DOJ wins the battle, but the war continues

Has Microsoft Corp., the company that never loses, actually lost?

Tactic for tactic, Microsoft has been on a losing streak in its epic battle with the government. So, it finally decided to take seriously Judge Jackson's Dec. 11 order to "cease and desist" from requiring hardware OEMs to carry Internet Explorer as a condition of their Windows licenses. Microsoft has blinked so many times in this case, today's outcome could qualify as a cave.

Eureka! Microsoft has found a way to give consumers the latest Windows 95 features without Internet Explorer in their face. (Does it annoy anyone that the Control Panel and just about everything else in Windows now comes up in an often disconnected -- hence, useless -- browser?) In the post-settlement press conference today, Microsoft Chief Operating Officer Bob Herbold said the company would have complied sooner with the judge's order had it not been told to "completely remove" IE from Windows. Microsoft didn't know that simply removing the IE icon from Windows was enough to satisfy the judge's order. IE remains intact in Windows, essentially hidden and presumably ready to be brought to the fore again if Microsoft wins on appeal.

Looking ahead, Microsoft says it will now focus on the appeal and its divine right "to innovate."

So, is the company hurt by this ruling? Perhaps not. It could still win on appeal. And what's to stop it from conducting a massive marketing campaign to show users how to install IE without the icon? There are probably numerous ways to show neophyte users how to install IE. Already, Microsoft has created applications that require IE.

The legal upshot? Microsoft can no longer steamroller the government. For years, it ran over the Federal Trade Commission and even the DOJ. Most observers said the 1995 Consent Decree -- on which today's decision is based -- had no teeth. Guess what? It has teeth. Emboldened by its success, the DOJ will watch Microsoft's behavior closely, and be more inclined to act. This is just one battle in what's turning out to be a long on-and-off war.

Microsoft rose up fiercely in its own defense after the suit was initially filed in October. Now, it is backing down to determined and focused government prosecutors, who many scribes said didn't have a chance. At the time, I said the government not only had a chance but a case.

Like a flailing giant, Microsoft conducted a series of maneuvers that served only to rile the government, the judge, and even the public. Here are some examples:

-- It's still trying to discredit and remove special master Lawrence Lessig because he once said something nasty about Microsoft in an E-mail. Rumor has it Microsoft also has proof that Lessig, as an adolescent, once bought a copy of Playboy -- a clear indication of moral turpitude. Preposterously, this issue is still on the table.

-- Microsoft said mere mortals don't understand software development. The judge made Swiss cheese out of this argument when he uninstalled IE from Windows in minutes. Who said anything about getting every last 1 and 0 of IE out of Windows?

-- Microsoft made a mockery out of Judge Jackson's order by coming up with untenable solutions for disabling IE in Windows. Microsoft's contention that it would have complied sooner if it had not earlier understood that it must eradicate IE from Windows was an effort to buy time to figure out how to leave IE in Windows for users willing to install it with a little work.

--- In early January, Microsoft executives fanned out across the country, apologizing for arrogance and admitting they had done a lousy job of communicating the issues. Huh? I thought it was going to pummel the government.

-- And from Microsoft's Department of Pretzel Logic came the argument that since Judge Jackson on Dec. 11 did not find it in contempt, how could the company be ordered to rectify a wrong it was not being punished for?

I'm sorry, Microsoft. You folks are smart, savvy business people but your behavior in this case has been a mystery and, at times, desperate. Still, I don't believe today's settlement cripples or hinders you substantially.

So, where do consumers stand after today's ruling?

You will still be able to get Internet Explorer for free in Windows 95. But hopefully, you will still be able to get Netscape Navigator in 12 months as well. It's no secret that Netscape is hurting from Microsoft's aggressiveness and monopolistic leveraging in the browser marketplace.

I just hope this isn't too little too late.