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Al-Ahram Weekly 11 - 17 November 1999 Issue No. 455 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 11 - 17 November 1999 Issue No. 455
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Profile Travel Books Sports People Time Out Chronicles Cartoons Letters A week in the world
Mr Softie and the Queen of Oz
By Peter SnowdonIt wasn't such a bad week to be Bill Gates after all. On Friday, Judge Thomas Penfield Jackson issued a strident report in which he found Mi-rosoft (or M$, as it is known to its friends) guilty of a wide range of monopolistic prac-ices, in particular of having exploited its dom-nant position to drive competitors such as Ap-le and Netscape to the verge of bankruptcy. The Ogre of Redmond now has the choice between trying to reach a negotiated settlement with the Department of Justice, or facing a possible move to break the software giant up.
Over the last two decades, Microsoft has grown into the largest company in the world, in the process making Gates, its President, the richest man ever to have walked the earth. It did so by establishing its MS-DOS and Windows operating systems as the near universal standard for personal computers, despite the fact that they were generally recognised as being less efficient and less reliable than many of their competitors.
The power this dominance conferred upon the company, however, is now under assault not only from lawyers, but from the internal evolution of the computer industry itself. The Internet is increasingly undermining the reliance upon PC-based standards and compatibility on which the Microsoft empire was built. As an industry that grew up to serve the office place -- along with domestic word-processing needs -- mutates into a form of mass interactive media, the old rules no longer apply. Witness the startling rebirth over the last two years of Apple Computers, which had previously been left for dead by all but the most fanatical of Mac diehards.
Apple now has 25 per cent of the first-time buyer market for personal computers with its innovative iMac range. Microsoft, meanwhile, is losing the server market to the faster and more robust Unix system, the embedded market for high-computing-power low-energy-consumption devices to more reliable specialist vendors, and the Internet wars to America Online. In this context, being ruled a monopoly is perhaps the least of the company's problems.
Moreover, the ruling, however harsh, was entirely expected. The markets reacted calmly on Monday, as Microsoft stock closed down less than two points, at a fraction under 90 dollars. Perhaps investors were taking solace from the thought that even if the company were broken up, this need not be bad news for them, as anyone who held the stock of Standard Oil on the eve of its dismantling by the government could testify. Indeed, a series of mini-Microsofts may well perform better in an increasingly competitive market place than could one huge one.
The blow was further cushioned by the fact that earlier last week the Dow Jones Industrial Average, the most widely-known, if least representative US stock market index, had admitted Microsoft, along with Intel, to its select list of members. As a result, Microsoft stock is now largely in the hands of institutional index-tracking funds which are obliged to hold on to it by the terms of their investment mandate, until such time as it leaves the index again. The fact that Microsoft entered the Dow, essentially locking up most of the available shares in the company only days before Jackson's findings were announced, is, of course, a pure coincidence.
It was not such a bad week to be the Queen of England, either. Australia voted by 55 per cent to 45 to remain a constitutional monarchy, rather than convert itself into a republic. No one was quite clear why the country felt so loyal to the Old Girl -- but then, the English couldn't tell you why they keep her on either. National morale was also lifted as the Wallabies trounced France 35-12 to carry off the Rugby Union world cup in Cardiff. The Queen, just to show what a good sport she is, turned up to present the trophy herself.
There was celebration too in South America, as the US Patent and Trademark Office (PTO) cancelled the patent on the ayahuasca vine which had been issued to a private US citizen. The plant, which is found throughout the Amazonian river basin, is sacred to many of the indigenous peoples of the area, who use it both for ritual and medicinal purposes. The suit was brought by a coalition of indigenous organisations. However, as lawyers pointed out, the problem is not so much this particular patent, as the process which allows the PTO to issue patent rights to plants, in complete disregard of indigenous knowledge, in the first place. This may sound like a lot of fuss over a couple of grapes: but intellectual property will be one of the key battlefronts for the anti-colonial struggles of the coming century. Even Bill Gates would agree with that.
In Argentina, too, justice is never as simple as it looks. Last week Spanish judge Baltasar Garzon issued an arrest warrant for 98 Argentinean officers, including members of the junta that ruled the country from 1976 to 1983. If the request for extradition is met, the officers would face trial in Spain on charges of genocide and terrorism, relating to cases involving victims of Spanish nationality. Baltasar is already involved in the attempt to bring General Pinochet of Chile to justice. However, under Carlos Menem, Argentina always systematically maintained that no other country has the right to try Argentinean citizens for crimes committed on Argentine soil. The newly-elected centre-left President Fernando de la Rua is expected to follow Menem's lead on this one.
In Central America, life was far from rosy too. On the first anniversary of Hurricane Mitch, the IMF released a report showing that the two countries worst hit by the storm are paying one million dollars a day (that's right) to the IMF and World Bank, despite a moratorium agreed earlier this year. As a result, Honduras and Nicaragua will have spent as much in 1999 on servicing their debt, as on reconstructing their countries. The total cost of the damage wreaked by the hurricane is estimated at 3.6 billion dollars. While many countries waived debt repayment for two years following the disaster, the IMF and the Bank did not, because they are "preferred lenders". Whose preference is that, one might ask? At the same time, it emerged that half the money pledged by the UK last year for disaster relief in the area has had to be used for debt repayment instead.
Next time you go past a bank, and you see "since 1849" written by the door, you know why.
