FC: CEI on Microsoft decision: States should abandon case

From: Declan McCullagh (declanat_private)
Date: Sat Nov 02 2002 - 09:22:49 PST

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    [Here's a question: What would have happened if Judge CKK or someone of her 
    stature had been assigned the MS antitrust case way back in 1997, instead 
    of the preternaturally biased Judge TPJ? Certainly we wouldn't have had 
    TPJ's anti-MS bias in his opinions and his doomed breakup order, both of 
    which emboldened the DOJ and the states and made a settlement take years 
    longer. --Declan]
    Subject: CEI's Weekly Commentary:  The Microsoft Settlement
    Date: Sat, 2 Nov 2002 11:47:16 -0500
    From: "James V. Delong" <JDeLongat_private>
    To: "James V. Delong" <JDeLongat_private>
    This issue:  The Microsoft Trip:  Are We There Yet?
    This week's c:\spin is by James V. DeLong, Senior Fellow, Project on 
    Technology and Innovation, CEI, November 02, 2002.
    Judge Colleen Kollar-Kotelly is regarded as an intelligent and meticulous 
    legal craftswoman.
    This reputation is confirmed by her 500 pages of opinions in Microsoft, in 
    which she upheld the settlement between the company and the Department of 
    Justice, and imposed only limited additional restrictions in response to 
    the demands of the non-settling states.
    Her conclusions were dominated by a focus on the need for a tight 
    connection between any remedies imposed and the narrow scope of Microsoft s 
    offenses, as defined by the D.C. Circuit last year.  The monopoly at issue 
    encompasses only operating systems for PCs based on Intel chips, not PCs 
    generally, computers at large, or the world.  This monopoly was lawfully 
    attained, and there is no legal basis to break it up.  Microsoft s offenses 
    lay in actions designed to maintain this limited monopoly, particularly in 
    its treatment of middleware, software which, by allowing applications to 
    run on more than one OS, would encourage development of alternative OSs.
    Working within this framework, the judge found that the federal settlement, 
    tailored to force Microsoft to be more accommodating of middleware, easily 
    meets the statutory standard of the public interest.   In the next opinion, 
    the dissenting states got a few additions, but she rejected arguments that 
    the narrow liability finding is a general hunting license to compel drastic 
    alterations to Microsoft products [or] . . . to aspects of its business 
    model which do not involve illegal conduct.
    We at CEI, who think the case was misbegotten and that antitrust 
    enforcement in general has degenerated into a mishmash of abstractions that 
    can be twisted to support any conclusion, remain grumpy.  And Microsoft is 
    now subject to a load of regulations, with a potential for future mischief.
    But this is no criticism of Judge Kollar-Kotelly, who was bound by the 
    prior findings in the case.  She got the big picture absolutely right by 
    emphasizing that this is a legal proceeding, not a legislative hearing, a 
    political campaign, or a witchhunt, and that the remedies must be 
    circumscribed by the proven offenses.  An expansive view that crafting 
    remedies is an exercise in free-form restructuring would have been a 
    disaster, for Microsoft, the tech sector, and the overall state of 
    antitrust law.
    There is no guarantee against further appeals, but the opinion is 
    bulletproof.  The D.C. Circuit will not overturn it.
    But the decree must be implemented, and the requirements are complex, which 
    creates a possibility of continuing guerilla war.  Aware of this, the judge 
    insisted on retaining authority to act on her own motion to enforce the 
    decree, and she warned all sides that she will use it.  For example, she 
    noted that the DOJ/Microsoft settlement adopts a clear and consistent 
    philosophy such that the provisions form a tightly woven fabric.   And she 
    had harsh words for all -- for plaintiffs who tried to leverage a narrow 
    liability finding into a rivals wish-list, and for Microsoft s minimalist 
    view of its own illegal conduct.
    The luck of the lottery of judicial assignments gave us all a winner this 
    time.  Now it is up to the plaintiffs to end the uncertainty and let the 
    entire tech sector get on with its business.
       C:\SPIN is produced by the Competitive Enterprise Institute.
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