IF THE LOOMING Microsoft antitrust settlement were an Xbox game, Trustbusters with rocket guns would relentlessly whittle pointy-helmeted Tekkies down to their last Gatesman and, rising atop the precipice of victory, suddenly give up. You wouldn't see that weird surrender scene, though. It mysteriously unfolds behind closed doors in a D.C. office, where last week a Microsoft attorney and Justice Department lawyer quietly forged an agreement out of the 1997 complaint over the company's "past unlawful conduct."
The monopoly case of the century was essentially over, guaranteeing, said a positive-spinning Attorney General John Ashcroft, "relief to the market." A handful of states this week were unwilling to sign off on the agreement and may end up jousting individually with both Microsoft and its new ally, the federal government, in further court proceedings. Nonetheless, a deal unreachable with the Democratic Clinton administration is assured with the Republicans under Bush, for whom war and economy have provided additional settlement pretexts. (Did it hurt that Bill Gates and Microsoft gave $3.7 million in recent GOP campaign contributions?) Maybe now we know what Gates really meant when he said a year ago, "This is a case that will be decided by a higher-level court."
Microsoft was not calling it a win, however. Gates once labeled the charges "malicious . . . an unfortunate distraction . . . worse than dumb" and last week upgraded the settlement pact to be just "fair and reasonable." He put on a somber face for the TV audiences. But wasn't that a party hat poking out his back pocket? If, as he told Charlie Rose, the deal "would be good for consumers and the overall economy," wouldn't it be great for Microsoft's economy?
For one, the Mighty Nerds of Redmond can rip up those tentative logos for "Microsoft North" and "Microsoft South." Thanks to an appeals court decision in June that aborted a breakup ruling, the agreement means the company will remain one nation under Bill. While the new five-year, 21-page agreement promises software info sharing and would limit Microsoft's power to dictate to the market on such things as placement of desktop icons—changes to be enforced by a new campus precinct of antitrust cops—it is otherwise business as usual: No unholy limitations, no disabling giveaways, no apologies for corporate bully tactics. Gates remained stoic in the face of abject victory, but he conceded there was an up side, the "positive aspect to this in terms of understanding what the rules are." It had all been just a case of interpreting what is or isn't restraint of trade. After all, the Sherman Antitrust Act has been around for only 111 years.