[Congressional Record Volume 146, Number 8 (Thursday, February 3, 2000)]
[Senate]
[Pages S325-S326]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MICROSOFT AND THE AMICUS BRIEF
Mr. GORTON. Mr. President, this is an appropriate time to bring my
colleagues up to speed on the continuing saga that is the Microsoft
anti-trust trial. Since I last came to the floor to discuss this issue,
the industry, of which Microsoft is a part, has once again changed
dramatically. For instance, American Online recently triggered the
largest corporate merger in history with the acquisition of Time-
Warner. This media giant is now poised to compete vigorously in every
aspect of the Internet, from the wires that connect you, to the content
you watch. To meet this challenge, Microsoft and a legion of its
competitors must be allowed to compete vigorously in the ever-changing
landscape of the information technology industry.
My fellow Senators will soon receive a ``dear colleague'' letter
endorsing an amicus brief filed on behalf of Microsoft by the
Association for Competitive Technology (ACT). ACT is a nonprofit
association representing more than 9,000 companies in the information
technology industry. ACT's membership is made up mostly of small and
medium sized businesses but includes household names such as CompUSA,
Excite at Home, Intel, Microsoft and Symantec. These members come from
all walks of the industry, unified by the cause of protecting
competition and innovation in the industry.
This brief was prepared by a bi-partisan group of legal heavyweights
including former White House Counsels Lloyd Cutler and C. Boyden Gray
as well as former Attorneys General Griffin Bell and Nicholas
Katzenbach. It eloquently reinforces many of the points that I have
made on the Senate floor for over a year now. In the end, I think you
will agree that this document reveals the glaring weaknesses in the
DoJ's case against Microsoft.
The amicus brief reinforces the point that current antitrust laws
expressly allow, and even encourage, the kind of competitive activity
that the government seeks to stop; the kind of competition that
continues to benefit not only consumers, but the hundreds of thousands
of high-tech workers and entrepreneurs in the software and hardware
industries as well. It also sounds the familiar refrain that the
government needs to take a highly pragmatic and cautious approach to
antitrust enforcement in this dynamic industry.
Unfortunately, Judge Jackson found last year that Microsoft's Windows
holds a lawfully acquired monopoly of the market for ``operating
systems'' for Intel-compatible personal computers. Although Microsoft
may later challenge this finding, the brief assumes for purposes of
argument that the finding is correct.
The plaintiffs (the federal government and several states) charge
that Microsoft, in adding the Internet Explorer browser to Windows and
marketing the package, violated antitrust laws. The amicus brief--and
the Supreme Court cases on which it relies--demonstrates that the
purpose of the antitrust laws is to protect consumers and competition--
not competitors--and that Microsoft, far from violating the antitrust
laws, competed vigorously to the immense benefit of consumers.
Vigorous competition, which antitrust laws are designed to protect,
produces innovation, better products, more efficient distribution, and
lower prices. All of these results of competition are to the benefit of
consumers. The antitrust laws do not require competing firms to be nice
to one another, or protect firms against their more powerful rivals. It
is not wrong for any company to want to take business away from its
rivals.
The antitrust laws encourage a firm that holds a lawfully acquired
monopoly to compete hard to keep that monopoly. They also encourage
such a firm to enter other fields where, by competing with better and
cheaper products, it can benefit consumers.
Judge Jackson found that the widespread use of the Windows operating
system has made it is a platform for a vast range of computer
applications that consumers now enjoy.
Judge Jackson also found that when Microsoft added a superior
Internet browser (Internet Explorer) and offered it to consumers at no
extra charge, these actions gave consumers better access to the
Internet and spurred its rival Netscape to improve the quality of its
``Navigator'' browser and to distribute it at no charge.
Microsoft did not drive Netscape's Navigator out of the browser
market. On the contrary, even Judge Jackson found that Netscape's
``installed base'' has more than doubled since 1995 and will continue
to grow in the future. Browser competition remains vigorous.
Microsoft did successfully break into the browser market and did
obtain a share of that market for itself. The single most important
reason, as even Judge Jackson found, is that Microsoft rival AOL itself
chose and re-chose Internet Explorer over Navigator, even though AOL
now owns Netscape. AOL made that choice because Microsoft offered a
better product, better service, and better marketing support than did
Netscape.
Microsoft's agreements with PC manufacturers and Internet access
providers to distribute Internet Explorer were lawful agreements
designed to help Microsoft break into a browser market in which
Netscape was the overwhelmingly dominant firm. It was good for
competition and consumers, for Microsoft to introduce competition into
that market.
The plaintiff's theory is essentially that Microsoft, once it had a
lawful monopoly in the operating systems market, should not have
aggressively entered the browser market, because Netscape's dominance
of that market might have led to more competition in operating systems.
That theory is bad law. Again, the law protects consumers, not
competitors. Consumers benefit when any firm, including one holding a
lawful monopoly, competes aggressively to challenge another firm's
incipient monopoly in a related field.
This competition 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.
Not only is the number of users increasing exponentially, but the
amount of information available to them is also growing at an
unprecedented rate. The International Data Corporation estimated the
number of web pages on the World Wide Web at 829 million at the end of
1998, and projects that the number will be 7.7 billion by 2002.
The explosive growth of the Internet will eventually have a
fundamental impact on every aspect of American life, and will introduce
a vastly different landscape in high-technology than exists today.
Users will not necessarily
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use stationary personal computers to access information, but instead
rely on Web phones, palmtop computers and similar technology that is
developing at an exponential rate. Microsoft must be allowed to compete
in order to survive this transition.
Although Microsoft is a large and powerful company, it faces
aggressive present and future competition in every field it enters, and
if it wants to maintain its present position it must compete vigorously
on every front, with innovations, improved quality and lower prices.
That is exactly what antitrust policy seeks to promote.
For a court to enter into this vitally important and rapidly changing
field and seek to dictate what products shall be made and sold by which
firms would be a tragic mistake. For example, if a few years ago a
court had ordered Microsoft not to add Internet Explorer to Windows,
there would today be fewer hardware manufacturers, fewer software
developers, fewer applications, and a far less developed Internet, and
the world would be a poorer place.
The best solution for both the administration and the courts is to
retire from the field and to allow the most dynamic company in the
history of technology to continue its growth in a competitive market,
free from government interference.
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