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Weekly Column

Microsoft and Me: How Microsoft Has Already Been Crippled by the Department of Justice

Status: [CLOSED]
By Robert X. Cringely
bob@cringely.com

After years of preparation, the U.S. Department of Justice's antitrust lawsuit has finally come to trial. While I'm not at all sure what the first couple days say about the DOJ, what they say about Microsoft is becoming clear. Whether or not Microsoft has engaged in anti-competitive behavior in the past, this trial will go a long way — much farther than many people realize — toward making Microsoft act differently in the future. To protect itself, the company is giving up one of its most powerful weapons. Intimidation.

Remember that Microsoft is a very male, very nerdy company led by a very male, very nerdy leader, Bill Gates. The company will do whatever it takes to win in any business situation, primarily because Bill spends nearly every waking moment thinking in terms of winning or losing. And Bill HATES to lose. This much everyone already knows. But this Bill-is-super-competitive effect is amplified by something else many people don't know about. I like to call it the Major Jolloud Effect.

Major Jolloud was (and may still be for all I know) Libyan ruler Mu'ammar al-Qadhafi's top lieutenant. In an earlier life, I used to hang out in that part of the world, and ran into Major Jolloud and his boss on several occasions. The truth is that I not only got along with Qadhafi, but in some ways, I kind of liked him. But Major Jolloud gave me the creeps. This is because Qadhafi, like many national leaders of any long-term standing, understood that much of his job was show business, not reality. But Major Jolloud, like many top lieutenants, didn't always know what his boss knew. Major Jolloud took Qadhafi more seriously than Qadhafi took himself. The result of this was that while Qadhafi could talk the talk of terrorism, I got the sense that most of it (though obviously not all) was for show. Major Jolloud, on the other hand, thought every word from Qadhafi's mouth was sincere. On a couple occasions, I even laughed with Qadhafi about his absurd positions, but there wasn't a second when I could let down my guard that way with Major Jolloud, who always seemed ready to kill me.

Back to Microsoft and the DOJ. Although Bill Gates may like to scream in staff meetings, calling for the destruction of competitors by any means and at any cost, he may not always mean literally that. But his people don't always know it. Like thousands of Major Jollouds, they are out cracking heads in Bill's name every day.

Here's an example from my own experience. When I interviewed Gates for "Triumph of the Nerds," we forgot to bring along an appearance release form for Bill to sign. This was a big mistake. Because of this oversight, getting permission to broadcast the interview took months of negotiating with the Microsoft legal department. As in all negotiations, Microsoft tried to come out the winner. The position taken by Microsoft's lawyers was simple: We could have permission to use the Gates interview only if Microsoft was given ownership of the entire show. That's right, Microsoft wanted to own the show.

Or perhaps I should say that the Microsoft legal department wanted to own the show. They eventually backed down after we appealed directly to Gates, who rightly saw this as absurd. It was the Major Jolloud Effect, with the Microsoft legal department in the role of Major Jolloud.

In this antitrust case, Microsoft has to face some pretty damning evidence from its own e-mail. Hundreds of Redmond-based Major Jollouds regularly write about crushing this competitor or that. I'm not saying they don't mean it, nor am I saying that Bill Gates wouldn't be happy with a crushing here or there. What I am saying is that Gates has a tendency to overstate things, and his people then have a tendency to overact them. And it has all worked so well for the company over the years that nobody gave it much thought. Until now.

So I predict we'll hear a lot from Microsoft in this trial about how their words are being taken out of context. Microsoft will also try to show that's its competitors lost market share because of incompetence, and that those same companies were trying to entrap Microsoft all along. This latter argument will play better to Microsoft paranoia than anything else, for it is true that Gates keeps the company a little scared at all times. Part of the design is to make Microsoft people think that, despite their having all the money and power, some upstart startup could come along and put them out of business overnight. They really believe that.

It's this paranoia and Gates cultivation of it that makes Microsoft a bully. We'll hear a lot more about this behavior before the trial is done. And it's true, Microsoft is a bully. They once tried to bully me and the story is a good example of how it's done.

Back in December, 1991, just before the publication date for my book Accidental Empires, Microsoft attempted to keep the book from being published at all. Somehow they heard about the book, then got a copy of the galley proofs. Let's just admit up front that Accidental Empiresset new records for criticism of Microsoft at a time when the company generally was adored by the press. Microsoft hated the book.

Marty Taucher, Microsoft's top internal PR guy, called Stewart Alsop, then my boss's boss at InfoWorld. Unless InfoWorld stopped publication of the book, Taucher said, Microsoft would never again cooperate with the magazine on product reviews or news stories. This was the threat, and it was characteristically made by telephone and never in writing. Alsop got off the hook in this case by pointing out that InfoWorld had nothing to do with publication of the book. He couldn't stop it. This conveniently ignored the fact that InfoWorld had already read and approved the manuscript.

Microsoft then turned against Addison-Wesley, the actual publisher of Accidental Empires. Taucher made another phone call, this time to A-W's headquarters in Reading, Massachusetts. The threat was the same: Cancel the book or Microsoft would never again cooperate with Addison-Wesley at any level on any project. Since A-W is a large publisher of computer books, and computer books generally require advance looks at products, this was a very serious threat. I was pulled into several conference calls over the 1991 Christmas holiday as A-W decided whether or not to defy Microsoft. There were already 25,000 bound copies sitting in the warehouse. Should those copies be destroyed?

They very nearly were destroyed. I argued over and over that the book was truthful, that Microsoft had no legal case, and that ultimately, they wouldn't follow through on the threat. Addison-Wesley finally decided to believe me and went ahead with publication. Microsoft never said another word.

I have no way of knowing whether Bill Gates expressed outrage over my book, and whether his outrage led to these threats. I know Bill read the book, but my guess is it wasn't until later. And when he did read it, I know he had objections. But it's my guess that Marty Taucher was probably playing the role of Major Jolloud when he made those calls.

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 this week, 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 Netscape Navigator icon, rather than Internet Explorer.

No matter how this case is resolved, Microsoft is changed forever because the company has admitted its threats are hollow. They can threaten all they like, but if they don't follow-through, it's meaningless. And now that Microsoft is effectively codifying its lack of follow-through on threats, the company is hamstrung. Their logic is simple: Sure we threaten, but we don't mean it, so it's not anti-competitive. Now turn that logic around: If Microsoft did follow through on a threat, it WOULD BE anti-competitive.

The threat is dead. If Microsoft threatens, the outfits being threatened can shrug it off, saying Microsoft doesn't really mean it. If Microsoft follows through on a threat, it's an outright admission of anti-competitive behavior, and the Feds ought to swoop down like vultures.

It is very likely that this behavior change will be the only long-term effect on Microsoft of this anti-trust trial. But it is a real effect. And as a guy who has been threatened by Microsoft, I'd say it is a real improvement.

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