Microsoft won and everyone else lost

The Microsoft antitrust settlement is a far cry from the earlier court order

to split the company into two entities. Compared to that, Microsoft got off with

little more than a slap on the wrist. But at the same time, the agreement does

put some limits on what Microsoft can do, especially in the area of using its

monopoly in desktop OS software to control what its customers can and cannot do.

Being able to buy a PC with both Windows and Linux OS and applications

pre-installed will be a major plus, especially since installing Linux still

requires a degree in computer sciences. Once installed, running applications

like Sun's StarOffice is as simple as running Microsoft Office.

Perhaps the biggest surprise is that the two parties, which engaged in such

bitter legal warfare for four years, were able to agree on anything. It

certainly didn't seem the two sides were going to settle last month. But a lot

of things have changes in the past two months that created an environment for

achieving agreement at level where both parties had strongly opposed compromise

before. Some of those changes included:

* First and foremost, the US Supreme Court slammed Microsoft by not even

wanting to hear the company's appeal to the Appeal's Court ruling that it was

operating an illegal monopoly. All of a sudden, Microsoft found itself in legal

quicksand.

* Equally important, Microsoft was facing a new trial judge, one who had

sided with consumers on several occasions. It must have scared the daylights out

of Microsoft.

* There was a new President and a new Attorney General, both of whom wanted

nothing better than a settlement.

* And there was a new team of government lawyers. David Boies, who had

devastated Microsoft's defenses during the trial was out of the picture.

* Also helping the push towards a settlement was a slumping economy. The

luxury of attacking one of the great engines of innovation and industrial might

didn't seem like such a politically sound idea any longer.

The pressure to settle only increase on September 11 when national priorities

changed dramatically in the wake of the terrorist attacks. Whether the

settlement agreement is just, effective, etc. is a mute point to debate. Only

time will tell.

Certainly, the US government felt it had struck a great deal with Microsoft

back in 1994 when it concluded the first antitrust case against the company. As

it turned out the deal was about as full of holes as a pound of Swiss cheese.

And Microsoft proceeded to exploit every one of them and ignore everything else.

On paper, the current agreement appears more restrictive. But the agreement

does little or nothing to prevent Microsoft from hooking more and more

competition-killing functions into Windows. And with that, the government has

essentially certified the company's ability to do as it pleases in the

marketplace. Gut feeling: History just repeated itself: It's a good deal on

paper. But Microsoft won and everyone else lost.