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November 14, 1999

The Microsoft Monopoly - Remedies & Reparations

Any decision on what action to take in the Microsoft (MS) monopoly case needs to take into account two factors - what action will serve to eliminate MS's monopoly and its anti-competitive behaviour, and what can be done to deny the company the rewards it has gained so far from its wrong-doing. It should be remembered that MS has used its market power not just to force Internet Explorer onto consumers, but also to establish significant (and sometimes monopolistic) markets for other products (such as MS Office,) for which it can charge a premium price. MS's dominance in the wider software market has hindered the success of other operating systems (OS's) - which now must rely on MS's good will (in offering software for their platform) in order to provide a product truly competitive with Windows. Those OS's which have survived do so not because they offer compatibility with Windows, but because they are considered superior by their users. To do more than survive they need major software developers (in particular MS) to develop compatible versions of their products. Software developers on the other hand are reluctant to spend the necessary time and expense for an OS that lacks significant market share (such as MS Windows). Hardware developers are in the same boat - relying on MS to develop a version of windows for their platform or developing a system based on the old Intel standard (Intel is in the same situation). More capable platforms are restricted largely to the more adaptable Unix OS (with its many competing versions), limiting their application and market and therefore increasing their expense. Without MS we may well have had cheaper and far more powerful PC's offered to the average consumer. This of course goes far beyond anti-competitive behaviour but is part of the problem created by MS's monopoly powers.

I believe the only solution is to take away Windows from Microsoft altogether. To break the monopoly it needs to be in the hands of at least three independent companies (divested from Microsoft?) with a published, public API set in the control of a separate industry standards body. This body would control additions to the OS and certify both OS's and applications as Windows compatible. This would create a competitive market for the OS (with the possibility of new players entering), allow unimpeded innovation and development of the OS, facilitate portability of the OS onto non-Intel platforms, and even allow other OS's to offer a certified environment to run Windows applications. No longer tied to Microsoft for the OS PC suppliers should find it more attractive to offer a broader range of applications pre-loaded onto their PC's - forcing MS to be more competitive on price and features. As the PC industry shows nothing fosters innovation (and low prices) like competition.

2000, Mar 17 1999, Dec 3 1999, Nov 14 1999, Oct 26
1998, Jan 1