'Arrogant' Gates plots his next move

By ROGER FRANKLIN

It is a remarkable thing, the practice of law in the United States.

Not for its stated objective - that the guilty be punished and evil redressed - so much as in its practice.

Take Judge Thomas Penfield Jackson, for example, the man who last year brought the US Government's 18-month assault on Bill Gates and Microsoft to a conclusion by ordering that the software colossus be split into two separate companies to protect the world from a ruthless monopoly.

In just about any other country with a civilised legal system, that would have been the final word from the bench. Jackson could have been expected to retire to his chambers while Microsoft's lawyers mulled their options and another judge prepared to hear the inevitable appeal.

Except this is America, where jurists and prosecutors aren't always constrained by the quaint convention that demands participants keep their personal opinions to themselves. Long before he brought down the final gavel, the case had made Jackson a celebrity - the Judge Ito of corporate law, if you like - whose hobbies, marital happiness, amateur interest in history and near total lack of computer savvy were all chronicled and dissected in minute detail.

Now that the reporters were leaving his courtroom, he perhaps felt just a twinge of regret that the spotlight was moving on.

Whatever his reasons, the silver-haired star of countless nightly news broadcasts appears to have decided that it would be nice to linger just a little longer at centre stage.

First came a round of public appearances, where Jackson amplified his findings and personal disdain for Gates and Microsoft to audiences of lawyers, legal scholars and graduate students. And last week, more than seven months after the historic verdict, the biggest bomb of them all exploded when comments the judge made to a favoured reporter while the case was still in progress were published in the New Yorker.

To paraphrase the magazine's interview with Jackson, Gates' behaviour in the witness box - his convenient lapses of memory, the bristling answers, the weary condescension - persuaded the judge that this was someone who needed to be taken down a peg or two. Tapping his recreational reading of history to find a figure of comparable villainy, Jackson said of Gates: "I think he has a Napoleonic concept of himself."

Even more than the violations of US anti-trust laws - which at the time Jackson spoke to the New Yorker's Ken Auletta had yet to be established in the courtroom - the newly published comments make it clear that long before the 18-month trial had run its course, the judge had decided that Gates deserved to be punished for conducting both himself and his company's affairs with "an arrogance that derives from power and unalloyed success." The software tycoon's fatal flaw, Jackson told Auletta, was that he had never once been exposed to "hard experience." The judge proposed to give Gates a dose of adversity. Though Jackson probably did not consider it at the time, the Napoleonic metaphor was an ironic choice. The judge was obviously thinking of the emperor's final years, perhaps imagining that the verdict would amount to a route map for Gates to follow on his whipped and beaten retreat from the latter day Moscow of Jackson's courtroom.

If Gates accepts that comparison, then the way he is currently plotting and planning to defy the verdict indicates that he must have a very different Bonaparte in mind: not the paunchy exile on St Helena but the sleek, slim hero of the early years - the indomitable conqueror whom the painter Jacques Louis David mounted on a rearing white charger in his hagiographic masterpiece Napoleon Crossing the Alps.

That was the young Napoleon of the Italian campaign, the one who was always outnumbered but never outsmarted. The one for whom, time and time again, looming defeat was but the overture to yet another improbable triumph.

Though it is still too early to discern the precise thrust of Gates' latest battle plan, Jackson's rash candour - at one point in the New Yorker interview he likens the tycoon to "a gangland killer" - may well prove to be the blunder that provides Gates with the opening he needs. Indeed Gates began laying the groundwork even before the verdict, when he poured billions into America's large private charity. Much of the money has been dispersed to black neighbourhoods, where it is paying for new computers and the internet.

Noblesse oblige? Perhaps. But the advantages of holding the high moral ground became clear when a group of black employees filed suit for racial discrimination, charging they had been passed over for promotion because of their race. Don't be silly, Microsoft's flacks replied. How could Bill be prejudiced when he is forever helping Afro-Americans?

The other elements of his battle plan are either in place or about to assume their positions when Microsoft's presumed ally President-elect George W. Bush takes the oath of office on January 20 and brings his pro-business views to the White House.

First, it would be best to start with the question of just how the world's richest man proposes to deal with a more pressing enemy: the sudden chill that has descended on the American economy in general, and the technology sector in particular.

A year ago, before the dot-coms turned into dot-bombs and Wall Street's high-tech express ran off the rails, Microsoft stock was trading at a high of $US119 ($266) a share. Last week, it hovered around $50.

Sales of personal computers in the US, and indeed, throughout the entire world, are down by 30 per cent or more on last year.

So are shipments of routers and servers, the internet's vital switching stations that channel blips and blasts of digital code around the web.

There are a few rays of brightness, most notably the opportunities for manufacturers of both hardware and software to regain lost ground if the wireless web takes off, as the Street guardedly believes it has the potential to do. But in an economy where a company like eToys, which once traded for $68 now commands just 12c a share, the rules have clearly changed.

A snappy web address - hellosuckers.com, say - is no longer every fool's substitute for a corporate ledger generously smeared with black ink. It seems that profits really do matter after all. In the meantime, PCs that might otherwise have had Gates' latest offering, Windows 2000, loaded on hard drives sit unsold on warehouse shelves.

In the view of analysts, Microsoft is being pinched by its own success.

Windows 98, they say, remains an entirely adequate programme for most users. In a booming economy, companies and individuals might have been expected to splurge on the latest improvement to the venerable operating system. But in the current climate of uncertainty, consumers and corporate purchasing managers are restraining the technophile lusts that would otherwise have driven them to snap up the latest handiwork to emerge from Microsoft's headquarters.

This is not a problem that affects Gates alone. Across the Nasdaq, the markets hidden hand has been swatting high-flyers right and left.