Word: antitrusters
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...calls were part of an effort to soften Gates' image in Washington, they didn't work. "I don't think they get it," says Republican Senator Mike DeWine of Ohio, chairman of the Senate antitrust subcommittee, whose state received $70,000. "Microsoft is now a monopoly," he says. "But they have not adjusted to the fact that they now have to follow different rules...
...toughest lesson that the chairman of Microsoft has to learn. When Mr. Gates went to Washington last week, he hoped to relieve some of the pressure that's been brought to bear on his growing empire. With Microsoft, the world's largest software company, facing a sapping antitrust action waged by the Federal Government--and 11 similar suits filed by state attorneys general--the $47 Billion Man was going on the offensive by running with the ball himself. Luckily for Gates and Microsoft, the game still has a lot of play left...
...issue was whether forcing PC vendors that license Microsoft's Windows95 to take Explorer as well constitutes product "tying"--a violation of the consent decree signed by Microsoft in 1995. After Joel Klein, the Justice Department's antitrust chief, reopened Justice's dormant suit against Microsoft, U.S. District Judge Thomas Penfield Jackson issued a preliminary injunction forbidding Microsoft to engage in Explorer strong-arming. This in turn produced Microsoft's infamously petulant response: offering to sell versions of Windows that didn't have Explorer but didn't work either. After showing in court that it took less than 90 seconds...
Whether this Hail Mary play will work remains to be seen--as does the question of how long Gates' capitulation will last. The settlement merely delays the underlying case until April 21, when Microsoft's appeal is scheduled to be heard by a three-judge panel, viewed by antitrust sources as libertarian-leaning and thus possibly pro-Microsoft. By then programmers will be working with early versions of Windows98, which integrates Explorer even more fully--thus in theory solidifying Microsoft's hammerlock...
...that is, Klein hasn't stopped them first. The antitrust chief's larger investigation remains active and aggressive; a Justice source confirms that wider anti-Microsoft action under the Sherman Act, if it comes, will probably arrive before the new operating system does. First Jackson will hear from "special master" Lawrence Lessig, the Harvard law professor whose court-ordered study of Microsoft's business practices is due in May. Around the same time, of course, Microsoft's appeal (which includes a request to have Lessig removed from the case) reaches court, and Win98 hits software shelves near...