This Time It’s Personal

The birth of the information sector set the stage for a second cycle of market-cop involvement which looked very much like the first. In 1990, Microsoft had been consolidating its monopoly of the platform market and leveraging its way into various applications markets.

The challenge fell to Klein, who had one great time-saving device that his predecessors had lacked. The consent order that he had personally helped convince Judge Jackson to approve gave the government a con­tract with Microsoft. Klein didn’t need to prove a complex antitrust vio­lation. He sued Microsoft for violating the order’s terms by bundling Internet Explorer with Windows. Microsoft claimed that the products were integrated, not bundled; the order’s plain language gave it “unfet­tered liberty” to integrate products at will. Klein was not amused. He saw this dodge as an end run around the order’s intent—an order in whose ability to protect the public he had taken a personal stake.

Judge Jackson shared both Klein’s concern and his personal stake. By the end of 1997, he had ruled against Microsoft, explaining that: contrary to Microsoft’s claim to absolute discretion to dictate the composition of its operating system software, it appears not unlikely, as a matter of contract, that Microsoft’s “unfettered liberty” to impose its idea of what had been “inte­grated” into its operating systems stops at least at the point at which it would violate established antitrust law.²⁵

But he didn’t stop with a mere explanation.

How would computer scientists feel about this ruling? Did Jackson ignore one of their basic tenets? On the surface, it looked as though he had frozen the translation frontier and announced that Internet Explorer would never be able to migrate down into Windows. But in reality, all that Jackson had done was insist that Microsoft give consumers a choice. If consumers overwhelmingly preferred the integrated product, the inde­pendent set would soon fade into oblivion and the evolution of the trans­lation frontier would proceed apace. What might make consumers prefer one set over the other? Well, since it would certainly be cheaper and more convenient to buy them together than separately, the key issues would likely be usefulness and product quality. As the Internet moved into more and more areas of computing, Internet Explorer’s usefulness would increase. Fewer and fewer consumers would configure computers without browsers. Product quality, though, would flow from the tenets of evolutionary software design. If Internet Explorer were ready for migration down into the platform, the integrated product would be seamless and efficient. If, on the other hand, Internet Explorer’s migra­tion were premature, its bugs could threaten the working of the entire platform, complicate fixes and upgrades, and generally frustrate con­sumers.

But Microsoft wasn’t interested in playing by the rules of the com­petitive marketplace. Jackson’s order meant that Microsoft might have a harder time freezing out Navigator—and that was, after all, Microsoft’s entire strategy. So Microsoft devised a curious tactic, one that only a company with a monopolist’s confidence would conceive, and one that only a company with a monopolist’s paranoia would dare. Microsoft complied with the letter of Jackson’s order. It released independent ver­sions of its two products. There was only one slight problem. They didn’t work. Microsoft foisted broken products on consumers to show Jackson that he had no business poking around its product-design decisions. What Microsoft had lost in unfettered liberty it reclaimed as unfettered chutzpah. No one was fooled. The San Jose Mercury News termed it “compliance with a raised middle finger.”²⁶

Jackson was not amused. In open court, he asked Microsoft’s David Cole: “It seemed absolutely clear to you that I entered an order that required you to distribute a product that would not work? Is that what you’re telling me?” Cole replied: “In plain English, yes... We followed that order. It wasn’t my place to consider the consequences of that.”²⁷ Microsoft had just raised the personal stakes for Jackson.

But Microsoft did more than just raise its middle finger and the per­sonal stakes. It also took the appropriate route to complain about a ruling that it considered unjust by appealing. The case went back to the same three judges on the D.C. Circuit with whom Microsoft had been lucky before. Its luck held out. The appellate court ruled that Microsoft had not violated the terms of the consent order, overruled Jackson, let Microsoft ship Windows 98 as intended, and fired Lessig.

A word of warning: Watching a trial can make you feel dirty. The trial itself may be a clean show in a pristine courtroom, but that show is only staged late in the game. Most of the work goes on long before the trial, during “discovery,” which is the litigation equivalent of a strip search. During discovery, an opponent pokes and prods, inquires and investi­gates, and asks questions that must be answered, in addition to forcing busy executives to give up days upon days of valuable time; refusal to cooperate is likely to lead to being held in contempt of court. Microsoft and its key executives undoubtedly felt violated as government lawyers seized and reviewed years of internal communiques and e-mails, and forced them into videotaped depositions for hour after hour. The gov­ernment then selected its personal favorites and put on a show, staged by the talented David Boies. The voyeurs swept in—and, I confess, I was among them—to learn what the government had gleaned from its search and what had actually been going on for the past few years of the infor­mation sector.

But the most important of the voyeurs resided in the press corps. The misconception of network economics in the chat rooms, after all, could­n’t have materialized in a vacuum. The press supplied day-by-day details and revelations and introduced the various characters in this morality play: lead government litigator David Boies, lead Microsoft litigator John Warden, the various witnesses with whom they sparred, and Judge Jackson himself. We met them all the same way that we’d met Johnny Cochrane, Kato Kaelin, and Judge Lance Ito half a decade earlier: through the good graces of the press. Press coverage was abundant. Joel Brinkley and Steven Lohr, who covered the trial for The New York Times, for example, prepared an anthology of that coverage. Between mid-October 1998 and mid-June 2000, the Times dedicated enough ink to the trial to fill a 325-page book.²⁸ And that was just the Times.

Then there was Ken Auletta. He was privy not only to the trial per­formance, but also to the Judge’s thinking. While the trial was pending, Jackson granted Auletta several interviews—an apparent breach of judi­cial ethics that would come back to haunt him later. Auletta combined the insights gleaned from these interviews with his own observations of the trial to compose World War 3.0, a comprehensive description of the players and the events, as they unfolded both in the courtroom and across an anxious world tuned in to that courtroom.²⁹ He and his col­leagues in the press corps allowed us all to become eager voyeurs to the very last “trial of the (twentieth) century.”