US v Gates: Why it matters that the world puts a brake on cyber- juggernaut

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The Independent Online
Everywhere you look, Microsoft is there. Its software operates 94 per cent of all personal computers sold today. It has four-fifths of the market for word-processing programmes. It is dominant in new sales of software for running computer networks in companies. It has invested in cable, multimedia, on-line commerce and movie-making. Bill Gates, chairman and founder of the computer software giant, is even invading outer space with a plan to launch nearly 300 low-orbit satellites that will beam Internet communications around the world.

This is why the ruling by a United States judge, that Microsoft has abused its monopoly power in one area, is so significant. This could be the first time that competition law will manage to prevent the company from gaining dominance in one of its target markets.

The US has had tougher legislation than the UK against the abuse of monopolies ever since John D Rockefeller grew over-mighty with Standard Oil. The American admiration for big business has a limit. The once-dominant IBM lost a lengthy anti-trust case in the early Eighties. It was competition policy, too, that broke up telephone company AT&T into regional companies, and opened the long-distance phone market to competitors like MCI and Sprint.

The US machinery puts Britain's feeble safeguards against powerful monopolies to shame.

The question is whether the new ruling will succeed in preventing Microsoft from eliminating consumer choice in areas where it is not yet dominant. The Internet is a crucial unconquered territory, and one Bill Gates desperately wants to dominate.

Microsoft's "Explorer" browser for accessing the Internet had rapidly caught up with the main alternative, Netscape, and threatened to corner the market for the software that helps people find their way around the Internet. Microsoft is already a big provider of Internet communications, after America Online. And Bill Gates has invested heavily in the content of what people might want to access, with the creation of an on-line magazine, investment in a film company, and, through the purchase of digital rights, to images of paintings in the National Gallery and the Hermitage Museum, the notebooks of Leonardo da Vinci, and a 16-million image photographic library.

Microsoft also faces a more crucial legal case. Sun Microsystems, another software company, accuses it of breaching its licence to use Sun's Java computer language. Java is crucial to preserving competition. It is a programming language created specifically to be used with any kind of computer operating system or software, and is making wildfire gains in the business computing market. With Java, you can use Windows alongside any other software. It is a kind of hi-tech glue.

Sun charges that Microsoft has altered Java, which it uses in the latest version of its Internet Explorer, in such a way that this essential compatibility with other software would not work. Microsoft has counter-sued Sun. The outcome of this battle will be just as important as the Internet browser war.