What I Would Do About Microsoft

Judge Jackson should make the company play fair without punishing consumers

Some time this fall, Judge Thomas Pennfield Jackson will finish reading as much as he can stand of the record of U.S. v. Microsoft. After wading through summaries that run to more than 1,200 pages, he should be ready to reach some conclusions. If, as seems likely, the judge finds that at least some of the government's charges are valid, the next phase will be a debate over how to prevent future Microsoft misconduct.

This is where you should start to pay attention. The 15 months of motions, depositions, and testimony in the case have been enlightening, sometimes amusing, and occasionally scary. I thought the Justice Dept. made a strong case that Microsoft behaved very badly, bullying competitors, customers, and "partners" alike.

The case that this conduct hurt consumers, however, is much weaker. Even in the government's own "Proposed Findings of Fact," Justice lawyers make only a lame argument for adverse impact on consumers. Their conclusion that "Microsoft has deprived consumers of the possible development of greater choice in operating systems" doesn't put the software company in the league of the Oil Trust. Given the slender evidence of damage to the public, Judge Jackson should be careful not to come up with a cure that is worse for consumers than the disease.

I think everyone would benefit if Microsoft were barred from many of the practices described in the trial. For example, computer makers should be free to set up Windows any way they like. If customers don't like the opening screen or if they object to the presence or absence of certain icons, they can buy someone else's computers. It's not Microsoft's problem, and the company should not be able to impose its will on manufacturers. Microsoft has eased some of its most onerous licensing terms, but I'd like to see the changes made mandatory.

To maintain consumers' freedom of choice, Microsoft should be made to stop coercing software companies and Internet service providers into favoring Microsoft products over rivals'. If an ISP wants to make Netscape Navigator--or NeoPlanet or Opera--its default Web browser, that should be a matter between the service provider and its subscribers. Similarly, software companies should be free to use Apple Computer's QuickTime or RealNetworks' RealAudio instead of Microsoft formats without fear of retaliation.

BEST BROWSER. Many Microsoft critics want to go further, however, restricting the features that Microsoft could include in operating systems, even making the company remove its Internet Explorer browser from current products such as Windows 98. I believe this would be a terrible disservice to consumers. Software should be designed by software companies, not government committees. Besides, many of the features Microsoft has added are useful. Internet Explorer 5.0 is the best browser around, both faster and less crash-prone than Netscape's.

Furthermore, events have proved that competition doesn't end when Microsoft incorporates a feature. America Online Inc. thrived because it offered a better product than Microsoft Network, despite MSN's prominent place on every Windows machine sold in the past five years. RealAudio and QuickTime--both superior formats--have prospered despite competition from the built-in Windows Media Player. Consumers are neither stupid nor slaves to Microsoft's whims.

Any resolution of the case should ensure that Microsoft plays fair. But it should also leave it free to be an innovative competitor. That's the best way to look after the interests of consumers.

Questions? Comments? E-mail tech&you@businessweek.com or fax (202) 383-2125

Before it's here, it's on the Bloomberg Terminal.