Cybernaut 

If New York wise guy John Gotti is the "Teflon Don," then Seattle smart guy Bill Gates is surely the "Non-Stick Nerd" – nobody can pin anything on the Microsoft chairman, not even the feds.

On June 28, the U.S. Court of Appeals for the District of Columbia overturned most of a lower court’s judgment that would have broken software giant Microsoft into two separate entities – one for the Windows operating system, and one for productivity and entertainment software.

By bundling Internet software with Windows, and by refusing to share Windows’ code with other software developers, district court judge Thomas Penfield Jackson argued that Microsoft was violating U.S. antitrust laws – i.e. was deliberately creating a monopoly by freezing out the competition.

The court also devoted 20 pages of the 125 page appeal ruling to question the conduct of Judge Jackson, who broached ethics by speaking to the media during the course of the trial. His comments also appeared to be biased against Microsoft.

"The judgment of the District Court is affirmed in part, reversed in part, and remanded in part," wrote the court of appeals judges. They agreed that Microsoft was creating a monopoly through unusual business practices, but disagreed with the punitive measures suggested, including the proposed breakup of the company.

The court of appeals then sent the case back to district court and a new judge. The basic grievance, that Bill Gates and Microsoft conspired to bury the competition, still stands. The U.S. Justice Department, which brought the antitrust suit against Microsoft in 1997 on behalf of 19 states, is determined to bring Microsoft to heel.

It’s reminiscent of Gotti once again. After beating the Racketeer-Influenced and Corrupt Organization Act (RICO) brought against him in 1986 (thus earning the Teflon Don nickname), the Justice Department doubled its efforts to bring Gotti to justice, going so far as to offer a plea bargain to Sammy "The Bull" Gravano – a mob enforcer who admitted to 19 murders. As a result of Gravano’s testimony, Gotti was sentenced to life without parole, and spent the last nine years in solitary in one of the worst prisons in the U.S.

While the two cases have their obvious differences, you have to wonder how Bill Gates can be so confident that he will beat the Justice Department a second time. While the mafia hates rat finks like Gravano, the general consensus among wise guys is that Gotti brought about his own demise through his arrogance.

When the court of appeals overturned the majority of Judge Jackson’s ruling, Gates called a press conference and spoke like a man who fought the law and won.

"The legal process can be hard on anyone that goes through it, and the last four years have been challenging for all of us here at Microsoft, and for me personally," said Gates. "But despite the many twists and turns in the case, I’ve always had faith in our company and our employees and in the magic of the software we’re creating."

One of those magical pieces of software is the Windows XP operating system and Internet Explorer 6, which are due in the stores by October. Beta versions of it are already available, however, and antitrust watchdogs are already crying foul over a controversial feature within XP and IE6 called "Smart Tags."

Smart Tags can turn any word on a Web page into a link to a related page. For the word "travel," for example, XP and IE6 can create a link to a travel agency.

It’s thought that Microsoft can use Smart Tags to create links back to their own sites and services in the Microsoft Network. If you click on the name of a company, you could find yourself at that company’s page at MSN MoneyCentral. If you click on the word "vacation" you could find yourself at MSN’s Expedia online travel site.

More amazing than the potential for Smart Tags to channel business to Microsoft sites is the fact that this software application was being developed while the antitrust suit and appeal were still ongoing. Microsoft recently agreed to remove Smart Tags from the official release of XP and IE6 but the damage may already have been done – it makes Microsoft seem almost, well, arrogant.

Not to say that Microsoft is somehow evil, or to imply that Bill Gates is some kind of renegade, or to claim that I didn’t use the version of Internet Explorer that came bundled with my Windows 98. Business is business, and this particular business is cutthroat.

I generally have more confidence with Microsoft software than any other brand, probably because I’m confident that Microsoft is still going to be here in three years. With everything going obsolete so quickly, this is comforting. When their software has a glitch or becomes outdated, they develop a patch. And because almost half the computers in the world run on Windows, there is no shortage of software to choose from.

However, it might be a good idea for Microsoft to pledge to share code with their competitors in the future, and to voluntarily stop bundling Internet Explorer with Windows. If they admit that their business practices might have been slightly skewed in the favour of creating a monopoly, public opinion and the court’s decision will likely show leniency. If they continue to assert that they’ve done nothing wrong, then let the cards fall where they may.

The final decision will set an important precedent. If Microsoft loses their case, other software companies will have access to Windows code, you’ll have to download Internet Explorer on your own. Software will be cheaper, and many believe better.

If Microsoft wins, then companies everywhere will have more freedom than ever to crush their competitors – essentially, the whole value of antitrust legislation is what’s on trial.

Other reading:

http://cnnfn.com/2001/06/28/microsoft_file/decision.pdf – the U.S. Court of Appeals decision.

http://cnnfn.com/2001/BUSINESS/06/28/microsoft.appeal/index.html – A timeline of the Microsoft case.

www.carpenoctem.tv/mafia/gotti.html – the stories of John Gotti and Sam "The Bull" Gavaro.

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