I actually found out about the decision the Sunday after it was released, given that my computers were all wrapped up in rubber shock protectors in preparation for my move from Lausanne, Switzerland to western Ireland (mamas, don't let your babies grow up to be globe-trotting programmers). My father asked what I thought about the recent court decision, and I had no idea what he was talking about.
For those who feared that the antitrust trial was a dangerous attempt by government to reassert control over the marketplace, there was plenty to cheer about. Microsoft's ability to include whatever it wants into Windows is secure, provided they make it possible for certain types of middleware (the sort capable of growing into a platform threat) to be chosen as the default by end users. They can define any protocol they wish, even protocols incompatible with "industry standards," provided that protocols related to interoperability are properly documented and licensed on a non-discriminatory basis (no, you don't get the protocol for free, as this wasn't a structural remedy and Microsoft still has a right to control its own IP). Microsoft can even continue cross-promotions, sprinkling investment and incentive money far and wide like any company in the industry, so long as these promotions don't provide exclusivity to Microsoft technology.
If antitrust serves any purpose, it is to curb market power, not dismantle companies particularly successful at convincing customers to choose to buy its products. As even a casual reading of the ruling shows, the case was about market power, not Microsoft's legally acquired and consumer driven dominance of the desktop operating system industry which was the root cause of that power. The ruling was an affirmation of the wisdom of markets, and though it still claims that government needs to trim market power, the strident recognition of the strength of markets will serve as a curb on the more aggressive barbers among state Attorneys-General and the DOJ. Courts will not undertake the design of software, as Judge Kollar-Kotelly states on page 168 of the ruling:
"Even in an antitrust trial, there is little justification, and even less desire to extend this Court's judgement to issues of product design."
For those who secretly (or not not-so-secretly) wished Microsoft had been broken into a thousand little pieces or lost control of the design of its own products, the decision was cause for much consternation. Judge Kollar-Kotelly made it clear that she considered many of the Plaintiff's proposals as unjustified attempts "to convert certain legitimate aspects of Microsoft's business model and/or product design into a model which resembles that of other industry participants simple for the sake of changing the status quo (page 200)." Given the "appeals proof" nature of Judge Kollar-Kotelly's decision, the likelihood of overturning the decision seems remote. Instead, those dissatisfied are left searching for meaning in a trial that lasted four and a half years and cost many millions of dollars. If the trial didn't accomplish what they wanted, then what did it accomplish?
The Search for Meaning
One canard offered by the Economist, of all places, is predicated on the assumption that the bright light shined on Microsoft's "unsound business practices" has frightened away partners from their products, something of presumed benefit to competition. Ignoring for the moment the 30 licensees signing on to the next release of Pocket PC (the Economist dismissed all handhelds as a "niche" market; guess someone forgot to tell Michael Dell), they note that every mobile phone provider in existence rejected Microsoft's overtures with respect to their Smartphone platform (code named "Stinger"). Without the antitrust trial, subliminal man states, Nokia, Ericsson and Matsushita would be hopping around in blue and white bunny suits emblazoned with the Windows logo.
That seems a bit of a stretch. The Economist rightly noted that many in the industry fear being "reduced to mere box-shifters," a point I made in a past article. How many regular consumers, however, lament a low-cost PC market built on the economics of scale of a market unified around Windows? Yes, PC vendors are box-shifters, but you can buy a blazingly fast PC for under US$600. Contrast that to the market for mobile phones, which are often eye-poppingly expensive for a device that fits in the palm of your hand, and needs to be upgraded every year to take advantage of new network features.
I would suggest that Nokia, Ericsson and the lot would be reluctant to jump on the Microsoft Smartphone platform with or without the antitrust trial. These are pre-existing industry leaders with business models built upon the sale of strongly branded, high-priced wireless devices. That is in contrast to the PC industry, which grew up around Microsoft OSes and from the start were oriented around finding ways to cut costs in a market "commoditised" by the unifying Microsoft OS standard. Nokia and Ericsson would favor something they control (like Symbian) to protect their power in the industry, not out of fear of Microsoft's aggressive business practices which we are supposed to believe would have been missed save for the antitrust trial).
Along similar lines, the dissatisfied cite the presumed explosion of innovation made possible by a monopolist's distraction by an antitrust trial. The theory starts with the claim that IBM lost its dominance of the industry because it was "distracted" by a 13 year long antitrust trial (one that failed to convict IBM on even one count) to such an extent that they failed to understand that software would be the gravitational center of the PC industry. This, of course, ignores that IBM had ALWAYS made its money from hardware, and thus was likely to assume that that model would continue into the future.
Fast forward to the Microsoft antitrust trial, during which time we've seen an explosion in the popularity of open source software, in particular Linux. What we are supposed to assume is that Linux would not have been a viable alternative if Microsoft was not "distracted" by the antitrust trial. In other words, companies would ignore free software that is completely open and extensible due to source code access if Microsoft was free to, presumably, raise prices, ignore bugs and generally treat its customers shabbily.
This is patently ridiculous. I'm willing to accept that Microsoft's more aggressive tendencies were curbed to a certain extent by the antitrust trial. However, the merits of Linux would be even more compelling if Microsoft took its market for granted. As the Economist likes to note in every instance save for its opinion of the Microsoft antitrust case, consumers are rational entities capable of making efficient choices. Those consumers WILL punish a company that treats them badly, particularly when tempted by free, open source software.
Similarly, the Economist goes on to claim that innovation in the mobile phone market dwarfs innovation in the PC market. This they cite as evidence of the "dampening" effect of Microsoft's monopoly on innovation. They note that few use five-year-old mobile phones or handhelds, in contrast to the PC industry, where 5 year old PCs are still useful (where would Linux be without five year old PCs?).
First, it seems odd to promote the mobile phone upgrade treadmill, with all of its high cost, as evidence of the vibrant potential of a market free of Microsoft. The "genius," if you will, of Microsoft has been to find more ways to do the types of things you want to do in software. You can't upgrade most mobile phones to support WAP, much less MMS, forcing you to buy a whole new phone if you want to use these features. In contrast, one of the interesting things about Pocket PC devices is that you can keep the same device and simply upgrade the software to support many new features. The same applies to the presumably "constrained" PC market.
Furthermore, few mobile phones have "pluggable" architectures which would even make it possible to keep the same mobile phone for five years. It would be nice if I could pop a camera flash card into my mobile phone or plug it in to my digital camera via a USB cable if I wanted to take pictures (something you might do with an MMS phone), rather than being forced to run out and buy a new phone capable of taking pictures.
Second, the claim that PCs lack innovation is particularly ridiculous, at least to anyone who hasn't slept through the last ten years. The PC world is literally exploding with innovation, from peer-to-peer software, Instant Messaging and new ways to use internet standards on the desktop (HTML, XML, HTTP through web services) to video editing (built on CD-RW and now DVD-RW), PC as video recorder, etc. In the mobile phone world, we have WAP (oh boy) and MMS (the ability to send pictures to your friends via your phone, as promoted by that Nokia ad showing three fat guys with "Happy Birthday" written on their bellies). SMS is certainly a useful tool (at least in Europe), but I would hesitate to cite it as an example of vibrant innovation in the mobile phone industry so much as a happy accident the revenue from which drove new and unusual uses of something as simple as SMS. Broadband wireless is still a no-show in Europe and America. Likewise, as I've already noted, mobile phones are still hideously expensive. This is hardly the stuff of vibrant innovation free of Microsoft's supposed dampening effect.
Conclusion
Even opponents of the settlement seem to agree that the antitrust trial has forced Microsoft to temper its more aggressive tendencies. What is less clear, at least to my mind, is how a less aggressive Microsoft is supposed to make customers less likely to buy Microsoft products. Perhaps the antitrust trial's primary accomplishment was to force Microsoft to do what they should have done, anyway, which is be more open about its technology, kinder to partners, and less the aggressive startup it still appears to consider itself. These things are all good for consumers, but don't make life any easier for Microsoft's competitors. They can't point to Microsoft's ongoing aggressive tendencies as reason to shift from Microsoft.
Perverse as it may sound, the antitrust trial might have created a Microsoft more appealing to customers in the long term. Seems a strange way to spend tens of millions of our tax dollars.
John Carroll is a software engineer living in Ireland. He specialises in the design and development of distributed systems using Java and .Net. He is also the founder of Turtleneck Software.
