Because the challenged agreements did not prohibit Netscape?s access to users of web browsing software, Microsoft?s defense team argued that allegations of anti-trust were unfounded. Defense for Microsoft also addressed the point of licensing agreements, stating that they did not have the required anti-competitive effect to meet the criteria established in the Sherman Act. In fact, Microsoft?s actions were no more than an effort to protect their copyrighted works, and that activity did not restrict the opportunities of Microsoft?s competitors.
The thrust of Microsoft?s arguments centered on the perceived failings in the plaintiff?s offerings of proof. Council for the defense argued that the plaintiffs failed to:
· Prove that Microsoft unlawfully attempted to monopolize the market for web browsing software in violation of Section 2 of the Sherman Act
· Prove that Microsoft acted with a Specific Intent to obtain monopoly power
· Prove That There Is a Dangerous Probability That Microsoft Will Achieve Monopoly Power in the Alleged Market for Web Browsing Software
· Prove that Microsoft unlawfully maintained a monopoly in "Intel-Compatible PC Operating Systems" in Violation of Section 2 of the Sherman Act.
· Prove predatory pricing practices
· Establish the requisite causal connection between the allegedly anti-competitive acts and the maintenance of the alleged monopoly
Further, the defense argued that Microsoft didn?t have "Monopoly Power" in a properly defined product market. Those markets deemed relevant were not restricted to Intel-Compatible PC operating systems. The plaintiffs? claim that Microsoft had the power to control prices ort otherwise exclude the competition was refuted. Microsoft had no duty to pre-disclose information about Windows 95 to Netscape before the product was released. So where does this leave the concept of ?Free Enterprise??
In My Opinion
From the perspective of a shareholder, Judge Thomas Penfield Jackson's Finding of Fact in US vs. Microsoft is an unjust assault on achievement and ability. The judge's finding declares Microsoft to be a dangerous monopoly that has used its power unfairly to run competitors out of the market. The logic of this finding is the declaration that extraordinary success in business is dangerous and must be stopped. It is a notice to all the creators and achievers in this country that condemnation and punishment will be the reward for striving to succeed.
The current ruling does not say whether Microsoft broke the law, nor does it say what the company's punishment will be. But it does declare Microsoft to be a danger to the "public good." All that Microsoft has done is to produce and improve its product and
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offer it for sale on the free market, where customers are free to take it or leave it. The idea that this constitutes a dangerous form of coercion is false on its face. But even worse then the idea that Microsoft's action on the free market is dangerous, is the idea that action taken by Judge Jackson's court is beneficial.
It seems that the real threat to consumers, and to the extraordinary growth of the computer industry, isn?t Microsoft?s business practices, but the remedies being sought
against Microsoft. What I find particularly confusing is the statement in Justice Jackson?s Memorandum and Order of June 12th, that ?The Court is convinced for
several reasons that a final ? and appealable ? judgement should be entered quickly.? This statement sends a dual message, that Microsoft is guilty but then again? Judge Jackson's finding of fact should be recognized as punitive and as a vehicle for making Microsoft a target for destructive government actions ranging from court-administered regulation to the forcible dismantling of the company.
So does the Sherman Act, designed for the industrial age, pertain to the techno age? I feel that its application to Microsoft is inappropriate. The factors that made antitrust issues pertinent in the past are fast fading from today?s society. As Robert Bork illustrated in his book, The Antitrust Paradox, leveraging and tie-ins are a non-issue. This is so because of product integration. When purchasing a refrigerator that dispenses ice and water, the icemaker and other mechanism are considered part of the refrigerator. It?s conceivable that a Hotpoint refrigerator may have a more desirable dispenser then a Kenmore refrigerator but the dispensers, while having a separate function, are integrated into the whole product.
The argument that the Microsoft antitrust case is not about 'leveraging' or tie-ins as much as predatory pricing, i.e., that Microsoft is giving its browser away to knock Netscape out of the market doesn?t hold much water either. Economists have shown that predatory pricing doesn't typically make sense, that the losses are often larger to the predator than to the prey. This comes about because once the predator raises prices, anyone who has bought the prey's assets at fire-sale prices becomes a low-cost competitor. With this consideration, it would seem highly unlikely that anyone capable of taking a small start up to a worth of $360 billion dollars would have enough business savvy to recognize the folly of such a practice.
For the sake of good old fashion capitalism I hope there?s a good chance that the appellate court tosses out the breakup remedy. Better still, although less likely but not impossible, would be to see the whole thing overturned. Microsoft intends to challenge the findings of Justice Jackson as ?clearly erroneous.? That may very well be, however,
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the question of relevancy seems the bigger issue. Are the charges valid in today?s business arena? I think not.
What about other laws regulating issues such as ?intellectual property?? Is that which is considered intellectual property today what the originators of such laws envisioned? Surely many of the measures used to determine those types of violations no longer hold true due to technological innovations. Laws were formulated to meet
specific needs but many of those needs no longer exist. Organ transplant, VCRs, and PCs are a few of the products and processes that were inconceivable a century ago when many laws were crafted. It?s my opinion that justice will not be served without a major overhaul of the law and the procedures used to determine violations. The law, in all areas, needs to be reexamined and retooled to fit the world as it is, not as it was.
Notes
Bibliography
1 John E. Adamson, Basic Law and the Legal Environment of Business, ( Toronto: Irwin Publishing) 1990, 67
2 Adamson, 1990, 224
3 Adamson, 1990, 227
4 John R. Allison, Business Law: Text and Case Studies, 5th Edition, (Cameden: Dryden Press) 1991 309-313
6 Steven Levy, ?Was AOL Gunning for Microsoft?? News Week, May 15, 2000
7 Martin Merrimen, ?The Case Against Microsoft? Wall Street Journal, archives, interactive.wsj.com, Copyright ? 2000, Dow Jones Company, Inc.
8 Bill Gates, ?Who Decides What Innovations Go Into Your PC??, April 8, 1998, microsoft.com.corpinfo/11-10BillGOpEd.
9 Bork, Robert, ?Microsoft?s Ambition and Antitrust Policy? Wall Street Journal, May 22, 1999, (New York: Dow Jones Company, Inc.)
10 Allison, 1991, 367
11 Robert A Levy, ?Microsoft Under Attack? Wall Street Journal, archives, interactive.wsj.com, Copyright ? 2000, Dow Jones Company, Inc.
12 Rachel Burnstein, ?Microsoft and the Browser Wars? News Week, June 21, 1999
13 Burnstein, ibid.
14 Robert A Levy, ?Microsoft Under Attack? Wall Street Journal, archives, interactive.wsj.com, Copyright ? 2000, Dow Jones Company, Inc.
15 James Packard Love, ?E-Mail Black Mail?? Wall Street Journal, archives, interactive.wsj.com, Copyright ? 2000, Dow Jones Company, Inc.
16 Daniel Singer, ?Divided Lines: Microsoft?s Allies and Enemies?, Newsweek, December 6, 1999
17 Gates, ibid.
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Notes (Cont.)
18 Gates, ibid.
19 Thomas Penfield Jackson, Memorandum and Order, dcd.uscourts.gov/microsoft-all.html
20 Thomas Penfield Jackson, Memorandum and Order, dcd.uscourts.gov/microsoft-all.html
21 Thomas Penfield Jackson, Final Judgment, dcd.uscourts.gov/microsoft-all.html
Thomas Penfield Jackson, Memorandum and Order, dcd.uscourts.gov/microsoft-all.html
Thomas Penfield Jackson, Memorandum and Order, dcd.uscourts.gov/microsoft-all.html
Thomas Penfield Jackson, Final Judgment, dcd.uscourts.gov/microsoft-all.html
Thomas Penfield Jackson, Conclusions of Law, dcd.uscourts.gov/microsoft-all.html
Thomas Penfield Jackson, Conclusions of Law, dcd.uscourts.gov/microsoft-all.html
Sherman Antitrust Act, usgov.congress/public/
Adamson, 1990, 232
Martin Merrimen, ?The Case Against Microsoft? Wall Street Journal, archives, interactive.wsj.com, Copyright ? 2000, Dow Jones Company, Inc.
Adamson, 1990, 88-92
Thomas Penfield Jackson, Conclusions of Law, dcd.uscourts.gov/microsoft-all.html
Sherman Antitrust Act, usgov.congress/public/
Sherman Antitrust Act, usgov.congress/public/
Thomas Penfield Jackson, Conclusions of Law, dcd.uscourts.gov/microsoft-all.html
Sherman Antitrust Act, usgov.congress/public/
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Notes (Cont.)
Allison, 1991, 368
Thomas Penfield Jackson, Conclusions of Law, dcd.uscourts.gov/microsoft-all.html
Thomas Penfield Jackson, Conclusions of Law, dcd.uscourts.gov/microsoft-all.html
Steven Ballmer, Microsoft Responds, dcd.uscourts.gov/microsoft-all.html
Thomas Penfield Jackson, Memorandum and Order, dcd.uscourts.gov/microsoft-all.html
Bibliography
Books
Adamson, John E., Basic Law and the Legal Environment of Business, (Toronto: Irwin Publishing) 1990
Allison, John R., Business Law: Text and Case Studies, 5th Edition, (Cameden: Dryden Press) 1991
Periodicals
Bork, Robert, ?Microsoft?s Ambition and Antitrust Policy?, Wall Street Journal, May 22, 1999
Burnstein, Rachel, ?Browser Wars?, Newsweek, August 9, 1999
Levy, Steven, ?Was AOL Gunning for Microsoft?? Newsweek, May 15, 2000
Singer, Daniel, ?Divided Lines: Microsoft?s Allies and Enemies?, Newsweek, December 6, 1999
Electronic Resources
Steven Ballmer, Microsoft Responds, dcd.uscourts.gov/microsoft-all.html
Gates, Bill, ?Who Decides What Innovations Go Into Your PC??, April 8, 1998, microsoft.com.corpinfo/11-10BillGOpEd.
Jackson, Thomas Penfield, Conclusions of Law, dcd.uscourts.gov/microsoft-all.html
Jackson, Thomas Penfield, Findings of Fact, dcd.uscourts.gov/microsoft-all.html
Jackson, Thomas Penfield, Memorandum and Order, dcd.uscourts.gov/microsoft-all.html
Love, James Packard, ?E-Mail Black Mail?? Wall Street Journal, interactive.wsj.com, Copyright ? 2000, Dow Jones Company, Inc.
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Bibliography (cont.)
Electronic Resources
Levy, Robert A., ?Microsoft Under Attack?, Wall Street Journal, interactive.wsj.com, Copyright ? 2000, Dow Jones Company, Inc.
Merrimen, Martin, ?The Case Against Microsoft? Wall Street Journal, interactive.wsj.com, Copyright ? 2000, Dow Jones Company, Inc.
Sherman Antitrust Act, usgov.congress/public/