Microsoft hides behind Cheshire Cat grin

It's been a year since Judge Thomas Penfield Jackson's ruling that Microsoft should be split up, and it's beginning to look like a wasted effort.

The US Court of Appeals has overridden most of the original ruling, although it still finds Microsoft guilty of acting in an anti-competitive manner.

With a retrial ordered, the company looks safe from any repercussions for at least a year. Microsoft intends to carry on the way it always has, as a statement issued after the appeals court verdict shows.

"Microsoft is pleased that the US Court of Appeals has overturned most of the lower court's findings against the company, drastically narrowing the case and removing the breakup cloud from the company," it said.

Microsoft seems confident that the retrial won't throw up any major punishment. Industry comment on the issue is varied.

Matthew Szulik, chief executive of Red Hat, claimed: "I think we're dealing with the most vicious competitor of the last 30 years in technology, and it's only getting stronger."

Other companies and industry bodies seem quite pleased with the result and believe that it's positive for the anti-Microsoft forces. However, most competitors have gone quiet, as if in silent resignation.

A large part of the problem lies with the original court case, which was pinning Microsoft as anti-competitive largely because of the browser wars.

Simon Moores, chairman of The Research Group, said: "We've moved away from Windows to .Net and XP."

It was hard enough for the US Department of Justice to sue before, but now Microsoft is embracing open standards, the job is far more difficult. Whether this change in strategy was on purpose or not, is difficult to tell.

It's what Moores called Microsoft's "Cheshire cat" strategy: "All you can see is this smug grin and nothing else. You have to turn sideways to find out what's really going on."

While Microsoft has to return to court for a decision to be imposed, the company is really left to its own devices for the time being. Even then, the signs are pointing to Microsoft getting away with an out-of-court settlement, something it can easily afford.

The US economy is starting to go into recession - as it did when the first Microsoft announcement was made. As Moores put it, "a powerful Microsoft is a powerful US economy".

If money talks, then Microsoft is screaming. With the situation as it is, it looks set to walk away from this with barely a scratch and continue to be the hard-nosed player it always was.

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