Competition not always an ugly word

I finally got to see the Hollywood movie Antitrust recently, while travelling by plane. As a rule, in-flight entertainment is usually pretty forgettable, and not very timely. This particular movie struck a chord though, given the events of Microsoft’s settlement earlier this month with the U.S. Department of Justice.

For any of you who missed the movie (as I managed to do for so long) it was a fictional account of a software mogul who owned a multi-billion dollar technology company, happened to favour loud sweaters and little round glasses and whose company just happened to be going through a lawsuit with the DOJ charged with – you guessed it – antitrust. Remind you of anyone so far?

Yes, I did say it was fictional. For one thing, the mogul is named Gary Winston in the movie – not Bill Gates, and his monopoly is called NURV (Never Underestimate Radical Vision) – not Microsoft. Oh yes, and Winston also has a nasty habit of killing young programmers and stealing their code. That part is so obviously a fictional add-on – even Gates’s worst critics would never accuse him of something so heinous.

That being said, it was obvious where the inspiration for the main character came from. At times, it was so evident that Winston was largely based on Gates and his DOJ troubles that it was hard to remember the movie was fiction. The tongue-in-cheek portrayal even had representative gurus of the open source community Linus Torvalds, Miguel de Icaza and Jon “maddog” Hall listed in the credits of the film.

Microsoft’s landmark trial, which first began in 1998, made big headlines in September when the DOJ determined it would not seek a break-up of the software giant, but instead would impose a series of remedies to restrict the company’s business practices.

In the 21-page settlement reached earlier this month, middleware was broadly defined to include browsers, e-mail clients, media players and future middleware developments – and the freedom to substitute competing middleware software on Microsoft’s OS was mandated. It also stipulated that Microsoft’s APIs be made available to competitors.

The overwhelming consensus of analysts and users quoted in the press was that Microsoft got off easy, and that the settlement didn’t really address one of the main anti-competitive problems: namely, the bundling of software with its OS. Another criticism of the deal is its emphasis on the PC operating systems, and the fact it ignores embedded and handheld operating systems as well as server and development tools.

Then there are those who believe that the decision will have a negative effect on innovation – that the environment will not be as friendly to start-up companies as it was in the past. As one user put it, “You either work with Microsoft, or you don’t work at all.”

It makes me wonder how much of all this is justified concern for an equitable competitive landscape in the industry and how much is just cynicism, borne of envy, against a behemoth that industry people love to hate? What if this case had been, say, IBM instead of Microsoft – would critics view it differently?

In fact, though Microsoft’s case is better known, it is eerily similar to a 1969 antitrust case against IBM by the U.S. government, which wasn’t dismissed until 1981. Some experts believe that case had a direct positive influence on Microsoft’s rise to power. During the time that legal battle was going on, IBM had enough resources to buy out the fledgling Microsoft, but didn’t dare to, as the government was watching it very closely. Just think how changed the IT industry would be today if this scene had played out differently.

In the end, I’m not sure Microsoft didn’t do anything any savvy company in its position would have done, had it the resources and opportunity in this highly competitive industry. The settlement will probably have little or no effect on the end user – those who use Microsoft products will continue to do so, those who don’t will continue not to. If you really want to use something else, you can. But in the end, who can blame a company for wanting its product to be successful?

Gary Winston, the Gates-like character in the movie, may have put it best when he said, “This industry is binary. You’re either a one or a zero; alive or dead. There is no second place.”