It’s Standard Oil for the Information Age: Today Microsoft is going to court. At issue: Did Microsoft unfairly and illegally leverage its monopoly in desktop operating systems to gain a new monopoly on the Internet? Well, depends who you ask. We think we know, and we’re looking forward to a month or two of show-stopping, outrageous rechiseling of reality by Microsoft’s lawyers. (“Browsers? What browsers? Rocky, watch me pull this operating system out of my hat!”)
In past showdowns, the Justice Department has proved a poor match for Microsoft’s wit, but this time things will be different. Arguing the government’s case will be none other than David Boies, the very lawyer who trounced the government’s own antitrust suit against IBM in the 1970s. Since he’s worked both sides of this street, we trust he knows what he’s doing.
First he will have to show that Microsoft has a monopoly in desktop operating systems. That should be easy, since Microsoft has about 90 percent of the market. (Past antitrust cases have proved monopolies with as little as 40 percent.) Then he has to show that Microsoft unfairly and illegally used that monopoly to force computer manufacturers to put Internet Explorer on their machines, to make Internet service providers offer Internet Explorer to their customers, and to bully Netscape into making its browser incompatible with Windows. That will be more difficult, admittedly, but we have faith in the government’s collection of more than a thousand juicy smoking-gun memos, confidential e-mails from Bill Gates himself, and other assorted documents. (The world’s richest man is scheduled to testify by videotaped deposition only.) Microsoft, of course, will argue that the documents have been taken out of context and that it has behaved no worse than any other high-tech company. (The latter, we concede, might be true.)
Complicating the government’s case is a June appeals court ruling, on an earlier case, which says Microsoft was perfectly within its rights to include Internet Explorer with Windows 95. This ruling would seem to have poisoned the current case like a bad clam. That’s because the heart of the new case — the government contends that Microsoft broke antitrust law when it combined Internet Explorer with Windows 98 — is very similar to what the appeals court already struck down.
Naturally, the common wisdom says the appellate ruling sucked the guts out of the new case, but we would argue for a more subtle interpretation of the facts. One, the two cases are based on different law (the first one on a badly worded 1994 consent decree, the second on the venerable Sherman Antitrust Act). Two, U.S. District Judge Thomas Penfield Jackson will probably buck the appeals court decision, arguing that the IE-Windows combination doesn’t necessarily benefit consumers. (After all, some are sure to prefer a different browser or no browser at all.) And three — and most important — Judge Jackson has in the past tended to favor the Department of Justice over Microsoft anyway.
He’s likely to let them win on some counts, though possibly not all. Then Microsoft will very likely take the case back to the U.S. Court of Appeals, which seems to adore the free market champions as much as Jackson seems to loathe them. After that, the case could go to the Supreme Court sometime in, oh, 2000 or 2002, according to Microsoft partner MSNBC.
Of course, by that time the legal case will be irrelevant anyway, Microsoft having long ago eaten up what remains of Netscape’s market share. And no matter what the outcome of the court case, you can bet we’ll still be using unreliable, annoying, poorly designed software in the year 2002. Probably in the year 3002 too. We’ll keep you posted.
Cate T. Corcoran has been writing about Microsoft since 1994. She recently completed a six-month series on the company and antitrust issues, called “Vs. Microsoft,” for TheStreet.com.
