Law and order

THE JUDGE IN THE Microsoft case split the baby last week. Judge Colleen Kollar-Kotelly did such an effective job of focusing on the narrow elements of the government’s case that she left little room for further appeals. “We have taken the settlement to a higher and better level,” Connecticut’s Attorney General Richard Blumenthal told the New York Times.

But let’s not kid ourselves: No matter how little Microsoft’s express train has been slowed down, competitors will continue to play the legal card. In particular, Sun’s private civil suit appears enhanced by the closure of the ratified settlement, though Judge Kollar-Kotelly’s opinion seems to shred key forward-looking elements of Sun’s complaint.

The judge wasted no time in setting expectations, observing at the outset that “the ability of the court to render findings of fact, in the ordinary sense, is rather limited.” Building on the appellate court’s rulings — and its citations of pre-existing law — Kollar-Kotelly notes that “drafting an anti-trust decree by necessity ‘involves predictions and assumptions concerning future economic and business events.’ ”

At first glance, this sounds good for the plaintiffs, whose case for restoration of more restrictions on Microsoft business practices builds on the appellate court’s findings of illegal behavior regarding the Netscape Navigator browser and Sun’s Java platform. Microsoft was convicted of using monopoly power to maintain an illegal applications barrier to entry to the Windows platform.

But keep reading: “Whether or not this court accepts a particular factual prediction often rests upon whether the witness has established a sound basis in fact or logic to justify the prediction. Where no such basis has been identified, unless self-evident to the court, the court may accord little weight to the prediction.”

Next stop: new technologies — network and server-based applications, interactive television middleware and set-top boxes, handheld devices, and Web services. “Plaintiffs’ best theory to justify inclusion of the above-described products or devices in an appropriate remedy,” the opinion states, “is to identify them as types of ‘middleware,’ which have the capacity to serve as alternative platforms running on top of the operating system in the same way as Java or Navigator.”

Kollar-Kotelly rewards this “best theory” with one win and three losses. “With limited exceptions, plaintiffs are unsuccessful at pounding these square pegs into the round holes of liability in this case.” Addressing network/server technologies, she says no evidence was presented to support the traditional middleware definition, where the software physically resides on the PC and functions as an application platform.

But she sides with the states on the client/server/network architectural model. “The server operating system parallels and, indeed, resembles the more traditional middleware that was the focus of the liability because it provides a platform for applications,” the opinion grants. And the relief: “The remedy in this case will provide substantial protection for server/network computing by requiring Microsoft to disclose technical information relating to communications protocols which are ‘natively’ supported by Windows.”

But the other three categories meet a fiery death. “The potential ‘threat’ posed by interactive television is almost entirely hypothetical,” one section intones, although provision is made for remedy protection if interactive TV someday runs on Windows.

As for handhelds, Kollar-Kotelly notes that “Palm was intimately involved in the inclusion of such software in plaintiffs’ proposed remedy and stands to benefit competitively … because [it] would afford Palm access to significant information regarding Microsoft’s proprietary technologies and would hinder Microsoft’s ability to compete in a market already dominated by Palm.”

And finally, there’s Web services. “Although plaintiffs assume that Microsoft will engage in anti-competitive conduct in the future in conjunction with its participation in this emerging area of technology, this case cannot be used as a vehicle by which to fight every potential future violation of the anti-trust laws by Microsoft envisioned by Microsoft’s competitors.”

Here comes the judge with some supporting law: ” ‘[A] district court may not enjoin all future illegal conduct of the defendant, or even all future violations of the anti-trust laws, however unrelated to the violation found by the court.’ (Zenith Radio). The Court may only restrain commission of the unlawful acts and other related unlawful acts.”

“Now the gloves are off,” Sun software chief Jonathan Schwartz told the New York Times’ Jon Markoff, adding, “The glass is clearly half full.” In Kollar-Kotelly’s court, it’s just as clearly half empty. She dismissed the states’ bid to require a Sun-compliant JVM with Windows as “the problem of a particular competitor and not competition itself and, therefore, not appropriate for redress under anti-trust law.”

Then she directed court watchers to the Spectrum Sports case for her final answer. “The purpose of the [Sherman] act is not to protect businesses from the working of the market; it is to protect the public from the failure of the market. The law directs itself not against conduct which is competitive, even severely so, but against conduct which unfairly tends to destroy competition itself.”

After 203 pages, the judge wraps it up: “Plaintiffs are correct that Microsoft has a tendency to minimize the effects of its illegal conduct. Yet this minimization, however frustrating, does not require a remedy which prodigiously exceeds even an expansive view of the illegal conduct.”

Perhaps we should put up with some frustration to follow the spirit of the law.