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Perspective: Why restraining Microsoft no longer matters
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Up until the mid-1990s, computer and software companies escaped close regulatory scrutiny. (IBM's 13-year battle with the United States Justice Department the notable exception.) But once IT grew into a multibillion dollar industry, the number of billion-dollar companies mushroomed and governments could no longer resist the temptation to have a bigger say--even if they were condemned to lag a step or two behind the times.
The latest example of this was last Monday's decision by Europe's Court of First Instance to uphold a previous antitrust ruling against Microsoft. Europe (old and new), which tends not to cut big monopolies much slack, hailed the decision as an important pro-consumer move. But the United States' antitrust chief, Thomas O. Barnett, countered that the ruling would do just the opposite, "chilling innovation and discouraging competition."
The depth of difference between otherwise sober bureaucrats underscores how very differently Europe and the U.S. approach the role of government and the limits of free enterprise. We haven't had this big a trans-Atlantic snit over the same data points since inspectors went hunting for Saddam's weapons of mass destruction.
Oddly enough, the two sides are joined in their misunderstanding of just how little control they can ever exert over tech's future. I'll get to that in a moment but let's briefly review what happened after the Bush administration took office in 2001.
The Department of Justice didn't take long to drop its aggressive antitrust pursuit of Microsoft. Ultimately, the government agreed to a settlement with the company that Clinton-era trustbusters had fingered as a predatory monopolist. Since the attorney general gets appointed by the president, the antitrust department's accommodating approach was hardly a revelation, especially given President George Bush's political bent.
What I found more interesting was how the DOJ made the right choice for all the wrong reasons. The blunt truth is that John Ashcroft's crew had no clue about the technology shifts that were going to undercut Microsoft's momentum. To be fair, they were hardly alone. Remember that when the Microsoft lawsuit got underway, the Google guys were just working stiffs with bad haircuts and Linux/open source was widely dismissed by experts supposedly in the know.
In fact, I remember the snickers that went up in the courtroom after Microsoft's attorneys argued there was no Windows monopoly because of Linux. At the time, it was a bogus argument by a desperate lawyer. At the time few realized--including the brass at Microsoft--just how prescient a prediction they had just heard.
Government regulators come and go but Microsoft's bigger headache these days comes from new technology offerings. To wit, IBM just introduced a beta collection of free software applications to compete against Microsoft's Office. And Google, which long ago surpassed Microsoft in the sizzle category, keeps adding to its store of free applications. Meanwhile, Yahoo is spending $350 million to buy a Web-based e-mail and collaboration package comparable with Microsoft Exchange and Outlook.
And that's just from the well-known companies. What about under-the-radar Internet startups Microsoft's never heard of? Those are the bogeymen who inhabit Microsoft's nightmares, the ones unsheathing the killer app nobody anticipated.
This may be putting too fine a point on things for Neelie Kroes, the European Union's top regulator. She's playing to her constituency and it wants to see Microsoft weighted down with more regulatory restraints. It may come to that. Europe's bureaucrats seek to protect what they believe to be the public's best interests. By then, however, the terms of the technology race likely will have moved on.
Biography
Charles Cooper is CNET News.com's executive editor of commentary.
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antitrust, John Ashcroft, regulator, Europe, government
Yeah, Google and IBM have put up offerings intended to undermine Microsoft's Office hegemony. So freaking what? Until those offerings actually get some traction, and Microsoft's dominance starts to diminish, where's your argument? People have been making the argument that Microsoft's hegemony in desktop software would go into decline because of new technologies since Microsoft achieved that hegemony. Where's the evidence that that downward curve has ever commenced?
And Google, despite all its hype and quite immense market power in its own right, is really a paper tiger when it comes to desktop software. As Microsoft has pointed out, Google is really nothing but a one-hit wonder: it has at base one product, it's internet search software, that is profitable. All of its other offerings have been largely ignored or simply replicate what others have done but in general add nothing to their bottom line. If Microsoft has something to fear from Google in the area of desktop software, it's certainly not obvious from any beachhead Google has already achieved.
Really, there are two companies with monopolies or near monopolies in separate spheres: Microsoft in desktop software, and Google in search. How these dual monopolies undercut the notion that Microsoft will not continue to enjoy its dominance in desktop software from now until forever is a case you haven't made, and seem to be incapable of making.
That said, they have a lot of ground to lose. They don't have to die as a company (being bought by some other company) but they need to get their act together or they will be takeover fodder.
In fact, if anything, I'd argue that it's Google that is the more vulnerable company -- though I don't think its vulnerability is particularly great.
Why? Because Microsoft has in fact established a beachhead in search software, as have a number of other companies. That is, the use of Microsoft for search is a highly non-trivial number, even if Google wins handily so far. What Google has going for it over the long run, more than anything else, is user habit. I don't think habits like this are easy to break unless there's some good reason to do so, and I'm not sure what that reason might ever be.
But I can at least see that Microsoft has a fighting chance of starting to encroach on Google's territory. What I don't see is any evidence whatsoever of the reverse.
This is a fact that will change when the majority of people WANT it to change. The fact that it hasn't should suggest that they don't.
can get their email or add a calendar event. But by the time the
judicial system moves on a tech company, they are already 4 or
5 generations behind on the complaint.
I disagree that Microsoft is on the ropes. What they are having
trouble doing is adjusting to anything that they can't control
under their monopoly of Windows and Office.
Not unlike NBC Universal making the break with Apple's iTUnes,
until a major OEM says "no more" to Windows and Office will I
believe that MS is on the decline.
I'll tell you: Consummers! When consummers get the clue that there ARE other viable choices out there for them to pick from they must apply all the pressure they can to OEMs to provide those choices. Correct? You BET! ;)
Dell has started the ball rolling with it's offering of Ubuntu. Let's see how fast this action picks up enough steam to create a reaction!?! B-)
history. Take a look at the history of large corporations. They
start out small, innovative, and agile. As they mature they
gradually become large, less innovative and stationary. It is the
nature of the beast. MS will eventually become just another "also
ran" as the technology world moves on to the next big thing.
A few years ago you really did have only one choice as a home
user if you actually wanted to do anything productive. Now, I
have two computers in my home office and neither one runs
Windows. As a matter of fact I actually get more done than when
I was running XP as my main OS.
With its near monopoly MS can slow the transition, but they can't
stop it. And that in many ways is a good thing. Gradual change
is a lot less disruptive by nature and people are much more
willing ti accept it.
This EU intervention is nothing more than political posturing. The EU is powerless to manipulate the global software market, yet they try anyway. Windows leads the desktop and server market today but back when this case started, they trailed in the server market to Unix. A year or two from now, they will probably have more server share. What goes up must come down; maybe we will live long enough to see it.
Another user commented about drivers for peripherals and such. This was another good point. Windows is more than an OS. It is part of an enormous ecosystem comprised of hardware vendors, software venders, and consumers around the globe; all symbiotically linked. This system has been flourishing since the PC revolution started. It is the soil we all tread on.
Linux, Macs are like weeds growing in the Windows garden :-) Will they eventually choke out the Windows Sequoias? Time will tell but government regulation will not have anythign to do with it. They are just taking tools away from the gardeners. The plants are still there and growing.
This guy Cooper is okay, and maybe a decent editor, but he could learn a lot from the likes of McCullagh, who gets all over a political or legal issue like this and clearly reveals the appropriate connections for readers.
have to be stopped". It's not actually the monopolistic practices,
but the dirty tricks used to establish and maintain a monopoly. I
think you'll find that's what the EU is concerned about.
Then why is MS falling all over itself to copy OSS while simultaneously engaged in a huge FUD campaign?
MS does not bult a good mousetrap, despite it being made of swiss cheese. It is too moldy to attract mice.
MS is getting what it deserves for its blatantly unethical, immoral, and illegal activities. How else can a company that produces total crap gain such huge advantage in the market?
This article is one of the more retarded things I have read on CNET lately. This one beats out that whiny 17 year olds column a while back. In fact, I had to do a double take on who wrote it, this is the sort of illogical, poorly researched and insane drivel I have come to expect from Declan, not Mr. Cooper.
Microsft is driving us into Open Source or Pirates. It no wonder we show you no quarter becuase you don't show any to us by your prices!!
Jannerhank
Second, do you still believe anything that a Bush administration official says?
Listen carefully. Monopoly power slows down innovation. That is an indisputable fact borne out by economic history. From Ma Bell, to GM, to the cable companies. Anyone who tells you that antitrust measures will retard innovation is plainly and simply LYING.
instead of abjectly throwing in the towel. Consumers have never
benefited from the end result of unfettered capitalism, namely
monopoly.
Monopolists want to crush competition to enhance their earning
potential even if what they are selling is sub-standard and
inherently broken at the point of supply to a captive audience.
One only has to look at appallingly poor products like Windows
ME to see how much the public has been abused by Microsoft's
monopoly.
Microsoft and all other monopolists have now learned that they
cannot abuse EU law and if they do it is going to hurt. Let every
US monopolist know that if they do not wish to abide by EU law
they should not bother coming to the EU.
Read: "Software Patents for Methods of Doing Business?A Second Class Citizen No More"
http://www.tms.org/pubs/journals/JOM/matters/matters-0012.html
Did you get the picture!
The lack of regulation allows MS to do almost anything it pleases including treating its customers like thieves, overcharging, harassing those you try to transfer a Windows license that came with one computer to its replacement. MS does "not" think that once purchased the software is yours so long as you only use it on one computer.
I cannot think of a single thing MS does that benefits the consumer more than it benefits MS. Somehow MS got the idea that their rights are greater than consumers rights.
Second, M$ is the most widely used OS in the world because you can only RARELY find a box that doesn't have it PRE-LOADED (OEM!). M$ has OPENLY made deals with all the computer manufacturers, save Apple/Mac & IBM to get OEM "status"! If one has no other choice ([b]KNOWN[/b]), then one goes with one can get!!!
THIS is where I DO agree with you 200%:
>"The lack of regulation allows MS to do almost anything it pleases including treating its customers like thieves, overcharging, harassing those you try to transfer a Windows license that came with one computer to its replacement. MS does "not" think that once purchased the software is yours so long as you only use it on one computer. I cannot think of a single thing MS does that benefits the consumer more than it benefits MS. Somehow MS got the idea that their rights are greater than consumers rights."<
Microsoft is finally being revealed as the strong armed company that they have been for years. Of course the Windows "Fanboys" can't see this, they think anyone that is against Microsoft is bad or stupid, of which, neither couldn't be any further from the truth.
One reader mentioned something about "wit" and "marketing", let's just say LiNUX would be the only one to come to a battle of the "wits" armed, should it ever come to this. Marketing "seems" more like a cover, to make people think they are doing something right.
Another case, windows without Media Player, hmm.. I am not sure how that one can benefit consumer. I use my Windows Media Player to play music, CD, etc. But, for DVD player, I still use other software to play it, e.g. PowerDVD.
The difficulty is that you have legislators and attorneys trained in the past meaning the present (jurisprudence), while the techies use the present to predict the future. It certainly makes sense that the legal community would give the future smaller importance because frankly it hasn't happened yet. The other obvious problem is that legal systems take a long time. By the time a decision is reached, the entire circumstance has changed.
In addition, legal systems world wide are not divorced from the political system as much the blindfold over Justice's eyes implies it is. Hence the attack on the "Microsoft that was" that continues and Europe and the US attack on the "prior Microsoft" that will start up again under a Democratic White House.
And, judges lacking the skills to decide for themselves, rely on "techies" whom they recruit, never understanding the polarized view of Microsoft particularly in the academic community. If I was a judge who didn't know better, I would collect a lot of the posts here and present them as evidence of well-thought-out views on the monstrous power of Microsoft and would never imagine they are the result of a reflex action by some when the name of a certain Washington-state software company appears in print.
As long as we allow hardware manufactures to ship only one O/S with their product, it will always be Windows because they would not be able to sell their product in any significant quantity otherwise.
No one wants to buy a new multi-function printer, or other device and wonder whether they can find drivers or if it will work as well as it does with Windows. It's a cycle that cannot be broken.
Microsoft's only real competition is itself (older versions of its own products).
uy a new multi-function printer, or other device and wonder whether they can find drivers or if it will work as well as it does with Windows
--End Quote
Enter Vista, where people had to make the choice of upgrading from Vista to XP (Yes, I said upgrading); or spending even more money to buy new hardware and peripherals to replace stuff that was working until Vista and it's lack of drivers at release.
At the least, put Linux and Vista on the same machine and let people make their own choices.
You are right in that Microsoft's only real competition, outside of the geeks and Mac addicts, is themselves, at least for OS's.
Indeed, technology will have moved forward "by that time" as Coop states. And, so what? We know or can take a darn good guess at what the future holds. Yahoo will remain Microsoft's pet, Apple will continue to fail to take advantage of increasing computer market share probably because they have no interest and Google app's and proprietary version of a Linux-based O/S requiring the Firefox default browser will solidify their industry position as an O/S provider; even Sun Micro will still try their darndest to deliver a Solaris desktop lol. Little start-up's will all fail except for a tiny few who will be bought out by firms like those already mentioned. Other nation blocs like the EU will copy the EU's "courage" in telling MSFT "no." The French governmnent's already gone Linus. And I've already shorted SYMC and MFE since the release of WOCL - so what else is new? lo0l
I believe these sort of possibilities for the future are those to which Coop refers. Microsoft will be forced to downsize, Charlie, because of such developments. Their Vista dropped the ball bigtime - the comparisons to ME as an O/S are inappropriate in scale. The post-Vista, next gen MSFT O/S will be rush released after much testing and Vista machines will have a relatively short shelf life because of it. MSFT Office - a big profit source traditionally - will become relative history. Google and OpenOffice will give it a serious run for its money.
So, where's Redmond's "growth product(s)" TODAY? Zune? X-box? We need to see some creative thinking out of MSFT's corner offices, deliver us stuff we'd never expect from them, sort of thing. Meanwhile, every little bit of restraining the beast for its monopoly excesses is a bold step forward that will help people around the globe.
Open Document formats do not matter either because a majority of the market still uses MS-Office formats. Microsoft OOXML and Sun ODF use the same technology, XML files embedded in a Zip file. Yet open source pundits blast Microsoft for using non-standard formats like Zip and XML, and then complain about XML tags, but ODF shares about 85% of those XML tags with Microsoft OOXML. To non-technical people, they really cannot see a difference when loading the XML files because OOXML and ODF use the exact same method to encode data.
Hardly anyone truly wants Windows.
But Europe would have had to 1st penalize Microsoft for acting against the interest of European people, before it can do the same against other US information processing monopolies, such as Google. I mean would it have made any sense at all for EU to go after Google monopoly of search information before having gone after Microsoft monopoly of desktop. Of course not. So this reporter does not at all understand the grand strategy at play here.
Now why is Europe fighting monopolies. Because monopolies are not good for people.
And as a real democracy its government bodies
place the well being of their people ahead of maximizing profits for big corporations, which
is what the US government is in business of doing. As the ultimate evidence of this consider the
fact that American people don't EVEN get Universal health care or Universal Education. Whereas Europeans do, as a result of which they are getting wealthier & healthier all the time compared to Americans. Which point you can clearly see as per the falling Dollar compared to Euro.
Now we do not need to rely on the government alone to check in the dangers that monopolies pose to
all of us. We the people can and should also act to check them in. That is why I recommend these:
For desktop OS switch to Linux
For database switch to MySQL
For search engine switch to Anoox
Not only is that search engine useless and extremely slow, but they are a bunch of spammers who are trying to make money under the guise of taking back the Web for the people.
And of course the way to take back teh Web is to use Annoox. What a joke and it is just another small player trying to dethrone Google so they can covet what they have.
For this reason, I believe that your post is nothing but spm for Annoxx.
not good for people."
No it's because those companies have participated in predatory
lock-out practices.
Quote:
<<They should ship with more than ONE OS, with a program that allows people to test other OS's and see which one they like best.
At the least, put Linux and Vista on the same machine and let people make their own choices.
You are right in that Microsoft's only real competition, outside of the geeks and Mac addicts, is themselves, at least for OS's.>>
hard times, you have a case to get the charges against you
dropped. (And in Microsoft's case, I'd hardly call it really hard
times yet, just a few small scratches ? well, OK they are pretty
bad scratches due to their own failures, consistently poor copies
of other's products.)
You are basically saying "Law doesn't matter". I think there's also
a bit of anti-European hubris "how dare they find against one of
our companies". Well they were right about Iraq (the whole world
was except Bush, Blair, and Howard).
There is a case for compassion for criminals, but I can't agree
with your compassion for Microsoft, because most criminals
have to pay for their crimes.
scrutiny ? well there were very few companies around IBM and
the BUNCH. Not very many companies to offend. However,
engaging in anti-trust activities certainly went way back for IBM.
Watson senior came from NCR with Patterson and both of them
went to gaol for their anti-competitive activities with cash
registers. Watson learnt his lesson, not to not do it again, but
how to get away with it when he set up Hollerith (later IBM).
There was then the consent decree against IBM, and followed
with the later 13 year case which was dropped when Reagan and
the republicans got in. Another precedent, just string out the
case until the republicans get in.
You can read it all in Richard DeLamarters "Big Blue: IBM's Use
and Abuse of Power"
"involvement" (not "interference" as you infer) in such cases as
governments not able to "resist the temptation". That's not how
governments work. Governments are there to put fairness into law
and then uphold it. (If they don't they are voted out, or overthrown.)
- Competition or dirty tricks?
- by Ian Joyner September 23, 2007 6:06 PM PDT
- Well there's two things competition and dirty tricks. The Sherman
- Like this Reply to this comment
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- "It's not hard to lock lesser players out...
- by Commander_Spock September 23, 2007 8:07 PM PDT
- ... of the market when you have control of technology."; but haven't you heard/read about "Software Patents for Methods of Doing Business?A Second Class Citizen No More":
- Like this
-
Showing 1 of 2 pages (88 Comments)act is to have objective tests as to what is dirty tricks (which are
anti-competitive). Of course IBM and Microsoft have always bleated
that they are engaged in competition. Microsoft even has its
pathetically named Freedom to Innovate Network. It's not hard to
lock lesser players out of the market when you have control of
technology.
http://www.tms.org/pubs/journals/JOM/matters/matters-0012.html