Microsoft Gets Bundled
A court ruling last Friday will likely mark the end of four years of government litigation against Microsoft Corp., leaving the company intact and enjoying the highest stock-market value in the world.
And yet, the federal court ruling also means the software giant has been tagged as an anticompetitive monopoly in computer operating system and that it will need court regulation for several years to come.
Microsoft's take-no-prisoners tactics against competitors have been blunted but not broken by the litigation. Still, consumers will no doubt benefit by the many changes a humbled Microsoft has already been forced to make and will be forced to make in its business behavior.
The ruling by US District Judge Colleen Kollar-Kotelly turned down a request from nine states to overturn a settlement reached between the Bush Justice Department and Microsoft. In the end, the judge decided that the courts can only correct Microsoft for its past wrongs rather than try to anticipate how the company might use its market dominance again in anticompetitive ways to win market share in new fields.
That prudence reflects the difficulty of applying antitrust law in the fast-paced technology business, and the difficulties that many judges have in fully grasping the industry.
Microsoft's aggressive legal tactics helped it win on many points, especially an earlier court ruling that would have split up the company. It also learned to throw big money into political campaigns, which may have gained it some favor at the Justice Department in reaching a settlement. After it faced government litigation in the mid-1990s, Microsoft quickly became the second-largest corporate campaign donor, giving millions to both parties.
The judge's ruling sets up a compliance committee on Microsoft's board to make sure her requirements are carried out. A key stipulation is that the company let competing software have equal standing on the interface of Microsoft's Windows program. And the ruling also prohibits Microsoft from punishing, or even threatening to punish, PC makers if they use another operating system.
By leveling the playing field even slightly, and putting Microsoft on notice that its actions will be watched closely, the worst of its anticompetitive behavior may be at an end.
But that doesn't end its dominance in many software fields, something that may actually stifle innovation rather than promote it. That problem is best left to the market and inventors, not judges.