Will Microsoft’s new principles be its undoing

In the early years of the U.S. Justice Department’s antitrust assault on Microsoft in the 1990s, I occasionally opined that, for better or worse, Microsoft (Charts) was likely to end up as some sort of regulated utility. I saw Microsoft’s Windows as central to modern life, and believed that something so critical would inevitably come under governmental oversight.

Ironically, on Wednesday Microsoft essentially resigned itself to such a fate when it announced an extraordinary set of voluntary ‘principles… to promote competition’. The company permanently adopted many of the temporary restrictions the DOJ had ordered in resolving the antitrust action. Those restrictions would otherwise have expired in 2009.

It’s ironic because Windows in fact has become much less central to modern life since Microsoft agreed to the antitrust decree. Today, the “window” represented by a web browser is far more important to how we use computers. The Internet itself is our operating system and when we access information it comes, in many cases, not from the hard drive controlled by Windows but from some remote server to which we are connected by the Internet. That is, for example, how you are likely reading this article.

While in general I can’t find fault with any of this and it is probably good for the world, I can’t be so certain it will, in the long run, be good for Microsoft.