DOJ Argues in Favor of MS Settlement

hpa writes: "It is described in this article on CNET the Department of Justice is arguing in favour of the proposed settlement, because the government's case was too weak to impose additional penalties on Microsoft. Somehow this seems like a very odd thing to me, effectively the prosecution is pleading on the part of the defendant..." There's also an AP story.

Re:Couldn't make it stick?

[Anonymous Coward]

If you have enough money the law becomes a whole lot more "flexible." That's the sad reality of all of this..Microsoft has the most money available to them to bribe itself out of ANY situation. The corporation practically has immunity to laws that would rival a UN diplomat, and why? Money. Consider the current government. Microsoft offered a nod to the campaigns with large contributions..this doesn't obligate the administration to work in Microsoft's favour, but the campaign contributions are most likely only a scratch on the surface of the money Microsoft is throwing at the government. Oil companies aren't the only corporations that can operate under the table, so to speak.

Re:It's all up to the states now.

[-=Izzy=-]

Bush was elected and has experienced one of the highest approval ratings ever. They didn't highjack anything, we had an election. If you don't like it, vote for the other guy. If enough other voters agree with you you'll get your way, otherwise welcome to the minority.

Unless of course you live in Florida.

ba da boom.. pissshhhh
sorry..I'll go away now

Re:Pardon my ignorance...

[Prior Restraint]

But how can someone be a monopoly where there are multiple other options? Apple, Linux, etc?

This is a common misconception of anti-trust law (IANAL). Unlike what we were taught by Parker Brothers, a monopoly isn't defined as a 100% market-share. According to the way anti-trust law is applied, a monopoly exists when the average consumer believes there are no viable alternatives. In this particular case, MS has an OS monopoly because the cost of switching is prohibitively high for most end-users. Saying that you can give up most of your existing apps to switch to Linux, or ditch your hardware to switch to Apple is no answer for users.

Re:Sad state of affairs

[rgmoore]

The DOJ is basically giving up because they're tired of trying to fight Microsoft. What sort of precedent does this set for the Standard Oils of the new millenium?

I think that you're reading the causes of this wrong. The DOJ is basically giving up because there's been a change in administration. The Clinton administration, while not exactly tough on monopolies, apparently felt that the case was worth pursuing. The Bush administration, OTOH, seems to view antitrust law as being an obstacle to business and would probably drop the case completely if it wouldn't cause too much political fallout. It was widely argued before the 2000 election that Bush would almost certainly water down the Microsoft case if he won. Now he has won and the case has been greatly watered down. If this is a big surprise to you, you need to pay more attention.

Missing something about monopolies

[Anonymous Coward]

It's not illegal to BE a monopoly, folks, there are lots of those (local utilities, for example). It's illegal to use the monopoly to preserve its status OR to enter new markets by leveraging monopoly status. That's what Microsoft has been found guilty of doing, and why punishment is appropriate. (I use punishment to indicate something more appropriate than the proposed settlement).

Here's hoping that Microsoft rolls 3 doubles in a row - for the Monopoly fans - and ends up in jail!

Re:The tarriff is important...

[TheRealSlimShady]

As far as I know, the New Zealand steel industry is not heavily subsidised by our government. Why should our steel industry be punished because the Americans are so inefficient?

Actually, the metric is...

[mckwant]

the herfindahl index.

[sigma from 1 to n] (% mkt share) ^ 2

So, if we assume that MSoft has 90% mkt share of business desktops, then their index would be upwards of .9^2, or .81, which is very high indeed.

Of course, the lawyers get involved with the definition of "market," as it's in Microsoft's interest to define market as broadly as possible, and it's in the DOJ's interest to be as finite as possible, since the DOJ can then "prove" that MS has a monopoly over the "secretary level OS sales among Fortune 30 companies involved in airplane wheel manufacture." Meanwhile, MS would claim that they only hold 10% of the "business machine requiring an electrical circuit" market.

The DOJ, at least here [usdoj.gov], uses the Herfindahl-Hirschman Index, which is the same thing, only without the decimals. So, while the Herfindahl index goes from 1 (total domination of market) to 0 (atomistic competition), the HHI goes from 10000 to 0. According to the site, anything above 1800 (or, by the other scale, .18) is considered highly concentrated. They're applying it to M&A here, but you get the idea.

Re:Everybody is missing one key point

[enjo13]

IIRC the appeals court did not overturn the IE ruling, they simlpy repealed the punishment back to the lower courts (which is where the DOJ promptly dropped the case).

Re:Everybody is missing one key point

[Yankovic]

For those who care, you should probably mod this person up. If he is who he claims he is, he's Steve McGeady, former VP of Intel who testified during the Anti-trust trial about MS pushing Intel to kill their multimedia product. I'd say he has a very good understanding of the case.

Re:Surprised?

[sleepy-monkey]

Something that I found interesting was that during the presidential campaign a news report (I forget the source) mentioned that Ralph Reed was both a political consultant for George W. Bush and a paid lobbyist of the Microsoft corporation.

A few of years back Ralph Reed headed up a little organization called the Christian Coalition. For those of you unfamiliar with this organization, they are an ultra-conservative Christian lobbyist group.

talk about religously pro-microsoft?

Re:This has little to do with partisan politics

[TandyMasterControl]

I would have liked the first action against MS to have been more effective, however you're overlooking the main reasons it wasn't: the Judge who was supposed to sign the settlement wouldn't and the reason he gave for refusing overreached in some ways, laying himself open to reversal. With the sunsequent appeal forming a significant delay and the growing political turmoil caused by it, (which allowed Microsoft to begin to portray itself as a victim being persecuted for their own success, attracting political sympathizers) MS had opportunity to wreak great deal of further harm.
Remember when that settlement was proposed: 1994.
There was no windows95 yet. Clinton had been President for about one year. Not exactly footdragging on the part of his DOJ.
Some of the complaints heard in the subsequent trial had not even happened yet. For that matter Microsoft was not yet the colossus they are today overshadowing almost every industry.
But more importantly the industry was not yet willing to cross MS and bring specific allegations against them in a courtroom. This is key. You cannot have prosecution of a monopolist without the supporting testimony of its victims. We are all MS' victims, yes, but most of us don't know anything that isn't hearsay. You need the testimony of the ISVs and PC OEMS as well as industry competitors. People have to get up on the stand and say Mr Smith of MS met with with me in my office on June4 1996 and said clearly to me: "You will crosslicense your technology to MS in exchange for knowledge of the blahblah interface or we will see to it that no OEM ever bundles your application and that it will never run correctly on Windows" Things like that. In 1994,the participation of other computer industry companies in the Tunney phase of the initial proposal was limited to an anonymous Amicus brief. It's difficult to convict someone of a crime when the witnesses won't come forward to tell their stories. The Amicus brief preserved the anonymity of the Doe companies and dealt with general problems with the proposed settlement --why its provisions were inadequate to restrain MS and why it was unenforceably ambiguous-- shying away from specifics about MS armtwisting. In 1994 they just weren't yet willing to talk. By 1998, some of them were. In between, the policies of these companies was to avoid any conflict with MS, or in the case of the top tier PC makers, to actually defend MS in public comments by their CEOs, at MS love-ins, Congressional hearings, etc. Also in between 94 and 98 the first settlement was denied, the denial was appealed the settlement was kicked to Judge Jackson for signature, Jackson then tried to oversee implementation of the settlement and eventually found MS in contempt of the terms, then he was reversed by the DC Court of Appeals, and eventually the whole settlement thrown out by them. It may appear to someone without knowledge of the case timeline that nothing much was happening from the time of the initial settlement to the time of the new antitrust action, but that's mainly due the slowness of appeals processes. The settlement hadn't been in place long at all when Judge Jackson found MS in contempt of it for tying IE to Windows98. But you have appeals on either side of that interval. The Clinton DOJ acted early, but in a twist of fate they might have acted with greater result had they waited until after windows95 came out to launch the suit. The climate in the industry changed and they would have gotten much more support from witnesses. But who could have predicted that?
When the DC Appeals Court threw the first settlement out, the Clinton DOJ swiftly began a whole new antitrust action against Microsoft which they prosecuted vigorously I think you will have to admit, winning their case and leaving the successor administration with a very strong hand going into the present rounds of appeal and settlement.

If the new administration chooses to throw that strength away and negotiate a toothless settlement as they announced they would with the tobacco companies, that's hardly the fault of Janet Reno or Bill Clinton. Except of course I forget that it's always Bill Clinton's fault; for he is the Anti-Christ.

If you're looking for a villain for the strange run of good luck that MS had against the government in court during the 90s, you might turn a skeptical eye towards the DC Court of Appeals. They are the hand that has actually set Microsoft free to pillage the world not once but at least 3 times now. And they stand ready to do so again, I'm sure, if MS and the Ashcroft DOJ complain to them that Judge Kollar-Kotelly has demonstrated bias against guilty people.
They vacated Judge J's remedies and thus gave MS yet another chance to settle, this time with a new adminstration which almost certainly never would have brought an action against MS in the first place. ("My administration will always favor innovation over litigation" - G. W. Bush on the day of Judge Jackson's FInding of Fact,speaking to a room of investment bankers. "Micrsoft's monopoly has materially benefitted the consumer" Atty Charles James, Bush DOJ chief of antitrust division speaking on McNeil/Lehrer News Hour.