Nobody likes Goliath, Wilt Chamberlain once said, and now Bill Gates knows what he meant.
The Bible tells us Goliath was a bad guy. But aside from being Goliath-sized, what harm has Microsoft done? In fact, leaving some other issues aside, Microsoft's commanding market power has elements of downright goodness to it. What if the gods of economic policy visited you in a dream, and told you that one company would establish the de facto standard for developing our lifetime's epochal invention? And if you wanted, the company would be American. Would you take that deal? You'd pay, you'd beg. When the Japanese tried unsuccessfully 10 years ago to subsidize the creation of an alternative operating system — it was called TRON, another case of life imitating art — the U.S. industry was shaking in its boots. Foreigners — even worse, Japanese foreigners — were trying to steal the computer industry. Well, they failed. Now that a U.S. company has achieved the same position, do we want to break it up? Or worse, do we want to pin it down so a swarm of state governments can sue it and balance their budgets off Microsoft's back? The tobacco companies gave people cancer. Microsoft gave them browsers.
“Breaking up Microsoft” is not like breaking up Standard Oil or AT&T. You could find several companies within AT&T and Standard Oil. Those monopolies were economic pinatas — once you broke them open, the pieces flooded out, each just as capable of operating as efficiently as the behemoths that contained them. But breaking Microsoft into three companies, each with its own version of Windows, undermines the value of having one Windows in the first place, and breaking the browser part of Microsoft off of the Windows part means that the government has just decided what the boundaries of an operating system are, forever.
Granted, Microsoft, even if not Goliath, isn't St. Francis of Assisi, either. Yes, its operating system code should be free of hidden bogies that disadvantage other companies' applications, if we can agree on what a “bogie” is. And we might consider compelling an auction, in which two or three competitors can buy limited rights to the Windows computer code. In theory, that could preserve both the good aspects of the Windows standard and Microsoft's right to develop it in an ever-changing information technology market. In reality, any bidder would enter such an auction knowing that Microsoft might be right — consumers like having these things bundled together, like components in a stereo system. Try bidding against that.
But to go at Microsoft with an ax could do more harm than the actual harm Microsoft has caused. Nobody likes Goliath, but not every Goliath requires a David.
Goliath
Nobody likes Goliath, Wilt Chamberlain once said, and now Bill Gates knows what he meant.
The Bible tells us Goliath was a bad guy. But aside from being Goliath-sized, what harm has Microsoft done? In fact, leaving some other issues aside, Microsoft's commanding market power has elements of downright goodness to it. What if the gods of economic policy visited you in a dream, and told you that one company would establish the de facto standard for developing our lifetime's epochal invention? And if you wanted, the company would be American. Would you take that deal? You'd pay, you'd beg. When the Japanese tried unsuccessfully 10 years ago to subsidize the creation of an alternative operating system — it was called TRON, another case of life imitating art — the U.S. industry was shaking in its boots. Foreigners — even worse, Japanese foreigners — were trying to steal the computer industry. Well, they failed. Now that a U.S. company has achieved the same position, do we want to break it up? Or worse, do we want to pin it down so a swarm of state governments can sue it and balance their budgets off Microsoft's back? The tobacco companies gave people cancer. Microsoft gave them browsers.
“Breaking up Microsoft” is not like breaking up Standard Oil or AT&T. You could find several companies within AT&T and Standard Oil. Those monopolies were economic pinatas — once you broke them open, the pieces flooded out, each just as capable of operating as efficiently as the behemoths that contained them. But breaking Microsoft into three companies, each with its own version of Windows, undermines the value of having one Windows in the first place, and breaking the browser part of Microsoft off of the Windows part means that the government has just decided what the boundaries of an operating system are, forever.
Granted, Microsoft, even if not Goliath, isn't St. Francis of Assisi, either. Yes, its operating system code should be free of hidden bogies that disadvantage other companies' applications, if we can agree on what a “bogie” is. And we might consider compelling an auction, in which two or three competitors can buy limited rights to the Windows computer code. In theory, that could preserve both the good aspects of the Windows standard and Microsoft's right to develop it in an ever-changing information technology market. In reality, any bidder would enter such an auction knowing that Microsoft might be right — consumers like having these things bundled together, like components in a stereo system. Try bidding against that.
But to go at Microsoft with an ax could do more harm than the actual harm Microsoft has caused. Nobody likes Goliath, but not every Goliath requires a David.