Eight Years Later, Is Microsoft Still a Monopoly?

Eight years ago this week, Judge Thomas Penfield Jackson of the U.S. District Court of Washington, D.C., officially declared Microsoft a monopoly. These days, the company is still fighting, and losing, antitrust cases, though mostly in Europe. But it's hardly the all-powerful colossus it was when Jackson made his decision.

So is Microsoft still a monopoly, using its ubiquitous operating system to squash the competition? Or is it turning into a toothless giant overshadowed by competitors such as Google and Apple?

I should note at the outset that I'm not a lawyer and I haven't talked to any lawyers about this topic. I'm less interested in the narrow legal case of whether Microsoft violates antitrust law than in the state of Redmond's power. Does it still carry a big enough stick to make the rest of the technology market cower?

The PC Market

You could certainly argue that in one area directly addressed in the antitrust suits--Microsoft's alleged use of the demand for the Windows operating system to affect what PC vendors include on their machines--the company still wields an awful lot of power. Sure, Dell now sells PCs loaded with Linux, as do HP, Lenovo, and other PC vendors. But sales of those non-Windows systems are still paltry. And though Apple's sales of its Macintosh notebook and desktop PCs were up 34 percent last quarter compared to the same period last year, that doesn't mean much to HP, Dell, or other PC vendors. Their livelihood is still tied to selling Windows boxes.

But whether because of the antitrust suits or because of other market factors, Microsoft doesn't seem to be using its power to muscle competitors off the desktop. The very fact that Dell is selling Linux machines at all is one example. And when I recently bought a Dell desktop for home use, it came preloaded with products from two of Microsoft's most formidable competitors--Google's desktop search service and Mozilla's Firefox.

Windows in Decline?

Trends suggest that the power of Windows may decline over the next few years. Most reviewers of Apple's new Leopard operating system have noted that it's superior to Windows Vista. And as virtualization products such as Parallels make running Windows software on a Mac seamless, individuals, at least, probably won't feel as tightly bound to the Windows platform.

Long-term, however, the greater threat to Windows' continued dominance is probably the Internet itself. As so much of our work--sorting through e-mail; finding information; organizing our lives; creating documents, spreadsheets, and other files--migrates online, the Internet becomes in effect everyone's operating system. What makes any particular PC that you happen to be sitting in front of run becomes less and less important.

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