The remedy that wasn't such a bitter pill
Published: 24 Mar 2004 16:45 GMT
When the Clinton administration filed its sweeping antitrust suit against Microsoft in early 1998, federal officials pledged that it would reshape the computer industry.
The lawsuit would "put an end to Microsoft's unlawful campaign to eliminate competition, deter innovation and restrict consumer choice," then-Assistant Attorney General Joel Klein promised.
Six years later, however, the lasting impact of the US Department of Justice's action is anything but certain. An ambitious beginning to the lawsuit was sharply limited by a federal appeals court, resulting in a 2002 settlement critics say has done little to change the way Microsoft tosses around the weight of its Windows monopoly. And because the settlement lasts only five years, the limited restrictions it did impose evaporate in 2007.
"Has any part of the settlement loosened Microsoft's grip on their illegally maintained monopoly?" said Robert Lande, a professor at the University of Baltimore who teaches antitrust law. "The answer's 'No. Nothing. Zip. Zero.' If you count success that way, it's been a total failure."
One telling example lies in the now-ancient history of the browser wars. In mid-1998, when the Clinton administration filed its antitrust suit against Microsoft, browser share for Netscape Navigator hovered around a hefty 40 percent of the market, with Internet Explorer about to overtake it. Then-Attorney General Janet Reno said in May 1998 that the antitrust prosecution was necessary, because "no firm should be permitted to use its monopoly power to develop a chokehold on the browser software needed to access the Internet."
Reno never got what she wanted. Although the Justice Department's lawsuit was explicitly designed to give Netscape a leg up on rival Microsoft, that never happened. By January 2004, IE claimed 94.8 percent of the Web browser market, according to research firm OneStat.com, and Netscape's only lasting legacy is the free, open-source Mozilla Web browser.
What's more, Microsoft's legal problems remain as prickly as ever. A federal appeals court in Washington, D.C., is weighing whether to toss out the 2002 settlement with the Justice Department in favour of harsher remedies, sought by the state of Massachusetts, and other state actions are underway in Nebraska, New Mexico, Iowa, Michigan, Vermont, Arizona and New York. Even more threatening is the European Union action, which is just getting started.
Legal experts said European regulators were likely motivated in part by the end of the legal proceedings in the United States, where many of the harsher penalties once envisaged had vanished. "The case didn't accomplish anything, because the Justice Department surrendered after they won the case and had it affirmed on appeal," said Mike Pettit, a Washington, D.C., lobbyist who represents the ProComp, a group of Microsoft rivals that includes Oracle and Sun Microsystems. "They let them off the hook."
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