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“MARKET POWER AND STRUCTURAL CHANGE IN THE SOFTWARE INDUSTRY” mentioning the U.S. Dept. of Justice was published in the Senate section on pages S1289-S1290 on March 3, 1998.
The publication is reproduced in full below:
MARKET POWER AND STRUCTURAL CHANGE IN THE SOFTWARE INDUSTRY
Mrs. BOXER. I would like to comment on the hearing held earlier today by the Senate Judiciary Committee on ``Market Power and Structural Change in the Software Industry.''
First, I would like to commend Chairman Hatch for holding this important hearing and for his leadership on this issue.
Mr. President, today's creative and innovative software products enable us to bank, conduct research, shop and even trade securities online. And this is just the beginning. It is important therefore, that such a vast and essential resource be allowed to grow and expand in a fair and competitive environment. But recent events had threatened to case clouds over this most fundamental premise. Let me explain.
On October 20, 1997 Attorney General Reno announced that the Department of Justice would ask a federal judge to order the Microsoft Corporation to cease its practice of forcing manufacturers to sell its internet browser, Internet Explorer, with its widely used operating system, Windows 95. The U.S. District Court here in Washington, D.C. agreed, and on December 11, 1997 ruled that, pending further proceedings, Microsoft could not require purchasers of its operating system software to install its browser software.
In response to the Court's December 1997 ruling, Microsoft offered computer makers three options: (1) a version of Windows which Microsoft believed did not function; (2) a version of Windows which was more than two years out of date and no longer commercially viable; or, (3) Windows 95 bundled with Internet Explorer.
Thanks to the Department of Justice's continuing efforts, however, the storm clouds which had threatened an open and competitive market for internet browser software, now appear to be fading. On January 22, 1998, the Department of Justice and Microsoft reached an agreement in which Microsoft agreed to offer computer manufacturers a version of Windows 95 that contained a fully up-to-date operating system without its Internet Explorer internet browser.
But why should we care about this?
We should care about this because the biggest losers, perhaps, of any anti-competitive action in the internet browser industry will be the millions of everyday people who rely on the Internet. If one company gains such a huge and unfair advantage, other companies will not be able to compete; there will be no choices and innovation will be stifled.
This brings up the issue of ``open standards.'' Open standards on the Internet will allow all access to the Internet without having to rely upon any one company or any one operating platform. Open standards work against monopolies, and ultimately benefit the Internet by increasing competition among software products, resulting in lower prices and a wider selection.
As a Californian, I am concerned about this issue for yet another reason. Cutting-edge software manufacturers from my home state provide tens of thousands of people with high-paying jobs, making software manufacturing one of California's most valued industries. Industry competition is thus vitally important to my state's interest.
I appreciate the integral role the Microsoft Corporation has played and continues to play in the information age--its contributions have been most significant and important. It has made computers and computer applications more accessible to millions of people around the world, and for that, it deserves appropriate recognition and credit. Microsoft has been, and continues to be, the leader in the computer industry. But other, smaller, companies must also be given a chance to compete in the best and oldest of American traditions.
As we move further and further into the information age, the national government must ensure that competition is not eliminated. The Department of Justice should therefore be commended for acting to protect consumers and businesses alike. Similarly, Microsoft deserves credit for agreeing to settle the issue of bundling its operating system software with its internet browser software in what the Department of Justice believed to be a fair and equitable manner. Both made the right call.
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