I apologize for the long posts, but I think anyone who wants to comment on the meaning of this decision should read it first. There have been a number of misstatements about what the opinion says. I won't name names, but suffice it to say they are not limited to the people posting on this thread.
On a scale of one to ten, one being "Justice Rules" and ten being "Total Microsoft Blowout Victory," I'd rate this decision about an eight to eight and a half.
Microsoft certainly got almost everything it asked for. The preliminary injunction is gone. Lessig is gone. The Consent Decree is not gone, but it is interpreted by the majority rather deferentially.
If you look at Judge Wald's opinion, it is very interesting. She concurs in the majority's disposition of the preliminary injunction and Lessig, and dissents on the issue of how to interpret the Consent Decree. That is no surprise. Even in reading the published accounts or oral argument, it was pretty clear that she did not buy the arguments that DOJ was making about the appropriateness of the preliminary injunction. Furthermore, she is considered more liberal than the other two, so one would expect her to want the court to take a more vigorous role in interpreting the Consent Decree and, in the course of that interpretation, more strictly scrutinizing, as she calls it, Microsoft's conduct.
What is interesting about Judge Wald's dissent is that, it reads like a roadmap for the district court to follow in giving more teeth to the Consent Decree than one might expect would be acceptable if one were to read the majority opinion alone.
And that brings up the one very important area where I do not believe Microsoft got everything it asked for.
The majority construed the burden Microsoft had to meet in order to establish that Windows95-IE was an integrated product as a rather low one, and it said that the court's role in deciding whether Microsoft met that burden as a deferential one. However, the majority expressly rejected Microsoft's interpretation of the Consent Decree provision. In so doing, it gave the court a role, however deferential, in scrutinizing Microsoft's product design decisions under the Decree. And the deference to be given Microsoft's showing is not total. Microsoft cannot simply mix code together for the sake of harming competition. It must make at least some plausible showing of pro-competitive benefit. Judge Wald would go further and require the court to decide whether the benefits claimed under Microsoft's plausible showing in fact exist.
Although the majority waffles a little bit, talking about the "alleged" detriments of tying arrangements, I think this decision may also restore some life to the antitrust theory of tying. Judge Wald, of course, does not share Bork World's skepticism of antitrust tying analysis.
If these concepts get incorporated into the direct antitrust analysis in the Sherman Act action, as I suspect they may, I think there may be a lot of litigation over what benefits are "plausible" and how far the court should go in scrutinizing them. I would submit that is NOT a positive long-term outcome for Microsoft, although it may not help DOJ much in dealing with Windows 98.
I also think the court's characterization of Windows 95 as an integration of DOS and Windows 3.11 may be a fundamental factual error on which the opinion is premised. Pleae correct me if I'm wrong, but my understanding is that Windows 95 is NOT an integration of DOS and Windows 3.11. Although Windows 95 will emulate DOS, the kernal is different, as I understand it. It is, in a very real sense, a single product, not just a combination of DOS and Windows, as both the majority and the dissent seem to assume. The opinion provides "guidance," but its seems to leave open the possibility that the outcome might change if the facts can be shown to be different on further development. And, the court may be defining the products in terms of their features rather than the composition of their code, but that is certainly not crystal clear from the way the opinion eads.
It's also why I rate the decision about an eight to eight and a half instead of a ten in favor of Microsoft. |
