The Case For Microsoft The Case FOR Microsoft As far as I’ve seen, this entire ordeal is over a FREE browser that Microsoft includes with windows for FREE and gives out on the internet for FREE just as Netscape and most other browser companies do. I have yet to see where Microsoft is charging extraordinary prices for any of these FREE programs nor do I see how Netscape, in using the governments definition, a monopoly itself, is being forced out of business by Microsoft’s FREE browser. Remember: the charge is against including Internet Explorer with Windows, not the Windows monopoly itself. What this entire case boils down to is that a few Washington liberals are upset at Microsoft for daring to be successful. These are the kind of people that hate wealth, capitalism, and anything that is more successful than them.
My intention is to show that the case against Microsoft as a monopoly is weak and that the government is wasting its time. As the government jumps to the defense of the “all-too-often” taken advantage of consumer, they have accomplished very little. They tried to prevent the release of Windows 98 (a much anticipated and highly demanded program that was and is available at reasonable prices) but didn’t even phase the consumers second thoughts. The government is costing taxpayers millions of dollars to pursue this suit against Microsoft. Microsoft’s operating system near monopoly is probably good for us.
It is much better to have one operating system than 20 or even 2. Software compatibility, technical support, and setup are much more simplified with one operating system. Programs today are specifically designed to be Windows compatible. Would you rather have 20 (local) phone companies, each with a different line and number running into your house or one, as is the case now? Also, Internet Explorer brings browser competition to a market that is essentially monopolistic itself (at least if you apply Janet Reno’s definitions of monopoly). Internet Explorer gives Netscape a competitive product where before virtually none existed.
The purpose of antitrust laws is to prevent only harmful monopoly. Microsoft’s operating system near monopoly is harmful in very few ways. Nor is Intel’s chip near monopoly harmful, nor is Netscape’s browser near monopoly. Other reasons easily explain how Microsoft came about to its size and how new companies constantly spring up in the computer industry. Computer software is a very volatile industry. To succeed in this industry all you basically need is a good program and a way to offer it for sale.
When Microsoft, or any other software company, makes a program they only have to write it once. When this is done, reproduction of this program is very simple. All they have to do is copy it on a disk. Since making an extra disk containing the program costs all of 2 cents, it is more costly for the software company to print the box and manuals than it is to make one extra disk. With this situation occurring, a good program, once written, can be produced marketed at virtually no additional cost. Well you say, “if disks only cost 2 cents, why can’t windows sell for 2 cents?” Remember that it costs Microsoft to develop a new program. No matter how cheap a disk is, other costs such as salaries, factories, storage, and programmers always exist.
Even though development costs are sunk and additional production costs are nonexistent, other costs are incurred. Besides, supply and demand determines where a price will fall. Another thing about the computer market is its ever-changing program market. As I said earlier, anyone with a good program can be successful in the computer industry. Programs come about all the time.
For example, the most popular finance program is Quicken. Microsoft’s version, Money, is included with many of its programs yet Microsoft, the multibillion dollar a year company, has considerably less users than Quicken, with mere tenths and hundredths in sales than the annual income of Microsoft. Another example is Accessories Paint compared to Print shop or EXPLORER compared to NAVIGATOR. Microsoft offers its own products as complements to Windows, often for FREE, but consumers still prefer others. For all we know, anyone literate in programming may develop a better program than Windows.
If consumers like it, we may soon find another browser monopolist. For reasons similar to this, computer industry leaders have vastly changed in just a few years. At times Apple, IBM, Intel, Netscape, AT&T and even Commodore, have or had large, sometimes monopolist-like markets. Characteristics of monopolies that cause trouble are (1) restriction of output, (2) higher prices along with this restriction, (3) restriction of entry to a particular market and, in a few cases, (4) lack of innovation due to lack of competition. Not a single one of these problems is experience with Microsoft. These problems are only drastic when an item is in a secluded market with no close substitutes. Computers are definitely not necessities and there are few barriers to entry in the computer market (the only noticeable being computer literacy).
Microsoft certainly does not restrict output and hold prices at extreme levels. If they did, nobody would buy Windows 95 or 98 when it came out. There is no reason to buy an upgrade except that people are looking for something new or something bigger and better. New versions of Windows do not sell because consumers aren’t forced to buy them. They sell because consumers want them. Many of Microsoft’s major products are included with Windows.
Giving products away at no monetary cost is certainly not restricting output. Even more, it is the lowest price the company can sell at. The only cost of getting Internet Explorer, or Netscape Navigator for that matter, is a tied up modem for about 45 minutes. This is even avoided when Explorer or Navigator are included free with another piece of software such as Windows or, in Netscape’s case, the software you get when you sign up with an online service. Netscape had an almost full monopoly (90%) and still has a semi-monopoly at 65-70% of the browser market.
So what they are worried about? They use the same methods of distribution of their software by offering it for free and having Internet providers include it with their registration software. Before Internet Explorer came along, we sat for long periods waiting for browser upgrades. There was essentially one browser – Netscape two point something. Upgrades have been almost constant since the introduction of Explorer. The result: two companies with advanced browsers competing to build a better browser.
Microsoft is not the only operating system to choose from. While very practical and well suited for the current computer industry, Windows is not alone. Many other operating systems, some even FREE, are available. There are around nine in the US alone: Linux, Caldera, Solaris by Sun, BSDI, Unix for the PC by Digital, BeOS by Be, Rhapsody by Apple, OS/2 by IBM, and the Macintosh OS. Globally there are bigger companies that have more of the global market. So how is Microsoft a monopoly if there are nine other substitutes in the US alone? Once again though we are not really talking about the operating system market but I just had to make a big point.
Finally and most importantly, what right is it of the government to tell Microsoft how it can and cannot configure its own software? Once Windows is installed, consumers have the option of disabling as much of Windows as they like. If you don’t like Explorer, disable it and get Netscape (for FREE). We don’t need Janet Reno to decide this for us. Just remember that Microsoft is a free company- able to write its own programs the way it wants to just as you can do if you so desire! Don’t let Washington liberals fool you with their charges when Microsoft shows hardly any characteristics that make a monopoly dangerous. We are facing a great abuse of the government’s anti-trust laws for their only purpose is to stop dangerous (and ONLY dangerous) monopoly.
Washington should not be able to get in the way of a successful company over Microsoft’s right to include their FREE software with their own program. Economics.