Microsoft: A Clear And Present DangerMicrosoft: A Clear And Present Danger

When the U.S. Court of Appeals overturned Judge Thomas Penfield Jackson's verdict in the Microsoft case, two thoughts came to mind: We no longer have to worry about one of America's most valuable assets in the world market becoming dismembered, and the specter of Microsoft continuing its aggressive business tactics (and possibly even accelerating them) is truly scary. What popped into my head was the phrase, Clear and Present Danger.

In a 1919 case (Scheck vs. United States), Judge Oliver Wendell Holmes enunciated the "clear and present danger" test. He wrote that the question was whether the actions of the petitioner were such to "create a clear and present danger that they will bring about substantive evils Congress has a right to prevent." Although he was talking about speech, not software, the test seems relevant.

The Appeals Court unanimously reaffirmed Judge Jackson's ruling that Microsoft was a monopoly and had acted in an illegal manner. Of key importance, now, is the future behavior of the company and the impact on the consumer. The picture is not a reassuring one. Microsoft gives every indication that it is not satisfied with its niche as the owner of the operating-system marketplace, and that it intends to leverage its monopoly to take over many more segments of commerce. Some examples:

Reminiscent of the deal years ago in which AOL adopted Internet Explorer, Microsoft recently tried to get AOL to drop RealNetworks' Real Player in favor of Windows Media Player. Of more significance to AOL, Microsoft also wanted access to AOL's crown jewel, Instant Messaging. Further, AOL would have to agree not to sue Microsoft over any future business dealings. In return? AOL would get to keep its coveted space on the desktop when Windows XP is launched. AOL has refused the offer--so far.

As reported by The Wall Street Journal, Kodak engineers were dismayed to see that when a Kodak digital camera was hooked up to a computer running a test version of XP, Microsoft's own photo software was launched automatically, instead of Kodak's. It was a surprise to the engineers because Kodak was among the companies working with Microsoft to develop a standard for transferring digital photographs. Even more distressing, the Microsoft photo software prompted users to send their images for printing to photo companies (not Kodak) who would pay Microsoft a fee for each photograph routed by Windows XP.

A beta version of XP attached "Smart Tags" to keywords on Web pages accessed by users. These tags would direct a person to a Microsoft affiliated site. The arrogance of this feature was that it would allow Microsoft to piggyback onto a Web site without the permission of its owner. To Microsoft's credit, after hearing the ensuing uproar, it did decide to eliminate Smart Tags from the production version of XP--for now.

When XP is installed, users will be asked to sign up for Microsoft Passport, a service which holds credit-card numbers and permits people buying on the Web to do so without entering their credit-card number each time. Microsoft will thus establish itself, if it can, as the payment intermediary for consumer Web purchases.

HailStorm, a new Microsoft service, will have Net-enabled calendaring and address-book services for Windows users. The information, which will obviously contain a plethora of personal information, will be stored on Microsoft servers.

The bottom line is that Microsoft wants to be the gatekeeper for E-commerce. While there isn't anything wrong with that desire, there is a lot wrong with Microsoft continuing to use its monopoly with the desktop operating system as a weapon to reach its goal.

There is no reason to believe that Microsoft will change its tactics if left unconstrained. Do we have any assurance that the company will not treat its customers, ultimately, as it is treating its competitors? For a company to have so much power, especially one that sees nothing wrong with its past actions, is a clear and present danger.

Next time, I'll offer some ideas as to what I think is a reasonable and minimally intrusive solution to this potential problem of Microsoft's ever-widening domination.

Robert M. Rubin is CEO of Valley Management Consultants, a firm specializing in E-business and information-technology strategy, organizational design, and evaluation. Prior to joining VMC, he was senior vice president and CIO for Elf Atochem North America, a $2 billion diversified chemical company. Rubin is a recipient of multiple industry awards and is a contributing editor to information and a member of its advisory board. He can be reached at [email protected].