"Plausible benefit" is key phrase in Microsoft trial
In the federal antitrust trial with the software giant, the case now could be boiling down to a question of "plausible benefit" for consumers.
Plausible benefit has emerged as one of the key issues, and most commonly uttered phrases, in the final oral arguments of the trial, taking place today in front of a relatively uncrowded courtroom here. The trial is taking place while settlement talks continue in Chicago.
The phrase refers to what occurs when companies with monopoly power combine, or tie, products together. One of the major claims in the case is that Microsoft combined its Internet Explorer Web browser to its Windows operating system in an effort to dominate the browser market.
Microsoft attorney John Warden argued that companies could tie products
as long as some sort of benefit to the consumer emerges. The U.S.
Court of Appeals for the District of Columbia in a previous Microsoft case,
in fact, ruled that plausible consumer benefits could justify Microsoft's
decision to bundle Windows 98 with Internet Explorer. A brief filed by
Harvard Law School professor Laurence Lessig, at the request of the
government, also supports this argument, Warden stated.
"Even if Microsoft's motives were anti-competitive," he said, speaking hypothetically, Microsoft's actions would be legal if consumers benefited.
"The question of tying is the single most important issue in this case, and no court has ever sustained such as claim," Warden said.
In one exchange, Judge Thomas Penfield Jackson asked Warden, "Are you saying that the Court of Appeals ruling is binding on me?"
"Yes," Warden replied. "If there is plausible benefit."
Jackson, however, signaled in his questions that he believes the tying issue revolves around more than just plausible benefit. Jackson asked Warden a series of hypothetical questions. What if the New York Times, for instance, told consumers that they had to buy the Sunday edition in order to get the daily edition. Would that be an example of legal tying? Warden said he didn't know.
Jackson then threw a tractor-trailer question at Warden. What if a trucking company with a monopoly released a truck that could only be hitched up to a particular type of trailer, which they also made.
Warden said that that would be a violation. However, he said the hypothetical situation didn't apply to Microsoft because users can hitch other browsers to the OS.
The Justice Department (DOJ) is arguing that a company's motive in tying is what matters. If the company saw a plausible benefit to consumers in the design stage, tying can be permitted. However, companies can't use subsequent, unforeseen benefits to justify anti-competitive behavior, the DOJ argued.
Besides countering Microsoft's arguments about the Court of Appeals ruling and Lessig's brief, attorneys for the DOJ are assiduously avoiding using the word "tying" in its arguments. Instead, lead attorney David Boies states that Microsoft "bolted" Windows 98 and Internet Explorer together.
Surprisingly, the oral arguments are not drawing the crowds this case has seen in the past. Empty seats are available in the courtroom and there is no line to get inside.
So far, the tone of the hearing has been fairly collegial. Before the hearing began, Microsoft chief counsel William Neukom went over to shake hands with Joel Klein, one of the lead prosecutors in the case. Both sides have also avoided flamboyant, stentorian stances during today's arguments.
Rebuttal arguments will take place later in the day.