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Thursday, Nov 26, 2009
What Bill Gates and advocates for each side have to say about the court's decision to approve the Microsoft antitrust deal.
Nov 2, 2002 | U.S. District Court Judge Colleen Kollar-Kotelly Friday released a decision approving, with some modifications, the settlement deal that Microsoft and the Department of Justice reached almost exactly one year ago. The judge also largely rejected the claims of the nine states that had refused to sign on to the settlement and instead pressed for tougher penalties. (The full text of the decisions is available here.)
Here are some quick reactions from participants and observers.
Bill Gates, Microsoft chairman, speaking at a press conference Friday afternoon
We believe that today's ruling largely affirming the settlement we reached with the Department of Justice and the nine states represents a fair resolution of this case. It's a major milestone. We thank the mediator, the federal government and the nine states that helped forge the settlement, and we appreciate the court's extensive work. This settlement puts new responsibilities on Microsoft, and we accept them. We recognize that we will be closely scrutinized by the government and our competitors. We will devote the time, energy and resources needed to meet these new rules. I am personally committed to full compliance.
We have already made many of the necessary changes. We have increased the technical information we make available about our products. We have made it simpler for customer manufacturers to replace Microsoft software with programs of their choice on the Windows desktop. We have made our licenses more uniform. And we have appointed an internal compliance officer. We are also training our employees so that the settlement is understood and followed in every part of our business.
We are committed to being a responsible industry leader. We are dedicated to the core values that built this company from the beginning, helping people and businesses realize their full potential through great software. A lot has changed since this lawsuit began. The Internet is becoming an increasingly vital part of our lives. Economic growth has cooled worldwide, and it has been a time of increased competition and upheaval in the technology industry.
But I also believe it's a time of promise. We have only scratched the surface of what software can do in our homes, our schools and our economy. While putting new responsibilities on Microsoft, this settlement also gives us the freedom to keep on innovating for our customers. The next few years will be an incredibly exciting time for our industry as Microsoft and many other companies work to develop technology for an increasingly digital world. We are pleased with another step in this case behind us. We can focus even more on building the future of technology.
Mark Cooper, director of the Consumer Federation of America
There's not much to read [in the court documents] -- she accepted the settlement, and our concerns about the settlement remains. The chance that independent consumers will find and install different applications is almost zero, because it takes six or seven clicks and Microsoft is the initial default, and you have to click through a series of screens to add other software.
And now everything Microsoft does is with the veneer of approval from the court. In a certain sense a lot of these practices which this settlement will now not discourage are not going to get challenged. If you wanted to counteract the monopoly you needed to have stronger assurances, you needed to change the incentives for the PC manufacturers. They needed to believe and feel that they were not at risk if they went for a skinned-down operating system with lots of customized applications for consumers. That was not conveyed in the settlement.
In the big picture, the porting of [Microsoft Office] to other operating systems is essential, and that's what the non-settling states wanted. The settlement didn't even get at the browser -- forget Office. We think the implementation shows that the environment has not changed so far.
In theory, the non-settling states can appeal. You need to ask them, but I don't suppose that they will appeal, and what they may start doing is looking at the monitoring of this settlement.
Robert Levy, senior fellow in constitutional studies, Cato Institute
From my perspective it's good news diluted only by my adjustment that the case never should have been brought in the first place. Maybe we can put this behind us and Microsoft and the other folks in this business can get on with creating software. That's what people are hoping for.
But there are two very deep problems here. One is that the antitrust laws are regularly co-opted by disgruntled competitors -- folks who find it easier to accomplish through the political process what they haven't in the marketplace. The second is that the states have found it their place to do what is the function of the federal government. They've come up with a separate set of remedies that they believe is a better interpretation of the federal laws than what the agency that is charge with interpreting those laws -- namely the Department of Justice -- believes.
The states stipulated that their claims are "coterminus" with the Department of Justice's and they said that state claims "neither enlarge nor conflict" with federal claims. Yet they feel they are authorized to take this on, and indeed they are. Congress ought to strip the states of their ability to do that. As a legal matter the court did decide that the states had standing here, and I agreed that they did. But the law ought to amended -- well, frankly, it ought to be repealed, but at least it should be amended to strip the states of that ability. Otherwise the states are given two bites of the apple and Microsoft is in double and triple and more jeopardy.
There's no question that these nine states can appeal this to the D.C. Circuit -- that would be the third or fourth pass through the D.C. Circuit. Whether the states do so is anybody's guess. My hope is they recognize that this is a waste of everybody's time and money. Not just the cost of the litigation, but also the effect on innovation. The interesting datum I tell everyone is that Enron had a $60 billion loss at its bankruptcy -- and it's interesting to note that Microsoft stock declined by $80 billion in one day. This has not been cost-free, this silly antitrust suit.
