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Kids Are Irrelevant

I suppose people are afraid to question giving money and resources to the schools "for the kids." And don't get me wrong, I'm all for improving education in the United States. In this case, however, the kids simply don't deserve this money. That is because the greatest harm befell the public at large and countless innovative software companies (their creditors, employees, investors, etc.), which were driven out of business, stunted from pursuing markets for fear of oblivion, and/or never materialized because Microsoft's presence and practices were too ominous an obstacle. Those are the people that were primarily smashed and/or pushed around by Microsoft as mentioned throughout its antitrust trial. If any one industry was wronged and deserves recompense, it is the software industry as a whole (excluding Microsoft of course). Yet no one is even considering directing damages to the software industry when it was the clear victim. This is shameful; the kids are not more deserving here. And if you think I'm being a big meany, please refrain from being a big ole hypocrite and don't bitch if (heaven forbid) your home is burned down, and then the arsonist decides it would be better to give money for rebuilding your home "to the kids." Regardless of where the money should ultimately go, it's amazing the choice of where it should go has not been the subject of much, if any, debate or dispute.

Government Bargain

The government, save for a few states, certainly doesn't seem to have questioned anything all that much. The DoJ's perspective seems to be "we've told Bill he's been naughty, and he promised he'd be good." Microsoft has promised to be a good monopoly, however, Microsoft's outright cheap (offering to expend a few million in actual costs while claiming it's worth $1.6 billion while knowing the states are likely to collect over $14+ billion if the case goes through trial is at the very least thrifty) and duplicitous proposed settlement, its structure, and the chosen market should be evidence itself as to how solemnly it regards its obligation to be a good monopoly.

Generally, it is questionable if it is even possible to be a good monopoly. Supposedly a good monopoly is one that doesn't engage in "anticompetitive" practices (IP right holders and their government sanctioned monopolies withstanding, which is a topic for another day). Wolfson, 428 F.Supp. 1321; Intel, 195 F.3d 1346. That seems to imply that Microsoft should then engage in competitive practices. Yet, that's what Microsoft has been doing all along, i.e., competing like crazy, and why it's in trouble now. Or perhaps the government would like Microsoft not to be competitive so that the rest of the industry will be able to compete with an artificially handicapped monopoly? Neither solution seems to result in a truly competitive market. The only solution proposed, so far, that would result in a situation where Microsoft and the rest of the industry could all truly compete is where Microsoft's hold over the industry is broken.

Break-up Complimentary

Microsoft's brilliant business practices have made it a dominant force. Bill Gates and company truly deserve a great deal of praise for demonstrating incredible business and political acumen. I'm not trying to be sarcastic and my praise is genuine when I say that Bill Gates is the best businessman ever to walk the earth. Truly the highest compliment the government and President Bush could pay Mr. Gates would be to regard him as one of the greatest American success stories of all time. Mr. Gates should be in an elite cadre of moguls who won at playing the American dream. Just like J.D. Rockefeller's Standard Oil, Bill Gate's Microsoft needs to be broken up.

Yet the DoJ, after winning the antitrust case against Microsoft, has gone from promoting a break-up as a remedy to shunning it for a settlement with the apparently coincidental arrival of the Bush administration. Why settle a case on poor terms now? To be sure, there are reasons to settle after winning a case, but these usually revolve around the strength and cost of an appeal. The government claims it has a solid case on appeal, and the cost of an appeal is irrelevant (relative to the ramifications of a poor settlement) to both Microsoft and the DoJ. So, once again, why settle a case on such unfavorable terms after winning on the merits!?

You don't have to be much of a conspiracy theorist to surmise that the Bush administration's inexplicably chummy perception of Microsoft has influenced the DoJ's about-face and acceptance of a Microsoft settlement. Certainly, the DoJ seems to have some interesting interpretations of what a just punishment is for a convicted monopoly that has driven away and/or killed off some of the world's most creative competitors by means other than merit.

Leveraging Honor Unwise with Monopolists

The break-up solution at least addresses the unfair leverage Microsoft uses across markets by exploiting its Internet browser (Internet Explorer), operating system (Windows) and application suite (Office) line of products. The proposed settlement of giving money to schools will do nothing to reduce the inter-market leverage that Microsoft enjoys. In fact, giving the schools money for software and training will likely only increase the dependency those schools have on Microsoft's products. Furthermore, the DoJ settlement relies on Microsoft being "good" and somehow tempering its extremely competitive nature. Perhaps the DoJ should spread this new punishment policy to convicted serial murderers and set them free assuring us that they promised to be good in the future. No real argument seems to have been given as to why anyone can expect Microsoft to suddenly become and remain a good monopoly when it has thus far been incapable.

However, history provides an argument to the contrary. Moguls are competitive. Successful companies are competitive. The very nature and manner of competing that was at one time legal, encouraged and the cause of their successes (e.g., lowering prices, building market share, driving lesser competitors out of business) have (in many instances) become illegal practices once they were found to be monopolies. Standard Oil Co. of New Jersey v. U.S., 221 U.S. 1 (1911); Wolfson, 428 F.Supp. 1321; Intel, 195 F.3d 1346. As such, moguls and their successful companies are more likely to continue their practices simply from inertia. Certainly, Microsoft's latest acts seem indicative of anticompetitive recidivism: dropping Java from Windows XP will not help SUN; selling Xboxes at a loss seems to leverage its financial power derived from one market to move into another; disabling non-Microsoft web browsers from accessing MSN demonstrates that even if Microsoft makes its proprietary source code variations to HTML open, it still likely will induce users to stick with Microsoft branded browsers rather than being hassled and jostled from services during the lag time it will take for licensees to implement any new proprietary "features" to obtain parity with the official Microsoft version; and using heavy handed licensing tactics in its Software Assurance Program (SAP--make up your own jokes) has garnered wide criticism for forcing a licensing strategy to make users upgrade more frequently than desired.

If history serves as any lesson, a competitive mogul like Bill Gates will not become less competitive until he's declared an official winner and has no choice but to stop competing. There seems to be only one way to be declared a winner in the U.S. and that's through break-up as enjoyed by J.D. Rockefeller and Standard Oil. Standard Oil, 221 U.S. 1. There is no reason to believe that Bill Gates and Microsoft will stop employing anticompetitive tactics until they are forced to stop competing with the full force of monopoly power. Anything less than a forced break-up will leave Bill Gates and Microsoft with the status of being mere contenders not important, successful, or dangerous enough to warrant a government break-up. It's doubtful Bill Gates could be satisfied with such a runners-up title. Thus, the government should provide Mr. Gates and Microsoft with the closure they deserve and declare them winners officially. In a certain sense, I believe Mr. Gates would be able to enjoy his victory having fought the good fight. If not, he can try to become the first person in the U.S. to have two of his companies broken up by the government.

I will not rehash why Microsoft's proposal for (please place tongue in cheek) "justice" (please release tongue now--thank you) is akin to sentencing a serial murderer to work as an executioner at a prison and trying to pass it off as a "community service." As long as Microsoft is allowed to exist as a monopoly, it will be nearly impossible to punish it in any meaningful way so as to provide disincentive from abusing its power.

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John Kheit is an attorney. Please don't hold that against him. This work does not necessarily reflect the views and/or opinions of The Mac Observer, John's employer, or even John for that matter. This work is for humor purposes only and John may well have been drunk when he wrote it (Happy New Year's!). If this satirical look at the issues somehow sparks a healthy dialogue and debate, it was unforeseen. If the public good will be better served through any increase in such dialogue and debate, no credit is taken. Furthermore, if any resulting dialogue and debate helps those wrestling with such issues (now and in the future) to decide on a course of action that will best serve all parties involved, including the public at large, competitors and Microsoft itself, it was an accident. Thus, no assertions of fact are being made, but rather the reader is simply asked to consider the topic from another whimsical, entertaining and, perhaps, inebriated perspective.