WASHINGTON,Antitrust lawyers across the country had reason to celebrate Tuesday. With the federal case against Microsoft coming to a close, many of the poor souls may have been worried about where their next billable hour would come from. AOL Time-Warner’s new
lawsuit against Microsoft, filed Tuesday, has helped put any such worries to rest.
Combined with other litigation, it’s now a safe bet that the antitrust bar will be feasting on Microsoft-related caseloads for years to come. That’s good news for the lawyers and their families, though not for consumers.
The new case, brought by AOL-Time Warner through its subsidiary Netscape Communications, is to a large extent based upon the four-year old federal case against Microsoft. AOL alleges that Microsoft illegally caused Netscape to shrink from dominance in the browser market to its current nine percent share.
Its case will no doubt be helped by the D.C. circuit’s decision last year in the prior case, and the findings of fact by the now-discredited Judge Thomas Penfield Jackson. In particular, the conclusion that Microsoft engaged in a variety of anti-competitive acts will be a powerful weapon in the hands of AOL lawyers. There are, of course, some nettlesome details — the foremost being the fact that the appeals court solidly rejected Judge Jackson’s finding that Microsoft monopolized the browser market.
All in all, it should be a good tussle, a replay of all our favorite “who did what to whose browser” stories, and certainly chock-full of billable hours all around.
The bigger question, though, is why we should care. The browser wars, for better or worse, are over — ancient history from the 1990s. (And even then, to the consternation of
tech and legal junkies, few consumers cared what browser they used). And if browsers were important, AOL is hardly without options. Simply providing Navigator to its 33 million subscribers could change the browser landscape instantly.
So what’s really at issue here? There’s money, of course. AOL-Time Warner may ask for some $12 billion for Netscape’s injuries. (Not bad for a unit purchased in 1999 for
But non-monetary remedies may be even more important to AOL. Among other things, AOL likely will ask that Microsoft be required to sell stripped down versions of Windows. That means without browsers, but probably also without the instant messaging application that’s challenging AOL’s dominance of the fast-growing IM market.
Here’s the key to the case (and to much of antitrust law for that matter). Rather than a tool to create competition, the suit is a result of competition — in this case competition between Microsoft and AOL-Time Warner. Over the past few years, it’s been an
increasingly tense rivalry — a sort of tech cold war. And exactly the sort of rivalry markets should produce. Despite the heated rhetoric, neither is dominant, with each checking the other’s ambitions and looking for opportunities the other has missed.
But now AOL has turned to the government for an advantage in this competition. No one but Claude Rains would be shocked to find this sort of thing going on. Antitrust law has long been used by businesses to thwart competitors rather than foster competition.
And Microsoft is no angel in this regard either. Had AOL won the bidding for AT&T broadband, Microsoft would have led the charge to get regulators to stop it.
Nevertheless, both may regret inviting regulators and lawyers in — for like a bad houseguest, once invited they may never leave. And consumers will be the ultimate losers, as competition by innovators in the marketplace is replaced by competition by
lawyers in the courtroom.
(Reprinted with permission of CEI. For more information, visit www.cei.org ).