Sun shines legal spotlight on its nemesis

It is fairly standard for an IT company to have a news section on its Web site. For larger operations, it might also be common to...

It is fairly standard for an IT company to have a news section on its Web site. For larger operations, it might also be common to split that news into subject areas. But there can't be many that include legal news as a major category.

There is one, however, and it's probably not too hard to guess its name. Here's a clue: it begins with an 'm', is nine letters long, ends with a 't' and its fortune is built on Windows and Gates - but it has nothing to do with housebuilding. And one by-product of the way it does business is that it's made an awful lot of money for lawyers.

Obvious really. It's Microsoft, of course.

Is it really only five months since it appeared the vendor would finally, with the help of a compliant Republican attorney general's office, put years of anti-trust investigation and scrutiny behind it with a settlement which did little to prevent the repetition of what rivals claimed were anti-competitive practices?

If so, the moment was but fleeting before the nine dissident US states mounted their challenge and bogged the vendor down in yet more litigation. The irony this time is that the DoJ and Microsoft, for so long foes during the Democrat reign, are now on the same side.

But the reaction of the nine dissident states was graphic evidence that if Microsoft thought reaching a settlement with the DoJ was going to resolve its legal problems, it was dead wrong.

Sun wades in Perhaps more significant was the decision by Sun to launch a private suit against Microsoft earlier this month seeking "remedies for the harm inflicted by Microsoft's anti-competitive behaviour with respect to the Java platform and for damages resulting from Microsoft's illegal efforts to maintain and expand its monopoly power".

On one level, the suit goes over similar ground to the DoJ action. It also rehashes some of the arguments from an earlier action taken by Sun against Microsoft over Java, filed in October 1997 and settled in January 2001.

Its significance, however, for Microsoft rivals and those concerned about its dominance of the Intel PC market, is that the Sun action is, in many respects, the suit they believe the DoJ should have filed against the software giant.

On both occasions when the DoJ has scrutinised Microsoft, the feeling has been that the specifics which occasioned the investigations and the remedies proposed were superseded by events. The interesting thing about the Sun suit - and one which has led some to charge it with being too wide-ranging - is that it seeks to apply the earlier findings against Microsoft to the software giant's present and future business strategies and to claim that the pattern of anti-competitive behaviour remains the same.

To this end, Sun seeks to tie in the argument to Microsoft's .NET strategy: "Just as it developed the Windows platform on top of MS DOS in order to encourage developers to write to the new platform, Microsoft now will provide the .NET framework as a middleware layer on top

of Windows and encourage developers to increasingly write their applications to this new platform, gradually obsolescing the Windows platform and transferring [its] monopoly from the PC operating system to the middleware layer."

This isn't a new charge but it's the first time someone has resorted to law to try and make it stick. Sun's argument is that the Windows and Internet Explorer activities were not isolated incidents but evidence of serial behaviour on behalf of Gates and co. It therefore rejects the proposed settlement because it fails to address the issue of how to prevent Microsoft repeating its previous practices in other areas.

Taking action
The other interesting point about the Sun suit is that it reveals just how seriously, despite all the bad-mouthing by CEO Scott McNealy against Microsoft over the years (you may recall the comparison with drug addiction, an analogy which Microsoft boss Steve Ballmer topped when he referred to Linux as like cancer), the vendor is beginning to take Gates and his cohorts as a threat to its future prosperity.

It is notable that the suit addresses specific product and market areas where Sun now feels under pressure from Microsoft. And it demonstrates that while previously McNealy was mostly talk when it came to Microsoft, now he's more action.

And it suggests something else. That companies like Sun have given up hope of any serious action being taken by the US Government to redress what they perceive as anti-competitive practices by Microsoft and view the proposed DoJ settlement as essentially giving the green light to the software giant to carry on as before.

Microsoft supporters will retort that the Sun action is a case of sour grapes, of a vendor which is seeing its market share being eaten into resorting to heavy-handed legal tactics to try and arrest the momentum of its potential decline and the impetus of its rival.

The only certainty is that Gates and Ballmer will continue to find themselves devoting much of their time to legal matters and the legal news section will continue to grow on the Microsoft Web site.

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