There is one sure outcome of the ruling that Microsoft violated antitrust laws by abusing its monopoly. The Seattle giant will never be the same again. Whether it is broken up into competing 'Baby Bills' or forced to open up its source code or whatever, Microsoft will never have the same overweening power that it has wielded in the recent past.
This is partly because PC operating systems will become relatively less important as people increasingly use television and mobile phones to interact with the internet. In these areas, Microsoft is powerful but not the omnipotent force it is in the world of personal computers, where its market share exceeds 90% and it completely dominates key software such as spreadsheets (through Excel) and word processing (through Word). But the main reason it won't be the same is that it has been rumbled.
It has been guilty of hubris. Microsoft was never prepared to admit it was a monopoly, let alone that it abused its position. Yet look at the facts. It loses money on Hotmail, which it is forced to give away free because of all the alternatives on offer, yet makes a mouth-watering 40% net return on sales on its overall business. If there had been a number of successful alternative operating systems then the price would have come tumbling down. It is even possible that manufacturers would have given them away free in order to attract a captive audience. Of course, PC users benefit from having an operating system that is a world standard. But if you have such a dominant monopoly position you also have responsibilities. A monopoly operating system should be operated as a common carrier - allowing anyone that wants to sell products on to it at a 'fair' price. That's the only way to stimulate the maximum competition. Instead you get the ludicrous position where a twentieth century version of Gresham's law operates - expensive software drives out cheap alternatives. Why else did I have to give up a cheap and cheerful spreadsheet and buy Microsoft's Excel, except because the rest of the world uses it because it comes as part of the Microsoft package. I'm still holding out with a word processing package that came free with my Macintosh, but I wonder for how much longer.
Microsoft's armlock on operating systems is self-reinforcing because software firms write for Microsoft first and for Macs and other systems later on, if at all. The latest example is Autonomy of Cambridge whose intelligent search engine Kenjin - launched this week - will run on, surprise, surprise, Microsoft's operating system. When I tested one of the recent Mac operating systems I was surprised not only to find that Microsoft's browser was the default option but also that it would bounce back as the default in certain circumstances even when I had switched over to Netscape. Where's the competition in that?
Most users of personal computers simply don't want the ever more complicated versions of Excel and Word that Microsoft produces to keep the profits engine turning. They want something that does simple tasks quickly and reliably. Competition is the key - and we will see more of it once Microsoft's anti-competitive practices have been curbed. If Microsoft is tamed or broken up, it will be good for the consumer and ultimately good for Microsoft. Think what those thousands of brilliant programmers in Seattle could do if their creative and entrepreneurial talents were unleashed.
