Microsoft Anti-Trust Rulings Due Tomorrow

ewhac writes "The Associated Press is reporting that Judge Colleen Kollar-Kotelly will deliver her opinions on the Microsoft anti-trust suit tomorrow, after close of markets. Much speculation revolves around whether she will approve or reject the settlement negotiated by the Justice Department. Should she reject it, she can only offer suggestions for improvement; she cannot impose amendments. Watch this site for further developments :-)." Reader acacia points out that the opinions should be posted at this site, if you want a quick bookmark.

Comments

The missing element:

[intermodal]

how they intend to enforce the judgement. Try keeping tabs on the biggest information company in the world and you'll see where the problem lies.

Re:The missing element:

[guttentag]

how they intend to enforce the judgement. Try keeping tabs on the biggest information company in the world and you'll see where the problem lies.

The DOJ isn't going to enforce anything where MS is concerned because the company bought the Bush administration. It shouldn't have to babysit Microsoft anyway.

Microsoft's PR goons work hard to broaden this topic to derail any conversation non-lawyers might attempt, so here's the obligatory recap to head off the trolls and astroturfers:

1. It is not illegal to obtain a monopoly in a particular market. However, it is illegal to use that monopoly to crush competition and move into other markets.
2. Judge Thomas Penfield Jackson found Microsoft guilty of abusing its monopoly power and ordered to company split into two entities -- one would be centered around the Windows product and the other would be centered around Office.
3. An appeals court threw out the breakup ruling on the grounds that Jackson was biased (he granted interviews to reporters prior to releasing his decision, a practice that is frowned upon in legal circles but one that Jackson has championed in the past as important to keeping the public informed about the decisions made in the courts). However, it affirmed the judgment that Microsoft abused its monopoly.
4. The case was sent to Judge Colleen Kollar-Kotelly in search of a new, unbiased remedy. Kollar-Kotelly initially urged the two sides (Microsoft on one side, the U.S. Department of Justice and 18 state attorneys general on the other) to reach a settlement on their own, with a highly-regarded judge arbitrating. IIRC, these talks went nowhere and the case returned to Kollar-Kotelly.
5. A regime change took place (George W. Bush was appointed President of the United States, with a non-trivial amount of financial assistance from Microsoft and its employees), and the DOJ, which ultimately reports to the president, conveniently reached a settlement that:
   1. benefits Microsoft
   2. costs Microsoft nothing
   3. aids some consumers in the short term
   4. hurts all consumers in the long term
   Nine state attorneys general (who feel they have more important things to worry about during their terms in office) have signed on to the settlement. The remaining nine refused to accept the settlement and the case has essentially forked.
6. Microsoft tried to force public acceptance of the settlement by announcing that it has already met the conditions. However, Kollar-Kotelly has yet to approve the settlement.
7. On Nov. 1, 2002, after 4:00 p.m. EST, Kollar-Kotelly is expected to announce her opinions in both cases.

My View (as a journalist and engineer who has been closely watching this case for over four years)
Microsoft often complains that it's being "punished for being successful" to draw attention from the focus of the case, so let's get this out of the way: I don't care about punishment. I want to see a remedy that protects the market and consumers.

When a person is convicted of driving under the influence, the authorities don't just hand his keys back and say "we'll be watching you." They take away his license for the benefit of society.

Since MS has demonstrated that it can not handle a monopoly responsibly, an effective remedy must remove the company's ability to violate anti-trust laws in the future. It doesn't get any second chances (as an an irresponsible driver might) because its illegal actions were well-planned and driven by malice (with intent to destroy its competitors, illustrated by such colorful metaphors as "cut off Netscape's air supply").

If Kollar-Kotelly announces such a remedy, Microsoft will complain that the government is inappropriately interfering with a market it doesn't understand, and it will try to discredit Kollar-Kotelly by accusing her of bias or incompetence.

No matter what her opinions turn out to be, this will not be the end of the case. Whichever of the three sides is displeased will appeal to SCOTUS and it will be at least another year or two before we see a definitive decision.

However, tomorrow's news will help shape the central arguments of the SCOTUS fight.

Re:Republican bias

[Anonymous Coward]

Considering that Judge Colleen Kollar-Kotelly was appointed by the very conservative Ronald Reagan, and the Justice Department is under control of the reactionary John Ashcroft, you can expect her to rule in Microsoft's favor and reject the deal to let the lawyers for the DoJ and Microsoft water it down even further.

Judge Jackson was also a Reagan appointee. And yet he took the time to "get it" (by which I mean that he managed to educate himself enough about the technology to see through the smoke screens Microsoft's lawyers put up), and his ruling ripped the company a new one.

So Judge Kollar-Kotelly may yet rule in favor of Microsoft, but her being a Reagan appointee doesn't guarantee that at all.

A bad omen for the NBMers

[Spawn-Of-Cujo]

They are really whistling in the dark now. The announced departure of Charles James from the DOJ portends a complete undoing of the "settlement" he was dictated by Redmond. Bush had to find him a cushy job from his oil-field cronies to get him out of the way.

Re:A bad omen for the NBMers

[ajakk]

It is amazing that the one actual insightful comment on this entire issue is stuck down at the bottom without any moderation at all.

The DOJ sold out on this settlement with Microsoft. I have no doubts that a Gore administration would have done just the same, but Charles James really screwed up on this one. The major indicator of how crappy the settlement was is that none of the career antitrust attorneys at the DOJ signed on the settlement. That is an act that is never done by the DOJ. The Washington Post ran a story that was obviously leaked by the career attorneys talking about how Charles James insisted that he should be the only one negotiating with MS, so he and the MS lawyer were sitting in the room together with the MS lawyer dictating what the settlement should be.

One major question that no one has thought about is how this decision will affect the races for Attorney General that are going on now. The elections are on Tuesday, and three of the resisting AGs are in very tight races. I suspect that the settlement will be rejected, and the judge will state that she thinks there should be a more stringent settlement. Microsoft will then appeal this ruling to the DC Cicuit, where her decision will be upheld. Then, the appeal to the Supreme Court will be VERY interesting.

Re:Considering how biased the first judge was

[NanoGator]

"The problem is that they are forcing machine makers to ship Windows as-is and punishes them for shipping otherwise."

I can't help but think that the bigger PC retailers weren't exactly kicking and screaming over an exlusive arrangement like that until MS's anti-trust allegations came around. If you think about it, 1 OS was good for places like Gateway or Dell or even IBM. Only one OS to support. Computers only needed one OS installed. That one OS ran everything people wanted on their computers, including games.

If you think about it, MS didn't always have the power to dictate who can use what. I think the odds are pretty good that the retailers themselves were happy to get into those agreements, early on at least.

Supreme court next

[ToasterTester]

No matter what happens Microsoft will appeal to the Supreme Court. That will drag everything on even longer, and be exactly how Microsoft has handled all their dealings. Drag it out until it doesn't matter that much whatever happens.

Actually Microsoft is punishing themselves more than the court probably will with their new licensing.

Re: Republican bias

[Black Parrot]

> Considering that Judge Colleen Kollar-Kotelly was appointed by the very conservative Ronald Reagan

Judges sometimes show remarkable independence after being "packed" onto the bench.

> and the Justice Department is under control of the reactionary John Ashcroft

Judges don't generally suck up to whoever is running the JD.

Looking at her record would probably give a better prediction of her behavior.

MS is immune

[kaltkalt]

One of the flaws with antitrust law is that once a monopoly is allowed to reach a certain critical mass, it becomes immune to antitrust laws. MS is well beyond that level. Antitrust laws simply do not apply to it. The only thing that can be done is to break up monopolies before they reach this critical mass. Whatever this judge may say tomorrow is irrelevant and will not affect MS in the slightest way. The government will win the "war on drugs" before it will ever be able to break up Microsoft.

Re:Post this again (original thread parent went -1

[MsGeek]

There are a lot of people rooting for Microsoft. The people who root against them are the same as people who rooted for the beating of Reginald Denny.

OK Anonymous Retard, listen up. I live in LA and was watching in abject horror in 1992 as Reginald Denny was beaten by a group of thugs. I didn't like the verdict but the riots were inexcusable.

As far as the starving retirees, widows and orphans who might be inconvenienced by an adverse verdict against a very deserving Microsoft: there was ample warning that MS had done something wrong, they could suggest to their broker to put them into something that did not contain the offensive stock. There were literally YEARS to prepare for this moment. Besides, anyone who didn't get out of tech stocks in 2000 was a fool.

Besides, all indications are that MS will only get a slap on the wrist and a half-hearted "don't DO that!" They 0wn the Department of Justice. Who's to say they haven't already bought and paid for a favorable verdict here too?

Why an effective monopoly is bad

[Thurn und Taxis]

You're not drawing a distinction between sole-source and monopoly. Most definitions of the word monopoly refer to exclusive ownership or control, but one definition says "a commodity controlled by one party" (from m-w.com). From the US government's point of view, having a 95% share in a market constitutes an effective monopoly (okay, I pulled that number out of my ass, but it's probably about right in this case). Sure, there are alternatives, but they aren't practical in most cases (see my example below).

You say "A company shouldn't be penalized for being successful...." This is entirely true, and this is why anti-trust laws were written very carefully. Companies are not punished for being monopolies. If your company makes product A so well that no one else can compete, great! However, companies are punished for using their monopoly in one market to wedge their way into other market rather than competing based on the merits of their product. This is exactly what Microsoft did with Internet Explorer (which, if you remember, was distinctly worse than Netscape Navigator until Microsoft used their monopoly powers to force IE on everyone).

I'm sick of hearing from people who think monopolies are bad, or who think this case is about Microsoft being a monopoly. It's not. This case is about Microsoft abusing their monopoly to gain control of other markets. The true importance of this case only comes to light when you consider that just about every company in the US (and maybe in the world) depends on Microsoft software to run their computers, and thereby to run their business.

To put it in concrete terms: let's say you want to start a business selling widgets. You've come up with and patented a method for making widgets that are twice as good and cost half as much as those of your competitors. Now you just need to set up a computer network to control your manufacturing, sales, and distribution network. Since you're a big fan of open-source software, you've built your distribution system using FreeBSD, Linux, or your OSOS (open-source operating system; not to be confused with ZOSO, a popular name for a certain Zeppelin album) of choice. However, you find that the available talent for your secretarial pool (or, in this day and age, the temps you hire) only know Windows, so you buy them a bunch of computers running Windows FU. Suddenly you get a cease-and-desist letter from Microsoft that says that under the terms of the license agreement (which the temps you hired that day clicked through when you set up the machines), you're only allowed to sell widgets if all of your computers have up-to-date licenses for Windows FU, and then you can only sell them at the prices Microsoft dictates. Suddenly you're in a position where Microsoft is controlling your business practices, but you can't tell them to sod off because your secretaries only know Windows. Admittedly this is an extreme example, but without control, Microsoft could have somewhat more subtle but no less disturbing effects on the global economy. Before being broken up, AT&T could've done the same thing. If we need laws to make sure that the companies supplying phone service obey common decency, then why should we be surprised to need similar laws in the computer industry?

Don't sell the Judge short!

[stox]

A careful study of Judge Colleen Kollar-Kotelly demonstrates that she is well versed in the law, and spends the necessary effort to research her opinions. I like this is in a Judge, even though I may not agreewith their opinions. IMHO, Microsoft's behavior, to date, has been a clear demonstration of why anti-trust law was created to begin with. I deeply hope that Colleen Kollar-Kotelly is able to see from a similar perspective. If we're lucky, she'll decide that Judge Jackson was far too restrained, and hand Microsoft ground butt in a handbasket. But, then again, I've always been a hopeless optimistic.