IE won the browser war because Navigator sucks
Or we had to kill Netscape because Navigator rocks
MS on Trial By the District Court's (that's Judge Jackson's) own admission, Netscape distributed 160 million copies of Netscape Navigator in 1998, thereby saturating a marketplace of only 100 million Internet users, Microsoft appeals lawyer Richard Urowsky claimed during arguments before the appellate bench in Washington Monday.
Furthermore, between 1996 and 1998 Netscape's share of dedicated Netizens (its 'installed base') swelled from a healthy 15 million to a huge 33 million, Urowsky pointed out.
So how can it be that Internet Explorer is far and away the most popular browser today? That's simple; right-thinking people just like it better.
After all, Netscape had a golden opportunity to demonstrate the virtues of its browser before Microsoft thudded into the market, and still people switched to IE in droves. Obviously, this is because Internet Explorer rocks and Navigator sucks, Urowsky said in so many words.
But then he did a one-eighty and argued vigorously that Navigator's inherent superiority threatened the very survival of Windows, which in turn inspired -- nay, obligated -- Microsoft to fight tooth and nail against it.
"Netscape, founded in 1994, can be, by the middle of 1995, clearly a potentially lethal competitor to Windows, because it can supplant its position in the market because of the characteristics of these markets," Urowsky intoned gravely.
What he meant is that distributing software is dead cheap once the R&D is finished, and that Netscape, therefore, might have knocked MS off its perch with ease. There was nothing to do but rip their guts out.
"Even what proved in the end to be very nascent forms of competition can be perceived as highly dangerous and act as strong constraints on the behavior of market participants."
Judge Raymond Randolph hammered him on that. "You say that Navigator should have been included in the relevant market, 'why, because it's a potential competitor'; and then later you say, there was no causation between your actions towards Netscape and monopoly maintenance, 'why, because Navigator was not a potential competitor'. How can these two statements stand?"
Urowsky did a little rhetorical dance suggesting that the 'no causation' argument stands because the District Court specified the failure of new a OS to emerge as the relevant consequence of such causation. He was mercifully rescued from this looming tautological cul-de-sac by a time-clock error which diverted the court's attention from the question.
So, to recap Urowsky's tortured arguments: Microsoft had every right to juke Netscape because it was a deadly competitor against which any and all tactics had to be employed for MS to survive; and Microsoft did not engage in monopoly maintenance because Netscape was never a threat worthy of such tactics, having conveniently destroyed itself with inferior technology.
Bundling the Package
Back in the golden age of the browser wars, before IE was inextricably linked to Windows, Netscape possessed a whopping eighty per cent of the browser market, and Microsoft a piddling five per cent, in spite of the fact that IE was given away with Windows.
Microsoft scurried to arrange exclusive distribution contracts with OEMs, so that they would not load Netscape by default in lieu of IE. Microsoft's leverage with the OS they all depended on would, obviously, have been a remarkable motivator in such negotiations.
It was only fair play, Microsoft argued. "In those circumstances, the courts have recognized, exclusive distribution contracts can be distinctly pro-competitive because they propel a competitive product into the marketplace, and serve to de-concentrate the market, which is precisely what happened here," Urowsky explained.
"The issue is whether Java and Navigator were perceived as being platform competitors with Windows. If that was correct [we don't know whether 'that' is the fact or the mere perception], then Microsoft was entitled to adapt the Windows platform and seek to secure as widespread a distribution of technologies that were part of the Windows platform [as possible]....so long as Netscape had complete access to the marketplace."
For 'complete access' Urowsky cited the District Court's finding that Netscape had access to every PC in existence. He declined to mention that Netscape didn't have a nifty OS to package along with it, however.
Chief Judge Harry Edwards questioned whether Netscape could have had 'equal' complete access to consumers when IE was pre-loaded on the desktop and integrated with Windows, whereas Netscape would have to be sought and downloaded and installed separately.
Urowsky didn't think that was a terribly big deal. "Netscape could have gone to the OEMs the way AOL did, and secured complete, or virtually complete, presence on the Windows desktop," he explained.
"The OEMs wouldn't want that," Judge Randolph interjected (with a nod of approval from Judge Edwards), "because if they put two browsers on their original equipment they'll get more service calls, and if they get more than three service calls, their profit margin is such that they would only break even or loose."
And then there was the matter of consumers being unable to remove IE from their Windows systems conveniently if they wished.
"What about the add/remove problem?" Edwards pressed. "What non-predatory purpose did Microsoft have in setting up a system....why take the action you did, which was inconsistent with your original position which would allow a consumer to invoke add/remove and disable Internet Explorer?"
"Well, a consumer can do that; you can just take the icon and move it to the trash receptacle on the desktop," Urowsky explained lamely.
"With add/remove?" Edwards asked incredulously.
"The add/remove utility is a more technically complicated...."
"Not really," Edwards shot back sarcastically, cutting him off. "I mean, I'm not buying that one for a minute. It's not technically complicated at all."
"Well all right," Urowsky conceded. "If you go back to OSR2, which is the first update of the Windows operating system with IE3 in it, IE3 was not removable with the add/remove utility because the add/remove utility is primarily concerned with new features that are put on the operating system after it's been elevated to a 'new baseline', which OSR2 was. Now, if you download an update of IE3 onto OSR2, you can run the add/remove utility, because that's being added onto what is the new baseline."
"Microsoft periodically incorporates interim updates in the operating system into a new 'baseline version' that it can describe to developers so that they know what's in the operating system and can make use of the features," Urowsky explained.
We'd never heard such a load of bollocks, and judging by Edwards' reaction, neither had he.
"It certainly looks predatory," Edwards observed. "And I still don't understand your answer to explain why it was a pro-competitive move instead of a predatory move. It would have been the simplest thing in the world for Microsoft to leave the possibility [of using the add/remove utility] there."
"I was wondering if you have some explanation to show me how it really was pro-competitive, because I can't figure that one out."
Urowsky then fobbed him off with a lot of 'we love our consumers' nonsense, playing for time while he struggled to think of an answer.
"Why not let the OEMs remove [Internet Explorer]," Judge Edwards asked.
"Because the OEMs are not Microsoft's real customers; end users are," Urowsky said, boldly lying through his teeth.
"If you don't have OEMs you're out of business," Edwards laughed scornfully. "Is that a question?"
And so it went, until the government rose to make its arguments. Then the court got really skeptical. ®