Dragonslayer

An interview with Ralph Nader who is organizing a conference in Washington, D.C., in Nov. 1997 to explore how Microsoft is extending its near-monopolistic control of the software business into other industries, including banking, insurance, car dealerships, travel services, real estate and television.

By Jonathan Broder

Oct 10, 1997 | ralph Nader, the legendary consumer advocate, has a new enemy: Bill Gates and his software giant, Microsoft.

Nader is organizing a conference in Washington, D.C., next month that he says will explore how Microsoft is working to extend its near-monopolistic control of the software business into other industries, including banking, insurance, car dealerships, travel services, real estate and television.

He has sent invitations to lawyers, writers, academics and corporate critics of Microsoft, along with Vice President Al Gore and Gates himself. The aim, Nader says, is to begin a public discussion about Microsoft's business practices and possibly mobilize the Justice Department's antitrust division to take the growing chorus of complaints more seriously.

Microsoft spokesperson Vivek Varma has called the conference, titled "Appraising Microsoft and its Global Strategy," a "misguided effort" driven by Microsoft's competitors and said the list of speakers "reads like a rogues' gallery."

Salon spoke about the conference and the alleged Microsoft's threat with Nader and Jamie Love, the technology specialist at Nader's Center for the Study of Responsive Law in Washington, D.C.

Jim Clark of Netscape has called Microsoft an "evil corporation." Do you agree with that characterization?

Nader: The words I use is that Microsoft has strong monopolistic tendencies to their business strategy. Microsoft has this belief that if they don't control everything, they will control nothing. They have a total zero-sum view. With their 90 percent control of the operating system, which generates spectacular profit margins, they can use the money from this monopolistic position to leverage their control into one area after another. Their browser (Internet Explorer) is just one example of that.

What are others?

Nader: Well, they are moving out from software, right through the computer industry to other service industries, like banking, insurance, travel, publishing and cable. And they're moving from conduit to content as well.

Netscape still controls the lion's share of the browser market. How do you see Microsoft taking that over?

Love: In its implementation of Java, Microsoft has adopted a kind of "Java-plus" strategy. Rather than having the plain old Java code, they're using an embrace-and-extend strategy, whereby Microsoft embraces the open standard of Java but then throws in some extensions which make it perform better with future versions of Windows 95, but not at all with non-Microsoft systems. Sun Microsystems is now suing Microsoft for violating the licensing terms. We think the government could do something in the antitrust area regarding Microsoft's attempted perversion of Java.

Apart from the Java licensing issue, what is so wrong with Microsoft branching out into other fields?

Nader: First of all, apart from antitrust considerations, it's just not healthy for any economy and society to have one company play such a dominant role in even one field. It's even less healthy if that company has a dominant role in all kinds of commercial and industrial sectors. This isn't just John D. Rockefeller trying to dominate the oil industry. This is a company trying to be the toll collector at gateway after gateway on the information superhighway, using, in effect, a closed-door business strategy. The result is, innovation suffers. Venture capital for potential competitors dries up. Venture capitalists will say, "Why bother? Even if company X comes up with something that's good, it's not going to be able to deal with Microsoft's power."

You said earlier that Microsoft was moving from conduit to content. What's the problem with that?

Nader: When it comes to content involving commercial transactions, the more control Microsoft has, the more they can intimidate critical reporting on them. For example, we had people who wanted to take part in the conference, but their CEOs squashed them. This was in industries like travel and newspapers. This spills over into news reporting as well. They now have MSNBC. There was rumor last week that Microsoft wants to buy CBS. We've already seen that the TV networks handle stories differently depending on their commercial alliances. For example, when some nuclear plants in Connecticut had to shut down last summer, CBS, which is owned by Westinghouse, and NBC, which is owned by General Electric, never reported it. So if Microsoft actually buys CBS and establishes more alliances, say with Disney , which owns ABC, the penumbra of their intimidation is going to be extraordinary.

Next Page: Big Brother

• View blog reactions