Old rules may not fit new computer game Microsoft: Antitrust lawsuit could help define meaning of law for rapidly changing technology.

May 19, 1998

THE LAWSUITS that the U.S. Justice Department and 20 state attorneys general, including Maryland's, filed against Microsoft Corp. loom as one of the largest antitrust battles to shape this country's economy since Standard Oil was forced to split in 1911.

The legal battles are bound to test the law on Microsoft's efforts to use its domination of operating software to its own advantage in generating Internet software revenue and producing Internet sites. Unless the parties settle, they are likely to spend millions of taxpayers' and shareholders' dollars.

A judgment or settlement could rearrange the computer business as drastically as the 1982 consent decree settling an AT&T suit that altered the telephone industry. Or the lawsuit could fail as miserably as the Justice Department's struggle against IBM, which was dropped unceremoniously in 1982 with nothing to show for 13 years of effort. The computer industry that IBM then dominated changed to IBM's disadvantage, not from any lawsuit but from changing technology, which allowed other producers to compete, and a contract negotiation in which a nerdy kid from a little company called Microsoft outsmarted IBM's management.

Some state attorneys general may have difficulty explaining why this exercise is in the interest of consumers despite the increasingly institutionalized role of states in antitrust litigation in the past two decades. Most computer buyers appreciate the way browser software for the Internet is bundled with the operating software. Others, though, would want the Internet software choices that the Justice Department seeks for them.

Governments or laws that regulate business are constantly challenged to adapt regulations to rapid changes in the business and without forfeiting regulations' original intent. Otherwise, the law can turn into shackles serving no good purpose or can fail to preserve competition.

A lawsuit that takes years and immense intellectual work by judges can decide what the law is for a changing circumstance. A very different procedure, such as congressional hearings on a grand scale, would be needed to determine what that law ought to be.

So the Justice Department might be right in its efforts to further competition. Or the department may find its efforts as wasted and frustrated as in the IBM case. Consumers are probably most concerned about getting Windows 98 on time. That seems assured.

Pub date: 5/19/98

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