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How to Rein In Microsoft's Marketplace Dominance

Don't go the antitrust route; instead, change the country's outdated copyright laws

IN a recent Doonesbury, Bernie asks Mike, "Who makes the software that runs 80 percent of the world's P.C.'s?" Mike answers "Microsoft, of course." Bernie then asks whether the world runs on computers and Mike responds in the affirmative. Bernie finally puts it to Mike by asking who rules the world, and Mike sighs, "Why don't we just give Bill Gates all the money now and get it over with!"

When Microsoft premiered Windows 95, some stores stayed open past midnight so customers could snap up the software during the early morning hours of Thursday, Aug. 24, the official launch day. This product is the first major replacement software for running personal computers in five years. Dataquest, a market research firm, estimates that 30 million copies will be sold by year's end. Clearly, it's software, not hardware, that now lures people to the stores in droves. And never in recent history has a company so dominated a marketplace as Microsoft does with its software.

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Not everyone, however, is pleased with Microsoft's rule over software. Competitors have argued that Microsoft's licensing contracts have virtually frozen them out of the marketplace in violation of US antitrust laws, which are directed against monopolies and unlawful restraints on trade. A consent agreement between the Justice Department and Microsoft was recently formalized by a US district judge, but it explicitly excludes Windows NT, a microsoft operating system for businesses. Furthermore, it took more then three years of investigation by the Federal Trade Commission, another year by the Justice Department, and one more year in the courts before a deal could be concluded. Now the Justice Department is investigating Microsoft for possible antitrust violations in the way they bundle access to their new on-line service with Windows 95.

Considering the pace at which this technology is developed and marketed, enforcement of antitrust laws can be a very expensive and time-consuming process. A better way to prevent this type of complete market dominance could be to change the copyright laws that allow monopolies to develop in the first place. After all, it is the US government that gives Microsoft the exclusive right to copy, prepare derivative works based upon the copyrighted work, license, and sell its software for the life of its creator plus 50 years. Software copyrights are an effective method of restraining trade and controlling competition. Yet the copyright system and the laws that developed around it still rest on 18th-century concepts of authors and artists. New parameters and limitations need to be set, specifically addressing computer software.

One way to accomplish this is to limit copyright protection of software to three years after its first publication. This would avoid the inefficiencies associated with protracted antitrust litigation. Three years should be sufficient time for software developers to reap the benefits of their efforts and recoup the costs associated with research, development, and marketing, while still providing enough financial incentive for future technological advances.

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