WMU News

Consumers 'tricked' in reported Microsoft deal

Nov. 1, 2001

KALAMAZOO -- A reported deal between Microsoft Corp. and the U.S. Justice Department is coming under fire from a noted antitrust expert at Western Michigan University.

The Associated Press, Wall Street Journal and New York Times today reported a deal that would apparently institute governmental supervision of the software maker for the next five to seven years, but allow Microsoft to keep its Windows software virtually unchanged.

"The Department of Justice appears poised to abandon consumers," says Dr. Norman W. Hawker, an associate professor in WMU's Haworth College of Business and a fellow with the American Antitrust Institute. "The Bush administration won a major victory in September when the Court of Appeals held that Microsoft was indeed an abusive monopolist. There is simply no justification for the administration to settle this case on terms that don't even amount to a slap on the wrist; the reported remedies provide no real protection for consumers against Microsoft's continuing anticompetitive conduct."

Hawker believes consumers will pay for the administration's "generosity," including higher retail prices for Windows. But historically, he contends, Microsoft has exploited its monopoly power in less obvious ways.

"Consumers pay for Microsoft's Internet Explorer Web browser, but it seems like free software because its cost is hidden in the purchase price of Windows," he notes. "Consumers will also pay hidden charges for bundled products such as Windows Media Player, with the company passing on its costs to online vendors of video and music, and those companies passing the cost on to the public. Consumers don't purchase raw steel, but when steel prices go up for General Motors, the price of cars goes up for consumers. The same rule applies in the computer industry.

"Last night was Halloween, and if the reports of a settlement are true, consumers got tricked, not treated."

Hawker, who has written numerous articles on antitrust law and the Microsoft case, is a former assistant attorney general for Michigan.

Media contact: Jessica English, 616 387-8400, jessica.english@wmich.edu

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