The Case Against Microsoft

What follows are excerpts from postings I've made to Usenet. I shall edit and re-work the raw material as I have the time.

(All posted in early November, in the days following Judge Jackon's Findings of Fact)

I read 75% of the decision (from top to bottom; skipped the last part), and found some questionable areas, but the overall thrust of it to be accurate. And it does seem to me that the DOJ won on every count -- I don't see anything in the findings of fact that goes against the DOJ's case.

The news coverage is emphasizing the long time frame for resolution, which means MS stock will not be hammered.

It's unfortunate. When the appeals court overturned the restraining order hampering the release of Win98, IE was still well under 50% of the browser market. It's now over 60%. Cause and effect.

I'm glad the court found against MS, but I don't think it likely that anything is going to happen, precisely because the vast majority of people (historically including a large number of folks right here in this newsgroup) just don't understand what the issues are.

MS is arguing on "innovation," while the court said their innovation was fine -- what was *not* fine was all the manipulation they did of their competitors to make it impossible for them to compete on an even footing. The findings have example after example after example of acts by MS that are anti-competitive and used MS's status as supplier of a monopoly OS to attempt to force others to acquiesce to MS's wishes.

In the end, MS stock is going to continue to fetch a good price and the PC market is going to continue to go to hell in a hand basket as MS continues to fuck us over with its sub-standard products that further their agendas more than they solve the needs of their customers.

The crucial findings in regard to what constitutes MS's market are pretty darned solid. The findings of fact in regard to MS's incredibly dirty business practices are unassailable.

>I have two firm
>beliefs, that people will always best look out for their own
>interests by voting with their hearts and their pocketbook. . .

How, exactly, does one do that in this case?

Switch to Linux? That's voting with the pocketbook, and you'll put yourself out of business by doing so.

MS has limited consumer choice while offering inferior products and obstructing the freedom of others to offer alternatives.

This is a good thing?

>Somewhere I read that it cost the DOJ  $9 million for this finding
>of fact.

On Nightline last night, the figure for the entire case up to this point was $7 million.

>A steep price for facts that are obvious to any moron.  The
>billion dollar question (in Gates case, still a cheap price) -
>what to do about it.

Well, that's the way the legal process works. You've got to define the obvious.

>The findings that Microsoft is a monopoly and has used it's
>monopolistic position to crush competition is pretty much a given.
> How it has hurt consumers is a tougher question - since we will
>never know how things would have been if another company (or
>companies) controlled the desktop operating system.

But the decision emphasizes all the various areas in which MS obstructed other businesses that were trying to offer alternatives to their customers. It doesn't *matter* "what might have been" -- the evidence that MS over and over and over again attempted to strong-arm competitors to promote its own products is sufficient to demonstrate a pattern of unfair business practices. If fair competition is seen a the greatest good, MS has clearly worked systematically for years against that.

>Breaking up MS into three companies may not be so bad - and may
>actually be a plus for Access developers. More competition may
>create more reliable new versions.  Maybe, someday, we will find
>our beloved development system on other OS platforms.  Nah

It's a lot less likely that installing a new version of IE would break your Access app.

Who, besides Microsoft, has "gotten Windows right" in the first few releases? Remember WordPerfect? It took three releases before they got a stable version that "got Windows right." This is more evidence that MS's applications division had an incredible advantage over all of its competitors.

And PDOX/Win was the very first Windows DBMS (maybe SuperBase came a little before or about the same time, but it was much less Windows-like than PDOX/Win). I can't help but believe that Microsoft was watching PDOX extremely closely, and learned some important lessons. MS had the advantage of no installed base and the advantage of being MS, having VB as a platform to build on, and of having a compelling Office suite to market it in. I don't think it was Borland's fault that they lost out, except insofar as they never built a full office suite (no word processor).

There are no necessary >resources (like land or oil) to enter the market that MS has a >monopoly ownership of--it is not able to block entry into the >market.

Judge Jackson begs to differ with you on this one. The first third of the finding concerns itself with the definition of the market that is relevant to MS. The judge takes pains to limit it to OS's that run on Intel hardware and that are desktop OS's. He explicitly eliminates Linux as a viable threat because of the high cost of moving to it. Likewise with Mac OS and network computers. And the MS-claimed "threat" from Internet appliances and palmtop devices is also disposed of by the judge as simply not comparable and not part of the same market.

The point here is simply not what MS did to acquire their monopoly, but what they did in addition to a certain amount of "innovation" and improvement in their products: they did their best to stifle competitors.

That's the issue here.

MS's own innovation is a red herring, because all that matters is:

1. MS has a monopoly.
2. MS has used that monopoly to kill other company's products.

>Of course, there's a powerful advantage to the market share MS has
>built-up, so that the competition would have to be more than
>merely superior or MS would have to make a fundamental mistake (as
>its competitors did).  But there will be *plenty* of opportunities
>for either one of those things in the future, given the rapid
>technological change in this industry.

I very much doubt this without an expensive paradigm shift that will mean we'll all be buying new hardware and software.

The judge carefully considered the COST of not acquiescing to the MS monopoly, and found in all cases that the cost of switching was far greater than the price of staying with MS. Since MS was systematically neutering its competition (IBM, Netscape, Sun), using unfair business practices, we are pretty much stuck with MS at this point.

Unless we want to start everything over from scratch.

And the judge recognized that starting over from scratch is not a valid business alternative.

>There were plenty of opportunities for other companies such as
>Apple or IBM to be in Microsoft's position, but they blew it.  (I
>still remember getting newsletters from Pete Peterson explaining
>why WordPerfect users did not really want a Windows version!)

Well, there's a good reason lots of companies had difficulties producing Windows applications: MS owned Windows and had the inside track.

>There's even a good argument that the government's antitrust case
>against IBM is the most important cause of the rise of MS. . . .

For a laugh, I'd like to hear that one.

> . . . But my main objection is
>that I don't think it's a good idea to demonize and label as
>"predators" people who are in some sense the pillars of the
>community without some compelling need to do so, and there is none
>here. . . .

Well, read the decision.

If the corporate behavior described there is what you would say is characteristic of "pillars of the community," then I'll be sure to mark you down as someone with whom I'll never do any business.

> . . . It's nuts to punish the
>company that has made us so prosperous compared to other
>countries.  Or do we want to go back to envying the Japanese?

No, it's actually quite reasonable: MS prospered through unfair advantage. They should not be allowed to get away with that.

Why did installing Office97 cause Windows Explorer to behave differently? Why does installing O2K (IE5) cause my Windows to behave differently? Because MS *does* integrate certain kinds of things quite heavily, and uses application upgrades to upgrade the OS.

If the OS and the applications came from different companies, the app wouldn't be changing the underlying structure of the OS. This is the fundamental weakness of Windows from the get go, and it's by design in order that MS can give its own application division an unfair competitive advantage.

I think this is unfair.

I think what the court would consider an ideal world is one in which everyone on the playing field had the same chances. In the MS world, MS's applications had an unfair advantage, by virtue of the interconnections withing MS and the sponsorship of the company that controls the entrance to the desktop. MS applications can always take better advantage of the OS than anyone else's, and MS used it's control of the OS to shape the browser and office suite markets to its advantage (the section of the findings on the IBM Win95 licensing negotiations will make your hair stand on end).

Why can't anyone else produce a competitive Office suite? Are they all incompentent? Or does MS have a structural advantage that is decisive?

What is described in the finding is a PATTERN of unethical and, I believe, illegal strong-arm tactics used over and over by MS to make their competitors bow to MS's will. Under no circumstances is this something that I think should be emulated by anyone.

MS is the most morally sick and cynical company operating in the US that I'm aware of. They don't *want* fair competition, because their own products can't compete on the merits. Instead, they build structural advantages for their own products, built on their monopoly, and then try to shoot down everyone else's products from their pivotal position of control.

I think it's absolutely disgusting that anyone could claim that decrying the corporate policies of MS's management (as represented in the actions outlined in the finding) could lead to the rise of cynicism. It's the *allowing* of such practices that is cynical, the praising of companies that succeed by all means, at all costs, that harms the ethical fiber of a culture.

For the record, I don't like using the word "evil" in this discussion. My guess is that 100% of the people who do the actual work at MS, the project managers, the coders, the idea folks, are completely ethical. It is MS's management that is the problem, going right to Bill Gates. Those people are unethical and they've caused the company to do things that I believe are completely despicable.

This is no real reflection on the integrity of the actual non -management employees, however, who, it seems to me, are doing their best, which is often quite good. But their best efforts are also sometimes torpedoed by management decisions (just like in any large company).

It's the pattern of management practices that I think should be punished.

>Would we have been better off if another company controlled the >desktop operating system - like IBM? Would such other company >have been more consumer friendly than MS?

I don't think that's a relevant question at this point. It's certainly irrelevant to the case, since the merit of MS's products is not on point when you are looking at the unethical and illegal actions taken by MS to set back their competitors.

OS2/Warp would have been a perfectly good OS for all of us (something between Win9x and NT in stability/features). But IBM screwed up by not promoting it sufficiently, but now it's pretty clear *why* -- MS had them by the balls. I remember the days after Win95 came out and people were wondering why, given all the reported problems with Win95, IBM was not promoting the hell out of OS2. Well, Judge Jackson has explained it all to us. MS wouldn't let them.

I think we would have been better off is someone had recognized the fundamentally anti-competitive architecture of the original versions of Windows, and the way in which MS kept using its apps to upgrade the OS. That was clear in Win3.x with Office 4.x.

I don't want the government regulating software.

But I *do* want the government to punish those who pervert free competition by taking advantage of monopoly position.

MS *could* have made the browser integration componentized, without sacrificing functionality. Instead, they purposefully mixed OS and browser code in common libraries. This is the same issue as the runtime problem -- MS could have designed things to be modular and separable, if they'd chosen to do so. They did not choose to, and I believe they did it not for technical reasons, but just to make it possible to claim to non-technical folks that it couldn't be separated.

I do believe that they did it for fundamentally dishonest reasons - - not to provide a better product, but to insure that no one could easily force them to unbundle the browser from the OS.

MS never met a "standard" that it didn't attempt to pollute with proprietary extensions in order to control it. MS's term is "commoditizing standards." And, yes, that is direct from MS documents (both the Halloween memo and documents cited in Jackson's findings).

I think HTML Help is a good idea -- it would make help authoring much simpler. But, instead of designing something really straightforward, MS came up with something unnecessarily complex, with a bloody awful interface. A straightforward HTML Help module would quite easily run in any browser. An overly complicated one forces a particular browser. I can't help but see the choice made between "straightforward" and "overly complicated" as being determined by motives that have nothing whatsoever to do with merit.

(from a post of 27th November, 1999)

Everyone already knows I'm all for the DOJ's suit and think that the findings of fact were spot on. I also think MS ought to be punished for past wrongs and should be forced to do something truly significant to change their future behavior. I hope the newly appointed mediator will be able to put something together on that front.

Nonetheless, I do believe that I wouldn't be doing what I do today if it weren't for the introduction of VBA as the Office-wide development language in Office97. I truly believe that this step was by far the most end-user oriented and end-user empowering step that MS ever took.

I'm in the process of doing initial research for a business plan to take one of my apps commercial (in association with the client). At the time the app was conceived, there wasn't any competition. Now, there are 3 direct competitors and about 8 partial competitors. And of the ones I've examined so far, EVERY ONE OF THEM USES A JET BACK END. Guess what tools everyone's using? And guess why there were no apps for this market in 1996, but there is a selection of them in 1999? It's because the cost of development of elaborate apps has dropped by an order of magnitude. Why? Because of MS.

Microsoft does not get sufficient credit for VBA, I would say. People outside the MS orbit don't know it exists and can't even conceive of what it is. Well, I finally got one Linux-head to understand what it was and he acknowledged that the Linux world was a very long distance from such an environment in both time frame and conception (they don't even understand why it would be a good idea; if someone were to develop a VBA for an office suite that ran on Linux, that office suite would take off and take Linux with it). But most people don't even understand the concept of meta -application development.

And VBA really does *work*. I can't really cite any major flaws in the implementation. It's something MS did *right*, using a mature language and basing it on a mature technology (OLE -- some would say this is not the best, but, hey, like VHS, it works). It was the right combination of features and system requirements at the right time in the hardware cycle. The things that it has enabled are phenomenal.

And I will say it again: MS simply doesn't get sufficient credit for having done this.

(from November 30, 1999)

>However, the Microsoft "problem" (if one really exists) is best >addressed by the market place for many reasons, as we already >agree. There is enough fluidness in the software market to deal >with situation.

If this were the case, there wouldn't be a problem in the first place.

Spare me the brain-dead free-market religion.

©1999-2000, David Fenton Associates. Created October 1, 1999. Last updated July 5, 2000.