It was 10 years ago this week that Judge Thomas Penfield Jackson issued his final judgment in U.S. versus Microsoft. Two months earlier, after almost two years of legal proceedings, the judge found that Microsoft had illegally abused its monopoly in the operating system market, and on June 7, 2000, he ordered that the company be broken up into two separate and completely independent companies.
That judgment turned out to be not so final, of course. The United States Court of Appeals for the District of Columbia circuit overturned much of Judge Jackson’s decision a year later, including the breakup provision. The appellate court also ordered him removed from the case, saying his secret meetings with the media and "numerous offensive comments about Microsoft" had tainted his impartiality. (If you're a law and technology geek, Dahlia Lithwick's dissection of the appeals court judgment is masterful and still hilarious.) Still, it was a loss for Microsoft and strong motivation to settle. After a few months of negotiations, the U.S. Department of Justice announced it had reached a settlement with Microsoft that severely restrained its behavior and placed it under direct oversight for years. Conveniently, that happened around the time Windows XP was released to the public in late 2001.
So, ten years later, with the gift of hindsight, how did that settlement work out? We don’t have the luxury of living in a parallel universe where we can see what the PC ecosystem in 2010 would look like if Microsoft had been allowed to go on its merry way without penalties or restrictions. But we can look at Windows and its competitors as they’ve evolved over the past decade and see how Microsoft’s behavior changed, and what that meant for the PC you’re using today.
Here are four significant developments that affect all PC users and in my opinion can be traced directly back to the antitrust case and its settlement.
#1: Thanks for all the crapware, Judge.
Throughout the antitrust trial, the word middleware got a serious workout. Originally, the DOJ used it to refer to browsers (specifically Netscape Navigator) and Java. But the judge’s ruling and the eventual settlement expanded the definition significantly, to include not just web browsers but also “e-mail clients, media players, instant messaging software, and future new middleware developments.” In the eventual settlement, Microsoft agreed to the following terms:
Freedom to Install Middleware Software--Computer manufacturers and consumers will be free to substitute competing middleware software on Microsoft's operating system.
Ban on Retaliation--Microsoft will be prohibited from retaliating against computer manufacturers or software developers for supporting or developing certain competing software.
The unintended consequence of allowing PC makers to substitute and support any software they want? Middleware became crapware. Desktops were splattered with icons for unwanted software. Preloaded media players and toolbars and add-ons and trial editions slowed PCs to a crawl. Even today, some retail PCs are crammed with so much third-party software that they take forever to start up. Microsoft still can’t legally do anything to make your overall Windows experience better when you buy a Windows PC sold by an OEM. All they can do is try to shame their OEM partners into doing the right thing.
In fact, the decision to block Microsoft from controlling preinstalled "middleware" founded a micro-industry of products and services that remove unwanted software from brand-new PCs, like The PC Decrapifier and the Geek Squad's "optimization" service.
As for the word middleware? I don't think I've heard anyone use that word since the antitrust settlement so many years ago.
#2: Competition among browsers? It took a long, long time.
This one's filled to the brim with irony. Microsoft's cutthroat battle with Netscape that began around the time of Windows 95 was one of the key complaints in the antitrust action, and Judge Jackson's original decision was scathing on this count. Yet the appeals court reversed Judge Jackson's decision that Microsoft had attempted to extend its monopoly into the browser market.
By 2000, Netscape was pretty well beaten anyway. Ten years ago, Internet Explorer ruled the web with an 80% market share, with Netscape Navigator in a distant second place. And by the end of 2003 IE had a share over 90%, according to one report at the time.
Mozilla Firefox was based on Netscape's source code, and has steadily increased its share since its launch in 2004. But it wasn't until 2008 that a really credible third-place browser for Windows appeared. And I think it's pretty safe to argue that the antitrust regulation had nothing to do with the rise of Firefox or Google Chrome. It's even possible that the antitrust settlement was part of the reason behind Microsoft's decision to completely stop developing IE. If there's no competitive advantage, why sink the development dollars into it? Even now, Microsoft's 2001-era browser, IE6, still has a usage share that puts it above all but two non-Microsoft browsers.
Although it took a long time, the good news is that competition in the browser market is pretty much assured for the next five years. Microsoft long ago lost any claim to a monopoly position in browsers, and it looks like two or three well-funded competitors are in the game to stay.