The suit against Microsoft by the U.S. Department of Justice is, in fact, a grave act of injustice. To understand this, it is necessary to look at the background and legal context of this case.
America’ antitrust laws are highly ambiguous. They create offenses for which there is no clear definition, such as “unfair competition,” “restraint of trade,” “collusion,” and “intent to monopolize.” It is impossible for a company to know what the antitrust laws outlaw, until a judge issues a verdict.
Personal computer makers often sell PCs with the Microsoft Windows operating system pre-installed. Up until 1995, Microsoft had been signing license agreements that required PC makers to bundle other Microsoft products with Windows. The DOJ, however, considered this “anti-competitive” and threatened Microsoft with prosecution under the antitrust laws. To avoid prosecution, Microsoft signed a consent decree in which it agreed to give up this kind of licensing.
In its current suit, the DOJ alleges that Microsoft has broken the terms of this consent decree. Microsoft has been requiring PC makers to bundle the Internet Explorer web browser with Windows 95. Microsoft argues that IE is part of Windows 95, and is therefore not subject to the terms of the consent decree, but the DOJ disagrees. It is asking the court to impose fines of one million dollars a day on Microsoft until it ceases bundling IE with Windows.
Where does justice lie in this suit? Since Microsoft signed the consent decree in the context of antitrust, it is necessary to look at these laws briefly.
| Clearly it is unjust to hold a company accountable to laws that cannot be understood. But, to add to the injustice, the antitrust laws punish companies for attempting to defend themselves: if a company tries to defend itself in court, and loses, it can be subject to triple damages. |
America’ antitrust laws are highly ambiguous. They create offenses for which there is no clear definition, such as “unfair competition,” “restraint of trade,” “collusion,” and “intent to monopolize.” It is impossible for a company to know what the antitrust laws outlaw, until a judge issues a verdict.
Clearly it is unjust to hold a company accountable to laws that cannot be understood. But, to add to the injustice, the antitrust laws punish companies for attempting to defend themselves: if a company tries to defend itself in court, and loses, it can be subject to triple damages.
In this context – an unjust law combined with unjust punishments for defending oneself – it is natural that a company would settle out of court by signing a consent decree. Since Microsoft signed the consent decree “under duress,” as it were, it is unjust to argue that it has a moral obligation to abide by the decree’s terms.
This case is unjust in another, more fundamental, manner. The essence of criminal justice is the protection of rights – rights to life, to liberty, to property, to freedom of contract, among others. A law that violates rights is inherently unjust. Windows 95 and IE are Microsoft’s property, which means that Microsoft has the right to sell them in any manner it chooses, and which also means that PC makers have no right to sell them except on the terms that Microsoft sets. The government has no right to interfere, no right to violate Microsoft’s property rights and freedom of contract. If the DOJ were attempting to defend justice it would defend Microsoft’s rights. Yet it is, in fact, using the law to attempt to violate those rights.
| Microsoft is being targeted because it is good at its business, because it is successful, because it is competent. Nothing could be more unjust than this. |
Finally, there is an even more fundamental injustice being perpetrated – a moral injustice. It pertains to the motive behind this lawsuit.
When a company is forward-thinking, proactive, innovative, and productive, it will produce good products that customers want to buy. As a result, it will win a large market share. If the company is much better than its competitors, it might win most, or almost all, of the market. This is the case with Microsoft. It has earned its market share by producing good products that customers want to buy.
A company that wins a large market through its own productive efforts deserves accolades. This is because justice, morally, tells us that we must reward the good. However, to the government, a large market share is taken as evidence of anti-competitive behavior, which makes the company a target for antitrust action. This seems to be the motive behind the DOJ’s suit against Microsoft.
To punish the good because it is good is the most vile inversion of justice conceivable. Yet this is the essence of antitrust, and this is exactly what the DOJ is doing to Microsoft. Microsoft is being targeted because it is good at its business, because it is successful, because it is competent. Nothing could be more unjust than this.
For further reading see: “America’s Persecuted Minority: Big Business” by Ayn Rand, and “Antitrust,” by Alan Greenspan, both in Ayn Rand’s book “Capitalism: The Unknown Ideal“.
