Here, Breaking Up Is Wrong To Do Breakup Unneeded Let Free Competition Govern The Market

Fri., April 28, 2000

By Jackie Van Allen jackiev@spokesman.com

Today, the Justice Department was expected to ask a federal judge to break Microsoft into two companies. One company would produce Microsoft’s operating systems and the second, its Office applications software.

Microsoft should not be broken into two companies; the punishment is too harsh.

Competitive forces can determine Microsoft’s future viability. The federal government should not interfere. The track record for federal market interventions is mixed.

In 1973, IBM was found guilty of monopolistic business practices. It was ordered to begin a series of actions to break up the company. Today, IBM continues to lose market share in everything from personal computers to routers. In fact, IBM finally called it quits on routers and switches. Cisco Systems is now the dominant provider of routers and switches.

In 1974, AT&T was found guilty of monopolistic business practices and a company breakup was ordered. Today, AT&T is purchasing Internet providers and cable companies across the country. AT&T still has a large market share in telephones and now is increasing market share in other forms of telecommunication.

The same remedy, two different outcomes.

Some Microsoft ventures have not been successful. The firm had limited luck with its Money accounting software. Sidewalk.com failed to take off and MSN continues to struggle. The market economy is at work.

And there is competition on the horizon.

Intel has invested in the company developing Linux, an increasingly popular version of the Unix operating system, which competes with Windows. Linux - like the Microsoft browser that provoked federal objections - is free and available via the Internet.

For the sake of users who appreciate standardized, smooth-running software, Microsoft should remain free to develop new products, with all of its programmers working together.

A breakup of Microsoft could harm the economy and increase software prices. Technology stocks, including Microsoft’s, have taken huge hits recently, partly in response to the government’s assault on this company, whose popular products facilitated huge productivity gains in the U.S. economy.

Remember, it is Microsoft’s business rivals, not consumers, who are behind the breakup effort.

Local journalism is essential.

Give directly to The Spokesman-Review's Northwest Passages community forums series -- which helps to offset the costs of several reporter and editor positions at the newspaper -- by using the easy options below. Gifts processed in this system are tax deductible.

Meet Our Journalists

Jesse Tinsley

Meet Jesse Tinsley. As a certified drone pilot, this veteran Spokesman-Review photographer often can be seen capturing beautiful aerial photographs of our region. Sometimes though, the job requires getting down with the dogs.
Jim Meehan

Jim Meehan is no stranger to Zag Nation. As the lead writer covering the Gonzaga men’s basketball team, he tells the stories behind the game and gets fans a bit closer to their favorite players.
Molly Quinn

There is no artist in Spokane like Molly Quinn. Her whimsical style is instantly recognizable to readers of The Spokesman-Review. She has painted gorgeous illustrations that instantly elevate the journalism accompanying it. She brings to life the stories that defy photography. She makes our pages better.
Rob Curley

Spokesman-Review editor Rob Curley loves to talk with people and learn about their lives, whether it's a best-selling author or a stranger he meets downtown on his walk to lunch. It's that inquisitive nature combined with a playful sense of storytelling that helps make our newspaper different than most.