Good Microsoft. Now Heel

A federal appeals court did the right thing Thursday in overturning U.S. District Judge Thomas Penfield Jackson’s order to vivisect software giant Microsoft. Minutes after the unanimous ruling, the big-dog corporation’s stock went romping off in glee. But the judges, far from exonerating Microsoft, also ruled that the corporation had “behaved anti-competitively and that these actions contributed to the maintenance of its monopoly power.”

Microsoft attorneys have been lobbying Atty. Gen. John Ashcroft to drop the lawsuit that the Clinton administration filed against the software empire more than three years ago. Instead, Ashcroft should push hard for an out-of-court settlement in which Microsoft promises not to stifle future software innovation by intimidating competitors.

The trial’s 78 days of testimony left little doubt that Microsoft had retarded innovation by preventing competing products from being developed, driving specific products out of the market, barring consumers from buying computers with software configured as they want and forcing non-Microsoft products to be distributed in inconvenient ways.

Far from lying low until the judges go away, Microsoft has been on a tear. Last month, under the guise of “simplifying and enhancing” its licensing programs, the company all but demanded that its major customers buy new versions of its products before Oct. 1 or face major price increases later. In April, Microsoft began offering barbeque grills and Fossil watches to computer assembly workers who tattle on companies that try to order machines without Windows. And this fall, Microsoft is scheduled to release a new operating system, Windows XP, that may favor Microsoft Web sites over those of other Web content providers.

During the election campaign, President Bush raised sensible doubts about Jackson’s loopy notion that Microsoft should be cleaved. As Bush pointed out, that so-called “structural remedy” would have put government bureaucrats in the dangerous position of marshaling technological trends and free-market forces. In a truly free market, however, software developers write their code without looking over their shoulders.

The coalition trying to tame Microsoft has broadened considerably since the Clinton administration first pressed its case. Today, two of the top lawyers pushing Ashcroft to restrain Microsoft are not left-leaning Clinton administration types but former Whitewater prosecutor Kenneth W. Starr and conservative ideologue Robert H. Bork.

Starr, who works with a lobbying group for Microsoft competitors, told reporters in February that government action against Microsoft would promote, not restrain, “free-market values.” If Microsoft’s bullying goes unchecked, Starr predicted, we’ll all soon be asking, “What happened to innovation? What happened to consumer choices? And what happened to price?”

We agree. Does the Bush administration really want to have to tell Microsoft-mauled software innovators, “Gee, we didn’t think the big dog would bite”?