OS/400 Edition
Volume 11, Number 47 -- November 11, 2002

Judge Approves Settlement of Microsoft Antitrust Suit

by Timothy Prickett Morgan

You would think that the fact that U.S. District Judge Colleen Kollar-Kotelly last Friday ruled on the Microsoft antitrust lawsuit that has been bouncing around the courts for three years would finally get all the lawyers and interested parties to shut up. Quite the contrary. Even before Judge Kollar-Kotelly upheld the settlement, tongues were wagging on all sides of the issue; there are far more than two sides to this story, and if there weren't, the lawyers would try to make more.

Not everyone agreed with the relative leniency of the settlement that the Justice Department, Microsoft, and nine state attorneys general agreed to in November 2001, and many still did not like the amended agreement that came out in February 2002, after much wailing and gnashing of teeth amongst those believing that Microsoft needs more stringent curtails on its behavior. In the 20th Century, the U.S. government has been fond of regime change for foreign powers--the latest controversy with Iraq is but one in a long line of overt and covert actions by our government--but it is less than inclined to mess with business, and even less so when it comes to big business. And even if those public servants in the Antitrust Division, who are expected to protect the rights of consumers by the application of antitrust law, do have the political will and legal angles to press companies to behave themselves, the cases often outlive those who bring them and the historical events in which they were relevant. This has certainly been the case with the Microsoft antitrust settlement of 2002, and it was the case to a certain extent with the IBM antitrust settlement of 1956. This difference--at least all that matters now, except for those who like to argue or study history--is that IBM lost that one and Microsoft appears to have won this one.

The odds are very small that the remaining dissenting attorneys general will appeal Kollar-Kotelly's settlement ruling, and even if they did the odds are smaller still that they would prevail and, more important, get a court in this land to rule on the central issue of this case, which Judge Kollar-Kotelly avoided like anthrax: Did Microsoft illegally tie its browser to its operating system in a way that harmed consumers? If the answer to that question was yes, and a court wanted to set what is obviously a dangerous precedent in the Information Age, we would expect more serious reparations against Microsoft than the settlement that the U.S. government proposed and Microsoft more or less accepted without much quibbling.

The upshot is that Microsoft gets away with using monopoly power to crush a former competitor, Netscape Communications, and thereby alter the course of computing in the mid-1990s and forestall any serious reparations in the early 2000s for its egregious behavior. (In an alternate universe, I might be writing this story from within a Netscape browser equipped with a Java-based word processor that is Word-compatible.)

Microsoft, to be certain, has been warned that it has to behave better, and there is good reason to believe that it will, at least in its dealings with partners and competitors. Users are aloof, and are therefore unpredictable. It is hard to say what, if anything, companies and consumers will do differently.

The sad thing is that there is no way to fix the past wrongs that Microsoft committed. That cannot be done, and that is the limit of time, as well as the ultimate frustration of the law. Some people wanted to see Microsoft broken up as a punishment and as a means of compelling the company to participate outside of its Windows-only world (and I am among those, and so is U.S. Federal District Judge Thomas Penfield Jackson, who originally heard the case). We have to swallow as many sour grapes as the cocky top brass of Microsoft, who have to submit to being regulated by the U.S. government as part of the antitrust settlement. Rest assured, no one is happy with the outcome in this case.

As for the actual settlement ruling, no one has had the time to read and interpret the 344-page document as yet. It is unclear what the remaining states will do, and whether Microsoft will appeal the ruling by Kollar-Kotelly. Microsoft chief executive Steve Ballmer said that his preliminary examination of the ruling did not give him reason to seek an appeal, but that Microsoft was still studying the document.

Microsoft has pending antitrust lawsuits in the United States, brought by AOL Time Warner (which owns Netscape) and Sun Microsystems; a big antitrust case in the European courts (with Sun being the main force behind this one, contending that Microsoft has used its monopoly on the PC desktop to illegally try to create a monopoly in the server market); and numerous other class action lawsuits filed on behalf of consumers. While there are many uncertainties about how this particular settlement will shake out and how it will affect the outcome of pending cases, one thing is certain: Microsoft is going to have many more days in court, and the lawyers and consultants who participate in this case are going to have field days.

All I know is that I remember an upstart Microsoft that I used to root for as vengeance against the hubris and pricing practices of IBM. I can remember IBMer after IBMer telling me that NT was going to be a "toy operating system" and that OS/2 would crush it. They just didn't get it.

And now, a decade and two major IT upheavals later (client/server and the Internet), I find myself rooting for the open source and Linux movements, because I just can't stand the power that Microsoft has. I don't like aggregations of power as large as that which IBM used to have and which Microsoft now has. There is something unnatural about it. Big corporations have more rights than people, and some have more power than governments. The very fact that Microsoft owns the desktop and sets the pace in servers these days gives it more power in the IT industry than I think is wise. But if we believe such settlements as Kollar-Kotelly handed down, it is not against the law. I am cynical enough about antitrust lawsuits and the application of antitrust law that I think it is almost accidental when a trial results in changing the behavior of such behemoths in favor of consumers.

If we want Microsoft to change, we are going to have to make it change. You rule with your dollars, and you make your settlement with Microsoft every quarter, every year. Rule wisely, as if you were a judge yourself, because in truth you are the only judge that counts.

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Why Fast400?

A few years ago Microsoft would not let other software companies build tools to work with the Windows operating system. Microsoft did all kinds of scurrilous things to stop other manufacturers software from working on their platform. They would put code in the base operating system that prevented other companies code from working properly. IBM even had these issues with Operations Navigator. In the early days of Operations Navigator, the developers in Rochester had to scrap early versions because Microsoft did not want IBM leverage on what was proprietary to them. Netscape also had a few problems using the Windows operating system.

The result

Now we all know what happened to Microsoft. After spending tens of millions of our tax dollars in the trial, the US government told Microsoft that they were acting as a monopoly and what they did was not right or fair.

The similarity

IBM is doing exactly the same thing to Fast400 as Microsoft did. IBM has changed the operating system of the iSeries 400 to prevent Fast400 from working. In fact this has been done several times now, and each time the Fast400 developers produce a new fix to circumvent the IBM action. Why does IBM do this? because Fast400 takes money out of IBM's pocket. The potential for IBM to make billions from its user base, for delivering virtually no product is tantamount to corporate deception! Did IBM change the operating system when EMC introduced a low cost storage solution for the iSeries?

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Aldon Computer Group
RJS Software Systems


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But Wait, There's More...

Timothy Prickett Morgan

Managing Editor
Shannon Pastore

Contributing Editors:
Dan Burger
Joe Hertvik
Kevin Vandever
Shannon O'Donnell
Victor Rozek
Hesh Wiener
Alex Woodie

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Last Updated: 11/11/02
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