Leading Article: Too little, too late to stop virtual monopoly

YOU COULD be reading these words on the Internet, at the website address above, in which case the chances are you got here by using a piece of software called Internet Explorer. Or you may be one of the majority of the population of Britain who have never used a computer, in which case you might be forgiven for thinking that the threatened court case concerning Explorer in the United States is irrelevant. It is not. The Internet, the world-wide web of computers linked by telephone lines, increasingly forms the basis of the "weightless" economy which will determine our prosperity in the future. Already, one corporation has built a position of unhealthy dominance over this virtual infrastructure.

Microsoft, headed by Bill Gates, has pursued that trajectory so familiar to capitalism: creative innovation, dazzling success, wealth beyond dreams and, finally, attempted monopoly. As technological change accelerates, Mr Gates has followed this path unusually quickly. How we cheered when he outwitted and outsold IBM, the previous dominant player, which had grown fat and monopolistic itself. How we admired the entrepreneurial skill with which he built up his company and brought high-powered computing within reach of millions. But how we began to grow doubtful when Mr Gates started to abuse his dominant position in operating systems (the basic software which runs computers) to lever himself into a dominant position in related markets.

First came the irritating quirks which we suspected, but could not prove, were deliberately introduced to make Microsoft programs incompatible with competitors' software. Then the Internet started to expand and Mr Gates, wrongfooted by this change, used his market muscle to catch up. Nine-tenths of the world's personal computers are already sold with his Windows software, so he decided to give away Internet Explorer free as part of the package. Explorer is a "browser" program, the gizmo you need to get on the Internet and find your way around. It is not as good as Netscape Navigator, but it works and it is free - so who is complaining? Well, consumers save money in the short term, just as they do when Rupert Murdoch sells his newspapers at below cost price. But if competitors are driven out of business, then we all lose out in the end - as we have seen countless times before, once a monopoly is established, prices rise to exploit it.

Now it looks as if the threat of legal action has forced Microsoft to offer concessions, but although American standards are much tougher on such anti-competitive practices than ours, we suspect they will still be too little, too late. The Competition Bill going through Parliament here is long overdue, but already out of date. On both sides of the Atlantic we need much faster responses to the likes of Gates and Murdoch. We need a "trustbuster" able to stop dodges like the free Explorer bundle as soon as they are spotted and then force dominant companies to prove they are acting in the public interest.

Meanwhile, if you are on the Net, why not go to www.netscape.com and download a copy of Navigator, which is now also free, and use that instead? Strike a small blow for consumer choice.

Comments