ANYONE WHO HAS watched Microsoft Corp.'s anti-competitive behavior in recent years is bound to feel some nervousness about U.S. District Judge Colleen Kollar-Kotelly's endorsement of the Justice Department's antitrust settlement with the software giant. Microsoft has a monopoly in the market for desktop operating systems, and, as demonstrated throughout this case, it has abused its power in that market. The Justice Department took a significant risk in settling the case as it did; the future restraints it has garnered on Microsoft's conduct could well prove inadequate to the task of ensuring a competitive software industry. A few years from now, Judge Kollar-Kotelly's rejection of pleas by state attorneys general to impose further sanctions will look like a foolishly missed opportunity if Microsoft proceeds to gobble up still more nascent markets -- as it did the market for Internet browsers -- that pose challenges to the dominance of Windows.
Our sense, however, is that other courses available to the judge would have been even riskier. In an industry that changes as quickly as this one, a certain humility about predicting the future is in order. And the argument for doing as little as possible while still being effective is strong. Breaking up a company that has been an engine of productivity always seemed rash, and the plaintiffs -- federal and state alike -- in any event abandoned the idea. The remaining question was how aggressive the court-imposed behavioral restraints should be. The agreement worked out between the federal government and the offending company, though belittled by some, may prove to be a meaningful check on Microsoft's excesses.
The landmark decision by the U.S. Court of Appeals for the District of Columbia Circuit, which clarified that many of the company's activities violated the law, should in itself inhibit similar future conduct. The district court retains jurisdiction to monitor compliance with the settlement for five years. Microsoft faces likely action by the European Union. And there are pending suits by major competitors. These factors would encourage reasonable managers to refrain from the kind of ugly predatory activities that Microsoft has indulged in. And if need be, the states and the Justice Department are free to initiate new enforcement actions. Monopolies, particularly those in such critical industries as software, require constant oversight. Microsoft isn't likely to escape such watching over.