Audrie Krause is the founder and executive director of NetAction, a non-profit organization whose Consumer Choice Campaign has been one of the few organized grassroots campaigns against the Microsoft monopoly in the US.
NetAction is dedicated to educating the public, policy makers, and the media about technology-based social and political issues, and to teaching activists how to use the Internet for organizing, outreach, and advocacy.
This interview took place in January 1998. Microsoft had recently agreed, under threat of a contempt of court citation in the US Department of Justice antitrust lawsuit, to allow personal computer manufacturers who install Windows to remove the Internet Explorer icon from the desktop.
CorpWatch: When did NetAction first start to be concerned with Microsoft, and why?
Audrie Krause: We launched our consumer choice campaign in May of '97. It was the result of some discussions that I had with a few of our advisory board members. We wanted to identify consumer issues that were not being adequately addressed in terms of Internet-based grassroots organizing. Microsoft was at the top of that list.
CW: What are the implications of Microsoft's market dominance on computer users?
AK: Right now, if you're a consumer and you want to buy a computer, you have basically one operating system, if you're buying a PC, that you can choose from. The PCs are all, 100% of them, operating on Microsoft Windows. That isn't really a choice!
There are other (PC) operating systems around. Linux is not particularly something that the average Internet or computer user would want to have. IBM has an operating system, but they've essentially conceded the market for consumer computers to Microsoft, and are really only selling it as an alternative to their business customers.
CW: From the perspective of a computer user, there are advantages to having an integrated system: you don't have to know about all the different components that make your computer work. One could argue (and some do) that the Microsoft's combination of operating system/Internet browser solves that problem.
AK: It's really talking about apples and oranges. What consumers want is for their computers to work well and smoothly; they want to be sure that whatever software they're using is going to work with their computer, and everything is going to work together. That's not the same thing as saying you want everything to be a Microsoft product.
It doesn't all have to be Microsoft to operate well together. The reason that it seems that way is that Microsoft hasn't been playing fair. Microsoft hasn't been letting software developers have access to enough of the information about its software and its operating system to ensure that everything operates smoothly with Windows. And that's a deliberate move on Microsoft's part to give them more of a market share -- because you'll have more problems with your use of the computer if you're using non-Microsoft software with the Microsoft operating system.
The recent action by Netscape in releasing its source code is the sort of thing that Microsoft should be doing -- making it available so that all of the developers are able to develop products that are compatible. That's in a consumer's benefit. That means that there's a choice of products.
Of course, there are different ways of determining good products from less adequate products, and to a certain extent that's a personal choice, but to some extent it's also a matter of some things just are better products. They're easier to use and understand.
CW: So if Microsoft released its source code, we wouldn't be sacrificing interoperability, just monopoly.
AK: It wouldn't be that the only way to get interoperability would be to have one company responsible for producing everything related to the use of a computer. You want interoperability, but you want it with a vast array of products. Televisions and VCRs would be another example. When you buy a television and you buy a VCR, you expect them to operate together, no matter what brand you buy.
CW: As you describe, Microsoft's market dominance has already reduced consumer choice for computer users. What are the broader social implications of a Microsoft monopoly?
AK: Ultimately, what we should be concerned about is control of information, which is the foundation for control of society. Microsoft's growing monopoly gives it increasing control of Internet content. Over time, more of our information will be provided via the Internet, so more people will be relying on it for the information that shapes their world view. One of the strengths of the Internet as it has evolved is that there can be a free flow of information because it goes directly from one computer user to another. If Microsoft ultimately has a monopoly on content, Microsoft's world view will be reflected in that content.
CW: Why did the US Department of Justice go after Microsoft on such a narrow issue as browser bundling, as opposed to a broader full-fledged antitrust action?
AK: The work the Justice Department is doing on bundling of the operating system into the computer at the manufacturing level is only one aspect of a much larger antitrust suit. It's gotten a lot of attention because the Justice Department asked for a million dollar per day fine against the company on that particular issue -- that certainly caught everybody's attention, particularly the press. But the recent settlement on that issue does not resolve the government's entire case. Far from it. There are a lot of other issues, and the case is ongoing.
Much of it is really new territory because we're dealing with a fairly new industry, and new ways of looking at things.
CW: Do you think US antitrust law, developed during the "Industrial Age," is a relevant mechanism to address monopolies in the "Information Age"?
AK: I would refer people to the new economic theory, developed primarily by Brian Arthur, but there are others now espousing it, which contradicts the view of the Chicago School of Economics that the free market will solve all problems. There are industries, and they make a good case that technology is one, and communications is another, in which the free market does not solve all the problems. Often it's just the luck of who comes along first with a product: that product winds up being the product everybody uses, even if better products are developed later.
The fact that antitrust law was developed in relation to other types of industries, is really irrelevant to the question of whether consumers have a choice of products in technology. You're still dealing with the same thing in terms of what the law is intended to do. The law is intended to protect competition, not the competitor. When you look at it from the point of view that the purpose of the law is to ensure competition, then it's easy to understand that the point of competition is to give choices to the consumer. In the technology industry, we have some competition and some choices with regard to hardware, but for personal computer users, there's no competition for software. We're all using the same operating system and we're increasingly using the same software, because other developers can't develop products smoothly with Microsoft's operating system.
CW: What do you think consumers can do to combat the Microsoft monopoly?
AK: Consumers need to continue to put pressure on the Justice Department to expand it's investigation and enforcement, and we also need to thank them for what they've done so far. Consumers need to communicate their concerns by letting policy makers and lawmakers at the state and the federal level know that they are concerned that one company can dominate the market. And thirdly, consumers can communicate to the industry that they want to have choices. Industry will be more motivated to look for ways to put products on the market that give people choices if their customers make it clear that they want choices.
Computer manufacturers have pretty much been forced to go with Microsoft because there aren't any real alternatives, and the licensing arrangements that Microsoft has with equipment manufacturers tend to require that they use those products exclusively. The consent decree in 1995 [an agreement between the US Department of Justice and Microsoft that bars the company from forcing anticompetitive licensing agreements on personal computer manufacturers] addressed one aspect of that: equipment manufacturers had to pay a fee to Microsoft even if they weren't installing their product on a particular computer. That was a blatant enough antitrust violation that the government got an agreement that Microsoft would stop.
But there are lots of ways of gaining monopoly control, and Microsoft is using all of them. Some of them are easier to understand and see, and some of them are more subtle. But when you have most of the industry afraid to even speak out, it should be apparent that there's a problem. And very few other businesses are willing to say anything at all about Microsoft.
CW: Is that beginning to change with this suit?
AK: No. Sun filed suit against Microsoft; Netscape has been very visible in their objections. Those are good signs, but I think that many other people in the industry are watching to see what happens to those companies. And if they get killed in the process, then it's just going to be that much more unlikely that somebody else will speak up. If they're successful, it may make a difference.
The turn of public perception with regard to Microsoft is a factor in their recent settlement. Microsoft started out being as arrogant as possible, basically saying to the government, "Ok, if you want us to give them an alternative, we'll give them an alternative that doesn't work." That PR blew up in Microsoft's face. People could understand that it was just outrageous in terms of a response. They seem to be trying very hard to clean up their public image as a result. The fact that there's been some negative perception of Microsoft is a good sign. If the industry and the consumers can build on that, and look more closely at what Microsoft is doing, there's plenty more there to criticize.
CW: What made Microsoft shift tactics and agree to a partial settlement?
AK: I think it's that they got a lot of critical press. Rather than being portrayed as this wonderful company, which is how Microsoft's normally been portrayed, they were being portrayed as arrogant and bullying. The bad press is what ultimately got to them.
Keep in mind that just before the settlement happened one of the mainstream publications came out with a poll that said Microsoft is the most admired company in the United States. It's hard for me to see how Microsoft can be the most admired company in the U.S. when the Justice Department is looking into allegations that the company is violating laws.
CW: The Department of Justice case has focused issues of Microsoft's dominance on how it plays out in the U.S., and Microsoft works internationally. What is Microsoft's impact in the global economy?
AK: It's in some ways an even more dangerous situation. Microsoft is very concerned about the pirating of its software in many other countries, and is basically promoting the idea that government should be setting up these non-governmental police forces to enforce the copyright laws on their software.
CW: Is Microsoft hiring people in different countries to play that role?
AK: They're promoting that idea in diplomatic discussions that go on at the international level.
CW: How are governments and citizens around the world responding to Microsoft's efforts to encourage the creation of non-governmental copyright police?
AK: We frequently get email from individual Internet users who are concerned about Microsoft's activities in other nations, so we know that people outside the U.S. share our concerns. But we haven't made a concerted effort to compile information on activities outside the U.S. because of our limited resources. James Love at the Consumer Project on Technology has been monitoring some of the developments as they relate to copyright issues, so I can refer readers to that organization http://www.cpt.org for more information on the international issues.
CW: NetAction has been doing work on the California Educational Technology Initiative partnership, which involves Microsoft, GTE, Fujitsu and Hughes Electronics in developing proprietary network technology on an exclusive basis for the California State University system. That's not the only thing they're doing in the public sphere. In the US, Microsoft has a Libraries Online! "grant" program that perpetuates Microsoft software throughout the public library system.
AK: You can't use Netscape on the library system that Microsoft donates. I just got an email today that I thought was very interesting. It was commentary on a story in the British Guardian newspaper, where they're interviewing Liz King, Microsoft's general manager for education worldwide. They ask her about Microsoft's priorities for its role in education, and here's what she said their priorities were: 1. Make money; 2. Increase Microsoft's market share in schools; 3. Education is a strategic marketplace for us, we're educating the next generation of workers who will purchase our products.
King makes no reference to improving the way children learn by using information technology, no reference to provisions for appropriate technology to help teachers teach, no reference to helping governments reach their literacy targets, no reference to helping schools prepare for the next millennium through successful implementation of their particular educational policies. There's no public interest there! There's greed, greed, and more greed.
CW: What is the appropriate role for the private sector to play in developing technology?
AK: I can only address this from my point of view, which is that corporations should not be able to play both sides of the fence. They're treated like individuals in some respects and absolved of all individual responsibility in other respects. We give a lot of breaks to the corporate sector, and they have an obligation to play their part in making society a better place. Why should the corporate sector get away with the idea that the only thing they have to worry about is making a buck?