FC: Newsday oped: Microsoft-It Ain't Over Until It's Over

[Declan McCullagh <declan () well com>]

I have an oped in today's Newsday, attached below. Newsday includes an
editorial on Microsoft today, saying "If antitrust laws are to have real
meaning in the information age, they mustn't allow to continue a monopoly
that so threatens competition and innovation in a key U.S. industry."

-Declan

======

http://www.wired.com/news/politics/0,1283,32387,00.html

                     MS Pals Dis Monopoly Finding 
                     by Declan McCullagh 

                     3:00 a.m. 9.Nov.1999 PST 
                     Microsoft allies inside the Beltway are
                     reeling from a court's 207-page
                     condemnation of the company's
                     controversial business practices. 

                     It's not that US District Court Judge
                     Thomas Penfield Jackson's factual findings
                     were unexpected. Most courtroom
                     observers predicted Jackson would find
                     something to complain about. 

                     But the scope of the preliminary ruling --
                     and the sheer volume of Jackson's
                     anti-Microsoft denunciations -- were
                     shocking, even to nonprofit groups that
                     had been bracing themselves for the
                     worst. 

                     [...]

======

http://newsday.infonautics.com/cgi-bin/display.cgi?id=382858343a6129MshakeP1
1000&doc=frdocument.html&url=http%3a%2f%2fsorbet%3a10001%2fservlet%2fcom.inf
onautics.panama.content.document_repository.RetrieveDocumentForDisplayServle
t%3fpublisherName%3dNewsday%2bInc.%26publicationName%3dNewsday%26providerNam
e%3dNewsday%2bInc.%26publishingDocID%3de-14350521999

Microsoft-It Ain't Over Until It's Over
BY:  By Declan McCullagh.  Declan McCullagh is the chief Washington
correspondent for Wired News.
EDITION: ALL EDITIONS
SECTION: Viewpoints
DATE:  11-09-1999
Page A39

       MICROSOFT FOES toasting the company's thoroughly embarrassing
defeat at the hands of a federal court should pause before breaking out
the bubbly.
     Not only is Judge Thomas Penfield Jackon's 207-page decision only a
preliminary ruling, but the trial is hardly over. Both sides will be
spending the next few months preparing another round of legal briefs,
which are due at the end of January.
     It's pretty clear from Jackson's unrelenting condemnation of
Microsoft what he thinks of the company and chairman Bill Gates. But he
won't reach that final verdict until next spring at the earliest, and
appeals will take years.
     If there's no settlement and the case heads for the Supreme Court,
the odds are good that the justices will be eager to hear the case-and
doubly so if the government loses. You can bet on the high court
deciding no earlier than June, 2003, whether Microsoft really did
violate antitrust laws after all.
     This means that until then, the high-tech business will be riddled
with uncertainty: Should venture capitalists write a check to a company
that wants to compete with Microsoft? Will Microsoft be broken up into a
ragtag assembly of Baby Bills, or will it eke out a slap on the wrist?
Will it be restrained from buying-critics would say gobbling-up new
companies in areas it wants to dominate? One hint as to what the answer
might be lies in a little-noticed court decision last week.
     The lawsuit began in November, 1997, when Intergraph Corp, a
Huntsville, Ala., maker of graphics workstations, sued Intel Corp. for
alleged violations of antitrust law. The suit claims the microprocessor
giant wielded its monopoly to pressure Intergraph into settling a patent
dispute. "Intel abused its monopoly power by engaging in a series of
illegal coercive actions intended to force Intergraph to give Intel
access to the patents," Intergraph claimed.
     The surprise was that the tiny workstation manufacturer won. Its
lawyers managed to convince Judge Edwin Nelson of the federal district
court in Birmingham, Ala., of Intel malfeasance, and he said in an
April, 1998, opinion that the company's technology was, essentially, a
public resource. "The court finds that essential to Intergraph's
competitive survival is for it to have access to Intel's CPUs, Advance
Chips Samples, and advance technical and design assistance and
information," Nelson wrote.
     Intergraph executives couldn't stop grinning. "We believe the court
is sending an unmistakably clear and far-reaching message to Intel that
there's no place for coercive, monopolistic conduct in the computer
industry. These decisions are setting a precedent for the industry," CEO
James Meadlock said at the time.
     Whoops. The celebration turned out to be premature. In a decision
that went largely unnoticed last Friday because of the Microsoft
announcement, a federal appeals court overturned the low- er court's
verdict.
     It lifted the injunction and said that Intergraph probably wouldn't
win its suit in the end. Federal law "does not convert all harsh
commercial actions into antitrust violations," the judges ruled.
"Unilateral conduct that may adversely affect another's business
situation, but is not intended to monopolize that business, does not
violate" the law.
     This time, Intergraph's Meadlock wasn't nearly as brazen. He told
The New York Times last week that he hadn't decided yet whether to
continue pursuing his rejected antitrust claims when the lawsuit comes
to trial next year. Justice Department officials and the state attorneys
general who have been skipping around the talk show circuit with giddy
smiles on their faces should take note.
     A first-round victory some four years before the case likely will
conclude doesn't mean as much as they've been saying publicly-especially
when the appeals courts don't seem to buy the concept of Bill Gates as
robber baron.
     On every important decision so far that Microsoft has appealed, a
three-judge panel has reversed Jackson. In June, 1998, the trio
unceremoniously overturned Jackson's initial ruling against the company
in a related case. "In antitrust law, from which this whole proceeding
springs, the courts have recognized the limits of their institutional
competence, and have on that ground rejected theories of 'technological
tying,'" the court said. In fact, the panel ruled, courts should be
"deferential to entrepreneurs' product-design choices." Translation:
Predictions of Microsoft's imminent demise could easily turn out to be
premature. After all, shares closed yesterday down just 15/8 at 89
15/16.
     The company's adversaries might want to take a hint from Intergraph
vs. Intel and postpone celebrations.

ILLUSTRATION/PHOTO: Photo - Declan McCullagh

KEYWORDS: OPINION




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