PERHAPS AS EARLY as tomorrow, U.S. District Judge Thomas Penfield Jackson will issue a preliminary ruling in the government's antitrust case against Microsoft. His first task will be to issue findings of fact--a description of what, in his judgment, Microsoft actually did and what sort of market position the company actually controls. The opinion should offer a clear window on how the judge views the case.
Microsoft's supporters and enemies alike have tried to portray the case as straightforward. The company regards it as a simple matter of unwarranted government interference in a vibrant and dynamic software market. The company's many detractors see it in equally stark terms as the case of a predatory company whose lawless and ever-growing control over the software industry threatens the industry's competitive underpinnings. The reality is far more complicated than either side acknowledges. While the government has, in our view, met its burden of showing that the software giant abused its monopoly over personal computer operating systems, this complexity should induce real caution in how the courts try to remedy the violations.
The antitrust laws were envisioned as a vehicle for taking on railroads and other industrial monopolies whose market positions were protected by massive structural barriers to competitors' entering their markets. These laws are, in the first place, a strange fit for an industry so endlessly in flux as the computer industry. While Microsoft's dominance today appears solid, it would take a certain hubris to assume in this industry that today's appearances will translate into tomorrow's realities. Moreover, the government's allegations of harm to consumers seem pretty speculative. It contends that some number of products would have been brought to market but for Microsoft's behavior and that the price of Windows would be lower than it is. These factors argue against taking drastic action against the company.
At the same time, the government's core evidence that Microsoft currently enjoys a monopoly over operating systems is quite strong. And its evidence that Microsoft has attempted to leverage that monopoly into dominance of the market for Internet browsers and other so-called "middle-ware" is even stronger. That some of its tactics crossed the legal lines of what a monopolist is permitted to do also seems clear. Microsoft's attempts to rebut the Justice Department's evidence have been generally underwhelming. The company's behavior should carry some penalty--even in an industry to which the antitrust laws apply so uncomfortably.
The more difficult task will be crafting remedies that will curtail the company's anticompetitive behavior without unduly handicapping it or micromanaging an industry that has thrived--and enormously benefited consumers--in the absence of government intrusion. This would be no mean feat, but even in the absence of obvious remedies, a finding of liability would be enormously valuable--a first step toward laying down the rules of competitive behavior in high-tech markets.