Sal, thanks for the compliment, but keep in mind that the views I express here are just my own, and, though I try to be accurate in what I say, they are speculative. I am just as ignorant as the rest when it comes to knowing what will really happen.
Just for you, here is the infobeat story on the discussions about remedies:
Prosecutors pondering remedies against Microsoft
infobeat.com
A choice cut I find interesting:
Justice Department Antitrust Division
chief Joel Klein has in the past expressed a preference for
one-time solutions that avoid continuing oversight and keep the
government out of decisions better made by the market in the
country's fast-moving high-tech industries.
And a very speculative prediction:
I think this case could settle.
I predict they will come to some sort of agreement to have Microsoft license and/or open-source all or parts of Windows.
Why do I say that?
1. While they disagree over what the government should do, both sides want to minimize ongoing governmental involvement. That's a common interest the two sides share, and a good starting point for trying to settle this thing.
Microsoft wants minimal governmental oversight for obvious reasons: they don't want Uncle Sam designing software or telling them how to run their business.
The government wants minimal oversight, I believe, because (a) they don't want to design software or run Microsoft's business, and (b) setting up some new regulatory apparatus to oversee Microsoft will not sell politically.
Boies is setting up the theme in this trial that Microsoft can't be trusted. How can the court or anyone else be expected to supervise someone who can't be trusted in an industry the regulator can't understand? They can't. It won't fly.
So, I think you can forget about all those ideas about injunctions telling Microsoft it can't do X, Y and Z.
2. Of the three structural remedies on the table, two are non-starters:
(a) As much as Boies is gunning for structural remedies, he of all people must know that the government's case rests on what is, in essence, a theory of natural monopoly. Any breakup of Microsoft is bound to lead to inefficiencies, which it is supposed to be the very purpose of antitrust law to avoid. Dealing with the inefficiencies of a breakup (split platform standard, duplicated R&D costs, divided product development teams, etc.) must be mind-boggling. Plus, the remedy is, in my view, very vulnerable on appeal, given the natural monopoly nature of the case. It sounds strong and macho, and maybe it's the right thing to do in the "real" world, but given the case the government has put on, it could easily get overturned. Breakups make sense in industries with rising marginal costs which would tend toward multifirm organization, where the monopolist acquired its market power through predation. Maybe software is really like that and Microsoft did acquire its market power through predation. But, as I see it, that's just not the government's case.
Now, the government might have some economist waiting in the wings who can say that the PC OS market is really not a one-firm natural monopoly. After all, it is possible to run multiple OS's on the same computer. But, so far, I haven't seen any testimony like that, and I've been looking.
So, I could be wrong, but I think that, given the posture and theory of this case, break-up, like nuclear weaponry, is a great threat and deterrent, but best left unused.
(b) Microsoft's proposed remedy is to do nothing. It will not fly, at least not at the trial level. On appeal, their sacred DC Circuit Opinion won't get them there for most of the conduct the government is alleging, and it may not even fly on the issue of browser integration, their one strong point, given the vagaries of the opinion itself and Allchin's performance -- though Devlin is still unrebutted. Plus, even if GoreD-PAC manages to get off the ground and actually keeps him out of the White House, there is no guarantee that a future Republican administration would drop, or even go easy on, this case.
Microsoft's argument that there is no foreclosure is, on a practical level, very strong. I mean, it costs $40 to buy System Commander and install all the OSes you want, and downloading a browser off the internet *is* simple. However, I suspect that the degree of foreclosure needed to survive summary judgment is very low, and the issue is factual, meaning the judge's findings will be hard to overturn on appeal, especially if, as is turning out to be the case, all of Microsoft's tests that show, for example, how easy it is to download a browser, are suspect. Recall, too, that this judge has already rejected the argument twice. So, it's just my opinion, and I certainly can be persuaded to change it if something persuasive comes up in the case down the road, but right now I am not impressed with their foreclosure argument.
So that leaves
(c) Windows licensing and/or open-sourcing. This is more efficient than breaking up Microsoft. Microsoft does not have to dismember its cushy corporate structure or, more important, its product teams, and the government still gets the benefits of a multifirm competitive market. Win 2K still ships on time. ;)
I could be wrong, but I don't get the impression that Microsoft objects to this as much as some of the other ideas being proposed. I am sure a lot would depend on the details, over which their say will diminish as the trial and appeal go on.
3. I find it interesting that all of this discussion of draconian remedies is happening now, just as Microsoft comes off its defensive disaster. We still have another month of Microsoft's case, plus a vacation/Philadephia trial break, and rebuttals. That should put us into June before the judge holds a hearing on proposed remedies. Although I believe Microsoft will lose at trial, a lot of water can still flow under the bridge between now and then. So, for the media to talk up draconian remedies right now *is* premature, unless something is going on behind the scenes.
On the flip-side, recall Microsoft's memos on OSS. Maybe there is no connection with the antitrust case other than them trying to scare up some competition for the judge. Or, maybe they are really thinking about OSS as a possible business model and as a way to get out of this antitrust mess. I certainly do not know the answer, but it's an interesting coincidence.
Take everything I am saying here with a huge grain of salt, as it is strictly speculation, but it is an interesting speculative scenario. We'll have to wait and see if any of it comes true. |
