Dan Mayer

CS 2800

Microsoft Anti-trust

Wired had a large article about the anti-trust case. The article was called the Truth the Whole Nothing but the Truth. They article I believe first of is not the whole truth. The reported didn’t get to talk to the Microsoft people near as much as the anti Microsoft groups. The article in general I believe is quite biased against Microsoft. Microsoft made some dumb moves if you take the case as straight legal challenge. When they had advantages they didn’t settle with minimum losses. To understand why this wasn’t just a case where they wanted to get through the legal problems and get back to business you have to understand more about Bill Gates and Microsoft.

Bill Gates worked with IBM when it started having all it’s legal problems. They were working on a deal with the dos OS and working on OS/2. IBM did everything to not end up in an anti-trust case. Because of all the deals IBM made it was weakened so much that the government essentially destroyed it. IBM still makes money and still is in the market, but no one in the industry fears IBM anymore. No one worries about releasing a product that goes against IBM. They are just a company that makes products and can’t innovate anymore.

Bill Gates watched IBM crumble to nothingness, and swore he would never let that happen to Microsoft. That is why Microsoft has fought everything to regulate its company. Microsoft until the problems started never really had a legal team. It was all engineers and programmers. Always work on developing products. The article explains that Microsoft’s legal problems really weren’t from the government. Sun Microsystems, Netscape, AOL, and many other companies were lobbying against Microsoft. Sun spent over 3 million dollars and spent 6 weeks and created the entire case for the government and got statements from all the big companies that disliked Microsoft. They handed the info straight to the government and just said do it.

This is when I will leave the article for a while to discuss what it has come to mean if you are successful in America. Becoming a successful person is not a problem except that you are in the public eye and your past becomes public knowledge and your dirt is exposed. You have nothing that is truly private in your life anymore. A successful company is now considered a problem. It is attacked like a disease and it never helps the consumer anymore. Maybe it has helped the consumer in some ways, but lets look at a few cases most of the time it solves nothing. AT&T destroyed, regulated, and broken up. We have higher prices than many countries in the world and a system that is always trying to change you back and forth with calling plans so complicated that many people just give up pick one and pay for one. My parents for instance are so sick of switching that they now just ignore all the new deals and stay with their older higher prices. They would rather be left alone then have to jump around all the time. Cell phones for the whole house will soon be cheaper than having old phones because the system got so messed up that it is simple to just move to a new technology. Most people agree that we have been worse off after the breakup. IBM went from a powerful leader of the industry to nothing but another company that makes the same products as others. They lost there ability to innovate and they have pretty much now just followed the flow. Before this IBM made the market what it was, pushing up the bar for what other companies would have to do.

Lets look at successful companies outside our country. Sony for instance has products in ever market. With Sony’s power products have pushed through products that are not as good as competing products with their influence. Sony recently dominated the video game market that now is as lucrative as the movie industry. Sony destroyed Sega and Nintendo pretty much in on attack. They could sell there system for a huge loss to get more users and make money of games and accessories. The competition doesn’t have the marketing purse that Sony does. Nor can they sell there systems at a loss of over a hundred dollars a system. Sony is involved in about every electronic imaginable. Currently the memory stick which is a more expensive and not as fast of a medium for portable devices is succeeding in the market because Sony release all of its products in one year using that medium. Other companies can license the memory stick from Sony to have it work with there devices. Sony has cornered a new product where it can now just pick up a little money from every company that ends up forced to conform to a worse product for compatibility. They point is nothing is going to slow this company down. Sony will not have the government declare it a monopoly. The new economy is a purely global market place. If you get big you have to be working global or a company with the same product in a different country will take your market share. The global market place has nothing to truly monitor it.

The US does regulate and monitor US companies. I believe now that in the global economy it is a weakness and a large one to be an American based company. Especially in technology where many of your products don’t need to be shipped and can avoid import taxes. Microsoft would still be thriving if it were Sony. Even if they eventually win their case they have been weekend so much and lost many of the top and best employees cause they don’t want to deal with the government. Should we really be weakening our companies’ chances as becoming a global competitor leading a global market? The US has had a very good economy of late; I would claim that much of that is due to the amount of technology in our country. Technology has brought in billions of dollars. The US is the largest software producing country in the world. We have been able to control the market and bring much of the wealth from it to our country. The Internet is now over half used by non-English speaking people. Yet the standard for Internet coding and design is all based on the English character set. The power to keep this market mostly in the US is directly due to Microsoft. Most applications are designs for windows users and windows is designed in English to it is easier to program in English with it. The standards for pretty much any technology involving the PC has been affected by Microsoft. America right now controls the standards.

Microsoft may have hurt some competition but all companies try to hurt their completion. The government believes this is ok for small companies but not for large companies. As the large companies in the world grow larger and larger and become more of global powers, if the US limits the size a company can be while still fighting completion and not just settling in with its one product and not branch out any more. Eventually the US will be only small companies compared to the global powers. Our companies will not be able to truly compete on the global market place for very long. Microsoft was not ruined because of bad software and bad business. It was ruined because people want to have there time to make the big money. Not one company could truly release a product that was much better than anything Microsoft did. Or Microsoft would release a equally good product quickly. No company has truly offered us a reason to leave Microsoft. It is a good business with go products, the best in the world currently. Microsoft was a business involve only with business. Other businesses that couldn’t beat it on the market place adopted to become political dumping money in campaigns, lobbyists, and lawyers. That isn’t good for the consumer. Now these companies products will cost more because they have to pay for development and legal fees.

The US government limits how much a company can expand. The government wants it to expand become completely profitable but not to ever enter any other markets after that. This hurts innovation more than the competitive practices between companies. Since the trial calling Microsoft a monopoly, AOL has become close to becoming more powerful than Microsoft with the merger with Time Warner. Macs in the last few years have come back on the marketplace. Many companies have successes as start ups. Competition has brought Sun, AOL, and AOL owned Netscape together to make some products against Microsoft. They have also tried to make agreements to stay out of each others markets while only attacking markets controlled by Microsoft. These companies are engaging in acts to destroy competition and are powerful alone before they join forces. Should the government interfere? No, if they make products that do better than Microsoft in any market then the consumers win by getting a better product. If they come close it forces Microsoft to make it’s own products better. The government shouldn’t involve itself in how large a company can become in the new economy.