Microsoft: Judgment Day

Microsoft: Judgment Day

Despite all the palaver, the denouement came quickly.


Despite all the palaver, the denouement came quickly. Microsoft’s decision to walk away from Judge Richard Posner’s mediation efforts and to stake its future on overturning Judge Thomas Penfield Jackson’s legal conclusions immediately resulted in the release of a judgment no one is going to overturn. Bill Gates, who as a child probably didn’t play well with others, has elected to knock over all the blocks rather than share. Judge Jackson, for his part, has brought the Microsoft Era to a certain and devastating end.

The fate of Microsoft is now sealed. Whatever remedy Judge Jackson may eventually decide to impose, Microsoft will be distracted, eroded and dismembered by the avalanche of private antitrust litigation that Judge Jackson’s findings of fact and conclusions of law make possible. The most difficult burden for most antitrust plaintiffs is that of proving that their adversary possesses monopoly power in the relevant market; the second most difficult is that of proving that their adversary’s actions constituted an attempt to achieve or maintain that monopoly power by forbidden means. Now any firm that believes that Microsoft has deprived it of fair opportunities to compete in the market for PC software need not prove either of those matters. Jackson’s judgment means that the facts he found last November are unassailable by Microsoft in other litigation, the effect of what lawyers call “collateral estoppel.” In order to recover antitrust damages, which under the Sherman Antitrust Act are triple their provable monetary losses, firms need only prove that Microsoft’s conduct–as a proven monopolist that maintained its monopoly by illegal means–caused them monetary harm. Microsoft faces at least a decade of litigation with all the market participants it has threatened, knee-capped or destroyed. Gates’s e-mail, that reservoir of documented commercial knavery unprecedented in the history of American antitrust litigation, will be in constant demand. The litigation will constrain Microsoft, opening opportunities for new competitors to emerge free of the hitherto omnipresent concern with Microsoft’s probable response to each and every attempt to create new protocols and possibilities for the Net.

By the evening of April 3, mere hours after release of the judgment, the nature of the Microsoft response was clear. The right of appeal, the company said, would result in Microsoft’s exoneration. But that is unlikely–even if the case goes all the way to the Supreme Court. Judge Jackson’s legal conclusions are painstakingly related to his factual findings, which no appellate court will disturb unless they are “clearly erroneous,” a standard that is unlikely to be met in the mind of even the most skeptical appellate judge. Jackson’s application of antitrust doctrine in his opinion, which accepted most but not all of the plaintiffs’ legal theories, was deliberately orthodox, not experimental or innovative in any respect. And despite the pending appeal, the collateral-estoppel effect begins immediately, as will the flood of private litigation.

Gates also declared that Jackson’s opinion “turns on its head the reality that consumers know”–that Windows made computers more accessible to people throughout society. But antitrust is not only about consumers’ welfare. As I wrote in these pages [see Moglen, “Antitrust and American Democracy,” November 30, 1998], antitrust is also, and primarily, about protecting democracy from overconcentrations of private economic power. Gates’s invocation of “what consumers know” distorts antitrust law to lose this point.

How PCs work in the era of the Internet is an essentially political question. If Microsoft had wanted to give desktop icons to the Democratic and Republican parties but not to the Greens, no seller of a “Green PC,” designed to appeal to the socially conscious buyer, could have added a Green Party icon without Microsoft’s permission. Monopolization of the PC operating system by a single commercial entity determined uncounted political and social questions by default, in ways that consumers never had a chance to understand.

This power to control the environment of the PC, in which more and more of us spend increasing proportions of our lives, conveys a power to shape, at a level so ubiquitous as to be barely noticeable to the average user, the nature of the public discourse. Which Internet medium can everyone get to with one click? Which points of view are considered appropriate for everyone’s computer to represent? Throughout the era of the Microsoft monopoly, those decisions were made by a single private power, ceding it more undivided leverage over our collective symbolic environment than anyone in our society. For this reason, the destruction of that monopoly is far more important to the politics of our age than destruction of the petroleum or tobacco trusts was in the era of Theodore Roosevelt. Microsoft will no doubt argue that this increase in diversity will somehow destroy the benefit to consumers of an environment of widespread technical compatibility. This argument is a fallacy. Consumers will not have less good software to use once the Microsoft we know has perished. The culture of the Net will be in all ways healthier, and the politics of the information society will have lost its single most undemocratic feature.

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Katrina vanden Heuvel
Editorial Director and Publisher, The Nation

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