A Trial for all Seasons Reactions to the decision in the Microsoft anti-trust trial were totally predicable, and depended on your view of the trial. Pro-Microsoft forces took it as being a vindication of Microsoft's activities, anti-Microsoft observers denounced it as being evidence of collusion between Big Business, The Government and The Judiciary. The latter was summed up by The Register's headline 'MS settlement rotten with loopholes'. With all the ideological arrows flying around it was difficult to get hard information about the actual judgement. The decisions ran to hundreds of pages and everyone concentrated on the bits that backed the particular axe they were grinding. As I read it, however, the salient points are as follows: 1. Microsoft has a monopoly on the PC desktop. 2. That monopoly was gained legally. 3. It is not illegal to hold a monopoly. 4. Microsoft is guilty of using illegal methods to maintain and extend their monopoly. 5. The purpose of the US anti-trust laws is to protect consumers from being harmed by the effects of a monopoly, not to protect the monopolist's competitors. 6. The purpose of the settlement is to ensure that the monopolist - Microsoft - can't indulge in this sort of activity again. 7. The DoJ and Microsoft put forward a plan that they claimed would prevent future action of the sort declared illegal. The judge's view was that, though she might have produced a different plan, this was what the defendant and plaintiff had proposed and she had to take that at face value. OK, having got that far we move into the realm of speculation and opinion. The consensus seems to be that the nine dissenting states blew it by being too greedy and going for broke. Their case was dismissed out of hand. Since the origin of the case was Microsoft undercutting Netscape in the browser market by first giving it away free and then tying into the operating system, it's difficult to point out at this stage where the harm to consumers is. Interestingly enough, though, there are laws against selling things at under cost to bankrupt the competitors and gain a lock on the market. They are called anti-dumping laws and they apply to foreign companies doing just what Microsoft did. If Microsoft had been Japanese it would have attracted financial penalties on the sale of its products. It remains a mystery to me why Microsoft didn't attract anti-dumping penalties in Europe - the European Commission has been fast enough to do so on computer products, like DRAM chips, in the past. So what next? Is Microsoft out of the woods yet? Well not exactly. I don't think that any of the principals are going to appeal the decision. Microsoft got what it wanted, and the dissenters were too thoroughly trounced. In any case the elections have now taken place, so the requirement for state attorney-generals to have high profile visibility is past. There are however a couple of clouds on Microsoft's horizon. The first and most obvious one is that the European Commission (EC) is also investigating Microsoft's desktop monopoly and has yet to come to a decision. And the legal basis for anti-trust cases is different in the EC. That said though, given the result of the US case, I don't expect that EC case to be a big hurdle. The second problem for Microsoft is that the final outcome of the case doesn't stop the companies 'injured' by Microsoft's illegal acts from filing a suit against Microsoft for restitution. And that's precisely what a group of companies and consumers led by Sun and Netscape have done. The suit is based on Judge Jackson's finding of 412 facts relating to its illegal actions. Microsoft tried to get the judge in the Maryland trial to agree to re-open 395 of the finding, but were turned down on all except 17 of them. So the case will go ahead on the basis of the remaining facts, and in this trial the plaintiffs have everything to gain by continuing. Finally, of course, there is the ongoing problem for Microsoft of Open Source Software (OSS) especially Linux. The news on this front is very depressing for Microsoft as a recent leaked internal memo (published as Halloween VII) makes clear. Microsoft commissioned a survey to find out how much penetration OSS had made into its markets. The results make bleak reading for Microsoft and make it clear that much of the company's FUD and propaganda is starting to backfire as people become more familiar with OSS. Microsoft's normal method of dealing with this sort of problem - to simply buy the competing company - won't work with OSS. There is nothing, and no one to buy! So, the tale is not yet at an end!
The Halloween VII Memo: |
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