Why the Microsoft Settlement Won't Work Continued
By Timothy F. Bresnahan
What next?
We need a remedy that will reopen the market to competition and
innovation and give computer users and developers as much
choice as they would have had without the violations. But
the deal signed by Microsoft and the Department of Justice
last winter won't do it. It is chockful of escape clauses
and other ways for Microsoft to pressure third parties, squelch
innovations from competitors, and block entrepreneurial start-ups
from gaining access to your desktop.
As for the states that are continuing the trial, they are now intent
on forcing Microsoft to disclose technical information with
which software developers could create products that work
with Windows. They also want OEMs to have more flexibility
and freedom from restrictive contracts and retaliation by
Microsoft. Judge Kollar-Kotelly is considering these requests.
I particularly like an idea that those states have reluctantly forsaken:
spinning off the Office software suite, including the Explorer
browser, into a separate company. Only such a move would truly
offer competitors to Windows an opportunity to enter and compete.
For example, many more people would use the Linux operating
system if it ran Office, especially an Office no longer subject
to Microsoft's strategy tax. Meanwhile, middleware entrepreneurs
could turn to the Office company as a distribution partner
if the Windows company tried to block them. Consumers and
developers would be given many more choices.
Sadly, it probably won't happen. And there aren't many options in
between this sort of divestiture and a slap on the wrist.
The most promising of those is compelling Microsoft to publish
protocols (and the code that supports them) so that Internet
software can work smoothly and transparently with Windows
and Internet Explorer. The larger choice among innovations
would leave users and developers worse off than if the lawbreaking
had never happened, but better off than they are today.
By Illustration: Mick Wiggins