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Microsoft and DOJ win, 9 States lose.

  11/5/2002 - Tuesday, November 05, 2002 10:02:28 AM MST Albuquerque, Nm
  By Dustin D. Brand; Owner AMO

Its settled, but what did the Judge have to say to AOL and Sun?
  I've been covering this historical case for many years now. I even watched good portions of it live (live audio) on CSPAN. After all, the same lawyer who helped defend Microsoft, David Boies also was selected by Gore and his team help fight for a recount in Florida in the historical US presidential election of 2000.

  This case alone has so many connections, so many similarities, and so much impact...

  Jude Kollar Kottely knew these, as many judges before her. The main difference with Kollar-Kottely was her attention to the facts. I found her ruling and her language to be extremely "on the money".

  I've been saying after all, since this whole ordeal started, that the case against Microsoft was pointless, and nothing more than an attempt to gain market share by the competitiors. These main competitiors, AOL, Sun Microsystems; wanted nothing more than more market share themselves. The judge saw this pathetic attempt.

  AOL, Sun, and many others helped rewrite the historical antitrust settlement Microsoft, 9 States, and the Department of justice reached - which was the purpose of the 9th district circuit of Appeals court to which Kollar-Kottely presided. The "rewritten" and modified settlement, which proposed much stricter requirements of Microsoft was argued and presented to the court by the remaining 9 States and the companies like AOL and Sun.

  Judge Kollar-Kottely saw through the mess which was the rewritten settlement, and instead said the Settlement is "conditionally approved as the final judgment in this case,".

  Judge Kollar-Kottely did make some changes to the DOJ, Microsoft, and the 9 states settlement, requiring Microsoft to release communication protocols which Windows uses 6 months earlier. In addtion, she changed the oversight committee proposed as a technical committee and an Internal Officer, and morphed this into a Compliance Committee made up of Microsoft Board Members. In turn, Microsoft would need to hire the Compliance Officer and he/she would report directly to the Committee and the Microsoft CEO.

  The full case decision is located on the court page: here.

  Judge Kollar-Kottely released her decision on the eve of the one year settlement signed by the 9 States, Microsoft, and the US Department of Justice.

  Illinois, Kentucky, Louisiana, Maryland, Michigan, New York, North Carolina, Ohio and Wisconsin signed onto the settlement. Our state of New Mexico settled directly with Microsoft. California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah and West Virginia, along with the District of Columbia continued the litigation.

  One of the most important statements made by the Judge was the following in response to the states, and their "outspoken" friends, which include AOL, and Sun: "It appears that these types of remedial provisions (proposed by the plaintiffs) seek to convert certain legitimate aspects of Microsoft's business model and/or product design into a model which resembles that of other industry participants simply for the sake of changing the status quo," she wrote. "Certain Microsoft competitors appear to be those who most desire these provisions and, concomitantly, are the likely beneficiaries of those provisions."

  In other words, the Judge said, I see what you are trying to do to Microsoft (AOL, and Sun) and I'm not going to let it happen just so your stock will go up. Or, at least thats what I read.

  She went on to say: "The technology associated with handheld devices has not been shown to have the potential to function in a manner similar to 'middleware," The states were continually attempting to change definitions, or to broaden their scope. One such attempt was the definition of middleware which the unsettled states attempted to broaden to include media playback, web services and interactive TV software.

  One of the most highly felt tensions of the Antitrust case, and its repricutions has to be the fallout of Java. Sun and Microsoft have been in court one on one over Java, essentially being dragged in by Sun for Microsofts direct implementation of Java, the Microsoft Java Virtual Machine, which Microsoft promoted vs Suns own Java VM. In that case, Microsoft decided to comply with Suns wishes, they would not distribute the Microsoft Virtual Machine in Windows XP. Then, Sun cried foul in late 2002 seeing the results of their stupidity, and took Microsoft to court again, seeking with others the "stop of sale" of Windows XP. The end all conclusion to the above Sun/Java ordeal? Millions and Millions and Millions of Windows XP computers do not have Java installed on them. Way to go Sun, real smooth. And to Microsoft, great chess move. You can read the nice, straightforward Microsoft FAQ on the subject.

  Alltogether Judge Kollar-Kottely spent a total of 32 days of hearings on the case this summer. Its unlikely that even if any of the remaining 9 states appeal, that the decision will be overturned, especially by a lower court.


  The history of the current incarnation of the case which just ended  began Oct. 20, 1997 when the DOJ charged Microsoft with violating the earlire antitrust settlement reached in 1995.

  In 1995, Microsoft settled the so called "Browser War" case, in which Netscape and others charged that Microsoft illegally bundled Internet Explorer with Windows 95. Essentially what happened, in the truest form is the following:
  A. Microsoft levereged their distribution to get Internet Explorer 4 out there.
  B. Microsoft destroyed Netscape because Internet Explorer was free, and Netscape cost around $39.95.

  In doing the above, in a few short years Microsoft had all but destroyed Netscape. Today, AOL owns Netscape and doesn't even use it as the default browser for AOL users, which number in the 30+ million. It has been estimated by my company and others that Netscape represents less than 3% of the total Worldwide Web Browser marketshare with Microsoft hovering above 95% for the last few years. In essence Microsoft undercut Netscape, and over distributed them, and that is the main reason the case emerged again in 1997. By 1997, Netscape was close to collapse, and in under a year would be sold to AOL sealing the fate for Netscape.

  That 1997 legal attempt failed, with an appeals court rebuffing the argument that Microsoft violated the original settlement deal. The DOJ and the state attorneys general responded by filing a new lawsuit in May 1998.

  That case was assigned to U.S. District Judge Thomas Penfield Jackson, who eventually ordered that Microsoft be carved into two companies. But after Microsoft appealed, the U.S. Court of Appeals for the D.C. Circuit upbraided Jackson for violating judicial codes of conduct by chatting with reporters, and it removed him from the case.
The appeals court overturned the breakup order, but did agree with Jackson that Microsoft had violated antitrust laws and should be punished.

  One stark reminder those remembering this case in years to come should be that competitive business is competitive business. There are plenty of companies that do far, far, far worse things than those mentioned in this case. We all now know about Enron, and lest we forget MCI Worldcom. The truth of the matter is that the Microsoft antitrust cases really showed a darker side of business. One where the leader can be bullied and must fight back and say "hey, quit hitting me, I'm not doing anything wrong; but you ARE hitting me, and I won't stand for it.".

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