MS and DoJ: hap-hap-happy as pigs in filth

Somebody's lying

If you tend to believe what you hear at press conferences, then you'll have a particularly tough time reconciling the US Department of Justice's satisfaction in the appeals court antitrust ruling alongside Microsoft's equal satisfaction in the same document. Such was the challenge for reporters Thursday: to hear the two contestants tell it, they'd both won (as the NBC Nightly News attributed to Microsoft alone) a "stunning victory".

If it quacks like a monopoly

First up, the DoJ press conference in Washington. US Attorney General John Ashcroft called it a "significant victory" that the court should have "unanimously found that Microsoft engaged in unlawful conduct to maintain its dominate position in the computer operating systems."

Ashcroft was short on detail, but he looked calm and firm, and not at all like a man embarrassed to read from his script.

Assistant Attorney General for the Antitrust Division Charles James stepped up to the plate briefly and emphasized again that that "Microsoft has monopoly power and has acted unlawfully to preserve it."

If there was a "stunning victory" for Microsoft Thursday, the DoJ certainly hadn't heard of it. Ashcroft stayed on message, and the theme remained very clear: federal laws have been broken.

"My own view is that this is a victory for the Department, and so the Department is not, I believe, in a weakened position here," Ashcroft said off script. "The court did find that Microsoft had engaged in unlawful conduct to maintain its dominant position in the computer operating system arena."

Much fruitless speculation on Wall Street and in the mainstream press has centered on the presumption that the current DoJ will be compliant towards big business because Ashcroft is a Republican, and because Dubya is compliant towards big business.

But we've followed John Ashcroft on the Hill during the 106th Congress and briefly in his new role as Attorney General, and we're here to tell you that this man calls them like he sees them, and acts accordingly without apology. If he truly believes that MS deserves a cushy settlement, then they'll get it. But if he believes the company needs stronger medicine, he'll administer it without hesitation.

Microsoft's fate basically rests in Ashcroft's hands. And for now, he's not saying which way he's leaning.

Let the sun shine

To Bill Gates, the same court ruling signaled Morning in Redmond with the 'freedom to innovate' rightly restored to its rightful place, a theme repeated by Business Applications Group VP Jeff Raikes who spoke poetically of "the feeling of the sun breaking through the clouds."

Very pretty, all of it. But behind the android smiles and heliophilic conceits there was little of substance that the best minds of Microsoft's PR department could point to by way of a "stunning victory".

The PR team did get as much mileage as humanly possible out of the appeals court's reversal on the browser monopoly (so nuts to Netscape); but it all but buried the fact that MS still has to face the music in court, or via a settlement, over its OS monopoly.

The breakup ordered by the freshly disgraced Judge Jackson was, of course, most relevant to addressing the browser monopoly, so that's off - at least in theory. But we'll point out what the MS flacks steered clear of: there's no reason why a slightly different 'structural remedy' can't be sought to address the OS monopoly.

That is, now that the appeals court has straightened out Judge Jackson's flawed reasoning, we find that MS can keep its browser business and its OS business under one roof, but we may also find that its applications business still might be better kept under a different one.

MS still has to deal with the monopoly charge in the OS realm, and no amount of soft-pedaling can overcome the basic uncertainty of where that might lead. Gates himself said it best when he wandered off script momentarily to answer a reporter's question:

"Well, today's development, we view positively. This is not the end of the case. As I said, the thing that -- one of the avenues we will pursue is a discussion with the other parties to see what kind of additional litigation is necessary. If litigation moves forward, at least it's a very narrowed case and under a set of principles that we think are very appropriate, particularly relative to the issue of innovation."

The mainstream press, which is addicted to the prognostications of Wall Street analysts (ie., the shamanists who claimed the dotcom wampum boom of last year might just expand for eternity) has been gobbling up the sunshine fluff from Beast Central while flagrantly overlooking the lack of nourishment it provides.

But that's no reason for us to follow a bad example. We say this contest is far from decided. ®

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