Is Antitrust Law in Need of Remedy?

Now that it's at the appeals stage, the Microsoft case is raising a serious new concern: That the law it's based on is too ambiguous

By Mike France

We all know there's a lot at stake in the Microsoft trial: the fate of the company, the competitive balance in the software industry, the pride of dozens of executives, lawyers, and bureaucrats. But there's also another issue up for grabs: the future of antitrust law itself.

The Microsoft case, after all, is the most important antitrust suit in two decades. It's the one supposed to demonstrate that the 1890 Sherman Act still applied to American business. It was supposed to disprove all of the critiques of antitrust: that it's vague, that it moves too slowly, that it requires excessive bureaucratic intervention in markets.


  The results aren't in yet. The U.S. Circuit Court of Appeals for the District of Columbia still hasn't ruled on trial judge Thomas Penfield Jackson's breakup order -- and no one knows if the U.S. Supreme Court will take the case. But it isn't too early to start reflecting on what the Microsoft case says about antitrust law. And unfortunately, the verdict on antitrust isn't looking that favorable at the moment.

Problem No. 1 is timing. This case has moved as rapidly as the legal system can go. Judge Jackson devised all kinds of imaginative procedural shortcuts, and the D.C. Circuit heard the case quickly. And yet it isn't nearly fast enough. While the judges consider e-mail messages written five years ago and mull over remedies devised two years ago, the market has cured much of the problem. Microsoft no longer looks nearly as threatening as it did when the case was filed in 1998.

A second knock on antitrust law is that the remedies it imposes are never terribly appealing. This is still true. Breaking up Microsoft is risky and extreme. Clearly, many of the D.C. Circuit judges aren't ready to approve Jackson's structural-remedy order. But at the same time, nobody is very optimistic about the so-called behavioral restrictions on Microsoft's conduct. They probably won't do much to curb the company's aggressive conduct and will take a lot of time and energy to enforce.


  Both of these critiques are, to a certain extent, familiar. People have been worrying about them ever since the case was filed. But the D.C. Circuit hearings on the case on Feb. 26 and Feb. 27 raised a new concern: that antitrust law is simply too ambiguous. After reviewing the transcript, it appears that while Judge Jackson and the appeals-court judges were reading the same legal precedents and reviewing the same facts, they might very well come to diametrically opposed conclusions.

This is troubling. The law can never be crystal clear, but it's supposed at least to be predictable. Attorneys are supposed to be able to read the relevant precedents and then tell their clients how to behave. There's always going to be some room for interpretation, but the outcome shouldn't depend entirely on what judge you get. Most judges should reach the same conclusions most of the time.

After listening to the D.C. Circuit savage the government's lawyers -- much as Judge Jackson trashed Microsoft's team -- it isn't clear antitrust law meets this standard. And if it doesn't, there may be good reason to begin rethinking its value.

France covers Legal Affairs for BusinessWeek in New York.

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