Microsoft And Internet Explorer

[Argo84]

We've all read a bunch about the anti-trust problems that Microsoft has had from bundling Internet Explorer with Windows and I've been wondering why this issue has generated so much heat.

What does Microsoft stand to gain from integrating IE with Windows? IE is free so what's the big deal? Is there some way that MS makes money from IE that I haven't figured out? Why are anti-trust folks so up in arms about it?

[midget]

I've never quite understood that argument either, so I'm interested to hear what people come up with. Personally, I don't see how they could get around NOT integrating a single browser. When you're dealing with a standalone or workgroup PC, it really doesn't matter what browser you use. Step up to the domain level, however, and multiple browsers can be a nightmare. There are loads of group policies (control settings you can change for all clients from a single server) that deal explicitly with IE, and browser control is an important part of any domain. Do people expect MS to develop policies for all potential browsers out there?

[FatBaldGuy]

The main arguments as I understand them are these.

1. By bundling IE with Windows, MS has effectively eliminated the market for any competitive browsers, such as Netscape, Firefox, etc.
2. Because of MS intimate knowledge of the workings of the Windows interface, they can make use of undocumented OS features which are not available to other developers. This argument is also used regarding other MS software applications such as Word, Excel, etc.
3. By dominating the market and killing competition, there are no market influences to force a better product, leading to overall mediocrity.
4. Since MS by their monopolistic practices achieves overwhelming market share in browsers, email applications, word processing and most other common applications, the baddies who create viruses, spyware, etc. will naturally target and exploit these applications for maximum effectiveness.

[Excalibre]

Web browsers weren't always free.

No, really. Why, when I was a mere lad, I only got a free copy of Netscape because they gave them away to students! Normal folks would have had to pay.

Of course, by then they were already moving away from selling browsers as programs. But it's not as though this practice never existed. The peculiar nature of web browsers that way is due to the browser war. After all, it's hard to imagine doing much without a basic suite of office applications, but Office ain't free.

So Microsoft's bundling crushed other companies who were making a legitimate living. Microsoft then gained a great deal more control over the web, and if you've ever gotten spyware, or a virus, or just about any internet baddie, you got their shitty software (and, to a much lesser extent, the sheer ubiquity of their single platform) to thank for it.

[Exapno Mapcase]

Back when dinosaurs and Hammer roamed the earth, you could find websites telling you absolutely and without question to optimize your webpage for the Netscape browser because it was so superior. Even at the time I thought this was very bad advice, because Microsoft was bundling IE into every new computer, and nobody would bother to go out and pay for Netscape when they had a perfectly good browser for free. Just on the basis of pure math, IE was bound to dominate the market inside of three years. Which is exactly what happened. And Netscape - at the time a major player known all over the world - effectively went out of business, although it still exists after a fashion.

And that's why antitrust regulators all over the world get up in arms whenever Microsoft talks about bundling another product. How long do you think the firewall, antivirus, anti-popup, antispyware and all the other add-on companies are going to last if Microsoft starts giving away a free integrated product that works just as well and comes installed on every new computer in the world?

[robcaro]

Years ago, I paid about $80 for Netscape. Lucky Me!

[Duckster]

Reading this court case may help in the understanding because there is often a world of difference in what the mass media reports vs the actual facts of the case.

[scotandrsn]

Anti-trust law is meant to preserve the ability of the market to affect innovation and pricing.

IANAL, but let me see if i can distill some of the findings in Duckster's linked case. I AM a computer guy, and I commend whoever gave Jackson his technical information.

The Operating System manages the hardware and all the programs that are running, and also provides an interface by which users and application programs can access and interact with the resources of the computer.

Windows is structured in a modular fashion that allows it to look and feel more or less the same no matter what chip hardware it's running on. When Intel comes out with a new and better chip, very little of the Windows software actually needs to reconfigured.

As a software company that develops end-user applications, then, your smart money in terms of longevity and therefore market share is in developing applications that, rather than rely on the resources of the possibly ever-changing hardware, make use of the stable OS's provided access points to those resources, known as APIs (application program interfaces).

Windows has an effective monopoly on the Intel-PC OS market, which means they can charge pretty much whatever they think they can get for the OS software, and has the upper hand in negotiating any deals with software developers for their gaining the technical information they need to make use of Windows' APIs.

If you are trying to create the OS that topples Microsoft's monopoly, you have your work cut out for you. Either you develop for a different hardware platform, which means you've got different APIs, or you develop for Intel but provide your own APIs. Software vendors wanting to port their existing software to your OS need to figure out how to offer their same functionality while making use of your non-Windows APIs, which requires heavy investment in development. Now, PC users would only switch OSs' if they either knew that they could use the same programs and files or if the software for your new OS were so obviously vastly superior that the inconvenience of switching would be offset by the enhanced quality. No one has done this (or at least been able to convince a significant portion of the OS market that they've done it) so people stick with Windows. Since your current market share is abysmal, and its future uncertain, the cost-benefit equation that the application developers look at to decide to port to your OS never comes out in your favor. With no apps, your OS dies a quiet death, or lingers in non-mass-market limbo. Judge Jackson calls this the "applications barrier to entry" into the general consumer OS market, and the linked decision shows a number situations in which Microsoft has purposefully worked to keep this barrier as solid as possible.

Enter Netscape. From the decision:

69. Netscape Navigator possesses three key middleware attributes that endow it with the potential to diminish the applications barrier to entry. First, in contrast to non-Microsoft, Intel-compatible PC operating systems, which few users would want to use on the same PC systems that carry their copies of Windows, a browser can gain widespread use based on its value as a complement to Windows. Second, because Navigator exposes a set (albeit a limited one) of APIs, it can serve as a platform for other software used by consumers. A browser product is particularly well positioned to serve as a platform for network-centric applications that run in association with Web pages. Finally, Navigator has been ported to more than fifteen different operating systems. Thus, if a developer writes an application that relies solely on the APIs exposed by Navigator, that application will, without any porting, run on many different operating systems.

This of course could make it easier to switch OS's and reduce Microsofts market share. The decision then goes on to describe the details of a meeting held between Microsoft and Netscape where MS made an offer to NS of a "special relationship" if NS would abandon all notions of expanding the NS APIs into a platform for application development and limit itself to a very narrow range of development in exchange for important technical details of Windows that they would need to port Navigator to Windows 95.

The judge found that the market views the OS and a browser program as two separate entities. Ideally, consumers would like to use whatever combination of OS and browser they like, or in the current real world, use whatever browser they wanted with Windows. A competitive market would find a way to provide users with such a choice.

But Microsoft does not operate in a competitive market.

89. At the time Microsoft presented its proposal, Navigator was the only browser product with a significant share of the market and thus the only one with the potential to weaken the applications barrier to entry. Thus, had it convinced Netscape to accept its offer of a "special relationship," Microsoft quickly would have gained such control over the extensions and standards that network-centric applications (including Web sites) employ as to make it all but impossible for any future browser rival to lure appreciable developer interest away from Microsoft's platform.

90. Microsoft knew that Netscape needed certain critical technical information and assistance in order to complete its Windows 95 version of Navigator in time for the retail release of Windows 95. Indeed, Netscape executives had made a point of requesting this information, especially the so-called Remote Network Access ("RNA") API, at the June 21 meeting. As was discussed above, the Microsoft representatives at the meeting had responded that the haste with which Netscape received the desired technical information would depend on whether Netscape entered the so-called "special relationship" with Microsoft. Specifically, Microsoft representative J. Allard had told Barksdale that the way in which the two companies concluded the meeting would determine whether Netscape received the RNA API immediately or in three months.

91. Although Netscape declined the special relationship with Microsoft, its executives continued, over the weeks following the June 21 meeting, to plead for the RNA API. Despite Netscape's persistence, Microsoft did not release the API to Netscape until late October, i.e., as Allard had warned, more than three months later. The delay in turn forced Netscape to postpone the release of its Windows 95 browser until substantially after the release of Windows 95 (and Internet Explorer) in August 1995. As a result, Netscape was excluded from most of the holiday selling season.

92. Microsoft similarly withheld a scripting tool that Netscape needed to make its browser compatible with certain dial-up ISPs. Microsoft had licensed the tool freely to ISPs that wanted it, and in fact had cooperated with Netscape in drafting a license agreement that, by mid- July 1996, needed only to be signed by an authorized Microsoft executive to go into effect. There the process halted, however. In mid-August, a Microsoft representative informed Netscape that senior executives at Microsoft had decided to link the grant of the license to the resolution of all open issues between the companies. Netscape never received a license to the scripting tool, and as a result, was unable to do business with certain ISPs for a time.

They also denied Netscape access to the PC market. Now, while Microsoft makes both OS's and applications (meaning they have an unfair advantage in a non-competitive OS market for providing more and better APIs to their own app developers than those provided to competing app developers, as well as the ability to provide their apps for free, like they did with IE), they do not make computers. However, because of the applications barrier to entry into the OS market, no PC manufacturer wants to ship with any other OS installed than the latest version of Windows.

So Microsoft, knowing they had the PC manufacturers by the short hairs, told them, "either you accept a version of Windows which includes Internet Explorer, from which Internet Explorer can not be removed, and in which Internet Explorer is displayed prominently on the desktop, or you don't get Windows at all."

So as a consumer, you bought your new PC, and if you wanted (like most people did at the time) to use Netscape to browse the web, you couldn't just ask the seller to install it when you bought it, and even if you got it later, it wouldn't run correctly. And there, sitting right on your desktop, was a free browser that worked better with the OS.

From an internal Microsoft memo reprinted in the decision:

You see browser share as job 1. . . . I do not feel we are going to win on our current path. We are not leveraging Windows from a marketing perspective and we are trying to copy Netscape and make IE into a platform. We do not use our strength — which is that we have an installed base of Windows and we have a strong OEM shipment channel for Windows. Pitting browser against browser is hard since Netscape has 80% marketshare and we have 20%. . . . I am convinced we have to use Windows — this is the one thing they don't have. . . . We have to be competitive with features, but we need something more — Windows integration.

If you agree that Windows is a huge asset, then it follows quickly that we are not investing sufficiently in finding ways to tie IE and Windows together. This must come from you. . . . Memphis [Microsoft's code-name for Windows 98] must be a simple upgrade, but most importantly it must be killer on OEM shipments so that Netscape never gets a chance on these systems.

So, starting with Windows 98, the browser is tied to the operating system. by Windows XP, Internet Explorer and Windows Explorer (the program that shows you your desktop and the files in windows) run off of a common engine. At work, when IE crashes, my desktop has to remount itself. At home, when IE refused to find the internet last summer (while Netscape could), having exhausted all easy fixes (and having backed up every file I had created since the dawn of time) I uninstalled Internet Explorer. I had to wipe my hard drive clean and blow the dust off my Dell installation CDs to get my computer working properly again.

Now, on the surface, integration is kind of a neat thing. It has the potential to render files on your computer no different in terms of accessibility than files on a computer halfway around the world, which has the potential to really enhance the internet experience. Microsoft would like to tell you, however, that this can only be achieved by tying IE to the OS in a way that limits the functionality of other browsers, which is horseshit. Given the modular nature of Windows, there's no reason you couldn't have Windows provide the essential OS functions of resource and process management and allocation, along with the windowing GUI functionality, and give the user the choice of running Microsoft Explorer, a file-access program which would access files on the hard drive and across the 'Net, or some other program, such as Anderson Adventurer, which might perform the same functions but offers different extra features. It's all just a matter of APIs. If there were a Windows company, competitive with other OS's, and an Explorer company, competitive with other browsers, the Windows company would be releasing the proper APIs to all the browser makers, in hopes of getting that browser on their OS. The Explorer company, meanwhile would engineer its browser toward the OS's with better market share, and the best combination of OS and browser would eventually result.

But that ain't going to happen as long as Microsoft is allowed to say the OS and the browser are now one and the same thing.