A Kinder, Gentler Monopoly

Well, they did it. Recently, the federal government announced that it would like to see the Microsoft corporation split into two parts: An operating-systems company and an applications company.

Personally, I think that this is a terrible idea. For one thing, I’d like to see Linux win in a fair fight. If the government breaks up Microsoft, it’s not a fair fight any more. But the worst thing about it is that splitting up Microsoft is just a stupid thing to try to do. It’s like saying you want to split up your house. The rooms in your house could all become little houses, but odds are that it would cause a lot of problems. Suddenly, you would need lots more phone lines, a lot of new electrical wiring, and your centralized air-conditioning wouldn’t work so well. You’d have to change houses to eat or go to the bathroom, and no one would know where to send your mail any more.

OK, so that’s a stupid analogy, but you get the idea. Microsoft’s products are so tightly integrated in complex ways that it would probably produce a tremendous number of ill effects if they were to be split up.

There’s an old saying that when all you have is a hammer, everything looks like a nail. Well, this is just an example of the government applying its hammer. It has applied the break-up remedy to monopolies in the past, and in the cases of Standard Oil and AT&T it seemed to work pretty well.

The problem is that Standard Oil and AT&T were monopolies for the industrial age. They were “physical” monopolies, based on physical resources. Microsoft is a monopoly for the information age — it is a knowledge-based monopoly. Programmers, IT workers, and office workers have all invested heavily in learning how to work with Microsoft software, and they are not going to just give up their investment in training.

A new type of monopoly calls for a new type of remedy. The whole point of the government’s remedy is supposed to be to restore competition to the marketplace. If that’s the case, then I think there’s a much more effective means to that end.

Much of Microsoft’s power comes from the lock they have on file formats. Everyone’s data is stored in Word and Excel file formats. Office file formats are the de facto standard for how the majority of people exchange information. If those formats were open standards, others could implement programs to read and write those formats, and competition would be restored.

The best way to make that happen? Don’t split Microsoft up — force them to release all of their products as open source. Even if they were forced to release the code to every previous released version of every software package they produce, it would still do a tremendous amount to remedy the situation. Unless they want to destroy backwards compatibility with every new release of their software, having the previous generation’s code available would make it possible for developers to create products that were highly compatible with Microsoft’s. This strategy would also allow Microsoft to continue “integrating” their software packages and building “better products,” while not preventing others from competing with them.

I don’t say this only as a proponent of the “open source way;” I say this as a proponent of doing whatever makes the most sense.

What do you all think? Drop us a line and let us know. See you next month.

Adam M. Goodman

Editor & Publisher