Microsoft And The Government Fight Like Brats

By Stuart J. Johnston

"Did not!"
"Did too!"
"Did not!"

"Mom, they're doing it again!"

The current tête-à:-tête between the U.S. Department of Justice and Microsoft is beginning to sound like a grudge match between siblings over who stuck his tongue out at the other first. And it may well turn out that this fight will have just about as much impact on the IT industry by the time it all plays out.

First, though, we should clarify a couple of things to dispel some popular misconceptions about what is actually going on. This case is not, as you may have read in the press, a definitive antitrust suit over Microsoft's strategy for global domination. This is basically a dispute over how a contract -- Microsoft's 1995 consent decree -- should be interpreted. That's i t.

The government had an agreement with Microsoft not to do certain, fairly well-defined behaviors, much as a teacher might with an unruly student. Now, the DOJ feels that Microsoft has violated part of that contract and is taking Microsoft to court to comply.

That is, the contract, or consent decree, says that Microsoft agreed not to condition the licensing of one product to a PC vendor on accepting another product, as well. While it seemed clear at the time that the consent decree was first signed in the summer of 1994 that what was being referred to were Windows and Microsoft's Office productivity suite, the DOJ now contends that the forced delivery of Internet Explorer with Windows 95 is covered under that portion of the contract.

Microsoft, of course, disagrees. They say that the fairly shallow level of integration with the operating system that existed in IE up to now--which is, to say, almost nothing in a technical sense--is entirely acceptable under the terms of the agreement. Furthermore, Micr osoft claims that the DOJ was put on notice of that "integration" during the course of negotiations for the consent decree.

That's where the government sharply disagrees. It says Microsoft said nothing of the sort at that time or at any other point, and that it has internal Microsoft documents to show that Microsoft knows it is not being forthright in making those claims. The word "disingenuous" comes to mind.Given the allegations against Microsoft, however, the government probably could have brought an antitrust action under the laws affecting illegal tying.

But the DOJ's lawyers chose not to, evidently figuring that it would be easier to win a claim of contract violation. That also, however, carefully binds the impact of the suit if Microsoft should lose.

A second popular misconception about this case is that the outcome has some bearing on whether Microsoft will be able to get away with incorporating IE directly into the user interface in Windows 98. But the DOJ has assiduously steered clear of that issue in its filings so far.

As a point of fact, the original complaint, filed on Oct. 20, 1997, appears to admit that Microsoft has a right to integrate such features directly into the operating system as long as they are truly integrated. The problem that the DOJ is addressing in its current claim is that versions of IE to date do not meet its definition of "integrated."

Of course, if it chooses to proceed to court, Microsoft could lose. Would that humble Microsoft? You tell me.Was Microsoft any more humble after it lost the patent infringement suit filed against it by Stac Electronics for disk compression in DOS 6.0 in 1994? If you don't recall or weren't watching that case, instead of showing humility, Microsoft quickly changed the compression algorithm it uses in DOS and then Microsoft bought 15% of the company and everybody made nice.

Do you think, if Microsoft proceeded to court and lost this time, it would make the company so much more circumspect and afraid of its shadow that it might become he sitant and move too slowly to respond to rapid market shifts?

That kind of behavior was one of the major criticisms of IBM's behavior in the 1970s and 1980s as it labored under one consent decree and waited for one of the two longest-running antitrust suits in history to come to a conclusion.But I wouldn't get my hopes up. Microsoft would most likely continue forward unbowed. That's just the nature of the beast.

Basically, this case appears to boil down to who the judge, and probably ultimately a jury, believes.

Having looked over both sides' court filings so far, I'd have to say that the outcome looks like a coin toss. If you just look at the government's filings, it looks like Janet Reno's forces have a mighty strong case and that Microsoft is in some deep yogurt.

Until, that is, you read Microsoft's counterfiling. If, as Microsoft claims, the DOJ was fully aware that Microsoft planned to ship IE as part of Windows 95 as early as 1993, then it would appear to be disingenuous of the government to com e back now and claim breach of contract.

After all, WordPad and Solitaire are hardly "integrated" with the operating system, yet Microsoft doesn't give PC vendors the right to remove those from the Windows system they ship on new PCs. Why should this be considered any differently? And why should the government suddenly care when this has been going on for more than two years already?However, in the DOJ's Nov. 20 counterfiling, it claims that Microsoft is only trying to make it seem as if the company had put the government on notice that it intended to bundle IE with Windows 95 back in 1993 and 1994 before Win95 even had an official name. The reality is far different.

Microsoft, the government says, provided investigators with hundreds of thousands of documents and only a half dozen contain anything that could be construed as partial notice that IE would be bundled with Win95. How could that possibly constitute ample notice of intent to bundle IE?

So, it all comes down to who you believe. And perhaps it comes down to who you hate the most. If you don't trust the DOJ to investigate campaign finance abuses or screw-ups in the FBI, do you trust it to be straight on the Microsoft front? Or do you hate Microsoft so much that if Satan himself destroyed Microsoft, you'd applaud?

Actually, short of how users vote with their checkbooks, we don't get to choose which way this case will turn out. That is up to the system now. Judge Thomas Penfield Jackson has a hearing scheduled for Dec. 5. The case will likely take months, and perhaps years, to wend its way through the courts.

In the meantime, it would be a classic legal ploy for Microsoft to let this thing drag out until Windows 98 ships in the first half of 1998 and the merger of the browser and the Windows user interface is a fait accompli, and then quietly settle with the DOJ. Unless the government chooses to challenge the concept of tightly integrating the browser into the user interface, that would make the whole contract dispute moot at the same time that Mi crosoft achieves its objectives.

No matter what happens, there will always be another story to write.

Perhaps the sage was angry at an ancient Chinese reporter when he first uttered the ancient Chinese curse: "May you live in interesting times."

AuthorITies Archive

Send Us Your Feedback

Rich Levin: Run Time Rich fills you in on all of the latest products, issues, and trends in application development.		Stuart J. Johnston: Redmond Watch As our eyes and ears in Redmond, Stuart gives his perspective on the latest events at Microsoft.		Charles Pelton: Eye On IT Charles explores IT management issues and strategies that business and technology managers face.

Top of the Page