Wisdom Overrules Zeal in Microsoft Case

Finally, the first good decision has been made in the Microsoft case. Actually, it may be the second good decision in as many weeks, given the resignation of chief Microsoft hunter and Assistant U.S. Attorney General Joel Klein (who by now finds himself buried in job offers, no doubt).

However you count it, the U.S. Supreme Court did the right thing Tuesday by declining an immediate review of the Microsoft antitrust case. The pleas from the Department of Justice (DOJ) to bypass the appellate court and rush to the top of the judicial mountain were all but baseless. Thank you, justices, for restoring the proper perspective.

What National Interest?

In order to get the Supreme Court to hear the Microsoft appeal now, the Justice Department had to persuade the court that the antitrust case was an urgent matter involving the national interest — one that could not go unresolved without causing harm to the country. Only one justice bought that argument, citing the speed of technological change.

Not so fast, the other eight justices said. If time were indeed of the essence, then why did the DOJ waste a good three months by tossing the ball to the high court just as the jurists were heading out the door for summer vacation?

Instead of expediting the appeal, the Justice Department managed to throw it off course. Sure, the appellate court made a few preliminary moves — like deciding that a full bench will hear the appeal rather than a three-judge panel. But a season has come and gone with what amounts to no progress.

A Good Stall

The outcome of this delay is good for Microsoft. The appeals court has backed the Redmond, Washington tech giant in the past. That’s far from a guarantee that it will do so again, but Microsoft will almost certainly be more comfortable in a court of appeals, arguing the practical ins and outs of doing business as the most powerful software company on the face of the earth, than before the Supreme Court, waging a philosophical and legalistic battle of titanic proportions.

In fact, Microsoft and the DOJ can’t even agree on what they disagree on — which is another reason to keep this case on track. Microsoft says there are 19 matters of technology and law that need to be resolved, while the Justice Department says that just five issues are on the table. If nothing else, maybe the appellate court can focus the discussion a bit.

With the prospect of a court-ordered company breakup looming, Microsoft has found a way to move forward, revving up its .NET initiative to rent software via the Web and making modest inroads in the high-speed Internet access and interactive TV markets.

The company undoubtedly has a contingency plan that spells out what it will do in the event of a loss at the Supreme Court. But with that plan safely tucked away — probably for at least another year, or more — Microsoft seems to be getting back to its main business of developing technological innovations.

Right Answer

What is most important is that the Supreme Court has taken a cold, hard look at the Microsoft case — which became something of a crusade inside Justice — and found that it does not merit handling as a national emergency.

The Supreme Court routinely takes six months to consider cases that hinge on a single point of law. Could the justices have managed to absorb two decades worth of technology information in order to reach a decision in the current Microsoft case in a single session? Unlikely, at least not without bumping everything else off the docket. The court’s decision removes the aura of urgency and paves the way for slower, more cautious deliberations.

Microsoft President and CEO Steve Ballmer issued a public sigh of relief, but there is no justification for over-confidence. Whether the chance to catch its breath will help Microsoft in the long run is debatable. The company’s prior victory in the appeals court is history, and it may not repeat itself.

Still, it is almost certain that the case that emerges on the other side of the appeals process will be much different from the one going in. The appeals court has an advantage here — the judges can rest assured that their word almost certainly will not be the last one. They should view their task as one of clarification and should make it their goal to hand down a decision that the Supreme Court can handle — on its own schedule — when the time comes.

A victory for Microsoft? Maybe. But more to the point, a victory for common sense. Microsoft’s practices may indeed be destructive to competition and cause harm to small software companies. But even when viewed from the most anti-Microsoft position, the problem does not come close to constituting a national emergency. What is more important for the country — in the long run — is that the complex antitrust issues in the Microsoft action be decided with the utmost objectivity. We may have to live with the fallout for a long time to come.

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