CONSUMERS MAY LOSE IN MICROSOFT CASE.

Byline: David L. Wilson Knight Ridder Newspapers

For the people who buy Microsoft products, the marathon antitrust case could well wind up a confusing lose-lose situation, regardless of the legal outcome.

The company's supporters have argued that a win for the Redmond, Wash.-based computer software giant will guarantee consumers continued access to high-quality software from a company that's helping to drive the economy. They claim a loss, which now seems more likely, could spell disaster.

``I do not believe that any outcome crafted by opponents of Microsoft - Justice and competitors - has even a vague guarantee of servicing the needs of the computer industry,'' said Paul Hoffman, director of the Internet Mail Consortium, of which Microsoft is a member.

Microsoft's enemies, however, say a win for the government would put limits on a ruthless corporation that's stifling innovation, trying to keep software prices artificially high and positioning itself to control the distribution of information in the digital age.

A Microsoft victory, they argue, would make life worse for consumers by stifling competition and destroying any chance of future antitrust enforcement.

``You never will see a case this strong again,'' said Ed Black, president and CEO of the Computer & Communications Industry Association.

With his findings of fact in the case released Friday, U.S. District Judge Thomas Penfield Jackson seemed headed for the same conclusion.

``The ultimate result is that some innovations that would truly benefit consumers never occur for the sole reason that they do not coincide with Microsoft's self-interest,'' Jackson wrote in his 207-page finding.

The problem for consumers is that possible remedies to Microsoft's alleged abuses might make life worse rather than better.

David Farber, a computer scientist at the University of Pennsylvania and a government witness in the trial, and others who believe a government victory would be better for the country agree there is a likely downside from that outcome.

``Whichever side wins, there's going to be pain,'' Farber said. ``The question is the duration of the pain.''

For instance, other companies might be allowed to sell their own versions of Microsoft's Windows computer operating system. Competition for a product that's now available only from Microsoft would check the company's alleged power.

But the various versions of Windows are likely to be different enough to cause compatibility problems for software developers, and that could drive up prices and increase headaches for consumers.

``A vendor who only follows a standard will never make any money. You have to do proprietary things to add value if people are going to buy your product instead of the other product,'' Hoffman said. ``That is when standardization falls apart.''

Many analysts agree the urge to tinker will be irresistible.

``Every vendor will ultimately seek proprietary advantage,'' said Clay Ryder, vice president and chief analyst for Zona Research Inc. ``We're in a somewhat unique situation in that we've only got one supplier of the operating system now. There are some big minuses to that, but there are big pluses, too.''

In fact, any remedy that makes it harder for Microsoft to function efficiently could cause problems for consumers.

The pain might be lessened if Microsoft and the government agreed to a negotiated settlement. The best chance for that probably was in May of 1997, when the Justice Department demanded what now seems a minimal concession.

The government told Microsoft it would drop the antitrust case if the company would either bundle the Internet browser made by Netscape Communications Corp. with Windows and Microsoft's own Web browser, or let users decide which browser to install.

Microsoft rejected that offer, and with Jackson's findings of fact, the government's terms are likely to be tougher.