CNBC reports on the Microsoft ruling from the Nasdaq MarketSite in New York
The U.S. Court of Appeals in Washington, D.C. Thursday reversed the judge's famous decision that Microsoft be riven into two companies as a remedy for anti-competitive practices. More damning for Jackson: the court found his public statements during the trial violated ethical guidelines.
The court did affirm the spirit of Jackson's conclusions — that Microsoft does have a monopoly in the market for computer operating systems and violated U.S. antitrust laws. But Jackson's radical solution of splitting up Microsoft looks to be dead, and the life and career of the white-haired bear of a district court judge will now be forever tainted by the appeals' court opinion.
What went wrong?
The short answer is, he was seduced by the siren call of the media. Jackson was not the first (anyone remember Lance Ito?), nor will he be the last. But his was a particularly benign form of narcissism. He didn't allow cameras in the courtroom; he had no desire to see his face on television. As the antitrust trial of the century began two years ago, he was so skeptical of the press that they were refused special accreditation and had to queue up for hours to sit on a couple of rows of hard benches — first come, first served.
Then the seduction began. The lure of seeing his opinions printed verbatim in the New Yorker and the Wall Street Journal would be a heady tonic for anyone who moves in the power circles of Washington D.C., let alone a district court judge in the autumn of his years. Jackson may well argue that he simply could not contain himself; his rage at the disingenuousness and the arrogance spewing forth from the Microsoft bench day after day was as ill-disguised inside the courtroom as out — more than once he called a recess, red-faced and practically spitting, to compose himself.
After he'd declared Microsoft a monopoly and in violation of antitrust laws, there were signs that Jackson was bone-crushingly weary of it all. He'd been on Microsoft's case, in one form or another, for over five years now. His remedy ruling was effectively a one-fingered salute to the appeals court: if this is wrong, it said, don't bring it back to me. He must have known they'd take the bait. It didn't matter: his point had been made, and made loudly.
A kinder, gentler Microsoft?
In the long run, that's probably about as much significance as the Microsoft antitrust case will have. The life is out of the government side now; trustbuster supreme Joel Klein and prosecutorial machine David Boies both left it behind for better-paying pastures. In the hands of John Ashcroft, the case is a toothless embarrassment. Look for the Justice Department to settle as soon as possible with minimal punitive action (such as a fine that looks tough but really represents 1% of Bill Gates' net worth). The 19 states also bringing suit might last a little longer, and they might force some serious cash out of Microsoft's coffers. But even the most rabid State Attorney General will blanch at the idea of going back into court, especially with such a legal jumble of a ruling (would we have to have a rerun of the whole trial, or just the remedy phase? Looks like it's up to Jackson's successor to decide).
That doesn't mean that nothing changed. Look at Redmond these days and you'll see a kinder, gentler Microsoft. Many of the players who earned Jackson's opprobrium are gone; even Gates has receded under the considerable shadow of CEO Steve Ballmer. Windows XP, due out this fall, is much more respectful of non-Microsoft software than its predecessors (they've made it very easy to choose Netscape as your default browser, for example). Dubious add-ons like the "smart tags" that linked words to websites chosen by Microsoft have been quietly ditched.
With the X-box games console, Microsoft has entered an arena of giants like Sony and Nintendo who will not lie down and die; Redmond may well get its butt kicked here. Back in the software division, the only attempts to squish competitors are through ineffectual press releases. Heck, they're even using open source software these days.
How much of that is a result of the trial? It's hard to say. But Microsoft was never an intentional ogre; it was just a company that grew very big, very fast, very aggressively and never had any adults around in the playground to bring it down to size. Jackson correctly surmised what was necessary: someone needed to beat Microsoft's head against a brick wall repeatedly and remind it of the existence of the rule of law. He took on the role, and the official branding of bias that comes with it. The payoff will take a little longer. If Microsoft really has turned over a new leaf, Silicon Valley may one day build statues in his honor.