E-fight to the finish

Posted: Tuesday, April 04, 2000

T he following editorial appeared in today's edition of the Akron (Ohio) Beacon Journal:

Judge Thomas Penfield Jackson wasted no time or tolerance in responding to the breakdown of antitrust settlement talks among Microsoft, the Justice Department and 19 states, including Ohio. Jackson, the U.S. District Court judge who heard the case against Microsoft, rendered the expected verdict, in light of his previous findings of fact: Microsoft stifled its competition.

It need not have come to this ruling, which is a beginning of what promises to be a long legal trail that Microsoft chairman Bill Gates pledges to follow to its end, bitter or not.

Jackson appointed Chief Judge Richard A. Posner of the U.S. Court of Appeals in Chicago to mediate a settlement. Since November, Posner, a respected, successful mediator, tried to extract from the government and Microsoft a proposal that would result in competitors of the software Goliath being at less of a disadvantage.

Gates was having none of it, which shouldn't come as a surprise. He backed away from a negotiated settlement before the antitrust case went to trial in 1998. Gates has difficulty seeing Microsoft as the monopoly that Jackson sees. So what if the company controls 90 percent of the market in computer software? Microsoft made PCs into machines that could be operated by consumers, if not always understood by them.

Did that hurt the economy? Didn't the PC revolution facilitate the information age? Who's to argue with that? As it turns out, a number of Microsoft's competitors, beginning with Netscape. The Justice Department and Judge Jackson agreed with them.

Netscape's initial complaints can be illuminating and illustrative of why it would have been better for everyone - even Microsoft - if a settlement could have been reached. The computer industry moves with the speed of new information. Netscape now is aligned with America Online. Emphasis is shifting from PCs to the Internet.

Other devices will provide Internet access. Microsoft's headlock on bundling its Web browser with its Windows software may be loosened by the development of new devices and technology even during appeals Gates believes Microsoft will win.

Victory will have its price. Microsoft's reputation has taken a battering. Monday, so did Microsoft stock and the Nasdaq composite index. Before Jackson's verdict, Microsoft dropped $15.37 and the Nasdaq nearly 349 points, its worst one-day fall ever.

When it could be concentrating on the Internet and creating useful alliances that would further benefit both itself and the consumer, Microsoft now faces the remedies Jackson deems appropriate. They could be as stiff as the breakup of Microsoft. Besides that, the firm already faces private litigation, including class-action suits. Litigants will come armed with the fact that Microsoft violated antitrust laws.

Gates said no settlement could be reached because government attorneys and grandstanding state attorneys general were fighting. The other side said it is Gates who wants to continue the fight. It will, at a cost of energies better spent on the next innovation.

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