Government change may mean lighter penalty for Microsoft

Like Posh and Becks, grilled liver and the Eurovision Song Contest, Microsoft is one of those phenomena in life that people either love or hate.

But unlike those others, Microsoft has become an element of everyday work and home life for millions. This is due to the ubiquity of its Windows operating system, which controls the functions of 95 per cent of desktop computers. Often this makes Microsoft a particularly aggravating element, given that computers tend to thrust their problems upon us at the worst possible moment.

And Microsoft is headed by a bespectacled boffin with a squeaky voice who represents the ultimate revenge of the nerds - the annoying smart kid from school who, due to all those hours spent fiddling with geeky electronics, ends up richer than you. Of course, in Bill Gates's case, he's richer than almost everyone else in the world - which doesn't exactly add to his popularity.

These facts combined to make the US Department of Justice's antitrust case against the software giant of enormous public interest. Most people who followed the daily coverage of the long-running trial cared little about the vagaries of antitrust law, or whether the trial would set a precedent that could damage - or liberate, depending on your perspective - the technology sector.

Instead, the trial, and all its preliminary hearings and findings of fact, was fascinating because, for tech fans, it was the equivalent of the Dublin tribunals. The trial was a gigantic technology gossip column. Laid bare in evidence were the embarrassing company e-mails, the accusations of bullying, the documentation of the rise and fall of competitor companies, and the internal corporate arguments. And, most people also enjoyed seeing Microsoft and its executives get their comeuppance, week after week. The judge presiding over the trial, Thomas Penfield Jackson, needled them, scoffed at their replies, pretended to doze in his chair during their testimony.

It's not that Microsoft didn't have its champions - it had plenty, especially on Wall Street, who feared a decision against the company and, in particular, a punishment that would break it up. Such a result was definitely not going to lift the markets or instill confidence in volatile tech sector shares.

But in general, the majority of observers seemed to enjoy watching the courtroom humiliation of a company that had grown increasingly haughty and detached. At the end of the trial last June, Judge Jackson found the company guilty of misusing its monopoly power and determined that it should be broken up. But parts of the ruling and the proposed "remedy" of a company break-up were overturned last week after appeal.

This comes as no great surprise. The continuity of an aggressive Clinton/Gore-appointed Department of Justice ended with George W Bush's election. The appeal judgment would come under a Bush administration and few believed it would advocate dismembering Microsoft.

And that seems to be exactly what has happened in a judgment which, rather than slapping Microsoft around some more, delivers a wallop to Judge Jackson. In a stinging commentary, the ruling rebukes Judge Jackson for "rampant disregard for the judiciary's ethical obligations". In other words, he was a bit too entertaining, playing to the gallery by offering ongoing commentary to reporters about, oh, the company's similarity to gangland drug dealers. He was far too biased and vindictive, said the ruling, and the remedy needed to be reconsidered.

The guts of the antitrust ruling still stands, despite Microsoft's post-judgment spin, which has understandably attempted to portray the decision as exoneration. A "remedy" for its monopolistic behaviour must still be found but it is likely that the company will work hard to reach a settlement that inflicts the least pain.

But the Clinton Department of Justice's pitbull assistant attorney general, Mr Joel Klein, and the main prosecutor in the case, lawyer Mr David Boies, are gone. With a kinder, gentler Bush crowd in, no one expects the punishment to be anywhere near as harsh as it might have been.

Alas, what hath Judge Jackson wrought. Those involved from the US government side and Microsoft's competitors who felt bruised will be bitterly disappointed that this long and costly suit has come to this. The company will not be divided and conquered. As for the rest of us, we got the judge we wanted for what turned into a bread-and-circuses trial, more entertainment than issue. Few can seriously have believed the mighty defendant would suffer significantly after all was over - just like the tribunals.