Microsoft 2, US 1

You have to hand it to the Supremes. Once in a while, they do the right thing, and early yesterday, they denied the Justice Department’s request for an expedited appeal of the Government’s judgement against Microsoft.

For those who may not recall, Judge Thomas Penfield Jackson ruled earlier this year that Microsoft was a monopoly and that it should be broken into two separate companies - one that makes and sells the various Windows operating systems and another focused on various applications that run on top of Windows platforms, such as word processors and the browser.

This latest victory is in addition to the win Microsoft had in 1998 from the United States Court of Appeals for the District of Columbia regarding what the Justice Department felt was a violation of a previous injunction. The three-judge panel ruled back then that the injunction that applied to Windows 95 didn’t apply to Windows 98. However, they ran into a brick wall when Judge Thomas Penfield Jackson ruled against the software giant. Microsoft immediately appealed the case, only to have Justice seek an expedited appeal. Yesterday’s 8-1 decision by the Supremes to deny the expedited appeal was a huge victory for Microsoft, and a well-deserved one at that. With the denial, the case goes to the United States Court of Appeals for the District of Columbia, and that could take six months, and perhaps as long as a year. It could be years before this case reaches a final resolution.

This is good for a number of reasons. First of all, the case against Microsoft is fatally flawed. Bill Gates happens to be a brilliant businessman who has made an operating system so good, it has become the standard for over 90 percent of personal computers worldwide. What created problems for Microsoft was when they created the Internet Explorer Browser (IE) for its Windows operating system and then bundled it with their Windows system. Before IE came along, the only available browser was Netscape, and they had over 80 percent of the market for browsers when IE debuted. Yet when Netscape’s share of the browser started dropping, they turned to the Government for relief from what they saw as a neighborhood bully. It is clear here that Netscape wants it both ways, which it cannot and should not have.

What the bottom line here is, that Netscape doesn’t seem to be able or willing to compete fairly in the marketplace. One of the main advantages of competition is that the consumer almost always gets the best deal possible. Competition brings down the price of the goods and services while raising their quality, and when this happens, everybody wins – unless of course, one of the competitors doesn’t want to stay on top of the ever-changing market forces.

In addition to the Justice Department, the Attorneys General of nineteen states decided to join the folks at Justice in going after Bill Gates and his company. Many of Microsoft’s critics say they were engaging in predatory business practices, and that may be true in some cases as it is with other companies as well. However, one also needs to take into consideration that if there is anyone else who wants to knock Bill Gates and his company off the top of the mountain as it were, it can be done. The advent of the Linux operating system could show promise in making a dent in Microsoft’s dominance.

The thing about the Government’s case against Microsoft that bothers me the most is that they plan to take away from Bill Gates a large portion of the fortune he has spent his life building. In Judge Jackson’s ruling, his proposal was to not only split Microsoft in two, but to forbid Gates from having shares in both companies. He could own shares in one or the other, but not both. Whether you love or hate Gates, you’ll have to agree that no man should have to sacrifice his hard-earned fortune just because some competitors aren’t able to compete in the marketplace.

In an earlier column I wrote on this subject a couple of years ago, I mentioned that Bill Gates has to wonder if there is someone else out there who is even smarter than he is and able to build a better mousetrap than he has. One of these days, someone will come along who is smarter than Gates and who will not only outsmart him, but also outfox him in the marketplace.

There is no need for the government to get involved in the business practices of private companies who are competing in the marketplace. Free enterprise is one of the bedrocks of what has made our capitalist system the envy of most of the world. America has always provided the opportunity for anyone to succeed at whatever they do, provided they are willing to work hard enough and stay with it until their goal is realized. For the Justice Department to go after Microsoft in an effort to make an example out of them is not only wrong, but if successful, will send a chilling signal to the rest of corporate America that they can come after them too.

With the private sector providing the overwhelming majority of jobs in America, that is the last signal they need. This is something the Clinton Justice Department as well as the nineteen State Attorneys General would do well to learn.

You can e-mail your comments to Timothy at trollins@idirect.com.

Copyright © 2000 by Timothy Rollins.
All Rights Reserved.

-Published with permission