If you thought one Microsoft was an antitrust headache and threat to competition in the technology industry, just wait for these two.
As expected, the Justice Department and bevy of state attorneys general asked Judge Thomas Penfield Jackson to split Microsoft (AP via SiliconValley.com) into two pieces, an Windows company and an Office-plus-everything-else company. The proposed remedy to gross abuses will prove, I fear, a classic example of fighting the last war while the enemy looks to the future.
But the remedies affecting Microsoft’s conduct look strong. I don’t see any enforcement mechanism, but the court could take care of that with contempt laws.
There was no hint of compromise, much less defeat, from Ballmer, the company’s president and chief executive, and Chairman Bill Gates on Friday. In denouncing the government’s well-leaked breakup plan, they defiantly continued to insist that Microsoft had done nothing wrong, that it would never be broken up.
They said, in effect, what they’ve been saying all along: The nation’s antitrust laws do not apply to their company’s business.
We’re a long, long way from any breakup, of course. Barring an unprecedented burst of humility at company headquarters in Redmond, Wash., Microsoft will be paying massive legal fees for some time to come as it challenges this and other antitrust lawsuits.
The dividing line between the operating systems company and everything-else company isn’t nearly as neat as the government would like us to believe, however. In fact, it’s probably best to look at this proposal as something of a draft. Even if U.S. District Judge Thomas Penfield Jackson okays a breakup, he won’t do it before Microsoft points out the difficulties in deciding what is part of the operating system and what isn’t.
Microsoft’s insistence that it can make any software a part of Windows, no matter what the intent as long as even one consumer finds it useful, is an arrogant claim. And while some kinds of Internet services do belong in an operating system, an operating system should be modular enough to allow competition for things like displaying Web pages.
Office is a powerhouse, true, and Microsoft has effectively used it to push Windows and vice versa. But monolithic products of this sort have a somewhat limited future. The future is about the Internet, and Microsoft is moving swiftly to co-opt the high ground there, too. Only some of the proposed remedies deal with the company’s plain-as-day aims, to control not just the evolving software industry but the very chokepoints of tomorrow’s communications.
Let’s dispense with one argument now — the incredible bull being slung by Microsoft’s long-suffering PR people, whose basic job over the years has been to say white is black and black is white. Jim Cullinan, Microsoft spokesman, told the Associated Press that the proposed remedies are “like telling McDonald’s that it can only sell burgers, not fries, and that it has to give away the recipe for its secret sauce.”
This is an utter crock, and Cullinan surely knows it. If McDonald’s had a 90 percent market share for fast food, erected enormous barriers to entry and bullied or bought out competitors, the government would be all over such a company — justly so.
Microsoft’s insistence that curbing its bad behavior would curb innovation is also nonsense. And Microsoft knows it.