Is Microsoft Off the Hook?

By Chris Taylor

Judge Thomas Penfield Jackson tried his best to make it a speedy trial--the antithesis of IBM's 13-year torture. Determining whether Microsoft has violated antitrust laws should take a month or two, maybe three. But as AOL has amply demonstrated, even six weeks can be an eternity in the warp speed of Internet time.

Now that the competitive landscape has shifted, should the court even bother to continue? Microsoft, not surprisingly, says no. Chief counsel William Neukom declared that the Netscape deal "yanks the rug out from the government's case" by proving that the Internet is more competitive than ever. As soon as the feds finish their case, Neukom's team will ask Judge Jackson--one more time--for summary dismissal. Said David Boies, the Department of Justice's lead attorney: "[That's] the sixth time that Microsoft has pronounced the government's case dead."

Unfortunately for Microsoft, the patient isn't even bleeding. Bill Gates' famously evasive testimony and the parade of Microsoft's victims have hurt the company, at least in the eyes of the press. But the case's central tenet--that Microsoft illegally leveraged its operating-systems monopoly--still stands, whatever AOL does with Netscape. Even before the $4.2 billion buyout was announced, government economist Frederick Warren-Boulton was framing it as more evidence of Microsoft's strong-arming. "Netscape has been forced to the wall," he said. "That's an unfortunate outcome of what Microsoft has been doing." Touche.

If the deal hasn't dampened the government's confidence, it does make one aspect of the trial more problematic: the remedy. The DOJ could argue, as Georgetown law professor William Kovacic puts it, that "the lawsuit was the catalyst for this deal--it gave the companies some breathing room." In that case, Jackson may decide that that's all the relief they really need. After all, the trial is slow enough. Punishment shouldn't take forever.

--By Chris Taylor