[Congressional Record Volume 145, Number 77 (Wednesday, May 26, 1999)]
[Senate]
[Pages S5981-S5982]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          MICROSOFT VERSUS DOJ

  Mr. GORTON. Mr. President, what a difference a year makes. One year 
ago last week, the United States Government filed a Sherman Antitrust 
lawsuit against the Microsoft Corporation. This anniversary is a good 
time to review that lawsuit and to see how radically the universe of 
competition has changed in just twelve months.
  I am not at all unbiased. I believe that the Government was dead 
wrong in bringing this lawsuit. I believe that the lawsuit is bad for 
consumers, bad for technological innovation, and bad for a marvelous 
company that is headquartered in my State.
  But even an independent analysis would conclude that the case that 
the Clinton administration brought twelve months ago bears little 
resemblance to the case it now argues. Since then the Government's case 
hasn't been tried in the courthouse as much as on the courthouse steps, 
bypassing the law and aimed directly at public opinion through a 
national media that delights in highlighting any Microsoft misstep even 
though it has no relation to any harm to consumers.
  The administration pursues this case for ideological reasons. This 
administration is filled with people who are offended by anyone or any 
company that is too successful. They believe that it is fundamentally 
unfair that Microsoft does so well. Much of the national media seems to 
share this view.
  The administration has, however, miscalculated the views of a 
majority of Americans. Despite the Government's attempts to turn the 
public against Microsoft, it continues to be one of the most respected 
companies in America, and a majority of Americans believe Microsoft is 
right and the Government is wrong in this current lawsuit.
  In a recent poll conducted by Citizens for a Sound Economy, 82% of 
those polled responded that Microsoft is good for American consumers. 
This survey also found that seven-out-of-ten American consumers feel 
that technology companies, not the Federal Government, should determine 
what features and applications are included in the software that 
consumers use with their computers.
  Most Americans understand the value that Microsoft has brought. 
Microsoft products make nearly every business in America more 
competitive. The technology revolution fueled by Microsoft has made 
Americans secure in their jobs and made more families secure in their 
future.
  Microsoft has also helped usher in the most important change 
occurring on earth: today the power of information has been taken from 
a few large centralized institutions and put directly into the hands of 
people in every town and village across our globe via the Internet.
  The explosive growth of the Internet will eventually have a 
fundamental impact on every aspect of American life. A recent Newsweek 
article describes what it calls the ``New Digital Galaxy'' which allows 
consumers to operate devices from coffee-makers to dishwashers via 
Internet access. This will introduce a vastly different landscape in 
high-technology than exists today. Users will not necessarily use 
stationary Personal Computers to access information, but instead rely 
on Web phones, palmtop computers and similar technology that is 
advancing at an exponential rate.
  The Internet has had the fastest adoption rate of any new medium in 
history. Over 50 million users were connected in the first five years. 
To reach the 50 million user milestone, it took 38 years for radio, 13 
years for television, and 10 years for cable. On top of this initial 
growth, the number of users continues to increase by an astounding 37% 
per year. It is projected that 200 million people worldwide will be 
connected to the web in 1999, and half a billion by 2003. To handle the 
volume, the backbone of the Internet now doubles in capacity every 100 
days.
  Not only is the number of users increasing exponentially, but the 
amount of information available to them is also growing at an 
unprecedented level. The International Data Corporation estimates the 
number of web pages on the World Wide Web at 829 million at the end of 
1998, and projects that the number grow by 75 percent to 1.45 billion 
by the end of 1999. By 2002, according to IDC, there will be 7.7 
billion web pages.
  What does this mean to the future of global commerce? Considering 
that 18 million consumers made purchases on the Internet in 1997, and 
that number is projected to increase to 128 million by 2002, the 
possibilities are limitless. In

[[Page S5982]]

real dollars, this translates into $200 billion in Net-based commerce 
by 2000, and $1 trillion by 2003.

  We can't begin today fully to understand the scope of freedom for 
people that this information revolution will bring. And all the while 
Microsoft and its competitors continue to bring better products at 
lower prices to all consumers.
  While this case has been in the court, we have heard almost no 
discussion about whether the dramatic changes of the last year have 
rendered this case moot. I believe they do, and here's why.
  In the presence of a company exerting real monopoly power, 
competitors would be stifled, prices would rise, choices would be 
curtailed, consumers would be harmed. In fact, in the last twelve 
months the real world for consumers has improved by all of these 
measures. Competition in the technology industry is alive and well and 
nipping at the heels of Microsoft--all great news for consumers. Prices 
are down, choices are up, innovation is rampant.
  The U.S. software industry is growing at a rate more than double that 
of the rest of the economy. The number of U.S. software companies has 
grown from 24,000 in 1990 to an estimated 57,000 in 1999. The number of 
U.S. software industry employees has grown from 290,000 in 1990 to an 
estimated 860,000 in 1999, with an average rate of growth of 80,000 per 
year from 1996 to 1999. Do these growth figures sound like they come 
from an industry that is dominated by a Monopoly player?
  Mr. President, the bottom line is that the industry is thriving. It 
shows that we do not need the government picking winners and losers. 
While the nature of the government's case has been forced to change in 
the last year, the administration seems determined to punish this 
successful company and to use the power of the government to reward 
Microsoft's competitors. These are the very competitors whose alliances 
have radically changed the competitive landscape of the Information 
Technology industry in just the last few months.
  When the case began, AOL and Netscape were two large successful 
companies. Today they're gigantic, teamed with Sun and ready to compete 
in the next frontier of the Information Technology industry--the 
Internet.
  When the case began, MCI Communications and WorldCom were two 
separate companies, as were Excite and @Home. Yahoo hadn't yet bought 
GeoCities and Broadcast.com.
  When the case began AT&T was a long distance company. Today, AT&T 
could influence more than 60% of cable systems in the United States.
  Microsoft has continued to excel, in spite of simultaneously fighting 
off the government and its competitors. But, far from being stifled, 
Microsoft's competitors and potential competitors also have increased 
their market value by dizzying percentages over the last year:
  AOL--up 555 percent;
  Amazon--up 838 percent;
  Sun Microsystems--up 209 percent;
  IBM--up 91 percent; and
  Yahoo--up 455 percent.
  Microsoft is up 83 percent.
  To me that's good news, and I hope it happens again this year. But 
that success leads me to wonder: if these competitors are so injured by 
Microsoft, why is the Dow Jones Industrial Average up 20% and the more 
technologically driven NASDAQ up a more startling 40% since the trial 
began?
  A May 7 article in the Washington Post outlines the previously 
undisclosed lobbying activity on the part of a multi-billion dollar 
coalition of Microsoft competitors, consisting of Netscape and AOL, as 
well as ProComp, Sun and Oracle, who collectively have outspent the 
Redmond-based software firm by almost $4 million. The Post story made 
clear that Microsoft has been scrambling just to catch-up.
  Economist Milton Friedman recently warned about the possible impacts 
of the suit on the high-technology industry as a whole. He pointed out 
the obvious flaw in the competitors' strategy, which is involving 
government regulators. Mr. Friedman states, ``Silicon Valley is 
suicidal in calling government in to mediate in disputes among some of 
the big companies in the area and Microsoft . . . once you get the 
government involved, it's difficult to get it out.'' I couldn't agree 
more.
  Mr. President, with the Sherman antitrust action by the government 
against Microsoft entering its second year, the only question that 
remains is why this lawsuit continues. I urge my colleagues to join me 
in seeking an answer to that question.

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