Raging Bill

The Microsoft antitrust case was a metaphor for the ’90s. Or, what do Gates, O.J. Simpson, and Bill Clinton have in common?

By Dan Kennedy

It was the 1990s’ singular contribution to pop culture: the rise of the celebrity show trial as a metaphor for our national anxieties. The O.J. Simpson case was as much about our conflicted attitudes toward race, wealth, and celebrity as it was about the üorrifying murders of two people. The Clinton/Lewinsky/impeachment fiasco forced us to confront our contradictory notions about sex. No, a powerful executive should not abuse his position by taking advantage of the help. But a blowjob is just a blowjob, after all, and how did we ever get to the point where a prosecutor could grill you about it under oath?

Looming over all this is what’s been called the Antitrust Trial of the Century: United States v. Microsoft, the massive legal action that brought Bill Gates to heel and has left his company on the brink of being split in two. Of course, big antitrust cases are a little bit like championship boxing matches in the sense that a Trial of the Century comes along every few years; witness the IBM and AT&T cases of decades past. Hyperbole aside, though, the Microsoft case was special, because nothing less than the decade itself was on trial.

If the ’80s were about pure greed, the ’90s were supposed to be about something nobler than that: a New Economy built on technological advances, hard work, and visions of a better world that just so happened to make a generation of brilliant, socially inept geeks wealthy, almost as if by accident. Symbolic of all this was the cybergeek himself: Gates, a Harvard dropout whose software company helped make personal computers ubiquitous and contributed mightily to the Clinton-era stock-market boom.

But there was a dark side to the boom — a dark side that was revealed in the 1998-’99 antitrust trial, which brought to light some ugly truths that had long been known to computer-industry junkies, but that had eluded the Microsoft-worshipping public. The truth about Microsoft was that its software was generally mediocre and derivative, and that it had built a monopoly by buying out its competitors when it could and crushing them when it had to.

The center of Microsoft’s power was its ownership of the Windows operating-system monopoly, which it could wield like a nuclear deterrent to keep its corporate customers in line. It was the Windows monopoly that greased the path for Microsoft Office, a so-called productivity suite of business applications (Word, Excel, and the like) that finished off competitors such as WordPerfect and Lotus. And — as the government showed in Judge Thomas Penfield Jackson’s courtroom — it was the Windows monopoly that gave Microsoft the power to destroy Netscape, an upstart whose pioneering Web browser, Navigator, could have evolved into an Internet-based operating system, making Windows obsolete.

By threatening to withhold Windows support, Microsoft was able to intimidate companies such as Compaq and America Online into dumping Navigator in favor of Microsoft’s own Internet Explorer. (AOL actually bought Netscape in the middle of the Microsoft trial and plans to switch back to Navigator this year.) And as proof that one monopoly can lead to another, Microsoft was even able to muscle Apple, whose Macintosh operating system is the only commercially viable alternative to Windows. Dump Navigator, Apple was told, or we won’t develop a new Macintosh version of Office. Apple did what it was told.

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The Microsoft trial is the subject of two new books, Ken Auletta’s World War 3.0: Microsoft and Its Enemies (Random House, 436 pages, $27.95) and John Heilemann’s Pride Before the Fall: The Trials of Bill Gates and the End of the Microsoft Era (HarperCollins, 246 pages, $25). Parts of Auletta’s book previously appeared in the New Yorker, where he is on staff; Heilemann’s is an expansion of a piece he wrote for Wired. Together, they serve as an exclamation point, signaling the end of a remarkable era. The stock market is in the toilet, and though Microsoft is no Pets.com, its stock price is about half of what it was at the peak. (Disclosure: I own a few shares of Microsoft, although with the exception of Internet Explorer for the Mac, I refuse to use Gates’s cruddy products.) Clinton is gone, replaced by a minority president who seems utterly incapable of understanding that we liked the ’90s. (bush: ‘our long national nightmare of peace and prosperity is finally over,’ proclaims the Onion, that quintessential ’90s phenomenon.) The rest of us — Bill Gates included, perhaps — are left to wonder whether it was all just a dream.

Both Auletta and Heilemann do an admirable job of reporting what happened, and of putting it in a larger context. Though they show — as did the government — that Microsoft’s behavior was corrupt, abusive, and, finally, illegal, they also go to great lengths to question whether any of it really mattered. As Gates himself knows all too well, the action in computing over the past half-dozen years has moved from the desktop to the Internet, which in turn is migrating to a new generation of devices: cell phones, personal digital assistants, kitchen-counter boxes such as 3Com’s new Audrey, and the Sony PlayStation. Even without the antitrust trial, the “Microsoft Era,” as Heilemann calls it, might have been a short one indeed.

Auletta’s approach is to get deep inside the courtroom, offering voluminous details — more than an average reader might care to absorb — about the legal teams, the witnesses, the arguments, and the evidence. Heilemann’s book is a quicker, more entertaining read; and if he lacks Auletta’s courtroom access, he more than offsets it by being better plugged into the West Coast, where the seeds for the case were planted. Heilemann tells colorful stories about characters such as Gary Reback, a Silicon Valley lawyer representing Netscape who had been crusading against Microsoft for years. (“His heart’s in the right place,” another lawyer told Heilemann. “But he’s twisted. He leaves me these voicemails in the middle of the night, raving about all kinds of stuff. He really needs some help.”) Incredibly, Reback’s arguments about Microsoft’s thuggish tactics turned out to be largely true, and his research helped pave the way for the antitrust case.

Even more amazing — and disturbing — is the story of “Project Sherman.” With the encouragement of the Justice Department’s antitrust chief, Assistant Attorney General Joel Klein, Microsoft archrival Sun Microsystems spent $3 million putting together a top-secret legal and economic argument for why an antitrust case should be brought. Microsoft has always maintained that the Justice Department was a front for competitors who just weren’t good enough to keep up. Even if there was nothing technically unethical about Project Sherman, it does stand as evidence that Microsoft’s paranoia was justified.

The star of both books, though, is Bill Gates himself. In World War 3.0 he appears mainly as a disembodied image hovering over the courtroom, as David Boies, the lead government lawyer, plays bits of Gates’s videotaped deposition to disastrous effect. Auletta makes it clear that Gates’s testimony, in which he is seen evading, denying, and just plain lying, was the key to convincing Judge Jackson not only that the company was guilty, but that it needed to be whacked with the most extreme punishment possible: break-up. (The non-virtual Gates also pops up from time to time, mainly to scream at Auletta.) In Pride Before the Fall, Gates plays both the White Whale and Ahab — a source of fear and hatred for his competitors in Silicon Valley, but in his own mind beset by forces beyond his control.

Ultimately, the Microsoft case is about hubris. As portrayed by the government, as well as by Auletta and Heilemann, that hubris resides mainly in the person of Gates, whose arrogance, ego, and ambition were so overwhelming that he wouldn’t settle the case against him — even though, early on, he could have gotten the feds out of his ineptly coifed hair with harmless steps such as giving away Windows and Internet Explorer as two separate products rather than an integrated whole. Now he faces something infinitely worse: the break-up of his company and legal problems without end.

As Auletta and Heilemann both make clear, Gates bet his company on winning the antitrust case, and lost — and nothing short of an unconditional (and unlikely) victory in the Supreme Court can undo the damage, not even a decision by the Bush administration to drop it or settle out on generous terms. For one thing, Jackson’s “findings of fact” stand no matter what, and that legal document — ruling that Microsoft is indeed a monopoly and that it illegally abused its power — will make it infinitely easier for other parties to bring suit. For another, Microsoft’s image has been tarnished beyond repair. Top talent has fled the company, and Auletta and Heilemann contend that Redmond, Washington, is no longer seen as the place for brilliant young geeks to be.

èore than anything, though, Gates/Microsoft/Windows is very ’90s, and the ’90s are over. Both authors mention Gates’s burgeoning interest in philanthropy, but they don’t seem fully to appreciate its significance. Last November, the New York Times published an article on Gates’s charitable efforts that made clear just how much his passions have changed. As the head of the $21 billion Bill and Melinda Gates Foundation, he is now one of the world’s most important philanthropists. And he is as deeply involved in philanthropy as he once was in running his software company — speaking out, arguing with his fellow technology billionaires over how best to give away their riches. According to the Boston Globe, the Gates Foundation spent more money last year on fighting global health problems than the entire US government.

The impression is of a man, now nearing 50, who’s accomplished everything he can in business and who has turned his attention to far more important things. Somehow it’s difficult to picture this man obsessing over every little feature in the next versionýof Windows; of maintaining his Darth Vader–like edge in running a corporation where the term “hard core” was once both a philosophy and a way of life. Indeed, he has turned over the management of the company to his long-time consigliere, Steve Ballmer, who, though aggressive (both Heilemann and Auletta repeat the oft-told tale of Ballmer’s blowing out his vocal cords screaming “Windows! Windows!” at a company rally) and intelligent, is a lesser figure than the founder.

The verdict on the ’90s is not yet in, but the Microsoft case points to its general outlines. Bill Gates — like O.J. Simpson and Bill Clinton — thought the rules didn’t apply to him. And like Simpson and Clinton, he found out that they did and they didn’t. In a sense, Gates got away scot-free; he’s still the richest man in the world, his company is intact (for now), and new versions of Windows are making their way onto desktops. But he, like his fellow celebrity defendants, is a permanently diminished figure, his best days and greatest triumphs behind him.

With the seemingly endless boom at an end, and with George W. Bush admonishing us to embrace virtues that fit his pinched world-view far better than they do ours, it appears, finally, that Bill Gates’s pain is our own.

Welcome to the ’00s.

Dan Kennedy can be reached at dkennedy@phx.com.