JUSTICE TAKES ON MICROSOFT
Nov 10, 1997, Vol. 3, No. 09 • By BRIT HUME
BUY A COMPUTER RUNNING Microsoft's Windows 95 these days, and you get something extra. There is an icon on your screen that looks like a magnifying glass above a globe. It is labeled simply "The Internet." Activate it and it takes you through the process of setting up Microsoft's World Wide Web browser, called "Internet Explorer." Now in its fourth edition, Internet Explorer is a full-blown Internet-access program with all the bells and whistles expected of such software. There is no additional charge for it, and you don't have to use it. It does not prevent you from using a competing program, such as Netscape's Navigator, still by far the most popular Web browser and a major thorn in Microsoft's side. But a computer manufacturer that wants to include Windows 95 with new models cannot get the operating system without Internet Explorer. Furthermore, Microsoft does not allow manufacturers to delete either the program itself or that little icon from the opening screen, known in the world of Windows as the "desktop."
To users, the icon might look like a bonus -- a powerful program thrown in free. But to Janet Reno's Justice Department, it looks like an illegal scheme by mighty Microsoft to squeeze out the competition. The department charged Microsoft on October 20 with violating the consent decree it reached with Justice on anti-trust matters two years ago. "Forcing PC manufacturers to take one Microsoft product as a condition of buying a monopoly product like Windows 95," Reno said, "is not only a violation of the court order but it's plain wrong." Joel Klein, Reno's anti-trust chief, insisted, "We're not taking sides in a browser war." To him, the case is simple. "We think the evidence will show unmistakably that these are two separate products," he said, "Everybody knows you have an operating system and you have a browser." Those statements suggest that Reno and Klein have some understanding of what's now happening in the world of computer software, but not much.
For one thing, Microsoft's operating systems have always been a combination of basic software needed to make a computer function and additional stand- alone programs intended to enhance its capabilities. By the time Windows 95 came along, the list of stand-alone additions had grown to include two word processors, a modem communications program, fax software, electronic-mail software, and a set of computer games. A manufacturer that wanted Windows 95 had to take the whole package. From the earliest days of the personal computer, each successive edition of Microsoft's software has included new features that hurt, or even wiped out, the market for programs that other software houses had developed to fill gaps left by Microsoft. Software houses that had prospered handsomely swimming in Microsoft's wake did not like it when their markets suddenly shrank or vanished. Some have been complaining to the Justice Department for years. The department has been sympathetic, encouraged, some suspect, by the generosity many Silicon Valley firms have shown President Clinton's campaigns. Microsoft, by contrast, has refused to play that game, maintains only a small office in Washington, and does little lobbying compared with other firms of its size.
But the Justice Department has little to show for its pursuit of Microsoft, which dates back to 1993, when Justice took over a stalled Federal Trade Commission investigation. It isn't easy, after all, to get the courts to order a company to stop improving its product. But Justice seems determined to keep trying, and Reno, Klein, et al. clearly think they've caught Microsoft dead to rights trying to parlay its operating-system hegemony into domination of the market for Internet "application" software. It isn't nearly that simple. The reason is that Microsoft, for all its size and success, or perhaps because of it, has proved as slow to react to change in the 1990s as IBM was when it nearly drove itself off a cliff in the 1980s. In both cases, the problem was failure to recognize the importance of a new technology. In IBM's case, it was the personal computer itself. In Microsoft's, it was the Internet.
When Windows 95 first came out, that little Internet icon was nowhere to be found. The only path the new software offered to the Internet was through the Microsoft Network, the online service Microsoft had started in competition with America Online, Compuserve, and other such services. Microsoft thought these services were the hot trend in computer communication. The Internet, it seemed, was just one more place you could go through your online service. By the time Microsoft realized that the Internet, and in particular the World Wide Web, were the dog and the online services only the tail, Netscape had run away with the market for browser software.
For Microsoft, that was not the worst of it. A team of programmers at Sun Microsystems had developed a new programming language called Java that does something no other language can do -- create Internet-based programs that will run on any personal computer, be it a Windows-based PC, an Apple Macintosh, or a Sun workstation running the UNIX operating system. At first, Java was used mostly to add slick features to World Wide Web pages, such as icons that move and sports scoreboards that change before your eyes. But Java has proved capable of much more. Its applications, known as "applets," can do virtually any task, from word processing to spreadsheet accounting. They have vastly increased the potential of the Internet and have caused some industry analysts to foresee the day when you won't need to keep any programs stored on your computer except your Web browser. The browser will hold the key to all the software available via the Internet. The consequences for Microsoft and its operating software are obvious: The company's domination of the personal computer desktop is seriously threatened.
To say that Microsoft has been in a hurry to add Web-browsing capability to Windows 95 is a huge understatement. It is no longer a matter of competing for a share of the browser-application market. The distinction between browsers and operating systems has been blurred to the point where it's not clear where one ends and the other begins. After all, there is now an entire class of software that literally cannot be run without a browser that can handle Java. The Justice Department's claim that Microsoft is using its dominance in operating systems to stuff a separate Microsoft program down the throats of computer vendors and users misses the point. Microsoft is trying desperately to keep its operating system from becoming irrelevant.
Does that mean Microsoft is a nice company seeking only to compete fairly? Hardly. Look at the suit filed by Sun Microsystems against Microsoft in federal court in San Jose on October 14. Microsoft has been forced to acquire license to use Java in Internet Explorer, but Sun claims in its suit that Microsoft is using an altered version of Java in the new edition of its browser. The purpose, Sun alleges, is to force Java programmers to write programs that will run properly only on computers using Windows 95, thereby defeating one of Java's main virtues, its universality, and helping protect the dominant position of Windows 95. Microsoft does not deny it has made the changes, but claims it has a right to make them. Unlike the action brought by Justice, this looks like a case worth watching.
Contributing editor Brit Hume of Fox News also writes a syndicated column about personal computers.