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.comment: The Settlement Sucks

No Bright Aspect

November 7, 2001

There are no two ways about it: The settlement that the United States Department of Justice reached last week with Microsoft Corporation is only barely better than the one the parties reached in 1995. Microsoft, adjudged guilty of essentially hijacking the software industry, has agreed not to do it anymore unless it wants to.

The settlement's announcement lit a fire under the tinfoil hat crowd (details here), which was quick to come forward with speculation as to the motives of secretive government officials, the exchange of money, and other fanciful things that have no basis in evidence, let alone fact. The actual explanation is a lot simpler: Microsoft has flummoxed the Justice Departments of two consecutive administrations -- in both cases after the judiciary had decided that the charges against the company were more than valid.

(I'll digress just a bit. Part of the job of prosecutors is to make cases go away. That is why we have plea bargains and settlements. In the current case, the judge strongly encouraged the parties to settle. Any settlement at all provided the government lawyers a tick in the win column, which is paramount to them. Microsoft's lawyers had far stronger motivation to be tough bargainers than did the government lawyers. And if you think that all of this has nothing to do with justice, well, you're entirely right.)

Indeed, the settlement actually has the government agreeing with Microsoft that there is only one operating system in the world today, and that operating system is Windows. It deals with opening standards to the extent that non-Microsoft applications developers can develop for Windows on an even field with Microsoft's own application writers (yeah, right), but makes no provision for other operating systems. Especially unaddressed is the matter of preloads, meaning that computer buyers will pay the Microsoft tax whether they use Microsoft's execrable (and, arguably, excreted) software or not. In its purported attempt to limit Microsoft's monopoly, the settlement in fact codifies it and if anything extends it.

To put it another way, the settlement gives Microsoft everything it could have dreamt of, and more. Justice couldn't have screwed up more, short of rolling up tanks and burning down Redmond and perhaps sending in storm troopers to snatch Bill Gates so as to send him to Cuba. Actually, that might have been a better outcome. Just kidding.

Alas, that's everything nice I have to say about the settlement. I'll stop now, lest my language become intemperate.

No, there's one thing more: The settlement isn't the last word on the matter. There's still time to raise hell about it, and the time is now to do so.

Not Unanimous

Nine of the 18 states that joined in the lawsuit have decided not to sign off on the settlement, at least not yet. Iowa, Connecticut, California, Massachusetts, Florida, Kansas, Utah, Minnesota and West Virginia are pushing for stronger sanctions. This throws the entire case into a state of unprecedented confusion, as the apparently clueless U.S. District Judge Colleen Kollar-Kotelly takes the whole mess down two separate roads -- one for those who settled and one for those who didn't. (Kotelly, whose name is reminiscent of an unfortunate collision between the actor Savalas and the character he played, got herself and the country into this by demanding a settlement. At the time, she spouted a pseudo-patriotic nonsequitur to the effect that we can't possibly beat the Taliban if Microsoft is in court. The least damning thing that can be said about her actions thusfar in the case is that she has demonstrated that she is too fearful of being overturned to be a judge, having taken the path least likely to expose her to scrutiny. She has had little to do in U.S. v. Microsoft, but that didn't stop her from falling short in even those limited tasks. The judge has virtually no experience in business and antitrust litigation, and it shows; she has handled primarily criminal cases since Bill Clinton appointed her to the Federal bench in 1997. Her most famous case before now came when she ruled that the Department of Agriculture could not get rid of nuisance geese without first getting a hunting license. I'm not making this up. In Microsoft, she ordered a settlement, any settlement. And my God -- the government had already won the frigging case!)

The states that wish to press the point must file their papers, which specify the remedy they believe appropriate, by December 7. Microsoft has five days to respond.

Meanwhile, the settlement itself must be signed by all parties agreeing to it, after which it will be published in the Federal Register.

Following Watergate, a law called the Tunney Act was passed, and U.S. v. Microsoft is a Tunney Act case. The law was passed as a safeguard against undue political influence, but its chief feature now is that publication of the settlement starts the clock on a 60-day period of public comment. The supposed goal of this is to let the court determine whether the proposed settlement is or is not in the public interest.

While it is not likely to do any good -- the thinking in legal circles is that the deal is done -- this period of public comment does open the door, just a little. We can be sure that Microsoft will buy every legal scholar it can to provide commentary in praise of the settlement; likewise, we can expect outfits like the one run by Edwin Black (in my view, based on long observation, a first-rate nutcase), Larry Ellison, and the usual suspects to speak out in opposition. The judge has already said that she has decided a settlement is in the public interest, which is to say keeps her from having actually to rule on a case that is demonstrably far beyond her degree of competence. For this reason, it is unlikely that she will look upon the pleadings of the dissident states favorably -- she has already telegraphed that she doesn't want to hear from them.

Nevertheless, a substantial body of public comment in opposition to the settlement might make the judge's shameful actions and Justice's giving away the store a little more publicly embarrassing.