Microsoft will be tough to pin down, says IDC

It will be difficult for the US Department of Justice to pin anything on Microsoft relating to anti-competitive practices, says IDC research analyst Graham Penn. He says Microsoft has been threatened with investigation for the past few years. "It would be unlikely Microsoft would blatantly just ignore the warnings. It's reasonable to assume it will be difficult for the US justice department to actually pin something on them."

It will be difficult for the US Department of Justice to pin anything on Microsoft relating to anti-competitive practices, says IDC research analyst Graham Penn.

The US Department of Justice (DOJ) last week asked a federal court to hold Microsoft in contempt and charge it $US1 million daily for requiring PC manufacturers to license and distribute the Internet Explorer browser as a condition of licensing Windows 95.

Penn says the DOJ has been under a lot of pressure from anti-Microsoft interests to do something, but that doesn’t mean it will find anything at the end of it.

He says Microsoft has been threatened with investigation for the past few years. “It would be unlikely Microsoft would blatantly just ignore the warnings. It’s reasonable to assume it will be difficult for the US justice department to actually pin something on them.”

Microsoft will have to be shown to be blatantly cutting out direct competitors or it will be difficult for the US justice system to show that is anything but an aggressive competitor. “And there’s no law in the US against being an aggressive competitor.”

Microsoft New Zealand managing director Geoff Lawrie agrees. He says there is an "unfortunate" history in the industry of people choosing to compete through the courts, rather than on the strength of their products.

He says Microsoft believes consumers should be able to choose with their money. Asked if that was the DOJ’s argument as well, Lawrie says consumers do have the choice to load any browser they want.

He says it’s fundamental in evolving the Windows product to have an integrated Internet capability, and that the consent decree of 1994 specifically allowed Microsoft to enhance the Windows product.

“It’s the same as when Windows started off — it was really for a standalone PC. People added hard drives and we added the ability to look at files on a hard drive. Then we added networking capability so you can look at files on a network. Now users are wanting to get on the Internet and we will enhance the operating system to enable people to do that. It is genuinely a user-driven requirement.”

Penn says one theory could be that Microsoft was prepared to take a reasonably aggressive approach to the market, possibly with the belief that by the time the system catches up with it, “the world would have turned three times”. Penn doesn’t believe the $US1 million a day fine will ever occur.

He says the main danger for Microsoft is that the issue will take senior executives’ attention away from the main issues of the day, because they will be distracted by legal requirements.

Lawrie says the issue shouldn’t affect New Zealand.

“Our take at the moment is that they won’t try to prevent us from augmenting the operating system to have a browser capability.”

In the US, analyst reaction to the DOJ action has been mixed. Ira Machefsky of Giga Information Group predicted last week that a DOJ victory would result in a diversity of products in the Internet market and less chance that Microsoft will dominate that arena.

A Dataquest analyst says that even if the court sides with the DOJ and finds that the browser represents an unlawful extension to Microsoft’s operating system monopoly, Microsoft will find a way to achieve its goal of bringing Windows and the Web together.

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