Another Look at the Microsoft Ruling

As the world knows by now, Judge Thomas Penfield Jackson issued a ruling on Monday finding software giant Microsoft guilty of violating antitrust laws. Contrary to the viewpoints of some industry observers, including the one expressed in Monday’s E-Commerce Times, the Microsoft decision is in no way “tragic.”

It is undoubtedly a bitter disappointment to Microsoft, and to those who hold large blocks of the company’s stock. But a temporary dip in prices that affects a relatively small group of wealthy shareholders falls way outside the parameters of tragedy.

Government Should Prosecute, Not Bend

As to the failure of settlement talks in the case — the Justice Department does not bear any responsibility to be “flexible.” The Sherman Antitrust Act resulted from prosecutions going back to the 19th Century, when wealthy, powerful individuals used their money and clout to corner huge markets and the strong arm of the government was necessary to protect competition.

One of the beauties of the Web, as originally conceived, was that it would be so big, and composed of so many small pieces, that it would never be possible for any powerful entity — such as the government, or a huge corporation like Microsoft — to dominate it. This expectation has not been fulfilled.

For example, the ability of Linux to stand against Microsoft is a rare case. Most small entities have few and poor prospects of succeeding against an Internet monopoly. Microsoft has always faced the marketplace in a stance of military conquest — the stakes, of course, are enormous, and the tactics have been extreme.

Beneficial Consequences

Any user who has been infuriated by the shortcomings of Microsoft software — glitches that are not ironed out from one version to the next because the company is more focused on owning the market than on serving customers — is celebrating today’s court decision.

Consumers stand to gain more than better quality software — ultimately, Judge Jackson’s ruling will be a great benefit to e-commerce. The myriad innovators whose technology solutions have been frozen out of the market by Microsoft’s “Big Brother” bludgeon can look forward to something resembling a level playing field.

It is absolutely appropriate that shareholders should foot the bill for the appeal process. They have an immediate option if they want to cut their losses: sell their Microsoft stock. This suit and the Judge’s decision have been a long time coming, and Gates’ intransigent position has been clear from the start.

From the beginning, Gates challenged the government’s right even to look at his company’s business practices. He spurned the recommendations of his own advisors who wanted to settle the case.

For every small Internet business, and all the customers who patronize the big Internet businesses, Judge Jackson’s ruling is a victory. The day that the titan’s grip on the reins of power slackened will be a historic marker in the evolution of the Internet.

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