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Monday, May 18, 1998 Published at 10:43 GMT 11:43 UK

Bashing Bill Gates

BBC Economics Correspondent Ed Crooks looks at the battle facing the Microsoft billionaire Bill Gates.

[ image: Ed Crooks, economics correspondent]
Ed Crooks, economics correspondent
Spare a moment, if you can, to feel sorry for Bill Gates. True, he is almost the richest man in the world, and he doesn't need your sympathy.

True, he is loathed by those who refer to Microsoft as the Evil Empire. But he is having a hard time at the moment, and it isn't all his fault.

The US Federal Government, a number of states and rival companies are all accusing Microsoft of being an anti-competitive monopolist.

Though they have a bit of a case, when they suggest that Microsoft should perhaps be broken up, its attackers are going much too far.

Gates warns of recession

Microsoft did itself no favours with its heavy-handed response - a round-robin letter signed by the heads of most of America's leading computer companies and a rally in New York.

Its claim that unless it gets its way, the long boom in the United States will come to an end and the economy will be plunged into recession is ludicrous.

But Bill Gates has every right to be upset that what was initially quite a minor technical point has been blown up into a fully-fledged attack on his company.

The technical point is Microsoft's software for using the Internet - Explorer - which it includes in the package with Windows 95 and 98.

The US Justice Department thinks that gives Microsoft an unfair advantage in competition against rival Internet browsers - specifically Netscape's.

Level playing field

Microsoft's Internet Explorer has been growing fast - last year its share of the market rose from 20% to 40%.

The authorities are right to make sure that all types of software can compete on a level playing field.

But that is a long way from saying that Microsoft is a wicked monopoly, and should be broken up.

The case is often made that Microsoft software is used on 80% to 90% of the world's PCs, even though it is inferior to, for example, the Apple system, and that this must prove that Microsoft is using unfair tactics to stay on top.

We've been here before

But the dustbin of history is full of technically "superior" products - Betamax, the Squarial, DAT - that were not superior enough to make people want to buy them.

Windows came to dominate the PC software market because lots of people chose to buy it. And when something genuinely better comes along, people will buy that instead.

IBM was pursued by the US Government for years in a very similar anti-monopoly case, which was eventually abandoned in the 1980s.

Shortly after that, IBM's dominance of the computing industry was shattered by the rise of the PC - and, among others, Microsoft.

It seems highly likely that the case against Microsoft - and Microsoft itself - will go the same way.

It is easy to portray Bill Gates with his 30bn (give or take a few billion) fortune as a modern robber baron. But we might as well let him enjoy his place in the sun - it's not going to last.

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Internet Links

Committee For the Moral Defence of Microsoft

Collection of Microsoft anti-trust material from anti-MS group

Microsoft's own view

Competition in the Software Industry - from

Department of Justice Anti-trust division

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