Conflict often arises in the software industry when the
subject of Microsoft comes up. The argument usually divides people into two
camps: one camp believes Microsoft uses other companies as extensions of their
own research and development, stealing ideas when useful and squashing ideas
when necessary; the other camp avoids denying this, and instead contends that
chaos would result if there weren’t a force like Microsoft uniting the industry
technologically by eliminating alternatives.

If the group discussing Microsoft consists only of
Libertarians, the conversation is usually much more sedate. Libertarians put
their faith in free, unfettered markets, not government intervention, and are
therefore unlikely to be the ones you’ll find supporting the government’s
effort to reign in Microsoft.

This is where it gets tricky being a Libertarian in the
software industry. Again and again, I’ve seen great products and technologies
fall by the wayside as Microsoft wields its power over the industry with all
the grace and restraint of an elephant stampede. Microsoft’s use of power
frequently results in fewer choices being available in the marketplace. Do we
Libertarians, the most ardent defenders of market choice, really want to become
mouthpieces supporting the reduction of that choice?

That Microsoft is a monopolist is no longer up for debate;
this was found to be fact by a trial court and was later upheld by an appeals
court that otherwise issued many rulings in Microsoft’s favor. Okay, so
Microsoft is a monopolist. So what? Does it matter? If so, should anything be
done about it? To a Libertarian, the
stock answers are “No, it doesn’t matter” and “Even if it did,
nothing should be done about it, because governments shouldn’t interfere in the
markets”. The rationale behind these answers stems from the core
Libertarian philosophy of limited government.

Libertarians believe that we should be eternally skeptical
of government intervention, because governments aren’t very good at sticking to
just one kind of intervention. Whenever people permit government intervention
in one aspect of life, they will eventually discover that it has seeped uninvited
into many others. That’s because power is a gravitational force; any entity
with a sufficient amount of it finds that amassing more of it is almost
automatic. And power, once acquired, rarely goes unused.

History proves that—short of revolution—governments
always grow in power, and they never relinquish any significant amount of it
willingly. Recognition of this fact is what drives Libertarians to seek limits
on government power. We don’t want to invite government intervention, because
the result will be an accelerated accumulation of—and therefore use
of—government power. And use of power, if unchecked for a sufficient period of
time, invariably turns into abuse of power.

So, it seems that a “good Libertarian” should
demand the repeal of anti-trust laws and an end to the case against Microsoft,
since it would slow the government’s continued accumulation of power. I
respectfully disagree, and I do not intend to give up my Libertarian
credentials.

You see, governments are not the only entities to which
these dynamics of power apply. Businesses, too, can acquire so much power that
they’re able to wield it with destructive results, as is the case with
Microsoft.

Microsoft’s defenders feebly counter that the company’s
use of power is justified by virtue of their various “innovations”,
almost all of which were in fact created elsewhere:

MS-DOS was Microsoft’s first product that led it down the
road to monopoly. Microsoft bought MS-DOS from another company, and was lucky
enough to license it to IBM for use in their new PC product. IBM could have
easily developed their own operating system but decided against it because,
ironically, they feared the anti-trust implications of doing so. As the PC
clone market exploded, most manufacturers followed IBM’s lead and shipped
MS-DOS, so as the PC gained popularity, MS-DOS became entrenched.

While MS-DOS was giving Microsoft its first taste of
monopoly, Bill Gates paid a visit to Apple Computer, where he was given a tour
by Steve Jobs. At Apple, Gates saw something pretty revolutionary: a computer
with a pointing device called a mouse that let people operate the computer by
interacting with graphics—icons, windows and menus—that were drawn on the
screen. Gates recognized it was quite a leap forward from the text-based
MS-DOS, and when he returned to Microsoft, the company initiated the project
that eventually became Windows.

Once completed, Microsoft was able to ensure that Windows
would achieve ubiquity by tying it to the already ubiquitous MS-DOS. The
company changed its licensing agreements, forcing computer manufacturers to
take Windows if they wanted to continue shipping their computers with MS-DOS
already installed. Computer makers abided, because selling a computer with no
operating system installed would have put them at a severe disadvantage:
consumers didn’t want to install operating systems themselves if they didn’t
have to.

This is how Microsoft used their MS-DOS monopoly to create
their Windows monopoly. Microsoft then set its sights on another market where
they would eventually gain their next monopoly. The weapon was a product called
Microsoft Office, a set of productivity tools that included a word processor,
spreadsheet and database.

Microsoft was very creative in using their ownership of
Windows to kill off Office’s competition. The developers building Office were
supplied with inside information about Windows—information the company did not
make available to other software vendors—which enabled Office to operate more
efficiently with Windows than competing products could. If the developers of
Office needed to rework part of Windows to make building Office easier, the
change would get made; competitors obviously had no such influence. All of this
guaranteed that updates of Office would be the first to market whenever new
versions of Windows were released. Competitors, meanwhile, were continually
scrambling to play catch-up.

Eventually, Microsoft stopped publishing information about
the structure of Office document files, leaving competitors unable to make
their products compatible with those files. There were soon millions of
documents stored in Office files that couldn’t be accessed by non-Microsoft
programs. Because these documents were often shared between companies, buying
Office became a price of doing business, like having phones or a fax machine.
And each new release of Office brought different file formats, thereby forcing
everyone to upgrade or else be left behind, unable to read the newer documents.

By 1995, however, Microsoft sensed that it might have
something to fear. The Internet was starting to become a part of daily life,
and its newfound prominence brought with it two technologies poised to loosen
Microsoft’s chokehold on the industry: the Navigator web browser from Netscape,
and the Java platform from Sun Microsystems.

Navigator allowed people to view information and interact
with programs on the World Wide Web, the portion of the Internet that
catapulted the global network into the public consciousness. The web was an
open frontier completely uncontrolled by Microsoft; any operating system could
be used to access the web, not just Windows. If the web browser became the
predominant mechanism for accessing information, Microsoft’s Windows monopoly
could crumble, because people didn’t need to run Windows to get on the web.

Sun’s Java promised to allow for the creation of programs
that could run without modification on several operating systems: Windows,
Macintosh and UNIX, among others. One of the barriers to entry against Windows was
the fact that so many programs—many tens of thousands of them—ran on Windows
and only on Windows. This base of programs gave Windows a huge advantage over
less prevalent operating systems: Microsoft believed that people would continue
to use Windows as long as it was the operating system that ran the most
programs. But if enough software was written for Java, consumers wouldn’t be
locked into Windows anymore, because Java programs would run just as well on a
Macintosh or a UNIX machine.

When Netscape announced that, by the middle of 1996,
Navigator would include support for Java, Microsoft saw a double threat. Not
only did Navigator provide access to the web, which Microsoft didn’t control,
but it would soon become the Trojan horse that delivered Java to millions of
Windows machines.

So Microsoft set out to crush Netscape. Fittingly, on the
1995 anniversary of Japan’s attack on Pearl Harbor, Microsoft announced that
its next big move would be to transform itself into an Internet company.
Central to this announcement was the introduction of Internet Explorer, its web
browser. While Microsoft maintains that it created Internet Explorer to give
consumers more choice, internal Microsoft e-mails exposed during the anti-trust
trial show that the product was instead part of larger plan to “cut off
Netscape’s air supply”.

Microsoft made good on its threat by embedding a copy of
Internet Explorer in every copy of Windows, in effect tying one product to
another as the company had done previously with MS-DOS and Windows. With
Internet Explorer firmly in place on the computer desktop, Microsoft sought to
dislodge Navigator by pressuring computer manufacturers to stop installing the
popular program. First, Microsoft raised the price of Windows, but only for
those manufacturers that chose to install Navigator for their customers. After
this succeeded only partially, Microsoft threatened to stop licensing Windows
to the remaining manufacturers that insisted on providing Navigator to their
customers. This, in classic Microsoft double-speak, increased consumer choice.

Once again, though, Microsoft’s tactics eventually ensured
victory. Internet Explorer now enjoys somewhere around 80% of the browser
market, similar to the share Navigator held in 1995. Meanwhile, the company
that made the web browser popular has since faded into irrelevance. Threat
averted; score another one for the monopoly.

Microsoft’s next grand plan is their “.NET”
initiative, which will result in a massive database of personal information.
Your credit card numbers, address, phone number—and eventually information
like investment holdings and medical records—will all be stored by Microsoft
to facilitate online transactions. Of course, you’ll have to voluntarily
provide Microsoft with that information, but if they are able to gain control
over a large enough share of online transactions, you’ll have no choice but to
use their technology if you care to participate. The benefit for Microsoft is a
piece of the action; they will take for themselves a little slice of each
transaction.

And this is where as a Libertarian, I begin to get very
scared. If Microsoft pulls this off, they will manage to become a
quasi-government. Think about it: their database of information will probably
be more accurate and up-to-date than any government database. They will know
what you purchased, when, and how much you paid. They will know how much money
you have, what stocks you own, and what medications you take. And they will tax
every transaction.

Even if we give Microsoft the benefit of the doubt and
ascribe to them nothing but the best of intentions, their record on matters of
security is abysmal. Every major computer virus in recent memory has spread
thanks to security flaws in Microsoft products. Due to a lack of competition,
the exposure of these flaws hasn’t hurt Microsoft, and the company continues to
do nothing to improve security other than issue patches after the damage has
been done. Yet, despite Microsoft’s inept handling of security, they ask us
without even the slightest hint of embarrassment to entrust our most personal
and private information to them. And then they even ask us to pay for the
privilege!

While Microsoft’s previous actions might not raise the ire
of some Libertarians, the company’s plans for the future should be very
frightening to any self-respecting Libertarian. All my information held by one
authority? All my transactions taxed and logged by Bill Gates? Microsoft may
yet realize Orwell’s vision of Big Brother.

It may soon become obvious to the rest of the world what
many of us in the software industry have known for years: Microsoft has far too
much power. And it may soon become obvious to my fellow Libertarians what I
have come to learn recently: we should not let our support of free markets become
a willingness to support such a blatant bastardization of them. It is quite
clear that the markets in which Microsoft has focused its efforts do not stay
free for long. The company wins not through creative innovation but by using
its power to destroy the innovation of others.

When competition is used to create, it can be a force for
human advancement unlike any other; when competition is used to destroy,
though, choice is reduced and advancement slows. Right now, Microsoft has
enough power to dictate the choices that are available to us in the
marketplace. Ultimately, we Libertarians favor choice above all else, which is
why we should be appalled by Microsoft’s past actions and future plans.

Excessive power is dangerous regardless of who holds it. I
support the government’s case against Microsoft not because I am a lapsed
Libertarian, but because I am resigned to the fact that the government may be
the only entity capable of checking Microsoft’s power. And I hope never to find
myself supporting another government intervention again.