Microsoft Case: Fast Relief Needed
Judge Thomas Penfield Jackson’s strong ruling that Microsoft violated antitrust laws was expected: In anticipation, Microsoft’s stock value dropped by about $79 billion Monday, partly because analysts think Jackson will eventually call for a breakup of the software giant. That’s not a remedy that would give timely relief to consumers.
Breaking up Microsoft into, say, three competing computer operating system companies may seem the most philosophically neat way of ending the anti-competitive behavior. Milder “conduct remedies,” the proponents of breakup argue, would merely put handcuffs on a company that could shake them off like Houdini. However, Microsoft has vowed to fight breakup tooth and nail through legal appeals; splitting the company is not the most pragmatic solution and could well be bureaucratically stifling.
Jackson plans to reconvene the long-running trial soon to hear arguments about appropriate remedies. At those hearings, Jackson and government lawyers should hone effective conduct remedies that could be implemented at least as interim solutions to restore some competition in software designed for Windows.
One key conduct remedy would require Microsoft to make its now-secret “source codes” more available to independent programmers, who could then customize and improve on them. In recent settlement talks, Microsoft agreed to liberalize programmers’ access to the codes. However, the company stopped far short of allowing development of Windows-compatible software by anyone who paid Microsoft for the privilege.
Microsoft’s obsession with secrecy smothers software innovation and is the key problem Jackson will have to root out. In a truly free marketplace, PC makers would be allowed to customize preloaded software as they saw fit, designing desktops to meet their customers’ unique needs.
Jackson’s strong ruling Monday--that the company “placed an oppressive thumb on the scale of competitive fortune”--leaves Microsoft no wiggle room. But breakup is at best a long-term solution; conduct remedies could be in place much sooner. As Sen. Patrick J. Leahy (D-Vt.) said, “This case can linger for many years, and it becomes more a symbolic victory than a tangible victory for consumers the longer it drags on. Time and uncertainty become increasingly corrosive factors the longer Microsoft’s future remains in limbo.”
