illegal practices to sustain a monopoly and attempted to take over the market for Internet browsers by placing “an oppressive thumb on the scale of competitive fortune, thereby effectively guaranteeing its continued dominance”.
Microsoft’s integration of its Internet Explorer browser into the Windows operating system is estimated to be used in about 90 per cent of the world’s personal computers.
Although it may be many moons before a remedy is levied – provided Microsoft’s appeal of the decision fails outright – the reverberations of Judge Jackson’s ruling and the rumours of a possible court-ordered corporate breakup outside of the Land of Opportunity have only begun. Microsoft Canada president Simon Witts said he is deeply concerned for the corporation’s image, regardless of the final result.
“Our company’s reputation is tarnished by this ruling for sure,” said Witts from his Mississauga, Ont., office. “No company can go through this without their reputation being tarnished…we’re not worried day-to-day, but we are deeply worried.”
Witts also expressed his exasperation at any suggestion of the U.S. court ordering the company to break up.
“It blows me away, it’s as if people assume this thing is over,” he said. “We are going to appeal.”
Corporate reputation is everything in the business world – perhaps nowhere is that fact better illustrated than the IT industry where enterprises live and die by consumer faith. Witts added there has been an outpouring of support for the embattled corporation from both its strategic partners as well as its client base.
“We read the press and we see the market is on our side,” he said. “We see the Microsoft bashing too, but the heartening aspect comes from the people who know this company…a lot of messages of support have come from our partners and our customers. It (the ruling) doesn’t jive with what the consumers think of us.”
Although industry experts are predicting few changes in the IT world for the short term, the ruling opens the possibility for several lawsuits to be lobbied at Microsoft under America’s anti-competition laws. For example, Netscape pioneered the Internet browser market – which was acquired by America Online in 1998 – and it fell victim to Microsoft’s reputed monopolizing ways. Once boasting a 90 per cent market share, Netscape could be feeling mighty bitter over its current standing. Likewise, Microsoft Word is the last word in most homes and offices across Canada and around the globe, while Corel Corp.’s WordPerfect is near-extinction by comparison. Does that leave the possibility for a Corel lawsuit against Microsoft Canada or Microsoft in general?
Industry analyst Kevin Restivo of IDC Canada in Toronto said Microsoft Canada is unlikely to feel the sting of any American court ruling or Canadian-based corporate lawsuit.
“Any potential lawsuits will be filed against the parent company in Seattle,” he said. “The most important aspect of all this is to clarify that it’s business as usual for Microsoft Canada and for Microsoft…I’m sure business students will be studying this ruling for decades to come.”
Although Microsoft Canada doesn’t develop software – it mainly is involved in sales, marketing and technical support – the ruling did rattle the company somewhat.
“My message to our staff…stay focused on the job,” Witts said. “Ensure our customers, our partners, our friends take the view of Microsoft through [the employees].”
The Toronto Star’s view of the Microsoft anti-trust lawsuit was that any ruling is a moot point. In its April 5th editorial, Canada’s largest daily newspaper said, “the breakup of Microsoft is probably unnecessary because, as Linux is demonstrating, it (Microsoft) can’t possibly control the constant flow of new ideas that is causing a revolution in the high-tech sector every 18 months or so.”
Michael Gartenburg, vice-president for the Gartner Group in Stamford, Conn., agreed with that opinion but added regardless of the final result, Microsoft has learned a valuable lesson.
“It’s never a good thing to wake up in the morning to discover your government has declared you’re in violation of the Sherman Anti-Trust Act,” Gartenburg said. “Microsoft has learned the value of positive PR and they’ve learned they can’t treat governments throughout the world the same way they treat their competitors.”
In response to the U.S. court ruling, Microsoft president and CEO Steve Ballmer said the corporation’s intense drive for growth has been misconstrued.
“Our success has come from the opportunities Microsoft and Windows has created for consumers and companies,” Ballmer declared. “Our intense focus to move forward has at times been seen as threatening and our passion for being the best has been misinterpreted…I believe the right to appeal and the right to a cell phone is a fundamental tenant of the American legal system.”
Witts implied the ruling doesn’t reflect the true nature of the Internet economy.
“This marketplace is far from the constraints of a monopolist,” he said. “The software market is exploding…we have to displace our products too.”
The general public identifies with Microsoft as being a world leader in software products. But with the software giant also facing a potential anti-trust lawsuit in Europe, more public relations nightmares could be on the horizon.
However, Steven Prentice, president of Bristall Morgan Consulting in Toronto, said Microsoft Canada is unlikely to suffer any public backlash and criticized the American government for dragging Microsoft into court in the first place.
“The amount society has gained from Microsoft for creating the paperback book equivalent of the personal computer vastly outshines [Bill Gates’] business practices,” he said. “[The trial is] an incredible thing: you’re free to make your fortune in the U.S. but if you get successful too quickly they’ll come after you…the U.S. government is scared (of Bill Gates and Microsoft) because Microsoft software runs so much of the American economy that he can be seen as the most powerful man in the world.”
Added Gartenburg, “The (U.S.) government said Microsoft used unfair business practices to sustain a monopoly; note they didn’t say it used unfair practices to become a monopoly.”