Id, Antitrust, and Elmer's

The government asserts the rule of law: But will it stick in cyberspace?

The Microsoft antitrust imbroglio is sounding like the ugly end of a bad marriage. The U.S. Justice Department blasts every move the company makes as yet another example of its endemic lawlessness. Microsoft, on the other hand, seems determined to maintain its “look and feel,” offering scant indication that it accepts even a sentence of Justice’s (and now Judge Jackson’s) interpretation of its business practices. It’s like Microsoft is from Mars and Justice is from Venus.

As of June, Microsoft was trying to preserve its opportunity to appeal Judge Jackson’s ruling before the Circuit Court, where it was previously successful in fending off efforts to regulate its modus operandi. The government would rather “expedite” any appeal directly to the Supreme Court, where it feels it has a better chance to win. And if it wins and prevails over Microsoft’s appeals, the government will enforce the breakup of the company and ensnare both halves in legal restrictions that will emphatically end “business as usual” for the Redmond giant. The marriage will be over; newly empowered and righteous, Justice will move on, possibly to engage in matrimonial war with the credit card twins, Visa and MasterCard. What if Microsoft is ultimately victorious? Well, Justice will surely not let this relationship go on peaceably. Further suits and injunctions will follow.

If this were a Woody Allen movie, the director/actor might turn to psychoanalysis — maybe even Sigmund Freud himself, walking out from behind a potted plant — for advise and counsel about resolving this tortured affair. Freud might then rattle on about the id, ego, and superego. We are witnessing a battle, not only of egos, but of conflicting ids: primitive instincts that are, according to Britannica.com’s definition, “inherited and present at birth … oblivious of the external world and unaware of the passage of time.”

The Justice Department’s id, of course, is the rule of law. Nothing — not algorithms, not embedded browsers — can be above the law. The “platform” of our government is the law, with the Constitution as its living contract. And there can only be one law: Justice has proved it will act, with bitter determination, against organizations that endanger the law’s primacy. Antitrust law, flowing out of the Sherman Antitrust Act of 1890, is pretty young by case law standards. It’s hard to discern a pattern; different circumstances and economic or political pressures shadow each decision. I have trouble seeing how the Microsoft trial is “just like the AT&T situation,” as we hear the government say frequently. The circumstances, as well as the probable effect of the proposed breakup remedy, are worlds apart.

The thread that seems to run through the antitrust cases is this: Once an entity becomes so powerful that it effectively dictates “the law” — in other words, positions itself as the platform from which it can extra-legally regulate nearly all of an industry’s activity — Justice will act. In the bare-knuckles world of the software industry, Microsoft succeeded in making Windows more than just a desktop operating system; it became the hub of other software “laws” (APIs) that competitors must adhere to, or face doom. Microsoft’s Office suite vanquished a once-competitive desktop productivity software industry; integrated with Windows, it became the next expansion of “the law.” Justice feared that Internet Explorer would extend the company’s dominating platform into cyberspace, certainly well ahead of the government’s establishment of its own legal corpus there.

Never mind that most consumers view Microsoft’s “law” as a beneficial evolution: But in Justice’s view, if our economic system is to fall under the rule of law, a single entity can’t have unrestricted power, no matter how consumers feel. I am obviously stepping over the government’s specific allegations regarding actions it alleges Microsoft took to thwart Netscape. But it took a far more serious vision of Microsoft’s danger to the rule of law to elicit such an aggressive breakup remedy. This case has never been about consumers, and as time went by, only broadly about software industry competition. It became a battle over how far a company can extend its hegemony to rule as the de facto lawmaker of the economic landscape.

Ego Bruising

Along with its terrifying nightmare of Microsoft power, the government has been troubled by perceived disrespect. Despite the high-tech bonanza going on just across the river in Northern Virginia, Washington, D.C., has been stung by a feeling of irrelevance ever since … well, ever since Netscape helped to turn the Internet toward commercialism and cyberspace and away from its roots as a government research network. Since the ruling, it’s been hard to avoid “revenge of the Beltway” crowing. Thomas Friedman, author of the 1999 best-seller The Lexus and the Olive Tree: Understanding Globalization (Farrar Strauss & Giroux) and an influential Washington-based columnist with the New York Times, wrote that the ruling was “an indictment of the attitude of the high-tech community in general toward government, but [was] certainly an indictment of the particular attitude and arrogance of Microsoft. Bless Jackson’s heart for that.” His June 9 column goes on to scold the ungrateful among his readers, reminding them of how important the federal government has been to the development of technology — and how important it will be in defending the public from technology, or at least bad actors using it. “We are entering a whole new era of cyberspace, which is going to make governance of things we cherish, and the enforcement of even some basic laws, much more difficult … . In the age of cyberspace, government is going to matter more, not less.”

So Microsoft is paying the price, not only for its strangely ill-conceived and inarticulate defense, but also for the daring of a cyberculture that is breaking down barriers that have shielded industries, national borders, tax regulators, and legal systems. Microsoft’s mass-market bundling and pricing clearly began the process of letting high-margin air out of the balloon in many industries, including software. Its attempt to acquire Intuit a few years back scared the willies out of the banking industry. But out of Microsoft’s control e-commerce has extended this process, putting all high-cost “intermediary” players on notice that their toughest opponents may bear no resemblance to traditional competitors.

The irony is that Microsoft, of course, is hardly Napster; the company has always been far to the opposite end of the spectrum from deep cyberculture, which mostly considers Microsoft the evil empire. For the record, CEO Steve Ballmer declared on PBS’ The NewsHour with Jim Lehrer that “I absolutely support the antitrust laws in this country. I believe in them very passionately.” Looking as though he felt disrespected himself, Ballmer added, “Our company is a law-abiding company who will absolutely comply with the laws in this country.” You would think that Microsoft would be just the kind of ally the government would want as it ventures into cyberspace.

Ultimate Stickiness

Microsoft’s id flows out of its focus on the operating system — and out of the business of knocking in a few teeth to win out over a best-of-breed world. One of the primary ingredients of any operating system is glue: The OS is supposed to stick the right things together so that software can talk to hardware and users and applications can interface with underlying systems. The more the OS can keep users “stuck” within the system, the better it will function and perform. The company’s early efforts never won the respect of the software community. Now, with Windows 2000, even competitors such as Sun Microsystems’ chief scientist John Gage had to grudgingly admit (during JavaOne): “The adults have taken over.”

With Windows 2000, the vision of the OS has grown considerably — and would absorb even more of the world’s tangled chaos of software standards, versions, and middleware if Microsoft had its way. But it won’t, regardless of how the case turns out. The OS is a role player; the Internet is governed by its own unregulated hubs of stickiness. And information is the primary currency, not subroutines. Only one system has ever effectively regulated the flow of information without simultaneously strangling it: our legal system. But will the government have the prowess to make its coming assertions of legal and regulatory order in cyberspace “sticky” enough to prevent e-business from flowing around its presence — as it has around Microsoft’s desktop dominance?