 The second big panel of the day, this one is broadly titled and I think the subjects will be even more broad, which is great and I welcome that, Assessing Market Power and Anti-Competitive Conduct in Dynamic Innovation Driven Markets, Economic and Legal Lessons from USV Microsoft. There are lots of lessons, so I hope we'll hear things all over the place. We have five great panelists with us today, and we'll go in the order very quickly and introduce them in the order in which they're going to speak. First is Frank Fisher, who as most of you know was the DOJ's testifying expert witness at the Microsoft trial. Frank has the rare and possibly unprecedented distinction of being the expert economist on opposite sides of two of the biggest antitrust cases in the 20th century, the government side in USV Microsoft, the defense side, IBM side, and the government's unsuccessful. At that point, antitrust case against IBM in the 70s. Distinction also shared on the lawyering side by David Boyes, who we will hear from later today. Frank is the Carlton Professor of Microeconomics Emeritus at MIT, where he taught for many, many, many years, testified in many antitrust cases beyond these two. Following Frank, Harry First, who is a professor of law at NYU, and was from 1999 until 2001, the Chief of the Antitrust Bureau at the New York State Attorney General's Office, where he was deeply and heavily involved in this case. In the middle of our panel, we have a substitution. Tim Bresnahan from Stanford, who had been a DOJ Chief Economist for a time, is not able to be here because of a last second family medical emergency in his place. Somewhat unexpectedly for him, and I apologize about that Jay, is Jay Himes, who is the current Chief of the Antitrust Bureau of the State of New York, a position you've held since when Jay, remind me, seems like a very long time. When did you know? 2001. So Jay came in right as the settlement stuff was underway, was there every step of that, and has been very, very heavily involved in all of the compliance and enforcement efforts with Microsoft since that time on behalf of the Plain of State group. We'll shift then to Keith Hilton, who is a professor of law at Boston University. He's written widely about antitrust and in particular written a great deal about this case and has focused a lot of attention lately on the European Union case against Microsoft and some comparisons between the EU case and the US case. And then our final panelist will be Doug Melamed, who is now a partner at Wilmer Hale, has been involved in a lot of the last few years, biggest cases at the intersection of antitrust and intellectual property, but during the Microsoft case was initially principal deputy assistant attorney general to Joel Klein during the investigation, preparation and trial of the case, and then after Joel left, the division became the acting assistant attorney general in charge of the antitrust division. So we welcome you all, we're very glad we're here, and we'll start off with Frank. Well thank you, I'm going to begin by giving my stock reply to people who point out that I was on opposite sides in those two cases. The nasty reply is that if you really think that these were opposite sides, then you don't understand anything about either case. But since that's not true of you, you must understand about at least one of them. I do feel about what happened in the intervening years, it's like Mark Twain's remark about his father. Mark Twain said that when I was 14 years old, I thought my father was too stupid to live. When I, by the time I was 21, I was amazed to learn how much the old man had learned in the intervening seven years. That's the way I feel about the antitrust division. I'm serious about that by the way. I mean that as a great compliment to the antitrust division of the Microsoft case era. I'm too polite to say that I mean it as a great insult to the previous one, but I do. And they deserved it. Now we all have our memories of the Microsoft case. I actually have a physical memento which I'm going to describe to you in a moment, but it goes, it bears on some of the things that we've been talking about and some of the questions that have been raised. I was asked on cross examination, there wasn't anything for me but cross examination because the direct testimony went in in written form. I was asked what would be the harm if Microsoft were to win the case and I think that is the same proposition as what would be the harm if there had been no case at all. That's an interesting question. As I was asked that question, the questioner, Mr. Lacovara, took a long time asking it and I suddenly realized, I had the time to realize that what I was going to say was certainly going to make a sound bite on every new station in the country. That of course did not stop me. What I said was that we would live in a Microsoft world when it came to technology in this area. There might be a good world and it might be a bad world, but it would be a Microsoft controlled world. Microsoft would control what the innovations could be that worked with Windows or might have been competitive to Windows and I said that was the modern equivalent of Henry Ford saying the consumer can have any color car he wants so long as it is black and indeed that evening that was on all the newscasts, at least that's what my family said. I have a physical memento related to that which I'm going to tell you because I think it's amusing. That happened I think in December if I'm not mistaken and shortly after that came the break for the holidays and my son and his wife prepared for me, a Hanukkah present which I had not expected. They brought me a monopoly set. I looked inside and the first thing I discovered was that Bill Gates' face was on the $500 bill and the second was that all the properties around the board had been stickered over to be software applications except for the utilities which were software utilities and I said yes. I said that's highly amusing. They said you haven't gotten the point yet. What piece do you want to represent you on the board? I went to the bags that hold the pieces that represent you on the monopoly board and every one of them was filled with nothing but little black cars. I do think that was a prediction of I can't say it came true obviously because we don't know for sure what the world would have been like but as I've listened to what's going on today my view is that I was probably right and that what has happened as a result of the case is that we don't live in that kind of world. I was particularly impressed by Brad Smith's remarks on this subject but I had come to that conclusion beforehand and I'm glad to hear it. I do think that Ed Felton's dichotomy between increased competition and technological innovation it's very hard to decide between them but I do think it's in some sense a false dichotomy because innovation doesn't just come about because somebody gets struck with a good idea. Innovation typically costs money and innovation does come about if there is if people see a reason to have a reason to believe it's going to be profitable or they're pressured to do it for fear of falling behind and that means that competition can in fact be a spur to innovation or the possibility of competing can do that so while I don't know those technological innovations which happened after 2003 may perfectly well have been in part a consequence of the increased competition introduced by the case I note that the remedy hadn't gone into it didn't go into effect until around then. All right now what else do I think about the lessons to be learned from the case. Well I think the most important lesson is that there is no need to revise antitrust law or section two in order to deal with innovative industries I'm not now talking about the recent paper issued by the Justice Department I'm going to say some things about that later but if you think about what the economics of the case were boiled down they're the following I'm assuming you all know about the applications barrier to entry and how it works and so forth that Microsoft found itself in a position in which it certainly had monopoly power as a result of a natural natural effect involving economies of scale and network effects and had it done nothing more they wouldn't have been a case Microsoft did however do things more took actions to stop threats nascent threats to the applications barrier to entry was the most famous one from the browser but also from Java and it did that even though the actions that it took were not profitable in themselves I quote I know you're going to think I'm a total nerd when I tell you I can quote this exhibit by number but it's the only exhibit I can quote by number I only know two things from the trial I can quote I'm sorry exactly that's one and another is a piece of the trial transcript which I said in which I said in fact you have to remember there was a time when computers were great angry beasts and now they are not the small angry beasts that they have since become and the transcript has me saying you must remember there was a time when consumers were great angry beasts but anyway government exhibit 39 I don't remember who wrote the email but I do remember that it says the browser is a no revenue product but you should care about it just as much as does Bill Gates and it goes on in effect to say because if we lose the browser war is we lose everything and that was a perfectly true statement or at least the first part of it was a perfectly true statement Microsoft invented invested an awful lot in improving Internet Explorer and it also gave it away and it gave it away and it even in paid people in usually in kind or in not taking their money in various ways if they would agree to adopt it this is the PC people and and other things surrounding that and this was an act which had you know a set of acts which had no particular justification on their own on its own right Microsoft said well we wanted them to advertise Internet Explorer so we gave them inducements to take it but the browser was a no revenue product you know why do you want everybody to have Internet Explorer and so on and that was that's an anti competitive act I don't care whether that happened in an innovative industry or in a non innovative industry that sort of thing undertaken by a company with a with a great deal of market power which Microsoft certainly had is anti competitive and that's basically what the liability case was about and the fact that Microsoft was and I hope still is innovative is interesting and important but had nothing as nothing to do with with with that I don't say that innovation innovative companies or innovation generally doesn't present new new areas to think about when dealing with antitris cases but it doesn't I think call for a basic revision of the standards okay a few more lessons one should of course this is a self-serving comment you have to understand that even though I am semi-retired from the expert witnessing business you should try to understand the economics of the case before you jump in I'm really serious about that this is not the worst example I can't I can't help doing it where do you go David David is not here right well I shouldn't boys well tell them you can tell him I said this afterwards the worst example I know was another case in which I worked with David boys in which the complaint was drawn up far in advance and the economics were all very peculiar in the in the complaint but once you try to do that had that been done done properly I think perhaps the tying claim would not have been there I said yesterday that the tying claim doesn't make any real sense because monopolization of the browser market for its own sake didn't make any sense the browser as I said was a no revenue product and at the time anyway there weren't a lot of profits to be earned by monopolizing it was being monopolized or being the actions were being taken to protect the monopoly power in the operating systems market you would be surprised by the way this has nothing to do with the behavior of the council and either case during the case I received at least two and I think more papers some to referee for journals by economists who had extremely elaborate theoretical mark models proving that it could not possibly profit Microsoft to monopolize the to tie the to tie the browser to the operating system except under very extreme conditions and that was just totally beside the point they were perfectly good papers but they weren't about this case despite the fact that the authors obviously thought they were on the other hand one of the things I'm now going to shade into the oh I'm sorry on the other side of the case I always thought that Microsoft did an awful lot of trying to fight this case in the court of public opinion and in fact even in court tried to fight it as a marketing case in various ways pointing out how important their product was how innovative they had been and so forth and in certain respects which I don't want to go back into because it's probably too painful just not being not being very careful and their lawyers not being very careful about what was happening in the exhibits that they tried to put in I'm I'm not going to go into detail okay now I come now to the recent statement of the Justice Department and the objections by the FTC I cannot say that I have studied these in detail so this is a top of the head reaction to some of it or perhaps a back of the envelope react I'm not using reading from an envelope but you know what I mean okay I think there's something to be said but probably not everything to be said for the Justice Department's position if in fact it does as I think it tries to do in some respects the following lawyers are just terribly terribly fond of bright line tests and of course they've all their fond or at least the plaintiffs are always fond of per se tests and in anything but the simplest circumstances those things don't really work very well they particularly don't work very well for tying cases and if what the DOJ is saying about the rule of reason there is you know we're going to get serious about examining the economics of what's going on and not rely on fairly silly tests like how much is outside and how much is inside the bundle which in cases more complicated than the standard classic tie very very difficult to make any sense of and possibly even in the standard case then I think that's it that's a rather good idea I do agree that if you get rid of things like that it's going to make it easier for people who want to take anti-competitive actions to get away with it I think that under section 2 that's true and I'm sorry I don't know anything I have I don't really know anything about the people who now work for the Justice Department but one can't help feeling that that's not how shall I put it dissonant with the general behavior of the President administration in Washington on the other hand on the other hand there is there is another thing in there of which I thoroughly approve and now I'm going to say something that annoyed me about the states sorry okay as a number of you probably know I am a principal proponent of the proposition that you can't look at accounting profits and for anything at all about monopoly and in the early days of putting that forward you would think that I had tried to deface the national monument as I once pointed out but never mind I'm not going to go through that argument again and indeed in the Microsoft case I pretty well insisted to the DOJ that that not be a part of their case I've insisted successfully it was however a part of the state's cases oh well your witness Rick Warren Bolton got up and testified to that well I got asked every morning of my cross examination whether I agreed with the quote from Rick Warren Bolton the profits really mattered okay good and I apologize but but I did I did get I did Rick did say something about it I was there alright he wrote something and I got asked every morning about that proposition and I had an answer but okay but anyway but I am delighted really delighted I thought this was coming from some call I had previously with the couple of years ago from the antitrust division I am really delighted to discover that in the new paper from the DOJ there is a section on profits that essentially says you can't do this you know this is very unreliable unreliable evidence and I think that's right and I'll stop with another short momento you know I lived through the IBM case I lived through it for many many many many years I couldn't attend the first meeting on the case in May of 1970 because my youngest child was being born and my wife thought I should be there the case lasted so long that that same child read galley proof on my book which appeared not long after the case but anyhow in the course of this the wealth of evidence about profits and the discussion about profits it was it was it was appalling and not to mention bizarre and I'm you know really glad to see as I said before that the DOJ had learned something in the intervening whatever number of years it has been thank you thanks Frank Harry so I'm glad this was up behind Frank all the time so you were really watching the title of my slides as he was speaking I thought as I as I was thinking about what in the world I was gonna say here and I've you know wrote some stuff down it occurred to me that what I was writing through the whole thing really bore this title is the Microsoft case important and then I thought what better group to ask this to a group of Microsoft junkies because you certainly I have invested an awful lot in the Microsoft case probably thank ourselves you know thank God they brought this case because it's kept us busy for so long and you know everyone would probably initially say of course it was important but then you might also say well was it important and maybe even more interestingly as I listen to the discussion important in what ways because we do have a variety of perspectives from you know legal perspectives business perspectives technology community and so forth and and there might be a number of different ways in which it is or isn't important so that's my title and I'm sticking to it as they say so I'm gonna talk about three things a reframing would be one the second is the evolution of the case which I think is interesting to think about and then third remedy which I think is really pretty critical so we have the what Andy and I've written about this a little bit you can think of as the frames that have been put around the case which have varied from time to time so you have the original frame of the case which came in the complaints and I thought it was interesting when Phil described the complaints yesterday you started with the third claim in the complaint which was the monopolization claim but actually the first claim was exclusive dealing and other anti-competitive effects the second claim was tying the third claim was monopolization and the fourth was attempt to monopolize the browser market now I didn't write the complaint so I don't know but you would think you would start with the thing that's sort of most important in the case as number one so even from you know the initial frame of the case we start to think about it a little differently there was of course all the anti-competitive conduct cut off the air supply and all of that and the monopolization claim the and I say complaints because we have to remember we've heard a lot about the states here the states had a somewhat different complaint not completely but broader in the initial complaint included the DOS story we heard yesterday it included a claim about office and the pricing of office now and it also included interoperability of software generally now as it became clear that Judge Jackson was not going to have a trial to last forever like the IBM case the states pulled back some of those claims in first amended complaint and narrowed the framework but when we got to trial the frame expanded a little bit again it it wasn't just the jihad to win the browser war I always love that we would love certain Microsoft documents that's the one I like which I was quoted in the complaint browsers and we're now transformed into middleware a much larger product and other things came in besides the browser war so you had things about real networks and streaming technology you had IBM's OS you had other things that came into the trial and this is what Judge Jackson dealt with in his findings of facts this much broader framework of the story on appeal it changed again narrower appeals do that necessarily appeals courts don't sit to listen to everything and we were back to the browser war as the focus but I think the real reframing in a sense comes in the court of appeals opinion itself and the methodology that it brought to the case with using the rule of reason because whatever one thinks about that as an approach in the DC circuits hands what it meant was segmenting all of Microsoft's conduct into sort of bite size that's be I not be why bite size pieces which could then be analyzed somewhere good somewhere bad will throw this out this was bad this was good and in some ways by not looking at the conduct overall as a whole which was how I think Judge Jackson saw and I think I was presented at trial you have this first in a sense trivializing of the case trivial in the sense that it's about discrete little pieces and so we can see what what's illegal what's not and it trivializes potentially the remedy as well because then you're focused on just fixing those particular parts and I think the reframing in a sense of the remedy becomes particularly critical in a couple of ways one is a statement which seems perfectly correct when made and that's the notion that the remedy should be tailored to fit the wrong which tailored to fit the occasion for the remedy so this tailoring principle sounds right but on the other hand it really does narrow the enterprise of remedy instead of looking more broadly perhaps at how you can make the market more competitive you want to say which contractual provisions should we say you can't do so that's one important part the second though is the court of appeals notion of what the government's role and how we're going to think about section two in a way there's a bit at the beginning of the court of appeals opinion where it talks about how because this is a high technology in this is one of the few places Frank is right where the court really talks about high technology we might not have an effective remedy there might not be an effective conduct remedy there might not be an effective structural remedy oh well so what is you know what does that mean that perhaps the courts move so slowly it means and this is the full quote I've got it on the slide the government will continue to have an interest in defining the contours of the antitrust laws so that law-abiding firms will have a clear sense of what is permissible and what is not and the threat of private damage actions will remain to deter those firms inclined to test the limits of the law so the government's in the business of just bringing cases to set precedent I guess you can do that just by writing a 230 page report and you know that's just as good because and why bother to go to trial it's more efficient to do it that way we'll just that's their view and the private parties will take up the slack now subsequent events may have indicated what perhaps was in the court of appeals minds that's a pretty ineffective remedy it's going to be really hard for private parties to do this so it's a very it's in a sense reframing section to as well that's going on in the court of appeals case so the second part is the evolution of the case and in some sense from my point of view this is where it gets interesting I noticed that this is the title that Phil has picked is us versus Microsoft 10 years later and the title of my remarks is the Microsoft case because in 1998 the European case started when son complained to the Europeans and the case has continued to evolve not only how the remedies work but in litigation after the settlement in 2001 so there are two particular parts that I think we should think about one is the importance of intellectual property and innovation intellectual property in the US case was sort of a sideshow Microsoft's arguments were I would say sort of incoherent on I don't know if any of the people who crafted them are here so so be it the Jackson sort of brushed them aside the DC circuit said they boarded on the frivolous go to Europe though Microsoft brings these arguments much more front and center and I think it was a very wise move for a number of reasons one is of course one of the two claims of abusive dominance deals with an intellectual property rights that you didn't give son information and Microsoft says we had an intellectual property rights refused to license this information so you have this direct conflict but the second is the importance of innovation it was there a trial if you recall Jackson's pen ultimate paragraph I don't remember the number 403 anyway someone knows it here where you know he talked about how you know Microsoft's behavior hobbled a form of innovation but that sort of dropped out of the case in a way on appeal because it's really hard to prove what that means but Microsoft made this a very important part of its argument to the European Commission ultimately to the court of first instance that it invested billions of dollars in these protocols you know the communications between server to server and server to the PC and if you don't let us get a return on that investment we won't innovate anymore nor will anyone else a key argument about the connection between intellectual property rights and innovation the European Commission didn't accept the argument talked about the importance and it's something that's come out in discussion here the importance of competition itself on Microsoft's incentives to innovate that as the Commission said sharing with son and having them as a more viable competitor might liven up competition in the marketplace the CFI just simply said I think well this was Microsoft's burden to show that it wouldn't innovate and they didn't carry that burden but you can also see and I have this here the Justice Department's concern over time in the evolution about intellectual property rights can be seen a bit in their own press releases in 2004 when Hupate complained about the European Commission decision as being just wrongheaded he said about the interoperability part that that sort of considerably overlapped with the remedy in the U.S. side which required compulsory disclosure of the protocols but by the CFI decision in 2007 the Justice Department had changed its tune and now was complaining about how the forced disclosure of this information was could chill innovation and you know would involve potential harms to consumers dominant companies should be allowed to refuse to license intellectual property rights to become much more of a theme from the Justice Department and much more concern so this has continued actually on the European side I don't know that some people here have read a speech and paper that was given by Bo Vesterdorf who was the president of the CFI last thing he did was see this case come down he retires and then he writes about it sort of like Steve Williams saying I'm not me tell you about what really went on in the court of appeals that's but not that Vesterdorf says that but what does come through in this is his great concern that the CFI decision will harm innovation and will cut down on intellectual property rights holders so this is a continuing evolution of the case institutionally the evolution through the European Commission shows that as I've said DOJ no longer rules this is a global world that we're living in and I think Brad Smith made this point in his remarks if one of the things that's really important about the Microsoft case is the evolution of antitrust into a global enterprise it is not just restricted to what happens in the United States and we just can't think of it that way so as much as the Justice Department as the dominant firm would like to maintain its dominance it does face other institutional enforcers and I think that's one of the important parts of the evolution so let's talk about remedies which is sort of the end game I think just a brief slide here consumer suits lots of them 220 80% class actions lots of legal hurdles as we know settlements mostly voucher settlements but not just for Microsoft products the total value of these I actually don't have a figure on nor does Microsoft apparently although I'm glad to hear it if they're willing they've got it now but my understanding is until all the dust settles and the Cypre stuff is figured out we won't know it's substantial that the end time is roughly 2012 this will put it almost two decades from the time when Bill Gates wrote his internet title memo just to give a sense we're gonna have this conference 10 more years from now don't worry competitors suits this is real money again quoting our speaker before 3.4 billion if you added all up and it's in all parts of the litigation browser wars settlements the OS claims the OEM claims and one interesting part I think in particular the EC case which involved the media player and involved server operating systems generated us cases and us settlements and not in significant amounts and the Koreans as well the Korean suit actually was filed in Korea so if you're looking for other places in which to practice think about that remedies in the EU people in the room know about what the US remedies are so I'd like to focus on what may be less well known 497 million for the two violations abuse of dominance that's roughly 600 million at the time Microsoft is fortunate that the dollar was stronger than so it cost less in junction a simple injunction as opposed to what we did in the US refrain from repeating what you did and the two behavioral remedies unbundled media player to offer the standalone version and provide it the information withheld from son on interoperability on reasonable and nondiscriminatory terms and a monitoring trustee as we had similar to what we have in the US so on the interoperability part November 2005 a penalty decision the information virtually impossible to use their experts found and setting out in not quite clear how this came about but setting out what reasonable fees are supposed to be Microsoft's the protocols have to be their creation the second part I think is the most interesting the protocols have to be innovative and using in effect the patent standard not obvious nests non obvious nests whatever exactly that means some of the protocols most are not but some are non patented the commissioners put those aside just looking at the ones that were not covered by intellectual property rights and consistent with market valuation for comparable technology and then the final fines that came 280 million for the disclosure failure and then the biggie to in February 2008 899 million euros 1.3 billion dollars for unreasonable fees and one of the interesting things of that is the annex to the commission's decision 69 pages of going through protocol by protocol of 173 protocols finding 166 of the technologies disclosed were not innovative so if you're thinking back on Microsoft's claim that if they don't get to keep these secret they won't innovate according at least to the European Commission well they didn't innovate anyway okay remedies effect that's the this is the real question and what I did was you know sort of you start with the markets that were at the core of the US case share of the OS market you these are the latest from net applications so 91% if you include the Mac which as we know is not included in the US case 99% roughly Linux has a trace share of the browser market 72% Firefox of course that wasn't a market as we found out from the DC circuit but everyone knows it's a market so 72% Firefox has 20% and Chrome got 1% on its first day how's that so obviously a different story but from you know a US law point of view 72% in most circuits in the US would be monopoly power on the European side share of the work group server operating systems market if you look at the European Commission cases and they they're always very long and you know always in a late paragraph or in a footnote they say well actually Microsoft share has been increasing ever since 2004 and continues to the Windows XP home edition 1787 copies as of April 2006 that doesn't sound like a whole lot this was the figure that the European Commission's lawyer told the CFI in oral argument and conceded that the remedy was a failure the reason for the failure though may be that the price for the unbundled and bundled was exactly the same I wonder which one I should take so what's the conclusion is the Microsoft case important there may be many reasons to say yes or no but one reason to say yes is thanks to Europe I think Europe has given the whole case continued salience as they say and it continues to go along with the current complaints that have been filed including a complaint that's going to start the browser war case again by opera saying you can't bundle IE into Windows but how about what do we say about the remedy I think the civil litigation recoveries shouldn't be scoffed at you know injured consumers were compensated and I think that's an important function for any trust law the civil fines which people in the US tend to scoff at as the that latest report did in the AMC did are substantial I think of Judge Jackson's mule trainer analogy if you'll recall this is one of the things he said to one of the reporters well you know about the mule trainer how does he work he whips him upside the head and that's how he gets the mules attention so I'm not calling Microsoft the mule but corporations generally you know you look at this money and you know you say you know Microsoft has paid you know one point it's now 2.3 billion roughly in fines you start to maybe start to pay attention to that money I don't think that that's nothing and the EU's review of Microsoft's pricing I think is interesting because it shows if you want to when I leave that aside if you want to start looking more closely at the pricing of a monopolist it's not impossible to do as US commentators always say it is bottom line though I think my right flunking remedy 101 if you look at all the remedies we can argue over whether they've worked because no one really set out what the goals were there were no benchmarks for whether you've achieved them or not and my real concern is if the remedy in the end is perceived as unimportant and I was glad that Microsoft perceives it is very important but to think about what that means but in the end from a public policy point of view if it's perceived as unimportant it really is the ultimate bad rap against anti trust and the trivialization of any trust because if you don't get anything out of it it wasn't a great case it was a bad case to bring so that's it. Thanks Harry. Jay we've just heard about flunking remedy 101 happy no. It's always I like to leave it to Jay. Excuse me. I am Harry's successor at the New York AG's office in charge of anti trust he left there in April I think of 2001 and I joined at that point the case was up on appeal then and came down in June if I remember we were asked actually we were scheduled to come talk to Microsoft about negotiating settlement beginning in the fall of that year and I was with one of my senior staff people who tried the case because he at that point knew something about the case and I didn't sitting in an airplane waiting to take off at nine o'clock one morning in September and it actually happened to be September 11th that airplane didn't take off we never got to the first settlement negotiations that day but we did get ordered by the judge a couple of weeks after that to do what she described as round the clock negotiations and she told us if you can't agree after a couple of weeks that's okay we have a way of making you talk and it amounted to appointing a mediator who then led the negotiations for the next month or five weeks leading of course eventually to the settlement involving the DOJ and New York and nine or eight other states and then of course the split off and the litigation by California I want and another group of states all together so that's that's the background that I bring to this and I am one of these people for better or for worse I guess to whom you can attribute the consent decree it's fair I think that you should know how I came here I was looking at the program a few weeks ago and I said to Phil gee I see the program online you don't have any state enforcers involved and he said well you know Jay it's a lot of date we think Steve Hawke is going to call me didn't mention anything about Harry but it's nice to see him here and Phil said to me but if you'd like to come we'll be happy to you know to find some place for you and I said well let me think about that and I came back to feel a couple of days later and I said gee I can make it up on a Saturday and you know I'll go anywhere you think I can contribute and Phil came back and said well what would you like to do and I said well Saturday there's this panel I could contribute a little bit on and that panel I could contribute a little bit on I didn't hear from Phil and then you know about 20 minutes ago he came up to me and said Jay how'd you like to be on this panel it was because neither none of the panels I'd suggested but that's okay you get the same pitch I think Harry says we flunk remedies certainly we didn't set out to achieve that result I think that the objective was to through both prohibitory provisions and through affirmative disclosures to try to address the application's barrier to entry and to try to knock down the the buttress scene that we believed occurred by virtue of the exclusionary conduct that Microsoft had previously engaged in it was through that combination of provisions and intention to try to make the industry more friendly for the development of features that would offer competition to the windows monopoly windows monopoly as you all know and I hope there's not terribly much repetition from from yesterday but of course it's a it's a network it's a product with network effects and the application's barrier to entry as part and parcel those network effects and my sense and I'm not I don't claim to be an expert on network effects but we get a monopoly in that kind of area it's pretty hard to dislodge you've got to move the platform you've got to find somebody who can offer a different alternative all together to the network and that's pretty hard to do just breaking down the network I think is near impossible so you know with our great foresight what we thought was that somehow just as middleware might operate to break down the application's barrier to entry and move create the opportunity to move the platform that if it were possible to enable features both from the Internet or through competing middleware the way a Netscape and Java promised that it might be possible to introduce competition into the operating system area and the overall objective of the remedy that we selected was designed to achieve that effect of course Jackson had suggested a structural remedy the Court of Appeals had overturned him on that there was pretty strong language in the opinion of the Court of Appeals telling us that that was it wasn't formally pulled off the table but it did not appear to some of us to be a viable alternative at the point that we were on remand the result is you know what you do see in the the settlement and by for all practical purposes the settlement is the same as the decreed it came out of the state subsequent litigation there were some changes but I don't think that you would call them material and we have we have sought certainly in large measure through the affirmative provisions the protocol disclosure provisions and to a lesser extent the API provisions to give people in the industry industry participants a better opportunity to communicate with the Windows client in hopes that they could develop features that would promote a kind of cross platform opportunities the people I don't know how much of this is repetitious but the communications protocol section of the decree which preceded by a considerable period of time the EC's remedy has involved an enormous industry I'm sorry an enormous enforcement effort secured in large measure through the technical committee and the software engineers that they have engaged to develop the the protocol documentation and to push Microsoft into making that documentation more satisfactory in industry users the documentation that the EC found to be wholly inadequate was the stuff we were looking at by and large there were some minor differences we had years earlier but non-publicly declared it to be inadequate as well and we had developed ways to push Microsoft to make it better and those culminated ultimately in a 2006 admission in court that the documentation they were previously relying on was indeed not satisfactory for anybody and a commitment on Microsoft's part to rewrite it and they have been doing that and that process continues even today engages on the order of 40 engineers software engineers that work for the technical committee out in Redmond they have offices in Bellevue and in Palo Alto California that's been a very very major effort it engages me it engages Steve Hawke and their consultant and DOJ people on a ongoing regular basis scarcely a day goes by that I don't have communications with somebody on that activity it involves of course not only the disclosure provisions but also monitoring the operations of windows to make sure that as as windows evolves as IE evolves there's a new version of the operating system Windows 7 on the table now that those versions are compliant with the requirements of the final judgment and that is not by the way an easy task the conduct provisions you know our self executing you're not supposed to you know they're very prohibitions against coercion of OEMs and things like that and ISVs but keeping the operating system compliant particularly in the places where Microsoft had to create defaults and make the on the operating system honor them is not an easy operation in fact we knew it was going to be technically challenging when we negotiated the remedies provision and for that reason expected we're gonna have to have technical expertise on a regular basis it took I think the technical committee at over a year frankly to develop tools that satisfactorily probed Windows and determined whether in fact Windows removed all of the IE icons of that it was required to remove if a user in fact sought to hide end user access which was the way of substituting middleware Microsoft of course said we have we have we have rejiggered the operating system it does it it works if you if the user goes in and chooses Firefox as its browser instead of IE we remove the icons in in fact that wasn't the case there were places in the operating system where the icons remained the technical committee then had a dialogue with Microsoft about why that was the case was there some reasonable technical requirement that the final judgment permitted so that the icon and the invocation of IE was was acceptable or was it not and getting all of those kinds of little things was very difficult it's not an easy remedy in that sense this is Windows it is not a simple thing and just changing it is not simple so I don't know whether you say we flunked under those circumstances it certainly is the case that the Windows market share is formidable and and I was I I guess when Brad spoke a few minutes ago he mentioned consolidation in the OEM industry and he said you know they go on from hundreds of companies when the case started to a much smaller number today and you can imagine the dialogue that that Microsoft therefore has to have with the few companies that remain in the OEM business and when he said that I thought from time to time I hear from the OEMs and they will voice problems to me and they will say we voice these concerns to Microsoft and the two of them talk and that's a good thing and they communicate about things in Windows that they don't like or changes that Microsoft proposes to make that they think aren't consistent necessarily with the OEMs attempts to differentiate their products from each other and you know sometimes they accommodate each other sometimes they don't and that's generally when they come to me but the point really is when Windows when Microsoft feels one way about the operating system and the OEMs feel another way about the operating system and how they wanted to work on their computers the OEMs still don't have a plan B. There still is no other operating system that they could possibly realistically go to and that is a condition today and it was of course a condition 10 years ago. We do think that there are circumstances in the industry that will contribute to lessening that sort of position and certainly the delivery of internet based services which you've heard about today and which Ed talked about today the delivery of services through browsers those kinds of developments are encouraging changes in the industry that we would hope over time in one way or another give the end user a better opportunity to choose features and choose an ability to find alternatives to Windows but it is it is certainly a difficult kind of problem in a networks industry and in one that is so central to a lot of what we do today. Phil I hope I've taken up my 10 minutes. You've done a great job thanks Jay. I appreciate you stepping in and appreciate you being a good sport about it and especially not giving me a hard time about it. That's great. Thanks. Keith Hilton. Thanks. Thanks Phil. 15 years after I expect a better position. Okay. I want to talk about four topics. I don't think I'll be able to get through all of them so Phil just cut me off if I don't make it through. So I want to talk about the framing of the legal standard that Harry talked about. I would say a little bit about that. I want to talk about remedies. A little bit about innovation and monopolization and lastly EU and the world or I should say the US and the world. Maybe I should put it that way. So maybe I should switch the order since everyone's been talking about remedies for the past few minutes. Maybe I should deal with remedies first because I hadn't planned to talk about that first but it strikes me that I would be worried about trying to determine the effectiveness of any remedies by looking at market share evidence or things like that. I mean I you know that's that's a bad way to try to determine and in particular you'd like to ask well what are what is the best approach to remedies and try to have some theory about remedies or what remedies are supposed to do. I think one of the best discussions of remedies in the case law is Judge Wazanski's opinion in the United Shoe decision where he gets to remedies and he raises some important questions about what remedies are supposed to do and the ideal approach to remedies. It seems to me that you'd like to have kind of a sliding scale approach where to the extent that the firm's conduct has a strong efficiency component those are the cases in which or should say pro-competitive, pro-consumer efficiency component those are the cases in which you want narrow remedies. Remedies that are surgical and go after exactly the kind of conduct that you think is bad and you'd like to stop. In cases where the firm's conduct doesn't have a strong efficiency component well yeah then you want you know large very effective you know powerful remedies and you know the dissolution and structural remedy approach may be desirable so you can distinguish cases involving price fixing just for example you know and I know it's not relevant to the monopolization case but price fixing naked price fixing as an example of something that has no efficiency component and therefore you don't have to worry about surgical remedies in that case but when you've got conduct that is that's efficient pro-consumer then you really ought to be careful about remedies and the narrow surgical remedies are best. So I wouldn't regard I wouldn't doesn't strike me that you can make a decision or make a conclusion that that there's that the remedies have flunked and I'd be worried about any approach to to measuring the success of remedies by looking at market share and seeing whether you you've punished a corporation as sufficiently. So the second topic I want to talk about is this just the framing of the legal standard because anyone I guess Harry runs into this problem he teaches antitrust and as a teacher of antitrust when you get to the Microsoft decision you're asking yourself what do we learn about this and how does this what does this tell us about the legal standard for monopolization and just as a brief thumbnail sketch on the legal standards for monopolization you could say roughly there too you know that there there's a lot of talk out about out there about different approaches to monopolization tests but I think they pretty much shake down the two approaches. One is something that's described often as a welfare balancing approach and that you see in the Microsoft decision you reopen up the Microsoft depending you'll see the court articulate that test which is comparing the pro-competitive benefits of the defendants conduct with the anti-competitive effects pro-competitive effects versus anti-competitive effects it's maybe you could describe it sometimes as a disproportionality test or the anti-competitive effects disproportionate to whatever pro-competitive effects have come out of the firm's conduct. It's not clear how you do that balancing but at least in theory that's what courts are saying that's what the Microsoft opinion says it's going to do and then another version you can just describe as a specific intent test which asks well is there a substantial efficiency component? Does the firm's conduct increase the value of the good to consumers or lower the cost of supply and if that's the case then the firm can't be held liable under section two and you don't engage in some kind of balancing. Now there's a question there about how you measure intent and you can take the specific intent approach that I've just suggested involves an objective approach to intent where you're looking at the firm's conduct and that's different from what you'd say is what you describe as a subjective approach to intent where you're looking for internal emails and memoranda and there's a lot of talk about that yesterday and I think there are good statements of the problems with the subjective intent approach. One obvious problem is it creates this incentive going forward that firms have to have lawyers look over their documents and the unsophisticated firms, the firms that don't have lawyers look over their documents do the same thing as their rivals do but they're the ones that get caught and get punished under section two so that would seem to be a bizarre system where you have the only firms that get in the trouble are the unsophisticated firms whereas the sophisticated firms do the same things but don't get into any trouble for it because there aren't these damaging emails or memoranda so that's a serious problem with the subjective approach and something that has led many courts to take a view that they'd like to get away from that for example Judge Breyer in the very right decision is very critical of the subjective approach to assessing intent. So consistent with the specific intent approach you look at the Microsoft case and you say well okay what did the firm do? Well it seems the core of the case involves this bundling of internet explorer with the Windows operating system or the technological time of it which increases the value of the overall operating system and you could say lowers the cost of supply of this application consistent with what Microsoft had been doing for a long time with stand alone applications bundling them into the operating system which increased the value of the operating system benefited consumers. So right away you start off on this thinking that if a court is going to apply a specific intent approach that Microsoft is in a pretty good position and that the plaintiffs have a hard way to go. Okay so I was going to say something about the evolution of this standard you know the first 50 years or so of monopolization law from the passage of the statute until learned in hands opinion in Alcoa the courts operated under the specific intent standard and then Judge Han rewrote the law in Alcoa and we've had the welfare balancing approach since Judge Han's Alcoa decision. So that's what we have right now for the most part but you know you can see it a trend that starts developing monopolization law roughly around 1975 roughly around the time of the Rita and Turner article on predatory pricing which pointed to the cost of false convictions or I should have put it up. Convictions of firms that have engaged in largely efficient conduct and after that after the Rita and Turner article we start seeing some decisions that start moving toward what you could say describe as a specific intent approach to monopolization cases and so for example the best examples are the trinko decision involving essential facilities involving access to facilities that rivals say they need access to to compete. The trinko decision is a step in the direction of the specific intent test. You have the Brooke group decision, Matsushita and Brooke group decisions moving the predatory pricing standard toward a specific intent test. So you had some movement back toward the specific intent test and the kind of fractured standard under section two monopolization test. So there's the question was open when the Microsoft court case came up what kind of approach would the court take? Would it embrace this welfare balancing approach or would it embrace the specific intent approach that we see in cases like Brooke group or trinko and the appeals court openly embraces the welfare balancing test. Now the only problem for that for someone who teaches is that when the court applies the test it does so in a way that it's a little confusing and consistent. Some of the conduct that the court first of all when it applies the test it doesn't really balance it in the few cases where it finds that Microsoft's conduct that Microsoft has a good defense, a good pro-competitive defense but it says okay you're okay we don't find a violation no real balancing so it seems to be conducted in a way that's similar to the specific intent test. And then when you look at the kind of conduct that Microsoft that was approved by the court it was pretty much the same as some of the conduct that was not approved and so it's kind of hard to see why the court picked some areas where it's some types of conduct and this is maybe what Harry was getting to when he said picking apart and picking pieces of what Microsoft did pick some pieces and said that's okay and other pieces and said that's not okay because there wasn't a big difference and moreover when you get to the tying part of the opinion the court looks at some of the same conduct and decides to apply the rule of reason test why because of the efficiency arguments in favor of that conduct so the opinion seems very consistent in that way both in its treatment of Microsoft's conduct and in the way it applies the law under tying and the law under monopolization so that sort of muddies the picture makes it hard to teach the law and I assume it's hard makes it a little difficult for lower courts to figure out what they're doing as a result of this case. All right, I was gonna make a brief comment on innovation and monopolization. So even if you've got a monopoly that does nothing good that doesn't do anything efficient or pro-consumer just raises the price and extracts surplus from consumers and imposes a deadweight loss on the economy by restricting output. You know, even in those cases if the firm innovates there's still a benefit there and there you know now I'm going into the famous Shumpeterian argument on monopolization because what the firm is doing in that case is sure it extracts welfare from consumers when it monopolizes. On the other hand there's that big residual surplus that's there that consumers have that was the result of the firm's innovation and the innovation may have been directly related to the firm's incentive. The incentive to innovate may have been directly related to the firm's ability to monopolize that market later. So even in the worst case scenario where you have a firm that doesn't do anything efficient but innovates there's an economic case for being careful about punishing those firms because consumers have benefited to the extent in fact benefited in a big way from the residual surplus that they get as a result of the firm's innovation and that kind of that's sort of a basic Econ 101 message that isn't stressed enough in my view in the courses you know sort of mentioned on the side oh yeah there's the Shumpeterian argument but it strikes me this is awfully important in a case like Microsoft and when you apply monopolization law to innovative industries and it's a reason to make you think carefully about the remedies and to be careful about the way you apply the monopolization standard. Okay I was gonna say I think the last point that I'm coming to is the US and the world or the US and the EU. So the experience that we've gotten out of this case is that the EU will take fairly aggressive arguments that are raised by enforcement authorities here and we'll run a lot further with them and that's a problem because we have different systems the evolution of monopolization law here is very different from what's happening in the EU. Here we have a court driven process so that when the DOJ or the FTC go into court here in the US they have to worry about what's going to happen because courts are independent, courts apply their rule of reason standard and they have an independent reasoning process when they develop that standard and so the FTC doesn't go into court thinking ah the appeals court or this court is going to defer to us on important questions because we're the agency, we're the experts on this. In fact if anything they're often disappointed to find out how little deference they get in the courts. In the EU it's a different ball game because they have a manifest error doctrine that's applied by the courts so it's pretty much a deference rule. The European Commission gets to make decisions on economic matters on the facts and for the most part the court of first instance is going to defer to the European Commission. I think it's an enormous difference and I think it's one that is worrisome in terms of the divergence between monopolization law and the US and in the EU. The European Commission is in a position to be a lot more aggressive and not to have to worry about running into brick wall in the courts in the first place in most cases. So for that reason I think it implies that it's sort of an obvious thing that enforcement agencies have to be aware that their aggressive positions at least in today's world are going to become a different issue when they go into the more than 100 competition law regimes around the world because they're not operating on the same legal systems the same legal system that we have here. So maybe the difference between the US and the EU is really a common law versus civil law distinction because the civil law is sort of takes a more top-down approach and takes its rules from what the government says and develops its rules from what the government says about the law. Maybe that's the core of it but we have different reasoning processes that are driving the law and so as a result I wouldn't be optimistic about some convergence about convergence between US monopolization law and European Union monopolization law. There's a real concern there that the European Union will keep going on a much more aggressive track and will not face the strong headwinds that our enforcement agencies run into when they go into court. I'll stop there. That's great. Thank you, Keith. Thanks for fitting so much into a tight lock and last up, Doug. Well, how much time do I have? 15 minutes. Go ahead and take it all. We'll squeeze, we'll figure it out somehow. I don't want to cut you short so go ahead. I just have 15 minutes to keep you guys from lunch. Good, okay. Thanks for your assignment, Phil. No, it's all real. It's one of my three favorite meals. Okay, among the many wise things that Brad Smith said is that perspectives really matter and those of us with people with different perspectives are gonna take away different things from this case and this saga and regard different things as important. My perspective is that of an antitrust lawyer. I'm not a computer junkie and I'm not an internet junkie. I'm gonna look at this as a matter of antitrust law and if I can do it in 15 minutes, I'm gonna touch briefly upon four topics. One, very briefly, I wasn't planning to do but I'm provoked to do it by what a number of people, including Harry, have said. And that is the issue of remedy. We might get to this in greater detail in the round table at the end of the day but there's been an implicit, I think, premise in a lot of the conversation in the last 24 hours here that what this case is all about or how it should be measured is by the quality or the efficacy of an injunctive remedy intended to restore competition to the market in which there was thought to be a competition problem. And Harry went so far as to suggest that the failure of remedy or flunking remedy 101 might discredit the whole antitrust enterprise. Others have said, certain government officials have said if you don't have a good remedy in mind, you shouldn't bring the case. And by remedy, I mean, I'm talking about injunctive remedies to restore competition. I think this is a very wrong-headed way to think about antitrust. There are a lot of reasons to bring cases other than an injunctive remedy to restore competition. After all, we do not refrain from prosecuting murder cases simply because we cannot resurrect the courts. And I'll elaborate on that maybe later. Okay, point two. History is written by the winners. And when it's written by the winners, you take what the winners say as if it's true. And I'm gonna assume, of course, that the winners hear what they say was true. But you also overlook what you thought or what the world might have thought before the victory, before the winners got to write it. And I think it's important to remember some of the contributions of this case to the way we think about the world because there are things I believe that we take for granted now that were not taken for granted 10 years ago. Network effects is one of them. When this case was filed, network effects were an important part of the government's theory of the case and the application's barrier to entry. And yet, there was a tremendous public debate. I think at least maybe the majority of the commentary at that time said, oh, this is all poppycock. There were articles written saying that the quirky story about the typewriter key, which was one of the fables on which the networks effects thing was built, that that was all a bunch of nonsense and that's really not how quirky it came to be. There were other articles that said if network effects and arguments that were made that if network effects meant anything, they would mean that the incumbent had an impregnable monopoly and look how, in fact, we went from a busy calc to forget the other series of superterian changes in these so-called network industries. It's all a bunch of hokum. And today, I think nobody says that. I think we understand network effects is a staple in the way that we view the world. Second, it was thought 10 years ago that tying theory was about leveraging from the tying product market to the tied product market. Now we understand that tying can be looked at more broadly as bundling products for the purpose of, among other things, depending on the circumstances, protecting the market power or excluding rivals from the tying product market. And Dennis Carlton, certainly no leftist, wrote, I think, the first major academic piece sort of formalizing that way of looking at it. Dennis, for those of you who don't know, was a student of Frank Fisher at MIT and then became the benefactor of the endowed chair that Frank now owns. I think he was able to become a benefactor. I gave him a good grade, you know. Well, I bet he always spoke highly of that and said, and then Lexicon had its IPO and he was able to endow it. Okay, so this new way of thinking about tying and bundling, which has spawned, to some extent, a lot of controversies in bundled pricing as well as tying law, I think was, again, a product of the Microsoft case. Product design, innovation, what's the role of antitrust? Coming in the heels of the IBM cases, there was a substantial reason to believe that antitrust doctrine 10 years ago created virtually no room for an antitrust court to second guess a product design. A lot of dicta in cases, no real hard holdings, I suppose. A lot of dicta and almost holdings in cases said, courts, we don't know what to do, we can't second guess. We're not gonna be as smart as the engineers at Microsoft, we shouldn't get into the center prize. The Consent Decree Court of Appeals came very close to saying that, but at the end of the day, the unanimous DC Circuit, Percurium Court of Appeals did second guess product design at a level that frankly surprised me when they held it was an anti-competitive for Microsoft to co-mingle certain files. And I think that means product design while I think we all recognize something that the law should approach with considerable caution is a legitimate subject of antitrust inquiry and that wasn't something one would have taken for granted 10 years ago. Similarly, 10 years ago antitrust was a rather formalistic body of law in some ways. There were a lot of categories of analysis and I think as Steve Holstam or someone pointed out earlier, maybe it was Phil, one of the reasons the complaint was written the way it was starting off with exclusive dealing and then tying was that there was plaintiff-friendly section one doctrine involving those categories. We always knew that this was a case about monopolization. The question was how to present it to a judge in 1998. Back then you could win a case or so you thought if you could show foreclosure of X% of the market in the exclusive dealing case or if you could show or you might lose a case if the exclusive dealing contract was not for a duration of more than a year and other categories like that, of course the per se rule in tying, the Court of Appeals opinion and I think this has had an enduring impact in the way we think about antitrust is basically said let's get rid of all these categories. We don't care about 30% thresholds in one year tests. We wanna know on the facts of this case was the conduct anti-competitive or exclusionary? That I think is a major, almost a paradigm shift that we wouldn't have necessarily expected 10 years ago. Monopoly broth that used to be set, I wrote this in a brief some years ago, zero plus zero still equals zero. How can you add up a bunch of conduct that doesn't bother the antitrust laws accumulated and turned into an antitrust violation? Well the government argued in the DC circuit implicitly agreed, although it explicitly said it wasn't reaching the issue, implicitly agreed that if you take conduct that is anti-competitive by the appropriate standard, I'll get to that in a second. And it has a tiny impact such that that particular aspect of conduct doesn't have enough of an impact on competition to violate section two, but you have a whole mess of that conduct, the cumulative effect of which has a sufficient effect on competition to injure competition, that can violate section two and that's a new way of thinking about antitrust that I think is now conventional. So I think we should not forget the many things that antitrust now takes for granted that were either surprising or at least highly contested 10 years ago. Okay, third topic. The case didn't resolve everything, obviously, in terms of antitrust doctrine. One of the most interesting and important things where it really kind of, it maybe stirred up a hornet's nest was the antitrust intellectual property interface. Microsoft argued a constellation of arguments about innovation, high technology industries, high fixed costs, low variable cost industries, and intellectual property and said this is not something that antitrust tools, antitrust doctrine is well-equipped to grapple with. And they did raise obviously some difficult questions. Court of Appeals unanimously said a poppycock, in fact characterized Microsoft's most sweeping argument of a kind of intellectual property immunity as bordering on the frivolous. And gave short shrift to its arguments because we're talking about the aspects of its copyrighted software. It was in a safe harbor. Now that was just the tip of the iceberg. Now we have, of course, a robust industry which I'm having a lot of fun with in the intersection of antitrust and intellectual property in all sorts of areas involving patent pool, standard setting and who knows what else. So this case didn't, Microsoft didn't resolve it but it certainly put it on the table for antitrust, the grist for the antitrust mill. And then finally and somewhat disappointingly, from my perspective, the case did not resolve the question of what do we mean by any competitive conduct per section two of the Sherman Act. The government had argued essentially for what has now come to be known as the no economic sense test. That is to say, would this conduct have made economic sense for the defendant if it had not excluded rivals and enabled the defendant to maintain a preserved market power that otherwise wouldn't have had. That's not, I think contrary to what Professor Hilton said, I don't think that test is inconsistent at all with a dynamic innovation sensitive analysis because all you have to do in that analysis and what the government argued in this case is you ask yourself, would the legitimate payoffs of an investment in innovation justified this conduct even if it had not raised rivals costs in ways that created additional market power. That's a fairly conservative test. The DC circuit appeared to go beyond that to the left by saying, no, no, no, we're not just gonna look at that question, we're gonna balance in cases where there's both benefit and harm, we're gonna balance the two. But in its application, I'm not sure the DC circuit actually meant that, I'm not sure any court has actually ever balanced what the DC circuit seemed to do is to say, if I can think, not if I can think, if there is an efficiency that has proven for the conduct, even if that efficiency wouldn't have justified the defendant's investment, that is to say, wouldn't have been enough to make the conduct profitable for the defendant. If there is an efficiency, defendant's gonna win. If there's no efficiency and there's harm to competition, only then does the plaintiff win. But that issue's not been resolved because it's not clear what the DC circuit meant and there's the DOJ section two report and the FTC assault on it clearly indicate the widespread disagreement about that critical question of what is anti-competitive conduct for section two. Fourth and final point I wanna make, and this is something I think is lost sight of, although I have a hunch that our friends from Microsoft haven't lost sight of it. The Microsoft case, USV Microsoft, was doctrinally, to my lights, a very conservative case, not completely hard right, but a very conservative case. The conduct standard was this no economic sense standard, which is way to the right of an ad hoc balancing test, way to the right of where the EC is, even to the right in this respect of the DOJ's recently released report which explicitly said we don't like the no economic sense test because it would permit a defendant to prevail with a modest efficiency contribution to society even if there's a substantial long run impact on rivals and on competition. So measured I guess by where antitrust doctrine is today, the case I think was quite modest and if it was not a conservative case in its contribution, it may be mostly because it stirred the pot and perhaps contributed to where the EC is today and to where the FTC wants to be today. Wonderful, thank you. That's a huge tour of topics in a very short time. I appreciate this.