This is a legend of success and plunder

And a man, Tom Smith, who squelched world hunger.

From R. W. Grant's "Tom Smith and His Incredible Bread Machine"

In "Tom Smith and His Incredible Bread Machine," an inventor, Tom Smith, devises a machine that can produce a loaf of bread for sale at a price under a penny a loaf. When business taxes increase, Tom increases the price of his bread to a full penny. People are incensed. "He's guilty of pure plunder./He has no right to get so rich/On other people's hunger!"

While Bill Gates and Microsoft's operating systems, from MS-DOS to Windows to Windows 95 and Windows NT, certainly have done nothing as wondrous as Tom Smith and his bread machine, their operating systems have provided us with ways to harness the power of personal computers. They helped make computers useful tools for most people in business, in government, an in education as well as for the ordinary home user.

Along comes the Internet Revolution. Programs that provide the user interface with Internet, called web browsers, have become critical to making use of the Internet, in the same way that operating systems are key to using personal computers. The fear at Microsoft is that web browsers will become operating systems for personal computers, replacing Microsoft's Windows operating system. Netscape Navigator is the leading web browser, with between 65% and 80% of Internet users "surfing" the Internet using Navigator. Netscape, along with the Justice Department, has charged Microsoft with unfair competition, alleging that Microsoft is taking advantage of its monopoly in the Windows operating system and is extending that monopoly to web browsers, which threaten to become the operating systems of the future.

Microsoft's Windows 95 has its own browser, Internet Explorer, as an added feature. It comes at no added cost to Windows 95. Microsoft's contract with computer manufacturers who wish to sell computers with Windows 95 already installed specifies that they also install Internet Explorer. Microsoft does not charge extra for Internet Explorer, nor does it (as far as I can tell) keep these companies from also installing Netscape. Microsoft gives its browser away-and to a large extent, so does Netscape, though it can hardly afford to, given the relatively small number of products it sells. Netscape cries "unfair."

Well, just like Jimmy Stewart, our Mr. Smith goes to Washington, but Tom Smith goes to talk to the antitrust folks. He went to Have a friendly interview/With the men in antitrust. The lawyer for the antitrust folks tells Tom:

"Now, let me state the present rules,"

The lawyer went on,

"These very simple guidelines

You can rely upon:

You're gouging on your prices if

You charge more than the rest.

But it's unfair competition

If you think you can charge less.

"A second point that we would make

To help avoid confusion:

Don't try to charge the same amount:

That would be collusion!

You must compete. But not too much,

For if you do, you see,

Then the market would be yours -

And that's monopoly!"

Netscape has most of the market in web browsers, and Microsoft has almost the entire market in operating systems for Intel-based computers. Both companies got where they are because their products are better than those of their competitors. Competition fosters innovation. Our constitution even allows for monopoly through innovation by providing for a system of patent and copyright protections. Though our antitrust laws do protect competitors from certain so-called "unfair" acts, the early court rulings made it clear that merely having a monopoly, being the only one in the market, did not constitute "monopolization," which is a violation of the antitrust acts. That if a firm comes to have a superior position in a market because of lower costs or superior products, the antitrust laws were not to be used against them, unlike the scenario in the story of poor Tom Smith, who ended up getting five years in jail.

This sensible direction that the court took was first staked out in a Supreme Court case against J. D. Rockefeller and his Standard Oil of New Jersey (now Exxon) in 1911. The legal mind who gave us what is known in antitrust law as the "rule of reason," which shaped much of antitrust law, was Lafourche's own, Chief Justice E. D. White.

If we protect Netscape from Microsoft, Netscape ends up with a monopoly in web browsers. If we don't, Microsoft may be able to hold onto its monopoly position in operating systems for a little while longer. By the Justice Department getting involved, the government and its courts end up choosing winners and losers, instead of letting the people decide, through their free choices in the marketplace. I think that both Tom Smith and E.D. White would have preferred letting the people decide which products are best. If Netscape and the Justice Department have their way, higher prices and less innovation, for both web browsers and operating systems, is all that consumers will get out of this suit.