Microsoft antitrust ruling greeted with indifference


4 November 2002 The final ruling in the Microsoft antitrust saga has been greeted with a weary sigh by analysts and industry figures.

Software giant Microsoft escaped a heavy punishment for violating US antitrust law when a federal judge upheld the original settlement the company had reached with the US Department of Justice (DoJ) and nine states in the landmark antitrust trial.

The ruling by US District Judge Colleen Kollar-Kotelly – which contained few additional changes – means that Microsoft will have to change very little about the way it operates.

Microsoft said it has already adhered to the terms of the original settlement.

Analysts and other observers were in little doubt that the ruling represented a major victory for Microsoft. US Attorney General John Ashcroft, who heads the DoJ, called it “a major victory for consumers and businesses”.

Gartner analyst David Smith suggested that it would make little difference to either Microsoft or its customers, while his colleague Thomas Bittman suggested that Microsoft might be encouraged to go on a spending spree now that the threat of tougher action had been lifted.

“If the software giant has held back on acquisitions or investments because of the antitrust case, the spigot will likely now open – it’s a buyer’s market and Microsoft has cash to spend,” said Bittman.

However, the ruling is a crushing defeat for the nine dissident US states that had pushed for a harsher settlement against Microsoft. Lawyers representing the states suggested that their appeal had helped to improve the settlement.

But Kollar-Kotelly poured scorn on many of the remedies they had proposed. She said they amounted to an “unjustified manipulation of the marketplace” designed to give Microsoft’s competitors such as Sun Microsystems an unfair advantage.

Kollar-Kotelly added a few provisions to the November 2001 settlement, including holding a Microsoft board member responsible for compliance with terms of the five year settlement and preventing the company from retaliating against software and hardware vendors that do not comply with Microsoft’s terms for supplying its software.

Not surprisingly Microsoft chairman and co-founder Bill Gates was jubilant. “We have already made many of the necessary changes. We have increased the technical information we make available about our products. We have made it simpler for computer manufacturers to replace Microsoft software with programs of their choice on the Windows desktop,” he said.

Microsoft launched its appeal after US District Judge Thomas Penfold Jackson’s April 2000 ruling that Microsoft had violated antitrust law and that the company should be split in two. The trial had started in 1998.

It centred on Microsoft’s violation of antitrust law during the ‘browser wars’ with Internet browser pioneer Netscape. It was accused of ‘commingling’ Internet browser code with its operating system so that it could not be removed and forcing hardware vendors not to pre-load Netscape with their PCs.

However, the work of Microsoft’s anti-trust lawyers is far from over. The DoJ is looking at new claims of market abuses by Microsoft and the European Union also has yet to deliver its ruling on its own antitrust case.

In addition, the nine dissident states have yet to decide whether to lodge an appeal. But lawyers for the dissident states hinted that they will not. “We’re all, on both sides of this fight, fatigued,” said California attorney general Bill Lockyer.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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