Microsoft smackdown

Sending a message to the entire tech industry.

AS THEY SAY on the pro wrestling circuit, "OOF! That's gotta hurt!"

Nobody was expecting Judge Thomas Penfield Jackson to go easy on Microsoft when his Findings of Fact were distilled into Findings of Law this week. Still, it's something to see Steve Ballmer in front of the cameras testifying like Jimmy Swaggart and invoking Microsoft Family Values.

Invocation of Republican Party rhetoric in the previous sentence is entirely intentional. Microsoft may or may not have the marrow leached from its bones by the long and tedious legal appeals process, but by holding out against what they perceived to be untenable settlement offers, the company managed to kick the ball into the next Administration's sandlot.

While Bill G. encored his usual we-didn't-do-nothin' routine ("we did right; the consumers know that") at Monday's press conference, Steve B. offered that "we spent the past 25 years thinking of ourselves as a small, aggressive company, playing catch-up to large companies—even though at some point along the way we became a large company." Well, yeah. Microsoft's refrain is that they "went the extra mile," that they'd done their best to make the mediation process work; in fact, they professed mild surprise that Judge Richard Posner (the federally appointed mediator who threw up his hands on April Fools' Day) had given up on the process. At least 19 drafts of possible settlement terms made the rounds, representing hundreds of hours of hard labor on the part of all hands.

What none of that labor could do is to undo the Findings of Fact, the voluminous document with which Microsoft still has issues. With those findings underpinning the discussion, federal and state plaintiffs were holding what Microsoft likely perceived as all the cards. A settlement is still possible, but now Microsoft is free to try their luck at another dealer's table—that is, at the appellate level. The current administration is unlikely to significantly change the composition of the appellate courts before disbanding at year's end. Those courts have been known to interpret antitrust in ways that favor large companies (including Microsoft); moreover, even though we're past the evidentiary portion of the proceedings, Microsoft representatives feel that the ever-changing face of the technical market will not go unremarked in the higher court.

The November elections are also likely to undermine the coalition between federal plaintiffs and the group of 19 state attorneys-general. According to some reports (and as hinted in Judge Posner's exit interview press release), the AGs were far less willing to compromise on . . . well, on what is something we may never know, since the records are sealed. Still, representatives of the AGs were pleased with Judge Jackson's findings: "You have to look pretty hard to find a silver lining for Microsoft," said one. Jackson's findings are indeed both broad and specific; it's unlikely that Microsoft can get them all thrown out. If they can't get them all thrown out, various class-action suits can still get traction. Microsoft will, in other words, not emerge from this unscathed, no matter how often Bill piteously bleats that the company was only doing what they thought previous judges had allowed them to do.

But how scathed must Microsoft be to make a difference? Probably more than they will be. Though this may be a satisfying smackdown for Microsoft detractors and an encouraging sign for open-source warriors, the Continuing Saga has little impact technically. Developers will sense neither glasnost nor perestroika when coping with the Redmond Menace. There is still, as Jackson points out, no viable consumer-market competitor to Windows, nor will there be for a while. The attorney general of Iowa made haste to assure a local reporter that innovation and lower prices were just around the corner, but it sounded more like stumping than prognostication; innovation and lower prices for what products? Are they cooking up an operating system back in Des Moines? If so, more power to 'em; maybe an announcement will cure the not-known-for-their-technical-understanding NASDAQ crowd of Monday's case of the vapors. (Not that it should be cured, but that's another article. People who don't understand the difference between a money-losing dot-com and a quarter-century-old company that makes actual money and lots of it, well, they deserve what they get, and earlier this week they got mugged.)

This trial was a necessary kick in the ass/reality check for not only Microsoft but for all the industry's established players, many of whom wouldn't be out of place at trials of their own (hear that, Steve Jobs?). Many of the fabled figures at Sun and Oracle and Apple are at least as evil as Bill/Steve have ever been, and given sufficient reach would be equally happy to (as Judge Jackson put it) "put an oppressive thumb on the scales of competitive fortune"—no, there are no angels in Silicon Valley. (And nothing will resurrect the desiccated corpse of Netscape.)

Putting the kibosh on Microsoft's strong-arm tactics sends a message to all of the industry's players: The world is watching. The tech industry may move exceedingly fast, but the judicial process will continue to grind exceedingly fine. For all those who correctly point out that Microsoft is less about tech revolution and more about tech evolution, you're dead right today: They've evolved the whole industry firmly into the crosshairs of How the Rest of the Country Does Business.

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