The Microsoft Trial June 4, 1999

Dahlia Lithwick worked for two years in a family law firm in Reno, Nev. She is writing a novel about how divorce affects children.

I am awakened outrageously early this morning by a phone call from my dad, an economics professor. He’s at his office already and has just read yesterday’s dispatch. Through a muzzy haze, I hear him give me this solemn charge: If I really want to understand the theoretical underpinnings of monopoly effects on markets, I must read Schumpeter. He spells this out slowly. S-C-H … Since I sleep through the spelling part and trial doesn’t begin until 10 a.m., I don’t get to Schumpeter today. But I’d be remiss if I didn’t charge each and every one of you thusly: If you really want to understand the theoretical underpinnings of monopoly effects on markets, you must read Schumpeter. I hope I’ve spelled that right.

Today is the fourth and final day of rebuttal testimony from silver-headed Franklin Fisher of MIT, the government’s answer to another MIT economist–and Fisher’s former student–Richard Schmalensee. Perhaps not surprisingly, Schmalensee has taken the position that Microsoft is One Feisty Competitor. Fisher counters that Microsoft is an Evil Monopolist. The morning shuffles by in a softball redirect by David Boies, the Justice Department’s soft-spoken lead attorney. The highlight comes just before lunch, when Boies lets fly with a videotaped deposition of a freshly-loofahed Steve Case, CEO of AOL, and a series of internal Microsoft e-mails.

The e-mails, Government Exhibit 1951, are dated Jan. 5, 1999, and represent a little panic-festival by Microsoft’s spin people, who continue to walk a tightrope between crowing about the strength of their market share and worrying about the strength of their market share. The e-mails begin with a 7:53 a.m. request from Greg Shaw, a press spokesman, to Yusuf Mehdi and Robert Bennett, also press men, for “data … that shows Netscape browser share is still healthy. The government is introducing a bunch of data showing NS headed down big time and Msft way up …” Bennett shoots back a 9 a.m. e-mail assuring Shaw that “NSCP share is declining and IE is gaining.” Uh oh. Mehdi jumps in at this point (9:32 a.m.) to remind Bennett that “rob this is for the trial so let’s provide the more negative analysts to greg so he can source counter points.” And so on.

Lots of giggles from the press corps while these are being read by Boies to Fisher. The point is made: Microsoft’s spin team is hard at work on Jan. 5, scrambling to show the world that Netscape is kicking Microsoft’s ass. What I wouldn’t give to see Netscape’s internal memos from that day. (“Dear Gloria, Microsoft is kicking our ass. Huzzah!”)

Today is also the day that I realize I’ve become so consumed by this trial that I’ve forgotten to wear deodorant for two out of the three days I’ve spent covering it. My colleagues in the press are nevertheless unfailingly generous with technical explanations, telephones, quotes, and the sorts of lurid insights unprintable in their own publications. Today, the lovely accented Rachel from ComputerWire.com tells me the Pez story from yesterday really is a metaphor for this, the free-market trial of the decade. “Pez,” she tells me, “is the free market. It’s a useless product everyone collects while Rome burns.” I have no idea what this means but it sounds profound. I write it down.

At the morning break I take a moment to introduce myself to Michael Lacovara, who’s representing Microsoft, and apologize for Wednesday’s comment about his starchy teeth. He assures me that I misheard his follow-up remark to Dr. Fisher’s comment about publishing for the money and suggests that I check Wednesday’s trial transcript. I concede that I may have been in error. I write this down. He then takes issue with my reference to his “polysyllabic technical words” in the same dispatch and assures me that if I take the time to understand the technical and microeconomic detail of the proceedings, I will see how very wrong Dr. Fisher is. Note to self: “really must read Schumpeter. S-C-H. …”

D.C. is a town of a thousand abstractions. This is why I was late for trial this morning. I was frozen outside the National Soft Drink Association headquarters on 16th Street. Staring up at this massive building. Wondering what they do in there. Wondering what they serve in their soda machines. Thousands of D.C. people must stride by the National Soft Drink Association every day without thinking how very strange it is that massive faceless entities are more real in the District than the cans of Sprite they are holding in their hands.

This trial is thus perfectly set in this town. It is a trial of a thousand abstractions. More and more I find myself thinking that these last few weeks of trial are reminiscent of the last half-hour of The Phantom Menace and its bizarre montage of four concurrent battles. There is a battle between the Jedis and the Freddy Krueger guy; one between Natalie Portman’s big hair and the pseudo-Japanese warlords; one between the towheaded kid and the monster warship; and the one between the floppy-eared guys and the droids (who appear only to be fighting for that coveted position in the Happy Meal giveaway). In that half-hour, you hurtle from battle to battle and it feels like you’re playing all four levels of a video game at once. You lose track of who’s who, and you can’t shake the feeling that no one–not the actors, not George Lucas, and certainly not the audience–really cares much in the first place. There is no “who” there. These people are just representations of an idea, symbols of an abstraction. They are forces of good and evil beating up on one another all over space. The characters are afterthoughts.

This is the sensibility of the Microsoft trial. It’s about symbols. The Microsoft icon might be a little PC. But of course the PC is only an idea. Click on it, and you find a dozen other ideas: the free market, Adam Smith, a cadre of blue-suited Sullivan & Cromwell lawyers, in-house counsel, press folks, Bill Gates, Steve Jobs … What Microsoft is, who Microsoft is, no one knows. It’s a monolith with a thousand manifestations.

The government’s icon is something a little fuzzier. A seal maybe? But behind it there are a million other ideas: the antitrust division of the Justice Department, Bill Clinton, the People maybe, the Consumer? But who or what is really driving the thing? Unclear from this trial. A monolith with a thousand manifestations.

There’s a pillar outside the courthouse. It’s halfway between the front doors and the steps on which the television cameras catch the lawyers at lunchtime each day. The pillar is teeming with sturdy renderings of justice in the colonial days. Perky little pilgrims in the stocks, tri-cornered hats on trial, curly-wigged magistrates. People. No Dark Empire. No Jedi Council. I don’t envy Judge Jackson. He’s presiding over a trial between symbols, and he has to pick a Darth Vader and a Luke Skywalker. Use the force, Judge.

Click here   for dispatches from the last session of the Microsoft trial between October 1998 and February 1999.