The following editorial appeared in today's San Jose Mercury News:
The window of opportunity to rein in Microsoft Corp. is closing fast.
The Department of Justice and the 18 states in the antitrust suit against the company must move soon to delay the release of Microsoft's new operating system. Otherwise, Microsoft will launch Windows XP this fall, and continue the monopolistic conduct that two courts have condemned. It once again will have used the clock to beat the system.
Microsoft's operating system runs on 90 percent of PCs. Just as it welded its Internet browser into Windows 98 to chase Netscape's browser from the market, Microsoft wants to use Windows XP as leverage to dominate a host of emerging Internet technologies.
It wants to incorporate software to send instant messages, play music, edit digital photos, and make Internet phone calls - areas in which AOL Time Warner, RealNetworks and Eastman Kodak make competing products. All would be unfairly disadvantaged, if Microsoft were allowed to use the leverage of XP over competitors.
Last week, a federal appeals court unanimously rejected Microsoft's request to reconsider its ruling that the company illegally intertwined the codes of the Internet Explorer browser and Windows. It sent the case back to federal district court to hold further hearings on the overall issue of "tying" software applications to the operating system and to set penalties against Microsoft.
But time is on Microsoft's side. Later this month, the company will begin shipping code for Windows XP to computer manufacturers, for a release date of Oct. 25. The process will be harder to stop once it's set in motion.
Microsoft plans to spend $1 billion marketing Windows XP. PC makers and the semiconductor industry see XP as a light out of darkness. They are counting on it to boost sluggish computer sales. Microsoft will cite the financial harm of delaying XP.
There are undeniable economic impacts, short-term at a minimum, of postponing Windows XP. But this must be balanced by a greater harm to innovation and to competition in high technology if Microsoft is allowed to expand its monopoly.
Microsoft says it's open to negotiating a settlement to the case. But it and the Justice Department have held only one meeting, and no more are planned. Only the threat of holding up Windows XP will force Microsoft to pursue talks seriously.
Three years ago, when they began their anti-trust case, the Justice Department and the states sought a preliminary order to force Microsoft to modify the code of Windows 98. The judge declined, the case dragged on, and Netscape's fate was sealed.
Three years later, Justice and the states should seek an injunction against the release of Microsoft XP. The court, having found Microsoft to be a monopolist, should grant it.
Microsoft should not triumph by default this time.