Microsoft Monopoly?

"Frame Game" is an occasional Slate department based on the premise that who wins in Washington is often determined by how the issue is framed. The author neither endorses nor condemns any of the views expressed, however laudatory or repellent.

On Jan. 13, a federal judge will resume hearing the Justice Department's antitrust case against Microsoft. DOJ accuses Microsoft of violating a consent decree by leveraging Windows' 90-percent share of the computer-operating-system market to corner the browser market with its Internet Explorer. Microsoft says it's "integrating" IE into Windows. DOJ says that the two products are separate and that Microsoft is illegally forcing computer makers to load their machines with IE--first by threatening to deny them Windows, then by artificially repackaging the two programs as one. Microsoft faces similar charges from competitors, consumer activist Ralph Nader, and possibly several state attorneys general. The press has turned against Microsoft, even comparing it to the tobacco industry. If Microsoft is so shrewd and powerful, why isn't it winning this public-relations game? Because it's overplaying tactics and neglecting strategy on several fronts:

1Power vs. beneficence. Is Microsoft too powerful? Bill Gates, like Bill Clinton, answers ideology with economic practicality, touting the country's prosperity and taking as much credit as he can. Microsoft isn't committing the sins monopolies are supposed to commit, Gates argues. Windows is cheap, and IE is free. Lots of companies are selling software, their products are rapidly improving, and prices are falling. Thanks to high-tech capitalism, the economy is booming.

This change of subject has earned some good press: News stories have quoted analysts and consumers vouching for the quality and low price of Microsoft products. "Microsoft's Strategy Has Given Users Some Benefits," proclaimed a New York Times headline over a laudatory Associated Press story. But whereas changing the subject usually works in politics, it's not as effective in legal fights. The court's proceedings keep the media spotlight on the question of monopoly.

2Big government vs. big business. A well-known law of politics says that if the debate is about you, you'll lose. For that reason, Microsoft says the antitrust case is about governmental power. The company portrays Big Brother as the principal threat not just to Microsoft, but to free enterprise, consumer choice, and prosperity. Gates calls the choice between private and government control of software "the question at the center" of the case. Nathan Myhrvold, Microsoft's chief technology officer, conjures up the specter of a "Federal Bureau of Operating Systems." Conservative pundits have flocked to this argument.

DOJ antitrust chief Joel Klein offers the standard liberal rejoinder: Big business, too, can threaten consumer choice, and government is the only institution capable of stopping it. Klein has repeatedly described Microsoft as the enemy of "choice," declaring, "No consumer should be denied the browser of their choice because Microsoft made their computer vendor an offer they couldn't refuse."

Klein will have a hard time persuading the public that Microsoft is coercive, because the company exerts its market-share leverage subtly: It distributes IE free, negotiates with computer manufacturers to make IE the default browser on their machines, and links Windows to software and services it wants to promote. These methods allow Microsoft to argue that computer makers can add other browsers (such as Netscape's popular Navigator) and that users remain free to switch to them.

But Larry Lessig, the legal scholar enlisted by the court to sort out the case, is an expert on subtle methods by which software providers can steer consumer choices. He has argued that the cyberindustry's hidden "tyranny of code" can be more pernicious than the clumsy, overreaching state. These views bode ill for Microsoft.

3Public vs. private interest. While Microsoft started with the ideological advantage of not being the government, DOJ started with the ethical advantage of not being a private interest. Microsoft appears to have evened the score by persuading the press to link DOJ, Nader, and anti-Microsoft politicians to the company's competitors. When Sen. Orrin Hatch, R-Utah, held hearings on Microsoft's alleged misdeeds, newspapers noted that Novell, a rival of Microsoft, is a major employer in his state. The New York Times observed that at Nader's anti-Microsoft conference, "The panels were full of Microsoft competitors and lawyers representing them." AP reported that Netscape was "using" the antitrust case in a marketing campaign.

Microsoft has used the image of its competitors' political influence to portray its own lobbying as "self-defense." Microsoft spokesmen simultaneously profess 1) "reluctance" at being forced to stoop to lobbying and 2) chagrin at having done so "belatedly." Newspapers have bought both these spins, alternately praising and criticizing Microsoft's virginity, but accepting it as a given. (For Slate's view, see Jacob Weisberg's "Dear Microsoft.")