You can't stop progress Microsoft: Anti-trust laws may not prove effective in fast-changing software arena.

November 08, 1997

JANET RENO'S Justice Department may have taken on more than it can handle in its bid to curb giant Microsoft Corp.'s dominance of the fast-evolving computer-software industry. The attorney general wants Microsoft to end alleged predatory practices involving its Internet browser.

But Ms. Reno may be attempting to hold back the tide. Computer advances are coming so rapidly that Justice's complaint could soon be out of date. It wants Microsoft to sell its browser software, which lets people navigate electronic links via the Internet, separately from its operating system.

The problem is that Microsoft already gives away its browser software for free. Its updated Windows 98 operating system for computers will incorporate that browser at no extra cost.

Bundling of software is the wave of the future. The top browser company is not Microsoft but Netscape, which wants to challenge Bill Gates' company directly by turning its browser software into an operating system, an area where Microsoft is king.

In such an intense corporate war, the Justice Department could be outflanked by the rush of technology. Two years ago, Microsoft settled an anti-trust suit with a consent decree that clearly stated Microsoft could not be stopped "from developing integrated products." That seems to include the company's current network browser effort.

Can Microsoft be stopped from improving its product? Justice says the answer is yes when the aim is control of a $100 billion industry. But Microsoft's moves haven't led to higher prices or deterred the introduction of new products -- two basics of anti-trust theory. Instead, its growth is based on keeping prices low and quickly embracing other firms' innovations.

Progress in the technology arena is fast-moving and ever-changing. Anti-trust theories have not kept pace. That could be Justice's biggest weakness in its effort to rein-in Microsoft.

Pub Date: 11/08/97

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