Economist says states' antitrust penalties are good for consumers

Thursday, April 11th 2002, 12:00 am
By: News On 6

WASHINGTON (AP) _ The antitrust penalties sought against Microsoft by nine states will help consumers whether or not Microsoft's Windows operating system monopoly is degraded, an economist testified Thursday.

Carl Shapiro, an economics professor at the University of California at Berkeley, said the added pressure placed on Microsoft by a new range of non-Microsoft products that work as well with Windows will ultimately bring new inventions.

``Microsoft's rallying cry in this case has been 'freedom to innovate,''' Shapiro testified, ``An effective remedy will ensure that Microsoft's rivals are also free to innovate.''

The states argue that Microsoft's efforts to keep its Windows monopoly safe from competition has hurt consumers by destroying nascent technology threats.

The nine states want U.S. District Judge Colleen Kollar-Kotelly to force Microsoft to create a stripped-down version of its flagship Windows software that could incorporate competitors' features. The states also want Microsoft to divulge the blueprints for its Internet Explorer browser.

The federal government and nine other states settled their antitrust case against Microsoft last year for lesser penalties.

The original judge in the case, Thomas Penfield Jackson, ordered Microsoft broken into two companies after concluding that it illegally stifled competitors. An appeals court reversed the breakup order and appointed Kollar-Kotelly to determine a new punishment.

Shapiro said that under the states' penalties, consumers wouldn't be put off by the lack of programs available for the chief competitors to Windows: Apple Macintosh computers and the Linux operating system.

The popular Internet Explorer browser would be on both operating systems, and Microsoft would have to translate its market-leading Office productivity suite to other operating systems.

Currently, Microsoft makes Office only for Windows and Macintosh. On at least one occasion, Microsoft threatened Apple with discontinuing the Office translation _ and seriously jeopardizing Apple's business _ if Apple didn't heed Microsoft's demands.

Shapiro also said the antitrust penalty should cover emerging technologies such as cell phones, handheld computers and interactive television devices because it is impossible to predict which will provide the best choice for consumers.

``The remedial order should take a broad view of what constitutes a 'nascent technology' that might threaten Microsoft's operating systems monopoly in the years ahead,'' Shapiro wrote.

On Wednesday, Princeton University professor Andrew Appel testified that it would be only moderately more difficult for Microsoft to root out problems in a modular version of Windows than in the version currently on the market.

Microsoft has argued that it would be impossible to test the more than 1,000 possible configurations of Windows with different functions, such as Internet access and instant messaging.

Appel told Kollar-Kotelly that with thousands of types of printers, monitors and other pieces of computer hardware, Microsoft and its stable of outside testers don't test every way Windows is used.

There are about 70,000 Windows applications, Appel said. The number of tests of every possible combination of those applications would be ``more than the number of atoms in the universe,'' he said.

``It's mathematically impossible to test every possible configuration in the universe, so Microsoft tests a representative sample,'' Appel said.

States that rejected the government's settlement with Microsoft and are continuing to pursue the antitrust case are Iowa, Utah, Massachusetts, Connecticut, California, Kansas, Florida, Minnesota and West Virginia, along with the District of Columbia.