------- Forwarded Message Follows -------
Date: Sat, 16 Jan 1999 20:31:25 -0500
Reply-to: zimmerer <[EMAIL PROTECTED]>
From: zimmerer <[EMAIL PROTECTED]>
Subject: Microsoft Trial
To: [EMAIL PROTECTED]
An interesting comment on monopoly in practice.
...... RwZ ......
---------- Forwarded Message ----------
Government case vs. Microsoft looks solid Jan. 10, 1999
BY DAN GILLMOR
Mercury News Technology Columnist
EARLY this week, barring the unexpected, the United States, 18 state
governments and the District of Columbia will rest their antitrust case
against Microsoft Corp. The company will then ask U.S. District Judge
Thomas Penfield Jackson to throw out the case. Jackson will say ``no,''
barring the unthinkable, and the company will begin to put on its own
witnesses.
The prosecution's witnesses have held up well under withering, and
often wearisome, cross-examinations by Microsoft's legal pit bulls. But
the glue of the government's case has been in its exhibits. The
strongest have been Microsoft's own words, revealed in internal
documents that shine a light on a remarkable corporate culture.
It's a culture of hard work and superb talent, without a doubt. The
talent shines through in documents that show penetrating strategic
insight and tactical smarts.
You see the hard work when you notice the times on the e-mails, late
into the night and at the crack of dawn. You wonder when they sleep in
Redmond, Wash.
But the culture also radiates contempt. It rejects the norms of behavior
that most of us take for granted. This part of the culture is ugly and
paranoid, like a dictatorship that can survive only as long as it
crushes all dissent. It leads, as the evidence has shown, to predatory
behavior against software companies, bullying of captive
PC-manufacturing customers and even roughhouse antics with its best
partners.
The government's other major weapon has been the series of excerpts from
Bill Gates' pre-trial deposition. His deliberate, brazen obtuseness and
avoidance of the most direct questions are bad enough. But if you've
seen any of the excerpts you've gotten a fine view of the sheer contempt
this man holds for anyone who dares to challenge his right to do
anything he pleases.
Gates and his apologists wail at the supposed unfairness of it all.
They've insisted that the excerpts aren't relevant. Or, Gates' behavior
is typical of people being deposed. Or, playing of the excerpts is a
government plot to poison public opinion.
Microsoft knows better. The judge knows better, too, if his comments are
any guide.
Despite Gates' dizzying attempts in the deposition to seem
unknowledgeable about his own actions and his company's strategies, the
Microsoft chief executive is widely recognized as one of the most
intelligent and hands-on CEOs in the world. In the real world, no
company more purely reflects its chief executive than Microsoft.
The strength of the government's case has been especially surprising
given the refusal of key victims to testify. The PC manufacturers may
loathe Microsoft and its heavy-handed tactics, but they thrive or wither
according to Microsoft's whims. Their cowardice in declining to testify
may be rational. But it is contemptible. The PC makers should pray the
government wins and gets a satisfactory remedy. Otherwise they'll end up
in the worst position of all, and it will serve them right.
Microsoft did score a few points during the government's case. The
company's best moments came when it showed the errors, if not outright
incompetence, of the companies it sought to crush.
At one point, Jackson noted with acid accuracy to a Sun Microsystems Inc.
executive that Microsoft's version of the Java programming language
worked better than Sun's own version in some respects. Sure, Microsoft's
overall aims were to ruin Java's promise as a potential Windows
competitor. But the company could plausibly claim that it was doing
something beneficial for consumers.
While World Wide Web browsing software has been at the heart of the
case, the defense problem is more generic. Microsoft must find a way to
convince Jackson, or the appeals courts, that it isn't a monopoly. This
will be a huge hurdle.
If Microsoft is found to enjoy a monopoly with its Windows operating
system, as I believe the court will rule, the company inevitably will be
found to have used the monopoly in illegal ways. Only one of those will
be the crushing of Netscape Communications Corp.'s Web-browser business.
Contrary to Microsoft's spin, moreover, the buyout of Netscape by
America Online more reflects Netscape's capitulation to monopolistic
tactics than any competitive threat to the Windows hegeomony.
Microsoft says it behaves no differently than others in the technology
business. This may be true, sadly. But a monopoly isn't allowed to
behave the way a non-dominant company behaves. What's legal for a
company on the way up, however unethical or ugly the behavior may be,
often is illegal for a monopolist.
One of the interesting things about Microsoft's list of witnesses is how
few are from outside the company. This reflects more than just the
company's paranoid and insular nature. It also suggests that it couldn't
find very many credible outsiders willing to defend its behavior, at
least not under oath.
I'm told that the government lawyers, particularly antitrust
litigator-extraordinare David Boies, can barely contain their eagerness
to cross-examine Microsoft's executives and other witnesses. Microsoft's
own arrogance led it to establish an incredibly damaging e-mail ``paper
trail,'' and the government lawyers are undoubtedly salivating as they
wait to undermine the company's witnesses with their own words.
However this case turns out, it has already had one valuable effect. The
world is getting a look inside the technology business, and anyone with
a sense of right and wrong has to be appalled.
Even if this trial fails to come up with an ideal judicial remedy for
one company's predatory excesses, it will shine a valuable light on the
problem. Dictators thrive on secrecy, not just raw power, and good
people must learn about the outrages before they can resist.
Microsoft won't be the last monopoly threat we face, just as it wasn't
the first. But this case remains the most important antitrust action in
a generation, because it will help make the rules for competition in the
Information Age. Stay tuned.
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