Microsoft will lose its legal case with the US Department of Justice unless it admits that it has a monopoly in the software market, according to an influential analyst.
The software giant has been accused by the US government and 14 US states of having a monopoly in the operating system market and using its position to unfairly block the competitive efforts of its rivals.
Microsoft is currently involved in a lengthy court battle defending its position, but David Vellante, departing senior vice president at analysts IDC, says the company should admit to being a monopoly, agree to a few concessions and thereby prevent it it losing the case and facing more serious action.
"Refusal to admit to being a monopoly is potentially going to lose [Microsoft] this case and result in it being split up," said Vellante, speaking to a packed house of 250 senior UK executives today at the Regent Conference in London.
"It would serve it better if it basically admits it's a monopoly and plays by different rules," Vellante said.
Various remedies for Microsoft are being suggested, Vellante said. Firstly Microsoft should not be allowed to buy market leaders, he said referring to the Department of Justice's refusal to allow Microsoft to buy Intuit in 1994.
Secondly, Microsoft should not be allowed to first bundle and then unbundle products, Vellante said. Internet Explorer was first a bundled part of the Windows operating system, but then marketed as a separate product, he said.
Finally Microsoft should not be allowed to force licensees to bundle its unbundled products, Vellante said, referring to allegations that Microsoft forced computer manufacturers to promote its Internet Explorer browser software.
Microsoft's battle with allegations about anti-competitive practice in the software market is ongoing, but Vellante said it is now diverting its attention to other areas, such as content and communications networks.
"Microsoft wants a new monopoly. It has killed all the software companies and it's bored," he said.
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