Microsoft: Judgment Day

Article excerpt

Despite all the palaver, the denouement came quickly. Microsoft's decision to walk away from Judge Richard Posner's mediation efforts and to stake its future on overturning Judge Thomas Penfield Jackson's legal conclusions immediately resulted in the release of a judgment no one is going to overturn. Bill Gates, who as a child probably didn't play well with others, has elected to knock over all the blocks rather than share. Judge Jackson, for his part, has brought the Microsoft Era to a certain and devastating end.

The fate of Microsoft is now sealed. Whatever remedy Judge Jackson may eventually decide to impose, Microsoft will be distracted, eroded and dismembered by the avalanche of private antitrust litigation that Judge Jackson's findings of fact and conclusions of law make possible. The most difficult burden for most antitrust plaintiffs is that of proving that their adversary possesses monopoly power in the relevant market; the second most difficult is that of proving that their adversary's actions constituted an attempt to achieve or maintain that monopoly power by forbidden means. Now any firm that believes that Microsoft has deprived it of fair opportunities to compete in the market for PC software need not prove either of those matters. Jackson's judgment means that the facts he found last November are unassailable by Microsoft in other litigation, the effect of what lawyers call "collateral estoppel." In order to recover antitrust damages, which under the Sherman Antitrust Act are triple their provable monetary losses, firms need only prove that Microsoft's conduct--as a proven monopolist that maintained its monopoly by illegal means--caused them monetary harm. Microsoft faces at least a decade of litigation with all the market participants it has threatened, knee-capped or destroyed. Gates's e-mail, that reservoir of documented commercial knavery unprecedented in the history of American antitrust litigation, will be in constant demand. The litigation will constrain Microsoft, opening opportunities for new competitors to emerge free of the hitherto omnipresent concern with Microsoft's probable response to each and every attempt to create new protocols and possibilities for the Net.

By the evening of April 3, mere hours after release of the judgment, the nature of the Microsoft response was clear. The right of appeal, the company said, would result in Microsoft's exoneration. But that is unlikely--even if the case goes all the way to the Supreme Court. Judge Jackson's legal conclusions are painstakingly related to his factual findings, which no appellate court will disturb unless they are "clearly erroneous," a standard that is unlikely to be met in the mind of even the most skeptical appellate judge. Jackson's application of antitrust doctrine in his opinion, which accepted most but not all of the plaintiffs' legal theories, was deliberately orthodox, not experimental or innovative in any respect. …