Close out to Microsoft Anti-Trust Case

duder writes "It appears that both sides in the Microsoft anti-trust suit are filing the closing arguments according to the Washington Post. " It doesn't look any surprises-CNNfn has an additional update as well. The DOJ and MS have filed sharply contrasting legal briefs-Microsoft claims there's competition, citing Sun and Red Hat, the government claims they have a monopoly. And give the US justice system, I'm sure we'll see the end to this case sometime shortly after Rob actually finishes reading Cryptonomicon.

Comments

Re:Linux is no competition to Windows

[Per Abrahamsen]

> I think, for example, that RMS was absolutely
> clear on that one.

Can you give a reference to that claim? It is quite contrary to what he say in other occations, so if he made a cliam in that spirit to the court, it would be quite dishonest.

Or are you trolling?

when do you label something a monopoly?

[SEAL]

Truly, my question posed here is the crux of the issue. I have to start this post with a nice standard disclaimer:

I am not a lawyer, but...

First, I believe that given their current track record in Judge Jackson's courtroom, Microsoft will receive a ruling against them. However, the really interesting part will be seeing WHY this ruling was made.

Microsoft will, no doubt, appeal the case. The details of the ruling in Judge Jackson's court will play a large part in determining how well they do in the appeals court. Right now, Microsoft feels that Judge Jackson is very biased against them (side note: gee I wonder why?). Therefore, their strategy is to assume that they will lose this round. They say that they are attempting to build a good basis to defend themselves in an appeal.

So back to my original question: when do you label something a monopoly? Well here's one definition:

MONOPOLY - This word has various significations. 1. It is the abuse of free commerce by which one or more individuals have procured the advantage of selling alone all of a particular kind of merchandise, to the detriment of the public.

All combinations among merchants to raise the price of merchandise to the injury of the public, is also said to be a monopoly.

A monopoly is also an institution or allowance by a grant from the sovereign power of a state, by commission, letters patent, or otherwise, to any person, or corporation, by which the exclusive right of buying, selling, making, working, or using anything, is given.

(source: http://192.41.4.29/def2/m138.htm)

Well let's cross of the 3rd one - that's easy, since the government does not say you have to buy Windows.

By the first definition, Microsoft COULD be in trouble. No, they didn't sell ALL of the operating system software, or browser software. But at what percentage do you draw the line? And can you prove it was detrimental to consumers? That's the tricky part.

The second definition COULD be used against them also. Once again, it is tricky to build this case, though. Did Microsoft use their monopoly to cause a price increase? Hmm. Do you include indirect profits? (e.g. give away a free browser, or sell your OS for cheap, then turn around and charge big server prices, since your Windows machines need a Windows server). Now, that's not necessarily true of course - just an example though.

Notice throughout this definition, though, that the word monopoly is really unrelated to whether or not you hurt your competitors. You can play dirty all you want as long as you aren't hurting the public, and you do, in fact, have competition.

Don't get me wrong - I think Microsoft's business practices are dirty, and they flex their muscle too much. But other companies (AOL and Sun, for example) can and do play the same way, given the chance.

Microsoft will probably lose this round with the DOJ, but I think in the end, after all the appeals and such, it will be very difficult to win a case against Microsoft, stating that they are a monopoly.

Signed,

SEAL

Re:when do you label something a monopoly?

[Gleef]

SEAL asks:

But at what percentage do you draw the line?
As far as I know, the current rule of thumb in antitrust law is 70%. Last I checked, Microsoft controls 90% of the Desktop OS Market.

And can you prove it was detrimental to consumers?
The easiest way is to prove that the Windows costs more than it would if Microsoft had no monopoly. The DOJ presented strong evidence of that in the trial. Another way is to show that the product is of an inferior quality then it would be without the monopoly. I think that's pretty obvious too.

The second definition is more to provent collusion between companies to create a monopoly. For example, if Coke & Pepsi were to arrange a coordinated price hike, so everyone payed more for soda, it would fall under the second definition.

This is much trickier to prove. It's clear (but tough to prove) that Microsoft and Intel colluded to push consumers into a never ending stream of hardware and software upgrades, hence raising the price (per year) of their products to the detriment of the public. It's clear that Microsoft's OEM arrangements would raise the price of non-Windows machines to the detriment of the public, and the DOJ touched upon this in the trial.

Yes, the definition of a monopoly does not have much to do with anticompetitive business practices. Where those come in is after a company is declared a monopoly. It is legal for most companies, but illegal for a monopoly, to use all sorts of anticompetitive business pracices. For example, a monopoly can't do bundling (eg IE & Windows, or Windows & DOS for the Caldera case), but other companies can, since they won't be tying one product to a monopolistic product.

It's clear from the trial that Microsoft is a monopoly, they did things a monopoly is not allowed to do, and they violated the consent decree that allowed them to stop the prior antitrust suit. What's not clear is what punishment will be levelled against Microsoft, and how effective it will be at preventing future abuses. I think they will lose, but after all the appeals courts are done, they'll be left with a slap on the wrist (i.e. a simple monitary fine plus legal costs).


----

Re:Is punishing Microsoft REALLY a Good Thing?

[remande]

Secondly, Microsoft isn't legally a monopoly in the first place. Lets not change the definition of a monopoly just because we hate Microsoft. A 90% market share alone does not make a monopoly--you have a control entry into the market place, for one. This means that you can block other people from entering the market. Microsoft can't really do that: that can't (and haven't) stopped Linux, Be, etc. from making their own OSes.

Monopolies do not stop people from making competing products. They stop people from being able to successfully market them. Microsoft has done a good job of this until the antitrust trial. Why is Linux gaining popularity? Because large companies like Intel are supporting them. Why is that happening? Because Microsoft, on trial for antitrust, can't afford to attack companies that support Linux. The trial is what makes Linux marketable today; it was basically unmarketable before the trial began. Yes, distros did exist, but not from any true economic perspective.

And the 90% marketshare applies ONLY to desktops--Windows NT is actually a MINORITY in the server market. Remember, 70% of all Internet servers, for example, are Apache (OPEN SOURCE SOFTWARE!) and that means they are running either Unix or one of its various clones. Even in LANs, Novell and Unix beat MS hands down.

Desktops are enough! Note that Microsoft is using their desktop monopoly to populate the server market. They work hard to make sure that you need Windows NT servers to run networks of Windows 9? machines. They are also using this monopoly, with Internet Explorer, to gain control of the Internet, by embracing and extending HTTP and HTML until the best way to communicate with Windows browsers is with Windows Web servers.

Finally, if Microsoft IS punished, this could be a nightmare for the industry. One, it means that the industry will have to be VERY careful about innovations, because they will have to be looking over their shoulders to make sure the DOJ isn't there watching their every move. Declaring the browser as part of the operating system isn't that farfetched--including Netscape on the Caldera distribution for instance, with a Caldera logo on it no less, is practically the same thing.

The precaution against bundling is not a problem for the rest of the industry. It is specifically a problem with Microsoft, who signed a legal agreement not to bundle as part of the resolution of a previous antitrust trial.

Look at from a car perspective: if the DOJ says that MS can't bundle IE with Windows, how much of a stretch is it to say DaimlerChrysler or General Motors can't bundle, say, an Infiniti sound system with their cars? If DaimlerChrysler or General Motors controlled the automotive market, there might be good cause to limit their ability to bundle certain stereos with those cars. Since they do not, however, consumer choice is safe.

Monopolistic corporations require more legal restrictions than other corporations, because other corporations are restricted by the marketplace itself. The point of antitrust law is to step in with legal laws where the consequential laws of a capitalist market have failed.

Upgrading my body by flicking my Bic

[Brian Kendig]

I read this part of Microsoft's "Finds of Fact" with great interest, amusement, shock, and horror:

• A Web Browser Is Not, by Definition, an "Application."

I got to thinking about that. I thought, why restrict this reasoning to just computers?

So I picked up a blue Bic ballpoint pen in my hand, and I am declaring it now an integral part of my body. I am obviously not Homo Sapiens any more, since I am now distinguished by my ability to write indelible marks on certain surfaces without the need for any additional, separate tools. To paraphrase Microsoft's argument:

There are several ways to create marks on paper. One way is to use a pencil or a pen. Because that is the choice most people make, it's commonly accepted that a pen is a separate tool. But the writing-related abilities in my new body comprise many elements, including the muscles in my hand and forearm and the clicky thing on top of the pen that I can make noise with. Depending on the context, it's common for me to use the term "pen" to refer to any one of these elements, but this does not mean that the pen in my hand is a separate tool like the pens that other people use. Although I have other pens which I loan to people sometimes, there is no identifiable "pen" which can be excised from my body without degrading my basic capabilities: if you remove the pen from my hand, then I lose the important ability to create marks on paper, and the pen is useless when removed from my hand. I got this pen from a K-mart at the same time as I got some deodorant and potato chips, so it's obvious that this pen is simply one element of a larger plan which affects my entire body and how I interoperate with other people. Rather than view this Bic as a pen that sits in my hand, it is more correct to view my hand and forearm as an advanced writing implement which is capable of many various tasks. My psychiatrist contends that people universally regard pens as tools and not as part of the human body, but he offered only anecdotal support for that "proposition" whose relevance is dubious anyway.

Hello????

[Amphigory]

Look guys... I would think that most of the people reading this page would have heard by now the legal definition of monopoly under the Sherman Anti-Trust Act. It is NOT the same as the common sense definition people keep arguing under.

A monopoly, in legal terms, is simply having enough market share that you can exercise a profound influence on the entire market. There have been succesful cases where the "monopoly" was only about 40% of total market share -- don't even try to tell me that Microsoft doesn't meet that definition!

Also, being a monopoly is perfectly legal! We have all kinds of monopolies, and they are completely legal! However, when you are a monopoly, there are certain things that you are not legally permitted to do. For example: you cannot use your monopoly power in one market to strong arm your way into other markets or engage in predatory pricing.

The question here is not whether Microsoft is a monopoly: it is obvious that within the terms of the Sherman Anti-Trust Act they are (all this "we have competition" talk is just a pseudo-populist smoke screen). The question is whether they (a) used there monopoly in the OS market to get into the browser market and (b) engaged in predatory pricing in the browser market.

That's all -- did they do those things??? If they did, then they should be found at fault in this trial to the full extent of civil liability. That's the law, if you don't like it change it. But we don't have ex-post facto laws; they are still responsible for their actions prior to any change in the anti-trust laws.

FWIW, IMNSHO they are guilty as sin and should be brought to task for the above and for their deliberate attempts to subvert the american political system. I think these attempts border on sedition. But that's another question.

they're guilty... what next?

[rde]

I've followed the Register's Microsoft coverage, and unless they were blatently biased, Microsoft shot themselves in the foot on every conceivable occasion; a guilty verdict cannot but be far behind.
But if that's the case, what happens next? Splitting up Microsoft seems to be the most favoured option, but while that'll stick it to Bill, I can't see it doing anything to encourage MS to move towards the light side.

Re:they're guilty... what next?

[Anonymous Coward]

A finding of facts in the case is due soon from Judge Jackson. (this does not involve questions of guilt/innocence or penalties. The Judge is aware of the bias in the appeals court and has split up the rulings(verdict) process into discrete steps so as to up the ante on them) The main event is a finding on whether or not Microsoft is a monopoly in desktop OS market. The Judge looks very likely to declare MS a monopoly. Whatever else happens this will have longlasting legal implications for Microsoft. His subsequent rulings finding guilt and innocence and legal remedies may all get overturned by the Reagan-Bush (2/3)appointed appeals court. It will be more difficult for them to overturn his finding of fact --would be too blatant an annullment. They can can argue that capital punishment is too harsh for the crime of manslaughter, but they can't argue that and that there was no unlawful death in the first place. In overturning Judge Sporkin's Consent-Decree they found for Microsoft that Judge Sporkin had read a book on Microsoft's corporate history and must have been biased against Microsoft. And on this excuse they threw the whole ruling out, without having to challenge the facts (did Ms do what was alledged and are these acts illegal). Judge Jackson will not make it so easy for them.

If the monopoly finding stands, current plaintiffs like Caldera and Sun will not have to prove Microsoft wields monopoly power in their cases. They can show evidence of attempts by MS to damage their technologies and confidently rely on the monopoly finding as the proof they need to claim that these malicious attacks are legally out-of-bounds and not just ordinary business competition. It also may have the effect of magnifying settlement/damages in the Caldera case and others I've forgotten about.

One argument the DOJ never seem to make...

[Paul Crowley]

Things have been going badly for Mr. Gates ever since Monsieur L'Entarteur, Noel Grodin, made him a present of a tasty cream pie. First the antitrust suit, then the arrival of Linux on the public consciousness and rapid exponential gain in popularity. In true Sumo wrestler style, he's tried to fend off one attack with another, pointing at the rise of Linux as a reason why he can't be a monopoly.

But the case isn't about what's happening now; it's about whether Microsoft had behaved illegally prior to February 1998. The DOJ can silence this line of argument with one simple suggestion:

"You only now have competition *because we're suing you*. You behaved illegally, so we dragged you into court. Now you're having to behave yourself to stand a chance in the trial, it's not as easy for you to tell people "you'd better buy our product because all our rivals are doomed", and competition is returning to the marketplace. But if the court allows you to get away with the way you used to behave, you'll be back to the usual FUD, lock-out, and illegal monopoly behaviour faster than you can say 'not guilty'. Your honour, I put it to you that this behavour can only be brought to an end if we THROW AWAY THE DAMN KEY!"

Anyway, I'm sure it won't matter. They've *really* pissed Judge Jackson off, and now Microsoft are going to lose so badly your head will spin in two directons at once. And they'll find it very hard to appeal the decision - especially after they jail Mr. Ballmer for perjury...

We keep winning, don't we?
--

Re:One argument the DOJ never seem to make...

[um... Lucas]

As much as we love Linux here, it's inappropriate to say that Microsoft faces serious competition from Linux for anything other than WinNT, which is a much more specialized product than Windows 98. I know we all want linux to compete with Windows as a whole, but that competition has not materialized.

Microsoft can not defend itself by saying that they face the potential for competition in the future. One of MSFT's primary sources of competition for Windows 98 adoption, according to their own documents, was customer compliance in using Windows 95. It wasn't Linux or Be, it was just their own customers that may not want to upgrade. THAT IS NOT COMPETITION.

AT&T could have said that there existed the potential of creating satelite based communication systems, and therefore they didn't have a monopoly.

Standard Oil could have pointed to the possibility of using Nuclear Power in the distant future and their fore they faced the potential for competition.

The potential is not enough. It's either there or it isn't, and right now, Microsoft does not face serious competition. They should be declared a monopoly, and have all of their future behavior subject to scrutiny. 18 months from now, if the situation has changed, then regulation of them could be rolled back in order to account for the change in market condidtions.

Re:One argument the DOJ never seem to make...

[dattaway]

I couldn't have said it better myself. Before the DOJ sued them, a person *could not* buy a personal computer without MSDOS (or IBM's branding of MSDOS) on it. Now that Microsoft has scortched the earth with its monopoly and we are fighting back, it claims there is competition. Was it fair that all the innovative software startups be pushed out and bought out, leaving Microsoft to aquire the remaining marketshare and patent rights?

What does this teach us? If we lie, cheat, and steal to get our wealth, do we have a right to keep it?

Re:One argument the DOJ never seem to make...

[Brian Kendig]

Yes, Microsoft has ticked off Judge Jackson -- but that can work in their favor. If he makes a decision based on his personal feelings towards the witnesses in the trial, or (more importantly) if Microsoft can introduce reasonable cause to believe that he was biased by any personal opinions towards any of the witnesses, this makes it much easier for them to appeal the case. If Judge Jackson had lost his temper with any of the Microsoft witnesses, Microsoft would probably have moved for a mistrial.

What I don't understand is this: Microsoft is basing a large part of their defense on the state of the market today. Aren't they on trial for past misdeeds? It sounds like if Judge Jackson decides the market is healthy today, Microsoft will get off free and clear -- what about all of the predatory business practices they've been exercising for the past ten years?

Linux is no competition to Windows

[aUser]

The DOJ must indeed insist with the court that Linux is no competition to Windows.

Linux is nothing more than a job protection programme for nerds, who insist on the idea that every computer user types in stuff like: gcc -La.out -vi -OMyThing.o -kMyProgram.cpp -1 -2q ...

... Or else stay away from computers. I think, for example, that RMS was absolutely clear on that one.

That's why I believe that Microsoft must be split up into at least two companies, one for the Windows, and one for applications. Furthermore, Windows must be regulated as an essential utility, until there is sufficient competition on the desktop.

I would say, as soon as Windows has a market share below 50%, this arrangement may be reviewed.

Re:Linux is no competition to Windows

[Trepidity]

Every time somebody mentions how to compile a kernel it's different - perhaps that's part of the problem. I've never seen your 4-step sequence mentioned before. The ones I've seen all include "make config" and "make zImage" or "make bzImage" as two of the steps.

Re:Linux is no competition to Windows

[Trepidity]

You forgot "make clean" and "make install" and whatnot. When compiling a kernel is a 5+ step affair, things are not good.

Re:Linux is no competition to Windows

[aUser]

I surely don't want to see Microsoft or Windows disappear or destroyed, and definitely not now, right away, while so many people depend on it to run their computers.

Windows is, in my opinion, an essential utility. Of course, the average business user can do all their work as well on MacOS. However, they have an large investment in "implemented" software on Windows. It's absolutely unfeasible to ask them to move this software, and data (often stored in proprietary formats) to another OS. Everyone will need a sufficient span of time to migrate, when a credible alternative comes along.

APIs, protocols, and data formats have to some extent the similar properties to natural languages. Of course, you can say everything in Spanish. Of course, you don't need English. However, if you spent half your life studying English, and use it every day in running your life, you have a large "implemented investment" in the English language. It will take time and a lot of effort to move to another language.

MacOS is not that much of a solution that addresses these issues. MacOS requires you to invest, not only in proprietary OS, but also in proprietary hardware. I don't think this is an attractive proposition. It's, beyond any doubt, the main reason why PCs beat Apple in the market, in spite of the fact that Apple technology was quite often more advanced and more user-friendly. Most of us were just not interested, whether Apple was better or not, we just saw what Apple was trying to do with their proprietary hardware.
Going from Microsoft to Apple is going in exactly the opposite direction as you should go.

Which MS is on trial?

[Evro]

When this whole lawsuit thing began, or even before it, MS definitely had a monopoly. But that was so long ago. Now look at the changes that have occurred since the beginning of this craziness: Red Hat has become huge, AOL bought Netscape, Apple's stock practically doubled in the face of its new products (was the iMac introduced before or after this trial started?), and countless other changes have occurred.

I'm not saying Microsoft doesn't still have an unfair advantage, but I'm wondering what time frame this trial is supposed to be considering. Is the question, "Does Microsoft have a monopoly today?" or is it, "Did Microsoft have a monopoly in 1997 (or whenever this thing began)?" They are different questions, and I think we need to know which one is being asked (as does the judge) before making a decision.

Re:Which MS is on trial?

[IntlHarvester]

When this whole lawsuit thing began, or even before it, MS definitely had a monopoly. But that was so long ago. Now look at the changes that have occurred ...

You're making the assumption that there is a unified market for personal computer operating systems, which there clearly is not. Hopefully the DOJ doesn't fall into the same trap.

MacOS is only defending their traditional educational, student, and publishing nitches. To be fair Apple pretty much invented these computing markets, and has never really done well elsewhere.

Linux has carved out a workstation nitch in academia, and a server nitch at ISPs and more saavy corporations. Lots of techies are duel booting to learn the thing.

No one has began to touch Windows on the corporate desktop. These systems (and all the work-at-home machines) are still willingly locked-in to the Microsoft monopoly by their owners.

Re:Which MS is on trial?

[IntlHarvester]

I see your logic, but I'd need proof that it's actually the case. Especially for server machines that are as likely to have NetWare (etc.) on them as anything else.

Don't forget Dell is selling into the most price-insensitive part of the Linux market -- the group of people that don't want 'free' or '$2' or '$50 retail box' and instead want preinstallation, integration, and support. (Think of the IT manager watching his $100/hour Unix contractor tabbing through the RedHat install. Dell's cheaper than that.)

I can see why Dell would soak these people for an extra $100 to help finance all of the internal changes necessary to support Linux (sales, accounting systems, testing, training, and so on.)

Re:Which MS is on trial?

[MindStalker]

A crime is a crime. One isn't free from justice for their past crimes just because they changed their ways, (or not given a chance to commit many new crimes). Generally once a trial begins usually what facts and evidence exist at the beginning of the trial are the facts used throughout the trial.

Re:Which MS is on trial?

[geocajun]

I think when this trial is over no matter what the outcome is, you will see the press shut up about linux.. then watch win2K get hyped with new features that make it proprietary... and just like that... they reclaime thier monopoly.

I think the monopoly is just on hold right now...

(Somewhat) apropos song parody...

[Hwatzu]

I wrote this in February, but it's been languishing on my HDD ever since. Considering the impending decision by Judge Jackson, I thought I'd share this with you all. Enjoy this li'l parody. (Or not. :) )

"I'm just a Bill"

Original lyrics: Dave Frishberg
Satiric lyrics: David McGrath

BOY: Whew! You sure gotta go through a lotta hoops to return Windows for a refund, especially here in Redmond! Hey, I wonder who that sad little nerd is...

NERD: I'm just a Bill,
Yes, I'm only a Bill,
And I'm sitting here in my office still,
'cause it's a long, long journey
To the capital city,
It's a long, long wait,
Hopin' the government takes pity
But I know they'll let me make more money someday...
At least I hope and pray that they will,
But today I'm still just a Bill.

BOY: Geez, Bill, you certainly don't have much patience or modesty.

NERD: Well, I got *this* far. When I started, I wasn't even well-to-do! I was just a thief. Some folks back in Dartmouth College wrote this neat programming language called BASIC. I fished it out of the trash, added a few minor things, and pretended it was my own. I told them, "Free software's a bad idea. There ought to be a law!" And someone sat down and wrote a law against piracy, and commercial software became popular, and that's how I became Bill. And I'll remain a Bill until they decide to throw out this silly court thing.

I'm just a Bill,
Yes I'm only a Bill,
I'd go to D.C. but I lack the will.
Well now my company's stuck in court
And I sit here and subvocally cuss
While a few expensive lawyers
Debate and discuss
Whether they should
Let my company go free...
Oh how I hope and pray that they will,
But today I am still just a Bill.

BOY: Listen to those lawyers arguing! Is all that debate and discussion about your company?

NERD: Hey now, it's not my company, I'm just the CEO! ...er, I hope my lawyers win, otherwise I may die.

BOY: Die?

NERD: Well, be forced to pay lots of money, but it's the same thing. Oooh! We managed to confuse the judge into missing some of the tricks we tried. Looks like we won't have to go to the Court of Appeals after all.

BOY: But what if you had to?

NERD: Then I'd appeal when this is all over, and the whole trial starts all over again.

BOY: Oh, no!

NERD: Oh, yes!

I'm just a Bill,
Yes I'm only a Bill,
And if my lawyers get me off in the trial,
Well then I'm off to make software
And people will wait in rows
With a lot of other people
Who're willing to pay through the nose
And don't know 'bout Macs, Linux or BSD...
Oh, how I hope and pray that they will,
But today I am still just a Bill.

BOY: Wait a minute. You mean people don't *have* to buy your products to run my computer? See yuh! I'm going to have to do some research!

NERD: Hey hey hey, get back here! Yes, that's called "choice." If a majority of people stop purchasing programs we make or co-opt, and especially if we lose this case, I'll have to cough up lots of money to keep my company solvent, and I might have to actually start working for a living.

BOY: And by that time, it's very unlikely that you'll ever *become* rich. Gee, it's not easy to be a ruthless multi-billionaire if you aren't allowed to fool and force people into buying your shoddy software, is it?

NERD: No! But how I hope and I pray that I will,
But today I am still just a Bill!

LAWYER: We bribed the judge, Bill! Now you're free to *cough* innovate!

NERD: Oh yes!

Re:More media fun!

[Hobbex]

Didn't Apple make the same mistake when IBM was just a start-up company? Thinking there was still lots of business in the mainframe market while IBM dove for the PC market and became the standard, leaving Apple to content themselves with being second best?

Yeah, Apple's moves around 1911 were horrible, and really hurt the company. I know my great-grandfather got hit pretty bad for investing in Apple stock around that time.

They should have opened up their Abacus design and allowed clones, but no...

-
/. is like a steer's horns, a point here, a point there and a lot of bull in between.

the documents in question:

[CocaCola]

The full text of the DOJ filing can be seen here, the Microsoft filing can be seen here.
At first glance the DOJ filing is a well-constructed set of arguments based on the evidence presented during the trial, the Microsoft one is full of anti-government rhetoric and outright contradictions. YMMV though.

More media fun!

[Kitsune Sushi]

"A Microsoft attorney said the company will point to the remarkable financial success of Red Hat Inc., a leading vendor of the upstart Linux software operating system."

Too bad Red Hat went public looong after the antitrust suit was actually filed. Isn't this a bit late in the game to point to current trends? As much as we'd like to change the past..

"An economist who testified for the Justice Department, Franklin Fisher, had dismissed as ``a joke, of course'' the potential threat that Linux posed to the market dominance of Microsoft's Windows software."

Nice to know that people who testify for the DOJ don't watch the news.

"The Microsoft lawyer, speaking on condition of anonymity, said the company will tell the judge it believes Linux to be ``real competition.''"

I'd want to remain anonymous too after all the hoopla associated with Bill Gates' insistence that Linux isn't a threat.. not to mention the backing of several of his other yes-men. Nice to know that at least one person has some sense amidst that pack of utter liars.

"The Justice Department has argued that Linux has been successful challenging Microsoft in the sale of high-end business ``server'' computers, not consumer machines."

Not for long, baby. Once the hardware manufacturers realize that, then I'll be happy. I think it's absurd that IBM is taking a "wait and see" stance with regards to Linux PCs. Didn't Apple make the same mistake when IBM was just a start-up company? Thinking there was still lots of business in the mainframe market while IBM dove for the PC market and became the standard, leaving Apple to content themselves with being second best? Also, it's remarkable how many people say Linux has "a steep learning curve". I'm not sure how many people are aware of this, but among the average human, -Windows- has a steep learning curve (not to mention computers in general).

"And Microsoft Chairman Bill Gates was quoted in earlier evidence in the trial as saying at a technology conference this spring that Linux's impact ``will be fairly limited'' and that he's never had a customer mention Linux to him."

I don't think Bill even listens to his customers, so of course he never heard them mention much of anything.. Or else maybe he'd take the hint that people don't like it when their system "develops random features". I'm sure he thinks it's "cute", however.

"Microsoft also was expected to cite an announcement just days ago by rival Sun Microsystems Inc. that it has begun distributing free on the Internet a package of business applications meant to compete with Microsoft's Office software."

Now this is even sillier.. Who in their right mind is really afraid of Sun Microsystems or anything they have to offer? Perhaps in time their stuff will be good (they certainly have some nice concepts.. but in a business, you need more than just a bunch of "idea men" and loony ad campaigns), but for now Java and its associated hype goes a long way to prove how immature they and their products still are.

As a side note, anyone who thinks Sun is "really cool" and not just another corporate entity that has absurd notions of, well, just about everything, feel free to peruse these terms, which you must agree to if you want to post one of their logos on your site.. even if its simply as a supporter of Sun's technology. This stuff is pretty wild..

Defining the Market

[overshoot]

Have a look at OS sales and one thing should be very, very clear: end-users aren't driving this bus. Total retail OS sales are 'way down in the noise because the OS that runs on nearly every machine is the one loaded onto it at the factory.
The market for operating systems is the OEM preload market.
Now in that context, how much competition is there? Ask yourself what would happen if Microsoft had told (e.g.) Compaq in 1996 that they could only have Windows at full retail price. Could Compaq have substituted a "competitor's" operating system?
If you look at the actual dynamics of the industry, end-users aren't the consumers. As with TV, they're the product. Microsoft offers Dell, Compaq, and the rest access to us the same way that NBC delivers consumers to General Motors.

Is punishing Microsoft REALLY a Good Thing?

[Surak]

First of all, if Microsoft wins the case, this will be a vindication for Linux! This will mean that yes, Virginia, Linux IS competition for Microsoft. Is that such a bad thing? I don't think so. It means that Linux will actually be viewed as a legitimate alternative to Windows NT by even more people than before. That in and of itself is a Good Thing (tm).

Secondly, Microsoft isn't legally a monopoly in the first place. Lets not change the definition of a monopoly just because we hate Microsoft. A 90% market share alone does not make a monopoly--you have a control entry into the market place, for one. This means that you can block other people from entering the market. Microsoft can't really do that: that can't (and haven't) stopped Linux, Be, etc. from making their own OSes.

And the 90% marketshare applies ONLY to desktops--Windows NT is actually a MINORITY in the server market. Remember, 70% of all Internet servers, for example, are Apache (OPEN SOURCE SOFTWARE!) and that means they are running either Unix or one of its various clones. Even in LANs, Novell and Unix beat MS hands down.

Finally, if Microsoft IS punished, this could be a nightmare for the industry. One, it means that the industry will have to be VERY careful about innovations, because they will have to be looking over their shoulders to make sure the DOJ isn't there watching their every move. Declaring the browser as part of the operating system isn't that farfetched--including Netscape on the Caldera distribution for instance, with a Caldera logo on it no less, is practically the same thing.

Look at from a car perspective: if the DOJ says that MS can't bundle IE with Windows, how much of a stretch is it to say DaimlerChrysler or General Motors can't bundle, say, an Infiniti sound system with their cars? Isn't bundling a stereo with a car hurting the aftermarket stereo folks? Afterall, the DOJs main argument is that MS is hurting competition by bundling a Web browser with its OS. The browser may be inferior to the alternatives, but so is the stereo. By all arguements against Microsoft, the fact that it is bundled alone will prevent people from buying someone else's browser. This is also true for the stereo. Most people do not add aftermarket stereos to their new cars. But some people do, particularly those who are knowledgeable about audio and want audio perfection.

Also, if the DOJ breaks up Microsoft, 2 or 3 Baby Bills will be MORE of a nightmare than one Microsoft. Imagine fighting not one, but now THREE Microsofts. No thank you.

How is a FREE o.s. "Competition"?

[Ungrounded Lightning]

Doesen't it seem odd to you that the only significant "competition" being cited is a system being given away for free? How is it a competitive environment when one company can sell its product for real bucks and everybody else has to give theirs away and make money on packaging and service, or get squeezed out?

Isn't it "harm" that Netscape had to stop selling its browser and start giving it away to keep Microsoft from taking over the browser market? Isn't $0/copy the limiting case of a cross-subsidy?

A free market

[WillAffleck]

Yes, but the classic definition is a free market, with zero cost of entry, zero cost of information, all information available to all participants, and in which no contracts can be made that impinge upon these.

Like we have ever had that.

The only thing that has been changing is that cost of information and availability of information are improving - but they're not free, just cheaper.

Linux IS NOT competition...

[Anonymous Coward]

..on the desktop, yet. On the server side, it's pretty good, since anyone installing a server is (usually) competent enough to install linux.

But, where I work, I distributed 5 RedHat 6.0 cd's to my co-employees, and all tried installing it at home. Only one person liked it and was excited by it, and continues to use it.

The other four switched back to Windows 98, citing that Linux was "too hard to setup and use".

The stunning part is that all five have degrees in computer science, and write C/C++ on Unix machines for a living.

Somehow I doubt Linux is much of a threat to Bill Gate's monopoly! At lest not for another couple years.

Also, remember Microsoft is NOT on trial based on what will happen in the future, but their activities in the past. The "future" of the software market probably plays a much smaller role in the Judge's decision than the past and current markets. Besides, isn't NT use still expanding rapidly?

The DOJ handles the Linux argument nicely

[drig]

Another /. reader posted a link to the DOJ website here. I think the DOJ is handling the Linux issue nicely.

To recap; MS is arguing that Linux poses a serious threat to Windows, due to RedHat and others.

The DOJ says this doesn't hold water. They quote a number of MS witnesses that all said that Linux isn't currently a threat, but may become one in the future. The DOJ argues that future predictions never have and don't currently make any difference in a trial. The DOJ goes on to say that MS's change of heart contradicts many past sayings by MS, and that their contention is less than honest.

Furthermore, the DOJ points out that MS increased the price of Windows 95, despite the preceived competition, after Windows 98 was released. This points directly to monopoly power.

Guilty verdict, then appeal?

[Aleatoric]

It has been argued (quite accurately, IMHO), that the mere fact of the trial has essentially imposed a restriction upon any blatantly anti-competitive practices by Microsoft. As long as they are under the auspices of a trial, and the resulting public scrutiny, they can't make any obvious efforts to quash competition (or perceived competition).

Given some of the gaffes made by Microsoft during the trial, and Judge Jackson's apparent attitude towards MS, there's a pretty good chance that a guilty verdict will be presented, which Microsoft will certainly appeal.

I would say that regardless of the punishment proposed in the event of a guilty verdict, it is the verdict itself (and the resultant appeal) that will provide the best short term protection for competition. An appeal would keep the issue public, and impose the same restrictions on potential anti-competitive behaviour as does the current trial. If we just had a guilty verdict, regardless of the actual punishment, it would very shortly leave MS in the position of being able to engage in more anti-competitive behaviour (at least until a subsequent trial).

Re:a crime is crime ...

[MindStalker]

Answer to your question can be found at the main washington post article linked in this story (which many didn't fully read) 5th paragraph from to bottom is:

But asking Jackson to take ``judicial notice'' of the industry changes is an unusual legal ploy since the evidentiary record in the trial is officially closed. The judge can recognize these events but can't consider them as evidence because the government wasn't given the opportunity to challenge Microsoft's interpretation of their meaning.

Don't forget the appeal!

[werdna]

Even if Microsoft does lose handily at the District Court level, don't underestimate the significance of the prior Circuit Court reversal of earlier pro-government findings against Microsoft. The appeal will be to the same Circuit Court, perhaps to some of the panelists, but which panelists will be bound by the precedents set forth earlier.

The bottom line is that the fact findings not only have to be anti-Microsoft for Microsoft to lose, but specifically geared to distinguish the prior case.

At the end of the day, this could all be mere window dressing if the District Court's opinion is reversed. And then, of course, there is always the Supreme Court, who are not particularly friendly to anti-trust claims these days.

In other words, while the battle has been joined, and Boies made mincemeat out of Microsoft's legal giants at trial, victory is not certain. But even if the DOJ does prevail, this result will merely be the result of one battle of a larger campaign.

So watch out for the legal analysis of the fact-findings -- it's not only whether these findings go well for the government, but do they distinguish the prior Circuit court case.

Monopoly or just no competition?

[sporty]

I know this will be ranked downward since people will no doubtedly see this as pro-MS advocacy and anti-linux FUD, but..

Was there ever real competition? There WAS OS/2 for a brief moment of glory, and DesqView, but as the graphical age came along, Windows won out. Joy, now we have to deal with Windows because it was the 'easiest' thing to use though it wasn't the best.

Linux those days, I remember running it. It wasn't as great and was more of a hobby for me. It wasn't too difficult to install, but if you didn't have the right hardware, you were cooked. That's why I left linux a while back - lack of support for the NCR53c875. *nix caught up in the PC end and look where it is now. It supports LOTS of different hardwares. When I started using X, it had support for about 23-30 video cards. Now it has support for about 500 cards and their minor variants.

MS had no competition, not because MS had such a great upper hand, there was nothing else graphical that existed and was well supported. Not to say that nothing was as great, but Windows was more well known and developed for. Too bad it wasn't great for anything but the home market.

What DID MS have? They had the PC market, but to keep it safe, they performed unfair activities. Of course, they were involved in other unethical buisness practices, such as absorbing the competition. When *nix got as big as it did, MS couldn't do anything to stop it. Who was there to buy? Linus and *bsd.org? Someone else would just continue the projects. PC *nix now more popular than ever, not as easy to use, but works great.

My verdict? Monopoly by virtue, unethical by practice in maintaining the virtue. Unethical in other practices also.

Netscape & AOL

[mattdm]

I always find it amazing when people list AOL's purchase of Netscape as anything other than a clear and crushing Microsoft victory. I mean, this was the company that was supposed to change the landscape of the computing world.

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