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MS-DOJ: Where's the big deal?

Time: 13:00 EST/18:00 GMT | News Source: ZDNet | Posted By: Byron Hinson

Lost in all the headlines about Friday's settlement with federal trustbusters was the fact that there were really two Microsoft antitrust trials. The first trial, conducted in a downtown Washington courtroom, was a veritable star chamber where a parade of Microsoft witnesses were mercilessly tortured by that Torquemada of Torts, David Boies. The peanut gallery watching the proceedings certainly enjoyed the spectacle of heretofore haughty Microsofties getting a public comeuppance. It was high drama, to be sure, and U.S. District Judge Thomas Penfield Jackson gave the "get Microsoft" crowd confidence that a judicial ruling would permanently redraw the constellation of forces in the computer industry.

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#1 By 135 (208.50.201.48) at 11/5/2001 1:05:07 PM

http://www.salon.com/tech/feature/2001/11/02/microsoft_settlement_reacts/index.html

Bob Levy, senior fellow, constitutional studies, Cato Institute

It's good news. Not because I'm happy with the outcome, but rather because the alternative of protracted litigation was just unacceptable. What this all means is that Microsoft's rivals actually failed in their attempt to use government to win through political means what they couldn't win through competitive means.

It also means that consumers are not going to pick up the tab while the most creative executives in the business spend all their time currying favor with the politicians instead of developing new products. And that's good news. What's not so good news is that Microsoft is going to have to make more concessions than are justified by the lawsuit.

In my view, the lawsuit is baseless, therefore there were no concessions that would have been appropriate. And it also means that the company is going to face a lot more litigation not from the Justice Department, assuming the settlement is approved, but from competitors, from trial lawyers who will exploit this opportunity to begin class actions, from the European Union and maybe even from the states -- the attorneys general -- who don't agree to the settlement.

#2 By 135 (208.50.201.48) at 11/5/2001 1:17:15 PM

And later on, another good comment...

Richard McKenzie, author of "Trust on Trial: How the Microsoft Case is Reframing the Rules of Competition"

Reason, not Microsoft's competitors, has prevailed in the case. Of course, the settlement doesn't do everything Microsoft's competitors wanted. They wanted no less than for Microsoft to be hobbled, and unable to compete aggressively. The very fact that the competitors are unhappy with the settlement suggests that the settlement is pro-consumer. Nevertheless, the settlement is in line with the Appeals Court's decision that cited specific instances of Microsoft's abuse of it market position and addresses those specific problems.

#3 By 2332 (129.21.145.80) at 11/5/2001 3:39:14 PM

Ok, people, I've been thinking a lot about this case and the results, and here is what I've come up with.

First, let me start by saying that the Cato institute is about as bias and unfair a place to get information as possible. You might as well ask the GOP who should be President... you would get just about as unbaised (and similar) an answer.

Do they have some good points, sure, but you have to take what they say with a grain of salt. They also think global warming is just a sham made up by Democrats.

Anyway, about the ruling. The way I see it, Microsoft has done some things that are clearly anti-competitive and bad for consumers - although nothing they did can actually be shown to have caused consumer harm. The case had a lot of "IF Microsoft does this, THEN this bad stuff will happen."

That's not to say Microsoft didn't harm competitors... they sure did, and that's their job as a company in good old capitalistic America. So... without further ado (much of this is a rehash from http://www.wininformant.com/Articles/Index.cfm?ArticleID=23112 and http://www.zdnet.com/anchordesk/stories/story/0,10738,2822358,00.html, articles by people I respect and often agree with):

(Continued in next post... )

This post was edited by RMD on Monday, November 05, 2001 at 15:45.

#4 By 2332 (129.21.145.80) at 11/5/2001 3:39:33 PM

1.) "Microsoft cannot retaliate against its own partners--PC makers, in this case--if any of these companies decides to promote, use or sell non-Microsoft software, or sell PCs that dual boot Windows and a competing OS."

-> Goodie! That, I'm sure everybody can agree, is a VERY GOOD THING. It does nobody any good if cool stuff remains hidden and unable to compete because Microsoft won't let it.

2.) "Microsoft must offer all PC makers a uniform price for Windows and not reward non-competitive partners (such as Dell) with better deals while punishing other companies (like IBM) with higher prices, as it has in the past. However, Microsoft is free to offer volume discounts based solely on sales."

-> Goodie, sorta. Companies have never been prohibited from determining their own pricing strategies before, other than in the case of price colusion between industry leaders (a very bad thing for Joe consumer), but then again, Microsoft has shown that this is an effective tool for keeping other companies at bay. I would say this is a OK concession, but not really good on either side.

3.) "PC makers will now be allowed to modify Windows to display icons, Start Menu entries, and other onscreen elements for products that compete with the bundled products Microsoft supplies in Windows."

-> I see this as both a bad and a good thing. There is no reason why a OEM shouldn't be able to customize the *setup* of the OS on their machines, and to respond to their customer demands. I think it's sorta bunk, however, that Microsoft can't insist that certain icons remain where they are, especially when they consider them integral parts of the user experience. There is also a lame clause that says that basically that, so it's OK... but I think that Microsoft could insist that Movie Maker is an integral part of the OS, and thereby prevent it's removal. So, sorta a toss up on this one.

4.) "Sometime in the next year, Microsoft will release new documentation to PC makers and other partners that clearly explains how to better integrate third party products with Windows."

-> This one is just silly. As a programmer, I am already able to integrate my applications into ANY part of the OS fairly easily with various tools like message hooks. In fact, what no article says (but is easily found on MSDN) is the fact that there are no "API's" for integration, per sais, only other "hacks" to integrate. Microsoft has the fourtune of being able to use more integrated "hacks" for their apps like IE. But to suggest they have been "withholding" API's is stupid, because they haven't. There is also the issue that in the future, with easier access to integration stuff, EVIL programs like RealMedia/Audio will completely rape and ravage your system - more than even now.

(Continued in next post...)

This post was edited by RMD on Monday, November 05, 2001 at 15:46.

#5 By 2332 (129.21.145.80) at 11/5/2001 3:39:49 PM

In addition to the issues above, there is the fact that Microsoft isn't actually being punished for what they DID do wrong - only being told what they can't do (or continue to do) in the future. There are two ways to look at this. First, you could say that Microsoft didn't actually do any harm, therefore they shouldn't be punished under anti-trust laws, which are designed to protect and "avenge" harms done to the consumer. On the other hand, you could say that Microsoft used it's power and standing to unfairly gain market share and keep it, and so that companies that were victim to those practices should be compensated via fines levyed against Microsoft.

Personally, I think the later is a buncha baloney. These companies not only can't even begin to estimate (or even guess) the losses caused by MS's artificial dominance.

Overall, I think the ruling proves my point: Republicans tend to do the right thing for the wrong reasons, and Democrats the wrong things for the right reasons. We shouldn't beleive for a SECOND that the DOJ really thinks this ruling is a "home run for consumers," because that's just stupid. They gave in to Microsoft whole heartedly. Of course, the Democratic version (break up MS), was just as silly. I would have been happier if they stuck with the same regulations as listed above, but had them much more strongly worded with less MS leeway.

Of course, this is all imho.

#6 By 135 (208.50.201.48) at 11/5/2001 3:40:58 PM

Poor Disco_Stu... So much hate, and no outlet for it.

#7 By 135 (208.50.201.48) at 11/5/2001 3:51:06 PM

Well, I'm afraid I agree and disagree RMD.

I don't particularly like Microsoft forcing themselves on OEMs. If the customer wants something besides Windows, let them have it. No need for exclusive contracts, etc.

The settlement deals with that issue, as well as some of the other aspects of that "forcing themselves" issue.

But as far as the breakup goes, there was no justification for that. As far as the bundling goes, that was a stupid argument.

Maybe if Microsoft had tied Office to Windows there would have been a case. But IE? I'm sorry, that's just such an integral part of the desktop experience. It's like arguing TCP/IP shouldn't be bundled.

This settlement is fair and we should just move forward. It addresses the problems set forward by the Court of Appeals, and that's what is important.

#8 By 2332 (129.21.145.80) at 11/5/2001 4:20:05 PM

I was in no way suggesting that Microsoft should have been broken up. My point is that this settelment is on the other end of the spectrum from the original ruling, and that's not good for consumers either.

As far as bundling, yes, Microsoft should be able to include anything they want in their OS. As long as it doesn't force the price of Windows up, I'm (and most consumers) are happy.

Hell, if Office was bundled with Windows at no extra charge, I would be *really* happy. :-)

#9 By 116 (129.116.86.41) at 11/5/2001 5:03:28 PM

You heard it here first folks. Office to bundled with Windows 2010 . . .

Now that would really piss everyone off.

#10 By 2332 (129.21.145.80) at 11/6/2001 2:51:28 AM

#15 - wow... I guess your teacher was a Democrat, huh? Being 100% capitalistic is a "lawless dog eat dog society?" Since when?

Also, we are a hybrid of capitalistic and socialistic, not communistic, systems. Communism is a political ideology, socialism and an economic ideology. Let's compare apples with apples.

You mention that capitalism has no welfare or social security... that's no entirely true. You can have 100% capitalism, but also have taxes, and those taxes can go to social welfare programs like those you mentioned. Again, you're comparing apples and oranges.

If your teacher suggests these things, he is obviously trying to pull his ideological wool over your eyes and convince you that pure capitalism is "anti-law" or not good in some way.

I suggest you pick up Friedman to learn about capitalism... but not JUST Friedman, be sure to pick up some more liberal books as well. Try to get a balanced view of things.

Some people (to some point, including me) think this country would be a LOT better off without government intervention in many things, including the markets. For more information on this ideology, check out www.libertarian.org.

The fact is, no single set of ideologies seems to work perfectly. But suggesting that pure capitalism is bad, or lawless, is unfair and incorrect.

You say they only exist in theory? Well, for the first 120+ years of our country, we were 100% pure capitalism my friend. Completely hands off. It wasn't until the rise of big business in the late 1800's that the government started getting involved in the markets.

Your teacher needs to learn some history.

#11 By 135 (209.180.28.6) at 11/6/2001 1:17:09 PM

Definately don't just read Friedman! You also need to read Keynes.

Here, I found an interesting resource that briefly mentions a number of the important authors and their theories:
http://www.bized.ac.uk/virtual/economy/library/economists/

Oh, and yeah... if you want to know what real honest to goodness bloody capitalism was about. Go read a biography of Carnegie, Morgan and other industrialists of the 19th century.

"What do you mean you aren't going to buy my product? Guido... bust his kneecaps."

Microsoft is only an illegal monopoly because we've all gotten soft. :)

#12 By 4240821 (45.149.82.86) at 10/25/2023 6:32:38 PM