The final judgment that Judge Colleen Kollar-Kotelly gave in the Microsoft antitrust trial will have little impact on Microsoft’s customers, its partners, or Microsoft, in my opinion. Let’s consider Kollar-Kotelly’s three remedies. Then I’ll propose remedies that I believe would have more impact on Microsoft and the market.
In remedy one, Kollar-Kotelly restricted Microsoft from striking agreements with hardware and software partners that require the exclusive use of Microsoft "middleware." TheWindows OS needs to work well without Microsoft middleware and let users easily remove Microsoft components without disabling their systems. The final judgment uses Internet Explorer (IE), Microsoft’s Java Virtual Machine (JVM), Windows Media Player (WMP), Windows Messenger, and Outlook Express as examples of Microsoft middleware.
The first problem with remedy one is the way the judge defined the term "middleware." The traditional definition of middleware is a layer of software that connects an application to a resource (i.e., a database)—and that’s a very broad definition. With the exception of JVM, the examples remedy one cites are applications. Therefore, the "middleware" remedy won’t affect the typical IT administrator. An IT administrator usually orders pre-configured machines or loads a pre-configured system image from the network before deploying the machine to users. So if a hardware partner decides to strike a marketing deal with an application vendor such as Real Networks or AOL, rather than including WMP and MSN, then the deal will affect consumers, not IT.
In remedy two, Microsoft is required to document the APIs for its OSs so that competing software companies are on an even playing field with Microsoft’s internal application developers. The documentation must be available by the time Microsoft releases the beta version of a product. For the typical software vendor, the process of documenting APIs won’t change much. However, even though Microsoft hasn’t documented APIs in the past, the developer community was quick to reverse engineer the undocumented APIs and post their documentation on the Internet. Remedy two, however, does not prevent Microsoft from making changes to the OS to favor its own applications, such as SQL Server, at a level below the published APIs.
The third remedy requires Microsoft to establish an Antitrust Compliance Committee to ensure that it complies with remedies one and two. Microsoft recently appointed three of its board members to this committee, so this committee will be self-regulating.
The overall goal of the final judgment is to force Microsoft to be more sensitive to its partners. This is a worthy goal, but I believe it falls short of having a significant impact on the market or punishing Microsoft for being found guilty of being a monopoly.
If I Were Judge for a Day
With only slight modifications, these remedies could have been made tougher while still providing protection to Microsoft for its intellectual property and its right to innovate. If I were judge for a day, here are the remedies I would have proposed instead of the ones that Kollar-Kotelly proposed.
- Ensure that the judgment clearly states that it applies to all Microsoft OSs, including embedded, server, and client OS versions. All the component examples listed in the final judgment were related to client versions of the OS, but Microsoft has engaged in much more anti-competitive behavior on the server side compared with the client OS. As an example, the server OS is the focus of the European anti-trust lawsuit.
- Require Microsoft to distribute competing applications on its Windows Update Web site so users can easily install and update Microsoft or non-Microsoft products. Microsoft could charge a reasonable marketing fee to competitors for inclusion in the Windows Update site. But for many software vendors, the exposure to millions of Windows customers would be the best marketing exposure they could buy.
- Require Microsoft to document every change to the OS that results in a performance or feature benefit to any of its applications. This requirement would let competitors duplicate performance gains in their own products by following Microsoft’s examples.
- Require the Antitrust Compliance Committee to comprise a majority of non-Microsoft people. Put someone from Sun Microsystems and Netscape Communications on the committee, for example, to keep it honest. I would then require the Committee to make its findings available to the judge every six months. Microsoft should receive serious financial penalties if the Committee finds that the company is out of compliance with the final judgment.
- The final judgment didn’t specify any financial damages awarded to the plaintiffs. I would have required Microsoft to compensate the hardware partners that substantiated during the trial that they lost money because of Microsoft’s retaliatory practices. If you lose a case, you typically have to pay something. During a previous remedy negotiation session, Microsoft was willing to donate a billion dollars worth of software to schools. But the school donation wasn’t included in the final judgment. The only people who made anything in this case are the lawyers. Where have I heard that before?
I believe my proposed remedies would have increased competition and fairness, while protecting Microsoft’s right to innovate. In addition, it would have put some real teeth into remedy enforcement by having non-Microsoft employees participate in the monitoring process. Finally, I would like to see Microsoft pay something besides legal costs for abusing its monopoly power. In this scenario, the plaintiffs could have donated their damage awards to schools, which would have turned a bad situation into something positive.
(You can read the text of the final judgment at http://www.microsoft.com/presspass/trial/nov02/11-01opinion.asp.)