How ‘Crazed Uncle’ Bill brought the Microsoft house down

Auletta's World War Three

Book Club Spare a thought for veteran New Yorker columnist Ken Auletta. He endured the longeurs of the Microsoft antitrust trial for over eighteen months, and although his thoughtful and well-written observations on the case have been sped into print as quickly as the publishing process could allow, much of it feels familiar if not already stale. Since the trial opened, we've had the frothy Hello!-style Plot To Get Bill Gates, John Heilemann's 48,000 word epic in November's Wired, which gave us a lot of new background on how Microsoft's Silicon Valley antagonists poked the government into action, and Vanity Fair's David Boies profile.

But in his World War 3.0: Microsoft and its Enemies, published today (Random House, US; Profile UK) Auletta does nudge a couple of areas into the public record. Which is what interests us, as you'd expect.

Book of Revelations

The sauciest - taking up less than half a page of the book - is the revelation already serialised in The Guardian and summarised here: which is where Sony CEO blows away business protocol and reveals what he really thinks of the beast of Redmond. And it isn't flattering.

Less glamorously, Auletta who had access to the leading players throughout, sheds some light on how close Microsoft came to settling the case, after many months of stroppy intransigence, before Jackson offered his Conclusions of Law. Eighteen drafts of a Posner-mediated draft were circulated between Klein and Gates, with Gates willing to sacrifice some of his most strongly-defended "principles" to avoid a break-up judgement.

In the penultimate fourteen page final draft - Draft 18 - Justice had agreed to two clauses that were incredibly attractive to Microsoft. One, as part of the settlement, the DoJ would vacate Judge Jackson's Findings of Fact - where he established that Microsoft was a monopoly. The other imposed a new consent decree lasting only another five years. Since the IBM trial imposed a much-longer consent decree, and Microsoft had already been deemed to break its existing decree, this looks pretty indulgent. Regardless of what a Bush-led Department of Justice may now do with the case, the Findings of Fact are unlikely to be withdrawn. A judge needs to be found to be either insane or corrupt for this to happen, and although Microsoft may think Penfield Jackson qualifies on both counts, the idea isn't going to find much traction outside Seattle. So leaving the Findings of Fact on the record exposes Microsoft to years of potential private actions, and with AOL's Steve Case explicitly raising the possibility, such actions are likely to find backers with deep pockets.

The agreement included other areas that not surprisingly, Microsoft felt it could live with: ceding some modest editorial control over the boot-up screen to OEMs; a promise not to reliate against OEMs; and instead of the neutrally-run compliance lab, an internal Microsoft antitrust compliance officer. Yes, you read that last bit correctly: and isn't that worthy of a sitcom in its own right? The Compliance Officer...

Perhaps its no wonder that the States attorney generals, who were jointly pursuing the action, felt left in the cold by the mediation process, and torpedoed the settlement. Leaving Posner and Microsoft furious: the former called them "assholes".

Start choppin'
That Gates sobered up with the guillotine finally in view doesn't leave Auletta any less astonished at his earlier behaviour. And its this truculent, adolescent view of government regulation that the author blames for getting Microsoft into such difficulty. As he points out, there was little reason other than Gates' pride to explain why the case reached trial at all. By contrast. Chipzilla had agreed to mend some practices in a detailed agreement with the FTC, which undoubtedly had some compliancy costs: but the costs have surely proved lower than fighting a full-blown antitrust trial, and less damaging than having its executives' emails hung out to dry.

Then, once Microsoft reached the trial, Auletta notes, the company was confident it could fight a case in which the government couldn't find a single OEM to testify, downplayed its stronger pricing cards, and which in its splashier moments relied on circumstantial evidence and "hearsay". But the hearsay triumphed because Microsoft witnesses were not deemed credible. And the most incredible of all, was Gates himself.

Microsoft counsel Neukom now acknowledges Boies brilliance in launching the Gates video deposition on the prosecution's first day, and returning to it, in the manner of drip-torture, whenever he could. Here's an exchange (actually cited by Heilemann, but not Auletta):-

Handing Gates an email he'd written, Boies offhandedly remarked that at the top of the message Gates had typed: Importance: High.
"No," said Gates curtly.
"No?"
"No, I didn't type that."
"Then who did?"
"A computer."

Earlier Gates said he swore that he hadn't been concerned by Netscape - despite so many emails to the contrary. Taking its cure from Gates, Microsoft looked like it was passing the time on the way to the Appeals Court, and bit by bit, made enough holes in its own hull to sink its legal defence.

Intriguingly Auletta finds Boies as disingenuous as Gates in their post-trial interviews:- "...somebody says I don't have good memory about things," Gates tells the author, "That is an unbelievable lie! There is not part of that deposition where in any way, in any time, I show anything but the most excellent memory." Rrright. And Auletta subtly juxtaposes alongside Boies: "This is not a trail about Bill Gates..."

So Auletta leaves the reader to answer the question whether Gates was, as he puts it, "the crazed uncle in the cellar" who refused to take good legal advice, or whether he was knowingly engaging in brinksmanship.

There's are other subtle personality observations that Auletta doesn't scream attention to, but are sweetly ironic. Who, without knowing Neukom, would have expected him to be the very model of an NPR listener? A lover of jazz and Shakespeare, and a pro bono lawyer in liberal left cases, Neukom found himself following a strategy of rigid, uber-rational pedantry that echoed the style of his charmless boss. By contrast the Boies household contains "almost no fiction", Auletta observes, detailing his stash of expensive rare wines with great deliberation. In Vanity Fair's profile, Boies is described as shallow in private as he appears on a first impression. But it was the charming Boies of course, who prevailed, making a more rational case than Neukom.

We could have done with more, much more of this kind of stuff : observations that are usually indulgences for historians, and not for deadline-bound journalists. For example, the Microsoft trial divided libertarian opinion - undoubtedly the dominant ideology of the technology community in the United States - with Scott McNealy (perhaps not surprisingly) joined by Bork and (lately) Starr as opponents of big government, who felt that Microsoft needed to be tamed. By contrast, Reagan-appointee Jackson notes:- "People talk about knee-jerk liberals. Well, there's a faction of the conservative movement in this country that is equally knee-jerk .... [Microsoft] broke the law".

Superbad

Errors and omissions are surprisingly few. Sure there's a mention of HMTL [sic], but WW3 has been well proofed. Auletta only makes one modest misjudgement: while acknowledging the significance of the Symbian memos (released in May, and instrumental in persuading Klein that a structural remedy was unavoidable), the author takes Gates' paranoia at face value:-

"[Nokia's] protocol is proprietary on the server side which is clever... the objects and pages that will be sent to other phones.... If they are going to try and block this then they are sort of declaring war on us ever doing an intelligent phone."

As we pointed out when this memo was disinterred this is a major technical misreading: it isn't how phones work (sure, Nokia keeps its air interfaces proprietary, but not the objects or pages), and isn't how Nokia's business model works either. Judging by your mail, these memos still raise astonishment whenever we link to them, largely because Gates says he sees a monopoly as a means to an end: exploiting a captive market.

But as we like to say round here at The Register: to understand the past, you've first got to understand the future... ®

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