• Scope of Antitrust Suit Goes Beyond Microsoft's Fate (Mar. 26, 2002) • Timeline: U.S. v. Microsoft • Special Report: Windows XP • Tech Policy Headlines • Washtech.com

The Microsoft Antitrust Case
Guest: Washington Post reporter Jonathan Krim

Wednesday, Apr. 3, 2002, 1 p.m. EST

Didn't the Microsoft case end last year when an appeals court through out the antitrust case against the company? Or wasn't it brought to conclusion when the government and Microsoft entered a settlement deal?

The complicated history of the Microsoft antitrust case can be confusing to many readers who aren't following it closely. Washington Post reporter Jonathan Krim will be online on Wednesday to take your questions about the current status of the antitrust case against the world's biggest technology company. [Read his latest file on the case here.]

Microsoft's legal woes have dominated news headlines for years. At issue is whether or not the software giant abused its near monopoly on personal computer operation systems and software.

Last year, the federal government and Microsoft entered into a comprehensive settlement to resolve the ongoing antitrust case. But a handful of states refused to join the deal, arguing that Microsoft should be punished for behavior that federal courts had found to be anti-competitive.

This month, the nine holdout states have been making their case in court, arguing that the current settlement deal does not go far enough to punish Microsoft. Krim has been covering those hearings and will offer his insight.

Submit Your Questions and Comments: Join Jonathan Krim from 1 p.m. to 2 p.m. on Wednesday.

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

To read the most recent responses, click "Get New Text" or select "Automatically Update Page."

Washtech.com: We'll be getting started in just a few minutes. Please keep those questions coming!

Washtech.com: Jonathan, thank you for joining us today. Before we get started with user questions, can you offer a quick snapshot of where the antitrust remedy hearings stand now? How many more weeks of testimony are expected?

Jonathan Krim: The current remedy hearings are examining proposals from state prosecutors who are seeking stiffer sanctions on the company than are called for in a proposed settlement between Microsoft and the Justice Department. The hearings are likely to last several more weeks. Separately, the same judge in the case is weighing the settlement deal, but she has given no indication when she will rule on that. She may wait until these hearings are over.

Alameda, California: Wasn't Microsoft found guilty by Judge Jackson? And was not this finding of fact upheld by the Court of Appeals? Therefore the issue is the remedy, not the guilt?

Jonathan Krim: This is mostly correct, although the court of appeals did reverse some of Judge Jackson's rulings, especially on breaking up the company. In some cases, other liability findings also were narrowed or reversed.

College Park, MD: One of the proposed settlements calls for Microsoft to release source code for Internet Explorer.

Microsoft's integration of IE was a major aspect of the original suit against the company, and it seems that some people feel that forcing Microsoft to release the code for their web browser will act to increase market competition.

This is a dangerous assumption. Consider this. Netscape Navigator, still Internet Explorer's main competition, exists now in the open source project "Mozilla." If the programmers working on the Mozilla project even looked at Internet Explorer code, they would fear lawsuits from Microsoft claiming copyright/patent infringments. This effectively limits the usefullness of Microsoft's code to corporations willing to spend the money necessary to license Microsoft's "intellectual property."

This fear of lawsuits is a real fear, especially for programmers working on open source projects. I've read statements from the Linux Kernel Mailing List that developers wouldn't touch Microsoft code with a ten foot pole. All Microsoft has to do is find some _trivial_ section of code in the competing product's code base and call it their intellectual property. Instant lawsuit.

Your thoughts?

Jonathan Krim: I am not going to take a position pro or con on any of the proposed remedies. The issue of open-sourcing the browser is certainly one of the state remedies that goes well beyond the proposed deal with the Justice Department. The states have yet to present witnesses who talk at length about this idea.

Alexandria, Va.: Today's WSJ talks about campaign contributions from companies like AOL, Oracle and Sun to these AGs who are still pursuing the case. Why are these AGs continuing this case if the DoJ already reached a settlement?

Jonathan Krim: Because they believe the proposed DOJ deal in insufficient and flawed. Both sides have given extensive campaign contributions.

Kernersville, North Carolina: 1. Don't you find it a bit strange that the attorneys general are using the competitors of Microsoft as their main witnesses in the case? Wouldn't you think there would be some law-enforcement type consultants or unbiased product experts instead.

2. Never once during the entire case that was presented by the AGs did the words "consumer harm" come up. Isn't it true that there must be some sort of consumer harm done before there is to be a anti-trust case?

3. As a citizen of North Carolina, I am all for encouraging my home state companies like Red Hat to do well. However, I don't think it is right for Red Hat or any other company to come in under the guise of a trial and ask for favors and considerations that would not normally be accorded a company. What do you think?

Jonathan Krim: I don't think it is strange for the states to rely on companies to discuss how Microsoft behaves in the markeplace. On the issue of consumer harm, this is a tricky one for both sides. The laws seek to protect competition. Both sides argue that they are seeking to do so, which in turn benefits consumers. As for Red Hat and other competitors, the question for the judge is whether competition is served by remedies that also might help them.

Silver Spring, Md.: Does the current trial have any relation to the private lawsuits brought against Microsoft? I haven't seen much written about those suits since January when a judge in Baltimore rejected Microsoft's proposal to settle the suits by donating lots of software and equipment to schools.

Jonathan Krim: No relationshp.

Arlington, VA: How, if at all, do the states' claims differ from the claims originally pursued by the federal government?

Jonathan Krim: In some ways they are similar, especially in basic language and defnitions. But they push well past it in other areas. But remember, the original federal government proposal was breakup, which the states are not seeking.

Washtech.com: You've sat through many, many days of hearings already. What's the courtroom dynamic like? Are any personalities dominating the proceedings? How combative were some of the cross-examination of the state witnesses?

Jonathan Krim: It's getting more combative. But these proceedings are different because the judge required direct testimony to be written. And there is no jury. So the lawyers dont get to preen as much.

D.C.: Does the appelate ruling from last summer absolutely forbid the current judge from ordering a break-up of the company?

Jonathan Krim: Not absolutely, but the parties are not seeking it.

Washtech.com: Jonathan. Many skeptical questions submitted by our readers can be neatly summarized as falling into 2 camps:

1) Shouldn't the anti-Microsoft crusade be settled in the marketplace -- with companies producing better products that take dollars and marketshare away from Redmond -- instead of in the courtroom.

2) Another theme is -- what's wrong with having one operating system dominate the PC landscape? Standardization is good, especially when compared to the plethora of operating systems and programs that dominated the first phase of the PC revolution.

Can you tell us what the hold-out states and the various Microsoft competitors would have to say about these arguments?

Jonathan Krim: The holdout states and competitors would argue that the marketplace is dominated by a monopolist that has successflly killed competitive threats in the past. That conduct must be prevented in the future, they would argue. On single operating systems, they would argue that there are others now in the server marketplace, so multiple systems can work.

Derwood, MD: How did Microsoft affect Java programming? Does their software not support the language?

Jonathan Krim: Windows XP, the newest version of Windows, does not carry the code that enables Java to work. Users have to download it separately. Microsoft has an alternative system.

Arlington, Va.: Do the nine holdout states have the right to file an appeal if the judge in the current hearings decides to accept the DOJ-MSFT deal?

Jonathan Krim: yes.

Vienna, VA: Given Judge Jackson's questionable behavior in this case....to the point where he was admonished by a superior court....why was this case not heard by a jury instead....or a retrial scheduled?

Jonathan Krim: the court of appeals odered a new judge to be assigned to examine remedies. most of jackson's underlying findings of fact were upheld.

Arlington, Virginia: In the current remedy phase of the case, will Microsoft be allowed to call its own witnesses, or are they restricted to just cross-examining the holdout states' witnesses?

Jonathan Krim: microsoft has a whole bunch of its own witnesses lined up, including, they say, bill gates and steve ballmer.

Reston, Va.: Last year we got to read all sorts of articles about Judge Jackson, while the same is not true of Judge Colleen Kollar-Kotelly. How is this judge presenting herself in the courtroom? Are both sides happy with her? Is she offering any hints with her statements and body language?

Jonathan Krim: She is the anti-Jackson. Very closed-lipped on leanings, rarely asks qustions. Seems to prefer written briefs and testimony, and is going out of her way to cross every procedural t and dot every i.

Bethesda, Md.: Who are the lead attorneys on both sides? Are any of the holdout states' AGs appearing daily in the courtroom?

Jonathan Krim: the states have representatives there, but thwir lead lawyer is Brendan Sullivan, from a DC law firm. Microsoft hired a new lawyer for this phase as well, Dan Webb.

Arlington, VA: If I ran a Fortune 500 company with sizable market share. . . what lessons should I learn from what Microsoft has done well, and poorly, in this litigation?

Jonathan Krim: Sizable market share is quite different from a monopoly. I think one thing Microsoft would acknowledge is that it has not be a great corporate citizen in managing its relationships in the industry and acting like a leader. I'd also be careful with what you commit to email :-).

San Diego, California: I've read about 200 articles on the case since 1997, and what strikes me about this "nine states" phase is that the major papers aren't sending reporters to the trial, but instead relying on AP & Reuters. So in earlier phases I could read 5 or 6 accounts of crucial testimony instead of 2.

Is this some artifact of the media business -- trial fatigue, a war to cover, lousy classified ad sales, etc. Or is there some fundamental reason why everyone considers this phase less newsworthy (e.g. the Feds have dropped out)?

Washtech.com: The Washington Post's running coverage of the remedy phase can be accessed online here.

Jonathan Krim: we are there, as is the Wall Street Journal and SJ Mercury News. LA Times and NY Times are often there.

Arlington, Virginia: Just say for argument's sake that the nine states win: does that mean only residents in those states benefit, or do we all get to reap the reward?

Jonathan Krim: any resolution would likely be national in scope.

Falls Church, Va.: Given IBM's commitment to Linux, has IBM participated in the current phase of the trial in any way?

Jonathan Krim: No. they did in the last phase.

Washington, D.C.: How strong is the holdout state coalition? Is there one keystone state that this all hinges on -- like California? Along the same lines, are any of the states that DID settle working quietly to support the holdouts?

Jonathan Krim: The litigating coalition appears quite united. I think the same could be said for the states that signed the agreement *unless* the judge rules that the holdout states don't have standing to pursue the case, as Microsoft has argued. If that happens, the signing states might go in another direction.

From the hinterlands: At first I had some reservations about the DOJ taking on Microsoft. Then I read about Microsoft's attempt to push its own version of HTML (100% compatible only with Internet Explorer, of course). I believe this came out during the antitrust trial.

This, more than anything else, convinced me that Microsoft is delusional in its belief that its computing solutions are right for everyone. As you may know, HTML standards are set by the World Wide Web Consortium. From an ethical standpoint, if Microsoft really felt it had worthwhile improvements to HTML, shoudn't it have submitted them to the Consortium for ratification? Instead, Microsoft looks like the kid who took his ball and went home.

Jonathan Krim: The argument from the states is that Microsoft has a right to reject standards. But the claim is that Microsoft has first said it would adopt standards, get developers to write to its platform, and then change the standards.

Alexandria, Va.: You recently wrote about AG John Ashcroft pushing the settlement so that the whole Microsoft saga could be resolved quickly. How much do you think Sept. 11 and the Administration's reorientation to war footing influenced Ashcroft's view? In other words, had there been no 9/11, would DOJ have rushed to settle?

Jonathan Krim: Hard to say. I think this DOJ has had a diffeent and narrower view of the case than the previous administration. For the record, the view on ashcroft came from an email from a friend of his to some rivals.

Herndon, Va.: If the judge decides to accept the deal that Microsoft and the government cut last year, won't Congress then have to act on it? I seem to recall that portions of the deal would require legislative action. If so, what are those parts?

Jonathan Krim: No, no congressional action is involved. Congress simply mandates the process by which the agreement is evaluated by the courts.

Arlington, Va.: Considering the johnny-come-lately emphasis on corporate accountability out of Washington, do you think the whole MSFT trial would be any different if it were just now happening?

Jonathan Krim: What might be different is how this Justice Department would approach the case in the first place. But I dont think any of the enron/governance issues are analagous.

Washington, DC: I don't think I understand the procedures in the current trial. Written testimony from witnesses is required. But are the witnesses then taking the stand for cross examination?

Jonathan Krim: that's right. It's a bit odd, but it certainly saves time. the lawyers for the witness then get to "redirect'' after cross-examination.

Arizona: There has been a fair amount of technical evidence in this case, but my impression is that the lawyers and judges (and, sadly, reporters too) are all at sea, as far as any understanding of the technology goes. Practically speaking, this means that Microsoft gets away with making claims that are technologically outrageous, so much so that any programmer making such claims to other programmers would be ridiculed. Case in point: Microsoft's evidence about whether components of Internet Explorer are integral parts of the operating system. In another case, we had a judge tell us that "Microsoft makes good software", something he is not in the least qualified to opine on. Is the legal system capable of deciding technology cases sensibly? What changes can they make so that legal decisions are based on sound technological principles?

Jonathan Krim: A very good question, tho I hope the media is doing better than you imply. It is striking, though, how little this judge and the new lead lawyers understand about technology. But Jackson worked hard to get up to speed, and this judge is a hard worker. There will be plenty of expert testimony on both sides. Imperfect as it might be, I dont think we can decide that somehow these kinds of cases cant be handled in the courts.

Baltimore: Is is up to Microsoft to defend the settlement proposal, or are DOJ attorneys in the courtroom every day?

Jonathan Krim: DOJ is not involved in these hearings. They already had their hearing to defend their settlement. Remember, we're operating on two separate tracks here, which makes it unprecedented.

Alexandria, VA: A constitutional question about whether the nine remaining states should be able to continue their effort now that the DOJ has settled.

This makes sense, as just as the federal govt. is not to abridge individual state rights, so too should not individual states be able to impact citizens in states outside of their borders.

Do you see the judge as wrestling mightily with this issue, and do you see this as going all the way to the Supreme Court, and if so does this delay the outcome another year or more?

Jonathan Krim: yes, and i think it might well go all the way to the supreme court.

Seattle: Anti-trust is suppose to be about restoring competition, right? Doesn't it seem like the 9 remaining states are seeking more than restoration. It appears they are trying to punish Microsoft with the help of the companies critics and competitors.

Jonathan Krim: that is certainly microsoft's argument. the judge will have to decide.

Alexandria, VA: Journalists at the Post and many other media outlets seem to have a bias against Mircrosoft, always reporting news in a light that makes them appear bad, and seldom reporting news that is favorable to them.

Is it because it sells, you personally dislike them, media companies support this fearing the power of Microsoft (on their business) or what?

Washtech.com: Without a doubt, all of the media organizations covering the Microsoft trial -- including The Washington Post -- believe they are providing in-depth reporting that is fair to both sides. Jonathan, do you want to offer any comment here?

Jonathan Krim: I just disagree with the assertion, and regret that anyone feels that way. I catch heat from both sides whenever stories aren't exactly how they would have done them.

Seattle, WA: This is more of a comment...it is nice to see you and the media finally starting to write about competitors like Novell and Liberate trying to cut deals to further their business interests by using anti-trust as a bargaining chip. This has never been about consumers, if it had been the case would have been dropped long ago.

Jonathan Krim: This is definitely Microsoft's view.

Washtech.com: Is the Justice Dept. taking Judge Collar-Kotelly up on her offer to argue that the holdout states shouldn't be allowed to pursue tougher sanction?

Jonathan Krim: No decision yet. It will be very interesting to see what they do.

Arlington, VA: Is the Microsoft case the O.J. case of the new millennium? The way I see it, if the holdout states lose, AOL and Sun et. al. are prepared to go to civil court.

Jonathan Krim: They have already sued Microsoft privately, so there is certainly no near-term end in sight.

Washtech.com: Jonathan, thank you for your time today. As you look ahead to the remainder of this phase of the case, what will you be particularly focused on?

Jonathan Krim: Thanks for having me, and for all the questions. Two big things to watch: 1) Whether the judge makes any rulings on scope of evidence or of remedy, and whether she rules on federal settlement. And 2) If Microsoft calls Gates, Ballmer et al to the stand, the cross examinations will be fascinating.

Washtech.com: Thanks everyone for submitting so many great questions. We'll be archiving this discussion shortly. And don't forget to check www.washtech.com daily for updates on the Microsoft case.

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