[Congressional Record Volume 144, Number 19 (Tuesday, March 3, 1998)]
[Senate]
[Pages S1289-S1290]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      MARKET POWER AND STRUCTURAL CHANGE IN THE SOFTWARE INDUSTRY

  Mrs. BOXER. I would like to comment on the hearing held 
earlier today by the Senate Judiciary Committee on ``Market Power and 
Structural Change in the Software Industry.''
  First, I would like to commend Chairman Hatch for holding this 
important hearing and for his leadership on this issue.
  Mr. President, today's creative and innovative software products 
enable us to bank, conduct research, shop and even trade securities 
online. And this is just the beginning. It is important therefore, that 
such a vast and essential resource be allowed to grow and expand in a 
fair and competitive environment. But recent events had threatened to 
case clouds over this most fundamental premise. Let me explain.
  On October 20, 1997 Attorney General Reno announced that the 
Department of Justice would ask a federal judge to order the Microsoft 
Corporation to cease its practice of forcing manufacturers to sell its 
internet browser, Internet Explorer, with its widely used operating 
system, Windows 95. The U.S. District Court here in Washington, D.C. 
agreed, and on December 11, 1997 ruled that, pending further 
proceedings, Microsoft could not require purchasers of its operating 
system software to install its browser software.
  In response to the Court's December 1997 ruling, Microsoft offered 
computer makers three options: (1) a version of Windows which Microsoft 
believed did not function; (2) a version of Windows which was more than 
two years out of date and no longer commercially viable; or, (3) 
Windows 95 bundled with Internet Explorer.
  Thanks to the Department of Justice's continuing efforts, however, 
the storm clouds which had threatened an open and competitive market 
for internet browser software, now appear to be fading. On January 22, 
1998, the Department of Justice and Microsoft reached an agreement in 
which Microsoft agreed to offer computer manufacturers a version of 
Windows 95 that contained a fully up-to-date operating system without 
its Internet Explorer internet browser.
  But why should we care about this?
  We should care about this because the biggest losers, perhaps, of any 
anti-competitive action in the internet browser industry will be the 
millions of everyday people who rely on the Internet. If one company 
gains such a huge and unfair advantage, other companies will not be 
able to compete; there will be no choices and innovation will be 
stifled.
  This brings up the issue of ``open standards.'' Open standards on the 
Internet will allow all access to the Internet without having to rely 
upon any one company or any one operating platform. Open standards work 
against monopolies, and ultimately benefit the Internet by increasing 
competition among software products, resulting in lower prices and a 
wider selection.
  As a Californian, I am concerned about this issue for yet another 
reason. Cutting-edge software manufacturers from my home state provide 
tens of thousands of people with high-paying jobs, making software 
manufacturing one of California's most valued industries. Industry 
competition is thus vitally important to my state's interest.
  I appreciate the integral role the Microsoft Corporation has played 
and continues to play in the information age--its contributions have 
been most significant and important. It has made computers and computer 
applications more accessible to millions of people around the world, 
and for that, it deserves appropriate recognition and credit. Microsoft 
has been, and continues to be, the leader in the computer industry. But 
other, smaller, companies must also be given a chance to compete in the 
best and oldest of American traditions.

[[Page S1290]]

  As we move further and further into the information age, the national 
government must ensure that competition is not eliminated. The 
Department of Justice should therefore be commended for acting to 
protect consumers and businesses alike. Similarly, Microsoft deserves 
credit for agreeing to settle the issue of bundling its operating 
system software with its internet browser software in what the 
Department of Justice believed to be a fair and equitable manner. Both 
made the right call.

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