Microsoft is the most valuable company in the world, worth about $470 billion. Many Americans believe that the competitive success of companies like Microsoft guarantees the continuing success of the US economy. It is remarkable, therefore, that the US government began an anti-trust action against Microsoft, and that the judge in that action eventually found as fact that Microsoft has acted as a relentless and predatory monopolist. Final judgment in the case is not expected until next year and settlement negotiations continue between Microsoft and the Department of Justice.
Although their exact nature is not yet clear, this case will have long-term repercussions. One result may be that regulators and the courts will become more involved in how the Internet, software and technology industries do business. Already, several US law firms are preparing class actions to seek damages from Microsoft for losses allegedly suffered by consumers as a result of Microsoft's behaviour as a monopoly.
Such moves are controversial. Up to now, regulators and judges have been conspicuous by their absence from these industries. This fact may partially account for the very rapid growth in these businesses.
Europe has similar anti-trust rules to the US. Contained in Articles 81 and 82 (previously 85 and 86) of the Treaty of Rome, these rules were invoked by the European Commission against Microsoft in an earlier action which ran in parallel to an earlier action in the US. In this case both the European and US actions ended in compromise, with Microsoft giving identical undertakings in both Europe and the US.
A major problem for the European Commission is that the information technology and Internet industries are dominated by the US. Any attempt by Europe to regulate them could easily be characterised as being anti-American or anti-competitive. This may explain why the European Commission did not join in the current action against Microsoft.
Ireland has its own rules on competition, The Competition Act 1991-1996, Section 4 of which prohibits "anti-competitive agreements, decisions and concerted practices" such as price-fixing. Section 5 prohibits "abuse of dominant position", which is essentially what Microsoft is accused of in the current US case. Competition law can be enforced by the Competition Authority, or by any aggrieved person taking a case to the High Court, which can impose a variety of penalties ranging from damages to prison sentences.
A major problem with using the courts to regulate a rapidly growing and swiftly changing industry such as the Internet is the comparatively slow pace at which the courts move. The current case against Microsoft essentially relates to the development and sale of Windows 95. Microsoft has updated this software since and will release Windows 2000 early next year.
Arguably, Judge Jackson's findings of fact are already out of date, and any appeal might take another two years. At that stage a decision might be of no more that historical interest. A similar problem afflicts the Irish legal process. A High Court action might typically take two or three years to reach trial and an appeal to the Supreme Court could take one or two more years.
This slow pace is causing problems for the development of Ireland's physical and telecommunications infrastructure and the Government is reported to be considering setting up a special planning court to ensure implementation of the proposed national development plan.
Denis Kelleher (www.ncirl/itlaw) is a practising barrister and co-author of Information Technology Law in Ireland (Butterworths) and IT Law in the European Union (Sweet & Maxwell).