McNealy, speaking at the National Press Club in Washington DC, said Microsoft was leveraging its dominance into MSN, its server business, set-top boxes, content and computer games, and taking large stakes in AT&T, Nextel Communications and possibly DirecTV.
"We've got a problem right now. I think choice, and having consumer choice and innovation put back into the technology industry will be very, very critical," McNealy said.
A vocal supporter of the US Department of Justice's (DOJ) antitrust case against Microsoft, McNealy said he wouldn't oppose a settlement of the case "as long as they put consumer choice and innovation back into the system." Microsoft's appeal of the judgment issued against it last year by US District Court Judge Thomas Jackson will be heard in Washington at the end of February. But McNealy said to him it's clear that Microsoft's actions were illegal.
"I believe anybody who sits down and rationally takes a good hard look at (the case) comes to the same conclusion that the judge came to. This is clearly anticompetitive behaviour that is bad for the consumer, " McNealy said. "This is not an emotional issue, this is not a political issue. It's not a financial issue. This is absolutely about putting competition and choice and innovation into, I think, one of the most critically enabling technologies."
McNealy, who wrote an honours thesis on antitrust while a student at Harvard, also praised US antitrust law, saying it has kept the business climate in the country much more competitive than that of other countries. Though slow at times, the DOJ has always delivered and has always been effective in creating a pro-consumer competitive market, he said, urging the new administration of President George W. Bush to maintain that focus, not by creating new laws, but by enforcing existing regulations.