4
NEWS
January 12,2000* the Seahawk
Microsoft trial threatens its dominance in tlie computer industry
. . . , -.1 XT XT... 4
by JAMES HILLS
Correspondent
In the current case of US vi.
Microsoft Inc., computer giant
Microsoft is being challenged as acting
as a monopoly over the computer indus
try. While there are conflicting views
as to why Microsoft has retained con
trol of the country’s computer enter
prises, the trial’s decision may put re
strictions on the corporation’s power
and hinder its dominance. Microsoft is
also facing strong competition from the
new operating system Linux, which is
quickly gaining popularity.
On Nov. 5, 1999, Judge Thomas
Penfield Jackson released findings stat
ing that Microsoft was guilty of not only
being a monopoly but of using its power
to protect its monopoly. Jackson feels
that both consumers and other computer
firms were harmed as a result of these
efforts as innovation was stagnated.
“Three main facts indicate that
Microsoft enjoys monopoly power,”
Jackson said. “First, Microsoft’s share
of Intel-compatible PC operating sys
tems is extremely large and stable. Sec
ond, Microsoft’s dominant market share
is protected by a high barrier to entry.
Third, and largely as a result of that bar
rier, Microsoft’s customers lack a com
mercially viable alternative to Win
dows.”
While Microsoft’s dominance over
the computer industry has been obvi
ous, the impact this control has had on
consumers and other industries is still
under debate. While Jackson thinks
Microsoft has retained its control
through unethical means, Microsoft
CEO Bill Gates thinks that the
company’s success is a reflection of its
popularity with the public.
“Many of these actions have harmed
consumers in ways that are immediate
and easily discernible. They have also
caused less direct but nevertheless se
rious and far-reaching consumer harm
by distorting competition,” Jackson
said. “Microsoft has demonstrated that
it will use its prodigious market power
and immense profits to harm any firm
that insists on pursuing initiatives that
could intensify competition against one
of Microsoft’s core products.”
In a recent press release. Gates
countered this argument saying,
“Microsoft’s products are popular be
cause we’ve focused on our customers
and innovated to meet their needs.”
As an example of Microsoft’s mis
use of power, Jackson cited Microsoft’s
on going battle with Netscape Naviga
tor. Microsoft recently created its own
product, Internet Explorer, to compete
with Navigator and, according to Jack
son, then proceeded to force original
equipment manufacturer (OEM’s) com
panies such as Dell to stop distribution
of Netscape in lieu of Internet Explorer
in exchange for benefits from Microsoft.
“Microsoft has largely succeeded in
exiling (Netscape’s) Navigator from the
crucial OEM distribution channel,”
Jackson said.
The Department of Justice trial is
now on hold as Jackson determines what
actions the government should take
against Microsoft. Among the options
being discussed is the potential separa
tion of the operating system from the
rest of the company. In this move, the
Department of Justice hopes to mini
mize the impact of Microsoft’s contin
ued dominance in the operating system
market. A decision is expected some
time this year, and threatens to set a pre
cedent in how the government will in
teract with New Economy industries.
Perhaps a greater threat to Microsoft
than the United States Department of
Justice is the Linux Operating System,
which was created by 30-year-old Finn
ish programmer Linus Torvalds.
This operating system poses an im
mense threat, as it is not dependent on
a single corporation’s funding. Instead,
millions of individual programmers
from across the world have come to
gether to ensure Linux’s future. Cur
rently no less than ten companies rang
ing from a few programmers in a
German basement to the 15 billion dol
lar Raleigh, N.C., based Red Hat, Inc.
provide distributions of Linux on the
open market.
This power struggle gained momen
tum last week when Corel, the makers
of Word Perfect announced that their
distribution would provide users the
unique ability to run Windows applica
tions such as Microsoft Word and Excel
on their Corel Linux desktop.
“With the integration of GraphOn
Bridges into the Corel Linux OS it will
be easy to enjoy the benefits and high
reliability of Linux while having access
to the most widely used Windows ap
plications,” said Michael Cowpland,
president and chief executive officer of
Corel in a recent press release. “This
will enable organizations to mix Linux
and Windows desktops seamlessly
which is a prime goal of Corel in our
Linux development.”
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