Microsoft’s business practices are finally catching up with them. In 1994, the federal government made an agreement with the company that stipulated Microsoft was not to bundle its products together. A Justice Department lawsuit charging Microsoft with violating this federal agreement and owning a monopoly in the software industry is slated to begin in September. Twenty states have joined that suit. In response, Microsoft continues to assert its business practices are neither monopolistic nor unfair. That assertion is incorrect. The bundling of Internet Explorer with its Windows 98 operating system is most definitely monopolistic.
The company contends that it planned to include an Internet browser on Windows as early as 1993, before the founding of its main Internet competitor, Netscape. This logic is a poor defense. The relevant issue is that Internet Explorer is now bundled in Microsoft’s Windows 98, effectively creating a monopoly. Defining a monopoly involves a complex evaluation of business practices and market share. Microsoft’s Windows operating system is currently installed in more than 90 percent of the world’s personal computers. While Windows’ market dominance was won by creating a product that attracted consumers with its ease of use and multiple features, consumer choice does not factor into Microsoft’s new browser.
Microsoft Explorer is an Internet surfing program that competes directly with the renowned Netscape browser. Unlike Explorer, Netscape is sold independently as an Internet browser and does not have an allegiance to any one operating system. When Explorer was released, it should have been placed on the market as a direct competitor with Netscape and other Internet browsers. Instead, Microsoft decided to include Explorer as a part of Windows 98. The vast majority of personal computers sold today already have Windows installed as an operating system. This effectively gives consumers Explorer without cost. If consumers prefer Netscape or another Internet browser, they must purchase and install it on the Windows system. Netscape could give its product away for free and still not have the user share of Explorer because of Windows’ existing market dominance.
Those who oppose federal intervention claim that the technology industry will even itself out through free competition and new innovation. Bill Gates himself has stressed the vulnerability of Microsoft in an era of burgeoning technologies. New universal languages and platforms are promising a future where operating systems are unnecessary, but these technologies are in the early stages. Until consumers are able to work without operating systems, Microsoft remains the market leader. With this leadership comes the responsibility to allow others to compete.
Government regulation of Microsoft will allow the free market to decide who deserves the top spot in the software industry. Without federal intervention, new products will not have a chance to compete against any application bundled with the Windows operating system. Microsoft is violating agreements made with the federal government by bundling Internet Explorer with Windows 98. The corporation needs to separate its Internet browser from Windows and allow the consumer to make a choice.