Page Two

By Caron Carlson  |  Posted 2002-08-19 Print this article Print

: Awaiting a Resolution"> The degree to which the court might be influenced by Microsofts actions or other external factors, such as the economy or the changing corporate culture, is a subject of some debate. Some industry experts say external factors should not play a role.

"The fact that WorldCom [Inc.] and Enron [Corp.] engaged in other types of corporate crime shouldnt affect the remedies applied to Microsoft," said Ken Wasch, president of the Software & Information Industry Association, in Washington. "Antitrust laws have to be applied in good times and bad times."

Others (including Microsoft officials who took the stand in the spring) said one reason to reject the states tough remedy proposal is that it would have a deleterious effect on Microsoft, the "PC ecosystem" and the economy.

"The judge has to take into account the impact any remedy she orders will have on the economy," said Jim Prendergast, executive director for Americans for Technology Leadership, a pro-Microsoft organization in Washington. "If Microsoft were to pull Windows from the market, it would have a tremendously negative impact not only on this economy but around the world."

Kollar-Kotelly offered no solid clues during the hearing to suggest what factors she considers top priorities in crafting a remedy. While most industry observers agree she will be cognizant of the larger forces surrounding the case, it remains unknown which direction they might push her.

"It could play either way," said Albert Foer, president of the American Antitrust Institute, in Washington. "In general, theres so much less trust in corporate leadership now that theres a greater willingness to punish companies and hold them to the line than when this went to trial."

Although the application of antitrust laws does swing periodically, the swings do not necessarily correlate to economic cycles, according to Foer. Judges are unlikely to be highly sensitive of the impact of their decisions on the stock market because the market is not likely to be highly sensitive to the decisions, he said. "The market is so smart that it has already [accounted] for any court decision," Foer said. "I dont think antitrust historically has paid any attention to stock price."

Although a court may be tempted to factor into a ruling the anticipated effects of a remedy on the economy, in this instance the temptation may be abated because the case is almost certain to be appealed; when the final decision is made, it could be applied in a different economy and corporate climate than we have today.

Related Stories:
  • Microsoft Touts Antitrust Compliance
  • Instilling a Culture of Corporate Candor (CIO Insight)


    Submit a Comment

    Loading Comments...
    Manage your Newsletters: Login   Register My Newsletters

    Rocket Fuel