Microsoft walked.
That's the unavoidable conclusion to draw from today's announced settlement of the three-year-long legal battle between the antitrust enforcers at the U.S. Department of Justice and the software monopolists in Redmond, Wash.
Despite the federal courts' conclusion that Microsoft has used illegal means to maintain its monopoly on personal computer operating systems; despite all the evidence rolled out through months of trial testimony of the corporation's outrageous anti-competitive practices; despite all the firm's defiant behavior and disregard of the gravity of the judgment against it -- despite every sign that in fact Bill Gates' company has violated the letter and spirit of the antitrust laws, Microsoft is getting away with it.
By backing down from the more complex fight over the details of Microsoft's behavior in the browser war with Netscape -- the whole question of whether the way Microsoft "tied" the browser into the operating system was illegal -- the government let stand Microsoft's effective new monopoly in that market. And just as Microsoft first leveraged the power of its Windows control to seize the browser market, it is now free to use its operating-system and browser dominance to move into new markets.
This is precisely the sort of thing the Sherman Act is intended to prevent. The "new economy" may be a shambles, along with its ideology that the world of technology requires new rules, but Microsoft has succeeded in keeping at least one bit of new-economy rhetoric alive: The old rules, it is proving, just don't apply to its actions.
Oh, sure, the settlement calls for some changes in Microsoft's behavior, many of which had already been conceded by the company. It also mandates the creation of an on-site team of independent software overseers to sit in an office in Redmond and review Microsoft's compliance with the settlement. Don't all line up at once to apply for those jobs!
As numerous experts opined during the course of the trial, this kind of detailed legal oversight of software development is cumbersome, impractical and likely to be ineffectual. Microsoft is not the kind of outfit that will cheerfully cooperate with its new antitrust enforcers. It has been open about its determination to use every tool at its disposal -- legal and technological -- to continue to evade and ignore any rule that it doesn't like.
It's important to remember that this entire lawsuit arose out of the ashes of the failure of a previous consent decree to rein in Microsoft. Applying "behavioral" remedies once more at this late stage is like giving the class bully a mild lecture and then turning him loose in the schoolyard.
Undoubtedly, in the wake of Sept. 11 and with the growing signs that the U.S. economy is in a disastrous tailspin, the Bush administration must have given Attorney General John Ashcroft clear marching orders: Rid us of this troublesome antitrust suit! Who cares about competition -- let Microsoft make its billions and maybe the stock market will be happy again! We've got bigger problems now.
Certainly, on the scale of geopolitics, it's hard to argue that our nation's leaders should worry too hard about Microsoft; when skyscrapers are falling and anthrax is surfacing, struggles over the ground rules of the software industry seem like small potatoes indeed. No doubt, too, the newly conciliatory government negotiators knew that their cave-in would get less attention today than it might have before Sept. 11.
Where this leaves the software industry is, pretty much, exactly where it was when the antitrust suit was filed in 1998 -- except that Microsoft has cemented its control of the browser market; the ranks of its competitors among independent software vendors are depleted; the Internet industry's challenge to Microsoft has collapsed with the popping of its stock bubble; and we stand on the verge of a whole new competitive battle over Internet-based services. Microsoft is now free to fight with its operating system "tied" to its service offerings, and its arms untied by legal restraint.
Maybe resistance is futile. Of course, today's settlement announcement isn't yet a done deal: The state attorneys general who were the Justice Department's allies in the Microsoft case are still reviewing the details and could try to keep the suit alive. An appeals court could review the settlement and decide that, given the trial's findings, it's not sufficiently tough. Microsoft could still pay a stiffer price for its past actions.
But that's not likely. A real judgment on Microsoft will have to wait a few more years. Inevitably, though, just as this antitrust case followed from the failure of a previous consent decree to prevent Microsoft from violating antitrust law, today's settlement will sow the seeds for another round in the courts -- after Microsoft drives yet another round of competitors off the field while thumbing its nose at the law of the land. Tune in, sometime around 2005 or so, for "Microsoft Antitrust -- the Next Generation."
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