by Edward Felten
Disclaimer: Neither the author of this write-up nor the speaker are lawyers.
Dr. Felten was one of the expert witnesses for the United States Department of Justice in the recent antitrust case against Microsoft. In his talk he discussed why he believed the government chose him and explained the role of an expert witness in antitrust cases.
In October of 1997 Ed received an email from an attorney is the Department of Justice asking to speak with him. After signing a nondisclosure agreement (which is still binding, so he advised us there were some aspects he simply could not answer questions on), and over the course of several months, he spoke with the Department of Justice until, in January 1998, he signed a contract to be an advisor to the case.
What was the case about? Unlike media portrayals, the case was not about whether Microsoft is good or evil, or whether or not Bill Gates is good or evil, or whether Microsoft's behavior was good or bad. The case was specifically about whether or not Microsoft violated US antitrust laws.
A brief discussion of economics may be helpful here. Competition constrains behavior. You cannot, as a company, hike prices and provide bad products or services when there is competition, for the consumer can go to your competitors and you'll go out of business. Weakly constrained companies, or those companies with little or no competition, have what is called monopoly power. Monopoly power in and of itself is not illegal. What is illegal is using the monopoly power in one market (for example, flour) to weaken competition in another market (for example, sugar).
The US government claimed that (1) Microsoft has monopoly power in the personal computer operating system market; and that (2) Microsoft used its monopoly power to (a) force PC manufacturers to shun makers of other (non-Microsoft) applications and operating systems; (b) force AOL and other ISPs to shun Netscape's browsers, Navigator and Communicator; and (c) force customers to install and use Microsoft Internet Explorer. These issues are mostly non-technical and specifically economic. Dr. Felten focused on the technical aspects.
Under US antitrust law, tying one product to another is illegal in some cases. For example, if you have a monopoly on flour, you cannot sell flour and sugar together unless you also sell flour alone. You cannot force customers to buy your sugar in order to get your flour. Similarly, the government argued, Microsoft cannot tie Windows 95 (later, Windows 98) together with Internet Explorer unless it offers both the OS and the browser separately. Microsoft claimed technical efficiencies in bundling the products together.
This boils down to two legal issues. First, what was the motive in combining the OS and the browser? The answer to this is documentation and witnesses, subpoenaed by the government, and not technical. Second, does the combination achieve technical efficiencies beyond that of not combining the two? The answer to this is experimental, technical, based in computer science, and the focus of the rest of the talk.
Specifically, how did Dr. Felten go about testing the efficiencies or lack thereof? He started by hiring two assistants who reverse-engineered both Windows and Internet Explorer. (Note that this work, because it was done on behalf of the government for the specific trial, was not illegal. Doing so yourself in your own basement would be illegal.) After 9 months, they were able to get a program assembled to remove Internet Explorer from Windows.
The next step in the process was to prepare for court. In general, witnesses have to be very paranoid, nail down the technical details, have sound and valid conclusions, and learn how to be cross-examined. Lawyers, no matter your personal opinion of them, are generally very well schooled in rhetoric, terminology and framing of questions, and hiding assumptions in them. They're also good at controlling the topic, pacing the examination, and producing sound bites. In his testimony, Dr. Felten demonstrated the "remove IE" program. Jim Alchain, Microsoft Vice President, provided 19 benefits of tying the products together and claimed the removal program had bugs. In the government's cross-examination of Mr. Alchain, he admitted that all 19 benefits were present if IE was installed on top of Windows 95, and that the video used to show that the demonstration of the removal process had bugs had errors and inconsistencies. Microsoft tried a second demo to show problems with the removal program under controlled circumstances and could not do so. Furthermore, in rebuttal to Microsoft's assertion that the products had to be strongly tied together to gain benefits, the government pointed out that Microsoft Excel and Microsoft Word were not strongly tied and yet were able to interoperate without being inseperable.
Judge Jackson reported in his findings of fact in November 1999 that the combination had no technical efficiencies above installing them separately, Internet Explorer could be removed from the operating system, and tying the browser and the operating system together was, in fact, illegal.
The next phase of the trial was the remedy phase in May 2000. The goals of the remedy phase are to undo the affects of the illegal acts, prevent recurrence of those acts, and be minimally intrusive to the company, if possible. There are generally two ways to accomplish this: structural changes (reorganization or separation of companies) and conduct changes (imposing rules). The judge could choose either or both. The decision was reached to restructure Microsoft such that the operating system (Windows) would be handled by one company and everything else by another. Furthermore, in conduct changes, Microsoft could not place limits on contracts; could not retaliate against companies for competing in other markets (such as, for example, word processing); must allow PC manufacturers to customize the operating systems on the machiens they sell; must document their APIs and protocols; and cannot tie the OS and products together without providing a way to remove them.
Microsoft has appealed the case. At the time of this writing it is not clear whether the appeal will be heard in the US Court of Appeals or by the US Supreme Court. The remedies are stayed, or on hold, until the resolution of the appeals or until a settlement of some kind is reached between Microsoft and the US government. Once the case is truly over, Dr. Felten's slides will be made available through the USENIX web site, http://www.usenix.org/.