High Noon for High Tech
The appearance of Microsoft chairman Bill Gates before the US Senate's Judiciary Committee last week could become a milestone in the information age - the occasion when the free-wheeling vanguard of high-tech commerce came face to face with the gray eminence of government, and blinked.
The heretofore apolitical Mr. Gates gave little ground on the specific issue before the committee - whether his company unfairly exploits the dominance of its Windows operating system to keep competitors' products out of the market. But he doubtless found his grilling at the hands of the senators a new and uncomfortable experience.
The whole software industry, in fact, has reached a point where its economic power, its impact on the citizenry, and its titanic market-share struggles invite government scrutiny. Key players in the industry, even the usually private Microsoft chief, are increasingly conscious of a need to win sympathetic ears in Washington.
The Justice Department's antitrust action against Microsoft is a catalyst in this process. Because of it, the interest of Washington's lawmakers has been heightened. State attorneys general also have their eyes on Microsoft for possible anticompetitive practices.
These suspicions have considerable credibility. Microsoft is the giant of its industry, with the clout to force computer hardware makers and Internet service providers to offer customers its products, not competitors'. With regard to World Wide Web browsers, the product most at contention, Microsoft integrated its Explorer software into Windows, making it a virtually free feature. Browser rival Netscape, understandably, screamed.
So is this simply a legal, user-friendly tying of one product to another, or an illegal use of market power to squelch the competition?
"Competition" is the operative word. Gates accurately described the intensely competitive nature of the software industry in his testimony. For all its dominance in operating systems, Microsoft controls only about 5 percent of the overall software market. The stories of new companies springing from Silicon Valley incubators are legion. The technology of the future is always just around the corner.
This may indeed be an environment unlike any the world has known before - a far cry from the smokestack and rail industries that spawned American antitrust legislation a century ago.
Judiciary Committee chairman Sen. Orrin Hatch acknowledges the differences, but recognizes that the impulse to corner a market by unfair means can operate in the 1990s as in the 1890s. His remedy: "Better to have properly calibrated antitrust enforcement today than heavy-handed regulation tomorrow."
That makes sense. Establish some rules, but don't rule out the free play of ideas and enterprise that foster the global information economy.
Establish some rules, but don't rule out the vital free play of ideas and enterprise.