Still defiant, Microsoft
showing no hint of remorse or
compromise
BY DAN GILLMOR
Mercury News Technology Columnist
THREE days ago, Steve Ballmer said he and his colleagues at
Microsoft Corp. had done zero contingency planning for a possible
breakup of the company. Have they started?
Probably not, though maybe they should.
There was no hint of compromise, much less defeat, from Ballmer,
the company's president and chief executive, and Chairman Bill Gates on Friday. In denouncing the
government's well-leaked breakup plan, they defiantly continued to insist that Microsoft had done
nothing wrong, that it would never be broken up.
They said, in effect, what they've been saying all along: The nation's antitrust laws do not apply to
their company's business.
We're a long, long way from any breakup, of course. Barring an unprecedented burst of humility at
company headquarters in Redmond, Wash., Microsoft will be paying massive legal fees for some
time to come as it challenges this and other antitrust lawsuits.
Drastic move
The breakup proposal is, naturally, the big news in the document filed on Friday by the Justice
Department's Antitrust Division and collection of state attorneys general. It would be by far the most
drastic move to promote competition since Ma Bell was forced to have multiple babies in the early
1980s.
Whether it would have the intended impact is not so clear, though. If you liked Microsoft when it was
one monopoly, you might really enjoy the duopoly that could emerge should the courts order and then
uphold such a breakup.
To some extent, the government proposal fights the last war. The case was largely about Microsoft's
destruction of Netscape. There is effectively no competition left in the Web browser market today,
and even the proposed breakup wouldn't stop a new Microsoft operating system company from
declaring its own browser to be an integral part of the operating system.
But the details of the proposal also suggest that the government wants to prevent the next war, or at
least win it on behalf of consumers, by ensuring Microsoft's inability to use its current monopolies to
freeze out innovation in the emerging Internet universe.
The dividing line between the operating systems company and everything-else company isn't nearly as
neat as the government would like us to believe, however. In fact, it's probably best to look at this
proposal as something of a draft. Even if U.S. District Judge Thomas Penfield Jackson OKs a
breakup, he won't do it before Microsoft points out the difficulties in deciding what is part of the
operating system and what isn't.
Microsoft's insistence that it can make any software a part of Windows, no matter what the intent as
long as even one consumer finds it useful, is an arrogant claim. And while some kinds of Internet
services do belong in an operating system, an operating system should be modular enough to allow
competition for things like displaying Web pages.
Gates insisted Friday that Windows would never have been created if it weren't for the close ties
between the company's applications software and operating systems units. The Windows standard
has, on balance, boosted the computer industry. Maybe, instead, we'd have had a leaner, faster,
more secure operating system than the bloated, unstable mess that Windows and its kissing cousins in
the Office software suite have provided.
A breakup is a structural remedy, in antitrust lingo. I found the proposed ``conduct'' remedies, which
deal with behavior, even more interesting. These would have real teeth, whether applied to a
monopoly or duopoly -- because they go to the heart of Microsoft's basic methods, which can be
abusive in the extreme.
Microsoft is supposed to respond to the government proposal on May 10. In an afternoon
conference call, Microsoft said it would ask Jackson for more time -- to call witnesses and submit
evidence. The judge should agree. A sanction of this magnitude deserves a more thorough hearing.
Arrogance persists
The most offensive part of the Microsoft news conference was the company's continuing arrogance.
When Gates, Ballmer et al rail that any of these court-ordered modifications to their behavior or
structure would cripple innovation, they're telling us that Microsoft defines innovation. Oh, please.
I'd have preferred to see a more drastic breakup than the one proposed on Friday -- the kind of split
that would have done much more to foster competition in markets that are now utterly controlled by a
single company. At least now we have something real on the table, and that's progress of a sort.
Let the legal battle continue, as it should. There's nothing much at stake -- just the rules of the road,
or perhaps whether there will be any rules, in the Internet Age marketplace. |
