Microsoft Scores Sweeping Victory In Antitrust Ruling, Business-As-Usual For The Software Giant

by , 5:05 PM EST, November 1st, 2002

In what is already being heralded as a sweeping victory for Microsoft, Judge Colleen Kollar-Kotelly has ruled that most of the provisions in the settlement worked out between the Bush administration's DoJ, 9 of the original suing states, and Microsoft is "in the public interest," and acceptable. Judge Kollar-Kotelly had been presiding over the penalty process of the landmark antitrust lawsuit against Microsoft, as well as requests from 9 dissenting states that said the DoJ settlement didn't go far enough to prevent Microsoft from continuing its predatory monopolistic practices in the future.

Today's ruling from Judge Kollar-Kotelly comes after a lengthy antitrust trial brought against the company by the Clinton administration's DoJ and 19 states and the District of Columbia. That trial resulted in the company being found to hold monopoly power in operating systems, and to have abused that power in the market place by leveraging it to gain dominance in other markets, something expressly prohibited by the Sherman Antitrust Act. Microsoft was ordered to be broken into two companies by presiding judge Thomas Penfield Jackson, but that penalty was overturned by an appeals court. The appellate judges found that Judge Jackson had displayed bias against Microsoft during the trial, and ordered the penalty phase to be retried by a lower court, while upholding the Findings of Fact that Microsoft held monopoly power. It was the decision from that court, Judge Kollar-Kotelly's, that was released today.

The settlement worked out by the Bush Administration's DoJ and the 9 states who went along with it, called for Microsoft to open up some of its APIs to developers, and little else. The 9 dissenting states called for stronger measures to be taken against Microsoft, citing continued abuse of its monopoly power even while the trial was under way. Judge Kollar-Kotelly's decision requires an earlier time table for opening up those APIs, but otherwise rejected the requests from those dissenting states. There is as yet no word on whether the 9 states will appeal the ruling.

Microsoft's stock gained more than US$2 in after hours trading. You can download the ruling from Judge Colleen Kollar-Kotelly from the US Court District of Columbia's Web site, though the court's servers are currently being hammered from worldwide demand. The ruling has also been posted in our forums by members, and there is a discussion on the ruling as well.

The Mac Observer Spin:

This is a miscarriage of justice, and the Bush administration's DoJ has clearly abrogated its responsibility to the American people. Microsoft has continued the very practices that were found to be in violation of the law, yet the DoJ's settlement does not address any of those practices. During and after the trial, Microsoft has held that it did nothing illegal, despite the ruling to the contrary being upheld by the appellate court, and the company has since behaved accordingly. Today's decision gives the company the green light to continue to do so.

In short, though Microsoft has been found to in fact be a predatory, abusive monopoly by a lower court and an appellate court that upheld those findings, none of those abusive practices have been addressed in the settlement OK'd by Judge Colleen Kollar-Kotelly. Opening up some APIs is a red herring at best, as the company is free to continue to leverage its OS monopoly power into new markets by bundling, tieing, and otherwise including software products in its OS offerings to the unfair detriment of its competition.

Windows XP is full of such practices, and only the threat of this judgement, which was still in the hearing process, prevented the company from being even more aggressive. For instance, pre-release versions of Windows XP deliberately and specifically overrode third-party software for ordering digital prints from digital photos, even when that third party software was installed by users. Instead, Microsoft's own ordering system took over attempts to order prints, funneling money into Microsoft's coffers. Threats of a lawsuit from Kodak and other companies caused Microsoft to back down and allow those third party apps to function as they should. In the future, there will be no overhanging threat to keep the company from doing business in that manner, because this trial is essentially dead.

We are embarrassed at this turn of events, both because of the decision handed down today and the behavior of the installed powers-that-be in the White House.