A day of satisfaction as corporate bully gets comeuppance
BY DAN GILLMOR
Mercury News Technology Columnist
GUILTY.
Microsoft Corp. is officially a corporate lawbreaker.
The rule of law, at least for the moment, is victorious
over the tyranny of untrammeled capitalism.
A federal judge appointed by Ronald Reagan, the most
pro-business and anti-antitrust president in recent
memory, has shown again why our system has such
strength. Thomas Penfield Jackson, no friend of
interventionalist government, listened to the testimony
and looked at the evidence in the landmark Microsoft
antitrust trial. He came to a common-sense result --
that Microsoft has willfully, repeatedly and
contemptuously violated the law -- and we are all in his
debt.
This is a day for satisfaction, not joy. Those who
chortle over a bully's comeuppance shouldn't forget that
this particular bully has done many things right and that
most of the people at Microsoft are honest and diligent.
And given that many Silicon Valley executives would
mimic Bill Gates' worst acts if they had the chance, their glee isn't all that
attractive.
Let's put off, for the moment, the questions of what comes next -- the
sanctions for this kind of corporate misbehavior; ways of preventing it from
continuing; the possibility that an appeals court will overturn the verdict; and so
on. Those are vitally important matters, but first let's remind ourselves of some
essential realities.
First: The antitrust laws matter. They are old and creaky in key ways, but they
are one of the few arrows in society's quiver to counter the new generation of
monopolies and cozy oligopolies that have formed or are forming as we enter
an unprecedented Information Age.
The Microsoft trial is not, as the company's paid acolytes and ideological allies
claim, an assault on free markets. The antitrust laws are one of the guardians
of free markets, because they help maintain genuine competition. True
conservatives do not encourage monopoly or wink at its abuses.
Second: Microsoft's financial power and overall muscle have not diminished in
any significant way, if at all. Microsoft's profits and revenue continue to set
records, and the company's intimidation of the industry has moderated only
slightly, largely because of the trial's high visibility. Innovation in PC software
has stagnated.
Microsoft's unfairly won victory over Netscape, which made more than its own
share of blunders along the way, has left us with one PC browser for all
practical purposes. This means Microsoft, as it intended, now controls the
software on-ramp to the Internet in the most important part of the market by
far.
Third: Microsoft does not respect the law, and it will never admit it has done
anything wrong. The very concept is alien in a company that treats truth and
lies with rough equivalence.
In Microsoft's world -- and, sadly, in all too much of the technology business,
where Microsoft does not have a monopoly on sleazy behavior -- truth and lies
become tactics, to be employed where useful. They are not high and low
values that guide fundamental actions.
Which raises the next question: Now what?
Microsoft's institutional inability to distinguish right from wrong is part of a
culture that has generated massive bad will, not just among competitors and
many customers but also among the lawyers in the antitrust case. Justice
Department officials and state attorneys general do not trust Microsoft at all.
As a result, they'll push for harsher sanctions and ongoing enforcement than
they might have preferred. I don't envy Jackson, who will be forced to make a
decision he plainly hoped to avoid.
For its part, Microsoft is now relying on an appeals-court victory or ultimate
triumph in the Supreme Court. The stakes are the same as they've been all
along. If Microsoft wins this case on appeal, the effect will be to invalidate
antitrust in the Digital Age.
In the meantime, though, the company's defiance has bought a blizzard of new
civil antitrust lawsuits, some of which will be deserved but many of which will
be the legal equivalent of piling on. The plaintiffs will have won more than half
the battle -- the finding of monopoly -- before they begin.
All of this caused Microsoft's stock price, and the overall Nasdaq market, to
tank on Monday. You'll soon be hearing warnings from Microsoft's Wall Street
allies who claim that serious sanctions will caust the entire U.S. stock market
to plummet. If forcing a single company, albeit the world's most powerful
company, to obey the law is tantamount to wounding the overall economy, the
Microsoft monopoly is even stronger than I'd imagined.
Actually, tech stocks fell last week when it looked as though Microsoft might
agree to a settlement. It's just as likely to assume that innovation, and by
extension the market, would soar if the monopolist could no longer strong-arm
the industry with such ease.
Finally, a word of praise for Judge Jackson. You may recall how he was being
dissed by the Washington in-crowd before the trial started -- portrayed as a
slothful, dim-bulb jurist. Maybe that's the way he'd handled some other cases,
but not this time. He ran a tight ship at the trial, but gave Microsoft every
opportunity to tell its side.
Unfortunately for the company, but happily for consumers, he found Microsoft
to be on the wrong side of the law.
sjmercury.com |
