so heavily upon it? The most recent lawsuit involves the Justice Department and 20 state attorneys general. They believe that Microsoft has used its monopoly in operating system software to protect its dominance and eliminate competitors. The governme

ations with OEMs crossed the line from "hardball" to "anticompetitive" (4). Three main facts indicate that Microsoft enjoys monopoly power. First Microsoft's share of Intel-compatible PC operating systems is extremely large and stable. Second, Microsoft's dominant market share is protected by a high barrier to entry. Third, and largely as a result of that barrier, Microsoft's customers lack a commercially viable alternative to Windows (1). Judge Jackson might rule that Microsoft harmed Netscape Communications Corp. and other competitors by illegally "tying" its own Internet Explorer browser into the purchase of its Windows operating system. The government argues that Microsoft plotted to kill Netscape by "bolting" Explorer onto Windows. Government lawyer David Boies said this nuts-and-bolts approach to computer software added no value for customers, but gave Explorer an unfair competitive advantage. In a few weeks, if a settlement is not reached, Jackson will issue his final ruling. He'll almost certainly find that Microsoft created an illegal monopoly, that it illegally tied Explorer and Windows, and that, as a result, the company should suffer the most severe sanctions, perhaps even a breakup. Another area of concern for the Justice Department is in productivity software. Microsoft Office has locked up almost all of the desktop suite market, Publisher is a strong competitor at home and Microsoft's other applications lead in most categories. Why? Well, despite their protests, it's obvious to even the casual observer that the application group gets inside information on upcoming operating system (OS) features and functions from the OS group. It happens like clockwork. Microsoft releases a new OS and shortly thereafter updates its applications with key features that take advantage of new OS functionality. Other vendors, forced to play catch-up, can take six to 12 months longer to capitalize on those new features in their applications. Without those new features, their applications lose market share and development resources and begin to lag further and further behind. Eventually they become marginalized (1). For proof, just look at Lotus and Corel in the suite space, Borland in the tools market, or Sybase in the database arena. Part II: I imagine Judge Posner sees his role as facilitating a settlement. How? If I were he, I'd try to get each side to recognize the weaker elements of its arguments and give ground accordingly. There's benefit to each side from settling and moving on -- yet, in the absence of a mediator, like Posner, it seems quite possible that no agreement could be reached. In particular, the many separate state attorneys general are said to have splintered somewhat from the Department of Justice, reportedly demanding relatively more drastic remedies, and Posner therefore likely hopes to remind the plaintiffs of their common interest so that they're more likely to join together and settle. Because the mediation is voluntary, any settlement solutions offered by Posner aren’t binding. Posner is considered part of the “Chicago school” of antitrust theory along with Judge Robert Bork, and has argued that predatory pricing - a monopolist’s driving prices down to kill a competitor - almost never exists. The school of thought holds that the market will adjust itself and competition will emerge automatically. Posner has said that too much of law - and especially antitrust law - is decided by arguing over legal theories rather than empirical facts (4). One of the strongest legal arguments the Department of Justice has in its case is that Microsoft threatened to pull Compaq Computer’s Windows license if the computer maker replaced the Internet Explorer icon with Netscape’s on the PC desktop. Microsoft has already admitted making the threat, but they also said they didn’t mean it. They got Netscape CEO Jim Barksdale to concede that he had no evidence Microsoft ever punished a computer seller for displaying the

Some topics in this essay:
Justice Department, Internet Explorer, Standard Oil, Robert Cringely, Judge Jackson, Microsoft Microsoft, Microsoft Office, Standard Oil's, Juno Web, Act Microsoft, operating system, justice department, operating systems, internet explorer, market share, standard oil, business practices, judge jackson, monopoly power, antitrust law, internet explorer browser, windows operating system, actions preserve windows, 1 judge jackson, establish fair consistent,