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Microsoft blues

What are the judges thinking?

I know all these readership surveys say no one cares about the Microsoft trial. I know I’ve already written about it ’til I’m sick of the topic myself. But, when I read stories like this one, I can’t help but get inflamed. As regular readers know, I believe Microsoft’s monopoly is indisputable. The evidence that it abused this power is irrefutable. To me, it would take an OJ Simpson-like decision to deny these claims.

As in the OJ case, the logical thing is to either blame the prosecution or the judge. But after reading all there is to read on the subject, including an excellent blow-by-blow account of the trial in Wired, I honestly can’t find fault with their actions, except to say that the DOJ was a bit slow to act in the first place and Jackson was a bit flip outside of the court room. But Bill Gates’s testimony alone should be enough to side in favor of the DOJ’s recommended remedy.

Oh well, it’s not to be. Not the way this story leans. I will most likely be on vacation in the North woods when the ruling is handed down. So it may go the other way. But I’m assuming Microsoft will win round two and the case will be sent back to district to discuss other remedies. I’m not going to guess at what those remedies will be. But any extension of the process favors Microsoft.

I do, however, want to focus on a statement one of the appellate judges made that shows monumental misunderstandings of the case and the market. In the course of Monday’s proceedings, Chief Judge Harry Edwards said, “Isn’t this simply a question of whether a Microsoft monopoly should be replaced by a Netscape-Sun monopoly.” What? Where do I start to deconstruct this?

First of all, neither Netscape nor Sun own any of the desktop operating system market. So there is no way they could use desktop influences to gain browser market share. Because of this, there is little chance Netscape could ever have gained a monopoly on browsers. The best it could do is try to maintain a competitive product, which it has to some extent.

But this case is not narrowly confined to the browser market. It is about a desktop monopolist who used its monopoly to gain market share in other forms of software, including browsers. That is the way David Boise and company framed the case. Judge Edwards shows a fundamental misunderstanding of the case in his comment.

My only hope is that when this case goes back to the district, the judge will understand the arguments from the States Attorney General (who are pushing the case now that the Bush Justice Department wants no part of it). Perhaps then it will get a fair hearing and Microsoft’s anti-competitive behavior can at least be curbed.

James Mathewson is editorial director of ComputerUser magazine and ComputerUser.com.

Sara: please check witch story this is on our site (NEWS)(LEGAL)(WAS)(00034) ****Judges’ Dissection Reveals Cracks In Case Against Microsoft 02/26/01 WASHINGTON, D.C., U.S.A., 2001 FEB 26 (NB) — By Brian Krebs, Newsbytes. The government’s landmark antitrust case against Microsoft Corp. showed serious signs of fracture today as a panel of appeals court judges hearing oral arguments in the case proceeded to deconstruct what many observers considered to be the government’s strongest argument for breaking up the software giant. On the first day of oral arguments before the seven-judge appeals panel, both sides were given a chance to argue whether Microsoft bundled its Internet Explorer Web browser with its Windows operating system, and whether the company used anticompetitive tactics to maintain its monopoly in that market. In a very direct line of questioning, the panel asked Jeffrey Minear, a staff attorney for the US Solicitor General’s office, what measure they should use to determine if Microsoft’s conduct was a blatant violation of antitrust laws or just a company protecting its turf in a cutthroat industry. The judges also repeatedly quizzed the government’s attorney what would be the result of upholding the lower court’s decision. “Isn’t this simply a question of whether a Microsoft monopoly should be replaced by a Netscape-Sun monopoly,” Chief Judge Harry Edwards, a judge appointed to the panel during the Carter administration. Minear noted that Microsoft leveraged its dominance in the operating systems market to force computer manufacturers to choose Windows as their default operating system. He also pointed out that Microsoft – concerned about Netscape’s potential to take the operating systems market by storm with its wildly popular Web browser – incorporated a free version of its own Internet Explorer browser into its Windows operating system, thereby wiping out any competitors hopes for profitability in the browser market. But on rebuttal, Microsoft attorney Richard Urowsky noted that some 60 million Windows users had downloaded Netscape by the time the lower court issued its breakup order, something the panel seized on as evidence that Netscape had not been “foreclosed” or shut out of the browser market. According to University of Baltimore antitrust law professor Bob Lande, Minear did not do an adequate job rebutting Microsoft’s comebacks or addressing the panel’s many serious concerns “This is pretty devastating for the government’s case this early on,” Lande said. “What’s surprising is that (Minear) didn’t even talk about the percentage of users who aren’t sophisticated enough to download Netscape.” William Kovacic, a law professor at George Washington University, said Microsoft succeeded in weakening the government’s case by attacking its most sweeping – and thus most vulnerable – tenet. “I guess in a way this is the umbrella that has several other discrete bits of conduct underneath it, and if you imagine it as a structure with a number of different pillars, the monopoly maintenance claim incorporates everything else in the case,” Kovacic said. “Whether it’s monopoly maintenance broad or narrow depends on how many of those components of conduct survive the review.” In grilling Minear, however, the panel was also tough at times on Microsoft, chiding Urowsky for basing the company’s appeal on a dispute of the lower court’s findings of fact, rather than on the presiding judge’s interpretation of the law. In general, while an appeals court is to a great extent bound by the established facts in the case, it must focus its attention on determining whether the law was correctly applied in each case. But in the second half of today’s proceedings, the appeals court indicated that in several areas it was prepared to dispute whether Jackson provided any basis of fact for some of his findings, particularly in regard to accusations that Microsoft illegally “tied” or bundled its Internet Explorer browser with Windows. Microsoft claimed its actions did not meet the antitrust definition of “tying,” since the product was incorporated into the browser at no extra cost to the consumer, and thus was free. Government attorney John Roberts countered that by making it free, Microsoft essentially raised insurmountable barriers to entry in the Web browser market, since new competitors would not be able to make any money from offering a standalone browser. But Edwards noted that Judge Thomas Penfield Jackson, the lower court judge that handed down the breakup ruling, did not establish that a market for a browser-less operating system ever existed. “It seems to me highly questionable that there is a separate market for just operating systems, and as I trace through the record, I see no clear findings to back that up,” Edwards said. Microsoft and the government are due back in court again on Tuesday for the final round of oral arguments, in which both sides will argue whether Microsoft intentionally sought to foster its monopoly, and whether Jackson’ breakup order was appropriate. The court also will spend a short time asking questions about Jackson’s out-of-court comments to the press regarding Microsoft’s conduct during the trial, behavior that Microsoft attorneys have argued showed Jackson’s partiality to the government’s case from day one. Other than the part about Jackson’s gossip, Lande said, Tuesday’s hearing promises to be much less exciting than today’s. “Relief is almost anticlimactic, because its very unlikely that this court is going to uphold the breakup remedy, and this case will probably be remanded back to the district court for consideration by another judge,” Lande said.

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