Microsoft Antitrust Update

You can't help but know that Microsoft and the Department of Justice (plus several of the states that joined in the suit) are attempting to settle their antitrust dispute. The rest of the states are holding out for a settlement with more teeth, or a continuation of the case. A few links from the past few days: The LA Times looks at the states still opposing Microsoft. Microsoft defended the settlement before a Senate committee, which was crippled by political maneuvering (see also the NYT story). The speech given by the CEO of Red Hat is online. Microsoft filed a brief with the court, unsurprisingly urging the court to accept the settlement. The Register has a story on the proposed settlement, which is available at the DOJ Antitrust website. Linuxplanet has some advice for people who want to comment on the settlement - you've got 60 days from November 28. Finally, Microsoft has named two people to help it comply with the proposed settlement.

Comments

Re:No Competition?

[ethereal]

Look at this the other way - pretty much the only successful competitor to Microsoft is giving away their product for free. The big reason that Linux is such a competitor is because the normal Microsoft tactic has failed: undercutting the competition by subsidizing their new market-breaker with money from the other parts of their empire. Also, there's no way for Microsoft to completely buy up Linux and Open Source, so they can't remove a competitor that way. You can't undercut or buy out "free", and so Microsoft is temporarily stymied, but they still have vast marketing and lobbying muscle.

Does it strike you as a particularly healthy industry if you can only gain marketshare by giving your product away? Is it reasonable that the only way to protect your product is to create it via a group of people who aren't even a company, just to avoid being swallowed by Microsoft?

Now, of course I know that RedHat charges money for some things, and they may even make a profit pretty soon, and Red Hat is in fact a company that Microsoft could buy. But Microsoft's competition isn't so much Red Hat as it is the Linux and Open Source movement. And taken overall, Linux and Open Source are largely free, and are largely producted by individuals and representatives of many companies who collectively could not be bought out. Those are the only reasons that Microsoft has any competition, and those reasons still do not add up to a healthy software industry.

Re:I just want to know...

[theantix]

I just want to know... how the DOJ (and by extension everyone else)can possibly see that MS is anything BUT a monopoly. They're growing, not shrinking, and the government seems to detect no problem with this.

For starters? The economic concept of monopoly power holds that a "monopoly" is not an absolute, it is a point on a scale. Where they are on the scale is uncertain.

Microsoft is not only company in any market segment they are in, thus they are not an absolute monopoly like the power companies are (and how the phone and cable companies used to be). However, because of their dominant share of the desktop PC and office suite market they have a fairly high degree of monopoly power. The barriers to entry in the industry are the entrenched applications using the the Win32 API, and the implementation of the MSOffice file formats. That being said, there are many factors that limit their monopoly power.

The internet and java are (were?) starting to make client less important. This limits the impact of the dominance of the Win32 API. Pirating is rampant. This limits their monopoly power over pricing especially in the home market (*YES IT DOES*). Crossplatform development is progressing as people can write QT applications that can be ported to several platforms including Win32. Again this reduces the the dominance of the Win32 API. Viable free alternatives are emerging (StarOffice 6, Netscape 6.1, Mandrake 8.1). Again this reduces the the dominance of the Win32 API. File format filters (In StarOffice6 for example) are getting extremely good at reading .DOC and .XLS which limit the impact of the MSOffice monopoly power.

The bottom line? Yes, Microsoft has a high degree of monopoly power, but it's not cut-and-dry about how much power they have. And it's certainly not cut-and-dry what to do about them either. Certainly it is important to limit the impact of their potential leverage (For example that Passport, Messenger, Hotmail, and MSN Photos are bundled with XP) from their existing markets, but don't think for a minute that it is simple. It's not.

Don't forget Office

[Darth RadaR]

One thing that would (IMHO) *highly* cut back on M$'s monopoly would be for the DOJ to make M$ open up their formats on the Office products. I can't count the times that I've told people to send me a document in text-only format because I'm not using MS Office and Star Office might or might not convert it properly.

If M$ is going to get any fair competition, they need to open their formats on Word and Excel so people are not forced to use MS Office if they have to work with those formats. That would be a big boost for the developers of Abiword, WordPerfect for *nix, Gnumeric, Star Office, etc. They wouldn't have to spend so much time on converters. They could spend their time making great office programs that work with anything someone sends you, and make the office application software battle a fair fight.