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Reno's Fight

Top attorney right to take on Microsoft

By Theo Gantos

Janet Reno bolstered her image as a no-nonsense, gutsy, Justice Department head when she publicly assailed Microsoft for anti-competitive activities. She wants a million a day in fines for violations of the 1995 consent agreement that abated anti-trust action against the software giant.

Many professionals in the computer industry have had a love/hate relationship with Microsoft. They have become dependent on their products, but the company has become ever more concerned with dominating their markets rather than with delivering excellent products and solid customer service.

Microsoft released its Windows NT server operating system several years ago to a lukewarm reception against then-dominant Novell Netware. In an effort to capture market share, Microsoft priced its product at a very low flat-rate rather than per-user as was the standard practice. In effect, this amounted to what's known as "dumping."

The U.S. computer memory chip and LCD screen makers have had this tactic used against them by the Asians successfully. Here's how it works: Say you want to control a market for a particular commodity. Price yourself so low as to kill the market for your competition. Once the field is cleared, you then can charge whatever you like.

Microsoft forecast a trend toward the use of web-technology software in PCs. This was seen as a shift away from the operating system as the center of the computing universe toward the web browser. Microsoft executives became determined to control the Internet market and eliminate this long-term threat to their Windows monopoly. They struck a deal with Sprynet, who had an enhanced Mosaic (predecessor to Netscape) Internet browser. They relabeled it Microsoft Internet Explorer and began giving it away for free. They even included it with Windows 95. Still, people continued to use Netscape, paying $30-40 for it in preference to the free Internet Explorer.

It seems obvious that Microsoft's intent in giving Internet Explorer away is not an altruistic one, but to drive Netscape out of the browser market. This is the point where capitalism and competition cease to become positive benefits to free trade. When a company like Microsoft, with one monopoly, rather than trying to compete in new markets, uses its present position to subjugate the market, it destroys the spirit of free enterprise. The intent is to remove the customer's freedom of choice, not to offer superior alternatives. This is not only bad for business, but is illegal. Janet Reno is right to stand up to Microsoft.

Theo Gantos is president of TEKA, a technology consulting firm. Contact him: