infringer
December 13th, 2004, 03:18 AM
Microsoft Foe Quits Antitrust Crusade--- With Check in Hand
By Alan Murray for the Wall Street Journal
Think of it as Washington's version of a fairy tale. Ed Black, the head of
a struggling computer trade group, spent a decade on a quixotic quest to slay
mighty Microsoft for its antitrust abuses. "A rapacious monopoly," he called
it. The company's behavior is "consistently, constantly illegal." It "steamrollers
companies" and "crushes the few who will not bend to their will." When the government
settled its antitrust case against Microsoft in 2001, Mr. Black said it was
"selling out consumers, competition, and all those who want a vibrant, innovative
high-tech industry contributing strength to our economy."
Well... never mind. Microsoft is still every bit the monopolist it was a decade
ago. But Mr. Black is a changed man. He will personally pocket millions of dollars
as part of a nearly $25 million settlement he negotiated between Microsoft and
his trade group, the Computer and Communications Industry Association. In return,
he will abandon his antitrust efforts against the company.
It's as if Ralph Nader had been bought off by General Motors. And everybody ends up happy.
Mr. Black isn't speaking for the record, in part because the settlement constrains
him, and in part because he wants to keep his head down. But a "senior spokesperson"
for CCIA says re- cent news reports that put his personal take at $9.75 million
are overstated. Those numbers may have come from officials at Nokia, which withdrew
from CCIA in reaction to the settlement. Subsequently, Mr. Black's compensation
was scaled back. But he's still getting a bonus on the order of $2 million,
and his pay is getting boosted from $200,000 a year to $500,000 a year.
If Mr. Black were talking for the record, he'd complain about the attention
given to his settlement, which is tiny in comparison with those Microsoft reached
with companies like Novell, Time Warner, and Sun Microsystems. But of course,
those companies were harmed by Microsoft's actions. Mr. Black wasn't harmed.
Mr. Black would also point out that his little organization was about to run
out of money. With so many companies settling their scores with Microsoft, and
others—IBM, Apple, Sony, Dell—staying on the sidelines, Mr. Black didn't have
the corporate backing to stay in the battle. He'd say he deserves credit for
bluffing Microsoft into paying him millions to pull the plug on an effort that
was sinking' anyway.
In a statement released last month, Mr. Black said he won't recant his many
statements and filings criticizing Microsoft. And his group won't rule out taking
other actions against Microsoft in the future. But that seems unlikely, since
Microsoft is now a member of CCIA and footing the. bills. "Life," said Mr. Black
in his statement, "is a constant reordering of priorities."
For Microsoft, Mr. Black's conversion may signal the near end of Redmond's
12-year battle against anti-trust crusaders. The European Commission's case
could go on for years, but without Novell and the CCIA backing it up, it will
lose some momentum. Real Networks is the only major corporate player still in
the action, and the company says it has no plans to settle. But if the check
is big enough, who could say no? Some might see these settlements as a sign
that the problem has been solved-or perhaps as a sign that there was never a
problem to begin with.
But that's not the way courts on two continents have seen it. In the U.S.,
Judge Thomas Penfield Jackson found Microsoft to be an abusive monopoly, and
the D.C. Circuit upheld that finding. The problem came in fashioning a remedy.
Judge Jackson's approach—to break the company up into two separate units— was
rejected as too harsh. But other remedies have proved toothless. Ultimately,
Microsoft has emerged with few constraints on its behavior, and it has bought
off the complainers, one by one.
The Microsoft Saga serves as a reminder of an important truth: Capitalists,
for the most part, don't care much for capitalism. Their goal is to make money.
And if they can do it without messy competition, so much the better. As long
as it keeps its monopoly, Microsoft can afford to share the wealth with its
onetime rivals. For Microsoft, those fines and payments add up to less than
a year's profit from the operating system. For the others, it's easier to take
Microsoft's money than fight.
So silence is settling over a technology-age battlefield. Once upon a time,
companies' complaints offered assurance Microsoft still faced competition. Today's
calm suggests the opposite: Competitors have given up the fight. That means
now may be the time to start worrying whether consumers stand to suffer from
less competition and less innovation.
Alan Murray is Washington bureau chief of CNBC.
By Alan Murray for the Wall Street Journal
Think of it as Washington's version of a fairy tale. Ed Black, the head of
a struggling computer trade group, spent a decade on a quixotic quest to slay
mighty Microsoft for its antitrust abuses. "A rapacious monopoly," he called
it. The company's behavior is "consistently, constantly illegal." It "steamrollers
companies" and "crushes the few who will not bend to their will." When the government
settled its antitrust case against Microsoft in 2001, Mr. Black said it was
"selling out consumers, competition, and all those who want a vibrant, innovative
high-tech industry contributing strength to our economy."
Well... never mind. Microsoft is still every bit the monopolist it was a decade
ago. But Mr. Black is a changed man. He will personally pocket millions of dollars
as part of a nearly $25 million settlement he negotiated between Microsoft and
his trade group, the Computer and Communications Industry Association. In return,
he will abandon his antitrust efforts against the company.
It's as if Ralph Nader had been bought off by General Motors. And everybody ends up happy.
Mr. Black isn't speaking for the record, in part because the settlement constrains
him, and in part because he wants to keep his head down. But a "senior spokesperson"
for CCIA says re- cent news reports that put his personal take at $9.75 million
are overstated. Those numbers may have come from officials at Nokia, which withdrew
from CCIA in reaction to the settlement. Subsequently, Mr. Black's compensation
was scaled back. But he's still getting a bonus on the order of $2 million,
and his pay is getting boosted from $200,000 a year to $500,000 a year.
If Mr. Black were talking for the record, he'd complain about the attention
given to his settlement, which is tiny in comparison with those Microsoft reached
with companies like Novell, Time Warner, and Sun Microsystems. But of course,
those companies were harmed by Microsoft's actions. Mr. Black wasn't harmed.
Mr. Black would also point out that his little organization was about to run
out of money. With so many companies settling their scores with Microsoft, and
others—IBM, Apple, Sony, Dell—staying on the sidelines, Mr. Black didn't have
the corporate backing to stay in the battle. He'd say he deserves credit for
bluffing Microsoft into paying him millions to pull the plug on an effort that
was sinking' anyway.
In a statement released last month, Mr. Black said he won't recant his many
statements and filings criticizing Microsoft. And his group won't rule out taking
other actions against Microsoft in the future. But that seems unlikely, since
Microsoft is now a member of CCIA and footing the. bills. "Life," said Mr. Black
in his statement, "is a constant reordering of priorities."
For Microsoft, Mr. Black's conversion may signal the near end of Redmond's
12-year battle against anti-trust crusaders. The European Commission's case
could go on for years, but without Novell and the CCIA backing it up, it will
lose some momentum. Real Networks is the only major corporate player still in
the action, and the company says it has no plans to settle. But if the check
is big enough, who could say no? Some might see these settlements as a sign
that the problem has been solved-or perhaps as a sign that there was never a
problem to begin with.
But that's not the way courts on two continents have seen it. In the U.S.,
Judge Thomas Penfield Jackson found Microsoft to be an abusive monopoly, and
the D.C. Circuit upheld that finding. The problem came in fashioning a remedy.
Judge Jackson's approach—to break the company up into two separate units— was
rejected as too harsh. But other remedies have proved toothless. Ultimately,
Microsoft has emerged with few constraints on its behavior, and it has bought
off the complainers, one by one.
The Microsoft Saga serves as a reminder of an important truth: Capitalists,
for the most part, don't care much for capitalism. Their goal is to make money.
And if they can do it without messy competition, so much the better. As long
as it keeps its monopoly, Microsoft can afford to share the wealth with its
onetime rivals. For Microsoft, those fines and payments add up to less than
a year's profit from the operating system. For the others, it's easier to take
Microsoft's money than fight.
So silence is settling over a technology-age battlefield. Once upon a time,
companies' complaints offered assurance Microsoft still faced competition. Today's
calm suggests the opposite: Competitors have given up the fight. That means
now may be the time to start worrying whether consumers stand to suffer from
less competition and less innovation.
Alan Murray is Washington bureau chief of CNBC.