Microsoft case is a waste of our money

The Department of Justice's Justice's antitrust suit against Microsoft Corp. stank the minute it was filed and it continues to reek today. It was a course of action that had little chance of reining in Microsoft for two reasons. First, the people filing the suit had little or no understanding of the basic business practices of the industry (and the people hearing the case had even less). Second, a major premise of the case was based on a theoretical assumption that because Windows software pricing did not fall, consumers were harmed by Microsoft's monopoly.

Finding that there was indeed consumer harm and then trying to attach a value to that harm is a philosophical, technical, and legal debate that is not likely to get resolved in the courts to anyone's satisfaction. Because of this, the case has turned out to be a tremendous waste of taxpayer money and we all may be ultimately worse off than when it started.

We have not heard the last of this case now that attorneys general from nine of the 18 states involved have decided to pursue tougher settlement terms. But unless Congress updates the language of the Sherman antitrust laws to define consumer harm as something specifically beyond price-fixing, little hope remains that those attorneys will get much more than what's on the table today.

The best hope for the long term is that the Federal Trade Commission, which went after Intel, might by decree try to rein in Microsoft under some future administration. Barring that, the state attorneys general might have better luck pursuing a RICO (Racketeer Influenced Corrupt Organization) investigation across the entire Wintel duopoly, which has managed to maintain pricing at a relatively fixed rate during the past 10 iterations of the Intel architecture. The rationale behind that has been Moore's Law, which holds that performance will double every 18 months, which allows the PC industry to claim it is offering more value every 18 months for the same price. The problem with this is that hardware performance today could just as easily double every nine months. Obviously some level of orchestration is being applied here.

RICO laws were put on the books to deal with organized crime, but they have been applied sparingly outside that venue. And even an average citizen can file a lawsuit based on RICO without the aid of the government.

Clearly the organizations that have been harmed by Microsoft are the companies with which it competes. Some of that harm has been caused by its business practices. But more has been caused by their own missteps and stupidity. What needs to be sorted out in each case is how much of the harm incurred is attributable to Microsoft and how much retribution should be paid. Dragging consumers and U.S. taxpayers into an industry fight wastes taxpayer money and creates opportunities for unalterable precedents that everyone will find unacceptable.

Where does this leave us? Pretty much nowhere for now. The most logical thing would be for customers to create an independent advisory body populated by CTOs that could help keep Microsoft in line. After all, it looks like neither the vendors nor the government are capable of policing this industry, so the customers will have to do it for them.

Michael Vizard is editor in chief of InfoWorld US and InfoWorld.com.

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