Is Microsoft Corp. paying a price for becoming too successful or too powerful?
In U.S. District Judge Thomas Penfield Jackson's recent findings of fact in the Microsoft antitrust lawsuit, the software giant was deemed a monopoly. Further, the judge held that Microsoft had abused the monopoly and that consumers had been harmed. The ruling, stunningly sympathetic to the government's case, renewed speculation of the possibility of a settlement. Possible remedies could include a breakup of the company.Although the judge's findings are one step in a long-term legal process, labeling Microsoft as a "monopoly" certainly bolsters the government's position while creating a huge legal hurdle for the company to overcome. Settlement would appear to be the wisest course at this juncture.
Absent a settlement, this case could grind on for years. Microsoft has the resources to wage a rigorous legal fight, but it is questionable whether the outcome would be preferable to that achieved through a negotiated settlement. If Microsoft digs in for a long-term battle, taxpayers at some point must ask themselves whether this is a battle worth fighting.
Ideally, the matter would be settled in a manner that protects consumers yet minimizes fluctuations in the technology-heavy NASDAQ composite index. Microsoft appeared to weather the initial day of trading following the issuance of the court findings, with stocks falling Monday but not as much as some analysts had expected.
Absent a settlement, the legal battle could drag on for another two years or more. If Jackson eventually rules against Microsoft, it can take its case to the U.S. Court of Appeals, where judges may be more sympathetic. The longer the issue kicks around the judicial system, rapidly evolving technology could render any legal violations irrelevant.
Given the strident tone of Jackson's findings of fact, it would appear that he may eventually rule that Microsoft violated antitrust law. Entering a settlement now would hedge against the prospect of a final ruling against the company. In other words, retaining half of a gargantuan loaf appears a far better alternative than salvaging crumbs.