Dell: Antitrust laws outdated

Computer magnate says parts of federal law unduly penalize many companies -- not just Microsoft.

OLYMPIC VALLEY, Calif. -- Michael Dell once again backed Microsoft Corp. in its antitrust travail, warning Monday against government interference in the software industry and calling antitrust laws outdated.

"I don't think people in (the U.S. Dept of) Justice have a good understanding of the issues, and we don't want people in the government architecting software," said Dell, CEO of Dell Computer Corp. (dell) and an ardent supporter of presidential candidate George W. Bush.

Dell made his remarks during a wide-ranging question-and-answer session at the Venture 2000 executive conference here this week conducted by Red Herring magazine.

In keeping with his oft-stated position, Dell said free-market forces should prevail in the Microsoft (msft) case, despite the company's past behavior.

There is "no question that Microsoft is intensely competitive and goes out of its way to gain market share in all of the markets it's in," Dell said, but "the market will be a better determinant of whether a company's products are worthy of customer demand."

Dell also said the Microsoft case points to the need to overhaul antitrust laws. "The laws being cited are relatively outdated and raise lots of questions about how businesses are able to extend their capabilities and grow," he said.

He specifically noted those parts of the antitrust law that forbid tying one product to another. In the Microsoft case, the government argued that the company asserted an unfair advantage by building deep hooks from its Internet Explorer browser into its Windows operating system.

As things currently stand, Dell asserted, antitrust laws pose a dilemma to dominant companies.

'I don't think Microsoft can do anything to stop Linux from succeeding, so we have a competitive open market'|Michael Dell Any company with high market share faces legal issues by making its products work together, Dell said. What's more, making products compatible is a fundamental ambition of any technology company, not just Microsoft.

Dell also argued that Microsoft hasn't used its market dominance to artificially inflate prices for its operating system. "If you look at the cost of the overall system, the OS is a pretty small cost," he said.

Also, "we're beginning to see new forms of competition with Linux," he said, referring to the alternative operating system that's emerged from the open-source movement of software development. "I don't think Microsoft can do anything to stop Linux from succeeding, so we have a competitive open market."

Dell also delivered an upbeat assessment of Linux prospects, saying that by 2003 it and Microsoft's Windows 2000 should hold about 80 percent of the market for the servers used to run businesses. He said it's clear that Linux is quickly garnering support, especially at the expense of proprietary versions of the Unix OS.

Dell, who is actively involved in Bush's presidential campaign, also let it be known that Bush's list for a vice presidential running mate is shorter by at least one.

Dell said he's "definitely not" a candidate himself. He refused to speculate on who is, however.

On another matter, Dell indicated that his company needs to move into the market for post-PC devices -- when the time is right. "Clearly having devices attached to servers and storage is key for Dell," he said. "We haven't seen a compelling-enough handheld business at the device level."


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