The Microsoft Saga

by | Oct 6, 2000

In a decision generally hailed as a victory for Microsoft, the Supreme Court rejected the government’s plea to hear a direct appeal of the government’s Antitrust case against Microsoft. In April, Judge Thomas Penfield Jackson ruled that Microsoft had violated Antitrust law and ordered that the company should be broken up. The decision was stayed […]

In a decision generally hailed as a victory for Microsoft, the Supreme Court rejected the government’s plea to hear a direct appeal of the government’s Antitrust case against Microsoft. In April, Judge Thomas Penfield Jackson ruled that Microsoft had violated Antitrust law and ordered that the company should be broken up. The decision was stayed pending Microsoft’s decision to appeal the ruling. Wanting to break Microsoft up as quickly as possible, the Justice Department had pleaded with the Supreme Court to bypass the appeals court, review the case quickly, and uphold Judge Jackson’s decision.

The Supreme Court’s decision appears to be a victory for Microsoft for two reasons.

Firstly, the United States District Court of Appeals (which will now hear the case) has generally been more sympathetic to Microsoft’s position and is likely to take special consideration of the many procedural irregularities that Microsoft lists in its appeal.

Secondly, any postponement of the break-up order will allow Microsoft to continue as a single functioning entityat least for the moment–and will likely see final decision on the case rendered under a new administration. Microsoft hopes that if George W. Bush becomes president, the Justice Department will be less viciously opposed to business than it is under the current administration.

While the immediate prospect of Microsoft gaining breathing room from the Jackson decision may seem encouraging, neither justice, Microsoft, nor the American public are served by the Supreme Court’s decision.

Should Microsoft win its appeal, as it has before, it is likely that the government will then take the case back to the Supreme Court, further postponing final resolution. This will plague Microsoft’s efforts to continue developing its products, leave the judicial Sword of Damocles hanging over its head for possibly several more years, and allow the Antitrust poison to continue festering in the justice system.

The general public–which the government alleges it is protecting–will suffer in many ways.

While the threat of government action remains, so does a long-term strain on the company’s resources. Computer users–including those who boycott Microsoft products–will suffer as one of the great innovators is handicapped in the marketplace, its time, money and intellectual energies diverted from creative and productive activity into legal self-defense.

One must also consider effects of the pressure exerted on Microsoft’s stock price while the unresolved case creates uncertainty about the company’s long-term future. Anyone with an interest in Microsoft’s stock price, from individual investors to everyone whose retirement funds rely on the stock market’s performance, will suffer.

The Supreme Court would have done better to hear the case quickly, and overturn it just as quickly, to erase the gross injustice of penalizing a company for the crime of doing business superlatively.

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Andrew Lewis is a senior writer for the Ayn Rand Institute in Irvine, Calif. The Institute promotes the philosophy of Ayn Rand, author of Atlas Shrugged and The Fountainhead.

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