The anti-trust case is based on guessworkby Jonathan Rauch / July 20, 2000 / Leave a comment
Published in July 2000 issue of Prospect Magazine
Before i begin I should mention that I hate Microsoft’s products. Windows is the first product I have owned (since my 1969 Chevy Malibu) which regards breaking down (crashing) at critical moments as its sacred obligation. As for Word-I’ll just say that the individual who thought up the little paper-clip guy deserves to be dipped in honey and left on an anthill in the Mojave Desert. The point is that I have no tears to shed for Microsoft. Judge Thomas Penfield Jackson’s decision to split the company in two might prove to be a good thing. Even if it were not a good thing, it couldn’t possibly happen to a nicer bunch of people. However, it is impossible for a nonlawyer to look on this case with anything other than misgivings. For a lawyer, the case poses no deep problems. We have a process, and we’re sticking to it. A normal person, however, might wonder whether the legal process has the faintest notion of what it is doing. To see why a normal person is right to wonder, I refer you to a book called Jurismania: The Madness of American Law, by Paul Campos. It begins with a simple but important observation. The further a civil case gets in the legal system, the closer a call it probably is. The obvious cases-where the facts and the law are plainly on one side or the other-are weeded out early. Many cases which reach the trial phase are thus fairly close, in the sense that a reasonable judgement could go either way. There are plausible arguments on both sides. And many cases that are decided at the appeal level are very close. They present difficult legal or analytical questions, or they pit core principles of law and morality against each other. Such hard cases must be decided arationally, which is not the same as irrationally. That is, reason and evidence can take you a fair distance, but cannot clinch the argument. If Campos is right, modern law has something in common with the oracle of ancient times. If intractable questions must be decided, dressing up some fairly intelligent person in a black gown and requiring him or her to sit on a pedestal and conduct an elaborate ritual which ends with the intonement that The Law requires this or that, is not a bad method. We have to decide. On these terms, Jackson conducted the Microsoft antitrust trial quite admirably. Last year, I spent a couple of days covering the trial, and I had no trouble discerning that Jackson had already mostly made up his mind: he thought Microsoft’s case was a turkey. A good judge makes his conclusions seem obvious, dictated by The Law itself. Here again, Jackson excelled (who needs equivocal oracles?). His findings were without ambivalence: Microsoft is a monopolist whose brutal tactics hurt consumers by quashing innovation. But the Microsoft case is anything but obvious. An anti-Jackson could have written equally ringing judgements in Microsoft’s favour. For example: Were consumers hurt? A few years ago, I paid $40 for Netscape’s Navigator browser. Microsoft now includes a Netscape clone in Windows, for free. If I still prefer Netscape’s browser (as I do), that is now also free. Microsoft gave itself a convenience edge, but it did nothing to restrict the availability of Navigator for anyone who wanted it. So Microsoft’s nastiness gave me more choices at much less cost. On the other hand, Microsoft’s tactics were not charitably intended. They were meant to obliterate Netscape. So was this a predatory tactic which hurt consumers by trying to kill off competition? Or was it a boon, because objectively it made consumers better off? No law could decide that, even in principle. Was innovation squelched? “Consumers will be hurt in the future,” said the judge. Maybe, maybe not. The US government’s claim-that the 800-pound Microsoft gorilla discourages new entrants-is plausible. If Microsoft gets away with its conduct, we might have fewer Netscapes. But Microsoft is itself an innovator. If the US government gets away with its conduct, we might have fewer Microsofts in the future. Does Microsoft control the market, or does the market control Microsoft? For the US government and the judge, Microsoft’s ruthless competitiveness, plus its huge market share, showed that it is determined to strangle rivals. For Microsoft, that same competitiveness showed that Microsoft was running scared in a fast-changing market. The remedy issues were mushier still. Break up Microsoft? How many pieces-two or three? (Economists disagreed, but they helpfully agreed that choosing the wrong answer might make things worse.) Do we know that such radicalism is necessary? Might restraints on Microsoft’s conduct, plus a broadening of access to the Windows code, do the job with less risk? Here, only one thing is clear. This decision cannot be made rationally on the basis of law and the currently available facts. It is all guesswork: about how the marketplace might look in the future, about how companies might behave, about how technology might change. If the US government cannot show that present-day consumers have been hurt, it should not go to court and seek to break up a company, even a bullying one. If you’re not sure that something is broke, don’t fix it. It’s important for businesses to have a clear idea of what is legal and what is illegal. The Microsoft case subtracts from clarity. Many people will disagree. They will say that antitrust law will always be messy and that messiness is a small price to pay. They may be right. But let them be clear about what the law is doing here: whistling in the dark. The process is fair, and possibly necessary. But it is not rational.