Antitrust case weakens USA
By Lester C. Thurow
usatoday.com
No one knows for sure, but it certainly looks as if the appellate court reviewing the Microsoft antitrust case will decide not to break up the company. That was the inference of nearly everyone who listened to the questions the judges recently fired at government lawyers.
Whatever happens, the impact of this lawsuit will reach far beyond Microsoft.
Big international companies may sometimes bully their rivals at a cost to consumers. Microsoft is being accused of doing just that to fend off a threat posed by Netscape's innovative Internet browser.
But the alternative -- American companies too weak to compete globally -- is far worse. If the government looks myopically at U.S. antitrust laws, it will hurt the very consumers it aims to help.
Microsoft, like other big American companies, uses its size to its advantage. By setting the standard for PC operating systems and other office software, it uses alliances with other U.S. technology companies such as Intel, Hewlett-Packard and Compaq to wield enormous influence on how computers evolve. This, in turn, provides many benefits to American consumers.
If Microsoft is permitted to win the competitive game, Americans will get first crack at the fruits of innovation. Being first can generate windfalls for workers, consumers and investors.
These economic realities are why some specialists worry that Europe's and Japan's lead in wireless telephones -- Internet access on a cellular phone has been a reality for many months in Japan and Europe -- bodes ill for U.S. companies and our economy.
The future's victors?
At recent telecommunication conferences I've attended, the Europeans and the Japanese are almost cocky in their belief that they will be the ultimate winners over U.S. companies in this field. American companies, they like to point out, are losing market share and are no longer the leading-edge providers of new technologies.
While they lost out to Microsoft on computer operating systems and applications, their lead in wireless telephones will make them the technological leaders, and Americans, the followers.
Ask them what they think about the Microsoft antitrust case, and they cannot stop the glee from breaking out on their faces.
Why? A powerful American competitor may be removed from the game.
Out of the picture
From their standpoint, Microsoft won't be a factor in wireless software. If the government proposal actually were carried out, there would be two new Microsofts that would have to get government permission to enter any new business and even then would be forced to work under the supervision of a court-appointed supervisor. In addition, they would have to share their software as it is being developed with all of their potential competitors -- including even those that are not American firms.
America needs a powerful American company, such as Microsoft, in the personal-computer arena in order to balance a Japanese Sony in game machines and Web TV and a European Nokia and a Japanese NTT DoCoMo in cellular phones. If we have it, we'll all get better products at lower prices and, on average, American workers will earn higher wages, and American investors will receive higher rates of return.
While it would be a mistake to view Microsoft's fate simply in terms of Us vs. Them, it is ironic that the Clinton administration, which came to office proclaiming the importance of strategic global economic issues, left office so determined to bring down the nation's flagship technology company.
Any other country would have sold its birthright to have Microsoft as its flagship high-tech company.
Lester C. Thurow, a professor of economics and former dean of Massachusetts Institute of Technology's Sloan School of Management, is a member of USA TODAY's board of contributors. |
