Gates-zilla vs. the DoJ.
Here's how some CEOs are weighing in.
In the well-publicized face-off between Microsoft and the Justice Department, both sides say that they are pursuing the same goal: Protect consumers from having a large, monolithic organization dictate the kind of computer systems they will use. But the two sides differ in identifying that threat. Microsoft says the problem is Big Brother; the Justice Department says it's Big Business.
In essence, the Justice Department believes that Microsoft is using the dominant position it holds with the Windows operating system to unfairly protect its products and dominate access to the Web. Robert Bork, who represents the Netscape software company, a competitor of Microsoft, writes that Microsoft's aim is "to preserve its world-wide monopoly in operating systems by stifling companies whose technology would compete." Among other things, the Justice Department does not like Microsoft's inclusion of additional features, such as its Internet Explorer Web browser, in the new Windows 98 product. Such a combination, the department says, represents the tying of a competitive product to a monopoly product, giving the competitive product an unfair advantage in the marketplace. Remedies that have been suggested include having Netscape's competing browser bundled with Windows; having Microsoft give PC makers more leeway in programming the screen that users see when they boot up, so that users are not automatically guided to Microsoft's browser; and dividing Microsoft into two companies - one specializing in operating systems and one focusing on browser and other applications.
Not surprisingly, Microsoft does not think much of those ideas. The company argues that it does not compete unfairly - that there is nothing in Windows that stops consumers from using Netscape or another browser. What's more, the company says, the addition of features to its core product is a natural response to marketplace demands, and no different from putting radios, air conditioning, and other features in cars. And finally, the company points to the realities of the marketplace, where computer users have been getting more and more features for little or no additional cost - so why should the government start dictating software design? In the words of Microsoft Chairman Bill Gates, "We are defending the legal right of every company to decide which features go into its own products."
The case promises to drag on for some time, but Chief Executive asked several CEOs for their thoughts on the opening rounds of this historic battle.
- Peter Haapaniemi
Michael Feuer Chairman and CEO OfficeMax
"The Justice Department and the state attorneys general think they're doing what's right. But we vigorously dispute what they're trying to do and don't think it is an issue involving restraint of trade or competition. With technology, the person with the better mousetrap is going to win, whether it be Microsoft or a guy operating out of his basement, and I think this is just another case of too much government involvement in an area that is very sophisticated and very difficult to grasp. We're not too concerned about Microsoft; they can take care of themselves. We're concerned about our 31,000 employees - and the millions of dollars invested in the promotion of the launch - and I think that if the government had an issue, they should have done it a lot earlier, instead of putting [retailers] in jeopardy and costing us money when we haven't done anything. And I think that unfortunately this will probably involve a long litigation that will cost the American taxpayers a great deal of money, and it will be for nothing."
Arthur Hershaft Chairman, President, and CEO PAXAR Corp.
"I agree with the antitrust laws. But I don't believe that what is happening between the Justice Department and Microsoft...has an awful lot to do with Microsoft's stifling competition. I think it's more of a political thing. What Microsoft has is not the power of huge assets and natural resources. Their resource is the human brain, and they've been able to assemble the best brains and put them together in a terrific system. The customer likes it; the customer buys it - and I don't think that's stifling competition. Every day, there are a thousand Bill Gateses being born, and the opportunity for people to create large companies in the industry is just enormous. There's plenty of money available for folks with bright ideas.
Where I come out on this whole thing is, I think the Justice Department is hassling Microsoft because it is a success. I'm not saying that there might not have been some predatory marketing practices that might have gone on...but in the marketing world you can't always control things to the finest degree. Maybe Microsoft needs to be a bit more careful because they are larger, but frankly I don't think you should penalize a company for being successful in its field."
Peter A. Michel President and CEO Brink's Home Security
"The apparent rule is that if a company is extremely effective and successful, it must be breaking some law, whether that law has been written or not."
Donald J. Bainton Chairman and CEO Continental Can
I'm not sufficient aware of the facts to really have a definitive opinion as to whether Microsoft was violatin any antitrust laws. However, having said that, I really. deplore the huge amount of taxpayer dollars that the government is going to expend on the Microsoft case, the cost to Microsoft that will ultimately get passed along to the customer, and the time and the effort that Microsoft management is going to expend defending their position, rather than paying attention to their business - which frankly is important to all of us in the United States.
I think the confrontational attitude being taken is the wrong way to do it. [The Justice Department] should have kept at it until some sort of a compromise could be worked out. Here we have one of the most successful corporations in the world, and we're trying to chop its legs out from under it. It makes no sense to me. If I were making the decisions at the Justice Department, I would have just continued the negotiations - and continued, continued, and continued, rather than litigate."
R. Randolph Devening President and CEo Foodbrands America
"My take on this is that they ought to leave Microsoft alone, because that company is adding so much additional innovation to the software they are providing, and I think that by getting them into a situation where they are on the defensive, and with a possible breakup scenario, the economy is going to suffer because the flow of innovation is going to suffer. Microsoft has the critical mass that helps get innovations to the market on a cost-effective basis sooner.
If you look at the Wintel platform, it's had a lot to do with the buoyancy of the economy in the last seven or eight years. I'd hate to see the government say that all this is bad, and let's disband it."
Joseph B. Anderson Chairman and CEO Chivas Products
"I don't know enough about the details of the case to know if something's amiss, but on the surface it looks like Microsoft has done an excellent job of managing its marketplace. So I have some concerns about someone being taken on by the federal government for doing their job well."
John W. Guffey Chairman and CEO Coltec Industries
"A drawn-out and counterproductive tug-of-war between Microsoft and the Justice Department could well impede the development and commercialization of technology that will bring productivity gains to industry and economic growth to the U.S. We hope this important point is not lost in the debate."
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|Title Annotation:||opinions of CEOs on antitrust case filed by Department of Justice against Microsoft chief Bill Gates|
|Publication:||Chief Executive (U.S.)|
|Date:||Jul 1, 1998|
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