Govt urged to avoid monopoly in computer software market

Dewi Santoso, The Jakarta Post, Jakarta

Aside from its move in negotiating to buy licensed software at lower prices from giant U.S. software company Microsoft, the government should also give room to other operating systems so as to avoid a monopoly situation arising, analysts say.

Budi Rahardjo, a director at the Bandung Institute of Technology's (ITB) information technology research center, said on Tuesday that by giving more room to other independent operating systems, the government would prevent the Seattle-based software company from establishing a monopoly.

Data from the Office of the State Minister for Communications and Information show that currently there are approximately 70,000 computers -- all of which use Microsoft software -- in government institutions.

"The government needs to start using other software so as to reduce the possibility of the company (Microsoft) gaining a monopoly here," said Budi.

Microsoft was convicted in the U.S. of flouting competition rules by abusing its worldwide dominance, and settled its antitrust case with the federal government in 2001 in exchange for a pledge to modify some business practices.

Budi, however, said that the government had done the right thing by negotiating with the software giant, and was optimistic of a positive outcome.

He said that last year, ITB and Microsoft signed a "Campus Agreement" in which ITB was required to pay only US$10 for each licensed software package, including Windows, Office, Visio, Project, Encarta and Development Tools, on condition that ITB bought at least 14,000 units.

And although ITB could only buy 5,000 units, the agreement had been extended into this year, only with lower purchase targets.

"The point is that if the ITB can do it, then the government can surely arrive at a similar agreement," said Budi.

Marcelius Ardiwinata, a co-founder of the Indonesian Internet Society, voiced the same opinion, saying that he was optimistic that the government could strike a good deal with Microsoft.

"If Microsoft wishes to reach more customers, then it should be prudent enough to lower its software prices," said Marcelius.

Currently, the prices of Microsoft software ranges between $200 and $600 per package, whereas the prices of computers range from Rp 2.5 million ($282) to Rp 5 million.

The high prices for licensed software here have led to many people opting for unlicensed software as they are cheaper, even though of similar quality.

As a result, according to data from the Business Software Alliance (BSA), Indonesia was named the fourth worst offender in software piracy last year after Vietnam, China and Russia.

The rampant piracy in the country had previously angered the software giant and forced it to undertake its "own initiative random raids" against electronic shops in West Jakarta in 2001.

Based on the evidence gathered during these raids, Microsoft then filed lawsuits and won a total of US$9.1 million in damages against five Indonesian companies, including PT Kusumo Megah Jaya Sakti, PT Panca Putra Komputindo and Altec Computer, for installing unlicensed software in the computers the firms sold to their customers.

One year later, in July 2002, the government enacted Law No. 19/2002 on copyright. Under this law, which came into effect a year later, those involved in software piracy are subject to a maximum punishment of five years in jail and/or a maximum fine of Rp 500 million.