Article 14 of 54
John Schmeltzer, Tribune Staff Writer Tribune news services contributed to this report
Chicago Tribune
Chicagoland Final ; N
Page 1
(Copyright 2000 by the Chicago Tribune)


As the Justice Department proposed breaking up Microsoft Corp., some experts said the impact on consumers of such an outcome would not be positive.

"The direct effect will be price increases and the consumer will be worse off," said Nicholas Economides , a professor of economics at the Stern School of Business at New York University.

These experts argue that one of Microsoft's principal innovations has been to combine various computer functions so that they are easy to use. A breakup, they contend, would lead to more conflicts between programs.

Still, even if U.S. District Judge Thomas Penfield Jackson accepts a breakup, the effect would not be felt for as long as two years, until Microsoft exhausts its appeals.

If a breakup survived appeals, there are a couple of ways that consumers might begin to feel a change. The applications half of Microsoft might start developing versions of its Office software for operating systems such as Linux.

In the Justice Department's view, that would reduce a key advantage for Windows, because users wouldn't feel as compelled to avoid rival operating systems.

But others predict a different result: "If this breakup plan were to make it all the way through appeals, it could create a lot of confusion in the marketplace," said Rob Enderle, an analyst with the Giga Information Group.

Microsoft continues to assert that a breakup would hurt consumers. "Breaking up Microsoft into separate companies is not in the interest of consumers and is not supported by anything in the lawsuit," Microsoft Chairman Bill Gates said in a statement.

Not every computer expert believes a Microsoft breakup would be bad for consumers. Leo Irakliotis, director of professional and graduate programs in computer science at the University of Chicago, argued that in the long run a breakup would allow other companies to innovate without fear of Microsoft's market dominance.


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