THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Thursday, July 28, 1994 TAG: 9407280017
SECTION: FRONT PAGE: A14 EDITION: FINAL
TYPE: Editorial
LENGTH: Short : 50 lines
President Clinton has made ``competitiveness'' a watchword of his administration. So why did the antitrust division of the Justice Department move to penalize Microsoft, by any standard one of the most competitive companies in the United States?
Microsoft's only crime, apparently, was that it provided low-cost, superior goods to the consumer in a way that was deemed harmful to its competitors (not consumers). Alas, the government lawyers also found it was not politically wise to cripple a company that has made itself so vital to the economy. So instead of fines or tossing Microsoft founder Bill Gates into the clink, Justice simply dictated a few rules of how Microsoft should run its business and left it at that.
Nevertheless, the costs of defending against an antitrust investigation - both in legal fees and time taken away from the running of the business on the part of its executives - can be considerable. Instead of stepping up antitrust investigations, a major rethink of the whole policy is long overdue.
IBM, after all, found itself under antitrust scrutiny from 1969 to 1982. The fear was that Big Blue would totally dominate the computer market. Steve Jobs and Steve Wozniak, working in their garage on the first Apple prototype, however, showed IBM couldn't stop them.
The same with General Motors. In the early 1960s, the Justice Department had eight antitrust lawyers assigned full time to monitor GM's business activities, and Congress investigated the company incessantly. The Japanese, of course, succeeded where Justice and Congress failed.
Microsoft has held a 70 percent market share in operating-systems software since 1988. Six years at 70 percent is hardly a monopoly. But it is remarkable that its products have been so popular for so long in a rapidly changing sector. The complaints against Microsoft come almost exclusively from its competitors, not consumers.
The antitrust laws were created in the late 19th and early 20th centuries, an era that predated the emergence of a global marketplace. The monopolies that have existed were usually created or endorsed by government regulations and enforced through special advantages given to politically powerful companies.
That President Clinton has beefed up antitrust enforcement while at the same time urging U.S. companies to be world-class competitors shows he hasn't thought very deeply about these issues. Consumers are far more powerful than antitrust laws in determining what companies succeed or fail. by CNB