second, the government is contending that the terms of
Microsoft's non-disclosure agreements are an obstacle in the way of their attempts to
gather evidence for their investigation. Microsoft says that their non-disclosure
agreements are no different than those of most companies within the software industry, as
well as outside it. Finally, there is the matter of the competitive browser possibly
representing a threat to Microsoft's key product, its operating system. Company officials
claim that by not allowing them to include their browser with Windows, the government is
preventing innovation. They say that the pace of the competition will quickly pummel a
company that stops innovating, and that the consumers win because competition drives
firms to deliver better products at lower prices. In essence, Microsoft is claiming that
by not allowing them to include the browser, the government is stifling the competition
that it is trying to protect. Orin Hatch, chairman of the Senate Judiciary Committee,
held the first of what he claimed would be several hearings on the Microsoft antitrust
petition in the first week of November. At this hearing, the Senator produced an
exclusivity agreement between Microsoft and Earthlink Network, Inc. It called for
Earthlink to offer only Microsoft's Internet Explorer and prohibits them from implying
that another browser is available. "'What you have set forth appears to be a classic
example of an artificial entry barrier. It is not designed to enhance the product. It is
designed simply to hobble the competitor' said Kevin Arquit (former general counsel of
the Federal Trade Commission)," (Clausing…Senator). Since the hearing, Microsoft
has asked a federal judge to throw the government's petition out. They filed their
response to the Justice Departments allegations with Judge Thomas Penfield Jackson (the
same judge that signed the antitrust settlement two years earlier). The company is
claiming that the government's case is without base, is implausible and is a perversion
of the truth. According to what their claims, the original decree allows them to develop
integrated products. The response also claims that the company "…realized long
before Netscape was even a company that [Microsoft] needed to build this type of
functionality into Windows for consumers," (Clausing…Microsoft 2). Netscape was
founded in 1994. The first version of Internet Explorer wasn't released until July of 95,
and that was a limited beta version. Where does all of this leave us? Do any of these
allegations have merit? Is this software giant a monopoly? If so, how are we going to be
affected by it? At the time of this essay, no answers have been provided to the questions
brought forth by the government's allegations. However, it is my belief that Microsoft
has met all the requirements necessary for the antitrust laws to be implemented. The
consumers are in need of protection. This company has attained more than a dominant share
of all sectors of the software markets. It has merged with many smaller companies; it has
tied their products to one another, and is about as vertically integrated as one could
imagine within the context of the software industry. This corporation seemingly goes out
of its way to eliminate competition and block entry to the market. Consumers suffer
because of this company and its practices, and I think it is high time that the
government steps in and allows the antitrust laws to serve their purpose. 
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