With the benefit of a couple of weeks of perspective, its clear that there was not nearly as much good news for Microsoft as had first met the eye—and as the company would have had us believe—in the recent ruling by the U.S. Court of Appeals. Study of the 39,000-word ruling reveals that time and again Microsoft was found to be a monopoly that engaged in a number of significant anticompetitive practices.
So weak is Microsofts position now that Bill Gates didnt even pretend to be interested in anything other than a settlement. Lets remember that Judge Jackson labored mightily to bring about a settlement earlier, even appointing Richard Posner to mediate. Now Microsoft is eager for an approach it earlier found unpalatable. In fact, harsh restrictions and even still, theoretically, a breakup at the hands of the judge who handles the case on remand hang like a sword of Damocles over Microsofts head.
We were early in urging a settlement, but after negotiations foundered, we said a breakup was the most just and effective solution and the best for Microsoft employees, shareholders, customers and competitors. We still think that. Judge Jackson had called for two companies; we think three would be better: operating system, online services and applications.
But if behavior guidelines are the ultimate remedy, here are our suggestions: First, Microsoft must make it easy for ISVs and customers to replace Microsoft components such as Internet Explorer, Windows Media Player and Windows Messenger with those of other vendors. Windows components must not be the defaults; choice must be the default.
Second, Microsoft must publish file formats that are pre-eminent due to the companys monopolistic position. These include the file formats of Office documents, the Outlook address book and message store, and streaming media and music. Microsoft also must not change these formats unnecessarily and must keep documentation up-to-date.
Third, Microsoft must abandon contracts that oblige OEMs and ISVs to grant exclusive concessions to Microsoft. Also, Microsoft must refrain from punitive measures against OEMs that preload non-Microsoft components.
Guidelines like these, spelled out in legalese, will consume thousands of pages. Faced with a choice of complex rules of behavior or a breakup, Microsoft could well negotiate a breakup it could live with rather than rules it could not. Either way, Microsoft will be fundamentally changing its business practices thanks to its “victory.” Next year or soon after, IT professionals should see the fruits in greater choice in software. Then it might be time to celebrate.