Does Microsoft Play Fair?
The committee: Steve Ballmer, James Fallows, James Gleick, Peter Huber, and Roger McNamee.
Herb Stein Wednesday 6/19/96—8:03 a.m.
The computer is rapidly carrying us into a whole new world of personal and business life. In this new world the Microsoft Corp. is a dominant player. Almost all of the personal computers now in operation or being built run on operating systems produced by Microsoft--MS-DOS, Windows or Windows 95. Almost all new software applications--word processing programs, spreadsheets, CD-ROMs, Internet access programs and others--are made to run on Microsoft operating systems. A large but not dominant part of this software is made by Microsoft itself--Microsoft Word, Excel, and Microsoft Internet Explorer, for example--and the rest is made on license by Microsoft.
This pervasiveness of the Microsoft product has many advantages. It helps the novice to learn the system, it permits easy communication between computers and it assures the availability of a large, varied supply of usable software. But it raises many questions.
Can and does Microsoft use its present dominance to prevent the development of new, and possibly better, operating systems and applications?
Does the method in which Microsoft licenses its operating systems to manufacturers of computers keep other producers of operating systems from competing? In 1995 Microsoft entered into an agreement with the Department of Justice to refrain from certain actions that were alleged to have that effect, but that has not quieted complaints that the methods still in use have the same anti-competitive result.
Does the bundling of Microsoft applications with the Microsoft operating systems give these applications an advantage and inhibit the development of superior applications?
Does Microsoft's dominance as provider of operating systems enable it to neglect the interest of consumers in the most efficient and reliable use of their equipment?
Is there a possibility that Microsoft's present position and resources will enable it to dominate the future world of communications as AT&T once did?
On the other hand, supporters of Microsoft point out that it has been a leader in a process that has given businesses and individuals power to write, to calculate, to communicate and to obtain information that was unimaginable even a few years ago. That power has been provided at dramatically-falling prices. New firms are entering the software market every day. Technological advance already in sight may undermine whatever dominance Microsoft now has. The ability to bundle applications with the operating system may lose its advantage when applications may be easily downloaded from the Internet. In fact, the disk operating system may be bypassed altogether, with the user getting everything over the Internet.
How valid are these complaints and claims? What, if anything, needs to be done? During this next week these questions will be discussed by five observers with strong opinions about Microsoft, from every point on the spectrum.
Herbert Stein, a senior fellow at the American Enterprise Institute, was chairman of the Council of Economic Advisers under Presidents Nixon and Ford. He died in September 1999.