Dear Miss Reno:

You’ve had some impressive victories lately. With a single press announcement, you’ve made Microsoft a marked company, targeted for the crime of promoting “unfair competition” – all because it insists that parts of its operating system be packaged with the operating system.

But you’ve fallen short of your potential. You have a fearful power that you have yet to exercise. It’s not political power, but the power of ideas – a force no single politician could ever equal.

It’s the power to destroy Microsoft.

You’ve made the principle quite clear: Microsoft is not free to leverage its market position to reap additional profit. That’s “unfair competition” — the exercise of an advantage that the competition does not possess. The supposed crime in Microsoft’s insistence on bundling Internet Explorer with its Windows operating system is not that it keeps people from using Netscape Navigator, but that it bolsters the market position of Windows.

By this standard, however, nearly everything Microsoft does becomes illegal. Think of it – if you so chose, you could have the software giant fined right out of existence!

Still confused? Here are some examples:

– Hiring of talent
. Microsoft is so wealthy, it can hire the best programmers, software designers and marketers in the world. Clearly, this fosters unfair competition. What about the poor companies who can’t afford to fill their payrolls with the best and brightest in the industry? Who will be left to work at Netscape once Microsoft scoops up the hottest talent? A hiring quota needs to be enforced, limiting the number of geniuses who can work at Microsoft at any one time. Clearly, a government overseer will be required to enforce this.

– New technology. Microsoft spends hundreds of millions of dollars every year on research and development. They share few of their breakthroughs with the computer industry at large. Again, what about the smaller competitors with no R&D budget to speak of? How can they hope to compete against such a juggernaut? Forcing Microsoft to divulge all trade secrets to the public would put an end to this unjust accumulation. I suggest assigning a government overseer to expedite this process.

– Experience. Microsoft has gobs of it. They’ve had time to develop and fine-tune their software processes over the course of hundreds of development projects – from the development of DOS all the way up to Windows NT 5.0. Again, we must think of the little guy without the experience – or, possibly, the brains – to make his organization’s development processes as lean and mean as the Redmond Giant’s. This is a hard one to cure. I recommend forming a special task force to discuss it. Then, hire a government overseer.

– Software quality. Combine talent, technology and experience, and what do you have? The ultimate nightmare: Useful, usable, reliable software. No wonder Netscape can’t compete! Now, it’d be impractical to insist that Microsoft force its engineers to work for Netscape to improve the quality of Navigator. There’d be too much question of conflict of interest. Rather, I suggest appointing a government overseer to track Internet Explorer’s development, and make sure that the “proper” number of bugs are left unresolved in the product. (Since you are an expert at judging when competition is “unfair,” I’ll let you develop the metric that decides what is “proper”.)

As you can see, you’ve only licked the tip of the lollipop. You could do much more damage with the principle of unfair competition than you seem willing to do right now. Perhaps you’ll take bigger bites over time.

Of course, you could also come to realize that the concept of “unfair competition” is a vicious lie. You could realize that small companies frequently outsmart larger companies with deeper pockets – just as Microsoft did to IBM in the mid-80’s, and as Intuit continues to do to Microsoft today. You could realize that it is not the presence of competition, but the freedom to compete, that makes capitalism work – and that Netscape and Sun are not asking for the freedom to compete (which they have), but a guarantee that they will win. You could realize that delivering this guarantee means punishing Microsoft for their productive virtue – taxing them because they’re wealthy, fining them because they’re successful. And you could realize that America will collapse under the weight of its own mediocrity if you punish people for their success.

But I’m not holding my breath.


Jay Allen

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Jay Allen

Jay Allen is a contributing writer to Capitalism Magazine.

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