FC: CEI on Microsoft decision: States should abandon case

[Declan McCullagh <declan () well com>]

[Here's a question: What would have happened if Judge CKK or someone of her 
stature had been assigned the MS antitrust case way back in 1997, instead 
of the preternaturally biased Judge TPJ? Certainly we wouldn't have had 
TPJ's anti-MS bias in his opinions and his doomed breakup order, both of 
which emboldened the DOJ and the states and made a settlement take years 
longer. --Declan]

---

Subject: CEI's Weekly Commentary:  The Microsoft Settlement
Date: Sat, 2 Nov 2002 11:47:16 -0500
From: "James V. Delong" <JDeLong () cei org>
To: "James V. Delong" <JDeLong () cei org>

CEI C:\SPIN

This issue:  The Microsoft Trip:  Are We There Yet?



This week's c:\spin is by James V. DeLong, Senior Fellow, Project on 
Technology and Innovation, CEI, November 02, 2002.



Judge Colleen Kollar-Kotelly is regarded as an intelligent and meticulous 
legal craftswoman.



This reputation is confirmed by her 500 pages of opinions in Microsoft, in 
which she upheld the settlement between the company and the Department of 
Justice, and imposed only limited additional restrictions in response to 
the demands of the non-settling states.



Her conclusions were dominated by a focus on the need for a tight 
connection between any remedies imposed and the narrow scope of Microsoft s 
offenses, as defined by the D.C. Circuit last year.  The monopoly at issue 
encompasses only operating systems for PCs based on Intel chips, not PCs 
generally, computers at large, or the world.  This monopoly was lawfully 
attained, and there is no legal basis to break it up.  Microsoft s offenses 
lay in actions designed to maintain this limited monopoly, particularly in 
its treatment of middleware, software which, by allowing applications to 
run on more than one OS, would encourage development of alternative OSs.



Working within this framework, the judge found that the federal settlement, 
tailored to force Microsoft to be more accommodating of middleware, easily 
meets the statutory standard of the public interest.   In the next opinion, 
the dissenting states got a few additions, but she rejected arguments that 
the narrow liability finding is a general hunting license to compel drastic 
alterations to Microsoft products [or] . . . to aspects of its business 
model which do not involve illegal conduct.



We at CEI, who think the case was misbegotten and that antitrust 
enforcement in general has degenerated into a mishmash of abstractions that 
can be twisted to support any conclusion, remain grumpy.  And Microsoft is 
now subject to a load of regulations, with a potential for future mischief.



But this is no criticism of Judge Kollar-Kotelly, who was bound by the 
prior findings in the case.  She got the big picture absolutely right by 
emphasizing that this is a legal proceeding, not a legislative hearing, a 
political campaign, or a witchhunt, and that the remedies must be 
circumscribed by the proven offenses.  An expansive view that crafting 
remedies is an exercise in free-form restructuring would have been a 
disaster, for Microsoft, the tech sector, and the overall state of 
antitrust law.



There is no guarantee against further appeals, but the opinion is 
bulletproof.  The D.C. Circuit will not overturn it.

But the decree must be implemented, and the requirements are complex, which 
creates a possibility of continuing guerilla war.  Aware of this, the judge 
insisted on retaining authority to act on her own motion to enforce the 
decree, and she warned all sides that she will use it.  For example, she 
noted that the DOJ/Microsoft settlement adopts a clear and consistent 
philosophy such that the provisions form a tightly woven fabric.   And she 
had harsh words for all -- for plaintiffs who tried to leverage a narrow 
liability finding into a rivals wish-list, and for Microsoft s minimalist 
view of its own illegal conduct.



The luck of the lottery of judicial assignments gave us all a winner this 
time.  Now it is up to the plaintiffs to end the uncertainty and let the 
entire tech sector get on with its business.





  C:\SPIN is produced by the Competitive Enterprise Institute.




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