Reaction to latest Microsoft antitrust suit
- — 19 May, 1998 21:49
The safe and most common reaction was "no comment," but the filing of antitrust litigation against Microsoft has even the company's detractors worried that a potentially disruptive precedent has been set.
"An [antitrust suit] is a dangerous precedent in that it opens the door to any software company that has a product competitive with any included accessory within Windows," said Mike Drips, a consultant for several Fortune 500 companies. "It gives them an excuse to complain about being coat-tailed into the box."
While saying that some sort of oversight of Microsoft likely is necessary, some observers criticised that the government investigators, particularly state officials, should stick to important issues and stay away from areas that appear to be meddling in software design -- a key defense of Microsoft's.
"It does a very hard thing: it makes Microsoft a sympathetic character," said Dwight Davis, Washington-based analyst at Summit Strategies.
Still, the power of Microsoft clearly has been a force to be reckoned with, and that keeps some observers keen on some kind of regulation.
"The software industry is one of our more vibrant industries and it is great to see strong entrepreneurs. But where you get concerned is when one gets too big for his britches and had wide spread influence over the market. My first choice would be that it could be self policing. The second choice is for something like what has happened now," said Frank Petersmark, assistant vice president of information technologies at Amerisure in Michigan.
The US Department of Justice, a bevy of state attorneys general filed action against Microsoft to curb what they called predatory business practices, a violation of federal and state antitrust laws.
Microsoft wasted no time in portraying innovation as the biggest victim of the government action.
"How ironic that in the United States -- where freedom and innovation are core values -- these regulators are trying to punish an American company that has worked hard and successfully to deliver on these values," said Chairman and CEO Bill Gates in a statement.
"We believe an anti-trust lawsuit is counterproductive, costly to the taxpayers and ultimately will be unsuccessful in the courts," said Gates."The government's action today is a step backward for America. This suit is all about Microsoft's right to innovate on behalf of consumers -- the right to integrate new technologies into Windows as they develop."
Netscape Communications, however, a company that prodded the government to act, claims that Microsoft worked mightily to thwart its chances in the marketplace.
"We believe government investigators have examined the case thoroughly and would not have brought action against Microsoft unless their investigations had uncovered serious violations of the law," said Netscape in a release. "For the OEMs, this case can mean the return to a time when they had more control over their own products ... for consumers, this case will mean protection of their right to choose what they want to use on and access from their computers. For software developers, this case will mean a renewed incentive to innovate, without worry that their innovations will either be coopted or destroyed by Microsoft. For Microsoft, this case can mean a return to a time of competing on the merits, indeed on the basis of their innovations, rather than on the basis of their monopoly power and leverage."
Most vendors, however, were keeping a low profile over the suit and letting the punches land where they may. Lotus and Novell, often quick to compete with Microsoft, had no comment on the litigation.
"We have been absent from all this on purpose -- we did not go to the pep rally in New York, we have not been very visible in the press. All we have done is offer to Aptiva users free upgrade to Win 98," said a source close to IBM.
"Even Microsoft doesn't expect a tremendous amount of sales in the first year of Win98. So how could the OEM be all that upset about this suit?" he asked. The bigger issue is: is government getting involved in technology and dictating product design to companies."
A spokesman for PC vendor Dell said that they didn't perceive themselves as benefiting from such litigation.
"We have been pushing for the timely release of Windows 98. We do not see why that should be delayed," said T.R. Reid at Dell. "Customers and the industry have been planning for it and we would like to see it released as promptly as possible.
"In terms of the broader issue between DoJ and Microsoft, we have deliberately stayed out of that. That is not, at its core, a Dell issue. We are watching it with interest like many others, but we will not comment on that specific dispute. We'll wait at the outcome and se what tools are available and what customers want and take the appropriate," said Reid.
The intrusion of the government was upsetting to some. Ed Yurcisin, director of technology services at Microstrategy, defended Microsoft.
"The big thing is Microsoft has a lot of little battles it gets to fight," he said. "They've got a lot of people going after them."
He charged that Netscape also has been trying to dominate the browser market, by expanding its browser product line. Microstrategy uses Microsoft is Visual Basic and C++ programming tools and also has integrated its products with the Microsoft SQL Server database, Yurcisin said.
A data warehouse application developer at a large health care concern said developers would like to see more competition, to keep prices down. Microsoft has perhaps been a little heavy-handed, said the developer, Thomas D. Palmer, director of application development at Premier.
But Microsoft's power may be a bit illusory, similar to IBM years ago, he said. "Everyone was down on IBM in the 70's," Palmer said. "[The industry was] looking at the federal government cracking down on IBM when that really wasn't necessary," as shifts in the marketplace subsequently reduced IBM's clout, he said.