 |
One major point of contention between the two conflicting remedies concerns who will oversee Microsoft's compliance with the final judgment. The following analysis focuses on some of some of the key differences in the proposed oversight bodies and their potential consequences. The analysis concludes that the settling proposal contains too many questionable and unorthodox provisions, enough so to require revisiting the provisions, or replacing it with provisions from the non-settling proposal.
Settlement highlights
In Section IV.B of their proposed final judgment, the Department of Justice, Microsoft, and the nine settling states outline the structure of a technical committee (the "TC") designed to "assist in the enforcement of and compliance with" the final judgment. The TC would consist of three people: one selected by Microsoft, one by the DOJ, and the third to be selected by the first two. The DOJ and Microsoft can only object to the other's selection based on the proposed member's failure to satisfy any requirement listed in the settlement.
The requirements specify that each member of the TC be an expert in software engineering who has not worked for Microsoft or a Microsoft competitor within the last year. Also, the TC members cannot work for Microsoft or a Microsoft competitor for two years following their TC term expiration, and they cannot serve as an expert in the antitrust case.
The proposed TC will have broad access to all Microsoft's resources and personnel, and an attorney can be present when personnel are being interviewed. The TC can hire additional consultants to help it do its job, but those consultants must meet the same requirements as the TC members themselves. The TC will report its findings and recommendations to the DOJ, although none of the work, findings, or recommendations of the TC are admissible in court, nor can any of the TC members be deposed or testify in any proceeding related to the final judgment.
Microsoft will cover all expenses of the TC. The TC will work from offices at Microsoft's Redmond,WA campus.
Highlights from the non-settling states proposal
Section IV.B's cousin in the "non-settling" proposal is Section 18. Instead of a technical committee, Section 18 proposes a court-appointed Special Master to direct the oversight. The Special Master and the court will work together to hire a three-person advisory committee. The members of that committee can specialize in any discipline (including but not limited to software engineering, business, and economics) as deemed necessary by the court. Either side can file objections to the selections for any reason.
Upon approval from the court, and on an as-needed basis, the Special Master could hire additional consultants to assist with his or her responsibilities. The Special Master could investigate and hold hearings regarding any complaint of non-compliance, and report his or hers findings to the Court. All work performed by the Special Master and the advisory committee would be admissible in court, and the Special Master or anyone acting in an advisory capacity to the Special Master may be deposed or asked to testify in court.
Microsoft would be responsible for all of the Special Master's expenses.
How they compare
All parties involved are customarily entitled to object to any appointment to the technical committee, Special Master, or advisory committee. The Court would normally entertain such objections and then make a final determination based on the arguments heard from the involved parties. It is not customary to place limits on what the involved parties can and cannot object to, nor is it customary to require an exclusive skill set (such as software engineering) for those charged with compliance oversight.
The defendant is normally is required to pay the Special Master's expenses and those expenses may include the maintenance of office space. But the office location is normally left to the discretion of the Special Master.
Our conclusion
Since it's difficult to assume that the litigants are impartial, it makes more sense for the compliance committee to be an extension of the Court. Neither the DOJ nor Microsoft should have a say as to who oversees compliance--in fact, precedent dictates that the Court should determine who directs oversight. Furthermore, setting up a technical committee that's beholden to the Department of Justice instead of the Court is questionable. Theoretically, the Court is much more insulated from political influence than the Attorney General. With the Court solely in charge of compliance oversight, the final judgment runs a much better chance of maintaining the public's confidence in the integrity and impartiality of the judicial process. (This is another criteria from ZDNet's Rating the remedies.)
Requiring those charged with oversight to have a specific skill set as opposed to leaving that up to the determination of the Court could favor Microsoft. This is because a technical committee consisting only of software engineers may lack the business, economic, or legal acumen required to spot business-related violations such as forbidden business dealings. Both proposals have such non-technical provisions.
There should be more specifics in regard to questions such as "what constitutes a conflict of interest?" The settling proposal's attempt to articulate these specifics is a good start, but could go further. For example, suggesting that a technical committee member is free from conflict of interest just because he or she hasn't worked for Microsoft in a year may not be good enough. Is one year enough? Can the committee member be a stockholder or a former Microsoft executive like Brad Silverberg that has made millions off the Microsoft juggernaut? Currently, the way the settling proposal is written, if Silverberg were an expert in software engineering, he could very well be the member that Microsoft places on the committee, and the DOJ would not be able to object.
Requiring the TC to operate from company-furnished offices at Microsoft's Redmond campus could create a conflict of interest. Keeping the TC at arms length helps to maintain the committee's impartiality and instills the public's confidence in the integrity of the judicial process. In addition to putting the TC under the watchful eye of Microsoft executives, the TC runs the risk of having Microsoft's culture rub off on its members, potentially softening their position because of the relationships they establish with Microsoft personnel. Under the non-settling proposal, the location decision would be left to the discretion of the Special Master. The Special Master could accept Microsoft's offer. But if it appeared as though a conflict of interest was evolving as a result of the location, the Special Master would have the freedom to relocate the committee.
While many of the provisions suggested by the settling proposal are objectionable, perhaps none raises a red flag more than the proposal's attempt to disqualify the TC members and the work that they compile from any subsequent court proceedings. As it is written now in the settling proposal, if, after a year of specific investigations, the TC determines that Microsoft may be in violation of the final judgment, the Department of Justice would have to develop its case based on its own fact finding, subpoenas, interviews of Microsoft personnel, and expert witnesses. None of the work performed by the TC, nor testimony from the actual members of the TC would be admissible.
The provision creates the potential for an intolerable delay between the time a violation is spotted and relief is ordered. In its June 2001 opinion, the United States Court of Appeals expressed concern over the ability of any antitrust remedy to achieve its objectives in a technology dynamic market. If, after a protracted period of discovery and case-building, Microsoft was found to be in violation of the final judgment, significant and irreversible damage to the relevant market would probably have already taken place. The idea of an antitrust remedy is to terminate the illegal monopoly, restore competition to the relevant market, and be forward looking. A remedy should not create conditions under which the defendant could maintain its monopoly or create another.
Who do you think should direct compliance oversight? Write to me at david.berlind@cnet.com, or use the Talkback button.
Linda Eads, a professor of law at Southern Methodist University, contributed to this report. Eads has taught courses on the Microsoft antitrust case and, prior to joining the SMU faculty, served as the Deputy Attorney General for the State of Texas where she was in charge of the state's antitrust division. After Eads' tenure with Texas' Attorney General's office, Texas pursued Microsoft on antitrust charges, but later ceased its antitrust actions.
The "settling" proposal's suggestion of a technical committee instead of a Special Master is unusual. In keeping with the manner in which antitrust remedies are usually handled, (one of the ten-points in Rating the remedies), a Special Master that reports to the Court is more customary than a technical committee that reports to the Department of Justice.
If the Court were to proceed with the Technical Committee structure as put forth by the "settling" proposal, it would be tantamount to having the fox guard the hen house. It's difficult to assume impartiality if Microsoft is given roughly half the vote over the compliance committee's composition.
