 If ever there were a case where saying I'm going to introduce someone who needs no introduction, we're true. This really is it. So I won't say much other than to say that we all know David and know who David is. Truly one of the most accomplished, successful, and just phenomenally talented trial lawyers, certainly of our time and probably of any time. It was a real pleasure working with him for the, it seemed like, very long time of the Microsoft trial. And as you know, that was only one of many, many, many really important, really high profile cases in which he has made a phenomenal contribution and a phenomenal difference in the outcome. So we're thrilled to have him here and thrilled to hear from him. David? I don't know. Let's see. Well, anyway, now there you go. It's hard to believe it's been 10 years. And it's good to see so many familiar faces. The Microsoft case was, of course, many different things. It was a complaint, it was an investigation, it was an analysis. It was a negotiation, actually several negotiations. It was finally a remedy, a decree. But one of the things it was, and for me the thing that was most central, is that it was a trial. And in our country, every trial is really two things. It is a search for truth and it is a morality play. And when you have an antitrust trial, those two things that every trial is are very interesting to mesh. Because the search for truth, particularly in an antitrust case, is inherently difficult, complex, ambiguous, data-driven, technology-driven. You've got to get into the details of very difficult industries, very difficult technologies. And the morality play has to go on at a very high level of generality. You try to adapt it, obviously, to the case at hand. But by its very nature, it drives you from the data to the dramatic. And if you were designing a system in an entirely perfect world, you probably would not design a trial system that depended on it being a morality play. Now, every time we go back to the drawing board and try to figure out a better way to try cases like this, we look at the other places in the world where these cases are resolved, like the EU. And we come back saying, well maybe the way we're doing it isn't so bad after all. But that should not take away from the recognition that the way we do it is peculiar in terms of important decision-making. If you were sitting down trying to think of how are we going to make a decision as to whether, for example, the browser should be integrated into the operating system. You would not immediately spring to mind well what we're going to do is go in front of a general-purpose judge who has no technological background, not really a lot of resources. And we are going to have him make that decision based on an adversarial proceeding in which people come up and they ask questions and answers and nobody in that courtroom, other than the judge and maybe the court reporter, is designed to do something objective. The problem is that unless you have some alternative to the adversary system, some better alternative to the adversary system, what we're stuck with is a method of dealing with these kind of cases in a forum that inevitably draws you to the dramatic, inevitably draws you to trying to make a morality play and teach the judge from your perspective. Now, luckily in government antitrust cases, you are in front of a judge and not a jury. A lot of antitrust cases obviously are tried to juries and so if you take the limitations on a judge deciding a complicated economic technological issue and you add to that the less trained jurors and then you deprive the jurors of every tool that you give the judge like briefs, oral arguments, the ability to ask questions. All of the tools of decision making that you give a judge to sort of help him through this, you deprive a jury of. A jury can't get briefs, can't get written materials, can't ask questions. They just got to sit there and hope that their puzzled expression will lead you to figure out what it is is bothering them. So an antitrust case and most antitrust cases are not government cases, most of them are private cases, most of them are tried to juries and so it becomes even more of an emphasis on a morality play and less on the data and the technology and the science. But in a government antitrust case, at least you have a judge. But remember that the judge, if the judge is technologically trained, it is just random. The federal judges are designed to be general purpose jurists. They are not designed to be experts in any particular area. And just as an aside, whenever we have tried to get judges that are particularly expert in the area, like the Federal Circuit, where we try to put our patent cases and our electoral property cases because other judges just throw up their hands with them, what you find is you find troubling developments. You find the judges losing the broader perspective. There is a reason why the Supreme Court, almost every time it takes a case from the Federal Circuit, reverses. And that is because the Federal Circuit tends to become too narrowly focused just on their particular subject matter. And so even that solution doesn't work very well. So we keep being driven back to the idea of having a general purpose jurist decide these cases. And so how do you do that? We obviously try to persuade him. How do you try to persuade him? Well, like most human beings, they are partly persuaded by data, but they are also persuaded by drama. And so one of the things that you do when you're trying a case, even an antitrust case, is you try to simplify the issues. You try to make the issues real so that the judge can understand them and build on them. And when you have something that is particularly difficult and complex, the trial comes down to an increasing extent to an issue of credibility. And the reason is simple because if somebody is talking about how to make a sandwich, we all have experience making a sandwich, and we can judge can bring to that decision a certain amount of knowledge. He doesn't have to rely exclusively on what he's hearing from the witnesses and the lawyers. If you come down to the question of how do you make an operating system, how do you make a browser, that is not something that the judge or, frankly, the lawyers are going to figure out on their own. You're going to have to listen to people, and it is the nature of a trial that each side tends to find people who agree with them. And you tend to find fact witnesses that agree with them. You tend to find expert witnesses that agree with you, and you put those people on. And since each side has an opposing view and each side has the ability to pick their witnesses, and each side, in a rational world, picks witnesses that agree with them, you almost always get two sets of witnesses, both well-educated, well-credentialed, people of integrity, who come into court and say to the judge, flatly inconsistent things. And so how does the judge choose between these things? The judge chooses, like most human beings chooses, well, who do I believe? And part of that belief comes from admissions that you get on cross-examination. But a lot of that comes from what does the judge think about who's being candid, who's being direct? And as a result, when you have a witness that a judge concludes has a problem in terms of credibility, and that can be a real problem or it can be an apparent problem, the effect is the same. As long as the judge concludes that the witness is not being credible on one area, that can affect that witness's credibility in other areas, and the more complicated the subject matter, whether it is economics or technology, science, medicine, the more complex the subject matter, the more credibility matters. You might think that credibility most matters in a non-science case. Was the light red or green? Was the person speeding or not speeding? In fact, credibility matters most in the most complex science-based cases. Because it is in those cases that the judge and particularly the jury, if you have a jury, is less capable for deciding for themselves whether what the witness is saying makes sense or not. And those of you who lived through the trial know that there were a number of times in which you would have somebody's testimony that would go on for hours, sometimes days, and there would be only five minutes or ten minutes of that that would be reflected sometimes in a press report. And people would come out and say, well, that's very misleading. That didn't really reflect what the witness was saying. Those were credibility points. They didn't really go to the heart of what the witness was saying. And there was a sense in which that is true and a sense in which that entirely missed the point. Because the point is that just like the reporter sitting there and trying to make sense of what's going on, the judge is sitting there trying to make sense of what's going on, and just like the reporter is focused on, who do I believe, who's credible and who's not credible? That's what the judge is doing, too. And I can pick on Dean Schmollensy since he's not here. And as most of you know, and anyone who knows Dean Schmollensy knows, this is one of the best economists in the country and one of the most effective economic expert witnesses in the country. He is smart. He is articulate. He has had the good fortune to win the same prize that Frank Fisher won. Yes. The one for under 40. You didn't? Well, he says. He tells me he did. All right, sit there. There you go. Now, if I'd only known that during the trial, think what I could have done with that. But except for that lapse in his resume, he is somebody who is a credible and effective witness. And most of his testimony, if you add it up, was credible, effective, balanced, and supported. But there were a few lapses in that testimony. And one of them, for those of you who have the trial, remember, involved the Harvard Law Review article. And one of the arguments that we didn't really push at the trial because I don't think most of us had much confidence in it and certainly Frank Fisher disagreed with it completely was the idea that you could somehow infer some monopoly power from the fact that Microsoft made a lot of profits. And there may be at the core something to that argument if you could strip away the difference between economic profits and accounting profits and make all sorts of adjustments. I think Frank would say you can't inherently do that. It was an issue, as I say, that none of us thought was the key to our case. However, one of the questions that I asked Dean Schmoll, as he on the stand, was did he believe that persistent high profits were at least some indication of monopoly power? And he, like Professor Fisher, if he'd been on the stand, disputed that. And indeed he pointed out that Professor Fisher, also my expert, agreed with him that it was irrelevant. The problem was that I then showed him a document and asked him to read it. And what the document said was that persistent high profits was one of the three indications of monopoly power. And of course he was the author of that article. And he got the article, he looked down at the article, looked back at me, looked back down at the article, looked at me, shook his head and said, what could I have been thinking of? And that was an entirely candid response to a point of limited relevance to the case. But it was something that had a credibility effect in terms of how the judge and other people would look at this testimony. And that's just one example, and there are many examples in almost every trial, of where the credibility issues, the morality play issues, emphasize points that are not, right, are not, would not in an ideal world be the basis for decision making. And one of the challenges for judges and one of the challenges for lawyers on either side is to try to diminish the effect of these kind of lapses on the overall credibility of a witness. But when that fails and when a judge gets to the point where the judge has a general dubiety about a side's credibility, that is when, particularly in this happened, the more complex the case, the more this is true, the more difficult that side has a problem. And I think that one of the things that for a trial lawyer is interesting is from the standpoint of the trial as a morality play. From an antitrust lawyer, you're interested in what is the case accomplished? And it always gives me great pause to follow Doug Melamed in any discreet discussion of antitrust law. And I think that probably what he told you at the end of the last session was a more articulate and concise description of what the, with one exception I want to come to, of what the case accomplished from an antitrust standpoint. But from a trial standpoint, from a morality play standpoint, I think one of the things that it emphasized was the importance in a high-tech, complicated issue trial of what you know when you try a negligence case, a slip and fall case, an automobile accident case. Most antitrust trials are tried not like they were trials, but like they were some kind of academic investigation with people up there with a lot of boring charts and numbers and just a deadening impact on the trial effect. And I think that one of the things that if you look at it, not as an antitrust trial, but simply as a trial, that we did in the Microsoft case is that we treated as a trial. We said, okay, how do we persuade? How do we take this issue, whatever the issue is, and persuade? From an antitrust standpoint, I think the one thing that I would add to what Doug said was that in addition to the substantive advancements of antitrust law, I think one important antitrust accomplishment of the trial was to demonstrate that the government could indeed try a large, complicated case and that counsel and the court could bring one of those cases to trial in a reasonable period of time. I think that if you look at where we were 10 years ago, I think most people would have said, not only does the antitrust law have little ITEC industries, they would have said that Section 2 is almost a dead letter for a major industry. The government morass of the IBM litigation, I think, had led people over time, to some extent in exaggeration, to believe that the government simply couldn't try a major Section 2 case. And I think that one of the things that the Microsoft case, not just the trial, but the case demonstrated, was that you could take a complicated Section 2 case and they could bring it to trial on an accelerated basis and get to a decision. And I think that that was a significant accomplishment, in addition to the substantive accomplishments that Doug talked about. Every major event in life, or almost every major event in life, has unintended consequences. And I think that when we think back on the Microsoft case 10 years later, I think in addition to thinking about what does it teach us about trying implicated cases, what does it teach us about trying antitrust cases, what does it teach us about developing antitrust laws. We also need to focus on what does it say about the unintended consequences of this particular case. One of the unintended consequences of this case was that a case that started out as essentially a Section 2 case and attack on using the browser integration to attempt to forestall competition to the operating system. A theory that only made integration important if the code or whatever it was that was being integrated could serve as the basis of new competition. This has gotten transformed in a lot of people's minds into an attack on time, technological time, bundling itself. And you heard that a little bit this morning in terms of Microsoft because Microsoft is worrying about do we integrate antivirus software. Now antivirus software doesn't have any, at least I mean maybe it does, but I don't think and no one has ever suggested to me that antivirus software has any capacity to generate new competition for the operating system. And if that's so, the thrust of the government case ought not to have affected that. But it does and I think one of the unintended consequences and this is partly a consequence of the transformation of a construct to an implemented trial in which you lose a lot of the fine tuning, you lose a lot of the fine distinctions. A number of times after a day in court Doug and I would talk and he would say well that's not what our case is about and he would be right in one sense in the sense that that's not what our case theory was but it fit together with the morality play aspect of how we were presented to help somebody, at least in my view, put things into context. And so the very process of a trial tends to take a carefully constructed and analyzed complaint with a theory and then it implements it in a much grosser way and that can lead to confusion at the end as to what does this result really mean and that can lead to, we're very careful as Doug has said not to allege that a zero price in effect was a tie, not to allege that the mere fact that something had been integrated without a separate price was an illegal tie. And yet if you have something like antivirus software and you have brought it in and it has no competitive effect on the operating system it may obviously have a competitor effect on the people who produce antivirus software but if it has no competition effect it is not something that was contrary to the theory of the case and yet it is something that I think in practice is affected. Another unintended consequence is what's happening in the EU. I think that what's happening in the EU has probably a number of root causes including some of what we're talking about at lunch in terms of the diminished capacity of our justice department to influence what happens in Europe for a variety of reasons. But if anybody had said at the time that we were discussing filing the complaint, well the result of this is going to be the kind of fines and orders that you're getting out of the EU. I think that probably the predominant effect would be that if that's going to be the end result we're not sure that the interim result that we're trying to achieve here in the United States is unbalanced, justifiable. And so one of the unintended consequences of this I think is what was generated in the EU and how that has developed over time. I think another unintended consequence but an inevitable consequence is to make every company in this kind of position and not just Microsoft but every company in this kind of position who now has a higher recognition that their conduct may be challenged more bureaucratic in terms of decision making. Now that's not necessarily bad. I mean bureaucracies are not necessarily bad. I mean bureaucracies can be good when they are accomplishing something. Most of the federal government is a bureaucracy federal government does a number of things that are good contrary to some people's points of view. But one of those things is it can enforce a certain consciousness of power and responsibility but it can also enforce a certain caution. And one of the things that I saw in the case of IBM is after the IBM case and it doesn't make any difference whether you win or lose that trial. You go through a trial like that and you're a big company and it doesn't make any difference whether you win or lose the trial. IBM went through this long trial and they won the case and yet it still had an enormous effect on the way that company thought about decision making for a sustained period of time. Now that tends to wash out over eventually but for a large number of years just the process of that litigation changed the way the company was prepared to go out and compete. Now when that change is to recognize the responsibility that comes with power and to recognize that you can't just do something because you have power that's a good thing. But when that comes to say well we really don't want to go through this fight again and so it's easier to compete a little less hard. It's a little easier not to pick on the example but it's a little easier not to put the antivirus software in. That is something where you do risk the antitrust laws having a consequence that is not only unintended but actually contrary to what the antitrust laws were designed to promote. Now the unintended consequences are not in my view a reason not to bring antitrust cases. But they are I think reasons to understand what the cases are to spend the kind of care that I think really was spent in framing the Microsoft case and to try to be sure that the lessons that are learned from that case are lessons that are described, discussed, advocated in as responsible a way as the case was originally generated. There is a sense in which when you finish a case everybody's over through with it. Now they want just the headlines. They don't spend the time sort of analyzing it and by they I mean people in antitrust enforcement agencies people in the private sector. They do that in law schools in place and economic schools but those of us who are actually doing it when we're through the case we tend to be through with it we tend to move on and the Microsoft case becomes about design integration, about monopoly power. It doesn't get into the detailed analysis that everybody went through at the time of deciding to bring the case. And so I think you can reduce some of the unintended consequences by antitrust enforcement agencies and the private bar spending the same level or if not the same level at least additional level of detail and importance and concentration on how they explain and what they take from the case that they do in putting it together. I think that if you sort of packaged exactly what Doug said about the case and if people could spend 10 minutes as opposed to 30 seconds on thinking about what the consequences of the Microsoft case is we would all be better for it, competition would be better for it the antitrust laws would be better for it and you would have less unintended consequences. I'm always more comfortable taking questions than I am talking either taking or asking. So Phil says that if I stopped at this point we would have time for some questions. Absolutely. I heard some speculation that as a result of the IBM antitrust case when they introduced the PC they didn't want to make a closed architecture and they didn't want to bring their own operating system which they could have written instead they hired, they tried to hire digital research didn't succeed in doing that and instead hired this small startup which eventually became the defendant here. Well I think there is some that's right and some that I mean I think actually what you said is not correct but I think something that's related to it is correct. IBM did not, was never I think going to write the operating system for the PC itself. It wanted, it was behind Apple, it wanted to catch up. It had a large organization that did not move quickly. It wanted to subcontract all of the components and it essentially did, it essentially subcontracted both the hardware and the software and they actually brought that product out extremely fast and then did what IBM was extremely good at which was marketing. The thing that is related to that though is that the question is not why did IBM choose to subcontract there were many reasons to do that. The question is why did they let Microsoft keep any rights to this product? I mean you had this enormous company, IBM with this enormous monopoly power that's a joke. But they had a lot of, they did have a lot of money and they were very large. Microsoft was very small. This was a very important contract to Microsoft. Why didn't IBM just keep all of the rights? And the answer there is the antitrust laws because there what they were concerned about was whether or not that would be viewed as something that they made the decision that they wanted to license the product. Apple of course, except for a very brief and unsuccessful late venture in terms of licensing their software has kept their software to themselves and marketed only with their hardware. IBM thought that the way that antitrust lawyers may not have believed in network effects but I can tell you IBM and Microsoft too understood network effects a long time and what IBM understood is that if they could get a lot of independent people producing the hardware and using the software the software would benefit from network effects. And so what they wanted to do was to get that out as broadly as possible, as fast as possible they were going to license it and what they were concerned about is if they didn't allow Microsoft to keep the right also to license it that they would have antitrust problems. So I think that there is a sense in which not the decision to subcontract but the decision as to how that license was written was affected by the antitrust laws and IBM's kind of concern having just recently been the product of a large antitrust case how to avoid that. I guess from this is speaking for myself but from the perspective of someone in the judges chambers it always sort of puzzled me why the government never had a counter narrative to the notion that software products consist of code and nothing else and that there wasn't really a very strong narrative about this is a case about products constructed from intellectual property that Windows 98 users weren't buying code from Microsoft because this category error that software products are the same as software code really lay at the heart of the Microsoft 2 decision in the DC circuit and ultimately was the reason for the rejection of Judge Jackson's finding of the browser market you can't take the proposition that these are intellectual property constructs seriously and at the same time characterize the benefits that you get from the extension of the OS and the new APIs you can't attribute those as benefits of bundling the operating system and browser products together and so I think a great deal of the outcome in the DC circuit could have been different if the narrative had been different and there had been some explicit recognition of the intellectual property dimensions of the case I think that's possible I think that one of the reasons for the de-emphasis of the browser market and the relative paucity of evidence in that case is that the key allegation of the complaint, the heart of the complaint was not the browser market but the operating system market from a standpoint of simply the browser market if you look at market share percentages Netscape had a monopoly Microsoft came in and took most of that away although Netscape even at the time of trial had a larger market share than anybody else had had a few years ago compared to what Netscape had and the idea that there was a monopolization of a browser market I think was always something that from an analytical standpoint as opposed to the morality play how you try this case standpoint was always something that I think we had a lot of some of us had Dubaiity about and in any case what you try to do is you try to focus on what the heart of your case is and the heart of our case was a monopoly maintenance case and I think if the heart of our case had been a browser market case we would have tried a different and we might very well have done some of the things that you suggested but although given some of our arguments on Microsoft's intellectual property defenses which we didn't know were almost frivolous until the Court of Appeals told us and which we took seriously we didn't want to do something that would in effect emphasize the intellectual property character of this as opposed to the monopoly maintenance character of it On a somewhat personal note what are some of your favorite memories that you take from the whole experience are there any in particular like during the trial or anything that you just say God I really I'd love that moment or well I mean I like the schmolensie I like the moment when schmolensie told me that Microsoft didn't know what its operating profits were because they kept all of their statistics on handwritten pieces of paper I mean if you think about my favorite moments you will quickly see that they really don't go to the heart of what we're doing because I think of myself as somebody who knows something about antitrust law I do not think of myself as something that knows anything particularly about computers but although I do know something about antitrust law I mean what I fundamentally am is a trial lawyer and for me the case was a trial and so the moments that I sort of think back on and smile are the moments of a trial not necessarily the moments where you made a particularly insightful analytical point about how the integration of the browser was maintaining monopoly power there were a couple of those I mean there were a couple of those particularly during for example my examination of Paul Moritz in which I had no morality play moments I mean there was nothing out of Moritz that I could get that would sort of be interesting to a general audience but there were a number of two or three concessions that he gave me that we're building blocks to our actual antitrust case and you do appreciate that at the time nobody else does but the most fun are the sort of moments where you are able to take something and make it alive and convey to the court the credibility point for example or some other point that you're trying to make real I mean things like the Alchin tape several aspects of poor Mr. Rosen's testimony I mean we're not things that really went to the heart of the case but we're the kinds of things that trial lawyers enjoy Mr. Moritz's testimony seemed to be an exception when it came to the Microsoft Executive Witnesses in that he seemed to be actually effective in explaining his emails and putting them into a context and not seeming to run away from the plain meaning of the words in the emails and he seemed to come away with a lot of credibility but that was an exception I think with respect to the Microsoft Witnesses that it was one thing that was striking I think in the trial was the surprising inability of or the way in which the Microsoft Executive Witnesses did not seem prepared to explain the things that they'd written in emails in ways that both preserved their case and made them look credible or retain their credibility and that I think was surprising at least it was surprising to people working in the judges chambers I think was surprising to a lot of the observers of the case was it surprising to you and if so at what point in the case do you remember a point when you recognize the pattern that these Microsoft Witnesses were coming in and were not being able to put their clear words in context? I don't think I ever sort of recognized a pattern and said I could count on that and I think it was more a series of unrelated points and even unrelated in terms of cause I mean the credibility issues with Small and Z were quite different from the credibility issues with Al Chin and quite different from the credibility issues with Rosen and things like that each were tripped up with something that were not related to the kind of thing that tripped somebody else up and I think that it's difficult to know and to attribute exactly what caused that I have said before that there came a point in the trial that I was convinced that somehow Mary my wife had gone off and just sort of slipped people money or something to make me look good in court because you could not have predicted some of the opportunities that I got but I think another explanation is that I think we were trying two different cases in that courthouse I think that Microsoft was trying an old fashioned antitrust case in which you come in and you make and if you step back from it and you simply put the testimony of the Microsoft witnesses into another trial a lot of the trials have taken place in antitrust over the last 50 years they wouldn't have seen that unusual I mean people making the same kind of arguments about not necessarily emails but documents and data what it was in part was I think that the witnesses were not ready for the cross-examination that focused not on is this data point right, is this really the right code is this really the technological effect of doing this we did do that to some extent but we also focused on credibility issues and I can remember we had this interesting procedure by which at the end of every day lawyers would go out and talk to the press and explain to the press what had just happened and there came a point where I remember Bill Newcomb saying well Mr. Boyce is just focusing on issues of credibility he's not focusing on the central issues of this case and I thought that was unfair because I did think that I was focusing on the central issues of the case but it also was true that I was focusing on issues of credibility and I think that a lot of what happened was that the Microsoft witnesses were not prepared for the morality play function of a trial thank you very much