Re: [Fwd: Divesting the browser]

["Lewis A. Mettler" <lmettler@lamlaw.com>]

Norm,

Norm wrote:
> 
> On Mon, 29 Nov 1999 13:21:32 -0500 (EST), Lewis A. Mettler wrote:
> 
> >> >Still a bad idea, given that almost everyone uses Windows, the
> >> >government will be defining what goes into the OS most people use.
> >>
> >>      I disagree, there's no way the results of any *effective* remedy
> >> aren't going to change the landscape for the consumer.  If any remedy
> >> has to pass a 'consumer convenience' test we might as well pack it all
> >> in right now.  But it doesn't have to mean that consumers couldn't get
> >> what they want, just that it may be packaged differently.  Hell,
> >> consumers grumbled when AT&T was broken up, but I've heard few complain
> >> about the significantly lower LD costs many of us enjoy today.  As the
> >> saying goes, 'you've got to break a few eggs to make an omelette'.
> >>
> >>      I believe it's far too late in the game to 'fix' the M$ problem in
> >> a way that's absolutely painless for everyone except M$.  The situation
> >> was allowed to fester much too long for that.  Any remedy with teeth is
> >> going to send a shockwave throughout the industry...M$ is far too
> >> entrenched for it to be otherwise.  But I do find this fact cause for
> >> alarm, because an effective solution will require even greater
> >> political will than it would have if 'nipped in the bud'.  The DOJ blew
> >> their chance in 1995, and now everyone is going to have to bite the
> >> bullet.
> >
> >I do not think it is fair to blame the DOJ for not having solved this
> >problem earlier.  It is true that stronger measures could have been
> >sought earlier on.  However, all you need to do is read the most recent
> >consent decree agreed to in writing between Microsoft, the judge and the
> >DOJ to realize that Microsoft Corporation will do nothing even close to
> >abiding by the antitrust laws (or court decisions) on these points.
> >Yes.  The consent decree is a valid and final court decision that was
> >supposed to make this law suit unnecessary.
> 
>      I believe it's quite fair.  The DOJ actually *JOINED* M$ in an
> appeal of Judge Sporkin's refusal to 'rubber stamp' what he *KNEW* was
> nothing but a slap on the wrist!!!!!  We had a Judge that was ready to
> support remedies with real teeth and what did the DOJ do???  You bet
> the DOJ deserves some of the blame.  IMO people at the DOJ allowed
> their egos to get in the way of any real remedy, and I just hope like
> hell they've learned their lesson and won't repeat the same mistake
> this time.
> 
> >If Microsoft Corporation is going to flatly ignore all antitrust laws
> >(as they clearly have done in this case) and risk the very breakup of
> >their company as a possible remedy should the DOJ go to court (as they
> >have done in this case) then I think it is incorrect to somehow assume
> >that any position taken by the DOJ would have made any difference at
> >all.
> 
>      If you believe that then what's the point of taking them to court
> at all??  If the DOJ was powerless before what's different today??

I think the DOJ and most judges have a tendency not to try the strongest
possible remedy upon the first attempt.  If someone breaks into your
house, they do not get 25 years on that offense.  It is just the way the
legal system works.  However, as the true character of a criminal is
solidified, stronger remedies appear necessary.

Was the DOJ a little weak kneed in the recent past?  Perhaps they were. 
But, that is water past the dam.

The DOJ is not powerless.  You have to distinguish between the lack of
power and the lack of the will and ability to exercise it.  Actually,
the DOJ has no power at all.  But, they can bring actions to the
courtroom.  The judges have all of the power.

Keep in mind also that individual companies can and may still sue on
their own behalf.  So if you are looking for "weak knees" there are lots
to be observed.  It is difficult for a company to commit millions in
legal expenses just to recover damages.  And, Microsoft knows that when
they abuse the legal rights of many companies small and large (i.e. IBM
for example).

> 
> >
> >Microsoft Corporation right now is ignoring all antitrust laws and a
> >consent decree written specifically to solve the IE bundling with the
> >OS.  What makes anyone think any prior action would "scare" them back
> >into compliance with antitrust law?
> 
>      You don't scare them, you enact remedies that prevent the
> behavior.  The problem is that the 1995 decree didn't even scare them.
> If anything the DOJ just reinforced the idea that they could get away
> with it

At the moment, the threat of an effective remedy selected by the court
is all that can suggest to Microsoft to settle.  But, you are correct,
for many people a threat is of no value.  The main reason that antitrust
damages are tripled is simply because the possibility of paying only the
real damages is assumed to be of little deterrence.  Besides you have to
catch them first.

The 1995 decree simply told them what was expected of them.  Let me put
it this way, "criminals do not care what is expected of them".

This is precisely why any conduct related remedy is pure eyewash.  If
you remove the monopoly power completely, there will be no need for
conduct related remedies at all.  But, the removal means the removal of
the management from the products not just a cosmetic split of some kind.

In other words, if Microsoft agrees to it, it will not mean anything.  

Do you really think that Microsoft would agree to my proposal of selling
off the source code for key products to at least 6 or 8 different
companies?  Oh, hell no.  They know for certain that means they are out
of power.  It does not mean they can no longer work in this industry
although you are free to suggest that as well.  But, Microsoft
management would no longer exercise monopoly power over those key
markets.  And, that is precisely why they will never agree to that
solution and it is also precisely why that is the solution best for the
industry.

> 
> >
> >You know, the reason why antitrust law provides from tripling proven
> >damages is to serve as a deterrent to would be violators.  A number of
> >companies have multibillion dollar antitrust claims they have either
> >filed or could file.  Proven damages can be tripled.
> >
> >Now.  How hard are you planning to slap their wrist?
> 
>      Well lets just say that unlike the 95 decree I wouldn't allow them
> to slap their own wrist.

I would have to agree that doing only that would be a waste of time.

However, removing Microsoft management from the power AND requiring the
corporation to cover antitrust damages (tripled) would at least
compensation those companies illegally harmed.

The consumer class action lawsuits are also required in order to undo
some of the harm caused to consumers.  The result could be that
Microsoft pays Netscape three times the lost revenue for Navigator and
one more time for the forced sale to consumers at $35 a copy for IE. 
That would be justice.  Otherwise, Bill Gates will just decide that
crime does pay and he will do it again.  He has already (since the
findings of fact were released) promised to do that.

> 
> >
> >It is a joke to think a conduct related remedies will do anything.  In
> >fact, a conduct related remedy will just prove to Microsoft and its
> >lawyers that ignoring antitrust laws "pays".  You get to keep your
> >ill-gotten monopoly gains and all you need to do is destroy your email
> >sooner.
> 
>      You impose very harsh penalties *AND* conduct related remedies.
> IMO neither one by itself is going to cut it.

If you remove the power the conduct you are concerned about does not
work so you do not have to regulate it.

If, on the other hand, you leave Bill Gates in charge, you might as well
contact your congressman and begin support for the affirmative
regulation of the entire computer sofware industry.  Asking Bill not to
violate the law or any judgement agreed to or not is a complete waste of
time.

-- 
Lewis A. Mettler, Esq.(Attorney and Software Developer)
lmettler@LAMLaw.com
http://www.lamlaw.com/ (detailed review of the Microsoft antitrust
trial)