Dont Hold Your Breath

Microsoft is fast running out of legal options in its antitrust battle against the feds, and another battle looms against the European Union.

Microsoft is fast running out of legal options in its antitrust battle against the feds, and another battle looms against the European Union. But dont expect the company to give any quarter to governments on either side of the Atlantic.

Earlier this month, Judge Colleen Kollar-Kotelly ordered a mediator to jump-start the stalled settlement talks that are supposed to bring a resolution by Nov. 2. Forget it. Microsoft has no incentive to settle, and the Department of Justice has stated consistently that it wants an aggressive, forward-looking remedy.

That spells a lot of doodle drawing, yawning and late-night television for the settlement negotiators who have been ordered to work "around the clock." According to reports, both sides have put low-level functionaries in the meetings to raise the body count and give the appearance of honoring Kollar-Kotellys request.

Microsoft would much rather do battle in court, where it can continue to lose but kill time in the process.

Recently, the Supreme Court rejected a Microsoft appeal to have the governments antitrust case thrown out for judicial bias on the part of the original trial judge, Judge Thomas Penfield Jackson. It was a long shot, and nobody expected the ploy to work. The setback is yet another in a three-year litany of legal failure for Microsoft, which seems to stumble pretty much from one bad turn to another.

Sure, a U.S. appeals court rejected portions of Jacksons original monopoly ruling and the government dropped its request to break up the company. While both events were good news for Gates and company, damning monopoly maintenance rulings remain.

Still, Microsoft cleaves to its original policy of stonewall and swagger. It runs its remarkably inept legal team ahead of it like clumsy blockers, and it strolls along as if nothing were wrong. That, of course is the point. Reminiscent of the John Belushi character in the film Animal House, Microsoft is snarfing up as much as it can before someone — somehow — stops the chuck wagon.

The strategy has been remarkably successful: After three years of litigation and a monopoly ruling, the company is still free to do whatever it wants in the marketplace and continues to fold applications into its operating system, as it is doing with Windows XP, which is set to be launched this week. Microsoft could stretch the process out well into 2003 via another appeal to the Supreme Court.

The EU is just beginning its legal odyssey with Microsoft, and it remains to be seen how effectively it can deal with the companys strategy of chronic delays. The EU has one arrow in its quiver that its U.S. counterparts dont: The EU has the ability to levy fines of up to 10 percent of Microsofts worldwide revenue — a potential $2.5 billion — if the company ignores its antitrust edicts.