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A fair Microsoft solution
© St. Petersburg Times, published June 11, 2000
U.S. District Judge Thomas Penfield Jackson's decision to break apart Microsoft Corp. charts a course that promotes competition in the computer age and does it in a way that promises to end Microsoft's worst violations of law fairly and with a minimum of government interference. Jackson had found in April that Microsoft engaged in vast and ongoing predatory trade practices. On its face, a breakup may seem radical, but the legal principles Jackson applied merely underscore enduring tenets of antitrust law. Monopolies cannot misuse their market strength to limit choice, gouge consumers or punish the competition.
The government argued that only a breakup will change Microsoft's corporate culture and ensure fair competition as the makers of software and providers of telephone and Internet services consolidate to carve huge new markets. The judge's remedy shows the difficulty the courts and government face playing catch-up with technological change. A breakup was prompted because the Justice Department and the courts failed to change Microsoft through lawsuits and mediation.
Microsoft chairman Bill Gates and his lieutenant, Steve Ballmer, insist the company did nothing wrong and predict they will win their appeal. In the meantime, Judge Jackson imposed interim restrictions on the company to protect both consumers and companies that do business with Microsoft.
Under the judge's order, Microsoft would divide into two companies, one for Windows and another for Internet and other software applications. The division is clean and actually positions Microsoft to capitalize on the next generation of software demand, as users look to communicate more easily on the Internet and across applications.
Even divided, Microsoft would still enjoy a huge advantage over competitors. The years it will take to exhaust appeals and receive regulatory approval by government agencies here and overseas could give the Baby Bills enough time to cross-pollinate staff and share creative ideas and technical standards, effectively making the court order moot. Still, the ruling could reshape the market for the better, even if Microsoft gets away with using the dominance of the popular Windows operating system to gain a foothold on the Internet.
With its aggressive prosecution, the Justice Department has sent an encouraging sign of the government's interest in maintaining fair competition even amid rapid change in the global economy. And whatever the outcome, in the market and the courts, Jackson's ruling has affirmed the primacy of consumer rights and the courts' competence to grapple with complex modern economic realities that test the elasticity of antitrust law.
© St. Petersburg Times. All rights reserved.