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Microsoft

Microsoft Antitrust Update 290

You can't help but know that Microsoft and the Department of Justice (plus several of the states that joined in the suit) are attempting to settle their antitrust dispute. The rest of the states are holding out for a settlement with more teeth, or a continuation of the case. A few links from the past few days: The LA Times looks at the states still opposing Microsoft. Microsoft defended the settlement before a Senate committee, which was crippled by political maneuvering (see also the NYT story). The speech given by the CEO of Red Hat is online. Microsoft filed a brief with the court, unsurprisingly urging the court to accept the settlement. The Register has a story on the proposed settlement, which is available at the DOJ Antitrust website. Linuxplanet has some advice for people who want to comment on the settlement - you've got 60 days from November 28. Finally, Microsoft has named two people to help it comply with the proposed settlement.
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Microsoft Antitrust Update

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  • by Sorthum ( 123064 ) on Friday December 14, 2001 @12:41PM (#2704712) Homepage
    I'm not so sure. This would be valid if MS was just sitting on its hands, but as the .NET initiative and the whole Passport fiasco show, they're doing anything but. The problem lies in the fact that they're no longer innovating so much as they're using their size and market share to do things unilaterally. There NEEDS to be some regulation of this...
  • Senate Hearings (Score:4, Insightful)

    by PoiBoy ( 525770 ) <brian.poiholdings@com> on Friday December 14, 2001 @12:50PM (#2704769) Homepage
    Based on the few excerpts of the Senate hearings I heard on TV yesterday, I would be surprised if in fact the proposed DoJ/MSFT settlement is allowed to go forth. It was rather clear to me that most Democrats as well as Republican Orrin Hatch (from Novell country) are outraged.

    IANAL, but I wonder to what extent the presiding judge pays attention to the media and how this will affect her decision. On the one hand, judges are not supposed to be swayed by media reporting, yet the judge is supposed to consider public comments about the proposed settlement. To the extent that Senators represent their constituents' beliefs and needs, the judge may give some weight to these types of Congressional hearings.

  • by Erich ( 151 ) on Friday December 14, 2001 @12:59PM (#2704832) Homepage Journal
    Read part B:

    (from the settlement)

    B. Microsoft's provision of Windows Operating System Products to Covered OEMs shall be pursuant to uniform license agreements with uniform terms and conditions. Without limiting the foregoing, Microsoft shall charge each Covered OEM the applicable royalty for Windows Operating System Products as set forth on a schedule, to be established by Microsoft and published on a web site accessible to the Plaintiffs and all Covered OEMs, that provides for uniform royalties for Windows Operating System Products, except that:

    1.the schedule may specify different royalties for different language versions;

    2.the schedule may specify reasonable volume discounts based upon the actual volume of licenses of any Windows Operating System Product or any group of such products; and

    3.the schedule may include market development allowances, programs, or other discounts in connection with Windows Operating System Products, provided that:

    a.such discounts are offered and available uniformly to all Covered OEMs, except that Microsoft may establish one uniform discount schedule for the ten largest Covered OEMs and a second uniform discount schedule for the eleventh through twentieth largest Covered OEMs, where the size of the OEM is measured by volume of licenses;

    b.such discounts are based on objective, verifiable criteria that shall be applied and enforced on a uniform basis for all Covered OEMs; and

    c.such discounts or their award shall not be based on or impose any criterion or requirement that is otherwise inconsistent with any portion of this Final Judgment.

    This is the most important provision of the entire settlement.

    This eliminates Microsoft's ability to use strong-arm tactics in the ways it has been doing -- not giving special pricing to vendors who don't stay in line with what Microsoft and friends wants to do. It says that if you buy (OEM) licenses from Microsoft that (almost) no matter what you do as long as you buy the same number of licenses as someone else you'll get the same price.

    The only thing that I would like better is for the Microsoft License Schedule to be applied uniformly to all customers, regardless of OEM status. Without that, Microsoft may find loopholes to force companies out of OEM status and buy retail licenses (or whatever) but this is still a huge step.

    There is lots of talk about MS Word for Linux and such, but I think that would only further the monopoly, and I just don't think it's right for the government to mandate a product line. I think that fair pricing, however, is something totally reasonable and that will, in the end, hurt Microsoft more than most unfair measures we could add.

    Having uniform licensing to all (not just OEMs) would be the one change I would make if I got one choice, but if I got two changes I would make Microsoft release all the API specs in a public forum and make them freely available, instead of just on MSDN. Say, on their web site and with the clause that they must be freely distributable in an unmodified form.

    I think that those two things would make this settlement even better, but as it stands I think that the settlement is a fair solution.

    At least for the abuse of monopoly in the OS realm, which is what this is all about.

  • Re:No Competition? (Score:5, Insightful)

    by ethereal ( 13958 ) on Friday December 14, 2001 @01:00PM (#2704837) Journal

    Look at this the other way - pretty much the only successful competitor to Microsoft is giving away their product for free. The big reason that Linux is such a competitor is because the normal Microsoft tactic has failed: undercutting the competition by subsidizing their new market-breaker with money from the other parts of their empire. Also, there's no way for Microsoft to completely buy up Linux and Open Source, so they can't remove a competitor that way. You can't undercut or buy out "free", and so Microsoft is temporarily stymied, but they still have vast marketing and lobbying muscle.

    Does it strike you as a particularly healthy industry if you can only gain marketshare by giving your product away? Is it reasonable that the only way to protect your product is to create it via a group of people who aren't even a company, just to avoid being swallowed by Microsoft?

    Now, of course I know that RedHat charges money for some things, and they may even make a profit pretty soon, and Red Hat is in fact a company that Microsoft could buy. But Microsoft's competition isn't so much Red Hat as it is the Linux and Open Source movement. And taken overall, Linux and Open Source are largely free, and are largely producted by individuals and representatives of many companies who collectively could not be bought out. Those are the only reasons that Microsoft has any competition, and those reasons still do not add up to a healthy software industry.

  • Re:Senate Hearings (Score:1, Insightful)

    by Anonymous Coward on Friday December 14, 2001 @01:01PM (#2704843)
    The Senate has very little power in the matter at this point. About all they can do is "express outrage" and drag DOJ types in to testify.

    Experienced CSPAN viewers will recall how the Senate expressed an enormous amount of outrage at Janet Reno for 8 straight years, none of which affected the DOJ that much at all.
  • by Anonymous Coward on Friday December 14, 2001 @01:11PM (#2704884)
    Microsoft would appear to be jumping the gun, since (as far as we know) no actual settlement has been reached. Acting as if a deal is already made can have a demoralizing effect on the opposition, as ms may well know.

    On the other hand, when a massive company like MS barges ahead as if the conclusion is foregone, it may have knowledge or at least very strong confidence that the deal is in fact done, and all that's left is to sign on the dotted line and make the appropriate "campaign donations".
  • by ender81b ( 520454 ) <wdinger@@@gmail...com> on Friday December 14, 2001 @01:13PM (#2704890) Homepage Journal
    If RedHat (or any other linux company) really does suceed in getting that big it would be different from the MS for a number of reasons but the main is that the source code would still be available, allowing people to pick a different distro, modify it, etc if they really wanted to - and I believe having the Source code out would make it near impossible for any one company to grab a monopoly.
    Sun-AOL etc are NOT monopoly's. That is why people aren't crying out about them. Not only are they not monopoly's but they don't do anything to make us believe that they are. In the past few years microsoft has only gotten worse, not better. They have totally ignored the DOJ case and continue to try and grab every bit of market share out there (X-box, .NET). Not only that but a number of recent gaffes (locking Non-IE browsers out of Hotmail,MSN,MSNBC, etc)don't do much to inspire people's confidence that they aren't a monopoly.
  • by theantix ( 466036 ) on Friday December 14, 2001 @01:14PM (#2704899) Journal
    I just want to know... how the DOJ (and by extension everyone else)can possibly see that MS is anything BUT a monopoly. They're growing, not shrinking, and the government seems to detect no problem with this.
    For starters? The economic concept of monopoly power holds that a "monopoly" is not an absolute, it is a point on a scale. Where they are on the scale is uncertain.

    Microsoft is not only company in any market segment they are in, thus they are not an absolute monopoly like the power companies are (and how the phone and cable companies used to be). However, because of their dominant share of the desktop PC and office suite market they have a fairly high degree of monopoly power. The barriers to entry in the industry are the entrenched applications using the the Win32 API, and the implementation of the MSOffice file formats. That being said, there are many factors that limit their monopoly power.

    The internet and java are (were?) starting to make client less important. This limits the impact of the dominance of the Win32 API.
    Pirating is rampant. This limits their monopoly power over pricing especially in the home market (*YES IT DOES*).
    Crossplatform development is progressing as people can write QT applications that can be ported to several platforms including Win32. Again this reduces the the dominance of the Win32 API.
    Viable free alternatives are emerging (StarOffice 6, Netscape 6.1, Mandrake 8.1). Again this reduces the the dominance of the Win32 API.
    File format filters (In StarOffice6 for example) are getting extremely good at reading .DOC and .XLS which limit the impact of the MSOffice monopoly power.

    The bottom line? Yes, Microsoft has a high degree of monopoly power, but it's not cut-and-dry about how much power they have. And it's certainly not cut-and-dry what to do about them either. Certainly it is important to limit the impact of their potential leverage (For example that Passport, Messenger, Hotmail, and MSN Photos are bundled with XP) from their existing markets, but don't think for a minute that it is simple. It's not.

  • by Darth RadaR ( 221648 ) on Friday December 14, 2001 @01:24PM (#2704950) Journal
    One thing that would (IMHO) *highly* cut back on M$'s monopoly would be for the DOJ to make M$ open up their formats on the Office products. I can't count the times that I've told people to send me a document in text-only format because I'm not using MS Office and Star Office might or might not convert it properly.

    If M$ is going to get any fair competition, they need to open their formats on Word and Excel so people are not forced to use MS Office if they have to work with those formats. That would be a big boost for the developers of Abiword, WordPerfect for *nix, Gnumeric, Star Office, etc. They wouldn't have to spend so much time on converters. They could spend their time making great office programs that work with anything someone sends you, and make the office application software battle a fair fight.

  • by NetSettler ( 460623 ) <kent-slashdot@nhplace.com> on Friday December 14, 2001 @01:29PM (#2704979) Homepage Journal
    ... Under the terms of the settlement plan, Microsoft agreed to provide cash, computers and software it values at more than $1 billion to public schools that poor children attend. ... [washtech.com]

    Filling our kids' classrooms with visible reminders of a company is no way to correct a monopoly any more than it's a way to keep kids from smoking.

    Imagine if the tobacco companies had been allowed to settle by saying "we'll put a bunch of stuff we know you can't afford and desperately need into your schools, with our logos highly visible to impressionable young children who will grow up highly inclined to become our next generation of customers ... in exchange for being let off."
  • by C. Mattix ( 32747 ) <cmattix&gmail,com> on Friday December 14, 2001 @01:38PM (#2705010) Homepage
    substitute National ID for Passport, Oracle TV for MSNBC, and Oracle Box for XBox...

    I'm currently using Opera and just for fun opened a Netscape window to look at the MSNBC cover page, I played NFL2k2 by Sega on a friends XBox last night, don't have messenger or .NET running my XP machine, and it all seems to work just fine. XBox works fine with non-MS games, MSNBC works fine on non MS TVs even AOL-TW cable, and I can still install any browser I want on the new and fancy Windows. The only reason that MS has so much weight, is that there is so much consumer demand for their products. Why do you think that the OEMs were so scared if they threatened to revoke the OEM agreement, they would lose all of those potential customers. Anti-Monopoloy law was designed to help the consumer, not other companies, and I'm still not convinced that MS has done as much consumer harm what people are being let to believe by the AOL-TW-Sun lobby.
  • by lgraba ( 34653 ) on Friday December 14, 2001 @01:45PM (#2705058)
    Do any of these issues change the testimony in the anti-trust trial that:

    - MS threatened Compaq with withheld licenses if they didn't remove Netscape from their computers going out the door.
    - MS threatened Intel management over Intel's work on multimedia software.

    These are but two examples of the way MS abused their monopoly power. The fact that there might be competition on the horizon (a speculative, not certain, assertion) does not change what has occured one bit. If I robbed a bank, should I be spared a penalty because I myself might be robbed sometime in the future? I don't think so!!!
  • by Alsee ( 515537 ) on Friday December 14, 2001 @01:52PM (#2705101) Homepage
    a couple of people who will be very strict with me and spank me most serverly if I do it again

    Read the proposed settlement more closely. They aren't allowed to spank Mircosoft. All they can do is snitch on them. But they can't even really do that - they are under a GAG ORDER. They can only snitch to the DOJ. Considering that the DOJ came up with this settlement, somehow I'm not thrilled with a GAG ORDER saying if Microsoft breaks the lawn one else can know.

    -
  • by sacrilicious ( 316896 ) <qbgfynfu.opt@recursor.net> on Friday December 14, 2001 @02:00PM (#2705154) Homepage
    Why is MS where they are? Cut throught business practices, strategic partnerships, product innovation, and good luck. Why do you think Sun-Tzu's Art of War is required reading at business schools around the country.

    Microsoft is where it is primarily because of the usefulness of OS software coupled with an operating system's unparalleled potential to restrict and channel competition. Plain and simple. Making software is different from making coffee mugs; you can't program the mugs to pour milk slower than they pour coffee, or to be slightly incompatible with orange juice.

    Tzu's Art of War is required reading at business schools because of the dramatic ego inflation it confers on its readers. Some personality types enjoy (and are motivated by) the thought that their gain is necessarily someone else's loss.

    There was a slashdot exchange on this topic that I resonated with. It was a followup to an interview with Linus wherein he was asked what his strategies are for competing with other operating systems, and he answered "I don't actually follow other operating systems much. I don't compete - I just worry about making Linux better than itself, not others." One of the slashdot exchanges that consequently took place was the following:

    first post:

    To quote the "Art of War"

    One who knows the enemy and knows himself will not be in danger in a hundred battles.

    One who does not know the enemy but knows himself will sometimes win, sometimes lose.

    One who does not know the enemy and does not know himself will be in danger in every battle.

    response:

    [yawn] I'm so sick of people quoting "The Art of War" and "On War" and "The Book of Five Rings" and other military classics in reference to software development. First of all, as several other posters have pointed out, Linus sees himself primarily as a programmer, not a businessman -- he doesn't define other OS'es as "the enemy" and therefore doesn't worry about ancient military wisdom. Second, and perhaps more important, even more business-oriented programmers are fools if they think military advice translates to any business, especially software. No matter what the Japanese say, business _isn't_ war.

    Whatever happend to that fabled Japanese "business is war" economy, anyway? Oh, that's right -- all those warrior businessmen had a couple of decades of success with their slash'n'burn tactics, then kept going with it and drove one of the world's largest economies straight into the toilet.

    There's a lesson here, one which Microsoft and Oracle and Sun should learn really fast war is about killing people and breaking things, and business (ideally) is about empowering people and building a stable, lasting structure to create good products. These are not only different goals, they're opposite and mutually incompatible goals, and techniques that work for one simply _do not work_ for the other.

    I've seen this from both sides, by the way -- I was in the Air Force when A.F. leadership went through a "TQM" craze. It didn't work worth a damn then, and "Sun Tzu's Guide To Crushing The Competition In The Global Marketplace" doesn't work now.

  • by RNG ( 35225 ) on Friday December 14, 2001 @02:14PM (#2705217)
    The contrast of how the US judicial system can work is interesting: Dimitri circumvents the protection on some minor piece of software and gets thrown into jail. MSFT leaves behind a trail of dead competitors and obvious monopolistic abuses, their executives basically deceive the court with false or doctored testimonies and they're looking at another slap on the wrist.

    Isn't it great what (lots of) money can buy you??
  • by Anonymous Coward on Friday December 14, 2001 @02:32PM (#2705302)
    - MS threatened Compaq with withheld licenses if they didn't remove Netscape from their computers going out the door.


    Compaq then refused to remove Netscape.

    Microsoft backed down and there were no repercussions.

    You'll have to come up with better than a little heat from the marketing guys to prove there was coercion involved. Citing a single instance where Microsoft followed through on their threats would be a help.

    However, nobody presents evidence of a follow-through. So you're all blowing hot air.

    It's no surprise the public isn't buying it. No, it isn't just 'Astroturfers' out there. People complain about their Windows but you'd be amazed at how much more they would hate Linux if forced to use it.
  • Bitch and Moan... (Score:2, Insightful)

    by dygytyz ( 540345 ) <scb&dygytyz,com> on Friday December 14, 2001 @02:44PM (#2705359) Homepage
    ...all you want, but the ONLY way that things are going to change is through:

    1. Voicing your displeasure in Microsoft by:

    a) Boycotting Microsoft Products
    b) Sending Microsoft and your elected representatives messages about your personal boycott.
    c) Encourage others to do the same.

    2. Alternative Advocacy:

    a) Put Linux on every computer you can.
    b) Educate, amuse, and entertain the people you come into contact with about the alternatives. Make it fun, not a chore.

    3. Quit talking out of your ass and spewing anti-MS propaganda. It's hard to make friends when you're vilifying someone else out of the other side of your mouth.

    The power of the American citizen lies within his and her wallet. When we buy a product, we are sending a message to the producer that we accept *everything* they do with respect to how that product is made, marketed, and consumed. If you want to hurt Microsoft - do it with your power as a consumer. Hit them where it hurts the most - in the P&L statement. Sell your MSFT and invest the funds in a company you admire.

    If you _have_ to use Microsoft products, that's fine, but I've found I can convince my employers to switch not by voicing my hatred of Microsoft, but simply comparing Microsoft products side by side with similarly capable open source alternatives.

    Three words: Return on Investment.

    That is all.
  • by Alsee ( 515537 ) on Friday December 14, 2001 @02:56PM (#2705410) Homepage
    The economic concept of monopoly power holds that a "monopoly" is not an absolute, it is a point on a scale. Where they are on the scale is uncertain.

    You missed. Monopolies are perfectly legal.

    Yes, Microsoft has a high degree of monopoly power, but it's not cut-and-dry about how much power they have.

    And it doesn't matter how much monopoly power they have.

    The issue is actions. Certain actions to maintain a monopoly position are illegal. Certain actions using a monopoly to create a new monopoly are illegal. Legal fact: Microsoft's actions were illegal.

    it's certainly not cut-and-dry what to do ... don't think for a minute that it is simple. It's not.

    No agument there, lol.

    -
  • by Danse ( 1026 ) on Friday December 14, 2001 @03:11PM (#2705474)

    Yeah, well they tried it in 1995. They got a settlement that time too, which Microsoft proceeded to laugh at and blatantly violate the intent of. If the settlement isn't airtight, it won't be effective. Microsoft has already illustrated that for us quite well.

  • by Mansing ( 42708 ) on Friday December 14, 2001 @05:33PM (#2705788)
    Microsoft has criticized the alternative remedy offered by the hold-out states as ``radical and punitive'' measures [yahoo.com] that ''seem calculated to inflict maximum commercial harm on Microsoft.''

    Uhmmmm ... isn't that the point when someone is found guilty?

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