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Do Government Bureaucrats Read the Papers?

01/12/2000

Today, Citizens for a Sound Economy (CSE) commented on reports that Justice Department lawyers plan to break-up the innovative Microsoft corporation.

CSE's director of technology policy, Erick Gustafson, said, "USA Today has reported that the Justice Department will attempt a break-up of Microsoft Corporation: one company for the Windows operating system, and another for the remaining software line. The Justice Department's announcement causes one to wonder whether the government's lawyers have read the papers, turned on the TV or logged on to the Internet in the past few days. The $165 billion AOL/Time Warner deal clearly demonstrates that Microsoft's competitors remain strong and that the new digital economy continues to provide limitless possibilities for entrepeneurs to grow and prosper."

"The 65 billion AOL/Time Warner deal clearly demonstrates that Microsoft's competitors remain strong and that the new digital economy continues to provide limitless possibilities for entrepreneurs to grow and prosper."

"The DOJ plan," Gustafson continued, "is in stark contrast to the experts quoted in today's New York Times front page story '[The AOL-TW merger] could well make it more difficult for a judge to choose a remedy that has dramatic, irreversible effects, like breaking up the company."

With the DOJ's plan, America will travel down the road toward government control of the technology sector. The various proposals to remedy Microsoft's "crime" all share a common trait: government regulators would gain more control over the software and hardware markets. In a world according to the government's lawsuit, innovation should be punished and consumers should be content with the same products and same features.

The technology marketplace is among the most dynamic in the world - a fact that the pending merger between America Onlin and Time Warner amply demonstrates. Government regulation and the pending antitrust case against Microsoft cannot keep pace with the rate of change in the technology sector.

Requiring Microsoft to jump through government hoops before it can release new products or breaking the company up into pieces will only slow innovation and harm consumers. Ultimately, the message sent to innovators and entrepreneurs by the government's lawsuit is that prosecution is the reward for providing a new product at a lower price than your competitors.

This is a policy for failure and consumer frustration.