Kaboom!
by Mitch Stone, the Accidental Expert
Three, two, one--kaboom!
In only a few seconds, a familiar 25-year-old feature of the Seattle skyline was consigned to history, reduced to a tangled heap of smoking rubble.
No, I'm not just talking about the Seattle Kingdome. Even as the Kingdome, the baseball barn formerly occupied by the Seattle Mariners, was spectacularly imploded on March 26, charges were being set in strategic locations under a neighboring Pacific Northwest landmark.
Eight days later, the plunger dropped again. Kaboom!
"Microsoft maintained its monopoly power by anticompetitive means," U.S. District Judge Thomas Penfield Jackson ruled in his conclusions of law report in the government's antitrust case, issued on April 3. The decree constituted virtually a clean sweep for the government in its case against Microsoft.
Shares of the company swooned on the news, and the stock markets began to sway to a new bear market rhythm. Neither appear primed to reclaim a more sprightly step any time soon.
The judgment left many of Microsoft stockholders seething. Raging against the Department of Justice, Attorney General Janet Reno, and the government in general, became a blood sport on Internet chat boards. "We need to be sure Gore and the other Clinton cronies are purged from power in the next election," one typically incensed Microsoft stockholder announced on Yahoo.
But to those who have followed the various twists and turns of this case over the years, this entire scenario takes on the dour air of inevitability.
Last November, Judge Jackson handed down his findings of fact in the case, establishing legally what most of us already knew: that Microsoft maintains a monopoly in computer operating systems. Though owning a monopoly isn't in itself a violation of antitrust law, Jackson's findings were so strongly worded, they left little room to doubt what was coming next -- he was almost certainly going to cite the company for abuse of its monopoly power in the next phase of the trial.
Microsoft was wading into deep, mucky water -- apparently much deeper then even the company and its phalanx of crack attorneys seemed to realize.
Optimistic investors continued to hold out hope for a settlement. Judge Jackson went so far as to delay his ruling for several weeks, publicly urging the parties to use the time to good advantage.
It wasn't to be. Microsoft's position was eroding daily. The judge had dealt the Department of Justice nearly all the trump cards, and Microsoft's leadership, accustomed only to the concept of winning, could not seem to wrap their minds around the idea of splitting the difference.
Now for the bottom line. The indignation of Microsoft's stockholders is misplaced. They should understand the blame borne by the company's stiff-necked and conceited leadership in bringing them to this low place.
Numerous opportunities for compromise were shunned in favor of protesting, against all the amassed evidence, that the government, its lawyers and Judge Jackson were wrong, wrong, wrong, and wrong. And Microsoft's handling of the case itself in Judge Jackson's courtroom proved almost laughably ham-handed. Maybe the boys who run this company aren't so golden, after all.
Tragedy is, it didn't have to turn out this way.
The government's antitrust investigation of another technology behemoth, Intel, vanished with nary a trace last year, after the company swiftly agreed to a settlement. Intel is once again free to go about its business without the sword of antitrust hanging over its head. Much to Intel's credit, nobody talks about Intel as a monopolist now.
By contrast, Microsoft has pledged to take their case all the way to the Supreme Court, if that's what it takes to achieve vindication -- and that's far from a sure thing. Either way, an appeal could easily drag on for two more agonizing, demoralizing years.
In the meantime, the stakes continue to grow. Previously, a government mandated breakup of the company--AT&T style--was an idea only posed by industry pundits and smart-aleck columnists. Recent signals coming from the government camp suggest that the imposition of such a drastic remedy now appears to be a real possibility.
Hold onto your hardhats, Microsoft. The next round of charges are already set, and the plunger is poised.
02 May 2000 |
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