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Column
Software outlaw roams the streets!
So Microsoft broke the law. But while the judges argue among themselves, the company remains free to stalk new markets.
By Scott Rosenberg
[04/03/00]

Judge to Microsoft: Guilty!
Thomas Penfield Jackson slams Microsoft for abuses of monopoly power.
By Lydia Lee
[04/03/00]

Technology: View from the top
We're here, we're queer, we're media moguls
Is PlanetOut CEO Megan Smith building the gay and lesbian AOL Time Warner?
By Lydia Lee
[04/03/00]

A sense of Well being
A most influential online community celebrates its 15th anniversary.
By Jon Carroll, Farai Chideya, Mary Mackey, Susan McCarthy, Steve Silberman and Mary Elizabeth Williams
[03/31/00]

Column
Napster -- friend or foe?
Fans have already embraced new music-distribution technologies. Musicians can fight them or join them.
By Scott Rosenberg
[03/30/00]

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Stephen Manes
Biographer of Bill Gates, Forbes columnist and co-host of public television's "Digital Duo"

Microsoft has always lived fairly close to the edges of the law, and has come out on the right side of some of the decisions, and on the wrong one in some -- including where they lost the patent infringement case against Stac, and they solved the problem by buying a piece of the company. Likewise, they just settled out of court with Caldera, for an unnamed figure of money assumed to be in the nine figures.

Also Today Software outlaw roams the streets! So Microsoft broke the law. But while the judges argue among themselves, the company remains free to stalk new markets. By Scott Rosenberg Judge to Microsoft: Guilty! Thomas Penfield Jackson slams Microsoft for abuses of monopoly power. By Lydia Lee

They've been forced to sign consent decrees -- where you swear you do nothing wrong and you promise to never do it again. Microsoft's very first product was subject to binding arbitration. In 1977, there was a legal dispute over the very first contract the company had signed. Microsoft is not a stranger to a courtroom and the legal process.

I think Microsoft had any number of ways open to it to increase its dominance and to maintain its market power. And in a typically arrogant factor, they at minimum skirted and in the judge's view broke the law. There are any number of ways that they could have screwed Netscape, and they picked the one that they should haven't tried, especially since they were under a consent decree that dealt with these kinds of practices.

Microsoft has been an incredibly arrogant company with a general disregard for the truth and an extreme regard for public relations. When Microsoft calls itself innovative you don't know whether to laugh or cry. Now they've been caught out in the kind of business practices that they've been engaging in for a long time, some of which may have been legal before they became a monopoly but aren't once you are a monopoly.

They keep talking about freedom to innovate: Microsoft is possibly the least innovative big company around. Just about anything you care to name in Microsoft products has its roots somewhere else.

The judge got this right: Microsoft used its platform monopoly as a lever to go out of the way to stomp anyone who might threaten it. The only time it's been great for consumers is when it's had competition. When it had a competitor in operating systems, particularly with IBM in OS Warp, it went from Windows 3.1 to Windows 95; this was a substantial improvement. But the improvements since then have been basically nonexistent. Now that it's wiped Netscape, it's improved the browser minimally. Once Netscape was out of the picture, the browser improvement became minor and trivial. Once it eliminated WordPerfect with Microsoft Word, it's made some improvements, but they're marginal and small.

Competition is good for the consumer and it's good for Microsoft. When there's competition, Microsoft competes, but once it's stopped the competition it doesn't compete, and consumers don't get better products.

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Morgan Chu
Co-managing partner in Irell & Manella and lead counsel for Stac Electronics in its 1994 court victory against Microsoft

I think this could have significant long-term repercussions for the entire software industry. Assuming the conclusion of the court holds up on appeal, I think that the marketplace will become more competitive with respect to applications. I think we'll see greater innovations. I think we'll see companies pursuing new products, new services, making research and development investments where they wouldn't have pursued them previously because of the long shadow Microsoft has cast. And as a result you'll spur innovation. You'll have consumers and the market deciding what's best, not Microsoft.

Other antitrust suits will also be able to argue that Microsoft is collaterally estopped with respect to certain conclusions. The basic rule is that if you have fairly litigated an issue and lost that issue, you -- Microsoft in this case -- can't litigate the issue again. There are already pending about 100 other lawsuits, from what I've heard, that relate to Microsoft's anti-competitive conduct. Some of those undoubtedly have issues that are similar to or identical to the issues here. If they're identical -- say, for example, if Microsoft tried to argue that it wasn't a monopoly -- then Microsoft could be collaterally estopped. Information from this case would stop Microsoft from arguing the same set of facts because those facts had already been decided on. It's a broad principle taken up in all courts; the questions will be whether or not the issues are the same, or identical, instead of similar. It will be up to the judges whether they want to stay or postpone the proceedings to wait for the appeal. I suspect that they'll proceed in their ordinary process and not raise the appeal.

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Ken Wasch
President of the Software and Information Industry Association

We think it's a slam-dunk win for consumers -- the judge has recognized that Microsoft was engaged in practices that effectively killed the Netscape Navigator browser and deprived consumers of choice. But this is not about the browser but about Microsoft's ability to leverage its monopoly to engage in unlawful activities to preserve its monopoly, and tie its product to another product.

We think this opens the door for very strong conduct remedies or structural remedies -- some form of breakup, or some divestiture of business units.

It's amazing, watching the Gates and Ballmer press conference, the defiant stance they've maintained -- here you have a defendant that has been found guilty, and they are showing no remorse and no interest in modifying what a judge says are illegal practices. It's surprising.

In the settlement discussions, Microsoft offered to end price discrimination between computer manufacturers. But during the trial it said it wasn't doing that. It also said it would separate the browser from the operating system. In the trial it said it couldn't do that, either. It also said in settlement talks that it would supply technical information to third parties at the same time as its own developers. But in the trial it said it was already doing that. So in the last week it's cut the legs out of its own argument!

Ultimately, strong remedies will let a thousand flowers bloom and let computer manufacturers truly differentiate their product by offering different bundles of software and access to Internet content.

Next page | Steve Ballmer: "Our passion for being the best has been misinterpreted"