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Microsoft Treading Antitrust Waters?

Last week the Federal Trade Commission (FTC) announced that it will begin a non-public investigation of Microsoft for allegedly crippling Windows 2.1 in favor of OS/2. The investigation stems from a 1989 press release in which Microsoft and IBM discussed the direction they would take in respect to Windows and OS/2. At the time, the companies agreed that Windows would serve the low end of the market and OS/2 would take the high end. Since then, quite obviously, Microsoft has changed its mind about what Windows will do and has put its OS/2 work on the back burner.

There are a couple of possibilities here. First, the FTC investigators have been in another part of the galaxy for the past year and haven’t seen what Microsoft is doing with Windows. That’s possible, but unlikely. Second, IBM and Microsoft were (and perhaps still are) in some sort of collusion designed to reduce competition. That’s a no-no in the eyes of the FTC and is quite likely, given Microsoft’s bid to control even more of the software industry than it currently does and IBM’s tainted history with such things. Third, the investigation is broader than one might be led to believe from the start, and Microsoft’s hegemony of both the operating system and applications worlds looks bad in terms of fair competition. The idea here is that Microsoft applications developers can just talk to the Microsoft OS developers over lunch, which gives both an advantage over third party developers. It’s no insight that Microsoft has taken advantage of its position as the developer of Windows to release the most powerful and most popular Windows applications. Microsoft has something like five of the top ten Windows applications, and those five are in the upper half of the ten. If Microsoft were found guilty of unfair competition, I doubt any of its competitors would be at all upset.

Although this third possibility is the most likely, there are arguments on both sides. For instance, Borland negotiated with the Windows group at Microsoft to release a version of its Turbo languages that could create Windows applications before Microsoft’s own languages feature the same level of support. On the other hand, developers have been complaining because Microsoft released only a beta version of the Object Linking and Embedding (OLE) specs in December, but had been shipping a version of PowerPoint that used OLE for several months. Of course, like Apple’s AppleEvents in System 7.0, it will take quite some time before programmers become familiar with OLE and start using it, so it may not be that big of a deal.

No matter what happens, it seems that Microsoft is clearing the legal decks (or was that docks :-)) for a large legal battle. Bob Cringely tells me that Microsoft is trying to settle other litigation quickly, out of court if possible, in preparation for the potential antitrust suit. This might mean an early settlement to the Apple suit, though if Microsoft settles out of court, Apple will certainly extract some royalty payments for Windows. While I’m on that subject, it looks as though I was incorrect when I wrote that the judge might be moving the whole thing into court to decide the issue once and for all. It now seems that he has limited the issue to the simple contract dispute and isn’t allowing Apple to bring the larger issues into the case at all.

Information from:
Bob Cringely — [email protected]
Microsoft propaganda

Related articles:
MacWEEK — 19-Mar-91, Vol. 5, #11, pg. 75, 77
COMMUNICATIONS WEEK — 11-Mar-91, pg. 6
InfoWorld — 18-Mar-91, Vol. 13, #11, pg. 1
InfoWorld — 11-Mar-91, Vol. 13, #10, pg. 1
PC WEEK — 18-Mar-91, Vol. 8, #11, pg. 1, 6

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