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The Breakup

by Kevin Carey

G21 Staff Writer

Day One

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Kevin Carey
Photo of Kevin Carey.
KEVIN CAREY, no friend of Microsoft, argues that the proposed breakup is no solution to the near monopoly problem.

In the matter of Microsoft products I am by no means indifferent. First, and fundamentally, the software licensing system, exploited so skilfully, is pernicious. Secondly, the combination of the near monopoly and the upgrade treadmill are expensive. Thirdly, the products are not very good. Finally, though, the thing that makes me most dislike the good people of Redmond is the system's nasty habit of informing me after an absence of ten minutes or so that I have performed an "illegal operation".

It is not, then, with an excessive degree of sadness that I have followed the legal case. I have remarked before that any company is in danger if the majority of its customers want it to fail even if that means private and corporate loss. Thus it is with Microsoft which is why, perhaps, so many have so warmly welcomed the flawed proposals of the Federal Government and 19 States to break up the leviathan. We are told, quite incorrectly, that this is a case which requires a remedy identical to that of Standard Oil or AT&T. My incredulity at the naivite of the Microsoft break-up proposals is only matched by horror at the enormous fees lawyers are receiving when they are clearly technologically illiterate.

Anyone can understand the simple proposition that if one corporation has an oil monopoly it might be useful to break it into a number of oil selling companies in order to generate a competitive market. The same goes for a telephone monopoly. but in the Microsoft case if you break the company into two pieces, one with an operating systems monopoly and one with an applications monopoly where is the improvement? As long as the two new companies, selling complementary rather than competitive products, check that their new developments are compatible what is the fundamental difference between what happens now within Microsoft and what would happen between its two inter-dependent offspring? It seems to me that the simple desire of the authorities to be seen to be doing something has rather obscured the initial problem so that the proposed solution is irrelevant.



A division tool.


KEVIN CAREY is social entrepreneur, economist and Director of the UK's humanITy. He can be reached via e-mail at "humanity@atlas.co.uk".

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