The following are excerpts from a series of rulings yesterday in the Microsoft antitrust case totaling more than 500 pages.
U.S. District Judge Colleen Kollar-Kotelly's decision in the Microsoft antitrust case yesterday offered an epic rendering of both antitrust law and the history of Microsoft's business practices and government attempts to reign them in. In largely accepting the government's proposed settlement with the software giant, the judge repeatedly said she strictly adhered to the appellate court's instructions for addressing the company's improper conduct.
While most of her comments were directed to a very small audience of lawyers and computer-industry executives, Kollar-Kotelly offered some insights and literary illusions to explain her reasoning. At one point, she quoted from William Shakespeare's play "Measure for Measure," saying "it is excellent [t]o have a giant's strength, but it is tyrannous [t]o use it like a giant."
Quoting a 1969 restraint-of-trade case, Kollar-Kotelly explained her goal in addressing Microsoft's conduct:
In crafting a remedy specific to the violations, this Court is empowered to enjoin not only the acts for which the defendant was found liable, but "other related unlawful acts," lest "all of the untraveled roads to [restraint of trade] be left open and only the worn one be closed."
Kollar-Kotelly found that Microsoft achieved its monopoly fairly but went astray when it used that dominance to illegally thwart competitors:
Given these circumstances, as the parties concede, it does not seem to be a valid objective for the remedy in this case to actually "terminate" Microsoft's monopoly. Rather, the proper objective of the remedy in this case is termination of the exclusionary acts and practices related thereto which served to illegally maintain the monopoly.
The judge said she took care to ensure that the remedy did not allow Microsoft's rivals to gain an advantage that was beyond the issues in the case:
It is both understandable and expected that [the opposing states] would turn to industry participants to develop the factual record regarding the impact of Microsoft's illegal conduct upon competition, to identify any new technologies which may be relevant to the issue of remedy, and to explain the relation of such technologies to the monopoly market. . . . Nevertheless, where such testimony reveals a self-interest in a particular remedial provision which is not balanced by a particular benefit to competition as a whole or to other participants in the industry, the Court, of necessity, considers with caution the views of these industry participants. The Court takes careful note of those remedial proposals which advance the interests of particular competitors and takes pains to ensure that the remedy in this case is not a vehicle by which such competitors can advance their own interests.
Kollar-Kotelly said she found little wrong with Microsoft's interest in establishing operating system standards and keeping its source code secret:
The court finds Plaintiffs' focus on Microsoft's alteration of industry standards and reliance upon undisclosed proprietary technologies to be largely misplaced. Plaintiffs' focus ignores the totality of the circumstances, and it ventures into areas of conduct which, at best, are only tangentially related to the conduct for which Microsoft has been found liable.
The judge said she wanted to limit any restrictions on the use of icons, shortcuts or menus on the Windows desktop to those that deal with Microsoft's anti-competitive actions:
The remedy imposed by the Court therefore seeks primarily to address the specific conduct found to be anticompetitive with regard to OEM [originial equipment manufacturer, a term for PC makers] licenses. In order to address Microsoft's illegal prohibitions in OEM licenses, the remedy in this case will afford OEMs the freedom that they have been denied and will protect against any "backdoor" attempt by Microsoft to deny flexibility. The remedy imposed by the Court will secure for OEMs the general ability to install and display icons, shortcuts and menu entries for middleware -- the type of software disfavored by Microsoft's anticompetitive restrictions -- on the Windows desktop or in the Start menu.
Kollar-Kotelly rejected the state's pleas to force Microsoft to change or remove the code of the Windows operating system so that other types of software could be used as operating systems on PCs:
The Court also heard and credits extensive testimony that recounts the manner in which the forced removal of software code from the Windows operating system will disrupt the industry, harming both [independent software vendors] and consumers. In this regard, the Court credits the testimony of various ISVs that the quality of their products would decline if Microsoft were required to remove code from Windows. The Court also credits similar testimony which explained that the software products produced by ISVs would become larger, more complex, and slower to develop. . . . In short, the record is overwhelmed with significant unrebutted evidence that Plaintiffs' proposal of code removal would harm ISVs and consumers.
The judge also spurned the state's request that Microsoft disclose the source code for the Windows operating system, out of concern that such a condition would allow competitors to improperly clone the Windows operating system:
Over-broad disclosure, such as that proposed by Plaintiffs, must also be avoided because it will likely enable wholesale copying or cloning of Windows without violating Microsoft's intellectual property rights. . . . Plaintiffs fail entirely to offer economic evidence to support the enabling of the wholesale cloning of Microsoft's PC operating system or virtually any other Microsoft software product.
In a warning to Microsoft to live up to its promise to change its ways, Kollar-Kotelly quoted Machiavelli:
During this litigation, promises have been made on behalf of Microsoft that the company will change its predatory practices which have been part of its competitive strategy in order to comply with the remedial decree. The Court will hold Microsoft's directors, particularly those who testified before this Court, responsible for implementing each provision of this remedial decree. Let it not be said of Microsoft that "a prince never lacks legitimate reasons to break his promise," for this Court will exercise its full panoply of powers to ensure that the letter and spirit of this remedial decree are carried out.