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Many Consumers Discount Ruling

The antitrust battle has failed to resonate for computer users as they have seen innovation, competition thriving in the industry.

November 04, 2002|P.J. Huffstutter and David Colker | Times Staff Writers

It was in the name of consumers such as Karlie Johanson that the federal government and a phalanx of state attorneys general spent four years battling Microsoft Corp. in a landmark antitrust lawsuit.

But as Johanson wandered the crowded aisles of Fry's Electronics in Woodland Hills, the 24-year-old student teacher echoed the sentiments of countless other computer users by discounting the effects of a settlement approved Friday by a U.S. District Court judge.

"The whole thing seems like such a joke, a waste of time and our tax dollars," she said, picking up a copy of Microsoft's Encarta, the only encyclopedia program stocked at the store.

Shrugging her shoulders, she dropped the box into her cart.

"Microsoft's everywhere, aren't they?" she asked. "Why even bother trying to fight it?"

Johanson's resignation is hardly surprising, given the complexities of a case that employed hundreds of lawyers, cost millions of dollars and dwelt on the technical arcana of Microsoft's flagship Windows operating system.

Despite warnings from the government and Microsoft's rivals that the Redmond, Wash., software giant was using its monopoly power to stifle innovation and competition, the legal struggle has failed to resonate for most consumers.

And the reason is simple: All they have seen in the years since Microsoft was taken to court is better gadgetry at lower prices.

"It's not like the health-care industry, where their insurance premiums and prescription costs are always going up," said Stan Liebowitz, professor of managerial economics at the University of Texas at Dallas, and co-author of "Winners, Losers & Microsoft."

"This is an industry," he added, "where everything's been getting cheaper, where the products are getting more powerful, and the leader of it all is supposed to be a big, bad monopoly doing big, bad things."

For example, it was the aggressive way Microsoft took over the Internet browser market from Netscape Communications in the mid-1990s that brought the software maker's business tactics to wide public attention and helped prompt the initial lawsuit in 1998.

Yet Internet browsers can do more than ever and are still largely free.

Many consumer advocates still fear that Microsoft will use its overwhelming market power -- Windows powers more than 90% of all personal computers -- to dominate home entertainment, mobile computing and business technology.

Other experts believe that Microsoft faces more competition than ever in these areas. None of this was addressed directly in Friday's ruling by U.S. District Judge Colleen Kollar-Kotelly.

During the court fight, all sides portrayed themselves as the consumer's proxy.

The Justice Department and the state attorneys general said they sued Microsoft to protect technological innovation and keep prices low.

Microsoft said it could not be constrained by antiquated laws if it hoped to satisfy needs not yet even imagined by the average computer user.

The settlement -- hammered out last year between Microsoft, the Justice Department and nine states -- attempts to balance those goals by requiring Microsoft to share more technical information with other software makers and by allowing customers to disable some Microsoft programs within Windows.

Still, most consumers have no idea what the settlement really means for them.

"It's like asking someone at the turn of the 19th century, who only rides a horse, what he thinks the impact of the automobile will have on his life," said Jonathan Gaw, an e-commerce and Internet analyst with the research firm IDC.

Friday's ruling was widely interpreted as a victory for Microsoft. Kollar-Kotelly rejected many of the harsher remedies proposed by a group of state attorneys general who had balked at the negotiated settlement.

That's a sobering thought, even for Microsoft fans such as Neal Lavine of Burbank, who works for a company that tests new television shows before live audiences.

Microsoft's products "are excellent, but I just wish there was more competition out there," said Lavine, 44, while shopping at an Apple Store in the Glendale Galleria. "If there is no competition, the prices stay high."

In her ruling, the judge acknowledged that Microsoft had often taken a "paternalistic view" toward consumers, but she agreed with the software firm that most of the states' proposals went beyond the company's misdeeds and would mostly benefit its competitors.

Dozens of consumer-plaintiff lawsuits could still address subjects left out of Kollar-Kotelly's ruling.

"Microsoft is not out of the woods by any means," said Richard Grossman, a San Francisco-based attorney who is lead counsel for a consolidated consumer-plaintiff case set for trial Feb. 3.

At the Gateway Country store in Glendale, few people, if any, seemed to care about the ruling's details. Some had already relegated the Microsoft case to yesterday's headlines.

Barbara Warren was standing outside the store, struggling to carry a bulky computer, when told that the judge's decision looked to favor Microsoft.

"I use their products and they are very good," said Warren, who lives in Palmdale. "That's just fine with me that they won."

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