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What The Media Tell Americans About Free Enterprise

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March 1998


Networks Ignore Weaknesses in Justice Department Case
The Media vs. Microsoft

Early this month, Microsoft founder Bill Gates made the news by coming to Washington, D.C. to defend his company against charges that it was a monopoly. The networks gave Gates’ testimony before the Senate Judiciary Committee ample air time, but failed to present viewers with the most persuasive case free-market advocates make in defending Microsoft against government antitrust bureaucrats.

Media Research Center analysts reviewed all of the stories about the Microsoft case on ABC World News Tonight, CBS Evening News, NBC Nightly News, and CNN’s World Today during the first two weeks of March. There were a total of nine stories about the Redmond, Washington software giant’s troubles with the Justice Department.

All the stories thoroughly reported the case against Microsoft. Dan Rather, on the March 3 CBS Evening News, wondered whether "some policing may be needed along the information superhighway," where "fellow-travelers say Gates is trying to run them off the road." Expanding on this theme, correspondent Sharyl Attkisson added that "Microsoft told computer makers that if they wanted to install Windows, they’d have to carry Microsoft’s browsers, not their rivals’. The government said that was anti-competitive and illegal, and ordered it stopped."

That evening’s ABC World News Tonight devoted three full stories to the case. Correspondent Linda Douglas first reported that rival computer companies "charge Microsoft is using unfair tactics to try to dominate access to the Internet." In the second report, correspondent Jack Smith visited Microsoft rival Netscape’s headquarters. The report was entirely from Netscape’s point of view, with Smith charging that Microsoft "forced computer makers to take its version [of Internet browser] by using its dominance of the software that makes most of the world’s computers work." This, Smith said, lets Microsoft "call the shots."

ABC’s third report of the evening featured Peter Jennings interviewing journalists Gina Smith and Robert Cringely. They both agreed that Microsoft was a threat to consumers. Accused Cringely: "If a Japanese or Korean company was doing what Microsoft has done with the distribution of Internet Explorer, it would be called dumping."

Only NBC Nightly News interviewed an independent critic of the Justice Department. On March 3, correspondent Pete Williams reported that "some in Congress worry that Microsoft is too big, a monopoly threatening to dominate the computer Internet." But he also ran a soundbite from the Cato Institute’s Robert A. Levy, who equated Justice’s case against Microsoft with its case years ago against IBM: "It was resolved not by lawyers in the Department of Justice, but by guys like Bill Gates working out of the backs of garages and dreaming up products that Justice Department lawyers never even imagined could exist."

But there’s one thing all these reports ignored — Microsoft’s spotty record in tying products to its operating system.

Levy, in a Cato Policy Analysis, points out that a look at the last time Microsoft was accused of an anti-competitive tying arrangement should ease monopoly concerns. In 1995, "Antitrust Division head [Anne] Bingaman was reportedly concerned about the link between Windows 95 and the Microsoft Network (MSN), an Internet service provider intended to compete against America Online (AOL), Compuserve, and others." Learning that Windows 95 users could, with a few mouse clicks, bring up an AOL or Compuserve icon, the Justice Department dropped its threat to stop sales of Windows 95.

"In retrospect," Levy argues, "Bingaman’s concern was just plain silly. MSN now loses an estimated $200 million annually providing service to fewer than three million customers. AOL, by contrast, has nine million subscribers and will add nearly three million more with its acquisition of Compuserve’s consumer business." According to Levy, "Whatever competitive advantage Microsoft may enjoy in the sale of operating systems, the company has been singularly ineffectual in leveraging that advantage. Customers refuse to buy a product they do not like." No report mentioned this argument.

Levy further notes that Microsoft could comply with Justice Department orders by offering Windows 95 without its Internet browser at the same price it offers Windows 95 with the browser. "It’s all quite remarkable; [the Justice Department’s] stance is unfathomable. Essentially, [it] is bent on forcing Microsoft to offer PC makers an inferior product." Reporters have yet to explain how this will help computer buyers.


Rich Noyes


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