CLOSEClose Law.com Menu
 
X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
George Orwell once remarked of an idea that it was so foolish, only an intellectual could support it. Judge Thomas Penfield Jackson’s judicial scheme for running Microsoft after the breakup is so implausible that only lawyers could have devised it. The ultimate effect for the half of Microsoft dubbed the “operating systems company” will be to convert the company into a quasi-public utility. Assuming the company survives, it will soon bear all the reliability of Amtrak, and the innovative energy of the U.S. Postal Service. Most of the public attention to Jackson’s June 7 order has centered on its provision dividing Microsoft into two separate entities: the operating systems company and the applications company. But divestiture is only the first section in the order. The rest prescribes how Microsoft must run itself in the coming years. Having found Microsoft guilty of antitrust violations, Jackson treated Microsoft like a school system found liable for racial segregation. The order shows that courts are as ill-equipped to run software companies as they are to run school systems. The conceptual premise of the order is that software is a natural resource, like water or gas. So Microsoft must license Windows “pursuant to uniform license agreements with uniform terms and conditions and shall not employ market development allowances or discounts.” Uniformity might make sense for water. But marketing software is more complex. Companies enter into strategic alliances, sometimes distributing their software for free, sometimes trading it for cross-licenses. Using the same mentality, the order requires Microsoft to reduce the royalty paid by manufacturers who choose to delete features from Windows. The reduction must be the numerical ratio of bytes of the deleted feature to the bytes in the Windows program. In short, software is fungible and marketable by the byte, just as water is marketable by the gallon. To the judge and those who assisted him, the fact that some features are more valuable than others just doesn’t compute. The operating systems company is also prohibited from developing or modifying new versions of the Microsoft Internet browser, thus ensuring stagnation and precluding any improvements to meet competitive challenges. Well, water is water. Who needs to improve a natural resource? The order requires Microsoft to create a “secure facility,” where hardware and software companies can “study, interrogate and interact with” the source code of the operating system. The language of this provision is rich with irony. A facility is deemed “secure” where competitors will have free access to Microsoft’s trade secrets. And only a lawyer would think of using the discovery term “interrogate” in connection with examining source code. The muddy footprints of lawyer-think are most manifest in the section entitled “Internal Antitrust Compliance.” This section establishes a “compliance committee,” somewhat akin to neighborhood watch committees in Cuba and the old East Germany. Every manager, platform software developer and employee involved in relations with manufacturers or vendors must certify in writing to the committee that he or she has read and understands the final judgment — a tall order for law professors, let alone software developers. More, each must certify that he or she understands that his or her failure to comply with the order may result in a criminal conviction. The committee must establish a means by which employees “can report potential violations . . . on a confidential basis.” Machiavellians will find ratting on their rivals a wondrous vehicle for ascending the corporate ladder. The order permits representatives from the Justice Department and the 19 state attorneys general to interview Microsoft’s employees “without restraint or interference” from the company. The order allows the employees “to have their individual counsel present.” It will doubtless comfort company software designers, and spur their creative juices, to know that whenever federal or state authorities wish to interrogate them, they will be allowed to pay to have their own attorneys present. The compliance committee must preserve “for a period of at least four years” the e-mail of all Microsoft managers engaged in software development, marketing and sales. The chaotic process of software creation usually involves developers working at different stations, communicating back and forth, in candid, sometimes ribald, fashion. It’s not difficult to predict the kind of bland fare that will be exchanged among future Microsoft employees. No one will want to do or say anything likely to land them before the compliance committee, even with the right “to have their individual counsel present.” It is possible that a law firm could conduct its business under these conditions. Lawyers are trained to understand turgid documents such as Jackson’s order. Lawyers are conditioned to write and speak for the record, knowing that their words may be used in future proceedings. Lawyers are used to interacting with other lawyers in adverse settings. Software developers are not. Corporate automatons may survive under these strictures, but creative spirits won’t. And they won’t try. They’ll go elsewhere. The demand for software is too great, the range of opportunity too vast, to expect ambitious young developers to choose to work under these conditions. Software is different from oil, tobacco or aluminum, all subjects of past antitrust landmarks. Software does not exist in nature. It cannot be drilled or grown or mined. It can be created only by untrammeled individual mental energy. In the closed atmosphere of Judge Jackson’s order, there is no oxygen for creators to breathe. That is why the most significant portion of his judgment is not the divestiture provision, but the remainder. Whether Microsoft is one company or two, it can still thrive. After Standard Oil was broken up, the constituent parts soon controlled more market share than the old solitary monopoly. Divestiture merely cuts Microsoft in two. The rest of the order suffocates it. Lawrence J. Siskind, of San Francisco’s Harvey Siskind Jacobs, specializes in intellectual property law.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.