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Sunday, Nov 8, 2009
Bob Levy, senior fellow, constitutional studies, Cato Insitute
It's a nonevent really. The breakup remedy was not in the cards. The court of appeals indicated that the radically altered scope of liability made a structural remedy unlikely. The DOJ saw the writing on the wall and decided not to waste the time and resources to pursue a lost cause. This should not be read as a concession to Microsoft; it's a concession to reality.
As for the tying claim, it's similar. The court of appeals imposed a much higher burden of proof and as a result the DOJ would have had to take lots of time, energy and resources to show that claim was valid. And once they did that, they wouldn't have seen a major change in the remedies. Because the tying claim is part of the "monopoly maintenance" claim, it's already part of the case, and to pursue a claim specifically for tying would waste a lot of time and not get Justice very much in terms of remedies.
So this is a statement that the DOJ wants to move quickly . They don't want to get bogged down in the breakup, where they'd lose, or in the tying -- which they could win but don't earn much of a benefit for victory. I don't see this as a win or loss for Microsoft; and I think the market is treating Microsoft's stock accordingly. But the $64,000 question that gets ever more interesting remains: What in the hell is the Bush administration doing in pursuing this pathetic lawsuit? It should never have been brought in the first place, and now, it should be dropped. There are no consumers screaming for the kinds of remedies the DOJ wants.
Eugene Crew, lead counsel for plaintiffs in 30 consolidated class actions, who are suing Microsoft for violations of California's antitrust laws
Because the DOJ's announcement affects the remedy part of the case, it doesn't really have any impact on our cases. But I'm personally disappointed -- though not surprised -- that the Justice Department would drop the call for a breakup. That's what the industry needs to restore competition.
I was surprised that they gave up on the tying claim. It would have been easy for the judge to apply the new standard, per the court of appeals request. The judge could have simply seen that Microsoft made the tie, and applying the rule of reason [which holds that tying can't be treated as automatically harmful, but must be judged on whether the tying was "unreasonable"] could have found that it's still illegal. It would have been an easy case, but Justice dropped it because they wanted to move the case along.
So it leaves the question open. We certainly are free to present the evidence and we will present evidence and other evidence to show that the tying was illegal. We'll argue in our case that Microsoft did impose a tie to monopolize the browser market, and we'll argue that it's unlawful. It will be part of our case; we don't have the benefit of federal litigation that might have come from the Justice Department's litigation of this issue. But we've got all the evidence. The conduct of tying was condemned under the decision, so today's move is an apparent victory for Microsoft, but they've been condemned as a monopoly, so what else would we need? It should be pretty easy to litigate the tying issue. We're not letting it drop.
Eben Moglen, Columbia University law professor, counsel to the Free Software Foundation
The government's decision to refrain from wasting resources on turning Microsoft into a duopoly might be a wise one, if it is coupled with a real effort to create competition through the best of all routes: Use free software.
Long before today's decision, Microsoft and many of its sharpest critics were in agreement that the breakup was the wrong solution: They just disagreed on the problem. The United States government proved that Microsoft was maintaining a monopoly by illegal means, harming competition in ways the Sherman Act obliges it to prevent. Breaking up Microsoft into two dominant firms was not the way to increase competition.
In the period since the filing of the government's action, it has become clear that restoring competition to the software industry means supporting Microsoft's only viable competitor, free software. The single most important measure the government can take toward that end is to stop subsidizing Microsoft.
When the U.S. government buys pencils or paper clips, it does so by competitive bids and avoids sole-source contracts. In a sweetheart deal worth billions of dollars to Microsoft, the U.S. government buys the operating system for personal computers by noncompetitive sole-source acquisition, from a company which the government believes, and has proven, is an illegal monopoly. The government should acquire P.C. operating systems by competitive bid: The free software movement can provide better products than Microsoft, and at a somewhat competitive price -- zero.
Mr. Gates has announced that he plans to spend $1 billion promoting his new, slow, bloated, user-disempowering operating system, Windows XP. Every dollar of his promotion expenses will be paid by the government's ill-chosen subsidy to his illegal enterprise.
