It has been six years since the U.S. government first alleged Microsoft was engaging in anticompetitive behavior, a time frame the U.S. Court of Appeals said “seems like an eternity in the computer business.”
On Thursday the Justice Department said, in effect, enough with eternity. Time to get to the here and now.
Finally.
The Justice Department announced that the government will no longer seek to break up one of the most successful companies in American history as punishment for antitrust violations. The decision is most welcome. It should–it must–allow for a quick resolution of the antitrust case, one that will focus less on punishment and more on open competition and benefits to Microsoft’s customers.
This decision was not a great leap of faith by the Justice Department, nor a sop to Microsoft. The appeals court last June, in overruling U.S. District Court Judge Thomas Penfield Jackson, argued persuasively that Microsoft had engaged in anticompetitive behavior but the transgression hardly warranted dismantling the company.
In light of that ruling the Justice Department still had an avenue to pursue a Microsoft breakup, but it would have meant a long, long time in court. Maybe two eternities.
So Justice wisely dropped that option. It also decided to abandon its case alleging that Microsoft illegally bundled its Internet browser into the Windows operating system. Such tie-ins are troubling when they make it impossible for competitors with a better product to gain a foothold. But tie-ins often give consumers more convenience. The government’s case was thin gruel.
So what has been proved to this point is this: Microsoft holds a monopoly in PC operating systems and used illegal tactics to defend that monopoly. The Justice Department and the several states that brought suit will now pursue a negotiated settlement that seeks “prompt, effective and certain relief for consumers.” That is precisely what they should be doing.
In its ruling overturning parts of Jackson’s decision, the appellate court also noted, “By the time a court can assess liability, firms, products and the marketplace are likely to have changed drastically.”
That’s true, and it should be remembered as the negotiation moves on. The remedies that the Justice Department is considering may well delay Microsoft’s new Windows XP operating system, due out in October. Much of the computing industry, not just Microsoft, has been hoping that Windows XP will give this moribund business sector a needed jolt.
Microsoft may yet be required to fundamentally change its practice of making certain exclusive deals with partners that give an unfair advantage to Microsoft products by forcing computer makers to keep specific icons and programs on the Windows desktop screen. The government believes such a remedy would open the operating system market to competition. That would be a reasonable resolution to a case that has, indeed, seemed to be going on for all eternity.
