Well, I think your post raises a lot of interesting points. I'll try to hit just a few of them and give you my views:
Does any of this matter?
I don't think there is any doubt that Microsoft's credibility is going to be seriously damaged as a result of the incident with the tape, the Smalenese fiasco, and Allchin's 19 admissions.
I think the tape issue will, in retrospect, turn out to be a tempest in a teapot. Yes, it's a PR fiasco. Yes, it probably will elicit a lot of laughter in a lot of closed quarters. It makes Microsoft look incompetent.
However, I would guess that, by redoing the demo with DOJ present, Microsoft was able to resurrect this very important piece of evidence. The incompetence will be forgotten, eventually, but the evidence will not.
Schmalenese is also bad, because Schmalenese was supposed to show lack of market power or barriers to entry. Instead, he basically gave away the kitchen sink on these important issues.
However, I think everyone recognizes that proving that the PC OS market is a "contestable market" was an uphill battle. It's just that Schmalenese made the hill a little steeper for Microsoft than he could or should have.
Allchin is much more problematic. Aside from the tape fiasco, he admitted nineteen times that users can obtain the same benefits by combining IE 4 with Windows 95 as with Windows 98, the "integrated product." This demonstrates that these claimed benefits are non-existent, a pretext to justify a combination that the government will argue was really intended to be anticompetitive.
I think Devlin may save the day for them, in the sense that Devlin has testified to benefits in terms of cost savings to his company resulting from Microsoft's distribution of APIs and DLLs that are needed by IE but not by Windows (see my earlier post). I do not think the judge will be able easily to discredit Devlin, whio is a third party and, unlike all but one of the other Microsoft witnesses, actually managed to pass the laugh test.
However, there are a lot of unanswered questions about the Court of Appeals' "plausible benefit" standard, including whether it even applies outside the context of the Consent Decree and, if it does, whether the standard allows the District Judge to weigh the pro- and anti-competitive effects of a benefit before deicding whether it is "plausible." If the Judge gets to weigh the evidence, Allchin's 19 admissions will be extremely damaging because they eliminate one set of claimed benefits that would have been weighed in the scale in favor of Microsoft.
More importantly, Microsoft's missteps with this videotape give Judge Jackson a more than adequate basis for rejecting all of Microsoft's evidence on this issue of the government's browserless version of Windows 98. Indeed, this miscue, in combination with other problems such as Dean Schmalensee's reliance on a survey that Microsoft's own employees severely criticized, could provide a more far-reaching basis for Judge Jackson to reject many critical aspects of Microsoft's evidence as not credible.
This is definitely true. However, in my view, what is much more likely to happen is that Judge Jackson will, consistent with an outcome favorable to the government, find as many facts as possible to be undisputed (i.e., admitted by Microsoft or its witnesses) and resolve as many of the factual conflicts as he can in favor of Microsoft. That will create a stronger sense of fairness in the outcome and, less importantly, make his factual findings much stronger on appeal (I say less importantly because the "clearly erroneous" standard of review, applicable to factual findings that are adverse to Microsoft, is a difficult one to overcome).
Many observers of this trial believe that the government can expect to do well before Judge Jackson, with Microsoft hoping to overturn any adverse rulings on appeal. If Microsoft continues to create a record where its evidence is suspect, however, that will make it very difficult for the Court of Appeals to second-guess Judge Jackson.
Here's where I think the article goes a little bit astray.
The Court of Appeals cannot "second guess" Judge Jackson on issues of fact. His findings on issues of fact cannot be overturned unless they are "clearly erroneous," that is, unless the higher court finds that they lack the support of "substantial evidence" or, having such evidentiary support, the judges nevertheless are of the firm conviction that a mistake has been made, an extremely narrow exception.
Microsoft's buffoonery in District Court is harmful because it will affect the way in which the District Judge makes his findings of fact. However, because appellate judges do not re-weigh the evidence, what Microsoft did in District Court, however damaging, will likely not affect the outcome of the case on appeal.
A comment made by Mike Murray, the Microsoft schill who gets up on the courthouse steps every day to spin the trial, nevertheless rings true: He said that Boies is trying to create an atmosphere in the courtroom, while Microsoft is trying to create an evidentiary record. I think that is correct, and that Boies and Microsoft will both succeed in their efforts.
Of course, whether the record Microsoft succeeds in creating will be enough to get the District Judge's decision overturned is another issue. |
