Game’s Not Over, Microsoft
Last December, when a federal district court barred Microsoft from requiring computer manufacturers to install its Internet Explorer in PCs running Windows software, speculators said the software giant had been reined in; quickly, its stock price slumped. This week, when a higher court overturned the ruling, speculators said Microsoft had triumphed; its stock price soared before a dip on Thursday. Both of the market’s verdicts were grossly premature.
The real battle won’t be engaged until September, when a trial begins on whether Microsoft violated federal antitrust laws. At that point, the Justice Department will have a chance to display its exhaustively documented case against the company.
Based on narrow procedural grounds, a federal appeals court ruling this week rightly criticized trial judge Thomas Jackson for technical errors. But the September trial will look more broadly at the Justice Department’s strong contention that Microsoft violated antitrust laws against “anti-competitive, monopolistic and exclusionary behavior” in requiring computer makers and Internet service providers to sign licensing contracts limiting their ability to feature competitors’ products, particularly other Web browsers, such as Netscape.
Two of the three appeals court judges digressed from their narrow ruling to make a broader and ill-considered argument that judges should be wary of applying antitrust laws in the Computer Age because of their “limited competence . . . to evaluate high-tech product designs.” The third appeals court judge rightly called that argument “judicial abdication in the face of complexity.”
Microsoft executives like to argue that old rules like antitrust laws simply don’t apply to the high-tech era. But if Jackson and future legal arbiters adopt this opinion, Microsoft will be free to extend its Windows monopoly into new markets. Microsoft executives, for instance, are now arguing that just about all Computer Age “lifestyle” activities, from banking to video conferencing and TV viewing, are becoming inseparable parts of the Windows purview.
Microsoft would like us to see this kind of Microsoft-based lifestyle as a breathlessly exciting new world order. But neither the courts nor consumers should accept this vision whole cloth. Microsoft’s grand vision could be something else altogether: an old-fashioned, anti-competitive, exclusionary monopoly.
