[Federal Register Volume 67, Number 86 (Friday, May 3, 2002)]
[Notices]
[Pages 28700-29273]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: X02-20503]
MTC-00029649
Wayne Stringer
1270 205th St
Fort Seott, KS 66701
January 26, 2002
Attorney Renata Hesse
Department of Justice, Antitrust Arty
601 D Street NW, Suite 1200
Washington. DC 20530
Dear Attorney Hesse.
I strongly encourage your support in accepting the proposed
settlement in the Microsoft antitrust suit "Microsoft. has
simply provided a product that meets a market demand at a price the
consumer is willing to pay. If anything, their competitors have used
similar tactics to grow their own business--in a sense. keeping
the marketplace fair.
The unfairness lies in Microsoft's competitors using the marts
to accomplish what they couldn't do in the marketplace. ??'s Larry
Ellison has very publicly decreed their he will unseat Microsoft as
the number one player in the software industry, and he will do
anything to accomplish that goal I sincerely object to this move to
replace the free market system with court manipulation.
With all due respect. I hope you object as welt.
I encourage yore full acceptance and approval of the settlement.
I truly believe it addresses all involved and allows Microsoft and
the industry to move forward on a positive, note.
Sincerely,
Wayne Stringer
January 27, 2002, 11:40 pm
Antitrust Division
U.S. Dept. of Justice
601 D Street NW, Suite 1200
Washington DC, 20530-001
To Whom It May Concern:
I am writing to exercise my right under the Tunney Act to voice
my strong disapproval of the current proposed settlement of the
Microsoft anti-trust trial. The proposed settlement is both weak and
lacking strong enforcement provisions, and is likely to have zero
(or worse) effect on competition within the computer industry, with
continued and increased harm to consumers in the form of fewer
options in the software market and continued increases in the price
of the Microsoft software consumers are forced to buy.
Microsoft was convicted of abuse of monopoly power by one
Federal judge, and the judgment was largely upheld by another seven
Federal justices. In evaluating any proposed settlement, keep
repeating one Important Phrase over and over: "Microsoft is
guilty."
The seven justices of the appeals court ruled that any actions
taken against Microsoft (a) must restore competition to the affected
market, (b) must deprive Microsoft of the "fruits of its
illegal conduct," and (c) must prevent Microsoft from engaging
in similar tactics in the future. The proposed settlement fails on
every one of these.
(A) Restore Competition
Among the many flaws in the proposed settlement is the complete
disregard for the Open Source software movement, which poses the
single greatest competitive threat to Microsoft's monopoly.
Most organizations writing Open Source software are not-for-
profit groups, many without a formal organization status at all.
Section III(J)(2) contains strong language against non-for-profits,
to say nothing of the even less-formal groups of people working on
projects.
Section III(D) also contains provisions which exclude all but
commercially-oriented concerns.
To restore competition the settlement must make allowances for
Open Source organizations--whether formal not-for-profit
organizations or informal, loosely associated groups of
developers--to gain access to the same information and
privileges afforded commercial concerns.
(B) Deprivation of Ill-Gotten Gains
Nowhere in the proposed settlement is there any provision to
deprive Microsoft of the gains deriving from their illegal conduct.
Go back to the Important Phrase: "Microsoft is guilty."
In most systems of justice, we punish the guilty. But the current
proposal offers nothing in the way of punishment, only changes in
future behavior.
Currently Microsoft has cash holdings in excess of US$40
billion, and increases that by more than US$1 billion each month. A
monetary fine large enough to have an impact on them would be a
minimum of US$5 billion.
Even a fine that large would be a minimal punishment.
Microsoft's cash stockpile is used, frequently and repeatedly, to
bludgeon competitors, buy or force their way into new markets, or
simply purchase customers, with the long-term intent to lock people
and organizations into proprietary software on which they can set
the price. Taking a "mere" US$5 billion from their
stockpile will have zero effect on this practice.
For that reason, Microsoft's cash stockpile must be further
reduced. In addition to the monetary fine, Microsoft should be
forced to pay shareholders a cash dividend in any quarter in which
they post a profit and hold cash reserves in excess of US$10
billion. The dividend should be substantial enough to lower
Microsoft's cash holdings by US$1 billion, or 10%, whichever is
greater.
(C) Prevention of Future Illegal Conduct
The current proposed settlement allows Microsoft to effectively
choose two of the three individuals who would provide oversight of
Microsoft's conduct and resolve disputes. The proposed settlement
also requires the committee to work in secret, and individuals
serving on the committee would be barred from making public or
testifying about anything they learn.
This structure virtually guarantees that Microsoft will be
"overseen" by a do-nothing committee with virtually zero
desire or ability to either correct Microsoft abuses, or even call
attention to them.
Instead of the current proposal, a five-person committee should
be selected. Microsoft may appoint one person, but will have no
influence over any of the other four. For the four, two should be
appointed by the Federal court of jurisdiction, one should be
appointed by the U.S. Department of Justice, and one should be
appointed by the U.S. Senate. At least two of the appointees should
have technical experience and be competent to evaluate technical
proposals and arguments by themselves, without the filters which
assistants would bring.
These are hardly the only thoughtful and reasonable suggestions
you will no doubt receive regarding the proposed settlement of this
anti-trust case. And these are hardly the only suggestions which
should be adopted if the settlement is to prove effective. But all
of them are essential to that aim, and adopt them you must,
Thank you for your time and the opportunity to comment.
Respectfully,
Michael A. Alderete
569 Haight Street
San Francisco, CA 94117
(415) 861-5758
michael @ alderete.com
MTC-00029652
Ms. Renata Hesse
Antitrust Division
Department of Justice
601 D Street, NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
I am writing in supp ort of the consent decree for the Microsoft
settlement. Microsoft has show itself to be an innovator and a
company whose products make lives better for he average American.
This lawsuit is bad for consumers and ba?? for the economy.
By supper ting the consent degree, you will put an end to a
lawsuit theft has become more political than substantive. The Bush
administration priorities have been amazingly out of step and out of
touch with the American public Hopefully they will at least get this
one right and settle the suit. The I maybe we can all move on to a
healthy economy and a healthy debate concerning the future of our
nation.
Thank you.
Sincerely
Tim Allison Executive Board Member
CA Democratic Party
Title for identification purposes only. This letter reflects the
solely the opin on of the signer.
MTC-00029653
January 25, 2002
Renata hesse
Trial Attorney, Antitrust Division
Department of Justice
601 D Street, NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
The Microsoft Lawsuit Is Bad for Business and Bad for Consumers.
For many, the idea of attacking one of the most successful
companies in American history, and its CEO Bill Gates, sounds like
fun. But the Department of Justice's pursuit of Microsoft is no
laughing matter, having cost American taxpayers well over $35
million in litigation so far and the meter is still running.
The reality is that this lawsuit does nothing to benefit
consummers. It does however benefit Microsoft's competitors, who
after spending millions of dollars lobbying the Department of
Justice to file this suit want a return on their investment. Also,
it benefits the lawyers who have made a fortune on both
[[Page 28701]]
sides of this issue... and the Attorneys General and bureaucrats who
are making political hay, back home by demonizing Microsoft. The
real beneficiaries are the powerful anti-Microsoft forces not
consumers.
The Cost To Businesses and Consumers in Just Too High.
Rather than protecting consumers, drastic remedies such as
breaking up Microsoft would be a disaster for consumers and
businesses. The integration and standardization Windows brought us
has been a boon for the public as well as for our economic
productivity. What Bill Gates understood, much to his
competitors" chagrin, was that consumers- people who use
computers, not live computers--want an affordable and reliable
system that works with and understands other systems.
Government intervention into the world of high tech programming
and design sets a dangerous and potially disastrous precedent.
Dictating to Microsoft what technology it can develop will decrease
the effectiveness of existing products or meet the expanding needs
of users could cripple the technological innovation that has been
the hallmark of hour high tech, internet economy.
One could argue in fact that the genesis of the huge decline in
the Nasdaq, which so far has resulted in more than $2 trillion of
lost wealth, is primarily the result of the government's sustained
attack on Microsoft's right to innovate. After all, today Microsoft,
tomorrow Intel.
Over the past 10 years, Microsoft has lowered its prices,
created a better product, and invested enormous sums of money in
research and development. This doesn't sound like monopolistic
behavior by any standard.
The government's pursuit of Microsoft has cost the American
taxpayer over $35 million so far with devastating results for state
and private pension funds, and small investors, all over the
country, [illigible] state pension funds have lost $144.2 billion.
Here in California, since the March, 2000, break down of mediation
on the case, Public Employee Retirement System funds have dropped
more than $59 billion while the State Teacher Retirement fund lost
$15 billion.
We hope the consent decree is adopted and the federal lawsuit is
dropped. If not, it may be time to [illegible] our elected
representatives to do the right thing and allow Microsoft to
continue its history of investment, innovation and improvement The
American economy depends on it.
Sincerely
Joe [illegible]
Executive Director, SBCTA
214 East Victoria Street,
Santa Barbara, California 93101
Tel: 805.965.9415
Fax: 565-7915
email: info @ sbcta.org www.sbcta.org
MTC-00029654
January 9, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D S??et NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
As a member of the North Carolina General Assembly, I have
always sought to make government a cooperative partner of business
and industry. After all, business and industry creates jobs that
enhance the lives of countless North Carolinians.
For several years, I have witnessed the federal government's
pursuit of a lawsuit against Microsoft, one of the most successful
companies in the history of American business. This suit has cost
the taxpayers upwards of $30 million over the past years.
I request that Judge Kollar Kotelly approve the settlement that
the Department of Justice and Microsoft have both agreed upon. In
addition, I am pleased to say that my state, North Carolina, has
also signed the agreement and decided to settle.
In spite of the fact that nine state attorneys general plan to
prolong their cases against Microsoft, I believe the federal case
should be settled.
Sincerely,
Jeffrey L. Barnhart
State Representative
MTC-00029655
January 23, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street, NW suite 1200
Washington, DC 20530
Dear Ms. Hesse,
As a business executive who travels to Chicago on business from
my home in Greensboro nearly every week, I know how important
Microsoft's business technology is to American business, In fact, I
find Microsoft's products to be bery helpful when I travel abroad on
business as well.
I realize that not everyone travels to the extent that I do, but
I would imagine that most people who work In business do rely on
Microsoft products to a great extent. And shouldn't they?
Microsoft's products are universally recognized as the industry
leader and they've improved communication for American businesses,
schools and government.
Virtually everyone uses Microsoft's products, Executives,
attorneys, entrepreneurs, educators and government officials know
that Microsoft is the universal leader in technological innovation
They all have great confidence In Microsoft's products to get the
job done.
I read recently that Microsoft and the federal government agreed
to settle the antitrust lawsuit they've been engaged in for a number
of years. That's good news for businesses, families, the stock
market and the American economy, our economy needs a shot in the arm
at this point in time, and I believe that this settlement will
provide it, I request that Judge Kollar-Kotelly approve this
settlement. Thank you for your consideration of my comments.
Sincerely,
Kumar Lakhavani
Senior Manager
HR Dynamics Global Practice
MTC-00029656
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
As a member of the Greenville City Council, I am concerned about
the off??er that the Microsoft anti??rust lawsuit is having on both
the business and educational institutions in our city. I am a newly
elected member of the council, a member who ran in order to create a
more efficient government for our ??tizens. I am also concerned that
the government operates efficiently.
The American people have a twofold desire in regard to the
Microsoft suit, as I see it. First, they want the federal government
to work to create a more positive business climate for all
Americans. Government needs to use its power to encourage private
investment, innovation and job growth, Second, it is the moral
responsibility of the federal government to use taxpayers' funds
wisely.
The government's work in fostering a strong coonomy is
par??licularly timely right now. After all, the unemployment rate is
up, the stock market is down, and consumer spending is off. We've
got to get back on track. I can think of no more positive action for
the federal government to take than for its courts to approve the
settlement in the Microsoft case.
Also, Americans today are paying taxes to the federal government
at the highest rate per capita in over fifty years. It is the
government's responsibility to see to it that these funds are used
responsibly for the benefit and general welfare of the American
people. The Microsoft lawsuit has cost the American people $30
million to prosecute. It's time to and this litigious spending.
Thank goodness both parties want the suit to end. They have come
to art amicable settlement. I urge Judge Kollar-Kotelly to approve
the settlement.
Sincerely,
Ray Craft
Council Member
MTC-00029657
January 18, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Departnent of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
As a business leader who has served as Chairman of the American
Furniture against Microsoft is close to ending. Virtually all of the
executives in business and industry that I am in contact with want
to see the case settled.
Our society has become more litigious than ever. Litigation
costs business money... and can cost employees their jobs That's why
l believe that we ought to move beyond this ease. There are so many
societal problems for us to contend with no the least of which is
[[Page 28702]]
our ourrent economic recession. We need to focus on growth, and we
aced the government to be a true partner in that effort.
The company that I own uses Microsoft products every day. t find
them to be useful in making my business more efficient.
En??epreneurial life is much different from the legal profession. If
I am not constantly looking for now niches in which to make a
profit, my business will lag. Microsoft products have made my
business more productive, and I think it's time to settle this
lawsuit so that Microsoft can focus all its resources on creating
new products to benefit businesses like mine.
Microsoft and the federal government are in agreement On the
settlement, I strongly urge Judge Kollar-Kotelly to quickly approve
the settlement Let's set me economy moving again.
Sincerely,
J. Ray Shufelt
CEO
MTC-00029658
Beth Saine
Lincoln County Commissioner
1760 Whispering Pines Drive
Lincolnton, NC 28092
704.735,3297
January 18, 2002
Renata Hesse
Trial Attorney
Antitrust Divisions Department of Justice
60l D Strut NW, Suite 1200
Washington, DC 20530
Fax: 202-616-9937
As a member of the Lincoln County Commission, I am pleased that
the United States Justice Department is settling with Microsoft.
Technology is so important to the future of counties like ours all
across America, and this settlement will enhance all facets of the
tech industry in the coming years.
Our neighbors in Mecklenburg County have had many advantages
over Lincoln County, and other counties in the past. Charlotte is
the nation's mega banking centaur. That attracts business, and with
it comes a substantial local fax base. I'm not saying that money is
everything, but huge counties have had a traditional advantage over
smaller ones in the past. As a result, they have had an easier time
funding essential county services, such as school improvements.
Technology quite simply levels the playing field for average-sized
counties across America.
When someone togs on to the internet, it doesn't matter if
they're sitting in Raleigh or Hanging Dog, their access to
information is the same, and their ability to profit from the
proliferation of information is the same, The tech industry needs a
shot in the arm so that it can continue aiding America's counties in
o significant way. Fore this reason, I'd like to request that Judge
Keller Kotelly approves the settlement that Microsoft and the
federal government have reached. It will benefit Lincoln County, and
counties like ours across America,
Regards,
Beth Saine
MTC-00029659
North Carolina Federation of College Republicans
BOX 16160
SULLIVAN HALL
NCSU
Raleigh, NC 27607
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601D Street, N-W Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
As one of the younger members of the North Carolina Republican
Party's Central Committee, I have a strong interest in how
government interacts with technology so the economy is strengthened
in the future. As Chairman of the North Carolina Federation of
College Republicans, I want to formally ask that Judge Kollar
Kotelly approve the landmark settlement between the federal
government and Microsoft. Here's why:
I do not believe that Microsoft has done any harm to even one
single consumer. And without consumer harm, what reason exists to
bring an antitrust case? None. Face this fact: the future is in high
tech jobs. Also, every industry is going high tech. Imagine the
damage done by the federal government suing the technology
industry's leading company. It discourages young people from being
innovative. It discourages them from becoming entrepreneurs. Our
Republic will only survive is maintain a strong free market system.
And our market system can only thrive if companies continue to be
innovative. I hope the settlement is finalized soon, so that
American business can operate at its full capacity again soon.
Thank you for your consideration of my comments.
Sincerely,
Matthew Adams
State Chairman
MTC-00029660
Wake Forest Town Commission
January 11,2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
As a member of the Wake Forest Board of Commissioners, I am all
too aware of the high cost of government despite the fad that our
citizens and businesses endure terrible economic conditions in our
state. Out town needs revenue from increased business activity, not
higher property taxes. It seems to me that all our local industries
will be enhanced when the settlement of the Microsoft lawsuit is
completed.
As you can tell, I am adamantly opposed to higher taxes in
whatever form and work hard to ensure that tax money is spent
wisely. But, the fact is, in our growing community, we have services
that need to be paid for by government. The best way for our town to
generate additional revenue is to increase business activity in Wake
Forest. That is why I was happy to see that the federal government's
case against Microsoft had come to a settlement agreement in the
court of Judge Kollar-Kotelly, I know that this case has cost the
taxpayers of this nation $30 million, not to mention lesser sums in
the t 8 states that also brought the original lawsuits. More
significantly, it has hurt business, and local revenues, in our town
and towns across America.
I am pleased that North Carolina is one state that decided to
agree with the settlement and now no more state tax money will be
expended. I hope to see the same thing happen in the federal case as
well. That is why t am strongly urging the judge to agree to the
settlement in this case.
Sincerely,
Chris Malone
Town Commissioner
401 Owen Avenue--Woke Forest, NC 27587
MTC-00029661
January 25, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200 Washington, DC 20530 Fax:
202-616-9937
Dear Ms. Hesse:
Microsoft's products are the greatest in the technology
industry, and that is the major reason that they are regarded as a
leader m the American economy. Given that fact, it is no wonder that
when the federal court announced that Microsoft would be broken up,
the stock market came to a screeching halt, and tumbled down from
record highs.
I am very encouraged that Microsoft and the federal government
have agreed to a settlement in the antitrust case. I believe that
this is good for the economy, the government and other societal
institutions, which increasing rely on industry to invent new
products to make their operations more effective.
The settlement provides for more oversight into Microsoft's
operations, and a more competitive playing field for all companies
in the industry. That's welcome news for everyone who demands
consumer choice. It will also send the right signal to investors
that the government is prepared to work in a cooperative effort to
spur economic growth and job creation.
I request that Judge Kollar Kotelly will approve the settlement,
so that the Justice Department can conserve resources for more
pressing legal matters. Additionally, closure in this matter would
send a message that government is prepared to work with the American
business in taking constructive steps toward a brighter future for
all Americans.
Thank you,
Trustee
Rowan-Cabarrus Community College
MTC-00029662
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Fax: 202-616-9937
Dear Ms. Hesse:
[[Page 28703]]
As a young business executive, I am relieved that the federal
government and Microsoft, which have been engaged in a protracted
antitrust lawsuit, have arrived at a settlement arrangement that is
amicable to both sides. Settling this case as soon as possible is
important to the technology industry, as well as many other
important segments of the economy.
In the business world, companies look at industry leaders for
innovation, and they often try to emulate the corporate
giants" successful business strategies. This partially
explains why the tach sector of the economy has been in a tailspin
for an extended period of time. When the antitrust suit is finally
ended once and for all, a dark cloud will be lifted from the entire
industry. The American economy, and to some extent, the world
economy has never been more interconnected. Each change within one
economical sector creates a ripple throughout the rest of the
economy. A major shift in one sector results in a sea change across
the board of leading economic indicators.
I work in the mortgage banking industry, a business that is
highly sensitive to the state of the national economy. While ending
the Microsoft litigation will not alone create record revenues for
our industry, I feel certain that it would boost consumer
confidence, and encourage investments in many types of business
enterprises.
Finally, I am excited about the future of technological
innovation in the workplace. Microsoft has led the way in this
regard, and finalizing the settlement will help the company refocus
on developing new and exciting products. That means a more
productive workplace in the future.
I request that Judge Kollar Kotelly approves the settlement.
Sincerely,
Stewart
MTC-00029663
January 24, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Fax: 202-616-9937
Dear Ms. Hesse:
As a long-term care specialist, I am concerned that the tumble
that the sock market has suffered is draining the finances of our
nation's elderly. We've got to get the nation's economy back on
track. The government needs to focus on ways to spur economic growth
like never before. In less than ten short years, the baby boom
generation will begin to reach retirement age. A record number of
seniors will inundate our nation's hospitals, nursing homes and
assisted living facilities. These people will need savings not for
luxury items, but to cover living expenses associated with aging.
Our nation's greatest generation, for the most part, worked at
one company for their entire working career. Their pensions are
largely vested in stocks. When the stock market is unstable, their
financial situation, and living conditions, become unstable as well.
The baby boom generation are less likely to have worked in one
company, and are less likely to have saved for a retirement. They
are, however, more likely to have invested a substantial portion, or
all, of their savings in the stock market. IT IS IMPERATIVE THAT WE
STRENGTHEN THE ECONOMY IN ORDER TO BOLSTER THESE SAVINGS.
I request that Judge Kollar Kotelly approves the
settlementbetween Microsoft and the federal government. This lawsuit
has been proven to have caused much of the turmoil within the
economy in general, and the stock market in particular. Our nation's
retirees need security, and deserve governmental cooperation.
Sincerely,
Douglas McCabe Russell
MTC-00029664
GEORGE W. LITTLE & ASSOCIATES, INC.
INSURANCE CONSULTANTS--BROKERS
January 22, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Fax: 202-616-9937
Dear Ms, Hesse:
I have been involved in business, industry and economic
development for over thirty years. Over that period of time, I have
come to understand that a quality education system, a solid public
infrastructure and a strong flee market system are the keys to
economic development in North Carolina and across America.
Virtually every societal institution which is vital to economic
development has benefited from the proliferation of technological
advances in the past decade. Leading the way in innovative
technology is Microsoft. Their products have benefited businesses by
saving countless hours of time and making communications between
businesses seamless. Microsoft's benefits to the education system
are tremendous, Research, class instruction and other benefits have
been realized through application of these useful tools.
Governmental institutions also rely on Microsoft to maximize their
efficiency and serve, the public in a responsive manner.
For these reasons, I am gratified that federal government and
the Microsoft have agreed to a settlement in their antitrust case,
Microsoft will be able to focus its energies once again on research
and development, while the government is granted unprecedented
oversight into Microsoft's operations. Under this settlement,
economic development wins, and so do the American people.
I hope time Judge Kollar Kotelly will approve the settlement.
Sincerely,
MTC-00029665
January 23, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Fax: 202-616-9937
Dear Ms. Hesse:
I write to express my desire that the government will act in a
cooperative manner with Microsoft and similar business interests in
developing a mutually beneficial relationship. I am convinced that
now is the time to end the federal government's litigation against
Microsoft. Microsoft and the federal government have agreed to
settle the suit. The public is yearning for an economic recovery.
Congress is debating an economic stimulus package. With these facts
in mind, I am quite confident that we should move beyond the
Microsoft case and work to get our stagnant economy moving again.
As an attorney, I realize that antitrust law is an important
component of maintaining a competitive marketplace. However, company
innovation and product improvements are as well, and since both
parties have agreed to settle the lawsuit, I believe that it would
be advantageous for everyone if Microsoft can get back to doing what
it does best: researching and developing useful technological tools
for the American workplace and the American home.
The settlement guarantees that other companies will have market
access. Every new Microsoft operating system will have to include a
mechanism that enables end users to remove or re-enable Microsoft s
middleware products. While end users can already remove Microsoft
middleware from Windows XP, this settlement would make it even
easier for users to change middleware products.
I hope that Judge Kollar Kotelly approves the settlement.
Regards,
Phillip J. Strach
Attorney
MTC-00029666
Professor Eric Brodin
P.O. Box 209
Bules Creek, NC 27506
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
During my career as a columnist and professor. I have written
over 3,000 articles for various publications such as the Dana Daily
Record, the Coastal Piedmont leader and other Journals, newspapers
and magazines in twenty countries. I feel compelled to write to you
on a hot contemporary issue: the pending settlement of the federal
government's antitrust case against Microsoft.
I live in a university community. In the past ten years. I have
seen a technological explosion on campus that has revolutionized
learning processes and intellectual research. I have found the
technological advancements of the newspaper to be beneficial in my
work as a columnist. The technological advancements to which I refer
are in no small measure due to the entrepreneurial success of Bill
Gates and Microsoft. After all, Microsoft has developed products
that have aided the process of word processing immeassurably,
[[Page 28704]]
as well as improved columnists" ability to transmit data.
I served as the Endowed Chair of the Landry-Fetterman School of
Business at Campbell University from 1980 until 1983. During my
tenure, I did my utmost to promote the notion that our societal
liberty is largely dependent upon the foundation of the free
enterpriss system. I fully realize that antitrust laws are needed in
order to foster a competitive marketplace, however if a
corporation's business practices do not result in harm to the
conssumer, the government should not interfere. I have seen no
evidence that Microsoft's business practices have harmed consumers
in any way. On the contrary, I believe that Microsoft has benefited
the American consumers greatly.
I urge Judge Kollar-Kotelly to approve the proposed settlement
of the lawsuit. It's time to allow the free market system to
determine the corporate winners and losers in our great land.
Sincerely,
Professor Eric Brodin
MTC-00029667
Steve Tyndall
PO Box 33358 Raleigh, NC 27636
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Fax: 202-616-9937
Dear Ms. Hesse:
The business of America is business, according to President
Woodrow Wilson. That statement has held true for the entire duration
of our nation's young life Whenever business is good, we say that
"times are good" in America. When business is off, we
say that we're going through a "tough time". ! regret to
say that I believe that tough times are currently upon us and our
economy needs for business to get back on track. In some areas, the
government can play an active role in restoring consumer confidence,
and strengthening investor resolve.
The stock market is in limbo. Investors are in a period of
uncertainty that began when the federal government announced that
Microsoft would be dissolved into a series of small companies. The
tech sector of the economy, which had been largely separated from
government, and looked to Microsoft for leadership, became a very
unstable place for investors and employees to be that day. We need
to recapture the magic of the 1990s economy by putting the Microsoft
lawsuit behind us once and for all.
The federal government and Microsoft are in agreement on the
terms of the settlement. All that remains is for Judge Kollar
Kotelly to approve the settlement. I hope and pray the settlement
will be approved. A renewed spirit of entrepreneurial innovation
will be started on that momentous occasion.
I am honored to live in the Unites States of America, a country
in which we have a fair and impartial judicial system. The trial has
run its course. The verdict is in. Both parties want to settle, in
order to save the American people and the American economy
irreparable harm. It's time to move forward.
I request that Judge Kollar Kotelly will approve the settlement.
Senior Tactical Management Specialist Planner John Deere Corporation
MTC-00029668
Scott Lampe
Former Treasurer, N.C. Republican Party
3707 Waterton Leas Court
Charlotte, NC 28269
January 21, 2002
Dent Ms. Hesse:
I believe that the United States of America has the highest
standard of living of any country in the world. I am certain that
our prosperity is a direct result of the free enterprise system that
enables our economy to flourish. I enjoy following current events,
end participating in the political process when I believe that my
participation is needed.
The federal government's lawsuit against Microsoft is a prime
example of an issue that has stirred my passions and evoked my
interest in the public good, From the outset of the lawsuit, I have
worried about the suit's impact on the American economy as a whole.
I noticed that the entire stock market began its slide at the point
which the federal government annoyed Microsoft's breakup.
Microsoft's, innovation has been beneficial for industrial and
educational institution across America. I strongly believe that the
government ought to be as supportive as possible of all companies
that are vital to American enterprise and American jobs. It's
important to families that their tax dollars be used to strengthen,
not weaken, the economy. That's why I believe that the proposed
settlement between Microsoft and the federal government is a
positive development for America. The settlement provides for like
access and monitoring of Microsoft. In essence, everybody wins...
business, industry, the government, and most importantly, the
American people.
I hope that Judge Kollar Kotelly will approve the settlement.
Thank you,
Scott Lampe
MTC-00029669
January 18, 2002.
Ms. Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Dear Ms. Hesse:
I am encouraging you to accept the Microsoft settlement. It is
fair! For three years, I've been reading about the litigation,
lobbyists, lawyer's fees and millions of dollars in taxpayers monies
spent.
It's time to have less regulation in technology and to have more
competition in the market. As a consumer, I want affordable, high
quality products that Microsoft creates. This settlement will allow
the company to again focus on leading in technology rather than
fighting for survival in the face of litigation.
Thank you for considering my input as you deliberate this
decision.
Liberty Carty
620 S Highland Dr
Andover, KS 67002
Journalism major, Butler County Community College Member, Kansas
Republican State Committee President, Buffer County Republican
Assembly
MTC-00029670
Gerald R. Slifka
2028 Winston Place
Waterloo IA 50701
January 27, 2002
Renata Hesse Trial Attorney
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Attorney Hesse:
I am writing to urge the court to accept the settlement proposal
of the Microsoft anti-trust case. As a consumer I have witnessed the
value of our constantly advancing technology on a daily basis. Like
most Americans I am at the same time thrilled and overwhelmed by the
new products that are available. These have gone along way toward
helping work and live more efficiently. I work in the printing
industry and can tell you first hand that technology has had a
significant impact on how this industry operates. The quality of our
work improved to a great extent while the product turnaround time
has been significantly reduced
We are living in a time of financial uncertainty in this
country. We must do whatever we can to regain stability in the stock
markets and the job market. Ending the government's case against one
of our leading companies will help lead our county to continued
prosperity.
Please accept the settlement before you.
Sincerely,
Gerald R. Slifka
MTC-00029671
January 16, 2002 Ms.
Renata Hesse, Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
I appreciate that my ideas as a livestock business owner can be
shared regarding the Microsoft antitrust ease.
It is important that the Federal Courts recognize the benefits
of competition in business and technology. The Anti-trust laws were
written over 100 years ago to protect consumers. In this day and
age, it seems, some of Microsoft's competitors want to use them as a
safe-guard from competition. A better use of the government's legal
power would be an examination of the vertical integration of
agricultural conglomerates.
I personally agree with settlement and hope that you will accept
it to bring closure to this litigation that is costing us so much in
time and tax dollars.
Sincerely,
Vernon Suhn, Owner
Suhn Cattle Company
RR2, Box 67
Eureka, Kansas 670445-9428
(620) .583-5923
MTC-00029672
January 22, 2002
[[Page 28705]]
Judge Kolar Kottely
U.S. Department of Justice,
Antitrust Division
601 D Street, N. W., Suite 1200
Washington, DC 20530
Dear judge Kottely:
As an educator, with 37 years of experience, I have followed the
Microsoft antitrust suit with much interest and would like to
express a major concern regarding the timely disposition of this
matter.
I believe the principle parties of this suit have come to a fair
settlement for all concerned. However, the nine remaining attorneys
general and the District of Columbia need to put aside their
individual grievances and settle in the interest of consumers as
well as the technology industry which so greatly affects the growth
of our economy. It disappoints me that the Attorney General of
Kansas is one of the parties who have resisted settlement.
I am encouraged that this settlement has the prospects of more
healthy competition in the software industry as well as the
increasing the availability of a variety of software to consumers. I
sincerely hope you will actively work toward approving the
settlement of this case as soon as possible.
Sincerely,
Kent Austin, Speech Pathologist/Audiologist
2520 Coronado Ct.
Emporia, Kansas 66801
MTC-00029673
Patricia Piester
12122 willow Lane, #1124
Overland Park, KS 66213
January 21, 2002
Judge Kolar Kottely
U.S. Department of Justice, Antitrust Division
Attention: Renata Hesse
601 D Street, NW, Suite 1200
Washington, DC 20530
Dear Judge Kottely,
The Federal government has been pursuing its case against
Microsoft for 3 years and has spent $30 million of the hard-earned
taxpayer's dollars in an effort to protect the consumer against
Microsoft's perceived unfair business practices. The result has been
confusion and no clear answers.
The Court of Appeals effectively put an end to this case by
throwing out a break-up plan instituted by a lower court. This move
was clearly in the right direction. We should follow their lead by
putting an end to this case. Nothing good will come from dragging it
out any longer at an even greater cost to taxpayers and consumers.
Instead, we must see action now in order to spur the American
economic recovery we need, especially for our ailing technology
industry.
Please support the proposed settlement in this case.
Thank you for considering my opinion on this case.
Sincerely,
Patricia Piester
MTC-00029674
January 25, 2001
Renate Hesse
Antitrust Division,
Department of Justice
Fax (202) 616-9937
To Whom It May Concern:
I am writing to express my support for the Department of Justice
settlement in your case against Microsoft. I understand that you are
close to a settlement and have asked for public input about this
issue.
Our tax dollars are spread thin as well our governmental
resources. Enough time and money has been spent on this case to come
up with the current settlement. The settlement is impartial and the
punishment fits the wrong.
My concern at this time is "who" will actually
benefit from continuing this case against Microsoft, I believe it
will be Microsoft's competitors and not consumers. The current
settlement creates a stronger technology industry and consumers will
be the overall winners. The case against Microsoft stands as an
obstruction to progress. We are going through a war and economic
recession. Refusing to settle and extending the campaign against
Microsoft is technically out-of-date and just another reason for the
country slow down. It is time to get back to work.
Thank you for your time and your efforts to settle US v.
Microsoft as soon as possible.
Sincerely,
Jaye Stretesky
P.O. Box 2553
South Lake Tahoe, CA 96158
MTC-00029675
Renata Hesse
Trial Attorney; Antitrust
U.S. Department of Justice
601 "D" Street NW
Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
It has come to my attention that the Department of Justice has
brokered a settlement with Microsoft that could end the government's
anti-trust case against this company. I am very supportive of this.
I live in Kansas where our own Attorney General Carla Stovall
has been. a leading advocate for the breaking up of Microsoft and
has refused to join. the settlement of this case. I am very
disappointed that the Attorney General who was elected to protect my
interests continues to pursue this case.
The basis for this suit has always been a mystery to me.
Microsoft creates great products that people want to purchase.
Because the company is in tune with American consumers and is very
innovated they have grown tremendously. This growth has benefited us
through lower prices, a growing technology industry and a previously
skyrocketing NASDAQ. If Attorney Generals like my own were really
interested in protecting the public good they would join this
settlement. Besides, it appears to me that those who sought to
punish Microsoft are getting much of what they want in this
agreement.
I urge you to accept this settlement.
Sincerely,
MTC-00029676
To: c/o Renata Hesse, Trial Attorney
Date: Sun Jan 27 21:39:18 CST 2002
Pages (including cover): 4
From: Rick Voland
Comments: Please oppose the proposed settlement in United States v.
Microsoft Corporation.
2120 University Ave., Apt. 210
Madison, WI 53705-2343
January 27, 2002
Renata Hesse, Trial Attorney
Suite 1200, Antitrust Division
Department of Justice
602 D Street NW
Washington, DC 20530
fax (202) 616-9937
Dear Renata Hesse,
Thank you for this opportunity to comment on the United States
v. Microsoft Corporation; Revised Proposed Final Judgement and
Competitive Impact Statement. I write as an advanced user. I am not
a programmer, but I rely on computers for my work and am very much
concerned about preserving diversity, choice, and quality in
computer software.
I am concerned about the power of Microsoft to coerce its
competition. Microsoft paid money to both Corel and Apple when each
company was desperate and Microsoft could control the terms. I am
also concerned that Microsoft forces computer manufacturers to
bundle Microsoft applications with the result that computer buyers
now assume that Microsoft applications are part of Windows and are
included at no cost. The settlement proposed by the Department of
Justice would not cover either of these situations even thougt1
riley are clear examples of the power of Microsoft to coerce its
competitors into less competitive postures.
In Apple Computer's 10K annual report for the fiscal year ended
Sepbember 30, 2000 is the statement of an agreement between Apple
Computer and Microsoft. "Microsoft purchased 150,000 shares of
Apple...preferred stock...for $150 million [p. 52]. Apple in turn
agreed to limit computer production, and thus competed less against
Microsoft.
In August 1997, the Company and Microsoft Corporation entered
into patent cross licensing and technology agreements. In addition,
for a period of five years from August 1997, and subject to certain
limitations related to the number of Macintosh computers sold by the
Company, Microsoft will make future versions of its Microsoft Office
and Internet Explorer products for the Mac OS. Although Microsoft
has announced its intention to do so, these agreements do not
require Microsoft to produce future versions of its products that
are optimized to run on Mac OS X. The Company will bundle the
Internet Explorer product with Mac OS system software releases and
make that product the default Internet browser for such Mac OS
releases. [p. 24, "SUPPORT FROM THIRDPARTY SOFTWARE
DEVELOPERS," emphasis added] The same document discusses Apple
Computer's continued dependence on CPU chips from Motorola
[INVENTORY AND SUPPLY, pp. 22-23]. Apple Computer's new
operating system, now known as Mac OS X, derives from Nextstep and
Openstep purchased with NEXT, Inc. Both Nextstep and Openstep run
well on CPU chips by Intel
[[Page 28706]]
or Motorola. I am writing this letter on an Intel PC minting
Openstep 4.2. Even the bridging version between Openstep and Mac OS
X (a developer-only release known as Rhapsody) ran on both Intel and
Motorola CPU chips.
This cross-platform technology would have left Apple Computer
far more flexible and competitive as Motorola continues to have
manufacturing problems that leave Apple Computer with more marketing
problems (the megahertz gap) and a more hazy future. Motorola chips
currently cannot achieve the same clock speeds (megahertz) as CPU
chips from Intel, AMD, etc. Consumers often choose computers on the
basis of clock speeds, so they tend to discount Apple computers even
though the Motorola chips accomplish more work than Intel chips for
the same clock speed (the megahertz myth). Apple Computer has been
aware of this situation for several years.
The statement that Apple Computer agreed to limit its production
is not about Apple limiting its production of the Apple computers
using Motorola chips. Apple agreed at that time to stop development
of Mac OS X for Intel which would have been a far more serious
competitor to Microsoft. A consumer could buy an inexpensive PC and
replace the Windows operating system with Mac OS X for Intel. Mac OS
X is derived from Unix and is known for great stability. Also, Mac
OS X has special software development tools that would attract
developers because individuals could complete aggressively with far
larger software colt)orations. Mac OS X for Intel would have allowed
Apple Computer to move from selling hardware (Macintosh Computers)
and proceed to selling software only (Mac OS X) in the same way as
NEXT, Inc. moved from selling hardware and software to selling
software only. The investment by Microsoft in Apple was incidental.
Apple Computer's real concern was that Microsoft threatened to cease
development of Microsoft Office for Macintosh, leaving Apple
Computer without a strong word processor and office suite. In
return, Apple Computer agreed to make Microsoft Internet Explorer
the default web browser, instead of Netscape. Macintosh computers
don't use Windows, but they largely still depend on Microsoft
Office, and Microsoft maintains a hold. Microsoft played one rival
(Apple Computer) against Netscape, another rival.
In press release dated October 2, 2000, Corel, Inc. announced
that Microsoft agrees to buy 24 million shares of Corel preferred
stock at US $135 million. Corel now owns and develops WordPerfect, a
competitor to Microsoft Word. WordPerfect was once a dominant word
processor, but is now far in the minority. The DoJ Microsoft trial
included evidence that Microsoft shipped flawed versions of the
Windows 95 operating system to WordPerfect developers in order to
leave WordPerfect a flawed product that could not easily compete
with Microsoft Word. Also, Microsoft cultivates bundling agreements
where PC manufacturers include Microsoft Word and other components
of Microsoft Office with Windows computers so that consumers do not
even think of purchasing WordPerfect. Then, when they upgrade their
software, they continue to purchase Microsoft Word and do not
consider WordPerfect. This agreement with Corel, has Microsoft
offering .NET, a sort of networking server technology, to Corel. It
is interesting that Corel now offers all its graphics products in
versions optimized for the new Mac OS X, and advertises its
cooperation with Apple. At the same time, it has ceased development
of WordPerfect for Macintosh. WordPerfect for Linux exists and could
be easily ported to the new Unix-based Mac OS X. This agreement
between Microsoft and Corel looks like an agreement to dissuade
Corel from continuing to compete agressively with Microsoft Word.
Isn't perception an important part of this case?
Microsoft bundles many small applications with Windows that
leave fewer opportunities for third-party competitors. Windows now
includes image editing software that took away opportunties from
Kodak. Kodak negotiated some new opportunties. Kodak now offers
little support for Macintosh computers. The larger number of Windows
computers is not a true measure of the market here. A large
proportion of the images on the Internet were created with Macintosh
computers. The graphics and desktop publishing industries still rely
heavily on Macintosh computers, yet Kodak digital cameras offer far
less support for Macintosh computers than for Windows computers.
Microsoft is now offering very inexpensive versions of its
software to schools at prices far below even academic prices. Here
at the University of Wisconsin-Madison, Microsoft Office is
available at $25-30 for a fully functional suite, and
Microsoft Windows 2000 at a similar price. In return, Microsoft
often pressures schools to replace their server software with
Microsoft products. These prices are attractive because they offer a
product students want at an attractive price, but they leave server
operators subject to pressures unrelated to product quality. Also,
end users may find themselves with fewer opportunties because
Microsoft server products do not interoperate well with non-
Microsoft products. Microsoft has a history of adopting Internet
standards and then releasing an "enhanced" version that
only works with Windows computers. By the way, the DoJ uses an
opensource product (OpenBSD) downloaded from Canada
(www.openbsd.org) for its most sensitive communications that require
the ultimate in security.
The proposed agreement (final judgement) between the US
Department of Justice and Microsoft does not provide protections for
Apple Computer or for developers of Linux and other opensource
software (e.g., FreeBSD) that would compete with Microsoft products.
Linux, FreeBSD, and Hewlett-Packard servers would face unfair
competition as I describe in the previous paragraph. The DoJ
proposal does not address these concerns. Please separate the
Microsoft operating system and application (e.g., Word) divisions.
Titus, I favor a breakup of Microsoft into at least two parts.
Thank you for your time and consideration.
Sincerely,
Rick Voland
MTC-00029677
MINDI COOK
4824 SW 98h Ter
Augusta KS 67010
January 21, 2002
Renata Hesse, Esq.
U.S. Department of Justice
Anti-trust Division
601 "D" Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
I was truly glad to learn that the court was conducting a
comment period during which I might write to express my views
regarding the lawsuit currently being waged against Microsoft. I
have been opposed to this lawsuit for quite some time for many
reasons, including its high cost to American taxpayers, its apparent
negative effect on the technological industry and general economy,
and its attempts to over-monitor the business activities of an
American company. If I could see that Microsoft was, in any way.
threatening our free marketplace and driving up consumer costs, I
might feel differently about the matter. But I see no indication
that Microsoft has hurt the tech industry in any way. It makes me
wonder who and what is really driving the campaign against Microsoft
and I resent having to pay for a lawsuit that most likely serves the
interests of Microsoft's competitors--not the American public.
We, the American people, need to have the court decide this
matter in a manner that truly serves our needs -not the needs of a
big business. In light of that fact, I ask the court to please
accept the settlement proposed by President Bush's team and end this
lawsuit as soon as possible.
Sincerely,
Mindi Cook
MTC-00029678
??
2825 Ya??cy St. SW
Seattle, WA 98126
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
I am writing you today to express my opinion in regards to the
US vs. Microsoft settlement. I support Microsoft in this dispute and
I believe this litigation is costly and will have adverse effects on
consumers. I support the settlement that was reached in November and
would like to see a permanent resolution to this dispute.
The settlement that was reached is reasonable and far more than
sufficient to deal with the issues of this lawsuit Under this
agreement, Microsoft must grant the same rights to all of the twenty
major computer makers who want to install Windows on their machines,
no matter how the companies configure the platform.
I think this witch hunt to try and make Microsoft the villain is
going to have a detrimental effect on the business climate for now
and the future. Please pick another battle .... like national
security.
We are facing a lagging economy presently. We must do all we can
to boost and stimulate our economy, Stifling Microsoft will not
[[Page 28707]]
accomplish this. Letting them go back to Washington State to develop
more software will. Please support this settlement and allow
Microsoft to get back to business.
MTC-00029679
Renata B. Hesse, Trial Attorney
Suite 1200,
Antitrust Division
U.S. Department of Justice
601 D Street NW
Washington, DC 20530-0001
Via Fax @ 202-307-1545
The undersigned is opposed to the proposed settlement in the
Microsoft antitrust trial because the settlement does not fully
redress the actions committed by Microsoft, nor substantially
inhibit their ability to commit similar actions in the future, or
most importantly, attempt to restore competition to this important
market.
Furthermore, there are concerns regarding the fact that none of
the provisions within the settlement effectively address Microsoft's
abuse of its monopoly position in the operating system market. Even
non-educated, non-technical citizens can recognize the absurdity and
inequity of the requirement that consumers pay for a Microsoft OS on
a new PC--whether it is wanted or not--and yet this most
basic issue has never been addressed.
Perhaps most appalling is that the proposed settlement does
nothing to address Microsoft's previous misdeeds. Software piracy or
violations of the DMCA result in million of dollars in fines and
potential incarceration, yet no penalties are stipulated in this
settlement? it is equally disheartening that there are no provisions
to address future abuses instead the settlement, from a technical
perspective, appears to bolster Microsoft's expanding control of the
Internet and other related areas, Letting the US government publicly
reward criminal behavior simply makes a mockery of the law.
Microsoft's monopolistic practices cause the public to bear
increased costs and deny them products and innovation that would
otherwise be created because of competition. Consequently it is
incomprehensible that obvious cost free measures, such as a
requirement for the inclusion of Linux and dual-booting on all OEM
PC's, is not even considered.
The finding that Microsoft was (and is) an abusive monopoly must
be followed by specific, well-defined measures to address past
practices and compensate those harmed by the abuses, In addition,
substantial penalties and measurable sanctions are required to
prevent future monopolistic abuses. Based on past history, it is
even more crucial that strong constraints be placed on Microsoft to
mitigate their proven propensity for illegal and unethical
activities. The proposed settlement is clearly inadequate to serve
its function and calls into question the United State's Judicial
System's ability to appropriately perform its purpose. As such, it
is respectfully requested that the entire matter be reconsidered in
a public courtroom.
MTC-00029680
Elsie Zeurcher
1556 SW Santa Fe Lake Road
Towanda, KS 67144
January 24, 2002
Ms. Renata Hesse
Anti-trust Division
Department of Justice
601 "D" Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
I understand that the Department of Justice is currently
conducting a comment period during which members of the American
public may express their opinions regarding the Microsoft anti-trust
settlement proposed by the Bush administration. I am grateful to
have this opportunity to voice my thoughts and would like to thank
you in advance for your consideration of my views on this matter.
I firmly believe that the court should approve the settlement
which I understand Microsoft has already agreed to accept. At this
time in our nation, saving resources for homeland defense and taking
steps to strengthen our economy should be at the top of the
government's priority list. If the court agrees to the Microsoft
settlement, thus ending this expensive and troublesome lawsuit, it
will be appropriately addressing both of those pressing needs by:
(1) freeing up resources for defense and (2) allowing one of our
nation's most productive companies, Microsoft, to continue to
generate health activity in the marketplace.
Please consider carefully the realities that face the United
States today and approve the Microsoft anti-trust settlement. Thank
you again for your consideration.
Best regards,
Elsie Zeurcher
MTC-00029681
Jim Morrill
2220 Casement Road
Manhattan, KS 66502-6628
January 21, 2002
Renata Hesse, Esq.
Trial Attorney, Anti-trust Division
Department of Justice
601 "D" Street NW, Ste. 1200
Washington, DC 20530
Dear Ms. Hesse:
I would like to thank the court for inviting the views and
opinions of individual United States citizens regarding the
Microsoft anti-trust lawsuit and proposed settlement, it seems only
right that those of us on the front lines, paying taxes and
supporting the economy, should have a voice in this matter.
Free trade is a cornerstone of American capitalism and I believe
that the court has been attempting to protect our free trade through
its pursuit of Microsoft. However, in spite of all good intentions,
the court's efforts appear to have damaged free trade and enterprise
instead of protecting it. As a result of the court's actions,
Microsoft, one of our nation's most productive business giants, has
been forced to pour untold resources into defendin9 itself against
an ever-changing, never-ending lawsuit that has yet to establish
that the company has harmed the marketplace in any way. In fact, as
a result of Microsoft's commitment to improving technology, average
American consumers now have access to affordable computer products
that were out of reach to them only a decade ago. In the interest of
free trade, the court should allow such a company to continue to
generate products and business without undue interference.
Additionally, as the court makes its decision regarding the
Microsoft settlement. I ask that it consider the amount of taxpayer
money it will save by ending this expensive litigation. Too man.,,,
hard-earned dollars have already been thrown at this dubious case.
Acceptance of the proposed settlement will stop the bleeding and
save American citizens further needless cost. I ask the court to
make the decision that will truly protect free trade and best
benefit the American public. Accept the settlement and end the
Microsoft anti-trust case quickly.
Respectfully,
Jim Morrill
MTC-00029682
Logan Overman
632 Tara Court ?? Wichita ?? KS ?? 67206
Renata Hesse
Trial Attorney
US Department of Justice
601 D Street, N-W Suite 1200
Washington, DC 20530
Dear Attorney Hesse:
As an avid consumer of new technology products I am writing to
express to you my support for the settlement of the Microsoft anti-
trust lawsuit. There are many arguments why the case against
Microsoft was an ill-founded decision. However, I feel the economic
reasons are the most compelling.
The whole premise of the government's case has been that
Microsoft was responsible for significant consumer harm. It is quite
apparent this is not the case. Microsoft is the leading choice among
consumers because they find its products to be of superior quality.
Yet the government has spent millions of dollars prosecuting a case
that the public does not support. The cost to the taxpayer has been
staggering
The damage this case has caused to our nation's financial well-
being goes beyond the wasting of public funds. This case and the
government's threat of break-up have served as a deterrent to
investment in the computer and communications industry. There are
many contributing factors to the major decline of the NASDAQ,
however, the threat of serious government intervention in our
nation's fastest growing industry only added to the problem.
In an effort to end this case, DOJ and Microsoft negotiators
have found enough common ground to reach a settlement. Based on my
knowledge of the agreement this settlement is a solid one. Microsoft
will be held responsible for portions of the complaint upheld in
court and an independent commission will monitor its compliance with
the provisions of the settlement.
The settlement of this case is a good indication that companies
like Microsoft will be free to compete and grow in our open market.
Both our economy and consumers will benefit.
Sincerely,
Logan Overman
[[Page 28708]]
MTC-00029683
Kristen Boulware
Renata Hesse, Antitrust Division
Public Comment
U.S. Department of Justice
601 D Street, NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
Finally, Microsoft and the U.S. DOJ have agreed upon a
settlement of the marathon-style anti-trust suit against the
company. I think that having nine states sign on to the deal proves
its value.
From what I have read and heard about the proposed settlement
that is pending your approval, it goes a long way toward what the
DOJ wanted to accomplish, but does not completely tie Microsoft's
hands in a way that they cannot compete. To me this makes great
sense as a worthy compromise.
I am hopeful the judge will approve this settlement and allow
all the case's participants to go back to doing business as they
should.
Thank you.
Kristen Boulware
11780 West 118th Terrace
Overland Park, KS 66210
MTC-00029684
Ms. Renata Hesse
U.S. Department of Justice, Anti-trust
601 D Street Northwest, Suite 1200
Washington, DC 20530
Ms. Hesse:
I am writing to express my support for the Microsoft antitrust
settlement propsed by President Bush and his administration.
While I appreciate the Department of Justice's concerns
regarding the effects Microsoft creates in our marketplace, I
believe the facts all point to this conclusion: Microsoft is not a
threat to free trade. I believe the real threat in this matter lies
in the exorbitant cost of continuing to pursue Microsoft in court.
I ask the court to please approve the proposed Microsoft
settlement and put an end to this lawsuit.
404 Traders Ave
Fall River, KS 67047
MTC-00029685
Scalio, Inc.
Tel: (425)889-8553
Fax: (425)889-9303
6119 114th AVE NE
Kirkland, WA 98033
FAX COVER SHEET
Date:----/----/----Pages, including
cover page:--------
To:
Name:
Office Number:
Phone Number:
Fax Number:
From:
Name:
Office Number:
Phone Number:
Fax Number:
Note:
Ramon G. Pantin
From: "Ramon G. Pantin"
To:
Cc:
Sent: Sunday, January 27, 2002 11:59 PM
Attach: commenls-040.html
Subject: Microsoft Settlement
Dear Department of Justice representative,
Attached is an HTML document with my comments about the
settlement proposed. I have included my background and contact
information in that document.
Please feel free to contact me at:
rgp @ scalio.com
or at home at:
425-889-1043
if you have trouble with the attached documents.
Sincerily,
Ramon G. Pantin
Introduction
My name is Ramon G. Pantin, I have been in involved in
commercial Operating System development since 1989. I have worked on
the design and implementation of a large variety of Operating
Systems and system software (operating system components) including
chronologically:
. IBM's AIX 3. I, AIX 3.2, AIX 4.1 and AIX 5.x UNIX operating
systems for their RS/6000 product line (recently renamed eServer
pSeries) as a consultant.
. Tandem's NonStop UX UNIX operating system for fault tolerant
systems (as an employee of Tandem Computers).
. IBM's now defunct WorkPlace OS desktop operating system
(successor to their OS/2 product) ) (as a consultant and later as an
employee).
. Microsoft's Windows NT4.0 and Windows 2000 (employed by
Microsoft).
. ICCOS (a now defunct operating system) (employed at TagoSoft,
Inc.)
. FreeBSD UNIX operating system (at TagoSoft, Inc and consulting
for Shawn Systems, Inc).
. SUN's Network Filesystem V3 for Windows NT (as a consultant)
. SUN's PC/SKIP product for Windows NT (as a consultan0
. Impactdata/Megadrive/Data Direct Networks CDNA shared storage
SAN file system (as a consultant and later as an employee)
. At Scalio, Inc developping storage management software for
both Windows 2000 and UNIX systems.
. IBM's AIX 5.x UNIX operating systems for their RS/6000 product
line (recently renamed eServer pSeries) as a consultant to Veritas
Software making changes to AIX as part of an IBM/Veritas
relationship.
I have also taught operating systems design classes at
Universidad Simon Bolivar (Venezuela) in 1989 and professional
system software classes, both for UNIX and Windows NT. I consider
myself eminently well versed as a software enginner with 12 years of
hands on operating system design and development.
The issues herein are of great importance to me and the industry
that I am a participant of. I appreciate the opportunity to comment
about the proposed settlement.
Below is a long list of comments. Each comment's name is of the
form "Comment X.Y" where X is the major section of the
proposed settlement within which the commented terms are discussed,
and Y is simply a sequential number of the comments that I have
written and it is actually independent of the acutal comment
numbering within the proposed settlement itself. Each comment
includes the appropriate reference to text in question within the
proposed settlement document.
I am available for comment and clarification in any and all
issues hereing, preferrably thorugh email, please contact me at:
Ramon G. Pantin
rgp @ scalio.com or at:
Ramon G. Pantin
6119 114th AVE NE
Kirkland WA 98033
Sincerily,
Ramon Pantin
January 26th, 2002
Comment III.1
Section III.A reads:
"A. Microsoft shall not retaliate against an OEM by
altering Microsoft's commercial relations with that OEM, or by
withholding newly introduced forms of non-monetary Consideration
(including but not limited to new versions of existing forms of non-
monetary Consideration) from that OEM, because it is known to
Microsoft that the OEM is or is contemplating:" There are 3
problems with this section:
1. It allows Microsoft to withhold existing forms of non-
monetary Consideration, because it only prevents witholding newly
introduced forms;
2. Monetary considerations are explicitly excluded, they
shouldn't be excluded.
3. Microsoft knowledge is irrelevant and hard to establish, that
text only contributes to the ambiguity of this section. Section
III.A should be not be constrained or qualified in these ways. It
should be replaced with this text:
A. Microsoft shall not retaliate against an OEM by altering
Microsoft's commercial relations with that OEM, or by withholding
any forms of Consideration from that OEM, because the OEM is or is
contemplating:" Comment III.2
Section III.A.I reads:
"1. developing, distributing, promoting, using, selling,
or licensing any software that competes with Microsoft Platform
Software or any product or service that distributes or promotes any
Non-Microsoft Middleware;"
There are 2 problems in this section:
1. Microsoft in the past has retaliated against OEMs that market
products that compete against Microsoft products, not just Microsoft
Platform Software. For example, Microsoft retaliated against IBM
when IBM decided to pro-install its SmartSuite product (a product
that competes directly with Microsoft Office) on its PCs, see
Findings of Fact, paragraph 122 which reads: "... Then, on
July 20, 1995, just three days after IBM announced its intention to
pro. install SmartSuite on its PCs, a Microsoft executive informed
his counterpart at the IBM PC Company that Microsoft was terminating
further negotiations with IBM for a license to Windows 95. Microsoft
also refused to release to the PC Company the Windows 95
"golden master" code. The PC Company needed the code for
its product planning and development, and IBM executives knew that
Microsoft had released it to IBM's OEM competitors on July 17
...."
[[Page 28709]]
2. The words "any software that competes" allow for
retaliation against the development, distribution, promotion, use,
sell, or licensing of any technology that competes against Microsoft
technologies. Examples of such technologies, include but are not
limited to: technical standards, open or proprietary protocols,
services, hardware products, etc. Section III.A1 should be not be
constrained or qualified in these ways. The existing Section III.A.1
should be left as part of the text and a new paragraph should be
added to the list. Thus Section III.A.4 (a new paragraph) should be:
"4. developing, distributing, promoting, using, selling,
or licensing any technology or product that competes with any
Microsoft product, technology or service;" Comment III.3
Section III.A.2 reads:
"2. shipping a Personal Computer that (a) includes both a
Windows Operating System Product and a non-Microsoft Operating
System, or (b) will boot with more than one Operating System;
or" Microsoft currently forbids OEMs, or it imposes Market
Development Agreement penalities or it withholds Consideration from
OEMs when they offer for sell Personal Computers without a Microsoft
Operating System. Because of the earlier consent decree imposed on
Microsoft, instead of requiring that every Personal Computer include
a Microsoft Operatin System, Microsoft requires that for each model
of Personal Computer offered by the OEM that each Personal Computer
of that model be sold with a Microsoft Operating System. If this
isn't done, Market Development Agreement penalties or Considerations
are withheld from the OEM. Theoretically, the OEM is free to offer a
model of Personal Computers for which it expects to sell such a high
fraction of them without a Microsoft Operating System, that offering
them in that way doesn't cause harm or competitive disadvantage to
the OEM. In reality, node of the models of Personal Computers are
expected to sell in any large enough percentage without a Microsoft
Operating System, thus the OEM ends up paying for a Microsoft
Operating System for each Personal Computer for each model that it
offers, thus it is forced to always pay for a Microsoft Operating
System.
Microsoft, additionally requires that the end user of the
Personal Computer accept a license agreement, and the it indicates
that if the license agreement is not accepted, that the Microsoft
Operating System product should not be used and that the Personal
Computer manufacturer should be contacted for a refund.
Because of Microsoft per unit per model royalty imposition on
the OEM, the OEM has no incentive to provide such a refund to the
end user and these requests are largely ignored by the OEMs thus
resulting in end users that desire to purchase a Personal Computer
to pay for a software licesnse for a Microsoft Operating System,
even if they never use such a software. Given Microsoft's creativity
in constraining OEMs in their business decisions, a broad based term
should also be included. For example, Microsoft could
technologically constraint the GEM from supporting non-Microsoft
Operating Systems, for example by Microsoft imposing on the GEM
technological standards that must be used in the Personal Computer
design and because of intellectual property reasons the use of these
standards prevent non-Microsoft Operating Systems from functioning
on the Personal Computer (for example because Microsoft might have
patents on the technology).
Section III.A.2 should be augmented with these subclauses to
allow consumer to purchase Personal Computers without a Microsoft
Operating System:
"2. shipping a Personal Computer that (a) includes both a
Windows Operating System Product and a non-Microsoft Operating
System, or (b) will boot with more than one Operating System, or (c)
does not include any Operating System of any kind, or (d) includes a
Windows Operating System Product and provides for the removal of the
Windows Operating System Product during the startup of the Personal
Computer, as long as the Windows Operating System has not been used
by the consumer, and allows for a refund to be issued to the
comsumer for the price of the operating system, or (e) in any way
supports or provides non-Microsoft Operating Systems; or"
Comment III.4
Section III.A by virtue of enumerating the activities that the
GEM "is or is contemplating" allows Microsoft to
retaliate for any activities not explicitly enumerated in this list
(III.A.1, III.A.2, III.A.3, etc). A broad term should be added that
prevents Microsoft from any other cause for retaliation. Section
III.A.5 should be added (Section III.A.4 was proposed to be added
above in Comment III.2):
5. engaging in any lawful activity by any means by itself or in
cooperation with any party.
Comment III.5
Section III.A in the fith paragraph (the paragraph under
III.A.3) reads in its last two sentences: "Microsoft shall not
terminate a Covered OEM's license for a Windows Operating System
Product without having first given the Covered GEM written notice of
the reasons for the proposed termination and not less than thirty
days" opportunity to cure. Notwithstanding the foregoing,
Microsoft shall have no obligation to provide such a termination
notice and opportunity to cure to any Covered GEM that has received
two or more such notices during the term of its Windows Operating
System Product license."
There are three problems with these sentences:
The time period of thirty days for cure is extremely short and
would lead to unnecessary hardship on the OEM because of product
distribution considerations (channel, distribution, resellers) that
might require a constly product recall to be able to cure in thirty
days. A period of at least 90 days is more appropriate. It is
interesting to notice how terminating a Covered OEMs license and
thus putting the OEM immediately out of the Personal Computer
business is codified into this consent decree, when any restraint on
Microsoft's illegal monopolistic behaviour requires (so far) years
of litigation and continued complaints about how
"draconian" such measures are.
2. The non-obligation to provide a termination notice can be
used by Microsoft as a means of retaliation by not enforcing
contractual terms on some OEMs while enforcing them on others, thus
easily allowing for just two such notices to cure to be used as
retaliatory means. The number of notices should be a function of
time, for example 2 notices per year.
3. Microsoft should be required to enforce contractual terms in
a non-discriminatory way across all OEMs, it should not be allowed
to selectively enforce contractual terms because it would provide an
easy retaliatory tool against the OEMs. Additionally, Microsoft must
show that if it makes efforts to enforce certain terms, then it must
enforce all terms across all OEM with equal effort, dilligence and
strength.
4. The notion of termination notices, per se, is problematic,
because termination notices might not even correspond to actual OEM
behaviour but to misunderstanding between the parties or Microsoft's
desires for retaliation against the OEM. Any such termination notice
should be submitted to the Technical Committee for technical
consideration, the Microsoft Internal Compliance Officer, and to all
the Plaintiffs; together with detailed documentation of the non-
discriminatotry enforcement by Microsoft of these and any other
contractual terms across all Covered OEMs. This communication is
important because it ensures that the antitrues enforcement parties
are involved from the start when any such notice is given. Comment
III.6
Section III.A, last paragraph reads:
"Nothing in this provision shall prohibit Microsoft from
providing Consideration to any OEM with respect to any Microsoft
product or service where that Consideration is commensurate with the
absolute level or amount of that OEM's development, distribution,
promotion, or licensing of that Microsoft product or service."
These issues should be addressed:
1. Such Consideration should be offered to all Covered OEMs in a
non-discriminatory basis.
2. The Consideration should be objectively measured according to
established accounting practices.
3. The Technical Committee, the Microsoft Internal Compliance
Officer, and all Plaintiffs should be informed and provided a copy
of any and all such agreements and be allowed to requests additional
documentation and conduct interviews related to the agreement.
Comment III.7
Section III.B, first paragraph reads:
"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:" Issues:
[[Page 28710]]
1. In the first sentence, where it reads "... with uniform
terms and conditions." it should read:" .... with
uniform terms and conditions and Considerations."
Considerations established outside or after the license agreement
has been entered should be communicated to the OEMs in a uniform
manner. All agreements and Considerations should be provided to the
Technical Committe, the Microsoft Internal Compliance Officer, and
all Plaintiffs and these parties must be allowed to requests
additional documentation and conduct interviews related to the
agreements and Considerations.
2. Microsoft in the past has discriminated against OEMs and
other Personal Computer manufacturers (for example Apple) by
threatening to not make Microsoft products available on those
manufacturers computers, for example Microsoft Office cancellation
for Apple's Macintosh systems. Additionally, Microsoft has used the
OEM prices of these non-Operating System products as a means to
discriminate against OEMs. The prices and the offering of any
Microsoft product to any Covered OEM for bundling with a Personal
Computer should be nondiscriminatory and subject to uniform license
agreements.
3. Volume discounts of groups of Microsoft Operating System
Products and Microsoft non-Operating System Products should not be
allowed, because it might lead to exclusion from the market of
products that competed against the Microsoft non-Operating System
Products. For example, group discounts for a bundle of Microsoft
Windows XP and Microsoft Office; or Microsoft Windows XP and
Microsoft Word (or Microsoft Excell, etc); or Microsoft Windows XP
and Microsoft Works; must not be allowed.
Comment III.8
Section III.C reads:
"C. Microsoft shall not restrict by agreement any OEM
licensee from exercising any of the following options or
alternatives:"
This should read:
C. Microsoft shall not restrict by agreement or any other means
any OEM licensee from exercising any of the following options or
alternatives:
For example, Microsoft could, through verbal or written
communication, or through the quality of service that it provides
the OEM restrict the OEM, or threaten the OEM from exercising the
alternatives. Microsoft has in the past retaliated against OEMs,
particularly IBM and Gateway, as is described in detail in the
Findings of Fact through means other than agreements. For example by
witholding IBM participation in marketting programs, or threatening
Gateway with sofware audits.
Comment III.9
Section III.C.1 and others enumerate:
"icons, shortcuts, or menu entries" this list should
be: icons, shortcuts, folders, appliactions, explorer hierarchies or
menu entries
Comment III.10
Section III.C.1 ends in "with respect to non-Microsoft and
Microsoft products." This should be changed to read:
"with respect to non-Microsoft and Microsoft products or
technologies that offer similar types of functionality." For
example, the technology might be provided by a network service and
not by a product installed in the Personal Computer, how the
technology is provided should not be a reason for allowing Microsoft
to retaliate or discriminate.
Comment III.11
In general, section III.C.1 and throughout the document, it is
assumed that the only way to allow applications or software
facilities to be used is through "icons, shortcuts, or menu
entries", when in reality, applications/middleware can also be
activated by associating it with particular types of data, and when
such types of data are accessed, the application associated with it
is activated. For example, when a file with a given extension is
accessed, or when a URL is accessed over the interact, the type of
the data is determined and the application associated with that type
of data is activated. It is vital that such associations be allowed
in a non-discriminatory basis between Microsoft and non-Microsoft
technologies. For example, when a Internet audio URL is accessed,
the media player associated with the data type is invoked to cause
the audio to be decoded and played. It is not unsusual for multiple
competing technologies, such as Microsoft Media Player, Real
Networks and Apple's Quicktime media players to be capable of
supporting the same data types, thus the preservation of the setting
chosen by the user is important. Discrimination in this area has
occurred in the past against both Apple's Quicktime and Real
Network's Real Player. The document should be updated throughout to
take into account this form of application activation through data
type and file name extension associations.
Comment III.12
Section III.C.2 reads:
"2. Distributing or promoting Non-Microsoft Middleware by
installing and displaying on the desktop shortcuts of any size or
shape so long as such shortcuts do not impair the functionality of
the user interface."
The term shortcuts should be replaced with icons, because many
types of items can be shown on the desktop and these are not limited
to shortcuts. For example, applications, files, folders, etc.
Comment III.13
Section III.C.3 reads:
"3. Launching automatically, at the conclusion of the
initial boot sequence or subsequent boot sequences, or upon
connections to or disconnections from the Interact, any Non-
Microsoft Middleware if a Microsoft Middleware Product that provides
similar functionality would otherwise be launched automatically at
that time, provided that any such Non-Microsoft Middleware displays
on the desktop no user interface or a user interface of similar size
and shape to the user interface displayed by the corresponding
Microsoft Middleware Product." Issues:
1. The qualification: "if a Microsoft Middleware Product
that provides similar functionality would otherwise be launched
automatically at that time" is simply a form of restraint of
trade. Microsoft usually doesn't lead in innovation, it follows,
copies and bundles other's innovations into its products. It is
unreasonable to require that Microsoft launch some software at a
particular time to allow others to launch their software at that
time. Usually some third party or OEM will developped these concepts
and only later (much later sometimes) Microsoft will copy the
concepts and include them in their versions of such functionality.
The qualification should be removed.
2. The second qualification is also very unresonable, here
Microsoft again thinks that it can dictate or retrain through its
actions (or lack thereof the innovations of others. The
qualification reads: "provided that any such Non-Microsoft
Middleware displays on the desktop no user interface or a user
interface of similar size and shape to the user interface displayed
by the corresponding Microsoft Middleware Product." Again, it
is ludicrous that competing ISVs or OEMs be reatrained to only mimic
Microsoft's actions when usually innovation happens the other way
around. This qualification should be removed. Why should microsoft
care about the size of the user interface? If the OEM creates a user
interface that is too small, or narrow, or large, it doesn't cause
any harm to Microsoft, only to the OEM in user dissatisfaction and
support costs (none of which are Microsoft's concern given that it
doesn't bare any of those costs, and given Microsoft's treatment of
Hewlett Packard with respect to startup sequnce shells, it has shown
that it doesn't care about those OEM costs).
3. The qualification "if a Microsoft Middleware Product
that provides similar functionality" also allows for Microsoft
restraint of other's innovations, the definition of Microsoft
Middleware Product is particularly weak and full of escape clauses.
The qualification should not be present at all.
4. The time qualification and enumeration of the circumstances
and times under which launching can occur "at the conclusion
of the initial boot sequence or subsequent boot sequences, or upon
connections to or disconnections from the Internet" should
also be removed. There are many reasons why lounching might be
desireable at other times.
5. Launching of should not be restricted to "Non-Microsoft
Middleware", any software should be allowed to be launched.
Section III.C.3 should read:
3. Launching automatically, at the conclusion of the initial
boot sequence or subsequent boot sequences, or upon connections to
or disconnections from the Interact, or at any other time, any Non-
Microsoft software is allowed without this being subject to any
restraint from Microsoft. Mechanisms (APIs, Protocols, Facilities,
etc) present in a Microsoft Operating System that aids launching of
Microsoft software at particular times should be documented and
allowed to be accessed by non-Microsoft software without restraint.
It should be noted that the original Section III.C.3 precludes
the implementation of IAP sign up sequences, OEM shells, end user
tutorials that are desired to be lounched at the initial and
subsequent boot sequences. For example the OEM might present an IAP
sign up sequence until such a time when the user as made such a
selection or when the
[[Page 28711]]
user as indicated that it doesn't want to asked again in subsequent
sign up sequences. The reason the Section III.C.3 precludes even the
implementation in the initial boot sequence is because Microsoft can
remove their own facilities from startup or from displaying a user
interface, thus forcing the OEM to remove their facilities. Freedom
of innovation and choice by the OEMs cannot be at the mercy of
Microsoft's actions. For example, Microsoft might move such
facilities to the second boot sequence and it might require that the
system reboot after an initial boot sequence process, the OEMs would
then not have the freedom to provide their facilities in the second
boot sequence.
Comment III.14
Section III.C.4 reads:
"4. Offering users the option of launching other Operating
Systems from the Basic Input/Output System or a non-Microsoft boot-
loader or similar program that launches prior to the start of the
Windows Operating System Product."
This section should be augmented in this way:
4. Offering users the option of (a) launching other Operating
Systems from the Basic Input/Output System; or (b) launching other
Operating Systems from a non-Microsoft boot-loader or similar
program that launches prior to the start of the Windows Operating
System Product.; or (c) choosing to make a non-Microsoft boot-loader
the default boot loader in the system; or (d) choosing to allow the
end user to interactively direct the Basic Input/Output System or a
non-Microsoft boot-loader or any other facility to remove a
Microsoft Windows Operating System and to provide the Personal
Computer owner to receive a refund for the cost of the Microsoft
Windows Operating System from the OEM; or (e) to select a default
Operating System that is a non-Microsoft Operating System, for
example by allowing the default Operating System to start without
user intervention after a timeout period; or (I3 any other form of
restraint that might cause an OEM to not preload non-Microsoft
Operating systems in theft Personal Computers (for example by having
the Microsoft Operating System corrupt the disk occupied used by
such non-Microsoft Operating Systems, or from denying supprt to OEMs
for such product configurations, etc)..
Given the nature of existing restraints by Microsoft in this
area, these additional clauses allow for less restraint by Microsoft
on the OEMs actions.
Comment III.15
Section III.D reads:
"D. Starting at the earlier of the release of Service Pack
1 for Windows XP or 12 months after the submission of this Final
Judgment to the Court, Microsoft shall disclose to ISVs, IHVs, IAPs,
ICPs, and OEMs, for the sole purpose of interoperating with a
Windows Operating System Product, via the Microsoft Developer
Network ("MSDN") or similar mechanisms, the APIs and
related Documentation that are used by Microsoft Middleware to
interoperate with a Windows Operating System Product. In the case of
a new major version of Microsoft Middleware, the disclosures
required by this Section III.D shall occur no later than the last
major beta test release of that Microsoft Middleware. In the case of
a new version of a Windows Operating System Product, the obligations
imposed by this Section III.D shall occur in a Timely Manner."
Issues:
1. The text "via the Microsoft Developer Network
("MSDN") or similar mechanisms" allows Microsoft
not to use the MSDN program which is broadly available and non-
discriminatory, and allows instead for Microsoft to extract other
agreements and conditions from the interested parties. The intent
should by "via the Microsoft Developer Network
("MSDN") or successor developer program (if the MSDN
program is discontinued or replaced by a new developer program, but
such a program should be equally broadly available and equally
nondiscriminatory as the MSDN program was on the earliest date the
proposed consent decree was filled with the Court by Microsoft and
the Plaintiffs)."
2. The text "APIs and related Documentation" should
be extended to include "APIs, related Documentation,
Protocols, File Formats, Data Formats, Certification/Validation
Component Signatures, and any other technological mechanism".
3. The text "that are used by Microsoft Middleware to
interoperate with a Windows Operating System Product ", given
the loose definition and the escape clauses that Microsoft can
invoke in that definition, and given that Microsoft also markets a
wide variety of non-Middleware software and hardware, the text
should be corrected to require full disclosure of the use by these
software and hardware products of Microsoft Operating System
facilities. The proposed text is shown below.
4. The requirement that disclosure only occur in the case of a
new major version of Microsoft Middleware allows Microsoft an easy
exit from their documentation requirements. Microsoft has stated in
fron of the District Court (Judge Jackson) that a sandwich would be
part of the Operating System if they so dictated, clearly Microsoft
cannot be trusted to name a release major or non-major, because to
Microsoft it would be whatever they desire at such a time.
Furthermore the mechanism of Major and first Minor point release
numbers is highly ambiguous and maleable, certain Microsoft products
don't even have a version number (Windows XP, Microsot .Net). In any
case, whether a product release is major or minor should not be an
excuse for non-diclosure, a small bug fix release wouldn't have many
changes on interface use, so its documentation requirements would be
proportional to the effort spent in the release development. If this
restriction is not removed, facilities would remain undocumented,
simply because Microsoft doesn't use them initially in their so
called major release but instead only uses them initially in a minor
release; or even more easily by making every release a minor
release. Microsoft has shown in the earlier Consent Decree entered
with the D.O.J. that it will take advantage in any ambiguity.
The new section should thus read:
D. Starting at the earlier of the release of Service Pack 1 for
Windows XP or 12 months after the submission of this Final Judgment
to the Court, Microsoft shall disclose to ISVs, IHVs, IAPs, ICPs,
and OEMs, for the sole purpose of interoperating with a Windows
Operating System Product, via the Microsoft Developer Network
("MSDN") or successor developer program (if the MSDN
program is discontinued or replaced by a new developer program, but
such a program should be equally broadly available and equally non-
discriminatory as the MSDN program was on the earliest date the
proposed consent decree was filled with the Court by Microsoft and
the Plaintiffs), the APIs, related Documentation, Protocols, File
Formats, Data Formats, Certification/Validation Component Signatures
(and Microsoft shall not restraint or deny such signature facilities
or enablements, and any other technological mechanism that are used
by Microsoft Middleware, Microsoft Application, Microsoft Hardware
Products, or by newly introduced Microsoft Operating System features
(that are similar to existing facilities available from third
parties in the market) to intemperate with a Windows Operating
System Product. In the case of a any new version of Microsoft
Middleware or Microsoft Operating Systems, or Microsoft Application,
the disclosures required by this Section III.D shall occur no later
than the last major beta test release of that Microsoft Middleware.
In the case of a new version of a Windows Operating System Product,
the obligations imposed by this Section III.D shall occur in a
Timely Manner.
Comment III.16
Section III.E should be augmented where it reads "on
reasonable and non-discriminatory tcrms" to read "on
reasonable, non-discriminatory and non-royalty bearing terms."
The imposition of per unit royalties as a condition to grant access
to any Communication Protocol would allow Microsoft to exclude
competitors from the market.
Comment III.17
Section III.E reads:
"E. Starting nine months after the submission of this
proposed Final Judgment to the Court, Microsoft shall make available
for use by third parties, for the sole purpose of interoperating
with a Windows Operating System Product, on reasonable and
nondiscriminatory terms (consistent with Section III.I), any
Communications Protocol that is, on or after the date this Final
Judgment is submitted to the Court, (i) implemented in a Windows
Operating System Product installed on a client computer, and (ii)
used to interoperate natively (i.e., without the addition of
software code to the client operating system product) with a
Microsoft server operating system product."
There are many issues with this section:
1. Communication Protocols can be used for communication between
two or more personal computers running a Windows Operating System
Product installed on client computers. For example a client computer
can share a disk drive so that its file are accessed to other client
computers, such functionality doesn't require a Microsoft server
operating system product. The ability to interoperate natively
should not be
[[Page 28712]]
restricted to the Communication Protocols used to interoperate
natively with a Microsoft server operating system product, for
example a competing non-server client operating system might require
to implement these protocols to be competitive. For example, both
Apple's MacOS X client operating system and client versions of the
GNU/Linux operating systems contain incomplete implementations of
the file sharing protocols used by Windows Operating System ).
Section III.E shall apply equally to both client and server
operating systems to allow them interoperate natively with Windows
Operating System Products installed on client computers.
2. To circumvent the provisions in Section III.E Microsoft could
do this in future (major or minor) releases of its Personal Computer
Operating System Products: (a) do not include software that
implements future revisions of a Communications Protocol with the
Windows Operating System Product installed on a client computer; and
(b) request from the Microsoft server operating system product the
software that the client requies at first boot, each boot, or at
under other circumstances. Thus Microsoft would have circumvented
the requirements stated in Section III.E because there would be
"addition of software code to the client operating system
product" (which Section III.E.ii requires that it be
"without the addition of software code to the client operating
system product"). By Microsoft implementing a new protocol
(which it would not have trouble documenting to 3rd parties) that
the client computer's Windows Operating System Product would use to
request these addional software codes from a Microsoft server
operating system product the circumvention would have been achieved.
Thus by removing the existing components that implement existing
Communications Protocols all kinds of Communications Protocols would
thus be allowed to remain undocument in future releases of a Windows
Operating System Product by Microsoft, thus denying the purpose of
allowing native interoperability between other operating systems and
Windows Operating System Products. Microsoft, through privave key
signin and public key signature validation, Microsoft would be able
to sign these software components to ensure their origins
(Microsoft) and that they have not ben tampered, thus allowing every
Communications Protocols to remain undocumented, including security
protocols, filesystem protocols, transaction management protocols,
etc. The intent of Section III.E is good because it is pro-
competitive, but the actual terms easily allow Microsoft to
circumvent that intent. Software is very maleable, terms used to
describe it, such as: "without the addition of software
code" are easily circumvented, for example by slicing the
software and requiting thatthere be "addition of software
code", this can be done easily and transparently (i.e. without
knowledge by end user).
3. The word "implemented" is also used to describe
the software, and can lead to arguments or circumvention from
Microsof with respect to meaning.
4. The description of what is being made available is ambiguous.
Instead of "Microsoft shall make available .... any
Communications Protocol", it should be stated clearly what is
being made available. A description of what should be made available
is shown in the proposed revision to Section III.E below.
Section III.E should be replaced with:
E. Starting nine months after the submission of this proposed
Final Judgment to the Court, Microsoft shall make available for use
by third parties, for the sole purpose of interoperating with a
Windows Operating System Product, on reasonable (without an up front
fee and royalty free) and non-discriminatory terms (consistent with
Section III.I), technical implementations for any Communications
Protocol that is, on or after the date this Final Judgment is
submitted to the Court, utilized by a Windows Operating System
Product nstalled on a client computer to interoperate with (i) a
Microsoft server operating system product, or (ii) a Windows
Operating System Product. The means through which any such
Communications Protocol shall be made available shall include:
(a) a non-fee based and non-royalty based patent license to any
and all patents required by an implementation of fully featured,
high performance, and interoperable client or server operating
system product components that implement the Communication Protocols
in question. The patent license can be limited to be for the sole
purpose of interoperating with Windows Operating System Products
installed on a client computers; and
(b) a non-fee based and non-royalty based license to implement
the Communications Protocol in client and server operating system
product components that are fully featured, high performance, and
interoperable with Windows Operating System Products installed on a
client computers. The protocol license can be limited to be for the
sole purpose of interoperating with Windows Operating System
Products installed on a client computers; and
(c) a technical discussion forum (mail list, newsgroup or web
site) through which Microsoft will provide in a nondiscriminatory
basis non-fee based technical support to ISVs that require support
related to the Communications Protocol. Microsoft shall make its
best efforts to provide such technical support. Microsoft shall
provide subject to the Communication Protocol license the
Communications Protocol specifications which shall be:
(d) the precise and complete set of specifications of the
Communication Protocols (and their predecessors), such that based on
it a competent third party software developper would be capable of
implementing fully featured, high performance, and interoperable
operating system product components that implement the Communication
Protocols in question (without the need to perform any reverse
engineering of any kind); or In the abscence of such a precise and
complete set of specifications as described in Section III.E.a
(above), or at Microsoft's choosing or by direction of the
Technicall Committee, Microsoft shall provide instead:
(e) any and all specifications that Microsoft has of the
Communication Protocols (and their predecessors); and the complete
source code and build procedures of all the relevant client side
components and implementations (for each Microsoft Windows Operating
System Product) of the Communications Protocol in a form that these
components can be compiled (i.e. translated from source code form
into binary form) and linked (translated from object form into a
binary executable form) by the third party to produce the exact same
binaries of the native components in the Windows Operating System
Product that implement the Communication Protocols. The license
under which these component's source codes and build procedures
would be provided to the third party would be only for reference and
use only within the third parties premises for the sole purpose of
implementing fully featured, high performance, and interoperable
operating system product components that implement the
Communications Protocol in question. No redistribution rights of any
kind (in binary or source form) are required to be given to the
third party.
Additionally:
(f) Microsoft shall continuously and proactively provide updates
to the third party such that the third party can continue to
implement fully featured, high performance, and interoperable
operating system product components that implement the Communication
Protocols in question as the corresponding Microsoft Windows
Operating System Products implement new patents, versions or
features of the Communications Protocol. These updates should be
provided irrespective of how major or minor is the Microsoft Windows
Operating System Product update that makes use of the Communications
Protocol changes or patents. Microsoft shall provide these through
addendums:
(i) to the licenses described in Sections III.E.a and III.E.b to
cover new patents or protocol revisions or versions as appropriate;
and
(ii) the specifications and implementations described or
provided in Sections III.E.d and III.E.e as appropriate
Comment III.18
Section III.F.1.a reads:
"a. developing, using, distributing, promoting or
supporting any software that competes with Microsoft Platform
Software or any software that runs on any software that competes
with Microsoft Platform Software, or" Microsoft has shown that
it retaliates against OEMs when they support now-Microsoft software
in general, not just Microsoft Platform Software, for example the
retaliation against IBM because of IBM's intent to bundle SmartSuite
with their Personal Computers as can be seen in the Findings of
Fact.
Section III.F.1.a should be expanded to read:
a. developing, using, distributing, promoting or supporting any
software that competes with Microsoft Platform Software, Microsoft
Operating Systems, Microsoft Application Software, Microsoft
Hardware or any other Microsoft supported technologies or any
software that runs on any software
[[Page 28713]]
that competes with Microsoft Platform Software, Microsoft Operatin
Systems, Microsoft Application Software, Microsoft Hardware or any
other Microsoft supported technologies; or
Comment III.19
Section III.F.2 reads:
"2. Microsoft shall not enter into any agreement relating
to a Windows Operating System Product that conditions the grant of
any Consideration on an ISV's refraining from developing, using,
distributing, or promoting any software that competes with Microsoft
Platform Software or any software that runs on any software that
competes with Microsoft Platform Software, except that Microsoft may
enter into agreements that place limitations on an ISV's
development, use, distribution or promotion of any such software if
those limitations are reasonably necessary to and of reasonable
scope and duration in relation to a bona fide contractual obligation
of the ISV to use, distribute or promote any Microsoft software or
to develop software for, or in conjunction with, Microsoft."
Issues:
1. Again, Microsoft retaliates against OEMs (IBM) to product
Microsoft products other than its Operating Systems.
2. Allowing Microsoft to enter into agreements that "place
any limitations on ISV's development, use, distribution or promotion
of any such software" is an open ended means under which
Microsoft can cause ISV's to act in manners that Microsoft desires.
For example, Microsoft might extend the MSDN agreements with limited
sublicensing of Microsoft patent pools and extract in exchange
agreements from all 1SVs in the market to limit their development,
use, distribution or promotion of any other software. The litigation
to ensure that those limitations are not "reasonably necessary
to and of reasonable scope" would probably take another 4
years of litigation. The Plaintiffs must remember that one of
Microsoft's options at any time is to relly on the ambiguities of
these terms and use them to realize their means, given that it has
been shown that Microsoft has monopoly power int he x86 compatible
Personal Computer market its retaliatory means must be reduced as
much as possible.
Section III.F.2 should read:
2. Microsoft shall not enter into any agreement relating to a
Windows Operating System Product, Microsoft Application Software,
Microsoft Hardware or any other Microsoft supported technologies,
that conditions the grant of any Consideration on an ISV's
refraining from developing, using, distributing, or promoting any
software that competes with Microsoft Platform Software, Microsoft
Operatin Systems, Microsoft Application Software, Microsoft Hardware
or any other Microsoft supported technologies or any software that
runs on any software that competes with Microsoft Platform Software.
Microsoft may not enter into any agreements that place limitations
on an ISV's development, use, distribution or promotion of any such
software for any reason.
Microsoft has more than enough resources to all the software
development that it requires, if it has to felly on outside parties
to do software development, it must do so without placing
limitations.
Comment III.20
Section III.G.1 reads:
"G. Microsoft shall not enter into any agreement with:
1. any IAP, ICP, ISV, IHV or OEM that grants Consideration on
the condition that such entity distributes, promotes, uses, or
supports, exclusively or in a fixed percentage, any Microsoft
Platform Software, except that Microsoft may enter into agreements
in which such an entity agrees to distribute, promote, use or
support Microsoft Platform Software in a fixed percentage whenever
Microsoft in good faith obtains a representation that it is
commercially practicable for the entity to provide equal or greater
distribution, promotion, use or support for software that competes
with Microsoft Platform Software, or"
These are the issues:
1. The text: "except that Microsoft may enter into
agreements in which such an entity agrees to distribute, promote,
use or support Microsoft Platform Software in a fixed percentage
whenever Microsoft in good faith obtains a representation that it is
commercially practicable for the entity to provide equal or greater
distribution, promotion, use or support for software that competes
with Microsoft Platform Software" allows Microsoft to extract
agreements from these parties under which at least, by assuring
itself of a 50% distribution, promotion or usage share it guarantees
that no competitors technology can be bradly available on a large
fraction of Personal Computers so that it can become a platform for
cross-platform software. For example by ensuring that 50% of new
Personal Computers don't include such software, Microsoft can ensure
that such software doesn't obtain critical mass as a platform.
2. These kinds of allowances, given Microsoft's behavior, only
serve to codify Microsoft's right to extinguish competition. It
codifies the right and means through which Microsoft can cut other
parties "air supply".
3. By restricting these terms to "Microsoft Platform
Software" it allows Microsoft to enter other kinds of
agreements in which the means to kill innovation and drive others
off the market is by developping non-Platform Software, for example
by developping Applications, giving them for free and forcing these
parties to distribute them at 50% usage share. The whole exception
should be removed and Section III.G.1 should read: G. Microsoft
shall not enter into any agreement with:
1. any IAP, ICP, ISV, IHV or OEM that grants Consideration on
the condition that such entity distributes, promotes, uses, or
supports, exclusively or in a fixed percentage, any Microsoft
Platform Software, Microsoft Operatin Systems, Microsoft Application
Software, Microsoft Hardware or any other Microsoft supported
technologies, or Furthermore, the agreement that Microsoft might
enter might require that the OEM doesn't distribute certain non-
Microsoft Sofware without actually requiring the distribution of
Microsoft technologies. Thus a new clause should be added, Section
III.G.3:
3. any IAP, ICP, ISV, IHV or OEM that grants Consideration on
the condition that such entity refrains in any way or percentage
from distributing, promoting, using, or supporting, any non-
Microsoft software or technologies
Comment III.21
Section III.G.2 reads:
"G. Microsoft shall not enter into any agreement with:
2. any LAP or ICP that grants placement on the desktop or
elsewhere in any Windows Operating System Product to that IAP or ICP
on the condition that the IAP or ICP refrain from distributing,
promoting or using any software that competes with Microsoft
Middleware." Again the restriction is too narrow with respect
to Microsoft's other means of distributing software, it should read:
2. any LAP or ICP that grants placement on the desktop or
elsewhere in any Windows Operating System Product to that IAP or ICP
on the condition that the IAP or ICP refrain from distributing,
promoting or using any software that competes with Microsoft
Middleware, Microsoft Platform Software, Microsoft Operatin Systems,
Microsoft Application Software, Microsoft Hardware or any other
Microsoft supported technologies
Comment III.22
Section III.G contains this, it is the second to last paragraph
in the section: "Nothing in this section shall prohibit
Microsoft from entering into (a) any bona fide joint venture or (b)
any joint development or joint services arrangement with any ISV,
IHV, IAP, ICP, or OEM for a new product, technology or service, or
any material value-add to an existing product, technology or
service, in which both Microsoft and the ISV, IHV, IAP, ICP, or OEM
contribute significant developer or other resources, that prohibits
such entity from competing with the object of the joint venture or
other arrangement for a reasonable period of time." Microsoft
should be allowed to enter into these arrangements, but it should be
allowed to require it to "prohibits such entity from competing
with the object of the joint venture or other arrangement for a
reasonable period of time.". Again, "reasonable period
of time" is ambiguous and open ended, and non-compete clauses
have no pro-competive role other than exclusionary when included in
agreements by a Monopolist such as Microsoft. Joint development or
joint services agreements should not be restricted in this manner.
If an actual separate entity is formed, a joint venture that
includes the incorporation or foundation of a separate independent
legal entity, the entity in question could have non-competition
restrictions placed on it, but not the shareholder companies
themselves (i.e. Microsoft and the other party).
Comment III.23
Section III.G, last paragraph, reads:
This Section does not apply to any agreements in which Microsoft
licenses intellectual property in from a third party. This
statement, is very ambiguous and unqualified. The meaning of
"Microsoft licenses intellectual property in from a third
party" could easily mean that Microsoft products that include
any third party intellectual propery are exempt from the
[[Page 28714]]
section. Most Microsoft products contain third party software,
certainly its operating systems do (for example the Vcritas/Seagate
backup software and the Veritas Volume Manager included in both
Windows XP and Windows 2000; the BSD software included in Windows
2000 and Windows XP; the Mosaic sofware included in all version of
Internet Explorer; the Java software included in Windows 2000 and
Windows XP; the printing drivers and other device drivers from IHVs
included in Windows 2000 and Windows XP; the amount of software
licensed into these products is very large; etc). Additionally,
there can also be other forms of intellectual licenses that apply to
these and other products (for example licenses to use patents of
third parties). If the clause is intended to mean something
different from my interpretation, please explain what it is intended
to mean, and what terms in that sentence ensures that only that
meaning is allowed.
This sentence should be removed completely from this section.
Alternatively, a sentence that says:
Where terms in this section would cause a third party who has
licensed software or any other form of intellectual property to
Microsoft to have its license agreement violated then the specific
terms in this section that would cause such a license breach do not
apply. Unless the third party, at its own discrtion, chooses to
allow the specific violations under an agreement amendment.
Violation of the license agreement means violation to the detriment
of the interest of the third party and not violation to the
detriment of Microsoft's interests. Additionally, Microsoft should
proactively inform the Microsoft Internal Compliance Officer, the
Technical Committee, and the Plaintiffs about the circumstances in
question and provide, as priviledged communication and without
violating the interests of the third party, all information required
for their enforcement activities.
Comment III.24
Section III.H.2 (the first such section, there are two such
sections in Section III.H) reads:
"2. Allow end users (via a mechanism readily available
from the desktop or Start menu), OEMs (via standard OEM
preinstallation kits), and Non-Microsoft Middleware Products (via a
mechanism which may, at Microsoft's option, require confirmation
from the end user) to designate a Non-Microsoft Middleware Product
to be invoked in place of that Microsoft Middleware Product (or vice
versa) in any case where the Windows Operating System Product would
otherwise launch the Microsoft Middleware Product in a separate Top-
Level Window and display either (i) all of the user interface
elements or (ii) the Trademark of the Microsoft Middleware
Product."
These are the issues:
The text "require confirmation from the end user"
should include statements that ensure that Microsoft will not act in
a discriminatory or derrogatory manner in those confirmations. For
example, Microsoft should not be allowed to include as part of that
confirmation process: documentation, help, verbal communitation or
any other means discriminatory or derrogatory statements. Examples
of such statemetns are: "By choosing this option, Microsoft
voids the warranty of the product or disclaims its obligation to
provide support. Microsoft has not tested this third party option,
use at your own risk. Use of this option might cause data loss,
corruption, etc." Microsoft has included messages in their
products purposedly to cause third parties to not use non-Microsoft
technology. The Windows 3.0 betas included messages similar to these
when Windows realized that it was running on top of Digital
Research's DR-DOS Operating System (instead of running on top of
Microsoft's MS-DOS).
2. These statements: "launch the Microsoft Middleware
Product in a separate Top-Level Window and display either (i) all of
the user interface elements or (ii) the Trademark of the Microsoft
Middleware Product." allow for Microsoft to easily subvert the
intent by not Trademarking the Microsoft Middleware (while allowing
compound Trademarks suchs as "Windows (R) Stuff'), by only
showing all but one (1) of the user interface elements. The
restriction to a separate Top-Level Window means that by providing
it in a subwindow of an existing window on in a visually separate
top level window that is controlled by a Microsoft non-separate or
independent process, these escape clauses, again provide Microsoft
with a a myriad ways to escape the intent of the clause.
Additionally because of the software maleability the restriction to
only Microsot1 Middleware Products should not apply.
Section III.H.2 (the first such section, there are two such
sections in Section III.H) should read:
2. Allow end users (via a mechanism readily available from the
desktop or Start menu), OEMs (via standard OEM preinstallation
kits), and Non-Microsoft software and technologies (via a mechanism
which may, at Microsoft's option, require confirmation from the end
user in a non-discriminatory and non-derrogatory manner) to
designate a Non-Microsoft software or technologies to be invoked in
place of any Microsoft Middleware, Microsoft Application or any
Microsoft Operating System feature that existed in the market as a
third party product prior to Microsoft's incorpration of such a
feature into its Operating System (or vice versa) in any case where
the Windows Operating System Product would otherwise launch the
Microsoft Middleware Product, Microsoft Applications or any such
Microsoft Operating System.
Comment III.25
Section III.H.3 allows for "(b) seek such confirmation
from the end user for an automatic (as opposed to user-initiated)
alteration of the OEM's configuration until 14 days after the
initial boot up of a new Personal Computer". Such confirmation
must be sought through non-discriminatory and non-derrogatory means
(as outlined in Comment III.23). Additionally such confirmation from
the end user must allow the user to reject the continued request for
this confirmation by providing an easily visible checkbox that
indicates: "would you like to be asked this question again in
the future?" if the user doesn't want this question to be
asked in the future it selects the checkbox and the question is
never asked again (and the current settings remain unchanged).
Comment III.26
Section III.H.3.2 (the second such section, there are two such
sections in Section III.H) reads:
"2. that designated Non-Microsoft Middleware Product fails
to implement a reasonable technical requirement (e.g., a requirement
to be able to host a particular ActiveX control) that is necessary
for valid technical reasons to supply the end user with
functionality consistent with a Windows Operating System Product,
provided that the technical reasons are described in a reasonably
prompt manner to any ISV that requests them."
Issues:
1. The "designated Non-Microsoft Middleware Product"
term should be "designated Non-Microsoft software or
technology".
2. Requirements to host a paricular ActiveX control must require
that Microsoft proactively documents the interfaces of the
particular Active) control, and doesn't prevent through signature or
any other mechanism such hosting by the Non-Micorosft software or
technology.
3. The "provided that the technical reasons are described
in a reasonably prompt manner to any ISV that requests them"
text shold read "Microsoft must pro-actively and broadly
(through the MSDN program and web sites) describe the technical
reasons reasonable manner." Any such "valid technical
reasons" must be communicated to the Technical Committee, the
Microsoft Internal Compliance Officer and the Plaintiffs.
Section III.H.3.2 (the second such section, there are two such
sections in Section III.H) should read:
"2. that designated Non-Microsoft software or technology
fails to implement a reasonable technical requirement (e.g., a
requirement to be able to host a particular ActiveX control) that is
necessary for valid technical reasons to supply the end user with
functionality consistent with a Windows Operating System Product,
provided that the technical reasons and detailed and complete
technical documentation and mechanisms (component signatures) are
described in a reasonably prompt manner to all ISVs through the MSDN
program or its successor. Addionally the valid technical reasons and
any other information relevant to the reasons must be communicated
to the Technical Committee, the Microsoft Internal Compliance
Officer, the Plaintiffs and the ISVs in question."
Comment III.27
The last paragraph of Section III.H.3 reads:
"Microsoft's obligations under this Section III.H as to
any new Windows Operating System Product shall be determined based
on the Microsoft Middleware Products which exist seven months prior
to the last beta test version (i.e., the one immediately preceding
the first release candidate) of that Windows Operating System
Product." Issues:
1. Again this is tied to Microsoft Middleware Prodcuts, it
should be replaced by the broader term.
[[Page 28715]]
2. When a technology "exists" can lead to ambiguity
given that Microsoft might dictate that technology doesn't exist
until it determines (at its sole discretion) that it exists. This
ambiguity is not required.
The last paragraph of Section III.H.3 should be removed
completely. Microsoft can introduce new Microsoft Middleware,
Microsoft Applications, Microsoft Technologies, Microsoft Hardware
at any arbitrary point in time after the release of an Operating
System product. In so far as those Microsoft technologies alter
user's preferences and default system settings, saving and restoring
those settings sould be supported through an Operating System
mechanism and user interface that allows for these settings to be
manipulated.
Comment III.28
The first paragraphs of Section III.I reads:
"I. Microsoft shall offer to license to ISVs, IHVs, IAPs,
ICPs, and OEMs any intellectual property rights owned or licensable
by Microsoft that are required to exercise any of the options or
alternatives expressly provided to them under this Final Judgment,
provided that" The text "shall offer to license"
requires that licensing be offered, it doesn't require that it
actually enter into such license agreements. The text should instead
read:
I. Microsoft shall offer to license, and shall make its best
effort to actually license, to ISVs, IHVs, IAPs, ICPs, and OEMs any
intellectual property rights owned or licensable by Microsoft that
are required to exercise any of the options or alternatives
expressly provided to them under this Final Judgment, provided that
Comment III.29
Section III.I.1 reads:
"1. all terms, including royalties or other payment of
monetary consideration, are reasonable and non-
discriminatory;" Allowing for per unit royalties or
prohibitive up front licensing fees might prevent Microsoft
competitors from actually being able to participate competitibly in
the relevant product markets. This Section III.I.1 should read
instead: "1. all terms, are reasonable and non-discriminatory.
Royalties or other payments of monetary consideration are explicitly
forbidden from the temps when the intellectual property is to be
used only for interoperation with a Microsoft Operating System
product." For example such a license would not require
royalties from a server Operating System to interoperate with a
Microsoft Operating System for Personal Computers, but if the server
Operating System makes use of the licensed intellectual property to
interoperate with non-Microsoft Operating Systems for Personal
Computers, then a royalty might be required by Microsoft.
Comment III.30
Section III.I.2 reads:
"2. the scope of any such license (and the intellectual
property rights licensed thereunder) need be no broader than is
necessary to ensure that an ISV, IHV, IAP, ICP or OEM is able to
exercise the options or alternatives expressly provided under this
Final Judgment (e.g., an ISV's, IHV's, IAP's, ICP's and OEM's option
to promote Non-Microsoft Middleware shall not confer any rights to
any Microsoft intellectual property rights infringed by that Non-
Microsoft Middleware);" XXX
Comment III.31
Section III.I.3 reads:
"an ISV's, IHV's, IAP's, ICP's, or OEM's rights may be
conditioned on its not assigning, transferring or sublicensing its
rights under any license granted under this provision;" Not
allowing the transferring or assignment of these parties rights
under certain circumstances, for example under an acquisition, is
inherently a form of discrimination. Given that the licenses are to
be offered in a non-discriminatory fashion, it is important that
such licenses once offered be available in the future and that the
licensing not be restricted to a given period of time. If subsequent
versions of technology become available, and new licenses are
developped for that technology, the older licenses to the earlier
technology should continue to be offered for the earlier verisions
of the technology.
Comment III.32
The paragraphs immediately after Section III.I.5 reads:
"Beyond the express terms of any license granted by Microsoft
pursuant to this section, this Final Judgment does not, directly or
by implication, estoppel or otherwise, confer any rights, licenses,
covenants or immunities with regard to any Microsoft intellectual
property to anyone."
Comment III.33
Section III.J.2.b reads:
"that the licensee:
(b) has a reasonable business need for the API, Documentation or
Communications Protocol for a planned or shipping product,"
Microsoft shall not unreasonably dispute the licensee's
assertions with respect to III.J.2.b, any individual member of the
Technical Committee through direct communication with the
prospective licensee can make a positive determination about the
III.J.2.b requirement and inform Microsoft about its determination
without any further Microsoft argument, dispute or delay about the
prospective licensee meeting the III.J.2.b requirement (Court
intervention shall not be required).
Section III.J.2.b should read:
(b) has a reasonable business need (as promptly and in a non-
discriminating manner determined by Microsoft or any one individual
member of the Technical Committee), for the API, Documentation or
Communications Protocol for a planned or shipping product
Comment III.33
Section III.J.2.b reads:
"that the licensee:
(c) meets reasonable, objective standards established by
Microsoft for certifying the authenticity and viability of its
business" It should instead read: (c) meets reasonable,
objective and non-discriminatory standards (proposed by Microsoft
and promptly approved by the Technical Committe in consultation with
the Plaintiffs) for certifying the authenticity and viability of its
business, the actual determination of the actual authenticity and
viability of the business can be made by Microsoft or any one member
of the Technical Committee after taking into consideration legal
consultation from the Technical Committee's legal staff
Comment III.34
Section J.2.d reads:
"that the licensee:
(d) agrees to submit, at its own expense, any computer program
using such APIs, Documentation or Communication Protocols to third-
party verification, approved by Microsoft, to test for and ensure
verification and compliance with Microsoft specifications for use of
the API or interface, which specifications shall be related to
proper operation and integrity of the systems and mechanisms
identified in this paragraph."
The issues are:
1. Should be at Microsoft's expense, not the licensee's.
2. Verification should hot be performed by "third-party
verification, approved by Microsoft" if such verification is
required by Microsoft it should be done under staff hired by the
Technical Committee and at Microsoft's expense and not through
unknown for profit relationships and agreements between a third
party and Microsoft. The intent of this section is for "proper
operation and integrity of the systems and mechanisms",
Microsoft should be satisfied with the Technical Committee staff
performing these duties unless its goals are other than those
expressed herein.
3. The text "to test for and ensure verification and
compliance with Microsoft specifications for use of the API or
interface, which specifications shall be related to proper operation
and integrity of the systems and mechanisms identified in this
paragraph" refers to to a "Microsoft specifications for
use of the API or interface", these specifications shall be
made available to the licensee
Section J.2.d should read:
(d) agrees to submit, at Microsoft's expense, any computer
program using such APIs, Documentation or Communication Protocols to
the Technical Committe for verification, to test for and ensure
verification and compliance with Microsoft specifications (which
Microsoft shall make available to the licensee) for use of the API
or interface, which specifications shall be related to proper
operation and integrity of the systems and mechanisms identified in
this paragraph.
Comment IV.1 Section IV.A.2.a reads:
"a. Access during normal office hours to inspect any and
all source code, books, ledgers, accounts, correspondence, memoranda
and other documents and records in the possession, custody, or
control of Microsoft, which may have counsel present, regarding any
matters contained in this Final Judgment."
This should be expanded to include electronic forms of
communication in electronic form, not printed form, because it is
extremely hard to sift through information, such as source code, in
non-electronic form.
Section IV.A.2.a should read:
a. Access during normal office hours to inspect any and all
source code, source code control systems, bug or defect databases,
design documents, build procedures, binary codes, books, ledgers,
electronic ledgers, electronic databases, accounts, correspondence,
memoranda, newsgroups, discussions forums, web sites and other
[[Page 28716]]
documents and records in the possession, custody, or control of
Microsoft, which may have counsel present, regarding any matters
contained in this Final Judgment. Access to electronic forms of
information shall be provided in electronic form and not in only in
printed form.
Comment IV.2
Section IV.B.2 describes "The TC members shall be experts
in software design and programming." section IV.B.2.c reads:
"c. shall perform any other work for Microsoft or any
competitor of Microsoft for two years after the expiration of the
term of his or her service on the TC."
Given that Microsoft competes in almost every software market
conceivable, it is a strecth to request two years of non-compete
agreement from the TC member. Two such years of non-compete could be
provided only if Microsoft provides two such years of salary to the
TC member with a yearly inflationary bonus adjustment per year.
Comment IV.3
Section IV.B.8.iii reads:
"(iii) obtain reasonable access to any systems or
equipment to which Microsoft personnel have access;"
This should reads:
(iii) obtain reasonable access to any systems, services or
equipment to which Microsoft personnel have access; services should
include but not be limited to: authentication, file sharing,
discussion forums, newsgroups, chat channels, source code control
systems, bug/defect database systems, design management systems,
document repositories, web sites, etc.
Comment IV.4
Section IV.D.4.d reads:
"d. No work product, findings or recommendations by the TC
may be admitted in any enforcement proceeding before the Court for
any purpose, and no member of the TC shall testify by deposition, in
court or before any other tribunal regarding any matter related to
this Final Judgment."
This is one of the most egregious terms of the settlement. Given
that the Technical Committee has hardly any actual enforcement
duties, other than monitoring, and the Technical Committee actually
being an impartial participant in the actual history of Microsoft's
interaction with third parties and Microsoft's possible violations
of settlement terms, it is astonishing that this term mandates that
the actual work product of the Technical Committee not be admissible
as evidence of the settlement enforment activities.
Microsoft deifnitely over-reached by requesting this, this shows
Microsoft's true intentions (another 5 years without actual
enforcement plus maybe another 5 of further litigation), Microsoft
should be forced to accept instead the contrary of this term.
It is an interesting legal question if any documents related to
presummed antitrust violations are made the work product of the
Technical Committee, then by IV.D.4.d and those documents being
unadmissible, then what other documents could be used to initiate
Court proceedings by the plaintiffs without any such documents being
alleged by Microsoft as being derived from the TC's unadmissible
work. How could the plaintiffs promptly produce equivalent analysis
without it being under this gag order?
Section IV.D.4.d must read:
"d. All work product, findings or recommendations by the
TC must be admitted in any enforcement proceeding before the Court
for any purpose, and any member of the TC is herein explicitly
allowed to testify by deposition, in court or before any other
tribunal regarding any matter related to this Final Judgment."
If the Plaintiffs are not willing to mandate this rewritten
IV.D.4.d they are engaging in blatant dereliction of duty of the
antitrust enforcement offices and duties that they purport to serve.
Comment IV.5
Section IV.D.4.e reads:
"e. The TC may preserve the anonymity of any third party
complainant where it deems it appropriate to do so upon the request
of the Plaintiffs or the third party, or in its discretion."
It should read instead:
"e. The TC must preserve the anonymity of any third party
complainant upon the request of the Plaintiffs or the third party.
Where the TC deems it appropriate to do so, and it has not ben
requested, by the Plaintiffs or the third party, the TC in its own
discretion it may preserve the anonymity of any third party
complainant."
Comment V.1
Section V.A reads:
"A. Unless this Court grants an extension, this Final
Judgment will expire on the fifth anniversary of the date it is
entered by the Court."
The Final Judgement should last longer than five years. The
actual initial antritrust violations by Microsoft occured more than
five years ago and we are stiI1 without any form of remedy. The
legal system works very slowly. By entering this Final Judgement,
and Microsoft continuing its anticompetitive practices, it would
probably take more than five years to resolve those further
complaints. Given that the orignal D.O.J. vs Microsoft settlement
that related to per computer unit licensing was ambiguous enough
that it ended up being mostly ignored and full antritrust
proceedings were required, it wouldn't surprise me if this agreement
which is even more ambiguous and has many more loopholes means at
Microsoft's disposal to circumvent its intent would not result in
many more years of litigation without any real behaviour change on
Microsoft's part.
Mandating an expiration only after Microsoft no longer has
monopoly power in the market of Operating Systems for Personal
Computers for Intel x86 or x86 compatible systems is more
appropriate. Court proceedings or the under the parties agreement
and Court supervision would be required for the settlement to
expire, Otherwise a period longer than 5 years, at least 12 years
should be mandated.
It must be observed how durable has Microsoft's monopoly been
and that it was initially cemented through antitrust violations for
which a Final Judgement with no teeth got the industry into its
current state: 1.
Since the mid 80s it faced no competition. Through illegal
competitive behaviour, it foreclose the market to then Digital
Research's DR-DOS product (an atlernative to Microsoft's
MSDOS). Microsoft has recently settled a separate antitrus suit by
the current owner of the DRDOS assets (Caldera). These original
violations animated the first consent decreed between D.O.J. and
Microsoft 1995. That consent decree was determined to be ambiguous
by the appellate Court in its allowance of integration, and a full
antitrust lititgation ensued.
2. Even though Microsoft's technology significantly lagged
behind the technical abilities of the systems (for example it took
Microsoft 10 years to produce a quasi 32 bit operating system after
x86 Intel 32 bit capable operating systems became available in the
market) no other competitors could enter the market because
Microsoft moved from per-unit licenses to persystem licenses for
each model of system that the OEM manufactured (and this continued
to exclude other vendors from the market). 3. The one significant
threat that Microsoft has faced to its personal computer operating
system monopoly has been the advent of the Internet with open
standards and as a means for delivering applications from server
computers (either through Java or directly as web applications) or
through middleware based applications that could perform on
Microsoft Operating System based personal computers or personal
computers running other operating systems. This one threat has been
completely erradicated from the market. Microsoft will continue to
exclude Java as a viable Interact based application delivery
mechanisms, because this Final Judgement doesn't mandata the
allowance of interoperability of Sun's Java with Microsoft's
Internet Explorer (the Top Level Window definition is purposedly
design to make this impossible). Dereliction of duty now from the
Plaintiffs would mean that even under the most blatant violations of
antritrust laws and astonishing findings of fact, that Microsoft
would escape with a Final Judgement that is too short and very weak
from many perspectives. 12 years of enforcement seem the minimal
time for market conditions to actually have another opportunity to
arise and for actual market change to actually occur.
Comment V.2
Section V.B reads:
"B. In any enforcement proceeding in which the Court has
found that Microsoft has engaged in a pattern of willful and
systematic violations, the Plaintiffs may apply to the Court for a
one-time extension of this Final Judgment of up to two years,
together with such other relief as the Court may deem
appropriate."
The Plaintiffs in any enforcement proceeding shall not be
limited to only one extension of two years. If the Plaintiffs cannot
request as a remedy to future Microsoft's violations of this
settlement, then it is not clear if the Court can actually mandate a
remedy that is not being requested. Additionally, limiting the
length of the actual extension at this time and as part of this
settlement seems beyond belief given that any enforcement will
require the Court participation because there is no actual real
enforcement (other than monitoring by the Technical Committee with
its work
[[Page 28717]]
product later bein unadmissible as court evidence and without the TC
members being allowed as witnesses).
Section V.B should read:
B. In any enforcement proceeding in which the Court has found
that Microsoft has engaged in a pattern of willful and systematic
violations, the Plaintiffs may apply to the Court for an extension
of this Final Judgment for up to ten years, together with such other
relief as the Court may deem appropriate, which is hereby agreed by
the parties that it is acceptable for it to be of any length as the
Court deems appropriate.
Comment VI.1
Definition VI.A reads;
"A. "Application Programming Interfaces
(APIs)" means the interfaces, including any associated
callback interfaces, that Microsoft Middleware running on a Windows
Operating System Product uses to call upon that Windows Operating
System Product in order to obtain any services from that Windows
Operating System Product."
Issues are:
API refers to the interfaces that are used not only by Microsoft
Middleware uses, but any other software uses. APIs are mostly used
by regular applications, narrowing the definition of APIs to what
Microsoft Middleware uses is a contorted way to allow even more
freedoms of circumvention to Microsoft. For example for Microsoft to
perform anti-competitive practices through undocumented interfaces
that its applications use, but that Microsoft's Middleware doesn't
use, thus excluding those APIs (by definition!) from being covered
by this settlement. Amazingly, this definition proposed to define
API to mean something other than Application Programmin Interface,
do you see the word application? It is not Middleware Programming
Interface! Simply amazing!
Definition VI.A should be replaced by the definition in the
Final Judgement entered by Judge Jackson (definition 7.b):
A. "Application Programming Interfaces (APIs)" means
the interfaces, service provider interfaces, and protocols that
enable a hardware device or an application, Middleware, or server
Operating System to obtain services from (or provide services in
response to requests from) Platform Software in a Personal Computer
and to use, benefit from, and rely on the resources, facilities, and
capabilities of such Platform Software.
If another definition is adopted, it should be explained why it
is different from the one proposed.
Comment VI.2
Definition VI.B reads:
"B. "Communications Protocol" means the set of
rules for information exchange to accomplish predefined tasks
between a Windows Operating System Product and a server operating
system product connected via a network, including, but not limited
to, a local area network, a wide area network or the Internet. These
rules govern the format, semantics, timing, sequencing, and error
control of messages exchanged over a network."
Issues:
1. Given that Communication Protocols relevant to this
settlement (given the proposed changes in other sections) also exist
between two personal computers, the definition should reflect that.
2. The set of tasks between the parties in a protocol doesn't
have to be predefined, there are protocols under which the parties
actually sent pieces of arbitrary code to each other to perform
actions that are arbitrary.
Definition VI.B should read:
"B. "Communications Protocol" means the set of
rules for information exchange to accomplish tasks between a Windows
Operating System Product and another operating system connected via
a network, including, but not limited to, a local area network, a
wide area network or the Internet. These rules govern the format,
semantics, timing, sequencing, and error control of messages
exchanged over a network."
Comment VI.3
Definition VI.J reads:
"J. "Microsoft Middleware" means software code
that
1. Microsoft distributes separately from a Windows Operating
System Product to update that Windows Operating System Product; 2.
is Trademarked;
3. provides the same or substantially similar functionality as a
Microsoft Middleware Product; and
4. includes at least the software code that controls most or all
of the user interface elements of that Microsoft Middleware.
Software code described as part of, and distributed separately
to update, a Microsoft Middleware Product shall not be deemed
Microsoft Middleware unless identified as a new major version of
that Microsoft Middleware Product. A major version shall be
identified by a whole number or by a number with just a single digit
to the right of the decimal point."
This is a very astonishing definition of Middleware, nowhere
does it talk about software that provides APIs to other software
components, which is core to any definition of Middleware. The
definition of Non-Microsoft Middleware (VI.M) does seem appropriate
to what Middleware is. Definition 7.q in Judge Jackson's Final
Judgement should be seen for a reasonable defintion of Middleware:
"'Middleware" means software that operates,
directly or through other software, between an Operating System and
another type of software (such as an application, a server Operating
System, or a database management system) by offering services via
APIs or Communications Interfaces to such other software, and could,
if ported to or interoperable with multiple Operating Systems,
enable software products written for that Middleware to be run on
multiple Operating System Products. Examples of Middleware within
the meaning of this Final Judgment include Internet browsers, e-mail
client software, multimedia viewing software, Office, and the Java
Virtual Machine. Examples of software that are not Middleware within
the meaning of this Final Judgment are disk compression and memory
management."
These notions in the VI.J "Microsoft Middleware"
definition are astonishing:
"2. is Trademarked;" other than to provide Microsoft
another escape clause, this term adds absolutely no value. With this
term as part of the definition, Microsoft can rename some component,
not use an earlier trademark name for it, and voila! it is no longer
Microsoft Middleware.
The notion of what Microsoft Middleware is certainly cannot be
tied to the version number given to it! Something is what it is
whatever the name used to refer to it. Something as arbitrary as a
version number and as easily maleable as a version number certainly
cannot be criteria to be used to determine what it is. Contract
writting 101 should certainly tech any lawyers about this. It is
interesting to pose these questions to the Plaintiffs:
What is the major version number of Office XP? What is the
version number of Internet Explorer. NET? What is the version number
of Outlook Express. NET? What is the version number of Windows XP,
Windows CE, Windows ME, Winodows 95 OSR2? Widonws 95? Microsoft
certainly can change interfaces, protocols, APIs, etc in a major,
minor, service pack, hot fix, or any other packaging of its
software. The names or version numbers of such software should not
be used to determine what is contained by them.
Both of these (VI.J.2 and VI.J last paragrpah) should be removed
from the definition. The term VI.J.4 seems to be there only for the
purpose of allowing Microsoft to slice and recombine its software in
such a way as to ensure that the user interface component be the one
called the "Microsoft Middleware" and not the components
that acutally perfrom the traditional Middleware functionality (see
Jacksons definition above) of providing APIs to other software. It
is very intereseting that Middleware is mostly not about user
interfaces but about providing interfaces to other applications,
applications that felly on the Middleware as a platform. Most
Midleware doesn't have a user interface, if it has one it is
incidental.
The term VI.J.4 should be removed.
After these adjustments, Defintion VI.J should just be:
J. "Microsoft Middleware" means software code that
1. Microsoft distributes separately from a Windows Operating
System Product to update that Windows Operating System Product; and
2. provides the same or substantially similar functionality as a
Microsoft Middleware Product; and
Comment VI.4
Definition VI.K reads:
"K. "Microsoft Middleware Product" means
1. the functionality provided by Interact Explorer, Microsoft's
Java Virtual Machine, Windows Media Player, Windows Messenger,
Outlook Express andtheir successors in a Windows Operating System
Product, and
2. for any functionality that is first licensed, distributed or
sold by Microsoft after the entry of this Final Judgment and that is
part of any Windows Operating System Product
a. Internet browsers, email client software, networked audio/
video client software, instant messaging software or
[[Page 28718]]
b. functionality provided by Microsoft software that
i. is, or in the year preceding the commercial release of any
new Windows Operating System Product was, distributed separately by
Microsoft (or by an entity acquired by Microsoft) from a Windows
Operating System Product;
ii. is similar to the functionality provided by a Non-Microsoft
Middleware Product: and iii. is Trademarked.
Functionality that Microsoft describes or markets as being part
of a Microsoft Middleware Product (such as a service pack, upgrade,
or bug fix for Internet Explorer), or that is a version of a
Microsoft Middleware Product (such as Internet Explorer 5.5), shall
be considered to be part of that Microsoft Middleware
Product."
The first issue with this definition is, what is the connection
between VL.K.2 and the presumably subordinate VI.K.2.a and VI.K.2.b?
The sentence under VI.K.2 seems incomplete, it should end in
something like:
"* * * and that is part of any Windows Operating
System Product, and is either:" Other issues are:
1. Throughout the trial Microsoft and depositions (but not
before litigation was brought into action) would not budge on its
pretense incomprehension of what an Internet Browser is. They would
only talk about browsing technologies but would react stupified to
the notion of Integer Browsers, particularly their own, when they
were referred to as "the browser product." It is amusing
and without any sign of legal thouroughness that the Plaintiffs have
come to agree with Microsoft to a definition that uses the term
"Internet browser" without actually providing a
definition for such a term anywhere in the proposed Final Judgement.
Not even what a Internet Browser is being agreed amongst the parties
in the dereliction of duty that this document embodies.
2. Given that this section includes other disputed terms such as
Internet Explorer, it sould seem to be important to include precise
definitions about what these actual terms mean. Maybe when the
Plaintiffs try to do this together with Microsoft they will realize
that only contorted definitions such as the ones for API, Microsoft
Middleware, Microsoft Middleware Product, etc. are arrived at.
3. Again software can be or stop from being a Microsoft
Middleware Product depending on whether it is trademarked or not
(which to no ones surprise is another contorted and unnatural
definition by itself).
4. VI.K.2.b.i refers to "distributed separately by
Microsoft from a Windows Operating System Product", that term
should be precisely defined to mean what it seems to mean, because
Microsoft having argued in court that a sandwich is part of Windows
if they soley dictate so, then they surely would say that any code
"is distributed as part of a Windows Operating System"
even if the code is sent to the end user m a CD-ROM inside a
sandwich not included in the Windows box, or more complexily and
seriously, if it is sent to the user's system through a the Windows
update process.
5. VI.K.2 seems to require that the functionality be "part
of any Windows Operating System Product" but immediately and
sub-ordinated to that clause it also says VI.K.2.b.i
"distributed separately by Microsoft from a Windows Operating
System Product" which seems to contradict the pre-requisite
governing condition (it has to be both part of and not part of?.),
that would be by necessity the empty set, because something cannot
be both part of something and not part of something; thus redering
the whole contorted VI.K definition sense-less.
06. The final paragraph on VI.K states that:
"Functionality that Microsoft describes or markets as
being part of a Microsoft Middleware Product (such as a service
pack, upgrade, or bug fix for Internet Explorer), or that is a
version of a Microsoft Middleware Product (such as Internet Explorer
5.5), shall be considered to be part of that Microsoft Middleware
Product."
as some form of saving grace for the grotesquely constructed
prior definition. Obviously, since the litigation started, Microsoft
has described everything as part of Windows, so one should not wait
standing for Microsoft to ever again market anything in their
anticompetitive campaigns as not being part of Windows.
Definition VI.K should be replaced by:
"K. "Microsoft Middleware Product" means
1. the functionality provided by Internet Explorer, Microsoft's
Java Virtual Machine, Windows Media Player, Windows Messenger,
Outlook Express and their successors in a Windows Operating System
Product, and
2. any functionality that is first licensed, distributed or sold
by Microsoft before, on, or after the entry of this Final Judgment
and that is later made part of any Windows Operating System Product,
this shold include but not be limited to: Internet browsers, email
client software, networked audio/video client software, instant
messaging software; or
3. functionality provided by Microsoft software that
i. is, or at any time preceding the commercial release of any
new Windows Operating System Product was, distributed separately by
Microsoft (or by an entity acquired by Microsoft) from a Windows
Operating System Product; or
ii. is similar to the functionality provided by a Non-Microsoft
Middleware Product Functionality that Microsoft describes or markets
as being part of a Microsoft Middleware Product (such as a service
pack. upgrade, or bug fix for Interact Explorer), or that is a
version of a Microsoft Middleware Product (such as Internet Explorer
5.5), shall be considered to be part of that Microsoft Middleware
Product."
Additionally, reasonable definitions of what these mean should
be included as separate definitions: "Internet Explorer,
Microsoft's Java Virtual Machine, Windows Media Player, Windows
Messenger, Outlook Express and their successors in a Windows
Operating System Product"
Comment VI.5
The word product should be replaced by technology in definition
VI.M because not all middleware is made available in a product form,
some of it might be made freely available or under conditions or
packaging that don't relate directly to it being a product:
"M. "Non-Microsoft Middleware" means a non-
Microsoft software product running on a Windows Operating System
Product that exposes a range of functionality to ISVs through
published APIs, and that could, if ported to or made interoperable
with, a non-Microsoft Operating System, thereby make it easier for
applications that rely in whole or in part on the functionality
supplied by that software product to be ported to or run on that
non-Microsoft Operating System."
It shold read:
"M. "Non-Microsoft Middleware" means a non-
Microsoft software technology running on a Windows Operating System
Product that exposes a range of functionality to ISVs through
published APIs, and that could, if ported to or made interoperable
with, a non-Microsoft Operating System, thereby make it easier for
applications that rely in whole or in part on the functionality
supplied by that software product to be ported to or run on that
non-Microsoft Operating System."
Comment VI.6
The requirement under VI.N.ii that:
"and (ii) of which at least one million copies were
distributed in the United States within the previous year."
Seems excessive, a more reasonable number of one hundred
thousand copies is more appropriate because the benefits of the
settlement can benefit nascent technologies and not just more
established ones.
Comment VI.7
The definition under VI.O of OEM is self centered, to be an OEM,
the OEM has to be a licensee of a Windows Operating System Product.
How do new OEMs come to be if Microsoft refused to license its
products directly or uses intermediaries not under its ownership
control but under agreement control to do actual sublicensing? The
definition of an OEM should be independent of whether they at any
given point in time they have a direct license from Microsoft
(instead of purchasing the product in the channel like smaller OEMs
do). The definition of Covered OEM already takes care of them being
licensees.
"O. "OEM" means an original equipment
manufacturer of Personal Computers that is a licensee of a Windows
Operating System Product."
Should be:
O. "OEM" means an original equipment manufacturer of
Personal Computers.
Comment VI.8
Definition VI.Q reads:
"Q. "Personal Computer" means any computer
configured so that its primary purpose is for use by one person at a
time, that uses a video display and keyboard (whether or not that
video display and keyboard is included) and that contains an Intel
x86 compatible (or successor) microprocessor. Servers, television
set top boxes, handheld computers, game consoles, telephones,
pagers, and personal digital assistants are examples of products
that are not Personal Computers within the meaning of this
definition."
The only concern here is if:
television set top boxes, handheld computers, game consoles,
telephones, pagers, and personal digital assistants are constructed
from Intel x86 or x86 compatible
[[Page 28719]]
processors and Microsoft offers a version Windows for them that
allows any software designed for Personal Computers to work on those
systems, then what those products would be are:
x86 Personal Computer based handheld personal computers; or
x86 Personal Computer based personal digital assistants; or
x86 Personal Computer based personal game consoles; etc
For example today Microsoft offers a fully functional Personal
Computer as its game console, the Microsoft Xbox. If Microsoft were
to offer Windows XP for that system, it would not only be a game
console but also a fully function Personal Computer. Under those
circumstances it should not be excluded from the definition.
Comment VI.9
Defintion VI.R reads:
"R. "Timely Manner" means at the time
Microsoft first releases a beta test version of a Windows Operating
System Product that is distributed to 150,000 or more beta
testers." Without actual evidence about the actual size of the
MSDN subscription base, it seems safer to rewrite this. Addtionally
because of naming issues, the term "beta test version"
should be expandded into its meaning:
"R. "Timely Manner" means at the time
Microsoft first releases a release version of a Windows Operating
System Product through its MSDN developper program solely for the
purpose of developper testing and not intended for end user use for
reasons other than for testing. If Microsoft plans multiple such
test releases, then Timely Manner shall means the release time of a
test release that is at least one year away from the product's final
availabilty to OEMs for pre-installation or for consumer retail
purchase, whichever is earlier."
Comment VI.10
Defintion VI.S reads:
"S. "Top-Level Window" means a window
displayed by a Windows Operating System Product that (a) has its own
window controls, such as move, resize, close, minimize, and
maximize, (b) can contain sub-windows, and (c) contains user
interface elements under the control of at least one independent
process."
This definition is purposedly constructed to prevent:
1. An alternative Jave Virtual Machine (for example from Sun
Microsystems) from being invoked when Java Applets are invoked
through a web page because the window controls are the window
controls of the Internet Browser and the Java Applet executes within
the same window. By Microsoft using this defitintion to condition
where it allows non-Microsoft Middleware to be invoked it controls
the most important way for Java application execution (i.e. under a
more complex web based application). Thus Microsoft having killed
Netscape Navigator's viability proceeds to deny Java the remaining
vehicle that it could have enjoyed under this settlement, i.e. under
Interact Explorer. Of course the Plaintiffs do nothing other than
acquesce under this settlement either because of dereliction of duty
or blatant technical misunderstanding of the issues involved.
2. For example, the "live chart" stock quotes
provided (through Java applets) by www.quote.com or the Chess
application provided (Java applet) by www.chessclub at
http://www.chessclub.com/interface/java.html
http://queen.chessclub.com/sji/index.html
Would simply continue to run under Microsoft Java Virtual
Machine and not under Sun's Java Virtual Machine when installed on
the same system and with all the provisions of the settlement fully
implement (and without any Microsoft violation of the terms
whatsoever).
Thus Microsoft gets to reap the fruits of its anti-competitive
camapaign without having actually conceeded anything of substance
for non-Microsoft Middleware as it relates to Microsoft's Internet
Explorer. The same will occur with network video and audio formats
because Microsoft will make its players not start on a Top Level
Window thus taking control of audio and video formats of Real
Networks players even when the end user has choosen otherwise under
the provisions of this agreement.
The notion of Top Level Window must be extricated from the
settlement and Microsoft should allow invocation of ActiveX based
components of the non-Microsoft Middleware under all circumstances,
in a manner similar under which today third party software is
invoked under a non Top Level Window and displayed within the
Internet Explorer window without a problem (for example see how
Adobe's Acrobat Reader is displayed under a non-Top Level Window).
Microsoft has done already all the technical work in this area, an
it is now only putting contractual road blocks to all these natural
forms of invocation of non-Microsoft Middleware.
Comment VI.10
Definition VI.T reads:
"T. "Trademarked" means distributed in
commerce and identified as distributed by a name other than
Microsoft?? or Windows?? that Microsoft has claimed as a trademark
or service mark by (i) marking the name with trademark notices, such
as ?? or ??, in connection with a product distributed in the United
States; (ii) filing an application for trademark protection for the
name in the United States Patent and Trademark Office; or (iii)
asserting the name as a trademark in the United States in a demand
letter or lawsuit. Any product distributed under descriptive or
generic terms or a name comprised of the Microsoft?? or Windows??
trademarks together with descriptive or generic terms shall not be
Trademarked as that term is used in this Final Judgment. Microsoft
hereby disclaims any trademark rights in such descriptive or generic
terms apart from the Microsoft?? or Windows?? trademarks, and hereby
abandons any such rights that it may acquire in the future."
The main issue throughout this proposed settlement with respect
ot Trademarks is that software is what it is irrespective of what it
is called. The definitions of Microsoft Middleware and Microsoft
Middleware Product where conditioned with them being trademarked
(under this definition) as a means to provide Microsoft and escape
clause to make the no longer Microsoft Middleware (and Microsoft
Middleware Products). That concept should completely go away. If it
doesn't then the defintion of Trademarked shold be exactly the legal
defintion understood under the law and not this one.
Comment VI.11
Defitions VI.U reads:
"U. "Windows Operating System Product" means
the software code (as opposed to source cede) distributed
commercially by Microsoft for use with Personal Computers as Windows
2000 Professional, Windows XP Home, Windows XP Professional, and
successors to the foregoing, including the Personal Computer
versions of the products currently code named "Longhorn"
and "Blackcomb" and their successors, including
upgrades, bug fixes, service packs, etc. The software code that
comprises a Windows Operating System Product shall be determined by
Microsoft in its sole discretion."
The list must also include Windows 95, Windows 98, Windows SE,
Windows ME (collectively known as Windows 9x) and Windows NT 4,0 and
all their service releases. The current installed base is mostly
made out of these products. By purposedly excluding them Microsoft
and the Plaintiffs allow Microsoft to continue to prevent non-
Microsoft Middleware from fairly competing in the broad installed
base and forces competition to only occur under Microsoft's
controlled evolution of the market. It does so by not allowing
competition from the broad installed base by not affording the
benefits of the settlement to that gigantic installed base (i.e. all
the versions of Windows 9x).
MTC-00029686
P.O. Box 369
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing you today to express my opinion in regards to
Microsoft. I fully support the settlement that was reached in
November. In my opinion, the litigation that has continued for the
last three yearn is a waste of precious resources that should be
focused on more important issues. I am chagrinned that many state
Attorneys General have continued suing Microsoft. I sincerely hope
there, will be no further action against Microsoft at the federal
level.
This settlement is fair and reasonable. Microsoft has agreed to
carry out all provisions of this agreement, Under this agreement,
Microsoft remains together as a company, while following procedures;
that will make it easier for companies to compete. Microsoft has
agreed to disclose information about certain internal interlaces in
Windows;. Furthermore, Microsoft agreed to, disclose any protocols
implemented in Windows" operating system products.
This settlement will benefit the economy and the technology
industry as a whole. Please support this settlement so this dispute,
can finally be resolved. Thank you for hearing my opinion.
Sincerely,
MTC-00029687
January 24, 2002
[[Page 28720]]
Attention: Renata Hesse
U.S. Department of Justice.
Antitrust Division
601 D Street NW Suite 1200
Washington, DC 20530
Deal Ms. Hesse
Though I am a current member of the Kansas ago Board of
Education, I am writing this letter personally and not as a
representative of the Kansas State Board of Education. Before you is
a fair proposal for settlement of Microsoft case. In a sincere
a??empt to close the door on a highly publicized legal embattlement,
Microsoft offers to reveal technical information to comp??titors,
enabling other companios to write software that actually works with
Microsoft's operating products. Microsoft even offers, at its own
expense, a failsafe in the form of an impartial review board which
will have clearance to every facel of Microsoft's business dealings.
This means software customers will have the ability to smoothly
access competing software products on the same desktop, just like
they are part of Microsoft Office.
Though Microsoft may surely have hoped for a solid win in this
case, Bill Gates himsel recently recognized that accepting the
strict rules and regulations imposed by the settlement is "the
right thing to do", benefiting the consumer, the tech sector
and the economy. We may hate to admit it, but Gates is right again.
Settlement is the right thing to do. Thank you for your
consideration of my opinions.
Sincerely,
Dr. Steve Abrams
MTC-00029688
January 27, 2002
Attorney General John Ashcroft
US Department of Justice
Washington, DC 20530
Dear Mr. Ashcroft,
I would like to express my appreciation to the Justice
Department for allowing we as Americans to comment on the Microsoft
antitrust case. I am a part of the tech industry and am in favor of
the settlement in its current form.
I would like to express how happy I am with Microsoft products.
Microsoft ha3 changed the way Americans do business. I think most
Americans believe that the terms and conditions of the settlement
are decent and just, and they are right. The settlement covers all
sorts of parts of Microsoft's operation, from business practices to
design changes.
Please use your power to end this case in an expeditious manner.
It will benefit the country and the IT industry if you do so.
Sincerely,
Dean Martin
Co: Representative Tammy Baldwin
MTC-00029689
Jim Atkins
5569 Pinebrook Lane
Winston Salem, NC 27105
January 21, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am amongst those who believe that the Microsoft antitrust case
should have never gone to trial. Nevertheless 1 would like you to
support the settlement that was achieved in this case. Continuation
of this case would be harm fid to Microsoft, and needlessly cost the
Justice Department money in a time of a dwindling government
surplus.
Justice Department officials have approved and agreed to the
settlement in this case. The settlement will make it easier for non-
Microsoft software to be installed on Microsoft platforms, giving
competitors a better opportunity to offer their products to the
public. However for some opponents of the settlement this is not
adequate. It must be kept in mind that special interests will
pressure officials to have this case re-opened.
I appreciate you taking the time to review my views on this
issue. Once again I would like to stress to you my belief that this
cage has undoubtedly become protracted and should be terminated.
Please back the settlement.
Sincerely,
Jim Atkins
cc: Representative Mel Watt
MTC-00029690
Michael DiBello
15 Orchard St.
Syosset, NY 11791-2712
January 26. 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I feel that the settlement made between Microsoft and the
Department of Justice is reasonable and that the litigation against
Microsoft needs to be brought to an end. The money and time that has
been spent on this suit doesn't seem to be worth what will be gained
if this continues. The terms of the settlement, if finalized, will
open up competition to other companies, which will in turn benefit
the consumer, Not only will there be more choice but also hopefully
there will also be more reasonable prices. Because of the terms of
the settlement, Microsoft is going to have to make Windows internal
code available to other companies so they can design their software
to be compatible. Microsoft will be reimbursed for this, which is
fair for all sides involved.
Overall I feel that the settlement should stand the way it is
and that any further litigation against Microsoft would prove to be
wasteful. Thank you for allowing me the opportunity to express my
opinions.
Sincerely,
Michael DiBello
MTC-00029691
January 23, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft.
The Department of Justice was absolutely wrong in wanting to
slice Microsoft into separate parts. Three years have produced
public resentment and gravely hurt the computing Industry, all for
the benefit of those who won't ever be able to compete with
Microsoft. The settlement Microsoft agreed to with the federal
government must go forward. It is more than generous, and is
obviously better than forcing Microsoft back into court, where the
only winners are the attorneys representing both sides of this case.
Microsoft concedes to give up more than enough to promote far
more competition among the computer makers and software developers
who want a more level playing field. Agreeing to open Windows for
further application development, Windows and non-Windows alike, will
produce far more innovations than ever before, and will show the
consumer that they are not at the whim of this industry giant,
creating more individually-based options and configurations.
I urge the Department of Justice to see to it that Microsoft is
given unprejudiced consideration by allowing them to return to
business NOW. Do not continue to waste the incredible innovation and
efforts of Microsoft, by choking them in more court proceedings.
They have been the most industrious and prolific business since that
of Ford Motors. The ramifications are far reaching, for the better
good, by supporting the position of this settlement with Microsoft.
MTC-00029692
Mr. Todd Kangas
21800 Dempsey Rd
Leaven worth, KS 66048
U.S. Department of Justice, Antitrust Division
C/O Renata Hesse
601 D Street, NW, Suite 1200
Washington, DC 20530
January 38, 2002
Dear Ms. Hesse:
I would like to share a few thoughts of mine about the Microsoft
case that you are currently reviewing as pan of the public comment
period for the suit. Microsoft and Bill Gates have paid their
penance. Throughout this case, Microsoft has been portrayed as an
evil corporate citizen, but in my opinion this accusation does not
stand up to reality.
In addition to Microsoft's corporate giving, Bill Gates has
established the largest charitable foundation in the world. This
foundation is making significant progress by donating hundreds of
millions of dollars every year to assist in feeding the hungry in
third world countries, preventing diseases, and educating youth in
America. Lets put an end to this lawsuit and allow the success of
Bill Gates and other high-tech entrepreneurs continue to, not only
boost the economy of our country, but to aid to the underprivileged
worldwide through charitable giving.
Sincerely,
Todd Kangas
MTC-00029693
Kenneth R. Sone
195 N Harbor Drive Apt. 5307
Chicago, IL 60601
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
[[Page 28721]]
Washington, DC 20530
Dear Mr. Ashcroft:
I want to take a moment to give my feelings on the settlement
reached last year between Microsoft and the Department of Justice. I
believe the settlement is fair to both sides and should continue t6
be supported by the federal government.
The settement is exlensive aggressive, and covers all the issues
that were m dispute. Microsoft has agreed to many concessions for
the ??ake of wrapping up this suit and moving forward One example is
Microsoft agreeing to document and disclose for use by its
competitors various interfaces that are internal to Windows"
operating system products. This is a first for an antitrust
settlement and reveals the strength of the agreement on the
government's part.
I believe settling this case and ending the litigation can only
help the economy during this difficult period. It will bring some
certainty to the computer industry and lessen the uncertainty about
where the litigation may he heading I commend your office for the
efforts so far and hope your support for the settlement remains
strong.
Sincerely,
MTC-00029694
FAX
DATE: January 28, 2002
TIME: 9:00 AM
ATTENTION: Attorney General John Ashcroft
COMPANY: US Department of Justice
FAX NUMBER: (202) 307-1454
FROM: Glenn R. Hasman
SUBJECT: Microsoft
NUMBER OF PAGES: 2 (including this cover sheet)
8797 Treetop Trail
Broadview Heights, OH 44147
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
This is to give my approval to the ending of the antitrust case
brought against Microsoft. In my opinion, it has gone on far too
long and we need to get back to business. We talk about the economic
downturn but keep the one company that could probably pull us out of
it, tied up in litigation.
From what I understand of the agreement, Microsoft has been more
than fair in trying to settle this case. Microsoft has agreed to
terms that go far beyond the products and procedures that were
actually at issue in the original case; Microsoft has agreed to
grant computer makers broad new rights to configure Windows so as to
promote non-Microsoft software programs. Microsoft has further
agreed to design future versions of Windows with a mechanism to make
it easier to promote non-Microsoft software.
It is in the best interests of America, and the world, if we put
this case behind us and get back to business. Please give your
support to this agreement.
Sincerely,
Glenn R. Hasman
MTC-00029695
1-28-02
Ms. Renata B. Hesse
Please approve the microsoft settlement.
Harry Westenberg
13008 W. Willow Creek
Huntley, IL
60142
MTC-00029696
PO Box 135
Monterey, MA 01245
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Attorney General Ashcroft:
I would like to take this opportunity to express my personal
opinion about the government's role in Microsoft's freedom to
innovate The United States Department of Justice and Microsoft
reached an agreement at the beginning of this past November and that
is where the litigation should end. The settlement was fair;
allowing Microsoft to continue doing business while allowing
competitors to sue Microsoft if they do not think the company is
complying with the agreement.
I believe no more litigation should be enacted at the federal
level. With a reasonable settlement already reached, further action
by our government would only waste more time and money. !n this time
of economic recession, these resources could be used in a much more
productive manner In these trying times, we need to support our
homeland companies and allow them to continue providing high quality
products to the marketplace both nationally and internationally.
This settlement allows our companies to actually return to the
success that the IT industry enjoyed four years ago. Microsoft will
now be making future versions of Windows that will include a way to
greatly simplify the process of adding arid removing non-Microsoft
programs from the Windows operating system.
In a battle that already has been fought and won, I believe it
would be in our best interest not to continue suing Microsoft at the
federal level Let us get our economy back on track and start
supporting products and companies that me made in the USA. Thank you
for you time.
Sincerely,
J.T. Buchar
MTC-00029697
3312 Zimmer Road
Williamston, MI 48895
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I was quite pleased to learn that the federal government and
Microsoft reached a settlement in their three-year anti-trust
lawsuit. I am hopeful that this settlement will become final in the
near future so the negative effects that is has had will cease, and
the technology industry can see a resurgence.
This will be made possible by the various concessions that
Microsoft made in order to settle this dispute. A three person
technical committee will oversee Microsoft's business operations
from this point forward, and any company that has a complaint of
anti-competitive behavior against Microsoft will be able to be heard
immediately. Competition will increase, and consumers will have more
choices in the marketplace. I see no reason to pursue this matter
beyond this point. I want to thank you for your decision to stop
this litigation. I am certain it will have positive effects on the
industry as well as the whole economy, and I look forward the
settlement becoming final in the weeks ahead.
Sincerely,
Rudy Key
MTC-00029698
6402 Dolphin Shores Drive
Panama City Beach, FL 32407-5474
January 22, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
Three years ago when Microsoft was first brought to trial, my
fear was that the company wouldbe split up and the American
technology industry would begin to suffer. Now, a settlement hasbeen
proposed that would allow Microsoft to remain whole, and I believe
that would be in thebest interest of the consumer for the Justice
Department to approve the settlement and move on.I do support limits
on Microsoft's conduct to safeguard our antitrust laws, but I think
theserestrictions are a bit harsh. Microsoft agreed to terms and
conditions in the settlement that extendto procedures and
technologies that were not found to be unlawful by the Court of
Appeals.Microsoft has agreed, among other things, to disclose source
code and interfaces from theWindows operating system to its
competitors for their use in developing Windows-compatiblesoftware.
Microsoft has also agreed to license the Windows operating system to
twenty of thelargest computer makers at the same price. In the
interest of wrapping up the case, Microsoftagreed to these and more
terms, and I believe that, regardless of the harshness of
certainobligations, it is better to settle now and let things get
back to normal than to continue litigationand risk further economic
damage.
This has gone on long enough, and it is time to move on.
Microsoft has made the necessarychanges to prevent further antitrust
violations, and I do not believe further litigation is
eithernecessary or constructive. I ask you to endorse the
settlement.
Sincerely,
Jeannie Fitzsimmons
cc: Representative Jefferson Miller
MTC-00029701
ARTHUR F. HARDEN
1389 OUTLOOK DRIVE WEST
MOUNTAINSIDE, NEW JERBEY 07092
Tel.& FAX # 908-233-7737
DOJ
ATT. Ms. RENATA B. HESSE
202-307-1454,
[[Page 28722]]
GENTLEMEN:
I SUPPORT THE PROPOSED SETTLEMENT OF THE MICROSOFT LAWSUIT.
AETHUR F. HARDEN
JANUARY 26, 2002
MTC-00029702
Rhonda Green
11920 Brown Road
Thayer, KS 66776
United States Department of Justice
Antitrust Division
Attn: Renata Hesse
601 D Street, NW, Suite 1200
Washington, DC 20330
Dear Ms-Hesse;
As the parents of two children in a small, rural Kansas school,
I was excited to hear about theprospects of Microsoft donating
millions of dollars worth of computer systems and learningprograms
to schools like the ones my children attend.I have seen first hand
the value of computers in advancing the education, of my children
and Ifirmly believe that, if accepted, this settlement could prove
to be very beneficial to the educationof America's children.
The government has wasted enough taxpayer dollars pursuing a
problem that never existed. It ismy hope that this fair settlement,
which has levied steep and taxing financial burdens onMicrosoft,
will end soon.
Sincerely,
Rhonda Green
MTC-00029703
January. 23, 2002
Ms. Renata Hesse, Anti-Trust Division
U.S. Department of Justice
601 D Street Northwest
Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
I am writing to you to express my feelings regarding the lawsuit
filed against Microsoft by JanetReno. I understand that the Bush
administration has proposed a settlement that has been agreedto by
Microsoft and several of the states involved in the lawsuit.
I want to add my voice to those who believe it is time m put
this lawsuit to bed. It is drainingvaluable resources from
government coffers and unnecessarily burdening one of
America'sleading technology companies. I urge you to approve the
settlement proposed by the Bushadministration.
Sincerely,
Mrs. Floyd Powers
Retired Neosho County Employee
5435 Highway 47
Thayer, KS 66776
MTC-00029704
745 Norman Drive
North Bellmore, NY 11710
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing this letter in support of Microsoft. As a
businessman, I believe there is no place forGovernment in free
enterprise. I have a lot of respect for Microsoft and saw the
economy flourishas Microsoft grew. It's no coincidence that the
technology, sector, technical stocks andemployment numbers are down
while this antitrust case is going on. While it may not be thecause,
it sure is the contributor.
Microsoft agreed that if a third party's exercise of any options
provided by the settlement wouldinfringe on the rights of any
Microsoft intellectual property, they will provide the third party
witha license to the necessary, intellectual property on reasonable
terms. That seems more than fair tome. Microsoft agreed to provide
computers in the school, but all the states rejected it since
itwould infringe on Apple's ability to continue providing computers
in the school. Here in NassauCounty, we are in desperate need of IBM
compatible computer's, especially since we use oldtechnology, like a
microfiche. It's a shame we can't access any.
It's obvious to me that the competition and the states are only
pursuing litigation because theywant "a piece of the
action." If the consumer likes the products of a company
"a", and thecompany "a" gains a large market
share, it's not fair for other companies to sue company
"a" justbecause consumers like their product. Your help
in resolving this mailer is greatly appreciated.
Sincerely,
Stuart Muchnick
MTC-00029705
GBG STRATEGIES, INC.
100 FANEUIL HALL MARKETPLACE
BOSTON, MA 02109
Leo T. Goodrich
President
January 25, 2001
I am writing to have my thoughts on the proposed settlement
between Microsoft and the UnitedStates Department of Justice entered
Into the record in accordance with the Tunny Actsrequirement of
public comment on such settlements.
I think the settlement plan is a good one, and one that reaches
the necessary balance betweenantitrust enforcement and the need for
as competitive a software market as the U.S. economy canhave.
Consumers benefit from a competitive market in ways that; the kind
of regulationspreviously argued in this case would nullify. Whereas
a free and competitive market will drivedown Dries and hasten the
pace of innovation, a heavily regulated market, or a software
marketIncluding a cawed-up Microsoft would slow the pace of
Innovation and allow companies to siton their hands and let prices
gradually rise.
Consumers deserve the best high tech market available to them,
and the best high tech market isthe one that innovates. The
Innovates of the last decade were primarily responsible for
thecreation of Jobs, Investment, and wealth at rates never before
witnessed In any economyanywhere. The success of the
"New" Economy In the 1990s was not a boomlet, in my
view, but aharbinger of flings to come In the future, if the
government will allow consumers andentrepreneurs to successfully
guide the market toward higher levels of competition andInnovation.
I hope my thoughts can be entered into the record and also hope
the court fit to approve thesettlement proposal. It is the best way
for the economy to start to put this recession behind it andbegin to
build for the future.
Sincerely,
Leo T. Goodrich
MTC-00029706
NEWTON REAL ESTATE RESOURCE GROUP
Matthew D, Adams
January 25, 2001
I am writing to have my thoughts on the proposed settlement
between Microsoft and the United States Department of Justice
entered into the record in accordance with the Tunny Act's
requirement of public comment on such settlers.
I think the settlement plan is a good one, and one that reaches
the necessary balance between antitrust enforcement and the need for
as competitive a software market as the U.S. economy can have.
Consumers benefit from a competitive market in ways that the kind of
regulations previously argued in this ease would nullify. Whereas a
free and competitive market will drive down prices arid hasten the
pace of innovation, a heavily regulated market, or a software market
including a carved-up Microsoft would slow the pace of innovation
and allow companies to sit on their hands and let prices gradually
rise.
Consumers deserve the best high tech market available to them,
and the best high tech market is the one that innovates. The in
innovations of the last decade were primarily responsible for the
creation of jobs, investment, and wealth at rates never before
witnessed in any economy anywhere. The success of the
"New" Economy in the 1990s was not a boomlet, in my
view, but a harbinger of things to come in the future, if the
government will allow consumers and entrepreneurs to successfully
guide the market toward higher levels of competition and innovation.
I hope my thoughts can be entered into the record and also hope
the court sees fit to approve the settlement proposal. It is the
best way for the economy to start to put this behind it and begin to
build for the future.
Sincerely,
Matthew D. Adams
MTC-00029707
7831 El Pastel Drive
Dallas, TX 75248
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing today to encourage the Department of Justice to
accept the Microsoft antitrust settlement. This issue has been
dragging on for entirely to long now and I feel that the current
settlement before the DOJ is fair and just. I would like to see the
government accept it. Many people think that Microsoft has gotten
off easy, in fact they have not. In order to put the issue behind
them Microsoft has agreed to many concessions. Microsoft has agreed
to give computer makers the flexibility to install and promote any
software that they see fit.
[[Page 28723]]
Microsoft has also agreed not to enter into any agreement that would
obligate any computer maker to use a fixed percentage of Microsoft
software. Also, Microsoft has agreed to license its products at a
uniform price to computer makers no matter how much that computer
maker uses Microsoft products.
What we need to remember is that Microsoft products are very
affordable and offer many advantages over other products, if one
desired, they could purchase another operating system ie; Linux
etc., but the fact is most people choose Microsoft Windows over
others. With the economy stalling, we need to move forward not
backward, many people have spent large amounts of time and money to
be trained on Microsoft products, lets not forget them.
Sincerely,
Dameon Rustin
co: Representative Richard Armey
MTC-00029708
Brad D. Houghtaling
230 Wellington Road
Syracuse, NY 13214-2226
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, N-W
Washington, DC 20530
Dear Mr. Ashcroft:
I am violently opposed to the antitrust lawsuit against the
Microsoft Corporation, I personally feel that the suit should be
dropped, and Microsoft left alone. This case defies the very ideal
of free enterprise upon which this nation has been built, and this
case does nothing but damage the entrepreneurial spirit that has
heretofore been celebrated in this nation.
I understand that Microsoft has agreed to the settlement that
has been reached in this case because it would simply like to see
this litigation end. While I do not agree that Microsoft should have
to settle I understand their desire to see the end of this lawsuit.
The terms of the settlement, while a little harsh, are not overly
objectionable. Microsoft has agreed to design all future versions of
its Windows operating system to be compatible with the products of
its competitors, along these same lines Microsoft will disclose
certain segments of source code to its competitors enabling them to
design products that work within Windows, it is this term that I
find most objectionable. I believe that the parties trying to
perpetuate this litigation are seeing only their own political ends
rather than a fair solution to this dispute.
Please ensure the passage of this settlement. American business
needs 3,our support. Thank you.
Sincerely,
Brad Houghtaling
MTC-00029709
808 Beazer Lane
Antioch, TN 37013
January. 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am of the opinion that the settlement that has recently been
reached between Microsoft and the Department of Justice is fair and
reasonable, and I would like to see it implemented as soon as
possible.
The only reason why I do support this settlement is because it
brings an end to the ludicrous litigation against Microsoft. The
governments, both stale and federal, are legally pursuing Microsoft
for one reason and one reason only, for the cash. It is ironic that
they have wasted millions of dollars taking Microsoft to court, and
do not have much to show in return. The economy is bad enough; we do
not need our tax dollars going towards the prosecution of a company
that has been so beneficial to the American economy. I hope that the
ongoing technical oversight committee, which is a result of the
settlement and will monitor Microsoft's compliance with that
settlement, will satisfy the government and all other anti-Microsoft
entities. A settlement has been reached, we must now put this issue
behind us and move on to more pressing issues. Thank you.
Sincerely,
Carl Beck
MTC-00029710
COMMERCIAL REAL ESTATE SERVICES
1005 Boylston Street
P.O. Box 610259
Newton, MA 02461-0259
Thomas P. Godino
January 25, 2001
I am writing to have my thoughts on the proposed settlement
between Microsoft and the United States Department of Justice
entered into the record in accordance with the Tunny Act's
requirement of public comment on such settlements.
I think the settlement plan is a good one, and one that reaches
the necessary balance between antitrust enforcement and the need for
as competitive a software market as the U.S. economy can have,
Consumers benefit from a competitive market in ways that the kind of
regulations previously argued in this case would nullify. Whereas a
free and competitive market will drive down prices and hasten the
pace of innovation, a heavily regulated market, or a software market
including a carved-up Microsoft would slow the pace of innovation
and allow companies to sit on their hands and let prices gradually
rise.
Consumers deserve the best high tech market available to them,
and the best high tech market is the one that innovate. The
innovations of the last decade were primarily responsible for the
creation of jobs, investment, and wealth at rates never before
witnessed in any economy anywhere. The success of the
"New" Economy in the 1990s was not a boomlet, in my
view, but a harbinger of things to come in the future, if the
government wilt allow consumers and entrepreneurs to successfully
guide the market toward higher levels of competition and innovation
I hope my thoughts can be entered into the record and also hope the
court sees fit to approve the settlement proposal. It is the best
way for the economy to start to put this recession behind it and
begin to build for the future.
Sincerely,
Thomas P. Godino
MTC-00029711
January 24, 2001
I am writing to have my thoughts on the proposed settlement
between Microsoft and the United States Department of Justice
entered into the record in accordance with the Tunny Act's
requirement of public comment on such settlements.
I think the settlement plan is a good one, and one that reaches
the necessary balance between antitrust enforcement and the need for
as competitive a software market as the U.S. economy can have.
Consumers benefit from a competitive market in ways that the kind of
regulations previously argued in this case would nullify. Whereas a
flee and competitive market will drive down prices and hasten the
pace of innovation, a heavily regulated market, or a software market
including a carved-up Microsoft would flow the pace of innovation
and allow companies to sit on their hands and let prices gradually
rise.
Consumers deserve the best high tech market available to them,
and the best high tech market is the one that innovates. The
innovations of the last decade were primarily responsible for the
creation of jobs, investment, and wealth at rates never before
witnessed in arty economy anywhere. The success of the
"New" Economy in the 1990s was not a boomlet, in my
view, but a harbinger of things to come in the future, if the
government will allow consumers and entrepreneurs to successfully
guide the market toward higher levels of competition and innovation.
I hope my thoughts can be entered into the record and also hope
the court sees fit to approve the settlement proposal. It is the
best way far the economy to start to put this recession behind it
and begin to build for the future.
Sincerely,
James J. Campbell
MTC-00029712
VONDA WIEDMBR
ROUTE 1, Box 545
MADISON, KS 66860
January 15, 2002
Renata Hesse
Trial Attorney
U.S. Department of Justice
601 "D" St., NW--Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
All too often in our country it seems our government has taken
aim at a successful company under the auspices of protecting the
American people. Unfortunately, it is the government's actions that
are truly hurting Americans. When the Department of Justice first
began its pursuit of Microsoft it claimed it was doing so to protect
consumers from some harm created by Microsoft. The reality could not
be further from the truth.
The facts are simple really. Microsoft leads its industry
because it has developed ways to meet consumers needs better then
its competition. This is the American way! Most successful companies
strive to be the very best in their field and compete hard with
[[Page 28724]]
others in their industry. Certainly Microsoft is no exception.
Punishing them for being the best is not appropriate. The United
States government and the Microsoft's competitors have yet to
provide proof of how consumers have been harmed by Microsoft.
However, as a taxpayer T can see where I have been harmed Countless
tax dollars have been spent in the pursuit of this case at o time
when our economy is constricting. I view this a real example of
harm.
Please accept the settlement offer.
Sincerely,
Vonda Wiedmer
MTC-00029713
Matthew Alfieri
7 Northfield Gate
Pittsford, NY 14534
January 27, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
The intention of this letter is so that I may go on record as
being a staunch supporter of the proposed agreement that was reached
between Microsoft and the Department of Justice. The litigation
between these two has gone on for long enough, more than three years
actually. It is time to put this issue to rest and move on.
The settlement actually goes further than Microsoft would have
liked, but they decided to settle because it was in the best
interests of the IT industry and the American economy. The
settlement mandates that Microsoft make future versions of the
Window, operating system to include a feature that makes it much
easier for computer makers and consumers to remove Microsoft
software programs from Windows and then replace it with non-
Microsoft software. This completely opens the industry up to much
more competition, and the companies producing the competing software
will need to deliver a "Grade A" product to the market,
or people will simply not buy it.
Everything is now in place for a stronger IT industry and a
healthier economy. I support this settlement because it looks out
for everyone's best interests. Thank you.
Sincerely,
Matthew Alfieri
MTC-00029714
January 27, 2002
Renata Hesse
Trial Attorney
Anti-Trust Division
U.S. Department of Justice
601 D St., NVV
Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
I appreciate the opportunity to voice my opinion on the proposed
settlement before you in the Microsoft antitrust lawsuit.
As a Kirkwood community college computer instructor, I have the
opportunity to teach the Microsoft Office suite to my students. I
have seen first-hand the advances Microsoft has made in the software
industry. Everyday, my students learn more about how to harness
technology and use it to their advantage to work more efficiently.
Microsoft changed the way America, and the world for that
matter, does business. As I understand it, most of the world's
computer users work on Microsoft's Windows software. That is truly
an amazing accomplishment. Success on that scale only comes when a
company continues to produce an outstanding product year in and year
out.
I urge you to accept the settlement before you on behalf of all
taxpayers. Too much time and too many resources have been spent
trying to tear down a company that has enriched our national economy
and aided businesses worldwide. Enough is enough.
Sincerely,
Marie Schulte
MTC-00029715
Leonard R. Beard
841 East 12th Street
Crowley, La. 70526
(337) 781-2317
January 28,2002
Renata Heese
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington DC 20530
FAX: 202-616-9937
RE: Settlement of U.S. v. Microsoft
Nearly 30 million dollars in taxpayer funds have been spent on
this case. The time and expense of this case combined with the
uncertainty it has led to in the technology sector leads me to
believe that now is time that we settle this case.
I do appreciate the government's efforts in protecting
consumers. The settlement is appropriate in scope because it
addresses only those items upheld by the courts and it provides for
close monitoring of future Microsoft operations.
Let's get the technology companies back to competing, which will
help consumers and our economy. Thanks for considering my views on
this matter.
Sincerely,
Leonard Beard
MTC-00029716
STEPHEN J. OATS 1
WILLIAM M. HUDSON, III 1,2
HENRY ST. PAUL PROVOSTY 1
EDGAR D. GANKENDORFY 1
KENNETH M. HENKE
CLIFTON O. BINGHAM, JR. 3
PATRICK B. MCINTIRE
LAWRENCE E. MARINO 2
HENRY A. HERNAKD. JR.
CRAIG T. BROUSSARD
MICRHELLE K. BUFORD
WALTER R. WELLENREITER
ROBIN L. JONES
CHRISTOPHE B. SZAPARY
ANDREW D. RENTON
OF COUNSEL
OSCAR E. KEED, JR.
VICTORIA A. GUIDRY
STANLEV. B. BLACKSTONE 1.3
CHRIS M. TREPAGNIER 1
OATS & HUDSON
ATTORNEYS AND COUNSELORS AT LAW
A PARTNERSHIP OF PROFESSIONAL CORPORATIONS
SUITE 400
GORDON SQUARE
100 EAST VERMILION STREET
LAFAYETTE, LOUISIANA 70501
TELEPHONE (337) 233-1100
FACSIMILE (337) 233-1178
[email protected]
January 27, 2002
SUITE 200
530 NATCHEZ STREET
NEW ORLEANS, LOUISIANA 70130
TELEPHONE (504) 527-0960
FACSIMILE (504) 524-2823
SUITE 200
BELISLE BUILDING
350 THTRD STREET
BATON ROUGE, LOISTANA 70801
TELEPHONE (225) 383-9993
FACSIMILE (225) 383-6993
1 PROFESSIONALIAW CORPORATION
2 ALSO ADMHTTD IN TEYAS
3 BOARD C??TIFIED TAX AT??
TO: Renata Heese, Esq.
FROM: Craig T. Broussard
FAX NO.: 202-616-9937
HARD COPY SENT: No
RE: U.S. v. Microsoft
OUR FILE: FE
TOTAL NO. OF PAGES (INCLUDING COVER SHEET): 2
MESSAGE: Please see the attached.
If you experience any problems with this transmission, please
call Dina at the telephone number listed above.
STEPHEN J. OATS"
WILLIAM M. HUDSON, III??
HENRY ST. PAUL PROVOSTY 1
EDOAR D. GANKENDORPP 1
KENNETH M. HBNKB 1
CLIFTON O. BINGHAM. JR. 1
PATRICK B. MCINTIHB
LAWRENCE E. MARINO??
HENHY A. BERNARD, JR.
CRAIG T. BROUSSARD
MICHELLB K. BUFORD
WALTER R. WELLBNREITER
ROBIN L. JONES
CHRISTOPHE B. SZAPARY
OP COUNSBL
OSCAR B. REED, JR.
STANLEY B. BLACKSTONE 1,2
VICTOHIA A. GUIDRY
CHRIS M. TREPAONIRR 1
OATS HUDSON
ATTORNEYS AND COUNSELORS AT LAW
A PARTNERSHIP OP PROFESSIONAL CORPORATIONS
SUITE 400
GORDON SQUARE
100 EAST VERMILJON STREET
LAFAYETTE, LOUISIANA 70501
TELEPHONE (337) 233-1100
FACSIMILE (337) 233-1178
January 22, 2002
SUITE 200
530 NATCHEZ STREET
NEW ORLEANS, LOUISIANA 70130
TELEPHONE (004) 527-0960
FACSIMILE (504) 524-2823
SUITE 200
BELISLE BUILDING
350 THIRD STREET
BATON ROUGE. LOUISIANA 70801
TELEPHONE (220) 383-9993
FACSIMILE (225) 383-0993
1 PROFESSIONAL LAW CORPORATION
2 ALSO ADMITTED IN TEXAS
[[Page 28725]]
3 BOARD CERTIFICD TAX ATTORNEY
Renata Heese
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington DC 20530
FAX: 202-616-9937
RE: Settlement of U.S. v. Microsoft
I am of the opinion that it is in the best interest of consumers
and all involved that this case be settled once and for all.
It is my understanding that the settlement addresses the
findings of the court and provides for future operations by
Microsoft that will avoid any monopolistic practices. That is good
news for all parties.
The bottom line is that enough tax dollars have been spent in
this effort and now is the time for our technology companies to
return to the marketplace battlefield. That would be the best news
for consumers and our economy.
I appreciate your consideration of my views on this matter.
Sincerely,
MTC-00029717
ATTN: Ms. Renata B. Hesse (DOJ)
202-307-1454
Ms. Renata,
This note is to inform you & the Dos that I love support the
Microsoft Settlement. Please "Approve the Microsoft
Settlement".
Thank you
MR & Mrs K. Ni??henke
K. Ni??
MTC-00029718
January 28th, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Fax 202-616-9937
[email protected]
Dear Ms. Hesse:
As a co-owner of medium size construction company in central
Missouri, I have observed the Microsoft lawsuit from the beginning.
It appears to me from the press that this case has come full circle
and now is the time settle. Based upon my review of the summary of
the lawsuit it would appear that the Department of Justice has
garnered a fair compromise with Microsoft. While I cannot
specifically defend the software glant's business practices, I
remain skeptical that this case should have been dismissed some time
ago.
Now is the time to settle the case against Microsoft. Thank for
allowing me to offer my opinion.
Sincerely,
Chris Hentges
MTC-00029719
Mr. Kenneth Cordon
821 W. Walnut Street
Chanute, KS 66720
January 17, 2002
U.S. Department of Justice
Anti-Trust Department
Attn: Renata Hesse
601 "D" Street NW, Ste. 1200
Washington, DC 20530
Dear Judge Hesse:
I am writing to take advantage of the opportunity for the public
to express its opinion regarding the anti-trust lawsuit filed
against Microsoft. Thank you for making this opportunity available.
I believe that the entire basis for suing Microsoft in the first
place was flawed. The argument posed by Janet Reno was that
Microsoft was engaging in monopolistic practices which were
detrimental to the buying public. And yet, Correct me if I'm wrong,
but haven't the prices of computers and software been falling? Isn't
the definition of a monopoly a company that shuts out its
competitors so it can raise prices? That just doesn't make sense.
I hope you'll agree with President Bush that winding up this
lawsuit is the right thing to do. It's been going on too long
already.
Thanks for letting me comment.
Very truly yours,
Mr. Kenneth Cordon
MTC-00029720
Coastal Equipment Corporation
PO Box 1118
Portland Maine 04104
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am in support of the Microsoft antitrust settlement agreement.
The lawsuit has ensued for three years now. Continuing the
litigation will only amount to an incredible waste of resources.
Settling is in everyone's best interest.
If antitrust laws have been violated, steps should be taken to
ensure no further violations occur. The settlement agreement should
provide the appropriate safeguards. The agreement provides for the
creation of a technical review committee that will monitor
Microsoft's business practices. The review committee will also field
complaints from parties who believe the settlement agreement is not
complied with.
Microsoft has agreed to disclose portions of its code to its
competitors. I do not agree that Microsoft should be forced to give
away what it has worked hard at developing. However, if Microsoft is
agreeable to this concession,. I would support that decision in the
interest of resolving this case and moving on to other endeavors.
Your efforts toward resolving this lawsuit are appreciated.
Thank you for your time m reviewing my thoughts on this matter.
Sincerely,
Mark Goldstein
MTC-00029721
1425 Bella Vista Avenue
Coral Gables, Florida 33156
January 5, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I was happy to hear of the recent settlement regarding the
Microsoft antitrust suit. During these times of recession, it is
important to allow our industry to continue to develop. Holding the
IT sector back, by dragging out the negotiation process, can only
hold back our technology industry. Let us allow the IT sector to get
back to business.
Not only do the terms of this agreement promote the competitive
process, but they also open up avenues of development on both sides
of the fence. Although Microsoft has made an overwhelming number of
concessions, they are still able to prosper somewhat. The other
software manufacturers have been given many new options with regard
to licensing, marketing and new avenues in running non-Microsoft
software. All parties involved are ready to move forward and get
back to business. By thwarting this process, we only hold up the
advancement of the 1T sector and our economy in general.
Let us help our economy move forward by supporting our 1T
sector. The competitive market is a global one, and we need to work
together to keep our piece of the pie. Help us to move this
settlement along, by making sure that no more action is taken
against it. I thank you for your help
Sincerely,
Maria Brito
MTC-00029722
Oilfield Services
Schlumberger-Doll Research
36 Old Quarry Road
Ridgefield, CT 06877-4108
Tel: 203 431-5000
Fax: 203 438-3819
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
January 25, 2002
Dear Mr. Ashcroft:
I am writing to voice my opinion on the antitrust case
settlement between the US department of Justice and Microsoft. I am
glad to see that there will soon be an end to this lawsuit. It has
been a waste of our government's resources and our tax dollars. Does
the government want to be responsible for an Enron-type business
failure? They need to end this case immediately so that we can all
move on with our lives.
I am a Research Scientist and use Microsoft products all the
time for my work. Their company has been responsible for the advent
of our computer industry, as we know it. They have also created
tremendous growth in our economy and have put our nation ahead in
the technology race. The proposed settlement is a very fair
compromise and should be enacted at once. Microsoft is going to
share an unprecedented amount of technology information with their
competitors and they will give consumers more choices by allowing
OEM's to install non-Microsoft products on Windows.
Please use your influence to implement the settlement as soon as
possible. Thank you for your time.
Sincerely,
Chung Chang
MTC-00029723
16112 E 28th Terr. #1806
[[Page 28726]]
Independence, MO 64055
January 27, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I was pleased to learn that the Justice Department has reached a
proposed settlement agreement in the Microsoft litigation.
You now have the opportunity to clean up the mess created by
your predecessor. Microsoft was the target of this litigation
because of its size and because of its great degree of success. Your
implementation of this settlement will bring an end to the political
witch-hunt. Microsoft has placed a number of concrete proposals on
the table to resolve the case. They have agreed to changes in almost
every aspect of their business operations, from pricing, to
distribution, to system design. These changes, if implemented,
should provide additional competitive opportunities for Microsoft's
competitors and more choice for computer users. Please go forward
with the settlement and let Microsoft get back to business.
Sincerely,
Ben Kormanik
MTC-00029725
(708) 547.5969
DESSERT SPECIALISTS
FAX (708) 547-5974
[email protected]
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to you to express my belief that the antitrust
lawsuit against Microsoft should be concluded. The settlement
reached in November 2001, should be accepted by the Justice
Department.
Microsoft has offered very generous terms includes full access
to the Windows system for rival software developers. Never before
has a company had to offer its competitors the right to use its own
information against itself. This is a legal first and will allow
rival developers the chance to drastically improve their own
software. The economy and the country need a strong American
company, like Microsoft, to help us through these trying times A
lawsuit against Microsoft does nothing but damage our economy, and
our country. Please take this opportunity to put an end to this
suit. Thank you.
Sincerely,
Ed Lezza
MTC-00029726
S&D SALES COMPANY, INC.
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am in favor of the Microsoft settlement for the following
reasons:
Microsoft has agreed to a number of changes in its business that
result in greater competition and growing consumer choice:
. Adoption of a Uniform Price List under which Microsoft will
market Windows on identical terms and conditions to computer makers.
. Revising agreements which would allow third parties to
distribute products other than those manufactured by Microsoft.
. Granting rights to computer makers to reconfigure Windows
systems so as to allow the placement of non-Microsoft programs
within Windows.
I would rather see this case concluded now with a predictable
result than see you roll the dice in Court. The Bill Clinton
Department of Justice instigated this unnecessary case. Government
at its worst caused the subsequent decline in the technology side of
the economy. Please do not jeopardize the fragile business rebirth
that the U.S. is going through by extending this case.
Thank you for reviewing my comments.
Sincerely,
Dennis Lange
Excellence In Bulk Material Handing
2965 Flowers Road South, Suite 110
. Atlanta, Georgia 30341-5520
. 770-936-8836
. Fax 770-936-8846 . 800-878-4419
URL: http://www. sdsales.com
e-mail: info @ sdsales.com
MTC-00029727
JFERRY WALLACE
708 W. Main Street
Cherryvale, KS 67335
January 21, 2002
Judge Kollar Kottely
Attention: Renata Hesse
U.S. Department of Justice, Antitrust Division
601 D Street, NW, Suite 1200
Washington, DC 20530
Dear Judge Kollar Kottely:
Those lobbying for stricter regulations against Microsoft had
better be careful what they wish for. I seriously doubt that they
wish to operate under the same level of scrutiny themselves.
Contrary to the claims of the antitrust suit, Microsoft has done
nothing but benefit the consumer in terms of providing better, more
innovative products at affordable prices.
I ask you to accept the current settlement offer, concluding
this questionable lawsuit. Settlement of the suit will definitely
crimp Microsoft to some extent, but the fact remains that the
consumer will still choose the products they prefer. The only fair
way that AOL, Oracle, and other Microsoft competitors can knock off
Microsoft's top spot is to truly offer a better product, Hopefully
this lawsuit will spur an investigation of the underlying issue,
current antitrust law, and how this law does or does not apply to
modem day business.
Sincerely,
Jerry Wallace
MTC-00029728
1111 Harbor Lane
Gulf Breeze, FL 32563
January 27, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am disgusted that the government has so little to do with its
time that it can waste nearly four years pro-suing the Microsoft
antitrust case. I hoped that the economy, which has been suffering
ever since this case began, would have the chance to recover.
Microsoft's opponents have kept after Microsoft for so long. It is
truly becoming tedious.
The settlement provides Microsoft's competitors with the
opportunity to use Microsoft's technological advances to their own
advantage, in order to restore an atmosphere of fair competition to
the technology market. For example, Microsoft will reformat future
versions of Windows so that its competitors will have the
opportunity to introduce their own software directly into the
Windows operating system. Microsoft will also allow computer makers
the ability to replace Microsoft programs in Windows with non-
Microsoft alternatives.
The settlement is fine; in fact, I think it would be harm tiff
to the consumer to extend litigation any longer. The suit is no
longer about progress; it is about inhibition. America desperately
needs to be able to progress. I urge you and your office to take the
necessary action to see this settlement finalized.
Sincerely,
Edwin Barksdale
cc: Representative Jefferson Miller
MTC-00029729
TRUEWATER
January 15, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
There has been enough posturing on both sides of this Microsoft
lawsuit to make a flock of peacocks jealous, and more confusion than
a chicken running around with its head cut off. It is clear that any
further litigation would only make matters worse.
I am writing to lend my individual support for this settlement.
I believe that its terms are reasonably fair for both sides. They
make sure that Microsoft avoids its allegedly unfair retaliation
practices to software makers, such as attaching software to Windows.
It will also be required to change future versions of Windows to
accommodate other brands of software more effectively.
I am hoping that no further federal action will be necessary,
and that this sort of rancor can be minimized in the future.
Sincerely,
Christopher Britt
Cc: Representative Sheila Jackson Lee
MTC-00029730
1901 Empire Drive
Waukesha, WI 53186
January 27, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
Now that a settlement has been reached in the Microsoft case, I
would like to confirm
[[Page 28727]]
my support behind the terms negotiated and allowing this action to
be completed. As a technology consultant, I am fully aware that
Microsoft has overstepped its bounds in some respects in the past,
yet this lawsuit has gone beyond what any reasonable person would
consider worth the price in government time and money. A deal is a
deal and it's time to put this issue to rest. There is ample
competition to Microsoft and many "disruptive
technologies" emerging that will change the balance of market
dominance.
Microsoft is a great success story that is being punished,
rather than lauded, for its achievements in the software industry.
To suggest a break up would be an injustice to entrepreneurs
everywhere who want to create the best products and services
possible for their customers. This compromise offers significant
concessions to how Microsoft can freely do business and should be
considered a credible good faith gesture to allowing more
competition.
Considering the greater freedoms for computer makers to
configure Windows without question and developers to utilize Windows
technology for their own interests, this deal should pass the
approval process at once. This is the fairest solution possible
among these parties, and also the most practical one, considering
the need for stability, in this dicey economic climate. Please halt
any further action.
Sincerely,
Phil Mattson
MTC-00029731
FLAMINGO TOURS
4230 S. E. 6TH Street
Miami, Florida 33134
[305] 445-6865
January 22, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B. Hesse Antitrust Division
U.S. Department of Justice
601 D Street, N. W. Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft fails to put an end to Microsoft's predatory
practices. The final settlement in U.S. v. Microsoft does not
adequately protect competition and innovation in this vital sector
of our economy, does not sufficiently address consumer choice, and
falls to meet the standards for a remedy set in the unanimous ruling
against Microsoft by the Court of Appeals for the District of
Columbia. Its enforcement provisions are vague and unenforceable.
The five-year time frame of the proposed settlement is far too short
to deal with the antitrust abuses of a company that has maintained
and expanded its monopoly power through years of fear and
intimidation.
Microsoft's liability under the antitrust laws is no longer open
for debate. The company has been found liable before the District
Court, lost its appeal to the United States Court of Appeals for the
District of Columbia in a 7-0 decision, saw its petition for
rehearing in the appellate court denied, and had its appeal to the
Supreme Court turned down. The courts have decided that Microsoft
possesses monopoly power and has used that power unlawfully to
protect its monopoly. The next step is to find a remedy that meets
the appellate court's standard to "terminate the monopoly,
deny to Microsoft the fruits of its past statutory violations, and
prevent any future anticompetitive activity." This proposed
settlement fails to do so. In fact, the weak settlement between
Microsoft and the Department of Justice ignores key aspects of the
Court of Appeals ruling against Microsoft. The decision gives
Microsoft "sole discretion" to unilaterally determine
that other products or services which don't have anything to do with
operating a computer are nevertheless part of a Windows Operating
System product. The deal fails to terminate the Microsoft monopoly,
and, instead, guarantees its survival.
The flawed settlement empowers Microsoft to retaliate against
would-be competitors, take the intellectual property of competitors
doing business with it and permits Microsoft to define many key
terms, which is unprecedented in any law enforcement proceeding.
In addition, the proposed settlement contains far too many
strong-sounding provisions that are fiddled with loopholes. The
agreement requires Microsoft to share certain technical information
with other companies. However, Microsoft is under no obligation to
share information if that disclosure would harm the company's
security or software licensing. Who gets to decide whether such harm
might occur? Microsoft. The settlement says that Microsoft
"shall not enter into any agreement" to pay a software
vendor not to develop or distribute software that would compete with
Microsoft's products. However, another provision permits those
payments and deals when they are "reasonably necessary."
The ultimate arbiter of when these deals would be "reasonably
necessary?" Microsoft.
Furthermore, the weak enforcement provisions of this proposed
deal leave Microsoft free to do practically whatever it wants. The
company appoints half the members of its overseeing committee and
has the ability to violate regulations, knowing that whatever the
committee finds inappropriate is not admissible in court. Finally,
Microsoft must only comply with the lenient restrictions in the
agreement for only five years. This is clearly not long enough for a
company found guilty of violating antitrust laws.
Sadly, the proposed final judgment has the potential to make the
competitive landscape of the software industry worse, it contains so
many ambiguities and loopholes that it may be unenforceable and will
likely lead to years of additional litigation. Various industry
experts from such institutions such as Morgan Stanley, the Harvard
Business School, Schwab Capital Markets, and Prudential Financial
have been quoted as saying that this settlement is beneficial to
Microsoft's current monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. Court decisions to break up these monopolies led to
prices declining as much as 70% and an increase in competition-
driven innovation.
The end result is that Microsoft is now able to preserve and
reinforce its monopoly, and is also free to use anticompetitive
tactics to spread its dominance into other markets. After more than
11 years of litigation and investigation against Microsoft, surely
we can do better.
Thank you for your time.
Regards,
Rose Wayne
MTC-00029732
January 15, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court,
District of Columbia
c/o Renata B. Hesse Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft does not put an end to Microsoft's questionable
practices.
Does the final settlement in U.S. v. Microsoft adequately
protect competition and innovation in this vital sector of our
economy? Does it sufficiently address consumer choice and meet the
standards for a remedy set in the unanimous ruling against Microsoft
by the Court of Appeals for the District of Columbia? These
questions remain unanswered. The five-year time frame of the
proposed settlement seems far too short to deal with the multiple
antitrust actions of a company that has maintained and expanded its
monopoly power through years of unmatched success. Microsoft's
liability under the antitrust laws is no longer open for debate. The
company has been found liable before the District Court, lost its
appeal to the United States Court of Appeals for the District of
Columbia in a 7-0 decision, saw its petition for rehearing in
the appellate court denied, and had its appeal to the Supreme Court
turned down. The courts have decided that Microsoft possesses
monopoly power and has used that power unlawfully to protect its
monopoly.
The next step is to find a remedy that meets the appellate
court's standard to "terminate the monopoly deny to Microsoft
the fruits of its past statutory violations, and prevent any future
anticompetitive activity." This proposed settlement may not be
strong enough.. In fact, the settlement between Microsoft and the
Department of Justice seems to ignore key aspects of the Court of
Appeals ruling against Microsoft. The decision as it stands gives
Microsoft "sole discretion" to unilaterally determine
that other products or services which don't have anything to do with
operating a computer are nevertheless part of a Windows Operating
System product, thus failing to terminate Microsoft's standing
position in the market.
[[Page 28728]]
The settlement allows Microsoft to retaliate against would-be
competitors, take the intellectual property of competitors doing
business with it and permits Microsoft to define many key terms,
which is unprecedented in any law enforcement proceeding.
In addition, the proposed settlement contains far too many
strong-sounding provisions that are riddled with loopholes. The
agreement requires Microsoft to share certain technical information
with other companies. However, Microsoft is under no obligation to
share information if that disclosure would ham the company's
security or software licensing. The question is, who gets to decide
whether such harm might occur? The settlement says that Microsoft
"shall not enter into any agreement" to pay a software
vendor not to develop or distribute software that would compete with
Microsoft's products. However, another provision permits those
payments and deals when they are "reasonably necessary."
The ultimate arbiter of when these deals would be "reasonably
necessary?" Microsoft.
Furthermore, the provisions in this proposed deal may create a
scenario in which Microsoft has too much freedom. The company
appoints half the members of its overseeing committee and has the
ability to violate regulations, knowing that whatever the committee
finds inappropriate is not admissible in court. Finally, Microsoft
must only comply with the lenient restrictions in the agreement for
only five years. This is clearly not long enough for a company found
guilty of violating antitrust law.
Various industry experts from such institutions as Morgan
Stanley, the Harvard Business School, Schwab Capital Markets and
Prudential Financial have been quoted as saying that this settlement
is beneficial to Microsoft's current monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. Court decisions to break up these monopolies led to
prices declining as much as 70% and an increase in competition-
driven innovation.
The end result is that Microsoft may still be able to preserve
and reinforce its predominance. After more than 11 years of
litigation and investigation against Microsoft, I eagerly await what
is to be the final outcome.
Thank you for your time.
Regards,
Manolo Coroalles
President
Dupont Plaza Travel
MTC-00029733
January 15, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B. Hesse Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft does not put an end to Microsoft's questionable
practices.
Does the final settlement in U.S. v. Microsoft adequately
protect competition and innovation in this vital sector of our
economy? Does it sufficiently address consumer choice and meet the
standards for a remedy set in the unanimous ruling against Microsoft
by the Court of Appeals for the District of Columbia? These
questions remain unanswered. The five-year time frame of the
proposed settlement seems far too short to deal with the multiple
antitrust actions of a company that has maintained and expanded its
monopoly power through years of unmatched success.
Microsoft's liability under the antitrust laws is no longer open
for debate. The company has been found liable before the District
Court, lost its appeal to the United States Court of Appeals for the
District of Columbia in a 7-0 decision, saw its petition for
reheating in the appellate court denied, and had its appeal to the
Supreme Court turned down. The courts have decided that Microsoft
possesses monopoly power and has used that power unlawfully to
protect its monopoly.
The next step is to find a remedy that meets the appellate
court's standard to "terminate the monopoly, deny to Microsoft
the fruits of its past statutory violations, and prevent any future
anticompetitive activity." This proposed settlement may not be
strong enough.. In fact, the settlement between Microsoft and the
Department of Justice seems to ignore key aspects of the Court of
Appeals ruling against Microsoft. The decision as it stands gives
Microsoft "sole discretion" to unilaterally determine
that other products or services which don't have anything to do with
operating a computer are nevertheless part of a Windows Operating
System product, thus failing to terminate Microsoft's standing
position in the market.
The settlement allows Microsoft to retaliate against would-be
competitors, take the intellectual property of competitors doing
business with it and permits Microsoft to define many key terms,
which is unprecedented in any law enforcement proceeding.
In addition, the proposed settlement contains far too many
strong-sounding provisions that are fiddled with loopholes. The
agreement requires Microsoft to share certain technical information
with other companies. However, Microsoft is under no obligation to
share information if that disclosure would harm the company's
security or software licensing. The question is, who gets to decide
whether such harm might occur? The settlement says that Microsoft
"shall not enter into any agreement" to pay a software
vendor not to develop or distribute software that would compete with
Microsoft's products. However, another provision permits those
payments and deals when they are "reasonably necessary."
The ultimate arbiter of when these deals would be "reasonably
necessary?" Microsoft.
Furthermore, the provisions in this proposed deal may create a
scenario in which Microsoft has too much freedom. The company
appoints half the members of its overseeing committee and has the
ability to violate regulations, knowing that whatever the committee
finds inappropriate is not admissible in court. Finally, Microsoft
must only comply with the lenient restrictions in the agreement for
only five years. This is clearly not long enough for a company found
guilty of violating antitrust law.
Various industry experts from such institutions as Morgan
Stanley, the Harvard Business School, Schwab Capital Markets and
Prudential Financial have been quoted as saying that this settlement
is beneficial to Microsoft's current monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. Court decisions to break up these monopolies led to
prices declining as much as 70% and an increase in competition-
driven innovation.
The end result is that Microsoft may still be able to preserve
and reinforce its predominance. After more than 11 years of
litigation and investigation against Microsoft, I eagerly await what
is to be the final outcome.
Thank you for your time.
Regards,
Santiago Morales
President
MaxiForce, Inc.
MTC-00029734
January ??, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B Hesse Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC. 20503-000??
Dear Judge Kollar-Kotally
The recent proposed settlement between the Department of Justice
and Microsoft fails to put an end to Microsoft's predatory
practices.
The final settlement m?? does not adequately protect competition
and ??ation in this ?? sector of our economy does not sufficiently
address consumer choice and fails to meet t he standards for a
remedy set in the unanimous ruling against Microsoft by the Court of
Appeals for the District of Columbia Its enforcement provisions are
??ague and unenforceable. The five-year time frame of the proposed
settlement is far too short to deal with the antitrust abuses of a
company that has maintained and expanded its monopoly power through
years of fear and intimidation.
Microsoft's liability under the antitrust laws is no longer open
for debate. The
[[Page 28729]]
company has been found liable before the District Court, lost its
appeal to the ??ed States Court of Appeals for the District of
Columbia in a 7-0 decision, saw its petition for rehearing in
the appellate court denied, and had its appeal to the Supreme Court
turned down. The courts have decided that Microsoft possesses
monopoly power and has used that power unlawfully to protect its
monopoly. The next step is to find a remedy that meets the appellate
court's standard to "terminate the monopoly, deny to Microsoft
the fruits of its past statutory ??olations, and prevent any ??
??competitive activi??. This proposed settlement fails to do so. In
fact, the weak settlement between Microsoft and the Department of
Justice ??gnores key aspects of t he Court of Appeals ruling against
Microsoft. The decision gives Microsoft "sole
discretion" to unilaterally determine that other products or
services which don't have anything to do with operating a computer
are nevertheless part of a Windows Operating ?? product. The deal
tails to terminate the Microsoft monopoly and instead, guarantees
its survival.
The flawed settlement empowers Microsoft to retaliate against
would-be competitors, take the intellectual property of competitors
doing business with ?? and permits Microsoft to define many key
terms, which is unprecedented in any law enforcement proceeding.
In addition, the proposed settlement contains far too many
strong-sounding provisions that are riddled with loopholes. The
agreement requires Microsoft to share certain technical information
with other companies. However Microsoft is under no obligation to
share information if that disclosure would harm the company ??
security or software licensing. Who gets to decide whether such harm
might occur Microsoft The settlement says that Microsoft
"shall not enter into any agreement" to pay a software
vendor not to develop or distribute software that would compete with
Microsoft's products. However, another another provision permits
those payments and deals when they are "reasonably
necessary". The ultimate arbiter of when these deals would be
"reasonably necessary" Microsoft.
Furthermore, the weak enforcement provisions in this proposed
deal leave Microsoft tree to do practically whatever ?? wants. The
company appoints half the members of its overseeing committee and
has the ability to violate regulations, knowing that whatever the
committee finds inappropriate is not admissible in court Finally,
Microsoft must only comply with the lenient restrictions in the
agreement for only five years. This is clearly not long enough for a
company found guilty of violating antitrust law.
Sadly the proposed final judgment has the potential to make the
competitive landscape of the software industry worse, it contains so
many ambiguities and loopholes that it may be unenforceable and will
likely lead to years of additional litigation Various industry
experts from such institutions as Morgan Stanley, the Harvard
Business School, Schwab Capital Markets and Prudential Financial
have been quoted as saying that this settlement is beneficial to
Microsoft current monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
wel??are in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and VI&I Court decisions to break up these monopolies led to
prices declining as much as 70% and an increase in competition-
driven innovation. The end result is that Microsoft is now able to
preserve and reinforce its monopoly and is also free to use
anticompetitive tactics to spread its dominance into other markets.
After more than 11 years of litigation and investigation against
Microsoft, surely we can do better.
Thank you for your time.
Regards.
Juan D ??
President
??eRespondo.com. Inc
MTC-00029735
January 7, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft fails to put an end to Microsoft's predatory
practices.
The final settlement in U.S. v. Microsoft does not adequately
protect competition and innovation in this vital sector of our
economy, does not sufficiently address consumer choice and fails to
meet the standards for a remedy set in the unanimous ruling against
Microsoft by the Court of Appeals for the District of Columbia. Its
enforcement provisions are vague and unenforceable. The five-year
time frame of the proposed settlement is far too short to deal with
the antitrust abuses of a company that has maintained and expanded
its monopoly power through years of fear and intimidation.
Microsoft's liability under the antitrust laws is no longer open
for debate. The company has been found liable before the District
Court, lost its appeal to the United States Court of Appeals for the
District of Columbia in a 7-0 decision, saw its petition for
reheating in the appellate court denied, and had its appeal to the
Supreme Court turned down. The courts have decided that Microsoft
possesses monopoly power and has used that power unlawfully to
protect its monopoly. The next step is to find a remedy that meets
the appellate court's standard to "terminate the monopoly,
deny to Microsoft the fruits of its past statutory violations, and
prevent any future anticompetive activity." This proposed
settlement fails to do so. In fact, the weak settlement between
Microsoft and the Department of Justice ignores key aspects of the
Court of Appeals ruling against Microsoft. The decision gives
Microsoft "sole discretion" to unilaterally determine
that other products or services which don't have anything to do with
operating a computer are nevertheless part of a Windows Operating
System product. The deal fails to terminate the Microsoft monopoly
and, instead, guarantees its survival.
The flawed settlement empowers Microsoft to retaliate against
would-be competitors, take the intellectual property of competitors
doing business with it and permits Microsoft to define many key
terms, which is unprecedented in any law enforcement proceeding.
In addition, the proposed settlement contains far too many
strong-sounding provisions that are fiddled with loopholes. The
agreement requires Microsoft to share certain technical information
with other companies. However, Microsoft is under no obligation to
share information if that disclosure would harm the company's
security or software licensing. Who gets to decide whether such harm
might occur? Microsoft. The settlement says that Microsoft
"shall not enter into any agreement" to pay a software
vendor not to develop or distribute software that would compete with
Microsoft's products. However, another provision permits those
payments and deals when they are "reasonably necessary."
The ultimate arbiter of when these deals would be "reasonably
necessary?" Microsoft.
Furthermore, the weak enforcement provisions in this proposed
deal leave Microsoft free to do practically whatever it wants. The
company appoints half the members of its overseeing committee and
has the ability to violate regulations, knowing that whatever the
committee finds inappropriate is not admissible in court. Finally,
Microsoft must only comply with the lenient restrictions in the
agreement for only five years. This is clearly not long enough for a
company found guilty of violating antitrust law.
Sadly, the proposed final judgment has the potential to make the
competitive landscape of the software industry worse, it contains so
many ambiguities and loopholes that it may be unenforceable and will
likely lead to years of additional litigation. Various industry
experts from such institutions as Morgan Stanley, the Harvard
Business School, Schwab Capital Markets and Prudential Financial
have been quoted as saying that this settlement is beneficial to
Microsoft's current monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. Court decisions to break up these monopolies led to
prices declining as much as 70% and an increase in competition-
driven innovation.
The end result is that Microsoft is now able to preserve and
reinforce its monopoly, and
[[Page 28730]]
is also free to use anticompetitive tactics to spread its dominance
into other markets. After more than 11 years of litigation and
investigation against Microsoft, surely we can do better.
Thank you for your time.
Raul Valdes-Fauli
5700 Collins AV, #9-G
Miami Beach FL 33140
MTC-00029737
THE AMERICAS-COLLECTION
PRIVATE & CORPORATE FINE ARTS DEALERS
January 7, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B. Hesse Antitrust Division
U.S. Department of Justice
601 D Street NW Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft fails to put an end to Microsoft's predatory
practices. The final settlement in U.S. v. Microsoft does not
adequately protect competition and innovation in this vital sector
of our economy, does not sufficiently address consumer choice and
fails to meet the standards for a remedy set in the unanimous ruling
against Microsoft by the Court of Appeals for the District of
Columbia. Its enforcement provisions are vague and unenforceable.
The five-year time frame of the proposed settlement is far too short
to deal with the antitrust abuses of a company that has maintained
and expanded its monopoly power through years of fear and
intimidation.
Microsoft's liability under the antitrust laws is no longer open
for debate. The company has been found liable before the District
Court, lost its appeal to the United States Court of Appeals for the
District of Columbia in a 7-0 decision, saw its petition for
rehearing in the appellate court denied, and had its appeal to the
Supreme Court turned down. The courts have decided that Microsoft
possesses monopoly power and has used that power unlawfully to
protect its monopoly. The next step is to find a remedy that meets
the appellate court's standard to "terminate the monopoly,
deny to Microsoft the fruits of its past statutory violations, and
prevent any future anticompetitive activity." This proposed
settlement fails to do so. In fact, the weak settlement between
Microsoft and the Department of Justice ignores key aspects of the
Court of Appeals ruling against Microsoft. The decision gives
Microsoft "sole discretion" to unilaterally determine
that other products or services which don't have anything to do with
operating a computer are nevertheless part of a Windows Operating
System product. The deal fails to terminate the Microsoft monopoly
and, instead, guarantees its survival.
The flawed settlement empowers Microsoft to retaliate against
would-be competitors, take the intellectual property of competitors
doing business with it and permits Microsoft to define many key
terms, which is unprecedented in any law enforcement proceeding.
In addition, the proposed settlement contains far too many
strong-sounding provisions that are fiddled with loopholes. The
agreement requires Microsoft to share certain technical information
with other companies. However, Microsoft is under no obligation to
share information if that disclosure would harm the company's
security or software licensing. Who gets to decide whether such harm
might occur? Microsoft. The settlement says that Microsoft
"shall not enter into any agreement" to pay a software
vendor not to develop or distribute software that would compete with
Microsoft's products. However, another provision permits those
payments and deals when they are "reasonably necessary."
The ultimate arbiter of when these deals would be "reasonably
necessary?" Microsoft.
Furthermore, the weak enforcement provisions in this proposed
deal leave Microsoft free to do practically whatever it wants. The
company appoints half the members of its overseeing committee and
has the ability to violate regulations, knowing that whatever the
committee finds inappropriate is not admissible in court. Finally,
Microsoft must only comply with the lenient restrictions in the
agreement for only five years. This is clearly not long enough for a
company found guilty of violating antitrust law.
Sadly, the proposed final judgment has the potential to make the
competitive landscape of the software industry worse, it contains so
many ambiguities and loopholes that it may be unenforceable and will
likely lead to years of additional litigation. Various industry
experts from such institutions as Morgan Stanley, the Harvard
Business School, Schwab Capital Markets and Prudential Financial
have been quoted as saying that this settlement is beneficial to
Microsoft's current monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. Court decisions to break up these monopolies led to
prices declining as much as 70% and an increase in competition-
driven innovation.
The end result is that Microsoft is now able to preserve and
reinforce its monopoly, and is also free to use anticompetitive
tactics to spread its dominance into other markets. After more than
11 years of litigation and investigation against Microsoft, surely
we can do better.
Thank you for your time.
Regards,
Dora Valdes-Fauli
Director
MTC-00029738
January 18, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
Government Relations & Public Affairs Counselors 2350 Coral
Way, Suite 301
Miami, Florida 33145
Telephone (305) 860-0780
Facsimile (305) 860-0580
c/o Renata B. Hesse Antitrust Division
U.S. Department of Justice
601 D Street NW Suite
1200 Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft fails to put an end to Microsoft's predatory
practices.
The final settlement in U.S. v. Microsoft does not adequately
protect competition and innovation in this vital sector of our
economy, does not sufficiently address consumer choice and fads to
meet the standards for a remedy set in the unanimous ruling against
Microsoft by the Court of Appeals for the District of Columbia. Its
enforcement provisions are vague and unenforceable. The five-year
time frame of the proposed settlement is far too short to deal with
the antitrust abuses of a company that has maintained and expanded
its monopoly power through years of fear and intimidation.
Microsoft's liability under the antitrust laws is no longer open
for debate. The company has been found liable before the District
Court, lost its appeal to the United States Court of Appeals for the
District of Columbia in a 7-0 decision, saw its petition for
rehearing in the appellate court denied, and had its appeal to the
Supreme Court turned down. The courts have decided that Microsoft
possesses monopoly power and has used that power unlawfully to
protect its monopoly. The next step is to find a remedy that meets
the appellate court's standard to "terminate the monopoly,
deny to Microsoft the fruits of its past statutory violations, and
prevent any future anticompetitive activity." This proposed
settlement fails to do so. In fact, the weak settlement between
Microsoft and the Department of Justice ignores key aspects of the
Court of Appeals ruling against Microsoft. The decision gives
Microsoft "sole discretion" to unilaterally determine
that other products or services which don't have anything to do with
operating a computer are nevertheless part of a Windows Operating
System product. The deal fails to terminate the Microsoft monopoly
and, instead, guarantees its survival.
The flawed settlement empowers Microsoft to retaliate against
would-be competitors, take the intellectual property of competitors
doing business with it and permits Microsoft to define many key
terms, which is unprecedented in any law enforcement proceeding. In
addition, the proposed settlement contains far too many strong-
sounding provisions that are riddled with loopholes. The agreement
requires Microsoft to share certain technical information with other
companies. However, Microsoft is under no obligation to share
information if that disclosure would harm the company's security or
software licensing. Who gets to decide whether such harm might
occur? Microsoft. The settlement says that Microsoft "shall
not enter into any agreement" to pay a software vendor not to
develop or distribute software that would compete with Microsoft's
products. However, another provision permits those payments and
deals when they are "reasonably necessary." The
[[Page 28731]]
ultimate arbiter of when these deals would be "reasonably
necessary?" Microsoft.
Furthermore, the weak enforcement provisions in this proposed
deal leave Microsoft free to do practically whatever it wants. The
company appoints half the members of its overseeing committee and
has the ability to violate regulations, knowing that whatever the
committee finds inappropriate is not admissible in court. Finally,
Microsoft must only comply with the lenient restrictions in the
agreement for only five years. This is clearly not long enough for a
company found guilty of violating antitrust law.
Sadly, the proposed final judgment has the potential to make the
competitive landscape of the software industry worse, it contains so
many ambiguities and loopholes that it may be unenforceable and will
likely lead to years of additional litigation. Various industry
experts from such institutions as Morgan Stanley, the Harvard
Business School, Schwab Capital Markets and Prudential Financial
have been quoted as saying that this settlement is beneficial to
Microsoft's current monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. Court decisions to break up these monopolies led to
prices declining as much as 70% and an increase in competition-
driven innovation.
The end result is that Microsoft is now able to preserve and
reinforce its monopoly, and is also free to use anticompetitive
tactics to spread its dominance into other markets. After more than
11 years of litigation and investigation against Microsoft, surely
we can do better.
Thank you for your time.
Regards, Fausto Gomez
President
Gomez Barker Associates
MTC-00029739
January 15, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B. Hesse Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft does not put an end to Microsoft's questionable
practices. Does the final settlement in U.S. v. Microsoft adequately
protect competition and innovation in this vital sector of our
economy? Does it sufficiently address consumer choice and meet the
standards for a remedy set in the unanimous ruling against Microsoft
by the Court of Appeals for the District of Columbia? These
questions remain unanswered. The five-year time frame of the
proposed settlement seems far too short to deal with the multiple
antitrust actions of a company that has maintained and expanded its
monopoly power through years of unmatched success. Microsoft's
liability under the antitrust laws is no longer open for debate. The
company has been found liable before the District Court, lost its
appeal to the United States Court of Appeals for the District of
Columbia in a 7-0 decision, saw its petition for rehearing in
the appellate court denied, and had its appeal to the Supreme Court
turned down. The courts have decided that Microsoft possesses
monopoly power and has used that power unlawfully to protect its
monopoly. The next step is to find a remedy that meets the appellate
court's standard to "terminate the monopoly, deny to Microsoft
the fruits of its past statutory violations, and prevent any future
anticompetitive activity" This proposed settlement may not be
strong enough.. In fact, the settlement between Microsoft and the
Department of Justice seems to ignore key aspects of the Court of
Appeals ruling against Microsoft. The decision as it stands gives
Microsoft "sole discretion" to unilaterally determine
that other products or services which don't have anything to do with
operating a computer are nevertheless part of a Windows Operating
System product, thus failing to terminate Microsoft's standing
position in the market.
The settlement allows Microsoft to retaliate against would-be
competitors, take the intellectual property of competitors doing
business with it and permits Microsoft to define many key terms,
which is unprecedented in any law enforcement proceeding. In
addition, the proposed settlement contains far too many strong-
sounding provisions that are fiddled with loopholes. The agreement
requires Microsoft to share certain technical information with other
companies. However, Microsoft is under no obligation to share
information if that disclosure would harm the company's security or
software licensing. The question is, who gets to decide whether such
harm might occur?
The settlement says that Microsoft "shall not enter into
any agreement" to pay a software vendor not to develop or
distribute software that would compete with Microsoft's products.
However, another provision permits those payments and deals when
they are "reasonably necessary." The ultimate arbiter
of" when these deals would be "reasonably
necessary?" Microsoft.
Furthermore, the provisions in this proposed deal may create a
scenario in which Microsoft has too much freedom. The company
appoints half the members of its overseeing committee and has the
ability to violate regulations, knowing that whatever the committee
finds inappropriate is not admissible in court. Finally, Microsoft
must only comply with the lenient restrictions in the agreement for
only five years. This is clearly not long enough for a company found
guilty of violating antitrust law.
Various industry experts from such institutions as Morgan
Stanley, the Harvard Business School, Schwab Capital Markets and
Prudential Financial have been quoted as saying that this settlement
is beneficial to Microsoft's current monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. Court decisions to break up these monopolies led to
prices declining as much as 70% and an increase in competition-
driven innovation.
The end result is that Microsoft may still be able to preserve
and reinforce its predominance. After more than 11 years of
litigation and investigation against Microsoft, I eagerly await what
is to be the final outcome.
Thank you for your time.
Regards,
Abel ?? Iglesias
828 Maria??a AV
Coral Gables FL 33134
MTC-00029740
EMS educational management services, inc.
January 18, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B. Hesse Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft fails to put an end to Microsoft's predatory
practices. The final settlement in U.S. v. Microsoft does not
adequately protect competition and innovation in this vital sector
of our economy, does not sufficiently address consumer choice and
fails to meet the standards for a remedy set in the unanimous ruling
against Microsoft by the Court of Appeals for the District of
Columbia. Its enforcement provisions are vague and unenforceable.
The five-year time frame of the proposed settlement is far too short
to deal with the antitrust abuses of a company that has maintained
and expanded its monopoly power through years of fear and
intimidation.
Microsoft's liability under the antitrust laws is no longer open
for debate. The company has been found liable before the District
Court, lost its appeal to the United States Court of Appeals for the
District of Columbia in a 7-0 decision, saw its petition for
rehearing in the appellate court denied, and had its appeal to the
Supreme Court turned down. The courts have decided that Microsoft
possesses monopoly power and has used that power unlawfully to
protect its monopoly. The next step is to find a remedy that meets
the appellate court's standard to "terminate the monopoly,
deny to Microsoft the fruits of its past statutory violations, and
prevent any future anticompetitive activity." This proposed
settlement fails to do so. In fact, the weak settlement between
Microsoft and the Department of Justice ignores key aspects of the
Court of Appeals ruling against Microsoft. The decision gives
Microsoft "sole discretion" to unilaterally determine
that
[[Page 28732]]
other products or services which don't have anything to do with
operating a computer are nevertheless part of a Windows Operating
System product. The deal fails to terminate the Microsoft monopoly
and, instead, guarantees its survival.
The flawed settlement empowers Microsoft to retaliate against
would-be competitors, take the intellectual property of competitors
doing business with it and permits Microsoft to define many key
terms, which is unprecedented in any law enforcement proceeding.
In addition, the proposed settlement contains far too many
strong-sounding provisions that are fiddled with loopholes. The
agreement requires Microsoft to share certain technical information
with other companies. However, Microsoft is under no obligation to
share information if that disclosure would harm the company's
security or software licensing. Who gets to decide whether such harm
might occur? Microsoft. The settlement says that Microsoft
"shall not enter into any agreement" to pay a software
vendor not to develop or distribute software that would compete with
Microsoft's products. However, another provision permits those
payments and deals when they are "reasonably necessary."
The ultimate arbiter of when these deals would be "reasonably
necessary?" Microsoft.
Furthermore, the weak enforcement provisions in this proposed
deal leave Microsoft free to do practically whatever it wants. The
company appoints half the members of its overseeing committee and
has the ability to violate regulations, knowing that whatever the
committee finds inappropriate is not admissible in court. Finally,
Microsoft must only comply with the lenient restrictions in the
agreement for only five years. This is clearly not long enough for a
company found guilty of violating antitrust law.
Sadly, the proposed final judgment has the potential to make the
competitive landscape of the software industry worse, it contains so
many ambiguities and loopholes that it may be unenforceable and will
likely lead to years of additional litigation. Antitrust law has
protected free markets and enhanced consumer welfare in this country
for more than a century. The Microsoft case does not represent a
novel application of the law, but is the kind of standard antitrust
enforcement action that could ensure vigorous competition in all
sectors of today's economy. These same standards have been applied
to monopolies in the past, such as Standard Oil and AT&T. Court
decisions to break up these monopolies led to prices declining as
much as 70% and an increase in competition-driven innovation.
The end result is that Microsoft is now able to preserve and
reinforce its monopoly, and is also free to use anticompetitive
tactics to spread its dominance into other markets. After more than
11 years of litigation and investigation against Microsoft, surely
we can do better.
Regards,
Esther Tellechea
President
Educational Management Services
MTC-00029741
January 7, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court,
District of Columbia
c/o Renata B. Hesse Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft fails to put an end to Microsoft's predatory
practices.
The final settlement in U.S. v. Microsoft does not adequate
protect competition and innovation in this vital sector of our
economy, does not sufficiently address consumer choice and fails to
meet the standards for a remedy set in the unanimous ruling against
Microsoft by the Court of Appeals for the District of Columbia. Its
enforcement provisions are vague and unenforceable. The five-year
time frame of the proposed settlement is far too short to deal with
the antitrust abuses of a company that has maintained and expanded
its monopoly power through years of fear and intimidation.
Microsoft's liability under the antitrust laws is no longer open
for debate. The company has been found liable before the District
Court, lost its appeal to the Untied States Court of Appeals for
District of Columbia in a 7-0 decision, saw its petition for
reheating in the appellate court defiled, and had its appeal to the
Supreme Court turned down. The courts have decided that Microsoft
possesses monopoly power and has used that power unlawfully to
protect its monopoly. The next step is to find a remedy that meets
the appellate court's standard to "terminate the monopoly,
deny to Microsoft the fruits of its past statutory violations, and
prevent any future anticompetitive activity." This proposed
settlement fails to do so. In fact, the weak settlement between
Microsoft and the Department of Justice ignores key aspects of the
Court of Appeals ruling against Microsoft. The decision gives
Microsoft "sole discretion" to unilaterally determine
that other products or services which don't have anything to do with
operating a computer are nevertheless part of a Windows Operating
system product. The deal fails to terminate the Microsoft monopoly
and, instead, guarantees its survival.
The flawed settlement empowers Microsoft to retaliate against
would-be competitors, take the intellectual property of competitors
doing business with it and permits Microsoft to define many key
terms, which is unprecedented in any law enforcement proceeding.
In addition, the proposed settlement contains far too many
strong-sounding provisions that are fiddled with loopholes. The
agreement requires Microsoft to share certain technical information
with other companies. However, Microsoft is under no obligation to
share information if that disclosure would harm the company's
security software licensing. Who gets to decide whether such harm
might occur? Microsoft. The settlement says that Microsoft
"shall not enter into any agreement" to pay a software
vendor not to develop or distribute software that would compete with
Microsoft's products. However, another provision permits those
payments and deals when they are "reasonably necessary."
The ultimate arbiter of when these deals would be "reasonably
necessary?" Microsoft.
Furthermore, the weak enforcement provisions in this proposed
deal leave Microsoft free to do practically whatever it wants. The
company appoints half the members of its overseeing committee and
has the ability to violate regulations, knowing that whatever the
committee finds inappropriate is not admissible in court. Finally,
Microsoft must only comply with the lenient restrictions in the
agreement for only five years. This is clearly not long enough for a
company found guilty of violating antitrust law. Sadly, the proposed
final judgment has the potential to make the competitive landscape
of the software industry worse, it contains so many ambiguities and
loopholes that it may be unenforceable and will likely lead to years
of additional litigation. Various industry experts from such
institutions as Morgan Stanley, the Harvard Business School, Schwab
Capital Markets and Prudential Financial have been quoted as saying
that this settlement is beneficial to Microsoft's current
monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. court decisions to break up these monopolies led to
prices declining as much as 70% and an increase in competition-
driven innovation. The end result is that Microsoft is now able to
preserve and reinforce its monopoly, and is also free to use
anticompetitive tactics to spread its dominance into other markets.
After more than 11 years of litigation and investigation against
Microsoft, surely we can do better.
That you for your time.
Regards,
Janet M. Perez
Commercial Services Department
Italy-America Chamber of Commerce Southeast, Inc.
MTC-00029742
January 15, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft fails to put an end to Microsoft's predatory
practices.
The final settlement in U.S. v. Microsoft does not adequately
protect competition and
[[Page 28733]]
innovation in this vital sector of our economy, does not
sufficiently address consumer choice and fails to meet the standards
for a remedy set in the unanimous ruling against Microsoft by the
Court of Appeals for the District of Columbia. Its enforcement
provisions are vague and unenforceable. The five-year time frame of
the proposed settlement is far too short to deal with the antitrust
abuses of a company that has maintained and expanded its monopoly
power through years of fear and intimidation.
Microsoft's liability under the antitrust laws is no longer open
for debate. The company has been found liable before the District
Court, lost its appeal to the United States Court of Appeals for the
District of Columbia in a 7-0 decision, saw its petition for
reheating in the appellate court denied, and had its appeal to the
Supreme court turned down. The courts have decided that Microsoft
possesses monopoly power and has used that power unlawfully to
protect its monopoly. The next step is to find a remedy that meets
the appellate court's standard to "terminate the monopoly,
deny to Microsoft the fruits of its past statutory violations, and
prevent any future anticompetitive activity." The proposed
settlement fails to do so. In fact, the weak settlement between
Microsoft and the Department of Rustic ignores key aspects of the
Court of Appeals ruling against Microsoft. The decision gives
Microsoft "sole discretion" to unilaterally determine
that other products or services which don't have anything to do with
operating a computer are nevertheless part of a Windows Operating
System product. The deal fails to terminate the Microsoft monopoly
and, instead, guarantees its survival.
The flawed settlement empowers Microsoft to retaliate against
would-be competitors, take the intellectual property of competitors
doing business with it and permits Microsoft to define many key
terms, which is unprecedented in any law enforcement proceeding.
In addition, the proposed settlement contains far too many
strong-sounding provisions that are fiddled with loopholes. The
agreement requires Microsoft to share certain technical information
with other companies. However, Microsoft is under no obligation to
share information if that disclosure would harm the company's
security software licensing. Who gets to decide whether such harm
might occur? Microsoft. The settlement says that Microsoft
"shall not enter into any agreement" to pay a software
vendor not to develop or distribute software that would compete with
Microsoft's products. However, another provision permits those
payments and deals when they are "reasonably necessary."
The ultimate arbiter of when these deals would be "reasonably
necessary?" Microsoft.
Furthermore, the weak enforcement provisions in this proposed
deal leave Microsoft free to do practically whatever it wants. The
company appoints half the members of its overseeing committee and
has the ability to violate regulations, knowing that whatever the
committee finds inappropriate is not admissible in court. Finally,
Microsoft must only comply with the lenient restrictions in the
agreement for only five years. This is clearly not long enough for a
company found guilty of violating antitrust law. Sadly, the proposed
final judgment has the potential to make the competitive landscape
of the software industry worse, it contains so many ambiguities and
loopholes that it may be unenforceable and will likely lead to years
of additional litigation. Various industry experts from such
institutions as Morgan Stanley, the Harvard Business School, Schwab
Capital Markets and Prudential Financial have been quoted as saying
that this settlement is beneficial to Microsoft's current
monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. court decisions to break up these monopolies led to
prices declining as much as 70% and an increase rein competition-
driven innovation. The end result is that Microsoft is now able to
preserve and reinforce its monopoly, and is also free to use
anticompetitive tactics to spread its dominance into other markets.
After more than 11 years of litigation and investigation against
Microsoft, surely we can do better.
That you for your time.
Regards,
Jose Gutierrez
Commercial Broker
MTC-00029743
January 17, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft fails to put an end to Microsoft's predatory
practices. The final settlement in U.S. v. Microsoft does not
adequately protect competition and innovation in this vital sector
of our economy, does not sufficiently address consumer choice and
fails to meet the standards for a remedy set in the unanimous ruling
against Microsoft by the Court of Appeals for the District of
Columbia. Its enforcement provisions are vague and unenforceable.
The five-year time frame of the proposed settlement is far too short
to deal with the antitrust abuses of a company that has maintained
and expanded its monopoly power through years of fear and
intimidation. Microsoft's liability under the antitrust laws is no
longer open for debate. The company has been found liable before the
District Court, lost its appeal to the United States Court of
Appeals for the District of Columbia in a 7-0 decision, saw
its petition for reheating in the appellate court defiled, and had
its appeal to the Supreme Court turned down. The courts have decided
that Microsoft possesses monopoly power and has used that power
unlawfully to protect its monopoly.
The next step is to find a remedy that meets the appellate
court's standard to "terminate the monopoly, deny to Microsoft
the fruits of its past statutory violations, and prevent any future
anticompetitive activity." This proposed settlement fails to
do so. In fact, the weak settlement between Microsoft and the
Department of Justice ignores key aspects of the Court of Appeals
ruling against Microsoft. The decision gives Microsoft "sole
discretion" to unilaterally determine that other products or
services which don't have anything to do with operating a computer
are nevertheless part of a Windows Operating System product. The
deal fails to terminate the Microsoft monopoly and, instead,
guarantees its survival.
The flawed settlement empowers Microsoft to retaliate against
would-be competitors, take the intellectual property of competitors
doing business with it and permits Microsoft of define many key
terms, which is unprecedented in any law enforcement proceeding. In
addition, the proposed settlement contains far too many strong-
sounding provisions that are riddled with loopholes. Furthermore,
the weak enforcement provisions in this proposed deal leave
Microsoft free to do practically whatever it wants. The company
appoints half the members of its overseeing committee and has the
ability to violate regulations, knowing that whatever the committee
finds inappropriate is not admissible in court. Finally, Microsoft
must comply with the lenient restrictions in the agreement for only
five years. That is clearly not long enough for a company found
guilty of violating antitrust law.
Sadly, the proposed final judgment has the potential to make the
competitive landscape of the software industry worse, it contains so
many ambiguities and loopholes that it may be unenforceable and will
likely lead to years of additional litigation. Various industry
experts from such institutions as Morgan Stanley, the Harvard
Business School, Schwab Capital Markets and Prudential Financial
have been quoted as saying that this settlement is beneficial to
Microsoft's current monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. Court decisions to break up these monopolies led to
prices declining as much as 7-% and an increase in competition-
driven innovation. The end result is that Microsoft is now able to
preserve and reinforce its monopoly, and is also free to use
anticompetitive tactics to spread its dominance into other markets.
After more than 11 years of litigation and investigation against
Microsoft, surely we can do better.
Thank you for your time.
[[Page 28734]]
Regards,
Martin Mendiola
Presient
MTC-00029744
January 7, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft fails to put an end to Microsoft's predatory
practices. The final settlement in U.S. v. Microsoft does not
adequately protect competition and innovation in this vital sector
of our economy, does not sufficiently address consumer choice and
fails to meet the standards for a remedy set in the unanimous ruling
against Microsoft by the Court of Appeals for the District of
Columbia. Its enforcement provisions are vague and unenforceable.
The five-year time frame of the proposed settlement is far too short
to deal with the antitrust abuses of a company that has maintained
and expanded its monopoly power through years of fear and
intimidation.
Microsoft's liability under the antitrust laws is no longer open
for debate. The company has been found liable before the District
Court, lost its appeal to the United States Court of Appeals for the
District of Columbia in a 7-0 decision, saw its petition for
rehearing in the appellate court denied, and had its appeal to the
Supreme Court turned down. The courts have decided that Microsoft
possesses monopoly power and has used that power unlawfully to
protect its monopoly. The next step is to find a remedy that meets
the appellate court's standard to "terminate the monopoly,
deny to Microsoft the fruits of its past statutory violations, and
prevent any future anticompetitive activity." This proposed
settlement fails to do so. In fact, the weak settlement between
Microsoft and the Department of Justice ignores key aspects of the
Court of Appeals ruling against Microsoft. The decision gives
Microsoft "sole discretion" to unilaterally determine
that other products or services which don't have anything to do with
operating a computer are nevertheless part of a Windows Operating
System product. The deal fails to terminate the Microsoft monopoly
and, instead, guarantees its survival.
The flawed settlement empowers Microsoft to retaliate against
would-be competitors, take the intellectual property of competitors
doing business with it and permits Microsoft to define many key
terms, which is unpredented in any law enforcement proceeding.
In addition, the proposed settlement contains far too many
strong-sounding provisions that are riddled with loopholes. The
agreement requires Microsoft to share certain technical information
with other companies. However, Microsoft is under no obligation to
share information if that disclosure would harm the company's
security or software licensing. Who gets to decide whether such harm
might occur? Microsoft. The settlement says that Microsoft
"shall not enter into any agreement" to pay a software
vendor not to develop or distribute software that would compete with
Microsoft's products. However, another provision permits those
payments and deals when they are "reasonably necessary."
The ultimate arbiter of when those deals would be "reasonably
necessary?" Microsoft.
Furthermore, the weak enforcement provisions in this proposed
deal leave Microsoft free to do practically whatever it wants. The
company appoints half the members of its overseeing committee and
has the ability to violate regulations, knowing that whatever the
committee finds inappropriate is not admissible in court. Finally,
Microsoft must only comply with the lenient restrictions in the
agreement for only five years. This is clearly not long enough for a
company found guilty of violating antitrust law.
Sadly, the proposed final judgment has the potential to make the
competitive landscape of the software industry worse, it contains so
many ambiguities and loopholes that it may be unenforceable and will
likely lead to years of additional litigation. Various industry
experts from such institutions as Morgan Stanley, the Harvard
Business School, Schwab Capital Markets and Prudential Financial
have been quoted as saying that this settlement is beneficial to
Microsoft's current monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. Court decisions to break up these monopolies led to
prices declining as much as 70% and an increase in competition-
driven innovation. The end result is that Microsoft is ow able to
preserve and reinforce its monopoly, and is also free to use
anticompetitive tactics to spread its dominance into other markets.
After more than 11 years of litigation and investigation against
Microsoft, surely we can do better.
Thank you for your time.
Regards,
Lourdes Castro
MTC-00029745
January 14, 2002
Vincent Import & Export, Inc.
751 North Greenway,
Coral Gables, FL
Hon. Colleen Kollar-Kotelly
U.S. District Court,
District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft fails to put an end to Microsoft's predatory
practices.
The final settlement in U.S. v. Microsoft does not adequately
protect competition and innovation in this vital sector of our
economy, does not sufficiently address consumer choice and fails to
meet the standards for a remedy set in the unanimous ruling against
Microsoft by the Court of Appeals for the District of Columbia. Its
enforcement provisions are vague and unenforceable. The five-year
time frame of the proposed settlement is far too short to deal with
the antitrust abuses of a company that has maintained and expanded
its monopoly power through years of fear and intimidation.
Microsoft's liability under the antitrust laws is no longer open
for debate. The company has been found liable before the District
Court, lost its appeal to the United States Court of Appeals for the
District of Columbia in a 7-0 decision, saw its petition for
reheating in the appellate court denied, and had its appeal to the
Supreme Court turned down. The courts have decided that Microsoft
possesses monopoly power and has used that power unlawfully to
protect its monopoly. The next step is to find a remedy that meets
that appellate court's standard to "terminate the monopoly,
deny to Microsoft the fruits of its past statutory violations, and
prevent any future anticompetitive activity." This proposed
settlement fails to do so. In fact, the weak settlement between
Microsoft and the Department of Justice ignores key aspects of the
Court of Appeals ruling against Microsoft. The decision gives
Microsoft "sole discreti8on" to unilaterally determine
that other products or services which don't have anything to do with
operating a computer are nevertheless pan of a Windows Operating
System product. The deal fails to terminate the Microsoft monopoly
and, instead, guarantees its survival.
The flawed settlement empowers Microsoft to retaliate against
would-be competitors, take the intellectual property of competitors
doing business with it and permits Microsoft to define many key
terms, which is unprecedented in any law enforcement proceeding.
In addition, the proposed settlement contains far too many
strong-sounding provisions that are fiddled with loopholes. The
agreement requires Microsoft to share certain technical information
with other companies. However, Microsoft is under no obligation to
share information if that disclosure would harm the company's
security or software licensing. Who gets to decide whether such harm
might occur? Microsoft. The settlement says that Microsoft
"shall not enter into any agreement" to pay a software
vendor not to develop or distribute software that would compete with
Microsoft's products. However, another provision permits those
payments and deals when they are "reasonably necessary."
The ultimate arbiter of when these deals would be "reasonably
necessary?" Microsoft.
Furthermore, the weak enforcement provisions in this proposed
deal leave Microsoft free to do practically whatever it wants. The
company appoints half the members of its overseeing committee and
has
[[Page 28735]]
the ability to violate regulations, knowing that whatever the
committee finds inappropriate is not admissible in court. Finally,
Microsoft must only comply with the lenient restrictions in the
agreement for only five years. This is clearly not long enough for a
company found guilty of violating antitrust law.
Sadly, the proposed final judgment has the potential to make the
competitive landscape of the software industry worse, it contains so
many ambiguities and loopholes that it may be unenforceable and will
likely lead to years of additional litigation. Various industry
experts from such institutions as Morgan Stanley, the Harvard
Business School, Schwab Capital Markets and Prudential Financial
have been quoted as saying that this settlement is beneficial to
Microsoft's current monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. Court decisions to break up these monopolies led to
prices declining as much as 70% and an increase in competition-
driven innovation. The end result is that Microsoft is now able to
preserve and reinforce its monopoly, and is also free to use
anticompetitive tactics to spread its dominance into other markets,
After more than 11 years of litigation and investigation against
Microsoft, surely we can do better.
Thank you for your time.
Regards,
Francia Quijada
President
Vincent Import & Export, Inc.
MTC-00029746
January 14, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court,
District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft fails to put an end to Microsoft's predatory
practices.
The final settlement in U.S. v. Microsoft does not adequately
protect competition and innovation in this vital sector of our
economy, does not sufficiently address consumer choice and fails to
meet the standards for a remedy set in the unanimous ruling against
Microsoft by the Court of Appeals for the District of Columbia. Its
enforcement provisions are vague and unenforceable. The five-year
time frame of the proposed settlement is far too short to deal with
the antitrust abuses of a company that has maintained and expanded
its monopoly power through years of fear and intimidation.
Microsoft's liability under the antitrust laws is no longer open
for debate. The company has been found liable before the District
Court, lost its appeal to the United States Court of Appeals for the
District of Columbia in a 7-0 decision, saw its petition for
reheating in the appellate court denied, and had its appeal to the
Supreme Court turned down. The courts have decided that Microsoft
possesses monopoly power and has used that power unlawfully to
protect its monopoly. The next step is to find a remedy that meets
the appellate court's standard to "terminate the monopoly,
deny to Microsoft the fruits of its past statutory violations, and
prevent any future anticompetitive activity." This proposed
settlement fails to do so. In fact, the weak settlement between
Microsoft and the Department of Justice ignores key aspects of the
Court of Appeals ruling against Microsoft. The decision gives
Microsoft "sole discretion" to unilaterally determine
that other products or services which don't have anything to do with
operating a computer are nevertheless part of a Windows Operating
System product. The deal fails to terminate the Microsoft monopoly
and, instead, guarantees its survival.
The flawed settlement empowers Microsoft to retaliate against
would-be competitors, take the intellectual property of competitors
doing business with it and permits Microsoft to define many key
terms, which is unprecedented in any law enforcement proceeding. In
addition, the proposed settlement contains far too many strong-
sounding provisions that are fiddled with loopholes. The agreement
requires Microsoft to share certain technical information with other
companies. However, Microsoft is under no obligation to share
information if that disclosure would harm the company's security or
software licensing. Who gets to decide whether such harm might
occur? Microsoft. The settlement says that Microsoft "shall
not enter into any agreement" to pay a software vendor not to
develop or distribute software that would compete with Microsoft's
products. However, another provision permits those payments and
deals when they are "reasonably necessary." The ultimate
arbiter of when these deals would be "reasonably
necessary?" Microsoft.
Furthermore, the weak enforcement provisions in this proposed
deal leave Microsoft free to do practically whatever it wants. The
company appoints half the members of its overseeing committee and
has the ability to violate regulations, knowing that whatever the
committee finds inappropriate is not admissible in court. Finally,
Microsoft must only comply with the lenient restrictions in the
agreement for only five years. This is clearly not long enough for a
company found guilty of violating antitrust law.
Sadly, the proposed final judgment has the potential to make the
competitive landscape of the software industry worse, it contains so
many ambiguities and loopholes that it may be unenforceable and will
likely lead to years of additional litigation. Various industry
experts from such institutions as Morgan Stanley, the Harvard
Business School, Schwab Capital Markets and Prudential Financial
have been quoted as saying that this settlement is beneficial to
Microsoft's current monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. Court decisions to break up these monopolies led to
prices declining as much as 70% and an increase in competition-
driven innovation. The end result is that Microsoft is now able to
preserve and reinforce its monopoly, and is also free to use
anticompetitive tactics to spread its dominance into other markets.
After more than 11 years of litigation and investigation against
Microsoft, surely we can do better.
Thank you for your time.
Regards,
Daniel Guiterras
Owner
The Globe
MTC-00029747
January 22, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court,
District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street, N. W.
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft fails to put an end to Microsoft's predatory
practices. The final settlement in U.S. v. Microsoft does not
adequately protect competition and choice, and fails to meet the
standards for a remedy set in the unanimous ruling against Microsoft
by the Court of Appeals for the District of Columbia. Its
enforcement provisions are vague and unenforceable. The five-year
time frame of the proposed settlement is far too short to deal with
the antitrust abuses of a company that has maintained and expanded
its monopoly power through years of fear and intimidation.
Microsoft's liability under the antitrust laws is no longer open
for debate. The company has been found liable before the District
Court, lost its appeal to the United States Court of Appeals for the
District of Columbia in a 7-0 decision, saw its petition for
reheating in the appellate court denied, and had its appeal to the
Supreme Court turned down. The courts have decided that Microsoft
possesses monopoly power and has used that power unlawfully to
protect its monopoly. The next step is to find a remedy that meets
the appellate court's standard to "terminate the monopoly,
deny to Microsoft the fruits of its past statutory violations, and
prevent any future anticompetitive activity." This proposed
settlement fails to do so. In fact, the weak settlement between
Microsoft and the Department of Justice ignores key aspects of the
Court of Appeals ruling against
[[Page 28736]]
Microsoft. The decision gives Microsoft "sole
discretion" to unilaterally determine that other products or
services which don't have anything to do with operating a computer
are nevertheless part of a Windows Operating System product. The
deal fails to terminate the Microsoft monopoly, and, instead,
guarantees its survival.
The flawed settlement empowers Microsoft to retaliate against
would-be competitors, take the intellectual property of competitors
doing business with it and permits Microsoft to define many key
terms, which is unprecedented in any law enforcement proceeding.
In addition, the proposed settlement contains far too many
strong-sounding provisions that are fiddled with loopholes. The
agreement requires Microsoft to share certain technical information
with other companies. However, Microsoft is under no obligation to
share information if that disclosure would harm the company's
security or software licensing. Who gets to decide whether such harm
might occur? Microsoft. The settlement says that Microsoft
"shall not enter into any agreement" to pay a software
vendor not to develop or distribute software that would compete with
Microsoft's products. However, another provision permits those
payments and deals when they are "reasonably necessary."
The ultimate arbiter of when these deals would be "reasonably
necessary?" Microsoft.
Furthermore, the weak enforcement provisions of this proposed
deal leave Microsoft free to do practically whatever it wants. The
company appoints half the members of its overseeing committee and
has the ability to violate regulations, knowing that whatever the
committee finds inappropriate is not admissible in court. Finally,
Microsoft must only comply with the lenient restrictions in the
agreement for only five years. This is clearly not long enough for a
company found guilty of violating antitrust laws.
Sadly, the proposed final judgment has the potential to make the
competitive landscape of the software industry worse, it contains so
many ambiguities and loopholes that it may be unenforceable and will
likely lead to years of additional litigation. Various industry
experts from such institutions such as Morgan Stanley, the Harvard
Business School, Schwab Capital Markets, and Prudential Financial
have been quoted as saying that this settlement is beneficial to
Microsoft's current monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. Court decisions to break up these monopolies led to
prices declining as much as 70% and an increase in competition-
driven innovation. The end result is that Microsoft is now able to
preserve and reinforce its monopoly, and is also free to use
anticompetitive tactics to spread its dominance into other markets.
After more than 11 years of litigation and investigation against
Microsoft, surely we can do better.
Thank you for your time.
Regards,
Alina Lopez-Centellas
Vice President
MTC-00029748
January 15, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court,
District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft does not put an end to Microsoft's questionable
practices. Does the final settlement in U.S. v. Microsoft adequately
protect competition and innovation in this vital sector of our
economy? Does it sufficiently address consumer choice and meet the
standards for a remedy set in the unanimous ruling against Microsoft
by the Court of Appeals for the District of Columbia? These
questions remain unanswered. The five-year time frame of the
proposed settlement is far too short to deal with the antitrust
actions of a company that has maintained and expanded its monopoly
power through years of unmatched success. Microsoft's liability
under the antitrust laws is no longer open for debate. The company
has been found liable before the District Court, lost its appeal to
the United States Court of Appeals for the District of Columbia in a
7-0 decision, saw its petition for reheating in the appellate
court denied, and had its appeal to the Supreme Court turned down.
The courts have decided that Microsoft possesses monopoly power and
has used that power unlawfully to protect its monopoly. The next
step is to find a remedy that meets the appellate court's standard
to "terminate the monopoly, deny to Microsoft the fruits of
its past statutory violations, and prevent any future
anticompetitive activity." This proposed settlement may not be
strong enough.. In fact, the settlement between Microsoft and the
Department of Justice ignores key aspects of the Court of Appeals
ruling against Microsoft. The decision gives Microsoft "sole
discretion" to unilaterally determine that other products or
services which don't have anything to do with operating a computer
are nevertheless part of a Windows Operating System product. The
deal fails to terminate the Microsoft monopoly and, instead,
guarantees its survival.
The settlement empowers Microsoft to retaliate against would-be
competitors, take the intellectual property of competitors doing
business with it and permits Microsoft to define many key terms,
which is unprecedented in any law enforcement proceeding.
In addition, the proposed settlement contains far too many
strong-sounding provisions that are fiddled with loopholes. The
agreement requires Microsoft to share certain technical information
with other companies. However, Microsoft is under no obligation to
share information if that disclosure would harm the company's
security or soft-ware licensing. Who gets to decide whether such
harm might occur? Microsoft. The settlement says that Microsoft
"shall not enter into any agreement" to pay a software
vendor not to develop or distribute software that would compete with
Microsoft's products. However, another provision permits those
payments and deals when they are "reasonably necessary."
The ultimate arbiter of when these deals would be "reasonably
necessary" Microsoft.
Furthermore, the provisions in this proposed deal leave
Microsoft free to do practically whatever it wants. The company
appoints half the members of its overseeing committee and has the
ability to violate regulations, knowing that whatever the committee
finds inappropriate is not admissible in court. Finally, Microsoft
must only comply with the lenient restrictions in the agreement for
only five years. This is clearly not long enough for a company found
guilty of violating antitrust law.
Various industry experts from such institutions as Morgan
Stanley, the Harvard Business School, Schwab Capital Markets and
Prudential Financial have been quoted as saying that this settlement
is beneficial to Microsoft's current monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. Court decisions to break up these monopolies led to
prices declining as much as 70% and an increase in competition-
driven innovation.
The end result is that Microsoft may still be able to preserve
and reinforce its monopoly, After more than 11 years of litigation
and investigation against Microsoft, I eagerly await what is to be
the final outcome.
Thank you for your time.
Regards,
K. William Leffland
Past Dean
Florida International University
MTC-00029749
January 15, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court,
District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft does not put an end to Microsoft's questionable
practices.
Does the final settlement in U.S. v. Microsoft adequately
protect competition and
[[Page 28737]]
innovation in this vital sector of our economy? Does it sufficiently
address consumer choice and meet the standards for a remedy set in
the unanimous ruling against Microsoft by the Court of Appeals for
the District of Columbia? These questions remain unanswered. The
five-year time frame of the proposed settlement seems far too short
to deal with the multiple antitrust actions of a company that has
maintained and expanded its monopoly power through years of
unmatched success. Microsoft's liability under the antitrust laws is
no longer open for debate. The company has been found liable before
the District Court, lost its appeal to the United States Court of
Appeals for the District of Columbia in a 7-0 decision, saw
its petition for reheating in the appellate court denied, and had
its appeal to the Supreme Court turned down. The courts have decided
that Microsoft possesses monopoly power and has used that power
unlawfully to protect its monopoly. The next step is to find a
remedy that meets the appellate court's standard to "terminate
the monopoly, deny to Microsoft the fruits of its past statutory
violations, and prevent any future anticompetitive activity."
This proposed settlement may not be strong enough.. In fact, the
settlement between Microsoft and the Department of Justice seems to
ignore key aspects of the Court of Appeals ruling against Microsoft.
The decision as it stands gives Microsoft "sole
discretion" to unilaterally determine that other products or
services which don't have anything to do with operating a computer
are nevertheless part of a Windows Operating System product, thus
falling to terminate Microsoft's standing position in the market.
The settlement allows Microsoft to retaliate against would-be
competitors, take the intellectual property of competitors doing
business with it and permits Microsoft to define many key terms,
which is unprecedented in any law enforcement proceeding.
In addition, the proposed settlement contains far too many
strong-sounding provisions that are fiddled with loopholes. The
agreement requires Microsoft to share certain technical information
with other companies. However, Microsoft is under no obligation to
share information if that disclosure would harm the company's
security or software licensing. The question is, who gets to decide
whether such harm might occur? The settlement says that Microsoft
"shall not enter into any agreement" to pay a software
vendor not to develop or distribute software that would compete with
Microsoft's products. However, another provision permits those
payments and deals when they are "reasonably necessary."
The ultimate arbiter of when these deals would be "reasonably
necessary?" Microsoft.
Furthermore, the provisions in this proposed deal may create a
scenario in which Microsoft has too much freedom. The company
appoints half the members of its overseeing committee and has the
ability to violate regulations, knowing that whatever the committee
finds inappropriate is not admissible in court. Finally, Microsoft
must only comply with the lenient restrictions in the agreement for
only five years. This is clearly not long enough for a company found
guilty of violating antitrust law.
Various industry experts from such institutions as Morgan
Stanley, the Harvard Business School, Schwab Capital Markets and
Prudential Financial have been quoted as saying that this settlement
is beneficial to Microsoft's current monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. Court decisions to break up these monopolies led to
prices declining as much as 70% and an increase in competition-
driven innovation. The end result is that Microsoft may still be
able to preserve and reinforce its predominance. After more than 11
years of litigation and investigation against Microsoft, I eagerly
await what is to be the final outcome.
Thank you for your time.
Regards,
Gustavo Godoy
Publisher
Vista Magazine
MTC-00029750
January 7, 2001
Hon. Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotally:
The recent proposed settlement between the Department of Justice
and Microsoft falls to put an end to Microsoft's predatory
practices.
The final settlement in U.S. v. Microsoft does not adequately
protect competition and innovation in this vital sector of our
economy, does not sufficiently address consumer choice and fails to
meet the standards for a remedy set in the unanimous ruling against
Microsoft by the Court of Appeals for the District of Columbia. Its
enforcement provisions are vague and unenforceable. The five-year
time frame of the proposed settlement is far too short to deal with
the antitrust abuses of a company that has maintained and expanded
its monopoly power through years of fear and intimidation.
Microsoft's liability under the antitrust laws is no longer open
for debate. The company has been found liable before the District
Court, lost its appeal to the United States Court of Appeals for the
District of Columbia in a 7-0 decision, saw its petition for
reheating in the appellate court denied, and had its appeal to the
Supreme Court turned down. The courts have decided that Microsoft
possesses monopoly power and has used that power unlawfully to
protect its monopoly. The next step is to find a remedy that meets
the appellate court's standard to "terminate the monopoly,
deny to Microsoft the fruits of its past statutory violations, and
prevent any future anticompetitive activity." This proposed
settlement falls to do so. In fact, the weak settlement between
Microsoft and the Department of Justice ignores key aspects of the
Court of Appeals ruling against Microsoft. The decision gives
Microsoft "sole discretion" to unilaterally determine
that other products or services which don't have anything to do with
operating a computer are nevertheless part of a Windows Operating
System product. The deal fails to terminate the Microsoft monopoly
and, instead, guarantees its survival.
The flawed settlement empowers Microsoft to retaliate against
would-be competitors, take the intellectual property of competitors
doing business with it and permits Microsoft to define many key
terms, which is unprecedented in any law enforcement proceeding. In
addition, the proposed settlement contains far too many strong-
sounding provisions that are riddled with loopholes. The agreement
requires Microsoft to share certain technical information with other
companies. However, Microsoft is under no obligation to share
information if that disclosure would harm the company's security or
software licensing. Who gets to decide whether such harm might
occur? Microsoft. The settlement says that Microsoft "shall
not enter into any agreement" to pay a software vendor not to
develop or distribute software that would compete with Microsoft's
products. However, another provision permits those payments and
deals when they are "reasonably necessary." The ultimate
arbiter of when these deals would be "reasonably
necessary?" Microsoft.
Furthermore, the weak enforcement provisions in this proposed
deal leave Microsoft free to do practically whatever it wants. The
company appoints half the members of its overseeing committee and
has the ability to violate regulations, knowing that whatever the
committee finds inappropriate is not admissible in court. Finally,
Microsoft must only comply with the lenient restrictions in the
agreement for only five years. This is clearly not long enough for a
company found guilty of violating antitrust law.
Sadly, the proposed final judgment has the potential to make the
competitive landscape of the software industry worse, it contains so
many ambiguities and loopholes that it may be unenforceable and will
likely lead to years of additional litigation. Various industry
experts from such institutions as Morgan Stanley, the Harvard
Business School, Schwab Capital Markets and Prudential Financial
have been quoted as saying that this settlement is beneficial to
Microsoft's current monopolistic intentions.
Antitrust law has protected free markets and enhanced consumer
welfare in this country for more than a century. The Microsoft case
does not represent a novel application of the law, but is the kind
of standard antitrust enforcement action that could ensure vigorous
competition in all sectors of today's economy. These same standards
have been applied to monopolies in the past, such as Standard Oil
and AT&T. Court decisions to break up these monopolies
[[Page 28738]]
led to prices declining as much as 70% and an increase in
competition-driven innovation. The end result is that Microsoft is
now able to preserve and reinforce its monopoly, and is also free to
use anticompetitive tactics to spread its dominance into other
markets. After more than 11 years of litigation and investigation
against Microsoft, surely we can do better.
Thank you for your time.
Regards,
Ben Quevedo, Jr.
Vice President- Administration Alliance Air, Inc.
Alliance Air, Inc.
MTC-00029751
7505 S Avenida de Belleza
Tucson, AZ 85747-9707
January 23, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing you this brief letter to ask you to utilize your
office and influence to expedite the finalization of the settlement
proposal in the Microsoft anti-trust case. This case is three years
old, It has been the subject of endless controversy and continuous
litigation, negotiation and mediation, and is now ready and ripe for
settlement. Your Justice Department and Microsoft have reached an
agreement. It is fair, timely and overdue. Please support it.
The agreement will allow Microsoft to retain its present
corporate structure. In return Microsoft will substantially change
its marketing practices and marketplace philosophy. Microsoft will
hereafter promote the use of non-Microsoft software by reconfiguring
its Windows platform systems to readily accept competitors"
products. Microsoft will now even share certain Windows technology
with the rest of the industry in order to facilitate innovation and
choice for consumers. Within the industry Microsoft will now license
its Windows products to major computer manufacturers at similar
terms and prices. This settlement contains all of this and more in
an effort to prod Microsoft's competitors to greater market share.
Such concessions merit a settlement.
Let's let Microsoft get back to the work of leading the IT
industry into this new century.
Sincerely,
Charlie Tucker
MTC-00029752
RI?RESINTATIVE J. SAM ELLI?
I you O?ETAICT ORRJCE AOO??OG:
?OT LODI?LATIVE OR?ICE BUILOING??L?J??. NC 37401-10??
TELE?NONE: ? 735-6788
? 715-7080 ?
HOHI AOC????; ? AU?UAN KWICNTOAL K ROAD
??LCICII. NC 2741?
Ms. Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite
Washington, DC 20530
Dear Ms. Hesse:
The United States Department of Justice has wisely approved the
proposed consont docr??e that would end the federal government's
three-year antitrust case against Microsoft. The North Carolina
Department of Justice has done the same. I believe it is now time
for the federal courts to accept the settlement and put an end to
this unwise and unnecessary litigation.
Yes, Microsoft has been a tough competitor. But the purpose of
antitrust law is to protect the consumer, not to protect the market
share of competitors. I have never seen proof set forth that
Microsoft's business practices hurt consumers, Software has become
more available, easier to use and less expensive. Millions of people
have been able to use computers for the first time. Where is the
consumer harm?
Yes, in the interests of settling this case and ending the
litigation, Microsoft has now agreed to accept unprecedented curbs
on how it does business. It must provide more information to
competitors and computer manufacturers. It must change the way it
develops, licenses and market its software. It must accept the
oversight of a technical committee.
These are remarkable concessions. They were developed in tough
negotiation led by a court-appointed mediator. They offer something
for both sides. More important, they offer Microsoft, this industry
and the technology-dependent economy the opportunity to end the
costly and time-consuming litigation.
I sincerely hope the federal court will approve this settlement.
It is time to put an end to this ill-advised case.
Sincerely,
Sam Ellis
MTC-00029753
Ms. Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW. Suite 1200
Washington, DC. 20530
Fax 202-616-9937
Mictoso?? att??
Dear Ms. Hesse:
From the beginning, the federal government's pursuit of
Microsoft has been politically inspired and economically unwise. The
case was conceived and even subsidized in the beginning by
Microsoft's competitors. They sought to win in the courts what they
could not win in the market. The government should never have
initiated this proceeding. Now the courts have an opportunity to end
this madness. Three years and $30 million of the taxpayers money is
enough. At a time when terrorists threaten America and we are facing
an economic slowdown, our nation. the information technology
industry and Microsoft should not be forced to waste more time and
money on this case. It is time to move ahead. Please put and end to
this travesty.
Sincerely.
Ballard Evere??t
MTC-00029754
Rick Wolf
435 Glen Park Drive
Bay Village, Ohio 44140
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvanta Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
Microsoft and the Department of Justice recently reached an
agreement ending a three-year-long antitrust suit. I am in the
computer industry and thus feel more confident to comment on the
case. It should not have happened. The case was brought simply to
give an advantage to Microsoft's competitors. I am as happen as I
can be with the settlement, and hope this issue is finally over.
What is totally ignored, and what I don't understand, is the lack of
recognition of the way things were before Microsoft. Before
Microsoft, there was no compatibility between software packages. You
could have ten different software packages, none of which
"talked" to cash other and you were left to have to deal
with ten different companies. Nothing worked. Bill Gates saw an
opportunity and seized it. Isn't that what you're supposed to do?
Would it have been any better if it had been Sun Microsystems? Or
IBM? Would the Justice Department be hounding these companies? Is
success in this country only acceptable if kept within limits
strictly define by the federal government? I have problems with the
federal government and its intrusion into our everyday life. Can I
bring suit against the federal government for being to large?
Another example is AT&T. We had the best phone system in the
world. Now, I do not understand my phone bill, I have to talk to any
number of people, none of which take responsibility for my problem.
I pay just as much for a fraction of the service. But, hey, the goal
was accomplished; break up AT&T. It was too big, too good.
The result of Microsoft's "business practices" is
widely available, higher quality software at a very reasonable
price. The only harm to the consumer comes from lawsuits like these.
Companies should spend their money on research and development not
legal fees. If my government wants to fix something that's broke,
they should take a look at the medical industry.
I appreciate your time in this matter, and would like to
reiterate that fact that I am happy with the settlement. The economy
can now move on.
Sincerely,
Rick Wolf
MTC-00029755
Evelyne N. Byll-Paul
12432 Braxted Drive ??
Orlando, FL 32837
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to register my opinion in support of the Microsoft
settlement, To begin with, I agree with the 32 states that decided
to not join the case in the first place. I don't think there was any
justification for the lawsuit, and there wasn't any real evidence
that consumers had been overcharged or
[[Page 28739]]
deprived in any way. There has always been flee choice in the
computer marketplace, and people simply chose Microsoft's Windows
over other systems, and a stronger market of partnering companies
has built up around Windows.
I work with Microsoft Windows NT to administer a local area
network (LAN) in my division of our healthcare company, and we use a
non-Microsoft billing software package customized for our industry.
This collaboration is part of the strength of the Microsoft Windows
system. The settlement will encourage still greater cooperation. For
instance, Microsoft will release its software codes and allow
computer makers to be more flexible in how, or if, they load Windows
or other Microsoft software. The programs included in Windows
installation, such as Internet Explorer browser and Windows Media
Player, will be made easier to remove and substitute with non-
Microsoft products, like Netscape Navigator, Software experts on a
government-sponsored technical committee will monitor Microsoft for
compliance with the agreement, and investigate complaints. These
provisions should enable the industry to make creative use of
Microsoft's Windows innovations, and assure the industry that
Microsoft will live up to the agreement. I appreciate the leadership
you have provided in seeing that the settlement is approved by the
Federal Court's new judge on this case. Once this case is resolved,
the American will be better off. Thank you for considering my public
comment.
Sincerely,
Evelyne Byll-Paul
CC: Representative Rick Keller
MTC-00029756
FAX COVER SHEET
Aldosoft
569 Haight Street,
San Francisco, CA 94117
Work Voice:
Fax: (415) 861-5758
Home Voice: (415) 861-5758
To: Department of Justice
Company:
Fax: 1, 202-307-1454
Work Voice:
Home Voice:
From: Michael Alderete
Date: January 28, 2002
Time: 8:02 am
Number of pages, including cover: 4
Notes:
My comments on the proposed settlement of the Microsoft anti-
trust trial, exercised under the Tunney Act.
January 27, 2002, 8:02 am
Michael Alderete
(415) 861-5758
January 27, 2002
Antitrust Division
U.S. Dept. of justice
601 D Street NW, Suite 1200
Washington DC, 20530-001
To Whom It May Concern:
I am writing to exercise my right under the Tunney Act to voice
my strong disapproval of the current proposed settlement of the
Microsoft anti-trust trial. The proposed settlement is both weak and
lacking strong enforcement provisions, and is likely to have zero
(or worse) effect on competition within the computer industry, with
continued and increased harm to consumers in the form of fewer
options in the software market and continued increases in the price
of the Microsoft software consumers are forced to buy.
Microsoft was convicted of abuse of monopoly power by one
Federal judge, and the judgment was largely upheld by another seven
Federal justices. In evaluating any proposed settlement, keep
repeating one Important Phrase over and over: "Microsoft is
guilty." The seven justices of the appeals court ruled that
any actions taken against Microsoft (a) must restore competition to
the affected market, (b) must deprive Microsoft of the "fruits
of its illegal conduct," and (c) must prevent Microsoft from
engaging in similar tactics in the future. The proposed settlement
fails on every one of these.
A) Restore Competition
Among the many flaws in the proposed settlement is the complete
disregard for the Open Source software movement, which poses the
single greatest competitive threat to Microsoft's monopoly. Most
organizations writing Open Source software are not-for-profit
groups, many without a formal organization status at all. Section
III(1)(2) contains strong language against non-for-profits, to say
nothing of the even less-formal groups of people working on
projects. Section III(D) also contains provisions which exclude all
but commercially-oriented concerns. To restore competition the
settlement must make allowances for Open Source
organizations--whether formal not-for-profit organizations or
informal, loosely associated groups of developers--to gain
access to the same information and privileges afforded commercial
concerns.
B) Deprivation of Ill-Gotten Gains
Nowhere in the proposed settlement is there any provision to
deprive Microsoft of the gains deriving from their illegal conduct.
Go back to the Important Phrase: "Microsoft is guilty."
In most systems of justice, we punish the guilty. But the current
proposal offers nothing in the way of punishment, only changes in
future behavior. Currently Microsoft has cash holdings in excess of
US$40 billion, and increases that by more than US$1 billion each
month. A monetary fine large enough to have an impact on them would
be a minimum of US$5 billion.
Even a fine that large would be a minimal punishment.
Microsoft's cash stockpile is used, frequently and repeatedly, to
bludgeon competitors, buy or force their way into new markets, or
simply purchase customers, with the long-term intent to lock people
and organizations into proprietary software on which they can set
the price. Taking a "mere" US$5 billion from their
stockpile will have zero effect on this practice.
For that reason, Microsoft's cash stockpile must be further
reduced. In addition to the monetary fine, Microsoft should be
forced to pay shareholders a cash dividend in any quarter in which
they post a profit and hold cash reserves in excess of USS10
billion. The dividend should be substantial enough to lower
Microsoft's cash holdings by US$1 billion, or 10%, whichever is
greater.
C) Prevention of Future Illegal Conduct
The current proposed settlement allows Microsoft to effectively
choose two of the three individuals who would provide oversight of
Microsoft's conduct and resolve disputes. The proposed settlement
also requires the committee to work in secret, and individuals
serving on the committee would be barred from making public or
testifying about anything they learn. This structure virtually
guarantees that Microsoft will be "overseen" by a do-
nothing committee with virtually zero desire or ability to either
correct Microsoft abuses, or even call attention to them.
Instead of the current proposal, a five-person committee should
be selected. Microsoft may appoint one person, but will have no
influence over any of the other four. For the four, two should be
appointed by the Federal court of jurisdiction, one should be
appointed by the U.S. Department of Justice, and one should be
appointed by the U.S. Senate. At least two of the appointees should
have technical experience and be competent to evaluate technical
proposals and arguments by themselves, without the filters which
assistants would bring.
These are hardly the only thoughtful and reasonable suggestions
you will no doubt receive regarding the proposed settlement of this
anti-trust case. And these are hardly the only suggestions which
should be adopted if the settlement is to prove effective. Rut all
of them are essential to that aim, and adopt them you must.
Thank you for your time and the opportunity to comment.
Respectfully,
Michael A. Alderete
569 Haight Street
San Francisco, CA 94117
(415) 861-5758
michael @ alderete.com
MTC-00029757 to
Dept. of Justice
c/o Mrs. Renata B. Hesse
Please approve the settlement to-day for Microsoft.
As a taxpayer I am keen to see costs ended.
Thanks,
Joanna Gianeti Wood
Shreveport, LA
MTC-00029758
JUDY PONTO
601 N 35th Avenue,
Yakima, WA 98902
January 23, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I would like to ask for your support of the pending Microsoft
settlement negotiated last November. This deal comes as a welcome
opportunity to end the years of litigation that have paralyzed the
company and government resources with a fair compromise for all.
Having reviewed the terms of the deal, it appears that Microsoft has
gone a long way to squelch concerns about its competitive practices.
They will allow more flexibility for computer makers to include the
software programs of their choosing within the
[[Page 28740]]
Windows operating system, and will provide competitors with access
to their internal technologies, even to the extent that Microsoft
will license their intellectual property. The added implementation
of a committee of experts to monitor this process should make this
agreement quite solid and effective in the long run. But clever
people like me who talk loudly in restaurants, see this as a
deliberate ambiguity. A plea for justice in a mechanized society.
I look forward to your approval of the proposed settlement. Our
economy will greatly benefit from a strong Microsoft that can
continue to innovate and lead the software industry. Thank you very
much.
Sincerely,
MTC-00029760
1111 Harbor Lane
Gulf Breeze, FL 32563
January 27, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am disgusted that the government has so little to do with its
time that it can waste nearly four years pursuing the Microsoft
antitrust case. I hoped that the economy, which has been suffering
ever since this case began, would have the chance to recover.
Microsoft's opponents have kept after Microsoft for so long. It is
truly becoming tedious.
The settlement provides Microsoft's competitors with the
opportunity to use Microsoft's technological advances to their own
advantage, in order to restore an atmosphere of fair competition to
the technology market. For example, Microsoft will reformat future
versions of Windows so that its competitors will have the
opportunity to introduce their own software directly into the
Windows operating system. Microsoft will also allow computer makers
the ability to replace Microsoft programs in Windows with non.
Microsoft alternatives.
The settlement is fine; in fact, I think it would be harmful to
the consumer to extend litigation any longer. The suit is no longer
about program; it is about inhibition. America desperately needs to
be able to progress. I urge you and your office to take the
necessary action to see this settlement finalized.
Sincerely,
Edwin Barksdale
cc: Representative Jefferson Miller
MTC-00029761
1-28-02
MS. Renata B. Hesse
DOJ
"Approve the Microsoft Settlement"
Christel K. Draeger
13009 W. Willow Creek Lane
Huntley, IL 60142
MTC-00029762
10 Benjamin Lane
Cortland Manor, NY 10567
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
As a computer professional in the technology industry, I am
writing in favor of Microsoft. Microsoft is innovative, great for
the technical sector and great for the economy. Look at what's
happened to the technical sector and the NASDAQ since Microsoft went
to litigation. Perhaps if we wrap this case up, we will see a
rebound in those sectors.
Microsoft is going out of their way to wrap up this case, beyond
what would be expected in any antitrust case. They settled after
extensive negotiations with a mediator and agreed to the
establishment of a technical committee that will monitor their
compliance with the settlement and assist with resolving any
disputes.
Microsoft has been through a lot these last few years. Let's
move on. There are far greater issues that warrant our attention.
Thanks.
Sincerely,
Ernie Dufek
MTC-00029763
HODGDON POWDER CO., INC.
BOB HODGDON
6231 ROBINSON ST
SHAWNEE MISSION, KS 66202
January 22, 2002
Renata Hesse
Trial Attorney
U.S. Department of Justice
601 "D" Street NW-Suite 1200
Washington, DC 20530
Ms. Hesse:
I am writing to encourage your support for the Microsoft
antitrust settlement. What seems to have been lost in this case is
that there was not one shred of firm evidence offered linking
Microsoft to a single case of actual harm to consumers anywhere in
the country. Yet, consumer harm was the premise for the launching of
this suit against the company.
I believe that Microsoft's offer to pay the legal expenses of
the remaining states is a sign that the company is tired of being
distracted by this case--especially given the recession we find
ourselves in. I believe that the American people are also growing
tired of officials like Kansas's own General Stovall continuing to
drag it out.
Many have lost jobs, had their savings and investments
evaporate, and are watching the technology sector nose-dive. Much of
which is the cause of this lawsuit.
The last thing we need in the middle of a recession is a
crippled technology industry and an out-of-control litigious
government. This case should have been settled long ago. The Bush
Administration says so and nine other states have said so--I
hope you see it that way too.
Sincerely,
Bob Hodgdon
MTC-00029764
2401 Zion Hill Road
Weatherford, TX 76088
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing you today to express my opinion in regards to the
Microsoft settlement issue. I support the settlement that was
reached in November and believe this agreement will serve iv, the
best public interest. I am a Microsoft supporter and feel that this
company should not be punished for being successful.
Microsoft has agreed to all terms and conditions of this
settlement. Under this agreement, Microsoft must grant computer
makers broad new rights to configure Windows so as to promote non-
Microsoft software programs that compete with programs included
within Windows.
Microsoft has also agreed to document and disclose for use by
its competitors various interfaces that are internal to Windows'
operating system products.
We are facing difficult times and a lagging economy. We do not
have time to waste on expensive litigation that will not benefit the
public. Please support this settlement and allow Microsoft to get
back to business. Thank you for your time.
Sincerely,
MTC-00029765
ARVIDA
Realty Services
OFFICE: 941-925-8586
FAX: 941-925-8750
COMMERCIAL DIVISION
TO: ??.FAX NUMBER: 202 307-1454
FROM: J.C. Jordan.#PAGES INCLUDING COVER: 2
E-MAIL ADDRESS: TARHEEL18J @ AOL.COM
2227 Brookhaven Drive
Sarasota, FL 34239
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
As a citizen of this great nation, ! am writing to give my
support to the settlement reached between the Justice Department and
Microsoft. I support Microsoft, because they have a right to free
enterprise. The government needs to stop their prosecution of
Microsoft once and for all. As a real estate broker, I use
Microsoft's products at my work, and feel their products are the
most user friendly on the market.
This settlement was reached after many hours of negotiations
with a court-appointed mediator. Microsoft has agreed to document,
and disclose for use by its competitors various interfaces that are
internal to Windows operating system products.
Furthermore, Microsoft also has agreed to the establishment of a
three person technical committee. This committee will monitor
Microsoft's compliance with the settlement, and aid in dispute
resolution. Further pursuit of Microsoft would be a waste of time
and money.
Sincerely
J.C. Jordan
MTC-00029766
8632 15th Avenue
Brooklyn, NY 11228
[[Page 28741]]
January, 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
This letter is to urge you to give your approval to the
Microsoft settlement, This would end three years of court battles
between Microsoft and the Department of Justice. The two parties
have agreed to this agreement and I do not think it is the place of
others to second-guess the decision. The fact that a federal judge
accepted it is also evidence of a settlement. It has gone on far too
long. It is time to quit wasting taxpayers' money and put some of
that money towards things that are needed more, like highways,
schools, the environment.
Microsoft has agreed to a great many of the terms demanded by
Justice. There is internal interlace disclose, computer-maker
flexibility, granting computer makers new rights to configure
Windows to promote non-Microsoft programs; there is an oversight
committee. What more is there? Why should anyone work to make a
company work, or invent something, if only to have to give it away?
This whole lawsuit sets a very bad precedent.
I urge you to let this decision stand and let us go forwards,
not backwards.
Sincerely,
Shirley Hui
MTC-00029767
8632 15th Avenue
Brooklyn, N11228
January, 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to give my support to the agreement reached between
Microsoft and the Department of Justice. I did not support the
original lawsuit against Microsoft I do not think the case was
warranted. The lawsuit was more political than any outrage over
unethical business dealings. Bill Gates has carried the
technological revolution on his shoulders. He has enabled the
average person to become part of the technological age. Does anyone
remember what it was like before Microsoft? Bill Gates standardized
computer software to enable its compatibility with other software.
And people bought the product, because it was the best.
Bill Gates has agreed to any number of terms demanded from the
Department of Justice. Microsoft has agreed to share its source
codes and books pertaining to Windows. that Windows uses to
communicate with other programs: Microsoft has agreed to a three
person technical committee to monitor future compliance; Microsoft
has agreed to contractual restrictions and intellectual property
rights. This is more than fair.
Give your approval to this agreement Allow us to get back to
work.
Sincerely,
Marc Hui
MTC-00029768
John & Geraldine Walker
Rouse 2, Box 126
Altoona, KS 66710
January 19, 2002
Ms. Renata Hesse
U.S. Department of Justice, Anti-trust
601 "D" Street NW, Suite 1200
Washington, DC 20530
Ms. Hesse:
Thank you for the opportunity to submit written comments
regarding the proposed settlement of the anti-trust case against
Microsoft.
I strongly support settlement of this case. In my opinion, the
sooner it is put to rest the better. I was not in support of the
case being brought in the first place, but am glad that at least
most of the suit's participants have found a solution that is
acceptable to them.
I understand the role of government in protecting consumers from
entrenched monopolies, however I do not believe the laws on the
books with regard to this apply to today's high tech industry. In
the last few years of the anti-trust lawsuit against Microsoft the
high tech industry has already changed significantly, proving that
the marketplace is a far better regulator of corporate behavior than
the courtroom.
I urge the court to approve the proposed settlement of the
Microsoft case. It is the best course of action for our federal
government to take.
Sincerely,
Mrs. John walker
MTC-00029769
EARL LAIRSON & CO.
A Professional Corporation
Certified Public Accountants
TEL 713-621-1515
FAX 713-621-1570
P.O. Box 924948
HOUSTON, TEXAS 77292-4949
11 Gr??way Plaza. Suite 1515
HOUSTON. TEXAS 77045
January 27, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
The tentative Microsoft settlement should be enacted at the end
of January. The onslaught of this attack against Microsoft has
stifled productivity in the technology markets, The enactment of
this settlement, conversely, will increase confidence in the tech
sector. With the recent recession causing layoffs in every industry,
now is the time to finalize this settlement.
Further the settlement has many points that will benefit members
of the tech industry. Under the terms of the agreement Microsoft
will now provide for the disclosure of protocols that are internal
to the Windows system. This will enable developers to create
software that is more compatible with the Windows system.
I encourage the Justice Department to enact this settlement.
Sincerely,
Earl Lairson
MTC-00029770
350 Plaza Estival
San Clemente, CA 92672
January 28, 2002
Attorney General John Ashcroft
United States Department of Justice
950 Pennsylvania Ave, NW
Washington, DC 20530
Dear Mr. Ashcroft:
As a retiree who has been following this Microsoft antitrust
case, I think it's time to leave Microsoft alone. Now that a
settlement has been reached, let's move on.
Microsoft did not get off as easy as its opponents would have
people think. They agreed to terms that were well beyond what would
be expected in any antitrust case. Microsoft also agreed to give
computer companies the right to configure Windows in order to
promote their software programs that compete with programs within
Windows. Is there any other software company out there that does
this?
Enough is enough. There is no further need for litigation. I
urge you to accept the settlement. Microsoft has cooperated, and now
we need to do our part to get the economy going.
Sincerely,
Ed Raphael
cc: Representative Darrell Issa
MTC-00029771
Tim L. Long
January 24, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
The basis of the Microsoft lawsuit has been weak Cram the start,
a failed attempt to shake Microsoft through negative media attention
trod distraction. Microsoft has been hog tied by fresh legal
complaints answering each advance they have made since the original
suit, I fail to see how Microsoft is more corrupt than any other of
the litigating parties, as opposition has blatantly used the courts
to stall Microsoft in hopes of their own gain.
The lawsuit against Microsoft may have originated with
legitimate concerns regarding modern day antitrust issues, but has
digressed to a manipulation of the courts by misguided ambition.
Enough resources have been wasted on this debacle. The proposed
settlement should be an acceptable solution for all, After all,
Microsoft's competition has already won more than three years worth
of media battles and scrutiny throughout the trial.
Sincerely,
1830-2nd Street SW.
Cedar Rapids, ??owa 52404
MTC-00029772
INDEPENDENT WOMEN'S FORUM
PO Box 3058,
Arlington, VA 22203
PH: 703-558-4991
FX: 703-558-4994
FAX
To: Ms. Renata B. Hesse.
From: Nancy Pfotenhauer
Company: Department of Justice.
Phone:
[[Page 28742]]
FAX: 202-616-9937.
Date: 01/28/02
Re: Microsoft Settlement.
pages: 3
Comments:
January 28, 2002
Ms, Renata B. Hesse
Trial Attorney
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
SUBJECT: Microsoft Settlement
Dear Ms. Hesse:
I am writing you today on behalf of the Independent Women's
Forum to strongly advocate acceptance of the proposed Final Judgment
offered by the U.S. Department of Justice (and endorsed by nine
state attorneys general) to resolve the antitrust case against
Microsoft Corporation. The Independent Women's Forum (IWF) is a non-
partisan organization that focuses on issues that matter to women.
We were formed in 1992 and have counted among our members some of
the most credentialed legal scholars, economists and policy experts
in our nation's capitol and across the country.
As president of IWF, I am convinced that technological
innovation is essential to enabling women to meet the competing
pressures of our lives. When we speak with working mothers across
the country it is clear that the most difficult challenge they face
is balancing the demands of work and family. As a mother of five who
works full time, I can tell you that I would have voted in a 34 hour
day a long time ago if that were possible. Without the aide of
technology, I do not believe it would have been possible for me to
succeed at work and at home. For this reason--and for those
detailed below--I was shocked at the government's initial
attack on a company that has brought consumers so much innovation
and quality of life enhancing products.
As a professional economist, this proposed settlement quite
frankly seems more than generous on the part of Microsoft. Any
prolonging of the matter seems unjustified on economic or legal
criteria. Candidly, it seems more motivated by competitors who would
rather use government as a tool to hobble their commercial adversary
than by any supportable antitrust theory. Even the Court of Appeals
concluded that only inferential evidence exists that there is any
causal link between Microsoft's conduct and its continuing position
in the market. P.O. Box 3058, Arlington, Virginia 22203-0058
Phone: 703-558-4991 Fax: 703-558-4994
Website: www.iwf.org
On the other hand, there seems very well-documented evidence
that the original case against this company was launched as
competitors spent vast amounts of money hiring former government
officials whose sole job was to find an acceptable
"hook" for the Antitrust Division at the Department of
Justice. Additionally, the judge's very public comments to the media
evoked an image of the old Salem witch-trials. As you are aware, the
Court or' Appeals criticized him sharply. Unfortunately, by then,
most of the public damage to Microsoft's reputation had been done,
We are concerned that this entire exercise will dissuade others from
taking the entrepreneurial risks inherent in creating new products
for consumers.
The IWF calls on the Department of Justice to accept the
settlement that the federal government and the attorneys general of
nine states have already approved. As female consumers who
desperately want and need top quality technology products at
reasonable prices in order to balance, the twin pressures of work
and family, we ask you to end this legal wrangling that benefits no
one and costs millions of taxpayer dollars.
Respectfully submitted,
Nancy M. Pfotenhauer
President, The Independent Women's Forum
MTC-00029773
23648 Sunnyside Lane
Zachary, Louisiana 70791
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I would like to take some time and go on record as being an
advocate of the settlement that was reached between the Justice
Department and the Microsoft Corporation. It was about time that a
settlement has been proposed, and I only hope that it is approved as
soon as possible. Microsoft did not get off the hook easy, not by
any means. But, the settlement will help in fostering competition in
the technology industry and will also give the American economy the
shot in the arm that it needs. I think that forcing Microsoft to
give up its intellectual property is a bit much, but whatever it
takes to improve our economy is fine by me. Microsoft will make
available to its competitors, on reasonable and non-discriminatory
terms, any coding that Windows uses to communicate with another
program running on it. Clearly, this settlement is more than just a
slap on Microsoft's corporate wrists.
This is going a bit far, but it is in the best interest of the
nation to bring an end to this lawsuit. I am in support of this
settlement because it does so. Thank you.
Sincerely,
Sherry Zorzi
MTC-00029774
12361 Charlotte Street
Kansas City, MO 64146
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to express my belief that you should accept the
settlement reached between your department and Microsoft. This case
has been going on for three years. If you choose to return to court
and litigate an outcome, it may be three more years before a
judgment is reached, and then additional time will be required for
appeals.
The agreement your department reached with Microsoft provides a
concrete, immediate resolution to the case. The agreement may nor
contain exactly everything you want, but it is a certain resolution
in a time when our economy could use the certainty the agreement
provides. The agreement's provisions relating to uniformity in
pricing practices, an end to exclusivity requirements in
distributorship contracts, and the opening of Windows to competition
offer an improvement over the present situation. They also offer a
degree of certainty that will not be afforded if the case continues.
Please end the case by going forward with the settlement agreement
your department reached last year. We will all benefit from it.
Sincerely,
Carol Albertsen
MTC-00029775
1OOO Chesterbrook Boulevard Suite 101
Berwyn, Pennsylvania 19312
January 28, 2002
Attorney General 3ohn Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am happy to hear about the settlement that has been worked out
with Microsoft. It has taken three long year, to finally reach an
agreement like this that is fair for both sides. I hope that the
Federal government will let this be it and finally put the matter to
rest.
The settlement is fair. First of all, Microsoft will adhere to a
uniform pricing list when licensing Windows out to the larger
computer vendors in the United States. Also, Microsoft has agreed
not to retaliate against companies that promote or use non-Microsoft
products. Most importantly, Microsoft has agreed to share sensitive
information with its competitors; information that will allow them
to more easily place their own programs on the Windows operating
system.
I know that many people who daily depend on Microsoft products
will write to you about this matter. I hope that you take their and
my opinions into account. I support the settlement and look forward
to seeing the suit come to an end. As a consumer and a user of
Microsoft products, I do not feel that I am being
"clobbered" by Microsoft. Many of their competitors
would like you to think this is the case. Since many other companies
can't effectively compete with their own inferior products, they
want the taxpayers to help them get rid of Microsoft by way of a
government breakup. Enough is enough, settle the lawsuit and allow
Microsoft to get on with creating more innovative products!!
Sincerely,
Marc T Nettles
Cc: Senator Rick Santorum
MTC-00029776
Rene Armbruster
6431 SW 64 St
Auburn, KS 66402
Ms. Renata Hesse
U.S. Department of Justice--Antitrust Division
601 "D" Street--Suite 1200
Washington, DC 20530
Ms. Hesse:
Attorney General John Ashcroft and Microsoft's legal team are to
be commended for their efforts to bring the Microsoft case to
[[Page 28743]]
an end. I am writing to express my strong support for this
settlement and to encourage the court to accept this agreement.
The economic benefits of ending this case should be taken into
consideration. I am certain that the court is aware of the dramatic
influence the DOJ's actions have had the technology sector. A look
back in history clearly demonstrates a link between the beginnings
of our bearish stock market to the order by a federal judge to bust
up Microsoft.
I believe that an honest effort was made by all parties involved
in the creation of the settlement to be fair. This settlement
establishes a committee that will oversee Microsoft's business
practices in the future. Additionally, the company will not be
allowed to cut special packaging deals with computer makers and will
be forced to shared technical information with its competitors. This
settlement is fair and it represents a step toward the technology
sector getting back to work.
Sincerely,
MTC-00029778
InTouch Systems
742 Avenida Amigo
San Mar??os CA 92069-7313
(760) 734-4315 Voice & Fax
www.intouchsystems.com
January 24, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
I strongly support the settlement recently agreed to by the
federal government and Microsoft with regard to their antitrust
lawsuit. The cost of this ordeal in monetary terms, as well as the
setbacks it caused to innovation are staggering. It is time to move
forward and repair the damage. The settlement is a good start in
this endeavor.
The settlement is a comprehensive approach to remedying
Microsoft's alleged wrongdoings. Its adversaries should be very
pleased with it, instead of attempting to derail it, as they are.
Contrary to popular belief, the settlement foists some very.
stringent terms onto Microsoft. Microsoft must share interfaces with
its competitors. It also is charged with avoiding any form of
agreement with another company to distribute Windows at a fixed
rate.
There are even more terms like this that work to fence Microsoft
in after its allegedly overaggressive business model became hugely
successful. The settlement achieves what it set out to
do--increase the competition in the market--and so the
judge should effect the settlement. Microsoft's adversaries should
be quite pleased with the tenets of the settlement and should stop
trying to derail its finalization by the court. The only reason its
competitors are against this settlement is to put their own
financial interests ahead of fair competition and the public
interest.
Thank you.
Sincerely,
Karen Christian
General Partner
MTC-00029779
Marc W. Banks
January 28, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite I200
Washington, DC 20530
Dear Ms. Hesse,
I have been employed in the pharmaceutical industry for over
five years. My industry and personal livelihood depends upon my
employer's research and development capabilities and its dedication
to constant innovation in the treatment of a variety of human ills.
The computer and technology industry is no different. In fact,
one could argue that no other industry is the world is as co-
dependent and entwined with other industries as is the computer and
technology field. Countless other industries rely on technological
innovations to improve their own products and processes.
For this reason, I have closely watched the progress of the
Microsoft lawsuit. While I'm not completely familiar with all the
intricate details of the suit, I understand the major issues
involved. And yes, I agree it is important for there to be continued
competition in the computer industry in order to foster even more
innovation. I am not convinced, however, that a strong case was made
against Microsoft in the first place.
That being said, if news reports are to be believed, there seems
to me to be a fair settlement before you for consideration. I urge
you to accept the settlement and send a message that innovation is
too important to be stifled in America.
Sincerely,
Marc Banks
Territory Business Manager
MTC-00029780
COVER PAGE
TO:
FROM: QS ENTERPRISES
FAX: 7434594
TEL: 9417434594
COMMENT: PLEASE CALL
MTC-00029781
P.O. Box 496381,
Port Charlotte, FL 33949.6381
Fax
To: Attorney General John Ashcroft.
From Ken La Bad
Fax: 1-202-307-1454.
Pages: 1
Phone:.
Date: 1/28/02
Re: Microsoft's Settlement.cc:
Comments
KEN LA BAD
P.O. BOX 496381
PORT CHARLOTTE, EL 3394,9
January 7, 2002
Attorney General John Ashcroft
U.S, Department of Justice
950 Pennsylvania Avenue, NW
Washington DC 20530
Dear Mr. Ashcroft,
I am writing you today to express my support in regards to the
Microsoft settlement issue. This settlement is comprehensive, fair
and enforceable, and I am relieved that this issue has been settled
and resolved. Please work to send it through the appropriate
channels to ensure that it is finalizes as soon as the comment
period is over.
Under this agreement, Microsoft has agreed to disclose more
information, such as certain Windows internal interfaces, and
software books and codes to a technical oversight committee. This
committee was created in response to the government's fear that the
settlement would be considered unenforceable. As such, any company
that feels that Microsoft is not complying with this agreement is
free to sue; the technical committee will work as a go-between for
disputants and Microsoft.
Enough time and effort have gone into litigation against
Microsoft. Thank you for settling with Microsoft and ending this
case.
Sincerely,
Ken La Bad
MTC-00029782
Bernie Conneely
152 Willow Ave
Somerville, MA 02144
November 5, 2001
617-666-1839
bconneely @ yahoo.com
Charles A. James
Assistant Attorney General
Antitrust Division
United States Department of Justice
901 Pennsylvania Ave, NW
Washington, DC 20530
RE: The Microsoft Antitrust Lawsuit
Dear Mr. lames:
Attached for your or your office's general reading pleasure is
my somewhat detailed but hopefully very readable and understandable
analysis of the recently proposed settlement between the DOJ and
Microsoft, as well as what I consider to be somewhat more
appropriate possible remedies.
The document "Some Remedy Guidelines For Correcting Key
Microsoft Monopolistic Strategies and Business Practices" is
pretty self-explanatory both in title and in content. I am
personally extremely unhappy with what appears to be nothing less
that total capitulation by the Department of Justice in regards to
Microsoft case and I can only hope that the states will go
successfully forward with their own actions, and that the Tunney Act
will serve a sufficient protection against final adoption of the
settlement. I should mention that this document it submitted for
your consideration as a singular effort on my part, with no input or
connection to any other party to the antitrust proceedings against
Microsoft. I just happen to be someone well-versed in the technical
issues involved and their meaning and impact related to computer and
Internet matters. Copies of the attached document are being sent to
my state's Attorney General, Thomas Reilly, to the the states"
lead attorney, Brendan Sullivan, and to Judge Kollar-Kotelly.
Sincerely,
Bernie Conneely
Some Remedy Guidelines For Correcting Key Microsoft
Monopolistic Strategies And Business Practices
[[Page 28744]]
-Bernie Conneely
(bconneely @ yahoo.com)
Introduction
I've been a self-employed general computer/network consultant
and systems engineer since 1984 under the DBA name of Tobercon. I
have seen and have dealt with a lot of issue relating to Microsoft's
rise from mostly being the supplier of DOS to its current
monopolistic pre-eminence in the computer industry. I've also been
following the various lawsuits against Microsoft with some interest:
you would be hard-pressed to find any hard-core tech people not
aware of at least some of the "tricks" Microsoft has
used over the years to leverage its products onto computers, from
simple "bundling" to heavy-handed licensing agreements
to the overt sabotage of competing products Mast, if not all of,
these practices have come up at different points in the lawsuits,
most especially the. DOJ amitrust suit. Judge Thomas Penfield
Jackson's remarks may have been intemperate in a legal setting, but
they were unarguably accurate in their depiction of Microsoft's
behavior over the years. Actually, I felt the evidence against
Microsoft to be so hefty and compelling that even a Republican
administration generally favorable towards big business would be
obliged to follow through in punishing and reigning in Microsoft's
still-continuing misbehavior.
Summary and Critique of the Proposed DOJ Settlement
Judging by my perusal and analysis of the recent agreement
reached between the DOJ and Microsoft (Civil Action No.
98-1232), it would appear I was mistaken. The salient points
of the agreement, listed by the pertinent sections, are that:
III C. 1-2: Microsoft cannot prevent computer vendors from
installing icons that run or install so-named
"Middleware" products from Microsoft's competitors. Note
that the key terms here are "icons" and
"Middleware" which is defined in the agreement glossary
as products similar to Microsoft's Internet Explorer, Java Virtual
Machine, Media Player, Messenger, and Outlook Express It's unclear
if the competing products themselves can be installed or merely the
icons for their installation, or if this applies to Middleware
products that have no Microsoft equivalent like Adobe Acrobat
Reader, and whether too if this has any bearing on the installation
of a non-Middleware product like a word processor or database
manager.
III C. 3-5: Microsoft can't prevent a computer vendor from
installing the option to boot into an alternative operating system
(typically Linux) or from having a non-Microsoft Middleware product
launch on start-up.
III F-G: Microsoft cannot prevent PC manufacturers, whether by
licensing agreement or by threat of retaliation, from offering or
installing competing products to Microsoft's operating system,
Windows (the current version being "XP") or Microsoft's
Middleware products This sounds reasonable enough, but the paragraph
at III F3 has this section: "Microsoft may enter into
agreements that place limitations on an ISV's ["Independent
Software Vendor," meaning a Bernie Conneely--Microsoft
Remedies Page 1 Contact bconneely @ yahoo.com for
further info software developer other than Microsoft] development,
use, distribution or promotion of any such software if those
limitations are reasonably necessary to and of reasonable scope and
duration in relation to a bona fide contractual obligation of the
ISV to use, distribute or promote any Microsoft software or to
develop software for, or in conjunction with Microsoft" Got
that?
III H.1: Basically states that a consumer will be given easy
means to remove the icons for any Microsoft or non-Microsoft
Middleware program Note that removing the icon for any Windows
program, whether from the Windows desktop, the Start Menu, or the
bottom bar does nothing to actually uninstall the program--it
merely hides it: the program files and registry, entries will still
be there and program itself still active, especially if it's a
Microsoft product.
III H.2-3: Supposedly allows users to use the Middleware
products from Microsoft's competitors in place of Microsoft's, and
disallows Microsoft from using Windows to alter icon and menu
settings of competitors" products installed by an OEM
("Original Equipment Manufacturer," usually a computer
manufacturer who installs Licensed versions of Microsoft Windows.)
However. towards the end of III H.3 are two addendum sections that
allow for Microsoft Middleware products to be automatically invoked
when: No 1. when accessing a "server maintained by
Microsoft"--presumably any Microsoft-owned web site like
MSN or Microsoft.com and possibly sites co-owned by Microsoft like
MSNBC), and No.2, when a some Microsoft-specific function like
"ActiveX" is requested What this means is that a
consumer will be permitted to use a non-Microsoft e-mail client or
Web browser, but any Microsoft-related site can automatically invoke
Internet Explorer. and Microsoft's e-mail clients Outlook or Outlook
Express may be required to access e-mail from a Microsoft-related
site, overriding the consumer's choices. Requiring Outlook or
Outlook Express as part of an MEN account is well within Microsoft's
rights and has precedent (most notably AOL) just so long as it's
made clear to consumers that MEN is a closed, proprietary, online-
service that limits the means of access, unlike a general Internet
access acount. ActiveX controls, however, have been a means for
recent worms like NIMDA to infect PC's via Internet Explorer, a
prudent computer user may not want ActiveX active at all or have
Internet Explorer popping, up unwontedly.
III J.J: Allows Microsoft to keep secret all its proprietary
codes and encryption algorithms. This in effect will let Microsoft
continue its poli??s of making it difficult if not impossible for
competing products to interact or replace its own "Secure
Password Authentication" for example is an encryption
technique that prevents competing e-mail clients from accessing MEN.
Likewise if a typical consumer who was not even using MEN warned to
change from Outlook Express to a competing e-client he/she would
find transferring over existing saved e-mails to be all but
impossible, due again to encoding techniques unique to Microsoft and
very probably designed to impede or prevent such changeovers to
competing products.
The entire proposed settlement is seemingly a major victory, for
Microsoft. All "bundling" issues were dropped; competing
products may be installed, but removal and total replacement on
Microsoft's equivalent products can be blocked, there is apparently
no penalty to Microsoft for violating prior agreements; and all that
is demanded of Microsoft is that it doesn't overtly punish Bernie
Conneely--Microsoft Remedies Page 2 Contact
bconneely @ yahoo.com for further info computer
manufacturers for installing any products from Microsoft's
competitors and that it doesn't overtly sabotage the installation of
said products Is this not the corporate equivalent of being put on
probation, with not even the equivalent of having to do community
service?
Alternative Remedy Strategies
Given the DOJ's apparent failure in reaching a true
"remedy" in any meaningful sense. I've been moved to add
my own expert 2-cents to the effort by going over what I consider to
be some genuine and far more appropriate remedies, explained in
understandable terms (1 hope) with pertinent examples, that are
really needed to treat Microsoft monopolistic behavior. The DOJ
capitulation is very unfortunate, but hopefully the states can show
the backbone necessary to set things right.
Before I go into the details, I should mention that regardless
of the legalities involved, letting Microsoft continue to do what it
has been doing will absolutely NOT benefit consumers in any way,
snape, or form. Because of Microsoft's current monopolistic
position:
I. Consumers and businesses are at a higher risk to virus
attacks because of inherent security and coding flaws in all of
Microsoft products. The argument that Microsoft products are simply
targeted more because they are the most popular is false: for
example Apache web servers far outnumber Microsoft ??S web servers,
but Apache was not affected by the Code Red and NIMDA worms.
Microsoft has an ill-considered philosophy of sticking in
programming "hooks" into all of its products, which in
turn have been very exploitable by virus writers Very few other
companies do this because of the inherent security risk in doing so.
II. Removing Internet Explorer from Windows 98 or ME will speed
up the computer and make it more stable. The most commonly used
"Tool" to remove IE is "98Lite" a product
downloadable from www.98lire.net Removing IE this way is a common
technique for audio professionals doing high-end production work on
a PC to maximize throughput and enable the most system resources for
the audio software The average consumer, though, has no clue about
being able to do this, and Microsoft's insistence that IE and
Windows are inextricably tied together has confused the issue The
relationship of IE to Windows is very much analogous to a TV having
a built-in VCR. Yes, the VCR and TV components are sort of
"inextricably tied together" in a disingenuous manner of
speaking, but nevertheless the VCR can be removed from
[[Page 28745]]
the TV if one had the technical wherewithal, and without any undo
damage to the functionality of the TV component And obviously and
most importantly, the VCR component can be "unbundled"
quite easily by the manufacturer, regardless. Just as Microsoft
could do easily with IE
III. If a consumer wanted to use a more stable operating system
than Windows, like Linux, or a more advanced one, like BeOS, it
would be extremely difficult, if not impossible for that consumer to
be able to exchange certain types of files with other users, or even
access everything available on the Internet. thanks to the
monopolistic position of key Microsoft application products like
Powerpoint, as well as certain web sites only allowing access via IE
in clear violation of W3C guidelines ("W3C" is the World
Wide Web Consortium, which is suppose to be the final authority
regarding web standards). Other, much smaller companies have been
good at offering versions of their products to run on alternative
Bernie Conneely--Microsoft Remedies Page 3 Contact
?? @ yahoo.com for further info operating
systems, but Microsoft has not--they only support Windows and
Macintosh (somewhat). Consequently even a very, very good product
like BeOS can fail and is failing because certain key Microsoft
products don't run on it and there are no suitable, compatible
alternatives Even Linux, while making good headway in server
applications and despite the enormous amount of development
surrounding ?? has hit a brick wall as far as appearing on desktop
computers primarily because of incompatibilities with a Microsoft-
dominated environment in home and in general business.
IV. Microsoft's dominance and success in bundling has in general
prevented good and even demonstrably superior products from being
introduced to the average consumer Even one-time established and
dominant products like Novell Netware and WordPerfect have gone in
to such eclipse that the), are now marginal products despite still
being superior products in many respects to Microsoft's
V. Each newer version of Windows is harder to repair than the
previous version. Microsoft. always claims each new version to be
more stable and have more features than the version it replaces, and
to some extent this is true: Windows 3.11 use to crash quite a bit.
and Windows 2000 does crash far less than Windows 95 or 98; however,
while Windows 3.11 would crash fairly frequently, it very rarely
went "bad" to the point it needed expert
troubleshooting--generally a simple reboot fixed things Crashes
on subsequent versions were usually more serious and required much
more time to fix. Damage caused by viruses are often extremely
difficult to recover from in the later versions of Windows, as
removal instructions for the NIMDA worm on any antivirus web site
will attest to. The same also applies to Microsoft Office: since the
average consumer can't completely uninstall Office (you need a
special software "tool" from Microsoft) certain types of
damage from viruses can't be fixed because the standard repair
technique of reinstallation won't work Microsoft is and never was an
"innovator" no matter how much you may want to stretch
the meaning of the term Virtually all of Microsoft's products were
"borrowed," licensed, bought or copied from other
companies DOS came from Seattle Computer. Windows "came"
from Apple, Internet Explorer from Mosaic/Netscape, Windows XP/NT/
2000 from IBM OS/2, and so on. Without exaggeration, one could say
that most of Microsoft's creative efforts have been in leveraging
its products into the marketplace by whatever means possible while
keeping itself out off serious legal trouble
This is not to say that Microsoft does not make good
products--they actually make some very good ones (Powerpoint,
Excel, Flight Simulator). as well as mediocre ones (Word, IE,
Outlook) and some pretty terrible stuff(Access. ??S. Exchange
Server) The point is that the merits of a given Microsoft product is
irrelevant to how Microsoft has been able to leverage it into
dominance into a given market by improper and likely illegal means,
with an end result that at the very least means that many worthwhile
competing products are kept away and out of sight from the average
consumer
So without further ado, here is one informed guy's recipe for
remedying in a meaningful way the Microsoft problem:
1) Internet Related Bernie Conneely--Microsoft Remedies
Page 4 Contact e??oo.com for further info A) Allow Installation of
Alternative System/Web Browser in Place of Internet Explorer
("IE") Despite Microsoft's claims to the contrary, this
is straightforward programming issue. The Interact Explorer
"uninstall" function introduced in Windows XP merely
removes the IE icon from the desktop--it is not a true
uninstall in any meaningful sense. A true uninstall will separate
out web-access components and return basic file/disk, network access
8: browsing to a standalone Windows application similar if not
identical to the original "Windows Explorer" program in
Windows 95 and its counterpart "NT Explorer" in Windows
NT. The user should be able to install and use any web browser of
her or her choice, whether in its standard Function for web access
or in place of IE for "active desktop" access or any
other internal Windows process that IE would be used above and
beyond that supplied by separate "Windows Explorer" type
program..
The burden will be on Microsoft to create a software program
that will accomplish all this with minimal technical intervention by
the user The program must be provided free of charge If Microsoft is
unwilling to comply with creating such a software program, a 3rd
party programmer or programming group of sufficient expertise should
then be designated by the court or the DOJ (depending on whose
ultimate responsibility it turns out to be) to carry out the
programming objectives. This should be done at Microsoft's expense
and with their full cooperation in providing whatever code and
system information deemed necessary by the 3rd party programmers.
I would have to say that allowing consumers from to truly remove
IE from a computer and install a competing product in its place is
probably the most important antitrust remedy that can be achieved,
especially for the long term. It has become obvious that Microsoft
is intent on using the near universal placement of IE to mitigate
further inroads by competing operating systems like Linux and to
leverage itself much further into general Internet commerce and
services, especially through its. ".Net"
initiative--which is basically a form of bundling that will
ultimately make it nearly impossible for a consumer to do any sort
of Internet commerce without the use of Microsoft products.
B) Disallow/Discourage IE As A Requirement for Accessing Any
Commercial Web Site
There is a sizable number of web sites that currently only allow
access via IE. If this was done via a licensing agreement with
Microsoft and not because of any valid technical reason, all such
agreements should be voided The governing body for all web standards
is the World Wide Web Consortium ("W3C") and it is they
who should define web standards, not Microsoft Microsoft itself
requires the use of IE for many functions on its own web site. most
especially ones related to updates to Microsoft's other products
This requirement should be voided, especially since there really
aren't any valid technical reasons for doing this (Antivirus
programs are quite adept at checking for updates without even a
browser requirement)
As a matter of good web commerce, companies should be encouraged
to keep their web sites W3C compliant, which will eliminate
dependency on any particular web browser If it turns out Bernie
Conneely--Microsoft Remedies Page 5 Contact
bconnee?? @ yahoo.com for further info that it
would be a burdensome cost for many companies to immediately make
their web sites nonIE dependent, it may be necessary to have
Microsoft come up with a "application" version of IE,
meaning that it installs and behaves like a normal non-Microsoft
application that doesn't embed itself into the Windows operating
system IE for Apple's Macintosh works this way, so Microsoft has
surf cleat familiarity with how to achieve this A user can install
this application version of IE specifically to access those IE-
dependent sites without it "taking over" all web/file
access functions as the normal version of IE does Still. this should
be only an interim solution to allow for web sites to be made non-IE
dependent without undue time pressure or burden
C) Disallow IE as a Requirement for Microsoft's Other Products
& Services
There are no good valid reasons why Microsoft Word. Powerpoint,
or whatever other Office component needs IE to be installed,
likewise with even Microsoft's online services like MSN.
Microsoft would argue otherwise, but all their technical
arguments to date for unbundling IE have been disingenuous,
misleading or simple outright lies Just recently, on October 25.
2001. MSN locked out non-IE web browsers.
Microsoft's explanation for this was. to put it very mildly, not
very credible. The following was taken from a ZDNet news item
[[Page 28746]]
about the matter. Microsoft on Thursday contended that the upgraded
MSN she uses World Wide Web Consortium (W3C) standards and that
browsers that don't conform to the standards are being blocked out.
"We supported the latest W3C standards when developing the
co??ent and services delivered from MSN." Bob Visse, the
director of MSN marketing said in an e-mail Friday. He added that
Microsoft wants users to visit the Web site "regardless of the
browser they choose.
But Visse recommended that for the best experience with MSN,
customers should use a browser that lightly adheres to the W3C
standard.
"If customers choose to use a browser that does not
??gh??s support W3C standards, then they may enco??er a less then
op??m??l experience on MSN." he said,
On Thursday, he had said that the com?? expected to have MSN.com
f??lly accessible to the browsers later in the day.
The problem was actually not fixed until that following
Saturday, which gave me a chance to run an experiment: on 10/26/2001
at approximately 7:00 PM EST. I went to the W3C web site and
downloaded "Amaya," an experimental browser developed m
conjunction with W3C standards. After installing Amaya on my
computer, I went to ?? to access www.msn.com and got this message,
which was the same message all other non-IE browser users were
getting: Attention: Web Browser Upgrade Required to View MSN.com
If you are seeing this page, we have detected that the browser
that you are using will not render MSN.com correctly Additionally.
you'll see the most advanced functionality of MSN.com only with the
latest version of Microsoft Internet Explorer or MSN Explorer If you
wish to visit Bernie Conneely--Microsoft Remedies Page 6
Contact ??com For further info MSN.com, please select the
appropriate download link below Internet Explorer for Windows
Internet Explorer for Macintosh MSN Explorer for Windows [end]
Basically, in using "W3C Standards" as an excuse for
requiring IE to access MSN. Microsoft outright lied. For the record,
IE is the LEAST W3C compliant of all the current major web browsers,
including Netscape 6.1, Mozilla, and Opera Checking in with the W3C
organization will confirm this
The same applies to Microsoft's main site www.microsoft.com
which frequently needs to be accessed if you want to keep up with
the latest security patched or updates. Ironically, it is NOT W3C
compliant and makes non-IE browsers act funny Again, a little trick
that has no technical or consumer benefit.
Often, a consumer will be told he/she MUST install IE in order
to use some online product or service, which is usually through some
Microsoft licensing arrangement. "Quick Books Pro 2001"
for example is an accounting program, but it will install IE 5 5
automatically for no genuinely good reason. And if you go to the
McAfee antivirus site www.incafee.com using any 4.xx version of
Netscape, you will be greeted with a pop-up window requesting that
you download IE for the benefit of doing just a trial test of its
online scanner: however. Trend Micro's online scanner at
www.housecall.antivirus.com has no such requirement
As a side note, Microsoft also modified its Hotmail online
service so that when a Hotmail user signs out. he/she is immediately
redirected to Microsoft's MSN web site. While the newer non-IE web
browsers don't get that annoying "Upgrade" message,
older Netscape browsers do. Many public libraries in the Boston area
at least have been standardized on Netscape 4.08 for a few years
now, and now their many Hotmail users are getting that
"Upgrade" warning once they are done, even though it has
nothing at all to do with accessing Hotmail itself.
Yet more Microsoft heavy-handed "tricks" even in the
midst of all the current lawsuit and antitrust, activity
2) Application Product Related
A) Allow for Complete Removal of Any Installed Microsoft Product
and Without the Need for the Installation CD
Another common Microsoft "trick" is to make complete
removal of its application products very difficult. Typically, a
consumer will buy a new PC and find that it came pre-loaded with a
Microsoft product like Works 2000, a very large and seldom used
software suite. If the consumer is savvy enough to go to the
"Control Panel" in Windows and try to uninstall Works
via "Add/Remove" programs, he/she will be asked to
insert a "Works" CD and no matter which of Bernie
Conneely--Microsoft Remedies Page 7 Contact
bconnee?? @ yahoo.com for further info the
several Works CDs get inserted, it will seem to be the wrong one.
The only way to remove is to either have a very technical friend
delete The all the Works registry, entries and then The Works
folders, or else go to the Microsoft web site and do a search on how
to remove Works. and if he/she is lucky, this page will be found
http//:support.microsoft.com/support/kb??70.ASP or perhaps this
page: http://supprort.microsoft.com/support/kb/articles??74.ASP
Removing Office 2000 is more straightforward but still requires the
installation CD But if you need to completely remove it and
reinstall it because of corruption or virus damage, then you must
again go searching on the Microsoft site and if you are again very
"lucky" you will find this: http://
support.microsoft.com/support/kb.articlesQ23??.ASP Or if you're not
so lucky, you might find this instead: http://
support.microsoft.com.support/kb/articies??5/60.ASP
There is not a single good reason for Microsoft not to include a
genuine uninstall option to its software products, either for people
who want to clear them off their systems or for users who just want
to fix a problem by reinstalling
B) No Automatic Replacement/Disabling of Another Company's
Product or Feature
This is seemingly covered in the DOJ settlement, but it should
be made more explicit and that it covers all of Microsoft products.
This sort of anti-competitor behavior is not a uniquely Microsoft
trait (RealAudio is quite good at this in regards to MP3 music
files) but it can be much more problematic given that it can
interfere with functions critical to important business software For
instance "LDAP" is a directory service usually built
into mail server programs--a standards-based means of looking
up e-mail addresses However. if you install a Windows 2000 server
and add "Active Directory Services" it takes away LDAP
from any non-Microsoft e-mail server you might want to install,
forcing the installer [o either disable LDAP for the mail server
users or else fiddle with the LDAP registry settings for mail server
software, or else just give up and install Microsoft's own e-mail
server program. Exchange Server Of course Microsoft allows no such
changes with its Windows LDAP settings.
C) A "Bare Windows" Option With Clean Registry
After buying a typical retail PC, a consumer is usually faced
with a daunting number of unwanted programs and add-ons that come
with the system above and beyond what he/she expected. Some are
bundled anti-trust baiting products from Microsoft. others are
"value-added" products and quasi-free trails from other
vendors, This is not a good thing because those programs slow down
the computer, eat up resources, and generally make the completer
less stable than it should be. Removing all of these programs is
usually tricky, confusing and beyond the capabilities of the average
user Microsoft. should include a global "Rem??" function
to put the system to a basic state without any wasteful programs or
registry e?? The consumer could then systematically add back any
programs he/she actually needs or want, Bernie
Conneely--Microsoft Remedies Page 8 Contact
bconnee?? @ yahoo.com for further info Closing
Thoughts
It's been shown that Microsoft blatantly violated previous
agreements, that it frequently misled and outright fled about its
actions, capabilities and motives, that it was totally willing to
doctor evidence in its behalf, that it still tries to undermine its
competition through monopolistic leverage, and that these actions
have been both harmful to the consumer and hurtful for the economy
by excluding better, more secure products from the marketplace The
recent incident involving MSN access to non-IE browsers clearly
demonstrates that Microsoft has not mitigated its monopolistic
operational behavior at all, even in the face of ongoing litigation
If Microsoft again fails to comply with what final agreement is
reached with the federal and state governments, a suitably severe
penalty should be applied. My suggestion is the original break-up
order by Judge Jackson with the addition of the release of all
Windows 95/98/ME source code This Windows "lineage" has
ended with the release of Windows XP, which follows from Windows NT/
2000, a completely different code set from 95/98/ME. This will
protect Microsoft's current technological investment, but would give
possible competitor:, an opening for creating a
Windows--compatible operating system. That would, be a fair
penalty I think.
I can only hope that at least some of what ! wrote will be of
some positive benefit
[[Page 28747]]
MTC-00029783
LEVINE SULLIVAN & KOCH, L.L.P.
1050 SEVENTEENTH STREET, NW
SUITE 800
WASHINGTON, DC 20036
LEE LEVINE
CAMERON A. STRACHER
MICHAEL D. SULLIVAN
ELIZABETH C. KOCH
ASHLEY I. KISSINGER
JAMES E. GROSSBERG
AMY LEDOUX
CELESTE PHILLIPS
AUDREY BILLINGSLEY
SETH D. BERLIN
THOMAS CURLEY
JAY WARD BROWN
* ??
(202) 508-1100
* FACSIMILE (202) 861-9888
FACSIMILE COVER SHEET
DATE: January 18, 2002
TOTAL PAGES: 8
Renata Hesse (202) 616-9937
(202) 307-1545
U.S. Department of Justice
FROM: Jay Ward Brown
DIRECT DIAL: (202) 508-1125
CLIENT/MATTER: 0223
REMARKS:
LEVINE SULLIVAN & KOCH, L.L.P.
1050 SEVENTEENTH STREET, NW
SUITE 800
WASHINGTON, DC 20036
LEE LEVINE
CAMERON A. STRACHER
MICHAEL O. SILLIVAN
ELIZABETH C. KOCH
JAMES E. CROSSBERG
ASHLEY I. KISSINGER
CELESTE PHILLIPS
AMV LEDOUX
SETH D. BERLIN
AUDREY BILLINGSLEY
JAY WARD BROWN
THOMAS CURLEY
WRITERS' DIRECT DIAL
(202) 508-1110
(202) 508-1125
(202) 508-1100
FACSIMILE (202) 861-9888
* ??
January 18, 2002
VIA FACSIMILE AND FIRST CLASS MAIL
Renata Hesse, Esq.
Trial Attorney
Department of Justice
Antitrust Division
601 D Street NW, Suite 1200
Washington, DC 20530
Re:
United States of America v. Microsoft Corporation, Civil Action No.
93-1232 (CKK) (D.DC);
State of New York ex. tel. Attorney General Eliot Spitzer, et al. v.
Microsoft
Corporation, Civil
Action No, 98-1233 (CKK) (D.DC)
Dear Ms. Hesse:
Pursuant to 15 U.S.C. 16(o) and the Notice of
Revised Proposed Final Judgment, 66 Fed. Reg. 59452 (Nov. 28, 2001),
The New York Times, through its undersigned counsel, hereby submits
the following comments relating to the revised proposed Final
Judgment pending in the above-referenced matters.
Under the Antitrust Procedures and Penalties Act (the
"Tunney Act"), Microsoft Corporation
("Microsoft") was required to file, within ten days of
the filing of the revised proposed Final Judgment, "a
description of any and all written or oral communications by or on
behalf of [Microsoft], including any and all written or oral
communications on behalf of [Microsoft], or other person, with any
officer or employee of the United States concerning or relevant to
such proposal." 15 U.S.C. 16(g). The only
communications excepted from this requirement are those made by
Microsoft's "counsel of record alone with the attorney general
or the employees of the Department of Justice alone." Id.
The revised proposed Final Judgment in the above-referenced
actions was filed November 6, 2001. On December 10, 2001, Microsoft
filed a "Description of Written or Oral Communications
Concerning the Revised Proposed Final Judgment and Certification of
Compliance Under 15 U.S.C. 16(g)" (the
"disclosures"), a copy of which is enclosed for your
convenience, that purports to satisfy the, Tunney Act's disclosure
requirement.
Microsoft's disclosures are insufficient for several reasons.
First, with respect to the referenced October 5, 2001 meeting
regarding "technical questions," Microsoft indicates
that its counsel met with "representatives of the United
States and the plaintiff States" but does not identify those
"representatives" or the departments or agencies for
which they work Moreover, although Microsoft indicates that Linda
Averett, Michael Wallent, Robert Short and Chad Knowlton attended
this meeting, it does not indicate what positions these persons hold
at Microsoft or the purpose of their attendance at the meeting. Nor
does Microsoft describe the substance of the October 5
communications or indicate specifically where they took place.
Similarly, with respect to the referenced meetings that occurred
between September 27 and November 6, 2001, Microsoft has not
disclosed the names of those counsel for Microsoft, the United
States, and the plaintiff States who attended; 1 the specific dates
and locations of those meetings; which of those meetings were
attended by Professor Eric Green and Jonathan Marks; and which of
those meetings were attended by Will Poole. Nor has Microsoft
described in even the most cursory fashion the substance of any of
these communications.
1 This shortcoming is significant. As Senator Tunney explained,
the "limited exception for attorneys representing the
defendant who are of record in the judicial proceeding ... is
designed to avoid interference with legitimate settlement
negotiations between attorneys representing a defendant and Justice
Department attorneys handling the litigation.... [T]he provision is
not intended as a loophole for extensive lobbying activities by a
horde of 'counsel of record."' 119 Cong. Rec. 3451
(1973). The report on the Tunney Act issued by the House Committee
on the Judiciary further clarifies that the limited exception to
disclosure "distinguishes 'lawyering" contacts of
defendants from their 'lobbying contacts."' H.R.
Rep. No. 93-1463, at 9 (1974), reprinted m 1974 U.S.C.C.A.N.
6535, 6540, 1974 WL 11645.
In addition, it appears that Microsoft may not have made all of
the disclosures required. The only exception to the disclosure
requirement is for communications between counsel for Microsoft
alone and the attorney general or employees of the Department of
Justice alone; any other communications between the government and
Microsoft or others on Microsoft's behalf concerning or relevant to
the disposition of these actions--even those in which no
counsel participated--must be disclosed. See 15 U.S.C.
16(g). The communications disclosed by Microsoft appear
to each involve its counsel of record. This fact, coupled with the
absence of any meaningful description of the communications and the
lack of any express disclaimer of the existence of communications
with the government not involving counsel of record, renders it
impossible to determine whether Microsoft has complied with Section
16(g).
According to the House Report, the Tunney Act was intended
"'to encourage additional comment and
response"' by the public to proposed consent decrees
"'by providing more adequate notice to the
public."' 1974 U.S.C.C.A.N. at 6538 (quoting S. Rep. No.
93-298, at 5 (1973), reprinted in 9 Earl W. Kintner, The
Legislative History of the Federal Antitrust Laws and Related
Statutes 6598 (1984) ("Kintner")). "[E]ffective
and meaningful public comment is also a goal." Id. (emphasis
added). In addressing Section 16(g) specifically, the House Report
emphasized that Congress "intend[ed] to provide affirmative
legislative action supporting the fundamental principle restated by
the Supreme Court ... [that it] 'is not only important that
the Government and its employees in fact avoid practicing political
justice, but it is-also critical that they appear to the public to
be avoiding it if confidence in the system of representative
Government is not to be eroded to a disastrous extent."'
Id. (quoting United States Civil Serv. Comm'n v Nat'l Ass "n
of Letter Carriers, AFL-CIO, 413 U.S. 548, 565 (1973)); see also
Kintner, at 6600 ("antitrust violators wield great influence
and economic power," and "additional comment and
response" from the public would alleviate much of the
"significant pressure" violators could often
"bring ... to bear on government, and even on the courts, in
connection with handling of consent decrees"). Indeed, when
Senator Tunney first introduced his bill, he focused on the
significance of the disclosure provision. "Sunlight is the
best of disinfectants," he explained (quoting Justice
Brandeis), and thus "sunlight ... is required in the case of
lobbying activities attempting to influence the enforcement of the
antitrust laws." 119 Cong. Rec. 3453. The disclosure provision
was only slightly altered before passage, and the amendments were
designed "to insure that no loopholes exist in the obligation
to disclose all lobbying contacts made by defendants in antitrust
cases culminating in a proposal for a consent decree ....
"1974 U.S.C.C.A.N. at 6543.
The New York Times respectfully submits that Microsoft's
disclosures are inadequate to serve these statutory purposes, i.e.,
to assure
[[Page 28748]]
the Court and the public that the parties agreed upon the revised
proposed Final Judgment at arms length and without the exertion of
any improper or undue influence. The public has a statutorily
recognized right to information sufficient to make this
determination. For this reason, The New York Times respectfully
suggests that Microsoft should be required to supplement its
disclosures to: (1) identify the location, date and, where possible,
time of each communication; (2) identify the names and titles of all
persons present for each communication; (3) state the purpose of the
participation in each communication by those other than counsel of
record; (4) describe the substance of each communication; (5)
disclose any other required communications, if necessary; an (6)
certify that there exist no further communications required to be
disclosed. Sincerely,
LEVINE SULLVAN & KOCH, L.L.P.
By
Lee Levine
Jay Ward Brown
Enclosure
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
Plaintiff,
Civil Action No. 98-1232 (CKK)
v.
MICROSOFT CORPORATION,
Defendant.
STATE OF NEW YORK ex. rel.
Attorney General ELIOT SPITZER, et al.,
Plaintiffs,
Civil Action No. 98-1233 (CKK)
v.
Next Court Deadline: March 4, 2002 Status Conference
MICROSOFT CORPORATION,
Defendant.
DEFENDANT MICROSOFT CORPORATION'S DESCRIPTION OF WRITTEN OR ORAL
COMMUNICATIONS CONCERNING THE REVISED PROPOSED FINAL JUDGMENT AND
CERTIFICATION OF COMPLIANCE UNDER 15 U.S.C. 16(g)
In conformance with. Section 2(g) of the Antitrust Procedures
and Penalties Act ("APPA"), 15 U.S.C.
16(g), defendant Microsoft Corporation
("Microsoft") respectfully submits the following
description of "any and all written or oral communications by
or on behalf of" Microsoft "with any officer or employee
of the United States concerning or relevant to" the Revised
Proposed Final Judgment filed in these actions on November only
"communications made by counsel of record alone with the
Attorney General or the employees of the Department of Justice
alone."
(1) Following the Court's Order dated September 27, 2001, and
continuing through November 6, 2001, counsel for Microsoft met on a
virtually daily basis with counsel for the United States and the
plaintiff States in Washington, DC After the Court appointed
Professor Eric Green of Boston University School of Law as mediator
on October 12, 2001, Professor Green and his colleague Jonathan
Marks participated in many of those meetings. From October 29, 2001
through November 2, 2001, Will Poole, a Microsoft vice president,
also participated in some of the meetings.
(2) On October 5, 2001, counsel for Microsoft met with
representatives of the United States and the plaintiff States in
Washington, DC to answer a variety of technical questions. Linda
Averett, Michael Wallent, Robert Short and Chad Knowlton of
Microsoft attended this meeting, as did Professor Edward Felten of
Princeton University, one of plaintiffs" technical experts.
Microsoft certifies that, with this submission, it has complied with
the requirements of 15 U.S.C. 16(g) and that this
submission is a true and complete description of such communications
known to Microsoft.
Dated: Washington, D.C, December 10, 2001
Respectfully submitted,
William H. Neukom John L. Warden (Bar No. 222083)
Thomas W. Burt Richard J. Urowsky
David A. Heiner, Jr. Steven L. Holley
Diane D'Arcangelo Michael Lacovara
Christopher J. Meyers Richard C. Pepperman, II
MICROSOFT CORPORATION Ronald J. Colombo
One Microsoft Way SULLIVAN & CROMWELL
Redmond, Washington 98052 125 Broad Street
(425) 936-8080 New York, New York 10004
(212) 558-4000
Dan K. Webb
WINSTON & STRAWN Bradley P. Smith (Bar No. 468060)
35 West Wacker Drive SULLIVAN & CROMWELL
Chicago, Illinois 60601 1701 Pennsylvania Avenue, NW
(312) 558-5600 Washington, DC 20006
(202) 956-7500
Charles F. Rule (Bar No. 370818)
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON Counsel for
Defendant
Microsoft Corporation
1001 Pennsylvania Avenue, NW
Suite 800
Washington, DC 20004-2505
(202) 639-7300
MTC-00029784
James Hall
Attorney at Law
47 E. Wilson Bridge Road
Worthington, Ohio 43085-2301
Telephone: 614-885-3500
Fax. 614-527.18
January 19, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ash croft:
I would like to start by saying that I am neither pro nor anti-
Microsoft. I do however believe in right and wrong. What the
government has done to Microsoft over the past three years is
definitely wrong. This letter is to show my support for the
settlement that was reached with Microsoft. I do not support the
settlement because I agree with it; I support it because it brings
an end to one of the most absurd lawsuits I have ever seen.
There was not a single reason why the government should have
brought Microsoft to court at all. I do not agree with all of their
practices, but they have never broken the law. I guess that does not
matter when the competition of Microsoft spends more money lobbying
to get them in trouble than it does on their own research and
development. I suppose the competition can now rest easy in the fact
that their money was well spent. Microsoft has agreed, just to get
this madness over with, to not retaliate against the competition if
they produce software that competes with Microsoft's. Let's examine
the word "competition" American Heritage Dictionary as
defines it: "the act of competing, as for profit or a prize
rivalry". Microsoft took part in just that; they were
competing for a profit. They made this profit, and did great things
with it. Millions of dollars in profits were donated to charities
other profits were used to establish scholarship funds for college
students. Clearly Microsoft isn't some sort of evil corporation.
We need to end this senselessness now. The lawsuit should never
have been necessary in the first place.
Sincerely,
James Hall
MTC-00029785
January 27, 2002
FAX TO: ATTN: MS. RENATA B. HESSE
U.S. DEPARTMENT OF JUSTICE
202-307-1454
RE: MICROSOFT SETTLEMENT
Dear Ms. Hesse:
The proposed settlement is, I believe, fair and equitable for
all concerned.
. Microsoft will continue to provide new software that will
integrate new products;
. Competitors will have more Windows access to incorporate in
their products,
making them more compatible;
. Software manufacturers will resume the creation of new
products;
. Consumers will have wider choices among software products; and
. Investors will enjoy stability in the marketplace.
Sincerely,
William F. Summerfield
MTC-00029786
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to give my approval to the agreement between
Microsoft and the Department of Justice. This is a reasonable
settlement for all and it is time to put this matter behind us and
move on. I am somewhat irritated with the entire lawsuit, as the
competitors of Microsoft are coming across as a bunch of whiners
who, because they are not producing a quality product, cry and run
to the government to ball them out instead of doing a better job at
their own production and marketing.
[[Page 28749]]
Be that as it may, Microsoft and the Justice Department worked
out a fair agreement. Microsoft agreed to open the company up to
more third parties making available more of its copyrighted code to
aid in development of third party programs; Microsoft has agreed to
disclosure various interfaces that are internal to Windows'
operating system, and have agreed to a three person technical
committee to oversee future compliance. This is more than enough.
I urge you to give your support to this agreement and allow this
country to get back to business.
We desperately need to.
Sincerely,
James P. Duggan
MTC-00029787
Anthony Perrella
6017 Java Plum Lane
Garden Lake Estates
Bradenton, FL 34203
January 28, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to express my full support of the recent settlement
between the US Department of Justice and Microsoft in the antitrust
case. The case has taken too long to settle and needs to be
finalized to serve the best interests of the public.
The terms of the settlement reflect the intense lobbying efforts
on the part of Microsoft's competitors. Microsoft is agreeing to
disclose interfaces that are internal to Windows operating system
products--a first in an antitrust case. They have also agreed
to grant computer makers broad new rights to configure Windows so
that non-Microsoft products can be promoted more easily.
It is time for your office to use its influence to press for an
end to this matter. There are nine states out there looking to
continue litigation, and it is my belief that your office should be
active in suppressing this silly notion. Our nation cannot afford
further litigation, and we need Microsoft back at full strength.
Sincerely,
Anthony Perrella
MTC-00029788
20 B S Main Street Alburg, VT 05440
January 15, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft
I am writing to you today to voice my support for the Microsoft
settlement. Three years have now passed since the beginning of this
case During this time, much money has been wasted. Federal dollars
have been squandered on court mediators and countless extensions.
The settlement of this case then is a welcome end to the protracted
??gation.
The settlement that was reached is equitable Microsoft agrees to
share with its competitors some of the workings of its operating
system. This gives developers the freedom to design software that
will be mereasingly compatible with the Windows system. While this
is a large concession on behalf of Microsoft. I agree with
Microsoft's support of the settlement. The settlement allows
Microsoft to finally resolve this issue. Getting back to business is
important to Microsoft.
I agree with Microsoft's decision to settle this case. I believe
that the terms of this agreement are fair. I hope that the Justice
Department will enact this settlement as soon as possible.
Sincerely,
Richard Bayer
MTC-00029789
KerrAlbert
Office Supplies & Equipment
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
The Justice Department's anti-trust lawsuit against Microsoft
has gone on for much too long, and I would like to express my
support for the settlement that the two sides reached in November of
last year. It is a fair compromise that will benefit all parties
involved, and I would like to see it finalized in the near future.
The government should not interfere with Microsoft simply
because it is a successful company. Yet Microsoft has agreed to
allow other independent companies new rights that will allow them to
promote their own products (rather than Microsoft's) within the
Windows operating system. Microsoft will not ?? against computer
makers that choose to do this, and the result will be stronger
competition in the industry. Once competition increases, consumers
will have more to choose from, and the technology industry will
receive a real boost.
I believe the Justice Department made the right decision in
settling this lawsuit. Microsoft can no go back to developing the
types of ideas that have made it the successful company it is today,
and the government can begin to focus its time and money on more
important issues.
MTC-00029790
45 Springfield Street # 1
Belmont, MA 02478
January 28,2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing this letter to express my opinion about the
settlement that has been reached between Microsoft and the
Department of Justice.
First off, I am NOT 100% in Microsoft's camp. I have tried MANY
of their competitors" products: very few are truly better when
you take all of the real world factors into consideration. The
pattern has been simple all along: Microsoft sees a product in the
marketplace, imitates it until it is as good as the competing
product, and then (now this is the KEY) they surpass their
competitor's product. This is really the driving force behind the
technicalities of the lawsuits. You cannot even imagine how much it
disgusts me that companies are allowed to sue because another
company bettered their product.
If I were Bill Gates, I would be so outraged that ] would move
Microsoft to Canada. I have consulted for EMC Corporation in Ireland
so I know firsthand that the U.S. is losing ground as THE place to
be for technology. If our court system continues to allow cases as
outrageous as this, no business will want to set up shop here.
Who's going to file a lawsuit next? Palm, Inc.? Well, I'm a
registered Palm developer and if they file a lawsuit, guess who will
be switching to Windows CE devices?
I obviously think this case should have been thrown out of court
on the first day, but since it was not, please just get it over with
and APPROVE the settlement. Thanks.
Sincerely,
David M. McNamara
MTC-00029791
Raymond L. Barker, CPA
3967 Hancock Forest Trail,
Annadale, VA 22003
Telephone: 703473-6066
c-mail lbarkcr @ erols.com
Fax 703-208-0709
FAX COVER SHEET
From: Raymond L. Barker [Ibarker @ erols.com]
Sent: Monday, January 28, 2002 9:10 AM
To:
'mailto:microsoft.atr @ usdoj.gov"
Subject: Microsoft Settlement
The settlement between DOJ and Microsoft should be settled. Each
has affirmed that the settlement is hard but fair. To continue to go
after Microsoft is counter-productive to our economy.
The AOL suit is outrageous.
Raymond L. Barker, CPA
MTC-00029793
8632 15th Avenue Brooklyn, NY 11228
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
This letter is to urge you to give your approval to the
Microsoft settlement. This would end three years of court battles
between Microsoft and the Department of Justice. The two parties
have agreed to this agreement and I do not think it is the place of
others to second-guess the decision
The fact that a federal judge accepted it is also evidence of a
settlement. It has gone on far too long. It is time to quit wasting
taxpayers" money and put some of that money towards things
that are needed more, like highways, schools, the environment.
Microsoft has agreed to a great many of the terms demanded by
Justice. There is internal interface disclose, computer-maker
flexibility, granting computer makers new rights to configure
Windows to promote non-Microsoft programs; there is an oversight
committee. What more is there? Why should anyone work to make a
company work, or invent something, if only to have to give it away?
This whole lawsuit sets a very bad precedent.
[[Page 28750]]
I urge you to let this decision stand and let us go forwards,
not backwards.
Sincerely,
Shirley Hui
PS: ?? a Corner, I can't be more ?? with ?? products. It's
a great ??
MTC-00029794
ServComp
2700 Post Oak Blvd., Suite 600
Houston, Tx 77056
713/935-3600
713/935-3650 Fax
www.servcomp.net
FAX COVER PAGE
Attn: ATTORNEY GENE?? JOHN ASHCROFT
Company: US DEPT. OF ??
Phone No.: 202
Fax No.: 202 307 1454
From: Bob BEDD??FIELD
Company: SERVCOMP, INC.
Phone No: 713 935 3600 112
Fax No.: 713 935 3650
Date: 61 28 02
No. Pages: (Including Cover) 2
Message:
ServComp
2700 Post ?? Suit?? 400
713-935-3600
713-935-3650 fox
www.servcomp.com
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
This lawsuit against Microsoft has gone on long enough. There
are other Issues of greater Importance facing our county and there
is now a settlement In place that will, hopefully, end the
hostilities between our government and Microsoft.
Often overlooked throughout the course of this contentious
litigation is the fact that there are many other IT companies, that
have built their businesses off of Microsoft's leadership and
innovative products. While few, of these companies are dependent
upon Microsoft, they are dependent upon a reasonable stability In
the marketplace. This litigation has disturbed this stability.
The strength of this settlement is that it focuses on remedies
for the original issues and leaves Microsoft Intact. I am therefore
writing in favor of this settlement, and hope that similar actions
will not be brought in the future.
Sincerely,
Bob Beddingfield
Sales Director
ServComp, Inc.
2700 Post Oak Blvd, Suite 600
Houston, TX 77056
713-935-3600, ext. 112
jrb @ servcomp.com
MTC-00029795
January 21, 2002
Attn Renata Hesse
US Department of Justice. Antitrust Division
601 D Street, NW, Suite 1200
Washington, DC 20530
The opportunity to make commennts on the Microsoft annual
lawsuit is much appreciated with the importance it carries for the
economy. We would like to other our opinion for your consideration
as you deliberate the proposed settlement of this case.
As the owners of a wholesale plumbing supply company, we
understand that government has a role in protecting consumers and
businesses from monopolistic behavior. Although we were never
supportive or the case against Microsoft, we acknowledge the Court
of Appeals findings.
To this end we believe that settlement is the best option for
the economy and the high-tech industry.
The key point in our minds in that settlement not only ends the
suit, but it does accomoplish what the government set out to do; put
a more watchful eye on Microsoft's business practices to ensure
consumers are protected.
What we have read about the details of the suit and the
settlement talks us that the settlement that is on the table is a
good compromise that gives the government what it is seeking.
Microsoft some of what it wants, and the economy what it desperately
needs. We hope your deliberations bring you to the same conclusion.
Sincerely,
John and Beverly Trimmell, Owners
B & J Wholesale Plumbing Supply
525 S Kansas Avenue
Liberal, KS 67801
MTC-00029796
To whom it may concern:
I am responding to the proposed Microsoft settlement in
accordance with the Tunney Act I was someone who has been an IT
professional for the past seven years it disturbs me to learn that
the proposed settlement will have no real affect on Microsoft and
will not restore competition. It is imperative that a settlement to
restrain Microsoft include:
1. The equired publishing of API's, file formats, and other
protocols to all developers. This is the only way to truly give
independent soft-ware companies the ability to compete with
Microsoft.
2. Protection to OEM's that wish to load competitive software on
their systems. This will allow OEM's to install the software that
customers want.
3. Full ??ricing disclosure from Microsoft on how much it
charges OEM's for its products. This will allow consumers to make
informed choices as to which products are the most cost effective
solution.
Thank you for you time.
Mark King
MTC-00029797
January 16, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
As a Microsoft supporter, I would like to see this case
concluded. I believe Microsoft has become powerful not by malicious
intent, but because it makes a quality product that is reasonably
priced.
I do not agree with every decision that Microsoft has made in
the past, but I understand the idea of aggressively marketing your
own product. Either way, I do not agree with the allocation of
scarce state and federal resources on problems that have already
been solved.
Under the settlement agreement, Microsoft has promised to change
the way it develops, licenses, and markets its software. It has
granted computer makers broad new rights to configure Windows to
better promote non-Microsoft software on the Windows platform. Also,
Microsoft has agreed not to retaliate against software or hardware
developers who develop or promote software that competes with
Windows. Microsoft has opened its inventions to the competition that
would see that invention become obsolete. This goes against the very
fundamentals of capitalism, but if it ends the case, then Microsoft
is willing to concede.
Although the settlement reaches further than Microsoft may have
wished, Microsoft realizes that settling sooner is better than
settling later. The longer that the case proceeds and innovation
suffers, the greater the risk that American products may lose their
competitive advantages in the world market. I am convinced that the
only reason states would continue litigation would be an effort to
appease Microsoft's competitors, rather than to protect consumers.
Let's make sure that we don't lose our place as the world leader in
the IT industry; let's end this debacle once and for all.
Sincerely,
Randall Baxley
MTC-00029798
28 January 2002
The Attorney General, John Ashcroft
US Department of Justice
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing today to encourage the Department of Justice to
accept the Microsoft antitrust settlement. The issue, which should
never have begun, has been dragged out long enough and it is time to
put the issue to rest. A settlement is available and the government
should accept it.
Under the settlement, Microsoft gave in to many concessions in
order to return to software design. They have agreed to give
computer makers the flexibility to install and promote any software
that they see fit, With no fear of retaliation, Microsoft has also
agreed to license Microsoft software at a uniform price to computer
makers no ma?? software the company decides to install or promote.
Also Microsoft has agreed not to enter into any agreement that would
obligate a computer maker to exclusively install or promote
Microsoft software.
Microsoft has given far too much in order to settle this issue.
Microsoft and the technology industry need to move forward, arid the
only way to move ahead is to put this issue behind us. In these
days, we hear shouts of outrage that the government has not done
more to bolster the airlines, Enron, K-Mart, and many other
companies in financial trouble. It is truly outrageous that the
government should do much to destroy one of the this country's most
successful businesses.
[[Page 28751]]
As unfair as it is to Microsoft, ask you to please accept the
Microsoft antitrust settlement.
Michael R. Yosko
MTC-00029800
7199 Bahne Road
Fairview, TN 37062
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
We wanted to write to you today to express our dismay over the
Microsoft antitrust dispute. As Americans, we feel that this quit is
contrary to the very ideals of Free trade and capitalism theft we
treasure in this nation. It is our opinion that punishing a company
or an individual for demonstrating the very cleverness and ingenuity
upon which we have built this nation is un-American.
Americans are unlike any other people in the world. It is our
goal to became a success; to became something marc than our Fathers
and grandfathers were: to start with nothing more than a good idea
and a diligent work ethic and end up a success. This is the American
dream, and it is this dream that is under attack in this suit.
This litigation is not a question of whether or not Microsoft
violated antitrust laws. It is a question of whet her or not we, as
Americans, have the right to become successful without the
interference of the government. We are pleased that this heinous
suit has finally reached a conclusion that is satisfactory to all of
the parties involved. However, it is our fondest wish that none of
this unpleasant litigation had begun in the first place, Please keep
the government out of the private sector. Thank you.
Sincerely,
Don Crohan
Gayle Crohan
MTC-00029801
Robert Agness
608 Juanita Court
The Villages, FL 32159
January 28, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
As a concerned citizen who would like to see this process ended,
I would like to ask for your approval of the proposed agreement
in the Microsoft anti-trust lawsuit. This legal action appeared to
have been punishment for not having given enough campaign
contributions to the previous administration, which then led down
the ridiculous path of Judge Jackson trying to break up Microsoft.
It is time to come back down to earth and accept this more
reasonable compromise without further legal action.
The fact is that Microsoft has done more than any other company
to move the PC industry forward over the last 20 years. With such
advantageous terms, the Justice Department should finalize this deal
and let this company continue to work toward further innovations.
Considering Microsoft's flexibility of allowing non-Microsoft
software programs to be placed on Windows, and offering to license
intellectual property and access to its internal code, the
competition should be quite pleased with this decision.
It is time to end the arduous legal proceedings and get back to
priorities. Please keep Microsoft intact and the software industry
stabilized by moving forward with this plan. Thank you very much for
your support.
Sincerely,
Robert Agness
MTC-00029802
FAX
DATE: 12802
TO: Renata Hesse, Dept of ??
202, 616, 9937
FROM: Kim Waltman
Number of pages: (including cover sheet) 2
Please call 815-282-8053 if you do not receive all pages
indicated.
Message:
January 28, 2002
Ms. Renata Hesse
Department of Justice, Antitrust Division
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
I am writing to you regarding you the Microsoft lawsuit. This
lawsuit was brought against Microsoft by the federal government.
During the course of this three-year lawsuit, the federal government
has spent $30 million pursuing their case. The funding for the
federal government's case comes from the taxpayers of this country.
This case has had its day in court. And the Court of Appeals has
ruled to do away with the lower courts' plan to break up the
company. Let's put an end to the lawsuit. At this point, spending
any additional taxpayer money would just be sending good money after
bad. The proposed settlement agreement is the only logical solution.
If this case is carried out any longer, it will only result in
unnecessary increased expenses to consumers. I believe any
additional public funds spent on this lawsuit are not being used for
an appropriate cause. That is why I am asking that you move ahead
with the settlement agreement without delay. The agreement will
close the book on this overdone court case and allow us to move
forward into the next century of technological advancements.
Thank you for giving consideration to my opinion.
Sincerely,
Kim Waltman
Founder
InSync Communications
MTC-00029803
10852 NORTH KENDALL DR # 208
MIAMI, FLORIDA 33176-3469
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft,
We are writing to show our support for the Microsoft antitrust
settlement. It is of vital concern to this country that a climate of
stability and support by established for American businesses to
flourish, With the grave challenges facing America now, both in the
domestic economy and around the world, self-destructive legal abuse
is uncalled for.
Microsoft has shown that it is willing to bend over backwards to
reach a settlement that will help its partners and competitors
perhaps more than itself. The settlement, whatever the effect it has
on Microsoft, will greatly help the broader American technology
industry. Software companies will be better able to have their
products work with Microsoft's Windows operating system when
Microsoft makes the code for the internal interfaces and server
interoperability protocols that tie program together available.
Computer manufacturers will have more flexibility to contract with
other companies, like AOL Time Warner, RealNetworks, and Symantec to
substitute their products for the program Microsoft includes in the
standard Windows installation, such as internet Explorer. The
American computer industry should benefit from the settlement I
welcome your support and leadership for the settlement, Mr. Attorney
General, The Federal Judge who will be deciding on the settlement
should approve it in the best interests of the American public.
Sincerely,
Axel Heimer
MTC-00029804
OnQuest Technologies, Inc
January 17, 2002
Attorney General John Ashcroft
U.S, Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
Whatever might be said of this lawsuit against Microsoft, it is,
in my opinion, good that the entire case has settled. Without
necessarily taking sides on any of the issues explored during the
court proceedings, at the very least it can be observed that the
tone was contentious and unnecessarily inflammatory.
All of this has apparently created a perceptible nervousness
among consumers that has, in turn, adversely affected both sales of
computer products, as well as the economy in general.
I am therefore writing to convey my support of the settlement,
as well as my hope that there will be no further federal action
against Microsoft, or any other IT company. The settlement assures
that Microsoft will commit to better business practices, and change
its software to reflect that.
Starting with the next release of Windows XP, Microsoft will
make their software easier to use for non-Microsoft software
developers, and Microsoft will even make it easier for developers,
since Microsoft will release its interfaces and protocols to them so
they can be more competitive.
This really is more than a slap on the wrist; it's a whole new
way of doing business.
Sincerely,
Luis Navarro
President
[[Page 28752]]
MTC-00029805
January 28, 2001
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue NW
Washington, DC 20530
Fax: 1-202-307-1454
Dear Mr. Ashcroft:
This letter pertains to the recent settlement of the antitrust
lawsuit between Microsoft and the Department of Justice. I am in
favor of leaving the company as it is--NOT breaking it up.
Let's accept the terms of the settlement and let Microsoft and the
industry move forward.
I support final adoption of the settlement as soon as possible.
I feel the terms are reasonable and fair to all parties--they
meet, or exert go beyond, the ruling by the Court of Appeals. This
has been going on far too long.
Helen M. Pickering
3815 E. Funk Avenue
Spokane, WA 99223
MTC-00029806
COLESYSTEMS
Business Applications
Networking Technologies
Software Development
Web Commerce
Training
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft,
I have always believed that it was a bit overzealous for our
government to have actually reacted with a federal lawsuit against
Microsoft simply because a few of Microsoft's competitors had
suggested it. I agree that Microsoft may well have employed
aggressive marketing and sales tactics, but these tactics had never
risen to the level of needing federal court intervention. I worry
more about any business that doesn't aggressively pursue sales.
The IT business, by its very nature, is a very fluid business.
Where one particular company may be dominant today, another will be
tomorrow. It is incumbent upon all who hope to survive in the IT
world to change with the current times and technologies. Any company
that does not--even a company with the apparent invulnerability
of Microsoft--will soon find itself relegated to yesterday's
outmoded ideas. By the very nature of the IT business, therefore,
Microsoft would have had to change to remain competitive. The
limitations on Microsoft brought on by the settlement, such as
disclosure about internal interfaces of Windows, will only make
trade secrets public, and prepare IT engineers for the "next
big thing."
The irony here is that this lawsuit, and the subsequent
settlement, only delayed what would have had to happen on its own
anyway. I am hopeful that this marks the end of any federal action
against Microsoft, or any other IT business.
Sincerely,
Ivan Cole
Chief Technology Officer
cc: Representative Jerrold Nadler
174 Hudson Street
New York NY 10013
Phone: (212) 965 6400
Fax: (212) 965 6401
Toll Free: 888-COLESYS
Web: http://wwwcolesys.com
MTC-00029807
David Millage
STATE REPRESENTATIVE
Forty-First District
Statehouse (515) 281-3221
e-mail--dmillag @ legis.state.ia.us
HOME ADDRESS
3910 Aspen Hills Drive
Bettendorf, Iowa 52722
Home: (319) 332-8723
Office: (319) 388-8417
House of Representatives
State of Iowa
Seventy-Ninth General Assembly
STATEHOUSE
?? 50319
COMMITTEES
Appropriations, Chair
Judiciary
Labor & Industrial Relations
State Government
January 28, 2002
Renata Hesse
Department of Justice, Antitrust Division
202-616-9937
VIA FACSIMILE
Ms. Hesse:
Iowa Attorney General Tom Miller's leadership in the Microsoft
antitrust case has caused many Iowans to track the situation with a
watchful eye.
According to the Wall Street Journal, Miller "was the one
who originally cooked up the idea of a multi-state assault on
Microsoft." (November 9. 2001) Regarding the case, Miller told
the Journal, "Everyone knew it was high profile. This one was
a no-"??rainer." (The same article on November 9, 2001.)
I serve as Chair of the Iowa House Appropriations Committee and
I am trying to solve the sizable budget deficit the State of Iowa is
facing. I have publicly urged AG Miller to sign on to this
settlement and bring this case to an end.
The state is scraping for every dollar in a time of budget cuts,
yet our state attorneys are spending staff time and money pursuing
this case--that has not and likely will not bring anything back
to our state. Thus far, Miller has claimed over $1.1 million in
spending on the case. Of the 19 states involved when that claim was
filed, only three states topped Iowa's spending, including much
larger states like California and New York. According to the Wall
Street Journal, Miller is a main reason several states are balking
at a settlement, "...some state pols will stoop lower than
others to latch onto a celebrated case in hopes of boosting their
name recognition for future electoral ambitions. These antics might
have been tolerated when the economy was stronger. but such
frivolity looks conspicuously out of place after September 11. In
light of the discovery that we have real enemies in the world,
suffice it to say the Microsoft prosecution looks more myopic and
perverse than ever."--Wall Street Journal.
"Finally, A Settlement" Nov. 2.
The hard-earned money of taxpayers can be better spent, and
consumers will be no better off if this case are prolonged. At a
time of belt-tightening all over the country, the attorneys general
who remain on the case are acting like they have unlimited resources
for an indefinite pursuit of an American business that anchors a
sector of an already limping economy.
Americans deserve fiscal responsibility from their government.
Please We strong consideration to approving the settlement in this
case.
Sincerely,
David Millage
Iowa House of Representatives
MTC-00029808
Lon Anderson
REPUBLICAN CAUCUS STAFF
IOWA HOUSE OF REPRESENTATIVES
STATE CAPITOL
Des Moines, Iowa 50309
(515) 281-5184
January 28, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
With utter consternation, I have watched my state attorney
general continue to battle Microsoft on the issues raised in the
current lawsuit pending with the U.S. Department of Justice. I'm not
clear on his motives, given that 1owa is facing a severe budget
crisis and the expenses of his continued crusade against Microsoft
would be much better used to aid Iowans with their education and
security budgets than it is to relentlessly pursue one of the most
successful companies in the country.
I'm always amazed when politicians like Tom Miller conveniently
use lawsuits as a means to advance their own personal agenda at the
expense of the taxpaying public they claim to represent. Anyone with
any common sense realizes how ludicrous it is to continue this
lawsuit when a settlement has been proposed that addresses the
concerns raised in the original complaint.
In my opinion, from its onset, this lawsuit was brought by
jealous colleagues who are in awe of Bill Gates and his phenomenal
capacity to invent and market his products. Isn't that what America
is all about? In a few short years, Gates built one of the most
successful and profitable companies in the world, which, by the way,
made billions of dollars for investors across the globe. To portray
this man as an evil to be "dealt with" is unfair and
unwarranted. The Bill Gates and Microsoft legacy will be one that
stands the test of time.
Settle this nuisance lawsuit as quickly as possible so we can
all get back to business.
Sincerely,
Lon Anderson
Research Analyst
MTC-00029809
To,
The Department of Justice,
[[Page 28753]]
United States of America.
Dear Sir or Madam:
Sub: Opinion on Microsoft settlement
Since it has been proven in US court of justice that Microsoft
Corporation has been unlawfully maintaining its monopoly, violating
US competition laws. Being a software engineer for about 3 years now
I have been in situations when I was a victim of the unlawful
monopoly and hence, I would like to make a few suggestions and give
possible solutions so that the fights and freedom of people like me
is protected in the free market.
Firstly, the judgment has overlooked an important aspect. All
OEM's licensing Microsoft software should be made to provide an
option without the Microsoft product. For e.g., An OEM selling
desktop computers preinstalled with Microsoft Windows Operating
System should give an option of a desktop without the Microsoft
software. The rationale being "Why should a consumer who just
wishes to buy a desktop computer be forced to have Microsoft
software we-installed on it." Currently there is not a single
portable computer (notebook) in the market which offers a option
other than Microsoft Windows.
Though its good to see nearly all clauses of the
"Prohibited Conduct" talk about the Microsoft licensing
policy in the section of the judgment. But, a very important aspect
has been missed out: Currently Windows OS overwrites the Master Boot
Record so that no other preinstalled operating system would be
recognized. Microsoft should be asked to make changes to their OS so
that it stops it intrusive behavior and thus making other OS to co-
exist on the same machine.
Sincerely hoping that my comments would be helpful to the
justice effort.
Regards,
JayaBharath Goluguri
Texas Instruments Inc.
P.O. Box 660199
12500 TI Boulevard, MS 8723
Ph: 972-978-6807(c)
MTC-00029810
To the United States Department of Justice:
Sub: Opinion on Microsoft settlement
I am writing in response to the proposed settlement which is
currently under the 60 day public comment period. I consider myself
to be a person whom the outcome of this case will have a very
significant effect. Since it has been proven in US court of justice
that Microsoft Corporation has been unlawfully maintaining its
monopoly, violating US competition laws. Being a software engineer
for about 3 years now I have been in situations when I was a victim
of the unlawful monopoly and hence, I would like to make a few
suggestions and give possible solutions so that the rights and
freedom of people like me are protected in the free market.
Firstly, the judgment has overlooked an important aspect. All
OEM's licensing Microsoft software should be made to provide an
option without the Microsoft product. For e.g., An OEM selling
desktop computers preinstalled with Microsoft Windows Operating
System should give an option of a desktop without the Microsoft
software. The rationale being "Why should a consumer who just
wishes to buy a desktop computer be forced to have Microsoft
software pre-installed on it." Currently there is not a single
portable computer (notebook) in the market which offers a option
other than Microsoft Windows.
Microsoft has been using open standards in its products and then
making some proprietary extensions and claiming all rights over it
including closing the source of the so-far open protocol How can
Microsoft claim trade secrecy for a protocol that is distributed
over the Internet? For example the 'Kereberos" case.
Microsoft makes it unable for prospective purchasers of its
operating system to make informed judgments regarding
interoperability with other operating systems in connection with
their purchasing decisions. Also it overwrites MASTER BOOT RE CORD
of all other previous OS's thus ensuring that user does not
have access to his/her OS, other than WINDOWS. The fact is that now,
Microsoft has a monopoly on not only operating systems, but also to
a lesser degree, office software and web browsers. They have
blatantly and obviously abused this monopoly in many cases over the
years and it has to stop. The DOJ has made that very clear. However
the penalties sought to be imposed nor the agreement between the DOJ
and MICROSOFT do not properly address and punish MS for its judged
illegal Monopoly. All communication standards and protocols and API,
file system formats must be made open source so that all developers
can effectively compete and produce more efficient software for the
users who are currently forced into buying MS software by various
illegal means.
Sincerely hoping that my comments would be helpful to the
justice effort.
Regards,
Ravi Shankar R Jagarapu
University of Texas at Dallas
2200 Waterview Pkwy, # 2125
Richardson, TX 75080
Ph: 972-437-2846
MTC-00029811
Tim Pawlenty
Majority Leader
District 38B
Dakota County
COMMITTEES: CHAIR, RULES AND LEGISLATIVE ADMINISTRATION
Minnesota House of Representatives
January 28, 2002
Ms. Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Ms. Hesse:
I applaud the leadership displayed by the Department of Justice
and the nine Attorneys General for developing the proposed Microsoft
settlement agreement that balances the protection of consumer
interests and the competitive process.
I believe that this settlement will preserve Microsoft's ability
to innovate and engage in normal procompetitive activities, critical
during our nation's current economic recession. At the same time,
the settlement is a win for consumers, with its broad scope of
prohibitions and obligations imposed on Microsoft. It will certainly
require substantial changes in the way that Microsoft does business.
It imposes significant costs on the company and entails an
unprecedented degree of oversight. Furthermore, the agreement
strikes an appropriate balance within the technology industry,
providing opportunities and protections for firms seeking to compete
while allowing Microsoft to continue to innovate and bring new
technologies to market.
This reasonable settlement will help consumers, the industry,
and the economy to move forward.
Very truly your,
Tim Pawlenty
Majority Leader
MTC-00029812
Raymond E Beal
300 E 27th St
Dover OH 44622
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
After three long years of court battles Microsoft and the
Department of Justice have reached a settlement regarding the anti-
trust stilt. I believe that the settlement will be beneficial to
both the IT industry and the consumers alike. It is necessary that
all those who are involved in this suit put aside their differences
and work to put this issue behind them. I would like to go on record
as being a staunch supporter of the settlement.
This settlement went further than what Microsoft would have
liked, but they believe that settling the case now is the right
thing to do to help the industry and the economy move forward. The
agreement is fair and reasonable, and was arrived at after extensive
negotiations. The industry will be more competitive since Microsoft
has agreed not to retaliate against competitors who produce, promote
and ship software that competes with Microsoft's.
I am satisfied with this settlement since it is fair and
reasonable to all parties involved.
Sincerely,
Raymond Beal
MTC-00029813
Stephen and Diane Walter
1460 Mills Court
Menlo Park, CA 94025
28 January 2002
Renata B. Hesse
Antitrust Division
US Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-001
Fax: 1-202-307-1454
1-202-616-9937
RE: Microsoft Settlement
We urge the Department of Justice to withdraw its consent to the
revised proposed Final Judgment. The agreement, as it now stands,
will allow Microsoft to extend its monopoly to most if not all
aspects of
[[Page 28754]]
computing. The new settlement allows firms better access to APIs
necessary to work with Windows, which only reinforces the Windows
monopoly.
We ask that you (1) restrict Microsoft's practice of forcing
Internet Explorer in contractual tying, (2) restrict their practice
of giving favorable Windows pricing deals to OEMs, (3) require
Microsoft to allow users to remove icons from Windows desktops, (4)
restrict Microsoft's bundling of middleware to force its monopoly,
(5) re-insert the source code licensing provision of the 2000 DOJ
settlement, and (6) allow OEMs to modify Windows to add features.
As you are aware, it is small business that its the fire of the
US economy. By allowing Microsoft to extend its monopoly as your
proposed agreement will do, you are in essence a{time} lowing them
to continue chasing small companies out of business. Microsoft
tolerates NO competition--no matter how small, Please, please
take this shark out of the waters of our economy.
Sincerely,
Diane Walter
MTC-00029814
632 Khyber Lane
Venice, FL 34293
January 27, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
The nine plaintiff states in the Microsoft antitrust case who
are seeking to overturn the settlement reached last November are
claiming to act in the best interest of the public. They are
mistaken. I do not understand the intricacies of the Microsoft
antitrust case. but I do know that extended litigation would be
anything but beneficial to the consumer. I do not believe it is
necessary to continue litigation at this point. Extended suit can
only result in wasted time and money.
The settlement is reasonable. Microsoft will be allowed to
remain intact, and it will also retain control over its software,
but it will be required to give its competitors access to various
parts of Microsoft technology and to refrain from monopolistic
actions. For example, Microsoft will not be permitted to enter into
any contracts that would require a third party to distribute
Microsoft software either exclusively or at a fixed percentage.
It is wrong for States to attack Microsoft under the guise of
protecting the consumer. Consumers benefited from Microsoft's
developments & marketing. Allowing these nine states to cause
the existing ruling to be overturned will only result in expensive
litigation, which is contrary to the best interest of consumers.
Thank for your consideration.
Kenneth Twigg
MTC-00029815
620 Terrace Place
Norman, OK 73069-5037
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I completely disagree with the last three years of litigation
against Microsoft. The government has no right to keep messing
around with private enterprise and it stands to reason why the
economy took a turn for the worst when America's number one company
is a victim of lawsuits brought on by the Attorney General and
Microsoft's competitors.
The terms of the settlement are not fair as they force Microsoft
to disclose interfaces that are internal to Windows" operating
system products. They also force Microsoft to grant computer makers
broad new rights to configure Windows so that competitors can more
easily promote their own products.
Although the terms of settlement are not fully justified, I urge
your office to implement it as soon as possible, because our economy
cannot afford further litigation against it. Thank you.
Sincerely,
Glen Bell
cc: Senator Don Nickles
Representative J.C. Watts, Jr.
MTC-00029816
decisionmarkTM
818 Dows Rd. S.E., Cedar Rapids, Iowa 52403-7000
Phone: 319-365-5597
Fax: 319-365-5694
January 28, 2002
Renata Hesse
Trial Attorney
Anti-Trust Division
U.S. Department of Justice
601 D St., NW
Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
It is no secret that one of the reasons that Microsoft has
succeeded is that the federal government has had very little control
over the technology industry. Over-regulating this industry will
slow progress.
Technology has fueled the current economic expansion and we
should be looking to preserve its status rather than take it down.
As a regular consumer of high technology products, I enjoy the
benefits of a free and competitive market prices are affordable, the
products are of high quality, and the rate of development is the
fastest of any market in the world.
There is now an agreement between the opposing parties in this
case that designates a fair system of checks and balances.
Additionally, it sets out a plan to monitor future activities and a
technology committee to enforce them.
Resolving this case once and for all is not only beneficial to
the courts and all participants, but also to the marketplace, t hope
you will accept this fair agreement.
Sincerely,
David Cechota
2311 Bever Ave SE
Cedar Rapids, IA 52403
MTC-00029817
Carolyn Sergel
3100 Springdale Boulevard
Lake Worth, Florida 33461
January. 22, 2002
Attorney General Ashcroft
US Department of Justice
Washington, DC 20530
Dear Mr. Ashcroft,
I am writing in full support of the recent settlement between
Microsoft and the US department of Justice. Although I think the
lawsuits have dragged on too long to date, I am happy to see a
settlement has been reached. I am confident that the settlement will
serve the public's best interests and protect the consumer.
The terms of the settlement are more than fair. Microsoft will
be forced to document its Windows interface codes for competitors.
It will also be monitored by a special "Technical
Committee" that will make sure that it stays within the bounds
of the settlement.
Our nation cannot afford to continue litigation on fids issue.
For the sake of our IT sector and economy, please finalize the
settlement. Microsoft needs to focus on business, not politics.
Sincerely,
Carolyn Sergel
MTC-00029818
4040 Lake Forest Drive W
Ann Arbor, MI 48108
January 2.5, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to ask the Department of Justice to accept the
Microsoft antitrust settlement The suit by AOL that Microsoft has
violated antitrust laws is outrageously beyond my reasonable
imagination. Microsoft has done nothing wrong and both companies
should work together as well as on a competitive bases to improve
the benefit of end customers. It is absolutely bad idea for both
companies and the government to spend their resources for nothing. A
settlement is in place and the terms are fair, I would like to see
the government accept it.
I believe the settlements by Microsoft are more than I could
think of as a private company could endure. At the same time, the
Justice Department should use its resources from tax dollars in more
productive ways for the consumers than harassing Microsoft as a
company.
Sincerely,
Seha Son
MTC-00029819
January 24. 2002
Attorney General ,John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing you today to express my opinion m regards to the
Microsoft settlement that was reached m November. I favor Microsoft
and support the settlement that was reached by Microsoft and the
DOJ. I am anxious to see an end to the costly litigation that has
gone on for throe years. Microsoft has agreed to all terms and
conditions of this agreement, and will be monitored by the
[[Page 28755]]
government to ensure, compliance with the agreement Under this
agreement, Microsoft has agreed to grant computer makers broad new
rights to configure Windows so as to promote non-Microsoft software
programs that compete with programs that. compete with programs
included within Windows. Microsoft has also agreed to disclose
information about. various internal interfaces in Windows. This
litigation is costly and a waste of time. I urge you to support this
settlement so Microsoft. can be free to design and market its
innovative software, which will benefit our society. Thank you for
your support. Sincerely,
Roger Perer??
3616 Spokeshave Lane
Matthews, NC 28105
MTC-00029820
Fax Cover Sheet
James and Christianna Downs
3624 Thai Road
Titusville, FL 32796-4017
(321) 267-2485
1-202-307-1454
Supporting comments regarding current Microsoft settlement issue.
James and Christianna Downs
3624 Thai Road
Titusville, FL 32796
January 27, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
We are writing you today in regards to the Microsoft settlement
issue, We support the settlement that was reached in November and
feel that this costly dispute has gone on too long. Further pursuit
of Microsoft will cement the impression held by stockholders that
our government is simply conducting a harassment program, Shame on
those responsible!
The current settlement is thorough and complete. Microsoft has
agreed to share more information with other companies and give
consumers more choices. Microsoft has agreed to disclose for use by
its competitors various interfaces that are internal to Windows'
operating system products.
Microsoft has also agreed to grant computer makers broad new
rights to configure Windows in order to promote non-Microsoft
software programs that compete with programs included within
Windows. Computer makers will now be free to remove the means by
which consumers access various features of Windows, such as
Microsoft's Internet Explorer web browser, Windows Media Player, and
Windows Messenger.
Unfortunately for stockholders, this settlement will benefit
companies attempting to compete with Microsoft. We accept that
consequence, as this settlement will benefit consumers and will be
good for stimulating our lagging economy. Please support this
.settlement so our precious resources can be funneled into more
pressing issues. Thank you for your support.
Sincerely,
James and Christianna Downs
MTC-00029821
The Seale Group, Inc.
The Source for Developer Training
January 28, 2002
8601 Dunwoody Place Suite 310
A??anta, Georg?? 30350
(770) 992-4888
FAX (770) 992-1296
www.seste.com
Attorney General John Ashcroft
Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
The government's case against Microsoft quickly degenerated into
such a war of rhetoric that it became impossible to decipher the
real issues. It is my opinion that the government has badly
misunderstood the free market concept of employing aggressive
marketing techniques over and against its contention that Microsoft
was in any way attempting to create an atmosphere of unfair
competition.
However, now that the case has entered into the settlement
phase, these questions will remain unresolved. I am writing to
suggest that the settlement itself is a decidedly better option than
the continuation of the litigation. However, I may have some
misgivings over some of the more salient terms of the settlement,
particularly the provisos for information and divulging of
intellectual property.
Sincerely,
Christopher Seale President
MTC-00029822
January 28, 2002
Renata Hesse
Trial Attorney
Department of Justice Antitrust Division
601 D Street NW, Suite 1200
Washington, DC 20530
Re: U.S. vs. Microsoft
Dear Ms. Hesse:
This letter will acknowledge my support for the settlement
reached by the Department of Justice and Microsoft Corp.
Realizing the time and expense involved, there does not appear
to be further reason to expend any more taxpayer money on an already
long drawn out process. This case appears to have been thoroughly
litigated and attempts by competitors to influence judicial review
appear unfounded and contrary to the best interests of the consumer.
Thank you for the chance to express my view of this very
important issue.
Sincerely,
Susan B. Sweetland
Account Executive
Fax: 202 616-9937
MTC-00029823
RE: Microsoft Settlement
January, 28, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
While my business has not been adversely affected by this
lawsuit against Microsoft, had it continued to its anticipated
bitter end, I cannot help but think that all IT businesses would
somehow have been hurt.
There is a perception that Microsoft had grown a little too big
and successful for its own good. Adding to that perception is the
allegation that they had treated much of their customer base (the
OEMs) with a certain amount of undue, over-protective suspicion.
However, this has more than adequately addressed in the settlement,
and the settlement has ample protections figured into it.
It is good on several levels that there has been a settlement.
While in a few areas, the settlement goes beyond the lawsuit, it
does address the initial concerns leveled at Microsoft by their
competitors. I am writing to express my support for this settlement,
and hope that with it the IT community, can resume business in a
more normal fashion.
Sincerely,
Walter A. Householder
President
cc: Representative left Flake Microsoft
SUITE 400 2999 NORTH 44th STREET, PHOENIX,ARIZONA 85018
602.840.4750 FAX 602.840.5250 WWW.KDC-PHOENIX.COM
MTC-00029824
595 Providence Street
Everett, PA 15537
January 22, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
This correspondence is to show my support for the proposed
settlement that has been reached between the Justice Department and
Microsoft. The litigation has lasted for over three years, and the
time has come to worry more about our slumping economy than a
company who has been vital to the economy.
It is nice to see that the government and Microsoft both
realized that the best way to stop a recession is to attack the
problem at its source. As soon as the antitrust suit against
Microsoft was announced, the market started to dive. The longer the
litigation lasted, the lower our economy sunk. The settlement will
allow the IT industry to be more competitive, and Microsoft will
have to work closer with their competitors. They will actually share
information and source code to their products just so their
competitors can make products that are compatible with Microsoft's.
All in all, this settlement is the best thing that could have
happened, and I support it all the way.
cc: Senator Rick Santorum
Sincerely,
Robert Harclerode
MTC-00029825
Charles H. Schaaf Jr.
4900 Southwest 31st Avenue
Fort Lauderdale, FL 33312
January 28, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
In the interest of ending this costly litigation, I would like
to ask for your support
[[Page 28756]]
of the pending settlement with Microsoft Corporation. This case has
been motivated by states that want to protect their weakened
software businesses, which would seem antithetical to America's
purported belief in the free market system. The case should be
wrapped up at the earliest opportunity.
This agreement is a very good one for the competition, as
Microsoft has made several gestures to encourage more competition in
the industry, even surpassing some of the government's initial
complaints. They will allow computer makers to receive universal
terms and conditions on licensing the Windows operating system,
while working without any contractual quotas to distribute or
promote their technologies. Additionally, the broader rights of
these companies to offer non-Microsoft software will enable software
developers plenty of opportunities to gain a bigger share of the PC
market.
In light of the ongoing struggles of the U.S. technology sector,
it is time to accept this deal and get these companies back to
business. Any further action would only postpone a solution and cost
taxpayers more government time and money. I thank you for your
support.
I wonder if all the lawsuits that American businesses have to
put up with will ruin our economy.
Sincerely,
Charles Schaaf
MTC-00029826
2516 NE 37th Drive
Fort Lauderdale, FL 33308
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I avidly support the Microsoft Corporation and have so for many
years. Thus, the federal case against Microsoft over antitrust laws
met me with trepidation. I do not believe that the federal
government was justified in enacting the outdated antitrust laws
against Microsoft. Despite this, however, the settlement that was
reached in November is suitable in that it ends the negotiation
process.
Microsoft has made many concessions in an attempt to end this
process. Microsoft has agreed to disclose much of the internal
information regarding the design of Windows. Microsoft has agreed to
disclose both the protocols and the design interfaces of the Windows
system to its competitors on reasonable grounds. Now Microsoft
competitors can access this information when designing software. The
software designed from information sharing should result in products
that are compatible.
Microsoft has done enough. They have complied with all the terms
of the federal government. I believe it is time to put this issue to
rest once and for all.
Sincerely,
Wynn Courtney
MTC-00029827
1001 NW 63rd Street Suite 280
Oklahoma City, OK 73116
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to support the implementation of the recent
settlement between the U.S. Department of Justice and Microsoft.
There is no sense in continuing litigation a against a company that
is the only bright in our sorry economy. I do not think the lawsuit
should have begun in the first place. Microsoft has made a good
offer and the rune states opposing the settlement should accept it.
Microsoft is giving away technological secrets, granting broad new
rights to computer makers to configure. Windows so as to make it
easier for non-Microsoft products to be promoted, and a three-person
team will monitor compliance with settlement.
I urge your office to finalize the settlement and to make sure
that further unnecessary lawsuits against Microsoft do not occur.
Thank you. My losses in the stock market during the past year have
been in excess of $2,000,000 and Microsoft is the only bright spot I
have left in my technology portfolio, I urge you to get this lawsuit
settled and allow Microsoft to work on behalf or the stockholders
and America.
Sincerely,
George Platt
CC: Senator Don Nickles
MTC-00029828
STRUCTURAL ASSOCIATES, INC.
General Contractors/Construction Managers
January 28, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D. Street NW, Suite 1200
Washington, DC 20530
Fax: (202) 616-9937
Re: United States vs. Microsoft
Dear Ms Hesse:
I believe that the proposed consent decree between Microsoft and
the U.S. Department of Justice provides a fair settlement of this
case.
I support the settlement because I believe it is in my best
interest as a software user, both Microsoft and other.
Sincerely,
Larry M. Ike
Controller
5903 Fisher Road ?? East Syracuse, New York 13057 ?? Phone:
(315) 463-0001 ?? Fax (315) 432-0795 ?? E-mail:
info @ structuralassociates.com
Regional Office: PO Box 43968 ?? 7939 Honeygo Blvd., Suite 226
?? Baltimore, Maryland 21236
Phone: (410) 931-0905 ?? Fax (410) 931-0135 ?? E-
mail: bill @ graytechnologies.com
MTC-00029829
MASTERMAN ADVOCATES
Beth J. Masterman, Esq.
4 Philbrook Terra??e
Lexington, Massachusetts 02421
Telephone: (617) 227-9404
Fax: (781) 863-8550
BJM @ mastermanadvocat??.com
Publi?? Consulting and Legal Services
Honorable Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
RE: U.S. v Microsoft
Dear Judge Kollar-Kotelly,
The proposed settlement between Microsoft and the Department of
Justice seems inadequate in resolving Microsoft's monopoly of the
market. The settlement may serve to promote further monopolies for
Microsoft in web services and other related products. This
settlement does not sufficiently protect competitors against
predatory pricing and does not protect consumer choice. The
unanimous ruling by the Court of Appeals for the District of
Columbia against Microsoft should warrant a strong remedy and this
settlement does not meet those standards. Microsoft's violation of
federal antitrust is no longer an issue it is time that they are
held accountable for their questionable practice& It is time
that we find a remedy that meets the appellate court's standard to
"terminate the monopoly, deny Microsoft the fruits of its past
statutory violations, and prevent any future anticompetitive
activity." This proposed settlement fails to do so.
The settlement says that Microsoft "shall not enter into
any agreement" to pay a software vendor not to develop or
distribute software that would compete with Microsoft's products.
However another provision permits those payments and deals when they
are "reasonably necessary." The ultimate arbiter of when
these deals would be "reasonably necessary?" Microsoft.
The settlement does not go far enough to provide greater consumer
choice, and leaves Microsoft in a position that it can continue to
charge whatever it wants for its products. Consumers should be
protected from these types of practices Enforcing federal antitrust
laws is vital to maintaining the integrity of free markets. It is
Important that we continue to enforce them to protect tile welfare
of consumers and the fundamentals that contribute to what makes our
country's industries great.
I appreciate you taking your time to examine this important
matter.
Sincerely,
Both Masterman
President
Masterman Advocates
CC: Honorable Tom Reilly, Attorney General Commonwealth of
Massachusetts
MTC-00029830
O'Sullivan & Associates
333 Victory Road
Quincy, MA 02171
U.S. v Microsoft
January 28, 2002
Hon. Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
C/O Ms. Renata Hesse
Antitrust Division
United States Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
[[Page 28757]]
Dear Judge Kollar-Kotelly,
The Antitrust Procedures and Penalties Act, also called the
Tunney Act, was passed to insure that competition and consumer
choice continue in the marketplace. With regard to Microsoft,
neither competition nor consumer choice seems to be a concern.
Manufacturers of computers are hamstrung as are those who use
computers because they cannot install the software they prefer on
their computers. Instead Microsoft, which has become a monopoly in
this arena dictates what may be used. Software developers need to
have complete information about Microsoft's operating system so that
they can compete creating a competitive market.
Included among the concerns I have in looking at the remedy are:
-Microsoft will be permitted to expand its control by
bolting applications to Windows using a "commingling
code". This violates antitrust law.
-Some of the future applications which will undoubtedly be
included are: financial, cable services as well as an expanded use
of the internet.
-Microsoft is required to share technical information
concerning Windows. The catch is that Microsoft itself will
determine if there is any possible situation where its security or
software licensing may be compromised. The likelihood that Microsoft
will use this option is very high.
-The manufacturers' concern is that Microsoft will have
access to its intellectual properties by virtue of doing business
with the software giant.
-Microsoft will make decisions concerned with which
companies it will share technical information as called for m the
settlement. There is a clause indicating that sharing information
must be reasonably necessary.
-A three person technical committee will be set up to hear
violations.
-It is highly unlikely that a company will take on the
giant when it could lose the challenge and risk retaliation in the
future.
-One of the three people on the committee is appointed by
Microsoft; one by the Department of Justice and the third must be an
individual who will be agreed to by both Microsoft and the
Department of Justice. This arrangement gives an interesting
advantage to Microsoft.
-The findings may not be admitted into court in
enforcement proceedings. Additionally the compliance is for only
five years.
For the most part after all the years of investigating and
litigating there will be little or no change in the way Microsoft
does business. I appreciate your interest in tiffs matter. If there
is any way with which I may be of assistance, please contact me.
Sincerely,
Paul J. O'Sullivan
CC: Tom Reilly
MTC-00029831
Gregory & Associates
Honorable Colleen Kollar-Kotelly
U.S. District Court,
District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
RE: U.S. v Microsoft
Dear Judge Kollar-Kotelly,
I would like to express my dissatisfaction with the settlement
between Microsoft and the Department of Justice. I feel that the
settlement, made virtually no impact on protecting consumers from
companies like Microsoft who have monopolies in the marketplace.
The settlement has many loopholes and its level of enforcement
is questionable, this does not provide consumers the level of
protection they need for greater consumer choice. In addition the
settlement leaves Microsoft in a position to continually raise
prices for their products. It is my understanding that many consumer
groups have opposed the settlement.
The agreement states that Microsoft "shall not enter into
any agreement" to pay a software vendor not to develop or
distribute software that would compete with their products, but it
is Microsoft that will be the final decision maker on that
provision. The agreement also states that Microsoft must share
certain technical information, but only if it would not harm the
company's security or software licensing. Again, Microsoft will be
the final decision maker regarding this matter. The settlement does
nothing to deal with the effects on consumers and businesses of
technologies such as Microsoft's Passport.
The enforcement of the settlement is questionable at best. The
three person technical committee that will be assigned to monitor
any violations made by Microsoft of the agreement is comprised half
of people selected by Microsoft, and if any violations are found,
the work of the committee cannot be admitted into court.
I find these inadequacies to be too broad to accept this
settlement. I hope that Microsoft will not be able to continue to
preserve its monopoly while consumers and competitors are subject to
the practices that are supposed to be protected by antitrust laws.
Thank you for your time.
Regards,
CC: Attorney General, Tom Reily
77 North Washington Street
Boston, MA 02114.1908
Phone 617.367.6449
Fax 617.367.6299
Email [email protected]
MTC-00029832
TO: Microsoft
From: ??tore Val??
Date: 1/28/02
P??: ?? will do ?? possible to help Microsoft ?? believe in
Microsoft and the Company Philo??ply.
Salvatore Volvo
101 N Woodland Ridge
Elma, NY 14059
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
This is to give my support to the recent settlement between
Microsoft and the Department of Justice. This litigation has gone on
long enough, and it is time to settle this matter. The basis of the
suit is that Microsoft excluded other companies from competition.
However, whenever I have gone into a store, I have had any number of
choices. I chose Microsoft because it worked. The competition could
not produce the same quality product; hence, the public chose the
product that worked for them. This is the basis for all free market
philosophy, which is really what the antitrust suit was against.
Furthermore, Microsoft has more than acceded to the demands of
the Department of Justice. Microsoft has agreed to allow computer
makers to ship non-Microsoft products to its customers; Microsoft
has agreed to help companies achieve a greater degree of
compatibility with regard to their networking software; axed
Microsoft has agreed to gram computer makers broad new license to
make Windows promote non-Microsoft software programs. Ultimately,
the company agreed to terms that extend well beyond the products
that were at issue in the original suit.
Further litigation will only hinder our progress in this
direction. Let Microsoft, and the country, get back to work.
Sincerely,
Salvatore Valvo
MTC-00029833
FAX TRANSMISSION
DATE: 28 JAN TIME:
TO: ATTORNEY GENERAL
FROM:
LOCATION:
LOCATION:
FAX#: 1-202-616-9937
FAX#:
MESSAGE:
PHONE#:
Dennis C. Deggett
383 Center Road
Lopez Island, WA 98281-8298
January 28, 2002
Attorney General Jon Ashcroft
US Department of Justice
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing today to encourage the Department of Justice to
accept the Microsoft antitrust settelment. The issue was brought
about the former administration that simply did not understand the
technology industry. They ignored one of the things that makes this
country the best in the world, our free enterprise system, Then to
top it all off, they extended their socialistic philosophy to apply
antiquated antitrust laws to a brand new industry.
In the free market, Microsoft rose to the top because they had
the best products. Their products are user friendly and Microsoft
has made them very easy to Integrate and at lower cost than the
alternitives. It is no wonder that where people had a choice most
choose Microsoft software. Under the terms of the settelment
Microsoft has agreed to allow computer makers the flexability to
install and promote any software they see fit. Microsoft has also
agreed not to enter into any agreement that would require a computer
maker to use a fixed percentage of Microsoft software. I beleive
that computer makers will
[[Page 28758]]
continue to predominatly preinstall Microsoft software becuase it is
the best and most computer buyers will choose a Microsoft Windows
based computer when making a new purchase. This is not a monopoly
problem, Microsoft simply is, supplying a better product and most
people know it.
My experiance as supervisor of an electric power generation
plant for over 15 years, offered me the oppertunity to try many
brand, of computer software products and computer equipment. What I
found over time was that even when cost was not a consideration,
products that were not Microsoft based, did not perform
satisfactorly. Microsoft products and windows based computers were
simply the best. On top of that we experienced signifig??nt savings
over other options. Sure Microsoft has made a lot of money, but can
you imagine the cost to the people of our nation if Microsoft and
all they have provided for us vanished or had never existed? This is
my plea for justice in our mechanized and technolgical society.
Microsoft has gotten to where they are by developing better
products, not by crushing their competitors. This suit and the fact
It has gone on for over three years Is simply mind-booling. It is
time to end It. DO NOT PUNISH MICROSOFT FOR BEING BETTER. Please
accept the Microsoft antitrust settelment.
Sincerely,
Dennis C. Daggett
MTC-00029834
THE WASHINGTON COURT HOTEL
FACSIMILE TRANSMITTAL SHEET
TO: Renata Hess
FROM: Joe Wiegand
FAX NUMBER: 202-616-9937 OR 202-307-1454
DATE: 1-28-02
COMPANY: Dept of Justice
TOTAL NO. OF PAGES INCLUDING COVER: 2
PHONE NUMBER: RE: Microsoft Settlement
NOTES/COMMENTS:
Attorney Renata Hesse
Justice Department
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Attorney Hesse,
I am certain that you are receiving many letters of comment
regarding the Microsoft settlement with the Justice Department. Your
time is greatly appreciated.
It was 1998 when the government first brought its anti-trust
suit against Microsoft. In the years since then we have witnessed
truly astounding developments in our industry. Laptops are thinner
and more reliable, email is a communications device many Americans
depend on, and many of us are speeding across the Internet at speeds
not thought possible four years ago. These innovations are truly
amazing and beneficial to our daily lives. These new products and
ideas came about because of the competitive free market system we
live in, not because the government was directing it behind the
scenes.
The circumstances of our current economy and the government's
anti-trust case have truly stifled new growth in this industry. As
our country's economy is struggling to find its way toward positive
growth again, settling the anti-trust suit can only be viewed as a
benefit. Please work to make sure this settlement is agreed to.
Sincerely, ??
32486 White Street??
Ki??bland, ?? 60146
815-522-3801
MTC-00029835
microsoft settlement
Subject: microsoft settlement
Date: Mon, 28 Jan 2002 15:46:14-0500
From: Frank Lastner
To: microsoft.atr @ usdoj.gov
Microsofts efforts in the computer field have been invaliable to
th U.S. Their inovations, systems and marking kept prices falling
until the Government intervention. Close the books on litigation and
help get the economy moving again.
Frank Lastner
16 Stillway CT.
Hunt Valley Md. 21030
MTC-00029836
Fax Transmission
The Sack Company, Inc.
P.O. Box 528
3302 Zell Miller Parkway
Statesboro, Georgia 30459
Phone: 912.871.8771
Fax: 912.681.6001
TO:
Date: 1/28/02
Fax Number: 202-307-1454
Pages: 2 pages, including this cover sheet
From: Albert Roesel
Subject:
Comments:
"A Standard of Excellence"
The Sack Company, Inc.
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
I am writing to express my support of the Microsoft antitrust
settlement agreement. I am in favor of this case settling. As a
fellow entrepreneur, I sympathize with the position of Bill Gates. I
believe Microsoft should be free to conduct its business with
limited government intervention. Notwithstanding my opposition to
the lawsuit, the terms of the settlement agreement are reasonable.
Microsoft has made many concessions in the interest of settling this
case. Microsoft has agreed not to take retaliatory action against
those who promote software that competes with Windows. They also
agreed not to enter into agreement obligating third parties to
exclusively distribute Windows. These types of concessions should
put to rest the complaints of anticompetitive behavior on
Microsoft's part.
I am happy of see that the current Department of Justice has
made the wise decision to settle this case. I appreciate your review
of my comments.
Sincerely,
Albert Roesel
Chairman of the Board
MTC-00029837
Microsoft Corporation
123 Wright Brothers Drive
Suite 200
Salt Lake City, UT 84116
Microsoft
Tel 801 257 6300
Fax 801 257 6501
http://www.microsoft.com/
January 26, 2002
Attorney General Ashcroft, USDOJ
950 Penna. Avenue, NW
Washington, DC 20530-0001
Dear AG Ashcroft,
I believe that your decision to settle this Microsoft suit was a
wise one. Anytime that our government takes upon itself the rather
extreme position of suing a private business is serious indeed. It
is important for our government to encourage innovation and
creativity through incentives, rather than discouraging them through
convoluted, politically expedient lawsuits. It seems as if this case
may have had less actual legal merit than it first appeared. In
these days, we should remain especially vigilant at concentrating on
far more important issues like national security and budgetary
problems. It is good for us to settle this case and move on to these
more important matters. The settlement does an excellent job of
answering for all the problems that competitors brought against
Microsoft. By allowing manufacturers their own say in how to
configure Windows and competitors more access to source code that
will improve their programs' ability to operate in Windows,
Microsoft is going well beyond what has been asked of them.
Thank you for your foresight and wisdom in this matter and thank
you for taking the time to review my opinion in this matter. It is
about time for the Justice Department ask the people who will be
most affected by this decision how it will impact them.
Sincerely,
Clark Spencer
Microsoft Corporation is an equal opportunity employer,
MTC-00029838
STRATFORD
3737 Glenwood Ave.
Sutre 100
Raleigh: NG 27612
Tele: (919) 573-6102
Fax: (919) 573-6026
January 23, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D, Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
I understand that the federal courts are now reviewing the
proposed settlement in the Microsoft antitrust case. I further
understand that the government is collecting public comment on that
issue.
My comment is simple: Accept the settlement and help get this
country back to work. A lengthy, expensive lawsuit contributes
nothing to our nation's economic prosperity. Unwise government
interference in the marketplace contributes nothing to economic
growth--in fact) it hurts growth. And the Microsoft lawsuit has
hurt our nation's economy, make no mistake about it.
[[Page 28759]]
The marketplace, not the courtroom, is where these issues should
have been decided. Those who are concerned by Microsoft's dominance
of its market should remember other industry leaders that no longer
lead: Apple and Tandy in computer manufacturing; Kodak and 3M in
copiers, and CompuServe m online services.
A market leader that fails Is satisfy its customers will remain
a leader no longer. Microsoft will remain a leader if and only if it
continues to provide new services and lower costs. That is where its
competitors should seek to replace Microsoft, not through the
courtroom.
The government should not file antitrust lawsuits simply because
a company is dominant in its market or because competitors cry foul.
Yes, Microsoft plays hardball. But nothing in this long and costly
lawsuit has established that the consumer--the most important
person in this proceeding--has been damaged by anything
Microsoft has done. In fact, the consumer has been the big winner.
If this settlement is approved, the consumer will again be the big
winner--as will the entire American economy.
Sincerely,
James A. Ciao
Introduction ?? in from sources ?? it not ?? by ?? and is
subjects to change in ??, cor??, ?? and ?? or withdrawal without
notice
MTC-00029839
January 28, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Fax: 202-616-9937
Dear Ms. Hesse:
As the government accounts representative for Comark, a leading
regional tech firm, I am thrilled that the long awaited settlement
between Microsoft and thee federal government is finally at hand.
All we need now is for the Judge to approve the settlement. The
Judge, in my opinion, has more than ample reason to do just that.
First of all, let me say how well I believe that government and
business can work together for mutual prosperity. It can and does
happen--EVERY DAY! I see it when I call on governmental
agencies, officials and departments.
I enjoy using technology to build a bridge between government
and business. It makes perfect sense. After all, the emerging
technologies of today make every segment of society more
productive--it makes no difference if the end user works for
the public good or a private interest. Let's forge ahead and
revitalize the American economy. Let's renew our commitment to
research and development, so that we continue to lead the world in
productivity and quality. Let's create a new spirit of cooperation
between the government and private enterprise. Let's show the rest
of the world that American don't take recessions lying
down--that we will act to strengthen our country and assist our
countrymen.
Now is the time for bold action. I request that Judge Kollar
Kotelly approves the settlement.
Sincerely,
Jason Deans
MTC-00029840
FAX
To: John Ashcroft
Phone
Fax Phone +1(202)307-1454
Date: Monday, January 28, 2002 Pages including cover sheet: 2
From: Eric & Britt Boston
17525 199th Place NE
Woodinville
WA 98072
Phone +1(425)788-2297
Fax Phone +1(425)788-2297
NOTE:
January 26, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I'm writing to encourage you to accept the terms of the
antitrust settlement recently reached between Microsoft and the
United States Justice Department. Microsoft has agreed to terms that
will result in a much more competitive software environment and that
will allow Microsoft to move forward with its business of developing
innovative software.
To put this lawsuit behind it, Microsoft has agreed to allow
computer makers and software developers to set-up Windows within
their computer systems they will sell on the market so that
Microsoft products can be disabled and competitive non-Microsoft
products can be enabled in their place. And to make this easier,
Microsoft will show competitors the various interfaces that are
internal to Windows. This will allow smaller, developing software
companies to get their foot in the door and grow while fostering a
competitive environment that will drive all parties to create
better, more innovative software.
Further, Microsoft will not take any retaliatory action against
any computer makers of software developers who choose to modify
Windows, nor will Microsoft retaliate against any computer makers
who ship operating systems that directly compete with Microsoft
Windows. Based on these facts, I encourage you to support the terms
of the settlement so everyone can move forward with the business of
developing good software for the American people. Thank you for all
your hard work!
Sincerely,
Brittisha Boston
MTC-00029842
FHANC??S H SUITTER
SUITTER AXLAND
A ??ALT PROSESSIONAL LAW ??TION
175 South West ??emple
Seventh Floor
Sal?? Lake City, ??tah 84101-1480
Telephone (801) 512-7300
F Man [email protected]
?? (801) 532 73??
January 28, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Attorney General Ashcroft:
I write today concerning the Microsoft Antitrust Class Action
Lawsuit. I urge you to settle this case as quickly as possible. As a
user of technology on a daily basis, I am concerned that technology
consumers are suffering the biggest loss rather than those involved
in this suit. I am increasingly alarmed at all of the government
regulatory oversight, which will be placed tm computer companies. I
have never witnessed a settlement where more government intervention
and layers of bureaucracy have been the solution. I urge you to move
forward to settlement.
Sincerely,
Francis H. Suitter, Esq.
FHS/jg ??
MTC-00029843
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Fax: 202-616-9937
Dear Ns. Hesse:
Given that my husband is a local television news personality, I
follow the news even more keenly than I ordinarily would. I began
working at a new job just a few short weeks ago, as the membership
and marketing director for Heritage Golf Club in Wake Forest, North
Carolina. Unfortunately, the news and my common sense tells me that
many other folks won't be fortunate enough to find new jobs because
of the poor economic conditions our country is in. Were got to
change that.
Our government must demonstrate that it is serious about
stimulating the economy. A great first step in that process would be
to finish the job of settling its antitrust lawsuit against
Microsoft. I think I speak for most American when I say,
"Enough already!" Both sides have agreed to
settle--it's time to move on to something else,
I believe that I also speak for executives who work in
membership and marketing when I say that I'm much more efficient in
my job because of Microsoft's quality products. Database management,
communications, and publications are all professionally done with
just a click of a mouse.
The American people choose Microsoft products because they make
life better. Life will also be better for many Americans once this
suit is settled. I request that Judge Kollar Kotelly approves the
settlement.
MTC-00029844
To: Microsoft Fax: 001
fin@Mobilization Office.com
1-202-307-1454
From: Joe G. Ike
Date. 1/26/02
Letter to Attorney General
Pages: 2
To Whom It May Concern:
Reference is made to your e-mail of Friday January 25, 2002,
Attachment USAGike--
[[Page 28760]]
Joe--1018--0123 and my reply thereto by return e-mail. As
noted in my reply, please find attached a signed copy of the letter
that I dispatched this morning to the Attorney General of the USA. I
sincerely hope that all will turn out in your favor! Wishes!
3410 76th Avenue, SE
Mercer island, WA 98040-3439
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft
I am writing to you today to encourage you to bring the
litigation against Microsoft to an immediate and decisive closure. I
must state that I have been unequivocally and strongly against this
case from its very inception. It appears evident to me that it is
very unfair to punish a company for excelling in their industry. I
am a volunteer instructor with a non-profit organization teaching
senior citizens how to enrich their lives by becoming computer
literate. This is no easy task but at the close of every session I
thank God that Microsoft has been so innovative and far sighted as
to integrate their basic Operating System with applications to
provide the User with a basis of commonality that makes the learning
process infinitely easier. This applies not only to senior citizens
but also to those individuals learning the use of new software to
increase their knowledge and consequently leading to industrial
efficiency. Prior to my retirement I vividly remember the days when
it was a nightmare when attempting to home-brew our own integrated
system, I have experienced the fact that Microsoft has expended
every effort to provide us with the features that we sorely needed.
As I dwell upon the past three years ! conclude that it must
have been very taxing on the IT industry, the economy, Microsoft and
its employees. I understand that Microsoft has spent millions of
dollars in their defense-money that could have been put into the
development of new products resulting in further advancement of
technology and industrial efficiency. The employees of Microsoft
have had to endure an air of uncertainty during this entire
situation. As a citizen I am extremely concerned with the possible
flight of talent that is the backbone of Microsoft's awesome
capability.
It is difficult for me to understand the problems related to the
proposed, but rejected, settlement. Judging from what the media has
reported, Microsoft has agreed to the terms included in the
settlement as well as to the terms brought forth on issues that were
not considered to be unlawful, To name two concessions, Microsoft
has agreed to avoid agreements that would obligate any third party
to exclusively distribute Windows technology. Additionally,
Microsoft will not obligate software developers to refrain from
developing competing software. Frankly, I personally cannot
understand why Microsoft should have to divulge the code that makes
up their Operating System. t would certainly include that in the
realm of being proprietary and intellectual property. To put it more
strongly, to me it smacks of being a case of sour grapes by certain
other organizations that have not been as successful. Chairman
Greenspan commented, with words to the effect, that the Guide-On
that is going to lead the economy of our nation out of tile doldrums
is technology. It is our future. There is absolutely no doubt in my
mind that Microsoft has been a major contributor to technology. As a
result, and to reiterate, I personally would like to see this matter
dosed as soon as possible and I am sure that I am among many who
share this same point of view. Thank you for your time and giving me
this opportunity to voice my opinion.
Sincerely,
Joe 13. Ike
Engineer( retired ) e-mail
joeikel @ attbi.com tel: (206) 232-5e43
MTC-00029845
Edward A. Garvey
32 Lawton Street
St. Pail, MN 55102
Phone: 651-296-2243 (wk); 651-221-1922 (hm)
E-mail: GarveyEd;@;AOL.com
Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington DC 20530
Dear Ms. Hesse:
As a small Microsoft stockholder (about Ii0 shares in my
daughter's college fund) and a user of diverse computing and
software products, I have followed the antitrust proceedings against
Microsoft with interest. With this introduction, I thought it worth
sharing with you that I think the settlement between the Department
of Justice and Microsoft is a reasonable conclusion to a matter
whose founding facts have been (and are being) addressed in the
marketplace.
I support the settlement and am pleased that it was reached.
Thank you for considering my thoughts.
Sincerely,
Edward A. Garvey
MTC-00029846
Renata B. Hesse
Antitrust Division
U.S. Department of Justice
6ol D Street NW
Suite 1200
Washington, DC 2053D-0001
Randolph S. Kahle
6161 N Canon del Pajaro
Tucson, AZ 8S750
28-January-2002
Dear Ms. Hesse:
I have worked in the computer industry for over 2S years. During
that time I have worked as a developer, a marketing / business
strategist, and as a consultant to large and small companies. I have
a degree from Rice University in software and hardware design and an
MBA from the Amos Tuck School of Business Administration at
Dartmouth College.
My work experience includes Hewlett-Packard as well as six years
as a marketing and business strategist at Microsoft working on
database and developer products.
I have seen Microsoft from both the inside and now, for the last
ten years, from the outside. As I am not an attorney, I cannot speak
to the legal specifics of the Proposed Final settlement, however, I
am qualified to speak to the practical implications of the terms in
the computer industry as well as other industries and markets into
which Microsoft may enter.
COMMENTS IN GENERAL
As the computer industry moves towards a future, fully-
distributed, computing environment, it is vital to have an
environment which fosters and rewards innovation. While it may seem
a mature industry, we are still only at the early stages. To date,
there have been several waves of general innovation and
consolidation. Each wave brings cost reductions, creative ideas,
whole new companies and new technologies. After a wave, there has
been consolidation around standards and then the next wave appears.
These waves could be named the "mainframe era", the
"minicomputer era", and the "personal computer
era". We are now leaving the "personal computer
era" and entering a new one centered on distributed computing
and information, the "distributed computing era". As
each era transitioned to the next, the companies and products of
each successive wave accommodated the past, while providing new
innovations.
IBM anchored the mainframe era, Digital and Hewlett-Packard
emerged during the minicomputer era, and Microsoft, Dell, Gateway,
and others emerged during the personal computer era.
What is different about the current transition, is that a single
company, Microsoft, is attempting to leverage their monopolistic
power created in the personal computer era and their position in the
industry to define and control the next era. COMMENTS ON CULTURE
I worked at Microsoft before Windows was a monopoly. What I
observed was a culture fixated on domination at all costs. While
Microsoft was growing, these actions and activities were not
illegal. After becoming a monopoly, they clearly are (and were found
to be so by the courts). What is important to note is that these
illegal behaviors stem from the culture of the company. Because of
this strong culture, I do not believe that any external monitoring
of internal operations would ever be successful (e.g. the
"TC" as proposed). Microsoft managers are simply too
smart, experienced, and aggressive to ever agree to submitting to
external pressures. This comes from the top, Bill Gates himself. In
my experience, I have never encountered a discussion in which anyone
at Microsoft ever thought that they were in the wrong. This would
never occur to anyone. This is a cultural factor, an arrogance of
doing no wrong. With this culture, it seems extremely unlikely that
Microsoft would be able to self-monitor or even work with an
external auditing agency.
REMEDIES
My first choice for a remedy is to break Microsoft up into
smaller competing entities. The reason for this is to attempt to
reshuffle the organization so that there could be cultural and
behavioral change.
I petition the court to explore this remedy as the best way to
combat future violations by Microsoft.
[[Page 28761]]
If the court does not pursue a break-up of Microsoft, then I
strongly agree with many others, that there must be changes to and
additional provisions added to the Proposal Final Settlement.
For example, I fully support, and have sign Dan Kegel's open
letter (http://www.kegel.com/remedy/letter.html). OPENNESS AND
TRANSPARENCY
My second choice for a remedy is to force openness and
transparency in Microsoft's technology. Distributed computing
systems are very complex and can be very subtle. To help the court,
many other petitioners have listed specific technology disclosures
that will help create openness. I will add that, in a general way,
if Microsoft's technologies can be viewed by the industry and the
market as *components* rather than as a *whole*, then a good balance
may be struck between Microsoft's ability to innovate, and the
industry's ability to compete and develop both complementary
technology as well as competing technology.
The tricky question is this: "Where are the boundaries
between the components7"
A simple answer can be found by focusing on and leveraging the
upcoming pressures that will be felt as the distributed computing
era arrives. The answer I propose is simple, easily monitored and
enforced:
* Force Microsoft to fully disclose all wire-level (binary)
protocols used between independent computing devices. (This include
.Net protocols, SMB/NBT protocols for file sharing, and others)
Force Microsoft to disclose the APIs which they expect other
components to use as they access the wire-level protocols.
* Force Microsoft to fully disclose all file formats used to
store persistent information. The reason these are good remedies
relies on the following:
* The future direction of computing is toward small, distributed
computing devices. The economic and technological pressures will
force the definition of boundaries between distributed components.
This will be a constant pressure to *increase* disclosure over time.
* It is easier to monitor and audit compliance at these
boundaries compared to other more abstract and more easily re-
defined boundaries. (Microsoft is a master at redefining boundaries
for their own benefit).
* These disclosures provide significant value to competitors and
innovators. However, I must also point out that this is only a first
step, This describes the technological boundaries and requirements.
The Settlement must also address the legal issues such as
Microsoft's attempt to prevent open-source software from running on
Windows, and other licensing and cross-tie issues. I will leave
these issues to the legal experts.
Violation of the Settlement must bring with it a powerful and
costly punishment. I propose that if Microsoft violates the
provisions of the Settlement that they be forced to place any
software or system found to be in violation or associated with a
violation into the general domain through, an open-source license.
This, more than any financial penalty, would be a real deterrent.
Randolph S. Ka??e
Tucson, AZ
MTC-00029847
FROM : Santo L Gaudio
3011 146th Street
Flushing. NY 11354
January 25, 2002
Dear Mr. Ashcroft:
I am writing this letter to express my full support for the
settlement with Microsoft. Enough is enough. Milllons of dollars are
being wasted on unnecessary litigation and we must take advantage of
this opportunity to end needless spending now.
Microsoft has made many concessions just so that the company may
move forward with developing new products. For example, Microsoft,
has agreed to disclose for its competitors various interfaces that
are internal to Windows' operating system products--a first in
an antitrust settlement, Also, the Company has agreed in design its
future products to provide easy access to computer makers and
consumers to promote non-Microsoft software within Windows. In
addition, Microsoft has agreed to license its Windows operating
system products to the 20 largest computer makers on identical
terms, including price. Clearly, these changes will benefit both
consumers and the economy.
Not only is this settlement fair and reasonable, but it will
prevent any future antic0mpetitive behavior as well. The recession
has had a huge affect on both government and individual pocketbooks,
and it. is important that the IT industry be allowed to concentrate
on business as soon as possible.
MTC-00029849
Avionet (U.S.A.) Ltd.
Avionet Leasing Inc.
888 S. Figueroa St., Suite 800
Los Angeles, CA g0017
Tel: (213) 896-1000 Fax: (213) 824-7796
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing to express my support of the recent settlement
between the Department of Justice and Microsoft. Even though the
terms of the settlement are certainly not favorable to Microsoft,
the settlement has the advantage of ending the litigation.
It is better that Microsoft will now be encouraged to handle its
pricing policies to its OEMs in a fairer and more equitable fashion,
but the requirement that Microsoft release more of its source codes
to developers and competitors can be problematic. I am hopeful that
that proposed technical committee would be a fair arbiter when
dealing with all of these issues.
With so many other more important issues facing our country
today, I am glad that this lawsuit is finally over. I am hoping that
no further federal action in this matter will be necessary.
MTC-00029850
347 Chilian Ave.
Palm Beach, FL 33480
January 28, 2002
Ms. Renata B. Hesse
US Dept of Justice
Dear Ms Hesse:
I strongly support the Microsoft settlement. I do so as a
taxpayer and consumer. Thank You.
Very Truly Yours
Marvin A. Goldenberg
MTC-00029851
Constance Roberts
3421 South Dye Road
Flint, Michigan 48507-1009
January 23, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am urging you to settle the lengthy antitrust lawsuit pending
against Microsoft. I think it is ridiculous that the case even made
it as far as it has. I think it is a shame that the government has
gone after Microsoft. Bill Gates is simply a guy who made good and
has been punished for his success. The Justice Department seems to
have unfairly singled out Microsoft instead of treating all
companies in similar positions in an evenhanded manner.
Though I believe that the justice system has wasted significant
time and money in continuing to pursue legal action against
Microsoft, I believe that the terms of the current settlement are
reasonable, and I would like to see Microsoft back on track. I am a
stockholder in the company, so I am affected by its inability to
conduct business as usual.
The government's stated aim is to increase competition. The new
provisions Microsoft has agreed to will do just that. Users and
computer makers can more often and more easily install and configure
Windows in ways that promote and use competing products.
Please settle the case as quickly as possible.
Sincerely,
Constance Roberts
MTC-00029852
05/06/1994 09:07 0609663171
GARY REID HOMES INC
Jan-28-02 11:66A Sharon Cassidy
Gary and Susan Reid
5651 Mission Road
Bellingham, WA 98226-9580
Tel (360) 966-2385/1 ax (360) 966-3171
Form: The Attorney General
From: Oaty Reid
Date: January 28, 2002
Re: Microsoft Anti-Trust Settlement
From any viewpoint as a consumer, this suit needs to be
resolved. I believe that this suit with cost in money. First, it has
increased Microsoft's cost to do business second, it has diverted
effect from producing a better products and, third, the tax dollars
spent on this suit exceed possible savings to the public.
I believe the Microsoft's product is fairly priced when compared
to the benefits obtained I can be par?? communication revolution
that has changed the world for less than $200,00.
Does not Microsoft have a proprietary right to its st??ems? It
appears that the patent
[[Page 28762]]
holder of be ?? hoop has more rights than the designers of this
life-changing system The me?? of the internet browser into the basic
system is important to the consumer. I should not be se??nitted to
give a competition an advantage. Several of the business p?? that
were in question have already been changed. If our economic system
is ?? competitors need to produce better products--not resort
to politically driven ?? that results in power products for the
purpose of bringing equality
ee: Microsoft
MTC-00029853
SGM Bindery Inc.
January 28, 2002
Attorney General John Ashcroft
US DOJ
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I would like to take this time to give you my opinion on die
Microsoft Anti Trust case. This case has been a fiasco since its
beginnings and I can't understand how it has been allowed to go on
for so long.
I run my own company and use Microsoft products every day. I
have never been forced to use their software. This is supposed to be
a free enterprise system and anyone can go out and buy whatever
products they want. There is a reason Microsoft's products have
become so widespread and widely used that consumers prefer them to
their competitors. Consumer preference does not constitute a
monopoly.
Even though I feel this settlement goes farther than Microsoft
may want, it is necessary to get out country on its feet again.
Microsoft has agreed to give away a lot of thee intellectual
property and will be changing their business practices to make it
easier for consumers to access non-Microsoft products on their
computers.
For the sake of our technology industry and our entire economy,
please do your pall m putting a final end to this case.
Sincerely,
Stephen G Martinec
President
7120 Rutherford Road,
Baltimore, MD 21244
410.944.7660
800.852.4530
Fax 410.944.5707
[email protected]
www.sgmbindery.com
MTC-00029854
Jan 28 02 04:28p
EVERGLADES
Laboratories. Inc.
1602 Clare Avenue
West Palm Beach, FL 33401
ph: 561/833-4200
fx: 561/833-7280
email: evlabs @ beffsouth.net
January 28,2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DO 20530
Dear Mr. Ashcroft:
Microsoft is not the evil money grubbing corporation that it has
been made out to be. Rather, it is in my opinion that the other
information technology companies are the ones with dollar signs in
their eyes. The antitrust lawsuit filed against Microsoft was
nothing more than profit driven facade.
The settlement that was reached in November is reasonable and in
the best interest of all parties involved. Microsoft has agreed not
to seek any sort of retaliatory measures against computer
manufacturers that promote software other than Windows. The
settlement further stipulates that
Microsoft must provide documentation on how to interface
competitors' software with its own operating system. Microsoft has
already given a lot of ground with this settlement, and I feel that
they should be asked to give no more. The settlement as decided upon
in November should be left as is with no changes. The money driven
attack on this company needs to stop, so please finalize the current
settlement and stop litigation now.
Sincerely,
Ben Martin, Ph.D.
MTC-00029855
James Woodward
432 Lynshire Lane
Findlay, OH 45840
January, 26, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
I am writing you today to express my concern in regards to the
Microsoft settlement issue. I feel this settlement is fair and
reasonable, and I believe that this three-year-long dispute should
be resolved permanently. Because of the federal action many states
have jumped on board. I don't understand their cause. If you drop
the case and accept the initial agreement, then, I'm sure man), of
the states will also.
Microsoft is a company that is successful m its business. I do
not believe they should be penalized for this. Microsoft has pledged
to share more information with other companies and create more
opportunities for them, therefore, the entire technology industry
will benefit from this settlement.
Again, it will be more productive to allow Microsoft to continue
doing what they do best. This will benefit the economy and
consumers. I sincerely hope that this settlement will be finalized
because it is in the best interest of the industry and the American
consumers.
Sincerely,
James Woodward
MTC-00029856
January 27, 2002
Renata Hesse
Trial Attorney
Anti-Trust Division
U.S. Department of Justice
6Ol D St., NW
Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
I am not a lawyer, an officer of the court, a technology
professional, or a politician. So granted, there may be nuances that
I am overlooking in the Microsoft antitrust case. I am having a
difficult time understanding why some of Microsoft's competitors
driving the antitrust case, along with half of the states suing the
company, are unhappy with the settlement that all others involved in
this case have agreed upon.
Reviewing the compromise from my vantage point, it would appear
that Microsoft gave the most and the plaintiffs got the most.
Computer makers using Windows receive flexibility allowing them to
replace and remove specific parts of Windows. Even customers receive
more flexibility with the product and information technology
providers will have access to technical specifications. Plus, they
would set up a panel to make sure all parts of the settlement are
complied with.
As children, and sadly sometimes as adults, when it comes to
decision-making there are always a couple of people that won't
budge. In order to seek a compromise, two sides must at least come
part way to meet somewhere in the middle. It seems those not signing
off on the settlement simply refuse to take any steps toward the
middle. Where I come from, that's bullheaded and stubborn and it
gets you nowhere fast.
It is my hope that as the officer of the court making a final
judgment on this decision, that you will be able to compartmentalize
the intricate parts of this case. Set aside those who haven't signed
on to the settlement, set aside those technology companies seeking a
break up of Microsoft refusing to accept any punishment less, set
aside those politicians who may be seeking continued spotlight by
moving on with the case. Focus on the facts. A settlement has been
reached by most of the parties partaking in the case. It seems to me
to be a just compromise.
Sincerely,
Joe Meyers
4822 Ashley Park Drive
W. Des Moines, IA 50265
MTC-00029857
January 28, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
During my tenure as Assistant Director of Admissions at North
Carolina State University, I have witnessed many technological
innovations and trends. Most Of these have involved the use of a
computer, and many involved Microsoft products.
While I cannot say with exact certainty why the federal
government pursued an antitrust lawsuit against Microsoft, I can
tell you that it has had a devastating impact on technological
innovation while it has transpired. Before the lawsuit, tech
companies were lauded for focusing on research and development at
the exclusion of politics. In fact, few of the leading tech firms
employed anyone to conduct government relations programs.
Microsoft learned quickly that its exclusive focus on making
life more efficient for everyone had made its competitors struggle
[[Page 28763]]
for market share. The competitors retaliated by getting into the
political game. The lawsuit followed. Even today, Microsoft's
competitors are lobbying to contignue the lawsuit endlessly.
We should support the federal government and Microsoft in their
decision to settle the case. I urge Judge KollarKotelly to approve
the proposed settlement of the lawsuit. Let's allow research and
development to march ahead.
Sincerely,
Jill Green
MTC-00029858
January 28, 2002
Renata Hesse
Antitrust Division
Trial Attorney
U S. Department of Justice
601 D St NW, Ste 1200
Washington, DC 20530
Attorney Hesse:
In my eyes, the government's treatment of Microsoft has not been
unlike the actions of Medieval European Lord's who would cut off the
head of a nemesis and display it on a stake in the village square
for all to heed the warning. Unfortunately, the real harm goes to
taxpayers, consumers, and tech investors in this case.
The government and Microsoft finally came to a settlement after
going in and out of courtrooms as fast as they would enter and cease
mediation talks since this case began a few years ago. Although this
settlement is fair, we are beyond even that factor in this
proceeding. Whether or not the agreement serves one side more than
the other--which from the looks of it serves the government
over the corporation--what is important is that a settlement
has been reached with most of the contributors to the case have
signed off on.
Please end this portion of the case with your approval of the
settlement so that all of us--Microsoft, consumers, taxpayers,
government court officials, and investors--can get back to
business as usual.
Many Thanks,
Richard J. McLaren
President, McLaren Ins. & Associates
MTC-00029859
Linda Diamond
1961 West Hood Avenue 2B
Chicago, Illinois 60660
January 28, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I would like to see the government stop interfering with the
business practices of Microsoft, and I am happy to see this case has
been settled at the federal level. The two sides reached a fair
compromise in November of last year, and it is time to finalize that
settlement and end this matter once and for all.
The government agreed to settle this matter because Microsoft
agreed to change its operating system to allow independent companies
a better chance to compete in the marketplace. Windows will be
designed so that these other companies can promote their own
products rather than Microsoft's, and Microsoft will not retaliate
against its competitors in any way for promoting non-Microsoft
products. Them will be no more risk of anti-competitive behavior by
Microsoft because a three person technical committee will oversee
Microsoft's business operations from this point forward, ensuring
that the company fully complies with all terms of the proposed
settlement. I see no need to continue this litigation.
Once this case is settled, the IT industry will really benefit,
and consumers will have more choices and better choices as a result.
Competition will be strong, the industry will flourish, and the
nation's economy will get a jump-start that it desperately needs.
Thank you for settling this lawsuit, as it is the right thing to do
for the industry and for the American economy.
Sincerely,
Linda Diamond
MTC-00029860
Wayne Hummer
Investments, LLC.
Fax
To: Attorney General John Ashcroft
From: Steven & Linda Diamond
Fax: 1-202-307-1454 or
1-202-616-9937 3
Phone:
Date: 1/26/02
Re: Microsoft Litigation cc:
Comments:
JAN-28-2002 15:29
WAYNE HUMMER
312 431 0704
P.02/03
Wh Wayne Hummer
INVESTMENTS
300 South W. Drive,
Chicago, IL 60606-6607
local 312/431.1700 / toll free 800.621.4477
312,431,0704
www.whunmer.com
January 28, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I would like to see the government stop interfering with the
business practices of Microsoft, and I am happy to see this case has
been settled at the federal level. The two sides reached a fair
compromise in November of last year, and it is time to finalize that
settlement and end this matter once and for all.
The government agreed to settle this matter because Microsoft
agreed to change its operating system to allow independent companies
a better chance to compete in the marketplace. Windows will be
designed so that these other companies can promote their own
products rather than Microsoft's, and Microsoft will not retaliate
against its competitors in any way for promoting non-Microsoft
products. There will be no more risk of anti-competitive behavior by
Microsoft because a three person technical committee will oversee
Microsoft's business operations from this point forward, ensuring
that the company fully complies with all terms of the proposed
settlement. I see no need to continue this litigation.
Once this case is settled, the IT industry will really benefit,
and consumers will have more choices and better choices as a result.
Competition will be strong, the industry will flourish, and the
nation's economy will get a jump-start that it desperately needs.
Thank you for settling this lawsuit, as it is the right thing to do
for the industry and for the American economy.
Sincerely,
Steven M. Diamond
Serving Investors Since 1931
MTC-00029861
January 28, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite
1200 Washington, DC 20530
Dear Ms. Hesse:
I wanted to correspond with you and convey my opposition to the
Microsoft lawsuit and support the compromise settlement.
I don't sec rely harm that has come to the American consumer as
a result of the legal proceedings. Capitalism continues to work and
Microsoft has developed useful and practical technology for
education I am clear that Microsoft has been targeted by its
competitors and I don't believe that taxpayers" money should
be silent for this type of lawsuit. Take the government out of this
dispute and let capitalism do its job.
In conclusion, I ask that the Court resolve this issue as
quickly as possible, in the interest of the American people.
Sincerely,
Barnes Elementary Principal
MTC-00029862
Wake Forest Town Commission
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms, Hesse:
As a member of the Wake Forest Board of Commissioners, I am
concerned that the Microsoft antitrust lawsuit has dragged on too
long and we need to settle it now. I am elected to represent all the
people in Wake Forest, and I am concerned that everyone's jobs are
being threatened by the recession. Microsoft products are the
backbone of business and industry--and they help offices run
efficiently throughout our community. I am opposed to prolonging the
lawsuit in any way. The suit needs to be resolved... and resolved
now! Many of our commuting citizens work in the Research Triangle
Park. High tech solutions for health care, business and
communications firms are developed here in the Triangle. However,
the ability of these companies to be innovative in creating
solutions, and productive in the creation of jobs, hinges upon
moving beyond excessive litigation.
Let's face the fact that both parties want the suit to end,
Microsoft and the federal
[[Page 28764]]
government are in agreement on all points of the settlement. I want
to strongly urge Judge Kollar-Kotelly to promptly approve the
settlement. This lawsuit has cost businesses and local governments
untold millions in lost revenues, Let's stop the bleeding,
Let's move beyond this case and move the economy forward.
Sincerely,
Kim Marshall
Mayor Pro Tempore
401 Owen Avenue--Wake Forest, NC 27587
MTC-00029863
2601 Scofield Rid6e Parkway
#1523
Austin, TX 78727
David Morgan
Fax
To: Attorney General John Ashcroft
From: David Morgan
Fax: 1-202-307-1454 or
1-202-616-9937
Pages: 1
Phone:
Date: 1/28/2002
Re: Microsoft Anti-Trust
cc:
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft
I'm happy to see the Federal Government has come to at least
some decision to end the unjustifiably offensive and expensive anti-
trust case against Microsoft Corporation. Three years of untold
waste has been directed at Microsoft and we the tax payers incurred
the entire cost. Quite frankly, had Justice spent the amount of
money it wasted in this suit in anti-terrorist security several
thousand people would be alive and working at the World Trade Center
building. The agreement arrived at after extensive negotiations with
a court-appointed mediator is very unfair and only serves the self
interests of the individuals and companies which brought the action
as well as those political interests of the Justice Department
attorneys and US politicians. Simply; Microsoft has gone well beyond
any legitimate or fair agreements to remedies. It's time the
government accepted the terms levied against the company and moved
on to other things, Let Microsoft continue doing great things for
the computer industry which helps us all instead of hindering the
company and as we all know harming the little guys--the
employees and the consumers.
Enough is enough. No more federal legal action should be taken
against Microsoft.
Sincerely,
David Morgan
MTC-00029864
Jeffrey L. Phelps
4705 East U.S. Highway 160
Independence, KS 67301
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
The proposed settlement of the Microsoft antitrust case is a
good deal for the taxpayer, investors and the computer industry. I
strongly encourage the court to accept the settlement. The good news
for supporters of the free-market system is that Microsoft is not
going to be busted up by the federal government. Instead tiffs
settlement specifically provides remedy for portions of the
complaint that have been made it through lower courts.
Under this agreement competitors of Microsoft will find it much
easier to promote their products into the Windows operating system,
it requires Microsoft to provide intellectual property with other
companies when necessary, and Microsoft will be banned from cutting
special deals with specific computer manufacturers.
Clearly the Department of Justice and the company are interested
in seeing this case ended. I the American public can count on the
court to support this agreement.
MTC-00029865
To: Attorney General John Ashcroft
From: Forrest G. Gregory
11134 Villas On The Green DR
Riverview, Fl. 33569
Sub. Microsoft Settlement
Date: January 26, 2002
Dear Sir.
I feel the Justice Department should settle with Microsoft. The
agreement you and the nine states agree to was a victory for neither
side.
Now we need a victory for the consumer. Allow us to use the
windows system without diluting it with more regulations on
Microsoft.
The public has been supporting the Justice Department and state
attorneys with our tax Dollars to continue these lawsuits. Settle
and allow the private industry to make a profit. If an inventor has
his property taken away by the government, other inventors will take
notice. Consider what little incentive Microsoft or other potential
targets of lawsuits would have to make a better product I would not
be able to type and send you this letter without windows operating
system. I'm sure there are others systems but I don't have time to
search them out. Settle and somehow don't allow the other nine
states to continue battling the litigation can be endless and no
benefit to the public.
Settle and close the book.
Forrest G. Gregory
MTC-00029866
Anne Gould Anderson
614 West Marconi Ave
Phoenix AZ 85023-7447
January 28, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I would like to urge you and the administration to do every
thing in your power to bring to a close the years old Microsoft
case. This anti-trust suit is settled but m name and further
politicking in Washington or posturing in the media are wasteful and
counter productive exercises. The proposed settlement agreement was
born of years of litigation, negotiation and mediation, it is a hard
fought and won compromise between the several parties and varied
interests. It deserves to be adopted for the sake of Microsoft, a
great American company, the faltering IT industry, and our national
wellbeing.
The settlement will leave Microsoft as it stood at the outset,
the sole leader of America's most innovative industry. It will
require the company, however, to change its ways and embrace a more
Open and pro-competitive business philosophy. Microsoft will have to
abandon its software exclusivity demands when selling its platforms
to computer manufacturers. It will have to open itself up to regular
government review. It must eschew further predatory or anti-
competitive marketing practices. It will have to, not just accept,
but also promote a more competitive IT world. In doing so it will
hopefully become a catalyst for the whole industry.
Please support this settlement.
Sincerely,
Anne Gould Anderson
MTC-00029867
HENRY G, & EILEEN C. JAMES
1825B BRIARCLIFFE BOULEVARD .
WHEATON, IL 60187
P 630-665-8904 .
F 630-260-4037
Email: twojames @ earthlink.net
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
We are writing to express our opinion regarding the antitrust
suit against Microsoft, which is that it should be concluded at
once. The settlement reached in November 2001, is a fair and just
settlement that ought to be accepted by the Justice Department.
For fire sake of Microsoft's shareholders and customers, this
antitrust suit needs to be brought to a swift and final conclusion.
Thank you and we think you are doing a good job in your cabinet
position.
Sincerely,
Henry G. James
Eileen C. James
MTC-00029868
Fred Dorst
11715 Canyon Vista Lane
Tomball, TX 77375-7677
January 26, 2002
Dear Mr. Ashcroft:
I am happy to hear that the Justice Department has decided to
end its antitrust lawsuit against Microsoft. The Department's three-
year case has gone on for way too long.
The agreement they came up with came after extensive
negotiations with a court-appointed mediator. The company agreed to
terms that extend well beyond the products and procedures that were
actually at issue in the suit--trust for the sake of wrapping
up the suit. The company even agreed to document and disclose, for
use by its
[[Page 28765]]
compertitors, various interfaces that are internal to windows'
operating system products--a first in an antitrust settlement.
Microsoft has been distracted long enough. I don't think the
federal government should ever have to drag the company in to the
courts ever again, it would be soon by most as nothing more than
pure harassment.
Sincerely,
Fred Dorst
MTC-00029869
TRAVEL WORLD
US DEPARTMENT OF JUSTICE
RE:COMMENT PERIOD MICROSOFT SETTLEMENT
JANUARY 28, 2002
AS A SMALL BUSINESS OWNER WHO BELIEVES STRONGLY IN THE FREE
INTERPRISE SYSTEM WE SHOULD BE ABLE TO COUNT ON IN THE UNITED
STATES, I WISH TO OFFER MY OPION ON THE MICROSOFT ANTITRUST LAWSUIT.
I BELIEVE IT WAS WRONG FOR OUR GOVERNMENT TO INITIATE THE LAWSUIT
WHICH IN ESSENCE PENALIZED MICROSOFT FOR IT'S SUCCESS IN THE
TECHNOLOGY ARENA. I STRONGLY FEEL THAT MICROSOFT HAS NOT HARMED
CONSUMERS AND THAT CONSUMERS INSTEAD HAVE BENEFITED FROM THE NEW
CHOICES, AND LOW PRICES PROVIDED BY MICROSOFT AND OTHER COMPANIES
LIKE THEM. I WAS VERY SORRY TO HEAR THAT NINE ATTORNEYS GENERAL AND
THE DISTRICT OF COLUMBIA HAVE DECLINED TO ACCEPT THE SETTLEMENT TO
THIS 3 YEAR MILTIMILLION DOLLAR EFFORT TO TOPPLE MICROSOFT AND ALLOW
THEIR COMPITORS TO HAVE UNFAIR LEVERAGE OVER THEM. UNFORTUNATELY MY
STATE OF IOWA IS ONE OF THOSE NINE.
I WANT TO INCOURAGE THE DOJ TO MOVE FORWARD WITH WHAT IS BEING
CONCIDERED A SETTLEMENT WITH SOMETHING FOR EVERYONE WHILE NOT
ENTIRELY SATISFYING TO ANYONE. IN THIS TIME OF ECONOMIC UNCERTAINTY,
WE NEED BUSINESSES THAT STIMULATE DEMAND FOR PRODUCTS THROUGHOUT
THEIR INDUSTRY TO RETURN WORK AND NOT! ENCOUNTER NEW OBSTACLES TO
GROWTH.
THANK YOU FOR THE OPPORTUNITY TO EXPRESS MY CONCERNS REGARDING
THE LAWSUIT AND PROPOSED SETTLEMENT.
KAY KING, OWNER/PRESIDENT
TRAVEL WORLD. INC
5922 Ashworth Road
West Des Moines, Iowa 50266
Office: 515.223-7474 .
Fax: 515-223-7722
MTC-00029870
Management Reports Incorporated
23945 Mercantile Koad
Beachwood, OH 44122-5924
January 7, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC, 20530-0001
Dear Mr. Ashcroft:
At first glance, many companies in the IT community were elated
when the Department of Justice filed their suit against Microsoft.
As time went on, however, it became evident that the punitive nature
of the suit would probably end up more damaging than helpful to the
entire IT community.
Now there is this settlement. I believe this settlement to he
amply fair. It is my hope that it will prevail through this period
of public comment, and that no further federal action will be
contemplated. The settlement's call for interoperability protocol
disclosure and Windows reconfiguration will ensure that more varied
and effective computer software is brought to the market.
The IT business community has already been hit with slowdown and
its share of business failures, both of which cut into the ability
to quickly rebound. As the IT business has faltered, so has our
entire national economy. It is time to put all of this
unpleasantness behind us and allow the IT community to regain its
position of strength. It is here that our economic recovery as a
nation will be greatly enhanced.
Sincerely,
Robert Burger
IS Manager
MTC-00029871
Kevin H. Smith
12435 129th Avenue E
Puyallup, WA 98374
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I favor an immediate resolution to the Microsoft anti-trust
case. A settlement proposal exists. It has the support of the major
parties and the majority of party states. It is fair and it is
workable and it deserves to be ratified by the government and
enacted.
The settlement agreement addresses the concerns and the
complaints of all parties. It leaves Microsoft whole while requiring
the company to adopt practices that benefit its competitors.
Microsoft must abandon predatory market practices. It must open its
systems and technology to the exploitation of its competitors. It
must now license its Windows platforms to computer manufacturers
without exclusivity requirements for its software. These and other
settlement terms, which Microsoft has accepted, make it clear that
the company is willing to actively contribute to a new more
competitive marketplace and justify an end to this case.
Please support this settlement and use your influence to
convince the congress that it is, as it is in fact, the best thing
for everyone.
Sincerely,
Kevin H. Smith
MTC-00029872
FACSIMILE COVER PAGE
To: Renata B. Hesse
From: Bill Barmes
Sent: 2/1/2002 at 10:17:56 AM
Pages 1 (including Cover)
Subject: Microsoft Settlement
I am a VAR (Value Added Reseller) in the state of Idaho. I
believe it is extremely important for the economy of this country to
have the DOJ Microsoft agreement resolved as soon as possible. The
Small Business Owner not only in Idaho but accross the country has
already been badly affected by this process being dragged out. We
all need to move forward and get OUR economy going again in the
right direction.
Bill Barmes
CompNet Systems
208-283-5400
bbarmes @ velocitus.net
fax 208-388-0610
MTC-00029873
Bill Hughes
33 Deborah Drive
Roswell, New Mexico 88201-6501
January 27, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0011
Dear Mr. Ashcroft:
I am of the opinion that the settlement that was reached between
the Justice Department and the Microsoft Corporation is fair and
reasonable, and I am in full support of it. It is nice to see that
the lawsuit that has leveled the stock market and pushed our economy
into recession is over, and I hope that the other states still
involved in litigation will follow the lead of the federal
government.
The settlement does not go easy on Microsoft, but will be
beneficial to the entire information technology industry and the
economy. Microsoft has agreed to design future versions of Windows,
which will include a mechanism that will make it easier for computer
makers and consumers to install and use non-Microsoft software
within the Windows operating system. It will also make it easier to
add or remove access features that are built into Windows. This will
push the competition to develop better software that will rival
Microsoft's, and gives the consumer more choices. This gives the
consumer the best of all worlds. Competition in the information
technology industry will benefit as will consumer choice, This
settlement is good for everyone involved, and i stand behind it.
Sincerely,
Bill Hughes
MTC-00029874
January 28, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
I work in the financial services industry (commercial insurance)
and have closely watched the impact of the Microsoft lawsuit,
particularly its effect on the economy as a whole. I don't believe
it is a coincidence that just when the lawsuit was getting underway,
our economy began a significant downturn which some say we are just
beginning to come out of in recent weeks. Continuing this lawsuit is
only detrimental to the companies involved and the American economy
as a whole. It would be far more advantageous to
[[Page 28766]]
all parties to settle the matter with appropriate safeguards in
place to prevent a similar suit in the future. In my opinion this
suit did nothing to protect me or other American consumers. In fact
it harmed our buying power and the overall strength of the economy.
As I understand the settlement from media reports, Microsoft has
agreed to share intellectual property (which I don't think is right
or fair) and create software that would allow for more flexibility
for competing products to be used within Microsoft's operating
system. In addition, a special committee will be formed to ensure
compliance with all aspects of the settlement. It seems to be a fair
and just compromise. Continuing to cripple Microsoft to allow others
to "catch up" is not what our market economy is based
upon. The fair opportunity taken advantage of by Microsoft 20 some
years ago was open to all, do not further punish them for exercising
their opportunity.
Please accept the settlement before you and put this case to
rest. Thank you.
Sincerely,
Scott M. Scheidel
MTC-00029875
Advanced Network Design, Incorporated
301 N. Harvey
Oklahomg City, OK 73102
(405) 319-9795, Fax: (405) 319-9824
January 28, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
During the course of the past several years, there has been a
lot of saber-rattling going on between Microsoft and the department
of Justice over this lawsuit. I personally do not think that the
ultimate goal of the government to break up Microsoft would have
survived a Supreme Court review, but the very threat seems to have
tamed Microsoft into this settlement.
In the unlikely event that Microsoft would have ever been broken
up, it could have been beneficial for my company. However, it must
be quickly said that the Microsoft product line is deservedly
superior to anything on the market today. The long-term effects of
having Microsoft splintered through this lawsuit would have been
devastating for most consumers as well as many IT companies.
This settlement is therefore good. Even though its terms
encompass more than the lawsuit did, it has been accepted by both
sides and, with its acceptance, the struggle between our government
and Microsoft is over. i am hoping that this in itself will be
enough to allow all of us to put this behind us and move forward.
Sincerely,
John Woods
President
CC: Senator Don Nickles
MTC-00029876
ALLIED WASTE
Charlotte Metro District
January 19, 2002
Renate Hesse
Trial Attorney
Anlitrust Division
Department of Justice
601 D Street NW, Suite I200
Washington, DC 20530
Subject: Support for Microsoft Settlement
Dear Ms. Hesse:
I started in business as a very young man, working with my
father at the garbage company he owned. Since then I have worked
with a variety of companies in the waste industry. I have seers
dramatic changes not only in this industry but also in the national
economy, Technology is a driving force in the waste industry and the
economy, providing the foundation for increased productivity,
consumer and business knowledge and millions of new jobs in almost
every industry.
Microsoft has been the leader in technology, not only in the
United States, but internationally through its establishment of
technology standards and integration of software. The efforts to
restrict Microsoft's ability to compete could have serious
implications for our economy. I urge a speedy resolution to the
antitrust lawsuit. The proposed consent decree offers new
flexibility and access to the tachnical aspects of Microsoft
software so that computer makers and software developers can
integrate non-Microsoft products into computer operating systems.
Microsoft itself, its competitors, computer manufacturers,
information technology providers and, most important of all, the
consumer and end-users will benefit from the protections provided in
the settlement agreement. It is time to accept this agreement and
allow Microsoft and other technology companies to return to building
a competitive technology industry.
Sincerely,
Jimmie Jones
P.O. Box 219/ Pineville, NC
28234/ 704.377.0161/ 803.548.2026 FAX
Waste Services of Charlotte
January 17, 2002
Renata Hesse
Tria1 Attorney
Antitrust Division
Department of Justice
601 D Street NW. Suite 1200
Washington, DC 20530
Fax 202-616-9937
Subject: Support for Microsoft Settlement
Dear Ms. Hesse:
For more than 20 years, I have worked in different aspects of
the waste management industry During that time, I have seen dramatic
changes in my industry as well as the overall economy. Certainly the
use of technology has dramatically changed the way business is done,
The waste industry is much more efficient and more capable of
keeping track of equipment, waste sites and a variety of other
aspects of our work because of technology.
I have watched the antitrust litigation against Microsoft with
interest not only because of the impact on technology but also the
impact it could have on innovation and product development. While
not a panacea for the concerns voiced by computer makers and
software developers, the proposed settlement agreement will give
them new rights to configure Windows so that non-Microsoft products
can be used. Microsoft has also agreed to the establishment of a
technical committee to monitor progress of the settlement and to
provide a venue for concerns of computer makers, software developers
and consumers.
Microsoft will have the freedom to continue efforts to develop
new and innovative products, Innovation is key in this country's
ability to thrive in a global marketplace where foreign competitors
try to replicate our products and sell them st cheaper prices to
undercut our economic growth, The proposed settlement, agreement
provide protections to all involved in this industry Microsoft
itself, its competitors, computer manufacturers, information
technology providers and, most important of all, the consumer. From
my own experience, I know how difficult it is to come up with a
compromise I encourage a quick resolution to the litigation so the
technology industry can focus on regaining its competitive edge in
the world economy.
Sincerely,
Tony Davies
5105A Morenead Road
Concord, NC 28027
(704) 393-6900, Fax (704) 782-2177
?? Pre??cts, Inc.
?? Break Read, FF-202
Charietie, North Carallas 28205
Phone 704-373-9889
Toll Free 888-332-2888
January 22, 2002
Ronal?? Hesso
Trial Attorney
Antitrust Division
Department of Justice
601 D Streat NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesso.
I am writing in support of the proposed settlement a??eement in
the United States v. Microsoft case The Antitrust laws were meant to
protect consumers, not to stop market competition. As a small
business owner, I believe this proposal will not penalize�
other competing operating systems. This proposed settlement
encourages more competition and groater innovation. All new
Microsoft operating systems, including Windows XP. would have to
include a mechanism that readily allows and users to remove or to-
enable Microsoft's middleware products, such as the Internet web
browser We need to be encouraging the technology sector, which is
critical to out economic recovery.
This Agreement is good for the technology industry, the economy
and consumers
Sincerely,
Evan J. Boxer
President
EJn/dgb
MTC-00029877
John O'Donnell
13000 NE 28th Place
Bellevue, WA 98005
January 27, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing in full support of the recent settlement between
Microsoft and the US
[[Page 28767]]
Department of Justice. It is time that this foolishness comes to a
prompt end. More than enough time has been used to cover all of the
bases and I feel that it is just a political standoff at this point.
The terms of the settlement make apparent to me the intense
lobbying efforts of Microsoft's competition as they will be granted
new rights to configure Windows so that non-Microsoft products can
be promoted more easily and also be given interfaces that are
internal to Windows' operating system produces.
Even though these concessions do not actually protect consumers
and just help Microsoft's competitors that were unable to be
innovative on their own, I urge your office to finalize the
settlement. It is in the best interests of our economy, IT sector,
and public for the case to end and our country to move on. Thank
you.
Sincerely,
John O'Donnell
MTC-00029878
Beverly Duncan
8310 E MORRIS ST
WICHITA, KS 67207
Renata Hesse
Trial Attorney
Antitrust Division
US Department of Justice
601 D Street NW--Suite 1200
Washington, DC 20530
Attorney Hesse:
Please accept the settlement before involving the Department of
Justice's antitrust suit against Microsoft. Based on what I have
seen on the news and read in the papers lower courts have ruled that
Microsoft should not be broken up and have thrown out much of the
original case. It is my understanding that this occurred because the
case revolved around proving consumer harm and such harm has never
been proven.
While this case has gone on for the last several years, we have
all felt its negative impact on our wallets. Whether you consider
the astronomical costs that taxpayers must bear or the millions lost
in the stock-market, the effects of this case have been negative to
average Americans. In an effort to resolve this case the Justice
Department and Microsoft have wisely found a way to reach an
agreement. It seems to me this agreement more then addresses any
concerns some may hold about Microsoft's business practices.
Please support the settlement before the court.
Sincerely,
Beverly Duncan
MTC-00029880
Gary G. Hill
44024 Countryside Druive
Lancaster, CA 93536
January 26, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
Re: Microsoft Settlement Support
As an elected member of the Antelope Valley Health Care District
representing 450,000 people, I am writing this letter as in support
of the settlement in the case against Microsoft. I believe that this
whole suit was a waste of time and money. Only in America do we
focus on tearing down success, and destroying a product line the
works. There are choices out there, but none of them work as well as
the Microsoft products.
There are more pressing issues that are of concern to me in this
country such as the energy crisis here in California. The state has
lost $22 billion dollars resulting in consumers getting gauged. In
addition, the price of gas has risen 20 cents per gallon, just in
the last week. The Department of Justice should have taken a strong
NO to the rash of oil company mergers this past decade; we can live
without a home computer, but must have gasoline (real public transit
has not arrived yet) Microsoft did not get off as easy, as its
opponents would have people think. They agreed to terms beyond what
was required in the suit. They also agreed to design future versions
of Windows, starting with an interim release of XP, to provide a
mechanism to make k easy for computer companies, consumers and
software developers to promote non-Microsoft software within
Windows.
Microsoft seemed to be generous when settling the case. Let's
end litigation now so that Microsoft can go back to work. We, the
American people, need a company like Microsoft to stay strong, so
they can continue to create innovative products, well paying jobs,
and help strengthen the tech sector of the economy.
Sincerely
Gary G. Hill
MTC-00029882
TAMMY FOX
Renata Hesse
Thai Attorney
Anti-Trust Division
U.S. Department of Justice
601 D St., NW
Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
After years of hearing and reading about the Microsoft antitrust
case, it is a great opportunity for the those of us in the general
public to voice our opinion as part of the official record. Thank
you for the opportunity to do so.
Bill Gates started his company in his garage. Today, it's one of
the largest software companies in the world. There is no better
example in our time of fulfilling the American Dream. This man and
his company are what entrepreneurial spirit is all about. When
raising our children, never was it instilled in them to work hard,
work smart, build something, BUT be careful not to get too big
because if you do, the government might try to take it away. That is
not how our country became the economic super power it is today. We
got there with freedom and free enterprise. Clearly, I disagree with
the premise of this entire case. However, we are past that point.
Now we are at a place, after three long years of courtrooms and
lawyers, where you have a decision to make On a proposed settlement.
The agreement presented delivers what the federal and state
governments involved felt they needed--oversight of Microsoft's
business operations. I hope you will see fit to endorse the
agreement so we can all move on.
Thanks Again,
Tammy Fox
2136 Blake Boulevard SE
Cedar Rapids, Iowa 52403
MTC-00029883
State Senator Stan Clark
205 US Highway 83
Oakley, KS 67748
January 25.2002
Judge Kolar-Kottely
Attn: Renata Hesse, Antitrust Division, U.S. Department of Justice
601 D Street, NW, Suite 1200
Washington. DC 20530
Dear Judge Kolar-Kottely,
This is a difficult time for our nation as we face economic
hardship we have not seen in a decade. As a state senator, I know
the difficulties that come with this economic downturn. My own state
of Kansas is facing budget shortfalls and the threat of increased
taxes as a result.
I understand that the economic situation is the result of a
number of elements that together have culminated in a recession.
Some of these elements, like the attacks on America on September
11(th), were beyond our immediate control. Others elements, like the
monetary" policy of the Federal Reserve are controlled
directly by the government. The US Department of Justice's antitrust
suit against Microsoft is another event that contributed to our
economic downturn at the hands of our own government.
There is quite a pool of evidence that demonstrates that
specific events during the government's case against Microsoft had a
direct correlation to the state of the stock market, Upon Judge
Jackson's "findings of fact" against Microsoft, the
NASDAQ fell. Upon his recommendation for splitting up the company,
there was another NASDAQ freefall.
The lawsuit against Microsoft may seem to be a small part of the
whole economic picture, but it is difficult to deny that the case
has had a negative economic impact--and on one of the driving
sectors of our economy: the high-tech industry".
When the high-tech industry is ailing, the rest office economy
suffers as well. Technology is so integrated into our daily lives
that we sometimes forget just how dependent up on it we are. Thus
the ripple effect through the economy. When high-tech hurts,
everybody hurts.
From what I understand of the settlement accord the Department
of Justice, state attorneys general and Microsoft Corp have agreed
to, the major concerns of the government have been addressed; yet
Microsoft is kept from breakup and allowed to continue to be an
innovator in our high-tech industry.
I hope you take a valuable step forward for our national economy
by lending your approval to this settlement. It is a timely and
appropriate way to end this suit and allow our country's economy to
begin to repair itself.
Sincerely,
Sen. Stan Clark
[[Page 28768]]
MTC-00029884
VIRGINIA V. MANN
3004 Normandy Place
Evanston, Illinois 60201
January 25, 2002
Renata B. Hesse
Anti-trust Division
US Department of Justice
601 D Street, NW
Washington, DC 20530
Sent via fax to: 202-307-1454
Dear Ms. Hesse:
I was pleased to hear that the Department of Justice had settled
its ridiculous suit against Microsoft. Clearly, this lawsuit was
politically driven and using our government and our laws in this
fashion was unfortunate from the beginning. I am relieved to see
this dispute resolved, although believe it should never have been
brought in the first place.
Although Microsoft has agreed to the restrictions in this
settlement, I believe it is unfortunate that our government has
chosen to do anything less than completely dropping the case.
Microsoft has done more to improve our efficient and effective
communications than has any other company in history. They should be
left alone to continue their fine work without further interference
from our government.
Sincerely,
MTC-00029885
Mark D. Snipe
420 West 42(nd) Street, Apt, 11F
New York, New York 10036
To: Attorney General's office
Fax: 202-307-1454
From: Mark D. Snipe
Date: 1/28/02
Re: Microsoft Settlement
Pages: 2 (including fax cover page)
CC:
420 West 42nd Street, Apt. 11F
New York, NY 10036
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing you today to express my opinion m regards to the
Microsoft antitrust dispute. I fully support Microsoft in this
dispute and feel that this company is being punished for being
successful. Microsoft has contributed such a great deal to our
society that stifling this company would only have adverse
consequences for consumers. I support the settlement that was
reached in November and believe that this settlement will serve in
the best public interest.
Microsoft has agreed to all provisions of this agreement.
Microsoft is willing to grant computer makers broad new rights to
configure Windows so as to promote non-Microsoft software programs
that compete with programs included within Windows. Microsoft has
also agreed to design future versions of Windows to provide a
mechanism to make it easy for computer makers, consumers, and
software developers to promote non-Microsoft software within
Windows.
This settlement is thorough. Continuing litigation against
Microsoft will only serve to negatively impact our economy and
consumers. Please support this settlement so that this company can
devote their resources and time to innovation, rather than
litigation. Thank you for your time.
Sincerely,
Mark Snipe
MTC-00029886
To:
Fax:
Date:
Subject:
FAX
Citizens for a Sound Economy
Phone 202 783-3870
Fax 202 783-4687
1250 H Street NW
Suite 700
Washington, DC 20005-3908
To the U.S. Department of Justice:
I am writing in support of the recent settlement of the long-
running antitrust lawsuit between the U.S. Department of Justice,
state attorneys general and Microsoft Corporation. Though I applaud
the nine state attorneys general that decided to follow the federal
government's lead and settle the case, I am thoroughly disappointed
that remaining state attorneys general and the District of Columbia
have decided to further pursue this baseless case.
The settlement is fair to all. It will allow Microsoft's
competitors to use Microsoft's Window's operating system to
incorporate their software programs and will give consumers more
services and products to choose from.
As you are well aware, members of Citizens for a Sound Economy
have been unrelenting in our opposition to the federal government's
antitrust case against Microsoft. For nearly 3 years, activists like
myself have called, emailed, visited, and sent letters to the U.S.
Department of Justice and to state attorneys' general offices
explaining that Microsoft's actions did not harm consumers, but
provided them with great benefits by lowering the cost and
increasing the availability of software products. We have stressed
that Microsoft is a pioneer in the high-technology market and that
their products increased our familiarity with the Internet. Once
again, I thank you for your decision to settle this unfortunate
lawsuit against a successful and innovative company.
Respectfully,
Name:
Address:
Email:
To the U.S. Department of Justice:
I am writing in support of the recent settlement of the long-
running antitrust lawsuit between the U.S. Department of Justice,
state attorneys general and Microsoft Corporation. Though I applaud
the nine state attorneys general that decided to follow the federal
government's lead and settle the case, I am thoroughly disappointed
that remaining state attorneys general and the District of Columbia
have decided to further pursue this baseless case.
The settlement is fair to all. It will allow Microsoft's
competitors to use Microsoft's Window's operating system to
incorporate their software programs and will give consumers more
services and products to choose from.
As you are well aware, members of Citizens for a Sound Economy
have been unrelenting in our opposition to the federal government's
antitrust case against Microsoft. For nearly 3 years, activists like
myself have called, emailed, visited, and sent letters to the U.S.
Department of Justice and to state attorneys" general offices
explaining that Microsoft's actions did not harm consumers, but
provided them with great benefits by lowering the cost and
increasing the availability of software products. We have stressed
that Microsoft is a pioneer in the high-technology market and that
their products increased our familiarity with the Internet. Once
again, I thank you for your decision to settle this unfortunate
lawsuit against a successful and innovative company.
Respectfully,
Print Name:
Address:
Email:
To the U.S. Department of Justice:
I am writing in support of the recent settlement of the long-
running antitrust lawsuit between the U.S. Department of Justice,
state attorneys general and Microsoft Corporation. Though I applaud
the nine state attorneys general that decided to follow the federal
government's lead and settle the case, I am thoroughly disappointed
that remaining state attorneys general and the District of Columbia
have decided to further pursue this baseless case.
The settlement is fair to all. It will allow Microsoft's
competitors to use Microsoft's Window's operating system to
incorporate their software programs and will give consumers more
services and products to choose from.
As you are well aware, members of Citizens for a Sound Economy
have been unrelenting in our opposition to the federal government's
antitrust case against Microsoft. For nearly 3 years, activists like
myself have called, emailed, visited, and sent letters to the U.S.
Department of Justice and to state attorneys" general offices
explaining that Microsoft's actions did not harm consumers, but
provided them with great benefits by lowering the cost and
increasing the availability of software products. We have stressed
that Microsoft is a pioneer in the high-technology market and that
their products increased our familiarity with the Internet. Once
again, I thank you for your decision to settle this unfortunate
lawsuit against a successful and innovative company.
Respectfully,
Print Name:
Address:
Email:
To the U.S. Department of Justice:
I am writing in support of the recent settlement of the long-
running antitrust lawsuit between the U.S. Department of Justice,
state attorneys general and Microsoft Corporation. Though I applaud
the nine state attorneys general that decided to follow the federal
government's lead and settle the case, I am thoroughly disappointed
that remaining state attorneys general and the District of Columbia
have decided to further pursue this baseless case.
[[Page 28769]]
The settlement is fair to all. It will allow Microsoft's
competitors to use Microsoft's Window's operating system to
incorporate their software programs and will give consumers more
services and products to choose from.
As you are well aware, members of Citizens for a Sound Economy
have been unrelenting in our opposition to the federal government's
antitrust case against Microsoft. For nearly 3 years, activists like
myself have called, emailed, visited, and sent letters to the U.S.
Department of Justice and to state attorneys" general offices
explaining that Microsoft's actions did not harm consumers, but
provided them with great benefits by lowering the cost and
increasing the availability of software products. We have stressed
that Microsoft is a pioneer in the high-technology market and that
their products increased our familiarity with the Internet. Once
again, I thank you for your decision to settle this unfortunate
lawsuit against a successful and innovative company.
Respectfully,
Print Name:
Address:
Email:
To the U.S. Department of Justice:
I am writing in support of the recent settlement of the long-
running antitrust lawsuit between the U.S. Department of Justice,
state attorneys general and Microsoft Corporation. Though I applaud
the nine state attorneys general that decided to follow the federal
government's lead and settle the case, I am thoroughly disappointed
that remaining state attorneys general and the District of Columbia
have decided to further pursue this baseless case.
The settlement is fair to all. It will allow Microsoft's
competitors to use Microsoft's Window's operating system to
incorporate their software programs and will give consumers more
services and products to choose from.
As you are well aware, members of Citizens for a Sound Economy
have been unrelenting in our opposition to the federal government's
antitrust case against Microsoft. For nearly 3 years, activists like
myself have called, emailed, visited, and sent letters to the U.S.
Department of Justice and to state attorneys" general offices
explaining that Microsoft's actions did not harm consumers, but
provided them with great benefits by lowering the cost and
increasing the availability of software products. We have stressed
that Microsoft is a pioneer in the high-technology market and that
their products increased our familiarity with the Internet. Once
again, I thank you for your decision to settle this unfortunate
lawsuit against a successful and innovative company.
Respectfully,
Print Name:
Address:
Email:
To the U.S. Department of Justice:
I am writing in support of the recent settlement of the long-
running antitrust lawsuit between the U.S. Department of Justice,
state attorneys general and Microsoft Corporation. Though I applaud
the nine state attorneys general that decided to follow the federal
government's lead and settle the case, I am thoroughly disappointed
that remaining state attorneys general and the District of Columbia
have decided to further pursue this baseless case.
The settlement is fair to all. It will allow Microsoft's
competitors to use Microsoft's Window's operating system to
incorporate their software programs and will give consumers more
services and products to choose from.
As you are well aware, members of Citizens for a Sound Economy
have been unrelenting in our opposition to the federal government's
antitrust case against Microsoft. For nearly 3 years, activists like
myself have called, emailed, visited, and sent letters to the U.S.
Department of Justice and to state attorneys" general offices
explaining that Microsoft's actions did not harm consumers, but
provided them with great benefits by lowering the cost and
increasing the availability of software products. We have stressed
that Microsoft is a pioneer in the high-technology market and that
their products increased our familiarity with the Internet. Once
again, I thank you for your decision to settle this unfortunate
lawsuit against a successful and innovative company.
Respectfully,
Print Name:
Address:
Email:
To the U.S. Department of Justice:
I am writing in support of the recent settlement of the long-
running antitrust lawsuit between the U.S. Department of Justice,
state attorneys general and Microsoft Corporation. Though I applaud
the nine state attorneys general that decided to follow the federal
government's lead and settle the case, I am thoroughly disappointed
that remaining state attorneys general and the District of Columbia
have decided to further pursue this baseless case.
The settlement is fair to all. It will allow Microsoft's
competitors to use Microsoft's Window's operating system to
incorporate their software programs and will give consumers more
services and products to choose from.
As you are well aware, members of Citizens for a Sound Economy
have been unrelenting in our opposition to the federal government's
antitrust case against Microsoft. For nearly 3 years, activists like
myself have called, emailed, visited, and sent letters to the U.S.
Department of Justice and to state attorneys" general offices
explaining that Microsoft's actions did not harm consumers, but
provided them with great benefits by lowering the cost and
increasing the availability of software products. We have stressed
that Microsoft is a pioneer in the high-technology market and that
their products increased our familiarity with the Internet. Once
again, I thank you for your decision to settle this unfortunate
lawsuit against a successful and innovative company.
MTC-00029891
January 25, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Fax: 202-616-9937
Dear Ms. Hesse:
As the new Commissioner of the Babe Ruth Softball League, I am
confident in the future of our programs. I only wish that I had
reason to be as optimistic about the future of the American economy.
It seems as though everywhere I look I see doubt, confusion and a
lack of stability in the American economy. We've got to improve this
situation
I think that President Bush has the right ideas: strengthening
our military, improving education and cutting taxes will make our
nation stronger, smarter and more ready for business. However,
consumer confidence in the short term must be fixed in order to spur
growth. The American people want to see their government working to
help create jobs. In that spirit, I believe that the pending
settlement in the federal government's antitrust suit against
Microsoft needs to be finalized. Think about it: the stock market
took a nosedive when the federal courts announced that they planned
to dissolve Microsoft. The economy has never recovered. We need to
reverse this trendl
When I think of every American out of work, it makes me realize
how needless and futile that any further pursuit of this lawsuit
would be. We need our industry leaders, particularly our industry
giants, like Microsoft, to be as strong as possible. Our government
should work cooperatively to bolster, not weaken, them.
I request that Judge Kollar Kotelty approves the settlement.
Sincerely,
Famie Horn
MTC-00029892
Adam Marigold
January 27, 2002
Renata Hesse
Trial Attorney
Anti-Trust Division
U.S. Department of Justice
601 D St., NW
Suite 1200
Washington, DC 20530
Dear Ms, Hesse:
The antitrust case against Microsoft brought the booming success
of the high-tech industry to a screeching halt.
Microsoft has been a leader in the surge in both the high-tech
sector and our overall economy. The case caused numerous slides on
Wall Street costing investors everywhere. Future success for not
only tech companies, but businesses of all types, seems in jeopardy
of government intervention.
The marketplace is constantly changing and guarantees success to
no one, but opportunity for success to all. Government involvement
in business obstructs the workings of America's free-market system.
Customers determine what they want, what they like and buy it.
There's no sure thing. The federal government should not be placed
in a position of authority over the market--choosing champions
and runners up. There is a place for a limited government--to
protect.
Those who argue this is in fact the role the state and national
Justice Departments undertook in this case, should be asking
[[Page 28770]]
themselves--Why does this settlement come three years too late?
Three years after it began we have a wounded economy, a limping
technology industry, puzzled consumers and furious taxpayers. Please
accept the settlement before you.
Sincere
Adam Marigold
3906 B Ave NE
Cedar Rapids, IA 52402
(319) 363-3527
MTC-00029893
Commercial Underwriters
22720 Michigan Ave., Ste. #210
P 0 Box 1088
Dearborn, MI 4812t
Phone: (3t3) 278-3800
Fax: (3t3) 278-8467
TO: Attorney General John Ashcroft
DATE: 1/28/02
COMPANY:
FROM: US Department of Justice
FAX# 202-307 145/05 616-9937
FROM: Dan Schwartz
PAGES INC- COVER:
MESSAGE:
Please see Following page.
Click on us at:
www. CURMinc.com
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, N W
Washington, DC 20530
Dear Mr. Ashcroft:
I want to express my gratitude liar the work you have done since
being named Attorney General last year. I am especially pleased with
your decision to settle the government's anti-trust lawsuit against
Microsoft, and I fully support this settlement. Private businesses
should have the right to develop ideas and become successful from
them without being punished by the federal government.
This lawsuit has had very negative effects on the technology
industry, and this has carried over and hurt the U.S. economy.
Microsoft has agreed to change its business practices so that
competition can increase, the industry can be revitalized, and the
economy can be stimulated. The settlement calls for a three person
technical committee that will watch over Microsoft, and make sure
that no more anti-competitive behavior exists in the future.
Consumers will benefit from more choices in the marketplace, and
this was the desired outcome when the lawsuit began over three years
ago.
Settling now is the right thing to do for our country at this
time, and I thank you for your decision to end the litigation
against Microsoft. I am hopeful that this is truly the end of this
case at the federal level, and that there will no further action
taken against Microsoft.
Sincerely,
Dan Schwartz
P.O. Box 5644
Dearborn, M--I 48128
P.O. Box 1088,
Dearborn, Michigan 48121-1088
22720 Michigan Avenue,
Suite 210,
Dearborn, Michigan 48124
Phone (313) 278-3800
Fax (313) 278-8467--Toll Free
1-800-856-8701
www.curminc.com
MTC-00029894
JOSEPH TARTAGLIA
88 FARRELL DRIVE
WATERBURY, CT 06706
Renata Hesse, Esq.
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Via Facsimile 202-616-9937
Dear Ms Hesse:
This letter is to articulate my support for the proposed
settlement in the Microsoft case. The fact that over $30 million in
taxpayer dollars has been spent in this case during these trying
economic times is proof enough that this case has gone on far too
long. Hopefully, the settlement will signal a return to innovation
without the threat of government intervention.
The Department of Justice has done a commendable job in putting
together an agreement that is fair but won't put Microsoft out of
business. It is a reasonable conclusion to this case and I support
it wholeheartedly.
Sincerely,
Joseph Tartaglia
MTC-00029895
ASSOCIATED BROKERS
OF SUN VALLEY, LLC
Real Estate
January 28.2002
Mike Sampson
P.O. Box 2004
Sum Valley, ID 83353
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing in support of Microsoft and believe this whole
antitrust case has become political. I don't see how this benefits
consumers and businesses--especially at the expense of the
economy. The tech stocks are down. The technology sector is down.
The employment numbers are down. Let Microsoft get back to work and
the government get on with worthwhile business. The only people I
see benefiting from this case are the lawyers.
I am a small businessman who employs 25 people. I have greatly
benefited since 1982 from the products Microsoft produces and feel
they have been more than fair to me. If their competitors can't put
out a better product with competitive pricing and service that's
their problem. I don't see why I should suffer as a small
businessman.
After years of extensive negotiations and mediation, Microsoft
has gone out of their way to settle this case. They went well beyond
what would be required in any antitrust case. They agreed to design
future versions of Windows, starting with an interim release of XP,
to provide a mechanism to make it easier for computer companies,
consumers and software developers to promote their software within
Windows.
Let's end this litigation so that we can focus on what's really
important. Thanks,
Sincerely,
Mike Sampson
cc: Senator Larry Craig
MTC-00029896
Jesse L Clay
1205 Ridgecrest Drive SE
Albuquerque, NM 87108
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I would like to take some time to express to you my feelings
about the proposed settlement that was reached between Microsoft and
the Department of Justice. It is about time that the antitrust suit
ended, and I feel that the terms in the settlement, although harsh
on Microsoft, will be for the betterment of the computer industry
and the economy.
I am pleased with the prospect of the case being resolved, but I
think it was initiated for all of the wrong reasons. Microsoft's
competitors had a major role in initiating the litigation, because
they could not bring to the market a product that matched
Microsoft's own. The competition should be happy though. The terms
of the settlement require Microsoft to turn over to their
competitors source code and design data that are crucial to the
internal makeup of Windows. Enough is enough. This settlement needs
m he approved so the industry can get back on its feet, and with
competitors working more closely with one another, the industry will
benefit.
I feel the proposed settlement will benefit all parties
involved, including Microsoft's competitors.
Sincerely,
Jesse Clay
MTC-00029897
Carol Morse Sibley
92 Overlook Terrace
Bloomfield, NJ 07003-2917
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
The antitrust lawsuits against Microsoft have gone on for too
long. They are also not very well justified. Microsoft has not only
created jobs and wealth for our country, but also has made
technological breakthroughs that have revolutionized the IT sector.
I do wish that when they come out with new versions of software they
would always make it compatible with previous versions, which they
didn't do, for instance, with PowerPoint.
Still, it's clear that the settlement seems to only help
competitors gain an edge they were not able to gain beforehand. It
forced Microsoft to disclose interfaces that are internal to Windows
operating system products, and also grant computer makers broad new
rights to configure Windows so that non-Microsoft software can be
promoted more easily. It is in the best interests of the
[[Page 28771]]
American public to finalize the settlement. Our nation cannot afford
further litigation so I urge your office to use its influence to try
to rein in the nine states that want to drag this case out for even
longer. Thank you for your time.
Sincerely,
Carol Morse Sibley
MTC-00029898
Nancy A. Waxdahl
305 N. Chicago Avenue
Sioux Falls, SD 57103
605-332-5335 Home/Consultant Phone
January 24, 2002
Renata Hesse, Trial Attorney
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
I am addressing in this letter the settlement agreement in
U.S.v. Microsoft, and its benefits for our state and America's
economy.
Frankly, this case has run its course after four years and the
tremendous financial investment by federal and state governments,
and the Microsoft Corporation, I am aware that nine of the 18 states
in the antitrust case have chosen not to agree to settle, but I
think it speaks more loudly and convincingly when nine states and
the U.S. Department of Justice agree that this case has reached a
satisfactory conclusion.
As someone who has served on county and city boards which were
created a better quality of life, I am very pleased that a positive
result of this case wilt be the distribution of computers, software
and support for low income schools in the nation. Our state will
certainly benefit, particularly among the Indian populations where
some of America's poorest counties are found. I am also pleased that
this agreement indicates that this court action will finally end,
and Microsoft will be able to refocus its energies to providing the
leadership in information technologies. Because Microsoft has blazed
the path, America's technology industry has been a cornerstone to
our nation's economic position in the world. Please do what you can
to allow this agreement to be implemented so that we can all move
forward. Thank you very much.
Sincerely,
Nancy Waxdahl
MTC-00029899
JEFFREY Q. OLSON, D.D.S.
Clock Tower Plaza. Suite 211B
2525 West Main St.
Rapld City, SD 57702 605/342.2445
January 25, 2002
Renata Hesse, Trial Attorney
Antitrust Division
U.S, Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Trial Attorney Hesse:
Thank you for the opportunity to provide my Input on the
settlement reached recently in U.S.v. Microsoft. I am very pleased
that this antitrust case has settled after the years and millions
invested in pursuing every relevant issue involved, I realize that
it has been a complicated case which has caused the courts to enter
unfamiliar terrltory in determining the appropriateness of Microsoft
Corporation's practices as they affect its equally ambitious
competitors, However, I have been concerned that this case would
also act to stifle the dynamic ability of Microsoft--or any
other software firm--to create and successfully market the best
software which meets the needs of consumers Placing our government
in charge of micromanaging innovation would certainly limit the
ability of American software companies to keep our nation ahead in
technology development, For my dental practice and home use, I have
relied on Microsoft to provide a competent and versatile system to
conduct bustness and communicate with friends and family. I hope
this settlement will allow Microsoft to dived its resources into
continuing to make Its clients satisfied with its new products.
Sincerely,
Dr. Jeff Olson
MTC-00029900
COMMUNITY COLLEGE
224 NORTH PHILLIPS AVENUE
Sioux FALLS. SD 57104
605/336,1711
FAX: 605/336-2606
1-800-888. 1147
E-Mall: Info @ kee.cc.??d.us
January 17, 2002
Renata Hesse, Trial Attorney
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Renata Hesse:
My letter is for the public commentary portion of the settlement
phase in U.S. vs. Microsoft. As an educator in a Sioux Falls
college, one reason I support the settlement is it offers a chance
to improve education in South Dakota's and the nation's poorest
school districts by bringing IT equipment, software, and support to
them. This will create a ladder to those who've been trapped in the
IT access gap, and give these children the tools they will need to
continue their education in our state's colleges.
I also support the proposed settlement largely because it puts
an end to an antitrust suit which has not shown consumers have been
harmed by Microsoft, and because it has found answers to the issues
which were found to be important by the federal court system.
Additionally, when a case of this size and important has boon
running for four years with all of the resources brought into it, I
think you can safely assume that all valid issues have been brought
to light and all questions have been answered satisfactorily,
Apparently the U.S. Department of Justice thinks so, as do half of
the state attorneys general who brought the case.
Our own state did not join this antitrust action. Our Attorney
General felt it lacked enough ?? to warrant using our state's
limited financial resources to pursue it, I think he was right.
Considering them arc much more important and pressing matters before
the Department of Justice, I think it's time to call this matter
resolved and settled.
Thank you for your attention to my letter.
Sincerely,
Kip Scott
MTC-00029901
Randy
2408 W. Rice Street.
Sioux Fails. SD 57104
January 24, 2002
Renata Hesse--Trial Attorney
Antitrust Division
US Department of Justice
601 D Street NW--Suite "1200
Washington, DC 20530
Dear MS. Hesse:
With the court's approval, our nation will be best served by the
settlement agreement reached between the Department of Justice and
Microsoft Corporation. The settlement resolves the issues which were
found to be legitimate. It resolves an issue which has absorbed four
years and many millions in taxes from the Justice Department.
While our nation has endured a recession, one Of the strong
points in our recovery has been the Microsoft Corporation which has
Shown great resiliency, even though its resources and attention have
been split with the threats posed by the antitrust case. Microsoft
has ?? In one of the most hostile Industries because the entire
company's energetic focus is on remaining the leader in software
development. Their competitors are also very wealthy and they are
equally as determined to replace Microsoft as the leader. Therefore,
I am not surprised that half of the states in the original suit are
still in the hunt to bring down Microsoft.
I am impressed with one Of the gifts available In this
settlement, Which will target computers and Information technologies
resources for our nation's most poverty-stricken school districts.
My home state will probably be rewarded With these computers since
some of the nation's poorest counties are located in South Dakota. I
nave been an activist on social development Issues, Including my
service as Executive Director of the S.D. Alzheimer's Association. I
support this settlement not only because It ends an action which has
served its usefulness, but also because it benefits children who
need the help. I appreciate your consideration of my letter.
MTC-00029902
PAUL SYMENS
STATE SENATOR
3ENATE CH.AMBERS: RESIDENCE: TELEPHONE:
State Capitol RR Box 89 605/a48-5775 (home)
Pierre, SD 575Ol Amherst, SD 57421 605/448-2624 (work)
phone: 773-525I 605/448-5786 (fax)
January 18, 2002
Reacts Hesse, Trial Attorney
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Trial Attorney Hesse:
Thank you for the opportunity to provide my comments on the
settlement of U.S.v. Microsoft and the benefits this settlement will
have for the nation and our state. South. Dakota has been pro-active
in making information technologies ubiquitous for
[[Page 28772]]
children and adults throughout our state. Governor Bill Janklow's
Wiring the Schools Program is making high-speed, wide ban interact
service available in all schools and public buildings in every town.
Additionally, with the help of a $670,000 matching grant from the
Bill and Melinda. Gates Foundation, the state is bringing faculty
and administrators up to speed on using these systems so that more
children will benefit. The settlement from the Microsoft antitrust
case will result in financially disadvantaged school districts
receiving free software, hardware and technical support. For
disadvantaged kids, this is a case of what happens when preparedness
meets opportunity, In South Dakota, where the nation's three poorest
counties are found, this settlement will have great meaning for
young people seeking their way in tills world.
Aside from the educational benefit, I am glad that this ease is
nearly settled. It has absorbed an incredible amount of taxes and
four years of productive time to resolve the issues brought to the
court. Those issues are addressed in this settlement, and I believe
they should he satisfied. There are those who would like to continue
this case, I can't imagine that after all of the time and money
invested to date that anything useful or productive would be the
result. Please let this case become settled, Microsoft is part of
the foundation of our nation's economy, and continuing this case
will work only to weaken a corporation which has been a responsible
citizen to our nation. Thank you for considering my letter.
Sincerely,
Paul N. Symens
State Senator, District I
Paid for by Paul Symens for Senate Committe, RR Box 89, Amherst,
SD 57421
MTC-00029903
South Dakota Network
Against Family Violence and Sexual Assault
P.O. Box 20453.
Sioux Fails, SD 57109.
(605)731.0041.
sdnafvsa @ meleodusa.net
January 17, 2002
Renata Hesse, Trial Attorney
Antitrust Division
U.S, Department of Justice
601 D Street NW, Suite t200"
Washington, DC 20530
Dear Ms. Hesse:
My comments here are" in favor of the settlement in U.S.
vs. Microsoft, because the settlement's provisions will be a benefit
for children in regions" where poverty has prevented them from
accessing the intenet. The state government of South "Dakota
has put an emphasis of wiring our public schools and public"
buildings for the. internet, but obtaining good software and
hardware, and the support needed to make the system work smoothly,
have been lacking. The settlement will be of great benefit to this
program and to the state's children.
I also feel the settlement is the. right thing for our nation's
economy, I have used Windows products for work and pleasure, and I
am satisfied with the products. They empower people to gain the full
benefit of the information superhighway, and they enable business
people and nonprofits to correspond on the same technical level, I
think it is noteworthy that the antitrust case never established a
finding that consumers were shortchanged by Microsoft.
Your attention to my letter .is appreciated.
Sincerely,
Deb Aden
MTC-00029904
Mark Proctor
family & children advocacy services
713 N. Madison Avenue
Picrre, SD 57501
January 22, 2002
Renata Hesse
That Attorney
Anti-trust Division
US Department of Justice
601 D Street NW, Suite t200
Washington, DC 20530
Dear Ms. Hesse:
On the issue of the settlement agreement in US v. Microsoft,
please allow this agreement to move forward so that this anti-trust
case is allowed to come to a fair and final conclusion very soon.
The time and money which has gone into this case, in both the
government and private sectors, has been more than sufficient to
render sensible decisions, it is my understanding that the
settlement agreement addresses each of the issues which needed to be
addressed by the courts. It is interesting that none of Microsoft's
practices and policies were determined to be harmful to consumers.
AS someone who has worked in family and children advocacy projects
in Western South Dakota, I am pleased that an important aspect of
this settlement will help to bridge the IT gap among poorer Children
in the nation.
The distribution of computers and supplies by Microsoft is in
keeping with the reputation of the Bill ?? Melinda Gates Foundation.
The Foundation made a sizeable gift to our state to enhance the
development of IT services within South Dakota's public school
systems. And the Foundation has a tremendous record of philanthropic
contributions [o eliminate diseases worldwide through vaccination
programs. Despite the criticism by some, the remedy of forcing
Microsoft to install and maintain computer systems in public schools
to help the neediest children is profoundly wise and beneficial to
society.
Sincerely,
Mark Proctor
MTC-00029905
South Dakota Legislature
State Capitol,
500 East Capitol,
Pierre, South Dakota 57501-6070
January 22, 2002
Renata Hesse--Trial Attorney
Antitrust Division
US Department of Justice
601 D Street NW--Suite 1200
Washington, DC 20530
RE: Public commentary In U.S. v. Microsoft settlement
Dear Ms. Hesse:
Public service, for me, means investing my time and energy to
help improve the quality of life for the people in my legislative
district. That is why I have served as a member of the Rossbud Sioux
Tribal ??, and as a State Senator for 10 years, and now as a State
House member for my second year.
My legislative District 27 is home to the pine Ridge Reservation
and the Ro??obud Reservation, where you will find two of the poorest
counties in the entire United States, according to the U.S. Census
Bureau. My district is filled with kids who want to do well in
school no that they can make a good life for themselves as adults,
Everybody is encouraged by our Governor's program Wiring the Schools
because it brings wide band, high speed Internal capabilities to our
schools. But it is discouraging when you visit the schools and see
Kids waiting their turn to use systems which are slow, dilapidated
and not up to the standards of systems used by kids in other parts
of the United States.
That is one important reason why I support the settlement
agreement, because it will bring updated systems, software and
support to the schools in my district. Another strong point is the
fact that this antitrust case has been fully scrutinized and debated
for four years in the federal court system, and the settlement
agreement speaks to all of the significant issues which have
survived the court process. I have enough faith in the U.S. Justice
Department to know that this settlement is a good one, or it would
not have aigned off on the agreement.
Thank you for the opportunity to submit my opinion on this
important settlement.
Sincerely,
State Representative
MTC-00029906
STEVEN D. SANDVEN
LAW OFFICE5
300 HUNDRED BUILDING
300 NORTH DAKOTA AVENUS, SUITE 516
SIOUX FALLS, SD 57104-6026
PHONE: (605) 332-4408
FAX: (605) 332-4496
CELLULAR: (605) 941-1498
January 22, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Dept. of Justice
601 D Street NW / Suite 1200
Washington, DC 20530
RE: Public commentary on U.S.v. Microsoft Settlement
Dear Ms. Hesse:
In my service as General Counsel to the Sisseton-Wahpeton Sioux
Tribe at Lake Traverse Reservation, I am concerned with the
development of tribal schools and the education of Indian children.
My work also involves services to other tribes in more remote areas
of western South Dakota, North Dakota, and Kansas where education
programs are also viewed as essential to the economic survival of
Indian people and tribal governments.
Tribal schools throughout this region are becoming increasingly
interested in new technologies and making sure Indian children are
not left behind the curve with non-Indian students. That is why I
believe the Microsoft settlement is going to have untold benefits
for generations by supplying
[[Page 28773]]
these schools and schools of other low-income students with
computers, software and technical support they need to operate
competent systems.
As an attorney, I have been watching the antitrust case, and I
have taken an interest in its outcome. While consumers clearly have
not been hurt by anything Microsoft has done, I think it is
debatable whether Microsoft was inappropriate in its practices
against its competitors. I am glad to see that the U.S. Justice
Department and nine of the 18 states in the case come to terms with
Microsoft, because I think this case has had enough time and
resource paid to it to render a just settlement of issues.
I appreciate your interest in my thoughts on this settlement,
and I ask for a quick resolution to approve the settlement.
Steven D. Sandven
MTC-00029907
City of Winnfield
PHONE (318) 628-3939
FAX (318) 628-6773
P. O--BOX 509
WINNFIFLD, LOUISIANA 71453
winn @ imerica.net
Deano Thornton, Mayor
Council Members
TONY ASOSTA
KENNY CALDWELL
WILLIE HOLDEN
ANDRE" HOWARD
MATT MILAM
Date 1-28-02
From?? Fax No.318-428-4773
To?? Fax NO. 202-414-9937
Re: MESSAGE
Renata Heese
Trial Attorney
Antitrust Division Department of Justice
601 D. Street NW. Suite 1200
Washington. DC 20530
FAX: 202-616-9937
RE: Settlement of U.S. vs. Microsoft
Dear Ms. Heese:
I have always been a strong believer in the free enterprise
system. It is what built this country from the beginning and is
responsible for making us the economic giant of the world. This case
has cost taxpayers over thirty million dollars and It is high time
that it come to an end. Microsoft's competitors need to return to
competing in the marketplace When they do. the consumer wins and the
free enterprise system works.
The last thing the technology sector needs is more
"lawyers and governmental intervention. Please accept this
letter as complete support of the settlement and request that this
case come to an end.
Thank you.
Sincerely
Deano Thomoto
Mayor
DT/sp
MTC-00029908
Peripherals Plus Technologies, Inc
317 North Queen Sweet
Lancaster PA 17603
Phone 717.397.9752
Fax 717.397.9905
www.pptnet.com
January 23, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
Since the Courts reached a settlement on the Microsoft antitrust
case in November, I was hopeful we could move forward. Now with the
additional states and competitors coming forward to pursue further
litigation, I am starting to wonder if this benefits the consumer at
all or just the business of the competitor's.
Microsoft has been more than cooperative. They agreed to license
their Windows operating system products to the 20 largest computer
makers on identical terms and conditions, including price. They also
agreed to grant computer makers broad new rights to configure
Windows, in order to promote non-Microsoft software programs that
compete with programs included within Windows.
I urge you to put an end of this litigation fiasco. There are
more pressing issues upon which the government should be focused.
Sincerely,
Byron Wright
MTC-00029909
Ellisport Engineering, Inc.
January 28, 2002
To: Ms. Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Subject: Microsoft Settlement
Dear Ms, Hesse,
I believe the terms of the agreement are reasonable and fair to
all parties involved. This settlement represents the best
opportunity for Microsoft and the industry to move forward. To
continue prosecuting Microsoft is to punish one of the few American
companies who are helping us to compete in the international arena
of commerce,
Please settle this now. It is in the best interest of the
country.
Stephen T. Kicinski, PE
Ellisport Engineering, Inc.
20501 81st Ave. S.W.
Vashon, WA 98070
Telephone (206) 463-5311
FAX (206) 463-2578
E-Mall: Ellisportl @ aol.com
MTC-00029910
ReportWare
1460 Manzanita Lane
Reno, Nevada 89509-5207
(888) REPWARE
(775) 827-4494/Fax 827-3213
www.ReportWare.com
Sales @ ReportWare.com
January 27, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Re: Microsoft Settlement
Dear Mr. Ashcroft:
I support the settlement between Microsoft and the U.S.
Department of Justice. Please stop this foolishness.
I feel that, as an attorney and president of a technology firm,
I have some reasonable understanding of the issues in this case. It
is my strong feeling that the Government's actions have been overly
aggressive and caused problems damaging to the whole software
industry. I have no sympathy for Microsoft's competitors who have
sought to promote this case. I believe that they have done so in
order to gain advantage for their otherwise inferior software. I
have no economic relationship with Microsoft, beyond being in the
same industry and using their products--for which I pay retail.
I support Microsoft and this settlement and I hope you will lend
your support as well. Thank you.
Yours truly,
Randy Hanshaw
9President. ReportWare, Inc.
RH:gt
cc: Senator Harry Reid
MTC-00029911
34 Heritage Court
Randolph, NJ 07869
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to express my support of Microsoft and by
extension, the settlement recently proposed by the DOJ. I support
this settlement because Microsoft deems the terms fair and will
comply in the hope of regaining a measure of normalcy in the IT
industry as soon as possible. I am sure that this has been public's
desire from the very beginning.
However, I don't believe in the prosecution of Microsoft, in the
first place, in my mind, this all started due to an overzealous
prosecutor and competitor's which used the available court system as
a venue to retain competitive advantage, damn fairness and free
trade. Microsoft has brought new innovative products to market and
because they were superior, they've become widespread. Why on earth
should they be prosecuted for being successful?
To me the only good thing that has come out of this lawsuit is
that the public has been able to see the kind of company that
Microsoft is, one that provides products that the market wants, low
cost and effective computing solutions. That they bundled their
software, made it easier for me and I support them for it. It didn't
kill Netscape (I still use it) or any other competitor. They just
failed to be as successful as Microsoft, and now they're
complaining.
Microsoft's willingness to comply with the terms of this
agreement and those not even at issue in the lawsuit is a classic
example of their high caliber. Microsoft has agreed to allow their
competitors aspects of Windows that will facilitate competitiveness
such as Microsoft's internal interfaces, protocols and intellectual
property. To ensure their compliance, Microsoft has agreed to be
monitored by a Technical Committee.
In the interest of seeing a restored IT industry and a more
stabilized economy, please make the necessary decision to
[[Page 28774]]
formalize the proposed settlement, though I personally think it goes
to far.
Sincerely,
Richard Paeschke
MTC-00029912
The Genate
Slate of Iowa
Seventy-ninth General Assembly
STATEHOUSE
Des Moines, Iowa 50319
STEVEKING
STATE SENATOR
Sixth District
Statehouse: (515) 281-3371
HOME A ADDRESS
3897 Esther Avenue
??, Iowa 51448
Home--(712) 675-4572
Office--(712) 668-2300
FAX--(712) 675-4573
steve king @ legistrate ??
January 28, 2002
COMMITTEES
State Government, Chair
Appropriations
Business & Labor Relations
Commerce
Judiciary Oversight & Communications Appropriations Subcommittee
Vice Chair
Renata Hesse
Department of Justice, Antitrust Department
601 D St NW
Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
I am a State Senator from Iowa and I also the owner of
construction contracting business. In my capacity as a State Senator
I am chairman of the state government committee and also serve on
the commerce committee. I chose to serve on these committees because
as a business owner I am acutely aware of" negative impact:
over regulation can have on business It is from this unique
perspective that I am writing you today to encourage you to settle
the Microsoft anti-trust case
The suit against Microsoft was brought under anti-trust laws
that were developed in at a time in our history when our nation was
growing into the industrial and economic leader it is today. These
laws were meant to protect American consumers from harm inflicted by
monopoly companies. These laws have served their purpose in the
past. However, in this case, I do not think they apply the
government and Microsoft's critics have yet to prove consumer harm
as a result of Microsoft actions or practices.
As a businessman and strong supporter of our free-market system,
it is apparent to me that Microsoft's only crime is giving the
American public a superior product, and therefore has been able to
build a loyal following of committed users. Assumedly, Microsoft
worked very hard to develop its products and market. They should not
be punished for this or for having the business savvy to take action
to protect their market.
A closer look at this suit and the lobbying efforts that have
fueled it will expose disturbing realities. Microsoft's competitors
do not appreciate that technology consumers are overwhelmingly loyal
to Microsoft products. However, instead of committing to production
of new products that may allow them to more successfully compete in
our free-market, they have banded together and found a way to use
outdated anti-trust laws for their own purposes.
The settlement before you is truly a compromise for Microsoft.
Certainly, Microsoft will be held to the severe provision of this
settlement, not the least of which is the sharing of intellectual
property. However, negotiating settlement is the best solution for
the technology industry and our" economy in general. When this
settlement is approved it will send a signal to the technology
industry that the threat of government interference has been lifted.
Sincerely,
Senator Steve King
MTC-00029913
C. Cowdery
3926 NE Eighty-Ninth Street
Seattle, Washington 98115
January 22, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
After three long years of court baffles, Microsoft and the
government have settled an antitrust suit that has profound
implications for all software publishers, the rest of the
Information Technology industry, and American consumers. By ending
this case, the government is actually giving a boost to our sagging
economy.
The settlement has teeth. Under the agreement, computer
manufacturers were granted new rights to configure systems with
access to various Windows features. Microsoft must also design
future versions of Windows to make it easier to install non-
Microsoft software and to disclose information about certain
internal interfaces in Windows.
The government even went so far as to create an ongoing
technical oversight committee to review Microsoft software codes and
books and to test Microsoft compliance to ensure that Microsoft
abides by the agreement. This will help to promote fairness. In
conclusion, I don't think it will ever be necessary for the federal
government to ever bring any more litigation against Microsoft
beyond this agreement. This agreement is more than fair and
reasonable and was arrived at after extensive negotiations with a
court appointed mediator.
Sincerely,
C. Cowdery
MTC-00029914
RJA Pollinating Co.
P.O. BOX 58
450 West Main St.
Westmorland, CA 92281
760-344-3726
760-344-3091
FAX 760-344-0012
TO: MA Renata B. Hesse
Location: U.S. Dept by Justice--Antitrust Division
Telephone:
FAX: 202 616 9937
Date: 1-28-02
Comments:
Total Number of Pages Sent: 2
Approval:
RJA Pollinating Co.
P.O. Box 58 450
West Main St.
Westmorland, CA 92281
760-344-3726
760-344-3091 FAX 760-344-0012
January 28, 2002
Ms. Renata B, Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
VIA FACSIMILE: 202-816-9937
Dear Ms. Hesse:
As a concerned citizen with an eye for government waste, I
strongly believe that the antitrust case against Microsoft has been
a squandering of public resources. I also believe this was brought
on by those who have a liberal bias and are against corporate
America. Therefore, I support the agreement between Microsoft and
the nine plaintiff states.
As you know, our antitrust laws are supposed to protect
consumers, not competitors, What's going on here is that our
government is penalizing Microsoft for its success, The consequences
are far ranging. If the United States government can attack one of
the most successful companies in America, who's next?
As a believer in open markets and opponent of government
intrusion, I support "the Microsoft settlement.
Thank you for your time.
Sincerely,
Richard J. Ashcroft
MTC-00029915
1000 Chesterbrook Boulevard,
Suite 101
Berwyn, Pennsylvania 19312
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am happy to hear about the settlement that has been worked out
with Microsoft. It has taken three long years to finally reach an
agreement like this that is fair for both sides. I hope that the
Federal government will let this be it and finally put the matter to
rest.
The settlement is fair. First of all, Microsoft will adhere to a
uniform pricing list when licensing Windows out to the larger
computer vendors in the United States. Also, Microsoft has agreed
not to retaliate against companies that promote or use non-Microsoft
products. Most importantly, Microsoft has agreed to share sensitive
information with its competitors; information that will allow them
to more easily place their own programs on the Windows operating
system.
I know that many people who daily depend on Microsoft products
will write to you about this matter. I hope that you take their and
my opinions into account. I support the settlement, and look forward
to seeing the suit come to an end. As a consumer and a
[[Page 28775]]
user of Microsoft products, I do not feel that I am being
"clobbered" by Microsoft. Many of their competitors
would like you to think this is the case. Since many other companies
can't effectively compete with their own inferior products, they
want the taxpayers to help them get rid of Microsoft by way of a
government breakup. Enough is enough, settle the lawsuit and allow
Microsoft to get on with creating more innovative products!!
Sincerely,
Marc T Nettles
Cc: Senator Rick Santorum
MTC-00029916
Denterlein Worldwide
Honorable Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
C/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
RE: U.S. v Microsoft
Dear Judge Kollar-Kotelly,
At a time when innovation in the computer technology industry
should be booming the decision with regard to U.S. v Microsoft
certainly makes it very difficult for companies to find the
investment dollars to develop software. Limiting the ability of
companies competing, the settlement provides loopholes which will
probably keep this issue in litigation for years. Microsoft's
monopoly has grown stronger. Its Windows operating system and Office
Suite have higher than 90% usage. It is clear that operating systems
which may have posed a threat and others that might have competed
are no longer a concern.
If competition is precluded it is very unlikely venture capital
will be available. Investors historically will avoid the risk
involved when potential future development is impeded by a monopoly,
Consumers are affected as well be, cause they will not find
affordable products in the marketplace, The already sluggish job
market and economy certainly does not reflect the potential in the
industry if a monopoly did not exit.
It is clear that Microsoft hopes to expand to web services,
financial, cable and the like, perhaps even the interact. Without
venture capital companies will be unable to creatively address
emerging markets, At a time when government on all levels faces
serious challenges involving security and privacy issues they will
be limited in the software they can use if it is not compatible with
Windows.
There is nothing the settlement which will hinder Microsoft. It
will be business as usual. The settlement requires Microsoft to
share technological information unless Microsoft determines that
sharing the information might harm its security or software. In
addition Microsoft, due to its monopoly and dominant market share,
dictates the technologies, which will be compatible with Windows.
Ten Liberty Square
Boston. MA 02109
P: 617 482 0042
?? 617 357 6911
gerl @ denterleinworldwide.com
One of the three person technical committee will be selected by
Microsoft. The Department of Justice will choose a second member and
they must agree on the third member. There is no question that
companies will be less inclined to take on a monopoly when their
future business, if the challenge fails, may well depend on that
company. Microsoft will continue to be able to charge whatever it
wants for its products, prices will skyrocket.
The technical committee must identify violations of the
agreement. No findings may be admitted into court in enforcement
proceedings and compliance is only for five years. This seems a
short time for such a flagrant violation of antitrust law.
After all the years examining this important issue it would seem
a better solution could be found. I appreciate your interest. If
there is any additional information with which I may be of
assistance, please contact me,
Sincerely,
Geri Denterlein
President
CC: Honorable Tom Reilly, Attorney General
MTC-00029917
Lynch Associates, LLC
Honorable Colleen Koltar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B. Hesse Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
RE: U.S. v Microsoft
Dear Judge Kollar,Kotelly,
I am writing in regards to the proposed settlement between
Microsoft and the Department of Justice. In the decision on U.S.v.
Microsoft it appears that the settlement does not fully resolve
Microsoft's monopoly of the market and will continue to lead to
predatory, practices.
Microsoft's "bolting" of applications to their
software which was not terminated in the settlement has maintained
an unfair advantage for Microsoft in the distribution of these
applications. These types of practices don't create an environment
of fair competition, which creates a problem not only for their
competitors but also eventually for consumers.
It is clear that Microsoft hopes to expand its monopoly to web
services, financial, cable and the like, perhaps even the Internet.
If we let Microsoft continue this expansion ultimately consumers
will have to pay inflated prices for these products that we will
only become more dependant on. Antitrust laws were created to avoid
business being conducted in such a manner.
This deal also threatens to curtail innovation in an industry
that is a vital part of our new economy. At a time when serious
challenges face government and corporations they will be seriously
handicapped in choosing the high value systems they need for privacy
and security because compatibility with Windows does not exist.
The enforcement mechanisms in the settlement leave Microsoft
free to do whatever it wants. The three person technical committee
will only serve as a kangaroo court, which further threatens the
integrity of enforceability. Analysts from many sectors of the
technology industry have indicated the lack of impact the settlement
will have and will result in minuet changes in Microsoft's
practices.
10 Liberty Square, 5th Floor
Boston, Massachusetts 02109
Telephone: 617.574.3399
Facsimile: 617.695.0173
Enforcing federal antitrust laws is vital to maintaining the
integrity of free markets, It is important that we continue to
enforce them to protect the welfare of consumers and the
fundamentals that contribute to what makes our country's industries
great. I appreciate you taking your time to examine this important
matter. If there is any additional information I can provide for
you, please contact me
Sincerely,
Anne Lynch
Lynch Associates
CC: Honorable Tom Reilly, Attorney General Commonwealth of
Massachusetts
MTC-00029918
International Brotherhood of Electrical Workers
256 FREEPORT STREET
DORCHESTER, MASSACHUSETTS 02122
TELEPHONE; (617) 436-3710
FAX: (617) 436-3299
TOLL FREE: (800) 218-0015
WEBSITE: www, ibew103, corm
January 25, 2002
The Honorable Coleen Kollar-Kotelly
U.S. District Court, District of Columbia
C/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20540-000:t
RE: U.S. v Microsoft
Dear Judge Kollar-Kotelly:
After many years of investigating Microsoft with regard to
monopoly issues, a settlement has been struck which appears to
continue that monopoly. Limiting the ability of other companies to
compete, the settlement provides loopholes, which wilt probably keep
this issue in litigation for years.
The longer it takes for competition to be permitted the less
likely it is for those interested in investing venture capital to
risk taking a chance on potential future development by companies
hoping to compete. The result is that not only are consumers
affected in that they will be unable to buy an affordable product,
but the already sluggish job market will fail to reflect the
potential of the industry.
It is clear that Microsoft hopes to expand its monopoly to web
services, financial, cable and the like, perhaps even the internet.
Without venture capital companies will be unable to creatively
address emerging markets.
Although the agreement precludes Microsoft from paying a vendor
to keep it from developing or distributing software that would
compete, Microsoft is the determining body when an exception is
identified. Likewise Microsoft: must share technological information
unless Microsoft determines the
[[Page 28776]]
information may harm its security or software. In addition
Microsoft, due to its monopoly and dominant market share, dictates
the technologies, which will be compatible with Windows.
The Honorable Coleen Kollar-Kotelly
January 25, 2002
At a time when serious challenges face government and
corporations they will be seriously handicapped in choosing the high
value systems they need for privacy and security because
compatibility with Windows does not exist.
Although the technical committee will oversee the process,
Microsoft will choose one of its three members. The Department of
Justice will choose a second and they must agree on the third
member. There is no question that companies will be less inclined to
take on a monopoly when their future business may well depend on the
company. Given that Microsoft will continue to be able to charge
whatever it wants for its products, prices will skyrocket. The
technical committee of three must identify violations of the
agreement. No findings may be admitted into court in enforcement
proceedings and compliance is only for five years. This seems a
short time for such a flagrant violation of antitrust law.
After all the years examining this important issue it would seem
a better solution could be found. I appreciate your interest. If
there is any additional information with which I may be of
assistance, please contact me.
Sincerely,
Richard P. Gambino
Business Manager
cc: Honorable Tom Reilly, Attorney General
MTC-00029919
January 23, 2002
CARROLL LOGISTIC8 INC
P.O. Box 4797
Tisbury, MA 02568
TEL 617-945-1600
FAX 617-945-2416
Honorable Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
C/o Renata B. Hesse
Antitrust Division
U.S. Department. of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotelly,
I am writing with regard to the settlement between the
Department of Justice and Microsoft in U.S. v Microsoft. It appears
to violate antitrust law. Microsoft has a monopoly now and will be
permitted to expand it with regard to emerging markets.
The fact that Microsoft Is free to bolt financial services,
cable services or even the internet to Its Microsoft Windows is a
great concern. As companies develop software they will be unable to
address the issue of affordability due to the dependency on Windows
technology to function.
Microsoft may not pay a vendor to keep them from developing or
distributing software that would compete, however Microsoft is the
determining body when an exception is identified. Likewise Microsoft
must share technological information unless Microsoft determines the
Information may harm Microsoft security or software. In addition
Microsoft, due to its monopoly and dominant market share, dictates
the technologies, which will be compatible with Windows. Governments
and corporations will be unable to choose high value systems they
need for privacy and security if that compatibility does not exist.
Half of the technical committee will be appointed by Microsoft.
The Department of Justice and Microsoft each appoint one member
while they must agree on the third member. There is no question that
companies will be less inclined to take on a monopoly when their
future business may well depend on that company. Given that
Microsoft will continue to be able to charge whatever it wants for
its products, prices will skyrocket.
The technical committee of three must identify violations of the
agreement. No findings may be admitted into court in enforcement
proceedings and compliance is only for five years. This seems a
short time for such a flagrant violation of antitrust law. After
many years of examining this important issue I would think a better
solution could be found. I appreciate your Interest. If there is any
additional Information with which I may be of assistance, please
contact me.
Sincerely,
Thomas R Carroll
PO Box 4797
264 Sandpiper Lane
Vineyard Haven, MA 02568
CC: Honorable Tom Reilly, Attorney/General
MTC-00029920
allan associates
six osmanosen avenue
ball, massachusetts 02045
(781) 925-6388
January 22,2002
Hon. Colleen Kollar-Kotelly
US District Court
District of Columbia
C/o Renata B. Hesse, Antitrust Div.
US Dept. of Justice
601 D St. NW
Washington, DC 20530-0001
RE: US v Microsoft
Dear Judge Kollar-Kotelly,
The settlement agreed to by the Department of Justice and
Microsoft appears to fly in the face of antitrust laws. Although the
examination of this problem took a number of years, the results seem
inadequate and the penalties less than one would expect for such
serious violations of the law. Among the areas which are of concern:
* Microsoft will determine if any company's technology violates
Microsoft security or software. This would preclude a vendor from
distributing or developing software as proscribed by the settlement.
* Microsoft may bolt financial, cable services or even the
internet to Windows, creating a dependency on Windows technology for
all software developers.
* The technical committee which will oversee implementation will
be stacked in favor of Microsoft, as there will be one member
appointed by Microsoft, another appointed by the Department of
Justice and a third on whom both entities must agree.
* The process to" file a complaint would be unlikely to
attract many businesses challenging Microsoft, as the most probable
result would be the company then still having to deal with
Microsoft.
* Consumers will bear the brunt of this decision, as they will
find the expense of software reflected in the monopoly Microsoft
will hold in its development.
* At a time when governments and corporations are looking to
develop software to insure privacy and security it will be
impossible if compatibility with Microsoft Windows does not exist.
I am pleased that Attorney General Tom Reilly has agreed to
reject the settlement and is pursuing all avenues to assist
individuals and businesses in the Commonwealth of Massachusetts. I
appreciate your attention. Please contact me if I may be of
assistance.
Sincerely,
Virginia M. Allan
CC: Attorney General Tom Reilly
MTC-00029921
Law Offices of
Mark T. Collins
329D Boston Post Road Millbrook Park
Sudbury, Massachusetts 01776
Telephone (978) 443-7677
January 24, 2002
Honorable Colleen Kollar-Kotelly
U.S. District Court
District of Columbia
C/O Ms. Renata B. Hesse
United States Department of Justice
Antitrust Division
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotelly,
With regard to the settlement of the Department of Justice and
Microsoft in U--S--v Microsoft I would like to raise a few
issues. It appears Microsoft will continue to have a monopoly in the
marketplace. Expansion will only increase the corporation's ability
to intimidate smaller companies as they make an effort to produce
software at more affordable prices.
At a time when development of financial services, updated cable
services and the internet are offering challenges to many small and
midsized companies to be creative in new uses, the inability of a
company to progress without compatibility with Microsoft is a major
stumbling block. Microsoft in theory may not keep a vendor from
developing or distributing software, even if it might be
competition, but Microsoft itself will determine if a company's
information technology might adversely affect Microsoft's security
or its software.
Compatibility with Microsoft Windows is essential and Microsoft
makes the determination as to which technologies will be compatible
thus limiting the ability for companies whose technologies are not
included to procede.
The oversight of the settlement offers additional problems in
that Microsoft will be responsible for the appointment of one
individual on the technical committee. In addition the Department of
Justice appoints one other and the two must agree on the third. The
committee must identify violations of the settlement. In addition it
must hear
[[Page 28777]]
complaints from the companies whose products are not compatible. It
is highly unlikely that a challenge will be made against a company
which essentially controls the monopoly which at some point may well
control the smaller companies ability to develop future software,
Although Microsoft will comply with these lenient restrictions
it will only be required for five years. This seems a short time for
a penalty for violating antitrust law, Please contact me if you have
any questions.
Sincerely,
Mark T. Collins
CC: Honorable Tom Reilly
Attorney General
Commonwealth of Massachusetts
MTC-00029922
THE LIBERTY SOUARE GROUP
Honorable Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
C/O Renata Hesse
Antitrust Division
United States Department of Justice
601 D Street NW
Suite l200
Washington, DC 20530-0001
RE: US v Microsoft
Dear Judge Kollar-Kotelly,
I realize there has been discussion over many years concerning
this issue. It does seem a more equitable solution could have been
reached in light of antitrust laws. As it stands now, Microsoft can
still bolt financial services, cable or even the internet to Windows
hindering competition. The fact that Microsoft will determine what
technologies will be compatible with Windows makes it very difficult
for companies to develop software or for that matter find capital
investors to even be interested in their companies.
As it stands now both Microsoft Windows and Office Suites enjoy
a 90% user status. Expansion into other markets will expand that
usage even more. At a time when computer technology should be
expanding to address security and privacy issues in government and
corporations, the inability to compete is certainly not making it
the environment good for growth. The settlement provides many
loopholes which will probably keep the issue in litigation for
years.
Without competition it is very likely venture capital will be
unavailable. The affect on consumers will be reflected in the high
cost of software. The already sluggish job market and economy
certainly does not reflect the potential in the computer software
market. It is clear that Microsoft plans to expand to financial,
cable and the internet, expanding its monopoly. There is nothing in
the settlement which will hinder Microsoft.
One of the three people on the technical committee will be
selected by Microsoft. The Department of Justice will choose a
second member and they must agree on the third member. It is
apparent that companies will be reluctant to take on a monopoly when
their future business may well depend on that company. Microsoft
will continue to be able to charge whatever it wants for its
products, prices will skyrocket.
This issue has been discussed for many years. It seems a more
equitable solution could be determined, if I may be of any
assistance, please contact me,
Sincerely,
Scott M. Ferson
President
Liberty Square Group
CC: Attorney General Tom Reilly
MTC-00029923
JENNIFER E. LAWRENCE, ESQ.
Honorable Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B. Hesse Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
RE: U.S. v Microsoft
Dear Judge Kollar-Kotelly,
I am writing in regards to the anticipated settlement with the
Microsoft Corporation, This proposed settlement allows Microsoft to
preserve and reinforce its monopoly, while also freeing Microsoft to
use anticompetitive tactics to spread its dominance into other
markets. After more than 11 years of litigation and investigation
against Microsoft, it seems a more equitable solution can be
reached.
The deal fails to meet the appellate court's remedy standards,
which are clearly laid out by the appellate court. The following are
some examples of how the deal fails to meet the standards:
1. The settlement does not address key Microsoft practices found
to be illegal by the appellate court, such as the finding that
Microsoft's practice of bolting applications to Windows through the
practice of "commingling code" was a violation of
antitrust law. This was considered by many to be among the most
significant violations of the law, but the settlement does not
mention it.
2. The proposed settlement permits Microsoft to define many key
terms, which is unprecedented in any law enforcement proceeding.
3. The flawed settlement empowers Microsoft to retaliate against
would-be competitors and to take the intellectual property of
competitors doing business with Microsoft.
4. The deal fails to terminate the Microsoft monopoly, and
instead guarantees Microsoft's monopoly will survive and be allowed
to expand into new markets. The settlement is also fiddled with
loopholes making the enforceability of the settlement questionable.
The agreement requires Microsoft to share technical information
with competitors so that non-Microsoft software will work on Windows
operating systems. However, Microsoft is not required to do so if it
may harm the security or software licensing. The determiner of this
harm? Microsoft. The settlement also says that Microsoft
"shall not enter into any agreement" to pay a software
vendor not to develop software that would compete with its products.
However, another provision permits those payments and deals when
they are "reasonably necessary." Again who determines
this "reasonably necessary?" Microsoft.
The enforcement provisions in the settlement are weak and leave
Microsoft virtually unaccountable.
Microsoft is only subject to comply with the terms of the
agreement for a mere five years. Hardly an adequate amount of time
for a corporation found guilty of violating antitrust laws. The
three-person committee that is being assembled to identify
violations of the agreement will have nearly no effect since the
work of the committee cannot be admitted into court in any
enforcement proceeding.
The proposed settlement between the Department of Justice and
Microsoft in U.S.v. Microsoft falls short of what would be prudent
and necessary in rectifying Microsoft's monopoly and changing their
current practices.
Thank you for your time.
Regards,
Jennifer E. Lawrence, Esq.
MTC-00029924
4712 Ferncreek Drive
Rolling Hills Estates, CA 90274
January 27, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Attorney General Ashcroft:
I would tike to express some of my opinions regarding the
settlement agreement between your Department and Microsoft. I feel
that it is fair, reasonable, and extensive. I do not see the need
for further federal action, especially when nine states have
approved the agreement. Microsoft is currently negotiating with the
opposing states to reach a conclusion. Not only does this agreement
address the issues that brought about the lawsuits, but it provides
direction in dealing with future problems as weft.
Although the settlement calls for concessions that make
antitrust precedent, Microsoft has agreed in an effort to end this
case sooner rather than later. The company will stop retaliating
against those that design or p ore non-Microsoft programs, end will
allow computer makers to configure Windows so as to promote those
programs. Most importantly, a technical oversight committee will
ensure Microsoft's compliance with these concessions, and
competitors will be allowed to sue Microsoft directly if they feel
they've been treated unfairly.
I appreciate you taking time to consider my views on this issue.
We must bring certainty and stability back to the IT sector. This
agreement will allow the market, the industry, and the economy to
move forward.
Sincerely,
Erwin Oetken
MTC-00029925
Henry Kath P.O. Box 1920
Cottonwood, CA 96022-0351
January 18, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
[[Page 28778]]
As a citizen of California I am very disappointed that the
settlement reached between Microsoft and the Department of Justice
has not been accepted by my state. I believe that this suit has gone
much farther than was ever appropriate. It is my opinion that the
alleged crimes committed by this company are much less severe than a
number of people have made them out to be. Microsoft does not
deserve the callous treatment that they have been given, and the
continuation of this already protracted suit will not benefit either
the United States as a whole or the state of California.
The proposed settlement is well thought out and is a fair
conclusion to this unfortunate litigation. Microsoft will not commit
any further anti-trust infringements, the company will be monitored
by a three-man oversight committee which will ensure that all
business tactics engaged by the company in future are fair and do
not lean towards monopolistic practices. The settlement ensures that
Microsoft will not strike back against any company that develops
products that compete against its own. And finally, Microsoft will
develop all future versions of Windows to work more completely with
the products of competing companies. This settlement will remedy any
problems that any of Microsoft's competitors may have experienced
when dealing with this company. All of the states should jump at the
chance to accept the terms and finalize this costly litigation.
I understand the need to protect businesses and to ensure that
there is a fair playing field for everyone. However, free enterprise
must be protected. Without it, we lose the very fabric upon which we
have built this nation. I believe that we need to move forward as a
nation and to do so we need this settlement. Thank you for the work
that you have done to bring this agreement about and for ensuring
that we do not ring in another year with this costly litigation
hanging around our necks.
Sincerely,
Henry Kath
MTC-00029926
Elliott.
US Department of Justice
Attorney General John Ashcroft
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Elliott Davis Technology Solutions, LLC
1200 Woodruff Rd. Suite C40
P.O. Box 5088
Greenville, SC 29606-6088
Phone 864,281 7440
Fax 864.987.0180
1866281,74.10
January 22, 2002
Dear Mr. Ashcroft,
I personally believe that this lawsuit against Microsoft is
better settled. Even though many of the points enumerated in the
suit were valid, the litigation was quickly getting out of control
and could have resulted in a lot of unnecessary complications for
both Microsoft and for the IT businesses in general.
The points of the suit have been adequately addressed in the
settlement. The settlement, for example, requires more responsible
and flexible attitudes by Microsoft towards its OEM licensees as
well as to third party software developers, who will now be able to
take advantage of disclosure of Microsoft software code. Microsoft's
competition should be elated at this.
I am therefore writing in support of the settlement and hope
that this kind of lawsuit be prevented in the future.
Sincerely,
Charles Johnson
Partner
MTC-00029927
LS Consulting
Date: January 21, 2002
Renate Hesse
Triel Attorney
Antirust Division
Department of Justice
?? D Street NW. ?? 1200
Washington, DC 20550
Dear Ms. Hesse.
The Microsoft ?? case reminds me of the novel ?? Shrugged,
written by Ayn Rand In the novel, industral competitors turn to the
govenment and empower it to choose ?? and losers in the marketplace.
Without question, Microsoft's primary competitors have joined
into an unholy zilance with the judicial ?? of government, in an
effort to target the success of Microsoft are its popular software
You might also want to reference ?? Bastiat's The Law, to gain his
insights on how government attempts to choose winners and losers in
the marketplace.
I have been intimately involved with personal computers and the
software that drives them since the very ??. As a computer
consultant and a database software developer for nearly twenty
years, I would be amused by government lawyers with limited computer
skills--and an even more limited grasp of the actual inner
working of software--trying to dictate policy to a marketplace
that literally changes every day. If the slakes weren't: so high.
As an active an informed citizen, I have a thorough
understanding of the roles the branches of government are to play in
our society, and the businese, of choosing winners and losers in the
marketplace is not a function of government, in belongs to the
American consumer. Sign off on the proposed settlement before you in
this case and lot us do our work Sincerely,
Loras Schulte
In His ??
MTC-00029928
NASH FINCH COMPANY
Cedar Rapids Distribution Center
Rob Reinert
Regional Pricing Manager
319-743-4245
Ms. Ronata Hesse
U.S. Department of Justice, Ami-trust
601 "D" Street NW, Suite 1200
Washington, DC 20530
Ms. Hesse:
I have been informed that under the Tunney Act you are accepting
public comment on the United State's agreement with the Microsoft
Corporation. I am writing to offer my views on this matter. I work
for a company called Nash-Finch that is based in Minneapolis and
operates a large chain of grocery stores in the upper Midwest and
wholesale operations in more than thirty states. As Regional Pricing
Manager I have seen first hand the benefits of computer innovations.
It seems that we are constantly being presented with new tools that
allow us to maintain better control of our inventory and maintain/
improve gross margins:
The future holds many exciting things for consumers and
lousiness when it comes to technology. The last few years have
taught us theft almost anything is possible when technicians are
allowed to freely ?? and create. Future innovations will allow
businesses to operate more efficiently and help our economy as we
work out of our current recession.
This case has cruised questions throughout the entire industry
as it watches to see if the government will successfully gain new
power to regulate this industry. It is clear in the reports that I
have read that the settlement currently on the table is fair. It
appears that any allegations against Microsoft that have been shown
to have merit in court are fairly remedied in the settlement.
This settlement provides a good resolution and it allows the
technology industry as a whole to get on the move again.
Your consideration is appreciated.
RO. Box 549
Cedar Rapids, IA. 52406
1201 Blairs Ferry Rand N.E.
Cedar Rapids, IA 52402.
Ph. 319-393-1880
Fx. 319-393-2223
Sincerely.
Rob Reinert
Customer Satisfaction is ACWAYS First
MTC-00029929
January 22, 2002
Ms. Renata Hesse
Department of Justice, Antitrust Division
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse.
Like so many Americans, I am an investor in the stock market and
have been financially hurt by the downturn this past year. As an
individual investor, I have made every effort to do my part to
prevent an even greater drop in the markets by maintaining my
holdings without over-reacting. While we enjoyed a relatively minor
upswing recently, the markets once again dropped following the
national media attention of the Enron bankruptcy. In the face of so
much negative news, it is getting more and more difficult for
investors to optinistically believe the markets have hit the bottom
and are in a recovery.
From an economic standpoint, you have the ability to send a
message which can only be construed as good by the media and the
American public. I am referring to the Microsoft lawsuit. A proposed
settlement in this case is before you. Most of the parties involved
in this case are in agreement to settle this case based on the
proposal presented. Please take this opportunity to do your part and
sign on to the proposed settlement. By putting and and to this
lawsuit, you allow the tech industry the chance to move forward. You
will also create
[[Page 28779]]
much needed oprimism for a ?? point in our times of economic
struggles.
Thank you.
Sincerely,
Keith ??
4815 Grand Avenue
Des Moines, Iowa 50312
515 255-8328
MTC-00029930
ERIG J. KFOURY. EGQ.
January 24, 2002
Honorable Colleen Kollar-Kotelly
U.S, District Court, District of Columbia
C/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotelly:
Please accept this letter of concern with regard to the terms of
the settlement being proposed by the United States Department of
Justice and Microsoft Corporation. Acceptance of this settlement
will not dissuade Microsoft from continuing to pursue its
established objective of market dominance, and, more importantly,
will encourage other businesses to follow the lead in new and
different markets without fear of any reprisals or Interference from
the government, in all, it is a seemingly toothless me measure of
exactitude that undermines the historical good achieved by the
antitrust regulations of which Microsoft was duly found to be in
violation.
The settlement purports to force Microsoft to share key
information with competitors as a way of braking the stranglehold
the company enjoys with its Windows product. Howover, it need only
do so if Microsoft, itself, determines such divulgence would not
hurt its security or product licensing. Further, the continued
market dependency c Windows created by the fact Microsoft can bolt
it to financial and cable services, as wall as, the internet will
adversely affect the affordability of new software being developed
by other companies. As such, any potential competition will be
priced out of the market and Microsoft will stand alone--the
essence of a true monopoly.
Though there are other areas of the settlement that are
problematic, the final concern sterns from the notion that there can
be a limit to the amount of time (e.g., five years) an antitrust
violator should be subject to enforcement. If the government agrees
to terms with a corporation to correct conditions set by
monopolistic practices, there should be no expiration data with
regard to the commitment to those terms.
An antitrust violation has been established. Irrespective of
penalizing the violator, an equitable resolution must be found that
opens up the market and ensures it remains a place where other
businesses and entrepreneurs have a chance to succeed. This proposed
settlement does not amount to such a resolution.
Very truly yours,
Eric J. Kfoury, Esq.
Co: Honorable Thomas Reilly, Attorney General Commonwealth of
Massachusetts
MTC-00029931
JAN-25-02 14:31
FROM:
ID: PAGE 2
SALOMON SMITH BARNEY
A member of Columbia
Ho??orable Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
C/o Renata B. Hesse
A?? Division
U.S. Department of Justice
601 D Street NW Suite 1200
Washington, DC 20530-0001
Dear Judge Kollar-Kotelly,
I am writing with regard to the settlement between the
Department of Justice and Microsoft in U.S. v Microsoft. It appears
to violate antitrust law. Microsoft has a monopoly now and will be
permitted to expand it with regard to emerging markets.
The fact that Microsoft is free to bolt financial services,
cable services or even the internet to its Microsoft Windows is
appalling. As companies develop software they will be unable to
address the issue of affordability in working to help consumers find
a lower priced product due to the dependency on Windows technology
to function.
Microsoft may not pay a vendor to keep them from developing or
distributing software, which would compete, however Microsoft is the
determining body when an exception is identified, Likewise,
Microsoft must stare technological information unless Microsoft
determines the information may harm Microsoft security or software,
In addition, Microsoft, due to its monopoly and dominant market
share, dictates the technologies, which will be compatible with
Windows. Governments and corporations will be unable to choose high
value systems they need for privacy and security if that
compatibility does not ??.
The three person technical committee, which will be appointed is
inordinately weighted in favor of Microsoft as the department of
Justice and Microsoft each appoint one member while they must agree
on the third member. There is no question that companies will be
less inclined to take on a monopoly when their future business may
well depend on that company. Given that Microsoft will continue to
be able to charge whatever it wants for its products, prices will
skyrocket.
The technical committee of three must identify violation, of the
agreement. No lindings may be admitted into court in enforcement
proceedings and compliance is only for five years. This seems a
short time for such a flagrant violation of antitrust law.
After many years of examining this important issue, I would
think a better solution could be found, I appreciate your interest.
If there is any additional information with which I may be of
assistance, please contact me.
Sincerely,
Karen I, Macdonald
Financial Consultant
SALOMON SMI?? BARNEY A member of citigroup
28 State Street
Beaten, MA 02109
617-570-9430 / 800-235-1205 /
617-570-945R fax
e-mail Karen ??mac??onald @ rssmb.com
MTC-00029932
HOUSE OF REPRESENTATIVES
STATE HOUSE, BOSTON O2133??1054
RONALD MARIANO
STATE REPRESENTATIVE
SRD NORFOLK DISTRICT
DISTRICT: (??17) 328-5166
E-Mail: Rep.RonaldM??riano @ hou.state.??.us
Chairman
Committee on Insurance
STATE HOUSE, ROOM 254
TEL. (617) 722-2220
FAX (617) 722-2821
January 25, 2002
The Honorable Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
C/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice 601 D Street NW
Suite 1200
Washington, DC 20530-000t
Dear Judge Kollar-Ketelly,
I am writing with regard to the settlement between the
Department of Justice and Microsoft in U.S. v Microsoft. It appears
that this settlement will enable Microsoft to continue to expand its
monopoly with regard to emerging markets and may violate antitrust
laws.
Microsoft's ability to bolt financial services, cable services
and the Internet to its Microsoft Windows program is of great
concern. As companies develop software, they will be unable to
address the issue of affordability due to the dependency on Windows
technology. Microsoft is required to share technological information
unless they determine the information may harm their security or
software. Additionally, Microsoft dictates the technologies, which
will be compatible with Windows. As such entities will be unable to
choose high value systems they need for privacy and security if that
compatibility doesn't exist.
As I feel that this agreement raises significant questions
affecting the equity and fairness of the settlement, I ask for your
consideration of a more appropriate solution to this matter. Thank
you for your time mad attention to this matter.
Sincerely,
RONALD MARIANO
State Representative
Cc: The Honorable Thomas Reilly, Massachusetts Attorney General
MTC-00029933
FROM:
FAX NO.:Jul. 26 2001 06:26PM P1
Wake Forest Town Commission
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
As a member of the Wake Forest Board of Commissioners, I am
concerned that the Microsoft antitrust lawsuit has dragged on too
long and we need to settle it now. I am elected to represent all the
people in Wake Forest, and I am concerned that everyone's jobs are
being threatened by the recession. Microsoft products are the
backbone of business and industry--and they help offices run
efficiently throughout our community.
[[Page 28780]]
I am opposed to prolonging the lawsuit in any way. The suit
needs to be resolved... and resolved now] Many of our commuting
citizens work in the Research Triangle Park. High tech solutions for
health care, business and communications firms are developed here in
the Triangle. However, the ability of these companies to be
innovative in creating solutions, and productive in the creation of
jobs, hinges upon moving beyond excessive litigation.
Let's face the fact that both parties want the suit to end.
Microsoft and the federal government are in agreement on all points
of the settlement. I want to strongly urge Judge Kollar Kotelly to
promptly approve the settlement. This lawsuit has cost businesses
and local governments untold millions in lost revenues. Let's stop
the bleeding.
Let's move beyond this case and move the economy forward.
Sincerely,
Kim Marshall
Mayor Pro Tempore
401 Owen Avenue- Wake Forest, NC 27587
MTC-00029934
Jan 28 02 02:38p p. 1
U.S. Department of Justice, Antitrust Division
Attention: Renata Hesse
601 D Street, NW, Suite 1200
Washington, DC 20530
Dear Judge,
It is time for the Anti-trust lawsuit" against Microsoft
to end.
Our antitrust laws were designed and enacted in order to protect
the citizens and consumers of the United States.
The Microsoft Antitrust lawsuit was originally pushed by its
competitors and their claims they were working in the interest of
consumers. I do not believe that the consumers were clamoring for
this lawsuit. I wonder how prolonging these proceedings will benefit
consumers?
The Federal Government has spent millions of dollars on this
antitrust case. Microsoft has probably spent several times as much
defending itself against this claim filed by the government.
These costs will no doubt be passed on to the consumer, the same
consumer the antitrust laws are supposed to benefit.
I believe this case has cost enough and should be settled once
and for all.
Thanks for your consideration and your acceptance of my comments
as part of the public comment period for the case.
Sincerely,
Ruth Mellen
21000 West 180th Street-
Olathe, KS 66062
MTC-00029935
15 Riverpoint Road
Hannibal, MO 63401
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I understand that Microsoft and the Justice Department have
reached a proposed settlement of their antitrust case, and I want
you to know that I support the settlement.
I wish my letter were sent for the purpose of thanking you for
dismissing the case. Microsoft has incurred substantial expenditures
of time and money for no reason other than to defend the fact that
they are big and they are successful. It is a shame that Microsoft's
ability to defend itself in Court was thwarted by a judge with an
axe to grind. The case should have been thrown out before evidence
was ever presented.
The settlement proposed clearly addresses the allegations of
anticompetitive behavior by promoting greater consumer choice and
opening areas to greater degrees of competition from non-Microsoft
software programs. After implementation of the settlement agreement,
Microsoft Windows operating systems will be subject to competition
in areas such as messaging and the Internet from non-Microsoft
programs.
In addition to responding to the allegations of antitrust
violations, Microsoft has placed a settlement on the table that
makes concessions regarding products and practices that were never
even at issue in the suit. I fail to see the need to punish
Microsoft by continuing the Case.
Thank you for the opportunity to speak on this matter.
Sincerely,
MTC-00029936
January 28, 2002
Attorney General John Ashcroft, DOJ
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear AG Ashcroft,
While I agree that this settlement appears better than a
perpetuation of this ill-advised lawsuit, I believe that the
settlement goes too far. In spite of the fact that Microsoft has
agreed to its terms, I do not see the necessity of forcing them to
release any more of their source code to developers than they had
previous to the suit. This code is proprietary and Microsoft is
entitled to keep it so. This consideration aside, I am at least
pleased that the lawsuit and all that it entailed will soon be over.
On the whole, however, I am hopeful that our government will not be
as quick to interject itself into the private marketplace in the
future as it has here. If Microsoft supports this suit, than I will.
I am appreciative of the opportunity afforded me to voice my
opinion of this settlement, and I must stress here that this opinion
is my own. However, the issue of forcing a company to relinquish
even a small piece of its proprietary intellectual property, simply
because its competitors cannot develop better products on their own,
is of some concern.
Sincerely,
Charlie Butler
St. Exchange Engineer
Agilera, Inc.
Cc: Senator Strom Thurmond
1400 Browning Road
Suite 150
Columbia, South Carolina 29210
PHONEu 803.770.1800
www.8gilera.com
MTC-00029937
804 Stirling Road
Silver Spring, MD 20901
January 28, 2002
Attorney General John. Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
The Microsoft Corporation and the Department of Justice agreed
to terms on a proposed settlement that will bring an end to the
three-year antitrust lawsuit filed against Microsoft. I support this
settlement because it ends the litigation against Microsoft, and
allows them to focus even more on producing innovative products.
The settlement goes further than k should have, in particular as
regards intellectual property, which Microsoft will have to disclose
to its competitors. In order to end this messy litigation process,
Microsoft has actually agreed to give to its competitors source code
and other design information that is critical to the internal
structure of Windows. While that does not fit the mold of a free
market economy, it enables Microsoft's competitors to do more, and
to produce software that is compatible with Microsoft's. This will
foster competition in the IT industry, and the economy will benefit
as a result.
I support this settlement. Now the economy can regain its former
level of success, and we can put this costly litigation behind us.
Sincerely,
Sunil Chatterjee
MTC-00029938
1-28-02
Tried to email--mo luck used address
microsfot.atr @ usdoj.gov.
fax.
RE: Microsoft Settlement
To the Dept of Justice
We believe the settlement between Microsoft and the movement is
fair for both sides. At this time to put this to behind us and move
forward for the good and all, especially economy
Sincerely.
MTC-00029939
Ken Graham
7531 Aberdon Road
Dallas, TX 75252
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am highly opposed to excessive government intervention in the
business world. It is no surprise, then, that I am opposed to the
antitrust lawsuit that was brought against Microsoft three years
ago. Now that a settlement has been reached in this case, I hope you
will support it, as well, and allow Microsoft to put this episode
behind them.
Microsoft has offered many compromises as part of this
settlement. The company has agreed not to have any contractual
restrictions with companies it deals with regarding the sale of non-
Microsoft products. Microsoft has also agreed to build all future
operating systems in such a manner that non-
[[Page 28781]]
Microsoft products can easily be promoted on them.
Despite the fairness of the settlement and the compromises made
by Microsoft, some opponents want this case brought back to court. I
believe it is your duty to make sure they do not succeed.
Sincerely,
Ken Graham
MTC-00029940
DBM Associates
Computer Systems & Services
One Salem Square,
Whitehouse Station, NJ 08889
January 28, 2002
Attorney General John Ashcroft,
Justice Dept.
950 Penna. Avenue
Washington, DC
Dear Mr. Ashcroft:
I am glad that the litigation in this matter with Microsoft has
ended with a settlement. Settling in this case is better for all.
There has been a noticeable uncertainty in the IT industry over the
threat to break Microsoft up, and this settlement at least will end
this talk and help us all get back to business.
Progress in the IT industry, and the strength of this country's
IT infrastructure, depend upon both innovation and some semblance of
standardization. The prevalence of Microsoft software has greatly
aided the exchange of information both within and between
organizations. This prolonged legal action is hurting this country
by slowing progress to a crawl.
I can appreciate that Microsoft's competitors are unhappy with
this prevalence, but that's the way it has worked out. To them I
say, there are plenty of other problems to be solved and they should
put their resources into solving them instead of counter-productive
efforts directed against Microsoft.
For their part, the evidence indicates that Microsoft has
engaged in unfair business practices and abused their monopoly
position. I see that penalties and restrictions on their future
behavior are part of the settlement. I hope that the settlement
terms were negotiated in good faith by both parties to effectively
address the issues.
I am writing in support of the settlement of the Microsoft case,
and the sooner the better. I am hopeful that with it, some
uncertainty in the IT industry will be resolved, and we can all put
this behind us.
Sincerely,
David Weston
Vice President
MTC-00029941
FAX COVER LETTER
To: attorney ??
Fax No. 1-202-616-9937
From: ??
Fax No. 1-740-482-2126
Date: Jan. 28, 2002
Re: ??
Number of Pages 2
??
Comments:
See attached letter
Rodger and Carol Carpenter
140 T.H. 70
Bucyrus, OH 44820
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
This is to give our support to the antitrust settlement between
Microsoft and the Department of Justice. This antitrust suit has
gone on for far too long, crippling our economy and holding our
country back from further innovation in the technology industry.
Furthermore, I do not believe the government should have been
brought into what is competition between technology companies.
Microsoft became the dominant force in computer software, creating
the first compatible software programs. Before Bill Gates nothing
worked, nothing was compatible. Through hard work and creativity,
Bill Gates met the needs of consumers. The company became successful
because of tiffs, and unfortunately, created a lot of jealousy with
other rims, who were unable to compete. This was the real cause
behind the antitrust suit against Microsoft.
The case has been settled. Even the federal judge wanted to see
an end to it, ordering round-the-clock dialogue. Microsoft has
agreed to a uniform price list, and to design future versions of
Windows with a way to make it easier for computer makers to promote
non-Microsoft software such as different startup screens; Microsoft
has also agreed to help companies reach a greater degree of
reliability with regard to then competing networking software. The
company has gone the extra mile to end this case and satisfy the
demands of the Department of Justice. We think we should honor that
decision.
We urge you to give your support to this agreement and not give
in to the pettiness of those whose only concern seems to be the
destruction of Microsoft.
Sincerely,
Rodger Carpenter and Carol Carpenter
MTC-00029942
Scott B. Glynn
3205 Poppleton Ave. # 2
Omaha, NE 68105
402-932-6535
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
I am writing with regards to the pending settlement between the
Department of Justice and the Microsoft Corporation.
In my opinion, the finding of fact in the case of the federal
government versus Microsoft, overlooked the most important point:
whether or not there has been harm to consumers. We hear conflicting
reports--(a) that the company's dominance in the market has
resulted in higher prices and (b) that their dominance has produced
a trend of prices dropping lower than cost for consumers.
How do consumers feel? In even the most recent public opinion
polls, most consumers express their approval of Microsoft and the
company's products. The reality of it is that the high-tech industry
develops and changes so rapidly that since the trial began the face
of the industry has changed, Linux has made great strides in the
market with their operating system and several software companies
have closed the gap between themselves and Microsoft.
I am sure that most consumers would be in favor of ending the
lawsuit against Microsoft. The proposed settlement would end the
suit and that is exactly what consumers are looking for. I urge the
Judge to approve the settlement.
Sincerely,
Scott B. Glynn
MTC-00029943
Planning Enterprises
David A. Kulle
P.O Box 8019
Jupiter, FL 33468-8019
(800) 447-3660
(561) 335-3077
Fax (561) 335-0009
Robert C. Kulle
P.O. Box 601481
?? 75360-1481
(714) 361-5707
?? (214) ??-3110
fax (214) 378-??
January 26, 2002
Attorney General
John Ashcroft
US Department of Justice
Washington, DC 20530
Dear Mr. Ashcroft,
I have been a firm supporter of Microsoft for many years and my
philosophy as far as this settlement goes is that I will support
anything that is in Microsoft's best interest. As far as the
settlement reached in the antitrust case, I am willing to express
support for it in the interest of closure. I feel this entire
lawsuit was unwarranted and a complete contradiction to the spirit
of free enterprise. Bringing closure to this as soon as possible
will be in the best interest of consumers, the economy, and the IT
industry on a whole.
It is very hard for me to imagine why there are still States
that wish to pursue this matter when one considers the severity of
our economic situation. What exactly is the issue? Microsoft has
made several concessions in this settlement that will doubtless have
adverse effects on their own competitiveness. For example, Microsoft
has agreed not to obligate third parties to distribute or promote
Windows technology exclusively or at a fixed percentage. Also,
Microsoft will make no attempt to obligate software developer to
only create Windows-compatible software. I am very pleased with the
Microsoft's obvious compliance and hope that you will aggressively
pursue means that will pacify the concerns of the dissatisfied
states and bring this matter to close immediately.
Sincerely,
Cynthia Kulle
MTC-00029944
TIM GOLBA
13G24 S. S?? STREET
[[Page 28782]]
??. KS 66062
January 23, 2002
MS. Renata Hesse
Trial Attorney
Anti-trust Division
U.S. Department of Justice
601 "D" Street NW,
Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
Our country is experiencing a recession like we have not seen in
decades. Many factors have contributed to our shaken economy, but
the onset of the Microsoft antitrust case really bit into the
NASDAO, shaking confidence of investors and consumers. It is
important to remember that for the first time in history, more than
half of American citizens are invested in the stock markets. I am
pleased to see the significant steps President George W. Bush has
taken to offset the panic of the American consumer in the form of
tax rebates and tax cuts. We are fortunate to have such a proactive
in office.
Information regarding the lawsuit is readily available through
every imaginable media source, and I couldn't help but notice
that tech stocks parked up a little with news of the ?? settlement.
I appeal to your sense of good ?? and ask you to endorse the
settlement. I fear that further litigation and regulation will
further damage our economy and morale. Rest assured that an end to
this lawsuit would result in a collective sigh of relief from the
entire nation.
Sincerely,
Tim Golba
MTC-00029945
January 28, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street N W, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
I live and work in a Midwestern state that is constantly
battling to keep our citizens here to work and raise their families.
One of the most important incentives we have to offer is a growing
technology industry, which we affectionately refer to as
"Silicorn Valley."
I've watched with much interest the progress of the Justice
Department's suit against Microsoft. I understand the issues
involved, but more importantly, I've felt the impact of the lawsuit
on my own pocketbook. As a young investor, I have a portion of my
retirement savings invested in the technology sector and have
watched my returns deflate along with the sinking economy and can't
help but assume that this lawsuit has some bearing on my poor
returns.
Common sense tells me tells me that the quicker we can ?? this
issue ?? the better off all Americans will be, particularly those
Americans whose livelihood is directly dependent on the technology
industry and those whose retirement savings could use a shot in the
arm.
Please give your utmost consideration to the settlement before
you. An approval of the settlement will go far in jump-starting the
economy and actting America back on the road to prosperity.
Thank you for your consideration.
Sincerely,
Susan Severino
Office of the Speaker
?? House of ??
State Capital
Des Moines, IA 50319
MTC-00029946
34-20 l2th Street
Long Island City, NY 11106
January 22. 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing you to express my opinion in regards to the
Microsoft settlement. The settlement that was reached in November is
fair and reasonable, and I am extremely anxious to see this
settlement finalized. This three-year-long litigation against
Microsoft has been expensive and a waste of resources.
Microsoft has agreed to all terms and conditions of this
agreement. Microsoft has agreed to document and disclose for use by
its competitors various interfaces that are internal to
Windows" operating system products. Microsoft has also agreed
not to enter into any agreements obligating any third party to
distribute or promote any Windows technology exclusively or in a
fixed percentage, subject to certain narrow exceptions where no
competitive concern is present. This settlement will create more
opportunities for other companies and make "it easier for
these companies to compete against Microsoft. Please support this
settlement so this company can remain together and continue
benefiting our society, with inventive software that makes our lives
easier. Thank you for your support.
Sincerely,
Stefanos Evangelinos
MTC-00029947
January 28,2002
Attorney General John Ashcroft
Department of Justice
950 Pennsylvania Avenue
Washington, DC 20530
Dear Mr. Ashcroft,
The pending settlement between Microsoft and the federal
government presents an opportunity to bring this case to a close.
This suit has distracted Microsoft and the nation from more pressing
priorities for too long, and this settlement will allow us to get
back to business.
The settlement will, in effect, force Microsoft to treat its
competitors in a more sympathetic way. For example, Microsoft has
agreed to avoid retaliation against any computer makers who ship
software that competes with anything in Windows. This alone will
increase competition among software developers. Additionally,
Microsoft has agreed to share its code for the Windows operating
system that will enable its competitors to configure software that
is fully compatible with Windows. Most vexing, however, is the
provision that places Microsoft under the oversight of a government
mandated technical review committee. As the president of a business,
I can say that I would not relish the idea of my company being
watched by the government at all times.
This lawsuit has drained resources on both sides for more than
three years. The settlement can stop the resource drain, and at the
same time make the IT sector more competitive. I support it
wholeheartedly, and believe that it is in the best interest of the
nation. Thank you for your time and efforts in Washington.
Sincerely,
Carol Conway
President
MTC-00029948
Renata Hesse
Department of Justice, Antitrust Department
601 D St NW
Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
I am writing as a Kansas State Representative and Vice Chairman
of the House Business, Commerce, and Labor Committee. As settlement
in the Microsoft suit hangs in the balance, I write with genuine
concern for the future of our industry.
The Microsoft Antitrust suit was brought to fruition due to
antiquated rules and regulations written during the development of
the railroads, Microsoft's harm to the consumer has yet to be
proven; point in fact, there is a discrepancy in claims that
Microsoft: has undercut the competition by under pricing, yet there
are contradicting claims that Microsoft has overcharged the
consumer.
Microsoft is primarily guilty of supplying a terrific product
for a huge niche market. A market they actually helped to grow due
to high demand for the technology they pioneered. The prosecution of
Microsoft for giving the consumer what they ask for is absurd. Like
an>, business, Microsoft has tried to protect the details of
their products from competitors and tried to maintain their market
share.
The real meat of this lawsuit lies in the antitrust laws
themselves. Microsoft's competitors have merged and aligned in a
full attack in hopes of gaining Microsoft's market share through
court orders rather than through the free market system. It's as if
these laws are allowing the competition to monopolize Microsoft with
protection of the courts.
In the time since the lawsuit was introduced, the software and
tech industries have ?? into a living, breathing organism, changing
daily with each new advance. Paid far by leggy long for State
Representative, Rayburn, Treasure. PO Box 546--Madison, KS
66860-0546 (620)
437-283--peglong @ ink.org
There are no linear changes here. Each new advance seems to
drive the consumer toward a different direction. This reality holds
no marker share security for Microsoft. In your consideration of the
settlement of this suit, please be thoughtful as to the root of the
problem, outdated antitrust law. Prompt settlement will appease the
competition, but more importantly let industry move on without such
slowing scrutiny.
[[Page 28783]]
Cordially,
Representative Peggy Long
MTC-00029949 LARRY McKIBBEN
9STATE SENATOR
Thirty-second District
Statehouse (515) 281-3171
e mail Larry mekibben @ legis.state.la.us
HOME: ADDRIESS
P.O. Box 618
Marshulltown, lowa 501.58
The Senate
State of lowa
Seventy-ninth General Assembly
STATEHOUSE
Des Moines, Iowa 50319
Appropriations
Business & labor Relations
local Government
Ways and means, Chair
Transportation, ?? &
Capitals Appropriations ??
January 28,2002
Judge Kollar Kotelly
c/o Ms. Renata Hesse LI.S, Department of Justice, Antitrust Division
601 D Street NW, Suite 1200
Washington, DC 20530
Your Honor,
The new economy has been the source of an economic and
technological renaissance in America and Microsoft has been a part
of that from the beginning. At the dawn of the Information Age,
there is no denying the importance of the technology industry to
America's prosperity in the 21st century.
As an elected official, I need to ensure an environment that
allows the technology industry's entrepreneurial freedom to innovate
and reinvigorate our economy. We need a return of the self-
regulating competition that has built this industry into the most
vibrant and successful in the world. The U.S. economy stands to grow
by leaps and bounds in coming years, all due to the innovation,
competition, and customer-focused attitude of our high tech
community.
This case opened a Pandora's box of litigation and regulation
that is already stifling competition, cramping innovation, and
haring consumers and investors. Microsoft's presence in the market
increased competition and innovation driving down costs for
consumers, Microsoft helped set a high standard in the market and
raised the bar for competitors many of whom have stepped up to the
plate and become viable competitors to Microsoft.
Considering a snapshot of the high-tech industry when this case
started compared to one from today, it is a much different picture
Aside from the fact that the industry has outgrown this case, the
proposed Final Judgment would decidedly help our economy and
hopefully close the lid on the Pandora's box it opened. I urge you
to approve the settlement.
Sincerely,
Larry Mekibben
MTC-00029950
Bonnie Wood
116 Timber Springs Lane
Exton, PA 19341
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Fax 1-202-307-1454
Page 1 of 1
Dear Mr. Ashcroft:
This letter is to give my support to the Microsoft and
Department of Justice settlement. Microsoft is one of our greatest
companies and I resent the government interference in what is
basically competition between technology companies. I doubt whether
Microsoft has done anything that the other firms have not. More
likely, the other firms could not compete and have gone crying to
the government. They just want a bigger piece of the pie.
You don't have to look any further than AT&T to see the
havoc that can result from breaking up certain so-called monopolies.
AT&T was deemed a monopoly while we had the best service in the
world. Now, no one can understand the half-dozen phone bills
received each month from strange sounding phone companies. Phone
companies come and go with alarming frequency, and those that stay
in business seem to be merging all back together. I often wonder if
I would have been better off if AT&T had been left alone.
The same may be true for Microsoft. In any event, Microsoft and
the Justice Department have reached an agreement. Microsoft has
agreed to open the company up to third party, innovation; has agreed
to disclose internal source codes for Windows; and agreed to an
oversight committee. This is more than fair.
I urge you to give your approval to this agreement.
Thank you for your consideration of my views.
Sincerely,
Bonnie Wood
cc: Senator Rick Santorum
202-228-0604
MTC-00029951
THE HENRY HAZLITT FOUNDATION
Free-Market.Net: The Freedom Network
40t N. Franklin St., Sulte 3E
Chicago, IL 60610
(312) 494-9440
fax (312) 494-9441
e-mall: info @ hazlltt.org
http://www.free.market, net
BOARD OF DIRECTORS
Dan Curran
Robert Davis
Marsha ??
Louis James
Robert Knautz
Art Margulis, Jr.
David Padden
Frank Resnlk
Alvan Rosenberg
Mark Schultz
Chris Wh??tten
BOARD OF ADVISORS
Scott Banister
Godspeed Networks
David Boaz
Cato Institute
Lloyd Buchanan
Axe-Houghton Associates, Inc.
Sky Dayton
EarthLink Networks. Inc.
Paul R. Farago
Constructive Management Foundation
Bill Frezza
Internet Week
John H, Fund
The Wall Street Journal
BettIn?? Blen Greaves
Foundation for Economic Education Dr, David Kelley
The Objectivist Center
Dr. Henri L??page
Idees Action
Virginia Postral
Reason magazine
Andrea Millen Rich
Laissez Faire Books
Dr. Jeremy Shearmur
Australian National UniverSity
Dr. Thomas Szasz
SUNY Health Science Center
Dr. Walter E. Williams
George Mason University
January 25, 2002
Renata Hesse
Department of Justice
Antitrust Division
601 D St NW, Ste 1200
Washington, DC 20530
Dear Ms. Hesse,
The settlement before the court in the Microsoft antitrust case
is not ideal. The premise for this case was unwarranted to begin
with. The antitrust laws being applied are subjective and left to
regulators to interpret--in this case not even for the benefit
of consumers. All things considered, I still write you today to
encourage Judge Kolar Kottely to support the proposal.
The settlement gives the government most of what they wanted,
stopping short of breaking up the company. Among other measures, the
company is required to disclose significant proprietary information
to its competitors. This is a significant and meaningful punishment.
To enforce the terms of the settlement, Microsoft engineers will
have to put up with a team of three on-site, full-time monitors. The
monitors will have access to all of the company's records and
personnel, and Microsoft will even have to pick up the tab for their
offices and up-keep. Again, this is a significant and meaningful
punishment that provides ample ground for the state to make the case
to the public that justice has been served.
The end of the conflict between Microsoft and the federal
government will restore a much-needed measure of "certainty in
the marketplace," as the Justice Department itself has
claimed. Consumers and business partners will no longer have to fear
the dismemberment of a major player in the software industry. I, as
a Microsoft customer, won't have to worry about dealing with more
vendors to get the same goods and services. People will be able to
make plans for the future with a somewhat reinforced sense of
confidence.
But real certainty in today's marketplace requires a knowledge
of what's legal and what's illegal. While the Microsoft settlement
seems to put a high-profile conflict to rest, it doesn't deal with
the larger problems that sparked that battle. As long as legislation
that means whatever bureaucrats say remains on the books, conflict
will continue between frustrated businesses and arbitrary
regulators.
[[Page 28784]]
So, I urge you to take this needed step toward bringing this
chapter to an end. And I encourage the Department of Justice to work
with the legislative branch to carefully re-examine and restructure,
or, preferably, repeal the Sherman Antitrust Law.
Thank You,
Louis James
President
MTC-00029952
January 28, 2002
Attorney, General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am the controller of a diamond wholesale company writing to
give my support to the recent Department of Justice and Microsoft
antitrust case. This settlement was reached after three months of
intense, round-the-clock negotiations endorsed by a federal judge.
Ongoing persecution of one of the strongest companies m our country
is unfair, and stands in stark relief to how much positive
difference Bill Gates has made in the computer industry.
When I first started using computers, interoperability was
virtually nonexistent, and computers were not user-friendly at all.
Now, with Windows, I can install everything myself. I am not a
computer expert by any means, but bemuse of Microsoft's simple
programs, I have been able to customize my computer to my
specifications.
The envious competitors who foisted this lawsuit on America now
claim that the settlement is not strict enough. Any objective view
of the settlement, however, shows that Microsoft is more than fairly
reprimanded. Microsoft has agreed to change Windows so that it will
be even easier to install programs, and Microsoft has agreed to
share any interfaces that Windows uses to communicate with other
programs. This alone is more than enough, and should placate even
the shrillest of the competition.
I urge you to continue your support to this agreement.
Sincerely,
Irene Chin
Controller
FULLCUT
M?? Inc.
MAK?? BIRN??ACH)
CHAIRHAN
?? FIFTH AVENUE
NEW YORK. N.Y. 10017
(212) 681-00??0
January 28, 21302
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft;
I am writing on this last day of the comment period to express
my full support of the recent settlement in the antitrust case
between Microsoft and the US Department of Justice. The lawsuit
dragged on too long and now it is definitely in the best interests
of the American public to end litigation against Microsoft.
I am a Microsoft supporter. I do not think my rights as a
consumer have been infringed upon. In fact, 1 think that Microsoft
has standardized the industry and made it mush easier for users. The
terms of the settlement are fair. Microsoft has agreed to increase
its relations with computer makers and software developers, design
future Windows" versions so that competitors can more easily
promote their own products and form a three person team to monitor
compliance with the settlement.
I hope your office implements the settlement as soon as
possible. Our nation needs Microsoft as the cornerstone of the tech
sector. Please suppress the opposition from the nine states and make
this thing a reality.
Sincerely
Max Birnbach
President
MTC-00029953
Mrs. Victoria Jenson
32710 WEST ??IST TERRACE
DESOTO, KS 66018
January 19, 2002
Ms, Renata Hesse
U.S. Department of Justice, Anti-trust
601 "D" Street NW, Suite 200
Washington, DC 20530
Ms. Hesse:
I appreciate the chance to comment under the Tunney Act on the
settlement that has been proposed to end the Department of Justice's
anti-trust suit against Microsoft.
I am in favor of settlement of the suit. I believe the suit
should be brought to an end. as soon as possible. In my opinion, the
case should not have been brought in die fiat place. The fact that
nine states and the Department of Justice trove found common ground
with Microsoft to settle the case is a very positive development for
the entire nation,
It seems to me that the laws governing anti-trust suits are not
designed to -keep up with a constantly changing industry like high
technology. That said, the proposed settlement does reach a solid
middle ground that cakes measures to ensure competition without
over-reaching the role of government regulators.
The settlement is a fair and reasonable way to end this suit. I
urge the judge to approve it.
Sincerely,
Victoria Jenson
MTC-00029954
165 E 32nd Street
Apt. 2B
New York, NY 1 0016-6054
January 17, 2002
Atty. Gen. John Ashcroft
950 Penn. Ave., NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing in regards to the antitrust settlement reached
between Microsoft and the Department of Justice. I am in favor of
bringing the litigation process to an end immediately, and I support
the current settlement. The antitrust suit with Microsoft has been
going for three years now, and with a settlement proposed is the
time to put this issue to bed once and for all.
Under the terms set forth in the current settlement, Microsoft
has agreed to make several major changes in the way it operates and
interacts with other companies, consumers, and in particular with
its competitors. Microsoft has agreed to license its Windows
products out to the 20 largest computer manufacturers on identical
terms and conditions, Additionally Microsoft will no longer enter
into any agreements with third parties to exclusively distribute or
promote Windows family products, unless there are no competitive
concerns present in the particular situation.
While I feel that many of the aspects of the settlement are too
restrictive on Microsoft I am still in favor of the settlement as a
whole. Now more then ever we need companies such as Microsoft,
leaders in the industry, who are financially able to weather our
current economic storm. At a time when the economy is dwindling and
layoffs are prominent we should not be penalizing successful
companies. For these reasons I urge you to support the antitrust
settlement and take no further action against Microsoft.
Sincerely,
Jorge Godoy
MTC-00029955
AMERICA
GENERAL
FINANCIAL GROUP
MOORE FINANCIAL GROUP
Please deliver the following documents to the person or
department listed below as quickly as possible. Thank Your
NAME: Renata Hesse
COMPANY: 1/28/01
DATE:(202) 616-9937
PHONE NO.:
FAX NO.:
COMMENTS:
PERSON SENDING THIS FAX: Bill
Should there be any difficulty reading this document or if all
pages have not been received,
please call (337) 261-1006 for assistance.
William E. "Bill" Moore
Registered Representative
P.O. Box 92802
Lafayette, LA 70509
(337) 261-1006
Fax: (337) 236-5566
January 23, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington DC 20530
FAX: 202-616-9937
RE: Settlement of U.S.v. Microsoft
I share the government's concern about consumer harm in the fast
growing technology industry. However, I am aware that the settlement
agreement provides resources, access, and authority to respond to
complaints about Microsoft's compliance.
I am aware that the negotiators have worked out a settlement
that may not satisfy, anyone, but includes something for everyone.
Usually that is the sign of a fair settlement.
Therefore I believe that it is time to settle this case. As our
economy begins to try to rebound, finality in this case would be a
great boost. I appreciate your consideration of this important
matter.
[[Page 28785]]
Sincerely,
MTC-00029956
Anne G. Pullin, President
AAA, FRICS, GG
2887 Wright Avenue
Winter Park, FL 32789
Personal Property Appraisals & Consultations Fine &
Decorative
Arts--Antiques
January 28,2000
Attorney General John Ash??? Sales--Art Market Research
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC20530
Phone: (407) 644-2156
jimannep @ worldnet.att.net
Dear Mr. Ashcroft:
I am concerned about the states and now AOL currently seeking
litigation and more litigation against Microsoft They all seem to be
operating only on a basis of greed and without a firm foundation for
claims. Or else, they are suffering from sour grapes because they
have not been able to bring to the market a product that was as good
or as easily usable by people like me. I have used Microsoft
products since Word Version One came out. In fact I bought my first
computer because research indicated that it would be the best and
easiest product to use. Time tins proved me correct.
Microsoft has helped me in so many ways to improve my business:
I can exchange information without telephone calls and long retyping
of material. Everything is less expensive to operate and
buy--from computers to all the software.
I tried Netscape -what a pain it was to use. And AOL is the only
E-mail service that I have not been able to exchange images with
Microsoft walked away with the business because they had better
products and were good about customer service. They have always been
able to get me operating--and I am a complete novice to the
technical end of this business. I cannot say this for many other
software products.
As an example of their products: I took my old DOS with the
Multiplan spreadsheet to Europe. Used the old DOS computer because
the battery had 6 hours, and I was working in an ancient library.
Recorded my data. Brought the data home into Excel and then into
Access. It all worked like a charm.
Sincerely,
Anne Pullin
CC: Representative Ric Keller
MTC-00029957
True Blue--Freedom
January 26, 2002
Board of Adojsors
Hon.john A. ??
R??? 8ty ???istrict Ohio
Hon John Kastoh, For??? Chai???
Congressional ???dget ???
???hn S. Dowlin, Co???ssion???
Han??? Couny
Wayne ??? Prestent
Data Rank Cerp
Gregg Schole Ventech
Ranata B, Hesse
Fax 202-616-9937
Dear Renata:
While I am pleased that the Tunney Act allows me to make an
input on behalf of True Blue'8 membership across America In regard
to the proposed Microsoft settlement, I want to be candid. The
federal government's pursuit of Microsoft damaged consumers and the
economy, as follows:
. Consumers paid more than $30 million in taxes to sue a company
that has consistently created and marketed better products at a
lower cost.
. Investors lost millions more as the tech sector of the stock
market sagged under the Impact of the threat to break up Microsoft,
adding Impetus to a recession.
. Taxpayers, whose Interests are the key priority of lawmakers,
paid lawmakers and attorneys" salaries to work on behalf of
the competitors of Microsoft. (Personally, I'm not sure I'll ever
want to buy products from companies that whine to the Papa Fools to
secure taxpayer funding of their marketplace fights.)
Asking Microsoft to hire a staff and provide offices for a
bureaucracy to enforce the settlement is simply using a socialist
mechanism to control an Industry. At best, such an office should
exist no longer than 12-18 months, and then be completely
terminated, If Congress determines a need for such an agency, we can
place the idea before Congress, debate the law, and vote. The Court
must not become a bureaucracy-creating and bureaucracy-enforcing
entity.
Every State Attorney General who continues in this suit clearly
morphs his/her office into collection arm grabbing for taxpayer
dollars. It is disturbing that the Attorneys General, who are funded
by taxpayers at the state level, are grasping for families"
earnings at the federal level, too We urge you to end this matter
and allow Microsoft to return to what it does best: Innovating to
serve consumers. Consumers will see that Microsoft offers
flexibility and demonstrates its resolve to become an ever better
industry leader.
Yours truly,
Patricla R. Cooksey, President
MTC-00029958
Attention: Renata Hesse
U.S. Department of Justice, Antitrust Division
601 D Street. NW, Suite I200
Washington, DC 20530
Dear Ms. Hesse.
I often encourage my students to speak up when they have, an
opinion on a current event. I decided recently to heed my own advice
and speak up on the proposed proposed Microsoft settlement during
this open comment period.
As a teacher in a small rural school. I am encouraged by the
possibility that Microsoft has offered to donate millions of dollars
of computer equipment to schools like the one where I teach. Many
times, rural schools have a hard timer keeping up with technological
advances and opportunities available at larger, more urban schools.
I believe the settlement proposed by the Bush administration would
go a long wary toward leveling the playing field for students who
attend rural schools by allowing them access to cutting edge
computer technology. Thank you for your work on this important case.
I urge you to approve the settlement
Sincerely
Connie Morris
MTC-00029959
Jim Waldo
1202 April Lane
Green Bay, WI 54304-4106
(920) 494-4628 (Voice & Automatic Fax, if our fax does not
recognize yours, dial # 11 during ringing
Cell Phone: (920) 362-3623
EMAIL: JIMWALDO2 @ CS.COM
January 27, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to say that I fully support the Microsoft
settlement. I feel that if Microsoft is going to comply with all the
terms and conditions of the settlement agreement, then the Justice
department should conclude their investigations in this matter. The
country needs to go on with it business of production and
development in regards to the tech industry.
One way in which Microsoft has agreed to comply in regards to
the settlement, is the three expert technical committee, which was
formed to make sure that Microsoft will not step out of the bounds
of the agreement. If another group finds Microsoft acting
inappropriately, that group can take up a formal grievance with a
number of individuals appointed by the government and who are
associated with this case.
I know that you will make the right decision for all Americans.
End this case now, and let the country keep moving.
Sincerely,
Jim Waldo
cc: Representative Mark Green
MTC-00029960
TO: John Ashcroft
Department of Justice
202616-9937
FROM: Calvin A. Jordan
3800 Meredith Drive
Greensboro. NC 27408
January 28, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue. NW
Washington. DC 20530-0001
Dear Mr. Ashcroft:
For a long time I have followed the antitrust, suit being
brought on Microsoft by the Justice Department. After more than
three years of litigation, a settlement has finally been reached.
The purpose of this letter is to show my support for this
settlement. This case has simply gone on far too long.
Unfortunately, some powerful opponents of Microsoft would like
to see this settlement, revoked, and are pressuring the Justice
Department to withdraw this offer. They believe that the settlement
does not go far enough. This is where I distinctly disagree. Under
the terms of the settlement, Microsoft will allow easy access to its
operating systems for competing software firms. Also under the terms
of the settlement. Microsoft will be monitored full-time by the
government, and can still face lawsuits from competing companies.
[[Page 28786]]
The government at the State and Federal levels must fully
support, the settlement for it t come to fruition. After three years
and millions of dollars, isolated opponents should not be allowed to
spoil the work of the DOJ to settle this case. I stand behind the
settlement 100%, and appreciate this outlet to have my opinion
count.
Sincerely
Calvin A. Jordan
cc: Representative Howard Coble
MTC-00029962
Post-it Fax Note 7671 Date ??? 2
To ZEN???A HESSE From ZOB??? HAUS
Co./Dept. Dos Go.
Phone # Phonb #
Fax #202 616 9937 Fax #
Robert J. Haus
5501 Harwood Drive
Des Moines, IA 50312
(515) 277-3098 (horne)
(515) 490-0538 (office)
January 28, 2002
Renata Hesse
U.S. Department of Justice, Antitrust Division
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms, Hesse,
I am writing to take advantage of the opportunity to weigh in on
the Microsoft antitrust settlement decision by the U.S. District
Court. Thank you for this opportunity. Microsoft has been a leader
in the technology industry with its software, operating system, and
Internet browser. They are accused of being a monopoly, yet the
companies fueling the case are identified as Microsoft's
"competitors"--seems like a contradiction.
Linux operating system (OS) is growing at an astounding pace
taking a larger share of the market every day. It's able to capture
more of the market because consumers are choosing the Linux OS over
Windows. The customer is deciding which product best suits their
needs--not the government.
Bill Gates took Microsoft to unforeseen levels with unmatched
speed. His vision and business savvy made the company "king of
the hill"... for now. However, the high-tech industry grows at
such rapid rates that no company will be "king of the
hill"... for long.
In the meantime, Microsoft's position in the market has not
caused harm to the consumer. On a professional and personal level I
appreciate the ease with which Windows works and my children would
agree...it is simply the most user friendly software on the market
today. Whether or not Microsoft is the best system for me is, and
should remain, my own decision.
The settlement that the parties in this suit have come to is
reasonable and delivers the government much of what it sought
including a way to enforce the requirements set forth in the
agreement. I respectfully request that you support the settlement in
this ease.
Thank You,
Robert Haus
MTC-00029963
Kellene Walker
Route 4
??. KS 66736
January 22, 2002
Renata Hesse
Trial Attorney, Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DO 20530
Attorney Hesse,
I find it interesting that Apple is objecting to Microsoft's
settlement offer, perhaps due to Microsoft's offer of cash,
software, and computer equipment to schools in need, I think Apple
pioneered the idea of discounting computers to schools and teachers
in the 1980's, possibly in a smart strategy of gaining youth loyalty
and influencing future sales, No matter, fair is fair. When Bill
Gates and company were working out era garage, they had no more
opportunity than any other person or company. Microsoft was
literally built from nothing to an empire due to hard work,
innovation, and by recognizing an untapped market.
Microsoft's biggest edge is that they pioneered the industry,
and to date, they do it better than anyone else. Their business
model is studied internationally. Of course Microsoft is a fierce
competitor, there are no laws against that.
The bottom line is that freedom to innovate is there for
everyone. This lawsuit borders on hindering that freedom. I strongly
encourage you to approve the current settlement offer in a move to
protect free commerce.
Sincerely,
Kellene Walker, RN
MTC-00029964
FORRESTST H. MUIRE, JR.
908 PRINCETON
MIDLAND, TEXAS 79701-4159
915-682-5097
email, ??uire. @ swbell.net FAX 685-4091
January 23, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
Please accept the proposed settlement of the Microsoft anti-
trust case. As a long-time user of Microsoft products, I see this
agreement as the most practical solution for competitors to thrive,
short of a break up that would risk consumers losing a quality,
stable presence in the software industry.
Seemingly inspired by a lack of monetary support from the last
administration, this government intervention into the business world
has been off base from the start. With this deal, Microsoft's market
position is clearly weakened, so any further litigation would be an
even more misguided attempt to manipulate the marketplace on behalf
of the "consumer." Microsoft will allow computer
manufacturers broad freedoms to configure Windows with the software
of their choice without preference in future licensing deals and
will provide competitors with extensive access to its internal code,
among other agreed measures to expand competition. Considering the
constant verification by a committee of experts to monitor the deal,
I ask for you to support for this overly fair settlement. The IT
industry and the economy will greatly benefit from the return of
stability to the software marketplace. Thank you very much for your
support.
Sincerely,
Forrest Muire
MTC-00029965
SEAN GALVIN
Renata Hesse, Esq.
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Via Facsimile 202-616-9957
Dear Ms. Hesse:
I am writing to express my support for Microsoft case's
settlement with the federal government. Considering the poor state
of the economy, the last thing consumers need prolonged litigation
resulting in additional oppression of the high tech industry.
Consumers, on the whole, were harmed by the case far more than
they were ever harmed by the conduct described by it. It's been a
long time since the high tech industry was truly free to compete and
innovate without fear of repercussions from the government, but now
that that time has come again. I believe we will see great results
in short order that could turn this economy around.
Sincerely,
Sean Galvin
MTC-00029966
Eric Movassaghi
1765 Coliseum St. #314
New Orleans, LA 70130
January 22, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington DC 20530
FAX: 202-616-9937
RE: Settlement of U.S.v. Microsoft
As the owner of a private business I know how fierce competition
can be out in the open market. And I do appreciate the government's
role in protecting consumers against monopolistic activities.
However, this case has gone on long enough and I am hopeful that the
proposed settlement will be approved.
It is important to my business that our economy begin to turn
around and I think the technology sector is important to the
rebound. A final settlement in this case will provide that boost and
protect consumers at the same time. I am hopeful that the settlement
is approved soon.
Thank you for your consideration of my views.
Sincerely,
MTC-00029967
Inwoodola
Jan 28, 2002
Attn U.S. Department of Justice.
Regarding the lawsuit Against Microsoft
I think it is time to settle this and get it behind us so we can
proceed with more important things such as economy and terrorists. I
feel this Company is being punished for being successful and that
most libly have not done anything more out of their time than those
that are bringing
[[Page 28787]]
charges against them. Lets get on with it and say it is done!
Sincerely,
Mark Hanson
MTC-00029968
FACSIMILE TRANSMISSION COVER SHEET
Transmission Date: 2/28/02
Total Pages: 2(Including cover page
FROM: Attorney James R. Graves
TO FAX NO: (202) 307-1454
TO THE ATTENTION OF: Renata B. Hesse
Antitrust Division
RE: Letter to Attorney General John Ashcroft
January 28, 2002
Attorney General John Ashcroft
United States Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
As a Microsoft supporter, I would like to point out some reasons
why the antitrust case should be closed at the federal level. The
settlement is fair and reasonable, and has been extensive enough for
nine states to approve. I fear that the states pursuing further
litigation will never be satisified. Under the terms of the
agreement, Microsoft will make significant changes in the way it
develops and licenses its software. The corporation has agreed to
more or less open its inventions to the competition, allowing them
to use the success of Windows to launch their own competing
products. For instance, Microsoft has granted broad new rights to
software engineers and computer makers to configure Windows so that
competing programs can be promoted on Windows itself.
Although these concessions make antitrust precedent, Microsoft
has been willing to change in an effort to bring this case to a
close. As long as the industry leader is giving away market share,
there will always be those that want more. I hope you will pay
attention to the merits of this case.
If so, you will see fit to end this matter.
Very truly yours,
James R. Graves Attorney-at-Law
MTC-00029969
2 High Stepper Court, Apt, 406
Pikesville, MD 21208
January 17, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to ask that you give your support to the settlement
reached between Microsoft and the Department of Justice I am a
retired electrical engineer. I know computers, and I know Microsoft.
I believe Microsoft was all right; in no way did it monopolize the
market. Bill Gates" main strength was that he was simply
quicker and smarter than the other fellows. Bill Gates recognized
the need for standardized software programs and filled it. Then he
marketed it brilliantly. There are any number of firms out there in
other industries whose product is not necessarily better, it's just
that they are smarter in promoting it and changing to fulfill public
need. MBAs are taught this very lesson Bill Gates was hauled into
court out of jealousy, not any unfair business practices.
I also understand from the settlement, Microsoft will be opening
up its source codes for the Windows operating system. This is a lot
more than other firms would do Microsoft has also agreed to a
technical committee that will oversee Microsoft's compliance.
Microsoft has more than paid for any sins it may have committed. I
urge you, for the good of the county, for business, for the general
public, to give your support to this settlement. Thank you.
Sincerely,
Bernard Gerber
MTC-00029970
WILCO VETERINARY CLINIC
RR 4. BOX 188. FREDONIA. KS 66736
January 14, 2002
Judge Renata Hesse
U.S. Department of Justice Anti-Trust Division
601 "D" Street Northwest, #1200
Washington, DC 20880
Dear Ms. Hesse:
The purpose of this letter is to add my comments to the record
regarding the anti-trust lawsuit filed against Microsoft.
As a veterinarian and businessman, I believe in as little
interference as possible in the operations of a private company.
Though I see the value of having anti-trust statutes in place to
protect the public from, anti-competitive practices. I also believe
that in this case, those statutes have not been properly applied.
While it is true that Microsoft is a large company and has
earned a great share of the computer and software marker, I believe
that has happened because Microsoft offers great products at
reasonable prices. I do not believe it has been demonstrated that
Microsoft has been engaging in anti-competitive practices that would
warrant an anti-trust lawsuit of this type. I further believe that
to continue pursuing this lawsuit will only sap state and federal
resources that are already in short supply and cause unnecessary
damage to a company that has contributed a great deal to the
American economy and way of life.
I urge you to affirm the settlement proposed by the Bush
Administration and agreed to by many state Attorneys General.
Sincerely,
Dr. Charles Fox
MTC-00029971
2800 Blue Spruce Lane
Silver Spring, Maryland 20906
January 13, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania A venue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
After a long, difficult three years, the Department of Justice
has settled its antitrust suit against Microsoft. Microsoft did not
get off easy. The firm went far beyond what was originally mentioned
in the antitrust case. Microsoft has substantially opened up the
company to competitors of Microsoft. Something I do not think any
other firm would have done. But it is time to move on. It should be
over. We cannot keep dragging the case on. Congress is arguing about
a stimulus package, but keeps one of our major companies tied down
with litigation. I support the settlement, and look forward to the
boost ending this case will give our economy. Thank you for your
time and consideration,
Sincerely.
Eldridge Parks
MTC-00029972
East 1751 Riverview Drive
Postfalls, Idaho 83854
January 17,2002
Attorney General John Ashcroft
US Department of Justice
950 Pert??is Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
The antitrust law was designed to Protect consumers from abuse
by a company. Not to monitor competition between businesses, which
is what happened with the antitrust case brought against Microsoft
by the Department of Justice. A settlement has been reached and I am
writing to ask that you give your rapport to this agreement. The
original antitrust suit against Microsoft was badly misinterpreted.
Microsoft has not harmed consumers; on the contrary, Bill Gates has
helped consumers enormously in understanding the technological
revolution that has descended upon us. He has made software easier
to understand, easier to imegrate, and much more affordable. What he
has not done is pay court to the powers that be in Washington, or
appeased his competitors by not being too successful. Hence, we have
our antitrust lawsuit against Microsoft. However, the case is over,
and it is time to move on.
Microsoft has met the demands by the Department of Justice by
agreeing to configure its Windows program to allow competing
software to be inserted; Microsoft his agreed to help companies
achieve a greater degree of reliability with their networking
software, and Microsoft has agreed to terms that extend well beyond
the products and procedures ?? in the original lawsuit. Whatever
"sins" Microsoft may have committed, they have more than
paid for. I urge you to give your support to this agreement. It is
time to get back on track. We have been through some rough times and
now need to concentrate on getting our ??my going again.
Microsoft can help us to this, if we allow it. Thank you.
Sincerely,
James Rocca
cc: Senator Larry Craig
MTC-00029973
Attorney General
Department of Justice
Washington, DC
FAX 1-202-307-1454 or
1-202-616-9937
Please settle the Microsoft case with the current findings.
We feel the prosecution of Microsoft has been and is detrimental
to the entire economy. The public has been penalized by actions of
the federal government in this unreasonable prosecution by the
government,
[[Page 28788]]
Microsoft competitors, various states where the competitors reside
and a prejudice judge. We feel Microsoft has a better product and
should not be prosecuted for making the best successful economy in
history and its prosecution led to the recession. It appears the
other giants, i.e. Exxon and Mobile, merging banks, merging lumber
companies, etc., manage to merge and be monopolistic to the
detriment of the regular citizen causing increased prices and the
federal government does not interfere.
While Microsoft gets punished for going it alone (without
political aid) and the other giants lobby Congress, we (everyday
citizens) have to pay the higher prices. Please settle this matter
with the current decisions and do not carry it out any longer.
Forcing Microsoft to help their competitors is unAmerican.
Sincerely,
Joe Brennan
Betty Brennan
FAX 206-878-1681
January 28, 2001
MTC-00029974
January 26, 2002
Attorney General John Ashcroft
US Dement of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-000
Dear Mr. Ashcroft:
I have taken this opportunity to write and express my opinion of
the settlement that has been reached in the Microsoft antitrust
case. I believe that we need to concentrate on issues of greater
importance. I am pleased that a settlement has finally been reached
in this case and that Microsoft will be able to continue doing
business as a whole entity.
It is apparent to me that the people pursuing this litigation on
are not looking for a good judgment in this case but rather the
perpetuation of their own personal agendas. When government becomes
involved in business, socialism becomes the rule of the day. I feel
that this case has been fueled by jealousy and that until we reach a
conclusion to this litigation free enterprise is stymied. The terms
of the settlement are fair: Microsoft has agreed to design all
future versions of Windows to be compatible with the products of its
competitors, and they will also cease any behavior that may be
considered retaliatory.
Please support this settlement. I trust that you will do all
that is within your power to protect American businesses.
Sincerely,
Vanessa I. Castagliola, Leonard D. Castagliola Jr.
MTC-00029975
January 24, 2002
Attorney General John Ashcroft
US Justice Department
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am tired of the Justice Department using my tax dollars to
fund litigation against Microsoft. No other company has provided the
amazing tools that have helped businesses around the globe to
produce their work faster and better.
The litigation was shaped and formed in the Clinton
administration under the guidance of Microsoft's competitors. Had
they put as much passion and energy into developing products that
were worth using, they would not be in this fight.
Please, let's put the American machine to work protecting our
people from terrorists inside and outside of America. Let the free
market economy decide who has the better product. At the end of the
day, it really doesn't matter what is loaded onto a computer. I can
strip it down and build it back with whatever programs I so desire.
To date, the competitive products have not been worth the effort.
I am a business owner who has a product that is so great; my
clients won't go elsewhere ever again. Does that make me a monopoly
too? By the way, I intend to make a profit this year. Is it cause
for litigation by the Justice Department?
Sincerely Yours,
Laurie J. Mitchell, Director
EventForce, Inc.
1323 102nd Avenue NE
Bellevue, WA 98004
(425) 635-7696
MTC-00029976
J C BOATRZGIIT
1395 N Falkenburg Road
Tampa. FL 33619
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to you today in support of the settlement that was
reached in the Microsoft antitrust dispute. I believe that this case
needs to come to a close, and indeed, never should have been brought
in the first place.
The settlement is reasonable, under its terms Microsoft will
disclose information about the internal interface of its Windows
operating system, this will enable its competitors to create new
products that will work within the system. Microsoft will also
design all future versions of Windows to be compatible with the
products of other companies. Finally Microsoft will not engage in
predatory business tactics, or exact revenge against any of its
competitors. The company will be monitored the by a government
appointed technical committee which will ensure that Microsoft
complies with the terms of this settlement.
Microsoft is one of this nations greatest corporate assets.
Attacking this company will not benefit the U.S. economy, the IT
industry, or the American consumer. Thank you for doing all that is
within your power to see this settlement pass. Thank you for your
consideration of my position.
Sincerely,
J.C. Boatright
MTC-00029977
January 18, 2002
Ms. Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Dear Ms. Hesse,
The settlement of the Microsoft antitrust case can help our
nation's struggling economy begin to improve.
Employers are challenged by the downswing in the economy. Many
workers are seeking employment after being laid off. NASDAQ and
technology stocks have been directly affected by the Microsoft
lawsuit since the spring of 2000. It is imperative to draw closure
to this litigation. I see that this is important to improve our
economy and to encourage consumers. I urge you to agree with the
settlement of the proposed Final Judgment antitrust case against
Microsoft Corporation.
Sincerely,
Jack & Mary Woelfel
4346 $E Maryland
Topeka, KS 66609
MTC-00029978
EQUITRRC
THE TRACKING COMPANY
January 21, 2002
Attorney General John Ashcroft
U.S, Department of Justice
950 Pennsylvania Avenue
Washington, DC 20530-0001
Dear Mr. Ashcroft,
Your decision to settle the Justice Department's lawsuit against
Microsoft offers every party involved in the matter the best of both
worlds; Microsoft will cease its alleged unfair business practices
to the immense benefit of its competitors while at the same be
allowed to stay in tact as a company.
Microsoft certainly was penalized with more than a rap on the
corporate knuckles. The settlement was arrived at after extensive
negotiations with a court-appointed mediator. Important to note is
Microsoft's agreeing to terms that extend well beyond the products
and procedures that were actually part of the suit; it demonstrates
how much Microsoft is committed to settle this lawsuit. Even though
they may not realize k right now, Microsoft's biggest adversaries
will benefit from the terms of the settlement. First of all,
Microsoft has agreed to share its patented code for its Windows
operating system with competitors. Second, Microsoft has agreed not
to retaliate against computer makers who ship software that competes
with anything in its Windows operating system. These two measures
will significantly increase competition.
I hope the settlement process is quickly concluded and that the
settlement is implemented as soon as possible.
Sincerely,
Gid Yousefi
836 Ponce de Leon Boulevard, Coral Gables, Florida 33134, (305)
442-2060, Fax (305) 442-0687
MTC-00029979
1449 Chelmsford Street NW
North Canton, OH 44720
January 27, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC
20530-0001
Dear Mr. Ashcroft:
[[Page 28789]]
Three years ago, Microsoft was brought to trial in the federal
courts. Up until six months ago, absolutely no progress was made it
was just a waste of time and money. Now, a settlement has been
proposed and is currently awaiting approval. Microsoft's opponents
believe that the settlement lets Microsoft off too lightly and that
Microsoft holds a dangerous monopoly over the consumer. They are
wrong. Microsoft did not get off lightly in the settlement, they do
not hold a dangerous monopoly, and the only thing that is harming
the consumer is the litigation itself. The economy has been crippled
over the past several years, arid this is due in large part to the
antitrust case, the amount of money that has been spent in
litigation, and the panic of stockholders pulling out of their
Microsoft shares. I do not believe it is in the best interest of the
consumer to continue litigation against Microsoft. It can only do
more damage to the economy and the technology industry.
The settlement needs no further deliberation or modification.
Microsoft has been more than generous to its competitors, agreeing
to terms that cover aspects of Microsoft technology and procedures
that were not found to be in violation of antitrust laws. The
settlement requires Microsoft to refrain from retaliation should
software be introduced into the market that directly competes with
Microsoft technology. Microsoft has also agreed to license the
Windows operating system to twenty of the largest computer makers on
identical terms and conditions, including price.
I can find no reason for litigation to be continued against
Microsoft. As I see it, only more harm can come to the public if
this drags on for much longer. I ask you to support the settlement
as it now stands.
Sincerely,
Richard Miller
MTC-00029980
Senator W.Tom Sawyer, Jr.
3 State House Statum
Augasta, ME 04333-0003
(207) 287-1505
S?? Valley Ave.
Ranger, ME 04401
TEL (207) 942-1771
FAX (107) 943-3073
January 17, 2002
Renata Hesse, Trial Attorney
Antitrust Division--department of Justice
801 D Street NWW, Suite 1200
Washington, DC 20530
Fax 202-616-9937
Dear Ms. Hesse,
I am writing in regards to the proposed settlement negationed
with Microsoft. As the former owner and CEO of a Maine Company that
employed over 250 people and relied on negotiations with state and
local governments for much of my business, I can appreciate first
hard the complexity of dealing with issues that effect the public
good. In fact that was a significant factor in why I chose to run
for both local and state offices in my home town. I also have been
involved in litigation and know the enormous drain it is on a
business, and even its employees, many of whom are also
stockholders, both financially and emotionally. That is why I feel
it is in the best internet of the public and the government to
accept the proposed settlement negotiated with Microsoft and move
on. Having need a considerable amount surrounding the proposal, I
feel it to be a beneficial arrangement for the general public in
several ways.
It provides for the introduction of technology resources into
the education system that will be functional and integrated. It
offers the potential for widespread benefit because it includes
money for teacher training and support as well as sorely needed
hardware and software. These have proven to be more critical to the
successful integration of technology than the latest version of
computers and associated programs.
I also like the matching greats aspect of the proposed
foundation. I have always felt in dealing with various nonprofit
groups and charities with which I have been involved, that some
contribution on the part of the recipient provided for appreciation
of the items or services received. It just makes sense to me.
Fax (201) 287-1527 * TTY (207) 287-1858 * Message
Service 1-800-423-6900 * Web Site: http://
www.state.me.sul/legis/s??sts E-MAIL:
S?? @ aol.com
MTC-00029981
Ms. Renata Hesse, Esq.
January 17, 2002
Page Two
To return for a moment to the matter of litigation, I am of the
opinion that a civil case of prominence benefits our society in that
it causes both parties to become more sensitive and responsive to
issues that resulted in the suit to begin with. However, there comes
a time where the need to resolve the case becomes crucial as it
starts to drain productive resources from both parties. Our
government's case has reached such a stage. Timing is always of the
essence for all parties.
The legal actions to date have forced Microsoft, and many other
large corporations, to rethink and modify their business practices
if they have half a brain, which can only benefit the general
public. Microsoft's willingness to reach a settlement of this
magnitude demonstrates a responsive attitude and finally it brings
to a productive conclusion a very expensive and burdensome lawsuit
which has had adverse effects on the company's value and
productivity during the period of the lawsuit and this too has an
adverse effect on many citizens as well. As we have seen in the
Enron debacle, stockholders are real people too.
At a time when the economy and our nation are in recovery, I
feel settlement of this case to be in the general public's best
Interest and urge the Attorney General to convey this message to all
parties involved.
Thank you for consideration of my comments.
Enthusiastically,
MTC-00029982
HEADQUARTERS
6033 W. Century Blvd.
Suite 950
Los Angeles, CA 90045
(310) 410-9981
Fax: (310) 410-9982
POLICY CENTER
126 C Street, NW
Washington, DC 20001
(202) 479-2873
Fax: (202) 479-2876
www.urbancure.org
January 24, 2002
Ms. Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
SUBJECT: Microsoft Settlement
Dear Ms. Hesse:
I am writing to urge acceptance of the proposed Final Judgment
offered by the U.S. Department of Justice and endorsed by nine state
attorneys general to resolve the antitrust case against Microsoft
Corporation.
I am president of the Coalition on Urban Renewal & Education
(CURE), a 5-year-old independent nonprofit organization based in Los
Angeles. CURE produces research and commentary on a wide range of
public policy issues impacting America's inner cities and the poor.
CURE promotes faith-based and free-market solutions on issues of
race and poverty. CURE works with policy leaders, inner city
pastors, entrepreneurs, college students and ex-welfare recipients
to create an environment for self-government and free-enterprise.
This lengthy litigation has cost my fellow taxpayers and me more
than $35 million, and after reviewing the terms of this Judgment,
final approval is clearly in the public interest. Perhaps of
greatest benefit to the American people, the Department of Justice
(DO]) and the settling states will avoid additional costs and now be
able to focus their time and resources on matters of far greater
national significance--the war against terrorism, including
homeland security. As noted by District Court Judge Colleen Kollar-
Kotelly, who pushed for a settlement after the attacks of September
11, it is vital for the country to move on from this lawsuit. The
parties worked extremely hard to reach this agreement, which has the
benefit of taking effect immediately rather than months or years
from now when all appeals from continuing the litigation would
finally be exhausted.
The terms of the settlement offer a fair resolution for all
sides of this case the DOJ, the states, Microsoft, competitors,
consumers and taxpayers. Microsoft will not be broken up and will be
able to continue to innovate and provide new software and products.
Software developers and Internet service providers (ISPs), including
competitors, will have unprecedented access to Microsoft's
programming language and thus will be able to make Microsoft
programs compatible with their own. Competitors also benefit from
the provision that frees up computer manufacturers to disable or
uninstall any Microsoft application or element of an operating
system and install other programs. In addition, Microsoft cannot
retaliate against computer manufactures, ISPs, or other software
developers for using products developed by Microsoft competitors.
Plus, in an unprecedented enforcement clause, a
[[Page 28790]]
Technical Committee will work out of Microsoft's headquarters for
the next five years, at the company's expense, and monitor
Microsoft's behavior and compliance with the settlement.
Most importantly, this settlement is fair to the computer users
and consumers of America, on whose behalf the lawsuit was allegedly
filed. Consumers will be able to select a variety of pre-installed
software on their computers. It will also be easier to substitute
competitors" products after purchase as well. The Judgment
even covers issues and software that were not part of the original
lawsuit, such as Windows XP, which will have to be modified to
comply with the settlement.
This case was supposedly brought on behalf of American
consumers. We have paid the price of litigation through our taxes.
Our investment portfolios have taken a hard hit during this battle,
and now more than ever, the country needs the economic stability,
this settlement can provide. This settlement is in the public
interest, and I urge the DOJ to submit the revised proposed Final
Judgment to the U.S. District Court without change.
Sincerely,
Star Parker
President
MTC-00029983
FACSIMILE TRANSMITTAL SHEET
TO: Ms. Renata Hesse
FROM: Rep. Jeff Plale
COMPANY: Department of Justice
DATE: 01/28/2002
FAX NUMBER: (202)616-9937
TOTAL NO. OF PAGES INCLUDING GOVER:2
PHONE NUMBER:
SENDER'S REFERENCE NUMBER
RE: U.S. v. Microsoft
YOUR REFERENCE NUMBER:
NOTES/COMMENTS:
Please call with any questians.
Thanks,
Rep. Jeff Plale (608) 266-0610
Jeff Plale
State Representative
21st Assembly District
OFFICE
State Capitol
P.O. Box 8953
Madlson, WI 53708-8953
(608) 266-0610
1-888-534-0021
Fax:
(608) 282-3621
E-Mall:
Rep.Plale @ legis.state.wl.us
HOME
1404 Eighteenth Avenue
South?? 435
(414) 764-5292
Fax:
5404 18?? Avenue
(414) 571-0035
Printed on recycled paper
January 28, 2002
Ms. Renata Hesse
Trial Attorney
Department of Justice--Antitrust Division
601 D Street NW, Suite 11200
Washington DC 20530
Dear Ms. Hesse:
I am writing to encourage your swift approval of the settlement
of the U.S. v. Microsoft case. As you are aware, Microsoft has been
a worldwide leader in groundbreaking technology. This has been a
tremendous benefit to consumers. Prompt settlement of this case is
in the best interest of the state of Wisconsin, and my constituents
in the 21st Assembly District. Microsoft's leading technology is of
great advantage to our school children and the future of America. By
file Department of Justice settling this case, Microsoft could again
assist less fortunate school districts with much needed help in
technology. To date, over $30 million dollars in taxpayer dollars
has been needlessly spent on this case. It is time for the
Department of Justice to move forward and approve the settlement of
the U.S. v. Microsoft case.
Sincerely,
Jeff Plale
State Representative
21st Assembly District
MTC-00029984
JOSEPH TARTAGLIA
88 FARRELL DRIVE
WATERBURY, CT 06706
Renata Hesse, Esq.
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Via Facsimile 202-616-9937
Dear Ms Hesse:
This letter is to articulate my support for the proposed
settlement in the Microsoft case. The fact that over $30 million in
taxpayer dollars has been spent in this case during these trying
economic times is proof enough that this case has gone on far too
long. Hopefully, the settlement will signal a return to innovation
without the threat of government intervention. The Department of
Justice has done a commendable job in putting together an agreement
that is fair but won't put Microsoft out of business. It is a
reasonable conclusion to this case and I support it wholeheartedly.
Sincerely,
Joseph Tartaglia
MTC-00029985
ASSOCIATED BROKERS
OF SUN VALLEY, LLC
Real Estate
January 28, 2002
Mike Sampson
P.O. Box 2004
Sun Valley, ID 83353
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing in support of Microsoft and believe this whole
antitrust case has become political. I don't see how this benefits
consumers and businesses--especially at the expense of the
economy. The tech stocks are down. The technology sector is down.
The employment numbers are down. Let Microsoft get back to work and
the government get on with worthwhile business. The only people I
see benefiting from this case are the lawyers.
I am a small businessman who employs 25 people. I have greatly
benefited since 1982 from the products Microsoft produces and feel
they have been more than fair to me. If their competitors can't put
out a better product with competitive pricing and service that's
their problem. I don't see why I should suffer as a small
businessman. After years of extensive negotiations and mediation,
Microsoft has gone out of their way to settle this case. They went
well beyond what would be required in any antitrust case. They
agreed to design future versions of Windows, starting with an
interim release of XP, to provide a mechanism to make it easier for
computer companies, consumers and software developers to promote
their software within Windows.
Let's end this litigation so that we can focus on what's really
important. Thanks,
Sincerely,
Mike Sampson
cc: Senator Larry Craig
P.O. Box 186, Sun Valley, Idaho 83353
Sun Valley Road & Main Street,
Ketchum, Idaho
208-226-5300 . Fax 208-726-4311
MTC-00029986
2724 Gladstone Avenue
Ann Arbor, MI 48104-6431
January 15, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, N-W
Washington, DC 20530-0001
Dear Mr. Ashcroft:
As a citizen of a state party to the pending Microsoft
settlement, I would like to offer my support to the Justice
Department approving the current deal and ending further legal
action in this case. The seemingly envious reaction of the
government to Microsoft's growing power and dominance in the
technology industry, led to a lawsuit, then a misguided judgment,
that far over-reached the right of government to manipulate the
marketplace. This agreement seems like a reasonable compromise and
should be approved, or risk alienating the public and hurting the
economy. Based on the terms of the settlement, it would seem that
Microsoft has made great strides to offer competitors more
opportunities to succeed. They have agreed to not retaliate against
computer makers who ship competitive software, offering broader
fights to promote non-Microsoft programs within Windows and
providing the top 20 manufacturers a uniform price structure to back
up that promise. Starting with Microsoft XP, they will begin to
provide a mechanism to make it easy to add access to competitive
software, such as those from AOL or Real Networks, or even remove
features within Windows. These steps seem like a major opportunity
for competitors to show they can thrive in the Windows environment.
I ask for your approval of this very fair settlement, as both
sides have proven able to compromise through negotiation with a
court-appointed mediator and that work should be upheld. I
appreciate your time and look forward to an intelligent decision.
[[Page 28791]]
Sincerely,
Vernon Kempfert
MTC-00029987
THE REGION'S CHAMBER
PRINCE WILLIAM REGIONAL CHAMBER OF COMMERCE
4320 Ridgewood Center Drive,
Prince William, Virginia 22192 ??
Tel. 703-590-5000 ??
703-590-9815
email: pwrcc @ RegionalChamber.org ?? Internet:
www.RegionalChamber.org
FAX COVER SHEET
To
DATE
BUSINESS FAX #
FROM
PAGES (??)
MESSAGE
PRINCE WILLIAM REGIONAL CHAMBER OF COMMERCE
VISION
To be the leading organization for businesses in the Prince William
Region.
MISSION
To promote and improve the business climate through initiatives
that stimulate economic growth, effect legislative change and
enhance the region's quality of life.
CHAMBER PARTNERS 2002
GOLD
POTOMAC NEWS ** POTOMAC HOSPITAL
WASHINGTON GAS
SILVER
DOMINION VIRGINIA POWER
BRONZE
MDA TECHNOLOGIES ** NOVEC
COMPTON & DULING, LC
THE WATERS GROUP, INC.
FORT BELVOIR FEDERAL CREDIT UNION
Jan 3rd, 8:00 am Legislative Kick-off Breakfast, Manassas
Jan 10th, 5:30 pm BAH at the Hampton Inn Woodbridge
Jan 16th, 11:30 am Membership Meeting Luncheon at Montclair Country
Club
Topic: State of the County
Sponsor: Washington Gas
Jan 18th, 12 pm Lunch Bunch at Burger King, River Oaks
Jan 22nd, 9:00 am New Member Orientation at River Run Senior
Apartments
Jan 24th, 8:00 am Business Before Hours at the Chinn Center
Jan 26th, 6:30 pm Chairman's Dinner & the Silver Salute at
Montclair Country Club
Happy New Year !
JOIN THE REGION'S CHAMBER NOW--DON'T MISS ANOTHER OPPORTUNITY!
Call (703) 590-5000 for Reservations/Directions/Information
January 28, 2002
Ms. Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street, Suite 1200
Washington, DC 20630
RE: Comments on the Microsoft Proposed Settlement Agreement
Dear Ms. Hesse:
The Prince William Regional Chamber of Commerce is writing this
letter to express its support for the settlement reached by the U.S.
Department of Justice, nine state attorneys general and Microsoft in
the long-running antitrust lawsuit initiated by the federal
government. The Region's Chamber is critically aware of how
important it is to our national economy that all businesses be able
to "get back to business." There were many knowledgeable
people guided by an internationally recognized mediator to reach the
Microsoft settlement. We believe that additional litigation,
following on the heels of many years of costly legal proceedings and
on the subsequent work of those in mediation would serve only to
prolong the negative impact on our economy of the Microsoft
litigation.
Therefore, the Prince William Regional Chamber of Commerce, an
organization of more than 800 businesses in the Prince William area,
respectfully encourages the U.S. Department of Justice to urge the
Courts to adopt the agreement with all due speed so that business
and our national--and even international--economy can move
forward again with certainty.
Sincerely,
Carol A. Kalbfleisch Laurie C. Wieder
Chairman of the Board President
MTC-00029988
MARLANE R. TAYLOR
4600 Laurel Ave.,
Grants Pass, OR 97527
541.471.4126
uscchirp @ terragon.com
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Ave., NW
Washington, DC 205301-0001
Re: Comments on Microsoft Antitrust Settlement
Dear Mr. Ashcroft:
It has been well over three years that I have watched the
litigation debacle among the Department of Justice, states and other
lawsuits against Microsoft. I have been dismayed that Judge Thomas
Penfield Jackson's decision was allowed to stand in the first place,
when it was obvious that he was biased before the trial ended and
his ruling ought to have been tossed out in its entirety. That the
litigation continues to date without settlement is egregious.
I am indignant that millions of our tax dollars have been wasted
in pursuit of Microsoft, a tax-paying corporation that employs over
40,000 workers worldwide. In the past twenty-five years, it has been
known for its software advances and innovation. It has established
industry standards where there were none, advanced computer science,
and single handedly has been the catalyst of the technological boom.
They are only guilty of "being very successful" in what
they do.
The DOJ's lawsuit has and continues to financially injure
retirees, mutual funds, PERS state retirement funds, individual
investors, and anyone who has invested in Microsoft. "How in
good conscious can the department justify this?" So far, the
DOJ has done more to disrupt business, injure the public, damage the
economy and technology sector, and financial markets combined than
what you claim Microsoft has done to the consumer.
Finally, it appeared there would be a settlement with Microsoft
offering to undergo close scrutiny and willing to spend a billion
dollars on computer science, hardware and software, teacher training
and on-going assistance in the most needy schools. It is an
innovative idea and adequate settlement offer, all of which is
geared to help our youth become computer literate, as the business
world will demand and expect of them for entry-level positions.
However, Judge Motz denied the offer, since he believes it gives
Microsoft an unfair advantage and allows them to expand their market
share into the school system. The judge fails to recognize that he
alone is denying impoverished school districts, and the children
therein, access to a computer education they will need in order to
compete for jobs in the real world. He would rather have children
computer-illiterate, because Microsoft might just benefit in some
way. What's wrong with this picture?
His ruling is notably without justification, denying Microsoft's
good faith offer to settle. Even in a perfect world, the judge's
decision would still be wrong, very wrong. This litigation is a
perfect example of an imperfect legal system. The ease has gone on
far beyond anyone's imagination, and has become a virtual nightmare.
The DOJ has seemingly painted itself into a corner, looking very
inept. From my viewpoint, it seems the entire justice system needs a
complete overhaul, because of its anti-business bias, and
predilection against what constitutes normal and free competition in
the business world. Judges need to be knowledgeable in the law, of
course, but they also need to understand business, economics,
capitalism, and who succeeds in business and why. Innovation is not
a dirty word. Until now, our country has led the world in creativity
and innovation thanks to Microsoft. Take a good look at all the
companies that have stood on the shoulders of Microsoft and have
ably competed in the marketplace for the last twenty-five years. The
list is huge.
That Microsoft is willing to follow the provisions set forth, it
should satisfy every one. It is past time to end this debacle. The
states that are holding out simply want to pan for gold in
Microsoft's deep pockets. There isn't one rational reason not to
grant Microsoft's substantial offer of settlement, because, it IS in
the public's interest.
The litigation has already cost millions of tax dollars for
nothing. Moreover, the DOJ is directly responsible for the untold
millions that it has cost Microsoft for its legal defense and
representation--not to mention the financial fallout affecting
millions of investors.
Enough of this: Settle the case.
Sincerely,
Marlane R. Taylor
MTC-00029989
1001 NW 63rd Street Suite 280
Oklahoma City, OK 73116
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to support the implementation of the recent
settlement between the U.S.
[[Page 28792]]
Department of Justice and Microsoft. There is no sense in continuing
litigation against a company that is the only bright in our sorry
economy. I do not think the lawsuit should have begun in the first
place. Microsoft has made a good offer and the nine states opposing
the settlement should accept it. Microsoft is giving away
technological secrets, granting broad new rights to computer makers
to configure Windows so as to make it easier for non-Microsoft
products to be promoted, and a three-person team will monitor
compliance with settlement.
I urge your office to finalize the settlement and to make sure
that further unnecessary lawsuits against Microsoft do not occur.
Thank you. My losses in the stock market during the past year have
been in excess or $2,000.000 and Microsoft is the only bright spot I
have left in my technology portfolio. I urge you to get this lawsuit
settled and allow Microsoft to work on behalf of the stockholders
and America.
Sincerely,
George Platt
CC: Senator Don Nickles
MTC-00029990
From the Desk of Rick Bagley
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
I wanted to write to Judge Kollar-Kotelly to encourage her to
approve of the settlement that has been reached between Microsoft,
nine of the attorneys general and the Department of Justice in
Washington. If you have a consensus like this with so many
interested parties, it is hard to see what is standing in the way of
approval of this settlement.
As a member of the school board in Forsyth County and a former
employee of one of the largest law firms in the Southeastern United
States, I am more than aware of what happens when the government
gets involved in lawsuits. The effects of a lawsuit on any company,
school or just an individual is chilling enough. But in this case,
the effect of forward movement in the Microsoft lawsuit was
devastating to millions of investors throughout America who were
heavily invested into Microsoft stock. During this period and while
many high-tech firms were losing ground, Microsoft continued to be
strong and show good earnings. Yet, by facing a court trial and
possible break up, Microsoft stock suffered a great deal as did
investors as, at that time, Microsoft was the No. 1 held stock in
pension and mutual funds. The reason that I would like to see a
quick settlement in this case is to get the matter out of the courts
so that Microsoft and the other parties can get back to business.
Thanks for your consideration of my views
Sincerely,
Rick Bagley
1195 Whispering Pines Dr.,
Kernersville, NC 27284
MTC-00029992
11234 NE 87th St.
Kirkland, WA 98033
January 28, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing today to encourage the Department of Justice to
accept the Microsoft antitrust settlement. The entire case was
uncalled for from the beginning. Now that there is a settlement that
is fair I would like to see the government accept it and move on.
Many people think that Microsoft is getting off easy, this is
simply not true. Microsoft has given up much to reach the
settlement. Microsoft has agreed to allow computer makers the
flexibility to install and promote any software that they see fit.
Microsoft has also agreed to not enter into any agreement with any
computer maker that would require them to use Microsoft software in
any set percentage. Microsoft has also agreed to license Microsoft
software at a set price no matter what kind of software the computer
maker installs or promotes.
Microsoft has agreed to much in order to put the issue behind
them. The government needs to accept the settlement and allow
Microsoft to move forward. The only way to move forward is to put
the issue in the past. Please accept the Microsoft antitrust
settlement.
Sincerely,
Kenneth Jerome
MTC-00029993
CENTRAL CALIFORNIA
HISPANIC
CHAMBER of COMMERCE
Serving the Central Valley Business Community from Stockton to
Bakersfield Since 1984
Fax
To: RENATA HESSE
From: ANTONIO GASTELUM
ANTITRUST DIVISION
EXECUTIVE DIRECTOR
DEPARTMENT OF JUSTICE
CENTRAL CALIFORNIA HISPANIC
CHAMBER OF COMMERCE
Fax: 202-616-9937
Pages: 2
Phone:
Date: JANUARY 28, 2002
Re: DOJ v. Microsoft Settlement
CC: BECKY DARLING
� COVER PAGE PLUS 1
ADDITIONAL PAGES FOLLOWING
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
801 D Street NW, Suite 1200
Washington DC 20530
January 26, 2002
Dear Me. Hesse,
Pursuant to the Tunney Act in anti-trust cases, we are writing
to strongly urge you to support the settlement reached by the
Department of Justice and Microsoft. It is time to put this issue to
rest, Nearly four years and 35 million dollars is enough!
Microsoft is a true American business success story and doesn't
deserve to be penalized for it. Fair business guidelines are
sometimes necessary, and have been already incorporated into the
settlement agreement. Let Microsoft get back to the business of
creating new and useful computer software. Every part of the economy
feels the affects of this issue. As we are in the middle of a hard-
hitting recession, it is time to do what is necessary to get the
nation back on its financial feet.
Again we strongly urge you to support the settlement reached by
the Department of Justice and Microsoft.
Sincerely,
Antonio Gastelum
Executive Director
Central California Hispanic Chamber of Commerce
MTC-00029994
FAX COVER PAGE
FROM THE OFFICE OF
ASSEMBLYMAN JOSEPH D. MORELLE
132ND ASSEMBLY DISTRICT
716 Legislative Office Building
ALBANY, NEW YORK 12248
(518) 455-5373 FAX (518) 455-5647
TO:
FAX #:
FROM:
DATE:
RE:
PAGES: INCLUDING COVER PAGE
REPRESENTING BRIGHTON AND IRONDEQUOIT AND THE EAST SIDE OF
ROCHESTER.
JOSEPH D. MORELLE
Assemblyman 132nd District
Monroe County
THE ASSEMBLY
STATE OF NEW YORK
ALBANY
CHAIRMAN
Committee on Tourism,
Arts and Sports Development
CHAIRMAN
Subcommittee on Manufacturing
COMMITTEES
Economic Development, Job Creation,
Commerce & Industry
Higher Education
Local Governments
Libraries & Education
Technology
January 28, 2002
Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Re: Comments on the Microsoft Proposed Settlement Agreement
Dear Ms. Hesse:
The United State government negotiated a meaningful settlement
with Microsoft that is in our nation's best interest. The settlement
places sanctions on Microsoft without destroying the company. These
sanctions will foster greater competition in the software industry
and give consumers greater choice when they purchase and enhance
their computers. This settlement will also help define the direction
of government's role in the high-tech industry. This is a just, not
punitive, resolution that will help the economy and promote new
investment in
[[Page 28793]]
technology. I am encouraged by the actions of the Department of
Justice and support you in your efforts to settle this case.
Sincerely,
Joseph D. Morelle
MEMBER OF ASSEMBLY
MTC-00029995
Tom A. Schatz, President
Citizens Against Government Waste
13Ol Connecticut Avenue, NW, Suite 400
Washington, DC 20036
I am in gavor oh this mio TM. Herrick
Ms. T. M. Herrick
1500 Terrace Ave, Apt. 112
Liberal, KS 67901-5702
Dear Ms. Herrick,
Your response to this letter today will not only put a stop to
$35 million in government waste, it may also be the single best way
you can help stimulate America's economy and protect this nation's
and your own financial future. I need to ask you today to send an
urgent message to the U.S. Department of Justice (DOJ) that you
support the proposed settlement of the Microsoft lawsuit,
Under a federal antitrust law called the Tunney Act, there is a
60-day period for public comment before the U.S. District Court
decides whether to accept the settlement. This period will expire on
January 28th.
By sending your message to DOJ, you can help put an end to the
government's long-running legal assault on Microsoft, which has cost
taxpayers more than $35 million and undermined one of the primary
engines of America's economic growth. Let me tell you what's going
on and why it's urgent that you send DOJ a message right away that
you support the Microsoft settlement.
On Noyember 6, 2001, Microsoft reached, a proposed settlement
with DOJ and nine states in the antitrust lawsuit against the
company. The terms of the settlement, briefly, are as follows:
Computer manufacturers would be free to include non-Microsoft
software in their products. Microsoft would alter its products,
including the new Windows XP, to make it easier for consumers to
substitute non-Microsoft programs in the Windows operating system.
Microsoft would be required to share its programming code with
competitors so their software for video streaming, digital
photography and other features would be compatible with Windows. In
addition, a three-member Technical Committee would be established,
at Microsoft's expense, to monitor the company's behavior and
enforce the settlement for the next five years. Should the company
be found in violation of the terms of the settlement, it can be
extended for another two years.
The proposed settlement is a win-win for all concerned. It's
fair to:
� Microsoft, which will continue to be able to
provide new software that integrates new products;
� competitors, who will have more access to the
Windows platform to incorporate their products or make them
compatible;
� software manufacturers, who will get back to the
business of creating innovative products;
� Consumers, who will have more choices among
software products; and,
� investors, who will have stability in the
marketplace.
Opponents of the settlement--primarily Microsoft's well-
heeled competitors who lobbied DOJ and the states to bring this
lawsuit on the backs of taxpayers in the first place--have
launched a massive campaign to prevent the court from accepting the
agreement. They want nothing less than the dismantling of Microsoft,
and they want taxpayers to continue to pay to secure a competitive
advantage they couldn't win in the marketplace. That's why I
urgently need you to send a strong message to DO! today that you
support the Microsoft settlement.
By visiting CAGW's website at www.cagw.org, you can e-mail a
letter to DOJ, telling the government that you support the
settlement. DOJ has specifically stated that they would prefer to
receive comments electronically, so that's why I'm talcing the
extraordinary step of asking you to visit our website today and send
an e-mail to DOJ. All you need to do is go to CAGW's homepage at
www.cagw.org, click onto the "Approve the Microsoft
Settlement" link on the top fight-hand side of the page, and
follow the instructions to e-mail your letter. It will just take a
few minutes of your time.
If, however, you prefer to fax your comments in support of the
settlement to DOJ, you may fax them to the attention of Ms, Renata
B. Hesse at (202) 307-1454 or (202) 616-9937. The most
important point is that you tell DOJ you support the Microsoft
settlement and that you do it right away before the comment filing
period ends on January 28th. To date, the Microsoft lawsuit has cost
taxpayers more than $35 million. As the District Court Judge
presiding over the case has said, "In light of the recent
tragic events affecting our nafion...the benefit which will
be" derived from a quick resolution of these cases [is]
increasingly significant." Please tell DOJ to approve the
settlement today. Thank you.
Sincerely,
Thomas A. Schatz
President, CAGW
P.S. Help put an end to $35 million in government waste. Tell
DOJ that as a taxpayer and consumer you support the Microsoft
settlement, and please get your message off to them today.
Time is nmning out.
MTC-00029996
Jesse L Clay
1205 Ridgecrest Drive SE
Albuquerque, NM 87108
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I would like to take some time to express to you my feelings
about the proposed settlement that was reached between Microsoft and
the Department of Justice. It is about time that the antitrust suit
ended, and I feel that the terms in the settlement, although harsh
on Microsoft, will be for the betterment of the computer industry
and the economy.
I am pleased with the prospect of the case being resolved, but I
think it was initiated for all of the wrong reasons. Microsoft's
competitors had a major role in initiating the litigation, because
they could not bring to the market a product that matched
Microsoft's own. The competition should be happy though. The terms
of the settlement require Microsoft to turn over to their
competitors source code and design data that are crucial to the
internal makeup of Windows. Enough is enough. This settlement needs
m he approved so the industry can get back on its feet, and with
competitors working more closely with one another, the industry will
benefit. I feel the proposed settlement will benefit all parties
involved, including Microsoft's competitors.
Sincerely,
Jesse Clay
MTC-00029997
Carol Morse Sibley
92 Overlook Terrace
Bloomfield, NJ 07003-29t7
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
The antitrust lawsuits against Microsoft have gone on for too
long. They are also not very well justified. Microsoft has not only
created jobs and wealth for our country, but also has made
technological breakthroughs that have revolutionized the IT sector.
I do wish that when they come out with new versions of software they
would always make it compatible with previous versions, which they
didn't do, for instance, with PowerPoint.
Still, it's clear that the settlement seems to only help
competitors gain an edge they were not able to gain beforehand. It
forced Microsoft to disclose interfaces that are internal to Windows
operating system products, and also grant computer makers broad new
rights to configure Windows so that non-Microsoft software can be
promoted more easily.
It is in the best interests of the American public to finalize
the settlement. Our nation cannot afford further litigation so I
urge your office to use its influence to try to rein in the nine
states that want to drag this case out for even longer. Thank you
for your time.
Sincerely,
Carol Morse Sibley
MTC-00029998
1-23-02
Mi. Renata B. ??
?? (202) 307-1454 02 (202) 616-9937 (FAX)
Ms. ??
This Letter is intended to Conform that I am in favor of the ??
settlement between Microsoft and The U.S. Dept. of Justice.
This is the ?? settlement of november 6,2001.
Sincerely ??
MTC-00029999
4911 Bainbridge Court Southwest
Lilburn. GA 30047
January 24,2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
[[Page 28794]]
Dear Mr. Ashcroft:
The lawsuit that has reached a tentative agreement between
Microsoft and the US Department of Justice was flawed from the
start. The initial aim of settlement was to break up a perceived
monopoly and stop Microsoft from infringing in consumer rights.
First off, Microsoft does not fall under the terms of he definition
for monopoly because it does not sell poor quality goods at inflated
rates. Microsoft in fact has consistently delivered user-friendly
products that far outdo their competitors. They have also not
infringed on our rights, because all consumers made a conscious
decision to purchase Microsoft. The terms of the settlement violate
Microsoft's intellectual property rights as they force them to
disclose for use by competitors interfaces that are internal to
Windows" operating system products. I urge your office to take
a firm stance against the nine states that want to continue
litigation. Put an end to this dispute so that the cornerstone of
the IT sector can continue to innovate as it has in the past. It is
in the public's best interests to settle.
Sincerely,
Ralph Knight
MTC-00030000
FRANK W. BROWN
REALTON
POST OFFICE B0X 215.
ORANGE PARK, FLORIDA 32067-0215
--TELEPHONE
904-264-0504
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear General Ashcroft:
If the public spends time listening to Microsoft's opponents, we
all would be under the impression that this industry icon was the
bad guy in this entire case. These same opponents would like us to
think that Microsoft got off easy in this settlement. The truth,
however, is the very opposite. Since the company's inception,
Microsoft has set the standard for innovation and quality. Their
products are accessible, easy to use, arid affordable. They have
been seen as the "bad guy" because they are being blamed
for their competitor's inability to innovate and keep up with
Microsoft's rapid changes. How fair is that?
As far as Microsoft getting off easy in the case, this is simply
not true, Microsoft has basically opened their operation doors to
their competitors by allowing them access to Windows interfaces,
protocols, and intellectual property. They have even agreed to
create future versions of Windows within which non-Microsoft
products may function. In addition to all these damaging
concessions, Microsoft has also agreed to terms that were not even
found unlawful. I hope that you will make every possible attempt to
bring this matter to an early close.
Sincerely,
Frank W. Brown, Jr.
MTC-00030001
320 Tanglewood Trail
Wadsworth, OH 44281-2355
(330) 334-1097
January 14, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Attorney General Ashcroft:
I would like to express my support for settling the antitrust
suit against Microsoft. I do not feel that the case should ever have
been taken as far as it was. It is time to move on to more pressing
concerns.
While I recognize Microsoft's market dominance, I also feel that
they are operating legally, and as such no further action should be
taken. With the economic downturn of the past year, ending the case
and letting Microsoft generate further technologies is important.
Competitors of Microsoft will gain a lot from the settlement,
including disclosure by Microsoft of the internal interfaces of the
Windows operating system Microsoft development with its own
personnel and capital.
The longer the government keeps Microsoft's hands tied, the more
the economy will suffer. Please finalize the settlement agreement as
soon as possible. Thank you.
Sincerely,
Jenny Wallace
MTC-00030002
Janurn7 28, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
The Microsoft antitrust settlement agreement should be
finalized. I am opposed to this lawsuit.
We operate h a free enterprise system where competition is
the driving force behind a prosperous economy. Lawsuits of this
nature punish a company for being competitive. Despite my opposition
to the lawsuit, I believe the terms of the settlement are
reasonable. Microsoft has agreed to begin designing Windows with
mechanisms to make it easier for consumers to add or remove features
of Windows, and instead replace them with non-Microsoft software.
They also agreed to not to enter into contracts that would obligate
third parties to exclusively promote or distribute Windows products.
With these types of concessions, consumers will have greater
choices, and any so-called anticompetitive behavior wilt be
curtailed.
I am hopeful the Department of Justice will continue in its
efforts to settle this case. Thank you.
Sincerely,
MTC-00030003
CarrierChoice
January 28, 2002
Attorney General John Ashcroft
US Department of Jusnce,
950 Pennsylvania, Avenue, NW
Washington. DC 20530
Dear Mr. Ashcroft:
I am writing you this brief note to encourage you to help end
the Microsoft antitrust case. This nearly four-year-old case has
dramed Microsoft and the government of millions of dollars. It has
been the subject of controversy and litigation to no one's
discernable benefit. It has had a debilitating affect on Microsoft,
the entire ?? industry and the national economy at a nine when we
can least afford it. It is tune to resolve this matter.
At present, the major parties and the majority of compl??ant
states have reached a tentative settlement agreement. The agreement
allows Microsoft to retain its present corporate structure in return
for committing itself to a radical change in its marker philosophy
and practices. Microsoft will now actively encourage
"competition" by reconfiguring its Windows platforms to
readily accept and even promote non Microsoft software. The company
will now no longer requite exclusive Windows software be in
agreements of computer manufacturers to whom they license their
basic platforms. These and other concessions prove the sincerity of
Microsoft's commitment to ameliorating its in intimidating marker
dominance.
Microsoft is a great, inventive and productive player in our
economy and its own industry. We need Microsoft up and running full
time. Please support this settlement
Sincerely,
Chick ??earberstone
Director of Carner Relations
CarrierChoice
cc Senator Rick Santorum
MTC-00030004
THE CENTER FOR THE
MORAL DEFENSE
OF CAPITALISM
VIA FAX
January 28,2002
From: Nicholas Provenzo
Chairman
Center for the Moral Defense of Capitalism
To: Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Pursuant to the Antitrust Procedures and Penalties Act, 15
U.S.C. 16, the Center for the Moral Defense of
Capitalism respectfully submits its evaluation of the proposed Final
Judgment resolving U.S. v. Microsoft Corporation (Civil Action No.
98-1232) and State of New York ex. ref Attorney General Eliot
Spitzer, et al., v. Microsoft Corporation (Civil Action No.
98-1233). The mission of the Center for the Moral Defense of
Capitalism is to promote the social welfare of the nation by
presenting to the public a moral foundation for individualism and
economic freedom based on a philosophical analysis of humanity and
human nature. Specifically, we seek to apply Ayn Rand's philosophy
of Objectivism to the understanding of human action and human
relationships.
As the cornerstone of a free, capitalist system, we argue that
human life requires thought and effort and that the free market
springs from the trade of one's thoughts and efforts with others. We
make the argument that human minds and bodies must be left free of
coercion, that all human interaction must be voluntary and that the
initiation of
[[Page 28795]]
physical force must be banished from human relationships. We see a
proper government as the agent of its citizens, charged with one
mission: the use of retaliatory physical force in defense against
the initiation of physical force. Our organization has followed the
Microsoft antitrust case from its initial filing--we have
opposed the case from the outset, seeing it as an abridgement of the
freedom of production and trade and an interference with the right
to acquire and possess property. We disagree with the essential
factual component of this case-that Microsoft's integration of its
Internet Explorer Web browser with its Windows operating system was
a coercive act against Microsoft's competitors and customers.
Instead, we see a company that accordin9 it its evaluation of the
marketplace saw the commercial value of product integration and
acted accordingly. In exercise of Microsoft's right to control its
property, the firm set terms for the sate of that property that it
believed was in its own self-interest. Microsoft's subsequent
commercial success after this integration affirms the wisdom of
Microsoft's actions--Microsoft's customers themselves chose to
reward the firm with increased sales and increased market share.
Rather than serve an impediment to the free market, Microsoft's
actions personified them.
Yet, obviously, Microsoft's success has made it into the target
of the government's wrath via the current antitrust case. Our
organization closely followed the District Court case, writing
several published evaluations of the case and its subsequent rulings
(see Appendix t & 2). Our organization also participated in the
US Court of Appeals for the District of Columbia Circuit appeals
proceedings as an amicus curie. Our amicus brief relied on two major
arguments in opposing the government's case: 1.) that the antitrust
laws are unconstitutional laws that fail to provide with clear and
concise guidance necessary to avoid sanctions under the law; and 2.)
that the antitrust laws are unconstitutional laws because they
require the government to initiate force against innocent citizens.
Today, our view of the Microsoft antitrust case and its proposed
settlement is as follows: While we respect the desire of the parties
to seek a resolution to this case, particularly that of Microsoft,
which has had to endure a 3\1/2\ year crusade against its property
rights and its right to conduct its business in a profitable manner,
we are wary of any settlement that legitimizes any aspect of this
unjust assault against a successful, innovative business
We consider the case against Microsoft to have been defective at
every level, from the fundamental claim that the entrepreneurial
actions of a successful business are a threat against others, to the
claim that a monopoly can exist where there is no legal barrier to
entering a market, to the claim that the citizens of the United
States are too ignorant or incompetent to exercise their individual
power of choice when in the marketplace and therefore require the
government to make their personal choices for them. We consider it a
failure that the court saw no distinction between the earned success
of a business in the free market and the coercive power of a
government favorite and we consider it a failure that the court did
not ultimately throw out the case against Microsoft.
Considering that this case was initial brought not at the
insistence of individual consumers or with Microsoft's business
partners, but at the insistence of Microsoft's unsuccessful
competitors, this entire case reeks of business failures asking the
government to step in and give them the commercial success they
could not achieve in the marketplace. Failed businesses must not be
allowed to set the rules for the markets in which they failed.
In evaluating the proposed settlement, we find that it
specifically threatens the right to private property. A key
component of the proposed remedy is a requirement that Microsoft
make its source codes available to a government-sanctioned oversight
committee, which in turn is supposed to ensure these same source
codes are made available to non-Microsoft "middleware"
producers, so that these companies can create products to compete
with Microsoft. Since under the proposed judgment, the United States
would retain the right to determine and enforce the scope to which
these source codes are to be made available, the final judgment
constitutes a de facto seizure of private property--the source
codes--and its subsequent conversion to a public good. Such a
taking is wholly incompatible with the Constitution of the United
States.
Accordingly, we reject the notion that this settlement serves
the public interest, or that any punishment of Microsoft for its
business practices will be of benefit to any consumer. Eroding
Microsoft's property rights serves no one. We hold that no antitrust
case, including the Microsoft case can withstand rational scrutiny,
and we ask that no sanction be placed on Microsoft as a result of
its antitrust conviction.
Appendix 1:
Judge Jackson's Findings of Fiction
By Dr. Edwin A. Locke, Ph.D.
Senior Policy Analyst
The Center for the Moral Defense of Capitalism Judge Thomas
Penfield Jackson has released his "findings of fact" in
the Microsoft antitrust case. While his report did contain some
correct information--such as the truism that a successful
company tries to defeat its rivals--the central claims of his
report are blatant falsehoods Let us examine five of these fictions
Fiction #1: Microsoft is a "monopoly. "There is
no such thing as a private monopoly. Only the government can
forcibly prevent competitors from entering a market. Microsoft has
attained dominance in the software industry, but dominance is not
monopoly. Market dominance has to be earned through a long struggle,
by providing better products and better prices than anyone else
Dominant companies who falter (as did Xerox, IBM, General Motors and
Kodak) will find their market share eroded, sometimes very quickly.
There is no threat from these dominant players so long as their
competitors are legally permitted to enter the field, invent new
products, and combine with each other to gain the needed market
power.
In a free market, a dominant position can only be sustained by
continually providing new products and services that are better than
other firms" products. Paradoxically, Judge Jackson recognizes
this fact but condemns it. Microsoft's innovation, its continual
product upgrades, its millions spent on research and development,
are cited by Jackson, not as evidence that Microsoft has earned its
position, but only as evidence of a conspiracy to
"stifle" its competitors.
Fiction #2: Microsoft's "monopoly power" allows
it to "coerce" its customers. A private company has no
power to force consumers to do anything. Did Judge Jackson find that
Microsoft threatened to beat people up or throw their bodies into
the East River if they bought the wrong Web browser? Of course not.
The only "leverage" Microsoft has is the leverage it has
earned by producing a product that people want to buy.
This economic power, the power of voluntary trade, is
fundamentally different from political power, the power of the gun.
Yet Judge Jackson is eager to erase this distinction. Thus, such
actions as upgrading a product to match the features offered by a
competitor, distributing a product for free, or negotiating
favorable terms with business partners--all of them normal and
beneficial business practices--are presented by Judge Jackson
as if they are a nefarious, mafia-like conspiracy to oppress the
public.
Fiction #3. Microsoft harmed consumers. This is certainly
news to the millions of people worldwide who value Microsoft
products enough to make the company and its founders rich. Most
bizarre is Judge Jackson's claim that Microsoft harmed consumers by
giving away its Web browser, making it unprofitable for other firms
to sell their browsers Any sane consumer would be delighted to get a
product for free rather than paying money for it. To speak of
receiving free software as a "harm" is Orwellian
doublespeak.
Fiction #4: Microsoft is a threat to consumers because it
"could" raise its prices. Under this criterion, anyone
could be prosecuted for anything. Do you own a kitchen knife? Then
you might stab somebody--so should the government put you in
jail?
Microsoft has the right to sell its product for any price it
chooses--but anyone familiar with the history of business and
with Economics 101 knows that market leaders have a selfish interest
in keeping their prices low. Why? Because they make a lot more money
by creating a mass market than by creating a product only the rich
can buy. Henry Ford understood this. So did Bill Gates.
Clearly, Judge Jackson does not. The only basis for his
conclusion is the caricature of the successful corporation as a
vicious "Robber Baron" which, even if it is not
"exploiting" consumer now, is merely waiting for the
opportunity to do so
Fiction #5: Blocking Microsoft's ability to compete will
foster greater industry innovation. A private company, with no power
over consumers but the power conferred by offering a useful product,
is branded by Judge Jackson as dangerous. But far-reaching
government intervention in the software industry, including the
massive use of force to shatter Microsoft and control its
[[Page 28796]]
business practices, is presented as an attempt to spur innovation.
Only those who believe Al Gore invented the Internet could take this
argument seriously.
What Judge Jackson really objects to is the fact that Microsoft
defeated its competitors, i.e., that it was successful. The real
meaning of his "findings of fact" is that the best
brains must be crippled, so that lesser brains will not have such a
hard time succeeding. He and the government prosecutors whose
arguments he is echoing do not want to foster innovation; they want
to sacrifice the best and the brightest in the name of
egalitarianism. They want the playing field leveled by coercion so
that no one can rise to the top.
What consumers need is an antidote to the fictions peddled by
Judge Jackson: the recognition that businessmen have a right to
succeed by trading their products in a free market Dr. Edwin A.
Locke is Dean's Professor of Motivation and Leadership at the Robert
H. Smith School of Business at the University of Maryland and is
affiliated with UMD's Department of Psychology. An internationally
renowned behavioral scientist, Locke's work is included in leading
textbooks and acknowledged in books on the history of management.
Appendix 2:
Altruism in Action: An Analysis of Judge Jackson's Finding of
Fact and the Antitrust Assault on Microsoft by Adam Mossoff
Policy Analyst
The Center for the Moral Defense of Capitalism United States
District Court Judge Thomas P Jackson is crystal clear in his recent
"findings of fact": Microsoft is marked for destruction.
But why does Judge Jackson want to punish one of the most successful
corporations in American history? Because Bill Gates proclaimed that
he wanted "to prove that a successful company can renew itself
and stay in the forefront"i and he proceeded to do
just that.
---------------------------------------------------------------------------
\i\ Bill Gates, The Road Ahead 64 (1995).
---------------------------------------------------------------------------
By the early 90s, Microsoft had gained a dominant position in
the software industry by creating Windows, the first commercially
viable graphical operating system that could be used on PCs. But in
the mid-90s, Gates realized that the Internet represented the next
step in the ongoing computer revolution; thus, he created a business
plan to "stay in the forefront" of this revolution. In
so doing, he set into motion the same technological and commercial
innovation that had led to Microsoft's leading market position in
the first place.
Microsoft began by investing a staggering $100 million each year
in Internet research and development, and in four years the company
expanded its Internet division from only six people to more than one
thousand. These investments, in the words of Judge Jackson, paid
"technological dividends.ii (Paragraph 135)
Microsoft developed a Web browser called Internet Explorer, and
"after the arrival of Internet Explorer 4.0 in late 1997, the
number of reviewers who regarded it as the superior product was
roughly equal to those who preferred [Netscape's] Navigator."
(Paragraph 135)
---------------------------------------------------------------------------
\ii\ US v Microsoft, No. 98-1233 (TPJ) D.D.C. Nov 5,
1999) (findings of fact). All references to the findings of fact
hereafter will refer only to the paragraph number.
---------------------------------------------------------------------------
But Gates took Microsoft even farther. He integrated Internet
Explorer into Microsoft's Windows operating system so that it would
be easier to incorporate the fast-growing Internet into all aspects
of personal computing. In fact, Judge Jackson partly acknowledges
the groundbreaking work performed by Microsoft in this regard:
The inclusion of Internet Explorer with Windows at no separate
charge increased general familiarity with the Internet and reduced
the cost to the public of gaining access to it, at least in part
because it compelled Netscape to stop charging for Navigator. These
actions thus contributed to improving the quality of Web browsing
software, lowering its cost, and increasing its availability,
thereby benefiting consumers. (Paragraph 408)
Concurrent with its technological innovation, Microsoft put into
practice novel business services and licensing arrangements. Just
one of many examples addressed by Judge Jackson is the Internet
Explorer Access Kit (IEAK), a service that permits an Internet
access provider (IAP), such as America Online or Earthlink, to
accept a license agreement on the Web and then download and
customize Microsoft's Internet software. When Microsoft began
offering this service in September, 1996, it was the first time an
Internet access provider could create a distinctive identity for its
service in as little as a few hours by customizing the title bar,
icon, start and search pages, and "favorites" in
Internet Explorer. The IEAK also made the installation process easy
for IAPs. With the IEAK, IAPs could avoid piecemeal installation of
various programs and instead create an automated, comprehensive
installation package in which all settings and options were pre-
configured (Paragraph 249)
More than 2,500 access providers--representing more than
95% of the Internet subscriber market in the US--used
Microsoft's IEAK service. (Paragraph 251) Notably, Netscape did not
create a similar service until nine months after Microsoft
introduced IEAK, and Netscape charged almost $2,000 for something
Microsoft offered for free. (Paragraph 250)
Microsoft blended technological innovation with business acumen
and thus offered its business partners an integrated package of new
technology and new business opportunities. In exploiting these
opportunities: Microsoft often offered "valuable
consideration"--such as special discounts-to companies
like Compaq, IBM, and Intel as an incentive to adopt its Internet
Explorer and other Microsoft technology In fact, Judge Jackson uses
the term "valuable consideration" eight times to
describe Microsoft's business agreements with other
companies--leaving the honest reader to conclude that
Microsoft's dealings were not some form of coercion but rather
value-for-value trades.
For instance, Microsoft beat Netscape in developing a special
type of browser that America Online (AOL) required for its Internet
service As a result, the two companies entered into several
agreements in 1996. In exchange for AOL's commitment to use
Microsoft's Internet software, Microsoft promised to provide AOL
with unprecedented access to Internet Explorer source code,
extensive technical assistance, "free world-wide distribution
rights to Internet Explorer," an assurance "that future
versions of its Web browsing software would possess the latest
available Internet-related technology features, capabilities, and
standards," and the placement of an AOL icon in a special
folder on the Windows desktop. (Paragraph 288)
This relationship has been advantageous to both parties. Overall
usage of Internet Explorer has risen dramatically, and as a result
of this agreement AOL registered almost one million new users in a
single year--11% of its total membership--through its icon
on the Windows desktop. This fact alone prompted AOL to state in
1998 that its business arrangement with Microsoft was an
"important, valued source of new customers for us."
(Paragraph 302)
Microsoft's achievements should be held up as a model of how to
create and maintain a highly productive, innovative company. Yet
Judge Jackson is unable to view any of these facts in a positive
light. While Judge Jackson recognizes many of the concrete facts
that demonstrate Microsoft's productive achievement, he is incapable
of praising the innovation and business acumen that led to
Microsoft's success.
Instead, his descriptions are clouded by slanted, inflammatory
terms that attribute vicious motives to Gates and his company. When
Microsoft created new technology to compete with its rivals, Judge
Jackson describes the company's motivation as "fear" and
"alarm." When Microsoft offered incentives to its
business partners, Judge Jackson decries this as the
"quashing" and "stifling" of rivals. When
Microsoft licensed its products only under conditions favorable to
its long-term success, Judge Jackson describes these actions as
"threats" and "force." (Judge Jackson uses
variations of "threat" no fewer than twenty times and of
"force" no fewer than sixteen times to describe
Microsoft's actions.) When Microsoft refused to support its
competition, Judge Jackson calls this "punishment." When
Microsoft ingeniously melded technological and business strategies
to convince consumers that its products were the best, Judge Jackson
sees the company as "seizing control" and trying to
"capture" the market.
Even worse than his slanted terminology are his substantive
arguments, in which he sets up impossible standards according to
which no successful business could escape prosecution For example,
Judge Jackson writes early in his ruling that:
It is not possible with the available data to determine with any
level of confidence whether the price that a profit-maximizing firm
with monopoly power would charge for Windows 98 comports with the
price that Microsoft actually charges. Even if it could be
determined that Microsoft charges less than the profit-maximizing
monopoly price, though that would not be probative of a lack of
monopoly power, for Microsoft could be charging what seems like a
low short-term
[[Page 28797]]
price in order to maximize its profits in the future for reasons
unrelated to underselling any incipient competitors (Paragraph 65)
(Emphasis added.)
Judge Jackson admits that it is not possible to tell whether
Microsoft is in fact charging a monopoly price. Yet he dismisses
this lack of evidence as irrelevant because Microsoft could simply
be using low prices today in order to "capture" the
market and charge exorbitant prices at some future date. In other
words: Microsoft is a monopolist if it charges prices that are
deemed "too high"--but it is also a monopolist if
it charges prices that are too low. By virtue of its dominant
position in the industry--that is, by virtue of its
success--Microsoft is damned if it does and damned if it
doesn't.
Judge Jackson's visceral antagonism to business is also revealed
by his condemnation of Microsoft for winning the browser battle
against Netscape when "superior quality was not responsible
for the dramatic rise [in] Internet Explorer's usage share"
(Paragraph 375) Note the implicit premise in this condemnation: If
Microsoft hasn't produced a product that is technologically
superior, then only commerce can explain its success. Jackson is
repulsed by the notion that successful computer companies require
both technological savvy and business skills; in his ideal world,
Silicon Valley would be populated solely by computer scientists with
nary an "alarming" venture capitalist or
"threatening" businessman in sight.
Judge Jackson's praise for innovation, however, might seem to
contradict his overall attack on successful businesses.
Technological innovation is a source of business success, is it not?
Although Judge Jackson recognizes that technological innovation
causes businesses to succeed, he believes that this innovation has
another, more legitimate, function. He writes: In many cases, one of
the early entrants into a new software category quickly captures a
lion's share of the sales What eventually displaces the leader is
often not competition from another product within the same software
category, but rather a technological advance that renders the
boundaries defining the category obsolete. These events, in which
categories are redefined and leaders are superseded in the process,
are spoken of as "inflection points." (Paragraph 59)
(Emphasis added.)
Innovation appeals to Judge Jackson not because it leads to the
creation of wealth, but rather because it tends to tear down the
market leader. He argues that the emergence of the Internet in the
mid-90s was one such "inflection point." (Paragraph 60)
Thus. the nature of his support for innovation explains his disgust
with Microsoft's defeat of Netscape: By introducing its browser
product sooner, Netscape should have replaced Microsoft--if
only Microsoft had not engaged in the "vicious"
commercial competition that ensured its continued leadership in the
computer industry.
These beliefs ultimately lead Judge Jackson to conclude that
Microsoft's "monopoly power" has "harmed consumers
in ways that are immediate and easily discernible?" (Paragraph
409) What are these alleged harms? Judge Jackson claims (wrongly)
that the integration of Windows 98 and Internet Explorer does not
allow employers to block employees from surfing the Web He asserts
that vast "confusion" reigns among consumers--but
beyond one or two offhand references throughout the rulin9, he never
explains this vague allegation Moreover, he claims, the integration
of Windows and Internet Explorer has created slower computers with
more bugs--as if computers are slower and less dependable than
they were two years ago! One might regard such mythical
"harms" as the laughable allegations of a
Luddite--if they did not come from a judge who wields the
coercive power of the federal government
Regardless of how trivial these alleged harms may be, Judge
Jackson seems sincerely to believe that Microsoft is acting as a
vicious monopolist Why? He answers this question in the last few
sentences of his ruling: "Microsoft's past success in hurting
such companies and stifling innovation ... occur for the sole reason
that [other companies and their innovations] do not coincide with
Microsoft's self-interest." (Paragraph 412) (Emphasis added.)
It takes Judge Jackson more than 200 pages, but in the end he names
the essence of his disgust for Microsoft--and the essence of
the antitrust laws In so doing, Judge Jackson exposes the
fundamental moral premise dictating his factual distortions, his
fallacy-ridden arguments, and his illogical conclusions: a hatred
for any form of self-interest The morality of altruism or self-
sacrifice is often presented as a form of benevolence, as if it
simply means being nice to other people. But the actual meaning of
this philosophy is a hatred of success. Under this morality, anyone
who achieves some extraordinary wealth or distinction owes it to his
fellow men to sacrifice what he has earned--including giving
away his whole fortune, as and when it is demanded by others. (This
is essentially what has been demanded of Bill Gates) But what about
those who have not achieved anything? They are entitled to welfare
programs, private charities, protective legislation, and a host of
other unearned benefits to be paid for by those who have succeeded.
In this system, anyone who earns success through his own effort is
to be punished, while anyone who hasn't exerted any effort and
hasn't attained any success is to be rewarded.
Far from standing for benevolence or good will, such a moral
outlook stands for destruction. This code of sacrifice demands an
assault on a Microsoft or a Bill Gates. By amassing so much money
and achieving so much success, they must be shirking their duty to
sacrifice to others. But it does not demand the destruction of the
Netscapes of the world because, by virtue of having faltered, they
are the "have-nots" who are entitled to benefit from the
sacrifice of their more-successful competitors.
Note that the ultimate standard of this moral outlook is not the
well-being of the poor, the weak, the downtrodden; has the welfare
state ever achieved these aims? Instead, the goal is the sacrifice
of the rich, the strong, and the powerful--not to achieve any
positive aim, but simply to punish them because they are rich,
strong, and powerful.
The altruist connection to antitrust is evident in the mere fact
that Judge Jackson could have applied the antitrust laws against
Microsoft without finding any harm at all. Although the ostensible
purpose of antitrust is to "protect consumers" from
alleged "monopolists," court decisions consistently
belie this fiction. In one of the first cases defining the doctrine
of antitrust, a large railroad trust defended itself against
prosecution by arguing that its price-fixing plan resulted in lower
prices for consumers. Since the stated purpose of the 1890 Sherman
Antitrust Act was to protect consumers, and since consumers actually
benefited in this case, the defendant logically concluded that the
antitrust laws should not apply to its practices. The Supreme Court
rejected this argument and ruled that the railroad trust was guilty.
In an illuminating statement, Justice Peckham declared: "in
this light it is not material that the price of an article may be
lowered. It is in the power of the [monopolist] to raise
it." \iii\
---------------------------------------------------------------------------
\iii\ United States v. Trans-Missouri Freight Association,
166 US 290, 324 (1897), emphasis added.
---------------------------------------------------------------------------
(Interestingly, Justice Peckham was an ardent conservative who
was one of the principal advocates of "freedom of
contract" in the 19th century--just as Judge Jackson was
a Reagan appointee. This proves once again that conservatives are
not reliable friends of freedom.) Continuing to apply the underlying
anti-success principle of antitrust, the Supreme Court ruled in 1968
that a newspaper company violated the Sherman Antitrust Act when it
fired a distributor for charging rates above an allowable maximum
price. The Court found that the newspaper "would not tolerate
over-charging" of its customers, and that it even agreed to
rehire the distributor if he "discontinued his pricing
practice"--that is, if he charged lower prices.
Nonetheless, the Court held that the benefit to consumers was
irrelevant in finding that the newspaper company acted in
"conspiracy" with its other distributors to set
prices--thus its actions were "an illegal restraint of
trade under Section 1 of the Sherman Act." \iv\
---------------------------------------------------------------------------
\iv\ Albrecht v. Herald Co., 390 US 145, 153 (1968).
---------------------------------------------------------------------------
Harm to consumers has nothing to do with the purpose of
antitrust. The antitrust laws are intended only to punish
"power"--but since economic power is earned on the
free market, this means that the purpose of antitrust is to punish
successful business practices. Antitrust case law is replete with
examples of companies being punished, not for any alleged harm, but
simply for having the acumen to remain successful in their
industries. A ski resort in Aspen, Colorado, was not only found
guilty in 1985 of violating the antitrust laws because it
successfully competed against its only rival; it was also held to a
"duty under antitrust law to help a
competitor." \v\ In the famous case against ALCOA in
1945, Judge Hand declared that "the successful competitor,
[[Page 28798]]
having been urged to compete, must not be turned upon when he
wins."
---------------------------------------------------------------------------
\v\ "Olympia Equipment Leasing Go. v. Western Untion
Telegraph Co.. 797 F.2d 370, 377 (7th Cir. 1986), citing Aspen
Skiing Co. v. Aspen Highlands Skiing Corp., 472 US 585 (1985)
(holding that monopolist has a duty to help a competitor).
---------------------------------------------------------------------------
But he contradicted himself in the very next paragraph,
concluding that ALCOA insists that it never excluded competitors:
but we can think of no more effective exclusion than progressively
to embrace each new opportunity as it opened, and to face every
newcomer with new capacity already geared into a great organization,
having the advantage of experience, trade connections, and the elite
of personnel.\vi\ ALCOA's ability and success, by Hand's reasoning,
was the deciding factor for finding it guilty of violating the
antitrust laws.
---------------------------------------------------------------------------
\vi\ US v. Aluminum Co. of America, 148 F.2d 416, 431 (2d
Cir. 1945).
---------------------------------------------------------------------------
Given this legal context, Microsoft was doomed before it even
set foot in the courtroom. The media, in an anti-Microsoft feeding
frenzy, often highlighted mistakes made by Microsoft's counsel
during the lengthy (and ongoing) trial. Yet Microsoft's attorneys
could have performed flawlessly, and Judge Jackson would still have
produced the same ruling. The reason is that Microsoft is an
extremely successful company; Gates is a unique combination of
technological genius and businessman, reminiscent of earlier
American giants like Thomas Edison Thus, it was irrelevant how hard
Microsoft's attorneys worked or how much intellectual vigor they
brought to their legal briefs and courtroom arguments. These things
were irrelevant because no army of lawyers could hide a single,
essential fact--the only fact necessary for applying the
antitrust laws: Microsoft succeeds at what it does.
The punishment doled out for success is paralysis. Judge Jackson
makes it clear that Microsoft must not be permitted to capitalize
upon its well-earned success. Because it has created values, it must
now relinquish them. Does it matter that Microsoft has earned its
success by producing a better product, by offering better incentives
to its business partners, and by providing better service to
software developers and Internet access providers? No.
Such facts do not matter to a man who believes that a successful
company has a moral duty to sacrifice to its lesser
rivals--especially when that man has the legal power to coerce
the company to obey its alleged duty. With every slanted term and
with every absurd conclusion, Judge Jackson practically screams his
unstated moral premise: Since Microsoft is a leader in the computer
industry, it must sacrifice the values it has created because it has
created them In his ruling, Judge Jackson claims to set out the
objective facts underlying his impending application of the
antitrust laws to Microsoft. But the only thing he manages to
establish is his own animosity towards commercial success. What
drives this animosity is the underlying moral justification for
antitrust: altruism's hatred of success.
The basis for Judge Jackson's ruling is not any
"monopoly" allegedly controlled by Microsoft; it is the
monopoly commanded by the morality of altruism over our culture.
That monopoly can be seen, unfortunately, in Bill Gates's sanction
of his own destruction in a comment immediately after the ruling, in
which he declares that "because of our success, we understand
that Microsoft is held to a higher standard, and we accept that
responsibility." \vii\ vii As long as this moral
monopoly remains unchallenged, legal doctrines such as antitrust
will continue to punish successful businesses.
---------------------------------------------------------------------------
\vii\ "Statement by Bill Gates on the Findings of
Fact," www.microsoft.com/presspass/ofnote/11
---------------------------------------------------------------------------
MTC-00030005
Henry R. Ochel, Jr.
1155 East 2100 South
Salt Lake City, Utah 84106
January 28, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
As a yahoo Internet user I would like to voice my opinion
concerning the Microsoft lawsuit. I urge you to support the
settlement and encourage the various companies to get back to the
business of technology research. It is my belief that millions of
dollars are being spent to stifle competition when these companies
should be focused on new markets and technology. Please do what is
in the best interest of consumers through out the United States and
settle this costly suit.
Sincerely,
Henry R. Ochel, Jr.
MTC-00030006
2035 Harbert Avenue
Memphis, TN 38104-5329
January 22, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
The intention of this letter is so that I may go on record, per
the Tunney Act, as supporting the settlement that was reached
between the Department of Justice and the Microsoft Corporation. The
court battles between these two entities went on for over three
years, and cost millions of dollars. This is time and money that
could have been put to much better use.
Microsoft did not get off easy by any stretch of the
imagination, and has had severe restrictions placed upon it. For
example, Microsoft will now have to turn over data and source code
that makes up internal interfaces in Windows' products. This is a
first in an antitrust settlement, and is not fair in that it makes
them forfeit their intellectual property. I think this goes too far.
Plus they will have to deal with a technical oversight committee
watching over Microsoft's every move and testing their compliance
with the terms of the settlement.
Enough is enough, this has gone on too long, cost too much
money, and is too harsh on Microsoft. End this now. I support any
settlement, even though it is not 100.*,'o fair, which ends the
litigation against Microsoft.
Sincerely,
Vincil C. Bishop, Jr
MTC-00030007
568 Scenic Hills Drive
North Salt Lake, UT 84054
January 21, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I have been following the Microsoft antitrust case for quite
some time now, and quite honestly this is getting a little out of
hand. I am pleased that a settlement has been reached in the matter,
and I believe it is in the best interest of the public to have the
settlement finalized rather than dragged out any longer. The economy
has suffered as a result of this seemingly endless suit, as has; the
technology industry. Naturally, consumers have begun to suffer as
well. Time is getting to be of the essence in this case, and I see
no reason to reject this settlement.
After extensive negotiations, Microsoft and the Department of
Justice reached an agreement on various terms that would prevent
antitrust violations on Microsoft's part in the future and allow
Microsoft's competitors more of an edge in the market. Microsoft
has, for instance, agreed to reformat future versions of Windows so
that non-Microsoft software will be able to be introduced and
supported within the Windows operating system. Microsoft has also
agreed to refrain from retaliation should sofa, are be introduced
into the market that directly competes with Microsoft programs. I
believe that these terms are fair; in fact, Microsoft has agreed to
conditions that extend to products or policies that the Court of
Appeals did not, in fact, find to be unlawful.
This settlement is, I believe in the best public interest. No
further action needs to be taken at the federal level. I urge you to
support the settlement and allow the Justice Department to move on.
Sincerely,
Hao Chen
MTC-00030008
Name: James W. Putt
Company: PFE Management
Voice Number: 445-2590
Fax Number: 445-2590
77 Mary Ann Lane
Wyckoff, NJ 07481
Date: Monday, January 28, 2002
Total Pages: 2
Subject: Microsoft Settlement
Name: Attorney General
Company: US Government
Voice Number:
Fax Number: (202) 3071454
Note: Please include my attached letter in you decision making
process.
Jim Putt
James W. Putt
77 Mary Ann Lane
Wyckoff, NJ 07481
January 28, 2002
Attorile3, General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I would like to see the antitrust lawsuit against Microsoft
settled. I feel that the case has been active long enough, and that
ending it according to the settlement reached in
[[Page 28799]]
November is fair. An important reason I would like to see the case
settled is because of the concessions Microsoft is agreeing to. I
have not felt positively about the company bundling Windows-related
programs onto computers, and the new removal features will give
users and computer manufacturers a wider range of choices.
Microsoft's competitors will now be able to more easily place their
own programs on the Windows platform. Because of that and the other
provisions in the settlement, I believe settling the suit is in the
best interests of the public.
Microsoft is approaching the settlement reasonably, and I urge
you to do the same. Please end the case without additional delay.
Sincerely,
James Putt
MTC-00030009
5235 W Pershing Avenue
Glendale, Arizona, 85304
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 205301
Dear Mr. Ashcroft:
I have long been a Microsoft supporter and was angry to see a
case being brought against them in the first place. Microsoft is a
company that is being punished for simply being too successful and
the government simply needs to keep their hands off of business. The
settlement, that has taken three long years to work out, I think
adequately covers many off the issues that people had with
Microsoft. Because of the terms of the settlement, Windows will have
greater compatibility with a wider array of products and relations
with other software developers won't be tarnished because of this
case. I feel that this case will improve things overall in the
software industry, if that is it is ever over and done with.
I know that there will he many letters coming in concerning this
issue, but I also know that a good deal of them will support
Microsoft. Please pay attention to how much the average person care
about Microsoft and end any further Federal litigation.
Sincerely,
Beverly Goyen
MTC-00030010
LTC Bernard R Buchta (US Army, Ret)
5100 Cameron Drive
Troy, Michigan 48098
.. E-mail: MrBuchta @ home.com
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
As a six-year teacher of PCs and the Windows operating system, I
would like to voice my strong support for settling the pending
Microsoft case.
My experience as a PC instructor and my 26-year's as a military
logistics officer has taught me the great value of standardization.
Standardization buys everyone a lot. And, after standardization is
achieved, "the payback is forever." Witness: When we go
to war, we want our bullets to fit into our allies' guns and rifles,
and want theirs to fit into ours. We want to be able to share,
substitute and interchange their artillery rounds, fuel, and
rations, etc., with ours. It's called being
"Interoperable." It's a great force-multiplier and keeps
costs down.
Standardization, by definition, creates efficiency. It also
makes for convenience and ease of use. Now, today, we need
standardization and efficiency more than ever. Therefore, the
proposed solution seems like a fair compromise that will provide the
most effective long-term results for consumers.
As seen with the International Standards Organization, the
uniformity of Windows* and its supporting products is an asset to
all computer users. This includes business and industry, schools,
home users, . .. just everyone!
Technology is complicated enough for the average person, so the
advantages Microsoft provides with the scope of their software
presence is immeasurable in the form of America's almost seamless
transition into the information age with young and old alike. Though
I did not respect the government's case, the restrictions imposed
with this deal are far more favorable than the possibility, of a
corporate break up and chaos within the computer world. Based on the
new, more even-handed approach of Microsoft toward competitors, and
those who do business with competitors, plus the implementation of
an objective technical committee of experts to ensure compliance, it
seem to me it would be in the best interest of all parties involved
to proceed with this agreement. This will save the consumer a great
deal of heartache. It will also permit continued interoperability in
future systems and software programs.
Thank you very much for your consideration.
Sincerely,
LTC, OrdC
US Army (Ret)
P.S.
You're doing a great job in the War on Terror.
Don't let them grind you down!
MTC-00030011
651 North Washington Street.
Wilkes Barre, Pennsylvania 18705
January 9, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to express my opinion in the recent settlement
between Microsoft and the US Department of Justice. While I am glad
to see Microsoft is not being broken up, I do believe some of the
concessions Microsoft are making axe not in the best interest of the
public. Microsoft must integrate their software with different
software makers' products to allow for more effective development of
windows interfaces and technology. But other concessions such as
contractual restrictions and windows design obligations seem to go
against intellectual property fights and patent laws.
I think that the IT sector is hurt badly enough without any
further litigation brought against Microsoft by the nine states who
oppose the settlement. I look forward m seeing Microsoft focusing on
business and watching one of the premier companies in the world keep
on thriving.
Sincerely,
Hudson Zhu
cc: Senator Rick Santorum
MTC-00030012
1651 Nocatee Drive
Miami, FL 33133-2540
January 28, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
We are writing to urge you to accept the pending deal in the
Microsoft case. This agreement offers the competition plenty to work
with to gain ground in the software market and should mean an end to
this costly government action.
Microsoft is one of the great success stories in the history of
U.S. business and should not be disbanded because their competitors
can't gain consumer support and market share. With the pending
settlement, the company has made extensive moves to give their
rivals more opportunities to succeed, from licensing its
technologies to disclosing its internal code for the Windows
operating system. The added verification of a three-person group of
experts to monitor the deal should provide added assurance of the
plan's long-term effectiveness.
Please make sure to confirm this court-mediated compromise at
the soonest time possible, as these steps provide plenty of options
for computer makers and give software developers more than enough
chance to compete. Any further action is unnecessary. Please make
the right decision.
Sincerely,
Daniel Riemer
Rebecca Weymouth
MTC-00030013
Brian Showalter
14713 W. 149th Court
Olathe, KS 66062-4623
bshowalter @ sbcglobal.net
January 28, 2002
U.S. Department of Justice
Antitrust Division
6O1 D Street, NW
Suite 1200
Washington, D* 20530-0001
Attn: Renata B. Hesse
Re: Comments regarding the Proposed Final Judgement
United States v. Microsoft
Civil Action No. 98-1232
As a United States citizen and experienced computer professional
who has at times been compelled to work with Microsoft products, I
would like to express my opposition to the settlement that has been
proposed for the USDOJ's antitrust lawsuit against Microsoft. I feel
that the terms of the settlement as currently specified are weighted
far too heavily in favor of Microsoft, and that they will do nothing
to prevent Microsoft from continuing to abuse its monopoly position
to stifle competition and lock customers into its
[[Page 28800]]
products. The terms also significantly underestimate the lengths to
which Microsoft has shown it is willing to go to root out loopholes
in any agreements it enters into and exploit them in such a way that
any intended restrictions on its behavior are effectively
neutralized, T also feel that the terms will do literally nothing to
ease the market barrier to entry for new products, particularly
open-source products such as the Linux operating system, which may
happen to directly compete with Microsoft's offerings.
There are a number of problems with the settlement which others
have outlined and on which I will not 9o into further details.
However, I am dismayed by the extent to which the proposed
settlement focuses almost completely on attempting to restrict
Microsoft's behavior on the Windows desktop and middleware
platforms, to the virtual exclusion of server platforms and other
operating system products that are offered or soon to be offered by
Microsoft. In particular, the name "Windows" is
mentioned 56 times in the document, yet no mention is made of the
embedded operating system market or of Microsoft's explicitly stated
intention to replace the Windows desktop and server platform with
the .NET initiative. Furthermore, the definitions of
"operating system," "personal computer,"
"Microsoft Platform Software," and "Windows
Operating System Product" in the document refer entirely to
desktop operating systems intended for use by a single user at a
time. This loophole would have the effect of rendering Section III.A
moot in its entirety should Microsoft attempt to retaliate against
an OEM that is attempting to market a competing SERVER platform on
its products. Additionally, the proposed settlement does nothing to
preclude Microsoft from dropping the Windows brand name altogether
and continuing their customer lock-in, competition-stifling and
monopoly-extending behavior on a similar but differently named
platform.
Dan Kegel has done an excellent analysis which may be found
online at (http://www.kegel.com/remedy/remedy2.html). Mr. Kegel's
site also contains links to several other very compelling analyses.
Due to the flaws which I and others have pointed out, the settlement
as it is currently written does not serve the public interest and
should not be accepted without considerable revisions to ensure that
the market is not tilted unfairly in Microsoft's favor. Thank you
for your time and for considering my point of view.
Sincerely,
Brian Showalter
Programmer/Analyst
MTC-00030014
Joyce Newell, M.S.W.
Licensed Clinical Social Worker
facsimile transmittal
Joyee Newell L.C.S.W
2729 Blair Stone Lane
Tallahassee. Fl. 32301
Phone (850) 871t-0279
Fax (850) 878-0459
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
It has been three long years of litigation between Microsoft and
the Department of justice and quite frankly it is tirr a to put this
issue to rest. I am an avid supporter of Microsoft and am very
pleased that the settlement is acceptable at the federal level hut
am puzzled as to the persistence of the nine remaining states, Is it
not obvious to them the negative effects that this continued
litigation has on the economy and on the Technology industry? I
trust that; my views and those of others will contribute to the
expeditious settlement of this matter.
Microsoft's innovations have done much to enhance productivity
both on and off the job and is doubtless an Industry icon. This
company has made significant contributions to the economy and the
overall growth of our country and the sooner this matter is settled
the sooner Microsoft is able to rededicate their full attention to
doing what it does best--innovate Looking closely at the
details of the settlement, we will see that Microsoft has already
done very much to honor the terms. They have agreed to make their
protocols and intellectual property license available to competitors
and have made it easier for competitors to promote non-Micro, soft
software within windows. The list of measures taken by Microsoft
goes on and on and is a direct indication of their willingness to
comply.
Sincerely,
Paul Newell
1362 Grovaland Hills Drive
Tallahassee, FL 32311
MTC-00030015
Mail Boxes Ete.
330 Old Steese Hwy
Fairbanks. AK 99701
(907) 452-2221 Phone
(907) 45%8329 Fax
Facsimile Transmission
481 Valley View Drive
Fairbanks, AK 99712-1327
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
January 24,2002
Dear Mr. Ashcroft:
Winter greetings from Fairbanks!
I am sending you this e-mail to register my support on behalf of
the settlement in the Microsoft antitrust case. This is the best
resolution available to America now due to a bad situation. The
settlement required Microsoft, the attorney generals from the states
involved, and the Department of Justice, to state their differences,
make concessions, and reach compromises in front of the Federal
judge appointed in an effort to avoid countless days of court
battles and appeals. In the settlement, Microsoft basically kept
itself intact in exchange for giving up its legal rights. Microsoft
will release from copyright the software codes of the various
internal interfaces and protocols allowing servers to interoperate
for its Windows operating system programs. Microsoft must license
its other software copyrights and patents to any company that wants
to use them on reasonable terms. The ability of a business to enter
into exclusive marketing agreements is often very important to its
success. Microsoft will no longer be able to contract with computer
builders to use its Windows operating system exclusively. Monitoring
of the settlement terms by software engineering experts will make
sure that the agreement is followed.
The settlement is in the best interest of America. Please use
your best efforts to see that the Federal judge approves it. Thank
you for your consideration and support.
Sincerely,
Bill Moberly
MTC-00030016
PO Box 1419
Missoula, MT 59806
Ph: 406-541-4545
Fax: 406-54.1-4543
To: Attorney General John Ashcroft
From: Larry D. Williams
Fax: 1-202-307-1454
Date: 1/28/2002
Re: Microsoft Settlement
CO:
PO Box 14-]9
Missoula, MT 59806
Certified Technologies Incorporated
Phone: 406-541-4545
Fax: 406-541-4543
Toll Free: 866-541.-4545
620 W Addison
Missoula, MT 59801
January 16,2002
Attorney General 3ohn Ashcroft
Justice Department
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
Microsoft revolutionized the computer age with the advent of its
Windows operating system. The standardization and user-friendly
operability offered by Windows has a wide appeal and is what pushed
Microsoft to the front of the pack. Microsoft's success is due to
great innovation and clever products, not surreptitious antitrust
activity.
I am content with the pending settlement reached by Microsoft
and the government because it is fair. The settlement provisions,
such as Microsoft agreeing to share its Windows source code with
competitors, represent a very positive development. It is important
because they are also interconnected and comprehensive. Microsoft
not only will avoid retaliating against software developers who
promote software that competes with Windows, but also the computer
makers who ship the aforementioned software are also covered.
Together, these measures will lead to an increase in competition and
therefore remedy the government's primary "beef" with
Microsoft.
Everyone wins! Thanks.
Sincerely,
Larry Williams
Controller
Certified Technologies, Inc.
MTC-00030017
HIMALAYA ENTERTAINMENT
Renata H??
The Attorney, Antitrust Division
[[Page 28801]]
Department of Justice
801 D Street, NW, Ste, 1200
Washington, DC 20530
Dear Ms. Hesse:
I am writing in support of proposed consent decree between the
D??trment of Justice and I believe It represents a fait ??ment for
both sides.
The lawsuits here been dragging along for nearly four years now
and have cost taxpayers $36 million--enough is enough. Let's
move forward with this agreement good of the country. Please feel
free to contact me for more information, but my position is
clear--let Microsoft get back to work and stop w??ting any more
tax do?? in pu?? of these lawsuits.
MTC-00030018
Renata Hesse
Trial Attorney, Antitrust Division
Department of Justice
601 D Street, NW, Ste. 1200
Washington, DC 20530
Dear Ms. Hesse,
This letter is to express my strong support for the proposed
settlement between the Department of Justice and Microsoft, It is a
fair settlement to the antitrust lawsuit. Fair means that it is a
compromise which all sides can live with.
This issue has been going on for more than three years. It has
gown into multiple lawsuits and the millions of dollars. The
proposed settlement gives the opportunity to close part of the
issue. If both the DOJ and Microsoft have reached an agreement,
let's move forward for the good of the economy and in the bigger
picture, the good of the country.
Sincerely,
Katteena Salgado
MTC-00030019
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
During these times of economic strain, it is important for us to
watch our spending, and to focus on production. After hearing that
the recent Microsoft settlement may be even further delayed, I felt
the need to write you. After years of well thought out negotiations,
it is time to let the terms of the settlement speak for themselves.
I support the settlement as it stands
The terms of this settlement have teeth. Not only does Microsoft
make various concessions to help promote non-Microsoft software, but
they have also agreed to be monitored throughout the entire process.
The settlement will require Microsoft to share information detailing
the internal interfaces in Windows with its competitors, allowing
them to more easily install their own software on machines that use
Windows It is obvious Microsoft is willing to work with the many
companies in the IT sector so that everyone can get back to
business.
I urge you to help get the economy back on track. The delay of
this settlement can only slow down our growth in the technology
industry. The finalization of this settlement would be a step in the
right direction.
Sincerely,
Paul W. Budd
MTC-00030020
January 22, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I would like to go on record as supporting the settlement that
has been reached between the Department of Just?? a and Microsoft.
The settlement finally brings an end to the three-year-old antitrust
law suit that has been partly responsible for the sharp decline in
America's economy. I can remember three years ago when the antitrust
skill against Microsoft was first announced.
The stock market and economy immediately started to go down, and
now we are in the middle of a recession I have no idea how
economists working for the government did not notice the correlation
between these two events. In any case, the settlement is fair. The
increased information shoring and non-retaliation provisions should
be enough to satisfy even Microsoft's harshest crities.
The settlement is the best thing that has come out of the
??titrust su?? between fi?? Department of Justice and Microsoft, and
I fully su?? pert it.
Sincerely,
W??mda Bel??
MTC-00030021
January 22, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Attorney General Ashcroft:
As an active computer user, I would urge you to settle the case
against Microsoft. I have heard repeatedly of the unfair advantages
that Microsoft has over its competitors and believe this to be a
ploy on the part of Microsoft's competitors in the industry.
I have owned a Palm Pilot for over five years while using
Microsoft Outlook on my desktop computer. I have never had any
synchronization problems with the two software programs. The charge
that Microsoft is trying to squash its competition by making
software that does not work with other programs is unwarranted.
Please work to settle this case as quickly as possible so that all
companies involved can focus their time and efforts on software not
law suits.
Sincerely,
Barney Chapman
MTC-00030022
Holme Roberts & Owen LLP
Paul F. Moxley most VP @ hro.com
Attorneys at Law
111 Last Broadway Suite !100
Salt Lake City; Utah 841I? "5233
Tel (??1)521-5800 Fax (??01)521-9639 www.??ro.com
Salt Lake City
Den??r
Bou??er
Colorado Spring,
London
January 28, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoj.gov
VIA FACSIMILE COPY TO: (202) 307-1454 or (202) 616-9937
1ST CLASS MAIL TO:
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B. Hesse Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
My comments are made with regard to the proposed settlement in
the Microsoft v. DOJ case. I believe it would be improper to allow
Microsoft to enter a settlement agreement that does not guarantee
that future antitrust violations will be prevented. Microsoft has
been adjudged to have violated antitrust laws. Its conduct was so
pervasive that the original trial court judge determined that break-
up was the only remedy. That decision, but not the decision that
Microsoft violated antitrust laws, was reversed on appeal to the
Court of Appeals. The case is now back before a new trial court
judge following the U.S. Supreme Court's decision not to review the
case. The purpose of the remand is to determine the proper sanctions
to penalize Microsoft for past conduct and to prevent future
violations.
This determination should be made by the court and not by the
parties. I am informed that the proposed agreement contains critical
provisions that do not go far enough or that place too much
discretion into Microsoft's hands. Failure to impose proper and
adequate sanctions will set an unfortunate precedent for future
antitrust cases and will do little to resolve the issues in the
Microsoft litigation.
The court should resist the urge to adopt a settlement and hold
hearings to make a proper determination.
Respectfully,
Paul T. Moxley
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030023
Casey ]ones
January 28, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
The Justice Department and State Attorney General offices' case
against Microsoft was arguably unwarranted from its commencement.
As a concerned and active voting citizen, I am focused on how to
keep taxes at a minimum in our state as well as serving as somewhat
of a watchdog for the use of taxpayer money at the state level.
There has been no proof of consumer harm from the monopoly
behavior of which this technology company is being accused. Yet,
this suit continued seemingly gaining steam with every new wave of
national media attention that came with it. At present,
[[Page 28802]]
consumers are no better or worse off than when it all started.
Unless you consider their position as taxpayers, in which case they
are much worse for the wear.
More than $I million has been spent by Iowa's state attorney
office alone. Millions of tax dollars have also been spent
cumulatively by the other states involved in the case and tens of
millions more by the federal Justice Department.
Now after cycling through mediators and various bumps in the
road toward bringing this case to an end, there is now a settlement
proposed. The proposal is one that gives enough to satisfy both
sides and addresses the consumer concerns. I urge you to accept it
for the sake of the American taxpayer.
Sincerely,
Casey Jones
Attorney at Law
7216 Wilton Drive NE
Cedar Rapids, IA 52402
MTC-00030024
Angie Weible-Jones
January 27,2002
Renata Hesse
Trial Attorney
Anti-Trust Division
US Department of Justice
601 D Street, NW
Washington, DC 20530
Dear Ms. Hesse:
As an individual who owns her own business, I am very interested
in seeing the Microsoft case brought to Its end. I congratulate the
US Department of Justice for working hard to find a sound way to
close this chapter In American legal history. One of the most
amazing things about the technology industry Is that we are only
just beginning. The innovations and great strides yet to come should
be exciting to all of us. However, the costs and risks of Innovation
are extremely high. Investors and creators must have the confidence
and the will to move forward,
When the move was made against Microsoft, It was felt throughout
the entire industry, This action coincided with falling technology
stocks and loss of investment capital for start-up companies. The
entire Industry felt the blow and its suffering is detrimental to
our nation, When our economy was booming there was much talk about
the New Economy and the leading role technology stocks had this
economy. But this all ended about the time the government threatened
Microsoft. This action raised a cloud of uncertainty around the
technology industry and many Investors decided it was best to wait
it out. It is interesting that when technology stocks began to
slide, it hurt the entire market, If tech stocks rebound it can only
be a positive sign for our economy, Investors may regain their
confidence if the government ends Its case against Microsoft,
Additionally, when the technology industry slows down if no
longer has the free??? case brought to an end. It is In all of our
best Interests.
Sincerely,
Angie Weible-Jones
7216 Wilton Drive NE
Cedar Rapids, Iowa 52402
MTC-00030025
Ronald Skaggs
22801 N Briarwood Drive
Edmond, OK 73003.9425
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I think the three-year lawsuit against Microsoft is flawed and
unjustified. Microsoft has not done anything that can be called
monopolistic. Instead, Microsoft has done wonderful things for our
nation, including creating jobs and wealth, as well as making
technological breakthroughs. I think it is ridiculous that Microsoft
is being forced to disclose interfaces that are internal to Windows
operating system products. Microsoft has spent vast amounts of time
and money to develop and innovate. They should not be penalized for
being the most successful company in the IT industry.
I urge your office to finalize the settlement, although it is
flawed, because the alternative of further litigation would be
detrimental to our nation's IT sector and economy. I believe it is
time to discard the liberal Democrat notion that every competition
has to end up in a tie. Thank you.
Sincerely,
Ronald Skaggs
cc: Senator Don Nickles
MTC-00030026
BOB L JOHNSON
4276 EAST SOUTH SHORE DRIVE
ERIE, PENNSYLVANIA 16511
8995380
January 8, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr, Ashcroft:
I would like to tell you how I feel about the Microsoft
antitrust case. I am in favor of the settlement and do not agree
with the federal government's role in this whole issue. Under the
settlement, Microsoft will have to share information with its
competitors regarding the internal workings of Windows, allowing
them to install their own programs on the operating systems. I am
retired and use computers to communicate via email. Microsoft has
done a fine job of" bringing technology into the homes of
everyday people, not to mention the thousands of jobs that the
company has created. This lawsuit is a waste of tax dollars and I
urge you to put an end to any federal action against Microsoft.
Thank you for hearing my opinion on this matter, and again, I
support the settlement and hope to see it implemented as soon as
possible.
Sincerely,
Bobby Johnson
cc: Senator Rick Santorum
MTC-00030027
STA America
225 Lennon Lane. Suite 110
Wa??nut Creek, CA 84588
FAX 925.955-9993
January 23, 2002
Renata Hesse Trial Attorney, Antitrust Division
Department of Justice
601 D Street, NW, Ste. 1200
Washington, DC 20530
Dear Ms. Hesse:
I write in support of the proposed comet decree between
Microsoft and the Department of Justice, After four years and $35
million spent pursuing the lawsuit, it is tune that the country move
On to more pressing business.
Microsoft is being adequately reprimanded by the proposed
agreement, as the settlement would address many of the major charges
against Microsoft. The company would be required to provide
technical details to help rivals make products compatible with the
Windows operating system. It also bans exclusive* contracts with
computer makers that put rival software vendors at s disadvantage.
Prolonging the settlement would deliver a severe blow to
California's already shaky financial situation, as our state is
expected to pay the lion's share of the remaining trial costs. This
is a fair deal--but more importantly, it is time to put tiffs
lawsuit behind us for the good of taxpayers. I urge you to move
forward with the agreement.
Sincerely,
Robert Branzuela
MTC-00030028
CENTRAL CALIFORNIA
HISPANIC
CHAMBER of COMMERCE
Serving the Central Valley Business Community from Stockton to
Bakersfield Since 1984
Renata Hesse
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
Our chamber finds the ongoing pursuit of Microsoft through
litigation a very bad precedent to set for business in America
Microsoft has succeeded on a global scale and revolutionized the way
America, and the world does business.
The business community has always supported the government in
actions that best serve the interests of the nation. With that in
mind we ask you to take the settlement now on the table between
Microsoft and the Federal Government. Ultimately, this long and
expensive law suit is proving detrimental to Microsoft, tax payers
and for the business community at large. You have the opportunity to
bring it to a close. Again we strongly urge you to accept the
settlement.
Thank you for your time on this issue.
Sincerely,
Antonio Gastelum
Executive Director
Central California Hispanic Chamber of Commerce
1900 Mariposa Mall, Suite 105. Fresno, California, 93721
(559) 485-6840 office . (559) 485-3738 facsimile .
(559) 977-7030 mobile/m??g
cchispanicchamber @ sbcglobal.net
[[Page 28803]]
MTC-00030029
Fernandez Translation Services
January 23, 2002
Renata Hesse
Trial Attorney, Antitrust Division
Department of Justice
601 D Street, NW, Ste. 1200
Washington, DC 20530
Dear Ms. Hesse:
I am a translator and a bilingual aide in the Alhambra School
District, and have been working in education for more than 15 years.
I know the problems of our school system first hand, and know that
increased funding can go a long way towards improving the quality of
education our children receive.
That's why I can't believe our federal government has spent $35
million of taxpayer dollars on the antitrust lawsuit against
Microsoft. That money is sorely needed in our schools, and could
have gone to solve real problems facing our children. The only
positive note is the proposed consent decree between the company and
the Department of Justice. If the government and Microsoft have come
to an agreement, I say let's ratify it and get on with Solving real
problems facing real people. I support the proposed consent decree
not only because it addresses the major charges against the company;
it allows our leaders to get back to work on the greater issues
affecting ordinary citizens.
Sincerely,
Sylvia Fernandez
304 N. Hidalgo Ave., Alhambra, CA 91801 (626) 300-0810
MTC-00030030
Gino's Primo Pizza
"Serving, Southern California for Nearly 20 Years"
January 23, 2002
Renata Hesse
Trial Attorney, Antitrust Division
Department of Justice
601 D Street, NW, Ste. 1200
Washington, DC 20530
Dear Ms Hesse:
As a small business owner, I don't want the government telling
me how to run my business--but I understand the validity of the
antitrust lawsuit against Microsoft. I also understand that the
lawsuit has stretched out to four years--and has cost taxpayers
$35 million.
I don't want my tax money going to waste--I want to see it
go to help our schools and our healthcare system. I would also like
to see it help end the energy crisis--something that directly
impacts my business. So that's why I'm writing to support the
proposed consent decree between Microsoft and the Department of
Justice.
From my understanding, it has a little something for
everyone--the major issues against the company are addresses
without preventing Microsoft from innovatin8 new technology or
responding to the needs of its customers.
Let's put this lawsuit behind us and get on with the nation's
business. Feel free to call me if you have any questions.
Sincerely,
Joseph Harvey
Owner
717 W. Las Tunas Dr., San Gabriel, CA 91775 626.576.5945
MTC-00030031
Thea Perrino, MPH
206 Chumalia St., Ste. 3F
San Leandro, CA 94577
510.483.6143
January 23,2002
Renata Hesse
Trial Attorney, Antitrust Division
Department of Justice
601 D Street, NW, Ste. 1200
Washington, DC 20530
Dear Ms. Hesse:
As an alcohol prevention specialist working with at-risk youth,
I am deeply concerned that taxpayer dollars have been used to draw
out the antitrust lawsuit against Microsoft for almost four years.
The $35 million spent pursuing the suit could have gone a long way
towards funding youth programs throughout the country.
I understand that a proposed consent decree has been reached
between the Department of Justice and Microsoft. I support this
agreement--it's time that we let everybody get back to work
solving the real problems facing our nation.
Please feet free to call me if you have any questions.
Sincerely,
Thea Perrino
MTC-00030032
Jennifer Zago, RN
360 S. Euclid Ave., #332
Pasadena, CA 91101
626.584.6769
January 23, 2002
Renata Hesse
Trial Attorney, Antitrust Division
Department of Justice
601 D Street, NW, Ste. 1200
Washington, DC 20530
Dear Ms. Hesse:
As a registered nurse, I have firsthand knowledge of our
nation's woeful healthcare system. Many of my colleagues are
confronted with shortages and inadequate supplies on a dally basis,
That Is why I am deeply troubled by the federal government's
continued pursuit of the Microsoft lawsuit. These lawsuits have been
drawn out for four years, costing taxpayers upwards of $35 million.
That money is sorely needed in our healthcare system, and could have
been put to good use by doctors and nurses throughout our country.
I understand that there is now a proposed consent decree on the
table between Microsoft and the Department of Justice that would
address many of the major charges against the company. I support
this agreement. It's time that we let everybody get back to work
solving the real problems facing our nation, like fixing our
healthcare system and getting more funding to hospitals,
Please call me if you have any questions.
Sincerely,
Jennifer Zago
MTC-00030033
Edward D. Failor, Jr.
2610 Park Avenue
P.O. Box 747
Muscatine, Iowa 52761
Renatta Hesse
Antitrust Division
Department of Justice
601 D Street, NW--Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
I am writing to express my support for the settlement Judge
Kollar Kottely is considering to end the US Department of Justice's
antitrust suit against Microsoft.
As Vice President of Iowans for Tax Relief, I have monitored the
suit against Microsoft from its inception. I stand in stark
opposition to my Attorney General Tom Miller's dogged pursuit of it.
I believe this case has been a waste of taxpayer dollars at the
state and federal level. It has also been an albatross around the
neck of the technology industry, making it unattractive to investors
and uncertain for companies making long-term decisions.
It is important to the high tech industry, taxpayers and
investors to end this case as soon as possible. The settlement that
the DOJ, nine states and Microsoft have agreed to is a very good
deal for the government and achieves what is most important: ending
the lawsuit.
Taxpayers have been bearing the negative impacts of this case
from the beginning. They have been funding the suit at the state and
federal level--without their consent. They have seen their
retirement funds suffer through the downturn the stock market has
taken since the ruling for a breakup of Microsoft was made back in
the Spring of 2000.
I urge Judge Kollar Kottely to approve the proposed settlement
in this lawsuit in order to stop the needless damage done to
American taxpayers throughout this process. Thank you for accepting
my comments as part of the court record.
Sincerely,
Edward D. Failor, Jr.
Vice President
Iowans for Tax Relief
MTC-00030034
Jamie Hopkins
2610 Park Avenue
P.O. Box 747
Muscatine, IA 52761
Renatta Hesse
Antitrust Division
Department of Justice
601 D Street, NW--Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
I support approval of the proposed settlement Judge Kollar
Kottely is reviewing that would bring closure to the federal
government's antitrust case against Microsoft Corporation.
As a grassroots taxpayer advocate, I know firsthand that ending
this suit is a priority for taxpayers across Iowa. It is an issue
that comes up at many meetings and in telephone conversations with
activists on a regular basis.
Taxpayers want to see the suit ended, not just to end the waste
of their money, but also to send the message that the marketplace is
where decisions about the success and failure of businesses should
be made and not courtrooms.
[[Page 28804]]
I am hopeful that the judge will approve the settlement and
bring an end to waste of federal taxpayer dollars that have been
spent on this suit. I appreciate the opportunity to register my
opinions on this important issue.
Sincerely,
Jamie Hopkins
Development Director
Iowans for Tax Relief
MTC-00030035
Jeffrey R. Boeyink
EXECUTIVE VICE PRESIDENT
IOWANS FOR TAX RELIEF & TAX EDUCATION FOUNDATION
2610 PARK AVENUE
MUSCATINE, IA
52761 319-284-8080
January 28, 2002
Renata Hesse
Trial. Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
I am writing to submit my position on the Microsoft antitrust
case. There was no outcry from taxpayers for action in this, case.
Rather, competitors implored the * federal government to make
sweeping regulatory decisions picking winners over losers in the
market.
Iowa attorney general alone spent more than 3,000 hours working
on this landmark antitrust case filing a federal court document
asking for $1.1 million to reimburse "the. state* for the
time. Altogether, 19 states tendered a $13 million tab from lawsuit
expenses and it has been estimated that the federal government
spent, some $30 million.
Nine of the states, the Department of Justice, and Microsoft saw
fit to settle. There are many more important issues facing. America
and taxpayers deserve to have their funds utilized in a responsible
manner, which best serves them With a fiercely competitive
technology industry Microsoft, like* any business or individual,
should be afforded economic freedom.
I urge you to deliver closure for taxpayers in this case and
support the proposed settlement.
Cordially,
Jeff. Boeyink
Executive Vice President
Iowans for Tax Relief
MTC-00030036
Richard R. Phillips
Attorney-at-Law
300 E. Second
Muscatine, IA 52761
January 28, 2002
Attention: Renata Hesse
Judge Kollar Kottely
U.S. Department of Justice, Antitrust Division
601 D Street, NW, Suite 1200
Washington, DC 20530
Dear Judge Kollar Kottely:
I am baffled by the fact that the Microsoft antitrust suit has
gone this far. Unfortunately, the lawsuit has had serious
repercussions not only on Microsoft, but also on the economy and the
tech sector in particular. It is time to bring closure to this case
so the economy can begin to rebuild.
Even through the economic turmoil this case has created, the
public has seen a variety of new products introduced by many
different companies. There is real competition in the software
industry. So many of us are now plugged into the web, a service that
actually bombards us with free software and offers from hundreds of
software companies. Many of us have unexpectedly become dependent
upon high tech in our work and personal lives and are using products
from a wide variety of companies.
Just think how much more innovation and creativity there will be
in software and hardware when this lawsuit is ended and the threat
of government intervention in the tech marketplace is shelved. I
hope you will see to it to approve the settlement in this case. I
believe it to be in the best public interest.
Sincerely,
Richard R. Phillips
MTC-00030037
January 28, 2002
Ms. Renata Hesse
Trial Attorney Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
Free enterprise is what made our country a leader in so many
sectors of the global marketplace. Today, the nation's has economy
weakened and we are facing serious economic concerns. During this
difficult time, many of us are tightening our belts and curtailing
our own personal family budgets. I hope you will agree that now is
the time, to do the same within our government.
In the antitrust case against Microsoft the total to the federal
government as of July 2000 was an estimated $30 million dollars in
taxpayer funds. The suing states spent millions of state tax dollars
on top of that.
The majority of participants reached a long awaited resolution
in this case. We applaud those state attorneys general who signed on
to this proposed settlement--unfortunately our state attorney
general is notably absent .from that list. Nevertheless, settling
this case now is the right thing to do for American taxpayers.
Those who came together on this settlement have found a
conclusion that will have positive effects for the industry and
consumers--those for whom the case was originally brought
about. I urge you to approve, the settlement before you.
Thank you for your time and careful consideration.
Cordially,
Edward D. Failor
President
Iowans for Tax Relief
MTC-00030038
DARTMOUTH HITCHCOCK MEDICAL CENTER
1 MEDICAL CENTER DRIVE
LEBANON, NEW HAMPSHIRE
03766
FACSIMILE TRANSMISSION
DATE:1/28/02
FAX #:1-202 307 1454
TO: MS ??
ATTENTION:
NUMBER OF PAGES (INCLUDING COVER):2
FROM:??
SECTION OF GIM
RETURN FAX #: (603) 650-8770
RETURN TELEPHONE #: 603 ??
Mark Countermarsh
39 Evarts Read
PO BOX 37
North Hartland, VT 05052
January 27, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Attorney General Ashcroft:
This letter is to ask you to give your support to the proposed
agreement between the Department of Justice and Microsoft. I
understand there is a 60-day period in which public comment is
allowed, and I feel it is my duty to encourage your support of this
agreement. There is no need for any further Federal action.
Microsoft has provided so much to this country through creating
jobs and opening the way for technological innovation in the
software industry. I don't feel it should be punished for its
success at the expense of weak competition. The agreed terms provide
a major opening for other players to build market share and should
be quite satisfactory to Microsoft's opponents. Software developers
will benefit from access to Windows internal interfaces and server
protocols and will even be able to license Microsoft technology
while marketing themselves without obstacles due to computer maker's
business limitations,
Please move forward with this plan and allow the competition to
prove their worth in the software market without the industry
disruption of a corporate break up. Our economy will respond, and so
will the general public, to this very fair decision being
implemented without further delay, I appreciate your support.
Sincerely,
Mark Coutermarsh
MTC-00030040
Microsoft"
January 26, 2002
Attorney General Ashcroft, USDOJ
950 Penna. Avenue, NW
Washington, DC 20530-0001
Dear AG Ashcroft,
I believe that your decision to settle this Microsoft suit was a
wise one. Anytime that our government takes upon itself the rather
extreme position of suing a private business is serious indeed. It
is important for our government to encourage innovation and
creativity through incentives, rather than discouraging them through
convoluted, politically expedient lawsuits. It seems as if this case
may have had less actual legal merit than it first appeared. In
these days, we should remain especially vigilant at concentrating on
far more important issues like national security and budgetary
problems. It is good for us to settle this case and move on to these
more important matters. The settlement does an excellent job of
answering for all the problems that competitors brought against
Microsoft. By
[[Page 28805]]
allowing manufacturers their own say in how to configure Windows and
competitors more access to source code that will improve their
programs" ability to operate in Windows, Microsoft is going
well beyond what has been asked of them.
Thank you for your foresight and wisdom in this matter and thank
you for taking the time to review my opinion in this matter. It is
about time for the Justice Department ask the people who will be
most affected by this decision how it will impact them,
Sincerely,
Clark Spencer
MTC-00030041
Craig Schannaman
P.O. Box 2001--??
January 22, 2002
R?? Hesse, Trial Attorney
A?? Division
U.S. Department of Justice
601 D Street NW, Suite 1.200
Washington, DC 20530
Dear Ms. Hesse:
My interest in the antitrust case, U.S. v. Microsoft, comes from
my concerns as a former state legislative leader and as a satisfied
customer of Microsoft products. It is no secret that Microsoft is in
an incredibly competitive and combative business climate. Microsoft
has maintained its position as the number 1 creator and distributor
of office systems software by making sure its customers get the most
innovative systems at the best prices. Perhaps this is the reason
why this four-year-old case did not show that consumers wars getting
the poorly served by Microsoft's business decisions.
I am very concerned about the precedents which could be set if
this settlement agreement is not approved, and the ball is again
tossed in the air to see where it may land next. Would Microsoft be
forced to give away its intellectual property, thus removing its
technological edge over its competitors? Is the government going to
begin micromanaging the affairs of information technology research
and development, thus making it virtually impossible for any IT firm
in the United States from maintaining a world leadership status?
After four years in the courts, this case should have examined every
possible aspect of Microsoft's business pr??tices. I trust that the
U.S. Department of Justice and nine of the 18 states in this case
used good judgment in reaching their settlement.
I hope that it is allowed to end this case and allow the
benefits of the settlement to help kids in disadvantaged schools.
Thank you for considering any letter in this public commentary on
the settlement.
Sincerely,
Craig Schaunaman
MTC-00030042
JOHN L. WILDS
LAWYER
3RD FLOOR THREE HUNDRED BUILDING
300 NORTH ??AKOTA AVENUE
SIOUX FALLS, SOUTH DAKOTA 37104-6026
TELEPHONE (603) 332.1822
TELECOPIER (605) 332-0304
January 25, 2002
Renata Hesse, Trial A??orney
Antitrust Division
U.S. Department of Justice
601 D Street NW, Su?? 1200
Washington, DC 20530
Dear Trial Attorney Hesse:
I am submitting my comments to support the settlement in U.S.
vs. Microsoft Corporation, because the settlement has answered all
of the significant issues which have survived the court process so
far. While there are those who oppose this settlement, it would be
senseless to turn it away. I understand it has taken the Justice
Department four years and about $40 million to reach this point. It
is time for this case to be allowed to come to a conclusion.
No doubt, Microsoft's competitors will continue seeking any
means to gain an advantage over Microsoft inside the marketplace and
outside the marketplace. Bringing issues to court is an appropriate
action when there are significant issues to be answered.
I think this case has answered these issues, and now it is time
for the case to be ended. A decision to not accept the settlement, I
believe, would be perceived as an invitation to a fishing expedition
which will not serve justice for Microsoft or any other company
which is involved in the creation and marketing of new software
technologies.
I appreciate your attention to my remarks.
Very truly yours,
John L. Wilds
MTC-00030043
01/28/2002
Renata Hesse
Trial Attorney
Antitrust Division
U.8. Department of Justice
6Ol D Street NW--Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
The best interests of the future of Information technologies are
found in the settlement agreement between the Microsoft Corporation
and the U.S. Department of Justice. The antitrust case, to a large
extent, plowed new ground in the development of regulating a company
like Microsoft, which has moved very quickly in the development of
its software systems. I have been told the settlement answers the
issues that prevailed in the court process.
As a state legislator, I am particularly interested In the
benefit to schools with high percentages of low-income children and
families. South Dakota has a number of school districts that would
be eligible for the supply of hardware, software and support in this
offering. I think it is a fair method of resolving a case like this,
and it will matter quite a lot to the future of the children
included in these school districts.
I appreciate your attention to my statements.
Sincerely
Jim Hundstad
State Representative
Logislative District 2
MTC-00030044
South Dakota Legislature
State Capitol,
500 East Capitol,
Pierre, South Dakota 57501-5070
Senate Chamber
Renata Hesse, Trial
Attorney Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
January 28, 2002
Dear Ms. Hesse:
The settlement agreement in U.S. v. Microsoft can result in a
major benefit to education in South Dakota because of the children
who would be identified to receive computer systems. I understand
the settlement terms seek to send the systems to school districts
whore there are disproportionate numbers of children who qualify for
the fedela1 school lunch aid program. In South Dakota, there are
quite a few school districts which would qualify under that
criteria.
State government in South Dakota has focused on making internet
use ubiquitous via the Wiring the Schools Program. Our state seeks
to use long distance learning technologies to make sure our rural
school districts are on even ground with, the wealthier urban school
districts. The availability of computer systems via the settlement
will make this technique a reality for more and more children,
My letter is sent to support the settlement for the benefits it
would bring children, arid to express my hopes that this four-year-
old lawsuit can be allowed to be put to rest. The settlement fairly
and adequately addresses the pertinent issues in the lawsuit, and
the settlement will allow good things to happen to children who need
the help, Thank you.
Sincerely,
John McIntyre
State Senator
Legislative District 12
MTC-00030045
South Dakota Legislature
State Capitol,
500 East Capitol,
Pierre, South Dakota 57501-5070
House of Representatives
January 28, 2002
Renata Hesse
Trial Attorney
Antitrust Division
US Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
My legislative district is home to or borders on the Yankton
Sioux Tribe, the Crow Creek Reservation and the Lower Brule
Reservation, as well as non-Indian school districts where you will
find tow-income families and stressed financial resources for
schools. The people in my district are quite diverse, not only in
race, but also in terms of ethnic heritage, faith and occupation.
One cause we all agree on is the fact that a quality education
will do more to equalize opportunity for children than anything
else. For this reason, I am looking forward to the settlement in
U.S. v. Microsoft. The installation of up-to-date computers and
systems in low income school districts will allow disadvantaged
children equal access to
[[Page 28806]]
the wonderful learning tools found in the interest.
I also support the settlement became the antitrust case has
fully lived its usefulness to addressing the legal questions
involved. It is doubtful that extending this case beyond it's 4-
year-old lifespan is going to be productive, I hope this settlement
wig. be enacted so that everyone concerned may benefit. Thank you
for your attention to my letter
Sincerely,
Sam Nachtigal
State Representative
Legislative District 25
MTC-00030046
Joanne Lockner
Country Visions
301 3rd Street MW/
St. Lawrence 57373
Studio/Ho??e
605-853-2756
Renata Hesse
Trial Attorney
Anti-trust Division
US Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
January 25, 2002
Dear Ms. Hesse:
My comments are offered here to show my support for the
Settlement recently obtained between the Justice Department and the
Microsoft Corporation, support this settlement because it will bring
an end to a case which has remained in the courts long enough to
resolve the relevant Issues Involved.
Beyond the Issues, however, I strongly encourage this settlement
because it will surely bring a better quality education to children
who need the most help in South Dakota and elsewhere. I have served
as a State Representative in central South Dakota where them are
school districts in farming and ranching communities which are
considered remote and low income. Pr??sentiy, the state is expanding
its efforts to Improve the quality and availability of tong distance
learning. I know there are plenty of rural school districts wh??ch
need competent computer systems to take advantage of the Internet
and the state's educational efforts. As an ?? who supports the
Ar??sts in Schools P?? am excited by the possibilities of helping
more ch??dren enhance their lifestyles through the arts via the
Internet.
Thank you so much for allowing my comments to be considered. I
think the settlement is a healthy step forward for children and for
justice.
Yours very truly,
Joanne Lockner
MTC-00030047
DR. NONA LEIGH WILSON
415 Medary Avenue
Brookings, South Dakota 57006
605-688-4365 SDSU Office--
605-692-3915 Residence
January 17, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Sate 1200
Washington, DC 20530
Dear Ms. Hesse: My letter is intended to articulate my support
for the settlement reached in U.S. v. Microsoft and to help complete
a four-year-old antitrust case which has addressed the issues which
have been deemed valid through the court process. It is plainly
clear that this case has had sufficient time and enough resources to
fully and fairly consider all of the pertinent issues and develop a
remedy that is appropriate to the findings involved.
Any further time and financial resources expended to search for
additional issues would, in all likelihood, be a wasteful effort,
and not worthy of the resources of the United States government. As
an educator, I am very interested in realizing the befits to
education and disadvantaged children that would result from the
settlement. This penalty seems to be a wise and useful result of
this lawsuit. Thank you very much for considering my input on this
settlement.
Sincerely,
Nona L. Wilson
MTC-00030048
H??C Galloways
Electrical Consultants
P.O. BOX 375
Black Hawk, SD 57715-0375
(605) 787-4169
Fax (605) 787-5839
January 17, 2002
Renata Hesse, Trial Attorney
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Trial Attorney Hesse: On the issue of the settlement in
U.S. vs. Microsoft, let my comments show that I support it because
the settlement will have great value to Indian children throughout
western South Dakota. The settlement calls for Microsoft to supply
computers, equipment, software and the technical support they
require to the nation's neediest school districts, as defined by the
criteria for federal school lunch aid to students. The U.S. Census
Bureau has shown South Dakota has three of the nation's poorest
counties, all of which are located on reservations. South Dakota
also has plenty of low income counties and school districts in rural
counties where farm incomes have floundered.
The settlement should be the last word in the Microsoft
controversy. This case has had more than enough time and money to
find remedies to the issues brought before the U.S. Department of
Justice Antitrust Division. I think it says a tot that nine of the
eighteen states in the case (South Dakota decided to stay out of the
case) and the Justice Department have declared they have a
settlement with the Microsoft Corporation. It's not my intention to
retry the issues in this tatter because I have faith that everything
which could be done to reasonably remedy the controversy has been
done. Thank you for your attention to my comments.
Sincerely,
Henry Maicki
MTC-00030049
Fax
To: Renata B. Hesse
From:
Fax: (202) 307-1454 / (202) 616-9937
Pagas: 2 (includes cover)
Phone:
Date: 01/28/02
Re: CC:
. Comments:
CREW & CREW
Attorneys at Law 141 North Main, Suite 706
P.O. Box 923
Sioux Falls, SD 57101-0923
Michael B. Crew
Karen L. Crew
Anje L. Olseth, Legal Assistant
(605) 335-5561
FAX (605)335-762l
January 28, 2002
Renata Hesse, Trial Attorney
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
RE: Settlement agreement in U.S. v. Microsoft
Dear Ms Hesse:
Please include my sentiments in the public commentary as a
supporter of the settlement agreement. The sooner this case ends,
the sooner all parties involved can move on to other matters.
From what I have been able to learn, the settlement ought to be
in the final chapter in this case; it has taken four years to reach
this point. I understand that the issues which ,,,ere deemed
important by the court have been satisfied in this settlement. I
believe, the Department of Justice made a wise decision to close the
book on this issue after an exhausting effort to examine all
pertinent issues.
Thank you including my remarks on this commentary.
Sincerely,
KAREN L. CREW
MTC-00030050
PUBLIC
POLICY
SYSTEMS
INC.
130 Bowdoin Street, Suite 1108 ??
Boston, MA 08108
Honorable Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
RE: U.S. v Microsoft
Dear Judge Kollar-Kotelly,
I would like to express my dissatisfaction with the settlement
between Microsoft and the Department of Justice.
The settlement made virtually no impact on protecting consumes
from companies like Microsoft who have monopolies in the
marketplace, It has many loopholes and its level of enforcement is
questionable, In addition the settlement leaves Microsoft in a
position to continually raise prices for their products. This does
not provide consumers the level of protection they need for greater
consumer choice. It is my understanding that many consumer groups
have opposed the settlement.
[[Page 28807]]
The agreement states that Microsoft "shall not enter into
any agreement" to pay a software vendor not to develop or
distribute software that would compete with their products, but it
is Microsoft that will he the final decision maker on that
provision, The agreement also ??tates that Microsoft must share
certain technical information, but only if it would not the their
security or software licensing. Again, Microsoft will be the final
decision maker regarding this matter. The settlement does nothing to
deal with the effects on consumers and businesses of technologies
such as Microsoft's Passport.
I find rhea, inadequacies to be too broad to accept this
settlement. I hope that Microsoft will not be able to continue to
preserve its monopoly while consumers and competitors are subject to
the practices that are supposed to be protected by antitrust laws.
Thank you for your time,
Regards,
William A Carito, President
CC: Attorney General, Tom Reily
MTC-00030051
January 27, 2002
Renata Hesse
Trial Attorney
Anti-Trust Division
U.S. Department of Justice
601 D St., NW
Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
Thank you for your service as U.S. District Court Justice.
The agreed upon remedies in the Microsoft case allow computer
operating equipment manufacturers limited access to Microsoft
Windows to manipulate it in a way that fits their specific needs and
product. Permits some adjustments to the Windows operating system to
be made by the average user. It affords other technology
providers--including Microsoft's direct competitors--the
benefit of access to technical specifications. It sets in motion a
machine to enforce these remedies.
It does the equivalent of disclosing the recipe for the
McDonald's Big Mac special sauce to all competing fast food
restaurants. The fact that this only applies to Microsoft and none
of the other software or operating system manufacturers provides all
its competitors with an unfair advantage.
Yet, Microsoft agreed to settle with these remedies in an effort
to end this relentless infinitely long litigation. Hopefully you
will add your consent to this agreement.
Thank You,
Jill Stutts
5520 Antler Drive
Cedar Rapids, Iowa 52411
MTC-00030052
January 28, 2002
Jason Deans
7412 N. Thorncliff Place
Raleigh, NC 27616
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Fax: 202-616-9937
Dear Ms. Hesse:
As the government accounts representative for Comark, a leading
regional tech firm, I am thrilled that the long awaited settlement
between Microsoft and thee federal government is finally at hand.
All we need now is for the Judge to approve the settlement. The
Judge, in my opinion, has more than ample reason to do just that.
First of all, let me say how well I believe that government and
business can work together for mutual prosperity. It can and does
happen--EVERY DAY! I see it when I call on governmental
agencies, officials and departments.
I enjoy using technology to build a bridge between government
and business. It makes perfect sense. After all, the emerging
technologies of today make every segment of society more
productive--it makes no difference if the end user works for
the public good or a private interest. Let's forge ahead and
revitalize the American economy. Let's renew our commitment to
research and development, so that we continue to lend the world in
productivity and quality. Let's create a new spirit of cooperation
between the government and private enterprise. Let's show the rest
of the world that American don't take recessions lying
down--that we will act to strengthen our country and assist our
countrymen.
Now is the time for bold action. I request that Judge Kollar
Kotelly approves the settlement.
Sincerely,
Jason Deans
MTC-00030053
January 28, 2002
Jill Green
4660-302 Tournament Drive
Raleigh, NC 27612
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
During my tenure as Assistant Director of Admissions at North
Carolina State University, I have witnessed many technological
innovations and trends. Most of these have involved the use of a
computer, and many involved Microsoft products.
While I cannot say with exact certainty why the federal
government pursued an antitrust lawsuit against Microsoft, I can
tell you that it has had a devastating impact on technological
innovation while it has transpired. Before the lawsuit, tech
companies were lauded for focusing on research and development at
the exclusion of politics. In fact, few of the leading tech firms
employed anyone to conduct government relations programs.
Microsoft learned quickly that its exclusive focus on making
life more efficient for everyone had made its competitors struggle
for market share. The competitors retaliated by getting into the
political game. The lawsuit followed. Even today, Microsoft's
competitors are lobbying to conti9nue the lawsuit endlessly.
We should support the federal government and Microsoft in their
decision to settle the case. I urge Judge Kollar-Kotelly to approve
the proposed settlement of the lawsuit. Let's allow research and
development to march ahead.
Sincerely,
Jill Green
MTC-00030054
January 28, 2002
Tresa Jalot
829 Joyner Court
Wake Forest, NC 27587
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Fax: 202-616-9937
Dear Ms. Hesse: Given that my husband is a local television news
personality, I follow the news even more keenly than I ordinarily
would. I began working at a new job just a few short weeks ago, as
the membership and marketing director for Heritage Golf Club in Wake
Forest, North Carolina. Unfortunately, the news and my common sense
tells me that many other folks won't be fortunate enough to find new
jobs because of the poor economic conditions our country is in.
We've got to change that.
Our government must demonstrate that it is serious about
stimulating the economy. A great first step in that process would be
to finish the job of settling its antitrust lawsuit against
Microsoft. I think I speak for most American when I say,
"Enough already!" Both sides have agreed to
settle--it's time to move on to something else.
I believe that I also speak for executives who work in
membership and marketing when I say that I'm much more efficient in
my job because of Microsoft's quality products. Database management,
communications, and publications are all professionally done with
just a click of a mouse.
The American people choose Microsoft products because they make
life better. Life will also be better for many Americans once this
suit is settled. I request that 3udge Kollar Kotelly approves the
settlement.
Sincerely,
Tresa Jalot
MTC-00030055
January 28, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Jennifer Sidbury
1425 Suncourt Villa Drive
Wilmington, NC 28409
Dear Ms. Hesse:
As a past Executive Director of the North Carolina Federation of
College Republicans, it has been my pleasure to work with many
delightful people in all walks of life. Attorneys, business
executives and university faculty were heavily involved in the
statewide organization that I ran. Most
[[Page 28808]]
were people of common sense, good judgement and fine moral
character. Most wanted the common good to prevail in all political
proceedings. I have always sought to emulate these people--the
ones who act in the best interest of ALL of society.
It is in that spirit that I call on Judge Kollar Kotelly to
approve the proposed settlement in the antitrust suit between
Microsoft and the federal government. It's the right thing to do.
People are hurting. We're in a recession. Let's move the economy...
and the country forward by ending this whole affair.
Sincerely,
Jennifer Sidbury
MTC-00030056
January 28, 2002
Dan Mansell
Demco Construction
317 W. Second Street Clayton, NC 27520
Renata Hesse
Trial Attorney
Antitrust Division Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Fax: 202-616-9937
Dear Ms. Hesse:
I have always believed that a limited government is the best
government. Our federal government should give businesses and
families a hand up when they need it. Our federal government should
never stand in the way of American progress.
I believe that the Microsoft antitrust suit has gone far enough.
Microsoft is an industry leader. They deserve to be supported. I use
Microsoft's technology to run my construction business. Start to
finish, I use the many tools they offer to estimate, bid, and
execute a job.
In short, their products help me meet a payroll. I want the feds
to support Microsoft the way Microsoft supports me.
I request that Judge Kollar Kotelly approves the proposed
settlement.
Sincerely,
Dan Mansell
CEO
MTC-00030057
January 25, 2002
To: Renata B. Hesse
Antiturst Division
U.S Department of Justice
601 D Street NW
Suite 1200
Washington, DO 20530-001
Subject: Microsoft Settlement
The following are my comments regarding the proposed settlement
of the United States vs. Microsoft antitrust case.
Personal Background
I am Information Technology specialist who works primarily in
Systems architecture, design, and development, Over the past ten
years I have specialized in Information Security. I have been a user
of Microsoft products (for both consumers and developers) since the
early 1980s. United States w Microsoft Background The District Court
and the Court of Appeals concluded that Microsoft had
"unlawfully maintained its monopoly power by suppressing
emerging technologies that threatened to undermine its monopoly
control of the personal computer operating system market."
The Court of Appeals held "a remedies decree in an
antitrust case must seek to 'unfetter a market from
anticompetitive conduct," to 'terminate the illegal
monopoly, deny to the defendant the fruits of its statutory
violation, and ensure that there remain no practices likely to
result in monopolization in the future."'
Comments
Scope of Protection Is Too Limited Microsoft's competition in
the Operating system area varies greatly in type and size. This
competion includes:
. direct competitors, organizations creating different Operating
systems (e.g. Linux)
. organizations that build applications and middleware that run
"on top" of an operating system (e.g. Java and Netscape
Communicator)
. organizations that customize operating systems for their
clients (hardware OEMs)
. organizations that provide software equivalence of the
services of one operating system on a different system or
environment.
The proposed restrictions on Microsoft business conduct will
provide protection to a subset of these Microsoft competitors. The
majority of the Proposed Settlement focuses on providing relief for
1) organizations that provide middleware that run exclusively on
Microsoft Windows products, and 2) hardware OEM vendors. There are
only minimal changes in the Microsoft conduct to protect vendors of
competing operating systems.
Only Large Competitors Are Protected
The size of organizations that develop software varies greatly.
Even Microsoft started as a small number of people. Unlike many
other businesses, there is not a requirement for a large capital
investment to start developing software.
The restrictions on Microsoft conduct apply only to large
organizations (both OEM and software developers). Not only does this
not work to terminate the monopoly it creates new exclusionary and
discriminatory practices which did not previously exist,
Scope of Interfaces to be Disclosed Is too Narrow
The Proposed Settlement requires that Microsoft disclose the
APIs for its middleware. However, in the Proposed Settlement the
definition of Middleware is so limited that it excludes many of the
interfaces required by competitors, The Interfaces to be disclosed
need to include not just Application Programming Interfaces (APIs)
but all other data structures and protocols externalized by
Microsoft software components. The Department of Justice chose not
to pursue issues related to the comigling of software and yet the
Proposed Settlement assumes to have sufficient knowledge of the
separate pieces (middleware vs. operating system) to provide a
working definition in the Proposed Settlement. As long as the
definition of the Windows Operating Systems is outside the scope of
the Proposed Settlement Microsoft will maintain the control over
which interfaces must be disclosed. It would be more appropriate to
require Microsoft to disclose ALL interfaces between all components
of their products.
Not All Middleware Components are Identified.
Given that some of the Microsoft Middleware components that are
subject to this settlement are mentioned in the Proposed Settlement,
the ".net" interfaces, as the Microsoft followon to Java
should be included, Given the complexity of the definition of
Middleware provided in the Proposed Settlement, it would be
desireable to include the complete list of all Microsoft Middleware.
This list should be publicly available for the time period that the
Settlement is enforced.
Not All Current Versions of Windows are Covered In the
Settlement
All current versions of Windows that are based on Win-32 should
be covered by the Settlement. This should at least include Windows
CE and Windows XP Tablet Edition.
Too Many Restrictions on Disclosure of Security Interfaces
The Proposed Settlement places restrictions on the disclosure of
Microsoft security interfaces in the name of National Security. I
would suggest that the reverse is true. In the current environment
it is important to nurture the development of security
functionality. All Microsoft security programmable interfaces,
protocols, and date structures should be fully disclosed. The only
restriction should be that the content of some specific data
elements may not be disclosed (private keys, etc.)
Limits on Which Organizations can Seek Disclosure of Interfaces
The proposed Settlement places restrictions on which competitors
Microsoft must disclose their APIs. The competitors must be of
sufficient size and have a valid business case. This allows
Microsoft to chose which organizations they wish to compete. Even
Microsoft in its earliest years would have failed these
requirements. Given that in the current environment one of
Microsoft's strongest competitors is primarily a volunteer
organization (Lunix) it seems likely that Microsoft would not
disclose any APIs to "Free" Software development
organizations.
Poor Enforcement Mechanisms
A good settlement should include enforcement that is easily
understood, quantifiable, and verifiable. There should be metrics
that can be used over a period of time to evaluate the success of
the Settlement. A good enforcement needs to provide quick resolution
of issues related the Settlement for the business needs of both any
plaintiff as well as Microsoft. Finally, them needs to be a
sufficient motivation to insure Microsoft will not violate the
Settlement.
The Proposed Settlement provides almost none of the above There
is technical review by a three person team but all of their work
will be confidential and not subject to review. There is no public
or judicial review of the progress of the Settlement. The only
option for handling misconduct, outside of the technical team, is to
go back to court--one of the slowest ways to resolve any
violations. Finally, given that them is no financial incentive
required in this Settlement and that Microsoft earns billions of
dollars using their current business conduct it is hard to see why
Microsoft will be motivated to make any changes in their conduct.
[[Page 28809]]
Conclusion
The Proposed Settlement does not provide adequate changes in
business conduct of Microsoft to provide a remedy that meet the
requirements of the Court of Appeals mandate. In some cases the
Proposed Settlement adds new herders to the competition to Microsoft
Operating Systems and Middleware. Thus, the Proposed Settlement does
not serve in the public interest. I recommend that the Proposed
Settlement be rejected.
Sincerely,
Jerry L. Hadsell
2800 Woodley Road NW
Washington DC, 20008
MTC-00030058
Fax Cover Sheet
Date: 28 Jan 2002
To: Renate Hesse Antitrust Division
Company: Department of Justice
Fax: (202) 616-9937
From Harold R. ANDRLS Sr
Company:
Tel: (301) 935-0057
Number of pages including this one: 2
kinko's
4417 Hartwick Rd.
College Park, MD 20740
Tel: (301) 277-7543
Fax: (301) 779-6417
Comments:
Renata Hesse, Trial Attorney
28 January 2002
Antitrust Division
Department of Justice
601 D Street NW Suite 1200
Washington, DC 20530
Fax (202) 616-9937
e-mail microsof.atr @ usdoj.gov.
On Shabbas, 26 January 2002AD, an unsolicited virtual message
was deposited on my telephone requesting my immediate comments
concerning the "Microsoft" litigation. Please for the
sake of immediacy do not make the mistake of recasting the story of
Genesis 25:29-34. The action taken must avoid the ??okology of
yet another mons?? marching through-out the Lands of this World. The
objective of governance should be to protect the rights and freedoms
of People (be they individuals or organizations) against predicatory
statements by any entity conspiring to sup press and gain absolute
control or power.
In presenting and resolving this and similar issues, perhaps
rite views of Dr. Herbert I. Schiller should be, considered. I
understand that his observations are available in such works as
"Culture, inc."/"Living in the number one
country"/"Mass communication ,and American
empire".
In resolving the arguments, Please do NOT make the mistake of
ESAU by selling ?? need of the moment to satisfy greed.
"Happy Iris" & Trails!
Harold R. Andrus,??
3509 DePauw Pla??
College Park, MD 207404009
MTC-00030059
447 Larchwood Avenue
Trevose, PA 19053-4407
January 11, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing to express my opinion about the recent antitrust
settlement between Microsoft and the US Department of Justice. In
light of the recent terrorist attack and the ongoing war on
terrorism, I think it is absurd that nine states continue to bring
lawsuits against Microsoft in a case that seemed unjust from the
start.
The settlement is too harsh to begin with since entering into
third party exclusive distribution agreements have never been a
problem in the past. Also, disclosing internal interfaces that
Microsoft spent a lot of time and money to develop is a violation of
their intellectual property rights.
I urge your office to free up Microsoft to allow them to focus
on business. This will serve the public's best interests because
only our strong industry leaders can rejuvenate economy.
Sincerely,
John Stern
MTC-00030060
Kory Nanke Letterhead--realtor / business owner
DATE
Judge Kolar Kottely
Renata Hesse, Antitrust Division Public Comment
U.S. Department of Justice
601 D Street, NW, Suite 1200
Washington, DC 20530
Dear Judge Kottely.
After years of litigation, the Department of Justice, nine state
attorneys general, and Microsoft Corporation--the majority of
the parties involved in the case--have agreed upon a
settlement. It is now before you to make your judgment.
As history has revealed, there is often a six-month to one-year
delay before the real estate market feels the effects of a
significant economic change in either direction. An economic
downturn had begun prior to the horrific events of September 11th.
However, it was accelerated after that day. Those of us in the real
estate industry are just beginning to feet the market soften.
In addition to the much appreciated efforts of President Bush
and Congress to put forth an economic stimulus package to help
generate a spark in the economy, settling this case is another
small, but important step in that direction.
I urge you to accept the settlement that the majority of the
parties involved in this case have agreed upon.
Sincerely,
Kory Nanke
MTC-00030061
Jim Grabowski
487 Covewood Boulevard
Webster, NY 14580-1107
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
Now that Microsoft and the Government have reached an agreement,
it appears that the states are doing to Microsoft what they did in
the tobacco suit. They wish to pursue further litigation in order to
fund their state governments, and I think it's ridiculous.
Microsoft did not get off easy. Not only did they agree to
disclose various Windows internal interfaces to the competition,
they also agreed to not enter into any agreements obligating any
third party to distribute or promote any Windows technology
exclusively.
Let's move on. Our government should focus on more pressing
issues, and leave decisions about software company size and success
up to consumers.
Sincerely,
Jim Grabowski
MTC-00030062
Fax
To: Renata Hesse
From: Kenneth Brown
Fax: 202-616-9937
Pages: 7
Phone: 202-307-1454
Date: 1/28/2002
Re: Tunney Act Comments
CO:
Please call 703-608-4222 if you have any problems with
this submission. Ken Brown
January 28, 2002
Renata Hesse
Trial Attorney
Antitrust Division
U.S. Department of Justice
601 D Street, NW Suite 1200
Washington, DC 20530
e-mail: microsoft.atr @ usdoj.gov
Re: AdTI Tunney Act Comments
The Alexis de Tocqueville Institution submits these comments
under the Tunney Act. The Alexis de Tocqueville Institution is an
independent non-profit education and research organization described
in detail at www.adti.net. The mission of AdTI is to provide helpful
policy analysis to advance the ideas of democracy and freedom around
the world.
Sincerely,
Kenneth Brown
President
Telephone Number(s)- office 202-548-0006, cell
703-608-4222
Why the Microsoft Case Should Be Settled
Alexis de Tocqueville Institution
Washington, DC
January 22, 2002
The Hard Truth About Invention in the U.S. Marketplace Two
courts have reaffirmed that Netscape nor its browser were shut out
of the marketplace. The browser wars produced a winner and a loser;
and Netscape was the loser. However, within thousands of briefs and
legal arguments criticizing the U.S. vs. Microsoft settlement is the
repeated concern about the future of new Netscape's in the
technology sector. Almost every other issue is tangential, and we
must differentiate the arguments properly.
We see an interchanging of terms being used, specifically,
"....the settlement should make the marketplace safe for firms
to compete with Microsoft..." vs. "...the settlement
should be safe for firms to introduce new products...ie. like
Netscape
[[Page 28810]]
Navigator..." The Department of Justice has proposed a
settlement that properly speaks to its duty--to introduce a
remedy which allows firms to safely introduce new products.
Microsoft has agreed to the rules; which include a mandate that
Microsoft disclose any information necessary for rival firms to
produce fully interoperable products with Windows for competing
software and servers.
The reason why critics want a settlement which goes further is
because they want Microsoft completely out of the way. The case is
merely obfuscation. With billions of dollars in resources,
Microsoft's competitors want every advantage because 1) the
marketplace for new technology is overwhelming and having a chief
competitor eliminated makes things a little easier and 2) the
competitors lobbying for a far-reaching settlement are among the
most aggressive and fierce technologists in the world.
The reality is that the marketplace, particularly the
marketplace for new technology has never been safe from a
competitor. What Microsoft's competitors want is an oxymoron because
no technology product is ever "competition-free" or
guaranteed success in the marketplace. This benefits consumers, the
country and ironically inventors themselves, which makes it relevant
to observe the reality of the marketplace (beyond the courtroom) for
a moment. Great Inventors Must Be Fierce Strategists
Every inventor and innovator small and large must face the
formidable odds to succeed in the marketplace for new technology.
Since the day the first idea was registered in the U.S. patent
office, countless inventions and innovations have become cinders in
the furnace of competition. Relentless markets in America only
sustain the fiercest competitors, without exception. Technologists
rewarded with fabulous wealth and fame did so at the expense of
employing hard-hitting, merciless strategies. Regardless of
ingenuity, technologists without the ability to navigate in the
marketplace were failures; and lucky to even receive credit as
creators of their own inventions.
The marketplace for food, furniture and other goods each have
their challenges. But, the technology marketplace is unique because
it demands both inventive genius and keen business savvy. The
combination of the two is rare in individuals and corporations, and
particularly scarce among pure inventors such as physicists,
mathematicians or engineers. From the light bulb to the PC operating
system, every innovator that history has been kind to, had the
indomitable capability to merge intellectual power with commercial
insight. In the end, technologists with these qualities became far
more successful than their counterparts with better inventions or
greater talent.
Competitive Inventors Preserve U.S. Leadership
However, America's owes its technological leadership in the
world to its competitive battleground. Although education, vigorous
intellectual property rights and democracy are also credit to
American invention, its ability to surface inventors with commercial
savvy, make it a source of the most competitive innovations in the
world. In the end, the U.S. is a loader in world-changing
innovations, at the expense of sustaining a "bare-
knuckled" marketplace.
After an excruciating and lengthy examination by the court
system, the federal government and 9 states (actually 41 when you
consider the states that never filed suit) agree on the U.S. vs.
Microsoft settlement. Regardless of the differences among the
parties, we can't expect any ruling to settle the differences
between Microsoft and its competitors. However, this dissatisfaction
is in the best interest of our country and will only spawn better
ideas and products that will propel the U.S. to new heights. U.S.
technological leadership depends on the undying will of its
innovators to be no. 1.
The "Electric" War Between Edison and Tesla
The debate over Windows is similar to many stories about wars
between rival innovators throughout history, particularly aspects of
the Thomas Edison story. Although the Edison-Tesla rivalry did not
involve anti-trust law, the contest details the reality of the
"invention business" in the most competitive capitalist
society in the world.
Contrary to popular belief, the idea of electric lighting was
not Edison's. A number of individuals had developed forms of
electric lighting, but none had developed a system that was
practical for home use. Using lower current, a small carbonized
filament, and an improved vacuum inside the bulb, Edison was able to
produce a reliable, long-lasting source of light. Thomas Edison
didn't "invent" the light bulb, but became a legend for
making a 50year-old idea a fantastic commercial success.
Edison's fiercest rival, was an ex-employee named Nikola Tesla
from Smijlan, Croatia. Tesla was a genius who invented the
fluorescent bulb in his lab forty years before industry
"invented" them. At World's Fairs and similar
exhibitions, he demonstrated the world's first neon signs. Perhaps
Tesla's greatest invention was the AC (alternating current) system
we use in our homes today. DC (direct current), an inferior system,
ironically, was designed by Thomas Edison. After years of fierce
wars and debate between the Tesla and Edison teams, AC became the
accepted system of transporting electricity. In fact, Edison later
admitted that AC was the better system. While both men were geniuses
ahead of their time, the biggest difference between Edison and Tesla
was their perspective and approach to invention. Edison had a keen
understanding of capital markets and the strategies necessary to
finance, promote and commercialize his inventions. Tesla was a great
theoretician who worked perpetually to finance experiments.
Edison held a world record 1,093 patents and died a wealthy,
famous man. Tesla received over 800 patents, died penniless and was
literally erased from the history books. In fact, Tesla was poor the
last thirty years of his life and arguably would have eclipsed
Edison's patent record if he had the capital. Remembered for many
things, Edison was known for saying, "I have more respect for
the fellow with a single idea who gets there than for the fellow
with a thousand ideas who does nothing." Edison's vision
reflects the view of anti-trust law, that the greater value is in a
stable marketplace, not the resurrection of competing ideas.
The Other Truth about Netscape
The Appeals Court ruling reflects another hard
truth--Netscape fell, because it did. The DC Circuit rejected
the course-of-conduct theory, under which Microsoft's specific
practices could be viewed as part of a "broad monopolistic
scheme." This obviously has made anyone that viewed Microsoft
as an evil-doer exponentially dissatisfied with DOJ's settlement.
But again, is the responsibility of the DOJ to make the world safe
from Microsoft? Netscape maintained its Internet dominance until
1997, when Internet Explorer's fourth version was able to lap
Netscape. Netscape Navigator never regained its prominence. In
addition, by that time, the Netscape product was slow, outdated, and
unstable, falling to a swifter surging Internet Explorer.
But perhaps the most unmentioned reality regarding Netscape's
fall was their announcement to all (Microsoft included) that their
strategy was to be the middleware that would be the
"new" Windows, removing Microsoft's flagship product
from dominance. Hindsight is 20/20 but when you consider how far
ahead Netscape was in front of Microsoft, there are infinite what
if's" to consider if it had been mum about its strategy to
take on Redmond. Microsoft had all but ignored the Internet and it
is very questionable if they would have been able to play catch-up
to a well-funded and branded Netscape team. The outcome of this
possibility almost completely counters any damage claims in their
civil suit recently announced. After all, Netscape's grand plan was
never realized, thus the future is incalculable especially when
taking into consideration the hubris of Netscape.
Innovators are the Lifeblood of U.S.
Today, new technology firms use every means available to compete
including spending billions of dollars on research and development.
Sun Microsystems, IBM and AOL and Microsoft combine to spend over
$100 billion annually just on research and development. Firms spend
exorbitant amounts of money to create and protect to new products.
But again, this competition is to the benefit of inventors and the
U.S. marketplace.\1\ Recently, the United States Patent Office
released its annual list of the top ten private sector patent
recipients, it reported that for the ninth consecutive year, IBM
received more patents than any other organization in the world.
"I am proud that American corporations are leaders among U.S.
patent holders," said James E. Rogan, Undersecretary of
Commerce for Intellectual Property. "Patents promote
technological progress and are a potent source for competitive free
enterprise."
---------------------------------------------------------------------------
\1\ U.S. Patent and Trademark Offfice. January 10. 2002.
---------------------------------------------------------------------------
USPTO's comments echo the importance of preserving the status
quo of the U.S. marketplace. In the end, it is in the interest of
innovation that we close the chapter on
[[Page 28811]]
U.S. vs. Microsoft. The judicial process has sorted through the
facts and come to judgment. Those dissatisfied with the settlement
should be reminded by W. M. Deming's famous quip, "Learning is
not essential, survival is not mandatory." Deming's point
speaks not only to the Microsoft case; but the hard truth about
invention and success in the technology business. The court system
has done its job, and enough precious time has been dedicated to
legal jurisprudence, It is now the time for Microsoft and its
opponents to tuck in their chin, learn from their mistakes and
return to the marketplace.
U.S. Patent and Trademark Office (USPTO) List of Top 10 Patent Recipients
----------------------------------------------------------------------------------------------------------------
Preliminary
# of Final rank in Final Number
Preliminary rank in 2001 Patents in Organization 2000 of Patents in
2001 2000
----------------------------------------------------------------------------------------------------------------
1............................... 3,411 International Business. 1 2,886
Machines (IBM).
2............................... 1,953 NEC Corporation............... 2 2,021
3............................... 1,877 Canon Kabushiki Kaisha........ 3 1,890
4............................... 1,6543 Micron Technology............. 7 1,304
5............................... 1,450 Samsung Electronics Co., Ltd.. 4 1,441
6............................... 1,440 Matsushita Electrical 11 1,137
Industrial Co., Ltd..
7............................... 1,363 Sony Corporation.............. 6 1,385
8............................... 1,271 Hitachi, Ltd.................. 13 1.036
9............................... 1,184 Mitsbushi, Denki Kabushiki 14 1,010
Kaisha.
10.............................. 1,166 Fujitsu Limited............... 10 1,147
----------------------------------------------------------------------------------------------------------------
* Source: USPTO, January 10, 2002. The listed patent counts are preliminary counts, which are subject to
correction. The final listing of patent counts for the top patent organizations in 2001 should be available by
early April 2002. Patent information reflects patent ownership at patent grant and does not include any
changes that occur after the
MTC-00030063
E. BLAINE RAWSON
596 East 1050 North
Bountiful, Utah 84010
January 28, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoj.gov
VIA FACSIMILE COPY TO: (202) 307-1454 or (202) 616-9937
1ST CLASS MAIL TO:
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B. Hesse Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
I write to inform you of my support for the position taken by
Utah's Attorney General concerning the proposed Microsoft
settlement.
It would have been easy for Utah's Attorney General, as a
Republican, to join with certain other states in accepting the
proposed Microsoft/Justice Department settlement. He has been
criticized by some for being anti-free market. However, this case
can not be reduced to such simplistic sound bytes. His support for a
free market is not at issue. Microsoft was found in violation of law
by a court of law. The real question is what action should be taken
to prevent similar violations from occurring in the future and what
penalty should be imposed upon Microsoft: for past violations. The
proposed settlement does not appear to reflect the extent of the
findings of violation made by the trial court and sustained by the
appellate court.
I applaud Attorney General Shurtleff for holding fast to the
rule of law, notwithstanding the pressure brought to bear through
campaign contributions and by certain public officials who would
have him take a position that may not be in the best interest of the
citizens of the State of Utah.
If the settlement does not properly terminate present antitrust
violations, penalize for past violations, and prevent future
antitrust violations, then it should not be adopted. I would prefer
this court hold evidentiary and legal hearings and impose a remedy
warranted by the facts and law. In addition, the government should
zealously enforce the remedy to avoid future abuses.
Respectfully,
E. Blaine Rawson
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030064
77 Blackbird
Drive Bailey, Colorado 80421
January 26, 2002
Attorney General John Ashcroft
950 Pennsylvania Avenue, NW
U.S. Department of Justice
Washington, DC 20530
Dear Mr. Ashcroft:
The Microsoft case was ridiculous. In my view, it showed how the
U.S. Government can step in and attack a company because it has a
huge market share. The competitors complained and said Microsoft was
unethical even though the stone attackers" business practices
are largely the stone. The settlement on Microsoft's behalf shows
how cooperative the company can be in a reluctant situation. It
includes compromises that far exceed the original scope of the
lawsuit, and gives their competitors several unfair advantages.
Please approve the settlement and let Microsoft put the lawsuit
behind them once and for all.
Sincerely,
Jerol Love
MTC-00030065
The Web Practice
Internet alchemy
FACSIMILE TRANSMITTAL SHEET
TO: John Ashcroft
FROM: Curt Fluegel
COMPANY
DATE: 1/28/2002
US Department of Justice
FAX NUMBER: 1-202-307-1454
TOTAL NO OF PAGES INCLUDING COVER: 2
PHONE NUMBER: 651.842.0475
SENDER'S REF??RENCE NUMBER
RE: YOUR REFERENCE NUMBER:
Microsoft Settlement
NOTES/COMMENTS:
THE WEB PRACTICE, LLC
175 5TH STREET EAST, STE. 700 . ST PAUL, MN 55101 .
[650 776-993]
FAX: [651] 726-7326 .
January 9, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing this letter to inform you that I am fully in
support of the settlement reached between Microsoft and the
Department of Justice. The legal battle that preceded this
settlement drained tax funds, and challenged state budgets. This
suit was initially brought about to help give the consumer more
choices in the IT market; instead, it has succeeded in draining
money from our pockets.
This settlement is fair and pragmatic. Microsoft has gone far
and above what it should have needed to do to get this issue
resolved. The settlement addresses concerns that were not even part
of the original suit, and Microsoft even compromised some of its
intellectual property to make the settlement adequately thorough.
Please prevent any further abuse of our tax resources. The right
thing to do would be to finalize the settlement and resolve this
issue promptly. We muse give Microsoft way, so it can return to
innovation--
Sincerely,
Curt Fluegel
General Partner
MTC-00030066
43 Beaumont Circle Apt. 1
Yonkers, NY 10710
January 25, 2002
[[Page 28812]]
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
Since the Department of Justice is accepting and publishing
public comments for the first time since the antitrust suit was
brought against Microsoft over three years ago, here are my
comments.
Microsoft agreed to the right of third party's to exercise any
of the options provided by the settlement that would infringe on any
Microsoft intellectual property right. Microsoft will provide the
third party with a license to the necessary intellectual property on
reasonable and non-discriminatory terms.
Microsoft also agreed to the establishment of a technical
committee that will monitor Microsoft's compliance with the
settlement and assist with dispute resolution. The technical
committee will consist of three experts in software engineering. Any
third party who believes that Microsoft is not complying with any
provision of the settlement will be free to lodge a complaint with
an internal Compliance Officer at Microsoft, as established by the
settlement, the Department of Justice, or any of the State
plaintiffs that are party to the settlement. Now that Microsoft has
agreed to those terms, shouldn't Government agree to end litigation?
Sincerely,
Syed Kamal
MTC-00030068
SUZANNE F. THORUP
3148 Creek Road
Salt Lake City, UT 84121
January 25, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoj.gov
VIA FACSIMILE COPY TO: (202) 307-1454 or (202) 616-9937
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division, U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
This letter will inform you of my opposition to the proposed
Microsoft settlement. I understand that Microsoft was found to be in
violation of the antitrust laws of the United States by virtue of
uncompetitive conduct, particularly in its marketing practices. It
is important that the market have viable competitors, including
those who would make compatible products. Microsoft's practices have
destroyed any semblance of an open market place. The proposed
settlement appears to be little more than business as usual.
Microsoft has once again won, and the consumer has lost. The
proposed settlement does not resolve the problems identified by the
trial judge, it has merely postponed their resolution because the
agreement fails to prevent future violations and does little to
correct past behavior.
I am not advocating that Microsoft should be broken up. I am a
shareholder and believe that Microsoft is still a strong company
that holds value for investors. However, I believe that Microsoft
will succeed in a competitive market place. Breaking up Microsoft
would not be in the best interests of investors. By the same token,
adoption of the proposed settlement agreement would not be in the
best interests of the consumers.
Since the parties have not achieved a reasonable settlement, it
is time for the courts to do so. Please reject the proposed
settlement and conduct such hearings as may be necessary to
determine what appropriate remedies should be employed.
Respectfully,
Suzanne F. Thorup
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030069
268 Neptune Boulevard
Long Beach, NY 11561-3732
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
January 24, 2002
Dear Mr. Ashcroft:
In a few days, the Justice Department will make its final
decision on the Microsoft settlement. It is my fervent hope that the
government accept this settlement from Microsoft. I feel that
Microsoft is giving away too much to the competition, but I
completely support Microsoft's efforts to end this three-year legal
war over antitrust behavior.
The federal government's actions toward Microsoft have been
abominable. I am completely against government involvement in
private business affairs. The freedom to innovate must be preserved
if our country is to continue to be a world leader This country's
strength has been built from our free enterprise system. Further
government involvement will continue to hurt our already weak
economy.
As a real estate agent, I have exclusively used Microsoft
Windows and Microsoft Office for years and it has indeed contributed
to the success of my small business. I also use Internet Explorer,
my web browser of choice. Nothing on the market compares to
Microsoft's software products. The competition can put their
software on Windows and remove Microsoft's, but I will always use
Microsoft's products.
I have confidence that Microsoft is doing what is in their best
interest, to get out from under the hand of government involvement.
I see nothing but positives for the economy and for the computer
industry, once Microsoft is allowed to work entirely free from
further government entanglements. Please do what I feel is best for
the economy and the people of this great nation, confirm the
Microsoft settlement.
Sincerely,
Maria Ferrer
MTC-00030070
SIDLEY AUSTIN BROWN & WOOD LLP
CHICAGO DALLAS
LOS ANGELES
NEW YORK
SAN FRANCISCO
SEATTLE
1501 K STREET, NW
WASHINGTON, DC 20005
TELEPHONE 202 736 8000
FACSIMILE 202 736 8711
www.sidley.com
FOUNDED 1866
BEIJING
HONG KONG
LONDON
SHANGHAI
SINGAPORE
TOKYO
WRITER'S DIRECT NUMBER (202) 736-8067
WRITER'S E-MAIL ADDRESS tbartucz @ sidley.com
FACSIMILE/TELECOPIER TRANSMISSION
From: Name: Tanya Bartucz
Voice Phone: Joanna Harkin 202/736-8268
To: Name: U.S. Department of Justice
Company:
Facsimile #: 202-307-1454
Voice Phone:
Subject:
Message:
Date: 01/28/02
Time: 05:24 PM
No. Pages (Including Cover): 5
Note: If you do not receive all the pages, please call: Joanna
Harkin 202/736-8268
SIDLEY AUSTIN BROWN & WOOD LLP
CHICAGO DALLAS
LOS ANGELES
NEW YORK
SAN FRANCISCO
SEATTLE
1501 K STREET, NW
WASHINGTON, DC 20005
TELEPHONE 202 736 8000
FACSIMILE 202 736 8711
www.sidley.com
FOUNDED 1866
BEIJING
HONG KONG
LONDON
SHANGHAI
SINGAPORE
TOKYO
WRITER'S DIRECT NUMBER (202) 736-8067 WRITER'S E-MAIL ADDRESS
tbartucz @ sidley.com
FACSIMILE TRANSMISSION FORM
Date: January 28, 2002 No. of pages including cover sheet:
To: Company: U.S. Department of Justice
Telephone #: Fax #: (202) 307-1454
SPECIAL INSTRUCTIONS: IF NOT USA PLEASE INDICATE COUNTRY & CITY
CODE NUMBER
From: Tanya Y. Bartucz Ext. 8067 Floor:
COMMENTS: Attached please find the Tunney Act comments on the
Microsoft settlement of Griffin B. Bell, Edwin Meese III, and C
Boyden Gray. An electronic copy will also be submitted Problems with
this transmission should be reported to: (202) 736-8067
January 28, 2002
Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Ms. Hesse:
[[Page 28813]]
We believe the Revised Proposed Final Judgment
("RPFJ") that the federal government and some of the
plaintiff states have reached with Microsoft should be adopted, and
that the proposals of the nine states that continue to pursue this
litigation (the "Litigating States") should be rejected.
That is so, in our view, for four main reasons. First, the RPFJ will
serve the central goal of antitrust law--benefiting
consumers--far better than any of the states" proposed
remedies. Most importantly, it allows Microsoft to continue selling
a single, uniform operating system under the Windows name. This will
directly benefit all the consumers who have relied on Windows'
continued availability when deciding which computer and software to
purchase.
At the same time, the RPFJ will increase the range of choices
available to consumers by requiring Microsoft to enable both
computer manufacturers and end-users to turn off Microsoft's
middleware products such as its Internet browser, instant messaging
tools, media player, and email utilities. Consumers will therefore
be free to sample and choose among a variety of middleware utilities
from various companies. The RPFJ thus strikes a sensible balance
between the goal of giving rival middleware producers access to
Microsoft's customers, and the equally important goal of avoiding
anything that would destabilize the Windows platform on which
consumers--and indeed most of the software
industry--depend.
The Litigating States' proposals strike no such balance. For
example, the Litigating States would require Microsoft to sell
stripped-down versions of Windows at court-mandated prices, without
regard for the technical advantages of integrating middleware and
operating system functions, or for the importance of a stable,
uniform operating system. Computer manufacturers would then be able
to patch competitors' middleware into the Windows system and sell
the hybrid product to consumers without giving them any guidance as
to how to restore their computers to the original Windows settings.
This would effectively destroy the Windows standard. That will not
benefit consumers; it will harm them. And it is anti-competitive,
not pro-competitive.
Second, the RPFJ is narrowly tailored to the findings of
illegality affirmed by the Court of Appeals. The RPFJ thus enjoins
the types of conduct held illegal by that court--primarily
certain exclusive dealing arrangements and threats of
retaliation--in language broad enough to preclude similar
behavior, without losing sight of the limited Court of Appeals
holding.
In contrast, many of the Litigating States' proposals have
nothing to do with any of the issues in this case, much less the
Court of Appeals' decision. For example, the Litigating States would
require Microsoft to inform them sixty days in advance of any
acquisition of technology or other intellectual property. Yet this
"remedy" cannot be tied to any element of this case, let
alone to any finding of liability that was affirmed on appeal. Other
proposals are simply overbroad or unworkable, such as the proposal
that Microsoft notify any software developer sixty days in advance
of any action it intends to take that might have an impact on the
interaction between the developer's middleware and Windows,
Third, the remedy in this case must be one that the federal
courts can administer, not one that will turn the District Court
into a regulatory agency. Again, the RPFJ strikes the needed
balance. The Technical Committee and the Compliance Officer that it
would install are unquestionably intrusive, but at least the
Committee would properly make its reports to the plaintiffs, who
then would decide what course to pursue,
By contrast, installing a Special Master with his own staff and
the power both to investigate and to judge, as the Litigating States
propose, would drag the federal courts into a prosecutorial and
regulatory role that they are ill-suited to perform. The Litigating
States' substantive proposals take a similar, regulatory approach.
They would mandate product design and pricing, force Microsoft to
distribute its competitors" products, and give Microsoft's
rivals a mechanism to try to block any decision by Microsoft that
they dislike.
Finally, we believe that entry of the RPFJ will respect and
promote the primacy of the U.S. Department of Justice in enforcing
federal antitrust law. To be sure, the States may have some role to
play in this area. But it would be bad policy to allow a small group
of state attorneys general to trump, in effect, the Department's
decision to settle on reasonable terms an antitrust case that has
such enormous implications for the national economy.
For all these reasons, we urge the District Court to enter the
RPFJ as its final judgment in this case. We believe it would benefit
consumers, effectively address the Court of Appeals' findings, and
provide a workable resolution to this long-running litigation.
Sincerely.
Griffin B. Bill
Edwin Meese III
C. Boyden Gray
MTC-00030071
South Dakota Legislature
State Capitol,
500 East Capitol,
Pierre, South Dakota 57501-5070
House of Representatives
January 28, 2002
Renata Hesse
Trial Attorney
Antitrust Division
U.S. Department of Justice
601 D Street NW--Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
My pursuit in public service has been to make sure that
taxpayers and justice are well served in all matters. In the
settlement proposal affecting U.S. v. Microsoft, I am concerned that
enough resources in time, money, attention and personnel have been
used to pursue the issues raised in this anti-trust case.
At no time in the proceedings has it been established that
consumers have been wronged by Microsoft's actions. In fact, I think
consumers who've used Microsoft have been well pleased with the
quality and cost of the company's products and services. The issue
seems to focus on Microsoft and its ambitious competitors, and I
think this case has expended enough resources to determine what is
fair. I strongly support putting the settlement into effect.
I appreciate your attention to my statements.
Sincerely
Representative Bill Napoli
Legislative District 35
Assistant Majority Leader
MTC-00030072
South Dakota Legislature
State Capitol,
500 East Capitol,
Pierre, South Dakota 57501-5070
Senate Chamber
January 28, 2002
Renata Hesse, Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
This letter is to be entered in the public input phase of the
settlement in U.S. v. Microsoft. I support the settlement for the
following reasons:
. The settlement answers the issues which were found to be valid
at the end of this 4-year-old case.
. The settlement will conclude a case which has used sufficient
time, personnel and money to seek out every possible issue and fully
explore each one.
. At no time during the past four years has it been established
that consumers have been wronged by Microsoft's actions.
. A significant benefit from this case to school districts which
hold a disproportionate share of economically stressed children is
the dedication of hardware, software and tech support to bridge the
IT gap for these children.
Frankly, the continuation of this case will not benefit justice
or the information technologies industry. After more than four
years, an antitrust case of this magnitude should have yielded all
of the benefits that are reasonable.
I appreciate the opportunity to submit this letter.
Sincerely,
Brock L. Greenfield
State Senator
Legislative District 6
MTC-00030073
January 28, 2002
Renata Hesse, Trial Attorney
Antitrust Division
United States Department of Justice
601 D Street NW--Suite 1200
Washington, DC 20530
Dear Renata Hesse:
I am a strong supporter of the use of information technologies
as a major resource of developing the economy of South Dakota.
Efforts achieved in the state's Wiring the Schools Program and long
distance learning systems will reap huge dividends as the so-called
digital divide is erased between urban America and rural states. The
allocation of computers and backup support which is expected from
the settlement proposal in the
[[Page 28814]]
antitrust case, U.S. v. Microsoft, offers another leap forward
because those systems are targeted for use by low income school
districts. South Dakota has many of those districts which should
qualify for the computer systems. That is one reason I support the
settlement.
The other speaks to how the justice system is used to pursue
justice. This antitrust case was established to explore Microsoft
Corporation's practices as they relate to its competition. It has
not established any harm to consumers, which should be a strong
consideration in the value of this settlement. From what I have been
able to read and understand, the settlement adequately addresses the
issues which have remained viable throughout the court process. I
think this case has reached the point when it is time to say enough
is enough; it's no longer necessary to keep this court action going.
I think justice has been pursued, and the pursuit has not
wandered outside the lines of what is a proper action by the courts.
My hope is that this process is not allowed to wander outside the
lines by rejecting the settlement. Thank you.
With best regards,
Phil Hanson
MTC-00030074
January 28, 2002
Renata Hesse, Trial Attorney
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Renata Hesse:
My letter is being sent for the settlement phase in U.S. vs.
Microsoft. I have followed the case in the news and I have wondered
why so much money and attention has been consumed to pursue
Microsoft on issues which could have been decided in much less time.
Frankly, the case has the public appearance of Microsoft being
punished for leading the competition with software which is more
competent and less expensive for average users than Microsoft's
competitors.
Skepticism aside, I hope the settlement is enacted because this
issue has had its day in court and because the issues which were
believed to be important have been answered. I am very pleased that
the U.S. Department of Justice reached an accord with Microsoft. The
fact that such an accord was reached by the federal government and
nine of the states involved in the action should weigh heavily in
favor of allowing thin settlement to move toward enactment.
Thank you for your attention to my letter.
Sincerely,
Ron Sauby
MTC-00030075
To: US Department of Justice--Antitrust Division
Title:
Company:
Fax 202-616-9937
Business
From:
Fax number:
Business phone:
Date & Time: 1/28/2002 5:46:28 PM
Pages sent: 12
Re: Microsoft Settlement
Please see attached document
The Center for the Moral Defense of Capitalism
4901 Seminary Rd #1320
Alexandria, VA 22311-1830, USA
(703) 625-3296 (VOX)
(815) 327-8852
(FAX)
Internet: http://www.rnoraldefense.com E-mail:
info @ moraldefense.com
10708 N Essex Court
Mequon, WI 53092
January 26, 2002
Attorney General John Ashcroft
Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I was relieved last November when a settlement was finally
proposed in the Microsoft antitrust case. I do not think Microsoft
has done anything worthy of such harsh litigation, and I think that
a settlement would, at this point, be the best thing that could
happen in the case. To my dismay, however, Microsoft's competitors,
who have been relentlessly pursuing the destruction of Microsoft
from the beginning, are currently engaged in undermining the
settlement and seeking further litigation against Microsoft. Ever
since this case was brought to the federal courts, the economy has
declined and the technology industry has suffered. The measures
Microsoft's opponents want to pursue will ultimately de more harm
than good, and I do not believe that the public should have to
suffer simply because Microsoft's competitors want to make some
money.
Microsoft has been very generous in this suit. I think Bill
Gates and his lawyers have shown a great deal of pragmatism in
making so many unnecessary concessions. They have gone beyond what
was required of them in the lawsuit, and have agreed to terms that
restrict parts of their company that have not violated antitrust
law,, The settlement appears to be very fair, and I can honestly see
no good reason for additional litigation. Microsoft has agreed not
to cater into any contract that would require a third party to sell
Microsoft software at any fixed percentage. Microsoft has also
agreed to change its Windows operating system so that it will
support non-Microsoft software, and Microsoft's competitors will be
able to introduce their own software directly into Windows.
I believe it is time to let Microsoft gel back to business, and
the only way to do that is to settle the case. The proposed
settlement is sufficient to prevent future antitrust violations, and
there is no need to continue federal action. I urge you to accept
the settlement.
Sincerely,
Ronald Chikalla
cc: Representative F. James Sensenbrenner, Jr.
MTC-00030076
WP Investments
January 24, 2002
Renata Heese
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington DC 20530
FAX: 202-616-9937
RE: Settlement of U.S. v. Microsoft
Dear Ms. Heese:
I am writing in support of this proposed settlement. I deeply
appreciate the efforts of our government in pursuing antitrust
activities and believe that this settlement is a positive
development in this pursuit. As the former director of a state
agency I know that the government and Microsoft lawyers have fought
diligently in this important case. I would like to see the case
resolved so that private industry can return to competing in the
marketplace. The technology sector of our economy is looking for a
signal to get moving again. The settlement of this case can provide
the right signal that competition is alive and well through
innovation and hard work and not continued litigation.
Please know that t appreciate your consideration of my views on
this important matter.
Sincerely,
Chris Pilley
Partner
729 S. Acadian Thruway
Baton Rouge, LA 70806
225-389-9429
225-387-0309 (fax)
MTC-00030077
FAX
Date: Monday, January 28, 2002
Pages including cover sheet: 2
To:
Phone
Fax Phone (202)6169937
From: James J. Ferraro
A&J Marketing Southeast In.
PO Box 150533
Altamonte Springs FL 32715
Phone +1(407)331-4960
Fax Phone +1(407)331-7137
NOTE: Microsoft Settlement.
??
P.O. Box 150533
Altamonte Springs, FL 32715-0533
January 22, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
Microsoft has been dealing with a hostile government for over
three years now; it is time to put on end to the lawsuit. I am
writing today to encourage the Department of Justice to accept the
Microsoft antitrust settlement. The critics are wrong when they
claim that Microsoft is getting away with lenient terms. The
settlement was arrived at after extensive negotiations under a
court-appointed mediator. Microsoft has agreed to terms that extend
well beyond the products and procedures that were actually at issue
in the suit, simply for the chance to put the issue behind it.
Microsoft has given up the right to charge different computer makers
different prices, thus losing leverage useful in getting its
software promoted. It has also agreed to allow computer makers and
users to remove access to Windows technologies,
[[Page 28815]]
features, and bundled applications, in favor of competing software.
Microsoft has even committed competing software ?? works better with
Windows.
It is time that the government stops harassing Microsoft and
allows free enterprise to re-emerge. The terms of the settlement are
fair and the government needs to accept it. Please exercise your
influence and authority to help make that happen.
Sincerely,
James Ferraro
MTC-00030079
HOUSE OF REPRESENTATIVES
STATE OF UTAH
REPRESENTATIVE JUDY ANN BUFFMIRE
35TH DISTRICT
(SALT LAKE COUNTY)
785 EAST 4255 SOUTH
SALT LAKE CITY, UTAH 84107
HOME (801) 268-1862
STANDING COMMITTEES: EDUCATION; REVENUE AND TAXATION; RULES
APPROPRIATIONS: PUBLIC EDUCATION
January 25, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoj.gov
VIA FACSIMILE COPY TO: (202) 307-1454 or (202) 616-9937
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division, U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
This letter will inform you of my opposition to the proposed
settlement of the Microsoft lawsuit. Although we are from different
political parties, I agree with the Utah Attorney General's reasons
for opposing file proposed settlement--the State of Utah must
defend laws that protect our consumers, protect free enterprise, and
promote competition. It was determined by the trial court that
Microsoft violated the antitrust laws of the United States. That
decision has been reviewed and affirmed by the Court of Appeals, and
the United States Supreme Court has determined not to hear a further
appeal by Microsoft. Microsoft has had ample opportunity to defend
itself against charges that its actions thwarted competition in the
market. These actions have had an adverse impact on Utah consumers,
including some who are my constituents.
Any settlement approved, or any remedy imposed, by the court
must assure that Utah's consumers, including its businesses, are
protected from Microsoft's anti-competitive behavior. I am informed
that the proposed settlement allows Microsoft too much discretion in
determining whether or not certain of the settlement provisions
apply. Such provisions do not protect free enterprise or promote
competition.
Rather than adopting settlement provisions that might lead to
future litigation, I recommend that hearings be conducted by the
court to determine an appropriate remedy that will ensure fair
competition into the future.
Sincerely,
Representative Judy Ann Buffmire
Utah House District 35
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030080
111 NW First Street
Suite 910
Miami, FL 33128
(305) 375-4507
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
To protect the idea of free enterprise in this country, please
make sure to confirm the proposed agreement with Microsoft
Corporation. Microsoft has developed a great product, which tile
public is satisfied with, so any further attempt to infringe on that
could only damage our many years of progress in the PC industry.
Under the review of a committee of software experts, these terms
enable computer makers to re-configure Windows with their own
preferred software offerings, and the ability to manipulate their
supporting features, without reprisal from Microsoft. The top 20
manufacturers will be able to operate without preference on terms
and conditions to license the Windows operating system and any
requirements to distribute or promote Microsoft technologies. Not
only is the offer generous, but also some of the proposed measures
even exceed the Justice Department demands in order to encourage
swift approval of the deal.
It's time to put the legal activities aside and complete this
agreement at the earliest opportunity. There is no reason for
further action against Microsoft, as the company should continue
freely to develop the high-quality software that consumers want and
businesses need. I look forward to your approval.
Sincerely,
Miguel Cordero
MTC-00030081
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am in favor of the decision to settle the Microsoft antitrust
lawsuit. Little will be gained by continued litigation, especially
in light of the vast concessions Microsoft has made. Contrary to
assertions made by their competitors, Microsoft will not be getting
off easy. The settlement agreement will impose numerous restrictions
on the way Microsoft conducts its business. For instance, Microsoft
will not enter into agreements obligating third parties to
exclusively distribute Windows products. They have also agreed not
enforce many of their intellectual property rights. Instead of
calling for more litigation, Microsoft's competitors should be
overjoyed by the changes that will be taking place in Microsoft's
business practices. I tort hopeful the court will approve the
settlement. The time has come for fine parties to move on, and to
focus on other matters.
Sincerely
Michael Baldasare
MTC-00030083
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Attorney General:
With as many people and small businesses that depend on
Microsoft and their products on a daily basis, and considering how
large an impact the company has on the U.S. economy and balance of
trade, I cannot see how the Justice department thought it a good
idea to attack Microsoft. It is like shooting ourselves in the foot
to attack one of, if not the, top businesses in the world. That is
why I was so pleased to hear that you had reached a settlement, This
settlement will mean an end to this issue once and for all. It is
harsh enough to satisfy Microsoft's competitors and yet will leave
the company in one piece to continue innovating. I only hope that
they will respect how much Microsoft is giving up by allowing full
access to key components of its software. This will allow anyone to
use it to enhance their products to better compete with Microsoft's,
without retaliation from Microsoft.
That, without all the other pans of the settlement, should be
enough to satisfy Microsoft's critics. Microsoft has simply gone
beyond what was expected of them in order to end this case. Let's
let them move on and get back to business as usual. In my opinion,
this will make a major part of ending our recession.
Sincerely,
Lee & June Johns
645 Village Lane South
Mandeville, LA 70471
MTC-00030084
PAUL C. THORUP
3148 Creek Road
Salt Lake City, Utah 84121
January 28, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoj.gov
IA FACSIMILE COPY TO: (202) 307-1454 or (202) 616-9937
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B. Hesse Antitrust Division,
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
I write this letter to express my concerns about the proposed
Microsoft settlement. I am a 17-year old high school student working
on a merit badge for my scouting activities. My parents own some
stock in Microsoft, and I have discussed the issue with them to help
me better understand the issues before making up my mind concerning
what type of letter to mite. I am told that the Microsoft proposal
is the result of court action in which Microsoft was found to be in
violation of antitrust laws. I commend Microsoft for its ingenuity
and creativity in bringing products to market, however, I believe
Microsoft may have abused its market power to the
[[Page 28816]]
detriment of its market competitors and consumers.
The courts have determined that Microsoft has violated antitrust
laws. The only thing to determine is what should be done. My parents
suggested to me that breaking-up Microsoft may not be in the best
interest of its shareholders, however, from I have learned, the
proposed settlement has many problems and may not prevent future
violations. This would not be in the best interest of the
shareholders either.
Please hold hearings to decide what remedies should be imposed,
and do not adopt the proposed settlement agreement.
Thank you for your consideration.
Sincerely,
Paul C. Thorup
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030086
MICHAEL SONNTAG
P.O. Box 675
Draper, UT 84020
January 25, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoj.gov
VIA FACSIMILE COPY TO: (202) 307-1454 or (202) 616-9937
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division,
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
I am a concerned consumer who believes that the federal
government is not looking out for my best interests in supporting
the proposed settlement of the government commenced lawsuit against
Microsoft.
I have been concerned for a long time that Microsoft's actions
were not in the best interest of consumers and that its practices
were uncompetitive, designed more to monopolize than provide
reliable products to the market. My concerns were realized when the
Department of Justice was able to prove its antitrust case against
Microsoft. Although the Court of Appeals determined that breaking
Microsoft up would be too punitive, the Court did uphold the
district court's findings that Microsoft violated antitrust laws.
If breaking up Microsoft is too harsh of a remedy, then the
proposed settlement is too lenient of a remedy. Some of the proposed
settlement provisions do not go far enough and others are either not
easily enforceable or are subject to conditions that would allow
Microsoft to determine whether and how to comply. For instance, one
of the driving issues of the lawsuit dealt with Microsoft's failure
to share information with others to allow for the reasonable
development of compatible software. The proposed settlement
agreement would allow Microsoft to determine whether disclosure
should be allowed, based upon Microsoft's determination that
disclosure would harm Microsoft's security of software licensing.
Settlement should be allowed only if past violations are cured
and future violations are prevented. The current proposal, in my
estimation, does neither and should be rejected.
Your truely,
Michael Sonntag
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030087
MIKE BROWNING
88 East Mutton Hollow Road
Kaysville, UT 84037
January 25, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoj.gov
VIA FACSIMILE COPY TO: (202) 307-1454 or (202) 616-9937
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division,
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
I am a supporter of the free enterprise system and believe that
government should generally allow businesses to operate and compete
without government intervention. Nonetheless, I am informed that a
settlement has been proposed in the Microsoft case that may not be
in the best interest of average consumers like me.
I understand that the original trial court held that Microsoft
violated U.S. antitrust laws and that the Court of Appeals did not
overturn that portion of the trial court's decision. If Microsoft
has violated antitrust laws, they have hurt rather than promoted
competition which is one of the most important aspects of a free
enterprise system. This call not be good for the average consumer.
If the proposed settlement does not resolve the antitrust
violations, then Microsoft's conduct could continue into the future,
therefore, I ask that you not accept the proposed settlement and
take whatever action may be appropriate to properly protect the
interests of consumers.
Sincerely,
Mike Browning
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030088
POH
42 Quail Run Warren, NJ 07059
Telephone: 732-302-9608
Number of Pages (Including cover) 2
To: Attorney General Mr. John Ashcroft
From: Ann Poh
Company: US Department of Justice
Date: 1/28/02
Fax Number: 1-202-307-1454 Phone Number:
Reply Requested: Yes [ ] No [ ]
Notes/Comments:
Letter attached. Thank you.
POH 42 Quayle Run
Warren, NJ 07059
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to express my opinion of the recent settlement
between Microsoft and the US Department of Justice. The lawsuits
have been too long to date and need to be ended. I feel that
Microsoft has been a victim of personal vendettas and greed and has
gotten a raw deal even in temps of the recent settlement.
The settlement is harsh and requires Microsoft to give up
interfaces that are internal to their Windows products and design
future Windows version so that computer makers, software developers,
and consumers can more easily promote their own products. These
concessions should be enough to appease all parties that are part of
dispute so it amazes me that 9 states want to continue litigation.
Please ignore this opposition for the sake of our IT sector and
economy. Our nation needs your office to take a strong stance and
uphold principles of free enterprise.
Sincerely,
Ann Poh
MTC-00030090
423 NW 21st Street
Oklahoma City, OK 73103
January 19, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
This is to address the recent settlement between the Department
of Justice and Microsoft. I want to give my support to this
agreement. It has gone on far too long. I opposed the initial
lawsuit. It was not warranted. Microsoft, through Bill Gates, has
done nothing but benefit the consumer with his technology. I use
Microsoft software programs, operating systems, everything, because
they work better than the other programs on the market. If another
firm were to put out a better product, I would use that one. The
antitrust suit was nothing more than a bunch of crybabies getting
together and trying to cripple the one firm they could not compete
with, and the Department of Justice fell right into line. I know
there is a great desire to break up Microsoft, but I cannot think of
any thing worse for the industry or the country. AT&T was broken
up; our phone system has gotten worse ever since. I get ten
different bills, none of which I understand, and my phone service
keeps increasing in price. When you need to call service, you are
always switched somewhere else; no one takes responsibility. This is
what would happen with Microsoft. Further, those who are rivals of
Microsoft, and those who see any big business as evil, would sit
gleefully on the side, cheering.
Microsoft has agreed to terms that extend well beyond the
products and procedures that were actually at issue in the suit.
Microsoft has agreed to allow computer makers to ship non-Microsoft
product to a customer; Microsoft has agreed to design future
versions of Windows with a mechanism to make it easier to promote
non-Microsoft software; Microsoft has agreed to document for use by
its competitors various interfaces that are internal to
Windows"
[[Page 28817]]
operating system products--a first in an antitrust settlement.
Whatever "sins" Microsoft has committed, they have
more than paid for. Give your support and approval to the agreement.
Thank you.
Sincerely,
E. Claudine Long
CC: Senator Don Nickles
MTC-00030091
ERIC MECHAM
3274 East 7800
South Salt Lake City, UT 84121
January 27, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoj.gov
VIA FACSIMILE COPY TO: (202) 307-1454 or (202) 616-9937
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B, Hesse Antitrust Division,
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
I understand you are receiving comments concerning the proposed
Microsoft settlement, and I wish to be heard on the subject.
I believe it was appropriate for the Department of Justice to
bring the antitrust case against Microsoft concerning its anti-
competitive actions. It was long overdue. However, I am concerned
that the case is being settled without imposing appropriate remedies
against Microsoft. This is not the first case brought against
Microsoft. Each time, the parties thought they had resolved their
problems only to find that Microsoft had found a way around
compliance with the settlement agreement. Therefore, settlement of
those prior cases has not well-served the public interest in having
Microsoft stop its anti-competitive behavior.
Microsoft has proven that it can not be trusted to self-police,
and the language of the proposed settlement agreement is not tight
enough to prevent future violations of antitrust laws. Some of the
agreement's provisions grant too much discretion to Microsoft to
determine if and when they will comply with some of its provisions.
If left to enforce the agreement itself, Microsoft find a way to
interpret the agreement in its favor. This is only natural, however,
it does not solve the problems that concerned the Department of
Justice in the beginning.
Microsoft has already been found to have violated federal
antitrust laws. Break-up may be the only way to finally rein
Microsoft in, however, whatever remedy is finally imposed, it must
take into account past and the potential for future violations of
the same laws. The proposed settlement does not do this. The
proposed agreement does not prevent future anti-competitive actions
against vendors, suppliers, retailers and competitors.
I request that any settlement or court order be tightly worded
to avoid any question as to Microsoft's obligation to comply.
Sincerely,
Eric Mecham
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030092
PATRICIA CHRISTELLO
Honorable Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1.200
Washington, DC 20530-0001
RE: U.S. v Microsoft
Dear Judge Kollar-Kotelly,
I am writing with regard to the settlement between the
Department of Justice and Microsoft in U.S. v Microsoft. This
proposed settlement allows Microsoft to safeguard and bolster its
monopoly, while also allowing Microsoft to use anticompetitive
strategies to spread its dominance into other markets.
The deal does not promote innovation in this vital sector of our
economy. The enforcement provisions are vague and it seems there are
many loopholes loft in the settlement. At a time when security is of
vital importance to both our government and corporations it would
seem eminently important that we do not curb the production of new
products in an attempt to protect an illegal monopoly,
Microsoft has been found liable before the District Court, they
subsequently lost an appeal in a 7.0 decision to the U.S. Court of
Appeals for the District of Columbia, have had their rehearing in
the appellate court denied, and its appeal to the Supreme Court
denied. It is time we rectify those inadequacies and promote the
true nature of free markets to keep from hindering innovation in the
marketplace.
The court must find a solution that meets the appellate court's
standards and avoid any future anticompetitive strategies.
I appreciate you taking the time to consider this matter
further.
Sincerely,
Patricia Christello
Business Manager
MTC-00030093
GREGORY M. D'AGOSTINO
Honorable Colleen Kollar-Kotelly
US District Court, District of Columbia
C/O Renata Hesse
Antitrust Division
United States Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
RE: US v Microsoft
Dear Judge Kollar-Kotelly,
I am writing with regard to the settlement between the
Department of Justice and Microsoft in US v Microsoft. I realize
there has been much discussion over many years concerning this
matter. In light of that, it seems a more equitable solution could
have been reached. The specifics of this settlement appear to
violate antitrust laws.
As it stands now, Microsoft has the capacity to bolt financial
services, cable or even the Internet to Windows hindering
competition. In addition Microsoft makes the decision as to what
technologies will be compatible with its Windows. This makes it very
difficult for companies to develop software or for that matter find
investors to provide venture capital for their companies. It is
interesting to note that currently Microsoft Windows and Office
Suites enjoy over a 90% user status. Expansion into other markets
will expand that usage even more. At a time when computer technology
companies should be challenged to address security and privacy
issues in government and corporations, the inability to compete is.
certainly not making it an environment good for growth. The
settlement provides many loopholes, which could well keep the issue
in litigation for years.
The computer software market should be buttressing the economy
rather than adding to its sluggishness. Without competition, venture
capital and an expectation of success it is very likely this
industry will continue its downward slope. It is interesting to look
at the monopoly of Microsoft and note the growth in the company as
compared to other companies who do not have the ability to control
most aspects of the market. The affect on consumers will be
reflected in the high cost of software.
Given that nothing in the settlement hinders Microsoft, there
should be little change in its business operation. It appears
Microsoft plans to expand to financial, cable and the Internet,
which will only serve to expand its control.
Although Microsoft will be required to share technology if it is
reasonably necessary it also will determine which companies'
technologies will be compatible with Windows. Microsoft will appoint
one member of the three-person technology committee, the Department
of Justice appoints another and they must both agree on the third.
It is likely companies will be reluctant to take on a Microsoft
with a challenge, as their future business may well depend on their
relationship with Microsoft. Given that Microsoft will be able to
charge whatever it wants for its products, prices will skyrocket.
It seems a more equitable solution could be determined, If I may
be of any assistance, please contact me.
Sincerely,
Gregory M. D'Agostino
Consultant
CC: Attorney General Tom Reilly
MTC-00030094
Holme Roberts & Owen LLP
Dee L. Heugly
heuglyd @ hro.com
Attorneys at Law
111 East Broadway
Suite 1100
Salt Lake City, Utah
84111-5233
Tel (801)521 5800
Fax (801) 521-9639
www.hro.com
Salt Lake City
Denver
Boulder
Colorado Springs
London
January 28, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoj.gov
VIA FACSIMILE COPY TO: (202) 307-1454 or (202) 616-9937
[[Page 28818]]
1ST CLASS MAIL TO:
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
Please add my name to the list of those who believe that the
court should not adopt the proposed settlement in the Microsoft v.
DOJ case.
I firmly believe that markets should be open and free to
competition. When adequate competition exists, consumers generally
benefit. When competition does not exist, consumers are generally
harmed to the benefit of one player controlling the market. The
federal courts have already determined that Microsoft has so
controlled the market that it is in violation of U.S. antitrust
laws. Notwithstanding Microsoft's attempt to strike a better deal
with the DOJ than it might receive from the court, the proposal
falls short of the goal of remedying past conduct and preventing
future anti-competitive acts in the future.
Microsoft has proven to be a super-charged competitor in the
market place and requires the special attention of the court to
deter it from once again becoming too dominant in the market. Please
reject the proposed settlement and conduct whatever hearings may be
necessary to determine a proper remedy. Respectfully,
Dee L. Heugly
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030095
Holme Roberts & Owen LLP
Abigail L. Jones
(801)323 3265
slolebr @ bro.com
Attorneys at Law
111 East Broadway
Suite 1100
Salt Lake City, Utah
84111-5233
Tel (801) 521-5800
Fax (801) 521-9639
www.hro.com
Salt Lake City
Denver
Boulder
Colorado Springs
London
January 28, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoj.gov
VIA FACSIMILE COPY TO: (202) 307-1454 or (202) 616-9937
1ST CLASS MAIL TO:
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
I write to express some concerns with the proposed settlement in
the Microsoft v. DOJ case. I am informed that the Microsoft case
will be returning to the federal district court for the purpose of
imposing a proper remedy. Appropriate sanctions and penalties in an
antitrust suit generally require that the violator discontinue past
anti-competitive conduct, provide a component to compensate for the
damage caused by the past violations, and include conditions under
which the violator can operate to prevent future violations.
Although this can occur through settlement, it is appropriate for a
court to have sufficient supervision over the settlement and
approval of its provisions to ensure that future violations will not
likely re-occur.
I am informed that the proposed settlement does not go far
enough to ensure that there will be an open and fair market place in
the future. Microsoft can not be allowed to have too much discretion
concerning release of its access codes, otherwise, competitors will
not be able to develop compatible products and vendors will once
again be required to market software packages according to
Microsoft's direction, without competition.
It is time to bring this litigation to an end and correct
improper market conduct. It appears this will only occur if the
court takes a strong hand to craft and be willing to enforce
sanctions designed prevent past conduct from re-occurring. Please
reject the proposed settlement and fashion your own remedy based
upon the facts and law applicable to this case.
Respectfully,
Abby L. Jones
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030096
Holme Roberts & Owen LLP
Jennifer N. Byde bydej @ hro.com
Attorneys at Law
111 East Broadway
Suite 1100
Salt Lake City, Utah
84111-5233
Tel (801) 521-58oo
Fax (801) 521-9639
www.hro.com
Salt Lake City
Denver
Boulder
Colorado Springs
London
January 28, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoi.gov
VIA FACSIMILE COPY TO: (202) 30%1454 or (202) 616-9937
VIA FIRST CLASS MAIL TO:
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B. Hesse Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
I write to object to the proposed settlement in the Microsoft v.
DOJ case.
The federal district court determined that Microsoft has
violated United States antitrust laws and the Court of Appeals
reviewed and sustained that finding. The Court remanded the case to
the district court for a determination of the appropriate remedy. At
long last, the case can proceed and the Court may impose appropriate
remedies for violations U.S. antitrust law. Although I personally
find Microsoft's cavalier attitude towards antitrust laws troubling,
and feel that the break-up may be appropriate under certain
circumstances, I understand that the Court of Appeals has already
determined that break-up is not an appropriate remedy. I further
understand that the DOJ has agreed to a settlement of the matter on
terms that I believe are wholly inadequate and partially
unenforceable. Therefore, I ask that you not approve the settlement
and hold your own hearings to determine and impose an appropriate
remedy.
Respectfully,
Jenniffer Byde
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030097
DAVID & BRANDY STEWART
44 West Broadway, Suite # 803
Salt Lake City, Utah 84101
January 26, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoj.gov
FACSIMILE COPY TO:" (202) 307-1454 or (202)
616-9937
1ST CLASS MAIL TO:
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
I have been asked to share some of my feelings relative to the
proposed settlement of the Microsoft v. DOJ litigation.
I am a CPA with a large accounting firm and consider myself as
pro-business. I generally do not advocate government intrusion into
the free market system and would prefer that the competitive market
place correct any problems. Unfortunately, when one player is too
dominant in the market place and aggressive in using its dominance,
the competitive market place can not properly function. This appears
to be the case with Microsoft. The federal trial court determined
that Microsoft was in violation of U.S. antitrust law by virtue of
some of its marketing and other practices. This portion of the
court's decision was affirmed by the Court of Appeals and was
allowed to stand by the U.S. Supreme Court. Whenever violations of
antitrust laws are found to be present, reasonable measures must be
taken to deter similar conduct in the future and to deal with the
harm caused by past actions. From what I understand about the
proposed Microsoft settlement, it does not contain reasonable,
enforceable measures to accomplish this result. I am particularly
concerned that Microsoft has too much discretion concerning its
future compliance with some of the important provisions of the
settlement agreement- those that would require sharing of source
codes with competitors so that compatible products can
[[Page 28819]]
be developed. Without assurances that Microsoft will no longer
engage in anti-competitive behavior, nothing will have been gained
by the litigation, and the consumers will continue to be harmed
thereby.
A proper resolution to the case would entail the imposition of
appropriate sanctions and conditions of operation. This can only be
done by the court following hearings. Adoption of the proposed
settlement will not protect the rights of consumers into the future.
Respectfully,
David Stewart
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030098
BECKY T. KINZEL
2654 E. Lincoln Lane
Salt Lake City, Utah 84124
January 25, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoj.gov
VIA FACSIMILE COPY TO: (202) 307-1454 or (202) 616-9937
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division, U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
My perspective on the proposed Microsoft settlement is somewhat
unique. My family owns stock in Microsoft and is a consumer of its
products. We purchased Microsoft stock several years ago because of
its tremendous growth potential. Unfortunately, because of the
Microsoft lawsuit and the national economy, our stock has not
performed as well as we would have hoped. We believe that Microsoft
will not reclaim its great growth potential until the government
lawsuits are concluded and all hints of antitrust violations are
silenced. Although we would welcome an end to the lawsuit through
settlement, there is enough opposition and legitimate questions
raised concerning the proposed settlement that litigation could be
unnecessarily extended or result in additional lawsuits in the
future as the various parties attempt to enforce or comply with the
proposed settlement. A judicial resolution after reasoned argument
before the court seems to offer a greater likelihood of economic
stability and growth for Microsoft. This would be best for Microsoft
shareholders. We are confident that Microsoft will meet any
challenge and would continue to succeed in a more competitive
marketplace.
Therefore, I recommend that the court not adopt the proposed
settlement, but impose reasonable, but not punitive sanctions
against Microsoft based upon evidence presented at future hearings.
Sincerely,
Becky T. Kinzel
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030099
MICHAEL K. EVENS
24 Wanderwood Way
Sandy, UT 84092
January 26, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoj.gov
VIA FACSIMILE COPY TO: (202) 307-1454 or (202) 616-9937
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division, U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
I appreciate the opportunity to comment concerning the proposed
Microsoft settlement. I generally believe in free market principles
and the least amount of government intrusion into business practices
and market competition, however, I am concerned that adoption of the
proposed Microsoft settlement will not accomplish what is necessary
to prevent future antitrust violations by Microsoft.
Although the proposed settlement pays lip service to penitence
for past behavior and contains provisions intended by the Justice
Department to prevent future violations, the actual language appears
to be so broad as to provide loop-holes to future compliance. Rather
than engaging in another round of lawsuits five or ten years from
now, the better course would be to impose a proper, enforceable
remedy now. This will likely require hearings before the court, but
further hearings now will benefit consumers in the long run if it
prevents violations and further litigation in the future. Please do
not adopt the proposed settlement.
Sincerely,
Michael K. Evans
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030100
01/28/2002 16:05 FAX 8015219639
HOLME ROBERTS & OWEN LLC
??001/002
ART PURCELL
5197 Spring Clover Drive
Murray, UT 84123
January 26, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoj.gov
VIA FACSIMILE COPY TO: (202) 307-1454 or (202) 616-9937
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B. Hesse Antitrust Division, U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
I understand you are receiving comments concerning the proposed
Microsoft settlement, and I have an opinion on the subject. The
antitrust case brought by the Department of Justice is not the first
case brought against Microsoft concerning its anti-competitive
actions. Unfortunately, settlement of those prior cases has not
well-served the public interest in having Microsoft stop its anti-
competitive behavior. Microsoft has a way of wriggling out of
settlement language.
The language of the proposed settlement agreement is not tight
enough to prevent future violations of antitrust laws. Some of the
agreement's provisions grant too much discretion to Microsoft to
determine if and when they will comply with some of its provisions
and fail to address the tactics of "fear, uncertainty and
doubt" that Microsoft has used on competitors" customers
to drive them into Microsoft's camp and to squash competitors.
Microsoft has already been adjudged to have violated federal
antitrust laws. Although break-up may be too harsh of a remedy, the
remedy finally adopted by the court must consider past, as well the
potential, for future violations of the same laws. The proposed
settlement does not do this. It does not reduce Microsoft's power to
impose anti-competitive conditions upon vendors, suppliers,
retailers and competitors. Any settlement or court order must be
tightly worded to avoid any question as to Microsoft's compliance
obligations.
Sincerely,
Art Purcell
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030101
LOUISE ANDERSON
11102 9TH AVE CT S
TACOMA, WA 98444
253-474-9421
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Ave. NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am in favor of the Microsoft antitrust case settling. Three
years of litigation is enough. In my opinion, this lawsuit should
never have been filed against Microsoft. Despite this belief, I
would like to see the Court approve the settlement agreement that
the parties worked hard to negotiate. Any threat of future anti-
competitive behavior should be dispelled by the terms of the
settlement agreement. Microsoft has agreed not to retaliate against
those who promote or distribute programs that compete with Windows.
They also agreed to a uniform price list for the largest computer
manufacturers. Beyond the terms of the settlement agreement, nothing
further should be required of Microsoft. Little will be gained by
continuing to litigate this case. i applaud your efforts to resolve
the lawsuit.
I've enclosed my address and phone number, in the event that you
would like to contact me.
Respectfully.
Louise Anderson
INC. RV MTRS. SIDE SOUTH : FROM
MTC-00030103
406 Gerald Street
State College, PA 16801
January 11, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to express my disagreement with the lawsuit that
was brought against
[[Page 28820]]
Microsoft by the federal government. While the antitrust case has
been dragged out way too long, I am glad to see that a settlement
has finally occurred.
The concessions seem fair and reasonable and I am confident that
they would probably have occurred anyway without the government's
interaction, because I believe the government should stay out of
free enterprise's business and let them weed out their own problems.
Under the terms of the settlement there will be increased relations
with computer makers and software developers which is a good thing
for the IT industry. There will also be a three-person committee to
monitor Microsoft's compliance with the settlement. These represent
to concessions that show Microsoft is looking out for the best
interests of the public and themselves.
The question is whether or not the government is looking out for
our best interests. The nine states holding out seem to be
grandstanding their own political agendas instead of trying to help
our ailing IT sector. I urge your office to help quell the
opposition. IT is time for this matter to end.
Sincerely,
John Davis
cc: Senator Rick Santorum
MTC-00030104
FROM:
FAX NO. :
Sep. 10 2001 06:33AM P1
Richard Gardner
11 Carpenter Lane
Newburg, PA 17240-9219
January 17, 2002
Attorney General John Ashcroft
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am very happy to hear the Department of Justice has reached a
settlement. I firmly believe that this settlement is in the best
interests of the state, the IT industry, and the economy. Microsoft
opponents would like us to believe that Microsoft has gotten off
easy in this settlement, but this is not the case. Microsoft has
been made to endure three long years of litigation in order to
arrive at the terms of this settlement. The terms of the settlement,
in my opinion, are fair and reasonable, and, if adhered to, will do
much benefit consumers and avoid future anti-competive behavior.
Microsoft has already proven its willingness to comply with the
terms of the settlement. They have agreed to establish a uniform
pricelist, grant intellectual property licensure to third parties,
the establishment of a three person Technical Committee consisting
of software engineering experts to help with dispute resolution.
With the current recession and its devastating effects on the
state and federal budget, is very important that the technology
industry be allowed to concentrate on business now rather than being
distracted by a suit of this magnitude. The public appreciates your
efforts to resolve this as soon as possible.
Sincerely,
MTC-00030105
January 28 20 02:57p
[206] 722-5078
202.307.1455
3450 Cascadia Ave. S.
Seattle, WA 98144
206.722.5078
dwburroughs @ attbi.com
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing in support of the Microsoft antitrust settlement
agreement. As someone who works in the technology industry, I see
the benefits of the parties settling this case. Protracted
litigation is not in anyone's best interest.
The settlement agreement will mean many changes will be made to
the way Microsoft conducts its business. These changes appropriately
deal with the concerns raised about anticompetitive behavior on
Microsoft's part. By way of example, the settlement agreement will
require Microsoft to establish a uniform price list. Microsoft will
license Windows to the 20 largest computer makers at the same price.
Additionally, Microsoft has agreed not to enter into contracts with
third parties that would require that party to exclusively
distribute Windows. These types of changes in Microsoft's business
practices will help restore fair competition. I urge the Department
of Justice to continue working toward a prompt resolution of this
case.
Thank you for your time and attention.
Sincerely,
David Burroughs
MTC-00030106
Karl Spielman
2609 N. W. Marker St
Seattle, WA 98107
(206) 365-2564 home
(206) 365-5049 fax
(435) 260-1383 cell
email: 2kadspieiman @ hcme.com
Utah Back County Pilots
Resource Access
Skypark Airport
Officer
1887 S. Redwood. Box 16
Woods Cross, Utan 8408/
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington DC 20530
Dear Mr. Ashcroft.
For the past three years, the Microsoft antitrust suit has
lingered in the federal courts. Six months ago, round-the-clock,
mediated negotiations began, and last November, a settlement was
proposed. That settlement is pending approval, and next week, it
will be determined whether or not the terms are satisfactory. I
believe they are, Fully half of the plaintiff states in the case do
not agree and are actively seeking to undermine the settlement on,
the federal level and extend litigation against Microsoft.
The settlement is not only just it is fair. There is no reason
to continue litigation. .Microsoft has even agreed to terms that
extend to policies and technology that were not declared unlawful by
the federal court of appeals. All of the conditions in the
settlement are aimed at restoring a fair competitive atmosphere
within the technology market and preventing further antitrust
violations on Microsoft's part. For example, Microsoft will refrain
in future from taking retaliatory action when software developers or
computer makers introduce a product into the market that directly
competes with Microsoft technology Microsoft has also agreed to
reformat future versions of Windows to support non-Microsoft
software, and furnish third parties acting under the terms of thc
agreement with a license to pertinent intellectual property rights
to prevent infringement. I do not believe that additional action is
necessary on the federal level. The settlement addresses the
concerns both of the defendant and the plaintiffs, and further
li??gation will not only be red??, it will also ?? ??tting and
costly. It is time to move on. I urge you to support the
finalization of the settlen??
Sincerely,
Karl Spielman
MTC-00030108
Facsimile Transmittal Sheet
Fax Date 1/28/02
To: ??orney General John Ash??
Fax #: 1 202 307 1 454
From: Jerri P??wson
Subject: microsoft antitrust CAST
Total Pages: 2
2045 SW Leewood Drive
Beaverton, Oregon 97006
January 27, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I fully support the settlement of the Microsoft antitrust case.
The litigation has dragged on for long enough. The resources of both
the government and Microsoft alike would be better spent pursuing
other matters.
The settlement agreement's terms are reasonable. Once the
settlement is finalized, there will be no grounds for any further
complaints on the part of Microsoft's competitors. They will be
getting Microsoft's internal operating system information, and will
basically be free to infringe upon Microsoft's intellectual property
rights. Microsoft is essentially giving up many of its rights in the
interest of settling this case.
With these types of concessions, I see no reason for any further
action at the federal level against Microsoft. Your efforts toward
putting this case to rest are greatly appreciated.
Sincerely,
Jerri Pawson
MTC-00030109
FAX
STONER CHIROPRACTIC OFFICE
515 South Broad Street
Lititz, PA 17543
Phone (717)626-2051 Fax (717)626-7398
E-mail ipaulstoer @ dejazzed.com
To: Attorney ?? ?? ??
From: I Paul Stoner, DC
Dale: 1-27-02
#Pages: 1
[[Page 28821]]
(excluding ??)
I Paul Stoner
515 South Broad Street
Lititz, PA 17543
January 12, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
The federal government's actions in its case against Microsoft
have been truly disappointing and inappropriate. The fact that many
states have yet to settle simply illustrates the point that their
interests do not lie seeking justice but rather seeking their piece
of the pie. We have seen other examples of this miscarriage of
justice in our government before, never one so blatantly frivolous
and inappropriate.
For that reason, the settlement that was reached in this case
last November should be implemented immediately and the issue should
immediately cease to exist. Settlement is more than adequate to
accomplish the stated goals of the government's suit. In fact
Microsoft has accepted restrictions and obligations pertaining to
products and practices that were not even issue at the lawsuit.
Therefore no further actions need to be implemented against
Microsoft. For the benefit of all involved in this case, and indeed
the entire country, it is my firm belief that this issue be resolved
immediately. This can only be accomplished if the current settlement
is implemented without further delay.
Cc: Senator Rick Santorum
MTC-00030110
STEVE HALLMARK
7929 South DaVinci Dr.
Salt Lake City, Utah 84121
January 27, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoj.gov
VIA FACSIMILE COPY TO: (202) 30%I454 or (202) 616-9937
1ST CLASS MAIL TO:
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
I write because of some concerns I have about the proposed
Microsoft settlement. While I am not advocating that Microsoft be
broken-up into parts as an appropriate remedy for its antitrust
violations, I am concerned that the proposed settlement will not
accomplish what it is intended to do, e.g. create a competitive
market place, benefit consumers, and rectify past conduct.
I am informed that the proposed settlement is too lenient on
Microsoft and may place to much discretion in Microsoft's hands in
whether and how to comply with the agreement. Such an agreement will
not create of competitive market place or be of long-term benefit to
consumers. I would be more comfortable if the court were to conduct
hearings during which the parties in interest can voice their
concerns and offer evidence and legal precedence. The court can then
impose an appropriate remedy that will ensure compliance into the
future.
Thank you for your consideration.
Respectfully,
Steve Hallmark
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030111
FAX COVER SHEET
DATE: January 28, 2002
TO: JOHN ASHCR?? (202)--307--1454 US ATTORNEY GENERAL
FROM: T. Clifford Smith
PHONE: 513-385-8577
FAX: 513-385-4491
Number of pages including cover sheet: 2
Comments: ??
T. Clifford Smith
6480 Dry Ridge Road
Cincinnati, Ohio 45252-1748
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue
Washington, DC 20530-001
Dear Mr. Ashcroft:
It is my opinion that the antitrust suit against Microsoft
should never have existed in the first place. However, since it did,
I am glad to see that there has been a settlement to the case. It
took over three years for the Justice Department to finally settle
the case with Microsoft, and I fully support that settlement.
As I'm sure you're aware Microsoft has never harmed anyone;
instead it was a large part of the reason for the success of the
economy in the 1990's that has been unrivaled throughout history.
Thousands upon thousands of people who are employed owe their jobs
to Microsoft, as do students who are attending college under
scholarships that Microsoft created. Let us not forget all of the
charities that Microsoft has donated millions of dollars to.
Microsoft has agreed to several changes in the way they conduct
their business that will promote greater competition to Microsoft
software programs. Microsoft agreed to make it easier for computer
makers, software developers and consumers to reconfigure Windows at
any time. Since Microsoft has agreed to such significant demands,
its competitors should look favorably on this settlement.
The antitrust suit against Microsoft should never have been
brought in the first place, but since it was, I am happy to see that
a settlement has been reached.
Sincerely yours,
T. Clifford Smith
MTC-00030112
Advanced Custom Software Development
Microsoft certified Partner
January 28,2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
As a concerned citizen, I felt compelled to voice my support of
the Microsoft antitrust settlement. This settlement is designed to
be fair and reasonable to both sides, ensuring compensation to
Microsoft competitors and giving consumers more choices.
This settlement will be beneficial to both the IT industry and
the consumers alike. Among other things in the settlement, Microsoft
has agreed to the establishment of a three-person "Technical
Committee" to monitor its conformity to the agreement and
assist with dispute resolution. Microsoft has also agreed not to
retaliate against computer-makers that may ship software that
competes with the Windows Operating System.
This settlement was reached after three years of court battles.
It is mandatory that this agreement be finalized. The whole escapade
has been an excessive abuse of our tax dollars. Thank you for your
work on this case, and as attorney general.
Sincerely,
Peter Bausbacher
President
1755 N. Collins Blvd., Suite 300
Richardson, Texas 75080
(972) 644-9763
Fax (972) 644-2846
www. ProtoLiak.com
MTC-00030113
Fax Cover Sheet
122 E Clay Ave
W Hazleton, PA 18202
570-459-6777
Send to: Attorney General John Ashcroft
From: Carolyn A
Mar??enssen
Attention:
Date: 1/28/02
Office Location: Washington, DC
Office Location: W Hazleton, PA
Fax Number: 202-307-1454
Phone Number:
570-459-6777
Total pages, including cover: 2
Comments:
Carolyn Martienssen
122 E. Clay Avenue
West Hazleton, PA 18202-3834
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing in full support of the recent settlement between
the US Department of Justice and Microsoft. The antitrust case has
gone on for too long and is not fully justified. Not only has
Microsoft created jobs and wealth for our nation, but also it has
made technological breakthroughs that have standardized the IT
industry. I have never felt my rights as a consumer have been
infringed upon.
In fact, making Microsoft give away interfaces that are internal
to their Windows operating system products is a violation of their
intellectual property rights. Microsoft has worked long and hard to
develop those products that outdo all their competitors. As bad as
the settlement is however, it is better than further litigation.
Implement the settlement as soon as possible. It is in the best
interest of the American public if you finalize this dispute. Thank
you.
[[Page 28822]]
Sincerely,
Carolyn Martienssen
cc: Senator Rick Santorum
MTC-00030114
Fax Cover Sheet
122 E Clay Ave
W Hazleton, PA 18202
570-459-6777
Send to: Attorney General John Ashcroft
From: Carolyn Martienssen
Attention:
Date: 1/28/02
Office Location: Washington, DC
Office Location: W Hazleton, PA
Fax Number: 202-307-1454
Phone Number: 570-459-6777
Total pages, including cover: 2
Comments:
Carolyn Martienssen 122 E. Clay Avenue
West Hazleton, PA 18202-3834
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing in full support of the recent settlement between
the US Department of Justice and Microsoft. The antitrust case has
gone on for too long and is not fully justified. Not only has
Microsoft created jobs and wealth for our nation, but also it has
made technological breakthroughs that have standardized the IT
industry. I have never felt my fights as a consumer have been
infringed upon.
In fact, making Microsoft give away interfaces that are internal
to their Windows operating system products is a violation of their
intellectual property rights. Microsoft has worked long and hard to
develop those products that outdo all their competitors. As bad as
the settlement is however, it is better than further litigation.
Implement the settlement as soon as possible. It is in the best
interest of the American public if you finalize this dispute. Thank
you.
Sincerely,
Carolyn Martienssen cc: Senator Rick Santorum
MTC-00030115
Fax
To: Attorney General John Ashcroft
From: William Liu
Fax: 2V2-307-1454
Pages: 2
FAX 2:
Date: 1/28/2002
Re: Microsoft Settlement
Comments:
Dear Mr. Ashcroft,
Attached is my opinion on the recent settlement proposed by
Microsoft. Please review for your references. Thank you.
Sincerely,
William Liu
Microlink Enterprise, Inc.
13731 E. Proctor Ave.
City of Industry, CA 91746
Phone:626-330-9599 x 114
Fax: 626-330-4095
MICROLINK
ENTERPRISE INC.
January 15, 2002
Attorney General John Ashcroft, USDOJ
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
Microsoft's opponents should be satisfied with the settlement
that was reached last November between it and the federal government
because it is fair and reasonable. In fact, it goes above and beyond
the scope of the claims of lawsuit, which should make them content.
Unfortunately, it appears that certain of Microsoft's adversaries
are unsatisfied with the settlement and will probably never be until
Microsoft is broken up by the government, which is a step that would
not resolve any issues the Microsoft adversaries state as problems,
and undermine the original intent of the antitrust laws, which is to
protect the consumers.
Reasonable people recognize that the settlement is fair. It
addresses all of the complaints of Microsoft's adversaries. For
example, one of the main complaints was that Microsoft did not allow
computer makers to offer any non-Microsoft software without fear of
retaliation. In the settlement, Microsoft agreed to not retaliate
against computer makers if they choose to ship software that
competes with anything Microsoft develops. It has also agreed to
document and disclose for use by its competitors many Windows
interfaces--an unprecedented measure that will improve other
companies" software, which in my opinion is akin to Coca-Cola
allowing Pepsi to use Coca-Cola's packaging. Lastly, Microsoft has
agreed not to enter into any agreements obligating any third party
to distribute or promote any Windows technology exclusively. There
are several more components to the settlement but these are the most
profound, in my estimation.
I sincerely hope the settlement is implemented. Too many
technology companies have been sitting on the sidelines wondering
about the effect of this trial, and it is time to get this ordeal
behind us so the technology industry can get back to innovating
instead of pondering the future of one of the pioneering agencies.
Thank you.
Sincerely,
William Liu
O/Administrative Coordinator
13731 E. Proctor Avenue,
City of Industry, CA 91746
Phone: (626)330-9599
Fax (626) 330-8399
* www.microlinkinc.com
MTC-00030116
TechWorld Computer Services + Training, LLC
1231 Perry Hill Road Ste. B
Montgomery, AL 36109
334-396-1762
334-396-1764-FAX
www.techworldtraining.com
Facsimile transmittal:
To: ??
Fax: (202) 307-1454
From: ??
Date:1/28/02
Re:
Pages: 2
CC:
Notes:
TechWorld Computer Services Training
1231 Perry Hill ??
?? 36109-5208
January 28, 2002
Attorney General John Ashcroft,
Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing to inform you that I believe that the settlement
reached between Microsoft and the Justice Department is beneficial
to the economy. If litigation continues, the effect on the economy
and the industry will be far more detrimental than it has been. When
issues like this come about, consumer confidence drops, thus
affecting the industry. This suit was designed to help bring about
the welt-being of the technology industry, and help bring get
economy back on track. The settlement guides Microsoft to design all
future versions of Windows to be compatible with non-Microsoft
products. Microsoft has also agreed to the establishment of a three-
person "Technical Committee" that will monitor its
compliance to the agreement.
It is vital that all action that the federal government is
taking regarding this case be stopped. The taxpayers do not have the
resources to have this case carry on any longer. I urge you to
finalize this settlement and allow Microsoft to return to leading
industry.
Sincerely,
Angela Davis President
MTC-00030117
To: Attorney General John Ashcroft
Company:
From: Son Integration, Inc.
Subject: Microsoft Settlement
January 22, 2002
Attorney General John Ashcroft
US Department of Justice
930 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
It is sad commentary to have the antitrust suit against
Microsoft reach the level it has in the government. The suit sends
the wrong message that free enterprise is threatened in the United
States. I would agree that Microsoft has not always been on the
straight and narrow, but I think it is fair to build a company and
have people choose to become dependant on your products.
Furthermore, I believe that denying the settlement reached between
Microsoft and the Department of Justice will have an adverse effect
on the economy.
The current settlement process appears to be stifling the free
market, but l believe it is necessary to settle the case as soon as
possible to help the economy and industry move forward. Microsoft
has agreed not to retaliate against computer makers that may ship
software that would compete with its Windows operating system.
Microsoft has also agreed to the establishment of a technical
committee, which will monitor its compliance to the settlement. I
view this suit as an attack on democracy and a hindrance of the
capitalist ethic. There are many other pressing matters that the
nation can be concentrating on, so I urge you to help the free
market flourish and finalize this suit,
[[Page 28823]]
Sincerely,
Greg Steirer President
MTC-00030118
ROB WALKER
5572 South Red Cliff Dr., #D
Salt Lake City, UT 84123
January 28, 2002
SENT VIA:
E-MAIL TO: Microsoft.atr @ usdoj.gov
VIA FACSIMILE COPY TO: (202) 307-1454 or (202) 616-9937
The Honorable Colleen Kollar-Kotally
U.S. District Court, District of Columbia
c/o Renata B. Hesse
Antitrust Division,
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement
Dear Judge Kollar-Kotally:
I appreciate the opportunity to express my opinion concerning
the proposed Microsoft settlement. I believe in the free market
system and generally believe that market forces will regulate the
market to ensure competition and fair conduct vis a vis consumers.
Unfortunately, where meaningful competition does not exist, free
market principles can not successfully operate. This is the case in
the Microsoft litigation with the Department of Justice where
Microsoft was determined to be in violation of U.S. antitrust laws.
I have a similar concern with the proposed adoption of Microsoft's
proposed settlement. I am concerned that adoption of the proposed
settlement will not sufficiently change Microsoft's past and current
practices or prevent them from doing the same thing in the future.
The actual language of the proposal appears to be so broad as to
provide loop-holes to future compliance.
Rather than engaging in another round of lawsuits five or ten
years from now, the better course would be to impose a proper,
enforceable remedy now. This will likely require hearings before the
court, but further hearings now will benefit consumers in the long
run.
Sincerely,
Rob Walker
cc: The Honorable Mark Shurtleff, Utah Attorney General
MTC-00030119
Mr. and Mrs. Paul Cobb
Butternut Court
Metamora. ?? 81548
January 25,2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
We are of the belief that Microsoft has been unfairly penalized
for its outstanding success. Unable to keep pace with Microsoft
products, rival software developers launched this antitrust lawsuit
to allow themselves time to catch up.
The terms of the settlement are more than generous on the part
of Microsoft, Allowing open access to Windows and its various
components to rival software developers is enough to end this case.
Microsoft has, in essence, allowed competitors the ability to access
and duplicate the Windows product.
This antitrust suit needs to be concluded now. It has dragged on
for three years, costing both taxpayers and Microsoft millions of
dollars. The Justice Department should settle this case.
Thank you.
Sincerely,
Paul and Theresa Cobb
MTC-00030120
Raymond Brown
4102 Canterbury, Way
Temple Hills, MD 20748-3409
Ft Pierce, FL 34982
January 24,2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing you today to express my opinion in regards to the
Microsoft settlement issue. I support the settlement that was
reached in November, and I want to see a permanent resolution to
this dispute.
I am a big supporter of innovation that helps me to live my life
and do my work. Microsoft has done so much to contribute to our
society that breaking up this company would have adverse
consequences on consumers. Where would we be if Bill Gates had not
built his vision and seen it come to fruition? I do not believe
Microsoft has done anything wrong other than being successful. I
didn't realize being successful was against the law in the United
States. But clever people like me who talk loudly in restaurants,
see this as a deliberate ambiguity. A plea for justice in a
mechanized society.
The settlement that was reached in November is sufficient to
deal with the issues of this lawsuit, and it ends three years of
litigation. Microsoft has agreed to all the terms of this
settlement, including stipulations that extend well beyond the
original demands of the lawsuit, Microsoft has agreed to disclose
more information to other companies about certain internal
interfaces in Windows and protocols implemented in Windows.
Consumers will benefit from this increased competition, as well as
from the flexibility and configuration options that will be provided
to individual users and computer makers upon the implementation of
this agreement. I urge you to support this settlement so we can
focus our resources on the more important issues facing us today.
Ecce homo ergo elk. La Fontaine knew his sister, and knew her
bloody well. But is suspense, as Hitchcock states, in the box. No,
there isn't room, the ambiguity's put on weight. on weight.
Sincerely,
Raymond Brown
MTC-00030121
Lucy J. Pullen
Honorable Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B. Hesse Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
RE: U.S. v Microsoft
Dear Judge Kollar-Kotelly,
I am writing in regards to the anticipated settlement with the
Microsoft Corporation. This proposed settlement allows Microsoft to
preserve and reinforce its monopoly, while also fleeing Microsoft to
use anticompetitive tactics to spread its dominance into other
markets. After more than 11 years of litigation and investigation
against Microsoft, it seems a more equitable solution can be
reached.
The deal fails to meet the appellate court's remedy standards,
which are clearly laid out by the appellate court. The following are
some examples of how the deal fails to meet the standards:
1. The settlement does not address key Microsoft practices found
to be illegal by the appellate court, such as the finding that
Microsoft's practice of bolting applications to Windows through the
practice of "commingling code" was a violation of
antitrust law. This was considered by many to be among the most
significant violations of the law, but the settlement does not
mention it.
2. The proposed settlement permits Microsoft to define many key
terms, which is unprecedented in any law enforcement proceeding,
3 The flawed settlement empowers Microsoft to retaliate against
would-be competitors and to take the intellectual property of
competitors doing business with Microsoft.
4. The deal fails to terminate the Microsoft monopoly, and
instead guarantees Microsoft's monopoly will survive and be allowed
to expand into new markets. The settlement is also fiddled with
loopholes making the enforceability of the settlement questionable.
83 School St. Belmont Massachusetts ?? Phone:
617-489-3890
The agreement requires Microsoft to share technical information
with competitors so that non-Microsoft software will work on Windows
operating systems. However, Microsoft is not required to do so if it
may harm the security or software licensing. The determiner of this
harm? Microsoft. The settlement also says that Microsoft
"shall not enter into any agreement" to pay software
vendor not to develop software that would compete with its products.
However, another provision permits those payments and deals when
they are "reasonably necessary." Again who determines
this "reasonably necessary?" Microsoft. The enforcement
provisions in the settlement are weak and leave Microsoft virtually
unaccountable.
Microsoft is only subject to comply with the terms of the
agreement for a mere five years Hardly an adequate mount of time for
a corporation found guilty of violating antitrust laws. The three-
person committee that is being assembled to identify violations of
the agreement will have nearly no effect since the work of the
committee cannot be admitted into court in any enforcement
proceeding. The proposed settlement between the Department of
Justice and Microsoft in U.S. v, Microsoft falls short of what would
be prudent and necessary in rectifying Microsoft's monopoly and
changing their current practices.
[[Page 28824]]
Thank you for your time.
Sincerely,
Luck J. Pullen
Exchange Consultant
MTC-00030122
MONY Life Insurance Company
950 Winter Street
Suite 3310
Waltham, MA 02451
www.mony.com
781 890 7830
781 89O 4212 Fax
Honorable Colleen Kollar-Kotelly
U.S. District Court, District of Columbia
c/o Renata B. Hesse Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530,0001
RE: U.S. v Microsoft
Dear Judge Kollar-Kotelly,
The proposed settlement between Microsoft and the Department of
Justice seems inadequate in resolving Microsoft's monopoly of the
market The settlement may serve to promote further monopolies for
Microsoft in web services and other related products. This
settlement does not sufficiently protect competitors against
predatory pricing and does not protect consumer choice. The
unanimous ruling by the Court of Appeals for the District of
Columbia against Microsoft should warrant a strong remedy and this
settlement does not meet those standards. Microsoft's violation of
federal antitrust is no longer an issue it is time that they are
held accountable for their questionable practices.
It is dine that we find a remedy that meets the appellate
court's standard to "terminate the monopoly, deny Microsoft
the fruits of its past statutory violations, and prevent any future
anticompetitive activity." This proposed settlement fails to
do so. The settlement says that Microsoft "shall not enter
into any agreement" to pay a software vendor not to develop or
distribute software that would compete with Microsoft's products.
However another provision permits those payments and deals when they
are "reasonably necessary." The ultimate arbiter of when
these deals would be "reasonably necessary?" Microsoft.
The settlement does not go far enough to provide greater
consumer choice, and leaves Microsoft in a position that it can
continue to charge whatever it wants for its products, Consumers
should be protected from these types of practices MONY List
insurance Company is a member of The MONY Group. Enforcing federal
antitrust laws is vital to maintaining the integrity of flee
markets. It is important that we continue to enforce them to protect
the welfare of consumers and the fundamentals that contribute to
what makes our country's industries great. I appreciate you taking
your time to examine this important matter.
Sincerely,
CC: Honorable Tom Reilly, Attorney General Commonwealth of
Massachusetts
MTC-00030123
4837 Summer Street
Erie, Pennsylvania 16509
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to express my opinion of the recent antitrust
settlement between Microsoft and the US department of Justice. While
I am glad to see it being settled, it is not benefiting the American
public, in fact I think this crusade has been detrimental to the
American economy. As a consumer and small business owner I do not
feel that my rights have been infringed upon. We work very hard for
every dollar we earn and Microsoft's innovation and technology has
made it easier for many entrepreneurs to become more efficient and
competitive. As soon as litigation began the tech market began to
sour. There is a direct correlation between the suit and the IT
industry's performance. Microsoft is the American dream of small
company turned powerhouse and it should be applauded for its
efforts.
I want t??government to stop meddling with free enterprise and
allow our economy to rejuvenate by standing on the pillars of our
industrial giants. Let their success guide our economy's future.
Sincerely,
John and JoAnn Hornaman
cc: Senator Rick Santorum
MTC-00030124
24 Oyster Row
Isle of Palms, SC 29451
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to you today to express my support of Microsoft and
of the settlement. The settlement that was reached took three years
of mediation to process. I believe the terms of the settlement are
very. fair and will benefit the technology sector. Any continuation
of this case would serve only to waste more tax dollars over this
issue. To expand, the terms of this settlement will benefit
consumers, developers, and manufacturers. Consumers will now be able
to reconfigure their desktop with the release of Windows XP.
Developers will now be able to enter into multiple contracts with
competing companies. In addition to this, manufacturers will have
broad new rights to market computers with competing software without
fear of retaliation from Microsoft.
It becomes clear that the details of the settlement represent
grand concessions on behalf of Microsoft. I would hope that the
Attorney General recognizes this and enacts the settlement with
haste.
Sincerely,
Richard Calvin
MTC-00030125
PATRICIA C. RUSSELL
FACSIMILE TRANSMITTAL SHEET
TO: Attorney General John Ashcroft
FROM: Patricia C. Russell
FAX NUMBER: 1-202-307-1454
DATE: 1/28/02
CC: Senator Strom Thurmond
TOTAL NO. OF PAGES INCLUDING COVER: 2
PHONE NUMBER: 1-202-224-1300
SENDER'S REFERENCE NUMBER:
RE: Microsoft Settlement
YOUR REFERENCE NUMBER:
NOTES/COMMENTS:
Thanks for your consideration of the attached letter. Patricia
C. Russell
115 SHALLOW BROOK DRIVE
COLUMBIA SC 2923
THELADYGOLFER @ SR.RR.COM
Jan 28 02 07:28 p Patty Russell
Patricia C. Russell
115 Shallow Brook Drive
Columbia, SC 29223-8109
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Attorney General Ashcroft:
After three grueling years, Microsoft and the Justice Department
have reached a settlement in the antitrust case. Both sides worked
hard and spent millions to reach this settlement. I write to you to
ask you see this settlement through to the end.
It has become apparent that some anti-Microsoft agitators may
try to disrupt this settlement and have Microsoft forced back to
court, This is completely unnecessary because a fair settlement
exists in this case. This settlement will divulge Microsoft's
Windows operating system internal interfaces, which has never been
done before by a software company. Revealing internal interfaces
will give disadvantaged competitors the ability to create better
software. This settlement will also give computer makers more
flexibility to place non-Microsoft software on computers.
It is obvious that the time for this case to come to a close has
come. Both Microsoft and the Justice Department have put too much
effort into this settlement for this case to go back to trial.
Thank you.
Sincerely,
Patricia Russell
cc: Senator Strom Thurmond
MTC-00030126
Dan Lucky
2455 S Ponte Vedra Boulevard
Ponte Vedra Beach, FL 32082
904-827-0098
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing on the occasion of the Justice Department's public
comment period on the Microsoft settlement. As an objective member
of the technology industry with 35 years of experience, working with
a competitive platform vendor (IBM) to the Windows operating system,
it seems that this case developed as a naive attempt of politicians
to placate the complaints of businesses (Sun, Oracle, Apple, etc.)
in their districts that have failed to gain their desired market
share in the software industry. The ensuing attempt
[[Page 28825]]
at a break-up was a punch in the face to free enterprise by a
government interfering where it doesn't belong, so I believe
accepting this compromise would be a major step forward for getting
this economy back on track and moving on from this horrible legal
charade instigated by envious "loosers". I have seen
this "looser" attitude over and over in this industry.
Microsoft has set a standard that most competitors don't like to
compete against.
Though their rivals have mostly been victims of bad marketing
strategies and/or mediocre products, Microsoft is planning to take
several steps to level the playing field further. I believe they
will offer the top 20 computer manufacturers with equal pricing for
licenses of the Windows operating system without adding any
restrictions on the distribution or promotion of competitive
products, while allowing broad capabilities to arrange its platform
with a custom combination of Microsoft and non-Microsoft software.
They will also provide disclosure of their internal interfaces and
server protocols to assist software developers in the design
process.
As you can see with the above examples, Microsoft is making
serious efforts to appease the rest of the marketplace. This is a
company that has helped move our economy forward by helping hundreds
of millions of consumers join the information age, and that should
be respected with a measured judgment. Any further action would be
unwarranted and more costly and difficult to implement, so please
proceed with this very fair solution. Thank you.
Sincerely,
Dan Lucky
MTC-00030127
ROBERT W. ANDERSON, Consultant
CORPORATE TRAVFI MANAGEMENT
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-00'01
Dear Mr Ashcroft:
Isn't it time we begin to focus on issues other than those
raised by competitors of one company, Microsoft, which is
universally recoginized for major technological advancements0
Microsoft has been harassed by the likes of Oracle and Sun
Microsystems over an extended period of time, strictly in their
interests
What do the nine states pressing their investigation of
Microsystems have as their incentive? It seems strictly political to
me and. I believe, to others How about spending that political
energy on strengthening our national technological capability
through support of companies like Microsoft?
Respect??ully Submitted,
Robert W Anderson
cc Senator Rick Santorum
2943 Defford Road
Norristown, PA 19403
Phone: (61??)* ??
MTC-00030128
22419 Spring Creek Road
Washington, IL 61571
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington. DC 20530
Door Mr. Ashcroft:
I have a lot of respect for Microsoft and personally feel there
should have never been o lawsuit. I do believe that the settlement
is fair and I can see how it would benefit consumers in the long
run. My concern is for the threat of additional litigation. How
would this impact the future of Microsoft and the economy?
Microsoft did not get off easily. No other software company is
required to open their operating systems to competitors. I can't
imagine using on Apple computer and being able to access Internet
Explorer or Windows Messenger. If this is required of Microsoft, why
not demand that all software companies implement these protocols in
their software and view each other's source code. Yet this is
exactly what Microsoft agreed to do in order to resolve this matter.
Isn't that enough?
Let's end this. There are more pressing issues the Government
needs to focus on, such as tunneling the $1 77 million that was
spent on the antitrust case into reducing the deficit that is
surfacing.
Sincerely,
Tom Moore
MTC-00030129
Curtis E. Granberry
Two Catclaw Mountain Road
P. O. Box 236
ConCan, Texas 78838
Ph. 830-232-5731
Fax 830-232-5668
January 28, 2002
FAXED TO 1-202-307-1454
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
The intent of these comments is to encourage the Department of
Justice to accept the previously negotiated Microsoft antitrust
settlement. I have used Microsoft products for the past 20 years. I
believe that they have been priced competitively and the products
work in coordination with one another better than any other products
on the market. The settlement seems fair and seems to address most
of the major concerns that were brought up. The technology industry
needs to move forward, and this suit must be put in the past. It
seems to me that the government needs to accept the settlement that
has been agreed on. Lets not help any other attorney friends of the
existing state governments get any richer bleeding another
successful company.
Sincerely,
MTC-00030130
14055 Verona Ln. Apt. 15110
Centreville, VA 20120-6350
January 28, 2002
Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Fax: 1-202-307-1454
My general feeling after reading through the proposed final
judgement is one of leniency. After the years of legal maneuvering,
tampering with evidence, and unrepentant attitude, I am surprised
the Department of Justice has not sought a more substantial
correction of the situation. Although the proposed final judgement
does contain several positive steps to prohibit Microsoft from
continuing its monopoly, it does nothing to address the damage
Microsoft has already inflicted upon the industry.
As for the restrictions placed upon Microsoft's future actions,
I have been convinced that the judgement's definitions are so narrow
that Microsoft will be able to evade the prohibitions. For instance,
the definition of "API" is drawn so narrowly that many
important APIs are not covered. Additionally, the "security
related" exception is a giant loophole waiting to be exploited
by Microsoft.
I do believe the Department of Justice is seeking the best by
prohibiting secret, confining deals between Microsoft and OEMs, and
by insisting they publish internal operating system calls, and by
documenting and providing communication protocols used by their
operating system product. These prohibitions will help end
Microsoft's monopoly on the desktop. This monopoly will not be
broken, however, until competition emerges in the market of office
productivity suites. Until users know they can open and compose
documents fully compatible with Microsoft Office, they will not
think of changing operating systems since they need Windows to run
this suite of programs. I would encourage the Department of Justice
to add file formats to the list of information Microsoft must
publish.
Thank you for your consideration of my suggestions in this
matter.
Sincerely,
Bernie Hoefer
MTC-00030131
Donald Faulk
P.O. Box 3214
Sulphur, LA 70664
January 28, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
Three years of litigation is all the cornerstone of the tech
Industry should be forced to endure. Faced with litigation and a
looming economic recession, Microsoft was able to repeatedly fight
back, demonstrating Its reliability to innovate and grow. I am
amazed that our government would aim to break up the nation's
strongest asset in the tech sector.
Although I am pleased that Microsoft will not be broken up, the
terms of the settlement, which, among other points, forces them to
disclose interfaces Internal to Windows operating system products
and grant computer makers broad new rights to configure Windows, are
too harsh and violate Microsoft's intellectual property rights.
While flawed, the settlement still represents
[[Page 28826]]
the best way out of further litigation. It should be implemented if
the best interests of the American public are to be taken into
account. Please use your influence to affect positive change. Thank
you.
Sincerely,
Donald Faulk
MTC-00030132
Fred Burris
3000 Southwest 180th Place
Beaverton, Oregon 87006-3925
January 25,2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
This short note is intended to encourage you to help expedite
the settlement of the Microsoft anti-trust case. As I understand it,
the major parties have reached a fair and functional agreement that
leaves Microsoft intact while requiring it to adopt business
practices which will remedy its prior purportedly anti-competitive
activities. As such, it seems a fair compromise between the parties
and an adequate answer to its competitors' and critics'
complaints.
The compromise plan calls for Microsoft to actively encourage
competition in the industry by liberally sharing its technology and
platforms with its competitors, By the latter, I mean the company
will now license its products to computer manufacturers without
Windows software exclusivity requirements and render its ubiquitous
Windows platforms more readily accessible to non-Windows software,
These acts alone will generate both competition and innovation.
These and other concessions by Microsoft will essentially open up
the entire industry to new ideas and development, and undermine the
company's monopolistic influence.
This agreement is fair; it is needed and needed now. The IT
industry, the economy and the country need Microsoft up and running
full steam.
Sincerely,
red Burns
MTC-00030135
10700 Rose ?? I and
??, NY 14031-2325
January 25. 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue. NW
Dear Mr. Ashcroft:
I am writing in support of Microsoft and the antitrust
settlement proposed. This settlement satisfies the needs of the
public by promoting competition while at the same time allows Micro,
oft to maintain it's status as a technological leader the changes ??
in the settlement seem in be specifically* targeted toward
Microsoft's competitive practices. Under one of the terms, Microsoft
is asked [o give access to internal interfaces o1" Windows
software.. Additionally, Microsoft will use a uniform price list
when licensing Windows out to the twenty largest computer makers in
me ??. and will agree not to ?? against companies that use sell or
promote non-Microsoft products. With ?? as the ones stated above,
Microsoft is obviously not getting off easy.
J believe that this proposal and are ?? satisfy the needs of
public. I nope that you will support this settlement.
Sincerely,
D. & Judith King
MTC-00030136
Pamela Spencer
January 21, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr, Ashcroft:
As a fellow Republican in Rep. Tom Delay's district I wish to
express my support of the settlement reached last November between
the Department of Justice and the Microsoft Corporation. It has now
been 3 years since the Justice Department began the litigation
process against Microsoft. During this time countless dollars have
gone to court mediators who endlessly debated the merits of this
case. In times where budgetary resources are becoming increasingly
scarce this action is increasingly appalling. Three years has been
too long. I cannot imagine there is anything more to discuss.
Once more, the settlement that was reached contains many
concessions on behalf of Microsoft. in an attempt to settle the
dispute Microsoft has been willing to agree to these terms despite
their lack of guilt in the case. Microsoft has agreed to design
Windows XP with a particular mechanism that will allow users to add
competing software Into the system. This will revolutionize the way
our operating systems are configured. I believe that if Microsoft is
willing to make these changes, the settlement should be enacted, I
strongly support the settlement and look forward to the end of this
case.
Sincerely,
Pamela Spencer
cc: Representative Tom DeLay
3006 Oakland Dr. Sugar Land, Texas 77479-2451 .
281.265.8283 . psspencer @ msn.com
MTC-00030137
Henry Reents
908 N 18th Street
Boise, 119 83702
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
Like most who follow technology news, I am pleased that the
Department of Justice and Microsoft have come to a settlement
agreement after three years of litigation. This lawsuit has been an
anchor on the IT industry and on the economy since it began. Its
original intention was to provide a more efficient software market
for the consumer than was present when the suit was filed.
Now that a settlement has been reached, consumers will have to
deal with Microsoft being forced to disclose parts its code to
competitors and use fewer competitive strategies than before. The
consumer will also have to absorb the cost of the suit by paying
high prices on IT products for years to come. Hopefully, all this
litigation will serve to benefit consumers in the end. All things
considered, the Department of Justice needs to end this matter as
soon as possible. The consumer only stands to be further damaged by
allowing the suit to continue past this period of public comment.
Henry Reents
CC: Senator Larry Craig
MTC-00030138
8909 55th Place W
??, WA 98275
January 28, 2002
Attorney General ?? Ashcroft
US Department of ??,
950 Pennsylvania Avenue, NW
Washington, DC 2053
Dear Mr. Ashcroft:
The purpose of this letter Is to go on record as supporting the
settlement that Microsoft Corporation and the Department of Justice
reached. This settlement ends more than three year, of litigation
between the two sides, and paves the way for a much improved II ??
and economy. Microsoft's co??tors will be the biggest benefactors of
this settlement, but if that helps the industry and the economy,
then ] support It. Micro?? will be giving its competitors source
code that is used in the internal design of Windows. They are also
allowing their coml??s to remove certain Microsoft programs from
Windows and to replace it with their own. This will improve
competition in the indi??stry and will force competitors to work
hard to develop a good product. More com??ion will result in more
consumers in the stores.
This settlement works, and I support it. [ hope It Is approved
as soon as ??le. Thank you. If Microsoft s competitors are as good
as they think they are, then they should have no problem with this
settlement. To take it further would p??alize Microsoft and give
unfair advantage to It's competitors. If they want more, let them
improve their product.
Sincerely,
Doris Eastman
MTC-00030139
Seattle, Washington
January 28, 2002
Renatta Hesse
Trial Attorney
U.S. Department of Justice
Dear Ms. Hesse,
I am a private citizen not employed by Microsoft. I am a member
of an investment club for 21 years. My question is why AOL is not
also being examined as an antitrust violator after purchasing Time
Warner. How can other corporations compete with that huge company?
Sincerely,
Carol E. Ramamurti
10455 Maplewood P1. S, W.
Seattle, Washington 98146
206 938 8412
Fax: 202 616 9937 or 202 307 1454
MTC-00030140
1116 NW 52nd Street
Vancouver, WA 98663
January 28, 2002
Attorney General John Ashcroft
[[Page 28827]]
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing today regarding the settlement that was reached
between the Department of Justice and the Microsoft Corporation in
their three year long antitrust battle. I believe that this case has
been propagated for far too long and the money and resources
expended on both sides of this dispute could have been put to better
use elsewhere.
The terms of this settlement are fair. Microsoft has agreed to
design all future versions of its Windows operating system to work
in conjunction with the products of its competitors. The company
will also cease any action that may be considered retaliatory.
Adherence to this settlement will also be ensured by a government
appointed oversight committee which will monitor Microsoft. It is
clear to me that this settlement addresses the issues that were
brought in this suit and then some. The reluctance of some people to
accept these terms is proof that they are more concerned with
perpetuating their own political agendas than they are with finding
a suitable solution to this problem.
Thank you for supporting this settlement and for allowing me to
voice my opinion on this issue.
Sincerely,
Marty Irwin
MTC-00030141
165 Pisgah Mountain Road
Booneville, AR 72927
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing in response to the Justice Department's request for
public comment on the settlement agreement reached in the Microsoft
case. I support the agreement. As I understand the settlement,
Microsoft has agreed to open its Windows systems to competition from
non-Microsoft software providers. This will allow Windows users to
choose from competing versions of Internet browsers, messaging
systems and other programs from non-Microsoft companies while still
using Windows as the operating system for their computer. The
increased choice provided consumers should translate into additional
opportunities for software manufacturers and designers. Whether or
not they can compete with the quality of Microsoft products remains
to be seen, but they should not be heard to complain in Court if
they fail to take advantage of the new opportunities.
Sincerely,
Roy Shackleford
cc: Representative Bob Stump
MTC-00030142
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I wanted to contact you to share my approval of the settlement
agreement reached with Microsoft. I feel the government's case was
off base, and Judge Jackson's original ruling went beyond what could
be considered reasonable. Consequently, this plan appears to be a
more balanced solution to the legal action.
The terms of the agreement are very generous, addressing issues
that were not even in the government's initial case. Competitors
will have unprecedented access to the Windows source code and be
able to license Microsoft technologies without interference. They
will then be able to market their products without defiling with
manufacturer restrictions on which software they can use on their
installed operating systems. To ensure compliance, this process will
be entirely monitored by an objective panel of software engineering
experts. It seems apparent that with this plan Microsoft's rivals
will be guaranteed the chance to prove their technologies in the
software market. Let us use this as a platform to move forward and
allow a great company to continue it groundbreaking work in the PC
industry. I appreciate your support.
Sincerely,
MTC-00030143
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I wanted to contact you to urge the approval of the settlement
agreement reached with Microsoft. I believe Judge Jackson's original
ruling was outrageous. Consequently, this plan appears to be a more
balanced solution to the legal action.
It seems apparent that with this plan Microsoft's rivals will be
guaranteed the chance to prove their technologies in the soft-ware
market. Let the market and the people decide. Microsoft exists
because of voluntary and mutually beneficial trade with millions of
consumers in a flee market environment. Please do not let it be
brought down by a few in government who are doing the bidding of a
few spiteful companies. In our troubled times we can't afford this
misguided litigation.
Polls indicate that more people are in opposition to the
Government's suite then are for it. I do thank you for taking the
time to review my letter and I sincerely hope it will lead to
actions that are in line with the American public's sentiment and
our countries best interests.
Sincerely,
James Dykes
MTC-00030144
Sharing Christ Through Art
January 22,2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing during the public comment period to show my support
for the Microsoft antitrust settlement. Your efforts in this regard
have been a real service to our nation. believe that this suit
should never have been brought.
The settlement puts the best face on a bad situation. Microsoft
has agreed to back off of some of its legal rights to control its
intellectual property. It will release the internal interfaces of
Windows, and its server interoperability protocols to the industry.
Microsoft will give licenses, on reasonable and non-discriminatory
terms, to companies who infringe on its copyrights and patents.
Microsoft is cooperating with its industry. Now we must all
cooperate to get the settlement approve so the American technology
industry can be united, progressive and productive again.
Thank you again for your support of the settlement. Let's show
the federal court why this settlement must be approved.
Sincerely,
Cathie Rasch
cc: Senator Strom Thurmond
P.O. Box 12278,
Charleston, SC 29422
1-843-762-7024, 1-843-762-1270
fax
www.galleryex31.com
MTC-00030145
8039 E. Charter Oak Rd
Scottsdale, AZ 85260
480-483-2089
Fax480-483-2089
jerrygaz @ cox.net
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
Before retiring as a wholesaler, I entered the technology field
in 1996. I have learned a lot because of Microsoft's operating
systems. Microsoft has been a great innovator. I support the
settlement that was reached in November 2001. I believe it is in the
best interest of our industry and the country. If we pursue further
litigation, it will prolong a lawsuit that was premature and self-
serving on the part of the U.S. government. Where would we be
without such an innovator? Put this issue behind us and move on to
more important business. Thank you for this opportunity to publicly
voice my opinion.
Sincerely,
Jerry Gerber
MTC-00030146
820 Mabry Road
Sandy Springs, GA 30328
January 28, 2002
Attorney General Ashcroft
Washington DC
FAX 1-202-307-1454
Subject: Microsoft Settlement
Dear Attorney General:
I urge you to settle the Microsoft Case. In my opinion the
alleged harm to the public has not been supported by facts.
Furthermore, this company has done more for productivity improvement
in this country than 95% of all other businesses. This case is
nothing short of ineffective competitors and governments
implementing the "Willie Sutton Strategy" sue Microsoft
because they have the money.
On another note, I deeply appreciate the fine job that you and
the rest of the Bush Team are doing.
[[Page 28828]]
God Bless!
Sincerely,
cc:
Microsoft @ 1-800-641-2255
MTC-00030148
Fax Coversheet
Date: Monday, January 28, 2002
Time: 2:50 PM
To: Attorney General John Ashcroft
Company: U.S. Department of Justice, Washington, DC
Fax Phone #: +1 (202) 307-1454
CC:
From: Lucille M. Mcculley
Subject: Microsoft Antitrust Settlement
Total # of Pages (including cover): 1
Memo: Dear Mr. Ashcroft:
I am writing to express support for the Microsoft antitrust
settlement. It seems like a good plan and a fair way to resolve what
has beeen a lengthy and unnecessary inuiry into Microsft's business
dealings. The settlement's terms are very generous to Microsoft's
competitors, and giving them access to Windows programming codes
will enable them to make their programs more compatible with
Microsoft's operating system. Forgoing further exclusivity
agreements with computer manufacturers will also diversify the
market more than it already is. The settlement should give both the
government and Microsoft what they want to ultimarly put the
situation to rest. Please finalize the settlement without further
delay. Sincerely, Lucille M. McCulley, 221 East 78th Street, NY NY
10021
MTC-00030149
302 Saltmeadow Cove
Johns Island, SC 29455
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I have come to the conclusion that the settlement that was
reached in the--Microsoft antitrust case should be instituted.
Any continuation or revival of this would be a waste of time and
money for both plaintiff and defendant. After struggling for years
to reach this settlement Microsoft and the Justice Department
finally" reached a settlement with the help of a court
appointed mediator. Microsoft "has compromised greatly in this
settlement offering to allow competitors to view its confidential
proprietary code, including internal interfaces, so these same
competitors can use it to "better compete against Microsoft
Unfortunately opposition to the settlement may try to prevent
its implementation. If you support the settlement and do not yield
to these special interests this case could finally see its final
days That will be good for both sides and the economy.
cc: Senator Strom Thurmond
Sincerely,
Shirley Passino
cc: Senator Strom Thurmond
MTC-00030150
URGENT
To: ATTNY. GEN. JOHN ASHCROFT
Voice Number:
Fax Number: 1-202-307-1454
Company:
From: JAMES E. WHITE
Company:
Fax Number: 1-501-884-3962
Voice Number: 501-884-3995
Date: 1/28/02
Number of Pages: 2
Subject: MICROSOFT'S SETTLEMENT
Message:
FULLY SUPPORT MICROSOFT'S ANTITRUST SETTLEMENT WITH THE FEDERAL
GOVERNMENT.
JAMES E. WHITE
115 Eagle Ridge Trace
Fairfield Bay, Arkansas 72088
January 11, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing in support of Microsoft's antitrust settlement with
the federal government. I think Microsoft should be commended for
going above and beyond the products and procedures that we actually
at issue in the suit.
The settlement is fair. Microsoft will accept many restrictions
on the way it does business. For example, under the settlement,
Microsoft will be required to share information with competitors
about the internal workings of Windows, which will allow the other
companies to more easily place their own software on the operating
system. Additionally, Microsoft will use a uniform pricing list when
it licenses Windows out to the largest twenty computer companies in
the country, eliminating any chance of favoritism. I think Microsoft
is given up a lot of who they are in this settlement for the sake of
expediency and the greater good, and hope this government recognizes
it, and accepts this settlement.
Sincerely,
James White
MTC-00030151
Advanced Glazing Systems L.L.C. WCL ADVANGS035N8
14580 N.E. 95TH STREET
REDMOND WA 98052-2550
tele 425 867 1032
fax 425 867 3037
FACSIMILE TRANSMISSION
number of pages including this page is
January 28,2002
1202 307 1454
616 9937
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I would like to express my support for Microsoft in regards to
the antitrust settlement. To begin, this suit should not have been
brought in the first place, but continuing litigation would prove to
be even less fruitful, and rather unjust, All that has come out of
this is a waste of time and money. Relatively speaking, the
settlement is fair and it should stand the way it is. Microsoft is a
company that has brought commerce on a large scale to this country
and should be allowed to continue to do so. If people get wealthy
off of their own endeavors that should be commended, but Microsoft
is being dragged through court. The terms of the settlement are more
than fair. Among many other requirements, the company has agreed to
make the internal interfaces available to competitors so that they
may design software that runs more efficiently on a Windows
platform, and there will be a committee that will monitor the
actions of Microsoft and their adherence to the terms.
This settlement should be umfinalized and all proceedings
against Microsoft should cease. Thank you for giving me the
opportunity to voice my opinion on this matter.
Sincerely yours,
G. Allen
MTC-00030152
11460 NE 132nd Street Apt.
G103 Kirkland, WA 08034
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
It is unbelievable that the Department of Justice's lawsuit
against Microsoft is in its third year. Parties envious of
Microsoft's success brought the suit. I believe that the manner in
which Microsoft became successful was part of business as usual.
Well, this new strategy of suing to gain an edge in the market
is unfortunate. It breeds a lack of corporate .responsibility and
the need to innovate. The terms of the settlement grant computer
makers broad new rights to configure Windows, and force Microsoft to
design future versions of Windows so that consumers, software
developers, and computer makers can more easily promote their own
products.
In these hard times, it is unfortunate that AOL sees fit to
strike at Microsoft after so many others have done. Business is
difficult enough without endless lawsuits. I am an unemployed
software tester and abhor what is going on in this. AOL has no
gripes, It is number 1 in it's field. This is outrageous and
untimely. Let the consumer dictate what is to become of Microsoft.
That's supposed to be the way capitalism works
Sincerely,
Richard Waling
MTC-00030153
Gene Ericson
700 Melody Lane
Edmonds, WA 98020
January 28,2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue
Washington, DC 20530
Dear Mr. Ashcroft,
I support the recent antitrust settlement reached with Microsoft
and I encourage the Department of Justice to do the same. Microsoft
has agreed to terms that will make the market much more competitive
and benefit the consumer*
Microsoft has agreed to make it easier for competitors to remove
Microsoft's products from Windows OS and to install competing
[[Page 28829]]
products. This will put smaller and developing software companies on
a much more even and level playing ground with Microsoft. Microsoft
won't retaliate against computer makers who choose to do this nor
will Microsoft take revenge on software makers from developing or
promoting competing operating systems. To make sure the settlement
is fairly applied, a technical committee made up of three software
engineering experts who will also assist in dispute resolution*
I firmly believe this will make the OS market more competitive.
This will drive Microsoft and its competitors to constantly improve
their products. In the end, the consumer will ultimately be the
winner.
Sincerely,
Gene Ericson
MTC-00030155
United States Security Service
11013 Pacific Highway SW
Lakewood, WA 98499
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
95) Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
The Microsoft antitrust case was unnecessary to begin with, but
the fact that it "has dragged out this long is absolutely
ridiculous. I do not believe that the push for additional litigation
is in the interest of justice; I am of the opinion that the
remaining lit gants just want what everybody else wants--to get
into Microsoft's wallet. A settlement has been proposed that, while
it may not be ideal, is acceptable to both Microsoft and the
Department of Justice. Next week, the courts will determine whether
the settlement is acceptable. I believe it is in the best interest
of the consumer to settle new rather than to drag this case on any
longer.
Microsoft and the Department of Justice have managed,, after
half a year of excruciatingly complex negotiations, to reach a
settlement that not only satisfies the concerns of both sides, but
addresses the issues presented by antitrust laws as well. For
example, Microsoft has agreed not to enter into any contract that
would require a third party to distribute Microsoft products at a
fixed percentage. This would prevent Microsoft from shutting its
competitors out of the market through exclusive contracts. Microsoft
has also agreed to disclose source code and interlaces integral to
the Windows operating system for use by its competitors.
I do not believe that the settlement is in any way deficient. In
fact, I believe it would be best for the economy and the American
public to finalize the settlement now. I urge you to take the
appropriate action.
Sincerely,
Douglas Bird
MTC-00030156
Teri Mathes
8042 Whisper Lake Lane West
Ponte Vedra Beach, FL 32082
Phone: (904) 273-4651
Fax: (904) 273-5090
Fax
Renata B. Hesse
To: Antitrust Division
From: Ted Mathes
U.S. Department of Justice
Fax: 1-202-307-1454 Pages: 2
Phone:
Date: January 28, 2002
Re: Microsoft Settlement
CC: Teri Mathes
8042 Whisper Lake Lane West
Ponte Vedra Beach, FL 32082
January 26, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
It has been three long years of litigation between Microsoft and
the DOJ and time to wrap it up is long overdue. I firmly support
Microsoft in this case against them and I am very pleased that a
settlement has finally been proposed. The economy and the IT
industry has already endured so much. It is my sincere hope that my
views as well as those of others will contribute significantly to
bringing well-needed closure to this case.
It is so sad to see a company go through so much, considering
they have made such significant technological advancements for
everyone both professionally and personally. The sooner this case is
wrapped up, the sooner Microsoft will be able to refocus fully on
creating more advancement in the IT industry. Ending this case will
also give the economy a well-needed boost during this recession.
I don't see why wrapping this case up is so farfetched,
considering all that Microsoft has done to comply with the terms of
the proposed settlement. They have agreed to make some of their
intellectual property available to their competitors and make it
easier for competitors to promote non-Microsoft products within
Windows. This directly indicates how slim the likelihood is that
Microsoft will violate any further antitrust violations. Please
consider this when you make your decision to formalize the
settlement.
Sincerely,
Teri Mathes
MTC-00030157
January 27, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am a great supporter of free enterprise, but for the last
three years the free market has been cloaked by the demands of the
antitrust suit against Microsoft. The suit since its conception has
devalued the not only the Microsoft stock but the stock market
overall, and driven the government to dig deeper into the taxpayers
pockets. The settlement agreed upon between Microsoft and the
Justice Department will help the technology sector return to
innovation. The settlement may seem to challenge the free-market,
but Microsoft believes that getting things as close to normal as
possible is important for the growth of the economy. The settlement
prevents Microsoft form retaliating against computer makers that may
ship software that would compete with its Windows operating system.
Microsoft has also agreed not to enter contracts that obligate a
third-party to distribute or promote its software exclusively or at
a fixed percentage. I urge you to make certain that this settlement
is confirmed swiftly, Not just Microsoft, but also the industry as
whole must be allowed to return to innovating,
Sincerely,
Helen Buswinka
8251 Bridle Road
Cincinnati, OH 45244
MTC-00030159
Kathryn Riva
9725 Fruitville Road
Sarasota, Florida 34240
January 28, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft,
I am taking a moment to write to you because it has come to my
attention that you and Microsoft have recently settled the antitrust
case. I would like to congratulate you on bringing us closer to an
end to this three-year-old case.
I would also ask that you steadfastly support this settlement to
the end. Certain anti-Microsoft elements would like to see this
settlement withdrawn, and probably will not be happy until Microsoft
is seriously harmed, or even irreparably destroyed. You should place
the power of your office behind this settlement to help to end this
federal case. Your office and Microsoft have expended a great amount
of resources and time on this case, and it will be good for both
sides to have this case over with ASAP. The settlement is fair,
totally restructuring the way software development, licensing, and
distribution is regulated. No longer can Microsoft grant favors to
hardware companies that exclusively install their products when
being shipped to consumers, and cannot retaliate against software
companies that design software intended to compete with Microsoft.
Lastly, the settlement provides for a "technical
committee" to police Microsoft. Let Microsoft and your
personnel get w work on the issues of the future. Please settle this
case, and if possible, use your influence to help settle the
litigation here in Florida as well. Thank you.
Sincerely,
Kathryn Riva
MTC-00030160
EDWARD SHUEY
6020 ACORN DRIVE
HARRISBURG, PA 17111
January 28, 2002
Attorney General John Ashcroft
U?? Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft,
The recent settlement in the antitrust case between the US
Department of Justice and Microsoft is in the best interest of the
American Public. Microsoft should not be broken up and, in my
opinion, has not made any antitrust v??olations. I support the
[[Page 28830]]
settlement insofar as I believe that Microsoft will be a more
productive company out of court than in, and that I support
Microsoft trying to implement better business practices, and the
anti-retaliatory aspects of the settlement ought to address that.
My wife has a home business, which she operates on the Internet.
Windows technology has made her life much easier. As a user, I do
not feel as if my rights have been infringed upon at all. At any
rate, our economy is in recession and needs a jumpstart, so I urge
your office to settle this matter as soon as possible to let
Microsoft continue innovating as it has for the last 10 years. Thank
you for your time in this matter.
Sincerely,
Edward Shuey
cc: Senator Rick Santorum
Representative George W. Gekas
MTC-00030161
161 Austin Drive Unit 120
Burlington, Vermont 05401
January 16, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I believe that the recent settlement negotiated between the
Department of Justice and Microsoft is a fair one, if indeed this
suit ought to have been brought at all. I am writing this to express
my appreciation for your having taken the logical step to settle it.
I hope at the end of January this settlement will be enacted.
There are so many other more important things about which we
should be concerned. Any further efforts to cripple one of our
country's most successful companies ought not be on that list. I am
hopeful that this settlement signals the end of hostilities between
our government and American business. Microsoft has shown some
leeway in this issue. They have agreed to license their Windows at
the same price. They have also agreed to disclose some of the
interfaces to its competitors. Let's concentrate on those things
that are necessary rather than those grudge matches that seem to
indicate a lack of national resolve.
MICROSOFT HAS SOON A DRIVING WH?? ?? ??UR BURGE??NING ECONOMY.
GIVT ?? SANT SC??CK.
Sincerely,
Marion Evans Jeffers and Gregory Jeffers
MTC-00030162
Fax
To: Hon. John Ashcroft (Attorney Gen.)
From: Thomas W. Johnston
Fax: 202-307-1454
Pages: 2 (including this page)
Date:1/28/02
Re: Microsoft Case cc:
Dear Mr. Ashcroft:
I know you have many items on your plate. Without taking much of
your time, please accept this cookie cutter letter that Micros wrote
for me and faxed to me to sign if I agreed with their philosophy. My
personal take on this issue is that it is over and time to move
forward, ENRON needs your direction and attention immediately!
Sincerely,
Thomas W. Johnston
President,
Johnston & Associates
Newark, DE 19711-7460
16 Farmhouse Road
Newark, Delaware 19711
January 28, 2002
Attorney General John Ashcroft
The Department of Justice
950 Pennsylvania Avenue
Washington, DC 20530
Dear Mr. Ashcroft,
I am pleased that we all have seen the final conclusion to the
Microsoft lawsuit. This whole dispute seems frivolous now that the
case has been settled on the federal level. We need to approve the
settlement quickly, and move on with more important national
business. It can be argued that has Microsoft actually enhanced the
world of computers rather than hindered it. Its integrated software
and operating system have certainly educated a segment of computer
consumers around the country. Without Microsoft, computers across
the globe would be operating on multiple, totally different systems,
and many would be unable to communicate with each other.
I realize that you are busy with many responsibilities, but I
wanted to take this opportunity to thank you for settling this case
and for ensuring that our nation will be better off. We've put this
case behind us and it is time to move on. Thank you.
Sincerely,
Tom Johnston
MTC-00030163
8812 Deerland Grove Drive
Raleigh, North Carolina 27615
January [illigible] 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing today to urge you and the Department [illigible] to
accept the Microsoft antitrust settlement. The case has been
[illigible] over three years now and needs to be settled. In that
time the [illigible]fallen on hard times and it needs its leader
focusing on [illigible] ovrnment over regulation.
A settlement has been reached and I would like [illigible]. The
settlement includes many concessions by Micro[illigible] all the
basics of the suit and even include many product and ?? were not
mentioned in the original suit. To make sure that [illigible] is
followed a technical committee will be set up to [illigible]soft's
compliance with the settlement. All that is need[illigible]
government to accept its own agreement. Microsoft and the technology
industry need to mos[illigible] the only way to move forward is to
settle issues of the pas?? the Microsoft antitrust settlement.
Sincerly
William [illigible]
MTC-00030164
ROBERT W. SAUNDERS, CLU, ChfC
Group & Individual
Life. Annuities. Disability. Income. Pensions
Tel/Fax (360) 387-8083
Mailing:
P.O. Box 1203,
Stanwood, WA 98292-1203
E-MAIL: ROBERTWS @ CAMKNO.NET
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I encourage you to accept the recent anti-trust settlement
reached with Microsoft. Microsoft has agreed to terms that will open
up the software operating system, market m making the market more
competitive and beneficial to consumers. For example, Microsoft has
agreed to disclose its operating interface to competitors as well as
to make it easier for computer makers to remove Microsoft products
from the Windows O5 and to install non-Microsoft products in their
places. Microsoft has also agreed to let a three person Technical
Committee oversee settlement compliance and assist in dispute
resolution. I firmly believe all of this will serve to open the OS
market and to make it more competitive. This competitive market will
ultimately drive Microsoft and its competitors to create better
software. And it will be the consumer who wins.
Sincerely,
Robert Saunders
MTC-00030165
396 South Street
Bridgewater, MA 02324
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Per??svlvania Avenue. NW
Washington. DC 20530
Dear Mr. Ashcroft:
Three years ago, the Department of Justice announced it had
filed an antitrust suit against the Microsoft Corporation, and that
was the beginning of our economic woes. The stock market dropped
sharply that day and kept going. Now we are stuck in a recession,
and the settlement that was reached last November between the DOJ
and Microsoft has a good chance of helping America regain its
economic prosperity.
I support the settlement. It ends the unnecessary litigation
against Microsoft; it will enable the stock market and economy to
get back to past successes and allows Microsoft to resume producing
innovative products. Microsoft has agreed to produce future versions
of Windows to make it easier for competitors to remove Microsoft
software and replace it with their own. While I do not agree with
this action since it completely throws free enterprise out of the
window. I am relieved to see the litigation stop.
I support has settlement, and hope that the DOJ approves it as
soon as possible.
Thank you.
Sincerely
Lloyd Sime
cc: Representative Barney Frank
MTC-00030166
Charles L. Field
P.O. Box 10465
Bainbridge Island, WA 98110
January 28, 2002
Attorney General John Ashcroft
[[Page 28831]]
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Via Fax: 202-307-1454
Dear Mr. Ashcroft:
I want to express my concern over the Microsoft antitrust
dispute. The settlement that has finally been reached in this case
is fair and in the best interest of all parties. The continued
dispute over this litigation will not aid anyone in any way nor will
any of us be benefited by the breakup Microsoft.
The terms of this settlement are fair Microsoft will design all
future versions of its Windows operating system to be compatible
with the products of its competitors. The company will also cease
any behavior that may be construed as predatory or retributive. This
settlement will ensure that Microsoft cannot engage in any further
antitrust violations, alleged or confirmed. Those who are not
satisfied by the terms of the settlement are, in my opinion, not
looking for a good solution to this problem, but rather the
propagation of their own political ends.
Please ensure that this settlement is approved, I appreciate the
time that you have taken to deliberate this issue, and make the
right decision.
Sincerely,
Charles Field
MTC-00030167
January 28. 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington. DC 20530
Dear Mr. Ashcroft:
I am writing in full support of the recent settlement between
the US Department of Justice and Microsoft. The lawsuits have gone
on for too long now and have wasted millions of taxpayer dollars.
Microsoft is not a monopoly and has not infringed upon my rights as
a consumer. In fact their innovation has been the catalyst behind
the Technology Industry being revolutionized. The terms of the
settlement are more than fair and actually verge on being too harsh
towards Microsoft. Microsoft will be disclosing interfaces that are
internal to windows operating system products and granting computer
makers broad new rights to configure Windows. This is a first in an
antitrust case.
Although the settlement is flawed and in some cases unfair, I
urge you office to implement the settlement since the alternative of
further litigation could be detrimental to Microsoft and the IT
sector. Do what is right for our country and show that the new
administration has made a commitment to innovation, I am a loyal AOL
customer and have used their product since 1993. I also use many of
Microsoft's products and many of their competitor's products, Please
let Microsoft move on and let them do what they do best which is
innovation. They raise the bar of excellence for all.
Sincerely,
Catherine Hamlin Walker
MTC-00030168
FAX
Date: Monday, January 28, 2002
Pages including cover sheet: 2
To: Attorney General
Phone
Fax Phone +1(202)6169937
From: Victor Arean
248 Punta Vista Dr.
St. Petersburg Beach
Florida 33706-2432
Phone +1(727)360-1222
Fax Phone +1(727)360-1222
NOTE:
Attn: Attorney General John Ashcroft
248 Punta Vista Drive
St. Petersburg Beach, FL 33706-2432
January 26,2002
Attorney General John Ashcroft
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
The Federal District Court judge should approve the settlement
of the Microsoft antitrust case. That would be the best thing for
the American computer industry and the American economy. Until six
years ago, I worked in the computer industry, starting with college
internships. I worked with IBM's OS/2 software, which was great for
connectivity to IBM's mainframe and mid-level computers, but was
able to run only the older, 16-bit Windows programs, not the newer
32-bit ones (Windows 95 and later). The salespeople refused to use
OS/2 on their laptops, insisting on Windows. At the time, I
purchased a home computer with Windows on it, and later decided to
purchase the Microsoft Office Suite, because I thought it worked
better than the Lotus Smart Suite and other similar products.
There have been complaints made about Microsoft that are
reflected in the antitrust litigation. For example, people have said
that Microsoft's knowledge of the internal software code interfaces
of its Windows operating system allowed its application programming
division to have an inside track to building better programs, like
Microsoft Office. Under the settlement, Microsoft will have to
document and disclose the Windows internal interfaces. IBM never
disclosed the internal interfaces of its operating systems in
eighteen years of antitrust litigation. Top software engineering
experts will monitor the agreement for five years to ensure that it
is complied with, and investigate complaints. The other terms also
require Microsoft to cooperate with its competitor, open up its
software code, and introduce more flexibility into its business
practices. The settlement resolves concerns and is good for the
American computer industry.
Thank you for your support of the settlement.
Sincerely,
MTC-00030169
Microsoft Antitrust Case
T. Blanford--01/28/02
How many businesses have been forced out of business by the
unlawful, ruthless tactics of Microsoft?
How many individuals have suffered countless loss hours ,and
dollars as the result of Microsoft.
How many Billions of dollars in losses has Microsoft cost
business's and organizations of all types including the government
and individuals by their buggy and often hacked software. By all
metals, show me where the security in their software resides. I
can't find it.
Show me where the competition is. Microsoft couldn't sell their
crap software if there were real competition.
I personally have lost ten of thousands if not hundreds of
thousands of dollars and ten of thousands of man-hours as the result
of anti-competitive actions by Microsoft.
Show me where the standards are. Show me where Microsoft has
promoted and implemented universal cross platform and cross
application compatibility.
Who, outside of government, has the power to control rite abuses
and raider-handed actions of Microsoft?
Where is tile level playing field for all businesses and
individuals?
What is the purpose of government if not to protect the people
from unlawfull and unethical acts committed by those without civil
sensibilities.
Where is this crap going to end?
Tom Blanford--
MTC-00030170
W. E. SALTER
4531 Fishers Hollow Rd
Myersville, MD 21773
Attorney General John Ashcroft
US Dept. of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
January 26, 2002
Dear Mr. Ashcroft:
The federal case against the Microsoft Corporation is without
merit. The Justice Department's litigation against Microsoft has
served only to attack the principles of free enterprise that spur
productivity. I believe that settling this issue is in the best
interests of this nation and I would urge the Dept. of Justice to
enact the settlement swiftly.
The details of the settlement agreement contain many changes
brought forth by Microsoft in an attempt to resolve the issue.
Microsoft will now disclose the protocols and design interfaces of
the Windows system. The result of this change will be that
developers will more readily be able to design soft-ware that is
compatible with the Windows system. I believe that consumers and
developers will both benefit from these changes.
The Justice Department should realize the benefits of enacting
this settlement.
Sincerely,
Willard E. Salter
MTC-00030171
Claude V. DeShazo
Maureen M. DeShazo
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing this letter to show my support for the recent
proposed settlement that was reached between Microsoft and the
Department of Justice. It is my opinion that the settlement will
provide the necessary push that the IT industry needs to help
bolster the economy. The economic troubles
[[Page 28832]]
that America is facing all started when the antitrust suit against
Microsoft was announced. Our stock market and economy went from
being the best in history to being mired in a nasty recession.
Microsoft is the one company that has the ability to save our
economy, and since the settlement makes them work ever closer with
their competitors, competition in the IT industry will benefit, and
the economy will show gains. The settlement that was reached is more
than fair, and I support it.
Sincerely,
15804 High Bridge Road * Monroe, WA 98272 *
360-794-2172 * 800-530-37OO * Fax: 360
794-5592 * Email: applady @ aol.com TOTAL
P. 01
MTC-00030172
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
January 28, 2002
Dear Mr. Ashcroft:
I encourage you to accept the recent anti-trust settlement
reached with Microsoft. Microsoft has agreed to terms that will open
up the software operating system, market making the market more
competitive and beneficial to consumers.
For example, Microsoft has agreed to disclose its operating
interface to competitors as well as to make it easier for computer
makers to remove Microsoft products from the Windows OS and to
install non-Microsoft products in their places. Microsoft has also
agreed to let a three person Technical Committee oversee settlement
compliance and assist in dispute resolution. I firmly believe all of
this will serve to open the OS market and to make it more
competitive. This competitive market will ultimately drive Microsoft
and its competitors to create better software. And it will be the
consumer who wins.
Sincerely,
MTC-00030173
Gary and Susan Reid
5651 Mission Road
Bellingham. WA 98226-9680
Tel. (360) 966-2385/Fax (360) 966-3171
To. The Attorney General
From Gary Reid
Date: January 28, 2002
Re' Microsoft Anti-Trust Settlement
From my viewpoint as a consumer, this suit needs to be resolved.
I believe that this suit will cost me money. First, it has increased
Microsoft's cost to do business; second, it has diverted efforts
from producing a better product: and. third, the tax dollars spent
on this suit exceed, am possible savings to tile public.
I believe than Microsoft's product is fairly priced when
compared to the benefits obtained. I can be pan or a communication
revolution that has changed the world for less than $20000 Does not
M?? have a proprietary right to its systems? It appears that the
patent holder of the ?? hoop has more rights than the designers of
this life-changing system.
The ineorpera?? of the internet browser into the basic system is
important to the con?? It should not be separated to give, a
competitor an advantage. Several of the business ?? that were in
question have already been changed. If our economic system is to
work. competitors need TO produce boiler products--not resort
to politically driven ?? that result, in pourer products for the
purpose of bringing equality ee Microsoft
MTC-00030174
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I want to take advantage of this opportunity to give my opinion
on the settlement concluded last year between Microsoft and the
Department of Justice. I believe the agreement represents a good
deal and should continue to be supported by the federal government.
The agreement is fair and the government received many strong
provisions. Microsoft has agreed to design future versions of
Windows to provide a meehanism to make it easy for computer makers,
consumers and software developers to promote non-Microsoft software
within Windows. This mechanism will make it easy to add or remove
access to features built in to Windows or to non-Microsoft software.
This change will give consumers the freedom to change their
computer's configuration whenever they so desire. This agreement is
also good for consumers because it allows Microsoft to focus their
attention on new products that consumers have come to expect. This
will make everyone more efficient, whether they use the products at
home or their job.
Sincerely,
Maya Balle
MTC-00030175
19 Lakeview Drive Kinnelon, NJ 07405-3113
January 12, 2002
Attorney General John Ashcroft
US Department of Justice
Washington, DC 20530-0001
Dear Attorney General Ashcroft:
I am writing to express my support in the recent antitrust
settlement between Microsoft and the federal government. I sincerely
hope that no further action is being taken an the federal, level.
Considering the terms of the agreement, Microsoft did not get off
with just a slap on the wrist. In fact, Microsoft is left to make
several significant changes to the ways that they handle their
business. For example, Microsoft has agreed to make available to its
competitors, any protocols implemented in Windows' operating
system products that are used to interoperate natively with any
Microsoft server operating system. With the many terms of the
agreement, there should be no reason to pursue father litigation
against Microsoft on any level.
Thank you.
Sincerely yours,
Donald B Wain
MTC-00030176
Seattle Pacific University
School of Business and Economics
3307 Third Avenue West Seattle, WA 981 19-1997
Phone: 206 281-2970
Fax: 206 281-2733 http://www.spu.edu
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
The purpose of this letter is to support Microsoft and the
antitrust settlement, The suit brought against Microsoft was
frivolous and misplaced. Clearly, Microsoft has been the leader in
the technology industry and has driven the incredibly positive
returns in the stock market for the entire decade of the 1990s.
Government meddling in business has almost never produced positive
results--but in this case, the interference has been even more
egregious than ever before. I disagree with any Government
involvement.
The terms of the settlement will allow other companies the
ability to compete and will also be more beneficial/advantageous to
consumers. In addition, Microsoft has agreed not to retaliate
against software and hardware developers and competitors. They have
also agreed to make it easier for non-Windows software to operate
within Windows, starting with Windows XP. Surely, you must agree
that Microsoft has shown much more than good faith in this entire,
ridiculous lawsuit!
Best regards,
Carolyn A. Strand, Ph.D., CPA
Assistant Professor
MTC-00030177
Liam Newman
15127 NE 24th St #403 Redmond, WA 98052
January 28, 2002
Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW Suite 1200
Washington, DC 20530-0001
Dear Attorney General:
I was happy to hear the Department of Justice made the wise
decision to settle the Microsoft antitrust case. As a software
developer, I am cognizant of the benefits settlement agreement
provides to both Microsoft and to its competitors.
I am supportive of Microsoft's efforts to dispel concerns about
anticompetitive behavior. Microsoft has agreed to disclose portions
of its code to its competitors, as well as to make it easier for
consumers to run other software systems with Windows. Future
versions of Windows will be designed with mechanisms that will allow
consumers to remove features of Windows and replace them with non-
Microsoft programs. By these and other concessions, Microsoft has
really gone above and beyond what should be required it.
It is time for the litigation to conclude so Microsoft will be
free to focus its resources on developing new products. I hope you
continue your efforts to resolve this case. Thank you for your
consideration.
Sincerely,
Liam Newman
MTC-00030178
5984W10800 N
Highland, UT 84003
[[Page 28833]]
January 21, 2002
Attorney General John Ashcroft, DOJ
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft,
I am appalled that the Microsoft antitrust case has gone on for
this long. Three years have been spent already in the federal
courts, and the possibility that even more time and money could be
wasted in an extended court battle is outrageous. The push for
continued litigation represents a pathetic attempt on the part of
state legislatures to line their own pockets at Microsoft's expense,
It is not in the best interest of the consumer for another round of
proceedings to be brought against the Microsoft Corporation; indeed,
the economy and the technology industry have been stagnating since
the case began. The proposed settlement would not only prevent
future antitrust violations, it would also allow Microsoft and the
Department of Justice to get back to business. This is what the
economy, the consumer, and the IT industry all need.
Microsoft and the Department of Justice were able last November,
with the aid of a courtappointed mediator, to reach a settlement
that was realistic as well as just. In the interest of wrapping up
the case, Microsoft has agreed to conditions that extend to products
and procedures not found to be unlawful by the Court of Appeals.
Microsoft has, in fact, already made the necessary changes and is no
longer in violation of antitrust laws. For example, Microsoft has
agreed to refrain from taking retaliatory action should software
developers or computer makers introduce software onto the market
that directly competes with Microsoft products, Microsoft has also
agreed to disclose various interfaces integral to the Windows
operating system for use by its competitors. I cannot imagine that
the Department of Justice will be able to find the agreement to be
anything but fair.
The settlement needs no revision. Continued litigation is not in
the best interest of the consumer, I do not believe that further
action needs to be taken on the federal level. I urge you and your
office to support the settlement.
Sincerely,
Michael Curtin
CC: Representative Chris Cannon
MTC-00030179
14761 N 88th Lane
Peoria, AZ 85381-2780
January 18, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Attorney General Ashcroft:
As a member of the technology industry, my only concern when
working with computers and software is whether or not I can rely on
it consistently over time, Microsoft has delivered the best services
and products In the industry over the last decade and has benefited
consumers, software developers, and computer makers alike, While I
think that Microsoft, like any large corporation, has probably been
aggressive in its use of marketing, I think that the lawsuits have
been brought on not because there are antitrust violations of any
great nature, but, because the Clinton administration had political
vendettas against Microsoft for their lack of financial support for
the party.
The government should stay out of big business and the
technology industry especially at this time of growth where our
country is competing with other nations for the lead in the IT
sector. Even though I think the settlement should have never
occurred in the first place, I want to see it come to fruition
because it is In the best interests of everyone involved to end
litigation. Let Microsoft focus on innovation and growth.
Under the terms of settlement Microsoft is giving away numerous
technological secrets, which seem s to me to be in violation of
their Intellectual property rights, They are also agreeing to
license its Windows" operating system products to the 20
largest computer makers on identical terms and conditions, including
price. This stipulation seems to me to be creating an opportunity
for monopolistic behavior since there will be collaboration on
pricing.
In spite of these flaws, the settlement should be finalized, The
nine states holding out should be reprimanded and all of this has to
come about due to the direction off your office. I ask you to please
take these thoughts into consideration. Thank you for your time.
S. Gorman
MTC-00030180
1624 Etain Road
Irving, TX 75060-5518
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
January 26, 2002
Dear Mr. Ashcroft:
It's good to see that the Justice Department has ended its very
long and costly antitrust lawsuit against Microsoft. By freeing the
innovative giant to fully focus on business, the Government will be
aiding the creation of many jobs.
The agreement calls for Microsoft to agree to terms that extend
well beyond the products and procedures that were actually at issue
in the suit--for the sake of wrapping up the suit. One
provision calls for Microsoft to disclose and document, for use by
its rivals, various interfaces that are internal to Windows"
operating system products--a first in an antitrust lawsuit.
Good work deserves its rewards. Microsoft has produced amazing
software products for the world. It is time now for the government
to allow the provisions of the agreement to fall in to place. No
more action should be taken at the federal level against Microsoft.
MTC-00030181
January 21, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
As a fellow Republican in Rep. Tom Delay's district I wish to
express my support of the settlement reached last November between
the Department of Justice and the Microsoft Corporation. It has now
been 3 years since the Justice Department began the litigation
process against Microsoft. During this time countless dollars have
gone to court mediators who endlessly debated the merits of this
case. In times where budgetary resources are becoming increasingly
scarce this action is increasingly appalling. Three years has been
too long. I cannot imagine there is anything more to discuss.
Once more, the settlement that was reached contains many
concessions on behalf of Microsoft, in an attempt to settle the
dispute Microsoft has been willing to agree to these terms despite
their lack of guilt in the case. Microsoft has agreed to design
Windows XP with a particular mechanism that will allow users to add
competing software into the system. This will revolutionize the way
our operating systems are configured. I believe that if Microsoft is
willing to make these changes, the settlement should be enacted. I
strongly support the settlement and look forward to the end of this
case.
Sincerely,
Pamela Spencer
cc: Representative Tom DeLay
MTC-00030182
FAX TO ATTORNEY GENERAL JOHN ASHCROFT
1 202 307 1454
1928 Claremont Country Club Commons
Normal, IL 61761
January 28, 2002
Attorney General John Ashcroft
United States Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft,
It is in the best interest of the American public to finalize
the antitrust settlement with Microsoft as soon as possible.
Although we are happy to see Microsoft will not be broken up, we
maintain our belief that Microsoft is still receiving unwarranted
treatment. Under the terms of the concession, Microsoft has agreed
to disclose internal interfaces, and increase its relations with
software developers. All of these concessions have their positives
and negatives. But, it seems to us when a company starts from
nothing and is innovative to the point that it becomes the
unprecedented leader of an industry, that company should be
applauded, not criticized.
We urge your office to free up the IT sector and allow it to
grow again at the rapid rate it did before litigation. Only by
allowing Microsoft to focus on business--not politics will the
tech sector make a quick recovery. Thank you for your time. We
appreciate your consideration of our thoughts for the continuing
growth of Microsoft for everyone's benefit.
Sincerely,
Joseph and Maxine Stephens
MTC-00030183
13611 160th Avenue NE
Redmond, WA 98052
January 28, 2002
Attorney G metal John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
[[Page 28834]]
Washington, DC 20530
Dear Mr. Ashcroft:
The Department of Justice has finally ended its pursuit of the
Microsoft Corporation. A proposed settlement was reached between the
two last November, and I am in full support of it. Now my government
will be able to focus its attention o 1 more pressing matters than
Microsoft. The settlement that has been reached is more than fair to
all parties involved, and I urge you to, approve it as soon as
possible. Microsoft will now be communicating more with their
competitors than ever before, which will provide the IT industry
with the necessary boost it needs. They have agreed to share design
information with their competitors concerning the internal make-up
of the Windows operating system, an I will make future versions of
Windows that will make it easier for companies to manipulate the
operating system and install their own software into it.
All in all, his settlement benefits the industry and economy and
should be implemented as soon as possible.
Sincerely,
Reginald L. Armfield
MTC-00030184
1624 Etain Road
Irving, TX 75060-5518
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
January 26,2002
Dear Mr. Ashcroft:
It's good to see that the Justice Department has ended its very
long and costly antitrust lawsuit against Microsoft. By freeing the
innovative giant to fully focus on business, the Government will be
aiding the creation of many jobs.
The agreement calls for Microsoft to agree to terms that extend
well beyond the products and procedures that were actually at issue
in the suit--for the sake of wrapping up the suit. One
provision calls for Microsoft to disclose and document, for use by
its rivals, various interfaces that are internal to Windows"
operating system products--a first in an antitrust lawsuit.
Good work deserves its rewards. Microsoft has produced amazing
software products for the world. It is time now for the government
to allow the provisions of the agreement to fall in to place. No
more action should be taken at the federal level against Microsoft.
Yours truly,
Peggy Broyles
MTC-00030185
Francis E. Baird
206 Radnor Chester Road
Villanova, PA 19085
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing in full support of the recent antitrust settlement
between the US Department of Justice and Microsoft, Although I am
happy to see that Microsoft will not be broken up, I believe the
current penalties are still too harsh. I am an avid believer in free
market enterprise. Microsoft continually outdid its competitors by
developing better products and services faster. This is called free
market competition and Microsoft's efforts only served to increase
the rate of growth in the industry. They should be applauded for
their efforts not criticized.
I sincerely hope that the remaining nine states opposing
Microsoft's actions drop litigation immediately and allow the IT
sector to focus on business which is in the best interest of the
American public, especially in this time of recession.
Sincerely,
Francis Baird
cc: Senator Rick Santorum
MTC-00030186
19355 Sherman Way, Unit 33
Reseda, California 91335
Phone 818/885.7179
Fax 818/885.1428
January 28, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
Please see that the new Federal District Court judge approves
the settlement in the Microsoft case. The settlement is good for the
country, because the information technology industries is a leader
in fostering American prosperity through increased efficiency as a
result of useful innovations, and because Microsoft is a vital part
of the IT industry, which has for too long been stymied by this
litigation.
The settlement is fair and will be adhered to. A committee of
software engineering experts will be able to look throughout
Microsoft's facilities and into its software code to see that the
agreement is followed. Other companies will be able to make any
complaints they may have to the committee and the committee will
investigate. This sounds like an approach that should work well.
Please keep up your efforts to resolve this case now that we are
so close.
Thank you.
Sincerely,
Sonia Tarrish
MTC-00030187
DAN LESTER
6511 164th Street Southwest
Lynnwood, WA 98037
January 28, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I would like to inform you of my support of the proposed
settlement in the antitrust lawsuit against Microsoft. This
litigation has extended much further, and cost more money, than the
public wants. It should be completed without further delay.
Microsoft has made a significant attempt with this agreement to
encourage weaker competitors to gain market share. They will make it
easier to configure Windows with the software of competitors and
will offer top computer makers equivalent terms and conditions to
encourage fair play. Software developers will benefit from measures
that are sensitive in scope, gaining the ability to license
Microsoft's intellectual property and access their Windows source
code. Now that we have the opportunity to move on, let us enact this
fair, court mediator-assisted plan and get back to business. Any
further action would just do harm to our fragile economy and truly
over-step the public's feelings on the issue. I hope we have your
approval.
Sincerely,
Dan Lester
MTC-00030188
7080 Weybridge Road
Weybridge, VT 05753
January 27, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Attorney General Ashcroft:
I understand there is a 60-day public comment period, as
required by the Tunney Act, with regard to the settlement between
Microsoft and the Justice Department. Please know that I am fully
supportive of this court mediator-assisted compromise and am urging
you to cease any further legal action against Microsoft. Microsoft's
success is extremely important to the U.S. economy, technological
innovation, and millions of consumers. Microsoft's
offer--access to their internal code for future design and
permitted licensing of their intellectual property--should more
than suffice to their competition. Creative, forward-thinking
individuals and companies should not be penalized because their
competitors are not able to be as successful due to their own lack
of ability. This deal offers capitulation with sensible restraint,
so I urge you to finalize it and move on to more important matters.
Thank you very much.
Yours truly,
Shirley Claudon
MTC-00030189
TAYLOR ANGUS RANCH
Lester and Pain Taylor
HC 89, Box 225
Pleasant, AR 72561
Mt. Pleasant, AR 72561
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue NW
Washington, DC 20530
RE: Microsoft Settlement
Dear Mr. Ashcroft:
We understand that the public comment period on the proposed
settlement agreement between the Department of Justice and Microsoft
closes today, January 28, 2002. We are writing to cast our votes in
favor of settlement.
Given the record of accomplishment so far in this case, it makes
no sense to continue litigation when you have the chance to conclude
the case in a manner beneficial to the economy. The primary
complaint against Microsoft was that consumers who chose to
[[Page 28835]]
use Windows operating systems for their computers were precluded
from utilizing non-Microsoft software Programs for such services as
Internet browsers and messaging services within Windows. Microsoft
has agreed to end this practice, and open its Windows systems to
such competition. With the major complaint answered, there is no
need to further litigate.
Please end this case, and put Microsoft back to work. The
country needs to heal. Thank you for your kind consideration in this
matter.
Sincerely,
Lester A. Taylor
Pamela J. Taylor
MTC-00030190
1738 Swann Street,
FAYETTEVILLE, NC 28303
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
There has been a recent settlement between the Department of
Justice and Microsoft. I want to give my support to this agreement
and ask that you do also. The whole case, in my opinion, was a
boondoggle. The lawsuit was entirely political, more a result of the
collaboration of Microsoft's r??vals tan any unethical business
practices. I find it interesting that we comp ??out competition from
abroad, urge innovation, yet in other countries, the government
helps companies. In our country, companies, if they become ??o
successful, are hauled into court, completely at the mercy of their
competitors and the government's definition of success. This is a
shame out the two parties have reached an agreement and I urge you
to give your approval since they, obviously, want this to end.
Moreover, Microsoft has acquiesced to a great number of demand
from the Department of Justice. Microsoft has agreed to grant
compute takers broad new license to cast Windows as to promote non-
Microsoft software programs; Microsoft has agreed to new relations
with software developers; Microsoft has agreed to internal interface
disclosure. Enough is enough.
Sincerely,
William Hatley
MTC-00030191
FAX??
Date: Monday, January 28, 2002
To: US Department of Justice--
Attorney General John Ashcroft
Fax: 202-307-1454
From: GreCon Dimter, Inc.--
Larry Hilchie
Phone: 425-313-0275
Fax: 425-391-1686
Pages: 1
Subject: Microsoft Settlement
Dear Mr. Ashcroft,
I am faxing you concerning the Microsoft settlement.
I believe in free enterprise and have for many years worked with
other small companies. I have used computers since the mid 1980's in
my businesses. I greatly appreciate all that Microsoft has done to
enable US companies but especially small companies do their business
productively. We faced major costs with unknown results trying to
use custom software before the success of Microsoft who offer us
competitive suitable software for our various needs.
I, like many other people in small business, feel that major
companies which try to compete with Microsoft: are trying to use the
US government and courts to fight Microsoft success because these
big companies have not met the market needs that Microsoft so
successfully addresses. While I was totally opposed to the court
actions, I was pleased that a settlement was reached at least
between the US government as well as many states and Microsoft. The
settlement was a compromise but I thought would enable Microsoft to
focus again on their customers' needs in a world of global
competition. Weakening Microsoft could enable not only US
competitors but overseas competitors an unfair advantage. Microsoft
is a major US exporter which we need and has helped many other
companies and technologies grow to the benefit of the USA. I hope
this settlement will be enacted this month.
I believe that less government and more individual initiative is
what makes the USA strong in this world. Let us finally let
Microsoft focus on their business which has definitely help our
company and many thousands of companies our size compete daily in
our business areas. Thank you for your time. I wish you continued
success in your fight against world terrorism.
Sincerely,
Larry Hilchie
GreCon Dimter, Inc.,
19536 SE 51st Street,
Issaquah, WA 98027 USA
MTC-00030192
FAX
1-202-307-1454
Renata B. Hesse
AntiTrust Division
U.S. Dept. of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-001
Midrosoft Settlement
Dear Sirs,
We are in agreeement with the rulings of the Court of Appeals in
the Microsoft suit. I feel enough is enough.
Many thanks for you time + effort beyond the hrs of 9-5.
Sincerely,
(Mrs.) Dick C. Grossblatt
MTC-00030193
Comments on the Revised Proposed Final Judgment
http://www.meer.net/iq/doj--comments.html
John Giannandrea, Independent Software Developer, formerly
('94-'99) Chief Technologist in the Internet Browser group at
Netscape/AOL
Summary
After reviewing the Revised Proposed Final Judgment, the
Competitive Impact Statement, the May 18th 1998 Antitrust complaint
together with the findings of the District Court and the Court of
Appeals I submit that the Proposed Final Judgment fails to describe
effective remedies for Microsoft's illegal activities.
An effective Final Judgment would prevent recurrence of the
illegal behavior and provide relief and protection for independent
software developers to develop innovative new middle-ware products
and compete with Microsoft in the market for Windows software. The
terms of this Final Judgment will not achieve this result because it
is seriously flawed. These comments briefly describe the following
problems with the Proposed Final Judgment:
1. Problems with the scope of the remedy
2. Shortcomings in the OEM configuration provisions
3. Loopholes and technical shortcomings with the wording of the
judgment
4. Restrictive language related to Intellectual Property.
5. Problems with the term and proposed implementation
6. Flaws in several of the definitions
Taken together I believe these flaws in Proposed Final Judgment
make it an inappropriate remedy for the illegal behaviors found by
the Court of Appeals. While changing some of the specific wording of
the Final Judgment and removing some of the loopholes will make it
stronger, on balance it is a wholly inappropriate remedy for the
ongoing harm done by Microsoft in protecting and extending its
Windows monopoly.
ig @ meer.net
January 27th, 2002.
1. Problems with the scope of the remedy
There are several problems with the scope of the proposed
remedies which are likely to make it ineffective in practice. The
Final Judgment does not correct the harm done to the marketplace
today by Microsoft's existing software products, nor address the
issue of backwards compatibility and harm done to the market by
ongoing changes ("upgrades"). Nor does the Final
Judgment address the crucial issue of APIs in Microsoft middle-ware
products themselves, as opposed to APIs in the Windows Operating
System Product.
1.1 What products fall under the proposed remedy?
Sections III.D, III.E and III.H limit the practical effects of
the Final Judgment to some future versions of Microsoft's latest
operating system product (WindowsXP, SP1) or 12 months from
submission of the Final Judgment. This will not provide effective
remedy for the actual installed base of Windows users, of which
WindowsXP remains a small minority. Microsoft's monopoly position
is, and will be for the length of the initial proposed term, made up
of Windows2000, WindowsME, Windows98 and Windows95 products and
their associated middle-ware product lines. It is in these products
that harm is and was being caused by the illegal activities. For the
Final Judgment to be effective in providing relief, the
communications protocol and Windows API disclosures need to apply to
the actual installed base of Windows. It is no more technically
difficult for Microsoft to document current APIs than it is to do so
in future products.
[[Page 28836]]
The final paragraph of III.H limits the proposed remedies to
middle-ware as defined by a timeline relative to the release of new
Windows operating system products. The reality is that the illegal
conduct relates to all existing and past Microsoft middle-ware
products, and the release of future versions of Windows will not
significantly affect the harm being done in the marketplace. There
is no technical reason why existing Microsoft and non-Microsoft
middle-ware will not be compatible with future versions of Windows.
In fact Microsoft makes considerable effort to ensure that Windows
is "backwards compatible" with its own applications.
Remedies need to apply to all future versions of Windows, and all
middle-ware now and in the future, and the obligations of the
monopoly holder should not change unilaterally with a product
release cycle under their express control. Much of the harm found by
the Court is related not just to the disclosure of interfaces and
APIs, but to the fact that Microsoft can stop supporting a
documented feature or API without consulting the affected parties.
One possible way to improve the Final Judgment would be to add a
new condition to III. C. that allows OEMs the option of shipping any
prior Microsoft middle-ware with any subsequent version of Windows.
1.2 Middle-ware APIs are as important as Windows APIs Section
III.D. proposes that Microsoft shall disclose APIs used by its
middle-ware to interoperate with a Windows operating system. Since
middle-ware such as Internet Explorer or Windows Media Player has
added, subtracted or altered significant APIs with each subsequent
version, including minor, so called "maintenance"
versions, and since these APIs are depended on by the the majority
of ISVs. III.D. should be extended to require disclosure of all APIs
used by, or provided by any Microsoft middle-ware product, including
APIs in other middle-ware software.
1.3 Changes to current and past middle-ware needs to be covered
The definition in VI.] excludes software in minor version changes
from the definition of Microsoft middle-ware. Yet it was exactly
such a minor change that disabled Java for millions of Internet
Explorer users, or forced thousands of ISVs to abandon the Web Plug-
in API and redevelop or abandon their middle-ware. (See http://
www.meer.net/jg/broken-plugins.html) At a minimum all software
middle-ware released by Microsoft and in use by a majority of
Windows users should be covered by the Final Judgment for it to be
effective.
2. Shortcomings in the OEM configuration provisions It is clear
from the findings of the Court that needs to exist remedies that
enable OEMs and End Users to be able to add, remove and replace
middle-ware without limitation by Microsoft through its Windows
product. It has been shown to the Court that its technically easy to
allow middle-ware either from Microsoft or its competitors to be
added removed from the Windows operating system. The current
language in the Final Judgment does not protect distribution of new
and innovative forms of middle-ware and therefore fails to remedy
the current situation where investment and competition in Windows
middle-ware is "chilled" by Microsoft's prior and
current practices.
III.H.3 allows Microsoft to undo an OEM configuration in any
subsequent version of a Windows product and to change the way an
OEM's configuration interacts with Windows in each subsequent
version. This lack of "backwards compatibiliy" is in
Microsoft's interest at the expense of the OEM's investment.
III.H.3. Allows Windows OS to undo an OEM's configuration
automatically after 14 days. But it does not give the same
capability to an ISV, or the OEM themselves. If a third party
provides competitive differentiation by adding features and services
on top of Windows they should be able to do so with no hindrance
from Microsoft at all. If it is determined that Windows should have
a "revert" feature that disables or undoes an OEM's
enhancements, then that feature should have an "undo"
capability so that the enhanced product purchased from the third
party is not irreparably harmed by the behavior of the Windows
software at some later time. III.H attempts to give end users and
OEMs the right to add and replace non Microsoft middle-ware with
competitive middle-ware, an essential component of the proposed
remedies. Rather than just stating this as a simple requirement,
additional restrictions are imposed in III.H.2:
that competing middle-ware be replacing a Microsoft middle-ware
that the middle-ware be a specific subset of possible middle-
ware that has a particular and limited type of user interface
that Microsoft can require (and itself present?) a confirmation
dialog for the end user if the change is made by software that the
user presumably installed themselves
III.H.3 imposes conditions on Microsoft operating system
products altering OEM configurations, but Microsoft middle-ware also
has a documented history of making such alterations. The Final
Judgment does not protect OEM investments or end user choices unless
it enjoins all Microsoft software products from altering, without
express permission, the end user experience. It is exactly
Microsoft's ability to make unilateral changes that expresses its
monopoly power and distorts the market for improvements to Windows.
The mechanism proposed in III.H.1 allows Microsoft to provide a
interface choice to enable "all Microsoft Middle-ware Products
as a group". This should be specifically disallowed since it
reinforces the distinction between Microsoft and non Microsoft
software, and suggests that an end user would be given the default
choice of "taking everything" (i.e. all available
Microsoft middle-ware, turning off competitors middle-ware) in order
to allow ease of use and configuration.
III.C.3 The requirement that a non-Microsoft middle-ware product
should display a user interface "of similar size and
shape" to a Microsoft middle-ware product is technically
onerous. The additional inferred requirement that a middle-ware
product can only launch automatically if a Microsoft middle-ware
product were otherwise to do so, is also technically unreasonable.
If the purpose of this remedy is to allow competition in such
middle-ware; to allow, for example, an OEM to configure a PC so that
it connected automatically to an IAP or ICP on boot up, then these
restrictions would preclude this.
3. Loopholes and technical shortcomings with the wording of the
judgment There are significant exceptions and conditions attached to
the definitions used by the Final Judgment. These exceptions appear
to make the remedies themselves weaker and in several cases are
technically inaccurate or groundless.
3.1 Excluding existing middle-ware
Section III.H after III.H.3 describes two exceptions where
Microsoft middle-ware would be allowed to execute in preference to
competing Middle-ware. These exceptions effectively negate the value
of III.H and are seriously flawed.
3.1.1 The first exception is for middle-ware "invoked
solely for use in inter-operating with a server maintained by
Microsoft". Given the current and past scope of MSN and the
services provided by various servers in the
"microsoft.com" domain, this exception is unreasonable.
For example, a component of Windows that contacted a server to
upgrade or maintain the device driver software on a Personal
Computer would be exempt from III.H. This would presumably preclude
an OEM from providing their own value-add service using the same
component APIs of Windows. As the value and prevalence of network
services grows, Microsoft would be able to continue to exclude
competing middle-ware as long as they could define the service as
being hosted at Microsoft. This would also include most .NET
services, which Microsoft has publicly stated will be at the core of
most end user functions in all future versions of Windows. The
proposed remedy for past behavior is ineffective.
3.1.2 The second exception is if "non-Microsoft middle-
ware fails to implement reasonable technical requirements
.-.-.". This is an unreasonable and overly broad
restriction on the proposed remedy. The specific example given,
failure of support ActiveX, is a most egregious example. ActiveX is
not a feature of Windows, it is an API created for Internet Explorer
middle-ware expressly to tie that middle-ware to the Windows
platform. In a healthy competitive environment it should be end
users that conclude if middle-ware is providing "functionality
consistent with the Windows product", not Microsoft. The idea
that Microsoft themselves are qualified to say what is and what is
not a valid non-Microsoft middle-ware product puts the fox in charge
of the henhouse. In fact by the definitions of this section of the
Final Judgment, most existing successful non-Microsoft middle-ware
(.lava, Netscape Navigator, Web Plug-ins) would be exempt from the
remedy. It was precisely the success of these products, demanded by
end users, that precipitated the threat to Microsoft and led to the
illegal behavior.
3.2 Limitations on disclosure of communications protocols
Section III.E. Requires disclosure of any communications
protocol implemented in a Windows OS installed on a
"client"
[[Page 28837]]
computer. This would appear to exclude protocols implemented as
Microsoft middle-ware, such as Web Browsers, or communications
middle-ware such as e-mail programs (Outlook Express) or streaming
media players (Windows Media Player). It would also appear to
exclude protocols implemented in the same copy of Windows, running
as a "server". Given the advent of "peer-to-
peer" computing this distinction excludes more significant
protocols than it includes. To meet the intent described in the
impact statement, the requirement should be the disclosure of any
communications protocol implemented by the Windows Operating System
Product and any Microsoft middle-ware product.
3.3 Preventing disclosure on "security" grounds.
Section III.J.1.a attempts to limit the APIs and protocol
descriptions to be published as part of the proposed remedy. The
exceptions include those that would "compromise the security
.-.-." of the Microsoft products. It is well known
and supported by the majority of reputable computer security
experts, including many who work for Microsoft Corporation, that
disclosure of the mechanisms of software makes it more secure, not
less secure. In fact requiring Microsoft to document and disclose
APIs will make the products more secure as flaws are discovered by
peer review and then repaired. Computer security should not be
considered valid technical grounds to limit disclosure.
3.4 Limitations on who can access the disclosures
Section III 3.2 places all kinds of limitations on the
disclosure of the information central to the proposed remedy. In
III.D the Final Judgment requires Microsoft to disclose APIs to all
listed parties via "MSDN or similar" i.e. publicly and
for a small fee. This conflicts with III.J.2 which allows Microsoft
to withhold such information unless Microsoft itself determines
"a reasonable business need", or that the requester
meets "standards established by Microsoft for
.-.-. viability". These restrictions are
unnecessary and are not vital to the remedy. The required
information should be disclosed simply, via MSDN or Microsoft.com,
to anyone who has a valid Windows license.
Section III.J.2 additionally requires that non-Microsoft middle-
ware innovators be in "compliance with Microsoft
specifications" and, at their own expense, pass a Microsoft
defined third party verification test. These new tests and
requirements are onerous, and do not exist in the market today
except as optional marketing programs. In particular the non-
Microsoft middle-ware at issue in the anti-trust action would not
have met these standards. These additional requirements and
limitations will serve to place further hurdles in front of middle-
ware ISVs. They only serve the interests of the monopolist in
limiting access to the required APIs as has happened in the past as
documented in the Findings of Fact.
4. Restrictive language related to Intellectual Property.
The licensing terms implied by the Final Judgment are both more
onerous than the prevailing market today, and unfairly biased in
favor of Microsoft. The terms of III.G are not in force if Microsoft
licenses intellectual property from the third party. This would
appear to allow, for example, Microsoft to enter into an exclusive
distribution arrangement with an ICP if the ICP had a reciprocal
license to Microsoft for some middle-ware enhancement related to
their Internet content. This kind of transaction is common in the
industry today and would seem to weaken the intent of III.G.
Section III.I.5 grants Microsoft the right to require a
competitor to license to it IP rights to "relating to the
exercise of their options or alternatives provided by this Final
Judgment". This is an onerous and unreasonable requirement
because Microsoft does not need such non reciprocal IP rights to
comply with the Final Judgment. (Could such rights be licensed
father by Microsoft to other ISVs?)
III.I requires Microsoft to reasonable and non discriminatory
licensing of any intellectual property required for the market to
take advantage of the provisions of the Final Judgment. However
there is a restriction (H.III.3) on sub-licensing. This would in
practice curtail most ISV business models if a technology innovator
was unable to resell its technology to an "end user" OEM
or ISV without that entity then being required to obtain a license
from Microsoft. The last paragraph of III.I explicitly states that
the terms of the Final Judgment will not confer any rights with
regard to Microsoft IP on anyone. But as the Final Judgment requires
disclosure by Microsoft of APIs, protocols and detailed
documentation of mechanisms inherent in middle-ware interfaces, then
certain legal rights are in fact surrendered in most jurisdictions.
III.I does not address the significant and influential market in
royalty free software (such as Linux) and the open standard nature
of the Web protocols and standards. Industry standards groups which
Microsoft itself is an active member of such as W3C (The World Wide
Web Consortium) customarily require all APIs and protocols to be
royalty free. Yet III.I potentially places further restrictions or
costs on ISVs developing products and innovations under that model
if they wish to integrate them with Windows.
5. Problems with the term and proposed implementation
5.1 Term is not long enough
The Final Judgment has a term of five years (V.A), or seven
years with additional violations. Given the pattern of illegal
behavior by Microsoft since 1995 and the fact that Windows Operating
system product cycles are frequently many years apart, the scope of
this agreement appears unusually short. A 10 or 15 year agreement
would be more appropriate.
5.2 Issues with creating a competent technical body
The Final Judgment requires a three person technical committee.
While this committee is intended to be knowledgeable about software
design and programming, it also needs to be knowledgeable about
Internet standards and protocols, online transactions and web e-
commerce architectures and business models. It is unlikely that a
committee as small as three people will have the requisite skill set
to oversee the broad range of initiatives and innovations that
center on the Windows platform and are the subject of the monopoly
concern. The committee would be more in keeping with industry
standards and accepted practice if it were larger and comprised of
experts in several fields.
5.3 Public disclosure of information relating to enforcement
Section IV.B.10 and other language in :IV (e.g IV.D.4.d)
suggests that the Final Judgment requires the work of compliance and
technical overview to be conducted in secret. For example if an ISV
submitted a complaint to the TC or the Microsoft Compliance Officer
it is not required that the complaint and its response be published
(IV.D.3) It would be more in keeping with industry standards and
accepted practice for technical discussion around the enforcement of
a Final Judgment be open to wider technical review. This would
improve the quality and accuracy of such review as well as
reassuring the community of OEMs, ISVs etc. that the enforcement
process was actually working. At a minimum there should be a
requirement that the TC host an independent web-site to communicate
with the industry about the status of enforcement issues.
6. Flaws in several of the definitions
There are many problems with the definitions of key terms that
affect the meaning and substance of the Final Judgment.
VI.A. A suitable definition for Application Programming
Interface needs to include interfaces provided by middle-ware
itself, since middle-ware can include tiers of software, not just a
simple arrangement where middle-ware calls the Windows software
layers. A more accurate and common definition of APIs would be
independent of both the terms Windows and middle-ware. VI.B. The
scope of Communications Protocol should not be limited to
communications with a "server operating system". This
excludes the concept of one Windows XP PC talking to another PC,
which is a common occurrence and should be within the scope of the
remedy. "Peer-to-peer" is an example of a middle-ware
category that is not covered by this definition. VI.J.2 and
VI.K.b.iii both require that the covered software be
"Trademarked" to be under the terms of this agreement.
This requirement seems to exclude certain middle-ware. For example
"My Photos" and "Remote Desktop" are new
middle-ware in WindowsXP and are apparently not trademarked. VI.T
defines Trademarked to exclude certain named products regardless of
their impact in the market.
VI.J.4 excludes software that has no user interface, such as a
streaming video codec or a web commerce protocol handler.
VI.K.1 lists certain products explicitly as middle-ware. Given
that the Final Judgment as written only covers Windows XP and
subsequent versions (it should be modified to cover prior versions),
the list of covered products and categories should also include MSN
Explorer, Microsoft Outlook and other Microsoft Office components,
Windows Movie Maker and others. VI.N limits the definition of a
"non-Microsoft middle-ware
[[Page 28838]]
product" to one that has shipped 1,000,000 copies in a
previous year. Under this definition, Netscape Communicator would
not be covered by this Final Judgment, nor would Sun's Java JVM,
both examples cited by the Court of middle-ware that require relief.
The idea that a competing product has to already be successful to
receive the protection of the Final Judgment is flawed. This
condition should be removed. VI.N defines non-Microsoft middle-ware
in terms of code exposing APIs, which are defined in VI.A as being
uses by Microsoft middle-ware (this is a circular definition), More
importantly, non Microsoft middie-ware should not be defined more
narrowly than Microsoft middie-ware. Not all middie-ware
"exposes a range of functionality to ISVs though punished
APIs" although some (like lava) does. The original Netscape
1.0 web browser would have failed the definition in VI.N.
VI.Q defines Personal Computer as using an Intel x86 processor.
Microsoft has in the past and will most likely in the future ship
Windows Operating systems for processors other than x86. The Court
found that Microsoft's illegal practices in respect of distribution
of Internet Explorer also extended to the Macintosh Power-PC
platform so this definition is overly narrow. VI.R. 150,000 beta
testers is an unusually large number, even for Windows and suggests
that "timely manner" would be defined as the last test
release of a Microsoft product rather than the first public test
release. The interests of the enforcement are better served if
Timely Manner was defined as the first public test release of a
Windows OS product.
[end]
http://www.meer.net/jg/doj--comments.html
MTC-00030194
January 28, 2002 5:09 PM
From:
Fax #:
Page 1 of 1
Jose Diaz
206 L Street Southwest Quincy,
Washington 98848
January 17, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to express my opinion about the recent antitrust
settlement between Microsoft and the US Department of Justice. I
think that the government should stay out of big business and not
interfere with the operations of our free market. Microsoft has done
a world of good for education, job growth, and technological
advances. They should be applauded, not reprimanded. I am glad to
see that the terms of the settlement do not break up Microsoft. They
are harsh though. For instance, Microsoft will have to disclose
technological information such as interfaces and protocols to their
competitors. They have also agreed not to retaliate against
competitors who distribute or promote non-Microsoft products.
I think the settlement is flawed n many ways, but it should be
finalized because the alternative, which is further litigation,
could be a lot worse. Please take a firm stance against the nine
states that want to continue opposition.
To tell you the truth, with all my respects to you, I think our
government should learn from Microsoft, our government started long
time ago and am able to see the flaw on it.--Microsoft had been
evolving for better in a competitive enviroment and it is growing,
even though, It stared a few years ago.
Sincerely,
MTC-00030195
3828 High Summit Drive
Dallas, TX 75244
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing today to encourage the Department of Justice to
accept the Microsoft antitrust settlement. The issue has been
dragged out for over three years now and needs to be put to rest. A
settlement has been reached, the terms are fair and the government
needs to accept it. In order to reach a settlement Microsoft has
agreed to many concessions. They have agreed to allow computer
makers the flexibility to install and promote any software that they
see fit. They have also agreed not to make any agreement that would
obligate any computer maker to use a set percentage of Microsoft
software. Also, Microsoft has agreed to license its software at a
set price no matter what software the computer maker uses or
promotes and no matter at what percentage they use Microsoft:
software. These terms are set to allow complete competition in the
realm of pre-installed software.
Microsoft and the technology industry need to move forward, the
only way to move forward is to put this issue in the past. A
settlement is available and the terms are fair, I would like to see
it accepted. Please accept the Microsoft antitrust settlement.
Sincerely,
Barem Christian
MTC-00030196
3828 High Summit Drive
Dallas, TX 75244-6620
January 22, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing today to encourage you and the Department of
Justice to accept the Microsoft antitrust settlement. This issue has
dragged on for over three yearn now and it is time to put an end to
it. Contrary to critics" claims, Microsoft has not gotten away
with easy terms. Microsoft has agreed to allow computer makers to
install and. promote software that competes with Microsoft's.
Microsoft has also agreed to release part of the Windows base code
to its rivals, making it easier for them to write competing
software.
The settlement is fair and should be accepted. Microsoft and the
industry need to move forward. It is time to end this government
harassment. Please accept the Microsoft antitrust settlement.
Sincerely,
Dorothy Christian
MTC-00030197
MARGARITA CAICEDO
FACSIMILE TRANSMITTAL SHEET
TO: Attorney General John Ashcroft
FROM: Margarita Caicedo
COMPANY: US Department of Justice
DATE: 01/28/02
FAX NUMBER: (202) 307-1454
TOTAl NO. OF PAGES INCLUDING
COVER: 2
PHONE NUMBER: (305) 466-0123
SENDER'S REFERENCE; NUMBER:
RE: Microsoft Settlement
SENDER S FAX NUMBER (305) 466-0117
?? URGENT
Following this fax cover is a letter in favor of the Microsoft
Settlement
Margarita Caicedo
P.O. Box 801510
Miami, Florida 33280
January 5, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington. DC 20530
Dear Mr. Ashcroft:
I am writing you today to express my opinion in regards to the
settlement that was reached with Microsoft in November. I believe
this settlement is fair and vital to improving our economy. Under
this agreement, Microsoft must share more information with other
companies, create more opportunities for other companies, and give
consumers more choices. Microsoft has agreed to create future
versions of Windows that will make it easier to install non-
Microsoft software. Microsoft must also share software books and
codes, and a technical oversight committee has been created to
oversee Microsoft compliance to this agreement. These stipulations
make it clear that this settlement is fair, and not simply a
cakewalk for Microsoft.
Thank you for making the right decision and considering public
comment on this issue.
Sincerely,
Margarita Caicedo
MTC-00030198
Eve & Andre Nowack
377 B.W. Broadway
Long Beach, N.Y. 11561
Jan. 28, 2002
Attorney General John Ashcroft
U.S. Dept. of Justice
Pennsylvania Ave. NW
Washington, DC 20530
Dear Mr. Ashcroft:
Last Nov, a settlement to the antitrust suit between Microsoft
and the Dept. of Justice was proposed and we would like to lend our
support to it. The public comment period is coming to an end and it
is our hope that the proposed settlement is approved shortly
thereafter. Millions of dollars have been spent by both sides in
this matter and that is a complete waste of money. Microsoft could
be investing that cash into research
[[Page 28839]]
and development, and the Federal Govt. could have used taxpayer
dollars in a much more productive manner. We hope that once the
settlement is approved there will be no further litigation against
Microsoft at the Federal level. The settlement calls for a 3-member
oversight committee that is extremely well versed in software
engineering. This committee will make sure tht Microsoft follows the
terms of the settlement and will also handle any 3rd party disputes
that might arise. Let us move on.
We support this settlement and hope it is enacted quickly.
Thank-you.
Sincerely,
Eve Nowack
Andre Nowack
MTC-00030199
Duane Ellis
206 Pine Blvd
Medford NJ 08055
January 28, 2002
Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Reg: US V Microsoft, Anti Trust Act Tunney Act Comments
Ladies and Gentlemen,
I am opposed to the settlement as written. I believe it not to
be in the public interest. Many times I've heard or seen comments to
the effect that "We can't do that .-.-., look at
the effect on our economy that would have .-.-."
Statements such as these are wrong and must be rejected. I believe
Franklin Roosevelt said it best:
The liberty of a democracy is not safe if the people tolerate
the growth of private power to a point where it becomes stronger
than their democratic State it self. That, in its essence is
Facism--ownership of a government by an individual, by a group,
or any controlling private power.--Franklin D. Roosevelt
That is also a great benefit of the Tunney Act, under which I
write this objection. There are two themes that I see missing: (1)
they should be broken up, and (2) their interfaces between the
companies and products lines must be publicly available. Each of the
baby-Microsofts must make use of, and work only from the same
publicly available documentation that every one else has access to.
Specifically:
1) The Divisions
I believe that the public interest would be better served
Microsoft should be split into at least 4 operating units, not the
two that Judge Jackson ruled.
Those divisions should be:
Games & Entertainment Group. Focus: The home user Duane
Ellis, 206 Pine Blvd Medford NJ 08055
Tunny Act Comments reg: Microsoft Includes XBOX, Cable TV.
WebTV, MSN, Hotmail, all "Internet Related" activities,
Microsoft Reader [eBooks] and Internet Explorer, Business
Applications
Focus: The business user
This would include Microsoft Word, Excel, PowerPoint, Access,
Visio Servers And Operating Systems
Focus: Core Operating systems, and servers. This would include
Microsoft Windows CE/95/98/XP/2000/whatever .-.-. and
all of its successors what ever they may be. Exchange Mail Server,
SQL Server, Terminal Server, Developer Tools
Focus: The software developer community, the people who write
the applications. This would include Visual Studio, the computer
language compilers for things like "C, C++, C#, Java,
linkers, assembler, Visual Basic, FoxPro" and so forth.
2) Publicly Document the Interfaces, common to all. This is the
fundimental means by which Microsoft has extended and held their
monopoly and will continue to hold it:
The proprietary communications formats the Microsoft
applications use. These 'communications formats"
include: (a) 'over the wire" communications such as when
one computer communicates with another [Such as a computer network,
or the internet], and (b) documentation of the file formats that
their products use [such as those used by Microsoft Office].
Today, through out the world many companies claim to have an
"ISO-9000" (or 9001, or 9002) certification. The
fundamental requirement those certifications have is simple:
Document what you do. Do what you document. Nothing more, nothing
less.
If you look back at the IBM Anti Trust case, and the Telephone
industry, a central theme in the solutions are or where: Document
the interfaces between the systems, and abide by them. The openness
of protocols and file formats is so fundamental that there must be a
lethal "Sword Of Damocles" making Microsoft document and
publish what they do so that competitors have a chance to offer a
competing product.
Duane Ellis, 206 Pine Blvd Medford NJ 08055 Tunny Act Comments
reg: Microsoft The most striking example of this I can find of this
is the documentation for the ubiquitous Microsoft Word DOC file
format, or the lack there of. If one was to write a competing word
processor, one needs to be able to read and write DOC files. To do
so, one needs documentation. To date, all DOC file format programs
have been reverse engineered [Those in the industry are aware of the
phrase "Undocumented Function Call", a hall mark of a
Microsoft Style] For example: I wish to write a word processing
program. To compete in the market place, my product must be able to
read and write the Microsoft Word DOC file format directly.
Nowhere at Microsoft. COM can one find an accurate description
of the DOC. The response I have seen about this is: You should
supply a plug-in converter for Word so that users could download it.
That might be one business solution. I think this will work just as
well as Netscape being able to supply their browser to customers
using this method .-.-.
My example word processor, to be a viable product must be able
to read and write a DOC file directly'--without messing up.
(How many times have you, or a co-worker imported a file, only to
find it screw up, this is a constant problem users face.) To
Microsoft's credit, on their web site one can find Microsoft's
"Knowledge Base" article id: Q111716 titled: "How
to Obtain the WinWord Converter SDK (GC1039)" Which has not
been updated since 1997. Obviously over the last 5 years we've seen
Word98, then Word-2000, and now Word-XP yet there is no updated
documentation that I can find. The simple test is this: Please
supply me with a Part Number and Price so that I may order full,
complete, and not 'reverse-engineered by a 3rd party'
documentation for the various file formats used by the last 4
versions of Microsoft Office (Office 98, ME, 2000 and XP). And no,
it's not in the MSDN developer package--I've looked. If
I've over looked it--please tell me exactly what file or
'page' to find this information.
By the way, the "GC1039" documentation refers you to
yet another document about RTF files that is of some help, but is so
hopelessly out of date (Again 1997)--and has this caveat: Note:
The sample RTF reader is not a for-sale product, and Microsoft does
not provide technical or any other type of support for the sample
RTF reader code or the RTF specification. Site: http://
msdn.microsoft.com/library/default.asp?url=/library/enus/dnrtfspec/
html/rtfspec.asp, click on "Appendix A: Sample RTF
Reader" [Visited & Verified January 28, 2002] Duane Ellis,
206 Pine Blvd Medford NJ 08055 Tunny Act Comments reg: Microsoft
Microsoft and all the baby-Microsofts must be required to document
completely, fully and un-ambiguously their external interfaces for
all of the products or groups of products for which they hold a
monopoly.
Given Microsoft's prior record there must be a
"Sword Of Damocles" to enforce this. My choice would
cost Microsoft nothing if they behave, and lots if they misbehave.
It works like this:
This requirement is in effect for a product, or families of
products where Microsoft represents more then 49.9% of the installed
user base, and does not expire for at least 20 years. The
requirement to supply documentation for a specific product interface
expires 1 year after the product is no longer available for purchase
(or licensing). Microsoft must in a timely manner, make widely and
freely available under a 'free license" (no patent
royalties or non-disclosures required), at a cost of no more then
the cost of duplication the documentation for all interfaces to
their products.
The first of such disclosures must be made at the same time each
"beta or test" version is made available. Specifically:
The interface documentation must be of the same quality and accuracy
that the 'beta or test" application is. Where
applicable, part of the documentation Microsoft should include
reference program [or application], with full source code under the
same free terms as the documentation that serves to validate the
documentation.
As each 'service pack" or 'patch" is
made available to improve an application, so must the interface
documentation be improved. If any one [not just baby Microsofts]
asks another for further clarification or information, that
information must be posted in a public way so that others may
benefit from the information. If a reasonable man
[[Page 28840]]
would conclude that the above conditions where not met, Microsoft:
would be required to refund 100% of the license fees they have
collected for the effected products, including a 5% interest as if
the license fees were deposited in a bank account. If a reasonable
man would conclude that the disclosures where purposely vague, or
show a pattern of problems that are not remedied the penalties
increase 10 fold. Duane Ellis, 206 Pine Blvd Medford NJ 08055 Tunny
Act Comments reg: Microsoft
The test of this solution is simple:
If Microsoft says they will document--they will have no
fear of the Damocles" sword, as it will never fall. This sword
makes them understand in simple terms: Do not forget to document
what you do, and do what you document. And you will do nothing else.
Thank you for your time.
Duane Ellis.
Duane Ellis, 206 Pine Blvd Medford NJ 08055 Tunny Act Comments
reg: Microsoft
MTC-00030200
Constance Roberts
3421 South Dye Road
Flint, Michigan 48507-1009
January 23, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am urging you to settle the lengthy antitrust lawsuit pending
against Microsoft. I think it is ridiculous that the case even made
it as far as it has.
I think it is a shame that the government has gone after
Microsoft, Bill Gates is simply a guy who made good and has been
punished for his success. The Justice Department seems to have
unfairly singled out Microsoft instead of treating all companies in
similar positions in an evenhanded manner.
Though I believe that the justice system has wasted significant
time and money in continuing to pursue legal action against
Microsoft, I believe that the terms of the current settlement are
reasonable, and I would like to see Microsoft back on track. I am a
stockholder in the company, so I am affected by its inability to
conduct business as usual.
The government's stated aim is to increase competition.
The new provisions Microsoft has agreed to will do just that. Users
and computer makers can more often and more easily install and
configure Windows in ways that promote and use competing products.
Please settle the case as quickly as possible.
Sincerely,
Constance Roberts
MTC-00030201
LOGISTICS,inc.
January 10, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to express my full support of the recent antitrust
settlement between Microsoft and the US Department of Justice. I am
glad to see that Microsoft will not be broken up, but the rest of
the concessions seem fair. In order to increase competition in the
tech market, Microsoft will agree to share information about how
Windows works with its competitors. This information will allow them
to place their own programs on Microsoft's operating system, and to
better compete with Microsoft.
I am a firm believer in free enterprise and a fan of what
Microsoft has accomplished in the last 10 years. There are many
large companies that also could be targeted, which leads me to
believe their suits are serving political interests than public
ones. I support the settlement and look forward to seeing it
implemented soon. This settlement will enable the country to move
forward again.
Sincerely,
Clifford Bagwell
cc: Senator Rick Santorum
1-800-810-8708
717-284-4521
FAX: 717-284-6024
P.O.Box 32
Pequeo, PA 17565
MTC-00030202
ReidMiddleton
728 134th Street SW--Suite 200
Everett, WA 98204
Ph: (425) 741-3800
Fax: (425) 741-3900
TO: Renata B. Hesse
DATE: January 28, 2002
FROM: Brian P. Seguin, PE PLS
ORGANIZATION: Antitrust Division, U.S. Department of Justice
FAX NO. (202)616-9937
PHONE NO. ( )
CITY: Washington DC
SUBJECT: Microsoft Settlement
MESSAGE:
Attached is my letter to Attorney General John Ashcroft
requesting that the lawsuit be settled under the terms agreed on
between the U.S. Dept. of Justice and Microsoft. Lets all get back
to work and get this economy going again. Thank you.
3622 99th Street Southeast
Everett, WA 98208
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
The antitrust lawsuit brought against Microsoft was unjustified
and flawed. The dispute in my opinion arose due to
competitors" envy for their own lack of innovation and
creativity. Microsoft has been the leading innovator of technology,
for over a decade. In the 80's when we lagged behind Japan in many
industries, Microsoft developed a product that streamlined and made
more effective many of our businesses. The company I worked for is a
perfect example as it was able to use Microsoft software for its
businesses.
The terms of the settlement are harsh and seem to reflect the
intense lobbying of Microsoft's competitors. Forcing Microsoft to
give up internal interfaces and protocols, making them agree not to
retaliate against other vendors, stipulating that they must grant
computer makers broad new rights to configure Windows so as to make
it easier for non-Microsoft products to be prompted, the settlement
also reflects lawmakers and politicians lack of concern for the
public.
This settlement only aims at giving competition an edge they did
not have and could not attain on their own.
Even though I think the settlement is unfair, I must support it
because the alternative of further litigation would be too much for
our weak economy. I urge your office to take a firm stance against
the opposition and stop any further disputes. Thank you.
Sincerely,
Brian P. Seguin
Professional Land Surveyor
Professional Engineer
MTC-00030203
George Arthur
12734 111th Lane
Largo, FL 33778-1943
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
The settlement with Microsoft in the antitrust case should be
approved in the best public interest of America. The settlement was
reached only after three months of negotiations with a court-
appointed mediator. What is more, the terms of the settlement
represent reasonable compromises of the positions of the parties,
and will be beneficial to the American computer technology industry
as a whole.
The settlement will make it easier for computer software and
hardware companies to work with and modify Microsoft's Windows
operating system. With disclosure by Microsoft of the internal
interfaces and server protocols by which Windows works with programs
and other computers, computer companies will be able to find better
ways to work with Windows. This can only encourage growth in this
industry.
I would appreciate your support of the Microsoft settlement. The
Federal Court should approve the settlement. Thank you.
Sincerely,
George Arthur
MTC-00030204
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
Enough is enough! Please implement the fair and equitable
settlement reached by the Dept. of Justice and Microsoft.
Washington state has been hit hard by the economic recession.
The Bush Administration is now in a position to stop the economic
troubles which now effect not only Washington state but the entire
nation. Microsoft mirrors the Market. When the tech sector was
healthy, the Market was healthy. It is my opinion that the
settlement will provide the necessary push that the IT industry
needs to help bolster the economy back to its previous strength.
[[Page 28841]]
Microsoft is the one company that has the ability to save our
economy, and since the settlement makes them work ever closer with
their competitors, competition in the IT industry will benefit, and
the economy will show gains.
The Bush Administration did not start the recession, but it is
in a position to STOP the recession. The settlement that was reached
is fair, and I support it.
Sincerely,
Maureen M. DeShazo
16121 High Bridge Road
Monroe, WA 98272-9478
MTC-00030205
United Wholesale Supply Inc.
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I support the terms of the settlement agreement the Department
of Justice and Microsoft were able to negotiate. I am in favor of
bringing this case to a conclusion.
Microsoft has appropriately addressed the concerns raised by the
plaintiffs in the case. They have agreed to take steps to safeguard
against future antitrust violations. Microsoft has agreed not to
enter into contracts that would require third parties to exclusively
promote or distribute Windows. They also agreed not to take
retaliatory actions against software developers who design software
that competes with Windows. Another important concession is
Microsoft's agreement to implement a uniform price list. Beyond the
concessions set forth in the settlement agreement, nothing further
should be required of Microsoft.
Your efforts to settle this case are appreciated.
Sincerely,
Gerald Robinson
President
25713 74th Ave.
South Kent, WA 98032
(253) 852-9595
Fax (253) 852-9449
UNITEWS044RP
MTC-00030206
Mike Franklin
76708 N Yakima River Drive
West Richland, WA 99353
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I support the Department of Justice and Microsoft's recent
proposal to settle. I think it is a satisfactory outcome for both
sides.
Microsoft has done its part by accepting restrictions on its
business practices, its competitive behavior, and its licensing
requirements, among other things. It is the government's turn to do
what it must to bring this dispute to an end.
I ask you to represent what "fairness" there may be
in government, by supporting this ??ottlement. The American
government and the Department of Justice have more important issues
to spend their time and money on.
Sincerely,
Mike Franklin
MTC-00030207
118 Third Street
Estill, South Carolina 29918
January 17, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
American ingenuity should not be punished. The government's suit
against Microsoft is nothing more than an attack on the very
creativity and hard work that have made this nation great. I feel
that Microsoft has had the wherewithal to become a successful
company and they should not be punished for pursuing the American
dream.
While I am glad that this suit has reached an end with the
settlement that was negotiated in early November, [ would rather see
the entire thing dropped. I understand that Microsoft has agreed to
a number of rather harsh terms because they understand that a quick
end to this case is vital to future American leadership in the
worldwide technology market. For example, Microsoft will agree not
to retaliate against computer companies that use, sell, or promote
non-Microsoft software,
Thank you for your efforts thus far in bringing forth a quick
end to this litigation. I hope that we can put this unsavory
business behind us and that Microsoft can get back to the business
that it is best at: innovation. Thank you.
Sincerely,
Lawton Ocain
cc: Senator Strom Thurmond
MTC-00030208
sage software
January 28, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
The greatest advantage to this settlement between Microsoft and
the Department of Justice is that it ends the court action. Aside
from that, the settlement is rather lopsided.
While I support the settlement, I also feel that some of the
terms set a dangerous precedent. Not only will this settlement force
Microsoft to release some of its protocols to its competitors, but
the settlement also forces Microsoft to allow software other than
its own to essentially become part of its operating system.
All of this can have two undesirable side effects: The first is
that the reliability and high quality standards that we have all
grown accustomed to when operating a computer with the Windows
platform may now be rendered unstable because of the addition of
someone else's software. Secondly, there will now be a possibility
for cloned versions of Windows to flood the market. The idea of
Rolex watches springs to mind. Microsoft will no doubt be blamed for
this too. Again, I reiterate my support for the settlement in
principle, but the specifics of some of these terms can prove
problematic down the road.
Sincerely,
Chad Ruff
President
Sage Software, inc.
3423 Piedmont Road
Suite 550
Atlanta, GA 30305
MTC-00030209
OFFICES OF THOMAS M. ROTH, III
1001 South Marshall Street, Box 14, Suite L6
Winston-Salem, North Carolina 27101
Telephone: 336-777-0114
Telefax: 336-777-8499 or
336-777-3601
TELEFAX MEMORANDUM
FROM: Tam Roth
TO: Ins. ?? Hesse
DATE:
FIRM: U.S. Pest ??Jostice
RE:
TELEFAXNO. 202--616--9937
TIME OF SENDING:
NO. OF PAGES
ORIGIN AL: Will not be sent Will follow by U.S. Mail Will follow by
overnight mail
MESSAGE:
OFFICES OF
THOMAS M. ROTH, III
ATTORNEY AND COUNSELOR
1001 SOUTH MARSHALL STREET, BOX 14
WINSTON-SALEM, NORTH CAROLINA 27101
TELE: (336) 777-0114
FAX: (336) 777-8499
E-MAIL: TRROTH @ PRODIGY.NET
January 28, 2002
Renata Hesse, Esq.
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
I am writing today in response to the Federal Register item
concerning the Microsoft settlement with the United States and nine
of our states" attorneys general. I note that North Carolina,
my home state, is among the states that have signed off on the
proposed settlement.
I have reviewed the proposed settlement of this long running
case and endorse the proposed settlement between these parties. I
would urge Judge Kollar-Kotelly to do the same. The proposed
settlement has positive points for all sides; and appears to make
many of Microsoft's anticompetitive practices impossible to
continue, while not destroying a firm which has done much to
revolutionize the way people all over the world live.
Certainly, Microsoft's agreement to an independent monitor is
quite a concession for a corporation in the high-tech areas. The
agreement also calls for Microsoft to guarantee "equity"
in a number of areas with third parties which will mean less profit
for the company m the future. I understand that Microsoft is willing
to agree to these provisions just to get this case over with. Since
this proposed settlement has the support of the Department of
Justice, and of nine states, I hope that Judge Kollar-Kotelly will
be willing to approve.
[[Page 28842]]
Very truly yours,
Thomas M. Roth III
MTC-00030210
Australian Union of Students
P.O. Box 123
Roma Street
BRISBANE QId. 4003
Telephone: (07)3321 3059
Email: info @ students.org.au
14 November 2001
Renata Hesse
Trial Attorney
325 7th Street, NW
Suite 500
Washington, DC 20530
USA
Dear Sir/Madam,
I refer to the antitrust case against Microsoft Corporation in
the United States District Court for the District of Columbia,
reference Civil Action No. 98-1232 (CKK). In accordance with
provisions of the Antitrust Procedures and Penalties Act, there is
attached to this letter a written submission concerning the proposed
Final Judgment which has been agreed to between the United States
Government and Microsoft Corporation. Our standing to make a
submission is explained in the submission.
Cordially,
Geoff Bird National President
SUBMISSION IN RESPONSE TO THE PROPOSED SETTLEMENT OF THE
ANTITRUST CASE AGAINST MICROSOFT CORPORATION
AUSTRALIAN UNION OF STUDENTS
NOVEMBER 2001
EXECUTIVE SUMMARY
1. The proposed settlement will not end litigation against
Microsoft, as it neglects to punish Microsoft for unlawful conduct
and compensate those affected.
2. If the proposed settlement goes ahead, it will deprive the
United States Government of influence over the settlement that
Microsoft will ultimately reach with the European Union.
3. Accordingly, our association, on behalf of our members who
are American citizens, wishes to propose an alternative settlement.
4. Microsoft should be required to publish the source code for
its operating systems.
5. Microsoft should be required, by way of a punishment, to set
up a venture capital corporation, and to transfer a proportion of
its assets to this corporation.
6. The assets which Microsoft should be required to transfer
should be equal to the stockholders" equity in Microsoft, less
the stockholders" equity that Microsoft would have if it had
complied with the law.
7. The venture capital company should be required to invest in
business start-ups in a country in proportion to the amount that
residents of the country have spent on Microsoft products.
8. Stockholders in Microsoft should be issued with stock in the
venture capital company in proportion to their holding in Microsoft.
9. The United States Government should be required to use its
best efforts to persuade foreign governments to enact legislation
excusing Microsoft for any illegal action committed prior to 2002.
10. If a government of a foreign country does not enact the
legislation, the venture capital corporation should not be required
to invest in the country.
SUBMISSION
The United States Government has brought an anti-trust action
against Microsoft Corporation. Following the election of President
Bush with the assistance of donations from Microsoft, the Justice
Department has reached a settlement with Microsoft. According to the
Antitrust Procedures and Penalties Act, the details of the
settlement have to be published in the "Federal
Register". Members of the public have sixty days to make
written submissions on the proposed settlement. This submission is
being made in accordance with the statute.
Our association, the Australian Union of Students, has standing
to make a submission on the following basis. We have a number of
United States citizens as members. Under the constitution of our
association, we have the power to make representations to
governments on behalf of our members, without necessarily consulting
the members beforehand. Accordingly, this submission should be
treated as though it was made by American citizens. We could, if
necessary, provide to the United States Government, in confidence,
the names and addresses of the members concerned.
We are against the proposed settlement. It is not that we are
unsympathetic to Microsoft. The management of Microsoft are very
much respected in Australia, and are held out by our association as
examples who young people in Australia should copy. Nevertheless,
the proposed settlement will be of limited usefulness to Microsoft,
and will not settle existing litigation by American states, and
proposed litigation by European Union countries. This litigation
will go ahead, and there will in time be settlements or judgments,
which may not be beneficial to Microsoft or the United States.
From the point of view of the United States Government,
Microsoft has been held to have broken the law, and to have gained
substantial financial benefits as a result. The Justice Department
is of the view that it would be undesirable to break up Microsoft
into smaller corporations, or to require that Microsoft pay fines.
We agree with this. At the same time, Microsoft should have to make
up for its illegal actions in some way, so as to discourage other
corporations from breaking the law.
The advantage of an out-of-court settlement is that Microsoft
can be made to do things that it otherwise cannot be made to do. A
court is limited in what it can order. But an out-of-court
settlement can contain anything within reason. As an example, an
out-of-court settlement could contain a requirement that Microsoft
executives must wash their hair each day. An out-of-court settlement
should be a "wish list" of things that Microsoft should
do. The Justice Department has not been imaginative enough in
formulating its "wish list".
The Justice Department's "wish list" must meet two
requirements. First, it must end the illegal conduct by Microsoft.
Secondly, it must compensate the people adversely affected by
Microsoft's actions. The Justice Department should be asking the
question, "What can Microsoft do that would be most beneficial
to users of its operating systems?" This should not
necessarily be limited to things that Microsoft can do in its
capacity as a supplier of operating systems, but should include
anything that Microsoft can do.
For example, an out-of-court settlement could include Microsoft
making donations to charities. No distinction should be made between
a donation made by Microsoft and a donation made by its
stockholders. Past charitable donations certainly go some way to
making up for Microsoft's actions, and should be taken into account
in deciding whether to accept an out-of-court settlement. To end the
illegal conduct by Microsoft, we propose that Microsoft should
publish the source code written by its programmers, that is used to
compile its operating systems, from DOS up to and including Windows
XP. This should include comments by programmers put in to explain
what the code does. But it should not include code for functions
that are for national security purposes.
The publication of the source code would not make piracy of
Microsoft operating systems any easier. The software can already be
copied illegally. Anyone compiling the operating system from the
source code, and using the software without paying a royalty could
still be prosecuted. The advantage of publishing the source code
would be that software developers could produce operating systems
that are functionally equivalent to Microsoft operating systems. If
Microsoft refused to allow its distributors to bundle software with
its Windows operating systems, Microsoft would run the risk that a
distributor would use an equivalent operating system from some other
software developer.
Microsoft operating systems have a similar status to human DNA.
The information is essential for everyday life. It is surely
unsatisfactory that information that is essential for everyday live
should be controlled by Microsoft. Certainly Microsoft developed the
information, at great expense, so is entitled to a royalty. But they
should not be able to prevent further development and improvement of
the information.
In formulating its out-of-court settlement, the Justice
Department appears to have thought that Microsoft can best
compensate consumers for its illegal actions by continuing to
develop operating systems. We disagree. We think Microsoft's talent
can be used to greater effect in the field of Venture Capital. Of
course, if Microsoft was complying with the law, it would be up to
them how they use their resources. But since they have broken the
law, it is up to the government. The terms of an out-of-court
settlement are up to the government.
We propose that Microsoft should be required by a settlement to
set up a venture capital corporation. This corporation would invest
in and provide advice to business start-ups. Microsoft would be
required to transfer a large part of its assets to this corporation.
Its stockholders would be issued with stock in the new corporation,
in proportion to their holding in Microsoft. The corporation would
be required by its charter to invest an amount in each country that
is
[[Page 28843]]
proportional to the amount that has been spent in that country on
Microsoft products. This would be advantageous to the European
Union, and so they would be likely to agree to such a settlement.
To make sure they do, the United States Government should lobby
the European Union and other countries on Microsoft's behalf for
legislation to excuse Microsoft from any illegal action committed
prior to 2002. It should be included in the out-of-court settlement
that the government must use its best efforts to secure such
legislation. Such legislation should be a pre-requisite for the
venture capital corporation being required to spend any money in a
country.
The amount that Microsoft should have to invest in the venture
capital corporation would be set so as to compel Microsoft to
downsize to the size they would have reached if they had complied
with the anti-trust statute. In other words, their
stockholders" equity should be reduced to a level that it
would be if they had complied with the statute. Microsoft will as a
result have to scale down the extent of its activities and lay off
staff. These people will be able to set up businesses in areas of
Information Technology that Microsoft was previously involved in.
Hence there will be greater competition.
We are suggesting that the Justice Department try to compel
Microsoft to transfer its capital into the Venture Capital Industry.
This is based on a number of considerations. Microsoft has expertise
in taking an industry which is disorganised, and organising it. The
Information Technology Industry was disorganised in 1975, but after
Microsoft released its Windows 98 operating system, it became
organised on a comparable basis with other industries. In our view,
it is a waste of resources for Microsoft to continue being
exclusively involved in this area. Cars made in 2001 are not much
better than cars made in 1971, and Windows XP is not much better
than Windows 98.
There are a number of industries which are disorganised compared
to other industries. The Venture Capital Industry is disorganised in
most countries, and is organised only on the West Coast of the
United States. Other industries that are particularly disorganised
are the Entertainment Industry, the Property Development Industry,
and the Genetic Engineering Industry. By getting involved in Venture
Capital, Microsoft can bring its organisational ability to bear on
helping set up businesses in Information Technology, Entertainment,
Property Development, and Genetic Engineering. This will be of
incalculable benefit to consumers. Microsoft already acts as a
venture capital corporation, so it has staff who can be transferred
to the proposed corporation.
The Justice Department's proposed solution certainly prevents
future breaches of the antitrust statute by Microsoft. But it is not
as imaginative and beneficial as our proposed solution. Of course,
the staff of the Department of Justice work under great pressure, in
circumstances that are not conducive to imagination. That is why the
United States Congress made provision for the Department of Justice
to consider public submissions, in order to arrive at a more
imaginative solution. We hope our submission is of some assistance.
Our telephone number including country code is +61 7 3321 3059,
and our facsimile number is +61 7 3311 2090, while our e-mail
address is info @ students.org.au, and our postal
address is Australian Union of Students, P.O. Box 123, Roma Street,
Brisbane 4003, Queensland, Australia.
MTC-00030213
Manning, Fulton & Skinner, P.A.
?? At Law
RALEIGH, NORTH CAROLINA
GLENWOOD PLAZA
3605 GLENWOOD AVENUE
27612
P.O. Box 20389
?? CODE 27619-0389
January 16, 2002
HOWARD B. MANNING
?? L. PULTON
W?? P. ??. ??
?? D. ??
W. ?? ??
M. M?? H?? J??
MICH?? T. M??
SAXUEL T. OLIVER. JR.
DAVIL D. DAUL
C?? B. NICHOLE, J??
B?? D. Many
John C. DO??
W?? C. S??. Jr.
D?? L. H??
STBPHEN T. BYRD
MICHARL S. HARR??LL
M. ??ADLEY EA??
A??ON R. CA??
David T. ??
C?? H. C??
K?? O. L??
Tanya D. Van ROHKEL
T?? C. K??
B. NICOL?? TAYLO??
J?? A. W??
SANDRA?? M. CLA??
H?? W. Taylor
NIICOL?? S. LAYLO??
L?? ?? HODO??
A ?? C?? C??
?? H. H??
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Fax 202-616-9937
microsoft.atr @ usdoe.gov
Dear Ms. Hesse: As an attorney, I have long been concerned by
the antitrust litigation pursued against Microsoft by the federal
government and several states at the instigation of Microsoft's
competitors. I was heartened by the decision of North Carolina
Attorney General Roy Cooper to agree to the settlement that has been
negotiated, and I write in support of the settlement agreement that
is before the judge now.
Microsoft's release of its XP program recently again
demonstrates why the company has been successful: it offers a
superior product at an affordable price that enables even the most
computer-challenged among us to take advantage of the information
technology revolution. Microsoft should be praised, not punished,
for this aggressive innovation and marketing. I strongly believe it
is time to bring an end to this lawsuit and get on with the business
of meeting the economic and safety challenges that face America
today.
Thank you for the opportunity to comment.
M. Bradley Harrold
MTC-00030214
Julie Edge
6010 Melbourne Drive
Raleigh, NC 27603
January 16, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Fax 202-616-9937
microsoft.atr @ usdoc.gov
Dear Ms. Hesse:
I am by no means an expert on federal antitrust law. But I am a
small business owner, and I am qualified to recognize when a
business is spending too much time on the wrong issues. Right now,
Microsoft, its competitors and the entire information technology
industry are spending far too much time fighting over the law and
not nearly enough time doing what they should do: serve their
customers.
If, as I understand it, there is a reasonable settlement to this
matter before the court, it should be approved and put into effect
immediately. As I further understand it, the settlement was reached
through negotiations supervised by a court-appointed mediator and
accepted by the U.S. Attorney General and a number of state attorney
generals.
That is good enough for me. Let's end the lawsuits and get back
to the business of rebuilding our nation's economy.
Thank you for allowing me to express my opinion.
Sincerely,
Julie Edge
MTC-00030215
State of New ??
HOUSE OF ??
CONCORD
January 8, 2002
Renate Hesse
Trial Attorney
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Subject: Microsoft Settlement
Dear Attorney ??:
Thank you for your public service and your work on behalf of the
?? government. I am writing you today to offer my support of the
current settlement proposed in the Microsoft case. I understand you
are now accepting public comment and wish to submit my support. As
our nation's economy continues in a downturn, many are out of work
and ?? are doing more with less. Here in New Hampshire, I am working
with my colleagues in the state ?? to find new and ?? ways to wisely
spend the money we have and avoid needless spending in areas that do
not have an impact on the public good.
I am concerned that if we continue to pursue the government's
case against
[[Page 28844]]
Microsoft, we are further impeding in the area of technology and
making it less and less attractive for investment in this industry
both by ?? and in the financial ??. We cannot afford to have the
happen. We need to encourage investment in order to spur an upturn
in the economy.
By approving the settlement in this case, you will be benefiting
just about everyone except the small group of Microsoft's
competitors who have been pushing this case from the beginning. But,
it is not the government's role to do their ??, the need to compete
in the marketplace by offering comparable products.
I hope you will accept the settlement and and the government's
involvement in the operations of one of our nation's most exciting
companies. Thank you for your consideration.
Sincerely,
John T. ??
Member of the New Hampenire House of Representatives
?? County, District 7
TDD Access: ?? NH 1-800-735-2984
MTC-00030216
JEANNEMARIE DEVOLITES
POST OFFICE BOX 838
VIENNA, VIRGINIA ??
THIRTY-FIFTH DISTRICT
COMMONWEALTH OF VIRGINIA
HOUSE OF DELEGATES
RICNMOND
COMMITTEE ASSIGNMENTS, PRIVILEGES AND ELECTIONS
HEALTH, WELFARE AND INSTITUTIONS SCIENCE AND TECHNOLOGY CLAIMS
January 23, 2002
Renata Hesse
Trial Attorney
Antitrust Division
U.S. Department of Justice
601 D. Street, NW # 1200
Washington, DC 20530
Dear Ms. Hesse:
As the Delegate representing the 35th House District in Northern
Virginia, I am writing to encourage you to approve the settlement
agreement in U.S. vs. Microsoft.
The United States has become a global technology leader because
we have always encouraged our citizens to develop their skills, both
intellectually and creatively, in order to invent and develop new
ideas. Due to their courage, persistence, and work ethic many
choose, through entrepreneurship, to further those ideas by
establishing businesses. Every once in a while, one of these
entrepreneurs will work hard enough to meet with extraordinary
success, at which time, it seems, those that are less successful
will attempt to "shoot them down."
The message this antitrust litigation sends to the entrepreneur
is that if he works hard to create a successful business, he will be
penalized. This works against the very spirit that has made our
nation great!
Thank you for taking the time to read this letter. Once again, I
respectfully request that the Department accept the settlement
agreement in the U.S. v. Microsoft case,
Sincerely,
Jeannemarie Devolites
MTC-00030217
1/25/02
68 Hillcrest St.
Charleroi, PA 15022
Dear Mr. Ashcroft:
I wanted to write to you giving our family's opinion about the
suit brought by the Dept of Justice and Micro- soft. I fully support
the settlement that was reached--not because it was warranted
or that Microsoft deserved to be punished but because it harms our
economy and stifles further creativity by business who want to
compete and innovate.
Government interference was not the right thing to do and
probably was brought about as a result of lobbying on the part of
Microsofts competitors. Just as in the case of the airlines the
government ought to be providing other services to its citizens
instead of pressure and regulations on the private sector of
legitimate business dealings. I am happy a settlement has been
reached and hope that the future direction of the Justice Department
will not be to hamper and oppress Microsoft and other capitalistic
endeavors.
Sincerely,
Evelyn Parent
cc Senator Rick Santourini
MTC-00030219
January. 18, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Fax 202-616-0037
microsoft.atr @ usdoc.gov
Dear Ms. Hesse:
As an attorney, I can appreciate the complexity that the court
faces as it reviews the proposed settlement of the Microsoft federal
antitrust lawsuit. But I am impressed by the fact that the consent
decree under consideration was developed in negotiations overseen by
a court-appointed mediator, that it is supported by the U.S.
Attorney General and that it has been agreed to by North Carolina's
Attorney General.
Further, it is telling that the under the proposal Microsoft
would agree to accept significant changes in its business practices,
as well as the continuing supervision of a technical committee
empowered to review the company's compliance with the agreement.
This certainly seems to me to be adequate protection for
Microsoft's competitors, without at the same time crippling the
company's ability to continue providing excellent products for use
in schools, businesses and homes.
I hope the agreement will be approved.
Sincerely,
Sarah Capel
MTC-00030220
Telefax Service
Fax (804) 786-6310
General Assembly Building
January 25, 2002
House of Delegates
To: Ms. Renata Hesse
From: Del. Michele B. McQuigg
Fax No.: Long Distance 202-616-9937
Tel. No.:
City:
State:
This transmission contains 2 pages, which includes this cover
sheet. have any problems with this transmission, please contact
(804) 698-1558.
Comments:
If you have any questions, call 804-698-1151.
MICHELE B. McQUIGG
2241-R TACKETTS MILL DRIVE
WOODBRIDGE, VIRGINIA 22102
FIFTY-FIRST DISTRICT
COMMONWEALTH OF VIRGINIA
HOUSE OF DELEGATES
RICHMOND
January 20, 2002
Ms. Reneta Hesse
Trial Attorney
Antitrust Division
U.S. Department of Justice
601 D Street, NW Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
I am writing in support of the settlement of the Microsoft
antitrust case. In a nation where we pride ourselves on free trade
and development of services and ideas, Microsoft has proven itself.
The agreement contains significant rules and regulations on how
Microsoft develops and licenses its software, but it also allows
Microsoft to keep innovating on behalf of consumers. I hope you will
resist the efforts of Microsoft's competitors, who try to continue
their efforts to dissolve this company.
We have many computer and Internet companies throughout
Virginia, with a large concentration in Northern Virginia, the area
I represent. The economy depends upon technology and Internet
success--including Microsoft. It is extremely important to
allow this facet of trade to grow and produce without restriction.
It is equally as important to allow it to grow free from fear of
developing a product that is accepted universally by computer users.
I urge you to accept the settlement as just and fair. If you
have any questions, please do not hesitate to contact me.
Sincerely,
DISTRICT: (703) 491-9870
RICHMOND: (804) 898-1051
E-MAIL.:
MICHELE @ MCOUIGG.COM ?? HTTP://
WWW.HCOUIGG.COM
MTC-00030221
January 20, 2002
Ms. A. Sheard
6503 Rock Crystal Drive
Clifton, VA 20124
Ms. Renata Hesse
Department of Justice
601 D Street, NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
Now that the new year has begun, it is my hope that the other
states involved in the suit against Microsoft will agree That it's
time to move forward and progress with the proposed settlement.
American consumers need some sort of hope that the economy will
improve in the months ahead and the high
[[Page 28845]]
technology sector could provide just the kick to get the economy
moving in the upward direction.
It's time for healthy competition and re-investment into our
economy made by consumers. The end needs to arrive as it concerns
this case and we all need to do what we can for our
country--work to improve the quality of our lives and give us
back some sort of stability.
Thank you,
MTC-00030222
January 20, 2002
Mr. Ken Richardson
708 Duff Road NE
Leesburg, VA 20176
Ms. Renata Hesse
Department of Justice
601 D Street, NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
As jobless rates and economic indicators continue to tell
consumers that times are getting worse, I think Microsoft's
settlement with the federal government could provide a beginning
bright light. By settling the case, we could once again see the
competitive prosperity of the 90's foster the necessary kick the
economy needs to move in a positive direction.
The high tech industry has been a driving force for our nation
in recent years and if Microsoft's settlement revitalizes
competition, than we should welcome this opportunity. This long
drawn out case should be resolved once and for all, and the focus
should be on lowering the jobless rate, increasing consumer
confidence and strengthening our economy.
Sincerely,
MTC-00030223
202-307-1454
Ms. Renata B. Hesse
Dept. of Justice
Microsoft
Please accept the Microsoft settlement. Enough of this alrady!!
Get it overwith.
Shirley S. Henry, AHC
Seattle, WA
MTC-00030224
January 20, 2002
Ms. Patty Richardson
708 Duff Road NE
Leesburg, VA 20176
Ms, Renata Hesse
Department of Justice
601 D Street, AT. W., Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
Now that the federal government has finally settled its long
antitrust case against Microsoft, I hope the states still involved
with the suit will do the same. It is time for consumers to come
together and move the economy and our country in a positive
direction--a forward and economically strong direction.
The settlement's provisions protect Microsoft's ability to
continue to be innovative and, this hopefully, will revitalize
competition and the technology industry for the betterment of us
all. Consumers and investors will reap the benefits of this
settlement and this should help to get the engines running toward a
healthy and prosperous economic stance. Thank you for your
consideration.
Sincerely,
MTC-00030225
January 25, 2002
United States Department of Justice
Attn: Ms. Renata B. Hesse
Antitrust Division
950 Pennsylvanie Avenue, NW
Washington, DC 20530-0001
Dear Ms. Hesse:
I am writing to you in: support of the recent Department of
Justice settlement with the Microsoft Corporation.
The country is at war, the economy is sour and the business
community is struggling. Yet, the U.S. Department of Justice is
spending millions of dollars in time and resources on the Microsoft
settlement.
I believe it has been a waste of taxpayers dollars, my
understanding is that it has cost us over $30 million. This has been
a competitor driven lawsuit and it has hampered high tech
innovation. If Microsoft's competitors would spend time and money on
their own research and development, instead of this lawsuit, all
consumers would benefit.
Enough is enough, let's settle this lawsuit and move forward.
Thank you for your attention to this matter.
Sincerely,
Jean Ross
5705 Ambrosia Terrace
McFarland, WI 53558
Cc: Michelle Kussow-Wisconsin Grocers Association
MTC-00030226
January 25, 2002
Ms. Rcnata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washinton, DC 20530
Dear Ms. Hesse,
In respect to the U.S. vs. Microsoft anti-trust action and why I
support the courts decision. I believe our country, government,
judicial system and constitution to be second to no other in the
world.
Henceforth if the most advanced and just court system in the
world has made a settlement of this case. Being a believer and
supporter of our system I would have to agree with this decision. As
for I do not believe that the general public has more knowledge of
the facts,laws and complexity of this case than the decision
rendered by the courts.
I do believe most of the nonsupport of this settlement to be no
more than sensational rhetoric influenced by microsoft's
competitors.
I trust the judge will do what's best for the consumers and not
the profiteering of the competitors.
Thankyou.
Sincerely
John J. J. Rybinski
Small business owner for over one score
MTC-00030227
From: "CHRISTINE CAWLEY"
To: "Christine Cawley"
(S20) 818-0130
<>Fox (520) 818-0129
<>E-Mail ExKodaker @ AOL.COM<>
Bate: January 25, 2002
To: U.S. Attorney General John Ashcroft
Fax #: 1 202 307-1454 or 1 202 616-9937
Total # of pages including cover sheet: 2
From: Raymond & Barbara Merritt
Subject: Microsoft settlement.
Raymond & Barbara Merritt
37082, S. Rock Crest Drive
SaddleBrooke Resort
Tucson, AZ 85739-1176
January 16, 2002
Attorney General John Ashcroft
U.S. Justice Department
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
This is a short note with tall intention. After almost four
years of litigation, negotiation, controversy and self-serving
political posturing, would you and the Administration please see
you're way clear to settling the Microsoft case?
This case is ripe for settlement. The main parties have reached
an agreement. The court supports it. The settlement addresses the
salient complaints and concerns of ALL the parties. There is no
justifiable reason to prolong this process.
The proposed settlement will essentially require Microsoft to
refrain from any future trust-like activities. The company will be
required to reconfigure its Windows systems so as to readily
accommodate other company's software. It will have retool its
product licensing practices to the benefit of the major computer
manufacturers. It will in a nutshell have to open itself up to
competition. These concessions and others more than justify the
government's blessing and support of the settlement.
For the sake of our economy and the future of the IT industry a
settlement is appropriate and needed now.
Sincerely,
Raymond Merritt
Barbara Merritt
MTC-00030433
GOD FIRST MENTALITY INCORPORATED
P.O. BOX 444
ALBION, MI 49224
Phone (517) 629-5227
Fax (517) 629-5227*51
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052-6399
ATTN: William Neukom
On December 2, 1998, I faxed you a letter. It refers to the
micro-processing of privacy invasion. This involves a tort system.
It is a wrongful act, not including a breach of contract or trust,
that results in injury to another person, property, reputation, or
the like, and for which the injured party in entitled to
compensation. The dishonest computer hackers need to be prosecuted.
Privacy invasion is a violation of the U.S. constitution. I believe
its" in Microsofts" best interest to compensate for
damages suffered. Microsoft can participate in acknowledging the
relentless pursuit of injury to our central nervous systems. I will
be informing the Inspector General at the U.S. Justice Department.
I have been online for nearly 1900 consecutive days, around the
clock.
Environmental Defense Fund in Washington DC has offered to
support me.
My case is about how word processors are converting electrical
pulses into sound that is compressed and decompressed into digital
code. It refers to software that has not been processed into voice
recognition. Microsoft has not acknowledged this either. These
interfaces have me a centralized PC within a Public Switched
Telephone Network. I need these signals or pulses converted into
modulation transmitted above the threshold. This will help me regain
my privacy. Considering all the devastation, I will settle for a 1
billion dollar settlement. I will consider any, out court, counter
offer. Please, have someone contact me by mail, phone call or fax at
your earliest convenience.
YOURS IN CHRIST
gfm inc.
MTC-00030441
Thomas D. Hogen
30074 Village Park Drive
Chapel Hill, NC 27517
(919) 967-5574
FAX (919) 967-1668
Email Thogen1535 @ aol.com
January 25, 2002
Attorney General John Ashcroft US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I want to use this opportunity to convey my thoughts on the
settlement between Microsoft and the Department of Justice. I
believe the settlement is a good development for the economy and
will end this unwarranted litigation.
The settlement is strong and requires many concessions from
Microsoft. And these concessions are backed by very strong
enforcement measures. These measures include the creation of a
Technical Committee to monitor Microsoft's actions. Also, any third
party that believes Microsoft is not meeting their obligations can
file a complaint with the Technical Committee, the Department of
Justice, or any of the State plaintiffs that are party to the
agreement.
Both sides in this dispute will benefit from this settlement.
Microsoft can focus their attention on developing new technology
that will make businesses more efficient. And the government will be
able to focus on more urgent matters, such as stimulating the
struggling economy and prosecuting our country's enemies.
Microsoft has been helpful to me in their supply of quality
products.
Sincerely,
Thomas Hogen
MTC-00030442
DEPT. OF JUSTiCE
MS. RENATA B HESSE
STOP SPENdinG OUR TAX MONEY ANd ENd
THE MiCROSOFT FiGHT.
GET ON WiTH MATTERS Which CONGERN
SEPT ??!
F.E. WEHNER
8510 WiMBoRNE WAY
LooiSViLLE KY 40222
MTC-00030443
FAX
Date: Friday, January 25, 2002
Time: 7:55:00 PM
To: U.S.Attorney General John Ashcroft
From: Ronald J. Markham
Fax: 307-1454
Fax: 860,349,3816
[[Page 28893]]
Voice: Voice: 860,349,3816
Comments:
The Honorable Attorney General John Ashcroft
27 Dunn Hill Road
Durham, CT 06422
Washington DC
Jan. 25, 2002
Dear Attorney General,
re: Microsoft Settlement
Please count me in the opposed column to the pending suit
against the Microsoft Corporation. Night after night I see on
television or read in the newspapers adds for cars and trucks,
appliances, and other products hawking giveaways if you will just
buy this or that product. I see no difference in the marketing of
many other corporations than the marketing of Microsoft. Is not the
idea of building a better mousetrap or marketing a better mousetrap
the "American Way"? I am an ordinary citizen with no axe
to grind, but I find it very distasteful to waste tax dollars on
such a silly exercise. Microsoft has improved our way of life in so
many ways by pursuing this legal action leaves me saddened and
frustrated. Please Attorney General Ashcroft, stop this waste of
manpower arid tax dollars and redirect the governments legal efforts
to meaningful pursuits.
Very truly yours,
Ronald J. Markham
MTC-00030444
Brent Smith
12025 Gold Pointe Lane
Gold River, CA 95670
January 21, 2002
Attorney General John Ashcroft
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Sir:
Given this open comment period, I am writing to give you my
thoughts on the Microsoft settlement. I have been following this
case for some time and am familiar with the issues involved. This
compromise between the DOJ and Microsoft is long past due and
accepting it now is a necessary action to help revitalize our
computer industry.
I am self-employed and use Microsoft software to help run my
business. Their company is responsible for building up our existing
computer industry. They've provided consumers with superior products
but now are being punished for that.
In a move toward the future, Microsoft is limiting its own
competitiveness so that the lawsuit might end. They are sharing an
unprecedented amount of their intellectual property with their
competitors arid have agreed to tone down their often-aggressive
marketing practices. This settlement is more than fair to
Microsoft's rivals and is clearly in the public interest. Please
make the necessary decision to end this lawsuit as so on as
possible. Our struggling economy can afford no less.
Sincerely,
Brent Smith
MTC-00030445
m & ?? Construction, Inc.
DRYWALL CONTRACTOR
320 E. WASHINGTON STREET
YORKVILLE, ILLINOIS 60560
(630) 553-0508
January 25, 2002
Renata B. Hesse
US Dept of Justice
Fax # 1-202-307-1454
To whom it may concern:
I am writing to express my views on the Microsoft antitrust
case. If you are pursuing this case in the consumers best interest,
please stop! The wonderful economist, Ludwig von Mises, wrote that
the greatest democracy ever invented is the free market system.
Everyone is constantly voting, with every dollar they spend, for
what they want and what they, can do without Consumers have full
power and authority to deal with supposed evil monopolists like Bill
Gates.
They do this by either freely spending their dollars on his
products, or deciding to do without (even boycott) Microsoft
products, The most appropriate use of the US Dept of Justices"
time would be to fight terrorism and leave the American consumers to
deal with legitimate businessmen in the most effective way possible;
the free market system.
Sincerely,
Mike McCurdy (President)
MTC-00030447
COVER SHEET
TO:
FAX NO:
FROM: B. Kehayes
DATE:
FAX NO: 252-482-8521
COMMENTS:
NO. OF SHEETS INCLUDING COVER:
P.O. Box 733
Edenton, NC 27932
January 24, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, N. W
Washington, D C 20530
Dear Mr. Ashcroft:
I writing to urge you to support the recent settlement created
between the government and Microsoft. This prolonged period of court
battles has sapped energy that could be better put into moving ahead
in our economy.
This agreement allows manufacturers to compete on a more even
footing while not penalizing Microsoft too greatly for their part in
the vast technological revolution that has made life better for all
Americans.
America has been a country of innovation and we need companies
that can afford to and will spend money and time to bring new
products to market. Microsoft has done this in the past and is eager
to continue doing so if they are not unduly constrained. Our economy
is sadly strained; our young people are out of work. Please do what
you can to settle this issue and let us all get back to pulling
ahead.
Thank you.
Sincerely,
Barbara Kehayes
MTC-00030448
Department of Justice
Subject: Microsoft Settlement
I believe it is time for the DOJ to terminate the proceedings
against Microsoft. There never should have been a lawsuit. There has
never been a shred of evidence that Microsoft has harmed the
consumers. If anything Microsoft has been a tremendous force for
uniting and standardizing the PC industry. No other company has
stepped forward to do this. Microsoft has virtually no competition
because no one else had the vision, foresight and nerve to invest
and drive to develop an operating system that would make the PC the
vital, universal tool that it is today. The companies that cannot
compete have stooped to lawsuits through the government as the only
way they can damage an industry leader. It only looks like sour
grapes to me.
The US government should be giving Microsoft at-a-boys for being
the driving force behind the most useful tool of the present
generation and maybe of the 20th century. It is past time to stop
harassing Microsoft. so they can get back to being the world leader
in developing easy to use operating systems and other software which
will keep the US in the forefront of this industry.
Sincerely,
Bob Maupin
PO Box 1030
Frankston, TX 75763
MTC-00030449
1103 East 1500 Road
Lawrence, KS 66046
January 23, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
This is to give my approval to the agreement between the
Department of Justice and Microsoft. I think the whole lawsuit has
ruined the country. Microsoft was one of the major engines of our
economy, producing not only a quality product, but providing
thousands of jobs. This lawsuit was more the result of sour grapes
on the part of Microsoft's rivals than any unethical business
practices.
Microsoft has more than tried to meet the demands of the
Department of Justice. Microsoft has agreed to help companies better
achieve a greater degree of reliability with regard to their
networking software; Microsoft has agreed to grant computer makers
broad new rights to configure Windows to promote non-Microsoft
software programs that compete with programs included within
Windows.
This is more than fair. Give your support to Microsoft.
Sincerely,
Nancy Hardman
MTC-00030451
FAX
ATTN. AG John Ashcroft
Fax Number 1-202-307-1454
Phone Number
FROM Keith D. Wheeler
Fax Number 480-759-6841
Phone Number 480-759-8823
SUBJECT
Number of Pages 2
Date 1/25/02
MESSAGE
KEITH D. WHEELER
[[Page 28894]]
2549 E, Mountain Sky Ave
Phoenix, AZ 85048
Fax 480-759-6841
Home Phone 480-759-8823
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft: ,
I am writing to say that the lawsuit against Microsoft has gone
on now for entirely too long. I am a proponet of a free market
economy and this lawsuit seems to do everything to undermine the
underlying reason to be innovative. How can our government go after
a company that has created jobs, generated wealth, and made
technolgical breakthroughs? The case was flawed from the beginning.
The terms of the settlement show this in that they do little to
protect consumer rights. The settlement forces Microsoft to disclose
interfaces internal to the Windows operating system products and
also prohibits them from entering into agreements that obligate
third parties from exclusively distributing Microsoft products.
These concessions reflect the intense lobbying efforts of
competitors.
I believe it is in the publics best interests to have this case
sealed. Our economy cannot afford further litigation and that is why
I am appalled at the nine states holding out. Please implement the
settlement as soon as possible and suppress any state opposition.
Thank you.
Sincerely,
Keith D. Wheeler
cc: Representative Jeff Flake
MTC-00030452
18 Janock Road
Milford, MA 01757
January 19, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
As a concerned citizen, I write you to discuss the recent
developments of the Microsoft settlement. After three years of
negotiations, it is time to support this agreement and get our
technology industry back to business. I urge you to help support
this agreement and help to assure that no more actions be taken
against it.
Microsoft has agreed to make many alterations including changes
in licensing and marketing. Along with this, Microsoft has agreed to
not enter into any agreements obligating any third party to
distribute or promote any Windows technology exclusively. Also, all
of these concessions will be monitored to make sure that Microsoft
is following procedure. The many concessions that Microsoft has made
are bold statements toward a unified IT sector. Microsoft is
obviously working hard to let our technology industry work together.
By doing this, we can secure our place in this highly competitive
global market.
Let's work together to support our technology industry and get
everyone back to business. I thank you for your support.
Sincerely,
Mary Bruno
MTC-00030453
Fax Transmission
From: Steven Waldman
44 Stridesham Ct
Baltimore MD 21209
tel (410) 336-1408
swaldman @ mchange.com
To: Renata B. Hesse
Antitrust Division
US Department of Justice
fax (202) 307-1454 or (202) 616-9937
Re: Microsoft Settlement
Length: 8 Pages Including This Page
Notes:
The attached Tunney Act comments have been submitted by fax (26-
January-2002), as an e-mailed PDF document (26-January-2002), and by
a commercial overnight carrier (delivery a.m., 28-January-2002). I
apologize for the multiple modes of submission, but it is important
that these comments be verifiably received by the morning of January
28. I would be very grateful if the Department could provide an
acknowledgement of on-deadline receipt of these comments, perhaps by
e-mail. Many thanks for your attention and assistance.
Steven Waldman
44 Stridesham Ct
Baltimore, MD 21209
(410) 336-1408
swaldman @ mchange.com
January 26, 2002
US Department of Justice
Antitrust Division
601 D Street NW
Suite 1200
Washington DC 20530
Attn: Renata Hesse
Re: Comments regarding Proposed Final Judgement United States v.
Microsoft Corporation Civil Action No. 98-1232
Thank you for the opportunity to comment upon the US v.
Microsoft Proposed Final Judgement, published in the Federal
Register on November 28, 2001.
The Proposed Final Judgement as written is not in the public
interest. I urge the Department to pursue remedies substantially
different from those proposed, whether via further negotiations with
Microsoft, or through adversarial proceedings. If the settlement is
presented to the District Court without substantial modification, I
would urge Judge Kollar-Kotelly make a determination under the
Tunney Act that the Proposed Final Judgement would not serve the
public interest.
The Proposed Final Judgement Would Do Positive Harm
It may seem odd to suggest that an antitrust remedy could be
positively harmful. After all, regardless of the remedy, a convicted
monopolist cannot leave an antitrust proceeding with more rights
than it had when it arrived, and usually leaves with fewer. However,
a poor remedy can indeed leave the public in a situation worse than
the status quo ante. The current Proposed Final Judgement does so,
in two ways. First, the PFJ describes, permits, and envisions
specific future conduct on the part of Microsoft that would itself
be anticompetitive. By providing implicit government endorsement for
this conduct, the PFJ would make it difficult for the Department,
the States, or private third parties to bring proceedings against
Microsoft to curb it at a later date. Second, the PFJ contains
enforcement provisions whose primary practical effect would be to
delay and reduce the likelihood of further action should the company
continue to behave unlawfully.
In other words, while the Proposed Final Judgement does place
Microsoft under some new constraints, it places the DOJ and other
potential litigants under even greater constraint. The net effect
would be a diminishment rather than an increase in deterrence of
Microsoft's anticompetitive behavior.
PEJ Explicitly Permits Continued Anticompetitive Practices
The purpose of the Proposed Final Judgement is to remedy
Microsoft's unlawful conduct, specifically its unlawful maintenance
of a monopoly in Intel-compatible PC operating systems. The
reasoning behind the Court of Appeals upholding of the monopoly
maintenance claim centered on the idea that there is an
"applications barrier to entry" to operating systems
markets, but that this barrier to entry could plausibly be chipped
away at by a class of applications referred to as
"middleware". The Court held that Microsoft engaged in
various practices to "protect[] Microsoft's monopoly from the
competition that middleware might otherwise present", in
violation of Section 2 of the Sherman Act. It is these practices
that must be remedied. In particular, the Court held that by virtue
of restrictive contracts with computer manufacturers
("OEMs"), internet providers ("IAPs"),
software companies ("ISVs") and by other means,
Microsoft impeded the widespread distribution of middleware that
might have threatened its monopoly.
Section III.C.3 of the Proposed Final Judgement forces Microsoft
to allow OEMs to automatically launch non-Microsoft middleware at
the end of a PCs boot sequence, but only "if a Microsoft
Middleware Product that provides similar functionality would
otherwise be launched automatically at that time". By this
caveat, the PFJ endorses a restriction in an OEM licensing agreement
that would otherwise constitute a violation of Section 2 of the
Sherman Act under the Court of Appeals" reasoning. The caveat
is anticompetitive on two counts. First, it permits Microsoft to
"choose its battles": Microsoft need only face
challenges from automatically launched middleware where the company
feels its own offerings have an advantage. Should a competitor
create an innovative middleware product that would threaten
Microsoft's applications barrier to entry, Microsoft can prevent its
distribution as a default running service indefinitely, by simply
not fielding an offering of its own or by quietly integrating but
not trademarking its offering (see the definition of a
"Microsoft Middleware Product", PFJ, Section
Vl.K.2.b.iii).
Secondly, the caveat necessarily permits competing middleware
only if OEMs include Microsoft's offering as well, since by
definition (again, PFJ, Section VI.K.2) a Microsoft Middleware
Product is a part of a
[[Page 28895]]
Windows Operating System Product. The Appeals Court noted several
reasons why OEMs are reluctant to include two products of the
similar functionality in a default installation, including customer
confusion; increased support and testing costs; and that it is a
"questionable use of the scarce and valuable space on a PCs
hard drive." (the Appeals Court quoting the District Court's
Findings of Fact) These considerations are cited by the Court in
holding unlawful and exclusionary OEM contracts that forced a choice
of including Microsoft middleware alone or Microsoft middleware plus
a similar competitor. Additionally, even when competitive middleware
is preinstalled alongside Microsoft's offering, "network
effects" would put any one of several non-ubiquitous
occasionally installed competitors at a serious disadvantage with
respect to offering by Microsoft, even if inferior, that is
guaranteed to be present on all installations. Should Microsoft
force an "ours or both" decision with respect to
competing middleware as a condition of OEM Windows licensing, it
would most certainly be anticompetitive. However, it would also be
explicitly sanctioned by the Proposed Final Judgement, and therefore
difficult for the government or a third party to oppose. [1]
To the degree that Section III.C might have any effect in
allowing OEMs to integrate third party middleware with a Microsoft
OS, Section III.H.3 largely eviscerates the hazard to the monopolist
by foreseeing a mechanism by which the company's operating systems
could ask end-users to confirm an alteration or undoing of OEM
additions to the OS fourteen days after the consumer first turns on
a PC. For example, under this section, an operating system would be
permitted to present a dialog box stating, "Windows has
detected that this configuration has been modified from Microsoft-
recommended defaults. This may lead to incompatibilities or system
faults. [Correct Now?] [Cancel]" Clicking "Correct
Now?" would replace OEM-installed non-Microsoft middleware
with Microsoft's offering. If faced with the question, a court might
determine that such a presentation (which Microsoft's competitors
would be unable to make) would constitute unlawful monopoly
maintenance by Microsoft. But it would be difficult for the
government or for a private litigator to make that case in the face
of a Final Judgement that clearly endorses the conduct.
The problems thus far mentioned are not unique. The Proposed
Final Judgement is riddled with "loopholes" that not
only make it a weak remedy, but that foresee and allow specific
behavior by Microsoft that in the absence the Final Judgement would
be actionable. By complicating potential future public or private
antitrust enforcement against Microsoft, the Proposed Final
Judgement would encourage misconduct and do positive harm to
competition in the software industry.
PFJ Specifically Discriminates Against "Open Source"
Competition
Over the past several years, a novel approach to software
development known as "open source" has risen to
prominence. Under the "open source" development model,
many widely dispersed individuals, businesses, and other entities
collaborate in the production of complex software products,
contributing to what over time has become a rich commons of
collectively authored software. "Open source" software
is made available free of charge, under licenses that permit
widespread redistribution and modification by users, sometimes with
the restriction that any derived works must be made available to the
public under the same terms. The business model that supports the
continued development of open source software remains to be fully
understood. The licensing terms of open source software prevent the
exploitation by authors of any limited monopoly that would enable
them to profitably "sell" software as traditional
software vendors, such as Microsoft, have done. Nevertheless, a wide
variety of actors including individual hobbyists, multinational
companies, public and private universities, governments, and
nongovernmental organizations have found sufficient incentive to
invest substantial amounts of time and money into the production of
open source software.
In the face of Microsoft's successful and unlawful monopoly
maintenance, very few traditional software vendors still stand as
competitors in the company's core market of Intel-compatible PC
operating systems. Behemoths like IBM and scrappy upstarts like Be,
Inc. have battled to gain a fingerhold, but failed to make any
headway at all, and their products (IBM's OS/2, Be's BeOS) have all
but faded from the computing landscape. The only non-Microsoft
operating system that has managed to grow its share dramatically
despite Microsoft's well-established pattern of anticompetitive
behavior is the open source operating system Linux. Other open
source projects that have competed effectively with Microsoft
include Samba (which provides Windows interoperable file and print
services to computer networks) and Apache (the most popular web
server on the Internet).
It appears that the open source development model is somewhat
resistant to the sort of anticompetitive behavior that has been
effective for Microsoft in the past. One might even argue that the
explosion of open source soil. ware over the past few years is a
response by businesses, developers, and users to an artificially
straitened "traditional" software landscape, and is
perhaps attributable at least in part to Microsoft's anticompetitive
behavior. As traditional vendors have receded from whole categories
of software under the self-fulfilling truism that competing with
Microsoft is akin to suicide, many entities have for one reason or
another decided that the cost of contributing a small portion to the
development of alternatives is less than the direct costs (continual
licensing fees) and indirect costs (the failings of software not
adequately tailored to their needs; uncertainty and future costs
created by vendor lock-in) associated with relying on Microsoft
products.
Regardless of the whys, open source software now stands as one
of the few sources of effective competition against Microsoft.
Indeed, while many of the battles that prompted the Justice
Department's action against Microsoft are now past and prologue
(e.g. the "browser wars" between Netscape and
Microsoft), the struggles between open source Linux and Windows in
the server space and between open source Apache and Microsoft's IIS
remains, among many others, remain active and fierce. [2] Any remedy
to Microsoft's anticompetitive behavior that diminishes the
likelihood that open source projects can effectively interoperate
with and compete against Microsoft's offerings would harm
competition in the software industry. Unfortunately, the Proposed
Final Judgement in several places explicitly permits Microsoft to
discriminate against open source competitors.
Importantly for open source developers, Sections III.D and III.E
of the Proposed Final Judgement would obligate Microsoft to disclose
APIs, communication protocols, and documentation that might be
required to interoperate with a Windows Operating System product.
However, the caveats of Sections III.I and III.J restrict these
earlier sections, and would allow Microsoft to essentially exclude
open source competitors from access to or the use of this
information. For the disclosure requirements of Sections III.D and
III.E to have any effect, competitors must be able to use the
information disclosed to develop and distribute competing and/or
interoperating products. However, Section III.I foresees a regime
under which the disclosed information must be licensed, as it
continues to be the proprietary, intellectual property of Microsoft.
Section III.I guarantees "reasonable and non-discriminatory
terms" for such licensing, based on the payment of
"royalties or other payment of monetary consideration".
However, "reasonable and non-discriminatory" commercial
terms inherently discriminate against open source software, which by
virtue of its licensing must be freely distributable and modifiable.
Under ordinary circumstances, a company certainly should have
the right to offer use of its proprietary technology only under
commercial license, and this would legitimately prevent those who
might wish to distribute open source applications based on that
technology from doing so. But in the case of a company that has a
monopoly over a substantial portion of the computing world and that
has maintained that monopoly through unlawful anticompetitive
conduct, allowing it to require competitors to pay even
"reasonable" licensing fees in order to interoperate
with its monopoly product provides the monopolist with unjustifiable
reward for its misbehavior, in Microsoft's case, permitting such
licensing is particularly insidious, because even if it were to
provide licensing of its putative IP on absurdly generous terms, for
example if it were to levy a royalty of 1� per thousand copies,
it would immediately exclude what in the present real world are
currently its most tenacious competitors from any possibility of
interoperating with its software. By permitting "reasonable
and non-discriminatory" commercial licensing of technologies
the use of which is required in order to compete against and
interoperate with Microsoft technologies, the Proposed Final
Judgement condones and foresees a
[[Page 28896]]
practice that would exclude and discriminate against important open
source competitors.
Section III.J restricts the scope of the PFJ disclosure
requirements where security technologies ("anti-piracy,
antivirus, software licensing, digital rights management, [and]
encryption or authentication systems") are concerned.
Unfortunately, in today's networked world, no software is untouched
by security concerns, and any non-trivial internet application must
make use of and interoperate with encryption and authentication
systems. Further, non-disclosure of security-critical techniques and
protocols is unnecessary: the professional computer security
community is nearly unanimous in its disavowal of the notion of
"security through obscurity". A well-designed system
should be secure even in the face of an attacker who fully
understands the algorithms and protocols used to enforce the
security. This is not as difficult as it sounds: the academic
literature is filled with encryption algorithms and protocols that
have never been broken despite massive peer-review, and even some
that are "provably secure". Historically, non-disclosure
of security techniques in software has more often served to provide
cover for shoddy work than to even arguably enhance security.
"Security by trade secret" is invariably broken,
because, invariably, secret techniques are not subjected to
sufficient peer review, and weak secret techniques can be reverse-
engineered and then compromised. (See the recent history of CSS, a
once-secret, easily broken, scheme for protecting DVDs, for a
topical case-in-point.) Microsoft has a particularly poor security
record, with respect to both the inadequate security of its
products, and its attempts to restrict disclosure in hopes of
covering up embarrassing lapses.
Open source software, in general, has a much better reputation
for security, owing in large part to the fact that security
algorithms in open source software are necessarily published, and
are therefore subject to widespread review. Thus it is ironic that
Section III.J.2 of the Proposed Final Judgement explicitly allows
Microsoft to condition disclosure of security-sensitive technologies
to those who "meet[] reasonable, objective standards
established by Microsoft for certifying the authenticity and
viability of its business". Since most open source software
projects are not developed or "owned" by any one
business, and since the terms of open source licensing often require
disclosure of source code, III.J.2 effectively excludes open source
software from any access to protocols, APIs, and other information
that might be required to interoperate with or compete against
Microsoft products that include a security component. Any
significant application now must have security designed into it, so
Section III.J.2 could be used to effectively lock open source
competitors out of the disclosure requirements of the Proposed Final
Judgement. It would be difficult to oppose Microsoft in court for
discriminating against its troublesome open source competitors when
the discrimination is based on the language of a court-sanctioned
Final Judgement.
PFJ "Enforcement Mechanisms" Would Hinder Effective
Enforcement
The following portions of the Proposed Final Judgement would
hinder effective enforcement of the agreement:
. Section IV.B provides for the appointment of a Technical
Committee to "assist in enforcement and compliance" with
the PFJ. The constitution and role of the "TC" is
described in detail. The Technical Committee would oversee
Microsoft's compliance with the agreement in an ongoing way, and
would respond to complaints from the plaintiffs or third parties.
However, the Technical Committee has no power other than to assist
in Voluntary Dispute Resolution, and, according to Section IV.D.4.d,
"No work product, findings, or recommendation by the TC may be
admitted in any enforcement proceeding before the Court for any
purpose, and no member of the TC shall testify by deposition, in
court or before any other tribunal regarding any matter related to
this Final Judgement."
. Section IV.A.1 requires that "the plaintiff States shall
form a committee to coordinate their enforcement of this Final
Judgement. A plaintiff State shall take no action to enforce this
Final Judgement without first consulting with the United States and
the plaintiff States" enforcement committee."
. Section VIII explicitly excludes third parties from taking any
role in the enforcement of the Proposed Final Judgement.
Let us be perfectly clear: At the end of the day, the Proposed
Final Judgement provides the United States and each of the plaintiff
States with a right to sue to enforce its terms. But let's also be
honest: the choice by a State of whether or when to enter into
complex antitrust litigation against a well-known and well-heeled
opponent is politically fraught under the best of circumstances.
Under the terms of the PFJ, an unsatisfied plaintiff would be faced
with two bad options: 1) the plaintiff can expend resources on a
dispute resolution mechanism (the "TC") that the PFJ
endorses, but that has no power, cannot be used at all as a basis
for further proceedings, and will have no effect unless an amicable
resolution is reached; or 2) eschew the dispute resolution mechanism
endorsed by the settlement, thereby facing accusations of burdening
Court resources unnecessarily, as well as a politically treacherous
"consulting" process that would predictably lead to
accusations of judicial overzealousness by reluctant former co-
plaintiffs. A reasonable non-judicial enforcement mechanism would
serve as a basis for judicial enforcement if required. Instead, the
PFJ creates a "middle path to nowhere", that increases
the political difficulty of undertaking any binding action against
the company Under the PFJ, the real-world probability that
misbehavior on Microsoft's part would bring legal consequences would
be less than without the proposed enforcement mechanisms. Thus, the
Proposed Final Judgement does positive harm to the public.
Complex, Vague, and Contradictory Language Hides New
Anticompetitive Tools For Microsoft The ostensible purpose of
Section III.1 of the Proposed Final Judgement is to require that
Microsoft license under "reasonable and non-discriminatory
terms" intellectual property that software vendors and other
parties might require in order to offer middleware products
interoperable with Windows. If the wording were less vague (and if
"reasonable and non-discriminatory" were changed to
"royalty free" to include open source developers), this
would be a serious and legitimate remedy: Having unlawfully
restricted the development of competing middleware, it is fair that
Microsoft be compelled to license, under generous terms, whatever
intellectual property nascent competitors would find necessary to
interoperate with Windows.
However, the wording of this section is astonishingly vague.
Microsoft may be compelled to license its IP to "ISVs, IHVs,
IAPs, ICPs, and OEMs" only as required to "exercise
options and alternatives expressly provided to them under this Final
Judgement". Exactly what "options and
alternatives" are provided to these parties by the Proposed
Final Judgement is not a matter of scientific clarity, even to the
avid reader of the document. What is crystal clear, however, is that
those to whom the PFJ purports to offer this relief--the
alphabet soup of third parties--have absolutely no standing to
enforce (and therefore to enlist a Court's aid in interpreting and
clarifying) this or any other section of the Proposed Final
Judgement (Section VIII of the PFJ, see above).
Further, in an astonishing twist, Section III.I.5 exacts the
remedy of compulsory licensing not only of the convicted monopolist,
but of innocent competitors seeking relief. Section III.I.5 insists
that a software vendor who wishes to provide a middleware product
for a Microsoft operating system, if they require access to
Microsoft IP to interoperate, must license to Microsoft its own
intellectual property. The following language is no doubt intended
to soothe competitors: "[T]he scope of such license shall be
no broader than is necessary to insure that Microsoft can provide
such options or alternatives" (Sec III.I.5). However, nowhere
in the PFJ have I been able to discern any "options and
alternatives" that Microsoft must provide to any third parties
that would require a license on its part. Microsoft must merely
permit practices that it has heretofore managed to prevent, in part
by refusing to license its own IP, and it must disclose some of what
it has heretofore kept secret. The requirements of Section III.I.5
unnecessarily and specifically envision a situation where a
competitor, attempting to interoperate with Windows in ways that
arguably would require some license of IP from Microsoft, could be
asked to license its own IP to Microsoft, or else to cease and
desist. If Microsoft and the putative competitor were to disagree
about what "no broader than necessary" means, a
competitor could not enlist, any court to resolve the dispute and
compel licensing under the PFJ. Thus, the PFJ sets up a situation
where Microsoft could "leverage" an interoperability
requirement by a competitor or ISV in order to acquire access to the
attractive IP of its competitors. In the absence of the PFJ, a court
might look at a "we'll show you ours only if you show us
[[Page 28897]]
yours" requirement as anticompetitive, given that Windows
Operating Systems are a de jure monopoly with which many third
parties must interoperate or die. However, the Proposed Final
Judgement gives cover to the practice by explicitly foreseeing and
sanctioning a cross-licensing requirement, diminishing the
likelihood of a successful outcome and increasing the burden in
litigation for companies that may find themselves in the crosshairs
of Microsoft's IP lawyers. Again, the public is positively harmed by
the PFJ, because it diminishes the likelihood of legal consequences
should Microsoft engage in foreseeable anticompetitive behavior.
Conclusion
A District Court found, and a Federal Court of Appeals,
affirmed, that Microsoft engaged over a period of years in multiple
unlawful and sometimes deceptive practices in order to maintain its
monopoly on PC-compatable operating systems. The fruits of this
illegally maintained monopoly have been and continue to be huge for
the company and its principals. The Proposed Final Judgement fails
to provide any strong remedy for this conduct, and instead shelters
the monopolist from potential consequences of past and future
misconduct. The Proposed Final Judgment, by providing court sanction
to practices a court might well find to be anticompetitive absent
the proposed settlement, leaves consumers, competitors, open source
software developers, and other interested parties in a worse
position than they would be in if Microsoft were simply left to face
private litigation as a de jure monopolist without any specific
remedy being imposed in the present case. The Proposed Final
Judgement would therefore be harmful to the public interest, and,
unless it is very substantially modified, it should be rejected.
Notes
[1] Section III.C.1 suffers from the same flaw. It permits OEMs
to install "icons, shortcuts, and menu entries" for pre-
installed, competing middleware, but "Microsoft may restrict
an OEM from displaying icons, shortcuts, and menu entries for any
product in any list of such icons, shortcuts, or menu entries
specified in the Windows documentation as being limited to products
that provide particular types of functionality, provided that the
restrictions are non-discriminatory with respect to non-Microsoft
and Microsoft products." Microsoft would be freed again to
create an "ours or both" situation, justified by
language it could graft into contracts directly from the Proposed
Final Judgement.
[2] For an informal measure of the perceived threat that open
source software presents to Microsoft's monopoly, we might examine
the lengths to which Microsoft has gone in disparaging such software
recently. Microsoft CEO Steve Ballmer has called Linux "a
cancer" [Chicago Sun-Times, June 1, 2001] that has "the
characteristics of communism." [The Register, August 2, 2000]
Ballmer has explicitly described Linux as "threat number
1." [upside.com, January 20, 2001i According to the public
comments of Microsoft exec Jim Allchin, "Open source is an
intellectual property destroyer... I'm an American, I believe in the
American Way. I worry if government encourages open source, and I
don't think we've done enough education of policy makers to
understand the threat." [CNet news.com, February 15, 2001]
[URLs:
http://www.suntimes.com/output/tech/cstfin-micro-01.html;
http://www.theregister.co.uk/content/1/12266.html;
http://www.upside.com/texis/mvm/news/story?id=3a5e392ca3;
http://news.com.com/
2100-1001-252681.html?legacy=cnet]
MTC-00030454
6320 Chaprice Ln.
Montgomery, AL 36117
J.R. SMITH
1535 WILDLIFE TRAIL
UNION SPRINGS, AL 36089
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Ave, NW
Washington, DC 20530
Dear Mr. Ashcroft,
I was recently surprised to hear of the recent development in
the Microsoft settlement. After three years of negotiations, I
cannot believe that this agreement may be held back even further.
The terms of this agreement were part of a sophisticated, detailed
process and all affected were involved. At this point in time, the
settlement is fair and reasonable and should be used as a guideline
to get our technology industry back to business.
Under the settlement, Microsoft will design all future operating
systems so that competitors can easily place their components on the
system. Also, under this settlement, the government will appoint a
full-time monitor to observe Microsoft. These concessions are
clearly a step toward a more unified, stronger II sector. By getting
back to work. we can maintain our place in the competitive world
market, and car, get our economy back on track To enforce this
agreement would be beneficial to the consumer, the IT sector and the
entire economy.
Please work to help stop any further actions against this
agreement. As we support our technology industry, we support the
growth of our economy and the advancement of this great country.
Sincerely.
I.R. Smith
334-738-2182
MTC-00030455
Cipher Systems
80 Glastonbury Blvd
Glastonbury, CT 06033
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
This letter is to inform you of my full support of the antitrust
settlement that was reached by the Justice Department and Microsoft
Corporation.
The settlement is fair and reasonable, and should be finalized
as soon as possible, since Microsoft did not get off easy. In fact,
Microsoft has agreed to share portions of its interfaces and
protocols for its Windows operating system. This is nearly priceless
intellectual property. It also agreed not to retaliate against
software or hardware developers who develop or promote software that
competes with Windows or that runs on software that competes with
Windows. The settlement changes every aspect of the way Microsoft
conducts business. I hope the settlement is finalized soon.
Thank you generously for your attention.
Sincerely,
Bert Sirkin
Chief Technology Officer
Cipher Systems LLC
MTC-00030456
Carole Tovar
P.O. Box 13675
Mill Creek, WA 98082-1675
January 21, 2002
John Ashcroft
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I'm writing to encourage you to support the recent anti-trust
settlement Microsoft reached with the U.S. Justice Department. I
feel this is something Microsoft has agreed to merely so it could
end the suit and so it can return to the business of making good and
innovative software.
Microsoft has, for example, agreed to allow computer makers to
change Windows so that Microsoft's products can be removed from the
operating system and competing, non-Microsoft products can be
installed in their places. AOL Instant Messenger can be installed in
the place of Windows Messenger; RealNetworks RealPlayer can be
installed in the place of Windows Media Player; and Netscape
Navigator can be installed in place of Internet Explorer. Microsoft
has also agreed to not take any actions against computer makers who
choose to do this, or who decide to ship operating systems that
compete with Windows, or who develop software that runs on such
alternative operating systems.
That sounds pretty, far-reaching to me. To give its rivals a
break: Microsoft is giving up all kinds of fights over its freedom
to contract and over its own property. There's no point in hounding
them with even more litigation.
I encourage you to accept the terms of the settlement so
Microsoft can continue to make good software and provide jobs to
thousands around the country.
Sincerely,
Carole Tovar
MTC-00030457
TOVAR PROPERTIES
January 21, 2002
John Ashcroft
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I'm writing to encourage you to support the recent anti-trust
settlement Microsoft reached with the U.S. Justice Department. I
feel this is something Microsoft has agreed to merely so it could
end the suit and so it can return to the business of making good and
innovative software.
[[Page 28898]]
Microsoft has, for example, agreed to allow computer makers to
change Windows so that Microsoft's products can be removed from the
operating system and competing, non-Microsoft products can be
installed in their places. AOL Instant Messenger can be installed in
the place of Windows Messenger; RealNetworks RealPlayer can be
installed in the place of Windows Media Player; and Netscape
Navigator can be installed in place of Internet Explorer. Microsoft
has also agreed to not take any actions against computer makers who
choose to do this, or who decide to ship operating systems that
compete with Windows, or who develop software that runs on such
alternative operating systems.
That sounds pretty, far-reaching to me. To give its rivals a
break, Microsoft is giving up all kinds of rights over its freedom
to contract and over its own property. There's no point in hounding
them with even more litigation.
I encourage you to accept the terms of the settlement so
Microsoft can continue to make good software and provide jobs to
thousands around the country.
Sincerely,
Carole Tovar
MTC-00030459
650 Halfway Road
Crawfordsville, IN 47933
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
My name is Ginger Todd. I am a resident of Crawfordsville,
Indiana. I am happy to hear that a proposed settlement has been
reached between the federal government and Microsoft in the
antitrust case.
While I don't know all of the details of the lawsuit or this
settlement proposal, one thing the proposal clearly deals with is
the most frequently voiced consumer complaint against Microsoft: the
lack of choice when utilizing the Windows operating system.
Microsoft has agreed to allow computer makers to change Windows to
have non-Microsoft programs built-in--programs that compete
directly with Microsoft features and programs that usually come
included with Windows.
The agreement by Microsoft to allow competition within Windows
will be of great benefit to both consumers and competing software
designers and manufacturers. I hope that you will approve the
agreement so we consumers will be able to benefit from it soon.
Thank you for taking time to read my comments.
Sincerely,
Ginger Todd
MTC-00030460
FACSIMILE COVER PAGE
To: Renata B. Hesse
From: HARRY MESSENHEIMER
Sent: 1/25/02 at 8:33:16 PM
Pages: 3 (including Cover)
Subject:
Comments on Microsoft Settlement
Rio Grande Foundation
P.O. Box 2015
Tijeras, NM 87059
505 286-2030
www.riograndefoundation.org
January 25, 2002
Antitrust Division
U.S. Department of Justice
601 "D" Street NW, Suite 1200
Washington, DC, 20530
Attn: Renata B. Hesse
Subject: Comment on Proposed Final Judgment re Microsoft
Dear Sir or Madam:
I am writing to you on behalf of the Rio Grande Foundation of
New Mexico, an independent, non-partisan policy research group
dedicated to promoting free markets and open competition. I
appreciate tile opportunity to comment.
In my capacity as Senior Fellow for Economic Research at the
Foundation, I urge you to accept the proposed settlement in the
anti-trust case involving Microsoft. In urging you to accept the
settlement my arguments are that (1) we do not know enough about
possible harms to take more aggressive action against MS and (2) we
should be careful about opening up antitrust law to unproductive,
rent-seeking activity.
The proposed settlement is file one that likely will do file
least harm. I say that with a good deal of humility, since I think
many economists tend greatly to overstate what we really know of
tile possible harms alleged in this case. But one thing we do know
is that competition is beneficial to society. Competition in an
environment of economic freedom tends to promote human prosperity,
an assertion strongly supported by recent empirical evidence.
What we don't know much about, however, is how the competitive
process leads to prosperity. The economist's model of "perfect
competition" is not particularly useful in informing us about
antitrust law as it relates to possible harms that may reduce
prosperity. Knowledge is not given; innovative change has been
taking place at incredible speed. The premier scholar who wrote
about competition and our lack of knowledge was Professor F. A.
Hayek, who said in a famous essay about competitive process:\1\
".-.-. we should worry much less about whether
competition is perfect and worry much more about whether there is
competition at all." Undoubtedly some of MS's restrictions on
access to Windows were only intended to increase its market share
while raising cost barriers to potential entrants. But it is hard to
differentiate those restrictions from actions that substantially
benefit consumers, as some of the alleged predatory behavior on the
part of MS would appear to do. It is not readily apparent, for
example, that the tying of Internet Explorer to the Windows desktop
is anything but a benefit to those who purchase Windows. The issue
boils down to whether or not this tying will result in differential
harm to consumers over time. The only way that could happen is if
the barriers to entry were so substantial and the resulting MS
monopoly so inefficient as to erode away this short-run benefit. But
those barriers actually seem to be quite small. Any time I surf the
Internet I am amazed at how much competition there is. And how can
we tell if MS is more or less efficient now than an unseen evolution
under a different set of antitrust doctrine in which MS has a court-
dictated constraint on behavior to reduce its market share? Market
share as a measure of harm seems to be a red herring. The threat of
entry, itself, tends to promote expanded service and lower costs. I
think what we have observed over the past 40 years at least
partially justifies my assertion.\1\ Hayek, F.A, "The meaning
of competition," in Individualism and Economic Order, Univ. of
Chicago Press 1948, Midway reprint 1980, p 105.
As mentioned above, my second argument involves the unproductive
cost of seeking differential advantage over competitors through the
government in general and antitrust law in particular. In economics
this is know as "rent-seeking" behavior. Economists are
in wide agreement that rent-seeking is a loss the economy. Rather
than seeking differential advantage from the government, firms could
be using those resources to produce a better product at lower cost.
The costs of rent-seeking behavior in this case alone seem to be
enormous. And the draconian ruling by Judge Jackson would appear to
open the door for like kind of wasteful activity. It would lead to
severe impacts far beyond one company, acting as a drag on one of
the most vibrant sectors of our economy. We can do nothing about the
resources already used in this case, but we can prevent this kind of
wasteful activity in the future.
That is why the settlement should be approved. It is a common-
sense solution that recognizes the limitations in what we know about
competition and innovation. And its approval also would serve to
reduce predatory, rent-seeking behavior in the future.
Thank you for your consideration.
Sincerely,
Harry Messenheimer, Ph.D.
Senior Fellow, Rio Grande Foundation
MTC-00030461
Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NVV
Suite 1200
Washington, DC 20530-0001
January 25, 2002
ISSUE: It is my understanding that the Dept. of Justice is
asking for public comment concerning the negotiations over the
Microsoft antitrust suit.
Microsoft has already agreed to hide its Internet Explorer icon
from the desktop. I personally believe, this case against Microsoft
is little more than "welfare" for Netscape and other
Microsoft competitors, with not a nickel going to those supposedly
harmed by Microsoft: the computer user. The Clinton/Reno Justice
Dept. began this suit for some nebulous masons of their own, I have
never trusted their motives in the situation, and I for one, would
cheer Bill Gates if he shut down his complete US holdings and moved
to Singapore or somewhere else where the government would not be
trying to destroy a successful business during a recession. Please
put a stop to this madness. The destruction to the economy already
done
[[Page 28899]]
is huge, and continuing this blunder will only exacerbate an already
bad situation.
Thank you for considering my opinion.
Ray Grace
468 West Street, Box 222
Heppner, OR 97836
Fax 541-676-5292
MTC-00030463
FAX
Date: Friday,
January 25, 2002
Time: 8:13:00 PM
2 Pages
To: U.S.Attorney General John Ashcroft
From: Ronald J. Markham
Fax: 616-9937
Fax: 860,349,3816
Voice: Voice: 860,349,3816
Comments:
The Honorable Attorney General John Ashcroft Washington DC
27 Dunn Hill Road
Durham, CT 06422
Jan. 25, 2002
Dear Attorney General,
re: Microsoft Settlement
Please count me in the opposed column to the pending suit
against the Microsoft Corporation. Night after night I see on
television or read in the newspapers adds for cars and tracks,
appliances, and other products hawking giveaways if you will just
buy this or that product. I see no difference in the marketing of
many other corporations than the marketing of Microsoft. Is not the
idea of building a better mousetrap or marketing a better mousetrap
the "American Way"?
I am an ordinary citizen with no axe to grind, but I find it
very distasteful to waste tax dollars on such a silly exercise.
Microsoft has improved our way of life in so many ways by pursuing
this legal action leaves me saddened and frustrated. Please Attorney
General Ashcroft, stop this waste of manpower and tax dollars and
redirect the governments legal efforts to meaningful pursuits.
Very truly yours,
Ronald J. Markham
MTC-00030464
January 25, 2002
Renata Hesse, Trial Attorney
Antitrust Division, Department of Justice
601 D Street NW, Ste. 1200
Washington, DC 20530
VIA FACSIMILE
(202) 616-9937
Dear Ms. Hesse:
The case against Microsoft has been a tremendous waste of time
and money. Monopolies are when train companies won't let other train
companies use their rail system. Monopolies are not when companies
load a browser on to a computer--when a consumer can simply
download the competing browser at the click of a button. When did
this country lose the idea of open competition in the market place?
The cries from Microsoft's competitors were not legitimate.
However, assuming they were justified, those issues are certainly
dealt with in the existing settlement. This settlement will end much
of the case and get the software industry working again, I urge the
courts to endorse the settlement.
Sincerely,
Bill Carlson
MTC-00030465
Michael S. Giorgino, Esq.
1634 Pomona Avenue
Coronado, CA 92118-2932
(619) 437-8217
mgiorgino @ aol.com
Renata Hesse, Trial Attorney
Antitrust Division,
Department of Justice
601 D Street NW, Ste. 1200
Washington, DC 20530
VIA FACSIMILE
(202) 616-9937
Dear Ms. Hesse:
I am writing the court because I am very concerned about the
case of US v. Microsoft. From my reading on the case, I believe I am
able to introduce public comments into the record. Please accept
this letter as my public comment.
I am an attorney licensed to practice law in the State of
California and in the Federal Courts. While I have not reviewed this
case in depth, I understand its core issues. I am a concerned
citizen who truly abhors government waste. My concern about wasted
taxpayer dollars inspired me to write this letter.
Before September 11, the US Government spent more on the case
against Microsoft than it did trying to stop the actions of Osama
Bin Laden. We, the American taxpayers, have funded this case long
enough. It has gone on almost four years and cost untold millions of
dollars. To date, I know of nothing positive which has come from
this case. The t??ch industry is down, innovations have slowed, and
almost every state (including California) went from a surplus to a
deficit in their budgets.
Novelist/philosopher Ayn Rand wrote that Antitrust is "the
penalizing of ability for being ability, the penalizing of success
for being success, and the sacrifice of productive genius to the
demands of envious mediocrity." Microsoft's competitors
initiated this case so they could gain from the courts what they
were unable to accomplish in the free market. Enough is enough!
Wasting a single additional taxpayer dollar persecuting Bill
Gates" brilliant and innovative company is
unacceptable--economic progress cannot be achieved at the point
of a gun.
I urge the court to accept the proposed settlement in the
interests of fiscal responsibility and economic justice.
Sincerely,
Michael Giorgino
Attorney at Law
MTC-00030466
FAX
TO:
FR:
RE:
DATE:
# of pages: (including this page)
January 25, 2002
Renata Hesse, Trial Attorney
Antitrust Division
U.S. Department of Justice
601 D Street, NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
Thank you for this opportunity to state my opinion regarding the
government's proposed settlement of its case against Microsoft.
First of all, the government had no business interfering with
the operation of Microsoft when it began its pursuit of them back
during the Clinton administration. The federal government was
wrongly attempting to control and regulate a new, growing, and very
vital part of our nation's economy. The last thing the technology
industry needed was bureaucrats and Justice Department lawyers
hovering over them like vultures.
I have read the proposed settlement/stipulation, and I believe
Microsoft is being more than reasonable to agree to this document.
Setting up the governmental *technical committee" seems
particularly onerous. However, in the interest of ending this whole
misplaced attack, I urge you to approve this settlement.
Thank you for your consideration of my comments.
Sincerely,
Cynthia M. Lyon
2315 Iowa Avenue
Independence, IA 50644
(319) 334-3490
MTC-00030467
Chris H. Pipkin
January 21, 2002
Judge Kolar Kottely
U.S. Department of Justice
601 D Street, NW, Suite 1200
Washington, D.C 20530
Dear Judge Kolar Kottely
It is my understanding that you are currently considering
whether to accept the proposed settlement reached by the Department
of Justice and Microsoft. I am writing m you in order to express my
strong support for this settlement.
I am an investment officer in Cedar Rapids. The ebbs and flows
of the economy, along with any outside forces that impact it, are of
great interest to me. There is no doubt that bringing closure to the
Microsoft case will have a positive impact on the national economy.
The government's case against Microsoft had potential to set
far-reaching precedent for government intervention and regulation of
an industry. This reality caused much concern for investors who
worried that the growth of the technology industry would be hampered
by government regulation. While there are many causes for our
weakened economy, the uncertainty erented by this ease was a
contributing factor in the decline of many technology stocks.
Bringing the Microsoft case to end is in the best interest of
the economy and this proposed settlement is the vehicle to make it
happen. While I do not know all of the intricate details of the
settlement, what I have read lends me to Believe a fair compromise
addressing the concerns of the complaint was reached. For example,
Microsoft will be bound to share intellectual property and must
create new versions of Windows that allow the promotion of non-
Microsoft
[[Page 28900]]
products. The settlement also establishes a committee that will
police Microsoft's compliance with the settlement.
Thank you for your consideration
Sincerely,
Chris H, Pipkin
3604 HEATHERIDGE DR. + Cedar Rapids, + 52402 +
319-862-2293
MTC-00030468
To Renata Hesse
The following six (6) pages of this facsimile are a comment on
the Microsoft Settlement in the Microsoft antitrust case. This
comment has been simultaneously submitted by email.
Mason Thomas
(805) 530-1502
As a professional working in the technology sector, I often have
occasion to use Microsoft software and competing products. I am
therefore concerned that the Revised Proposed Final Judgment in the
Microsoft antitrust case has a number of deficiencies that prevent
the Judgment from providing certain and effective relief for
Microsoft's violations of the Sherman Act. Unless these flaws are
corrected, the Revised Proposed Final Judgment is clearly against
the public interest and will positively harm third parties.
This Comment addresses five serious deficiencies of the Revised
Proposed Final Judgment, The deficiencies are discussed in the order
they appear in the Judgment, not necessarily in their relative order
of impact on injunctive relief. The deficiencies are:
1. The Judgment provides no remedies for past unlawful conduct.
2. Allowing volume discounts anticompetitively maintains
Microsoft's monopoly (Section III.A. and III.B.).
3. Restrictions on disclosure of communications protocols
maintains a barrier to competition (Section III.E.).
4. Arbitrary five year term of Judgment harms the public
interest (Section V.).
5. The definition of "Non-Microsoft Middleware
Product" maintains a barrier to competition (Section VI.N.).
Although it is unreasonable to expect a truly optimal Judgment
that best serves the public interest, the existence of any one of
the above deficiencies--and certainly the coexistence of
several of them--will not end Microsoft's unlawful conduct nor
avoid a recurrence of violations of the Sherman Act, and is thus
outside the reaches of the public interest.
1. Judgment provides no remedies for past unlawful conduct
Although the Revised Proposed Final Judgment provides limited
remedies "to halt continuance and prevent recurrence of the
violations of the Sherman Act by Microsoft" (Competitive
Impact Statement, Section I.), it does not in any way "undo
its anticompetitive consequences" (Competitive Impact
Statement Section IV.B.) , There is no provision in the Judgment to
remedy any past anticompetitive actions by Microsoft: all provisions
in the Judgment attempt to alter the current and future behavior of
Microsoft. As such, the Judgment does not effectively restore the
competitive conditions experienced by Microsoft prior to its
violations of the Sherman Act. An effective remedy for Microsoft's
past illegal actions requires a careful balance to empower injured
competitors while not unduly damaging Microsoft. A simple but fair
remedy would create a pool of Microsoft's money based on a
percentage of sales of Microsoft Operating System Products since the
filing of the antitrust complaint till the time of the Final
Judgment entered by the Court. The parties damaged by Microsoft's
anticompetitive behavior (e.g., Sun Microsystems, Netscape
Communications Corp., etc.) would be payed from this pool. The size
of the pool and the relative payment terms to competitors are
details that require careful consideration.
2. Allowing volume discounts anticompetitively maintains
Microsoft's monopoly allowing volume discounts serves no
procompetitive interest and is in fact very much against the public
interest as it serves to illegally maintain Microsoft's monopoly.
Section III.A. of the revised proposed final judgment stipulates
that "Nothing in this provision shall prohibit Microsoft from
providing Consideration .-.-. commensurate with the
absolute level or amount of that OEM's development, distribution,
promotion, or licensing of that Microsoft product or service."
Section III.B.2 provides for a licensing fee schedule that
"may specify reasonable volume discounts based upon the actual
volume of licenses of any Windows Operating System Product
.-.-." These provisions allow Microsoft to
continue to leverage its monopoly position to illegally maintain
that monopoly. The Competitive Impact Statement entirely ignores the
anticompetitive ramifications of these terms.
Unlike traditional manufacturing, where the production or
distribution of a large quantity of a product can generate
"economies of scale" and thereby procompetitively
justify non-uniform pricing (e.g., volume discounts), the licensing
of software has no significant economies of scale. A comparison with
traditional manufacturing is useful. For a car dealership selling
hundreds of cars per month, there is economic justification for the
car manufacturer to provide a volume discount to the dealership: the
distribution costs (shipping) per car are lower than for a
dealership selling only ten cars per month, with software however,
the only economy of scale obtained is slightly cheaper production
materials: compact disks for distribution and paper for
documentation and product boxes. OEMs typically only include a
compact disk with a new computer purchase, for which the volume
production cost is under one dollar (US$1.00). Hence the economies
of scale afforded by large scale OEMs to Microsoft are less than one
percent (1%) of the retail value of typical Windows Operating System
Products. Hence there is no significant procompetitive reason to
allow volume discounts to large OEMs.
Allowing Microsoft to offer volume discounts will further
entrench its monopoly position. With volume discounts, Microsoft
would retain the ability to price its Windows Operating System
Product licenses at an artificially low cost to the largest OEM
vendors. These vendors would thus have a strong incentive to
continue to offer exclusively or predominantly the Microsoft
Operating System Product on new Personal Computers, The largest OEM
Personal Computer suppliers would have a free market incentive to
choose alternate Operating System Products if Microsoft's Operating
System Product were instead priced at an open market value. Avoiding
volume discounts increases competition while preventing Microsoft
from leveraging its monopoly to stifle competition.
This deficiency of the revised proposed final judgment is
remedied by deleting the words "distribution" and
"licensing" from the last paragraph of Section III.A.
and by modifying Section III.B.2 to read "the schedule may not
specify volume discounts based upon the actual volume of licenses of
any Windows operating System Product or any group of such
products." These modifications will still allow Microsoft to
compete in the marketplace based on the merits of the windows
Operating System Products, but prevent Microsoft from
anticompetitively erecting barriers to competitive products.
3. Restrictions on disclosure of communications protocols
maintains barrier to competition The Revised Proposed Final Judgment
maintains a significant barrier to competing Non-Microsoft
Middleware Products by restricting the disclosure of Communications
Protocols. Section III.E. of the Judgment provides that Microsoft
shall disclose Communications Protocols "on reasonable and
non-discriminatory terms." Such terms, however, prevent a
large number of established and nascent competitors from obtaining
the Communication Protocols. "Reasonable and non-
discriminatory" license terms act as an anticompetitive
barrier to potential Microsoft competitors, while providing no
procompetitive advantage for Microsoft.
"Shareware" software developers typically provide
software products (including middleware) free of charge for end
users to evaluate, and only demand payment if the end user decides
to continue using the software product. Such developers would be
unable to comply with "reasonable and non-
discriminatory" licensing terms unless a very large percentage
of end users payed for the software product. Similarly, the entire
"open source" class of software would be unable to meet
"reasonable and non-discriminatory" terms as the
"open source" licenses allow virtually unlimited
duplication and derivation rights. Several important Non-Microsoft
Middleware Products are "open source", notably the Samba
program (http://www.samba.org), that provides file transfer and
print Services through the Microsoft SMB Communications Protocol.
The Samba program is a well-established and widely used alternative
to Microsoft Middleware Products, but it would be effectively
prevented from competing with Microsoft through the adoption of
"reasonable and non-discriminatory" licensing terms for
future changes in the SMB protocol.
This deficiency of the Revised Proposed Final Judgment can be
remedied by a simple wording change. The phrase "reasonable
and non-discriminatory" in Section III.E. of the Judgment
should be changed to "royalty
[[Page 28901]]
free". Since Microsoft's ability to hide Communication
Protocols serves only to prevent competitors from effectively
interoperating with Microsoft products and does not in any way
increase competition, a mandatory royalty free license would serve
to allow both large and small competitors to interoperate with
Microsoft products.
4. Arbitrary five year term of Judgment harms the public
interest The Competitive Impact Statement in Section IV.C. claims
that a five year time frame for the Judgment "provides
sufficient time for the conduct remedies contained in the Proposed
Final Judgment to take effect .-.-. and to restore
competitive conditions to the greatest extent possible." The
Competitive Impact Statement provides neither evidence, nor
precedence, nor logic to support this claim.
In fact, a five year term may well be too long. The provisions
of the Revised Proposed Final Judgment may turn out to be so
effective at restoring competition that Microsoft loses its
dominance in less than two years in the Operating System market for
Personal Computers and becomes unnecessarily hobbled by the
restrictions of the Judgment. In such a case, Microsoft would be
unfairly restricted from competing in the market for another three
years, possibly causing great economic damage to Microsoft and
depriving consumers of the fruits of a vibrant competition in the
Operating System market.
Alternatively, the provisions of the Revised Proposed Final
Judgment might not be sufficient to hinder Microsoft's
anticompetitive actions, and Microsoft could continue to violate the
Sherman Act through an extended seven-year Judgment period. Clearly
such a situation would severely harm the public interest, again
depriving consumers of the benefits of a competitive market and
stilting the entire Operating System and Middleware market. The
arbitrary five year Judgment term length would only be beneficial in
the most serendipitous of circumstances, and the arbitrary two-year
extension does not mitigate this fault.
The overriding concern of this Judgment is to prevent
Microsoft's anticompetitive actions and to restore competitive
conditions to the market, and it is that principle that should guide
the term length of the Judgment. The most straightforward
application of this principle would be to terminate the Judgment
when Microsoft no longer enjoys monopoly status. This could be
achieved with the following replacement for Section V. (Termination)
of the Revised Proposed Final Judgment:
"This Final Judgment will expire when Microsoft's windows
Operating System Product has less than fifty percent share of the
Personal Computer Operating System market (as determined by a market
study provided by a mutually agreed upon third party)."
With this revised termination clause, the Judgment will stand
exactly as long as necessary for the public interest. An alternate
definition of monopoly status (i.e., instead of "fifty percent
market share") may also be acceptable, provided it is
logically and legally defensible, and maintains the intent of the
Judgment.
This new termination clause will ensure the return of healthy
competition to the Operating System market without unduly
burdening--or harming--Microsoft. At the point that
Microsoft's windows Operating System Products have less than fifty
percent share of the Personal Computer Operating System market,
there is clearly healthy competition in that market, with at least
one other dominant competitor to Microsoft. There is then no further
reason to impose the conditions of the Judgment. However, Microsoft
is not prevented from maintaining its monopoly on the technical
merits of its products. The ongoing terms of the Judgment would not
be onerous to Microsoft should it maintain a monopoly position
without resorting to anticompetitive actions.
5. Definition of "Non-Microsoft Middleware Product"
maintains barrier to competition Although the Revised Proposed Final
Judgment seeks to "restore the competitive threat that
middleware products posed prior to Microsoft's unlawful conduct
(Competitive Impact Statement, Section IV), the proposed definition
of "Non-Microsoft Middleware Product" serves instead to
maintain barriers to competition. Section VI.N. of the Revised
Proposed Final Judgment stipulates that a software product, among
other requirements, can only be considered a "Non-Microsoft
Middleware Product" if "at least one million copies were
distributed in the United States within the previous year."
This requirement is explained in the Competitive Impact Statement,
Section IV.A. as being "intended to avoid Microsoft's
affirmative obligations .-.-. being triggered by minor,
or even nonexistent, products that have not established a
competitive potential in the market .-.-." As the
Competitive Impact Statement makes clear, the definition of
"Non Microsoft Middleware Product" intentionally limits
the possible competitive impact of nascent middleware products. Such
a limitation is antithetical to the desired goals of the Judgment.
This deficiency of the Revised Proposed Final Judgment can be
easily remedied by deleting Section VI.N.(ii) and thus removing the
restriction on number of copies distributed. The Competitive Impact
Statement in Section IV.A. states that the restriction on number of
copies distributed "is intended to avoid Microsoft's
affirmative obligations--including the API disclosure required
by Section III.D. and the creation of the mechanisms required by
Section III.H.--being triggered by minor, or even nonexistent,
products .-.-." In other words, Microsoft should
not endure an onerous burden in its obligations. However, deleting
Section VI.N.(ii) would not create such a burden. Since Section
III.D. already specifies that APIs and related Documentation shall
be disclosed via the Microsoft Developer Network or similar
mechanisms, Microsoft will not require any further effort to make
the APIS and Documentation available to ISVs or other middleware
developers that have not established a competitive potential in the
market--but that nevertheless have the potential to become
competitors with Microsoft, Furthermore, the mechanisms required in
Section III.H. (such as the creation of Add/Remove icons) are
sufficiently generic that they will only need to be created
once--and likely already exist--to accommodate all
Microsoft and Non-Microsoft Middleware, and hence the expansion of
the number and kind of possible middleware competitors to Microsoft
again does not create an undue burden on the company.
This Comment has been submitted through both e-mail and
facsimile copy.
Respectfully submitted,
Mason Thomas
4333 Wildwest Circle
Moorpark, CA 93021
(805) 530-1502
January 25, 2002
MTC-00030469
13405 NW Spirit Court W
Silverdale, WA 98383-9507
(360) 697-2461
January t2, 2002
Attorney General John Ashcroft
United States Department of Justice
Washington, DC 205300001
Dear Attorney General Ashcroft:
I urge the Department of Justice to accept the proposed
Microsoft anti-trust settlement, which goes far beyond the original
scope of the lawsuit as it was originally filed. I feel Microsoft
made this settlement so it can back to its business of developing
software.
As terms of the settlement Microsoft has agreed to grant
computer manufacturers and software developers the ability to remove
Microsoft products and install competing products in their places.
Examples include: Netscape Navigator, RealNetworks RealPlayer, and
AOL Instant Messenger. You should note, though, that consumers can
install these products on their computer systems regardless if those
products came preinstalled on their systems. Microsoft has also
agreed to not enter into agreements with third-party computer
manufacturers or software developers that would require them to
exclusively or in a fixed percentage distribute or promote Windows,
unless there is no competitive issue.
Microsoft also must grant intellectual property rights to those
third parties that choose to exercise any options in the settlement
if those options would infringe on Microsoft's intellectual
property. Also as part of the settlement, a three-person
"Technical Committee" made of software engineers will be
overseeing compliance and assisting in dispute resolution, when
needed, The settlement also makes it easy for an individual or
company who feels Microsoft is not complying with the settlement
provisions to file a complaint, thus making it more likely that
Microsoft will abide by all terms in the settlement. For these
reasons, I support the Microsoft settlement. I look forward to
seeing this matter finalized and put behind us so we can get on with
the business of business. Thank you.
Sincerely,
MTC-00030470
FAX COVERSHEET
URGENT
To: Attorney General John Ashcroft
Fax Number: 1-202-307-1454
[[Page 28902]]
From: Sharon Miller
Fax Number: 1-716-388-7329
Pages: 2
Date: 1/26/2002
Subject: Microsoft Settlement
21 Cedarview
Fairport, NY 14450
January 25, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I was really happy when Microsoft and the Department of Justice
reached an agreement; now my hopes were dashed when I learned that
several states want to pursue further litigation. Why? Microsoft has
already agreed that if a third party's exercise of any options,
provided for by the settlement, would infringe any Microsoft
intellectual property, Microsoft will provide the third party with a
license to the necessary intellectual property on reasonable and
nondiscriminatory terms.
They also agreed to license file Windows operating system to the
largest computer companies on identical terms, conditions, and
price.
I urge you to end all litigation so that we can move forward. No
more action should be taken at the Federal level.
Sincerely,
Sharon Miller
MTC-00030471
John J. Petroci Jr.
1909 Kirkby Drive
South Park, Pennsylvania 15129
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to let you know my views on the Microsoft
settlement, First and foremost, this case has been in litigation for
many years now. Secondly, this lawsuit should not have concerned the
federal government, since no laws have been broken. Settlements have
been reached in various states, all of which have involved
appropriate concessions, including more information sharing and
changes in Microsoft's business practices.
I have firsthand experience with big business. I previously
worked in the steel industry, and due to government intervention and
regulation, I was put out of work when the companies were broken up.
Pennsylvania's steel industry will never be the same. I urge to you
please do your best to see that this does not happen to Microsoft.
Our nation's IT industry depends on companies such as Microsoft, and
our economy also depends on the IT industry, Please discontinue
these lawsuits and help our economy return to normalcy. I strongly
suggest that it is in the best interests of everyone to discontinue
these lawsuits so our economy can return to a sense of normalcy.
Sincerely,
John J.Petroci Jr.
cc: Senator Rick Santorum
MTC-00030472
371 Bald Road
Touchet, WA 99360
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I think the federal government never should have filed the
lawsuit against Microsoft. At this stage in the proceedings,
however, I think it is in everyone's best interest that the case is
settled. It is a shame that the remaining plaintiff states have not
joined in the settlement efforts. The concessions Microsoft has made
are more than reasonable. Microsoft has agreed to disclose portions
of its code to its competitors. They have agreed to establish a
uniform price list for computer manufacturers. They have agreed to
make it easier for servers to interoperate with one another. They
have agreed not to take actions against computer manufacturers who
install the competition's software on their computers. All of these
concessions amount to establishing fair competition for other
software companies.
The settlement agreement should be approved, and the federal
government should take no further action in this case.
The Clinton Administration should have never initiated this
suit. They were totally anti-business and their motives were
entirely political!
Sincerely,
Mark Wagoner
MTC-00030473
Christopher & Sharon Moline
12407 Madeley Lane
Bowie, MD 20715-2904
January 22, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
We are writing to show our support for the settlement reached
between Microsoft and the government. It is fair and reasonable.
The fact that Microsoft has agreed not to retaliate against
software or hardware developers who develop or promote software that
competes with Windows or that runs on software that competes with
Windows shows me that Microsoft is not looking for ways to hurt
consumers, but to help them, Further, Microsoft won't enter into any
agreements forcing a third party to distribute or promote any
Windows technology exclusively or in a fixed percentage. Finally,
the government will establish a "Technical Committee"
that will monitor Microsoft's compliance with the settlement and
assist with dispute resolution.
This is a good settlement and Microsoft deserves a lot of credit
for taking the lead on resolving these issues. We hope the
settlement will be approved so Microsoft can get back to developing
innovative software.
Sincerely,
Christopher & Sharon Moline
MTC-00030474
PhoneTools
BVRP
software
508 North View Road
Mount Airy, MD 21771
Phone: 301-831-0927
Fax: 3010-831-0927
Message:
Please review the attached document.
From: Steve and Linnea Capps
To: us Department of Justice Attorney General John Ashcroft
Date: 1/26/2002
Page(s): 2
January 23, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
As a woman aspiring to start her own business, I am discouraged
and disheartened by the manner in which the federal government
treats success. I am bitterly disappointed that our
government--MY government--feels it necessary to oversee
the financial castration of inventors and creators, hobbling what is
supposed to be free enterprise. I feel strongly that government has
no right to insert itself into legitimate and successful business,
to legislate and litigate, to attempt to regulate a product that
clearly outshines other, similar products. Smaller companies, who
can't compete became the quality of the product they offer is no
match for the "big guy", cry foul and the government
steps in to try to level the playing field, The playing field for
business will never be level It is not only futile to attempt to
level that field with legislation or legal action, it is a childish
wish for fairness that assumes that it can be done. If Linux and
Unix were such operating systems, they would be where Microsoft is
now, became the consumer would have demanded their products over
Windows. If WordPerfect or Lotus 1-2-3 were as user-
friendly as MS Word or Excel, they would be the applications in
great demand. The fact is, Microsoft is guilty of nothing more than
being popular--popular became they provide an intuitive, user-
friendly, and versatile environment in which to work. How can you,
as Attorney General, support, represent, or oversee the punishment
of a company whose only crime is that the consumer prefers its
product over the competition's?
For example: The entry of Wal-Mart and Target into the discount
department store business, offering better products at lower prices,
drove KMart into Chapter 11 bankruptcy. Consumers regulated the
market with their purchases. In the eyes of the consumer, Kmart just
didn't measure up to the competition. It has always been consumers
who ensure the success or demise of a business. We have, and should
be allowed to retain, without legislative or litigious interference,
the power to regulate business with our wallets.
I am not so naive as to think Microsoft is entirely without
fault or abuse of power in their rise to their current market
position. The proposed settlement with the government, which I have
reviewed, appears to be genuinely equitable. It not only provides a
solution to the anti-trust "problem" Microsoft presented
(in the eyes of the Department of Justice), it also provides
[[Page 28903]]
concessions to Microsoft and its competitors. At this point, I do
not believe additional action is necessary on the federal level.
I am concerned that the federal government has been so intrusive
and vituperative against Microsoft. Success, innovation, and
creativity should not be a federal offense, and are certainly no
reason for litigation to continue. I urge you and your office to
finalize the settlement and move on.
Sincerely,
Linnea Capps
(Mrs. Stephen R.)
MTC-00030475
Natalie Dunlap
316 Webster Street
Lewiston, ME 04240-4854
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I was pleased to learn the federal government decided to settle
its antitrust case against Microsoft. This should have been done a
long time ago. Nonetheless, I am in favor of the steps that have
recently been taken to resolve this lawsuit.
I am a very strong supporter of Microsoft. As a result of
Microsoft's hard work and innovation, we live in a world where I can
communicate with loved ones across the country with ease. I firmly
believe this case was brought as a result of the misguided idea that
a successful company should be knocked down, and its competitors
should be awarded the fruits of their labor, Notwithstanding my
belief that this case lacked merit from its inception, I think the
settlement agreement's terms are fair. The court should not hesitate
in its approval of the settlement. Microsoft has agreed to make it
easier for its competitors to compete with Windows. They agreed to
document and disclose to their competitors portions of the Windows
code. They also agreed not to retaliate against those who promote
software that competes with Windows. Nothing more should be expected
or required of Microsoft beyond the terms of the settlement
agreement.
Sincerely,
Natalie Dunlap
MTC-00030476
Jan 26 02 10:07 am
January 16, 2002
Attantion: Renata Hesse
Judge Kolar Kottely
U.S. Department of Justice,
Antitrust Division
801 D Street, NW, Suite 1200
Washington, DC 20530
Dear Judge Kottaly.
From the perspective of a regulatory compliance officer for
lowa's state-designates secondary market for student loans. I have
followed the Microsoft antitrust case with great interest and look
forward to a settlement.
Working with college graduates and students of lowa colleges and
universities, we are well aware of the growing number of young
people a??ting our state after compi??ting higher education. To
start this tide, businesses and our state government continue to
focus attention on how best to keep and attract college graduates to
lowa--investment in our cities, increasing amounts and
avaliability of vonture capital, creating a business ??mate that is
Inviting to companies.
It is unfortunate our state is one of only nine others whose
Attorney General did not sign onto the proposed Microsoft antitrust
s??tlement before you. It does not help our state's cause to attract
burg??ning tech companies or young professionals. I do not believe
his position is representative of the majority of lowa residents or
businesses--which is what com??iled me to write. The settlement
on the table has taken a great deal of time and effort from the
parties involved. It is a fair settlement and your approval of it
would take a large pace toward the finish line in this marathon
case.
Thank you for accepting my comments.
Sincerely.
camas G. Solo, CPA. CIA
Compliance Officer
Iowa Student Loan Liqui??ty Corporation
MTC-00030477
Facsimile transmittal
To: Department of Justice
Fax: 1-202-307-1454
From: Don Phillips
Date: 1/26/2002
Re: Microsoft Settlement
Pages: 1
CC:
X Urgent
To: Department of Justice
From: Don Phillips, Consumer, Engineer, Voter
I believe the US Government should settle its antitrust suit
against Microsoft immediately. The current proposed settlement
should be approved and implemented as soon as possible. This lawsuit
never, in any way, represented the interests of consumers. Microsoft
has had a long track record of developing and selling software
products that consumer like and use. The company's growth and
profits are evidence of this. On the other hand, no credible
evidence was ever presented during the trial (or after) to show that
Microsoft ever did anything that was against consumer interests.
Clearly this lawsuit never had any basis In fact and never should
have been undertaken.
In fact, the lawsuit, itself, has caused major harm to consumers
and to the entire US economy. Also, the government's reputation as
being objective and fair has been seriously eroded. In short, the
whole process has been a disgrace to justice and an insult to
American consumers. I have worked in the semiconductor industry for
30 years and have had many dealings with Microsoft as well as many
of Microsoft's competitors. Also, I have personally used many
products from Microsoft and from its competitors. Based on my Long
experience with technical products it is very clear to me why
Microsoft's competitors have not prevailed in the marketplace. This
lawsuit has clearly been shown to be nothing more than a thinly
veiled attempt by weak competitors to do serious harm to a more
successful company. This is very disgraceful behavior! For the
government to continue to perpetuate this case would be a major
miscarriage of Justice.
Respectfully, Don Phillips, Pale Alto, CA
MTC-00030478
1721 15th Avenue Southwest
Olympia, WA 98502
January 23, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I understand the Courts will make a final decision at the end of
this month on whether the proposed Microsoft settlement is in the
best interest of the consumer. I personally believe that we need to
leave it alone. It has already cost us billions of dollars in legal
fees, lost production and loss of jobs in the technology sector of
the economy.
Microsoft has agreed to grant computer makers broad new rights
to configure Windows, in order to promote non-Microsoft software
programs that compete with programs included within Windows. They
have also agreed to document and disclose various interfaces that
are internal to 'Windows' operating system for use by
its competitors. This is definitely beyond what is expected in any
antitrust settlement.
Let's end this before we get in over our head. There are far
more pressing issues we need to concentrate on such as reviving this
fragile economy.
Sincerely,
Edward Heffernan
MTC-00030479
John & Darlene Cooke
Phone: (252) 537-0960
P.O. Box 495
Fax: (252) 308-0990
Gaston, NC 27832-0495
email: dcooke @ schoollink.net
TO: Attorney General John Ashcroft
FROM: Darlene Cooke
DATE: 1-24-02
NUMBER OF PAGES (including cover page): 2
COMMENTS: Re?? Microsoft Settlement
P. O. Box 495
Gaston, NC 27832
January 23, 2002
Via Facsimile (202)-307-1454
or(202)-616-9937
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Attorney General Ashcroft:
As part of the public comment phase, I am writing to urge the
Department of Justice to accept the settlement proposal in the
Microsoft anti-trust case. I believe the terms of the proposed
settlement will protect consumers and will shield Microsoft's
competitors from unfair business practices. By accepting the
proposed settlement, Microsoft will change many of its former
business practices and will agree to abide by the stipulations
therein. If Microsoft is willing to accept those terms, the
Department of Justice should be willing to endorse the settlement
and bring the issue to a close.
Our nation is facing profound challenges on several fronts. I
think your department
[[Page 28904]]
and the various states" Attorneys General should settle the
Microsoft case in order to focus on other more pressing issues.
Sincerely,
Darlene Cooke
MTC-00030480
Frederick & Coleen Walther
P.O. Box 30
West Poland, ME 04291-0030
January 25, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I would very much like to see the Microsoft settlement agreement
which, in my opinion is very well conceived, approved by the Court.
It seems to me that the goals set forward were met and that no
antitrust laws are in jeopardy.
From what I understand, Microsoft has agreed to significantly
change the way it conducts business so that its competition has a
level playing field, and it will not take negative actions against
any competitor of Windows. They have also agreed not to enter into
agreements with third parties obligating them to sell Windows
exclusively.
I just can't see why taxpayer dollars would be spent wisely by
litigating this case further. It is time to get on with business and
allow Microsoft to help stimulate the economy and reward its patient
shareholders like my family. Government actions have already cost
our portfolio far more than we would like!
Thank you for your time and attention.
Sincerely,
Frederick & Coleen Walther
MTC-00030481
Helga Gardetto
475 Windridge Drive
Racine, WI 53402-2658
January 21, 2002
Attorney General John Ashcroft
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I would like to propose finalization of the agreed settlement
deal with Microsoft and the government. I don't think a company
should be held down in its attempt to prosper, and this lawsuit has
over-stepped any reasonable bounds of dealing with the free market.
The settlement proposed offers several steps to allow more
competition. Microsoft will not require computer companies to use
Microsoft software, and will allow competitors unheard-of access to
Microsoft's proprietary technologies. This deal should be appear
quite accommodating to the company's opponents, as it will be
monitored regularly by industry experts. Meanwhile, I'm sure that a
break-up would not offer such favorable cooperation and results for
those groups.
Please move forward with this settlement and allow the PC
industry to be stable and successful in the coming years ahead.
Thank you for your time.
Sincerely,
Helga Gardetto
MTC-00030482
12938 Kingsbridge Lane
Houston, TX 77077
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing you today to express my opinion in regards to
Microsoft and the antitrust dispute I support Microsoft in this
dispute, and I believe this litigation is costly and a burden on
taxpayers and consumers I support the settlement that was reached in
November as an adequate means to end this dispute.
Microsoft has agreed to carry out all provisions of this
agreement and will be monitored for compliance. Under this
agreement, Microsoft must license its Windows operating system
products to the 20 largest computer makers on identical terms and
conditions, including price. Microsoft has also agreed to disclose
various interfaces that are internal to Windows" operating
system products, which is a first in an antitrust settlement.
Microsoft did not get off easy in this settlement.
This settlement not only keeps Microsoft together as a company
but will also foster competition. Continuing this litigation will
only have adverse effects on consumers and the economy Please
support this settlement so our precious resources can be devoted to
more pressing issues. Thank you for your support.
Sincerely.
Amanda Quam
MTC-00030483
12938 Kingsbridge Lane
Houston, TX 77077
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing you today to express my opinion in regards to
Microsoft and the antitrust dispute I support Microsoft in this
dispute, and I believe this litigation is costly and a burden on
taxpayers and consumers I support the settlement that was reached in
November as an adequate means to end this dispute.
Microsoft has agreed to carry out all provisions of this
agreement and will be monitored for compliance. Under this
agreement, Microsoft must license its Windows operating system
products to the 20 largest computer makers on identical terms and
conditions, including price. Microsoft has also agreed to disclose
various interfaces that are internal to Windows" operating
system products, which is a first in an antitrust settlement.
Microsoft did not get off easy in this settlement.
This settlement not only keeps Microsoft together as a company
but will also foster competition. Continuing this litigation will
only have adverse effects on consumers and the economy Please
support this settlement so our precious resources can be devoted to
more pressing issues. Thank you for your support.
Sincerely.
Amanda Quam
MTC-00030484
6585 South Military Trail
Lake Worth, Florida 33463
(561) 968-1111
Fax (561) 968-1804
FAX
COVER PAGE
DATE 1-26-02
TO ATTORNEY GENERAL JOHN ASHCROFT
FAX # 1-202-616-9937
PHONE 1-202-307-1454
FROM: JERRY DOSER
UMBER OF PAGES INLCUDING COVER 2
ORIGINALS TO FOLLOW: NO ?? YES
MESSAGE: COMMENTS REGARDING MICROSOFT SETTLEMENT.
3855 Jonathans Way
Boynton Beach, Florida 33436
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
The intent of this letter is to go on public record and express
my support for the settlement that was reached in the antitrust
lawsuit between Microsoft and the Department of Justice. The
settlement was reached on November 2, 2001, and I was relieved to
see that the suit had finally come to an end.
There are still individual states that are continuing with
litigation against Microsoft, and I hope that will soon come to an
end, but I am happy to see that it has been settled at the federal
level. Hopefully the remaining states will see that they are wasting
funds that could be used for so many other more important issues.
Microsoft had to concede more than they would have initially liked,
but settling the dispute and getting back to business was more
important. Microsoft will be monitored by an ongoing technical
oversight committee, so. they will have to abide by the terms of the
settlement. I am glad to see that two sides come to an agreement,
and I fully support the settlement.
Sincerely,
Jerry Doser
cc: Representative Robert Wexler
MTC-00030485
Henry M. Gubitosi
13 Easton Street
Cantonment, FL 32533-6559
January 24, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
For the past three years, the people who depend on Microsoft's
products everyday have waited for a settlement to be reached in this
antitrust suit. Now it seems that the end is in sight. I hope that
this settlement goes forward so that this case can finally be put to
rest.
Microsoft is willing to give up a lot in order to reach a
settlement and I for one hope they do. Out of the many elements that
[[Page 28905]]
Microsoft is willing to forfeit, one of the most overlooked is the
right they're giving to computer manufacturers. By giving them the
freedom to configure Windows with whatever applications they choose,
Microsoft is ceding significant portions of its market share.
Microsoft has also agreed to provide a uniform price list to them.
I hope that people will spend the time to go over the
settlement, to see exactly what Microsoft is forgoing in order to
put this case to rest. The settlement should be acceptable to
everyone but the most ardent Microsoft opponents. I hope that it
will be finalized soon so that everyone can just move on.
Sincerely,
Henry Gubitosi
cc: Representative Jefferson Miller
MTC-00030486
Cathy Bason
125 Phillips Rd
Longville LA 70652
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
Please allow this letter to serve as my vote of support for the
settlement agreement that was reached in the Microsoft antitrust
case.
Under this agreement, Microsoft will be making changes in its
pricing structures, distribution agreements and Windows systems
configuration in an effort to promote increased competition and
greater consumer choice. It is in the public's best interests to
enforce this agreement and end this case.
Thank you for considering my opinion.
Sincerely,
Cathy Bason
125 Phillips Rd
Longville, LA 70652
MTC-00030487
1200 Harger Road Suite 521
Oak Brook, IL 60523
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am taking this moment to write you concerning the current
settlement between the US Federal government and Microsoft. I feel
it necessary to voice my opinion during this period of public
comment, after all, it is people like myself, the American consumer,
that are suffering throughout this overdrawn litigation.
The current settlement plan is, in my view, a fair and just
compromise and the federal government should remove itself from the
corporation's future business tactics. Microsoft has only made the
face of technology easier for America, not to mention the whole
world, and thanks to Microsoft, America has continued to be one of
the leaders in the global economy. Please take into consideration my
opinion as an active member of my community and an American consumer
who wants to see Microsoft back in the business of innovation.
Sincerely,
Anthony De Paul
cc: Representative Henry Hyde
MTC-00030488
Bob Jones Tax Service
3333 Brea Canyon Rd. Suite 201
Diamond Bar, CA 91765
January 17, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Attorney General Ashcroft:
I would like to convey to you my support for the settlement
reached between Microsoft and the Department of Justice. This
settlement ends an expensive court battle and will facilitate the
American technology industry in its efforts to once again flourish.
This unprecedented settlement will create more openness in the
technology sector. The settlement gives competitors more access to
Microsoft's product information and code than any other company has
ever had to disclose in the history of the technology industry. More
expensive courtroom battles and conflict will serve only to increase
the legal bills of the government and Microsoft. Microsoft has
agreed to more terms in the settlement than were actually at issue
in the lawsuit to facilitate a reasonable conclusion to the suit.
Undoubtedly this settlement's time has come. No further Federal
action is required in this case. Microsoft and the DOJ should
finalize the settlement and help to focus the high tech sector of
our economy on technology and not lawyers.
Sincerely,
Robert Jones
Bob Jones Tax Service
MTC-00030489
Tim L. Long
January 24, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
The basis of the Microsoft lawsuit has been weak from the start,
a failed attempt to shake Microsoft through negative media attention
and distraction. Microsoft has been hog tied by fresh legal
complaints answering each advance they have made since the original
suit. I fail to see how Microsoft is more corrupt than any other of
the litigating parties, as opposition has blatantly used the courts
to stall Microsoft in hopes of their own gain.
The lawsuit against Microsoft may have originated with
legitimate concerns regarding modern day antitrust issues, but has
digressed to a manipulation of the courts by misguided ambition.
Enough resources have been wasted on this debacle. The proposed
settlement should be an acceptable solution for all After all,
Microsoft's competition has already won more than three years worth
of media battles and scrutiny throughout the trial.
Sincerely,
Tim L. Long
1830--2nd Street SW
Cedar Rapids, Iowa 52404
MTC-00030490
Gary A. Bean
January 24, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
Thank you so much for considering comments from the consumer in
your deliberation of the Microsoft antitrust suit. What may have
begun as a test of modem day antitrust law has become a corrupt
forum for corporate lobbyists. It seems as though this suit has gone
strangely awry, focusing on corporate influence and loopholes rather
than law.
The speed of advancement in the tech sector today is scarcely
confinable by current antitrust law. Microsoft's competition may
have gained better results at challenging antiquated antitrust law
rather than Microsoft's specific business practices.
The abuse of corporate power in this case certainly dispels any
merited changes to current law. Paradoxically, the competition
hemmed themselves in to more government scrutiny rather than gaming
a leg up on Microsoft.
Quiet, prompt settlement is the most graceful exit from such
poorly intentioned litigation.
Sincerely,
Gary A. Bean
6016 Sharon Lane NW ??
Cedar Rapids, Iowa 52405
MTC-00030491
Samantha West Gudheim
137 \1/2\ West ?? Street
Manch??, New Hampshire 03101
January 23, 2002
Renata Hesse
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Attorney Hesse:
I am aware of a period of public comment in the case of the U.S
.and Microsoft is now open and will be until January 27, 2002. I
would like to express my support of the settlement that has been
reached.
I understand that these settlements are difficult to reach.
Knowing how much time and effort goes into these cases I believe
that no more time should be spent on this case. Further litigation
in the Microsoft case will only keep government lawyers and staff
from more meaningful business. The government now needs to focus on
other more pressing national matters. Needless to say, too much
money has already been spent.
Microsoft lawyers and staff should also be allowed to
concentrate on the business of technology. They should be allowed to
continue to be a progressive and productive company. As such,
Microsoft will contribute to the economy and the computer industry.
At a time when many companies are failing the government should be
encouraging all
[[Page 28906]]
companies, especially large and productive ones, to continue to
grow--not restrict or regulate them needlessly.
Thank you for your consideration and for your service in the
United States government.
Sincerely,
Samantha Gudheim
MTC-00030492
Fax Cover Sheet
copyworks??
OPEN 24 HOURS
Date: 1-26-02
Number of Pages (including Cover): 2
Fax Directed To: Department of Justice
Sent By: ??
Fax Number: 202 616 9937
Fax Number:
Phone Number:
Phone Number:
Company:
Message:
?? AMES ?? AUBURN ?? CEDAR FALLS ?? CEDAR RAPIDS ?? CORALVILLE ??
DUBUQUE ?? LINCOLN 105 Welch Ave. 212 West Magnolia St. 2227 College
Street 4837 1st Ave. SE 309 2rid St. 136 Wacker Plaza 1320 Q St.
Ames, IA 50014 Aubum, AL Cedar Falls, IA 50613 Cedar Rapids, IA
52402 Coralville, IA 52241 Dubuque, IA 52002 Lincoln, NE Ph: (515)
292-3630 Ph: (334) 826-3555 Ph: (319) 266-2306 Ph:
(319) 373-5335 Ph: (319) 338-5050 Ph: (319)
557-2679 Ph: (402) 477-7400 FAX: (515) 292-5011
FAX: (334) b26-3553 FAX: (319) 266-5422 FAX: (319)
373-5436 FAX: (319) 338-1717 FAX: (319) 557-2004
FAX: (402) 477-8966
Patricia E. Masteller
345 Marion Boulevard
Apartment # 112
Marrow, Iowa 52302
January 24, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
American consumers have been bilked out of tens of millions of
dollars enduring prolonged litigation in the Microsoft antitrust
case. And their own attorneys general and the very companies trying
to woo their business have done the bilking.
Microsoft's competitors would tell like they are the proverbial
"David" to Microsoft's "Goliath", but
several of these companies have grown and merged to monolithic
conglomerates themselves. In the biblical story, it is David who
threw stones, and Microsoft's competitors have fervently done so,
encouraging media frenzy through bitter accusations and editorial
campaigns. Somehow excusing their own anti-competitive behaviors,
competition has rabidly sought to achieve through the courts what
they haven't been able to in the marketplace.
This shameful abuse &our judicial system should not be
tolerated. I understand this highly publicized case has come to you
through a questionable course of litigation. I am confident that
prompt settlement ends this tragic scene of corporate manipulation,
and I hope you'll agree.
Sincerely,
Patricia E. Masteller
MTC-00030493
WHITE & JOHNSON, P.C.
ATTORNEYS AND COUNSELDRS AT LAW
January 21, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW. Suite 1200
Washington, DC 20510
Dear Ms. Hesse:
The settlement proposed in the Microsoft antitrust case deserves
strong consideration. The independent Technical Committee set out in
the proposal provides an enforcement device. If compliance
backsliding by Microsoft should occur, the committee would be
engaged ?? the cost of Microsoft.
End users would receive the kind of continued flexibility that
we have already seen in the release of their new Windows XP
operating system guaranteeing consumers the freedom to select
applications from competitor providers with ease.
Information technology consumers of Microsoft's operating system
would have access to technical specifications of Windows that
actually makes it easier for its competitors to provide compatible
applications to be used on computers and with servers of Microsoft's
operating system.
Although shor?? of breaking apart the company, there are also
fair provisions set forth in this settlement that would punish the
company for the sections of which they have been found guilty.
I trust you will give this settlement offer sufficient
deliberation.
Thank you
Brent Cl??son
MTC-00030494
The ?? Comm?? Massachasetts ??
FRANCIS L. MARINI ??NTATIVE
MINORITY LRABER ??
ROOM 124
TEL: (617) 722-2100
FAX: (617) 722-2300 ??
January 24, 2002
Ms. Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Dear Ms. Hesse,
There is a growing sentiment among economists that we are
finally seeing the light at the and of the tunnel of our nation's
recession. The markets are improving, and the economic forecast is
generally positive. However, state revenues are down and most states
will have to consider tough outs on spending in coming budgets.
In Massachusetts, we have witnessed a shrinking state revenue
base mostly caused by the recession. Many growth opportunities were
squandered in the 1990s, and now, in ?? of trading on our
accomplishments, we are ?? over what might have been.
On thing that can be done to aid states" economies is to
end the Microsoft lawsuit. We are writing in support of the nine
states and the Department of Justice's settlement agreement. It is a
fair and reasonable agreement which brings a satisfactory conclusion
to this long-running anti-trust case. As the old saying goes, a
rising tide floats all boats. And just as a rising tide will float a
boat sitting at the lowest point first, so the resolution of this
case will help those who have the farthest to rise first.
The technology-driven "innovation economy" has
created tremendous opportunities for the citizens of the
Commonwealth. But we must act now to take some of the uncertainty
out of the economy. We urge you to endorse this settlement
agreement, which would provide states greater confidence in fiscal
planning and would allow entrepreneurs and businesses to get back to
the business of creating new and better products for consumers.
Sincerely,
Fra?? L. M??ini
Minority Leader
Georg?? Peterson, Jr.
Minority Whip
Bradley ?? Jon?? Jr.
Assistant Min?? Leader
Mary S. Rogeness
Assistant Minority Whip
MTC-00030495
HOUSE OF REPRESENTATIVES
2 STATE HOUSE STATION
AUGUSTA, MAINE 04333-0002
(207) 287-1400
TTY: (207) 287-4469
Roger L. Sherman
P.O. Box 682
Houlton, ME 04730
Telephone: (207) 532-7073
E-Mail: reproger??man@??
E-Mail Home: [email protected]
Renate Hesse
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
I am a ??red teacher and current legislator I am writing to
express my support for the proposed settlement reached with
Microsoft, by the Department of Justice and nine of the States
involved. In reviewing the settlement I see several benefits
particularly for our schools.
The opportunity to provide funding for critically need training
of educators and staff. Hardware and software, available for use on
multiple operating systems, and for the critical resources needed to
acquire hardware for financially strapped schools across the nation.
Microsoft has been put on notice they need to change their
business practices, and has agreed to do so. The Federal and State
Governments have exercised their rightful authority in protecting
the public interests, have reached a reasonable solution.
Now is the time to show the public that we are being responsible
and ??nd the long drawn out legal process. We must be responsible
with the resources of the people with which the government has been
entrusted. It is time to restore faith in our legal system by
showing that we know when to end the seemingly endless stream of
[[Page 28907]]
litigation. Thank you for consideration of my comments and for all
you do.
Sincerely,
Roge?? L. Sherman
State Representative
MTC-00030496
Saturday, January 26, 2000 11:30 AM
To:
From: Dave Poage
Sharla S. Poage
9390 264th Road
Arkansas City, KS 67005
Judge Kolar Kottely
Attn.: Ranata Hesse, Antitrust Division Public Comment
U.S. Department of Justice
601 D Street, NW, Suite 1200
Washington, DC 20530
Dear Judge Kottely,
Since the Clinton years the federal government and several
states have been pursuing on anti-trust case against Microsoft which
has been one of our country's leading producers of innovative
technology. It appears that we are now faced with an opportunity to
clear our courts of this case for good. I am hopeful that those in
charge will cease this opportunity.
While I am not directly involved with the technology industry
and am not a legal scholar, I am a consumer and taxpayer that
follows current events very closely. When this case was first
brought I was disappointed to learn that my own Attorney General,
Carla Stovall, was dragging Kansas into this litigation. It is my
belief this case should have never been brought in the first place
because it serves no public good.
The theory under which this case was brought is that Microsoft
was harming the consumers of their product and had established a
sort of monopoly. I do not believe this theory has been borne out
with substantial evidence.
What I see is a company that has put products on the market that
are appreciated and purchased by consumers. Because of Microsoft's
ability to provide customers with products they want, the company
has experienced tremendous growth. This is not a reason to punish
them! Rather, it is more proof that our system of free enterprise
and competition works.
Companies like Microsoft that succeed through supplying
innovative and highly demanded goods to consumers should be
celebrated not torn down. It is just these types of companies that
help stimulate our economy by encouraging consumer confidence,
creating jobs, and growing their industry. When the government steps
in to flex its regulatory muscle real harm is done. Again, the
settlement on the table provides those in charge with an opportunity
to end a case that has been harmful to the public good. I urge you
to take that opportunity and give your approval to the settlement.
Thank you,
Sharla S. Poage
MTC-00030497
January 25, 2002
Renata Hesse, Trial Attorney
Antitrust Division, Department of Justice
601 D Street NW, Ste. 1200
Washington, DC 20530
VIA FACSIMILE (202) 616-9937
Dear Ms. Hesse:
One of the reasons the American economy is in such a weakened
state is the flaws in our system. Specifically, special interests
have too much power in Washington DC. The Microsoft case is a
perfect example.
Microsoft's competitors don't want to compete against Microsoft
in the marketplace, They spend their money on politicians rather
than research and development--next thing you
know--Microsoft is facing antitrust investigation.
US v. Microsoft has been competitor driven since the day it
began. Those opposed to the settlement are still promoting their
self interest over the interests of the rest of the country.
Sincerely,
Pete Whittet
MTC-00030498
Jan 26 02 11:25a
John J. DiPietro
ABC/D ADVANCED BUSINESS CONCEPTS/DiPIETRO
Marketing Strategies.Advertising.Public Relations.Speaking.Training
January 25, 2002
Renata Hesse
Trial Attorney
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
VIA FAX: 202-616-9937
To Whom It May Concern:
It is my understanding that the Justice Department is seeking
input, regarding the proposed settlement in the Microsoft lawsuit.
As a small business owner, I understand competition and know
that it is healthy for our economy. I use Microsoft products daily
in my business and they have been a great help to me. They have
allowed me to better serve my customers clients, to manage our
business and to actually expand. Given the state of our economy
right now, we should do everything possible to spur growth, not
hinder it.
There has been no consumer harm as a result of any actions taken
by Microsoft. Microsoft's innovations have, in fact, have helped
many small businesses like mine grow.
It is also my understanding that an additional benefit to
settling the suit is the proposal to donate about 200,000 computers
to the public schools. It think this is a great idea. We need
workers who are computer literate.
I would suggest that we end this action and approve the
settlement.
Sincerely yours,
John J. DiPietro
Managing Partner
672 Main Street.Holden, Massachusetts 01520.Tel: (508)
829-9949.FAX" (508) 829-9959.e-mail:
[email protected]
VISIT US ON THE INTERNET AT www.joindipietro.com
MTC-00030499
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am pleased that a settlement has been proposed to Microsoft by
the U.S. Department of Justice. This settlement is long overdue. I
understand that we are currently in a sixty-day period for comments
on what is in the best interest of the public. In light of this, I
am taking this opportunity to express my views on the matter.
Microsoft opponents persistently seek to give the impression
that Microsoft has gotten away with easy terms. I beg to differ! If
the millions of dollars that they had to spend in their defense is
no indication the very opposite is true, then look at all the
concessions they have agreed to make. For example, Microsoft has
agreed to grant their competitors licensure to their intellectual
property. Competitors will now also have the assurance of
interoperability within the Windows environment because Microsoft
has agreed to disclose Windows protocols. Future versions of Windows
will also allow users and computer makers to reconfigure Windows to
remove potions of the operating system and substitute competing
alternatives.
In my estimation, Microsoft obvious willingness to cooperate
with these terms should be enough to abate the concerns of the
dissatisfied states. hope that your decision will bring this matter
well-needed closure.
Sincerely,
Frank Lempert
31600 S.W. Arbor Glen Loop ?? Wilsonville, Oregon 97070
MTC-00030500
01/26/2002 21:55
508-435-7788
VERNE KAMINSKI
Verne Kaminski
185 West Main Street
Hopkinton, MA 01748
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I want to take a moment to express my support for the settlement
that was reached between Microsoft and the Department of Justice in
November. I believe it is time to move forward and stop this
unnecessary litigation.
I believe Microsoft has agreed to many tough concessions to
reach this agreement. One such concession is that Microsoft has
agreed to grant computer makers broad new rights to configure
Windows. This should satisfy those consumers who felt they were
locked into only using Microsoft products as it allows them to buy
competing products if they so desire.
This agreement will allow Microsoft to return their focus solely
to producing the next generation of innovations. Microsoft can turn
its attention to the competitive environment instead of the legal
environment. I hope your support of this consumer-friendly
settlement will continue. Let's remember that this country was
founded on competitive ideas.
[[Page 28908]]
Sincerely,
Verne Kaminski
MTC-00030501
2684 Taft Court
Denver, CO 80215
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I express my fullest support regarding the Microsoft settlement.
This settlement should bring any pending issues against Microsoft to
closure. Microsoft did not deserve to go through such a long
litigation.
The terms in the settlement are very beneficial to software
developers. As a writer of database programs in the chemical
engineering field I have personally enjoyed using Microsoft
programs. The only real concern Z have is the recent allegations
from AOL/TIME Warner (Netscape) about the Internet web browsers. I
am confident the U.S. Government will try and resolve their issues.
Overall, the settlement should reap big benefits for businesses and
individual consumers.
Because it allows computer-makers the flexibility to configure
Windows as well as the ability to promote non-Microsoft software
programs that compete with programs included within Windows.
Sincerely,
Stephen Erickson
MTC-00030502
Don G. Baker
3725 Lucy Trimble Road
Burleson, TX 76028
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing you today to inform you of my position in regards
to the Microsoft antitrust dispute. I fully support Microsoft and
the settlement that was reached in November, and I am anxiously
waiting for an end to this dispute.
The settlement that was reached in November is fair and
reasonable. Microsoft has agreed to all provisions, including
provisions that extend well beyond the products and procedures that
were actually at issue in the suit, for the sake of wrapping up the
suit, Microsoft is willing to license its Windows operating system
products to the 20 largest computer makers on identical terms and
conditions, including price. Microsoft has also agreed to design
future versions of Windows, beginning with an interim release of
Windows XP, to provide a mechanism to make it easy for computer
makers, consumers, and software developers to promote non- Microsoft
software within Windows.
This settlement will serve in the best public interest. I
strongly urge you to support this settlement so consumers and the
economy can feel the positive effects of allowing Microsoft to get
back to business as usual. Thank you for your support.
I actually believe Microsoft did no wrong.
Sincerely,
MTC-00030503
59 Laurel Avenue
West orange, HJ 07052
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
We would like to use this opportunity of public comment to give
our support for the settlement reached between Microsoft and the
Department of Justice. The settlement is good for our country and
gives each side the chance to move forward.
The terms of the settlement are comprehensive and mandate many
changes in Microsoft's past business practices. For example,
Microsoft has agreed to grant computer makers broad new rights to
configure Windows so as to promote non-Microsoft software programs
that compete with programs included within Windows. This gives
computer makers the ability to replace access to features of Windows
with access to non-Microsoft so--re such as programs from AOL
Time Warner. Finally, the agreement calls for the creation of
Technical Committee to supervise Microsoft's compliance with their
responsibilities.
This case has gone on for too long and neither side wins with
continued litigation. The settlement gives Microsoft the opportunity
to focus on innovation while the federal government can focus
dwindling resources on stimulating the economy.
Sincerely,
MTC-00030504
January 21, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I cannot see how a case was ever brought against Microsoft in
the first place. They are not a monopoly; they simply make the
product that most people enjoy. That's why I was so pleased when a
settlement has finally reached in November.
I was sorry, however, that Microsoft had to give up so much in
order for the Justice Department to agree to end its suit. Microsoft
is being asked to hand over software, that it has taken time and
hard work to create, to its competitors for free. They even have to
make sure that subsequent versions of Windows are more geared toward
non-Microsoft products.
I feel that while this is all a bit extreme, it would be worth
it in order to put an end to this case. Both Microsoft and the
Justice Department have more important issues to worry about right
now, and it would be good to have them free to do so.
Sincerely,
MTC-00030505
COVER PAGE
TO:
FAX: 12823871454
FROM: JIM CARLETON
FAX: 7137231403
TEL: 7137293417
COMMENT:
Jim Carleton
6043 Lymbar Drive
Houston, Texas 77096
January 26, 2002
Attorney General John Ashcroft
Department of Justice
950 Pennsylvania Avenue
Washington, DC 20530
Dear Mr. Ashcroft,
It has become apparent that some anti-Microsoft forces are
attempting to derail the settlement that was reached in the
antitrust case this November. It would be very unfortunate if the
case was resumed, and Microsoft was forced to continue wasting time
and money on this case.
A settlement was agreed to by all sides, and approved by a
federal judge. Sadly, forces opposed to the settlement are trying to
interfere and have this case resuscitated. Many want to see
Microsoft face injury in the court because they are unable to
compete with Microsoft in the free market.
It is unfortunate that this opposition exists because the
settlement is beneficial to all, including Microsoft's rivals. The
settlement give non-Microsoft companies the ability to view and use
Microsoft code to create better software. It also will make it very
simple for non-Microsoft software to be placed on Microsoft
operating systems. Undoubtedly, it is time to conclude this case,
and promote competition in the market, not the courts.
Sincerely,
Jim Carleton
Cc: Rep. Tom DeLay
MTC-00030506
53 Arrowhead Road
Duxbury. MA 02332-5035
January 25,2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Attorney General Ashcroft:
I am writing to give my support to the recent settlement between
the Department of Justice and Microsoft The proposed agreement was a
long time coming, and we are only' days away from the end of the
comment period. ! hope that once everything is all said and cone,
the settlement is approved and implemented as soon as possible.
It is time to move on The Department of Justice has accomplished
its goal of making Microsoft. technology more accessible to
competing companies Microsoft has agreed to a number of changes
opening up its codes and books to other manufacturers. The Justice
Department has held Microsoft's "feet to the fire" long
enough, and the settlement even goes as far as having a "Big
Brother" feel to it. A three-member committee of software
engineering experts has been assembled and will monitor Microsoft's
compliance to the agreement. Please support the proposed agreement
between the Department of Justice and Microsoft as I do, and approve
it with haste Thank you.
Sincerely,
David Delory
[[Page 28909]]
co: Representative William Delanunt
MTC-00030507
Darryl LaRocque
P.O. Box 2772
Big Bear City, CA 92314
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I have been following the Microsoft antitrust case in the
federal courts since its inception three years ago. Last November, a
settlement was proposed, and it is curtly pending approval. This
bodes well for the economy, which has been steadily declining since
the case began.
Unfortunately, Microsoft's opponents are not happy that
Microsoft will emerge intact in this settlement, and are striving
both to undermine agreement of the settlement and to bring
additional litigation against Microsoft.
Further litigation will serve no one. Microsoft has agreed to
make the necessary adjustments in policy and product to prevent
further antitrust violations; no further action is necessary. The
settlement reached late last year is fair both to Microsoft and its
competitors. Microsoft will be allowed to retain control over the
bulk of its operations, but will be required to restrict some other
practices deemed monopolistic and alter certain products in order to
facilitate fair competition.
For example, Microsoft has agreed not to retaliate if software
is introduced into the market that directly competes with Microsoft
software. Microsoft also plans to allow computer makers broad fights
to reconfigure Windows to their own specifications using non-
Microsoft software, and enable them to do so by reformatting
upcoming versions of Windows in order to support non-Microsoft
programs.
I believe the settlement is fair and that no additional measures
need to be taken against Microsoft on the federal level. I urge you
to support finalization of the settlement.
Sincerely,
Darryl LaRocque
MTC-00030509
Constance Reynolds Lewis
1611 Ninth Street
Lake Charles, LA 70601
FAX COVER SHEET
Date: 1-26-02
Time:
To:
Phone:
Fax: 1-V02-Z07-1454
From:
Phone:(337) 439-4245
Fax: (337) 439-4245
RE: MICROSOFT
Number of pages including cover sheet: 2
Message:
Jie:
I do not believe Hat the government has ANY ?? ?? to ??
Microsoft ?? the posilion?? ?? ?? it has
EARNE?? ??
ROBERT M & LET. RUDE
21301 8th Place W
Lynnwood, WA 98036
January 25, 2002
Attorney General John Ashcroft
U.S. Department o� Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
We have taken this opportunity to write in and express our
opinion of the antitrust suit against the Microsoft Corporation. We
feel that this suit has been bogged down in the judicial system for
long enough and it is time for the government to allow Microsoft to
get back to work. It needs to continue setting the standard in the
worldwide technology industry.
It is our opinion that this suit has pulled the American economy
down, especially in the vital IT sector. The bottom line is,
Microsoft is one of this nation's largest employers, and the
perpetuation of this case during these times of economic uncertainty
is imprudent. Microsoft is and always has been a great company. They
have given millions of dollars to charity and have changed the way
we view computers forever. Microsoft made technology accessible to
Americans in a form that was usable. Without this company, there
would have been no "P.C. revolution." We believe that
the terms of this settlement will ensure that there are no further
violations of antitrust committed by the company, especially with
the establishment of a technical committee which will monitor
Microsoft and prevent them front any future violations.
We are please that an end to this litigation is in sight. Please
continue to support the settlement and the future of free enterprise
in this nation.
Sincerely,
Robert Rude
Lc Rude
MTC-00030510
Jerry Stork
6528 Volley Stream Way
* Cumming, GA 30040
Cell Phone 770.329.3794
* Answering Machine 770.475.0922*
Home phone 770.475.1225
* Fax 770.664.1404*
E-mail jrsdll @ bellsouth.net
Saturday, January 26. 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
Please do whatever you can to help expedite a settlement of the
Microsoft anti-trust case. This nearly four-year-old case has
produced little, but controversy. There is now, as you know, a
settlement agreement that has been preliminarily accepted by the
major parties and the court. This agreement fairly balances the
concerns of the parties and offers a fair solution to the dispute.
In return for retaining its corporate integrity, Microsoft has
agreed to adopt certain practices, which will render it more
vulnerable to its competitors. It has, in fact, agreed to help raise
its competitors to its own level of play. For example, Microsoft
will now invite competition by configuring its Windows platforms to
easily incorporate non-Windows software. Microsoft will now offer
computer manufacturers licensing agreements without a condition of
Windows software exclusivity. Microsoft has even promised to
disclose to competitors certain internal Windows interfaces. In
other words, Microsoft has agreed to encourage the industry to catch
up with itself.
These concessions and this change in philosophy will inure to
the benefit of the industry and the public. Please support this
settlement.
Sincerely,
Jerry Stark
Teleflex Fluid Systems,
One Firestone Drive, Suffield, CT 06078
1-800-225-9077 or
1-860-668-1285
Fax 1-860-666-2353
www.teleflexhose.com
MTC-00030511
350 S Clinton Street Apt. 9A
Denver, CO 80231
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing today to encourage the Department of Justice to
accept the Microsoft antitrust settlement. A settlement is available
and the terms are fair, Microsoft has agreed to a wide rang of
concession in order to settle. I would like to see the government
accept the settlement and allow Microsoft and the industry to move
on.
Many people think that Microsoft has gotten off easy, in fact
they have not. The settlement was arrived at after extensive
negotiations with a court-appointed mediator. Microsoft has agreed
to terms that extend well beyond the products and procedures that
were actually at issue in the suit. To make sure that Microsoft
complies with the settlement a technical committee will be set up to
monitor Microsoft's compliance. The settlement that was reached is
fair and it is guaranteed to be followed.
Microsoft and the industry need to move forward, and in order to
move forward this issue needs to be put in the past. Please accept
the Microsoft antitrust settlement.
Sincerely,
MTC-00030512
Justice Department:
Three years of litigation is enough. Dragging out this legal
battle further will only benefit a few.
The aggressive lobbying campaign to undermine the settlement is
only serving to line the pockets of wealthy competitors, lawyers and
special interest bigwigs. Not one new product that helps consumers
will be brought to the marketplace.
I strongly urge the U.S. Department of Justice to end this
wasteful investigation. The proposed settlement offers a reasonable
compromise. It is time to move on with the agreed settlement
negotiated and allow businesses who wish to compete to compe??.
Those who can't muster up the competitive edge need to either merge
or get out of the business arena
[[Page 28910]]
Sincerely
Ben Jones
E-mail
MTC-00030513
Complimentary Fax Cover Sheet
To:
From:
Fax #
Phone #
Date: Urgent
Confidential Confirm Receipt
Number of Pages: (Including Cover)
Reply Fax #:
Message:
Dorothy Klughers
30 John Lane
Levittown, NY 11756-1905
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am in favor of the Microsoft antitrust settlement agreement.
The terms of the settlement agreement are more than fair. I urge the
court to approve the agreement. Among other things, Microsoft has
agreed to grant computer makers many new rights. The manufacturers
will be able to remove various features of Windows. such as
Microsoft's web browser. Internet Explorer, and replace them with
browsers made by Microsoft's competitors. This will result in giving
consumers more choice when it comes to software they purchase.
Microsoft has also agreed not to take retaliatory action against
those who promote or develop software that competes with Windows.
The settlement agreement will help level the playing field among
the software companies. Litigating this case further will not prove
to be as beneficial to consumers as this agreement will be.
Sincerely,
Dorothy Klughers
MTC-00030514
16 Charles River Road
Medway, MA 02053
January 18, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to strongly urge you to support the current
settlement between Microsoft and the Department of Justice. I firmly
believe that there should be no further action against Microsoft
regarding the proposed negotiated settlement A/though the litigation
should have never brought forth several yearn ago, this current
settlement is the result of a fair, judicious and reasonable process
that should be respected.
This settlement is unique in that it has the necessary
enforcement powers to ensure that the terms of the agreement are
abided by. The agreement contains a provision that allows private
companies such as SUN Microsystems, Apple and IBM to sue Microsoft
should the company not follow the terms of the settlement.
Additionally, the agreement requires Microsoft to submit to a
government technical oversight committee and to change their
business, licensing and marketing practices to foster greater
competition. This settlement signals the end of a long and drawn out
process and should be respected.
With all that is going on in the world, a faltering economy, and
more significant national priorities I hope that you will help
support this settlement in its current state. It is a shame that a
company like Microsoft who builds a superior product and is a major
contributor to the economy would be consistently hounded by a
government that is supposed to support free enterprise.
Sincerely,
Allen Sisson
MTC-00030515
DANIEL HICKY GRANT, Ed.D.
Board Certified Forensic Examiner, Fellow of the American College of
Forensic Examiners, Diplomate of the American Board of Psychological
Specialties--American College of Forensic Examiners
Board Certified Expert in Traumatic Stress
Diplomate, American Academy of Experts in Traumatic Stress
Board Certified Neuropsychologist--The Americana Board of
Professional Neuropsychology
Diplomate in Pain Management--American Academy of Pain
Management
Licensed Psychologist--Georgia License # 859
Post Office Box 1359
Richmond Hill
Georgia 31324
912-727-3158
danielgrant @ msn.com
899 Mill Hill
Landing Road
Richmond Hill, GA 31324-4625
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Fax #: 202 307 1454
January 25, 2002
Dear Mr. Ashcroft:
I am in support of Microsoft and its right to practice ethical
business in a free market economy. I am also in support of the
proposed antitrust settlement between them and the Department of
Justice. I believe this is a fair resolution to this lawsuit,
Microsoft is disclosing much of the features that give it a
competitive edge. This includes disclosure of interfaces that are
internal to Windows" operating system, and allowing software
developers to develop competitive software. The release of this
information should be enough to satisfy the government.
I urge you to support this settlement and conclude this case. I
would feel more comfortable with the Government focusing its efforts
on pursuing more suspicious and illegal companies.
Thank you.
MTC-00030516
Don & Arlene Fenno
1124 S. Ave. B
Washington, IA 52353
(319) 653-2365
534 Princeton Greens Ct.
Sun City Center, FL 33573
(813) 634-5494
Justice Department
Re: Microsoft Settlement.
We believe that the Federal court settlement was very adequate.
Any further harassment could damage our inventive spirit and curb
new efforts when we need them most. States should stop now.
Don & Arlene Fenno
MTC-00030517
Attention: Concerning comments about Microsoft Litigation
Microsoft has gone thru enough. The settlement the federal
government came up with should be enacted. We can thank Microsoft
for a lot of the Standands enjoyed today to computing and the
internet.
X-president Clinton should have been going after Bin Laden and
not Bill Gates.
Thanks,
Mike Stuart
P.S.
Would you mail or E-mail me a schedule of upcoming topics and
issues for ocmment by the
DOJ.
mikesutart @ coastalnet.com
1104 Karen Dr. A-6
New Bern, NC
28562
Thanks
MTC-00030518
10831 Valmay Avenue NW
Seattle, WA 98177-5336
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing today to encourage the Department of Justice to
accept the Microsoft antitrust settlement. It disappoints me that
the government has in the past chosen to harass a company like
Microsoft. Microsoft has added such a great economic contribution to
this country. The contribution extends from Washington State all the
way to Washington, DC Microsoft is a core holding of most company
retirement plans, 401Ks, IRAs and mutual funds throughout America
Therefore it is in the best interests of almost every American to
get this case settled.
In order to settle this issue Microsoft has agreed to many
terms. It has agreed to design future versions of Windows to be more
compatible with non-Microsoft soft-ware. It has also agreed to
change several aspects of the way it does business with computer
makers. Microsoft did not get off easy, there are pages of terms
agreed to in addition to these two.
Microsoft needs to be able to get back to business. This suit
has bogged down the company for over three years now. For the good
of American's everywhere ! urge you to accept the Microsoft
antitrust settlement
Respectfully
J. Bradford Borland
MTC-00030519
7957 2nd Avenue S
[[Page 28911]]
St. Petersburg, FL 33707-1023
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Asberoft:
I am writing in support of the settlement that you have reached
with Microsoft in November. I know that, while not yet finalized,
this settlement brings the promise of an end! to the Microsoft
lawsuit at the federal level.
I hope that everyone will see just how much Microsoft is willing
to sacrifice in order to bring about an end to this settlement. By
offering its proprietary code and the rights that go along with it,
Microsoft is forgoing billions in creative profits. And that
provision is merely a small portion of the overall settlement.
This settlement should be agreeable to everyone and I feel that
the states that refuse to settle are only trying to pad their own
budgets like they did with the tobacco companies. But this time,
they are attacking a company that is vital to the average American
and the economy. Hopefully, with this settlement finalized, they
will fall in line with the rest of America.
Sincerely,
Jim Engel
MTC-00030520
3115 Lafayette Street
Houston, TX 77005
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I would like to point out some of my views regarding the
Microsoft antitrust case. I do not agree with every decision that
Microsoft has made, but understand that business is business. I feel
that there was merit behind many of the issues that brought about
this case, but that was three years and countless taxpayers"
dollars ago. I feel that the settlement agreement is the best way to
close this case, and ensure that it never reaches the federal level
again.
Although the settlement calls for concessions, Microsoft has
agreed in an effort to end this case sooner rather than later.
Microsoft has agreed to change the way it markets, licenses, and
develops its software, as well as the way it deals with independent
vendors. Microsoft Ins agreed to stop retaliating against those that
promote or design non-Microsoft programs, and computer makers will
be allowed to configure Windows so as to promote those programs.
It appears to me that Microsoft has made the necessary
concessions, and now we must move our focus to the states that are
pursuing further litigation. I fear that since the tobacco
settlements, states have seen corporate lawsuits as additional forms
of state revenue. I hope you are Wing to recognize when states are
using consumer protection as a veil for return on investment. As
long as Microsoft is willing to give up some of its market share and
competitive advantage, there will always be those requesting more. I
hope you will do everything in your power to attempt to close this
case as soon as possible, or we might be back in a few years trying
to protect Microsoft.
Sincerely,
Catherine McNamara
MTC-00030521
29303 NE 11th Street
Carnation, WA 98014
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am very much in favor of the Microsoft antitrust case
settlement agreement. The remedies provided in it are good for
everyone involved, and I would not like to see the case dragged on
through the courts any further.
The terms of the settlement agreement are quite reasonable by
any standards. Once the agreement is approved, Microsoft will be
helping the competition by leveling the playing field in the high-
tech industry. For example, Microsoft has agreed to make it easier
for consumers to run other software programs simultaneously with the
Windows operating system. They also agreed not to retaliate against
retailers that promote software that competes with Windows.
Additionally, Microsoft has agreed to implement a uniform price list
for the top 20 largest computer manufacturers. Microsoft's
competitors should be satisfied with these types of concessions.
I appreciate your efforts toward settling this case. Thank you.
Sincerely,
Ron Beman
MTC-00030522
Benjamin Friedman
* 17846 Beckley
* CircleVilla Park, CA 92861
January 23, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I would like to take a moment to express my opinions regarding
the Microsoft antitrust case. I think I might feel differently about
Microsoft if it had become powerful by malicious intent, but it
achieved its position because it made a better mousetrap and sold it
at the lowest price. I am a supporter and avid user of Microsoft
products, and would like to see this case put behind us. Although
the settlement may reach further than Microsoft may have wished, it
realizes that settling the case sooner, is better than later. In
order to do this, it has agreed to concessions that make antitrust
precedent. Microsoft has granted broad new rights to computer
makers, software engineers, and to consumers. It has allowed them to
configure Windows so as to promote non-Microsoft programs that
compete with the programs already included within. Also, Microsoft
has agreed to document and disclose various interfaces within its
Windows operating system. This boils down to Microsoft opening its
doors to the competition, and allowing them to use its invention to
promote their own competing products. Imagine if Nike put Reebok
logos on its shoes, or if Ford built cars with Toyota engines. It
seems ridiculous when considering products that we are more familiar
with, bat nevertheless, Microsoft has a agreed to these concessions
to speed a conclusion. We should consider the very foundations of
free enterprise and competition and realize that the longer this
case precedes, the greater the risk that we may cause irreparable
damage to the IT industry, and the economy.
Sincerely,
Berjamin Friedman
cc: Representative Christopher Cox
MTC-00030523
January 17, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing you today to express to opinion in regards to the
Microsoft anti- trust dispute. I support Microsoft in this dispute,
and I favor the settlement reached in November. This settlement is
complete and thorough, and I am anxious to see this dispute resolved
permanently. Microsoft has agreed to carry out provisions in this
agreement. such as: designing future versions of Windows to provide
a mechanism to make it easy for computer makers, consumers, and
software developers to promote non- Microsoft software within
Windows. The mechanism will make it easy to add or remove access to
features built into Windows or to non- Microsoft software. Microsel5
has pledged to create more opportunities for competing companies.
"
Microsoft is a company that delivers quality product to the
marketplace. I have used Microsoft's products for years now, and I
hope I will be able to enjoy these products for years to come.
Please do your part to stop litigation against Microsoft. Thank you
for your support.
Sincerely
MTC-00030524
Earl W. Mallick
13 Lands End Way
Hilton Head Island, SC 29928
January 26, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear General Ashcroft:
I am writing, as a long time admirer of yours as well as a small
shareholder in Microsoft, to voice my support for the federal
settlement with Microsoft. I believe that Microsoft has earned a
position of leadership in the technology sector through its focus on
excellence. It has consistently and continually provided its
customers with innovative products. I feel that it is improper to
stifle creativity by permitting those less innovative companies to
go to the federal government to file lawsuits as a substitute for
their own lack of imagination, and I therefore believe that the case
against Microsoft is without merit.
[[Page 28912]]
The time has come to finally resolve this lawsuit to let
Micorsoft concentrate on doing what they do best--developing
innovative products. Microsoft has made plenty of concessions. The
government should not be wasting funds on this lawsuit when we need
to spend more on fighting terrorism. The third-party oversight
committee which Microsoft has agreed to will keep everybody honest.
Please see that the Department of Justice recognizes the importance
of finalizing this settlement and does so soon.
I can't close this letter without commending you on the
outstanding work you are doing on the terrorism front. May God
continue to bless you, the President, and all of the others working
to preserve our way of life. Cc: Senator Strom Thurmond
Sincerely,
Earl W. Mallick
MTC-00030525
15 Broadway
Ocean Grove, NJ 07756
January 22, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I urge you as strongly as possible to settle the Microsoft
antitrust case and to end the extensive and costly legal proceedings
against them. I find the amount of money spent fighting the case an
irresponsible use of resources, and the case should be wrapped up as
quickly as possible at this point.
As an everyday computer user, I find a uniform operating system
to be beneficial in my ability to smoothly operate my PC. Though
some of Microsoft's tactics have been heavy-handed, there is no
denying the success they have had in making programs work seamlessly
with each other and creating a standard other companies have yet to
match. Though they will lose some of their entrepreneurial freedom
in disclosing Windows coding to competitors, it will allow Microsoft
to get back to business, and to continue paving the way for
innovations that benefit millions of people.
Therefore, I am in favor of settling the case as soon as
possible. If our past President, Mr. Clinton had spent as much time,
energy and money pursuing Bin Laden and company as he had pursuing
Bill Gates and company (Microsoft), we as a nation would be in
better shape. One of the main reasons I voted for President Bush was
in the belief that he would do the right thing.
Sincerely,
John Sosenko
MTC-00030526
Sandra Drake
12201 NE Olive Drive
Kingston, WA 98346-9265
January 26, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington. DC 20530-0001
Dear Mr. Ashcroft:
I believe that the antitrust lawsuit against Microsoft has gone
too far. I feel that it has been fueled by political motives and
personal avarice since its conception three years ago. It is not my
belief that Microsoft was guilty of antitrust violations in the
first place, and finally I believe that the settlement that has been
reached in this case must be accepted for the simple reason that it
is the quickest way to end this case.
This settlement will require Microsoft to design all future
versions of Windows to be compatible with the products of its
competitors. While I believe that this is a bit harsh I would like
to urge you to accept this settlement. Microsoft has agreed to the
terms because it understands the importance of ending this
litigation--not just for its own sake, but for the sake of the
U.S. economy as well as the technology industry.
Thank you for the work that you have done in this case and for
your support of this settlement.
Sincerely,
Sandra Drake
P.S. The U.S. should be ?? of ??government officials. In ??
Government, what a concept.
MTC-00030527
John Gilstrap
36 South Marion Circle
Ringgold, GA 30736
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
The court should approve the Microsoft antitrust settlement.
Entering into the settlement agreement will ensure Microsoft will be
able to get back to focusing on developing innovative products while
safeguarding against the complaints made about anticompetitive
business practices. Continued prosecution of this case by the
federal government is unnecessary. Microsoft has agreed to make many
changes in the way it conducts its business. They agreed to design
future versions of Windows in a way that will make it easier for
consumers to run software made by other companies along with Windows
software.
While I have not been directly impacted by this lawsuit, I have
friends in the technology industry who have. Drawing out this
lawsuit is not beneficial to them, or to the tech community as a
whole.
Thank you for working toward a resolution of this case.
Sincerely,
John Gilstrap
MTC-00030528
FAX COVER SHEET
ATTENTION: Attorney General ??
COMPANY: Department of Justice
FAX NUMBER: 1-202-307-1454
DATE:.1.26.2002
NUMBER OF PAGES SENT INCLUDING THIS PAGE: 2
FROM: ??
COMPANY:
PHONE: (253) 582 8368
FAX: (253) 581-9178
MESSAGE: As attached
NOTICE: If you have any problems receiving this fax, please con :act
Mail Masters at (253)
581-9177 immediately.
8302 104th Street Southwest
Lakewood, WA 98498
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I want to express my support of the settlement reached between
Microsoft and the Department of Justice. I do not believe the anti-
trust case against Microsoft had any merit in the first place. Yet,
I was pleased to hear that Microsoft and the Department of Justice
had agreed to the terms of a settlement. I urge the Justice
Department to enact the settlement this month.
The proposed settlement contains many stipulations that will
benefit the IT industry. Microsoft has agreed to disclose the
protocols and interfaces of its Windows system, which provides for
the development of new software. This new software should be more
compatible with the Windows system. Competing developers will
clearly benefit from the disclosure of this information. Finally,
everyone will benefit from this settlement. Microsoft will be
allowed to return its full focus to business, and technology
companies will benefit from the increased confidence in the sector.
For these reasons, and many more, the Justice Department must enact
the settlement.
Sincerely,
MTC-00030529
Carlotta Boyd
6104 36th Avenue NW
Seattle, WA 98107
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am in favor of the Microsoft antitrust settlement agreement.
It is in the public's best interest that this protracted litigation
come to an end.
The terms of the settlement agreement are fair. Microsoft has
taken appropriate steps to restore fair competition in the software
industry. Microsoft has agreed to make available to its competitors
the information necessary to enable servers to interoperate natively
with Microsoft server operating systems. They also agreed to not to
enter into contracts with third parties which would require that
third party to exclusively sell Windows products. Concessions such
as these will help foster competition.
I appreciate your commitment to resolving this case. Further
litigation is obviously not going to accomplish anything more than
running up legal expenses and creating more uncertainty in the tech
world.
I support the settlement, and I look forward to the end of this
case. Thank you for your time and consideration.
Sincerely,
Carlotta Boyd
MTC-00030530
867 Plymouth Street
Pelham, NY 10803-3128
[[Page 28913]]
January 15, 2002
Attorney General John Ashcroft
US Department of Justice
Washington, DC 20530-0001
Dear Attorney General Ashcroft:
Extending litigation In the Microsoft antitrust case would be a
mistake. A settlement has been reached between Microsoft and the
Justice Department, Our Justice Department should continue to
support this settlement,
Certain spatial interests would like to see the case continue.
The continuation of this case, however, will benefit no one but some
special Interests. The settlement is fair and balanced. It will
create more openness in the technology Industry, It allows
competitors unprecedented access to Microsoft cede, In addition to
the code openness, Microsoft has agreed to submit to a three person,
government appointed technical oversight committee who will ensure
that Microsoft is complying with the terms of the agreement.
Unquestionably the Microsoft antitrust case should be settled.
Despite the wishes of some special Interests to continue with this
case, It Is time for this costly and time-consuming case to and.
Attorney General Ashcroft, please continue your outstanding support
for the settlement.
Sincerely,
Albert Andresen
MTC-00030531
1985 Green Lane Road
Lansdale, PA 19446-5043
January 22, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington. DC 20530-0001
Dear Mr. Ashcroft:
I wish to express my frustration about the fact that it took the
Department of Justice three years to end its costly antitrust
lawsuit against Microsoft. Our tax money can be far more properly
spent. The agreement they came up with is strict. It requires
Microsoft to grant computer makers broad new ways to set up Windows
with non-Microsoft software programs. Computer makers will now be
free to remove the means by which consumers access various features
of Windows. They can also replace access to those features with
access to non-Microsoft software.
The big deal in this settlement, however, is that Microsoft has
also agreed to disclose various interfaces for its rivals, so that
they can write more effective software programs and applications.
Certainly this agreement is more than fair and reasonable. The
federal government should now allow the provisions of this
settlement to fall in to place. No more litigation should be brought
against Microsoft beyond this agreement.
Sincerely
Fran Henshaw
CC: Senator Rick Santorum
MTC-00030532
12230 SE 61st Street
Bellevue, WA 9,8006
January 23, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing this letter because of my expressed interest of
putting this matter behind us. We need to move forward and get
beyond this point. It is a lingering process that is not in the best
interest of the people, the industry or the economy of our great
state of Washington.
I believe the settlement is a reasonable solution to this
ongoing litigation process. Microsoft will, under this settlement,
share information with its competitors that will enable them to
place their own programs on the Windows operating system. In
addition to the federal government, I would also like to see the
other individual nine states that are still pressing this case
settle at the state level.
The settlement is an important one and I thank you for giving me
the opportunity to share my opinions.
Sincerely,
Arvid Portin
MTC-00030533
1985 Green Lane Road
Lansdale, PA 19446-5043
January 22, 2002
Attorney General John Ashcroft
U.S, Department of Justice
950 Pennsylvania Avenue, NW
Washington. DC 20530-0001
Dear Mr. Ashcroft:
I wish to express my frustration about the fact that it took the
Department of ,Justice three years to end its costly antitrust
lawsuit against Microsoft. Our tax money can be far more properly
spent.
The agreement they came up with is strict. It requires Microsoft
to grant computer makers broad new ways to set up Windows with non-
Microsoft software programs. Computer makers will now be free to
remove the means by which consumers access various features of
Windows. They can also replace access to those features with access
to non-Microsoft software.
The big deal in this settlement, however, is that Microsoft has
also agreed to disclose various interfaces for its rivals, so that
they can write more effective software programs and applications.
Certainly this agreement is more than fair and reasonable. The
federal government should now allow the provisions of this
settlement to fall in to place No more litigation should be brought
against Microsoft beyond this agreement.
Sincerely.
Joseph Henshaw
CC: Senator Rick Santorum
MTC-00030534
R MILTON LAIRD
Certified Public Accountant
4550 Union Road
Paso Robles, California 93446
Tel (805) 237-9202 Fax (805) 237-84.49
January25,2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington DC 20530
Dear Mr. Ashcroft:
I am deeply disturbed by the travesty of justice caused by legal
actions that have been and are icing taken against Microsoft.
Microsoft, in fact, is one of the primary contributors to the
success of our economy. The efficiency and productivity of our
entire workforce has been dramatically increased by Microsoft's
software.
Along with other companies such as Intel, Microsoft has enabled
computer users to speedily communicate and handle complicated
problems efficiently on PCs and network by replacing numerous
cumbersome, complicated and slow operating systems with Windows and
other products that are amazingly effective and economical.
Before Microsoft s software was available, only engineers and
sophisticated mathematicians were able to program and operate the
massive computers in use, Now anyone who can read and write can
expertly operate their PCs and business networks.
As a reward for this massive contribution to oar economy and
improvement in the work forces efficiency, Microsoft has been
severely penalized by actions brought by competitors who could not
develop competitive systems and turned instead to the government in
an attempt to limit Microsoft's effectiveness.
Even though the proposed settlement is severe, Microsoft has
agreed to make future programs easier for other companies to release
their products. Windows XP will have a device that enables other
companies to add or remove computer attributes built into Windows,
so if anyone comes up with better programs, (which I doubt will
happen) these programs can be easily introduced into new computers.
Yet some greedy State Attorney Generals are trying to exceed the
already unjust penalties proposed for Microsoft and AOL is bringing
a lawsuit which can only lead to more unnecessary and unproductive
litigation to the detriment of all except attorneys.
Let's conclude this hassle and get on with making America more
efficient.
R. Milton Laird
cc. Senator Dianne Feinstein
MTC-00030535
Haskell Rosenberg
4 Bridgewater Court
Pittsford, New York 14534
716:381 -2340
Fax--716:381--3094Haskelini @ aol.com
Fax Cover
January 26, 2002
FROM: Haskell Rosenberg
Phone: 585/381 -2340
Fax: 585/381--3094
TO: Attorney General John Ashcroft
FAX: 202/307-1454 202/616-9937
I trust that, despite your overcrowded agenda, you will be able to
give consideration to something that has already gone on much too
long.
Haskell Rosenberg
2 Pages, including cover
Haskell Rosenberg
4 Bridgewater Court
Pittsford, New York 14534
Ph. 716:381--2340
Fax:716: 381- 3094
email: haskelini @ aol.com
January 26 2002
Attorney General John Ashcroft
[[Page 28914]]
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing in support of settling the Microsoft antitrust case
according to the settlement agreement negotiated in November. The
case should never have been brought in the first place and has
resulted in enormous expense to taxpayers and a great waste of
everyone's time. In the settlement agreement Microsoft has made a
number of concessions, including the implementation of a uniform
price list for the largest computer manufacturers, and an agreement
not to take retaliatory action against competing software companies.
With these concessions Microsoft has gone far to level the playing
field, giving these companies a meaningful opportunity to compete
with Windows and with the applications Microsoft writes for it.
Microsoft has earned its dominant position because they earned it in
the hurly-burly of the market-place. It ill becomes giving sore
losers the opportunity to bring down a company, especially one so
important in our "new economy", simply because of its
success. It would be better for all parties to see this case
resolved. The November settlement agreement is an appropriate way to
put an end to at least a portion of this needless litigation.
With best wishes.
Sincerely,
Haskell Rosenberg
MTC-00030538
[illegible]
January 25, 2002
Attorney General John Ashcroft
U.S. Department of Justice
9500 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft,
I am writing to you to express my support for Microsoft and the
sttlement in the antitrust case. This case has dragged on for long
enough and it is time to conclude these legal proceedings. Microsoft
has offered generous terms in the settlement: the licensing of
intellectual property, [illegible] on Windows for rival software
developers free reign for computer makes in relation to what
software they install, and a uniform price for the top 20 computer
makes to purchase Microsoft products. These are only a few of the
concessions Microsoft has offered in the November 2001 settlement.
Microsoft is a great company that has revolutionized the
technology industry. It is time [illegible] move forward once again
and continue to make fine products without the threat of a lawsuit
hanging over them. I strongly urge you to accept this settlement
because it is fair to all parties involved.
[illegible]
MTC-00030539
January 9, 2002
Judge Kollar Kotelly
Antitrust Division
U.S. Department of Justice
601 D Street, NW, Suite 1200
Washington, DC 20530
Attention: Renata Hesse
Dear Judge Kotelly:
After years in the courtroom and millions of dollars of taxpayer
money spent, the Department of Justice has reached a proposed
settlement with Microsoft, I am aware that you are considering the
merits of this settlement and that the law allows for comments from
the general public on this matter. I am grateful for this
opportunity to participate in this way.
When news of this settlement was first announced I was very
pleased to know this case seemed to be drawing to a dose, While I
have never seen the merit of the 9overnment's case in this matter,
my greatest concern was the clear lack of regard for the financial
impact this case would have on our national economy.
Since this case started over $30 million dollars of taxpayer
money has been spent pursuing this boondoggle, This is unacceptable
at a time when states like mine are facing real budget constraints
and the federal government should be placing its resources in areas
that truly protect the interests of Americans.
At this time of economic recession and heightened budget
concerns this proposed settlement is the best solution. I am hopeful
you will agree to support this proposed settlement.
MTC-00030540
3690 Woods Road E
Port Orchard, WA 98366
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to you today to express my support of the
settlement that was reached between Microsoft and the Department of
Justice. While I ardently question the merits of this case, I was
pleased to hear that a resolution may finally be in sight given the
three-month mediation process that has already ensued. The enactment
of this settlement would be beneficial. I urge the Justice
Department to enact the settlement and suppress any further action
against Microsoft. Some people have made the mistake of seeing
Shunt's work as a load of rubbish about railway timetables.
Microsoft has done more for this country under the leadership of
Bill Gates than any many other entrepreneurs in American history.
Further, Microsoft, as a corporation, has gone above and beyond the
scope of the original litigation in an attempt to resolve this
issue. Microsoft has agreed to disclose the internal interfaces of
the Windows system. This is a first in any antitrust settlement.
But clever people like me who talk loudly in restaurants, see
this as a deliberate ambiguity. A plea for justice in a mechanized
society.
I would hope that the Justice Department recognizes the immense
benefits of enacting this settlement and proceeds accordingly at the
end of the month. When Shunt says the 8:15 from Paddington he really
means the 8:17 from Paddington. The places are the same, only the
time is altered.
MTC-00030543
A HY YO! HIHARA DESIGN
San Gabriel, CA
91775
Voice:
(626) 284-0233
FAX.
(826) 284-5411
Ms. Renata Hesse
Antitrust Division
Department of Justice
601 D Street, NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
I am writing in support of the Microsoft settlement. It is time
for the federal government to stop spending millions on a lawsuit,
when a reasonable settlement is at hand. This settlement, which all
parties have agreed to, will put this issue to rest.
At a time when the stock market at is down and the economy is in
recession, the market is looking for stability--not the
uncertainty of an ongoing lawsuit against one of America's most
successful companies. There are many more important issues that the
government can fund--from programs for children to paying down
the national debt.
The consent decree is a fair compromise. Please support it.
Thank you.
Sincerely,
Ka by Yoshihara
President
K hy Yoshihara Design
MTC-00030544
CALIFORNIA DEMOCRATIC PARTY
Sc
1401 21st Street,
Sacramento, 455 22
916,442,570
Ms. Renate Hesse
Antitrust Division
Department of Justice
801 D. Street, NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
I am writing in support of the Microsoft settlement. The time
has come for the federal government to jet its spending prior
straight. Instead of wasting millions o?? dollars on a lawsuit that
will do??thing for the consumer except make an already shaky economy
worse, the time has come to and the ch??ade.
By supporting the co??ent degree, you will put the issue behind
us and help refocus the spending priorities of the administ??ation.
Hopefully, the consumer backlash?? this west??ful spending will
in??cause this administration to focus its effects on important
priorities such as working men and women, programs for our nation's
youth and paying down the national debt. The first step, ??owever,
is to avoid wasting the millions of dollars fun??ed into it is laws
it that could be better spent almost anywhere else.
Thank you.
Sincerely,
Bob H??ndy
Director, Region 10
CA Democratic Part
*This letter represents the opinion of the author of the letter and
shall hot be construed to
implement it represents the official California Democratic Party
position.
Class S. Fig?? Str??t Suite 400
[[Page 28915]]
Let Angeles, CA 9-017-5440
213,239,8736- F?? 2398737
DE-?? Web site
imfo @ ??dem.urg
www.ci-dcm.org
However not intervention into the world of nigh tech programming
and design sets a dangers is, and potentially dis??rous prec??dent.
Di??tating to Microsoft what technology it can develop to in?? the
effectiveness of existing products of meet the rapidly expanding
needs of us?? the technological into a from that has been the
hallmark of our high tech, internet??
?? could argue in fact that the ger??esis of the huge decline in
the Nasdaq, which so far ?? in ?? than $2 million of loss wealth, it
primarily the result of the government's ?? attach Microsoft's right
to innovate. After ?? today Microsoft, to norrow Intel.
Microsoft appears to be a Government target because of their
success as a company. We need to guard success and innovation, r
than attack a company because of their success. Microsoft's success
should be viewed as an ?? not a liability. The consumer has
benefitted from Microsoft's success. The prospect of ?? benefits to
the consumer should not be stifled by our ?? government. Similarly,
other companies should not have to worry that their success could so
ready be h??eatened by heavy-handed government action, oppressive
attorneys foes and a legal a ?? designed to harass, publicly smear
and possibly even break apart the business. The message we must and
is that success should be rewarded and not punished.
We hope the consent decree is adopted and the federal lawsuit is
dropped.
Sincerely,
Joe An?? ??
Executive Director,
Sit Council ?? Association
MTC-00030546
City of Santa Barbara
City Hall
De Le Guerre Plaza
(806) 584-5324
mailing address
Post Office Box 1990
Santa Barbara, CA 93102
Fax (808) 594-5475
[illegible]
January 25, 2002
Renata Hesse
Trial Attorney Antitrust Division
Department of Justice
601 D Street, NW, Suite 1200
Washington, DC 20530
Des Ms. Hesse:
I urge the Department of Justice to end the class action
lawsuits against Microsoft. The millions of dollars being spent on
this lawsuit would offer more of a benefit to the public if they
were spent on programs for youth it our communities.
There is a severe lack of funding for mentoring programs, after-
school activities, sponsor programs, summer reading programs, gang
violence prevention, school facilities monies, and many other
important youth-serving programs.
Children are the future for this great country. Please, help to
redirect the money that is being wasted on a class action lawsuit
this provides no benefit to the consumer, to programs that will make
a positive difference in the lives of our children. Please support
the settlement.
Sincerely,
Harold P. [illegibel]
Mayor Pro Tempore
MTC-00030547
Mires Promotions
1228 Leavenworth St..San Francisco, CA 94109 *
415-793-7933 Field
Marketing . In-Store
Promotions . Event Management
January 21, 2002
Ms. Renata Hesse
Trial Attorney, Antitrust Division
Department of Justice
601 D Street, NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
I was a dot-tom victim. My previous employer was partially
funded by Microsoft. It was a new and amazing telecommunications
concept.
When we went back to Microsoft for more funds in late 1999, they
refused on the grounds that the Anti-trust lawsuit would make it
more difficult to move investments into the telecommunications
space. They feared what the media and the courts might say.
I know that the settlement can't bring back my failed dot-corn.
But ending a three-year lawsuit that has cost Microsoft and the
Government millions will allow everyone to get back to work,
That's just what our economy needs right now.
Thank you,
David Mires
President, Mires Promotions
MTC-00030548
BOARD OF DIRECTORS
David M. Stanley
Chairman
Dr. Don Racheter
President
I. Maurene Fallor
Vice President and Secretary
Jeffrey R. Boey??
Vice President
Stanley M. Howe
Vice President
ACADEMIC
ADVISORY BOARD
Richard Wagner
Chairman
Department of Economics
George Mason University
Robert L. Blab
Public Administration
University of Victoria
Edgar K. Browning
Department of Economics
Texas A&M University
Richard B. McKenzie
Management
University of California Irvine
William C. Mitchell
Political Science
University of Oregon
William S. Peirce
Weatherhead School of Management Case western Reserve University
Randy T. Simmons
Political Science
Utah State University
Eugen??a Toma
Department of Economics
University of Kentucky
Gordon Tu??ock
Department of Economics
School of Law
George Mason University
Richard K. Vedder
Department of Economics
Ohio University
Bruce Yahd??e
Department of Economics
Clemson University
27 January 2002
Renata Hesse, Trial Attorney
Antitrust Division, Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse:
Millions of average Americans like myself have invested in
Microsoft; many directly, even more through their pension funds.
We've witnessed with alarm your office's case against the company
cause dramatic flux in the stock market. All investors, not just
those holding Microsoft shares, have been hurt by the general
downturn in the market.
Speaking of "markets," in my view it was only an
extremely narrow, and unrealistic definition of the
"operating-system market" that allowed the judge to
conclude that Microsoft was "monopolizing." Microsoft is
big--it shipped product to 100 million people just in the last
year--but this is because Americans, and many people overseas,
have made Windows the operating system of choice, not because there
is no competition, or any illegal restraint of trade. The fact that
there are other competing operating systems such as Apple's
Macintosh platform, and the Linux share-ware platform seems to have
been lost.
All high-tech companies live and die by guarding the make-up of
their key intellectual products, particularly software. Yet the
proposed remedy that Microsoft, and of course the government, agreed
upon would force the company to share such information with its
competitors. Although this may trample the heart of commercial and
intellectual property law in the country with untold harm done not
just to this one company, but also to an entire sector of our
economy, Microsoft appears to have agreed to it in an effort to, in
the currently popular phrase, "move on." It's important
we let the high-tech sector of the American economy continue to
increase the standard of living of the average American to levels
never before seen in history If Microsoft's competitors and the
government act like the greedy persons who killed "the goose
that laid the golden eggs," our economy is likely to end up as
dead as the goose did in the fairy tale. It's time to "close
the book" on this case by approving the proposed settlement.
Sincerely,
Dr. Don Racheter, President
MTC-00030549
Dr, Jacqueline, Bartol
Doctor of Veterinary Medicine
157-2 Hare Road
[[Page 28916]]
Milton, New Hampshire 03850
January 23, 2002
Renata Hesse
Antitrust Division
Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Attorney Hesse:
I am writing to contribute public comment in the case of U.S. v
Microsoft. It is time for the government to stop spending time and
money on the Microsoft case.
Millions of dollars have already been spent arriving at the
current settlement. The settlement should allow both Microsoft and
its competitors to be productive. It is unfortunate that individual
companies have tied up the government's time on this issue, but the
reality is that they have, We should recognize it and move on.
Microsoft has contributed greatly to the technology industry and
the economy. In this time of recession and national insecurity we
need companies like Microsoft to help pull the country out of
difficult economic times and continue to lead the world in
technological advances. As an elected official, I work hard to make
sure that taxpayer dollars are spent wisely and in areas that make a
positive difference in peoples lives. I urge you to do the same and
end this needless spending spree.
Please accept this letter as support of the Microsoft
settlement. There are many other important issues facing our country
at this time. It would be in everyone's best interest if the
government spent our money and time dealing with these rather than
Microsoft.
Sincerely,
Jacqueline Bartol, DVM
MTC-00030550
Paul Dow Dawson, Ph.D.
318 Maranon Way
Punta Gorda, Florida 33983
pdawson @ sunline.net
1-941-235-0197
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
January 27, 2002
Dear Mr. Ashcroft:
The reason for this letter is because I am interested in
American business, and I am also interested in having the stock
market make a comeback. With that said, the settlement between
Microsoft is good for two reasons. First, the absurd antitrust suit
is finally over. Second, Microsoft can now devote all of its
resources to bringing new and advanced products to the market
instead of to wasting time in court.
Better products in the marketplace will result boost the ailing
tech sector. The litigation against Microsoft started the economic
downturn, and now we are in a recession. While all of this was
happening, Microsoft's competitors were lobbying as hard as they
could to keep Microsoft in court. Innovation was stifled. Who cares
how much money Bill Gates makes? I consider myself successful, and
if he makes more money than me, fine. The more money people make,
the stronger the economy. The one good thing that came out of the
settlement is that Microsoft will not be able to retaliate against
companies who ship software that competes with Windows. This will
encourage competition and benefit the economy.
Although there should have never been a suit in the first place,
I am in support of anything that will put an end to the litigation.
Sincerely,
Paul Dow Dawson
MTC-00030551
E 2370 Spring Rock Lane
Hayden, ID 83835-8355
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC? 20530
Dear Mr, Ashcroft:
The Microsoft antitrust case has dragged through the federal
courts for nearly four years now last year, a settlement was reached
between Microsoft and the Dep??mont of Justice, and that se??tlemem
is currently pending, in the federal courts Unfor??naiel Microsoft's
opponents are currently seeking to undermine the settlement and
bring additional litigation against the Microsoft Corporation in the
federal corals. ??urther sail would be a waste of time and money,
and I think it is in the best interest of the public to finalize the
settlement, rather than allow the federal courts to become the
playground for personal vendettas to be hashed out.
The settlement is by no means unfair, especially to Microsoft's
competitors In fact in the interest of wrapping up the case,
Microsoft has agreed to terms and conditions that extend to aspects
of the corporation that were not found to be in violation of
antitrust laws. In other words, the settlement represents generosity
on Microsoft's part Microsoft has agreed to refrain from retaliating
against computer makers who introduce software into the market flint
directly competes with Microsoft technology. Microsoft has also
agreed to license the Windows operating system to twenty of the
largest computer makers on identical terms, including price. I do
not believe that, with a perfectly reasonable settlement available,
further litigation is necessary. Microsoft has paid its debt to
society and it is time to move on. I ask you to support the
finalization of the settlement as soon as possible.
Sincerely,
Helen Tester
cc: Senator Larry Craig
MTC-00030552
284 Melrose Avenue
Merion Station, PA 19066
January 23, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
Now that the Department of Justice has reached an antitrust
agreement with Microsoft, what's next? Will this matter get dragged
on for another three years, leaving the technology sector in a major
recession?
Microsoft has been more than willing to settle this matter. They
have agreed to license their Windows operating system to the largest
computer makers, with identical terms and conditions. They have also
agreed to design future versions of Windows to provide a mechanism
to make it easy for computer makers, consumers, and software
developers to promote non-Microsoft software within Windows.
Let's end this dispute and allow economic law--supply and
demand--determine how business is done. I support the
settlement and look forward to the end of this case.
Sincerely,
Jordan Driks
cc: Senator Rick Santorum
MTC-00030553
T&K Solutions
12126 Feldwood Creek Ln
Riverview, Fl 33569
(813) 671-7362
(813) 671-7413 (fax)
eMail tomg @ t-k-solutions.com
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I have been an avid user of Microsoft and am happy to see the
government finally reach a settlement in their antirust case against
Microsoft. I feel that the settlement is fair and I just wish the
whole issue were already resolved.
While I have been pretty neutral throughout the whole case, I
have anxiously been awaiting an outcome. Microsoft was not wholly
innocent, but that was three years ago and the concessions they make
in the settlement more than cover for what was asked of them. By
giving over their source code to the competition, while at the same
time designing Windows to work better with outside programs,
Microsoft will be helping to increase the diversity of choices for
people to use in what have been predominantly Microsoft dominated
areas.
In short, I would like to thank you for taking the time to read
opinions like mine on this case. I feel that it is important to know
how a decision of this magnitude will affect the public before
finalizing it.
Sincerely,
Tom Gerhart
Thank you for allowing us to serve you!
Tom Gerhart
MTC-00030554
FAX SHEET
H. Thomas & Patricia H. Norris
403 Wesley Road
Greenville, NC 27858-6404
Phone 252-355-2479 FAX 252-355-8927
tomnor @ attglobal.net
FAX TO: Attorney General John
Ashcroft-------------
----------------------
-----------------------
-----------------------
-----------------------
-----------------------
-----------------------
-------
FAX NUMBER: 1-202-307-1454
FROM:
Ab??se-----------------
-----------------------
-----------------------
--------------
DATE: 1/27/02
TIME: 6142 AM/PM
NUMBER OF PAGES INCLUDING COVER SHEET
[[Page 28917]]
COMMENTS:-------------------
-----------------------
-----------------------
------------------------
------------------------
-----------------------
-----------------------
----------
The information contained in the facsimile message may be
confidential and is intended only for the use of the individual or
entity named as recipient. If the reader is not the intended
recipient, be hereby notified that any dissemination, distribution
or copy of this communication is strictly prohibited. If you have
received this communication in error, please notify us immediately
by telephone and return the original message to the address above.
403 Wesley Road
Greenville, NC 27858
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing to you today to express my support for the
settlement agreement between Microsoft and the Department of
Justice. After three years of litigation, the time has come to
finally put this issue to rest. The settlement agreement that was
reached is fair and should be quickly enacted.
The terms of the agreement indicate Microsoft's desire to
resolve the antitrust dispute. Under the terms of the settlement,
Microsoft will now disclose the protocols and internal interfaces of
the Windows system. This will allow developers to create software
that is increasingly compatible with the Windows system. Information
sharing, then, should provide consumers with an increased choice in
operable software. Clearly, Microsoft has agreed to disclose this
information in an attempt to resolve the dispute.
Please enact the settlement at the end of January. Enough
litigation has already gone through the courts.
Thank you for your time regarding this issue.
Sincerely,
H. Norris
MTC-00030555
REALTY EXECUTIVES
WILLAM R. JOHNSON, CRS
Broker/Associate
810 Cardinal Lane
Hartland, Wl 53029
Business: (262) 369-8900
Home Office: (262) 367-8315
Fax (262) 367-9695
Toll Free: (800) 942-0048
Email: BillJohnson @ realtor.com
January 22, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
Although I believe this situation should not have arose in the
first place, I wanted to write to express my support for finalizing
the Microsoft settlement deal announced in November. Considering
Microsoft's incredible contribution to the PC
industry--offering a user-friendly, standardized software
platform that has changed the world--keeping this company
intact should be a priority of this legal action.
The incredible costs that have been endured by this lawsuit,
from years of prior litigation to future monitoring, are a major
sacrifice of taxpayer time and money. Now that Microsoft has offered
guidelines to open up more competition in the industry, changing
licensing agreements and design of Windows, let's end this process
and move on to more important issues. Leave Windows alone, unlike
the government, it works!
To further the course of breaking up a company because of
competitive business practices, just because it is so successful at
it, would be a major mistake and would preclude the potential
opportunity for cooperation from here forward. Please approve the
agreement and let the technology industry get back into position to
rebound and grow in 2002. Thank you.
Yours trul??
William R. Johnson, C.R.S. G. R. I.
cc: Representative Jim Sensenbrenner
MTC-00030556
January 25, 2002
Ann Rothstein
14 Rolling Way
New Rochelle, NY 10804-2406
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am in favor of the Microsoft antitrust case settling. I urge
the court to approve the settlement agreement, and hope that no
further action will be taken against Microsoft by the federal
government
The terms of the settlement agreement are more than reasonable.
Microsoft has agreed to make it easier for their competitors to
compete with Windows technology. They have also agreed to design
future versions of Windows in such a way that computer manufacturers
will be able to more easily add or remove features of Windows and
replace those features with non-Microsoft software. Additionally,
Microsoft has agreed not to enter into contracts that would obligate
third parties to exclusively sell Windows products. Concessions of
this type should certainly do away with concerns of predatory
business practices on Microsoft's part.
The settlement agreement is good for consumers, and is good for
the technology industry as a whole. I would like to see the court
approve this agreement without any further delay.
Sincerely,
Ann Rothstein
MTC-00030557
Saturday January 25, 2002
TO: The Department of Justice
Washington, D.C
Subject: Microsoft Settlement;
Fax # 1 202-307-1454
As a voter, living in the state of Colorado, I feel the
negotiated agreement made by Microsoft with your department, and
nine states, is a fair and equitable to all parties concerned. It
time we all move forward without spending more of our tax dollars,
and lining the pockets of the attorneys involved.
Regards;
Bill Coriell
Denver, CO
MTC-00030558
2304 41st Avenue E
Seattle, WA 98112-2732
January 25. 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing this letter to express my opinion on the settlement
reached between the Department of Justice and Microsoft. For three
years I have followed the case against Microsoft with avid interest.
I" have become increasingly annoyed with the length of the
litigation process. The terms of the federal settlement are
extremely fair and I believe that it should be enacted without
hesitation. Any continued mediation in this case would be poor
judgment by the Justice Department.
Further, the terms of the settlement include many concessions on
behalf of Microsoft. The terms of the agreement call for the
disclosure of protocols and internal interface designs of the
Windows system. This will result in the ability for competing
developers to produce software that may be more compatible with the
Windows system. In addition to this Microsoft has allowed for the
formation of a technical review board that is composed of outside
members. This panel will ensure Microsoft's compliance with the
terms of the settlement. It becomes increasingly clear that the
enactment of this settlement is important. Resolution in this case
will benefit the technology industries and the economy. Please enact
the settlement.
Sincerely,
Kurt Buecheler
MTC-00030559
Rebecca Frankel
MIT Laboratory for Computer Science
Room 435, 200 Technology Square
Cambridge, MA
rfrankel @ mit.edu
January 26, 2002
Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Response to the Proposed Settlement of the Microsoft Case:
I am writing because I am unhappy about the proposed settlement
of the Microsoft antitrust trial. I do not wish to try to enumerate
the flaws of the settlement. I think other people have done a good
job of that; for instance, I approved of Daniel Kegel's petition and
signed it. In addition, I feel uncomfortable saying anything that
might imply that I know better than I he judge how to decide issues
of law or apply them to a remedy. I am a software engineer; I don't
know anything about law. The only special understanding I have is of
technology.
[[Page 28918]]
However, the problem of the "understanding of
technology" is an issue in this case. There has been much
griping in technology circles that this settlement shows how
thoroughly the legal system doesn't "get" technological
issues. But most of this griping is just that--griping. You
legal people must wonder about us: if there really is something you
don't "get," why can't we explain to you what it is?
For instance, recently an engineer complained to Lawrence
Lessig: "Members of the judiciary are largely unqualified to
comment or judge upon issues of a technical nature, simply because
their careers do not incorporate a great deal of technical
knowledge, and also because they have not sought it ... My concern
is that...we won't have a lot of judges with a high awareness of the
intricacies involved for several years. However, the judges
presently sitting are essentially creating a body of law to govern
what they do not understand." In reply, Lessig shot back a
challenge to us:
"There was a time when I thought that lawyers wouldn't do
too much damage... All that has changed now ... This is, in part,
because courts don't understand the technology. But I don't think
it's because courts don't know how to code. I think the problem is
that courts don't see the connection between certain kinds of
technology and legal values. And this is because we've not done a
good job in demonstrating the values built into the original
architecture of eyberspace:
That the Internet embraced a set of values of freedom...that
those values produced a world of innovation that otherwise would not
have existed. If courts could be made to see this, then we could
connect this struggle to ideals they understand.
Sometimes when I read Slashdot debates, I wonder whether you
guys get this connection either... And this leads me to the greatest
pessimism: If you guys don't get the importance of neutral and open
platforms to innovation and creativity; if you get bogged down in
20th century debates about libertarianism and property fights; if
you can't see how the .commons was critical to the .com revolution,
then what do [you] expect from judges?
You guys ... built an architecture of value. Until you can begin
to talk about those values, and translate them for others, courts
and policy makers generally will never get it. Lessig is basically
telling us we are being a bunch of inarticulate crybabies. He is
right. If we want to claim the right to complain that courts do not
understand us, we need to provide a "translation of our
values" in terms that a layman can understand.
My goal in this letter is to attempt to provide such a
translation, and then use it to make an analysis of the nature of
the public interest in the settlement of the Microsoft trial. I am
deeply involved with the society that created the values to which
Lessig refers. I have spent a large part of the last eight years at
the MIT Lab for Computer Science--a place whose extraordinary
qualities were better characterized by another student from my
floor:
[I]t is tough for most people to imagine a building where a
young herd can walk out of his office on the 4th floor, argue with
the founder of the free software movement (Richard Stallman), annoy
the authors of the best computer science book ever written (Abelson
and Sussman), walk up one floor to run a few ideas past Dave Clark,
Chief Protocol Architect for the Internet from 1981-1989, and
walk down two floors to talk to Tim BernersLee, developer of the
World Wide Web. I know all these people; many of them feel like
family to me. I know what they care about, what they hope for, what
they dream about, what they fight, for, and what they fear. I never
imagined that, as an MIT engineer, so much of what I would struggle
with would not be the "intricacies involved" in the
practice of engineering, but instead the problems of defining and
communicating the value that technology can and can't provide to
society. The engineers here are in a constant battle to prevent
society from destroying the value they try to build for it: this
struggle takes up so much of their energy that it is hard to think
of what they do as just engineering anymore. I do not, like this: I
want to simply be an engineer. I wish that you, the court, could
take from us the job of defining and communicating values, so we
could go back to being ordinary engineers. It is much more natural
for you to take on this role, than it is for us to have it. But in
order for you to do that, first we would have to explain these
values to you.
I am unhappy with the proposed settlement because it shows how
deeply the courts do not understand the value that engineers here
are trying to build. I could pick on the specifics of the settlement
terms ad infiniturn, but I feel it would be a pointless exercise,
because only a basic failure of understanding of the nature of the
public interest could make such a flawed settlement, seem acceptable
in the first place. But if I claim that there is a basic failure of
understanding, that raises a question: "What exactly is it
that I think government, officials don't understand?" It is
rather shocking that we have failed to effectively answer this
question. We have told you many things: long stories of power
struggles in the browser market, mind-bendingly technical analysis
of the proper design of network protocols, plenty of satirical
accounts of Microsoft's shady shenanigans, and many other similar
things. But we never have given a simple answer to the simple
question "What is the nature of the public interest in all
these matters?" It is the goal of t, his letter to try to fill
this gap. I will make my argument in a context so ordinary that it
may well seem childish, but please bear with me: in my silly
example, I think I can capture the essential issues at stake and
then tie them back to our complex and confusing real situation.
So here is my simple picture--instead of talking vaguely
about the "old economy" and the "new
economy," and about the mysterious difference between them, I
want instead to talk about two ordinary household tasks: mowing the
lawn and cleaning the basement. In my picture "mowing the
lawn" will represent the old economy, and "cleaning the
basement" will represent the new. (I warned you this would
sound silly; but please hang on--it is not as dumb as it
sounds). Why did I choose these particular examples? Because I think
the fundamental change that we are calling "the appearance of
a new economy" is a shift from an economy that strives to
increase productivity by automating manufacturing, to one that
strives to increase productivity by automating organizational tasks.
The new frontier is the reorganization of supply chains and business
processes to take advantage of "information
technology"--the ability of machines to do the
organizational tasks that used to be handled by armies of clerks and
middle managers. But this shift, is so huge, complex, and hard to
picture, that I want to pull it down to earth and discuss its
central principles in the context of the kind of organizational task
we all are familiar with: the problem of how to bring some order to
a messy basement. By way of contrast, I want to compare this task to
another one we all know and love: the problem of how to tame an
unruly lawn. (You might ask, how is mowing the lawn manufacturing?
Well, it is manufacturing shorter grass.) Now that I have identified
my representative "industries", I want to talk about how
we can think about the nature of the "public interest"
in the context of these tasks. As I continue this description, I
hope you will see the advantages of translating our discussion to
such a down-to-earth context. In this setting, it is easy to use
one's ordinary intuition to understand the public interest, in a
conflict. Maybe it is hard to interpret the public's interest in the
"future of an online architecture for e-business," but
how hard is it to think about what you want for the future state of
your basement? I want you to see what our conflict with Microsoft
would look like if it occurred in this ordinary context.
So, to start my story, let me describe a conflict which
illustrates a threat to the public interest in the context of the
"old economy." Suppose I need my lawn mowed, and the kid
who I usually hire to push my clunky old gas mower around the yard,
instead shows up to work with a shiny, spiffy new lawnmower of his
very own. He has broken his piggy bank to buy it: he is very proud
of himself and shows it off to everyone on the block. His beautiful
new lawnmower mows the lawn twice as fast as the old one did. As a
result, he can mow twice as many lawns in the same time. Pretty soon
he is raking in the cash. He is making so much money, he can afford
to lower his lawn-mowing rates, so he begins to steal business from
the other lawn-mowing kids on the block. The other kids get upset.
"He's cheating!" they cry. They gang up on him, beat him
up, and smash his new lawnmower. The original kid, recovering in the
hospital, appeals to the adults on the block for justice. "The
other kids were jealous of my success!" he cries. "They
had no right to hurt, me or my lawnmower. You should protect me so
that nothing like this ever can happen again!"
Should the adults listen to him? Absolutely. Not only was what
happened to the kid unfair, it also damaged the public interest.
When a kid can mow lawns twice as fast for less money, everyone on
the block benefits. He put considerable investment and risk into
obtaining his lawnmower, and it provided a benefit for everyone.
Yes, he also
[[Page 28919]]
made a lot of money from his new lawnmower, and maybe he was a
little obnoxious about showing it off, but his good fortune was good
fortune for everyone. Therefore, his investment deserved to be
protected from the destructive jealousy of the other kids. The rich
kid should be protected, and the jealous kids should be punished.
Now, to continue, let me introduce another story of a situation
that causes harm to the public interest, this time in the context of
the "new economy." Suppose I decide to hire a kid to
help me clean my basement. This kid works very hard, sorting all the
stuff in the basement, building appropriate-sized boxes for various
categories of stuff, and carefully labelling all the boxes so it is
easy to find things later. His hard work is useful to me: it helps
me find tilings more easily. But, there is trouble in my little
paradise. One day, my little helper cannot come, so I hire another
kid to help out. But this kid is different. He is careless: he puts
things in the wrong boxes, and mislabels the boxes. Worse, he is
devious: he discovers that if he puts things in the wrong boxes
deliberately, and labels the boxes in a scrawl only he can
understand, then he can make extra money off me, because I will need
his help to be able to find things again. Worse still, he is
ambitious: he realizes that if he puts the potting soil in a place
where only he can find it, then pretty soon I will be forced to ask
him to take charge of organizing the gardening shed as well. Thus he
can double the amount of money he can make off me, and there is
nothing I can do about it.
So how do we think about the "nature of the public
interest" in this situation? Well, in order to answer that
question, it is important to ask first "what is the result I
am trying to achieve?" If I hire someone to clean my basement,
the result I want is a well-organized basement, a basement in which
it is easy to find things. The kid who worked hard to sort things
accurately and label the boxes clearly helped me achieve my goal.
The kid who deliberately mislabeled the boxes and misplaced the
potting soil did not help me achieve my goal. He hurt my interests,
not merely because he over-charged me, took over my basement, and
hatched devious designs on my gardening shed, but much more simply,
because he failed to deliver to me the basic effect I wanted and
needed. I needed a basement where I can find things easily: he
didn't give it to me. By contrast, the first kid, the one who built
me a good system of well-organized; wen-labelled boxes, did give me
the effect I needed. The first kid's actions served the public
interest; the second kid's did not.
This observation is the whole secret to understanding the
"architecture of value" of which Lessig spoke. What is
an "architecture of value?" It is nothing fancy: one can
think of it as an information architecture that would remind one of
a well-organized basement. This architecture is valuable because the
careful sorting and clear labels make it easier to find things.
There is nothing terribly subtle or difficult about this idea. The
only really deep concept here is the observation that it is useful
to ask the question: "what is the fundamental goal we are
trying to achieve?" We are entering into an
"organization economy," and in such an economy, we want
to achieve the goal of being well-organized. These central value of
such an economy is no more complicated than the admonition we have
all heard a thousand times from our mothers: "it, is nice to
put things away where they belong so it will be easier to find them
again later." But if it is all so simple, why does it seem so
hard? It seems hard because it IS hard, but it is not hard because
anything about the situation is complicated. It is hard for quite
another reason, which I want to illustrate using a third story.
This, my final story, is a classic tragedy.
Let us suppose that the first kid I hired to clean my basement
returns from his vacation and ventures downstairs to view the state
of his handiwork. When he sees what the second kid has done, words
cannot describe what he feels at the sight of the ruin of all his
hard work. He grabs the second kid by his shirt collar and drags him
to me to face judgment. "He's cheating!" he cries. (He
doesn't say much else: unfortunately this first kid--though a
good, honest worker--is not exactly the articulate type.) The
second kid replies: "He is just, complaining because he is
jealous of my success! He has no right to handle me this way or
damage the valuable "intellectual property" I have
created. You should protect me so that nobody can ever treat me like
this again!" Now when I hear these words, I remember my
earlier trauma when I witnessed the kid with the new lawnmower get
beaten up by a jealous gang. I remember how I pledged to the kid on
his hospital bed that nothing like that would ever be allowed to
happen again. This recollection plunges me into a state of fear and
confusion. The first kid comes to me and begs for the right to re-
label the boxes correctly: it is hard to deny such a heartfelt
request. On the other hand, I made a solemn pledge to the kid in the
hospital that I would never, ever allow anything like the disaster
that happened to him to happen to anyone else. I am riven in two: I
do not know what to do. So I propose a compromise. I propose that
certain of the boxes in the basement are to be declared
"Middleware", and I will require of the kid who now owns
the organization system of my basement that he reveal the meaning of
the labels on those boxes. "To protect his "intellectual
property," I only require that he reveal these labels to
another party when they agree to sign a non-disclosure agreement.
The second kid is happy enough to agree to that, especially since he
alone knows exactly where he has hidden the potting soil, and he has
carefully made sure that the box where it is hidden is not declared
"Middleware." In this way, his designs for the takeover
of my gardening shed are unaffected. Since summer is coming, the
control of the gardening shed is the only thing that really matters
anyway, so he loses nothing by signing on to my
"compromise". Now, what can we say about, this
compromise? Should I say that it is a bad compromise because I was
not. careful enough to locate the hidden potting soil before I
settled on my definition of "Middleware"? Should I say
that it is unfair to require people to sign a non-disclosure
agreement whenever they want to get a hammer from the basement? I
could say all these things, and more, but they seem to skim over the
surface of the problem. Much more fundamentally, this compromise
represents a failure to think clearly about what we are trying to
accomplish. It is in our statement of the nature of the values which
we are "compromising" that we have failed. We have
failed to understand the essential values that we are pledged to
protect. To appreciate the tragedy of this failure, imagine how this
situation would appear to the first kid, the one who cares more than
anything about properly organizing the basement. He worked hard and
honestly to do the very best job he could, but to no avail: all his
hard work was ruined, it wasn't even accidentally ruined it was
ruined on purpose. But when he tries to protest about this betrayal
of his values, not only is he not listened to, he is also treated
like a jealous, violent gang leader. Since he is not a sophisticated
kid, he cannot figure out why any of this is happening to him. It
simply feels to him like all the adults around him have gone mad.
I might ask: what exactly were the essential values I failed to
understand when I devised my compromise? One might say that my
compromise shows how little I understand the values associated with
the "new economy." It is true that I have failed [o
understand how overwhelmingly important it is to have clearly
labeled boxes in my basement. But this concept of
"value" in the new economy is so very simple and easy to
understand, that one might also maintain that I understood it
perfectly clearly. When I insisted that the "Middleware"
boxes should be clearly labelled, I showed that I do understand what
constitutes value in the new economy.
Nonetheless, my judgment was confused, but it was not a lack of
understanding of the new economy that caused this confusion.
Instead, my judgment was clouded by the pain and confusion that the
reminder of an old-economy conflict invoked in me. I ran into
difficulties because I was led to apply "old economy thinking
to a new economy problem." In particular--this is the key
point--my real failure carne not from a failure to understand
the values of the "new economy," but from a failure to
understand the values of the old one. When I promised to the kid in
the hospital that nothing like what happened to him would ever be
allowed to happen again, I did not define very clearly in my head
what exactly it was I was pledging myself to protect. What exactly
did I promise? Did I promise that in every circumstance where a rich
and successful kid was challenged by a poorer, less successful kid,
I would always side with the rich kid?
No, that is not what ][ promised. I made the promise to the kid
in the hospital because I saw that his good fortune was good fortune
for everyone, and therefore I pledged myself to protect it. But when
I later found myself in a situation when a rich and successful kid
demanded that I protect his good fortune, I forgot the rationale
behind my original promise. If I had remembered it, I might have
thought to ask myself "in this new situation, is riffs rich
kid's good fortune good fortune for everyone?" Hopefully it is
clear that this
[[Page 28920]]
question receives a rather different answer in this situation. So,
does my old promise bind me anymore? Am I required to devise a
compromise between the interests of the two children in my charge?
No, such a compromise doesn't make sense. I could make things much
easier on myself if I just worried about protecting my own
interests. My interest is to be able to easily find things in my own
basement. The first kid fought for my interests, the second kid did
not. It is that simple: there is no need for the terrible pain and
confusion this case evokes, or the strange and convoluted
compromises that are the result. So, to wrap up my Story, I want to
summarize the four conceptual errors I made which drove me to devise
such a thoroughly flawed compromise.
First, I made two mistakes in my understanding of the "new
economy":
1. I did nor understand how much value the first, kid provided
for me when he carefully sorted and labeled all my stuff.
2. I did not understand how badly the second kid hurt me when he
destroyed this careful labeling system. I did not understand how
dangerous it is that I have become dependent on his aid to find
anything in his system of artfully mislabeled boxes. Second, I made
two mistakes in nay application of principles that came from the
"old economy":
3. When the second kid claimed to me that I had an obligation to
protect his incentive to invest, I forgot that the statement of this
obligation is that we must protect the "incentive to invest in
machinery to make a manufacturing job more productive." I need
to protect a kid's incentive to break his piggy bank and buy a
lawnmower, or I will have to put up with the fumes and noise from my
old gas mower forever. But, this obligation does not apply to the
conflict between the kids who are cleaning my basement, because
there is no machinery that will aid the task of
"manufacturing" a cleaner basement. So there is no need
to protect the incentive to invest in such machinery.
4. More generally, I made a mistake when I failed to notice how
the second kid manipulated and abused my commitment to the values of
the old economy with his carefully chosen words. Earlier I said that
this kid was careless, and worse, devious: and worse still,
ambitious. But worst of all, he is manipulative. He is perfectly
willing to take our most central, sacred values and twist them into
a empty caricature of themselves to serve his own interests. It is
our mistake and our shame that we cannot see what is being done to
us.
So now I have completed my story. I have explained the essential
failures of understanding that caused me to make a dreadful mistake.
I promised earlier that when I was done I would take the lessons I
have explained and tie them back to our complex and confusing real
situation. So I will describe again the four mistakes I have just
identified, this time as they appear in the real world. I contend
that this settlement reveals that public officials fail to
understand four important concepts that are crucial to understanding
the nature of the public interest in the conflict with Microsoft.
First, it reveals that there are two ways that public officials
basically misunderstand the "new economy."
1. They do not understand the tremendous value to society
provided by the creators of the open standards of the Internet, the
World Wide Web. the associated free software that supports the
Internet (Apache, Bind, Perl, etc) and the free operating systems
Linux and BSD. They do not understand the tremendous value to
society of open, well-specified APIs on every level of the
information architecture we are trying to build to support the
future productivity of our society.
2. They do not understand how badly society is hurt by
Microsoft's manipulation of its APIs and file formats. They do not
understand how much the constantly changing proprietary file formats
hurt ordinary people's ability to get work done, nor do they
understand the loss of potential productivity that occurs when a API
is obscured or destroyed. They do not understand how Microsoft's
control of the platform hurts the prospect for real competition and
progress in the computer industry.
Second, more seriously, it reveals two ways that public
officials are confused about how to apply the values of the
"old economy" in this new situation.
3. They haven't noticed that, just as you don't need a lawnmower
to clean a basement, you don't need a lawnmower to write an opera,
ting system. All the effort to preserve a delicate balance between
the need for open APIs, and the need to preserve the incentive to
invest, have missed the point that we are protecting the incentive
to invest in a purely imaginary lawnmower. There is no machinery
that will make the job of writing an operating system any easier, so
there is no need to protect the incentive to invest in imaginary
machinery.
4. Finally, they haven't noticed that Microsoft is lying to them
Microsoft is lying in a horrible way: they are invoking the values
that honorable public officials have spent their whole lives
protecting, and they are manipulating them, using them, twisting
them around so they come to mean something entirely different. The
government does not detect this duplicity--that is their
greatest mistake. We engineers have a name for these kinds of lies:
we call them FUD, which stands for "fear, uncertainty and
doubt." We watch Microsoft deliberately spread fear,
uncertainty and doubt in the government, the courts and the general
population, and we view with amazement and horror the enormous power
that these lies have over the world.
We are lost: we do not know what to do to combat lies which have
such terrible power. We are like children who live in a world where
all the adults have gone mad.
Yours sincerely,
Rebecca Frankel
MTC-00030560
4404 Burke Drive
Metairie, LA 70003
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr Ashcroft:
As a supporter of Microsoft, I cannot say how pleased I was to
see that the Justice Department finally came to its sense and
resolved to settle with Microsoft. This case has gone in far too
long for people like me, who depend on Microsoft's products in our
daily lives
I hope that the settlement will not be too harsh on Microsoft.
With giving over their trade secrets to their competitors and
allowing people who ship computers to configure Windows anyway they
want, Microsoft could lose out on a lot of money. However, I feel
that they will continue to succeed like they always have despite
these handicaps,.
I hope that the government will refrain in the future from
attacking business that are integral to our economy like Microsoft
is. This whole case, which has taken up so much of their time, could
be the reason why we are currently in a recession. End this case and
let Microsoft get back to work.
MTC-00030562
2454 28th Street
Long Island City, NY 11102-1917
January 25, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
Now that the Courts will make a final decision next week on
whether the proposed settlement benefits the public, I'd like to
express my opinion.
Microsoft has agreed to not enter into any agreements obligating
any third party to distribute or promote any Windows technology,
exclusively or in a fixed percentage, subject to certain narrow
exceptions where no competitive concern is present. The company has
also agreed not to enter into agreements relating to Windows that
obligate any software developer to refrain from developing or
promoting software that competes with Windows. Microsoft has also
agreed to not retaliate against software or hardware developers who
develop or promote applications of operating systems that compete
with Microsoft's.
So why should we pursue further litigation? The agreement seems
more than fair. Let's move on.
No more litigation!!
Sincerely,
Nikolaos Natsoulis
MTC-00030564
6419 Fairbanks Street
New Carrollton, MD 20784
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing you today to express my opinion in regards to the
antitrust dispute involving Microsoft. I support Microsoft in this
dispute and feel that this litigation is a waste of precious
resources, time, and talent.
[[Page 28921]]
I believe the settlement that was reached in November is a fair and
reasonable agreement to end this three-yearlong dispute.
This settlement is thorough, and Microsoft did not get off easy.
Microsoft has agreed to license its Windows operating system to the
20 largest computer makers on identical terms and conditions,
including price. Microsoft has also agreed to grant computer makers
broad new rights to configure Windows so as to promote non-
Microsoft software programs that compete with programs included
within Windows.
This settlement will benefit companies attempting to compete
with Microsoft. This settlement will also benefit consumers by
allowing tiffs company to remain together and continue delivering
innovative products to the marketplace. Please support" this
settlement. Thank you for your time.
Sincerely,
Sesil Rubain
MTC-00030565
Doug and Marle Oison
4180--71st Ave NE
Marysville, Wash. 98270-8807
Phone: (425) 554 0188
Pax (425) 334 1010
doug.mariooison @ luno.com
January 28, 2OO2
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr, Ashcroft:
As a concerned constituent, I write to inform you of my support
of the Microsoft settlement. Over the last three years I have
followed the federal suit against Microsoft. I have been
increasingly annoyed with the Justice Department's pursuit of
Microsoft. Microsoft has been more than willing to compromise In
attempts to resolve this issue.
With the release of Windows XP, Microsoft will now put into
effect a mechanism that will allow users to add or delete Microsoft
programs at their own discretion. This will revolutionize consumer
ability to configure their operating systems and should be
beneficial.
I believe Microsoft has gone above and beyond themselves to meet
the demands of the Justice Department. It is finally time to resolve
this issue once and for all. Thank you for your concern regarding
this issue.
Sincerely,
Marle Olson
MTC-00030566
JAMES D. SMTIH
10675 NINB MILE ROAD
WAITMORB LAKE, MI 48189
EMAIL Jameeds Oum??h.odu
VO??E 734 449-8836
FAX 734 449-8849
C&IL 734-476 1109
January 26, 2002
Anor?? ?? John Ar??roft
US D?? of Ju??tice
950 Pe?? Av??ue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I urge you to accept the settlement with Microsoft. We should
one the begal?? system to insure a highly competitive marketplace.
We should not, however, be misged??ded by constructs of
competitiveness in an industrial economy when analyzing an
informationed one. Microsoft has made a major contribution to
growing the American economy. It has a lead?? po??ition in the
software market, but its station is easy prey to innovative
comp??sons. Microsoft has made concessions that will enhance the
ability of others to challenge it. It is time to ?? the conflict
from the courtroom to the marketplace.
The real danger we face is excessive government incursion in the
marketplace. If the last hundred years tell us anything, it is flee
peoples and free markets knock the socks off bureaucratic decision
making.
MTC-00030567
117 Northwood Court Bayport, NY 11705
January 25, 2002
Attorney General john Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing you today to inform you of my opinion as regards
the Microsoft antitrust suit. I support Microsoft in this dispute,
which is now in its third year. I believe we should be focusing on
more pressing issues, and not prolonging litigation against
Microsoft that will only be a waste of time and precious resources.
This agreement is thorough. Microsoft has agreed to license its
Windows operating system products to the 20 largest computer makers
on identical terms and conditions. Microsoft has also agreed to
grant computer makers broad new rights to configure Windows so as to
promote non-Microsoft software programs that compete with programs
included within Windows. A technical oversight committee has been
created by the government to oversee Microsoft compliance.
The terms of this settlement are sufficient to end the lawsuit.
Please support this settlement.
Thank you for your time.
Sincerely,
Martha Schary
MTC-00030568
AVIATION SIMUI?? A??TIONS INTERNATIONAL. Inc.
POST OFFIC?? BOX 358 ?? TEL & FAX 516271-6476
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I support the settlement of the Microsoft antitrust lawsuit
??hile your office primarily seems concerned with Microsoft's impact
with?? the technology industry, I feel that it is important to
consider their role in our overall e??nomy, which has slowed
considerably in the past few years. Aside from the economy slowing,
the U.S. still retains a large surplus in exporting software,
Microsoft is a leader in that market and why mess with a good thing?
As a small-scale software developer, t appreciate the standard
platform that Microsoft has created. Many average PC users probably
do as well. It simplifies all of our lives.
The changes Microsoft is making in the settlement are reasonable
and favorable to its competition Easing its bundling and exdus??ity
pacts with computer makers will immediately open the door wider for
other com??nies to market their software. Because that is the
government's main contention with Microsoft, the company's
endorsement of the settlement should leave you with no reason not to
finalize it
Sincerely,
Everett Jo??ne
MTC-00030569
Walter W. Lerch
15220 Golden Rain Drive, Chesterfield Missouri, 63017
January 26, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft,
I am writing to voice my support to an end to the Microsoft
antitrust case. The proposed settlement between Microsoft and the
Justice Department reflects a fair balancing of the interests and
should be approved and implemented.
If given the opportunity, I am sure Microsoft's opponents will
nickel and dime tiffs agreement to death. This should tell you that
they are not after fairness, but are truly after a permanently
crippled Microsoft. This snow job on Microsoft by competitors is
most certainly not in the public interest any more than any alleged
antitrust violations.
Microsoft has responded to the main complaint against it by
agreeing that non-Microsoft software programs can be installed in
the Windows operating system. They do this both by changing their
licensing scheme and their program as a whole. I do not see the need
to return to court when the main objective can be accomplished short
of further litigation.
Thank you for considering my comments.
Sincerely,
Walter W. Lerch
MTC-00030570
System Integrators Inc.
Developing Solutions of Tomorrow--Today
January 27, 2002
Attorney General John Ashcroft
United States Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Sir:
We are a small business and develop products targeting
Microsoft??* Windows??* platforms. The general economy as you are
aware is not helping any business, especially small business. Add
another dimension to the problem--the Microsoft, Justice
Department legal battle. We see customers have taken a wait and see
attitude toward new purchases and upgrades, on account of both the
delays in the lawsuit settlement and the general economy. We are
also unable to plan our future business for the same reason as our
products generally support Microsoft technologies. I feel the suit
should have been resolved one way or the other long time ago.
[[Page 28922]]
At long last, there is a settlement that covers the points in the
suit. It fairly changes Microsoft's business practices, particularly
with respect to licensure and software development, and prevents the
retaliatory action Microsoft allegedly used to keep its hold on the
market. I am hopeful that the current review process will come to a
speedy conclusion so that consumers and other software publishers
such as us will be able to move forward. Let's break this period of
uncertainty, and accept the current settlement. Let's channel our
efforts and time to innovate for the benefit of the consumer,
instead of wasting it on long drawn legal wrangling.
Sincerely,
Ganesh Srinivasan
President
MTC-00030571
114 Eddy St. #5
Ithaca, NY 14850
January 27, 2002
Renata Hesse
Trial Attorney
Antitrust Division
U.S. Department of Justice
601 D Street, NW, Suite 1200
Washington, DC 20530
Facsimile: (202)6:6-9937 or (202) 307-1454
Email: microsoft.atr @ usdoj.gov
Re: Microsoft Trial Tunney Act Comments
I am very concerned about the proposed settlement of the
antitrust case against Microsoft. I don't think this settlement is
in the public interest. After enduring years of litigation and
continued anti-competitive action on the part of Microsoft, the
public deserves an effective remedy. The proposed remedy, if
adopted, will not be effective. The proposed remedy restricts
Microsoft's actions very little and allows them to continue the same
anti-competitive business practices that have resulted in the bleak
software business of today.
The most important and most critical effect of any final
judgment in this case should be to restore competitive conditions in
the markets affected by Microsoft's unlawful conduct. The proposed
settlement is bound to fail in this goat because it is ill-
conceived, ambiguous, and full of holes. Effective relief would be
based on principles, not an enumeration of prohibited conduct. Just
as a judge must avoid even the appearance of impropriety, Microsoft
should be required to avoid even the appearance of anti-competitive
conduct. Given its history of unlawful behavior, Microsoft must be
held to the highest standards of ethical, pro-competitive behavior.
There must also be an effective, efficient, and powerful enforcement
authority.
The proposed settlement has none of these properties. Rather it
is full of holes, restrictions, and limitations that will make it
wholly ineffective:
1. The proposed settlement is confusing and ambiguous. Given
Microsoft's history, one must assume that every ambiguity will be
interpreted in the most advantageous possible way by Microsoft. This
practically ensures future litigation over the meaning of the terms
and conditions.
2. The proposed settlement is backward looking. Rather than
focus on restoring competitive conditions to the markets as they are
now or will be, it focuses on the past.
3. There is no effective means for enforcement. Some sort of
oversight board with actual power is necessary, as are actual
penalties for noncompliance. The proposed settlement permits only
further litigation.
4. The proposed settlement aims to protect the market for
personal computer operating systems, but not the market for server
operating systems. Should not Microsoft be enjoined from using anti-
competitive practices to monopolize the server market in addition to
the PC market?
5. The proposed 'Technical Committee" is worthless,
in part because of its secrecy. It needs real investigative and
oversight powers. It should be a resource for further litigation. It
should have the right and responsibility of reporting the behavior
of Microsoft to the public.
6. The proposed settlement fails to adequately protect
'open source' competition. As 'open source'
software is generally provided to the public with source code as a
public service at no charge, it is deserving of the highest
protections from unlawful anti-competitive practices. 'Open
source' software is commonly written as a hobby by individuals
or small associations. The proposed settlement discriminates against
open source software by allowing Microsoft to deny access to those
with out a 'legitimate business need'. Similarly, the
'reasonable and non-discriminatory' terms for API and
communications protocol licensing may be used to discriminate
against open source developers and products. Microsoft could impose
non-disclosure licensing terms that prohibit distribution of source
code, for example.
7. The protections of OEM's are inadequate. The proposed
settlement provides maximum protection to only the largest twenty.
All OEM's should be treated equally, and price schedules should be
published for all to see.
8. The term of 5 years, extensible to 7, of the proposed
agreement is inadequate, given Microsoft's record of ignoring such
agreements and litigating.
9. Microsoft's competitors need to be protected against the
'Embrace and Extend' strategy of hijacking established
standards and modifying them to be incompatible. Microsoft should be
enjoined from using these tactics, and rather should be required to
work with standards groups. Java and Kerberos are two standards that
have suffered this fate in recent years.
10. Recent price increases in volume licensing agreements have
demonstrated to the public that the Microsoft monopoly is alive and
well despite the ongoing litigation. The final judgment should
ensure that pricing is kept at a reasonable level,
11. Microsoft should be enjoined from using patents to prohibit
or discriminate against 'Open Source' software. Perhaps
Microsoft should be required to license for free 'Open
Source' use any patent that it owns or otherwise licenses.
12. Microsoft has been recently trying to leverage its operating
systems monopoly and Internet subsidiaries to promote its
'Passport' on-line authentication service. Microsoft
should be enjoined from using its currently monopoly to eliminate or
prevent competition in the on-line authentication service business.
13. The definition of middleware is poor. Middleware should be
defined based upon functionality or character of a product, not on
whether it is trademarked.
I have enumerated but a few of the serious limitations of the
proposed settlement. The proposed settlement is wholly inadequate
and is not in the public interest.
Sincerely,
Stephen D. Holland
MTC-00030572
6803 244th Street Court E
Graham, WA 98338
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am a small business owner and I have used Microsoft products
to help run my business for years. I feel that the antitrust case
against Microsoft is senseless. The settlement should stand the way
it is and this whole mess should be over.
Microsoft has contributed greatly to the IT industry and I feel
that they've earned what they have. According to one of the terms of
the settlement, as I understand it, Microsoft is required to release
their internal codes to Windows so that other companies can use them
to produce their software. I feel as though others are simply taking
advantage of Microsoft, I don't think the courts should support
that.
I hope that the Department of Justice decides to clear this
matter up. To finalize the settlement is clearly in the best
interest of all involved. I would hate to see any more money wasted
on this.
Sincerely,
Jerry Taylor
MTC-00030573
Watts and Associates
22622--50th Avenue S E
Bothell, WA 98021
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am in favor of the proposed Microsoft vs. The Department of
Justice antitrust settlement. In my opinion, the settlement as put
forth, is a reasonable one providing all of the participants fair
and just resolution; not to mention putting all of this government
financed litigation behind us. This settlement accomplishes a number
of specific changes. For instance, computer makers will be able to
replace access to various features of Windows with access to non-
Microsoft software. Another change that I believe to be very
generous on Microsoft's part is the proposed licensing of Windows
operating system to computer makers.
I am particularly disturbed that while the government was
searching for ways to break up Microsoft, other institutions were
getting
[[Page 28923]]
away with countless acts of corruption. It's time that Microsoft got
back to business and the government went back to governing. Why is
it that we allow the liberals in the government to continue
rewarding the do-nothing persons and punishing those who accomplish
and contribute to the economy?
Sincerely,
G W Watts
MTC-00030574
Shirley M. Sebright
1047 Crystal Lane
Springfield, OH 45502-9567
Fax
To: Attorney General John Ashcroft
From: Shirley M. Sebright
Fax: 1-202-307-1454
Date: 1-27-02
Phone: Pages: 2 Including Fax Sheet
Re: CC:
x Urgent %62 For Review %62 Please Comment %62 Please Reply %62
Please Recycle
Comments: [Click here and type any comments]
Shirley Sebright
1047 Crystal Lane
Springfield, OH 45502
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing to give your support to the Department of Justice
and Microsoft. I think the government should leave Microsoft and
Bill Gates alone and allow the company to get back to be the
creative, innovative company it is. The Department of Justice had no
business bringing the suit against Microsoft. This suit was more a
political ploy brought about by Microsoft's competitors. This
lawsuit sets a dangerous precedent in that the government is being
used as a weapon against a competing company. This lawsuit also
threatens the innovative and creative spirit of our country. What
effect do you think this action has on those who have dreams of
creating a product, but then see a very creative company being
hounded? Yes, the company was aggressive, but business is
aggressive. Microsoft did nothing more or less than what their
rivals did.
Microsoft will ultimately be giving up its interfaces and
protocols to other software developers so that they can more
comprehensively write software for Windows. The company will also be
held to a regimented licensing code that will ensure that computer
makers are able to use the software they want with Windows. A
Technical Committee will make sure these rules as well as others are
followed.
Leave the company be. Give your support to this agreement.
Sincerely,
Shirley Sebright
MTC-00030575
1860 Hall Street SE
Grand Rapids, MI 49506
January 25, 2002
Attorney General John Ashcroft US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
Microsoft has had to suffer through three years in the antitrust
case with the Justice Department. It is pleasing to know a
settlement was reached in this case, however it is unsettling that
this case could be re-opened.
The fact is that this case has a good settlement available to
end it, and it should be implemented.
The settlement will allow Microsoft's competitors to access
Microsoft code so they can design better software. Competitors under
this settlement will have the ability to effortlessly place their
software on Microsoft operating systems. Despite these improvements
opponents of the settlement have launched a campaign to have it
revoked, and Microsoft dragged back to court. There is no good
reason to let this happen, the settlement is good and it is too
expensive to continue this case.
Once more I would like to state that this case should be
concluded with the current settlement.
Sincerely,
Ron La Mange
MTC-00030576
JBMB CONSULTING
January 26, 2002
Michel G. Bernard
President
29 East 64th Street New York, NY 10021
Tel (212) 879-6242
Cell (917{time} 881-2224 Fax (212) 744-2552
mbernard @ jbmb.org
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
The settlement reached between Microsoft and the Department of
Justice, appears to be fair. It is my strong belief that at this
point additional litigation will not help anyone, including the
States that are seeking to continue suit. It is now time to settle
and move on.
Microsoft tins agreed to a number of terms and conditions, all
of which restrict monopolistic behavior and promote competition
within the technology industry. Microsoft will refrain from engaging
in retaliatory behavior should software developers and computer
makers introduce a product into the market that directly competes
with Microsoft technology. Microsoft has also agreed to license its
Windows operating system to twenty of the largest computer makers on
identical terms and conditions, including price, and to grant them
broad fights to reconfigure Windows to their own specifications.
I do not believe additional action is necessary on the federal
level. The proposed settlement is equally beneficial to Microsoft
and its competitors, and a cessation of litigation would most
definitely be beneficial to the consumer. I urge you to give your
support to the settlement.
Sincerely,
Michel G. Bernard
President
MTC-00030577
2304 41st Avenue East Seattle, WA 98112
January 26, 2002
Attomey General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
Today I write to voice my support of the Microsoft settlement.
It is true that the Microsoft Corporation has been at the forefront
of the technology industries in recent years. Their leadership,
however, is the result of a dedication to excelence that is not
matched within the industry. The result is the continual production
of quality products that out perform any substitutes. This is in by
no means a crime. I therefore take issue with the federal pursuit of
a case based upon outdated statutes.
Regardless of this opinion, I believe that the settlement
agreement is in the best interests of the public. Too much time has
already been spent in the litigation process and the entire
technology industry has suffered for it. Further, anyone wary of
Microsoft's compliance with the terms of the agreement should be
cased as the agreement calls for the formation of a watchdog group.
I adamantly believe that enacting the settlement will encourage
confidence and growth within the tech. industry. The Justice
Department should suppress any opposition to the enactment of this
settlement.
Sincerely,
Lori Buecheler
MTC-00030578
January 27, 2002
Attention: Ms. Renata B. Hesse U.S. Department of Justice Fax #
202-307-1454
Dear Ms. Hesse:
This is to inform you that I fully support the proposed
settlement of the Microsoft lawsuit. For the sake of national
interest I would hope that this can be finalized without delay; the
matter has dragged on entirely too long.
Sincerely,
J.C. Hensel
MTC-00030579
Via FAX
432 Greensboro Drive
Dayton, OH 45459
January 25, 2002
Attorney General John Ash??
U S Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
During the period of the past three years, the IT industry, and
the general public have been forced to endure the US vs Microsoft
lawsuit. This unfortunate quit has slowed innovation and movement in
the software industry and has hurt investment in technology as a
whole. Consumers have taken the suit in stride even though it is
they who will receive the bill for the case by way of higher prices
on technology products through the corning years.
The settlement has teeth that force Microsoft to disclose
proprietary software code to competitors and will exist under the
[[Page 28924]]
constant scrutiny of a three-person committee in its future business
dealings. These and other points in the settlement make it more than
fair to all the plaintiffs in the lawsuit.
Now that all. the involved parties have been served, a
settlement must be formalized. The Department of Justice must see
that the needs of the consumer are met in ending this lawsuit as
soon as legally possible. I urge the Department of Justice to
formalize the proposed settlement as soon as this period of public
comment concludes.
Sincerely,
Arthur C. O'Neil
MTC-00030581
P.O. Box 3125
Atlantic Beach, NC 28512
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
As you are well aware, Microsoft has been under public and
government scrutiny concerning their business tactics as being a
monopoly. In my view, this lawsuit has been going on for far too
long and I'd like to see it finished once and for all. The
continuation of its opposing competitors who keep pressuring
Microsoft are doing damage to this nation far beyond what they could
possibly realize.
Thousands of Americans rely on Microsoft in various ways, some
in terms of jobs, most in terms of computer technology that they use
in their homes and businesses. If we let this suit go back to the
Federal Court, our people will continue to lose out on millions of
dollars and the possibility of improved software to evolve our way
of life.
The settlement is fair and reasonable and it will most
definitely benefit consumers and eliminate future possibilities of
competitors attacking Microsoft for unjustly dominating the IT
market. This country needs to consider the money being spent on file
lawsuit and realize that re-direction of funds is in need. Your help
m Microsoft's defense is greatly needed and appreciated.
Sincerely,
William Woodbury
MTC-00030582
January 27, 2002
From: Steven White, 5125 Logan Avenue South, Minneapolis, Minnesota
55414
About: Microsoft Settlement
I am sending this in a way that verifies its authenticity (hand
writing) because it is regarding a company that has been reported to
have commissioned "spontaneous" letter writing campaigns
to state attorneys general which, in one case, included letters from
two dead people. I want to report tht I am alive and strongly
opposed to any lieniency toward Microsoft. Three courts have
declared that they have broken the law. They should pay the price of
their freely-chosen actions. i would like to address one point that
I hope has not escaped your notice. This is a company famous for its
willingness and ability to squirm around restrictions and whatever
it can to win at any cost. They have squashed or stolen innovative
ideas from others, driven companies out of business, and finally
been convicted of illegal tactics, and they not only show no
penitance, but, based on their public statements, seem to be
convinced they are in the right.
If you make a settlement that has any imaginable loophole, they
will be through it the day it goes into effect. If you say that
programming interfaces to Windows must be made public, they will
move the interfaces to some layer of "middleware" and
declare that they are not part of Windows.
They will behave as they did when ordered to release Windows 95
without Internet Explorer; they released a version that didn't work.
They will "comply," but, as one journalist phrased it,
"with middle finger extended."
For the sake of the future of the computer industry, Micorost's
anti-competitive grip must be broken.
Sincerely yours,
Steven White
MTC-00030583
www. GenGap.net
Judge Kolar Kottely
c/o Attorney Renatta Hesse
Department of Justice, Antitrust Division
601 D St, NW--Ste 1200
Washington, DC 20530
January 28, 2002
VIA FACSIMILE: 202-616-9937
Dear Judge Kolar Kottely
I am writing to express my overall concern with for the
technology sector with the pursuance of the Microsoft antitrust
case.
I am the resident of a rural town and owner of a small online
business. I am able to conduct business with customers all over the
world thanks to the innovation and developments in the technology
and telecommunications industries.
What I don't see is the lack of competition in the high-tech
industry addressed by this case. Over the last decade the number of
jobs in the software industry has grown from 290,000 to close to
some 860,000. The 24,000 software companies in 1990 can be compared
to the 57,000 software companies today. The growth in this industry
is like nothing we've seen in recent history, yet the case against
Microsoft was brought on by an alleged lack of competition in the
market.
In just the past few years the number of software companies and
employees have nearly tripled. This year the software industry alone
will add nearly $20 billion in surplus to America's balance of
trade. Microsoft is on a list of indicators for the Dow Jones
Average and is considered a market bellwether.
These factors do not add up to a lack of competition in the
industry. They are instead indicators that the high-tech industry is
a flourishing, rapidly growing industry that changes so quickly that
tomorrow's Linux will replace today's Microsoft.
Continued litigation in this case will only slow competition and
growth in the industry. I hope you see fit to sign off on the fair
settlement in this case.
Marlene McLaren
PO BOX 383 Spirit Lake, IA 51360-0363 (712) 336-2346
www. GenGap.net
President, CEO
GenGap.net
PO Box 383 Spirit Lake, IA 51380-0363 (712) 336-2346
MTC-00030584
January 3, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
FAX To:
202-307-1454
Dear Mr. Ashcroft:
I am writing to support the settlement between the Justice
Department and Microsoft that will bring an end to their long
antitrust dispute.
Some groups do not think the settlement is fair, but they are
wrong. The only possible way the settlement could be unfair is if it
unfairly harm Microsoft Look at the stipulations Microsoft is
willing to accept. It disclose documentation on the internal
interfaces of its Windows operation system. It will make future
versions of Windows easier to work with terms of removing Microsoft
programs and adding non-Microsoft ones. will guarantee that Windows
runs as well with the new software as it c with the original
Microsoft software. It will not retaliate against any of the
companies that sued it. It will change its licensing practices to
increase competitors" viability in the IT market. Microsoft
will even submit constant government oversight of their business
practices. How mayo outside of Microsoft's boardroom could possibly
be dissatisfied with the settlement is a mystery to me.
Microsoft is willing accept these terms. For that reason alone,
I think ?? settlement ought to go forward. Thank you for your time.
Sincerely,
Kirk Puffenberger
6263 Indian Field
Norcross, GA 30092
MTC-00030585
7 Edwards Drive
Freehold, New Jersey 07728
January 21, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
The consistent persecution and harassment of the Microsoft
Corporation must cease immediately, both for the good of our country
and because it is the fight thing to do. The past three years of
litigation have resulted in nothing besides wasting my money, and
the recently settlement services the public interest in this matter
and its provisions go beyond the government's original complaints.
The provisions of this settlement, among other things, require
Microsoft to submit to a federal technical oversight committee which
is required to review Microsoft's business and software practices.
Additionally, Microsoft must make its intellectual property
available to those compentors who use it in their application of
this agreement.
[[Page 28925]]
These provisions, the general settlement and the process in
which it was reached are all fair, judicious and reasonable. It is
my hope that there is no further federal action in this matter.
Sincerely,
Fred Billand
MTC-00030586
COLDWELL BANKER
TRAR PROPERTIES
January 24, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am writing today to encourage you and the Department of
Justice to accept the Microsoft antitrust settlement. Microsoft has
given up a lot to be able to settle the issue. The terms of the
settlement are fair and they should be accepted.
Many people think that Microsoft is getting off easy, in fact
this is not so. In the terms of the settlement, Microsoft has agreed
to release part of their Windows base code to their competitors.
This is so their competitors can make more compatible software.
Microsoft is being forced to give up their patented trade secrets.
Microsoft has spent years and millions of dollars developing their
products, now they have to simply hand part of them over to their
competitors. In the technology industry there are companies that
develop new products and companies that copy products. Not
surprisingly the companies that develop new products are more
successful, it is a shame that the government has chosen to harass a
company simply because it is successful. This issue has been dragged
out for over three years; it is time to put an end to it. The terms
of the settlement are more than fair and they should be accepted.
Please accept the Microsoft antitrust settlement.
Sincerely,
Diana M. Campbell
Sales associate
FREELAND OFFICE BAYVIEW OFFICE LANGLEY OFFICE OAK HARBOR OFFICE
18205 SR 525 HIGHWAY 525 AT BAYVIEW CENTER 221 SECOND STREET 35
SE ELY STREET
P.O. BOX 760 2869 EAST HOWARD ROAD PO BOX 205 OAK HARBOR, WA
98277
FREELAND, WA 98249 LANGLEY, WA 98250 LANGLEY, WA 98260 (360)
675-7200
(360) 331-6300 (360) 321-6400 (360)
223-1700Fax (360) 675-8600
FAX (360) 331-8474 FAX (360) 321-5283 FAX (360)
221-4800
cakharbor @ coldwellbankerwhidb??y.com
freeland @ coldwellbankerwhildbey.com
bayview @ coldwellbankerwhtdbey.com
langley @ coldwellbankerwiudbcy.com
Each Office Is Independently Owned And Operated.
MTC-00030587
January 26, 2001
Diana M. Campbell
7410 Dead Goat Road
Clinton Washington 98236
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington DC 20530
Dear Mr. Ashcroft:
I am writing today to encourage you and the Department of
Justice to accept the Microsoft antitrust settlement. Microsoft has
given up a lot to be able to settle the issue. I would like to tell
you exactly how I feel about this issue, please think back to
articles of history of the United States and the Auto Industry. Mr.
Henry Ford certainly was not the first automaker competing with
other industrialist of his time, His story is fabulous. One story
that really talks about the "American dream." And this
is only one story of such struggle to produce a sellable product
that has lasting quality, No Mr, Ford was not the only automaker of
his time but he produced a good competitive product.
Mr. Gates and his company have been producing a sellable
competitive product. What is the Justice Department trying to tell
the American businessperson? What is this new attack? The United
States of America is the home of the free. If we do not have the
freedom to create a better "mouse trap", then why are
our borders flooded with immigrants?
Mr. Gates has not asked to have the status of a King in the
United States, He has built a team of people that are of the highest
regard working with ideas and values to build competitive soft wear
for a very fast growing industry.
Please know Mr. Ashcroft that I am a normal everyday housewife,
and I know something about cooking and recipes, some of the
ingredients are private, some are family secrets. Are you telling me
that I must tell people what I put in a cake should I want to
compete in a contest, for my personal gain. I believe in the
American Dream. I grew-up having the ability to choose my way of
life, I think you are treading on sacred ground.
Please Mr. Ashcroft do not use any more of your precious time
and my money. Please accept the
Microsoft antitrust settlement.
Sincerely,
Diana M. Campbell
Wife
Mother of 10, Grandmother of 22
Great grandmother of 6
Real Estate sales associate
MTC-00030588
Mr. Stan Eischen
10113 Keysboruogh Drive
Las Vegas, Nevada 89134
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Ave., NW
Washington, DC 20530
Dear Attorney General Ashcroft,
I support the settlement that has been reached between Microsoft
and the Department of Justice. The settlement will bring an end to
the costly and contentious court conflict between the two.
Some may criticize the settlement and say it lets Microsoft off
too easy. That is simply not the case. Microsoft will agree to many
restrictions on its method of doing business. First and foremost
among these restrictions is the requirement that Microsoft share its
code for Windows with its competitors, thereby allowing them to
place their own programs on the Windows system.
Additionally, Microsoft will eliminate any possibility of
favoritism in its licensing procedures by using a uniform price list
when dealing with the top twenty computer business in the nation.
These two provisions alone would be enough, but Microsoft has
also agreed to forgo any retaliation against companies that sell or
promote software that competes with Microsoft's products. Some
people may claim that Microsoft will just ignore these requirements,
but the settlement will establish a technical review committee to
make sure that Microsoft adheres to all of its terms. With all of
these restrictions, Microsoft will be severely hampered and its
competitors will be aided.
There comes a time in any conflict when the sides sit down and
ask themselves if the time and effort would really be worth
continuing to fight. Microsoft and the Justice Department have
decided that the answer to that question is no. This settlement will
end their battle, and no one should block an agreement that is
amenable to both of them. Thank you for your time and efforts in
Washington.
Sincerely,
Stan Eischen
MTC-00030589
Association of
Business and Industry
The Voice of Iowa Business
January 21, 2002
Judge Kolar Kottely
C/O Renata Hesse
Trial Attorney
Antitrust Division
U.S. Department of Justice
601 D Street, NW, Suite 1200
Washington, D.C 20530
Dear Judge Kolar Kottely:
Thank you for the opportunity to participate in the public
comment period regarding the settlement of the government's
antitrust case against the Microsoft Corporation. As an executive
with the Iowa Association of Business and Industry in Des Moines,
Iowa I was pleased to hear that a settlement in this case has been
reached. While this case has implications for most American
consumers, the implications for those of us in the business sector
are even greater.
The negative impact this case has had on the technology industry
was apparent nearly from its inception, technology stocks began
their slide downward at the same time the district court ruled that
Microsoft should be broken up. This ruling caused major uncertainty
within the tech community and with its investors.
This proposed settlement would provide much needed subility to
the technology industry that was absent during the period this case
remained unresolved. The conclusion of this suit will send the
signal to both investors and innovators that they no longer need to
be concerned with unnecessary government regulations as they work to
create new technology products and services for the future.
[[Page 28926]]
I encourage you to accept the settlement reached by the
Department of Justcie and the Microsoft Corporation .
Sincerely,
John R. Gilliland
Vice President
MTC-00030590
HANSER & ASSOCIATES
public relations
4401 Westown Parkway, Suite 212
West Des Moines, IA ??266-0991
Email:nanser @ hanser.com
www.hanser.com
January 22, 2002
Ms. Renata Hesse
Department of Justice, Antitrust Division
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
The appeal and success of our great country lies in the
opportunity to succeed and to make a better way of life for our
families. This has been possible because of our economic and
personal freedoms. Those with innovative and pioneering spirits are
the reason our country rose so quickly to become a world leads.
Most of those who drive our country because of their innovation
and willingness to take risks never become global figures or even
nationally known. But there is one such individual who is known
worldwide for his technological developments. Bill Gates has prodded
software and Interact technologies that have forever changed our
personal and business relationship with the computer. With his great
ideas turned into reality, he has created thousands of jobs for
Americans and provides a great deal of financial support for
humanitarian relief. For example, The Bill and Mclinda Oates
Foundation announced on January 4, 2001 a $7.5 million grant to help
combat the spread of HIV in sub-Saharan Africa and worldwide. And
this is just one. example of the impact he has had on our world.
Because we are a lawful society, we certainly have an obligation
to enforce our national laws. But that obligation has been met in
the Microsoft antitrust lawsuit, it no longer can serve any relevant
purpose. A fair and realistic settlement has been proposed and
should be signed in order to conclude tiffs case and allow Microsoft
to move forward with all new business activities, and to allow Bill
Gates to continue providing humanitarian relief throughout the world
through his foundation.
Thank you,
Arnanda Carstens Steward
Account Manger
MTC-00030591
Jan 27 02 02:46p
p.2
HANSER & ASSOCIATES public relations
4401 Wastown P??way, Su?? 212
West Des Meines, 1A 50266-1037
575,224??086 Fax. 515.224,0991
Emailhanser @ ha??ser.com
www.henser.com
January 22, 2002
Ms. Renata Hesse
Department of Justice,, Antitrust Division
601 D Street NW, Suite 1200
Washington, DC 20530
Dear Ms. Hesse,
Antitrust is defined by Merriam-Webster, as consisting of laws
to protect trade and commerce from unlawful restraints and
monopolies or unfair business practices. A lawsuit was filed against
Microsoft several years ago alarming the company was in violation of
the antitrust laws of our country. In other words, theo claim is
that other companies competing for the, game customer base were not
able to fairly compete with Microsoft. A lower court ruled that the
company would have to be broken up, This ruling did not stand up in
the Court of Appeals. But in the process, the Federal government has
spent millions of dollars and Microsoft has been forced to spend
similar amounts defending its case. Now a settlement has been
proposed and agreed to by many of the parties involved in the
lawsuit.
Until this case is permanently closed, the biggest loser is the
American consumer. Not only have our tax dollars been the source of
income for the federal government to fund their rose, but it is
likely that Microsoft will offset of the millions they have spent by
increasing costs on their products.
I think the only reasonable course reasonable is to agree to the
proposed settlement, It is in theo best interest of all parties
involved, including the American consumer. Your efforts are truly
appreciated. Thank you.
Sincerely,
Ron Hanser Prosident
MTC-00030592
JAN--27--0205: 12PM
FAX COVER PAGE
TO: ATTORNEY GENERAL JOHN ASHEROFT
FROM: MS. ALICE FASS
FAX #: 212 828-9854
VOICE # : 212 534-0682
(CALL IF THERE IS A PROBLEM WITH THE FAX!)
TOTAL # OF PAGES: (INCLUDING COVER PAGE)
NOTES: BE: MICROSOFT
Alice Fass
January 18, 2002
Attorney General John Ashore
US Department Justice 950 P, ???sylvania Avenue, NW
Washington, DC 20530-0001
D??? Asheroft:
I am willing to express my support for Microsoft in light, of
recent litigation against them Microsoft is a great company with
great products available to the public at very reasonable prices. It
has been an industry leader who has done much to stabilize the IT
industry and the economy. With this lawsuit. Microsoft has been
forced to shift their attention from producing new products to
defending themselves in court. This reduced production has doubtless
made., damaging impact on the IT industry and the economy as a
whole.
In the interest of settling the matter mote quickly Microsoft
agreed to procedures and obli??ons that the US Court of Appeals did
not even find problems with. For one example, Microsoft decided to
allots" computer makers to remove the "paths" that
consumers use to access venous Windows programs. These include
programs like Explorer and Media Player. D??ing ???us well enable
sofrware made by companies such as Netscape or RealNetworks to use
those paths instead. This will intensity competition, which will
benefit consumers.
I look forward to this matter being wrapped up as soon as
possible It has gone on for far too long, and has done severe damage
to the country on a whole I appre???ate the willingness of your
office to hear the views of the public. I trust that you will
conclude that wrapping this matter up will be in the best interest
of the public.
Sincerity,
Ahe ??
MTC-00030593
FROM DIANE AND BARRY CAVANAUGH
324 ANNA AVENUE
MOUNTAIN VIEW, CA 94043-4704
FAX/PHONE 1-656-968-4524
E-Mail: ebarrydiane @ webtv.net
DATE January 27 2002
REF: Microsoft Litigation
TO: US Federal Government
FAX NUMBER 202-3071454
Gentlemen or Madam
We as seniors feel and believe that the settlement against
Microsoft was fair and just. We believe that further litigation by
selfish lobbyists would be costly and wrong. Pleae sned all further
litigation against Microsoft now.
Barry and Diane Cavanaugh
MTC-00030594
Jan 27 02 03: 36p OFFICE DEPOT#617 1 248 968 2486 p. 1
15261 Forrer Street
Detroit, MI 48227
January 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
I am writing today to encourage the Department of Justice to
accept the Microsoft antitrust settlement. I cannot understand why
the government has gone after Microsoft in the first place. As soon
as the government started their suit against Microsoft the entire
technology industry went downhill. Now that there is a settlement in
place, the government should accept it and allow business to return
to normal.
In order to put this .issue behind them Microsoft has agreed to
a long list of provisions. Microsoft has agreed to allow computer
makers the flexibility to install and promote any software that they
see fit, or that consumers request. Microsoft has also agreed to
design future versions of Windows to be more compatible with non-
Microsoft software. Microsoft has agreed to many compromises to
reach the settlement. It is time for the government to accept the
settlement and move on.
Please accept the Microsoft antitrust settlement. A settlement
this fair has no business languishing in court
Sincerely,
H. Pankratz
Cc: Rep. John Conyers
[[Page 28927]]
MTC-00030595
FROM: FAX NO.: 2158785193 Jan. 27 2002 03:01PM P1
6329 Sherwood Road
Philadelphia, PA 19151-2521
January, 26, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
As a supporter of Microsoft, I write you with concern over the
recent developments in the settlement. It is strange to see that,
after three years of negotiating, this settlement may be subject to
still further litigation. It is ridiculous to waste our time and
money on fighting a battle that has already been won.
Microsoft has made sweeping commitments to prove that they are
willing to work with their competitors. They have agreed to make
changes in licensing and marketing and even design. Microsoft has
agreed to design future versions of Windows that will allow for
easier installation of non-Microsoft software. They have also agreed
to be monitored for proper procedure and even allow- themselves to
be sued if a competitor does not feel that they are acting properly.
With concessions such as these it only makes sense to support
this settlement. It is clearly beneficial for the consumer, the IT
sector and our economy as a whole. I urge you to help support it in
its current state and not waste more time, energy and money that
could be better spent elsewhere.
Sincerely,
Marcia Levinson
cc: Senator Rick Santorum
MTC-00030596
FROM: RICK & SHERRY BEATTY FAX NO. : 360 779 4958 Jan. 27 2002
01: 06PM P1
P.O. Box 135 Keyport, Washington 98345 January 12,2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I would like to express my support for Microsoft in the
government's antitrust case. A settlement has been reached and I
think that it should be respected. Microsoft has been punished
enough in the last three years. This lawsuit has been a waste of
time and money. Everyone, the government included, has better things
to do than pursue a lawsuit that punishes a company for being
successful.
It is a total injustice to allow every competitor of Microsoft
to continue their influence over the courts and to blame Microsoft
for their own inability to have and market a better product. I don't
believe there has been one consumer financially damaged by
Microsoft's business tactics. Enough is Enough.
Microsoft may have made some mistakes, but they are ready to
change their ways. The settlement is evidence of that. Microsoft is
conceding a great deal in order to move on. They are giving away
some of their technology information and making it easier for
consumers to use non-Microsoft programs within their Windows
platform. Please respect the efforts of Microsoft and their
supporters. This settlement is fair and is a good ending to this
whole mess.
Sincerely,
Richard R Beatty
MTC-00030597
FROM : RICK & SHERRY BERTTY FAX NO. : 360 779 4958 Jan. 27 2002
01:06PM P2
P.O. Box 135 Keyport, Washington 98345
January 12,2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I would like to express my support for Microsoft in the
government's antitrust case. A settlement has been reached and I
think that it should be respected. Microsoft has been punished
enough in the last three years. This lawsuit has been a waste of
time and money. Everyone, the government included, has better things
to do than pursue a lawsuit that punishes a company for being
successful.
Microsoft may have made some mistakes, but they are ready to
change their ways. The settlement is evidence of that. Microsoft is
conceding a great deal in order to move on. They are giving away
some of their technology information and making it easier for
consumers to use non-Microsoft programs within their Windows
platform. Please respect the efforts of Microsoft and their
supporters. This settlement is fair and is a good ending to this
whole mess.
Sincerely,
Sherry Beatty
MTC-00030598
JAN-27-2002 01: 44P FROM: Dale L i 11 i e
918-492-9541
TO: 12023071454 P: 1/2
5622 E70th PL
Tulsa, OK 74138-8413
Phone: 918-492-5806
Fax: 918-492-9341
To: ??Dept. of ??
From: Dale G Lillie
Fax: 1-202-307-1454
Date: Jan 27, 2002
Phone:
Pages: 2
Re: Microsoft ??eff??
CC:
Urgent For Review Please Gomment Please Reply Please Recycle
-Comments:
River Forecast Group
5622 E 78 PL
Tuha OK 741.30-8413
www.River Forec???. corn
January 27,2002
U. S Department of Justice
Antitrust Division
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Dear Sir or Madam:
I strongly urge the U.S. Department of Justice to settle the
Microsoft case now and enter the revised proposed Final Judgment.
The case brought against Microsoft was motivated primarily by
competitive malice. Settling this case is certainly in the public
interest.
Microsoft has been a boon to me by bringing lower PC prices,
faster and better computing, and better software development tools.
In addition, this lawsuit has cost investors, literally hundreds of
billions of dollars.
I have gladly purchased and used Microsoft products for over 20
years. Professionally, 1 have developed many systems based on
Microsoft software products. During this time I have interacted with
Microsoft personnel at many levels. At no time did I think that the
relationship with Microsoft was not fair or beneficial to me as well
as to other parties involved To the contrary, I believe that
Microsoft to a large degree is responsible for the current economic
good health of the USA, as well as many other countries of the
world.
It is time to end this antitrust action begun in 1997
Sincerely,
Dale G Lillie
Principal, River Forecast Group
MTC-00030599
01/12/1995 02: 38 4072996027 VINCENT PAGE 01
1609 Hinckley Road Orlando, FL 32818-5927
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW Washington, DC
20530-0001
January 26, 200
Dear Mr. Ashcroft:
I am writing to express my disapproval with the last three years
of litigation brought against Microsoft by the US department of
Justice. Microsoft has been the cornerstone of the Technology
Industry, and its capacity to generate wealth and create jobs for
our nation should not be overlooked. Our Government needs to stop
interfering in free enterprise and start worrying about more
pertinent issues like security.
The terms of the settlement do not let Microsoft off easily as
they stipulate Microsoft will have to disclose interfaces that are
internal to Windows operating system products and also grant
computer makers broad new rights to configure Windows so as to make
it easier for non-Microsoft products to be promoted. This, I believe
will be a detriment to Microsoft, the consumer and the free market
as we know it.
I urge your office to do what is right for the American public
and the Information Technology sector by implementing the
settlement. The nine states that want to continue litigation should
be reprimanded and this case should come to an end. Thank you for
your time.
Sincerely,
Carol Vincent
MTC-00030600
aai
The American Antitrust Institute
2919 ELLICOTT ST, NW . WASHINGTON, DC 20008
January 24, 2002
Renata Hesse
Trial Attorney
[[Page 28928]]
Antitrust Division
U.S. Department of Justice
601 D Street, NW, Suite 1200
Washington, DC 20530
Facsimile: (202) 616-9937 or (202) 307-1454
E-mail: microsoft.atr @ usdoj.gov
Re: AAI Tunney Act Comments
The American Antitrust Institutes submits these comments under
the Tunney Act. Separately, we have filed with the U.S. District
Court a complaint for declaratory and injunctive relief, arguing
that failures of the U.S. and Microsoft to comply fully with the
requirements of the Tunney Act have kept us and the public generally
from receiving all the information that is required by statute as a
basis for these comments. With that in mind, these comments must be
viewed as preliminary, subject to amendment or expansion if and when
additional public disclosures are made.
The American Antitrust Institute ("AAI") is an
independent non-profit education, research and advocacy
organization, described in detail at www.antitrustinstitute.org. The
mission of the AAI is to support the laws and institutions of
antitrust. To our knowledge, we are the only public interest
organization devoted solely to the field of antitrust.
Executive Summary
This Court should reject the Proposed Final Judgment
("PFJ") between Microsoft, the U.S. Department of
Justice ("DOJ"), and the settling states. The PFJ is not
in the "public interest," as this term is defined under
the Tunney Act.\1\ 1 The PFJ is ambigous, will be extraordinarily
difficult, if not impossible, to implement and affirmatively harms
consumers and other third parties. Most importantly, however, the
PFJ constitutes a mockery of judicial power since it fails to
satisfy any of the remedial goals established by the Court of
Appeals.
---------------------------------------------------------------------------
\1\ 1 15 USCS Section 16(e).
---------------------------------------------------------------------------
Standard of Review. Under the Tunney Act a reviewing court is
not permitted to "rubber stamp" a proposed consent order
if that consent order makes a "mockery of judicial
power." \2\ Normally, this standard gives substantial
discretion to the DOJ's determination of what is in the
"public interest." But this deference is not appropriate
in cases like this one where there has been a full trial and
decision on the merits.\3\ In such cases the court has a special
obligation to ensure that the remedial goals of the court that
imposed liability on the defendant--in this case the D. C.
Court of Appeals \1\--have been met. A consent judgment,
such as the PFJ, which effectively ignores the findings of liability
and remedial goals expressly stated by a unanimous en banc decision
of the Court of Appeals is a mockery of judicial power.
---------------------------------------------------------------------------
\2\ The Antitrust Procedures and Penalties Act of 1974:
Hearings on S. 782 and S. 1088 Before the Subcomm. on Antitrust and
Monopoly of the Senate Comm. on the Judiciary, 93d Cong. 1 (1973).
(opening remarks of Senator Tunney); United States v. ABA, 118 F.3d
776, 783 (DC Cir. 1997)
\3\ See Section I(A), infra
\4\ United States v. Microsoft Corp., 253 F.3d 34 (DC Cir.
2001) (hereinafter "Microsoft III").
---------------------------------------------------------------------------
Even when courts are reviewing consent orders entered before a
trial, a consent judgment is not in in the "public
interest" if it: (1) is ambiguous; \1\ 5 (2) presents
foreseeable problems in compliance and implementation; \6\ or
(3) affects third parties detrimentally.\7\ Since virtually every
key provision in the PFJ is ambiguous, will be extraordinarily
difficult to implement, and will have a direct and substantial
detrimental effect on consumers and other third parties, the PFJ is
not in the "public interest" even under the lower
standards of scrutiny applied to pretrial settlements.
---------------------------------------------------------------------------
\5\ United States v. Microsoft Corp., 56 F. 3d 1448, 1461
(1995) (the reviewing judge "should pay special attention to
the decree's clarity").
\6\ Id. at 1462 (if the judge "can foresee
difficulties in implementation we would expect the court to insist
that these matters be attended to").
\7\ Id ("certainly, if third parties contend that
they would be positively injured by the decree, a district judge
might well hesitate before assuming that the decree is
appropriate.").
---------------------------------------------------------------------------
Substantive Failings of the PFJ. The DOJ asserts that the PFJ
"will provide a prompt, certain and effective
remedy." \8\ While a prompt, certain and effective
remedy is often better than a perfect remedy achieved after extended
litigation, virtually any remedy this Court would order after
litigation would be better than the PFJ. The PFJ is neither prompt,
certain, nor effective.
---------------------------------------------------------------------------
\8\ Competitive Impact Statement ("CIS"), p.
2.
---------------------------------------------------------------------------
A prompt remedy would take effect quickly and provide procedures
to enforce swift compliance. Most of the so-called restrictions on
Microsoft's conduct will not take effect for 12 months.\9\ Given the
rapid pace of change in information technology, Microsoft's
dominance of the covered middleware markets may well be a fait
accompli before much of the PFJ would take effect. The procedural
provisions also fail to provide for quick resolution of disputes
over compliance. The Technical Committee cannot resolve disputes,
but only "advise" Microsoft and the government of its
conclusions.\10\
---------------------------------------------------------------------------
\9\ See, e.g., PFJ sections III.D and III.H.
\10\ See PFJ section IV.D.4.c. Moreover, the PFJ's
"gag orders" prohibiting both testimony from Committee
members and use of their work product in enforcement proceedings
will cause further delay since enforcement will always require the
government to duplicate the Committee's work in amassing evidence.
---------------------------------------------------------------------------
A certain remedy, at the very least, would set forth a clear
delineation of what Microsoft can and cannot do. Yet many of the
most important putative restrictions on Microsoft are vague and all
are riddled with exceptions and qualifications. This lack of clarity
will almost certainly compound the delay already present in the PFJ
since the inevitable differences of opinion cannot be resolved
without extended litigation to determine the "intent" of
the parties according to the rules of contract law.
Finally, and most fundamentally, the remedy should be effective.
As the Court of Appeals explained, a remedy should (1) free the
market place from the effects of Microsoft anticompetitive conduct,
(2) deny to Microsoft the fruits of its illegal monopolization, and
(3) ensure that Microsoft does not undertake similar practices
likely to result in future monopolization.\11\ Yet the PFJ
affirmatively allows some of the most egregious anticompetitive acts
such as the commingling of middleware and operating system
software.\12\
---------------------------------------------------------------------------
\11\ United States v. Microsoft Corp., 253 F.3d 34, 103
(DC Cir. 2001). The PFJ does nothing to deprive Microsoft of the
fruits of illegal monopolization, and the DOJ's Competitive Impact
Statement ("CIS") omits this goal in its discussion of
the remedial goals. CIS, pp. 2 and 24.
\12\ See Section II infra.
---------------------------------------------------------------------------
The following comments focus upon the deficiencies of the PFJ
rather than attempt to propose alternative measures. Nonetheless, we
urge the Court to consider the proposals put forward by the nine
dissenting states. These proposals correct many of the PFJ's
deficiencies identified in these comments.
Discussion
I. Standards of Review: The Tunney Act Requires Careful Review
of the PFJ To Determine Whether It Is In The Public Interest
The Microsoft case is widely considered the most important
antitrust case of our time. It is critically important to the future
of antitrust that this case be decided--or settled--on the
merits in a way that the public will perceive justice to have been
achieved. All the more so when Microsoft has been found (after a
full trial and by a unanimous landmark appellate opinion) to have
abused a monopoly in an industry that all agree will have a profound
impact on our future. With so many economic interests affected in
cases like this, it is important that special efforts be made to
keep antitrust settlements transparent so that the public will
recognize them to be free of political taint or corruption.
A. Especially Careful Review Is Warranted in a Fully Litigated
Case
The Tunney Act directs Courts to carefully scrutinize proposed
antitrust Consent Orders.\13\ The Tunney Act mandates that the Court
shall make an independent inquiry into whether the decrees, and it
will assure that the courtroom rather than the backroom becomes the
final arbiter in antitrust enforcement." The Antitrust
Procedures and Penalties Act of 1974: Hearings on S. 782 and $. 1088
Before the proposed consent order is in the "public
interest," \14\ and authorizes the Court to take
evidence and receive arguments to assure itself that the consent
order serves the public interest.\15\ As noted in the landmark
Tunney Act decision of United States v. AT&T, a degree of
deference to the DOJ in the reviewing the consent order is
appropriate--otherwise, parties would have no incentive to
compromise and settle.\16\ The
[[Page 28929]]
AT&T court also noted, however, that the standard of review
would vary depending on the circumstances.\17\ AT&T rejected the
notion that courts must unquestioningly accept a proffered decree as
long as it somehow, and however inadequately, deals with the
antitrust and other public policy problems implicated in the
lawsuit. To do so would be to revert to the "ber stamp, role
which was at the crux of the congressional concerns when the Tunney
Act became law." \18\
---------------------------------------------------------------------------
\13\ The Tunney Act "will make our courts an
independent force rather than a rubber stamp in reviewing consent
Subcomm. on Antitrust and Monopoly of the Senate Comm. on the
Judiciary, 93d Cong. 1 (1973). (opening remarks of Senator Tunney).
\14\ 15 U.S.C. 16(e).
\15\ 15 U.S.C. 16(0.
\16\ See United States v. AT&T, 552 F. Supp. 131, 151
(1982) ("If courts acting under the Tunney Act disapproved
proposed consent decrees merely because they did not contain the
exact relief which the court would have imposed after a finding of
liability, defendants would have no incentive to consent to judgment
and this element of compromise would be destroyed. The consent
decree would thus as a practical matter be eliminated as an
antitrust enforcement tool, despite Congress" directive that
it be preserved. See S.Rep. No. 93-298, supra, at 6; H.R.Rep.
No. 93-1463, supra, at 6.")
\17\ "It follows that [where no evidence has been
taken and no liability has been found] a lower standard of review
must be applied in assessing proposed consent decrees than would be
appropriate in other circumstances. H.R.Rep. No. 93-1463,
supra, at 12. For these reasons, it has been said by some courts
that a proposed decree must be approved even if it falls short of
the remedy the court would impose on its own, as long as it falls
within the range of acceptability or is "within the reaches of
public interest." United States v. AT&T, 552 F. Supp. 131,
151 (1982)
\18\ United States v. AT&T, 552 F. Supp. 131,151
(1982), aff'd sub nom. Maryland v. United States, 460 U.S. 1001
(1983).
---------------------------------------------------------------------------
The need for deference is important in cases where there has
been no trial since the "public interest" must include
consideration not only of an appropriate remedy but also whether and
for what the defendant may be found liable at trial.\19\ More
importantly, the court has little knowledge of the determinative
facts. But once a trial has established the defendant's liability,
the need for deference diminishes greatly. As the court in AT&T
stated, the concern "that the courts would generally not be
able to render sound judgments on settlements because they would not
be aware of all the relevant facts ... is of relatively little
relevance here, for this Court has already heard what probably
amounts to well over ninety percent of the parties" evidence
both quantitatively and qualitatively, as well as all of their legal
arguments[, and the reviewing court] is thus in a far better
position than are the courts in the usual consent decree cases to
evaluate the specific details of the settlement." \20\
Once liability has survived appellate scrutiny, as in the case at
bar, the need for deference to the DOJ's understanding of the public
interest almost completely vanishes since the only consideration
left in determining the public interest is whether the consent order
does in fact remedy the defendant's violation of the law.
---------------------------------------------------------------------------
\1\ At pretrial stage, "[r]emedies which appear less
than vigorous may well reflect an underlying weakness in the
government's case, and for the district judge to assume that the
allegation in the complaint have been formally made out is quite
unwarranted." United States v. Microsoft Corp., 56 F.3d 1448,
1461 (DC Cir. 1995) ("Microsoft I").
\20\ us v. A T & T, 552 F. Supp. 131,152 (D.DC 1982).
---------------------------------------------------------------------------
The DOJ argues for a cursory review, limited to the allegations
contained in the complaint.\21\ The DOJ's argument, however, relies
on cases such as the 1995 Microsoft consent decree case
("Microsoft/"),\22\ where the case settled prior to a
trial. Microsoft I, however, was expressly concerned with the entry
of a consent decree where "there are no findings that the
defendant has actually engaged in illegal
practices." \23\ While Microsoft I was correct in
stating that it would be "inappropriate for the judge to
measure the remedies in the [pretrial settlement] decree as if they
were fashioned after trial," \24\ in the case at bar,
there has in fact been a trial, a finding of liability and an
affirmance of that finding on appeal. The DOJ also relies on
selected passages from AT&T while ignoring the passages quoted
here. Simply put, the law does not compel the court to ignore the
record developed at trial and affirmed on appeal as the DOJ asserts.
---------------------------------------------------------------------------
\21\ CIS, pp. 65-68.
\22\ United States v. Microsoft Corp., 56 F.3d 1448 (DC
Cir. 1995) ("Microsoft I").
\23\ Id. at 1460-61.
\24\ Id. at 1461.
---------------------------------------------------------------------------
The Court in this case faces an unprecedented situation.
Although almost all Tunney Act proceedings have involved cases where
the litigation has not started, in this case the facts and law have
been fully argued. There are findings of liability by both a
District Court and Court of Appeals.\25\ The public has expended
large amounts of money and time in establishing the facts and the
specific nature of a substantial violation of the antitrust laws.
The only thing remaining in this historic, massive and protracted
case, before the PFJ was signed, was the remedy proceeding.
---------------------------------------------------------------------------
\25\ United States v. Microsoft Corp., 87 F. Supp. 2d 30
(D.DC 2000) ("Conclusions of Law"), United States v.
Microsoft Corp., 253 F.3d 34, 117 (DC Cir. 2001) ("Microsoft
III")
---------------------------------------------------------------------------
We have not located another case in which the settlement
occurred this late in a proceeding. In prior Tunney Act proceedings
there were few, if any facts established through the legal process
and the Court's knowledge of the facts was admittedly limited.\26\
Here, all of the trial court's Findings of Fact were affirmed by the
Court of Appeals.\27\ It also agreed with Judge Jackson that
Microsoft had violated the antitrust laws.\28\
---------------------------------------------------------------------------
\26\ The closest example was the AT&T settlement, US
v. A T & T, 552 F. Supp. 131 (D.DC 1982), aff'd sub nom.
Maryland v. United States, 460 U.S. 1001 (1983). The Settlement was
agreed upon during the trial, before the Court had issued its
decision.
\27\ United States v. Microsoft Corp., 253 F.3d 34, 117
(DC Cir. 2001).
\28\ Id., 60-80.
---------------------------------------------------------------------------
These unique circumstances require that this Court should
carefully follow the instructions of the Court of Appeals as to what
constitutes an appropriate remedy.\29\ As was held by the Court of
Appeals: the remedy must (a) restore competition to the illegally
monopolized market,\30\ (b) deprive the violator of the
"fruits" of its illegal acts,\31\ and (c) prevent the
violator from engaging in similar behavior in the future.\32\
---------------------------------------------------------------------------
\29\ See, Jonathan B. Baker and Andrew I. Gavil, Ill-
Gotten Gains, Toothless Settlement Lets Microsoft Keep Rewards of
Monopolization, The Legal Times, Nov. 12, 2001, available at. http:/
/www.antitrustinstitute.org/recent/152.cfm. ("When the
settlement follows trial and appeal, judicial concerns about
encroaching on prosecutorial power to decide what charges to bring
and congressional concerns about uninformed courts venturing into
the realm of prosecutorial discretion--both of which underlie
the narrow role allotted the District Court in the usual Tunney Act
review--are mooted. Once the nature and scope of the violations
have been determined, as they have here, all that is left is to set
the appropriate remedy--a peculiarly judicial task, concerning
which the executive branch may advise but not encroach")
\30\ The Court of Appeals explained: "The Supreme
Court has explained that a remedies decree in an antitrust case must
seek to "unfetter a market from anticompetitive
conduct," United States v. Microsoft Corp., 253 F.3d 34, 103
(DC Cir. 2001).
\31\ Quoting the Supreme Court, the goal is to
"terminate the illegal monopoly, deny to the defendant the
fruits of its statutory violation..." Id.
\32\ "[E]nsure that there remain no practices likely
to result in monopolization in the future," United States v.
United Shoe Mach. Corp., 391 U.S. 244, 250, 20 L. Ed. 2d 562, 88 S.
Ct. 1496 (1968), quoted in United States v. Microsoft Corp., 253
F.3d 34, 103 (DC Cir. 2001).
---------------------------------------------------------------------------
In a case that has proceeded as far as this one, this Court
should use its substantial discretion to see that the views of the
Court of Appeals as to what constitutes appropriate relief is
implemented. Accordingly, this Court is only under a limited
obligation to give deference to the DOJ as to whether the Court of
Appeals requirements have been satisfied. Indeed, at this stage of
the proceedings, the very nature of this task is more of a judicial
function than a prosecutorial function. Accordingly, a settlement at
this stage will be in the "public interest" only if
these three requirements of a remedy are strictly achieved. This
Court has an obligation to the Court of Appeals to ensure that this
occurs.
B. Especially Careful Review Is Warranted By the Importance of
this Case to the Economy
All cases are of great importance to the litigants, but few
cases have far reaching economic consequences on their own. From
this point of view, it is no exaggeration to say that this Court is
reviewing the most important consent order since the break up of
AT&T a generation ago. The words of the court in A T& T
apply with equal force to the case at bar: This is not an ordinary
antitrust case. The American Telephone and Telegraph Company, with
its various components and affiliates, is the largest corporation in
the world by any reckoning, and the proposed decree, if approved,
would have significant consequences for an unusually large number of
ratepayers, shareholders, bondholders, creditors, employees, and
competitors .... [the decree would have] a potential for substantial
private advantage at the expense of the public interest. In view of
these considerations, and of the potential impact of the proposed
decree on a vast and crucial sector of the economy and on such
general public interests as the cost and availability of local
telephone service, the technological development of a vital part of
the national economy, national defense, and foreign trade, the Court
would be derelict in its duty if it adopted a narrow approach to its
public interest review responsibilities.\33\
---------------------------------------------------------------------------
\33\ United States v. A T & T, 552 F. Supp. 131,151
(D.DC 1982) (emphasis added).
---------------------------------------------------------------------------
Virtually the same thing could be said with respect to the
position of Microsoft within
[[Page 28930]]
the personal computer and Internet industry. The personal computer
industry and the Internet now reach into almost every facet of the
economy. Consumers of personal computers, just like consumers of
telecommunications services a generation ago, have an enormous stake
in ending the monopoly and enjoying the choices of new technologies
and other benefits from a newly competitive marketplace. With so
much at stake, any court would be derelict in its duty under the
Tunney Act if it did not carefully review the PFJ to ensure that its
entry is in fact in the public interest.
C. Especially Careful Review Is Warranted Because the PFJ Is
Ambiguous, Difficult to Implement and Enforce, and Will Harm
Consumers and Other Third parties
Under the Tunney Act, even when courts review consent orders
entered into before a trial, they are charged with providing an
especially close review to those portions of the consent order that:
(a) are ambiguous (i.e., the reviewing judge "should pay
special attention to the decree's clarity" \34\ since it
will be very difficult for the Court to administer unclear
provisions); (b) relate to compliance mechanisms (if the judge
"can foresee difficulties in implementation we would expect
the court to insist that these matters be attended
to") \35\ and (c) affect third parties detrimentally
("certainly, if third parties contend that they would be
positively injured by the decree, a district judge might well
hesitate before assuming that the decree is
appropriate.") \36\
---------------------------------------------------------------------------
\34\ United States V. Microsoft Corp., 56 F.3d 1448, 1463
(1995).
\35\ Id. at 1462.
\36\ Id.
---------------------------------------------------------------------------
Every key provision in the PFJ is ambiguous and therefore
unlikely to effectively achieve its desired result, will be
extraordinarily difficult if not impossible effectively to
implement, and will have direct and substantial detrimental effect
on a number of third parties, including consumers.
These are three additional reasons why this Court should
scrutinize the PFJ especially closely. Section II of this Discussion
also will show that this scrutiny will reveal to the Court that the
PFJ is not in the "public interest." Section II of this
discussion will demonstrate why this Court should reject the PFJ
because: (a) key terms are so ambiguous or riddled with loopholes
that they will not achieve any of the objectives of the relief
portion of this litigation; and (b) difficulties in implementation,
including the ineffective and cumbersome enforcement mechanism, will
similarly serve to render the PFJ toothless. These two problems will
exacerbate other features of the PFJ, which will cause significant
injury to many third parties, including in particular consumers.
D. Especially Close Review Is Warranted Because the PFJ Is a
"Mockery of Judicial Power"
Finally, under the Tunney Act a reviewing court should not
"rubber stamp" a proposed Consent Order that makes a
"mockery of judicial power." \37\ The PFJ does
exactly this.
---------------------------------------------------------------------------
\37\ United States v. ABA, 118 F.3d 776, 783 (DC Cir.
1997) ("The district court must examine the decree in light of
the violations charged in the complaint and should withhold approval
only if any of the terms appear ambiguous, if the enforcement
mechanism is inadequate, if third parties will be positively
injured, or if the decree otherwise makes "a mockery of
judicial power"); See also, United States v. Central Parking
Corp., 2000 U.S. Dist. LEXIS 6226 (D. DC 2000) (It appears, upon
examination in light of the violations charged in the complaint,
that the terms of the decree are not ambiguous, that the proposed
enforcement mechanism is adequate, that third parties will not be
"positively injured," and that the decree does not make
a mockery of judicial power);United States v. Microsoft Corp., 56
F.3d 1448, 1462 (DC Cir. 1995).
---------------------------------------------------------------------------
Although a prompt, certain and effective remedy is often better
than a perfect remedy achieved after extended litigation, virtually
any remedy that this Court would order after litigation would be
better than the PFJ. Section II of this discussion will demonstrate
that the PFJ is neither prompt, certain, nor effective.
If the Court of Appeals" three requirements for an
adequate remedy are not satisfied, the public's investment in this
case will be wasted and the public interest will not be served.
Worse, future monopolists will be sent a signal that they will not
be made to account for their illegal behavior, and so many might
conclude that the entire Microsoft proceeding has been a mockery of
judicial power.
E. The Court Should Not Make its Tunney Act Determination Until
It Has Heard The Nonsettling States" Evidence As To Which
Remedy Is In The Public Interest Not only is this case unique in
that the consent order has been submitted after a finding of
liability has been made and upheld on appeal, it is also unique in
that the Court continues to have a responsibility to fashion a
remedy independent of whether it accepts the PFJ in its current or
in modified form. This is because nine of the Plaintiff states did
not accept the terms of the PFJ.
Clearly, these non-settling Plaintiff states in the Microsoft
case believe that the PFJ is an unsatisfactory remedy for
Microsoft's illegal conduct.\38\ They believe that only much more
stringent remedies would constitute an effective remedy.\39\ They
have asked for, and are entitled to, a hearing on their proposed
remedy, and this remedy hearing is scheduled to start on March
11.\40\
---------------------------------------------------------------------------
\38\ These states filed their own proposal with the Court
on December 7, 2001.
\39\ Id.
\40\ See Scheduling Order filed October 2, 2001.
---------------------------------------------------------------------------
The peculiar situation of this "two track"
proceeding requires that the Court hold off its decision under the
Tunney Act until after it has heard the arguments to be presented by
the nine non-settling States. These plaintiffs have a constitutional
right to completion of the trial, and this includes the right to a
Hearing before a Court that not only is unbiased, but also a Court
that appears to be unbiased. However, if this Court rules under the
Tunney Act that the PFJ is in the "public interest"
prior to the completion of the non-settling States" hearing,
this Court will appear to be biased. It will appear that, even
before this Court has heard the evidence that the plaintiff states
produce during the March 11 hearing, this Court already had
determined the appropriate remedy in the Microsoft case.
To avoid even the appearance that this Court has prejudged the
plaintiff-states" case, this Court should receive and
carefully review the public comments on the PFJ, and receive and
carefully review the Justice Department's responses. But then this
Court should hold off making a Tunney Act determination until the
plaintiff-states" hearing is completed.
This is especially true in light of the overall purpose of the
Tunney Act. The Tunney Act granted authority to the Court to take
additional evidence in order to ascertain whether the remedy is in
the "public interest." It sets deadlines for the DO J,
the defendant and the public, but it does not prevent this Court
from waiting until the remaining parties have presented their
evidence.
Moreover, this delay will not cause any hardship to Microsoft,
which has sought to delay the remedial proceedings in this case on
numerous occasions. Since not postponing of the Court's Tunney Act
determination would harm the remaining plaintiffs by depriving them
of their right to a remedy determination that appears to be
unbiased, and will not adversely affect Microsoft, a balancing of
the equities (as would be done in a preliminary injunction
proceeding) clearly suggests that the Court should not make a Tunney
Act "public interest" determination until all of the
evidence concerning the appropriate remedy is before this Court.
It is important to stress the need for further evidence and
argumentation with respect to the remedy in this complicated case.
As commentators under the Tunney Act, we are asked to rely on the
Competitive Impact Statement ("CIS") filed by the
Department of Justice. The CIS mentions that the Department
considered a variety of alternative remedies, but it fails utterly
to analyze them, saying in less than one page, conclusorily and in
disregard of its obligation to help the public comment on the case,
that it has rejected all alternatives. Without the detailed
explanation by the Government of why various alternatives (including
many that were proposed by the American Antitrust Institute) were
rejected, it is impossible for the public commentors to play their
proper role under the Tunney Act in providing the Court with advice
as to the implications of the PFJ. Because of this shortcoming, it
is especially appropriate for the Court to hear the evidence in
support of alternative remedies that will be promulgated by the non-
settling States before judging what is in the public interest.
II. Substantive Failings of the Proposed Final Judgment
As noted in the previous section, the Court is not to
"rubber stamp" whatever settlement the DOJ puts forward.
The degree of deference given the DOJ depends on the stage of the
proceeding.
Where, as here, the issues of liability been fully litigated and
the remedial goals clearly established, the Court is obligated to
ensure that any consent order fulfills those goals. Under this
standard, the Court should reject the PFJ as a mockery of judicial
power. But
[[Page 28931]]
even under the more deferential standards used to review pretrial
consent orders, the Court should reject the PFJon grounds that it is
ambiguous, unenforceable, injures consumers and other third parties.
A. The PFJ Constitutes a Mockery of Judicial Power
This case presents unique circumstances in that the issues of
liability have been fully litigated and affirmed by the Court of
Appeals in an unanimous en banc decision. Consequently, the Court
must strictly follow the standard for a proper remedy established by
the Court of Appeals: "a remedies decree in an antitrust case
must seek to [1] "unfetter a market from anticompetitive
conduct," [2] "terminate the illegal monopoly, deny to
the defendant the fruits of its statutory violation, and [3] ensure
that there remain no practices likely to result in monopolization in
the future." \41\ The PFJ fails to prohibit the most
pernicious anticompetitive conduct identified by the Court of
Appeals and does nothing to inhibit Microsoft's power to continue to
use these tactics to maintain its operating system
("OS") monopoly or to expand that monopoly into other
markets. Not only does the PFJ do absolutely nothing to deprive
Microsoft of the fruits of its monopoly, the Competitive Impact
Statement ("CIS") filed by the DOJ does not even mention
this remedial goal mandated by the Court of Appeals. A proposal
which completely ignores critical holdings of the Court of Appeals
consitutes a mockery of judicial power.
---------------------------------------------------------------------------
\41\ Microsoft III, 253 F.3d at 103 (citations omitted).
---------------------------------------------------------------------------
1. Failure to Prohibit Anticompetitive Integration of Middleware
and the Operating System
The PFJ fails to restrict, let alone prohibit, the most
egregious types of illegal activity identified by the Court of the
Appeals, Microsoft's integration of its products into the Operating
System. As with many of the deficiencies in the PFJ, Microsoft's
continuing and unfettered ability to integrate products into the
operating system transgresses all three remedial goals established
by the Court, for it is not only the most important tool used by
Microsoft to maintain its current monopoly and create new ones, the
exclusive power to integrate software into the operating system is a
fruit of Microsoft's illegally maintained monopoly.
While the DOJ completely ignores the Court of Appeals mandate to
deprive Microsoft of the fruits of illegal monopoly, the CIS
concedes that appropriate relief should, among other things,
"end the unlawful conduct." \42\ The Court of
Appeals unanimously and squarely held that Microsoft's integration
of the browser middleware and the operating system "constitute
exclusionary conduct, in violation of 2" of the
Sherman Act.\43\ More specifically, the Court of Appeals found that
Microsoft violated the law by commingling software code and by
failing to create a way to remove the commingled code from the
operating system.\44\ Not only does the PFJ fail to end this
unlawful conduct by requiring Microsoft either to stop the
commingling or to provide a way to remove the commingled code, the
PFJ actually endorses such anticompetitive integration by giving
"Microsoft in its sole discretion" the right to
determine the "the software code that compromises a Windows
Operating System Product." \45\ It is hard to imagine
anything that could more readily constitute a mockery of judicial
power than to authorize the defendant to engage in conduct which the
court has specifically found to be illegal. Yet that is precisely
what the PFJ does.
---------------------------------------------------------------------------
\42\ CIS, p. 24.
\43\ United States v. Microsoft Corp., 253 F.3d 34, 67 (DC
Cir. 2001); CIS, pp.3 and 7.
\44\ Id. at 66-67
\45\ PFJ, sec. VI.U.
---------------------------------------------------------------------------
The importance of integration to Microsoft's ability to maintain
and extend its monopoly can hardly be understated. It is Microsoft's
weapon of mass destruction against competition. Network effects
assure that middleware distributed with every new PC will dominate
the market and drive out even superior products simply because the
middleware is distributed with every new PC. In markets
characterized by network effects, ubiquity beats quality. Microsoft
can achieve this universal distribution without resort to threats of
retaliation or contractual restrictions simply by commingling its
middleware code with the operating system software code. As the
Court of Appeals found, Microsoft can and has used this type of
integration to snuff out middleware that threatened the applications
barrier to entry which protects Microsoft's operating system
monopoly. So important is this weapon to Microsoft that it sought a
rehearing on this matter, despite the fact that the Court had
unanimously found that the conduct violated Section 2 of the Sherman
Act. Not surprisingly, the Court of Appeals refused to rehear the
issue.\46\
---------------------------------------------------------------------------
\46\ United States v. Microsoft 2001 U.S. App. LEXIS 17137
(DC Cir.)
---------------------------------------------------------------------------
The Court of Appeals identified two types of illegal
integration, commingling the browser middleware code with the
operating system and excluding the browser middleware code from the
Add/Remove programs utility. Yet the PFJ neither prohibits
commingling nor mandates a method of removing commingled code.
Section III.H of the allows OEMs and end users to hide Microsoft
middleware products, but Microsoft can force the OEMs to install
Microsoft middleware products as part of the operating system. OEMs
and consumers can remove the icons for Microsoft middleware
products, but neither OEMs nor consumers remove the middleware
product itself. It is simply untrue to say that OEMs will have
"freedom to make middleware decisions" \47\ when
Microsoft "in its sole discretion" can force OEMs to
distribute and consumers to accept Microsoft's middleware product as
part of the operating system.\48\
---------------------------------------------------------------------------
\47\ CIS, p.3.
\48\ 48 PFJ, sec. VIM.
---------------------------------------------------------------------------
Similarly, OEMs and end users can change the settings so that,
for example, the PC will launch RealPlayer instead of Microsoft's
Windows Media Player middleware to play certain types of music, but
neither the OEM nor the end user can really turn off the Windows
Media Player. Windows Media Player will still play the music
whenever "necessary for valid technical reasons to supply the
end user with functionality consistent with a Windows Operating
System Product." \49\
---------------------------------------------------------------------------
\49\ PFJ, sec. III.H.
---------------------------------------------------------------------------
Given the existence of network effects, this inability to turn
off, let alone remove, Microsoft middleware will ensure that
Microsoft defeat rivals offering cross platform alternatives.
Consider the music example. RealPlayer does not play music streamed
in Microsoft's proprietary format and Windows Media Player does not
play music streamed in RealNetworks proprietary format.
Consequently, whenever consumer wants to hear music streamed in
Microsoft's format, the PC will automatically play the music using
Windows Media Player even though the consumer or the OEM has
installed RealPlayer. But the situation is not reciprocal. If the
consumer or OEM has not installed RealPlayer and chosen it as the
option to play music, when the consumer attempts to listen music
streamed in RealNetwork's format the PC will not automatically
invoke RealPlayer.
Instead, the PC will display an error message, probably leading
the consumer to believe that the content provider's products are
defective. Now consider the position of content provider. She can
stream her music in RealNetwork's format, which may provide superior
features, but which can only be listened to on a subset of PCs.
Alternatively, she can stream her music in Microsoft's format and
have it play on all PCs, even PCs where the OEM or end user has
attempted to disable Windows Media Player. Of course, she will
choose to stream in Microsoft's format and as more and more content
providers reach the same obvious conclusion, demand for RealPlayer
will evaporate regardless of which format provides the better
quality music or lower prices. (Note that price is an issue. Even if
Microsoft does not charge a separate price for Windows Media Player,
Microsoft does sell the server software, encoding tools, etc., to
content providers.)
Realistically, ISVs cannot avoid the implications of integration
by purchasing installations from OEMs. The obstacles to successful
implementation of such a strategy are overwhelming. First, network
effects dictate that an ISV will have to purchase installation from
every OEM or it will fail to achieve the universal distribution
necessary to have a fighting chance against Microsoft.
The price for universal distribution will not be cheap. Again,
consider the plight of RealNetworks. Since an OEM cannot remove
Windows Media Player, Real Networks would have to compensate the OEM
for the additional testing, support and hardware costs of having two
media players installed on the PC.\50\ OEMs will demand payment
because the universal distribution needed by RealNetworks to survive
will also mean that an OEM cannot achieve a competitive advantage
over its rivals by installing RealPlayer, e.g., IBM cannot
differentiate its PCs from Dell's by installing RealPlayer when Dell
also installs RealPlayer, and if
[[Page 28932]]
RealPlayer is not installed on both IBM and Dell PCs, RealNetworks
cannot reasonably hope to survive against Microsoft in this
middleware market. The cost to RealNetworks is compounded by the
fact that Microsoft not only does not have to compensate the OEM for
the cost of installation, Microsoft also gets paid by the OEM for
installation of Windows Media Player as part of the overall royalty
for Windows. Consequently, every PC shipped would represent an
expense to RealNetworks and income to Microsoft. In short, any ISV
who seeks to challenge Microsoft in a middleware market will do so
at an enormous and probably insurmountable cost disadvantage.
---------------------------------------------------------------------------
\50\ Microsoft III, 253 F.3d at 64.
---------------------------------------------------------------------------
The PFJ contains provisions which further discourage ISVs from
challenging Microsoft's integrated middleware and diminish their
chances of success if they do. For example, the PFJ gives Microsoft
the right to have Windows automatically request the end user to
change back to Microsoft middleware fourteen days after the PC's
first use.\51\ Assume that RealNetworks convinces an OEM to install
RealPlayer and to configure the PC to use RealPlayer instead of
Windows Media Player for music. Two weeks after the consumer
purchases her new PC, she may be confronted with a pop up window
asking her to switch to Windows Media Player every time she tries to
listen to music. Microsoft is free to make it impossible to turn off
these incessant requests except by agreeing to turn off RealPlayer
and turn on Windows Media Player. Just to get rid of the annoying
message, at least some consumers will agree to switch to Windows
Media Player. In other words, RealNetworks cannot really purchase
more than fourteen days worth of installation on a PC. Microsoft,
however, will Windows Media Player permanently installed as part of
the operating system.
---------------------------------------------------------------------------
\51\ PFJ, sec. III.H.3
---------------------------------------------------------------------------
Microsoft also has an unrestricted right to automatically
override the consumer's or OEM's configuration whenever the consumer
installs "a new version of a Windows Operating System
Product." \52\ There are no restrictions on Microsoft's
power to issue "new versions" of Windows. Nor is there
any restriction on Microsoft's ability to update a consumer's PC to
these new versions automatically when the consumer connects to the
Internet. Microsoft is free to issue automatic updates to new
versions of Windows which do little more than sweep away the
configuration. So even among consumers who refuse Microsoft's
repeated requests to switch to Windows Media Player, the RealPlayer
installation may last only until Microsoft issues its next operating
system update.
---------------------------------------------------------------------------
\52\ PFJ, sec. III.H.3.
---------------------------------------------------------------------------
At best, therefore, all an ISV can purchase from an OEM will be
a temporary presence on many PCs. Not only will this discourage ISVs
from entering the market with competitive middleware products, those
who do will find that a temporary presence creates the same problems
as lack of universal distribution due to network effects. Why should
someone stream audio, write applications, etc., for a non-Microsoft
middleware product that is available on a hit or miss basis when
Microsoft middleware is universally present on a permanent basis?
There are two effective tools to deal with the issue of
anticompetitive integration: (1) prohibit integration by Microsoft
or (2) require Microsoft to include competitive middleware with the
operating system. The PFJ contains neither tool. Given a unanimous
en banc decision of the Court of Appeals holding that Microsoft
illegally commingled middleware code with the operating system, the
failure of the PFJ to provide either tool constitutes a mockery of
judicial power.
2. Microsoft Remains Free to Withhold Vital Information
Without disclosure of the operating system's APIs and related
information, IHVs, IAPs, ICPs, OEMs, and perhaps most importantly
ISVs cannot develop functional products that will work on Windows.
Microsoft used selective disclosure of this information as a reward/
retaliation mechanism in order to obtain compliance from third
parties in its effort to eliminate competition from cross platform
middleware products. Furthermore, by withholding information from
ISVs that is available to Microsoft's own developers or by
disclosing the information to ISVs later than the information is
made available to Microsoft's own developers, Microsoft can retard
an ISV's ability to develop competitive products, including
middleware.
In a competitive market for operating systems, Microsoft would
fully disclose all APIs and related information in order to attract
support from third parties and to make sure that their products
worked as well as they possibly could with the Windows operating
system. But Microsoft does not operate in a competitive marketplace,
and Microsoft has an incentive to engage in selective, incomplete
and delayed disclosures in order to prevent the development of cross
platform middleware products.
Rather than simply compel Microsoft to make the complete and
timely disclosures that would ordinarily be required by a
competitive marketplace, the PFJ puts into place a regime which
seems designed to preserve Microsoft's unbridled ability to exploit
its monopoly power through selective disclosure. For example, the
PFJ does not require disclosure of all APIs but only the subset of
"the APIs and related documentation that are used by Microsoft
Middleware to interoperate with a Windows Operating System
Product." \53\ There are a number of problems with this
restricted set of mandatory disclosures. First, ISVs may want to use
APIs in Windows that Microsoft does not happen to use for its own
middleware. While a certain API or set of APIs may be the best way
for Microsoft to implement its middleware on Windows, a different
set of APIs may prove better for a competitor's middleware. Under
the terms of the PFJ, however, Microsoft only has to disclose the
APIs used by its own middleware. In other words, and contrary to the
CIS, competitiors do not have access to the same APIs as Microsoft's
own middleware developers. Rather, they have access only to those
APIs used by Microsoft's middleware developers.
---------------------------------------------------------------------------
\53\ PFJ, sec. III.D.
---------------------------------------------------------------------------
Second, Microsoft has complete discretion over which APIs fall
into this subset of mandatory disclosures. Under the PFJ, an API is
limited to the interfaces "that Microsoft Middleware running
on a Windows Operating System Product uses to call upon that Windows
Operating System Product in order to obtain any services from that
Windows Operating System Product." \54\ The PFJ also
gives Microsoft complete control over what constitutes the
"Windows Operating System Product." \55\ The
repeated references to "Windows Operating System
Product" in the definition of APIs make clear that Microsoft
can refuse to disclose APIs simply by exercising its unfettered
discretion under the PFJ to remove those APIs from the
"Windows Operating System Product."
---------------------------------------------------------------------------
\54\ PFJ, sec. VI.A.
\55\ PFJ, sec. VI.U.
---------------------------------------------------------------------------
Third, the APIs used by important Micorosoft Middleware Products
such as Windows Media Player may not be subject to mandatory
disclosure. The PFJ does not require disclosure of the APIs used by
"Microsoft Middleware Products." Instead, the PFJ
requires disclosure of the APIs used by "Microsoft
Middleware." \56\ The definition of "Microsoft
Middleware Products" expressly includes not only Windows Media
Player, but also other important middleware such as Microsoft
Internet Explorer.\57\ However, these products are not expressly
included in the definition of "Microsoft
Middleware." \58\ Not all software which provides
"the same or substantially similar functionality as a
Microsoft Middleware Product" \59\ falls within the
definition of "Microsoft Middleware." It must also be
"distribute[d] separately separately from a Windows Operating
System Product to update that Windows Operating System
Product." \60\ If, for example, Microsoft ceases to
distribute Internet Explorer and Windows Media Player separately
from Windows or if Microsoft no longer treats these separate
distributions of Internet Explorer and Windows Media Player as
Windows updates, then Internet Explorer no longer constitutes
"Microsoft Middleware" and Microsoft no longer has an
obligation to disclose the APIs used by Internet Explorer.\61\
---------------------------------------------------------------------------
\56\ PFJ, sec. III.D and VI.A
\57\ PFJ, sec. V.K
\58\ PFJ, sec. VI.J
\59\ PFJ, see. VI.J.3.
\60\ PFJ, sec. VI.J. 1.
\61\ Note that Microsoft's current distribution of these
products for the Macintosh platform will not constitute the required
separate distribution because the Macintosh versions cannot be
updates to Windows.
---------------------------------------------------------------------------
Whether a product falls within the definition of
"Microsoft Middleware," and hence whether the APIs it
uses must be disclosed, also depends on whether the product is
trademarked.\62\ Under PFJ section VI.T, a product is
"Trademarked" if Microsoft claims a trademark in the
product, separate from its trademark claims for
"Microsoft??" and "Windows??," by, for
example, marking the name with the ??
[[Page 28933]]
character. But a product is not Trademarked if its name is
"comprised of the Microsoft ?? or Windows?? trademarks
together with descriptive or generic terms." In other words,
Microsoft Internet Explorer?? and Windows Media Player?? would be
Trademarked and the APIs used by those products would be subject to
disclosure. But Microsoft?? Internet Explorer and Windows?? Media
Player would not be Trademarked and the APIs used by those products
would not be subject to any mandatory disclosure. Under PFJ Section
VI.T, Microsoft "disclaims any trademark rights in such
descriptive or generic terms."
---------------------------------------------------------------------------
\62\ PFJ, sec. VI.J.2.
---------------------------------------------------------------------------
Consequently, if the Court enters the PFJ, Microsoft Internet
Explorer?? and Windows Media Player?? will automatically become
Microsoft?? Internet Explorer and Windows?? Media Player and the
APIs used by those products will fall outside the scope the PFJ's
mandatory disclosure provisions.
Fourth, the number of APIs subject to mandatory disclosure is
further reduced by PFJ section III.J.1 (a) which allows Microsoft to
refuse disclosure of APIs "which would compromise the security
of a particular installation or group of installations of anti-
piracy, anti-virus, software licensing, digital rights management,
encryption or authentication systems." The importance of the
APIs for these functions can be seen from the fact that anyone who
wishes to play music distributed by the PressPlay joint venture
created by two of the five major record labels will need access to
the digital rights management APIs. The CIS asserts that "the
APIs ... for the Secure Audio Path digital rights management service
... must be disclosed." \63\ Unfortunately, the CIS is
wrong. Section III.J.1(a) of the PFJ states: "No provision of
the Final Judgment shall ... [r]equire Microsoft to ... disclose ...
portions of APIs ... which would compromise the security of a
particular installation or group of installations of ... digital
rights management." The CIS appears to assume that
"installation" refers to an "end-user
installation," \64\ when, in fact, the the term
"end-user installation limitation" is not stated
anywhere in Section III.J.1.a. Installation could just as easily
mean Microsoft particular installation of this technology in Windows
generally as it could an consumer's particular installation on his
own PC. Indeed, the former interpretation is more probable, at least
with respect to APIs, since it is hard to conceive of a Windows API
installed only on the PC of one particular consumer.
---------------------------------------------------------------------------
\63\ 63 CIS, p. 35.
\64\ Page 51 of the CIS states that Section III.J.1.a is
"limited to specific end-user implementations of security
items."
---------------------------------------------------------------------------
Fifth, not only are ISVs limited to an articificially and
anticompetitively limited subset of the APIs, ISVs do not get access
to those APIs until the "last major beta test release"
of the Microsoft Middleware. In other words, ISVs can never hope to
catch up with Microsoft's own developers. While Microsoft's
developers presumably have access to new APIs as soon as they are
created, ISVs do not get access to new APIs until Microsoft releases
a beta version of the revised operating system to 150,000 or more
beta testers.\65\ It is not clear that Microsoft has ever had
150,000 beta testers in any of its beta testing programs.
---------------------------------------------------------------------------
\65\ PFJ, sec.III.D and. VI.R.
---------------------------------------------------------------------------
Sixth, the PFJ delays the initial disclosure of the APIs for a
year.\66\ There is no need for this delay. Microsoft already
discloses the APIs it wants to disclose through the Microsoft
Developer Network mechanism utilized by the PFJ. The CIS restates
the one year delay, but provides no justification for it.
Consequently, it is a mockery of judicial power to allow Microsoft
to continue this anticompetitive conduct for another year.
---------------------------------------------------------------------------
\66\ More specifically, the PFJ section III.D states that
the mandatory disclosures will begin "[s]tarting a the earlier
of the release of Service Pack 1 for Windows XP or 12 months after
submission of the [Proposed] Final Judgment for to the Court."
---------------------------------------------------------------------------
Finally, PFJ section J.2 empowers Microsoft to exclude Open
Source developers from access to many, if not all, APIs. The most
important source of competition for Microsoft may well come not from
commercial ISVs but the Open Source movement, i.e., the creators of
Linux, Apache, etc. While the Open Source movement has significant
potential for creating competition, the Open Source movement does
not constitute a for profit business or even a traditional nonprofit
business. Section III.J.2(b), however, gives Microsoft the right to
condition access to many APIs on proof of "a reasonable
business need for the API" and section III.J.2(c) allows
Microsoft to limit access to those who meet "reasonable,
objective standards established by Microsoft for certifying the
authenticity and viability of its business." Participants in
the Open Source movement will have difficulty establishing that they
are a business with business needs under many tests, but it will
certainly be impossible to meet the standards established by
Microsoft given that Microsoft has already attacked the Open Source
model as "unhealthy" and doomed to failure.\67\ Indeed,
Microsoft has even branded all Open Source software as "a
virus." \68\
---------------------------------------------------------------------------
\67\ See, Prepared Text of Remarks by Craig Mundie,
Microsoft Senior Vice President The Commercial Software Model The
New York University Stern School of Business May 3, 2001
\68\ See, e.g., Stephen Shankland," Microsoft
license spurns open source" CNet News.com, June 22, 2001
---------------------------------------------------------------------------
The CIS is simply wrong when it states that "Subsection
III.J.2, by it explict terms, applies only to licenses for a small
subset of the APIs and Communications Protocols that Microsoft will
have to disclose." \69\ In reality, Section III.J.2,
"by its explicit terms," covers APIs and other
information "related to anti-piracy systems, anti-virus
technologies, license enforcement mechanisms, authentication/
authorization security, [and] third party intellectual property
protection mechanisms." Virtually all APIs fall into this
category, depending on how one defines "related to" and
Microsoft will have no incentive to define the phrase narrowly. But
even under a narrow interpretation of section III.J.2, participants
in the Open Source movement may still be excluded from disclosures
of APIs and other critical information on grounds that they are not
ISVs because they do not constitute an entity. Sec. Vii.
---------------------------------------------------------------------------
\69\ 69 CIS, p. 53.
---------------------------------------------------------------------------
The District Court found, and the Court of Appeals affirmed,
that Microsoft illegally maintained its monopoly by engaging in
selective and delayed disclosures of APIs. The PFJ allows this
practice to continue virtually unabated. Consequently, the PFJ is a
mockery of judicial power.
3. Failure to Prohibit Anticompetitive Corruption of Cross-
Platform/Open Standards
Microsoft's assault on middleware threats to its Operating
System monopoly has not been limited to integration. Java
represented a perhaps even greater threat to Microsoft's Operating
System than Netscape's web browser, and unlike the Netscape web
browser, Java continues to be a viable product. Created by Sun, Java
is at its essence a technology that allows programmers to write
applications that will run on any operating system with a Java
Virtual Machine installed.
Microsoft licensed Java from Sun and began to market programming
tools for ISVs to use in writing Java applications. Microsoft also
created its own version of the Java middleware for Windows.
Microsoft, however, secretly altered its implementation of Java so
that applications written using Microsoft's programming tools would
not run correctly under any operating system other than Windows. The
Court of Appeals condemned Microsoft's use of these tactics as part
of an "embrace and extend" strategy--Microsoft
embraced an open/cross-platform and then extended it with Windows-
only proprietary technology--as a violation section 2 of the
Sherman Act. Use of the "embrace and extend" strategy,
whether done openly or in secret, effectively renders any cross-
platform technology useless as a means of breaking down the
applications barrier to entry.\70\
---------------------------------------------------------------------------
\70\ Microsoft III, 253 F.3d at 74-78.
---------------------------------------------------------------------------
While the PFJ does purport to contain language which
restricts--but does not eliminate--Microsoft's use of
exclusive dealing agreements and threats of retaliation for using
competing middleware products, including, presumably, Sun's Java
Virtual Machine, nothing in the PFJ restricts Microsoft's ability to
subvert an open standard by engaging in a surreptitious embrace and
extend strategy. If, as the CIS asserts, "[c]ompetition was in
this case principally because Microsoft's illegal conduct maintained
the applications barrier to entry into the personal computer
operating system market by thwarting the success of middleware that
would have assisted competing operating systems in gaining access to
applications and other needed complement," then Microsoft must
be prohibited from polluting the open standards on which cross-
platform middleware relies. The failure of the PFJ to do so
constitutes a mockery of judicial power.
[[Page 28934]]
4. Microsoft Remains Free to Retaliate Against Those Who Favor
Competitive Products
Section III.A of the PFJ initially purports to prohibit
retaliation against OEMs who distribute competitive middleware
products. Yet section III.A then renders this prohibition
meaningless by giving Microsoft the right to provide
"Consideration ....commensurate with the absolute level or
amount of that OEM's development, distribution, promotion, or
licensing of that Microsoft product or service." Consideration
includes both "monetary payment" and "the
provision of preferential licensing terms." \71\ So
Microsoft may reward OEMs who distribute, promote or license
Microsoft products to the exclusion of competitive middleware
products. Of course, those OEMs who favor competitive middleware
products will not receive "Consideration" from
Microsoft. It does not matter that this use of Consideration is
limited to "absolute" versus "relative"
levels of distribution. The additional support costs of installing
two products which provide the same functionality will deter most
OEMs from installing competitive product when they are already
installing the Microsoft product. By any reasonable standard,
therefore, Microsoft's ability to give consideration to OEMs for the
distributing, promoting and licensing of Microsoft's products
amounts to an unrestricted right to retaliate against OEMs who
distribute, promote or license non-Microsoft products.
---------------------------------------------------------------------------
\71\ PFJ, sec. VI.C.
---------------------------------------------------------------------------
Similarly, Section III.G.1 purports to prohibit Microsoft from
offering "Consideration" to OEMs as well as IAPs, ICPs,
ISVs, and IHVs in exchange for their distribution of Microsoft
Platform software in a fixed percentage, but the section goes on to
state Microsoft may enter such agreements whenever "Microsoft
in good faith obtains a representation that is commercially
practicable for the entity to provide equal or greater distribution,
promotion, use or support for software that competes with Microsoft
Platform Software." Note that the OEMs and others are not
required to distribute any competitive product, only to represent
that they could distribute competitive products. The CIS points out
that Microsoft could grant an ISV preferential marketing, technical
and other support "on the condition that the ISV ship the
Windows Media Player along with 70% of the ISV's products" so
long as "the ISV affirmatively states that it is commercially
practicable for it also to ship competing media players with at
least the same (or greater) number of shipments." \72\
Commercial practicability is not defined in the PFJ, and it is
difficult to imagine that an ISV (or OEM, IAP, etc.) would refuse to
make such a representation in exchange for preferential treatment
from Microsoft. At the same time, it is difficult to believe that an
ISV would distribute two products that perform the same function. As
with OEMs, the additional distribution costs may be small, but the
additional support costs to help consumers sort out which product to
use are likely to be prohibitive.
---------------------------------------------------------------------------
\72\ CIS, pp. 42-43.
---------------------------------------------------------------------------
Section III.F.2 also purports to prohibit Microsoft from giving
an ISV Consideration in exchange for the ISV's agreement to refrain
from "developing, using, distributing, or promoting any
software" that competes a Microsoft or runs on a competing
platform. Yet the very same section gives Microsoft the right to
enter into these exclusive agreements as part of a "bona fide
contractual obligation of the ISV to use, distribute or promote any
Microsoft software." All ISVs who write software for Windows
must use Windows, even if only to test whether products will run
under Windows. Consequently, Microsoft is relatively free to offer
Consideration, including preferential developer support, to any ISV
as part of the ISV's other contractual obligations with Microsoft.
Section III.F.2 does, to be sure, require that the restrictions be
connected to "bona fide contractual obligations" and
limits the permissible restrictions to those that are "of
reasonable scope and duration." But these are all undefined
terms, so challenges to conduct under this section as unreasonable
in scope or duration may require years of litigation. Since the
Technical Committee ("TC") cannot issue binding
decisions, nor can its members testify, nor can its work product be
used in any enforcement proceeding, the TC will add a layer of delay
rather than expedite resolution of these disputes.
B. Consumers and Other Third Parties Will Be Injured
Independently of whether the PFJ consitutes a mockery of
judicial power, the Court can and should refuse to a consent order
which poses a high risk of injury to consumers or other third
parties. The PFJ contains provisions which will affirmatively make
matters worse in at least four important ways. First, the PFJ
contains language which Microsoft may be able use to require
competitors to license their intellectual property to Microsoft.
This would take away the rights of third parties to negotiate with
Microsoft over whether and on what terms Microsoft may use their
property. Second, the Court of Appeals modified the standard for
tying from "illegal per se" to "rule of
reason," but the PFJ purports to immunize Microsoft from tying
claims altogether. This poses an unacceptable risk that the third
party victims of Microsoft's tying may lose some or all their rights
to challenge this conduct. Third, whereas Microsoft now makes it
possible to remove certain middleware such as Windows Messenger from
middleware, the PFJ will limit Original Equipment Manufacturers
("OEMs") and consumers to deleting icons. Finally, the
PFJ enables Microsoft to retaliate with legal immunity against OEMs
and others in a variety of ways.
1. The PFJ Requires Cross-Licensing of Third Party Intellectual
Property to Microsoft.
Currently, ISVs and other third parties are at least
theoretically free to license their intellectual property to
Microsoft or not as they see fit. The extent to which third parties
actually have the power to exercise this legal right may remain in
doubt due to Microsoft's monopoly power, but the PFJ, with no
consideration for the possible anticompetitive effects of cross
licensing with a monopolist in networked markets, appears to sweep
away the intellectual property rights of third parties who deal with
Microsoft.
The loss of the legal right to refuse to cross license
intellectual property with Microsoft is found in section III.I.5
which provides:
an ISV, IHV, IAP, ICP, or OEM may be required to grant to
Microsoft on reasonable and nondiscriminatory terms a license to any
intellectual property rights it may have relating to the exercise of
their options or alternatives provided by this [Proposed] Final
Judgment; the scope of such license shall be no broader than
necessary to insure that Microsoft can provide such options or
alternatives.
The scope of this provision and its potential impact on third
parties is astonishing. Assume, for example, that an OEM wishes to
enable dual booting, i.e., to allow the end user to choose between
using Linux (or some other OS) and Windows when she turns on her PC.
Can Microsoft insist that it receive a license from the OEM for the
software that makes the choice possible? The answer would seem to be
yes. After all, the OEM would be attempting to take advantage of
"options or alternatives provided" by the PFJ and
Section III.I.5 does say that Microsoft may require the OEM to grant
Microsoft "a license to any intellectual property rights it
may have relating to the exercise of [its] options or
alternatives." Expanding Microsoft's ability to insist on
cross-licensing will likely have two types of negative effects. In
some cases, it will raise the price of dealing with Microsoft too
high for the other company, in which case the company will be
disadvantaged in the marketplace. In other cases, the cross-
licensing will occur and Microsoft may gain important intellectual
property that will give it a competitive advantage over its
competitors. In either instance, the incentives for other companies
to produce new intellectual property will be reduced and consumers
will suffer.
2. The PFJ May Immunize Microsoft From Tying Claims.
One of the more remarkable phenomena in this case has been
Microsoft's success at escaping liability for tying under Section 1
of the Sherman Act. When the lawsuit began, Microsoft, like everyone
else, was subject to the rule that tying is illegal per se. The
Court of Appeals ignored at least a half century of Supreme Court
precedent and held that the rule of reason analysis should apply to
Section 1 claims of tying against Microsoft.\73\ (Note that the
Court of Appeals already found that this conduct violated the rule
of reason standard under Section 2 of the Sherman Act.) Section VI.U
of the PFJ, however, dispenses with even the rule of reason analysis
and tries to immunize Microsoft from tying claims altogether when it
states that the "software code that comprises a Windows
Operating System Product shall be determined by Microsoft in its
sole discretion." Even the failed 1995 Consent Decree required
Microsoft to offer at least a plausible procompetitive reason for
its tying of software to the Operating System.\74\ It is
[[Page 28935]]
difficult even to conceive of a greater victory for a convicted
abusive monopolist who is already in the process of tying new
products to its core operating system monopoly. This provision of
the PFJ alone makes a mockery of the entire case, but it also could
mean that the victims of tying, whether it be consumers forced to
purchase products they do not want or ISVs whose products are
excluded from the OEM channel of distribution, may also be left
without remedy. Clearly, the PFJ gives consumers and other third
parties no legally enforceable rights.\75\ The PFJ also presents an
unacceptably high risk of depriving them of their existing rights.
Such a consent order is not in the public interest.
---------------------------------------------------------------------------
\73\ Microsoft Ill, 253 F.3d at 89-95.
\74\ See United States v. Microsoft Corp., 147 F.3d 935
(DC Cir. 1998).
\75\ PFJ, see. VIII.
---------------------------------------------------------------------------
3. The PFJ Delays Changes in Microsoft's Conduct which Should
Already Be in Place. Section III.H allows OEMs and consumers to hide
certain Microsoft middleware by deleting the icons for the Microsoft
products and replacing them with icons for competitive products
beginning "at the earlier of the release of Service Pack 1 for
Windows XP or 12 months after submission of this [Proposed] Final
Judgment to the Court." In the rapidly changing middleware
markets affected by this provision, a year may provide Microsoft
more than enough time to eliminate viable competitors by excluding
them from access to consumers, and there is no justification for
giving Microsoft a year to implement this provision. On July
11,2001, Microsoft issued a press release stating these changes
would be incorporated into Windows XP when it shipped in October
2001.\76\ If Microsoft could implement this flexibility in October
2001, why must competition take a battering for another full 12
months? The delay can only serve to entrench Microsoft's efforts to
eliminate competition in the middleware markets covered by Section
III.H of the PFJ.
---------------------------------------------------------------------------
\76\ See Microsoft Press Release.
---------------------------------------------------------------------------
4. The PFJ Enables Microsoft to Retaliate Against OEMs and
Others. As noted in our comments on justice and ambiguity, Microsoft
may in fact remain free to retaliate against OEMs, Independent
Software Vendors ("ISVs") and others who do not favor
Microsoft middleware products. While the other comments focus on
Microsoft's ability to take advantage of loopholes and vague and
ambiguous provisions within the PFJ, perhaps it is as important to
note that the PFJ covers only a small number of Microsoft products.
Programming tools and Application Programming Interfaces
("APIs") not used by Microsoft are critically important
to ISVs and others. Similarly, Microsoft Office's commanding market
share makes it an indispensible product to OEMs. The Court of
Appeals noted the willingness of Microsoft to use these products in
its illegal efforts to maintain the Windows monopoly, yet the PFJ
leaves Microsoft free to retaliate against ISVs, OEMs and others by
discriminating on price and other terms of access to these products.
Without realistic protections against retaliation, the record of
this case indicates strongly that many remedial portions of the PFJ
will be ineffective. C. The Proposed Final Judgment Is Ambiguous
"A district judge pondering a proposed consent decree
understandably would and should pay special attention to the
decree's clarity." \77\ The PFJ fails to set forth
specific and precise remedies for the antitrust concerns identified
by the Court of Appeals. There are no clear prohibitions on
Microsoft's conduct in the Proposed Final Judgment. Many of the
putative restrictions on Microsoft are vague and all are riddled
with exceptions and qualifications. As the experience over the 1995
Consent Decree shows, Microsoft and the government may have enormous
differences of opinion as to the meaning of the terms. This lack of
clarity will almost certainly compound the delay already present in
the Proposed Final Judgment since the inevitable differences of
opinion cannot be resolved without extended litigation to determine
the "intent" of the parties according to the rules of
contract law.
---------------------------------------------------------------------------
\77\ United States v. Microsoft, 56 F.3d 1448, 1461(DC
Cir. 1995).
---------------------------------------------------------------------------
1. Unclear Whether Microsoft Can Retaliate Against OEMs Who
Favor Competitive Products A critical issue in Microsoft's illegal
maintenance of its monopoly has been its ability to retaliate
against those who stand in its way, especially OEMs. OEMs provide an
extraordinarily important distribution channel for software,
including any cross-platform middleware that could serve to break
down the applications barrier to entry. Unlike Microsoft, OEMs face
intense competition and operate on razor thin profit margins.
Consequently, they are especially vulnerable to retaliation from
Microsoft. Seemingly small differences in the price charged for
Windows can account for the success of one OEM and the demise of
another. Nor is retaliation limited to price differences for
Windows. If Microsoft can retaliate through the prices it charges
for other products, such as Microsoft Office, and through the level
of support that Microsoft gives an OEM. Since OEMs currently have no
viable alternative to Windows, they simply cannot afford incur
Microsoft's disfavor.
Section III.A. 1 appears to prohibit Microsoft retaliating
against OEMs who favor rival products: Microsoft shall not retaliate
against an OEM by altering Microsoft's commercial relations with
that OEM, or by withholding newly introduced forms of non-monetary
Consideration ... from that OEM, because it is known to Microsoft
that the OEM is or is contemplating ... developing, distributing,
promoting, using, selling, or licensing any software that competes
with Microsoft Platform Software ...
Now assume that an OEM wants to develop, distribute and promote
a new type of software that will compete with JAVA as a tool for
creating applications that will run on multiple Operating Systems.
As such, this technology threatens to erode the Applications Barrier
to Entry that protects Microsoft's monopoly. Can Microsoft retaliate
against the OEM for doing this? No one can tell from the language of
the PFJ. First, there is the question of whether this new technology
competes with a "Microsoft Platform Product." Microsoft
Middleware products are included within the PFJ's definition of a
"Microsoft Platform Product." \78\ It is still
unclear, however, whether this new OEM middleware would compete with
"Microsoft Platform Software." The PFJ narrowly defines
"Microsoft Middleware Products." \79\ Microsoft's
"Java Virtual Machine" is included in the definition of
Microsoft Middleware Products,\80\ but the OEM is not offering a
different "Java Virtual Machine," The OEM is offering an
alternative to using Java. True, this technology threatens
Microsoft's monopoly in the same way as Java does, but it remains
unclear whether this new technology competes with any Microsoft
Middleware Products. Therefore, it remains unclear whether the new
technology competes with Microsoft Platform Software. Therefore, it
remains unclear whether Microsoft may retaliate against the OEM for
offering this technology. Consider another example where an OEM
seeks to distribute the Netscape web browser, and the OEM promotes
its use of Netscape in advertising, etc. Presumably this presents a
clearer case since the definition of Microsoft Middleware Products
expressly includes the Internet Explorer web browser and, therefore,
it would seem almost certain that the Netscape web browser competes
with Microsoft Platform Software. May Microsoft retaliate against
the OEM for distributing the Netscape web browser? Again, the answer
is unclear. As previously noted, section III.A. 1 does state that
Microsoft cannot condition any Consideration that it gives an OEM
based on whether the OEM distributes or promotes software that
competes with Microsoft Platform Software. But Section III.A also
states that "[n]othing in this provision shall prohibit
Microsoft from providing Consideration to any OEM with respect to
any Microsoft product or service where that Consideration is
commensurate with the absolute level or amount of that OEM's
development, distribution, promotion, or licensing of that Microsoft
product or service." In other words, Microsoft cannot withhold
Consideration for promoting Netscape, but Microsoft can withhold
Consideration for failing to promote Internet Explorer. OEMs have
limited resources to devote to the distribution and promotion of
software, and if an OEM devotes its marketing budget to Netscape,
the OEM cannot also spend those funds distributing and promoting
Internet Explorer. Consequently, the OEM's distribution and
promotion of Netscape may mean that the OEM has not given the
required level of distribution or promotion to Internet Explorer,
thereby entitling Microsoft to withhold the Consideration that
Microsoft gives to competing OEMs who do not distribute and promote
Netscape. This contradiction recreates the same type of ambiguity
found the 1995 Consent Decree which prohibited Microsoft from tying
products to Windows, but expressly allowed Microsoft to integrate
products into Windows.
---------------------------------------------------------------------------
\78\ PFJ, sec. VI.L(ii).
\79\ PFJ, sec. VI.K
\80\ PFJ, Sec. VI.K.1
---------------------------------------------------------------------------
2. Unclear Whether Non-Microsoft Middleware and Non-Microsoft
MiddleWare Products as Defined by the PFJ Could Ever Exist
[[Page 28936]]
Some of the most important provisions of the PFJ concern the
rights of OEMs, consumers, and others to use Non-Microsoft
Middleware and Non-Microsoft Middleware Products. Section III.H, for
example, allows an OEM or end user to hide Microsoft Middleware
Products and install Non-Microsoft Middleware Products as the
default mechanism to perform the same functions. Thus, it would seem
that an OEM could remove the icon for Internet Explorer and replace
it with an icon for Netscape's web browser, but in reality this will
depend on whether Netscape's web browser constitutes a Non-Microsoft
Middleware Product. To constitute a Non-Microsoft Middleware
Product, Netscape's web browser must, among other things, expose
"a range of functionality to ISVs through published
APIs." \81\ Generally speaking, APIs are the special
codes that an application uses to communicate with Middleware or the
Operating System. Indeed, Middleware constitutes a competitive
threat to Microsoft's Operating System monopoly because Middleware
contains its own set of APIs so that an application does not have to
communicate directly with the Operating System. As long as the PC
contains the appropriate Middleware, the application will run
regardless of whether the PC uses Windows or some other Operating
System. This is not to say that the Operating System APIs are
irrelevant. The Middleware still uses the Operating System's APIs,
but the applications use the Middleware APIs. Netscape's web browser
does expose APIs as that term is commonly used.
---------------------------------------------------------------------------
\81\ PFJ, see. VI.N.
---------------------------------------------------------------------------
The PFJ, however, contains a much narrower definition of APIs
than that commonly used. Under PFJ section VI.A, only "the
interfaces ... that Microsoft Middleware running on a Windows
Operating System Product uses to call upon that Windows Operating
System Product in order to obtain any services from that Windows
Operating System Product" constitute APIs. In other words,
APIs that exist outside the Windows Operating System do not appear
to constitute APIs at all. These APIs are, of course, Microsoft's
intellectual property.
So, for an OEM to have the right to install Netscape as the
default web browser the question is not whether Netscape exposes
Netscape APIs, but whether Netscape exposes Windows APIs. This makes
no sense since it could easily mean that there is no such thing as
Non-Microsoft Middleware Product, thereby rendering a significant
portion of the PFJ meaningless. But this interpretation is more than
plausible given the express language of the PFJ. Ultimately, the
Court may reject this interpretation and refuse to use the PFJ's
definition of APIs for purposes of determining what constitutes a
Non-Microsoft Middleware Product. Then again, the Court might not.
Either way, the PFJ is ambiguous on this fundamental point.
3. Unclear Whether Microsoft May Retaliate Against ISVs Who
Favor Competitive Products Just as Section III.A. 1 initially
appeared to limit Microsoft's ability to retaliate against OEMs, so
too Section III.F.1 provides that "Microsoft shall not
retaliate against any ISV ... because of that ISV's ... developing,
using distributing, promoting or supporting any software that
competes with Microsoft Platform Software or any software that runs
on any software that competes with Microsoft Platform
Software" and Section III.F.2 states that "Microsoft
shall not enter into any agreement relating to a Windows Operating
System Product that conditions the grant of any Consideration on an
ISVs refraining from developing, using, distributing, or promoting
any software that competes with Microsoft Platform Software or any
software that runs on any software that competes with Microsoft
Platform Software." As with the prohibition against OEM
retaliation, whatever clarity these provisions might otherwise have
vanishes upon careful examination.
Assume that an ISV plans to develop a game that will make use of
some RealPlayer's multimedia functionalities. Does the PFJ allow
Microsoft to punish the ISV for not using RealPlayer instead of
Windows Media Player? Could Microsoft, for example, refuse to
provide the ISV with technical support in retaliation? The answer is
far from clear. RealPlayer competes with Windows Media Player, which
is included in the definition of Microsoft Middleware Products and,
therefore, within the definition of Microsoft Platform Product which
would seem to invoke Section III.F's ban on retaliation. But Section
III.F.2 contains an exception to the general rule against
withholding Consideration in retaliation for the use of competing
software: Microsoft may enter into agreements that place limitations
on an ISV's development, use, distribution or promotion or any such
software if those limitations are reasonably necessary to and of
reasonable scope and duration in relation to a bona fide contractual
obligation of the ISV to use, distribute or promote any Microsoft
software ... The PFJ does not define or give any guidance as to how
to define what is "reasonably necessary,"
"reasonable scope and duration," or "a bona fide
contractual obligation." If Microsoft wants to retaliate,
Microsoft would simply argue that it offered Consideration only as
part of a contract to promote Windows Media Player and that the ISV
who uses RealPlayer either did not enter into such a contract or
breached the contract by using RealPlayer. Such an interpretation of
the exception would render the main prohibition meaningless and the
Court might interpret the exception more narrowly, but then again
the Court might accept the broad interpretation of the exception.
Either way, the provisions that relating to retaliation against ISVs
who favor non-Microsoft products are ambiguous.
4. Unclear Whether Microsoft Must Make Any Disclosures to Third
Parties.
The PFJ contains language which standing on its own might
require Microsoft to make certain disclosures of APIs,
Communications Protocols, and related documentation that enable ISVs
and others to write software capable of running on Windows. These
comments have already pointed out that the loopholes contained in
the API provisions allow Microsoft almost complete discretion to
continue to withhold APIs. The ambiguities surrounding the mandatory
disclosure provisions for Communications Protocols allow Microsoft
to withhold critical information. PFJ section III.E states that
"Microsoft shall make available for use by third parties ...
any Communications Protocol that is ... (1) implemented in a Windows
Operating System Product ... and (ii) used to interoperate natively
... with a Microsoft server operating system product." There
are three critical terms in determining what Microsoft must
disclose: "Communications Protocol," "Windows
Operating System Product," and "Microsoft operating
system product." The PFJ defines "Communications
Protocol" as:
[T]he set of rules for information exchange to accomplish
predefined tasks between a Windows Operating System Product and a
server operating system connected via a network, including, but not
limited to, a local area network, a wide area network or the
Internet. These rules govern the format, semantics, timing,
sequencing, and error control of messages exchanged over a
network.\82\
---------------------------------------------------------------------------
\82\ PFJ, see. VI.B
---------------------------------------------------------------------------
The incorporation of "Windows Operating System
Product" and "server operating system" into the
definition of "Communications Protocol" makes the
definition of these terms especially important in understanding what
Microsoft must disclose. The PFJ definition of "Windows
Operating System Product" expressly allows Microsoft to
include whatever it wants and by implication to exclude whatever it
does not want from the "Windows Operating System
Product." \83\
---------------------------------------------------------------------------
\83\ PFJ, sec. VI.U
---------------------------------------------------------------------------
The definition of "Windows Operating System Product"
and its incorporation into the definition of "Communications
Protocol" makes Microsoft's obligation to disclose
"Communications Protocol" a moving target. But the third
critical term, "server operating system product," is not
defined at all. Nor does the PFJ define server operating system. The
CIS, perhaps in belated recognition of this issue, purports to
define the term,\84\ but there is no reason to believe that
Microsoft agrees with the CIS definition. Thus, exactly what
Microsoft must disclose as under the Communications Protocol
provision remains ambigous.
---------------------------------------------------------------------------
\84\ CIS, p. 37
---------------------------------------------------------------------------
Microsoft's obligations to disclose Communications Protocols are
also subject to the same exceptions in PFJ section III.J that apply
to the API disclosure provisions. Just as PFJ section III.J. 1
threatens to remove a broad set of APIs from disclosure, so too it
may exempt many if not most of the Communications Protocols that
Microsoft would otherwise have to disclose. Similarly, PJF section
III.J.2 may well mean that Microsoft can deny disclosure of
Communications Protocols to competitors, including the Open Source
movement, just as it does for APIs.
5. Unclear Whether Open Source Developers Are ISVs.
The Open Source Movement presents one of the biggest threats to
Microsoft. Linux is undoubtedly the most famous Open Source
[[Page 28937]]
project, but a wide variety of Open Source Projects are underway.
Although some commercial enterprises bundle Open Source software
with additional proprietary software, documentation or services,
e.g., Red Hat, the Open Source software itself is distributed
without charge. A number of references in the PFJ suggest that its
protections may not apply to Open Source developers despite their
unusual potential for creating competition against Microsoft.
For example, section III.J.2(c) specifically states that
Microsoft can refuse to license "any API, Documentation or
Communcations Protocol related to anti-piracy systems, anti-virus
technologies, license enforcement mechanisms, authentication/
authorization security, or third party intellectual property
protection mechanism of any Microsoft product" to any one who
fails to meet "reasonable, objective standards established by
Microsoft for certifying the authenticity and viability of its
business." Ambiguity exists on two levels here. First,
Microsoft could argue that virtually all of its APIs, etc., are in
some way "related to" this wide range of key
technologies. Second, Microsoft would seem to have almost carte
blanche to refuse access to anyone on grounds that they do not meet
Microsoft's standards for "authenticity and viability."
What constitutes "reasonable, objective standards" is
anyone's guess, but even if this language sufficiently protects
commercial enterprises, Microsoft may still be able to refuse to
grant access to Open Source developers since, by definition, they do
not even charge for their software, let alone make a profit.
More fundamentally, the PFJ defines an ISV as "an entity
other than Microsoft that is engaged in the development or marketing
of software products." \85\ Much of the Open Source
community remains a loose collection of individuals who post changes
to software code on an ad hoc basis in a variety of sometimes
shifting locations on the Internet. Whether these communites
constitutes "entities" is unclear.
---------------------------------------------------------------------------
\85\ PFJ, see. VI.I
---------------------------------------------------------------------------
6. Additional Ambiguities
Trying to pin down what Microsoft may or may not do is like
trying to hold water in your hand. Virtually every provision raises
questions. The preceding discussion identifies the most important
ambiguities, but there are more. Fore example: When does an OEM
installed "shortcut" for Non-Microsoft Middleware
"impair the functionality of the user interface"?\86\
What constitutes "a user interface of similar size and shape
to the user interface displayed by the corresponding Microsoft
Middleware Product?\87\ What constitutes "commercially
practicable"?\88\ . What constitutes a "bona fide joint
venture" or a "joint development or joint services
arrangement"?\89\ What constitutes "a reasonable
technical requirement" or "valid technical
reasons"? PFJ, sec. III.H. What constitutes a "bona fide
join venture"?\90\ What constitutes "a reasonable period
of time" ? \91\
---------------------------------------------------------------------------
\86\ 86 PFJ, sec. III.C.2.
\87\ PFJ, see. III.C.3.
\88\ PFJ, sec. III.G.1
\89\ PFJ, sec. III G.
\90\ PFJ, sec. III.I.
\91\ PFJ, sec. III.I.
---------------------------------------------------------------------------
D. The Enforcement Mechanism Is Inadequate
The PFJ cannot possibly achieve its purported goals without an
enforcement mechanism adequate to deter violations by Microsoft or
bring about compliance when violations occur. For this to occur, the
line between permissible and impermissible conduct must be clearly
drawn. Unfortunately, most of the "prohibitions"
contained in Section III of the PFJ are riddled with exceptions and
undefined terms. Consequently, even under the best of circumstances,
fairly extensive litigation would be necessary to determine the
exact parameters of permissible conduct. But the Microsoft case does
not present the best of circumstances. The delay inevitably caused
by disputes over the interpretation of vague language and complex
exceptions inevitably play to Microsoft's advantage. The PFJ lasts
at most seven years. PFJ, sec. V. Consider the issue of Microsoft's
"integration" of middleware with the operating system.
This issue appeared to be settled with the consent decree that
Microsoft agreed to in 1994 and which the Court entered in 1995.
Microsoft never accepted the government's interpretation of the 1995
Consent Decree or the law on that issue. This dispute ultimately led
to the current litigation. Microsoft eventually lost the dispute in
2001 when the Court of Appeals held that Microsoft's integration of
the browser middleware with the operating system violated Section 2
of the Sherman Act (a decision which will effectively be reversed if
the Court enters the PFJ in 2002). In the meantime, Microsoft has
effectively eliminated all competition in the browser middleware
market largely by integrating its browser into the operating system.
The rapidly changing nature of the software markets compounds
the necessity of a swift and certain enforcement mechanism.
"By the time a court can assess liability, firms, products,
and the marketplace are likely to have changed
dramatically." \92\ Despite the pressing need of swift
and sure enforcement, the PFJ seems designed to enable and to reward
delay.
---------------------------------------------------------------------------
\92\ Microsoft III, 253 F.3d at 49.
---------------------------------------------------------------------------
1. The Enforcement Mechanism Lacks Appropriate Penalties.
An effective enforcement mechanism must contain a penalty
sufcient to deter misconduct by the defendant. Ideally, the
enforcement mechanism would reward the defendant for extending
itself to accomplish the remedial goals, but at the very least the
mechanism should severely punish a pattern of willful misconduct.
The PFJ, however, does neither. The PFJ provides no incentives for
Microsoft to cooperate in the effort to break down its Operating
System monopoly. Worse, the PFJ does not punish Microsoft for
deliberate and repeated violations of the PFJ's restrictions.
Microsoft's only stated penalty for "engag[ing] in a pattern
of willful and systematic violations" of the restrictions is
"a one-time extension of this [Proposed] Final Judgment of up
to two years." PFJ, sec.V.B. The base period of the PFJ is
five years. If Microsoft has repeatedly violated the PFJ for five
years, why should it care if the PFJ is extended to seven years.'?
If Microsoft can get away with ignoring the restrictions for five
years, surely it will not pose any problem for Microsoft to ignore
the restrictions for another two years.
2. The Technical Committee Will Only Delay Enforcement.
The Technical Committee can only serve to delay resolution of
complaints about Microsoft's failure to comply with the restrictions
contained in the PFJ. The Technical Committee cannot resolve
disputes, but only "advise" Microsoft and the government
of its conclusions. The Proposed Final Judgment's "gag
orders" prohibiting both testimony from Committee members and
use of their work product in enforcement proceedings will cause
further delay since enforcement will always require the government
to duplicate of the Committee's work in amassing evidence.
Assume, for example, that Microsoft refuses to disclose an API
to an ISV in retaliation for the ISV's use of RealPlayer technology.
This denial immediately places the OEM at a significant disadvantage
over ISVs who comply with Microsoft's wishes that they only use
Windows Media Player. Assume further that the ISV immediately
contacts the TC with its complaint alleging violations of sections
III.D and F of the PFJ. The TC must then begin the investigation.
While it is impossible to know how long such an investigation would
take, the powers and duties of the TC outlined in section IV.B.8.b
enable the TC to undertake a truly exhaustive investigation: The TC
may, on reasonable notice to Microsoft:
(i) interview, either informally or on the record, any Microsoft
personnel, who may have counsel present; any such interview to be
subject to the reasonable convenience of such personnel and without
restraint or interference by Microsoft;
(ii) inspect and copy any document in the possession, custody or
control of Microsoft personnel;
(iii) obtain reasonable access to any systems or equipment to
which Microsoft personnel have access;
(iv) obtain access to, and inspect, any physical facility,
building or other premises to which Microsoft personnel have access;
and
(v) require Microsoft personnel to provide compilations of
documents, data and other information, and to submit reports to the
TC containing such material, in such form as the TC may reasonably
direct.
While such expansive investigatory powers are laudable in many
respects, they do represent a tradeoff in favor of accuracy over
speed. After such a thorough investigation, however, the TC may only
conclude whether the "complaint is meritorious," and if
so, "it shall advise Microsoft and the Plaintiffs of its
conclusion and its proposal for cure." PFJ, sec. IV.D.4.c.
Assuming that the TC finds merit in the ISV's complaint, it is not
clear whether the TC may inform the ISV of its findings. PFJ section
IV.B.8 states that "TC members may communicate with non-
parties
[[Page 28938]]
about how their complaints ... might be resolved with
Microsoft," but whether communication "about how their
complaints might be resolved" includes the TC's findings and
recommendations remains unclear. PFJ section IV.D.4.c authorizes the
TC to communicate its findings only to Microsoft and the Plaintiffs.
PFJ section IV.B.9 provides that "any report and
recommendations prepared by the TC ... shall not be disclosed to any
person other than Microsoft and the Plaintiffs." It is
certainly possible to construe these provisions as prohibiting the
TC from informing the complaining ISV of anything other than a range
of possible outcomes. What happens if, after extensive
investigation, the TC finds merit in the ISV's claim and recommends
that Microsoft disclose the APIs to the ISV? If Microsoft resists
the decision, whether to proceed against Microsoft rests not with
the OEM victim or the TC, but with the Plaintiffs. Section IV.A.1 of
the PFJ gives the Plaintiffs "exclusive authority" to
enforce the restrictions. Any one of the Plaintiff's may now take up
the ISV's complaint, but if the Plaintiff who is willing to pursue
the OEM's complaint is one of the settling states, it must first
consult with "with the United States and with the plaintiff
States" enforcement committee." PFJ, sec. IV.A.1. After
consulting with the United States and the plaintiff States"
enforcement committee, the enforcing state must then "afford
Microsoft a reasonable opportunity to cure" the alleged
violation. PFJ, sec. IV.A.4. Note that this is a second opportunity
for Microsoft to cure the violation, since the first opportunity was
given with the TC's decision. If the United States decides to take
up the ISVs complaint, then it apparently avoids the delay of
consulting with the enforcement committee, but the United States
must still give Microsoft an opportunity to cure. The
"consultation" and "reasonable opportunity to
cure" delays are merely the tip of this iceberg. Although the
TC has conducted an extensive investigation and gathered much,
perhaps even all of the relevant evidence, neither an enforcing
state nor the United States use the evidence accumulated by the TC
and the TC members are prohibited from testifying. Section IV.D.4.d
specifically provides:
No work product, findings or recomendations by the TC may be
admitted in any enforcement proceeding before the Court for any
purpose, and no member of the TC shall testify by deposition, in
court or before any tribunal regarding any matter related to this
[Proposed] Final Judgment.
In other words, the United States or the enforcing state will
needlessly duplicate the discovery work of the TC and the Court will
have to conduct a de novo review of the evidence without the benefit
of the TC's insights and expertise.
3. The Court Will Be Denied Access to the Insights and Expertise
of the Technical Committee. Despite the fact that the Technical
Committee cannot render enforceable decisions, the TC will be in an
excellent position to evaluate both Microsoft's overall conduct and
the appropriateness of various alternative remedies for specific
complaints and problems. The TC members will have expertise
"in software design and programing." PFJ, see. IV.B.2.
The TC will have considerable access to Microsoft documents and
personnel. PFJ, sec. IV.B.8.b. In addition to its own experience
with complaints, the TC will apparently receive reports from
Microsoft advising the TC of the nature and disposition of
complaints filed with Microsoft's compliance officer. PFJ, sec.
IV.D.3.c. The TC, in short, has an exceptional vantage point from
which to "monitor Microsoft's compliance with its obligations
under [the Proposed] [F]inal [J]udgment." PFJ, sec. IV.B.8.a.
Despite the exceptional value of the TC to the Court as both expert
witnesses on technical issues and as eye witnesses to larger issues,
including whether Microsoft "engaged in a pattern of willful
and systematic violations," PFJ, sec. V.B, section IV.D.4.d
expressly prohibits members of the TC from testifying "by
deposition, in court or before any other tribunal." By denying
the Court access to witnesses with critical information and
expertise, the PFJ ensures that the Court will have to make rulings
without regard to some of the most important evidence on the issues
that will inevitability arise under the ambiguous provisions of the
PFJ.
Conclusion
The acid test of the PFJ must be whether it would have protected
Netscape as it tried to launch a middleware challenge to Microsoft's
operating system monopoly in 1994. Sadly, even a cursory reading of
the PFJ reveals that the answer is no. Since Microsoft did not have
comparable middleware, there would, even under the most favorable
interpretations of the API disclosure provisions in PFJ section
III.D, have been nothing to prevent Microsoft from engaging in
selective disclosures to Netscape. Microsoft would have been free to
deny Netscape access to many, if not all, of the Communications
Protocols necessary for any Internet middleware to work on Windows
since the new, untested company would certainly have failed to meet
Microsoft's test of a viable business under PFJ section III.J.2(c).
Most importantly, nothing in the PFJ could change the economics of
the OEM industry which make it unprofitable to install two web
browsers and therefore, in what can only be called a mockery of
judicial power, PFJ VI.U would expressly allow Microsoft to choke
off Netscape's acess to the crucial OEM distribution channel by
declaring Internet Explorer to be a part of the Windows Operating
System Product. For the foregoing reasons, we urge the Court to
reject the Proposed Final Judgment.
Respectfully submitted on behalf of the American Antitrust
Institute
by:--------------------
-----------------------
-----------------------
-----------------------
------------------------
---
Albert A. Foer?? President, American Antitrust
Institute--------------------
-----------------------
-----------------------
------------------------
-------------------------
-------
Robert H. Lande, University of Baltimore Law School, Secretary
and Senior Research Scholar of the American Antitrust
Institute-------------------
-----------------------
------------------------
------------------------
------------------------
-------
Norman W. Hawker, Western Michigan University, Research Fellow
of the American Antitrust
Institute-------------------
-----------------------
------------------------
-----------------------
------------------------
-------
Oded Pincas, Research Fellow of the American Antitrust Institute
MTC-00030601
BEFORE THE UNITED STATES DEPARTMENT OF JUSTICE ANTITRUST
DIVISION COMMENTS OF THE WASHINGTON LEGAL FOUNDATION SUPPORTING THE
PROPOSED JUDGMENT IN UNITED STATES v. MICROSOFT
Robert A. McTamaney, Daniel J. Popeo, Carter, Ledyard &
Milburn, Paul D. Kamenar,
2 Wall Street Washington Legal Foundation New York, New York
10005 2009 Massachusetts Ave., NW (212) 238-8711 Washington,
DC 20036 (202) 588-0302
Date: January 25, 2002
COMMENTS OF THE WASHINGTON LEGAL FOUNDATIONIN SUPPORT OF THE
PROPOSED JUDGMENT IN UNITED STATES v. MICROSOFT
Introduction and Summary. The Washington Legal Foundation (WLF),
pursuant to the Tunney Act (Antitrust Procedures and Penalties Act,
15 U.S.C. 16), hereby submits these comments in support
of tee settlement reflected in the Revised Proposed Final Judgment
dated November 6, 2001 in United States v. Microsoft Corp., Civil
No. 98-1232.\1\
---------------------------------------------------------------------------
\1\ The case is on remand from the Court of Appeals which
vacated the Final Judgment, affirmed in part the market maintenance
claims, ordered reconsideration of the Section 1 tying claim,
reversed the browser market attempted monopolization claim, and
ordered new remedy proceedings. U.S. v. Microsoft Corp., 253 F.3d 34
(DC Cir. 2001).
---------------------------------------------------------------------------
WLF is the nation's preeminent center for public interest law
and policy, advocating free-enterprise principles, responsible
government, property fights, a strong national security and defense,
and a balanced civil and criminal justice system. WLF devotes
substantial resources to these issues through litigation, by
publishing through its Legal Studies Division, and by educating the
public through its Civic Communications Program. With respect to
antitrust law, and the Microsoft case m particular, WLF filed a
brief in the United States Supreme Court supporting the petition for
writ of certiorari filed by Microsoft to review the judgment of the
court of appeals that left intact the district court's findings of
fact and conclusions of law, despite the flagrant judicial
misconduct of the trial court in giving interviews to the press
expressing his bias and hostility to Microsoft and Bill Gates.
Microsoft Corporation v. United States, 122 S.Ct. 350 (2001). WLF's
Legal Studies Division has also published studies and other
materials on antitrust issues and the Microsoft case. See Antonio F.
Perez, U.S. v. Microsoft: DOJ's "New" Antitrust Paradigm
[[Page 28939]]
Resurrects Outdated Economics (WLF Legal Backgrounder, Feb. 4,
2000); Robert A. McTamaney, Microsoft On Appeal:
"Monopolies" In A Complex Society (WLF Working Paper
Feb. 2001). WLF supports the Proposed Judgment (the result of
intense negotiations with the assistance of two of the nation's top
mediators) as a rational resolution to a case formally initiated in
May 1998, but effectively tracing its roots to an FTC investigation
begun more than a decade ago, therefore now rivaling in time and
burden the IBM antitrust litigation of the 1980's. The matter is
overly ripe for resolution, and the States which have declined to
join the settlement should in our judgment be urged by the
Department and the Court to reconsider and adopt it. The Standard
for Entry. The Tunney Act contemplates that the Court will evaluate
the relief set forth in the Proposed Judgment and enter the judgment
if the settlement is within the reaches of the public interest and
within the government's rather broad discretion, considering (1) the
competitive impact and adequacy of the judgment and (2) the impact
on the public generally, and on affected individuals, and the
benefit, if any, of an eventual trial determination. The Court
reviews the Proposed Judgment in light of the Complaint's
allegations, and withholds approval only if there is ambiguity, art
inadequate enforcement mechanism, if third parties would be
positively injured, or if the decree somehow makes a
'mockery" of judicial power.\2\ The belief that other
remedies might be preferable does not warrant rejection of the
Proposed Judgment; the Tunney Act does not authorize the imposition
of different terms or permit de novo review of the settlement.\3\
---------------------------------------------------------------------------
\2\ E.g., U,S. v. Microsoft Corp., 56 F.3d 1448 (DC Cir,
1995)
\3\ "The court should therefore reject the
[judgment] only if 'it has exceptional confidence that adverse
antitrust consequences will result..."' U.S. v. Enova
Corp., 107 F. Supp. 10, 27 (D.DC 2000); accord, U.S. v. Central
Parking Corp., 2000 U.S. Dist, Lexis 6226 (D.DC 2000). Applying
these legal standards, the Proposed Judgment should be entered.
---------------------------------------------------------------------------
The Complaint Versus the Proposed Judgment. Under the Tunney
Act, whether the public interest is served by entry of the judgment
is first tested by comparing the allegations of the Complaint with
the Proposed Judgment. As will be demonstrated, the comparison is
more than a favorable one.
The Complaint is dated May 18, 1998. There are 141 numbered
paragraphs in the Complaint, of which, read fairly, 128 paragraphs
relate to Microsoft's browser technology, including its Interact
Explorer (IE) in Windows 98, and the promotion and distribution of
that technology to Windows 98 users. The principal responsible
author of the Complaint described the case as an extremely limited,
discrete, "surgical strike" directed solely against the
Company's integration of browser technology with its operating
system.\4\
---------------------------------------------------------------------------
\4\ In its 1994 maintenance case against Microsoft, the
Department did not contend that the company's obtaining of its
market position was illegal, but rather that it was the fortuitous
result of IBM's choice of Microsoft's MSDOS for IBM's PCs. In that
ease the government's economic witness said that only artificial
barriers such as restrictive license provisions should be prohibited
since the company's market position was entirely natural and not the
result of anticompetitive behavior. Id.
---------------------------------------------------------------------------
On June 23, 1998, the U.S. Court of Appeals for the District of
Columbia Circuit held that the IE Browser was not a product separate
from Windows for purposes of the 1995 consent decree that had
resolved the Department's 1994 case, and the related European
Commission (EC) case, against Microsoft.\5\ While the Court reserved
its position on any future market power allegations, most observers
believed that the May 18 Complaint had been rendered moot, since any
arguably illicit tie requires, by definition, two products.
---------------------------------------------------------------------------
\5\ U.S. v. Microsoft Corp., 147 F. 3d 935 (DC Cir. 1998),
---------------------------------------------------------------------------
The trial judge disagreed, and permitted the case to proceed,
and premised his eventual breakup order, in effect, on the sparse
references in the Complaint to the alleged market dominance of
Windows in a narrowly-defined market of Intel-powered personal
PCs.\6\ In its reversal and remand of the trial judge's conclusions
and remedies, the Court of Appeals specifically reversed the
conclusion that Microsoft attempted to monopolize a browser market,
and remanded the issue of an illegal tie for reconsideration under
the Rule of Reason.\7\ In recognition of the rigors of this test,
and in light of the demonstrated insistence of consumers on a
browser-operating system combination, the Department determined not
to pursue this claim.
---------------------------------------------------------------------------
\6\ Compare U.S. v. Microsoft, supra note 2 ("The
government... urges us to flatly reject the district judge's efforts
to reach beyond the complaint to evaluate claims that the government
did not make ...").
\7\ The Court of Appeals dismissed 4 of the 5 principal
claims against Microsoft, and alas dismissed 23 of the 35 acts found
wrong by the trial judge.
---------------------------------------------------------------------------
To the extent therefore that the Tunney Act dictates measuring
the judgment against the Complaint,\8\ the Proposed Judgment is a
remarkable result. The judgment exacts dramatic conduct remedies and
imposes massive costs on a defendant, when the essential allegations
of the Complaint were first deflated by the Court of Appeals, then
carefully either selected or avoided by the Department and the State
plaintiffs, then momentarily revived by the trial judge, only to be
excised again by the Court of Appeals, which set a standard for
resolution that the Department itself has decided unilaterally could
never be met.
---------------------------------------------------------------------------
\8\ E.g., U.S. v. Alcoa, 152 F.Supp. 2d 37, 44 (D.DC 2001)
("[T]he court is confined to the factors alleged in the
government's complaint.").
---------------------------------------------------------------------------
Certainty of the Proposed Judgment. The Tunney Act as
interpreted next suggests that the Judgment should be examined for
ambiguities. Ambiguity is measured by the trial judge interested in
the reasonably manageable enforcement of the judgment, rather than
by competitors who might parse every comma to suggest ambiguities
where none fairly exist. And of course ambiguity is anathema to the
defendant, since it is the party most at risk from an overly broad
interpretation urged by its competitors or others. In that respect,
the Proposed Judgment is a strikingly plain-worded document,
difficult (for anyone versed or educated in the field) to
misinterpret mad even more difficult, it would seem, to avoid. The
Proposed Judgment is accompanied by a thorough and convincing
Competitive Impact Statement that explains the theory underlying
each section of the Proposed Judgment, how it addresses and cures
the conduct found wanting by the Court of Appeals, and how it would
operate in practice. The Competitive Impact Statement itself would
surely assist in, if not dictate, the resolution of may arguable
ambiguity.
The Proposed Judgment broadly prohibits any retaliation against
OEMs that distribute competitive middleware or operating systems
(Section III.A), requires uniform licensing terms (which cannot
include exclusive or percentage promotion of Microsoft middleware)
to the significant universe of OEMs (Section III.B), and leaves most
desktop decisions to the OEMs" discretion. (Section III.C).
This all seems very plain. The Proposed Judgment permits OEMs to
install icons or shortcuts to access products that provide
particular types of functionality, even if they compete with
Microsoft's own installed versions (Section III.C.1), so long as
they do not impair the user interface. Basically, the Original
Equipment Manufacturers (OEM) can add an icon to access, for
example, a competing photo program, provided that shortcut works
without unseating Windows itself. Surely there is little room for
ambiguity here.
Under the Proposed Judgment, Microsoft can override a competing
product only if that product "fails to implement a reasonable
technical requirement." Basically, Microsoft can provide the
consumer with its own product if the competitor's doesn't work, and
even then the failing product's proponent is given the right to
remedy the problem. Competitors have objected to the use of the word
'reasonable," which is obviously a standard the Courts
have dealt with successfully since the outset of the common law.
There is no ambiguity apparent here. Next, the Judgment requires
Microsoft to disclose the Application Programming Interfaces (API)
for new products to makers of interoperable products, whether they
make hardware or software or are Internet carriers, unless the
disclosure would compromise security or anti-privacy safeguards
(Section III.D). No ambiguity exists here, and the burden would
certainly be on Microsoft to demonstrate that the API disclosure
would impair security or privacy, which should in any event be a
primary goal of the competitor as well.\9\ And the API disclosure
must be made timely and in good faith, again well-recognized
standards in the courthouse. Microsoft also agrees not to
automatically alter competitors" icons or shortcuts placed on
the desktop by OEMs (Section III.H.3). It can offer its own
alternatives to consumers, but they can accept or decline as they
see fit,
[[Page 28940]]
and many a court has said in other contexts that there's no
harm in asking.
---------------------------------------------------------------------------
\9\ This has been a goal for Microsoft, which has just
announced a company-wide suspension of development while security
concerns are assessed and resolved. The New York Times, January 17,
2002.
---------------------------------------------------------------------------
Under the judgment, OEMs can even include a competing operating
system as easy to access as Windows, arid even give it preference in
the boot sequence. Again, this seems to be as clear as it reads.
In short, the Proposed Judgment is plainly worded and devoid of
apparent ambiguity. One competitor has suggested that Microsoft
improperly seized on art ambiguity to avoid the 1995 Consent Decree
to the extent that the decree prohibited the integration of the IE
browser with Windows. This is an intriguing fallacy, but a fallacy
nonetheless. Microsoft certainty did seek to integrate IE with
Windows, but this was consistent in its judgment with the 1995
Decree; and the Court of Appeals agreed that it was entirely legal
for Microsoft to do so, under the plain wording of that document.
Impact Upon Third Parties. The Proposed Judgment goes far beyond the
prohibition of the handful of specific and isolated instances of
conduct found wanting by the Court of Appeals, to generic relief
which presumably will benefit all those to which it is directed and
all others within its ambit. Will consumers be satisfied? Presumably
they will vote with their pocketbooks. Will competitors be
satisfied? Presumably never, but the correct test is whether the
proposed decree would positively injure third parties, not whether
some competitor claims that it could be better treated.\10\
---------------------------------------------------------------------------
\10\ U.S. v. Microsoft, 56 P.3d 1448, 1461 n.9.
---------------------------------------------------------------------------
For example, California and the other States dissenting thus far
from the settlement have proposed instead that the Company
completely redesign Windows (and then presumably maintain, update,
and support it) to offer a version stripped even of the browser,
then force open-source licensing of the browser, require Java (a
competitive operating system of sons), to be included in Windows,
and require licensing of the Office Suite to third parties like
Apple (although Apple now already has it). A new 60-day version of
Hart Scott Rodino Act would also be imposed on Microsoft
acquisitions, another and entirely new commercial burden on a
company never even accused of growth through acquisition. Conduct
specifically upheld by the Court of Appeals would be specifically
baited. We submit that this is a wish list for competitors, not
consumers, and has nothing to do with fostering competition as
anticipated by the U.S. antitrust laws.\11\ To the extent that
alternative remedy proposals were put forward by all parties,
including the competitors intent on imposing their own punitive
schadenfreude on Microsoft, they were considered by the Department
in formulating the Proposed Judgment, including specifically the
very remedies now proposed again by the dissenting States.\12\
"The United States has ultimately concluded that the
requirements and prohibitions set forth in the [Proposed Judgment]
provided the most effective and certain relief in the most timely
manner." \13\
---------------------------------------------------------------------------
\11\ Netscape, the competitor whose objections set off the
1998 case, has objected that it never would haw corn, into being if
the Proposed Judgment had been in place when Netscape's own monopoly
was created in 1994. Dow Jones Newswires Dec. 12, 2001. If this is
to be believed, then presumably Netscape's multi-billion dollar
combination with AOL also would have been avoided.
\12\ Competitive Impact Statement, p. 35
\13\ Id. at 36.
---------------------------------------------------------------------------
The Enforcement Mechanism. The final substantive prong of the
Tunney test is whether the Proposed Judgment is readily enforceable.
In this respect, the Proposed Judgment contemplates contempt
sanctions and other relief if violated. Microsoft has agreed to
appoint an Internal Compliance Officer \14\ to supervise an
internal compliance program, and has also agreed to the
extraordinary remedy of an onsite, court-approved Technical
Committee, experienced in software design and programming, with
virtually unfettered access, for at least five years, to the
Company's design and business planning and implementation, for the
purpose of ongoing and constant oversight regarding the Company's
compliance.\15\ In this respect, as well as in the breadth of the
conduct remedies which will be supervised, the Proposed Judgment
vastly exceeds the typical constraints imposed upon a settling
defendant. Courts are most reluctant to impose sanctions which
require the ongoing observations of a defendant's commercial
activities. Here, to the contrary, the oversight established by the
onsite observers will give the Court, and interested outsiders as
well, more assurance than could reasonably be ever expected
regarding the Company's ongoing good faith adherence.
---------------------------------------------------------------------------
\14\ Microsoft on December 13, 2001 announced the
appointment of its internal compliance officer as contemplated by
the Proposed Judgment. He is a former enforcement lawyer with the
Federal Trade Commission. The Public Interest. Overall, the Tunney
Act contemplates an affirmative finding that the settlement is in
the public interest, There are several other factors relevant to
this consideration, beyond the specific traditional tenets of
approval discussed above.
\15\ By Stipulation, Microsoft began complying with the
Proposed Judgment effective December 16, 2001.
---------------------------------------------------------------------------
Adequacy of the Remedy. First, the Proposed Judgment should be
considered in light of the remedies one might expect to have been
imposed after further evidentiary hearings, briefs, arguments,
conclusions, and the inevitable appeals. In this respect, one
searches in vain for precedents as broad and inhibiting as the
Proposed Judgment in a case where all claims except isolated,
specific findings of market position maintenance have been dismissed
or unilaterally discarded by the principal prosecutors. We submit
that judicial remedies might well be expected to be far more
'surgical" and conduct-specific than the broad and
thoroughgoing conduct requirements imposed by the Proposed Judgment,
not the least of which is the ongoing oversight to assure good faith
compliance.
Certainly office Remedy: Second, there is no assurance that an
eventual judicial remedy would survive appeal, since the case is
presently proceeding on remand on the basis of findings of fact and,
in part, on conclusions of law \16\ expressed by a trial judge
with deepseated, privately expressed, actively concealed, personal
bias against the company and its president reflected by the drastic
remedies ordered after the briefest of further proceedings.\17\ The
Supreme Court has deferred consideration of this issue, and so
observers in the meantime must accept the illogic of an appellate
court finding that the District Judge had repeatedly violated law
and the judicial canons, but nonetheless feeling constrained to
accord his findings of tact and law the same presumptions of
correctness usually reserved for judges with no appearance of
impartiality.\18\
---------------------------------------------------------------------------
\16\ U.S. v. Microsoft Corp., 84 F. Supp. 2d 9 (D.DC
1999); U.S. v. Microsoft Corp., 87 F. Supp. 2d 30 (D.DC 2000).
\17\ U.S. v. Microsoft Corp., 97 F. Supp. 2d 59 (D.DC
2000).
\18\ According to the Court of Appeals, the District
Judge's violations of the Code of Conduct for United States
Judges and Section 455(a) of the Judicial Code by speaking to
reporters about the case while it was pending were
"deliberate, repeated, egregious, and flagrant." 253
F.3d 34, 107 (DC Cir. 2001). The judge's insistence to the reporters
to embargo his comments until the trial was over implied full
knowledge of the improprieties. This arrangement made it impossible
for Microsoft to have objected sooner, an objection that the
appellate court said would have succeeded by the removal of the
trial judge from the case.
---------------------------------------------------------------------------
If the case proceeds to judicial remedies, with the inevitable
appeals, there is more than a fair likelihood that the Supreme Court
would refuse to accept any of the former trial judge's findings
under the circumstances; rather, the Court would likely remand the
case to begin again before an unbiased jurist. The Proposed Judgment
obviates that possibility to some extent, and would avoid it
completely if it were joined by the thus far dissenting States, and
thereby achieve a final resolution.
The Remedy and Innovation. In 1998, when the then Assistant
Attorney General made his often-quoted 'surgical strike"
comments, his purpose was to allay concern in the computer industry
that the Government was opening a broadside attack on Microsoft,
which is, sadly, exactly what the ease then became. His purpose was
to assure innovators that they could continue to innovate without
governmental interruption or interference, provided that they stayed
within the principal antitrust boundaries.
Microsoft has been reported publicly as saying that innovation,
at least its own, will not be impeded by the Proposed Judgment. We
submit that is a critically important issue for the Court in
considering the public interest overall.
For example, Windows XP, Microsoft's latest rendition of
the operating system, presents users, according to its reviewers,
with improvements in reliability, performance, and system security,
and also facilitates multi-use end user customization, workplace
enhancements, and marked file improvements. It continues to
integrate IE, and adds instant messaging (a favorite feature of
AOL), digital photography and movie making, and other media features
to the new design. Industry reaction has been fascinating. Some
competitors have reportedly been encouraging the Department and
certain of the States to resurrect the original IE integration ease,
arguing that the Company should make the various components of its
integrated design (some of which have been part of Windows for many
[[Page 28941]]
years) available separately. Others, notably Apple, have instead
decided to compete where competition belongs--in the
marketplace instead of the courthouse. Apple is scheduled to begin
shipping the elegant and affordable "iMac," which will
incorporate "iDVD," a DVD recording software,
"iPhoto," a photo organizer and processor,
"iTunes," a CD and internet music player and converter,
and "iMovie," which enables easy home-movie production,
and other features, all on a 15-inch fiat panel display connected to
a computer half the size of a basketball at a very competitive
price.
Would Apple have created this incredible device had Microsoft
not raised the bar with Windows XP? Perhaps, but far less likely. We
submit therefore that an important component of the Court's Tunney
Act determination is to ensure that any proposed judgment does not
stifle the very innovation the antitrust laws were enacted to
promote. Otherwise, such a judgment could surely serve the private
interests of competitors rather than the public interest of
competition and consumers, and thereby make a mockery of the very
process which the Tunney legislation cautions against and condemns.
Conclusion. The United States has said it best: "[T]he
[Proposed Judgment], once implemented by the Court, will achieve the
purposes of stopping Microsoft's unlawful conduct, preventing its
reoccurrence, and restoring competitive conditions in the personal
computer operating system market, while avoiding the time, expense
and uncertainty of a litigated remedy." \19\ We support the
Proposed Judgment. The matter is long overdue for resolution, and
the States that have declined to join the settlement should, in our
judgment, be urged by the Department and the Court to reconsider and
adopt it.
---------------------------------------------------------------------------
\19\ Competitive Impact Statement, p. 34.
---------------------------------------------------------------------------
Respectfully submitted,
Robert A. McTamaney, Daniel J. Popeo, Carter, Ledyard &
Milburn, Paul D. Kamenar
2 Wall Street Washington Legal Foundation
New York, New York 10005 2009 Massachusetts Ave., NW
(212) 238-8711 Washington, DC 20036
(202) 588-0302
Date: January 25, 2002
MTC-00030602
Fax Cover Sheet
To: Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
From: Rebecca Henderson
5 Kitson Park Drive
Lexington MA 02421
Re: Tunney Act Submission
Comments on the proposed United States v. Microsoft Settlement
Date: January 26, 2002
Tunney Act Submission United States v. Microsoft
Rebecca Henderson,
Eastman Kodak LFM Professor of Management
MIT Sloan School
January 2002
Introduction
My name is Rebecca Henderson. I am the Eastman Kodak LFM
Professor of Management at the MIT Sloan School of Management, where
I have been teaching since 1988. I am also a Research Associate at
the National Bureau of Economic Research. My C.V. is attached.\1\
---------------------------------------------------------------------------
\1\ In 1999 1 was retained by the Department of Justice as
an expert witness in connection with the remedies phase of the
Microsoft trial. The declaration that I filed in the spring of 2000
as a result of this work is available on the Department of Justice's
web site. While I do not believe that anything in this document is
inconsistent with the opinions that I would have expressed in court
had I been called as a witness, the opinions expressed here are
entirely my own. Nothing in this document draws in any way on
confidential information to which I was given access in the course
of my work with the Justice Department.
---------------------------------------------------------------------------
I write to express my deep concern with the terms of the
proposed settlement between the United States and the Microsoft
Corporation. In my view it does almost nothing to remedy the harm
caused by Microsoft's prior illegal conduct, and the provisions that
it includes in an attempt to forestall future anticompetitive
conduct fall short on a number of important dimensions, Moreover it
creates incentives for Microsoft to engage in behavior that has the
potential to create significant harm for consumers.
1. A failure to remedy the harm caused by prior illegal conduct.
As the Court found and the Appeals Court maintained, Microsoft
engaged in a systematic pattern of illegal conduct in an attempt to
undermine Netscape's position in the browser market. Microsoft came
to believe that the Netscape Browser had the potential to develop
into "cross-platform middleware," since it potentially
enabled the development of full-featured PC applications on a range
of platforms. Microsoft viewed this possibility as a potent threat
to its monopoly and moved against Netscape with devastating effect.
Microsoft's predatory conduct crushed the possibility that Netscape
might emerge as a viable alternative platform for full-featured
applications development.
Microsoft's success in preventing the emergence of browser-based
alternative platforms that would threaten the applications barrier
to entry, along with its current overwhelming and increasing share
of browser usage, puts the firm in an extraordinarily strong
position to prevent the emergence of other threats to its desktop
monopoly. The proposed settlement does almost nothing to attempt to
redress this harm.
A world in which Netscape had succeeded in building a dominant
share of the browser market would have been one that was
significantly more conducive to competition (and significantly more
threatening to the Microsoft monopoly). A successful independent
browser would not only have been potentially important cross
platform middleware in its own right: it would also have been of
enormous assistance to the further development of additional
independent middleware. Both would have greatly increased the
possibility that Microsoft's desktop monopoly would have faced
significant competition. Had Netscape succeeded the world would
probably be different in three important respects. First, the
Netscape browser might have become an ideal platform for web-centric
and network-centric applications cross-platform applications.
Second, if there had been a widely-distributed browser outside
Microsoft's control, new middleware initiatives such as Java, that
involve software running on the client would certainly have been
able to achieve widespread distribution without Microsoft's
sufferance. Third, the existence of such a browser would have given
Microsoft much less control over the evolution of important Internet
interfaces, increasing the possibility that new types of middleware
running on the server might emerge to facilitate challenges to the
Windows monopoly.
(i) The Netscape Browser might have become a platform for
applications development An independent browser might have become an
ideal platform for web-centric and network-centric cross-platform
applications. An independent browser enables developers to write
cross-platform applications without additional porting costs. As the
Court found, "for at least the next few years, the
overwhelming majority of consumers accessing server-based
applications will do so using an Intel-compatible PC system and a
browser," (FOF 27) and a "browser product is
particularly well positioned to serve as a platform for network-
centric applications that run in association with Web pages."
(FOF 69). Or as Microsoft's Ballmer expressed it: "the browser
is as much a platform for what people will want to do in the
Internet over the next several years as DOS was the platform for
what people would want to do on personal computers." (RX 21,
at 4). Microsoft's illegal actions ensured that Netscape did not
have the opportunity to develop into this kind of cross platform
middleware, and the proposed settlement does nothing to reverse
this.
(ii) A successful Netscape Browser would have developed into a
distribution vehicle for additional non Microsoft cross platform
middleware As both the Court and the Appeals Court found, one of the
goals of Microsoft's illegal conduct was the suppression of platform
independent Java. An independent, widely distributed Netscape
Browser would have become an ideal vehicle for the distribution of
this kind of platform independent middleware. Microsoft, in
contrast, has very little incentive to distribute client based
middleware that might facilitate the development of cross platform
applications. Netscape's defeat in the browser war means not only
that the browser itself is not available as a platform for
applications development but also that the Java virtual machine, and
other middleware technologies like it, are much less likely to be
widely available on the PC. The proposed settlement attempts to make
the distribution of alternative middleware possible, but its
provisions are incomplete and are likely to be ineffective.
(iii) Microsoft's control of the browser gives it enormous
influence over the future
[[Page 28942]]
development of the Internet, allowing it to ensure that server based
technologies that might lower the applications barrier to entry and
facilitate threats to the OS monopoly are unlikely to emerge. Owning
the dominant browser gives Microsoft great influence over the
evolution of the Internet, and in particular over the evolution of
important Internet interfaces. As Paul Maritz recognized, "By
controlling the client, you also control the servers." GX 498,
at MS980168614. This set of interfaces goes beyond the browser APIs
to which developers can directly write applications, to include the
set of interfaces that constitute the communications protocols
between the browser and the network. For information to be received
and viewed in Internet Explorer, the developer has to follow these
interfaces, and so has to conform to Microsoft standards. The
importance of browser interfaces is widely acknowledged. Ron
Rasmussen, an executive with operating system supplier Santa Cruz
Operation, testified: "if there is one person or one company
who controlled the browser and its look and feel and how it
presented applications, it could severely enhance or detract from
the application functionality of ... the server." Rasmussen
Dep., 12/15/98am, at 67:14--68:3. Similarly Brian Croll of Sun
testified that "having a degree of control over the
browser" is "critical" because the browser is
"linked very closely to whether a server is useful or
not." Because the "two sides need to talk to each
other," Sun cannot sell servers if the browser "can't
talk to the server." Croll Dep., 12/15/98pm, at
60:22--61:16. Control over the browser thus gives Microsoft
significant control over the software running on the server, and
this in turn makes it significantly less likely that software
running on servers will develop into potentially powerful
"cross platform middleware", facilitating competition to
the Microsoft Windows OS. Just as a platform independent browser
might have become an attractive platform for cross platform
applications development, so a server operating system that could be
accessed through Microsoft independent standards by an independent
browser might have become an attractive platform for applications
development, greatly increasing the probability that serious
competition to the Windows OS might emerge.
Microsoft's control of the browser greatly reduces the
probability that this will happen. Developers and content providers
will generally choose to write to the interfaces that will enable
them to reach the broadest possible audience (FOF 361). This led
Microsoft, when it had a low market share in browsers, to pledge to
write Internet Explorer to conform to some of the public interfaces
promulgated by the World Wide Web Consortium (W3C). RX 15 (Microsoft
Press Release, 7/8/97). In fact, Microsoft itself had difficulty
when its market share was only 30% in convincing its own Office
developers to take advantage of IE 4 features. GX 514, at MS7
0075706.
Given IE's dominant position today, web developers have an
incentive to write to IE's interfaces first and foremost, and now
that it has a dominant share, Microsoft has stated that it may not
always choose to support public interfaces. RX 16 (MSDN Online 2/7/
00). To the extent that Microsoft is able to impose Microsoft-
specific interfaces on the Internet, the capabilities of users of
non-Microsoft browsers to view content may be degraded or
eliminated. Cf. FOF 322 (Microsoft contracts requiring that content
providers offer content viewable only with IE or "with
acceptable degradation when used with other browsers"), and
the ability of server based software to develop into cross platform
middleware will be severely curtailed. The ability to influence the
development of web-based applications is a highly valuable tool for
future anticompetitive campaigns should Microsoft choose to mount
them. As web-based applications grow in importance, so does
Microsoft's ability to steer them towards being IE-centric, and,
given its control over the browser-to-operating system interface,
Windows-centric as well. The proposed settlement does nothing to
address this issue.
(iv) Conclusion
In summary, the proposed settlement does little or nothing to
redress the harm caused by Microsoft's destruction of the browser
threat. Microsoft's victory leaves it in control of all browser
interfaces, without the need to accommodate an independent browser
that might have served as an important platform for cross platform
applications, and without any real threat that a Java virtual
machine (or other comparable cross platform middleware) might be
widely distributed.
Prevention of Future Harm
The proposed settlement instead attempts to ensure that
Microsoft will not act against future middleware threats as it acted
against Netscape. Unfortunately its provisions in this respect are
insufficient to prevent the harm they seek to guard against.
(i) The definition of Middleware
Many of the most important provisions of the proposed settlement
refer to actions that Microsoft must take in regard to
"Middleware" products. For example, in section III D,
Microsoft is required to "disclose to ISVs, IHVs etc... the
APIs and related Documentation that are used by Microsoft Middleware
to interoperate with a Windows Operating System Product."
Similarly section III H requires that Microsoft allow end users and
OEMs to make a number of choices with respect to the nature of the
Middleware that is installed and invoked on the end user's PC. In
both cases the definitions of "Middleware" are overly
restrictive, and omit both current software that might well be
considered "middleware" in the terms of the original
case and new software that might emerge to take on the
characteristics of middleware. In the case of section III D,
Middleware is defined in section VI, point K as:
1. the functionality provided by Internet Explorer, Microsoft's
Java Virtual Machine, Windows Media Player, Windows Messenger,
Outlook Express and their successors in a Windows Operating System
Product and
2. for any functionality that is first licensed, distributed or
sold by Microsoft after the entry of this Final Judgment and that is
part of any Windows Operating System Product
a. Internet browser, email client software, networked audio/
video client software, instant messaging software or
b. functionality provided by Microsoft software that---
i. is, or in the year preceding the commercial release of any
new Windows Operating System Product was distributed separately by
Microsoft (or by an entity acquired by Microsoft) from a Windows
Operating System Product;
ii. is similar to the functionality provided by a Non-Microsoft
Middleware Product; and
iii. is Trademarked
There are two problems with this definition. The first is that
it omits a number of types of software that might reasonably be
considered potentially platform independent middleware. For example
it omits Handheld Computing Device synchronization software.
Handheld computers are probably currently complements to the PC:
their use encourages PC use and vice versa. But if the power and
speed of these devices increases sufficiently, and if a significant
number of important applications become available over the web via
server hosting and other kinds of services, one can imagine a world
in which the existence of Handheld Computing Devices might greatly
facilitate the development of substitutes for Windows. Thus software
that enables a PC to synchronize with a Handheld Computing Device is
arguably "Middleware" in the sense of the case. Other
types of software that might plausibly develop into
"Middleware" in the sense of the case but that are
omitted from the settlements definition include voice recognition
software, and directory and directory service support software.
The second problem with this definition is that it is inherently
static. In focusing on a subset of current Middleware products it
omits, by definition, any future middleware products that might
emerge. The path of technological progress in an industry as dynamic
as the computer industry is impossible to predict. In focusing on
current Middleware products rather than on the more general question
of which classes are software are likely to facilitate competition
to the Windows monopoly, the settlement makes it unlikely that
entirely new Middleware--the kinds of products that are perhaps
most likely to facilitate challenges to Windows--will be
covered by any of the provisions of the settlement.
This static focus is particularly evident in the definition of
"Middleware" in operation in the case of Section III H.
Here "Middleware" is defined by the statement:
Microsoft's obligations under this Section 111.H as to any new
Windows Operating System Product shall be determined based on the
Microsoft Middleware Products which exist seven months prior to the
last beta test version Notice that this means that these obligations
apply only to those Middleware Products for which Microsoft has
produced a product of its own. They would not cover, for example,
the first editions of the Netscape browser! More generally, if new
forms of Middleware emerge, the settlement gives Microsoft strong
incentives to bind them to the operating system immediately. If
Microsoft never issue the Middleware as a
[[Page 28943]]
separate product, by the terms of this clause it is never
"Middleware", and Microsoft never has to meet its
obligations under Section III H. (ii) Giving Microsoft control over
the pace and shape of technological development The agreement as
currently written is also flawed in that much of the assistance it
purports to offer to potentially important competitive Middleware is
not only very slow, but is also technically limited in important
ways.
The provisions of Section III.D, for example, require Microsoft
to release key information about the ways in which Middleware can
interoperate with the Windows Operating system "no later than
the last major beta release of that Microsoft Middleware." The
timing of a beta release varies by product, but in most cases the
availability of a beta release signals that the hard work of new
product development has been done, and the product is more or less
ready for sale. Delaying the release of key technical information to
third party suppliers until the time of a beta release puts third
party suppliers under a very significant handicap, since it forces
them to enter the market significantly after Microsoft.
In the case of Netscape, for example, denying them access to key
interface information until after the beta release of Microsoft's
first browser product would have forced them to delay their entry to
the marketplace very significantly and would have deprived them of
the early entry, "first mover" advantage that is often
the one of the most advantages that third party suppliers can offer
consumers. Competition thrives where new, innovative firms can enter
a market quickly with dramatically new offerings. This provision
would serve to slow competition to the speed at which Microsoft
wishes to compete.
The provisions of Section III.D. are also flawed in that they
restrict the release of critical technical information to "the
APIs and related Documentation that are used by Microsoft Middleware
to interoperate with a Windows Operating System Product." This
effectively forces potentially competitive Middleware to use the
same interfaces as Microsoft's middleware. Clearly some information
is better than none. But to the degree that the purpose of
competition is precisely to encourage the generation of alternatives
that do not mirror Microsoft's offerings, forcing competitive
software to use the same kinds of interfaces as Microsoft's own
offerings leaves tremendous control over the direction of
technological development in Microsoft's hands. Those competitive
offerings that wish to interoperate with the operating system in
different ways will get no help from this provision.
(iii) Who counts?
Section J.2. of the proposed settlement allows Microsoft to
condition the license of "any API, Documentation or
Communication Protocol related to anti-piracy systems, antivirus
technologies, license enforcement mechanisms, authentication/
authorization security..." to persons or entities that:
"meets reasonable, objective standards established by
Microsoft (my emphasis) for certifying the authenticity and
viability of its business." I read this provision as
suggesting that Microsoft can refuse to release key
information--information that is increasingly critical to the
development of any third party Middleware--to any firm that
Microsoft deems "inauthentic" or "not
viable." Would Microsoft have deemed Netscape viable, in its
early days? Will the company believe that firms whose business model
is based on the exploitation of Linux are viable? This provision
allows Microsoft to deny critical information to precisely those
kinds of firms that are most likely to provide significant
competition in the marketplace--those firms that may be too
small or too new or too unconventional to be "viable."
(iv) Forced Licensing
Section I. 5 provides that: "an ISV, IHV, IAP, ICP or OEM
may be required to grant to Microsoft on reasonable and
nondiscriminatory terms a license to any intellectual property
rights it may have relating to the exercise of their options or
alternatives provided by this Final Judgment; the scope of such
license shah be no broader than is necessary to insure that
Microsoft can provide such options or alternatives."
I find this wording ambiguous and potentially troubling. First,
I wonder why any third party should be required to license anything
to Microsoft. Microsoft's obligations extend to the provision of
technical information about interfaces and to offering to OEMs and
to end consumers the ability to remove Microsoft supplied
Middleware. It is not at all clear to me why Microsoft should need
to know anything about third party software in order to meet these
obligations. Second, I am troubled by a possible interpretation of
this language. One interpretation is that it forces third parties to
license their software to Microsoft in order that Microsoft should
be able to offer the same options and alternatives as the third
party supplier. Would this language not have forced Netscape to
license their browser to Microsoft so that Microsoft could provide
the Netscape browser as an alternative? If an OEM chooses to install
Real Player as the default media player, does this language imply
that Microsoft has the right to license Real Player so that
Microsoft also has the option to offer Real Player as the default
media player? Surely this kind of forced licensing can only suppress
competition?
(v) Second guessing consumer choice:
Although the current agreement purports to make it much easier
for OEMs to install alternative Middleware and thus to offer end
users a real choice of systems, the agreement severely restricts
this choice in two important respects. In the first place, Section
C.3. allows for the installation of third party Middleware provided
that "any such Non-Microsoft Middleware displays on the
desktop no user interface or a user interface of a similar size and
shape to the user interface displayed by the corresponding Microsoft
Middleware Product."
Just as section III.D. restricts the design of competitive
Middleware by limiting competitive knowledge of key interfaces to
knowledge of only those technical interfaces used by equivalent
Microsoft authored Middleware, so this provision restricts the
presentation of potentially competitive Middleware to a "look
and feel" roughly similar to Microsoft Middleware. How can
this restriction increase consumer welfare? If OEMs believe that end
users would welcome Middleware that uses a very different kind of
user interface for their alternative Middleware, should they not be
allowed to install it?
In the second place, Section H.3. permits Microsoft to offer end
users the choice to install Microsoft middleware as default software
14 days after the first boot of their system. While this provision
may seem innocuous, its real effect will be to remove choice from
the OEM. As the trial established, OEMs cannot afford the costs of
widespread consumer confusion. Imagine a world in which consumers
face every day--or every hour (!)--a screen saying
something like "are you sure you want to use Product ABC? Why
not use Microsoft XXX, a product designed to work seamlessly with
the operating system?" Many consumers may be effectively
forced into switching products in the face of what may well be
perceived as an implicit threat. Real competition cannot thrive
under such circumstances. OEMs should have the power to configure
systems in the ways they wish. Competition in the market place can
decide if these configurations create value for end users.
Microsoft incentives from this agreement.
Lastly, the agreement is flawed in that it creates incentives
for Microsoft to take actions that may significantly reduce consumer
choice. Framed as it is, the current agreement creates very strong
incentives for Microsoft never to release another piece of separate
"Middleware"! Releasing Middleware will incur
obligations--Microsoft will need to release technical
information and to permit OEMs to remove the Microsoft authored
product. These obligations can be easily evaded by immediately
bolting new applications to the operating system. This will create
two kinds of harm. In the first place, it will lead inevitably to
increasingly "bloated" code, Consumers that might have
preferred to purchase a "slimmer" Operating System will
be unable to do so. Indeed in the worst case Microsoft might
actively invest in the generation of "spaghetti
code"--systems in which the code necessary to provide the
new functionality and the code necessary to run the operating system
are deliberately commingled. Such commingling may significantly
lower the overall performance of the operating system. In the second
place, such immediate "bolting" will defeat the
intention oft he settlement: potential third party suppliers of such
Middleware will not have access to the key technical information
that would enable them to seamlessly interoperate with the operating
systems, nor will OEMs have the opportunity to install them in place
of the Microsoft Middleware. It is possible, of course, that the
fully integrated Microsoft solution that this agreement gives
Microsoft strong incentives to provide may be a technologically
superior solution. But this solution will be imposed on consumers
without the process of competition that has historically proven to
be such a source of consumer benefit.
Conclusion
The proposed settlement falls short in two critically important
respects. Not only does it
[[Page 28944]]
do almost nothing to redress the harm caused by Microsoft's illegal
conduct with respect to Netscape, leaving Microsoft with all the
fruits of its illegal victory, but the provisions that it includes
in an attempt to prevent a repetition of Microsoft's conduct in the
browser case are limited and incomplete.
Suppose a Middleware threat with the potential impact of the
Netscape browser were to emerge next year, or two years from now.
The terms of the proposed settlement do little to ensure that
Microsoft could not engage in an anticompetitive campaign to
successfully crush it. Unless Microsoft chooses to recognize it as
"Middleware" by producing a competing product, as
opposed to simply copying the functionality and immediately bolting
it to the operating system, it would not be covered by the terms of
this settlement. Even if Microsoft were to choose to recognize it
(and they would have strong incentives to avoid so doing), the
current settlement would allow Microsoft to decide that the firm
producing it did not have a "viable" business: to delay
releasing critical technical information until after the release of
its own beta product; to insist that its user interface be of
"similar size and shape" to Microsoft's own product and,
14 days after first boot up, to bombard consumers with the option to
switch to the Microsoft alternative.
Microsoft's victory in the browser war leaves it in a
significantly stronger position to protect its operating systems
monopoly and to block threats from any competition that might emerge
to challenge it. The settlement does very little to remedy this
situation and is instead rife with the potential for significant
consumer harm. Curriculum Vitae
Name: Rebecca Henderon Department: BPS, Sloan School
Birth Date: Oct 29, 1960 Place of Birth: London
Citizenship: US Citizen
Education
Harvard University Ph.D. 1983-1988
Doctorate in Business Economics. Thesis: The Failure of Established
Firms in the Face of Technological Change: A Study of
Photolithographic Alignment Equipment.
Massachusetts Institute of Technology S.B. 1978-1981
Mechanical Engineering.
Academic Employment:
Eastman Kodak LFM Professor, MIT Sloan School, 1999-
Tenured Associate Professor, MIT Sloan School, 1995-1999
Research Associate, National Bureau of Economic Research, 1995-
Thomas Henry Carroll Foundation Visiting Professor of Management,
Harvard Business School. 1996-1997
Robert Noyce Associate Professor, MIT Sloan School, 1993-1995
Research Fellow, National Bureau of Economic Research,
1990-1995
Visiting Assistant Professor, Stanford Graduate School of Business,
1992-1993.
Assistant Professor, MIT Sloan School, 1988-1992
Non Academic Employment:
McKinsey and Company Summer associate. Summer 1986
Harvard University Research assistant, K Clark. Summer 1985
General Electric Analyst, strategic planning. Summer 1984
McKinsey and Company Analyst. 1981-1983
Honors and Awards:
ASQ Awa??d for Scholarly Contribution 1996
Teacher of the Year 2001
Runner-up, Teacher of the Year 1990, 1991, 1992, 1993, 1995, 1996,
1998, 1999
Dively Award for best thesis proposal, H.B.S 1988
Alumane Award, (outstanding female graduate) MIT. 1981
Elected to Phi Beta Kappa 1981
Boards and Advisory Panels
Boards
The Whitehead Institute for Biomedical Research, Cambridge, MA.
1999--
Linbeck Construction Corporation, Houston Texas. 2000--
The Ember Corporation, Cambridge MA 2001--
Advisory Panels
The Department of Social and Decision Sciences, Carneige Mellon
1995--
ThePlatform, Inc 2000-
Anti-Trust Experience
Retained by the Department of Justice as an expert witness in
connection with the remedies phase of the Microsoft trial. Summer
1999--Spring 2000. Declaration available on line at:
www.usdoj.gov/atr/cases/ms--remediespapers.htm
Editorial Responsibilities
Department Head, Strategy, Management Science 1995--2000
Member, Editorial Board:
Administrative Science Quarterly 1994--
The Strategic Management Journal 1994--
Economics of Innovation and New Technology 1995--
Research Policy 1998--
Management Science 2000--
Publications
Journal Articles (Refereed).
"Putting Patents in Context: Exploring Knowledge Transfer
from MIT" Jointly with Ajay Agrawal, forthcoming in Management
Science
"Discontinuities and Senior Management: Assessing the Role
of Recognition in Pharmaceutical Firm Response to
Biotechnology" Jointly with with Sarah Kaplan, Fiona Murray,
forthcoming in Industrial and Corporate Change.
"Untangling the Origins of Competitive Advantage"
Jointly with Iain Cockburn & Scott Stern. Strategic Management
Journal, Fall 2000, Volume 21, 1123-1145 "Absorptive
Capacity, Coauthoring Behavior, and the Organization of Research in
Drug Discovery" Jointly with Iain Cockburn. Journal of
Industrial Economics, June 1998, Volume XLVI, No. 2.
pp157-182. "Universities as a Source of Commercial
Technology: A Detailed Analysis of University Patenting,
1965-1988" Jointly with Adam Jaffe and Manuel
Trajtenberg. Review of Economics and Statistics, Vol. 80, No. 1,
February 1998 pp 119-127. "The Perils of Excellence:
Barriers to Effective Process Improvement in Product-Driven
Firms" Jointly with Jesus del Alamo, Todd Becker, James
Lawton, Peter Moran, Saul Shapiro and Dean Vlasak. Production and
Operations Management, Vol. 7, No. 1, Spring 1998, pp 2-18.
"University versus Corporate Patents: A Window on the
Basicness of Invention" Jointly with Adam Jaffe and Manuel
Trajtenberg. Economics of Innovation and New Technology, 1997, Vol
5, No. 1, pp 19-50. "Scale, Scope and Spillovers: The
Determinants of Research Productivity in Drug Discovery."
Jointly with lain Cockburn. Rand Journal of Economics, Spring 1996,
27(1), pp. 32-59. "Measuring Competence? Exploring firm
effects in drug discovery." Jointly with Iain Cockburn.
Strategic Management Journal, Volume 15, pp 63-84, Special
issue Winter 1994. "The Evolution of Integrative Capability:
Innovation in Cardiovascular Drug Discovery" Industrial and
Corporate Change, Vol 3, No. 3, Winter 1994 pp 607630. "Racing
to Invest? The Dynamics of Competition in Ethical Drug
Discovery." Jointly with lain Cockburn. Journal of Economics
and Business Strategy, Volume 3, No. 3, Fall 1994, 481-519.
"Of Life Cycles Real and Imaginary: The Unexpectedly Long Old
Age of Optical Lithography" Research Policy, 1995, Vol. 24, pp
631-643. "Geographic Localization of Knowledge
Spillovers as Evidenced by Patent Citations." Joint with Adam
Jaffe and Manuel Trajtenberg. Quarterly Journal of Economics, August
1993, Vol. 434, pp 578-598 "Underinvestment and
Incompetence as Responses to Radical Innovation: Evidence from the
Photolithographic Industry." Rand Journal of Economics.
Vol.24, No.2, Summer 1993 "A Process Control Methodology
Applied to Manufacturing GaAs MMICs. (Jointly with Peter Moran,
Scott Elliott, Neil Wylie and Jesus del Alamo,) IEEE Transactions on
Semiconductor Manufacturing, November 1991, Vol.4., No.4
"Manufacturing Costs for Advanced Composites Aerospace
Parts." With C. Shipp and T. Gutowski. SAMPE, (Society for the
Advancement of Material and Process Engineering.) Vol. 27, No. 3,
May/June 1991. "Architectural Innovation: The Reconfiguration
of Existing Product Technologies and The Failure of Established
Firms." With Kim Clark, March 1990, Administrative Science
Quarterly, Vol 35, p9-30. Journal Articles (Non-refereed).
"Drug Industry mergers Won't Necessarily Benefit
R&D" Research Technology Management July -August 2000, Vol
43 No 4. P 10--11. "The Interactions of Organizational
and Competitive Influences on Strategy and Performance." With
Will Mitchell, Summer 1997, Strategic Management Journal Vol 18,
Summer special issue, pp5-14.
"Managing Innovation in the Information Age" Harvard
Business Review, January-February 1994, 100-106. Reprinted in
Seeing Differently, J.S. Brown, Ed., Harvard Business School Press,
Boston MA, 1997 and in The Product Development Challenge, Kim B.
Clark and Steven C. Wheelwright, Eds, Harvard Business School Press,
Boston MA, 1995.
"Breaking the Chains of Embedded Knowledge: Architectural
Innovation as a Source of Competitive Advantage." Design
Management Journal, Vol.2, No.3, Summer 1991 Chapters in Edited
Volumes.
"Publicly funded science and the productivity of the
pharmaceutical industry"
[[Page 28945]]
with Iain Cockburn, Chapter 1 in Innovation Policy and the Economy,
Number 1, 2000, National Bureau of Economic Research, Adam Jaffe,
Josh Lerner and Scott Stem, editors, The MIT Press, Cambridge MA.
"Luck," "Leadership" and
"Strategy". Economics Meets Sociology, Volume 17 in
Advances in Strategic Management, Edited by Joel A.C. Baum and Frank
Dobbin, pp 285-290, 2000 by Jai Press Inc, Stamford
Connecticut
"Measuring Competence? Exploring Firm Effects in Drug
Discovery" Jointly with Iain Cockburn. Chapter 6 in The Nature
and Dynamics of Organizational Capabilities, Edited by Giovanni
Dosi, Richard R. Nelson and Sidney G. Winter, 2000 by Oxford
University Press, Oxford, UK.
"The Economics of Drug Discovery" Jointly with Iain
Cockburn, Chapter 5 in Pharmaceutical Innovation, edited by Ralph
Landau, Basil Achilladelis and Alexander Scriabine, Chemical
Heritage Press, Philadelphia PA 1999, pp 308-331.
APharmaceutical and Biotechnology @ Jointly
with Iain Cockburn, Luigi Orsenigo and Gary Pisano. Chapter 13 in US
Industry--in 2000: Studies in Competitive Performance. David
Mowery, Editor. Board on Science, Technology and Economic Policy,
National Research Council. National Academy Press. Washington, DC,
1999.
"The Pharmaceutical Industry and the Revolution in
Molecular Biology: Interactions Among Scientific, Institutional and
Organizational Change." Jointly with Luigi Orsenigo and Gary
Pisano. Chapter 7 in The Sources of Industrial Leadership, Cambridge
University Press, David Mowery and Richard Nelson, Editors,
Cambridge University Press, 1999, pp 267-311.
"On the Dynamics of Forecasting in Technologically Complex
Environments: The Unexpectedly Long Old Age of Optical
Lithography" In Technological Innovation: Oversights and
Foresights, Raghu Garud, Pravenn Nayyar and Zur Shapira, Editors,
Cambridge University Press, New York, 1997.
"Trends in University Patenting 1965-1992,"
(Jointly with Adam Jaffe and Manuel Trajtenberg.) Forthcoming in the
Center for Economic Policy Research conference volume: University
Goals, Institutional Mechanisms and the "Industrial
Transferability" of Research.
"The Determinants of Research Productivity in Ethical Drug
Discovery." (Jointly with Iain Cockburn) In The American
Enterprise Institute Conference Volume: Competitive Strategies in
the Pharmaceutical Industry, Robert B Helms, Ed. Washington DC,
1996.
"Maintaining Leadership across Product Generations: The
Case of Canon in Photolithographic Alignment Equipment" in
Managing Product Development, Toshihiro Nishiguchi, Ed. Oxford
University Press, 1996. (This book was awarded the 1996 Shingo Prize
for Excellence in Manufacturing research.)
"Technological Change and The Management of Architectural
Knowledge." In Transforming Organizations, Edited by T. Kochan
and M. Useem. Oxford University Press, Oxford, U.K., 1992. Reprinted
in Organizational Learning, edited by Michael D. Cohen and Lee S.
Sproull, Sage Publications Inc, CA, 1996. Conference Proceedings.
"Public-private interaction in pharmaceutical
research" (Jointly with Iain Cockburn) in the Proceedings of
the National Academy of Sciences 93/23 (November 12, 116) p.
12725-12730
"Controlling Variability of Sub-micron Gate Lithography in
a GaAs MMIC Manufacturing Environment." (Jointly with Peter
Moran, Jesus del Alamo, Nell Wylie and Scott Elliott.) Presented at
the SEMI Advanced Semiconductor Manufacturing Conference, pp136a-g.
September 1990, Danvers, MA.
"Workload Regulating Wafer Release in a GaAs Fab
Facility." International Semiconductor Manufacturing Science
Symposium, May 1990, San Francisco, CA. (Jointly with James Lawton,
Al Drake, Lawrence Wein, Ron Whitney, and Dick Zuanich) Working
Papers.
"A Behavioral Analysis of Learning Curve Strategy"
With Eric Beinhocker, Lee Newman and John Sterman.
"Balancing Incentives: The Tension between Basic and
Applied Research" Jointly with Iain Cockburn and Scott Stern.
MTC-00030603
January 28, 2002
VIA FACSIMILE (202) 307-1454
The Honorable Charles James
Assistant Attorney General for Antitrust
c/o Renata Hesse, Antitrust Division
U.S. Department of Justice
601 D Street, N-W, Suite 1200
Washington, DC 20530-0001
Dear Assistant Attorney General James: The proposed Final
Judgment submitted in U.S. v. Microsoft Corporation, mad State of
New York et al. v. Microsoft Corporation, triggers obligations by
you under the Antitrust Procedures and Penalties Act (the
"Tunney Act"), set forth at 15 U.S.C. 16.
Under the Act, you are designated to "receive and consider any
written comments relating to the proposal for [a] consent judgment
submitted under... this section." i5 U.S.C.
16(d). On November 8, 2001, Judge Colleen Kollar-
Kotelly ordered "that members of the public may submit written
comments concerning the proposed Final Judgment to [the Justice
Department.]" This letter is sent to you pursuant to this
statute and court order.
As Chairman of the Subcommittee on Antitrust, Business Rights,
and Competition of the Senate Committee on the Judiciary, I have
studied the proposed settlement of the government's antitrust
lawsuit against Microsoft very closely, and I write to express my
concern about whether the settlement is in fact "in the public
interest." 15 U.S.C. 16(e). Accordingly, I
respectfully ask that you address the issues raised in this letter
when you file with the district court your mandatory
"response" to these comments. See 15 U.S.C.
16(d). This settlement affects vast and important
segments of the U.S. economy, and thus, its significance cannot be
overstated. As a result, I believe it should only be approved if it
can truly be shown that the settlement is "is m the public
interest," Such a determination will require the court to
assess "the competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration of relief sought, [and] anticipated effects
of alternative remedies actually considered." 15 U.S.C.
16(e)(1). These comments and questions are designed to
inform this inquiry.
(1) Does the proposed settlement contain significant loopholes
that render it largely ineffective to cure the damage to competition
caused by Microsoft's illegal behavior? The unanimous District of
Columbia Circuit Court of Appeals held that Microsoft violated
section 2 of the Sherman Act by illegal conduct designed to maintain
its monopoly on personal computer operating systems. The proposed
settlement is designed to "provide a prompt, certain and
effective remedy for consumers" arid "halt continuance
mad prevent recurrence of the violations of the Sherman Act by
Microsoft... and restore competitive condition, s to the
market." Competitive Impact Statement at 2.
However, it appears that, in many respects, the Revised Proposed
Final Judgment ("PFJ"), contains so many loopholes,
exceptions, qualifications, and definitional limitations that
Microsoft can easily avoid its requirements. I have serious concerns
that these loopholes and qualifications in the proposed settlement
render it inadequate to accomplish its task of remedying Microsoft's
illegal conduct and restoring competition in the computer software
market. I will list a few examples below, but this list is not
exhaustive.
(a) Million software copy limitation--Under the proposed
consent decree, competitive access to the computer desktop has to be
provided for certain types of firs.1 software application makers.
More specifically, Microsoft must permit computer manufacturers and
computer users to replace the icons, short-cuts, or menu entries for
Microsoft Middleware Products on the desktop or start menu with Non-
Microsoft Middleware Products. See PFJ III.H.1. But the
proposed consent decree contains a loophole in the definition of
Non-Microsoft Middleware Products that denies that protection
unless, in the prior year, "at least one million copies [of
that rival software] were distributed m the United States."
Id. VI.N. Thus, many start-up software companies with
promising yet unproven technology in the pipe]me--precisely the
companies most in need of protection from exercise of market power
by a monopolist--will be left unprotected by the settlement.
This could have a negative impact on the flow of venture capital and
investment to technology start-ups--precisely the engine that
drove the economic expansion of the late 1990s and a key to further
expansion of our all-important technology sector. Requiring the
distribution of a million copies in the United States in a year
seems a very high threshhold. Why was this limitation written into
the settlement? Why was the one million number chosen? In this era
of internet downloads, how can a software maker prove that a million
copies were distributed in the United States? What purpose does this
limitation serve? Should the consent decree be modified to close
that loophole and foster
[[Page 28946]]
new investments and growth by protecting those investments from
monopoly practices?
In answering this inquiry I would request that you conduct a
survey of a representative sample of non-Microsoft middleware
product manufacturers to determine how long it took them to
distribute one million copies of their software in the United States
(if in fact they have done so). For example, it would be fruitful to
determine how long it took products such as Kodak photofinishing
software or the Palm OS to reach this threshhold, even though they
might not qualify as non-Microsoft middleware products under the
decree.
(b) Definitional limits on API disclosures--A cornerstone
of the proposed settlement is the requirement that Microsoft
disclose certain Application Programming Interfaces
("APIs") that are used by Microsoft Middleware to
interoperate with a Windows Operating System Product. See
III.D. Yet the definition of Microsoft Middleware is limited
in such a way that raises doubts about the true extent of the
requirement of API disclosure. Microsoft Middleware must be
distributed seperately from a Windows Operating System Product and
must be trademarked. Id. VI.J. And any product comprised of
the Microsoft or Windows trademark together with descriptive or
generic terms are not considered to be trademarked. Id VI.T.
It appears that these definitional limitations will make it easy for
Microsoft to avoid having to disclose APIs. Why can Microsoft simply
decide not to trademark software and thereby have it fall outside
this definition? Why does the definition of trademark exclude
products identified by the Microsoft or Windows trademark plus a
generic term?
In addition, Microsoft need not release any API to a software
maker unless Microsoft determines that the software maker "has
a reasonable business need for the API" and "meets
reasonable, objective standards established by Microsoft for
certifying the authenticity and viability of its business."
Id. III.J. Many are concerned that permitting Microsoft to
determine the "business need" and
"viability" of potential competitors will be another way
Microsoft can avoid the API disclosure requirements.
Another limit on API disclosure applies to new versions of
Windows Operating Systems Products. With respect to new versions,
disclosures of APIs need only be made in a Timely Manner. Id.
III.D. Timely Manner is defined to mean when Microsoft
releases a test version of a Windows Operating System Product to
150,000 beta testers. Id. VI.R. Microsoft could avoid this
provision by simply having the new version--and the obligation
to release APIs tested by less than 150,000 beta testers. What
assurance is there that Microsoft will not avoid the API disclosure
limitation in the future in this manner? There are many other
definitional limits and qualifications found throughout the proposed
consent decree. Beyond their specific provisions, these limitations
raise the broader--and fundamental--question: is the
proposed settlement is strong enough to make sure that Microsoft
cannot use its monopoly power to squelch competition and innovation?
(2) Is the scope of the settlement's protection of middleware
adequate to promote competition ? Before even running the gauntlet
of the decree's restrictions outlined above, software must qualify
as non-Microsoft middleware under the restrictive definitions of
middleware used in the decree, see PFJ VI.J, VI.K, VI.M,
VI.N. The decree's protections are largely limited to competitors of
"Microsoft Middleware Products." But the definition of
what is (or is not) a Microsoft Middleware Product remains somewhat
ambiguous. Windows Messenger is covered, but MSN Messenger does not
appear to be. Internet Explorer is covered, but MSN Explorer seems
to be missing. Popular products such as software for personal
digital assistants and photofinishing are excluded. What accounts
for these gaps? And why did the Department of Justice and Microsoft
abandon the definition of middleware that had been employed by, the
District Court and affirmed unanimously on appeal? These definitions
lie at the core of the consent decree's potential effectiveness. The
heart of the Court of Appeals" ruling was that Microsoft's
acts of illegal monopoly maintenance blocked the ability of
competitors to develop middleware which could effectively become an
alternative platform to compete with the Windows operating system.
The goal of the consent decree therefore must be to encourage and
protect innovation in the middleware field. Yet the more restrictive
and unclear the definitions are, the more they introduce uncertainty
into this field and the more ineffective the consent decree will be.
If potential innovators believe that Microsoft can avoid the ambit
of the decree, then hopes for spurring innovation and competition
among middleware products will be lost.
(3) Why is Microsoft ever allowed to retaliate against the
computer makers? The settlement rests on the computer makers"
ability to promote competition on the desktop and in the industry
generally. A key provision of the consent decree bans Microsoft from
retaliating by agreement for a computer makers loading certain types
of non-Microsoft software on its computers. See PFJ III.A.
Yet, the ban on Microsoft retaliation against computer makers is
limited: the decree only bans retaliation in commercial agreements
(not other forms of retaliation); only bans retaliation for removing
specifically named "Microsoft Middleware Products" (not
other Microsoft products); and only bans retaliation, for promoting
specific competitive products (and not other products that could
challenge Microsoft's desktop dominance). Will these loopholes
"swallow the rule" that Microsoft should be banned from
retaliating against computer makers? Would it not be far simpler to
ban all Microsoft retaliation against the computer makers?
(4) Will Microsoft be able to accomplish through incentives what
it could not accomplish by retaliation.? The ban on retaliation in
no way prevents Microsoft from paying incentives to computer makers
to strongly prefer--or install exclusively--Microsoft
software products. Indeed, the proposed consent decree expressly
provides that nothing "shall prohibit Microsoft from providing
Consideration to any OEM with respect to any Microsoft product or
service where that Consideration is commensurate with the absolute
level of that OEM's development, distribution, promotion, or
licensing of that Microsoft product or service." PFJ
III.A. Given Microsoft's market power and financial resources,
what will prevent Microsoft from using its financial resources, what
will prevent Microsoft from paying bounties to computer
manufacturers to "voluntarily" exclusively install or at
least to prefer, Microsoft products, thereby accomplishing through
incentive payments what it could not achieve by retaliation?
(5) Why does the settlement abandon the ban on commingling that
the Court of Appeals found to be illegal? Nothing in the agreement
prohibits Microsoft from commingling code or binding of its
middleware to the Operating System (OS), even though the Court of
Appeals specifically found Microsoft's commingling of browser and OS
code to be anti-competitive and rejected a Microsoft petition for
rehearing that centered on this issue. Computer manufacturers are
likely to be discouraged from installing competing middleware
products to those commingled with OS code, as these are likely to
slow down the computer's speed and performance. Why should the
proposed settlement permit this commingling to continue in the face
of an explicit finding of illegality from the Court of Appeals?
(6) Is the five year term of the settlement sufficient to
restore competition? The proposed consent decree has a five year
term (extendable for two years only if the Court finds Microsoft has
engaged in willful and systematic violations of the decree). PFJ
V. This is an unusually short time for an antitrust consent
decree, which is typically ten years in length. Many wonder if this
term is sufficient to remedy Microsoft's illegal conduct and restore
competition. Why was the term of the decree limited to five years?
How can we be sure that five years will be sufficient to restore
competition?
In addition, under the decree, Microsoft has up to a year after
submission of the decree before implementing several of its
provisions, including the crucial API disclosure requirements and
the provisions granting computer manufacturers and users the right
to modify the start-up menus and icons with competing products. See
PFJ III.D, III.H. Thus the effective time that Microsoft
must live under these restrictions is substantially shorter than the
five year term of the agreement. And yet, this summer, when
Microsoft made some very, minor changes to Windows to respond to the
Court of Appeals ruling, it took just three weeks to make the
changes. Given Microsoft's proven ability to make rapid changes,
would it not be in the public interest to require Microsoft to live
by the consent decree immediately and not wait another year?
(7) Is the enforcement mechanism sufficient? The proposed Final
Judgment does not set forth vigorous enforcement mechanisms to keep
Microsoft within the framework of this settlement. The proposed
consent decree requirements the appointment of a "Technical
Committee" to
[[Page 28947]]
monitor compliance with the decree, but its findings are entirely
advisory and not binding on Microsoft. PFJ IV.B. The only true
enforcement mechanism would be for the Justice Department to go to
Court in art enforcement action. In such an enforcement action, no
work product findings or recommendations of the Technical Committee
can be admitted as evidence in court. Id. IV.D.4.d.
"While Microsoft is required to "be reasonable" in
its conduct: violations of such "be reasonable"
provisions can only be remedied through proceedings that will
become, in essence, mini-retrials of U.S. v. Microsoft itself. Are
these provisions sufficient to ensure that the settlement can be
enforced properly? Without an iron-clad enforcement mechanism, how
can the public take solace in the "promise" that
Microsoft will "be reasonable" given the history of
litigation in this case, and earlier antitrust lawsuits against
Microsoft?
(8) What will the settlement's effect be on Microsoft's future
conduct? Microsoft is has dubbed its aggressive Internet strategy
.NET or "Hailstorm"--a strategy to give consumers a
one-stop shop on the Internet. How will the consent decree foster
competition for these future "platforms?" If the purpose
of this case was to check Microsoft's monopoly power, how will the
Justice Department ensure that this monopoly dominance is not
extended from the desktop to the Internet? And why are critical new
technologies, such as digital rights management and identity-
authentication, exempted from the proposed settlement's disclosure
provisions? In closing, we today stand on the threshold of writing
the rules for competition in the digital age, and we have two
choices. One option involves one dominant company controlling the
computer desktop, facing minor restraints that expire in five years,
but acting as a gatekeeper to 95% of all personal computer users.
The other model is the flowering of innovation and new products that
resulted from the ending of the AT&T telephone monopoly nearly
twenty, years ago. From cell phones to faxes, from long distance
price wars to the development of the Interact itself, the end of the
telephone monopoly brought an explosion of new technologies and
services that benefit millions of consumers every day. We should
resist on nothing less from this proposed settlement. In sum, any
settlement in this case should make the market for computer software
at least as competitive as the market for computer hardware is
today. We should insist on a settlement that has an immediate,
substantial, and permanent impact on restoring competition in this
industry. I recognize the extraordinary effort that the Justice
Department has expended in the litigation of this case, and I thank
you and your staff for the vigor with which you have pursued this
challenging case. I believe that answers to the questions and issues
posed above are essential for determining whether the proposed
settlement is in the public interest. Thank you for your attention
to this matter.
Sincerely,
HERB KOHL
Chairman
Subcommittee on Antitrust,
Business Rights and Competition
MTC-00030604
BLUMENFELD & COHEN
--Technology Law Group--
1625 Massachusetts Avenue, NW
Suite 300
Washington, DC 20036
202-955-6300
202-955-6460 FAX
Facsimile Cover Sheet
FROM: Patrick O'Connor DATE: January 28, 2002
TO: Renata B. Hesse FAX: (202) 307-1454 TEL:
CC: Audrie Krause, NetAction (415) 673-3813
Dear Ms. Hesse: The attached are the Comments of NetAction and
Computer Professionals for Social Responsibility on the Proposed
Final Judgment in United States v. Microsoft. A copy has already
been provided to you via E-mail.
Please feel free to contact me at 202-955-6300 with
any questions or concerns.
Regards,
Patrick O'Connor
Counsel to NetAction and Computer Professionals for Social
Responsibility
Comments of NetAction and Computer Professionals for Social
Responsibility On the Proposed
Final Judgment
INTRODUCTION
The Government's Competitive Impact Statement claims that
"[t]he relief contained in the Proposed Final Judgment
provides prompt, certain and effective remedies for
consumers." \1\ However, any potential relief is far
from "certain" or "effective" for the
average (non-corporate) consumer, and relief certainly will not be
"prompt" since it will arrive, if at all, only as
Microsoft rolls out later versions of its Windows Operating System.
---------------------------------------------------------------------------
\1\ Competitive Impact Statement I
---------------------------------------------------------------------------
Unfortunately, the Proposed Final Judgment does not offer
consumers any hope of relief in the market for the non-middleware
software applications on which they rely, such as word processing
and spreadsheets. Nor does the Proposed Final Judgment attempt to
offer any hope of relief to consumers using Windows 95, Windows 98,
Windows NT, or Windows 2000. By its terms, the Proposed Final
Judgment only applies to Microsoft's dealings with third pasty
developers for Windows 2000 Professional, Windows XP, and later
Windows versions. Thus, to achieve even the uncertain benefits of
the Proposed Final Judgment, consumers will have to pay a high price
for new software and, as explained below, new hardware, including
new computers. For these reasons, the Proposed Final Judgment is
suspect in terms of both the public interest and the goals of
antitrust relief described by the Government.\2\
---------------------------------------------------------------------------
\2\ See 15 U.S.C. 16(e), Competitive Impact
Statement I
---------------------------------------------------------------------------
Moreover, the Proposed Final Judgment must be rejected because
the record does not permit the Court to determine, with any
reasonable degree of comfort or certainty, exactly what relief the
Proposed Final Judgment provides. The language of the Proposed Final
Judgment, in combination with the numerous exceptions to its
prescriptions, necessarily leaves the Court and the public at a loss
to confidently predict what conduct is prohibited and what conduct
is permitted. Indeed, in a number of specific instances, the
exceptions provided for in the Proposed Final Judgment appear to
enable Microsoft to escape large portions or even all of its
obligations. As the Court is fully aware, the Government's current
lawsuit-now approaching its fourth anniversary-was triggered by
Microsoft conduct that the Government thought it had prohibited in a
previous consent decree. Only when it attempted to enforce the
decree against that conduct did the Government discover that the
language of the decree-language perhaps inserted by Microsoft and
"protecting" its rights to innovate-could be interpreted
to permit Microsoft to require that customers purchase its browser
as a component of Microsoft's Windows Operating System, the exact
conduct that the earlier decree ostensibly would have prevented.\3\
The very. same sorts of ambiguity are evident in the Proposed Final
Judgment. If it is approved, Microsoft and the Government will find
themselves back in this Court yet again, arguing over
interpretation, while non-corporate consumers are forced to endure
yet another round of anticompetitive effects.
---------------------------------------------------------------------------
\3\ See U.S. v. Microsoft, 56 F.3d 1448, 1461-62
(DCCir. 1995); see infro. II.A.
---------------------------------------------------------------------------
Because the Court has no power under the Tunney Act to modify
the terms proposed by the parties, the Court must either reject the
Proposed Finn Judgment as inconsistent with the public interest, or
order additional proceedings to clarify its terms.\4\ Such
additional proceedings should provide the parties to the Proposed
Final Judgment with an opportunity to prove that there has been an
actual "meeting of the minds" with regard to the terms
of the agreement. Only where that has occurred should the Court
consider approving the Proposed Final Judgment; otherwise, rejection
is the Court's only recourse.
---------------------------------------------------------------------------
\4\ See 15 U.S.C. 16(b) et seq.
---------------------------------------------------------------------------
DISCUSSION
NetAction is a national nonprofit organization dedicated to
promoting use of the Internet for effective grassroots citizen
action campaigns, and to educating the public, policymakers, and the
media about technology policy issues. Among other projects,
NetAction manages the Consumer Choice Campaign to focus public
attention on Microsoft's growing monopolization of the Internet.
Computer Professionals for Social Responsibility
("CPSR") is a public-interest alliance of computer
scientists and other interested individuals concerned about the
impact of computer technology on society. CPSR provides the public
and policymakers with realistic assessments of the power, promise,
and limitations of computer technology and directs public attention
to critical choices concerning the applications of computing and how
those choices affect society.
I. A Large Segment of the Consumer Market Will Be Unable to
Avail Themselves of the
[[Page 28948]]
Limited and Uncertain Benefits of the Proposed Final Judgment Unless
They Invest Substantial Sums in Hardware and Software Upgrades
A. The Proposed Final Judgment Would Do Nothing to Increase
Competition for Software Applications
Despite Microsoft's substantial dominance in the market for
software applications-such as email, word processing, and
spreadsheets-the Proposed Final Judgment limits its modest proposed
remedies co the market for "middleware." The
Government's loftiest description of its anemic proposed remedy
promises only to "restore the competitive threat that
middleware products posed prior to Microsoft's unlawful
undertakings." \5\ The "bulleted"
enumeration of those benefits offered by the Government further
clarifies that only the market for middleware is targeted for
relief.\6\
---------------------------------------------------------------------------
\5\ Competitive Impact Statement 1 .
\6\ Id.; see also Competitive Impact Statement
III, IV .
---------------------------------------------------------------------------
It is certainly true, as the Government points out, that
middleware poses-or perhaps more accurately "posed" when
the case was filed nearly four years ago-a significant threat to the
dominance of Microsoft's Windows Operating System. By exposing its
own "APIs," middleware allows software developers to
write applications that will run on multiple operating system
platforms, thus decreasing the importance of any particular
operating system.\7\ And the middleware category is particularly
important as computing evolves towards a model in which users go
outside their desktop/laptop hardware not only for their data-as
Internet has taught them to do-but also for applications by which to
interact with that data.
---------------------------------------------------------------------------
\7\ This would be true so long as several conditions
obtain: (1) those applications depend only on the middleware's APIs,
and not on the APIs of the underlying operating system, (2) the
middleware runs equally effectively on multiple operating system
platforms, and (3) all of every user's applications run on
middleware.
---------------------------------------------------------------------------
While the Government certainly was correct to make middleware an
important focus of its case, the Government certainly is not correct
to make middleware the sole focus of its proposed remedy. It is one
thing to say that the existence of a competitive market for
middleware could undercut Microsoft's monopoly of operating system
software if computing moves away from a desktop/server environment
to a Net-based environment. It is quite another to say, as the
Proposed Final Judgment does, that the public interest is satisfied
when consumers can achieve some benefits of competition only if
computing moves away from a desktop/server environment to a Net-
based environment.
It is simply not in the public interest-certainly not in the
non-corporate consumers" interest-to conclude what by now is
nearly a decade of Government antitrust litigation by providing for
some uncertain possibility of middleware competition while ignoring
file monopoly position that Microsoft has built in the applications
market over that same period.
B. Consumers Will Be Forced to Buy Software and Expensive New
Hardware To Get Any Benefits From the Proposed Final Judgment
Even assuming that the Proposed Final Judgment has the
potential, over time, to create a more competitive market in the
narrow middleware product line which is its sole aim, consumers will
have to buy a very expensive "admission ticket" to
obtain any of those benefits.
The Government acknowledges that relief should, at a minimum,
end the unlawful conduct, prevent its recurrence, and "undo
its anticompetitive consequences." \8\ Curiously,
despite this acknowledgement, the Proposed Final Judgment is purely
prospective: by its terms it would apply only to the conduct of
Microsoft and the opportunities of third party software and hardware
vendors in relation to Windows 2000 Professional, Windows XP, and
later generations of Microsoft's Windows Operating System.\9\ While
not evident on the face of the Proposed Final Judgment, this result
flows from the interplay among the Proposed Final Judgment's
operative provisions and definitions. All of Microsoft's proposed
obligations would be limited to conduct relating to a "Windows
Operating System Product" which is defined as the
"software code ... distributed ... by Microsoft ... as Windows
2000 Professional Windows XP Home, Windows XP Professional, and
successors[.]" \10\
---------------------------------------------------------------------------
\8\ Competitive Impact Statement IV.B
.
\9\ Proposed Final Judgment VI.U .
\10\ Proposed Final Judgment
III.A-I VI.U ; Competitive Impact Statement
I (bullet points) .
---------------------------------------------------------------------------
Thus, by its terms the Proposed Final Judgment would not even
attempt to "undo [the] anticompetitive consequences" of
Microsoft's conduct for consumers who continue to use earlier
versions of Windows, including Windows 95, Windows 98, and even
Windows Me. Perversely, consumers will have to fill Microsoft's
coffers by purchasing upgraded operating system software in order to
obtain relief. Under the Proposed Final Judgment, only those
consumers who upgrade to Windows 2000 Professional or a later
version of the Windows Operating System would see any of the
benefits of increased competition in the range of software choices
available to them.\11\
---------------------------------------------------------------------------
\11\ A massive migration to later Windows operating system
products carries additional problems for consumers, Indeed, another
of the hidden costs to consumers of both Microsoft's anticompetitive
conduct and the Proposed Final Judgment is the cost in network
security. The continued dominance of the Windows Operating System
and related applications means that Microsoft is a target for
hackers and all those who would compromise the privacy and security
of network systems. Elinor Mills Abreu, Hack this! Microsoft and its
critics dispute software security issues, but users make the final
call, InfoWorld (Sept. 27, 1999) . Thus, a breach
of privacy or security in a given Microsoft product will be visited
upon millions of consumers worldwide. Absent continued
anticompetitive conduct, leading to continued dominance in operating
system, browser and office applications, such costs would be
significantly decreased as the risk of breach would be more
dispersed among several operating systems. See Letter from the
Electronic Privacy Information Center to United States Senator
Patrick Leahy, Senate Judiciary Committee (Dec. 11, 2001),
.
---------------------------------------------------------------------------
And the cost of admission to the realm of greater choice is not
just the price of the new software product. As anyone who has
attempted a system upgrade on his or her own can attest, it is an
endeavor best left to professionals. The process is enormously
complex, takes hours of time, requires the user to make numerous
decisions, often without adequate information, and is prone to
crashing the computer, requiring professional help for recovery.\12\
Even the IS departments in corporate America are wary of upgrading
their entire user community before they have thoroughly tested both
the new operating system and the process of upgrading to it. And
outside corporate America-that is, for the average (non-corporate)
consumer-the task is so difficult that most consumers avoid it,
continuing to use the operating system that came with their
computers, and changing operating systems only if and when they buy
a new computer.
---------------------------------------------------------------------------
\12\ 12 See, e.g. Mark Hammond, Hidden upgrade woes found
in Windows 98, eWEEK (June 25, 1998) http://zdnet.com.com/
2102-11-510242.html, A. Kandra, Consumer Watch: Avoiding
the Upgrade From Hell, PC World (August 2001) .
---------------------------------------------------------------------------
To compound the problem and increase the price of admission even
further, each new generation of operating system is significantly
more resource-intensive than the last, as clearly indicated by the
"minimum system requirements" notice Microsoft includes
on its packaging and on its web site. The "minimum system
requirements" for random access memory (RAM) have doubled with
each succeeding consumer version of Windows. Windows Me required 32
megabytes (MB) of RAM; Windows 2000 Professional required a minimum
of 64 MB; Windows XP recommends at least 128 MB.\13\ The
"minimum" CPU and hard disk requirements have
accelerated even more rapidly.\14\ And as every computer user knows,
the "minimum" hardware requirements rarely provide
adequate performance under the new operating system. So consumers
are forced to buy enhancements to their existing computers, such as
more memory and larger hard drives, to "catch up" with
the demands of the new operating system. Even the consumer who
upgrades her computer faces significant performance limitations
stemming from the processor and bus architecture of existing
systems. This history of Microsoft operating system evolution is
that a
[[Page 28949]]
consumer will, as a practical matter, need to buy a new computer to
make effective use of a new operating system.
---------------------------------------------------------------------------
\13\ Compare (Windows Me);
(Windows 2000
Professional); and (WindowsXP).
\14\ 14 Id.
---------------------------------------------------------------------------
The reality, then, is that even if the Proposed Final Judgment
would allow the development of a more competitive market for
middleware, consumers would have to purchase new software and new
computers (or spend almost as much to upgrade their existing
systems) to obtain any benefits. As a result, a large percentage of
consumers would simply be unable to afford the price of admission in
their homes, or in their schools, or in their libraries. No proposed
antitrust remedy can be in the public interest when it excludes the
most vulnerable members of the public from any potential benefits.
II. Important Provisions of the Proposed Final Judgment Will Not
Accomplish Their Intended Purposes
The Proposed Final Judgment is vague or subject to evasion by
Microsoft to such an extent that it is not in the public interest as
it currently stands. In Tunney Act proceedings--particularly
where the litigation was required by a failure of precision in a
prior settlement decree--a court should insist on precision in
the proposed decree, so that the task of enforcing the decree does
not become unmanageable.\15\ As discussed below, however, the
Proposed Final Judgment is fiddled with provisions that make its
interpretation and enforceability highly problematic.
---------------------------------------------------------------------------
\15\ 15 U.S. v. Microsoft, 56 F.3d 1448, 1461-62
(DCCir. 1995).
---------------------------------------------------------------------------
A. Microsoft I Illustrates the Importance of Eliminating
Ambiguities and Loopholes from the Proposed Final Judgment
In assessing the Proposed Final Judgment, there are important
lessons to be learned from past dealings between the Government and
Microsoft, in particular the unfortunate history of the first
Microsoft consent decree. That decree provided, among other things,
that Microsoft can not require OEMs, as a condition of a license to
an operating system, to license another Microsoft product.\16\ Soon
after that decree was approved, however, Microsoft integrated its
web browser code into the Windows Operating System, causing the
Government to seek an injunction. The decree, however, contained an
exception that doomed its very object: it could not be
"construed to prohibit Microsoft from developing integrated
products." \17\ Because the appellate court found that
the Government was unlikely to prevail on this question of
integration, Microsoft was free to integrate its web browser into
the operating system.\18\
---------------------------------------------------------------------------
\16\ 16 U.S. v. Microsoft, 147 F.3d 935,939 (DCCir. 1998)
("Microsoft I").
\17\ 17 Id. at 939.
\18\ 18 Id. at 955.
---------------------------------------------------------------------------
It was only last year, after extensive litigation, that
Microsoft's integration of the browser code into the Windows
Operating System was finally found to be illegal as an improper
effort to prevent entry by rival browsers.\19\ By that time,
however, Netscape Navigator, the browser at which Microsoft had
directed many of its tactics, was no longer a threat to Microsoft's
monopoly. In a very real sense, the presence of a vague exception
for "integration" in the first Microsoft decree, and
Microsoft's ability to exploit that exception, made. possible the
monopolistic behavior and anticompetitive distortion that was at
issue in Microsoft II.\20\ It is crucial that that scenario not be
repeated here, and that the Proposed Final Judgment be cleansed of
similar opportunities for Microsoft to "design around"
the decree's restrictions. Regrettably, there are many aspects of
the Proposed Final Judgment that require such cleansing.
---------------------------------------------------------------------------
\19\ U.S. v. Microsoft, 253 F.3d 34 (DCCir. 2001)
("Microsoft II").
\20\ 20 Id.
---------------------------------------------------------------------------
B. The Proposed Final Judgment Will Allow Microsoft To
"Design Around" Its Obligations Despite the fact that
ambiguous language is exactly the reason this case was initiated,
the Proposed Final Judgment suffers chronically from the same
defect. Loose language and a plethora of exceptions would permit
Microsoft to "design around" the restrictions that are
currently being proposed by the Government:
First, the Proposed Final Judgment would allow Microsoft alone
to determine the definition of its Windows Operating System.
Combined with loose language in the definition of Microsoft
Middleware, this provision raises the possibility that Microsoft
would be able to escape its API disclosure obligations by
incorporating middleware products into future versions of its
operating system. If such is the case, contrary to the intent of the
Proposed Final Judgment, Microsoft could thereby prevent competition
in middleware;
Second, under the Proposed Final Judgment, Microsoft alone would
be able to determine when its disclosure obligations arise, as it
would determine what constitutes a "major version"
release under the definition of Microsoft Middleware. By releasing
updates, as opposed to "major versions," Microsoft could
continue to advance the development of Microsoft Middleware, while
precluding competition from other middleware producers;
Third, when a major version is released by Microsoft, the terms
of the Proposed Final Judgment regarding the release of information
on APIs would permit Microsoft a perpetual advantage in the relevant
markets: by the time Microsoft was obligated to release information
on APIs, it would already have developed its next major version for
release. Thus, under the terms of the Proposed Final Judgment,
competitors will always remain at least one step behind Microsoft;
Fourth, Microsoft would unilaterally control whether the user
can designate a competitive middleware product by determining the
technical compatibility of such products with the Windows Operating
System. By continually establishing new (and potentially irrelevant)
technical requirements, Microsoft can ensure that consumers are
forced to use Microsoft products for an increasing number of
applications;
Fifth, and finally, Microsoft would be able to escape all of its
disclosure obligations under the Proposed Final Judgment where it
would be able to determine that a particular product threatens the
"security" of any number of integrated systems. In the
current environment where applications are increasingly tied to both
the operating system and other programs, such claims are easy to
make and difficult to disprove. By invoking this exception,
Microsoft would be free to preclude competition altogether;
Each of these shortcomings is discussed in further detail below.
Given the ambiguities and exceptions, consumers have no reason to
expect that the Proposed Final Judgment would effectively prevent
the Microsoft monopoly from expanding beyond the operating system
and browser markets into every facet of digital life. For these
reasons, the Proposed Final Judgment should be rejected or
additional proceedings ordered by this Court.
Under Section VI.U of the Proposed Final Judgment, "It]he
software code that comprises a Windows Operating System Product
shall be determined by Microsoft in its sole discretion." This
overarching provision would permit Microsoft to unilaterally alter
one of the bedrock terms of the Proposed Final Judgment and, thus,
to alter the terms of the agreement. As in 1995, the actual
implications of this provision of the decree are unclear (except,
perhaps, to Microsoft). Nevertheless, it is not difficult to imagine
instances in which Microsoft would attempt to, for example,
integrate potential Microsoft Middleware Products into its Windows
Operating System in order to escape its disclosure obligations (a
possibility discussed further below).\21\ The provision would also
allow Microsoft to implement code designed to make competing
middleware products incompatible with the Windows Operating System
and thus prevent consumers from using that product as is ostensibly
permitted under Section III.H. Indeed, the overarching problem with
this provision for both competitors and consumers is its ambiguity
and the uncertainty that is associated with it. At a minimum,
definitional control of the Proposed Final Judgment should reside
first with the agreement itself and, next, with the Court; it
certainly should not reside with Microsoft. There is hardly any
point in a decree that gives the defendant the right to determine
its meaning.
---------------------------------------------------------------------------
\21\ "A monopoly in operating system software is a
platform for unprecedented control over the flow of information to
consumers. Control over this software can be leveraged to near total
control over the computer screen, Dominating the screen means
controlling ... what [consumers] see and when they see it."
The Project to Promote Competition & Innovation in the Digital
Age. At the Crossroads of Choice, .
---------------------------------------------------------------------------
Similarly, under Section III.D of the Proposed Final Judgment,
Microsoft must disclose to competitors any and all APIs used by
Microsoft Middleware to function effectively on the Windows
Operating System. However, because the definition of Microsoft
Middleware appears to be limited to "software code that
Microsoft distributes separately from a Windows Operating System
[[Page 28950]]
Product," \22\ the possibility arises that Microsoft
could avoid the required disclosure of its APIs simply by
integrating potential Microsoft Middleware into the operating
system.\23\ Integration would have the same effect upon potential
competitors as nondisclosure; the applications barrier to entry
would remain impenetrable and innovation by anyone other than
Microsoft would be prevented. Moreover, further integration of
middleware products would permit Microsoft to extend its monopoly
power into adjacent markets." \24\
---------------------------------------------------------------------------
\22\ Proposed Final Judgment VI.J .
\23\ Comments of Robert Litan, Roger Knoll and William
Nordhaus on the Revised Proposed Final Judgment (filed Jan. 17,
2002); see also Jonathan Krim, Wording of Microsoft Deal Too Loose,
Analyses Say. The Washington Post, E1, E10 (Jan. 18, 2002).
\24\ The list of markets into which Microsoft is
attempting to expand its dominance is growing. Consumer Federation
of America and Consumers Union recently published a report, which
describes Microsoft's current bundling strategy, which includes
integrating email, instant messaging, calendars and contact lists,
audio and video media players, digital photography, digital rights
management, and identity verification. Dr. Mark N. Cooper. Consumer
Federation of America. and Christopher Murray, Consumers Union,
Windows XP/.NET: Microsoft's Expanding Monopoly, How It Can Harm
Consumers and What the Courts Must Do to Preserve Competition (Sept.
26, 2001) .
---------------------------------------------------------------------------
Moreover, assuming that Microsoft determines to release future
Microsoft Middleware, Section VI.J would egregiously permit it to
determine when or even if its API disclosure obligations are
triggered. Specifically, this provision would allow Microsoft to
unilaterally determine which releases are "updates" to
existing Microsoft Middleware and which are "new major
version[s]" of such.\25\ Microsoft would avoid disclosure
(triggered by release of a new major version) simply by denominating
the release anything other than "a whole number or ... a
number with just a single digit to the right of the decimal
point." \26\ The implications of this type of control on
the part of Microsoft make the API disclosure provisions of the
Proposed Final Judgment effectively meaningless.
---------------------------------------------------------------------------
\25\ Proposed Final Judgment IIT J .
\26\ Id.
---------------------------------------------------------------------------
Even where disclosure of APIs to competitors was to occur under
Section III.D, it would not be required until "the last major
beta test release" of the relevant Microsoft Middleware.\27\
Microsoft would thus have two incentives with regard to the release
of the updated version: (1) to push the date of release of its last
beta test as close as possible to the release of a commercial
product, and (2) to use the interval until the last beta test to
plan a subsequent and improved version of the same software to be
released once competition with the updated version is threatened.
After release, potential competitors would hurriedly attempt to
implement the APIs to enable their products to interoperate with the
Windows Operating System. Meanwhile, Microsoft's product would have
been commercially re]eased and gaining market share. Thus, before
competitors would have been able to convince consumers of the value
of their products, Microsoft would have developed a subsequent and
improved version of the product, effectively foreclosing
competition. The timing of competitors" access to APIs is
crucial for compettion to have any chance of developing. But the
timing provided for in the Proposed Final Judgment does not
accomplish its purpose.
---------------------------------------------------------------------------
\27\ Proposed Final Judgment III,D .
---------------------------------------------------------------------------
Section III.H ostensibly "ensures that OEMs will be able
to choose to offer and promote, and consumers will be able to choose
to use, Non-Microsoft Middleware Products[.]" \28\
However, the same section would provide Microsoft with yet another
exception that effectively swallows the obligation: Microsoft would
be permitted explicitly to override a consumer's default choice of
middleware product with its own Microsoft Middleware Product where
the non-Microsoft product "fails to implement a reasonable
technical requirement ... that is necessary for technical reasons to
supply the end user with functionality consistent with a Windows
Operating System Product[.]" \29\ Even a superior
middleware product could be preempted where it did not conform to
Windows Operating System Product code, over which Microsoft would
have exclusive control (described above). It is not difficult to
imagine Microsoft creating a series of "technical
requirement" obstacles that would need to be navigated by
competitors and consumers in order to permit them choice in
middleware products. Granting Microsoft such control over this
important provision would permit Microsoft to avoid its impact
entirely, continuing the exact anticompetitive conduct this
provision was ostensibly designed to prevent.
---------------------------------------------------------------------------
\28\ Competitive Impact Statement IV.B.8
.
\29\ Proposed Final Judgment III.H .
---------------------------------------------------------------------------
Finally, the Proposed Final Judgment would grant Microsoft an
overarching exception to all of its disclosure obligations where, in
Microsoft's determination, "the disclosure ... would
compromise the security of a particular installation or group of
installations of anti-piracy, anti-virus, software licensing,
digital rights management, encryption or authentication systems,
including without limitation, keys, authorization tokens or
enforcement criteria[.]" \30\ In an environment where
each and every piece of software is increasingly integrated with
both the underlying operating system and companion programs, each
piece of software could be interpreted by the platform provider as a
vehicle for potential interference with vital systems. This is a
common argument of monopolists, for it is designed to delay or
prevent competition in network services. Given this amount of
discretion, Microsoft would be able to effectively prevent
competitors from introducing products based upon Microsoft's
"determination" that such products would be
"dangerous" to the platform or other components.
---------------------------------------------------------------------------
\30\ Proposed Final Judgment III.J.I
.
---------------------------------------------------------------------------
The litany of ambiguities described in the preceding paragraphs
are not a complete listing of the faults of the Proposed Final
Judgment; rather, they are indicative of a systematic failure to
consider the machinations of Microsoft and the extent to which even
the smallest exception will undoubtedly be employed to preclude
competition. Ultimately, consumers will suffer the most from these
anticompetitive tactics because, with few alternative resources,
they will be forced to buy what the incumbent has to offer, without
the benefits of innovation and competition. For these reasons, the
Court should reject the Proposed Final Judgment or order additional
proceedings as described below.
III. The Court Should Either Reject the Decree As It Currently
Stands or Order Additional Proceedings to Eliminate Evident
Ambiguities
Unfortunately, under the Tunney Act, the Court has no power to
modify the terms agreed to by the parties to the Proposed Final
Judgment.\31\ This leaves the Court with the difficult decision of
whether to accept or reject the Proposed Final Judgment in its
entirety. NetAction and CPSR respectfully recommend that the Court
not shy away from rejection of the Proposed Final Judgment where it
is apparent that ambiguous provisions, described above, will not
ameliorate the extant competitive situation for consumers. Such
approval would not be in the public interest as required by
statute.\32\ As an alternative to outright rejection, the Court
should consider instituting additional proceedings to assure itself
of a "meeting of the minds" among all parties to the
agreement.
---------------------------------------------------------------------------
\31\ 15 U.S.C. 16(b) et seq.
\32\ 15 U.S.C. 16(e).
---------------------------------------------------------------------------
Microsoft, the Government, and the state parties to the Proposed
Final Judgment will undoubtedly argue that the expenditures in time
and resources necessary to come to a workable agreement justify
approval of the Proposed Final Judgment at this time. On the
contrary, however, the time and energy spent upon formulating a
solution to a competitive problem that has plagued competitors and
consumers for the better part of a decade argues for, and not
against, an agreement that is stable, workable and not subject to
multiple interpretations. The Court should nor rush to approve an
agreement that will return to its docket in the near future as a
result of ambiguities.
Instead, the Court must be careful to define the terms of the
Proposed Final Judgment such that it neither inadvertently accepts
an agreement that will not solve the problem nor rejects an
agreement that would successfully ameliorate the problem and benefit
consumers in the marketplace. Such terms have not yet been defined
with respect to the Proposed Final Judgment. Fortunately, under the
Tunney Act, the Court has broad powers to order further proceedings
to ensure that the public interest is served.\33\ In aid of its
enforcement authority, then, the Court should order additional
proceedings in this
[[Page 28951]]
case to "pin down" the meaning of the various provisions
of the Proposed Final Judgment that appear to be subject to dispute.
---------------------------------------------------------------------------
\33\ 33 Id.
---------------------------------------------------------------------------
In order to assure itself that Microsoft, the Government, and
the state parties have reached an actual "meeting of the
minds," the Court should permit participants to the Tunney Act
process to submit written questions to each of the three parties to
the Proposed Final Judgment. Such questions should only cover what
is or what is not permissible under the provisions of the Proposed
Final Judgment, Each of the three parties should answer separately,
with no consultation among them, as to whether the action in
question is permissible. In order to prevent any
"backsliding" in interpretation, each party should be
required to submit an affidavit agreeing to be bound by its answers
in any additional proceedings. If the three separate answers are in
agreement as to the questions posed, the Court should recognize that
a "meeting of the minds" has occurred and approve the
Proposed Final Judgment forthwith. If the answers are not in
agreement, the Court should reject the Proposed Final Judgment until
such a "meeting of the minds" is reached and
conclusively proven.
CONCLUSION
The Proposed Final Judgment, as it currently stands, does not
offer consumers any hope of relief in the market for non-middleware
software applications. Nor does it attempt to offer any relief to
consumers using Windows 95, Windows 98, Windows NT, or Windows 2000.
To achieve even the uncertain benefits claimed by the Proposed Final
Judgment, consumers will have to buy new software and hardware,
including new computers.
Moreover, the Proposed Final Judgment is disturbingly
reminiscent of Microsoft I in its ambiguities. Indeed, it was an
ambiguity in Microsoft I that led to this proceeding and forced
consumers to endure five long years of legal wrangling over an issue
that the Government thought had been decided between the parties. As
it stands, the Proposed Final Judgment does not permit the Court to
determine, with any reasonable degree of comfort or certainty, what
relief in fact would be provided by the Proposed Final Judgment.
Indeed, in a number of specific instances, the exceptions provided
for in the Proposed Finn Judgment appear to permit Microsoft to
escape large portions or even the entirety of its obligations.
On the present record, the Proposed Final Judgment cannot be
found to be in the public interest. The Court should either reject
the Proposed Final Judgment outright, or order additional
proceedings, as described herein, to definitively clarify its terms.
Dated: January 28, 2002
Respectfully submitted,
Audrie Krause
Executive Director
NetAction
601 Van Ness Avenue, #631
San Francisco, CA 94102
(415) 775-8674
(415) 673-3813 fax
[email protected]
Coralee Whitcomb
President
Computer Professionals for Social Responsibility
P.O. Box 717
Palo Alto, CA 94302
(650) 322-3778
(650) 322-4748
[email protected]
/s/ Patrick O'Connor
Jeffrey Blumenfeld
Michael D. McNeely
Patrick O'Connor
Counsel for NetAction and Computer Professionals for Social
Responsibility
Blumenfeld & Cohen--Technology Law Group
http://www.technologylaw.com
1625 Massachusetts Avenue, NW
Suite 300
Washington, DC 20036
(202) 955-6300
(202) 955-6460 fax
[email protected]
cwhitcomb@ cpsr.orgmike@ technologylaw.
com
[email protected]
MTC-00030605
DATE & TIME: TOTAL NUMBER OF PAGES:
Monday, January 28, 2002 6
TO FAX NUMBER: TELEPHONE NUMBER:
Renata B. Hesse, Esq.--202-307-1454
U.S. Department of Justice
FROM: RETURN FAX NUMBER: TELEPHONE NUMBER:
Gregg H. Vicinanza 202-383-5414 202-383-5235
MESSAGE
IF YOU DID NOT RECEIVE ALL PAGES, PLEASE CALL OUR FAX DEPARTMENT AT
202/383-5284.
FILE NO.: 600,000-003 RETURN ORIGINAL TO: Angela Holland
USER NO.: 12595 EXTENSION: 5396
RESPONSIBLE ATTY NAME: Gregg H. Vicinanza LOCATION:
SPECIAL INSTRUCTIONS:
This document is intended for the exclusive use of the
addressee. It may contain privileged, confidential, or nondislosable
information. If you are not the addressee, or someone responsible
for delivering this document to the addressee, you may not read,
copy, or distribute it. If you have received this document by
mistake, please call us promptly and securely dispose of it. Thank
you.
OUR FILE NUMBER
600,000-3
WRITER'S DIRECT DIAL
202-383-5132
WAITER'S E-MAIL ADDRESS
[email protected]
January 28, 2002
VIA FACSIMILE 202-307-1454
Renata B. Hesse, Esq.
Antitrust Division
U.S. Department of Justice
601 D Street NW, Suite 1200
Washington, DC 20530-0001
Re: United States v. Microsoft Corp. & State of New York v.
Microsoft Corp., United States District Court for the District o[
Columbia, Case Nos. 98-1232, 98-1233 Dear Ms. Hesse: On
behalf of Sony Corporation ("Sony"), a Japan
corporation, we offer the following comments pursuant to 15 U.S.C.
�16(d) with regard to the Revised Proposed Final Judgment (the
"Proposed Judgment") in the above captioned matter.
Introduction and Summary
As one of the world's leading technology and entertainment
companies, Sony develops and manufactures a wide variety of audio,
video, communications and information technology products. Sony is
also an original equipment manufacturer ("OEM") of
personal computers and a direct licensee of Microsoft Corporation
("Microsoft").
Microsoft maintains that certain provisions of the Proposed
Judgment require it to impose "standard" licensing terms
on Sony and other OEMs that could possibly erode protections for
their intellectual property. Sony and other OEMs have made, and
continue to make, significant investments in such intellectual
property. These companies should be free to negotiate more favorable
licensing provisions that restrict Microsoft's ability to leverage
its market power to gain access to this intellectual property.
Accordingly, Sony requests a clarification or modification of the
Proposed Judgment to ensure that Sony and other similarly situated
OEMs can negotiate appropriate protections for their intellectual
property beyond those available in "standard" licensing
terms and conditions.
Background
Like other OEMs, Sony has entered into a series of one-year Desk
Top Operating System (DTOS) license agreements with Microsoft that
contain terms relating to operating system products, royalties and
payments. These license agreements incorporate other terms and
conditions from longer term "Business Terms Documents"
negotiated between Microsoft and its OEMs. Last year, Sony and
Microsoft entered into the current Business Terms Document, which is
effective for several years.
The current Business Terms Document contains several provisions
relating to intellectual property. These provisions include
"non-assertion covenants" in which OEMs, under certain
conditions, agree not to assert patent claims against Microsoft and
Microsoft licensees. Sony and its various affiliates, however, have
a significant history and patent portfolio in various areas,
including audio, video, software applications and other
technologies. To protect its rights to assert these patents, Sony
negotiated with Microsoft important limitations on the scope of
these non-assertion covenants. Sony believes these limitations are
necessary to protect its investments in intellectual property.
Section III.B of (he Proposed Judgment Under the terms of the
Proposed Judgment, Sony is a "Covered OEM" because it is
one of the 20 OEMs with the highest worldwide volume of licenses of
Windows Operating System Products. (Revised Proposed Final Judgment,
� VI.D.) The Proposed Judgment would require Microsoft to offer
Sony and other Covered OEMs licenses on "uniform terms and
conditions." Section III.B of the Proposed Judgment provides:
B. Microsoft's provision of Windows Operating System Products to
Covered OEMs
[[Page 28952]]
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.
(Revised Proposed Final Judgment � III.B.)
The Department of Justice has explained that Section III.B was
included in the Proposed Judgment to prevent Microsoft from
retaliating against OEMs that market or promote products from
Microsoft's competitors. In its "Competitive Impact
Statement," the Department of Justice stated:
In order to ensure freedom for the 20 Covered OEMs from the
threat of Microsoft retaliation or coercion, Section III.B requires
that Microsoft's Windows Operating System Product licenses with such
OEMs contain uniform terms and conditions, including uniform
royalties. These royalties must be established by Microsoft in
advance on a schedule that is available to Covered OEMs and the
Plaintiffs.
(Competitive Impact Statement at 27-28.)
The Department of Justice also has argued that Section III.B
will eliminate "any opportunity for Microsoft to set a
particular OEM's royalty or license terms as a way of inducing that
OEM to decline to promote non-Microsoft software or retaliating
against that OEM for its choices to promote non-Microsoft
software." (Id. at 28.) The Department concluded that Section
III.B will "ensure that OEMs can make their own independent
choices." (Id.) Microsoft's Proposed Uniform Terms and
Conditions
Microsoft has informed Sony that it intends to enter into a new
DTOS license agreement with Sony embodying new "uniform terms
and conditions" mandated by Section III.B. These
"uniform terms and conditions" apparently represent an
effort to create a standard set of terms and conditions from a
variety of existing Business Terms Documents with various OEMs.
Microsoft's efforts to comply with Section III.B, however, may have
produced new "uniform terms and conditions" that weaken
certain pro-competitive limitations on the non-assertion covenants.
Microsoft has been adjuged to have illegally maintained its
operating system monopoly in violation of the Sherman Act. United
States v. Microsoft Corp., 253 F.3d 34, 54 (DC Cir. 2001), cert.
denied, 122 S.Ct. 350 (2001). This raises the possibility that
Microsoft will use its monopoly power to force its OEM licensees to
give up intellectual property rights, thus affording Microsoft the
opportunity to expand its power. In the current Business Terms
Document, Sony has negotiated narrow non-assertion covenants to
reduce this possibility,
Microsoft maintains that Section III.B of the Proposed Judgment
precludes it from accepting the non-assertion covenants in the
Business Terms Document freely negotiated and signed last year with
Sony. Microsoft insists that, in order to comply with Section III.B,
Sony must agree to new "uniform" non-assertion covenants
that may weaken previously negotiated protections for Sony's
intellectual property. If Sony is forced to agree to these changes,
1:he new license agreement would diminish Sony's ability to assert
its patents, particularly in markets outside the operating system
market, and thereby may enable Microsoft to expand its power into
new areas. Proposed Clarification or Modification.
Requiring Sony to accept new "uniform" provisions
that may weaken Sony's existing intellectual property protections
and allow Microsoft to leverage its power into other markets is
contrary to the underlying principles of the Proposed Judgment.
Forcing all OEMs to accept identical non-assertion covenants also
fails to acknowledge or accommodate the important differences among
companies regarding intellectual property portfolios and business
activities in other markets.
Sony or any other Covered OEM desiring additional intellectual
property protection to enable it to compete with Microsoft or other
licensees should be free to negotiate for such provisions outside
any framework imposed by the Proposed Judgment. Accordingly, Sony
respectfully requests that the Proposed Judgment be clarified or
modified to provide that OEMs desiring protection for their
particular intellectual property interests can negotiate for more
favorable non-assertion covenants than those contained in the
"uniform terms and conditions." As long as there is a
baseline set of "uniform terms and conditions" available
to all covered OEMs that would apply if the OEM is unsuccessful in
its efforts to obtain more favorable terms, the OEM is protected
from coercion or retaliation. If an OEM obtains different terms and
conditions for non-assertion covenants, these new covenants could be
made available to all Covered OEMs on a non-discriminatory basis to
prevent Microsoft from withholding these provisions to coerce or
retaliate against other Covered OEMs. The OEMs should be free to
accept or decline the non-assertion covenants depending on their own
interests and intellectual property portfolios.
The courts have recognized the threat to competition posed by a
monopolist that uses its power in one market to secure domination of
other markets. See Spectrum Sports v. McQuillan, 506 U.S. 447
(1993); Alaska Airlines v. United Airlines, 948 F.2d 536 (9th Cir.
1991), cert. denied, 503 U.S. 977 (1992). An antitrust settlement
should not enable a monopolist to erode the intellectual property
barriers that would otherwise limit the monopolist's penetration of
other markets. By including the clarifications or modifications
described above, the Proposed Agreement would avoid this unfortunate
consequence.
Very truly yours,
Debra A. Valentine
of O'MELVENY & MYERS LLP
MTC-00030606
Date: 1/28/02
To: U.S. Department of Justice
Fax:[1] 202-307-1454
From: The Progress & Freedom Foundation
Ms. Brooke Emmerick
Phone: 202-289-8928
Fax: 202-289-6079
Pages:32
Subject: Microsoft Settlement, Tunney Act Comments
Note: this document has also been submitted via email.
BEFORE THE UNITED STATES DEPARTMENT OF JUSTICE UNITED STATES OF
AMERICA, Plaintiff, v. Civil Action No, 98-1232 (CKK)
MICROSOFT CORPORATION, Defendant.
STATE OF NEW YORK ex rel.
Attorney General Eliot Spitzer, et al.,
Plaintiffs, Civil Action No. 98-1233 (CKK)
v.
MICROSOFT CORPORATION Defendant.
Comments of The Progress & Freedom Foundation on the Revised
Proposed Final Judgment and the Competitive Impact Statement
Jeffery A. Eisenach, Ph.D.
President
Thomas M. Lenard, Ph.D.
Vice President for Research
THE PROGRESS & FREEDOM FOUNDATION
1301 K. St., NW
Washington, DC 20005
(202) 289-8928
(202) 289-6079 Facsimile
Table of Contents
I. Introduction 1
A. Authors 1
B. Summary of Contents 2
II. Background: The Facts, the Law and the Remedy 5
A. The Illegal Conduct and its Effects 5
B. The Appropriate Criteria for a Remedial Action 7
III. The CIS and the PFJ: Flawed Analysis of a Flawed Remedy 9
A. Major Provisions of the PFJ 9
B. The Competitive Impact Statement 10
C. The PFJ Will Not Have Its Claimed Effect, Nor Any Pro-
Competitive Effect 18
IV. The Remedies Alternatives 23
A. Alternative Structural Remedies 24
B. The Litigating States Proposal 29
V. Conclusion 31
I. Introduction
[[Page 28953]]
These comments on the Proposed Final Judgment\1\
("PFJ") and the Competitive Impact Statement\2\
("CIS") in the Microsoft ease are submitted to provide
the Department of Justice ("DOJ") and the Court with
information and analysis based on nearly five years of research by
the authors on the legal, policy and economic implications of this
landmark proceeding. Based on that research, it is our assessment
that (a) the PFJ fails to address meaningfully the violations of law
found by this court and upheld by the U.S. Court of Appeals and its
entry by the court manifestly is not in the public interest; (b) the
CIS fails to meet the standard of analysis demanded by the law mad
occasioned by the magnitude of the issues involved; and (e) the
public interest will best be served through imposition of a
"hybrid" structural remedy or, if the court chooses not
to impose a structural remedy, a conduct remedy modeled after the
proposals of the remaining litigating states.
---------------------------------------------------------------------------
\1\ United States v. Microsoft Corp., Stipulation and
Revised Proposed Final Judgement (November 6, 2001) (hereafter
"PFJ").
\2\ United States v. Microsoft Corp., Competitive Impact
Statement (November 15, 2001) (hereafter "CIS").
---------------------------------------------------------------------------
A. The Authors
Dr. Eisenach is President and Senior Fellow at The Progress
& Freedom Foundation,\3\ a non-profit research and educational
institution dedicated to analyzing the impact of the digital
revolution and its implications for public policy, and an Adjunct
Professor at George Mason University Law School. As a professional
economist, he has been actively engaged in the analysis of
competition and regulatory policy issues for more than 20 years, and
has served in senior positions at the Office of Management and
Budget mad the U.S. Federal Trade Commission and as a consultant to
the U.S. Sentencing Commission on criminal sentencing guidelines for
corporations. He has also served on the faculties of Harvard
University's Kennedy School of Government, the University of
Virginia and Virginia Polytechnic institute and State University.
---------------------------------------------------------------------------
\3\ These comments reflect the views of the authors and do
not represent the views of The Progress & Freedom Foundation,
its officers or board of directors.
---------------------------------------------------------------------------
Dr. Lenard is Vice President and Senior Fellow at The Progress
& Freedom Foundation and a professional economist with 30 years
of experience in academia, government, private consulting and the
non-profit sector. He has worked on a wide range of regulatory and
antitrust issues covering a broad span of industries, and has
consulted on antitrust cases for both private firms and the Federal
Trade Commission. In government, he has held senior economic
positions at the Council on Wage and Price Stability, the Office of
Management and Budget and the Federal Trade Commission. A principal
focus of his research has been the benefits and costs of regulatory
interventions into the economy and the analytical underpinnings
needed to make informed decisions about government interventions.
Both Drs. Eisenach and Lenard have done extensive work on the
economics of high-tech markets in general, and the Microsoft case in
particular. They are co-authors of the annual Digital Economy Fact
Book.\4\ co-editors of Competition, Innovation and the Microsoft
Monopoly: Antitrust in the Digital Marketplace and authors of
numerous other papers on these and related topics.\5\
---------------------------------------------------------------------------
\4\ See Jeffrey A. Eisenach, Thomas M. Lenard and Stephen
McGonegal, The Digital Economy Fact Book 2001 (Washington: The
Progress & Freedom Foundation, 2001).
\5\ See Jeffrey A. Eisenach and Thomas M. Lenard, ads.,
Competition, Innovation and the Microsoft Monopoly. Antitrust in the
Digital Marketplace, Kluwer Academic Publishers, 1999; Thomas M.
Lenard, Creating Competition in the Market for Operating Systems: A
Structural Remedy for Microsoft. (Washington: "rile Progress
& Freedom Foundation, 2000), http://www.pff.org/remedies/htm;
and Thomas M. Lenard, "Creating Competition in the Market for
Operating Systems: Alternative Structural Remedies in the Microsoft
Case," George Mason Law Review, Vol., 9, Spring
2001,803-841.
---------------------------------------------------------------------------
B. Summary of Comments
The PFJ is intended to settle the government's antitrust case
against Microsoft and was agreed to by the United States, 9 of the
18 states that were also party to suit, and by Microsoft. The nine
remaining states and the District of Columbia (the "Litigating
States") have not agreed to the PFJ and are pursuing more
stringent relief through a remedy hearing at the District Court.\6\
The DOJ is required by the Antitrust Procedures and Penalty Act
("APPA")\7\ to prepare a CIS, which is intended to
analyze the competitive implications of the PFJ and any alternatives
to it.
---------------------------------------------------------------------------
\6\ United States v. Microsoft Corp., Plaintiff Litigating
States" Remedial Proposals, (December 7, 2001) (hereafter
"LS Proposal").
\7\ 15 USCS 16 (b-h)
---------------------------------------------------------------------------
The PFJ does not serve the public interest mid will not achieve
the government's objective that it "halt continuance and
prevent recurrence of the violations of the Sherman Act by Microsoft
that were upheld by the Court of Appeals and restore competitive
conditions to the market."\8\ Indeed, much of the behavior
found by the Court of Appeals to be anticompetitive would be
permitted under the PFJ. Further, even if the PFJ did preclude such
behavior it would fail to restore competitive conditions because it
fails to affect the behavior of participants in the marketplace.
---------------------------------------------------------------------------
\8\ CIS at 2.
---------------------------------------------------------------------------
The CIS does not satisfy the government's obligation to provide
the District Court with an analytical basis for determining whether
the PFJ is hi the public interest. The APPA clearly requires, and
good public policy demands, an "evaluation" of the
proposed remedy and major alternatives to it. The C1S does not
present such an evaluation. It does not explain why the PFJ will
achieve the intended results, but merely asserts that it will do so.
It also does not explain why the DOJ concluded that the PFJ will
better serve the public interest than major alternatives, but merely
states that "[t]he United States ultimately concluded that the
requirements and prohibitions set forth in the Proposed Final
Judgment provided the most effective and certain relief in the most
timely manner."\9\ The DOJ has produced no real analysis of
the relative merits of alternative forms of relief to guide the
District Court in deciding whether to approve the PFJ. Indeed, the
CIS fails by a wide margin to meet the standards required of
analyses of regulatory proposals routinely promulgated by government
agencies.
---------------------------------------------------------------------------
\9\ CIS at 63.
---------------------------------------------------------------------------
Accordingly, the District Court should not accept the PFJ, but
should, instead, expand its hearing on the Litigating States
Proposal ("LS Proposal") to include the full range of
major alternatives. This would permit the District Court to gather
the information needed to make an informed judgment concerning which
of the remedy proposals will best serve the public interest.
The alternatives that should be considered include:
. The PFJ.
. The proposals of the Litigating States.
. Major structural remedies, including the vertical-divestiture
remedy initially adopted by the District Court and the
"hybrid" remedy proposed by Dr. Lenard and others.
Among these remedies, the "hybrid" structural
approach would best serve the public interest and maximize net
economic benefits to consumers.
In the sections that follow, we provide, first, a brief
restatement of the facts and legal background in this case,
including a brief discussion of what we believe to be the
appropriate standards by which remedial action should he judged.
Next we discuss the shortcomings in the PFJ and the CIS, explaining
why the PFJ will not achieve the government's objectives or serve
the public interest and demonstrating that the CIS falls far short
of the analytical standard that should be demanded by the court.
Finally, we turn to an evaluation of the remedial alternatives mad
explain why we believe that (a) a "hybrid" structural
remedy would best serve consumers and competition and (b) that if
the court chooses not to impose a structural remedy, the LS Proposal
is superior to the PFJ.
II. Background: The Facts, the Law and the Remedy
The U.S District Court\10\ found, and the U.S. Court of
Appeals\11\ affirmed, a pattern of Sherman Act violations by
Microsoft that had the effect of foreclosing competition in the
market for personal computer operating systems. The District Court
ordered a structural remedy, which was overturned by the Appeals
Court, which remanded the remedy issue back to this court. The
Appeals Court did not prescribe or prohibit adoption of any
particular remedial actions by this court.
---------------------------------------------------------------------------
\10\ United States v. Microsoft Corp., 84 F. Supp. 2d 9
(DCCirc 1999) ("Findings of Fact"); United States v.
Microsoft Corp., 87 F. Supp. 2d 30 (DC Circ. 2000)
("Conclusions of Law").
\11\ United States v. Microsoft Corp., 253 F 3d, at 6 (DC
Circ. 2001).
---------------------------------------------------------------------------
A. The Illegal Conduct and Its Effects The Appeals Court
unanimously affirmed the core of the government's case against
Microsoft, finding that the company had undertaken a broad array of
anticompetitive practices to maintain its monopoly in personal
computer operating systems, in violation of Section 2 of the Sherman
Act. Microsoft's strategy was to use its monopoly
[[Page 28954]]
power to prevent the emergence of any new technology that might
compete with Windows. Microsoft's anticompetitive activities were
particularly directed against two products--the Netscape
browser and Sun's Java programming language--that could support
operating-system-neutral computing and thereby erode Microsoft's
market position. In summary, the District Court found, and the
Appeals Court affirmed, that:
. Microsoft has monopoly power in the market for Intel-
compatible PC operating systems, with a market share of greater than
95 percent. Microsoft's market is protected by a substantial barrier
to entry--the "applications barrier to
entry"--that discourages software developers from writing
applications for operating systems that do not already have an
established base of users.
. Microsoft effectively excluded rival browsers from the two
most efficient means of distribution--pre-installation by
Original Equipment Manufacturers (OEMs) and distribution by Internet
Access Providers (IAPs).
. Microsoft imposed restrictions on its Windows licenses that
effectively prevented OEMs from pre-installing any browser other
than Interact Explorer (IE).
. Microsoft's technological binding of IE to Windows deterred
OEMs from pre-installing rival browsers and consumers from using
them.
. Microsoft's contracts with IAPs--for example, agreeing to
give AOL preferential placement on the Windows desktop in exchange
for AOL's agreement not to distribute any non-Microsoft browser to
more than 15 percent of its subscribers and to do so only at the
customer's explicit request--blocked the distribution of a
rival browser.
. Microsoft's deals with Independent Software Vendors
(ISVs)--for example, giving preferential support to ISVs that
used IE as the default browser in software they develop--and
Apple-prohibiting Apple from pre-installing any non-Microsoft
browser--were similarly exclusionary.
. Microsoft's agreements with ISVs that made receipt of Windows
technical information conditional on the ISVs" agreement to
use Microsoft's version of the Java Virtual Machine (JVM)
exclusively were anticompetitive. Microsoft also deceived Java
developers into believing that its tools were not Windows-specific
and were consistent with Sun's objective of developing cross-
platform applications.
. Microsoft's pressuring of Intel to stop supporting cross-plat
form Java--by threatening to support an Intel competitor's
development efforts--was exclusionary.
Microsoft was clearly successful in its efforts to eliminate
threats to its desktop monopoly. Through its anticompetitive
activities, Microsoft achieved dominance in the browser market and
forestalled the development of such cross-platform technologies as
the Netscape browser and Java that could have eroded the
applications barrier to entry. The promise of operating-system-
neutral computing was that it would inject competition into the
market for operating systems, which would foster innovation
throughout the industry. By preventing the development of
competition, Microsoft's illegal conduct thwarted innovation and
harmed consumers.
B. Appropriate Criteria for a Remedial Action
The Supreme Court has stated that he purpose of remedial action
in an antitrust case is to "terminate the illegal monopoly,
deny to the defendant tile fruits of its statutory violation and
ensure that there remain no practices likely to result in
monopolization.\13\ In other words, a remedy must be effective in
the present (terminating the monopoly), the past (expropriating ill-
gotten gains), and the future (preventing similar conduct going
forward).
---------------------------------------------------------------------------
\13\ 253 F 3d at 99-100, quoting (United States v.
United Shoe Mach. Corp), 391 U.S. 244,250 (1968).
---------------------------------------------------------------------------
As professional economists, we s??ggest it is especially
important to look to the future, where economic actors will make
decisions based on the incentives inherent in whatever remedy the
court imposes. The remedy should not only address the illegal
practices Microsoft already has employed to maintain its operating
system monopoly, it should also--as the Supreme Court has
said--address practices that Microsoft might employ in the
future to erect barriers to operating system competition or to use
anticompetitive practices to leverage its monopoly beyond the
desktop into new phases of computing. In a business that moves as
rapidly as the software marketplace (and other information
technology and communications markets Microsoft is now entering or
is likely to enter soot) it is particularly important that the
remedy be forward looking.
The DOJ claims that the PFJ meets these standards, and
"will eliminate Microsoft's illegal practices, prevent
recurrence of the same or similar practices, and restore the
competitive threat that middleware products posed prior to
Microsoft's unlawful undertakings."\14\ For reasons discussed
at length below, we disagree. Here, we address two issues relating
to the standard by which any remedy should be judged.
---------------------------------------------------------------------------
\14\ CIS at 3.
---------------------------------------------------------------------------
First, it is noteworthy that the DOJ does not claim the PFJ
achieves the goal of denying Microsoft the fruits of its violations,
and clearly it will not. Such restitution is important not only to
"make whole" the victims of Microsoft's illegal activity
(e.g., the United States), but also to establish appropriate
incentives on a going forward basis. In general, allowing violators
to retain the fruits of their illegal conduct deprive the antitrust
laws of much of their force, because it sends a signal to violators
that the returns to their behavior are positive--even when they
are caught. With $42 billion in the bank, on wonders how Microsoft's
senior management could read the proposed PFJ any other way.
Second, and relatedly, DOJ's stated goal of restoring "the
competitive threat that middleware products posed prior to
Microsoft's unlawful undertakings" is not the appropriate
objective, and certainly is not equivalent to the Supreme Court's
standard of "terminat[ing] the illegal monopoly." The
competitive threat posed by the Netscape browser and Java was
quantitatively relatively small at the tin: that Microsoft's illegal
campaign against them was undertaken. But it was clear, certainly to
Microsoft, that their competitive potential in the dynamic software
marketplace was very significant. Had Microsoft not engaged in
illegal activities, the competitive significance o t" hose
products would be much greater today than it was at the time.
There is a useful analogy here to simple commercial damage
cases. If, for example, an individual or a company incurs monetary
damages from actions in the past, compensation is generally based on
the present value of those damages, typically calculated by bringing
the damage amount forward (from the time of the damage to the
present) at a normal rate of return. That would be the only way for
the damaged party to be made whole. Similarly, society has been
damaged by Microsoft's actions. For society to be made whole,
competition should, to the extent possible, be restored to what it
would be today in the absence of Microsoft's illegal conduct.\15\
Equally important on a going forward basis, however, Microsoft
should not be permitted to earn continuing returns based upon its
illegally enhanced monopoly position. To do so would be to allow the
company not only to retain the fruits of its illegal conduct in the
past but to continue harvesting those fruits indefinitely.
---------------------------------------------------------------------------
\15\ To truly be made whole, society would in addition
need to be compensated for the benefits it lost due to the absence
of competition in the intervening years, which is probably not
possible.
---------------------------------------------------------------------------
III. The CIS and the PFJ: Flawed Analysis of a Flawed Remedy
DOJ and Microsoft prefer a PFJ which contains a number of
restrictions on Microsoft's conduct on a going forward basis. The
questions before the court are whether entry of the PFJ is
consistent with the purpose and intent of the Sherman Act and, in
addition, whether, under the APPA, it is consistent with the public
into rest. To facilitate the court's deliberations on the latter
issue, the APPA requires the DOJ to submit a CIS.\16\ However, the
CIS submitted in this proceeding contains virtually no analysis of
either the PFJ or alternative remedies. It represents nothing more
than a set of unsupported assertions, and accordingly should be
given little deference by the court.
---------------------------------------------------------------------------
\16\ CIS at 3-4.
---------------------------------------------------------------------------
In this section, we briefly describe the main provisions of the
PFJ. Next, we explain why the CIS fails to meet a reasonable
standard of substantive analysis. Third, we provide some examples of
shortcomings in the PFJ which would have been obvious had DOJ
performed a more complete analysis in the CIS.
A. Major Provisions of the PFJ
As described in the CIS, the proposed PFJ contains seven major
provisions. In brief summary, they are:
. OEMs would have the freedom to support and distribute non-
Microsoft middleware products or operating systems without fear of
retaliation by Microsoft.
. To help ensure against retaliation, Microsoft would be
required to provide
[[Page 28955]]
uniform licensing terms to the 20 largest computer manufacturers.
. Computer manufacturers would have the freedom to feature and
promote non-Microsoft middleware and customize their computers to
use non-Microsoft middleware as the default.
. Microsoft would be required to disclose the interfaces and
technical information that its own middleware uses, so that ISVs can
develop competitive middleware products.
. Microsoft would be required to disclose communications
protocols necessary for server and Windows desktop operating system
software to interoperate with each other.
. Microsoft would be prohibited from retaliating against ISVs or
IHVs that develop or distribute software that compeles with
Microsoft middleware or operating system software.
. Microsoft would be prohibited from entering into exclusive
contracts concerning its middleware or operating system products.
The CIS claims that these provisions, and the supporting
provisions pertaining to enforcement, "will eliminate
Microsoft" illegal practices, prevent recurrence of the same
or similar practices, and restore the competitive threat that
middleware products posed prior to Microsoft's unlawful
undertakings." But the CIS presents virtually no analysis to
support this claim.
B. The Competitive Impact Statement
The CIS does not meet the standards established by the APPA and
does not provide sufficient analysis for this court to make an
informed decision on whether the PFJ is in the public interest.
Section 16(b)(3) of the APPA requires that the CIS include "an
explanation of the proposal ... and the anticipated effects on
competition of such relief" (Emphasis added.)
Section 16(b)(6) further requires "a description and
evaluation of alternatives to such proposal actually considered by
the United States." (Emphasis added). Under Section 16(e), the
District Court is required to determine that the consent judgment is
in the public interest and in making that determination "may
consider...anticipated effects of alternative remedies...."
Taken together, these provisions make clear that the CIS was
intended by Congress to serve as a guide to the court in evaluating
the proposed relief relative to other alternatives which might
better serve the public interest, not simply as a pro forma set of
claims and assertions. Yet the CIS in this case fails even to fully
"explain," and certainly cannot be said to
"evaluate," either the likely effects of either the PFJ
or the available alternatives. Such an analysis would seem
especially important in a fully-litigated Tunney Act case such as
this one, where a prior finding of liability suggests a lower degree
of deference to the PFJ than would otherwise be appropriate, and
thus a higher burden on the court to evaluate alternatives.
How should the court evaluate the adequacy of the CIS? Three
sets of criteria present themselves.
First, does the CIS satisfy the plain language of the statute?
Second, how does it compare with previous CIS's in similarly
significant cases? Third, how does it compare with the standards of
analysis that are required to be performed in similar situations,
such as agency rulemakings? This CIS fails all three standards.
First, does the CIS satisfy the plain language of the statute?
It depends on how the words "explain," mad
"evaluate" are defined. To defend successfully the
plain-language adequacy of the CIS, the DOJ would have to adopt a
very narrow interpretation of both words. Granted, the CIS devotes
43 pages\17\ to reciting and, DOJ presumably would argue,
"explaining" the provisions or the PFJ. What the CIS
does not do at any point, however, is explain "the anticipated
effects [of the PFJ] on competition."
---------------------------------------------------------------------------
\17\ CIS, 17-60.
---------------------------------------------------------------------------
The semantic sleight of hand upon which DOJ relies to avoid this
obligation is found on page 24 of the CIS. There, DOJ reminds us
that "Restoring competition is the 'key to the whole
question of an antitrust remedy," du Pout, 366 U.S. at
326." Then it continues with a clever subterfuge:
"Competition was injured in this case principally because
Microsoft's illegal conduct maintained the applications
barrier to entry....Thus, the key to the proper remedy in this ease
is to end Microsoft's restrictions on potentially threatening
middleware...."\18\ (Emphasis added.)
---------------------------------------------------------------------------
\18\ CIS at 24.
---------------------------------------------------------------------------
There, in the word "thus," lies the sum and the
entirety of the CIS's explanation of the connection between the PFJ
and its anticipated effects on competition. For as explained in more
detail below, it is hardly obvious, indeed, it is highly unlikely,
that simply ending Microsoft's illegal restrictions on middleware
would have any significant effect on competition on a going forward
basis. Even in these semantically troubled times, we submit, the
word "thus" cannot be taken as the
"explanation" the law requires.
But the CIS's discussion of the PFJ must be counted ,an
analytical masterpiece when compared with its treatment of
alternative remedies. In contrast to the lengthy, if failed,
treatment accorded the PFJ, the CIS attempts its "evaluation
of alternatives" in three pages. Not surprisingly, given its
brevity, the analysis is limited in how much light it can shed on
the DOJ's decisionmaking process or the relative merits of the
alternatives before the court. With respect to structural remedies,
for example, the evaluation consists of 49 words: "After
remand to the District Court, the United States informed the court
and Microsoft that it had decided, in light of the Court of Appeals
opinion and the need to obtain prompt, certain and effective relief,
that it would not further seek a breakup of Microsoft into two
businesses."\19\ Receiving even less attention are six other
remedy alternatives, which are summarily dismissed in a single
paragraph, and an unknown number of "others received or
conceived" which, in apparent direct violation of the APPA,
are not even described.\20\ There simply is no semantic standard by
which this treatment of the alternative remedies can possibly be
considered "an evaluation."
---------------------------------------------------------------------------
\19\ CIS at 61.
\20\ CIS at 63.
---------------------------------------------------------------------------
In summary, the CIS submitted by the DOJ in this case fails the
first test the court should apply: It does not fulfill the plain
language requirements or either Section 16(b)(3) or Section 16(b)(6)
of the APPA.
Any effort the DOJ may make to defend the CIS would be on firmer
ground if it could argue it is simply following past practice. While
we believe, as suggested above, that the CIS in this case should be
held to a higher standard than in cases where the issues have not
been fully litigated and a finding of liability has not been
entered, at least the DOJ could claim it was adhering to precedent.
Even by the standards of past cases, however, this CIS falls far
short.
Of course, Tunney Act cases vary in significance and complexity.
The best standard for comparison for this case would appear to be
the CIS filed in the AT&T case in 1982."\21\ In that case
as in this one, DOJ was tasked with explaining and evaluating a
Proposed Final Judgment aimed at resolving a continuing series of
complex antitrust actions affecting one of the most important
sectors, and companies, in the U.S. economy.
---------------------------------------------------------------------------
\21\ United States v. Western Electric Company, Inc. and
American Telephone & Telegraph Company, Competitive Impact
Statement (February 17, 1982), 47 FR. 7170-01. (Hereafter
AT&T CIS). Of course, unlike this case, the PFJ in the AT&T
case was entered prior to any finding of liability.
---------------------------------------------------------------------------
The AT&T CIS differs markedly from the CIS in this
proceeding both in its explanation of the competitive effects and in
its evaluation of alternative remedies. Section Ill of the AT&T
CIS\22\ presents a comprehensive explanation of the proposed remedy
and its anticipated effects on competition. Indeed, in stark
contrast to the CIS in this case, the AT&T CIS contains, in
Section III.E, an extensive discussion specifically detailing
"The Competitive Impact of the Proposed Modification."
The section is a lengthy one, explaining in detail how each
provision of the proposed remedy is expected to affect competition
on a going forward basis, beginning as follows:
---------------------------------------------------------------------------
\22\ AT&T CIS at 7173-7180.
---------------------------------------------------------------------------
Put in simplest terms, the functional divestiture contemplated
by the proposed modification will remove from AT&T the power to
employ local exchange services in ways that impede competition in
interdependent markets, and will remove from the Bell Operating
Companies ("BOCs"), which will retain such power, any
incentive to exercise it. The United States believes, therefore,
that the modification% divestiture requirement, and its
complementary injunctive provisions, will substantially accelerate
the development of competitive markets for interexchange services,
customer premises equipment, and telecommunications equipment
generally.\23\
---------------------------------------------------------------------------
\23\ AT&T CIS at 7178.
---------------------------------------------------------------------------
The ensuing pages present a careful analysis of why the
government believes this to be the case and what the precise impacts
on competition are likely to be. The proposed remedy will
"accelerate the emergence of competition in interexchange
services,"\24\ "prevent the reemergence of the ...
incentive
[[Page 28956]]
and ability to leverage regulated monopoly power into the customer
premises equipment market,"\25\ make AT&T "subject
to competition in all of its services,"\26\ "remove the
source of AT&T's monopoly power ,and its ability to leverage
monopoly power into related markets,"\27\ and "prevent
the creation anew of incentives and abilities in the BOCs to use
their monopoly power to undercut rivals in competitive
markets."\28\ There is every reason to believe that, divested
of the BOCs, AT&T wilt be a procompetitive force in the markets
that it enters. As a result of the modification, it is likely that
AT&T will expand not only its product lines, but also the areas
in which it sells telecommunications equipment."\29\
---------------------------------------------------------------------------
\24\ AT&T CIS at 7178.
\25\ AT&T CIS at 7179.
\26\ AT&T CIS at 7179.
\27\ AT&T CIS at 7179.
\28\ AT&T CIS at 7179.
\29\ AT&T CIS at 7179.
---------------------------------------------------------------------------
The authors have searched in vain, as will the court, for any
similar explanation in the Microsoft CIS. As a procedural matter,
the absence of such explanations flies in the face of the APPA. As a
substantive one, it strongly suggests such statements are lacking
for the simple reason that they are not justified by the remedy
Microsoft and the DOJ are asking the court to adopt.
The AT&T CIS also differs from the one in this case in its
treatment of" alternative remedies.\30\
---------------------------------------------------------------------------
\30\ AT&T CIS at 7181.
---------------------------------------------------------------------------
The AT&T CIS appears to meet the requirements of the APPA by
describing in some detail the alternative remedies considered and
evaluating their likely impacts" on competition relative to
those expected from the one proposed. "The United States
believes," it concludes, "that the [main alternative]
did not approach even remotely the effectiveness of the proposed
modification in achieving conditions that would assure full
competition in the telecommunications industry."\31\ Again,
such evaluative language is simply absent from the CIS in this case.
And again, one cannot help but conclude that, had today's DOJ
conducted the same careful analysis as that conducted 20 years ago,
it might well have reached different conclusions in the current
case.
---------------------------------------------------------------------------
\31\ AT&T CIS at 7181.
---------------------------------------------------------------------------
In summary, then, the CIS not only fails the satisfy the plain
language of the APPA, but also fails to meet the standard
established by DOJ for a CIS in the most directly analogous case.
The third criteria by which the court should evaluate the
sufficiency of the CIS is whether it meets the standards of analysis
that are required to be performed in similar situations, the most
obvious of which is agency rulemakings.
For at least the last 20 years, agencies have been required to
undertake a detailed regulatory impact analysis when they propose
major regulatory actions. Under E.O. 12291 (in effect during the
Reagan and Bush Administrations), and E.O. 12866 (issued by
President Clinton and still in effect), government agencies have
been expected to prepare a detailed analysis of the expected
benefits and costs of major regulatory proposals and alternatives to
them.\32\ While the PFJ is technically not a regulation that would
fall under E.O. 12866, the magnitude of its impact far exceeds the
$100 million threshold that defines a "major rule" and
thus triggers the requirement for a detailed analysis.
---------------------------------------------------------------------------
\32\ See E.O. 12291 (February 17, 1981) and E.O. 12866
(September 30, 1993).
---------------------------------------------------------------------------
The analysis of regulatory interventions in the economy, which
is what the PFJ in this case is, is not a black art. Increasingly,
and on the basis of more than two decades of performing such
analyses of all major rules, regulatory analysis has become a
scientific process comprised of distinct steps and containing
specific elements. E.O. 12866, for example, lays out specific
criteria such analyses should meet, including: "(i) An
assessment, including the underlying analysis, of benefits
anticipated from the regulatory action (such as, but not limited to,
the promotion of the efficient functioning of the economy and
private markets ....) together with, to the extent feasible, a
quantification of those benefits; (ii) An assessment, including the
underlying analysis, of costs anticipated from the regulatory action
... together with, to the extent feasible, a quantification of those
costs; and (iii) An assessment including the underlying analysis, of
the costs and benefits of potentially effective and reasonably
feasible alternatives to the planned regulation...."
The specific analytical techniques to be used in such
evaluations are further described in guidance from the Office of
Management and Budget issued January 11, 1996,\33\ and reiterated
most recently by OMB on June 19, 2001."\34\ These guidelines
require agencies, before issuing any major regulation, to take into
account such issues as whether more "performance
oriented" approaches are possible, the impact of alternative
levels of stringency mad effective dates, and alternative methods of
ensuring compliance, and to perform evaluations that take into
account "discounting," "risk and
uncertainty," and "non-monetized benefits and
costs." Each analysis, the guidance demands, must
"provide information allowing decisionmakers to determine
that: There is adequate information indicating the need for and
consequences of the proposed action; The potential benefits to
society justify the potential costs ...; The proposed action will
maximize the net benefits to society...; [and] .... Agency decisions
are based on the best reasonably available scientific, technical,
economic, and other information."
---------------------------------------------------------------------------
\33\ Office of Management and Budget, Economic Analysis of
Federal Regulations Under Executive Order 12866 (January 11,
1996)(available at www. whitehouse.gov/omb/inforeg/riaguide.html).
\34\ Office of Management and Budget, Memorandum for the
Beads of Executive Departments and Agencies: Improving Regulatory
Impact Analyses (June 19, 2001)(available at www.whitehouse.gov.omb/
memoranda/m01-23.html)
---------------------------------------------------------------------------
The requirements of the APPA with respect to Competitive Impact
Statements are, of course, far less specific than those listed
above. Bat the purpose of the APPA in requiring a CIS is presumably
similar to the purpose of regulatory analyses: To allow
decisionmakers, in this case the court, to understand the
ramifications of their actions relative to alternative choices. By
the standards of modern policy analysis, DOJ's CIS fails to perform
this function at the level the court should expect, especially in a
case of this magnitude.
To repeat what we asserted at the outset of this section, the
court might evaluate the CIS in this case by three standards: First,
does the C1S satisfy the plain language of the statute? Second, how
does it compare with previous CIS's in similarly significant cases?
Third, how does it compare with the standards of analysis that are
required to be performed in similar situations, such as agency
rulemakings? This C1S Pails ale three standards.
C. The PFJ Will Not Have Its Claimed Effect, Nor Any Pro-
Competitive Effect
In fact, a close reading of the language of the PFJ indicates
that it will not do what the DOJ claims. Moreover, even if DOJ's
claims are taken at face value, the PFJ will not have its intended
effect because of the realities of the marketplace. Indeed, this is
the only conclusion that can be reached based upon a real analysis
of the "competitive impact" of the PFJ, which is to say
an analysis of how, if at all, the provisions of the PFJ will change
the behavior of participants in the marketplace.
Other commentators will undoubtedly thoroughly catalogue the
loopholes in the PFJ, of which there are many, and it is not our
intention to do so here. It is, however, illustrative of the defects
of the PFJ to analyze it through the lens of the Netscape browser
experience, since so much of Microsoft's liability concerns its
actions toward the Netscape browser. Accordingly, much of the PFJ is
directed at precluding the type of anticompetitive acts that
Microsoft undertook against Netscape (even though the browser war is
over and the industry has now moved on to a different stage). But,
the PFJ does not even succeed in this minimal goal--of creating
the conditions under which the Netscape browser could have competed
without being subject to Microsoft's exclusionary practices. Indeed,
the PFJ specifically permits many of the exclusionary practices in
which Microsoft engaged:
. Section III.A of the PFJ is supposed to protect OEMs from
retaliation by Microsoft if they distribute non-Microsoft products.
However, the language of Section III.A prohibits Microsoft from
retaliating against an OEM for "developing, distributing,
promoting, using, selling, or licensing any software that competes
with Microsoft Platform Software or any product or service that
distributes or promotes any Non-Microsoft Middleware."
(Emphasis added). (Microsoft Platform Software is defined as
including (i) a Windows Operating System Product and/or (ii) a
Microsoft Middleware Product,) While the Netscape browser was a
potential competitor for the Microsoft operating system, it never
became an actual competitor. Morcover, at the time Netscape
introduced its browser, Microsoft did not have a comparable
Middleware Product. Thus, the language of III.A would have permitted
Microsoft to retaliate against OEMs
[[Page 28957]]
for distributing the Netscape browser at the time it was introduced.
. Similarly, Section III.F.1 prohibits Microsoft from
retaliating against any ISV or IHV for "developing, using,
distributing, promoting or supporting any software that competes
with Microsoft Platform Software or any software that runs on any
software that competes with Microsoft Platform Software...."
(Emphasis added). The prohibitions in Section III.F.2 on Microsoft's
relations with ISVs are also triggered by software that
"competes with Microsoft Platform Software", which the
Netscape browser did not initially do.
. Section III.G.2 is intended to prevent similar exclusionary
behavior with respect to IAPs and ICPs, by prohibiting Microsoft
from entering into any agreement with "any IAP or ICP that
grants placement on the desktop or elsewhere ... on the condition
that the IAP or ICP refrain from distributing, promoting or using
any software that competes with Microsoft Middleware."
(Emphasis added). Again, Netscape's browser was a new product that
did not compete with any Microsoft product at the time it was
introduced.
. Section III.C is intended to prevent restrictive agreements
with OEMs by, for example, preventing Microsoft from restricting the
ability of its OEM licensees from "[l]aunching automatically
...any Non-Microsoft Middleware if a Microsoft Middleware Product
that provides similar functionality would otherwise be launched
...." (See Section III.C.3, emphasis added). Under this
language, Microsoft can preclude its OEM licensees from permitting
the automatic launch of a new product if Microsoft does not have a
similar product or if the Microsoft product does not have
"similar functionality" (obviously, a term open to
interpretation). Again, when the Netscape browser was launched,
Microsoft did not have a similar product.
. Section III.D is intended to preclude Microsoft from excluding
rival products by denying them the technical information they need
to interoperate with the Windows operating systems. It requires
Microsoft to "disclose to ISVs, IHVs, IAPs, ICPs, and OEMs,
for the sole purpose of interoperating with a Windows Operating
System Product ... the APIs and related Documentation that arc used
by Microsoft Middleware to interoperate with a Windows Operating
System Product." (Emphasis added). If, however, Microsoft does
not produce an analogous product, it might not use the APIs needed
for a new application, such as the Netscape browser, to get started.
. Section III H contains a variety of provisions designed to
enable choice of Non-Microsoft Middleware Products on the part of
users and OEMs. The PFJ explicitly states, however, that
"Microsoft's obligations under this Section III.H as to any
new Windows Operating System Product shall be determined based on
the Microsoft Middleware Products which exist seven months prior to
the last beta test version (i.e., the one immediately preceding the
first release candidate) of that Windows Operating System
Product." At the time the Netscape browser was introduced,
there was no comparable Microsoft Middleware Product.
. Finally, Non-Microsoft Middleware Products arc defined to
include products "of which at least one million copies were
distributed in the United States within the previous year."
(Section VI.N). Thus, regardless of any of the other provisions, the
PFJ permits exclusionary behavior against new products that arc
trying to get established.
In sum, under the provisions of the PFJ Microsoft would have
been permitted to engage in anticompetitive practices against the
Netscape browser because the browser did not compete against the
Windows operating system and because Microsoft did not at the outset
have a comparable product. Moreover, at least in the early stages,
the Netscape browser would not have been covered because a million
copies had not been distributed in a single year. The DOJ obviously
feels that the fabled entrepreneurs of Silicon Valley, working in
their garages, are not worthy of protection against Microsoft under
the PFJ. It is especially ironic that Microsoft, which has dedicated
so much rhetoric to persuading the courts and the public that its
monopoly could be overturned at any moment by the proverbial
entrepreneur working out of her garage, should seek to preserve the
right to squash precisely such competitive threats.
More broadly, the requirement that Microsoft have a comparable
product in order to trigger some of the PFJ's provisions creates
perverse incentives. It may discourage Microsoft from introducing
its own product, because to do so triggers provisions restricting
its ability to exclude a potential competitor. The result could be
that consumers would be deprived entirely of a useful middleware
product that might potentially compete with the Windows operating
system, because Microsoft is able to engage in exclusionary
practices against another firm and does not find it in its interest
to introduce its own product.
But the PFJ is flawed at an even deeper level: Even if it did
what DOJ and Microsoft say it would, its effect on firms that
operate in Microsoft's markets and its ability to restore
competition in those markets would be minimal at most. Most of the
PFJ is intended to prevent Microsoft from retaliating against OEMs,
ISVs, IAPs and others that distribute, develop or otherwise support
software that competes with Microsoft middleware. Under the terms of
the PFJ, however, these entities would have little incentive to
promote competitive middleware. This is principally because, despite
the Appeals Court ruling that Microsoft's integration of the browser
and the operating system was anticompetitive, the PFJ would allow
Microsoft to continue to bundle its middleware (and other) products
with its operating system. Indeed, Microsoft's new XP software
incorporates new functionality into the Windows operating system as
never before. It includes, among other things, the IE browser,
Microsoft's instant messaging and email software, Windows Media
Player and the Microsoft Passport digital authentication software.
All of these functions are bundled together and the combined package
is sold at a fixed price.
Thus, OEMs have virtually no incentive to customize their
offerings with non-Microsoft software. To do so involves an
additional cost for the non-Microsoft software when compariable
functionality is provided by Microsoft at no additional cost. An OEM
that did this would have to pass these added costs on to its
customers and would likely lose sales to other OEMs. Obviously, if
OEMs don't have the incentive to install non-Microsoft software,
ISVs won't have the incentive to develop it and IAPs won't have the
incentive to distribute it.
As a result, the PFJ will not have any significant pro-
competitive impact in the markets for either middleware or PC
operating systems. Nor, for the same reasons, is it likely to have
any significant pro-competitive impact on newly emerging markets,
such as voice-over-IP instant messaging, game boxes, e-commerce
technologies (e.g., "Passport") or digital rights
management technologies. Indeed, the inability to make any plausible
claims for such pro-competitive effects is the most likely
explanation for the fact that, in contrast to the AT&T CIS, the
CIS in this case doesn't make any.
IV. The Remedy Alternatives
There are two general classes of remedies that can be employed
to remedy Microsoft's antitrust violations--conduct remedies
and structural remedies. Conduct remedies leave Microsoft intact and
attempt to constrain its anticompetitive behavior by imposing a set
of behavioral requirements-essentially, a regulatory regime tailor-
made for one firm. Microsoft's structure--and, importantly, its
incentives--remain largely the same.\35\ The challenge is to
develop rules that effectively deter anticompetitive behavior, given
that such behavior might continue to be in Microsoft's interest. The
PFJ, which relies on conduct remedies, will not be effective in
deterring anticompetitive behavior on the part of Microsoft.
---------------------------------------------------------------------------
\35\ Microsoft's incentives would be modified to the
extent it faces legal penalties, but those penalties would have to
be very large to have a significant effect on Microsoft's
incentives.
---------------------------------------------------------------------------
Structural relief takes a different approach. Structural relief,
as the name implies, involves restructuring the firm so as. to
change its incentives and ability to act anticompetitively. As DOJ
explained eloquently in the AT&T CIS, if a restructuring is
successful in achieving those goals, behavioral restrictions are
largely unnecessary. The Appeals Court noted that structural relief
is a common form of relief in ,antitrust cases and is "the
most important of antitrust remedies."\36\
---------------------------------------------------------------------------
\36\ 253 F 3d at 103, quoting United States v,. E.I. du
Pont de Nemours & Co., 366 U,S. 316, 331 (1961).
---------------------------------------------------------------------------
In this section, we describe the alternative structural remedies
available to the court. Then we offer an evaluation of the proposals
offered by the remaining litigating states.
A. Alternative Structural Remedies
At the government's urging, the District Court initially adopted
a structural remedy, supplemented by interim conduct relief.\37\ The
Appeals Court vacated the District Court's remedy, partly because it
modified the District Court's liability finding and
[[Page 28958]]
partly because the District Court had failed to hold an evidentiary
hearing.\38\ The Appeals Court did not, however, rule out a
structural solution to this case. The Court directed that "the
District Court also should consider whether plaintiffs have
established a sufficient causal connection between Microsoft's
anticompetitive conduct and its dominant position in the OS
market."\39\ It continued, "[i]f the court on remand is
unconvinced of the causal connection between Microsoft's
exclusionary conduct and the company's position in the OS market, it
may well conclude that divestiture is not an appropriate
remedy."\40\ This is an issue that should be explored in an
evidentiary hearing. While it is difficult to predict exactly how
the industry would have developed in the absence of Microsoft's
anticompetitive behavior, it is likely that an alternative to
Microsoft's operating-system platform would have emerged and it is a
virtual certainty that Microsoft's position would be far less
dominant than it is today. Clearly, Microsoft thought that was a
distinct possibility.
---------------------------------------------------------------------------
\37\ United States v. Microsoft Corp., 97 F Supp-2d.
(DCCirc. 2000) "Final Judgement".
\38\ 253 F 3d at 6.
\39\ 253 F 3d at 105.
\40\ 253 F 3d at 105-6..
---------------------------------------------------------------------------
The causation between Microsoft's anticompetitive practices and
its operating system monopoly runs both ways. Without its monopoly,
Microsoft would have been unable to engage in the exclusionary
practices documented by the District Court and affirmed by the
Appeals Court. Moreover, because of the wide array of business
practices at issue and the complexity of the industry, it is very
difficult to fashion a conduct relief regime that will be effective
if Microsoft retains its dominant market position. This is why the
Department of Justice (initially) and others (including ourselves)
favor a structural solution. Two different forms of structural
solution have been proposed, which we review in turn.
The DOJ initially proposed, and the District Court initially
ordered, a vertical divestiture, which would divide Microsoft along
product tines, into an operating systems company and an applications
company.\41\ The DOJ argued that this remedy would create two
powerful companies that would have the incentive to compete with
each other, diminishing the market power of both. According to
Timothy Bresnahan, Chief Economist at the Antitrust Division at the
time, "divestiture of the company into an applications and an
operating system company restores competitive conditions very like
those destroyed by the anticompetitive acts, Absent the
anticompetitive acts, Microsoft would have lost the browser war, and
other firms would have commercialized useful technologies now
controlled by Microsoft. Divided technical leadership, which could
be accomplished by having an independent browser company in the late
1990s or an applications company now, lowers barriers to entry and
competition in many markets. It was exactly this route to an
increase in competition that Microsoft avoided by its
anticompetitive acts. Second, ending Microsoft's unique position in
the industry offers innovative new technologies the choice of two
mass-market distribution partners, either Appsco [the applications
company] or OSCo [the operating system company]. The divestiture
will do much to reduce the motive to violate and also to reduce the
effectiveness of future anticompetitive acts. It restores conditions
for competitive innovation at a moment in technology history [i.e.,
when the Internet is starting to be commercialized] when having a
single firm set the direction of innovation in PC and end-user
oriented internet markets is most unwise,"\42\
---------------------------------------------------------------------------
\41\ Final Judgement at 2.
\42\ Timonthy F. Bresnahan, "The Right
Remedy," at 1, (available at www.stanford.edu/tbres/microsoft/
The Right Remedy.pdf).
---------------------------------------------------------------------------
Similarly, the Department of Justice, in initially proposing
this remedy, argued that separating the operating system from the
applications company would "reduce the entry barriers that
Microsoft's illegal conduct erected and make it less likely that
Microsoft [would] have the incentive or ability to increase them in
the future."\43\ An independent applications company would
have every incentive to support competitors to Windows rather than
make decisions based on the level of threat those competitors pose
to Microsoft.\44\ A separate applications company would have
appropriate incentives to port its products to competing operating
systems, such as Linux, thereby lowering the applications barrier to
entry that potential competitors face. Currently, Microsoft has an
incentive to strategically withhold applications from actual or
potential competitors, even if providing them would otherwise be
economically justified. In addition, the applications company would
have the incentive to make its tools available to Independent
Software Vendors (ISVs) that cooperate with competing operating
system providers.
---------------------------------------------------------------------------
\43\ Plantiffs" Memorandom in support of Proposed
Final Judgement at 30-43, Microsoft (No. 98-1232),
available at http://www.usdoj.gov/atr/cases/f4600/4640.htm.
\44\ United States v. Microsoft Corp., 147 F 3d 935
(DCCirc. 1998) Romer Declaration # 4, (hereafter Romer).
---------------------------------------------------------------------------
Separate operating system and applications companies would make
it possible for middleware technologies in the applications company
to be competitive with Windows. When applications are written to
middleware technologies, like the Netscape browser, which operate
between the applications software and the operating system, they
become operating system-neutral,\45\ reducing the applications
barrier to entry and facilitating competition with Windows. There
are several desktop applications, including Microsoft Office, that
expose APIs and could become important middleware technologies.
---------------------------------------------------------------------------
\45\ Romer at 13.
---------------------------------------------------------------------------
Of course, a vertical divesture now would have a somewhat
different effect than when it was first adopted by the District
Court, because Microsoft has bundled many more applications into its
new XP operating system. If the District Court again decided to
adopt this remedy, it would also have to decide whether to require
Microsoft to remove some applications functionality from its XP
operating system or permit it to remain as is. If the XP operating
system were allowed to remain as is, applications that would
previously have been part of the applications company would be part
of" the operating system company. However, significant
applications--principally, Microsoft Office--still remain
separate from the operating system.
The alternative to a vertical approach is what we term a
"hybrid" structural remedy, which combines both vertical
and horizontal elements. A purely horizontal divestiture would
divide Microsoft into several vertically integrated companies, each
with full rights to Microsoft's intellectual property, creating
several sellers of Windows as well as Microsoft's other software
products. This remedy arguably goes beyond what is necessary or
could be justified as matter of law, since it divides up products
that were not the subject of the case.
A number of commentators, including Dr. Lenard, have proposed a
"hybrid" remedy, which has elements of both vertical and
horizontal divestiture.\46\ It goes a step beyond the vertical
divestiture remedy that the District Court adopted by first
separating the operating systems company from the applications
company and then creating three equivalent operating system
companies.
---------------------------------------------------------------------------
\46\ See Thomas M. Lenard, Creating Competition in the
Market for Operating Systems." A Structural Remedy ]'or
Microsoft, ( Washington: Progress & Freedom Foundation, 2000)
http://www.pff.org/remedies/htm; Remedies Brief of Amici Curiae
Robert E. Litan et al., 2000; Thomas M. Lenard, "Creating
Competition in the Market for Operating Systems: Alternative
Structural Remedies in the Microsoft Case," George Mason Law
Review, Vol. 9., Spring 2001.
---------------------------------------------------------------------------
Microsoft's bundling of more applications functionality into the
new XP operating system strengthens the arguments for the hybrid
remedy relative to other remedies. The PFJ (as discussed above) does
not contain any restrictions on bundling, which will hinder its
effectiveness dramatically, in addition, as more applications are
moved into the operating system, the vertical divestiture becomes
less able to restore the competitive balance, because the newly
formed applications company would be a less powerful competitor.
By creating competing Windows companies, the hybrid remedy
directly addresses the monopoly problem, which is the source of
Microsoft's anticompetitive behavior. As indicated above, without
the monopoly, Microsoft would never have been able to exclude the
Netscape browser from the most effective means of
distribution--OEMs and IAPs. It would not, for example, have
been able to get the OEMs to refrain from pre-installing the
Netscape browser as a condition for receiving a Windows license.
Similarly, Microsoft would not have been able to extinguish the
market for a competing browser by bundling the Windows operating
system with IE. Microsoft would not have been able to do these
things--which are at the core of the Appeals Court's liability
finding--because the OEMs and the IAPs would have had
competitive alternatives to which they could turn.
[[Page 28959]]
The hybrid remedy would eliminate the applications barrier to
entry for the new Windows companies and deprive Microsoft of its
ability to leverage its desktop monopoly into new markets. Because
it really does restore competition, extensive behavioral
restrictions are not required, making this the least regulatory of
the available alternatives.
The hybrid remedy is to a significant extent an
"intellectual property" remedy, requiring Microsoft to
grant full intellectual property rights to its Windows Operating
System to two new companies. This type of remedy is particularly
suited to "new-economy" companies like Microsoft, whose
assets consist primarily of informational capital, which can easily
be replicated. \47\ The rationale for going further and dividing up
employees is that much of the intellectual property is embodied in
the employees.\48\ In contrast to traditional "old-
economy" companies, however, there is very little physical
capital to be divided up.
---------------------------------------------------------------------------
\47\ Remedies Brief of Amici Curiae Robert E. Litan et
al., 2000.
\48\ Thomas M. Lenard, Creating Competition in the Market
for Operating Systems: A Structural Remedy for Microsoft,
(Washington,: Progress & Freedom Foundation, 2000) http://
www.pff.org/remedies/htm.
---------------------------------------------------------------------------
This factor should alleviate some of the concerns expressed in
the Appeals Court opinion about the use of a structural remedy in
tile case of a "unitary company"--i.e., a company
not formed by mergers and acquisitions.\49\ Such concerns bare more
validity in the case of old-economy companies, because of the
difficulty of dividing up physical capital. What is being proposed
in the hybrid remedy is much closer to a reproduction than it is to
a division of the company's assets. When those assets consist
primarily of information, they can be reproduced at very low cost.
---------------------------------------------------------------------------
\49\ 253 F 3d at 103.
---------------------------------------------------------------------------
B. The Litigating States Proposal
We believe a structural remedy continues to offer the best hope
of deterring Microsoft's anticompetitive behavior in a way that is
not overly regulatory. If, however, a structural remedy is off the
table, the conduct remedy proposed by the Litigating States (LS) is
far better than the PFJ. The LS Proposal does not contain the
obvious loopholes and exceptions that are pervasive in the PFJ.
Moreover, the LS Proposal includes a number of provisions that can
partially restore competition to what it might have been absent the
anticompetitive behavior. Because it will change the behavior of the
participants in the market, the LS Proposal provides a serious
remedy to Microsoft's offenses. Some of the attractive features of
the LS proposal are as follows:
. In contrast to the PFJ, the LS Proposal contains: prohibitions
on exclusionary and retaliatory behavior that are clear and
unambiguous and mean what they purport to mean. In general, they
provide meaningful protection against retaliation for the
development and distribution of non-Microsoft software.
. The LS Proposal would require Microsoft to license an
unbundled version of its software. As discussed above, the bundling
of applications together with the monopoly operating system makes it
uneconomic in most cases to develop and distribute software that
competes with Microsoft. This requirement would address that problem
and create an environment in which rival software can be developed.
. The LS Proposal would require Microsoft to license its
software to third parties (not just OEMs) who could produce a
customized product that would enlarge the range of consumer choice
and provide competition for Microsoft.
. The proposal also would require Microsoft to continue to
license predecessor versions of Windows. This would permit OEMs to
expand the range of consumer choice by providing a lower-priced
operating-system product that might be perfectly satisfactory for a
large number of users. In addition, it would permit OEMs and third
parties to continue to develop a differentiated product that might
be competitive with Microsoft.
. The LS Proposal would require Microsoft to make IE available
on an open-source basis, and would require Microsoft to distribute
Java, thereby partially reversing same of the effects of Microsoft's
illegal activities
. Finally, the LS Proposal would require Microsoft %0 auction to
a third party the right to port Microsoft Office to competing
operating systems." This would reduce the applications barrier
to entry for a competing operating system, such as Linux. All of
these aspects of the LS Proposal would add significantly to the
probability that the remedy in this case would actually have the
desired effect of increasing competition in one or more of the
relevant product markets.
V. Conclusion
The PFJ is not an adequate remedy and its adoption is not in the
public interest. It will not deter Microsoft from engaging in
anticompetitive activities and it will not restore competition in
this extremely important sector of the economy. Moreover, the CIS
that the government has prepared does not provide the information
necessary for the District Court to determine that the PFJ is in the
public interest.
In order to generate the necessary information for such a
determination, the District Court should hold an evidentiary hearing
in which the competitive impacts, benefits and costs of all the
available remedies are closely evaluated. In addition to the PFJ,
the Court should consider structural remedies--which appear to
be justified under the criteria established by the Court or
Appeals--as well as the LS Proposal. We believe that at the end
of this process, the court will agree that the PFJ is not in the
public interest and that the "hybrid" structural remedy
we recommend best meets all the of the criteria governing the
court's deliberations in this matter.
MTC-00030607
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
-----------------------
-----------------------
-----------------------
----------)
UNITED STATES OF AMERICA, ) ) Plaintiff, ) )
v. ) Civil Action No. 98-1232 (CKK) )
MICROSOFT CORPORATION, ) )
Defendant. ) ) )
----------------------
----------------------
----------------------
----------)
-----------------------
----------------------
----------------------
---------
STATE OF NEW YORK, et al., ) )
Plaintiffs, ) )
v. )Civil Action No. 98-1233 (CKK) )
MICROSOFT CORPORATION, ) )
Defendant. ) )
PLAINTIFF LITIGATING STATES" REMEDIAL PROPOSALS
Pursuant to this Court's Scheduling Order of September 28, 2001,
Plaintiff States California, Connecticut, Florida, Iowa, Kansas,
Massachusetts, Minnesota, Utah, West Virginia and the District of
Columbia hereby submit their proposals for remedial relief in this
matter.
Introduction
A unanimous en banc decision of the United States Court of
Appeals for the District of Columbia Circuit affirmed the District
Court's conclusion that Microsoft Corporation
("Microsoft") unlawfully maintained its monopoly power
by suppressing emerging technologies that threatened to undermine
its monopoly control of the personal computer operating system
market. See United States v. Microsoft Corp., 253 F.3d 34 (DC Cir.),
cert denied, 122 S. Ct. 350 (2001). The key to Microsoft's monopoly
maintenance was the use of its monopoly power to enhance and
maintain what the Court of Appeals called the "applications
barrier to entry." Computer operating systems can compete
successfully only if they provide a platform for the software
applications that consumers want their computers to perform; but
software developers naturally prefer to write applications for
operating systems that already have a substantial consumer base. The
applications barrier to entry, coupled with Microsoft's 90% plus
market share, gave Microsoft the power to protect its
"dominant operating system irrespective of quality" and
to "stave off even superior new rivals." Id. at 56.
During the mid-1990s, Microsoft was confronted with a potential
threat to the applications barrier to entry, and thus to its
monopoly power, in the form of two new products, Netscape's Internet
browser, known as Navigator, and Sun Microsystems" Java
technologies. Recognizing the threat posed by these middleware
products (i.e., software that can itself be a platform for
applications development), Microsoft aggressively and unlawfully
prevented these rivals from achieving the widespread distribution
they needed to attract software development and ultimately make
other platforms meaningful competitors with Microsoft's Windows
operating system. The Court of Appeals catalogued an extensive list
of anticompetitive, exclusionary acts by which Microsoft
artificially bolstered the applications barrier to entry, including
commingling the software code for its own middleware with that of
its monopoly operating system, thereby eliminating distribution
opportunities for competing middleware; threatening to withhold and
withholding critical technical information from competing middleware
providers, thereby allowing Microsoft middleware to
[[Page 28960]]
obtain significant advantages over its rivals; threatening to
withhold porting of critical Microsoft software applications and
financial benefits from those who even considered aiding its rivals;
contractually precluding OEMs and ultimately end-users from the
opportunity to choose competitive software; and even deceiving
software developers to conceal the fact that the software they were
writing would be compatible only with Microsoft's platform.
"The proper disposition of antitrust cases is obviously of
great public importance, and their remedial phase, more often than
not, is crucial. For the suit has been a futile exercise if the
Government proves a violation but fails to secure a remedy adequate
to redress it." United States v. E.I. du Pont de Nemours &
Co., 366 U.S. 316, 323 (1961). As the Court of Appeals held,
"a remedies decree in an antitrust case must seek to
'unfetter a market from anticompetitive conduct," to
'terminate the illegal monopoly, deny to the defendant the
fruits of its statutory violation, and ensure that there remain no
practices likely to result in monopolization in the
future."' Microsoft, 253 F.3d at 103 (quoting Ford Motor
Co. v. United States, 405 U.S. 562, 577 (1972) and United States v.
United Shoe Mach. Corp., 391 U.S. 244, 250 (1968)) (citation
omitted).
Consistent with these principles, any remedy must prevent
Microsoft from continuing the practices it used to artificially
enhance and protect the applications barrier to
entry--prohibiting, for example, the types of deals with third
parties that cut off the critical channels of distribution needed by
Microsoft's middleware competitors. A meaningful remedy must do
more, however, than merely prohibit a recurrence of Microsoft's past
misdeeds: (1) it must also seek to restore the competitive balance
so that competing middleware developers and those who write
applications based on that middleware are not unfairly handicapped
in that competition by Microsoft's past exclusionary acts, and (2)
it must be forward-looking with respect to technological and
marketplace developments, so that today's emerging competitive
threats are protected from the very anticompetitive conduct that
Microsoft has so consistently and effectively employed in the past.
Only then can the applications barrier to entry be reduced and much-
needed competition be given a fair chance to emerge.
Specific Remedial Proposals
A. Unbinding Microsoft's Software
As part of its illegal effort to suppress forms of middleware
that threatened to offer a competitive platform for software
development, Microsoft commingled the software code for Internet
Explorer with the code for its monopoly operating system. See
Microsoft, 253 F.3d at 66. The Court of Appeals affirmed the
District Court's findings that (1) the commingling of Internet
Explorer with the Windows Operating System deterred computer
manufacturers ("OEMs") from installing a rival browser
such as Netscape Navigator, (2) Microsoft offered no specific or
substantiated evidence to justify such commingling, and (3)
"such commingling ha[d] an anticompetitive effect." Id.
To prevent further unlawful commingling of Internet Explorer
with the Windows Operating System, and to prevent similar
anticompetitive commingling of other rival middleware (such as
multimedia viewing and/or listening software or electronic mail
software), Microsoft must be required either to cease such
commingling or to offer its operating system software on an
unbundled basis:\1\
---------------------------------------------------------------------------
\1\ The proposed text of the remedial order appears in
italics throughout this document. The full text of the proposed
remedial order is also attached at Exhibit A.
---------------------------------------------------------------------------
1. Restriction on Binding Microsoft Middleware Products to
Windows Operating System Products. Microsoft shall not, in any
Windows Operating System Product (excluding Windows 98 and Windows
98 SE) it distributes beginning six months after the date of entry
of this Final Judgment, Bind any Microsoft Middleware Products to
the Windows Operating System unless Microsoft also has available to
license, upon the written request of each Covered OEM licensee or
Third-Party Licensee that so specifies, and Microsoft supports both
directly and indirectly, an otherwise identical version of the
Windows Operating System Product that omits any combination of
Microsoft Middleware Products as indicated by the licensee; further,
Microsoft must take all necessary steps to ensure that such version
operates effectively and without degradation absent the removed
Microsoft Middleware Product(s). Microsoft shall not deny timely
access to alpha and beta releases of Windows Operating System
Products to any OEM or third party seeking to exercise any of the
options or alternatives provided under this Final Judgment.
Microsoft shall offer each version of the Windows Operating System
Product that omits such Microsoft Middleware Product(s) at a reduced
price (compared to the version that contains them). The reduction in
price must equal the ratio of the development costs of each omitted
Microsoft Middleware Product to the relative development costs of
that version of the Windows Operating System Product (i.e.,
development costs incurred since the previous major release; and for
the avoidance of doubt, the major release previous to Windows XP is
Windows 2000), multiplied by the price of the version of the Windows
Operating System Product that includes all such Microsoft Middleware
Products. However, if any such Microsoft Middleware Product(s) is/
are sold separately from the Operating System, and the price of the
license(s) for those omitted unbound Microsoft Middleware Product(s)
is greater than the result of the formula in the preceding sentence,
then the amount of the reduction shall be equal to or greater than
the price of such separate licenses.
B. Mandating Uniform and Non-Discriminatory Licensing
The District Court concluded that Microsoft provided significant
additional consideration to OEMs who promoted Internet Explorer or
curtailed distribution or "promotion of Netscape Navigator.
See United States v. Microsoft Corp., 84 F. Supp. 2d 9, 67 (D.DC
1999). The Court of Appeals and the District Court both concluded
that Microsoft also employed numerous restrictive license previsions
to reduce distribution and usage of Netscape Navigator. 253 F.3d at
61. This restrictive and discriminatory contractual treatment of
Microsoft licensees was a critical means of preventing rival
middleware from receiving effective distribution in the important
OEM channel.
Because Microsoft has monopoly power and thus typically licenses
the overwhelming majority of the operating systems used by virtually
every major OEM, Microsoft has the undeniable power to harm an OEM
or any other third-party licensee, who wishes to distribute non-
Microsoft middleware, by providing more favorable licensing terms to
the recalcitrant OEM's or third-party licensee's
competitors--i.e., those who promote or distribute Microsoft
middleware. In order for competing middleware to have a chance to
obtain distribution through the important OEM channel (and thereby
achieve a degree of usage that would erode the applications barrier
to entry), Microsoft must be required, at a minimum, (1) to offer
uniform and non-discriminatory license terms to OEMs and other
third-party licensees, and (2) to permit such licensees to customize
Windows (including earlier versions of Windows) to include whatever
Microsoft middleware or competing middleware the licensee wishes to
sell to consumers. Moreover, Microsoft's obligation to license
should not be restricted just to OEMs, but rather should include
other third parties who also could repackage some or all of Windows
with competing middleware and thereby offer software packages that
are differentiated from and competitive with Microsoft's Windows:
2. Windows Operating System Licenses.
a. Mandatory, Uniform Licensing for Windows Operating System
Products. Microsoft shall license, to Covered OEMs and Third-Party
Licensees, Windows Operating System Products, including those
versions made available for license pursuant to Section 1, pursuant
to uniform license agreements with uniform terms and conditions.
Microsoft shall not employ Market Development Allowances or other
discounts, including special discounts based on involvement in
development or any joint development process. Without limiting the
preceding sentence, Microsoft shall charge each licensee the
applicable royalty for the licensed product as set forth on a
schedule, to be established by Microsoft and published on a web site
accessible to Plaintiffs and all licensees, that provides for
uniform royalties for each such product (which royalties shall in
any case be consistent with the requirements of Section 1), except
that:
i. the schedule may specify different royalties for different
language versions; and
ii. the schedule may specify reasonable, uniform volume
discounts to be offered on a non-discriminatory basis based upon the
independently determined actual volume of total shipments of the
licensed products (aggregating all Windows Operating System
Products, including any versions made available for license pursuant
to Section 1).
Microsoft shall not engage in any discriminatory enforcement of
any license for
[[Page 28961]]
a licensed Windows Operating System Product (including those
versions of the Windows Operating System Product offered and
licensed pursuant to Section 1) and shall not terminate any such
license without good cause and in any case without having first
given the Covered OEM or other Third-Party Licensee written notice
of the reason for the proposed termination and not less than sixty
days" opportunity to cure. Microsoft shall not enforce any
provision in any Agreement with a Covered OEM or other Third-Party
Licensee (including without limitation any cross-license) that is
inconsistent with this Final Judgment.
Microsoft shall not, by contract or otherwise, restrict the
right of a Third Party Licensee to resell licenses to Windows
Operating System Products (including those versions of the Windows
Operating System Product offered and licensed pursuant to Section
1).
b. Equal Access. Microsoft shall afford all Covered OEM
licensees and Third-Party Licensees equal access to licensing terms;
discounts; technical, marketing, and sales support; support calls;
product information; technical information; information about future
plans; developer tools or developer support; hardware certification;
and permission to display trademarks or logos. Notwithstanding the
preceding sentence, Microsoft need not provide equal access to
technical information and information about future plans for any
bona fide joint development effort between Microsoft and a Covered
OEM with respect to confidential matters solely within the scope of
that joint effort.
c. OEM and Third-Party Licensee Flexibility in Product
Configuration. Microsoft shall not restrict (by contract or
otherwise, including but not limited to granting or withholding
consideration) an OEM or Third-Party Licensee from modifying the
BIOS, boot sequence, startup folder, smart folder (e.g., MyMusic or
MyPhotos), links, internet connection wizard, desktop, preferences,
favorites, start page, first screen, or other aspect of a Windows
Operating System Product (including any aspect of any Middleware in
that product). By way of example, and not limitation, an OEM or
Third Party Licensee may:
i. include a registration sequence to obtain subscription or
other information from the user or to provide information to the
user;
ii. display and arrange icons or menu entries of, or short-cuts
to, or otherwise feature, other products or services, regardless of
the size or shape of such icons or features, or remove or modify the
icons, folders, links, start menu entries, smart folder application
or service menu entries, favorites, or other means of featuring
Microsoft products or services;
iii. display any non-Microsoft desktop, provided that an icon or
other means of access that allows the user to access the Windows
desktop is also displayed, or display any other user interface;
iv. launch automatically any non-Microsoft Middleware, Operating
System, application or service (including any security/
authentication service), offer a non-Microsoft IAP or other start-up
sequence, or offer an option to make or make non-Microsoft
Middleware the Default Middleware; or remove the means of End-User
Access for Microsoft Middleware Products; or remove the code for
Microsoft Middleware Products; or
v. add non-Microsoft Middleware, applications or services.
3. Continued Licensing of Predecessor Version.
a. License and Support. Microsoft shall, when it makes a major
Windows Operating System Product release (such as Windows 98,
Windows 2000 Professional, Windows Me, Windows XP,
"Longhorn," "Blackcomb," and all their
successors), continue for five years after such release to license
on the same terms and conditions and support both directly and
indirectly the immediately previous Windows Operating System Product
(including any unbound versions of that Operating System licensed
under Section 1) to any OEM or Third-Party Licensee that desires
such a license. In addition, Microsoft shall continue to license and
support, both directly and indirectly, Windows 98 SE to any OEM or
Third-Party Licensee that desires such a license, on the same terms
and conditions as previously licensed, for three years from the date
of entry of this Final Judgment.
b. Royalty Rate. The net royalty rate for the immediately
previous Windows Operating System Product shall be no more than the
lowest royalty paid by the OEM or Third-Party Licensee for such
product prior to the release of the new version. The net royalty
rate for Windows 98 SE shall be no more than the lowest royalty
offered to that OEM or Third-Party Licensee for Windows 98 SE prior
to December 7, 2001.
c. Marketing Freedom. The OEM or Third-Party Licensee shall be
free to market Personal Computers in which it preinstalls such
immediately previous Windows Operating System Product or Windows 98
SE in the same manner in which it markets Personal Computers
preinstalled with other Microsoft Platform Software.
C. Mandatory Disclosure to Ensure Interoperability
The District Court found that Microsoft threatened to delay and
did delay disclosing critical technical information to Netscape that
was necessary for the Navigator browser to interoperate with the
Windows 95 Operating System. Microsoft, 84 F. Supp. 2d at
32-33. This delay in turn substantially delayed the release of
a version of the Navigator browser that was interoperable with
Windows 95, causing Netscape to be excluded from most of the crucial
holiday-selling season and giving Internet Explorer an unfair
advantage in the market. Id. at 33. Moreover, the Court of Appeals
upheld the District Court's finding that Microsoft illegally gave
preferential treatment in terms of early release of technical
information to Independent Software Vendors ("ISVs")
that agreed to certain anticompetitive conditions, including using
only Internet Explorer. Microsoft, 253 F.3d at 71.
In order to prevent future incidents in which Microsoft
middleware developers receive preferential disclosure of technical
information over rival middleware developers, thereby stifling the
competitive threat posed by rival middleware, Microsoft must provide
timely access to the technical information needed to permit rival
middleware to achieve interoperability with Microsoft software so
that such middleware may compete fairly with Microsoft middleware.
Moreover, because nascent threats to Microsoft's monopoly operating
system currently exist beyond the middleware platform resident on
the same computer, timely disclosure of technical information must
apply to facilitate not only interoperability between middleware and
the monopoly operating system on the same computer, but also
interoperability with respect to other technologies that could
provide a significant competitive platform, including network
servers, web servers and hand-held devices:
4. Disclosure of APIs, Communications Interfaces and Technical
Information.
a. Interoperability Disclosure. Microsoft shall disclose to
ISVs, IHVs, IAPs, ICPs, OEMs and Third-Party Licensees on an ongoing
basis and in a Timely Manner, in whatever media Microsoft
customarily disseminates such information to its own personnel, all
APIs, Technical Information and Communications Interfaces that
Microsoft employs to enable:
i. each Microsoft application to Interoperate with Microsoft
Platform Software installed on the same Personal Computer;
ii. each Microsoft Middleware Product to Interoperate with
Microsoft Platform Software installed on the same Personal Computer;
iii. each Microsoft software installed on one computer
(including without limitation Personal Computers, servers, Handheld
Computing Devices and set-top boxes) to Interoperate with Microsoft
Platform Software installed on another computer (including without
limitation Personal Computers, servers, Handheld Computing Devices
and set-top boxes); and
iv. each Microsoft Platform Software to Interoperate with
hardware on which it is installed.
b. Necessary Disclosure. Microsoft shall disclose to each OEM
and Third-Party Licensee all APIs, Communications Interfaces and
Technical Information necessary to permit them to fully exercise
their rights under Section 2.c.
c. Compliance. To facilitate compliance, and monitoring of
compliance, with this Section 4, Microsoft shall create a secure
facility where qualified representatives of OEMs, ISVs, IHVs, IAPs,
ICPs, and Third-Party Licensees shall be permitted to study,
interrogate and interact with the source code and any related
documentation and testing suites of Microsoft Platform Software for
the purpose of enabling their products to Interoperate effectively
with Microsoft Platform Software (including exercising any of the
options in Section 2.c).
D. Prohibitions on Certain Licensing and Other Practices
The Court of Appeals affirmed the District Court's conclusion
that Microsoft's licensing practices and/or other dealings with
various third parties, including Internet Access
[[Page 28962]]
Providers ("IAPs"), Independent Software Vendors
("ISVs"), and rival operating system manufacturers, were
similarly designed to stifle competition. Microsoft, 253 F.3d at 67.
These dealings, when coupled with other Microsoft conduct designed
to thwart or delay interoperability, confirm that Microsoft must
also be prohibited from taking certain actions that could unfairly
disadvantage its would-be competitors, whether by (a) knowingly
interfering with the performance of their software with no advance
warning, or (b) entering into certain types of contracts that could
unreasonably foreclose competing middleware providers:
5. Notification of Knowing Interference with Performance.
Microsoft shall not take any action that it knows, or reasonably
should know, will directly or indirectly, interfere with or degrade
the performance or compatibility of any non-Microsoft Middleware
when Interoperating with any Microsoft Platform Software other than
for good cause. If Microsoft takes such action it must provide
written notice to the ISV of such non-Microsoft software us soon as
Microsoft has such knowledge but in no case less than 60 days in
advance informing the ISV that Microsoft intends to take such
action. The written notice shall state Microsoft's reasons for
taking the action, and every way known to Microsoft for the ISV to
avoid or reduce interference with, or the degrading of, the
performance of the ISV's software.
6. Ban on Exclusive Dealing. Microsoft shall not enter into or
enforce any Agreement in which a third party agrees, or is offered
or granted consideration, to:
a. restrict its development, production, distribution, promotion
or use of (including its freedom to set as a default), or payment
for, any non-Microsoft product or service;
b. restrict Microsoft redistributable code from use with non-
Microsoft Platform Software;
c. distribute, promote or use any Microsoft product or service
exclusively or in a minimum percentage;
d. interfere with or degrade the performance of any non-
Microsoft product or service; or
e. in the case of an agreement with an IAP or ICP, distribute,
promote or use a Microsoft product or service in exchange for
placement with respect to any aspect of a Microsoft Platform
Product.
7. Ban on Contractual Tying. Microsoft shall not condition the
granting of a Windows Operating System Product license, or the terms
(including without limitation price) or administration of such
license (including any license granted pursuant to Section 1), on a
licensee agreeing to license, promote, distribute, or provide an
access point to, any Microsoft Middleware Product.
E. Ban on Retaliation
The Court of Appeals and the District Court catalogued a variety
of conduct by Microsoft that was designed to reward those who
acceded to Microsoft's anticompetitive aims and punish those who did
not. An effective remedy therefore must prevent Microsoft from
taking adverse or other retaliatory or discriminatory actions
against OEMs, other third-party licensees, ISVs, and others, who in
any way develop, distribute, support or promote competing products.
Microsoft must also be barred from any acts of retaliation against
any individual or any entity as a result of their participation in
any capacity in any phase of this litigation:
8. Ban on Adverse Actions for Supporting Competing Products.
Microsoft shall not take or threaten any action that directly or
indirectly adversely affects any IAP, ICP, IHV, ISV, OEM or Third-
Party Licensee (including but not limited to giving or withholding
any consideration such as licensing terms; discounts; technical,
marketing, and sales support; enabling and integration programs;
product information; technical information; information about future
plans; developer tools or developer support; hardware certification;
ability to install Synchronization Drivers; and permission to
display trademarks or logos) based directly or indirectly, in whole
or in part, on any actual or contemplated action by that IAP, ICP,
IHV, ISV, OEM or Third-Party Licensee to:
a. use, distribute, promote, support, license, develop, set as a
default, produce or sell any non-Microsoft product or service; or
b. exercise any of the options or alternatives provided under
this Final Judgment.
9. Non-retaliation for Participation in Litigation. Microsoft
shall not take or threaten to take any action adversely affecting
any individual or entity that participated in any phase of the
antitrust litigation initially styled as United States v. Microsoft,
Civil Actions No. 98-1232 and State of New York v. Microsoft,
Civil Action No. 98-1233, including but not limited to
pretrial discovery and other proceedings before the liability trial,
the liability trial, any of the remedy proceedings before this
Court, any proceeding to enforce the Final Judgment or to
investigate any alleged violation of the Final Judgment, and any
proceeding to review or otherwise consider any settlement or
resolution of this matter, based directly or indirectly, in whole or
in part, on such individual or entity's participation as a fact
witness, consultant or expert on behalf of any party, or on such
individual or entity's cooperation in any form, whether by meeting,
providing information or documents, or otherwise, with or to
"any party in this litigation, or any counsel, expert or agent
thereto or thereof.
F. Respect for OEM and End-User Choices
Microsoft engaged in various practices that were designed to
coerce OEMs into setting Internet Explorer as the "default
browser" on their computers. Microsoft, 84 F. Supp. 2d at
67-68. If competing middleware is to have a fair opportunity
to gain distribution sufficient to erode the applications barrier to
entry, OEMs and other third-party licensees, as well as end-user
consumers, should be accorded the freedom to select a default
middleware product other than a Microsoft middleware product. If
applications software developers perceive that Microsoft, through
its control of the operating system, is unfairly tilting end users
to Microsoft applications, then they will be less inclined to
develop the applications necessary to erode the entry barrier that
preserves Microsoft's monopoly:
10. Respect for User, OEM and Third-Party Licensee Choices.
Microsoft shall not, in any Windows Operating System Product
distributed six or more months after the date of entry of this Final
Judgment, make Microsoft Middleware the Default Middleware for any
functionality unless the Windows Operating System Product (i)
affords the OEM or Third-Party Licensee the ability to override
Microsoft's choice of a Default Middleware and designate other
Middleware the Default Middleware for that functionality, and (ii)
affords the OEM, Third-Party Licensee or non-Microsoft Middleware
the ability to allow the end user a reasonably accessible and
neutrally presented choice to designate other Middleware as the
Default Middleware in place of Microsoft Middleware. If the OEM,
Third-Party Licensee, or end user has designated non-Microsoft
Middleware as the Default Middleware for a functionality, the
Windows Operating System Product (including updates thereto) or
other Microsoft software or services shall not change the
designation or prompt the user to change that designation (including
by cautioning the end user against using the non-Microsoft
Middleware). However, in the event that the end user has
subsequently installed a Microsoft Middleware Product performing
that functionality, the subsequently installed Microsoft Middleware
Product may offer the end user a reasonably accessible and neutrally
presented one-time choice to make that product the Default
Middleware for that functionality.
G. Prohibition on Agreements Not to Compete
The Court of Appeals and the District Court found numerous
instances in which Microsoft entered into agreements with OEMs, ISVs
and others that stifled competition. In one particular instance,
Microsoft proposed a "special relationship" with
Netscape that, if consummated, would have effectively ended any
potential competitive threat posed by the Navigator browser to the
Windows Operating System. 84 F. Supp. 2d at 33. Given Microsoft's
past conduct, a prohibition on offering or agreeing to limit
competition with respect to Operating System Products or Middleware
Products is necessary and appropriate:
11. Agreements Limiting Competition. Microsoft shall not offer,
agree to provide, or provide any consideration to any actual or
potential Platform Software competitor in exchange for such
competitors agreeing to refrain or refraining in whole or in part
from developing, licensing, promoting or distributing any Operating
System Product or Middleware product competitive with any Windows
Operating System Product or Microsoft Middleware Product.
H. Internet Browser Open-Source License
Much of the evidence during the trial concerned Microsoft's
relentless campaign to drive down usage of Netscape's Navigator and
push people instead to its own browser, Internet Explorer. Indeed, a
substantial percentage of the acts reviewed by the Court of Appeals
involved tactics designed to "reduce[] the usage share of
rival browsers not by making Microsoft's own browser more attractive
to consumers but, rather, by
[[Page 28963]]
discouraging OEMs from distributing rival products." 253 F.3d
34, 65.
Eliminating Netscape and establishing Internet Explorer as the
dominant browser was a critical component of Microsoft's monopoly
maintenance strategy. Given that Microsoft's browser dominance was
achieved to bolster the operating system monopoly, the remedial
prescription must involve undoing that dominance to the extent it is
still possible to do so. Accordingly, the appropriate solution is to
mandate open source licensing for Internet Explorer, thereby
ensuring at a minimum that others have full access to this critical
platform and that Microsoft cannot benefit unduly from the browser
dominance that it gained as part of its unlawful monopolization of
the operating system market:
12. Internet Browser Open-Source License. Beginning three months
after the date of entry of this Final Judgment, Microsoft shall
disclose and license all source code for all Browser products and
Browser functionality. In addition, during the remaining term of
this Final Judgment, Microsoft shall be required to disclose and
make available for license, both at the time of and subsequent to
the first beta release (and in no event later than one hundred
eighty (180) days prior to its commercial distribution of any
Browser product or Browser functionality embedded in another
product), all source code for Browser products and Browser
functionality. As part of this disclosure, Microsoft shall identify,
provide reasonable explanation of, and disseminate publicly a
complete specification of all APIs, Communications Interfaces and
Technical Information relating to the Interoperation of such Browser
product(s) and/or functionality and each Microsoft Platform Software
product. The aforementioned license shall grant a royalty-free, non-
exclusive perpetual right on a non-discriminatory basis to make,
use, modify and distribute without limitation products implementing
or derived from Microsoft's source code, and a royalty-free,
nonexclusive perpetual right on a non-discriminatory basis to use
any Microsoft APIs, Communications Interfaces and Technical
Information used or called by Microsoft's Browser products or
Browser functionality not otherwise covered by this paragraph.
I. Mandatory Distribution of Java
Microsoft's destruction of the cross-platform threat posed by
Sun's Java technology was a critical element of the unlawful
monopoly maintenance violation affix-axed by the Court of Appeals.
Microsoft continues to enjoy the benefits of its unlawful conduct,
as Sun's Java technology does not provide the competitive threat
today that it posed prior to Microsoft's campaign of anticompetitive
conduct. Because an appropriate antitrust remedy decree should,
among other things, attempt "to deny to the defendant the
fruits of its statutory violation," Microsoft, 253 F.3d at 103
(quoting United States v. United Shoe Mach. Corp., 391 U. S. 244,
250 (1968)), Microsoft must be required to distribute Java with its
platform soft-ware (i.e., its operating systems and Internet
Explorer browser), thereby ensuring that Java receives the
widespread distribution that it could have had absent Microsoft's
unlawful behavior, and increasing the likelihood that Java can serve
as a platform to reduce the applications barrier to entry:
13. Java Distribution. For a period of 10 years from the date of
entry of the Final Judgment, Microsoft shall distribute free of
charge, in binary form, with all copies of its Windows Operating
System Product and Internet Browser (including significant upgrades)
a competitively performing Windows-compatible version of the Java
runtime environment (including Java Virtual Machine and class
libraries) compliant with the latest Sun Microsystems Technology
Compatibility Kit as delivered to Microsoft at least 90 days prior
to Microsoft's commercial release of any such Windows Operating
System Product. Microsoft must publicly announce the commercial
release of its Windows Operating System Products (including
significant upgrades) at least 120 days in advance.
J. Cross-Platform Porting of Office
The applications barrier to entry can be eroded only when
consumers can obtain significant software application functionality
from their computers through means other than Microsoft's monopoly
operating system. Cross-platform software, such as middleware, would
have permitted the porting of numerous important applications to
operating systems other than Microsoft's Windows. To begin to erode
the applications barrier to entry that was enhanced by Microsoft's
unlawful behavior, and thereby begin to "pry open to
competition a market that has been closed by defendants"
illegal restraints," International Salt Co. v. United States,
332 U.S. 392, 401 (1947), Microsoft should be required to auction to
a third party the right to port Microsoft Office to competing
operating systems:
14. Mandatory Continued Porting of Office to Macintosh and
Mandatory Licensing of Office for the Purpose of Porting to Other
Operating Systems.
a. Continued Porting of Office to Macintosh. Microsoft shall
port each new major release of Office to the Macintosh Operating
System within 60 days of the date that such version becomes
commercially available for use with a Windows Operating System
Product, pursuant to the same terms and conditions under which it
currently ports Office to Macintosh. The ported version shall
operate at least as effectively as the previous ported version.
b. Auction of Licenses To Port. Within 60 days of entry of this
Final Judgment, Microsoft shall offer for sale, at an auction
administered by an independent third party, licenses to sell Office
for use on Operating Systems other than Windows, without further
royalty beyond the auction price. In conjunction with these
licenses, Microsoft shall supply to the winning bidders all
information and tools required to port Office to other Operating
Systems, including but not limited to all compatibility testing
suites used by Microsoft to port Office to the Macintosh Operating
System, the source code for Office for Windows and Office for
Macintosh (to be used for the purpose of such porting only), all
technical information required to port Office to other Operating
Systems (including but not limited to file formats), and all parts
of the source code of the Windows Operating System Product necessary
for the porting. At such auction, Microsoft shall offer" to
sell at least three such licenses, as described in this Section
14.b, to three third parties not affiliated with either Microsoft or
each other. The terms of such licenses shall become effective (and
the relevant source code made available to the licensee) immediately
upon their sale.
c. Provision of Necessary Information. As soon as practicable,
but in no case later than 60 days prior to the date each new version
of Office becomes commercially available for use with a Windows
Operating System Product, Microsoft shall provide, to holders of the
licenses issued pursuant to Section 14.b, the compatibility testing
suites and source code necessary to enable porting of the new
version of Office to other Operating Systems. The terms of such
licenses shall become effective (and the relevant source code made
available to the licensee) no later than the date on which the new
version of Office becomes commercially available.
K. Intellectual Property Rights
For many of the provisions of the remedy to be effective,
including but not limited to the disclosure provisions contained in
Section 4, various 0EMs, ISVs and others must necessarily acquire
certain intellectual property rights from Microsoft. Accordingly, it
is appropriate for Microsoft to license to such third parties those
intellectual property rights that are necessary for the effective
implementation of this remedy proposal:
15. Necessary Intellectual Property License. Microsoft shall,
within 20 days of request, license to IAPs, ICPs, IHV's, ISVs, OEMs
and Third-Party Licensees all intellectual property rights owned or
licensable by Microsoft that are required to exercise any of the
options or alternatives provided or available to them under this
Final Judgment (including without limitation enabling their
product(s) to Interoperate effectively with Microsoft Platform
Software), on the basis that:
a. the license shall be on a royalty-free basis and all other
terms shall be reasonable and non-discriminatory;
b. the license shall not be conditional on the use of any
Microsoft software, API, Communications Interface, Technical
Information or service;
c. the scope of any such license (and the intellectual property
rights licensed thereunder) must be as broad as necessary to ensure
that the licensee is able to exercise the options or alternatives
provided under this Final Judgment but shall not provide any
unnecessary rights (e.g., an IAP's, ICP's, IHV's, ISV's, and OEM's
option to promote Non-Microsoft Middleware shall not confer any
rights to any Microsoft intellectual property rights infringed by
that Non-Microsoft Middleware); and
d. the terms of any license granted under this section shall be
in all respects consistent with the terms of this Final Judgment.
L. Adherence to Industry Standards
A common tactic in Microsoft's unlawful monopoly maintenance was
the limitation on interoperability with potential competitors. This
has been accomplished, on occasion, by
[[Page 28964]]
co-opting and/or undermining the industry standards for software
developers. Microsoft also purposely deceived software developers
into believing that the Microsoft Java programming tools had cross-
platform capability with Sun-based Java:
16. Adherence to Industry Standards.
a. Compliance With Standards. If Microsoft publicly claims that
any of its products are compliant with any technical standard
("Standard9 that has been approved by, or has been submitted
to and is under consideration by, any organization or group that
sets standards (a "Standard-Setting Body"), it shall
comply with that Standard. If Microsoft chooses to extend or modify
the implementation of that Standard, Microsoft shall continue fully
to implement the Standard (as that Standard may be modified from
time to time by the Standard-Setting Body). Microsoft shall continue
to implement the Standard until: (i) Microsoft publicly disclaims
that it implements that Standard; or (ii) the Standard expires or is
rescinded by the standard-setting body. However, Microsoft shall not
be permitted to require third parties to use or adopt Microsoft's
version of the Standard. To the extent Microsoft develops a
proprietary version of a Standard, Microsoft's Operating Systems
must continue to support non-proprietary, industry versions of such
Standard.
b. Compliance With De Facto Standards. As to any Standard with
which Microsoft is required to comply under the preceding paragraph,
to the extent that industry custom and practice recognizes
compliance with the Standard to include variations from the formal
definition of that Standard (a "De Facto Standard"),
Microsoft may discharge its obligations under this provision by
complying with the de facto Standard provided that: (i) before doing
so, Microsoft notifies Plaintiffs and the Special Master in writing
of its intention to do so, and describes with reasonable
particularity the variations included in the De Facto Standard; and
(ii) Plaintiffs do not, within 30 days of receipt of such notice,
object to Microsoft's intention to comply with the De Facto
Standard.
M. Internal Compliance
Vigilant compliance is absolutely critical to any remedial
program's effectiveness. The first prong of such compliance must be
an active program of internal controls to ensure compliance,
including the appointment of an internal January 28, 2002
Ms. Renata Hesse
Antitrust Division
U.S. Department of Justice
601 D Street, N. W., Suite 1200
Washington, D. C. 20530
Re: United States v. Microsoft Corporation, Civil Action No.
98-1232 (CKK)
State of New York. ex tel. Attorney General Eliot Spitzer, et al. v.
Microsoft Corporation, Civil
Action No. 98-1233 (CKK)
Dear Ms. Hesse:
I am writing on behalf of the states of California, Connecticut,
Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah, West Virginia
and the District of Columbia. These jurisdictions continue to
litigate against Microsoft Corporation to seek a remedies decree
that will "'unfetter [the] market from anticompetitive
conduct"; "terminate the illegal monopoly, deny to the
defendant the fruits of its statutory violation, and ensure that
there remain no practices likely to result in monopolization in the
future" U.S. v. Microsoft, 253 F.3d 34, 103 (DC Cir. 2001)
(quoting Ford Motor Co. v. United States, 405 U.S. 562, 577 (1972)
and United States v. United Shoe Mach. Corp., 391 U.S. 244,250
(1968)). Although the litigating jurisdictions will have the
opportunity to present evidence and argument directly to the. court
concerning appropriate remedies in this case, we have produced or
received three documents in the course of our litigation that we
believe are especially pertinent to the record of the Tunney Act
proceeding. Without waiving any rights to a hearing on our proposed
decree, these documents arc:
1. Excerpt from Plaintiff Litigating States" Answers to
Interrogatories from Microsoft Corporation: Attached as Exhibit A
it; the Litigating States" answer to an interogatory from
defendant Microsoft Corporation detailing the principal inadequacies
of the proposed consent decree. (Please note that further or
additional problems may be revealed by discovery so this list should
not be considered final.);
2. Plaintiff Litigating States" Re??ial Proposals:
Attached as Exhibit B is rite Litigating Stales" remedial
proposal filed with the trial court on December 7, 2001. For the
reasons stated in this document, the Litigating States conclude that
their proposed remedy is necessary to address the illegal conduct of
Microsoft Corporation; and
3. Defendant-Microsoft's Responses to the Litigating States'
Requests for Admissions: Attached as Exhibit C ate the responses of
defendant Microsoft Corporation to the Litigating States' requests
for admissions. In this document, Microsoft repeatedly refuses to
admit or sidesteps characterizations by the Department of Justice of
the proposed consent decree contained in the Competitive Impact
Statement (CIS). Microsoft's objection that such admissions require
a "legal conclusion" is troubling. While this could mean
that there was never a meeting of the minds among the parties, it
suggests, at a minimum, that the decree itself is ambiguous. As a
result, enforcement will. in all likelihood. be delayed as the
parties wrangle over the meaning of their agreement in an industry
in which product cycles are extremely short and in which enforcement
must be swirl in order to be effective.
For the foregoing reasons, the litigating jurisdictions request
that the Department of Justice withdraw its consent to the Revised
Proposed Final Judgment because of its ambiguity and failure to
adequately address the illegal conduct of Microsoft. If the
Department chooses not to do this, the litigating jurisdictions
request that the Revised Proposed Final Judgment be disapproved by
the court because it fails to meet the standard in 15 U.S.C. section
16(e).
Respectfully submitted,
Tom Greene
Senior Assistant Attorney General
California Department of Justice
FOR THE LITIGATING STATES
Exhibit A
SUPPLEMENTAL RESPONSES TO INTERROGATORIES
1. State in the most specific and detailed manner possible each
and every respect in which you claim that the Revised Proposed Final
Judgment is deficient, and explain why. RESPONSE: The Plaintiff
Litigating States object to this Interrogatory as a contention
interrogatory that is premature and more appropriately answered at a
later time, see Fed. R. Civ. P. 33(c), and therefore the Plaintiff
Litigating States reserve the right to amend, supplement or modify
the response to this Interrogatory to incorporate information gained
through discovery. Subject to and without waiving this objection or
the General Objections, the Plaintiff Litigating States respond
that, as highlighted in Plaintiff Litigating States" Remedial
Proposals filed on December 7, 2001, the Revised Proposed Final
Judgment (the "RPFJ") is deficient in many respects,
including without limitation the following:
(1) the RPFJ does not require Microsoft to license an"
unbundled version of Windows, even though (a) the Court of Appeals
found that Microsoft's commingling of middleware code with its
monopoly operating system was anticompetitive (see United States v.
Microsoft Corp., 253 F.3d 34, 66 (DC Cir.)
("Microsoft"), cert. denied, 122 S. Ct. 350 (2001), and
(b) such a remedy would enable competing middleware developers to
gain access to the OEM channel of distribution, recognized by
Microsoft, and the District Court, as one of the two most important
distribution channels (United States v. Microsoft Corp., 84 F. Supp.
2d 9, 46 (D.DC 1999) ("Microsoft Findings of Fact'));
(2) the RPFJ provides for overly broad exceptions to the OEM
uniform licensing requirement, including without limitation (a)
market development allowances, and (b) consideration tied to the
level of an OEM's promotion or distribution of Microsoft's products
or services, even though the Court of Appeals and District Court
found Microsoft's discrimination between OEMs in its contractual
relationships a critical lever in several types of anticompetitive
conduct (see Microsoft, 253 F.3d at 59-64; Microsoft Findings
of Fact, 84 F. Supp. 2d at 66-68);
(3) the RPFJ does not adequately provide for timely and broad
disclosure of interfaces and other technical information to third
parties, despite the fact that (a) the Court of Appeals found that
Microsoft illegally used the discriminatory disclosure of technical
information to ISVs as an incentive to obtain their agreement to
certain anticompetitive conditions, including curtailment of the use
and promotion of Internet Explorer (see Microsoft, 253 F.3d at
71-79.; see also Microsoft Findings of Fact, 84 F. Supp. 2d at
93-94), and (b) the District Court found that Microsoft
deliberately withheld technical information necessary to ensure the
interoperation of a rival platform (Netscape's Navigator) and the
Windows operating system (see Microsoft Findings of Fact, 84 F.
Supp. 2d at 33-34) and thereby hampered the rise of this
threat to Microsoft's monopoly;
(4) the RPFJ limits the disclosure of interfaces and technical
information to those that concern the interoperation of only
[[Page 28965]]
Microsoft middleware and its Windows operating system, even though
(a) there are many other currently existing nascent threats to
Microsoft's operating system monopoly such as alternative platforms
like network servers, web servers, handheld computing devices and
set-top boxes, (b) disclosure of information relating to
interoperation between these products is as important as information
relating to interoperation with Windows, and (c) an antitrust remedy
must be forward looking to prevent a recurrence of analogous harm
and not simply seek to remedy specific past misconduct (see Nat'l
Soc'y of Pro??l Engineers v. United States, 435 U.S. 679, 697
(1978));
(5) the RPFJ mandates the disclosure of communications protocols
only in the context of client-server interoperation, even though the
disclosure of such protocols is necessary to permit third parties to
develop other nascent threats to Microsoft's operating system
monopoly that communicate with personal computers such as widely
interoperable handheld devices and middleware installed thereon;
(6) the RPFJ delays the impact of the disclosure provisions for
up to nine months in the case of communications protocols that
concern the interoperation of client personal computers and servers,
and twelve months in the case of interfaces relating to the
interoperation of middleware and operating systems--given the
necessity of prompt disclosure in the light of the pace of change in
the computer industry, such delays are simply unjustifiable;
(7) the RPFJ delays the required disclosure of middleware/
operating system interoperability interfaces, in the case of new
releases of Microsoft operating systems, until Microsoft releases a
beta test version of the new release to 150,000 or more beta
testers--this test is not only subject to manipulation to avoid
timely disclosure but on its face means that disclosure will not be
required until very close to the release date of the new product,
thereby disadvantaging Microsoft's rivals;
(8) the RPFJ does not require disclosure of the technical
information required by third parties to make full use of the
disclosed interfaces and protocols;
(9) the RPFJ permits only members of a three person
"Technical Committee" (one of whose members is appointed
by Microsoft) to have access to Microsoft's source code, even though
third parties wishing to make meaningful use of Microsoft's
interoperability disclosures need direct access to source code
through some means, such as a secure facility at which they can view
and interrogate such code;
(10) the RPFJ imposes unjustifiable qualifications in the
provisions that appear to provide for flexibility in product
configuration (e.g., (i) Microsoft can limit the addition of icons,
shortcuts and menu entries for non-Microsoft products to only those
places where Microsoft has decided to promote a Microsoft product
with similar functionality (thus blocking such additions if
Microsoft does not make that decision and/or does not offer a
competing product), and (ii) the automatic launching of competing
software may be prohibited if such software displays a user
interface that is not of a similar size and shape to the interface
displayed by the equivalent Microsoft software or a Microsoft
product would not otherwise launch automatically);
(11) the RPFJ does not adequately require Microsoft to respect
OEM and end-user preferences for non-Microsoft software because the
provisions which appear to have that aim are encumbered with
unjustifiable qualifications (e.g., (i) the ability to designate a
non-Microsoft middleware product to be invoked in place of a
Microsoft middleware product is available only where the Microsoft
middleware would be launched in a separate Window and would display
all of the user interface elements or a trademark; and (ii) the
restriction on Microsoft asking an end user to alter an OEM's
product configuration lasts for only fourteen days and there is no
restriction on the number of such requests Microsoft may make
thereafter);
(12) the RPFJ does not require Microsoft to license previous
versions of Windows, even though (a) the guaranteed existence of
previous versions of Windows encourages the creation of middleware
threats to Microsoft's operating system monopoly by giving software
developers confidence that the operating system with which their
middleware would be designed to interact will be available to end
users for a reasonable length of time, and (b) the District Court
found that Microsoft used its control of information regarding a new
release of Windows to thwart the growing popularity of a threat to
its operating system monopoly (see Microsoft Findings of Fact, 84 F.
Supp. 2d at 3334), and efforts to use such leverage would be less
effective if the previous version were still to be available;
(13) the RPFJ does not require Microsoft to notify third parties
regarding its knowing interference with non-Microsoft middleware,
despite the fact that (a) the Court of Appeals found that one aspect
of Microsoft's anticompetitive conduct regarding the middleware
threat of Sun's Java was to deceive software developers into writing
programs using Microsoft Java development tools that did not
interact with Sun's Virtual Java Machine (see Microsoft, 253 F.3d at
76-77), (b) the District Court found that Microsoft made
technical changes to Windows and Internet Explorer to ensure that
the interoperation of Windows and a non-Microsoft browser was a
"jolting experience" for users (see Microsoft Findings
of Fact, 84 F. Supp. 2d at 50), and (c) the Distric Court found that
Microsoft deliberately withheld from Netscape vital information
required to ensure the interoperability of Navigator and a new
version of Microsoft's Windows operating system (see Microsoft
Findings of Fact, 84 F. Supp. 2d at 33-34)--in other
words the remedy fails to curb Microsoft's anticompetitive tendency
to hinder the interaction of non-Microsoft products with Microsoft-
sponsored products;
(14) the RPFJ does not adequately restrict Microsoft's exclusive
arrangements, despite the Court of Appeals condemnation of such
practices as anticompetitive (see Microsoft, 253 F.3d at
67--74), because, for example, the provisions that appear to be
aimed at such practices are subject to overbroad and unjustifiable
qualifications (e.g., (i) a joint venture exception that does not
define with Any specificity the minimum criteria for the existence
of such an arrangement and thus appears subject to manipulation;
(ii) an exception where the third party represents that it could
devote greater resources to non-Microsoft products than to Microsoft
products, whether or not it actually does so; and (iii) an exception
for any agreement under which Microsoft licenses intellectual
property from a third party, no matter how anticompetitive the other
terms of such agreement);
(15) the RPFJ does not prohibit contractual tying of Microsoft
middleware to Microsoft's Windows operating system, even though (a)
such arrangements could unreasonably foreclose competing middleware
providers, (b) such a remedy would help to prevent Microsoft's
ability to further reap benefits from its illegally maintained
operating system monopoly, and (c) the Court of Appeals found that
Microsoft manipulated contractual relationships with various third
parties to stifle middleware threats to its operating system
monopoly (see Microsoft, 253 F.3d at 59-64, 69-72,
75-76);
(16) the RPFJ does not adequately protect against retaliation by
Microsoft (e.g., the prohibition on retaliation against OEMs is
limited to particular types of actions, instead of broadly banning
any adverse action, and lists OEM activities only in connection with
middleware and operating systems, instead of referring to any
activities relating to products or services that compete with
Microsoft);
(17) the RPFJ does not effectively restrict agreements limiting
competition, despite the Court of Appeals clear holding that such
arrangements were anticompetitive (see Microsoft 253 F.3d at
71-72), because, for example, (a) the provision apparently
aimed at restricting such conduct is subject to an exception where
an ISV has agreed to use, distribute or promote Microsoft software,
even though such an exception could be construed as effectively
nullifying the applicable restriction, (b) the restriction does not
apply to agreements with any entity other than an ISV (i.e.,
presumably such agreements with an OEM, ICP, IAP, IHV or any other
third party would not be prohibited), and (c) the restriction only
applies to agreements relating to Windows operating system products
(i.e., an exclusive dealing arrangement that related to other
Microsoft platform software would not be prohibited);
(18) the RPFJ does not address specifically the status of
Microsoft's Internet browser, Internet Explorer, which benefited
directly from much of Microsoft's anticompetitive conduct (see,
e.g., Microsoft, 253 F.3d at 59-74);
(19) the RPFJ does not address specifically Microsoft's
anticompetitive conduct aimed at elimination of Sun's Java as a
threat to its operating system monopoly (see, e.g., Microsoft, 9.53
F.3d at 74-78);
(20) the RPFJ does not require Microsoft to port its Office
suite of applications to Apple's Macintosh, even though the Court of
Appeals found that Microsoft's threat to terminate
[[Page 28966]]
such support for Office had been deliberately used as a
"club" to force Apple to enter into an anticompetitive
exclusive dealing arrangement (see Microsoft, 253 F.3d at
72-74);
(21) the RPFJ does not provide a mechanism to ensure that Office
is ported to ether operating systems, despite the Court of Appeals'
recognition of the importance of this suite of applications and
acknowledgment that the absence of Office on a rival operating
system, Mac OS, would eliminate such competition (see Microsoft, 253
F.3d at 72-73), and the fact that ensuring the availability of
Office on other platforms is likely to weaken the applications
barrier to entry and enhance the potential of other platforms to
compete with Microsoft's monopoly operating system;
(22) the RPFJ requires licensees of required Microsoft
intellectual property to pay for such license and to cross license
their intellectual property to Microsoft, even though the premise of
this remedy is that such intellectual property is required to allow
third parties to exercise their rights under the final
judgment--it is unjustifiable for Microsoft to be paid and
benefit from cross-licensing rights simply, for ensuring the
efficacy of remedies imposed as a result of its illegal conduct;
(23) the RPFJ does not address Microsoft's undermining of
industry standards, despite the Court of Appeals holding that
Microsoft sabotaged the Java standard by deceiving software
developers into believing that the Microsoft Java programming tools
had cross-platform capability with Sun-based Java (see Microsoft,
253 F.3d at 75-76);
(24) the RPFJ does not require Microsoft to provide information
about transactions that are not subject to the filing requirements
of the Hart-Scott-Rodino Act, even though such transactions could be
used by Microsoft to maintain its operating system monopoly;
(25) the RPFJ does not protect from retaliation individuals and
entities that participate in this litigation, despite the District
Court and Court of Appeals findings that Microsoft is no stranger to
retaliation and threats when it does not get its own way (e.g., (i)
retaliation against IBM (see Microsoft Findings of Fact, 84 F. Supp.
2d at 40); (ii) threats against Apple (see Microsoft, 253 F.3d at
72-74); and (iii) threats against Intel (see Microsoft, 253
F.3d at 77-78);
(26) the RPFJ contains other unjustifiable exceptions and carve-
outs that hobble the provisions they qualify (e.g., (i) the
restriction on retaliation against, and discriminatory treatment of,
OEMs that promote non-Microsoft products is qualified by an
exception that permits Microsoft to provide additional consideration
to OEMs that, inter alia, promote Microsoft products; (ii)
Microsoft's disclosure obligations may be construed as not extending
to areas of activity that Microsoft has identified as important
enough to its monopoly operating system to include in its latest
Windows operating system release, such as authentication and
security/encryption systems and digital rights management; and (iii)
Microsoft's disclosure obligations relating to certain matters such
as authentication systems are subject to Microsoft's subjective
determination as to whether, inter alia, the recipient has a
"reasonable" business need and a "viable"
business);
(27) the RPFJ contains ineffective compliance provisions (e.g.,
(i) there is no independent office or body such as a special master
to assist the Court with compliance and enforcement; (ii) there is
no annual compliance certification by Microsoft; (iii) there is no
periodic reporting to the Court by an independent body regarding
Microsoft's compliance; (iv) there is no mandatory document
retention provision; (v) there is no mechanism for Microsoft
employees to submit evidence of violations on a confidential basis
to a third party; and (vi) no work product, findings or
recommendations of the body empowered to consider complaints against
Microsoft may be used in court, necessitating a duplication of
effort if a complaint is not adequately dealt with on an extra-
judicial basis);
(28) the RPFJ does not provide for a sanctions regime making
clear the potential consequences to Microsoft of non-compliance and
thus providing a strong incentive to comply;
(29) the RPFJ's middleware definitions are drawn too narrowly,
excluding from protection competitors of Microsoft in critical
middleware markets and excluding from the restrictions of the
judgment important Microsoft products--for example, (a).
software cannot qualify as a "Non-Microsoft Middleware
Product" unless at least one million copies were distributed
in the U.S. in the previous year, meaning that by definition nascent
or developing middleware threats receive no protection under the
user configuration flexibility remedy, (b) certain important
software categories such as web-based software and digital imaging
software are not present in any of the middleware definitions, (c)
software developed in the future by Microsoft that does not perform
a pre-identified function (e.g., Internet browsing) but that does
exhibit the characteristics of middleware, such as API exposure,
would be excluded from the definition of "Microsoft Middleware
Product" if it is not trademarked (e.g., Microsoft's photo
editing software), had not been distributed by Microsoft separately
from an operating system product (e.g., many of the new features on
Windows XP) or was not similar to a competitor's product;
(30) the RPFJ's definition of "Windows Operating System
Product" leaves Microsoft to determine its scope, a freedom
that could potentially eviscerate major portions of the judgment;
(31) the RPFJ does not define certain key terms (e.g.,
"Interoperate," "Bind," "Web-Based
Software") and narrowly defines other key terms (e.g.,
"Communications Protocol"); and
(32) the RPFJ's term is limited initially to five
years--given the scope of Microsoft's violations and the time
needed to restore effective competition, this term is too short.
Exhibit B
COMPLIANCE OFFICER AND AN ANNUAL CERTIFICATION BY MICROSOFT THAT IT
IS ADHERING TO THE REQUIREMENTS OF THE FINAL JUDGMENT:
17. Internal Antitrust Compliance. This section shall remain in
effect throughout the term of this Final Judgment.
a. Compliance Committee. Within 30 days of entry of this Final
Judgment, Microsoft shall establish a compliance committee (the
"Compliance Committee9 of its Board of Directors, consisting
of at least three members of the Board of Directors who are not
present or former employees of Microsoft.
b. Compliance Officer. The Compliance Committee shall hire a
Compliance Officer, who shall report directly to the Compliance
Committee and to the Chief Executive Officer of Microsoft. The
Compliance Officer shall be responsible for development and
supervision of Microsoft's internal programs to ensure compliance
with the antitrust laws and this Final Judgment. Microsoft shall
give the Compliance Officer all necessary authority and resources to
discharge the responsibilities listed herein.
c. Duties of Compliance Officer. The Compliance Officer shall:
i. within 60 days after entry of this Final Judgment, arrange
for delivery to each Microsoft officer, director, and Manager, and
each platform software developer and employee involved in relations
with OEMs, ISVs, IHVs, or Third-Party Licensees, a copy of this
Final Judgment together with additional informational materials
describing the conduct prohibited and required by this Final
Judgment;
ii. arrange for delivery in a timely manner of a copy of this
Final Judgment and such additional informational materials to any
person who succeeds to a position described in subsection c.i above;
iii. ensure that those persons described in subsection c.i above
are annually briefed on the meaning and requirements of this Final
Judgment and the United States antitrust laws and advising them that
Microsoft's legal advisors are available to confer with them
regarding any question concerning compliance with this Final
Judgment or under the United States antitrust laws;
iv. obtain from each person described in subsection c.i above,
within 30 days of entry of this Final Judgment and annually
thereafter, and for each person thereafter succeeding to such a
position within 5 days of such succession and annually thereafter, a
written certification that he or she:
(1) has read, understands, and agrees to abide by the terms of,
and has to their knowledge not violated, this Final Judgment; and
(2) has been advised and understands that his or her failure to
comply with this Final Judgment may result in conviction for
criminal contempt of court;
v. maintain a record of persons to whom this Final Judgment has
been distributed and from whom, pursuant to subsection c.iv above,
such certifications have been obtained;
vi. establish and maintain a means by which employees can report
to the Special Master potential violations of this Final Judgment or
the antitrust laws on a confidential basis;
vii. on an annual basis, certify to the Plaintiffs and the
Special Master that Microsoft is fully compliant with this Final
Judgment; and
[[Page 28967]]
viii. report immediately to the Plaintiffs and the Special
Master any credible evidence of violation of this Final Judgment.
d. Removal of Compliance Officer. The Compliance Officer may be
removed only by the Chief Executive Officer with the concurrence of
the Compliance-Committee.
e. Retention of Communications and Relevant Documentation,
Microsoft shall, with the supervision of the Compliance Officer,
maintain for a period of at least four years (i) the e-mail, instant
messages, and written correspondences of all Microsoft officers,
directors and managers engaged in software development, marketing,
sales, and developer relations related to Platform Software, and
(ii) all documentation necessary or useful to facilitate compliance
with this Final Judgment, including without limitation the
calculation of development costs in Section 1.
f. Compliance Inspection. For purposes of determining or
securing implementation of or compliance with this Final Judgment,
or determining whether this Final Judgment should be modified or
vacated, and subject to any legally recognized privilege, from time
to time:
i. Duly authorized representatives of a Plaintiff, upon the
written request of the Attorney General of such Plaintiff, and on
reasonable notice to Microsoft made to its principal office, shall
be permitted:
(1) access during office hours to inspect and copy (or, at the
option of the duly authorized representatives, to demand Microsoft
provide copies of) all books, ledgers, accounts, correspondence,
memoranda, source code, and other records and documents in the
possession or under the control of Microsoft (which may have counsel
present), relating to the matters contained in this Final Judgment;
and
(2) subject to the reasonable convenience of Microsoft and
without restraint or interference from it, to interview, either
informally or on the record, its officers, employees, and agents,
who may have their individual counsel present, regarding any such
matters.
ii. Upon the written request of the Attorney General of a
Plaintiff, made to Microsoft at its principal offices, Microsoft
shall submit such written reports, under oath if requested, as may
be requested with respect to any matter contained in this Final
Judgment.
iii. No information or documents obtained by the means provided
in this section shall be divulged by a representative of a Plaintiff
to any person other than a duly authorized representative of a
Plaintiff, except in the course of legal proceedings to which the
Plaintiff is a party (including grand jury proceedings), or for the
purpose of securing compliance with this Final Judgment, of as
otherwise required by law.
iv. If at the time information or documents are furnished by
Microsoft to a Plaintiff, Microsoft represents and identifies in
writing the material in any such information or documents to which a
claim of protection may be asserted under Rule 26(c)(7) of the
Federal Rules of Civil Procedure, and Microsoft marks each pertinent
page of such material, "Subject to claim of protection under
Rule 26(c)(7) of the Federal Rules of Civil Procedure," then
10 days notice shall be given by a Plaintiff to Microsoft prior to
divulging such material in any legal proceeding (other than a grand
jury proceeding) to which Microsoft is not a party.
N. The Special Master
In addition to internal oversight by Microsoft, effective
implementation of this remedy also requires a Special Master
empowered and equipped to conduct prompt investigations of any
complaints and to propose resolutions within the short time frame
necessary to be meaningful in such a fast-moving market. Such a
Special Master can ensure timely resolution of any disputes and
minimize any demand on judicial resources.
18. Special Master. Pursuant to Rule 53 of the Federal Rules of
Civil Procedure ("Rule 53") the Court will appoint a
special master (the "Special Master") to monitor
Microsoft's obligations under the Final Judgment and to aid the
Court in enforcing the Final Judgment.
a. Appointment. The Court will select a Special Master. Ten days
after the Plaintiffs and Microsoft are notified of the selection,
the Plaintiffs and Microsoft may file with the Court their written
objections to the proposed Special Master. Any party who does not
object within ten (10) days shall be deemed to have consented to the
Court's selection. The terms of this subsection shall apply to any
replacement Special Master chosen by the Court.
b. Powers. The Special Master has and shall exercise the power
and authority to monitor Microsoft's compliance with this Final
Judgment, including taking all acts and measures he or she deems
necessary or proper for the efficient performance of the Special
Master's duties and responsibilities as set forth in this Final
Judgment.
c. Internal Compliance. The Special Master, and those acting
under his or her authority, shall have access to all information,
personnel, systems, equipment, premises and facilities the Special
Master considers relevant to the performance of his or her duties.
Microsoft shall develop such financial or other information as the
Special Master may request and shall cooperate with the Special
Master and facilitate the Special Master's ability to perform his or
her responsibilities and to monitor Microsoft's compliance with this
Final Judgment. To facilitate Microsoft's compliance, Microsoft will
create a full-time position entitled "Special Master Liaison
Officer" with primary responsibility for ensuring full
cooperation with the Special Master, including without limitation
arranging for timely access to personnel, information and
facilities. The Special Master Liaison Officer shall be a senior
Microsoft executive and shall report directly to the Chief Executive
Officer of Microsoft. Microsoft shall give the Special Master
Liaison Officer all necessary authority and resources to discharge
his or her responsibilities under this subsection. If the Special
Master determines that Microsoft is inhibiting the Special Master in
any of its Rule 53 functions, the Special Master may file with the
Court, sua sponte, a report of non-compliance.
d. Advisory Committee; Staff and Expenses. The Court, with the
assistance of the Special Master, shall appoint an advisory
committee of 3 individuals (the "Advisory Committee9 to assist
the Special Master on technical, economic, business and/or other
areas of expertise. Objections to the Court's selection shall be
lodged in the manner noted in Section 18.a. Microsoft shall
indemnify each Advisory Committee member and hold him or her
harmless against any losses, claims, damages, liabilities or
expenses arising out of, or in connection with, the performance of
the Advisory Committee's functions, except to the extent that such
liabilities, losses, damages, claims, or expenses result from gross
negligence or willful acts by an Advisory Committee member.
The Special Master, upon approval from the Court, may hire such
additional individuals as a permanent staff or on an advisory basis
to assist the Special Master. The Special Master shall submit to the
Court a monthly accounting of the Special Master, his or her staff
and the Advisory Committee's services and expenses. Upon approval
from the Court, Microsoft will remit payment to the Special Master.
e. Periodic Reports. The Special Master shall apprise the Court,
in writing (with copies to the Plaintiffs), whether Microsoft is in
compliance with this Final Judgment thirty (30) days after the date
of his or her appointment and every one hundred eighty (180) days
thereafter until the Final Judgment terminates.
f. Actions and Proceedings.
i. Any person who has reason to believe that Microsoft is not
complying with the Final Judgment may submit a complaint to the
Special Master. The Special Master shall promptly provide a copy of
the complaint to a State chosen by the Plaintiffs to serve as the
recipient of such complaints.
ii. To facilitate the communication of complaints by third
parties, the Special Master Liaison Officer shall place on
Microsoft's Internet website, in a manner acceptable to the Special
Master, the procedures for submitting complaints.
iii. The Special Master may preserve the anonymity of any third
party complainant where he or she deems it appropriate to do so upon
the request of the Plaintiffs or the third party, or in his or her
discretion.
iv. Within fourteen (14) days of the receipt of the complaint,
the Special Master shall determine if an investigation is warranted.
In making this decision, the Special Master may use any of its Rule
53 powers. If the Special Master determines that an investigation is
not warranted, the Special Master will issue a statement noting his
or her decision to the complainant, Microsoft and each Plaintiff.
v. If the Special Master decides to pursue a formal
investigation, the Special Master must notify Microsoft, each
Plaintiff and the complainant of" (i) its decision to
investigate; (ii) the conduct underlying the potential violation;
and (iii) the provision of the Final Judgment at issue. The Special
Master will furnish a copy of this notice to the Court.
vi. Within fourteen (14) days of receiving the notice of the
Special Master's investigation, Microsoft and the complainant shall
file with the Special Master, and copy to the Plaintiffs, a
response, including any
[[Page 28968]]
documentation they wish the Special Master to consider.
vii. Upon receipt of the responses, the Special Master shall
schedule a hearing within twenty-one (21) days. The Special Master
may exercise all powers available under Rule 53 (including without
limitation requiring the production of documents and examining
witnesses). The Plaintiffs shall have standing to participate in
each such hearing.
viii. Within fifteen (15) days from the conclusion of the
hearing, the Special Master will file with the Court a report
containing its factual findings and a proposed order pursuant to
Rule 53(e)(1).
ix. Pursuant to the requirements of Rule 53(e)(2), Microsoft and
the complainant may object to the Special Master's report.
g. Power Retained by Court. In addition to acting on the
recommendations of the Special Master, the Court may institute its
own proceedings and modify or amend the Final Judgment as necessary
either sua sponte or at the request of the Plaintiffs.
h. Admissibility in Subsequent Proceedings. (i) Any findings or
recommendations by the Special Master and work product of the
Special Master and the Advisory Committee are not prohibited
hereunder from submission or admission in any subsequent action or
proceeding whether before this Court or elsewhere regarding this
Final Judgment, and [ii) the Special Master and any person who
provided assistance thereto (including without limitation any member
of the Special Master Advisory Committee) is not prohibited
hereunder from testifying in any such action or proceeding.
O. Consequences of a Pattern of Non-Compliance. In a market in
which timing is so important, it is all too likely that delaying
one's rivals by begrudging compliance with the obligations of the
Final Judgment punctuated by occasional acts of outright non-
compliance--could well be profit-maximizing behavior. One
prudent and potentially highly effective means of avoiding this
situation is to make clear in advance that a pattern of significant,
material non-compliance will lead to serious consequences, and
thereby reduce the likelihood that such non-compliance will ever be
an issue:
19. Orders and Sanctions.
a. Orders. The Court may act at any time to issue orders or
directions for the construction or carrying out of this Final
Judgment, for the enforcement of compliance therewith, and for the
punishment of any violation thereof.
b. Jurisdiction. Jurisdiction is retained by this Court for the
purpose of enabling any of the parties to this Final Judgment to
apply to this Court at any time for such further orders or
directions as may be necessary or appropriate for the construction
or carrying out of this Final Judgment, for the modification of any
of the provisions hereof, for the enforcement of compliance
herewith, and for the punishment of any violation hereof.
c. Knowing Act of Material Non-Compliance. Upon recommendation
of the Special Master or the Plaintiffs, or sua sponte, the Court
shall review evidence pertaining to Microsoft's Material Non-
Compliance with the terms of this Order. If the Court determines
that Microsoft has knowingly committed an act of Material Non-
Compliance, the Court may, in addition to any other action, convene
a hearing to consider an order requiring Microsoft to license its
source code for the Microsoft software that is implicated by the act
of Material Non-Compliance to anyone requesting such a license for
the purpose of facilitating interoperability between the relevant
Microsoft product and any non-Microsoft product or, in the case of
an act of Material Non-Compliance that does not implicate particular
Microsoft software, to order such other sanctions as the Court deems
just and appropriate given the nature of Microsoft's actions and the
likely deterrent effect of the sanction.
d. Pattern or Practice of Material Non-Compliance. If the Court
finds that Microsoft has knowingly engaged in a pattern or practice
of Material Non-Compliance with the terms of this Order, the Court
may, in addition to any other action, (i) convene a hearing to
consider an order requiring Microsoft to pay such civil penalties as
the Court deems just and appropriate, given the nature of the
violation and the likely deterrent effect of the sanction, and/or
(ii) request proposals from the Plaintiffs and/or the Special Master
for appropriate further conduct remedies and impose those or other
conduct remedies the Court deems just and appropriate, given the
nature of the violation and the likely deterrent effect of the
sanction.
e. Meaning of Material Non-Compliance. For purposes of this
Section, "Material Non-Compliance" shall include any:
i. violation of the disclosure requirements relating to APIs,
Communications Interfaces, and Technical Information that has any
significant effect on the ability of ISVs to develop Software
Products or Web-Based Software that Interoperate as effectively with
Microsoft Platform Software as Microsoft's own Software Products or
Web-Based Software do;
ii. violation of any anti-retaliation or non-discrimination
provision included in this Order;
iii. violation of the provision of this Final Judgment
pertaining to interference with the performance of non-Microsoft
applications, Middleware, or Web-Based Software; or
iv. other action or omission that the Court determines has the
effect of undermining a substantial purpose of this Order.
f. Intellectual Property Infringement Claims. Upon
recommendation of the Special Master or the representative of the
Plaintiffs, or sua sponte, the Court shall review evidence that
Microsoft has brought or has threatened to bring a groundless claim
of Intellectual Property infringement for the purpose of preventing,
hindering, impairing, or inhibiting any non-Microsoft software,
Middleware, or Web-Based Software from Interoperating with a
Microsoft Operating System Product or Microsoft Middleware Product.
If the Court determines that Microsoft has undertaken such action,
it shall issue an order enjoining Microsoft from asserting or
enforcing any intellectual property rights in related APIs,
Communications Interfaces, or Technical Information.
P. Reporting of Software and Related Transactions
Microsoft can use acquisitions as a weapon to maintain its
operating system monopoly. Many of these deals are structured in
such a way, or relate to such relatively small businesses, that they
are not captured by the disclosure regime under the Hart-Scott-
Rodino Act. To ensure governmental oversight over these
transactions, the remedy should provide for limited disclosures to
the plaintiffs in connection with such transactions.
20. Reporting of Certain Transactions.
a. Notice. For any direct or indirect acquisition (which term
includes an acquisition of securities or of assets) or investment by
Microsoft or any of its Subsidiaries and for any exclusive license
of technology or other intellectual property to Microsoft or any of
its Subsidiaries, Microsoft must provide the Plaintiffs with sixty
(60) days" prior written notice of the consummation of such
acquisition, investment or license transaction where such
transaction involves (either as a direct or indirect
"acquiree, investee or licensor) a person (other than
Microsoft or any of its Subsidiaries) whose business (or any part
thereof) has been or could reasonably be classified under (or any of
whose Subsidiary's businesses, or any part thereof, has been or
could reasonably be classified under) any of the following North
American Industry Classification System codes, and Microsoft did not
own 33% or more of the securities of such person prior to December
1, 2001:
i. 334 (computer and electronic product manufacturing);
ii. 42143 (computer and computer peripheral equipment and
software wholesalers);
iii. 5133 (telecommunications);
iv. 5132 (cable networks and program distribution);
v. 52 (finance and insurance); or
vi. 5415 (computer systems design and related services).
b. Information. Accompanying such written notice shall be the
same information that would be reported if the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR Act9 were
applicable to such transaction. Such information shall be treated as
confidential to the extent that it would be so treated under the HSR
Act.
21. Effective Date, Term, Broad Interpretation, Costs and Fees.
a. Effective Date. This Final Judgment shall take effect 30 days
after the date on which it is entered.
b. Term. This Final Judgment shall expire at the end often years
from the date on which it takes effect.
c. Broad Interpretation. All of the provisions of this Final
Judgment, whether substantive, regulatory or procedural, will be
interpreted broadly consistent with its remedial purpose of
restoring the prospect of competition to the operating systems
market.
d. Costs and Fees. Plaintiffs shall be awarded reasonable costs
and fees. The Plaintiffs shall submit a motion for costs and
[[Page 28969]]
fees, with supporting documents as necessary, no later than forty-
five (45) days after the entry of this Final Judgment.
22. Definitions.
a. "Advisory Committee" has the meaning given in
Section 18.d.
b. "Agreement" means any agreement, understanding,
joint venture, arrangement or alliance, whether written or oral.
c. "APIs" or application programming interfaces mean
the interfaces, service provider interfaces, file formats, data
structures, Component Object Model specifications and interfaces,
registry settings, global unique identifiers ("GUIDs")
and protocols that enable a hardware device or an application,
Middleware, server Operating System or network Operating System to
efficiently obtain services from (or provide services in response to
requests from) and fully Interoperate with Platform Software and to
use, benefit from, and rely on all the resources, facilities, and
capabilities of such Platform Software. APIs include all interfaces,
methods, routines and protocols that enable any Microsoft Operating
System or Middleware Product installed on a Personal Computer to (a)
execute fully and properly applications or Middleware designed to
run in whole or in part on any Microsoft Platform Software installed
on that or any other device (including servers, telephones and
devices), (b) fully Interoperate with Microsoft Platform Software,
applications or directories installed on the same computer or on any
other computer or device, and (c) perform network security protocols
such as authentication, authorization, access control, encryption /
decryption and compression/decompression.
d. "Bind" means to include software or a link to
Web-Based Software in an Operating System Product in such a way that
either an OEM or an end user cannot readily remove or uninstall the
binary code of that software or link without degrading the
performance or impairing the functionality of such software or the
Operating System.
e. "Browser" means software that, in whole or in
part, provides the functionality present in any version of Internet
Explorer or MSN Explorer offered on either Macintosh or Windows,
including without limitation utilizing, storing or communicating in
any way with or via HTTP, HTML, URLs, XML, Javascript or any broadly
compatible or competitive standards, products, systems, protocols,
or functionalities.
f. "Communications Interfaces" means the interfaces
and protocols that enable software, directories, networks, Operating
Systems, network Operating Systems or Web-Based Software installed
on one computer (including Personal Computers, servers and Handheld
Computing Devices) to Interoperate with the Microsoft Platform
Software on another computer including without limitation
communications designed to ensure security, authentication or
privacy.
g. "Covered OEM" means one of the 20 Personal
Computer OEMs having obtained the highest volume of licenses of
Windows Operating System Products from Microsoft in the calendar
year preceding the effective date of the Final Judgment. Starting on
January 1, 2003, Microsoft shall annually determine and publish
within 30 days the list of OEMs that shall be treated as covered
OEMs for the new calendar year, based on the independently
determined volume of licenses during the preceding calendar year.
h. "De Facto Standard" has the meaning given in
Section 16.b.
i. "Default Middleware" means Middleware configured
to launch automatically (that is, "by default") to
provide particular functionality in the event that the user has not
selected specific Middleware for this purpose. For example, a
default Web browser is Middleware configured to launch automatically
to display Web pages in the event that the user has not selected
other software for this purpose.
j. "End-User Access" means the invocation of
Middleware directly or indirectly by an end user of a computer, or
the end user's ability to invoke Middleware. "End-User
Access" includes invocation of Middleware that the Operating
System Product's design requires the end user to accept.
k. "Handheld Computing Device" means any RAM-based
electronic computing device (including without limitation a cellular
telephone, personal digital assistant and Pocket PC) that is small
enough to be used while held in the user's hand, that may or may not
be capable of networked operation, including Internet access, that
contains a computer microprocessor, and that can run software
applications or Web-Based Software.
l. "HSR Act" has the meaning given in Section 20.b.
m. "IAP" means an Internet access provider that
provides consumers with a connection to the Internet, with or
without its own proprietary content.
n. "ICP" means an Internet content provider that
provides content to users of the Internet by maintaining Web sites
or Web servers.
o. "IHV" means an independent hardware vendor that
develops hardware to be included in or used with a computer.
p. "Intellectual Property" means copyrights,
patents, trademarks or trade secrets that Microsoft uses or licenses
to third parties.
q. "Interoperate means the ability of two products to
effectively access, utilize and/or support the full features and
functionality of one another.
r. "ISV" means any entity other than Microsoft (or
any subsidiary, division, or other operating unit of any such other
entity) that is engaged in the development and licensing (or other
marketing) of software products or Web-Based Software (including
without limitation products or services designed for Personal
Computers, servers or Handheld Computing Devices).
s. "Manager" means a Microsoft employee who is
responsible for the direct or indirect supervision of more than 100
other employees.
t. "Market Development Allowance" means any
marketing development allowance, agreement, program, rebate, credit
or discount, whereby an OEM or Third-Party Licensee is provided a
monetary discount in the applicable royalty for a licensed product
(other than the discount specifically described in Section 2.a.ii of
this Judgment) in exchange for the OEM or Third-Party Licensee
agreeing to some additional licensing term. For example, Microsoft
has previously referred to Marketing Development Allowances as
marketing development agreements, or MDAs, and marketing development
programs, or MDPs.
u. "Material Non-Compliance" has the meaning given
in Section 19.e.
v. "Microsoft" means Microsoft Corporation, its
successors and assigns (including any transferee or assignee of any
ownership rights to, control of, or ability to license the
Intellectual Property referred to in this Final Judgment), their
subsidiaries, affiliates, directors, officers, managers, agents, and
employees, and all other persons in active concert or participation
with any of them who shall have received actual notice of this Final
Judgment by personal service or otherwise.
w. "Middleware" means software, whether provided in
the form of files installed on a computer or in the form of Web-
Based Software, that operates directly or through other software
within an Operating System or between an Operating System (whether
or not on the same computer) and other software (whether or not on
the same computer) by offering services via APIs or Communications
Interfaces to such other software, and could, if ported to or made
Interoperable with multiple Operating Systems, enable software
products written for that Middleware to be run on multiple Operating
System Products. Examples of Middleware within the meaning of this
Final Judgment include without limitation Internet browsers, network
operating systems, e-mail client software, media creation, delivery
and playback software, instant messaging software, voice recognition
software, digital imaging software, the Java Virtual Machine,
calendaring * systems, Handheld Computing Device sychronization
software, directories, and directory services and management
software. Examples of software that are not Middleware within the
meaning of this Final Judgment are disk compression and memory
management software.
z. "Microsoft Middleware Product" means
i. Internet browsers, e-mail client software, media creation,
delivery and playback software, instant messaging software, voice
recognition software, digital imaging software, directories,
Exchange, calendaring systems, systems and enterprise management
software, Office, Handheld Computing Device synchronization
software, directory services and management software, the Common
Language Runtime component of the Net framework, and Compact
Framework, whether provided in the form of files installed on a
computer or in the form of Web-Based Software, or
ii. Middleware distributed by Microsoft that-
(1) is, or in the three years preceding this Judgment has been,
distributed separately from an Operating System Product, any
successors thereto, or
(2) provides functionality similar to that provided by
Middleware offered by a Microsoft competitor.
y. "Microsoft Platform Software" means a Windows
Operating System Product or
[[Page 28970]]
Microsoft Middleware Product or any combination of a Windows
Operating System Product and a Microsoft Middleware Product.
z. "OEM" means the manufacturer or assembler of a
computer (including without limitation servers and Handheld
Computing Devices), regardless of whether such manufacturer or
assembler applies its trademark to the final product.
aa. "Office" means all software developed and
distributed by Microsoft incorporating the brand name
"Microsoft Office" and its successors, including at
least the individual Microsoft Middleware Products Word, Excel,
Outlook, Power Point, and Access.
bb. "Operating System" means the software that
controls the allocation and usage of hardware resources (such as
memory, central processing unit time, disk space, and peripheral
devices) of a computer (including without limitation Personal
Computers, servers and Handheld Computing Devices) or network,
providing a "platform" by exposing APIs that
applications use to "call upon" the Operating System's
underlying software routines in order to perform functions.
cc. "Operating System Product" means an Operating
System and additional software shipped with the Operating System,
whether or not such additional software is sold separately. An
Operating System Product includes Operating System Product upgrades
that may be distributed separately from the Operating System Product
and any version of any Operating System Product created pursuant to
the terms and requirements of this Final Judgment.
dd. "Personal Computer" means any computer
configured so that its primary purpose is to be used by one person
at a time, that uses a video display and keyboard (whether or not
the video display and keyboard are actually included), and that
contains an Intel x86, successor, or competitive microprocessor, and
computers that are commercial substitutes for such computers.
ee. "Plaintiff" means any of the following
plaintiffs in this action: the States of California, Connecticut,
Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah and West
Virginia and the District of Columbia.
ff. "Platform Software" means an Operating System or
Middleware or any combination of an Operating System and Middleware.
gg. "Rule 53" has the meaning given in Section 18.
hh. "Special Master" has the meaning given in
Section 18.
ii. "Special Master Liaison Officer" has the meaning
given in Section 18.c.
jj. "Standard" has the meaning given in Section 16.
a above.
kk. "Standard-Setting Body" has the meaning given in
Section 16.a above.
ll. "Subsidiary" of a person means an affiliate
controlled by such person directly, or indirectly through one or
more intermediaries.
mm. "Synchronization Drivers" means software that
facilitates or enables the synchronization of information on any two
computers (including without limitation Personal Computers, servers
and Handheld Computing Devices).
nn. "Technical Information" means all information
regarding the identification and means of using and/or implementing
APIs and Communications Interfaces that competent software
developers require to make their products running on any computer
Interoperate effectively with Microsoft Platform Software running on
a computer. Technical information includes but is not limited to
reference implementations, communications protocols, file formats,
data formats, syntaxes and grammars, data structure definitions and
layouts, error codes, memory allocation and deallocation
conventions, threading and synchronization conventions, functional
specifications and descriptions, encryption algorithms and key
exchange mechanisms for data translation, reformatting, registry
settings and field contents.
oo. "hird-Party Licensee" means any person offering
to purchase from Microsoft at least 10,000 licenses of a product or
products offered and licensed under Section 1, including without
limitation ISVs, systems integrators and value-added resellers.
pp. "Timely Manner": Disclosure of APIs, Technical
Information and Communications Interfaces in a Timely Manner means,
at a minimum, publication on a Web site accessible to ISVs, IHVs,
OEMs and Third-Party Licensees at the earliest of the time that such
APIs, Technical Information, or Communications Interfaces are (i)
disclosed to Microsoft's applications developers, or (ii) used by
Microsoft's own Platform Software developers in software released by
Microsoft in alpha, beta, release candidate, final or other form, or
(iii) disclosed to any third party, or (iv) within 90 days of a
final release of a Windows Operating System Product, no less than 5
days after a material change is made between the most recent beta or
release candidate version and the final release.
qq. "Web-Based Software" means software code that
resides, in whole or in part, on a computer connected to a network
and whose functionality (whether or not described as or labeled a
service), includes without limitation database, directory and/or
security functionality, accessed via a different computer via the
Internet.
rr. "Windows Operating System Product" means
software code (including source code and binary code, and any other
form in which Microsoft distributes its Windows Operating Systems
for Personal Computers) of Windows 95, Windows 98, Windows 2000
Professional, Windows Me, Windows XP and their successors (including
the Windows Operating Systems for Personal Computers codenamed
"Longhorn," and "Blackcomb," and their
successors), as distributed by Microsoft to any licensee, whether or
not such product includes software code of any one or more Microsoft
Middleware Products.
The Importance of this Remedy Litigation
Plaintiff Litigating States" proposed remedies, taken
together, redress Microsoft's anticompetitive behavior in a manner
that fully comports with the principles and spirit of the Court of
Appeals" decision. These proposed remedies are intended to
prohibit the recurrence of, and remedy the harm done by, the
Microsoft practices that were held to be unlawful by the Court of
Appeals.
They are framed in terms of the specific anticompetitive conduct
in which Microsoft engaged, such as commingling middleware and
operating system software code; discriminatory licensing; failure to
make timely disclosure of the interfaces necessary to enable its
rivals to market software compatible with Windows; actual and
threatened retaliation against customers and rivals to discourage
their development and use of competing software; refusal to give
OEMs and consumers the freedom to choose software based solely on
its merits; the pollution of cross-platform technologies like Java;
and the abuse of important applications like Office to deter the
emergence of alternative software platforms.
These remedies are also intended to minimize the enforcement
burden on the Court by giving Microsoft incentives to comply and by
appointing a Special Master with substantial authority. Unlike the
previously announced settlement between the Department of Justice
("DOJ") and Microsoft, these remedies create a real
prospect of achieving what the DOJ said it intended to accomplish:
"stop Microsoft from engaging in unlawful conduct, prevent any
recurrence of that conduct in the future, and restore competition in
the software market..." Assistant Attorney General Charles
James, DOJ Press Release, Nov. 2, 2001, at page 1.
To implement a meaningful remedy faithful to the Court of
Appeals decision, the Plaintiffs" proposals must and do differ
substantially from the DOJ settlement. By the terms of the Final
Judgment, Plaintiffs propose that, unlike the DOJ settlement,
Microsoft be required, inter alia: (1) to license an unbundled
version of Windows (i.e., in which code for Microsoft's middleware
and its monopoly operating system is not commingled); (2) to provide
early and broad disclosure of interfaces so that rival software
companies have a fair opportunity to bring their products to market
at the same time as Microsoft; (3) to disclose technical information
so that rival handheld devices, servers and networks can
interoperate with Microsoft's dominant Windows operating system; (4)
to respect OEM and end-user preferences for non-Microsoft software,
so that consumers have real freedom of choice unbiased by Microsoft;
(5) to make Internet Explorer, the browser that benefited from so
many of Microsoft's anticompetitive acts, available on an open
source basis; (6) to carry Java, which Microsoft also labored
mightily to destroy, along with its own operating system; and (7) to
pert Office to work on other operating systems. These remedies also
differ from the DOJ settlement in that they recognize that: (1)
carefully crafted carve-outs and exceptions must be avoided, because
of their tendency to render potentially useful provisions impotent,
and (2) effective compliance requires strict requirements for
internal compliance, strong incentives, and an enforcement mechanism
(the Special Master) that promises prompt resolution of differences
and minimal burden on the Court's resources. Accepting the
determinations and directives from the Court of Appeals, both in its
liability determination
[[Page 28971]]
and in its guidance on remedy, the Plaintiff Litigating
States" Remedy Proposals maximize the prospect for truly
meaningful platform competition, and all of the benefits to
consumers that such competition would yield.
Respectfully submitted,
By: /s/ Brendan V. Sullivan, Jr.
Brendan V. Sullivan, Jr. (Bar No. 12757)
By: /s/ Steven R. Kuney
Steven R. Kuney (Bar No. 253286)
WILLIAMS & CONNOLLY LLP
725 Twelfth. Street, NW
Washington, DC 20005
Tel: (202) 434-5000
Fax: (202) 434-5029
Counsel for the Plaintiff Litigating States
California, Connecticut, Florida, Iowa,
Kansas, Massachusetts, Minnesota,
Utah and the District of Columbia
By: /s/Thomas Greene
Thomas Greene
Office of the Attorney General of the State of California
455 Golden Gate Avenue, Suite 11000
San Francisco, California 94102
Tel: (415) 703-5555
For the Plaintiff Litigating States
By: /s/Douglas L. Davis
Douglas L. Davis
Assistant Attorney General for the State of West Virginia
Consumer Protection/Antitrust Division
P.O. Box 1789
Charleston, West Virginia 25326-1789
Tel: (304) 558-8986
Counsel for the Plaintiff Litigating State
West Virginia
Exhibit C
IN THE UNITED STATES DISTRICT COURT FOR THE D1STRICT OF COLUMBIA
-----------------------
-----------------------
-----------------------
-------------
STATE OF NEW YORK ex. rel.
Attorney General ELIOT SPITZER, et at.,
Plaintiffs, Civil Action No. 98-1233 (CKK)
v.
Next Court Deadline: March 4, 2002
MICROSOFT CORPORATION, Status Conference
Defendant.
-----------------------
-----------------------
-----------------------
-------------
MICROSOFT CORPORATION'S RESPONSE TO PLAINTIFF LITIGATING
STATES" FIRST JOINT REQUESTS FOR ADMISSION IN REMEDY
PROCEEDINGS
Pursuant to Rule 36 of the Federal Rules of Civil Procedure,
Local Rule 26.2, and the Scheduling Order entered by the Court on
September 28, 2001, defendant Microsoft Corporation
("Microsoft") hereby objects and responds as follows to
the Plaintiff Litigating States" First Joint Requests for
Admission in Remedy Proceedings (the "Requests").
GENERAL OBJECTIONS
The following General Objections apply to each of the Requests
and shall have the same force and effect as if set forth in full in
response to each individually numbered request.
A. To the Requests Generally
1. Microsoft objects to each of the Requests to the extent that
they seek information protected from discovery by file attorney-
client privilege, the attorney work product doctrine or any other
applicable privilege, protection, immunity, law or rule. Any
disclosure??of information protected from discovery by the attorney-
client privilege, the attorney work product doctrine or any other
applicable privilege, protection, immunity, law or rule is
inadvertent and should not be construed to constitute a waiver.
2. Microsoft objects to each of the Requests (and their
accompanying Instructions) to the extent that they seek to impose
burdens and obligations on Microsoft that exceed those imposed by
the Federal Rules of Civil Procedure or the Local Rules of the
United States District Court for the District of Columbia.
3. Microsoft objects to each of the Requests to the extent they
are overly broad and unduly burdensome and seek information that is
not relevant to any remaining claim or defense in this action.
4. Microsoft objects generally to the Requests to the extent
they are vague and ambiguous and do not pose simple and direct
questions that cab. be readily admitted or denied.
5. Microsoft objects generally to the Requests to the extent
they seek to elicit information concerning issues in dispute between
the parties that is more appropriately sought through other
discovery devices.
6. Microsoft objects generally to the Requests to the extent
they call for legal conclusions or seek ratification of the legal
significance plaintiffs ascribe to disputed issues of fact.
7. Microsoft objects generally to the Requests 1o the extent
they are argumentative or reflect plaintiffs" subjective
interpretation of factual issues.
8. By agreeing to respond to the Requests, Microsoft does not
concede that the Requests seek information that is relevant to any
remaining claim or defense in this action. Similarly, Microsoft does
not concede that the Requests seek information that is reasonably
calculated to lead to the discovery of admissible evidence.
Microsoft instead expressly reserves all further objections as to
the relevance and admissibility of the information provided, as well
as the fight to object to further discovery relating to the subject
matter of any information provided.
9. Microsoft objects to the Requests to the extent they purport
to require that the response be made "under oath." Rule
36 of the Federal Rules of Civil Procedure provides that a written
answer "signed by the party or the party's attorney" is
a fully sufficient response to requests for admission.
B. To the Instructions
1. Microsoft objects to Instruction No. 1 to the extent that it
purports to impose burdens and obligations on Microsoft that arc
different from or greater than those imposed by Rule 36 of the
Federal Rules of Civil Procedure.
2. Microsoft objects to Instruction No. 2 to the extent that it
purports to impose burdens and obligations on Microsoft that are
different from or greater than those imposed by Rule 36 of the
Federal Rules of Civil Procedure.
3. Microsoft objects to Instruction No. 3 to the extent that it
purports to impose burdens and obligations on Microsoft that are
different from or greater than those imposed by Rule 26(e) of the
Federal Rules of Civil Procedure.
RESPONSES TO SPECIFIC REQUESTS FOR ADMISSION
REQUEST NO. 1
Admit that Microsoft has violated the antitrust laws of the
United States of America, and in particular Section 2 of the Sherman
Act, 15 U.S.C. 2. Response: Objection. This request
improperly calls for a legal conclusion. Notwithstanding this
objection, Microsoft admits that the United States Court of Appeals
for the District of Columbia affirmed in part a conclusion that
Microsoft had violated Section 2 of the Sherman Act and avers that,
pending resolution of all proceedings in this Court, Microsoft
retains the ability to challenge that conclusion in the United
States Supreme Court.
REQUEST NO. 2
Admit that "the key 1o the proper remedy in this case is
to end Microsoft's restrictions on potentially threatening
middleware, prevent it from hampering similar nascent threats in the
future and restore the competitive conditions created by similar
middleware threats." Plaintiff United States Department of
Justice Competitive Impact Statement ("CIS") at 24.
Response: Admit that the quoted statement appears in the CIS
prepared by the A?? Division of the U.S. Department of Justice.
("DOJ") but deny that Microsoft shares the opinion
expressed.
REQUEST NO. 3
Admit that "OEMs are a crucial channel for distribution
and ultimate usage of Non-Microsoft Middleware Products such as
browsers." CIS at 25. Response: Admit that the quoted
statement appears in the CIS prepared by the DOJ but deny that
Microsoft shares the opinion expressed. There are numerous other
distribution channels for software products, including electronic
downloading from the Interact, and those channels have, if anything,
become more effective in garnering usage since the original trial of
this action ended.
REQUEST NO. 4
Admit that in order for a remedy in this proceeding to be
effective, "it is critical that the OEMs ... are free to
choose to distribute and promote middleware without interference
from Microsoft." CIS at 23.
Response: Admit that the quoted statement appears in the CIS
prepared by the DOJ but deny that Microsoft shares the opinion
expressed, particularly to the extent it suggests that OEMs were
appreciably restrained from promoting non-Microsoft middleware in
the past. OEMs have always been free to install non-Microsoft
software products on their personal computers and to promote such
software products through placement of icons on the Windows desktop
and in the Start menu and otherwise.
REQUEST NO. 5
Admit that in determining whether Microsoft has violated Section
III.A. of the Revised Proposed Final Judgment filed on November 6,
2001 (hereafter "RPFJ"), "It]he existing
Microsoft-OEM relationship provides a baseline against which any
changes Microsoft makes in its treatment of that OEM for prohibited
reasons can be detected and assessed." CIS at 25.
[[Page 28972]]
Response: Admit that the quoted statement appears in the CIS
prepared by the DOJ but deny knowledge or information sufficient to
form a belief as to how the DOJ intends to ascertain whether a
violation of Section III.A of the RPFJ has occurred.
REQUEST NO. 6
Admit that under the RPFJ, Microsoft can compensate (both
monetarily and non-monetarily) an OEM in return for an agreement to
include a Microsoft product or service with personal computers
shipped to customers.
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Section III.A
of the RPFJ for a complete end accurate statement of its terms.
REQUEST NO. 7
Admit that under the RPFJ, Microsoft can withhold Consideration
from an OEM if an OEM chooses not to support, promote or carry any
Microsoft product or service.
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Section III.A
of the RPFJ for a complete and accurate statement of its terms.
REQUEST NO. 8
Admit that under the RPFJ, if an OEM chooses to remove user
access to any Microsoft Middleware Product, Microsoft can compensate
(both monetarily and non-monetarily) that OEM less than an OEM that
chooses not to remove user access to any Microsoft Middleware
Product.
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Sections
III.A and III.B of the RPFJ for a complete and accurate statement of
their terms.
REQUEST NO. 9
Admit that the majority of Covered OEMs were at one or more
times during the calendar years 2000 and 2001 in violation of the
terms of their license agreements with Microsoft.
Response: Denied.
REQUEST NO. 10
Admit that "Windows license royalties and terms are
inherently complex and easy for Microsoft to use to affect
OEMs" behavior, including what software the OEMs will offer to
their customers." CIS at 28.
Response: Admit that the quoted statement appears in the CIS
prepared by the DOJ but deny that Microsoft shares the opinion
expressed.
REQUEST NO. 11
Admit that under the RPFJ, Microsoft is free to enforce its
license, s with OEMs for Windows Operating System Products in a non-
uniform manner.
Response: Objection. The nature of Microsoft's rights and
obligations under the RPFJ calls for a legal conclusion. Microsoft
refers plaintiffs to the RPFJ for a complete and accurate statement
of its terms.
REQUEST NO. 12
Admit that under the RPFJ, if an OEM "promote[s] or
install[s] third party offers for Interact access, subscription on-
line music services, or Web-based applications that use or support
Non-Microsoft Middleware such as an alternate browser, audio/video
client software, or Java Virtual Machine," CIS at 30,
Microsoft may offer that OEM less Consideration than an OEM that
agrees to promote or install Microsoft software applications,
services and/or Middleware Products.
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Sections
III.A and III.C of the RPFJ for a complete and accurate statement of
their terms.
REQUEST NO. 13
Admit that under the RPFJ, if Microsoft designs a Windows
Operating System Product to "reserve a particular list for
multimedia players, [Microsoft] cannot specify either that the
listed player be its own Windows Media Player or that, whatever
multimedia player an OEM chooses to list in that entry, it be
capable of supporting a particular proprietary Microsoft data
format." CIS at 30-31.
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Section
III.C.1 of the RPFJ for a complete and accurate statement of its
terms.
REQUEST NO. 14
Admit that under the RPFJ, Microsoft can prevent an OEM from
installing a list of Middleware Products or other software products
on a Windows Operating System Product.
Response: Objection. This request is vague and ambiguous in its
use of the phrase "installing a list of Middleware Products or
other software products." Moreover, the proper interpretation
of the RPFJ calls for a legal conclusion. Microsoft refers
plaintiffs to Section III.C.1 of the RPFJ for a complete and
accurate statement of its terms.
REQUEST NO. 15
Admit that under the RPFJ, Microsoft can prohibit an OEM from
launching automatically, at the conclusion of the initial boot
sequence or upon connection or disconnection from the Internet, any
non-Microsoft Middleware Product so long as a Microsoft Middleware
Product with similar functionality would not otherwise launch
automatically.
Response: Objection The proper interpretation of the RPFJ calls
for a legal conclusion Microsoft refers plaintiffs to Section
III.C.3 of the RPFJ for a complete and accurate statement of its
terms.
REQUEST NO. 16
Admit that under the ??PFJ, Microsoft can prevent an OEM from
configuring its products to launch non-Microsoft Middleware
automatically, other than when Microsoft Middleware Products launch
automatically at the conclusion of the first boot sequence or
subsequent boot sequences or upon connection to or disconnection
from the Internet.
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Section
III.C.3 of die RPFJ fur a complete and accurate statement of its
terms.
REQUEST NO. 17
Admit that under the RPFJ, Microsoft can offer an OEM
Consideration in return for that OEM configuring its products to
launch Microsoft Middleware Products at any time, including at the
conclusion of the first boot sequence* or subsequent boot sequences
or upon connection to or disconnection from the Internet.
Response: Objection. The nature of Microsoft's rights and
obligations under the RPFJ calls for a legal conclusion. Microsoft
refers plaintiffs to the RPFJ for a complete and accurate statement
of its terms.
REQUEST NO. 18
Admit that under the RPFJ, Microsoft can impose currently
unspecified "technical specifications" in connection
with any IAP offer presented during the initial boot sequence.
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Section
III.C.5 of the RPFJ for a complete and accurate statement of its
terms.
REQUEST NO. 19
Admit that under the RPFJ, Microsoft can restrict by agreement
an OEM from promoting any non-Microsoft Middleware or any other ISV
product or service during the initial boot sequence.
Response: Objection. The nature of Microsoft's rights and
obligations under the RPFJ calls for a legal conclusion. Microsoft
refers plaintiffs 1o the RPFJ for a complete and accurate statement
of its terms.
REQUEST NO. 20
Admit that under the RPFJ, Microsoft can offer an OEM
Consideration in return for aa agreement to promote only Microsoft
products or services, including Microsoft Middleware Products,
during the initial boot sequence.
Response: Objection. The nature of Microsoft's fights and
obligations under the RPFJ calls for a legal conclusion. Microsoft
refers plaintiffs to the RPFJ for a complete and accurate statement
of its terms.
REQUEST NO. 21
Admit that under the RPFJ, Microsoft does not have to disclose
to ISVs, IHVs, IAPs, ICPs, and OEMs all of the APIs and related
technical information relating to Microsoft Platform Software that
are disclosed to developers of Microsoft Middleware Products.
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Section III.D
of the RPFJ for a complete and accurate statement of its terms.
REQUEST NO. 22
Admit that since January 1, 2000 developers of Microsoft
Middleware Products have studied, interrogated and/or interacted
with the source code and any related documentation of Microsoft
Platform Software.
Response: Objection. This request is circular #yen that
Microsoft Platform Software is defined in Section VIA. of the RPFJ
to include the Microsoft Middleware Products defined in Section VI.K
of the RPFJ.
REQUEST NO. 23
Admit that the APIs that must be disclosed under the RPFJ
include, "broadly, any interface, protocol or other method of
information exchange between Microsoft Middleware and a Windows
Operating System Product." CIS at 33-34.
[[Page 28973]]
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Section III.D
of the RPFJ for a complete* and accurate statement of its terms.
REQUEST NO. 24
Admit that under the RPFJ, Microsoft's obligation to disclose
"documentation" only requires Microsoft to disclose the
sort of information that Microsoft already provides to ISVs and
others through the Microsoft Developer's Network
("MSDN").
Response: Objection. The proper interpretation of the RPFJ calls
"for a legal conclusion. Microsoft refers plaintiffs to
Section III.D of the RPFJ and the definition of Documentation in
Section VI.E of the RPFJ for a complete and accurate statement of
their terms.
REQUEST NO. 25
Admit that developers of Microsoft Middleware have access to
APIs and/or related technical information and documentation relating
to Microsoft Platform Software that are not disclosed by Microsoft
through the MSDN.
Response: Objection. This request is circular given that
Microsoft Platform Software is defined in Section VI.L of the RPFJ
to include the Microsoft Middleware* Products defined in Section
VI.K of the RPFJ, and the developers of such Microsoft Middleware
Products are also the developers of the Microsoft Middleware defined
in Section VI.J of" the RPFJ.
REQUEST NO. 26
Admit that under the RPFJ, developers of Microsoft Middleware
are permitted access to APIs and/or related technical information
relating to Microsoft Platform Software that arc not made available
to ISVs, IHVs, IAPs, ICPs and OEMs.
Response: Objection. This request is circular given that
Microsoft Platform Software is defined in Section VI.L of the RPFJ
to include the Microsoft Middleware Products defined in Section VI.K
of the RPFJ, and the developers of such Microsoft Middleware
Products are also the developers of the Microsoft Middleware defined
in Section VI.J of the RPFJ.
REQUEST NO. 27
Admit that under the RPFJ, Microsoft Middleware developers may
have access to APIs and/or related technical information relating to
Microsoft Platform Software before such information is made
available to ISVs, IHVs, IAPs, ICPs and OEMs.
Response: Objection. This request is circular given that
Microsoft Platform Software is defined in Section VI.L of the RPFJ
to include the Microsoft Middleware Products defined in Section VI.K
of the RPFJ, and the developers of such Microsoft Middleware
Products arc also the developers of the Microsoft Middleware defined
in Section VI.J of the RPFJ.
REQUEST NO. 28
Admit that under the RPFJ, Microsoft is not obliged to release
the last major beta version of any Windows Operating System Product
"well in advance of the actual commercial release" of
that Windows Operating System Product. CIS at 35.
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Section III.D
of the RPFJ for a complete and accurate statement of its terms.
REQUEST NO. 29
Admit that under the RPFJ, Microsoft is not obliged to release
the last major beta version of any Microsoft Middleware "well
in advance of the actual commercial release" of that
Middleware. CIS at 35.
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Section III.D
of the RPFJ for a complete and accurate, statement of its terms.
REQUEST NO. 30
Admit that under the RPFJ, developers of Microsoft Middleware*
"will not have access to any ... features of Windows Operating
System Products that might allow it to operate more
effectively" that are not also made available to ISVs, IHVs,
IAPs, ICPs and OEMs. CIS at 35.
Response: Objection. This request misquotes the CIS by (i)
referring to developers of Microsoft Middleware rather than to the
Microsoft Middleware itself and (ii) replacing the words
"hidden or proprietary" with an ellipsis. Moreover, the
proper interpretation of the RPFJ calls for a legal conclusion.
Microsoft refers plaintiffs to Section III.D of the RPFJ for a
complete and accurate statement of its terms.
REQUEST NO. 31
Admit that under the RPFJ, all APIs and related technical
information, including all documentation, "for the Secure
Audio Path digital fights management service that is part of Windows
XP must be disclosed and mad* available for use by competing media
players in interoperating with Windows XP." CIS at 35.
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Section III.D
of the RPFJ for a complete and accurate statement of its terms.
REQUEST NO. 32
Admit that the "competitive significance" of non-
Microsoft Middleware is "highly dependent on content, data and
applications residing on servers and passing over networks such as
the Internet or corporate networks ...." CIS at 36.
Response: Admit that the quoted statement appears in the CIS
prepared by the DOJ but deny that Microsoft shares the opinion
expressed.
REQUEST NO. 33
Admit that under tile RPFJ, Microsoft is not obliged to license
to third parties all APIs, technical information and Communications
Protocols relating to Windows Operating System Products that
Microsoft makes available to Microsoft developers of server
software.
Response: Objection. This request is vague and ambiguous in its
use of the term "technical information" and
"server software." Moreover, the proper interpretation
of the RPFJ calls for a legal conclusion. Microsoft refers
plaintiffs to Section III.E of the RPFJ for a complete and accurate
statement of its terms.
REQUEST NO. 34
Admit that under the RPFJ, third party licensees "will
have full access to and be able to use, the protocols that arc
necessary for software located on a server computer to interoperate
with, and fully take advantage of, the functionality provided by a
Windows Operating System Product." CIS at 36.
Response: Objection. This request is vague and ambiguous in its
use of the phrases "software located on a server" and
"fully take advantage of." Moreover, the proper
interpretation of the RPFJ calls for a legal conclusion. Microsoft
refers plaintiffs to Section III.E of the RPFJ for a complete and
accurate statement of its terms.
REQUEST NO. 35
Admit that notwithstanding the fact that the term "server
operating system products" is not defined in the RPFJ, it
"include, but is not limited to, the entire Windows 2000
Server product families and any successors...as well as a number of
server software products and functionality, including the Interact
Information Services ... and Active Directory." CIS at 37.
Response: Objection. This request misquotes the CIS by (i)
adding an ellipsis at the end of the first sentence of the first
paragraph on page 37, wrongly suggesting that the words following
the ellipsis are part of the same sentence; (ii) adding the words
"as well as" without placing them in square brackets,
wrongly suggesting that those words are part of the original text;
and (iii) quoting only a portion &the third sentence of the
paragraph and concluding the quotation with a period rather than an
ellipsis, wrongly suggesting that the sentence ends with the words
"Active Directory." In fact, Internet Information
Services and Active Directory are features of the Windows 2000
Server family of products. Microsoft admits that Windows 2000
Server, Windows 2000 Advanced Server and Windows 2000 Datacenter
Server and their successors are server operating system products as
that term is used in the RPFJ.
REQUEST NO. 36
Admit that under the RPFJ, Microsoft is not required to license
Communications Protocols implemented in any Windows Operating System
Product that are used by a Microsoft server operating system product
to interoperate with that Windows Operating System Product with the
addition of other software to the client computer.
Response: Objection. The proper interpretation of the
RPFJ" calls for a legal conclusion. Microsoft refers
plaintiffs to Section III.E of the RPFJ for a complete and accurate
statement of its terms.
REQUEST NO. 37
Admit that under the RPFJ, there is no time period within which
Microsoft must make available for license to third parties the
Communications Protocols referenced in Section III.E. of the RPFJ.
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Section III.E
of the RPFJ for a complete and accurate statement of its terms.
REQUEST NO. 38
Admit that under the RPFJ, Microsoft is not obliged to license
any Communications Protocols distributed only with a Microsoft
server or otherwise separately from a Windows Operating System
Product.
[[Page 28974]]
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Section III.E
of the RPFJ for a complete and accurate statement of its terms.
REQUEST NO. 39
Admit that one of the purposes* of Section III.E. of the RPFJ is
to "??nsur[e] that competing, non-Microsoft server products
... will have the same access to and ability to interoperate with
Windows Operating System Products as do Microsoft's server operating
systems." CIS at 38.
Response: Objection. This request is vague and ambiguous in its
use of the term "non-Microsoft server products."
Moreover, Microsoft denies knowledge or information sufficient to
form a belief as to what the DOJ thinks are the
"purposes" of Section III.E of the RPFJ. The proper
interpretation of the RPF3 calls for a legal conclusion. Microsoft
refers plaintiffs to Section III.E of the RPFJ for a complete and
accurate statement of its terms.
REQUEST NO. 40
Admit that one of the purposes of Section III.E. of the RPFJ is
to "permit seamless interoperability between Windows Operating
System Products and non-Microsoft servers on a network." CIS
at 38.
Response: Objection. This request is vague and ambiguous in its
use of the term "seamless interoperability." Moreover,
Microsoft denies knowledge or information sufficient to form a
belief as to what the DOJ thinks arc the "purposes" of
Section III.E of the RPFJ. The proper interpretation of the RPFJ
calls for a legal conclusion. Microsoft refers plaintiffs to Section
III.E of the RPFJ for a complete and accurate statement of its
terms.
REQUEST NO. 41
Admit that Section III.E. of the RPFJ "requires the
licensing of all Communications Protocols necessary for non-
Microsoft servers to interoperate with the Windows Operating System
Products" implementation of the Kerberos security standard in
the same manner as do Microsoft servers, including the exchange of
Privilege Access Certificates." CIS at 38.
Response: Objection. This request is vague and ambiguous in its
use of the phrase "the Windows Operating System
Products" implementation of the Kerberos security
standard." Moreover, the proper interpretation of the RPFJ
calls for a legal conclusion. Microsoft refers plaintiffs to Section
III.E of the RPFJ for a complete and accurate statement of its
terms.
REQUEST NO. 42
Admit that Section III.E. of the RPFJ requires Microsoft to
"license for use by non-Microsoft server operating system
products the Communications Protocols that Windows Operating System
Products use to enable network services through mechanisms such as
Windows server message block protocol/common Internet file system
protocol communications, as well as Microsoft remote procedure calls
between the client and server operating systems." CIS at 39.
Response: Objection. This request is vague and ambiguous in its
use of the terms "network services" and "Microsoft
remote procedure calls." Moreover, the proper interpretation
of the RPFJ calls for a legal conclusion. Microsoft refers
plaintiffs to Section III.E of the RPFJ for a complete and accurate
statement of its terms.
REQUEST NO. 43
Admit that Section III.E. of the RPFJ requires Microsoft to
license to third parties "Communications Protocols that permit
a runtime environment (e.g., a Java Virtual Machine and associated
class libraries or competing functionality such as the Common
Language Runtime) to receive and execute code from a server ... if
those protocols are implemented in a Windows Operating System
Product." C1S at 39.
Response: Objection. This request is vague and ambiguous in its
use of the term "runtime environment." Moreover, the
proper interpretation of the RPFJ calls for a legal conclusion.
Microsoft refers plaintiffs to Section III.E of the RPFJ for a
complete and accurate statement of its terms.
REQUEST NO. 44
Admit that Section III.J.1.a. of the RPFJ exempts from
disclosure under Section III.E. only "specific end-user
implementations of security items such as actual keys, authorization
tokens or enforcement criteria, the disclosure of which would
compromise the security of a particular installation or group of
installations of the listed security features." CIS at 39
(quoting RPFJ III.J.1.a.).
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Sections
III.E and III.J.1.a of the RPFJ for a complete and accurate
statement of their terms.
REQUEST NO. 45
Admit that Section III.J.1.a, of the RPFJ "permits
Microsoft to withhold limited information necessary to protect
particular installations of the Kerberos and Secure Audio Path
features of its product5 (e.g., keys and tokens parti?? to a given
installation) but does not permit it to withhold any capabilities
that are inherent in the Kerberos and Secure Audio Path features as
they are implemented in a Windows Operating System Products."
CIS at 39.
Response: Objection. This request is vague and ambiguous in its
use of the phrase "capabilities that arc inherent in the
Kerberos and Secure Audio Path features as they arc implemented in a
Windows Operating System Product" Moreover, the proper
interpretation of the RPFJ calls for a legal conclusion. Microsoft
refers plaintiffs to Section III.J.1.a of the RPFJ for a complete
and accurate statement of its terms.
REQUEST NO. 46
Admit that under the RPFJ, Microsoft may contractually prevent
an ISV from developing, using, distributing or promoting any
software that competes with Microsoft Platform Software or runs on
any software that competes with Microsoft Platform Software so long
as it is part of an agreement to use, distribute or promote any
Microsoft software or to develop software for, or in conjunction
with, Microsoft.
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiff?? to Sections
III.F and III.G of the RPFJ for a complete and accurate statement of
their terms.
REQUEST NO. 47
Admit that under the RPFJ, Microsoft may cater into an agreement
with an ISV in which Microsoft pays the ISV to make Internet
Explorer the default browser for software developed by the ISV.
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Sections
III.F and III.G of the RPFJ for a complete and accurate statement of
their terms.
REQUEST NO. 48
Admit that under the RPFJ, Microsoft may enter into an agreement
with an ISV or ICP in which Microsoft pays the ISV or ICP to make
Windows Media Player the default media player for software or
Interact content developed by the ISV or ICP.
Response: Objection. The proper interpretation of the RPFJ calls
for a legal conclusion. Microsoft refers plaintiffs to Sections
III.F and III.G of the RPFJ for a complete and accurate statement of
their terms.
REQUEST NO. 49
Admit that under Section III.G.1. of the RPFJ, Microsoft could
not make the "commercially practicable" representation a
standard part of its agreements with IAPs, ICPs, ISVs, IHVs or OEMs.
Respond: Objection. The proper interpretation of the RPFJ calls for
a legal conclusion. Microsoft refers plaintiffs to Sections III.G.1
of the RPFJ for a complete and accurate statement of its terms.
REQUEST NO. 50
Admit that under the RPFJ, Microsoft is free to take action it
knows or reasonably should know will directly or indirectly
interfere with or degrade the performance or compatibility of non-
Microsoft Middleware when interoperating with Microsoft Platform
Software, without providing notice to the ISV of such non-Microsoft
Middleware prior to taking the action.
Response: Admit the subject matter of this request is not
addressed in the RPFJ, but deny that (i) Microsoft has ever taken
such action or (it) such action is expressly or impliedly permitted
under the RPFJ.
REQUEST NO. 51
Admit that Microsoft currently restricts its redistributable
code from use with some non-Microsoft Platform Software.
Response: Objection. This request is vague and ambiguous in its
use of the terms "redistributable code" and "non-
Microsoft Platform Software," neither of which is defined in
the RPFJ or the
Requests.
Dated: Washington, DC
January 11,2002
William H. Neukom
Thomas W. Butt
David A. Heiner Jr.
Diane D'Arcangelo
Christopher J. Meyers
MICROSOFT CORPORATION
One Microsoft Way
Redmond, Washington 98052
(425) 936-8080
Dan K. Webb
Bruce R. Braun
WINSTON & STRAWN
35 West Wacker Drive
[[Page 28975]]
Chicago, Illinois 60601
(312) 558-5600
Charles F. Rule (Bar No. 370818)
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
1001 Pennsylvania Avenue, NW Suite 800
Washington, DC 20004
(202) 639-7300
John L. Warden (Bar No. 222083)
Richard J. 1 Urowsky
Steven L. Holley
Michael Lacovara
Richard C. Pepperman, II
Stephanie G. Wheeler
Ronald J. Colombo
SULLIVAN & CROMWELL
125 Broad Street
New York, New York 10004
(212) 558-4000
Bradley P. Smith (Bar No. 468060)
SULLIVAN & CROMWELL
1701 Pennsylvania Avenue, NW
Washington, DC 2f)006
(202) 956-7500
Counsel for Defendant Microsoft Corporation
CERTIFICATE OF SERVICE
I hereby certify that on this 11th day of January, 2002, I
caused a true and correct copy of the foregoing Microsoft
Corporation's Response to Plaintiff Litigating States" First
Joint Requests for Admission in Remedy Proceedings to be served by
facsimile and overnight courier upon:
Philip S. Beck
Bartlit Beck Herman Palenchar & Scott
Courthouse Place, Suite 300
54 West Hubbard Street
Chicago, Illinois 60610
Tel: (312) 494-4411
Fax: (312) 494-4440
Renata B. Hesse
U.S. Department o f Justice
Antitrust Division
601 D Street, NW, Suite 1200
Washington, DC 20530
Tel: (202) 514-8276
Fax: (202) 30/-1454
Brendan V. Sullivan, Jr.
Williams & Connolly LLP
725 Twelfth Street, NW
Washington, DC 20005
Tel: (202) 434-5000
Fax: (202) 434-5029
Kevin J. O'Connor
Wisconsin Attorney General's Office
P.O. Box 7857
123 West Washington Avenue
Madison, Wisconsin 53703-7857
Tel: (608) 266-1221
Fax: (608) 267-2223
Blake Harrop
Illinois Attorney General's Office
100 West Randolph Street, I2th Floor
Chicago, Illinois 60601
Tel: (312) 814-2503
Fax: (312) 814-2549
Jay L. Himes
Assistant Attorney General
New York State Attorney General's Office
120 Broadway, Suite 2601
New York, New York 10271
Tel: (212) 416-8282
Fax: (212) 416-6015
MTC-00030608
PROJECT TO PROMOTE COMPETITION & INNOVATION IN THE DIGITAL AGE
2001 K STREET, NW . SUITE 800 . WASHINGTON, DC 20006
January 28, 2002
Ms. Renata Hesse
Trial Attorney
Suite 1200
Antitrust Division
Department of Justice
601 D. Street, NW
Washington, DC 20530
RE: Comments to the Proposed Final Judgment In United States v.
Microsoft Corporation, No. 98-1232 State of New York, et al v.
Microsoft Corporation, No. 98-1233
Dear Ms. Hesse,
Enclosed please find ten (10) copies of the comments of the
Project to Promote Competition and Innovation in the Digital Age
("ProComp"), submitted pursuant to the Tunney Act, 15
U.S.C. 16, with respect to the Proposed Final Judgment in the
above-captioned matters.
Please also note that this filing is accompanied by an affidavit
prepared and submitted by Professor Kenneth J. Arrow, the original
signed copy of which is attached hereto.
Sincerely yours,
Mitchell S. Pettit
President
ProComp
Comments to the Proposed Final Judgment In United States v.
Microsoft Corporation, No. 98-1232 State of New York, et al.
I,. Microsoft Corporation, No. 98-1233
Submitted By
Project to Promote Competition & Innovation in the Digital
Age ("ProComp")
Pursuant to the Tunney Act, 15 U.S.C. 16
January 28, 2002
Kenneth W. Starr
Thomas D. Yannucci
Mark L. Kovner
Kirkland & Ellis
Robert H. Bork
1150 17th Street, NW
Washington, DC 20036
Counsel for ProComp
655 15th Street, NW, Suite 1200
Washington, DC 20005 (20
2) 879-5000
Counsel for ProComp
Kevin J. Arquit
Michael C. Naughton
Arman Y. Oruc
Clifford Chance Rogers & Wells LLP
200 Park Avenue
New York, N.Y. 10166
(212) 878-8000
Counsel for ProComp
Mitchell S. Pettit, President
ProComp
2001 K Street, NW, Suite 800
Washington, DC 20006
(202) 912-7140
Glenn B. Manishin
Stephanie A. Joyce
Kelley Drye & Warren LLP
1200 19th Street, NW, Suite 500
Washington, DC 20036
(202) 955-9600
Counsel for ProComp
TABLE OF CONTENTS
Page;
I. INTRODUCTION.................................................. 1
A. Standard of Tunney Act Review............................... 1
B. Failure to Satisfy Settled Monopolization Remedies Law...... 4
C. Failure to Redress Core Violations.......................... 6
D. The PFJ Does Not Achieve its Purported Goals................ 8
I. The API Disclosure Requirements............................... 9
3. OEM Desktop Flexibility..................................... 9
E. The PFJ Fails to Address Competitive Issues that Will 10
Determine the Future of the Software Industry.................
II. THE COURT SHOULD DEFER DECISION ON THE PROPOSED DECREE UNTIL 11
AFTER THE LITIGATING STATES" REMEDIES HEARING AND SHOULD
APPLY THE SETTLED ANTITRUST REMEDY STANDARD EXPRESSLY REAFFIRMED
IN THIS CASE BY THE COURT OF APPEALS............................
A. Approving the Proposed Decree Before Completion of the 12
Remedy Hearings Would Be Wholly Unprecedented and Highly
Prejudicial...................................................
1. Waiting to Rule on the Proposed Decree Until After the 12
Remedies Trial Avoids Pre-Judging the Remedies Case and the
Prospect of Inconsistent Rulings............................
2. Deferring Ruling on the Proposed Decree Promotes the 15
Tunney Act's Express Goal of Conserving Judicial Resources..
B. The Applicable Legal Standard for Reviewing the Proposed 15
Decree is the Ford/United Shoe Test Specifically Mandated by
the Court of Appeals..........................................
C. The Court Owes No Tunney Act Deference To the Department in 20
this Unprecedented Post-Trial, Post-Appeal Settlement.........
[[Page 28976]]
D. The AT&T Model is Instructive by Conducting a Searching 23
Inquiry into the Scope, Adequacy and Effectiveness of the
Proposed Decree...............................................
III. THE PROPOSED FINAL JUDGMENT IS INSUFFICIENT UNDER ANTITRUST 25
REMEDIES LAW AND DOES NOT MEET THE STANDARD ARTICULATED BY THE
DEPARTMENT......................................................
A. The Decree Does Not "Undo" the Competitive Harm 26
Resulting from Microsoft's Anticompetitive Practices..........
B. The Proposed Settlement Fails to Deny Microsoft the Ill- 29
gotten Fruits as Required by Established Antitrust Law........
C. The Decree Does Not Terminate or Redress Numerous Practices 31
that the Court of Appeals Found to Violate the Sherman Act....
1. Integration of Windows and Middleware..................... 31
2. Coercion and Market Allocation............................ 33
3. Deception and Product Sabotage............................ 35
IV. THE API DISCLOSURE AND OEM FLEXIBILITY PROVISIONS OF THE 36
PROPOSED DECREE WILL NOT CREATE THE OPPORTUNITY FOR MIDDLEWARE
COMPETITION.....................................................
A. The Proposed Decree's Provisions for Information Disclosure 37
Do Not Assure that Future Middleware Competitors Will Have
Access to Necessary Interoperability Information..............
1. The API Provision's Scope is Far Too Narrow............... 38
2. The API Provision of the PFJ Constructs an Illusive 39
Framework for Disclosure of Interoperability Information....
a. Defined Terms Within the API Disclosure Provision Leave 42
All Material Disclosure Determinations to Microsoft.......
3. The API Disclosure Provision Also Leaves Critical Terms 47
Undefined...................................................
4. Under Provision III.D, APIs Will Never be disclosed in a 48
Timely Manner...............................................
5. The Exceptions from and Preconditions to API Disclosure 49
Further Narrow the Scope of an Already Unworkable Disclosure
Provision...................................................
6. Cross-Licensing of Middleware APIs........................ 51
7. Timing of API Disclosure Obligation....................... 51
B. The Communications Protocol Provisions of the Decree Do Not 52
Require Release of any Server APIs and are Based on Terms the
Department Failed to Include in the Settlement................
C. The Proposed Decree's Provisions for OEM Flexibility Do Not 55
Open the PC Manufacturing Channel to Future Middleware
Competitors...................................................
1. The OEM Provisions Place Sole Responsibility for 56
Introducing Middleware Competition on PC Manufacturers......
2. The Provisions Allowing OEM Flexibility Do Not Address the 61
Key Issue of Microsoft's Ubiquitous Middleware Development
Platform....................................................
3. The OEM Provisions Do Not Create a Level Playing Field for 62
Middleware Desktop Competition..............................
4. Additional OEM Provisions Further Undermine the Crucial 63
Ability of ISVs to Differentiate Competing Middleware
Products....................................................
5. The OEM Provisions Contain Other Superfluous Terms that 65
Substantially Limit Any Potential Market Impact.............
6. The OEM Provisions Have No Impact on Java................. 66
7. The OEM Provisions Largely Codify Microsoft's Existing 66
Business Practices..........................................
D. The Proposed Decree Does Not Effectively Preclude 67
Microsoft's Exclusive Dealings................................
E. Current Market and Economic Realities Demonstrate that the 68
PFJ is Incapable of Having Any Substantial Procompetitive
Impact........................................................
1. New Monopolies Enable Microsoft to Protect its Operating 68
System Monopoly Despite the PFJ.............................
2. The Proposed Settlement Ignores the Likely Tactics 69
Microsoft Will Use to Eliminate the Next Significant Threat
to its Monopoly Position....................................
F. The Decree Increases Microsoft's Market Dominance and 72
Actually Worsens Competitive Conditions in the Relevant
Software Markets..............................................
G. The Settlement Would Not Have Prevented Microsoft's Unlawful 73
Campaign Against Netscape and Java............................
V. THE PROPOSED DECREE IS HOPELESSLY VAGUE AND INHERENTLY 74
UNENFORCEABLE...................................................
VI. DIVESTITURE REMAINS THE PREFERABLE AND MOST EFFECTIVE REMEDY 77
FOR MICROSOFT'S SECTION 2 VIOLATIONS............................
VII. THE COURT SHOULD CONDUCT A RIGOROUS TUNNEY ACT EXAMINATION 78
OF THE DECREE, THE COMPETITIVE IMPACT STATEMENT AND THE
DEPARTMENT'S UNSUBSTANTIATED PROJECTIONS OF FUTURE COMPETITIVE
EFFECT..........................................................
A. The Complexity and Substantial National Importance of this 78
Case, the Government's Flat Reversal of Position and its
Disregard of Clear Tunney Act Obligations All Dictate the
Necessity of Critical Judicial Oversight in this Landmark
Proceeding....................................................
1. This Complex, Controversial, Nationally Important 79
Antitrust Prosecution Demands Serious Judicial Oversight....
2. Heightened Scrutiny is Needed Because Neither the 80
Department Nor Microsoft Complied With their Respective
Tunney Act Obligations......................................
3. The Court Should Closely Examine the Government's Reversal 83
of Position on Relief.......................................
B. Live Evidence is Needed on the Technical and Economic 84
Complexities of the Software Industry and the Profound
Failings of, and Harms Caused by, the PFJ.....................
VIII. CONCLUSION................................................. 86
I. INTRODUCTION
This proposed decree is so ineffective that it would not have
prevented Microsoft from destroying Netscape and Java, the very acts
that gave rise to this lawsuit. It is so ineffective in controlling
Microsoft that it might as well have been written by Microsoft
itself.
A. Standard of Tunney Act Review
The "public interest" standard of the Tunney Act, 15
U.S.C. 16(e), is determined in this case by the
unanimous legal ruling of the Court of Appeals for the District of
Columbia Circuit sitting en bane. That Court held that Microsoft has
maintained its monopoly in personal computer operating systems in
clear violation of Section 2 of the Sherman Act. No decree that
fails to cure that illegality and prevent its recurrence can
conceivably serve the public interest. The Proposed Final Judgment
("PFJ" or "proposed decree") accomplishes
neither of those mandatory purposes.
For that reason, the proposed decree should be rejected by the
District Court.
This case is entirely different from any settlement since the
adoption of the Tunney Act in 1974.
All other settlements were entered into prior to the conclusion
of any trial, usually before any trial had even commenced. Cases
holding that a Tunney Act court must accept a lesser remedy than
might (or might not) be obtained after trial are utterly irrelevant.
The Competitive Impact Statement's ("CIS") reliance upon
such cases is misguided. United States v. Microsoft Corp., Revised
Proposed Final Judgment and Competitive Impact Statement, 66 Fed.
Reg. 59,452 (2001). Here, the District Court and the Court of
Appeals, including a total of eight judges, have decided that in
violating the Sherman
[[Page 28977]]
Act, Microsoft's behavior is directly contrary to the public
interest. The Tunney Act does not empower the District Court to
enter a remedy that excuses past violations and permits future
conduct of the same nature. The proposed decree does precisely that.
It is no more binding on the District Court than would be a
Department of Justice statement that henceforth a named company
would be immune from antitrust prosecution.
In particular, the proposed settlement takes no steps to remedy
Microsoft's foreclosure of middleware threats from competing
Internet browsers and cross-platform Java technology, Microsoft's
related efforts to illegally increase the applications barrier to
entry protecting its Windows monopoly, or Microsoft's illegal
commingling of browser and other middleware code with Windows.
Further, the proposed settlement does not assure that future
middleware competitors will have access to the necessary technical
information to interoperate properly with Windows, and does not open
up the critical Original Equipment Manufacturer ("OEM")
distribution channel to these future competitors. Finally, the PFJ
ignores the competitive threat to Microsoft's monopoly presented by
server-based distributed applications, and thus fails to address
Microsoft's practice of protecting its monopoly by controlling
proprietary interfaces and communications protocols.
More significantly, the only suggestion in the CIS as to any
basis for a very limited and deferential scope of judicial review is
simply wrong. The Department insists that such a standard is
"particularly" appropriate "where, as here,
court's review of the decree is informed not merely by the
allegations contained in the Complaint, but also by the extensive
factual and legal record resulting from the district and appellate
court proceedings." CIS, 66 Fed. Reg. at 59476. Exactly the
opposite is the case. In routine Tunney Act cases, the law is clear
that respect is to be accorded to the Department's antitrust
enforcement judgments--its "perceptions of the market
structure and its view of the nature of the
case"--precisely because there is no factual or legal
record before the court. United States v. Microsoft Corp., 56 F.3d
1448, 1448 (DC Cir. 1995) ("Microsoft l") (emphasis
added). When a Sherman Act case has been litigated and affirmed on
appeal, however, the district court is fully capable of assessing
the proposed remedy in light of those rulings and its
"familiarity with the market involved." Id. at 1461.
The closest parallel to this Court's review of the PFJ is the
AT&T monopolization settlement presented by the Department and
decided by this Court (Harold Greene, J.) under the Tunney Act.
United States v. AT&T, 552 F. Supp. 131 (D.DC 1982), aff'd mere.
sub nora., Maryland v. United States, 460 U.S. 1001 (1983). In the
AT&Tease, Judge Greene had heard the vast majority of the
evidence--on all issues except remedy--and more than a
year earlier bad denied AT&T's motion to dismiss on the merits
after the close of the government's case-in-chief.
Following a wide-ranging Tunney Act process that included
evidentiary hearings, third-party submissions and several days of
oral argument, Judge Greene refused to approve the consent decree as
proposed, even though it mandated divestiture of major components of
the Bell System. He concluded that the decree was in certain
respects substantively inadequate, precluded the Court from
effective oversight and enforcement, and posed a risk of harming
third-parties (despite the presence of complementary regulatory
jurisdiction to accomplish similar goals). Judge Greene therefore
insisted upon substantial modifications to the proposed decree
before he would enter the settlement under the Tunney Act's public
interest standard.
Recognizing the intense public concern over a possible
"rubber stamp" of the settlement by the Court, Judge
Greene concluded that it was his responsibility to ensure that the
decree protected consumers, opened the relevant markets to effective
competition in a timely manna-, and was readily enforceable.
Significantly, Judge Green found that "unlike ordinary pre-
trial antitrust settlements, the Court would "be able to
render sound judgments" because it "ha[d] already heard
what probably amounts to well over ninety percent of the
parties" evidence both quantitatively and qualitatively, as
well as all of their legal arguments." Id. at 152 (citations
omitted). For this reason, Judge Greene held that "it does not
follow that [the Court] must unquestionably accept a consent decree
as long as it somehow, and, however inadequately, deals with the
antitrust problems implicated in the lawsuit." Id.
The purpose of judicial review under the Tunney Act is to ensure
that a consent decree follows "the public interest as
expressed in the antitrust laws." S. REP. NO. 93--298
(1973) ("SENATE REPORT") (emphasis added). Here, the
Court of Appeals held specifically that "a remedies decree in
an antitrust case must seek to "unfetter a market from
anticompetitive conduct," to "terminate the illegal
monopoly, deny to the defendant the fruits of its statutory
violation, and ensure that there remain no practices likely to
result in monopolization in the future." United States v.
Microsoft Corp., 253 F.3d 34, 103 (DC Cir. 2001) ("Microsoft
III") (quoting Ford Motor Co. v. United States, 405 U.S. 562,
577 (1972), and United States 1,. United Shoe Mach. Corp., 391 U.S.
244, 250 (1968)). The Department itself earlier emphasized to this
Court on remand that "both the applicable remedial legal
standard and the liability determination of the Court of Appeals are
clear." Joint Status Report, United States v. Microsoft Corp.,
at 24 (D.DC filed Sept. 20, 2001). The Court of Appeals has spoken
and its holding is binding on this Court as well as the litigants.
Consequently, in the unique procedural posture of this case, the
"public interest as expressed in the antitrust laws" is
the Court of Appeals" mandate itself. SENATE REPORT, supra, at
5.
B. Failure to Satisfy Settled Monopolization Remedies Law
The CIS does not even cite, let alone argue, that the PFJ meets
the DC Circuit's remedial standard, quoted above, to terminate the
monopoly, deny the defendant of its ill-gotten fruits, and ensure
that monopoly practices cannot arise in the future.
As that standard recognizes, there is no difference between the
remedies called for when a defendant has unlawfully gained a
monopoly or unlawfully maintained a monopoly. The offense of
monopolization under Section 2 of the Sherman Act occurs when a finn
has either "acquired or maintained" monopoly power by
anticompetitive means. United States 1,. Grinnell Corp., 384 U.S.
563, 570-71 (1966); Microsoft III, 253 F.3d at 50. There is no
legal basis to distinguish between the methods of monopolization
either for liability or relief purposes, and neither DOJ nor
Microsoft has cited a case making such a distinction. All arc
equally unlawful and all arc equally harmful to consumers. Here, for
example, even assuming that Microsoft achieved its monopoly power
through legitimate business means, it has been found to have
maintained such monopoly power through a series of anticompetitive
conduct designed to illegally preserve its monopoly position by
foreclosing rivals. But for this illegal maintenance, Microsoft's
monopoly power would probably have dissipated, and competitors and
consumers would have enjoyed the benefits of free and fair
competition. Microsoft's internal communications demonstrate that
Microsoft thought that would be the likely outcome.
For these reasons, courts apply broad relief even where a firm
has been found to possess monopoly power that was legally acquired
but illegally maintained. See, e.g., United Shoe, 391 U.S. at 250
(in context of a legally attained monopoly position that was
illegally maintained, the Court held it has a duty to
"prescribe relief which will terminate the illegal monopoly,
deny to the defendant the fruits of its statutory violation, and
ensure that there remain no practices likely to result in
monopolization in the future"). And courts have never
distinguished between illegal attainment and illegal maintenance
when determining remedies for a Sherman Act Section 2 monopolization
claim. See, e.g., Schine Chain Theatres, Inc. v. United States, 334
U.S. 110, 128 (1948) (holding conduct injunctions against future
violations not adequate to protect public interest in monopolization
cases since defendant thus maintains the full benefit of the
monopoly; instead broad remedies, including divestiture, are
necessary to undo the harm to the market); see also 3 PHILLIP E.
AREEDA AND HERBERT HOVENCAMP, ANTITRUST LAW 653i (2002)
(quoting United Shoe, 391 U.S. at 250-52, for the proposition
that a "monopoly that has been created or maintained by
plainly exclusionary conduct is unlawful and that it is the duty of
the court to assure its "complete extirpation."
(emphasis added)). In short, an appropriate set of remedies to
restore competition needs to be sufficient to pry open the market to
competition, stop the bad acts, undo the effects of the bad acts,
and preclude future alternative anticompetitive tactics.
The DC Circuit was well aware that this case involves monopoly
maintenance--that the achievement by Microsoft of a Windows
monopoly in the first instance was not alleged to be
unlawful--but nonetheless specifically adopted the Ford/United
Shoe
[[Page 28978]]
remedy standard, including its command to "terminate"
the defendant's monopoly power. That is the law of this case and the
law in all Sherman Act monopolization cases.
C. Failure to Redress Core Violations
By agreeing to the proposed settlement, the Department and the
Settling States have "won a lawsuit and lost a cause."
International Salt Co. v. United States, 332 U.S. 392, 401 (1947).
By excluding consideration of terminating the Windows monopoly from
their remedy calculations, Plaintiffs have ignored the central
meaning of Section 2. They would have the Court sanction Microsoft's
unlawful conduct allowing its monopoly to remain intact. The Court
of Appeals" use of the traditional Ford/United Shoe standard
clearly holds that that is not a proper remedy. The CIS explains
that the applications barrier to entry protecting Microsoft's
monopoly was directly threatened by "two incarnations of
middleware that, working together, had the potential to weaken the
applications barrier severely without the assistance of any other
middleware"--Netscape and Java. CIS, 66 Fed. Reg. at
59464-65. Nonetheless, the PFJ inexplicably contains no
provision addressing Internet browsers or cross-platform Java
runtime technology, let alone any other provisions that erode the
applications barrier to entry. Moreover, the proposed decree simply
ignores a number of other significant ways in which the Court of
Appeals held that Microsoft's practices violated the Sherman Act.
Consequently, the PFJ does not "unfetter [the] market from
anticompetitive conduct" or "ensure that there remain no
practices likely to result in monopolization in the future."
Microsoft III, 253 F.3d at 103.
Nothing in the settlement prohibits Microsoft from commingling
code or binding its middleware to the operating system. This was a
major issue in this litigation, and the Court of Appeals
specifically found Microsoft's commingling of browser and operating
system code to be anticompetitive. The danger is reinforced by the
definition of "Windows Operating System Product" in
Section VI.U, which states that what code comprises Windows
"shall be determined by Microsoft in its sole
discretion." PFJ, 66 Fed. Reg. at 59459. Thus, Microsoft can
render the protections for middleware, meaningless by binding and
commingling code and redefining the operating system to include the
bound/commingled applications.
ProComp strongly disagrees with the notion that it is impossible
to move the market forward to approximate where it would have been
absent Microsoft's violations. The applications barrier to entry is
not an immutable condition. There are remedial alternatives
available to restore Internet browsers and cross-platform runtime
technology to the position they would have achieved--ubiquitous
distribution without any "lock-in" to the Windows
operating system m in the absence of Microsoft's violations. The
open source Internet Explorer ("IE") licensing
requirement proposed by the Litigating States does just that. More
specifically, a remedy that acts directly to undermine the
applications barrier to entry, for instance by requiring
"porting" of the Office suite to other operating systems
platforms, could potentially do precisely what Netscape and Java
were poised to accomplish in
1995-98--"commoditize" the operating systems
and thus allow operating systems competition to occur on the basis
of efficiency and consumer demand, rather than hardware lock-in. In
any event, by ignoring the economic importance of the competition
destroyed by Microsoft's wide range of exclusionary practices, the
PFJ fails to address the central lesson of this litigation. It does
not redress the core Sherman Act violations on which liability was
unanimously affirmed by the en bane Court of Appeals.
The relief proposed by the Litigating States acts directly to
deny Microsoft the fruits of the violation (Interact Explorer
licensing), pry open the operating systems market to competition
(Java must carry) and erode the barrier to entry protecting
Microsoft's monopoly power (applications porting). It is precisely
these omissions m consequences of the Department's current,
erroneously truncated remedy analysis m that fatally undermine the
legal sufficiency of the PFJ. The Department's proposed remedy
flatly contradicts the Court of Appeals" directives and thus
"the public interest as expressed in the antitrust
laws." SENATE REPORT, supra, at 5.
D. The PFJ Does Not Achieve its Purported Goals
The PFJ purports to provide applications developers with the
tools to create competing platforms, but the proposed decree fails
to achieve even the narrow goals it sets out to accomplish. The PFJ
neither creates the conditions under which new middleware
competition can flourish nor provides OEMs with the freedom to
support such middleware in the event these technologies avoid the
predatory acts of Microsoft.
Most predatory conduct fails to achieve or maintain
monopolization because the aggressor must incur greater costs than
its prey in order to keep or drive competitors from the market. What
this litigation has shown is that Microsoft has numerous weapons in
its arsenal to impose far greater damage on its competitors than the
loss Microsoft suffers by using such weapons. Controlling the
disclosure of the Application Program Interfaces ("API")
and the related technical information, imposing conditions on OEM
licenses, "commingling" or bolting of software code and
products are all examples of weapons Microsoft employed in its
predatory attack on Netscape's Navigator and Java technologies. The
PFJ does nothing to protect Microsoft from using the same tactics
against any future middleware threats.
1. The API Disclosure Requirements
The PFJ purports only to make public those APIs between the
operating system and Microsoft middleware that run on top of the
operating system. It does not accomplish even that narrow result. To
name a few, the convoluted definitions and exemptions to the API
disclosure obligation allow Microsoft itself to decide which APIs
will be subject to the disclosure requirement and when those APIs
will be released. The decree also permits Microsoft to design and
bundle its products in different ways to evade the disclosure
requirements, for instance by permitting Microsoft in "its
sole discretion" to decide what software comprises a
"Windows Operating System Product." PFJ, 66 Fed. Reg. at
59459. With some simple packaging decisions, Microsoft can
unilaterally dictate whether middleware competitors will receive the
interoperability information necessary to innovate. In short, as
explained in detail below, the API disclosure provisions are riddled
with numerous deficiencies that render them ineffective in promoting
competition.
These are not loopholes, but triumphal arches that allow
Microsoft to proceed uninhibited by the antitrust laws. The PFJ
expressly allows Microsoft to play a game of form over substance by
categorizing pieces of code into different defined terms. The
operation of the disclosure requirements is devoid of any notion of
technological or economic efficiency.
2. OEM Desktop Flexibility
The PFJ relies almost exclusively on OEMs to restore
competition, a naive hope at best. OEMs do not have the resources or
the economic incentive to create competition for Microsoft. In any
event, the provisions regarding OEM flexibility to distribute
competing middleware products ignore the economic realities of the
software industry. Most importantly, the decree fails to provide
OEMs and consumers with the flexibility to support competing
middleware or other new technologies that Microsoft may deem as a
threat to its monopoly position. The add/remove provisions in the
proposed decree only allow for removal of end user access, i.e., the
icon for Microsoft middleware, not the middleware itself. As
discussed in the accompanying Declaration of Kenneth Arrow
(Attachment A), Nobel laureate and the Department's own expert in
Microsoft 1, this perpetuates the applications barrier to entry that
is at the heart of this litigation. Thus, the OEM provisions enhance
rather than erode Microsoft's operating system monopoly power.
E. The PFJ Fails to Address Competitive Issues that Will
Determine the Future of the Software Industry
Even if these serious deficiencies in the structure, scope and
language of the proposed decree were corrected, the settlement would
still not create the conditions for a competitive operating systems
market. The proposed decree hardly deals at all with Microsoft's
likely future anticompetitive conduct. Microsoft's prodigious market
power is now directed at the next threat to the Windows
platform--applications and services provided via the Internet
and other networks m not the Netscape/Java threat of 1995-99.
Microsoft has destroyed those revolutionary technologies that are a
source of operating systems competition and has moved on to other
areas that the proposed decree all but ignores.
The PFJ fails to serve the public interest and to achieve the
settled goals of monopolization relief reaffirmed in the Court of
Appeals" decision. It ignores the changing market realities,
and the core violations upheld by the DC Circuit. The proposed
[[Page 28979]]
settlement exhibits an unjustifiable deference to a convicted
monopolist in designing its products and determining the scope of
the remedy. In doing so, it renounces its purported goal of creating
the conditions for new middleware threats to flourish. Additionally,
it clearly fails to deny Microsoft the "fruits" of its
violations and "terminate" its monopoly power. It is
precisely these flaws that fatally undermine the legal sufficiency
of the PFJ. In contrast, the relief proposal by the Litigating
States includes provisions, such as Interact Explorer licensing,
Java must carry, applications porting, sufficient and timely
disclosure of information, and the freedom to license unbundled
Microsoft products, just to name a few, which deny Microsoft the
fruits of the violation, pry open the OS market to competition and
erode the barrier to entry protecting Microsoft's monopoly power. As
a matter of law, the Department's settlement proposal cannot be said
to be consistent with "the public interest as expressed in the
antitrust laws," SENATE REPORT, supra, at 5, where it has
proposed a remedy without reference to those laws as reiterated by
the Court of Appeals m this very case.
11. THE COURT SHOULD DEFER DECISION ON THE PROPOSED DECREE UNTIL
AFTER THE LITIGATING STATES" REMEDIES HEARING AND SHOULD APPLY
THE SETTLED ANTITRUST REMEDY STANDARD EXPRESSLY REAFFIRMED IN THIS
CASE BY THE COURT OF APPEALS
This is the only substantial Government Section 2 case in more
than 30 years litigated through trial to judgment, appeal and dual
opportunities for Supreme Court review. \1\ A "rush to
judgment" is simply not the appropriate course of judicial
review under the Tunney Act, or otherwise. A decision on the
adequacy of the proposed decree should therefore be deferred until
after the conclusion of the evidentiary heating on the remaining
Plaintiffs" ("Litigating States") relief
proposals. Moreover, the normal Tunney Act flexibility accorded to
the Government in offering a proposed pretrial antitrust settlement
cannot hold in the unique circumstances of this case, in which the
Court is obligated to conduct a searching, independent inquiry into
the proposed decree, with no deference accorded to the government.
---------------------------------------------------------------------------
\1\ Microsoft Corp. v. United States, 530 U.S. 1301 (2000)
(denying appeal); Microsoft Corp. v. United States, 122 S. Ct. 350
(2001) (denying certiorari).
---------------------------------------------------------------------------
A. Approving the Proposed Decree Before Completion of the Remedy
Hearings Would Be Wholly Unprecedented and Highly Prejudicial
No court has ever approved an antitrust settlement where, as
here, there are remaining plaintiffs in the very same consolidated
action that are about to begin a full remedies hearing based on
adjudicated Sherman Act liability that has been affirmed on appeal.
In this unprecedented case, \2\it is essential that the Court
evaluate all available evidence bearing on the "public
interest" of the Department's proposed settlement.
---------------------------------------------------------------------------
\2\ Like AT&T, "It]his is not an ordinary
case." 552 F. Supp. at 151
---------------------------------------------------------------------------
1. Waiting to Rule on the Proposed Decree Until After the
Remedies Trial Avoids PreJudging the Remedies Case and the Prospect
of Inconsistent Rulings
The Tunney Act sets no deadlines. Neither the Act nor its
legislative history in any way encourages "fast-track"
review. Instead, the Act expressly allows the Court to set its own
schedule and to tailor its judicial review process to the facts and
circumstances of each antitrust case. 15 U.S.C. 16(1)
\3\ As the Senate sponsor of the Tunney Act explained:
---------------------------------------------------------------------------
\3\ A Tunney Act court is authorized to "take
testimony of Government officials," appoint a "special
master and such outside consultants or expert witnesses as the court
may deem appropriate," hear evidence and argument from other
interested persons and organizations, and "take such other
action in the public interest as the court may deem
appropriate." 15 U.S.C. 16(f). These procedures
are so important to a careful assessment of the public interest that
courts routinely employ them, even in pretrial Tunney Act cases.
See, e.g.. United States v. Bechtel Corp., 1979-1 Trade Cas.
(CCH) 62,430 (N.D. Cal. 1979), aff'd 648 F.2d 660 (9th Cir.
1981); Dillard v. City of Foley, 166 F.R.D. 503 (M.D. Ala. 1996);
United States v. Westinghouse Elec. Corp., 1988-1 Trade Cas.
(CCH) 68,012 (D.DC 1988); United States v. ARA Serves.,
1979-2 Trade Cas. (CCH) 62,861 (E.D. Mo. 1979); United
States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. (CCH)
61,508 (W.D. Mo. 1977).
---------------------------------------------------------------------------
The decision to make [Tunney Act] procedures discretionary is
dictated by a desire to avoid needlessly complicating the consent
decree process. There are some cases in which none of these
procedures may be needed. On the other hand, there have been and
will continue to be cases where the use of many or even all of them
may be necessary. In fact, in a very few complex cases, failures to
use some of the procedures might give rise to a, indication that the
district court had failed to exercise its discretion properly.
119 Cong. Rec. 3453 (statement of Sen. Tunney) (emphasis added).
This highly complex case demands that the Court utilize all
available procedures for evaluating the adequacy of the proposed
decree and the evidentiary basis of the economic projections that
underly the Department's remedial scheme. Deferring decision on the
proposed decree is the only sensible approach. The Court's
consideration of testimonial and other evidence on the failings of
the decree will avoid unfair pre-judgment of the remedies remand and
the entry of potentially conflicting relief. It also offers the most
efficient means of ensuring that the many issues raised by the
proposed decree and the Court of Appeals" decision receive a
thorough hearing on the merits. Deferring judgment will not harm any
party or inconvenience the Court, given that the Litigating
States" upcoming remedies trial is scheduled to begin just
thirteen days after the completion of the Tunney Act comment
process. \4\Indeed, neither the Justice Department nor Microsoft can
claim to be prejudiced by a short deferment in judgment on the PFJ,
because Microsoft represents that it is already complying with the
terms of the proposed decree.
---------------------------------------------------------------------------
\4\ Based on the deadlines set forth in the Court's
November 8, 2001 Order and Section 16(b) of the Tunney Act, comments
on the PFJ and the Department's responses to those comments are not
due until February 26, 2002. Thus, the remedy trial, scheduled to
begin on March I 1, 2002, will start only two weeks after the
Justice Department is scheduled to submit its Response-to-Comments
on the PFJ. Even if the Justice Department files its Response-to-
Comments early, deferring judgment on the PFJ will cause little if
any delay, no prejudice, and great benefits to the parties and the
Court.
---------------------------------------------------------------------------
Deferral would also avoid the highly undesirable result of
inconsistent judgments. The Litigating States" remedy proposal
differs markedly from the proposed settlement in breadth, scope and
approach. A premature ruling on the PFJ would force the Litigating
States either to (1) pursue their relief proposal in full, knowing
there may be inconsistent remedy orders issued by this Court that
would make compliance difficult, if not impossible, or (2) stunt
their case by limiting their proposed remedies to those that can be
implemented in a manner consistent with the PFJ, even though they
have already rejected that settlement as inadequate.
The Court faces a similar, untenable choice if it seeks to issue
an early ruling on the proposed decree. The Court would have to
limit its ultimate remedy order to the terms already required by its
ruling on the Department's settlement, or order new remedies but
vacate those portions of the PFJ that are inconsistent with the
subsequent decree. This dilemma is easily avoided, however, by
waiting to resolve the issues raised by the Tunney Act comments
until after the Litigating States and Microsoft have had a full and
fair opportunity to present evidence supporting their respective
remedy proposals.
Avoiding conflicting remedial orders alone is reason enough to
defer judgment on the decree. Inconsistent judgments are to be
avoided in antitrust as in all complex litigation. See In re Transit
Co. Tire Antitrust Litigation, 67 F.R.D. 59, 65 (W.D. Mo. 1975)
(separate relief hearings "would result in duplication of
effort [and] possible inconsistent judgments"). It is well-
established that "[t]he avoidance of logically inconsistent
judgments in the same action" is a "just reason for
delay[ing]" entry of final judgment in multi-party civil
actions. \5\
---------------------------------------------------------------------------
\5\ Phoenix Renovation Corp. v. Gulf Coast Software,
F.R.D. 580, 582 (E.D. Va. 2000) (quoting Fed. R. Civ. P. 54(b)); see
also Dana Corp. v. Celotex Asbestos Settlement Trust, 251 F.3d 1107,
1120 (6 th Cir. 2001) (affirming the district court's condemnation
of a reorganization plan provision that unnecessarily
"raise[d] a likelihood of inconsistent judgments").
---------------------------------------------------------------------------
The Court should give particular weight to considerations of
uniformity in this case, because of the great need to ensure that
all in the software industry--suppliers, customers and
competitors --face a fair and even playing field. As the
Supreme Court has held, antitrust violations should be remedied
"with as little injury as possible to the interest of the
general public." United States v. American Tobacco Co., 221
U.S. 106 (1911). Thus, "the Court would be justified in
rejecting the proposed decree or requiring its modification if it
concluded that the decree unnecessarily conflicts with important
public policies other than the
[[Page 28980]]
policy embodied in the Sherman Act." AT&T, 552 F. Supp. at
151. In this case, such an important public policy is the uniform
application of antitrust law to the national software market.
2. Deferring Ruling on the Proposed Decree Promotes the Tunney
Act's Express Goal of Conserving Judicial Resources
Deferring judgment on the proposed decree will also conserve
judicial resources by allowing the Court to determine which
questions raised by the PFJ can be resolved by the testimony and
other evidence offered in the remedy trial. The Court may then limit
or avoid duplicative evidence that must be adduced to assess whether
the decree meets the applicable substantive standard for Tunney Act
judicial review.
Consent decrees subject to Tunney Act review are generally used
to obviate trial--to avoid "extended proceedings"
and provide a "prompt and less costly" means of
resolving antitrust suits pre-litigation. CIS, 66 Fed. Reg. at 59476
(quoting 119 Cong. Rec. 24598 (1973)). Even the Department of
Justice, in discussing the negotiation of antitrust settlements in
its Practice Manual, identifies the consent decree as the best way
to obtain relief "without taking the case to trial."
Antitrust Division Manual, Ch. IV, E, at 50 (3 rd ed.
1998) (emphasis added). Here, however, a liabilities trial has
already occurred, and a remedies trial must occur regardless of when
or whether the proposed Department settlement is approved. There is
little or no court action to avoid. As a result, judicial resources
are best conserved and most efficiently allocated by holding the
remedies trial before ruling on the PFJ.
B. The Applicable Legal Standard for Reviewing the Proposed
Decree is the Ford/United Shoe Test Specifically Mandated by the
Court of Appeals
In no reported case since adoption of the Tunney Act in 1974 has
the Department sought to settle a monopolization action after
prevailing at trial and on appeal. The CIS nonetheless suggests that
in assessing the adequacy of the proposed decree under the Act, this
Court must approve a settlement that is less than the remedy the
Court would otherwise impose of its own accord. CIS, 66 Fed. Reg. at
59476 (citations omitted). In the unprecedented procedural posture
of this case, it cannot.
The Court of Appeals agreed that relief in this case must seek
to "terminate" Microsoft's operating system monopoly, to
"unfetter" barriers to competition to the operating
systems market, to "deny" Microsoft the
"fruits" of its statutory violations, and to
"ensure" there are no practices "likely to result
in monopolization in the future " \6\ That mandate is
binding on this Court as well as the litigants. The Supreme Court
has "consistently held that an inferior court has no power or
authority to deviate from the mandate issued by an appellate
court." Briggs v. Pennsylvania R. Co., 334 U.S. 304, 306
(1948). Indeed, even prior to the Tunney Act the Supreme Court
emphasized that in antitrust cases, "[t]he Department of
Justice ... by stipulation or otherwise has no authority to
circumscribe the power of the courts to see that [their] mandate is
carried out." Cascade Natural Gas Corp. v. El Paso Natural Gas
Co., 386 U.S. 129, 136 (1967).\7\Consequently, in the unique
procedural posture of this case, the "public interest as
expressed in the antitrust laws," SENATE REPORT, supra, at 5,
is the Court of Appeals" mandate itself. \7\ "[A]
remedies decree in an antitrust case must seek to "unfetter a
market from anticompetitive conduct," to "terminate the
illegal monopoly, deny to the defendant the fruits of its statutory
violation, and ensure that there remain no practices likely to
result in monopolization in the future." Microsoft III, 253
F.3d at 103 (citations omitted). 7 The legislative history of the
Tunney Act indicates that Congress was clearly aware of Cascade and
intended the Act's public interest standard to codify that rule of
antitrust remedies. Judge L Skelly Wright, former Chief Judge for
the DC Circuit, discussed the Cascade problem at length in his
Senate appearance, explaining that "the Supreme Court felt
compelled to say that--and I am quoting--"The United
States knuckled under to El Paso and settled this
litigation"--close quote, rather than fully protecting
the public interest by getting a decree which fully insured future
competition." SENATE REPORT, supra, at 147.
The DC Circuit did not establish a new legal standard for
monopolization relief, but rather adopted the traditional test
developed by the Supreme Court decades ago. See Microsoft. III, 253
F.3d at 103 (quoting Ford Motor Co. v United States, 405 U.S. 562,
577 (1972), and United States v. United Shoe Mach. Corp., 391 U.S.
244, 250 (1968)). Notably, however, the CIS does not even cite, let
alone argue, that the PFJ meets the DC Circuit's remedial standard.
The Department instead offers its own view that "[a]ppropriate
injunctive relief in an antitrust case should: (1) [e]nd the
unlawful conduct; (2) avoid a recurrence of the violation and others
like it; and (3) undo its anticompetitive consequences." CIS,
66 Fed. Reg. at 59465 (citations omitted). This lesser standard is
invalid because it ignores the Supreme Court's directives to
"terminate" the monopoly and to eradicate the
"fruits" enjoyed by the unlawful monopolist.
To the extent that DOJ may contend this case is different
because the acquisition of Microsoft's monopoly was not challenged,
rather the unlawful maintenance of that monopoly, it would be
incorrect. There is no legal basis to distinguish between the
methods of monopolizalion either for liability or relief purposes,
and neither DOJ nor Microsoft has ever cited a case making such a
distinction. The adverse consumer welfare and economic efficiency
consequences of monopoly power are the same whether a monopoly was
illegally acquired, illegally maintained or both. Indeed, the DC
Circuit was well aware that the achievement by Microsoft of a
Windows monopoly in the first instance was not alleged to he
unlawful, \8\ but nonetheless specifically adopted the traditional
Ford/United Shoe remedy standard.
---------------------------------------------------------------------------
\8\ See Microsoft L 56 F.3d at 1452 (no claim that
"Microsoft obtained its alleged monopoly in violation of the
antitrust laws") (emphasis in original); Microsoft III, 253
F.3d at 58 (Microsoft "violated 2 by engaging in
a variety of exclusionary acts ... to maintain its monopoly").
---------------------------------------------------------------------------
The Court of Appeals" carefully crafted and detailed
opinion can hardly be deemed to have applied this standard by
accident. Accordingly, notwithstanding Microsoft's claim, it is
simply not true that "contrary to the critics"
overheated rhetoric, there is no basis for relief designed to
terminate an 'illegal monopoly."' \9\ The fact
that a monopoly was acquired lawfully does not provide any defense,
because the monopolist forfeits its right to continue to hold even a
lawfully acquired monopoly when it violates the Sherman Act in its
preservation.\10\
---------------------------------------------------------------------------
\9\ Statement of Charles F. (Rick) Rule, Fried Frank Hams
Shriver & Jacobson, Prepared for the Committee on the Judiciary,
United States Senate, at 5 (Dec. 12, 2001) ("Rule Senate
Testimony"). 10 This self-evident proposition becomes even
more clear when the relief in this case is compared with that
adopted by the Department, approved by this Court under the Tunney
Act and affirmed on the merits by the Supreme Court in the AT&T
antitrust case. United States v. AT&T, 552 F. Supp. 131. There,
like here, the Section 2 claim was monopoly maintenance, not
unlawful acquisition of monopoly power. Furthermore, unlike
Microsoft, AT&T's monopoly was in part a de jure consequence of
regulatory and legal protections. Id. at 135-41. Had there in
fact been a difference for antitrust remedy purposes between
monopoly maintenance and monopoly acquisition, use of the ultimate
relief of divestiture in A T& T would have been impermissible.
Thus, only by ignoring the largest antitrust settlement of the
generation preceding Microsoft can the settling litigants here
escape the conclusion that termination of a defendant's monopoly
power is the principal remedial objective of Section 2 monopoly
maintenance cases.
---------------------------------------------------------------------------
The Department and Microsoft may argue that the Court of
Appeals" "drastic" modification of liability is of
crucial significance in evaluating the scope of a remedy. See
Microsoft III, 253 F.3d at 105. What this contention ignores is that
the Court of Appeals reversed or remanded separate, distinguishable
legal theories for Sherman Act liability that all arose from the
same set of operative facts. As the government explained to the
Supreme Court: The court of appeals affirmed the district court's
central ruling that Microsoft violated Section 2 of the Sherman Act
by engaging in an unlawful course of conduct to maintain its
monopoly of the market for Intel-compatible PC operating systems.
With minor exceptions, the court agreed with the district court's
findings and conclusions that Microsoft's restrictions on original
equipment manufacturers; its bundling of Internet Explorer into
Windows; its dealings with internet access providers, independent
software vendors, and Apple Computers; and its efforts to contain
and to subvert Java technologies that threatened Microsoft's
operating system monopoly, all served unlawfully to maintain the
Windows monopoly.
Brief for the United States in Opposition [To Certiorari],
Microsoft Corp. v. United States, No. 01-236, at 5 (S. Ct.
filed Aug. 2001) (emphasis added; citations omitted). And the Court
of Appeals added the explicit, highly unusual caution that
"[n]othing in the Court's opinion is intended to preclude the
District Court's consideration of remedy
[[Page 28981]]
issues." \11\ That the lesser included offenses of attempted
monopolization and tying were not upheld does nothing to subtract
from the seriousness of the widespread Section 2 violations affirmed
by the Court of Appeals or the Court's explicit reaffirmation of the
Ford/United Shoe standard for antitrust relief.
---------------------------------------------------------------------------
\11\ United States v. Microsoft Corp., No. 00-5212,
Order (Aug. 2, 2001) (per curiam).
---------------------------------------------------------------------------
CIS" lengthy recitation of cases indicating that a Tunney
Act court must accept a lesser remedy than might be obtained after
trial is irrelevant. CIS, 66 Fed. Reg. at 59475-76. None of
these cases arose in the context of a post-trial settlement of a
Section 2 monopolization claim and thus none resolved whether the
remedial standard adopted by the federal courts in a fully litigated
antitrust case must be jettisoned if the government subsequently
agrees to a consensual decree. \12\ More importantly, the Department
has not offered any statutory or policy basis 1o justify its wooden
invocation of Tunney Act dicta to this case. By failing to
articulate any legitimate justification for the deference it insists
upon, the Department's position suggests that it is designed to
shield the merits of the decree from critique by the Court and to
mask the weakness of the proposed settlement, rather than to satisfy
any compelling institutional or constitutional policy.
---------------------------------------------------------------------------
\12\ The Department's reliance on United States I,. BNS,
Inc., 858 F.2d 456 (9 th Cir. 1988), is especially problematic. CIS,
66 Fed. Reg. at 59476. In BNS, a merger case, the public interest
"could be harmed irreparably by permitting a merger to become
a fait accompli" while the district court deliberated on the
adequacy of the decree's provisions. 858 F.2d at 462. The proposed
Microsoft settlement could not be more different. This is not a
merger proceeding. Indeed, the public interest would be harmed
profoundly if the Court accepts a relief proposal, like the PFJ,
that is plainly inadequate to restore competition or eliminate the
widespread anticompetitive practices whose illegality was squarely
affirmed by the Court of Appeals. Accordingly, the Department's
citation to BNS for the proposition that this Court cannot
"engage in an unrestricted evaluation of what relief would
best serve the public," id., is both highly misleading and
inapplicable.
---------------------------------------------------------------------------
The only suggestion in the CIS as to any basis for a limited
scope of judicial review is just wrong. The Department insists that
a different relief standard is "particularly"
appropriate "where, as here, court's review of the decree is
informed not merely by the allegations contained in the Complaint,
but also by the extensive factual and legal record resulting from
the district and appellate court proceedings." CIS, 66 Fed.
Reg. at 59476. That has things backwards. In normal Tunney Act
cases, the law is clear that respect is to be accorded to the
Department's antitrust enforcement judgments w its
"perceptions of the market structure and its view of the
nature of the case"--precisely because there is no
factual or legal record before the court. Microsoft I, 56 F.3d at
1448. When a Sherman Act case has been litigated and affirmed on
appeal, however, the district court is fully capable of assessing
the proposed remedy against that record and its "familiarity
with the market involved." Id. at 1461. \13\ In short, the
Court of Appeals" mandate, and its application of traditional
monopolization remedy law, is the applicable standard against which
to measure the scope and efficacy of the PFJ.
---------------------------------------------------------------------------
\13\ The Court of Appeals admonished and reversed the
prior District Judge in this case, in part, for entering a decree
based largely on the relief proposed by the government. Although the
Justice Department's officers "are by reason of office obliged
and expected to consider w and to act--in the public
interest," Microsoft 111. 253 F.3d at 34 (quoting Judge
Jackson), that did not excuse the District Court from its
independent obligation to consider and explain how the relief
proposed would meet the sealed objectives of antitrust remedies.
Microsoft I!!. 253 F.3d at 34. Nothing less is warranted now.
---------------------------------------------------------------------------
C. The Court Owes No Tunney Act Deference To the Department in
this Unprecedented Post-Trial, Post-Appeal Settlement The language,
legislative history and purpose of the Tunney Act all indicate that
the relatively deferential attitude ordinarily adopted by courts to
antitrust settlements should not constrain this Court's inquiry into
the legal sufficiency and acceptability of the remedy proposed by
Microsoft, the Department and the Settling States.
The leading authority on Tunney Act deference is not at all to
the contrary. In Microsoft I, the DC Circuit reversed the district
judge for "construet[ing] his own hypothetical case and then
evaluat[ing] the decree against that case." 56 F.3d at 1459.
Here, no one is asking the Court to consider claims the government
chose not to pursue. Quite to the contrary. ProComp asks the Court
to grant effective relief for those claims that the Department
actually brought and on which it has already prevailed.
The difference in judicial deference owed to the Executive
Branch is easily understood against this backdrop. The Tunney Act
was created as a "check on prosecutorial discretion," In
re IBM, 687 F.2d 591,595 (2d Cir. 1982), that is, "a check..,
on the government's expertise m or at the least, its exercise of
it--even on its good faith." United States v. Gillette
Co., 406 F. Supp. 713, 715 (D. Mass. 1975). The concern of Congress
was the predominance of pretrial antitrust settlements that
otherwise would never reach a courtroom, \14\ For these reasons, the
Microsoft I decision cautions that a district court's Tunney Act
obligation to avoid delving too deeply into the substantive merits
of antitrust settlements arises because "there are no findings
that the defendant has actually engaged in illegal practices."
Microsoft I, 56 F.3d at 1460 (emphasis in original). .
---------------------------------------------------------------------------
\14\ H.R. REP. NO. 93-1463 (1974) ("HOUSE
REPORT"). Note, The ITT Dividend: Reform of Department of
Justice Consent Decree Procedures, 73 colum. L. Rev. 594 (1973).
---------------------------------------------------------------------------
That is obviously not the case here. Microsoft's liability for a
wide variety of exclusionary practices violative of Section 2 of the
Sherman Act has been adjudicated and affirmed on appeal. In
contrast, it is clear that the Tunney Act was predicated on the
assumption that proposed consent decrees would be presented in the
context of pretrial settlements over which the courts had yet to
engage in an exercise of judicial power. See 15 U.S.C.
16(e)(1) (district court must "evaluate the
competitive impact of... termination of alleged violations
...."); 16(e)(2) (court must consider "the
public benefit, if any, to be derived from a determination of the
issues at trial"). Unlike the ordinary Tunney Act situation,
in this case it is indisputably not correct to conclude that
"[r]emedies which appear less than vigorous may well reflect
an underlying weakness in the government's case." Microsoft I,
56 F.3d at 1461.
The Tunney Act's underlying principles of judicial restraint
applicable to the exercise of prosecutorial discretion--deeply
rooted in separation of powers--simply do not apply here. \15\
In the typical Tunney Act case, courts have made "no judicial
finding of relevant markets, closed or otherwise, to be opened or of
anticompetitive activity to be prevented," is by definition
not present in a post-appeal antitrust settlement. Maryland v.
United States, 460 U.S. 1001, 1004 (1983) (per curiam) (Rehnquist,
J., dissenting). The separation of powers concerns in a post-trial
settlement are actually reversed. \16\ The source of Tunney Act
deference is that "the court's authority to review a decree
depends entirely on the government's exercising its prosecutorial
discretion by bringing a case in the first instance."
Microsoft I, 56 F.3d at 1459-60 (emphasis added). In contrast,
deferential review of a post-trial settlement in a fully litigated,
finally appealed antitrust prosecution would directly contradict the
"mandate rule" of Cascade Natural Gas and would be
inconsistent with this Court's Article III obligations.
---------------------------------------------------------------------------
\15\ The purposes of the Tunney Act are not implicated in
a proposed post-trial settlement of a Government. Section 2
prosecution that has already been affirmed on appeal. There is no
risk of excessive secrecy, because the remedy phase of a litigated
antitrust case necessarily takes place in an open judicial process
dining which, based on the trial record and l/ability findings, the
district determines whether the government's requested relief
adequately remedies the defendant's violations of the antitrust
laws. Nor is there any risk that judicial review of a proposed post-
appeal consent decree will discourage government antitrust
settlements, as the Department retains the power--which it
exercised long ago in this case -whether to initiate an antitrust
prosecution or settle.
\16\ The courts have therefore distinguished between a
court's involvement in "the executive branch's decision to
abandon litigation," which "might impinge upon the
doctrine of separation of powers," and "[j]udicial
approval of consent decrees under the [Tunney] Act," which is
"an entirely distinct proposition because the decree is
entered as the court's judgment." In re IBM Corp., 687 F.2d
591,602 (2d Cir. 1982).
---------------------------------------------------------------------------
The Court of Appeals has explained that because there are
"constitutional difficulties that inhere in this
statute," it is "inappropriate for the [district] judge
to measure the remedies in the decree as if they were fashioned
after trial." Microsoft I, 56 F.3d at 1461. The converse is
true when a remedy is in fact fashioned after trial. In that
situation, the court has already made the factual and legal findings
that do not exist in the ordinary consent decree situation, and
therefore is not required to "give due respect to the Justice
Department's perception of the market structure and its view of the
nature of the case." Id. at 1461.
[[Page 28982]]
In light of these serious constitutional concerns, this Court
should not and cannot accept a proposed decree that falls short of
the remedy that the Court would impose based on its own, independent
assessment of the record and the Court of Appeals" remand
mandate. The Court is undoubtedly aware of the long-standing maxim
that constitutional questions are to be avoided if a statute can be
interpreted so as not to raise them. E.g., Richmond Screw Anchor
Co., 275 U.S. 331, 346 (1928). In the context of this unprecedented
Tunney Act case, simple prudence dictates that the Court should
construe the Act to dispense with deference to the government where
liability has been adjudicated and affirmed on appeal, and thus
avoid any possibility of a constitutional challenge to its remand
decision on remedies.
D. Tile AT&T. Model is Instructive by Conducting a Searching
Inquiry into the Scope, Adequacy and Effectiveness of the Proposed
Decree Before turning to a substantive critique of the PFJ, it is
appropriate to discuss the close parallels between Microsoft and the
last major monopolization settlement presented by the Department and
decided by this Court (Harold Greene, J.) under the Tunney Act.
United States v. AT&T, 552 F. Supp. at 151.
Before the AT&T settlement was proposed, Judge Greene had
heard the vast majority of the evidence--on all issues except
remedy--and had denied AT&T's motion to dismiss on the
merits after the close of the government's case-in-chief. United
States v. AT&T, 524 F. Supp. 1336, 1380 (D.DC 1981). Following a
wide-ranging Tunney Act process that included evidentiary hearings,
third-party submissions, and several days of oral augment, Judge
Greene declined to approve the decree as proposed--even though
it required divestiture of the Bell system--because he
concluded that it was substantively inadequate, precluded the Court
from effective oversight and enforcement, and posed a risk of
harming third parties.
The Judge insisted upon substantial modifications to the
proposed decree before he would enter the settlement under the
Tunney Act's public interest standard. In doing so, Judge Greene
explained that ,47&T was "not an ordinary antitrust
case." 552 F. Supp. at 151. Instead, in that case as in this
one, the proposed decree was an "enormous undertaking"
having "significant consequences for an unusually large number
of ratepayers [i.e., consumers], shareholders... and
competitors." 552 F. Supp. at 152. In addition, and also like
in this case, the Court would "be able to render sound
judgments" because it "ha[d] already heard what probably
amounts to well over ninety percent of the parties" evidence
both quantitatively and qualitatively, as well as all of their legal
arguments." Id. For these reasons, Judge Greene concluded that
"it does not follow that [the Court] must unquestionably
accept a consent decree as long as it somehow, and, however
inadequately, deals with the antitrust problems implicated in the
lawsuit." Id. Instead, Judge Greene reasoned it was his
responsibility to ensure the decree protected consumers, opened the
relevant markets to effective competition in a timely manner, and
would be readily enforceable. The Supreme Court affirmed. Maryland
v. United States, 460 U.S. 1001 (1983) (per curiam); California v.
United States, 464 U.S. 1013 (1983)(per curiam).
Like AT&T, this has been a long, exceedingly complex and
very hard-fought case. Unlike AT&T, however, in this litigation
the proposed settlement comes after the trial was completed and
after the courts finally adjudicated the defendant's liability.
Also" unlike AT&T, moreover, here the government has not
succeeded in obtaining via settlement anything close to the relief
it sought on the merits from this Court. We have submitted our view
that deference to the Department of Justice is inappropriate in this
unique case. The A T&7 model provides a benchmark for the scope
of Tunney Act judicial review which, if anything, should be exceeded
given the far more advanced procedural posture here. This Court
cannot err by following an expanded AT&T-like procedure. The
converse may not be true.
In sum, the Litigating States must be allowed to proceed free
from the interference that early Court approval of the proposed
decree would entail. When the Court does assess and rule on the
decree, it must undertake a thorough, independent analysis of
whether the settlement protects the public interest and satisfies
the DC Circuit's mandate for effective relief. Delegating this core
judicial responsibility to the Department would violate the Tunney
Act, raise serious separation-of-powers concerns and leave the
public without effective redress against a proven monopolist.
III. THE PROPOSED FINAL JUDGMENT IS INSUFFICIENT UNDER ANTITRUST
REMEDIES LAW AND DOES NOT MEET THE STANDARD ARTICULATED BY THE
DEPARTMENT
The proposed settlement does not meet the DC Circuit's remedial
standard, quoted above, to terminate the monopoly, deny the
defendant its ill-gotten fruits, and ensure that monopoly practices
cannot arise in the future. The CIS does not even cite, let alone
argue that the PFJ meets the DC Circuit's remedial standard. Indeed,
the PFJ does not even meet the lesser standard, articulated in the
CIS, to "(1) end the unlawful conduct; (2) "avoid a
recurrence of the violation" and others like it; and (3) undo
its anticompetitive consequences." CIS, 66 Fed. Reg. at 59465
(citations omitted).
In fact, the proposed settlement fails to undo the competitive
harm from the core antitrust violations affirmed by the Court of
Appeals, and does not even address a series of additional violations
of the Sherman Act upheld by the Court of Appeals.
A. The Decree Does Not "Undo" the Competitive Harm
Resulting from Microsoft's Anticompetitive Practices
Netscape's browser and Sun's Java were revolutionary middleware
technologies which allowed Independent Software Vendors
CISVs") to write programs that would run on any operating
system, thus potentially making hardware platforms--and
correspondingly, operating systems--a matter of competitive and
technological indifference. Microsoft both recognized and feared
that this new model for software development would be an inflection
point in the computer industry, \17\ and accordingly launched a
multi-faceted campaign to destroy the economic and technological
viability of these forms of competing middleware.
---------------------------------------------------------------------------
\17\ Microsoft accepts the concept of inflection points in
technology markets, and unsuccessfully argued to the DC Circuit that
the possibility of inflection points meant that it did not enjoy
monopoly power in the operating systems market. Brief of Appellant
Microsoft Corporation, United States v. Microsoft Corp., at 16 (DC
Cir. filed Nov. 27, 2000) ("Microsoft DC Circuit Brief').
---------------------------------------------------------------------------
In this case, Microsoft early on recognized middleware as the
Trojan horse that, once having, in effect, infiltrated the
applications barrier to entry, could enable rival operating systems
to compete .... Alerted to this threat, Microsoft strove over a
period of approximately four years to prevent middleware
technologies from fostering the development of enough full-feature,
cross-platform applications to erode the applications barrier to
entry. United States v. Microsoft Corp., 87 F. Supp.2d 30,
38-39 (D.DC 2000) (Conclusions of Law), affirmed in part, 253
F.3d 34 (DC Cir.), cert. denied, 530 U.S. 1301 (2000).
The Court of Appeals affirmed the illegality of Microsoft's
campaign to destroy the competitive threat of Internet browsers and
cross-platform Java technology. Further, as the Court of Appeals
explained, Sun's distribution arrangement with Netscape was key to
.,"achiev[ing] the necessary ubiquity on Windows"
required for Java to serve "as the ubiquitous platform for
software development." Microsoft HI, 253 F.3d at 74, 75. By
foreclosing Netscape from the market, Microsoft thus eliminated the
ability of the Java runtime environment to develop into a
ubiquitous, competitive alternative to Windows for applications
development. \18\ Today, the anticonsumer effects are even more
clear because Microsoft has integrated its own Internet browsing and
Java-like runtime technologies into Windows.
---------------------------------------------------------------------------
\18\ The CIS agrees that distribution of Java by Netscape
"creat[ed] the possibility that Sun's Java implementation
would achieve the necessary ubiquity on Windows to pose a threat to
the applications barrier to entry." CIS at 16, 66 Fed. Reg. at
59463
---------------------------------------------------------------------------
No other middleware technologies introduced since Netscape and
Java have evolved to the point where they could directly challenge,
and substitute for, Windows. While a variety of middleware is
available today, most if not all presently lack the capability to
serve as major platforms for software development. As Professor
Arrow explains, no middleware entrant currently exists that offers
the user base, head start and technological capability to supplant
Windows, characteristics enjoyed by both Netscape and Java before
Microsoft eliminated them as serious competitive threats. Arrow
Decl. 25-30. Middleware is more often a short-run
complement to the operating system rather than a substitute. It is
only when particularly "disruptive technologies" can
achieve the distribution scale and scope of exposed APIs to permit
substitution among operating systems--the
"commoditized" operating systems feared by
[[Page 28983]]
Microsoft--that middleware becomes a long-run competitive
substitute for the operating systems. Id. 16-17,
33-34. Powerful middleware substitutes for Microsoft's
operating systems monopoly just do not come along every week. Id.
18 ("Technological disruptions such as the middleware
threat of the mid-1990s do not occur continually.")
Microsoft's anticompetitive practices destroyed the prospect
that middleware could effect such a fundamental change (sometimes
called a "paradigm shift') in the operating system market and,
thus, have substantially entrenched its monopoly power.
"Microsoft's significantly enhanced ability to stem potential
middleware threats is the result, in very substantial part, of its
past anticompetitive campaign against Netscape." \19\ As
Professor Arrow explains, "[a]t times of technological
disruption, the forces of dynamic competition play an especially
important role." Id. 18. See Findings of Fact 377
("Microsoft "successfully denied" Netscape status
of "the standard software for browsing the Web"). \20\It
will be "exceedingly difficult now, even with the best of
remedies, to re-establish middleware fully as the kind of
competitive threat to Microsoft's monopoly power that it posed in
the mid-1990s." Arrow Decl. 5, 18, 71. Thus, as Professor
Arrow concludes, it is "highly unlikely" that
"market forces alone will lead to the development of
innovative middleware that creates the same competitive risk to
Microsoft that it faced from Navigator and Java in 1995." Id.
30.
---------------------------------------------------------------------------
\19\ Henderson Decl., supra, 73.
\20\ "Microsoft's campaign succeeded in
preventing--for several years, and perhaps
permanently--Navigator and Java from fulfilling their potential
to open the market for Intel-compatible PC operating systems to
competition on the merits." United States I,. Microsoft Corp.,
87 F.Supp.2d 30, 38 (2000) (Conclusions of Law).
---------------------------------------------------------------------------
Despite these compelling facts, the Department and the Settling
States have proposed middleware provisions that ignore the core
Internet browser and Java runtime technologies in favor of
undefined, future middleware that may or may not present the same
viable cross-platform capabilities. The Department's remedy ratifies
the illegal acts that Microsoft committed, instead of moving the
market forward to where it would be today had Netscape and Java been
permitted to grow without illegal Section 2 constraint. \21\ The
Supreme Court, however, has squarely rejected the proposition that
"antitrust violators may not be required to do more than
return the market to the status quo ante." Ford, 405 U.S. at
573 n.8.
---------------------------------------------------------------------------
\21\ The Competitive Impact Statement explains that the
objective of the proposed decree is "to restore the
competitive threat that middleware products posed prior to
Microsoft's unlawful conduct." CIS, 66 Fed. Reg. at
59463-64.
---------------------------------------------------------------------------
Assistant Attorney General James explains that the settlement is
designed "to recreate the potential for the emergence of
competitive alternatives to Microsoft's operating system monopoly
through middleware innovations." \22\ But without identifying
any comparable middleware products today or predicting that truly
competitive middleware will be introduced in the near-term future
that could become substitutes for Windows, the Department does not
have a verifiable basis to project that such a remedy will have any
impact on competition. The Department's proposed settlement posits
only hypothetical future entry to counteract the very real monopoly
power of Windows today.
---------------------------------------------------------------------------
\22\ James Senate Testimony, supra, at 10.
---------------------------------------------------------------------------
In addition, Microsoft's integration of Internet browsing and
runtime environment technology into Windows allows Microsoft today
to prevent any competing middleware technology from achieving
ubiquity, thus preserving the applications barrier to entry.\23\
Unlike the Netscape and Java technologies that Microsoft's unlawful
practices eliminated as serious competitive threats, however,
Microsoft middleware is not cross-platform. Consequently, by
sanctioning Microsoft's integration of middleware into Windows and
by failing to redress its illegal campaign against Netscape and
Java, the proposed decree enhances, rather than reduces, Microsoft's
operating systems monopoly power. In short, the PFJ does not undo
the competitive harm resulting from Microsoft's unlawful assault on
Netscape and Java, and therefore, fails to meet the requirements of
established antitrust law and the lesser standard the Department has
set.
---------------------------------------------------------------------------
\23\ See Findings of Fact 397 ("By bundling
its version of the Windows JVM with every copy of Internet Explorer
and expending some of its surplus monopoly power to maximize the
usage of Interact Explorer at Navigator's expense, Microsoft endowed
its Java runtime environment with the unique attribute of
guaranteed, enduring ubiquity across the enormous Windows installed
base.").
---------------------------------------------------------------------------
B. The Proposed Settlement Fails to Deny Microsoft the Ill-
gotten Fruits as Required by Established Antitrust Law
Equally importantly, in clear denial of the standards under
established antitrust remedies law, the decree permits Microsoft to
retain the fruits of its statutory violations. See United Shoe, 391
U.S. at 252. It "would be inimical to the purpose of the
Sherman Act to allow monopolists free rein to squash nascent, albeit
unproven, competitors at will--particularly in industries
marked by rapid technological advance and frequent paradigm
shifts." Microsoft III, 253 F.3d at 79. Consequently, because
the PFJ fails to "deny to [Microsoft] the fruits of its
statutory violation," id. at 103, it cannot be approved by
this Court.
There are remedial alternatives available to restore Internet
browsers and cross-platform runtime technology to the position they
would have achieved--ubiquitous distribution without any
"lock-in" to the Windows operating systems D in the
absence of Microsoft's violations. The open source Internet Explorer
licensing requirement proposed by the Litigating States does
precisely that. A remedy that acts directly to undermine the
applications barrier to entry, for instance by requiring
"porting" of the Office suite to other operating system
platforms, would act to commoditize the operating system and thus
allow operating systems competition to occur on the basis of
efficiency, technology and consumer demand.\24\ See Arrow Decl.
46-49.\25\
---------------------------------------------------------------------------
\24\ Assistant Attorney General James has suggested that
such relief would be improper because no "essential
facilities" claim was made by the government. James Senate
Testimony, supra, at 10 (emphasis added). But a monopoly maintenance
"must cant" remedy designed to redress artificial
applications barriers to entry does not need to be supported by an
essential facilities claim. To the contrary, in its 1998 Complaint
to this Court, the government expressly sought as one form of
injunctive relief that Microsoft be required to "include with
[the Windows] operating system the most current version of the
Netscape Internet browser." Complaint, VII.2.e.1
(Prayer for Relief). Thus, the very "must-carry"
obligations that the Department now opposes were the precise relief
it initially sought.
\25\ Professor Rebecca Henderson of the MIT Sloan School
of Management, a remedies expert for the government, testified by
affidavit in 2000 that "[t]he availability of the world's most
popular office productivity suite on alternative platforms would
serve to reduce the barriers to entry protecting Microsoft's
monopoly, which will, in turn, increase the potential for
competition in the PC operating systems market." Declaration
of Rebecca M. Henderson, United States v. Microsoft Corp., No.
98-1232 (TPJ), at 22 (D.DC filed April, 28, 2000).
---------------------------------------------------------------------------
In sharp contrast, the proposed decree is described in the CIS
as encouraging the development of future technologies that
"over time could help lower the applications barrier to
entry." CIS, 66 Fed. Reg. at 59467 (emphasis added). As no
significant platform innovations with the characteristics necessary
to substitute for Windows have developed since Microsoft's multi-
faceted predatory campaign was launched, there is simply no reason
to believe that new Netscape and Java-like middleware competition
could flourish today, especially under the decree, which not only
does not lower the applications barrier to entry--it actually
preserves and strengthens. Therefore, the remedy fails to meet the
standard set by established antitrust remedies law by refusing to
deny Microsoft the fruits of its unlawful acts, or providing any
viable alternative mechanism.
C. The Decree Does Not Terminate or Redress Numerous Practices
that the Court of Appeals Found to Violate the Sherman Act
The decree now proposed by the government improperly permits
Microsoft to continue some of the very exclusionary practices that
the Court of Appeals explicitly held were illegal. Both established
antitrust remedies law and the lesser standard articulated by the
Department require that the settlement terminate and redress the
unlawful conduct affirmed by the Court of Appeals. The settlement
does not.
1. Integration of Windows and Middleware
The PFJ does not preclude Microsoft from integrating middleware
software, or any other technology that could erode the applications
barrier to entry, into its operating system products. Hence, the
proposed decree not only does not end Microsoft's practice of
binding competing technologies to Windows, but allows middleware
integration to continue unabated in the future. This failure is
impossible to square with the Court of Appeals" decision.
First, the Court specifically held that "Microsoft's decision
to bind IE to Windows 98" by "commingling of
[[Page 28984]]
code" was an unlawfully "exclusionary" practice.
Microsoft III, 253 F.3d at 64-67. The Court of Appeals"
discussion is worthy of close attention became it sheds light on the
magnitude of the PFJ's failure with respect to product integration.
The Court explained that "[t]echnologically binding IE to
Windows ... both prevented OEMs from pre-installing other browsers
and deterred consumers from using them," Microsoft III, 253
F.3d at 64 (citing Findings of Fact 159), and thus that
"Microsoft's... commingling of browser and operating system
code constitute[s] exclusionary conduct, in violation of
2." Id. at 67. Moreover, the Court of Appeals emphasized
that its Section 2 holding rebuffed Microsoft's arguments "not
only that its integration of IE into Windows is innovative and
beneficial, but also that it requires non-removal of IE." Id.
at 89. Second, the Court summarily denied Microsoft's rehearing
petition challenging both the factual basis and the legal
sufficiency of the code commingling holding.\26\ The Court denied
without opinion Microsoft's rehearing petition, in which the
defendant Microsoft argued that "'commingling of
code" is not "per se pernicious or even
suspicious"' and urged the DC Circuit to (1) reverse the
applicable findings of fact, and (2) limit its liability holding
with respect to bundling of Internet Explorer to Microsoft's refusal
to permit "[r]emoval of end-user access by OEMs." \27\
---------------------------------------------------------------------------
\26\ United States v. Microsoft Corp., No. 00-5212,
Order (Aug. 2, 2001) (per curiam).
\27\ Microsoft Corporation's Petition for Rehearing,
United State v. Microsoft Corp., Nos. 00-5212, 5213, at 2, 4
(DC Cir. filed July 18, 2001) (quoting United States v. Microsoft
Corp., 147 F.3d 935, 958 (DC Cir. 1998) (Wald, J., concurring in
part and dissenting in part)) ("Microsoft DC Cir. Rehearing
Petition").
---------------------------------------------------------------------------
In spite of these repeated holdings, the PFJ reverses course and
adopts the position for which Microsoft argued on rehearing. The
proposed settlement allows OF. Ms to remove "access to"
middleware--that is, icons w from the desktop and related areas
of the Windows user interface. Conversely, it permits Microsoft to
commingle any code and prohibits OEMs from deleting Microsoft
middleware code from the operating system software. Thus, although
the Court of Appeals expressly reiterated that technological
integration of Interact Explorer violated Section 2, the PFJ fails
to impose any limits whatsoever on current or future bundling of
middleware and operating systems software.
Assistant Attorney General James has testified that "[t]he
court of appeals ruled that, albeit with some limits, Microsoft
could lawfully integrate new functions into the operating
system."\28\ This is a mischaracterization. The DC Circuit
remanded the tying claim for rule of reason analysis, Microsoft III,
253 F.3d at 84-95, but did not conclude that any product
integration litigated at trial was "lawful." The only
general statement the Court made was that the "integration of
additional software functionality into an operating systems"
is not a per se unlawful Section 1 offense.\29\
---------------------------------------------------------------------------
\28\ James Senate Testimony, supra, at 14 (emphasis
added).
\29\ For Section I purposes, the DC Circuit ruled that
technological innovation is subject to an efficiency-harm balancing
test under the rule of reason. Microsoft II1, 253 F.3d at 90, 93.
Given the lack of an efficiency justification by Microsoft for
having commingled the browser with the operating system, it is
highly likely that the Government would have prevailed on the
Section I claim under the "rule of reason" test. See/d.
at 66 (Microsoft does not "argue that either excluding IE from
the Add/Remove Programs utility of commingling code achieves any
integrative benefit").
---------------------------------------------------------------------------
2. Coercion and Market Allocation
The DC Circuit affirmed that Microsoft's coercion of Apple, by
threatening to withhold porting of Office to the Macintosh operating
systems platform, was unlawful. The District Court likewise found
that Microsoft attempted (this time without success) to coerce Apple
into abandoning development of its QuickTime software, in order to
limit "the development of multimedia content that would run
cross-platform." Findings of Fact 110.
Microsoft also coerced Intel--Microsoft's partner in the
IBM-compatible PC market m into abandoning its work on creation of
Java-compatible multimedia software.\30\ Microsoft III, 253 F.3d at
77. In fact, the Court specifically ruled that "Microsoft's
threats to Intel were exclusionary, in violation of 2
of the Sherman Act." Id. at 78 (emphasis added). And the
District Court, again without objection by the Court of Appeals,
also found that Microsoft pressured Intel to cease development of
"Native Signal Processing ('NSP') software, [which] would
endow Intel microprocessors with substantially enhanced video and
graphics performance,"\31\ as well as "using revenues
from its microprocessor business to fund the development and
distribution of free platform-level software," \32\ in
order to "halt the development of software that presented
developers with a set of operating-system-independent
interfaces." \33\
---------------------------------------------------------------------------
\30\ See also Findings of Fact 388 ("Gates
told Intel's CEO in June 1996 that he did not want the Inter
Architecture Labs cooperating with Sun to develop methods for
calling upon multimedia interfaces in Windows."); Id.
404 ("Microsoft used threats to withhold Windows
operating-system support from Intel's microprocessors and often to
include Intel technology in Windows in order to induce Intel to stop
aiding Sun in the development of Java classes that would support
innovative multimedia functionality.").
\31\ Findings of Fact 95.
\32\ Findings of Fact 102.
\33\ Findings of Fact 94.
---------------------------------------------------------------------------
The proposed decree does not constrain Microsoft's ability to
engage in this sort of coercive conduct to impede competition from
potential middleware or other software rivals. Section III.F of the
PFJ precludes Microsoft only from "retaliating" against
ISVs and IHVs that develop or use competing platform software and
from entering into exclusive dealings with ISVs (but curiously not
IHVs) for platform software. It does not, however, deal with the use
of threats and coercion to compel adherence to Microsoft's
objectives short of an actual agreement.\34\ As both a legal and
practical matter, the PFJ fails to redress the Court of
Appeals" holding that Microsoft's "threats" to its
competitors and partners violated Section 2.
---------------------------------------------------------------------------
\34\ Under the antitrust laws, a firm has not as a matter
of law entered into an "agreement" with a distributor or
other party where it unilaterally declares its position and by
virtue of its economic power compels distributors to adhere to those
conditions. See Monsanto Co. v. Spray-Rite Svc. Corp., 465 U.S. 752,
764 n.9 (1984).
---------------------------------------------------------------------------
3. Deception and Product Sabotage
The Department recognizes that among the practices the DC
Circuit ruled unlawful was Microsoft's "attempt[s] to mislead
and threaten software developers in order to contain and subvert
Java middleware technologies that threatened Microsoft's operating
system monopoly." \35\ Yet the PFJ does not prohibit
Microsoft from misleading developers or, as it did with Java,
creating supposedly "open" software development tools
that, in reality, are compatible only with Windows. See Microsoft
III, 253 F.3d at 77. These sorts of practices are added in the
Litigating States remedy proposal.\36\ By preventing Microsoft from
intentionally sabotaging competing applications or middleware
products, and by requiring that if Microsoft implements open
industry standards it not "pollute" those standards with
proprietary, Windows-specific protocols and features, such relief
would constrain the exclusionary conduct held unlawful by the DC
Circuit. The Department's proposed settlement does not.
---------------------------------------------------------------------------
\35\ CIS, 66 Fed. Reg. at 59460. In related private
antitrust litigation, courts similarly have found that Microsoft
"create[d] the illusion that [a competing product] was
incompatible with Windows by inserting error messages conveying to
the user that either [the competing product] was incompatible with
Windows that [Microsoft's product] was the only environment in which
Windows could properly function." Caldera, Inc. v. Microsoft
Corp.. 72 F. Supp. 2d 1295, 1314 (D. Utah 1999).
\36\ Litigating States" Remedy Proposal, supra, at
12.
---------------------------------------------------------------------------
The Department's claim that the decree "ends"
Microsoft's unlawful practices is incorrect. It is also wrong as a
matter of remedies jurisprudence. Antitrust courts must "start
from the premise that an injunction against future violations is not
adequate to protect the public interest." \37\ In order
to prevent "a recurrence of the violation" found,
antitrust courts are not limited to imposing "a simple
proscription against the precise conduct [the violator] previously
pursued." \38\
---------------------------------------------------------------------------
\37\ Schine Chain Theatres, Inc. v. United States, 334
U.S. 110, 128 (1948).
\38\ National Soc'y of Prof. Eng'rs v. United States, 435
U.S. 679, 698 (1978).
---------------------------------------------------------------------------
Yet Assistant Attorney General James recently testified that the
government's remedy proposal is "focused on the specific
practices that the court [of appeals] had ruled
unlawful." \39\ This focus on specific practices does
not eliminate those practices. In any event, it is settled that
antitrust relief may prohibit even otherwise lawful conduct if it
"represents a reasonable method of eliminating the
consequences of the illegal conduct" or preventing its
resumption.\40\
---------------------------------------------------------------------------
\39\ James Senate Testimony, supra, at 6.
\40\ National Soc'y of Prof Eng'rs, 435 U.S. at 698;
United States v. U.S. Gypsum Co., 340 U.S. 76, 90 (1950) (Section 2
relief may "go beyond the narrow limits of the proven
violation"). Accord International Salt, 334 U.S. at 400;
DuPont. 366 U.S. at 327.
---------------------------------------------------------------------------
[[Page 28985]]
IV. THE API DISCLOSURE AND OEM FLEXIBILITY PROVISIONS OF THE
PROPOSED DECREE WILL NOT CREATE THE OPPORTUNITY FOR MIDDLEWARE
COMPETITION
The proposed decree neither provides future middleware
competitors with the API information needed to develop interoperable
products nor opens the OEM distribution channel to effective
competition from any such new entrants. To a surprisingly large
degree, the PFJ's provisions simply memorialize Microsoft's current
business practices. Indeed, the PFJ would not have thwarted
Microsoft's 1995-98 unlawful campaign against Net. scape and
Java had the decree been in place at that time.
As a consequence, the PFJ will discourage, rather than
encourage, investment and innovation in new middleware technology.
Future middleware competitors, faced with the very real prospect
that they may not be able to obtain necessary API information from
Microsoft or access to the OEM distribution channel, will have
virtually no incentive to invest in time development of new and
innovative middleware technology. Moreover, even if the PFJ actually
did "creat[e] the opportunity for software developers and
other computer industry participants to develop new middleware
products that compete directly with Microsoft," as the CIS
states, the five-year term of the proposed decree is far too short
to promote innovation and investment in middleware technology. In
short, under the PFJ the status quo that prompted the Department of
Justice and State Attorneys General to bring these actions against
Microsoft will perpetuate.
As the Supreme Court emphasized in its landmark ruling in the
DuPont antitrust case, "It]he proper disposition of antitrust
cases is obviously of great public importance, and their remedial
phase, more often than not, is crucial. For the suit has been a
futile exercise if the Government proves a violation but fails to
secure a remedy adequate to redress it." United States v. E.I.
du Pont de Nemours & Co., 366 U.S. 316, 323 (1961). Under any
appropriate standard for judging the effectiveness of antitrust
remedies, the key portions of the PFJ are just such an exercise in
futility.
A. The Proposed Decree's Provisions for Information Disclosure
Do Not Assure that Future Middleware Competitors Will Have Access to
Necessary Interoperability Information The Department proclaims that
the API disclosure provisions of the proposed decree will create
middleware competition by requiring Microsoft to disclose all of the
interfaces and related technical information that Microsoft's
middleware uses to intemperate with the Windows operating
system." CIS, 66 Fed. Reg. at 59460.\41\ That is simply not
accomplished by a literal reading of the proposed decree's API
provisions. The proposed decree does not provide middleware
competitors with the information needed to intemperate, but rather
allows Microsoft itself to decide whether, when and which APIs to
release to potential competitors.
---------------------------------------------------------------------------
\41\ See also CIS, 66 Fed. Reg. at 59468 (decree
"requires Microsoft to disclose to ISV, IHVs, LAPs, ICPs and
OEMs all of the interfaces and related technical information that
Microsoft Middleware uses to intemperate with any Windows Operating
System Product").
---------------------------------------------------------------------------
There are four provisions of the proposed decree that seek to
address the issues of information disclosure for the purposes of
enabling interoperability. Section III.D addresses the disclosure of
APIs and Section III.E addresses the disclosure of communications
protocols with server operating systems products. These provisions
need to be read in concert with Section HI J, which substantially
narrows the scope of required disclosures, and Section HI.L5, which
potentially undermines the information disclosure regime by granting
to Microsoft rights to insist on cross licenses to intellectual
property developed through the use of Microsoft's APIs. Lastly,
these provisions are dependent on a multitude of definitions which
include Sections VI.A "APIs"; VI.B "Communications
Protocol"; VI.E "Documentation"; VI.J
"Microsoft Middleware"; VI.R "Timely
Manner"; VI.T "Trademarked"; and VI.U
"Windows Operating System Product." To understand the
impact of the PFJ on information disclosure, all these provisions
must be read together, along with their subordinate definitions and
exceptions.
1. The API Provision's Scope is Far Too Narrow.
The PFJ falls short of requiting the disclosure of APIs that
innovative middleware technologies might need. Section III.D
requires only that Microsoft disclose: "the APIs and related
Documentation that are used by Microsoft Middleware to intemperate
with a Windows Operating System Product." PFJ, 66 Fed. Reg. at
59454 (emphasis added). This obligation is plainly too narrow to
support real middleware competition. If a potential competitor
creates a new form of middleware that provides innovative
functionalities, it will not be entitled to the necessary APIs, if
those APIs are not "used by Microsoft Middleware to
interoperate with a Windows Operating System Product" within
the scope of Section III.D. This necessarily limits future
innovation to the parameters set by the breadth of Microsoft's
Middleware functionality, it creates a regime where competitors must
always follow, as opposed to lead, middleware innovations. For
example, when Netscape was attempting to achieve full 38
interoperability with the Windows operating system in 1995, Netscape
required the APIs for Windows, not merely the APIs between Windows
and Microsoft's browser, which was just in the process of
development.\42\
---------------------------------------------------------------------------
\42\ The district court's "Internet Order" did
not suffer from this problem because Section 3.b of its API
disclosure provisions broadly required the release of APIs that
Microsoft employs to enable (i) Microsoft applications to
interoperate with Microsoft Platform Software (defined as both
operating systems and middleware), (ii) Microsoft middleware to
interoperate with a Microsoft operating systems product (or
Microsoft middleware distributed with a Microsoft operating systems
product, and (iii)any Microsoft software installed on one computer
to interoperate with a Microsoft operating systems or middleware
product installed on another computer. The proposed decree's use of
"Microsoft Platform Software" is confined to Sections
III.A and III.F.I (retaliation) and Section III.F.2 and III.G.I
(exclusivity), but has no application to API disclosure. United
States v. Microsoft, Final Judgment (D.DC 2000) ("Interim
Order").
---------------------------------------------------------------------------
Further, under Section III.D, Microsoft must disclose "for
the sole purpose of interoperating with a Windows Operating Systems
Product... APIs and related documentation that are used by Microsoft
Middleware to interoperate with a Windows Operating System
Product." PFJ, 66 Fed. Reg. at 59454. Windows Operating
Systems Products are defined in Section VI.U to include Windows 2000
Professional and Windows XP for the PC. Thus, Microsoft does not
have to disclose APIs its middleware uses to interoperate with
Microsoft operating systems on servers or handhelds. And for those
APIs that Microsoft does disclose, Microsoft is permitted to limit
their use by third parties "solely for the purpose of
interoperating with a Windows Operating System Product." Id.
at 59454. Thus, Microsoft can distribute middleware products that
interoperate with all of its client and server operating systems
along with its applications such as Office, while competitors"
middleware products will be limited to using any disclosed APIs to
intemperate only with PC versions of Windows. This limitation
certainly does not provide a level playing field for competitive
middleware.
2. The API Provision of the PFJ Constructs an Illusive Framework
for Disclosure of Interoperability Information
Close review of the plain language of the API disclosure
provision and its subordinate definitions reveals that the provision
is quite illusory. A careful examination of these complex provisions
of the proposed decree--represented graphically in Figure 1 on
the next page reveals that, despite their length, they are
nonetheless circular and illusory. ??
Section III.D sets forth the basic obligation that Microsoft
must disclose to competitors "the APIs and related
Documentation that are used by Microsoft Middleware to interoperate
with a Windows Operating System Product." The PFJ therefore
establishes a regime where Microsoft must disclose the
"APIs," a defined tern, that are used by
"Microsoft Middleware," a defined term, to intemperate
with a "Windows Operating System Product," a defined
term.
a. Defined Terms Within the API Disclosure Provision Leave All
Material Disclosure Determinations to Microsoft.
The defined terms within Section III.D reveal that the PFJ's API
disclosure obligations are without substance. As stated, the
provision calls for the disclosure of "APIs" between
"Microsoft Middleware" and the "Windows Operating
System Product." Taking those definitions in reverse order
demonstrates that the Department cannot possibly predict precisely
what information is required to be disclosed under Section III.D
because most of the definitions are left to Microsoft.
First, Section VI.U provides the definition of a "Windows
Operating System Product."
[[Page 28986]]
A Windows Operating System Product is defined as: the software code
(as opposed to source code) distributed commercially by Microsoft
for use with Personal Computers as Windows 2000 Professional,
Windows XP Home, Windows XP Professional, and successors to the
foregoing, including the Personal Computer versions of the products
currently code named "Longhorn" and
"Blackcomb" and their successors, including upgrades,
bug fixes, service packs, etc. The software code that comprises a
Windows Operating System Product shall be determined by Microsoft in
its sole discretion. (emphasis added)
The CIS explains that, pursuant to the proviso in the final
sentence, this definition means that "the software code that
comprises a Windows Operating System Product is determined by
Microsoft's packaging decisions (i.e., by what it chooses to ship as
"Windows')." CIS, 66 Fed. Reg. At 59459. Under this
approach, therefore, Microsoft retains the unilateral discretion to
determine what constitutes Windows for purposes of its API
disclosure obligations. If middleware software is included with
Windows, it is thus part of a Windows Operating System Product for
the purposes of this definition. It follows that if Microsoft
chooses "at its sole discretion" to include middleware
as part of Windows it escapes the disclosure requirements of
Section III.D.
The other "bookend" of Microsoft's information
disclosure requirement rests on definition VI.J, "Microsoft
Middleware." First, it is critical to understand that
provision III.D does not invoke definition VI.K "Microsoft
Middleware Product," which clearly sets forth that
"Internet Explorer, Microsoft's Java Virtual Machine, Windows
Media Player, Windows Messenger, Outlook Express and their
successors" are "Microsoft Middleware Products."
Id. Rather, the provision rests on the far more ambiguous definition
of "Microsoft Middleware." Under definition VI.J,
Microsoft Middleware means: software code that
1. Microsoft distributes separately from a Windows Operating
System Product to update that Windows Operating System Product;
2. Is Trademarked;
3. Provides the same or substantially similar functionality as a
Microsoft Middleware Product; and
4. Includes at least the software code that controls most or all
of the user interface elements of that Microsoft Middleware.
Software code described as part of, and distributed separately
to update, a Microsoft Middleware Product shall not be deemed
Microsoft Middleware unless identified as a new major version of
that Microsoft Middleware Product. A major version shall be
identified by a whole number or by a number with just a single digit
to the right of the decimal point.
The weakness of this definition is immediately apparent. The
first prong of the definition requires Microsoft middleware to be
distributed "separately from a Windows Operating System
Product." Therefore, if Microsoft decides to include
middleware as part of Windows as it is entitled to do "in its
sole discretion" it cannot possibly be Microsoft Middleware
because it will not be "distributed separately."
Alternatively, because middleware is "Microsoft
Middleware" only if it is distributed "to update"
Windows, Microsoft can as easily avoid any API disclosure
obligations by distributing middleware as a separate application
rather than as a Windows update.\43\
---------------------------------------------------------------------------
\43\ The Competitive Impact Statement flatly
mischaracterizes this section in contending that the definition of
Microsoft Middleware captures what it calls
"'redistributable[s]" associated with Microsoft
Middleware Products." CIS, 66 Fed. Reg. at 59464. The
Department claims that "[i]f such a redistributable exists, as
they currently do for most Microsoft Middleware Products, then the
redistributable is Microsoft Middleware" because it is
"distributed separately" from Windows. Id. This
explanation, however, ignores the clause specifying that separate
distribution must be "to update" Windows under Section
VI.J.
---------------------------------------------------------------------------
Second, in order to qualify as Microsoft Middleware, the
middleware must also be "Trademarked." Section VI.T of
the PFJ defines "'Trademarked" in two ways. The
first clause of the definition states:
"Trademarked" means distributed in commerce and
identified as distributed by a name other than Microsoft?? or
Windows?? that Microsoft has claimed as a trademark or service mark
by (i) marking the name with trademark notices, such as ?? or TM, in
connection with a product distributed in the United States; (ii)
filing an application for trademark protection for the name in the
United States Patent and trademark Office; or (iii) asserting the
name as a trademark in the Unites States in a demand letter or
lawsuit.
PFJ, 66 Fed. Reg. 59459.
We cannot fathom the rationale for resting the definition of
Middleware on whether or not a particular technology is trademarked.
The Department contends that the definition is "designed to
ensure that the Microsoft Middleware ... that Microsoft distributes
(either for free or for sale) to the market as commercial products
are covered by the Proposed Final Judgment." CIS, 66 Fed. Reg.
at 59465. Yet, again it appears that exactly the opposite is true
based on the second part of the "Trademarked"
definition, which states:
Any product distributed under descriptive or generic terms or a
name comprised of the Microsoft?? or Windows?? trademarks together
with descriptive or generic terms shall not be Trademarked as that
term is used in this Final Judgment. Microsoft hereby disclaims any
trademark fights in such descriptive or generic terms apart from the
Microsoft?? or Windows?? trademarks and hereby abandons any such
rights it may acquire in the future. PFJ, 66 Fed. Reg. at 59459
(emphasis added).
Under this definition, if the product is distributed as
"Windows?? Media Player" as opposed to "Windows
Media?? Player" it would not be covered. That is because the
formulation of the name "Windows?? Media Player" would
be "comprised of the ... [Windows??] trademarks together with
a descriptive or generic term [Media Player]."
An analysis of each of Microsoft's Middleware Products
demonstrates the problem. "Microsoft Internet Explorer"
could easily be distributed as Microsoft?? plus the generic or
descriptive term "Internet Explorer" or "Windows
Messenger" as Windows?? plus the generic or descriptive term
"Messenger." As a factual matter, "Microsoft
Internet Explorer," "Microsoft Java Virtual
Machine," "Windows Media Player" and.
"Windows Messenger" are not currently distributed under
either ?? or m nor are they registered with the United States Patent
and Trademark Office.\44\ Thus, in stark contrast to its purported
effect, Section VI.T either currently excludes or provides a roadmap
to exclude each of Microsoft's major Middleware Products from the
disclosure requirements of III.D.
---------------------------------------------------------------------------
\44\ A complete list of Microsoft trademarks is posted on
the Web at http://www.microsoft.com/trademarks/docs/mstmark.rtf. The
description in the test is taken from the document at that location
titled "Microsoft Corporate Trademarks," dated December
2001. That document advises that other companies should "not
use any trademark symbols ... for those products that are not listed
above as trademarks, such as 'Microsoft?? Excel,"
'Microsoft?? Internet Explorer."'
---------------------------------------------------------------------------
When the "Trademarked" provision is taken in
conjunction with the additional requirement that the Middleware must
be "distributed separately from a Windows Operating System
Product to update that Windows Operating System Product," it
is apparent that Microsoft can completely escape coverage under
Definition VI.J by either altering its distribution or the
nomenclature of its products. In sum, the set of "Microsoft
Middleware" that interoperates with "Windows Operating
System Products" appears to be a null set.
The final definition implicated by Provision III.D is that of
"Application Programming Interfaces." "APIs"
are defined in Definition VI.A as follows: the interfaces, including
any associated callback interfaces, that Microsoft Middleware
running on a Windows Operating System Product uses to call upon that
Windows Operating System Product in order to obtain any services
from that Windows Operating System Product. PFJ, 66 Fed. Reg. at
59458. (emphasis added). Thus, "interfaces" means
"interfaces" because the basic API definition rests once
on the Microsoft Middleware definition (described above) and three
times on the definition of Windows Operating System Product, which
is defined by Microsoft in its "sole discretion." The
Department has proclaimed the API disclosure remedies to be the
centerpiece of the PFJ. That the definition of "API"
will be exclusively determined by Microsoft highlights the seriously
flawed nature of the entire proposed device.
In sum, we do not believe it is possible for the Department of
Justice, Microsoft or any party to know with any degree of certainty
exactly what must be disclosed under Provision III.D. But there is
no question that these definitional issues will be before the Court
in numerous enforcement actions and dominate this Court's docket for
the next five years.
3. The API Disclosure Provision Also Leaves Critical Terms
Undefined. Focusing on the terms of Provision III.D that are not
defined yields some striking conclusions.
[[Page 28987]]
First, the critical term "interoperate" is left
undefined by the PFJ. Moreover, despite the Department's claim in
the CIS that the decree's API provisions require the release of all
"interfaces and related technical
information," \45\ these terms are neither defined nor
employed in the language of Section III.D. In fact, the phrase
"technical information" does not even appear in the
proposed decree. In contrast, the Interim Order included a detailed
definition of "Technical Information" (Section 7.dd)
that the Department and Microsoft have without explanation
eliminated from the proposed decree.\46\ Inexplicably the PFJ has
lowered the standard of interoperability supported by disclosed APIs
in the Interim Order from information that software developers
"require" to "interoperate effectively" with
Windows to information "used by Microsoft" to
"interoperate."
---------------------------------------------------------------------------
\45\ CIS, 66 Fed. Reg. at 59460, 59468.
\46\ The Interim Order defined "Technical
Information" as "all information regarding the
identification and means of using APIs and Communications Interfaces
that competent software developers require to make their products
running on any computer interoperate effectively with Microsoft
Platform Software running on a Personal Computer. Technical
information includes but is not limited to reference
implementations, communications protocols, file formats, data
formats, syntaxes and grammars, data structure definitions and
layouts, error codes, memory allocation and deallocation
conventions, threading and synchronization conventions, functional
specifications and descriptions, algorithms for data translation or
reformatting (including compression/decompression algorithms and
encryption/decryption algorithms), registry settings, and field
contents." In contrast, the PFJ requires only disclosure of
related "Documentation," defined in Section VI.E as
"information" that is "of the sort and to the
level of specificity, precision and detail that Microsoft
customarily provides for APIs it documents in the [MSDN]."
PFJ, 66 Fed. Reg. at 59459.
---------------------------------------------------------------------------
These terms are not peripheral. They go to the core meaning of
the API disclosure provisions of the proposed decree. An injunction
designed to require Microsoft to disclose interoperability
information to rivals cannot possibly be effective where the scope
of the information to be released is not defined with specificity.
The elimination of the definition of Technical Information is thus
particularly revealing, because it illustrates that the Department
has crafted a remedy that is, at best, a subset of the Interim Order
on which the Department claims it relied. It also demonstrates that
the Department affirmatively made a determination not to define a
term which was clearly central to the disclosures mandated by the
Interim Order.
4. Under Provision III.D, APIs Will Never be disclosed in a
Timely Manner
Finally, Section III.D does not ensure simultaneous API access
for Microsoft and its competitors.
While the Interim Order required disclosure of APIs at the same
time they were made available to Microsoft applications developers,
the PFJ does not. Instead, the proposed decree uses the very
ambiguous standard that, for a "new major version" of
Microsoft middleware, API disclosure "shall occur no later
than the last major beta test release." PFJ, 66 Fed. Reg. at
59454. Yet "last major beta test release" is not
defined, and the provision in any case begs the question of how to
decide which beta release is the "last."
No less problematic are the requirements for timely disclosure
of APIs exposed by new versions of Windows. Here, the proposed
decree provides in Section III.D that for "a new version of a
Windows Operating System Product," disclosure "shall
occur in a Timely Manner." Here the definition of
"Timely Manner" provides little, if any, protection for
ISVs. Definition VI.R provides that Timely Manner is "the time
Microsoft first releases a beta test version of a Windows Operating
System Product that is distributed to 150,000 or more beta
testers." We do not believe that Microsoft has ever had
150,000 "beta testers" as opposed to 150,000 "beta
copies" of its new product. Regardless, all Microsoft has to
do is limit distribution to 149,000 beta testers in order to
frustrate the timeliness of the required disclosures.
5. The Exceptions from and Preconditions to API Disclosure
Further Narrow the Scope of an Already Unworkable Disclosure
Provision
The proposed decree also contains several broad exemptions from
and preconditions to API disclosure by Microsoft. These provisions
undermine whatever strength, if any, remains in Section III.D in
light of the scope and definitional failings addressed above.
Section III.J of the PFJ exempts Microsoft from disclosing
"portion of APIs or Documentation" related interface
information "which would compromise the. security" of a
"particular installation or group of installations" of
any "anti-piracy, anti-virus, software licensing, digital
rights management, encryption or authentication systems." 66
Fed. Reg. at 59455. These exceptions to API disclosure are extremely
broad.
First, the scope of this provision implicates nearly all of
Microsoft's Middleware products. For example, digital rights
management is encompassed in all multimedia applications (e.g.,
Windows Media Player). Authentication is a function embedded in
Windows software (e.g., Outlook Express and Microsoft Passport) and
is required for access to Windows server operating systems.
Encryption likewise is a technology that is used by Internet
browsers (e.g., Internet Explorer) for e-commerce and by instant
messaging middleware (e.g., Windows Messenger). Second, because the
Department acknowledges that this provision permits Microsoft to
withhold from disclosure certain APIs, CIS, 66 Fed. Reg. at 59472,
it must also acknowledge that this provision both narrows an already
limited scope of disclosures and ensures that an alternative
middleware product will never be fully interoperable in the same way
as Microsoft's middleware.\47\
---------------------------------------------------------------------------
\47\ The CIS appears to limit the extent of Microsoft's
ability to withhold APIs under Section 1113 of the PFJ. But the CIS
description is either unclear or inconsistent with the terms of
Section III.J. At a minimum, the Department should reconcile these
two documents in order to mitigate the risk of future
anticompetitive conduct and litigation over the interpretation of
this section. There is no reason to believe that Microsoft will
endorse the CIF interpretation, and no doubt Microsoft will argue in
any future action that where these two documents conflict, the plain
language of the PFJ controls.
---------------------------------------------------------------------------
Third, the CIS either misstates the implications of the
provision or the Department does not understand what was agreed to
in the PFJ. For example, there is no such thing as an API that is
relevant to a "particular installation [PC] or group of
installations [network of PCs]." APIs are standard across all
Windows installations. Moreover, the provision does not refer to
"keys and tokens particular to a given installation" as
stated in the CIS, 66 Fed. Reg. at 59472, but rather states that
Microsoft may withhold "APIs ... the disclosure of which would
compromise the security of a particular installation or group of
installations ... including without limitation, keys, authorization
tokens or enforcement criteria." PFJ, 66 Fed. Reg. at 59455.
Therefore, the way the provision appears in the PFJ as opposed to
the CIS, is that it is not limited to the user-specific security
duties protecting specific computer networks that no one argument
should be disclosed publicly.
Section III.J.2 also imposes onerous preconditions on ISVs for
the receipt from Microsoft of APIs "related to"
encryption, authentication and other security matters. In order to
receive relevant APIs that relate to security technologies,
competitors must meet a subjective standard of
"reasonableness" which the decree appears to consign to
Microsoft's discretion. Thus, an ISV is only entitled to the APIs if
the competitor (1) "has a reasonable business need" for
the information "for a planned or shipping product," (2)
satisfies "reasonable, objective standards established by
Microsoft" for "certifying the authenticity and
viability of its business," and (3) submits its software for
Microsoft testing to "ensure verification and compliance with
Microsoft specifications for use of the API or interface."
None of these limitations seems appropriate, because they unduly
rely on Microsoft to determine "reasonable business"
need. As one example, Microsoft clearly views "open
source" software, or a threat, but will no doubt continue to
claim that it is not a "viable business".
6. Cross-Licensing of Middleware APIs
The API section must also be read in conjunction with Section
III.I of the proposed decree. This portion of the proposed decree
contains a provision (Section III.5) that grants Microsoft the right
to require ISVs and other API recipients to cross-license their own
intellectual property back to Microsoft if it relates "to the
exercise of their options or alternatives provided by this Final
Judgment." PFJ, 66 Fed. Reg. at 59455. Under this approach,
Microsoft can, at is own discretion, require that the products
developed with APIs and related interface information--for
instance, a competing middleware program--be licensed back to
Microsoft, because they "relate[] to the exercise" of an
ISV's "options or alternatives" under the proposed
decree. That is not a new issue in the industry. For years Microsoft
has attempted to extract
[[Page 28988]]
cross-licensing requirements and most in the industry have
successfully resisted. If this provision is exercised, Provision
III.D will simply not be utilized if the result is a requirement
that intellectual property resulting from competitors" own
investments in software research and development. Again, the CIS
purports to limit the plain meaning of Section III.I by opining that
the intellectual property cross-licenses are only available if
Microsoft "is required to disclose interfaces that might be
used by others to support a similar feature in the same
fashion." CIS, 66 Fed. Reg. at 59472. But that does not appear
to be consistent with the language of the PFJ.
7. Timing of API Disclosure Obligation Finally, under Section
III.D, the requirement for Microsoft to release APIs and
Documentation to competitors does not commence for one year. This
delay means that Microsoft's own middleware will continue to be
preferred in terms of its interoperability with the Windows
operating system. The one-year period in which competitors must wait
for API releases is one-fifth of the decree's five-year term.
Nothing in the CIS discusses or explains a rationale for this
substantial delay. B. The Communications Protocol Provisions of the
Decree Do Not Require Release of any Server APIs and are Based on
Terms the Department Failed to Include in the Settlement The
Competitive Impact Statement claims that the server provisions in
Section III.E of the proposed decree will "prevent Microsoft
from incorporating into its Windows Operating System Products
features or functionality with which its own server software can
intemperate, and then refusing to make available information about
those features that non-Microsoft servers need in order to have the
same opportunities to interoperate with the Windows Operating System
Product." \48\ Like the decree's API disclosure
provisions, this obligation is ephemeral.
---------------------------------------------------------------------------
\48\ CIS, 66 Fed. Reg. at 59469. See also CIS, 66 Fed.
Reg. at 59460 (decree "prevent[s] Microsoft from incorporating
into the Windows operating system features or functionality with
which only its own servers can interoperate by requiring Microsoft
to disclosure the communications protocols that are necessary for
software located on a computer server to interoperate with the
Windows operating system").
---------------------------------------------------------------------------
First, Section III.E is designed only to support
interoperability between Windows PCs and non-Windows servers. See
CIS, 66 Fed. Reg. at 59469 (interoperability between "Windows
Operating System Products and non-Microsoft servers on a
network"). It expressly does not cover interoperability
between Windows servers and non-Windows PCs. Thus, Apple, Linux and
all other desktop operating systems competitors have no right under
the proposed decree to obtain any of the technical information
needed to allow PCs running such competing operating systems to
intemperate with Windows servers.
Second, as with the API disclosure requirements, Microsoft can
easily avoid Communications Protocol disclosure through product
design. For example, Microsoft can implement protocols in other
software on the desktop, such as Office, or from software it
downloads over the Internet from its servers to its Windows
Operating Systems Product rather than implementing those protocols
directly in the Windows Operating Systems Product.\49\ Indeed, we
understand that with Microsoft's new .Net offering, Microsoft plans
to download code from the Internet to effect communications between
clients and Microsoft's .Net servers. This will require no
disclosure under Section III.E.
---------------------------------------------------------------------------
\49\ The CIS makes clear that this ploy avoids the Section
III.E obligations, stating that disclosure is not required if
Microsoft "only distributes code that implements that protocol
along with its server software or otherwise separately from the
client operating system ..." CIS, 66 Fed. Reg. At 59469.
---------------------------------------------------------------------------
Third, the definition of "Communications Protocols"
itself is extraordinarily ambiguous. The decree defines
Communications Protocol in Section VI.B as: the set of rules for
information exchange to accomplish predefined tasks between a
Windows Operating System Product and a server operating system
product connected via a network, including, but not limited to, a
local area network, a wide area network or the Internet. These rules
govern the format, semantics, timing, sequencing, and error control
of messages exchanged over a network.
PFJ, 66 Fed. Reg. 59458. This definition does not prescribe what
"predefined tasks" are encompassed, and the phrase
"format, semantics, sequencing, and error control of
messages" can just as easily be read to apply only to the
physical means of sending information to or from a server (the rules
for transmitting information packets over a network) rather then the
content of such information (the rules for structuring and
interpreting information within such packets). Thus, Microsoft
competitors wilt be able to learn how to construct messages that can
be passed to or from Microsoft severs, but will not learn the
substance of the information necessary to invoke the features and
functionalities of the server.
Fourth, like the PFJ's API disclosure provisions, the key terms
of Section III.E are undefined. We have addressed Windows Operating
System Product, which allows Microsoft itself to define the term,
above. The corresponding prong of Section III.E is that
Communications Protocols are disclosable when used by a Windows
Operating System Product to interoperate with "a Microsoft
server operating system product." The CIS claims that [t]he
term "server operating system product" includes, but is
not limited to, the entire Windows 2000 Server product families and
any successors. All software code that is identified as being
incorporated within a Microsoft server operating system and/or is
distributed with the server operating system (whether or not its
installation is optional or is subject to supplemental license
agreements) is encompassed by the term. For example, a number of
server software products and functionality, including Internet
Information Server (a "web server") and ActiveDirectory
(a "directory server"), are included in the commercial
distributions of most versions of Windows 2000 Server and fall
within the ambit of "server operating system product."
CIS, 66 Fed. Reg. at 59468-69. Amazingly, this term is
nowhere defined in the PFJ, despite the fact that this language is
what bounds the scope of Microsoft's obligation to disclose crucial
information to rivals. Based on the plain language of the PFJ alone,
there is no reason to believe that, for example, Internet
Information Server is covered by the undefined PFJ term
"server operating system product." Although the
Department attempts to clarify this definition in the CIS, as noted
above there is no reason to expect Microsoft to accept the
Department's CIF definition.
Fifth, a large share of PC interactions with servers occur via
the Interact browser. (For instance, all Web browsing, e-commerce
and other Web functionalities are a result of the browser
interoperating with a server.) Section III.E does not cover
protocols that are implemented in Internet Explorer to support
interoperability with Microsoft's server operating systems products.
Therefore, Microsoft can easily evade the scope of this
provision--whatever that may be--by incorporating
proprietary interfaces and protocols into IE rather than Windows.
Sixth, the obligations of Section III.E appear to only apply to
Communications Protocols that are "implemented ... on or after
the date this Final Judgment is submitted to the Court." Read
literally, all of the Communications Protocols built into Windows
2000 and Windows XP are exempt from disclosure because they were
implemented before the proposed decree was submitted.
Finally, Section III.J constrains the Communications Protocol
provisions of Section III.E in the same way it limits the API
disclosure provisions of Section III.D. Thus, any Communications
Protocols that "would compromise the security" of
authentication, encryption or related technologies are exempt from
disclosure. Because the heart of sever-based network
interoperability is authentication and encryption, these exemptions
once again swallow the rule. For all these reasons, the decree's
provisions for server interface information disclosure do not
provide Microsoft competitors with the interface or protocol
information necessary to enable interoperability between Windows PCs
and non-Windows servers. Section III.E does not even cover
interoperability between non-Windows PCs and Windows servers. The
central terms establishing the scope of Microsoft's obligations are
undefined and subject to Microsoft's unilateral control. In short,
the PFJ has created another Venn Diagram with no intersecting
circles, because the Communications Protocol provisions of the
decree require nothing at all. C. The Proposed Decree's Provisions
for OEM Flexibility Do Not Open the PC Manufacturing Channel to
Future Middleware Competitors
The Department explains that the personal computer manufacturer
("OEM") provisions of the proposed decree support
"the ability for computer manufacturers and consumers to
customize, without interference or reversal, their personal
computers as to the middleware they install, use and feature."
CIS, 66 Fed. Reg. at 59460, 59471. In reality, these measures hardly
change anything in existing Microsoft-OEM relations, and do not
appreciably alter the dynamics of the OEM
[[Page 28989]]
distribution channel. Most important, Sections III.C and III.H
cannot, by their very design, provide an opportunity for rival
middleware products--as compared to Microsoft's
middleware--to attract sufficient distribution to have any
impact at all on the applications barrier to entry. The OEM sections
may actually make matters worse for middleware rivals. The PFJ
limits what OEMs can remove from their PC products to just the
middleware icons, euphemistically referred to as "access
to" middleware in Sections III.C and III.H. In other words,
OEMs are not permitted to remove the code for Microsoft Internet
Explorer, Windows Media Player or any other Microsoft middleware,
and the proposed decree allows Microsoft to commingle and integrate
middleware with its Windows operating system software. The fact that
the flexibility guaranteed to OEMs is limited to removing icons, and
not the middleware itself, has major competitive significance and
actually guarantees perpetuation of the applications barrier
protecting Microsoft's operating systems monopoly.
1. The OEM Provisions Place Sole Responsibility for Introducing
Middleware Competition on PC Manufacturers
To achieve its goal of "recreating the potential for the
emergence" of middleware alternatives to Microsoft's monopoly
operating system, the PFJ delegates the role of competitive
gatekeepers to OEMs. Instead of requiting the monopolist itself to
unfetter the market for entry by competitors, here the PFJ imposes
that obligation on third-parties who are partners with, not
competitors of, the defendant. If PC manufacturers do not act on the
desktop flexibility powers provided by Sections III.C or III.H of
the PFJ, there will, by definition, be no OEM-based remedy. Walter
Mossberg, Personal Technology columnist for the Wall Street Journal,
captured the problem elegantly. "Much" of the DOJ
settlement, he explained, "pertains to the company's relations
with the hapless makers of PCs, which aren't in any position to defy
Microsoft."\50\
---------------------------------------------------------------------------
\50\ Walter S. Mossberg, Microsoft Has Good Year, At
Expense of Customers, Wall Street J., Dec. 27, 2001, at B1.
---------------------------------------------------------------------------
OEMs are captives of Microsoft for a number of reasons,
beginning with the obvious fact that there are no commercially
viable alternatives to the Windows operating system; there are no
real alternatives to Microsoft's Office suite of personal
productivity applications (Word Processing, Spreadsheets, E-Mail,
etc.); and there is de minimis competition for Interact browsers.
The fact that OEMs find themselves in a sole source relationship
with the defendant provides Microsoft with innumerable avenues to
exercise its leverage over the OEM channel. These complex
relationships are built more on the subtleties of a sole source
relationship than on written contracts, or overt retaliation, and
thus are hardly resolved by the uniform Windows pricing obligation
provided for in Section III.B.
It must also be understood that personal computer manufacturers
are in the business of producing low margin commodity equipment, a
business characterized by very minimal (and shrinking) R&D
budgets. It is unrealistic to expect any Windows-centric OEM to
develop, test, and pre-install packages of rival middleware, because
that would require substantial expenditures in technical software
expertise and customer support which would further narrow already
shrinking profit margins in a business where competitors are
currently engaged in a major price war to gain market share.
The financial burden of customer support, where a single end
user service call can eliminate an OEM's profit margin on a PC,
creates powerful disincentives to the inclusion of non-Microsoft
middleware. See Microsoft III, 253 F.3d at 62. Judge Jackson found
and the Court of Appeals affirmed that in light of their customer
support obligations, which are "extremely expensive,"
Microsoft III, 253 F.3d at 61 (citing Findings of Fact 210),
OEMs are disinclined to install multiple versions of middleware.
Since OEMs "have a strong incentive to minimize costs,"
id., the customer confusion resulting from duplicative middleware is
sufficient to preclude OEMs from installing competitive programs
where comparable Microsoft middleware is included with Windows.
Under the proposed decree, however, these are precisely the
circumstances faced by OEMs. There are no restrictions in the PFJ on
Microsoft's ability to integrate middleware technologies into
Windows; in fact Microsoft is allowed to do so at its "sole
discretion." Even if an OEM wants to install a competitive
non-Microsoft middleware program, it will be required to deal with
the fact that the corresponding Microsoft middleware product is
already present on its PCs, which it is not permitted to remove.
Consequently, just as OEMs" cost minimization requirements
forced them not to pre-install Netscape where IE was included with
Windows, so too will these same profit pressures force OEMs to
decline to install competing middleware programs under the PFJ.
This is in stark contrast to the provision of the Interim Order
on which the Department claims to have based its settlement. Both
the Interim Order and the remedy proposed by the Litigating States
would require Microsoft to ship a version of the operating system
without any middleware included, if requested by an OEM. That scheme
makes it possible for an OEM to truly offer a differentiated product
suite without the burden of having Microsoft's corresponding
technology present on the system as well.
Even if they had an independent economic incentive to support
middleware competition, however, Windows OEMs are still held captive
under the proposed decree's retaliation provisions. Section III.A
prohibits "retaliation" (another undefined term) by
Microsoft against OEMs for developing, distributing or supporting
competitive middleware or exercising their desktop icon flexibility
rights.
Despite their relative length, the retaliation provisions do not
at all effectively preclude retaliation. Retaliation is only
prohibited under Section III.A where "it is known to
Microsoft" that an OEM is undertaking a permitted, competitive
action. This subjective, actual knowledge standard will be difficult
if not impossible to enforce. In addition:
. Microsoft is not prohibited from retaliating if an OEM removes
the code for a Microsoft Middleware Product from its retail PCs.
. Nor does this provision prevent retaliation if an OEM removes
either icons or code for Microsoft software that does not qualify as
a "Microsoft Middleware Product" (for instance,
Microsoft Movie Maker).
. And Microsoft is not prohibited from retaliating against OEMs
for promoting products that fall outside of the Section III.A terms.
By way of example, Microsoft could retaliate against OEMs for
promoting non-Microsoft Internet services, server operating systems,
server middleware or server applications. Microsoft could even
retaliate against OEMs for distributing or promoting middleware that
does not yet compete with Microsoft Middleware Products.
Section III.A also limits the prohibited forms of retaliation to
"altering Microsoft's commercial relations with that OEM, or
by withholding newly introduced forms of non-monetary Consideration
(including but not limited to new versions of existing forms of non-
monetary Consideration)." PFJ, 66 Fed. Reg. 59453. Microsoft
is not precluded from denying new monetary consideration to OEMs as
a means of retaliation, as that is neither an "alter[ed]
commercial relation" nor a "newly introduced form of
non-Monetary Consideration." Similarly, Microsoft can also
reward compliant OEMs by providing concessions on license fees for
non-Windows Microsoft software, including applications such as
Office, server operating system software and server applications, as
well as Microsoft Middleware Products. None of these types of
software is covered by the pricing parity requirements of Section
III.B, which apply only to "Microsoft Operating System
Products." Id.
Finally, as a general matter there is no practical way to
identify and prohibit all the subtle ways Microsoft can
preferentially favor some OEMs, and harm others, depending on their
degree of support for Windows. For instance, the definition of
Consideration in Section VI.C covets "product
information" and "information about future plans."
Id. at 59458. Yet Microsoft could retaliate against OEMs by denying
them sufficient technical information regarding important, upcoming
Windows features, for example by not inviting them to internal
development conferences or presentations. Likewise, Microsoft could
assign fewer or less knowledgeable technical support personnel to a
specific OEM's account team, a form of retaliatory discrimination
that would be difficult to detect and virtually impossible to prove.
In sum, the anti-retaliation provisions offer little shelter for
OEMs desiring to respond to legitimate demands by their customers
for choice among competing software products. If there is any doubt
about this analysis of Sections III.C and III.H above, the Court
should took no further than the OEMs" treatment of Microsoft
Internet Explorer. On July 11, 2001 Microsoft announced that OEMs
would be free to remove access to Internet Explorer, which
[[Page 28990]]
they had previously been prohibited from doing.\51\ Since this
announcement was made more than six months ago, not one OEM has
actually taken advantage of this provision and removed the icon for
Internet Explore from retail PCs This real-world market test is an
accurate gauge of how many OEMs will likely take advantage of the
exact same flexibility provided in Section III.H of the decree,
albeit for a somewhat wider range of middleware products: none.
---------------------------------------------------------------------------
\51\ We note that at the time of the announcement,
Microsoft had already achieved significantly greater than 80 percent
of the browser market as a result of its six-year anticompetitive
campaign, so it is hard to view this as a concession.
---------------------------------------------------------------------------
2. The Provisions Allowing OEM Flexibility Do Not Address the
Key Issue of Microsoft's Ubiquitous Middleware Development Platform
The core of the case against Microsoft rests on the theory that
Netscape and Java provided an alternative development platform
(middleware) for applications developers, which, if applications
developers began writing applications to the middleware, would
undermine the applications barrier to entry and thus Microsoft's
Windows monopoly. For this to occur, developers need to view rival
middleware as a more attractive development platform than Windows.
Unfortunately, the PFJ provides a solution to the wrong problem and
actually ensures that rival middleware applications will never be
able to attract a critical mass of developers.
Sections III.C and III.H of the decree allow OEMs to install
competing middleware and to "enable or remove access to"
Microsoft Middleware Products from the desktop of Windows PCs that
they sell to end users. However, as noted, these provisions do not
authorize OEMs to delete the Microsoft middleware itself, and
Microsoft is not prohibited from retaliating against OEMs that
attempt to delete Microsoft middleware code from its configured PCs.
This distinction between icons and code is competitively
decisive. The applications barrier exists because developers write
to Windows-centric APIs. Under the terms of the decree, however, the
APIs exposed by Microsoft middleware remain on every Windows PC even
if OEMs and end-users exercise all of the flexibility provided by
Section III.H. It is crucial to understand that an application
developer can write to Microsoft middleware regardless of whether
"access" to that software is removed. In other words,
Microsoft's middleware APIs remain ubiquitously available on all
Windows PCs under the proposed decree. The best a rival middleware
provider can hope for is to be "carried" alongside
Microsoft's middleware on some lesser portion of personal computers.
A critical lesson learned in this case is that, as with Netscape
and Java, ubiquity trumps technology in network effects markets.
Professor Arrow explains that no middleware competitor can expect
any economically significant chance to compete on the merits if, as
permitted under the decree, Microsoft middleware is ubiquitous.
Arrow Decl. 26. The important distinction between icons and
code was explained by the DC Court of Appeals in 1998. The court
emphasized that removal of end user access "do[es] not remove
the IE software code, which indeed continues to play a role in
providing non-browser functionality for Windows. In fact, browser
functionality itself persists, and can be summoned up by ... running
any application (such as Quicken) that contains the code necessary
to invoke the functionality." Microsoft II, 147 F.3d at 941.
Consequently, by limiting its effect to the removal of icons
only, the proposed decree cannot achieve any appreciable effect in
eroding the applications barrier. They cannot "recreate the
potential for the emergence" of middleware alternatives in a
way that provides an economically realistic opportunity for
operating systems competition. 3. The OEM Provisions Do Not Create a
Level Playing Field for Middleware Desktop Competition
We explained above why it is unlikely that OEMs will expend
resources to promote rival middleware products. The alternative
model is that rival middleware providers would pay an OEM to feature
its software and delete end-user access to Microsoft's middleware.
This is consistent with the CIS, which explains that the function of
the OEM provisions is to allow OEMs to "feature and
promote" non-Microsoft middleware. CIS, 66 Fed. Reg. at 59460.
Section III.H does not achieve this goal, for two primary
reasons. First, as detailed above, the "value" of the PC
desktop is diminished by the fact that an OEM is not permitted to
remove the Microsoft middleware code, and thus cannot offer a rival
exclusivity.
Second, Section III.H.3 does not guarantee that a rival's
middleware icon will even remain on the desktop. As the Department
explains the theory of this remedy, it is to create a
"marketplace" on the desktop where OEMs can "stand
in the shoes" of consumers and exercise choices in which
middleware technologies to feature based on price and performance.
Yet, the PFJ permits Microsoft to "sweep" competing
middleware icons placed on the Windows desktop by OEMs.
That is, Windows may automatically remove the icons featured by
an OEM just fourteen days "after the initial boot-up of a new
Personal Computer." True, this section contains a proviso
stating that Microsoft may not do so absent end user
"confirmation," but neither the text of this provision
nor the Competitive Impact Statement require that confirmation be
based on any objective notice or alert by Microsoft. CIS, 66 Fed.
Reg. at 59471.
The fourteen-day desktop sweep proviso directly contradicts the
objective of fostering OEM flexibility to feature and promote non-
Microsoft middleware, because it undermines the ability of OEMs to
sell desktop placement an ISV can count on. Under Section III.H.5,
the best an OEMs can offer is a guarantee of desktop placement for
fourteen days.
This is critically important for the reasons stated above. As
rival middleware vendors attempt to attract developers to write
applications to their platforms, as opposed to Microsoft's platform,
they will have to make representations as to how many PC desktops
actually have the rival middleware installed and available to
consumers. With the fourteen day "sweep" provision
included in the PFJ, ISVs will simply not be able to make any
accurate projections, which will further reduce the price they might
be willing to pay for desktop placement. 4. Additional OEM
Provisions Further Undermine the Crucial Ability of ISVs to
Differentiate Competing Middleware Products
In order to displace Microsoft middleware and encourage
applications developers to write to their APIs, competing ISVs will
need to differentiate their middleware products from Windows Media
Player, Windows Messenger and the other Microsoft middleware
products that are bundled with Windows. The OEM provisions
affirmatively undermine the ability of ISVs to achieve any
meaningful degree of product differentiation.
First, Section III.C.3 permits OEMs to launch automatically non-
Microsoft middleware only at boot-up or upon making a connection to
the Interact. This constrains the ability of manufacturers to
configure competing middleware products and reduces the value of
this flexibility for (and hence potential OEM revenues from) ISVs.
Second, auto-launch of competing middleware is permissible under
Section III.C.3 only (a) "if a Microsoft Middleware Product
that provides similar functionality would otherwise be launched
automatically at that time," PFJ, 66 Fed. Reg. 59454, and (b)
if the non-Microsoft Middleware "displays on the desktop no
user interface or a user interface of similar size and shape to the
user interface displayed by the corresponding Microsoft middleware
product." Id. These limitations allow Microsoft to gate
middleware competition by reducing the role of non-Microsoft
middleware to only those instances in which Microsoft's own products
are launched. If Microsoft decides that its middleware products will
not have a user interface, or will utilize a window of a specific
size, those decisions are binding on competitors" product
designs as well. Indeed, the PFJ surprisingly appears not even to
contemplate a situation where Microsoft's competitors develop a
middleware product for which there is no "corresponding"
Microsoft middleware. Third, the PFJ empowers Microsoft to limit the
freedom of ISVs in their product design and functionality decisions
on its competitors. Microsoft can also limit the placement of icons
and shortcuts may appear on the desktop and elsewhere, id. at 59454,
59455, the "functionality" of middleware products whose
icons and shortcuts may be included by the OEM, and the ability of
end users to designate non-Microsoft middleware as default
middleware on their computers. Id. at 59455.
Each of these provisions has a similar, substantial effect. By
allowing middleware to be substituted by an OEM only when (a) it
performs similarly to Microsoft middleware, (b) exhibits
functionality defined by Microsoft, or (c) includes the same user
interface as Microsoft middleware, the PFJ allows Microsoft to
"gate" competition. There is no competitive
justification for these provisos, all of which serve to eliminate
opportunities for product differentiation and
[[Page 28991]]
permit Microsoft to constrain middleware competition to the scope,
location and even "look and feel" it determines for its
own products.
5. The OEM Provisions Contain Other Superfluous Terms that
Substantially Limit Any Potential Market Impact
Section III.H of the proposed decree allows Microsoft twelve
months to modify Windows XP in order to permit OEMs to remove
Microsoft middleware icons or change default settings for invoking
middleware functionalities. Yet the modification necessary to allow
removal of icons via the "Add/Remove Programs" utility
is a trivial exercise. Demonstrable proof of this fact is that
Microsoft was able to modify the beta version of Windows XP to
permit removal of the Interact Explorer icon within weeks of its
July 11, 2001 announcement. We can not fathom why Microsoft is now
given twelve months to accomplish the same task.
Section VI.N of the decree also provides that a "Non-
Microsoft Middleware Product" is software with certain
functionalities "of which at least one million copies were
distributed in the United States within the previous year."
Because the Section III.H obligations requiring modification of
Windows XP to permit addition and removal of competing middleware
apply to "Non-Microsoft Middleware Products," OEMs are
foreclosed from the ability to feature and promote small middleware
start-up competitors in Windows XP, Section VLN is a very veal
impediment to achievement of the innovative middleware market the
PFJ is purportedly designed to promote. 6. The OEM Provisions Have
No Impact on Java.
Sections III.C and III.H also do not apply to Microsoft's Java
Virtual Machine ("JVM"), or Microsoft's equivalent of
the JVM, its Common Language Runtime. Despite the fact that the
"Microsoft Middleware Product" definition includes the
Microsoft Java Virtual Machine, it appears there is no competitive
consequence to its inclusion in this definition in any of the
provisions of the decree. First, Microsoft no longer ships its JVM
with Windows, so there is nothing for OEMs to remove. Second, even
if they did continue to ship a JVM, there is no "icon"
or "end-user access" to Java. Rather, Java is invoked
automatically by programs that rely on its presence.
7. The OEM Provisions Largely Codify Microsoft's Existing
Business Practices. Users today enjoy the flexibility--without
the benefit of the PFJ--to add, delete or customize their own
PC desktops. Users may delete icons by simply "dragging"
the icon to the "recycle bin" or "right-
clicking" on the icon and simply choosing
"delete."
Thus, the decree's OEM provisions allowing OEM removal of icons
only codify Microsoft's current business practices. In response to
the Court of Appeals" opinion, Microsoft on July 11, 2001
announced that "it is offering computer manufacturers greater
flexibility in configuring desktop versions of the Windows operating
system in light of the recent ruling by the U.S. Court of Appeals
for the District of Columbia." \52\ According to the
Microsoft press release, under this policy OEMs can "remove
the Start menu entries and icons that provide end users with access
to the Interact Explorer components of the operating system,"
and "Microsoft will include Internet Explorer in the Add/
Remove programs feature in Windows XP." Id. Thus, Microsoft
stressed that "Microsoft has always made it easy for consumers
to delete the icons for Interact Explorer, but will now offer
consumers this additional option in Windows XP." Id.
---------------------------------------------------------------------------
\52\ Available at www.microsoft.com/MSCorp/presspass/
Press/2001/Jul01/07-11OEMFlexibilityPR.asp.
---------------------------------------------------------------------------
This announcement is revealing because it confirms, from
Microsoft itself, that the "flexibility" provided to end
users by Section III.H of the decree has always existed. And by
revising Windows XP to permit OEMs to remove the Interact Explorer
icon, Microsoft has already done precisely what the decree requires.
Thus, the OEM provisions of the decree succeed mostly in codifying
Microsoft's current business practices and achieve minimal, if any,
remedial purpose.
In sum, the relief provided by Sections III.C and III.H is
fundamentally at odds with the theory of the case. These OEM
"desktop" remedies will not provide any opportunity for
alternative middleware platforms to attract developers and thus to
challenge the applications barrier to entry.
They are economically irrational since Microsoft's middleware
will continue to be ubiquitously available on all PCs, regardless of
the choices exercised by OEMs. These provisions allow Microsoft to
dictate product design features to its rivals, to limit product
differentiation and to restrict OEM deals with rivals to a brief,
fourteen-day exclusivity period. And at bottom, they cannot change
the economic structure of the PC distribution channel because OEMs
are sole-source partners of Microsoft, not competitors.
D. The Proposed Decree Does Not Effectively Preclude Microsoft's
Exclusive Dealings Although the proposed decree purports to ban
exclusive dealing by Microsoft with respect to Windows software,
Section III.G expressly permits Microsoft to establish favored or
exclusive relations with certain OEMs, ISVs, etc., if the parties
enter into "any bona fide joint venture or ... any joint
development or joint services arrangement." This exception all
but vitiates the supposed prohibition, for it allows Microsoft to
enter into the identical distribution agreements that were held
unlawful at trial merely by denoting them as "nt"
activities.
E. Current Market and Economic Realities Demonstrate that the
PFJ is Incapable of Having Any Substantial Procompetitive Impact
The Department recognizes explicitly that relief in this case
must "'ensure that there remain no practices likely to
result in monopolization in the future."' Microsoft Ill,
253 F.3d at 103 (citations omitted); see CIS, 66 Fed. Reg. at 59465
(monopolization remedy should "avoid a recurrence of the
violation" in the future). Yet by failing to address
significant market and technological developments that have occurred
in the period since the trial record closed, the narrow remedies of
the proposed decree do not provide relief that comes even close to
ensuring that Microsoft's unlawful practices will not be repeated in
the future.
1. New Monopolies Enable Microsoft to Protect its Operating
System Monopoly Despite the PFJ Since the trial, Microsoft has
solidified three new chokeholds with which it can easily perpetuate
its monopoly power:
Microsoft's monopoly power over Internet browsers and its
integration of IE into Windows allow it to replicate many of the
prohibited practices through IE.
Microsoft's monopoly power over the Office suite and its
anticompetitive use of Office porting allow it to replicate many of
the prohibited practices through Office.\53\
---------------------------------------------------------------------------
\53\ Microsoft's resulting power over Internet browsers
and personal productivity applications provides it with alternative
vehicles with which to achieve the same anticompetitive foreclosure
of middleware threats that it accomplished in 1995-98 through
Windows itself.
---------------------------------------------------------------------------
Microsoft is fast acquiring monopoly power in the operating
systems for low-end servers used in local or wide area networks.
Microsoft can just as easily exploit the APIs exposed by the
operating system on the network to perpetuate the applications
barrier to entry.
However, the PFJ does not require the disclosure of APIs exposed
by IE, Office the low-end server operating systems. Microsoft can
develop middleware programs that utilize these APIs--which are
as ubiquitous as the Windows APIs themselves--and thus evade
the API disclosure provisions of the PFJ. Similarly, although
Section III.E of the PFJ requires the disclosure of Communications
Protocols used for interoperability with Microsoft server operating
systems, by controlling the client (IE), Microsoft can control the
server irrespective of these provisions.\54\ That is, Microsoft's
monopoly control over IE allows it unilaterally to implement
proprietary standards and protocols within IF, that are not
disclosable under the PFJ because they are not "implemented in
a Windows Operating System Product installed on a client
computer" within the scope of Section III.E.
---------------------------------------------------------------------------
\54\ As Microsoft executive (and trial witness) Paul
Maritz put it, "the most important thing we can do is not lose
control of the Web client," because "[b]y controlling
the client, you also control the server." Gov't Ex. 498.
Microsoft can suppress competition by adding proprietary features
and protocols to the IE browser that are necessary to generate
actions by its server operating systems products or by refusing to
add features and protocols that would similarly support a
competitor. Professor Schmalensee acknowledged this incentive at
trial: "[I]f one company controlled the browser and its look
and feel and how it presented applications, it could severely
enhance or detract from the application functionality of programs or
applications running on the server." 6/24/99 (p.m.) Tr.
46-47; see also id. at 48; Henderson Decl. 82 (quoting
Rasmussen Dep., 12/15/98 (a.m.), at 67-68).
---------------------------------------------------------------------------
2. The Proposed Settlement Ignores the Likely Tactics Microsoft
Will Use to Eliminate the Next Significant Threat to its Monopoly
Position
The primary competitive threat to the Windows OS/IE platform is
the emergence of applications and services provided over the
Internet, where the application or service is independent of the
computing platform employed by the user. The recent spread of high-
speed Internet service has further spurred the development of this
category of
[[Page 28992]]
distributed applications or web services that take advantage of
Internet's underlying architecture.
Two features of distributed applications in particular
constitute a revolutionary change from the previous "client-
server" model. First, rather than residing principally on one
machine (either a client or a server), distributed applications
effectively reside on the network itself. It is therefore possible
to access these services from any computer or device connected to
the Internet. From the user's perspective, although the application
itself resides on the network, it is accessible as rapidly and
seamlessly as if it resided on the user's own PC.
Second, because the applications and data are accessible from
different machines, access to these services depends critically upon
being able to establish the identity of the user seeking access to
those services. Web identity and authentication services accordingly
take on extraordinary importance in the world of distributed
applications.
These changes in the market reveal a picture of today's PC
industry that is radically different from the Department's placid
vision of "recreating the potential" for middleware
competition by opening the OEM channel to possible future middleware
innovations. The critical question, however, is whether distributed
web-based applications, which do not need to be compliant with any
particular operating system, will be able to remain independent of
Windows and in the process bring down the applications barrier to
entry.
The PFJ does not protect the Internet-based competition for the
Windows operating systems monopoly in the future because the
proposed decree does nothing to prevent Microsoft from continuing to
shift from one anticompetitive activity to another in order to
maintain its monopoly. Instead of bundling middleware code into
Windows and creating exclusive dealing arrangements with ISVs and
OEMs, Microsoft today is attempting to defeat the threat from Web-
based services by bundling its Web services technologies into
Windows and entering into exclusive vertical distribution
arrangements with Web-based content and e-commerce providers.
See Passport to Monopoly: Windows XP, Passport, and the Emerging
World of Distributed Applications at 25 (ProComp June 21, 2001) and
Microsoft's Expanding Monopolies: Casting A Wider .Net (ProComp May
15, 2001).
As would be expected, Microsoft now attempts to create a
proprietary equivalent to the distributed applications paradigm by
bundling its latest operating system with certain applications and
technologies in order to secure dominance in distributed
applications. For example, Microsoft Passport, a proprietary
authentication technology built on the .NET Framework, is bundled
with Windows XP. This bundling allows Microsoft's own authentication
services to have a ubiquitous distribution base--and deny rival
technologies ubiquity--in the same way that its bundling
practices extinguished the middleware threats from Netscape and
Java. A monopoly in web identity services will enable Microsoft to
control the means by which users access distributed applications
from the Internet. Nonetheless, the PFJ does nothing to restrict
Microsoft's practices in this area. The API disclosure provisions
only mandate the release (if at all) of APIs used by a Microsoft
Operating System product to interoperate with Microsoft Middleware,
which excludes Passport.
Similarly, Microsoft's broader .NET initiative is replacement of
the Java and Netscape technologies that it unlawfully crippled with
Microsoft proprietary technology. Microsoft defines .NET as its
"platform for XML web services." \55\ The services
which .NET offers are a combination of pre-designed applications,
some of which come under the rubric "Hailstorm," and a
set of tools, under the rubric of Visual Studio Integration Program,
designed to allow developers to create web applications which rely
on the all-important APIs exposed by Microsoft programs. At the core
of .NET stands the Common Language Runtime environment
("CLR").
---------------------------------------------------------------------------
\55\ .NET Defined. available at www.Microsoft.com/net/
whatis.asp.
---------------------------------------------------------------------------
CLR is Microsoft's answer to the Java runtime environment, with
a key difference. CLR provides the developer with a device that is
similar to the JVM, but that lacks the element so destructive to
Microsoft's hegemony--freedom from reliance on Microsoft's
APIs. Of course, CLR will take full advantage of Microsoft's vast
distribution network via bundling with future versions of Windows
(including Windows XP) as well as with IE and Microsoft Network.
Microsoft's monopolization strategy has not changed at all. Bill
Gates has explained that "there's a very strong analogy here
between what we're doing now [with Web-based services] and what we
did with Windows." \56\ Since Microsoft will pursue the
same tactics and strategies found unlawful in the instant case, any
remedy that does not prohibit a repeat of these practices in new
markets and new contexts is facially flawed.
---------------------------------------------------------------------------
\56\ "So for every element of Windows--user
interface, the APIs .-.-. for each one of those things
there's an analogy here." Bill Gates, Forum 2000 Keynote, Bill
Gates Speaks About the .NET Platform. (Available at
www.microsoft.com/BUSINESS/vision/gates.asp)
---------------------------------------------------------------------------
In sum, the proposed decree fails to address identifiable market
and technological developments since the trial record closed that
allow Microsoft both to protect its operating systems monopoly
against current potential rivals and to engage in the same types of
conduct adjudged unlawful by the Court of Appeals. Consequently, the
proposed decree does not and cannot "ensure that there remain
no practices likely to result in monopolization in the
future," Microsoft III, 253 F.3d at 103 (citations omitted),
and must be rejected by this Court.
F. The Decree Increases Microsoft's Market Dominance and
Actually, Worsens Competitive Conditions in the Relevant Software
Markets
The proposed settlement not only does not achieve the
procompetitive effects that the Department claims, it increases
Microsoft's dominance of the operating systems market and actually
worsens competitive conditions across the entire software industry.
Among other things, the proposed decree rewards Microsoft for its
illegalities, promoting future defiance of antitrust laws and
intransigent tactics by dominant firms. Many of the deficiencies of
the proposed decree have been outlined in this submission. These
deficiencies will allow Microsoft to perpetuate its monopoly
position. In addition, the decree represents a step back from the
current state of affairs notably because it sanctions continued
bundling or commingling by Microsoft of middleware technologies with
Windows, thus increasing rather than decreasing Microsoft's power to
sustain the applications barrier to entry protecting its operating
systems monopoly while disadvantaging non-Microsoft middleware
providers. By enhancing Microsoft's ability to buttress the
applications barrier to entry, the proposed settlement harms
competition, and increases, rather than terminates, Microsoft's
monopoly power.
G. The Settlement Would Not Have Prevented Microsoft's Unlawful
Campaign Against Netscape and Java
One appropriate measure for assessing whether the PFJ is
adequate is whether it would preclude today the same conduct
Microsoft used to foreclose Netscape and Java, and thus preserve its
monopoly power, in 1995-98. It would not.
As a fundamental matter, this is because Microsoft is not
required to disclose the APIs needed for new and innovative forms of
middleware. When Netscape was launched in late 1994, Microsoft did
not have an Internet browser and was focused on Chairman
Gates" vision of interactive television, rather than the
Internet. Thus, there were no APIs exposed by Windows that were
"used by Microsoft Middleware to interoperate" within
the scope of Section III.D of the proposed decree. Had the decree
been in place when Jim Barksdale, former CEO of Netscape, met with
Microsoft in 1995, Netscape would not have been entitled to APIs or
any other interoperability information under the express terms of
the decree. "For the same reasons, no interoperability
information would have been disclosable to Sun in order to enable
interoperability of Java runtime technology with Windows.
Most of the distribution tactics Microsoft used to cut off
Netscape's air supply and to "pollute the market for cross-
platform Java" are also permissible under the decree.
Microsoft can still force OEMs to take its own middleware through
bundling. Microsoft can still coerce or threaten partners like Intel
and rivals like Apple and can still refuse to port its monopoly
Office suite in order to protect the applications barrier to entry.
Microsoft can still throttle middleware innovations because the PFJ
gives it the ability to "gate" the functionality and
product design of rival middleware products. Microsoft can still
prohibit OEMs from removing its middleware, or applications, and is
free to retaliate against OEMs that do so. Microsoft can still
deceive middleware developers and can still introduce application
development tools that pollute open standards by producing only
Windows-compatible
[[Page 28993]]
programs. And Microsoft can still protect the applications barrier
by utilizing the very same practices through its monopoly IE and
Office products that the PFJ purportedly outlaws for Windows.
In short, the PFJ does not even foreclose the means of
foreclosure that were proved at trial and affirmed by the Court of
Appeals. Under any Tunney Act standard of review, it must be
rejected.
V. THE PROPOSED DECREE IS HOPELESSLY VAGUE AND INHERENTLY
UNENFORCEABLE
The proposed decree is fiddled with ambiguities and loopholes
and grants unilateral, essentially unreviewable, power to Microsoft
to define the scope of its own ambiguous obligations. As such, the
PFJ is an illusory contract, and unenforceable as a matter of well-
settled contract law.
As the Court emphasized in Microsoft I, a proposed settlement
cannot be entered, at least without substantive modification, if it
is ambiguous or if there are "foresee[able] difficulties in
implementation." 56 F.3d at 1462. The proposed decree here is
the epitome of such a case.
Twenty-four different sections of the PFJ provide that specific
actions by Microsoft, or standards for assessing whether its
practices are permissible, must be
"reasonable." \57\ In a decree purportedly drafted
to provide a "certain" remedy, this is anything but. As
just two examples, in addition to the reasonable scope of
"bona fide," exclusive joint ventures discussed in the
preceding section, Microsoft is expressly permitted to adopt
"reasonable technical requirements" on which to override
an OEM's or end user's choice of non-Microsoft middleware (Section
III.H) and to enter into concerted refusals to deal with
ISVs--requiring them not to develop software for competing
platforms--that are "of reasonable scope and
duration" (Section III.F.2). Consent decrees are interpreted
as contracts, and it is black letter contract law that illusory
contracts, those that give one party the fight to decide the scope
of its own obligations, are not enforceable. See Rest. Contracts 2d
77.
---------------------------------------------------------------------------
\57\ Substantive "reasonable" provisions are
III.B.2, III.C.5, III.E, III.F2 (two), III.G, III.H.2, III.I,
III.J.2.b and III.J.2.C. Procedural "reasonable"
provisions are IV.A.2, IV.A.2.b, IV.A.2.c, IV.A.4, IV.A.6, IV.A.7
(two), IV.A.8.b (three), IV.A.8.h and IV.A.8.l (three).
---------------------------------------------------------------------------
The judge in the first instance for all of these reasonableness
clauses is Microsoft itself. In short, it is difficult to conceive
of a more loosely drafted decree than the PFJ, which allows the
defendant, without any practical constraint except lengthy contempt
proceedings, to establish unilaterally the extent of its own decree
obligations. Due to the inherent ambiguity in
"reasonableness" terms, these disputes will be complex,
tedious and time-consuming exercises for the Court.
The "Technical Committee" and so-called "Crown
Jewel" provisions are equally inefficacious. The Technical
Committee ("TC") established by Section IV.B of the
proposed decree does not help enforcement matters appreciably. Most
significantly, nothing that the Technical Committee does is binding
and nothing that it investigates, analyzes or recommends is
permitted to see the light of day. The TC reports only to the
plaintiffs (Section IV.B.8.e) and "all information"
gathered by the TC is subject to confidentiality and non-disclosure
agreements and a protective order (Section IV.B.9). The members of
the TC may "communicate" with third-parties, but only
about "how their complaints or inquiries might be resolved
with Microsoft" (Section IV.B.8.g). Furthermore, "[n]o
work product, findings or recommendations by the TC may be admitted
in any enforcement proceeding before the Court for any purpose, and
no member of the TC shall testify by deposition, in court or before
any other tribunal regarding any matter related to the decree"
(Section IV.D.4.d).
Rather than a vehicle for prompt resolution of enforcement
disputes, the TC provisions are a charter for delay and obfuscation.
By denying the Court any access--whether or not in
camera--to the work product of the TC, the proposed decree
simply creates another hoop through which third-party complainants,
and the government itself, must pass in order to enforce violations
of the decree b5, the defendant It also denies the Court the benefit
of the unbiased, objective technical expertise of the TC, which is
the principal criterion on which its members are to be selected.
Coupled with the sheer number of "reasonableness"
provisions in the decree itself, the TC process will therefore delay
enforcement and make clean resolution of decree interpretation
issues more costly and burdensome for all affected parties and non-
parties.
Finally, Section V.B of the PFJ provides that if the Court finds
Microsoft "has engaged in a pattern of willful and systematic
violations," on application of the plaintiffs a "one-
time extension" of the decree may be granted, for up to two
years. Although presented as a "Crown Jewel" provision,
this section does little to ensure compliance. The function of a
Crown Jewel clause is to provide such an onerous penalty that the
defendant's compliance with its substantive obligations can be
coerced, and deliberate evasion avoided, without ever having to
invoke the penalty. Here, the "threat" Microsoft is
being presented with is that of being forced for two more years to
decide at its "sole discretion" what constitutes
Windows, to constrain exclusive joint ventures to
"reasonable" duration, to gain access to intellectual
property developed by middleware competitors, and to dictate to
those competitors the functionality and user interface of their
products. This is plainly something Microsoft should welcome with
open arms rather than fear.
The vagueness of the terms, the ineffectiveness of the Technical
Committee and the lack of a meaningful deterrent Crown Jewel
provision will plague the courts for years to come. In the absence
of any deterrent, Microsoft will no doubt interpret the
"reasonableness" standards generously incorporated in
the proposed settlement in its own favor. The enforcement agencies
and numerous competitors will witness the ill effects of future
Microsoft actions and challenge these practices. However, without
the proper dispute resolution mechanisms in place, it will be up to
the courts to resolve all these "reasonableness" issues
arising out of the proposed settlement.
VI. DIVESTITURE REMAINS THE PREFERABLE AND MOST EFFECTIVE REMEDY
FOR MICROSOFT'S SECTION 2 VIOLATIONS
ProComp and its members have consistently supported structural
relief in this case. In our view, divestiture remains the most
effective remedy for Microsoft's wide-ranging unlawful practices.
Conduct remedies like the proposed decree are a second-best
solution, because they rely on the defendants good will to comply.
An injunctive decree in a Section 2 monopolization case "does
no more than encourage the monopolist to look for some new way of
exercising its dominance that is not covered by the current
injunction." \58\ Comprehensive behavioral decrees
inevitably require interpretation and application as the defendant
introduces new products, moves into new markets, or changes its
business strategies in its traditional markets.
---------------------------------------------------------------------------
\58\ 3 P. AREEDA & H. HOVENKAMP ANTITRUST LAW
704.3, at 213 (1999 Supp). See William K. Kovacic, Designing
Antitrust Remedies for Dominant Firm Misconduct, 31 Conn. L. Rev.
1285, 1311 (1999) ("By blockading recourse to certain
commercial tactics, a remedial decree will inspire the defendant to
pursue other paths that circumvent the judicially imposed
constraints."). As the Supreme Court cautioned in the landmark
DuPont antitrust case, "the policing of an injunction would
probably involve the courts and the Government in regulation of
private affairs more deeply than the administration of a simple
order of divestiture. United States v. E.I. du Pont de Nemours &
Co., 366 U.S. 316, 334 (1961); accord, AT&T, 552 F.Supp. at
167-68.
---------------------------------------------------------------------------
That does not mean, however, that conduct remedies will
necessarily be ineffective here, but rather that they must be
targeted and broad enough to redress the core practices used to
maintain Microsoft's monopoly and to eliminate the barriers to entry
protecting that monopoly power. The proposed decree does not even
purport to satisfy this goal, which we submit is compelled by the
Ford/United Shoe standard required for assessing relief in this
case. The relief proposed by the Litigating States achieves these
objectives. We respectfully submit that the Court adopt a crown
jewel divestiture provision to deter Microsoft from engaging in
further unlawful conduct.
VII. THE COURT SHOULD CONDUCT A RIGOROUS TUNNEY ACT EXAMINATION
OF THE DECREE, THE COMPETITIVE IMPACT STATEMENT AND THE DEPARTMENT'S
UNSUBSTANTIATED PROJECTIONS OF FUTURE COMPETITIVE EFFECT
There are several circumstances in which it is established that
district courts must engage in rigorous scrutiny of proposed
antitrust settlements under the Tunney Act. This case epitomizes
those circumstances. If ever there was a case in which a full,
independent judicial assessment should be conducted, it is this one.
A. The Complexity and Substantial National Importance of this
Case, the Government's Flat Reversal of Position and its Disregard
of Clear Tunney Act Obligations All Dictate the Necessity of
Critical Judicial Oversight in this Landmark Proceeding
[[Page 28994]]
Even in the pretrial context with its more limited review,
Tunney Act courts will rigorously scrutinize proposed settlements
when an antitrust case is complex, subject to considerable
controversy, and affects large segments of the public.\59\
Especially rigorous scrutiny is also undertaken when the proposed
decree departs substantially from the relief sought in the
government's complaint,\60\ or otherwise represents a sharp reversal
in the government's prior position.\61\ Each of these situations is
present in this case
---------------------------------------------------------------------------
\59\ Cascade Natural Gas Corp. v. El Paso Natural Gas Co.,
356 U.S. 129, 136, 141 (1967); AT&T, 552 F. Supp. at 152;
Associated Milk Producers, 394 F. Supp. 35, 42 (W.D. Mo. 1975).
\60\ United States v. Automobile Mfrs. Ass'n, 307 F. Supp.
617, 621 (C.D. Cal. 1969), aff'd mem. sub nom. New York v. United
States, 90 S. Ct. 1105 (1970).
\61\ Cascade, 386 U.S. at 137; Automobile Mfrs. Ass'n, 307
F. Supp. at 621.
---------------------------------------------------------------------------
1. This Complex, Controversial, Nationally Important Antitrust
Prosecution Demands Serious Judicial Oversight
This is certainly a highly complex case that has preoccupied the
political, technology and business communities for years. These are
precisely the circumstances in which the Tunney Act's genesis
reveals a major policy concern with the appearance of the government
settling for too little "because of the powerful influence of
antitrust defendants and the complexity and importance of antitrust
litigation." SENATE REPORT, supra, at 147 (statement of Judge
J. Skelly Wright).
Microsoft plainly "wield[s] great influence and
power" and has brought "significant pressure to bear on
[the] Government" throughout the litigation. Id. Thus, the
Court needs to consider whether this is a case, such as Cascade,
where the Department "knuckled under" to an economically
and politically powerful antitrust defendant. Cascade Natural Gas
Corp. v. El Paso Natural Gas Co., 386 U.S. 129, 136, 142 (1967).\62\
---------------------------------------------------------------------------
\62\ In Cascade, the Department refused to implement an
antitrust divestiture decree affirmed on appeal by the Supreme
Court. The Court eventually directed the Department to oversee
"divestiture without delay" and instructed the district
court to prepare "meticulous findings .-.-. in
light of the competitive requirements" of the remedy. 386 U.S.
at 137.
---------------------------------------------------------------------------
2. Heightened Scrutiny is Needed Because Neither the Department
Nor Microsoft Complied With their Respective Tunney Act Obligations
Courts have also refused to enter proposed antitrust consent
decrees where the Government or the defendant did not comply with
its procedural responsibilities under the Tunney Act. Even technical
and formalistic failures have been deemed grounds to deny entry of a
proposed judgment. United States v. Central Contracting Co., 527 F.
Supp. 1101 (E.D. Va. 1981).
The procedural irregularities in this case are far greater, and
are of substantive importance to the Court's review. First, the
Tunney Act requires the Department to provide an explanation of
"alternatives" to the proposed decree considered in
evaluating a settlement proposal. 15 U.S.C. 16(b)(6).
Here, however, the Department simply offers a laundry list of other
conduct remedies proposed by third-parties, dismissing all of them
collectively with the terse statement that the PFJ "provide[s]
the most effective and certain relief in the most timely
manner." CIS, 66 Fed. Reg. at 59475. The Department's
assertion is unexplained.
The CIS recites only that the Department considered intervening
changes "in the computer industry, as well as the decision of
the Court of Appeals, which reversed certain of the District Court's
liability findings." \63\ Nothing in the CIS offers any
useful guidance to the Court, or the public, as to why the rejected
conduct remedies are inappropriate; thus, the Department fails to
come forward with the "detailed notice to the public"
the Tunney Act was intended to require.\64\ This violates the
Government's duty not just to "describe" the
alternatives (which the CIS does), but also to provide an
"explanation" of their adequacy (which the CIS does
not). This is an improperly narrow view of the government's Tunney
Act responsibilities is incompatible with the purpose of the Tunney
Act to ensure that all relevant issues are subject to maximum
"ventilation." \65\
---------------------------------------------------------------------------
\63\ CIS, 66 Fed. Reg. at 59475.
\64\ The CIS was intended, rather, to be "detailed
notice to the public what the case is all about. Further than that,
the public impact statement makes the lawyers for the Department of
Justice go through the process of thinking and addressing themselves
to the public interest consideration in the proposed decree. There
is no better exercise for determining whether you are right or not
than trying to put it down on paper to see how it writes."
SENATE REPORT, supra, at 8 (remarks of Judge J. Skelly Wright).
\65\ See Central Contracting. 527 F. Supp. at 1103
(quoting 119 Cong. Rec. 24597 (1973) (remarks by Senator Tunney)).
---------------------------------------------------------------------------
The government's "predictive judgments" about market
structure and competitive effect should be accorded a presumption of
regularity, Microsoft I, 56 F.3d at 1460 (quoting United States v.
Western Elec. Co., 993 F.2d 1572, 1577 (DC Cir.), cert. denied 510
U.S. 984 (1993), but on& when tile circumstances are regular.
Where, as here, the Department's exposition of the reasons for its
settlement and its legal interpretation of the Court of
Appeals" mandate are woefully lacking, such a presumption of
regularity should not apply. In these circumstances, the Court
cannot "carefully consider the explanations of the government
in the competitive impact statement." CIS, 66 Fed. Reg. at
59476 (citation omitted).
Second, the Tunney Act mandates that the government make
available all "materials and documents which the [it]
considered determinative in formulating [a settlement]
proposal." 15 U.S.C. 16(b). The CIS responds to
this requirement with a blanket statement that [n]o materials and
documents of the type described in the [Tunney Act] were considered
in formulating the Proposed Final Judgment. Consequently, none are
being filed with this Competitive Impact Statement.
CIS, 66 Fed. Reg. at 59476. That cannot be accurate. Even in
antitrust cases that are not the length and complexity of the
Microsoft litigation, courts have found similar disclaimers
"to be almost incredible." Central Contracting Co., 527
F. Supp. at 1104. It defies credulity to suggest that there does not
exist even one document, memorandum or analysis that the Department
considered "determinative" in selecting the relief
package presented to this Court.
Third, the CIS misstates many provisions of the PFJ. We address
these in detail in Section III above, and will not repeat that
analysis here. Where, as here, the government presents a document
that seeks to justify provisions that on close examination arc
illusory, it has in effect challenged the legitimacy of statute.
Under even the strictest interpretations of Tunney Act deference,
this Court cannot permit the Tunney Act process to "make a
mockery of judicial power." Microsoft I, 56 F.3d at 1462.
Fourth, the Tunney Act requires that the defendant file a list
of "all" written or oral communications "by or on
behalf of such defendant .-.-. with any officer or
employee of the United States concerning or relevant to such
proposal, except [for] communications made by counsel of record
alone with the Attorney General or the employees of the Department
of Justice alone." 15 U.S.C. 16(g). Remarkably,
Microsoft's Section 16(g) filing indicates that only two such
communications occurred, both in connection with negotiations
together with Microsoft and the Court-appointed mediator. This
cannot be true It has been publicly confirmed by numerous public
officials, and acknowledged by Microsoft, that a large number of
Microsoft-retained lawyers and lobbyists have advocated its position
on this case before countless officials in Congress and the
Executive Branch. The Court should require Microsoft to fully comply
with Section 16(g).\66\
---------------------------------------------------------------------------
\66\ The company apparently takes the unsupportable
position that lobbying communications on the subject of the
Microsoft litigation occurring before the September 2001
negotiations resumed are not "relevant" to the
settlement. Microsoft also claims many communications were protected
by the "counsel of record" exception. "Counsel of
record" for purposes of these disclosures is intended to
differentiate between lawyers actively appearing before the trial
court and those undertaking related, but non-judicial
"lobbying" functions. Central Contracting Co., 527 F.
Supp. at 1105. The House Report discusses Congress's intent to
distinguish "lawyering contacts," which warrant
protection, from "lobbying contacts," which must be
disclosed. It states that a lobbying contact is performed by
"counsel of record accompanied by corporate officers; or by
attorneys not counsel of record." HOUSE REPORT, supra, at 6
(emphasis added). Congress requires their disclosure in order to
guarantee "that the Government and its employees in fact avoid
practicing political justice." Id. (quoting Civil Service
Comm'n, 414 U.S. 906 (1973)).
---------------------------------------------------------------------------
3. The Court Should Closely Examine the Government's Reversal of
Position on Relief The government's about-face on its remedy
proposals provides another reason why heightened judicial scrutiny
is required. While the government now says that the PFJ will provide
effective relief, this reflects a marked abandonment of its earlier
position. Indeed, the Justice Department's position just 18 months
ago was that only structural relief was adequate, and conduct
decrees like the proposed PFJ were inherent failures. As emphasized
in one of the cases cited by the
[[Page 28995]]
Justice Department, less deference is warranted when "the
government has requested broad relief at the outset, represented to
the courts that nothing less would do, and then abruptly knuckled
under." United States v. National Broad. Co., 449 F. Supp.
1127, 1144 (C.D. Cal. 1978).
The point is not that the Department has decided not to seek
divestiture, but instead that the conduct remedies it now proposes
contradict its prior representations to this Court on their
effectiveness. The earlier DOJ position was also consistent with its
prior settlement decisions in this litigation itself. In the
mediations supervised by Chief Judge Richard Posner in March 2000,
the Department and the State plaintiffs demanded settlement terms
that would have gone far beyond the limited provisions of the PFJ in
eradicating Microsoft's ability to act anticompetitively. Indeed,
the plaintiffs" last settlement proposal in the
mediations--dubbed "Mediator's Draft 18 (Attachment
B)--would have included provisions requiring Microsoft to
license the actual source code for Windows, to permit ISVs to modify
Windows itself, and to allow OEMs to "display[] a middleware
user interface" in lieu of the Windows desktop. None of these
or similar provisions is included in the proposed decree. Thus, the
PFJ is considerably weaker in several key respects than the very
conduct relief which the Department demanded in settlement before
Microsoft's Sherman Act liability had been established. \67\
---------------------------------------------------------------------------
\67\ The barrier to introduction into evidence of
settlement offers under Rule 408 of the Federal Rules of Evidence
does not apply where the settlement is not used to show liability
but instead, as here, to illuminate the policy considerations
governing fashioning of a remedy. E.g., Carney v. American Univ.,
151 F.3d 1090, 1095 (DC Cir. 1998). Rule 408 precludes proof of
settlements and settlement offers only "to prove liability for
or invalidity of" a claim. Fed. R. Evid. 408. Indeed, evidence
of settlements is expressly permitted by Rule 408 "when the
evidence is offered for another purpose." Id.
---------------------------------------------------------------------------
Given the importance of this case, and Court's obligation to
look to the Supreme Court and the DC Circuit for guidance rather
than the Justice Department, the Court must decide for itself
whether the settlement would give the public effective relief
against Microsoft's proven wrongdoing.
B. Live Evidence is Needed on the Technical and Economic
Complexities of the Software Industry and the Profound Failings of,
and Harms Caused by, the PFJ The drafting of an antitrust decree
necessarily "involves predictions and assumptions concerning
future economic and business events." \68\ It is a
"cardinal principle" of our system of justice that
"factual disputes must be heard in open court and resolved
through trial-like evidentiary proceedings." Microsoft III,
253 F.3d at 101. This mandate for evidentiary hearings applies not
just to liability determinations, but also to determinations
concerning the "appropriate [form of] relief." Id.; see
also, id. at 107 (vacating and remanding Judge Jackson's remedy
decree in large part due to his "fail[ure] to hold an
evidentiary hearing despite the presence of remedies-specific
factual disputes," and holding that a remedies decree must be
vacated whenever there is "a bona fide disagreement concerning
the substantive items of relief which could be resolved only by
trial" Id. (quoting Interim Order at 62).
---------------------------------------------------------------------------
\68\ Ford, 405 U.S. at 578.
---------------------------------------------------------------------------
The Tunney Act contemplates an evidentiary hearing in these
circumstances. As the Justice Department recognizes, this court must
permit the use of the "additional procedures" authorized
by 15 U.S.C. 16(f)"--which include live
hearings with fact and expert testimony--if "the [public]
comments have raised significant issues and .-.-.
further proceedings would aid the court in resolving those
issues." CIS, 66 Fed. Reg. at 59476. It strains credulity to
suggest, as the Justice Department does, that the remedial phase of
the most complicated antitrust case in decades will not involve
"significant issues" that would benefit from
"further proceedings." Evidentiary hearings are
critically important in complex antitrust cases because the
assessment of antitrust remedies necessarily requires the Court to
determine a number of facts relevant to both the degree of
anticompetitive harm and the likely future condition of the market
in which competition must be restored. United States v. United
States Gypsum Co., 340 U.S. 76, 89 (1950); see also United States v.
Glaxo Group, Ltd., 410 U.S. 52, 64 (1973). In particular, any
proposed settlement decree must reach forward in time to
"assure the public freedom from" continuance of the
monopolistic practices. Id. As such, this Court must make
"'predictions and assumptions concerning future economic
and business events."' Microsoft III, 253 F.3d at 102
(quoting Ford, 405 U.S. at 578). Although courts retain wide
discretion in fashioning such forward-looking relief, they must base
that relief on a sound evidentiary record. International Salt, 332
U.S. at 401.
In this case it is especially important to heed Congress's
instruction to "resort to calling witnesses for the purpose of
eliciting additional facts," HOUSE REPORT, supra, at 5,
because the record has not yet been developed on remedies. See
Associated Milk Producers, Inc., 394 F. Supp. 34 (W.D. Mo.
1975).\69\ Indeed, the procedural posture that the Court now faces
is more closely akin to a contested summary judgment motion or
administrative consent decree, for which hearings are the standard
method of resolution. E.g., Celotex Corp. v. Catrett, 477 U.S. 317
(1986); Citizens for a Better Environment v. Gorsuch, 718 F.2d 1117
(DC Cir. 1983); United States v. Trucking Employers, Inc., 561 F.2d
313 (DC Cir. 1977).\70\
---------------------------------------------------------------------------
\69\ To the contrary, the DC Circuit reversed and remanded
precisely because the prior District Judge did not permit an
evidentiary hearing on remedies. The court stressed that "a
full exploration of the facts is usually necessary to properly draw
an antitrust decree so as to prevent future violations and eradicate
existing evils," and remanded for such an exploration of
facts. Microsoft III, 253 F.3d at 101 (quoting United States v. Ward
Baking Co., 376 U.S. 327, 330-31 (1964) (internal quotations
and brackets omitted)).
\70\ In summary judgment practice, complex legal issues
are frequently presented to courts on the basis of affidavits and
other "paper" evidence. But, unless the papers reveal no
"genuine issue" of "material fact," a
standard that cannot be met here, summary judgment motions must be
denied and a case set for trial so that the Court can adduce whether
the parties have met their respective burdens of proof on the
disputed factual issues. E.g., Celotex Corp., 477 U.S. at 323;
Thompson Everett, Inc. v. National Cable Adver., 57 F.3d 1317, 1322
(4th Cir. 1995) (applying Celotex to review of a motion for summary
judgment of antirust conspiracy claim). Indeed, where the
credibility of an affiant is at issue, as it undoubtedly will be
here with respect to the reliability of expert opinions and
projections of future economic and technological developments, it is
difficult to conceive of any basis on which the Court would be
permitted to resolve such controverted issues without availing
itself of ordinary, trial-type evidentiary procedures.
---------------------------------------------------------------------------
Only by permitting third parties, such as ProComp and its
members, to participate fully in such a proceeding can the Court
assure that there will be adequate evidentiary attention to facts
and circumstances that contradict the Department's views on the
market, competition and other issues relevant for remedy purposes.
Otherwise, this Court would repeat the very error that led the DC
Circuit to reverse the last judgment in this case.
VIII. CONCLUSION
For all the foregoing reasons, the Court must find that the
Proposed Final Judgment is not in the public interest. At a minimum,
the Court should defer any judgment on the PFJ until the upcoming
remedies hearing in the ongoing litigation is conducted. This is
necessary to avoid inconsistent remedies. Indeed, many of the
remedies proposed by the Litigating States are irreconcilable with
those proposed by the PFJ. When the Court does consider the PFJ, it
is obliged in the discharge of its Article III duties to make an
independent determination whether the PFJ adequately fulfills the
mandate of the DC Circuit.
Attachment A
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
-----------------------
-----------------------
-----------------------
-------
UNITED STATES OF AMERICA, Plaintiff,
v. Civil Action No. 98-1232 (CKK)
MICROSOFT CORPORATION,
Defendant.-------------------
-----------------------
-----------------------
---------)
STATE OF NEW YORK, et al.,
Plaintiffs,
v. Civil Action No. 98-1233 (CKK)
MICROSOFT CORPORATION,
Defendant.-------------------
-----------------------
----------------------
-----------)
DECLARATION OF KENNETH J. ARROW
Kenneth J. Arrow declares under penalty of perjury as follows:
I. INTRODUCTION
1. I am the Joan Kenney Professor of Economics Emeritus and
Professor of Operations Research Emeritus at Stanford University. I
received the degrees of B.S. in Social Science from The City College
in 1940, M.A. in mathematics from Columbia University in 1941, and
Ph.D. in economics from Columbia University in 1951. I have taught
economics, statistics, and operations research at the University of
Chicago, Harvard University, and Stanford University,
[[Page 28996]]
and I have written more than 200 books and articles in economics and
operations research. I am the recipient of numerous awards and
degrees, including the Nobel Memorial Prize in Economic Science
(1972). A significant part of my writing and research has been in
the area of economic theory, including the economics of innovation
and its relation to industrial organization. My curriculum vitae is
attached.
2. I have been asked by ProComp to comment on various economic
issues related to the Revised Proposed Final Judgment
("PFJ" or the "decree") proposed by the
United States, various settling States and Microsoft Corporation
("Microsoft").
3. My review of the PFJ begins with the fact that Microsoft has
been found liable for violating Section 2 of the Sherman Act by
engaging in a widespread series of practices that illegally
maintained its monopoly in Intel-compatible PC operating systems.
These practices were focused on eliminating the threat posed to
Microsoft's PC operating system monopoly by the combination of
Netscape Navigator and cross-platform Java technology
("middleware competition").
4. Given that Microsoft has been found liable for illegal
monopoly maintenance, the remedies in this case should be designed
to eliminate the benefits to Microsoft from its illegal conduct. To
the extent possible, the remedies should be designed to restore the
possibility of competition in the market where monopoly was
illegally maintained (i.e., the market for PC operating systems). In
addition, the remedies should strengthen the possibilities for
competition and deter the exercise of monopoly power in the present
and future, taking account of the special problems of an industry in
which network effects are important.
5. It is my opinion that the PFJ fails to accomplish these
objectives. First, the PFJ is unduly focused on attempting to re-
create an opportunity for future middleware competition. Because of
network effects and path dependencies, Microsoft's monopoly power in
PC operating systems is more entrenched than it was in the mid-
1990s. It will be exceedingly difficult now, even with the best of
remedies, to re-establish middleware fully as the kind of
competitive threat to Microsoft's monopoly power that it posed in
the mid-1990s. Additional remedial steps need to be taken to ensure
that Microsoft does not benefit from its illegal conduct and the
consequences of that conduct on dynamic competition in the OS
market. Second, the PFJ does not address the fact that no effort to
restore competition in the market for PC operating systems will be
successful without measures designed to lower the applications
barrier to entry that currently protects Microsoft's position in
this market. Third, the enforcement mechanism described in the PFJ
seems likely to be ineffective, even with respect to the inadequate
remedies in the PFJ. Fourth, the PFJ pays insufficient attention to
the ways in which Microsoft is currently attempting to protect its
monopoly power by using its illegally maintained monopoly in PC
operating systems against current and future competitive threats,
such as server operating systems and Web services.
6. This affidavit has six pans and is organized as follows.
After this introduction (Part I), Part II reviews the threat that
Netscape, Java and the Internet posed in the mid-1990s to
Microsoft's monopoly power in PC operating systems. Part HI then
reviews the illegal conduct that Microsoft used in defeating this
threat. Part III also analyzes the state of the computer industry
today following this illegal conduct and explains why it seems
unlikely, at this stage, that the middleware threat can be re-
created. With this as background, Parts IV and V review and assess
the remedies proposed in the PFJ. Part IV critiques the remedies
designed to restore middleware competition. In addition, Part IV
discusses the lack of attention in the PFJ to the applications
barrier to entry that protects Microsoft's monopoly power in PC
operating systems. It also notes certain deficiencies in the
enforcement mechanism proposed in the PFJ. Part V follows with a
discussion of Microsoft's efforts to protect its existing monopoly
power by using its illegally maintained monopoly in PC operating
systems to gain advantages in other markets that threaten to reduce
the scope of its current market power. Part V explains that the PFJ
gives insufficient attention to this important subject--a
subject that bears on the future of competition in the computing
industry. The affidavit concludes in Part VI with a summary of
conclusions.
II. MICROSOFT'S MONOPOLY POWER AND THE THREAT POSED BY NETSCAPE,
JAVA AND THE INTERNET
A. NETWORK EXTERNALITIES
7. Network externalities have been central to Microsoft's
ability to maintain its monopoly power in the market for PC
operating systems. Both the District Court and the U.S. Court of
Appeals for the District of Columbia Circuit referred to the
"applications barrier to entry," the process by which a
large installed base induces the development of applications and
other complementary goods designed for the dominant operating
system, which further reinforces the position of the dominant
operating system. I described this process in a declaration that I
submitted in 1995 on behalf of the government in a prior settlement
with Microsoft:
A software product with a large installed base has several
advantages relative to a new entrant. Consumers know that such a
product is likely to be supported by the vendor with upgrades and
service. Users of a product with a large installed base are more
likely to find that their products are compatible with other
products. They are more likely to he able successfully to exchange
work products with their peers, because a large installed base makes
it more likely that their peers will use the same product or
compatible products. Installed base is particularly important to the
economic success of an operating system software product. The value
of the operating system is in its capability to run application
software. The larger the installed base of a particular operating
system, the more likely it is that independent software vendors will
write programs that run on that operating system, and, in this
circular fashion, the more valuable the operating system will be to
consumers.
8. The applications barrier to entry implies that it is likely
that a single platform (or programming environment) will dominate
broad segments of the computer software industry at any point in
time. This does not necessarily imply that there will be monopoly;
that depends on the extent to which the dominant platform is
proprietary or closed. However, if the dominant platform is
proprietary (which is certainly the case with Windows), then the
interdependence of applications and operating systems creates a
barrier against any new entrant. A new entrant would need to create
both an operating system and the applications that make it useful.
9. In addition, any customer of a new entrant would have to
incur considerable costs in switching to a new system. In the first
place, the customer would have to learn new operating procedures.
Second, there would be a problem of compatibility of files. These
factors constitute a natural obstacle to change, so that a system
with a large installed base will have a tendency to retain its
users.
10. The special nature of operating systems and software also
gives Microsoft, because of its large installed base of operating
system, a great advantage in the markets for complementary software.
Specifically, it can distribute the software much more easily than
its competitors. Since virtually every new PC ships with Windows,
Microsoft can put its software into the hands of users by including
it with the operating system. Any other vendor of complementary
software that wanted to distribute through OEMs would have to cut a
separate deal with each OEM, and would face the task of persuading
OEMs to carry software products that may be directly competitive
with products offered by Microsoft. As a result, complementary
software from other vendors typically either has to be downloaded
(which imposes added costs on users) or distributed separately to
users in "shrink wrap." In addition, Microsoft has the
ability to allow Microsoft developers of complementary software
access to "hidden APIs"--application programming
interfaces in the PC operating system that Microsoft developers know
about but which are not disclosed fully to competing developers of
complementary software. of the OEM distribution channel. Most
important, Sections III.C and III.H cannot, by their very design,
provide an opportunity for rival middleware products--as
compared to Microsoft's middleware--to attract sufficient
distribution to have any impact at all on the applications barrier
to entry.
The OEM sections may actually make matters worse for middleware
rivals. The PFJ limits what OEMs can remove from their PC products
to just the middleware icons, euphemistically referred to as
"access to" middleware in Sections III.C and III.H. In
other words, OEMs are not permitted to remove the code for Microsoft
Interact Explorer, Windows Media Player or any other Microsoft
middleware, and the proposed decree allows Microsoft to commingle
and integrate middleware with its Windows operating system software.
The fact that the flexibility guaranteed to OEMs is limited to
removing icons, and not the middleware itself, has major competitive
[[Page 28997]]
significance and actually guarantees perpetuation of the
applications barrier protecting Microsoft's operating systems
monopoly.
1. The OEM Provisions Place Sole Responsibility for Introducing
Middleware Competition on PC Manufacturers
To achieve its goal of "recreating the potential for the
emergence" of middleware alternatives to Microsoft's monopoly
operating system, the PFJ delegates the role of competitive
gatekeepers to OEMs. Instead of requiring the monopolist itself to
unfetter the market for entry by competitors, here the PFJ imposes
that obligation on third-parties who are partners with, not
competitors of, the defendant. If PC manufacturers do not act on the
desktop flexibility powers provided by Sections III.C or III.H of
the PFJ, there will, by definition, be no OEM-based remedy. Walter
Mossberg, Personal Technology columnist for the Wall Street Journal,
captured the problem elegantly. "Much" of the DOJ
settlement, he explained, "pertains to the company's relations
with the hapless makers of PCs, which aren't in any position to defy
Microsoft." \50\
---------------------------------------------------------------------------
\50\ Waiter S. Mossberg, Microsoft Has Good Yea); At
Expense of Customers, Wall Street J., Dec. 27, 2001, at B1.
---------------------------------------------------------------------------
OEMs are captives of Microsoft for a number of reasons,
beginning with the obvious fact that there are no commercially
viable alternatives to the Windows operating system; there are no
real alternatives to Microsoft's Office suite of personal
productivity applications (Word Processing, Spreadsheets, E-Mail,
etc.); and there is de minimis competition for Internet browsers.
The fact that OEMs find themselves in a sole source relationship
with the defendant provides Microsoft with innumerable avenues to
exercise its leverage over the OEM channel. These complex
relationships are built more on the subtleties of a sole source
relationship than on written contracts, or overt retaliation, and
thus are hardly resolved by the uniform Windows pricing obligation
provided for in Section III.B.
It must also be understood that personal computer manufacturers
are in the business of producing low margin commodity equipment, a
business characterized by very minimal (and shrinking) R&D
budgets. It is unrealistic to expect any Windows-centric OEM to
develop, test, and pre-install packages of rival middleware, because
that would require substantial expenditures in technical software
expertise and customer support which would further narrow already
shrinking profit margins in a business where competitors are
currently engaged in a major price war to gain market share.
The financial burden of customer support, where a single end
user service call can eliminate an OEM's profit margin on a PC,
creates powerful disincentives to the inclusion of non-Microsoft
middleware. See Microsoft III, 253 F.3d at 62. Judge Jackson found
and the Court of Appeals affirmed that in light of their customer
support obligations, which are "extremely expensive,"
Microsoft III, 253 F.3d at 61 (citing Findings of Fact 210),
OEMs are disinclined to install multiple versions of middleware.
Since OEMs "have a strong incentive to minimize costs,"
id., the customer confusion resulting from duplicative middleware is
sufficient to preclude OEMs from installing competitive programs
where comparable Microsoft middleware is included with Windows.
Under the proposed decree, however, these are precisely the
circumstances faced by OEMs. There are no restrictions in the PFJ on
Microsoft's ability to integrate middleware technologies into
Windows; in fact Microsoft is allowed to do so at its "sole
discretion." Even if an OEM wants to install a competitive
non-Microsoft middleware program, it will be required to deal with
the fact that the corresponding Microsoft middleware product is
already present on its PCs, which it is not permitted to remove.
Consequently, just as OEMs" cost minimization requirements
forced them not to pre-install Netscape where IE was included with
Windows, so too will these same profit pressures force OEMs to
decline to install competing middleware programs under the PFJ.
This is in stark contrast to the provision of the Interim Order
on which the Department claims to have based its settlement. Both
the Interim Order and the remedy proposed by the Litigating States
would require Microsoft to ship a version of the operating system
without any middleware included, if requested by an OEM. That scheme
makes it possible for an OEM to truly offer a differentiated product
suite without the burden of having Microsoft's corresponding
technology present on the system as well.
Even if they had an independent economic incentive to support
middleware competition, however, Windows OEMs are still held captive
under the proposed decree's retaliation provisions. Section III.A
prohibits "retaliation" (another undefined term) by
Microsoft against OEMs for developing, distributing or supporting
competitive middleware or exercising their desktop icon flexibility
fights.
Despite their relative length, the retaliation provisions do not
at all effectively preclude retaliation. Retaliation is only
prohibited under Section III.A where "it is known to
Microsoft" that an OEM is undertaking a permitted, competitive
action. This subjective, actual knowledge standard will be difficult
if not impossible to enforce. In addition:
Microsoft is not prohibited from retaliating if an OEM removes
the code for a Microsoft Middleware Product from its retail PCs.
Nor does this provision prevent retaliation if an OEM removes
either icons or code for Microsoft software that does not qualify as
a "Microsoft Middleware Product" (for instance,
Microsoft Movie Maker).
And Microsoft is not prohibited from retaliating against OEMs
for promoting products that fall outside of the Section III.A terms.
By way of example, Microsoft could retaliate against OEMs for
promoting non-Microsoft Interact services, server operating systems,
server middleware or server applications. Microsoft could even
retaliate against OEMs for distributing or promoting middleware that
does not yet compete with Microsoft Middleware Products.
Section III.A also limits the prohibited forms of retaliation to
"altering Microsoft's commercial relations with that OEM, or
by withholding newly introduced forms of non-monetary Consideration
(including but not limited to new versions of existing forms of non-
monetary Consideration)." PFJ, 66 Fed. Reg. 59453. Microsoft
is not precluded from denying new monetary consideration to OEMs as
a means of retaliation, as that is neither an "alter[ed]
commercial relation" nor a "newly introduced form of
non-Monetary Consideration." Similarly, Microsoft can also
reward compliant OEMs by providing concessions on license fees for
non-Windows Microsoft software, including applications such as
Office, server operating system software and server applications, as
well as Microsoft Middleware Products. None of these types of
software is covered by the pricing parity requirements of Section
III.B, which apply only to "Microsoft Operating System
Products." Id.
Finally, as a general matter there is no practical way to
identify and prohibit all the subtle ways Microsoft can
preferentially favor some OEMs, and harm others, depending on their
degree of support for Windows. For instance, the definition of
Consideration in Section VI.C covers "product
information" and "information about future plans."
Id. at "59458. Yet Microsoft could retaliate against OEMs by
denying them sufficient technical information regarding important,
upcoming Windows features, for example by not inviting them to
internal development conferences or presentations. Likewise,
Microsoft could assign fewer or less knowledgeable technical support
personnel to a specific OEM's account team, a form of retaliatory
discrimination that would be difficult to detect and virtually
impossible to prove.
In sum, the anti-retaliation provisions offer little shelter for
OEMs desiring to respond to legitimate demands by their customers
for choice among competing software products. If there is any doubt
about this analysis of Sections III.C and III.H above, the Court
should look no further than the OEMs" treatment of Microsoft
Internet Explorer. On July 11, 2001 Microsoft announced that OEMs
would be free to remove access to Internet Explorer, which they had
previously been prohibited from doing.\51\ Since this announcement
was made more than six months ago, not one OEM has actually taken
advantage of this provision and removed the icon for Internet
Explore from retail PCs This real-world market test is an accurate
gauge of how many OEMs will likely take advantage of the exact same
flexibility provided in Section III.H of the decree, albeit for a
somewhat wider range of middleware products: none.
---------------------------------------------------------------------------
\51\ We note that at the time of the announcement,
Microsoft had already achieved significantly greater than 80 percent
of the browser market as a result of its six-year anticompetitive
campaign, so it is hard to view this as a concession.
---------------------------------------------------------------------------
2. The Provisions Allowing OEM Flexibility Do Not Address the
Key Issue of Microsoft's Ubiquitous Middleware Development Platform
The core of the case against Microsoft rests on the theory that
Netscape and Java provided an alternative development
[[Page 28998]]
platform (middleware) for applications developers, which, if
applications developers began writing applications to the
middleware, would undermine the applications barrier to entry and
thus Microsoft's Windows monopoly. For this to occur, developers
need to view rival middleware as a more attractive development
platform than Windows. Unfortunately, the PFJ provides a solution to
the wrong problem and actually ensures that rival middleware
applications will never be able to attract a critical mass of
developers.
Sections III.C and III.H of the decree allow OEMs to install
competing middleware and to "enable or remove access to"
Microsoft Middleware Products from the desktop of Windows PCs that
they sell to end users. However, as noted, these provisions do not
authorize OEMs to delete the Microsoft middleware itself, and
Microsoft is not prohibited from retaliating against OEMs that
attempt to delete Microsoft middleware code from its configured PCs.
This distinction between icons and code is competitively
decisive. The applications barrier exists because developers write
to Windows-centric APIs. Under the terms of the decree, however, the
APIs exposed by Microsoft middleware remain on every Windows PC even
if OEMs and end-users exercise all of the flexibility provided by
Section III.H. It is crucial to understand that an application
developer can write to Microsoft middleware regardless of whether
"access" to that software is removed. In other words,
Microsoft's middleware APIs remain ubiquitously available on all
Windows PCs under the proposed decree. The best a rival middleware
provider can hope for is to be "carried" alongside
Microsoft's middleware on some lesser portion of personal computers.
A critical lesson learned in this case is that, as with Netscape
and Java, ubiquity trumps technology in network effects markets.
Professor Arrow explains that no middleware competitor can expect
any economically significant chance to compete on the merits if, as
permitted under the decree, Microsoft middleware is ubiquitous.
Arrow Decl. 26. The important distinction between icons and
code was explained by the DC Court of Appeals in 1998. The court
emphasized that removal of end user access "do[es] not remove
the IE software code, which indeed continues to play a role in
providing non-browser functionality for Windows. In fact, browser
functionality itself persists, and can be summoned up by
.-.-. running any application (such as Quicken) that
contains the code necessary to invoke the functionality."
Microsoft II, 147 F.3d at 941.
Consequently, by limiting its effect to the removal of icons
only, the proposed decree cannot achieve any appreciable effect in
eroding tile applications barrier. They cannot "recreate the
potential for the emergence" of middleware alternatives in a
way that provides an economically realistic opportunity for
operating systems competition.
3. The OEM Provisions Do Not Create a Level Playing Field for
Middleware Desktop Competition
We explained above why it is unlikely that OEMs will expend
resources to promote rival middleware products. The alternative
model is that rival middleware providers would pay an OEM to feature
its software and delete end-user access to Microsoft's middleware.
This is consistent with the CIS, which explains that the function of
the OEM provisions is to allow OEMs to "feature and
promote" non-Microsoft middleware. CIS, 66 Fed. Reg. at 59460.
Section III.H does not achieve this goal, for two primary
reasons. First, as detailed above, the "value" of the PC
desktop is diminished by the fact that an OEM is not permitted to
remove the Microsoft middleware code, and thus cannot offer a rival
exclusivity.
Second, Section III.H.3 does not guarantee that a rival's
middleware icon will even remain on the desktop. As the Department
explains the theory of this remedy, it is to create a
"marketplace" on the desktop where OEMs can "stand
in the shoes" of consumers and exercise choices in which
middleware technologies to feature based on price and performance.
Yet, the PFJ permits Microsoft to "sweep" competing
middleware icons placed on the Windows desktop by OEMs.
That is, Windows may automatically remove the icons featured by
an OEM just fourteen days "after the initial boot-up of a new
Personal Computer." True, this section contains a proviso
stating that Microsoft may not do so absent end user
"confirmation," but neither the text of this provision
nor the Competitive Impact Statement require that confirmation be
based on any objective notice or alert by Microsoft. CIS, 66 Fed.
Reg. at 59471.
The fourteen-day desktop sweep proviso directly contradicts the
objective of fostering OEM flexibility to feature and promote non-
Microsoft middleware, because it undermines the ability of OEMs to
sell desktop placement an ISV can count on. Under Section III.H.5,
the best an OEMs can offer is a guarantee of desktop placement for
fourteen days.
This is critically important for the reasons stated above. As
rival middleware vendors attempt to attract developers to write
applications to their platforms, as opposed to Microsoft's platform,
they will have to make representations as to how many PC desktops
actually have the rival middleware installed and available to
consumers. With the fourteen day "sweep" provision
included in the PFJ, ISVs will simply not be able to make any
accurate projections, which will further reduce the price they might
be willing to pay for desktop placement.
4. Additional OEM Provisions Further Undermine the Crucial
Ability of ISVs to Differentiate Competing Middleware Products
In order to displace Microsoft middleware and encourage
applications developers to write to their APIs, competing ISVs will
need to differentiate their middleware products from Windows Media
Player, Windows Messenger and the other Microsoft middleware
products that are bundled with Windows. The OEM provisions
affirmatively undermine the ability of ISVs to achieve any
meaningful degree of product differentiation.
First, Section III.C.3 permits OEMs to launch automatically non-
Microsoft middleware only at boot-up or upon making a connection to
the Internet. This constrains the ability of manufacturers to
configure competing middleware products and reduces the value of
this flexibility for (and hence potential OEM revenues from) 1SVs.
Second, auto-launch of competing middleware is permissible under
Section III.C.3 only (a) "if a Microsoft Middleware Product
that provides similar functionality would otherwise be launched
automatically at that time," PFJ, 66 Fed. Reg. 59454, and (b)
if the non-Microsoft Middleware "displays on the desktop no
user interface or a user interface of similar size and shape to the
user interface displayed by" the corresponding Microsoft
middleware product." Id. These limitations allow Microsoft to
gate middleware competition by reducing the role of non-Microsoft
middleware to only those instances in which Microsoft's own products
are launched. If Microsoft decides that its middleware products will
not have a user interface, or will utilize a window of a specific
size, those decisions are binding on competitors" product
designs as well. Indeed, the PFJ surprisingly appears not even to
contemplate a situation where Microsoft's competitors develop a
middleware product for which there is no "corresponding"
Microsoft middleware.
Third, the PFJ empowers Microsoft to limit the freedom of ISVs
in their product design and functionality decisions on its
competitors. Microsoft can also limit the placement of icons and
shortcuts may appear on the desktop and elsewhere, id. at 59454,
59455, the "functionality" of middleware products whose
icons and shortcuts may be included by the OEM, and the ability of
end users to designate non-Microsoft middleware as default
middleware on their computers. Id. at 59455.
Each of these provisions has a similar, substantial effect. By
allowing middleware to be substituted by an OEM only when (a) it
performs similarly to Microsoft middleware, (b) exhibits
functionality defined by Microsoft, or (c) includes the same user
interface as Microsoft middleware, the PFJ allows Microsoft to
"gate" competition. There is no competitive
justification for these provisos, all of which serve to eliminate
opportunities for product differentiation and permit Microsoft to
constrain middleware competition to the scope, location and even
"look and feel" it determines for its own products.
5. The OEM Provisions Contain Other Superfluous Terms that
Substantially Limit Any Potential Market Impact
Section III.H of the proposed decree allows Microsoft twelve
months to modify Windows XP in order to permit OEMs to remove
Microsoft middleware icons or change default settings for invoking
middleware functionalities. Yet the modification necessary to allow
removal of icons via the "Add/Remove Programs" utility
is a trivial exercise. Demonstrable proof of this fact is that
Microsoft was able to modify the beta version of Windows XP to
permit removal of the Internet Explorer icon within weeks of its
July 11, 2001 announcement. We can not fathom why Microsoft is now
given twelve months to accomplish the same task.
[[Page 28999]]
Section VI.N of the decree also provides that a "Non-
Microsoft Middleware Product" is software with certain
functionalities "of which at least one million copies were
distributed in the United States within the previous year."
Because the Section III.H obligations requiting modification of
Windows XP to permit addition and removal of competing middleware
apply to "Non-Microsoft Middleware Products," OEMs are
foreclosed from the ability to feature and promote small middleware
start-up competitors in Windows XP, Section VI.N is a very real
impediment to achievement of the innovative middleware market the
PFJ is purportedly designed to promote.
6. The OEM Provisions Have No Impact on Java.
Sections III.C and III.H also do not apply to Microsoft's Java
Virtual Machine ("JVM"), or Microsoft's equivalent of
the JVM, its Common Language Runtime. Despite the fact that the
"Microsoft Middleware Product" definition includes the
Microsoft Java Virtual Machine, it appears there is no competitive
consequence to its inclusion in this definition in any of the
provisions of the decree. First, Microsoft no longer ships its JVM
with Windows, so there is nothing for OEMs to remove. Second, even
if they did continue to ship a JVM, there is no "icon"
or "end-user access" to Java. Rather, Java is invoked
automatically by programs that rely on its presence.
7. The OEM Provisions Largely Codify Microsoft's Existing
Business Practices.
Users today enjoy the flexibility--without the benefit of
the PFJ--to add, delete or customize their own PC desktops.
Users may delete icons by simply "dragging" the icon to
the "recycle bin" or "right-clicking" on the
icon and simply choosing "delete."
Thus, the decree's OEM provisions allowing OEM removal of icons
only codify Microsoft's current business practices. In response to
the Court of Appeals" opinion, Microsoft on July 11, 2001
announced that "it is offering computer manufacturers greater
flexibility in configuring desktop versions of the Windows operating
system in light of the recent ruling by the U.S. Court of Appeals
for the District of Columbia." \52\ According to the
Microsoft press release, under this policy OEMs can "remove
the Start menu entries and icons that provide end users with access
to the Internet Explorer components of the operating system,"
and "Microsoft will include Internet Explorer in the Add/
Remove programs feature in Windows XP." Id. Thus, Microsoft
stressed that "Microsoft has always made it easy for consumers
to delete the icons for Internet Explorer, but will now offer
consumers this additional option in Windows XP." Id.
---------------------------------------------------------------------------
\52\ Available at www.microsoft.com/MSCorp/presspass/
Press/2001/Jul01/07-11OEMFlexibilityPR.asp.
---------------------------------------------------------------------------
This announcement is revealing because it confirms, from
Microsoft itself, that the "flexibility" provided to end
users by Section III.H of the decree has always existed. And by
revising Windows XP to permit OEMs to remove the Internet Explorer
icon, Microsoft has already done precisely what the decree requires.
Thus, the OEM provisions of the decree succeed mostly in codifying
Microsoft's current business practices and achieve minimal, if any,
remedial purpose. In sum, the relief provided by Sections III.C and
III.H is fundamentally at odds with the theory of the ease. These
OEM "desktop" remedies will not provide any opportunity
for alternative middleware platforms to attract developers and thus
to challenge the applications barrier to entry.
They are economically irrational since Microsoft's middleware
will continue to be ubiquitously available on all PCs, regardless of
the choices exercised by OEMs. These provisions allow Microsoft to
dictate product design features to its rivals, to limit product
differentiation and to restrict OEM deals with rivals to a brief,
fourteen-day exclusivity period. And at bottom, they cannot change
the economic structure of the PC distribution channel because OEMs
are sole-source partners of Microsoft, not competitors.
D. The Proposed Decree Does Not Effectively Preclude Microsoft's
Exclusive Dealings
Although the proposed decree purports to ban exclusive dealing
by Microsoft with respect to Windows software, Section III.G
expressly permits Microsoft to establish favored or exclusive
relations with certain OEMs, ISVs, etc., if the parties enter into
"any bona fide joint venture or .-.-. any joint
development or joint services arrangement." This exception all
but vitiates the supposed prohibition, for it allows Microsoft to
enter into the identical distribution agreements that were held
unlawful at trial merely by denoting them as "joint"
activities.
E. Current Market and Economic Realities Demonstrate that the
PFJ is Incapable of Having Any Substantial Procompetitive Impact
The Department recognizes explicitly that relief in this case
must "ensure that there remain no practices likely to result
in monopolization in the future." Microsoft III 253 F.3d at
103 (citations omitted); see CIS, 66 Fed. Reg. at 59465
(monopolization remedy should "avoid a recurrence of the
violation" in the future). Yet by failing to address
significant market and technological developments that have occurred
in the period since the trial record closed, the narrow remedies of
the proposed decree do not provide relief that comes even close to
ensuring that Microsoft's unlawful practices will not be repeated in
the future.
1. New Monopolies Enable Microsoft to Protect its Operating
System Monopoly Despite the PFJ Since the trial, Microsoft has
solidified three new chokeholds with which it can easily perpetuate
its monopoly power:
Microsoft's monopoly power over Interact browsers and its
integration of IE into Windows allow it to replicate many of the
prohibited practices through IE.
Microsoft's monopoly power over the Office suite and its
anticompetitive use of Office porting allow it to replicate many of
the prohibited practices through Office.\53\
---------------------------------------------------------------------------
\53\ Microsoft's resulting power over Internet browsers
and personal productivity applications provides it with alternative
vehicles with which to achieve the same anticompetitive foreclosure
of middleware threats that it accomplished in 1995-98 through
Windows itself.
---------------------------------------------------------------------------
Microsoft is fast acquiring monopoly power in the operating
systems for low-end servers used in local or wide area networks.
Microsoft can just as easily exploit the APIs exposed by the
operating system on the network to perpetuate the applications
barrier to entry.
However, the PFJ does not require the disclosure of APIs exposed
by IE, Office the low-end server operating systems. Microsoft can
develop middleware programs that utilize these APIs--which are
as ubiquitous as the Windows APIs themselves--and thus evade
the API disclosure provisions of the PFJ. Similarly, although
Section III.E of the PFJ requires the disclosure of Communications
Protocols used for interoperability with Microsoft server operating
systems, by controlling the client (IE), Microsoft can control the
server irrespective of these provisions.\54\
---------------------------------------------------------------------------
\54\ As Microsoft executive (and trial witness) Paul
Maritz put it, "the most important thing we can do is not lose
control of the Web client," because "[b]y controlling
the client, you also control the server." Gov't Ex. 498.
Microsoft can suppress competition by adding proprietary features
and protocols to the IE browser that are necessary to generate
actions by its server operating systems products or by refusing to
add features and protocols that would similarly support a
competitor. Professor Schmalensee acknowledged this incentive at
trial: "[I]f one company controlled the browser and its look
and feel and how it presented applications, it could severely
enhance or detract from the application functionality of programs or
applications running on the server." 6/24/99 (p.m.) Tr.
46-47; see also id. at 48; Henderson Decl. 82 (quoting
Rasmussen Dep., 12/15/98 (a.m.), at 67-68).
---------------------------------------------------------------------------
That is, Microsoft's monopoly control over IE allows it
unilaterally to implement proprietary standards and protocols within
IE that are not disclosable under the PFJ because they are not
"implemented in a Windows Operating System Product installed
on a client computer" within the scope of Section III.E.
2. The Proposed Settlement Ignores the Likely Tactics Microsoft
Will Use to Eliminate the Next Significant Threat to its Monopoly
Position
The primary competitive threat to the Windows OS/IE platform is
the emergence of applications and services provided over the
Internet, where the application or service is independent of the
computing platform employed by the user. The recent spread of high-
speed Internet service has further spurred the development of this
category of distributed applications or web services that take
advantage of Internet's underlying architecture.
Two features of distributed applications in particular
constitute a revolutionary change from the previous "client-
server" model. First, rather than residing principally on one
machine (either a client or a server), distributed applications
effectively reside on the network itself. It is therefore possible
to access these services from any computer or device connected to
the Internet. From the user's perspective, although the application
itself resides on the network, it is accessible as rapidly and
seamlessly as if it resided on the user's own PC.
Second, because the applications and data are accessible from
different machines,
[[Page 29000]]
access to these services depends critically upon being able to
establish the identity of the user seeking access to those services.
Web identity and authentication services accordingly take on
extraordinary importance in the world of distributed applications.
These changes in the market reveal a picture of today's PC
industry that is radically different from the Department's placid
vision of "recreating the potential" for middleware
competition by opening the OEM channel to possible future middleware
innovations. The critical question, however, is whether distributed
web-based applications, which do not need to be compliant with any
particular operating system, will be able to remain independent of
Windows and in the process bring down the applications barrier to
entry.
The PFJ does not protect the Internet-based competition for the
Windows operating systems monopoly in the future because the
proposed decree does nothing to prevent Microsoft from continuing to
shift from one anticompetitive activity to another in order to
maintain its monopoly. Instead of bundling middleware code into
Windows and creating exclusive dealing arrangements with ISVs and
OEMs, Microsoft today is attempting to defeat the threat from Web-
based services by bundling its Web services technologies into
Windows and entering into, exclusive vertical distribution
arrangements with Web-based content and e-commerce providers. See
Passport to Monopoly: Windows XP, Passport, and the Emerging World
of Distributed Applications at 25 (ProComp June 21, 2001) and
Microsoft "s Expanding Monopolies: Casting A Wider .Net
(ProComp May 15, 2001).
As would be expected, Microsoft now attempts to create a
proprietary equivalent to the distributed applications paradigm by
bundling its latest operating system with certain applications and
technologies in order to secure dominance in distributed
applications. For example, Microsoft Passport, a proprietary
authentication technology built on the .NET Framework, is bundled
with Windows XP. This bundling allows Microsoft's own authentication
services to have a ubiquitous distribution base--and deny rival
technologies ubiquity--in the same way that its bundling
practices extinguished the middleware threats from Netscape and
Java. A monopoly in web identity services will enable Microsoft to
control the means by which users access distributed applications
from the Interact. Nonetheless, the PFJ does nothing to restrict
Microsoft's practices in this area. The API disclosure provisions
only mandate the release (if at all) of APIs used by a Microsoft
Operating System product to intemperate with Microsoft Middleware,
which excludes Passport.
Similarly, Microsoft's broader .NET initiative is replacement of
the Java and Netscape technologies that it unlawfully crippled with
Microsoft proprietary technology. Microsoft defines .NET as its
"platform for XML web services." \55\ The services
which .NET offers are a combination of pre-designed applications,
some of which come under the rubric "Hailstorm," and a
set of tools, under the rubric of Visual Studio Integration Program,
designed to allow developers to create web applications which rely
on the all-important APIs exposed by Microsoft programs. At the core
of .NET stands the Common Language Runtime environment
("CLR").
---------------------------------------------------------------------------
\55\ .NET Defined, available at www.Microsoft.com/net/
whatis.asp.
---------------------------------------------------------------------------
CLR is Microsoft's answer to the Java runtime environment, with
a key difference. CLR provides the developer with a device that is
similar to the JVM, but that lacks the element so destructive to
Microsoft's hegemony--freedom from reliance on Microsoft's
APIs. Of course, CLR will take full advantage of Microsoft's vast
distribution network via bundling with future versions of Windows
(including Windows XP) as well as with IE and Microsoft Network.
Microsoft's monopolization strategy has not changed at all. Bill
Gates has explained that "there's a very strong analogy here
between what we're doing now [with Web-based services] and what we
did with Windows." \56\ Since Microsoft will pursue the
same tactics and strategies found unlawful in the instant case, any
remedy that does not prohibit a repeat of these practices in new
markets and new contexts is facially flawed.
---------------------------------------------------------------------------
\56\ "So for every element of Windows--user
interface, the APIs ... for each one of those things there's an
analogy here." Bill Gates, Forum 2000 Keynote, Bill Gates
Speaks About the .NET Platform. (Available at www.microsoft.corn/
BUSINESS/vision/gates.asp)
---------------------------------------------------------------------------
In sum, the proposed decree fails to address identifiable market
and technological developments since the trial record closed that
allow Microsoft both to protect its operating systems monopoly
against current potential rivals and to engage in the same types of
conduct adjudged unlawful by the Court of Appeals. Consequently, the
proposed decree does not and cannot "ensure that there remain
no practices likely to result in monopolization in the
future," Microsoft III, 253 F.3d at 103 (citations omitted),
and must be rejected by this Court.
F. The Decree Increases Microsoft's Market Dominance and
Actually Worsens Competitive Conditions in the Relevant Software
Markets
The proposed settlement not only does not achieve the
procompetitive effects that the Department claims, it increases
Microsoft's dominance of the operating systems market and actually
worsens competitive conditions across the entire software industry.
Among other things, the proposed decree rewards Microsoft for its
illegalities, promoting future defiance of antitrust laws and
intransigent tactics by dominant firms. Many of the deficiencies of
the proposed decree have been outlined in this submission. These
deficiencies will allow Microsoft to perpetuate its monopoly
position. In addition, the decree represents a step back from the
current state of affairs notably because it sanctions continued
bundling or commingling by Microsoft of middleware technologies with
Windows, thus increasing rather than decreasing Microsoft's power to
sustain the applications barrier to entry protecting its operating
systems monopoly while disadvantaging non-Microsoft middleware
providers. By enhancing Microsoft's ability to buttress the
applications barrier to entry, the proposed settlement harms
competition, and increases, rather than terminates, Microsoft's
monopoly power.
G. The Settlement Would Not Have Prevented Microsoft's Unlawful
Campaign Against Netscape and Java One appropriate measure for
assessing whether the PFJ is adequate is whether it would preclude
today the same conduct Microsoft used to foreclose Netscape and
Java, and thus preserve its monopoly power, in 1995-98. It
would not.
As a fundamental matter, this is because Microsoft is not
required to disclose the APIs needed for new and innovative forms of
middleware. When Netscape was launched in late 1994, Microsoft did
not have an Internet browser and was focused on Chairman
Gates" vision of interactive television, rather than the
Interact. Thus, there were no APIs exposed by Windows that were
"used by Microsoft Middleware to interoperate" within
the scope of Section III.D of the proposed decree. Had the decree
been in place when Jim Barksdale, former CEO of Netscape, met with
Microsoft in 1995, Netscape would not have been entitled to APIs or
any other interoperability information under the express terms of
the decree. "For the same reasons, no interoperability
information would have been disclosable to Sun in order to enable
interoperability of Java runtime technology with Windows.
Most of the distribution tactics Microsoft used to cut off
Netscape's air supply and to "pollute the market for cross-
platform Java" are also permissible under the decree.
Microsoft can still force OEMs to take its own middleware through
bundling. Microsoft can still coerce or threaten partners like Intel
and rivals like Apple and can still refuse to port its monopoly
Office suite in order to protect the applications barrier to entry.
Microsoft can still throttle middleware innovations because the PFJ
gives it the ability to "gate" the functionality and
product design of rival middleware products. Microsoft can still
prohibit OEMs from removing its middleware, or applications, and is
free to retaliate against OEMs that do so. Microsoft can still
deceive middleware developers and can still introduce application
development tools that pollute open standards by producing only
Windows--compatible programs. And Microsoft can still protect
the applications barrier by utilizing the very same practices
through its monopoly IE and Office products that tile PFJ
purportedly outlaws for Windows.
In short, the PFJ does not even foreclose the means of
foreclosure that were proved at trial and affirmed by the Court of
Appeals. Under any Tunney Act standard of review, it must be
rejected.
V. THE PROPOSED DECREE IS HOPELESSLY VAGUE AND INHERENTLY
UNENFORCEABLE
The proposed decree is riddled with ambiguities and loopholes
and grants unilateral, essentially unreviewable, power to Microsoft
to define the scope of its own ambiguous obligations. As such, the
PFJ is an
[[Page 29001]]
illusory contract, and unenforceable as a matter of well-settled
contract law. As the Court emphasized in Microsoft I, a proposed
settlement cannot be entered, at least without substantive
modification, if it is ambiguous or if there are
"foresee[able] difficulties in implementation." 56 F.3d
at 1462. The proposed decree here is the epitome of such a case.
Twenty-four different sections of the PFJ provide that specific
actions by Microsoft, or standards for assessing whether its
practices are permissible, must be
"reasonable." \57\ In a decree purportedly drafted
to provide a "certain" remedy, this is anything but. As
just two examples, in addition to the reasonable scope of
"bona fide," exclusive joint ventures discussed in the
preceding section, Microsoft is expressly permitted to adopt
"reasonable technical requirements" on which to override
an OEM's or end user's choice of non-Microsoft middleware (Section
III.H) and to enter into concerted refusals to deal with
ISVs--requiring them not to develop software for competing
platforms--that are "of reasonable scope and
duration" (Section III.F.2). Consent decrees are interpreted
as contracts, and it is black letter contract law that illusory
contracts, those that give one party the right to decide the scope
of its own obligations, are not enforceable. See Rest. Contracts 2d
77.
---------------------------------------------------------------------------
\57\ Substantive "reasonable" provisions are
III.B.2, III.C.5, III.E, III.F2 (two), III.G, III.H.2, III.I,
lll.J.2.b and III.J.2.C. Procedural "reasonable"
provisions are IV.A.2, IV.A.2.b, IV.A.2.c, IV.A.4, IV.A.6, IV.A.7
(two), IV.A.8.b (three), IV.A.8.h and IV.A.8.1 (three).
---------------------------------------------------------------------------
The judge in the first instance for all of these reasonableness
clauses is Microsoft itself. In short, it is difficult to conceive
of a more loosely drafted decree than the PFJ, which allows the
defendant, without any practical constraint except lengthy contempt
proceedings, to establish unilaterally the extent of its own decree
obligations. Due to the inherent ambiguity in
"reasonableness" terms, these disputes will be complex,
tedious and time-consuming exercises for the Court.
The "Technical Committee" and so-called "Crown
Jewel" provisions are equally inefficacious. The Technical
Committee ("TC") established by Section IV.B of the
proposed decree does not help enforcement matters appreciably. Most
significantly, nothing that the Technical Committee does is binding
and nothing that it investigates, analyzes or recommends is
permitted to see the light of day. The TC reports only to the
plaintiffs (Section IV.B.8.e) and "all information"
gathered by the TC is subject to confidentiality and non-disclosure
agreements and a protective order (Section IV.B.9). The members of
the TC may "communicate" with third-parties, but only
about "how their complaints or inquiries might be resolved
with Microsoft" (Section W.B.8.g).
Furthermore, "[n]o work product, findings or
recommendations by the TC may be admitted in any enforcement
proceeding before the Court for any purpose, and no member of the TC
shall testify by deposition, in court or before any other tribunal
regarding any matter related to the decree" (Section
IV.D.4.d).
Rather than a vehicle for prompt resolution of enforcement
disputes, the TC provisions are a charter for delay and obfuscation.
By denying the Court any access--whether or not in
camera--to the work product of the TC, the proposed decree
simply creates another hoop through which third-party complainants,
and the government itself, must pass in order to enforce violations
of the decree by the defendant. It also denies the Court the benefit
of the unbiased, objective technical expertise of the TC, which is
the principal criterion on which its members are to be selected.
Coupled with the sheer number of "reasonableness"
provisions in the decree itself, the TC process will therefore delay
enforcement and make clean resolution of decree interpretation
issues more costly and burdensome for all affected parties and non-
parties.
Finally, Section V.B of the PFJ provides that if the Court finds
Microsoft "has engaged in a pattern of willful and systematic
violations," on application of the plaintiffs a "one-
time extension" of the decree may be granted, for up to two
years. Although presented as a "Crown Jewel" provision,
this section does little to ensure compliance. The function of a
Crown Jewel clause is to provide such an onerous penalty that the
defendant's compliance with its substantive obligations can be
coerced, and deliberate evasion avoided, without ever having to
invoke the penalty. Here, the "threat" Microsoft is
being presented with is that of being forced for two more years to
decide at its "sole discretion" what constitutes
Windows, to constrain exclusive joint ventures to
"reasonable" duration, to gain access to intellectual
property developed by middleware competitors, and to dictate to
those competitors the functionality and user interface of their
products. This is plainly something Microsoft should welcome with
open arms rather than fear.
The vagueness of the terms, the ineffectiveness of the Technical
Committee and the lack of a meaningful deterrent Crown Jewel
provision will plague the courts for years to come. In the absence
of any deterrent, Microsoft will no doubt interpret the
"reasonableness" standards generously incorporated in
the proposed settlement in its own favor. The enforcement agencies
and numerous competitors will witness the ill effects of future
Microsoft actions and challenge these practices. However, without
the proper dispute resolution mechanisms in place, it will be up 1o
the courts to resolve all these "reasonableness" issues
arising out of the proposed settlement.
VI. DIVESTITURE REMAINS THE PREFERABLE AND MOST EFFECTIVE REMEDY
FOR MICROSOFT'S SECTION 2 VIOLATIONS
ProComp and its members have consistently supported structural
relief in this case. In our view, divestiture remains the most
effective remedy for Microsoft's wide-ranging unlawful practices.
Conduct remedies like the proposed decree are a second-best
solution, because they rely on the defendants good will to comply.
An injunctive decree in a Section 2 monopolization case "does
no more than encourage the monopolist to look for some new way of
exercising its dominance that is not covered by the current
injunction." \58\ Comprehensive behavioral decrees
inevitably require interpretation and application as the defendant
introduces new products, moves into new markets, or changes its
business strategies in its traditional markets.
---------------------------------------------------------------------------
\58\ 3 P. AREEDA & H. HOVENKAMP ANTITRUST LAW
704.3, at 213 (1999 Supp). See William K. Kovacic, Designing,
Antitrust Remedies for Dominant Firm Misconduct, 31 Conn. L. Rev.
1285, 1311 (1999) ("By blockading recourse to certain
commercial tactics, a remedial decree will inspire the defendant to
pursue other paths that circumvent the judicially imposed
constraints."). As the Supreme Court cautioned in the landmark
DuPont antitrust case, "the policing of an injunction would
probably involve the courts and the Government in regulation of
private affairs more deeply than the administration of a simple
order of divestiture. United States v. E.I. du Pont de Nemours &
Co., 366 U.S. 316, 334 (1961); accord, AT&T, 552 F.Supp. at
167-68.
---------------------------------------------------------------------------
That does not mean, however, that conduct remedies will
necessarily be ineffective here, but rather that they must be
targeted and broad enough to redress the core practices used to
maintain Microsoft's monopoly and to eliminate the barriers to entry
protecting that monopoly power. The proposed decree does not even
purport to satisfy this goal, which we submit is compelled by the
Ford/United Shoe standard required for assessing relief in this
case.
The relief proposed by the Litigating States achieves these
objectives. We respectfully submit that the Court adopt a crown
jewel divestiture provision to deter Microsoft from engaging in
further unlawful conduct.
VII. THE COURT SHOULD CONDUCT A RIGOROUS TUNNEY ACT EXAMINATION
OF THE DECREE, THE COMPETITIVE IMPACT STATEMENT AND THE DEPARTMENT'S
UNSUBSTANTIATED PROJECTIONS OF FUTURE COMPETITIVE EFFECT
There are several circumstances in which it is established that
district courts must engage in rigorous scrutiny of proposed
antitrust settlements under the Tunney Act. This case epitomizes
those circumstances. If ever there was a case in which a full,
independent judicial assessment should be conducted, it is this one.
A. The Complexity and Substantial National Importance of this
Case, the Government's Fiat Reversal of Position and its Disregard
of Clear Tunney Act Obligations All Dictate the Necessity of
Critical Judicial Oversight in this Landmark Proceeding
Even in the pretrial context with its more limited review,
Tunney Act courts will rigorously scrutinize proposed settlements
when an antitrust case is complex, subject to considerable
controversy, and affects large segments of the public.\59\
Especially rigorous scrutiny is also undertaken when the proposed
decree departs substantially from the relief sought in the
government's complaint,\60\ or otherwise represents a sharp
[[Page 29002]]
reversal in the government's prior position.\61\ Each of these
situations is present in this case
---------------------------------------------------------------------------
\59\ Cascade Natural Gas Corp. v. El Paso Natural Gas Co.,
386 U.S. 129, 136, 141 (1967); AT&T, 552 F. Supp. at 152;
Associated Milk Producers, 394 F. Supp. 35, 42 (W.D. Mo. 1975).
\60\ 60 United States v. Automobile Mfrs. Ass'n, 307 F.
Supp. 617, 621 (C.D. Cal. 1969), aff'd mere. sub nom. New York v.
United States, 90 S. Ct. 1105 (1970).
\61\ Cascade, 386 U.S. at 137; Automobile Mfrs. Ass'n, 307
F. Supp. at 621.
---------------------------------------------------------------------------
1. This Complex, Controversial, Nationally Important Antitrust
Prosecution Demands Serious Judicial Oversight
This is certainly a highly complex case that has preoccupied the
political, technology and business communities for years. These are
precisely the circumstances in which the Tunney Act's genesis
reveals a major policy concern with the appearance of the government
settling for too little "because of the powerful influence of
antitrust defendants and the complexity and importance of antitrust
litigation." SENATE REPORT, supra, at 147 (statement of Judge
J. Skelly Wright).
Microsoft plainly "wield[s] great influence and
power" and has brought "significant pressure to bear on
[the] Government" throughout the litigation. Id. Thus, the
Court needs to consider whether this is a case, such as Cascade,
where the Department "knuckled under" to an economically
and politically powerful antitrust defendant. Cascade Natural Gas
Corp. v. El Paso Natural Gas Co., 386 U.S. 129, 136, 142 (1967).\62\
---------------------------------------------------------------------------
\62\ In Cascade, the Department refused to implement an
antitrust divestiture decree affirmed on appeal by the Supreme
Court. The Court eventually directed the Department to oversee
"divestiture without delay" and instructed the district
court to prepare "meticulous findings ... in light of the
competitive requirements" of the remedy. 386 U.S. at 137.
---------------------------------------------------------------------------
2. Heightened Scrutiny is Needed Because Neither the Department
Nor Microsoft Complied With their Respective Tunney Act Obligations
Courts have also refused to enter proposed antitrust consent
decrees where the Government or the defendant did not comply with
its procedural responsibilities under the Tunney Act. Even technical
and formalistic failures have been deemed grounds to deny entry of a
proposed judgment. United States 1,. Central Contracting Co., 527 F.
Supp. 1101 (E.D. Va. 1981).
The procedural irregularities in this case are far greater, and
are of substantive importance to the Court's review. First, the
Tunney Act requires the Department to provide an explanation of
"alternatives" to the proposed decree considered in
evaluating a settlement proposal. 15 U.S.C. 16(b)(6).
Here, however, the Department simply offers a laundry list of other
conduct remedies proposed by third-parties, dismissing all of them
collectively with the terse statement that the PFJ "provide[s]
the most effective and certain relief in the most timely
manner." CIS, 66 Fed. Reg. at 59475. The Department's
assertion is unexplained.
The CIS recites only that the Department considered intervening
changes "in the computer industry, as well as the decision of
the Court of Appeals, which reversed certain of the District Court's
liability findings." \63\ Nothing in the CIS offers any
useful guidance to the Court, or the public, as to why the rejected
conduct remedies are inappropriate; thus, the Department fails to
come forward with the "detailed notice to the public"
the Tunney Act was intended to require.\64\ This violates the
Government's duty not just to "describe" the
alternatives (which the CIS does), but also to provide an
"explanation" of their adequacy (which the CIS does
not). This is an improperly narrow view of the government's Tunney
Act responsibilities is incompatible with the purpose of the Tunney
Act to ensure that all relevant issues are subject to maximum
"ventilation." \65\
---------------------------------------------------------------------------
\63\ CIS, 66 Fed. Reg. at 59475.
\64\ The CIS was intended, rather, to be "detailed
notice to the public what the case is all about. Further than that,
the public impact statement makes the lawyers for the Department of
Justice go through the process of thinking and addressing themselves
to the public interest consideration in the proposed decree. There
is no better exercise for determining whether you are right or not
than trying to put it down on paper to see how it writes."
SENATE REPORT, supra, at 8 (remarks of Judge J. Skelly Wright).
\65\ 65 See Central Contracting. 527 F. Supp. at 1103
(quoting 119 Cong. Rec. 24597 (1973) (remarks by Senator Tunney)).
---------------------------------------------------------------------------
The government's "predictive judgments" about market
structure and competitive effect should be accorded a presumption of
regularity, Microsoft I, 56 F.3d at 1460 (quoting United States v.
Western Elec. Co., 993 F.2d 1572, 1577 (DC Cir.), cert. denied 510
U.S. 984 (1993), but only when the circumstances are regular. Where,
as here, the Department's exposition of the reasons for its
settlement and its legal interpretation of the Court of
Appeals" mandate are woefully lacking, such a presumption of
regularity should not apply. In these circumstances, the Court
cannot "carefully consider the explanations of the government
in the competitive impact statement." CIS, 66 Fed. Reg. at
59476 (citation omitted).
Second, tile Turnkey Act mandates that the government make
available all "materials and documents which the [it]
considered determinative in formulating [a settlement]
proposal." 15 U.S.C. 16(b). The CIS responds to
this requirement with a blanket statement that [n]o materials and
documents of the type described in the [Tunney Act] were considered
in formulating the Proposed Final Judgment. Consequently, none are
being filed with this Competitive Impact Statement.
CIS, 66 Fed. Reg. at 59476. That cannot be accurate. Even in
antitrust cases that are not the length and complexity of the
Microsoft litigation, courts have found similar disclaimers
"to be almost incredible." Central Contracting Co., 527
F. Supp. at 1104. It defies credulity to suggest that there does not
exist even one document, memorandum or analysis that the Department
considered "determinative" in selecting the relief
package presented to this Court.
Third, the CIS misstates many provisions of the PFJ. We address
these in detail in Section III above, and will not repeat that
analysis here. Where, as here, the government presents a document
that seeks to justify provisions that on close examination are
illusory, it has in effect challenged the legitimacy of statute.
Under even the strictest interpretations of Tunney Act deference,
this Court cannot permit the Tunney Act process to "make a
mockery of judicial power." Microsoft I, 56 F.3d at 1462.
Fourth, the Tunney Act requires that the defendant file a list
of "all" written or oral communications "by or on
behalf of such defendant ... with any officer or employee of the
United States concerning or relevant to such proposal, except [for]
communications made by counsel of record alone with the Attorney
General or the employees of the Department of Justice alone."
15 U.S.C. 16(g). Remarkably, Microsoft's Section 16(g)
filing indicates that only two such communications occurred, both in
connection with negotiations together with Microsoft and the Court-
appointed mediator. This cannot be true It has been publicly
confirmed by numerous public officials, and acknowledged by
Microsoft, that a large number of Microsoft-retained lawyers and
lobbyists have advocated its position on this case before countless
officials in Congress and the Executive Branch. The Court should
require Microsoft to fully comply with Section 16(g).\66\
---------------------------------------------------------------------------
\66\ The company apparently takes the unsupportable
position that lobbying communications on the subject of the
Microsoft litigation occurring before the September 2001
negotiations resumed are not "relevant" to the
settlement. Microsoft also claims many communications were protected
by the "counsel of record" exception. "Counsel of
record" for purposes of these disclosures is intended to
differentiate between lawyers actively appearing before the trial
court and those undertaking related, but non-judicial
"lobbying" functions. Central Contracting Co., 527 F.
Supp. at 1105. The House Report discusses Congress's intent to
distinguish "lawyering contacts," which warrant
protection, from "lobbying contacts," which must be
disclosed. It states that a lobbying contact is performed by
"counsel of record accompanied by corporate officers; or by
attorneys not counsel of record." HOUSE REPORT, supra, at 6
(emphasis added). Congress requires their disclosure in order to
guarantee "that the Government and its employees in fact avoid
practicing political justice." Id. (quoting Civil Service
Comm'n, 414 U.S. 906 (1973)).
---------------------------------------------------------------------------
3. The Court Should Closely Examine the Government's Reversal of
Position on Relief
The government's about-face on its remedy proposals provides
another reason why heightened judicial scrutiny is required. While
the government now says that the PFJ will provide effective relief,
this reflects a marked abandonment of its earlier position. Indeed,
the Justice Department's position just 18 months ago was that only
structural relief was adequate, and conduct decrees like the
proposed PFJ were inherent failures. As emphasized in one of the
cases cited by the Justice Department, less deference is warranted
when ???"the government has requested broad relief at the
outset, represented to the courts that nothing less would do, and
then abruptly knuckled under." United States v. National
Broad. Co., 449 F. Supp. 1127, 1144 (C.D. Cal. 1978).
The point is not that the Department has decided not to seek
divestiture, but instead that the conduct remedies it now proposes
contradict its prior representations to this Court on their
effectiveness. The earlier DOJ position was also consistent with its
prior settlement decisions in this litigation itself. In the
mediations supervised by Chief Judge
[[Page 29003]]
Richard Posner in March 2000, the Department and the State
plaintiffs demanded settlement terms that would have gone far beyond
the limited provisions of the PFJ in eradicating Microsoft's ability
to act anticompetitively. Indeed, the plaintiffs" last
settlement proposal in the mediations--dubbed "Mediator's
Draft 18 (Attachment B)--would have included provisions
requiring Microsoft to license the actual source code for Windows,
to permit ISVs to modify Windows itself, and to allow OEMs to
"display[] a middleware user interface" in lieu of the
Windows desktop. None of these or similar provisions is included in
the proposed decree. Thus, the PFJ is considerably weaker in several
key respects than the very conduct relief which the Department
demanded in settlement before Microsoft's Sherman Act liability had
been established.\67\
---------------------------------------------------------------------------
\67\ The barrier to introduction into evidence of
settlement offers under Rule 408 of the Federal Rules of Evidence
does not apply where the settlement is not used to show liability
but instead, as here, to illuminate the policy considerations
governing fashioning of a remedy. E.g., Carney v. American Univ.,
151 F.3d 1090, 1095 (DC Cir. 1998). Rule 408 precludes proof of
settlements and settlement offers only "to prove liability for
or invalidity of" a claim. Fed. R. Evid. 408. Indeed, evidence
of settlements is expressly permitted by Rule 408 "when the
evidence is offered for another purpose." Id.
---------------------------------------------------------------------------
Given the importance of this case, and Court's obligation to
look to the Supreme Court and the DC Circuit for guidance rather
than the Justice Department, the Court must decide for itself
whether the settlement would give the public effective relief
against Microsoft's proven wrongdoing.
B. Live Evidence is Needed on the Technical and Economic
Complexities of the Software Industry and the Profound Failings of,
and Harms Caused by, the PFJ
The drafting of an antitrust decree necessarily "involves
predictions and assumptions concerning future economic and business
events." \68\ It is a "cardinal principle"
of our system of justice that "factual disputes must be heard
in open court and resolved through trial-like evidentiary
proceedings." Microsoft III, 253 F.3d at 10l. This mandate for
evidentiary hearings applies not just to liability determinations,
but also to determinations concerning the "appropriate [form
of] relief." Id.; see also, id. at 107 (vacating and remanding
Judge Jackson's remedy decree in large part due to his
"fail[ure] to hold an evidentiary hearing despite the presence
of remedies-specific factual disputes," and holding that a
remedies decree must be vacated whenever there is "a bona fide
disagreement concerning the substantive items of relief which could
be resolved only by trial" Id. (quoting Interim Order at 62).
---------------------------------------------------------------------------
\68\ 68 Ford, 405 U.S. at 578.
---------------------------------------------------------------------------
The Tunney Act contemplates an evidentiary hearing in these
circumstances. As the Justice Department recognizes, this court must
permit the use of the "additional procedures" authorized
by 15 U.S.C. 16(t)"--which include live
hearings with fact and expert testimony--if "the [public]
comments have raised significant issues and ... further proceedings
would aid the court in resolving those issues." CIS, 66 Fed.
Reg. at 59476. It strains credulity to suggest, as the Justice
Department does, that the remedial phase of the most complicated
antitrust case in decades will not involve "significant
issues" that would benefit from "further
proceedings."
Evidentiary hearings are critically important in complex
antitrust cases because the assessment of antitrust remedies
necessarily requires the Court to determine a number of facts
relevant to both the degree of anticompetitive harm and the likely
future condition of the market in which competition must be
restored. United States v. United States Gypsum Co., 340 U.S. 76, 89
(1950); see also United States v. Glaxo Group, Ltd., 410 U.S. 52, 64
(1973). In particular, any proposed settlement decree must reach
forward in lime to "assure the public freedom from"
continuance of the monopolistic practices. Id. As such, this Court
must make "'predictions and assumptions concerning
future economic and business events."' Microsoft III,
253 F.3d at 102 (quoting Ford, 405 U.S. at 578). Although courts
retain wide discretion in fashioning such forward-looking relief,
they must base that relief on a sound evidentiary record.
International Salt, 332 U.S. at 401.
In this case it is especially important to heed Congress's
instruction to "resort to calling witnesses for the purpose of
eliciting additional facts," HOUSE REPORT, supra, at 5,
because the record has not yet been developed on remedies. See
Associated Milk Producers, Inc., 394 F. Supp. 34 (W.D. Mo.
1975).\69\ Indeed, the procedural posture that the Court now faces
is more closely akin to a contested summary judgment motion or
administrative consent decree, for which hearings are the standard
method of resolution. E.g., Celotex Corp. v. Catrett, 477 U.S. 317
(1986); Citizens for a Better Environment v. Gorsuch, 718 F.2d 1117
(DC Cir. 1983); United States v. Trucking Employers, Inc., 561 F.2d
313 (DC Cir. 1977).\70\
---------------------------------------------------------------------------
\69\ To the contrary, the DC Circuit reversed and remanded
precisely because the prior District Judge did not permit an
evidentiary hearing on remedies. The court stressed that "a
full exploration of the facts is usually necessary to properly draw
an antitrust decree so as to prevent future violations and eradicate
existing evils," and remanded for such an exploration of
facts. Microsoft III, 253 F.3d at 101 (quoting United States v. Ward
Baking Co., 376 U.S. 327, 330-31 (1964) (internal quotations
and brackets omitted)).
\70\ In summary judgment practice, complex legal issues
are frequently presented to courts on the basis of affidavits and
other "paper" evidence. But, unless the papers reveal no
"genuine issue" of "material fact," standard
that cannot be met here, summary judgment motions must be denied and
a case set for trial so that the Court can adduce whether the
parties have met their respective burdens of proof on the disputed
factual issues. E.g., Celotex Corp., 477 U.S. at 323; Thompson
Everett, Inc. v. National Cable Adver., 57 F.3d 1317, 1322 (4 th
Cir. 1995) (applying Celotex to review of a motion for summary
judgment of antirust conspiracy claim). Indeed, where the
credibility of an affiant is at issue, as it undoubtedly will be
here with respect to the reliability of expert opinions and
projections of future economic and technological developments, it is
difficult to conceive of any basis on which the Court would be
permitted to resolve such controverted issues without availing
itself of ordinary, trial-type evidentiary procedures.
---------------------------------------------------------------------------
Only by permitting third parties, such as ProComp and its
members, to participate fully in such a proceeding can the Court
assure that there will be adequate evidentiary attention to facts
and circumstances that contradict the Department's views on the
market, competition and other issues relevant for remedy purposes.
Otherwise, this Court would repeat the very error that led the DC
Circuit to reverse the last judgment in this case.
VIII. CONCLUSION
For all the foregoing reasons, the Court must find that the
Proposed Final Judgment is not in the public interest. At a minimum,
tile Court should defer any, judgment on the PFJ until the upcoming
remedies hearing in the ongoing litigation is conducted. This is
necessary to avoid inconsistent remedies. Indeed, many of the
remedies proposed by the Litigating States are irreconcilable with
those proposed by the PFJ. When the Court does consider the PFJ, it
is obliged in the discharge of its Article Ill duties to make an
independent determination whether the PFJ adequately fulfills the
mandate of the DC Circuit.
Attachment A
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
(UNITED STATES OF AMERICA,)
(Plaintiff,)
(v.) Civil Action No. 98-1232 (CKK)
(MICROSOFT CORPORATION,)
(Defendant.)
(STATE OF NEW YORK, et al.,)
(Plaintiffs,)
(v.) Civil Action No. 98-1233 (CKK)
(MICROSOFT CORPORATION,)
(Defendant.)
DECLARATION OF KENNETH J. ARROW
Kenneth J. Arrow declares under penalty of perjury as follows:
I. INTRODUCTION
1. I am the Joan Kenney Professor of Economics Emeritus and
Professor of Operations Research Emeritus at Stanford University. I
received the degrees of B.S. in Social Science from The City College
in 1940, M.A. in mathematics from Columbia University in 1941, and
Ph.D. in economics from Columbia University in 1951. I have taught
economics, statistics, and operations research at the University of
Chicago, Harvard University, and Stanford University, and I have
written more than 200 books and articles in economics and operations
research. I am the recipient of numerous awards and degrees,
including the Nobel Memorial Prize in Economic Science (1972). A
significant part of my writing and research has been in the area of
economic theory, including the economics of innovation and its
relation to industrial organization. My curriculum vitae is
attached.
2. I have been asked by ProComp to comment on various economic
issues related to the Revised Proposed Final Judgment
("PFJ" or the "decree") proposed by the
United States, various settling States and Microsoft Corporation
("Microsoft").
3. My review of the PFJ begins with the fact that Microsoft has
been found liable for
[[Page 29004]]
violating Section 2 of the Sherman Act by engaging in a widespread
series of practices that illegally maintained its monopoly in Intel-
compatible PC operating systems. These practices were focused on
eliminating the threat posed to Microsoft's PC operating system
monopoly by the combination of Netscape Navigator and cross-platform
Java technology ("middleware competition").
4. Given that Microsoft has been found liable for illegal
monopoly maintenance, the remedies in this case should be designed
to eliminate the benefits to Microsoft from its illegal conduct. To
the extent possible, the remedies should be designed to restore the
possibility of competition in the market where monopoly was
illegally maintained (i.e., the market for PC operating systems). In
addition, the remedies should strengthen the possibilities for
competition and deter the exercise of monopoly power in the present
and future, taking account of the special problems of an industry in
which network effects are important.
5. It is my opinion that the PFJ fails to accomplish these
objectives. First, the PFJ is unduly focused on attempting to re-
create an opportunity for future middleware competition. Because of
network effects and path dependencies, Microsoft's monopoly power in
PC operating systems is more entrenched than it was in the mid-
1990s. It will be exceedingly difficult now, even with the best of
remedies, to re-establish middleware fully as the kind of
competitive threat to Microsoft's monopoly power that it posed in
the mid-1990s. Additional remedial steps need to be taken to ensure
that Microsoft does not benefit from its illegal conduct and the
consequences of that conduct on dynamic competition in the OS
market. Second, the PFJ does not address the fact that no effort to
restore competition in the market for PC operating systems will be
successful without measures designed to lower the applications
barrier to entry that currently protects Microsoft's position in
this market. Third, the enforcement mechanism described in the PFJ
seems likely to be ineffective, even with respect to the inadequate
remedies in the PFJ. Fourth, the PFJ pays insufficient attention to
the ways in which Microsoft is currently attempting to protect its
monopoly power by using its illegally maintained monopoly in PC
operating systems against current and future competitive threats,
such as server operating systems and Web services.
6. ]his affidavit has six pans and is organized as follows.
After this introduction (Part I), Part II reviews the threat that
Netscape, Java and the Internet posed in the mid-1990s to
Microsoft's monopoly power in PC operating systems. Part III then
reviews the illegal conduct that Microsoft used in defeating this
threat. Part III also analyzes the state of the computer industry
today following this illegal conduct and explains why it seems
unlikely, at this stage, that the middleware threat can be re-
created. With this as background, Parts IV and V review and assess
the remedies proposed in the PFJ. Part IV critiques the remedies
designed to restore middleware competition. In addition, Part IV
discusses the lack of attention in the PFJ to the applications
barrier to entry that protects Microsoft's monopoly power in PC
operating systems. It also notes certain deficiencies in the
enforcement mechanism proposed in the PFJ. Part V follows with a
discussion of Microsoft's efforts to protect its existing monopoly
power by using its illegally maintained monopoly in PC operating
systems to gain advantages in other markets that threaten to reduce
the scope of its current market power. Part V explains that the PFJ
gives insufficient attention to this important subject--a
subject that bears on the future of competition in the computing
industry. The affidavit concludes in Part VI with a summary of
conclusions.
II. MICROSOFT'S MONOPOLY POWER AND THE THREAT POSED BY NETSCAPE,
JAVA AND THE INTERNET
A. NETWORK EXTERNALITIES
7. Network externalities have been central to Microsoft's
ability to maintain its monopoly power in the market for PC
operating systems. Both the District Court and the U.S. Court of
Appeals for the District of Columbia Circuit referred to the
"applications barrier to entry," the process by which a
large installed base induces the development of applications and
other complementary goods designed for the dominant operating
system, which further reinforces the position of the dominant
operating system. 1 described this process in a declaration that I
submitted in 1995 on behalf of the government in a prior settlement
with Microsoft:
A software product with a large installed base has several
advantages relative to a new entrant. Consumers know that such a
product is likely to be supported by the vendor with upgrades and
service. Users of a product with a large installed base are more
likely to find that their products are compatible with other
products. They are more likely to be able successfully to exchange
work products with their peers, because a large installed base makes
it more likely that their peers will use the same product or
compatible products. Installed base is particularly important to the
economic success of an operating system software product. The value
of the operating system is in its capability to run application
software. The larger the installed base of a particular operating
system, the more likely it is that independent software vendors will
write programs that run on that operating system, and, in this
circular fashion, the more valuable the operating system will be to
consumers.
8. The applications barrier to entry implies that it is likely
that a single platform (or programming environment) will dominate
broad segments of the computer software industry at any point in
time. This does not necessarily imply that there will be monopoly;
that depends on the extent to which the dominant platform is
proprietary or closed. However, if the dominant platform is
proprietary (which is certainly the case with Windows), then the
interdependence of applications and operating systems creates a
barrier against any new entrant. A new entrant would need to create
both an operating system and the applications that make it useful.
9. In addition, any customer of a new entrant would have to
incur considerable costs in switching to a new system. In the fast
place, the customer would have to learn new operating procedures.
Second, there would be a problem of compatibility of files. These
factors constitute a natural obstacle to change, so that a system
with a large installed base will have a tendency to retain its
users.
10. The special nature of operating systems and software also
gives Microsoft, because of its large installed base of operating
system, a great advantage in the markets for complementary software.
Specifically, it can distribute the software much more easily than
its competitors. Since virtually every new PC ships with Windows,
Microsoft can put its software into the hands of users by including
it with the operating system. Any other vendor of complementary
software that wanted to distribute through OEMs would have to cut a
separate deal with each OEM, and would face the task of persuading
OEMs to carry software products that may be directly competitive
with products offered by Microsoft. As a result, complementary
software from other vendors typically either has to be downloaded
(which imposes added costs on users) or distributed separately to
users in "shrink wrap." In addition, Microsoft has the
ability to allow Microsoft developers of complementary software
access to "hidden APIs"--application programming
interfaces in the PC operating system that Microsoft developers know
about but which are not disclosed fully to competing developers of
complementary software.
B. THE MIDDLEWARE THREAT: NETSCAPE AND JAVA
11. A threat to Microsoft's monopoly in PC operating systems
arose in the mid-1990s with the nearly simultaneous emergence of the
Internet browser developed by Netscape and the Java programming
environment. These are both examples of middleware--application
software designed to run on multiple operating systems and which has
its own set of APIs. Middleware that provides extensive
functionality through a broad set of APIs has the potential to
become an alternative platform for application development. If many
applications valued by PC users were written to middleware APIs, and
if the middleware were ported to other operating systems (existing
or to be created), then the applications barrier to entry in the
market for PC operating systems would be weakened.
12. Netscape Navigator was a browser that also had the potential
to become a platform for application programs. Netscape's browser
had its own set of APIs to which developers could write application
programs.
13. The initial success of Netscape Navigator was dramatic.
Netscape shipped its first browser in September 1994.\1\ In July
1995, less than a year later, its share of the browser market was
74%.\2\ By mid-1996, Netscape's Share had reached 85%.\3\
---------------------------------------------------------------------------
\1\ "A Software Giant's March Onto the
Internet," New York Times (Jan. 12, 1998) at C4.
\2\ "Browser Usage: How It's Trending,"
Interactive Age (Jul. 31, 1995) (citing figures compiled by Interse
Market Focus).
\3\ "Microsoft v Netscape: Freer than Free,"
The Economist (Aug. 17, 1996, U.S. Edition).
---------------------------------------------------------------------------
14. The threat that Netscape pored to Microsoft's monopoly power
in PC operating
[[Page 29005]]
systems was made even greater by the nearly simultaneous development
of Java. The Java technology has several pieces. It is a programming
language that I understand has features well suited for writing
"distributed applications"dash;applications that run on
networks, calling upon resources located on different computers in
the network. Java technology also includes the Java Virtual Machine
("JVM") and Java Class Libraries. The JVM and Java Class
Libraries am forms of middleware.
They are software programs that have been implemented on Windows
and many other operating systems. A JVM is software that converts
Java code into instructions that can be processed by the operating
system on which the JVM sits. The Java Class Libraries are software
that performs specific functions that developers can call upon, and
build into, their Java application programs.
The JVM and Java Class Libraries are sometimes referred to
collectively as the "Java runtime environment." The Java
technology has been licensed in a way designed to encourage its
implementation on a variety of different operating systems. The Java
ideal was captured in the phrase, "write once, run
anywhere."
15. Java added to the threat posed by Netscape because it
extended the set of middleware APIs to which developers could write
application programs. It increased the chances that developers could
write sophisticated PC application programs written to middleware
APIs instead of Windows APIs. Netscape also complemented Java by
serving as a distribution mechanism. The Java technology could not
succeed without widespread distribution of the Java runtime
environment. Because Netscape supported Java and included the Java
runtime environment with every copy of its browser, growth in the
share of PCs that used the Netscape browser also meant growth in the
share of PCs with a Java runtime environment that supported Java's
"write once, run anywhere" ideal.
16. The economic relationship between middleware and the OS is
unusual among the commodities that economic theory usually deals
with. Middleware is a complement to any OS in the short run, but it
facilitates substitution among operating systems in the long run.
Middleware is a complement in the short run because it adds
functionality to the existing OS, but it is in a sense a substitute
in the long run, because applications can be written to it rather
than to the OS. Middleware therefore permits substitution among
operating systems, since the applications are not specific to any
one OS. Therefore, an OS monopolist will have an incentive to
control middleware in order to maintain its OS monopoly. The short-
run complementarity becomes an instrument by which this incentive
can be realized. The middleware has to be ported to the OS, and the
OS producer's control of the needed APIs can be used to restrict the
spread and use of the middleware.
17. Middleware is naturally thought of as a disruptive
technology, and the emergence of middleware in 1995 created what is
frequently referred to as an "inflection point." Put
simply, this means that the then well-defined organization of the
software market for personal computers might be altered
substantially, or at least such a risk existed. As that organization
was centered on the Microsoft Windows operating system and its
productivity application suite Microsoft Office, Microsoft had the
most at risk from any disrupting change that resulted from
middleware.
18. Technological disruptions such as the middleware threat of
the mid-1990s do not occur frequently. They only arise when there is
an important innovation that allows technology to evolve and create
new products or functionality that has widespread appeal. At times
of technological disruption, the forces of dynamic competition can
play an especially important role. The Netscape browser and the
cross-platform Java technology separately and in combination had the
potential to develop into an alternative platform for application
programs that could run on any operating system and which could
transform PC operating systems into a commodity business. Bill
Gates, in his memorandum of May 26, 1995 on the "Internet
Tidal Wave," described just this sort of dynamic competitive
threat when he realized that, if successful, Netscape could
"commoditize" the operating system.
19. There is no easy method by which an economist can determine
exactly how significant a threat Java and Netscape actually
represented to Microsoft's operating system monopoly. A precise
determination of whether Netscape and Java could have succeeded in
eroding Microsoft's monopoly power absent Microsoft's illegal
conduct would require a counterfactual analysis that addressed a
variety of complex interrelations. However, even without this kind
of analysis, we have evidence that a reasonably expert onlooker felt
the threat was serious, namely, the statements and behavior of
Microsoft. Bill Gates, in his memorandum on the "Internet
Tidal Wave," explained:
A new competitor "born" on the Internet is Netscape.
Their browser is dominant, with 70% usage share., allowing them to
determine which network extensions will catch on. They are pursuing
a multi-platform strategy where they move the key API into the
client to commoditize the underlying operating system. ... One scary
possibility being discussed by Internet fans is whether they should
get together and create something far less expensive than a PC which
is powerful enough for Web browsing.
20. In the same memorandum, Gates made clear that he understood
how Microsoft should leverage its Windows advantage to bolster its
Internet position:
We need to move all of our Internet value added from the Plus
pack into Windows 95 as soon as we possibly can with a major goal to
get OEMs shipping our browser preinstalled. This follows directly
from the plan to integrate the MSN and Interact clients. Another
place for integration is to eliminate today's Help and replace it
with the format our browser accepts including exploiting our unique
extensions so there is another reason to use our browser.
21. To summarize, in an industry marked by network
externalities, there is a strong tendency to monopoly (at least when
the dominant platform is proprietary or closed). The consumer
welfare and efficiency losses associated with monopoly are well
known, but the one most relevant here is the decreased incentive to
technological innovation. It is all the more important to encourage
what may be called dynamic competition, the entry of new firms and
new products. At certain periods, whether due to technological
innovation or to a transient situation in which the tendency to
monopoly has not yet worked to its completion, the market will be
confronted with alternative lines of development; Netscape Navigator
and Java as against Microsoft products in 1995, client-server
networks and web services today. At these periods, there may be
opportunities for a new platform to compete with and possibly take
over from the existing one. In view of the strong tendency to
monopoly in this industry (because of network externalities), it is
all the more important to keep the competition as viable as possible
when the opportunity presents itself. In particular, illegal
anticompetitive steps by existing monopolists should be prevented to
the maximum extent possible. Such a policy prevents the stagnation
of existing monopolists and encourages the expansion of the number
of alternatives among which the buyers can choose.
III. MICROSOFT DEFEATED THE THREAT POSED BY NETSCAPE AND JAVA
A. MICROSOFT'S ILLEGAL PRACTICES
22. Microsoft made a concerted effort to eliminate the threat
from middleware competition. Microsoft was found to have engaged in
illegal conduct exactly at the moment that dynamic competition might
have flourished. As the DC Circuit concluded, Microsoft took illegal
steps to exclude the middleware threat, and in particular, took
anticompetitive actions directed against Netscape Navigator and
Java. In particular, the DC Circuit judged illegal significant
elements of Microsoft's strategy:
a) By barring original equipment manufacturers
("OEMs") from removing access to Microsoft's Internet
Explorer ("IE") browser from the Windows desktop,
Microsoft prevented many OEMs from installing Navigator or other
browsers, and that in turn protected Microsoft's OS monopoly by
reducing potential middleware competition. This violated Sec. 2 of
the Sherman Act.
b) By preventing OEMs from altering the initial boot sequence
for Windows, Microsoft prevented OEMs from promoting Internet access
providers, many of whom were using and distributing Navigator to
their customers. Again, this reduced competition with IE and
protected Microsoft's OS market power in violation of Sec. 2.
c) Through commingling software code for Windows with that of
Internet Explorer, Microsoft deterred OEMs from installing
Navigator. That, in turn, reduced Navigator's usage share, and
thereby protected the applications barrier to entry by reducing
developer's interest in the APIs exposed by Navigator. Microsoft
also removed Internet Explorer from its Add/Remove utility, further
entrenching Internet Explorer and further discouraging OEMs from
distributing Navigator. The DC Circuit found these
[[Page 29006]]
actions to be anticompetitive and to support a finding of liability
for exclusionary conduct and therefore monopolization under Section
2.
d) By entering into contracts with Internet access providers
that foreclosed Navigator's access to an economically significant
share of the Internet access provider ("IAP") market,
Microsoft engaged in exclusionary conduct in protection of its OS
monopoly, again in violation of See. 2
e) By entering into contracts with independent software vendors
that required those independent software vendors
("ISVs") to use Internet Explorer if the ISV need web
display, Microsoft further foreclosed distribution of Navigator,
again in protection of its OS monopoly, in violation of Sec. 2.
f) By entering into an exclusive distribution contract with
Apple for Internet Explorer after Microsoft had threatened to cancel
the Macintosh version of Office, Microsoft engaged in exclusionary
conduct in protection of its OS monopoly in violation of Sec. 2.
g) Through a number of exclusionary actions directed at Java,
Microsoft limited Java's viability as a cross-platform threat and
did so in violation of Sec. 2. Those actions included: limiting
distribution of "write once, run anywhere" JVMs directly
through exclusionary contracts with ISVs and indirectly through
Microsoft's actions against Netscape; deceiving developers who
wanted to develop pure Java code into writing code with Windows-
specific extensions that would make the code Windows dependent; and
threatening Intel and inducing it to stop developing Intel
multimedia software for Java.
B. THE STATE OF THE MARKET TODAY
23. As of 1995, Microsoft's share was of the installed base of
PC operating systems was 870% \4\ while its share of the
Internet browser market was less than 5%.\5\ Today, those figures
stand at 92% for PC operating systems \6\ and 91% for
browsers.\7\ Thus Microsoft's position in PC operating systems
remains strong, while its share in Internet browsers has risen
dramatically.
---------------------------------------------------------------------------
\4\ Dataquest, "All Platform Operating Systems Sales
History and Forecast Summary," Table 12 (Mar. 1997).
\5\ "Microsoft v Netscape: Freer than Free,"
The Economist (Aug. 17, 1996, U.S. Edition).
\6\ IDC, "Worldwide Client and Server Operating
Environments, Market Forecast and Analysis, 2001-2005"
(Aug. 2001).
\7\ "AOL Files Suit Against Microsoft For Damages
Inflicted on Netscape," Wall Street Journal (Jan. 23, 2002)
(citing data compiled by WebSideStory, a market research firm).
---------------------------------------------------------------------------
24. Microsoft's illegal practices were successful in helping to
minimize the threat that middleware posed for the creation of a
programming environment outside of Microsoft's control. I am aware
of no middleware today that poses a risk to Microsoft comparable to
that posed by Navigator and Java in 1995. Nor does the government's
Competitive Impact Statement suggest that such a threat exists today
or is likely to emerge over the five-year duration of the PFJ.
C. MICROSOFT'S MIDDLEWARE ADVANTAGES
25. Microsoft today has substantial advantages in middleware
that make it unlikely the market itself will generate new entrants
into middleware capable of re-creating the competitive risk faced by
Microsoft in 1995. As noted earlier, through its control over
Windows, Microsoft has had--and under the PFJ will continue to
have--an enormous advantage in the distribution of software
that is complementary to Windows. Since every new PC ships with
Windows, Microsoft has a very easy way to get software into the
hands of users: it can include it with the operating system.
Microsoft can simply bundle the middleware with Windows or it can
integrate the code into Windows itself.
26. This ensures the ubiquity of Microsoft middleware and
operates as a barrier to entry for competing middleware. Any entrant
would have to make a substantial investment to achieve comparable
widespread distribution. A firm considering entry should understand
that its inability to guarantee a universally exposed set of APIs
means that, all other things equal, developers would prefer to write
to the APIs exposed by Microsoft middleware. The ubiquity of
Microsoft middleware and its ability to integrate middleware into
Windows--which the PFJ does not constrain--therefore
operate as economic disincentives for the development of competing
middleware by potential entrants.
27. Microsoft also has complete freedom in how it prices its
middleware. In bundling middleware with Windows, Microsoft need not
charge an incremental price for the middleware. It can simply fold
into the price of Windows whatever price it would charge for the
middleware were it distributed separately. This would not be an
option available for a potential entrant who will expect that it
would need to establish a separate, discrete positive price for any
middleware that it might create. The ability of Microsoft to set an
apparent price of zero for its middleware operates as a barrier to
entry in middleware.
28. Even if competing middleware were created, the ubiquity of
Microsoft middleware would operate as a direct barrier of the
distribution of that middleware. As the DC Circuit affirmed, OEMs
are reluctant to install two products that perform the same
function, as this raises support costs. Twice as many products will
be supported for the same function, plus consumers may be confused
by the presence of both products.
29. Moreover, Microsoft's ability to "embrace and
extend" any middleware created by an entrant also operates as
a barrier to entry. Again, it will take a substantial amount of time
for an entrant to distribute innovative middleware. During that
time, Microsoft will likely be able to imitate that middleware and
distribute updated" versions of Microsoft middleware over the
Internet to end users through its Windows Update feature. Given
this, entry into middleware is less likely and this may reduce
innovation in and development of middleware.
30. In sum, Microsoft took substantial steps to eliminate the
threat posed to it by Netscape and Java. The DC Circuit affirmed
that a substantial number of those actions constituted impermissible
monopoly maintenance and therefore monopolization in violation of
Section 2 of the Sherman Act. Today, Microsoft's illegally
maintained monopoly operates as a substantial barrier to new entry
into middleware. The monopoly operates as a disincentive for entry
and thereby likely reduces innovation in middleware. Given this
market structure, it is highly unlikely that market forces alone
will lead to the development of innovative middleware that creates
the same competitive risk to Microsoft that it faced from Navigator
and Java in 1995.
IV. THE RESTRICTIONS ON MICROSOFT'S BEHAVIOR CONTAINED IN PFJ
ARE INSUFFICIENT TO RESTORE THE COMPETITIVE THREAT THAT MIDDLEWARE
POSED IN 199'5
31. No remedy can turn back the clock to 1995 and re-create the
competitive threat that existed at that crucial time of
technological disruption. Technological disruptions of the magnitude
that Bill Gates called "the Internet tidal wave" cannot
be created by judicial proceedings. Even so, one of the objectives
of the remedies should be to attempt to restore, to whatever extent
possible, the possibility of competition in the market where the
illegal monopoly was maintained (i.e., the market for PC operating
systems). The restrictions on Microsoft's behavior in the PFJ fall
well short of this objective.
A. PROBLEMS WITH THE MIDDLEWARE REMEDIES
32. Following its years of illegal conduct, Microsoft's position
in the core middleware products (Internet browsers and Java
technology) is totally different today than it was in 1995.
Microsoft has a dominant share of the browser market, IE has caught
up to and surpassed Navigator's technical capabilities, and the
prospect of large numbers of desktop applications written in
"write once, run anywhere" Java seems remote.
33. There are two features of the industry that made the threat
from Netscape and Java so significant. First, the technological
disruption of the Internet made the functionality of the browser
sufficiently important that it could become a platform for large
numbers of applications. Second, the head start that Netscape and
Java had over Microsoft middleware provided a substantial first-
mover advantage, a particularly important element for competitive
success in network industries prone to "tipping."
Probably the only chance a competitor has to overcome the inherent
advantages that Microsoft has in distribution is to create a large
installed base of users before Microsoft can develop and launch a
competitive product.
34. The market position that Microsoft has today makes it
difficult for any set of conduct remedies to lead to significant
middleware competition. Neither the PFJ nor any other set of conduct
remedies can re-create the technological disruption or competitive
head start that existed before Microsoft acted illegally. However,
for the reasons explained below, the middleware remedies in the PFJ
seem especially likely to be ineffective.
1. The Reliance in the PFJ on OEMs to Distribute Competing
Middleware
[[Page 29007]]
35. The PFJ relies heavily on competition in the OEM
distribution channel as the key mechanism for overcoming the
competitive harm created by Microsoft's actions. The same was true
in the government's prior settlement with Microsoft, as I noted in
my 1995 declaration:
Despite the importance of natural advantages [referring to the
installed base discussion above] in the market for IBM-compatible
PCs, the complaint and proposed remedies addressed competitive
issues that are critical to the success of new competition in this
market. The most effective and economic point of entry for sales of
IBM-compatible PC operating systems is the OEM distribution channel.
New operating system software products should have unimpeded access
to this channel. The Government's complaint and proposed settlement
provide needed relief to facilitate the entry of new competitors,
such as IBM's OS/2.
36. Seven years later, it is clear that little was accomplished
in the prior consent decree in relying on the OEM channel to
facilitate competition in PC operating systems. Unimpeded access to
this channel may indeed be necessary for effective competition.
However, it is far from sufficient to create effective competition
for middleware given the current state of the industry.
37. One obstacle to competition in middleware, which the PFJ
does not address, is the applications barrier that now protects the
position of Microsoft middleware. ISVs have a strong incentive to
write applications to Microsoft middleware, since Microsoft
middleware will be present on every Windows machine that is shipped.
The PFJ does not restrict Microsoft's ability to commingle code and
include middleware APIs in with its Windows operating system. The
PFJ permits OEMs to remove Microsoft middleware icons, but the
middleware itself, and its associated API set, will remain. Thus,
the ubiquity of Microsoft's middleware will encourage ISVs to write
applications to these APIs.
38. The PFJ restricts Microsoft's ability to discriminate
against OEMs that also ship competing middleware, but this does not
create an incentive for OEMs to ship competing middleware. For the
reasons explained by the District Court and the Court of Appeals,
OEMs are reluctant to include software that provides similar
functionality to other software on the machine--it increases
confusion among users and raises support costs.
39. If ISVs do not write applications to the competing
middleware, OEMs will not distribute it. If OEMs do not distribute
it, ISVs will not write applications to it. The current dominance of
Microsoft middleware thus makes it very unlikely that this circle
can be broken by the non-discrimination restrictions in the PFJ.
40. The PFJ also seeks to increase the role of OEMs in defining
the Windows desktop. This is also insufficient to create significant
middleware competition. Even if OEMs had complete control over the
icons that would appear on the Windows desktop--and they would
not under the PFJ--this would not alter in any way the software
that would actually be present on the computer. Removing an icon
from the desktop just removes the most obvious point of consumer
access to the software, but the ability of ISVs to write to the APIs
presented by the software remains unchanged.
41. The PFJ also attempts to prohibit Microsoft from
discriminating against OEMs that distribute competing middleware. It
does this by requiring Microsoft to provide uniform licensing terms
to the 20 largest OEMs and preventing specific retaliation against
OEMs that distribute competing middleware. It is not clear to me
that these restrictions are sufficient to prevent Microsoft from
exercising influence over the behavior of OEMs towards products that
compete with Microsoft. First, I understand that the non-
discrimination provisions apply only to certain Windows desktop
operating systems (Windows XP and Windows 2000 Professional) and not
to other Microsoft products that an OEM might purchase. Second, the
relationships between Microsoft and OEMs are complex and multi-
faceted. For example, Microsoft provides marketing and promotion
support to OEMs; its provides technical assistance; its provides
allowances for product development. Microsoft may provide these
services differently to OEMs. Since the PFJ does not prohibit all
forms of discrimination across OEMs, Microsoft may have sufficient
ability to influence OEM decision-making.
42. The PFJ also contains limited disclosure requirements. The
exact scope of these disclosures depends on careful interpretation
of the complex language of the PFJ. I do not attempt such an
interpretation but comment only on the limited impact of the
disclosure remedies under any reasonable interpretation. There is a
requirement to disclose interfaces that permit competing middleware
to interoperate with Windows operating systems. I understand,
however, that Microsoft is only required to make these disclosures
if the interface is already in use by a Microsoft middleware
product. A disclosure requirement limited in this manner pushes
potential middleware competitors in the direction of "me
too" products and does little to create incentives for
significant innovation in middleware.
2. IE Open Source and Java Must-Carry
43. There are alternative middleware remedies that could have a
more significant effect. More aggressive remedies with respect to
that middleware threat would be open source Internet Explorer and a
requirement for Microsoft to distribute the most current version of
the standard Java runtime environment with IE and Windows. Even
these remedies are likely to be insufficient to turn back the clock
to the level of competition that existed before Microsoft's illegal
conduct. But they are likely to have more impact than the remedies
in the PFJ.
44. Open source IE is the most effective way to fully expose the
links between IE and Windows as well as the IE APIs. This creates
the possibility of interoperability between competing products and
it furthers the possibility of operating system competition. It also
allows anyone who wants to develop a competitive browser to be fully
compatible with applications that are written to IE APIs. This way
it limits the extension of the applications barrier to entry created
by Microsoft's dominance in the browser.
45. The Java must-carry remedy works to erode the application
barrier to entry by helping to overcome reluctance of ISVs to
develop programs that require Java on the client. It is only by
assuring sufficient ubiquity of Java and browser functionality that
there is any chance that Microsoft may lose control of the
applications barrier through competing middleware.
B. INATTENTION TO THE APPLICATIONS BARRIER TO ENTRY
46. The applications barrier to entry identified by the DC
Circuit consists in part of the large number of applications
available on the Windows platform. As discussed above, successful
entry in middleware of the type commenced by Netscape Navigator and
Java could have substantially eroded the applications barrier to
entry and facilitated entry into the operating systems market.
47. Microsoft controls the most economically important set of
applications in its Microsoft Office suite. Office accounts for
nearly 30% of Microsoft's annual revenue.\8\ Software suites
consisting of personal productivity applications such as word
processing, spreadsheets, presentation software, electronic mail,
and calendar and contact management constitute a distinct and
relevant product market. Microsoft's share of that market today is
in the mid-90s\9\ and Microsoft almost certainly holds substantial
market power.
---------------------------------------------------------------------------
\8\ Dresdner Kleinwort Wasserstein, "Microsoft
Corporation," Figure 4 (1 Aug. 2001).
\9\ In 1999, Microsoft accounted for 96.1% of the revenues
of office suites designed for Windows. Since 98.1% of all sales of
office suites in 1999 were for the Windows platform, these figures
by themselves imply an industry share of 94%. But Microsoft also
accounted for a large share of the revenues of office suites
designed for Apple's Macintosh OS--a platform that accounted
for nearly all of the non-Windows sales of office suites. IDC Office
Suite Market Review and Forecast, 1998-2003 (Aug. 1999).
---------------------------------------------------------------------------
48. As found by the DC Circuit, Microsoft has used its control
over Office to maintain its OS monopoly. Microsoft threatened to
cancel the Macintosh version of Office if Apple did not distribute
Internet Explorer, Microsoft's Interact browser. It is clear that
Microsoft's ability to make such threats would be diminished if
Microsoft had an obligation to license the rights to port Office to
competing OS platforms.
49. Since remedies focused entirely on middleware will not re-
create the threat to Microsoft's monopoly power in PC operating
systems that existed prior to Microsoft's illegal conduct,
additional actions need to be taken to ensure that Microsoft does
not benefit from its illegal conduct. These additional actions
should be targeted at further reducing the underlying source of
Microsoft's market power, namely the applications barrier to entry.
Porting Office to other platforms would be a remedy of this type
that could have a significant impact on the applications barrier.
One factor that limits the demand for Unix workstations, which have
computational advantages over Intel-based PCs, is the inability to
[[Page 29008]]
interoperate with Office. The thin-client model of computing, where
most computing occurs on the server, not the client, represents one
of the most important threats to Windows desktop computing. The
switching costs of adopting new personal productivity software with
files not compatible with Office represents a significant barrier to
Unix-based thin client networks. A requirement to license the rights
to port Office may be one of the most effective ways to create
competition for Windows, something which can probably no longer be
achieved by remedies exclusively related to middleware.
C. PROBLEMS WITH THE ENFORCEMENT MECHANISM
50. The remedies in the PFJ are too limited in scope to re-
create past competitive conditions even if they are enforced
perfectly. However, the enforcement mechanisms in the PFJ are far
from perfect and will likely lead to delays and costs that further
limit the effectiveness of the remedies. The PFJ relies on a
technology committee to oversee Microsoft's compliance with the PFJ.
The membership in the committee is controlled 50% by the company
whose past illegal activities have been the subject of the Circuit
Court's decision. The committee lacks both resources and the power
to enforce the PFJ. The committee must rely on information provided
to it by Microsoft and has little ability to engage in its own
investigations. Furthermore, if it uncovers a violation, it must
rely on lengthy litigation to enforce it.
51. The implication is that failures by Microsoft to comply may
go undetected and if they are detected, it may take a great deal of
time and effort to impose a change on Microsoft's behavior. Delays
can greatly limit the effectiveness of any particular remedy in a
dynamic industry subject to network effects. If enforcement will be
ineffective, it may create an incentive for Microsoft to violate the
terms of the decree.
52. Other consent decrees have used special masters with
sufficient resources and expedited judicial review to enforce their
terms. Given the complex, dynamic nature of the software industry,
it is especially important that the resources are in place to
monitor the terms of the decree and that swift enforcement is
possible.
V. APPROPRIATE REMEDIES SHOULD NOT ALLOW MICROSOFT TO PROTECT
ITS ILLEGALLY MAINTAINED MONOPOLY AGAINST CURRENT AND FUTURE
COMPETITION FROM OTHER MARKETS
53. The PFJ focuses on the PC desktop as the central space in
which competition will take place going forward. It does this by
creating limited new operating rights for OEMs coveting the
appearance of the desktop and greater protections for installing
middleware that competes with Microsoft. As I have discussed above,
given the substantial advantages in middleware that Microsoft has
through its illegally maintained monopoly, I think that it is
unlikely that these desk-top-oriented remedies will spur
economically meaningful entry in middleware and that there is
therefore little reason to think that those remedies will re-create
the competitive risk Microsoft's desktop monopoly faced from
middleware entrants in 1995.
54. The PFJ therefore needs to be augmented with remedies that
take a forward-looking approach. The PFJ needs to focus on the
current and future threats to Microsoft's market power and ensure
that Microsoft is not allowed to use its illegally maintained
monopoly in PC operating systems to dilute these current and future
competitive threats. A PFJ focused on desktop remedies not only will
not jump start competition now, but by allowing Microsoft to keep
the benefits of its illegal activities, such remedies will fail to
deter future illegal anticompetitive actions by Microsoft. Instead,
additional remedies should naturally be directed at ensuring
competition going forward uninfected by Microsoft's illegally
maintained monopoly. In particular, these remedies should seek to
re-create the same risks faced by Microsoft in 1995 when the
middleware threat arose. "
A. FUTURE COMPETITION IN SERVERS AND WEB SERVICES
55. A forward-looking remedy should seek to limit Microsoft's
ability to use its illegally maintained monopoly power to bias
competition in complementary products that have the potential to
develop into substitutes for desktop computers. Server operating
systems and Web services are two prime examples. These products
intersect at the middle of two related trends. To date, the Internet
has been a PC Interact. Most Interact users access the Internet
through a PC or workstation. The first trend is a probable shift to
the use of many devices to access the Interact, including cell
phones, handhelds such as the Palm Pilot and other personal digital
assistants, and thin clients. As these devices themselves are not as
powerful as a typical PC, they will demand more work from the
servers and sewer operating systems delivering the information. The
implication is that, in the future, a significant amount of
computing will bypass the desktop--which in turn implies that
Microsoft has an incentive (if it can) to extend its monopoly from
the desktop into servers.
56. The second trend is a related shift in how software is owned
and managed. Prior to the Internet, PC software and content was
largely locally owned and locally managed. The software was
installed directly on the user's PC, from a floppy disk and then
later a CO. The rise of the Interact makes it possible to move the
location of software off of the PC and onto a remote device--a
server--with much of the work done remotely. This gives rise to
the generalized notion of a web service, where software is no longer
a thing like a CD but instead a service delivered to a connecting
device, much the way electricity is delivered to many devices.
57. On November 29, 2001, Steve Ballmer, Microsoft's CEO,
discussed these trends and how Microsoft was approaching them
through its .NET initiative: \10\
---------------------------------------------------------------------------
\10\ S. Ballmer speech, Credit Suisse First Boston
Technology Conference (Nov. 29, 2001) (http://www.microsoft.com/
msft/speech/BallmerCSFB112901.htm).
---------------------------------------------------------------------------
About three years ago we changed the vision of our company.
Instead of talking about a computer on every desk and in every home
we started talking about empowering people through software anytime,
any place, any device. ... It starts with a view, which came to us
quite clearly about five, almost six years ago now that XML
[eXtensible Markup Language] would really be the transforming
industry phenomenon of the next five years. If it was the PC 20
years ago and graphical user interface 10 or 15 years ago and the
Internet five or six years ago, it's XML. And I'm not going to give
a long description, but I think the way you should think about it is
XML will be the Lingua Franca of computing. It will be the basis on
which systems work better with systems, people with people,
businesses with businesses, businesses with consumers. It will
improve the level of integration and connectivity. It gives us a
framework at least for the software community to build the software
that allows that. ... .NET is our platform to let people take
advantage of the XML revolution.
58. Ballmer also discussed the Microsoft business model and how
.NET fits within it. He sees Microsoft as targeted on seven business
areas, including, unsurprisingly, PC operating systems, PC
productivity solutions "anchored" by Office, and server
software for building and deploying these applications. All of these
are now being organized around .NET:
I think you could say we are a company that invests in seven
businesses around one platform. That platform is .NET. .NET is our
platform for the next technology revolution that is going on. And
that is the shift to the XML web service model as the fundamental
way of building and deploying software. .NET is our platform to do
that. ... That's how we think about the seven business areas in
which we are investing. They're all being re-platformed or re-
plumbed around .NET and XML web services.
59. A computing world in which Web services, hosted on servers,
are delivered on demand over the Internet is a world that has
negative implications for Microsoft's near-monopoly in desktop
operating systems. In such a world, there is no longer the same need
for desktop computers to have "fat" operating systems
such as Windows. In many respects, the Web services model is simply
a more developed version of the thin-client, "network
computer" model advocated by Oracle and Sun in the mid/late-
1990s. As such, the Web services model is a threat to Microsoft's
desktop monopoly and Microsoft therefore has an incentive (if it
can) to use its existing monopoly to gain control over this possible
threat. It has an incentive to ensure that Windows remains at the
center of the Web services model and/or to migrate its monopoly from
the desktop to Web services.
B. MICROSOFT IS ATTEMPTING TO PROTECT ITS EXISTING MARKET POWER
BY USING ITS ILLEGALLY MAINTAINED MONOPOLY IN PC OPERATING SYSTEMS
TO GAIN ADVANTAGES IN SERVERS AND WEB SERVICES
60. Microsoft's illegally maintained monopoly in the market for
PC operating systems provides it with important advantages in server
operating systems, in particular operating systems for workgroup
servers. Workgroup servers are the servers in a "client-
server" network that interoperate directly with desktop
clients. Workgroup
[[Page 29009]]
servers provide services such as authentication and authorization,
directory, and file and print. Very importantly, they are also the
point of contact or gateway between an organization's network of
servers and the Interact. Workgroup servers are distinct from
enterprise servers, which are more powerful, reliable and expensive
servers that handle databases and other "mission
critical" applications.
61. Some of Microsoft's advantages in workgroup server operating
systems arise because of the distribution advantage provided by its
monopoly in PC operating systems. Suppose a vendor of workgroup
operating systems develops a new feature (such as a new directory
service for keeping track of the users and resources on a network or
a new security system for authentication and authorization). In the
usual case, the network cannot make use of the new service in a
server operating system unless certain new code (supplied by the
vendor of the server operating system) is also installed on the
clients in the network. In large networks, this can be a costly and
time-consuming exercise--unless the network is running Windows
on its servers. A network that runs Windows on its servers does not
face this kind of problem because Microsoft ensures that the client-
side pieces of server-side technologies are built into its Windows
desktop operating system. This gives Microsoft a competitive
advantage over other vendors of workgroup server operating systems.
But it is an advantage that derives from Microsoft's illegally
maintained monopoly in PC operating systems. Moreover, there may be
significant long-run costs through the adverse effect that
Microsoft's distribution advantages (derived from its illegally
maintained monopoly in desktop operating systems) may have on
incentives to invest in server-side innovation.
62. There are other ways in which Microsoft's past illegal
conduct has provided it with advantages today in the market for
workgroup server operating systems--advantages that help
protect and enhance Microsoft's existing market power. For example,
one of the benefits to Microsoft from the defeat of Netscape's
browser was the resulting reduction in demand for Netscape
application programs for servers. These server-side applications
were designed to interoperate with the Netscape browser and certain
client-side applications, such as e-mail, written to the Netscape
Navigator APIs. Unlike Microsoft's server-side applications (such as
Exchange) that run only on Windows, Netscape's server-side
applications were implemented on multiple platforms, including Unix
and Novell's NetWare. As Netscape's share of the browser market
declined following Microsoft's illegal conduct, the demand for
Netscape's server applications also declined. Thus a consequence of
Microsoft's illegal conduct has been an increase in the demand for
Microsoft server-side applications such as Exchange that, as
mentioned above, run only on Windows server operating systems. Put
differently, Microsoft's past illegal conduct towards Netscape is
helping Microsoft establish an applications barrier that will
protect and enhance its future position in the market for workgroup
server operating systems.
63. Another way in which Microsoft's past illegal conduct
affects the market for workgroup operating systems today involves
distributed application programs. As I mentioned before, Java is a
programming language with features that I understand make it well
suited for distributed applications, i.e., applications that call
upon resources located on multiple different computers located
around a network. As I understand it, for distributed applications
to work, they need to conform to a particular set of protocols, and
these protocols need to be supported by the operating systems of the
computers involved in executing the distributed application. Java
had protocols for distributed applications (RMI and CORBA) that were
supported by multiple operating systems. Microsoft had an
alternative, proprietary set of protocols called DCOM. By
interfering with the development of cross-platform Java, Microsoft
gave an advantage to its framework for distributed applications
(DCOM) and promoted the development of distributed applications
written to protocols that run only on Windows operating systems. In
addition, since the programs that are written to these Microsoft
protocols are targeted for computers using the Windows operating
system, such programs also make use of Windows APIs. This means that
even if rival operating systems were given the ability to support
DCOM, they could not run most of the distributed applications
written to this protocol because these applications also make use of
Windows APIs. Thus this is another example of how Microsoft's past
illegal conduct, this times towards Java, is helping Microsoft
establish an applications barrier that will protect and enhance its
future position in the market for server operating systems.
64. Microsoft's past illegal conduct has also given it
advantages today in Web services. For example, one of the Web
services that Microsoft has promoted heavily is Passport, its
Internet authentication and authorization service. In a network
environment, key issues are verifying the identity of users or
computers ("who are you?") and determining the resources
to which you are entitled to have access ("what are you
authorized to do?"). Passport is an authentication and
authorization service targeted, at least initially, at e-commerce.
Consumers who subscribe to Microsoft's Passport service will have
their name and credit card information on file on servers controlled
by Microsoft. E-commerce vendors who participate in Passport will
have back office connections with the Microsoft servers so that,
when a consumer who subscribes to Passport wants to purchase
something, the e-commerce vendor can check with Microsoft's Passport
servers to authenticate and authorize the purchase (and debit the
consumer's credit card). The theory is that Passport will simplify
e-commerce transactions.
65. For Passport to be successful, Microsoft needs to have a
large base of consumers who subscribe to the service. A large base
of consumers will make firms engaged in e-commerce interested in
joining Passport on the vendor side, which in turn will make
Passport more attractive to consumers. Thus there are potential
network effects which, if they get started, may result in Passport
being in the middle of a very large volume of Internet transactions.
66. Microsoft is actively using its illegally maintained
monopoly in PC operating systems as a vehicle for enrolling
consumers in Passport. Every time a consumer boots up a new copy of
Windows, the consumer is asked multiple times whether he or she
would like to sign up with Passport. In addition, the consumer is
told that he or she will not receive information about product
upgrades unless the consumer signs up for Passport. Thus this is an
example in which Microsoft is using the distribution advantages that
it has by virtue of its illegally maintained monopoly in PC
operating systems to gain advantages in Web services. In so doing,
Microsoft helps protect its existing monopoly power and/or helps
migrate its market power from the desktop to Web services.
C. THE PFJ GIVES INSUFFICIENT ATTENTION TO:FUTURE COMPETITION
67. The implications of these trends are significant.
Microsoft's monopoly in desktop operating systems provides it with
advantages in adjacent markets that Microsoft is able to use to
protect and enhance its illegally maintained monopoly power. By
migrating its monopoly from desktop operating systems into server
operating systems and Web services, Microsoft can help ensure that
its future market power is comparable to (or greater than) the
market power it possessed when the desktop was the principal hub of
computing activity.
68. Given these links between Microsoft's past illegal conduct
and Microsoft's future market power, an appropriate remedy should be
focused on limiting Microsoft's ability to use its illegally
maintained monopoly to gain advantages in products in other markets
that have the potential to become substitutes for the Windows
desktop operating system. Disclosure remedies have the potential to
be an important step in this direction. For example, if Microsoft
were required to fully disclose the interfaces and protocols used by
its server and client operating systems, then vendors of non-
Microsoft server operating systems could design their products so
that they could interoperate smoothly in networks populated by
Windows clients and servers. The resulting competition among vendors
of server operating systems would help ensure that servers remain a
threat to Microsoft's illegally maintained monopoly in desktop
operating systems.
69. The PFJ does, not ignore completely issues related to
adjacent markets. The PFJ does require disclosure for communication
protocols that allow for servers to interoperate with Windows
operating systems. This requirement, in contrast with the other
provisions of the PFJ, appears to focus more on the server operating
system market than competition in middleware. I understand, however,
that the disclosure requirements proposed in the PFJ are exceedingly
narrow and ultimately inadequate to allow full and equal
interoperability for competitive server operating systems or Web
services architectures.
[[Page 29010]]
70. In designing disclosure remedies (or any other remedy), it
is important to remember that one is try to cure the consequences of
past illegal conduct. As a result, there is no reason to be troubled
by remedies that impose obligations that one would be reluctant to
impose on other firms. Against this background, it seems reasonable
to consider a remedy that requires disclosure sufficient to allow
competitive products to interoperate with Microsoft software on an
equal basis as Microsoft's own products. It is not clear that even
this would be enough to offset the advantages that Microsoft has
gained for itself in adjacent markets through past illegal conduct
and which serve to protect and enhance its existing market power.
But it scans like a reasonable step.
VI. SUMMARY OF CONCLUSIONS
71. As the DC Circuit found, Microsoft violated Sec. 2 of the
Sherman Act in impermissibly maintaining its monopoly through
actions designed to eliminate the threat to that monopoly posed in
the mid 1990s by competition from Netscape Navigator and Java
middleware. Given that finding, the remedies in this case should
eliminate the benefits to Microsoft of its illegal conduct; should
restore, if possible, the possibility of competition in operating
systems; and should not allow Microsoft to protect its illegally
maintained monopoly from current and future competition in related
markets, such as server operating systems and Web services. In my
opinion, the PFJ fails to accomplish these objectives.
72. The PFJ focuses on the desktop and on re-creating the
possibility for middleware competition by giving OEMs freedom with
regard to icon display and more limited freedom in installing and
using non-Microsoft middleware. In doing so, it ignores the reality
that Microsoft's market position in browsers and other middleware is
substantially stronger today than it was in 1995. I know of no
competing middleware today--and none is suggested in the
Competitive Impact Statement--that begins to enjoy the time-to-
market and market presence advantages held by Netscape Navigator and
Java in the mid-1990s. The PFJ does nothing to address the powerful
distributional advantage that Microsoft alone has and which ensures
that its middleware will be ubiquitous. That ubiquity operates as an
unchecked barrier to entry and reduces the incentive for others to
create innovative, competitive middleware. I therefore see no reason
to think that the PFJ will succeed in spurring a new middleware
threat to the Microsoft operating system or in denying Microsoft the
fruits of its illegally maintained monopoly.
73. The PFJ ignores remedies that could have a more significant
effect in middleware markets, in particular, remedies that require
Internet Explorer to be open source and that require Microsoft to
distribute the most current version of the Java runtime environment
with IE and Windows. Although these remedies are unlikely to fully
restore the competitive threat posed by middleware before
Microsoft's illegal activities took place, these remedies would
likely have a greater impact than those set forth in the PFJ.
74. More fundamentally, the PFJ does nothing to address the
applications barrier to entry that defines Microsoft's monopoly in
PC operating systems. Microsoft also controls the most economically
important set of applications for Windows through its control over
Microsoft Office. As the DC Circuit found, Microsoft used that
control to protect its operating system monopoly through threats
against Apple. It is clear that Microsoft's ability to make such
threats would be diminished if Microsoft has an obligation to
license the rights to port Office to competing operating systems.
Indeed, porting Office to other operating systems is a remedy that
could have a significant impact on the applications barrier to
entry.
75. In addition, the PFJ should focus on the current and future
threats to Microsoft's market power and ensure that Microsoft cannot
use its illegally maintained monopoly to stifle such threats. This
ease makes clear that those threats are likely to come from products
that are complements to Windows in the short run and potential
competitors in the long run. That was precisely the position of
Netscape Navigator and Java in 1995; today, based on Microsoft's??
public statements, that may be the position of server operating
systems and Web services. Both of these represent a move away from a
computing structure organized around desktop computers using
"fat" operating systems such as Windows. Server
operating systems and Web services represent an evolution of the
thin-client model of computing, and as such, represent a threat to
Microsoft's desktop monopoly. Microsoft is currently attempting to
defeat this threat by using its illegally maintained monopoly in PC
operating systems as a vehicle for expanding its market share in
servers and attaching consumers to its Web services infrastructure.
The PFJ is missing forward-looking remedies that address such
efforts by Microsoft to protect and enhance its existing market
power by using its illegally maintained monopoly in PC operating
systems to defeat competitive threats in adjacent markets. This is a
significant hole in the PFJ that bears on the future of competition
in the computing industry.
I hereby affirm under penalty of perjury that the foregoing is
true and correct to the best of my knowledge, information and
belief. Executed this 25th day of January, 2002 in Palo Alto,
California.
Kenneth J. Arrow
Attachment B
PRIVILEGED AND CONFIDENTIAL
In re: United States v. Microsoft Corp., Civ. Action No.
98-1232; New York v. Microsoft Corp., Civ. Action No.
98-1233
Mediator's Draft No. 18 of Settlement Stipulation and Proposed
Consent Decree Stipulation
The parties, by their respective attorneys, agree as follows:
1. The court has jurisdiction over the subject matter of this
action and over all the parties to it.
2. The final judgment attached hereto (sometimes referred to as
the "decree") may be entered by the court upon motion of
any party or upon the court's own motion at any time after
compliance with the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16.
3. The parties shall comply with the terms of the attached final
judgment no later than 30 days after the date of the execution of
this stipulation, with the exception of 3.9 and 4.1,
with respect to which compliance shall be due no later than 60 days
after the date of the execution of this stipulation, and
4.2, which specifies the time for compliance with that
section.
4. The plaintiffs agree not to oppose a motion by Microsoft to
vacate the findings of fact that the court issued on November 5,
1999, and to declare that those findings, and the judgment when
entered, shall have no preclusive effect, either under principles of
collateral estoppel (issue preclusion) or section 5(a) of the
Clayton Act, 15 U.S.C. 16(a), in any proceeding, the
court having rendered no conclusions of law or determination of
liability and Microsoft Corporation having not acknowledged
liability and having represented that it has agreed to the entry of
this judgment solely for business reasons, to avoid the expense and
uncertainties of continued litigation. Microsoft's consent to the
entry of this judgment is conditional upon the grant of this motion.
5. If the court does not enter the decree as the final judgment
in this proceeding, all the parties are relieved from all
obligations under the decree and this stipulation.
6. This stipulation will not be effective until all the parties
to the litigation have signified in writing that they agree to it.
It will become effective on the day on which the last party
communicates its acceptance to the other parties.
7. This stipulation and the attached decree are the complete and
integrated expression of the parties" settlement agreement.
For the United States
For the other plaintiffs
For Microsoft Corporation
Dated:---- ------ ----
----, 2000 4/5/00
Final Judgment
It is ordered, adjudged, and decreed, as follows:
1. Jurisdiction:
This court has jurisdiction of the subject matter of this action
and of Microsoft. Microsoft has violated sections 1 and 2 of the
Sherman Act, 15 U.S.C. 1, 2, and related state laws of
the States of New York, California, Connecticut, Florida, Illinois,
Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts,
Michigan, Minnesota, New Mexico, North Carolina, Ohio, Utah, West
Virginia, and Wisconsin, and the District of Columbia.
2. Definitions:
(1) "operating system": the software that controls
the operation of a computer. An "operating system
product" is any operating system or part or feature thereof
that is distributed commercially whether or not it is marketed for a
positive price. A "personal computer operating system"
is an operating system intended to be used with personal computers,
whether or not such operating system is also intended to be used
with other computers.
(2) "Windows operating system." Software code
(including source code and binary) of
[[Page 29011]]
Windows 98, Windows 2000 Professional, and their successors,
including the Windows operating systems codenamed
"Millennium," "Whistler," and
"Blackcomb."
(3) "middleware": software that operates between two
or more types of software (such as an application, an operating
system, a server operating system, or a database management system)
and could, if ported to multiple operating systems, enable software
products written for that middleware to be run on multiple operating
systems. Software does not cease to be middleware, if otherwise
within the definition in this subsection, merely because it
interacts directly with the operating system or other software.
Examples of middleware within the meaning of the decree include
Internet Explorer, the Outlook Express e-marl client, Windows Media
Player, and the Java Virtual Machine. Examples of software that are
not middleware within the meaning of the decree are disk compression
and memory management.
(4) "platform software": either an operation system
or middleware, as these terms are defined above.
(5) "default Middleware": software configured to
launch automatically (that is, by "default") to provide
particular functionality-when-other middleware has not been selected
for this purpose. For example; a default browser is middleware
configured to launch automatically to display Web pages transmitted
over the Interact or an intranet that hear the .htm extension, when
other software has not been selected for this purpose.
(6) "personal computer": a computer that is designed
to he used by one person at a time that uses a video display and
keyboard (whether or not the video display and keyboard are actually
included), and that contains an Intel x86 or competitive
microprocessor, and computers that are commercial substitutes for
such computers.
(7) "original equipment manufacturer (OEM)": the
manufacturer or assembler of a personal computer.
(8) "independent software vendor (ISV)": any entity
other than Microsoft (or any subsidiary, division, or other
operating unit of any such other entity) that is engaged in the
development and licensing (or other marketing) of software products
intended to intemperate with Microsoft platform software.
(9) "application programming interfaces (APIs)": the
interfaces and protocols that enable an application, middleware, or
server operating system to efficiently and effectively obtain
services from (or provide services in response to requests from)
platform software in a personal computer and to use, benefit from,
and rely on the resources, facilities, and capabilities of such
platform software.
(10) "communications interfaces": the interfaces and
protocols that enable applications, middleware, or operating systems
installed on other computers (including servers) to interoperate
satisfactorily with the Windows platform software on a personal
computer.
(11) "technical information": all information,
regarding the identification and means of using APIs (or
communications interfaces), that competent software developers
require to make their products running on a personal computer,
server, or other device interoperate satisfactorily with Windows
platform software running on a personal computer. Technical
information includes reference implementations, communications
protocols, file formats, data formats, data structure definitions
and layouts, error codes, memory allocation and deallocation
conversions, threading and synchronization conventions, algorithms
for data translation or reformatting (including compression/
decompression algorithms and encryption/decryption algorithms),
registry settings, and field contents.
(12)
(a) "intellectual property rights": copyrights,
patents, trademarks, and trade secrets;
(b) "to infringe intellectual property rights": to
commit a legal violation of such a right.
(13) "end-user access": the invocation of middleware
by an end user of a personal computer or the ability of such an end-
user to invoke middleware. "End-user access" includes
invocation of middleware by end-users which is compelled by the
design of the operating system.
(14) "Market Development Agreement (MDA)": the class
of agreements with OEMs that provides discounts from Windows
operating system royalties.
3. Prohibitions:
Microsoft Corporation is enjoined from:(1) agreeing or offering
to provide any consideration or advantage to any person in exchange
for, or conditioned on, such person's agreement or willingness not
to develop, promote or distribute (or to limit the development,
promotion or distribution) of any operating system product or
middleware competitive with any Windows operating system product or
middleware.
(2) offering or conditioning a Windows operating system license
to any OEM, or the terms of administration of a license, or any
change in Microsoft's commercial relations with an OEM, or offering
or threatening to do any of these things, related to whether (or to
the extent) the OEM
(a) makes or promotes (or declines to make promote, distribute,
or license) a non-Microsoft operating system product or middleware;
(b) makes, promotes, distributes, or licenses a modified version
of the Windows operating system; or
(c) exercises any of the options provided under this decree;
(3) limiting an OEM's
(a) interrupting the Windows initial boot sequence by a
registration sequence used to obtain subscription or other
information from the user;,
(b) displaying icons of a competing platform software product on
the Windows desktop, or the size, shape, or convenience of such
icons;
(c) displaying a middleware user interface, provided that an
icon is also displayed that allows the user to access the Windows
desktop and that the OEM makes clear that the interface is not
Microsoft's; or
(d) offering its own sign-up sequence, which may include an
option to make a non-Microsoft middleware product (for example, non-
Microsoft Web-browsing functionality) the default middleware product
and to remove the icon for Microsoft's middleware product from the
Windows desktop;
(4) conditioning the licensing of a Windows operating system, or
the terms or administration of any such license (including the
nature and extent of support provided), on the OEM's
(a) also licensing, shipping, or promoting (or declining to
license, ship, promote; or limiting its licensing, shipment, or
promotion of) (i) a Microsoft middleware product (ii) any other
Microsoft software product that Microsoft distributes, in whole or
in part, separately from the Windows -operating system(whether or
not for a separate or positive price) (iii) the unmodified version
of such an operating system if the OEM offers a modified version of
the Windows operating system pursuant to this decree, or
(b) making middleware supplied by Microsoft the default
middleware in computers sold or distributed by the OEM;
(c) whether the OEM limits end-user access to the middleware
that is distributed with the operating system,
(5) Entering into any agreement with an OEM in which the
operating system royalties are payable to Microsoft by the OEM are
set otherwise than by reference to a uniform royalty schedule to be
established by Microsoft: in its sole discretion, except that the
schedule may specify different royalties for different language
versions
(6) agreeing or offering
(a) to provide any consideration or advantage to any person in
exchange for, or conditioned on such person's agreement or
willingness to degrade or limit the quality of any non-Microsoft
platform software, or not to may the supplier of any non-Microsoft
platform software, or
(b) to include or promote any product of any person on the
Windows desktop, in a folder on the Windows desktop, in the Active
Desktop, or in the Windows initial boot sequence, related to the
distribution, use, or promotion of Microsoft platform software, or
to the limitation of the distribution, use, or promotion of non-
Microsoft platform software;
(7) conditioning any bona fide ISV's access to technical
information, or developer support to assist in its use, to assist in
the creation of Windows-based applications (or the terms on which
such Information or support is provided), upon such ISV's
(a) use, distribution, promotion, or support of any Microsoft
middleware
(b) declining to use, distribute, promote, or support any non-
Microsoft middleware
(8) failing to disclose (at the time such APIs, technical
information, or communications interfaces are disclosed to
Microsoft's own software developers) for use in interoperating with
Windows operating systems and middleware distributed with such
operating systems, the APIs, technical information and
communications interfaces that Microsoft employs to enable
(a) Windows platform software to interoperate with Microsoft
applications installed on the same personal computer, or
(b) Windows operating system software and middleware distributed
with such
[[Page 29012]]
operating system to interoperate with Microsoft middleware installed
on the same personal computer if the middleware is (i) Internet
Explorer, the Outlook Express e-mail client, Windows Media Player,
or the Java Virtual Machine, or their successors, or (ii)
distributed separately from the operating system for installation on
any Windows operating system; or
(c) a Windows operating system and middleware distributed with
such operating system installed on one personal computer to
interoperate with any of the following software installed on a
different personal computer or on a server--(i) Microsoft
applications, (ii) Microsoft middleware, or (iii) Microsoft client
or server operating systems,
(9) tying or combining any middleware product to or with a
Windows operating system unless Microsoft offers a version of that
operating system without such middleware product at a reduced price
that reasonably reflects the relative costs of the operating system
and the excluded middleware
(10) limiting an OEM's right or ability to add non-Microsoft
middleware to a Windows operating system
4. Affirmative Provisions:
(1) Microsoft shall license the source code for Windows
operating systems on the following terms:
(a) Microsoft-shall grant each of its 50 highest-volume OEM
customers, at the OEM's option, a perpetual, nonexclusive license to
the source code of Windows operating systems for the sole purpose of
using that source code to modify those operating systems for
purposes of (i) preventing end-user access to any middleware
included in the operating system, (ii) facilitating, improving, or
otherwise optimizing the interoperation of any non-Microsoft
middleware with, and fixing the bugs in, the operating system, and
(iii) installing any end-user interface; provided that OEMs shall
have no right to make modifications to a Windows operating system
that render inoperable any of the APIs exposed to ISVs by that
operating system unless doing so is reasonably necessary to
accomplishing purposes (i), (ii), or (iii) above and the end-user to
whom such operating system is licensed is given the means readily to
install all software necessary to endure that such APIs are rendered
operable. The source code licenses granted by Microsoft under this
subsection shall not entitle OEMs to use such source code for any
purpose other than creating modified versions of Windows operating
systems for the purposes stated in this section and working with
ISVs to facilitate the interoperation of such ISV's products with
Windows operating systems.
(b) The terms of source code licenses granted by Microsoft under
this subsection shall be standardized and not be subject to
negotiation with individual OEMs. Microsoft shall not charge OEMs a
royalty or fee for access to the source code of Windows operating
systems.
(c) Microsoft's royalty for any modified version of a Windows
operating system installed on an end-user's personal computer shall
be calculated as follows: (i) if the royalty charged that OEM for
the unmodified version is no higher than the royalty charged for the
predecessor operating system, the royalty charged the OEM for the
modified version shall not exceed the royalty charged that OEM for
the predecessor operating system; (ii) if the royalty charged that
OEM for the unmodified version exceeds the royalty charged that OEM
for the predecessor system, the royalty charged that OEM for the
modified version shall be the royalty charged that OEM for the
unmodified version discounted by the percentage difference that is
allocable in accordance with accepted accounting principles to the
middleware that is (i) excluded or (ii) made not end-user accessible
by the OEM. The allocation shall be based on the development costs
of the unmodified version of the operating system, as determined by
the agreement of the parties or, in the absence of the agreement, by
an arbitrator selected in accordance with the rules of the American
Arbitration Association.
(d) OEMs shall have the right to license any modified version of
a Windows operating system that they create pursuant to this
4(1) to end-users, and to value-added resellers,
systems integrators, retailers, ISVs, and other OEMs for licensing
to end-users, for installation and use on personal computers,
provided only that such non-end-user licensees agree, either in a
sublicense With-the OEM or in a license with Microsoft, to be bound
by the terms set forth in-the OEM's license (other than those terms
providing for access to and modification of source code) with
Microsoft pursuant to this section.
(e) Microsoft may require that modified versions of Windows
operating systems created by a particular OEM be installed only in
the form in which the unmodified versions of that operating system
are installed, but must permit the OEM to distribute any non-
Microsoft software in any form. Microsoft may also require that
OEMs, and any licensees pursuant to 4(1)(d) above,
provide their customers with end-user licenses for such modified
versions of Windows operating systems in a form prescribed by
Microsoft .that is consistent with this decree. Microsoft is not
required-to grant OEMs any right to disclose source code for the
original or any modified version of a Windows operating system
except as provided in the preceding sentence and in subsection 4(h)
below.
(f) Microsoft may require that an OEM that develops a modified
version of a Windows operating system that boots up automatically
into a non-Microsoft user interface to include an icon on the
primary screen of that user interface that enables the end-user to
return to the Windows desktop as designed by Microsoft.
(g) Microsoft shall make all source code for Windows operating
systems available to OEMs that enter into source code licenses
pursuant to this section beginning with the first alpha, beta, or
other release of the operating system outside of Microsoft and shall
supply complete updates to that source code at the time of all later
releases and release candidates. Microsoft may require OEMs to base
their modified versions of Windows operating systems on the
commercially released versions of those operating systems and not on
a beta release or a release candidate, provided that Microsoft
supplies OEMs with the final code for such systems at least 180 days
prior to the earlier of their scheduled release date or their
release. Microsoft may prohibit OEMs from releasing any modified
version of a Windows operating system prior to the earlier release
of Microsoft's release of that operating system or 60 days after the
scheduled release date.
(h) To facilitate creation of modified versions of Windows
operating systems by OEMs, Microsoft shall provide OEMs with its
internal build tools, source code archives, bug-tracking databases,
custom compilers, test suites, and other development tools
ordinarily used by software developers in modifying and testing
modified source code for operating systems (subject to normal and
customary restrictions on disclosure of such proprietary
technology), as well as reasonable access to knowledgeable Microsoft
support engineers familiar with the source code, whose time may be
billed by Microsoft to OEMs at customary rates. Subject to customary
and reasonable intellectual property rights (including customary and
reasonable nondisclosure agreements executed by ISVs and their
personnel exposed to Microsoft's source code), Microsoft must permit
an OEM to work with one or more ISVs or other software developers
(which may participate in modifying the source code) to facilitate
the OEM's development of a modified version of a Windows operating
system pursuant to 4(1) of this decree.
(i) OEMs shall have the right to use the word
"Windows" to designate any modified version of a Windows
operating system created pursuant to this section and to state, when
true, that the modified version runs applications that run on
Microsoft Windows, provided that the OEM states clearly that such
modified version has been modified by the OEM, and does not imply
that Microsoft endorses the modifications.
(j) Microsoft shall have no obligation to provide product
support to an OEM's customers for those aspects of a modified
version of a Windows operating system created by the OEM that are
due to the modification.
(2) Microsoft shall, when it makes a major Windows operating
system release (such as Windows95,Windows 98, Windows 2000
Professional, Windows "Millennium,"
"Whistler," "Blackcomb," and successors to
these), continue to license the previous Windows operating system at
the existing royalty rate for three years to any OEM that desires
such a license. During that period, Microsoft shall make the
previous Windows operating system's code available to its 50
highest-volume OEM customers at customary and reasonable terms,
together with reasonable personnel support (for which Microsoft may
require compensation from the OEM at customary rates), for the
purpose of enabling those OEMs to adapt the operating system to the
latest hardware advances and to fix bugs. The OEM shall be free to
market computers in which it preinstalls such an operating system in
the same manner in which it markets computers
[[Page 29013]]
preinstalled with other Windows operating systems, provided,
however, that Microsoft shall be entitled to require OEMs to inform
their customers that such computers contain a modified version of a
Windows operating system.
(3) In all future MDAs, Microsoft shall offer the same MDA terms
to all OEMs whose shipments of Microsoft operating systems fall
within a specified range (e.g., the 10 largest OEMs, as measured by
total annual volume of modified and unmodified versions of Microsoft
operating systems that they ship, would be entitled to the highest
MDA, the next 10 to a lower MDA, and the remaining OEMs to no MDA),
subject to variations by geography for OEMs that make more than S0
percent of their sales outside the United States. No class entitled
to the same MDA terms in accordance with this subsection shall have
fewer than 10 members.
(4) Notwithstanding the foregoing provisions, upon the release
of its next Windows operating system, codenamed
"Millennium," and upon the next release, version, or
service pack update of Windows 2000 Professional after May 30, 2000,
Microsoft shall provide the means for OEMs and end users at their
option readily to prevent end-user access to the operating system's
browsing functionality. 5. Term:
(1) Microsoft shall comply with the provisions of this decree
within 30 days after its submission to the district court for
approval.
(2) This decree shall expire at the end of five years from the
date of that submission, except that:
(a) The source code licenses granted pursuant to
4(1) are perpetual, and the right to license modified
operating systems created thereunder shall continue for an
additional five years; and
(b) If the obligation set forth in 4(2) to continue
to license a predecessor operating system is triggered during the
five-year period referred to in the preceding subsection, Microsoft
shall continue to comply with that obligation with respect to that
predecessor operating system for an additional two years, but
4(2) shall have no further force or effect after the
expiration of the two-year period.
6. Enforcement: In order to minimize the burden on
the judicial system of enforcing this decree, the plaintiffs have
agreed that exclusive responsibility for enforcing it shall be
lodged with the United Department of Justice and with one of the-
States that are plaintiffs in this action, as selected by the
plaintiff States.
7. Reporting and Compliance:
(1) To determine or secure compliance with this decree, duly
authorized representatives of the plaintiffs shall, upon reasonable
notice given to Microsoft at its principal office, subject to any
lawful privilege, be permitted:
(a) access during normal office hours to inspect and copy all
books, ledgers, accounts, correspondence, memoranda, source code,
and other documents and records in the possession, custody, or
control of Microsoft (which may have counsel present) relating to
any hinters contained in this decree;
(b) subject to the reasonable convenience of Microsoft and
without restraint or interference from it, to interview officers,
employees, or agents of Microsoft, who may have counsel present,
regarding any matters contained in this decree;
(c) upon written request and on reasonable notice to Microsoft
at its principal office, require Microsoft to submit written
reports, under oath if requested, with respect to any matters
contained in this decree.
(2) No information or documents obtained by the means provided
by this decree shall be divulged by any of the plaintiffs except in
the course of legal proceedings to which one or more of the
plaintiffs is a party, or for the purpose of securing compliance
with this decree, or as otherwise required by law. If when
information or documents are furnished by it Microsoft identified in
writing material to which a claim of protection may be asserted
under Rule 26(c)(7) of the Federal Rules of Civil Procedure and
marks each page of such material "Subject to claim of
protection under Rule 26(c)(7) of the Federal Rules of Civil
Procedure," ten days" notice shall be given to Microsoft
prior to divulging such material in any legal proceeding (other than
a grand jury proceeding) to which Microsoft is not a party.
(3) Within thirty days of the date of submission of this decree
for approval by the court, Microsoft shall designate an officer of
the corporation to be the antitrust compliance officer. That officer
shall have primary responsibility within the corporation for
achieving and maintaining full compliance with this decree and shall
serve as liaison with the plaintiffs with respect to the
administration of the decree. The officer may be assisted by other
employees of Microsoft and will report directly to Microsoft's chief
executive officer.
8. Miscellaneous Provisions:
(1) This decree applies not only to Microsoft but also to each
of its officers, directors, agents, employees, successors, and
assigns, and to all persons in active concert or participation with
any of them who shall have received actual notice of this decree by
personal service or otherwise.
(2) The district court shall retain jurisdiction to enforce the
decree.
(3) The decree is in the public interest.
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
----------------------
----------------------
----------------------
--------- )
UNITED STATES OF AMERICA, ) ) Plaintiff, ) ) v. ) Civil Action
No. 98-1232 (CKK) ) MICROSOFT CORPORATION, ) ) Defendant. ) )
----------------------
----------------------
-----------------------
----------)
STATE OF NEW YORK, et al., ) ) Plaintiffs, ) ) v. ) Civil Action
No. 98-1233 (CKK) ) MICROSOFT CORPORATION, ) ) Defendant. ) )
----------------------
----------------------
----------------------
---------
DECLARATION OF KENNETH J. ARROW
Kenneth J. Arrow declares under penalty of perjury as follows:
I. INTRODUCTION
1. I am the Joan Kenney Professor of Economics Emeritus and
Professor of Operations Research Emeritus at Stanford University. I
received the degrees of B.S. in Social Science from The City College
in 1940, M.A. in mathematics from Columbia University in 1941, and
Ph.D. in economics from Columbia University in 1951. I have taught
economics, statistics, and operations research at the University of
Chicago, Harvard University, and Stanford University, and I have
written more than 200 books and articles in economics and operations
research. I am the recipient of numerous awards and degrees,
including the Nobel Memorial Prize in Economic Science (1972). A
significant part of my writing and research has been in the area of
economic theory, including the economics of innovation and its
relation to industrial organization. My curriculum vitae is
attached.
2. I have been asked by ProComp to comment on various economic
issues related to the Revised Proposed Final Judgment
("PFJ" or the "decree") proposed by the
United States, various settling States and Microsoft Corporation
("Microsoft").
3. My review of the PFJ begins with the fact that Microsoft has
been found liable for violating Section 2 of the Sherman Act by
engaging in a widespread series of practices that illegally
maintained its monopoly in Intel-compatible PC operating systems.
These practices were focused on eliminating the threat posed to
Microsoft's PC operating system monopoly by the combination of
Netscape Navigator and cross-platform Java technology
("middleware competition").
4. Given that Microsoft has been found liable for illegal
monopoly maintenance, the remedies in this ease should be designed
to eliminate the benefits to Microsoft from its illegal conduct. To
the extent possible, the remedies should be designed to restore the
possibility of competition in the market where monopoly was
illegally maintained (i.e., the market for PC operating systems). In
addition, the remedies should strengthen the possibilities for
competition and deter the exercise of monopoly power in the present
and future, taking account of the special problems of an industry in
which network effects are important.
5. It is my opinion that the PFJ fails to accomplish these
objectives. First, the PFJ is unduly focused on attempting to re-
create an opportunity for future middleware competition. Because of
network effects and path dependencies, Microsoft's monopoly power in
PC operating systems is more entrenched than it was in the mid-
1990s. It will be exceedingly difficult now, even with the best of
remedies, to re-establish middleware fully as the kind of
competitive threat to Microsoft's monopoly power that it posed in
the mid- 1990s. Additional remedial steps need to be taken to ensure
that Microsoft does not benefit from its illegal conduct and the
consequences of that conduct on dynamic competition in the OS market
Second, the PFJ does not address the fact that no effort to restore
competition in the market for PC operating systems will be
successful without measures designed to lower the applications
barrier to entry that currently protects Microsoft's position in
this market. Third, the enforcement mechanism described in the PFJ
seems likely to be ineffective, even with respect to the inadequate
remedies in the PFJ. Fourth, the PFJ pays insufficient attention to
the ways in
[[Page 29014]]
which Microsoft is currently attempting to protect its monopoly
power by using its illegally maintained monopoly in PC operating
systems against current and future competitive threats, such as
server operating systems and Web services.
6. This affidavit has six parts and is organized as follows.
After this introduction (Part I), Part II reviews the threat that
Netscape, Java and the Internet posed in the mid-1990s to
Microsoft's monopoly power in PC operating systems. Part III then
reviews the illegal conduct that Microsoft used in defeating this
threat. Part III also analyzes the state of the computer industry
today following this illegal conduct and explains why it seems
unlikely, at this stage, that the middleware threat can be re-
created. With this as background, Parts IV and V review and assess
the remedies proposed in the PFJ. Part IV critiques the remedies
designed to restore middleware competition. In addition, Part IV
discusses the lack of attention in the PFJ to the applications
barrier to entry that protects Microsoft's monopoly power in PC
operating systems. It also notes certain deficiencies in the
enforcement mechanism proposed in the PFJ. Part V follows with a
discussion of Microsoft's efforts to protect its existing monopoly
power by using its illegally maintained monopoly in PC operating
systems to gain advantages in other markets that threaten to reduce
the scope of its current market power. Part V explains that the PFJ
gives insufficient attention to this important subject--a
subject that bears on the future of competition in the computing
industry. The affidavit concludes in Part VI with a summary of
conclusions.
II. MICROSOFT'S MONOPOLY POWER AND THE THREAT POSED BY NETSCAPE,
JAVA AND THE INTERNET
A. NETWORK EXTERNALITIES
7. Network externalities have been central to Microsoft's
ability to maintain its monopoly power in the market for PC
operating systems. Both the District Court and the U.S. Court of
Appeals for the District of Columbia Circuit referred to the
"applications barrier to entry," the process by which a
large installed base induces the development of applications and
other complementary goods designed for the dominant operating
system, which further reinforces the position of the dominant
operating system. I described this process in a declaration that I
submitted in 1995 on behalf of the government in a prior settlement
with Microsoft:
A software product with a large installed base has several
advantages relative to a new entrant. Consumers know that such a
product is likely to be supported by the vendor with upgrades and
service. Users of a product with a large installed base are more
likely to find that their products are compatible with other
products. They are more likely to be able successfully to exchange
work products with their peers, because a large installed base makes
it more likely that their peers will use the same product or
compatible products. Installed base is particularly important to the
economic success of an operating system software product. The value
of the operating system is in its capability to run application
software. The larger the installed base of a particular operating
system, the more likely it is that independent software vendors will
write programs that run on that operating system, and, in this
circular fashion, the more valuable the operating system will be to
consumers.
8. The applications barrier to entry implies that it is likely
that a single platform (or programming environment) will dominate
broad segments of the computer software industry at any point in
time. This does not necessarily imply that there will be monopoly;
that depends on the extent to which the dominant platform is
proprietary or closed. However, if the dominant platform is
proprietary (which is certainly the case with Windows), then the
interdependence of applications and operating systems creates a
barrier against any new entrant. A new entrant would need to create
both an operating system and the applications that make it useful.
9. In addition, any customer of a new entrant would have to
incur considerable costs in switching to a new system. In the first
place, the customer would have to learn new operating procedures.
Second, there would be a problem of compatibility of files. These
factors constitute a natural obstacle to change, so that a system
with a large installed base will have a tendency to retain its
users.
10. The special nature of operating systems and software also
gives Microsoft, because of its large installed base of operating
system, a great advantage in the markets for complementary software.
Specifically, it can distribute the software much more easily than
its competitors. Since virtually every new PC ships with Windows,
Microsoft can put its software into the hands of users by including
it with the operating system. Any other vendor of complementary
software that wanted to distribute through OEMs would have to cut a
separate deal with each OEM, and would face the task of persuading
OEMs to carry software products that may be directly competitive
with products offered by Microsoft. As a result, complementary
software from other vendors typically either has to be downloaded
(which imposes added costs on users) or distributed separately to
users in "shrink wrap." In addition, Microsoft has the
ability to allow Microsoft developers of complementary software
access to "hidden APIs" -application programming
interfaces in the PC operating system that Microsoft developers know
about but which are not disclosed fully to competing developers of
complementary software.
B. THE MIDDLEWARE THREAT: NETSCAPE AND JAVA
11. A threat to Microsoft's monopoly in PC operating systems
arose in the mid-1990s with the nearly simultaneous emergence of the
Internet browser developed by Netscape and the Java programming
environment. These are both examples of middleware--application
software designed to run on multiple operating systems and which has
its own set of APIs. Middleware that provides extensive
functionality through a broad set of APIs has the potential to
become an alternative platform for application development If many
applications valued by PC users were written to middleware APIs, and
if the middleware were ported to other operating systems (existing
or to be created), then the applications barrier to entry in the
market for PC operating systems would be weakened.
12. Netscape Navigator was a browser that also had the potential
to become a platform for application programs. Netscape's browser
had its own set of APIs to which developers could write application
programs.
13. The initial success of Netscape Navigator was dramatic.
Netscape shipped first browser in September 1994.\1\ In July 1995,
less than a year later, its share of the browser market was 74%. \2\
By mid-1996, Netscape's share had reached 85%. \3\
---------------------------------------------------------------------------
\1\ "A Software Giant's March Onto the
Internet," New York Times (Jan. 12, 1998) at CA.
\2\ "Browser Usage: How It's Trending,"
Interactive Age (Jul. 31, 1995) (citing figures compiled by Interse
Market Focus).
\3\ "Microsoft v Netscape: Freer than Free,"
The Economist (Aug. 17, 1996, U.S. Edition).
---------------------------------------------------------------------------
14. The threat that Netscape posed to Microsoft's monopoly power
in PC operating systems was made even greater by the nearly
simultaneous development of Java. The Java technology has several
pieces. R is a programming language that I understand has features
well suited for writing "distributed
applications"--applications that run on networks, calling
upon resources located on different computers in the network. Java
technology also includes the Java Virtual Machine
("JVM") and Java Class Libraries. The JVM and Java Class
Libraries are forms of middleware. They are software programs that
have been implemented on Windows and many other operating systems. A
JVM is software that converts Java code into instructions that can
be processed by the operating system on which the JVM sits. The Java
Class Libraries are software that performs specific functions that
developers can call upon, and build into, their Java application
programs. The JVM and Java Class Libraries are sometimes referred to
collectively as the "Java runtime environment." The Java
technology has been licensed in a way designed to encourage its
implementation on a variety of different operating systems. The Java
ideal was captured in the phrase, "write once, run
anywhere."
15. Java added to the threat posed by Netscape because it
extended the set of middleware APIs to which developers could write
application programs. It increased the chances that developers could
write sophisticated PC application programs written to middleware
APIs instead of Windows APIs. Netscape also complemented Java by
serving as a distribution mechanism. The Java technology could not
succeed without widespread distribution of the Java runtime
environment. Because Netscape supported Java and included the Java
runtime environment with every copy of its browser, growth in the
share of PCs that used the Netscape browser also meant growth in the
share of PCs with a Java runtime environment that supported Java's
"write once, run anywhere" ideal.
16. The economic relationship between middleware and the OS is
unusual among the commodities that economic theory usually deals
with. Middleware is a complement to
[[Page 29015]]
any OS in the short run, but it facilitates substitution among
operating systems in the long run. Middleware is a complement in the
short run because it adds functionality to the existing OS, but it
is in a sense a substitute in the long run, because applications can
be written to it rather than to the OS. Middleware therefore permits
substitution among operating systems, since the applications are not
specific to any one OS. Therefore, an OS monopolist will have an
incentive to control middleware in order to maintain its OS
monopoly. The short-run complementarity becomes an instrument by
which this incentive can be realized. The middleware has to be
ported to the OS, and the OS producer's control of the needed APIs
can be used to restrict the spread and use of the middleware.
17. Middleware is naturally thought of as a disruptive
technology, and the emergence of middleware in 1995 created what is
frequently referred to as an "inflection point." Put
simply, this means that the then well-defined organization of the
software market for personal computers might be altered
substantially, or at least such a risk existed. As that organization
was centered on the Microsoft Windows operating system and its
productivity application suite Microsoft Office, Microsoft had the
most at risk from any disrupting change that resulted from
middleware.
18. Technological disruptions such as the middleware threat of
the mid- 1990s do not occur frequently. They only arise when there
is an important innovation that allows technology to evolve and
create new products or functionality that has widespread appeal. At
times of technological disruption, the forces of dynamic competition
can play an especially important role. The Netscape browser and the
cross-platform Java technology separately and in combination had the
potential to develop into an alternative platform for application
programs that could run on any operating system and which could
transform PC operating systems into a commodity business. Bill
Gates, in his memorandum of May 26, 1995 on the "Internet
Tidal Wave," described just this sort of dynamic competitive
threat when he realized that, if successful, Netscape could
"commoditize" the operating system.
19. There is no easy method by which an economist can determine
exactly how significant a threat Java and Netscape actually
represented to Microsoft's operating system monopoly. A precise
determination of whether Netscape and Java could have succeeded in
eroding Microsoft's monopoly power absent Microsoft's illegal
conduct would require a counterfactual analysis that addressed a
variety of complex interrelations. However, even without this kind
of analysis, we have evidence that a reasonably expert onlooker felt
the threat was serious, namely, the statements and behavior of
Microsoft. Bill Gates, in his memorandum on the "Internet
Tidal Wave," explained:
A new competitor "born" on the Internet is Netscape.
Their browser is dominant, with 70% usage share, allowing them to
determine which network extensions will catch on. They are pursuing
a multi-platform strategy where they move the key API into the
client to commoditize the underlying operating system .... One scary
possibility being discussed by Internet fans is whether they should
get together and create something far less expensive than a PC which
is powerful enough for Web browsing.
20. In the same memorandum, Gates made clear that he understood
how Microsoft should leverage its Windows advantage to bolster its
Internet position:
We need to move all of our Internet value added from the Plus
pack into Windows 95 as soon as we possibly can with a major goal to
get OEMs shipping our browser preinstalled. This follows directly
from the plan to integrate the MSN and Internet clients. Another
place for integration is to eliminate today's Help and replace it
with the format our browser accepts including exploiting our unique
extensions so there is another reason to use our browser.
21. To summarize, in an industry marked by network
externalities, there is a strong tendency to monopoly (at least when
the dominant platform is proprietary or closed). The consumer
welfare and efficiency losses associated with monopoly are well
known, but the one most relevant here is the decreased incentive to
technological innovation. It is all the more important to encourage
what may be called dynamic competition, the entry of new firms and
new products. At certain periods, whether due to technological
innovation or to a transient situation in which the tendency to
monopoly has not yet worked to its completion, the market will be
confronted with alternative lines of development; Netscape Navigator
and Java as against Microsoft products in 1995, client-server
networks and web services today. At these periods, there may be
opportunities for a new platform to compete with and possibly take
over from the existing one. In view of the strong tendency to
monopoly in this industry (because of network externalities), it is
all the more important to keep the competition as viable as possible
when the opportunity presents itself. In particular, illegal
anticompetitive steps by existing monopolists should be prevented to
the maximum extent possible. Such a policy prevents the stagnation
of existing monopolists and encourages the expansion of the number
of alternatives among which the buyers can choose.
III. MICROSOFT DEFEATED THE THREAT POSED BY NETSCAPE AND JAVA
A. MICROSOFT'S ILLEGAL PRACTICES
22. Microsoft made a concerted effort to eliminate the threat
from middleware competition. Microsoft was found to have engaged in
illegal conduct exactly at the moment that dynamic competition might
have flourished. As the DC Circuit concluded, Microsoft took illegal
steps to exclude the middleware threat, and in particular, took
anticompetitive actions directed against Netscape Navigator and
Java. In particular, the DC Circuit judged illegal significant
elements of Microsoft's strategy:
a) By barring original equipment manufacturers
("OEMs") from removing access to Microsoft's Internet
Explorer ("IE") browser from the Windows desktop,
Microsoft prevented many OEMs from installing Navigator or other
browsers, and that in turn protected Microsoft's OS monopoly by
reducing potential middleware competition. This violated Sec. 2 of
the Sherman Act.
b) By preventing OEMs from altering the initial boot sequence
for Windows, Microsoft prevented OEMs from promoting Internet access
providers, many of whom were using and distributing Navigator to
their customers. Again, this reduced competition with IE and
protected Microsoft's OS market power in violation of See. 2.
c) Through commingling software code for Windows with that of
Internet Explorer, Microsoft deterred OEMs from installing
Navigator. That, in turn, reduced Navigator's usage share, and
thereby protected the applications barrier to entry by reducing
developer's interest in the APIs exposed by Navigator. Microsoft
also removed Internet Explorer from its Add/Remove utility, further
entrenching Internet Explorer and further discouraging OEMs from
distributing Navigator. The DC Circuit found these actions to be
anticompetitive and to support a finding of liability for
exclusionary conduct and therefore monopolization under Section 2.
d) By entering into contracts with Internet access providers
that foreclosed Navigator's access to an economically significant
share of the Internet access provider ("IAP") market,
Microsoft engaged in exclusionary conduct in protection of its OS
monopoly, again in violation of See. 2.
e) By entering into contracts with independent software vendors
that required those independent software vendors
("ISVs") to use Internet Explorer if the ISV need web
display, Microsoft further foreclosed distribution of Navigator,
again in protection of its OS monopoly, in violation of See. 2.
f) By entering into an exclusive distribution contract with
Apple for Internet Explorer after Microsoft had threatened to cancel
the Macintosh version of Office, Microsoft engaged in exclusionary
conduct in protection of its OS monopoly in violation of Sec. 2.
g) Through a number of exclusionary actions directed at Java,
Microsoft limited Java's viability as a cross-platform threat and
did so in violation of Sec. 2. Those actions included: limiting
distribution of "write once, run anywhere" JVMs directly
through exclusionary contracts with ISVs and indirectly through
Microsoft's actions against Netscape; deceiving developers who
wanted to develop pure Java code into writing code with Windows-
specific extensions that would make the code Windows dependent; and
threatening Intel and inducing it to stop developing Intel
multimedia software for Java.
B. THE STATE OF THE MARKET TODAY
23. As of 1995, Microsoft's share was of the installed base of
PC operating systems was 87%,\4\ while its share of the Internet
browser market was less than 5%.\5\ Today, those figures stand at
92% for PC operating
[[Page 29016]]
systems \6\ and 91% for browsers.\7\ Thus Microsoft's position
in PC operating systems remains strong, while its share in Interact
browsers has risen dramatically.
---------------------------------------------------------------------------
\4\ Dataquest, "All Platform Operating Systems Sales
History and Forecast Summary," Table 12 (Mar. 1997).
\5\ "Microsoft v Netscape: Freer than Free,"
The Economist (Aug. 17, 1996, U.S. Edition).
\6\ IDC, "Worldwide Client and Server Operating
Environments, Market Forecast and Analysis, 2001-2005"
(Aug. 2001).
\7\ "AOL Files Suit Against Microsoft For Damages
Inflicted on Netscape," Wall Street Journal (Jan. 23, 2002)
(citing data compiled by WebSideStory, a market research firm).
---------------------------------------------------------------------------
24. Microsoft's illegal practices were successful in helping to
minimize the threat that middleware posed for the creation of a
programming environment outside of Microsoft's control. I am aware
of no middleware today that poses a risk to Microsoft comparable to
that posed by Navigator and Java in 1995. Nor does the government's
Competitive Impact Statement suggest that such a threat exists today
or is likely to emerge over the five-year duration of the PFJ.
C. MICROSOFT'S MIDDLEWARE ADVANTAGES
25. Microsoft today has substantial advantages in middleware
that make it unlikely the market itself will generate new entrants
into middleware capable of re-creating the competitive risk faced by
Microsoft in 1995. As noted earlier, through its control over
Windows, Microsoft has had and under the PFJ will continue to
have--an enormous advantage in the distribution of software
that is complementary to Windows. Since every new PC ships with
Windows, Microsoft has a very easy way to get software into the
hands of users: it can include it with the operating system.
Microsoft can simply bundle the middleware with Windows or it can
integrate the code into Windows itself.
26. This ensures the ubiquity of Microsoft middleware and
operates as a harrier to entry for competing middleware. Any entrant
would have to make a substantial investment to achieve comparable
widespread distribution. A firm considering entry should understand
that its inability to guarantee a universally exposed set of APIs
means that, all other things equal, developers would prefer to write
to the APIs exposed by Microsoft middleware. The ubiquity of
Microsoft middleware and its ability to integrate middleware into
Windows--which the PFJ does not constrain--therefore
operate as economic disincentives for the development of competing
middleware by potential entrants.
27. Microsoft also has complete freedom in how it prices its
middleware. In bundling middleware with Windows, Microsoft need not
charge an incremental price for the middleware. It can simply fold
into the price of Windows whatever price it would charge for the
middleware were it distributed separately. This would not be an
option available for a potential entrant who will expect that it
would need to establish a separate, discrete positive price for any
middleware that it might create. The ability of Microsoft to set an
apparent price of zero for its middleware operates as a barrier to
entry in middleware.
28. Even if competing middleware were created, the ubiquity of
Microsoft middleware would operate as a direct barrier of the
distribution of that middleware. As the DC Circuit affirmed, OEMs
are reluctant to install two products that perform the same
function, as this raises support costs. Twice as many products will
be supported for the same function, plus consumers may be confused
by the presence of both products.
29. Moreover, Microsoft's ability to "embrace and
extend" any middleware created by an entrant also operates as
a barrier to entry. Again, it will take a substantial amount of time
for an entrant to distribute innovative middleware. During that
time, Microsoft will likely be able to imitate that middleware and
distribute "updated" versions of Microsoft middleware
over the Internet to end users through its Windows Update feature.
Given this, entry into middleware is less likely and this may reduce
innovation in and development of middleware.
30. In sum, Microsoft took substantial steps to eliminate the
threat posed to it by Netscape and Java. The DC Circuit affirmed
that a substantial number of those actions constituted impermissible
monopoly maintenance and therefore monopolization in violation of
Section 2 of the Sherman Act. Today, Microsoft's illegally
maintained monopoly operates as a substantial barrier to new entry
into middleware. The monopoly operates as a disincentive for entry
and thereby likely reduces innovation in middleware. Given this
market structure, it is highly unlikely that market forces alone
will lead to the development of innovative middleware that creates
the same competitive risk to Microsoft that it faced from Navigator
and Java in 1995.
IV. THE RESTRICTIONS ON MICROSOFT'S BEHAVIOR CONTAINED IN PFJ
ARE INSUFFICIENT TO RESTORE THE COMPETITIVE THREAT THAT MIDDLEWARE
POSED IN 1995
31. No remedy can turn back the clock to 1995 and re-create the
competitive threat that existed at that crucial time of
technological disruption. Technological disruptions of the magnitude
that Bill Gates called "the Interact tidal wave" cannot
be created by judicial proceedings. Even so, one of the objectives
of the remedies should be to attempt to restore, to whatever extent
possible, the possibility of competition in the market where the
illegal monopoly was maintained (i.e., the market for PC operating
systems). The restrictions on Microsoft's behavior in the PFJ fall
well short of this objective.
A. PROBLEMS WITH THE M1DDLEWARE REMEDIES
32. Following its years of illegal conduct, Microsoft's position
in the core middleware products (Internet browsers and Java
technology) is totally different today than it was in 1995.
Microsoft has a dominant share of the browser market, IE has caught
up to and surpassed Navigator's technical capabilities, and the
prospect of large numbers of desktop applications written in
"write once, run anywhere" Java seems remote.
33. There are two features of the industry that made the threat
from Netscape and Java so significant First, the technological
disruption of the Internet made the functionality of the browser
sufficiently important that it could become a platform for large
numbers of applications. Second, the head start that Netscape and
Java had over Microsoft middleware provided a substantial first-
mover advantage, a particularly important element for competitive
success in network industries prone to "tipping."
Probably the only chance a competitor has to overcome the inherent
advantages that Microsoft has in distribution is to create a large
installed base of users before Microsoft can develop and launch a
competitive product.
34. The market position that Microsoft has today makes it
difficult for any set Of conduct remedies to lead to significant
middleware competition. Neither the PFJ nor any other set of conduct
remedies can re-create the technological disruption or competitive
head start that existed before Microsoft acted illegally. However,
for the reasons explained below, the middleware remedies in the PFJ
seem especially likely to he ineffective.
1. The Reliance in the PFJ on OEMs to Distribute Competing
Middleware
35. The PFJ relies heavily on competition in the OEM
distribution channel as the key mechanism for overcoming the
competitive harm created by Microsoft's actions. The same was true
in the government's prior settlement with Microsoft, as I noted in
my 1995 declaration: Despite the importance of natural advantages
[referring to the installed base discussion above] in the market for
IBM-compatible PCs, the complaint and proposed remedies addressed
competitive issues that are critical to the success of new
competition in this market. The most effective and economic point of
entry for sales of IBM-compatible PC operating systems is the OEM
distribution channel. New operating system software products should
have unimpeded access to this channel. The Government's complaint
and proposed settlement provide needed relief to facilitate the
entry of new competitors, such as IBM's OS/2.
36. Seven years later, it is clear that little was accomplished
in the prior consent decree in relying on the OEM channel to
facilitate competition in PC operating systems. Unimpeded access to
this channel may indeed he necessary for effective competition.
However, it is far from sufficient to create effective competition
for middleware given the current state of the industry.
37. One obstacle to competition in middleware, which the PFJ
does not address, is the applications barrier that now protects the
position of Microsoft middleware. ISVs have a strong incentive to
write applications to Microsoft middleware, since Microsoft
middleware will be present on every Windows machine that is shipped.
The PFJ does not restrict Microsoft's ability to commingle code and
include middleware APIs in with its Windows operating system. The
PFJ permits OEMs to remove Microsoft middleware icons, but the
middleware itself, and its associated API set, will remain. Thus,
the ubiquity of Microsoft's middleware will encourage ISVs to write
applications to these APIs.
38. The PFJ restricts Microsoft's ability to discriminate
against OEMs that also ship
[[Page 29017]]
competing middleware, but this does not create an incentive for OEMs
to ship competing middleware. For the reasons explained by the
District Court and the Court of Appeals, OEMs are reluctant to
include software that provides similar functionality to other
software on the machine--it increases confusion among users and
raises support costs.
39. If ISVs do not write applications to the competing
middleware, OEMs will not distribute it. If OEMs do not distribute
it, ISVs will not write applications to it. The current dominance of
Microsoft middleware thus makes it very unlikely that this circle
can be broken by the non-discrimination restrictions in the PFJ.
40. The PFJ also seeks to increase the role of OEMs in defining
the Windows desktop. This is also insufficient to create significant
middleware competition. Even if OEMs had complete control over the
icons that would appear on the Windows desktop---and they would
not under the PFJ--this would not alter in any way the software
that would actually be present on the computer. Removing an icon
from the desktop just removes the most obvious point of consumer
access to the software, but the ability of ISVs to write to the APIs
presented by the software remains unchanged.
41. The PFJ also attempts to prohibit Microsoft from
discriminating against OEMs that distribute competing middleware. It
does this by requiring Microsoft to provide uniform licensing terms
to the 20 largest OEMs and preventing specific retaliation against
OEMs that distribute competing middleware. It is not clear to me
that these restrictions are sufficient to prevent Microsoft from
exercising influence over the behavior of OEMs towards products that
compete with Microsoft. First, I understand that the non-
discrimination provisions apply only to certain Windows desktop
operating systems (Windows XP and Windows 2000 Professional) and not
to other Microsoft products that an OEM might purchase. Second, the
relationships between Microsoft and OEMs are complex and multi-
faceted. For example, Microsoft provides marketing and promotion
support to OEMs; its provides technical assistance; its provides
allowances for product development Microsoft may provide these
services differently to OEMs. Since the PFJ does not prohibit all
forms of discrimination across OEMs, Microsoft may have sufficient
ability to influence OEM decision-making.
42. The PFJ also contains limited disclosure requirements. The
exact scope of these disclosures depends on careful interpretation
of the complex language of the PFJ. I do not attempt such an
interpretation but comment only on the limited impact of the
disclosure remedies under any reasonable interpretation. There is a
requirement to disclose interfaces that permit competing middleware
to interoperate with Windows operating systems. I understand,
however, that Microsoft is only required to make these disclosures
if the interface is already in use by a Microsoft middleware
product. A disclosure requirement limited in this manner pushes
potential middleware competitors in the direction of "me
too" products and does little to create incentives for
significant innovation in middleware.
2. IE Open Source and Java Must-Carry
43. There are alternative middleware remedies that could have a
more significant effect. More aggressive remedies with respect to
that middleware threat would be open source Internet Explorer and a
requirement for Microsoft to distribute the most current version of
the standard Java runtime environment with IE and Windows. Even
these remedies are likely to be insufficient to turn back the clock
to the level of competition that existed before Microsoft's illegal
conduct. But they are likely to have more impact than the remedies
in the PFJ.
44. Open source IE is the most effective way to fully expose the
links between IE and Windows as well as the IE APIs. This creates
the possibility of interoperability between competing products and
it furthers the possibility of operating system competition. It also
allows anyone who wants to develop a competitive browser to be fully
compatible with applications that are written to IE APIs. This way
it limits the extension of the applications barrier to entry created
by Microsoft's dominance in the browser.
45. The Java must-carry remedy works to erode the application
barrier to entry by helping to overcome reluctance of ISVs to
develop programs that require Java on the client. It is only by
assuring sufficient ubiquity of Java and browser functionality that
there is any chance that Microsoft may lose control of the
applications barrier through competing middleware.
B. INATTENTION TO THE APPLICATIONS BARRIER TO ENTRY
46. The applications barrier to entry identified by the DC
Circuit consists in part of the large number of applications
available on the Windows platform. As discussed above, successful
entry in middleware of the type commenced by Netscape Navigator and
Java could have substantially eroded the applications barrier to
entry and facilitated entry into the operating systems market
47. Microsoft controls the most economically important set of
applications in its Microsoft Office suite. Office accounts for
nearly 30% of Microsoft's annual revenue.\8\ Software suites
consisting of personal productivity applications such as word
processing, spreadsheets, presentation software, electronic mail,
and calendar and contact management constitute a distinct and
relevant product market. Microsoft's share of that market today is
in the mid-90s \9\ and Microsoft almost certainly holds
substantial market power.
---------------------------------------------------------------------------
\8\ Dresdner Kleinwort Wasserstein, "Microsoft
Corporation," Figure 4 (1 Aug. 2001).
\9\ In 1999, Microsoft accounted for 96.1% of the revenues
of office suites designed for Windows. Since 98.1% of all sales of
office suites in 1999 were for the Windows platform, these figures
by themselves imply an industry share of 94%. But Microsoft also
accounted for a large share of the revenues of office suites
designed for Apple's Macintosh OS--a platform that accounted
for nearly all of the non-Windows sales of office suites. IDC Office
Suite Market Review and Forecast, 1998-2003 (Aug. 1999).
---------------------------------------------------------------------------
48. As found by the DC Circuit, Microsoft has used its control
over Office to maintain its OS monopoly. Microsoft threatened to
cancel the Macintosh version of Office if Apple did not distribute
Internet Explorer, Microsoft's Internet browser. It is clear that
Microsoft's ability to make such threats would be diminished if
Microsoft had an obligation to license the rights to port Office to
competing OS platforms.
49. Since remedies focused entirely on middleware will not re-
create the threat to Microsoft's monopoly power in PC operating
systems that existed prior to Microsoft's illegal conduct,
additional actions need to be taken to ensure that Microsoft does
not benefit from its illegal conduct. These additional actions
should be targeted at further reducing the underlying source of
Microsoft's market power, namely the applications barrier to entry.
Porting Office to other platforms would be a remedy of this type
that could have a significant impact on the applications barrier.
One factor that limits the demand for Unix workstations, which have
computational advantages over Intel-based PCs, is the inability to
interoperate with Office. The thin-client model of computing, where
most computing occurs on the server, not the client, represents one
of the most important threats to Windows desktop computing. The
switching costs of adopting new personal productivity software with
files not compatible with Office represents a significant barrier to
Unix-based thin client networks. A requirement to license the rights
to port Office may be one of the most effective ways to create
competition for Windows, something which can probably no longer be
achieved by remedies exclusively related to middleware.
C. PROBLEMS WITH THE ENFORCEMENT MECHANISM
50. The remedies in the PFJ are too limited in scope to re-
create past competitive conditions even if they are enforced
perfectly. However, the enforcement mechanisms in the PFJ are far
from perfect and will likely lead to delays and costs that further
limit the effectiveness of the remedies. The PFJ relies on a
technology committee to oversee Microsoft's compliance with the PFJ.
The membership in the committee is controlled 50% by the company
whose past illegal activities have been the subject of the Circuit
Court's decision. The committee lacks both resources and the power
to enforce the PFJ. The committee must rely on information provided
to it by Microsoft and has tittle ability to engage in its own
investigations. Furthermore, if it uncovers a violation, it must
rely on lengthy litigation to enforce it.
51. The implication is that failures by Microsoft to comply may
go undetected and if they are detected, it may take a great deal of
time and effort to impose a change on Microsoft's behavior. Delays
can greatly limit the effectiveness of any particular remedy in a
dynamic industry subject to network effects. If enforcement will be
ineffective, it may create an incentive for Microsoft to violate the
terms of the decree.
52. Other consent decrees have used special masters with
sufficient resources and expedited judicial review to enforce their
terms. Given the complex, dynamic nature of
[[Page 29018]]
the software industry, it is especially important that the resources
are in place to monitor the terms of the decree and that swift
enforcement is possible.
V. APPROPRIATE REMEDIES SHOULD NOT ALLOW MICROSOFT TO PROTECT
ITS ILLEGALLY MAINTAINED MONOPOLY AGAINST CURRENT AND FUTURE
COMPETITION FROM OTHER MARKETS
53. The PFJ focuses on the PC desktop as the central space in
which competition will take place going forward. It does this by
creating limited new operating fights for OEMs covering the
appearance of the desktop and greater protections for installing
middleware that competes with Microsoft. As I have discussed above,
given the substantial advantages in middleware that Microsoft has
through its illegally maintained monopoly, I think that it is
unlikely that these desktop-oriented remedies will spur economically
meaningful entry in middleware and that there is therefore little
reason to think that those remedies will re-create the competitive
risk Microsoft's desktop monopoly faced from middleware entrants in
1995.
54. The PFJ therefore needs to be augmented with remedies that
take a forward-looking approach. The PFJ needs to focus on the
current and future threats to Microsoft's market power and ensure
that Microsoft is not allowed to use its illegally maintained
monopoly in PC operating systems to dilute these current and future
competitive threats. A PFJ focused on desktop remedies not only will
not jump start competition now, but by allowing Microsoft to keep
the benefits of its illegal activities, such remedies will fail to
deter future illegal anticompetitive actions by Microsoft. Instead,
additional remedies should naturally be directed at ensuring
competition going forward uninfected by Microsoft's illegally
maintained monopoly. In particular, these remedies should seek to
re-create the same risks faced by Microsoft in 1995 when the
middleware threat arose.
A. FUTURE COMPETITION IN SERVERS AND WEB SERVICES
55. A forward-looking remedy should seek to limit Microsoft's
ability to use its illegally maintained monopoly power to bias
competition in complementary products that have the potential to
develop into substitutes for desktop computers. Server operating
systems and Web services are two prime examples. These products
intersect at the middle of two related trends. To date, the Internet
has been a PC Internet. Most Internet users access the Internet
through a PC or workstation. The first trend is a probable shift to
the use of many devices to access the Internet, including cell
phones, handhelds such as the Palm Pilot and other personal digital
assistants, and thin clients. As these devices themselves are not as
powerful as a typical PC, they will demand more work from the
servers and server operating systems delivering the information. The
implication is that, in the future, a significant amount of
computing will bypass the desktop--which in turn implies that
Microsoft has an incentive (if it can) to extend its monopoly from
the desktop into servers.
56. The second trend is a related shift in how software is owned
and managed. Prior to the Internet, PC software and content was
largely locally owned and locally managed. The software was
installed directly on the user's PC, from a floppy disk and then
later a CD. The rise of the Internet makes it possible to move the
location of software off of the PC and onto a remote device---a
server--with much of the work done remotely. This gives rise to
the generalized notion of a web service, where software is no longer
a thing like a CD but instead a service delivered to a connecting
device, much the way electricity is delivered to many devices.
57. On November 29, 2001, Steve Ballmer, Microsoft's CEO,
discussed these trends and how Microsoft was approaching them
through its .NET initiative:\10\
---------------------------------------------------------------------------
\10\ S. Ballmer speech, Credit Suisse First Boston
Technology Conference (Nov. 29, 2001) (http://www.microsoft.com/
msft/speech/BallmerCSFB112901.htm).
---------------------------------------------------------------------------
About three years ago we changed the vision of our company.
Instead of talking about a computer on every desk and in every home
we started talking about empowering people through software anytime,
any place, any device .... It starts with a view, which came to us
quite clearly about five, almost six years ago now that XML
[eXtensible Markup Language] would really be the transforming
industry phenomenon of the next five years. If it was the PC 20
years ago and graphical user interface 10 or 15 years ago and the
Internet five or six years ago, it's XML. And I'm not going to give
a long description, but I think the way you should think about it is
XML will be the Lingua Franca of computing. It will be the basis on
which systems work better with systems, people with people,
businesses with businesses, businesses with consumers. It will
improve the level of integration and connectivity. It gives us a
framework at least for the software community to build the software
that allows that ..... NET is our platform to let people take
advantage of the XML revolution.
58. Ballmer also discussed the Microsoft business model and how
.NET fits within it. He sees Microsoft as targeted on seven business
areas, including, unsurprisingly, PC operating systems, PC
productivity solutions "anchored" by Office, and server
software for building and deploying these applications. All of these
are now being organized around .NET: I think you could say we are a
company that invests in seven businesses around one platform. That
platform is .NET..NET is our platform for the next technology
revolution that is going on. And that is the shift to the XML web
service model as the fundamental way of building and deploying
software..NET is our platform to do that .... That's how we think
about the seven business areas in which we are investing. They're
all being re-platformed or re-plumbed around .NET and XML web
services.
59. A computing world in which Web services, hosted on servers,
are delivered on demand over the Internet is a world that has
negative implications for Microsoft's near-monopoly in desktop
operating systems. In such a world, there is no longer the same need
for desktop computers to have "fat" operating systems
such as Windows. In many respects, the Web services model is simply
a more developed version of the thin-client, "network
computer" model advocated by Oracle and Sun in the mid/late-
1990s. As such, the Web services model is a threat to Microsoft's
desktop monopoly and Microsoft therefore has an incentive (if it
can) to use its existing monopoly to gain control over this possible
threat. It has an incentive to ensure that Windows remains at the
center of the Web services model and/or to migrate its monopoly from
the desktop to Web services.
B. MICROSOFT IS ATTEMPTING TO PROTECT ITS EXISTING MARKET POWER
BY USING ITS ILLEGALLY MAINTAINED MONOPOLY IN PC OPERATING SYSTEMS
TO GAIN ADVANTAGES IN SERVERS AND WEB SERVICES
60. Microsoft's illegally maintained monopoly in the market for
PC operating systems provides it with important advantages in server
operating systems, in particular operating systems for workgroup
servers. Workgroup servers are the servers in a "client-
server" network that interoperate directly with desktop
clients. Workgroup servers provide services such as authentication
and authorization, directory, and file and print. Very importantly,
they are also the point of contact or gateway between an
organization's network of servers and the Internet. Workgroup
servers are distinct from enterprise servers, which are more
powerful, reliable and expensive servers that handle databases and
other "mission critical" applications.
61. Some of Microsoft's advantages in workgroup server operating
systems arise because of the distribution advantage provided by its
monopoly in PC operating systems. Suppose a vendor of workgroup
operating systems develops a new feature (such as a new directory
service for keeping track of the users and resources on a network or
a new security system for authentication and authorization). In the
usual case, the network cannot make use of the new service in a
server operating system unless certain new code (supplied by the
vendor of the server operating system) is also installed on the
clients in the network. In large networks, this can be a costly and
time-consuming exercise--unless the network is running Windows
on its servers. A network that runs Windows on its servers does not
face this kind of problem because Microsoft ensures that the client-
side pieces of server-side technologies are built into its Windows
desktop operating system. This gives Microsoft a competitive
advantage over other vendors of workgroup server operating systems.
But it is an advantage that derives from Microsoft's illegally
maintained monopoly in PC operating systems. Moreover, there may be
significant long-run costs through the adverse effect that
Microsoft's distribution advantages (derived from its illegally
maintained monopoly in desktop operating systems) may have on
incentives to invest in server-side innovation.
62. There are other ways in which Microsoft's past illegal
conduct has provided it with advantages today in the market for
workgroup server operating systems--advantages that help
protect and enhance Microsoft's existing market power. For
[[Page 29019]]
example, one of the benefits to Microsoft from the defeat of
Netscape's browser was the resulting reduction in demand for
Netscape application programs for servers. These server-side
applications were designed to interoperate with the Netscape browser
and certain client-side applications, such as e-mail, written to the
Netscape Navigator APIs. Unlike Microsoft's server-side applications
(such as Exchange) that run only on Windows, Netscape's server-side
applications were implemented on multiple platforms, including Unix
and Novell's NetWare. As Netscape's share of the browser market
declined following Microsoft's illegal conduct, the demand for
Netscape's server applications also declined. Thus a consequence of
Microsoft's illegal conduct has been an increase in the demand for
Microsoft server-side applications such as Exchange that, as
mentioned above, run only on Windows server operating systems. Put
differently, Microsoft's past illegal conduct towards Netscape is
helping Microsoft establish an applications barrier that will
protect and enhance its future position in the market for workgroup
server operating systems.
63. Another way in which Microsoft's past illegal conduct
affects the market for workgroup operating systems today involves
distributed application programs. As I mentioned before, Java is a
programming language with features that I understand make it well
suited for distributed applications, i.e., applications that call
upon resources located on multiple different computers located
around a network. As I understand it, for distributed applications
to work, they need to conform to a particular set of protocols, and
these protocols need to be supported by the operating systems of the
computers involved in executing the distributed application. Java
had protocols for distributed applications (RMI and CORBA) that were
supported by multiple operating systems. Microsoft had an
alternative, proprietary set of protocols called DCOM. By
interfering with the development of cross-platform Java, Microsoft
gave an advantage to its framework for distributed applications
(DCOM) and promoted the development of distributed applications
written to protocols that run only on Windows operating systems. In
addition, since the programs that are written to these Microsoft
protocols are targeted for computers using the Windows operating
system, such programs also make use of Windows APIs. This means that
even if rival operating systems were given the ability to support
DCOM, they could not run most of the distributed applications
written to this protocol because these applications also make use of
Windows APIs. Thus this is another example of how Microsoft's past
illegal conduct, this times towards Java, is helping Microsoft
establish an applications barrier that will protect and enhance its
future position in the market for server operating systems.
64. Microsoft's past illegal conduct has also given it
advantages today in Web services. For example, one of the Web
services that Microsoft has promoted heavily is Passport, its
Internet authentication and authorization service. In a network
environment, key issues are verifying the identity of users or
computers ("who are you?") and determining the resources
to which you are entitled to have access ("what are you
authorized to do?"). Passport is an authentication and
authorization service targeted, at least initially, at e-commerce.
Consumers who subscribe to Microsoft's Passport service will have
their name and credit card information on file on servers controlled
by Microsoft. E-commerce vendors who participate in Passport will
have back office connections with the Microsoft servers so that,
when a consumer who subscribes to Passport wants to purchase
something, the e-commerce vendor can check with Microsoft's Passport
servers to authenticate and authorize the purchase (and debit the
consumer's credit card). The theory is that Passport will simplify
e-commerce transactions.
65. For Passport to be successful, Microsoft needs to have a
large base of consumers who subscribe to the service. A large base
of consumers will make firms engaged in e-commerce interested in
joining Passport on the vendor side, which in turn will make
Passport more attractive to consumers. Thus there are potential
network effects which, if they get started, may result in Passport
being in the middle of a very large volume of Internet transactions.
66. Microsoft is actively using its illegally maintained
monopoly in PC operating systems as a vehicle for enrolling
consumers in Passport. Every time a consumer boots up a new copy of
Windows, the consumer is asked multiple times whether he or she
would like to sign up with Passport. In addition, the consumer is
told that he or she will not receive information about product
upgrades unless the consumer signs up for Passport. Thus this is an
example in which Microsoft is using the distribution advantages that
it has by virtue of its illegally maintained monopoly in PC
operating systems to gain advantages in Web services. In so doing,
Microsoft helps protect its existing monopoly power and/or helps
migrate its market power from the desktop to Web services.
C. THE PFJ GIVES INSUFFICIENT ATTENTION TO FUTURE COMPETITION
67. The implications of these trends are significant.
Microsoft's monopoly in desktop operating systems provides it with
advantages in adjacent markets that Microsoft is able to use to
protect and enhance its illegally maintained monopoly power. By
migrating its monopoly from desktop operating systems into server
operating systems and Web services, Microsoft can help ensure that
its future market power is comparable to (or greater than) the
market power it possessed when the desktop was the principal hub of
computing activity.
68. Given these links between Microsoft's past illegal conduct
and Microsoft's future market power, an appropriate remedy should be
focused on limiting Microsoft's ability to use its illegally
maintained monopoly to gain advantages in products in other markets
that have the potential to become substitutes for the Windows
desktop operating system. Disclosure remedies have the potential to
be an important step in this direction. For example, if Microsoft
were required to fully disclose the interfaces and protocols used by
its server and client operating systems, then vendors of non-
Microsoft server operating systems could design their products so
that they could interoperate smoothly in networks populated by
Windows clients and servers. The resulting competition among vendors
of server operating systems would help ensure that servers remain a
threat to Microsoft's illegally maintained monopoly in desktop
operating systems.
69. The PFJ does not ignore completely issues related to
adjacent markets. The PFJ does require disclosure for communication
protocols that allow for servers to interoperate with Windows
operating systems. This requirement, in contrast with the other
provisions of the PFJ, appears to focus more on the server operating
system market than competition in middleware. I understand, however,
that the disclosure requirements proposed in the PFJ are exceedingly
narrow mad ultimately inadequate to allow full and equal
interoperability for competitive server operating systems or Web
services architectures.
70. In designing disclosure remedies (or any other remedy), it
is important to remember that one is try to cure the consequences of
past illegal conduct. As a result, there is no reason to be troubled
by remedies that impose obligations that one would be reluctant to
impose on other firms. Against this background, it seems reasonable
to consider a remedy that requires disclosure sufficient to allow
competitive products to interoperate with Microsoft software on an
equal basis as Microsoft's own products. It is not clear that even
this would be enough to offset the advantages that Microsoft has
gained for itself in adjacent markets through past illegal conduct
and which serve to protect and enhance its existing market power.
But it seems like a reasonable step.
VI. SUMMARY OF CONCLUSIONS
71. As the DC Circuit found, Microsoft violated Sec. 2 of the
Sherman Act in impermissibly maintaining its monopoly through
actions designed to eliminate the threat to that monopoly posed in
the mid 1990s by competition from Netscape Navigator and Java
middleware. Given that finding, the remedies in this case should
eliminate the benefits to Microsoft of its illegal conduct; should
restore, if possible, the possibility of competition in operating
systems; and should not allow Microsoft to protect its illegally
maintained monopoly from current and future competition in related
markets, such as server operating systems and Web services. In my
opinion, the PFJ fails to accomplish these objectives.
72. The PFJ focuses on the desktop and on re-creating the
possibility for middleware competition by giving OEMs freedom with
regard to icon display and more limited freedom in installing and
using non-Microsoft middleware. In doing so, it ignores the reality
that Microsoft's market position in browsers and other middleware is
substantially stronger today than it was in 1995. I know of no
competing middleware today--and none is suggested in the
Competitive Impact Statement--that begins to enjoy the time-to-
market and market
[[Page 29020]]
presence advantages held by Netscape Navigator and Java in the mid-
1990s. The PFJ does nothing to address the powerful distributional
advantage that Microsoft alone has and which ensures that its
middleware will be ubiquitous. That ubiquity operates as an
unchecked barrier to entry and reduces the incentive for others to
create innovative, competitive middleware. I therefore see no reason
to think that the PFJ will succeed in spurting a new middleware
threat to the Microsoft operating system or in denying Microsoft the
fruits of its illegally maintained monopoly.
73. The PFJ ignores remedies that could have a more significant
effect in middleware markets, in particular, remedies that require
Internet Explorer to be open source and that require Microsoft to
distribute the most current version of the Java runtime environment
with IE and Windows. Although these remedies are unlikely to fully
restore the competitive threat posed by middleware before
Microsoft's illegal activities took place, these remedies would
likely have a greater impact than those set forth in the PFJ.
74. More fundamentally, the PFJ does nothing to address the
applications barrier to entry that defines Microsoft's monopoly in
PC operating systems. Microsoft also controls the most economically
important set of applications for Windows through its control over
Microsoft Office. As the DC Circuit found, Microsoft used that
control to protect its operating system monopoly through threats
against Apple. It is clear that Microsoft's ability to make such
threats would be diminished if Microsoft has an obligation to
license the rights to port Office to competing operating systems.
Indeed, porting Office to other operating systems is a remedy that
could have a significant impact on the applications barrier to
entry.
75. In addition, the PFJ should focus on the current and future
threats to Microsoft's market power and ensure that Microsoft cannot
use its illegally maintained monopoly to stifle such threats. This
case makes clear that those threats are likely to come from products
that are complements to Windows in the short run and potential
competitors in the long run. That was precisely the position of
Netscape Navigator and Java in 1995; today, based on Microsoft's
public statements, that may be the position of server operating
systems and Web services. Both of these represent a move away from a
computing structure organized around desktop computers using
"fat" operating systems such as Windows. Server
operating systems and Web services represent an evolution of the
thin-client model of computing, and as such, represent a threat to
Microsoft's desktop monopoly. Microsoft is currently attempting to
defeat this threat by using its illegally maintained monopoly in PC
operating systems as a vehicle for expanding its market share in
servers and attaching consumers to its Web services infrastructure.
The PFJ is missing forward-looking remedies that address such
efforts by Microsoft to protect and enhance its existing market
power by using its illegally maintained monopoly in PC operating
systems to defeat competitive threats in adjacent markets. This is a
significant hole in the PFJ that bears on the future of competition
in the computing industry.
I hereby affirm under penalty of perjury that the forgoing is
true and correct to the best of my knowledge, information and belieu
Executed this 25th day of January, 2002 in Palo Alto, California.
Kenneth J. Arrow
BIOGRAPHICAL SKETCH
KENNETH J. ARROW
Personal
Born: 23 August, 1921
Wife's name: Selma
Children: David Michael and Andrew Seth
Education
B.S. in Social Science, City College, New York, 1940. Major:
Mathematics.
M.A., Columbia University, 1941. Field: Mathematics.
Ph.D., Columbia University, 1951. Field: Economics.
Positions
Captain, U. S. Army Air Corps, 1942-46 (Weather Officer).
Research Associate, Cowles Commission for Research in Economics,
1947-49.
Assistant Professor of Economics, University of Chicago,
1948-49.
Consultant, the RAND Corporation, 1948-date.
Acting Assistant Professor of Economics and Statistics, Stanford
University, 1949-50.
Associate Professor of Economics and Statistics, Stanford
University, 1950-53.
Professor of Economics, Statistics, and Operations Research,
Stanford University, 1953-68
Economist, Council of Economic Advisers, U. S. Government, 1962.
Visiting Professor of Economics, Massachusetts Institute of
Technology, Fall, 1966.
Fellow, Churchill College (Cambridge, England), 1963-64,
1970, 1973, 1986.
Guest Professor, Institute for Advanced Studies, Vienna, June
1964, June 1970.
Professor of Economics, Harvard University, 1968-74.
James Bryant Conant University Professor, Harvard University,
1974-79.
Joan Kenney Professor of Economics and Professor of Operations
Research, Stanford University, 1979 to 1991.
Senior Fellow by Courtesy, Hoover Institution on War, Revolution
and Peace, 1981-94.
Part-time Professor, European University Institute, 1986.
External Professor, Santa Fe Institute, 1988 to date.
Joan Kenney Professor of Economics Emeritus and Professor of
Operations Research Emeritus, 1991 to date
Fulbright Professor, University of Siena, Spring 1995.
Visiting Fellow, All Souls College (Oxford, England), 1996.
University and Faculty Administration at Stanford University
Executive Head, Department of Economics, 1953-6
Member and Chair, Executive Committee of the Academic Council
Acting Executive Head, Department of Economics, 1962-3
Member and Chair, Advisory Board
Member and Chair, Senate of the Academic Council
Director, Stanford Institute for Theoretical Economics,
1993-98
Director, Stanford Center on Conflict and Negotiation,
1993-5
Honors and Awards
Gold Pell Medal (highest grades), City College, New York, 1940.
Phi Beta Kappa.
Social Science Research Fellow, 1952.
Fellow, Center for Advanced Study in the Behavioral Sciences,
1956-57.
John Bates Clark Medal, American Economic Association, 1957.
LL.D. (honorary), University of Chicago, 1967.
M.A. (honorary), Harvard University, 1968.
Marshall Lecturer, Cambridge University, Spring 1970.
D.Soc/Eco.Sci. (honorary), University of Vienna, 1971.
LL.D. (honorary), City University of New York, 1972.
Nobel Memorial Prize in Economic Science, 1972.
John R. Commons Lecture Award, Omicron Delta Epsilon, 1973.
D.Sci. (honorary), Columbia University, 1973.
D.Soc.Sci. (honorary), Yale University, 1974.
Dr. (honorary), Universite Rene Descartes, 1974.
LL.D. (honorary), Hebrew University of Jerusalem, 1975.
LL.D. (honorary), University of Pennsylvania, 1976.
D.Pol.Sci. (honorary), University of Helsinki, 1976.
Member, National Academy of Sciences (Chairman, Section 54,
1976-1979, Council member 1990 to date).
Fellow, American Academy of Arts and Sciences (Vice President,
1979-80, 1991-94).
Member, American Philosophical Society.
Member, Institute of Medicine.
Foreign Honorary Member, Finnish Academy of Sciences.
Corresponding Member, British Academy.
Sigma Xi (President, Stanford Chapter, 1981-82).
Tanner Lecturer, Oxford University, Spring 1983.
2nd Class Order of the Rising Sun, Japan, 1984.
Tanner Lecturer, Harvard University, Spring 1985.
Dr. of Letters, University of Cambridge, 1985.
Dr. Honoris Causa, Universite d'Aix-Marseille III, 1985.
von Neumann Prize of The Institute of Management Sciences and
the Operations Research Society of America, 1986.
LL.D. (honorary), Washington University in St. Louis, 1989.
Clarendon Lectures, Oxford University, November 1989.
LL.D. (honorary), Ben-Gurion University of the Negev, 1992.
Member, Pontifical Academy of Social Sciences
Laurea (honoris causa) Universita Cattolica del Sacro Cuore
(Milan)
[[Page 29021]]
Dr. (hon causus) University of Uppsala, 1995.
Publication of Enduring Quality Award 1995, Association of
Environmental and Resource Economics (with Anthony C. Fisher)
Kampe de Feriet Award (Information Processing for Management
under Uncertainty), 1998
Medal of the University of Paris, 1998
Dr. (hon.) University of Buenos Aires, 1999
LL.D. (hon.) Harvard University, 1999
Dr. (hon. Causus) University of Cyprus, 2000.
50th Anniversary Medal, School of Humanities, Arts, and Social
Sciences, Massachusetts Institute of Technology
Ph.D. (h.c.) University of Tel Aviv, 2001
Professional Societies
Econometric Society (Fellow; Vice President, 1955, President,
1956, Member of the Council, 1983).
Institute of Mathematical Statistics (Fellow).
American Statistical Association (Fellow).
American Economic Association (Member, Executive Committee,
1967-1969; President-elect, 1972; President, 1973;
Distinguished Fellow).
The Institute of Management Sciences (President, 1963; Chairman
of the Council, 1964).
Western Economic Association (President, 1980-1981).
American Association for the Advancement of Science (Fellow;
Chair, Section K, 1982).
International Society for Inventory Research (President,
1983-1988).
Honorary President, International Economic Association;
President 1983-1986; Member, Executive Committee,
1986-1992.
The Society for Social Choice and Welfare, Caen, France, First
President, 1992-93.
Economists Allied for Arms Reduction, Co-Chair, 1990-1995
Business Positions
Member, Board of Directors, Varian Associates, Inc.,
1973-1991
Member, Board of Directors, Abt Associates, Inc.,
1975-1985
Member, Board of Directors, Fireman's Fund Insurance Company,
1980-1991
Member, Board of Directors, Strategies for a Global Environment,
Inc., 1998-
Member, Board of Directors, Unext, Inc., 2000-
PUBLICATIONS OF KENNETH J. ARROW
BOOKS
1. [1951] Social Choice and Individual Values. New York: Wiley.
2. [1958] (with S. Karlin and H. Scarf) Studies in the
Mathematical Theory of Inventory and Production. Stanford,
California: Stanford University Press.
3. [1958] (with L. Hurwicz and H. Uzawa) Studies in Linear and
Non-Linear Programming. Stanford, California: Stanford University
Press.
4. [1959] (with M. Hoffenberg and the assistance of H. Markowitz
and R. Shephard) A Time Series Analysis of Interindustry Demands.
Amsterdam: North-Holland Publishing Co.
5. [1963] Social Choice and Individual Values. Wiley: New York,
2nd edition.
6. [1965] Aspects of the Theory of Risk-Bearing. Yrjo Jahnssonin
saatio Helsinki, Finland.
7. [1970] (with M. Kurz) Public Investment, the Rate of Return,
and Optimal Fiscal Policy. Baltimore and London: The Johns Hopkins
Press.
8. [1971] (with F. H. Hahn) General Competitive Analysis. San
Francisco: Holden-Day; Edinburgh: Oliver & Boyd.
9. [1971] Essays in the Theory of Risk-Bearing. Chicago:
Markham; Amsterdam and London: North-Holland.
10. [1974] The Limits of Organization. New York: W. W. Norton.
11. [1976] (with S. Shavell and J. Yellen) The Limits of the
Market Economy, (in Japanese). Memorandum for Ministry of
International Trade and Industry, Japan.
12. [1976] The Viability and Equity of Capitalism. E. S.
Woodward lecture, Department of Economics, University of British
Columbia.
13. [1977] (with L. Hurwicz) Studies in Resource Allocation
Processes. Cambridge, London, New York, and Melbourne: Cambridge
University Press.
14. [1983] Collected Papers of Kenneth J. Arrow, Volume 1,
Social Choice and Justice. Cambridge, Massachusetts: The Belknap
Press of Harvard University Press.
15. [1983] Collected Papers of Kenneth J. Arrow, Volume 2,
General Equilibrium. Cambridge, Massachusetts: The Belknap Press of
Harvard University Press.
16. [1984] Collected Papers of Kenneth J. Arrow, Volume 3,
Individual Choice under Certainty and Uncertainty. Cambridge,
Massachusetts: The Belknap Press of Harvard University Press.
17. [1984] Collected Papers of Kenneth J. Arrow, Volume 4, The
Economics of Information. Cambridge, Massachusetts: The Belknap
Press of Harvard University Press.
18. [1985] Collected Papers of Kenneth J. Arrow, Volume 5,
Production and Capital. Cambridge, Massachusetts: The Belknap Press
of Harvard University Press.
19. [1985] Collected Papers of Kenneth J. Arrow, Volume 6,
Applied Economics. Cambridge, Massachusetts: The Belknap Press of
Harvard University Press.
20. [1986] (with Herve Raynaud) Social Choice and Multicriterion
Decision-Making. Cambridge, Massachusetts: The MIT Press.
22. [2000] Theorie de l'information et des organisations. Edited
by T. Granger. Paris: Dunod.
BOOKS EDITED
1. [1960] (with S. Karlin and P. Suppes) Mathematical Methods in
the Social Sciences, 1959: Proceedings of the First Stanford
Symposium. Stanford, California: Stanford University Press.
2. [1962] (with S. Karlin and H. Scarf) Studies in Applied
Probability and Management Science. Stanford, California: Stanford
University Press.
3. [1969] (with T. Scitovsky) Readings in Welfare Economics.
American Economic Association Series of Republished Articles in
Economics. Homewood, Illinois: Richard D. Irwin, Vol. XII.
4. [1971] Selected Readings in Economic Theory from
Econometrica. Cambridge, Massachusetts, and London: MIT Press.
5. [1978] (with S. J. Fitzsimmons and R. Wildenmann)
Zukunftsorientierte Planung und Forschung fur die 80er Jahre.
Koningstein/Ts., German Federal Republic: Athenaum Verlag.
6. [1981] (with C. C. Abt and S. J. Fitzsimmons) Applied
Research for Social Policy: The United States and the Federal
Republic of Germany. Cambridge, Massachusetts: Abt.
7. [1981] (with M. Intriligator) Handbook of Mathematical
Economics, Volume I. Amsterdam, New York and London: North-Holland.
8. [1982] (with M. Intriligator) Handbook of Mathematical
Economics, Volume 11. Amsterdam, New York and London: North-Holland.
9. [1985] (with Seppo Honkapohja) Frontiers of Economics. Oxford
and New York: Basil Blackwell Ltd.
10. [1986] (with M. Intriligator) Handbook of Mathematical
Economics, Volume III. Amsterdam, New York and London: North-
Holland.
11. [1988] (with M. J. Boskin) The Economics of Public Debt.
Basingstoke and London: Macmillan in association with The
International Economic Association.
12. [1988] (with P. W. Anderson and D. Pines) The Economy as an
Evolving Complex System. Redwood City, California: Addison-Wesley.
13. [1988] The Balance between Industry and Agriculture in
Economic Development. Volume 1: Basic Issues. Basingstoke and
London: Macmillan in association with The International Economic
Association.
14. [1991] Issues in Contemporary Economics. Volume I, Markets
and Welfare. Basingstoke and London: Macmillan for International
Economic Association.
15. [1994] (with R. Arnott, A.B. Atkinson, and J. Dreze) Public
Economics, by William Vickrey. Cambridge, U.K., New York, and
Oakleigh, Victoria: Cambridge University Press.
16. [1995] (with R.H. Mnookin, L. Ross, A. Tversky, and R.
Wilson) Barriers to Conflict Resolution. New York and London; W.W.
Norton.
17. [1996] (with E. Colombatto, M. Perlman, and C. Schmidt) The
Rational Foundations of Economic Behavior. Basingstoke and London:
Macmillan for the International Economic Association.
18. [1996] (with R.W. Cottle, B.C. Eaves and I. Olkin) Education
in a Research University. Stanford, CA: Stanford University Press.
19. [1996-7] (with Amartya Sen and Kotaro Suzumura) Social
Choice Re-examined. Basingstoke and London: MacMillan in association
with the International Economic Association. 2 vol.
20. [1998] (with Yew-Kwang Ng and Xiaokai Yang) Increasing
Returns and Economic Progress. Basingstoke, UK: Macmillan, and New
York: St. Martin's.
22. [2000] (with S. Bowles and S. Durlauf) Meritocracy and
Economic Inequality. Princeton, NJ: Princeton University Press.
23. [2001] (with G. Debreu) Landmark Papers in General
Equilibrium Theory, Social Choice, and Welfare Economics.
Cheltenham, UK, and Northampton, MA: Edward Elgar.
[[Page 29022]]
COLLECTIVE STUDIES
1. [1971] (as member of Climatic Impact Committee of the
National Research Council, National Academy of Sciences, National
Academy of Engineering) Environmental Impact of Stratospheric
Flight. Washington, D. C.: National Academy of Sciences.
2. [1977] (as member of Nuclear Energy Policy Study Group) S. M.
Keeny, Jr., et al, Nuclear Power Issues and Choices. Cambridge,
Massachusetts: Ballinger.
3. [1979] H.H. Landsberg, et al, Energy: The Next Twenty Years.
Cambridge, Massachusetts: Ballinger.
4. [1981] (as Chairman of the Committee for a Planning Study for
an Ongoing Study of Costs of Environment-related Health Effects,
Institute of Medicine) Costs of Environment-related Health Effects.
Washington, D. C.: National Academy Press.
5. [1991] (as member of the Oversight Review Board of the
National Acid Precipitation Assessment Program) The Experience and
Legacy of NAPAP. Washington, DC: National Acid Precipitation
Assessment Program.
6. [1993] (as Co-chair) Report of the NOAA [National Oceanic and
Atmospheric Administration] Panel on Contingent Valuation. Federal
Register, 58, No. 10 (January 15, 1993): 4602-4614.
7. [1995] (with B. Bolin, R. Constanza, P. Dasgupta, C. Folke,
C.S. Holing, B.-O. Jansson, S. Levin, K.-G. Maler, C. Perrings, and
D. Pimentel) Economic growth, carrying capacity, and the
environment. Science 268.28 April 1995, 520-521.
8 [1996] (with M.L. Cropper, G.C. Eads, R.W. Hahn, L.B. Lave,
R.G. Noll, P.R. Portney, M. Russell, R. Schmalensee, V.K. Smith, and
R.N. Stavins) Benefit-Cost Analysis in Environmental, Health, and
Safety Regulations: A Statement of Principles. La Vergne, TN: The
AEI Press, c/o Publisher Resources, Inc.
9 [2000] (with G. Daily, P. Dasgupta, S. Levin, K.-G. Maler, E.
Maskin, D. Starrett, T. Sterner, and T. Tietenberg) Managing
ecosystem resources. Environmental Science and Technology 34:
1401-1406. NONTECHNICAL ARTICLES
1. [1961] "Does the Majority Ever Rule?"
introductory notes. Portfolio and Art News Annual 4:76-78.
2. [1974] "Taxation and Democratic Values." The New
Republic 171:18:23-25.
3. [1975] "How Much to Fear from OPEC?" Moment
1:2:32-34.
4. [1978] "Capitalism, Socialism, and Democracy,"
(symposium). Commentary 65:4:29-31.
5. [1978] "A Cautious Case for Socialism." Dissent,
Fall, 472-480.
6. [1979] "The Economy and the Economist." Partisan
Review 1:113-116.
7. [1981] "Two Cheers for Regulation." Harper's
262:18-22.
8. [1982] "Why People Go Hungry." New York Review of
Books 29:12:24-26.
9. [1983] "The Economics of 1984." In P. Stansky
(ed.) On Nineteen Eighty-Four. San Francisco: W.H. Freeman, pp.
43-48.
10. [1984] "The International Economic Order of the
Twenty-First Century." In Osaka Junior Chamber, Inc., Wisdom
Toward the 21st Century. Tokyo: YMCA Press, pp. 173-227 (in
Japanese).
11. [1984] "The Economy as Order and Disorder." In
P. Livingston (ed.) Disorder and Order. Saratoga, California: ANMA
Libri., pp. 162-172.
12. [1986] "Kenneth J. Arrow." In W. Breit and R. W.
Spencer (eds.) Lives of the Laureates: Seven Nobel Economists.
Cambridge, Massachusetts, and London, pp. 43-57.
13. [1987] "Redistribution to the Poor: A Collective
Expression of Individual Altruism." In F. Jimenez (ed.)
Poverty and Social Justice. Tempe, Arizona: Bilingual Press, pp.
39-46.
14. [1989] "The Multiple Responsibilities of the
Corporation." In J. E. Weiler (ed.), The First International
Symposium on Stakeholders. Dayton, Ohio: Center for Business and
Economic Research, School of Business Administration, University of
Dayton, pp. 53-62.
15. [1989] Chapter 1. In W. Sichel (ed.) The State of Economic
Science. Kalamazoo, Michigan: W.E. Upjohn Institute for Employment
Research.
16. [1991] "Economic Forecasting." In G. E. Gaull
(ed.) New Technologies and the Future of Food and Nutrition. New
York: Wiley. Chapter 25, pp. 135-140.
17. [1992] "Decision Making by Individuals and
Systems." In Office of Naval Research: Forty Years of
Excellence. Arlington, Virginia: Office of Naval Research. Pp.
123-127.
18. [1992] "I Know a Hawk from a Handsaw." In M.
Szenberg (ed.) Eminent Economists. Cambridge and New York: Cambridge
University Press. Pp. 42-50.
19. [1992] "Moral Thinking and Economic
Interaction." In Pontifical Council for Justice and Peace,
Social and Ethical Aspects of Economics. Vatican City. Pp.
17-22.
20. [1994] "Gli Obblighi Etica del Mercato." Etica
degli Affari e delle Professioni, VII: 1/94: 34-38.
21. [1996] "Environmental Aspects of Environmental
Challenges," in H.W. Kendall et. al., Meeting the Challenges
of Population, Environment, and Resources: The Costs of Inaction.
Washington, DC: The World Bank. Environmentally Sustainable
Development Proceedings Series No. 14, pp. 29-31.
22. [1996] What Does the Present Owe the Future: An Economic and
Ethical Perspective on Climate Change. Grace A. Tanner Lecture on
Human Values XVII. Cedar City, Utah: Southern Utah University.
23. [1998] Tribute to Michael Bruno. The Economic Quarterly
45:473-477 (in Hebrew).
24. [2000] Globalization and its implications for international
security. ECAAR Bulletin 12(3): 1,7.
25. [2001] Is capitalism good for democracy? In J. Cohen and K.
R Manning (eds.) Asking the Right Questions: A Colloquium
Celebrating the 50th Anniversary. Massachusetts Institute of
Technology, School of Humanities, Arts, and Social Sciences. Pp.
90-96.
26. [2001] John C. Harsanyi, 1920-2000. Biographical
Memoirs of the National Academy of Sciences 80: 3-14.
27. [2001] Armen Alchian's contributions of NIE. Newsletter
International Society for New Institutional Economics 3 (Number 2):
5-8.
PAPERS
1. [1949] On the Use of Winds in Flight Planning. Journal of
Meteorology 6:150-159.
2. [1949] (with D. Blackwell and M. A. Girshick) Bayes and
Minimax Solutions of Sequential Decision Problems. Econometrica
17:213-44.
3. [1950] Homogeneous Systems in Mathematical Economics: A
Comment. Econometrica 18:60-62.
4. [1950] A Difficulty in the Concept of Social Welfare. Journal
of Political Economy 58:328-46.
5. [1951] Alternative Proof of the Substitution Theorem for
Leontief Models in the General Case. In T. C. Koopmans, (ed.)
Activity Analysis of Production and Allocation. New York: Wiley,
Chapter IX.
6. [1951] (with T. E. Harris and J. Marschak) Optimal Inventory
Policy. Econometrica 19:250-72.
7. [1951] Alternative Approaches to the Theory of Choice in
Risk-Taking Situations. Econometrica 19:404-37.
8. [1951] Little's Critique of Welfare Economics. American
Economic Review 41:923-34.
9. [1951] Mathematical Models in the Social Sciences. In D.
Lerner and H. D. Lasswell (eds.), The Policy Sciences. Stanford,
California: Stanford University Press, pp. 129-54.
10. [1951] An Extension of the Basic Theorems of Classical
Welfare Economics. In J. Neyman (ed.), Proceedings of the Second
Berkeley Symposium on Mathematical Statistics and Probability.
Berkeley and Los Angeles: University of California Press, pp.
507-32.
11. [1952] The Determination of Many-Commodity Preference Scales
by Two-Commodity Comparison. Metroeconomica IV: 107-15.
12. [1952] Le principe de rationalite dans les decisions
collectives. Economie Appliquee V:469-84.
13. [1953] Le role des valeurs boursieres pour la repartition la
meilleure des risques, Econometrie. Colloques Internationaux du
Centre National de la Recherche Scientifique, Vol. XI, pp.
41-47.
14. [1953] (with E. W. Barankin and D. Blackwell) Admissible
Points of Convex Sets, Contributions to the Theory of Games, II.
Princeton: Princeton University Press, pp. 87-91.
15. [1954] (with G. Debreu) Existence of Equilibrium for a
Competitive Economy. Econometrica 22:265-90.
16. [1954] Import Substitution in Leontief Models. Econometrica
22:481-492.
17. [1956] (with L. Hurwicz) Reduction of Constrained Maxima to
Saddle-Point Problems. In J. Neyman (ed.) Proceedings of the Third
Berkeley Symposium on Mathematical Statistics and Probability.
Berkeley and Los Angeles: University of California Press, Vol. V,
pp. 1-20.
18. [1956] (with A. C. Enthoven) A Theorem on Expectations and
the Stability of Equilibrium. Econometrica 24:288-93.
19. [1957] Statistics and Economic Policy. Econometrica
25:523-31.
20. [1957] (with L. Hurwicz) Gradient Methods for Constrained
Maxima. Operations Research 5:258-65.
[[Page 29023]]
21. [1957] Decision Theory and Operations Research. Operations
Research 5:765-74.
22. [1958] Utilities, Choices, Attitudes: A Review Note.
Econometrica 26:1-23.
23. [1958] Tinbergen on Economic Policy. Journal of the American
Statistical Association 53:89-97.
24. [1958] The Measurement of Price Changes. In Joint Economic
Committee, The Relationship of Prices to Economic Stability and
Growth. Washington, DC: U.S. Government Printing Office, pp.
77-88.
25. [1958] (with M. Nerlove) A Note on Expectations and
Stability. Econometrica 26:297-305.
26. [1958] (with A. Alchian and W. M. Capron) An Economic
Analysis of the Market for Scientists and Engineers. Santa Monica,
California: The Rand Corporation, RM 2190-RC.
27. [1958] (with M. McManus) A Note on Dynamic Stability.
Econometrica 26:448-54.
28. [1958] (with L. Hurwicz) On the Stability of the Competitive
Equilibrium. Econometrica 26:522-52.
29. [1959] Toward a Theory of Price Adjustment. In M. Abramovitz
and others, The Allocation of Resources. Stanford, California:
Stanford University Press, pp. 41-51.
30. [1959] (with W. M. Capron) Dynamic Shortages and Price
Rises: The Engineer-Scientist Case. Quarterly Journal of Economics
63:292-308.
31. [1959] Rational Choice Functions and Orderings. Economica,
N. S. 26:121-27.
32. [1959] (with H. D. Block and L. Hurwicz) On the Stability of
the Competitive Equilibrium, II. Econometrica 27:82-109.
33. [1959] Functions of a Theory of Behavior Under Uncertainty.
Metroeconomica 11:12-20.
34. [1960] (with L. Hurwicz) Competitive Stability Under Weak
Gross Substitutability: The "Euclidean Distance"
Approach. International Economic Review 1:38-49.
35. [1960] Optimization, Decentralization, and Internal Pricing
in Business Firms. In Contributions to Scientific Research in
Management. Western Data Processing Center, Graduate School of
Business Administration, University of California, Los Angeles, pp.
9-18.
36. [1960] Decision Theory and the Choice of a Level of
Significance for the t-Test. In I. Olkin and others (eds.),
Contributions to Probability and Statistics. Stanford, California:
Stanford University Press. pp. 70-78.
37. [1960] The Work of Ragnar Frisch, Econometrician.
Econometrica 28:175-92.
38. [1960] Price-Quantity Adjustments in Multiple Markets with
Rising Demands. In K. J. Arrow, S. Karlin, P. Suppes (eds.)
Mathematical Methods in the Social Sciences, 1959. Stanford,
California: Stanford University Press, pp. 3-16.
39. [1960] (with L. Hurwicz) Decentralization and Computation in
Resource Allocation. In R. W. Pfouts (ed.), Essays in Economics and
Econometrics. Chapel Hill: University of North Carolina Press, pp.
34-104.
40. [1960] (with L. Hurwicz) Stability of the Gradient Process
in N-Person Games. Journal of the Society for Industrial and Applied
Mathematics 8:280-94.
41. [1960] (with L. Hurwicz) Some Remarks on the Equilibria of
Economic Systems. Econometrica 28:640-46.
42. [1961] Additive Logarithmic Demand Functions and the Slutsky
Relations. Review of Economic Studies 28:176-81.
43. [1961] (with H. B. Chenery, B. Minhas and R. M. Solow)
Capital-Labor Substitution and Economic Efficiency. Review of
Economics and Statistics 43:225-50.
44. [1961] (with L. Hurwicz and H. Uzawa) Constraint
Qualifications in Maximization Problems. Naval Research Logistics
Quarterly 8:175-91.
45. [1961] (with A. C. Enthoven) Quasi-Concave Programming.
Econometrica 29:779-800.
46. [1962] Case Studies: Comment. In National Bureau of Economic
Research, The Rate and Direction of Inventive Activity: Economic and
Social Factors. Princeton: Princeton University Press, pp.
335-38.
47. [1962] Economic Welfare and the Allocation of Resources for
Invention. In National Bureau of Economic Research, The Rate and
Direction of Inventive Activity: Economic and Social Factors.
Princeton: Princeton University Press, pp. 609-25.
48. [1962] Optimal Capital Adjustment. In K. J. Arrow, S.
Karlin, and H. Scarf (eds.), Studies in Applied Probability and
Management Science. Stanford, California: Stanford University Press,
pp. 1-17.
49. [1962] (with M. Nerlove) Optimal Advertising Policy Under
Dynamic Conditions. Economica N. S., 29:129-42.
50. [1962] The Economic Implications of Learning by Doing.
Review of Economic Studies 29:155-73.
51. [1962] (with L. Hurwicz) Competitive Stability Under Weak
Gross Substitutability: Nonlinear Price Adjustment and Adaptive
Expectations. International Economic Review 3:233-55.
52. [1963] Conference Remarks. In M. Astrachan and A. S. Cahn
(eds.), Proceedings of RAND'S Demand Prediction Conference, January
25-26, 1962. Santa Monica, California: The RAND Corporation,
RM-3358-RP, pp. 125-34.
53. [1963] Utility and Expectation in Economic Behavior. In S.
Koch (ed.), Psychology: A Study of a Science. New York: McGraw-Hill,
Vol. 6, pp. 724-52.
54. [1963] The Economic Cost to Western Europe of Restricted
Availability of Oil Imports: A Linear Programming Computation.
Appendix D in H. Lubell, Middle East Oil Crises and Western Europe's
Energy Supplies. Baltimore: John Hopkins Press, pp. 214-220.
55. [1963] Comment on Duesenberry's "The Portfolio
Approach to the Demand for Money and Other Assets." Review of
Economics and Statistics 45, Supplement, pp. 24-27.
56. [1963] Uncertainty and the Welfare Economics of Medical
Care. American Economic Review 53:941-73.
57. [1963-4] Control in Large Organizations. Management
Science 10:397-408.
58. [1964] Optimal Capital Policy, the Cost of Capital, and
Myopic Decision Rules. Annals of the Institute of Statistical
Mathematics 16:21-30.
59. [1964] Research in Management Control: A Critical Synthesis.
In C. P. Bonini, R. K. Jaedicke, and H. M. Wagner (eds.), Management
Controls: New Directions in Basic Research. New York: McGraw-Hill,
Chapter 17, pp. 317-327.
60. [1965] Connaissance, Productivite et Pratique. Bulletin
SEDEIS, Etude No. 909 Supplement.
61. [1965] Statistical Requirements for Greek Economic Planning.
Center of Planning and Economic Research, Lecture Series No. 18.
Athens, Greece.
62. [1965] Uncertainty and the Welfare Economics of Medical
Care: Reply (The Implications of Transaction Costs and Adjustment
Lags). American Economic Review 55:154-58.
63. [1965] Criteria for Social Investment. Water Resources
Research 1:1-18.
64. [1965] The Economic Context. In S. T. Donner (ed.) The
Future of Commercial Television, 1965-1975. (privately
printed) pp. 116-39.
65. [1966] Discounting and Public Investment Criteria. In A. V.
Kneese and S. C. Smith (eds.), Water Research. Baltimore: Johns
Hopkins Press, pp. 13-32.
66. [1967] Values and Collective Decision-Making. In P. Laslett
and W. G. Runciman (eds.), Philosophy, Politics and Society, Third
Series. Oxford: Basil Blackwell, Chapter 10, pp. 215-232.
67. [1967] The Place of Moral Obligation in Preference Systems.
In S. Hook (ed.) Human Values and Economic Policy. New York: New
York University Press, Part II, 3, pp. 117-19.
68. [1967] Samuelson Collected. Journal of Political Economy
85:506-13.
69. [1968] Economic Equilibrium. In International Encyclopedia
of The Social Sciences. New York: The Free Press, Vol. 4, pp.
376-386.
70. [1970] Meyer A. Girshick. In International Encyclopedia of
the Social Sciences. New York: The Free Press, Vol. 6, pp.
191-93.
71. [1968] The Economics of Moral Hazard: Further Comment.
American Economic Review 58:537-39.
72. [1968] (pseudonym of Archen Minsol; joint with H. B.
Chenery, B. S. Minhas, and R. M. Solow) Some Tests of the
International Comparisons of Factor Efficiency with the CES
Production Function: A Reply. Review of Economics and Statistics
50:477-9.
73. [1968] Optimal Capital Policy with Irreversible Investment,
in J. N. Wolfe (ed.), Value, Capital, and Growth, Edinburgh:
Edinburgh University Press, pp. 1-20.
74. [1968] Applications of Control Theory to Economic Growth, in
American Mathematical Society, Mathematics of the Decision Sciences,
Providence: American Mathematical Society, Part 2, pp. 85-119.
75. [1969] Classificatory Notes on the Production and
Transmission of Technological Knowledge. American Economic Review
Papers and Proceedings 59:29-35.
76. [1969] The Organization of Economic Activity: Issues
Pertinent to the Choice of Market Versus Nonmarket Allocation. In
Joint Economic Committee, U. S. Congress, The Analysis and
Evaluation of Public Expenditures: The PPB System, Vol. 1; pp.
47-66.
[[Page 29024]]
77. [1969] (with M. Kurz) Optimal Consumer Allocation Over an
Infinite Horizon. Journal of Economic Theory 1:68-91.
78. [1969] Tullock and an Existence Theorem. Public Choice VI:
105-112.
79. [1969] (with M. Kurz), Optimal Public Investment Policy and
Controllability with Fixed Private Savings Ratio. Journal of
Economic Theory 1:141-77.
80. [1969] (with D. Levhari) Uniqueness of the Internal Rate of
Return with Variable Life of Investment. Economic Journal
79:560-66.
81. [1969] The Social Discount Rate. In G. G. Somers and W. D.
Wood (eds.) Cost-Benefit Analysis of Manpower Policies. Kingston,
Ontario: Industrial Relations Centre, Queen's University.
82. [1970] The Effects of the Price System and Market on Urban
Economic Development. In K. J. Arrow et al, Urban Processes As
Viewed by the Social Sciences. Washington, D. C.: The Urban
Institute, pp. 11-20.
83. [1970] (with M. Kurz) Optimal Growth with Irreversible
Investment in a Ramsey Model. Econometrica 38:331-344.
84. [1970] New Ideas in Pure Theory: Discussion. American
Economic Review Papers and Proceedings 60:462-3.
85. [1970] (with R. C. Lind) Uncertainty and the Evaluation of
Public Investment Decisions. American Economic Review
60:364-78.
86. [1970] Criteria, Institutions, and Function in Urban
Development Decisions. In A. H. Pascal (ed.) Thinking About Cities.
Belmont, California: Dickenson.
87. [1970] Induced Technical Change and Patterns of
International Trade: Comment. In R. Vernon (ed.) The Technology
Factor in International Trade. New York: National Bureau of Economic
Research, pp. 128-32.
88. [1971] The Firm in General Equilibrium Theory. In R. Marris
and A. Wood (eds.) The Corporate Economy: Growth, Competition, and
Innovative Potential. Cambridge, Massachusetts: Harvard University
Press, and London: Macmillan, pp.68-110.
89. [1971] A Utilitarian Approach to the Concept of Equality in
Public Expenditures. Quarterly Journal of Economics
85:409-415.
90. [1972] (with L. Hurwicz) An Optimality Criterion for
Decision-Making Under Ignorance. In C.F. Carter and J. L. Ford
(eds.), Uncertainty and Expectations in Economics: Essays in Honour
of G. L. S. Shackle. Oxford: Basil Blackwell, pp. 1-11.
91. [1972] (with R. C. Lind) Uncertainty and the Evaluation of
Public Investment Decisions: Reply. American Economic Review
62:171-2.
92. [1972] Problems of Resource Allocation in United States
Medical Care. In R. M. Kurz and H. Fehr (eds.), The Challenge of
Life. Basel and Stuttgart: Birkhauser, pp. 392-408.
93. [1972] Models of Job Discrimination. In A. H. Pascal (ed.)
Racial Discrimination in Economic Life, Lexington, Massachusetts,
Toronto and London: D. C. Heath, Chapter 2, pp. 83-102.
94. [1972] Some Mathematical Models of Race in the Labor Market.
In A. H. Pascal (ed.), Racial Discrimination hi Economic Life.
Lexington, Massachusetts, Toronto and London: D. C. Heath, Chapter
6, pp. 187-204.
95. [1972] Gifts and Exchanges. Philosophy and Public Affairs
1:343-62.
96. [1972] (with D. Levhari and E. Sheshinski) A Production
Function for the Repairman Problem. Review of Economic Studies
39:241-9.
97. [1972] Exposition of the theory of choice under uncertainty.
In C.B. McGuire and R. Radner (eds.) Decision and Organization.
Minneapolis: University of Minnesota Press. Chapter 2, pp.
19-56.
98. [1972] Value of and demand for information. In C.B. McGuire
and R. Radner (eds.) Decision and Organization. Minneapolis:
University of Minnesota press. Chapter 6, pp. 131-140.
99. [1973] Some Ordinalist-Utilitarian Notes on Rawl's Theory of
Justice. Journal of Philosophy 70:245-63.
100. [1973] (with D. Starrett) Cost- and Demand- Theoretical
Approaches to the Theory of Price Determination. In J. R. Hicks and
W. Weber (eds.) Carl Menger and the Austrian School of Economics.
Oxford: The Clarendon Press, Chapter 7, pp. 129-148.
101. [1973] Higher Education as a Filter. Journal of Public
Economics 2:193-216.
102. [1973] General Economic Equilibrium: Purpose, Analytic
Techniques, Collective Choice. In Les Prix Nobel en 1972. Stockholm:
The Nobel Foundation, pp. 206-231.
103. [1973] Social Responsibility and Economic Efficiency.
Public Policy 21:303-318.
104. [1973] Formal Theories of Social Welfare. In P. P. Wiener
(ed.) Dictionary of the History of Ideas. New York: Scribner, Volume
IV, pp. 276-284.
105. [1973] Information and Economic Behavior. Stockholm
(lecture): Federation of Swedish Industries.
106. [1973] The Theory of Discrimination. In O. Ashenfelter and
A. Rees (eds.) Discrimination in Labor Markets. Princeton: Princeton
University Press, pp. 3-33.
107. [1973] (with F. J. Gould and S. M. Howe) A General Saddle
Point Result for Constrained Optimization. Mathematical Programming
5:225-234.
108. [1973] Rawls's Principle of Just Saving. Swedish Journal of
Economics 75:323-335.
109. [1974] The Measurement of Real Value Added. In P. A. David
and M. W. Reder (eds.) Nations and Households in Economic Growth.
New York and London: Academic Press, pp. 3-19.
110. [1974] Stability Independent of Adjustment Speed. In G.
Horwich and P. A. Samuelson (eds.) Trade, Stability, and
Macroeconomics. New York and London: Academic Press, pp.
181-202.
111. [1974] Capitalism, for Better or Worse. In L. Silk (ed.)
Capitalism: The Moving Target. New York: Quadrangle/New York Times
Company, pp. 105-113.
112. [1974] Unbounded Utility Functions in Expected Utility
Maximization: Response. Quarterly Journal of Economics
88:136-138.
113. [1974] Limited Knowledge and Economic Analysis. American
Economic Review 64:1-10.
114. [1974] Optimal Insurance and Generalized Deductibles.
Scandinavian Actuarial Journal 1974:1-42.
115. [1974] (with A. C. Fisher) Environmental Preservation,
Uncertainty, and Irreversibility. Quarterly Journal of Economics
88:312-319.
116. [1974] On the Agenda of Organizations. In R. Marris (ed.)
The Corporate Society. New York and Toronto: Wiley, pp.
214-234.
117. [1974] The Combination of Time Series and Cross-Section
Data in Interindustry Flow Analysis. European Economic Review
5:25-32.
118. [1974] Government Decision Making and the Preciousness of
Human Life. In L. R. Tancredi (ed.) Ethics of Health Care.
Washington, D. C.: National Academy of Sciences, Chapter II, pp.
33-47.
119. [1975] Vertical Integration and Communication. The Bell
Journal of Economics 6:173-183.
120. [1975] Thorstein Veblen as an Economic Theorist. The
American Economist 19:5-9.
121. [1975] On a Theorem of Arrow: Comment. Review of Economic
Studies 62:487.
122. [1975] Economic Development: The Present State of the Art.
Papers of the East-West Communication Institute, No. 14.
123. [1976] Economic Dimensions of Occupational Segregation:
Comment I. Signs 1, No. 3, Part 2, pp. 233-237.
124. [1976] Quantity Adjustments in Resource Allocation: A
Statistical Interpretation. In R. E. Grierson (ed.) Public and Urban
Economics, Lexington, Massachusetts, Toronto and London: Lexington
Books, Chapter 1, pp. 3-11.
125. [1976] Theoretical Issues in Health Insurance. The
University of Essex, Noel Buxton lecture for 1973.
126. [1976] Welfare Analysis of Changes in Health Coinsurance
Rates. In R. N. Rossett (ed.) The Role of Health Insurance in the
Health Services Sector. New York: National Bureau of Economic
Research, Chapter 1, pp. 2-23.
127. [1976] Evaluation of Social Experiments: Discussion. In C.
G. Abt (ed.) The Evaluation of Social Programs. Beverly Hills and
London: Sage Publications, pp. 49-54.
128. [1976] The Rate of Discount for Long-Term Public
Investment. In H. Ashley, R. L. Rudman, and C. Whipple (eds.) Energy
and the Environment: A Risk-Benefit Approach. New York: Pergamon,
pp. 113-140.
129. [1976] The Genesis of Dynamic Systems Generated by Metzler
Matrices. In R. Henn and O. Moeschlin (eds.) Mathematical Economics
and Game Theory: Essays in Honor of Oskar Morgenstern. Berlin,
Heidelberg, and New York: Springer-Verlag, pp. 629-644.
130. [1977] Extended Sympathy and the Possibility of Social
Choice. American Economic Review Papers and Proceedings 67, No.
1:219-225.
131. [1977] Current Developments in the Theory of Social Choice.
Social Research 44:607-622.
132. [1978] The Future and the Present in Economic Life.
Economic Inquiry 16:157-170.
133. [1978] Nozick's Entitlement Theory of Justice. Philosophia
7:265-279.
[[Page 29025]]
134. [1978] Risk Allocation and Information: Some Recent
Theoretical Developments. The Geneva Papers on Risk and Insurance,
No. 8, June 1978 (Association Internationale pour l'Etude de
l'Economie de l'Assurance).
135. [1978] Jacob Marschak's Contributions to the Economics of
Decision and Information. American Economic Review, Papers and
Proceedings, Vol. 68, pp. xii-xiv.
136. [1978] Jacob Marschak. In International Encyclopedia of the
Social Sciences. New York: The Free Press, Vol. 18, Biographical
Supplement, pp. 500-507.
137. [1979] (with R. Radner) Allocation of Resources in Large
Teams. Econometrica 47:361-385.
138. [1979] The Economics of Information. In M. L. Dertouzos and
J. Moses (eds.) The Computer Age: A Twenty-Year View. Cambridge,
Massachusetts: MIT Press, pp. 306-317.
139. [1979] (with J. P. Kalt) Petroleum Price Regulation.
Washington, DC: American Enterprise Institute for Public Policy
Research.
140. [1979] The Property Rights Doctrine and Demand Revelation
under Incomplete Information. In M. Boskin (ed.) Economics and Human
Welfare. New York and London: Academic Press, pp. 23-39.
141. [1979] The Trade-Off Between Growth and Equity. In H. I.
Greenfield, A. M. Levenson, W. Hamovitch, and E. Rotwein (eds.)
Theory for Economic Efficiency: Essays in Honor of Abba P. Lerner.
Cambridge, Massachusetts: MIT Press, pp. 1-11.
142. [1980] (with S. Chang) Optimal Pricing, Use and Exploraton
of Uncertain Natural Resource Stocks. In P. T. Liu (eds.) Dynamic
Optimization and Mathematical Economics. New York: Plenum, pp.
105-16.
143. [1980] Microdata Simulation: Current Status, Problems,
Prospects. In R. Haveman and K. Hollenback (eds.) Microeconomic
Simulation Models for Public Policy Analysis. New York and London:
Academic Press, Vol. 2, pp. 253-265.
144. [1980] Real and Nominal Magnitudes in Economics. Journal of
Financial and Quantitative Analysis 25:773-783.
145. [1981] Futures Markets: Some Theoretical Perspectives.
Journal of Futures Markets 1:107-113.
146. [1981] Optimal and Voluntary Income Distribution. In S.
Rosefielde (ed.) Economic Welfare and the Economics of Soviet
Socialism: Essays in Honor of Abram Bergson, Cambridge, United
Kingdom: Cambridge University Press, pp. 276-88.
147. [1981] (with L. Pesotchinsky and M. Sobel) On Partitioning
a Sample with Binary-Type Questions in Lieu of Collecting
Observations. Journal of the American Statistical Association
76:402-9.
148. [1981] Pareto Efficiency with Costly Transfers. In J. Los
(ed.) Studies in Economic Theory and Practice. Amsterdam: North-
Holland Publishing Company, Chapter 6.
149. [1981] The Social Choice Perspective. Hofstra Law Review
9:1373-80.
150. [1981] The Response of Orthodox Economics. In H. E. Daly
and A. F. Umana (eds.) Energy, Economics, and the Environment.
Boulder, Colorado: Westview Press, pp. 109-113.
151. [1981] On Finance and Decision Making. In R. Vernon and Y.
Aharoni (eds.) State-Owned Enterprise in the Western Economies.
London: Croom Helm, pp. 63-69.
152. [1982] Risk Perception in Psychology and Economics.
Economic Inquiry 20:1-9.
153. [1982] Income Testing and Social Welfare: An Optimal Tax-
Transfer Model: Discussion. In I. Garfinkel (ed.) Income-Tested
Transfer Programs: The Case for and Against. New York and London
Academic: Press, pp. 319-323.
154. [1982] The Rate of Discount on Public Investments with
Imperfect Capital Markets. In R. C. Lind and others, Discounting for
Time and Risk in Energy Policy. Washington, D. C.: Resources for the
Future, pp. 115-136.
155. [1982] Comment on Evolutionary Models in Economics and Law:
Cooperative versus Conflict Strategies, by Jack Hirshleifer. In F.
Zerbe (ed.) Research in Law and Economics, Volume 4: 81-87.
156. [1983] Contributions to Welfare Economics. In E. C. Brown
and R. M. Solow (eds.) Paul Samuelson and Modern Economic Theory.
New York: McGraw-Hill, pp. 15-30.
157. [1983] Innovation in Large and Small Firms. In J. Ronen
(ed.) Entrepreneurship. Lexington, Massachusetts: Lexington Books,
pp. 15-28.
158. [1983] Team Theory and Decentralized Resource Allocation:
An Example. In P. Desai (ed.) Marxism, Central Planning, and the
Soviet Economy. Cambridge, Massachusetts, and London: The MIT Press,
Chapter 4, pp. 63-76.
159. [1983] Behavior under Uncertainty and Its Implications for
Policy. In B. Stigum and F. Wentst??p (eds.) Foundations of Utility
and Risk Theory with Applications. Dordrecht: D. Reidel, pp.
19-32.
160. [1984] Permanent and Transitory Substitution Effects in
Health Insurance Experiments. Journal of Labor Economics,
2:259-267.
161. [1985] The Informational Structure of the Firm. American
Economic Review Papers and Proceedings 75: No. 2, 303-307.
162. [1985] Maine and Texas. American Economic Review Papers and
Proceedings 75: No. 2, 320-323.
163. [1985] The Economics of Agency. In J. W. Pratt and R. J.
Zeckhauser (eds.) Principals and Agents: The Structure of Business.
Boston: Harvard Business School Press, Chapter 2, pp. 37-51.
164. [1986] Rationality of Self and Others in an Economic
System. Journal of Business 59: $385-$399.
165. [1986] Planning and Uncertainty. In I. Adelman and J. E.
Taylor (eds.) The Design of Alternative Development Strategies.
Rohtak, India: Jan Tinbergen Institute of Development Planning,
Chapter 9.
166. [1986] Comments, in R. G. Cummings, D. S. Brookshire, and
W. D. Schulze (eds.) Valuing Environmental Goods: An Assessment of
the Contingent Valuation Method, Totawa. New Jersey: Rowman and
Allanheld, pp. 180-185.
167. [1987] The Demand for Information and the Distribution of
Income. Probability in the Engineering and Informational Sciences
1:3-13.
168. [1987] Technical Information, Returns to Scale, and the
Existence of Competitive Equilibrium. In T. Groves, R. Radner, and
S. Reiter (eds.) Information, Incentives, and Economic Mechanisms.
Minneapolis: University of Minnesota Press, Chapter 7, pp.
243-255.
169. [1988] Ricardos Werk aus der Sicht der modernen Okonomie.
In K. J. Arrow, M. Ricardo, and H. Recktenwald, David Ricardo: Eine
moderne Wurdigung. Dusseldorf: Verlag Wirtschaft und Finanzen, pp.
43-59.
170. [1988] L'Informazione come Industria di Servizi. In G.
Tamburini (ed.) Verso L'Economia dei Nuovi Servizi: I Settore
Finanziario. Bologna: Il Mulino, Chapter 1, pp. 29-38.
171. [1988] Presidential address: General Economic Theory and
the Emergence of Theories of Economic Development. Chapter 2 in K.
J. Arrow (ed.) The Balance between Industry and Agriculture in
Economic Development, Volume 1: Basic Issues. Basingstoke and
London: Macmillan for the International Economic Association, pp.
22-32.
172. [1988] Overview of the Conference. In S. Borner (ed.)
International Finance and Trade in a Polycentric World. London:
Macmillan in association with the International Economic
Association, pp. 392-396.
173. [1989] Joan Robinson and Modern Economic Theory: An
Interview. In G. Feiwel (ed) Joan Robinson and Modern Economic
Theory. New York: New York University Press, Chapter 3, pp.
147-185.
174. [1989] Von Neumann and the Existence Theorem for General
Equilibrium. In M. Dore, S. Chakravarty, and R. Goodwin (eds.) John
yon Neumann and Modern Economics. Oxford: Clarendon Press, Chapter
2, pp. 15-28.
175. [1989] A "Dynamic" Proof of the Frobenius-
Perron Theorem for Metzler Matrices. In T. W. Anderson, K. B.
Atheyra, and D. L. Iglehart (eds.) Probability, Statistics, and
Mathematics: Papers in Honor of Samuel Karlin. Boston: Academic
Press, pp. 17-26.
176. [1991] Certainty Equivalence and Inequivalence for Prices.
In L. W. McKenzie and S. Zamagni (eds.) Value and Capital: Fifty
Years Later. Basingstoke, U.K.: Macmillan for the International
Economic Association, pp. 41-63.
177. [1991] Cowles in the History of Economic Thought. In Cowles
Fiftieth Anniversary. New Haven: Cowles Foundation for Research in
Economics, pp. 1-24.
178. [1991] The Dynamics of Technological Change. In
Organization for Economic Co-operation and Development, Technology
and Productivity: The Challenge for Economic Policy. Paris: OECD,
pp. 473-6.
179. [1991] Panel Contribution: The Transition from Communism to
an Alternative Economic Organisation. In A. B. Atkinson and R.
Brunetta (eds.) Economics for the New Europe. Basingstoke and
London: Macmillan, in association with the International Economic
Association, pp. 377-382.
180. [1991] Scale Returns in Communication and Elite Control of
Organizations. Journal of Law, Economics, and Organization 7,
Special Issue, 1-6.
[[Page 29026]]
181. [1992] Informational Equivalence of Signals. In P.
Dasgupta, D. Gale, O. Hart, and E. Maskin (eds.) Economic Analysis
of Markets and Games. Cambridge, Massachusetts, and London: The MIT
Press. Pp. 169-183.
182. [1992] Transition from Socialism. Estudios Economicos 6:
No. 1,5-22.
183. [1992] Sex Differentiation in Annuities: Reflections on
Utilitarianism and Inequality. In R. Selten (ed.) Rational
Interaction. Berlin: Springer-Verlag. Pp. 333-336.
184. [1992] The Basic Economics of Arms Reduction. In W. Isard
and C. H. Anderton (eds.)Economics of Arms Reduction and the Peace
Process. Amsterdam: Elsevier. Chapter 2. Pp. 57-61.
185. [1992] Excellence and Equity in Higher Education, Education
Economics 1: 5-12.
186. [1993] Economic Integration and the Future of the Nation-
State. Contemporary Policy Issues XI: 1-6.
187. [1993] Contingent Valuation of Nonuse Values: Observations
and Questions. In J. Hausman (ed.) Contingent Valuation: A Critical
Assessment. Amsterdam: North-Holland, Chapter XIV, pp.
479-484.
188. [1993] Does A Good Place Value News? In A. B. Atkinson
(ed.) Alternatives to Capitalism: The Economics of Partnership. New
York, St. Martin's Press, Chapter 3, pp. 33-44.
189. [1993] (with J. Edward Li) A Note on the Peace Dividend and
Reallocation of Knowledge Skills. In J. Brauer and M. Chatterji
(eds.) Economic Issues of Disarmament. Basingstoke and London:
Macmillan, Chapter 3, pp. 26-32.
190. [1994] Methodological individualism and social knowledge.
American Economic Review Papers and Proceedings 84: no. 2,
1-9.
191. [1994] General Economic Theory and Income Distribution. In
J.H. Bergstand, T.F. Cosimano, J.W. Houck, and R.G. Sheehan (eds.)
The Changing Distribution of Income in an Open U.S. Economy.
Amsterdam, London, New York, and Tokyo: North Holland, 1994, Chapter
12, pp. 343-347.
192. [1994] The production and distribution of knowledge. In G.
Silverberg and L. Soete (eds.), The Economics of Growth and
Technical Change: Technologies, Nations, Agents. Aldershot, U.K.,
and Brookfield, Vt.: Edward Elgar. Chapter 2, pp. 9-20.
193. [1994] (with Timothy Kehoe) Distinguished Fellow: Herbert
Scarf's contributions to economics. Journal of Economic Perspectives
8:161-181.
194. [1994] International peace-keeping forces: economics and
politics. In M. Chatterji, H. Jager and A. Rima (eds.) The Economics
of International Security. Basingstoke: Macmillan, and New York: St.
Martin's. Pp 81-86.
195. [1994] Information and the organization of industry.
Rivista internazionale di scienze sociali 52; 111-124.
196. [1995] Foreword to, M. McFaul and T. Perlmutter (eds.)
Privatization, conversion, Enterprise Reform in Russia. Boulder, San
Francisco, and Oxford: Westview Press.
197. [1995] A note on freedom and flexibility. In K. Basu, P.
Pattanaik, and K. Suzumura (eds), Choice, Welfare, and Development.
Oxford: Clarendon Press. pp. 7-16.
198. [1995] Some general observations on the economics of peace
and war. Peace Economics, Peace Science, and Public Policy 2
(Winter): 1-8.
199. [1995] Information acquisition and the resolution of
conflict, K.J. Arrow, R.H. Mnookin, L. Ross, A. Tversky, and R.
Wilson (eds) Barriers to Conflict Resolution. New York and London:
Norton.
200. [1995] Economics as it is and as it is developing: a very
rapid survey. In H. Albach and S. Rosenkranz (eds.) Intellectual
Property Rights and Global Competition: Towards a New Systhesis.
Berlin: Edition Sigma. Pp. 11-32.
201. [1995] The use of genetic and other medical information:
ethical and market dilemmas. George Seltzer Distinguished Lecture,
Industrial Relations Center, University of Minnesota.
202. [1995] Effet de serre et actualisation. Revue de L'Energie
No. 471 (Octobre): 631-636.
203. [1995] (With D.W. Carlton and H.S. Sider) The competitive
effects of line-of-business restrictions in telecommunications.
Managerial and Decision Economics 16:301-321.
204. [1996] Information, responsibility, and human services. In
V.R. Fuchs (ed.), Individual and Social Responsibility: Child Care,
Education, Medical Care and Long-Term Care in America. Chicago and
London: The University of Chicago Press. Chapter 8, pp.
229-239.
205. [1996] Inequalities in income and wealth. In E. Malinvaud
and M. Archer (eds.) The Study of the Tensions Between Human
Equality and Social Inequalities from the Perspective of the Various
Social Sciences. Vatican City: Pontifical Academy of Social
Sciences. Pp. 115-124.
206. [1996] Comment on M. Kurz, "Rational preferences and
rational beliefs." In K.J. Arrow, E. Colombatto, M. Perlman,
and C. Schmidt (eds.) The Rational Foundations of Economic Behavior.
New York: St. Martin's Press, and Basingstoke and London: Macmillan,
in association with the International Economic Association. Pp
363-363.
207. [1996] The impact of operations research and decision
theory on teaching and research in economics. In K.J. Arrow, R.W.
Cottle, B.C. Eaves, and I. Olkin (eds.) Education in a Research
University. Stanford, CA: Stanford University Press, P;
353-369.
208. [1996] The theory of risk-bearing: small and great risks.
Journal of Risk and Uncertainty 12:101-111.7.
209. [1996] (with J. Parikh and G. Pillet as Principal Lead
Authors) Decision-making frameworks for addressing climate change.
In J.P. Bruce, H. Lee, and E.F. Haites (eds) Climate Change 1995:
Economic and Social Dimensions of Climate Change, Contribution of
Working Group III to the Second Assessment of Intergovernmental
Panel on Climate Change. Cambridge University Press: Cambridge, UK,
New York, and Melbourne. Pp 53-78.
210. [1996] (with W.R. Cline, K-G. Maler, M. Munasinghe, R.
Squitieri, and J.E. Stiglitz as Principal Lead Authors)
Intertemporal equity, discounting and econonmic efficiency. In J.P.
Bruce, H. Lee, and E.F. Haites (eds) Climate Change 1995: Economic
and Social Dimensions of Climate Change, Contribution of Working
Group III to the Second Assessment of Intergovernmental Panel on
Climate Change. Cambridge University Press: Cambridge, UK, New York,
and Melbourne. Pp. 125-144.
211. [1996] The economics of information: a survey. Empirica
23:119-128.
212. [1996] Elements of the economics of information;
information and increasing returns. Chung-hua Series of Lectures by
Invited Eminent Economists, No. 22: Nanking, Taipei, ROC: Institute
of Economics, Academia Sinica.
213. [1996] Technical information and industrial structure,
Industrial and Corporate Change 5: 645-652.
214. [1997] Economic growth for a small country. In A.W. Gray
(ed.) International Perspectives on the Irish Economy. Dublin:
Indecon Economic Consultants. Chapter 1, pp. 1-8.
215. [1997] The benefits of education and the formation of
preferences. In J.R. Behrman and N. Stacey (eds.) The Social
Benefits of Education. Ann Arbor: University of Michigan Press.
Chapter 2, pp. 11-16.
216. [1997] Invaluable goods. Journal of Economic Literature 35:
757-765.
217. [1997] The functions of social choice theory. In K.J.
Arrow, A.K. Sen, and K. Suzumura, (eds.) Social Choice Re-examined.
Basingstoke and London: Macmillan in association with the
International Economic Association. Vol. 1, pp. 3-9.
218. [1997] Kapitaltheorie als Erweiterung der Werttheorie. In
K.J. Arrow, C. Bliss, and S. Zamagni, John R. Hicks und sein
"Value and Capital." Dusseldorf: Verlag Wirtschaft und
Finanzen. Pp. 31-46.
219. [1998] Innovation and increasing returns to scale. In K.J.
Arrow, Y-K Ng, and X. Yang, Increasing Returns and Economic
Progress, Basingstoke, UK: Macmillan, and New York: St. Martin's.
Chapter 18, pp. 403-408.
220. [1998] "What has economics to say about racial
discrimination?" Journal of Economic Perspectives 12:
91-100.
221. [1998] The external costs of voting rules: a note on
Guttman, Buchanan, and Tullock. European Journal of Political
Economy 14: 219-222.
222. [1998] The place of institutions in the economy: a
theoretical perspective. In Y. Hayami and M. Aoki (eds.) The
Institutional Foundations of East Asian Economic Development.
Basingstoke and London: Macmillan, and New York: St Martin's Press
in association with the International Economic Association. Chapter
2, pp. 39-48.
223. [1999] Discounting, morality, and gaming. In P.R. Portney
and J.P. Wyant (eds.) Discounting and Intergenerational Equity.
Washington: Resources for the Future. Chapter 2, pp. 13-21.
224. [1999] (with F.H. Hahn) Notes on sequence economies,
transaction costs, and uncertainty. Journal of Economic Theory
86:203-218.
225. [1999] Amartya K. Sen's contributions to the study of
social welfare. Scandinavian Journal of Economics 101:
163-172.
[[Page 29027]]
226. [1999] Team theory and distributed processing: surprise
attack. Information Systems Frontiers 1:11-13.
227. [1999] The economics of information. Studi Economici. 54
(1): 5-14.
228. [1999] Comments on the commentaries. In J.E. Alt, M. Levi,
and E. Ostrom (eds.), Competition and Cooperation: Conversations
with Nobelists about Economics and Political Science. New York:
Russell Sage, pp. 51-65.
229. [1999] Reflections on political science. In J.E. Alt, M.
Levi, and E. Ostrom (eds.), Competition and Cooperation:
Conversations with Nobelists about Economics and Political Science.
New York: Russell Sage, pp. 321-325.
230. [1999] Inter-generational equity and the rate of discount
in long-term social investment. In M. Sertel (ed.) Contemporary
Economic Issues. Volume 4: Economic Behavior and Design, Basingstoke
and New York: Macmillan and St. Martin's Press in association with
the International Economic Association. Chapter 5, pp. 89-102.
231. [2000] Economic transition: speed and scope. Journal of
Institutional and Theoretical Economics 156:10-18.
232. [2000] A comment on Cooper. World Bank Research Observer
15: 173-75.
233. [2000] Knowledge as a factor of production. In Annual World
Bank Conference on Development Economics 1999. Washington, DC:
International Bank for Reconstruction and Development. Pp.
15-20.
234. [2001] Die Debatte uber Skalerntrage in "Economic
Journal." In K.J. Arrow, S. Blankenburg, G.C. Harcourt, B.
Schefold, and P. Sylos Labini, Vademecum zu der Klassischen Debatte
uber Kosten, Wettbewerb und Entwicklung, Dusseldorf: Verlag
Wirtschaft und Finanzen, pp. 47-56.
235. [2001] In memoriam: John C. Harsanyi. Games and Economic
Behavior 36: 5-6.
236. [2001] The five most significant developments in economics
of the twentieth century. European Journal of the History of
Economic Thought 8: 298-304.
237. [2001] Reflections on the reflections. Journal of Health
Politics, Policy, and Law 26:1197-2003.
238. [2001] Entry, productivity, and investment. Review of
Economic Design 6: 175-184.
239. [2001] Comment on "Developing Countries and the New
Financial Architecture." In E. Malinvaud and L. Sabourin (eds)
Globalization: Ethical and Institutional Concerns. Pontifical
Academy of Social Sciences: Vatican City. Pp. 306-310
MTC-00030609
DAY CASEBEER
MADRID & BATCHELDER LLP
20300 Stevens Creek Blvd., Suite 400
Cupertino, California 95014
Telephone: (408) 255--3255
Facsimile: (408) 255-3254
FACSIMILE TRANSMISSION
DATE: JANUARY 28, 2002 NO. OF PAGES: 43
PLEASE DELIVER TO:
ANTITRUST DIVISION
EPARTMENT OF JUSTICE
PHONE NO. ( ) FAX No. (202) 616-9937
FROM: ROBERT M. GALVIN, ESQ.
PHONE: (408 ) 342-4578 REPLY FAX: (408) 255-3254
CLIENT NO: 1901-006
MESSAGE:
ORIGINALS TO FOLLOW: VIA
If you have questions regarding this fax, please call
Veronica at (408) 342-4571
Comments to the Revised Proposed Final Judgment in United States
v. Microsoft Corporation, No. 98-1232
State of New York, et al. v. Microsoft Corporation, No.
98-1233 Submitted By
Sun Microsystems, Inc.
Pursuant to the Tunney Act, 15 U.S.C. 16
Lloyd R. Day, Jr Jeffrey S. Kingston, Michael H. Morris, Robert
M. Galvin, James L. Miller Lee Patch Renee DuBord
DAY CASEBEER
MADRID & BATCHELDER LLP
20300 STEVENS CREEK BLVD.
SUITE 400
CUPERTINO, CA 95014
(408) 255-3255
BROBECK, PHELGSTER & SUN MICROSYSTEMS, INC.
901 SAN ANTONIO ROAD
SPEAR STREET TOWER
PALO ALTO, CA 94305
(650) 960--1300
HARRISON LLP
ONE MARKET STREET
SAN FRANCISCO, CA 94105Table of Contents
I. Introduction.
A. Competition in the market for PC operating systems must be
restored.
B. Microsoft's unlawful power to exclude competition in adjacent
and downstream markets must be stopped and eventually dissipated
C. The RPFJ fails to remedy the monopoly illegally maintained by
Microsoft
D. The loopholes in the RPFJ must be eliminated and its
important ambiguities clarified
II. Sun Microsystems" Interest Regarding the Terms of the
RPFJ
III. The RPFJ Fails To Remedy the Continuing Harm to Competition
Caused By Microsoft's Illegal Acts
A. The RPFJ fails to dissipate Microsoft's monopoly power in the
market for PC operating systems.
1. The Department previously acknowledged that an effective
remedy had to eliminate the applications barrier protecting
Microsoft's monopoly
2. The RPFJ fails to address the effects of Microsoft's
distribution power
3. The RPFJ does little more than attempt to enjoin Microsoft
from continuing to engage in the conduct a/ready found to be
unlawful.
4. The RPFJ assumes that Microsoft's Windows distributors will
promote competitive middleware products
B. The RPFJ does not remedy the continuing competitive harm to
web browsers
C. The RPFJ does not remedy the substantial harm to competition
caused by Microsoft's illegal acts against the Java platform. IV.
Critical Terms In The RPFJ Are Undefined or Ambiguous.
A. Significant ambiguities in the RPFJ must be cured to avoid
further litigation. B. "Interoperate" and
"interoperating" must be defined.
C. The scope of Microsoft's "Communication
Protocols" disclosure should be clarified and exemplified.
D. The scope of the "carve-out" provisions of
Section III.J should be clarified.
E. The definition of "Microsoft Middleware Product"
should be amended
V. Section III.I's Licensing Provisions Allow Microsoft to
Profit from Its Unlawful Acts
A. Microsoft should not be allowed to demand royalties as a
condition for making interoperability disclosures.
B. Microsoft has too much discretion over licensing terms trader
the RPFJ.
C. Microsoft should not be allowed to force third parties to
forfeit their intellectual property claims against Microsoft
VI. Conclusion
I. Introduction
Microsoft illegally maintained its monopoly over Intel-
compatible personal computer ("PC") operating systems by
acting to undermine the distribution and commercial appeal of
alternative computing platforms like Netscape Corporation's
Navigator browser and Sun Microsystems, Inc.'s Java TM
technology. \1\By eliminating the ability of alternative
platforms to compete with Windows, Microsoft has not only maintained
its monopoly over PC operating systems, it also has dramatically
increased the economic power that it derives from that monopoly,
such that Microsoft now has the power to control competition in a
number of adjacent and downstream markets as well.
---------------------------------------------------------------------------
\1\ United States v. Microsoft Corp., 253 F.3d 34, 46 (DC
Cir. 2001) ("Microsoft III").
---------------------------------------------------------------------------
In the emerging world of networked devices and services, the
commercial appeal and success of adjacent or downstream devices and
services such as servers, personal digital assistants
("PDAs"), telephones, video game systems, television
set-top boxes, and web-based services are in very large measure
dependent on their ability to interoperate with PCs via the Internet
or other networks. Microsoft's expanded monopoly power over PC
operating systems and web browsers affords it the power to deny
competing devices and services the same ability to interoperate
fully and completely with PCs as Microsoft's networked devices and
services enjoy. Microsoft is in fact exercising the power it derives
from its PC monopoly in just this way to exclude competition in each
of these adjacent markets. Unless and until that power is
effectively checked and ultimately eliminated, Microsoft's past
practices and insatiable ambition demonstrate that it will continue
to destroy competition in each of these enormously important
markets.
Unfortunately, the Revised Proposed Final Judgment
("RPFJ") does little or nothing to eliminate the
unlawful monopoly maintained by Microsoft over PC operating systems.
Nor does it redress the harm that Microsoft's illegal acts have
caused to competition in that market. And while the RPFJ apparently
recognizes the threat to competition posed by Microsoft's
exclusionary behavior in adjacent and downstream markets, the
remedies it
[[Page 29028]]
proposes to redress this threat are plagued with so many loopholes
and ambiguities that there can be no assurance that Microsoft's
anticompetitive conduct will stop.
A. Competition in the market for PC operating systems must be
restored
The adjudicated facts establish that Microsoft illegally
maintained a monopoly over the market for PC operating systems by
undermining the ability of rival software platforms to compete in
that or closely related markets. By offering consumers the ability
to run compelling applications on operating systems other than
Microsoft's Windows operating system, the Navigator browser and Java
platform threatened to reduce or eliminate the applications barrier
to competition that sustains Microsoft's monopoly. \2\
Microsoft fully recognized the threat these middleware platforms
posed to its continued monopoly over PC operating systems and
contrived to maintain that monopoly by restricting consumer access
to these and any other non-Microsoft middleware platforms.
---------------------------------------------------------------------------
\2\ United States v. Microsoft Corp., 84 F. Supp. 2d 9,
68 (D.DC 2000) ("Findings of Fact")
(explaining how middleware technologies such as the Navigator
browser and the Java platform have the ability to weaken the
applications barrier to entry).
---------------------------------------------------------------------------
The commercial appeal of any computing platform is dependent in
very large measure on the numbers of consumers who own or use the
platform. The greater the number of users, the greater the demand
for applications capable of running on that platform. The greater
the demand for applications, the greater the number and variety of
applications developed for the platform. And the greater the number
and variety of applications developed for a platform, the greater
the consumer demand for a given computing platform.\3\ Once started,
this "feedback" effect can and will sustain the adoption
and commercial success of platform software, such as Microsoft's
Windows operating system, Netscape's Navigator browser or Sun's Java
platform.The key to successful competition in platform software is
thus distribution.\4\ Unless a platform enjoys widespread and
sustained distribution, such that large numbers of computer users
have the platform installed and available for use on their computer
systems, the feedback cycle of application development and platform
adoption will not take effect.
---------------------------------------------------------------------------
\3\ See Findings of Fact, 84 F. Supp. 2d at
39-40.
\4\ See Microsoft III, 253 F.3d at 55-60,
60-61, 70-71; Findings of Fact, 84 F. Supp. 2d at
3652, 143-44,
---------------------------------------------------------------------------
As the District Court found, and the Court of Appeals affirmed,
Microsoft engaged in a seal es of illegal acts to choke off the
distribution channels for the Navigator and Java platforms.\5\ By
restricting and disrupting the distribution of the Navigator browser
and the Java platform, Microsoft sought to limit the numbers of
computer users with access to these alternative platforms and
thereby also limit the demand for, and economic incentives
supporting, application development on the Navigator and Java
platforms. By decreasing the distribution of non-Microsoft
platforms, such as the Navigator browser and the Java platform,
Microsoft knew that it could also decrease the number and variety of
applications developed for such platforms, and thus their relative
commercial appeal to consumers.
---------------------------------------------------------------------------
\5\ See Microsoft III, 253 F.3d at 61, 72, 75-76;
Findings of Facts, 84 F. Supp. 2d at 357, 395402.
---------------------------------------------------------------------------
But for Microsoft's unlawful attack on the distribution of the
Navigator and Java platforms, the installed base of these
alternative platforms would have been very different today. So too
would the economic incentives and choices of consumers and software
developers.
Consumers would have had the opportunity to choose among a
variety of competing platforms--not just Microsoft's Windows
platform--based upon performance, cost or personal preference.
Developers too would have had the opportunity to choose among a
variety of competing platforms on which to develop applications with
the features, performance and cost that consumers demand.
Indeed, because the Navigator and Java platforms were
"cross-platform"--that is, ran on top of a variety
of operating systems, not just Microsoft's Windows operating
system--consumers would have had the ability to run
applications written for the Navigator browser and Java platform on
any operating system, not just Microsoft's Windows operating system.
By dramatically lowering the cost to switch applications from one
operating system to another, the Navigator and Java platforms
directly attacked the applications barrier to competition that
protects Microsoft's monopoly over PC operating systems, and greatly
reduced the cost to consumers and developers alike of switching away
from Microsoft's monopoly platform. In short, but for Microsoft's
anticompetitive conduct, consumers today would have enjoyed far
greater freedom, at far less cost, to choose among competing
operating systems based on their comparative features, performance,
and price, rather than simply the number of applications they
support.
B. Microsoft's unlawful power to exclude competition in adjacent
and downstream markets must be stopped and eventually dissipated
By disrupting and eliminating the distribution of competing
platforms, Microsoft has not only maintained its monopoly over PC
operating systems, it also has increased the economic power that it
derives from that monopoly. By secretly manipulating the interfaces
and protocols needed to intemperate with Windows, Microsoft can
control which products and services in adjacent or downstream
markets are capable of interoperating with PCs. Not only does this
permit Microsoft to enhance the relative appeal and functionality of
its products and services at the expense of its competitors, it
denies consumers the benefits of competition. Instead of choosing a
server, telephone, application, or web service based solely on its
competitive merits, Microsoft is increasingly forcing consumers to
purchase such products and services based upon their ability to
interoperate with its unlawfully monopolized platforms.
Microsoft is now abusing the power it has over PC operating
systems and web browsers by seeking to extend its control to embrace
any device, application, or web service that seeks to interoperate
with Microsoft's monopolized PC operating systems or browsers.
Microsoft's unbridled monopoly over a critical node on the digital
network--PCs--provides it the power to allow only such
servers, PDAs, telephones, television set-top boxes, videogame
systems, or web services that implement Microsoft's proprietary
interfaces and protocols to interoperate effectively with
Microsoft's monopoly products. By illegally exploiting its PC
operating system monopoly to acquire and utilize a chokehold over
networked connections to PCs, Microsoft is dramatically expanding
its power to deny consumers the benefits of choice and competition
in adjacent and downstream markets as well.
C. The RPFJ fails to remedy the monopoly illegally maintained by
Microsoft
In the face of this record, the law requires that any remedial
decree "terminate" the monopoly, "unfetter"
the market from anticompetitive conduct, "deny to the
defendant the fruits" of its illegal acts, and
"ensure" no repetition of such abuse in the
future. \6\ Measured against this standard, the proposed
settlement between the United States and Microsoft reflected in the
RPFJ falls far short.
---------------------------------------------------------------------------
\6\ Microsoft III, 253 F.3d at 103.
---------------------------------------------------------------------------
Rather than act directly to restore competition to the market
for PC operating systems, and redress the harm to competition
inflicted by Microsoft's past misconduct in that and adjacent
markets, the RPFJ actually accedes to Microsoft's monopoly, and does
little or nothing to eliminate or check the enormous power it
provides. Incredibly, the RPFJ barely proscribes behavior already
held to be unlawful without remedying the far-reaching and
continuing anticompetitive effects that have been caused by that
behavior. \7\ Even though Microsoft effectively destroyed
competition for web browsers and blocked the distribution of
upgraded, compatible versions of the Java platform for the PC, the
RPFJ fails to remedy directly these anticompetitive acts or disgorge
Microsoft of the power it now enjoys as a result of those acts.
---------------------------------------------------------------------------
\7\ See Schine Chain Theatres, Inc. v. United States, 334
U.S. 110, 128 (1948) (concluding that injunctive relief which merely
"forbid[s] a repetition of the illegal conduct" is
legally insufficient because defendants would "retain the full
dividends of their monopolistic practices and profit from the
unlawful restraints of trade which they inflicted on
competitors").
---------------------------------------------------------------------------
Instead, the RPFJ relies on Microsoft's partners--PC
manufacturers--to indirectly undermine Microsoft's monopoly by
distributing non-Microsoft middleware. Relying on Microsoft's
distributors to achieve the Department's goals is fundamentally
flawed, since the PC manufacturers have little or no economic
incentive or ability to work with Microsoft's competitors, absent
fundamental changes to the competitive landscape in the PC operating
system market, which the RPFJ fails to seek. \8\ At best, the
[[Page 29029]]
RPFJ will marginally increase the opportunity, but not the ability,
of competitors to compete at some future date with Microsoft's
middleware products. It does nothing directly to dislodge
Microsoft's PC operating system monopoly or to restore the market
for PC operating systems to the competitive dynamics the market
would have possessed "but for" Microsoft's illegal
conduct.
---------------------------------------------------------------------------
\8\ Findings of Fact, 84 F. Supp. 2d at 54
(stating that "[w]ithout significant exception, all OEMs pre-
install Windows on the vast majority of PCs that they sell, and they
uniformly are of a mind that there exists no commercially viable
alternative to which they could switch in response to a substantial
and sustained price increase or its equivalent by
Microsoft.").
---------------------------------------------------------------------------
D. The loopholes in the RPFJ must be eliminated and its
important ambiguities clarified
While promising in principle, the disclosure remedies in the
RPFJ (Sections III.D. and III.E) are likely to fail in practice to
achieve the procompetitive objectives identified by the United
States Justice Department (the "Department") in its
Competitive Impact Statement. Key provisions in the RPFJ contain
critical loopholes and glaring ambiguities. Given Microsoft's past
disdain for compliance with the strictures of its prior antitrust
consent decree with the Department, these ambiguities will likely
lead to future litigation, particularly since Microsoft has
repeatedly refused to answer any questions regarding whether it
agrees or disagrees with the interpretations of the RPFJ proposed by
the Department in the Competitive Impact Statement. Instead, it is
clear that Microsoft's strategy is to say as little as possible
about the meaning or application of the RPFJ prior to entry of
judgment, hoping that any ambiguities in the language will
ultimately be interpreted in its favor. In order to protect the
public and ensure that the Department has actually secured a
settlement that is consistent with its representations to the Court,
the Department must force Microsoft to identify any disagreements
that it has with the Department's interpretations prior to entry of
the judgment. Unless such minimal steps are taken, the RPFJ will
certainly fail to secure even the modest objectives it seeks to
attain.
The RPFJ is further flawed because it allows Microsoft to profit
from its illegal acts by exacting royalties as a condition for
making interoperability disclosures. Moreover, it gives Microsoft
far too much discretion about how it will "comply" with
the RPFJ. Given its past record of anticompetitive conduct, a
remedial scheme which relies on Microsoft acting
"reasonably" is doomed to fail. After having
successfully prosecuted its case against Microsoft, it would be
tragic for the Department to shirk its duty under the law, and
through entry of the RPFJ, allow Microsoft to maintain and expand
its monopoly power.
II. Sun Microsystems" Interest Regarding the Terms of the
RPFJ
Since its founding in 1982, Sun has been propelled by an
innovative vision- "The Network Is The Computer." TM Sun
is a leader in the design, manufacture, and sale of computer
hardware, software, and services. Sun directly competes with
Microsoft across a wide variety of markets including operating
systems, "middleware" platforms, software development
tools, office productivity suites, directory services, and
enterprise software.
Sun's experience and expertise place it in a unique position to
assess the true competitive impact of the RPFJ. As one of
Microsoft's leading competitors and as the creator and licensor of
the Java platform, Sun was a prime target of the anticompetitive
conduct at issue in United States v. Microsoft. In addition, because
Sun designs, manufactures, and sells a wide variety of products and
services that must interoperate with Microsoft's products and
services, Sun's realworld experience regarding the difficulties and
barriers to effective interoperability with Microsoft's products
affords Sun unique insights into whether the various technical
disclosures and licensing practices mandated under the RPFJ will
actually achieve the results intended by the Department. Sun's
comments on the RPFJ are not intended to be exhaustive. Instead, the
comments focus on key shortcomings or problems with the RPFJ, which
most directly impact Sun, its distributors, developers, and
customers. Others. including trade organizations of which Sun is a
member, are likely to raise additional problems with the RPFJ, which
should be addressed prior to entry of the judgment. By omitting such
subjects from its submission, Sun does not wish to convey to the
Department the impression that it believes the remainder of the RPFJ
is satisfactory to Sun. Rather, Sun has merely focused its comments
to highlight particular areas of concern. III. The RPFJ Fails To
Remedy the Continuing Harm to Competition Caused By Microsoft's
Illegal Acts A. The RPFJ fails to dissipate Microsoft's monopoly
power in the market for PC operating systems A remedies decree in an
antitrust case "must seek to unfetter a market from
anticompetitive conduct, to terminate the illegal monopoly, deny the
defendant the fruits of its statutory violation, and ensure that
there remain no practices likely to result in monopolization in the
future." \9\ Tile market over which Microsoft has
unlawfully maintained its monopoly power is the market for PC
operating systems. It is that market--the market for PC
operating systems--that must be restored to competition, and in
which Microsoft's power must be eliminated.
---------------------------------------------------------------------------
\9\ Microsoft III, 253 F.3d at 103 (internal quotations
and citations omitted). Although the Department acknowledges the
required remedial objectives under the law, it fails to achieve them
in practice. See Competitive Impact Statement ("CIS") at
24 ("Appropriate injunctive relief in an antitrust case
should: (1) end the unlawful conduct; (2) 'avoid a recurrence
of the violation" and others like it; and (3) undo its ant/
competitive consequences."). The RPFJ, however, fails to serve
this fundamental objective. The first and most important flaw in the
RPFJ lies in its failure to do anything to restore competition in
the market for PC operating systems. But for Microsoft's
anticompetitive conduct, the market would today provide consumers
and software developers with the benefits of competitive choice
among at least three alternative computing platforms for desktop
computers: the Windows operating system, the Navigator browser, and
the Java platform. As a direct result of Microsoft's anticompetitive
conduct, consumers and developers today effectively enjoy no such
choice. Rather than restore the market to the state it would have
enjoyed but for Microsoft's illegal conduct, or even attempt to
dissipate Microsoft's illegally maintained power over that market,
the RPFJ accedes to and accepts Microsoft's monopoly over PC
operating systems, and does nothing to directly and immediately
restore that market to competition.
---------------------------------------------------------------------------
Indeed, the RPFJ does not even focus its principal remedies on
the relevant market: the market for PC operating systems, Instead,
it focuses its principal remedies on entirely different markets: the
market for distribution of Microsoft operating systems and the
market for middleware. In light of the record established and
affirmed in this case, the Department's reliance on Microsoft's own
distributors--entities whose commercial viability is dependent
on and inextricably tied to Microsoft's success -to promote non-
Microsoft middleware products capable of threatening Microsoft's
monopoly position is misplaced at best, and foolhardy at worst.
1. The Department previously acknowledged that an effective
remedy had to eliminate the applications barrier protecting
Microsoft's monopoly
In recognition of the Department's obligations under the law and
the extent of Microsoft's misconduct, the Department originally set
its remedial objectives much higher than those proposed in the RPFJ.
In fact, both the Department and the District Court concluded that a
combination of structural relief and conduct remedies was necessary
to lower the applications barrier to entry and to restore
competition in the market for PC operating systems. \10\ As
the Department itself acknowledged, conduct remedies, by themselves,
are likely to be insufficient in this case to remedy the past harm
to competition:
---------------------------------------------------------------------------
\10\ United States v. Microsoft Corp., 97 F. Supp. 2d 59
(D,DC 2000), aff'd in part, rev'd in part, and remanded, 253 F.3d 34
(DC Cir. 2001).
---------------------------------------------------------------------------
[C]onduct remedies can do little to rectify the harm done to
competition by Microsoft's illegal conduct in the past. For example,
the evidence shows and the Court found that Microsoft's illegal
conduct prevented Navigator and Java from eroding the applications
barrier to entry "for several years, and perhaps
permanently" because they could not facilitate entry unless
they became almost ubiquitous and thus became attractive platforms
for ISVs. A conduct remedy cannot undo the demise of Navigator and
the concomitant rise of Internet Explorer, nor can it ensure that
there will be other middleware threats comparable to Navigator in
the future. \11\
---------------------------------------------------------------------------
\11\ 11 4/28/00 Plaintiffs" Memo. in Support of
Proposed Final Judgment at 7-8 (citations omitted).
---------------------------------------------------------------------------
According to the Department, "[c]ompetition was injured in
this case principally because Microsoft's illegal conduct raised
entry barriers to the PC operating system market by destroying
developments that would have made it more likely that competing
operating systems would gain access to applications and other needed
complements." \12\ Thus, "the key to a remedy in
this case is to reduce Microsoft's
[[Page 29030]]
ability to erect or maintain entry barriers." \13\ To
achieve this objective, the Department originally sought to divide
Microsoft into an Applications Business and an Operating Systems
Business in order to "create incentives for Microsoft's Office
and its other uniquely valuable applications to be made available to
competing operating systems when that is efficient and
profitable--in other words, in response to ordinary market
forces--instead of being withheld strategically, at the
sacrifice of profits and to the detriment of consumers--in
order to protect the Windows operating system
monopoly." \14\
---------------------------------------------------------------------------
\12\ Id. at 30.
\13\ Id.
\14\ Id.
---------------------------------------------------------------------------
But now that the Department has reversed its prior position and
seeks to rely solely on conduct remedies, the remedies it has
proposed are even leas likely to rectify the harm done to
competition than the interim conduct remedies previously adopted by
the District Court. The conduct remedies of the RPFJ are simply not
tailored to rectify the continuing harm or lower the barriers to
competition for competing operating system vendors. For example, the
RPFJ does not even attempt to redress the competitive harm caused by
Microsoft's interference and disruption of the distribution channels
for the Navigator browser or the Java platform, even though
Microsoft correctly perceived that widespread distribution of those
platforms would lower the barriers to competition protecting its
monopoly. Nor does the RPFJ take any direct steps to loosen
Microsoft's chokehold on the PC operating system market and
facilitate the development of applications from both Microsoft and
others that could run on competing operating systems. If, as the
Department previously contended, the "key to a remedy"
in this case is to reduce or eliminate Microsoft's ability to create
and maintain barriers to competition, the RPFJ does not attempt to
serve, much less achieve, that remedial objective.
Although the Court of Appeals vacated and remanded the District
Court's divestiture order, it affirmed the central liability
findings against Microsoft. Rejecting Microsoft's numerous
challenges, the Court of Appeals concluded that Microsoft had
monopoly power over the PC operating system market, that Microsoft's
monopoly was protected by an applications barrier to entry, and that
Microsoft engaged in a panoply of illegal acts to maintain that
monopoly in light of the competitive threat posed by the Navigator
browser and the Java platform. \15\ Furthermore, it set forth
the legal standard against which any remedy for such violations
should be measured. \16\
---------------------------------------------------------------------------
\15\ Microsoft III, 253 F.3d at 51, 60, 64, 71,
76-78.
\16\ Id. at 103.
---------------------------------------------------------------------------
While the Department certainly had discretion to choose not to
pursue a divestiture remedy on remand, the Court of Appeals"
affirmance of the core liability findings against Microsoft provided
no excuse for seeking watered-down conduct remedies that are likely
to be even less effective than the interim conduct remedies
previously ordered by the Court. This is not a case where the
Department entered into a settlement with a defendant in lieu of
trial. Here, the District Court held, and the Court of Appeals
affirmed, that Microsoft violated the antirust laws. By failing to
remedy file effects of Microsoft's illegal acts, disgorge
Microsoft's ill-gotten gains, and attack the barriers to competition
protecting Microsoft's monopoly, the Department has shirked its duty
under the law.
2. The RPFJ fails to address the effects of Microsoft's
distribution power
Any remedy designed to restore competition in the PC operating
system market mast account for the economic realities of software
platform development. Distribution is the key to competitive
viability in the market for PC platform software. \17\ The
applications barrier to entry which forms a "positive feedback
loop" for Microsoft and a "vicious cycle" for
Microsoft's competitors was a centerpiece of the Department's case:
the number of installed units of a platform determines its
commercial appeal to applications developers; the number and variety
of applications available for a platform determines its commercial
appeal to consumers; and the commercial appeal of the platform to
consumers in turn drives its installed base and market
share. \18\ As the Court of Appeals concluded,
"[b]ecause the applications barrier to entry protects a
dominant operating system irrespective of quality, it gives
Microsoft power to stave off even superior new
rivals." \19\In large measure, the Navigator browser and
the Java platform threatened Microsoft's monopoly because they had
achieved widespread distribution on both Windows and non-Windows
platforms, thereby becoming a potentially more attractive platform
for application development than Windows. If developers increasingly
chose to develop their applications to the Navigator and Java
platforms, rather than the Windows platform, consumers would have
greater freedom to switch away from the Windows operating system
because they would still be able to run the applications that they
desire using competing operating systems.
---------------------------------------------------------------------------
\17\ See Microsoft III, 253 F.3d at 55-56,
60-61, 70-71; Findings of Facts, 84 F. Supp. 2d at
36-52, 143-44.
\18\ Findings of Fact, 84 F. Supp. 2d at
39-40.
\19\ Microsoft III, 253 F.3d at 55-56.
---------------------------------------------------------------------------
To restore competition in the PC operating system market, an
appropriate remedy should attempt to place the market back in the
position it would have been "but for Microsoft's illegal
conduct. In other words, an appropriate remedy would ensure, to the
extent possible, that alternative platforms achieve the distribution
that they would have received "but for" Microsoft's
illegal conduct. Moreover, an appropriate remedy also would seek to
open up Microsoft's distribution channels to expand consumer choice
by ensuring that alternative platforms could compete on the merits
with Microsoft's products, rather than having Microsoft's illegally
maintained distribution powers effectively foreclose such choices.
To evaluate the potential efficacy of the RPFJ, one must compare
the competitive landscape before and after Microsoft's illegal acts.
Prior to Microsoft's acts, the marketplace was undergoing dramatic
changes as a result of the nearly simultaneous emergence of both the
Navigator browser and the Java platform. By easily connecting
consumers to resources across the Internet and providing a new
platform for software development, these new, widely distributed
platforms threatened Microsoft's monopoly power because they
afforded consumers the ability to run applications on many different
operating systems, not just Windows. Customers could chose between
different browsers as well as different implementations of the Java
platform. They were not reliant on a single vendor for their
platform software. At this inflection point in the market, the
barriers to competition protecting Microsoft's monopoly looked
increasingly precarious. Microsoft's internal documents demonstrate
how serious that threat really was. Despite its dominant market
position, Microsoft believed it was necessary to engage in a
campaign of illegal conduct to crush this competition. As a result
of that conduct, consumers no longer have any real competitive
choices for browsers for PCs, other than Microsoft's Internet
Explorer. As a practical matter, PC consumers also have been denied
access to the latest, compatible versions of the Java platform as a
result of Microsoft's conduct. Instead, Microsoft first offered an
incompatible version of the Java platform, and now seeks to roll-out
their "knock-off" middleware runtime, the .NET
Framework/Common Language Runtime, that copies many of the features
of the Java platform with one critical difference--it rims only
on Windows.
The question that should be asked regarding the RPFJ is whether
it will disgorge from Microsoft the fruits of its illegal acts and
restore a competitive marketplace where consumers will have the
ability to choose their platform software from an array of
competitive choices. A critical review of the P,.PFJ makes plain it
does not.
3. The RPFJ does little more than attempt to enjoin Microsoft
from continuing to engage in the conduct already found to be
unlawful
Rather than attempting to undo the damage to competition
resulting from Microsoft's actions and pry open the PC operating
system market to competition, the RPFJ is purely forwardlooking,
focusing primarily on the precise Microsoft conduct already found to
be unlawful. Injunctive relief which simply "forbid[s] a
repetition oft he illegal conduct" is insufficient under
Section 2 because it would allow Microsoft to "retain the full
dividends of [its] monopolistic practices and profit from the
unlawful restraint of trade which [it] had inflicted on
competitors." \20\ As the Supreme Court has made plain,
an antitrust remedy "does not end with enjoining continuance
of the unlawful restraints" but must also seek to undo the
effects of the illegal acts and ensure that they do not
reoccur. \21\
---------------------------------------------------------------------------
\20\ Schine, 334 U.S. at 128.
\21\ See United States v. Paramount Pictures, 334 U.S.
131, 171 (1948).
---------------------------------------------------------------------------
Most of the RPFJ is oriented towards prohibiting a narrow set of
future illegal
[[Page 29031]]
conduct by Microsoft. For example, the RPFJ contains provisions
which would prohibit Microsoft from:
. retaliating against distributors of or developers for Non-
Microsoft Operating Systems and Non-Microsoft Middleware (Sections
III.A and III.F);
. entering into certain restrictive agreements relating to the
distribution of or development for Non-Microsoft Operating Systems
and Non-Microsoft Middleware (Sections III.C, III. F.2, III.G); or
. preventing end-users and OEMs from enabling non-Microsoft
Middleware Products over Microsoft Middleware Products (Section
III.H).
Although sucb provisions are certainly appropriate in light of
Microsoft's past conduct, they merely enjoin Microsoft from
continuing to break the law in the future, and do nothing to repair
the damage to competition caused by Microsoft's past acts.
4. The RPFJ assumes that Microsoft's Windows distributors will
promote competitive middleware products
Sun questions whether the Department's reliance upon Microsoft's
primary distributors, PC manufacturers, to re-start competition in
the PC operating system market is fundamentally misplaced. In its
Competitive Impact Statement, the Department contends that the RPFJ
will "restore the competitive threat that middleware products
posed prior to Microsoft's unlawful undertakings." \22\
The Department's assumption seems to be that by giving PC
manufacturers greater contractual freedom to distribute non-
Microsoft Middleware Products, a rich market of competing middleware
products will arise that could eventually give rise to alternative
computing platforms capable of undermining Microsoft's application
barrier to entry.
---------------------------------------------------------------------------
\22\ CIS at 3.
---------------------------------------------------------------------------
The RPFJ, however, does nothing to ensure that such alternative
platforms are actually distributed to consumers. If PC manufacturers
choose not to distribute such software, consumers will never have
the choice that they had, prior to Microsoft's illegal acts, when
alternative platforms like the Navigator browser or the Java
platform were ubiquitously distributed. The key question then is
whether PC manufacturers will aggressively distribute non-Microsoft
platforms. Unfortunately, the Department's Competitive Impact
Statement offers no explanation or empirical evidence to support
this critical assumption.
Given the limited nature of the relief proposed in the RPFJ, Sun
is not as sanguine as the Department about such prospects.
First, despite the retaliation restrictions contained in the
RPFJ, because Microsoft's market power is left largely untouched and
PC manufacturers remain dependent solely on Microsoft for a critical
component for their products, it is very likely that, in practice,
many PC manufacturers will remain reluctant to risk incurring
Microsoft's wrath by supporting competing platforms. Microsoft
simply retains too many formal and informal tactics to reward its
"friends," and punish its "enemies." One
need only look at PC manufacturers" treatment of Microsoft's
Internet Explorer for guidance on how the terms of the RPFJ are
likely to be applied in practice. In July 2001, Microsoft: announced
that PC manufacturers, for the first time, would be free to remove
access to Internet Explorer. Since that time, not one PC
manufacturer has removed the Internet Explorer icon from retail PCs.
Second, under the terms of the RPFJ, competing middleware
vendors are at such a competitive disadvantage to Microsoft that it
will remain extremely difficult to secure distribution of these
competing products through PC manufacturers. Under the RPFJ,
Microsoft's ability to bundle middleware products into its Windows
operating system would remain essentially unfettered. PC
manufacturers would have the legal fight to remove or disable
certain Microsoft middleware products, but what commercial incentive
will the PC manufacturers have to remove or disable the Microsoft
products if they have already paid for such products in order to
license the Windows operating system? Moreover, while Microsoft
retains the ability to bundle its middleware product (e.g., a
browser, media player, etc.) into every copy of Windows (absent an
affirmative act by a PC manufacturer to exclude such product), a
competitor would have to individually approach scores, if not
hundreds, of different PC manufacturers around the world and
negotiate a separate agreement with each to achieve a comparable
degree of distribution. In addition, because the marginal cost to
the PC manufacturer for the bundled Microsoft middleware product is
effectively zero, PC manufacturers may be reluctant to pay non-
Microsoft middleware vendors a sufficient price to recoup the costs
such middleware vendors would incur to make and sell competing
products.
Finally, since the vast majority of PC manufacturers are in the
business of selling Windows PCs, some manufacturers might believe it
is against their own commercial interests to support alternative
middleware platforms. For example, if a middleware platform
(e.g--, the Java platform) truly lowers barriers to entry and
allows consumers to run applications on any operating system (e.g.,
Apple Mac operating system, etc.) that supports that middleware
platform, consumers eventually might chose to purchase their
computers from vendors other than Windows PC vendors. Thus, the RPFJ
fails to account for the fact that many PC manufacturers may derive
substantial benefit from maintaining the applications barrier to
entry protecting Microsoft's Windows monopoly.
B. The RPFJ does not remedy the continuing competitive harm to
web browsers
Prior to Microsoft's illegal campaign, Netscape's Navigator
browser was the market leading web browser by a wide
margin. \23\ Today, Microsoft's Internet Explorer browser
dominates the market, accounting for over 87% of all
users. \24\ To achieve this dramatic turn of events, the
District Court found, and the Court of Appeals affirmed, that
Microsoft engaged in a series of unlawful, anticompetitive acts:
---------------------------------------------------------------------------
\23\ See Findings of Fact, 84 F. Supp. 2d at
360.
\24\ 2/21/01 StatMarket Report Regarding Global Browser
Usage Share.
---------------------------------------------------------------------------
. Exclusionary contracts with OEMs, \25\ IAPs, \26\
and ISVs; \27\
---------------------------------------------------------------------------
\25\ See Microsoft III, 253 F.3d at 64.
\26\ See id. at 71.
\27\ See id. at 72.
---------------------------------------------------------------------------
. Commingling of software code to make it technologically
difficult to remove Internet Explorer from Windows. \28\
---------------------------------------------------------------------------
\28\ See id. at 67.
---------------------------------------------------------------------------
Anticompetitive deals with Apple Computer. \29\
---------------------------------------------------------------------------
\29\ See id. at 74.
---------------------------------------------------------------------------
Not only did Microsoft effectively destroy Navigator as a viable
alternative platform, by seizing control over the web browser,
Microsoft greatly expanded its market power. By dominating web
browsers and effectively excluding all competitors, Microsoft
secured the power to set and control the protocols and interfaces
used for connecting with and communicating over the Internet.
Imagine, for example, that a single company monopolized the
manufacture and supply of telephones, such that it supplied 95% of
the world's telephones. If that company were permitted to change the
dial tone on its phones, or the keypad, in ways that permitted only
phones made by it to call and interact with its installed base of
telephones, the telephones made and sold by its competitors would
have very little or no value, since they could no longer
interoperate effectively with 95% of all telephones. And if that
company also altered the telephones it made so that they worked
best--or indeed only--with the telephone switches and
answering machines that the monopoly telephone company also made,
then that company would quickly obtain a monopoly over the telephone
switch and answering machine markets as well.
Microsoft's control over the browser and PC operating system
provides Microsoft with just such unbridled power to dictate
unilaterally the interfaces and protocols by which other devices and
applications can interoperate with Microsoft's products and services
over the Internet. The role played by the browser in communicating
with devices, applications, and web services over the Internet is
directly analogous to the role played by the consumer telephone in
the telephone network.
As a result of Microsoft's illegal acts, Microsoft can now
exclude competing products and services from being able to
communicate over the Internet with Microsoft's browser, or Microsoft
can mandate interfaces and protocols which favor its products over
competitors" products. Thus, by virtue of its anticompetitive
conduct, Microsoft has secured the power to potentially appropriate
a public asset of immeasurable value--the
Internet--through use of proprietary interfaces and protocols.
Control of the browser also was essential to protecting
Microsoft's PC operating system monopoly. By controlling this
"killer application," Microsoft can determine which
competing operating systems, if any, will be able to run Internet
Explorer. Without first-rate browser support capable of
communicating with the content available
[[Page 29032]]
across the Internet, competing PC operating systems simply will not
be able to attract consumers away from Microsoft's monopoly
operating system.
Finally, control of the browser was important in order for
Microsoft to be able to control a key distribution channel for
middleware that potentially threatened Microsoft's monopoly.
Browsers have been a vital distribution channel for a variety of
middleware products, including the Java platform, media players,
instant messaging products, etc. If Microsoft did not control this
distribution channel, competitors could have continued to use
competing browsers as a vehicle for distributing non-Microsoft
middleware.
Consequently, the continuing competitive harm flowing from
Microsoft's unlawful conduct is substantial. The RPFJ, however, does
nothing directly to address it. Instead, it leaves Microsoft to
enjoy the spoils of its illegal conduct At best, the RPFJ attempts
to make it easier for PC manufacturers to now distribute competing
browsers. But given the dominant position that Internet Explorer has
now achieved, who will develop and market a competing browser?
Because Microsoft bundles Internet Explorer with its monopoly
operating system, a competitor would have to compete against a
product with a marginal cost to PC manufacturers and consumers of
essentially zero, since Microsoft can recoup its costs from its
monopoly products. Even if the competing browser were technically
superior, Microsoft can regularly introduce new interfaces and
protocols to interfere with the competing browser's ability to
compete, forcing the competitor to chase each new proprietary
standard Microsoft announces.
Unless Microsoft is first stripped of the fruits of its illegal
conduct, real competition in the browser market is unlikely to
occur. Absent such remedial relief, it is akin to holding a 100-yard
dash in which Microsoft has an 87-yard lead after jumping the gun
and intentionally tripping all of its competitors. Consumers are
directly harmed as a result. Instead of a marketplace offering many
different browser choices, consumers are increasingly faced with
only one choice--Microsoft's browser.
C. The RPFJ does not remedy the substantial harm to competition
caused by Microsoft's illegal acts against the Java platform
The District Court found, and the Court of Appeals affirmed,
that Microsoft engaged in numerous anticompetitive acts directed
against the Java platform:
Exclusionary ISV deals; \30\
---------------------------------------------------------------------------
\30\ See id. at 76.
---------------------------------------------------------------------------
Anticompetitive threats to Intel to stop Java platform
development; \31\
---------------------------------------------------------------------------
\31\ See id. at 78.
---------------------------------------------------------------------------
Deceiving developers into using Microsoft's incompatible
implementation of the Java platform; \32\
---------------------------------------------------------------------------
\32\ See id. at 77.
---------------------------------------------------------------------------
Blocking distribution of Netscape Navigator--a prime
distribution channel for the Java platform to PCs. \33\
---------------------------------------------------------------------------
\33\ See Findings of Fact, 84 F. Supp. 2d at
397 (explaining how Microsoft used some of its
"surplus monopoly power" to suppress distribution of
Netscape Navigator and inflict further competitive damage on the
distribution of the Java platform).
---------------------------------------------------------------------------
Prior to Microsoft's anticompetitive acts, Sun had secured two
major distribution channels for delivering the Java platform to
PCs--Netscape's Navigator browser and Microsoft's Internet
Explorer browser and Windows operating system. By its illegal acts,
Microsoft effectively blocked the distribution of compatible,
upgraded versions of the Java platform through both channels, and
substantially slowed the development of desktop applications written
to the Java platform.
First, by blocking distribution of Netscape Navigator and
dramatically reducing its market share, Microsoft effectively closed
this alternative channel for distributing compatible versions of the
Java platform to PCs. Second, by developing and distributing its own
incompatible version of the Java platform which was tied to Windows,
Microsoft fragmented the Java platform in order to re-create its
applications barrier to entry, ensuring that PC consumers only had
Microsoft's version of the Java platform. By refusing to distribute
compatible upgrades of the Java platform, Microsoft effectively
froze desktop development for the Java platform by continuing to
distribute an "old" version of the technology, which did
not have the richer set of functionality available in later
versions. Finally, by means of exclusionary deals, threats, and
incompatible developer tools, Microsoft attempted to either deceive
or coerce developers away from developing compatible applications
written to the Java platform that could run on operating systems
other than Windows.
Since the trial, Microsoft has continued to attack the Java
platform to the detriment of consumers. In its most recent version
of Windows, Windows XP, Microsoft no longer included even the old
version of the Java platform which it previously had been shipping
as part of Windows in accordance with the terms of a settlement
agreement with Sun. As a result, millions of consumers purchasing
Windows XP will no longer be able to access web pages that contain
applications written to the Java platform unless they engage in a
time-consuming download of the entire Java platform.
In addition, Microsoft recently unveiled its own competing
middleware runtime--the .NET Framework--as part of its
.NET initiative. During the time that Microsoft effectively halted
the development and distribution of the Java platform for the PC for
several years, it simultaneously was busy developing its own
middleware runtime that copied the design and architecture of the
Java platform with one glaring difference--the .NET Framework
runs only on Windows. Thus, not only did Microsoft's illegal conduct
allow it to blunt the competitive threat which the Java platform
posed to Microsoft's Windows monopoly, it also allowed Microsoft the
time to try and catch up with many of the compelling features that,
at the time, only the Java platform offered. The RPFJ, however, does
not seek to remedy the continuing competitive harm caused by
Microsoft's actions. For example, the RPFJ does nothing to attempt
to put the marketplace in the position it would have been "but
for" Microsoft's conduct--ubiquitous distribution of an
upgraded, compatible Java platform on top of every Windows operating
system as an available, alternative platform for software
applications. Nor does it account for the time-to-market advantage
that the Java platform lost as a result of Microsoft's conduct,
particularly now that Microsoft will attempt to compete against the
Java platform with its .NET Framework. Instead of attempting to undo
this damage to competition, the RPFJ would allow Microsoft to bundle
its competing .NET Framework with Windows, while forcing Sun and its
licensees to try and m-create the distribution channels that
Microsoft unlawfully destroyed. Absent real remedial relief,
Microsoft will continue to reap the benefits of its unlawful
conduct, and consumers will have no meaningful alternative computing
platform available on PCs that is not controlled by Microsoft.
IV. Critical Terms In The RPFJ Are Undefined or Ambiguous
A. Significant ambiguities in the RPFJ must be cured to avoid
further litigation The dispute between Microsoft and the Department
regarding the prior consent decree demonstrates the need to
carefully define technical terms to avoid future litigation and
ensure the parties agree with respect to Microsoft's obligations. As
the Department is well aware, the 1995 consent decree with Microsoft
prevented Microsoft from requiring PC manufacturers to license other
products as a condition of licensing the Windows operating
system. \34\ However, the consent decree specified that this
obligation did not "prohibit Microsoft from developing
integrated products," though the term "integrated
products" was left undefined. \35\
---------------------------------------------------------------------------
\34\ See United States v. Microsoft Corp., 980 F. Supp.
537, 539 (D.DC 1997).
\35\ Id. at 53940 (emphasis added).
---------------------------------------------------------------------------
In 1997, the Department asked the District Court to find
Microsoft in contempt for requiring PC manufacturers who licensed
the Windows operating system to also license Internet Explorer.
Although the District Court found that the Department's proposed
definition was probably correct, the court declined to find
Microsoft in contempt because Microsoft offered a "plausible
interpretation," and any ambiguities had to be resolved in
Microsoft's favor. \36\ Given that any ambiguities are likely
to be resolved in Microsoft's favor in any future enforcement
proceeding, Sun believes it is essential that any and all material
ambiguities be clarified prior to the entry of the RPFJ.
---------------------------------------------------------------------------
\36\ Id. at 541-42.
---------------------------------------------------------------------------
Although the Department offers its own interpretation of some of
the RPFJ's ambiguous terms in the Competitive Impact Statement,
Microsoft has repeatedly refused to reveal whether it disagrees with
those interpretations. For example, following recent testimony by
Microsoft's counsel, Charles Rule, before the Senate Judiciary
Committee, members of the Committee posed a series of questions to
Mr. Rule regarding whether Microsoft agreed with the
[[Page 29033]]
Department's interpretation of the RPFJ as set forth in the
Competitive Impact Statement. Mr. Rule's responses were telling.
When asked a series of questions directed to whether
"Microsoft disagree[d] with anything stated in the
Department's Competitive Impact Statement concerning the meaning and
scope of the proposed Final Judgment," Mr. Rule refused to
answer the questions directly, instead repeatedly referring to the
same "non-answer": Microsoft did not participate in the
preparation of the Competitive Impact Statement. The language of the
Revised Proposed Final Judgment was carefully negotiated and means
what it says. The Department's Competitive Impact Statement has the
same legal force and effect in this case as in any other. Beyond
that I cannot go in light of the facts that the Tunney Act
proceeding is currently under way before Judge Kollar-Kotelly and
that the non-settling states are attempting to raise various issues
concerning the Competitive Impact Statement as part of the ongoing
"remedies" litigation also before Judge Kollar-Kotelly.
Once that litigation is completed, I may be in a better position to
discuss these issues with the Committee. \37\
---------------------------------------------------------------------------
\37\ Responses of Charles F. Rule to Judiciary Committee
Questions at 13.
---------------------------------------------------------------------------
Microsoft's clear strategy is to refuse to reveal anything about
its interpretations of the RPFJ prior to the Court's entry of the
judgment, lest it become clear to both the Department and the public
that Microsoft's understanding of its potential obligations under
the RPFJ is substantially different from the Department's. Then,
when disputes with the Department about the scope of its obligations
arise, as they inevitably will, Microsoft will be free to argue that
the R.PFJ is ambiguous, and therefore must be construed, as a matter
of law, in Microsoft's favor. \38\
---------------------------------------------------------------------------
\38\ See Microsoft, 980 F. Supp, at 541 ("The Court
must resolve any ambiguities in the terms of the Final Judgment in
favor of Microsoft, the party charged with contempt."); see
also Cause v. Nuclear Regulatory Corem'n, 674 F.2d 921,927-28
(DC Cir. 1982).
---------------------------------------------------------------------------
While it certainly is in Microsoft's interest to pursue such a
strategy, the Department should not risk being complicit in a scheme
that would effectively mislead the Court and the public about the
true nature and impact of the RPFJ. The Department should insist
that Microsoft identify any and all disagreements that it has with
the interpretations offered by the Department in the Competitive
Impact Statement prior to entry of the RPFJ. Absent such an inquiry
and a record of Microsoft's position, the District Court, Sun, and
the public at large have no assurances that the terms of the RPFJ
will actually be construed/n the manner proposed by the Department
in its Competitive Impact Statement.
B. "Interoperate" and "interoperating"
must be defined
The key disclosure provisions contained in the RPFJ rely on the
terms "intemperate" and "interoperating" to
define the scope of Microsoft's obligations, but these critical
terms are not expressly defined.
Section III.D of the RPFJ would require Microsoft to disclose
"for the sole purpose of interoperate with a Windows Operating
System Product ... the APIs and related Documentation that are used
by Microsoft Middleware to interoperate with a Windows Operating
System Product." (emphasis added).
Section III.E would require Microsoft to: make available for use
by third parties, for the sole purpose of interoperating with a
Windows Operating System Product, on reasonable and non-
discriminatory terms..., any Communication Protocol that is ... (i)
implemented in a Windows Operating System Product installed on a
client computer, and (ii) used to interoperate natively (i.e.,
without the addition of software code to the client operating system
product) with a Microsoft server operating system product. (emphasis
added). \39\
---------------------------------------------------------------------------
\39\ See also Section III.H (providing that a Windows
Operating System Product may invoke a Microsoft Middleware Product
in any instance in which "that Microsoft Middleware Product
would be invoked solely for use in interoperating with a server
maintained by Microsoft (outside the context of general Web
browsing)").
---------------------------------------------------------------------------
Depending on the definition of these terms, the scope of
Microsoft's obligations under these provisions could vary
dramatically. Therefore, in order to avoid a reprise of the
litigation surrounding the 1995 consent decree with Microsoft, the
Department should clarify the meaning of these terms in the text of
the RPFJ, particularly since any ambiguity is likely to be construed
in Microsoft's favor in any enforcement action brought by the
Department. An explicit definition of these terms is essential
because Sun believes the Department and Microsoft likely attach very
different meaning to these terms. For example, in the Competitive
Impact Statement, the Department offers a number of broad
characterizations regarding the scope of these interoperability
disclosures: . "[I]f a Windows Operating System Product is
using all the Communications Protocols that it contains to
communicate with two servers, one of which is a Microsoft server and
one of which is a competing server that has licensed and fully
implemented all the Communications Protocols, the Windows Operating
System Product should behave identically in its interaction with
both the Microsoft and non-Microsoft servers."\40\
---------------------------------------------------------------------------
\40\ CIS at 38.
---------------------------------------------------------------------------
. "Section III.E. will permit seamless interoperability
between WindowsOperating System Products and non-Microsoft servers
on a network. For example, the provision requires the licensing of
all Communications Protocols necessary for non-Microsoft servers to
interoperate with the Windows Operating System Products"
implementation of the Kerberos security standard in the same manner
as do Microsoft servers, including the exchange of Privilege Access
Certificates. Microsoft must license for use by non-Microsoft server
operating system products the Communications Protocols that Windows
Operating System Products use to enable network services through
mechanisms such as Windows server message block protocol/common
Internet file system protocol communications, as well as Microsoft
remote procedure calls between the client and server operating
systems."\41\
---------------------------------------------------------------------------
\41\ CIS at 38-39.
---------------------------------------------------------------------------
. "Section III.D of the proposed Final Judgment requires
Microsoft to disclose to ISVs, IHVs, IAPs, ICPs and OEMs all of the
interfaces and related technical information that Microsoft
Middleware uses to interoperate with any Windows Operating System
Product .... Microsoft will not be able to hamper the development or
operation of potentially threatening software by withholding
interface information or permitting its own products to use hidden
or undisclosed interfaces."\42\
---------------------------------------------------------------------------
\42\ CIS at 33.
---------------------------------------------------------------------------
In light of these comments, the Department appears to be
interpreting "interoperate" to mean the ability of two
different products to access, utilize, and support the full features
and functionality of one another. Under the Department's
interpretation, the disclosures would be of sufficient detail to
allow a non-Microsoft server operating system to implement the
Microsoft Communication Protocols in a manner such that the non-
Microsoft server operating system could be substituted for a
Microsoft server operating system without any disruption,
degradation, or impairment of all the features, functionality, and
services of any Microsoft PC operating system connected to such non-
Microsoft server operating system. By contrast, in proceedings
before the European Commission, Microsoft has asserted a much
narrower interpretation of "interoperate" than the
Department's interpretation. In that forum, Microsoft has maintained
it already discloses all information necessary to achieve
interoperability between Microsoft's PC operating system and non-
Microsoft server operating systems. Since Microsoft contends that
they already disclose all of the information necessary to satisfy
this narrow definition of "interoperate," if this
definition were to prevail, Microsoft will disclose nothing new. Its
conduct will remain unchanged.
Under Microsoft's narrow definition, interoperability is a one-
way street that is satisfied if all of the functionality of a non-
Microsoft server operating system can be accessed from a Windows PC
operating system. In contrast to the Department's position,
Microsoft has repeatedly taken the position that interoperability
does not require a disclosure sufficient to allow a Windows PC
operating system to behave identically when connected to both
Microsoft and non-Microsoft server operating systems. Moreover,
Microsoft has previously claimed that "interoperability"
relates only to those protocols and interfaces which Microsoft has
chosen to document and make available to third parties, and should
not include protocols and interfaces that Microsoft reserves for
itself to use to connect its PC and server operating system
products. Absent an explicit definition of this critical term in the
RPFJ, Sun believes the disclosure provisions of the RPFJ are doomed
to fail. To avoid future disputes over the meaning of this term and
to ensure that the public actually receives a remedy that is
consistent with the Department's representations in the
[[Page 29034]]
Competitive Impact Statement, Sun proposes that the RPFJ should be
amended to include the following definition:
"Interoperate" or "Interoperating" means the
ability of two different products to access, utilize and/or support
the full features and functionality of one another in all of the
ways they are intended to function. For example, a non-Microsoft
operating system installed on a server computer
"Interoperates" with a Windows Operating System Product
installed on a Personal Computer if such non-Microsoft server
operating system can (a) be substituted for a Microsoft operating
system running on a server computer connected to a Personal Computer
running a Windows Operating System Product, and Co) provide the user
of the non-Microsoft server operating system the ability to access,
utilize and/or support the full services, features and functionality
of the Windows Operating System Product that are accessed, utilized
and/or supported by such Microsoft server operating system without
any disruption, degradation or impairment in such services, features
and functions.
C. The scope of Microsoft's "Communication
Protocols" disclosure should be clarified and exemplified
As a vendor of server operating systems that must connect and
communicate with Microsoft's monopoly PC operating system, the
disclosure and licensing provisions in Section III. E relating to
Microsoft's Communications Protocols are especially important to
Sun's business. Although the term Communications Protocols is
expressly defined, the RPFJ lacks any explicit examples regarding
which Microsoft technologies would currently be required to be
disclosed or what the extent of such disclosure would be in
practice. While the terms of the RPFJ must be written to anticipate
Microsoft's future conduct, there is no excuse for misunderstandings
regarding Microsoft's obligations with respect to known, existing
interoperability barriers. Because the technical terms surrounding
this provision are potentially subject to varying interpretations,
the RPFJ would be substantially improved if it gave better guidance
on how these provisions would actually be applied in practice.
For example, in its Competitive Impact Statement, the Department
identifies some of the specific protocols it believes Microsoft will
be required to disclose under Section III.E to the extent such
protocols are implemented in Microsoft's PC operating system
products, including: protocols relating to Microsoft's Internet
Information Services ("IIS") web server and Active
Directory, Microsoft's implementation of the Kerberos security
standard (including the exchange of Privilege Access Certificates),
the Windows server message block protocol, the Windows common
Internet file system protocol, Microsoft remote procedure calls
between the client and server operating systems, and protocols that
permit a runtime environment (e.g., the Common Language Runtime) to
receive and execute code from a server. \43\
---------------------------------------------------------------------------
\43\ CI8 at 37-39.
---------------------------------------------------------------------------
Microsoft, however, has refused to say whether it agrees with
the Department's interpretation. To avoid future disputes and ensure
that the parties agree on the kinds of protocols that will fall
within the scope of the term "Communications Protocols,"
the RPFJ should be amended to identify particular examples of
protocols that Microsoft would be required to disclose. Furthermore,
in advance of entry of the RPFJ, Microsoft should be required to
fully detail what it will disclose with regard to existing
Communications Protocols that pose a barrier to interoperability. At
a minimum, the Department should require Microsoft to identify any
disagreements Microsoft has with the Department's interpretation of
this provision prior to entry of the RPFJ. Unless the Department and
Microsoft go through the exercise of attempting to apply this
provision in practice, the public cannot be assured that there truly
has been a "meeting of the minds" regarding the scope
and meaning of this important provision. Not only should the
Department clarify the RPFJ with examples of particular protocols
that Microsoft currently would be required to disclose, the
Department also should clarify the kinds of information Microsoft
will be required to disclose regarding its Communications Protocols.
Although the term Communications Protocols appears to be defined
broadly in Section VI.B of the RPFJ, in practice, the actual
application of these provisions is likely to give rise to many
potential questions and disputes. For example,
. Is everything that is shipped with Microsoft Windows server
operating system products (e.g., Windows 2000 Server, Windows 2000
Advanced Server, etc.), including Microsoft's Active Directory or
IIS, part of the "server operating system," and
therefore potentially the subject of disclosure to the extent it
comprises a "Communications Protocol"?
. Are Active Directory, Kerberos security protocol, COM+, Dfs,
DLT, CIFS extensions, RPC, the Win 32 APls, or Passport examples of
"Communications Protocols" that must be disclosed and
licensed pursuant to Section III.E of the RPFJ?
. Where Microsoft has extended an industry standard like
Kerberos, will Microsoft be required to disclose both the standard
portion of its implementation and its proprietary extensions?
. Will Microsoft be required to disclose the details regarding
its proprietary implementation of the Kerberos security protocol in
Windows 2000 and Windows XP Professional, including the information
necessary for a non-Microsoft server to be able to generate,
exchange, and process the authentication and authorization data in
Privilege Access Certificates?
. What does "make available for use by third
parties" mean in practice in the context of Section III.E?
Will Microsoft be required to just disclose fields, formats, etc.,
or will it be required to disclose sufficient information to allow a
competitor to create its own implementation of the Communications
Protocol that will allow a competitor's server operating system to
seamlessly interoperate with the Windows PC operating system in the
same manner as a Microsoft server operating system? Unless such
questions are resolved and clarified in advance of entry of the
RPFJ, the disclosure and licensing obligations of Section III.E will
not provide any meaningful relief.
D. The scope of the "carve-out" provisions of
Section III.J should be clarified Particularly troubling to Sun is
the possibility that the "carve-out" provisions of
Section III.J might be broadly construed by Microsoft to exclude
many of the kinds of disclosures that would otherwise fall within
the scope of Sections III.D and III.E. Section III.J. 1 provides
that no provision of the Final Judgment shall: [r]equire Microsoft
to document, disclose or license to third parties: (a) portions of
APIs or Documentation or portions or layers of Communications
Protocols the disclosure of which would compromise the security of
'a particular installation or group of installations" of
anti-piracy, anti-virus, software licensing, digital rights
management, encryption or authentication systems, including without
limitation, keys, authorization tokens or enforcement criteria ....
(emphasis added).
In the Competitive Impact Statement, the Department
characterizes this exception as a "narrow one, limited to
specific end-user implementations of security items such as actual
keys, authorization tokens or enforcement criteria, the disclosure
of which would compromise the security of 'a particular
installation or group of installations" of the listed security
features"\44\ But nowhere in the RPFJ is the term
"compromise the security of a particular installation or group
of installations" defined. What will this provision mean in
practice? With respect to known interoperability problems relating
to Active Directory, Microsoft's Kerberos security model,
Windows Media Player, or the Passport authentication/authorization
service, what portions of those protocols and interfaces can
Microsoft refuse to disclose pursuant to this provision? If
Microsoft refuses to disclose such information, will competitors be
able to fully interoperate with all of the features and
functionality of the Windows operating system, or will the value of
the disclosure provisions be effectively eviscerated? What steps has
the Department taken to ensure that, in practice, this exception
will not swallow the intended effect of the disclosure provisions?
---------------------------------------------------------------------------
\44\ CIS at 39.
---------------------------------------------------------------------------
Again, unless such questions are clarified in advance of entry
of the RPFJ, Microsoft is likely to use this purportedly narrow
exception to eviscerate its disclosure and licensing obligations
under the RPFJ.
E. The definition of "Microsoft Middleware Product"
should be amended The definition of "Microsoft Middleware
Product"\45\ in the
[[Page 29035]]
RPFJ is fundamentally flawed because it grants Microsoft discretion
to limit its obligations merely based on the way it chooses to
trademark its products. For middleware functionality that is
distributed after entry of the Final Judgment, except for a small,
specified class of middleware applications (e.g., Internet browsers,
email client software, etc.), Microsoft's obligations under the RPFJ
are not triggered unless it chooses to distribute the middleware
product under a trademark other than "Microsoft??" or
"Windows??"\46\ In other words, after entry of the RPFJ,
if Microsoft bundles its new middleware runtime alternative to the
Java platform, the .NET Framework (also known as the Common Language
Runtime) with Windows, it only would have to make disclosures about
the APIs used by the .NET Framework or allow OEMs and consumers to
remove access to it, if it chose to distribute the .NET Framework
under the trademarked name ".NET Framework." If it
simply distributed the product under the name
"Microsoft??" .NET Framework," its activities
would appear to be unconstrained by the RPFJ. To allow Microsoft to
evade its obligations under the RPFJ based on arbitrary trademarking
practices is absurd.
---------------------------------------------------------------------------
\45\ The RPFJ defines "Microsoft Middleware
Product" as Follows:
1. the functionality provided by Internet Explorer, Microsoft's
Java Virtual Machine, Windows Media Player, Windows Messenger,
Outlook Express and their successors in a Windows Operating System
Product, and.
2. for any functionality that is first licensed, distributed or
sold by Microsoft after the entry of this Final Judgment and that is
part of any Windows Operating System Product
a. Internet browsers, email client software, networked audio/
video client software, instant messaging software or
b. functionality provided by Microsoft software that--
i. is, or in the year preceding the commercial release of any
new Windows Operating System Product was, distributed separately by
Microsoft (or by an entity acquired by Microsoft) from a Windows
Operating System Product;
ii. is similar to the functionality provided by a Non-Microsoft
Middleware Product; and
iii. is Trademarked. Functionality that Microsoft describes or
markets as being part of a Microsoft Middleware Product (such as a
service pack, upgrade, or bug fix for Internet Explorer), or that is
a version of a Microsoft Middleware Product (such as Internet
Explorer 5.5), shall be considered to be part of that Microsoft
Middleware Product.
\46\ See RPFJ, Sections VI.K and VI.T.
---------------------------------------------------------------------------
To avoid this result, the definition of "Microsoft
Middleware Product" should be amended as follows: the
"Trademarked" requirement of Section VI.K.2.b.iii should
be stricken; the terms ".NET Framework" and
"Common Language Runtime" should be added to Section
VI.K. 1; and the term "middleware runtime environment"
should be added to Section VI.K.2.a.
V. Section III.I's Licensing Provisions Allow Microsoft to
Profit from Its Unlawful Acts
A. Microsoft should not be allowed to demand royalties as a
condition for making interoperability disclosures
The licensing provisions of the RPFJ are fundamentally flawed
because they would require the public to pay royalties to Microsoft
in order to interoperate with Microsoft's illegally maintained
monopoly products. If Microsoft had not engaged in its pattern of
illegal conduct, its monopoly would have begun to dissipate, and it
would have been unable to collect this
"interoperability" tax. As the Department itself
previously recognized, "[i]f Microsoft were in a competitive
market, it would disclose its confidential interface information to
other server software developers so that their complementary
software would work optimally with, and thereby enhance the value
of, Microsoft's PC operating systems."\47\ It is only because
Microsoft has illegally maintained its PC operating system monopoly
and wishes to expand its monopoly to server operating systems that
Microsoft has an incentive to withhold information from competitors
regarding complementary software. Thus, the RPFJ, in effect,
authorizes Microsoft to collect a portion of its monopoly rents
through this licensing regime.
---------------------------------------------------------------------------
\47\ 4/28/00 Plaintiffs" Memo. in Support of
Proposed Final Judgment at 28.
---------------------------------------------------------------------------
Furthermore, not only is Microsoft authorized to collect
royalties for the "privilege" of interoperating with its
illegal monopoly, the RPFJ places no limits on how high a royalty
Microsoft can demand, other than the royalty must be reasonable.
However, since competitors" products must be able to
interoperate with Microsoft's monopoly PC operating systems, they
may be constrained to essentially pay whatever Microsoft demands. To
ensure Microsoft does not continue to enjoy the fruits of its
illegal conduct, Section III.I of the RPFJ should be mended to
require Microsoft to grant any licenses required under the RPFJ on a
royalty-free basis.
B. Microsoft has too much discretion over licensing terms under
the RPFJ Although Section III.I of the RPFJ places some limitations
on the terms under which Microsoft must license its technology to
facilitate the disclosure obligations of the RPFJ, Microsoft retains
broad discretion, which it is likely to exploit. For example,
Section III.I. 1 requires that all license terms be
"reasonable." A reasonableness standard, however,
provides little practical guidance, and is a particularly poor
choice in the case of a monopolist like Microsoft who has repeatedly
broken the law to secure commercial advantages over its competitors.
Similarly, the fact that licenses must be
"nondiscriminatory" could actually be exploited by
Microsoft to ensure that its strongest competitors are denied access
to Microsoft's disclosures. For instance, a small start-up company
with no revenues and no existing intellectual property rights might
be willing to agree to terms that would be commercially unacceptable
to significant Microsoft competitors like Sun, IBM, or Novell. The
terms of the RPFJ also allow Microsoft the ability to substantially
delay making any interoperability disclosures. Under Section III.E,
Microsoft does not even need to make its Communications Protocols
available until nine months after submission of the RPFJ. But since
Microsoft can insist that third parties enter into a license
agreement before they receive any disclosures, Microsoft can
continue to delay making disclosures to key competitors by dragging
out negotiations and insisting on commercially unacceptable terms.
Does the Department intend to review ongoing negotiations to ensure
Microsoft is taking reasonable positions in the negotiations? How
will the Department ensure that Microsoft does not exploit the
negotiating process to facilitate delay and disadvantage key
competitors? Will Microsoft's competitors be forced to sign license
agreements before they know the scope of information that Microsoft
will or will not disclose? Does the Department expect that the
proposed Technical Committee will be involved in resolving such
disputes? If so, will Technical Committee members have the requisite
licensing and legal experience to assess whether Microsoft is
insisting upon commercially unreasonable terms? To ensure Microsoft
cannot circumvent the intent of the RPFJ, Sire proposes that the
R.PFJ be amended to include a publicly available template
identifying the terms under which Microsoft will license its
technology pursuant to the RPFJ. In principle, this approach is
analogous to Section III.B which requires Microsoft to have uniform
license agreements with OEMs in accordance with published, uniform
royalty rates. Requiring Microsoft to identify this license template
in advance would serve two important objectives. First, it would
help limit Microsoft's ability to evade the intent of the RPFJ
through negotiation tactics. Second, it would allow the public to
understand the true costs and conditions of licensing under the RPFJ
in advance of entry of the RPFJ. Unless the material licensing terms
are specified in advance, neither the Department nor the public can
accurately assess the actual commercial significance of the proposed
disclosure obligations.
C. Microsoft should not be allowed to force third parties to
forfeit their intellectual property claims against Microsoft
Section III.I.5 provides that third parties "may be
required to grant to Microsoft on reasonable and nondiscriminatory
terms a license to any intellectual property rights it may have
relating to the exercise of their options or alternatives provided
by this Final Judgment." In other words, Microsoft would be
free to infringe a third party's patents or copyrights, or steal its
trade secrets, and then by virtue of its monopoly position, force
such third party to grant Microsoft a license to do so as the price
that third party must pay in order to interoperate with Microsoft's
monopoly product. If Microsoft wished to obtain rights to practice
or use a competitor's intellectual property, it could do so simply
by incorporating that technology into Windows, then insisting on
both a royalty and a grant-back license as the consideration that
competitor must provide in order to enable its products to
interoperate with Microsoft's monopolized PCs. Indeed, Microsoft's
competitors would have to license Microsoft the right to whatever
intellectual property Microsoft may have incorporated into Windows
even before they know what intellectual property Microsoft has
stolen or infringed. No other company has such power, let alone
governmental blessing and endorsement, to extort such concessions.
Sun therefore proposes that the RPFJ be mended to strike Section
III. I.5 in its entirety.
VI. Conclusion
The RPFJ fails to remedy the continuing competitive harm
resulting from Microsoft's actions, and instead improperly accedes
to Microsoft's illegally maintained and
[[Page 29036]]
expanded monopoly power. The Department should withdraw its support
for the RPFJ, and instead pursue remedies that will restore
competition to the PC operating system market, prevent Microsoft
from expanding its monopoly in that market into adjacent and
downstream markets, and redress the harm to competition caused by
Microsoft's illegal acts. At a minimum, the Department should seek
to remedy directly the specific harm to competition caused by
Microsoft's illegal acts against the Navigator browser and the Java
platform, which formed the very heart of the Department's case
against Microsoft. Because critical terms in the RPFJ are undefined
or ambiguous, the Department also should assure the public that
Microsoft is bound by the interpretation of the RPFJ set forth in
the Department's Competitive Impact Statement. Finally, the
Department should delay seeking entry of the RPFJ until the
completion of trial on the remedies sought by the Department's co-
plaintiffs, the Litigating States. Sun believes that the evidentiary
record from that trial is likely to demonstrate the substantial
flaws and inadequacies of the RPFJ and cause the Department to
seriously re-consider whether its support for the RPFJ is in the
public interest.
MTC-00030610
MAYER, BROWN & PLATT
555 COLLEGE AVENUE
PALO ALTO, CA 94306- 1433
DONALD M. FALK
DIRECT DIAL (650) 33 1-2030
DIRECT FAX (650) 33 1-2068
dfalk @ mayerbrown.com
MAIN TELEPHONE
(650) 331-2000
MAIN FAX
(650) 33I-2060
January 28, 2002
VIA E-MAIL AND MESSENGER
Renata B. Hesse
Antitrust Division
U.S. Department of Justice
601 D Street NW
Suite 1200
Washington, DC 20530-0001
Re: Microsoft Settlement: United States v. Microsoft Corp., No.
98-1232 Tunney Act proceedings
Dear Renata:
Enclosed please find the following comments on the settlement:
(1) Comments of Computer & Communications Industry
Association on the Revised Proposed Final Judgment;
(2) Declaration of Joseph E. Stiglitz and Jason Furman; and
(3) Declaration of Edward Roeder.
Thank you for your assistance. Please feel free to call my
Washington colleague, David Gossett (202-263-3384) or me
if you have any questions.
Hope all is well with you. It's a long way from the ELQ days.
Sincerely,
Donald M. Falk
Enclosures
BEFORE THE UNITED STATES DEPARTMENT OF JUSTICE UNITED STATES OF
AMERICA Plaintiff, V. MICROSOFT CORPORATION, Defendant. Civil Action
No. 98-1232 (CKK) United States District Court for the
District of Columbia STATE OF NEW YORK ex rel. Attorney General
ELIOT SPITZER, et al., Plaintiffs, v. MICROSOFT CORPORATION,
Defendant. Civil Action No. 98-1233 (CKK) United States
District Court for the District of Columbia
COMMENTS OF COMPUTER & COMMUNICATIONS INDUSTRY ASSOCIATION
ON THE REVISED PROPOSED FINAL JUDGMENT
Donald M. Falk
Mayer, Brown & Platt
555 College Avenue
Palo Alto, California 94306
(650) 331-2030
(650) 331-2060 facsimile
Edward J. Black
Jason M. Mahler
Computer & Communications
Industry Association
666 11th Street NW
Washington, DC 20001
(202) 783-0070
David M. Gossett
Mayer, Brown & Platt
1909 K Street, NW
Washington, DC 20006
(202) 263-3000
TABLE OF CONTENTS
Page(s)
INTRODUCTION 2
A. Liability Rests On Microsoft's Suppression Of Middleware Threats
That Threatened To Erode The Applications Barrier To Entry 6
B. The RPFJ Does Not Prevent Microsoft From Abusing Its Position And
Does Not Meet Basic Standards For An Antitrust Remedy 9
C. The Obligations That Supposedly Restore Competitive Conditions In
Fact Make Microsoft Do Virtually Nothing Against Its Will 11
D. The Public Interest Requires An Effective Remedy That The RPFJ
Does Not Provide 15
I. The Tunney Act Requires Close Scrutiny Under The Present
Circumstances 18
A. The Government's Victory On Liability Removes Litigation Risk And
Therefore Limits Deference 19
1. The Imposition And Affirmance Of Liability Remove Any
Constitutional Concerns About Searching Review And Require The Court
To Perform Its Constitutional Duty 19
2. The Extensive Record And Judicial Opinions Provide Clear,
Manageable Standards For Substantive Review Of The RPFJ 23
B. Broad Deference Is Particularly Inappropriate Because The
Circumstances Are Suspicious 26
1. Microsoft's Manifestly Inadequate Disclosure Under The Tunney
Act's Sunshine Provisions Weighs Strongly Against Judicial Deference
To The Terms Of The RPFJ<5>26
2. The RPFJ Represents A Swift And Significant Retreat By DOJ 32
3. The CIS Overstates The Terms Of The RPFJ, Reflecting The
Indefensibility of the RPFJ Itself 33
II. the rpfj must meet the legal standards normally applicable to
antitrust remedies 34
A. The Relief Should "Terminate The Illegal Monopoly" 35
B. The Relief Should Prevent "Practices Likely To Result In
Monopolization In The Future" 36
C. The Relief Should "Deny To The Defendant The Fruits Of Its
Statutory Violation" 37
D. Broader Principles Applicable To Injunctive Relief Also Should
Inform The Analysis Of The RPFJ 37
III. The RPFJ falls far short of providing a remedy for proven
offenses upheld on appeal 39
A. DOJ's Effort To Minimize The Scope Of The DC Circuit's Affirmance
Cannot Obscure The Failure Of The RPFJ To Remediate Clear, Proven
Violations 39
B. The RPFJ Simply Restates The Antitrust Laws At Critical Points
And Thus Forfeits The Clarity And Efficiency Of The Contempt Process
41
C. The RPFJ Provides No Remedy For Microsoft's Suppression Of The
Browser And Java 42
IV. The Icon-focused Oem flexibility Provisions Are Ineffective 44
A. The PFJ Permits Microsoft's To Continue Illegally Commingling
Middleware Code With The Code For The Monopoly Operating System 45
1. The DC Circuit Specifically Condemned Commingling Twice 46
2. The Failure To Limit Commingling Is Critical Because Ubiquity
Trumps Technology In Platform Software Markets 49
3. The RPFJ Retreats From The 1995 Consent Decree 52
4. The RPFJ Encourages Illegal Commingling By Placing The Critical
Definition of Windows Under Microsoft's Exclusive Control 53
B. Empirical Evidence Shows That The Icon Flexibility Provisions
Will Not Be Used 54
C. The Icon Flexibility Provisions Require--And
Accomplish--Little 55
D. The 14-Day Sweep Provision Effectively Nullifies RPFJ
III(H) 57
E. By Placing The Burden To Restore Competition On OEMs, The PFJ
Leads To No Remedy At All For Much Of The Misconduct At Issue 58
F. The RPFJ Permits Microsoft To Control Consumers" Access To
Innovation To Suit Its Monopolistic Aims 59
V. The API and Communications protocol Disclosure Provisions Are
ineffective 60
A. The API Provisions Require Little, If Anything, Beyond Current
Disclosure Practices In Microsoft's Self-Interest 60
B. The RPFJ Does Not Require Disclosure of Windows APIs, But Rather
Lets Microsoft Determine The Scope of Disclosure Through The Design
and Labeling of Its Operating System And Middleware 61
C. The Definition of "Microsoft Middleware" Gives
Microsoft Further Leeway to Limit Its Disclosure Obligation 63
1. The RPFJ Requires Microsoft To Disclose Only The APIs Used By The
"User Interface" Or Shell Of Microsoft Middleware 64
2. The RPFJ Requires Microsoft To Disclose APIs Only For
"Microsoft Middleware" That Is Distributed Separately
From
[[Page 29037]]
Windows, Yet Is Distributed To Update Windows 65
3. The Limitation Of Microsoft Middleware To
"Trademarked" Products Further Eviscerates The API
Disclosure Provision 65
D. The Disclosure Provisions--Particularly Those Concerning
"Communications Protocols"--Depend On An Undefined
And Thus Unenforceable Concept of "Interoperability" 69
E. The Narrow Scope Of The Disclosure Provisions Contrasts Sharply
With The Broader Definitions In DOJ's Earlier Remedy Proposals 70
F. The "Security" Exceptions in Section III(J) Permit
Microsoft To Avoid Its Disclosure Obligations 72
1. The Exclusions for Security-Related APIs and Protocols in
RPFJ(J)(1) Permit Microsoft To Hobble Disclosures That Are Critical
in Internet Computing 73
2. RPFJ III(J)(2) Permits Microsoft To Refuse Effective Disclosure
To A Range Of Potentially Effective Competitors 77
G. RPFJ III(I) Would Place A Judicial Imprimatur On
Microsoft's Use Of Technical Information As A Lever To Extract
Competitors" Intellectual Property 81
VI. built-in delays exacerbate the decree's unjustifiably brief
duration 82
VII. Additional weaknesses undercut the rpfj 85
A. The Anti-Retaliation Provisions Are Deeply Flawed 85
B. Microsoft Can Evade The Price Discrimination Restrictions 87
C. Microsoft Can Enforce De Facto Exclusivity 88
VIII. THE RPFJ'S ENFORCEMENT MECHANISMS ARE FUNDAMENTALLY
INADEQUATE 89
CONCLUSION 93
INTEREST OF THE COMMENTER
The Computer & Communications Industry Association
("CCIA") is an association of computer, communications,
Internet and technology companies that range from small
entrepreneurial firms to some of the largest members of the
industry. CCIA's members include equipment manufacturers, software
developers, providers of electronic commerce, networking,
telecommunications and on-line services, resellers, systems
integrators, and third-party vendors. Its member companies employ
nearly one million persons and generate annual revenues exceeding
$300 billion. CCIA's mission is to further the interests of its
members, their customers, and the industry at large by serving as
the leading industry advocate in promoting open, barrier-free
competition in the offering of computer and communications products
and services worldwide. CCIA's motto is "Open Markets, Open
Systems, Open Networks, and Full, Fair and Open Competition,"
and its website is at www.ccianet.org. For nearly 30 years, CCIA has
supported antitrust policy that ensures competition and a level
playing field in the computer and communications industries. That
involvement antedates the founding of Microsoft, much less its
acquisition of its first monopoly and its refinement of
anticompetitive techniques. CCIA supported the Tunney Act in the
1973 congressional hearings preceding the enactment of that
legislation, and played active roles on the side of competition in
other significant antitrust cases, including those against AT&T
and IBM. Before participating as amicus curiae at the trial and
appellate stages of the current Microsoft case, CCIA participated as
a leading amicus curiae in the proceedings examining the last
Microsoft consent decree in 19941995, both in the district court and
in the court of appeals. As a consequence, CCIA and its members are
intimately familiar with the shortcomings of that decree, and its
failure to prevent or deter Microsoft from continuing on an
anticompetitive course. Microsoft's conduct in the intervening
years, including the period while this case has been litigated, has
only sharpened CCIA's awareness of Microsoft's dedication to driving
out competition from as many aspects of the computer-software and
related industries as possible. Microsoft may repeat its attempts to
mischaracterize CCIA as a mere voice for competitors, but that
innuendo cannot withstand scrutingy in light of the diversity of
CCIA's membership now and over the years, combined with CCIA's 30
years of vigorous commitment to supporting openness and competition
in the computer technology and communications industries. In hopes
that a meaningful remedy in this case will prevent Microsoft from
further expanding the scope of its monopoly, and with the certainty
that the current Revised Proposed Final Judgment
("RPFJ") falls far short of that task, CCIA submits this
analysis of the RPFJ in conjunction with the economic analysis of
Nobel laureate Joseph Stiglitz and his colleague Jason Furman, and
the Declaration of Edward Roeder.
INTRONUCTION
The Tunney Act was designed to constrain the Department of
Justice ("DOJ") from entering into settlements that
provided DOJ with an exit from an antitrust case but did not provide
the public with a remedy commensurate with the defendant's antitrust
violations. The Revised Proposed Final Judgment (RPFJ) in this case
does not provide adequate relief for the extensive and thoroughly
proven antitrust violations it purports to remedy. Review of the
RPFJ in this case should be especially searching because there can
be no doubt about Microsoft's liability. For the first time in the
history of the Tunney Act, the Court will review a proposed
settlement reached after liability has been not only imposed, but
unanimously affirmed on the government's most sweeping and
economically significant theory. That clear-cut liability, and the
voluminous Findings of Fact and trial record, place the Court in
this case in a different position from courts reviewing pre-trial
settlements. Because there is no litigation risk on liability, the
Court is uniquely situated to evaluate any asserted litigation risk
as to remedy. Established principles of antitrust relief provide the
Court in this case with concrete, recognized standards to ensure
that the settlement serves the public interest in a way that courts
reviewing pre-trial settlements cannot. Magnifying the need for
close measurement of the RPFJ by objective principles is Microsoft's
silence, in its filing under 15 U.S.C. 16(g), about its effort to
truncate this case by a lobbying campaign of unprecedented scope
directed at the Executive and Legislative Branches
alike--despite extensive public reports of that lobbying.
Microsoft's effort to deny the obvious gives rise to an inference
that it has something to hide.
The terms of the RPFJ provide the strongest reason for close
scrutiny, because they cannot withstand analysis. The RPFJ would not
provide a meaningful remedy for Microsoft's extensive campaign of
exclusionary acts. That campaign suppressed the most serious threat
to Microsoft's monopoly in the past decade, and not only prevented
the erosion of the applications barrier to entry that insulates the
monopoly, but increased the bar to new competition. The RPFJ ignores
some of the most significant holdings of the court of appeals,
however, including its separate imposition of liability for
Microsoft's commingling of middleware code with the code for the
Windows operating system.
More fundamentally, the RPFJ misses the point of Microsoft's
illegal conduct, which was to prevent erosion of the applications
barrier to entry by preventing middleware from attracting software
developers to the middleware application programming interfaces
("APIs"). The RPFJ's basic premises, moreover, ignore
the current economic and technical realities of the computer and
software markets. In the seven years since Microsoft began the
illegal conduct at issue in this case, Microsoft has strengthened
its operating systems monopoly. The Internet browser, formerly a
threat to that monopoly, has become an adjunct to it, with
Microsoft's 91% share of that product adding further insulation to
the operating systems monopoly. Microsoft's unadjudicated monopoly
over personal productivity applications--a key to the
applications barrier to entry in the operating systems
market--likewise has grown in market share and market power.
But the RPFJ does not try to deprive Microsoft of any of the
benefits of its illegal activity directed at the browser and other
middleware. DOJ's remedial theory rests entirely on unidentified
future middleware threats. In fact, there are no technologies today
presenting a threat as intense as that presented by the Netscape
browser and Java, and the duration of the RPFJ is so short that it
almost certainly will expire before any significant new threats
materialize. Aside from some restrictions on commercial retaliation
that at best might keep matters from getting worse, the RPFJ relies
on two sets of putative obligations to achieve a more competitive
market. But neither the provisions aimed at original equipment
manufacturer ("OEM") flexibility nor those addressing
information disclosure requirements in fact require anything
competitively meaningful. In large part, these provisions replicate
Microsoft's current business practices respecting the disclosure of
technical information and the configuration of end-user access to
middleware products.
The OEM flexibility sections in RPFJ III(C)
and III(H) are literally superficial,
[[Page 29038]]
principally addressing desktop icons rather than the middleware code
itself, which contains the APIs relied on by software applications
developers. Even if successful, the flexibility provisions would not
affect the applications barrier to entry. Moreover, these provisions
largely restate current business practices or provide OEMs with
flexibility that both Microsoft and DOJ understand from experience
will never be exercised. OEMs have little or no incentive to
exercise their options; if they decline to do so, then the
flexibility provisions will have no competitive consequences for the
industry. The RPFJ's information disclosure sections (Ill(D) and
Ill(E)) are so transparently insubstantial as to cast doubt on the
entire proposal. The purported disclosure requirements trace back to
definitions that are committed to Microsoft's control, are circular,
or simply do not exist. Neither DOJ nor any other objective observer
could have any idea precisely which APIs or protocols must be
disclosed. The RPFJ's provisions and definitions are so vague that
only two practical results are possible. Either everyone will simply
ignore the decree, which plainly would not be in the public interest
for an antitrust remedy, or the Court will have to take primary
responsibility for defining its terms during enforcement
proceedings. DOJ's answer seems to be to let Microsoft set the terms
of its obligations: the RPFJ gives the defendant "sole
discretion" to define the decree's most important term,
"Windows Operating System Product," which appears 46
times to delimit the RPFJ's 10 substantive
Indeed, much of DOJ's Competitive Impact Statement
("CIS") seems to reflect an understanding that the RPFJ
is inadequate in several critical respects. The CIS defines terms
not defined in the RPFJ, exaggerates the scope of certain RPFJ
provisions, and redefines other terms in order to minimize the
impact of some of the broad exemptions in the RPFJ. It is the RPFJ
that the Court would have to enforce, however, as the CIS is not
part of the contract between DOJ and Microsoft.
In sum, although the RPFJ's provisions superficially seem to
restrict Microsoft's practices, there is no substance behind them.
The provisions accomplish little beyond laying down criteria for
Microsoft to follow in order to avoid any interference with its
continuing campaign of illegal monopolization. The terms of the
RPFJ, as much as the circumstances of the settlement, strongly
suggest that Microsoft and the Department of Justice shared a desire
to end this case, rather than to provide an effective remedy for
Microsoft's substantial antitrust violations. The 1995 consent
decree with Microsoft produced uninterrupted illegal monopolization,
prompting the filing of this case in 1998. The Court can expect the
same with this decree. The RPFJ, if approved, might temporarily end
DOJ's involvement, but would not provide the type of remedy that the
public interest and the Tunney Act demand. To the contrary, because
the harm to the competitive process caused by Microsoft's
adjudicated illegal conduct is certain, a remedy that masks but does
not cure that harm affirmatively injures the public interest, and
therefore should be rejected.
A. Liability Rests On Microsoft's Suppression Of Middleware
Threats That Threatened To Erode The Applications Barrier To Entry
This case is about Microsoft's devastatingly thorough suppression of
threats to its Windows operating system ("OS") monopoly
by "middleware." That monopoly was insulated from
competition by the applications barrier to entry described by the
court of appeals and the CIS. See United States v. Microsoft Corp.,
253 F.3d 34, 55-56 (DC Cir. 2001) ("Microsoft
III"); CIS 10-11, 66 Fed. Reg. 59,452, 59,462 (2001).
See also Declaration of Joseph E. Stiglitz & Jason Furman
7-9 ("Stiglitz/Furman Dec.") (attached). The
middleware at issue in this case exposed APIs that could be used by
software applications developers to write programs that did not rely
on the underlying Windows operating system. As Microsoft recognized,
if developers embraced non-Microsoft middleware APIs and designed
their products to run on that middleware rather than directly on an
operating system, "middleware" of this kind "would
erode the applications barrier to entry," as
"applications * * * could run on any operating system on which
the middleware product was present with little, if any,
porting." Microsoft III, 253 F.3d at 55. The threat that
"middleware could usurp the operating system's platform
function," id. at 53, prompted Microsoft's anticompetitive
conduct. But non-Microsoft middleware can become a competing
platform only if developers write software that calls on the non-
Microsoft middleware APIs. Most developers will create software only
to run on platforms that are distributed widely enough for the
developers to be reasonably certain that the APIs (on which their
programs rely) will be present on most, if not all PCs. Likewise, if
developers can be certain that Microsoft's middleware APIs are
present on all PCs, this will strongly influence their initial
decision as to whether it is worth the effort to write applications
to alternative, non-Microsoft middleware APIs. The successful theory
of the case--proved and accepted by two courts--is that
Microsoft engaged in an "extensive campaign of exclusionary
acts" that were designed "to maintain its
monopoly" by suppressing middleware threats posed by the
Netscape Navigator Internet browser and the cross-platform Java
technologies. CIS 9, 66 Fed. Reg. 59,462; Microsoft III, 253 F.3d at
53-56, 60-62, 74-78. Microsoft's response to this
threat guaranteed that developers would not use the APIs of
competing middleware, destroying the platform threat. Because
Microsoft has a monopoly over the OS, it can ensure that its own
versions of a middleware product have universal distribution, so
that Microsoft's middleware APIs will be present on all PCs. For
example, because Windows is both an operating system and a
distribution channel for Microsoft's technologies, Microsoft could
and did ensure that the code for its Internet Explorer
("IE") browser was distributed to every PC.
Ensuring that the code for Microsoft middleware was on every PC
accomplished two related goals. First, it guaranteed instant and
unassailable ubiquity for the Microsoft version of the middleware
and the middleware APIs on which developers rely. Second, the forced
ubiquity of Microsoft middleware prevents competing middleware from
achieving ubiquity, or anything like it, because few distribution
channels will incur the support and other costs of distributing two
versions of the same functionality. A key theory of the case is that
the applications barrier to entry could have been eroded only if
developers chose and used alternative middleware platforms on which
to write software. End-user access to middleware was significant
only to the extent it influenced developers" choices to write
to the APIs of that middleware. Thus, ensuring that the code for the
Microsoft version of middleware is on every PC destroys the
competitive threat presented by the competing middleware's APIs,
since few developers will use them in preference to Microsoft
middleware APIs that are certain to be ubiquitous. This fact
provides the essential context for any meaningful analysis of the
information disclosure and OEM flexibility provisions of the RPFJ.
B. The RPFJ Does Not Prevent Microsoft From Abusing Its Position
And Does Not Meet Basic Standards For An Antitrust Remedy
The DC Circuit set out a simple standard for measuring the legal
sufficiency of any remedy selected in the Microsoft litigation: the
remedy must "seek to "unfetter [the] market from
anticompetitive conduct," * * * to "terminate the
illegal monopoly, deny to the defendant the fruits of its statutory
violation, and ensure that there remain no practices likely to
result in monopolization in the future." Microsoft III, 253
F.3d at 103 (quoting Ford Motor Co. v. United States, 405 U.S. 562,
577 (1972), and United States v. United Shoe Machinery Corp., 391
U.S. 244, 250 (1968)). As the District Court recognized in beginning
remedy proceedings on remand (9/28/01 Tr. 6-7), not one word
in the DC Circuit's opinion suggests the slightest antipathy toward
any conduct remedy related to the illegal monopolization that the
Court of Appeals exhaustively condemned.\1\ The District Court
warned the plaintiffs to be "cautiously attentive to the
efficacy of every element of the proposed relief." 9/28/01 Tr.
8. That is, the plaintiffs must make sure that the proposed remedy
works.
---------------------------------------------------------------------------
\1\ Indeed, in denying rehearing, the DC Circuit made
crystal clear that "[n]othing in the Court's opinion is
intended to preclude the District Court's consideration of remedy
issues." Order, at 1 (DC Cir. Aug. 2, 2001) (per curiam).
---------------------------------------------------------------------------
That admonition appears to have fallen on deaf ears. Because
liability has been established and affirmed in great detail, the
scope of the District Court's appropriate deference to DOJ is
extremely limited because the range of permissible action by DOJ is
closely confined. There is no litigation risk other than the risk
that the District Court would not approve a particular remedy, or
that the District Court's exercise of discretion in approving a
remedy might be reversed on appeal. A remedy, even one imposed by
agreement, must provide adequate relief for the violations that have
been proved, however. DOJ is entitled to deference only for choices
that fall within the range of adequate
[[Page 29039]]
relief. The RPFJ misses the point of the central theory of
liability. The RPFJ does not impose certain, enforceable, or
competitively significant obligations on Microsoft to restore
competition or to avoid suppressing future threats. The RPFJ allows
Microsoft to keep every anticompetitive gain that resulted from its
illegal conduct, simply requiring Microsoft to find new and slightly
different ways to accomplish its anticompetitive goals. DOJ seems to
recognize that the case focused on two specific
products--Netscape Navigator and Java--that embodied the
broader threat of middleware and the Internet to the stability and
significance of Microsoft's monopoly. The RPFJ does nothing to
restore the specific competitive threat posed by an independent
Internet browser. It does nothing to restore the threat of cross-
platform Java. And it does nothing to protect any other middleware
threat--in the unlikely event that another such threat might
arise within the short duration of the RPFJ--from much similar
exclusionary conduct, or indeed from the identical commingling of
code that sealed Netscape's fate. Rather, the RPFJ appears to assume
that it is still 1995, and that the threat of the Internet browser
can begin anew without confronting a more thoroughly entrenched
Microsoft. The RPFJ does not take account of the impact on
participants at different levels of the computer and software
industries of an additional seven years of Microsoft's
anticompetitive abuses. That view does not accord with reality, and
the provisions intended to permit open competition in that
counterfactual world cannot achieve their goal.
C. The Obligations That Supposedly Restore Competitive
Conditions In Fact Make Microsoft Do Virtually Nothing Against Its
Will
The RPFJ purports to give current and future middleware the
ability to present the same threats to the Microsoft monopoly that
Netscape and Java presented before the onset of Microsoft's illegal
conduct. DOJ describes the obligations in the RPFJ as if they would
have stopped Microsoft's suppression of Netscape, and as if they
would allow rival middleware vendors to obtain the technical
information that they need to "emulate Microsoft's integrated
functions" (Testimony of Charles James before Senate Judiciary
Committee 7 (Dec. 12, 2001)) and to step into the shoes of Microsoft
middleware in relation to Windows and the Windows monopoly. The RPFJ
does not achieve those goals. Most of the RPFJ reduces to two sets
of obligations, along with some prohibitions on exclusive deals and
on retaliation against those who take advantage of Microsoft's
obligations. One set of obligations appears to restrain Microsoft
from taking particular actions to interfere with OEMs"
placement of the icons of Non-Microsoft Middleware on their
machines, or with end-users" use of those products. These OEM
flexibility provisions principally rely on the OEMs to provide a
remedy for Microsoft's misconduct. The other set of obligations
requires a certain degree of disclosure of APIs and Communications
Protocols to allow competing software products can
"interoperate" -an undefined term--with the
monopoly OS. For the most part, the obligations placed on Microsoft
by the RPFJ simply replicate current options voluntarily provided by
Microsoft. For example, Microsoft must continue to disclose the APIs
it currently discloses in the Microsoft Developers" Network
(MSDN), a program Microsoft developed to further its self-interest
in making the Windows platform popular with software developers. And
Microsoft must continue to allow end-users to delete icons from the
desktop and start menu. Such provisions at most simply prohibit
Microsoft from making matters worse than they are after Microsoft's
years-long anticompetitive campaign. Indeed, the RPFJ in some
instances specifically approves potential misuse of Microsoft's
current voluntary implementations of the flexibility and disclosure
provisions. To begin with the flexibility provisions, their chief
flaw is their focus on icons rather than on middleware
functionality. This is literally a superficial approach. Microsoft
can include its own middleware and middleware APIs on every PC.
Developers will know those APIs are there and consequently will
write to them in preference to the APIs of a competing product that
may or may not be on a particular machine. No provision of the RPFJ
restricts Microsoft's insertion and commingling of middleware code
into the "Windows Operating System Product" bundle that
Microsoft receives the right to define for decree purposes "in
its sole discretion." RPFJ VI(U). From the point
of view of developers--and thus of the ability of middleware to
erode the applications barrier to entry--these
"flexibility" provisions are meaningless. Even to the
extent that competing middleware vendors might obtain favorable
placement for their products" icons in preference to the icons
for Microsoft products, that achievement would be both superficial
and temporary. The functionality of the Microsoft product would
remain on the machine, and Microsoft could insist on its invocation
for a variety of functions. And, 14 days after a PC first boots up,
Microsoft would be free to nag users to click a "Clean Desktop
Wizard" which would organize icons in the way that suited
Microsoft. There is nothing in the RPFJ to stop that
"Wizard" from resetting default applications to coincide
with Microsoft's preferences as well, or even from enhancing the
product so that it becomes a Clean File Wizard to remove code of
competing middleware with a single click. These provisions place
responsibility for restoring competition on innocent OEMs and ISVs
rather than on Microsoft. And many provisions give end-users what
they have now: the ability to remove an icon from the desktop or a
program menu by right-clicking it and selecting
"Delete," or by dragging it to the Recycle Bin. The
provisions do change the status quo in one way. The "Add/
Remove" function, which now removes some underlying code for
applications, will only remove a few icons when the removed
application is Microsoft middleware. The disclosure provisions are
no better. The RPFJ requires Microsoft to disclose APIs between
"Microsoft Middleware" and a "Windows Operating
System Product," but the definitions of those terms are so
completely within Microsoft's control that it is impossible to tell
whether Microsoft ever would have to disclose an API that might have
competitive significance. As noted above, a "Windows Operating
System Product" is whatever Microsoft says it is.
"Microsoft Middleware" must be distributed separately
from the OS (unlike, e.g., the current version of Windows Media
Player). "Microsoft Middleware" must be
"Trademarked" in a way that would exclude Windows
Messenger, may exclude Windows Media Player, and certainly would
exclude any products that followed Microsoft's practice of simply
combining the Microsoft(r) or Windows(r) marks with a generic or
descriptive term. Indeed, because "Microsoft Middleware"
need not mean any more than the user interface of a middleware
functionality that meets the other definitional requirements, see
RPFJ VI(J)(4), the only APIs that must be disclosed are
those between the middleware user interface and
"Windows," which Microsoft in its discretion can define
to include all of any given middleware functionality. See id.
VI(U). Microsoft need not disclose how the middleware
actually invokes Windows to work, except for the way that the OS
displays the middleware's shell. The disclosure provisions applying
to Communications Protocols are similarly weakened by non-existent
definitions. The disclosable Protocols are those required to
"interoperate"--whatever that may mean--with
equally undefined "Microsoft server operating products."
RPFJ III(E). In addition, the Communications Protocol
disclosure provisions are limited by sweeping exceptions applying to
security protocols that are intertwined with all significant
computer-to-computer communication. See id. III(J)(I).
Microsoft can withhold parts of those Protocols (and, indeed, parts
of APIs) on the basis that disclosure would compromise security of
an installation. If this exemption were limited to the customer-
specific data like encryption keys or authorization tokens, it would
be necessary, not objectionable. But the exemption explicitly
permits Microsoft to withhold portions of the Protocols and APIs
themselves, which necessarily makes "interoperation" (as
that term normally is used) incomplete. Interoperation, however, is
an all-or-nothing state. Software that can use only parts of APIs
and Communications Protocols simply cannot
"interoperate" with the software on the other side of
the API or Protocol. But that is not all. RPFJ
III(J)(2) permits Microsoft to refuse to disclose
security-related Protocols or APIs to any company that does not meet
Microsoft's standards of business viability or its standards for a
business need. Again, little if anything is left of this disclosure
requirement if Microsoft chooses to resist disclosure when that
serves its anticompetitive goals. One thing is certain. Unless
Microsoft and DOJ alike render the RPFJ irrelevant by simply
ignoring it, the District Court will be faced again and again with
the task of interpreting the RPFJ's indistinct provisions. Microsoft
has demonstrated its incentive and ability to contest even the most
seemingly obvious points of any court order.
[[Page 29040]]
D. The Public Interest Requires An Effective Remedy That The
RPFJ Does Not Provide
Despite the belated efforts of DOJ to minimize the scope of this
case, it remains the largest, most successful prosecution for
monopolization liability since at least the Second World War. The DC
Circuit affirmed "the District Court's holding that Microsoft
violated 2 of the Sherman Act in a variety of
ways." 253 F.3d at 59. The breadth of that holding is clear
from the 20 Federal Reporter pages consumed by the court's detailed
discussion of Microsoft's array of exclusionary behavior. The
competitive significance of the conduct condemned by that holding is
explained both in the opinion, in the Declaration of Joseph E.
Stiglitz and Jason Furman ("Stiglitz/Furman Dec.")
16-20, and in the Comment of Robert E. Litan, Roger G. Noll,
and William D. Nordhaus ("Litan/Noll/Nordhaus Comment")
12-31, among other submissions for this Tunney Act proceeding.
The difficulties encountered by peripheral claims are irrelevant,
particularly because all of the challenged conduct supported
monopolization liability in addition to one or more of the since-
abandoned theories. The supposed "narrowing" left a huge
monopolization case with a stark judgment affirming the government's
theory. The RPFJ does not provide a remedy commensurate with that
liability.
The RPFJ is insufficient for another overarching reason. The
passage of time has only exacerbated the problem of Microsoft's
successful abuse of its operating systems monopoly to extend that
monopoly to embrace other sectors of computing and to forestall
threats to the monopoly from those sectors. Microsoft's monopoly
over Internet browsing is complete, as its current 91% market share
indicates. Julia Angwin, et al., AOL Sues Microsoft Over Netscape in
Case That Could Seek Billions, WALL ST. J., Jan. 23, 2002, at B1.
Even the RPFJ recognizes, albeit through toothless provisions, that
Microsoft is using its desktop OS monopoly to force greater use of
its server operating systems. And Microsoft's efforts to use the
inclusion of its Passport authentication software on every Windows
machine as a means of directing through a Microsoft server all
authentication and identification transactions--gaining a
literal chokehold over the communications aspect of Internet
computing--is so significant that Microsoft sought and obtained
an exemption in the RPFJ specifically designed to excuse that known
monopolistic strategy. See RPFJ
III(H)(1)[second] \2\; see also id.
III(J).
---------------------------------------------------------------------------
\2\ RPFJ III(H) contains two subsections (1)
and (2). We distinguish between the two sets of subsections with the
bracketed terms "first" and "second."
---------------------------------------------------------------------------
Microsoft has made ample use of the seven years since the
beginning of the conduct at issue in this case. The RPFJ is wholly
inadequate even on its own terms, which assume that the world has
returned to 1995. But the RPFJ does not begin to address what has
happened since then. The public interest in a remedy that achieves
what antitrust law says it must cannot be obscured by focusing
either on the preference of the technology industry for standards,
or on the never-litigated assumption that Microsoft obtained its
original operating systems monopoly legally in the 1980s. The last
premise, after all, still suggests that the last ten years or so of
Microsoft's hegemony have resulted from the illegal acts that
prompted two government antitrust lawsuits. If DOJ's enforcement
history is to be credited, Microsoft has at least doubled the life
of its monopoly through illegal conduct. In addition, even if the
nature of software platforms generally, or computer operating
systems in particular, results in transitory single-firm dominance,
that does not mean that competition has no place, or that entrenched
monopoly is somehow without social costs. See Stiglitz/Furman Dec.
13-16. Innovation results in the periodic replacement or
"leapfrogging" of one standard by another. This is not
some meaningless replacement of one monopoly with another, as some
would have it. To the contrary, as economists--including those
of the Chicago school--have recognized, "competition * *
* 'for the field"' provides consumers with
substantial benefits. See Microsoft III, 253 F.3d at 49 and sources
cited therein. But if competition in a market is limited in scope to
serial competition for transitory dominance, predatory conduct is
especially harmful. See generally Stiglitz/Furman Dec. 13-16.
The monopolist may need to eliminate only a few incipient but
significant threats in the course of a decade in order to transform
transitory dominance into a durable, even impregnable monopoly. That
is what happened here. Although Netscape Navigator had not developed
into a competing applications platform when Microsoft cut off its
revenue sources, Netscape contemplated just such a
development--and Microsoft both contemplated and deeply feared
it. The outcome of the competition that Microsoft thwarted is
unknowable. But there will be no further competition--much less
competitive outcomes--if Microsoft is allowed to repeat the
course of conduct it undertook here. But the RPFJ permits Microsoft
to continue to fortify and expand its monopoly. Indeed, the RPFJ
provides an imprimatur for Microsoft to continue and expand a whole
range of additional, related anticompetitive practices. As a
consequence, the RPFJ is an instrument of monopolization, not a
remedy for it. The Court should not add judicial endorsement to
DOJ's agreement to give up the case. The "public
interest," within the meaning of the Tunney Act, 15 U.S.C.
16(e), requires far more effective relief.
I. THE TUNNEY ACT REQUIRES CLOSE SCRUTINY UNDER THE PRESENT
CIRCUMSTANCES
The Tunney Act exists "to prevent 'judicial rubber
stamping"' of proposed antitrust consent decrees. United
States v. Microsoft Corp., 56 F.3d 1448, 1458 (DC Cir. 1995)
(quoting H.R. Rep. No. 1463, 93d Cong. 2d sess. 8, reprinted in 1974
U.S.C.C.A.N. 6535, 6538) ("Microsoft"); United States v.
BNS, Inc., 858 F.2d 456, 459 (9th Cir. 1988); In re IBM, 687 F.2d
591, 600 (2d Cir. 1982). Upon enactment it was immediately clear
that "Congress did not intend the court's" review of a
proposed settlement "to be merely pro forma, or to be limited
to what appears on the surface." United States v. Gillette
Co., 406 F. Supp. 713,715 (D. Mass. 1975) (Aldrich, J.). The Tunney
Act requires particularly close scrutiny of the RPFJ in this case.
The government seeks to remedy a proven, well-defined, serious
violation of the antitrust laws. Microsoft's heavy lobbying of the
executive and legislative branches in order to bring political
pressure for a lenient settlement heightens the need for scrutiny,
and in addition makes necessary the Court's active investigation
into Microsoft's failure to disclose the bulk of that lobbying
despite the command of 15 U.S.C. 16(g). The lenient
terms of the RPFJ itself further underscore the need for close
judicial scrutiny. Never in the history of the Tunney Act has a
Court been confronted with this combination of an impregnable
judgment of liability, pervasive lobbying, and apparent surrender by
the federal government. The circumstances here indicate exactly the
sort of "failure of the government to discharge its
duty"--whether or not actually
"corrupt"--that even DOJ concedes warrants close
judicial scrutiny of a settlement. CIS 66, 66 Fed. Reg. 59,476
(quoting United States v. Mid-America Dairymen, Inc., 1997-1
Trade Cas. 61,508, at 71,980, 1977 WL 4352 at *8 (W.D. Mo.
1977)).
A. The Government's Victory On Liability Removes Litigation Risk
And Therefore Limits Deference
The CIS suggests (at 65-68, 66 Fed. Reg. at
59,475-476) that the Court owes nearly absolute deference to
DOJ's decision to retreat from its appellate victory. That is not
true. The affirmance of liability on appeal removes any speculation
that "remedies which appear less than vigorous" simply
"reflect an underlying weakness in the government's
case." Microsoft I, 56 F.3d at 1461. There is no
"underlying weakness"; liability is a given, and
provides a clear benchmark for measuring whether the proposed relief
is sufficiently effective to come "within the reaches of the
public interest." Id. at 1460. Those "reaches" are
narrower when liability is proved and affirmed than when it is
merely alleged, as it was in Microsoft I.
1. The Imposition And Affirmance Of Liability Remove Any
Constitutional Concerns About Searching Review And Require The Court
To Perform Its Constitutional Duty
Most important, the current posture of this case places it
beyond the scope of the prudential and constitutional concerns
expressed by some courts (and dissenting Justices) about judicial
scrutiny of DOJ's charging decisions, or of its settlement of
unproven claims. It may be that when "the government is
challenged for not bringing as extensive an action as it might, a
district judge must be careful not to exceed his or her
constitutional role." Microsoft I, 56 F.3d at 1462. Such
concerns did not persuade the majority of the Supreme Court,
however, which over a dissent rejected similar arguments in
summarily affirming the modifications imposed by the district court
in the AT&T consent decree. See Maryland v. United States, 460
U.S. 1001 (1983). In any
[[Page 29041]]
event, when the action has been brought, tried, and won, and the
only question is whether the proposed relief is adequate, the
constitutional concerns dissipate. Because DOJ already made the
discretionary decision to bring the case, and successfully proved
liability to the satisfaction of two courts, the Court in reviewing
this settlement runs no risk that by exercising its normal remedial
discretion under established legal principles it somehow might be
said "to assume the role of Attorney General." Microsoft
I, 56 F.3d at 1462. It was precisely the absence of a
"judicial finding of illegality" that might impede the
Tunney Act from "supply[ing] a judicially manageable standard
for review." Id. at 1459. Here, two courts have provided the
"findings that the defendant has actually engaged in illegal
practices" that were missing in both Microsoft I and AT&T
(like other cases settled before trial). Id. at 1460-1461
(emphasis added). In addition, the appellate affirmance imposed
monopolization liability for all of the significant conduct that had
been alleged to support the additional, largely supererogatory legal
theories that were rejected as ground for additional liability.
It is accordingly entirely appropriate, and indeed necessary,
for the Court in this case "to measure the remedies in the
decree as if they were fashioned after trial," Microsoft I, 56
F.3d at 1461, because they were "fashioned after trial"
and appellate affirmance. The Court need not "assume that the
allegations in the complaint have been formally made out"
(id.), but rather knows beyond doubt exactly which allegations were
proved. There is a "judicial finding of relevant markets,
closed or otherwise, to be opened" and "of
anticompetitive activity to be prevented." Maryland v. United
States, 460 U.S. at 1004 (Rehnquist, J., dissenting). "[T]hat
there was an antitrust violation," and "the scope and
effects of the violation," were not assumed, as they must be
in a pretrial settlement, but proved to the satisfaction of two
courts. Id. Very limited prosecutorial discretion remains in this
situation. The amorphous, policy-laden choices whether to bring a
case and how much to allege, are behind us. The predictive judgment
as to the chances of success on liability likewise is beyond serious
dispute in light of the unanimous affirmance of monopolization
liability by the en banc court of appeals. DOJ has some leeway in
choosing a remedy, but its chosen remedy must be "adequate to
remedy the antitrust violations alleged in the complaint,"
United States v. Bechtel Corp., 648 F.2d 660, 665 (9th Cir. 1981),
under the well-established legal standards for antitrust relief. See
Microsoft III, 253 F.3d at 103. Those standards inform the
"public interest" determination under the Tunney Act,
and, by contrast with the "public interest" standing
alone, are judicially manageable without a doubt. The DC Circuit has
made crystal clear that a consent decree "even entered as a
pretrial settlement, is a judicial act," so that "the
district judge is not obliged to accept one that, on its face and
even after government explanation, appears to make a mockery of
judicial power." Microsoft I, 56 F.3d at 1462. Judicial
approval of the settlement in this case is far more of a classic
"judicial act" than the typical settlement without proof
of liability. As in the context of post-conviction criminal
sentencing, the Court must act as more than a passive recipient of
arrangements made between the parties There is no serious question
that a federal court may reject a plea bargain in its sound
discretion, Fed. R. Crim. P. 11, Santobello v. New York, 454 U.S.
257, 262 (1971), for reasons that may include the "court's
belief that the defendant would receive too light a sentence under
the circumstances." United States v. Adams, 634 F.2d 830, 835
(5th Cir. 1981).\3\ Granted, plea bargains in the criminal context
generally involve admissions of liability. But the case here, if
anything, is stronger here, where liability has been, not admitted,
but established after extensive litigation and affirmed by an en
banc court of appeals over the vigorous objection of the defendant.
---------------------------------------------------------------------------
\3\ See also, e.g., United States v. Robertson, 250 F.3d
500, 509 (6th Cir. 2001); United States v. Greener, 979 F.2d 517,
521 (7th Cir. 1992); United States v. McGovern, 822 F.2d 739, 742
n.4 (8th Cir. 1987); United States v. Randahl, 712 F.2d 1274, 1275
(8th Cir. 1983).
---------------------------------------------------------------------------
At this stage, "the discrepancy between the remedy and
undisputed facts of antitrust violations" can "be such
as to render the decree 'a mockery of judicial
power."' Massachusetts School of Law, Inc. v. United
States, 118 F.3d 776, 782 (DC Cir. 1997) (quoting Microsoft I, 56
F.3d at 1462). By contrast with the concerns expressed in the
pretrial settlement context about the intrusion of Tunney Act courts
on functions that are constitutionally allocated to the executive
branch, the situation after liability is established presents
opposite concerns under our system of separated powers, and of
checks and balances between the branches of government.
Constitutional concerns in this case would arise only if the Court
failed to apply the legal standards governing antitrust relief to
the adjudicated liability here. DOJ asks the Court not only to
abandon its traditional power over the relief to be imposed in an
adjudicated case, but also to ignore the clear command of Congress
to provide a check on the irresponsible exercise of power by a
suddenly and inexplicably compliant prosecutor. The Court should
refuse that suggestion.
2. The Extensive Record And Judicial Opinions Provide Clear,
Manageable Standards For Substantive Review Of The RPFJ
None of the authorities on which DOJ relies involved a full
trial in which liability was proved, much less one in which
liability was affirmed on appeal. Indeed, the statements quoted in
the CIS draw heavily on that fact--that in each case there had
been no finding of liability, and that review of the settlement at
issue necessarily involved second-guessing DOJ's prosecutorial
discretion in making two rather standardless assessments: (1)
whether to bring a case at all, and thus place the matter in a
judicial forum, see Microsoft I, 56 F.3d at 1459-1460, and (2)
the chances for success. See, e.g., Mid-America Dairymen, 1977 WL
4352, at *8 (Tunney Act "did not give this Court authority to
substitute its judgment about the advisability of settlement by
consent judgment in lieu of trial") (emphasis added).
Here, neither of these fundamentally discretionary prosecutorial
judgments is at issue. The decision to bring the case was made years
ago, and the case was litigated and won, establishing liability to a
known extent. It is telling that in asking for broad deference DOJ
places heavy reliance on language from the Ninth Circuit's decision
in United States v. Bechtel Corp., 648 F.2d 660 (9th Cir. 1981). See
CIS 66-67 & n.4; 66 Fed. Reg. 59,476. One could hardly
find a setting more distant from this one. Not only did Bechtel not
involve a finding of liability after full litigation and affirmance
on appeal; and not only did the setting there--alleged
complicity in the "Arab boycott" of Israel in the mid-
1970s--implicate the foreign policy powers of the executive
branch; but the issue before the court in Bechtel was the
defendant's effort to avoid its own settlement by arguing that the
settlement to which it had agreed was "not in the public
interest." Bechtel, 648 F.2d at 665.\4\
---------------------------------------------------------------------------
\4\ Decided in an equally remote context was United States
v. BNS, Inc., 858 F.2d 456 (9th Cir. 1988), in which the Ninth
Circuit approved a preliminary injunction, entered over DOJ's
objection, against a tender offer for an acquisition that a proposed
consent decree would have permitted.
---------------------------------------------------------------------------
As it happens, however, the court of appeals in Bechtel
enunciated the legal standard that should be applied here:
"whether the relief provided for in the proposed judgment was
adequate to remedy the antitrust violations alleged in the
complaint." Bechtel, 648 F.2d at 665 (emphasis added). That is
precisely the standard that DOJ wishes to avoid. Where liability is
a given, as it is here, the Court must ensure that the
"remedies negotiated between the parties and proposed by the
Justice Department clearly and effectively address the
anticompetitive harms" that have been proved. United States v.
Thomson Corp., 949 F. Supp. 907, 913 (D.DC 1996). When the
"anticompetitive harms" and their illegality have been
proved, the fit between those harms and the proposed remedies must
be closer than when those harms merely have been "initially
identified," id., as is usually the case in Tunney Act
proceedings. Even if there were no finding a liability, the Court
would not be compelled "unquestionably [to] accept a consent
decree as long as it somehow, and, however inadequately, deals with
the antitrust problems implicated in the lawsuit." United
States v. Alcan Aluminum, Ltd., 605 F. Supp. 619, 622 (W.D. Ky.
1985) (citing United States v. AT&T, 552 F. Supp. 131,151 (D.DC
1982), aff'd sub nom. Maryland v. United States, 460 U.S. 1001
(1983). With liability in place, however, the Court need not proceed
"on the assumption that the government would have won."
Gillette, 406 F. Supp. at 716 n.2. The government did win. The Court
in this case need not "speculate in regard to the probability
of what facts may or may not have been established at trial."
United States v. Mid-America Dairymen, Inc., 1977 WL 4352, at *1.
Those facts are a matter of record. Whatever narrow deference may be
afforded here amounts only to the tested rule
[[Page 29042]]
that "[i]t is not the court's duty to determine whether this
is the best possible settlement that could have been
obtained." Gillette, 406 F. Supp. at 716 (emphasis added).
Although the Court may not be able to insist on the "best
possible" decree, the proof and affirmance of liability
require the Court to ensure that the RPFJ is at least adequate on
that record under well-established remedial principles. Bechtel, 648
F.2d at 665. The differences are real, but not dramatic, between the
Court's role in deciding whether to accept this settlement in Track
I, and in deciding in Track II what relief to impose at the request
of those plaintiffs who have not abandoned the pursuit of a full and
effective remedy in this case. In each track, the Court must measure
proposed remedies against the legal standards set out by the DC
Circuit and by the Supreme Court. In each track, the Court should
not approve a remedy that is inadequate to meet those standards. In
evaluating the RPFJ, the Court is not at liberty to substitute its
view of equally effective, or marginally more effective relief, if
the terms of the RPFJ are fully adequate to the task as the law
defines it. That is, the DOJ's choices among adequate alternatives
warrant deference, but its determination of what is adequate
warrants none. In the other track, the Court does have the liberty,
not merely to go beyond any decree that might be entered in this
track, but also to insist that the final decree address the
competitive issues in a way that satisfies the Court's view as to
the best and most effective means of opening the operating systems
market to competition, depriving Microsoft of the fruits of its
illegal conduct, and preventing similar monopolistic abuses in the
future. That is, while in this track of the proceeding the Court
cannot insist on the "best possible settlement,"
Gillette, 406 F. Supp. at 716, so long as the proposed relief meets
the remedial standards anchored in antitrust law, in Track II the
Court has not only the power but the duty to impose the "best
possible" decree. B. Broad Deference Is Particularly
Inappropriate Because The Circumstances Are Suspicious
1. Microsoft's Manifestly Inadequate Disclosure Under The Tunney
Act's Sunshine Provisions Weighs Strongly Against Judicial Deference
To The Terms Of The RPFJ
Section 2(g) of the Tunney Act requires Microsoft to file a
"true and complete description" of "any and all
written or oral communications" by it or on its behalf
"with any officer or employee of the United States concerning
or relevant to" the proposed settlement. 15 U.S.C.
16(g) (emphasis added). The only exception from this
requirement is for settlement negotiations between "counsel of
record alone" and "employees of the Department of
Justice alone." Id. (emphasis added).
When Senator Tunney first introduced his bill, he focused on the
significance of the disclosure provision. "Sunlight is the
best of disinfectants," he explained (quoting Justice
Brandeis), and thus "sunlight * * * is required in the case of
lobbying activities attempting to influence the enforcement of the
antitrust laws." 119 Cong. Rec. 3449, 3453 (1973). Minor
amendments to Section 2(g) were designed "to insure that no
loopholes exist in the obligation to disclose all lobbying contacts
made by defendants in antitrust cases culminating in a proposal for
a consent decree." H.R. Rep. No. 1463, at 12 (emphasis added).
The breadth of Microsoft's effort to use political pressure to
curtail this case has no parallel in the history of the antitrust
laws. The ITT episode that prompted the Tunney Act pales in
comparison. It has been widely known that since 1998 Microsoft has
comprehensively lobbied both the legislative and executive branches
of the federal government in an effort to create political pressure
to end this case.\5\ But Microsoft did not disclose any of these
contacts, much less all of them, as the Tunney Act requires.
---------------------------------------------------------------------------
\5\ See generally Declaration of Edward Roeder (attached).
See also, e.g., Ian Hopper, Microsoft Lobbied Congress Over Case,
SAN JOSE MERCURY NEWS, Jan. 11, 2002, at C3; Heather Fleming
Phillips, Washington Politicians Chime In On Microsoft, SAN JOSE
MERCURY NEWS, June 30, 2001, at Al; Rajiv Chandrasekaran & John
Mintz, Microsoft's Window of Influence; Intensive Lobbying Aims to
Neutralize Antitrust Efforts, WASH. POST, May 7, 1999, at Al; James
Grimaldi & Jay Greene, Microsoft Hard At Work Outside Courtroom,
SEATTLE TIMES, Feb. 17, 1999, at Al. See also Microsoft's Political
Donation In Question; South Carolina COP Says Decision To Quit
Lawsuit Coincidental, CHI. TRIB., Dec. 25, 1998, at 3.
---------------------------------------------------------------------------
Rather, Microsoft disclosed only meetings that occurred during
the last round of settlement negotiations ordered by the Court.
Microsoft's insupportable interpretation of its statutory disclosure
duty effectively nullifies the sunshine provisions of the Act, which
are crucial to the Act's protection of the public interest.
a. Contacts With All Branches Must Be Disclosed.
All contacts with "any officer or employee of the United
States" must be disclosed. As Senator Tunney explained,
Included under [section 16(g)] are contacts on behalf of a defendant
by any of its officers, directors, employees, or agents or any other
person acting on behalf of the defendant, with any Federal official
or employee. Thus, * * * the provision would include contacts with
Members of Congress or staff, Cabinet officials, staff members of
executive departments and White House staff. 119 Cong. Rec. at 3453
(emphasis added). In other words, the disclosure applies equally to
contact with any branch of Government, including the Congress. * * *
[T]here is a great deal to be gained by having a corporate official
who seeks to influence a pending antitrust case through
congressional pressure, know that this activity is subject to public
view. Id. Indeed, it is firmly established in other areas of the law
that "officer" of the United States includes Members of
Congress and their employees.\6\
---------------------------------------------------------------------------
\6\ See, e.g., Williams v. Brooks, 945 F.2d 1322, 1325 n.2
(5th Cir. 1991) ("a congressman is an 'officer of the
United States" within the meaning of [28 U.S.C.
1442(a)(1)]"); Nebraska v. Finch, 339 F. Supp.
528, 531 (D. Neb. 1972) ("It is * * * clear that a
representative to the Congress of the United States is an officer of
the United States, not an officer of the district in which he was
elected."); United States v. Meyers, 75 F. Supp. 486, 487
(D.DC 1948) ("Obviously, a Senator of the United States is an
officer of the United States.").
---------------------------------------------------------------------------
But Microsoft did not disclose its extensive and heavily
reported lobbying of Congress. Indeed, upon the remand to the
District Court, Microsoft's lobbying of Congress produced a
letter signed by more than 100 Members urging a swift settlement.
But Microsoft did not disclose even that lobbying, aimed at
pressuring a swift capitulation by the government despite its
victory on appeal, directly before the last round of settlement
negotiations.
b. The "Counsel of Record" Exception Is Very Narrow.
Section 16(g) provides a narrow exception from disclosure for
contacts between "counsel of record alone" (emphasis
added)--that is, without any other corporate officers or
employees also involved--and "the Attorney General or the
employees of the Department of Justice alone." As Senator
Tunney explained, this "limited exception" for attorneys
of record "is designed to avoid interference with legitimate
settlement negotiations between attorneys representing a defendant
and Justice Department attorneys handling the litigation. * * *
[T]he provision is not intended as loophole for extensive lobbying
activities by a horde of 'counsel of record."' 119
Cong. Rec. at 3453. The House Report further clarifies that this
"limited exception" distinguishes
"'lawyering" contacts of defendants from their
'lobbying contacts'." H.R. REP. No. 1463, supra,
at 9. Microsoft did not disclose the well-publicized participation
in the last round of settlement negotiations of its lobbyist-lawyer,
Charles F. "Rick" Rule. It appears that the critical
"negotiations" leading to the RPFJ took place, not in
the offices of Microsoft's counsel of record, but "in
Justice's offices and those of Microsoft legal consultant Rick
Rule." Paul Davidson, Some States Fear Microsoft Deal Has Big
Loopholes, USA TODAY, Nov. 5, 2001. Rule has been a registered
lobbyist for Microsoft for some years, but was not named as counsel
of record until November 15, 2001, after the settlement negotiations
were complete. See Notice of Appearance (D.DC filed Nov. 15, 2001).
That designation--long after the settlement deal had been
struck--cannot retroactively shield his extensive prior
contacts with Mr. James or other executive or legislative officials
from disclosure. Contacts by "[a]ttorney not counsel of
record" must be disclosed. Id. Of course, Microsoft's many
other lobbyists do not conceivably come within this exception. But
Microsoft concealed all of those lobbying contacts.
c. All Communications Urging The Government To Abandon Or Settle
The Case Were "Relevant To" The Proposed Settlement
Section 16(g) requires the disclosure of all contacts
"concerning or relevant to" a proposed settlement. This
statutory definition is intentionally broad. Microsoft's disclosure
interprets the word "concerning" very narrowly, so that
the provision covers only actual settlement discussions--and
only the last round of them. In Microsoft's view, the Tunney Act
would require disclosure only of the very meetings that must precede
any settlement. Microsoft reads the words "relevant to"
right out of the statute. That this statutory provision is broad is
obvious by
[[Page 29043]]
its very terms; in order for the phrase "relevant to"
not to be mere surplusage, it must encompass contacts less directly
focused on the settlement than those that "concern[]"
that agreement. Senator Tunney gave an example: "the provision
would require disclosure * * * of a meeting between a corporate
official and a Cabinet officer discussing "antitrust
policy" during the pendency of antitrust litigation against
that corporation." 119 Cong. Rec. at 3453. The Act borrows
from evidentiary concepts, including the privilege for settlement
discussions, which prompted the narrow exception for counsel of
record. The evidentiary concept of relevance is very broad. See Fed.
R. Evid. 401. "Relevance of evidence is established by any
showing, however slight, that the evidence" makes a legally
important factor "more or less likely." United States v.
Mora, 81 F.3d 781, 783 (8th Cir. 1996) (emphasis added) (citation
omitted). Plainly "relevant" to the question whether a
defendant's lobbying activities influenced the existence and terms
of a consent decree are contacts with the administration, and with
members of Congress, that touch on the desirability of the
government's agreeing to end the case. It is startling, for example,
that Microsoft would omit reference to its efforts to enlist support
for congressional proposals that would have cut DOJ's funding for
the pursuit of this case, and for antitrust enforcement in high
technology industries in general.\7\
---------------------------------------------------------------------------
\7\ See Chandrasekaran & Mintz, supra, WASH. POST, May
7, 1999, at Al; Grimaldi & Greene, supra, SEATTLE TIMES, Feb.
17, 1999, at Al.
---------------------------------------------------------------------------
Disclosure under Section 2(g) is not usually burdensome; most
defendants do not try to win their case politically rather than in
the courtroom. Microsoft's massive and unprecedented effort to
distort the judicial process through political pressure makes its
compliance burdensome, but all the more necessary. It is exactly
this sort of manipulation that the Tunney Act was designed to
discourage by bringing it to light.
d. Microsoft's Flouting Of Its Statutory Duty Counsels
Painstaking Judicial Scrutiny Of The RPFJ Microsoft's cunning
"interpretation" of the statutory disclosure
requirements -so that disclosures reach only the very settlement
discussions that the Tunney Act was not concerned about--sheds
considerable light on Microsoft's likely
"interpretations" of any remedy imposed on it,
especially one like the RPFJ of which it can claim to be an equal
drafter, if not the principal author.
Microsoft's disclosure is so inadequate as to raise questions
about Microsoft's good faith. The filing includes no disclosure of
any lobbying contacts between Microsoft and the administration; it
includes no disclosure of any contacts between Microsoft and members
of Congress; it includes no disclosure of any contacts whatsoever
before September 27, 2001, although it is well known that Microsoft
and the government have tried to settle the government's antitrust
action since before it was filed, and that Microsoft lobbied
Congress to bring pressure on DOJ to settle or simply abandon the
case.
Microsoft should face contempt sanctions for its certification
"that the requirements of [Section 16(g)] have been complied
with and that such filing is a true and complete description of such
communications known to the defendant or which the defendant
reasonably should have known." DOJ should refuse to acquiesce
in Microsoft's deception. Although DOJ cannot be expected to be
aware of all of Microsoft's lobbying of Congress in an effort to
create pressure for a favorable settlement, DOJ should reveal the
end-product of that pressure in the form of communications from
Members and their staffs. And there is no excuse for DOJ to be
complicit with Microsoft when it comes to contacts with DOJ itself.
In particular, DOJ certainly is aware of Mr. Rule's lobbying
contacts with before he belatedly appeared as counsel after the
settlement had been concluded. The proper resolution of this issue
is the appointment of a special master with the ability to examine
the relevant participants under oath. In view of its responsibility
to enforce 15 U.S.C. 16(g) along with the rest of the antitrust
laws, DOJ should request (and support) the implementation of such a
procedure by the Court.
2. The RPFJ Represents A Swift And Significant Retreat By DOJ
Another factor counseling against deference here is the DOJ's
striking capitulation to Microsoft's view of an appropriate remedy,
despite the unanimous affirmance of the core of DOJ's case. The
insubstantial provisions of the RPFJ provide ample "reason to
infer a sell-out by the Department," Massachusetts School of
Law, 118 F.3d at 784.
After prevailing on liability in the district court, DOJ sought
and obtained not only structural relief--as is
"common" in broad monopolization cases, see Microsoft
III, 253 F.3d at 105--but also "interim" conduct
restrictions that clearly could not stand alone as a monopolization
remedy. DOJ earlier recognized that the interim conduct remedies
were stopgaps to keep the competitive situation from continuing to
decline in the year or so before divestiture jumpstarted
competition. See Plaintiffs" Memorandum in Support of Proposed
Final Judgment 30-31 (corrected version) (filed May 2, 2000).
On remand, DOJ abandoned the structural relief that it formerly
found necessary, even though liability on the monopolization
claim--which alone could support structural relief in the first
place--was affirmed with minor modifications. DOJ stated that
it would pursue relief "modeled upon" the interim
"conduct-related provisions," along "with such
additional provisions as Plaintiffs may conclude are necessary to
ensure that the relief is effective, given their decision not to
seek a structural reorganization of the company." Joint Status
Report 2 (filed Sept. 20, 2001).
Instead of fortifying the proposed decree to compensate for the
abandonment of structural relief, however, DOJ moved considerably
backward from the interim remedies, narrowing Microsoft's duties and
providing broad exceptions. Indeed, the RPFJ is weaker than the
final proposal in the settlement negotiations that took place during
Spring 2000, before any judgment of antitrust liability, much less
appellate affirmance.\8\ Then, there was litigation risk as to
liability. Now there is none. Nonetheless, the definitions and
obligations in the current RPFJ fall short of those in the pre-
judgment offer.
---------------------------------------------------------------------------
\8\ That final proposal, known as Draft 18, was formerly
posted on a now-defunct website, www.contentville.com, in connection
with a review of a book that detailed the progress of this case. The
text of Draft 18 may now be viewed at www.ccianet.org/legal/ms/
draft18.php3. "[T]he government's virtual abandonment of the
relief originally requested" is "a sufficient showing
that the public interest was not * * * adequately represented"
in the RPFJ. United States v. Associated Milk Producers, Inc., 534
F.2d 113, 117 (8th Cir. 1976). It is precisely when DOJ appears to
have "abruptly "knuckled under," id. at 118, as
here, that judicial scrutiny under the Tunney Act should be most
substantive and searching.
---------------------------------------------------------------------------
3. The CIS Overstates The Terms Of The RPFJ, Reflecting The
Indefensibility of the RPFJ Itself The CIS underscores the need for
close scrutiny of the actual terms of the RPFJ and their
effectiveness. The CIS seeks to convey an image of stringency by
adding terms to provisions of the RPFJ that are absent from the RPFJ
itself. But it is the RPFJ, not the CIS, that defines the
enforceable bargain between the parties. As the Supreme Court has
recognized, "any command of a consent decree * * * must be
found within its four comers, and not by reference to any purposes
of the parties." United States v. ITT Continental Baking Co.,
420 U.S. 223,233 (1975) (citations and internal quotation marks
omitted). While the CIS may be useful in interpreting ambiguous
terms in the RPFJ, the wording of the CIS is not independently
enforceable. Only the RPFJ would be entered as a judgment, and
"[t]he government cannot unilaterally change the meaning of a
judgment." Bechtel, 648 F.2d at 665. It would be different, of
course, if the CIS or its relevant refinements were "expressly
incorporated in the decree." ITT Continental, 420 U.S. at 238.
In particular, the CIS goes beyond the text of the RPFJ to paint
a far stricter picture of Microsoft's disclosure obligations than
the RPFJ supports. It is no wonder that DOJ seeks to defend a
document--the CIS--to which Microsoft would not be bound,
rather than the far weaker RPFJ that alone would be judicially
enforceable. The CIS cannot transform the RPFJ into a better deal
for competition and consumers than it is.
II. THE RPFJ MUST MEET THE LEGAL STANDARDS NORMALLY APPLICABLE
TO ANTITRUST REMEDIES
The "public interest" standard in the Tunney Act is
not without content. Rather, those "words take meaning from
the purposes of the regulatory legislation," NAACP v. Federal
Power Comm'n, 425 U.S. 662, 669 (1976). The well-developed
jurisprudence of antitrust remedies provides sound guidance for the
public interest determination.
Although a district court should not "engage in an
unrestricted evaluation of what relief would best serve the
public," Microsoft I, 56 F.3d at 1458 (quoting Bechtel, 648
F.2d at 666) (emphasis added), principled restrictions for that
evaluation in this case arise from the extensive, unvacated Findings
of Fact, the comprehensive opinion affirming
[[Page 29044]]
monopolization liability on appeal, and the long-standing remedial
principles of antitrust law, principles that the DC Circuit
instructed the District Court to apply to any proposed relief on
remand. See Microsoft III, 253 F.3d at 103. The
"appropriate" inquiry (Bechtel, 648 F.2d at 666) is
"whether the relief provided for in the proposed judgment [i]s
adequate to remedy the antitrust violations" that were proved
at trial and affirmed on appeal, ld. at 665.
The DC Circuit provided benchmarks rooted in Supreme Court
jurisprudence to guide the evaluation whether a remedy is
"adequate." A remedy in this case must serve "the
objectives that the Supreme Court deems relevant," Microsoft
III, 253 F.3d at 103. That is, a remedy must "seek to * * *
[1] "terminate the illegal monopoly, [2] deny to the defendant
the fruits of its statutory violation, and [3] ensure that there
remain no practices likely to result in monopolization in the
future." ld. at 103 (quoting Ford, 405 U.S. at 577, and United
Shoe, 391 U.S. at 250).\9\
---------------------------------------------------------------------------
\9\ It is telling that the CIS ignores the remedial
standard that the DC Circuit set out. See CIS 24, 66 Fed. Reg.
59,465. The CIS submerges the need to craft relief that tends to
"terminate" the illegally maintained monopoly, despite
the court of appeals" contrary instructions. See 253 F.3d at
103. Rather, the CIS endorses a watered-down standard in order to
set a lower bar for the RPFJ to clear, in tacit recognition that the
RPFJ cannot satisfy the DC Circuit's standard. The CIS would require
relief only to "[e]nd the unlawful conduct," to prevent
recurrence of the violation "and others like it," and to
"undo its anticompetitive effects." CIS 24, 66 Fed. Reg.
59,465. The RPFJ falls short even of these modified, more modest
objectives, however, particularly when measured by its failure to
prevent future violations that work slight variations on the conduct
condemned by two courts, and its failure to "undo" any
of the "anticompetitive effects" of Microsoft's
sweeping, coordinated, and successful anticompetitive campaign.
---------------------------------------------------------------------------
A. The Relief Should "Terminate The Illegal
Monopoly" In a monopolization case, the problem to be remedied
is the monopoly itself. Because the RPFJ would leave the illegally
maintained monopoly in place without making the market structure
more competitive, to satisfy this criterion relief must exclude the
possibility that Microsoft again will prolong its monopoly power by
abusing it. At a minimum, however, a monopolist should emerge from a
remedy facing competitive threats of similar scope and significance
to those it illegally stamped out. The DC Circuit recognized that
the illegal conduct in this case was aimed at increasing and
hardening the applications barrier to entry that insulates
Microsoft's OS monopoly. See ld. at 55-56, 79. The CIS
similarly recognized that "[c]ompetition was injured in this
case principally because Microsoft's illegal conduct maintained the
applications barrier to entry * * * by thwarting the success of
middleware." CIS 24, 66 Fed. Reg. 59,465. A remedy that does
not literally terminate the monopoly accordingly must undermine the
applications barrier to entry that was strengthened by the illegal
conduct.
B. The Relief Should Prevent "Practices Likely To Result
In Monopolization In The Future" To satisfy this criterion,
any remedy must both (1) prevent the monopolist from engaging in the
same sorts of conduct that underlie the current finding of
liability, and (2) prevent other types of conduct that could
preserve the monopoly. The "monopolization in the
future" that must be prevented includes both the simple
maintenance of the current monopoly and the expansion of that
monopoly's scope. Relief should make it impossible for the
monopolist to continue its pattern of using current market power to
foreclose imminent or contemplated competitive threats. Because
Microsoft has been "caught violating the [Sherman] Act,"
it "must expect some fencing in." Otter Tail Power Co.
v. United States, 410 U.S. 366, 381 (1973).
A monopolist that has been litigating for years no doubt has
developed anticompetitive techniques that achieve the same goals
through slightly different means. Microsoft embarrassed DOJ by
obtaining language in the 1995 consent decree that was tailored to
exclude, at least arguably, the company's next planned
anticompetitive initiative. Exemptions, provisos, and narrow
definitions should be scrutinized on the assumption that Microsoft
again has tried to ensure that the RPFJ will not impede currently
planned anticompetitive acts.
C. The Relief Should "Deny To The Defendant The Fruits Of
Its Statutory Violation" Relief in an antitrust case not only
must prevent "recurrence of the violation," but also
must "eliminate its consequences." National Society of
Professional Engineers v. United States, 435 U.S. 679, 697 (1978).
Thus, a remedy should prevent a monopolist from retaining the
accrued competitive benefits of its illegal conduct. These
advantages may permit a monopolist to maintain its monopoly without
additional antitrust violations. Relief that allows a wrongdoer the
full benefit of its illegal activity fails the most basic test of
any remedy under any branch of the law.
In this case, the "fruits" of Microsoft's illegal
conduct may be the most important target of a responsible remedy.
One of the chief advantages that Microsoft gained by incorporating
the Internet browser into the Windows monopoly was the ability to
control not only the browser for its own sake, suppressing the
possibility that the Internet browser would provide a source of
alternate, OS-neutral APIs, but also the browser as the gateway to
all Internet computing. As the Litan/Noll/Nordhaus Comment explains
(at 5860), one of the most important fruits of monopolistic conduct
is the suppressed development of competitive threats. That is why a
forward-looking remedy must be rooted in current market conditions,
and must seek to restore competition to where it likely would have
been in the absence of the anticompetitive conduct. Litan/Noll/
Nordhaus Comment 35-36, 40-42, 58-59.
D. Broader Principles Applicable To Injunctive Relief Also
Should Inform The Analysis Of The RPFJ
The remedial analysis here resembles other remedial
undertakings. Although civil antitrust relief is not punitive,
effective antitrust relief shares with criminal sentencing the broad
goals of incapacitation and deterrence. As much as possible, an
illegal monopolist should be flatly prevented from engaging in the
same or similar suppression of competition in the future. In
addition, the remedy should be enforceable with sufficient speed and
certainty to make stiff contempt sanctions likely if the monopolist
nonetheless manages to engage in anticompetitive conduct again.
The point of antitrust relief after a finding of liability is to
learn from history, not to permit the offender to repeat it. This
consideration is particularly acute here, where the purposes of the
expiring 1995 consent decree clearly have not been realized, but
rather have been evaded or neutralized.
Because antitrust relief necessarily is forward-looking, a
remedy's effectiveness should be judged with respect to where the
market is going, not where it has been. Microsoft has directed its
efforts to destroy the competitive threat of Internet computing. The
more functionality that is performed on the Web, the less
significant the operating system on a particular client device
connected to the Web. Thus, Internet computing represents the
maturation of the competitive threat posed by the Internet browser
and squelched by Microsoft's illegal conduct. The current industry-
wide focus on Web-based services reflects the realization that a
competitive market still survives in this sector. The Court will
have to consider whether the RPFJ in fact is "all about the
past, not the future battle in Internet services[, and] doesn't
touch the company's ability to use Windows XP to extend its monopoly
to these new areas." Walter Mossberg, For Microsoft, 2001 Was
.4 Good Year, WALL ST. J., Dec. 27, 2001, at B1. See Stiglitz/Furman
Dec. 38-39.
III THE RPFJ FALLS FAR SHORT OF PROVIDING A REMEDY FOR PROVEN
OFFENSES UPHELD ON APPEAL
The RPFJ lights upon narrowly defined practices and prohibits
narrowly defined versions of them, in ways that might have
mitigated, but would not have ended, the very conduct at issue in
this case. The RPFJ does not measure up to the sweeping
monopolization violations found by two courts. The RPFJ's provisions
do not address Microsoft's ability and incentives to strengthen the
applications barrier to entry, which was the underlying issue at the
core of the case, instead focusing on techniques of monopolization
that have been defined so narrowly that Microsoft's actual behavior
need not change. And when addressing a precise technique that
directly implicated the reinforcement of the applications barrier to
entry--Microsoft's ability to stop porting its Office
productivity suite to the Apple Macintosh platform--the RPFJ
permits Microsoft to retain the ability to repeat that threat in
slightly altered contexts.
A. DOJ's Effort To Minimize The Scope Of The DC Circuit's
Affirmance Cannot Obscure The Failure Of The RPFJ To Remediate
Clear, Proven Violations
DOJ has tried to lower the bar for approval of its proposal by
minimizing the most significant appellate imposition of
monopolization liability in the past half-century, and adopting
Microsoft's crabbed view of its own liability. In Senate testimony,
[[Page 29045]]
Assistant Attorney General James made the remarkable assertion that
the DC Circuit, despite affirming "the District Court's
holding that Microsoft violated 2 of the Sherman Act in a variety of
ways," 253 F.3d at 59, somehow precluded any consideration,
for remedial purposes of Microsoft's astonishing anticompetitive
campaign as a whole. See James Testimony 5. To the contrary, the
court of appeals never rejected the common-sense notion that
"Microsoft's specific practices could be viewed as parts of a
broader, more general monopolistic scheme"; much less did the
court of appeals insist (or even hint) that "Microsoft's
practices must be viewed individually" for all purposes, ld.
Rather, the court of appeals clearly considered some illegal acts in
the context of others. Thus, the court held that Microsoft's
exclusive contracts with ISVs, though affecting only "a
relatively small channel for browser distribution," had
"greater significance because * * * Microsoft had largely
foreclosed the two primary channels to its rivals." 253 F.3d
at 72.
The DC Circuit's examination of the divestiture remedy is
telling. If the many separately illegal monopolistic acts could not
be viewed as cumulatively contributing to the illegal maintenance of
Microsoft's monopoly, divestiture would have been an unthinkable
remedy, since no specific act held illegal on appeal changed the
structure of the company or of the market. But the court of appeals
recognized that divestiture could be justified if the many separate
illegal acts, taken together, were shown to have had a sufficiently
certain causal connection to justify using structural relief to
undermine, if not end, the monopoly. See 253 F.3d at 80,
106-107.
The court of appeals did "reverse [the] conclusion that
Microsoft's course of conduct separately violates "2 of the
Sherman Act." 253 F.3d at 78 (emphasis added). But the
reversal occurred because the district court purported to find that
a series of acts that did not constitute separate, free-standing
antitrust violations had a "cumulative effect * * significant
enough to form an independent basis for liability"--but
never specified acts other than those that separately violated
Section 2 that might be aggregated into such a violation, ld.
It is a remarkable leap from this unremarkable holding to the
absurd notion that Microsoft's extraordinary series of separate
adjudicated antitrust violations cannot be considered together for
any purpose. Even the CIS recognizes that those violations are part
of one coordinated and "extensive pattern of conduct designed
to eliminate the threat posed by middleware." CIS 11, 66 Fed.
Reg. 59,462. They should be remedied as such.
B. The RPFJ Simply Restates The Antitrust Laws At Critical
Points And Thus Forfeits The Clarity And Efficiency Of The Contempt
Process
Another striking feature of the RPFJ is its repeated reliance on
a reasonableness standard of conduct that simply imports full rule-
of-reason analysis under the antitrust laws. Antitrust remedies,
like other injunctive decrees, are supposed to be amenable to swift
and sure enforcement, according to standards that give warning of
what is forbidden and what is permitted both to the wrongdoer and to
its potential victims. But the RPFJ would regularly require the
decree Court to determine whether Microsoft's conduct was
"reasonable." For example, the Court would have to
determine
* whether volume discounts were "reasonable" or
exclusionary (RPFJ III(B)(2));
* whether technical requirements for the bootup sequence that
Microsoft imposed on OEMs were "reasonable" (id.
III(C)(5));
* whether the terms on which Microsoft makes Communications
Protocols available are "reasonable" (id.
III(E));
* whether exclusivity requirements imposed on ISVs were
"reasonable" in "scope and duration" (id.
III(F)(2)); see also id. (III(G)(2));
* whether technical requirements designed to force the
invocation of Microsoft Middleware despite contrary consumer or OEM
preferences are "reasonable" (id. III(H)(2)[second]);
* whether the licensing terms accompanying required disclosures,
and terms of mandatory cross-licenses required for access to the
disclosures, are "reasonable" (id. III(I)(1),
III(I)(5));
* and whether Microsoft's bases for excluding ISVs from access
to security-related protocols are "reasonable" (id.
III(J)(2)(b)-(c)).
It is telling that the RPFJ states so many of its provisions in
terms that simply duplicate the antitrust rule of reason. Rule of
reason disputes are notoriously difficult to litigate, see Arizona
v. Maricopa County Medical Soc., 457 U.S. 332, 343 (1982) (noting
"extensive and complex litigation" involving
"elaborate inquiry" at "significant
costs"),--and difficult for plaintiffs to win. These
provisions add nothing to the antitrust laws themselves, either in
clarity of obligation or in efficiency of enforcement. That is no
remedy at all.
C. The RPFJ Provides No Remedy For Microsoft's Suppression Of
The Browser And Java. As noted above, perhaps the most glaring
deficiency of the RPFJ is that it does nothing to restore the
competitive threats to Windows posed by the Internet browser and
cross-platform Java. That cannot be an oversight. The bulk of the
evidence, and much of the opinion of the court of appeals affirming
liability, focused on Microsoft's successful efforts to suppress
these threats to the applications barrier to entry. See Microsoft
III, 253 F.3d at 58-78. Even the CIS recognizes the primacy of
these products in the case. See CIS 10-17, 66 Fed. Reg.
59,462-463. Yet the RPFJ does not change the competitive
picture for either product in the least. The RPFJ does not deprive
Microsoft of these "fruits" of its illegal conduct, but
instead takes that illegal conduct, and the advantages derived from
it, as a tacit baseline for future competition. The RPFJ leaves
Microsoft with the full benefit not only of the years of insulation
from the competitive threats posed by those products, but also of
the expanded power it has accumulated by incorporating Internet
Explorer into the Windows monopoly. Microsoft thus has more, and
stronger, weapons to suppress any middleware threats that it
identifies in the future, since its monopoly control over the
browser--now labeled part of the Windows monopoly
product--provides Microsoft with complete control over the
universal client for Internet computing. The RPFJ's approach is like
sentencing a bank robber to probation, but letting him keep his
weapons and the loot.
But the RPFJ's failure to provide relief that restores the
specific competitive threats that Microsoft illegally suppressed is
worse than that. In a platform technology market like that for PC
operating systems, single standards tend to prevail, so that only
sweeping changes can dislodge the incumbent. Platform threats are
very rare. It could easily be another five or ten years or more
before a comparable threat arises again; certainly no threat of
similar strength to the Internet browser or Java has surfaced in the
nearly seven years since Microsoft began the course of illegal
conduct condemned by the court of appeals. See Stiglitz/Furman Dec.
35-36. That is what makes anticompetitive conduct directed at
them so potentially profitable. The RPFJ makes that conduct
profitable beyond any rational actor's wildest dreams, and greatly
increases the incentives for its repetition. Having been caught
illegally suppressing two related platform threats, Microsoft
retains all the benefits that it sought through its illegal acts.
By eliminating Navigator, Microsoft has not only eliminated
consumer choice in browsers, but it also seized the power to control
the interfaces and protocols through which an enormously valuable
set of Internet applications--ranging from instant messaging
and e-mail to streaming video and e-commerce--are delivered to
desktop computers and other digital devices.
Microsoft's Internet Explorer is now the bottleneck through
which all Internet-related middleware must pass. Instant messaging
and media player technology are equally dependent on browser
software. Microsoft has also seized the power to decide whether that
browser functionality will be ported to any competing operating
system, and, if so, to which ones. Finally, in destroying Navigator,
Microsoft has also destroyed an important alternative distribution
channel, one free of Microsoft's control or influence, through which
Microsoft's competitors could formerly distribute middleware
runtimes and products to desktop consumers and application
developers.
Although Navigator has practically disappeared from the
competitive scene, Java has not. But Java's importance has been
limited to servers, where Microsoft has a leading share but not yet
an operating systems monopoly. Microsoft's conduct appears to have
assured that Java will not function as cross-platform middleware for
client computers. Java thus poses no threat to the desktop OS
monopoly. But the RPFJ lets Microsoft keep that anticompetitive
benefit of its conduct.
IV. THE ICON-FOCUSED OEM FLEXIBILITY PROVISIONS ARE INEFFECTIVE
RPFJ III(H)(1)-(2)[first] superficially allow
OEMs and end users to rearrange icons
[[Page 29046]]
and menu entries relating to middleware.\10\ These provisions are
hollow, however. Section III(H)(1) duplicates only what Microsoft
unilaterally agreed to permit OEMs to do back on July 11, 2001.
---------------------------------------------------------------------------
\10\ 10 See n.2, supra.
---------------------------------------------------------------------------
And the end-user provisions simply restate and preserve end-
users" longstanding options to delete icons and menu entries
if they right-click and delete or drag the icon or menu entry to the
Recycle bin. The default provisions in Section III(H)(2) are so
limited, and so fully subject to Microsoft's architectural control,
as to be competitively meaningless as well.
The icon provisions do not adequately address the competitive
harms of Microsoft's adjudicated misconduct because Microsoft
remains able to ensure that the Microsoft versions of middleware
will appear, ready to be invoked by applications, on every PC. Even
if the icon provisions had greater competitive significance in
theory, they are unlikely to have any significance in fact, because
few if any OEMs are likely to take advantage of the options
provided. DOJ cannot claim to be unaware of this market reality.
These provisions are mere window-dressing. See Stiglitz/Furman Dec.
35.
A. The PFJ Permits Microsoft's To Continue Illegally Commingling
Middleware Code With The Code For The Monopoly Operating System
The RPFJ capitulates on DOJ's most hard-fought and significant
substantive victory: the finding that Microsoft illegally preserved
its monopoly by commingling the middleware code with the operating
system, foreclosing the competitive threat to Windows while
effectively expanding the scope of the monopoly to encompass
middleware. DOJ's inability to enforce the 1995 consent decree
against the binding of IE to Windows, see United States v.
Microsoft, 147 F.3d 935 (DC Cir. 1998) ("Microsoft"),
was widely viewed as prompting this action. The conduct itself was
viewed as the most successful in furthering Microsoft's
anticompetitive goals.
Rather than repeat and strengthen the prohibition in the 1995
decree that failed to achieve its goals, the RPFJ does not even
impose the type of superficial prohibition applied to other conduct
condemned at trial and on appeal. To the contrary, under the RPFJ,
the operating system is whatever Microsoft says it is, and Microsoft
can commingle any new product to the monopoly
product--foreclosing competition for the OS and the new product
alike. See Stiglitz/Furman Dec. 34-37. Not only does Microsoft
preserve its anticompetitive gains, but it obtains a green light to
repeat the same conduct to destroy any new middleware threats. In a
market characterized by serial dominance, an incumbent monopolist
may need only to suppress one threat every few years in order to
make its monopoly virtually permanent. Cf. id. at 35-36. A
continued ability to commingle middleware gives Microsoft limitless
tenure over the OS market. If Microsoft emerges from this case free
to bind middleware to the OS, this action will be an exercise in
futility.
1. The DC Circuit Specifically Condemned Commingling Twice DOJ's
victory on the commingling point was crystal clear, and repeatedly
underscored by the court of appeals. The court of appeals recognized
that "Microsoft's executives believed" that
"contractual restrictions placed on OEMs would not be
sufficient in themselves" and therefore "set out to
bind" IE "more tightly to Windows 95 as a technical
matter." Microsoft III, 253 F.3d at 64 (quoting Findings, 84
F. Supp.2d at 50 (160)). In the CIS (and in Assistant Attorney
General James" Senate testimony), DOJ appears to assume that
icon-based relief that subjects some Microsoft Middleware Products
to the Add/Remove utility equates with relief for commingling code.
Thus, the CIS blends the two offenses in stating that Microsoft
violated Section 2 when it "integrated Internet Explorer into
Windows in a non-removable way while excluding rivals." CIS 7,
66 Fed. Reg. 59,461. In affirming liability for both courses of
conduct, however, the court of appeals clearly distinguished between
Microsoft's "excluding IE from the "Add/Remove
Programs" utility" and its "commingling code
related to browsing and other code in the same files." 253
F.3d at 64-65, 67. The court of appeals found no justification
for commingling code or, indeed, more broadly, for
"integrating the browser and the operating system." ld.
at 66. One could hardly ask for a clearer statement. Microsoft
argued bitterly against liability for commingling, and for a
declaration that its product design decisions were beyond the reach
of the antitrust laws. Instead, the DC Circuit pointedly rejected
Microsoft's argument that it "should vacate Finding of Fact
159 as it relates to the commingling of code." Microsoft III,
253 F.3d at 66; see Findings, 84 F. Supp.2d at 49-50
(159). And the court of appeals "conclude[d] that such
commingling has an anticompetitive effect," because it
"deters OEMs from pre-installing rival browsers, thereby
reducing the rivals" usage share and, hence, developers"
interest in rivals" APIs as an alternative to the API set
exposed by Microsoft's operating system." 253 F.3d at 66
(emphasis added). See generally id. at 64-67. That is,
commingling helps reinforce the applications barrier to entry that
shields the Windows monopoly.
The DC Circuit's holding reflected a principle of critical
importance to the enforcement of the antitrust laws in the software
industry, where the complementarity of different programs makes
product design a potentially devastating weapon to foreclose
competition: a "monopolist's product design decisions"
can violate the antitrust laws just as any other economic conduct
can.
253 F.3d at 65. Product design decisions may be grossly
anticompetitive, particularly in the software industry where lines
of code can be packaged (and marketed) in many different ways
without affecting the operation of programs once they are installed.
As Microsoft's James Allchin recently acknowledged, software
"code is malleable," so that "[y]ou can make it do
anything you want." Microsoft Net Profit Fell 13% in Recent
Quarter, Wall St. J. Europe, Jan. 18, 2002, 2002 WL-WSJE 3352885
(quoting Allchin).
Lest there be any doubt on the matter, the court of appeals
flatly rejected Microsoft's rehearing petition aimed squarely at the
remedial issue. Microsoft specifically sought to preclude relief
that addressed the commingling violation, and instead to treat the
commingling and the lack of add/remove functionality as the same.
Microsoft's reheating petition made clear that the "ruling
with regard to "commingling" of software code is
important because it might be read to suggest that OEMs should be
given the option of removing the software code in Windows 98 (if
any) that is specific to Web browsing [as opposed to] removing end-
user access to Internet Explorer." Appellant's Petition for
Reheating, at 1-2 (July 18, 2001). Microsoft argued that
affirmance only on the ground of the add/remove issue would ensure
that the remedy was tightly confined, because the "problem
will be fully addressed by including Internet Explorer in the Add/
Remove Programs utility, which Microsoft has already announced it
will do in response to the Court's decision." ld. at 2. The
court of appeals rejected this argument out of hand, adding this
remarkable sentence in a terse per curiam order denying reheating:
"Nothing in the Court's opinion is intended to preclude the
District Court's consideration of remedy issues." Order at 1
(DC Cir. Aug. 2, 2001) (per curiam). Nonetheless, the RPFJ would
settle this case as if rehearing had been granted, requiring
Microsoft only to allow OEMs and end users to "add/
remove" the icons for middleware. This is insufficient to
remedy technological binding--commingling [] since it does
nothing to remove the underlying middleware code on which developers
will continue to rely. If only the Internet Explorer icon is removed
from the desktop, the IE middleware remains, and with it the same
applications barrier issues that Microsoft preserved by stifling
competition by Netscape and Java.
It is true that the interim conduct relief in the vacated Final
Judgment required only that Microsoft offer an operating system
where OEMs and end-users were permitted to remove end-user access to
the middleware components, United States v. Microsoft Corp., 97 F.
Supp.2d 59, 68 (D.DC 2000), vacated, 253 F.3d 34 (DC Cir. 2001), a
provision similar to that in RPFJ III(H)(1)[first].
That transitional provision of course assumed the existence of
structural relief that would remove Microsoft's economic incentive
to bind middleware to the OS unless the binding was independently
justifiable. Without a structurally more competitive market, those
modest provisions would be meaningless, and would permit Microsoft
to follow much the same course that triggered the lawsuit.
There is no excuse for DOJ's failure to do anything about one of
the principal, and most easily replicable, violations in the case.
Even one of Microsoft's vocal, libertarian defenders, University of
Chicago law professor Richard Epstein, recognized that the minimum
plausible remedy after the DC Circuit decision would involve
"undoing a few product-design decisions." Richard
Epstein, Phew/, Wall. St. J., June 29, 2001, at Al0. But DOJ did not
even insist on that. Instead, the RPFJ's omission of any relief for
this violation gives Microsoft something the DC Circuit twice
refused: a victory on the
[[Page 29047]]
hardest-fought legal issue in the case. Given the central importance
of middleware to the theory of the case, failing to address the
principal means by which Microsoft bundled browser middleware to
Windows would be plainly inadequate.
2. The Failure To Limit Commingling Is Critical Because Ubiquity
Trumps Technology In Platform Software Markets
The failure to prohibit commingling of middleware deprives the
RPFJ of any significant procompetitive effect on the emergence and
adoption of competing platform software. The critical competitive
phenomenon in this case was not middleware in itself, but rather the
potential, and deeply feared, development of particular middleware
into a competing platform for software applications. Middleware can
develop into a competing applications platform by attracting
software developers to use its Application Programming Interfaces
(APIs) in preference to, or at least in addition, to the APIs
offered by Microsoft in Windows. Developers will write their
applications to invoke particular APIs--i.e., to run on a
particular platform--based on how widely available the APIs
will be.
Although potential platform software not distributed by
Microsoft must attract users in order to achieve the widespread
availability of their APIs that will attract developers, it is the
expected presence of the APIs that matters, not how much consumers
directly use the application exposing the APIs. Non-Microsoft
middleware depends on the availability of the application in order
to gain the critical mass of users that, in turn, may attract
developers.
The availability and prominence of the application's icon may be
significant for the purpose of attracting end-users. In platform
competition, however, the availability of the application is only a
means to the desired end. Developers don't write to icons; they
write to APIs. The inclusion of Microsoft Middleware functionality
in every copy of Windows is determinative, regardless of how or
whether the icons are featured, and regardless even of the presence
of the user interface or shell.\11\ If developers know that the
plumbing for a Microsoft version of middleware will be on every PC
because it is commingled with Windows, then developers will write to
the Microsoft version's APIs. Because the RPFJ permits Microsoft to
include the APIs accompanying the software functionality that mimics
middleware that is a potential platform threat, Microsoft will be
able to defeat any middleware threat in exactly the same way it
destroyed the threat of Netscape and Java on the PC desktop. See
Stiglitz/Furman Dec. 36.
---------------------------------------------------------------------------
\11\ The user interface is especially insignificant
because the browser window already can serve as the user interface
for many products, and could easily be adapted to serve as the user
interface for many more.
---------------------------------------------------------------------------
Under the RPFJ, developers will continue to assume that Windows
Media Player, for example, is present on every computer. This will
be true regardless of whether "end user access" is
removed, because the remedy does not require Microsoft to remove the
middleware. The result is that software developers will write
applications to, for example, the Windows Media Player APIs, rather
than to the APIs supplied by rival platforms. That is an advantage
that no competitor can overcome.
It is no answer to say that OEMs can offer rival middleware even
if the code for a Microsoft version of the same product is
commingled with Windows, so that the Microsoft version of middleware
appears on every desktop PC. If Microsoft's version of a product is
everywhere, few OEMs will go to the effort of providing another
product that does largely the same thing. The district court and
court of appeals alike recognized that OEMs faced strong
disincentives to install two competing products with similar
middleware functionality, disincentives arising largely from support
costs and disk space. See 84 F.Supp.2d at 49-50, 60-61
(159, 210); 253 F.3d at 61. If the Microsoft Middleware
is there, the OEM will have to support it, even if--perhaps
especially if--the end-user does not know that it is there.
Thus, rival middleware cannot undermine Microsoft's monopoly
unless (1) the rival middleware is ubiquitous, or (2) the Microsoft
version is not ubiquitous. If developers do not feel compelled to
write to the rival middleware as well as the Microsoft middleware,
the rival middleware will not undermine the monopoly. And if
Microsoft's version of particular middleware can be ubiquitous by
virtue of its inclusion in the monopoly operating system, as the
RPFJ plainly allows, there is virtually no likelihood that rival
middleware will ever achieve the ubiquity needed to present a
platform challenge. See Stiglitz/Furman Dec. 36-37; see
generally Litan/Noll/Nordhaus Comment 44-47.
3. The RPFJ Retreats From The 1995 Consent Decree Microsoft uses
Windows as an instant, universal distribution channel for Microsoft
software that represents a response to a threat to the dominance of
Windows as a program development platform. As a consequence,
"Windows" has become whatever bundle Microsoft needs it
to be to forestall competition. The 1995 Consent Decree contained a
prohibition on contractual tying of applications to the operating
system in order to prevent anticipated conduct that would maintain
the operating systems monopoly by anticompetitive means. That the
earlier provision failed in its purpose suggests that the provision
should be broader, not that it should be abandoned, particularly
since this case began as a way to stop conduct that had escaped
summary condemnation under the earlier decree. It would be senseless
as a matter of enforcement policy to bring and win an action
prompted by an evasion (if not a violation) of a monopolization
consent decree, win the case on the monopolization theory most
closely related to the object of the earlier consent decree, and
then reward the violator by removing the relevant restriction upon
the expiration of the earlier decree rather than broadening it as
proposed here. Microsoft's monopoly gives it the power to make all
systems integration and software bundle decisions, a power that
Microsoft is exercising more broadly, as the breadth of the Windows
XP bundles clearly illustrates. The RPFJ should not step back from
the 1995 Consent Decree.
4.The RPFJ Encourages Illegal Commingling By Placing The
Critical Definition of Windows Under Microsoft's Exclusive Control.
But the RPFJ does step back from the 1995 Decree, and makes
matters still worse. Not only does the RPFJ completely fail to
prevent future illegal commingling, but it effectively approves that
conduct by permitting Microsoft "in its sole discretion"
to "determine[]" exactly which "software code
comprises [sic] a Windows Operating System Product." RPFJ
VI(U). That provision permits Microsoft an unearned advantage in
repelling any future challenges to illegal commingling of
applications code with Windows. Were the Court to enter this
provision as part of its judgment, Microsoft could point to DOJ's
capitulation on this issue--and the Court's approval--as
extraordinarily persuasive evidence that its monopoly product was as
broad as it says it is, and that, despite the contrary holding of
the DC Circuit, any commingling of an application with the operating
system is per se legal.
The Court can and should disapprove provisions that appear to
endorse practices of apparent anticompetitive effect and dubious
legality. Thomson Corp., 949 F. Supp. at 927-930 (refusing to
approve fee schedule for mandatory license for legally dubious
copyright). The Court should not approve this provision, which
defangs many of the other obligations in the RPFJ.
Rather than learning from the difficulties with the
"integration proviso" in that Decree, DOJ has ceded the
issue to Microsoft, permitting Microsoft to decide for purposes of
the decree obligations where the OS stops and where middleware
begins. Much of the RPFJ rests on the relationship between the
Windows OS and middleware. But the RPFJ places Microsoft firmly in
control of every technical aspect of the proposed decree by
permitting Microsoft absolute control over the definition of
"Windows
Operating System Product." That subjects many of
Microsoft's purported obligations to Microsoft's own discretion.
No term is more important in the RPFJ than "Windows
Operating System Product," which appears fully 46 times in the
RPFJ: 26 times in the descriptions of substantive obligations, and
20 times in the definitions that circumscribe those obligations. The
definition of Application Programming Interfaces (APIs) is the
starkest example. "Windows Operating System Product"
appears three times among the 41 words of the API definition. See
RPFJ VI(A.). Thus, Microsoft can determine "in its sole
discretion" what an API is, and thus what must be disclosed.
One would think that DOJ would do everything possible to ensure
that a new decree did not contain an analogue to the
"integration proviso" that nullified much of the anti-
tying provision of the 1995 decree. See generally Microsoft II, 147
F.3d 935. Instead, Section VI(U) ensures that few, if any, of the
technical provisions of the RPFJ will mean anything except what
Microsoft wants them to mean, and that none can be enforced without
lengthy litigation that will
[[Page 29048]]
further shrink the tightly limited duration of the proposed relief.
B. Empirical Evidence Shows That The Icon Flexibility Provisions
Will Not Be Used Not only do the icon flexibility provisions address
the wrong problem, but the market already has tested their
consequences. On July 11, 2001, Microsoft announced that OEMs and
end users would be permitted to remove access to Microsoft's
Internet Explorer browser, just as RPFJ III(H)(1) permits. As of
this writing, not one OEM has availed itself of this new liberalized
policy. Windows XP is shipping with Internet Explorer on every
single personal computer shipped by every single OEM. This real-
world experience speaks volumes about the practical significance of
this relief.
C. The Icon Flexibility Provisions Require--And
Accomplish--Little
1. The icon flexibility provisions do not permit OEMs to swap
out Microsoft Middleware Products and replace them with other
products. Rather, the OEMs at most can hide the Microsoft icon, but
need to be prepared to support the underlying Microsoft software
when another software application invokes it. That means that these
provisions do not address the added "product testing and
support costs" that discourage OEMs from including more than
one version of particular functionality. Microsoft III, 253 F.3d at
66.
This is a step backward from DOJ's settlement posture before
liability was established. At that time, DOJ insisted that OEMs be
allowed to alter or modify Windows, and that Microsoft provide OS
development tools for that purpose. See Draft 18, 4(1)(d), 4(g). The
RPFJ provisions, by contrast, only permit OEMs to display icons,
shortcuts, and menu entries for Non-Microsoft Middleware. The RPFJ
does not require Microsoft to permit OEMs to remove any Microsoft
Middleware Products, although even current Microsoft practice
permits this. The RPFJ requires Microsoft only to allow the removal
of "icons, shortcuts, or menu entries." RPFJ
III(H)(1)[first].
2. Section III(H)(2)[first] seems to permit OEMs and end-users
to choose default middleware for particular functions. Microsoft's
obligations are far less than they appear.
The provision applies only where a Microsoft Middleware Product
would launch into a top-level display window (rather than operating
within another interface) and would either display "all of the
user interface elements" or the "Trademark of the
Microsoft Middleware Product." RPFJ III(H)(2)(i)-(ii)
(emphasis added). Thus, the provision does not apply if Microsoft
designs the slightest variation on the interface elements that
launch from within another application, so long as the trademark
also is not displayed in the top-level window. These do not present
serious programming challenges. Microsoft's ability to preclude OEM
installation of desktop shortcuts that "impair the
functionality of the [Windows] user interface" (RPFJ
III(C)(2)) provides another, largely unreviewable set of
opportunities to impede the use of innovative shortcuts to
innovative software. Microsoft asserted similar reasons to defend
some of the conduct condemned by the DC Circuit. See Microsoft III,
253 F.3d at 63-64. The DC Circuit rejected Microsoft's
approach, but the RPFJ adopts it.
3. As explained above, the code beneath the surface is
critically important to the success of middleware in undermining the
applications barrier to entry in the OS market. The RPFJ contains
exceptions that ensure that, however icons may be displayed on the
surface, Microsoft Middleware will be firmly (and unchallengeably)
established in the plumbing of each PC. Sections III(H)(1)-
(2)[second], undo what might be left of the obligations earlier in
Section III(H). Section III(H)(1)[second] permits Microsoft to
ensure that Microsoft Middleware Products are invoked whenever an
end-user is prompted to use Microsoft Passport or the group of
Microsoft web services now known as Hailstorm. Section
III(H)(2)[second] ensures that Microsoft need only program in
functions that invoke Active X or other similar Microsoft-
proprietary implementations of common functions, in order to ensure
that Microsoft Middleware Products constantly appear regardless of
an end-user's stated preferences. And none of the provisions in
Section III(H) would apply unless the corresponding Microsoft
Middleware Products existed seven months before the last beta
version of a new Windows release. As with other provisions,
Microsoft would be constrained by these requirements only if it paid
no attention to them when it decided when and how to release its
products.
D. The 14-Day Sweep Provision Effectively Nullifies RPFJ
III(H) Even if these provisions otherwise might mean
something, the RPFJ ensures that they will be competitively
meaningless by permitting Microsoft to nag users to give permission
for Microsoft to override any array of non-Microsoft icons and menu
entries 14 days after the initial boot-up of a PC. See RPFJ
III(H)(3). Thus, Microsoft only needs to prompt users with a dialog
box inviting them to "optimize the Windows user
interface" every time they boot up, or when they download the
inevitable bug fixes and security patches among Windows updates, in
order to undo any OEM's or end-user's customization of icons.
Microsoft apparently provided DOJ with the name for this feature,
which DOJ uses in the CIS: "Clean Desktop Wizard." CIS
48, 66 Fed.
Reg. 59,471. What user would not agree to have a cleaner
desktop? No ISV is likely to pay an OEM a fee sufficient to cover
the trouble of rearranging icons, and supporting additional
software, for the privilege of having non-Microsoft software icons
displayed advantageously for as little as two weeks.
The CIS suggests that the ability of Microsoft to sweep away
icons of competing middleware and other products 14 days after a
computer first boots up (RPFJ III(H)(3)) applies only to
"unused icons" (CIS 48, 66 Fed. Reg. 59,471), but the
decree terms contain no such limitation. Once its "Clean
Desktop Wizard" (id.) secures a click of user consent,
Microsoft can hide any icons that offend it. Indeed, there is
nothing in the RPFJ that would stop Microsoft from including similar
"wizards" that would prompt users to reset middleware
defaults, or even to remove Non-Microsoft Middleware," in
order to "optimize performance" or to "take full
advantage of powerful new Windows features."
E. By Placing The Burden To Restore Competition On OEMs, The PFJ
Leads To No Remedy At All For Much Of The Misconduct At Issue
One of the most misguided elements of the RPFJ is its allocation
to OEMs, ISVs and end-users of the primary responsibility for
injecting competition into the OS market. The icon and default
flexibility provisions of the RPFJ allocate to the OEMs almost all
of the financial risk and responsibility for remediating Microsoft's
antitrust violation, while the monopolist has no obligations except
to allow others to make changes to hide (or add to) Microsoft's
middleware.
That approach ignores the fact that OEMs are motivated by their
own fiduciary and economic considerations, not by the drive to
remedy a monopolization offense. OEMs are risk-averse, as they
operate in a low-margin, highly competitive environment in what has
become a commodity-product market. In that environment OEMs are
highly dependent on the good graces of Microsoft, not only for
favorable pricing on Microsoft's monopoly software products []
Office as well as Windows [] but also for timely technical
assistance, and access to technical information.
The Stiglitz/Furman Declaration confirms (at 32-34) that
the economics of the OEM industry--a commodity industry captive
to a bottleneck monopolist--discourage expenditures of this
kind. It is bizarre and counterproductive to place the burden to
restore competition on the innocent, low-margin OEMs rather than the
monopolist. The "hapless makers of PCs" still
"aren't in any position to defy Microsoft," Walter
Mossberg, For Microsoft, 2001 Was A Good Year, But At
Consumers" Expense, Wall. St. J., Dec. 27, 2001, at B1, any
more than they were when the illegal conduct in this case first
occurred. See, e.g., Findings, 84 F. Supp.2d at 62 (214)
(Hewlett-Packard observation to Microsoft that "[I]f we had a
choice of another supplier, * * * I assure you [that you] would not
be our supplier of choice"). But if OEMs choose not to
exercise their new "flexibility" under the middleware
provision [] a choice that seems likely in view of the demonstrated
lack of a response to Microsoft's offer of July 11, 2001 ?? the \12\
government is left with no antitrust remedy for much of its case.
---------------------------------------------------------------------------
\12\ Similarly, the RPFJ places no limits on Microsoft's
conduct toward one of its largest current groups of
licensees--direct corporate licensors of bulk Windows licenses.
The corporate market has always been Microsoft's point of leverage,
and those buyers now often buy direct. Microsoft has made clear its
intention to make Windows and other software a renewable
"service." Microsoft can undo all of the provisions
applying to OEMs upon the first license renewal with an end-user.
---------------------------------------------------------------------------
Nor can ISVs be expected to pay OEMs to take advantage of the
limited flexibility provided by
RPFJ III(C) and III(H). The RPFJ gives ISVs very slight
incentives to subsidize OEM
[[Page 29049]]
alterations of Microsoft's preferred desktop display, since the ISVs
who sell middleware that competes against a Microsoft offering
cannot buy exclusivity on the desktop of any computer. Rather, at
best an ISV can obtain parity in the availability to developers of
its middleware's code. No matter what ISVs and OEMs do, Microsoft
Middleware will be ubiquitous. And ISVs could buy only 14 days of
advantageous icon display before a Microsoft "Clean Desktop
Wizard" (CIS 48, 66 Fed. Reg. 59,471) would begin prompting
users to undo the OEM's arrangement of icons and reinstate the
arrangement favored by Microsoft. No ISV would pay more than a
pittance for such a shallow and short-lived advantage on the
desktop. F. The RPFJ Permits Microsoft To Control Consumers"
Access To Innovation To Suit Its Monopolistic Aims The RPFJ allows
Microsoft to exercise full control over the pace of innovation in
middleware because Microsoft can ensure that consumers are denied
access--or have only severely impeded access--to
competitively threatening middleware products to which Microsoft has
no analogue.
Section III(C)(3) allows Microsoft to prohibit OEMs from
configuring PCs to launch non-Microsoft middleware from any point
unless Microsoft already has a competing product that launches from
that point. Microsoft can prohibit OEMs from configuring non-
Microsoft middleware from launching automatically at the end of the
boot sequence or upon the opening or closing of an Internet
connection unless a Microsoft Middleware Product with similar
functionality would launch automatically. RPFJ
III(C)(3).
Even after this catch-up provision serves its delaying purpose,
Microsoft can control how competing middleware products reach and
serve consumers, so that products launch only in the way that best
suits Microsoft. This provision appears designed to protect
Microsoft from competition, and to give the monopolist a clear
imprimatur to control the pace of innovation. See Stiglitz/Furman
Dec. 28.
V. THE API AND COMMUNICATIONS PROTOCOL DISCLOSURE PROVISIONS ARE
INEFFECTIVE
The API Provisions Require Little, If Anything, Beyond Current
Disclosure Practices In Microsoft's Self-Interest
The API and Communications Protocol disclosure provisions
( III(D)-(E)) contain little in the way of hard,
fast, enforceable obligations, and do not appear to add anything
significant to Microsoft's current disclosure practices. As the CIS
recognizes:
Through its MSDN [Microsoft Developer's Network] service,
Microsoft presently makes widely available on the Internet an
extensive and detailed catalog of technical information that
includes, among other things, information about most Windows APIs
for use by developers to create various Windows applications. MSDN
access is presently broadly available to developers and other
interested third parties.
CIS 34,66 Fed. Reg. 59,468.
Microsoft already discloses literally thousands of APIs to
software developers through MSDN for the good reason that it is in
Microsoft's self-interest to promote the Microsoft Windows platform
to software developers. The extent of information disclosure
required by the RPFJ must be understood in the context of
Microsoft's current information disclosure practices. A
"requirement" that Microsoft disclose APIs for the most
part simply "requires" that Microsoft do what it does
voluntarily.
Microsoft has a business incentive not only to disseminate
Windows APIs but to assist ISVs in understanding and implementing
Windows APIs in their products. Microsoft and other platform
software vendors compete to attract developers by disclosing
technical information, creating easy-to-use development tools, and
"evangelizing" their development platforms. Attracting
developers helps Microsoft perpetuate the substantial network
effects that produce the applications barrier to entry protecting
the Windows monopoly. Because the strength of the Windows monopoly
and the power of the applications barrier to entry are directly
related to the number of developers writing applications for
Windows, it is in Microsoft's interest to provide a robust
information disclosure program.
By widely disclosing APIs, Microsoft ensures that applications
will continue to be written for its platform software rather than
for rival platforms. Properly understood, Section III(D) does not
actually require Microsoft to provide any new disclosure of APIs and
technical information to promote interoperability; Microsoft already
engages in these disclosures. Rather, the incremental effect of the
API disclosure provisions of the RPFJ is at most to prevent
Microsoft from selectively withholding certain APIs from certain
vendors. As explained below, however, the disclosure
"requirements" in the RPFJ are too insubstantial and too
easily manipulated to accomplish even that limited goal.
B. The RPFJ Does Not Require Disclosure of Windows APIs, But
Rather Lets Microsoft Determine The Scope of Disclosure Through The
Design and Labeling of Its Operating System And Middleware
To begin with, the API disclosure requirements aim at the wrong
thing. The RPFJ defines APIs as the interfaces used by Microsoft
Middleware to invoke resources from a Windows Operating System
Product. RPFJ VI(A). But innovative rival software
vendors do not need APIs between Microsoft Middleware and Windows.
The really threatening innovators are threatening precisely because
their products perform functions that Microsoft's do not. In those
cases, by definition, there will not be any fully analogous
Microsoft middleware--just as Microsoft did not have an
Internet browser when Netscape Navigator first appeared. Those
developers need full access to Windows APIs--APIs for all
functionalities enabled by the Windows platform, whether Microsoft
calls them "internal" calls within Windows or external
APIs that may be distributed to ISVs--not to the limited subset
used by a Microsoft version of similar middleware.
That is what Netscape needed in 1995; there was no Internet
Explorer to speak of at that time, and certainly Microsoft's
rudimentary browser did not perform anywhere near the range of
functions performed by Netscape Navigator. See Findings, 84 F.
Supp.2d at 31-32 (82-84), 33-34
(91-92). The RPFJ provisions would not have helped
Netscape then. See Letter from James L. Barksdale, former CEO of
Netscape, to Chmn. Leahy & Sen. Hatch, Senate Comm. on the
Judiciary, Attachment, Question 1 (Dec. 11, 2001)\13\ And they will
not help any software developer whose products exceed the
functionality of existing Microsoft middleware. The API disclosure
provisions in the RPFJ thus ensure that Microsoft can control the
pace of middleware innovation, providing another level of assurance
that non-Microsoft products will not gain the type of head start
that might result in ubiquity before a similar Microsoft product can
be included That limitation on API disclosure is severe enough. But
it is just a beginning. The disclosure obligation is further limited
by the definition of APIs at RPFJ VI(A): in the bundle
of products sold with every Windows operating system.
---------------------------------------------------------------------------
\13\ Mr. Barksdale's letter in lieu of hearing testimony
is available at http://java.sun.com/features/2002.01.barksdale-
letter.html, and the attachment is available at http://java.sun.com/
features/2002.01.barksdale-attach.htm "Application Programming
Interfaces (APIs)" means the interfaces, including any
associated callback interfaces, that Microsoft Middleware running on
a Windows Operating System Product uses to call upon that Windows
Operating System Product in order to obtain any services from that
Windows Operating System Product.
---------------------------------------------------------------------------
Setting aside the circularity, the malleability of the two
principal defined terms renders this definition (and the
corresponding obligations) a practical nullity. The API definition
depends on the relationship between two "products," each
of which is defined solely by Microsoft. As noted above, Microsoft
has "sole discretion" to identify software code as part
of a "Windows Operating System Product." RPFJ
VI(U). Many APIs can disappear from view simply as a
result of Microsoft's unreviewable decision to relabel certain
interfaces as internal to Windows. If Microsoft says that an
operation takes place entirely within Windows, rather than requiring
the interaction of a middleware and Windows, then there is no API to
disclose. \14\
---------------------------------------------------------------------------
\14\ Moreover, the term "interfaces" is not
defined in the RPFJ. The CIS explains that
"'[i]nterfaces" includes, broadly, any interface,
protocol or other method of information exchange between Microsoft
Middleware and a Windows Operating System Product." CIS
33-34, 66 Fed. Reg. 59,468. But that definition would not be
part of the judgment.
---------------------------------------------------------------------------
C. The Definition of "Microsoft Middleware" Gives
Microsoft Further Leeway to Limit Its Disclosure Obligation
The only APIs that need be disclosed are those used by
"Microsoft Middleware." But "Microsoft
Middleware," too, is defined in a way that gives Microsoft
tight control over the scope of its own obligations. Remarkably,
Assistant Attorney General James testified that this definition
would have been difficult for DOJ to achieve in a litigated
proceeding. Statement of Charles James to Senate Judiciary Committee
8 (Dec. 12, 2001). But it is difficult to imagine what Microsoft
would
[[Page 29050]]
have contested. Just as in the dispute whether Internet Explorer is
part of Windows, Microsoft can simply relabel software as part of
one product rather than another. The label does not affect the
commands and operations in the software.
1. The RPFJ Requires Microsoft To Disclose Only The APIs Used By
The "User Interface" Or Shell Of Microsoft Middleware
The APIs that must be disclosed are those that "Microsoft
Middleware * * * uses to call upon [a] Windows Operating System
Product." RPFJ VI(A); see id. Ill(D). But
Microsoft determines how much code performing a Microsoft Middleware
function is part of the Middleware, and how much is part of the
Windows Operating System Product, since the latter definition is
within Microsoft's "sole discretion." Id.
VI(U). The only code in Microsoft Middleware that
Microsoft must consider separate for the purposes of API disclosure
is the user interface, or shell, of the Middleware--or, rather,
"most" of the shell. Id. VI(J)(4). The only
limit is that "Microsoft Middleware" must
"[i]nclude at least the software code that controls most or
all of the user interface elements of that Microsoft
Middleware." Id. Thus, the terms of the RPFJ permit Microsoft
to provide only the APIs that go between 51% of the user interface
elements of Microsoft Middleware and the rest of the Windows bundle
of products. None of the APIs used by the Middleware's
functionality--the APIs that permit the Middleware perform its
functions while running on Windows--need be disclosed, so long
as the shell APIs are disclosed. This definition appears to be
designed to have nothing to do with developer preferences, or with
the applications barrier to entry.
2. The RPFJ Requires Microsoft To Disclose APIs Only For
"Microsoft Middleware" That Is Distributed Separately
From Windows, Yet Is Distributed To Update Windows
To come within the disclosure obligation, Microsoft Middleware
must be "distributed separately from a Windows Operating
System Product." That restriction alone is enough to take
Windows Media Player 8 outside the definition, as that product is
available only as part of the Windows XP bundle. But not all
separate distributions prompt the API obligations; Microsoft must
characterize the distribution as one that "update[s] th[e]
Windows Operating System Product." See RPFJ
VI(J)(1). Thus, the scope of the obligation depends
entirely on the labeling of the product, which Microsoft can easily
manipulate.
3. The Limitation Of Microsoft Middleware To
"Trademarked" Products Further Eviscerates The API
Disclosure Provision But that is not all. At least equally
significant is the restriction of the Microsoft Middleware
definition, and thus the API disclosure obligation, to Middleware
that is "Trademarked." RPFJ VI(J)(2). The
definition of "Trademarked" allows Microsoft to exclude
current middleware from the API disclosure obligation, and to
prevent future middleware from becoming subject to the API
disclosure obligation, simply by manipulating its use of trademarks.
a. Microsoft Easily Can Ensure That Middleware Is Not
"Trademarked" By Using A Generic Or Descriptive Name
Combined With Microsoft(r) or Windows(r) The definition of
"Trademarked" does not include "[a]ny product
distributed under * * * a name compris[ing] the Microsoft(r) or
Windows(r) trademarks together with descriptive or generic
terms." Id. VI(T). That is how Microsoft has
chosen to name some of its newest and most important products: the
combination of a monopoly brand with a simple descriptive mark that
helps identify an entire software function with the Microsoft
implementation of it. Windows(r) Messenger instant messaging
software is one example. Moreover, by the terms of the RPFJ
Microsoft disclaims any rights in the use of such combinations of
the Microsoft(r) or Windows(r) marks with generic or descriptive
terms, and abandons any rights that may be acquired in the future.
RPFJ VI(T). These provisions suggest that Microsoft can
change the scope of the definition of Middleware, and thus of the
API disclosure obligation, by abandoning some marks it has
registered as combinations of Microsoft(r) or Windows(r) with
generic or descriptive terms--if the RPFJ does not accomplish
that in itself. Windows Media Player is an example. Although
Microsoft has registered the combination of Windows(r) and the
generic term "Media" as Windows Media(r), at bottom the
name Windows Media Player is a combination of the Windows(r) mark
with the generic term "media player." Indeed, Microsoft
could plausibly argue that the Windows Media(r) mark does not come
within the "Trademarked" definition as it is, since even
that mark consists of no more than the Windows(r) mark in
combination with the generic term "media."15 RPFJ
VI(T) may therefore embody Microsoft's
"disclaim[er of] any trademark rights in such descriptive or
generic terms apart from the Microsoft(r) or Windows(r)
trademarks." But even if Section VI(T) does not go so far,
Microsoft could easily get Windows Media(r) Player outside of the
"Trademarked" definition --and thus outside the
scope of the disclosure obligations that apply only to
"Microsoft Middleware"--simply by abandoning the
registration mark and moving the registration symbol to the left.
Thus, Microsoft can transform "Windows Media(r) Player,"
which might be subject to API disclosure requirements, into
"Windows(r) Media Player," which clearly is exempt. 15.
In this discussion we set aside the non-trivial question whether
"Windows" itself is a generic, or at best descriptive,
mark for the type of "windowing" graphical user
interfaces invented at the Xerox Palo Alto Research Center in the
1970s, popularized by the Apple Lisa and Macintosh in the 1980s, and
since used by Microsoft and many other software vendors. b. The
"Microsoft Middleware" Definition Governing Disclosure
Obligations Is Far Narrower Than The "Microsoft Middleware
Product" Definition Governing OEM Flexibility That this highly
restrictive definition is no accident is clear from comparison with
the "Microsoft Middleware Product" definition which
governs the icon-display obligations. To provisions paralleling the
"Microsoft Middleware" definition, the "Microsoft
Middleware Product" definition adds several named current
products, including "Internet Explorer, Microsoft's Java
Virtual Machine, Windows Media Player, Windows Messenger, Outlook
Express and their successors," RPFJ VI(K)(1),
although only to the extent that Microsoft "in its sole
discretion" (id. VI(U)) decides that those
products are "in a Windows Operating System Product."
Id. VI(K)(1). Thus, Microsoft's icon display/removal
obligations for those named products would not change merely because
of a strategic product renaming or abandonment of a trademark that
combines the Microsoft(r) or Windows(r) name with generic or
descriptive terms. But none of those current products is named in
the "Microsoft Middleware" definition that governs the
disclosure obligations. That enables Microsoft to manipulate whether
those products, although surely middleware, also satisfy the four
subparts of RPFJ VI(J).
c. The CIS Broadens The "Trademarked" Definition
Beyond Its Terms
The CIS overstates the breadth of the "Trademarked"
definition, contending that it "covers products distributed *
* * under distinctive names or logos other than by the Microsoft??
or Windows?? names by themselves." CIS 22, 66 Fed. Reg.
59,465. The CIS further claims that the exception for products known
by combinations of generic terms with Microsoft?? or Windows?? does
not cover marks that "are presented as a part of a distinctive
logo or another stylized presentation because the mark itself would
not be either generic or descriptive." CIS 23, 66 Fed. Reg.
59,465 (emphasis added). To the contrary, the terms of the RPFJ
definition of "Trademarked" focus entirely on
"names," not "logos" or "marks"
as a whole. RPFJ VI(T). The distinction is striking:
the word "name" appears five times in the definition,
and "descriptive or generic terms" appears three times.
Neither "logo" nor "mark" appears at all.
Microsoft clearly appreciates the distinction. Although
Microsoft apparently has not yet formally abandoned the mark
"Internet Explorer" (U.S. Trademark Reg. No. 2277122),
it does not assert that mark when it lists its trademarks as a
warning to the public. See http://www.microsoft.com/misc/info/
cpyright.htm. Microsoft does list its trademark for the Microsoft
Internet Explorer logo, however. Id.; see U.S. Trademark Reg. No.
2470273.
d. Microsoft Can Easily Manipulate Which Middleware Releases Are
"New Major Versions" Indeed, even a "Microsoft
Middleware Product" satisfying that four-part test may not be
"Microsoft Middleware" subject to the disclosure
obligation unless it is a "new major version" of the
product, that is, if the release is "identified by a whole
number or by a number with just a single digit to the right of the
decimal point." RPFJ VI(J). That has two
implications. First, Microsoft can simply adopt a different method
of naming new releases. Second, even under current practice a
version with two digits to the right of the decimal point may fix
significant errors, so that disclosure only of the prior version of
the APIs might leave developers without the ability to invoke some
needed functionality with the disclosed APIs.
[[Page 29051]]
D. The Disclosure Provisions--Particularly Those concerning
"Communications Protocols"--Depend On An Undefined
And Thus Unenforceable Concept of "Interoperability"
Both the API and Communications Protocol disclosure provisions
define the scope of the data to be disclosed as that necessary to
permit non-Microsoft products to "interoperate" with the
Windows client OS and to "interoperate natively" with
Microsoft server operating system products. See RPRJ
III(D), (E). The disclosure obligations are
limited to "the sole purpose of interoperating with a Windows
Operating system. Product." Id.
The obligations depend on the meaning of
"interoperate," but the RPFJ never defines that term,
and there is no non-discrimination provision attached to this
obligation. That is critical because interoperability is not
something that can be achieved half way. Either two software
products interoperate for all functions that they must perform
together, or they do not. Any impediment in any aspect of the
interoperation nullifies the interoperability. The CIS seems to
equate "inteoperate" with "fully take advantage
of," see CIS 36, 66 Fed. Reg. 59,468, but there is no such
language in the RPFJ itself.
The Communications Protocol disclosure provision (RPFJ
III(E)), outlines a seeming "obligation"
that is entirely undefined. Section III(E) seems to require
disclosure of Communications Protocols on Windows clients that are
"used to interoperate natively * * * with a Microsoft server
operating system product." But just as
"interoperate" is not defined, neither does the RPFJ
define "Microsoft server operating system product."
One of the most important aspects of the Windows 2000 Server
product bundle is Microsoft's web server, IIS. In the absence of a
definition of "Microsoft server operating system
product," however, it is unclear whether the disclosure
obligation encompasses protocols used to interoperate with this and
other aspects of the current server product. Cf. RPFJ
VI(U) (defining "Windows Operating System
Product" as all software code "distributed commercially
* * * as Windows 2000 Professional" and other named products,
and "Personal Computer versions" of their successors).
Again, the CIS attempts to provide assurances that go beyond the
terms of the proposed judgment. The CIS states (at 37, 66 Fed. Reg.
59469):
The term "server operating system product" includes,
but is not limited to, the entire Windows 2000 Server product
families and any successors. All software code that is identified as
being incorporated within a Microsoft server operating system and/or
is distributed with the server operating system (whether or not its
installation is optional or is subject to supplemental license
agreements) is encompassed by the term. For example, a number of
server software products and functionality, including Internet
Information Services (a "web server") and Active
Directory (a "directory server"), are included in the
commercial distribution of most versions of Windows 2000 Server and
fall within the ambit of "server operating system
product."
That definition would be appropriate. But no corresponding
language--no enforceable definition--appears in the RPFJ.
E. The Narrow Scope Of The Disclosure Provisions Contrasts Sharply
With The Broader Definitions In DOJ's Earlier Remedy Proposals
Before liability had been confirmed on appeal, DOJ took a far
broader view of what should be disclosed. The interim remedies in
the vacated judgment required disclosure of APIs, Communications
Interfaces, and "technical information" needed to enable
competing products "to interoperate effectively with Microsoft
Platform Software." 97 F. Supp.2d at 67 (3(b)). That
disclosure requirement was backed up by a requirement, absent from
the RPFJ, that Microsoft create a secure facility so that developers
could work with Windows source code to ensure that their
applications worked properly on the Microsoft platform. See id
The definition of "technical information," moreover,
helped ensure that disclosure would be complete and not subject to
many different methods of manipulative narrowing. The
"technical information" definition encompassed the
following items: all information regarding the identification and
means of using APIs and Communications Interfaces that competent
software developers require to make their products running on any
computer interoperate effectively with Microsoft Platform Software
running on a Personal Computer.
Technical information includes but is not limited to reference
implementations, communications protocols, file formats, data
formats, syntaxes and grammars, data structure definitions and
layouts, error codes, memory allocation and deallocation
conventions, threading and synchronization conventions, functional
specifications and descriptions, algorithms for data translation or
reformatting (including compression/decompression algorithms and
encryption/decryption algorithms), registry settings, and field
contents.
97 F. Supp.2d at 73 ( 7(dd)).
Indeed, DOJ's position was stronger even before liability had
been imposed at all. Draft 18 from the Posner mediation imposed a
disclosure obligation using this definition of "technical
information": all information, regarding the identification
and means of using APIs (or communications interfaces), that
competent software developers require to make their products running
on a personal computer, server, or other device interoperate
satisfactorily with Windows platform software running on a personal
computer. Technical information includes reference implementations,
communications protocols, file formats, data formats, data structure
definitions and layouts, error codes, memory allocation and
deallocation conversions, threading and synchronization conventions,
algorithms for data translation or reformatting (including
compression/decompression algorithms and encryption/decryption
algorithms), registry settings, and field contents.
The RPFJ, by contrast, contains no analogue to these precise and
inclusive definitions. Instead, the RPFJ relies solely on the
circular (and completely manipulable) definition of API (RPFJ
VI(A)), a similarly narrow definition of
"Communications Protocol" (id VI(B)), and a
definition of "Documentation" that is wholly dependent
on the API definition (id. VI(E)).
F. The "Security" Exceptions in Section Ill(J)
Permit Microsoft To Avoid Its Disclosure Obligations RPFJ
III(J) provides Microsoft with two additional lines of
defense in the event that any competitively sensitive APIs
nonetheless fall within the malleable definition of API. Section
III(J)(1) severely undercuts the disclosure requirements to the
extent they apply in the modem world where security protocols are
critical to any communication between networked computers,
particularly over the Internet. And Section III(J)(2) provides
Microsoft with seemingly unfettered discretion to decide who is
worthy to receive technical information necessary to make middleware
function on the Internet.
Microsoft can plausibly rely on Section III(J) to decline to
comply with disclosure requests based on concerns with
authentication and security that it will be able to assert with
respect to any program that involves communication between a PC and
a server on the Internet (or even within many private networks).
Authentication, security, and similar protection mechanisms are and
will continue to be integral parts of the functioning of those
products. See, e.g., Comment, William A. Hodkowski, The Future of
Internet Security." How New Technologies Will Shape the
Internet and Affect the Law, 13 SANTA CLARA COMPUTER 8: HIGH TECH.
L.J. 217 (1997). Indeed, security and rights-protection are
particularly critical to Internet-based economic activity, which
encompasses much of the computing on the Internet. As a consequence,
the security mechanisms are critically important to any Internet-
based middleware threat to the Windows OS monopoly.
For example, digital rights management ("DRM") has
become a principal part of Windows Media Player. Allowing Microsoft
to withhold data needed to permit rivals to interoperate with the
DRM specifications in Windows Media Player--specifications that
Microsoft is making universal by including Windows Media Player on
every PC -may well end effective competition for media players
within the next upgrade cycle for Windows. Similarly, any distant
remaining possibility of Internet browser (or even e-mail client)
competition should be squelched by the RPFJ's approval for Microsoft
to withhold parts of encryption-related protocols (again, as
distinct from the customer-specific keys that make use of those
protocols). For another example, Secure Socket Layer (SSL) is an
open standard that has been critical to the open development of a
relatively secure Internet. As Microsoft implements a proprietary
version of SSL--one that others will have to follow given the
ubiquity of the Microsoft browser as a result of the misconduct at
issue in this case--it will be able to conceal critical layers
of that altered protocol from rivals, essentially ending the
possibility of competition for client software for Internet
computing. And by giving Microsoft a basis to conceal authentication
[[Page 29052]]
protocols (not merely data), the RPFJ frees Microsoft Passport from
scrutiny and permits Microsoft to bind a proprietary universal
password and identity utility to its monopoly operating system
without hope of interoperation.
By permitting Microsoft to withhold key parts of encryption,
digital rights management, authentication, and other security
protocols, the RPFJ effectively allocates Web-based computing to the
monopolist of the desktop. A decree could hardly try to place a
clearer stamp of approval on an expansion of the scope of an
illegally maintained monopoly.
1. The Exclusions for Security-Related APIs and Protocols in
RPFJ(J)(1) Permit Microsoft To Hobble Disclosures That Are Critical
in Internet Computing
It is no coincidence that Bill Gates has now emphasized the
centrality of security concerns in Microsoft's future software
offerings. See, e.g., John Markoff, Stung by Security Flaws,
Microsoft Makes Software Safety a Top Goal, N.Y. TIMES, Jan. 17,
2002, at C1. That is no more than an acknowledgment of market and
technical realities that have been widely known throughout the
industry for years as Internet computing has taken hold. That market
reality should have been sufficient to make clear that an indistinct
exception of the type in RPFJ III(J)(1) would allow
Microsoft to disclose "crippled" versions of APIs and
Communications Protocols. Microsoft's sudden dedication to security
leaves no doubt that it will inject security aspects into its
proprietary APIs and its proprietary, extended implementations of
Communication Protocols. Under the terms of Section III(J)(1),
Microsoft can easily argue that disclosure of those
aspects--necessary for one machine to communicate with
another--will compromise the security from any installation or
group of installations. See also Stiglitz/Furman Dec. 30.
The CIS maintains that Section III(J)(l) simply protects
Microsoft and its customers from disclosure of customer-specific
"keys, authorization tokens, or enforcement criteria,"
and states that the exception "does not permit [Microsoft] to
withhold any capabilities that are inherent in the Kerberos and
Secure Audio Path features as they are implemented in a Windows
Operating System Product." CIS 52, 66 Fed. Reg. 59,472. But
that reading does not square with the text of the exemption. The
quoted examples are specifically presented "without
limitation." RPFJ III(J)(1). The RPFJ language
easily permits Microsoft to contend that any release of the way, its
proprietary security protocols work "would compromise the
security of a particular installation."
Most important, Section III(J)(1) clearly permits Microsoft to
withhold portions of APIs or Communications Protocols, but the
examples given of keys and authorization codes are not parts of APIs
or Communications Protocols. They may be part of customer-specific
Documentation, rather than the Documentation used by customers,
consultants, and developers to create or identify and implement
particular keys, tokens, or enforcement criteria.) The APIs and
Communications Protocols for security-related applications are not
customer-specific, nor does their disclosure compromise security. To
the contrary, the most powerful encryption and other security-
related software is openly disclosed, as is the Kerberos standard,
or even open source, as is the federal government's new encryption
standard. See, e.g., Watch your AES: A new encryption standard is
emerging, Red Herring (Dec. 1, 1999) (open source government
standard). Unless RPFJ III(J)(1) refers to a null set,
however, Microsoft will have a basis to withhold some parts of
Communications Protocols and APIs. The CIS states that
Communications Protocols "must be made available for third
parties to license at all layers of the communications stack,"
(CIS 36-37, 66 Fed. Reg. 59,468 (emphasis added)) but the RPFJ
to which Microsoft agreed--and which alone is potentially
enforceable -says no such thing. To the contrary, Section III(J)(1)
explicitly relieves Microsoft from the obligation to license some
"portions or layers of Communications Protocols" (and
some "[p]ortions of APIs")--not just client-
specific data. If part of a Communications Protocol is withheld, not
"all layers of the communications stack" are
"available * * * to license." And if part of a
Communications Protocol is unavailable, interoperation is
impossible; at certain points, the interaction between two computers
will break down.
Limited withholding of APIs or Communications Protocols (rather
than merely withholding customer-specific data) will render
middleware non-functional, since software cannot interoperate with
other software partially. Carving off some aspects of
interoperability means that there is no interoperability, thwarting
the premise of the disclosure provisions altogether.
The CIS also describes other limits that do not exist in the
text of the RPFJ. The CIS claims that the RPFJ requires disclosure
of the Communications Protocols used for the Microsoft-proprietary
implementation of the Kerberos security standard--a
"polluted" Kerberos that is the strict analogue to the
"pollute[d]" Java that figured prominently at trial. See
Microsoft III, 253 F.3d at 76-77 (quoting 22 J.A. 14,514). But
Section III(J) explicitly relieves Microsoft of the obligation to
disclose "portions" of APIs or Communications Protocols
that would "compromise the security of a particular
installation or group of installations of" security software.
That is an open invitation to withhold some part of the Microsoft-
proprietary variation of Kerberos.
The type of customer-specific information that the CIS claims is
all that can be withheld could and should be described much more
accurately and specifically in the RPFJ, not as [p]ortions of APIs
or * * * portions or layers of Communications Protocols," but
rather as "customer-specific or installation-specific data the
disclosure of which would compromise the security of a particular
installation or group of installations of anti-piracy, anti-virus,
software licensing, digital rights management, encryption or
authentication systems, including without limitation keys,
authorization tokens or enforcement criteria." But that is not
the approach the RPFJ takes. Rather, the RPFJ makes clear that
Microsoft is entitled to withhold, not merely customer- or
installation- specific data, but some "portions" of APIs
and some "portions or layers" of Communications
Protocols. All communication of substance between desktops (or other
client computers) and server computers over the Internet
increasingly involves layers of security protocols, anti-virus
routines, and the like. And one of Microsoft's principal current
efforts is to foist its own version of digital rights management
(DRM) upon providers of copyrighted content over the Internet.
When Microsoft asserts a right to withhold information, it will
be difficult indeed for the Technical Committee, DO J, or the Court
to exclude the possibility that particular "portions or layers
of Communications Protocols," or "[p]ortions" of
the APIs that permit middleware programs to operate atop Microsoft
operating systems, in fact "compromise the security of a
particular installation or group of installations." RPFJ
III(J)(1). Any such determination is likely to be time-
consuming, and related enforcement therefore would be slow. It
should be a simple matter for Microsoft to delay disclosures of this
type long enough to disadvantage competitors.
2. RPFJ III(J)(2) Permits Microsoft To Refuse Effective
Disclosure To A Range Of Potentially Effective Competitors
While RPFJ III(J)(1) allows Microsoft to refuse to
disclose portions of APIs, RPFJ III(J)(2) permits
Microsoft to withhold all of any "API, Documentation, or
Communications Protocol" having to do with "anti-piracy
systems, anti-virus technologies, license enforcement mechanisms,
authentication/authorization security, or third party intellectual
property protection mechanisms of any Microsoft product." The
RPFJ allows Microsoft to select to whom it will disclose this
information by imposing several tests that may be based on standards
apparently committed to Microsoft's sole discretion as much as is
the definition of Windows Operating System Product.
Thus, RPFJ III(J)(2)(b) permits Microsoft to
evaluate whether a competitor has a "reasonable business
need" for the desired information. What Microsoft is likely to
consider a "reasonable" business need by a competitor
may be narrow indeed. As the DC Circuit observed, Microsoft viewed
its desire "to preserve its" monopoly "power in
the operating system market" as a procompetitive justification
for exclusionary conduct. Microsoft III, 253 F.3d at 71. No doubt
Microsoft will view direct or indirect efforts to undermine its
hammerlock on the OS market as unreasonable efforts to confuse
consumers or impair the "Windows experience."
Even bona fide attempts by a monopolist to objectively evaluate
a potential competitor's "reasonable business need" can
scarcely be expected to produce consistent or foreseeable results.
Rather, that amorphous standard is likely to produce a flood of
disputes--each of which will delay the competitor's receipt of
technical information while Microsoft gains more time to respond (by
legal or illegal means) to the competitive threat. Moreover, the
"reasonable business need" must be for
[[Page 29053]]
a "planned or shipping product." If the product is
already "shipping," it may be too late for disclosure to
be helpful in the market. How fully "planned" a product
must be raises further questions that Microsoft will be able to
resolve to its own disadvantage.
In addition, Microsoft need not provide security-related APIs,
protocols, or documentation to any vendor that does not
"meet[] reasonable, objective standards established by
Microsoft for certifying the authenticity and viability of its
business." RPFJ III(J)(2)(c) (emphasis added).
That provides Microsoft with a basis for excluding almost all
nascent competitors except for those associated with established,
profitable companies. It would not be difficult to craft
"reasonable, objective standards" for "viability
of [a] business" that would exclude any Internet-focused
startup, including Netscape in 1995. Indeed, the history of the
software industry both before and after the dot-com bubble shows
that very few software companies have had "viable"
businesses. Certainly Section III(J)(2)(c) would give Microsoft at
least a debatable basis for withholding the APIs and Communications
Protocols needed to interoperate with Microsoft software over the
Internet from all open source ISVs--who are more interested in
constantly improving the quality of software than in obtaining
licensing profits. Although open source software is widely
recognized as a major threat to Microsoft's monopoly power, the
business models even of the leading Linux providers might fail any
number of "reasonable, objective standards" for
"viability." Indeed, Microsoft's CEO Steve Ballmer
describes open source software as a "cancer" that
threatens the viability of any software business. See Mark Boslet,
Open Source: Microsoft Takes Heat, INDUSTRY STANDARD, July 30, 2001;
Dave Newbart, Microsoft CEO Takes Launch Break with the Sun-Times,
CHI. SUN-TIMES, June 1, 2001, at 57. For that matter, it is not
entirely unreasonable to regard head-to-head competition with
Microsoft in platform software as a less than viable business plan;
certainly most venture capitalist and other investors hold that
view. It would not be difficult for Microsoft to craft
"objective" standards of business viability that would
exclude Corel and Novell, to name two examples. Microsoft should be
able to exclude many sources of potential cross-platform middleware
threats through RPFJ III(J)(2)(c) alone.
Yet RPFJ III(J)(2) contains yet another method for
screening competitors from access to technical information needed by
Internet-centric middleware applications. Any ISV that clears the
hurdles and receives the information nonetheless must submit its
implementation of the APIs, Documentation or Communications
Protocols for review by a Microsoft-approved third party (likely a
captive commercial ally) "to test for and ensure verification
and compliance with Microsoft specifications for use of the API or
interface, which specifications shall be related to proper operation
and integrity of the systems and mechanisms identified in this
paragraph." RPFJ III(J)(2)(d).
"[P]roper" no doubt will mean "the way Microsoft
does it," making this provision into yet another way in which
Microsoft can control the pace of innovation to ensure that the
market has no or limited access to products that improve upon
Microsoft's offerings. This mechanism means that vendors who tried
to adapt APIs to function as bridges to other platforms would have
to give Microsoft the ammunition to defeat that function--if
not simply disapprove it and await the slow operation, if any, of
the RPFJ enforcement mechanism.
The CIS suggests that there are strict limits on Microsoft's
discretionary ability to deny access to security-related aspects of
Communications Protocols and APIs, CIS 53, 66 Fed. Reg. 59,473, but
those limits are absent from the decree language. The CIS contends
that these exceptions "are limited to the narrowest scope of
what is necessary and reasonable, and are focused on screening out
individuals or firms that * * * have a history of engaging in
unlawful conduct related to computer software * * *, do not have any
legitimate basis for needing the information, or are using the
information in a way that threatens the proper operation and
integrity of the systems and mechanisms to which they relate."
Id. Setting aside the opportunity for Microsoft to argue, as it has
in other contexts, that the injection of competing software
"threatens the proper operation and integrity" of its
products, see Microsoft III, 253 F.3d at 63-64, the CIS simply
does not address the broadest basis for withholding APIs and
Communications Protocols under Section III(J)(2): Microsoft's
ability to decide, based on criteria within its own discretion, that
an ISV is not "authentic[]" and "viab[le]."
RPFJ III(J)(2). That provision could provide a basis
for excluding all but a handful of other software companies.
G. RPFJ III(1) Would Place A Judicial Imprimatur On
Microsoft's Use Of Technical Information As A Lever To Extract
Competitors" Intellectual Property
The RPFJ would actually increase Microsoft's bargaining power by
explicitly placing a judicial imprimatur on demands by Microsoft
that recipients of APIs cross-license any intellectual property
developed using the APIs. Section III(I) of the RPFJ permits
Microsoft to use intellectual property licensing terms to impede
whatever competitive benefits otherwise might have arisen from its
disclosure obligations. Microsoft's licenses "need be no
broader than is necessary to ensure" the licensee's ability to
"exercise the options or alternatives expressly
provided" by the RPFJ. RPFJ 111(I)(2). A welter of litigation
over the breadth that is "necessary"--and the
collateral restrictions that are permissible--is certain to
continue through the life of the decree.
Similarly, Microsoft should have no difficulty delaying the use
of any option for which it is entitled to charge a royalty, simply
by setting a "reasonable" royalty (RPFJ
(I)(1)) beyond what any OEM could afford to pay in that
competitive, low-margin business. If OEMs have to pay Microsoft to
exercise any of their icon-shuffling options--a state of
affairs clearly envisioned in RPFJ III(I)--the
slim likelihood that any OEM will take advantage of those provisions
will be lessened still further. Microsoft need not permit transfers
or sublicenses of API rights, imposing yet another barrier to entry.
Id. III(I)(3). And Microsoft could ensure, through licenses, that
end-users could not make competitively significant alterations to
the Microsoft-approved package.
Most important, however, the RPFJ specifically permits Microsoft
to use its monopoly as a means to force access to others"
intellectual property. Microsoft can assert a right to license
"any intellectual property rights" a competitor
"may have relating to the exercise of their options or
alternatives provided by" the RPFJ. RPFJ
III(J)(5). Thus, to take advantage of a competitive
option, an ISV will need to license its product to Microsoft, and
hope that Microsoft does not use that license as a means to produce
a copycat program and bundle it into Windows. Many companies long
since departed the software industry after entering into what they
thought were limited exchanges of intellectual property with
Microsoft. \16\
---------------------------------------------------------------------------
\16\ See, e.g., Testimony of Mitchell Kertzman before the
Sen. Jud. Comm., July 23, 1998 (detailing Sybase's difficulties in
this regard); Statement of Michael Jeffress before the Sen. Jud.
Comm., July 23, 1998 (after TVHost revealed its intellectual
property to Microsoft in failed negotiations to sell the company,
Microsoft imitated the product).
---------------------------------------------------------------------------
Although the CIS states that Microsoft could demand only any IP
rights it would need to comply with its own disclosure obligations
under the RPFJ, CIS 50-51, 66 Fed. Reg. 59,472, the broad
"relating to" language does not compel that narrow
reading, and may not support it at all. The vague limitations in
Section III(I)(5) are unlikely to reassure ISVs that Microsoft will
not use its license to analyze the ISV's IP rights well enough to
design around it and bundle a copycat program into Windows or
Office, as has happened many times before. This weapon should give
Microsoft additional ability to prevent industry participants from
taking advantage of the superficially appealing provisions of the
RPFJ.
VI. BUILT-IN DELAYS EXACERBATE THE DECREE'S UNJUSTIFIABLY BRIEF
DURATION
It is remarkable that the RPFJ would reward Microsoft for
litigating and losing broadly on liability with a consent decree
that is shorter than other such decrees, and may be the shortest
ever. DOJ antitrust consent decrees now routinely last ten
years.\17\ Section V of the RPFJ provides for a term of only five
years, however, less time even than Microsoft has engaged in the
illegal conduct that was the subject of this litigation. The decree
plainly should be longer than the period between the initiation of
the misconduct and the imposition of relief, and at least as long as
the typical
[[Page 29054]]
relief.\18\ Microsoft has enjoyed the benefits of its misconduct for
at least seven years. The RPFJ not only would allow Microsoft to
retain those benefits, but would subject Microsoft to its light and
uncertain obligations for no more than five years, and scarcely four
and one-half years for the many obligations that are delayed.
---------------------------------------------------------------------------
\17\ As of 1998 it was the policy of the Antitrust
Division that consent decrees last for at least 10 years. See
ANTITRUST DIVISION MANUAL, at IV:54 (3d ed. Feb. 1998); see also V
VON KALINOWSKI ET AL., ANTITRUST LAWS AND TRADE REGULATION 96.0112],
at 96-4; 96.0211] at 96-10 (2d ed. 2000).
\18\ If Microsoft actually and convincingly lost its
monopoly before the expiration of a decree of appropriate length, it
could, of course, move for modification or termination of the decree
under Rufo v. Inmates of Suffolk County Jail, 502 U.S. 367 (1992).
---------------------------------------------------------------------------
The RPFJ further abbreviates its already brief duration, and
undermines its already insubstantial requirements, by building in
long delays before Microsoft must comply with its limited duties.
Thus, Microsoft need not comply with the icon-related requirements
until November 2002, see RPFJ III(H)(1), although
Microsoft needed only two weeks after the DC Circuit decision to
offer OEMs roughly the same flexibility with icon display as the
RPFJ requires, and needed no more than three additional months to
implement that flexibility on Windows XP. See Microsoft Announces
Greater OEM Flexibility for Windows (Microsoft press release July
11, 2001).
Similarly, Microsoft need not comply with its API disclosure
requirements or the OEM flexibility provisions until November 2002,
RPFJ III(D), (H), and need not comply with the
Communications Protocol disclosure requirements until August 2002.
Id. III(E). See also Stiglitz/Furman Dec. 30. These
built-in delays cut far into the unusually brief term of the decree.
The "Timely Manner" governing Microsoft's disclosure
obligations in RPFJ III(D)-(E)--after the
initial delay--permits Microsoft to withhold that disclosure
until a product version has been distributed to 150,000 beta
testers. See RPFJ VI(R). "Beta testers" in
undefined. Until recently, Microsoft, like other vendors,
distinguished between "beta testers" who agreed to
provide substantial feedback to the software manufacturer, and
"beta copies" of a program that might be distributed
without such obligations or expectations. Few, if any, beta testing
programs involved 150,000 beta testers under that usage. A return to
the former terminology could postpone the "Timely
Manner" until commercial release. And in any event, it should
be a simple matter for Microsoft to delay distribution of any beta
version to 150,000 testers, however defined.
Here again, the contrast with the interim remedies of the
original decree is striking. The "Timely Manner"
definition in that judgment required Microsoft to disclose
"APIs, Technical Information and Communications Interfaces * *
* at the earliest of the time that" those items were (1)
disclosed to Microsoft's applications developers, (2) used by
Microsoft's own Platform Software developers in software released by
Microsoft in alpha, beta, release candidate, final or other form,
(3) disclosed to any third party, or (4) within 90 days of a final
release of a Windows Operating System Product, no less than 5 days
after a material change is made between the most recent beta or
release candidate version and the final release.
97 F. Supp.2d at 73-74 ( 7(ff)) (emphasis
added). While the vacated judgment made a strong effort to place
outside developers on the same footing as Microsoft's applications
developers throughout the development process, the RPFJ permits
Microsoft to delay disclosure until the last minute, without any
analogue to the requirement that Microsoft promptly update changes
made in the final pre-release stage.
Another significant built-in delay results from the definition
of "Non-Microsoft Middleware Product" to include only
products that have one million users. RPFJ VI(N) (ii).
That definition governs the extent of the anti-retaliation
provisions in RPFJ III(A)(1), III(C), and III(H).
Moreover, the icon flexibility and information disclosure
provisions apply only to Microsoft Middleware and Microsoft
Middleware Products, each of which must have functionality similar
to a Non-Microsoft Middleware Product. See RPFJ
VI(J)(3), VI(K)(2)(b)(ii). By restricting all of
these protections to middleware products that have distributed more
than one million copies, the RPFJ encourages Microsoft to crush new
middleware threats at the earliest stages. That is, the RPFJ puts a
premium--indeed, a judicial imprimatur--on the
monopolistic exclusion of nascent threats before the innovations in
those products reach a sizable mass of consumers. That flies in the
face of the concerns behind the judgments of liability in this case.
See Microsoft III, 253 F.3d at 54, 79.
VII. ADDITIONAL WEAKNESSES UNDERCUT THE RPFJ
A. The Anti-Retaliation Provisions Are Deeply Flawed
Although anti-retaliation provisions are clearly necessary, the
provisions in the RPFJ proceed from a misguided premise that
retaliation by the monopolist--abuse of monopoly power--is
permitted unless squarely forbidden. The well-meaning restrictions
in the RPFJ leave Microsoft with ample recourse to use its monopoly
power to retaliate against those who aid competitive threats. See
Stiglitz/Furman Dec. 31-32.
Most important, the anti-retaliation provisions permit Microsoft
to withdraw the Windows license of any OEM (or other licensee) that
does not serve Microsoft's anticompetitive bidding. The CIS (at 27,
66 Fed. Reg. 59,466) suggests that the provision of RPFJ
III(A) requiring notice and opportunity to cure a
violation provides some kind of protection to OEMs. But the
protection is evanescent, disappearing entirely after two notices
within a license term. See RPFJ Ill(A). See also Stiglitz/Furman
Dec. 31-32.
Such notices will become routine, quickly and completely
nullifying this provision. In the rough-and-tumble of everyday
business, parties frequently diverge in minor respects from the
terms of their agreements. The CIS admits that "Windows
license royalties and terms are inherently complex." CIS 28,
66 Fed. Reg. 59,466. Given that complexity, it would be surprising
if most OEMs did not transgress some term of their Windows licensing
agreements every year or so, if not more often. Such transgressions
would provide ample basis for Microsoft to retaliate without fear of
interference from the RPFJ.
There is no limit on what Microsoft can invoke as a reason for
termination, that is, there is no requirement that terminations be
for cause, much less for a material breach of the license agreement.
Indeed, the sudden termination that Microsoft may impose after two
notices--even notices of purported violations that were
promptly and completely cured--need not even be based on
something the OEM could cure.
The anti-retaliation provisions for software and hardware
vendors contain another weakness. Section III(F)(1)(a) forbids
retaliation against hardware and software vendors who support
software that competes with Microsoft Platform Software or that runs
on other platforms. But that provision therefore permits Microsoft
to use its Windows monopoly to crush middleware vendors if Microsoft
does not yet have competing middleware (see RPFJ
VI(K)-(L)) and whose middleware applications are
used on the Windows platform--where any middleware would have
to start in order to be a practical bridge to another platform.
Moreover, when prohibiting a specific type of retaliation would
also help undermine the applications barrier to entry, the RPFJ hews
to a general approach rather than focusing on precise adjudicated
conduct. For example, Microsoft threatened to discontinue its port
of Microsoft Office for the Macintosh unless Apple ceased supporting
Netscape Navigator. See Microsoft III, 253 F.3d at 73-74. Yet
the RPFJ does not require Microsoft to continue to offer Mac Office
(much less to keep the port current)--an expedient that would
take away Microsoft's weapon rather than merely admonishing it to
behave well, and would tend to undermine the applications barrier to
entry as well.
B. Microsoft Can Evade The Price Discrimination Restrictions
The uniform pricing provisions in RPFJ III(B) have
too narrow a reach to provide significant limits on Microsoft's
ability to engage in price discrimination in order to force OEMs to
eschew non-Microsoft products that may threaten Microsoft's OS
monopoly. Microsoft's well-known market position in other products
permits easy evasion of these limits. For example, nothing prevents
Microsoft from discriminating in the pricing of its monopoly suite
of desktop productivity applications, Microsoft Office, to which
every OEM of any size needs access. Moreover, the leading PC OEMs
all build server computers using Intel-based hardware, and
increasingly rely on revenue from servers to make up for the
exceptionally low margins on desktop PCs. To continue in the Intel-
based server business, PC OEMs must license Microsoft's server
operating systems, which are dominant on the Intel-based platform.
The RPFJ places no limits on Microsoft's pricing of server operating
systems, providing another outlet for the nullification of RPFJ
III(B).
Even on their own terms, however, the RPFJ pricing provisions
contain a substantial loophole. Microsoft can reward an OEM for an
"absolute level * * * of promotion" of Microsoft
products. RPFJ III(A). That
[[Page 29055]]
provides a means for Microsoft to distinguish between OEMs who make
sure that Microsoft software dominates their offerings, and OEMs who
either promote competing software or simply do not interfere with
consumers" choices.
C. Microsoft Can Enforce De Facto Exclusivity
Despite a superficial prohibition, Sections III(F)(2) and III(G)
permit Microsoft to impose practical, effective exclusivity
obligations on ISVs and others who need access to Windows to develop
their products. Microsoft need do no more than recast its agreements
with ISVs as contracts to "use, distribute, or promote * * *
Microsoft software" or "to develop software for, or in
conjunction with, Microsoft," RPFJ III(F)(2), or
as a "joint venture," joint development * * *
arrangement" or "joint services arrangement." Id.
III(G). New "joint development agreements"
or "joint services arrangements" likely will supersede
the current licenses for use by ISVs of Microsoft software
developments tools and perhaps also the current arrangements for
preferential access under MSDN. At best, a decree court would have
to undertake a full antitrust analysis of whether the joint venture
was "bona fide." Id. III(G). To nullify
RPFJ III(F)(2), Microsoft could simply change its
development tools agreements to require use of Microsoft software -
which literally would be "a bona fide contractual obligation *
* * to use * * * Microsoft software." Since any ISV that wants
its software to run on Windows almost certainly would need to use
Microsoft's development tools, the anti-exclusivity provision, like
so many others in the RPFJ, would have no practical effect.
DOJ has defended this provision as necessary to permit
legitimate "procompetitive collaborations." CIS 44, 66
Fed. Reg. 59,470. But the broad terms of the RPFJ itself provide
little basis for hope that the objects of joint ventures permitting
exclusivity will not include a variety of "new" products
that amount to little more than routine alterations to Windows and
other Microsoft products in conjunction with requests from other
industry participants. It is not uncommon for an ISV to ask for a
new API, or for an IHV to ask for some other specification in
Windows. These exercises soon may become objects of "joint
ventures" or "joint development agreements" under
RPFJ III(G).
RPFJ III(G)(1) undercuts its superficial
prohibition on contracts that would require participants at
different levels of the market to install or promote Microsoft
Platform Software to a "fixed percentage" of those
participants" own customers. Section III(G)(1) permits
Microsoft to impose such contracts so long as it "in good
faith obtains a representation that it is commercially practicable
for the entity to provide equal or greater distribution, promotion,
use or support for software that competes with Microsoft Platform
Software." Such representations should be easy to come by, so
long as Microsoft pays enough. There is nothing to require a single
party making such a representation actually to carry out the
parallel distribution that it told Microsoft was "commercially
practicable." And it should be easy enough for Microsoft,
through a wink and a nod, to ensure that any such representations
were not accompanied by efforts to prove that commercial
practicability to Microsoft's detriment.
VIII. THE RPFJ'S ENFORCEMENT MECHANISMS ARE FUNDAMENTALLY
INADEQUATE.
As we have shown above, the RPFJ fails adequately to prevent
Microsoft from engaging in illegal and anticompetitive practices,
and allows it to continue the patterns of behavior that led to this
litigation in the first place. The RPFJ suffers from an important
secondary flaw, however: the enforcement mechanisms contained in
Section IV are fundamentally inadequate. The RPFJ commits much of
the practical enforcement responsibility to a "Technical
Committee," RPFJ IV(B), that would monitor "enforcement
of and compliance with" the RPFJ. Id. IV(B)(1). The Technical
Committee is likely to impede enforcement rather than aid it. First,
Microsoft--the antitrust violator--could exert
inappropriate control over the membership of the Technical
Committee. Rather than creating a special master or an independent
review committee to monitor compliance with the consent decree, the
RPFJ allows Microsoft to have an equal voice with the plaintiffs in
choosing the members of the Technical Committee; indeed, Microsoft
may choose one of the three members outright. Id. IV(B)(3). Although
appointing a special master with real (though reviewable) power
might make sense as a matter of judicial administration, allowing
Microsoft to choose its own monitor makes no sense at all. The
composition of the Technical Committee suffers from a second defect.
The RPFJ provides that "[t]he Technical Committee members
shall be experts in software design and programming." RPFJ
IV(B)(2) (emphasis added). The interpretation of the RPFJ is largely
a legal matter, however, dependent on adequate knowledge of the
antitrust Section after section of the RPFJ is extraordinarily
vague.\19\ Experts in software design simply will not have any basis
adequately to review complaints that Microsoft's behavior fails to
comply with the RPFJ. However, that is the entire purpose of the
Technical Committee.
---------------------------------------------------------------------------
\19\ For example, as we discussed above the RPFJ relies
heavily on a "reasonableness" standard of conduct that
simply reproduces a full analysis under the antitrust laws.
Antitrust remedies, like other injunctive decrees, are supposed to
be amenable to swift and sure enforcement, according to standards
that give warning of what is forbidden and what is permitted both to
the wrongdoer and to its potential victims. But again and again, the
RPFJ would require both the Technical Committee and eventually the
decree court to determine whether Microsoft's conduct was
"reasonable."
---------------------------------------------------------------------------
Not only is the selection and composition of the Technical
Committee problematic; the RPFJ's restrictions on how the Technical
Committee can go about its business are equally inadequate. For
example, it is likely that all third-party allegations of misconduct
by Microsoft will be reviewed by the Technical Committee.\20\ But
the Technical Committee lacks any real power, and operates almost
entirely in secrecy. Even if the Technical Committee finds Microsoft
to be violating the RPFJ, its sole recourse is to "advise
Microsoft and the Plaintiffs of its conclusion and its proposal for
cure." Id. IV(D)(4)(c). If DOJ or the settling State
plaintiffs proceed with a complaint, none of the "work
product, findings or recommendations by the Technical Committee may
be admitted in any enforcement proceeding before the Court for any
purpose, and no member of the Technical Committee shall testify by
deposition, in court or before any other tribunal regarding any
matter related to [the RPFJ]." Id. IV(D)(4)(d). Enforcement
would have to start over from scratch.
---------------------------------------------------------------------------
\20\ While third parties have the right to raise
complaints with the Internal Compliance Officer, see RPFJ
IV(C)(3)(g), the RPFJ gives them no incentive to do so; such
complaints would merely allow a proven antitrust violator itself to
determine whether it has violated the RPFJ or again violated the
antitrust laws. Although the RPFJ also allows third parties to
submit complaints directly to the plaintiffs, see id. IV(D)(1), the
plaintiffs can thereafter at their sole discretion refer any such
complaints to the Technical Committee, id. IV(D)(4)(a), or to the
Internal Compliance Officer, id. IV(D)(3)(a).
---------------------------------------------------------------------------
In effect, the Technical Committee's investigation is simply a
waste of time. Even were the plaintiffs to decide, based on a
Technical Committee report, that Microsoft had violated the RPFJ,
the plaintiffs would need independently to investigate that
violation under Section IV(A)(2). Indeed, the Technical Committee's
reports to the plaintiffs will be secret. See RPFJ IV(B)(8)(e), (9).
Ultimately, the Technical Committee simply injects delay into the
process. But delay is indisputably in Microsoft's interest;
Microsoft's monopolies bring it $1 billion each month in free cash
flow, see Rebecca Buckman, Microsoft Has the Cash, and Holders
Suggest a Dividend, WALL ST. J., Jan 18, 2002, at A3. Microsoft not
only can afford to contest enforcement vigorously, but would not
have to postpone enforcement for long before the RPFJ expires.
Finally, the "crown jewel" provision in the RPFJ is
grossly inadequate. If at any point the court were to find that
Microsoft had "engaged in a pattern of willful and systematic
violations," RPFJ V(B) (emphasis added), the RPFJ provides
only one remedy for plaintiffs or the court: to extend the
inadequate, and already overly-short, consent decree by "up to
two years." But that is no deterrent. Willful and systematic
violations should result in divestiture that terminates the
illegally maintained monopoly once and for all. See Microsoft III,
253 F.3d at 103; United Shoe, 391 U.S. at 250. Slightly prolonging a
failed decree makes no sense at all.
CONCLUSION
The Revised Proposed Final Judgment should be rejected as
contrary to the public interest.
Respectfully submitted.
Donald M. Falk
Mayer, Brown & Platt
555 College Avenue
Palo Alto, California 94306
(650) 331-2030
(650) 331-2060 facsimile
David M. Gossett
Mayer, Brown & Platt
[[Page 29056]]
1909 K Street, NW
Washington, DC 20006
(202) 263-3000
Edward J. Black
Jason M. Mahler
Computer and Communications
Industry Association
666 11th Street NW Washington, DC 20001 (202) 783-0070
Dated: January 28, 2002
MTC-00030611
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, Plaintiff, v. Civil Action No.
98-1232 (CKK) MICROSOFT CORPORATION, Defendant.
SIWTE OF NEW YORK, et al., Plaintiffs, v. Civil Action No.
98-1233 (CKK) MICROSOFT CORPORATION, Defendant.
DECLARATION OF EDWARD ROEDER
Edward Roeder declares under penalty of perjury as follows:
I. INTRODUCTION
1. I am a Washington journalist, author, lecturer, and editor,
expert on the U.S. Congress, elections and efforts to influence the
U.S. government. My byline has appeared in most major U.S.
newspapers, many top magazines, and on all major wires and networks.
I have written, edited, produced and reported on money in politics,
Congressional ethics and the American political economy for more
than three decades. My experience includes work as a Senate
subcommittee counsel, House select committee chief investigator,
United Press International editor, publisher, White House
speechwriter, government aide at level GS-15, freelance reporter and
publisher.
I founded Sunshine Press Services, Inc., a Washington news
service and publishing house specializing in "Casting Light on
Money and Politics." Sunshine has developed References to Use,
Not Just Peruse TM, computer-based reference works on U.S. politics.
As National Political/Finance Editor for United Press International,
I produced the nation's first weekly state-by-state computer-
generated reports on federal election financing.
In 1974, I became the first freelance correspondent fully
accredited to U.S. House & Senate Press Galleries. As a
freelance print and broadcast reporter, I specialized in covering
elections and election financing. In Roeder v. FEC, I successfully
sued Federal Election Commission under the federal Freedom of
Information Act, forcing a reduction in fees for records and release
of computerized data.
My experience includes lecturing about covering influences on
government at the graduate schools of journalism at Columbia,
Northwestern (Medill), American, Maryland and other universities,
and at the Hastings Center, the Heritage Foundation, and many other
forums, and testifying before U.S. House and Senate committees. I
also taught a public affairs course, Shadow Government in the
Sunshine State, for three terms at Florida State University. I have
appeared on ABC's Nightline, the CBS Evening News, World News
Tonight (ABC), NBC Nightly News, All Things Considered (NPR), John
McLaughlin, and many other broadcast outlets. My reference
publications include PACs Americana, the 1,150-page authoritative
reference on political action committees and their interests,
Congress On Disk TM, the pioneer diskette publication on politics,
PAC-Track TM, covering all transactions by political action
committees and party committees, FatCat-Track TM, covering
"soft money" and all contributions of $200-and-up from
individuals to any federal party, campaign or PAC, and Ready Money
Reports TM, comparing relative financial standings of each federal
campaign. A partial list of news clients is attached as Appendix B.
2. I was commissioned by the Computer & Communications
Industry Association to conduct a review of publicly available
documents, news reports, and commentary regarding Microsoft's
lobbying and political contributions since the United States
Department of Justice and 19 States filed suit against Microsoft in
1998.\1\
---------------------------------------------------------------------------
\1\ I am aware that Microsoft has undertaken an effort to
use the Court discovery process to build a political case against
its competitors. The relevancy of Microsoft's strategy will have to
be determined by the Court since Microsoft--and not its
competitors--have been found to be liable under the antitrust
laws. I took input and advice from a broad range of sources in
conducting this research, including CCIA and its members. This
research is nonetheless based on the extraordinary public record of
Microsoft's political activities during the timeframe of this case.
I have also undertaken extensive original review of the records of
the Federal Election Commission regarding election finance. These
records covering all election cycles since 1970-80 have been
available in computerized format since the court-ordered settlement
of Roeder v. FEC, a Freedom of Information lawsuit I filed in this
very courthouse two decades ago.
---------------------------------------------------------------------------
3. My review of the available documents has led me to conclude
that over the past five years Microsoft has engaged in a
"pattern and practice" of political influence peddling
in many ways unprecedented in modem political history.\2\ What makes
Microsoft's lobbying efforts so unique is not necessarily the size
(i.e. level of political contributions) but the scope of its efforts
and the speed at which Microsoft went from having almost no
political presence in Washington DC to having one of the largest and
most sophisticated political operations in history.
---------------------------------------------------------------------------
\2\ "Microsoft Targets Funding for Antitrust
Office." Dan Morgan and Juliet Eilperin. Washington Post
October 15, 1999. "Pro-Microsoft lobbying to limit antitrust
funding irks top lawmakers." The Wall Street Journal October
15, 1999. "Microsoft Paid For Ads Against DoJ Case."
Madeleine Acey. TechWeb September 20, 1999. "Microsoft Paid
For Ads Backing Its Trial Position." David Bank. The Wall
Street Journal September 20, 1999. "Microsoft Paid For Ads
Backing It In Trial." Seattle Times September 19, 1999.
"Pro-Microsoft Ads Were Funded by Software Giant." Greg
Miller. Los Angeles Times September 18, 1999. "Microsoft Paid
for Ads About Trial." Associated Press September 18, 1999.
"Microsoft Covered Cost of Ads Backing It in Antitrust
Suit." Joel Brinkley. New York Times September 18, 1999.
"Rivals fear Microsoft will cut a deal." John Hendren.
The Seattle Times June 21, 2001. "Bush's Warning: Don't Assume
Favors Are Due." Gerald F. Seib The Wall Street Journal
January 17, 2001. "Bounty Payments are offered for pro-
Microsoft letters and calls." The Wall Street Journal October
20, 2000. "Microsoft is Source of 'Soft Money"
Funds Behind Ads in Michigan's Senate Race." John R.
Wilke. The Wall Street Journal October 16, 2000. "Microsoft
leans creatively on levers of political power as breakup decision
looms, 'stealth" lobbying efforts aim for
survival." Jim Drinkard and Owen Ulmann. USA Today May 30,
2000. "Microsoft's All-Out Counterattack." Dan
Carney, Amy Borrus and Jay Greene. BusinessWeek May 15, 2000.
"Aggressiveness: It's Part of Their DNA." Jay Greene,
Peter Burrows and Jim Kerstetter. BusinessWeek May 15, 2000.
"The Unseemly Campaign of Microsoft." Mike France.
Business Week April 24, 2000. "Microsoft's Lobbying
Abuses." Editorial. New York Times November 1, 1999
"Awaiting Verdict, Microsoft Starts Lobbying Campaign."
Joel Brinkley. New York Times November 1, 1999. "Microsoft
Seeks Help Of Holders." John R. Wilke. The Wall Street Journal
November 1, 1999. "Microsoft's Bad Lobbying." Editorial.
Washington Post October 24, 1999. "Microsoft Attempt To Cut
Justice Funding Draws Fire." David Lawsky. Reuters October 17,
1999. "Microsoft Targets Funding for Antitrust Office."
Dan Morgan and Juliet Eilperin. Washington Post October 15, 1999.
"Pro-Microsoft lobbying to limit antitrust funding irks top
lawmakers." The Wall Street Journal October 15, 1999.
"Microsoft Paid For Ads Against DoJ Case." Madeleine
Acey. TechWeb September 20, 1999. "Microsoft Paid For Ads
Backing Its Trial Position." David Bank. The Wall Street
Journal September 20, 1999. "Microsoft Paid For Ads Backing It
In Trial." Seattle Times September 19, 1999. "Pro-
Microsoft Ads Were Funded by Software Giant." Greg Miller. Los
Angeles Times September 18, 1999. "Microsoft Paid for Ads
About Trial." Associated Press September 18, 1999.
"Microsoft Covered Cost of Ads Backing It in Antitrust
Suit." Joel Brinkley. New York Times September 18, 1999.
---------------------------------------------------------------------------
4. By "scope" I am referring to the breadth of
Microsoft's efforts. Microsoft has not merely established one of the
largest Political Action Committees, or leapt to the top of the
corporate contributor list in "soft money," unregulated
corporate contributions. Over the past five years Microsoft has also
assembled a large lobbying office and retained dozens of high-
powered consultants; Microsoft has created numerous
"front" groups and has contributed heavily to a variety
of think tanks and other organizations willing to espouse
Microsoft's view of antitrust policy and this case; and Microsoft
has created a variety of grassroots capabilities that appear to be
directed at state-level government.
5. Two key factors indicate that Microsoft's lobbying efforts
were designed and directed to try to minimize the impact of its
lawsuit and try to achieve a result in the political process that it
is apparent it could not achieve in the legal process. First,
Microsoft's efforts are new. Their onset coincides with the time the
government sued Microsoft and they have continued and escalated ever
since. Second, Microsoft's efforts are completely out of proportion
to the rest of the high-technology industry. There is not one other
example of a software, computer hardware, or Internet firm that
comes anywhere near Microsoft's level of campaign contributions.
6. I am not a lawyer, an expert on antitrust or an expert on the
Tunney Act. My substantive views of of the Proposed Final Judgment
are based primarily on the analysis of Nobel economist Joseph
Stiglitz, whose declaration also supports the CCIA submission.
7. The Tunney Act was enacted after the ITT scandal during the
Watergate affair. As
[[Page 29057]]
the court is aware, Watergate spurred a number of political reforms
requiring "sunshine" on the political activities of
special interests, in particular. But the Tunney Act was also
enacted during a different political era, when political influence
peddling was far less sophisticated than it has become after a
quarter-century of efforts to circumvent the "reforms"
of the 1970s. By necessity, political influence peddling is no
longer necessarily marked by a single "transaction" or a
single "meeting," or even an overt "quid pro
quo." In fact, one of the effects of the modern reforms has
been to legalize many activities--especially the transfer of
funds from corporate to political coffers--that had long been
illegal under laws in effect since 1907 or 1934. Lobbying today is
marked by incrementalism, where there may not be any single meeting,
or any single contribution, or any single agreement. Rather, over
time, what may develop is an "understanding" of the
respective parties" interests, objectives, and desired
outcomes. Instead of corruptly influencing politicians to buy a
discreet government decision, the money exerts far broader influence
over appointments, policy frameworks or positions, and ultimately,
decisions. Much of it may be legal, but it's far more corrupting
than simple bribery.
The simple matter of paying off a corrupt politician to obtain a
favorable government decision is certainly offensive and unfair to
the voters and those who are disadvantaged by the decision. Yet such
petty or grand corruption, if isolated, does not seriously threaten
the American system. What Microsoft has accomplished over the past
half decade, however, presents a far darker prospect. By pouring
money into America's institutions of political pluralism, rewarding
those organizations and individuals that do its bidding and denying
or limiting funding to its opponents, Microsoft has in some ways
corrupted American political discourse itself.
Newspapers that have run an editorial or opinion article
sympathetic to a Microsoft position, reporters who have interviewed
a professor, politician, or pundit about this antitrust action, and
anyone who has hosted or observed public discourse on the subject
must now wonder: Were the views expressed independent and sincere,
or were they purchased by an unseen hand, smothering the American
marketplace of ideas?
As is detailed below, Microsoft's efforts to subvert democratic
institutions such as political campaigns and debates, party
organizations, news outlets, think tanks and government offices have
been so vast as to be a new phenomenon, unenvisioned and unaddressed
by existing political mechanisms intended to check the influence of
special interests. Limited campaign contributions can serve the
purpose of encouraging, facilitating, extending and opening
political discussion. But political money in such vast amounts is a
substitute for politics, not a means of undertaking political
action. While the modem-day political pressure brought to bear by
Microsoft in the last decade may not be precisely the same as that
undertaken by ITT in the 70%, it is no less objectionable to the
Court's charge of acting on behalf of the "public
interest."
8. Based on my review of the public record and the declaration
provided by Dr. Stiglitz, it is apparent that the Department of
Justice undertook a major "change in policy" at a
critical moment this past fall. My belief- again based largely on
Dr. Stiglitz" analysis and substantiated by a wide array of
antitrust experts and scholars--is that the Proposed Final
Judgment cannot be reconciled with the government's extensive court
victory. The public record suggests a Microsoft strategy that
appears to defeats in the legal process, but which focuses on
winning an acceptable outcome through the political process. It
appears to be working. Indeed, if it weren't working, such vast
expenditures might give rise to a shareholder suit for breach of
fiduciary duty. If Microsoft's money has had the desired effect of
inducing the U.S. government to throw in the towel on the biggest
antitrust suit in history, such a suit could be easily defended. But
to argue that Microsoft had no such intent is tantamount to
suggesting that its corporate spending it in the control of
squandering fools.
9. I have also reviewed Microsoft's lobbying disclosures filed
before the court as part of the Tunney Act. Again, while I am not a
lawyer, my review of public documents, press reports and the plain
language of the statute leads me to believe that disclosures made to
the court can not possibly be reconciled with Microsoft's lobbying
activities surrounding both this case and this settlement.
10. Various press reports indicate that Microsoft is trying to
convince the court and the public that the litigating states have
been "put up to this" (i.e. continuing to litigate
through the remedy phase) by Microsoft's competitors, and therefore
cannot be acting in the public interest. My review of public
documents suggests this theory is backwards and should be
particularly alarming to the Court. The far more likely scenario,
into which the Court must inquire, is whether the Department of
Justice has executed Administration policy in response to the
unprecedented campaign to influence the new Administration's
antitrust policy generally, and as antitrust policy applies to the
high-technology sector and Microsoft, in particular.
11. In fact, with the benefit of hindsight, various Justice
Department actions make perfect sense in the context of my research.
The Department went to great lengths to create the appearance they
were going to be "tough" with Microsoft, beginning with
enlisting President Bush's renowned litigator, Phillip Beck. What
actually occurred, however, is they systematically appear to have
given away their hard-fought court victory. First, the Department
unilaterally abandoned its pursuit of structural relief, and
informed the court it would not seek a review of the Sherman Act
Section 1 tying claim on remand. Then the Department suggested it
would base its remedy on the interim conduct remedies ordered by
Judge Jackson. Then the Department began speaking of the extensive
litigation risk involved in pursuing a remedy based on the need for
immediate relief. Finally, the Department--outside of public
scrutiny--emerges with the Proposed Final Judgment, which based
on Dr. Stiglitz" analysis appears to be woefully inadequate.
12. I declare to the court that where "there is smoke
there is typically fire." Even if the "fire" in
the context of modem day political influence peddling is very
subtle, it nonetheless does not serve the public interest. My view
is that Microsoft's political campaign has been so extensive the
court should take immediate notice. In modem political influence-
peddling and purchasing, Microsoft has set a new bar. South Korea's
spreading cash throughout Washington in the 1970s Tongsun Park
scandal paled in comparison.
13. During the course of my research I was struck by the
similarities between Microsoft and the current scandal involving
Enron Corporation. While Enron, of course, is in an entirely
different business, it seems the core issue--from a public
disclosure perspective--is its campaign contributions and its
ability to influence the nation's energy policy. Microsoft's
campaign contributions significantly surpassed those of Enron;
Microsoft was a defendant in a major governmental lawsuit; and it
appears Microsoft may have successfully influenced the
Administration's antitrust policy, with major implications for legal
antitrust precedent.
14. My recommendation to the court is to undertake an immediate
review of Microsoft's lobbying activities surrounding this
settlement, with particular attention to meetings with the Justice
Department or the White House by Microsoft or its agents. Included
in this review should also be contacts made on Microsoft's behalf to
the Justice Department or the White House by Members of Congress,
their official staff, and campaign staff. The court should also
interview Department of Justice staff who do not operate within the
sphere of political appointees. And the court should interview the
political appointees of the Attorney General and their staff.
Moreover, the court should review any contacts or communications
between the Republican National Committee, the National Republican
Senatorial Committee, the Republican Congressional Campaign
Committee, and the White House or the Justice Department. Lastly,
the court should review any contacts or communications between
Microsoft and the settling states. Anything less would clearly not
vindicate the public interest.
II. REVIEW OF PUBLIC RECORD
15. Since May 1998, Microsoft has fought strenuously in the
courtroom to defend its "freedom to innovate" and to
continue with business as usual. In fact, plugging in
"Microsoft + trial" into the Google search engine
produces more than 697,000 article hits. When "Microsoft +
politics" is entered into the search engine, Google produced
nearly 448,000 articles and links. But as hard as it fought inside
the courtroom, Microsoft fought far harder--often
secretly--outside the courtroom to influence the outcome of the
trial. In a campaign unprecedented in its size, scope, and cost,
Microsoft used campaign contributions, phony front groups, intensive
lobbying, biased polling, and other creative, if not possibly
unethical, pressure and public relations tactics to escape from the
trial with its monopoly intact. According to media accounts,
experts, and my own research,
[[Page 29058]]
Microsoft spent tens of millions of dollars to attempt to create an
aura outside the courtroom of what it could not prove
inside--innocence. According to Business Week Magazine:
"Even seasoned Washington hands say they have never seen
anything quite as flamboyant as the Microsoft
effort." \3\
---------------------------------------------------------------------------
\3\ BusinessWeek, May 15, 2000, Carney
---------------------------------------------------------------------------
16. In late 2001, when the Department of Justice and a group of
state Attorneys General agreed to the currently proposed settlement,
it appeared as if Microsoft's efforts were successful. Fortunately,
two obstacles stand in the way of Microsoft and the continued
monopolization of the software industry: the remaining state
Attorneys General who are continuing to litigate for a more
effective remedy and the Tunney Act, which--among other
things--requires Microsoft to divulge all of its dealings with
the Administration and Congress in conjunction with the antitrust
trial.
A. Campaign Contributions
17. In 1995, before the United States Department of Justice and
state Attorneys General from 19 states and the District of Columbia
brought an antitrust case against it, Microsoft had virtually no
presence in Washington, DC The company had only one lobbyist working
out of a Chevy Chase, Maryland sales office and had contributed less
than $50,000 in the previous election cycle.\4\ Its lobbyist, Jack
Krumholtz, had no secretary and its PAC was financed by only
$16,000. In those days, the Microsoft lobbying operation was
affectionately referred to in press reports as "Jack and his
Jeep."
---------------------------------------------------------------------------
\4\ "The Microsoft Playbook" Common Cause
---------------------------------------------------------------------------
18. However, since the beginning of the antitrust case against
Microsoft, the company has become a major political contributor and
was the fifth largest during the 2000 election cycle,\5\ alongside
the giants of the tobacco, telecommunications, pharmaceuticals and
insurance industries. Microsoft's political contributions to elected
leaders in a position to help the software giant in this election
cycle when the trial was at its peak, was greater than all previous,
cumulative campaign contributions. In the history of American PACs,
only three companies that have raised at least $50K in one election
cycle have increased receipts by 500% in the next. In 1984-86,
Drexel Burnham Lambert, the corrupt and now-defunct securities
brokerage, increased its receipts from just under $67,000 to more
than $446,000, a 567% jump. In that same cycle, AT&T, facing
antitrust divestiture, increased its PAC receipts by 745%, from
$215,000 to $1.8 million.
---------------------------------------------------------------------------
\5\ San Francisco Chronicle, July 1,2001, Wildermuth
---------------------------------------------------------------------------
In the history of corporate PACs, only 68 have increased their
spending by half in one election cycle after reaching a level of a
quarter of a million dollars. Only 15 have doubled their spending in
one election cycle after reaching that level. Only
one--Microsoft--has approached tripling its spending after
reaching that threshold. Microsoft increased its spending almost
fivefold, from $267,000 to more than $1.2 million, between the
1997-98 and 1999-2000 election cycles. (Table 5.)
20. Every year, Microsoft tops itself. The company's political
giving in the 2000 cycle--the time leading up to its day of
judgment in federal court--was again more than it contributed
in all previous cycles combined. Campaign money to candidates and
political parties in just one state was greater than Microsoft's
contributions from 1990 through 1996 to every state and federal
candidate combined. (Note that the government first levied antitrust
charges against Microsoft in 1995.)
Except for Microsoft, no corporate PAC sponsor in American
history has increased its PAC receipts by an order of magnitude,
starting from a base of $50,000 or more. Since 1986, the only such
firm that has increased its PAC receipts by as much as 500% in one
election cycle is Microsoft. Receipts for Microsoft's PAC rose a
record-setting 903%, from $59,790 in 1995-96 to just under
$600,000 in 1997-98. (Table 1.)
Microsoft followed this by another jump of 165% in
1999-2000, to $1.59 million. (Table 2.) In the history of
corporate PACs, only 15 have had as much as a 300% rise in receipts
after achieving a base of $50,000. (That requires rising from at
least $50,000 to at least $200,000.) None has ever followed such a
rise with another three-digit percentage increase in receipts,
except Microsoft. (That would require a subsequent rise to at least
$400,000.)
21. Between 1995 and 2000, Microsoft donated more than $3.5
million to federal candidates and to the national parties, about
two-thirds of which was contributed during the 2000 election cycle
alone.\6\ Including company and employee donations to political
parties, candidates and PACs in the 2000 election cycle, Microsoft's
giving (that of the company, its PAC and its employees) amounted to
more than $6.1 million, far more than has been previously
reported.\7\ Nearly $1 million came in the 40 days immediately
before the November 7th election. As most political operatives know,
these late contributions often are made by donors who don't want
their participation known until after the election, when financial
reports for the final days of a campaign are due, and public and
news media attention are no longer focused upon the election. The
effect of delaying contributions until very near the election is to
thwart efforts by the news media and the political opposition to
make disclosures meaningful to voters before they vote.
---------------------------------------------------------------------------
\6\ Common Cause
\7\ Independent analysis of giving to elective office
candidates and political parties and PACs federally and in all 50
states.
---------------------------------------------------------------------------
i. Federal Contributions
(a) "Soft" Money
22. Comprising the majority of Microsoft's campaign
contributions was soft money.\8\ Like their overall presence in
Washington, Microsoft's soft money donations grew substantially
since the beginning of the antitrust trial. In fact, in the seven
days preceding Judge Thomas Penfield Jackson's ruling against
Microsoft, the company donated more in soft money to the national
political parties than it gave to federal candidates and political
parties between 1989 and 1996.
---------------------------------------------------------------------------
\8\ "Soft" money is the term generally applied
to unregulated, unlimited corporate and individual contributions
that can not go to candidates but typically goes to political
parties in support of party "efforts."
---------------------------------------------------------------------------
23. During the 1999-2000 election cycle, Microsoft and its
executives accounted for some $2,298,551 in "soft money"
contributions, according to FEC records. For context, consider that
this was two-thirds more than the $1,546,055 in soft money
contributed by the now-bankrupt Enron and its executives during the
same period.
As one business commentator put it: "...there's something
quite disturbing about watching the world's richest man trying to
buy his way out of trouble with Uncle Sam... Gates's actions
undermine the legal system itself."\9\
---------------------------------------------------------------------------
\9\ BusinessWeek, April 24, 2000, France
---------------------------------------------------------------------------
(b) Political Action Committee (PAC) Money
24. Microsoft's PAC donations also grew substantially in the
years since the beginning of the antitrust trial. In 1998, the
company made a concerted effort to increase the size of its PAC.
Within a matter of days, the company grew its PAC from $31,000 to
$326,000.\10\ Employees contributed $1.6 million to Microsoft's PAC
for the 2000 election cycle which allowed the PAC to contribute more
than $1.2 million.
---------------------------------------------------------------------------
\10\ ibid.
---------------------------------------------------------------------------
The PAC began the 2002 election cycle with an impressive
$772,000 cash-on-hand--more than any other American corporate
PAC. Microsoft's unprecedented rise as a political player took its
PAC from just under $60,000 in 199596 receipts to just under $1.6
million in 1999-2000. In the history of corporate PACs, only
two have had a rise of more than 1,000% in receipts over four years
(two election cycles), after attaining $50,000. Only one, Microsoft,
has had an increase of more than 2,000%. From 1995-96 through
1999-2000, Microsoft's PAC increased in size by more than
2,500%. (Table 4.)
(c) Party Breakdown
25. While Microsoft has donated to both national political
parties, the company has tended to favor Republicans, who have been
more vocal in their defense of the company. Between 1995 and 1998,
72% of Microsoft's contributions went to Republicans, while the GOP
received only 55% of the company's donations during the 2000
election cycle.\11\ Republicans received a total of $3.2 million,
about half of which--$1.69 million--went to the national
Republican Party.
---------------------------------------------------------------------------
\11\ ibid.
---------------------------------------------------------------------------
26. Yet, when analyzing Microsoft's campaign contributions by
donating entity, some stark disparities emerge. Virtually all of the
money donated by individual Microsoft employees ($222,750) benefited
Democratic 527s, groups that raise and spend money independent of
political campaigns During this same period Microsoft employees gave
$15,000 to Republican affiliated 527s. Democratic PACs also
benefited from Microsoft's employees largesse, receiving $222,100
compared to just $42,875 for Republican PACs.
27. But Republicans enjoyed an edge in every other category; the
majority of
[[Page 29059]]
donations to leadership PACs, state parties and candidates went to
the Republican Party. The following table illustrates the disparity.
------------------------------------------------------------------------
Republican Democrat
------------------------------------------------------------------------
Leadership PACs............................... $162,000 $41,500
State Parties................................. $255,025 $38,887
Candidates.................................... $1,053,792 $818,951
------------------------------------------------------------------------
(ii) State Contributions
28. Along with the Department of Justice, 19 states and the
District of Columbia initially prosecuted Microsoft. Naturally,
then, Microsoft concentrated a good deal of its campaign
contributions on state races.
29. Candidates and political parties in all 50 states received
contributions from Microsoft, but none more so than the company's
home state of Washington, which received $830,478. Republicans
received $359,000 while $458,000 went to Democrats. Nearly all of
the $100,000 edge for the Democrats came from contributions to the
State Democratic Party, which totaled $85,387.
30. One of the original states participating in the suit was
South Carolina, whose attorney general, Charles Condon, was facing
re-election in 1998. Shortly before the election, Microsoft
contributed $25,000 to the South Carolina Republican Party.
According to the Chairman of the South Carolina Republican Party
this was the largest unsolicited donation ever received. Three weeks
after he won,
Attorney General Condon withdrew from the antitrust case. Two
years ago, Condon solicited and received a $3,500 donation from
Microsoft.\12\
---------------------------------------------------------------------------
\12\ USA Today, 5-30-00, Ullman, Drinkard
---------------------------------------------------------------------------
31. In California, a state represented by Attorney General Bill
Lockyer, Microsoft contributed $25,000 to the 1998 election campaign
for challenger Dave Stirling, a Republican; a contribution made nine
days before election day. The company contributed an additional
$10,000 to gubernatorial democratic candidate Gray Davis, whose
opponent was among the original 19 state attorneys general to bring
the antitrust suit against Microsoft.
32. Within weeks of the 2000 election, Microsoft CEO Steve
Ballmer made late contributions of $50,000 each to two state
Republican Parties, Michigan and Washington, where Microsoft found
its defenders under fire. Then U.S. Senator Spencer Abraham, a
Michigan Republican who is now Secretary of Energy, had been an
outspoken supporter of Microsoft. Former U.S. Senator Slade Gorton,
a Washington state Republican, who proudly called himself "the
Senator from Microsoft" had even sought to cut the funding of
the Justice Department's Antitrust Division while the court case was
ongoing.
33. Microsoft used back channels to direct even more undisclosed
soft money into the 2000 Michigan Senate race. According to The Wall
Street Journal, Microsoft "funneled" soft money into the
race by secretly making undisclosed contributions to the Michigan
Chamber of Commerce to fund negative ads aimed at Abraham's
opponent, now U.S. Senator Deborah Stabenow. Some close to the
Chamber have estimated that the contributions, while legal and not
requiring reporting, may have amounted to more than $250,000.\13\
Such contributions are usually made to organizations to support the
organization's activities, not political ads--which is why
there is no disclosure requirement. Microsoft knew this and took
advantage of the loophole in Michigan. Political operatives
throughout the country reported similar occurrences in other
political races considered "top targets" by both
national parties, but efforts to gain access to contributor lists
from some of the "independent" groups believed to be
accepting the contributions have unsuccessful.
---------------------------------------------------------------------------
\13\ Wall Street Journal, Oct. 16, 2000, Wilke
---------------------------------------------------------------------------
34. Significant contributions were also made in Missouri by
Microsoft to help re-elect Senator John Ashcroft, the current U.S.
Attorney General. Missouri was another state where independent
groups without significant resources of their own suddenly were
flush with money to run ads defending Ashcroft and attacking his
opponent. Ashcroft, whose campaign benefited greatly from
Microsoft's disclosed campaign contributions--$19,000 in
reported donations--lost his election bid. He now runs the
federal executive department responsible for proposing the
settlement offer, and his office is now staffed with political
operatives who played a role in raising the $19,000 from Microsoft,
coordinating his campaign efforts with those of Microsoft in
Missouri, and in one case, directing the entire Republican National
Committee fundraising and political campaign operation in the 2000
election cycle.
35. Deborah Senn, the Democratic primary opponent of Washington
State Senator Cantwell, received $15,000 more from Microsoft than
did Cantwell who received $30,150. This total, however, dwarfs the
money poured into now-former Senator Gorton's
campaign--$131,160. Only Democratic Congressman Jay Inslee's
total of $126,850 comes close to that of former Senator Gorton.
Congressman Inslee represents Microsoft's home district, and defends
the company vigorously in Washington, DC
36. In addition to those in Washington State, candidates or
parties in three other states received contributions totaling six
figures. California was second at $174,900 with virtually the entire
amount going to Leadership PACs--Members" PACs that
contribute money to other allied candidates--and directly to
Members of Congress. Texas was third at $107,250 although this
amount does not include contributions to the Bush/Cheney campaign.
This was an unusually large amount for the state when compared to
previous giving patterns.
37. While Microsoft contributed $100,000 to the Bush/Cheney
Inaugural Committee in January 2001, virtually all contributions to
presidential campaigns were made prior to July 3 1st, with the
exception of contributions to Libertarian Party candidate Harry
Browne's campaign. (This is presumably because, to be eligible for
federal matching funds for the primaries and federal funding for the
general election, major party candidates receiving are not allowed
to solicit or receive campaign contributions after they are
nominated at their conventions.) Only four primary presidential
candidates received contributions greater than $10,000: Bill
Bradley, $33,400; George Bush, $57,300; A1 Gore, $28,000, John
McCain $39,448.
Table 1. Candidates & Organizations Receiving $10,000 or
more from Microsoft
Following is a breakdown of Microsoft's contributions of more
than $10,000 to candidates and organizations during the 2000
election cycle.
Abraham for Senate $24,650.00
Kerrey for US Senate $10,000.00
Adam Smith for Congress $31,750.00
Leadership PAC 2000 (Oxley) $10,000.00
American Success PAC (Drier) $11,750.00
Majority Leader's Fund (Armey) $11,000.00
Ashcroft (combined) $19,250.00
McCain 2000 $39,448.00
Bill Bradley for President $33,400.00
Mcntosh for Governor $25,000.00
Brian Baird for Congress $38,400.00
Michigan Republican State Cite. $50,000.00
Bush for President $57,300.00
Montana Republican State Ctte. $10,000.00
Bush/Cheney Inaugural $100,000.00
NDN $38,750.00
California FriendsLatino PAC $10,000.00
New Majority Project $15,000.00
California Women Vote $10,000.00
New York Senate 2000 $40,000.00
Cantwell 2000 $30,150.00
NW Leadership PAC (Gorton) $17,000.00
Citizens for Rick Larsen $35,600.00
Republican Party $1,691,090.50
DASHPAC $10,000.00
Republican Campaign Committee of New Mexico $33,492.48
Democratic Party $1,300,892.00
Republican Majority Fund Don Nickles) $15,000.00
Democratic Party of Georgia $20,000.00
Republican Party of Virginia $12,000.00
Dooley for Congress $10,500.00
Republican Senate Council $15,000.00
EMILY's List $176,600.00
Santorum 2000 $11,000.00
Ensign for Senate $10,000.00
Senn 2000 $45,651.00
Feinstein 2000 $12,000.00
Snowe for Senate $10,000.00
Friends for Slade Gorton $131,160.00
TechNet $10,000.00
Friends of Conrad Bums $15,250.00
Utah Republican Party $29,383.00
Friends of Heidi $16,300.00
Washington State Democratic Central Committee $30,387.00
Friends of Jennifer Dunn $14,700.00
Washington State Republican Party $104,150.00
Gore for President $28,000.00
Washington Victory Committee 1999 $35,500.00
Inslee for Congress $126,850.00
Washington Victory Fund $55,000.00
[[Page 29060]]
Jim Davis for Congress $17,250.00
Washington Women Vote $11,000.00
Jon Kyl for Senate $11,000.00
Western Republican PAC $10,000.00
Kennedy for Senate $12,000.00
Women Vote 2000 $100,000.00
B. "Strategic" Philanthropy
38. Microsoft has also contributed money to the causes of
politicians as yet another method to use donations, political in
nature, to garner support and ultimately influence the outcome of
the trial.
39. According to USA Today, Microsoft and the philanthropic arm
of its founder and chairman, the Bill and Melinda Gates Foundation,
"donate millions of dollars to causes and projects that are
dear to the hearts of government policymakers, such as a $50,000
gift to the Congressional Black Caucus Foundation.\14\ Shortly after
the donation to the CBC, according to Business Week, Microsoft
gained an unlikely ally in the Caucus chairman, Representative James
E. Clyburn (DSC), "who represents one of the least technology-
rich districts in the country."\15\ In addition, a timely $10
million gift to the U.S. Capitol Visitor's Center further endeared
Microsoft to many Members of Congress.
---------------------------------------------------------------------------
\14\ USA Today, May 30, 2000, Drinkard, Ullman
\15\ BusinessWeek, May 15, 2000, Carney, Borrus, Greene
---------------------------------------------------------------------------
40. Yet the strategic philanthropy began long before the 2000
election cycle. According to the Gates Foundation web site, there
was a three-year hiatus in philanthropic giving between 1995 and
1998. Curiously, the last donation in 1995 occurred just prior to
the signing of the 1995 consent decree and the first donation in
1998 occurred the day prior to the Department of Justice filing its
antitrust suit against Microsoft.
c. Lobbying
41. In addition to the millions Microsoft spent on campaign
contributions, the company spent millions more lobbying Congress,
the Administration and state officials to influence the outcome of
the antitrust trial. Much like its campaign contributions, the
company's lobbying presence in Washington has grown significantly in
the last few years, its growth accelerating rapidly at the outset of
the antitrust trial. Once just Jack Krumholtz, the company's
lobbying group now employs 40 people in Redmond and Washington. The
company has hired a dozen lobbying firms and counts among its
consultants and lobbyists some of the most prominent figures in
politics. A company with 30,000 employees, Microsoft has more
lobbyists on retainer than the handful of U.S. companies with more
than 300,000 employees. According to USA Today, "in 1996, the
company spent $1.2 million on its Washington lobbying operations.
[In 1999], that figure topped $4.6 million." According to
Business Week in reference to the company's political spending,
"These days, Microsoft money flows like champagne at a
wedding." \16\ Some of the biggest names in Washington
going back 30 years represent Microsoft--many are former bosses
of the people they lobby. There are more than a half-dozen former
Members of Congress, four former White House Chief Counsels,
countless dozens of former senior aides from the Congress, Justice
Department and elsewhere throughout the highest levels of
government.
---------------------------------------------------------------------------
\16\ ibid.
---------------------------------------------------------------------------
i. Lobbying the Administration
42. Since the inauguration of George W. Bush in January 2001,
Microsoft has made a concerted effort to strengthen its ties to the
Administration. The Administration's decision to agree to a
settlement widely accepted to be ineffective calls into question the
nature of such ties.
43. Prior to the announcement of the settlement, for example, it
has been reported there was an inappropriate, if not illegal,
discussion between a senior aide to Attorney General John Ashcroft
and a lobbyist for AOL-Time Warner.
44. According to the account in the New York Times, the senior
aide to General Ashcroft is David Israelite. Israelite was the
political director of the Republican National Committee which
received more than a million dollars from Microsoft during the 2000
presidential campaign. In that role, Mr. Israelite directed
fundraising operations and coordinated campaign activities between
entities like Microsoft and the national party apparatus. Now
General Ashcroft's deputy chief of staff in the Office of the
Attorney General, Mr. Israelite recused himself from the case as a
result of his ownership of 100 shares of Microsoft stock.
45. The Times wrote, "According to the notes of a person
briefed about the conversation on Oct. 9, the day it is said to have
occurred, Mr. Israelite called [AOL lobbyist] Mr. [Wayne] Berman.
"Are you guys behind this business of the states hiring their
own lawyers in the Microsoft case?" Mr. Israelite asked Mr.
Berman in the predawn conversation, according to the notes.
'Tell your clients we wouldn't be too happy about
that."
46. Israelite allegedly said on that call that the Supreme Court
was soon to deny Microsoft's appeal, which would prompt the
Department of Justice to seek a settlement. He was reported to have
complained that AOL was "radicalizing" the states.\7\
While the conversation was confirmed, the participants denied the
content of the conversation. Still, it was enough to provoke angry
responses from the technology industry and an accusation of
"inappropriate and possibly illegal" conduct from a key
House Democrat, Congressman John Conyers, Ranking Democratic Member
of the House Judiciary Committee. In a letter to Attorney General
Ashcroft, Rep. Conyers asked for more information about Israelite's
alleged contacts with Berman, specifically asking for a list of
contacts between Israelite and AOL officials. "If the
allegations reported by the media are true, such active involvement
by a recused public official could violate federal conflict of
interest laws," Conyers wrote.\18\
---------------------------------------------------------------------------
\17\ New York Times, Nov. 2, 2001
\18\ The Kansas City Star, Nov. 8, 2000, Kraske
---------------------------------------------------------------------------
ii. Lobbying on the Campaign Trail
47. Mirroring its political giving strategy, Microsoft's
lobbying strategy has focused mainly on Republicans, while hedging
its bets and simultaneously courting Democrats to a slightly lesser
extent.
48. During the campaign, Microsoft Chairman Bill Gates was asked
if a Republican administration would be a positive development for
the company. It would "help," he said \19\ After
all, before Judge Jackson ruled against Microsoft, then Governor
Bush was quoted as saying that he stood "on the side of
innovation, not litigation."
---------------------------------------------------------------------------
\19\ Common Cause, "The Microsoft Playbook"
---------------------------------------------------------------------------
49. In fact, according to Newsweek Magazine, Bill Gates's visit
to then Governor Bush in Austin was "part of a delicate
political dance between the software giant and the Republican Party
.... Dollar signs in their eyes, GOP leaders covet big political
contributions from Microsoft's coffers. In turn, Microsoft
executives, plagued by the Clinton Justice Department's lawsuit,
hope that a Republican president and Congress might shut down the
efforts to punish the company."
50. A number of other Microsoft executives, lobbyists and other
paid counsel lead back to the Bush camp. The company's Chief
Operating Officer, Steve Ballmer, served then Governor Bush as a
technology adviser. Tony Feather, former Bush political director, is
a partner with a Republican consulting firm Microsoft hired to
manage grassroots lobbying efforts. And Microsoft has paid lobbyist
and former head of the Republican Party Haley Barbour hundreds of
thousands of dollars to assist the company in Washington. The
company has also hired Vin Weber, a former Republican Congressman,
and Michael Deaver, the former White House chief of staff and
trusted adviser credited with crafting President Ronald Reagan's
image and campaign advertisements in the 1980s.
51. In addition, Microsoft retained the services of Ralph Reed's
Century Strategies "for the stated purpose of improving the
company's public image." \20\ Reed's firm--a paid
consultant to the Bush campaign--aimed itself at mobilizing
Bush supporters to express to the candidate their dissatisfaction
with the antitrust trial. Once it was reported in the New York
Times, the firm issued an apology. The Wall Street Journal later
reported more on Ralph Reed's lobbying efforts on Microsoft's
behalf:
---------------------------------------------------------------------------
\20\ ibid.
---------------------------------------------------------------------------
"BOUNTY PAYMENTS are offered for pro- Microsoft letters
and calls.
Republican Ralph Reed's lobbying firm coordinates a network of
public-relations and lobbying partners that generates grass-roots
comments for cash. Payments are for letters, calls and visits to
lawmakers and policy makers. An e-mail offers sample letters
opposing a Microsoft breakup. A letter to a member of Congress from
a mayor or local Republican Party official is worth $200, the
guidelines say. A "premier" letter or visit by a fund-
raiser known to the lawmaker or a family member can be worth up to
$450 apiece. An op-ed piece in local papers fetches
$500." \21\
---------------------------------------------------------------------------
\21\ WSJ, Oct. 20, 2000
---------------------------------------------------------------------------
52. Microsoft was lobbying the Democratic side as well. Like its
team of Republican all-
[[Page 29061]]
stars, Microsoft's team of Democrats had very close ties to its
party as well. The team included "super lobbyist" Tommy
Boggs, a top Washington insider with deep Democratic ties, Tom
Downey, a former Democratic Congressman with close ties to former
Vice President A1 Gore, and Craig Smith, former campaign manager for
Gore and board member of the Microsoft front group, Americans for
Technology Leadership. As a board member of the ATL, Smith wrote to
the Democratic National Committee urging his fellow party members to
abandon support for the antitrust case, citing that support
"would make us vulnerable to attack in the general
election." \22\
---------------------------------------------------------------------------
\22\ Common Cause, "The Microsoft Playbook"
---------------------------------------------------------------------------
53. The company also hired Ginny Terzano, former Gore press
secretary, and tobacco industry ad man Carter Eskew, a former Gore
adviser-cum-Microsoft image consultant who helped craft the
company's 1999 advertising campaign aimed at bolstering its
reputation as a "good corporate citizen." Also retained
by Microsoft was super-lobbyist Jack Quinn, former Chief of Staff to
Vice President A1 Gore and White House Counsel.
iii. Lobbying Capitol Hill
54. But Microsoft did not focus solely on lobbying those who
would soon be in control of the Department of Justice. Microsoft
also waged a massive lobbying campaign aimed at Congress.
55. Alongside its Administration-oriented team, Microsoft
recruited more lobbyists and consultants with ties to Members of
Congress on both sides of the aisle. Republican hires included
Allison McSlarrow, former deputy chief of staff to Senate Majority
Leader Trent Lott, Ed Kutler, former assistant to then Speaker of
the House Newt Gingrich, Mitch Bainwol, former chief of staff to the
Senate Republican Caucus and the Republcian National Committee,
Kerry Knott, former chief of staff to House Majority Leader Richard
Armey, Ed Gillespie, former Armey and Republican National Committee
communications director, and Mimi Simoneaux, former legislative
director to House Commerce Committee Chairman Billy Tauzin, who was
then-chairman of the House subcommittee with jurisdiction over the
technology industry.
56. Among the Democrats lobbying on behalf of Microsoft were
Jamie Houton, former associate director of the Senate Democratic
Steering Committee, former Democratic Representative Vic Fazio, the
third-highest ranking House Democrat, and his former top staffer Tom
Jurkovich.
57. Despite Microsoft's assertion in its mere three-page Tunney
Act disclosure filing, the company has incessantly used its
tremendous resources to contact and influence Members of Congress.
Over the course of a 16-month period beginning in 1999, Microsoft
flew at least 130 Members of Congress or their staff to the
company's headquarters in Redmond, Washington to lobby on a number
of issues, including the antitrust case.
58. Perhaps the most egregious example of its heavy-handed
largesse came in late 1999, when Microsoft lobbied Congress to cut
$9 million from the budget for the Department of Justice's Antitrust
Division, the very body that was leading the prosecution against
Microsoft. Pilloried industries like the gun and tobacco had
considered and rejected the strategy as overly bold.
59. According to the Washington Post, "Nonprofit
organizations that receive financial support from [Microsoft] have
also urged key congressional appropriators to limit spending for the
division .... The non profits made their request in a letter last
month after an all-expenses-paid trip to Microsoft headquarters in
Redmond, Washington, where they were entertained and briefed on an
array of issues facing the company." Further discussion
follows in the next section entitled "Front Groups."
60. After the previously secret letters from these non-profit
groups were exposed, news of the attempts received widespread
bipartisan criticism from media and politicians alike. House
Judiciary Committee Chairman Henry Hyde (R-IL), called the
division "one of the best-run departments in the
government." Senator Herb Kohl, a Democrat on the Senate
Judiciary Committee's antitrust subcommittee, said "it would
set [a] terrible precedent to alter the division's budget based on
one case alone." \23\ "It's like the Mafia trying
to defund the FBI," said a prominent member of the Washington
antitrust bar? According to Jan McDavid, a lawyer with the
Washington firm of Hogan & Hartson and chairperson of the
American Bar Association antitrust section, the section's policy
states that it "opposes the use of the congressional budget
and appropriations process to intervene in or influence ongoing
antitrust enforcement matters." \24\One congressional
GOP staffer went as far as to say that Microsoft's lobbying had
"the odor of obstruction." \25\
---------------------------------------------------------------------------
\23\ Reuters, Oct. 17, 1999, Lawsky
\24\ ibid.
\25\ WSJ, Oct. 15, 1999
---------------------------------------------------------------------------
61. Not surprisingly, Senator Slade Gorton, a Republican from
Microsoft's home state of Washington, was adamantly supportive of
the idea. Between 1997 and 1999, he received more than $50,000 from
Microsoft and its employees. During the 2000 election cycle,
Gorton's PAC received $17,000 while the Washington State Republican
Party received more than $100,000. iv. Lobbying the States
62. Because 19 state attorneys general initiated the antitrust
case alongside the Department of Justice, Microsoft initiated a
state lobbying campaign aimed at influencing those attorneys general
to back away from the case. Microsoft even hired former Iowa House
Speaker Donald Avenson to lobby the state's Attorney General, who
was leading the group of states prosecuting the company. While
Microsoft has retained professional "grassroots
consultants" and others in many states, according to published
reports, it is their efforts in the 19 states with Attorneys General
who brought suit against them where the real pressure has occurred.
In those states they have retained former lawmakers, law partners of
the Attorneys General, their predecessors in that same office,
business associates, and their own trusted political consultants.
Microsoft has also hired those on whom the AGs are often most
politically dependent, such as union leaders and activists in states
with Democratic Attorneys General, and fiscally conservative
activists in state with Republican AGs.
63. Perhaps the company's most successful effort to influence
the state attorneys general came in 1998, when, three days after a
$25,000 contribution to the South Carolina Republican Party, the
state's Attorney General, Charles Condon, announced that he would
withdraw from the case.
64. Yet, a few of its grassroots efforts targeted at the states
have done more harm than good. Because of the unprecedented size,
scope and cost of Microsoft's campaign, a number of high profile
gaffes have exhibited the true nature of Microsoft's "public
support" and the depths to which the company will go to
influence the outcome of the trial.
65. In August 2001, the Los Angeles Times reported that two
letters received by the Utah Attorney General's office, one of the
prosecuting states, were sent by dead men. The campaign was funded
by Craig Smith's Americans for Technology Leadership. Despite its
claims to represent "thousands of small and mid-sized
technology companies," news reports have repeatedly
characterized ATL and its counterpart, the Association for
Competitive Technology (ACT) as essentially wholly-owned
subsidiaries of Microsoft Corp., whose funding launched and sustains
both groups.\26\ Other characteristics of the letter writing
campaign to the Attorneys General included similar phrases popping
up again and again, invalid return addresses, and even masses of
identical letters with different signatories.
---------------------------------------------------------------------------
\26\ "Microsoft's All-Out Counterattack." Dan
Carney, with Amy Borrus. BusinessWeek May 15, 2000;
"Microsoft's Lobbying Largess Pays Off; Back-Channel Effort
Wins Support for Case." James V. Grimaldi. Washington Post May
17, 2000; "Microsoft leans creatively on levers of political
power as breakup decision looms, 'stealth" lobbying
efforts aim for survival." Jim Drinkard and Owen Ullmann. USA
Today May 30, 2000
---------------------------------------------------------------------------
66. In one news story, Jim Prendergast, director of ATL,
initially admitted only to providing letter writers with
"message points." "We gave them a few bullet
points, but that's about the extent of it," he said.
When asked why identical phrases were popping up again and again, he
confessed that sometimes ATL did indeed provide whole letters for
the citizens to sign and send. "We'd write the letter and then
send it to them," he admitted.
67. According to the same article, other states, like Minnesota
and Iowa, were subjected to Microsoft's full-press grassroots
lobbying campaign. Both states are participants in the antitrust
case. In the case of Iowa, Attorney General Tom Miller received more
than 50 letters in a month's time calling on him to drop the case.
While none of the letters were identical, several phrases were
similar. In four of the letters, for example, the following sentence
appeared: "Strong competition and innovation have been the
twin hallmarks of the technology industry." Three others
contained this sentence: "If the future is going to be as
[[Page 29062]]
successful as the recent past, the technology sector must remain
free from excess regulation." \27\
---------------------------------------------------------------------------
\27\ Los Angeles Times, August 23, 2001
---------------------------------------------------------------------------
68. Minnesota Attorney General Michael Hatch, who received 300
identical letters, characterized the campaign as
"sleazy." Many of the letter writers were misled by
Microsoft and one even wrote by hand to Attorney General Hatch to
say so and to apologize for his previous letter. "I sure was
misled," he wrote. "It's time for you to get out there
and kick butt." \28\
---------------------------------------------------------------------------
\28\ Los Angeles Times, August 23, 2001
---------------------------------------------------------------------------
vi. Tying Up the Lobbyists and Lawyers
69. A frequently employed tactic of Microsoft is to retain all
major lobbying firms in key states so that its opposition cannot.
Similarly, the company has hired many Washington, DC-based law firms
with antitrust expertise to work on issues not related to the
antitrust case. "They've got the whole town conflicted
out," said one attorney. "They've sucked out all the
oxygen." \29\
---------------------------------------------------------------------------
\29\ Business Week, May 15, 2000, Borrus, Carney, Greene
---------------------------------------------------------------------------
D. Front Groups
70. Supporting its political contributions and lobbying
campaign, Microsoft undertook an aggressive public relations
campaign aimed at "creating the appearance of a groundswell of
public support for the company." \30\
---------------------------------------------------------------------------
\30\ "Trust Us, We're Experts" Sheldon Rampton
and John Stauber, p. 8
---------------------------------------------------------------------------
71. In April 1998, a reporter for the Los Angeles Times received
a package of confidential materials created by Edelman Public
Relations for its client, Microsoft. Among the documents was a media
relations strategy for a "multi-million dollar" campaign
aimed at stemming the rash of antitrust investigations being
undertaken by a number of states in conjunction with the federal
government's investigation. According to the reporters, Greg Miller
and Leslie Helm, "the elaborate plan ... hinges on a number of
unusual--and some say unethical--tactics, including the
planting of articles, letters to the editor and opinion pieces to be
commissioned by Microsoft's top media handlers but presented by
local firms as spontaneous testimonials." \31\ While
Microsoft contends that this strategy was never implemented, a
number of the company's activities since the outset of the trial
clearly indicate that most of the elements have been employed, at
times repeatedly.
---------------------------------------------------------------------------
\31\ 31 ibid.
---------------------------------------------------------------------------
72. Throughout the antitrust trial, Microsoft relied heavily on
many "independent" groups to support the company and to
oppose the suit publicly. Some groups they created themselves out of
whole cloth during the trial. Others sullied their long,
distinguished backgrounds by trading hard cash for the use of their
good names. Many denied any involvement with Microsoft, claiming
that their passion came from concern for the economy or
"innovation"--only to later be unmasked by the news
media when evidence of their financial dealings with Microsoft came
to light. One account suggests Microsoft has harnessed at least 15
advocacy groups and think tanks that use Microsoft donations to
spread the company's message through polls, news conferences, Web
sites, letters to the editor, research papers, opinion pieces and
letter-writing campaigns aimed at lawmakers. \32\
---------------------------------------------------------------------------
\32\ USA TODAY, "Microsoft leans creatively on
levers of political power as breakup decision looms,
'stealth" lobbying efforts aim for survival" by
Jim Drinkard and Owen Ullmann, May 30, 2000
---------------------------------------------------------------------------
73. Groups with names like Americans for Technology Leadership
and the Association for Competitive Technology had the veneer of
genuine independence, but were actually founded by Microsoft,
launched with Microsoft dollars, and work on few other issues than
the defense of Microsoft in its antitrust trial.
74. Even well known Washington, DC organizations with strong
ties to the Administration and to Congress were well funded by
Microsoft--respected fiscally conservative groups like Grover
Norquist's Americans for Tax Reform, former White House
Counsel C. Boyden Grey's Citizens for a Sound Economy, the National
Taxpayers Union and Citizens Against Government Waste. But upon
closer scrutiny, the true ties of these groups to Microsoft became
apparent. By paying for pro-Microsoft advertisements, by sponsoring
publications, by donating money outright, Microsoft both ensured and
devalued their support.
75. According to Business Week, Microsoft "secretly funds
those that do its public-relations work and pulls funding from those
that dare question its positions." \33\ On one such
occasion, Microsoft pulled funding from the American Enterprise
Institute once one of its fellows, Robert Bork, came out in favor of
the antitrust trial even though the institute itself has no position
on the trial and many of its technical and antitrust experts have
expressed their opposition to the case. In another case, they quit a
technology industry trade group, the Software and Information
Industry Association, because a majority of its members supported
the antitrust case.
---------------------------------------------------------------------------
\33\ Business Week, May 15, 2000, Carney, Borrus, Greene
---------------------------------------------------------------------------
i. Independent Institute
76. In one instance, Microsoft paid for the placement of
newspaper advertisements by the California-based Independent
Institute. Published in June 1999 in the New York Times and the
Washington Post, the full-page ads featured a pro-Microsoft letter
signed by 240 academics. Nothing in the ad's copy indicated to
readers who--other than the Institute itself- was paying for
the ads. Apparently, no one at the Independent Institute indicated
to the letter's 240 signatories who was paying for the ad either.
One signatory, Professor Simon Hakim of Temple University, stated
that he would not have signed on to the advertisement had he known
who was behind it.\34\
---------------------------------------------------------------------------
\34\ I am aware there have been allegations that material
relating to the Independent Institute was uncovered by Investigative
Group International (IGI), allegedly retained by Oracle Corporation.
My understanding of the circumstances indicates that employees of
IGI's were terminated as a result of their actions. I have not
reviewed those allegations specifically, since the subject of my
review was defendant, Microsoft Corporation. Regardless, neither the
Independent Institute nor Microsoft ever denied the validity of the
claims after they were exposed.
---------------------------------------------------------------------------
77. At a Washington, DC press conference unveiling the ads,
Independent Institute president David Theroux answered a reporter's
specific question about whether Microsoft had anything to do with
the ads, including paying for them, with a resounding
"no." When questioned months later by the New York
Times, Theroux again denied that Microsoft paid for the ads. He
said, instead, that the ads "were paid for out of our general
funds." He also said the "implication that Microsoft had
any influence is ridiculous." \35\ But, according to a
front-page article later written in the New York Times, "among
the institute's internal documents is a bill from Mr. Theroux sent
to John A. C. Kelly of Microsoft for the full costs of the ads, plus
his travel expenses from San Francisco to Washington for the news
conference, totaling $153,868.67. Included was a $5,966 bill for
airline tickets for himself (Theroux) and a colleague.
Unfortunately, he wrote Mr. Kelly, 'the airlines were heavily
booked" and 'we had to fly first class to DC and
business class on the return."' Furthermore, despite
additional statements from its president that it "adheres to
the highest standards of independent scholarly inquiry,"
internal institute documents have shown that, having contributed
more than $200,000, or 20% of the institute's total outside
contributions, Microsoft "secretly served as the institute's
largest outside benefactor [in 1999]." \36\ It wasn't
until September that the institute finally admitted the extent of
Microsoft's support.
---------------------------------------------------------------------------
\35\ Associated Press, September 18, 1999
\36\ New York Times, Sept. 19, 1999
---------------------------------------------------------------------------
78. In these instances, as in others, Microsoft's behavior
outside the courtroom had a direct impact on the proceedings inside
the courtroom. According to the New York Times, the ads prompted not
only more news stories but also courtroom discussion.\37\ Microsoft
also covered the costs of the publication of the institute's book,
"Winners, Losers and Microsoft: Competition and Antitrust in
High Technology," which Microsoft's economic witness in the
trial then used to support his own testimony.
---------------------------------------------------------------------------
\37\ New York Times, Sept. 19, 1999
---------------------------------------------------------------------------
ii. Biased Polling
79. According to Business Week, Microsoft has also commissioned
polls to help foster an image of great public support for the
company. At the outset of the 2000 presidential campaign, around the
time of the Iowa caucus and the New Hampshire primary, Microsoft
funded polls aimed at demonstrating the public's opposition to the
antitrust case. Once the results were in, Microsoft distributed the
results to the media in order to compel the candidates to
incorporate their opposition to the case into their platform.
80. In addition, while the state Attorneys General were working
through the spring on formulating a remedy, Microsoft front group
Americans for Technology Leadership conducted and issued the results
of a poll, which concluded that the public wanted the
[[Page 29063]]
Attorneys General to focus their time and energy on other issues. In
this case, Microsoft failed to disclose the nature of its
relationship with ATL and the source of funding for the poll.
iii. Targeting the Antitrust Division of the Department of
Justice
81. As stated above, one of Microsoft's most egregious attempts
to use lobbying to influence the outcome of the antitrust trial came
when the company lobbied to cut funding for the Antitrust Division
of the Department of Justice. Microsoft funded a host of third
parties to push forth its agenda.
82. In September 1999, the company flew representatives from
about 15 major Washington, DC-based think tanks to Microsoft's
Redmond, Washington headquarters "for three days of briefings
that included tickets to a Seattle Mariners game and dinner and
entertainment at Seattle's Teatro ZinZani, according to an
itinerary." \38\ Among the groups were Citizens for a
Sound Economy, the National Taxpayers Union and Americans for Tax
Reform, whose president, Grover Norquist, received $40,000 in
lobbying payments from Microsoft during the second half of 1998.
---------------------------------------------------------------------------
\38\ The Washington Post, Oct. 15, 1999, Morgan, Eilperin
---------------------------------------------------------------------------
83. Two days after returning from the trip, those three groups
and three others secretly sent a letter to House appropriators
urging that the Antitrust Division receive the lowest amount of
funding proposed. In a coordinated effort, on the same day one of
Microsoft's own lobbyists, Kerry Knott, met with Rep. Dan Miller of
Florida to urge him to grant the Antitrust Division the lower amount
of funds. That meeting prompted Rep. Miller to write to the chairman
of the House Appropriations Commerce, Justice, State and Judiciary
Subcommittee that "it would be a devastating blow to the high-
tech industry and to our overall economy if the federal government
succeeds in its efforts to regulate this industry through
litigation." According to the Washington Post, "Miller
said that while he objects to the funding on fiscal grounds, he had
not focused on it until Knott and Citizens for a Sound Economy
spokeswoman Christin Tinsworth, a former Miller staffer, made their
pitch just off the House floor." \39\
---------------------------------------------------------------------------
\39\ ibid.
---------------------------------------------------------------------------
84. A Washington Post editorial summarized the propriety of the
incident this way: "[T]he fact that Microsoft has the right to
lobby ... doesn't make the lobbying any less unseemly. If Microsoft
has a gripe, it should make its complaint to the court hearing its
case." \40\
---------------------------------------------------------------------------
\40\ Washington Post, Oct. 24, 1999
---------------------------------------------------------------------------
III. CONCLUSIONS
85. The end result of Microsoft's unprecedented political
campaign seems to have been rewarded by the weak settlement
presented by the Department of Justice.
Respectfully Submitted,
Edward Roeder
January 28, 2002
APPENDIX A: Selected Tables
Table 1. Rapid Rises in Corporate PAC Fundraising,
1979-2002 (After Raising More than $50,000)
Microsoft Corporation Formed: 1987-88
Total Raised, 1995-96: $59,750
Total Raised, 1997-98: $599,568
Difference: $539,818 903 46% Rank: 1
American Telephone & Telegraph Co. Formed: 1983-84
Total Raised, 1983-84: $215,423
Total Raised, 1985-86: $1,820,621
Difference: $1,605,198 = 745 14% Rank: 2
Drexel Burnham Lambert Group, Inc. Formed: 1981-82
Total Raised, 1983-84: $66,844
Total Raised, 1985-86: $446,279
Difference: $379,435 = 567 64% Rank: 3
Safari Club International Formed: 1979-80
Total Raised, 1993=94: $94,149
Total Raised, 1995-96: $545,915
Difference: $451,766 = 479 84% Rank: 4
Fluor Corporation Formed: 1979-80
Total Raised, 1987-88: $87,236
Total Raised, 1989-90: $494,417
Difference: $407,181 = 466 76% Rank: 5
Dow Chemical, USA--HQ Formed: 1979-80
Total Raised, 1995-96: $60,290
Total Raised, 1997-98: $331,286
Difference: $270,996 = 449 49% Rank: 6
Lucent Technologies, Inc. Formed: 1995-96
Total Raised, 1995-96: $87,568
Total Raised, 1997-98: $464,592
Difference: $377,024 = 430 55% Rank: 7
Nat'l Star Route Mail Contractors Ass'n Formed: 1981-82
Total Raised, 1995-96: $63,512
Total Raised, 1983-84: $313,609
Difference: $250,097 = 393 78% Rank: 8
Eastern Airlines, Inc. Formed: 1979-80
Total Raised, 1985-86: $53,309
Total Raised, 1987-88: $243,529
Difference: $190,220 = 356 83% Rank: 9
Pacific Telesis Group Formed: 1979-80
Total Raised, 1981-82: $65,538
Total Raised, 1983-84: $280,183
Difference: $214,645 = 327 51% Rank: 10
Henley Group/Wheelabrator Technologies, Inc. Formed:
1979-80
Total Raised, 1985-86: $89,255
Total Raised, 1987-88: $380,102
Difference: $290,847 = 325 86% Rank: 11
Firstar (First Wisconsin) Corp. Formed: 1979-80
Total Raised, 1997-98: $113,743
Total Raised, 1999-00: $480,239
Difference: $366,496 = 322 21% Rank: 12
U.S. West, Inc. Formed: 1983-84
Total Raised, 1987-88: $123,767
Total Raised, 1989-90: $521,886
Difference: $398,119 = 321 67% Rank: 13
CSX Corp.--Jeffboat Formed: 1981-82
Total Raised, 1997-98: $74,125
Total Raised, 1999-00: $303,763
Difference: $229,638 = 309 80% Rank: 14
J. P. Morgan & Company, Inc. Formed: 1979-80
Total Raised, 1983-84: $68,569
Total Raised, 1985-86: $274,515
Difference: $205,946 = 300 35% Rank: 15
Source: Computer analysis by Sunshine Press Services of Federal
Election Commission data, Jan. 1, 1979 through Dec. 31, 2000.
Table 2. Continued Rises in Corporate PAC Fundraising,
1979-2002 Following Rapid Rise of
More than 300% from a base of $50,000+(Ranked by Percentage Rise
in Next Election Cycle)
Microsoft Corporation Formed: 1987-88
Total Raised, 1995-96: $59,750
Total Raised, 1997-98: $599,568
Difference: $539,818 = 903.46%
Next Cycle: 1999-88
Total Raised: $1,589,684
Difference: $990,116 = 165.14% Rank: 1
J. P. Morgan & Company, Inc. Formed: 1979-80
Total Raised, 1983-84: $68,569
Total Raised, 1985-86: $274,515
Difference: $205,946 = 300.35%
Next Cycle: 1987-88
Total Raised: $514,285
Difference: $239,770 = 87.34% Rank: 2
American Telephone & Telegraph Co. Formed: 1983-84
Total Raised, 1983-84: $215,423
Total Raised, 1985-86: $1,820,621
Difference: $1,605,198 = 745.14%
Next Cycle: 1987-88
Total Raised: $3,043,510
Difference: $1,222,889 = 67.17% Rank: 3
U.S. West, Inc. Formed: 1983-84
Total Raised, 1987-88: $123,767
Total Raised, 1989-90: $521,886
Difference: $398,119 = 321.67%
Next Cycle: 1991- 88
Total Raised: $734,130
Difference: $212,244 = 40.67% Rank: 4
Pacific Telesis Group Formed: 1979-80
Total Raised, 1981-82: $65,538
Total Raised, 1983-84: $280,183
Difference: $214,645 = 327.51%
Next Cycle: 1985-86
Total Raised: $364,113
Difference: $83,930 = 29.96% Rank: 5
Fluor Corporation Formed: 1979-80
Total Raised, 1987-88: $87,236
Total Raised, 1989-90: $494,417
Difference: $407,181 = 466.76%
Next Cycle: 1991-92
Total Raised: $610,142
Difference: $115,725 = 23.41% Rank: 6
Nat'l Star Route Mail Contractors Ass'n Formed: 1981-82
Total Raised, 1995-96: $63,512
Total Raised, 1983-84: $313,609
Difference: $250,097 = 393.78%
Next Cycle: 1985-86
Total Raised: $43,468
Difference: $2,269 = 5.51% Rank: 7
Firstar (First Wisconsin) Corp. Formed: 1979-80
Total Raised, 1997-98: $113,743
Total Raised, 1999-00: $480,239
Difference: $366,496 = 322.21%
Next Cycle: (data incomplete, cycle now in progress)
CSX Corp.--Jeffboat Formed: 1981-82
Total Raised, 1997-98: $74,125
Total Raised, 1999-00: $303,763
Difference: $229,638 = 309.80%
Next Cycle: (data incomplete, cycle now in progress)
Dow Chemical, USA--HQ Formed: 1979-80
Total Raised, 1995-96: $60,290
Total Raised, 1997-98: $331,286
Difference: $270,996 = 449.49%
Next Cycle: 1999-00
Total Raised: $279,618
Difference: $-51,668 = -15.60% Rank: 10
[[Page 29064]]
Lucent Technologies, Inc. Formed: 1995-96
Total Raised, 1995-96: $87,568
Total Raised, 1997-98: $464,592
Difference: $377,024 = 430.55%
Next Cycle: 1999-00
Total Raised: $343,462
Difference: $-121,130 = -26.07% Rank: 11
Drexel Burnham Lambert Group, Inc. Formed: 1981-82
Total Raised, 1983-84: $66,844
Total Raised, 1985-86: $446,279
Difference: $379,435 = 567.64%
Next Cycle: 1987-88
Total Raised: $310,188
Difference: $-136,091 = -30.49% Rank: 12
Safari Club International Formed: 1979-80
Total Raised, 1993=94: $94,149
Total Raised, 1995-96: $545,915
Difference: $451,766 = 479.84%
Next Cycle: 1997-98
Total Raised: $378,078
Difference: $-167,837 = -30.74% Rank: 13
Eastern Airlines, Inc. Formed: 1979-80
Total Raised, 1985-86: $53,309
Total Raised, 1987-88: $243,529
Difference: $190,220 = 356.83%
Next Cycle: 1989-90
Total Raised: $105,734
Difference: $-137,795 = -56.58% Rank: 14
Henley Group/Wheelabrator Technologies, Formed: 1979-80
Total Raised, 1985-86: $89,255
Total Raised, 1987-88: $380,102
Difference: $290,847 = 325.86%
Next Cycle: 1989-90
Total Raised: $141,072
Difference: $-239,030 = -62.89% Rank: 15
Source: Computer analysis by Sunshine Press Services of Federal
Election Commission data, Jan. 1, 1979 through Dec. 31, 2000.
Table 3. Largest Cash Balances at end of 1999-2000
Election Cycle American Corporate PACs
Rank PAC Sponsor Cash on Hand
1 Microsoft Corporation $712,874
2 Southern Bell Telephone & Telegraph Co. $617,922
3 Crawford Group / Enterprise Leasing $611,442
4 Southwestern Bell Corporation $550,841
5 Chrysler / Gulfstream Aerospace Corp. $481,068
6 Federal Express Corporation $424,739
7 NationsBank $413,663
8 First Union Corporation $410,242
9 First Bank System, Inc. $405,187
10 Stone Container Corporation $368,973
11 General Electric Company $359,469
12 National Health Corporation $340,205
13 Exxon Corporation $328,559
14 Outback Steakhouse, Inc. $325,977
15 Columbia / HCA Healthcare $284,827
16 American Family Corporation $283,963
17 Cooper Industries, Inc. $281,054
18 Suntrust Banks, Inc. $275,779
19 Winn-Dixie Stores, Inc. $273,232
20 Jacobs Engineering Group, Inc. $272,982
21 Ford Motor Company $264,914
22 U.S. West, Inc. $261,289
23 Compass Bancshares, Inc. $253,625
Source: Computer analysis by Sunshine Press Services of Federal
Election Commission data.
Table 4. Largest Percentage Increases in Receipts Over Two
Election Cycles American Corporate
PACs With More Than $50,000
Microsoft Corporation Formed:1987-88
Total Raised, 1995-96: $59,750
Total Raised, 1999-00: $1,589,684
Difference: $1,529,934 = 2,560 56% Rank: 1
American Telephone & Telegraph Co. Formed:1983-84
Total Raised, 1983-84: $215,423
Total Raised, 1987-88: $3,043,510
Difference: $2,828,087 = 1,312 81% Rank: 2
Firstar (First Wisconsin) Corp. Formed:1979-80
Total Raised, 1995-96: $59,437
Total Raised, 1999-00: $480,239
Difference: $420,802 = 707 98% Rank: 3
J. P. Morgan & Company, Inc. Formed:1979-80
Total Raised, 1983-84: $68,569
Total Raised, 1987-88: $514,285
Difference: $445,716 = 650 03% Rank: 4
U.S. West, Inc. Formed:1983-84
Total Raised, 1985-86: $69,588
Total Raised, 1989-90: $521,886
Difference: $452,298 = 649 97% Rank: 5
Bell Atlantic Corp. Formed:1983-84
Total Raised, 1993=94: $146,949
Total Raised, 1997-98: $1,046,617
Difference: $899,668 = 612 23% Rank: 6
Fluor Corporation Formed:1979-80
Total Raised, 1987-88: $87,236
Total Raised, 1991-92: $610,142
Difference: $522,906 = 599 42% Rank: 7
Dow Chemical, USA--HQ Formed:1979-80
Total Raised, 1993=94: $53,297
Total Raised, 1997-98: $331,286
Difference: $277,989 = 521 58% Rank: 8
GA Technologies, Inc. Formed:1987-88
Total Raised, 1987-88: $51,702
Total Raised, 1991-92: $320,081
Difference: $268,379 = 519 09% Rank: 9
U.S. West, Inc. Formed:1983-84
Total Raised, 1987-88: $123,767
Total Raised, 1991-92: $734,130
Difference: $610,363 = 493 15% Rank: 10
American Information Technologies Corp. Formed:1983-84
Total Raised, 1989-90: $233,266
Total Raised, 1993=94: $1,370,945
Difference: $1,137,679 = 487 72% Rank: 11
Allied-Signal, Inc. Formed:1979-80
Total Raised, 1981-82: $65,703
Total Raised, 1985-86: $384,530
Difference: $318,827 = 485 25% Rank: 12
Glaxo, Inc. Formed:1985-86
Total Raised, 1989-90: $106,192
Total Raised, 1993=94: $607,224
Difference: $501,032 = 471 82% Rank: 13
Nynex Corporation Formed:1983-84
Total Raised, 1991-92: $62,304
Total Raised, 1995-96: $346,809
Difference: $284,505 = 456 64% Rank: 14
Pacific Telesis Group Formed:1979-80
Total Raised, 1981-82: $65,538
Total Raised, 1985-86: $364,113
Difference: $298,575 = 455 58% Rank: 15
Philip Morris, Inc. Formed:1979-80
Total Raised, 1979-80: $93,291
Total Raised, 1983-84: $499,938
Difference: $406,647 = 435 89% Rank: 16
American Electric Power Company, Inc. Formed:1979-80
Total Raised, 1995-96: $106,155
Total Raised, 1999-00: $545,295
Difference: $439,140 = 413 68% Rank: 17
Waste Management, Inc. Formed:1979-80
Total Raised, 1981-82: $76,738
Total Raised, 1985-86: $391,637
Difference: $314,899 = 410 36% Rank: 18
Cigna Corporation Formed:1979-80
Total Raised, 1979-80: $56,174
Total Raised, 1985-86: $286,319
Difference: $230,145 = 409 70% Rank: 19
LDDS Communications, Inc. Formed:1987-88
Total Raised, 1993=94: $63,542
Total Raised, 1997-98: $323,680
Difference: $260,138 = 409 40% Rank: 20
Safari Club International Formed:1979-80
Total Raised, 1991-92: $107,314
Total Raised, 1995-96: $545,915
Difference: $438,601 = 408 71% Rank: 21
Michigan Bell Telephone Company Formed:1979-80
Total Raised, 1983-84: $53,326
Total Raised, 1987-88: $266,944
Difference: $213,618 = 400 59% Rank: 22
E1 Paso Company Formed:1979-80
Total Raised, 1995-96: $75,920
Total Raised, 1999-00: $379,370
Difference: $303,450 = 399 70% Rank: 23
Merrill Lynch & Company, Inc. Formed:1979-80
Total Raised, 1979-80: $56,895
Total Raised, 1983-84: $282,297
Difference: $225,402 = 396 17% Rank: 24
Federal Express Corporation Formed:1983-84
Total Raised, 1983-84: $230,478
Total Raised, 1987-88: $1,139,978
Difference: $909,500 = 394 61% Rank: 25
MBNA Corporation Formed:1991-92
Total Raised, 1991-92: $184,764
Total Raised, 1995-96: $903,599
Difference: $718,835 = 389 06% Rank: 26
MCI Telecommunications Corporation Formed:1983-84
Total Raised, 1993=94: $104,688
Total Raised, 1997-98: $510,195
Difference: $405,507 = 387 35% Rank: 27
Smith Barney & Company Formed:1979-80
Total Raised, 1995-96: $128,843
Total Raised, 1999-00: $627,332
Difference: $498,489 = 386 90% Rank: 28
Chrysler / Gulfstream Aerospace Corp. Formed:1979-80
Total Raised, 1981-82: $77,152
Total Raised, 1985-86: $373,792
Difference: $296,640 = 384 49% Rank: 29
American Information Technologies Corp. Formed:1983-84
Total Raised, 1987-88: $105,465
Total Raised, 1991-92: $501,210
Difference: $395,745 = 375 24% Rank: 30
Waste Management, Inc. Formed:1979-80
Total Raised, 1983-84: $138,076
Total Raised, 1987-88: $653,361
Difference: $515,285 = 373 19% Rank: 31
Texas Air Corp. Formed:1979-80
Total Raised, 1981-82: $53,560
Total Raised, 1985-86: $252,847
Difference: $199,287 = 372 08% Rank: 32
Federal Express Corporation Formed:1983-84
Total Raised, 1985-86: $334,334
Total Raised, 1989-90: $1,561,744
Difference: $1,227,410 = 367 12% Rank: 33
Drexel Burnham Lambert Group, Inc. Formed:1981-82
[[Page 29065]]
Total Raised, 1983-84: $66,844
Total Raised, 1987-88: $310,188
Difference: $243,344 = 364 05% Rank: 34
Dow Chemical, USA--HQ Formed:1979-80
Total Raised, 1995-96: $60,290
Total Raised, 1999-00: $279,618
Difference: $219,328 = 363 79% Rank: 35
General Telephone & Electronics Corp. Formed:1979-80
Total Raised, 1987-88: $169,871
Total Raised, 1991-92: $779,782
Difference: $609,911 = 359 04% Rank: 36
NationsBank Formed:1979-80
Total Raised, 1987-88: $238,405
Total Raised, 1991-92: $1,094,012
Difference: $855,607 = 358 89% Rank: 37
CSX Corp.--Jeffboat Formed:1981-82
Total Raised, 1995-96: $66,789
Total Raised, 1999-00: $303,763
Difference: $236,974 = 354 81% Rank: 38
Sears Roebuck & Co. (Allstate) Formed:1979-80
Total Raised, 1981-82: $50,277
Total Raised, 1985-86: $223,313
Difference: $173,036 = 344 17% Rank: 39
First Union Corporation Formed:1983-84
Total Raised, 1995-96: $119,980
Total Raised, 1999-00: $525,262
Difference: $405,282 = 337 79% Rank: 40
Brown & Williamson Tobacco Corp. Formed:1979-80
Total Raised, 1991-92: $117,271
Total Raised, 1995-96: $512,562
Difference: $395,291 = 337 07% Rank: 41
Coca-Cola Enterprises, Inc. Formed:1991-92
Total Raised, 1993=94: $54,312
Total Raised, 1997-98: $232,861
Difference: $178,549 = 328 75% Rank: 42
Mutual of Omaha Insurance Company Formed:1979-80
Total Raised, 1989-90: $74,612
Total Raised, 1993=94: $319,846
Difference: $245,234 = 328 68% Rank: 43
Chase Manhattan Bank Formed:1979-80
Total Raised, 1983-84: $64,813
Total Raised, 1987-88: $274,828
Difference: $210,015 = 324 03% Rank: 44
Raytheon Company Formed:1979-80
Total Raised, 1979-80: $54,158
Total Raised, 1983-84: $228,899
Difference: $174,741 = 322 65% Rank: 45
Manufacturers Hanover Corporation Formed:1979-80
Total Raised, 1979-80: $69,178
Total Raised, 1983-84: $291,068
Difference: $221,890 = 320 75% Rank: 46
Tenneco, Inc. Formed:1979-80
Total Raised, 1991-92: $208,019
Total Raised, 1995-96: $866,590
Difference: $658,571 = 316 59% Rank: 47
Loral Systems Group Formed:1985-86
Total Raised, 1989-90: $86,215
Total Raised, 1993=94: $358,895
Difference: $272,680 = 316 28% Rank: 48
Koch Industries, Inc. Formed:1989-90
Total Raised, 1993=94: $202,392
Total Raised, 1997-98: $831,184
Difference: $628,792 = 310 68% Rank: 49
Koch Industries, Inc. Formed:1989-90
Total Raised, 1991-92: $104,401
Total Raised, 1995-96: $428,074
Difference: $323,673 = 310 03% Rank: 50
Bellsouth Corporation Formed:1983-84
Total Raised, 1985-86: $70,383
Total Raised, 1989-90: $287,836
Difference: $217,453 = 308 96% Rank: 51
Rockwell International Corporation Formed:1979-80
Total Raised, 1979-80: $123,700
Total Raised, 1983-84: $497,473
Difference: $373,773 = 302 16% Rank: 52
Safari Club International Formed:1979-80
Total Raised, 1993=94: $94,149
Total Raised, 1997-98: $378,078
Difference: $283,929 = 301 57% Rank: 53
RJR Nabisco, Inc. Formed:1979-80
Total Raised, 1981-82: $64,199
Total Raised, 1985-86: $256,498
Difference: $192,299 = 299 54% Rank: 54
American Information Technologies Corp. Formed:1983-84
Total Raised, 1985-86: $58,487
Total Raised, 1989-90: $233,266
Difference: $174,779 = 298 83% Rank: 55
Southern Company Formed:1981-82
Total Raised, 1995-96: $125,656
Total Raised, 1999-00: $497,118
Difference: $371,462 = 295 62% Rank: 56
Lucent Technologies, Inc. Formed:1995-96
Total Raised, 1995-96: $87,568
Total Raised, 1999-00: $343,462
Difference: $255,894 = 292 22% Rank: 57
Fluor Corporation Formed:1979-80
Total Raised, 1985-86: $126,081
Total Raised, 1989-90: $494,417
Difference: $368,336 = 292 14% Rank: 58
Central & South West Services, Inc. Formed:1979-80
Total Raised, 1993=94: $57,841
Total Raised, 1997-98: $226,201
Difference: $168,360 = 291 07% Rank: 59
HSBC Americas / Marine Midland Banks Formed:1981-82
Total Raised, 1983-84: $52,071
Total Raised, 1987-88: $200,106
Difference: $148,035 = 284 29% Rank: 60
Jacobs Engineering Group, Inc. Formed:1981-82
Total Raised, 1995-96: $127,472
Total Raised, 1999-00: $488,875
Difference: $361,403 = 283 52% Rank: 6!
Banc One Corporation Formed:1979-80
Total Raised, 1989-90: $270,704
Total Raised, 1993=94: $1,037,361
Difference: $766,657 = 283 21% Rank: 62
Archer-Daniels-Midland Company Formed:1979-80
Total Raised, 1979-80: $50,369
Total Raised, 1983-84: $192,426
Difference: $142,057 = 282 03% Rank: 63
Aetna Life and Casualty Company Formed:1983-84
Total Raised, 1983-84: $88,329
Total Raised, 1987-88: $333,008
Difference: $244,679 = 277 01% Rank: 64
Outback Steakhouse, Inc. Formed:1991-92
Total Raised, 1993=94: $230,022
Total Raised, 1997-98: $865,042
Difference: $635,020 = 276 07% Rank: 65
Lockheed Corporation Formed:1979-80
Total Raised, 1979-80: $136,127
Total Raised, 1983-84: $511,131
Difference: $375,004 = 275 48% Rank: 66
Duke Power Company Formed:1979-80
Total Raised, 1995-96: $69,970
Total Raised, 1999-00: $261,562
Difference: $191,592 = 273 82% Rank: 67
TRW, Inc. Formed:1979-80
Total Raised, 1979-80: $69,121
Total Raised, 1983-84: $256,296
Difference: $187,175 = 270 79% Rank: 68
United Telecommunications, Inc. Formed:1979-80
Total Raised, 1983-84: $66,922
Total Raised, 1987-88: $247,495
Difference: $180,573 = 269 83% Rank: 69
Loral Systems Group Formed:1985-86
Total Raised, 1987-88: $55,311
Total Raised, 1991-92: $202,887
Difference: $147,576 = 266 81% Rank: 70
American General Corporation Formed:1979-80
Total Raised, 1995-96: $182,254
Total Raised, 1999-00: $668,062
Difference: $485,808 = 266 56% Rank: 71
Phillips Petroleum Company Formed:1979-80
Total Raised, 1983-84: $99,365
Total Raised, 1987-88: $364,141
Difference: $264,776 = 266 47% Rank: 72
Entergy Operations, Inc. Formed:1989-90
Total Raised, 1993=94: $64,650
Total Raised, 1997-98: $236,109
Difference: $171,459 = 265 21% Rank: 73
American Information Technologies Corporation
Formed:1979-80
Total Raised, 1983-84: $68,916
Total Raised, 1987-88: $249,574
Difference: $180,658 = 262 14% Rank: 74
Sea-Land Corporation Formed:1979-80
Total Raised, 1987-88: $52,291
Total Raised, 1991-92: $189,284
Difference: $136,993 = 261 98% Rank: 75
First City Bancorporation of Texas, Inc. Formed:1979-80
Total Raised, 1979-80: $85,372
Total Raised, 1983-84: $307,649
Difference: $222,277 = 260 36% Rank: 76
Banc One Corporation Formed:1979-80
Total Raised, 1987-88: $173,949
Total Raised, 1991-92: $622,458
Difference: $448,509 = 257 84% Rank: 77
E1 Paso Company Formed:1979-80
Total Raised, 1993=94: $74,169
Total Raised, 1997-98: $264,338
Difference: $190,169 = 256 40% Rank: 78
Dow Chemical, USA Formed:1979-80
Total Raised, 1985-86: $77,017
Total Raised, 1989-90: $274,424
Difference: $197,407 = 256 32% Rank: 79
Timken Company Formed:1995-96
Total Raised, 1995-96: $79,717
Total Raised, 1999-00: $277,044
Difference: $197,327 = 247 53% Rank: 80
Southern Bell Telephone & Telegraph Co. Formed:1979-80
Total Raised, 1981-82: $54,650
Total Raised, 1985-86: $189,822
Difference: $135,172 = 247 34% Rank: 81
National City Corporation Formed:1981-82
Total Raised, 1983-84: $59,921
Total Raised, 1987-88: $207,361
Difference: $147,440 = 246 06% Rank: 82
Wal-Mart Stores, Inc. Formed:1979-80
Total Raised, 1989-90: $56,535
Total Raised, 1993=94: $195,579
Difference: $139,044 = 245 94% Rank: 83
Eastern Airlines, Inc. Formed:1979-80
Total Raised, 1983-84: $70,676
Total Raised, 1987-88: $243,529
Difference: $172,853 = 244 57% Rank: 84
Heublein, Inc. Formed:1979-80
Total Raised, 1985-86: $52,292
Total Raised, 1989-90: $178,944
Difference: $126,652 = 242 20% Rank: 85
Salomon Brothers, Inc. Formed:1981-82
Total Raised, 1981-82: $106,250
[[Page 29066]]
Total Raised, 1985-86: $363,500
Difference: $257,250 = 242 12% Rank: 86
First Bank System, Inc. Formed:1979-80
Total Raised, 1995-96: $85,349
Total Raised, 1999-00: $290,311
Difference: $204,962 = 240 15% Rank: 87
Goodyear Tire & Rubber Company Formed:1979-80
Total Raised, 1993=94: $54,504
Total Raised, 1997-98: $185,093
Difference: $130,589 = 239 60% Rank: 88
North Carolina National Bank Corp. Formed:1979-80
Total Raised, 1979-80: $79,627
Total Raised, 1983-84: $269,718
Difference: $190,091 = 238 73% Rank: 89
Caterpillar Tractor Company Formed:1981-82
Total Raised, 1985-86: $65,232
Total Raised, 1989-90: $219,844
Difference: $154,612 = 237 02% Rank: 90
Lehman Brothers Kuhn Loec, Inc. Formed:1979-80
Total Raised, 1979-80: $51,400
Total Raised, 1983-84: $171,973
Difference: $120,573 = 234 58% Rank: 91
Northrop Corporation Formed:1979-80
Total Raised, 1979-80: $86,250
Total Raised, 1983-84: $288,361
Difference: $202,111 = 234 33% Rank: 92
GMC Electronic Data Systems Corporation Formed:1979-80
Total Raised, 1987-88: $116,315
Total Raised, 1991-92: $388,257
Difference: $271,942 = 233 80% Rank: 93
Textron, Inc. Eormed:1979-80
Total Raised, 1981-82: $116,552
Total Raised, 1985-86: $388,852
Difference: $272,300 = 233 63% Rank: 94
Southern Bell Telephone & Telegraph Co. Formed:1979-80
Total Raised, 1987-88: $203,554
Total Raised, 1991-92: $678,024
Difference: $474,470 = 233 09% Rank: 95
United Parcel Service of America, Inc. Formed:1979-80
Total Raised, 1983-84: $272,659
Total Raised, 1987-88: $905,482
Difference: $632,823 = 232 09% Rank: 96
Gun Owners of America (gun control foes) Formed:1991-92
Total Raised, 1995-96: $93,086
Total Raised, 1999-00: $309,050
Difference: $215,964 = 232 00% Rank: 97
Dun & Bradstreet Corporation Formed:1979-80
Total Raised, 1981-82: $51,577
Total Raised, 1985-86: $169,954
Difference: $118,377 = 229.52% Rank: 98
J. C. Penney Company, Inc. Formed:1979-80
Total Raised, 1981-82: $91,484
Total Raised, 1985-86: $301,185
Difference: $209,701 = 229.22% Rank: 99
United Parcel Service of America, Inc. Formed:1979-80
Total Raised, 1985-86: $567,328
Total Raised, 1989-90: $1,865,785
Difference: $1,298,457 = 228.87% Rank: 100
Source: Computer analysis by Sunshine Press Services of Federal
Election Commission data, Jan. 1, 1979 through Dec. 31, 2000.
Table 5. Rapid Rises in Corporate PAC Spending, 1979-2002
(After Spending More than
$250,000) Microsoft Corporation Formed: 1987-88
Total Spent, 1997-98: $267,500
Total Spent, 1999-00: $1,221,730
Difference: $954,230 = 356 72% Rank: 1
Federal Express Corporation Formed: 1983-84
Total Spent, 1985-86: $392,441
Total Spent, 1987-88: $1,093,998
Difference: $701,557 = 178 77% Rank: 2
Compass Bancshares, Inc. Formed: 1983-84
Total Spent, 1991-92: $363,617
Total Spent, 1993=94: $974,893
Difference: $611,276 = 168 11% Rank: 3
Metropolitan Life Insurance Company Formed: 1979-80
Total Spent, 1997-98: $310,633
Total Spent, 1999-00: $815,624
Difference: $504,991 = 162 57% Rank: 4
Bell Atlantic Corp. Formed: 1983-84
Total Spent, 1995-96: $388,073
Total Spent, 1997-98: $1,006,783
Difference: $618,710 = 159 43% Rank: 5
Planned Parenthood Action Fund, Inc. Formed: 1995-96
Total Spent, 1997-98: $359,408
Total Spent, 1999-00: $914,501
Difference: $555,093 = 154 45% Rank: 6
RJR Nabisco, Inc. Formed: 1979-80
Total Spent, 1987-88: $348,897
Total Spent, 1989-90: $872,626
Difference: $523,729 = 150 11% Rank: 7
Southern Bell Telephone & Telegraph Co. Formed:
1979-80
Total Spent, 1989-90: $265,096
Total Spent, 1991-92: $650,905
Difference: $385,809 = 145 54% Rank: 8
American Information Technologies Corp. Formed: 1983-84
Total Spent, 1991-92: $518,442
Total Spent, 1993=94: $1,207,881
Difference: $689,439 = 132 98% Rank: 9
Tenneco, Inc. Formed: 1979-80
Total Spent, 1993=94: $380,688
Total Spent, 1995-96: $860,515
Difference: $479,827 = 126 04% Rank: 10
Banc One Corporation Formed: 1979-80
Total Spent, 1991-92: $421,467
Total Spent, 1993=94: $934,434
Difference: $512,967 = 121 71% Rank: 11
American General Corporation Formed: 1979-80
Total Spent, 1997-98: $291,488
Total Spent, 1999-00: $634,510
Difference: $343,022 = 117 68% Rank: 12
Boeing Company Formed: 1981-82
Total Spent, 1995-96: $370,105
Total Spent, 1997-98: $759,495
Difference: $389,390 = 105 21% Rank: 13
MBNA Corporation Formed: 1991-92
Total Spent, 1993=94: $403,796
Total Spent, 1995-96: $825,974
Difference: $422,178 = 104 55% Rank: 14
Compass Bancshares, Inc. Formed: 1983-84
Total Spent, 1995-96: $729,612
Total Spent, 1997-98: $1,468,094
Difference: $738,482 = 101 22% Rank: 15
Southtrust Corporation Formed: 1979-80
Total Spent, 1995-96: $266,593
Total Spent, 1997-98: $530,794
Difference: $264,201 = 99 10% Rank: 16
FirstEnergy Corp. (Ohio Edison) Formed: 1981-82
Total Spent, 1997-98: $253,675
Total Spent, 1999-00: $502,890
Difference: $249,215 = 98 24% Rank: 17
Koch Industries, Inc. Formed: 1989-90
Total Spent, 1995-96: $428,664
Total Spent, 1997-98: $807,318
Difference: $378,654 = 88 33% Rank: 18
Northrop Corporation Formed: 1979-80
Total Spent, 1993=94: $422,969
Total Spent, 1995-9G: $794,880
Difference: $371,911 = 87 93% Rank: 19
J. P. Morgan & Company, Inc. Formed: 1979-80
Total Spent, 1985-86: $262,250
Total Spent, 1987-88: $492,681
Difference: $230,431 = 87 87% Rank: 20
Philip Morris, Inc. Formed: 1979-80
Total Spent, 1983-84: $403,699
Total Spent, 1985-86: $754,949
Difference: $351,250 = 87 01% Rank: 21
Eli Lilly & Company Formed: 1979-80
Total Spent, 1995-96: $375,583
Total Spent, 1997-98: $700,580
Difference: $324,997 = 86 53% Rank: 22
Southwestern Bell Corporation Formed: 1979-80
Total Spent, 1993=94: $365,700
Total Spent, 1995-96: $674,857
Difference: $309,157 = 84 54% Rank: 23
Rockwell International Corporation Formed: 1979-80
Total Spent, 1981-82: $266,688
Total Spent, 1983-84: $490,541
Difference: $223,853 = 83 94% Rank: 24
United Parcel Service of America, Inc. Formed: 1979-80
Total Spent, 1991-92: $1,835,231
Total Spent, 1993=94: $3,350,884
Difference: $1,515,653 = 82 59% Rank: 25
General Telephone & Electronics Corp. Formed: 1979-80
Total Spent, 1989-90: $420,131
Total Spent, 1991-92: $765,805
Difference: $345,674 = 82 28% Rank: 26
United Parcel Service of America, Inc. Formed: 1979-80
Total Spent, 1985-86: $522,514
Total Spent, 1987-88: $943,815
Difference: $421,301 = 80 63% Rank: 27
Waste Management, Inc. Formed: 1979-80
Total Spent, 1985-86: $341,975
Total Spent, 1987-88: $615,059
Difference: $273,084 = 79 85% Rank: 28
Houston Industries, Inc. Formed: 1979-80
Total Spent, 1983-84: $256,353
Total Spent, 1985-86: $460,684
Difference: $204,331 = 79 71% Rank: 29
Cigna Corporation Formed: 1979-80
Total Spent, 1997-98: $352,512
Total Spent, 1999-00: $624,736
Difference: $272,224 = 77 22% Rank: 30
United Parcel Service of America, Inc. Formed: 1979-80
Total Spent, 1987-88: $943,815
Total Spent, 1989-90: $1,658,366
Difference: $714,551 = 75 71% Rank: 31
Black America's PAC Formed: 1995-96
Total Spent, 1995-96: $1,899,486
Total Spent, 1997-98: $3,337,602
Difference: $1,438,116 = 75 71% Rank: 32
Chase Manhattan Corporation Formed: 1979-80
Total Spent, 1989-90: $274,760
Total Spent, 1991-92: $481,894
Difference: $207,134 = 75 39% Rank: 33
Barnett Banks of Florida, Inc. Formed: 1979-80
[[Page 29067]]
Total Spent, 1985-86: $304,230
Total Spent, 1987-88: $532,509
Difference: $228,279 = 75 04% Rank: 34
Bankamerica Corporation Formed: 1981-82
Total Spent, 1993=94: $311,633
Total Spent, 1995-96: $535,516
Difference: $223,883 = 71 84% Rank: 35
NationsBank Formed: 1979-80
Total Spent, 1997-98: $607,578
Total Spent, 1999-00: $1,041,837
Difference: $434,259 = 71 47% Rank: 36
United Technologies Corporation Formed: 1979-80
Total Spent, 1993=94: $263,300
Total Spent, 1995-96: $450,078
Difference: $186,778 = 70 94% Rank: 37
Southwestern Bell Corporation Formed: 1979-80
Total Spent, 1997-98: $961,990
Total Spent, 1999-00: $1,642,657
Difference: $680,667 = 70 76% Rank: 38
Lockheed Corporation Formed: 1979-80
Total Spent, 1991-92: $422,512
Total Spent, 1993=94: $708,346
Difference: $285,834 = 67 65% Rank: 39
Union Pacific Corporation Formed: 1979-80
Total Spent, 1985-86: $296,938
Total Spent, 1987-88: $495,482
Difference: $198,544 = 66 86% Rank: 40
Household Finance Corporation Formed: 1979-80
Total Spent, 1989-90: $270,795
Total Spent, 1991-92: $444,889
Difference: $174,094 = 64 29% Rank: 41
Sierra Club (environmentalist) Formed: 1979-80
Total Spent, 1997-98: $441,208
Total Spent, 1999-00: $721,429
Difference: $280,221 = 63 51% Rank: 42
Westinghouse Electric Corp. Formed: 1979-80
Total Spent, 1987-88: $264,890
Total Spent, 1989-90: $431,697
Difference: $166,807 = 62 97% Rank: 43
American Telephone & Telegraph Co. Formed: 1983-84
Total Spent, 1985-86: $1,744,301
Total Spent, 1987-88: $2,841,464
Difference: $1,097,163 = 62 90% Rank: 44
General Motors Corporation Formed: 1979-80
Total Spent, 1993=94: $477,782
Total Spent, 1995-96: $777,521
Difference: $299,739 = 62 74% Rank: 45
Keycorp Formed: 1979-80
Total Spent, 1995-96: $376,200
Total Spent, 1997-98: $611,975
Difference: $235,775 = 62 67% Rank: 46
Union Pacific Corporation Formed: 1979-80
Total Spent, 1989-90: $731,974
Total Spent, 1991-92: $1,188,407
Difference: $456,433 = 62 36% Rank: 47
Sierra Club (environmentalist) Formed: 1979-80
Total Spent, 1987-88: $299,891
Total Spent, 1989-90: $486,795
Difference: $186,904 = 62 32% Rank: 48
Chrysler / Gulfstream Aerospace Corp. Formed: 1979-80
Total Spent, 1993=94: $417,015
Total Spent, 1995-96: $659,369
Difference: $242,354 = 58 12% Rank: 49
Pfizer, Inc. Formed: 1979-80
Total Spent, 1997-98: $536,471
Total Spent, 1999-00: $844,132
Difference: $307,661 = 57 35% Rank: 50
Chase Manhattan Bank Formed: 1979-80
Total Spent, 1989-90: $269,299
Total Spent, 1991-92: $423,632
Difference: $154,333 = 57 31% Rank: 51
Sierra Club (environmentalist) Formed: 1979-80
Total Spent, 1993=94: $431,725
Total Spent, 1995-96: $677,883
Difference: $246,158 = 57 02% Rank: 52
Banc One Corporation Formed: 1979-80
Total Spent, 1989-90: $269,833
Total Spent, 1991-92: $421,467
Difference: $151,634 = 56 20% Rank: 53
Raytheon Company Formed: 1979-80
Total Spent, 1995-96: $385,863
Total Spent, 1997-98: $601,994
Difference: $216,131 = 56 01% Rank: 54
Eli Lilly & Company Formed: 1979-80
Total Spent, 1997-98: $700,580
Total Spent, 1999-00: $1,089,599
Difference: $389,019 = 55 53% Rank: 55
Chrysler / Gulfstream Aerospace Corp. Formed: 1979-80
Total Spent, 1995-96: $659,369
Total Spent, 1997-98: $1,021,714
Difference: $362,345 = 54 95% Rank: 56
Amsouth Bancorporation Formed: 1983-84
Total Spent, 1997-98: $304,524
Total Spent, 1999-00: $470,782
Difference: $166,258 = 54 60% Rank: 57
Glaxo, Inc. Formed: 1985-86
Total Spent, 1997-98: $716,634
Total Spent, 1999-00: $1,104,801
Difference: $388,167 = 54 17% Rank: 58
Crawford Group / Enterprise Leasing Formed: 1987-88
Total Spent, 1993=94: $253,769
Total Spent, 1995-96: $391,094
Difference: $137,325 = 54 11% Rank: 59
Associates Corp. (Ford Motor Co.) Formed: 1989-90
Total Spent, 1995-96: $342,269
Total Spent, 1997-98: $526,937
Difference: $184,668 = 53 95% Rank: 60
Morgan Stanley & Company, Inc. Formed: 1979-80
Total Spent, 1985-86: $303,919
Total Spent, 1987-88: $465,992
Difference: $162,073 = 53 33% Rank: 61
Houston Industries, Inc. Formed: 1979-80
Total Spent, 1995-96: $470,646
Total Spent, 1997-98: $720,544
Difference: $249,898 = 53 10% Rank: 62
Outback Steakhouse, Inc. Formed: 1991-92
Total Spent, 1997-98: $636,741
Total Spent, 1999-00: $974,275
Difference: $337,534 = 53 01% Rank: 63
Household Finance Corporation Formed: 1979-80
Total Spent, 1997-98: $512,016
Total Spent, 1999-00: $782,819
Difference: $270,803 = 52 89% Rank: 64
General Motors Corp. / Hughes Aircraft Formed: 1979-80
Total Spent, 1985-86: $271,290
Total Spent, 1987-88: $412,181
Difference: $140,891 = 51 93% Rank: 65
American Airlines Formed: 1979-80
Total Spent, 1991-92: $282,647
Total Spent, 1993=94: $426,852
Difference: $144,205 = 51 02% Rank: 66
Cooper Industries, Inc. Formed: 1979-80
Total Spent, 1989-90: $264,213
Total Spent, 1991-92: $397,960
Difference: $133,747 = 50 62% Rank: 67
Flowers Industries, Inc. Formed: 1979-80
Total Spent, 1993=94: $254,819
Total Spent, 1995-96: $383,269
Difference: $128,450 = 50 41% Rank: 68
Source: Computer analysis by Sunshine Press Services of Federal
Election Commission data,
Jan. l, 1979through Dec. 31, 2000.
APPENDIX B: Publication List
The news organizations listed below have published news reports
or commentary
by Edward Roeder
Daily Newspapers
Albuquerque Journal
Arizona Republic
Arkansas Gazette-Democrat
Atlanta Constitution *
Austin American-Statesman
Baltimore Sun *
Boston Globe *
Chicago Sun-Times *
Chicago Tribune *
Cleveland Plain Dealer
Dallas Morning News
Denver Post
Deseret News
Detroit Free Press*
Detroit News *
Florida Today
Fort Lauderdale News & Sun-Sentinel
Greensboro News & Record *
Kansas City Star
Los Angeles Times
Louisville Courier-Journal *
Miami Herald *
Nashville Tennessean
New Orleans Times-Picayune
New York Daily News
New York Newsday
New York Times *
Orlando Sentinel *
Philadelphia Inquirer *
Portland Oregonian
Providence Journal
Richmond Times-Dispatch
Sacramento Bee *
San Jose Mercury News
Seattle Post-Intelligencer
Seattle Times *
St. Louis Post-Dispatch *
St. Petersburg Times *
Tampa Tribune
USA Today
Washington Post *
Washington Times
Articles ran on page 1 or led Sunday section
Periodicals
American Banker *
Capital Style
Conservative Digest *
Free Inquiry *
Monthly Business Review *
Ms. *
New Republic *
New Times *
Newsweek
Playboy *
Politics Today *
Rolling Stone *
Saturday Review *
Sierra *
Space Business international *
The Nation *
Time
[[Page 29068]]
Village Voice *
Washington Monthly *
Washingtonian *
Bylined feature magazine articles
Broadcast
ABC News (TV) *
CBS News (TV) *
CNN *
Canadian Broadcast'g Co. (Radio) *
KABC-TV (Hollywood, CA) *
National Public Radio *
Nightline (ABC News-TV) *
NBC News (TV & Radio)
20-20 (ABC News--TV)
WBAL-TV (Baltimore, MD)
WDIV-TV (Detroit, Mich.) *
WJLA-TV (Washington, DC) *
WJXT-TV (Jacksonville, Fla.) *
WJZ-TV (Baltimore, MD)
WPLG-TV (Miami, Fla.) *
WRC-TV (Washington, DC)
WTVT-TV (Tampa, Fla.) *
WUSA-TV (Washington, DC) *
Paid on-air appearanc(s)
MTC-00030612
BEFORE THE UNITED STATES DEPARTMENT OF JUSTICE
UNITED STATES OF AMERICA, Plaintiff, V. Civil Action No.
98-1232 (CKK) MICROSOFT CORPORATION, Defendant.
STATE OF NEW YORK ex rel.
Attorney General Eliot Spitzer, et al., Plaintiffs, V. Civil
Action No. 98-1233 (CKK) MICROSOFT CORPORATION, Defendant.
DECLARATION OF JOSEPH E. STIGLITZ AND JASON FURMAN
TABLE OF CONTENTS
I. QUALIFICATIONS 1
II. PURPOSE 2
III. INTRODUCTION 2
IV. THE MODERN ECONOMIC THEORY OF COMPETITION AND MONOPOLY. 6
A. Acquisition of a monopoly 7
B. Potential for competition 10
C. Consequences of monopoly 12
D. Monopolies and innovation 14
V. FACTS AND LEGAL CONCLUSIONS RELATING TO MICROSOFT 16
A. Monopoly power 16
B. Anticompetitive behavior 17
C. Effectiveness of anticompetitive behavior in maintaining the
monopoly 19
VI. OUTLINE OF AN EFFECTIVE CONDUCT REMEDY 20
A. Creating more choices for consumers 22
B. Reducing the applications barrier to entry 23
C. Preventing Microsoft from strengthening its operating system
monopoly by bringing new products within its scope 23
VII. ANALYSIS OF THE PROPOSED FINAL JUDGMENT 24
A. Creating more choices for consumers 26
1. Ensuring that OEMs and potentially ISVs have the right to
modify fundamental aspects of the computer experience in any way
they choose 27
2. Ensuring that OEMs and ISVs have adequate information and
technical access to develop applications for, or even modifications
to, Windows 29
3. Ensuring that OEMs and ISVs are protected from retaliation by
Microsoft for providing alternatives to consumers 31
4. Ensuring that OEMs have financial incentives to make changes
that benefit consumers 32
B. Reducing the applications barrier to entry 34
1. Middleware and the applications barrier to entry 34
2. Microsoft Office and the applications barrier to entry 37
C. Preventing Microsoft from strengthening its operating system
monopoly by extending it to encompass additional products 38
VIII. STEPS TO IMPROVE THE PROPOSED FINAL JUDGMENT: THE
LITIGATING STATES" ALTERNATIVE 39
A. Fostering competition through OEMs and reducing the
applications barrier to entry 40
B. Internet Explorer browser open source and Java distribution
41
C. Cross-platform porting of Office 42
D. Mandatory disclosure to ensure interoperability 42
IX. CONCLUSION 43
I. QUALIFICATIONS
Our names are Joseph Stiglitz and Jason Furman. Dr. Stiglitz is
a Professor at Columbia Business School, Columbia's Graduate School
of Arts and Sciences (in the Department of Economics), and
Columbia's School of International and Public Affairs. In 2001, Dr.
Stiglitz was awarded the Nobel Prize in Economic Sciences. In
addition, Dr. Stiglitz serves as a Senior Director and Chairman of
the Advisory Committee at Sebago Associates, Inc., an economic and
public policy consulting firm.
Dr. Stiglitz previously served as the World Bank's Chief
Economist and Senior Vice President for Development Economics.
Before joining the Bank, he was the Chairman of the President's
Council of Economic Advisers. Dr. Stiglitz has also served as a
professor of economics at Stanford, Princeton, Yale, and All Souls
College, Oxford.
As an academic, Dr. Stiglitz helped create a new branch of
economics--"The Economics of
Information"--which has received widespread application
throughout economics. In the late 1970s and early 1980s, Dr.
Stiglitz helped revive interest in the economics of technical change
and other factors that contribute to long-run increases in
productivity and living standards. Dr. Stiglitz is also a leading
scholar of competition policy.
In 1979, the American Economic Association awarded Dr. Stiglitz
its biennial John Bates Clark Award, given to the economist under 40
who has made the most significant contributions to economics. His
work has also been recognized through his election as a fellow to
the National Academy of Sciences, the American Academy of Arts and
Sciences, and the American Philosophical Society, as well as his
election as a corresponding fellow of the British Academy. He has
also been awarded several honorary doctorates.
Jason Furman is a Lecturer in economics at Yale University. In
addition, Mr. Furman is a Director at Sebago Associates. Mr. Furman
previously served as Special Assistant to the President for Economic
Policy at the White House, where his responsibilities included tax
policy, the Federal budget, Social Security, anti-poverty programs,
and other economic policy issues.
II. PURPOSE
This Declaration was commissioned by the Computer &
Communications Industry Association (CCIA) as an independent
analysis of the competitive effects of the Proposed Final Judgment.
The views and opinions expressed in this Declaration are solely
those of the authors based on their own detailed study of the
relevant economic theory and court documents; they do not
necessarily reflect the views and opinions of CCIA. In addition, the
views and opinion expressed in this Declaration should not be
attributed to any of the organizations with which the authors are or
have previously been associated.
III. INTRODUCTION
Competition is the defining characteristic of a market economy.
It provides the incentive to produce new products that consumers
want, to improve efficiency and lower the costs of production, and
to pass on these innovations in the form of lower prices for
consumers. In a competitive market, a firm that does not act in the
best interests of consumers will be punished and, ultimately, will
fail. But when competition is imperfect--or when it is
nonexistent as in the limiting case of monopoly--the incentives
to undertake these beneficial actions may be attenuated. In fact, a
firm may even face incentives to behave in ways which do not serve
the interests of consumers or the economy more generally. Monopoly
power may lead a firm to underinvest in innovation, misdirect its
investments, or undertake other activities in order to stifle
competition rather than to improve products. Costs of production may
be excessive because the monopolist has insufficient incentives for
efficiency, has incentives to undertake costly measures to deter
competition, or undertakes measures to raise rivals" costs.
And consumers will face higher prices and fewer choices in the short
run; in the long run, the losses to consumers may be even more
severe.
In a unanimous decision, the full Court of Appeals for the DC
Circuit upheld the District Court finding that Microsoft was guilty
of violating 2 of the Sherman Act through its illegal
maintenance of a monopoly in the market for Intel-compatible
personal computer (PC) operating systems.\1\ The Court of Appeals
also affirmed numerous findings of fact concerning the consequences
of this illegal monopolization for misdirecting innovation, raising
rivals" costs, and limiting consumer choice.
---------------------------------------------------------------------------
\1\ United States v. Microsoft Corp., 253 F.3d 34 (DC Cir.
2001).
---------------------------------------------------------------------------
The desire to maintain this monopoly, even against potentially
superior products, creates a powerful incentive for Microsoft to
eliminate or weaken competition that could erode or even eliminate
its monopoly. In the mid-1990s, the principal threat to Microsoft's
Windows operating system came from the development of the Netscape
browser and Java technologies,\2\ which allowed
[[Page 29069]]
programmers to write applications to Netscape and Java, meaning that
such programs would then work on any operating system that would run
Netscape or Java. By reducing or even eliminating the cost of
producing applications for different operating systems, these
technological rivals reduced the barriers to entry for a new
operating system and threatened, over the longer run, to erode
Microsoft's monopoly in Intel-compatible PC operating systems by
allowing competitors to provide superior products at a lower cost.
---------------------------------------------------------------------------
\2\ "The Java technologies include: (1) a
programming language; (2) a set of programs written in that
language, called the 'Java class libraries," which
expose APIs; (3) a compiler, which translates code written by a
developer into 'bytecode'; and (4) a Java Virtual
Machine ('JVM'), which translates bytecode into
instructions to the operating system." See 253 F.3d at 74,
citing Findings of Fact 73, United States v. Microsoft Corp.,
84 F. Supp. 2d 9, 29 (D.DC 1999).
---------------------------------------------------------------------------
Microsoft's conduct has effectively eliminated the threat posed
by Netscape and Java. Given ongoing rapid technological progress, it
is impossible to predict with certainty where the next challenge to
Microsoft Windows will come from. The experience in this area,
however, suggests that it is likely to come from rivalry at the
borders of operating systems, in particular from
"middleware" that makes it possible for programmers to
write to the "middleware" rather than to the underlying
operating system. One such example comes from the increasingly
important area of multimedia: streaming media players. Whether the
next challenge to Microsoft's operating systems monopoly comes from
a multimedia package or another technology, Microsoft will continue
to have the same incentives and ability to stifle competition as it
displayed against Netscape and Java in the mid-1990s.
The principal goal of any remedy for Microsoft's illegal
behavior in this case should be to foster competition and expand
choices for consumers. The key to achieving this goal is changing
Microsoft's incentives and taking steps to increase competition. A
structural remedy, such as splitting up the company, would most
directly alter incentives. Where such structural changes are not
possible, the remedy should prohibit and regulate the conduct that
Microsoft has used in the past and will have an incentive to use in
the future to eliminate threats from "middleware"
products that threaten to limit its monopoly power by usurping some,
and perhaps eventually all, of the important functions of the
Windows operating system.
The Revised Proposed Final Judgment (PFJ) of November 6, 2001
does not change Microsoft's incentives to undertake anticompetitive
acts to stifle consumer choice by thwarting potentially superior
products.\3\ Furthermore, the PFJ provides few effective
prohibitions against future anticompetitive conduct: It
alternatively ratifies Microsoft's existing conduct, contains
sufficient loopholes to allow Microsoft to circumvent the
legislation, and suffers from toothless enforcement procedures that
would allow Microsoft to reap the fruits of its monopoly for a
significant, and potentially even indefinite, period. In our view,
the PFJ would leave intact Microsoft's ability to maintain, and
benefit from, its Windows operating system monopoly, while allowing
it to continue to limit choices for consumers and stifle innovation.
---------------------------------------------------------------------------
\3\ United States v. Microsoft Corp., Revised Proposed
Final Judgment, in the U.S. District Court for D.C, November 6,
2001.
---------------------------------------------------------------------------
The PFJ does not even accomplish the limited remedial goals
articulated in the U.S. Department of Justice's Competitive Impact
Statement (CIS).\4\ Specifically, in addition to its loopholes and
its inadequate enforcement mechanism, the PFJ is entirely silent on
several key findings of the Court of Appeals, including the
commingling of applications and operating systems code, the
pollution of Java, and the applications barrier to entry more
broadly.
---------------------------------------------------------------------------
\4\ U.S. Department of Justice (November 15, 2001),
Competitive Impact Statement in United States vs. Microsoft Corp.
---------------------------------------------------------------------------
The PFJ should be rejected and replaced with a remedy that
changes Microsoft's incentives to unfetter the market for
competition. At a minimum, a remedy in this case needs to restrain
Microsoft's conduct, by restricting the means through which
Microsoft can illegally maintain and benefit from its monopoly.
The goal of this Declaration is to analyze the PFJ. It does not
propose a detailed alternative remedy. It is important to note,
however, that the proposal by the litigating States, while
imperfect, is clearly superior to the PFJ in all of these regards.
We do not address more aggressive remedies--such as structural
changes to break up Microsoft or impose more extensive limitations
on its intellectual property rights--but we note that such
broader measures may well be necessary and desirable in order to
alter Microsoft's incentives for anti-competitive behavior.\5\ We
are convinced, however, that the PFJ fails to meet the minimum
requirement of an acceptable remedy--that is, it is unlikely to
substantially increase competition in the relevant market.
---------------------------------------------------------------------------
\5\ Restrictions on intellectual property rights have been
used as a remedy in past antitrust cases, for example IBM's 1956
tabulating machines case, in a manner that is both effective and
largely without adverse effects.
---------------------------------------------------------------------------
The remainder of this Declaration contains five sections. First,
it presents a brief discussion of the modem theory of competition,
focusing on its relation to innovation. Second, it summarizes the
relevant facts and legal conclusions relating to Microsoft. Third,
it outlines what an effective remedy in this case should entail.
Fourth, it examines the PFJ and highlights its deficiencies in
comparison to this effective remedy. Finally, the paper concludes
with a brief discussion of practical measures that could provide a
more effective remedy.
IV. THE MODERN ECONOMIC THEORY OF COMPETITION AND MONOPOLY
This section presents a brief overview of the modem economic
theory of competition and monopoly. The theory of competition has
evolved rapidly in the last few decades, due in part to the natural
evolution of economic thought and in part to the issues raised by
the "new economy" (such as the importance of network
effects and rapid innovation). Given the vast literature on the
topic, this discussion is necessarily selective and focuses on the
most relevant issues for Microsoft's monopoly of the market for
operating systems for Intel-compatible PCs. This theoretical
background motivates the conclusions about the PFJ.
A. Acquisition of a monopoly
The traditional view of monopoly is that in specific industries,
like public utilities, increasing returns to scale create a
situation in which luck or initial success will eventually lead to
one firm that can maintain its monopoly by controlling an entire
market and thus benefiting from the lower average costs of
production that result from the larger scale of production. This
aspect of the traditional view is still salient in the software
market. Producing a software program has high fixed costs in the
form of investments in research and development but, once this
investment has been made, virtually no marginal cost from producing
additional units. As a result, the larger the scale of production,
the lower the average cost. By itself, these increasing returns to
scale will provide a powerful force for consolidation.
The modem view of monopoly has added an additional effect that
can strengthen the advantages enjoyed by the lucky or initially
successful firm: network effects.\6\ Network effects arise when the
desirability of a product depends not just on the characteristics of
the product itself but also on how many other people are using it.
---------------------------------------------------------------------------
\6\ For an overall survey, see Michael Katz and Carl
Shapiro (1994), "Systems Competition and Network
Effects." Journal of Economic Perspectives, 8:2, 93-115.
For a specific application to Microsoft, see Timothy Bresnahan
(2001), "The Economics of the Microsoft Case." Mimeo
available at http://www.stanford.edu/tbres/Microsoft/The Economics
of The Microsoft Case.pdf.
---------------------------------------------------------------------------
Network externalities may be direct: as a user of Microsoft
Word, I benefit when many other people also use the program because
it is easier to share Word files. Network externalities may also be
indirect: I am more likely to purchase a computer and operating
system if I know that more software choices are currently available
(and will be available in the future) for this system. An operating
system with a larger set of existing (and expected) compatible
applications will be more desirable. This indirect network effect
has been called the "applications barrier to
entry." \7\ The main reason that consumers demand a
particular operating system is its ability to run the applications
that they want. In developing applications, Independent Software
Vendors (ISVs) incur substantial sunk costs and thus face increasing
returns to scale. This motivates ISVs to first write to the
operating system with the largest installed base. Because
"porting" an application to a different operating system
will result in substantial additional fixed costs, a firm will have
less incentive to produce the application for operating systems with
a smaller installed base, and may do so with a delay or forgo
porting completely.
---------------------------------------------------------------------------
\7\ Franklin Fisher, "Direct Testimony of Franklin
Fisher" in United States v. Microsoft Corp.
---------------------------------------------------------------------------
The applications barrier to entry can skew competition for an
extended period of time and ensure that any monopoly power, once
established, will tend to persist. In choosing
[[Page 29070]]
a PC and an operating system, consumers make a large fixed
investment. In addition, because a considerable amount of learning
is associated with the use of operating systems and associated
applications, and because files created under one applications
software program may not be easily or perfectly transferable to
others, there are large costs associated with switching. As a
result, consumers will evaluate, among other factors, the current
existence of compatible applications and the likely number of future
compatible applications.\8\ The current number of compatible
applications is likely to depend directly on the past and current
market share of the operating system. A consumer's reasonable
evaluation of the prospects for the continued support of his or her
favorite applications and the development of new applications is
also likely to be based on current market share. As a result,
increased market share indirectly increases the desirability of an
operating system.
---------------------------------------------------------------------------
\8\ Nicholas Economides (1996), "The Economics of
Networks." International Journal of Industrial Organization,
14:2.
---------------------------------------------------------------------------
Empirically, this applications barrier to entry is dramatic. At
its peak in the mid-1990s, IBM's operating system, OS/2 Warp, had 10
percent of the market for operating systems for Intel-compatible PCs
and ran approximately 2,500 applications. In contrast, Windows
supported over 70,000 applications.\9\ Establishing a new operating
system that effectively competes head-to-head with Windows would
require the hugely expensive task of attracting ISVs to port
thousands or even tens of thousands of programs to the new operating
system, a process with a substantial fixed cost and, in the absence
of a large guaranteed market, little scope to benefit from economies
of scale. Particularly important to the applications barrier to
entry is the availability of applications providing key
functionalities, such as office productivity. Microsoft's dominance
in this area, and its choice about whether or not to port its
Microsoft Office program to alternative operating systems, can add a
new and even higher level to the applications barrier to entry.
---------------------------------------------------------------------------
\9\ Findings of Fact, 40 and 46, 84 F. Supp.
2d at 20, 22.
---------------------------------------------------------------------------
With this barrier to entry, a monopoly once established may be
hard to dislodge. Anticompetitive practices early in the competitive
struggle can lead to a market dominance that can persist, even if
the anticompetitive practices which gave rise to the monopoly
position are subsequently prohibited. These hysteresis effects are
reinforced by switching costs. Learning a language or a program
interface may involve significant costs. Users must therefore be
convinced that an alternative program is substantially superior if
they are to be induced to incur the learning and other costs
associated with switching to an alternative product. These
"lock in" effects make it more difficult to dislodge a
firm that has established a dominant position, even when it is
technically inferior to rivals.
This perspective has two important policy implications. First,
it is imperative to address anticompetitive practices as quickly as
possible. Delay is not only costly, but it impedes the restoration
of competition even in the longer run. Second, prohibiting the
practices that gave rise to the monopoly may not suffice to restore
competition. Stronger conduct, and possibly structural, remedies may
be required.
B. Potential for competition
In the most simplistic view, a monopoly once attained is
permanent. Increasing returns to scale and network externalities
make the monopolist impregnable--any new entrant can be priced
out of business by the monopolist--which can then go back to
charging the monopoly price for the product.
In contrast to this simplistic static view, the economist Joseph
Schumpeter presented a dynamic vision of technological change giving
rise to a series of temporary monopolies. In his vision, the most
successful firm in a winner-take-all contest would become a
temporary monopolist, benefiting from the rents that this monopoly
confers--a process necessary to justify incurring the sunk
costs in research and development required to obtain the monopoly in
the first place. But, in the Schumpeterian vision, this monopoly
would eventually be toppled by entry as a newly innovative entrant
displaced the monopolist with a superior product, thus reaping the
benefits of increasing returns to scale and network
externalities.\10\
---------------------------------------------------------------------------
\10\ Joseph Schumpeter (1942 / 1984), Capitalism,
Socialism and Democracy. Harper Collins, New York.
---------------------------------------------------------------------------
The real world likely lies somewhere between these two views. A
monopoly is not a fixed part of the economic landscape. But the
downfall of a monopoly is not inevitable. In fact, more recent
economic research strongly indicates that Schumpeter's conclusion
was wrong; when restraints on anticompetitive conduct are absent, a
monopoly can take steps to ensure that it is likely to be
perpetuated.\11\ These steps can suppress the overall level of
innovation and have other high social costs.\12\ Significant network
effects combined with switching costs, as discussed above, represent
one way in which a firm can perpetuate its market power.
---------------------------------------------------------------------------
\11\ See, among other references, Richard Gilbert and
David Newbery (1980), "Preemptive Patenting and the
Persistence of Monopoly." American Economic Review 72(3), pp.
514-526 and Partha Dasgupta and Joseph Stiglitz (1980),
"Uncertainty, Market Structure and the Speed of
R&D," Bell Journal of Economics, 11 (1), pp. 1-28.
\12\ Joseph Stiglitz (1987). "Technological Change,
Sunk Costs, and Competition." Brookings Papers on Economic
Activity, 3, pp. 883-937.
---------------------------------------------------------------------------
Understanding this point is central to understanding what
motivated the actions of Microsoft in promoting Internet Explorer
and restraining Netscape and Java, and also to understanding the
motivations of a conduct remedy to improve competition. Network
externalities are not a "fixed factor" in the economic
landscape. They depend, at least in part, on decisions by the
monopolist. A monopolist has substantial resources at its disposal
to strengthen barriers to entry and thus to maintain and strengthen
its monopoly power. Exclusionary conduct by the monopoly can be used
to prevent a reduction in the barriers to entry or even
affirmatively to raise them even higher. Java and Netscape would
have reduced the monopoly power of Windows by allowing a greater
variety of programs to function on a greater variety of operating
systems. The social benefits from such innovation were likely
significant, but Microsoft would have experienced significant losses
from the innovation through the erosion of its monopoly power.
Similarly, this same point can provide the rationale for
structural or conduct remedies that can potentially reduce barriers
to entry and thus increase competition in part, or all, of the
market. The fundamental idea is that Microsoft acted as it did
because it was afraid that Netscape and Java would reduce the
applications barrier to entry and thus undermine its operating
systems monopoly. By preventing this anticompetitive behavior, and
indeed promoting competition, a conduct remedy could have precisely
the opposite effect, creating the conditions for the dynamic,
innovative Schumpeterian competition that would otherwise be absent
in this market. In understanding the monopoly in the operating
systems market, and how it fits into the overall PC platform, it is
useful to introduce some issues specific to this area. Timothy
Bresnahan, a Professor of Economics at Stanford University and a
former Deputy Assistant Attorney General and Chief Economist at the
U.S. Department of Justice Antitrust Division, formulated the
concept of "Divided Technical Leadership." \13\
The concept is that although each aspect of the platform is
dominated by a single company, different companies dominate
different "layers" of the platform: "At one stage,
all of IBM and Compaq (computer), Microsoft (OS), Intel (CPU),
Netware (networking OS), WordPerfect and Lotus (near-universal
applications) participated in technological leadership of the PC
platform." \14\ In a situation of divided technical
leadership, according to Bresnahan, competition comes from two
sources: "(1) firms in one layer encouraging entry and epochal
change in another layer and (2) rivalry at layer
boundaries." \15\ To the degree that divided technical
leadership is absent, because for example Microsoft controls many of
the layers (operating system, office applications, networking,
browsers, etc.), competition will be restricted. Any measures to
facilitate divided technical leadership, even if they leave the
monopoly at any given layer intact, will facilitate competition and
thereby benefit consumers in the form of greater innovation, more
choices, and lower prices.
---------------------------------------------------------------------------
\13\ Timothy Bresnahan and Shane Greenstein (1999),
"Technological Competition and the Structure of the Computer
Industry." Journal of Industrial Economics, 47(1): pp.
1-40 and Bresnahan (2001).
\14\ Bresnahan (2001), p. 5.
\15\ Bresnahan (2001), p. 6.
---------------------------------------------------------------------------
C. Consequences of monopoly
Traditional economic theory suggests that the principal
consequence of a monopoly is to raise prices and restrict
production. This combination has two consequences. First, higher
prices allow the monopolist to capture some of the surplus
previously enjoyed by
[[Page 29071]]
consumers. Second, restricted production results in a deadweight
loss for society, the so-called "Harberger triangle," to
the extent that the value placed on the forgone consumption by
consumers exceeds its cost to producers.\16\
---------------------------------------------------------------------------
\16\ Arnold Harberger (1954), "Monopoly and Resource
Allocation," AEA Papers and Proceedings, 44: 77-87.
---------------------------------------------------------------------------
Over the last few decades, economists have substantially
enhanced this traditional theory and explored other ways in which
market power imposes social costs. The modem view is that when
competition is imperfect, firms try to maintain and extend their
market power by taking actions to restrict competition. In the world
of perfect competition, the source of success for firms is producing
innovations that benefit consumers and reduce prices. In the world
of imperfect competition, an additional--and perhaps
paramount--source of success is the effort to reap monopoly
profits, capture rents, deter entry into the market, restrict
competition, and raise rivals" costs.\17\
---------------------------------------------------------------------------
\17\ Partha Dasgupta and Joseph Stiglitz (1998),
"Potential Competition, Actual Competition and Economic
Welfare." European Economic Review, 32: 569-577. For an
extended discussion and additional references see Joseph Stiglitz
(1994), Whither Socialism, MIT Press, Cambridge.
---------------------------------------------------------------------------
Under the new view, the social costs of monopolies go well
beyond the "Harberger triangles" that result from higher
prices and restricted output. In fact, even if the monopolist is not
currently restricting output, the steps taken to maintain the
monopoly will result in substantial economic inefficiencies and
costs to society. These costs may be far larger than the monopoly
profits and far larger than the Harberger triangles. These social
losses reflect higher costs of production (both for the firm and its
rival), limited or distorted investment in innovation, a restricted
set of potentially inferior choices for consumers, and, in the long
run, higher prices.
D. Monopolies and innovation
The information technology industry is characterized by a rapid
rate of technological change. As the modem theory of competition and
monopoly underscores, it is important to focus not just on the
static issues that affect consumers today, but also on how the
mixture of monopoly, competition, and the intellectual property
regime affects the pace and direction of innovation. Schumpeter
emphasized that monopolies would provide both the incentives and the
means for innovation. According to Schumpeter, the fear of losing
monopoly rents would drive a monopolist to continue innovating and
these monopoly rents--or the promise of further monopoly rents
in the future--would provide the financing for these
innovations. Schumpeter's vision contains elements of truth: the
threat of competition may induce monopolists to invest more in
innovation than it otherwise might. But the pace of innovation may
be even higher if the incumbent's monopoly power were curtailed.
Monopoly power could lower the pace of innovation for four reasons.
First, previous innovations are inputs into any subsequent
innovation. Monopoly power can be thought of as increasing the cost
of one of the central inputs into follow-on innovations. Standard
economic theory predicts that as the cost of inputs into any
activity increases, the level of that activity falls.
Second, with more substantial barriers to entry, the threat of
Schumpeterian competition and therefore the incentives to innovate
are diminished. In the extreme case, if a monopoly could ensure that
there were no threat of competition, it would no longer have to
innovate. A monopolist's anticompetitive actions to raise barriers
to entry will reduce its future incentives to innovate; similarly
measures that increase competition will increase the Schumpeterian
incentive.
Third, innovation itself may be misdirected in order to secure a
monopoly by deterring entry and raising rivals" costs. In
operating systems, for example, the development of alternative
proprietary standards and the construction of non-interoperable
middleware are examples of innovations that could potentially
strengthen monopoly power.
Fourth, the incentives of a monopoly to innovate are
limited.\18\ Since a monopolist produces less than the socially
optimal output, the savings from a reduction in the cost of
production are less than in a competitive market. Also, a
monopolist's incentives to undertake research will not lead it to
the socially efficient level. Rather, its concern is only how fast
it must innovate in order to stave off the competition--a level
of innovation that may be markedly lower than socially optimal.
Consider, for example, a simple patent race in which a monopoly
incumbent can observe the position (at least partially) of potential
rivals. The monopolist's incentive is to move out in front of the
potential rivals by just enough to convince them that they cannot
beat the monopolist. Given those beliefs, the rivals do not engage
in research, and the monopolist can then slow down its research to a
lower level (since it no longer faces a viable threat).
---------------------------------------------------------------------------
\18\ Kenneth Arrow (1962), "Economic Welfare and the
Allocation of Resources for Invention." In The Rate and
Direction of Inventive Activity, Princeton University Press,
Princeton: pp. 609-625.
---------------------------------------------------------------------------
In short, monopolization not only harms consumers by raising
prices and reducing output in the short run, but may reduce
innovation in the long run. These long-run harms, which are
especially important in innovative industries, may substantially
exceed the short-run costs to consumers.
V. FACTS AND LEGAL CONCLUSIONS RELATING TO MICROSOFT
In its decision, the Court of Appeals affirmed the District
Court's overall judgment, albeit on a narrowed factual and legal
basis. The Court of Appeals concluded that "Microsoft violated
2 of the Sherman Act by employing anticompetitive means
to maintain a monopoly in the operating system
market." \19\ In addition, the Court of Appeals
overturned the lower court's judgment that Microsoft violated
2 of the Sherman Act by attempting to monopolize the
web browser market. The Court of Appeals remanded the decision on
whether the tying of Internet Explorer to Windows violated
1 of the Sherman Act and indicated that tying should be
evaluated under the rule of reason, rather than under a per se rule;
the U.S. Department of Justice chose not pursue this issue further.
The Court of Appeals also vacated the District Court's Final
Judgment, in part because of the narrowed scope of the judgment on
the conclusions of law.
---------------------------------------------------------------------------
\19\ 253 F.3d at 46
---------------------------------------------------------------------------
The current task in this case is to develop a remedy that
addresses the central finding of the Court of Appeals: the
monopolization of the operating systems market. This judgment was
based on findings of fact and conclusions of law in three areas:
Microsoft has monopoly power in the relevant market, Microsoft
behaved anticompetitively, and Microsoft's anticompetitive behavior
contributed to the maintenance of its monopoly. These are briefly
discussed in turn.
A. Monopoly power
Monopoly power is the power to set prices without regard to
competition. It can be inferred by the combination of market share
in the relevant market and significant barriers to entry. The
District Court found that Microsoft's share of the worldwide market
for Intel-compatible PC operating systems exceeded 90 percent in
every year of the 1990s and has risen to more than 95 percent in
recent years. Microsoft did not dispute these facts, but instead
argued that the relevant market was broader and should include all
platform software (e.g., servers, handheld devices, Macintosh
computers, etc.). The Court of Appeals, however, rejected
Microsoft's attempt to broaden the definition of the market,
agreeing with the District Court that these other platforms were not
"reasonably interchangeable by consumers for the same
purposes." \20\
---------------------------------------------------------------------------
\20\ 253 F.3d at 52, quoting United States v. E.I. du Pont
de Nemours & Co., 351 U.S. 377, 395 (1956).
---------------------------------------------------------------------------
In addition, the Court of Appeals affirmed the finding that
Microsoft's dominant market share was likely to persist. This
conclusion was based on the substantial barriers to entry, including
increasing returns to scale and the applications barrier to entry
discussed above. As a result, according to the Court of Appeals,
"Because the applications barrier to entry protects a dominant
operating system irrespective of quality, it gives Microsoft the
power to stave off even superior new rivals. The barrier is thus a
characteristic of the operating systems market, not of Microsoft's
popularity." \21\
---------------------------------------------------------------------------
\21\ 253 F.3d at 56.
---------------------------------------------------------------------------
B. Anticompetitive behavior
The Court of Appeals found numerous instances where Microsoft
behaved anticompetitively through exclusionary conduct that harmed
consumers, had an anticompetitive effect, and had either no
"procompetitive justification" or an insufficient
"procompetitive justification" to outweigh the harm.
These actions, according to the Court of Appeals, had the intention
and effect of preserving or increasing the applications barrier to
entry. The Court of Appeals upheld most of the general categories of
anticompetitive behavior originally found by the District Court, but
overturned some of the District Court's
[[Page 29072]]
specific findings in these areas. The key instances of this
anticompetitive behavior found by the Court of Appeals include:
. Restrictive Licenses to Original Equipment Manufacturers
(OEMs).\22\ Microsoft's Windows license placed restrictions on OEMs
that limited their ability to change the look of the Windows
desktop, the placement or removal of icons for browsers, or the
initial boot sequence. The result was to increase the user share of
Internet Explorer, not because of its merits, but because Microsoft
limited the crucial OEM channel of distribution for Explorer's chief
rival, Netscape.
---------------------------------------------------------------------------
\22\ The Court of Appeals narrowed the scope of this
anticompetitive behavior slightly, rejecting the District Court's
finding that Microsoft's restrictions on alternative interfaces was
anticompetitive, arguing that the "marginal anticompetitive
effect" of Microsoft's license restrictions was outweighed by
the alternative, the "drastic alteration of Microsoft's
copyrighted work." See 253 F.3d at 63.
---------------------------------------------------------------------------
. Integration of Internet Explorer into Windows.\23\ Microsoft
discouraged OEMs from installing other browsers and deterred
consumers from using them by not including Internet Explorer in the
Add/Remove programs list for Windows 98 and commingling the
operating system and browser code.
---------------------------------------------------------------------------
\23\ The Court of Appeals, however, overruled the District
Court in one instance, finding a sufficient justification for the
fact that in certain situations Internet Explorer will override user
defaults and launch, for example when alternative browsers do not
provide the functionality required by Windows Update. See 253 F.3d
at 67.
---------------------------------------------------------------------------
. Agreements with Internet Access Providers (IAPs).\24\
Microsoft engaged in exclusionary conduct to restrict the second
main distribution channel for Netscape by offering IAPs, including
America Online, the opportunity to be prominently featured in
Windows in exchange for using the Internet Explorer browser
exclusively.
---------------------------------------------------------------------------
\24\ The Court of Appeals found that several inducements
offered by Microsoft to encourage IAPs to use Internet Explorer were
not anticompetitive. See 253 F.3d at 68.
---------------------------------------------------------------------------
. Dealings with ISVs and Apple.\25\ Microsoft further restricted
additional outlets for Netscape by providing ISVs with preferential
access to information about forthcoming releases of Windows 98 in
exchange for their writing to Internet Explorer rather than
Netscape. In addition, Microsoft negotiated with Apple to restrict
the ability of Macintosh consumers to use Netscape in exchange for
continuing to develop and support Microsoft Office for the Macintosh
operating system.
---------------------------------------------------------------------------
\25\ The Court of Appeals overturned the finding that
Microsoft's deals with Internet Content Providers were
anticompetitive. See 253 F.3d at 71.
---------------------------------------------------------------------------
. Polluting Java. The Court of Appeals also found that much of
Microsoft's behavior visa-vis Java was an attempt to limit a threat
to its operating system monopoly rather than benefit consumers.
These illegal actions included entering into contracts requiring
ISVs to write exclusively to Microsoft's Java Virtual Machine,
misleading ISVs into thinking that Microsoft's Java tools were
cross-platform compatible, and forcing Intel to terminate its work
with Sun Microsystems on Java.\26\
---------------------------------------------------------------------------
\26\ See 253 F.3d at 74-78. The Court of Appeals,
however, found a sufficient procompetitive justification for
Microsoft's development of its own version of a Java virtual
machine. See id. at 74-75.
---------------------------------------------------------------------------
C. Effectiveness of anticompetitive behavior in maintaining the
monopoly
Finally, the Court of Appeals found that Microsoft's
anticompetitive efforts to increase usage of Internet Explorer and
Microsoft's Java Virtual Machine at the expense of Netscape and
Sun's Java had the effect of increasing the applications barrier to
entry and thus helping to maintain Microsoft's monopoly of the
market for operating systems for Intel-compatible PCs. This finding
is the crucial link to the economics of the case; a monopoly is
neither automatically permanent nor automatically transient. Rather,
its persistence depends, in part, on the barriers to entry which, in
turn, depend on the actions of the monopolist and the regulation of
the government. This finding is also crucial to the development of
proposed remedies.
Specifically, the Court of Appeals found that although neither
Netscape nor Java posed an imminent threat of completely replacing
all the functions of the operating system (and thus should be
excluded from the definition of the relevant market for the test of
monopoly power), they did pose a nascent threat to Microsoft's
future dominance of the operating system market. Though not part of
the "operating systems market," they clearly affected
the nature of competition in this market. Both Netscape and Java
established Applications Programming Interfaces (APIs) that allowed
developers to write some programs to Netscape and Java. These
programs would then be able to run on any operating system that runs
Netscape or Java. The result would be, at least in one segment of
applications, a dramatic reduction in the applications barrier to
entry. No longer would software developers have to incur additional
costs to run on additional operating systems. As a result, Netscape
and Java had the potential to act as a crucial level of
"middleware" between the operating system and the
programs, and eventually could "commoditize the underlying
operating system," to use the memorable words of then-
Microsoft Chairman and CEO Bill Gates in an internal memo.\27\
---------------------------------------------------------------------------
\27\ United States v. Microsoft Corp., Government Exhibit
20.
---------------------------------------------------------------------------
The Court of Appeals wrote:
We may infer causation when exclusionary conduct is aimed at
producers of nascent competitive technologies as well as when it is
aimed at producers of established substitutes... the question in
this case is not whether Java or Navigator would actually have
developed into viable platform substitutes, but (1) whether as a
general matter the exclusion of nascent threats is the type of
conduct that is reasonably capable of contributing significantly to
a defendant's continued monopoly power and (2) whether Java and
Navigator reasonably constituted nascent threats at the time
Microsoft engaged in the anticompetitive conduct at
issue." \28\
---------------------------------------------------------------------------
\28\ 253 F.3d at 79.
---------------------------------------------------------------------------
The court answered in the affirmative on both issues.
VI. OUTLINE OF AN EFFECTIVE CONDUCT REMEDY
The Court of Appeals was clear that the District Court has
"broad discretion" to fashion a remedy that is
"tailored to fit the wrong creating the occasion for the
remedy." \29\ In the CIS, the Department of Justice
appears to take a minimal view of the goals of a remedy, writing
that it should "eliminate Microsoft's illegal practices,
prevent recurrence of the same or similar practices, and restore the
competitive threat that middleware products posed prior to
Microsoft's unlawful undertakings." \30\ We believe that
the PFJ fails even within the narrow terms that the Department of
Justice set for itself.
---------------------------------------------------------------------------
\29\ 253 F.3d at 105, 107.
\30\ CIS, p. 3.
---------------------------------------------------------------------------
The Court of Appeals appears to provide guidance for a broader
remedy, quoting the Supreme Court in saying that the role of a
remedies decree in an antitrust case is to "unfetter a market
from anticompetitive conduct" and "terminate the illegal
monopoly, deny the defendant the fruits of its statutory violation,
and ensure that there remain no practices likely to result in
monopolization in the future." \31\
---------------------------------------------------------------------------
\31\ 253 F.3d at 103, quoting Ford Motor Co. v. United
States, 405 U.S.562, 577 (1972).
---------------------------------------------------------------------------
One type of potential remedy, imposed by the District Court but
vacated by the Court of Appeals, is structural. Such a structural
remedy would involve breaking Microsoft into two or more companies
with the goal of establishing a new set of incentives that foster
competition. Although potentially disruptive in the short run, the
goal of a structural remedy is to terminate the monopoly and create
the structural conditions to prevent it from re-emerging, without
requiring ongoing regulation or supervision by the court or the
government. Such structural remedies are particularly suitable when
there have been a wide variety of anticompetitive practices in the
past and when changing market conditions (such as innovation)
provide opportunities for new types of anticompetitive conduct in
the future. Structural remedies have the further advantage of
fundamentally altering incentives.
A second type of potential remedy relates to conduct or
licensing, seeking to prevent anticompetitive conduct and foster
competition. A conduct remedy has the advantage of avoiding the
dramatic and potentially deleterious changes associated with a
structural remedy, but suffers from the defect that it is
necessarily complicated and requires at least some involvement of
the court and the government in regulating private enterprise.
Ideally, a conduct remedy would also be structured to affect
incentives: in particular, such a remedy should raise the costs of
acting in an exclusionary manner.
The remainder of this section discusses an outline of the
elements of an effective conduct remedy that seeks to achieve three
goals: creating more choices for consumers, reducing the
applications barrier to entry, and preventing Microsoft from
strengthening
[[Page 29073]]
its operating systems monopoly by bringing new products within its
scope.
A. Creating more choices for consumers
A conduct remedy should empower rival computer companies to
modify their own versions of the computer experience to appeal to
consumers. Not only will consumers benefit from the greater product
choice, but entry and competition may be enhanced as consumers learn
how to interact with a variety of interfaces. At a minimum,
empowering OEMs and possibly ISVs to create more choices for
consumers would involve: (1) the right to modify the desktop, the
start menu, or other fundamental aspects of the computer experience
so that OEMs can market PCs with alternative overall
"looks", different software packages (including
supplementing, replacing, or removing Microsoft middleware), and to
offer lower-priced options with reduced features; (2) adequate
information and technical access to develop applications for, and
even modifications to, functionalities included with Windows, which
would allow ISVs to develop their own bundle of the Windows
operating system plus applications (and/or minus Microsoft
middleware) that could be marketed either to OEMs or directly to end
users; (3) protection from retaliation by Microsoft for engaging in
this conduct; and (4) financial incentives to make changes that
benefit consumers.
B. Reducing the applications barrier to entry
The central goal of Microsoft's illegal conduct was to preserve
and strengthen the applications barrier to entry so that the Windows
operating system continued to be essential to desktop computing. An
effective conduct remedy in this case should take steps to reduce
the applications barrier to entry, by creating conditions conducive
to more competition and by requiring Microsoft to undertake actions
that would lower that barrier. Reducing the applications barrier to
entry is consistent with the findings of the Court of Appeals and is
central to an effective remedy in this case. Although the Court of
Appeals rejected or remanded the District Court's findings of
liability for tying and for monopolization of the browser market,
both of these actions were central to the Court's finding of
liability on the 2 Sherman Act violation for
monopolizing the market for operating systems. The Court found that
Microsoft used commingling of code and other exclusionary measures
to increase the market share for Internet Explorer and reduce the
distribution of Netscape and Java in order to strengthen the Windows
monopoly.
There are two specific aspects to reducing the applications
barrier to entry: (1) encouraging competition in middleware in a
manner that makes it easier for developers to write programs that
run on a variety of operating systems, and (2) requiring Microsoft
to port its dominant applications to alternative operating systems.
C. Preventing Microsoft from strengthening its operating system
monopoly by bringing new products within its scope
Microsoft's ability to leverage its Windows monopoly to control
other aspects of computing that then reinforce the Windows monopoly
is a key part of its strategy of anticompetitive conduct that formed
the foundation for the Court of Appeals ruling. To deal with the
anticompetitive practices that are "likely to result in
monopolization in the future" requires a remedy that addresses
not just areas of past misconduct, but emerging areas as well.
The next section compares the actual agreement to these
elements.
VII. ANALYSIS OF THE PROPOSED FINAL JUDGMENT
The PFJ fails to fulfill even the minimal goals set by the CIS.
It does not address many of the proven illegal practices, including
commingling, polluting Java, and strengthening the applications
barrier to entry more broadly. Furthermore, in our judgment the PFJ
would not "restore the competitive threat that middleware
products posed prior to Microsoft's unlawful
undertakings." \32\ Nothing in the PFJ would be likely
to resuscitate the conditions of greater "divided technical
leadership" that prevailed in the mid-1990s when Netscape and
Java both presented a serious threat to Microsoft, which Microsoft
suppressed through anticompetitive actions.
---------------------------------------------------------------------------
\32\ CIS, p. 3.
---------------------------------------------------------------------------
The PFJ also falls dramatically short of all three elements of
the guidelines that appear to have been endorsed by the Court of
Appeals for the DC Circuit: it allows Microsoft's illegal monopoly
in operating systems to continue and perhaps even be strengthened,
it allows Microsoft to keep the fruits of its statutory violation,
and it leaves intact all of the incentives and many of the
means--for Microsoft to maintain and extend its monopoly in the
future, especially in the important emerging areas of web services,
multimedia, and hand-held computing.
The main impact of the PFJ is to codify much of Microsoft's
existing conduct. Where the agreement limits Microsoft's conduct,
there are often sufficient exceptions, loopholes, or alternative
actions that Microsoft could undertake to make the initial conduct
limits meaningless.
Even where the limits are binding, Microsoft could still flout
the conduct restrictions without fear of a timely enforcement
mechanism. Because the Technical Committee \33\ is essentially
advisory and only has expertise in software design, not law and
marketing, the only enforcement of the PFJ is through a full legal
proceeding--which would provide enough time for Microsoft to
inflict irreversible harm on competition. The time issues are
especially important because in a market characterized by increasing
returns to scale and network externalities, once a dominant position
is established it will be hard to reverse, even if the original
abusive practices are subsequently circumscribed.
---------------------------------------------------------------------------
\33\ The Technical Committee consists of three experts in
"software design and programming"--one appointed by
Microsoft, one by the plaintiffs, and the third by these previous
two. The Committee would have broad access to internal Microsoft
documents, source code, etc. It would be responsible for reporting
any violations of the PFJ to the plaintiffs. They would not,
however, be able to rely on the work of the Technical Committee in
Court proceedings. See PFJ, Section IV.B.
---------------------------------------------------------------------------
The fundamental problem with the agreement is that it does not
change the incentives that Microsoft faces. All of the illegal
anticompetitive actions identified by the District Court and
affirmed by the Court of Appeals were the result of rational
decisions by Microsoft about how best to enhance its value by
maintaining and expanding its monopoly. These same incentives will
persist under the PFJ; given these incentives, it impossible to
foresee--let alone effectively prohibit--the wide variety
of potentially anticompetitive conduct that may result. Indeed, the
reason that many economists have argued for the more drastic
structural settlement (such splitting up Microsoft) is that such
structural changes would alter incentives.\34\ Though the Court of
Appeals has determined that such a remedy might be too drastic, the
imperative in evaluating any remedy is to ascertain its impact on
incentives.
---------------------------------------------------------------------------
\34\ See, for example, Robert Litan, Roger Noll, and
William Nordhaus (2002), "Comment of Robert E. Litan, Roger D.
Noll, and William D. Nordhaus on the Revised Proposed Final
Judgment." United States v. Microsoft Corp., Before the
Department of Justice. The point is simple: now strategy with
respect both to applications and the operating system is designed to
maximize total profits, including the monopoly profits. With
structural separation, applications would be designed and marketed
to maximize their own profits, with no regard to how this might
affect the profitability of the operating system.
---------------------------------------------------------------------------
The following analyzes the details of the PFJ by comparing it to
the principles outlined in the previous section. Our discussion does
not aim to be comprehensive, but instead to focus on areas that
illustrate or represent important economic aspects of the PFJ.
Although the enforcement aspects of the PFJ, in particular the
powers of the Technical Committee, are essential to understanding
the limitations of the agreement, we only briefly discuss these
issues.
A. Creating more choices for consumers
In developing a remedy, the court is well aware of its technical
shortcomings in deciding exactly what should or should not be
included as part of an operating system today--or in the
future. Neither should these determinations be made solely by a
monopolist. These choices should be made by consumers through the
choices they have between different OEMs and ISVs. Stanford Law
Professor Lawrence Lessig described this strategy as follows:
"To use the market to police Microsoft's monopoly... by
assuring that computer manufacturers and software vendors remain
free to bundle and support non-Microsoft software without fear of
punishment by Microsoft." \35\ We agree with Professor
Lessig that this should be among the goals of a final judgment and
that the current agreement is woefully inadequate in meeting this
objective. In our view, this is in fact a minimal objective that
mitigates some of the harms to consumers from Microsoft's monopoly
position but, by itself, would do little to reduce the applications
barrier to entry or facilitate competition in the operating systems
market itself.
---------------------------------------------------------------------------
\35\ Lawrence Lessig (December 12,2001). "Testimony
before the Senate Committee on the Judiciary."
---------------------------------------------------------------------------
As noted above, a remedy that turns this overall strategy into a
reality requires four
[[Page 29074]]
different elements: (1) ensuring that OEMs and potentially ISVs have
the right to modify the desktop, the start menu, or other
fundamental aspects of the computer experience in any way they
choose; (2) ensuring that OEMs and ISVs have adequate information
and technical access to develop applications for, and even
modifications to, Windows; (3) ensuring that they are protected from
retaliation by Microsoft for providing alternatives to consumers;
and (4) ensuring that they have financial incentives to make changes
that benefit consumers. The PFJ is deficient in all four.
1. Ensuring that OEMs and potentially ISVs have the right to
modify fundamental aspects of the computer experience in any way
they choose
The PFJ codifies several new rights for OEMs to modify the
desktop or the computer experience, some of which were already
voluntarily announced by Microsoft on July 11, 2001 and implemented
with the release of Windows XP on October 25, 2001. Specifically,
Section III.C of the PFJ prohibits Microsoft from restricting OEMs
from "Installing or displaying icons, shortcuts, or menu
entries for, any Non-Microsoft Middleware... distributing or
promoting NonMicrosoft Middleware by installing and displaying on
the desktop shortcuts of any size or shape..." among other
actions.
This new required latitude, however, is unduly limited in
several respects:
--New flexibility is quite narrow. OEMs can only modify the
initial boot screen to market IAPs to users, but cannot modify it to
uninstall Microsoft middleware or to market middleware that competes
with Microsoft middleware (Section III.C.5). Nothing in the PFJ
would allow ISVs to acquire licenses to create their own bundles of
Windows plus applications to market to consumers or OEMs, a measure
that could enhance competition by bringing additional participants
with substantial experience in software development into the market.
While the benefits to consumers and competition of allowing ISVs to
acquire such licenses are evident, Microsoft would only be harmed to
the extent that it reduces its monopoly power. There is no other
convincing explanation for these restrictive trade practices.
--It contains several limitations that limit the overall
look of Non-Microsoft Middleware and pace of innovation. For
example, the PFJ requires that the user interface on automatically
launched Non-Microsoft Middleware \36\ must be "of
similar size and shape to the user interface displayed by the
corresponding Microsoft Middleware Product", can only be
launched when a similar Microsoft product would have been launched,
and Microsoft can impose non-discriminatory bans on icons (Section
III.C.3). In addition to the fact that these limitation are
frivolous, asymmetric, and would seem to serve no purpose other than
restricting competitive threats--no such limitations apply to
Microsoft--they could also have a severe impact in limiting
competition. Specifically, it allows Microsoft to control the pace
of innovation in the computer experience, letting Microsoft delay
the effective launch of a new type of product until it is ready to
compete in that area. Thus both competition and innovation may be
impeded.
---------------------------------------------------------------------------
\36\ As defined in Section VI.M.
---------------------------------------------------------------------------
It is unnecessarily delayed. Specifically, Section III.H gives
Microsoft up to 12 months or the release of Service Pack 1 for
Windows XP, whichever is sooner, to provide end users and OEMs a
straightforward mechanism to remove icons, shortcuts, or menu
entries for Microsoft Middleware Products or to allow OEMs or end
users to designate alternative Non-Microsoft Middleware
Products \37\ to be invoked by the Windows operating system in
place of Microsoft Middleware Products.\38\ There is certainly no
economic or legal justification for this delay and our understanding
is that it is technically feasible to carry out these changes in a
few weeks time, as demonstrated by Microsoft's July 11, 2001
voluntary agreement to implement elements of this provision. As we
have emphasized, there can be significant long-run consequences for
competition from even short delays.
---------------------------------------------------------------------------
\37\ As defined in Section VI.N.
\38\ As defined in Section VI.K.
---------------------------------------------------------------------------
Microsoft could encourage users to undo changes after 14 days.
The value of the new contractual freedoms is limited by Microsoft's
ability to encourage the user to undo all OEM changes after 14 days
by allowing a user-initiated "alteration of the OEM's
configuration... 14 days after the initial boot up of a new Personal
Computer." (Section III.H.3) This provision, in effect, would
allow Microsoft to present a message to end users (e.g.,
"Press 'yes" to optimize your computer for
multimedia") that could bias choices toward Microsoft
products, regardless of what the OEM had chosen. This provision
could therefore greatly reduce the scope and value of the changes
that OEMs make.\39\
---------------------------------------------------------------------------
\39\ This provision would allow Microsoft to run the
"Desktop Cleanup Wizard" that removes unused shortcuts
from the desktop in a non-discriminatory manner. Nothing in our
reading of the language of Section III.H.3, however, would limit the
power of Microsoft to remove all user access to non-Microsoft
middleware or restore access to Microsoft middleware.
---------------------------------------------------------------------------
2. Ensuring that OEMs and ISVs have adequate information and
technical access to develop applications for, or even modifications
to, Windows
The right to make modifications to Windows will only work
effectively if OEMs and ISVs have the knowledge to exercise this
right. Microsoft currently releases an enormous quantity of
information on the Windows operating system and its APIs, through
the Microsoft Developer Network (MSDN) and other means. Indeed, the
indirect network externalities supporting the Windows monopoly
provide a strong incentive for Microsoft to ensure that as many
applications as possible run well on its system. But Microsoft also
has an incentive to bolster its operating system monopoly by
selectively withholding timely information to impede or delay the
development of products that threaten to reduce the applications
barrier to entry.\40\ In addition, Microsoft has also required
anticompetitive actions in exchange for information, as in the
"first wave" agreements found illegal by the Court of
Appeals.\41\
---------------------------------------------------------------------------
\40\ For example, the District Court found that Microsoft
withheld the "Remote Network Access" API from Netscape
for more than three crucial months in mid-1995. Findings of Fact,
90-91, 84 F. Supp. 2d at 33.
\41\ These agreements, which were entered into between the
Fall of 1997 and Spring of 1998 between Microsoft and several ISVs,
provided preferential early access to Windows 98 and Windows NT
betas and other technical information in exchange for using Internet
Explorer as the default browser. See See 253 F.3d at 71-72.
---------------------------------------------------------------------------
The PFJ requires disclosure of "the APIs and related
Documentation that are used by Microsoft Middleware to interoperate
with a Windows Operating System Product" (Section III.D) and
specified Communications Protocols (Section III.E).
These requirements, however, are deficient in several ways:
Windows APIs are not covered. In particular, the PFJ does not
require the disclosure of the APIs used by Windows. Although
Microsoft already has an incentive to disclose Windows APIs, there
are circumstances where delay could be more profitable. The
consequences of this omission are aggravated by the definition in
Section VI.U: "the software code that comprises a Windows
Operating System Product shall be determined by Microsoft in its
sole discretion." Thus, as middleware gets blended in the
operating system, the scope of disclosures could be narrowed.
Internet Explorer and other middleware APIs are not covered.
Furthermore, the agreement does not require the disclosure of the
APIs used by Internet Explorer. Although the government did not
prove that Microsoft was guilty of monopolizing the browser market,
dominating this market played a key role in shoring up its monopoly
in the operating systems market. As a result, requiring disclosure
of the APIs for Internet Explorer and other middleware could play a
role both in denying the fruits of that monopoly and reducing this
barrier to entry in its operating systems market.
Definitions could limit disclosure even further. The scope of
APIs required to be disclosed under the agreement could be
potentially limited even further by the control Microsoft has over
what is "Microsoft Middleware" and what is the
"Windows Operating System Product."
Additional loopholes further limit disclosure and ability of
non-Microsoft middleware to fully interoperate with Windows. Section
III.J. 1 provides a substantial loophole that exempts from the
disclosure requirements anything that "would compromise the
security of a particular installation,... digital rights management,
encryption or authorization systems..." These are all very
important technologies for Windows Media Player, Passport, the
Internet Explorer browser, and any of the many programs that rely
increasingly on security and encryption. In addition to giving
Microsoft substantial discretion and blurring the disclosure
[[Page 29075]]
requirements further, these exceptions would make it impossible for
competitors to design middleware that fully interoperated with the
Windows operating system, leaving certain features only accessible
to Microsoft middleware.
Disclosures are not timely. The disclosures are not very timely,
allowing Microsoft enough time to ensure that its products--and
products by favored OEMs and ISVs enjoy a substantial "first
to market" benefit in taking advantage of the functionality of
the operating system. Microsoft has up to 9-12 months to
disclose the APIs and communications protocols. In the case of a new
version of the Windows Operating System Product, the PFJ bases the
timing of the disclosure on the number of beta testers, effectively
giving Microsoft substantial discretion over the timing of the
required disclosures through its definition of the term "beta
tester" and its control over their number. (Sections III.D and
VI.R)
Microsoft could cripple rival products. The PFJ does nothing to
prevent Microsoft from deliberately making changes in Windows with
the sole or primary purpose of disabling or crippling
competitors" software products.
3. Ensuring that OEMs and ISVs are protected from retaliation by
Microsoft for providing alternatives to consumers
The right to make alterations to the Windows desktop will only
be effective if companies are protected from retaliation for
exercising it. The PFJ provides some protection against retaliation
(Section III.A) and requirements for uniform licensing and pricing
for Microsoft Windows (Section III.B). The protections, however, are
only partial, in that they omit several important behaviors, still
leave substantial scope for Microsoft to retaliate, and contain a
very large loophole.
First, the prevention against retaliation only applies to a very
specific set of actions that are specified in the PFJ, such as
altering the icons on the desktop or promoting an IAP in the initial
boot sequence. This rule does not apply to other actions by OEMs,
such as the inclusion of third party software that does not fall
under the definition of Non-Microsoft Middleware.
Second, there may still be some scope for discrimination and
retaliation. Section III.B.3 of the PFJ explicitly gives Microsoft
the right to use "market development allowances," for
example to provide a pre-license rebate to selected OEMs on the
basis of potentially ambiguous joint ventures. Although these
incentives would have to be offered uniformly, there still could be
some scope for defining them in an exclusionary manner. Furthermore,
the relationships between Microsoft and computer companies are very
complex and multifaceted, leaving substantial scope for retaliation
in aspects not covered by the PFJ, including potentially the pricing
of Microsoft Office and the server business.
Finally, Section III.A allows Microsoft to terminate the
relationship with an OEM without cause and within a brief span of
time simply by delivering two notices of termination. With no ready
substitutes for Windows available, this power would give Microsoft
substantial leverage in its relationships with OEMs. Although the
OEM would have the option of litigating Microsoft's denial of
a Windows license, the text of Section III.A and the lack of
"bright line" rules in the PFJ would make this
litigation costly and uncertain--and thus an imperfect means of
protection against this threat.
4. Ensuring that OEMs have financial incentives to make changes
that benefit consumers Even if the three previous conditions were
met, they would be economically irrelevant if OEMs did not have
financial incentives to take advantage of the new licensing
freedoms. The production of PCs is a highly competitive industry
with very low profit margins.\42\ PCs are virtually a commodity that
can be priced based on a limited set of characteristics like
processor speed and hard drive size. All of the steps allowed by the
PFJ--including installing nonMicrosoft middleware or removing
user access to Microsoft middleware--entail higher costs for
the OEMs both in the costs associated with the initial configuration
of the system and in the added costs of end user support.\43\ In
addition, OEMs may perceive that Microsoft would take additional
steps to raise their costs through forms of retaliation either
permitted by the PFJ or imperfectly banned. These costs may explain
why, to our knowledge, no major computer manufacturer has yet taken
Microsoft up on its July 11, 2001 offer to remove access to
Microsoft middleware and replace it with non-Microsoft
middleware.\44\
---------------------------------------------------------------------------
\42\ For example, the Washington Post recently noted that
profit margins are in "single digits." See Rob Pegoraro
and Dina El Boghdady (January 20, 2002), "Building Creativity
Into the Box" Washington Post.
\43\ In the Microsoft trial numerous industry witnesses
testified to the user confusion and added support costs associated
with having alternative browsers pre-installed on a computer. See
253 F.3d at 71-72.
\44\ Microsoft Press Release (July 11, 2001),
"Microsoft Announces Greater OEM Flexibility for
Windows."
---------------------------------------------------------------------------
As a result, the key source of greater competition and consumer
choice in the computer experience--OEMs--would have
limited economic basis for promoting such choice. In part this is
because the value of some of the new freedoms obtained by the OEMs
in the PFJ are limited by loopholes. For example, by allowing
Microsoft to bar OEMs from marketing non-Microsoft middleware in the
initial boot sequence, the PFJ removes one source of revenue and
choice. In addition, allowing Microsoft to encourage users to
"voluntarily" revert to the Microsoft-preferred
configuration of icons, the Desktop, and the Start Menu after 14
days may reduce substantially the value of this screen "real
estate." As a result, the PFJ precludes some of the principal
means by which OEMs could be remunerated for providing additional or
alternative functionality desirable to consumers.
The more fundamental problem is that OEMs continue to be
required to license a version of Windows that includes middleware
like Internet Explorer, Windows Media Player, and Windows Messenger.
By not requiring Microsoft to sell a cheaper, stripped-down version
of the operating system--excluding many of these added
features--the PFJ in effect would require OEMs to pay
twice--once for Microsoft's version of the product (as bundled
into the price of Windows) and once for the alternative. Such
bundling is a particularly invidious way of undermining competition.
In effect, it implies that the marginal cost of any item in the
bundle is zero, making competitive entry, even for a superior
product, impossible. The fact that such entry has occurred is
testimony to the superiority of the rival products--consumers
are willing to pay substantial amounts for the alternatives. In
addition, forced bundling can have adverse effects on consumers,
because it uses up memory and storage space, and there is always the
possibility that the commingled code will interfere with the
performance of other applications.
In summary, under the PFJ, OEMs are not provided the rights,
means, protections, or incentives to create alternative choices for
consumers. As a result, the lynchpin of the PFJ's strategy for
promoting competition would be greatly attenuated.
B. Reducing the applications barrier to entry
The applications barrier to entry was central to the Court of
Appeals" understanding of this case. It is the principal
barrier to entry that protects Microsoft's overwhelming dominance of
the market for operating systems for Intel-compatible PCs.
Furthermore, the court found that Microsoft engaged in illegal acts
to increase the applications barrier to entry, principally by
suppressing Netscape and Java at the expense of Internet Explorer
and Microsoft's version of Java. Thus, any remedy that is
"tailored to fit the wrong creating the occasion for the
remedy" must necessarily take affirmative steps to reduce the
applications barrier to entry and also prevent Microsoft from
engaging in anticompetitive actions to increase this barrier.
Unfortunately, the PFJ barely addresses this central issue.
The following discusses two key aspects of the applications
barrier to entry: the use of anticompetitive means to reduce the
market share of rival middleware (and thus its potential to reduce
the cost of porting applications to different operating systems) and
the use of decisions about Microsoft Office to influence the
prospects of rival operating systems.
1. Middleware and the applications barrier to entry
The CIS states that under the PFJ, "OEMs have the
contractual and economic freedom to make decisions about
distributing and supporting non-Microsoft software products that
have the potential to weaken Microsoft's personal computer operating
system monopoly without fear of coercion or retaliation by
Microsoft." \45\ Even if the PFJ did give OEMs this
contractual and economic freedom without fear of retaliation, and
the previous subsection expressed severe doubts on this point, it
still would do little if anything to weaken Microsoft's operating
system monopoly.
---------------------------------------------------------------------------
\45\ CIS, p. 25.
---------------------------------------------------------------------------
Enhancing competition by allowing OEMs and ISVs to provide
consumers with a greater
[[Page 29076]]
variety of choices, the subject of the previous subsection, is in
some sense literally superficial. It involves the ability of firms
in the computer industry to change the outer appearance of a
computer and the way it is perceived and used by users, including
the ability and ease of accessing programs that are included with
the Windows operating system or added by the OEM or end user. The
issues raised by the applications barrier to entry go deeper, to the
underlying code in Windows. In particular, although the PFJ allows
end users or OEMs to remove user access to Microsoft Middleware, it
also allows Microsoft to leave in place all of the programming
underlying this middleware. This code could still be accessed by
other programs that write to the APIs exposed by the middleware.
The Court of Appeals explicitly rejected Microsoft's explanation
for commmingling the code of Windows 98 and Internet Explorer,
concluding that it deterred users from installing Netscape, had no
substantive purpose, and thus that "such commingling has an
anticompetitive effect." \46\ Despite this strong
finding, no provision in the PFJ addresses this issue.\47\
---------------------------------------------------------------------------
\46\ See 253 F.3d at 66.
\47\ The Court of Appeals rejected, per curiam,
Microsoft's petition for a rehearing on this point. Order (DC Cir.
Aug. 2,2001).
---------------------------------------------------------------------------
Netscape and Java represented a very rare challenge to
Windows--they offered the opportunity to develop middleware
that would allow a wide range of applications to be costlessly
transferred between different systems. It is difficult to imagine
when, if ever, there will be a challenge of this magnitude again.
Nonetheless, some existing middleware--and future middleware
that we may not even be able to forecast today--will continue
to present challenges to Windows. For example, there is still
substantial competition in the market today for multimedia players,
with Windows Media Player, RealNetworks RealOne player, and Apple's
QuickTime, among others, all offering different versions of similar
functionality.
The treatment of middleware is crucial because the market for
middleware, like the market for operating systems, is subject to
substantial network externalities. These externalities mean that the
desirability of a middleware package increases as the installed user
base increases. As with operating systems, such externalities arise
for direct reasons (e.g., users can share files in a particular
media format) and indirect reasons (writing a program to different
middleware, so the dominant middleware will have the most programs
associated with it). With regard to indirect network effects, the
key point is that the installed base is not the number of computers
with shortcuts to the given middleware, but the number of computers
with the underlying code permitting the middleware to be invoked by
a call from another program. A programmer that wanted to develop,
for example, an interactive TV program could still use Windows Media
Player regardless of whether or not an OEM or end user had removed
the icons or shortcuts that allow easy user access to this program.
By providing no means for OEMs or end users to undo the
commingling of code that ties Microsoft middleware to the operating
system, the PFJ ensures that Microsoft middleware will have an
installed base, in the relevant sense, of nearly the entire PC
market. As a result, programmers will find it cheaper to write to
Microsoft middleware rather than to rival programs. In this case,
ubiquity could trump quality--because the size of a
middleware's installed base could be more important than the quality
of the middleware program. Microsoft middleware thus increases the
applications barrier to entry in the same manner that promoting
Internet Explorer and restricting the distribution of Netscape do.
By allowing Microsoft to continue to commingle the code for
middleware and its operating system, and preventing OEMs or end
users from making real choices, the PFJ contributes to Microsoft's
ability to restrict the market share of its rivals in neighboring
"layers" to the operating system, reducing the main form
of potential future competition at "layer boundaries."
2. Microsoft Office and the applications barrier to entry
As noted above, in the mid-1990s, Microsoft Windows was
compatible with more than twenty times as many programs as IBM's OS/
2 Warp. This offers a dramatic example of the applications barrier
to entry. One crucial feature of Microsoft is that in addition to
producing the Windows operating system, it is also a leader in many
other applications. Network externalities work here to help create
and maintain market dominance. Thus, for a rival operating system to
succeed it would need not only to persuade "neutral"
software companies to write to it, but also persuade Microsoft
itself to port some of its leading applications to the operating
system. To the degree that Microsoft produces leading or essential
applications, they can use their refusal to port these applications
to reinforce their Windows monopoly.
One application, in particular, is especially important to
users: Microsoft Office and its associated programs, including Word
(for word processing), Outlook (for e-mail and scheduling), Excel
(for spreadsheets), and PowerPoint (for presentations). Indeed,
Microsoft Office has about 95 percent of the market for business
productivity suites.\48\
---------------------------------------------------------------------------
\48\ Richard Poynder (October 1, 2001). "The Open
Source Movement." Information Today, 9:18.
---------------------------------------------------------------------------
The Court of Appeals affirmed the District Court's finding that
the desire by Apple to ensure that Microsoft continued to maintain
and update Mac Office was central to its motivation to enter into an
illegal, anticompetitive deal with Microsoft to suppress Netscape
and promote Internet Explorer. In addition, Microsoft does not
currently have a version of Office that operates on Linux, the
primary alternative to Windows in the PC operating system market.
Withholding or simply threatening to withhold Microsoft Office from
other operating systems is a powerful way in which Microsoft can use
anticompetitive means to reduce the desirability of rivals while
also extracting concessions or exchanges that help support the
Windows monopoly of PC operating systems.
The PFJ, however, does not address any issues relating to the
pricing, distribution, or porting of Microsoft Office. This
considerable loophole has been used by Microsoft in the past. In the
future, Microsoft will have the same incentives to use this loophole
again. In addition, it may be necessary to examine additional
Microsoft applications that can be used to reinforce the Windows
monopoly. Given the difficulty of undoing a monopoly of this sort,
once established, it is particularly appropriate to reach beyond
remedies that are narrowly circumscribed.
C. Preventing Microsoft from strengthening its operating system
monopoly by extending it to encompass additional products
The Court is charged with fashioning a remedy that
"ensure[s] that there remain no practices likely to result in
monopolization in the future." Some of the most important
newly emerging areas are multimedia, networking, web services, and
hand-held computing. Microsoft is already making substantial
investments in these areas with its .NET strategy, Microsoft
Passport, MSN, Windows Messenger, Windows Media Player, and the
Pocket PC operating system. The recently released Windows XP is
characterized by substantial integration between all of these
features; indeed the seamless integration is one of Microsoft's
chief selling points for Windows XP. Microsoft has marketed Windows
XP (standing for "experience") on the basis of its
seamless integration between the Internet, multimedia, and the
computer. For example, on the day it was released, a Microsoft press
release announced, "Windows XP Home Edition is designed for
individuals or families and includes experiences for digital photos,
music and video, home networking, and
communications." \49\
---------------------------------------------------------------------------
\49\ Microsoft Press Release, "Windows XP is
Here!" 10/15/01.
---------------------------------------------------------------------------
Like Internet Explorer, these new areas present new
opportunities for Microsoft to leverage its monopoly in the
operating system to dominate other markets. In addition, Microsoft
could use its strong or dominant position in these new markets to
erect new barriers to entry that prevent potential competitors from
offering products and services with part or all of the functionality
provided by Windows. For example, if Passport is successful then a
rival operating system would not just need to persuade other
developers to write for it, but would also need to develop its own
version of Passport and convince numerous e-commerce sites to use
it. If the rival operating system failed in any of these steps, its
attempts to establish itself could be seriously curtailed. The PFJ,
however, does not address any aspects of these important emerging
barriers to entry.
VIII. STEPS TO IMPROVE THE PROPOSED FINAL JUDGMENT: THE
LITIGATING STATES" ALTERNATIVE
The goal of this Declaration is to explain why we believe that
the PFJ is deficient and why the Court should exercise its
discretion to fashion a remedy in this case that would promote
competition and benefit consumers.
[[Page 29077]]
We do not propose an alternative remedy or provide an exhaustive
analysis of any other proposals. Our analysis of the shortcomings of
the PFJ, however, can be illustrated and strengthened by a selective
comparison of some of the provisions in the PFJ with the proposal
transmitted to the court by the nine litigating States and the
District of Columbia on December 7, 2001.\50\
---------------------------------------------------------------------------
\50\ United States v. Microsoft Corp., "Plaintiff
Litigating States" Remedial Proposals," in the U.S.
District Court for D.C, December 7, 2001.
---------------------------------------------------------------------------
Many of the issues in the "Plaintiff Litigating
States" Remedial Proposals" are technical and involve
loopholes, some of which were discussed above including stronger
anti-retaliation provisions and a broader definition of middleware
that could not be manipulated by Microsoft. In addition, this
proposed remedy makes an important change in enforcement: it
proposes a Special Master, rather than requiring new legal
proceedings to enforce the judgment. None of these important issues
are discussed here. Instead, we focus on selected areas in which the
litigating States" proposal illustrates some of the principal
economic points identified in the preceding analysis.
A. Fostering competition through OEMs and reducing the
applications barrier to entry The litigating States proposal would
require Microsoft to license a cheaper version of Windows that does
not include commingled code from added middleware.\51\ In addition,
the proposal would require Microsoft to continue to license older
versions of its operating system without raising its prices. This
would have two effects. First, it would more effectively promote
competition and consumer choice by allowing OEMs to ship computers
with a wide range of alternative middleware, thereby allowing
consumers to choose between different versions or different price-
feature combinations. The lack of financial incentives for OEMs to
take advantage of the more liberalized licensing rules is one of the
principal deficiencies in the PFJ.
---------------------------------------------------------------------------
\51\ The Court of Appeals overturned the District Court,
finding that Microsoft could not be held liable for the fact that in
certain situations, like updating Windows or accessing help files,
Internet Explorer overrides the user's default browser settings and
opens automatically. This implies that the complete removal of HTML-
reading software is impossible. But Windows could be shipped with,
for example, a stripped-down browser that performs essential system
functions. Most of the functionality of Internet Explorer, however,
is not necessary for the examples Microsoft invoked. This is
analogous to the way in which Windows is shipped with a stripped-
down text editor, Notepad, but not with a full-fledged word
processor.
---------------------------------------------------------------------------
Moreover, such a provision would provide Microsoft with better
incentives; only if it produced an operating system which performed
substantially better would it be able to sell its new releases. It
would at least attenuate its ability to use new releases as a way of
extending its market power. Some have advocated even stronger
measures to ensure Microsoft faces proconsumer, pro-competition
incentives, including requiring Microsoft to release all of its
Windows source code and requiring the free distribution of its
operating system after 3 to 5 years. Second, this provision would
directly address the Court of Appeals finding that Microsoft's
commingling of code was anticompetitive. By disentangling the
middleware from the operating system, this proposal would allow
greater competition in middleware--and thus ultimately in
operating systems--by reducing the network externalities that
benefit Microsoft middleware at the expense of potentially superior
products.
B. Internet Explorer browser open source and Java distribution
Two of the fruits of Microsoft's monopolization of the operating
systems market are the dominance of the Internet Explorer browser
and the destruction of Java as a viable competitor. The
anticompetitive measures that helped achieve these goals protected a
crucial "chink in the armor" of the Windows operating
system. The PFJ does nothing to "deny the defendant the fruits
of its statutory violation." \52\ Furthermore, it does
not enhance the ability of competitors to interoperate with Internet
Explorer because it includes no disclosure requirement for the
Internet Explorer APIs.
---------------------------------------------------------------------------
\52\ 253 F.3d at 103, quoting United States v. United Shoe
Mach. Corp., 391 U.S. 244, 250 (1968).
---------------------------------------------------------------------------
The litigating States propose to remedy these deficiencies by
requiring Microsoft to publish the source code and APIs for Internet
Explorer and freely license them to competitors. In addition, their
proposal would require Microsoft to distribute a Sun-compatible
version of Java Virtual Machine with all future operating systems.
The result would be to decrease the applications barrier to entry
and promote competition.
C. Cross-platform porting of Office
As discussed in the previous section, Microsoft Office is one of
the most crucial applications for many users. The existence of this
application for a particular operating system is one key factor in
the demand for the operating system. The litigating States"
proposal would remove the ability of Microsoft to either threaten to
withhold Office or actually withhold Office by requiring Microsoft
to continue to port Office to Macintosh. In addition, the proposal
would require Microsoft to auction off licenses to ISVs that would
provide them with the entire source code and documentation for
Office in order for them to port the product to alternative
operating systems. Although we draw no conclusions about the
particular rules proposed by the litigating States, this proposal
would clearly reduce Microsoft's ability to deliberately raise the
applications barrier to entry.
D. Mandatory disclosure to ensure interoperability
The PFJ requires some disclosure to ensure that Microsoft is not
able to withhold certain information to illegally benefit Microsoft
Middleware at the expense of Non-Microsoft Middleware. The
disclosures are limited in scope and timing. The litigating
States" proposal is substantially broader.
Of particular importance, the litigating States" proposal
recognizes that "nascent threats to Microsoft's monopoly
operating system currently exist beyond the middleware platform
resident on the same computer" and thus the States"
proposal requires timely disclosure of technical information to
facilitate "interoperability with respect to other
technologies that could provide a significant competitive platform,
including network servers, web servers, and handheld
devices." \53\ In doing this, the proposal would reduce
the ability of Microsoft to use its dominant position in operating
systems to eliminate emerging threats at the boundary of this
"layer" of computing.
---------------------------------------------------------------------------
\53\ Litigating States, pp. 10-11.
---------------------------------------------------------------------------
IX. Conclusion
The Revised Proposed Final Judgment agreed to by the U.S.
Department of Justice, the Attorneys General of nine States, and
Microsoft Corporation is critically deficient. The overall aims of
the PFJ are laudable--to increase competition and reduce
Microsoft's ability to maintain its monopoly at the expense of
consumers. But the PFJ will not succeed in achieving these goals. It
does not change any of the incentives faced by Microsoft to
undertake anticompetitive actions. It restrains these
anticompetitive actions only with highly specific and exception-
ridden conduct requirements. And it has an insufficient enforcement
mechanism.
The interest of consumers in a greater range of choices, lower
prices, and greater innovation would be served by rejecting the PFJ
and replacing it with a more effective conduct remedy. A remedy for
this case should recognize that the monopoly power created by
Microsoft's past anticompetitive, illegal practices is likely to
persist, and that it will therefore be likely to continue to enjoy
the fruits of its illegal behavior, unless there are far stronger
remedies than those in the PFJ. The new remedy should change
Microsoft's incentives. It should restrict Microsoft's ability to
repeat its past, or develop new, anticompetitive practices. It
should provide OEMs and ISVs with the means and incentives to
stimulate genuine competition in the provision of platforms. And it
should take whatever steps are possible to reduce the applications
barrier to entry so that there is greater scope for genuine
competition in the market for PC operating systems.
I, Joseph E. Stiglitz, declare under penalty of perjury that the
foregoing declaration is true and correct. Executed on January 28,
2002.
Joseph E. Stiglitz
I, Jason Furman, declare under penalty of perjury that the
foregoing declaration is true and correct. Executed on January 28,
2002.
Jason Furman
Joseph E. Stiglitz
Columbia University
Uris Hall Room 814
New York, NY 10027
212-854-0671
jes322 @ columbia.edu
Jason Furman
Yale University
28 Hillhouse Ave. Rm 311
New Haven, CT 06511
203-432-3054
jason, furman @ yale.edu
[[Page 29078]]
MTC-00030613
Comments To The Revised Proposed Final Judgment In United States
v. Microsoft Corporation, No. 98-1232
State of New York, et al. v. Microsoft Corporation, No.
98-1233
Submitted By Palm, Inc.
Pursuant To The Tunney Act, 15 U.S.C. 16
January 28, 2002
TABLE OF CONTENTS Page
I. Summary Of Objections 1
II. Background On Palm And Its Interest In This Matter 4
III. The RPFJ's Deficiencies 5
A. Under The RPFJ, Microsoft Will Obstruct The Critical
Interoperability Between Microsoft's Software Products And Non-
Microsoft Products 5
B. The RPFJ's Toothless Definitions Will Enable Microsoft To
Break Interoperability Without Recourse 8
C. The RPFJ Does Not Stop Microsoft From Using Its Control Over
Development Tools To Protect The Applications Barrier To Entry 11
D. The RPFJ Does Not Prohibit Microsoft From Unlawfully Bundling
Its Products Or Using Anticompetitive Pricing Schemes 12
E. The RPFJ Does Not Remedy Microsoft's Ability To Use The
Installation Of Drivers For Peripheral Hardware As A Chokehold 12
F. The RPFJ Does Not Remedy Microsoft's Ability To Use Internet
Explorer As A Chokehold 13
G. The RPFJ's Disclosure Delays Render It Ineffective 13
H. The RPFJ Does Not Restrict Knowing Interference With
Performance 14
I. The RPFJ Fails To Provide OEMs And Consumers The Flexibility
Necessary To Facilitate Competition 14
J. The RPFJ's Enforcement Provisions Are Insufficient 15
IV. Conclusion 16
I.SUMMARY OF OBJECTIONS
Pursuant to the Antitrust Procedures and Penalties Act, 15
U.S.C. � 16(b)-(h), Palm, Inc. ("Palm") hereby
submits its comments and objections to the Revised Proposed Final
Judgment ("RPFJ") filed by Plaintiffs United States of
America ("DOJ") and the States of New York, Ohio,
Illinois, Kentucky, Louisiana, Maryland, Michigan, North Carolina
and Wisconsin, and Defendant Microsoft Corporation
("Microsoft") on November 6, 2001.
Palm, a leader in mobile computing,\1\ respectfully submits that
the RPFJ will not ensure vigorous competition in this important
industry. Microsoft is already engaging in actions designed to
unfairly extend its personal computing operating system ("PC
OS") monopoly into the mobile computing market by eliminating
competition and preventing free customer choice.\2\ The RPFJ fails
to address Microsoft's current actions, and will not constrain it
from repeating in the mobile computing market the same tactics it
used against Netscape and Java.
---------------------------------------------------------------------------
\1\ Mobile computers are small computers designed to be
carried by the user in a pocket or purse. They perform a wide
variety of tasks. Mobile computers include handheld computers and
the new, emerging category of smart phones (cell phones that have
handheld computing functionality built into them). Mobile computers
are also sometimes referred to as Personal Digital Assistants
("PDAs").
\2\ Microsoft, of course, also manufactures the Pocket PC
operating system ("Pocket PC OS") a rival OS to the Palm
operating system ("Palm OS").
---------------------------------------------------------------------------
Mobile computing is an emerging threat to Microsoft's PC OS
business. Handhelds are already displacing some notebook and desktop
PCs for storing, accessing and managing information, including
Interact information.\3\ That competition will increase over time.
If an open competitive environment exists, the convenience and
simplicity of handheld devices will increasingly cause an evolution
away from desktop and laptop PCs to handheld computers for accessing
and managing information. The growth of handheld devices not based
on Microsoft technology is a threat to Microsoft's PC OS monopoly,
as were the competitive inroads being made by non-Microsoft Internet
browsers.
---------------------------------------------------------------------------
\3\ As Microsoft admitted in its filings before the Court:
"...[A] range of devices other than personal computers such as
handheld computers, television set-top boxes and game machines are
becoming increasingly capable, providing functionality that
consumers used to obtain exclusively from personal computers."
(Defendant Microsoft Corporation's Revised Proposed Findings of
Fact, at 5 (submitted Sept. 10, 1999) (emphasis supplied)). See also
id. at 227, 230 and 235.
---------------------------------------------------------------------------
Microsoft has the ability and incentive to take additional
actions to forestall competition in the handheld industry. Palm's
products--both the software products it manufactures as an
independent software vendor ("ISV") and the hardware
products it manufactures as an independent hardware vendor
("IHV")--must be compatible with PCs and the
software that runs on them. Microsoft has a unique position as the
PC OS monopolist and also the dominant vendor of related software
products such as the Internet Explorer browser, the Office
productivity suite, the Outlook e-mail and calendaring program, the
Exchange server software and the Visual Studio developer tools.
Palm's ability to offer innovative handheld solutions to consumers
is, in significant part, reliant on full and timely interoperability
with Microsoft's software products. Absent compatibility, consumers
will be unable to obtain a fully functional handheld running
anything other than Microsoft software.
As noted above, Microsoft is already taking actions to forestall
competition in the mobile computing industry. In particular:
1. Microsoft has refused Palm access to information and software
interfaces necessary to enable Palm to make its products
interoperable with certain Microsoft products and technologies,
including some elements of Microsoft's .NET software;
2. Microsoft has prevented Palm from working with Microsoft's
software development tools (Microsoft Visual Studio);
3. Microsoft has refused to make Microsoft Internet Explorer
operate on Palm OS handhelds; and
4. In exchange for addressing some of these issues, Microsoft
has attempted to coerce Palm into deploying Microsoft .NET software
on Palm handhelds under terms that would put the Palm OS business at
a prohibitive disadvantage.
Microsoft has also already exhibited its intent to foreclose
companies such as Palm by breaking interoperability with its
products. Bill Gates himself directed his staff to alter Microsoft
products to ensure that Microsoft's "PDA will connect to
Office in a better way than other PDAs even if that means changing
how we do flexible schema in Outlook and how we tie some of our
audio and video advanced work to only run on our PDAs."
(Remedy Exhibit GX1 attached to this submission). As the DOJ argued
previously:
... on July 11, 1999, less than thirty days after the conclusion
of the trial in this action, Bill Gates wrote an e-mail directing
that Microsoft redesign its software in order to harm competitors.
This time, the products in question were the Personal Digital
Appliances that Microsoft heralded at trial as one of the products
that might someday undo its monopoly.
Plaintiffs' Memorandum In Support Of Proposed Final
Judgment, filed April 28, 2000 (corrected as of May 2, 2000) (citing
Remedy Exhibit GX1). Microsoft's anticompetitive incentive is
obvious. Its anticompetitive conduct will enable it to monopolize
the emerging handheld industry and, at the same time, eliminate the
threat handhelds pose to its PC OS monopoly.
As delineated more fully below, it is Palm's belief that the
RPFJ, if adopted, would fail to protect competition in the handheld
industry for at least the following reasons:
1. It does not appear even to attempt to address handheld
industry competition; 2. It enables Microsoft to withhold interface
information that is critical to the competitiveness of Microsoft's
rivals such as Palm;\4\
---------------------------------------------------------------------------
\4\ As discussed below, this "information"
could come in the form of APIs, data formats, commands and
protocols.
---------------------------------------------------------------------------
3. It enables Microsoft to continue to disadvantage ISVs and
IHVs that work with companies other than Microsoft, especially given
the network effects that pervade this industry;
4. It fails to ensure that Microsoft will not use distributed
Internet-based (.NET) applications to eradicate the competitive
threat of non-Microsoft platforms;
5. It either does not define or improperly defines key terms of
the RPFJ, thereby enabling Microsoft to circumvent the RPFJ's
intended boundaries;
6. It enables Microsoft to commingle or technologically bundle
its OS with other dominant Microsoft software;
7. It enables Microsoft to use anticompetitive pricing tactics
such as bundled pricing;
8. It fails to provide OEMs with the freedom to promote software
products competing with Microsoft's products;
9. The enforcement mechanisms of the RPFJ are too weak to ensure
Microsoft's compliance; and
10. It contains other deficiencies described below.
If the above RPFJ shortcomings are not addressed, Microsoft will
be able to dictate customer decisions regarding computing models and
standard technologies for the indefinite future, rather than having
those decisions made by consumers on the competitive merits.
Competition, and the
[[Page 29079]]
innovative solutions that emerge from that competition, will suffer.
Any settlement with Microsoft must address these issues now,
because, as the industry has learned from the Internet browser war,
competition can be lost in the blink of an eye.
II. BACKGROUND ON PALM AND ITS INTEREST IN THIS MATTER
Palm develops and markets, among other products, a line of
handheld computers that operates proprietary and non-proprietary
applications using its Palm OS. Based on the Palm OS platform,
Palm's handheld solutions allow consumers to store and access their
most critical information and communications, including from the
Internet. Palm handhelds address the needs of individuals,
enterprises and educational institutions through thousands of
application solutions that ISVs create. The Palm OS platform is also
the foundation for products from Palm's licensees and strategic
partners (also known as the Palm Economy), such as Acer, AlphaSmart,
Franklin Covey, HandEra (formerly TRG), Garmin, Handspring, IBM,
Kyocera, Samsung, Sony and Symbol Technologies, as well as a
multitude of ISVs and IHVs.
Palm competes with numerous companies in its software and
hardware businesses. Microsoft's Pocket PC OS is one of Palm's most
direct competitors in operating systems designed for handheld
devices. Microsoft licenses the Pocket PC OS to OEMs, including
Compaq and Hewlett Packard, that install the OS in their handheld
products. It markets these products as "Windows
Powered"--suggesting deceptively, Palm believes, that the
Pocket PC product is a direct extension of its monopoly Windows PC
OS product, and thereby leveraging the Windows monopoly to extend
its market control into handhelds.
Plaintiff States that have opted not to join in the Microsoft
settlement ("the Litigating States") approached Palm in
an effort to remedy through their own proposed relief Microsoft's
potential anticompetitive conduct that, under the RPFJ, could
eliminate the threat posed by the handheld industry. Palm has agreed
to testify in Track 2 in support of the Litigating States"
proposed relief ("the Litigation States"
Remedies"). Palm respectfully submits that the Litigating
States" Remedies, unlike the RPFJ, protect competition in
mobile computing industry as well as the competition that industry
will provide to the PC OS monopoly.
III. THE RPFJ'S DEFICIENCIES
The RPFJ fails to create the market conditions necessary for
competition to thrive. The structure and terms of the RPFJ are
rooted in the computing industry as it existed in the mid-1990s,
when the Internet was only beginning to gain widespread consumer use
and software development was still focused on the PC.
To be effective, the remedy must take into account the industry
as it exists today, and the new emerging threats against which
Microsoft could (and, if left unchecked, will) repeat its pattern of
anticompetitive behavior. The focus of competition in computing has
shifted from the PC to the Internet, the server and to new devices
such as handhelds. Microsoft's .NET initiative is an acknowledgement
of this change, and the fact that it is being driven into virtually
every Microsoft product highlights its significance. The RPFJ
completely ignores this, and other, crucial dynamics.
A. Under The RPFJ, Microsoft Will Obstruct The Critical
Interoperability Between Microsoft's Software Products And Non-
Microsoft Products.
As products that manage users" information, handhelds must
interface with the OS and applications on a customer's PC. When that
PC is part of a larger network (as it is in nearly every corporate
or "enterprise" scenario), handhelds must also interface
with the software on the network, typically resident on a server,\5\
---------------------------------------------------------------------------
\5\ As we discuss more fully below, this is particularly
true where the software that has traditionally resided on the PC is
increasingly being distributed, by design, to various locations over
the networked environment.
---------------------------------------------------------------------------
In order to interoperate effectively with Microsoft products,
handhelds must, at the very least, be able to:
(1) read and write data to and from the consumer's PC and/or
server;
(2) interpret and format the data so it can be properly stored
in the handheld, PC or server;
(3) run communication software, called conduits, that facilitate
such interfaces with the PC and server; \6\ and
---------------------------------------------------------------------------
\6\ A conduit is a piece of software that interoperates
with the handheld and the target PC or server, managing the
communication between them.
---------------------------------------------------------------------------
(4) install the software drivers necessary to attach the cradle
or other communication mechanism to the PC through which the
handheld communicates with the PC and server.
In short, Palm and other handheld manufacturers must know the
"commands" (to access the data) and the "data
formats" (to understand the data) with respect to the target
PC or server in order to develop the necessary conduits to
interoperate with the target. In most cases (and nearly all business
situations), in addition to interacting with the PC OS, the handheld
device interoperates with Outlook or Exchange information (such as
e-mails, contact information, and calendars), Word and Excel
documents on the PC or other databases on the server. The RPFJ fails
to ensure that anyone other than Microsoft will be able to interface
with Outlook, Exchange, software on corporate servers, other PC
applications such as Office, middleware for distributed or web-based
applications or even the PC OS itself. Specifically, Sections III.D
and III.E of the RPFJ do not address the potential threat (as
articulated by Mr. Gates in his e-mail cited supra) that Microsoft
can constrain or eliminate competition in and from the handheld
industry by regulating the access to technical information necessary
for interoperability.\7\ In general, the RPFJ does not require any
disclosure of technical information regarding the interface between
Microsoft's PC or server products and handheld products. For
example, the section neither requires disclosure of server APIs, nor
information regarding the interfaces between PC OS or middleware and
server applications.
---------------------------------------------------------------------------
\7\ We note that the RPFJ requires even less disclosure
than the parallel provision in the Interim Order, which was intended
to serve as a remedial bridge pending the previously ordered
divestiture. United States v. Microsoft. Final Judgment (D.DC 2000)
("Interim Order"). For instance, Section III(b)(iii) of
the Court's Interim Order required Microsoft to disclose all APIs,
Communications Interfaces and Technical Information (i.e., any and
all possible technical dependencies) between (a) software installed
on any device (including servers and handhelds) and (b) any
Microsoft Operating System or Middleware installed on a PC.
---------------------------------------------------------------------------
Moreover, the RPFJ also permits Microsoft to foreclose access to
critical interfaces that it migrates from the PC OS to the
applications or "distributed" environment on a network
(and in the case of .NET services, to the Internet) by limiting the
disclosure requirements to the APIs between the PC OS and
middleware, and the communication protocols between the PC OS and
the server OS.\8\ The RPFJ does not require disclosure of the
commands and data formats necessary to interface with the critical
applications on the PC, such as Outlook, Office or Internet
Explorer. In addition, Microsoft can create proprietary .NET APIs
that work only with the Pocket PC OS, bundle them with Microsoft's
Visual Studio software development environment, discussed infra, and
encourage the development of web services and applications that can
be accessed only through Microsoft's OS products.\9\
---------------------------------------------------------------------------
\8\ Microsoft defines .NET as its "platform for XML
web services." .NET Defined, available at http://www.
Microsoft.corn/net/whatis.asp. The services that .NET offers are a
combination of pre-designed applications, some of which come under
the rubric .NET My Services or "Hailstorm," and a set of
tools designed to allow developers to create web applications which
rely on the all-important APIs exposed by Microsoft programs (see
discussion of "VSIP" infra).
\9\ It is Palm's understanding that, absent being forced
to by the Court, Microsoft will not make certain of these APIs
available at all. Others will be available on terms that essentially
force Palm to exit the OS business, thereby reducing it to a device
manufacturer implementing Microsoft software.
---------------------------------------------------------------------------
At the core of .NET stands the .NET Framework (for PCs) and .NET
Compact Framework (for handhelds). The Framework is Microsoft's
answer to the Java runtime environment, with a key difference: It
lacks the freedom from reliance on Microsoft's APIs. .NET is
important because it extends Microsoft's program interface (that is,
Microsoft's APIs) to provide the underpinnings necessary for web-
based services and distributed applications that do not reside on
the PC and/or handheld.
Finally, the RPFJ is silent regarding the interfaces between
handhelds and software that resides on the servers. In a networked
environment, such as corporate networks, handhelds need to exchange
data particularly with software on servers.\10\ For example, without
access to data on Microsoft Exchange (the server application product
that
[[Page 29080]]
complements the client e-mail and calendar application Microsoft
Outlook), non-Microsoft handhelds cannot offer features offered by
Pocket PC products.
---------------------------------------------------------------------------
\10\ The interface between the handheld and server
products can be designed to be "through" the cradle and
the PC via the network connection between the PC and the server, or
a wireless link directly with the server as in the case of
Microsoft's Mobile Information Server ("MIS")
technology, to which Palm lacks unhindered access.
---------------------------------------------------------------------------
B. The RPFJ's Toothless Definitions Will Enable Microsoft To
Break Interoperability Without Recourse.
The Definitions of "Operating System,"
"Windows Operating System Product" And "Personal
Computer" Are Fatally Flawed. The definition of
"operating system" specifies code that executes on a PC.
Microsoft can evade this definition simply by moving code off of the
PC and onto a server or other device. Microsoft's .NET architecture
even facilitates this scheme.
The definition of "Windows Operating System Product"
determines the scope of Microsoft's disclosure obligation. The
definition itself, however, leaves Microsoft free to determine in
its sole discretion what software code comprises a "Windows
Operating System Product." In other words, Microsoft's
disclosure obligation is subject entirely to its own discretion.
The RPFJ is also undermined by the interaction between the
definitions of PC and OS. The definition of PC explicitly excludes
almost every new category of device that may compete with PCs in the
future, including set top boxes, handhelds, and servers. Because an
OS is defined as software running on a PC, competing operating
systems running on anything other than a PC appear to be excluded
from the RPFJ's coverage.
The Definitions Of "Non-Microsoft Middleware" And
"Microsoft Middleware" Are Too Narrow. To qualify as
competing middleware protected by the RPFJ, software in question
must run on the Windows PC OS and must be distributed in at least
one million copies per year. The requirement that covered middleware
run on the Windows PC OS leaves Microsoft free to retaliate against
middleware software that runs on other devices, such as servers and
handhelds. The million unit restriction allows Microsoft to target
newly-developed middleware that does not yet sell a million units
per year. In fact, Microsoft has an incentive to target such
middleware before it can grow to a million units and enjoy the
protections of the RPFJ. This restriction will stifle innovation by
focusing Microsoft's competitive activity against smaller, younger
companies--the companies least able to protect themselves
against Microsoft's tactics. Furthermore, as more and more software
becomes network-based, the whole concept of "distributing
copies of software" becomes irrelevant. It is now possible for
very popular software to exist only in a single copy.
For example, the Yahoo web service is intensely popular even
though it is not copied onto any user's computer. As Microsoft's
.NET initiative indicates, the industry is moving towards a web-
based services model where consumers access software applications on
the Internet. The RPFJ ignores this crucial change in the
marketplace.
Moreover, to qualify as a middleware product, software must
either provide the functionality contained in a short list of
products (Explorer, Java, Media Player, Messenger, Outlook Express),
or must first be sold separately, have a trademarked name and
compete with qualifying non-Microsoft middleware. Missing from the
list are a large number of Microsoft monopoly products which have
already become "platforms" with which Microsoft
competitors have to interoperate. These products include Microsoft
Office, full Microsoft Outlook (as opposed to just the Express
version), Microsoft Exchange, Microsoft Visual Studio, and Microsoft
.NET.
Because the RPFJ excludes these products from the middleware
definition, Microsoft is left free to manipulate its interfaces and
APIs to exclude competitors. This gap alone is enough to render the
RPFJ almost completely ineffective.
Under the RPFJ, Microsoft can avoid the provision regarding
middleware simply by not trademarking the product name. According to
this definition, many Microsoft products currently in the market
would fail to qualify as middleware. Furthermore, to qualify as
middleware software must include user interface code; Microsoft can
avoid this by simply distributing the user interface code
separately. Version numbers are also used to determine which
software updates are covered; if the whole number or first decimal
of the version number does not change, the software does not
qualify. It appears that Microsoft could evade the middleware
definition simply by changing its software numbering scheme (for
example, moving to letters--version a, version b, etc.).
The RPFJ's Failure To Define "Interoperate" Creates
A Significant Loophole. Neither Section III.E nor any other
provision of the proposal defines "interoperate." This
omission invites Microsoft to enable non-Microsoft products to
continue to function but in a much less robust way than Microsoft's
handheld products, to the detriment of consumers.
The Definition Of ISV Is Too Narrow. The definition of ISV
covers only companies creating software that runs on the Windows PC
OS. Many current and future Microsoft competitors create software
that needs to access information on PCs but does not run on the PC
itself. As more and more software development becomes web-based, it
will be the norm for competing software not to run on the PC. The
RPFJ does not protect these emerging competitors.
The Definition Of APIs Is Too Narrow. Under Section III.D of the
RPFJ, the disclosure is narrowly limited to "APIs and related
Documentation." Microsoft can circumvent this provision by
hard-wiring links to its applications and through other
anticompetitive coding schemes.
C. The RPFJ Does Not Stop Microsoft From Using Its Control Over
Development Tools To Protect The Applications Barrier To Entry.
The RPFJ ignores Microsoft's control over application
development tools, and how Microsoft can use that control to
foreclose competition from third parties. The applications barrier
to entry was the linchpin of this case and the RPFJ ignores how
Microsoft can use development tools to perpetuate it.
For example, Microsoft's Visual Studio product has, as a result
of Microsoft's PC OS monopoly, become the software development tools
standard for most corporate and commercial application programmers,
including prospective developers of software for mobile devices. As
handheld technology increasingly displaces PC functionality, more
and more PC OS developers have been seeking to create mobile
software. Nevertheless, Microsoft has, up to this point, denied Palm
access to the Visual Studio Integration Program,\11\ despite Palm's
significant position in the handheld space.\12\
---------------------------------------------------------------------------
\11\ The Visual Studio Integration Program
("VSIP") is a Microsoft licensing program which enables
companies outside of Microsoft to "host" their software
development within the Visual Studio tool. Many companies other than
Palm have been given entry to the VSIP. If Palm is denied entry to
the VSIP, Visual Studio users will find it much more difficult to
create software for Palm OS handhelds.
\12\ Microsoft first engaged in stall tactics by simply
not responding to Palm's request for participation in the VSIP.
Then, Microsoft told Palm that the Visual Studio team lacked the
resources for Palm to participate (even as it added other companies
to VSIP, Palm believes). Next, Microsoft told Palm that it could
participate in the VSIP under the condition that Palm adopt
Microsoft's proprietary .NET APIs under unacceptable terms that
would have "commoditized" Palm's products. This would
have extended the applications barrier to entry to the handheld
industry by ensuring that applications developers designed their
products not for the Palm platform but for Microsoft's. Ultimately,
Microsoft's conduct would have eliminated Palm as a competitive
platform. Only recently has Palm received an "offer" to
join the Visual Studio without adopting .NET, which Palm believes is
due to Microsoft teaming that Palm is testifying in the Track 2
proceedings, i.e., only when Microsoft concluded that its behavior
would be subject to judicial scrutiny (and after 18 months of
delay). Palm is currently evaluating the terms offered by Microsoft.
---------------------------------------------------------------------------
Microsoft's exclusion of third parties such as Palm from Visual
Studio has the following adverse effects. Exclusion makes it
impossible for Visual Studio users (the vast majority of PC ISVs) to
create Palm OS applications without changing the programming tools
they use--an unlikely proposition. This, in turn, makes it more
difficult for Palm to recruit software developers.
Exclusion also makes it very difficult to sell Palm OS handhelds
to corporations, because Visual Studio is very often the standard
for their in-house developers. Lastly, exclusion allows Microsoft to
claim that Palm OS handhelds are incompatible with corporate
standards. The net effect of these restrictions discourages PC ISVs
from supporting non-Microsoft operating systems, and reduces the
selection of software available to users of non-Microsoft OS
handhelds.
Reduced to its essence, Microsoft's predatory developer tool
strategy: (1) leverages its PC OS monopoly to create a software
"standard"; (2) prevents competitors from accessing that
standard; (3) "informs" customers that the competitive
products are incompatible with the very same products that Microsoft
used to create the incompatibility; and thereby most importantly,
(4) limits consumer choice and experience by foreclosing non-
Microsoft products as competitive alternatives.
[[Page 29081]]
D. The RPFJ Does Not Prohibit Microsoft From Unlawfully Bundling
Its Products Or Using Anticompetitive Pricing Schemes.
The RPFJ is notably deficient in its failure to address the
potential for Microsoft to bundle or commingle its products with
other dominant Microsoft software. The RPFJ also fails to prevent
Microsoft from engaging in anticompetitive pricing to the ultimate
detriment of the consumer (e.g., charging less for its Pocket PC OS
only when it is licensed as part of a larger bundle). The royalty
schedule restrictions in particular appear to be a major threat to
legitimate competition.
For example, under the RPFJ Microsoft will be able to offer
discounts on Windows to a PC OEM that also agrees to sell Pocket PC
handhelds, so long as Microsoft offers this same subsidy to all
OEMs. This gives Microsoft enormous coercive power to prevent any PC
OEM from selling non-Microsoft based devices.
E. The RPFJ Does Not Remedy Microsoft's Ability To Use The
Installation Of Drivers For Peripheral Hardware As A Chokehold.
The RPFJ does not address Microsoft's ability to obstruct the
interoperability of a nonMicrosoft handheld by limiting the
consumer's or OEM's ability to install drivers that must sit on top
of the OS so that the handheld can communicate with the PC.
F. The RPFJ Does Not Remedy Microsoft's Ability To Use Internet
Explorer As A Chokehold. Website developers specifically develop
their products to be compatible with Internet Explorer because of
Microsoft's monopolization of the browser market. Thus, Internet
Explorer itself has become the ultimate test of Web compatibility
for all computing devices, including handhelds. The RPFJ does not
remedy Microsoft's ability to use this interoperability with
Internet Explorer as a weapon. Microsoft has refused to even
consider porting Internet Explorer to Palm OS, despite requests from
Palm. Microsoft has, though, ported Internet Explorer to Pocket PC
in the form of Pocket Internet Explorer.
G. The RPFJ's Disclosure Delays Render It Ineffective.
The disclosure requirements under the RPFJ do not become
operative for up to twelve months in the case of interfaces relating
to middleware and operating systems, and nine months in the case of
interfaces between the PC OS and the server OS. In light of the
speed with which the industry moves, these delays will continually
undermine the competitive vitality of Microsoft's competitors, which
will of course only result in further consumer harm.
The timing of the disclosure requirements under the RPFJ is also
deficient. When Microsoft releases an OS, the disclosure
requirements do not become effective until Microsoft releases a beta
test version to 150,000 or more beta testers. Under this standard,
Microsoft will not have to disclose the relevant technical
information until very close to the public release date of the
product, whereas Microsoft's in-house developers working on
peripheral software (such as the Pocket PC OS) will have immediate
access to the relevant information. Software development can take a
year or longer, whereas the last beta cycle may be only a few weeks
or months before release. If disclosure does not happen until the
last beta cycle, non-Microsoft products will be at a substantial
disadvantage relative to Microsoft products. Also, the definition of
"timely manner" specifies a beta cycle of at least
150,000 people. Microsoft apparently could evade all OS pre-
disclosure requirements by limiting its beta programs to 149,999
participants.
H. The RPFJ Does Not Restrict Knowing Interference With
Performance.
The RPFJ contains no prohibition against Microsoft's intentional
interference with the performance of non-Microsoft products by
manipulating the interfaces with non-Microsoft products.
Without such a restriction, Microsoft can eliminate the
effectiveness of the disclosure requirements by altering the
interfaces or other information on which non-Microsoft products
rely.
I. The RPFJ Fails To Provide OEMs And Consumers The Flexibility
Necessary To Facilitate Competition.
Microsoft Retains Control of Desktop Innovation. Because of the
RPFJ's restrictive definitions of middleware, Microsoft retains
control of desktop innovation by being able to prohibit OEMs from
installing or displaying icons or other shortcuts to non-Microsoft
software, products and/or services, if Microsoft does not provide
the same software, products and/or services. This undermines the
OEMs" ability to differentiate their products, and stifles the
emergence of new competitors to Microsoft.
The RPFJ's Non-Retaliation Restrictions Are Ineffective. Section
III.F attempts to prohibit retaliation against companies working
with competing products, but the narrow definitions of
"operating system" and "personal computer"
make it unclear whether Microsoft is prohibited from retaliating
against companies that work with competing handhelds, set-top boxes,
servers or Internet software infrastructure. This ambiguity, plus
Microsoft's ability to threaten retaliation even when it is
prohibited from carrying out the threats, will make it extremely
uncomfortable for any PC OEM to contemplate working with any non-
Microsoft product.
Under Section III.A, Microsoft is free to "threaten"
to retaliate in any form. Further, Microsoft is constrained only
from the specified forms of actual retaliation, a remedy further
weakened by the fact that the protected OEM activities are narrowly
and specifically defined. Retaliation against an OEM for installing
a non-Microsoft application that does not meet the middleware
definition is not prohibited; nor is retaliation against an OEM for
removing a Microsoft application that does not meet the middleware
definition. As noted above, the definitions are so narrowly drawn
that the protection of the RPFJ will not apply in most competitive
situations Microsoft is likely to encounter in the future. Microsoft
could, for example, retaliate against a PC OEM for selling handhelds
based on the Palm OS.
Add/Remove Provisions Relate Only To Icons. Not The Middleware
Itself. The add/remove provisions in the RPFJ only allow for removal
of end user access to Microsoft middleware, not the middleware
itself. If Microsoft's middleware remains on PCs, then applications
developers will continue to write applications that run on that
middleware, reinforcing the applications barrier to entry that is at
the heart of this litigation.
Non-Microsoft Icons Should Not Be Subject To Add/Remove. The
RPFJ allows Microsoft to demand inclusion of non-Microsoft icons in
the add/remove utility, which does not make sense in the absence of
any finding that the permanence of non-Microsoft middleware icons on
the desktop is anticompetitive. Microsoft's competitors should not
be treated as if they are equally guilty of Microsoft's
anticompetitive behavior.
Desktop Most Favored Nation Requirements. Nothing in the RPFJ
forbids Microsoft from requiring, especially where the product fails
to meet the definition of middleware, most favored nation agreements
from the OEMs. These agreements tax OEM efforts to promote Microsoft
rivals by requiring that equal promotion or placement be given to
Microsoft products, often without compensation.
Notification To Developers Only When They Ask. Microsoft can
disable competing middleware that fails to meet its requirements
without any notice to the middleware developer. The developer is
expected to discover the disablement and then request an
explanation. Microsoft should be required to disclose in advance any
conditions that would cause a competing product to be disabled.
J. The RPFJ's Enforcement Provisions Are Insufficient.
Technical Committee And Compliance Officer. As stated above, a
Technical Committee of three experts, one of whom will be selected
by Microsoft, will monitor Microsoft's compliance with the RPFJ. The
RPFJ also obligates Microsoft to have an internal Compliance
Officer. However, the RPFJ fails to provide this Committee and the
Compliance Officer with effective oversight power. For example,
Microsoft employees do not have a confidential mechanism to report
violations to the Committee, the Compliance Officer, the Court or
the Plaintiffs. Nor does the RPFJ require Microsoft to retain
documents regarding topics relating to the business issues in this
case.
Sanctions. In light of Microsoft's violations so far and the
potential for continued serious harm to competition, the RPFJ is
deficient in not including a "crown jewel" provision
requiring Microsoft to incur substantial liability or divestiture of
certain assets in the event of future violations of the RPFJ.
IV. CONCLUSION
For the reasons articulated above, Palm submits that the Court
should reject the RPFJ as insufficient to remedy Microsoft's past
unlawful conduct and to ensure vigorous competition in the future.
In the alternative, this Court should defer ruling on the RPFJ until
after the Track 2 proceedings conclude.
ATTACHMENT
From: Bill Gates;
Sent: Sunday. July 11, 1999 5:46 PM
To: Harel Kodesh
CC: Bob Mugia (Exchange); Jim Allchin
[[Page 29082]]
(Exchange): Mats Wennberg; Thomas Koll; Greg
Faust;
Jonathan Kobetrs; Bill Mitchell
Subject: Nokia
While I was at the Allen and CO conference I met with Jurma Oillie
CEO of Nokia.
I was totally confused by them licensing their WAP browser to
Spyglass. It's a disaster for us to have an effort that is
duplicative that we give away while the leaders in the industry move
in their own direction.
I think the PDA group needs some better strategic think in this
whole cheap browse area. How come we don't merge our effort with
Nokia? Why do we let Spyglass undermine us IN so many areas? Who
keeps paying money Spyglass?
I am also completely confused about why we aren't doing more due
diligence on GPRS with Nokia and others. Jurma seemed very surprised
when I told him our goal was to fund someone to roll out a
nationwide wireless network using HDR or GPRS as quickly as possible
to create something a based on Windows CE. He said his people need
to explain to use how GPRS is a much better choice. They would love
to help get involved in rolling this out with some partners. He rays
HDR or another fraud from Qualcomm where exaggeration sways people
who don't hear both sides of the story.
Jurma was asking about our strategy for voice recognition
servers to make PDAs work a lot better. He sees all networked PDAs
as needing. a voice recognition, server infrastructure (like phones)
and that this changes the UI quite a bit I said I agreed with his
view and that we had not factored that into our plans right now. We
talked about how voice and screens will come together. l said there
were a lot of key scenarios that we our PDA group was parenting
around (I wish our activity level here was really as high as I
suggested to him7.
Jurma also wanted to know what sort of strategy we had to bring
Hotmail Contact lists/Schedules together with Exchange. They use
Exchange internally but a lot of their people use Hotmail and don't
understand what we are doing.,
Jurma told me their Fenix project is delayed because of a key
chip so it won't ship until March 2000 so they don't want to
announce at Telcom where I am going. He talked about how much money
people spend on their booths at Telcom.
I am a bit confused about what we should be doing on witless
data/pbx with various vendors. Why wouldn't we want to have a
Windows PDA to work with each of their wirless PBX solutions?
Jurma talked about how he is thinking perhaps Cisco or Lucent
may buy Ericsson if it doesn't get straightened out fairly soon. He
also thinks someone will buy 3Corn. We talked about how we view Palm
as a competitor. I was amazed at the number of Palm Pilots I saw at
this conference. We really need to follow up with them on GPRS
rapidly and get their best thinking given our goals.
We really need to demonstrate to people like Nokia why our PDA
will connect to Office in a better way than other PDAs even if that
means changing how we do flexible schema in Outlook and how we tie
some of our audio and video advanced work to only run on our PDAs.
GOVERNMENT EXHIBIT
Remedy 1
MSCE 0097924 CONFIDENTIAL
From: Harel Kodesh
Sent: Sunday, July 11.1999 10:25 PM
To: Bill Gates
CC: Bob Muglia (Exchange); Jim Allchin (Exchange); Mats Wennberg;
Thomas Koll; Greg
Faust;
Jonathan Roberts; Bill Mitchell
Subject: RE; Nokia
There is a lot of stuff here. I will try to answer line by line.
1. Our microbrowser needs a WAP stack. There are 3 Possible
places we can like it from: Nokia is willing to SELL it to us,
Ericsson is willing to give it to me wee, and MotoroLa is still
undecided what they want to do. So right now we are working with
Ericsson on getting the browser. It is a better deal than the Nokia
one. We told Nokia that We do not need more than one stack, and the
stack that Ericsson gives us is good. This is for V2 of the
microbrowser and we do not plan to give that away. Our browser will
be better in XML than the Nokia one.
2. HDR vs GPRS--we are going through the analysis now. I
don't understand where the fraud is. As we and Sprint talk more
about R we will do me analysis, Ericsson and Nokia in me past
claimed that CDMA is a loser, but at the end 3G is CDMA based. I am
not saying that the HDR is the winner and we will do more to
understand GPRS--I will take the action item there.
3. the server based scenarios look very compelling, but we are
missing some work items to make it really cool. Palm is the clearest
threat right now and this is where we spent most of the efforts. I
think the effors is bearing fruits: finally We got the sync
technology to the point where it is much better man palm. Casio
demonstrated the Video and Audio are huge sellers. (and with MSAudio
we do have the tie back to our technology). Unfortunately we do not
have enough inventory to reach parity and that will be the case
until early 2000).
4. There are hotmail/exchange convergence issues here. as well
as connectivity back to office. I think we are doing a good job in
rapier time frame, but we will have problems with hardware
availability and this is what we are trying to fix now. I will work
with bobmu on these issues.
--Original Message--
From: Bill Gates
Sent: Sunday, July 11, 1999 5:46 PM
To: Harel Kodesh
Cc: Bob Muglia (Exchange); Jim Allchin (Exchange); Mats Wennberg;
Thomas Koll: Greg
Faust; Jonathan
Roberts; Bill Mitchell
Subject: Nokia
While I was at the Allen and Co conference I met with Jurma
Ollila CEO of Nokia. I was totally confused by them licensing their
WAP browser to Spyglass. It's a disaster for us to have an effort
that is duplicative that we give away while the leaders in the
industry move in their own direction. I think the PDA group needs
some better strategic thinking in this whole cheap browser area. How
come we don't merge our effort with Nokia? Why do we let Spyglass
undermine us in so many areas? Who keeps paying money Spyglass? I am
also completely confused about why we aren't doing more due
diligence on GPRS with Nokia and others. Jurma seemed very surprised
when I told him our goal was to fund someone to roll out a
nationwide wireless network using HDR or GPRS as quickly as possible
to create something a based on Windows CE He said his people need to
explain to use. how GPRS is a much better choice. They would love to
help get involved in roiling this out with some partners. He says
HDR is another fraud from Qualcomm where exaggeration sways people
who don't hear both sides of the story.
Jurma was asking about our strategy for voice recognition
servers to make PDAs work a lot better. He sees all now voice PD as
needing a voice, recognition server infrastructure (like phones) and
it this changes the UI quite a bit. I said I agreed with his yew and
that we had not factored that into our plans night now. We talked
about how voice and screens will come together. I raid there were a
lot of Key scenarios that we our PDA group was parenting around (I
wish our activity level here was really as high as I suggested to
him).
Jurma also wanted to know what sort of strategy we had to bring
Hotmail Contact lists/Schedules together with Exchange. They use
Exchange internally but a lot of their people use Hotmail and don t
understand what we are doing.
Jurma told me their Fenix project is delayed because of a key
chip so it won't ship until March 2000 so they don't want to
announce at Telcom where I am going. He talked about how much money
people spend on their booths at Telcom.
I am a bit confused about what we should be doing on witless
data/pbx with various vendors. Why wouldn't we want to have a
Windows PDA to work with each of their wirless PBX solutions? MSCE
OO97925
CONFIDENTIAL
Jurma talked about how he is thinking perhaps Cisco or Lucent
may buy Ericsson if it doesn't get straightened out fairly soon. He
also thinks someone will buy 3Corn. We talked about how we view Palm
as a competitor. I was amazed at the number of Palm Pilots I saw at
this conference, We really need to follow up with them on GPRS
rapidly and get their best thinking given our goats. We really need
to demonstrate to people like Nokia why our PDA will connect to
Office in a better way than other PDAs even if that means changing
now we do flexible schema in Outlook and how we tie some of our
audio and video advanced work to only run on our PDAs. MSCE 0097926
CONF IDENTIAL
From:. Harel Kodesh
Sent: Sunday. July 11, 1999 10:45 PM
To: Harel Kodesh; Bill Gates
CC: Bob Muglia (Exchange); Jim Allchin (Exchange); Mats Wennberg;
Thomas Koll; Grog
Faust; Jonathan Roberts; Bill Mitchell
Subject: RE: Nokia
Forgot one thing: We absolutely need to go after other PBX
manufacturers and develop
[[Page 29083]]
the market independently of what Nokia can or cannot do. I really
would like to see us announcing an effort to provide, campus
communication (ideally .with Nokia and others) even though they may
fall behind in terms of schedule. The whole offering is not a
consumer offering and we will need some lead time to sell it to the
enterprise.
--Original Message--
From:Harel Kodesh
Sent: Sunday, July 11, 1999 10:25 PM
To: Bill Gates
Cc: Bob Muglia (Exchange); Jim Allchin (Exchange; Mats Wennberg;
Thomas Koll; Grog
Faust; Jonathan Roberts; Bill Mitchell
Subject: RE: Nokia
There is a lot of stuff here, I will try to answer line by line.
1. Our microbrowser needs a WAP stack. There are 3 possible
places we can take it from: Nokia is willing to--SELL it to us,
Ericsson is willing to give it to me free, and Motorola is still
undecided what they want to do. So right now we are working with
Ericsson on going the browser. It is a better deal than the Nokia
one. We told Nokia that. We do not need more than one stack, and the
stack that Ericsson gives us is good. This is for V2 of the
microbrowser and we do not plan to give that away. Our browser will
be better in XML than the Nokia one.
2. HDR vs GPRS--we are going through the analysis now. I
don't understand where the fraud is. As we and Sprint talk more
about it we will do the analysis. Ericsson and Nokia in the past
claimed that CDMA is a loser, but at the end 3G is CDMA based. I am
not saying that the HDR is the winner and we will do more to
understand GPRS--I will lake the action item them.
3. the server based scenarios look very compelling, but we are
missing some work items to make it really cool. Palm is the clearest
threat right now and this is where we spent most of the efforts. I
think the effors is bearing fruits: finally we got the sync
technology to the point where it is much better than palm. Cask)
demonstrated the Video and Audio are huge sellers (and with MSAudio
we do have the tie back to technology). Unfortunately we do not have
enough inventory to reach parity and that will be the case until
early 2000).
4. There are hotmail/exchange convergence issues here, as well
as connectivity back to office. I think we are doing a good job in
rapier time frame, but we will have problems with hardware
availability and this is what we are trying to fix now. I will work
with bobmu on these issues.
--Original Message--
From: Bill Gates
Sent: Sunday. July 11.1999 5:46 PM
To: Harel Kodesh
Co: Bob Muglia (Exchange); Jim Allchin (Exchange); Mats Wennberg;
Thomas Koll; Grog
Faust; Jonathan Roberts: Bill Mitchell
Subject: Nokia
While I was at the Allen and Co conference I met with Jurma
Ollila CEO of Nokia. I was totally confused by them licensing their
WAP browser to Spyglass. It's a disaster for us to have an effort
that is duplicative that we give away while the leaders in the
industry move in their own direction. I think the PDA group needs
some better strategic thinking in this whole cheap browser area. How
come we don't merge our effort with Nokia? Why do we let Spyglass
undermine us in so many areas? Who keeps paying money Spyglass? I am
also completely confused about why we aren't doing more due
diligence on GPRS with Nokia and others. Jurma seemed very surprised
when I told him our goal was to fund someone to roll out a
nationwide wireless network using HDR or GPRS as quickly as possible
to create something a based on Windows CE. He said his people need
to explain to use how GPRS is a much better choice. They would love
to help get involved in rolling this out with some partners. He says
HDR is another fraud more MSCE 0097927
CONFIDENTIAL
Qualcomm where exaggeration sways people who don't hear both
sides of the story. Jurma was asking about our strategy for voice
recognition servers to make PDAs work a lot better. He sees all
networked PDAs as needing a voice recognition server infrastructure
(like phones) and that this changes the UI quite a bit. I said I
agreed with his view and that we had not factored that into our
plans fight now. We talked about how voice and screens will come
together. I said there were a lot of key scenarios that we our PDA
group was patenting around (1 wish our activity level here was
really as high as I suggested to him). Jurma also wanted to Know
what sort of strategy we had to bring Hotmail Contact lists/
Schedules together with Exchange. They use Exchange internally but a
lot of their people use Hotmail and don't understand what we are
doing.
Jurma told me their Fenix project is delayed because of a key
chip so it won't ship until March 2000 so they don't want to
announce at Telcom where I am going. He talked about how much money
people spend on their booths at Telcom. I am a bit confused about
what we should be doing on witless data/pbx with various vendors.
Why wouldn't we want to have a Windows PDA to work with each of
their witless PBX solutions?
Jurma talked about how he is thinking perhaps Cisco or Lucent
may buy Ericsson if it doesn't get straightened out fairly soon. He
also thinks someone will buy 3Corn. We talked about how we view Palm
as a competitor. I was amazed at the number of Palm Pilots I saw at
this conference.
We really need to follow up with them on GPRS rapidly and get
their best thinking given our goals. We really need to demonstrate
to people like Nokia why our PDA will connect to Office in a better
way than other PDAs even if that means changing how we do flexible
schema in Outlook and how we tie some of our audio and video
advanced work to only run on our PDAs. MSCE 0097928
CONFIDENTIAL
MTC-00030614
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
UN??) STATES OF AMERICA, Plaintiff, Civil Action No.
98-121 CKK, ??FT CORPORATION, Defendant
STATE?? NEW YORK: et al., Plaintiffs, Civil Action No.
98-123 ??KK, MICRDN??FT CORPORATION, Defendant
COMMENTS OF SOFTWARE & INFORMATION INDUSTRY ASSOCI?? ION ON
PROPOSED FINAL JUDGMENT
Ken Wasch, President (Bar No. 93,4984) I Software and Information
Industry Associa?? 1090
Vermont Avenue, N W
6th Floor
Washington, DC 20005
(202) 289-7442
Douglas L. Hilleboe (Bar No. 386091)
Steptoe & Johnson LLP
1330 Connecticut Avenue, NW
Washington, DC 20036
(202) 429-3000
Dated: January 28, 2002
COMMENTS OF SOFTWARE & INFORMATION INDUSTRY ASSO?? ON PROPOSED
FINAL JUDGMENT
Pursuant to Section 2(b) of the Antitrust Procedures and
Penalties Act (the "??nney Act") 15 U.S.C.
16(b)-(h) (2000), the Software & Information
Industry Associati?? ("SIIA") submits those comments on
the Proposed Finn Judgmenet ("PFJ") filed by the Unite
?? Department of Justice ("DOJ") on November 6, 2001.
SHA is the principal trade association of the software code and
information?? tent corp?? SHA provides global services in government
relations, business development corporate education and intellectual
property protection to more than 800 leading s ??are and ?? company.
Our member develop and market software and electronic ??tent for
business education, consumers, and the Internet. SIIA's membership
is compiled ??arge and small ?? companies, e-business and
information companies, as well as many traditional and electronic
commerce complies of varying sizes.
Among SIIA's key public policy issues is the promotion of
competition in th??ftware industry. SIIA has promoted these
principles of competition in a variety of fora, inc??g the federal
courts.
The PFJ proffered by DOJ represents a remarkable change of
heart- or, per?? more accurately, a loss of heart. For whatever
reason, DOJ proposes to end one of its m?? important and successful
monopolization case a with a settlement that reflects neither its
litiga?? ??position nor the decisions it won at trial and on appeal.
A settlement as weak as this would ?? been disapp??, but perhaps
understandable, at it had been reached before trail. In ?? is
uncertain, and sometimes DOJ must take a bird in the hand. But in
this ?? of the ??giation is past, and the new Administration
arrivals are dot free to decide ?? the?? to this case. The law of
this case is settled. The trial and appeals ?? have alre?? finding
of fact and conclusions of law. These findings and conclusi??
proceeding whose raison ?? is protecting against an improperly ?? or
expedient compromise of the public's interest in enforcement of the
antitrust laws.
Appropriate relief in an antitrust case should end the unlawful
conduct, ?? competition, avoid a recurrence of the violation and
others like it, and ?? anticompetitive consequences. Unfortunately,
SIIA submits that the PFI does
[[Page 29084]]
not a?? these ?? and ignores significant parts of the Court of
Appeals's decision regarding ?? an?? and their consequences. Ever
where it seems to address the ?? identified by the Court, the PFJ is
so porous that it provides little or no protection a ?? a repetition
of Microsoft's past anticompetitive acts.
Flaws in the PFJ's Remedies. The two most salient remedies
imposed?? Microsoft under?? PFJ concern flexibility for OEMs to
install competing middleware and A?? DOJ's Competitive Impact
Statement ("CIS") stresses the importance of preventing
future??ses in these ?? The theme of the CIS and PFJ is that
competition was injured in this?? prin?? because Microsoft's illegal
conduct maintained the applications barrier?? personal computer
operating system market by thwarting the success of middleware ??
would have ?? competing operating systems gain access to
applications and other need?? complements. The PFJ is intended to
restore competition. In fact, however, the PF?? so loosely written
it is likely to have only the most modest effect on Microsoft's
actions- ?? all on its ability to monopolize new sectors of the
information technology market.
a. Middleware. Middleware was at the heart of the case. Impelled
by enth??asm for the Intr??, PC users embraced Netscape's browser,
and Netscape (particularly in c?? ??ination with JAVA) was able to
provide developers with a new, non-Microsoft?? h to the des?? This
is not simply an academic observation on the part of S??A and its ??
For ?? every one of our members, the rise of independent middleware
opened ?? that were the objects of intense strategic focus. The
reason for this ?? was that our ?? programs suddenly could use
Netscape and JAVA as mediators to ?? launch and ?? the desktop. For
the first time in year it seemed possible that independs?? software
venders (ISVs) would have a way to reach the great majority of
computer users ind??dent of Microsoft. Indeed, because they could
run on other operating systems. JAVA and?? cape's browser suddenly
offered these ISVs an even broader market than they could obtain
developing for the Microsoft operating system.
The CIS describes how this competitive threat struck at the
heart of Microso?? monopoly, and Microsoft's counterattack used
every possible weapon, including?? ??lawful tactical??
"leveraging" its operating system monopoly. The PFJ
seeks to prevent Mi?? soft from repeating these tactics by ensuring
that future middleware vendors are not denied ac??to the desktop.
But the measures chosen are unlikely to have that effect. As a
matter of ?? they are family weak. Microsoft itself is expressly
granted nearly complete control over ?? meaning of
"middleware" under the PFJ.
Equally important, these measures are written for a world that
no longer exis?? The market ?? has moved on. The PFJ grants to
hardware makers the right to add middle wa??cons to their ?? but
these companies simply lack the financial strength and the
motivation??levelop new software that might threaten Microsoft. To
take one example, OEMs have been ??ured by Microsoft for several
monks that they may customize their desktops by uninstalling??
??soft's Internet Explorer; not one has actually done so. Meanwhile,
the PFJ does not give i?? endent software vendors who might
challenge Microsoft the one thing that would tempt then?? a channel
to users that is not subject to exclusionary practices by Microsoft.
On the ?? trary, the PFJ pro??ects middleware only after Microsoft
has launched a similar product, by w??time it is too late.
Developers of applications will always develop first and most
enthusiastical?? or the most w??dely deployed platform, because that
platform offers them the largest marke ?? the most users Users, in
turn, will typically choose the most widely deployed platform beca??
it offers ?? threatened Microsoft in 1995-98 because it could
offer developers an even bigger m "Microsoft plus"
market.
??u Microsoft cannot be seriously challenged in that way again
because no n??enact to the middleware market can hope to equal the
ubiquity of Microsoft in that market, l??:one achieve the
"Microsoft plus" market that Netscape and JAVA offered
in 1995-98.
b. APIs. The PFJ also requires that Microsoft disclose the APIs
used by Mi?? soft middleware to interoperate with the Microsoft
operating system. Here, too, the PFJ?? ??ers both from porous
drafting, and #ore a curious blankness regarding the sources of
Micros?? dom?? of the market.. The provision is replete with terms
that are not defined (?????? is rimed or distributed
("Microsoft Middleware") or, most remarkably. are left
to be defined ?? Microsoft's "sole discretion"
("Windows Operating system Product").
In any event, the PFJ does little more than throw Microsoft into
a briar patch?? as long ??called to?? Microsoft's ?? application
developers writing for its users. To write programs for Microsoft
users, ?? developers must have access to Microsoft's APIs. The APIs
are their air supply, an ?? who are too independent or too
successful, it has every incentive to provide extensi?? inf?? about
its APIs. And the PFJ leaves the valve firmly in Microsoft's??
allowing 'Microsoft to impose royalties and other restrictions
on developers who on, access to the APIs. The PFJ thus requires
little or nothing more than Microsoft would provid?? its own. Unless
developers can be guaranteed an air supply that does not depend on
Microso?? hey wi11 not ?? the company that can unilaterally cut them
off.
2. Backward-Looking Remedies. In short, when all is said and
done, this?? wagers everything on a series of measures that might
have prevented Microsoft from unlaws?? y destroying Netscape in the
browser wars. Even this is open to question, but the real ?? lem
with the PFJ lies deeper, for there is not the slightest chance that
these measures will ??ow a new competitor on the order of Netscape
to emerge. The market has moved on. Focusin?? ??y on prever??ing a
repetition of the unlawful actions Microsoft took in 1995-98
is like neg?? ling an end to World War II by letting the Germans
keep Paris as long as they promise to rel?? d the Mag??st Line. Such
a limited focus is not just improvident, it ignores the instructions
of the ??art of ??? "fruits" of its unlawful conduct.
This cannot be accomplished by relying on the emer??ce of some yet
to-be-identified middleware challenger. To the contrary, Microsoft
has alre?? solid find its unlawful victory into a browser monopoly,
and it now bids fair to make?? entire Interne?? into a proprietary
Microsoft environment. Any remedy that seeks to deny M??soft the
fruits of its unlawful conduct must at a minimum prevent Microsoft
from using the?? conduct to extend its control or services that rely
on Internet Explorer.
For that reason, SIIA urges that the PFJ be expanded to address
present and?? conditions, and not just the dead past. The PFJ must
take steps to reduce the massiv?? tructural advantage that Microsoft
has achieved by unlawfully leveraging is opiating systen?? into
Internet-access These steps include opening the code of Inwrn??
restricting exclusionary uses of Windows XP and the tools that make
up Mic?? .NET in tiative, preventing Microsoft from
"polluting" standards by adding?? extensions, and
inclusion of Microsoft's productivity applications in any
relief.
3. Missing Principle. One further gap in the PFJ deserves
mention. If the?? changes required by the PFJ are of very dubious
force, the only provisions likely to ?? continuing value are those
that spell out broad principles of conduct. Here too thee?? room for
disappointment. The PFJ does not prohibit Microsoft from
intentionally di??,ling or adver?? affecting the operation of
competing products. No explanation is offered ??
4. Procedure. Finally, SIA wishes to address one procedural
point. At the?? this proceeding are the decisions of the Court of
Appeals and the District Court.?? about Microsoft's conduct and
about the appropriate remedies are an essential?? interest analysis.
But they are also at the heart of the case between the remaining
liti?? and Microsoft. It may be difficult to reach a conclusion
about this PFJ without Pref?? decision on the yew issues that the
parties intend to litigate before the Court in the ?? To do so on
the basis of a few Tunney Act filings rather than a full record
might do a?? to the parties to that litigation. SIIA therefore
respectfully requests that this Court ?? the PFJ and in terms under
advisement until the conclusion of the litigation. In sum, the PFJ,
as written, represents a failure of will and technological wis??m
that canh?? approved by this court consistent with the unanimous
liability decision o??3 Court of Appeals, traditional standards of
antitrust remedy law, or the Tunney Act.
II. ARGUMENT
A. Standard of Review
Under the Tunney Act, this Court is required to review a
proposed settlemen?? Deter??e whether it serves the "public
interest." In most instances Tunney Act pr?? occur prior or to
trial and without any judicial findings of liability. The Act was
pass?? stage if the proceedings to the sunlight of public scrutiny.
In the unique?? this case, however, where the Court of Appeals
issued an opinion on the merits prio?? inition?? ?? consistent with
the Court of Appeals opinion. The Court of Appeals ruled,
"[t]he Su?? has expl??red that a remedies decree in an
antitrust case must seek to "unfetter a ??
[[Page 29085]]
conduct," Ford Motor Co., 405 U.S. at 577, to terminate the??
deny in the defendant the fruits of its statutory violation, and
ensure that there remain?? practices likely to result in
monopolization in the future. Thus, this Court must ??ider each of
these factors in its public interest analysis.
Ordinarily, the Department of Justice is given prosecutorial
discretion in de??ng whether to bring a civil antitrust action. As a
result, courts generally require that a ??posed settlement only be
"within the reaches of the public interest'," which
approval "even if it falls short of the remedy the court would
impose on its own." Thus, in?? Tunney Act cases, courts have
permitted entry of consent decrees which were mere?? with the
government's general theory of liability as manifested in its
complaint" ?? "gran??] relief to which the government
might not be strictly entitled" under the ?? Ben??. 648 F.2d
at 660.
In this case, after trial and with the benefit of an extensive
factual record, the?? App?? held specifically that relief must seek
to "terminate" Microsoft's operating. tem?? monopo??
"unfetter" barriers to competition to the OS market, and
"deny" Microsc?? he "fruit" of its statutory
violations. DOJ itself has emphasized to this Court that "b??
the applical?? remedial legal standard and the liability
determination of the Court of A??als are clear ?? Here, there is no
question that the Court of Appeals is binding on this Co?? as well
as the ??itigins. Consequently, the Court of Appeals" mandate
is the "public interest as?? pressed in the ?? laws."
"[A] remedies decree in an antitrust case must seek to
"unfetter a market ?? antico?? e??itive conduct," to
"terminate the illegal monopoly, deny to the defendant t??
fruits of its sta??tory violation, and ensure that there remain no
practices likely to result in me?? ??olization in the ??lure."
Microsoft III, 253 F.3d at 103 (quoting Ford Motor Co. v. United S??
405 U.S. 5??2 577 (1972), and citing United States v. United Shoe
Mach. Corp., 391 U.S. ?? 4,250 (1968) (internal citations omitted)).
No new legal standard for monopolization relief ?? is put forwar??
by the DC Circuit. On the contrary, the Court adopted the
traditional test ??d on by the Supreme Court. Joint Status Report,
United States v. Microsoft Corp., at 2g (D.DC filed S?? .20, 2001).
The CIS, however, articulates a different and considerably less
rigorous stan??d for a reme??y in an antitrust case. According to
the CIS, "[a]ppropriate injunctive relief. ??hould: (1) end
the ??lawful conduct; (2) 'avoid a recurrence of the
violation" and others like it??d (3) undo is anticompetitive
consequences." Significantly, the formulation advocated DOJ
does not re??re the remedy to 'terminate" the illegal
monopoly, or to 'deny the defendan??e fruits" of its ??
awful conduct. Regardless of whether the DOJ formulation may have
been ??propriate in pas??es, it is simply the wrong standard of
review for the remedy in this case, where the Dist?? Court and Court
of Appeals have clearly outlined how Microsoft violated th?? Her??an
Act. The PFJ is deficient under either formulation. There are
substantial disparities ??tween the CIS and the PFJ. And the DOJ has
not even attempted to defend the PFJ under the ?? string??, and
binding, Ford/United Shoe/Grinnell standard that this Court must
see?? enforce. CIS at 2.4 (citations omitted).
?? SIIA's Remedy Proposals are Reasonable and Proportional
to Microsoft's Unlawful Conduct ??UA's proposed modifications to the
PFJ, described in detail below, are both ??umerous and substantial.
Regrettably for consumers, Microsoft's already proven monopolist
??cts have so destroyed competition in the operating systems market
that adoption of these pro??als is critical if the PFJ is to
"unfetter" the market from Microsoft's anticompetitive
cond?? "terminate" Microsoft's illegal monopoly, deny
Microsoft the ""fruits" of its Sherma??ct
violations, and prevent future monopolistic acts, in accordance with
the Ford/United Shoe/Grinnell standard for remedies.
There are similarities between this case and the AT&T
divestiture, the last ??ge mo??ization settlement under the Tunney
Act. SIIA submits that in This case the PFJ is simila??y completely
inadequate to remedy the serious antitrust violations in this ma??.
In the former matter Judge Greene reviewed the evidence on all
issues except remedy. Af?? evidentiary hearings, third-party
submissions, and lengthy oral argument, Judge Gre?? declined to
approve the consent decree as proposed because he concluded that it
was inadequ?? in certain areas and precluded the Court from
effective oversight and enforcement. Judge Gre?? required
significant changes to the proposed decree before he would consent
to enter the settlement under the Tun??ey Act's public interest
standard, holding that "[i]t does not follow... that ?? Court]
must ?? ??uestioningly accept a [consent] decree as long as it
somehow, and however ?? inad??tely, deals with the antitrust...
problems implicated in the lawsuit." SIIA ?? respect??lly
requests that this Court follow Judge Greene's prudent actions and
send ?? parries bac?? to the negotiating table to formulate an
appropriate PFJ. This Court should re?? ??e its con??s on on the PFJ
until after the pending State case has been litigated.
C. The PFJ Fails to Address the Core Violations Affirmed by the
D?? Circuit
1. The PFJ Does Not Eliminate Microsoft's Binding of its
M??eware to its Operating System As the C??S indicates, the core
manner in which Microsoft unlawfully mainta??d its Win?? Operating
System ("OS") monopoly was by bundling and tying
platform ??dleware to the OS. Microsoft used this strategy to defeat
the alternative platform threats pos?? by Nets?? and JAVA. The DC
Circuit ruled that these actions constituted unlawful ??intenance of
mo??poly under Section 2.
a. Failings of the PFJ
It is critical for this Court to understand that the business
and economics that ??ive the software industry demonstrate
conclusively that the ubiquity of a development platf?? will almost
always beat technological superiority. The common interest of
software dev??bers and cons?? in adopting the most uniform platform
is the basis of the Microsoft mone??y. As a result, if Microsoft is
allowed to continue to bind or bundle its middleware offerings th
the Windows OS, the ubiquity of its middleware will be permanent,
and active middiew?? comp?? will never emerge. Microsoft will enjoy
a perpetual maintenance of its nopoly, codified and reinforced by to
the PFJ, and consumers will suffer a significant retardi?? of
innnov??tion that would have otherwise occurred. The negative
consequences of this ??ome on innov??tion cannot be overstated. If
there is no way to reach consumers except throu?? Microsoft's
platform, and if Microsoft remains free to cut off the access of
applicati?? that are "too ??ssful," then there are few
incentives for independent innovation in the fie?? that Microsoft
occupies. Yet one of the principal comparative advantages currently
enje?? by the Un??tates" economy and its consumers is
generally superior technological deve?? ??nent and innovation.
Allowing Microsoft's monopoly to continue unfettered (as the PFJ
doe?? would signi?? erode this advantage over a short time.
The CIS recognizes this central fact and claims to have
addressed it. The CIS ??ays that the PFJ will ensure that OEMs
(manufacturers of PCs) have the contractual and eco??nic freed?? to,
distribute and support non-Microsoft middleware products without
fear??oercion or retaliation by Microsoft. Further, the CIS claims
the PFJ will ensure that OEMs have he freed ?? to configure the
personal computers they sell to feature and promote non-Microsoft
midd?? are, and will ensure that developers of these alternatives to
Microsoft prod?? are able to fea?? those products on PCs. The CIS
also claims the PFJ will ensure that OEM ??ave the freedom to offer
non-Microsoft middleware, by requiring Microsoft to provide the OEMs
with the ability to customize the middleware installed.
SIIA considers these goals to be laudable. But flaws in the PFJ
as written m?? that it cann?? achieve these goals, or even reduce
the monopoly Microsoft currently enjoys??
i. The "Plumbing" Problem
First, merely allowing OEMs and end-users (individuals and
businesses) to ??veicons and shor?? cuts (so-called "end user
access" ) does not solve the underlying problem. ?? PFJ leaves
all of the browser middleware on the PC hard disk, which means that
it is ava??le to Window, and all Windows applications. In other
words, the PFJ does nothing to re??e or modi??y the code itself- the
hidden "plumbing': by which Microsoft has bound Intel Explorer
(IE). Windows. As a result, third-party software developers can
continue to rely Microsoft's middleware plumbing--as long as
they write Windows applications. N??e of the incer??ves that bind
developers to Microsoft will change under the PFJ because dev??ers
will still b??sured that Microsoft's middleware will be installed on
about 95 percent of??sktop PCs whether or not the "end user
access" is removed. In short, Microsoft can still enjoy
benefit it wres??ed from Netscape and JAVA when it forced their
middleware out of the main??un. That bene??vas not a ubiquitous
icon--it was ubiquitous plumbing.
The PFJ thus fails to address the network effect that drives the
Microsoft mo??oly corrp??tiors will still lice the same
[[Page 29086]]
applications barrier to entry because Microsoft's development
platform platform will still be ubiquitous. ISVs will therefore
continue to write ??plications to the vi??osoft APIs, ignoring the
more narrowly distributed--and therefore highest perunit??
??lrematives. If anything, the PFJ helps to lock in this network
effect by mere??iving OEM?? and end users the option to remove the
icons and shortcuts rather than allow them to decide?? whether to
add the Microsoft middleware in the first place. For this reason are
the PFJ fails to meet even the requirements of antitrust remedies
law and does not comport the DC Circuit opinion.
ii. Distribution of middleware
As is detailed throughout these comments, it is import-ant for
this Court to un??stand that Microsoft currently enjoys a monopoly
in the distribution channel--namely, the Win??ws oper?? system.
The PFJ does nothing to alter this monopoly since Microsoft is
ali??ed to contr?? integrating its middleware into its ubiquitous
OS. The "removal" of the mi??eware in the s??peificial
manner proposed by the PFJ permits Microsoft to commingle code for
middleware with the OS, and does nothing to prevent Microsoft from
protecting its w??ows monep??ly power through the same exclusionary
means used against Netscape and ??A. Nothing is more persuasive than
experience, and experience suggests that granting Ms the right??
uninstall" IE is a meaningless remedy In fact, Microsoft has
already revis?? Windows XP so that OEMs may"
"uninstall" end user access to IE. Nor one OEM to date
has?? en adva??age of this option.
iii. Reliance on OEMs
SIIA also believes that the PFJ's reliance upon OEMs in this
section of the is mis??d OEMs have historically been low-margin
economic dependents of Micr??ft, and they have therefore been
reluctant to challenge Redmond. Since 1995-98, this situa?? I
has worseued. Currently, PC manufacturers face falling prices and
demand. It is not ec??mieally rational in this market environment to
expect OEMs to invest in the research and de??pment, and product
design work, necessary to replace Microsoft's "free"
middleware with ?? products of c??peting vendors. OEMs should have
the option to ship Microsoft middleware hey choo?? do so by
obtaining it from Microsoft, and not because they were forced to so
by Microsoft's bundling or bolting of the middleware are to the OS.
iv. Lack of exclusivity
Another essential element of the PFJ's supposed remedy to
Microsoft's mon??ly is to crea??e "marketplace" for
competitive middleware on the PC desktop. This
"marke??ce," however is illusory. It will never occur
under the current structure of the PFJ. Deve??ers canno??be offered
the "Microsoft plus" market that Netscape and JAVA
offered befo?? Microsoft's unlawful counterattack. Microsoft will
still have to all PCs for fr?? by virtue of its ?? r??ution
monopoly. Consequently, its competitors can only hope to be instia??
alongside Microsoft's middleware on some of the machines sold by
OEMs. Instead "Microsoft plus" they will have to settle
for "Microsoft minus." Since software dev??pers write
first ?? the most widely available middleware (the applications
barrier to entry l9), c??eting middle are vendors will not pay much
for the chance to run a distant second to Mir??oft in ubiquity. Nor
does the PFJ allow independent middleware companies to purchase a
??icrosoft-free" market; without the commingling remedy,
alternative middleware vendors cart?? pay for exclusivity. The PFJ
only permits competitive middleware vendors to pay for share ??ccess
to some PCs. SIIA's proposed anti-bundling remedy, in contrast,
would immediately ??ease the value and competitiveness of the
"marketplace" by permitting PC manufacturers to y
differn??late their products with competing middleware.
b. Remedies for the PFJ's failings
The appropriate remedies proposed by SIIA for this bundling
problem are n??erous because the problem is so central:
Microsoft should be prohibited from incorporating any middleware
it the OS (including for purposes of this section IE), and
prohibited from making any Microsoft Middleware Product the default
middleware, i?? order to prevent the continuation of the
applications barrier to entry. Further, the definition of Middleware
Product in the 2000 Decree s??ld be amended by:
The definition of "Bind" in Section 7.d of the 2000
Decree should be supplemented to add "and all of its related
files, including, without limitation, by commingling of code;"
IE, and other browsers (includ?? MSN Explorer) should be eliminated
from the definition of" Middle?? Product, but instead covered
by the open source remedy described and Microsoft should be
prohibited from "altering or interfering with the choice of
middleware by a user or OEM, including without limitation setting or
changing MIME types to automatically launch a Microsoft Middleware
Product, plug-in or other Microsoft software." Microsoft
should be provided with a 90-day transition period in whi??
reconfigure Windows XP and any other existing OS products that
currently bind Middleware Products with the OS. Three other remedial
points bear discussion here. First, the current definition Microsoft
Middleware or Microsoft Middleware Product allow Microsoft to
unilate?? Dete??e the scope of its obligation simply by deciding
whether to ship a product ??rately from Windows. The definition
under the PFJ provides that if Microsoft has distribu?? middleware
separately from the OS, it is a Middleware Product. In S??A's view
the defin??on should provide that if anyone distributes middleware
separately from the Middleware Product, and subject to the binding
prohibition. Thus, if a competitor c?? middleware technology,
Microsoft would therefore be precluded from introducing it versic??
integrated: with the OS, and thereby stifling the potential for the
new middleware techn??logy to erode the applications barrier to
entry. In other words, the proposed r?? definition would ensure that
Microsoft cannot gate" the development of middleware integ??
new innovations pioneered by third-parties into its OS, instead of
distri?? Mi??ft "clone" as a separate retail product.
Second, the Office Suite of productivity applications and the
Outlook email infor??tion management program should be added to the
definition of Middleware order preclude Microsoft from evading the
constraint of this section of the PFJ by b?? or O?? technology (each
of which exposes APIs and can erode the applications entry ?? the
OS. Third, Microsoft should be required to provide IE source code on
an open s?? descr??bed below. This is necessary because IE, which
once was a classic example ?? middleware, has now been so thoroughly
integrated into the OS by Microsoft that P?? Mi??ft to bind
middleware to IE would allow .Microsoft to circumvent the anti-b??
pro??on. Under a properly revised PFJ: IE would be treated as a
Windows Operating System Product "for purposes of this
section." To the extent middleware is available in the retail
channels from competitors, Microsoft would be barred from tying,
binding, or bolti?? (either contractually or technologically)
similar technology to the operating system. Microsoft would be
prohibited from shipping Windows to OEMs wit Middleware or
Middleware Product included. Both OEM and end users would, of
course, be free to use Microsoft middleware received by download, or
sold in retail stores. OEMs would also be free to procure
Microsoft's middleware separat?? and include that software on their
retail PC systems. Microsoft products that would fall under the
middleware restrictions l include Media Player and Windows
Messenger. The Court of Appeals" decision in this matter
supports the SIIA's proposed a?? reined?? While the Appellate Court
reversed the District Court's conclusion that Mi?? exc??y conduct
violated Section 1 as a per se unlawful tying arrangement, it ??
affirmed liability for monopoly maintenance under Section 2 for this
same behavio?? "[t]??ologically binding IE to Windows... both
prevented OEMs from pre-insta?? bro??s and deterred consumers from
using them." The Court specifically fo?? Mic??ft's commingling
of software code for Windows and IE was unlawful and r??, that its
remand of the Section 1 tying claim was wholly consistent with
imposing S?? liabi??y for essentially the same conduct: "The
facts underlying the tying allegation overlap ??th those set
forth.., in connection with the * 2 monopoly maintenance c?? Thus,
this Court is not limited in an3" fashion in altering the PFJ
to restrict Microsof?? bund?? and bind other software with the OS.
The DC Circuit's express affirmance of liability for binding IE
to Window signi?? because Microsoft sought to limit ;he Court's
holding solely to the more on which the DC Circuit "also
affirmed, of excluding IE from the so-called "add/re??
Micr??ft argued that its commingling of code was appropriate and
that the Court s?? affi?? the ground that it had not allowed end
users a means of deleting the IE i?? desk?? The Court of Appeals
rejected Microsoft's argument out-of-hand.
2. The PFJ Does Not Prevent Microsoft from Using Window Features
to Protect Its OS Monopoly
a. Failings of the PFJ
The current computing market is shifting away from client-side
software, to??d an
[[Page 29087]]
envit??ent of Internet-based ("distributed")
applications and Web services. Eve??ng from spread sheets and music
to air travel reservations and photo development can be off?? as a
web service. Microsoft has made clear its desire to shift its entire
business from a produ??icensing model to a model in which it derives
revenue from a subscription of services. Microsoft has designed
Windows XP to distribute key middleware components such as Passport,
??dows Messenger, and Windows Media Player, while at the same rime
making them archit??urally necessary for the provision of many
internet services, in addition, Microsoft has in??singly been ??ding
Web-based services into its Windows operating system, thereby plac??
competitive and innovative services at a great disadvantage. This is
an all-too-fami?? tactic. By bundling and tying its Web-based
services and Internet middleware to Windows?? Microsoft further
reinforces the applications barrier to entry achieved by locking
us?? into its own Web-based services and proprietary Internet
interfaces. The CIS stares that the PFJ is designed to prevent
recurrence of the same or ??ilar prac?? that Microsoft employed to
reach its current monopoly position. As disc??ed above, however, the
PFJ does not achieve the goal stated by the CIS because it fails to
proh?? Microsoft from continuing to bundle and tie middleware to its
Windows operating s??m, despi??he Court of Appeals" conclusion
that these same acts were among Microsoft??ore Shern?? Act
violations. The PFJ does nothing to impede Microsoft from repeating
?? pattern of exclusionary conduct because the PFJ is restricted to
the software market and produ??hat existed in 995-98, and does
not address today's Web-based marker in which service??nd multi??ia
are replacing client-side software. The PFJ does not cover Web
services?? Web-based applications, or Internet content, all of which
Microsoft has integrated into Window??P. Therefore Microsoft is free
simply to continue using its familiar repertoire of anti??petitive
tacti??s (e.g., tying; technical restrictions on user choice, etc.)
to protect its OS again??reats in the Web-based market through its
Windows XP design. These inadequacies of the ??run completely
counter to tile public interest and only compound the problems
caused b?? Microsoft's unlawful conduct by enabling Microsoft to
extend its unlawfully-won monopoly to next generator of technology.
b. Remedies for the PFJ's Failings
The PFJ should be modified to explicitly foreclose Microsoft's
use of Windo??XP features to protect its Windows monopoly against
Internet-based competition from ??er product?? and Web-based
services. More specifically, with respect to the PFJ's OE??ovisions,
SIIA proposes the following:
. the OEM provisions should be amended so that Microsoft may not
re??ct (by contract or otherwise), or retaliate directly or
indirectly against, a ?? OEM from modifying, adding or deleting
icons, taskbars, toolbars, li?? and default pages, or other similar
end user features, in Internet Exp?? and successor browser products
whether or not such browsers are distributed together with or
separately from a Windows Operating Sy??m Product;
. the OEM provisions should be expanded to cover the current
configu?? on of Windows XP by permitting OEMs to remove,
modify" or substitute ?? "My Photos," "My
Music" and similar OS folders; and
. Section 3.a.iii.2 of the 2000 Decree should be clarified to
require Microsoft to compensate an OEM for the placement of any
icons of Microsoft products or services on the Windows desktop.
. With respect to tying of products and services, the
prohibition on contractual tying in Section 3.f of the 2000 Decree,
precluding Micro?? from "conditioning" a Windows
Operating System Product license on 'OEM or other
licensee" agreeing "to license, promote or
distribute" ??y other Microsoft software product,
"whether or not for a separate or positive price,"
should be reinstituted. In this regard, this provision ??uld be
supplemented to include a prohibition on tying or bundling Web-??ed
services, or access to Web-based services, with the Windows OS or
??Microsoft Internet browser.
Only with these modifications can the PFJ satisfy DOJ's
own remedial goal?? the Court of Appeals" requirement to
prevent future monopolistic practices. The modification?? the OEM
provisions are essential to enabling OEMs" flexibility to
differentiate their products OEMs must be free to eliminate or alter
start menus and to integrate value-added technologies i??eir
offerings. This ability must not be constrained by first having to
remove or otherwi?? ??hange the Windows bundle. The key to an
effective remedy is changing the ability of Microsoft to make all
systems integration and software bundle decisions, and moving some
of that dec??-making power down the supply chain either to the OEMs,
or integrators, acting on their beh?? Moreover this ability should
not be limited to fringe, applications, but should give OEMs the
ability to focus on the core applications actually driving PC sales
and demand at any??en point. This modification is designed to
prevent the further reinforcement of the ap??tions barrier to entry
by locking users into Microsoft's Web-based services. Microsoft's
??rol over interoperability interfaces is anticompetitive; it
directly reinforces the applications b??er to entry reduces
opportunities for ISVs and competing platform suppliers to
cr??platform applications, and prevents emerging computing platforms
(e.g., handheld devices, d??al telephones, etc.) from evolving into
at least partial substitutes for desktop PCs.
Finally, it is critical to give OEMs the ability to customize
and earn revenue??m desktop and browser configuration.
Unfortunately, Microsoft's ability to impose its produc??acement and
icons on the browser and the desktop for both products and services,
without "??ng" for me placement, undercuts the ability
of OEMs to earn revenue primarily because it e??inates the ability
of the OEMs to provide exclusivity. This was most evident m Summer
2001??hen AOL's deal with a major OEM for placement of an AOL icon
on the Windows des?? was thwarted by Microsoft's insistence that its
corresponding icons also be included by??OEM, without compensation.
Microsoft's action undercut the economic value of the AO??clusive
arrangement and the OEM's ability to exercise its right to desktop
flexibility.
The Court of Appeals's remedial standard in this case supports
SIIA's prop??ban on con??al tying, which goes directly to
Microsoft's ability to control the applicati?? barrier to entry. The
District Court is specifically, obligated under the DC Circuit's
standard "ensure there ??ain no practices likely to result in
monopolization in the future." This req??s a cont??al tying
prohibition to include not just the markers in which tying was
used??eviously to m??in Microsoft's OS monopoly, but also the
markets, such as the Web-based ??vices and applications integrated
in Windows XP, in which tying would likely result in new m??polies
in the future. A prophylactic ban on contractual tying is necessary,
taking into account?? Court of Appea??s remand of the Section 1
claim, because without it Microsoft could easily ??e a prohi?? on
technical bundling middleware with Windows.
With respect to Web-based services, two additional points
directly support th?? Contra??al remedy. First,
"Hailstorm"--now renamed NET MyServices--is a
de??opment platform that industry experts agree is middleware under
any definition. Second, un?? products, there has never been a claim
that technological efficiency is achieved by ty?? Web-based services
to the OS. Therefore, the Section 1 tying issues addressed by the
C?? of Appe?? are immaterial to a tying ban on Web-based services.
The Appellate Cou??ite clearly recognized that "[t]he facts
underlying the tying allegation substantially overlap wit??ose set
forth in Section II.B in connection with the 2 monopoly
maintenance claim." ??use OEM and ?? contractual tying was a
central element of Microsoft s unlawful monopoly ??intenance, it
should equally be a central component of any remedy.
In its discussion of relief, the Court of Appeals did not
indicate that any part??lar form of exclusionary behavior was off-
limits, but at most that there should be an "indicat?? of
significan causal connection" between a remedy and maintenance
of the Windows ??nopoly. Curiously Assistant Attorney" General
James has reportedly argued that elimination ?? tying relief from
the PFJ was required because the DC Circuit "excluded"
the tying clai?? In the con?? of the Court's actual decision, that
is plainly incorrect. Regardless of the de?? on by DOJ and the State
plaintiffs not to retry Section 1 liability, the Court of Appeals
re??d was based solely on application of the particular clements of
Section 1 tying law, indepe??nt of both Section 2 liability (which
it affirmed) and remedy.
3. Microsoft Has Unfettered Ability. to Define Certain Term??
the PFJ
a. Failings of the PFJ
The PFJ does not adequately remedy Microsoft's monopolistic
conduct beca?? it grants Microsoft complete freedom to decide what
constitutes middleware and what qualifi??as a platform software
product. Under the PFJ, Microsoft Middleware is limited to soft??
code that Microsoft (1) distributes separately from the OS, and (2)
trademarks. A relat?? deficiency of the PFJ is
[[Page 29088]]
its provision that [t]he software code that comprises a Windows
Oper??g System Product shall be determined by Microsoft in its sole
discretion."
This ability to categorize its own products gives Microsoft
enormous flexibi?? to circu??ment the requirements of the PFJ, many
of which hinge on product definition. ?? For exam?? merely by
placing a product that would ordinarily be considered middlew ??
"inside" the OS, or by adding the trademark
"Windows" to a generic designation. Microsoft ?? exclude
the product from the PFJ's middleware definition, thereby avoiding
the triggering o??e API disclosure provisions. According to the CIS,
the PFJ will ensure that OEMs have the freedom to of?? non-Microsoft
middleware by requiring Microsoft to provide the OEMs with the
ability ??ustomize the middle ware installed. More specifically, the
CIS asserts that "[t]he limits in th?? definitions ensure that
the provisions of the Proposed Final Judgment apply to products that
ca??edibly be said to pose, alone or in combination with other
products, nascent threats to the appl??tions barrier to
entry."
The PFJ cannot possibly achieve the stated goals of the CIS if
it continues to ??ow Microsoft to determine for itself what
middleware can be included in the OS, and th??ope of a Windows
Operating System Product. By unilaterally exercising its powers
under th?? FJ, Microsoft can target competing middleware providers
and deny ISVs and others the?? PIs needed to interoperate with
Windows. As a result, the PFJ permits competitive gaming of??
settlement in o?? maintain Microsoft's monopoly power, thus reducing
innovation and ch??eling OEM flexibility into those areas chosen by
Microsoft because they do not threaten Microsoft's market power.
Microsoft's ability to manipulate these crucial product definitions
w??d deprive consumers of whatever limited benefits that the PFJ
does provide.
b. Remedies for the PFJ's Failings
To have any hope of achieving the C1S's goals, the PFJ must be
modified to ??nove from Microsoft the power to unilaterally decide
the scope of its provisions. The traderma??mitation in the
Middleware definition, and the "sole discretion" proviso
in the Windows Ope??ng System Product definition, should both be
removed from the PFJ. The concept of "redistributable"
should be eliminated as well from the: PFJ?? his would fore??
Microsoft's ability to keep key technologies outside the definition
of Mid??vare by simply ??lining to make stand-alone versions
available and thereby harming those ?? plat?? (such as the Apple
Macintosh) to which it ports Middleware today. As di??ssed above,
the CIS asserts that the PFJ's definitional limits will ensure the
PFJ's applica?? only to comp??itively significant products.
Contrary" to this claim, however, there is no rati?? conn??
between trademark status or stand-alone distribution and the
competitive ??nificance of ??leware. Indeed, in some respects these
factors act at cross-purposes to the F?? because they encourage the
same type of technical integration with new middleware that
Microsoft used with ?? to eliminate the threat from Netscape and
JAVA.
4. The API Disclosures Under the PFJ Act to Reinforce The??
Applications Barrier to Entry According to the CIS, the API
disclosure provisions of the proposed decree?? "creat[e] the
opportunity for software developers and other computer industry
participants to ??elop new middleware products that compete directly
with Microsoft by requiring Microsoft t?? sclose all of the
interfaces and related technical information that Microsoft's
middleware uses ?? interoperate with the Windows operating
system." While SHA concurs with the i?? of the CIS, a careful
examination indicates that this statement cannot be reconciled with
th??rms of the PFJ. The PHJ would not provide middleware competitors
with the information ??ded to interoperate. If anything, it allows
Microsoft itself (as it does now) to decide wheth?? when, and which
AP's to release to potential competitors, and includes mitigating
provisions ?? undermine any apparent disclosure and fortify the
applications barrier to entry.
The information disclosure and interoperability sections of the
PFJ are amo??s most complex. The core of the provisions are found in
Section III.D, which addresses the ??ue of API disclosure, and
Section III.E, which addresses the disclosure of communications
pro??ols. These core provisions rely on numerous definitions which
serve to undercut the effe??eness of these ??tions. SIIA describes
below the impact of each definition. While Section III.J appears at
the end of the PFJ, and III.D and III.E appear??ard the beginng of
the PFJ, Section III.J is directly relevant to the scope of the
disclosure??nd, in fact, relevant to no other provision of the PFJ).
Section III.I.5 is also carefully exa??ed in S??A's analysis as it
appears to grant Microsoft unique rights to insist on cross
licer??to "any" intell?? property developed through the
use of Microsoft's APIs.
a. Failings of the PFJ--Section III.D.--API Disclosu??
PFJ provision III.D requires Microsoft to disclose ":the APIs
and related doc??entation that are used by Microsoft
Middleware" (defined in the PFJ) "to interoperate"
(under??ed in the PFJ) "with a Windows Operating System
Product" (defined in the PFJ). This pro??on simply restates
Microsoft's current business practices.
Relevant to the question of whether any new information is
actually require?? the definition of documentation" within the
context of API disclosure. "Documentation ??is defined in
Section VI.E of the PFJ as all information regarding the
identification and means of using APIs that a person of ordinary
skill in the art requires to make effective use of those APIs. Such
information shall be of the sort and to the level of specificity,
precision and detail that Microsoft customarily provides for APIs it
documents in the Microsoft Developer Network.
It is therefore unclear whether any information disclosure is
required under ??section of the PFJ that is not already part of
Microsoft's information disclosure regime through ?? Microsoft
Developers Network. The fact that the critical term
"interoperate" is left ??efined suggest that the parties
did not have a meeting of the minds regarding the kind of in??mation
disclosure that is required under the PFJ. Likewise, the decree does
not specify wha??meant by "use" of APIs. In fact, the
phrase "technical information" does not even appear in
th??roposed decre??. In contrast, the 2000 Decree's interim conduct
remedies included a detail??efinition of "Technical
Information" (Section 7.dd) that the Department and Microsoft
have ??out expla?? eliminated from the proposed decree.
The utility of the information disclosure is also constrained by
what Microsoft's permitted to define under the PFJ. As previously
noted, Microsoft "in its sole discr??" shall determine
the software code that comprises a Windows Operating System Product.
??crosoft, therefore, could redefine some or all of a particular
"middleware" technology as par?? Window's and escape any
of the disclosure requirements of Section III.D.
Similarly, the definition of "Applications Programming
Interfaces" lacks cle??nd effective meaning. APIs are defined
as "interfaces, including any associated callba??terfaces,
that Microsoft Middleware running on a Windows Operating System
Product uses t??ll upon that Windows Operating System Product in
order to obtain any services from that W??ows Operating System
Product." This definition is inherently ambiguous because it
de??ds on two terms, Windows Operating System Product and Microsoft
Middleware, which are ?? defined by Microsoft alone.
It also remains unclear when there would be any information
disclosure req??d by the PFJ. API disclosure for new "Windows
Operating System Products" is required in ??mely ??
mann??r"
This term is defined as "at the time Microsoft first
releases a beta test ?? of a Windows Operating System Product to
150,000 or more beta testers." In the sof?? e industry, of ??
the ?? "beta tester" has a meaning distinct from
"beta copy." In the context ?? Microsoft products, even
assuming that Microsoft has ever had 150,000 "beta tester ??
it would be easy to circumvent the timeliness requirement of this
provision by limiting distri?? on to under 100 000 beta
testers--a number that is substantial.
The professed objective, as stated by the government, is to
encourage "midd?? are innovations." Yet, according to
the specific terms of the PFJ, innovators are ?? those who are not
entitled to APIs under the proposed decree. What innovators require
is ?? the APIs that Microsoft middleware calls upon to perform its
functions, but rather others, like ??indows APIs, that the next or
broadened competing programs can call when executing their ??. By
PFJ at 17. james.htm
b. Failings of the PFJ--Section III.E--Communicati??
Protocols
The CIS asserts that the provisions in Section III.E of the
proposed decree w prevent Microsoft from incorporating into its
Windows Operating System Products features functionality with which
its own sender software can interoperate, and then refusing make
avai?? information about those features that non-Microsoft servers
need in order ??ave the same opportunities to interoperate with the
Windows Operating
[[Page 29089]]
System Product." the dec?? API disclosure provisions, the
specific obligations of Microsoft found in th?? FJ do not meet ??
Department's own test articulated in the CIS.
Section III.E of the decree does not require the disclosure of
any APIs to co?? ??titors, only the release of "Communications
Protocols." Microsoft is free to refuse to disc ?? to comp??s
any of the APIs that enable its server OS products to interoperate
with ??ows, ?? Middleware.. or with Microsoft applications such as
Office and Ou?? Thus. the ?? by Windows to interoperate with
Microsoft s server OS, and vice-ve?? are simply ?? disclosable under
the proposed decree. Nothing in the prevents Microsoft from building
"features and functionalities" for server
interoperability into Windows.
The definition of "Communications Protocols" itself
is extraordinarily ambi??s. The dec?? defines Communications
Protocol in Section VI.B as: the set of rules for information
exchange to accomplish predefined tasks bet?? Windows Operating
System Product and a server operating system produc?? via a network,
including, but not limited to, a local area network, area network or
the Internet. These rules govern The format, semantics, timin??cing,
and error control of messages exchanged over a network. This ??tion
does not prescribe what predefined tasks" are encompassed, and
the ??rase "for?? semantics, sequencing, and error control of
messages" can just as easily be. d to apply only ?? physical
means of sending information to or from a server (the rules for ??
smitting information packets over a network) rather then the content
of such information (the ??es for structuring and interpreting
information within such packets).. Indeed, although the descri??
Section III.E as providing support for "features and
functionalities," those ns do not appease ther in the
substantive provision or the definition of Communications Proto
Moreover, the key terms of Section III.E (like Section III.D,
described above ??re undefined. Microsoft is allowed to define the
term Windows Operating System Pr?? The co??nding prong of Section
III.E is that Communications Protocols are disclosa?? when used ?? a
Windows Operating System Product to interoperate with "a
Microsoft set operating system product." This important term,
which provides the boundary" for Microsoft" ??ligation
to disclose crucial information to rivals, is nowhere defined in the
PFJ. Likewise,?? Section III.D, the failure of" Section III.E
to define "interoperate" reminds one of the stice ??
prior failure to define "integrate" in the 1995 consent
decree.
The CIS asserts the term "server operating system
product" includes, but is limited to, the ?? Windows 2000
Server product families and any successors. The PFJ, however, does
not c??ain any of this language. Since consent decrees are
interpreted as contracts, use of the ?? to supplement a decree in
ways in which the parties did not agree is arguabl?? Unenforceable.
As with the definition of Windows Operating System Product, the
scope of ??ndows server ??ating system product"--and thus
Microsoft's Communications Protoco?? sclosure obligations--as a
matter of law is subject Microsoft's sole discretion Therefore. ion
III.E requ?? only the disclosure of the rules to accomplish
predefined tasks" (defined b?? Microsoft) by which a
"Windows Operating System Product" (defined by
Microsoft) interoper?? with a "Microsoft sever operating
system product" (defined by Microsoft).
Section III.E does not cover protocols that are implemented in
Internet ?? to support interoperability with Microsoft's server OS
products. Many, if not most, ?? with servers occur via the Internet
browser. Therefore, Microsoft can e y evade any ?? scope of this
provision by incorporating proprietary interfaces and ?? cols into
IE rather than Windows.
The obligations of Section III.E only apply to Communications
Protocols th??re "?? ... on or after the date this Final
Judgment is submitted to the Court." ??onsequently all of the
Communications Protocols built into Windows 2000 and Window ?? are
expt?? disclosure because they were implemented before the proposed
decree ??submitted. This ??ing proviso thus provides a "safe
harbor" for all current Microsoft server pr ?? since under the
anguage of Section III.E their means of interoperating with Windows
nee ever be disclesed.
c. Section III.J. Carve Out.
Any disclosure provided by Sections III.D. and III.E. is
mitigated by the car, ?? in ?? J, which permits Microsoft to refuse
to disclose, in its discretion, protoc?? API's, and ?? information
that are necessary for competition in the market and which Microsoft
has ??. This Section of the PFJ is overbroad given the
"District Court finding ?? the Court of Appeals ruling. For
example, this Section would arguably allow Microsoft ?? to disclose
any APIs between the IE browser and the Windows OS, and the
Communi?? ?? between IE and ISS, Microsoft's web server, because of
the browser's rel??ce upon authe??cation and encryption
technologies.
Section III.J.2 is even more troubling because it appears to
give Microsoft th??ght to disclosure requests even where legitimate
needs are shown to promote intero?? ability refuse For ??, based
upon highly subjective criteria determined by Microsoft, it
coul??fuse to ?? an API, Documentation or Communications Protocol
if: i) Microsoft determ?? that there is not ?? "reasonable
business need" for the information, or ii) if the entity fails
to m?? "reasonable objective standards established by
Microsoft for certifying the authentic and viability of its
business," or iii) if the entity does not agree "to
submit at its own ?? ?? program using such APIs, Documentation or
Communication Protocols to ??rd-party verification approved by
Microsoft."
d. Section 11I.I.5--Mandatory Cross "Licensing
The requirements of Section III.I.5. reinforce the monopoly
position of Microsoft and are incon??sent with the abuses found by
the Courts. This Section is sweeping in its bre?? by provi??ing
Microsoft with the right to insist upon a cross license to
"any" intellectual ??perty rights ?? to the exercise of
a third-party's options under the PFJ, including ac ?? sing APIs ??
Communications Protocols granted under Sections III.D. and III.E.
the ??sible safely provided by the last clause is entirely illusory
due to the breadth of the cross??se.
e. Other Failings of the PFJ
The CIS claims that the PFJ will prevent Microsoft from
hampering the dev, operation of "potentially theatening
software" by withholding interface information permitting its
own product to use hidden or undisclosed interfaces. The PFJ's
trea?? Of APIs ?? to achieve the goal stated by the CIS for several
reasons. API's are centra?? The barrier- Microsoft's control of
Windows APIs reduces costs for Wind, developers and raises costs for
rivals. As the Court of Appeals explained, because controls the
APIs, "porting existing Windows applications to the new
version of ?? much less costly than porting them to the operating
systems of other entrants who ?? freely include APIs from the
incumbent Windows with their own." More fundam??lly, mere??
focusing upon Windows APIs used by Microsoft Middleware Products is
no create conditions necessary for effective competition by
alternative operating systen alternative Middleware. By requiring
that APIs and similar information relate to ?? purpose of
interoperating with a Windows Operating System Product" the
PFJ doe undermine, but instead reinforces, the applications barrier
to entry. Disclosing Win?? it easier for ISVs to write more
middleware applications for the Wind.
As described in Section II.C.1 above, by limiting the add/remove
provisions "access" to middleware, the PFJ allows the
code itself to remain on all Windows ?? which ?? incentives for ISVs
to write to the APIs exposed by Microsoft mid instead of
competitors. Thus, removing the obstacle of hidden or delayed APIs
will non-Microsoft Middleware, since Microsoft Middleware code will
continue to be ??
Additionally,. failing to require Microsoft to disclose APIs and
similar interf?? (file formats data structures, code??s, and
protocols) needed to interoperate with Microsoft?? Middleware and
the Microsoft Office family allows Microsoft to repeat its anti-Net:
of ?? cross-platform middleware that poses a competitive threat. The
PFJ's require disclosure of Platform Interfaces similarly allows
Microsoft to hamper ISVs competing platform developers in the
competition for other platforms, such as non-I??desktops, handhelds
and mobile phones.
f. Remedies for the PFJ's Failings
In order to create the appropriate market incentives necessary
to reduce the a ?? SDA urges that any effective remedy must: expand
API disclosure rights to include MS Office Middleware (Wo?? Excel,
PowerPoint, Access, Outlook), include APIs and similar interfaces
exposed by, or required to interop?? effectively with Microsoft
Middleware, and expand the definition of Microsoft Middleware, and
include Platform Interfaces. To be more specific, the following
changes should be made to the PFJ: The API disclosure provisions of
Section 3.b of the 2000 decree, inch their applicability to
"Communications Interfaces and Technical Information"-
as well as the definitions thereof and of "Timely
Main--should be expanded to require Microsoft in addition to
[[Page 29090]]
make availa??to ISVs, IHVs, and OEMs, on the same terms as APIs: all
"file formats," "data structures,"
"compression/decompression algorithms ('co-
de??s')" "protocols" and related interfaces
for its Applications products and Middleware, including but not
limited to Office; and APIs, Communications Interfaces and Technical
information allowing for interoperability of Microsoft Office with
any Microsoft Platform Software, Windows Operating System Product,
or Microsoft applications software product.
Microsoft should also be required to make available to all ISVs,
IHV OEMs and third-party licensees all "Platform
Interfaces" required to enable software installed on other
computing devices (including but limited to servers, handheld
devices, digital phones, etc.), whether Microsoft software, or that
of any other company, to "Interoperate Effectively" with
any Microsoft Platform Software, Windows Opera System Product or
Microsoft applications software product. "Platfor??
Interfaces" and "Interoperate Effectively" should
be defined as set f??in Appendix A.
S??A's proposal to expand the availability of API information to
include Pla?? Inte??s (PIs), as well as Windows APIs, ensures that
both ISVs and competing pl ?? soft?? vendors will have adequate
technical information to develop applications ??ther OS platforms
that can "Interoperate Effectively" with the Windows OS
and other Micro ?? appli??nt??ons and middleware software. As a
result, ISVs would face lower economi??bstacles in porting Windows
applications to other OS platforms, and would have an incentive ??
tempt to develop cross-platform applications That would run equally
well on any PC operatin?? ??stem, or other ?? device such as a
desktop, handheld, or mobile device.
In considering this remedy it is important for the Court to
understand that All isclosure ?? by which third-party software
products run on the Windows OS, but ?? competing PC and non-PC
platforms. Therefore, API disclosure alone has a counte??ductive ill
?? impact by reinforcing both the Windows platform, and the
applications ?? to entry The communications protocols go to the
broader question of allowing third ?? to ?? and add value to the
operating system environment by better understand the way in which
its different pieces communicate. By expressly including file
formats and a structures for Microsoft applications (e.g. Office,
Outlook, Exchange) in the inform, m that Microsoft is required to
disclose to ISVs, the proposed remedy would reduce Micro ?? ability
to expl??it its control of these critical interfaces (its ability to
cut off the air supply o Vs) to reinforce the applications barrier
and to disadvantage competing middleware and ?? software vendors.
S??A's proposed remedy would benefit consumers by providing a
uniform b on which middleware and applications developers
unaffiliated with Microsoft could design, ?? and ship competing
software products that are interoperable with the Microsoft OS and
?? dominant applications and middleware products, thus eliminating
exces?? and ?? stemming from software incompatibilities. Consumers
would benefit ?? an expar?? choice of timely, interoperable software
products, allowing them to make ??chasing decisio??s on the
objective merits of product features and functions, rather than
Micr?? unilateral power to control and offer interoperable software
products.
As expanded, the remedy would also facilitate entry" by
independent platforn?? venders and act to diminish the applications
barrier to entry protecting Microsoft's ?? First, by requiring the
disclosure of file formats and related technical in?? for Office and
Outlook--two Microsoft applications products that dominate
their respe?? the proposal would support the competitive development
of applications ??can read/write files created by these Microsoft
products, thereby providing consumers w a choice of applications in
these key product categories for non-Microsoft PC platforms.
Second, the inclusion of PIs and the extension of APIs to
include technical ?? mation for Office/OS interoperability would
provide a level playing field on which unaffilia?? platform softw??
vendors and middleware developers could write cross-platform
software a??ompeting OS pro??uots. In the absence of the market
incentives that would have been created?? dives??re, these
informational parity provisions will ensure, if enforced
effectively??at the Windo?? OS monopoly is not used by Microsoft to
constrain the development of ??eting platf??s and applications
through the control of PIs and related technical informat??
5. The PFJ Fails to Prevent a Repetition of Microsoft's
Anti??apetitive Acts With Respect to NET
a. Failings of the PFJ
Microsoft has developed its .NET Framework (and has also
designed Wind??XP) with the ??ion of protecting its underlying
Windows franchise and leveraging its desk?? OS monopoly into the
broader realm of internet-based applications, Web services, and
??dheld OS sofi??. Microsoft's efforts to develop proprietary APIs
and interfaces for its NE'??amework, incl??g he Common Language
Runtime (CLR) it has now substituted for Java, h??been disc??d in
detail in a number of trade and general business publications. In
short?? first exti??shing the cross-platform threat posed by JAVA
technology, Microsoft deve??d a substitute executable runtime
environment, limited to the Windows platform only??NET Frarm?? is
the functional equivalent of JAVA, but is compatible only with the
W??ows elie??d server OS products, and with Microsoft's COM software
design structure?? Cons??tly, by maintaining the proprietary, and
Windows-centric nature of this N?? Frar??, Microsoft has succeeded
in locking Web server providers into use of ??indows serve??S
products, and it has precluded other OS platform vendors from
competing??the "Crea?? today's networked PC users.
The impact on?? and on consumers competition resembles the
effect in 1995-9?? Micro??'s campaign against Netscape and
JAVA. Consumers are denied a choice??tintime en??s, the applications
barrier to entry is strengthened against competition ??non-Micr??ft
runtime environments, and Microsoft's Windows OS monopoly is
protec?? against the ??r threat from server-based applications.
The CIS claims generally to prevent a repetition of Microsoft's
past exclusi?? conduct and??e specifically, to protect the
competitive significance of non-Microsoft Mi?? ware, networks which
depends on content, data, and applications residing on servers and
passing o?? such as the Internet. The PFJ neither accomplishes the
stated goals of the CIS nor ??isfies the Court ?? Appeals standard
of review.
The 2000 Decree included a broad API and "Communications
Interface" pr?? ion thatreq?? disclosure of interface
information for interoperability between non-Micro: OS platfor??
non-PC platforms (handhelds, phones, etc.) and Windows. The PFJ,
howe?? takes a more ??ow approach, limiting API disclosure
requirements to middleware alone a; ??ailing to addre??
interoperability with other platforms or applications. As a result,
Microsoft ??rategy of "Windo?? everywhere" is
essentially unaffected by the PFJ.
b. Remedies for the PFJ's Failings
In order to prevent further monopolistic practices by Microsoft
in relation to NET initi?? SIIA proposes to include in the PFJ a
remedy that maximizes the degree o ??terface info??ion disclosed
by" Microsoft, including with respect to its .NET framework
f?? server interc??e ability, and requires that Microsoft port .NET
to non-Windows client and s??r operating systems. Specifically,
Microsoft should be required to disclose to OEMs, ISVs and all other
parties covered by Sections 14 and II.C.9 of these Comments all
APIs, Communications Interfaces, protocols and related technical
interfaces required or useful for interoperability between the .NET
Framework and a Windows Operating System Product, and ?? the .NET
Framework and a Windows server operating system product or any Web-
based server (including Web, applications, commerce and other
Internet servers); and the .NET Framework, within six months of the
effective date, Linux and the Top three non-Microsoft server OS
platforms, and to Macintosh and the top three non-Microsoft client
OS platforms (including the leading non-Microsoft handheld com
puting OS).
As discussed in Section II.C.7 below, the appropriate remedy for
Microsoft ??lawful cond??t specifically directed against JAVA,
designed to restore a "but for" market is
"'unf??ed"' by Microsoft's illegal
activities, is to require the inclusion of JAVA ?? the Wir??S. The
remedy proposed here with respect to .NET is similar. Since M: soft
has substi?? its own, proprietary middleware for JAVA--seeking
to use its ubiquito?? distri?? capability to extinguish rival
technologies--it should be prevented fro??rofiting by its
foreclosure of rival platforms. Indeed. the PFJ includes JAVA
expressly in th?? ??finition of Mi?? eware, but has no provisions
designed to restore the competitiveness of this ??hnology or c??ain
Microsoft's present efforts to make a proprietary substitute for
JAVA.
?? Microsoft III, 253 F.3d at 103 (citation omitted).
By opening the .NET Framework interfaces, thereby"
permitting competing s ??r vendo??s to interoperate with Windows
[[Page 29091]]
PCs running .NET, and by porting .NET to o?? PC plat??s, SIIA's
proposed modification would help to prevent the end user lock-in
??forced by MET. Effective relief in this case must prevent
Microsoft's further reinforceme??the app??s barrier to entry, which
the Court of Appeals expressly found to be the ?? e most impo??t
factor protecting Microsoft's Windows OS monopoly? This remedy is
??ssary both ??eve the stated goals of the CIS and, as required by
the Court of Appeals ??deny Mi??ft the "fruits" of its
exclusionary tactics directed to Java and favoring the ??"
Fra??ork.
6. The PFJ's Lack of a Remedy for Internet Explorer Allow
??icrosoft to Retain "Fruits" of Its Monopoly
Maintenance
As the Court of Appeals affirmed, Microsoft's exclusionary
practices illegal ??naintained its O??opoly against the threats
posed by Netscape and JAVA?? Since the beg?? ng of Micr??ft's
campaign against the middleware threat, Netscape's market share has
d??ned from ore?? percent to less than 10 percent. Microsoft's
product--IE--has swept the f??rew??ing Microsoft's
anticompetitive conduct by eliminating the browser as a
viab??distrobi??ion channel for non-Microsoft middleware and APIs.
As a result, develope most impo??t distribution channel--other
than Windows itself--is now subject to Mi?? sows
mono??ly*;control. Moreover, IE provides Microsoft with the power to
require the t??of Microsoft's proprietary. APIs, communications
interfaces, and/or security protocols ?? interoperability with
desktop PCs via the Internet. As Microsoft's recent exclusion?? AVA
from, ??and Windows XP amply demonstrates, Microsoft has used its
browser mon?? y to exc?? distribution of any non-Microsoft platform
software. Unfortunately, un?? the PFJ it can ??e to do so.
a. Failings of the PFJ
The CIS claims that the PFJ will prevent recurrence of the same
or similar p??ices employed by Microsoft to reach its current
monopoly position, and restore the coral tire threat pos??iddleware
prior to Microsoft's unlawful conduct? Further, under the r?? dial
stan??mandated by the Court of Appeals in this case, the PFJ must
deny Micros?? e "fruits" violations. The PFJ plainly
fails to meet both the stated goals he CIS, of its ?? ??erman Act
and the Court of Appeals standard. Despite Microsoft's dominance of
the Web bro?? market, which ??tained as a direct result of its
unlawful conduct, the PFJ does not provid?? y remedy" for
??hether open source, licensing, source code access, or even API
availability ??addition, with the PC interface migrating
rapidly" from the desktop to the Web browser, this s ??oming
of the ?? will permit Microsoft to do with IE whatever the PFJ
precludes it from d ?? with Wind??s desktop.
b. Remedies for the PFJ's Failings
It is therefore S11A's position that the PFJ should require
Microsoft to licens ??e source code??E on an "open
source" basis, thus removing from Microsoft the ability to u
??rowsers as a?? cations and Internet gateway that further preserves
its OS monopoly. Sp??ically: Microsoft should be required to
disclose and make available for lice?? an?? third-party--within
60 days of the PFJ's effective date, and thereafter at least 180
days prior to its commercial distribution of any?? browser
product--all source code for IE and any successor Browse??
products.
Such license should grant a royalty-free, nonexclusive perpetual
lic?? on a non-discriminatory basis to make, use, and distribute
products implementing or derived from Microsoft's source code
pursuant to t?? industry-standard GNU General Public License
agreement. Microsoft should be permitted to assess an appropriate
license fee in ?? to recover its administrative overhead and
distribution costs associat?? with open source licensing of IE. The
proposed open source approach is linked directly to the central
charge ??onopoly maintenance affirmed by the DC Circuit. Not only is
Microsoft's IE monopoly a?? it" of its unlaw?? OS
monopolization, but the browser represents one of the best API
platfor ??on which ISVs ??develop cross-platform software
applications that would help erode The ap ??ations bar?? entry.
Moreover, an open source requirement would reinforce the standard
??elated provisions discussed in Section II.C.10 below by.
eradicating Microsoft's ability to ?? propr?? IE browser standards
to extend its desktop OS monopoly into Internet- a server- based
app??ications. Because the browser has become the de facto standard
interface--Internet aud??video, e-commerce and electronic mail
applications, an open source remedy ??ents Mic??ft from biasing
these crucial digital markets to Microsoft's own software an ??rmats
by supp??g only proprietary interfaces in IE.
Finally, an open source requirement is the only mechanism that
creates a "b?? r" mar??, restores the market to what it
would have been but for Microsoft's suc??ful anti??etitive strategy
of foreclosing Netscape from the market, and eliminating ?? hreat
the browser to the applications barrier to entry. Thus, the open
source bro ??r remedy posed by wo??dress the browser-specific
unlawful conduct central to the monopoly main?? ??ceviola?? affirmed
on appeal.
The proposed modification to the PFJ would eliminate Microsoft's
"fruits" ?? foreclose the ??e protecting its OS market
power. This would serve the interests of consi?? s by rest??
competition and innovation in browsers and precluding Microsoft from
us?? IE as a vehic?? controlling the Internet standards, protocols
and interfaces that lie at the ??rt of a netw??ed PC marketplace. In
addition, it would: lower barriers to competition for desktop OS
software and middlewa??y eroding Microsoft's power to dictate the
APIs. communications inter ??es and security protocols by which PCs
can interoperate with other devi?? and software platforms over the
internet; redress Microsoft's monopolization of the distribution
channels for desktop middleware runtimes; and foster (and perhaps
restore) competition within the major distribution channels for
desktop middleware.
As discussed above, the proposed IE remedy is necessary to
satisfy the requi??ent that any ??f in this case remove from
Microsoft the "fruits" of its monopoly maintenar
??violation.
The C??rt of Appeals opinion also supports the open source
remedy in other respect?? n its reve??f the attempted monopolization
claim, the Court chastised DOJ and the tri?? tort for not ??ifically
defining Internet browsers as a relevant product market. It is
clea?? ??wever, that li??e the Section 1 tying, claim, the attempted
monopolization claim was simply ??ther legal theor??ising from the
same set of operative facts. As the Court recognized, the p??iffs
"made the ?? argument under two different
headings--monopoly maintenance and atte??ted mo??ation."
As a form of unlawful monopoly maintenance, the Court had n??
fficulty hol??g that "Microsoft's efforts to gain market share
in one market (browsers) ser?? to meet the ??t 10 Microsoft's
monopoly in another market (operating systems) by keepin ??val
browsers from gaining the critical mass of users necessary to
attract developer atten?? t away from ??ndows as the platform for
software development." Thus, DOJ's failure to?? roduce aff??ve
evidence defining a relevant market for Internet browsers cannot
stand a barrier to fashi??g relief that restructures IE in order to
eliminate its use as a vehicle for mai??ining Microsoft's desktop OS
monopoly.
In sum, Microsoft's abuse of monopoly power through IE must be
remedied pro??s directed specifically at IE, something the PFJ
completely fails to address, ??is one of the ??ironies of the
settlement proposed by DOJ that in a case centered around ?? either
the API provisions nor any other section of the PFJ redresses
Microsoft's acquisition of ??yet in Inte??wsers, and its concomitant
effect of reinforcing Microsoft's Windows m?? poly pow?? ignoring
the browser issue the PFJ ensures that there will never be a corn
??itive oppp?? ity to reinvigorate browser competition, or to
provide middleware cornpetit?? in the range ?? Internet-based
technologies controlled by the browser.
7. The PFJ Fails to Rectify Microsoft's Unlawful Conduct A ??nst
JAVA
a. Failings of the PFJ
The CIS states that the PFJ is designed to restore the
competitive threat that ??Idleware prod??, such as Sun Microsystems
JAVA, posed prior to Microsoft's unlawful act ??s. The PFJ ??ever,
fails entirely to address the fact that Microsoft s illegal tactics
thwart JAVA tecj??gy, which would have significantly eroded the
applications barrier to entry?? ??e Court of Appeals found that
Microsoft violated Section 2 by entering into exclusive ISV d?? for
distrib??ion of Microsoft's own, incompatible version of JAVA, and
by deceiving developers into ??ing JAVA applications with Microsoft
tools that produced only Windows-c ??patible code. Microsoft also
unlawfully destroyed Netscape as a viable distribution cha?? or JAVA
tecj??gy
b. Remedies for the PFJ's Failings
SIIA's proposed remedy therefore requires inclusion of the JAVA
runtime e?? onment in Mi??scft's OS products, and prohibits
Microsoft from distributing any JAVA de ??pment tools. S??ifically,
for a period of seven years, Microsoft should be required to dish
??te free of charg?? binary form in all copies of its Platform
Software (including upgrades and ??isions such as Service Packs) the
latest version of the JAVA Middleware as delivered to M??soft, at
least ?? days prior to
[[Page 29092]]
Microsoft's commercial release of any such Platform Software ??
addition Microsoft should be enjoined from distributing: any
Platform Software in beta or final commercial form unless such
Platform Software includes the latest version of the JAVA Middlewa??
Runtime as delivered to Microsoft in binary form by Sun
Microsyste ??no later than 90 days prior to distribution by
Microsoft of such Platform Software or any upgrade or revision
thereto; any Microsoft Operating System Product that requires,
favors or advantages the utilization or functionality of any
Microsoft Middlew?? Runtime (including the .NET framework) relative
to the utilization o corresponding functionality of any competing
Middleware Runtime ?? application, including (without limitation)
the JAVA Middleware Runtime; any Office product that favors or
advantages the utilization or functionality of any Microsoft
Middleware Runtime, including the ?? framework, relative to the
??tilization or corresponding functionality ?? ny competing
Middleware Runtime or application, including (without limitation)
the JAVA Middleware Runtime; and any developer tool or development
environment for the JAVA lang?? (including any tool or development
environment that uses or convert: JAVA source or class files to
other formats). The DC Circuit explicitly upheld Microsoft's Section
2 liability for exclusi??y con??t di??ected specifically at JAVA.
The Court affirmed Judge Jackson's conclus??that Mi??ook steps to
""maximize the difficulty with which applications
written i?? a could be p?? from Windows to other platforms, and vice
versa.'"
To eliminate the threat posed by JAVA, Microsoft acted to
destroy the value ??he tech??gy by polluting the industry standard
set of JAVA interfaces and protocols, ??crosoft then ??ed its
monopoly power by requiring its customers to adopt and distribute it
?? omc??ble, non-standard JAVA runtime and tools implementations. As
the CIS ??n M??t fried to "extinguish Java" because
"a key to maintaining and reinforcing ??appli??tons barrier to
entry has been preserving the difficulty of porting application??
??om Win??s to other platforms, and vice versa," which JAVA
was designed to elimina??
??A's proposed remedy would increase consumer choice by
fostering corer- ion and innov?? in middleware. Similarly, it would
foster competition and create innova?? among ope??g systems by
promoting the competitive distribution of middleware, and ere??
Micr??ft's power to dictate The APIs, and related interfaces by
which PCs interope?? with netw??ed devices. It would also redress
Microsoft's specific acts ofmonopolizati?? irected at JA?? and thus
deny Microsoft "the fruits of its statutory violation.'"
8. The PFJ Fails to Mandate Porting Requirements
a. Failings of the PFJ??
Another significant shortcoming of the PFJ is its failure to
mandate that Mic?? ft port its key ??uctivity (Office), browsing
(IE), and other Microsoft Middleware Products ??on-Mic?? operating
systems. In the current market, such operating systems (Apple, ??ax,
etc.), as well as handhelds (Palm, etc.), set-top boxes (Liberate,
etc.), phones (Nokia, etc.) ?? other Inter??er abled appliances will
only be provided with a level playing field to comp?? if Microsoft
provides porting of its now-dominant products.
Mi??rosoft's ability and willingness to exploit the porting
issue to its advanta?? as been spec??lly demonstrated m this case.
Both the District Court and the Court of App?? ??dged That Microsoft
previously used its monopoly power over Office to im??e an unla??
e??clusiona?? deal on Apple for distribution of IE on the Macintosh?
This ??e of mos??f monopoly power by Microsoft is not specifically
prohibited by the PFJ. ?? t result, Mic??ft could continue to use
its monopoly power over Office, -and the overwhelr?? do?? of IE, to
constrain and eliminate competition from other OS platforms b??
fusing, or thre??g to refuse, to port Office or IE to those
platforms. By ignoring this realit?? e PFJ egle??s a critical
component of the Microsoft monopoly, and significantly compro?? s
its abili?? effectively eliminate what the Court of Appeals
identified as the single m?? reportant factor??cting Microsoft's
Windows OS monopoly: the applications barrier.
b. Remedies for the PFJ's Failings
The CIS asserts that the PFJ will ensure that OEMs have
contractual and eco??nic free?? make decisions about distributing
and supporting Non-Microsoft Middle?? Prod?? without fear of
retaliation or coercion by Microsoft. The foregoing will pu??rtedly
be achi??s reply by prohibiting Microsoft from retaliating against
an OEM that supp??or dist??s alternative middleware or operating
systems. But OEMs will not be e??mically free ??rt or distribute
alternative operating systems until control of the applica??s
barrier is se?? from Microsoft. Since The porting of Office, IE and
other Microsoft Midd??re
Pro?? is a crucial element in re-establishing competition in the
market for opera?? systems, SIIA ??ses that Microsoft should be
required: to port Office, within six months of entry of final
judgment, to Linux the top three non-Microsoft PC platforms
(including the leading non-Microsoft handheld computing OS) based on
shipments in a year; to port future versions of Office, within six
months from the date that ?? products become commercially available
for use with a Windows Operating System Product, to Macintosh and
the top three non-Micro: PC platforms (including the leading non-
Microsoft handheld comput?? OS); to port IE and other Middleware
Products that Microsoft ports to any non-Microsoft OS platform to
Linux and the two most significant other non-Microsoft PC platforms;
and to provide the same or similar functionality in such ported
Office applications and Middleware as that available with the
Windows Operating System Product version of the application. Without
modifying the PFJ to include such specific language, the only way
??revent "Po??g b??ackmail" by Microsoft would be
lengthy and expensive litigation attemp?? to show that a ??al, or
threat to refuse, porting would constitute a change in Microsoft's
"??mercial rela??" with an OEM. Requiring Microsoft to
port its Office and IE Middleware ducts to non??soft operating
systems is essential to overcoming the applications barrier ??d
tjere??roviding OEMs with the contractual and economic freedom the
CIS promi.??--for at leas??easons, described below. Without a
remedy specifically" addressing Offi?? the OE?? not be free of
Microsoft's monopoly pressure. For example, Microsoil?? d be free
??dition pricing advantages for Office on an OEM's adoption of
Microsoft ??dleware.
First, Microsoft's monopoly power over the Office business
applications sui?? Word, Exce??werPoint, Access,
Outlook--provides it with the ability to constrain and ??
inate?? comp??ion from other OS platforms by refusing (or as in the
case of Apple, threate?? to refuse??t Office. The most important
contributor to the applications barrier to en?? is MS Offi??ch
currently holds a dominant share of over 95 percent of the business
pr??ctivity so??applications market. Without the ability to run MS
Office on a PC, users h?? little or no ?? except to select a
Microsoft platform in order to maintain read/write intero?? ability
with the most important applications product in today's software
market.
Second, MS Office serves as the basis for Microsoft's current
strategy of ex?? ting its desk t??O?? dominance into the broader
realm of handheld and other non-PC comp?? systems. Thus the porting
of Office would directly address the applications barrier to entry,
?? would pro??reased recentives?? investment in, and consumer
purchase of, cornpetra?? soft?? for both PCs and other computing
devices, such at handhelds. In addition, exposing its o?? of APIs,
Office itself can represent a useful means of encouraging cross-??
form mid??are, but only if it is available on non-Microsoft
platforms. Microsoft's refu?? to port MS ??e, except in return for
Apple's agreement to make IE the default browser f?? ??e Ma??h, was
thus manifestly anticompetitive and a major reason for Microsoft's
??ntenance of its ?? monopoly.
Third. ISVs and consumers today effectively have no choice in
browser fun??ality Other ??n Microsoft's IE browser. As a
consequence, Microsoft can now choose to ??antage its OS ?? any
competing operating system either by refusing to port IE to the
cor?? ng OS, by doing so significant]y later than for its OS
products, or by porting only inferior ??ns of IE. Like??, ??icrosoft
can use the dominance of its IE product to extend its desktop O
??onopol to that :o/non-PC devices, such as handheld computers.
Unlike virtually every ISV?? Microsoft has re?? to port either its
Office software or Internet Explorer to the Palm OS. A?? en
sour??ion of IE, as proposed in Section II.C.6 above, can eliminate
Microsoft's?? ity to prese?? as a proprietary interface to the
Internet; however, it cannot alone rectify ?? porting problem d??e
to the lack of browser competition. Because Microsoft has
established browser as a ??enue product, there is no profit
opportunity for any ISV or platform cor??itor to create ??ux. Palm
(or other handheld, digital phone, set-top box, etc ) or other ver??
t of Intera??/Explorer. Fourth, because Microsoft's anticompetitive
conduct destroyed the Internet ??ser as an
[[Page 29093]]
econ??callyy significant market, it should be required to redress
that harm by portin?? E to other plat??s. This flows directly from
the recognition in the CIS that "Microsoft's a?? succeeded in
eliminating the threat that the Navigator browser posed to
Microsoft's ??rating system?? .... The adverse business effects of
these restrictions also deterre??etscape from ?? taking technical
innovations in Navigator that might have attracted cons??rs and
reven??" Because porting the Navigator browser to all
significant PC platforms ??an integr?? part of Netscape's
competitive strategy until Microsoft began its unlawful c??aign, a
remedy should restore the pro-competitive effect--a
ubiquitously, available browse at exposes uniform APIs on all OS
platforms--that has been lost as a result of Micro??'s
violatio??s.
Arguments that porting is impossible or too costly are not
legitimate. Micro?? ports versio??s of Office, Outlook, Media
Player, IE and other middleware to the Macintos ??day, some of which
are available free, and others for purchase. Furthermore. as the
Coun?? Appeals explai??ed the important economic consideration in
porting is usage, as opposed to a??lute volu?? Particularly as to
software (like IE and Outlook) that exposes its own APIs, ??sage
share, ?? the underlying operating system, is the primary
determinant of the platfor?? ??allenge a [pr??] may pose."
Thus, requiring That Microsoft port to other OS platforms ??
principal, ubiqu?? ?? middleware/applications it now controls merely
replicates what would be easy decisi?? ?? a stand-alone company
that, unlike Microsoft, did not have an economic disad??tage other
OS platforms. Because a firm that did not have a Windows mon??ly
would port both Office and IE, Microsoft should be required to port
these crucial products.
Finally, creating a viable market for Linux would immediately
introduce pri?? comp??tion to the Windows OS. Linux--which is
currently free--would be a po??tially attractive alternative to
Windows, even in the OEM channel, if Office, IE and Outlo?? were all
available for that client platform.
9. The PFJ Places a Disproportionate Reliance on OEMs to ??rease
Competition
a. Failings of the PFJ
As noted previously, the PFJ's overwhelming reliance on OEMs as
the prin?? ?? means for in??ing competition into the OS market is
unjustifiable. Rather than adopt a m?? ??faceted approa?? focusing
on all of the contributors necessary to adequately reinvigorate
co??ition in the OS marker, the PFJ mistakenly focuses merely on
allowing OEMs greater "flexil??y" to custor?? Windows
icons and non-Microsoft middleware. By doing so the PFJ tur?? blind
eye to the economic realities of today's market. OEMs are currently
under such ext?? ??dinary financial pressures today that, even if
they had the business experience necessary to ??er the software
business, they have no financial incentive to purchase and
incorporate into ?? r PCs anything other than the full Microsoft
software package. The failure of any OEM to on Microsoft's offer
last summer to replace icons in the Windows XP desktop makes pl.
this reality.
The PFJ is purportedly designed to restore the competitive
threat that non-Mi??soft middl?? products posed prior to Microsoft's
unlawful undertakings. As noted a??e, the CISc?? that the PFJ does
this by giving OEMs "the contractual and economic fr??m to
make ??isions about distributing and supporting non-Microsoft
software products t?? have the poten??a to weaken Microsoft's
personal computer operating system monopoly with fear of coerci?? or
retaliation by Microsoft." The PFJ only provides such freedom
to OE?? in form, however, not in substance. Changes in OEM and
retail PC market conditions--una?? ??owledged by the
DO??--make it highly unlikely that contractually liberating the
OEM distribut?? channel, without significantly more, can effectively
serve as the prime vehicle for restoring C comp??tion. Such market
changes include dramatically shrinking margins, price pr??ires, and
slowing demand in the PC sector--trends that are the opposite
of the high-flying e?? ??mic indici?? of the PC hardware market from
1995-98 when Microsoft's vertical restricti?? foreclosed OEM
distribution to its middleware rivals.
In this current economic environment, provisions which merely
give OEMs t?? ability to remove products or services, or that give
OEMs the ability to make changes to the ??ting system ?? not succeed
in achieving the stated goal of the CIS. The competitive la?? cape
of the PC s??clor today is one of rapid commoditization with
shrinking R&D budgets.
b. Remedies for the PFJ's Failings
Creating choice and differentiation in the PC sector is
dependent upon two st?? first, the PP must fundamentally redefine
the relationship between Microsoft and all OEM ?? affirmatively
transferring some design and bundling decisions from Microsoft to
the Ms (in the PC supply chain); second, the PFJ must create a
regime in which OEMs have an??nomic ?? to choose alternative bundles
of ??oducts and services for the Windows OS ??form from other
vendors, thereby encouraging competition on the merits in the
applicatio?? midd?? are and other non-OS markets.
In order to accomplish these objectives S??A proposes that
Microsoft be req?? to license Windows to independent ISVs and
software integrators (including platform ??are com??ors)who would be
protected by the same API disclosures, desktop configu??
flexib??lity, and pricing nondiscrimination guarantees as provided
to OEMs under the ?? J. More spec??cally, Microsoft should be
required to license the base binary code of Window including new
??ions and upgrades of Windows at a reasonable time before shipping
of that duct to OEM ?? all third parties so that the licensees may
create and license competitive b?? ??es comprised of Windows and
non-Microsoft applications, middleware, services and to??
((a)) licensed third parties should have all the rights to
modify the OS and IE desk?? links and related interfaces as provided
to OEMs in Sections III.E and III.H of the??;
((b)) licensed third parties should have all the rights of
access to APIs and other re??ical information as provided to OEMs in
Sections III.D and III.E of the PFJ.
((c)) licensees should be protected by the same OEM
nondiscrimination safeguard??ovided ?? Sections III.A, III.B and
III.F of the PFJ;
((d)) Microsoft should be required to provide complete
transparency of its agreeme?? with ??EMs and others;
((e)) the licenses should be made available for a price equal to
the lowest (per volu?? ??price that Microsoft charges for any
current version of the Windows OS to OEMs o?? her end user
licensees, including enterprise customers, add any volume discounts
sho?? ??e ??ardized and published; and
((f)) Microsoft should be prohibited from taking actions to
interfere with or degrad??e in??eroperability of third-party
applications with Windows.
This licensing proposal would foster wholesale-level competition
for combin?? ??S and application bundles, thereby making available
critical systems integration services to ??Ms seeking ??o provide
alternative software packages to retail customers. The SIIA prop??
recognizes the realistic limitations on OEMs in creating and
defining alternative sof?? ??re bundles (including middleware) and
therefore creates opportunities for systems inte??ors and others to
"stand in the shoes" of the OEMs and exercise their same
rights to modify ?? cust?? the Windows desktop and middleware
selections. This remedy works in??em with the ?? on middleware
bundling, the provisions regarding OEM restrictions, and the ??I and
tech?? information disclosure. It would limit Microsoft's ability to
choke off the ??elopment of new middleware and potential rival
platforms by creating an alternative means fo?? ??aker of those so
??products and services to distribute them to OEMs and, potentially,
co??mers. By producing potential rival, retail-level bundles of
software applications and servic ??with the OS, the licensing
proposal could offer an important means to foster the technologica??
development and consumer acceptance of non-Microsoft middleware and
potential a native platforms.
Adoption of the licensing provision would result in at least
three major benef?? to cons?? and competition. First, the provision
would allow the market, rather than ??crosoft, to deter?? the
applications on, and configuration ?? consumers" PC desktops.
The?? ??ense would ??Microsoft's ability ;o use its OS monopoly to
favor its own products ove?? comp?? software. End users would be
able to choose among competing, custon?? ??d bundles of applications
that are as seamlessly integrated into the operating system as
??crosoft's products are?? today.
Second, in addition to to promoting consumer choice and creating
competitio?? retail-level OS Application bundles, the licensing
proposal would help preserve competitio ?? appli??, e-commerce, and
other markets that Microsoft has targeted with its ille??actics. By
given there applications/services and the investors, engineers,
developers, and ??ers behind them--an alternative means to
obtain access to consumers, the licensing pro?? ??alwould give
??petitors in these markets a new protection from Microsoft's
anticompetiti?? cries. Con?? would benefit from the new
[[Page 29094]]
choices, new applications, and new services ?? would resu??t.
Third, with a variety of licensees potentially acting as systems
integrators an?? sellers, this ?? would provide the OEMs an
efficient way of procuring bundles of speci?? ??ed software to
resell to consumers.
10. The PFJ Pails to Constrain Microsoft From Converting O??
Industry Standards Into Exclusive Microsoft Protocols
The CIS states that the PFJ is designed to prevent recurrence of
the same or s?? far prac?? that Microsoft employed to reach its
current monopoly position. Microsc?? mono?? over the PC operating
system market gives it a unique ability to appropria?? or its sole
use and benefit technology first developed by others. By embracing
industry st??rd technology. Microsoft ensures that its products
benefit from the innovations of other?? ??y adding proprietary
extensions to industry standards, Microsoft can effectively approp??
re those stanca?? for its sole benefit and can also extinguish the
threat to Microsoft's proprie ?? standards posed by voluntary, open
industry standards.
The Court of Appeals affirmed that this is what Microsoft did to
JAVA. It in?? ionally deceived ??AVA developers and entered into
exclusive ISV deals for distribution of ??osoft's own, incompatible
version of JAVA. The Court explained that Microsoft fragment, he
JAVA standard in order to "thwart Java's threat to,
Microsoft's monopoly in the ma?? for operating systems," and
to "[k]ill cross-platform Java by grow[ing] the polluted
Jav??arket." SO
a. Failings of the PFJ
The PFJ, however, does not restrict Microsoft's ability to
modify, alter, or re??e to supp?? computer industry standards,
including JAVA, or to engage in campaigns to??eive developers of
rival platform, middleware, or applications software. By choosing
to??port only its own, proprietary implementation of open industry
standards, Microsoft can conti??to exclu?? meaningful competition
from alternative platform vendors. In addition, Mic??oft will be ins
position to dictate the interfaces and protocols by which products
other than I, such as servers. handhelds, or telephones, can
interoperate with PCs running Microsoft's des??p OS, and the
applications that run on those PCs.
b. Remedies for the PFJ's Failings
SIIA proposes as a remedy that the PFJ constrain Microsoft's
ability to conve??pen industry standards into exclusive Microsoft
protocols through "extension" or other un??teral condu??
Specifically, Microsoft should be enjoined from modifying, altering,
sub-se??g or super-se??ing any industry-standard Communication
Interface or Security Protocol, e??pt to the extent that such
modified Communication Interface or Security Protocol is
complian??th, and appr??ved by. an independent, internationally
recognized industry standards organizat?? Security protocol should
be defined as set forth in Appendix A.
This proposed remedy would protect consumer choice in platform
software by ??suring that co??s??ers are not required to purchase
only Microsoft applications and other sof??tre products??n order to
interoperate with Windows. It would foster innovation by ensuri??hat
?? Id. at 76-77 (citation omitted).
Microsoft has a business incentive, reinforced by the PFJ, to
extend industry standat?? for sound engineering reasons, rather than
anticompetitive foreclosure. The PFJ would requir?? at Microsoft
additions to open industry, standards be approved as compliant with
a volt??y industry standard available for support by all
competitors; importantly, however, it ??ld not otherwise restrict
Microsoft from developing new technologies, interfaces, or standa??
in propr??t??ry format.
11. MS Office Should be Included in the PFJ
Microsoft Office, a hybrid of application and middleware is a
significant con??nent of the current applications barrier to entry.
The Court of Appeals relief standard in this??se, tracking United
Shoe, requires that a remedy "ensure that there remain no
practices??ly to result in monopolization in the future."\81\
To foreclose prospective antitrust practice??t is settled law that a
remedy is not limited merely to the proven violations, but should
e??mapass untr??ed roads" the monopolist could use into the
future to protect its market pow?? "when the purpose to
restrain trade appears from a clear violation of the law, it is not
necess?? that all, of the ?? traveled roads to that end be left open
and that only the worn one be closed.
a. Failings of the PFJ
The CIS states that the PFJ is designed to prevent recurrence of
the same or s??lar practices that Microsoft used to reach its
current monopoly position.\83\ The PFJ does ??: achieve these stated
goals because the PFJ's API, pricing, exclusive dealing, and OEM
flexib?? provisions are all limited to Windows platform software.
Due to the dominant market?? are of ??
Microsoft III, 253 F.3d at 103 (citation omitted).
?? Int'l Sall Co. v. United States 332 U.S. 392, 400 (1947).
?? CIS at 3.
MS Office--around 95 percent of the business productivity
suite market--Microsoft dange??sly positioned to evade any
relief by repeating the stone exclusionary and i??al acts employing
Office, instead of Windows OS, to the same devastating effect upon
the ??sumer. More??ver, as previously described, Office exposes its
own set of APIs and can there ?? essentially function as a
middleware alternative to operating system software.
b. Remedies for the PFJ's Failings
A remedy must cover MS office in order to foreclose Microsoft's
ability to e??e the PFJ's ??sions by engaging in the same conduct
with Office that is prohibited with ??indows. Speci??i??lly MS
Office, the largest component of the applications barrier to entry,
should be included in a number of provisions in order to prevent
evasion of the remedy. These ??lude:
. Disclosure of APIs supporting interoperability of Office and
Window Microsoft 1Middleware (see Section II.C.4 above);
. Disclosure of proprietary file formats for Office (see Section
II.C.4 above);
. Prohibiting binding of Office with the Windows OS (see Section
II.C. above); and
. Requiring Microsoft to price its Windows and Office products
offered enterprise customers (i.e., all non-OEM customers) on a
stand-alone b?? without any volume or other discount arising from
combining the sale such products with any other Microsoft software
product. Legitimate volume discounts for either Windows or Office
products are not other ??e affected by this provision.
As noted above, the existing scope of the API provisions is
overly narrow sin??hey seem?? require transparency in the OS/
middleware interface, but not correspondin??enness in the ??face
between either applications or Office and the Windows OS. Under
th??IA proposa?? Office, Outlook, and JAVA would be encompassed by
the Middleware defi?? on in order to preclude Microsoft from evading
the constraint of the remedy by binding Off Outlook o?? JAVA
technology (each of which exposes APIs and can erode the applic??ons
barrier to entry) to the OS. Similarly, the scope of
"multimedia viewing software" s??ld be expanded from
merely viewing digital content to encompass the entire spectrum of
func??ion??ities provided by Real Player, Windows Media Player, and
the like, in ord?? prevent Microsoft from evading the middleware
bundling provisions by simply segmenting i?? multi??e?? middleware
into different sub-products or applications.
12. The PFJ Fails to Stop Microsoft From Intentionally Disab??
Competitors" Products
a. Failings of the PFJ
The PFJ lacks any general "catch-all" enforcement
provision designed to sto??icrosoft from taking intentional action
to disable or adversely affect the operation of competi?? middle
ware or applications products. The CIS claims that the PFJ has the
teeth need ??to ensure that ??soft cannot thwart the purposes or
remedies of the PFJ, and that the PFJ ??prive Microsoft of the means
with which to retaliate against, or hinder the development of
??peting products k4 Unlike the District Court's interim decree in
2000, however, the PFJ ine??cably fails ??o ??clude a general
prohibition of such conduct, relying instead upon narrowly ??wn
prohibitions limited to specific forms of conduct.
b. Remedies for the PFJ's Failings
?? order to remedy this glaring problem, SIIA proposes that the
PFJ be altered that Section (.3 of the 2000 Decree is restored
verbatim:
Microsoft shall not take any action that it knows will interfere
with or degrade the performance of any non-Microsoft Middleware when
interoperating with any Windows Operating System Product without
notifying the supplier of" such non-Microsoft Middleware in
writing that Microsoft intends to take such action, Microsoft's
reasons for taking the action, and any ways known to Microsoft for
the supplier to avoid or reduce interference with, or the degrading
?? the performance of the supplier's Middleware.
In addition, Microsoft should be prohibited from promoting any
standard as?? en" unless it has standards-body approval.
As is discussed in detail above, the Court of Appeals found that
Microsoft ha?? aff??
[[Page 29095]]
deceived JAVA developers and improperly entered into exclusive ??
ISVs for dis??ution of Microsoft's own incompatible version of JAVA.
Moreover, the d??ct cou?? Findings of Fact are replete with
findings, none of which were overturned on the eff?? that Microsoft
intentionally made it more difficult for Netscape and JAVA tun on
the Windows platform. For instance, Judge Jackson found that the
purpose of Micro's techni?? integration of IE "was to make it
more difficult for anyone, including syste?? administrators and
users, to remove Internet Explorer from Windows 95 and to
simul??usly complicate the experience of using Navigator with
Windows 95."\85\ "Microsoft's re?? respect the user's
choice of default browser fulfilled Brad Chase's 1995 promise to n??
the use of any ??wser other than Internet Explorer on Windows a??
experience." By i??rasing the lik??lihood that using Navigator
on Windows 98 would have unpleasant conseque?? for users, ??ierosoft
further diminished the inclination of OEMs to pre-install Navigator)
Windows" ??6 The obvious adverse impact on consumers of
intentional interference with cor??ting middleware and applications
is evident: consumers are denied choice of software and ?? market is
ar??ally tipped toward Microsoft products on a basis other than the
performance the products themselves. This is a classic way in which
Microsoft's maintenance of its, monopoly harms both competition and
consumers. In order to ensure that Microsoft ??not intentionally
degrade the performance of competitors" products, including
middlewa?? such tactics should be specifically outlawed.
?? Findings of Fact at 79 160.
?? Findings of Fact at 85 172.
III. CONCLUSION
As noted previously, because it may be difficult for this Court
to reach a con?? regarding the PFJ without prefiguring a decision on
nearly identical "live" issues in ?? State case
currently before this Court, SIIA respectfully requests that this
Court take this n??er under advise?? until the State case has
concluded. Alternatively. this Court should adop??A's propo??
remedy, as described in these comments.
Respectfully submitted,
Ken Wasch, President (Bar No. 93??4)
Software and Information Industry ??sociation
090 Vermont Avenue, NW
6th Floor
Washington, DC 20005
(202) 289-7442
Douglas L. Hilleboe (Bar No. 3860
Steptoe & Johnson LLP
1330 Connecticut Avenue, NW
Washington, DC 20036
(202) 429-3000
Dated: January 28. 2002
APPEND??X A DEFINITIONS OF "PLATFORM INTERFACES,"
"INTEROPERATE EFFECTIVELY" AND "BROWSER"
Platform interfaces" means all interfaces, methods,
routines and protocols tl??enable any Mico??oft Operating System or
Middleware Product installed on a Personal Con??ter to (a) execut??
fully and properly, applications designed to run in whole or in part
on any M soft Platform Software installed on that or any other
computing device (including without ??nitation ?? server??ligital
telephones, handheld devices), (b) Interoperate Effectively with
Micr??ft ?? Platform Software or applications installed on any other
device, or (c) perform netw?? security I, ?? prot?? such as
authentication, authorization? access control: or encryption.
"Interoperate Effectively" means the ability of two
different products to acce:??tilize and/or support the full features
and functionality of one another. For example, non-??osoft Platf??
Software "Interoperates Effectively" with an application
designed to run on ??crosoft Platfor?? Software if such non-
Microsoft Platform Software can be substituted for the ??icrosoft
Plafor?? Software on which such application was designed to run, and
nonetheless e?? le the application user the ability to access,
utilize and support the full features and function y of the ??
application without any disruption, degradation or impairment in the
functionality or??ures of the application.
??Internet Browser" means software that, in whole or in
part, (i) makes hyperte?? ??ransfer protoccl?? (HTTP) requests in
response to user input: (ii) converts or renders hypertext ??kup
language HTML) and extensible markup language (XML) to any displayed
form. or interme??linte representation with the intent to display
it; (iii) displays or keeps in mere stores in any way
"cookies," which are named values sent from web servers
to web br??sers?? with the expectation that the browser send back
the named values back to the server??uture intera??ion; (iv)
displays, keeps in memory or otherwise stores a collection of
unifo??resource It locat?? URLs) representing a history of a use's
interaction with web servers; (v) di??ys or?? keeps in??memory or
otherwise stores "bookmarks," which are named URLs
configur??e by a user; c?? runs JavaScript programs or runs programs
in any computer programmi??anguage which is broadly compatible with
JavaScript. The standards and formats referenced his definition
include all successors to those standards and formats that may arise
during term of the Final Judgment. The technical elements identified
in subsections (i) to (vi) inclu?? not only the for??n of these
functionalities as They currently exist and have existed in the
past, also as They come to exist in the future, even if they come to
be known by different names.
IN THE UNITED STATES DISTRICT COURT FOR. THE DISTRICT OF
COLUMBIA
UN?? STATES OF AMERICA, Plaintiff, Civil Action No. 98-12-
CKK MICROSOFT CORPORATION, Defendant. Defendant.
STATE, OF NEW YORK: et al., Plaintiffs, Civil Action No.
98-123 ??KK, MIC??CFT CORPORATION, Defendant.
COMMENTS OF SOFTWARE & INFORMATION INDUSTRY ASSOCI??ION ON
PROPOSED FINAL JUDGMENT
Ken Wasch, President (Bar No. 934984)
Software and Information Industry Associ?? n
1090 Vermont Avenue. NW
6th Floor
Washington, DC 20005
(202) 289-7442
Douglas L. Hilleboe (Bar No. 386091)
Steptoe & Johnson LLP
1330 Connecticut Avenue, NW
Washington, DC 20036
(202) 429-3000
Dated: January 28, 2002
COMMENTS OF SOFTWARE & INFORMATION INDUSTRY ASSOC??ION ON
PROPOSED FINAL JUDGMENT
??uant to Section 2(b) of the Antitrust Procedures and Penalties
Act (the "i??ney Ac?") 15 U.S.C. 16(b)-(h) (2000),
the Software & Information Industry Associati??
("SIIA") ?? submits these comments on the Proposed Final
Judgment ("PFJ") filed by the Unite??tates Department of
Justice ("DOJ") on November 6, 2001.
SIIA is the principal trade association of the software code and
information ??tent corporate education, and intellectual property
protection to more than 800 leading st?? are and information
companies. Our members develop and market software and
electronic??tent for business education, consumers, and the
Internet. SIIA's membership is comprised ??arge and small software
companies, e-business and information companies, as well as many ??r
traditional and electronic commerce companies of varying sizes.
Among SIIA's key public policy issues is the promotion of
competition in the ??ftware industry. SIIA has promoted these
principles of competition in a variety of fora, in??ng the federal
counts.
I. In??duction and Summary
The PFJ proffered by DOJ represents a remarkable change of
heart-or, per?? more accu??tely a loss of heart. For whatever
reason, DOJ proposes to end one of its m?? important and successful
monopolization cases with a settlement that reflects neither its
litigat?? position nor the decisions it won at trial and on appeal.
A settlement as weak as this would, ?? been disappointing, but
perhaps understandable, if it had been reached before trial, in
su??t situation, ?? and sometimes DOJ must take a bird in the hand.
But in this ??e, much of the litigation is past; and the new
Administration arrivals are not free to decide w?? legal?? theories
?? apply to this case. The law" of this case is settled. The
trial and appeals cou?? have alreac??nade findings of fact and
conclusions of law. These findings and conclusio?? ??annot be
??ignored in a proceeding whose raison d??tre is protecting against
an improperly mot??ed or expedient compromise of the public's
interest in enforcement of the, antitrust laws.
Appropriate relief in an antitrust case should end the unlawful
conduct, pry o?? the market to competition, avoid a recurrence of
the violation and others like it, and und?? antic??et??tive
consequences. Unfortunately, SIIA submits that the PFJ does not
ac??aplish these goals and ignores significant parts of the Court of
Appeals's decision regarding ??icrosoft's ?? anti??olations and
their consequences. Even where it seems to address the viola ?? is
DOJ filed, its PFJ on November 6, 2001,. which, if approved by this
Court, ??ld terminate United States action against Microsoft
Corporation ("Microsoft") in th??ase and prtovid??tain
remedies for Microsoft's violations of the Sherman Act that were
uph?? by the United
[[Page 29096]]
States Court of Appeals for the District of Columbia. See United
Stares v. Mi?? Corp 25:3 F.3d 34 (DC Cir.) ("Microsoft
III") (en bane), cert. denied, 122 S. Ct. 35 2001). In
addition to DOJ and Microsoft, nine State plaintiffs agreed to the
terms of the PFJ. ??wever, nine State plaintiffs and the District of
Columbia concluded that the relief provided b??e PFJ is woefully
??nadaquate and thereby continue to pursue a complete remedy through
?? identified by the Court, the PFJ is so porous that it provides
little or no protection 1st a repetition of Microsoft's past
anticompetitive acts. Flaws in the PFJ's Remedies. The two most
salient remedies imposed Microsoft PFJ und?? concern flexibility for
OEMs to install competing middleware and A?? DOJ's future Co??
Impact Statement ("CIS") stresses the importance of
preventing??ises in these areas. The theme of the CIS and PFJ is
that competition was injured in this ?? prin??ly because Microsoft's
illegal conduct maintained the applications barrier ??try in the
perso?? computer operating system market by thwarting the success of
middle ware ??it would have re??ed competing operating systems gain
access to applications and other need compl??tents. The PFJ is
intended to restore competition. In fact, however, the PFJ so
loosely that it is likely to have only the most modest effect on
Microsoft's actions--none at all o??s ability to monopolize new
sectors of the information technology market.
a. Middleware. Middleware was at the heart of the case. Impelled
by enth??asm for the Interne, PC users embraced Netscape's browser,
and Netscape (particularly" in c??pination led a Competitive
Impact Statement ("CIS")required I ?? under the ??tunney
Act. 15 U.S.C. 16(b). The CIS provides an abbreviated history
he legal?? proc?? in this case, describes Microsoft's monopolistic
and anticompetitive pra??es that the District Court and the Court of
Appeals held to be Sherman Act violations, and ??apts to expla??hy
in DOJ's opinion, the PFJ remedies such violations and provides
appro??e ?? bene?? lot consumers.
Middleware is "platform software that runs on top of an
operating system--uses opera?? system interfaces to take
advantage of the operating system's code and fun??nalley--and
si??u??taneously exposes its own APIs so that applications can run
on the middle?? itself.
An application written to rely exclusively on a middleware
program's APIs could run all operating systems on which that
middleware runs. Because such middleware also run??n Windows,
application developers would not be required to sacrifice Windows
compa??lity if they chose to write applications for a middleware
platform." CIS at 11. desk??ip This is not simply an academic
observation on the part of SIIA and its m??ers. For practi??ally
every one of our members, the rise of independent middleware opened
r??opportu??ities that were the objects of intense strategic focus.
The reason for this fo?? was that our members" programs
suddenly could use Netscape and JAVA as mediators to in launch, and
run on the desktop. For the first time in years it seemed possible
that independe?? software ??enders (ISVs) would have a way. to reach
the great majority of computer users ind??ndent of Microsoft.
Indeed, because they could run on other operating systems, JAVA and
??cape's browser suddenly offered these ISVs an even broader market
than they could obtain ?? developing for the Microsoft operating
system. The CIS describes how this competitive threat struck at the
heart of Microsoft monopo??y, and Microsoft's counterattack used
every possible weapon, including su?? unlawful tacti??a
"leveraging" its operating system monopoly. The PFJ
seeks to prevent Mi??soft from repeatto?? these tactics by ensuring
that future middleware vendors are not denied ac??; to the desktop.
But the measures chosen are unlikely to have that effect. As a
matter of dr??ng, they are f??y weak. Microsoft itself is expressly
granted nearly complete control over ?? meaning of m??dleware"
under the PFJ.
Equally important, these measures are written for a world that
no longer exist ?? The h??ils moved on. The PFJ grants to hardware
makers the fight to add middlewa??cons to their First but these
companies simply lack the financial strength and the motivation ??
develop new. software that might threaten Microsoft. To take one
example, OEMs have been ??ured by ??rosoft's Microsoft for several
months that they may customize their desktops by uninstalling
Internet Explorer; not one has actually done so. Meanwhile, the PFJ
does not give in??endent software vendors who might challenge
Microsoft the one thing that would tempt then ?? a channel to users
that is not subject to exclusionary practices by Microsoft. On the
??trary, the PFJ pro??ects middleware only after Microsoft has
launched a similar product, by wh?? time it is too late. Developers
of applications will always develop first and most enthusiastical??
or the most ?? deployed platform, because that platform becal?? it
offers them the largest marke?? the most users ??, in turn, will
typically choose the most widely deployed platform becan?? it offers
them ?? greatest choice of applications. This reinforcing
circle---a well established ??twork effect--in at the
heart of Microsoft's dominance of the industry. Cross-platform mid??
ware threatened Microsoft in 1995-98 because it could offer
developers an even bigger m?? et--a Microsoft plus"
market.
?? Microsoft cannot be seriously challenged in that way again
because no n??entrant to the middle ware market can hope to equal
the ubiquity of Microsoft in that market, le?? one achie??e the.
"Microsoft plus" market that Netscape and JAVA offered
in 1995-98.
b. APIs The PFJ also requires that Microsoft disclose the APIs
used by Mi??soft middleware to interoperate with the Microsoft
operating system. Here, too, the PFJ. ??ers both from ?? drafting,
and from a curious blankness regarding the sources of Micros??
Dom??ce of the market. The provision is replete with terms that are
not defined ("inter??perate"), are defined only. vaguely
("API"), are defined based on how a pro?? is named or
distributed ("Microsoft Middleware") or, most
remarkably, are left to be defined ?? Microsoft's "so1e
discretion" ("Windows Operating system Product").
In any event, the PFJ does little more than throw Microsoft into
a briar patch?? as long called ?? Microsoft's competitive dominance
depends on having the largest stab??f application developers writing
for its users. To write programs for Microsoft users, t?? deve??per
must have access to Microsoft's APIs. The APIs are their air supply,
an??licrosoft has every reason to give developers access to that air
supply- within limits. As lon??s Microsoft can keep its hand on the
valve, as long as it can cut off the air supply to d??lopers who are
too independent or too successful, it has every incentive to provide
extensi?? Info??ion about its APIs. And the PFJ leaves the valve
firmly in Microsoft's hant??y allow?? Microsoft to impose royalties
and other restrictions on developers who obt?? access to the APIs.
The PFJ thus requires little or nothing more than Microsoft would
provid?? its own. Unless developers can be guaranteed an air supply
that does not depend on Microso??hey will not chal??erage the
company that can unilaterally cut them off. 2. Backward-Looking
Remedies. In short, when all is said and done, this ?? wagers
everything on a series of measures that might have prevented
Microsoft from unlaw??y dest??ng Netscape in the browser wars. Even
this is open to question, but the real??blem with the PFJ lies
deeper, for there is not the slightest chance that these measures
will ??ow a new com??or on the order of Netscape to emerge. The
market has moved on. Focusin??ly on preve??ing a repetition of the
unlawful actions Microsoft took in 1995-98 is like negt??ting
an end to World War II by letting the Germans keep Paris as long as
they promise to re??d the ?? Mag??t Line.
Such a limited focus is not just improvident, it ignores the
instructions of the ??rt of Appea?? that any relief
"terminate" Microsoft's unlawful monopoly and
"deny" the ??pany the "fruits" of its
unlawful conduct. This cannot be accomplished by relying on the
eme??ce of some yet to-be-identified middleware challenger. To the
contrary, Microsoft has alr?? soli?? its unlawful victory, into a
browser monopoly, and it now bids fair to make ?? entire Interne??
into a proprietary Microsoft environment. Any remedy that seeks to
deny M??soft the fruits of its unlawful conduct must at a minimum
prevent Microsoft from using the ??e conduct to extend its control
of services that rely on Internet Explorer.
For that reason, SIIA urges that the PFJ be expanded to address
present and??e ?? and not just the dead past. The PFJ must take
steps to reduce the massiv??tructural advantage that Microsoft has
achieved by unlawfully leveraging its operating systen??tonopoly
into a??nternet-access monopoly. These steps include opening the
code of Internet??plorer ?? ("IE" restricting
exclusionary uses of Windows XP and the tools that make up Mi??oft's
??NET in??tiative, preventing Microsoft from "polluting"
standards by adding propriet?? exten??ons, and inclusion of
Microsoft's productivity applications in any relief. ??
3. Missing Principle. One further gap in the PFJ deserves
mention, If the ??sific changes required by the PFJ are of very
dubious force, the only provisions likely to??e continuing value are
those that spell out broad principles of conduct. Here too there??
[[Page 29097]]
??nuch room ?? disappointment. The PFJ does not prohibit Microsoft
from intentionally di??ling or adve?? affecting the operation of
competing products. No explanation is offered ?? this ?? omiss??on.
4. Procedure. Finally, SIIA wishes to address one procedural
point. At the ??er of this pr??ceeding are the decisions of the
Court of Appeals and the District Court. Wh??hey say about
Microsoft's conduct and about the appropriate remedies are an
essential part o??e public interest analysis. But they are also at
the heart of the case between the remaining liti??ing States and
Microsoft. It may be difficult to reach a conclusion about this PFJ
without prefi??ng a decision on the very. issues that the parties
intend to litigate before the Court in the ne??future. To do ??o on
the basis of a few Tunney Act filings rather than a full record
might do a?? justice to the p??ies to that litigation. S??A
therefore respectfully requests that this Court ?? the PFJ and its
terms under advisement until the conclusion of the litigation.
In sum, the PFJ, as written, represents a failure of will and
technological wis??m that cannot be approved by this Court
consistent with the unanimous liability decision o??e Court of
Appeals, traditional standards of antitrust remedy law, or the
Tunney. Act.
II. ARGUMENT
A. Standard of Review
Under the Tunney Act, this Court is required to review a
proposed settlemen?? deter??e whether it serves the "public
interest." In most instances Tunney Act pr??edings occur prior
or to trial and without any judicial findings of liability. The Act
was passed ??open this stage of the proceedings to the sunlight of
public scrutiny. In the unique procedura??ntext of this case
however, where the Court of Appeals issued an opinion on the merits
prio?? the ini?? of Tunney Act proceedings, the "public
interest" standard must necessarily ?? applied consistent with
the Court of Appeals opinion. The Court of Appeals ruled,
"[t]he Su?? me Court has expl??ed that a remedies decree in an
antitrust case must seek to 'unfetter a mar,?? from
antice??petitive conduct," Ford Motor Co., 405 U.S. at 577, to
'terminate the illegal??nopoly, deny to the defendant the
fruits of its statutory violation, and ensure that there remai??)
practices likely to result in monopolization in the future."
Thus, this Court must ??sider each of these factors in its public
interest analysis.
Ordinarily, the Department of Justice is given prosecutorial
discretion in de??ng whe?? bring a civil antitrust action. As a
result, courts generally require that a ??posed settlement only be
"within the reaches of the public interest'," for
which approval ?? warranted even if it falls short of the remedy the
court would impose on its own." Thus, in ??ical Tunney Act
cases, courts have permitted entry of consent decrees which were
merel?? consistent wire the government's general theory of liability
as manifested in its complaint" a ??chat "grani??[ed]
relief to which the government might not be strictly entitled"
under the m?? rust laws, Bech??, 648 F.2d at 660. In this case,
after trial and with the benefit of an extensive factual record, the
??tort of Appeals held specifically that relief must seek to
"terminate" Microsoft's operating, ??tern mo??,
"unfetter" barriers to competition to the OS market, and
"deny" Micros??he
The CIS, however, articulates a different and considerably less
rigorous start ??d for a rem?? ??n an antitrust case. According to
the CIS. "[a]ppropriate injunctive relief, ??hould: (1) end
the ??lawful conduct; (2) 'avoid a recurrence of the violation
and others like it: ??d (3) undo its anticompetitive
consequences." Significantly, the formulation advocated DOJ
does not re?? the remedy to 'terminate" the illegal
monopoly, or to 'deny the defendan??e fruits of its un??awful
conduct. Regardless of whether the DOJ formulation may have been
??propriate in pas??cases, it is simply the wrong standard of review
for the remedy in this case, v??re the District Court and Court of
Appeals have clearly outlined how Microsoft violated th?? ??herman
Act. The PFJ is deficient under either formulation. There are
substantial disparities ??tween the CIS and the PFJ. And the DOJ has
not even attempted to defend the PFJ under the r??e stringent, and
binding, Ford/United Shoe/Grinnell standard That this Court must
seek ??enforce.
B. S??A's Remedy Proposals are Reasonable and Proportional
to M??osoft's Unlawful Conduct??s proposed modifications to the PFJ,
described in detail below, are boy ??amerous and substantial.
Regrettably for consumers, Microsoft's already proven monopolist??
Lets have so de??ed competition in the operating systems market that
adoption of these pro??als is critic?? if the PFJ is to
"unfetter" the market from Microsoft's anticompetitive
cond?? "terminate" Microsoft's illegal monopoly, deny
Microsoft the "fruits" of its She?? violations, and
prevent future monopolistic acts, in accordance with the ford/
United?? Shoe/Grinnell standard for remedies.
There are similarities between tiffs case and the AT&T
divestiture, the last ??ge monopolization settlement under the
Tunney Act. S??A submits that in this case the ?? is similarly
completely inadequate to remedy the serious antitrust violations in
this ma?? In the former matter Judge Greene reviewed the evidence on
all issues except remedy. Af?? evidentiary hearings, third-party
submissions, and lengthy oral argument, Judge Gre?? declined to
approve the consent decree as proposed because he concluded that it
was inadequ?? in certain areas and precluded the Court from
effective oversight and enforcement. Judge Gre?? required
significant changes to the proposed decree before he would consent
to enter the settl??ant under the ??ey Act's public interest
standard, holding that "[i]t does not follow, that [?? Court]
must ??questioningly accept a [consent] decree as long as it
somehow, and however?? inade??tely, deals with the antitrust...
problems implicated in the lawsuit." SHA?? respectfully
requests that this Court follow Judge Greene's prudent actions and
send ?? parties back to the negotiating table to formulate an
appropriate PFJ. This Court should re??e its cone??s on on the PFJ
until after the pending State case has been litigated.
C. The PFJ Fails to Address the Core Violations Affirmed by the
D?? Circuit
1. The PFJ Does Not Eliminate Microsoft's Binding of its
M??lleware to its Operating System
As the CIS indicates, the core manner in which Microsoft
unlawfully mainta??d its Winc??ws Operating System
("OS") monopoly was by bundling and tying platform,
??Idleware to the OS. Microsoft used this strategy to defeat the
alternative platform threats pos?? by Netse??pe and JAVA. The DC
Circuit ruled that these actions constituted unlawful ??tintenance
of mo??poly under Section 2.
a. Failings of the PFJ It is critical for this Court to
understand That the business and economics that ??ire the software
industry demonstrate conclusively that the ubiquity of a development
platf??t will almost always beat technological superiority. The
common interest of software der??bers and consumers in adopting the
most uniform platform is the basis of the Microsoft mon??y. As a
result, if Microsoft is allowed to continue to bind or bundle its
middleware offerings ??th the Windows OS, the ubiquity of its
middleware will be permanent, and active middlew?? comp??tition will
never emerge. Microsoft will enjoy a perpetual maintenance of
its??nopoly, codified and reinforced by to the PFJ, and consumers
will suffer a significant retardi?? of innovation that would have
otherwise occurred. The negative consequences of this ??ome on
innovation cannot be overstated. If there is no way to reach
consumers except throu?? Micro?? platform, and if Microsoft remains
free to cut off the access of applicatio?? that are
MTC-00030615
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA Plaintiff, v. MICROSOFT CORPORATION,
Defendant. Civil Action No. 98-1232 (CKK) STATE OF NEW YORK,
et al., Plaintiffs, v. MICROSOFT CORPORATION, Defendant. Civil
Action No. 98-1233 (CKK) COMMENTS OF AOL TIME WARNER ON THE
PROPOSED FINAL JUDGMENT TABLE OF CONTENTS Page INTRODUCTION 1
I. THE COURT SHOULD USE THE REMEDIAL OBJECTWES ESTABLISHED BY
THE DC CIRCUIT IN THIS CASE AS THE STANDARD FOR ASSESSING WHETHER
THE PFJ IS "IN THE PUBLIC INTEREST." 4
II. AS MICROSOFT STARTS TO IMPLEMENT MOST OF THE DECREE'S
PROVISIONS, THE COURT SHOULD CONSIDER HOW--IF AT ALL--OEMS
ARE RESPONDING 9
A. There Is No Indication That Microsoft's Implementation Of
Major Aspects Of The PFJ Is Even Beginning To Promote Competition Or
Helping To Loosen Microsoft's Control Over The Desktop 10
B. The Provisions Of The PFJ Implemented By Microsoft Since July
11th Are Not Showing Signs That They Will Work To Restore
Competition In The Browser Market 14
III. THE PFJ IS NOT IN THE PUBLIC INTEREST BECAUSE IT DOES NOT
EVEN ATTEMPT TO HALT MICROSOFT'S MOST INSIDIOUS PRACTICE: ITS
ILLEGAL BINDING AND BUNDLING OF MIDDLEWARE APPLICATIONS WITH THE
WINDOWS OS 17
[[Page 29098]]
A. The Court Of Appeals Explicitly Held That Code
Commingling--A Form Of Tying Unaddressed By The
PFJ--Violates Section 2 Of The Sherman Act 19
B. Microsoft Uses A Variety Of Other Tying Practices To Maintain
Its Operating System Monopoly; If The Monopoly Is To Be
"Terminated," Such Contractual Tying Must Be Prohibited
24
C. By Allowing Microsoft To Continue To Tie Its Middleware
Applications To Windows, Microsoft Retains One Of The Most Valuable
"Fruits" Of Its Illegal Acts 31
IV. THE PROPOSED FINAL JUDGMENT FURTHER FAILS THE PUBLIC
INTEREST TEST, BECAUSE IT DOES NOT ACHIEVE EVEN THE LIMITED
OBJECTWES THAT IT HOLDS OUT AS ITS AIMS 33
A. The PFJ Allows Microsoft To Continue Engaging In
Discriminatory And Restrictive Licensing Agreements To Curtail The
Use Of Rival Middleware Products 34
B. The PFJ Requires Microsoft To Disclose APIs Only In Certain,
Narrow Circumstances 39
C. The PFJ Does Not Ban Many Forms Of Retaliation By Microsoft
Against OEMs 42
D. The PFJ Does Nothing To Remedy Microsoft's Illegal Campaign
To Eliminate Java 45
E. The PFJ Includes A "Gerrymandered" Definition Of
Middleware 47
F. The PFJ Lacks A Meaningful Enforcement Mechanism 50
V. THE CIRCUMSTANCES OF THIS CASE STRONGLY MILITATE IN FAVOR OF
GATHERING EVIDENCE AND TESTIMONY--EITHER IN A HEARING, OR
THROUGH THE USE OF THE RECORD FROM THE REMEDIAL PROCEEDING--TO
DETERMINE IF THE PFJ MEETS THE PUBLIC INTEREST TEST 53
A. The Complexity And Significance Of This Case--And The
Inadequacy Of The CIS--All Militate In Favor Of A Hearing On
The PFJ 53
B. The Court Should Conduct A Proceeding--Taking Evidence
And Hearing Testimony, If Necessary- To Determine How The PFJ's
Provisions Have Functioned Since Some Were Put In Place In 2001 56
C. In Making Its "Public Interest" Determination,
This Court Should Take Into Account The Evidence That Will Be
Adduced In The Upcoming Remedial Proceeding 58
CONCLUSION 61
COMMENTS OF AOL TIME WARNER ON THE PROPOSED FINAL JUDGMENT
Pursuant to Section 2(b) of the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16, AOL Time Warner respectfully
submits the following comments on the Proposed Final Judgment
("PFJ") in the above-referenced matter.
INTRODUCTION
The Proposed Final Judgment sets forth a decree that is too
limited in its objectives and too flawed in its execution to meet
the Tunney Act's "public interest" test. It allows
Microsoft to continue to bind and bundle its middleware applications
with its Windows Operating System (")--even though the
Court of Appeals found Microsoft's actions in this regard to be
illegal. And its patchwork of constraints on Microsoft's conduct is
so loophole-ridden and exception-laden as to render its provisions
ineffective. As a result, the PFJ is inadequate to promote
competition and protect consumers, and the Court should refuse to
find that its entry would be "in the public interest."
15 U.S.C. 16(e).
The PFJ comes before the Court in an unprecedented posture for a
Tunney Act proceeding. This proposed settlement was
reached--not as the case was being flied, nor as it was being
tried, nor even as it was being appealed--but rather, after the
Court of Appeals for the District of Columbia Circuit unanimously
affirmed a finding of illegal monopoly maintenance by Microsoft.
Such circumstances surely require a more rigorous application of the
"public interest" standard than when a case is settled
before the first interrogatory is even served--the usual
situation when a Tunney Act review is conducted. Helpfully, a
readily available and judicially administrable measure of the
"public interest" is available for use in this special
circumstance: the four-part test for "a remedies decree"
established by the DC Circuit in this very litigation. United States
v. Microsoft, 253 F.3d 34, 103 (DC Cir. 2001). Applying this
standard, we believe that the Court should find the PFJ to be in the
"public interest" only if it (1) "unfetter[s] a
market from anticompetitive conduct"; (2) "terminate[s]
the illegal monopoly"; (3) "den[ies] to the defendant
the fruits of its statutory violation"; and (4)
"ensure[s] that there remain no practices likely to result in
monopolization in the future." Id. (internal quotations
omitted). We believe that there are at least three reasons why the
Court should conclude that the PFJ does not meet this test. First,
since July 11, 2001 (for the browser) and December 16, 2001 (for
other middleware), Microsoft has been implementing many of the PFJ's
remedial provisions. Thus, the Court need not speculate about the
impact these provisions would have on the industry if they were put
in place; rather, it can seek submissions and review evidence on
whether these critical provisions are beginning to work as they .are
being implemented by Microsoft. We believe that any such inquiry
will reveal that the original equipment manufacturers
("OEMs") are not exercising the flexibility that the PFJ
ostensibly provides them, because the loophole-ridden PFJ gives too
few rights to the OEMs and does too little to protect the OEMs in
the exercise of those rights. As a result, there is little reason to
believe that the PFJ will prove effective in restoring competition,
terminating Microsoft's monopoly, or stripping Microsoft of the
fruits of its illegal acts.
Second, the PFJ fails to prohibit Microsoft's signature
anticompetitive conduct: the binding of its middleware applications
to its monopoly operating system, and its bundling of these products
to further entrench its OS monopoly. The factual questions that
surround these legal issues are quite complex, but here again, the
Court has a powerful tool to employ: the extensive factual findings
entered by the District Court. These factual findings document
Microsoft's purposeful commingling of middleware application code
with the Windows OS to harm competition, as well as the contractual
bundling of those applications with the OS, to force OEMs to
distribute Microsoft's middleware, and to raise distribution hurdles
for middleware rivals. Given the PFJ's failure to ban practices that
the District Court and the Court of Appeals found to be at the
center of Microsoft's illegal maintenance of its OS monopoly, the
PFJ does not meet the "public interest" standard.
Third, even with regard to those limited objectives that the PFJ
does attempt to achieve--i.e., the creation of "OEM
flexibility" to promote desktop competition--the proposed
decree is so ridden with loopholes, exceptions and carve-outs as to
render it ineffective. These deficiencies are highlighted when the
PFJ is compared to previous remedial plans considered in this case,
including Judge Jackson's interim conduct remedies and the mediation
proposal offered by Judge Richard Posner (which Microsoft apparently
agreed to even before it had been found liable for antitrust
violations).
Finally, we believe the Court will find the remedial proposal of
the litigating state attorneys general ("Litigating
States" Remedial Proposal" or
"LSRP")--and the Court's consideration of that
proposal--to be useful in its review of the PFJ. Most
immediately, the LSRP provides a benchmark as to what one group of
antitrust enforcers believes to be compelled by the "public
interest" in order to achieve the case's remedial objectives.
Moreover, the LSRP provides a helpful point of comparison for some
specific aspects of the PFJ--i.e., a way to illustrate why
particular PFJ provisions are ineffective, by comparison. And third,
the Court's consideration of the LSRP will adduce testimony and
other evidence that should be weighed in determining whether the PFJ
should be approved. Taken as a whole, a comparison of the PFJ with
the Litigating States" Remedial Proposal shows why the latter,
and not the former, faithfully meets the remedial objectives set
forth by the DC Circuit and serves the "public interest"
as expressed in the nation's antitrust laws.
I. THE COURT SHOULD USE THE REMEDIAL OBJECTIVES ESTABLISHED BY
THE DC CIRCUIT IN THIS CASE AS THE STANDARD FOR ASSESSING WHETHER
THE PFJ IS "IN THE PUBLIC INTEREST."
Passed by Congress in 1974, the Antitrust Procedures and
Penalties Act, commonly known as the "Tunney Act,"
provides that a proposed consent decree may be entered in an
antitrust case only if the district court determines that such entry
is "in the public interest." See 15 U.S.C. 16(e).
Given that the Court will receive numerous submissions on this
point, we do not provide here a recitation of the Tunney Act's
provisions, or an extensive analysis of the standard of review under
the Act. Instead, we focus on just one, overriding
"procedural" question: How should the Court measure
"the public interest" in this unique case? For reasons
we will explain below, we believe that the measure of the
"public interest" to be applied in reviewing the PFJ can
be found in the remedial objectives set forth by the DC Circuit in
its consideration of this litigation. See Microsoft, 253 F.3d at
103.
First, while the Tunney Act itself does not define "public
interest," the case law makes
[[Page 29099]]
clear that the Court must begin its analysis "by defining the
public interest" in accordance with the basic purpose of the
antitrust laws, which is to" 'preserv[e] free and
unfettered competition as the rule of trade."' United
States v. American Tel. & Tel. Co., 552 F. Supp. 131,149 (D.DC
1982) (quoting Northern Pacific Ry. Co. v. United States, 356 U.S. 1
(1958)). As a general rule, a court has discretion to reject a
proposed consent decree that is ineffective because it fails to
address or resolve the core competitive problems identified in the
Department of Justice's complaint. United States v. Microsoft Corp.,
56 F.3d 1448, 1457-62 (DC Cir. 1995). As this Court stated in
United States v. Thomson Corp., 949 F. Supp. 907, 913 (D.DC 1996),
the court has a responsibility "to compare the complaint filed
by the government with the proposed consent decree and determine
whether the remedies negotiated between the parties and proposed by
the Justice Department clearly and effectively address the
anticompetitive harms initially identified." A court should
"hesitate" in the face of specific objections from
directly affected third parties before concluding that a proposed
final judgment is in the public interest. United States v.
Microsoft, 56 F.3d at 1462. And it "should pay 'special
attention" to the clarity of the proposed consent decree and
to the adequacy of its compliance mechanisms in order to assure that
the decree is sufficiently precise and the compliance mechanisms
sufficiently effective to enable the court to manage the
implementation of the consent decree and resolve any subsequent
disputes." Thomson Corp., 949 F. Supp. at 914 (citing United
States v. Microsoft, 56 F.3d at 1461-62).
In the context of this proceeding, tremendous guidance as to the
content of the public interest test can come from the earlier
decision of the Court of Appeals in this case. In that decision, the
DC Circuit wrote:
[A] remedies decree in an antitrust case must seek to
"unfetter a market from anticompetitive conduct," to
"terminate the illegal monopoly, deny to the defendant the
fruits of its statutory violation, and ensure that there remain no
practices likely to result in monopolization in the future."
Microsoft, 253 F.3d at 103 (quoting Ford Motor Co. v. United
States, 405 U.S. 562, 577 (1972) and United States v. United Shoe
Mach. Corp., 391 U.S. 244, 250 (1968)). These words, in our view,
form the essence of the public interest test to be applied by the
Court in this Tunney Act proceeding.
First, on its face, this passage speaks of the object of a
"remedies decree in an antitrust case," without
differentiating between a decree that is achieved through
negotiation and one achieved through litigation. Thus, the Court of
Appeals" ruling would appear to be directly controlling here,
insofar as it states the measure of adequacy for any remedial
decree, however achieved. There is no apparent reason why the
"remedies decree" negotiated by the Department of
Justice with Microsoft should not have to meet the standard of
adequacy generally set forth by the Court of Appeals in its
decision. This is particularly true given that the passage merely
"defin[es] the public interest in accordance with the
antitrust laws." Accord American Tel. & Tel. Co., 552 F.
Supp. at 149.
How wide a "gap" between a hypothetical litigated
result and the proposed settlement is permissible in these
circumstances is a question that need not be answered here because
the PFJ falls so very short of meeting any reasonable understanding
of the "public interest," given its failure to address
many of Microsoft's illegal acts and its loophole-ridden provisions
in the areas that it does purport to cover.
[I]t is not necessary that all of the untraveled roads to
[anticompetitive conduct] be left open and that only the worn one be
closed. The usual ways to the prohibited goals may be blocked
against the proven transgressor.
Additionally, "antitrust violations should be remedied
'with as little injury as possible to the interest of the
general public" and to relevant private interests." Id.
(quoting United States v. American Tobacco Co., 221 U.S. 106, 185
(1911)).
Second, the four-part test established by the DC Circuit here
would give the Court a clear and manageable standard on which to
evaluate the proposed decree's adequacy. Use of the DC
Circuit's formulation thus avoids one of the principal bases of
controversy and difficulty in Tunney Act reviews -i.e., the lack of
a judicially manageable standard for assessing the public interest
and the consequent risk that judges will inappropriately use
standardless judgment to review an exercise of prosecutorial
discretion. Thus, unlike in other Tunney Act cases, where a court
lacks an appropriate benchmark on which to measure the purported
benefits of the settlement (and thus must be careful not to impose
its judgment for that of the Justice Department), here, there is a
clear benchmark for the Court to use: the standard set by the Court
of Appeals with regard to a "remedies decree."
Moreover, to the extent that insisting that the PFJ meet the
standard set by the Court of Appeals would result in a more exacting
review than the review imposed in other Tunney Act proceedings, that
would be appropriate in this circumstance. For while the
overwhelming majority of decrees reviewed under the Tunney Act occur
in a pre-trial context--where the court lacks a judicial
finding of illegality against which to measure the efficacy of the
proposed settlement--this proposed settlement was reached after
an appellate affirmance of liability. Because the public has
invested its resources and time, and taken the risk to win a
judgment of liability and defend that judgment on appeal, it has a
right to expect a more rigorous decree that meets a higher standard
of review. Under these circumstances, the Court's review under the
Tunney Act should not be deferential to the Justice Department;
instead, the Court should apply the Court of Appeals" four-
part test and determine if the PFJ meets that test.
As explained in more detail below, the PFJ fails to meet the DC
Circuit's four-part test, because contrary to the claims of the
Department of Justice, it will neither "provide a prompt,
certain and effective remedy for consumers," nor
"restore competitive conditions to the market." (See CIS
at 2.) Specifically, it does not "unfetter [the] market from
anticompetitive conduct," because it does not even try to stop
Microsoft's illegal binding and bundling practices--or
effectively limit Microsoft's ability to coerce OEM behavior to its
liking. It does not "terminate the illegal monopoly"
because it does not effectively promote rival middleware, and
because its provisions are so laden with loopholes, exceptions and
carve-outs. It does not "deny to the defendant the fruits of
its statutory violation," because it allows Microsoft to
continue to leverage its OS monopoly to gain market share in other
markets. And it does not "ensure that there remain no
practices likely to result in monopolization in the future,"
because it leaves Microsoft free to exploit the OS monopoly to gain
dominance in critical new markets. Failing to address the core
anticompetitive wrongs that were found at trial and upheld on appeal
against Microsoft, and failing to meet the four-part remedial test
established by the DC Circuit, the PFJ is manifestly contrary to the
public interest and should be rejected.
II. AS MICROSOFT STARTS TO IMPLEMENT MOST OF THE DECREE'S
PROVISIONS, THE COURT SHOULD CONSIDER HOW--IF AT ALL OEMS ARE
RESPONDING.
As noted above, the question before the Court is whether the PFJ
is "in the public interest." 15 U.S.C. 16(e). In
making that determination, the statute indicates that the Court may
want to consider, inter alia: (1) "the competitive
impact" of the PFJ, (2) whether it results in the
"termination of alleged violations," and (3) "the
impact of [the PFJ] upon the public generally and individuals
alleging specific injury." Id.
Fortunately, contrary to most other courts conducting Tunney Act
reviews, this Court need not struggle with evaluating the
"competitive impact" of the PFJ in a factual vacuum
because Microsoft has been, according to its own statements,
implementing some provisions found in the PFJ since last July, and
the bulk of its provisions since December. That means the Court need
not base its "public interest" judgment on abstract
legal and economic analyses only; instead, the Court's analysis can
(at least in part) be shaped by a consideration of how Microsoft is
beginning to implement parts of the PFJ, and how the PFJ's
provisions are starting to work in practice. 7 We believe that such
a practical review will demonstrate that the portions of the PFJ in
question show little prospect--if any- that they will
"unfetter the market," "terminate the
monopoly," or "deny" to Microsoft "the
fruits of its violation."
A. There Is No Indication That Microsoft's Implementation Of
Major Aspects Of The PFJ Is Even Beginning To Promote Competition Or
Helping To Loosen Microsoft's Control Over The Desktop.
In the joint stipulation filed with the Court on November 6,
2001, Microsoft stated that it would "begin complying with the
[PFJ] as [if] it was in full force and effect starting on December
16, 2001 ." (Stipulation and Revised Proposed Final Judgment
at 2 (November 6, 2001).) While provisions with specific timetables
were exempted from this
[[Page 29100]]
pledge--resulting in an excessive delay for some of the PFJ's
competitive protections many of the PFJ's remedial provisions were
covered by it. Thus, with regard to many provisions of the PFJ, the
proposed decree has been "in effect" since mid-December.
Microsoft's stipulation offers the Court a unique opportunity to
learn, not just how the PFJ would serve the public interest once
implemented, but instead, whether the PFJ provisions already in
effect are showing signs that they are likely to serve the public
interest. These provisions have now effectively been in place for 43
days--and by the time of a likely hearing or other proceeding
to consider this question (presumably, in March or April), will have
been in effect for three to four months.
Microsoft may protest that a three- to four-month period in
which parts of the PFJ will have been applied is inadequate to test
those remedies. And that is doubtlessly true with regard to some
measures of the PFJ's effectiveness, such as whether Microsoft's
share of the OS market has shrunk from near absolute to anything
less. But there are other measures of the PFJ's effectiveness that
should be readily discernible even in this relatively short time.
Among the questions we believe that the court could determine,
by the time of a heating in March or April, would be:
.Have the OEMs exercised (or even attempted to
exercise)--in any way beyond the prevailing industry practice
prior to December 16th--the flexibilities to remove/replace
icons, start menu entries, and default settings for Microsoft
middleware products, that are purportedly provided in Section
III.C.1 of the PFJ? If not, why not?
.Are non-Microsoft middleware products gaining new distribution
via the OEMs as a result of the provisions of Sections III.A. and
III.C.2 of the PFJ, as implemented? If not, why not?
.Are non-Microsoft middleware products, to a greater extent than
before implementation of the PFJ, attaining the benefits of an
"automatic launch," pursuant to the provisions of
Section III.C.3 of the PFJ? If not, why not?
.Is any OEM offering a dual-boot computer, as authorized by
Sections III.A.2 and III.C.4 of the PFJ? If not, why not?
.Are there new IAP offerings being made at the conclusion of PC
boot sequences, pursuant to Section III.C.5 of the PFJ? If not, why
not?
. Has any ISV, IHV, IAP, ICP or OEM gained any additional
Windows licensing tights that it did not have prior to the
implementation of the PFJ, pursuant to Section III.I of the PFJ? If
not, why not?
. Has Microsoft terminated any payments to OEMs that were
anticompetitively advantaging Microsoft's products, and that are now
forbidden, pursuant to Sections III.A and III.B of the PFJ? Based on
our knowledge of industry developments, we believe that the answer
to each of these questions is "no," with perhaps some
very rare and isolated exceptions. Thus, despite Microsoft's
proclaimed implementation of large portions of the PFJ, there is
scant evidence of OEMs even attempting, let alone succeeding, to
offer consumers new choices with respect to middleware products.
Even in a relatively short time frame of a few months, one would
expect to find numerous OEMs reaching agreements to promote or carry
multiple non-Microsoft products. But no such evidence exists. No
doubt, that is why countless industry observers and analysts have
concluded, after examining the PFJ, that "[t]he changes we
will see are minute. Microsoft can control its own destiny. It can
do whatever it wants."
Presumably, it cannot be in "the public interest" to
settle a case after years and years of litigation - including a
finding of liability for the government at trial, affirmed
unanimously on appeal by the Court of Appeals (See Microsoft, 253
F.3d at 46)--for a remedial decree that effectuates only
"minute" changes in the strategy the defendant was using
to illegally maintain its monopoly. And yet, that is precisely what
appears to be happening, as the effectiveness--or lack thereof-
of parts of the PFJ are starting to be observed in application.
While we certainly agree with the Department of Justice that it
will only be "over time" that any remedy could
"help lower the applications barrier to entry," (see CIS
at 29), that objective will never be achieved if the PFJ does not
lead OEMs to even begin to "offer rival middleware to
consumers and ... feature that middleware in ways that increase the
likelihood that consumers will choose to use it." (Id.) That
is: the pro-competitive journey of a thousand miles can never be
completed if- as it appears to be the case--the PFJ does not
create a market in which OEMs feel free to take that all-important
first step. To the extent that much of the CIS suggests that the
goal of the remedy is to create OEM flexibility for its own
sake--i.e., to make sure that OEMs have the right to choose
non-Microsoft products, whether or not they exercise that
right--it misses the mark. The goal of this litigation is not
to protect OEMs" rights, but rather to protect
consumers" rights to enjoy a free and competitive market. In
such a market, OEMs can be important surrogates for consumers, but
only if they actually offer competitive choices. Likewise, to the
extent that the other goal of the remedial proceeding is to reduce
the applications barrier to entry, that objective is only achieved
to the extent that the OEMs actually distribute and promote non-
Microsoft middleware--it is not advanced by the unexercised
presence of theoretical OEM choice.
Thus, the determination of whether the PFJ will be effective in
promoting its purported ends--i.e., fostering OEMs in making
those choices and creating opportunities for competition--need
not be left for some subsequent proceeding or for antitrust scholars
in future years. It can be ascertained now from the submissions that
the Court is receiving, or, if those submissions are inadequate, it
could be resolved by the Court in a proceeding where evidence is
taken and testimony is heard. See Section V.B, infra. The manner in
which Microsoft is already implementing portions of the PFJ is among
the most probative considerations the Court can weigh in determining
how--it at all--the proposed settlement will promote
competition in the years to come.
B. The Provisions Of The PFJ Implemented By Microsoft Since July
11th Are Not Showing Signs That They Will Work To Restore
Competition In The Browser Market.
In addition to the general applicability of the PFJ's
provisions, several of its provisions have been in place--as
they relate to the Internet browser--since Microsoft took steps
to implement them after the Court of Appeals" decision last
June. As with the more general PFJ provisions discussed above, the
Court should examine whether these browser-specific remedial
provisions--which will have been in place for eight months by
mid-March--have been effective to date. Again, we believe that
the evidence to date shows that the provisions are showing no sign
of effectuating change in the market; thus, the PFJ--which
(with regard to browsers) does little more than codify these
unilateral Microsoft actions does not meet the "public
interest" standard.
On July 11, 2001, in response to the decision of the Court of
Appeals, Microsoft announced a program of "greater OEM
flexibility for Windows." See Press Release, Microsoft
Corporation, Microsoft Announces Greater OEM Flexibility For
Windows, July 11, 2001. Specifically, Microsoft announced that it
would amend its OEM license agreements to provide that: PC
manufacturers will have the option to remove the Start menu entries
and icons that provide end users with access to the Internet
Explorer components of the operating system. Microsoft will include
Internet Explorer in the Add/Remove programs feature in Windows XP.
PC manufacturers will have the option to remove the Start menu
entries and icons that provide end users with access to Internet
Explorer from previous versions of Windows, including Windows 98,
Windows 2000 and Windows Me ....
Consumers will be able to use the Add-Remove Programs feature in
Windows XP to remove end-user access to the Internet Explorer
components of the operating system .... Id. These provisions mirror
the browser-related provisions found in Sections III.C.1 and III.H.1
of the PFJ. Indeed, they comprise almost the entirety of all
browser-related remedial provisions found in the PFJ.
Thus, the question of whether the PFJ fulfills the Department of
Justice's promise of an effective remedy for "restor[ing] the
competitive threat that middleware products posed prior to
Microsoft's unlawful undertakings," can easily be
assessed--at least with regard to the browser threat, which was
such an extensive part of the Court of Appeals"
decision--by seeing how effective these unilateral Microsoft
actions, taken in July of 2001, have been to date. And unlike the
provisions discussed above, which were put in place only in
December, it cannot be argued that these browser-related provisions
have not yet been tested in the marketplace; rather, they were in
place for the launch of Windows XP, which Bill Gates recently dubbed
the "best-selling release of Windows ever, and one that is
creating great opportunities for PC manufacturers and our other
partners in the industry." In the simplest terms, as we note
above, these "remedies" will have been in place for
eight months by mid-March of 2002.
[[Page 29101]]
We believe that the initial evidence shows that these provisions
are completely ineffective. We are unaware of a single OEM that has
used the "flexibility" provided to it by Microsoft to
remove Internet Explorer from the Start menu, or from any of its
multiple promotional placements on the PC desktop. Nor are we aware
of any OEM that has elected to use any competitor to Internet
Explorer as a default browser, or to promote alternative browsers to
Internet Explorer in any way. Moreover, there is no
indication--more than six months after Microsoft's July 11th
announcement and four months after the first shipments of Windows
XP--that Internet Explorer's commanding market share in the
browser market has fallen in any measurable way. If the provisions
of the PFJ are strong enough to "restore" competition to
the marketplace, which DOJ claims they are (see CIS at 3
("[t]he requirements and prohibitions [of the PFJ] will ...
restore the competitive threat that middleware products posed prior
to Microsoft's unlawful undertakings")), one would expect to
see that the market shares of Microsoft's browser competitors have
increased during this time frame. There is simply no evidence of
that. Not only is there a dearth of evidence suggesting that the
PFJ's provisions are going to restore competition to the level
enjoyed by Microsoft's rivals prior to its illegal conduct, but
there is no evidence to suggest they are affecting the market at
all.
A remedial provision that has no market impact cannot be said to
be in the "public interest," especially in a case like
this where the damage from Microsoft's illegal campaign to eliminate
rival middleware has already been done. In other words, because
Microsoft has illegally driven down the market shares of its rival
middleware developers, restoring competition to the marketplace
requires much more than simply eliminating the illegal practices:
only if the status quo ante is restored would OEM freedom of choice
be meaningful. And yet, the evidence suggests that the PFJ
provisions that relate to the browser will have no market impact,
given the practical experience with highly similar proposals put in
place by Microsoft last July. This is important evidence for the
Court to consider when reviewing the PFJ.
III. THE PFJ IS NOT IN THE PUBLIC INTEREST BECAUSE IT DOES NOT
EVEN ATTEMPT TO HALT MICROSOFT'S MOST INSIDIOUS PRACTICE: ITS
ILLEGAL BINDING AND BUNDLING OF MIDDLEWARE APPLICATIONS WITH THE
WINDOWS OS.
In this submission--and doubtlessly in the many others the
Court will receive--we identify a number of specific
deficiencies in the PFJ. See Section IV, infra and Attachment B. But
one omission stands out above all others: the failure of the PFJ to
limit Microsoft's ongoing and insidious efforts to maintain its
monopoly--and leverage and entrench that monopoly--by
tying its middleware applications to the Windows OS. This
conduct--found illegal by the District Court and upheld as
illegal by the Court of Appeals (see Microsoft, 253 F.3d at
67)--is left unchecked by the PFJ. By contrast, a remedy to
address this practice appeared in the interim conduct remedies
offered by the District Court, as well as the remedial proposal
designed by Judge Richard Posner ("Posner Proposal").
The practice is also addressed extensively in the litigating
states" proposed remedy. By failing to remedy one of
Microsoft's "signature" anticompetitive acts, the
PFJ--even before reaching its many other defects--falls
far short of the four-part remedial standard set by the Court of
Appeals, and by the same token, fails to meet the public interest
test established by the Tunney Act.
In explaining why it did not seek to limit Microsoft's tying of
middleware applications to Windows in the PFJ, the Justice
Department has suggested that there was no basis for such a remedy
because of the Court of Appeals" reversal of the District
Court's finding of liability under Section 1 of the Sherman Act, and
the appellate court's direction that the remedy here should
"focus[] on the specific practices that the court had ruled
unlawful." This analysis fundamentally misapprehends the
implications of the Court of Appeals" ruling: contrary to
DOJ's view, the Court of Appeals did not suggest that an anti-tying
remedy was inappropriate or unnecessary here; indeed, much of the
Court of Appeals" decision is a strong declaration of how
Microsoft's various forms of tying violated Section 2 of the Sherman
Act. See, e.g., Microsoft 253 F.3d at 65-67. A remedy that
truly "focused on the specific practices that the court had
ruled unlawful" would have to address the tying practices that
the Court of Appeals "ruled unlawful"; the PFJ does not.
Because Microsoft's various forms of middleware applications
tying are critical tactics that it uses to maintain its illegal
monopoly, they must be ended if the remedy is to "terminate
the monopoly." (See Microsoft's Tying Strategies To Maintain
Monopoly Power In Its Operating System ("Mathewson &
Winter Report"), attached hereto as Attachment A.)
Furthermore, the opportunity to gain market share as a result of
such tying is one of the principal fruits of Microsoft's illegality,
and should therefore be denied to it. As a result, the failure of
the PFJ to address Microsoft's tying is a fundamental flaw that
alone merits rejection of the proposed decree.
Importantly, we note that the legal and economic arguments
presented below are reinforced by the empirical observations set
forth in Section II, supra. That is, the legal and economic analysis
below which suggests that a remedy without a ban on tying will be
ineffective in theory, is supported by the fact that such a
remedy--imposed in part since July, and more substantially
since December--is proving to be ineffective in practice.
A. The Court Of Appeals Explicitly Held That Code
Commingling--A Form Of Tying Unaddressed By The
PFJ--Violates Section 2 Of The Sherman Act.
In affirming the District Court's findings of fact concerning
Microsoft's practice of commingling the code for its own middleware
products with the code for the Windows OS, the Court of Appeals made
clear that such commingling was an unlawful act in violation of
Section 2 of the Sherman Act. See Microsoft, 253 F.3d at
65-67. Specifically, the Court of Appeals concluded that
Microsoft's "commingling has an anticompetitive effect ...
[and] constitute[s] exclusionary conduct, in violation of
2." Microsoft, 253 F.3d at 6667 (emphasis added).
According to the appeals court, Microsoft's "commingling
deters OEMs from pre-installing rival browsers, thereby reducing the
rivals" usage share and, hence, developers" interest in
rivals" APIs as an alternative to the API set exposed by
Microsoft's operating system." Id. at 66. Moreover, the Court
of Appeals affirmed the District Court's finding that such
commingling was done, deliberately and intentionally, to advance
Microsoft's anticompetitive aims. Id.
Notwithstanding these clear declarations by the Court of
Appeals, this practice is not prohibited by the PFJ. Such a
prohibition was omitted despite the finding that it is
illegal--and despite the Justice Department's recognition that
the first remedial objective in a decree should be to "end the
unlawful conduct." (See CIS at 24.) Thus, Microsoft remains
free to bind its middleware applications, including the browser, to
its Windows OS --making it impossible for an OEM, or a
consumer, to remove that application from a PC without doing damage
to that PC's operating system.
Microsoft's suggestion that competition is adequately served by
allowing OEMs to pre-install rival middleware and to remove end-user
access to Microsoft middleware--instead of banning commingling-
is incorrect for several reasons. First, as the District Court found
and the Court of Appeals affirmed, commingling of code strongly
deters--and may even prevent--OEMs and consumers from
using middleware products offered by Microsoft's competitors
(because the Microsoft product is inextricably intertwined with the
OS and is thus both easier to use and harder to remove). Why would
an OEM include a competing middleware product that will cost money
to install and use up valuable space on the hard drive when
Microsoft's product is already there and has been so tightly knit
with the OS that it cannot be removed without doing damage to the
OS? As the Court of Appeals noted (citing the District Court's
holding), Microsoft's commingling has both prevented OEMs from pre-
installing other browsers and deterred consumers from using them. In
particular, having the IE software code as an irremovable part of
Windows meant that pre-installing a second browser would
"increase an OEM's product testing costs," because an
OEM must test and train its support staff to answer calls related to
every software product preinstalled on the machine; moreover, pre-
installing a browser in addition to IE would to many OEMs be
"a questionable use of the scarce and valuable space on a PC's
hard drive."
Microsoft, 253 F.3d at 64 (citations omitted).
As long as commingling is permitted, OEMs and other third party
licensees will have no incentive to take advantage of the limited
freedom provided by the PFJ and will continue to use Microsoft's
middleware products at the expense of its competitors. As a result,
commingling reduces Microsoft's
[[Page 29102]]
distribution costs for its middleware applications to zero. It also
raises the distribution costs of rival middleware application makers
-who not only must pay for something that Microsoft gets for free
(i.e., distribution via OEMs), but must also pay an added bounty to
persuade OEMs to install their applications as the second such
application on a PC. This, of course, assumes that such an added
payment strategy for such middleware would even be plausible (which
is highly doubtful, except in rare cases) and would not be defeated
by Microsoft, a rival with roughly $39 billion in cash available to
deter the prospect of being outbid by other middleware developers
for PC access.
The other way in which code commingling illegally enhances the
position of Microsoft middleware is by encouraging applications
programmers to write their programs to Microsoft's products.
(Mathewson & Winter Report at 14-16.) Third
party developers decide how to write their applications based upon
what APIs they believe will be available on the broadest number of
computers and will enable their products to function most smoothly.
See Microsoft, 253 F.3d at 55. Because the PFJ will allow Microsoft
to continue commingling its middleware and OS code, it essentially
guarantees that Microsoft's application programming interfaces
("APIs") are universally available in all Windows
environments (in other words, on virtually all PCs)--and that
software developers who write their applications to Microsoft's APIs
can write directly to the OS. This is true regardless of whether or
not end-user access to the middleware product is visible. As a
result, third party software developers (whose business interests
are to develop successful applications, not to challenge Microsoft's
monopoly) will almost always write their programs to Microsoft
middleware.
Thus, in the end, as both the Court of Appeals and the District
Court concluded here, commingling itself deters OEMs from installing
rival middleware. See Microsoft, 253 F.3d at 66; Findings of Fact,
84 F. Supp. 2d at 49-50, 159. No doubt this is why every
other remedial plan contemplated in this litigation--from the
Posner Proposal, to Judge Jackson's interim remedial order, to the
proposal set forth by the Litigating States --has prominently
included a ban on code commingling (or, at the very least, a
requirement that Microsoft make available a non-commingled version
of Windows). Yet, despite that, despite the Court of Appeals"
holding, and despite the District Court's factual findings, the PFJ
fails to prohibit or limit this practice in any manner whatsoever.
Microsoft has already demonstrated its willingness and ability
to fend off threats from competing middleware products by illegally
commingling code with the Windows OS. As currently drafted, the PFJ
gives the company a green light to continue this anticompetitive and
illegal practice. The public interest requires that Microsoft's
practice of tying its middleware and operating system, via code
commingling, be prohibited.
B. Microsoft Uses A Variety Of Other Tying Practices To Maintain
Its Operating System Monopoly; If The Monopoly Is To Be
"Terminated," Such Contractual Tying Must Be Prohibited.
The Justice Department's insistence that the remedy in this case
should not include a general tying prohibition because the
government abandoned its Section 1 tying claim is logically flawed.
Contrary to DOJ's assertions, as discussed at length above, the
ultimate remedy in this case must "terminate"
Microsoft's illegally maintained monopoly- and that can only happen
if the remedy addresses those behaviors that anticompetitively
maintain the Windows monopoly. The bundling, or contractual tying,
of Microsoft's middleware products to its Windows OS is clearly such
an anticompetitive behavior: it is the signature tactic used by
Microsoft to maintain its monopoly and fend off competitive
challenges, and it has been expressly found to be illegal by the
Court of Appeals. See, e.g., Microsoft, 253 F.3d at 61 (the
restriction in Microsoft's licensing agreements that prevents OEMs
from removing or uninstalling IE "protects Microsoft's
monopoly from the competition that middleware might otherwise
present. Therefore, we conclude that the license restriction at
issue is anticompetitive.") (emphasis added); see also
Mathewson & Winter Report at 13-33. Put
another way, various tying practices were found by the Court of
Appeals to illegally reinforce Microsoft's OS monopoly and thus must
be banned in order to realize the remedial mandate of the Court of
Appeals and the public interest objectives of the Tunney Act.
The anticompetitive nature of tying is apparent on its face: it
reduces competition and consumer choice, making it less likely for
Windows consumers to acquire and use non-Microsoft middleware
products for reasons unrelated to the merits of those products. See
Microsoft, 253 F.3d at 60 (upholding District Court's conclusion
that contractually restricting OEMs" ability to remove IE
"prevented many OEMs from distributing browsers other than
IE"); see also Mathewson & Winter Report at 23.
Microsoft only makes Windows available for license to OEMs in a
bundle that includes a number of its middleware applications (e.g.,
Internet Explorer, Windows Media Player, Windows Messenger, MSN).
Microsoft also contractually prohibits OEMs from removing its
applications from the bundled offering. As explained in the attached
economic report from Professors Frank Mathewson and Ralph Winter,
such tying is anticompetitive and should fall under the purview of
these remedy proceedings for four principal reasons: (1) it
reinforces Microsoft's monopoly by increasing the applications
barrier to entry against OS competitors; (2) it reinforces
Microsoft's monopoly by deterring direct challenges to the OS itself
as the platform of choice for software developers; (3) it weakens
the greatest current competitor to Windows--prior versions of
Windows; and (4) Microsoft's more recent practice of tying the
Windows Media Player to the OS creates a new variant of the
applications barrier to entry problem for potential OS rivals: a
content-encoding barrier to entry. (See Mathewson & Winter
Report, passim.)
First, tying anticompetitively strengthens Microsoft's OS
monopoly by reinforcing the applications barrier to entry against OS
competitors. (Id. at 14-16.) The dominance of the
Windows standard in a wide range of applications, including a few
particularly important applications, hampers entry into the
operating system market because an entrant has to offer both a new
operating system and a full set of applications, or hope that
applications will quickly develop once the new operating system
becomes available. See Microsoft, 253 F.3d at 55 (applications
barrier to entry stems, in part, from the fact that "most
developers prefer to write for operating systems that already have a
substantial consumer base"). This is referred to as the
applications barrier to entry, and the District Court found that it
served to protect Microsoft against an OS challenge from IBM in the
1990s. Id. (upholding District Court's finding that "IBM's
difficulty in attracting a larger number of software developers to
write for its platform seriously impeded OS/2's success").
By engaging in tying to gain dominance in key applications
markets, Microsoft can turn the already-daunting applications
barrier to entry into a virtually insurmountable shield. As the
Court of Appeals explained, "Microsoft's efforts to gain
market share in one market (browsers) served to meet the threat to
Microsoft's monopoly in another market (operating systems) by
keeping rival browsers from gaining the critical mass of users
necessary to attract developer attention away from Windows as the
platform for software development." Microsoft, 253 F.3d at 60.
If Microsoft controls the key applications, it can unilaterally
decide not to make those applications available for even the most-
promising rival operating systems. Microsoft's tying thus
anticompetitively advantages its position in the middleware
applications market and sustains its OS monopoly as well. (See
Mathewson & Winter Report at 66.)
Consider, for example, Microsoft Office. At one point, companies
such as Corel and Lotus provided the most popular versions of these
applications. At that time, to compete with Microsoft's Windows,
rival operating systems needed to persuade Corel and Lotus to port
their applications to those rival systems. Now that Microsoft has
successfully leveraged Windows to obtain dominance in the Office
suite of applications, however, rival OS providers would have to
persuade Microsoft to port Office to rival systems.
If Microsoft can gain dominance with key middleware applications
such as Office, MSN Messenger, and Windows Media Player, it can
ensure that rival operating systems cannot meet customers"
demands for the most popular applications. That is, when Microsoft's
browser, Microsoft's media player, and Microsoft's instant messenger
are dominant in those applications markets, Microsoft may choose not
to write its applications to interoperate with a potential rival
OS--making it much more difficult for nascent operating systems
to compete with Windows. Thus, Microsoft's tying, over time, takes
today's very high "applications barrier to entry," and
raises it immeasurably higher. (See Mathewson & Winter Report at
66.)
[[Page 29103]]
Second, tying reinforces Microsoft's monopoly by deterring
direct challenges to the OS itself as the platform of choice for
software developers. (Id. at 17-19.) A clear
incentive for Microsoft to tie its Internet Explorer browser with
Windows was the threat that Netscape--on its own, or combined
with Java software--would eliminate Microsoft's network
advantages in the operating system by providing middleware that
would offer a competing platform for software developers. As the
District Court and Court of Appeals found, Netscape and Java were
particular threats to Microsoft's dominance in operating systems
because they potentially represented a platform/programming
environment in which software applications could be developed
without regard to the underlying operating system. See Microsoft,
253 F.3d at 74. With middleware, the success of a new operating
system no longer depended on the development of new code by every
application developer. (See Mathewson & Winter Report at
19.)
If rivals develop valuable, widely distributed middleware,
software vendors could very well begin to write most of their
applications directly to that middleware, and the applications
barrier to entry would disappear. By using anticompetitive tying to
dominate each promising field of middleware, Microsoft ensures that
software developers face a unified field of proprietary Microsoft OS
and middleware interfaces. (Id.) Thus, Microsoft's tying practices
serve, in this way too, to reinforce and entrench its illegal OS
monopoly.
Third, tying weakens the greatest current competitor to
Windows--prior versions of Windows. (Id. at
27-30.) Existing versions of Windows provide
competitive constraints on Microsoft for a simple reason: if new
versions of Windows are insufficiently innovative or too expensive,
consumers will choose to retain their older versions of the product.
Through tying, however, Microsoft weakens this source of competition
in two ways. First, new versions of Windows are marketed as much for
new applications as for new OS features. Windows XP, for example, is
being marketed in part for its inclusion of new applications, such
as Windows Media Player 8.0--not just based on innovations and
improvements to the OS itself. Second, middleware applications such
as Internet Explorer, Windows Media Player (with the attendant
Microsoft Digital Rights Management), and MSN allow Microsoft to
track consumer usage. Microsoft's binding of these products to
Windows thus creates a total product that lends itself to usage and
leasing fees. By gradually reducing the price of Windows and
increasing the usage fees on its tied applications, Microsoft can
shift to a usage or leasing revenue model, rather than a revenue
model based on sales. This eliminates the competitive threat from
previous versions of Windows (in addition to providing Microsoft
with the fruits of its illegal behavior, as discussed in Section
III.C, below). (See id. at 28.)
One might argue that the durable-goods monopoly problem is
eliminated by Microsoft's refusal to allow OEMs to install (without
penalty) old versions of Windows. As explained in the attached
Mathewson & Winter Report, this is incorrect for two reasons:
"(i) increases in the price of the new version of Windows will
reduce overall demand for new PCs, as users invoke the option to
keep existing PCs with the old version, and (ii) there is a retail
market for new versions of Windows software for installation on
existing PCs. Both (i) and (ii) provide channels through which the
existing stock of Windows software provides some competition for a
new version of Windows (i.e., it increases the elasticity of demand
for the new version). If the price of a new version is increased,
the demand for the new version is reduced because fewer consumers
will purchase new PCs as the price increase for Windows raises the
price of the overall package of the PC and the (mandated by
Microsoft) new version of Windows, and because some consumers who
would have purchased Windows to install on their old PCs will now
refuse to do so." (See Mathewson & Winter Report at 12 n.
10.)
Fourth, in addition to these three general ways in which
Microsoft's contractual tying reinforces the OS monopoly,
Microsoft's more recent tying of its media player to the OS creates
yet another special and highly significant reinforcement of the
Windows monopoly. (See Mathewson & Winter Report at 36.)
This problem results from the close connection between the media
player and Microsoft's proprietary media encoding format, Windows
Media Audio ("WMA"). Because Microsoft does not license
the WMA format to some rival media players--including, most
notably, the only other media player with substantial market
presence, Real Player--Microsoft's media player is the only
major player that can play content encoded in Microsoft's format. As
Microsoft's format becomes more and more widespread--it is
currently growing in use at a rate ten times that of its
rivals--more and more content will become viewable and playable
only via Microsoft's media player, which is only distributed via
Microsoft's OS.
In such a market, then, a rival OS would have to overcome not
only today's applications barrier to entry to compete with
Windows--that is to say, it would have to persuade application
writers to write their applications to interoperate with their
OS--it would also have to overcome a new, even more daunting
"content encoding barrier to entry"--i.e., it would
have to persuade owners of thousands (or perhaps even millions) of
pieces of multi-media content to re-encode their content in formats
that the media player used by the rival OS could read. (Id. at
37-38.) This barrier to entry applies not only to
rival PC operating systems, but also to evolving operating systems
for handheld and mobile communications devices, since consumers will
want to access the best streaming content using those devices. Thus,
the currently daunting applications barrier to entry is raised many
times higher by virtue of the tying of the Windows Media Player (and
its related proprietary formats) to the Windows OS.
All four of these anticompetitive effects are mutually
reinforcing, because of the network effects operating between the
applications sector and the operating system market. (Id. at
31-33.) Achieving dominance in applications
(through tying) strengthens the dominance of the OS, because buyers
in the OS market are more assured of available applications. The
greater dominance in the OS market in turn feeds back into greater
dominance in applications, since the tying strategies take the form
of imposing an artificial advantage relative to applications of the
dominant OS supplier. The greater Microsoft's share across all
middleware applications markets, the greater the applications
barrier to entry.
Thus, a remedy that does not forbid Microsoft's anticompetitive
tying leaves in place one of Microsoft's most powerful tools to
maintain its OS dominance--and as a result, does not
"unfetter" the market or "terminate" the
illegal monopoly. For this reason, the PFJ's failure to include a
ban on bundling is not in the public interest.
C. By Allowing Microsoft To Continue To Tie Its Middleware
Applications To Windows, Microsoft Retains One Of The Most Valuable
"Fruits" Of Its Illegal Acts.
The Court of Appeals made clear that one necessary element of
any remedy in this case was to "deny to [Microsoft] the fruits
of its violation." See Microsoft, 253 F.3d at 103 (quoting
United Shoe Mach. Corp., 391 U.S. at 250). This is in accord with
the prevailing doctrine in this area. See Grinnell Corp., 384 U.S.
at 577; 2 P. Areeda & H. Hovenkamp, Antitrust Laws 325(c)
(2d ed. 2000).
The Court of Appeals found that Microsoft illegally maintained
its OS monopoly by engaging in anticompetitive practices. See
Microsoft, 253 F.3d at 51, 66. Here, because of the nature of its
monopoly, one of the most lucrative fruits of Microsoft's illegal
behavior is the ability to bundle its other software products with
the OS and reap gains in those markets as well. In this way, the
PFJ's failure to ban such tying clearly renders it deficient,
because without such a prohibition it will fail to prevent future
violations of Section 2, as discussed above--and also fail to
prevent Microsoft from reaping the benefits of the OS monopoly that
it illegally maintained. Without such a prohibition, Microsoft will
be able to continue profiting from its anticompetitive behavior and
will have evaded any real punishment for breaking the law.
For these reasons, as with the ban on code commingling discussed
above, every other remedial proposal considered in this litigation
included a ban on Microsoft's contractual tying via bundling. A
formulation of such a ban was found in Judge Jackson's interim
conduct remedies, which--in addition to the ban on binding
middleware products to the OS--would also have prohibited
Microsoft from "conditioning the granting of a Windows
Operating System Product license ... on an OEM or other licensee
agreeing to license, promote, or distribute any other Microsoft
software product that Microsoft distributes separately from the
Windows Operating System Product in the retail channel or through
Internet access providers, Internet content providers, ISVs or
OEMs." United States v. Microsoft, 97 F. Supp. 2d 59, 68 (D.DC
2000).
Judge Posner's proposal would have prohibited tying any
middleware product
[[Page 29104]]
with the OS unless Microsoft offered a version of the OS without the
middleware application, and did so at a reduced price. See Posner
Proposal 3(9). The litigating states also have proposed a very
similar remedial approach. (See LSRP at 4-6.) Thus, it is only
the PFJ, among the various proposals, that has failed to take this
essential step to terminate Microsoft's OS monopoly, and deny
Microsoft the fruit of its illegal acts. A remedy without such a
provision cannot be in the public interest.
IV. THE PROPOSED FINAL JUDGMENT FURTHER FAILS THE PUBLIC
INTEREST TEST, BECAUSE IT DOES NOT ACHIEVE EVEN THE LIMITED
OBJECTIVES THAT IT HOLDS OUT AS ITS AIMS.
As demonstrated above, the PFJ fails to address Microsoft's
anticompetitive tying of middleware applications to the Windows OS,
and consequently fails to fulfill the remedial mandate of the Court
of Appeals. Yet, even for those anticompetitive acts that the PFJ
does attempt to address, it does not provide an adequate remedy for
Microsoft's illegal conduct. Indeed, the PFJ is so replete with
carefully crafted carve-outs and exceptions that many of its
provisions, though well intentioned, are rendered meaningless. The
result is that the PFJ will do little, if anything, either to
terminate Microsoft's monopoly or constrain its ability to fend off
middleware threats in the future. And, as we argue above, the
preliminary experience with these provisions--since the onset
of their implementation by Microsoft provides little reason to
believe that the PFJ will be effective in practice. See Section II,
supra.
While any conduct remedy will, of course, have limitations and
the potential for evasion, none of the major defects in the PFJ are
inherent in the nature of this sort of remedy. The Litigating
States" Remedial Proposal provides a useful contrast on this
point. Unlike the PFJ, the LSRP does not leave certain of
Microsoft's anticompetitive acts unaddressed or leave Microsoft with
the ability to perpetuate its operating system monopoly by illegally
eliminating competitive threats from middleware developers. The
Litigating States" Remedial Proposal prevents Microsoft from
continuing its anticompetitive practices, is designed to restore the
competitive balance in the marketplace, and seeks to ensure that
competitive threats may emerge in the future unhindered by
Microsoft's anticompetitive conduct. As such, it fully comports with
the Court of Appeals" decision and provides this Court with a
clear roadmap of what the public interest requires in this case.
To avoid undue length or repetition, we do not here provide a
comprehensive list of all the numerous inconsistencies, loopholes,
and shortcomings of the PFJ; we have included, in Attachment B, a
more complete listing for the Court's benefit. (See A Detailed
Critique of the Proposed Final Judgment in U.S. v. Microsoft,
Attachment B.) In this Section, instead, we focus on six critical
deficiencies in remedies that (unlike tying) are purportedly
addressed in the PFJ: (1) the PFJ's failure to prevent Microsoft's
discriminatory licensing practices; (2) its limited and slow-moving
API disclosure provisions; (3) its inadequate protections for OEMs
from retaliation; (4) its failure to promote distribution of Java;
(5) its "gerrymandered"finition of middleware; and (6)
its complete lack of an effective enforcement mechanism. Where
helpful, we contrast the relevant provision in the litigating
states" proposal for comparison's sake. By comparing the two
proposals on a few central issues, it should be clear why the LSRP,
and not the PFJ, addresses Microsoft illegal conduct in manner that
both comports with the Court of Appeals" decision and serves
the "public interest" under prevailing antitrust law.
A. The PFJ Allows Microsoft To Continue Engaging In
Discriminatory. And Restrictive Licensing Agreements To Curtail The
Use Of Rival Middleware Products.
One of the ways in which the District Court found, and the Court
of Appeals upheld, that Microsoft illegally protects its operating
system monopoly from rival middleware is through discriminatory and
restrictive licensing provisions. Specifically, the Court of Appeals
found that Microsoft uses its licenses not only to reward OEMs that
utilize and promote its products (and to discriminate against those
OEMs that wish to promote non-Microsoft products), but also to
restrict the manner in which OEMs can distribute rivals"
products. See Microsoft, 253 F.3d at 61-67.
Despite these findings, the PFJ permits Microsoft to continue to
employ discriminatory and restrictive licensing agreements to
curtail the use of its competitors" products. As currently
structured, the PFJ allows Microsoft to continue its use of
discriminatory and restrictive licensing provisions to fend off
nascent threats from middleware competitors in several ways. First,
the PFJ explicitly allows Microsoft to provide market development
allowances to favored OEMs; it likewise allows Microsoft to enter
into "joint ventures" with OEMs, that, in practice, are
little more than shells for arrangements by Microsoft to shower
financial rewards on OEMs that are willing to refuse to deal with
Microsoft's competitors. Given the intense competition and low
margins in the OEM industry, these rewards would create a decisive
competitive disadvantage for "disfavored" OEMs, forcing
them to accede to Microsoft's restrictive terms.
The PFJ's mechanisms for enabling these anticompetitive tactics
are surprisingly explicit. Under Section III.B.3 of the PFJ,
Microsoft is allowed to pay OEMs "market development
allowances" to promote Windows products. Thus, OEMs that
promote Microsoft products apparently can receive de facto cash
rebates on their Windows shipments, while OEMs that deal with
Microsoft's rivals will pay full list price. This preferential
behavior in the browser market was found illegal by both the
District Court and the Court of Appeals. See Microsoft, 253 F.3d at
60-61. Microsoft should be allowed to engage in legitimate
pricing decisions, but those decisions should be limited to volume-
based discounts published in its price lists.
Second, under Section III.G.2 of the PFJ, Microsoft may use
"joint ventures" to escape any restrictions the proposed
settlement would place on its licensing practices. For example,
Microsoft may join an OEM in a joint venture for any "new
product, technology or service" or improvement to any existing
"product, technology or service," provided that the OEM
contributes significant developer "or other resources."
(See PFJ at Section III.G.2.) In such an arrangement, Microsoft can
seek, and obtain, a pledge that its partner be "prohibit[ed]
... from competing with the object of the joint venture
. . . for a reasonable period of time." (Id. at
III.G.) Thus, Microsoft could enter into a "joint
development" project for the "new product" of
"Windows X for Preferred OEM Y." The OEM's contribution
could be entirely in marketing and distribution. Yet, under the
language of the PFJ, it appears that Microsoft would have the
ability to contractually prohibit OEMs in such joint ventures from
offering products or services that compete with Microsoft. Given
Microsoft's history of abusive and coercive behavior toward OEMs, it
should not be allowed to enter into joint ventures with OEMs that
result in exclusive agreements. Otherwise, in no time at all,
Microsoft will use the opportunity to squelch competition.
Third, the PFJ purports to provide OEMs with the freedom and
flexibility to configure the computers they sell in a way that does
not discriminate against non-Microsoft products. Under Section
III.C, the PFJ ostensibly prohibits Microsoft from entering into an
agreement that would - among other things--restrict an OEM's
ability to remove or install desktop icons, folders and Start menus,
and modify the initial boot sequence for non-Microsoft middleware.
However, the PFJ contains carve-out provisions that may render these
prohibitions effectively meaningless. Under the express terms of
Section III.C.1 of the PFJ, Microsoft may retain control of desktop
configuration by being able to prohibit OEMs from installing or
displaying icons or other shortcuts to a non-Microsoft product or
service, if Microsoft does not provide the same product or service.
Thus, for example, if Microsoft does not include a media player
shortcut inside its "My Music" folder, it can forbid an
OEM from doing the same. This turns innovation--and the premise
that OEMs be permitted to differentiate their products--on its
head: under the PFJ, rivals can "compete" with
Microsoft, but they are never allowed a chance to bring a product to
market first, to offer a functionality before Microsoft does, or to
benefit from their innovations before Microsoft determines that it
is ready to meet (and if history is a guide, extinguish) these
competitive challenges.
Additionally, under the PFJ, Microsoft can control the extent to
which non-Microsoft middleware is promoted on the desktop by virtue
of a limitation that OEMs may promote such software at the
conclusion of a boot sequence or an Internet hook-up only if they
display no user interface or a user interface that is "of
similar size and shape to the user interface provided by the
corresponding Microsoft middleware." (See PFJ at III.C.3.) And
OEMs are allowed to offer Internet Access Provider
("IAP") promotions at the end of a boot sequence, but
only for their own IAP offerings (whatever that ambiguous
[[Page 29105]]
limitation means). (See id. at III.C.5.) Thus, under the PFJ,
Microsoft maintains the ability to set the parameters for
competition and user interface. In order to promote competition from
rival middleware, Microsoft must be prohibited from entering into
restrictive and discriminatory contractual agreements with its
licensees. Although remedial proposals could have been crafted to
address these anticompetitive practices, the PFJ falls short of this
mark.
By contrast, the Litigating States" Remedial Proposal
would bring Microsoft's unlawful behavior to an end and thus provide
competing middleware the opportunity to receive effective
distribution through the important OEM channel. Under the LSRP,
Microsoft would be required, at a minimum, to offer uniform and non-
discriminatory license terms to OEMs and other third-party
licensees. The LSRP would also require Microsoft to permit its
licensees to customize Windows to include whatever Microsoft
middleware or competing middleware the licensee wishes to sell to
consumers. (See LSRP at 7-9.)
In addition, the LSRP specifically prohibits Microsoft from
employing market development allowances, including special discounts
based on joint development projects. It also gives OEMs and other
third-party licensees the flexibility to feature non-Microsoft
products in ways that increase the likelihood that consumers will
use them, without providing broad exceptions that enable Microsoft
to avoid its obligations. Thus, it is the LSRP--and not the
PFJ--that meets the Tunney Act's "public interest"
standard.
B. The PFJ Requires Microsoft To Disclose APIs Only In Certain,
Narrow Circumstances.
Another key element of the government's case against Microsoft
was the company's withholding of the operating system's API
information from rivals, so as to illegally degrade the performance
of rival applications. In any market where Microsoft is allowed to
withhold APIs, rival software will perform imperfectly in the
Windows environment, and Microsoft will illegally gain dominance.
Accordingly, in order to promote competition from rival middleware
developers, it is essential that Microsoft be required to provide
timely access to all technical information required to permit non-
Microsoft middleware to achieve interoperability with Microsoft
software.
Section III.D of the PFJ imposes an obligation on Microsoft to
disclose to Independent Software Vendors ("ISVs"), and
others, the APIs that Microsoft middleware uses to interoperate with
any Windows OS product. However, the PFJ's requirement for API
disclosure is drawn much too narrowly to allow non-Microsoft
middleware to compete fairly with Microsoft middleware. Here again,
a comparison with the proposal of the litigating states is
instructive.
First, the PFJ's disclosure requirement fails to prevent
"future monopolization," because it fails to apply to
critical technologies that Microsoft is likely to use to maintain
the power of its OS monopoly in the future. Because nascent threats
to Microsoft's monopoly operating system currently exist beyond the
middleware platform resident on the same computer, any effective API
disclosure requirement must apply to all technologies that could
provide a competitive platform challenge to Windows, including
network servers, web servers, and hand-held devices. The PFJ does
not; by contrast, the Litigating States" Remedial Proposal
expressly provides that Microsoft must disclose all APIs, technical
information, and other communications interfaces so that Microsoft
software installed on one computer (including personal computers,
servers, handheld computing devices and set-top boxes) can
interoperate with Microsoft platform software installed on another
computer. (See LSRP at 11.)
Second, the PFJ creates an apparent exception for Microsoft's
API disclosure requirement in the emerging areas of identity
authentication and digital rights management
("DRM")--critical applications that are also
important to the prospects of Microsoft's "future
monopolization." Section III.J. 1 .(a) appears to exempt
Microsoft from disclosing any API or interface protocol "the
disclosure of which would compromise the security of ... digital
rights management ... or authentication systems, including without
limitation, keys, authorization tokens or enforcement
criteria." This exception is written much more broadly than
any of the limits on Microsoft behavior, and could easily be used to
protect Microsoft's APIs relating to DRM and identity authentication
applications. The implication of this is that any rival DRM or
authentication software will not function as well as Microsoft's
DRM, Passport, and .Net My Services (formerly known as Hailstorm).
Thus, under the PFJ, Microsoft may be able to degrade the
performance of any rivals to any of these services.
These markets, however, are just as important to the next stage
of the industry's evolution as browsers were to the last stage. DRM
solutions, for example, allow content vendors to sell audio and
video content over the Internet on a "pay for play"
basis. Since the most prevalent use of media players in the years
ahead will be in playing content that is protected in this fashion,
if non-Microsoft media players cannot interoperate with
Windows" DRM solution, those media players will be virtually
useless except for "freeware" content. Thus, if DRM is
exempt from API disclosures under the PFJ, Microsoft can destroy the
competitive market for one of the most vital forms of
middleware--media players.
The authentication exemption is potentially even more far-
reaching. Most experts agree that the future of computing lies with
server-based applications that consumers will access from a variety
of devices. Indeed, Microsoft's ".Net" and ".Net
My Services" (formerly known as Hailstorm) are evidence that
Microsoft certainly holds this belief. These services, when linked
with Microsoft's Passport, may allow Microsoft to participate in a
substantial share of consumer e-commerce transactions over the
Internet, irrespective of which device is used to access the
Internet (cell phones, handheld computers, etc.). If Microsoft
prevents competition with its Passport standard, it may be able to
realize its stated goal of charging a fee for every single e-
commerce transaction on the Internet.
Under the guise of security, Microsoft has obtained a loophole
in the PFJ that undercuts a critical disclosure requirement.
Microsoft's legitimate security concerns which, of course, are
shared by all of its major business rivals--do not require this
loophole. Section III.J.2 of the PFJ excludes from disclosure rights
any company with a history of software counterfeiting or piracy or
willful violation of intellectual property rights, or any company
that does not demonstrate an authentic and viable business that
requires the APIs. This means that Microsoft only has to disclose to
bona fide software rivals whose interests in security and stability
are as great as Microsoft's. As added protection, Section III.J. 1
.(b) of the PFJ allows Microsoft to refrain from any disclosure
simply by persuading an impartial government body, on a case-by-case
basis, that a specific disclosure would put system security at risk.
Together, these provisions provide Microsoft with all the room it
needs to take legitimate security precautions.
Once again, the litigating states" proposal provides a
useful contrast. It contains no disclosure "carve out"
to exempt DRM and identity-authentication from the general
disclosure obligation imposed on Microsoft. (See LSRP at 11.)
Instead, it creates a regime of timely, complete, and comprehensive
API disclosure that will allow competitors an opportunity to
challenge Microsoft's efforts to entrench its OS monopoly in a
market where distributed computing is the dominant model--an
opportunity that was sadly missed as the browser became critical to
Internet-related applications, due to Microsoft's anticompetitive
refusals to share technical information. Thus, once again, it is the
LSRP, not the PFJ, that would meet the Court of Appeals"
objectives and the public interest standard.
C. The PFJ Does Not Ban Many Forms Of Retaliation By Microsoft
Against OEMs.
The District Court found, and the Court of Appeals upheld, that
in order to create a competitive market structure in which non-
Microsoft middleware products are able to compete effectively with
Microsoft products, licensees, such as OEMs, must have the ability
to distribute and promote non-Microsoft products without fear of
coercion or interference from Microsoft. Recognizing the central
role that OEMs play in the distribution and ultimate usage of non-
Microsoft middleware products, the PFJ includes an anti-retaliation
provision which is intended to protect those entities that support
or promote non-Microsoft products. According to the Department of
Justice, this anti-retaliation provision "broadly prohibits
any sort of Microsoft retaliation against an OEM based on the OEM's
contemplated or actual decision to support non-Microsoft
software." (See CIS at 25.)
Unfortunately, the PFJ does not provide the broad protection
from Microsoft's retaliation that the government claims it does.
Indeed, the PFJ's anti-retaliation provision is so narrow that it
will do little, if anything, to protect OEMs that wish to distribute
or promote non-Microsoft products.
The PFJ's anti-retaliation provision is deficient in numerous
respects. First, it
[[Page 29106]]
appears to create only a narrow range of procompetitive activities
that OEMs can engage in without being subject to Microsoft
retaliation. For example, the PFJ prohibits retaliation for OEMs
that promote rival middleware, but does not appear to prohibit
retaliation against OEMs that promote any other type of rival
software (which, under the PFJ's language, probably includes rivals
to Passport, MS Money, Windows Movie Maker, and MSN Messenger, just
to name a few). Even if this glitch were unintentional, the
ambiguity might still be sufficient to allow Microsoft to coerce
OEMs into avoiding Microsoft rivals.
Second, even within the scope of protected OEM activities, the
PFJ appears to bar only certain types of Microsoft retaliation. The
PFJ prohibits Microsoft from withholding "newly introduced
forms of non-monetary Consideration" from OEMs, but is less
clear about whether Microsoft may use already-existing forms of
consideration to retaliate against OEMs. (See PFJ at III.A.) More
importantly, while the PFJ prohibits Microsoft retaliation via an
alteration of commercial agreements, it does not appear to prohibit
any other form of Microsoft retaliation (e.g., product
disparagement) that Microsoft can imagine.
In addition, under Section III.A of the PFJ, Microsoft may, sua
sponte, terminate an OEM's Windows license after sending the OEM two
notices stating that it believes the manufacturer is violating its
license. There need not be any adjudication or determination by any
independent tribunal that Microsoft's claims are correct. All that
is required are two notices; after that, Microsoft may terminate an
OEM's license. This provision means that the OEMs are, at any time,
just two registered letters away from unannounced economic calamity;
after all, given Microsoft's monopoly on the operating system,
termination of an OEM's Windows license is a death sentence for an
OEM's business.
Again, such inadequate safeguards are not inherent in an
effective non-retaliation protection. For instance, the Litigating
States" Remedial Proposal prevents Microsoft from taking any
action that directly or indirectly adversely affects OEMs or other
third-party licensees that in any way develop, distribute, support
or promote competing products, thereby providing the type of
protection contemplated by the Court of Appeals. (See LSRP at
13-14.) Thus, the Litigating States" Remedial Proposal
clearly prohibits Microsoft retaliation for any procompetitive OEM
behavior and prohibits all forms of Microsoft retaliation.
Importantly, the LSRP also prohibits Microsoft from retaliating
against any individual or entity for participating in any capacity
in any phase of this litigation. Again, it is the LSRP that meets
the Court of Appeals" objectives for this case--not the
PFJ.
D. The PFJ Does Nothing To Remedy Microsoft's Illegal Camoaion
To Eliminate Java.
Yet another aspect of the trial court's decision that was upheld
on appeal by the DC Circuit was the District Court's finding that
Microsoft's actions in eliminating the threat posed by Sun
Microsystems" Java technology were unlawful under Section 2 of
the Sherman Act. See Microsoft, 253 F.3d at 74-75. The PFJ,
however, omits any remedy for this core abuse. Thus, unlike either
the District Court's remedy or the remedy Judge Posner suggested,
the PFJ does not protect those specific products, such as Java, that
actually compete with Windows today and offer alternatives to
Microsoft's dominance.
The Litigating States" Remedial Proposal addresses this
deficiency by requiring that Microsoft distribute Java with its
platform software for a period of ten years. (See LSRP at
17-18.) The LSRP recognizes, as did the District Court and
Judge Posner, that in order to ensure that rival products such as
Java can compete with Microsoft, they must receive the widespread
distribution that they could have obtained absent Microsoft's
unlawful behavior.
The requirement that Microsoft distribute Java with its
operating system and Internet Explorer browser takes on even greater
importance in light of Microsoft's recent behavior. For example,
although the Court of Appeals upheld the trial court's finding that
Microsoft targeted and destroyed independent threats from the Java
programming language, see Microsoft, 253 F.3d at 53-56, 60,
Microsoft announced less than a month later that it was dropping any
support for Java from Windows XP. As The Wall Street Journal
reported at the time, "This favors Microsoft's new
technologies, and will inconvenience consumers.... [I]f you want
your Web page accessible to the largest number of people, you may
want to drop Java" and switch to Microsoft's competing set of
products, which is under development and is known as .NET."
Thus, notwithstanding the Court of Appeals" holding that
Microsoft illegally maintained its monopoly by requiring major
independent software vendors to promote Microsoft's JVM exclusively
(i.e., by requiring developers, as a practical matter, to make
Microsoft's JVM the default in the software they developed),
Microsoft is again acting illegally to maintain--and further
entrench--its operating system monopoly against Java's
middleware threat.
To remedy the specific and extensive anticompetitive tactics
aimed at Java, as found by the District Court and affirmed by the
Court of Appeals, Microsoft should be ordered--as outlined in
the Litigating States" Remedial Proposal--to distribute
with its platform software a current version of the Java middleware.
This would ensure that Java receives widespread distribution, thus
increasing the likelihood that it can serve as a viable competitive
platform to Windows. Although rivals such as Java will likely remain
small players compared to the dominant Windows OS, their existence
on the competitive fringe is critical to provide some competitive
discipline to Microsoft on pricing and coercion matters. Moreover,
the existence of these rivals creates a base for future developments
that might one day provide true alternatives to Windows.
E. The PFJ Includes A "Gerrymandered" Definition Of
Middleware.
Though not readily apparent, the effectiveness, or lack thereof,
of the PFJ's restrictions on Microsoft's behavior heavily depends on
the proposed agreement's definition of "middleware."
Under the proposed settlement, OEMs are protected from retaliation
and can promote competitive alternatives to Microsoft products only
in the area of middleware. Thus, if rival software falls outside of
the definition of middleware, Microsoft can essentially use its
coercive might to prevent that software from being distributed via
OEMs. Conversely, if a Microsoft product is not classified as
middleware, Microsoft is permitted to use coercion to force its
adoption and promotion.
The PFJ adopts a new, and greatly narrowed, definition of
middleware, both in terms of "Microsoft Middleware
Products" and "non-Microsoft Middleware." The
result is significant because under the newly created definition,
Microsoft may be able to subvert many of the PFJ's restrictions. The
Litigating States" Remedial Proposal defines middleware in a
manner consistent with the definition adopted by both the District
Court and the Court of Appeals. It thus prevents Microsoft from
using a definitional shell game to avoid changing its unlawful
behavior.
The District Court and the Court of Appeals adopted the same
definition of middleware: software products that expose their own
APIs; are written to interoperate with a variety of applications;
and are written for Windows as well as multiple operating systems.
See Microsoft, 253 F.3d at 53; see also Findings of Fact, 84 F.
Supp. 2d at 17-18, 28-29. Thus, while the DC
Circuit discussed browsers and the Java technologies as leading
examples of middleware, Microsoft, 253 F.3d at 59-78, it never
adopted an exclusive list limited to specific products (as the PFJ
does).
Importantly, the Court of Appeals also agreed with the District
Court that the appropriate category of "middleware"
applications that merit protection against Microsoft's
anticompetitive conduct includes any application that could operate
separately or together with other such applications to create even
the "nascent" potential for alternative platforms that
could compete with Microsoft's OS monopoly. Id. at 52-54,
59-60, 74.
These standard definitions of middleware were also endorsed in
the Posner Proposal, which, as noted above, Microsoft was reportedly
ready to accept last year. Section 2(3) of the Posner Proposal
defined middleware broadly, to include any "software that
operates between two or more types of software ... and could, if
ported to multiple operating systems, enable software products
written for that middleware to be run on multiple operating
systems." Moreover, the substantive portion of the Posner
Proposal, in Section 3(8)(c), explicitly included not just
enumerated products, but also any "middleware distributed with
such operating system installed on one personal computer to
interoperate with any of the following software installed on a
different personal computer or on a server: (i) Microsoft
applications, (ii) Microsoft middleware, or (iii) Microsoft client
or server operating systems."
The PFJ departs significantly from these established definitions
of middleware and
[[Page 29107]]
instead adopts wholly new definitions for both "Microsoft
Middleware Products," and "non-Microsoft
Middleware." These definitions include several flaws that
Microsoft may be able to use to anticompetitively advantage its
applications, continue to profit from the fruits of its illegally
maintained monopoly, and evade the practical consequence of the PFJ
for many product lines.
To start, the PFJ's definition of "Microsoft Middleware
Products" appears to limit this category to five specifically-
listed existing products and their direct successors. This makes no
sense for two reasons. First, why define the most critical term in
the proposed settlement narrowly when Microsoft has already
demonstrated its skill at evading consent judgments? And second, why
does the list include certain Microsoft products, but arguably not
their virtually indistinguishable cousins: i.e., Outlook Express,
but not Outlook; Windows Messenger, but not MSN Messenger; the
Microsoft JVM, but not MSN RunTime; Internet Explorer, but not MSN
Explorer. Likewise, Microsoft middleware applications such as the
MSN client software and Passport appear to be excluded. The
significance of these omissions cannot be overstated. For example,
although Microsoft must allow OEMs, under the PFJ, to remove end-
user access to Internet Explorer, the decree's language appears to
allow Microsoft to ban any effort to replace MSN Explorer with a
competitor. This is a step backwards from the status quo.
Additionally, Section III.H.2 of the PFJ explicitly limits OEM
flexibility to set non-Microsoft Middleware as a default so that it
can be automatically invoked: the PFJ appears to allow OEMs to do so
only with competitors of "Microsoft Middleware Products"
that (1) appear in separate Top-Level Windows, with (2) separate
end-user interfaces or trademarks. Thus, Microsoft might be able to
avoid the PFJ's provisions simply by embedding Microsoft middleware
with other middleware, or not branding it with a trademark. That
means Microsoft--not the OEMs, and certainly not the
market--would determine the scope of desktop competition and
the pace of desktop innovation.
Conversely, the definition of the rivals to Microsoft Middleware
Products "non Microsoft Middleware Product"--is
also jury-rigged to advantage Microsoft. Under Section IV.N of the
PFJ, protected middleware products are limited to those applications
"of which at least one million copies were distributed in the
United States within the previous year." Thus, developers have
no protection from Microsoft's well-honed predatory tactics until
they can obtain substantial distribution. The PFJ's middleware
definition also does not explicitly include web-based services, the
most important future platform challenge to the Windows monopoly.
These web-based services represent an important and growing type of
middleware, and the PFJ's failure to explicitly cover them may allow
Microsoft to recreate and extend its desktop monopoly to new
platforms.
The newly created and narrowly crafted definitions of middleware
in the PFJ pave the way for Microsoft to avoid many of the
prohibitions on its conduct. The middleware definitions in the LSRP,
on the other hand, are consistent with those endorsed by the
District Court and Court of Appeals, and ensure that the protections
from Microsoft's illegal conduct are extended to Microsoft's
competitors in critical middleware markets.
F. The PFJ Lacks A Meaningful Enforcement Mechanism.
For any remedy against Microsoft to be effective, it must
include a strong, timely, and meaningful enforcement mechanism. The
PFJ creates an extraordinarily weak enforcement authority--one
that likely will be overwhelmed and co-opted by Microsoft. More
specifically, as currently drafted, there are two principal problems
with the PFJ's enforcement mechanism.
First, the proposed decree leaves all enforcement to a single,
three-person Technical Committee ("TC"). With no looming
antitrust proceedings to put pressure on Microsoft to behave,
Microsoft will have every incentive to hinder the efforts of the TC.
Moreover, Microsoft will have substantial insights and influence
over the TC--Microsoft will appoint at least one member of the
TC (the first two members will appoint the third); the TC will be
stationed full-time on Microsoft premises; and the TC will rely for
many types of enforcement on a compliance officer hired and paid for
by Microsoft. In light of all this, it would be easy to imagine a
situation where the TC, during the entirety of its existence, never
took a single action critical of or hostile to Microsoft, no matter
what behaviors Microsoft engaged in.
Second, the enforcement authority has no power other than the
authority to investigate. The TC cannot expedite claims, assess
fines, or otherwise move quickly to redress Microsoft's illegal
behavior. If the TC finds any abuse, its only recourse will be to
the courts, through mini-retrials of United States v. Microsoft.
Moreover, under Section W.D.4.(d) of the PFJ, the TC is prohibited
from using any of its work product, findings, or recommendations in
any court proceedings. Thus, even if the TC eventually refers a
matter to the courts, the proceedings will have to start from
scratch. The history of the 1994 consent decree shows the futility
of this type of approach.
By contrast, the Litigating States" Remedial Proposal
recommends the creation of a Special Master who is empowered and
equipped to investigate Microsoft's behavior in a manner that is
prompt and resolute. The appointment of a Special Master with
defined remedial powers is essential if Microsoft's unlawful
behavior is to be curbed and competition restored to the
marketplace. Thus, the creation of a Special Master provides for a
mechanism that is much more effective in ensuring Microsoft's
compliance with the settlement decree, and does not suffer from the
defects identified above in the PFJ's TC proposal.
First, unlike the TC in the PFJ, a Special Master, as selected
by the Court, would be independent. He or she would not be dependent
on Microsoft for resources, appointment, or other needs. Second,
under the Litigating States" Remedial Proposal, the Special
Master would have the authority to identify, investigate, and
quickly resolve enforcement disputes. For example, under the
States" proposal, the Special Master would have the power and
authority to take any and all acts necessary to ensure Microsoft's
compliance. (See States" Proposed Text 18(b).) The
Special Master would have the benefit of both business and technical
experts. (See id. 18(d).) Upon receipt of a complaint, it
would be required to make an initial determination of whether an
investigation is required within fourteen days. After notifying
Microsoft and the complainant of its decision to investigate,
Microsoft would then have fourteen days to respond. After
Microsoft's response, the Special Master would be required to
schedule a hearing within twenty-one days, and fifteen days after
the hearing, would be required to file with the Court its factual
findings and a proposed order. (See id.
Unlike the enforcement mechanism in the PFJ, the creation of a
Special Master as outlined by the States would prevent disputes over
Microsoft's compliance from becoming wars of attrition that would
drain the system and guarantee Microsoft victory. The history of
this case, and of antitrust regulation in general, suggest the need
for an enforcement mechanism that can ensure the timely resolution
of any disputes and minimize any demand on judicial resources. The
enforcement provisions contained in the Litigating States"
Remedial Proposal accomplish these objectives.
V. THE CIRCUMSTANCES OF THIS CASE STRONGLY MILITATE IN FAVOR OF
GATHERING EVIDENCE AND TESTIMONY--EITHER IN A HEARING, OR
THROUGH THE USE OF THE RECORD FROM THE REMEDIAL PROCEEDING--TO
DETERMINE IF THE PFJ MEETS THE PUBLIC INTEREST TEST.
We believe, for the reasons presented above, that the PFJ fails
the Tunney Act's "public interest" test and should be
rejected. At the very least, however, there is ample basis for the
Court to conclude that a rigorous hearing is needed to air the
objections to the PFJ and resolve the doubts that the Court
hopefully has about the proposed decree. While it need not be a
lengthy proceeding, the Court may also want to consider accepting
evidence and taking testimony- or alternatively, making use of
record evidence it will receive in the upcoming proceeding
concerning the LSRP. The question of what can be learned about the
PFJ's prospects for effectiveness, since its partial implementation
began in July (and, in other respects, December), is especially
critical, and would benefit from additional fact-finding by the
Court.
A. The Complexity And Significance Of This Case--And The
Inadequacy Of The CIS--All Militate In Favor Of A Hearing On
The PFJ.
Of all the cases in which courts have reviewed proposed consent
decrees to make a public interest determination under the Tunney
Act, the case most similar to the present action is American Tel.
& Tel. Co., 552 F. Supp. at 131, aff'd sub nom Maryland v.
United States, 460 U.S. 1001 (1983), in which Judge Greene subjected
the
[[Page 29108]]
government's proposed consent decree with AT&T to intense
judicial review. In AT&T, the court recognized that the proposed
settlement not only would dispose of "what is the largest and
most complex antitrust action brought since the enactment of the
Tunney Act, but [] itself raises what may well be an unprecedented
number of public interest questions of concern to a very large
number of interested persons and organizations." American Tel.
& Tel. Co., 552 F. Supp. at 145. In light of the size and the
complexity of the case, as well as its "unfortunate
history" and the interests of third parties, the court held an
extensive hearing to address key issues raised by the consent decree
and the comments of interested parties. Id. at 147, 152. The case
for an extensive hearing on the PFJ in this proceeding is
overwhelming for similar reasons.
First, this is an extremely complicated case, to say nothing of
the profound consequences any settlement will ultimately have on the
computer and Internet industries. The economic significance of the
computer industry is unquestioned. In such an environment, expert
economic analysis is critical to help the Court not only understand
the incentives that will drive Microsoft's response to any proposed
settlement, but also assess whether the PFJ will succeed in bringing
the monopolist's unlawful behavior to an end and promoting
competition in a market that has long been restricted. Given the
complexity of this case, the Court should not approve the PFJ
without an adequate hearing to consider the many--and often
technical--objections to it that will doubtlessly be raised in
the Tunney Act submissions.
Second, in terms of the impact that any proposed settlement in
this case will have on the public, Judge Greene's depiction of the
AT&T case is, once again, more than fitting here: "[t]his
is not an ordinary antitrust case." Id. at 151. Microsoft is
one of our nation's largest corporations. It plays a central role in
one of the country's most critical and important industries, and
thus in our country's economy. Any settlement that addresses
Microsoft's illegal conduct in a manner that is consistent with the
Court of Appeals" decision and prevailing antitrust law will
have far-reaching consequences on numerous organizations, both
public and private, as well as on Microsoft, its employees,
shareholders, competitors, and most importantly, consumers. Thus, a
hearing to consider the breadth and depth of these consequences is
in order before the PFJ is approved.
Third, a hearing should be held to require the Justice
Department to answer the many questions surrounding the
PFJ--raised here, and doubtlessly elsewhere--that the
Competitive Impact Statement ignores or fails to adequately address.
Why was a new, "gerrymandered" definition of middleware
used in the PFJ--instead of the definition used by both the
trial and appellate courts, and in every other remedial proposal?
Why was a Java-related remedy omitted, when that was such a key part
of the case? Why were only some forms of retaliation, for only some
procompetitive acts, prohibited? And most importantly, why does the
PFJ not address all of the anticompetitive wrongs that were found at
trial, and upheld on appeal--including, most especially,
Microsoft's unlawful tying? These questions are not answered by the
CIS, as the Tunney Act directs and the public interest demands, and
as the Court would surely desire. A full review of these questions,
and many others, is needed by the Court before it can approve the
PFJ (if it is inclined to approve the PFJ).
Thus, in light of the specific objections from third parties
revealing the PFJ's numerous deficiencies--and the oddity of
the differing remedial proposals now before the Court--the
Court should hear oral argument and, if necessary, take additional
testimony. Giving the government an opportunity to explain the
omissions in its proposed settlement, and third parties the
opportunity to demonstrate the efficacy of the litigating
states" proposal, will afford the Court the necessary basis on
which to make its public interest determination in this important
and unprecedented case.
B. The Court Should Conduct A Proceeding--Taking Evidence
And Hearing Testimony, If Necessary.--To Determine How The
PFJ's Provisions Have Functioned Since Some Were Put In Place In
2001.
A second rationale for a hearing is to develop a factual record
concerning the point we make in Section II, supra: namely, that the
Court can assess the prospects for the likely effectiveness of the
PFJ by seeing how those provisions that have been implemented are
starting to work--or not-in practice.
Above, we have suggested that the empirical record developed in
the PC industry since Microsoft's July 11, 2001 announcement of
"greater OEM flexibility for Windows," and since
Microsoft began to implement many of the PFJ's remedial provisions
on December 16, 2001, should be examined carefully by this Court as
it determines whether the PFJ is in the "public
interest." We also express the view that these provisions
have, in fact, been ineffectual in promoting competition and are
showing no signs that they will yield change in the competitive
position of non-Microsoft middleware--and as a result, cannot
be said to be in the public interest.
At the same time--while we doubt it, seriously--we
recognize it is theoretically possible that there may be reasons why
these provisions have not yet shown signs of effectiveness, but
would be effective over time. At least, that is what Microsoft and
the Justice Department are likely to assert. If the Court is
inclined to give these assertions any credence, that is all the more
reason for the Court to conduct a proceeding--taking evidence
and hearing testimony, if necessary--to make a determination on
such claims based on empirical evidence, rather than relying upon
hypothetical contentions or abstract theories. Such a proceeding is
authorized by the Tunney Act, see 15 U.S.C. 16(f), and would
be appropriate in this instance.
Evidence and testimony from the OEMs can make clear whether they
are taking advantage of the "new flexibility" ostensibly
being provided under the PFJ--and if not, why not. Given the
OEMs" likely fears of retaliation from testifying in such a
proceeding--as reflected by their apparent (and understandable)
reluctance to testify in the remedial proceeding--the Court may
want to consider appointing a Special Master to take evidence from
the OEMs confidentially. Likewise, evidence and testimony from non-
Microsoft middleware companies can indicate how the provisions of
the PFJ, after they have been in place for several months,
are--or are not--enabling them to compete with Microsoft.
The same can be said for OS rivals to Microsoft.
The point is that while we firmly believe that the publicly
available information and reports all indicate that the PFJ's
provisions, as implemented since December 16th (and the browser-
related PFJ provisions, as implemented since July 11th), have done
little or nothing to promote competition, the Court may wish to base
such a conclusion upon a judicially developed record that would
allow both proponents and opponents to offer explanations and
evidence in support of their views. Such a proceeding could be of a
more informal nature, i.e., the Court could solicit comments from
the relevant parties and industry experts; or it could be conducted
by a Special Master, as we suggest above; or it could be a more
formal, trial-type undertaking. All of these approaches are
authorized under the Tunney Act, which grants wide discretion to the
court to adopt whatever form of proceeding it considers most
effective. See 15 U.S.C. 16, passim. But on one point, the
Act, or at least its legislative history, is rather firm:
"[T]he court must obtain the necessary information to make [a]
determination that the proposed consent decree is in the public
interest." 1974 U.S.C.C.A.N. 6535, 6538-39 (H.R. Rep.
93-1463, quoting S. Rep. 93-298, at 6-7 (1973))
(emphasis added). Some sort of proceeding to examine these questions
is justified in these circumstances, and could be helpful to the
Court in its consideration of the practical effects of the PFJ.
C. In Making Its "Public Interest" Determination,
This Court Should Take Into Account The Evidence That Will Be
Adduced In The Upcoming Remedial Proceeding.
Finally, the Court should take advantage of the Tunney Act's
broad procedural flexibility to use the record evidence that will be
amassed in the upcoming remedial proceeding as it make its
"public interest" determination in this review. The
Court's Tunney Act review of the PFJ in this proceeding can be
substantially assisted by the record developed in the forthcoming
proceeding on the LSRP. As we have argued, the Court's objectives in
both proceedings are the same--namely, to terminate Microsoft's
illegal conduct, prevent the recurrence of such conduct, and create
a market structure in which competition does not simply exist in
theory, but actually yields real alternatives to Microsoft's
products. Moreover, the Court's analysis in both proceedings is
guided by the same legal principles. See Section I, supra.
Many of the questions the Court must answer in the course of
reviewing the PFJ--e.g., What sort of anti-retaliation
provisions are needed to empower OEMs and foster real
[[Page 29109]]
competition? Must third parties be empowered to promote competition
through offering alternatives to the "Windows bundle"
for a remedy to be effective?--will be addressed, in whole or
in part, in the remedial proceeding. To the extent that these
questions can only be answered by hearing testimony from some of the
same individuals and the same sources in the remedial proceeding,
the Court's reliance on that evidence in this proceeding would
result in a more comprehensively informed review, streamline the
Court's resolution of the issues, and lead to a much more efficient
use of judicial resources.
The Tunney Act itself grants the Court wide discretion to
undertake any procedures it "may deem appropriate" in
making its public interest determination. 15 U.S.C. 16(f)(5).
This includes using evidence from another proceeding. See American
Tel. & Tel. Co., 522 F. Supp. at 136. As the court noted in
AT&T, "[i]n a Tunney Act proceeding the Court is not
limited by the rules of evidence but may take into account facts and
other considerations from many different sources." Id. at 136
n. 7 (emphasis added). In that case, the court relied on a report by
the Antitrust Subcommittee of the House Committee on the Judiciary,
which had conducted an investigation of the matter, to fill in gaps
left in the court record. Id. at 136. If a court can weigh an
evidentiary record compiled by the Congress, it surely can weigh an
evidentiary record of its own creation in a related proceeding.
The Court is currently overseeing a wide range of discovery,
both written and oral, in the remedial proceeding. Testimony will
presumably be taken from a host of witnesses that will establish,
among other things: how Microsoft deals with OEMs, including how
various Microsoft practices limit OEM flexibility in configuring the
desktop; how Microsoft has used the commingling of code, and other
forms of binding its middleware to the OS, to reinforce the
applications barrier to entry; how Microsoft has used discriminatory
and anticompetitive licensing agreements to limit the distribution
and use of rival products; how Microsoft's illegal conduct has
worked to destroy Java; how Microsoft's .Net initiative repeats the
illegal monopoly leveraging tactics it successfully used to decimate
Netscape; how Microsoft's concealment of APIs degrades the
performance of non-Microsoft products and services; and how
Microsoft has manipulated industry standards and developed
proprietary standards and formats that limit the interoperability of
competing products.
This evidence, which will be presented during the Court's
remedial hearing later this Spring, will form the basis on which the
Court crafts its remedy in the ongoing litigation. It is our view
that this evidence will affirmatively demonstrate why the LSRP, and
not the PFJ, fulfills the mandate of the Court of Appeals and
comports with well settled antitrust law. By the same token, it will
also demonstrate why the PFJ fails to redress Microsoft's illegal
behavior in a manner consistent with the public interest.
Because many of the questions the Court faces in this proceeding
mirror those in the remedial proceeding, the Court should take the
record evidence from the remedial proceeding into account in
conducting its Tunney Act review of the PFJ. Simply put, by
utilizing this evidence, the Court will adduce the information it
needs to make its "public interest" determination in a
manner that encourages greater efficiency and avoids unnecessary
delay or duplication.
CONCLUSION
The Court should refuse to find that entry of the PFJ is
"in the public interest." The PFJ does not unfetter the
market from Microsoft's dominance; it does not terminate the illegal
monopoly; it does not deny to Microsoft the fruits of its statutory
violations; and it does not end Microsoft's practices that are
likely to result in monopolization in the future.
More specifically, the PFJ does not even attempt to address, let
alone end, Microsoft's illegal binding and bundling practices that
have done so much to fortify its OS monopoly and to harm desktop
competition. And its limited provisions are so filled with loopholes
and exceptions that they are rendered ineffective.
At the very least, the Court should refuse to approve the PFJ
until after it has concluded an extensive review, including an
inquiry into whether the PFJ's provisions--as implemented by
Microsoft since last year--are showing signs of effectively
restoring competition to the marketplace. The Court could conduct an
evidentiary hearing, appoint a Special Master, and/or rely upon the
record that will be adduced in the trial on the Litigating
States" Remedial Proposal to meet its evidentiary needs.
In the end, it is the proposal of the litigating
states--not the PFJ--that meets the public interest
standard. The Court should reject the PFJ, and impose a strong,
effective and forward-looking remedy that addresses Microsoft's
proven anticompetitive conduct in a manner consistent with the
mandate of the Court of Appeals and the nation's antitrust laws.
Dated: January 28, 2002
Paul T. Cappuccio
Edward J. Weiss
AOL TIME WARNER, Inc.
75 Rockefeller Plaza
New York, New York 10019
(212) 484-8000
Randall J. Boe
Laura E. Jehl
AOL, Inc.
22000 AOL Way
Dulles, Virginia 20166
(703) 265-1000
Respectfully submitted,
Ronald A. Klain
Benjamin G. Bradshaw
Jessica Davidson Miller
O'MELVENY & MYERS LLP
555 13th Street, NW, Suite 500 West
Washington, DC 20004-1109
(202) 383-5300
ATTORNEYS FOR AOL TIME WARNER, INC.
ATTACHMENT A
Microsoft's Tying Strategies To Maintain
Monopoly Power In Its Operating System
(Civil Actions No. 98-1232 and 98-1233 CKK)
Submitted on behalf of AOL Time Warner by
Frank Mathewson and Ralph A. Winter
Charles River Associates Inc.
Suite 1501
80 Bloor Street West
Toronto, Ontario M5S 2V1
Canada
January 28, 2002
TABLE OF CONTENTS Page
I. INTRODUCTION 1
II. MICROSOFT HAS MANY TECHNIQUES AT ITS DISPOSAL FOR TYING
MIDDLEWARE TO WINDOWS 2
III. ECONOMIC ANALYSIS SHOWS THAT MICROSOFT HAS SUBSTANTIAL
INCENTIVES TO USE TYING TO SUSTAIN ITS OPERATING SYSTEM
MONOPOLY,
HARMING CONSUMERS AND COMPETITION 4
A. As a general matter, absent legal constraints, Microsoft
possesses substantial economic incentives to integrate its products
in a manner that reinforces its OS monopoly 5
(1) Microsoft ties its applications to its operating system as a
way of sustaining the applications barrier to entry 5
(2) Microsoft ties applications to its operating system as a way
of deterring direct challenges to Windows" position as the
dominant platform for software developers 7
(3) Microsoft has incentives to tie to achieve a monopoly in
complementary applications as insurance against possible future
erosion of its OS dominance 9
(4) Microsoft's operating system also has durable-goods
qualities that create further anti-competitive incentives for tying
12
(5) Microsoft's anti-competitive tying incentives are mutually
reinforcing and are manifest in strategies that lack any competitive
justification 14
B. Microsoft's anti-competitive incentives are particularly
powerful in the markets for browsers and streaming media, as well as
the adjacent markets for content-encoding, digital fights
management, e-commerce, and convergence 15
C. The theorized benefits of product integration that may exist
in some cases do not apply to the markets at issue in this case 19
(1) The economics of software markets cast doubt on Microsoft's
efficiency arguments for integration of its own browser and media
player with the OS 20
(2) Contrary to Microsoft's claims, issues of pricing and
innovation provide further evidence that Microsoft's tying harms the
marketplace and consumers 22
IV. GIVEN THE INCENTIVES, HISTORY, AND EVIDENCE IN THIS CASE,
THE CONCLUSION IS THAT MICROSOFT HAS ENGAGED, AND IS ENGAGING, IN
ANTI-COMPETITIVE TYING IN ORDER TO PROTECT AND STRENGTHEN ITS
OPERATING SYSTEM MONOPOLY 24
A. Microsoft's options, incentives, and history create a strong
presumption that Microsoft's tying harms OS competition and
consumers 24
B. The evidence indicates that Microsoft is anti-competitively
tying the browser and the media player with its operating system 25
V. CONCLUSION 28
[[Page 29110]]
VI. APPENDIX: CURRICULUM VITAE OF FRANK MATHEWSON 1
VII. APPENDIX: CURRICULUM VITAE OF RALPH WINTER 1
I INTRODUCTION
1. We have been engaged in this case as professional economists
to assess the economic incentives and effects of Microsoft's tying
practices. Our specific charge is to determine whether Microsoft is
tying middleware applications to its operating system
("OS") in a manner that protects and reinforces its
monopoly power in the market for operating systems. Middleware is
software that runs on the OS platform, i.e., that calls on the basic
operating system through application programming interfaces
("APIs") of the OS in order to invoke functions of the
OS, but which in turn contains its own published APIs that allow
higher-level applications to run on the middleware itself. To
execute our mandate, we have reviewed the economic incentives at
play in this market, conducted interviews with various software
developers, and studied the key documents in this case, including
the Proposed Final Judgment and the Competitive Impact Statement of
the U.S. Department of Justice, the submissions made on behalf of
Microsoft, and the Comments Of AOL Time Warner On The Proposed Final
Judgment.
2. Based on our analysis, we conclude that Microsoft has tied
its middleware applications to its Windows operating system in ways
that preserve and reinforce its monopoly power in the market for
operating systems on PCs, damaging competition and harming
consumers. The anti-competitive use of tying strategies to maintain
a monopoly in this manner is, in our understanding, a violation of
Section 2 of the Sherman Act. We conclude that market forces alone
do not discipline Microsoft to limit the integration of middleware
code into its OS or the bundling of middleware products with its OS
to efficiency-enhancing levels. Rather, Microsoft has the ability to
tie in ways that lack pro-competitive justification, and in any
event has incentives to use tying strategies to integrate
applications into its OS more aggressively than justified by
efficiency.
3. We begin in the next section with a brief description of the
tying strategies at Microsoft's disposal. We then demonstrate
through economic analysis that Microsoft has substantial incentives
to tie its middleware products to its monopoly OS to reinforce and
entrench that monopoly. Given these incentives, Microsoft's history,
and the evidence in this case, we conclude that Microsoft has
engaged, and is engaging, in anti-competitive tying, and is doing so
in a way that maintains its OS monopoly, to the detriment of
consumers and competition.
II. MICROSOFT HAS MANY TECHNIQUES AT ITS DISPOSAL FOR TYING
MIDDLEWARE TO WINDOWS.
4. Microsoft has various means of binding its middleware
products to the Windows operating system. Before describing these
practices and the ways in which Microsoft uses them to reinforce its
OS monopoly, we explain the general concept of middleware and why
Microsoft's licensing of middleware with its OS in the Windows
package constitutes tying.
5. Middleware is exemplified by products such as Internet
browsers, including Microsoft's Internet Explorer ("IE")
and Netscape's Navigator, media players, instant messaging, and
middleware applications platforms such as Java. By a strategy of
tying middleware to the OS, we mean any constraint that Microsoft's
operating system be bought with (or bound to) Microsoft middleware
products, or any contractual or financial inducement to this end.
Microsoft has argued that various middleware applications,
especially IE and Windows Media Player ("WMP"), are
essential components of an integrated operating system rather than
distinct products, and that tying or bundling these products with
the core operating system therefore does not constitute tying.
Microsoft's argument is incorrect.
6. Middleware products, such as browsers and media players, are
sold in separate markets. Users can obtain Navigator or RealPlayer
without purchasing an operating system in the same transaction.
Users can also obtain IE or MSN Messenger without obtaining Windows.
Until Microsoft bundled WMP into Windows, users could obtain these
two products in separate transactions. Moreover, these products are
clearly sold by different suppliers. The Court cannot give serious
weight to Microsoft's argument that once WMP, for example, is
integrated into Windows, the media player ceases to be a separate
product: If this argument were accepted, then the mere fact that
Microsoft integrates application code into the operating system
would itself be a defense for its actions. In other words, tying, as
a means of reinforcing a monopoly position, would constitute its own
defense. The law, we suggest, cannot intend this.
7. Tying involves contractual arrangements whereby Microsoft
puts pressure on original equipment manufacturers
("OEMs") or end-users to acquire Microsoft applications
as a condition of acquiring Windows. It includes requirements that
OEMs install Microsoft applications, rather than applications
developed by Microsoft's rivals, and prohibitions on removing or
uninstalling those applications. It also includes financial
inducements to adopt Microsoft applications when Windows is
purchased and installed. Each of these requirements is enforced
through Microsoft's coercive power to harm non-adhering OEMs.
8. Tying also involves designing the OS so that Microsoft's
applications are integrated into the OS code, leaving rival
applications unnecessary or even dysfunctional. This type of tying
includes: (a) basic integration of code; (b) efforts by Microsoft to
hinder disintegration; and (c) efforts to hamper the
interoperability of rival applications. Basic integration involves
providing, as part of the OS, services previously offered as
standalone applications. This could be done in a purely modular
fashion without the commingling of application code into the kernel
of the operating system. If done in this manner, the products can be
easily removed and replaced with competing products in a "plug
and play" fashion. Technological efforts that hinder
disintegration, however, have stronger anti-competitive overtones.
These include: commingling code in a manner that hampers, and
perhaps even bars, the replacement of the products or default
options; designing the OS so that Microsoft's applications are
chosen as default applications; making it difficult for OEMs or
users to replace the icons or launch sequences; and creating
utilities to "sweep" the Windows desktop and replace
non-Microsoft icons.
9. Note that some of these forms of tying, such as hampering
rivals" performance, entirely lack pro-efficiency rationales,
while all of them can be used in inefficient, anticompetitive
manners. The remainder of this paper demonstrates that Microsoft has
strong incentives to engage in such anti-competitive, inefficient
bundling, and that it is doing so in a manner detrimental to
competition with the goal of maintaining its extant monopoly in
operating systems.
III. ECONOMIC ANALYSIS SHOWS THAT MICROSOFT HAS SUBSTANTIAL
INCENTIVES TO USE TYING TO SUSTAIN ITS OPERATING SYSTEM MONOPOLY,
HARMING CONSUMERS AND COMPETITION.
10. Microsoft has maintained that its tying is efficient and
that it should be allowed to determine the level of integration of
applications into its operating system. Microsoft argues that it
should be free to tic its products together in any fashion it sees
fit, as this type of product integration is efficient and promotes
innovation with eventual consumer benefits. These arguments
generally claim to defend Microsoft's intellectual property, and are
expressed in terms of the general advantages of product integration,
rather than defining specific benefits to users from Microsoft's
practice of tying particular middleware products, such as IE or WMP,
into the Windows package.
11. Microsoft's claim amounts to the belief that market forces
alone achieve the optimal degree of product integration and
separation without any further regulatory or legal constraints. As a
matter of economic theory, this argument fails to take note of
Microsoft's position as a dominant producer in a market with
substantial barriers to entry. For this general market-forces
argument to be valid, Microsoft would need to demonstrate that
competitive vigor in the market will discipline Microsoft to engage
only in tying that enhances efficiency. But such complete reliance
on market forces to achieve efficiency, in turn, requires open
entry, while the evidence in this case has shown that there are
significant barriers to entry in the OS market. This leaves
Microsoft in a position to exploit any strategic and anti-
competitive motives to integrate. As a matter of market reality, as
we shall explain, the evidence demonstrates that Microsoft has
engaged in tying to an excessive degree, with the sole purpose of
achieving anti-competitive aims in general and OS monopoly-
preserving aims in particular.
12. With respect to the practices of tying middleware,
Microsoft's interests are not aligned with those of competition and
consumers: Microsoft can benefit without improving its product by
using tying strategies to reinforce and strengthen its existing OS
dominance.
[[Page 29111]]
A. As a general matter, absent legal constraints, Microsoft
possesses substantial economic incentives to integrate its products
in a manner that reinforces its OS monopoly.
13. Below, we set forth four theories that explain why
Microsoft's practice of integrating its applications with the
Windows OS helps to maintain its OS monopoly, in a way that is
detrimental to consumers and competition. First, tying helps to
sustain the applications barrier to entry, and thus serves to
enhance Microsoft's OS dominance. Second, tying deters direct
challenges to Windows" position as the dominant platform and
thereby maintains or enhances Microsoft's OS dominance. Third, tying
involves dynamic leveraging that permits Microsoft to achieve a
monopoly in complementary applications as insurance against any
possible erosion of the OS monopoly. Put another way, a monopolist,
such as Microsoft which produces a pair of perfectly complementary
products, aims to protect its full monopoly power by ensuring its
future monopoly in at least one of the complementary products.
Fourth, tying permits Microsoft to mitigate the competitive
constraints on its operating system monopoly provided by previous
releases of the OS. These four theories are not mutually exclusive;
each of them contributes to a full understanding of Microsoft's
anti-competitive conduct. And, to make matters worse, each of these
anti-competitive results is mutually reinforcing because of the
network effects operating between the applications sector and the
operating system market.
(1) Microsoft ties its applications to its operating system as a
way of sustaining the applications barrier to entry.
14. Microsoft has a general incentive to engage in anti-
competitive tying to protect its dominance in operating systems
against the possibility of competitive developments in applications
markets. The first means by which it accomplishes this is through
enhancing the applications barrier to entry. The dominance of the
Windows standard in a wide range of applications, or in a few
particularly important applications, makes entry into the operating
system market more difficult because an entrant has to offer both a
new operating system and a full set of applications, or somehow rely
on the chance that applications will quickly develop once the new
operating system becomes available. In this way, an entrant faces a
"chicken-and-egg" problem because of the indirect
network effects in the operating system: the entrant could not
succeed without a set of applications available to purchasers of its
operating system; yet, few software developers would invest in the
development of new applications based on an operating system without
a large market share. This is referred to as the applications
barrier to entry. The dominance of Windows as a standard for
applications leads to the applications barrier to entry and growth
in the operating system market.
15. Microsoft is able to sustain this barrier by exploiting a
collective action problem among buyers. When Microsoft ties by
supplying the OS with an application such as IE or WMP, users must
incur a series of costs to replace the application. These costs
include purchasing or downloading the substitute browser or media
player, installing the application, and incurring any uncertainty
associated with the possible compromise in the functional integrity
of the system. In an application market, buyers would collectively
be. better off if each incurred the costs of purchasing from
competing suppliers, because doing so would ensure greater
competition in the future application market. However, Microsoft's
tying practices preclude this result.
16. Buyers" purchase decisions with respect to either the
operating system or applications collectively affect the future
market structure because Microsoft will achieve dominance if most
buyers choose Microsoft products. Once Microsoft achieves dominance,
network externalities sustain this dominance so that the market
structure becomes a monopoly as a result of buyers" previous
purchase decisions. The impact of each buyer's purchase decision on
the future market structure, however, is negligible. Moreover,
buyers do not take into account the impact of their purchase
decisions on other buyers. As a result, even a small disadvantage to
purchasing a competing product in the operating system or
applications markets is enough to make the individual buyer prefer
Microsoft's product. The result is that buyers" decisions make
them collectively worse off. The future dominance of Microsoft and
the higher prices faced by buyers are a result of their collective
decision to purchase Microsoft's applications. Microsoft exploits
this collective action problem and pursues dominance in the
applications markets through its tying practices.
(2) Microsoft ties applications to its operating system as a way
of deterring direct challenges to Windows "position as the
dominant platform for software developers.
17. Microsoft's incentives for anti-competitive tying are
particularly strong in the case of applications that might allow for
the development of direct substitutes to the monopolized operating
system. A clear incentive for Microsoft to tie its IE browser with
Windows has been the threat that Netscape, either individually or
combined with Java software, could eliminate Microsoft's network
advantages in the operating system, by providing middleware (which
serves potentially as universal translation support between any
application and any operating system) that would provide a competing
platform for software developers. This was a particular threat to
Microsoft's dominance in operating systems because it potentially
represented a platform/programming environment in which software
applications could be developed without regard to the underlying
operating system. Middleware provides a layer of software between
applications and the operating system and can accommodate a new
operating system with a change in a single set of code. Without
middleware, the success of a new operating system would depend on
the development of new code by every application developer. This
incentive also explains Microsoft's initiatives to develop a
Microsoft version of Java in an attempt to undermine the universal-
translator aspect of Java.
18. Some economists have argued that the backwards compatibility
of Microsoft's version of Java, i.e., the ability of all general
Java applications to run on Microsoft's version, rules out the
hypothesis that Microsoft designed its version of Java for the
purpose of stifling the potential threat to its dominance in
operating systems. This argument is wrong in its static assumption
about compatibility. Given the history of the industry, the fact
that Microsoft's initial version of Java was universally compatible
with Java applications does not lead one to believe that if
Microsoft dominated not just browsers but also Java in the future,
it would continue to assure both compatibility of applications and
free distribution of the pair of middleware products. Were Microsoft
to establish dominance in the potential browser-Java bypass of its
operating system dominance, why would it allow the bypass to be
freely and effectively available? The concerns expressed by
Microsoft's executives about the risks of
"commoditization" of the operating system are well
known.
19. Middleware generally has the potential to act to varying
degrees as a universal translator between an operating system and
specific applications, because (as the name suggests) middleware
intermediates between the operating system and applications: it
invokes calls through an operating system's APIs and in turn issues
its own APIs to applications. To accommodate a new operating system,
instead of each application requiring re-coding for compatibility,
only the "bottom half" of the middleware application
must be reprogrammed. If twenty applications run on top of a
particular middleware program, for example, compatibility with a new
operating system could be achieved by reprogramming the middleware
program instead of reprogramming each application. Middleware thus
mitigates the indirect network effects of the operating
system--and could potentially diminish the dominance of any
operating system that these network effects support.
(3) Microsoft has incentives to tie to achieve a monopoly, in
complementary applications as insurance against possible future
erosion of its OS dominance.
20. A common response to the argument that monopolies can profit
through leveraging into a second market is that monopoly profits can
be collected only once: a tie into a complementary market with an
increase in the price of the tied good by a dollar will reduce the
demand price of the first good by a dollar. According to this
response, there is no incentive to leverage. In the simplest, static
world in which there are no industry dynamics, no uncertainty, and
no variation in consumer demand, this "one-monopoly
theory" is correct. This theory, however, fails when there is
uncertainty about the preservation of monopoly. If the initial
monopoly is at some risk, then an incentive for leverage arises as
insurance against the loss of monopoly profits. In the event that
the first monopoly fails and the second succeeds, the monopolist
will have preserved a monopoly in at least one of the
[[Page 29112]]
markets. Consistent with the common response, having a monopoly in
only one of the pair of markets is sufficient to collect the full
monopoly profits. If either market's monopoly is uncertain, the
monopolist has an incentive to create monopolies in both markets,
and thus increase the likelihood of being able to obtain monopoly
profits in at least one market.
21. If Microsoft fears for the longevity of its operating system
monopoly, or believes that operating systems are in a mature market
with limited prospects for growth, it will have strong incentives to
make minor sacrifices to Windows functionality in order to obtain
dominance in high-growth markets. This is particularly true if the
sacrifices (such as damaging relationships with OEMs and consumers
by forcing them to accept an inferior browser or media player) have
negligible effects on demand for Windows.
22. The greater the threat to its OS dominance in the future,
the more incentive Microsoft has to establish a dominant supplier
position in an application market, such as the browser or media
player market. To take a hypothetical future contingency, if the
development of middleware means that the future OS market turns out
to be more competitive than the current market, then Microsoft's
actions to achieve dominance in the application market will leave it
with dominance in one product of a pair of complementary products,
rather than dominance in neither. Microsoft's incentive to establish
dominance in key applications is thus strengthened by the fact that
Microsoft's monopoly in the operating system market is not
guaranteed to always be airtight
23. The gains from leveraging are especially strong where
network effects are present in applications markets or these markets
otherwise promise large potential growth in revenues for any firm
that establishes early dominance. Network effects have three
implications that make Microsoft's tying practices particularly
effective in reinforcing its OS dominance. First, in the early
stages of the market's development, purchasers will be on alert for
signals of which standard will eventually become dominant, in order
to reduce their exposure to later costs of converting to the
dominant standard. Tying a new application with the dominant Windows
operating system will send strong signals to purchasers that will
help to "tip" the market toward Microsoft's favored
products, particularly given Microsoft's history. Second, a feedback
loop will cause both the tying and Microsoft's dominance to steadily
accelerate. As Microsoft begins to gain a substantial share in an
application market, it will be able to engage in more overt forms of
tying, as customers grow to accept even inconvenient results from
Microsoft's anticompetitive behaviors (such as poor interoperability
with rivals) because of the reinforcing network effects.
This, in turn, will accelerate the tipping toward Microsoft
dominance. Third, once Microsoft's dominance is established,
proprietary standards and continued tying will lock in this
dominance, not just on current production but on future applications
in the same functional space. While all of these effects promote
Microsoft's dominance in applications, it is the feedback effect of
this control over applications to reinforce the OS dominance that is
relevant for the matter at hand.
24. It may appear that any preservation-of-monopoly theory must
be applied narrowly to Microsoft's monopoly power in operating
systems. If this were the case, then the insurance theory of tying
just described would not apply, since this theory explains why tying
to establish dominance in a new market can be profitable because of
the profits that can be captured in that new market, instead of why
it is profitable to protect the monopoly in the operating systems
market.
25. The standard "one-monopoly" theory, however,
tells us that when there are two perfectly complementary products A
and B, a monopoly over either, or a monopoly on both, allows the
identical profits and results in the identical effects. (This theory
holds in a static framework that sets aside the other three theories
that we discuss.) With respect to an OS with a set of applications
that are virtually universally adopted by all PC users, a monopoly
over the OS alone is identical in its effect and in its incentives
to a monopoly over the set of applications alone or a monopoly over
both the OS and the set of applications. That is, there is only one
monopoly: the economic role of tying under the monopoly-insurance
theory is not creating a new monopoly, but rather preserving the
monopoly (the monopoly being at least one monopoly position in the
OS-applications pair). The monopoly-insurance theory thus explains
the anti-competitive use of tying to preserve a monopoly in
violation of Section 2 of the Sherman Act.
26. The monopoly-insurance theory of tying has the effect of
reinforcing Microsoft's monopoly position even if the preservation-
of-monopoly requirement of Section 2 of the Sherman Act is construed
narrowly to apply only to Microsoft's existing monopoly on operating
systems for PCs.
The reason (discussed below) is that all of Microsoft's
incentives for tying applications to Windows are mutually
reinforcing. Even if Microsoft's incentive for tying were primarily
to insure a monopoly in the event that the Windows OS monopoly
failed in the future (the insurance theory), one effect of the tying
is to reduce the chance that the Windows OS monopoly actually does
fail, because of the strengthening of the applications barrier to
entry. The impact is preservation, though imperfect, of Microsoft's
monopoly in the operating system market.
(4) Microsoft's operating system also has durable-goods
qualities that create further anti-competitive incentives for tying.
27. Part of Microsoft's argument that it should be free to
"innovate" rests on the notion that an important source
of "competition" in selling new versions of Windows is
the existing stock of old versions of Windows. While it is true that
the durable-goods aspect of the OS market (i.e., the ability of
consumers to retain their existing versions of the OS instead of
buying a new version) disciplines Microsoft, it only does so in the
sense that Microsoft earns fewer profits than it would in a
hypothetical world in which it were to lease its OS. The claim that
the OS market is, in fact, more competitive than this hypothetical
market does not weaken the claim that Microsoft's position in the OS
market is dominant and that its activities are illegal.
28. Moreover, this "durable good monopolist" feature
of the market contains an incentive for Microsoft to engage in
illegal bundling. The strategy of leasing as a means of escaping the
durable monopolist's dilemma is well established and has been
thoroughly analyzed by economists. Rather than selling the product
into the market in each period, if the monopolist seller of a
durable good can lease the product on a period-by-period basis, it
can retain complete control over the supply of the good into the
market in each period. This allows the monopolist to set monopoly
prices in each period instead of being constrained by the
consumers" option to continue using the already-purchased
stock (or version) of the product. The monopolist who leases for a
period can lease both previous and current production together to
achieve monopoly profits; doing so eliminates the competitive
discipline that would otherwise occur as past sales re-enter current
and future markets. If Microsoft could move to a business plan of
leasing rather than selling software, it would completely eliminate
competition from old versions of the software: as Microsoft leases
new versions of software, it could retire leases on old versions.
This would serve to protect the monopoly power that Microsoft
enjoys from its OS. Tying can allow Microsoft to implement this
leasing strategy so as to avoid the durable good discipline.
Specifically, tying the use of the OS to some complementary
transaction that can be leased, or priced on a per-use
basis--rather than sold--provides Microsoft with the
opportunity to collect a revenue stream that is immune to the
competitive discipline imposed by previous versions of the OS.
29. The escape from the durable monopolist's dilemma via leasing
thus creates another incentive for tying. Tying allows Microsoft to
move closer to the leasing outcome by facilitating the collection of
transaction fees based on current usage. The set of middleware
products that potentially puts Microsoft in the position of
collecting a fee on Internet transactions serves this role. These
products are IE, WMP, Microsoft's Digital Rights Management
("DRM") software, as well as the .Net My Services
initiative. The Digital Rights Management software, with WMP, will
initially support a market for music and video products. The
combination of these middleware applications, enabling the Microsoft
e-commerce network, will then support the transition to Internet
sales transactions of a broad variety of products. As Microsoft
begins to shift its revenue structure from Windows sales to Internet
transaction fees, it will seek to control the key Internet access
choke points such as browsers, media players, and digital rights
management. Tying facilitates this control. Moreover, Microsoft can
directly charge usage fees for its media player software that it
cannot
[[Page 29113]]
charge for the OS. While the durable-goods monopoly theory of
Microsoft's tying incentives can be seen most directly as a theory
of the incentive to dominate applications that facilitate a leasing
business plan, one important impact of dominating these applications
is to preserve Microsoft's dominance in the market for operating
systems. The impact, in other words, is a preservation of
Microsoft's OS monopoly.
30. As an empirical matter, versions of Windows are converging
in their substitutability. This convergence of versions strengthens
the durable-good monopolist incentive to tie in two ways. First, it
increases Microsoft's incentive to escape the durable-good
monopolist discipline on prices, since the easier it is to
substitute the current version of Windows with existing versions,
the stronger this discipline is. Second, there are, in principle,
two ways of leasing to escape the durable-good monopoly discipline.
Microsoft could rent the OS or tie it to an application and collect
the corresponding stream of revenues each time the application is
used. The converging substitutability of Windows" versions
renders the former more difficult, increasing the incentive to
escape the durable-good discipline by tying applications. Thus, the
increasing substitutability among sequential versions of Windows,
even if later versions are superior, reinforces Microsoft's
incentives to extend its monopoly to dimensions, such as Internet
sales, in which it can charge a vig or rent the application.
(5) Microsoft's anti-competitive tying incentives are mutually
reinforcing and are manifest in strategies that lack any competitive
justification.
31. The incentives for anti-competitive tying that we discuss
are mutually reinforcing because of the network effects operating
between the applications sector and the operating system market.
Achieving dominance in applications (through tying) strengthens the
dominance of the OS, because buyers in the OS market are more
assured of available applications; the greater dominance in the OS
market in turn feeds back into greater dominance in applications,
since the tying strategies take the form of imposing an artificial
advantage relative to applications of the dominant OS supplier. The
greater Microsoft's share across all applications markets, the
greater the applications barrier to entry. Greater shares in
applications markets create a feedback effect of even greater
dominance in the OS market. The source of this feedback effect is an
"indirect network effect": the greater the penetration
of any operating system, the more applications will be written to
it, and consequently, the more valuable the operating system will be
to any user. Since the OS monopoly is not perfect, Microsoft will
therefore take advantage of anti-competitive opportunities to
generally strengthen the applications barrier to entry. As a general
principle, therefore, any extension of Microsoft's monopoly to a set
of important applications reinforces its monopoly in operating
systems.
32. Microsoft has a clear incentive to engage in tying in the
form of hampering rival applications and coding its own applications
to be defaults to the detriment of consumer choice. This type of
tying has a negligible negative effect on the demand for Windows,
and by tipping high-growth markets, could provide Microsoft with
long-term profits.
33. Given that the Windows source code is both complex and
proprietary, Microsoft can engage in this type of tying
surreptitiously. For example, Microsoft can alter the algorithms
that set "favorites" in folders and task bars so that
Microsoft-preferred applications and web sites are used more
frequently. In addition, Microsoft can cause subtle performance
problems for rival applications in Windows environments. This type
of tying, however, is consistent only with anti-competitive
behavior-no efficiency benefits result from harming rivals or
setting Microsoft options as defaults.
B. Microsoft's anti-competitive incentives are particularly
powerful in the markets for browsers and streaming media, as well as
the adjacent markets for content-encoding, digital rights
management, e-commerce, and convergence.
34. In markets with network effects and perceived similarity in
product functions, directional changes in market shares can
"tip" the market toward a dominant outcome because
consumer expectations as to which format will dominate are self-
realizing. In other words, the expectation on the part of consumers
that a particular format will dominate leads each consumer to choose
that format because of the rational concern that other formats will
not be supported--accelerating the dominance and confirming the
expectations of consumers. Consider the browser and the media player
as examples.
35. In the browser market, Microsoft has achieved the dominance
that it sought, and its monopoly power in the OS continues. These
are related: browser dominance reinforces OS monopoly power. The
connection is that browser dominance increases the applications
barrier to entry and simultaneously removes the direct middleware
threat posed by Netscape.
Both of these effects in turn serve to increase the demand for
the Windows OS through network effects as buyers anticipate
continued dominance of Microsoft formats in both the operating
system and applications markets; the two effects thus reinforce the
dominance of Windows OS.
36. Now that Microsoft has effectively achieved dominance in
browsers, and through this reinforced its dominance in operating
systems, the stage is set for applying the same tactics to markets
for other applications. The media player market represents an
important current market in which Microsoft's anti-competitive
strategies are at play. In the media player market, Microsoft's
first incentive for tying is to protect its dominance in the market
for operating systems by deterring the development of new middleware
platforms. Streaming media players will be essential for Internet
browsing in the future because of their ability to enhance Internet
content rendering under bandwidth constraints. If Microsoft achieves
dominance in the media player market (and as noted above, the
"tipping point" argument suggests that a trend to
dominance can quickly translate into a highly dominant market
share), any entrant into the operating system market would also have
to provide a media player compatible with the WMP format.
37. For this reason, the applications barrier to entry incentive
is especially powerful for streaming media players. Rival operating
systems will be unable to provide a functional (i.e., Windows Media
Audio-compatible) media player since the Windows Media Audio format
is proprietary and Microsoft refuses to universally license it.
Because compatibility with streaming media is vital to future
operating systems, Microsoft's dominance over operating systems will
be ensured. The observation that Microsoft licenses the software for
playing downloaded media, but not the software for streaming media,
suggests that Microsoft is strategically aware of the profit-
enhancing power of retaining exclusive property rights on media
streaming software.
38. To elaborate: with respect to other applications, an entrant
into the OS market could--at least in theory--provide an
OS plus a set of applications. However, even this potential entry
strategy is not available in the case of the media player
application, because the use of a media player by a user depends not
just on products that could be provided by the new entrant, but on
the proprietary formats chosen by Internet sites using media player
software. In this sense, the provider selection of Microsoft's
proprietary format creates a content-encoding barrier to entry for
streaming media players. Again, this reinforces Microsoft's monopoly
power over the OS market.
39. An additional anti-competitive incentive for dominating an
application market is to secure a monopoly position in at least one
product in the application/OS pair in order to achieve monopoly
profits even in the event that the OS dominance is not sustained.
This is discussed above in Section III.A.3. The possibility that the
OS dominance is not sustained means that the joint monopolist could
not necessarily collect the maximum profits through the OS price
alone.
Dominance of the application market would secure, or at least
increase the likelihood of, monopoly profits.
40. This incentive is particularly relevant to streaming media
markets. For example, the OS dominance could be at risk as consumers
move to handheld devices for computing and accessing the Internet
that do not require Windows OS. Presumably, however, these customers
will still wish to play music and see videos on such devices. To the
extent that WMP and its accompanying format achieve dominance for
streaming media, Microsoft will maintain monopoly power in the pair
of products consisting of the OS plus the media player. (Recall that
the essential measure of monopoly in the markets for a pair of
complementary products is dominance in at least one of the
products.) Thus, streaming media players and formats hold the
potential for Microsoft to maintain its original monopoly.
41. Additionally, significant gain accrues to Microsoft if its
DRM technology dominates the related market for audio and video
files.
[[Page 29114]]
Using encryption technology, DRM technology permits only users with
licenses to play the packaged file. The license has a key to unlock
the encryption.
Should a user without a license attempt to play the file, the
application initializes with an application that permits the user to
acquire the license. Applications with DRM technology and Windows
Media Device Manager enable the use of WMP on devices other than
conventional desktop computers. Since market participants will tend
to limit their investments to the likely dominant standard,
Microsoft can easily become the sole provider of DRM solutions.
Moreover, this will be a critical market for Microsoft, since users
will require licenses for downloading, and content providers require
certificates for encryption. The alternatives of mutual
interoperability or even open standards are equally plausible
conceptually, but not in Microsoft's interests.
Microsoft thus has incentives to use tying to ensure that its
DRM solution remains proprietary and becomes dominant. Microsoft can
ensure this outcome by making its media player format the format of
choice for both users and content providers, and tying WMP to
Windows ensures this choice. Once again, this creates a content-
encoding barrier to entry that permits Microsoft to maintain its
monopoly power in the pair: OS plus WMP as an application.
42. Because of the durable-goods nature of Microsoft's OS
monopoly, as described in Section III.A.4 above, Microsoft has
additional incentives to tie streaming media technologies to the OS.
Indeed, the greatest value for locking in the dominant streaming
media and DRM formats may be the vig that Microsoft hopes to collect
from Internet transactions.
43. Dominating the media player format so as to collect a vig on
transactions would position Microsoft to collect transactions
revenue that may well exceed revenues available from Windows
software licenses alone--even if Microsoft's dominance of the
OS market is secure. As we discussed in Section III.A.4, monopolists
of durable goods recognize that past sales constitute future
competition (here, older versions of Windows compete with current
and future versions of Windows). The monopolists face a competitive
constraint against increasing prices even in the absence of any
significant rivals. Such monopolies naturally seek ways to
circumvent the constraint. In the case of Windows, the constraint is
potentially circumvented by the collection of the vig on
transactions.
44. What is the link between dominance in operating systems,
streaming media, digital rights management, e-commerce, and
convergence? Microsoft will attempt to use its dominance in any of
these markets to increase the use of Microsoft-favored products in
all of these markets. In contrast to the potential situation where
different players are strong in each market, Microsoft will leverage
its dominance in any market to strengthen its position in all of
them. Microsoft's incentive to do this lies in the many revenue
streams that it currently forgoes. For example, Microsoft does not
currently charge web sites for the use of Windows media formats. If
Microsoft establishes dominance in the media player market, as it
translates to dominance in e-commerce hosting, Microsoft will no
longer have any constraint on fully exploiting this revenue stream.
Once again, this links back to the original dominance in Microsoft's
OS. All of these applications are mutually reinforcing and serve to
preserve the monopoly power that accrues from packaging Microsoft's
OS with complementary applications.
C. The theorized benefits of product integration that may exist
in some cases do not apply to the markets at issue in this case.
45. As a theoretical matter, of course, in many transactions,
purchasers would prefer to buy bundles of products and services.
Purchasers of glass prefer to have borates included, drivers prefer
to have steering wheels with their cars, and purchasers of shoes
typically prefer to have laces included. The relevant question here
is whether computer applications are similar to those
examples--i.e., whether browsers and other middleware such as
streaming media players are "mere inputs" into the
overall "Windows experience."
(1) The economics of software markets cast doubt on Microsoft's
efficiency arguments for integration of its own browser and media
player with the OS.
46. As discussed above, many forms of tying have no efficiency
justification. Contractual provisions limiting the acceptance of
rival technologies, or efforts to redesign code to harm
rivals" performance, create economic loss. As further
discussed above, Microsoft has these forms of tying at its disposal,
incentives to use them, and a historical record of using them.
47. Microsoft's claims regarding the efficiencies of its
contractual tying- i.e., that it reduces consumer time costs and
confusion to have a set of default options provided with a personal
computer "out of the box"--confuse the benefit to
consumers of having a browser and its media player bundled along
with the OS, with the benefit of having Microsoft's choice of
applications bundled with the OS. The efficiencies that come with
providing an integrated package of an OS and various applications
are not specific to Microsoft's applications. In a market where OEMs
were free to offer whichever packages of software consumers desired
(e.g., Microsoft Windows with RealPlayer and IE, or Microsoft
Windows with WMP and Netscape), the market would provide those
varieties of packages preferred by consumers. The market would
respond fully to the efficiencies associated with the purchase of a
full package of hardware, OS, and software applications, and in
addition, the market would be free to offer the variety that
consumers demanded.
48. Our analysis supports the hypothesis that Microsoft's tying
of IE and WMP and its efforts to gain DRM dominance are not driven
by efficiency concerns. Although selection of some defaults is
necessary on each PC, there appear to be no engineering efficiencies
to the integration of the choice of default into the OS. To the
contrary, choice and market competition (and consequently,
efficiency) suffer when knowledgeable OEMs (who act as informed
agents of consumers) face artificial barriers to playing that role,
such as when Microsoft commingles code or makes Microsoft
applications difficult to permanently remove as default settings. By
designing system software to hamper the installation or operation of
rival software suppliers, Microsoft reinforces the applications
barrier to entry; the impact is a strategic reduction in competition
and a reinforcement of Microsoft's OS monopoly.
49. Additionally, the usual arguments made to justify
integration in other markets are largely inapplicable to software
application markets. It is often argued that integration occurs (i)
to reduce transaction, distribution or production costs, or (ii) to
increase the value of the final product.
50. The argument that transaction and assembly costs justify
integration does not apply to major software applications. For
example, consumers want to purchase some integrated packages of
complementary products such as functioning automobiles because
separate purchases of steering wheels, engines, dashboards, seats,
etc. would impose enormous transaction and assembly costs.
By contrast, software markets allow assembly at low cost even
without integration, provided that monopolists are legally
prohibited from impairing interoperability. With OEMs acting as
purchasing and assembly agents for end-users, it is no more
efficient for Microsoft to create OS-and-application bundles than
for multiple OEMs (or third-parties who can then license such
bundles to OEMs) to create those OS-and-application bundles desired
by end-users.
51. Forced integration of particular software brands does not
increase value. Instead, it causes an efficiency cost to the extent
that end-users value the product variety entailed in the variety of
inputs. The value of variety is lost with integration. Steering
wheels in cars are typically undifferentiated commodities that
comprise a trivial portion of the value of the final product.
Thus, even though a consumer could replace the steering wheel
with limited effort, there is little reason to do so because a
different steering wheel is unlikely to improve the performance of
the overall product. By contrast, technological development in
software applications markets means that different applications can
differ substantially in what they deliver to consumers. Loss of
product variety as a result of integration can be costly.
(2) Contrary to Microsoft's claims, issues of pricing and
innovation provide further evidence that Microsoft's tying harms the
marketplace and consumers.
52. Microsoft has argued that the extension of monopoly power
across a set of complementary products may produce consumer benefits
if the monopolist charges lower prices than would be charged if
independent monopolists were to separately produce two or more
complementary products. In the latter case, each independent
monopolist would raise prices higher than the level that would
maximize the combined profits of all the monopolists. Thus,
[[Page 29115]]
according to this theory, consumers benefit from Microsoft's
monopoly leveraging through lower prices.
53. This theory imagines a static world in which innovation and
entry are non-existent, and firms simply set prices to maximize
profits, given unchanging demand and unchanging technology. The
practical implications of the theory for the real world of rapidly
changing technology and potential dynamic competition (as opposed to
monopoly positions that are airtight) are minimal.
In an economic theory that incorporates industry dynamics,
strategies taken by a dominant firm to eliminate a firm in a
complementary market remove a potential rival or entrant in the
primary market. In the reality of software markets, this anti-
competitive effect clearly overwhelms any theoretical, static price
effect: innovation and dynamic competition thus are, and should be,
the focus of the Microsoft case. The driver of consumer benefit in
these markets is innovation: over the past ten years, while prices
of applications have fluctuated only moderately, the performance of
applications has grown dramatically. New applications, such as
browsers and media players, have become important sources of
consumer benefit, while improvements in existing applications such
as financial software have yielded strong consumer benefits. In any
analysis on the impact of tying, the most important question is the
impact on innovation, not price. Tying harms innovation by
preserving Microsoft's monopoly position, protecting it against
dynamic competition to the detriment of consumers.
54. Microsoft argues that a single monopolist over two products
has greater incentives to innovate than two separate monopolists. If
two complementary products are monopolized separately, the argument
goes, each monopolist ignores the positive benefits that accrue to
the other firm from an increase in its own pace of innovation. In
the matter at hand, this theoretical efficiency would argue that if
Microsoft had a monopoly in operating systems, while Novell had a
monopoly in browsers, Novell would not innovate as much as possible
because it would not take into consideration the positive effects of
browser innovation on operating system demand.
This reasoning also suggests that innovation in the industry
would be enhanced if Microsoft's OS dominance were to be extended
further into still more applications markets. The key point missed
in this theory is that any extension of Microsoft's OS monopoly
power would dampen innovation into substitutes for Microsoft's OS.
Enhancing the applications barriers only reduces the incentive for
any firm to engage in OS or applications innovation. If an
application could be open to competition--i.e., if it could be
characterized by some rivalry or competition, as an alternative to
Microsoft's integration--then unrestrained competition would
strengthen rather than weaken innovation. While Microsoft's
dominance in the browser market today may be a fait accompli,
untying the OS and media player will lead to such greater
competition in media player innovation.
55. Significantly for this case, untying would also increase
competition in the operating system market. As discussed earlier in
Section III.A, tying protects Microsoft's operating system dominance
by maintaining the applications barrier to entry and weakening or
deterring direct platform challenges. If there are separate
monopolists in adjacent markets, each will have the incentive to
enter or sponsor entry into the other's market, leading to
competitive pressure in both markets.
A. Microsoft's options, incentives, and history, create a strong
presumption that Microsoft's Wing harms OS competition and
consumers.
56. The District Court's Findings of Fact confirm that it is
Microsoft's "corporate practice to pressure other firms to
halt software development that either shows the potential to weaken
Microsoft's applications barrier to entry or competes directly with
Microsoft's most cherished software products." As a historical
matter, Microsoft has clearly engaged in anti-competitive,
inefficient tying with other applications. For example, Microsoft
has forbidden OEMs from changing system defaults so as to make non-
Microsoft products the "default application" in
"out of the box" packages. While Microsoft allows the
"installation icons" of competing applications to be
installed on desktops "out of the box," installation
icons disappear if they are not invoked. In an even more subtle form
of contractual tying, Microsoft requires applications that run with
Windows to obtain a certification from Microsoft. This permits
Microsoft to monitor and perhaps discipline its applications rivals.
While some of these practices differ in form from strict tying (a
certification requirement for software is not the same as a
contractual requirement that OEMs use Microsoft products), the
effect is similar in that Microsoft is signaling to all other market
participants that applications may only run with Windows by
Microsoft's permission.
57. Microsoft's profit incentives dictate that Microsoft would
tie its products together much more aggressively than efficiency
alone would suggest. With regard to the question of the nature of
competition in the media player market, one of the current objects
of Microsoft's tying, and, in particular its tying of WMP, is clear:
as the District Court determined, the "multimedia stream
[represents] strategic grounds that Microsoft [needs] to
capture." That--and not efficiency--is the driving
force behind Microsoft's conduct.
B. The evidence indicates that Microsoft is anti-competitively
Wing the browser and the media player with its operating system.
58. In the absence of tying, Microsoft would provide an
operating system and applications such as the browser and media
player that were developed and offered in a modular, plug-
replaceable fashion. The applications codes for the browser and the
media player would not be commingled with the OS code, but would
instead communicate with the OS through a set of well defined APIs.
Publishing the APIs and interface protocols in this non-tying world
would enhance the value of Microsoft's operating system by
encouraging competition in the innovation of the complementary
good--the browser and the media player. Greater competition and
functional value in the market for a complementary good always
benefit a firm by increasing the demand for its product. In the
absence of anti-competitive incentives to reinforce barriers to
entry, this strategy would maximize the profits that Microsoft
obtains from its operating system. The fact that Microsoft does not
engage in such a business strategy demonstrates, in the absence of
evidence that tying is efficient, that Microsoft is motivated by
anti-competitive incentives.
59. Microsoft openly engages in contractual tying and basic
technological integration. By developing and marketing Windows XP as
an integrated package of operating system and popular applications,
Microsoft directly ignored the findings of fact and law by U.S.
courts.Microsoft's history makes it likely that Microsoft is also
engaging in various forms of OEM coercion to raise
rivals"distribution costs and encourage the distribution of
its own middleware products. Consistent with our analysis, this
tying generally serves the purpose of Microsoft profitability and
reinforcement of its OS dominance, rather than consumer benefit.
Microsoft directly engages in anti-competitive tying when it
prevents OEMs and end-users from removing or uninstalling IE and
WMP. Microsoft does this through code commingling between the media
player and the operating system that renders substitution for WMP
difficult, or even impossible.
60. Another example of anti-competitive tying is that Microsoft
renders its own DRM technology software non-interoperable with other
media players because of DRM's interaction with Window XP's own
"secure audio path" software. While this is not tying in
the sense of designing the operating system to be incompatible with
rival applications, it does involve designing an
application--DRM--that limits the compatibility of rival
applications in a closely related market, the market for media
players.
61. More generally, Microsoft anti-competitively undermines the
functionality and utility of rival streaming media players and
formats. For example, Microsoft denies a license for playing files
streamed in Windows content encoding formats to its principal
competitor, RealNetworks, thereby reducing the utility to consumers
of RealNetworks" products. Microsoft also disadvantages rival
content-encoding formats by designing WMP to record only in Windows
media formats. These actions have, in the past, served to reduce
consumers" perceptions of rivals" performance--for
example by deliberately making consumers" use of Netscape
"a jolting experience" or damaging MP3 quality and
functionality.
62. In general, OEMs perform a screening function, as agents of
consumers, by ensuring that the software products provided out of
the box are compatible with each other and with the operating
system. Consumers are aware that OEMs perform this function.
Consumers are also aware that OEMs" reputations are based
partly on packaging
[[Page 29116]]
high-quality software products, so that OEMs have the incentive to
choose the best software products for the price. Consumers are in
general not aware of the contractual restrictions imposed in various
contractual arrangements that might explain the choice of media
player, including, for example, any threat not to license the
Windows OS to the OEM unless all Windows applications are included
as defaults. Nor are consumers aware of any financial incentives
offered to OEMs by Microsoft to include only Microsoft applications
as default options. Contractual tying alone will thus cause
consumers to infer, for reasons unrelated to merit, that
Microsoft's applications are the optimal products for them.
63. As suggested above, the interaction of all these effects,
combined with rational expectations, can easily lead to the rapid
foreclosure of competition. The force of self-realizing expectations
is especially strong when one firm or one format is a natural focal
point for consumer expectations. In markets where any number of
formats could be sustained as dominant because of self-realizing
expectations (economists term this "the multiplicity of
rational expectations equilibria"), a focal point property of
any one equilibrium can be important in predicting which equilibrium
will be sustained. There could hardly be a stronger focal point than
the Microsoft/Windows format for predicting the likely dominant (and
perhaps sole) format. The history of the PC software industry is one
of the dominance of Microsoft standards. The prediction that the
Microsoft standard will predominate in the media player market is
natural, perhaps inescapable, for a consumer--uninformed about
the media player market specifically--debating about which
format to adopt. While it is arguable that strong network effects
might yield dominance by a single firm in a good or service and its
complements, it is uncertain whether a monopoly outcome is
inevitable absent tying. In this context, tying assures OS dominance
and is therefore anti-competitive.
64. Thus, Microsoft's coercion of OEMs to select WMP for the
"out-of-the-box" experience, and to obscure the
differences in capabilities between WMP and rival products, could
weaken consumer awareness of the various functionalities available
in the open market. This would increase expectations of a single
dominant format, which in turn would accelerate that dominance. The
dominance in the media player market, to emphasize the applications-
OS interaction once more, reinforces Microsoft's dominance in
operating systems. V. CONCLUSION
65. We show in this report that Microsoft has substantial
incentives to engage in anticompetitive tying of its middleware
products with Windows. It has incentives to use contractual
inducements to OEMs to bundle Windows with its own middleware
instead of rival products; commingle applications code into the
kernel of the operating system; and hamper the interoperability of
rival applications. We also show that Microsoft's tying--in all
of its forms--reinforces Microsoft's monopoly in operating
systems.
66. Microsoft's incentives to anti-competitively bundle fall
into four mutually reinforcing categories. First, by tying its
middleware applications to the Windows operating system, Microsoft
can strengthen the applications barrier to entry against its OS
competitors. This reinforces Microsoft's OS monopoly. In order for
entrants in the operating system market to succeed, they must have a
wide variety of applications available for consumers to purchase.
But software developers will invest in the creation of new
applications only for operating systems that have widespread
distribution. If Microsoft attains dominance with both the operating
system and key middleware applications, it can ensure that its OS
rivals will be unable to meet consumer demands for the most popular
applications. With a dominant position in applications markets,
Microsoft may choose not to write those applications to interoperate
with rival operating systems, thus enhancing the already significant
applications barrier to entry.
67. Second, tying reinforces Microsoft's OS monopoly by
deterring direct challenges to the OS position as the platform of
choice for software developers. Since programmers can write calls to
middleware products, Microsoft's dominance in these products reduces
the possibility that a universal translator (middleware) between
operating systems and applications would threaten the Windows
monopoly. Just as with the browser, Microsoft weakens this
competitive threat to operating systems by integrating the potential
substitutes directly into the OS.
68. Third, tying can provide a method of dynamic leveraging to
ensure a future monopoly. This involves a direct counterargument to
the familiar "one-monopoly theory," which states that a
monopolist cannot collect more profits through a monopoly on a pair
of complementary products (an operating system and an application)
than through a monopoly on either product alone. Where the future
entry into each product is uncertain, establishing a monopoly on
both products in the pair increases the chance that the monopolist
will retain a monopoly on at least one product in the future and
therefore is positioned to collect full monopoly profits. In our
context, the fact that the Windows monopoly over operating systems
is not airtight creates an incentive for Microsoft to leverage its
dominance so as to increase the likelihood of future dominance in at
least one class of products--the operating system or
applications. Dominance in applications provides (partial) insurance
against the loss of monopoly power in operating systems, but the key
is the preservation of monopoly in at least one of the pair of
products: the OS and one or more important middleware applications.
69. Finally, tying IE and WMP into the OS and locking in
Microsoft's streaming media and DRM formats put Microsoft in a
position to potentially collect a tax on e-commerce transactions.
Tying thus facilitates the move by Microsoft to a business strategy
of collecting revenues from per-transaction royalty of its software,
rather than outright sale of its software. This business strategy
lessens the competition that Microsoft, as a durable-good
monopolist, faces from the sales of its own previous versions of
Windows. In this sense, the strategy, and its facilitation through
tying, reinforce Microsoft's dominance in operating systems.
70. Product integration can theoretically be beneficial in some
markets. Purchasers prefer to purchase some bundles of inputs, such
as steering wheels with cars or laces with shoes. These efficiencies
do not apply to the bundling of middleware with Windows. Purchasing
a personal computer with a full set of applications and default
options "out of the box" is valuable for many consumers.
But the efficiencies that come with an integrated package of an OS
and various applications are not specific to Microsoft's
applications. In a market where OEMs were free to offer whichever
packages of software consumers desired, without integration of
applications into the operating system, and without Microsoft's
tying constraints or inducements, the market would provide the
variety of packages preferred by consumers. Moreover, the
engineering efficiencies claimed for the integration of middleware
code into the operating system appear to be negligible, and are
therefore more than offset by the anti-competitive effects of tying.
In fact, a software design organized around modular programming of
the operating system and middleware applications would achieve the
efficiencies associated with modular programming and would allow for
plug-and-play replacement of the software.
71. In the absence of tying, Microsoft would offer an operating
system and middleware applications that were distinct in the sense
of modular programming. For example, neither browser nor media
player code would be commingled with OS code: instead, both would
communicate with the OS only through a set of published APIs.
Microsoft would enhance the value of its operating system by
encouraging competition in the innovation of the complementary
good--i.e., the browser and the media player. This strategy
would maximize value to consumers and the profits that Microsoft
obtains from its operating system. The fact that Microsoft does not
engage in such a business strategy demonstrates, in the absence of
evidence that its tying is efficient, that Microsoft is motivated by
anti-competitive incentives that maintain its OS monopoly.
VI. APPENDIX: CURRICULUM VITAE OF FRANK MATHEWSON
G. FRANKLIN MATHEWSON--Professor of Economics, Director of
the Institute for Poficy Analysis, University of Toronto
Ph.D. Stanford University
B. Com. University of Toronto
ACADEMIC POSITIONS
1996-present Director, Institute for Policy Analysis,
University of Toronto.
1969-present Professor of Economics, Department of
Economics, University of Toronto.
1969-present Research Associate, Institute for Policy
Analysis, University of Toronto.
1995-1996 Acting Chair, Department of Economics,
University of Toronto.
1985 Visiting Professor, Center for the Study of the Economy and
the State, University of Chicago, Spring Quarter.
[[Page 29117]]
1984 Visiting Scholar, Graduate School of Business, University
of Chicago, Spring Quarter.
1978-1983 Associate Chairman and Director of Graduate
Studies, Department of Economics, University of Toronto.
1970-1982 Professor of Economics, Faculty of Management
Studies, University of Toronto.
1978-1979 Senior Research Associate, Ontario Economic
Council.
1976-1977 Visiting Research Fellow, Department of
Political Economy, University College, University of London.
HONORS AND FELLOWSHIPS
--Social Science and Humanities Research Council Research
Fellowship: 1994, 1991, 1989, 1987, 1986, 1985
--Social Science and Humanities Research Council Leave
Fellowship: 1983-1984
--Canadian Council Leave Fellowship: 1976-1977
--Canada Council Doctoral Fellowship: 1966-1969
--Woodrow Wilson Fellowship: 1965
PROFESSIONAL AFFILIATIONS
--Editorial Board, Journal of Economics of Business, 1992-
present.
--Editorial Board, Managerial and Decision Economics, 1994-
present.
--Editorial Board, Economic Inquiry, 1987-1997.
--Editorial Board, Journal of Industrial Economics,
1990-1995.
--Associate Editor, International Journal of Industrial
Organization, 1982-1988.
--Co-editor with M. Trebilcock and M. Walker. The Law and
Economics of Competition Policy, Vancouver: The Fraser Institute,
1990.
--Co-editor with J. Stiglitz. New Developments in the Analysis
of Market Structures, Cambridge: MIT Press, 1985.
--Program Committee, European Association for Research in
Industrial Economics, 19831991.
--Program Committee, Conference on Industrial Organization,
International Economics Association, 1982.
PUBLICATIONS
"The Analysis of Efficiencies in Superior Propane: Correct
Criterion Incorrectly Applied." With Ralph Winter. Canadian
Competition Record, Fall 2000, 20(2): 88-97.
"Professional Corporations and Limited Liability."
With Michael Smart, in Peter Newman (ed.) Palgrave Dictionary in
Economics and the Law, 140-143 London: MacMillan Reference
Limited, 1999.
"Law Firms." With Jack Carr, in Peter Newman (ed.)
Palgrave Dictionary in Economics and the Law, 497-500, London:
MacMillan Reference Limited, 1998
"Canadian Bank Mergers: Efficiency and Consumer Gain
versus Market Power" With Neil Quigley CD Howe Institute,
Occasional Paper, No. 108, June 1998.
"To Merge or not to Merge: Is that the Question?"
With Neil Quigely. CD Howe Institute. Occasional Paper, No. 108,
1998.
"The Law and Economics of Resale Price Maintenance."
With Ralph Winter. Review of Industrial Organization, 13:1-2,
57-84, April 1998.
"What's Essential, What's Prudential, What Can Competition
Provide?" With Neil Quigley. Canadian Competition Record 18:2,
11-28, 1997.
"Reforming the Bank Act: Regulation, Public Policy, and
the Market" With Neil Quigley. Canadian Business Law Journal
29:1, 1-16, 1997.
"Ensuring Competition: Bank Distribution of Insurance
Products: Prospects and Implications for Canada." With
Ignatious Horstmann and Neil Quigley. Toronto: CD Howe Institute,
1996.
"Buyer Groups and Exclusivity: Towards a Theory of Managed
Competition." With Ralph Winter. International Journal of
Industrial Organization 15:2, 137-164, 1997. (Presented at the
EARIE Conference, Tel Aviv, Israel, 1993.)
"Tying As a Response to Demand Uncertainty." With
Ralph Winter. The RAND Journal of Economics 28:3, 566-583,
1997. (Presented at the EARIE Conference, Lisbon, Portugal, 1990.)
"Stability in the Absence of Deposit Insurance: The
Canadian Banking System 1890-1966." With Jack Carr and
Neil Quigley. Journal of Money, Credit and Banking 27:4,
1137-1158, 1995.
"Ensuring Failure." With Jack Carr and Neil Quigley.
Toronto: CD Howe Institute, 1994.
"Territorial Rights in Franchise Contracts." With
Ralph Winter. Economic Inquiry 32:2, 181-192, 1994. (Presented
at the EARIE Conference, Budapest, Hungary, 1989.)
"Reply to R. Gilson." With Jack Carr. Journal of
Political Economy 99:2, 426- 428, 1991.
"The Economics of Law Firms: A Study in the Legal
Organization of the Firm." With Jack Carr. Journal of Law and
Economics 33:2, 307-330, 1990.
"The Economic Effects of Automobile Dealer
Regulation." With Ralph Winter. Annales d'Economie et de
Statistique 15/16, 409- 426, Juillet-Decembre 1989.
"Unlimited Liability and Free Banking in Scotland: A
Note." With Jack Cart and S. Glied. Journal of Economic
History 49:4, 974-978, 1989.
"Vertical Restraints and the Law: A Reply." With
Ralph Winter. RAND Journal of Economics, 19:2, 298-301, Summer
1988.
"Unlimited Liability as a Barrier to Entry." With
Jack Carr. Journal of Political Economy 96:4, 766-784, August
1988.
"Is Exclusive Dealing Anti-Competitive?" With Ralph
Winter. American Economic Review 77:5, 1057-1062, December
1987.
"Advertising and Consumer Learning." With Y.
Kotowitz in FTC Conference Volume, Consumer Protection Economics,
1986. (Paper presented at the FTC Conference on Advertising,
Washington, 1984.)
"Competition Policy and Vertical Exchange." With
Ralph Winter. Royal Commission on the Economic Union and Development
Prospects for Canada, University of Toronto Press, 1985.
"The Economics of Franchise Contracts." With Ralph
Winter. Journal of Law and Economics 3, 503-526, October 1985.
(Paper presented at the EARIE Conference, Fontainebleau, 1984.)
"The Economics of Life Insurance Regulation: Valuation
Constraints." With Ralph Winter in J. Finsinger and M. Pauly
(eds.), The Economics of Insurance Regulation, MacMillan and Company
Limited, 1986. (Paper presented at IIM Conference on Regulation in
Insurance Markets, Berlin, 1984.)
"The Economics of Vertical Restraints in
Distribution." With Ralph Winter in J. Stiglitz and G.F.
Mathewson (eds.), New Developments in the Analysis of Market
Structure, MIT Press, 1986.
"An Economic Theory of Vertical Restraints." With
Ralph Winter. RAND Journal of Economics 15:1, 27-38, Spring
1984. (Reprinted in The Economics of Marketing, Cheltenham, UK:
Edward Elgar Publishing Limited, 1998.)
"Information, Search and Price Variability of Individual
Life Insurance Contracts." Journal of Industrial Economics
32:2, 131-148, December 1983. (Paper presented at the Canadian
Economics Association Meetings, Montreal, 1980.)
"The Incentives for Resale Price Maintenance." With
Ralph Winter. Economic Inquiry 21:3, 337-348, July 1983.
(Paper presented at the Western Economic Association Meetings, San
Francisco, 1981.)
"Vertical Integration by Contractual Restraints in Spatial
Markets." With Ralph Winter. Journal of Business 56:4,
497-518, October 1983.
"Entry, Size Distribution, Scale, and Scope Economies in
the Life Insurance Industry." With S. Kellner. Journal of
Business 56:1, 25-44, January 1983.
"Regulation of Canadian Markets for Life Insurance."
With Ralph Winter. Department of Consumer and Corporate Affairs,
Government of Canada, 1983.
"The Rationale for Government Regulation of Quality"
and
"Policy Alternatives in Quality Regulation." With D.
Dewees and M. Trebilcock.
"Markets for Insurance: A Selective Survey of Economic
Issues," in D. Dewees (ed.), The Regulation of Quality,
Toronto: Butterworths, 1983.
"An Economic Theory of Union-Controlled Firms." With
Y. Kotowitz. Economica 49:196, 421433, November 1982. (Paper
presented at the Canadian Economics Association Meetings, Quebec
City, 1978.)
"Advertising, Consumer Information and Product
Quality." With Y. Kotowitz. Bell Journal of Economics 10:2,
566-588, Fall 1979. (Paper presented at the European
Econometric Society Meetings, Geneva, 1978.)
"Informative Advertising and Welfare." With Y.
Kotowitz. American Economic Review 69:3, 284-294, June 1979.
"Information, Entry and Regulation in Markets for Life
Insurance." Ontario Economic Council Research Studies,
University of Toronto Press, 1982.
"Some Issues on Public Advertising." With Y.
Kotowitz. Journal of Contemporary Business 7:4, 123-124, 1979.
"Economics of Fiscal Transfer Pricing in Multinational
Corporations." With G.D. Quirin. Ontario Economic Council
Research Studies, University of Toronto Press, 1978.
"The Residential Demand for Electrical Energy and Natural
Gas: A Model Estimated for Canada." With R. Hyndman and Y.
[[Page 29118]]
Kotowitz in W.T. Ziemba et al. (eds.), Energy Policy Modelling:
United States and Canadian Experiences, Martinus Nijhoff Press,
86-102, 1980. (Paper presented at the Canadian Energy Policy
Modelling Conference, Vancouver, 1978.)
"Economies of Scale in Financial Institutions:
Reply." With P. Halpern. Journal of Monetary Economics 3,
127-131, 1977.
"The Benefits and Costs of Rate of Return
Regulation." With J. Callen and H. Mohring. American Economic
Review 66:5,290-297, June 1976.
"Economies of Scale in Financial Institutions: A General
Model Applied to Insurance." With P. Halpern. Journal of
Monetary Economics 1:2, 203-220, April 1975.
"Price Effects of Market Power in the Canadian Newspaper
Industry: Reply." Canadian Journal of Economics 7:1, 13
0-132, February 1974. Cents and Nonsense." The Economics
of Canadian Policy Issues. With J. Carr and J. McManus. Holt,
Rinehart, and Winston, 1972.
"Metering Costs and Marginal Cost Pricing in Public
Utilities." With G.D. Quirin. Bell Journal of Economics
3:1,335-339, May 1972.
"A Note on the Price Effects of Market Power in the
Canadian Newspaper Industry." Canadian--Journal of
Economics 5:2, 298-301, May 1972.
"A Consumer Theory of Demand for the Media." Journal
of Business 45:2, 212-224, April 1972.
VII. APPENDIX: CURRICULUM VITAE OF RALPH WINTER
RALPH A. WINTER--Professor of Economics and Finance,
University of Toronto
Ph.D. Economics, University of California at Berkeley
M.A. Statistics, University of California at Berkeley
B.Sc. Mathematics and Economics (with honors), University of
British Columbia
ACADEMIC POSITIONS
1988-present Professor of Economics and Finance, University of
Toronto
1985-1988 Associate Professor, Department of Economics and
Faculty of Management Studies, University of Toronto
1979-1985 Assistant Professor, Department of Economics and
Faculty of Management Studies, University of Toronto
HONORS AND FELLOWSHIPS
--Olin Senior Research Fellowship, Yale Law School, 1988
--National Fellowship, Hoover Institution, Stanford University,
1986-1987
Harry Johnson Prize (with M. Peters), for best article in the
Canadian Journal of Economics, 1983
Canada Council Doctoral Fellowship, 1975-1979
John H. Wheeler Scholarship, University of California at Berkeley,
1974-1975
Dean's Honors List, University of British Columbia, 1974
RESEARCH GRANTS
Social Sciences and Humanities Research Council Research Grant:
1983-1985, 1986-1987, 1988-1989, 1990,
1991-1993
Social Sciences and Humanities Research Council Post-Doctoral
Research Fellowship: 1981-1982 and 1982-1983
PROFESSIONAL AFFILIATIONS
International Editorial Board, Assurances
Editorial Board, Journal of Industrial Economics
PROFESSIONAL APPEARANCES
British Columbia Utilities Commission, regarding capital structure
and equity risk premium for Pacific Northern Gas, 1998
Canadian Radio-Television and Telecommunications Commission,
regarding price cap regulation for telephone companies, 1996
Alberta Energy and Utilities Board, regarding fair rate of return
for TransAlta Utilities Corporation and Alberta Power Limited, 1996
Expert witness, Nielsen case, before the Canadian Competition
Tribunal, 1994
Ontario Energy Board (EBRO 483,484), regarding fair rate of return
for Centra Gas, 1993 (written submission)
Ontario Energy Board (EBRO 4790), regarding fair rate of return for
Consumers Gas, 1992
Expert witness, Chrysler case, before the Canadian Competition
Tribunal, 1988
PUBLICATIONS
"Efficiency as a Goal of Competition Policy," in
Canadian Competition Policy: Preparing for the Future, forthcoming,
2002.
"Efficiency Analysis in Superior Propane: Correct
Criterion Incorrectly Applied," forthcoming, Canadian
Competition Record, 2001, with G.F. Mathewson.
The Law and Economics of Canadian Competition Policy,
forthcoming 2001, with M.J. Trebilcock, E. Iacobucci, and P.
Collins, University of Toronto Press.
"Remarks on Recent Developments in Canadian Competition
Policy," in Critical Issues in Mergers and Acquisitions,
Queen's Annual Business Law Symposium, 2000, 59-67.
"The State of Efficiencies in Canadian Competition
Policy," Canadian Competition Record, Winter 2000, pp.
106-114, with M.J. Trebilcock.
"Optimal Insurance under Moral Hazard," in Handbook
of Insurance, G. Dionne, editor, Kluwer Academic Publishers, 2000.
pp. 155-186.
"Substantial lessening of Competition in Canadian
Competition Law", in Competition Law for the 21st Century,
Canadian Bar Association 1998.
"Resale Price Maintenance and the Canadian Competition
Act", Review of Industrial Organization, 1998.
"Colluding on Relative Prices", Rand Journal of
Economics Vol. 28, No.2, (Summer 1997): 359372.
"Tying as a Response to Demand Uncertainty", Rand
Journal of Economics Autumn 1997 (with Frank Mathewson).
"Exclusivity Restrictions and Intellectual Property"
in Competition Policy and Intellectual Policy, Anderson and Gallini,
eds. 1998 (with Patrick Rey).
"Buying Groups and Exclusivity: Towards a Theory of
Managed Competition" (with GF Mathewson): International
Journal of Industrial Organization, 1997.
"The Economics of Liability for Nuclear Accidents"
(with M.J. Trebilcock), International Review of Law and Economics,
1997.
"Output Shares in Bilateral Agency Problems", with
H. Neary, Journal of Economic Theory 1995.
"The Dynamics of Competitive Insurance Markets",
Journal of Financial Intermediation (1994), 379-415.
"Territorial Restrictions in Franchise Contracts",
with G.F. Mathewson, Economic Inquiry, 1994.
"Vertical Control and Price versus Non-Price
Competition," Quarterly Journal of Economics, CVIII(1),
February 1993: 61-78.
"Moral Hazard in Insurance Contracts", in G. Dionne,
Ed., Insurance Economics, 1992.
"The Liability Insurance Market," Journal of
Economics Perspectives, Summer 1991: 115-136.
"Solvency Regulation and the Insurance Cycle,"
Economic Inquiry, XXIX(3), July 1991: 458472.
"The Law and Economics of Vertical Restraints," in
M. Trebilcock, ed., Competition Policy in Canada, Vancouver: The
Fraser Institute, 1990. With G.F. Mathewson.
"The Economic Effects of Automobile Dealer
Regulation," Annales d'Economie et de Statistique, 15/16,
Juillet-Decembre 1989: 409-426. With G.F. Mathewson.
"Vertical Restraints and the Law: A Reply," Rand
Journal of Economics, 19(2), Summer 1988: 298-301. With G.F.
Mathewson.
"The Liability Crisis and the Dynamics of Competitive
Insurance Markets," Yale Journal on Regulation, 1988:
455-500.
"Currency Options, Forward Markets and the Hedging of
Foreign Exchange Risk," Journal of International Economics,
25, 1988: 291-302. With R. Ware.
"The Competitive Effects of Vertical Agreements:
Comment," American Economic Review, 77(5), December 1987:
1057-1062. With G.F. Mathewson.
"The Role of Options in the Resolution of Agency Problems:
Comment," Journal of Finance, December 1986:1157-1174.
With R. Farmer.
"R&D with Observable Outcomes," Journal of
Economic Theory, December 1986:1336-1351. With M. Peters.
"Public Pricing Under Imperfect Competition,"
International Journal of Industrial Organization, 4 (1), March 1986:
87-100. With R. Ware.
"The Economics of Life Insurance Regulation: Valuation
Constraints," in J. Finsinger and M. Pauley (eds.), The
Economics of Insurance Regulation, MacMillan and Company Limited,
1986. With G.F. Mathewson.
Review of Blair and Kaserman's" Law and Economics of
Vertical Control", Journal of Economic Literature, 1986.
Competition Policy and the Economics of Vertical Exchange, book
published by The Royal Commission on Canada's Economic Prospects,
1986, 167pp. (with G.F. Mathewson).
"The Economics of Franchise Contracts," Journal of
Law and Economics, October 1985: 503526. With G.F. Mathewson.
"Licensing in the Theory of Innovation," Rand
Journal of Economics, Summer 1985: 237-253. With N.T. Gallini.
"The Economics of Vertical Restraints on
Distribution," in G.F. Mathewson and J.E.
[[Page 29119]]
Stiglitz (eds.), New Developments in the Analysis of Market
Structure, MIT Press, 1985. With G.F. Mathewson.
"An Economic Theory of Vertical Restraints," The
Rand Journal of Economics, 1 (1), Spring 1984: 27-38. With
G.F. Mathewson.
Regulation of Canadian Markets for Life Insurance, Consumer and
Corporate Affairs, Ottawa, 1984. (With G.F. Mathewson, T. Gussman
and C. Campbell).
"The Incentives for Resale Price Maintenance under
Imperfect Information," Economic Inquiry, XXXI(3), June 1983:
337-348. With G.F. Mathewson.
"Market Equilibrium and the Resolution of
Uncertainty," Canadian Journal of Economics, XVI(3), August
1983: 381-390. With M. Peters.
"Vertical Integration by Contractual Restraints in Spatial
Markets," Journal of Business, 56(4), October
1983:497-519. With G.F. Mathewson.
"Vertical Control in Monopolistic Competition,"
International Journal of Industrial Organization, 1(3), 1983:
275-286. With N.T. Gallini.
"On the Choice of an Index for Disclosure in the Life
Insurance Market: An Axiomatic Approach," Journal of Risk and
Insurance, XLIX(4), December 1982:513-549.
"An Alternative Test of the Capital Asset Pricing Model:
Comment", American Economic Review, Vol. 72, No. 5, December
1982:1194-96. (With S.M. Turnbull).
"Majority Voting and the Objective Function of the Firm
under Uncertainty: Note," Bell Journal of Economics, 12(1),
Spring 1981: 335-337.
"On the Rate Structure of the American Life Insurance
Industry", Journal of Finance. Vol. 36, No. 1, March 1981:
81-97.
ATTACHMENT B
A DETAILED CRITIQUE OF THE PROPOSED FINAL JUDGMENT IN U.S. v.
MICROSOFT
Ronald A. Klain
Benjamin G. Bradshaw
Jessica Davidson Miller
O'Melveny & Myers LLP
555 13th Street, NW
Washington, DC 20004
January 2002
TABLE OF CONTENTS
Page
INTRODUCTION..................................................... 1
SECTION-BY-SECTION CRITIQUE OF THE PFJ........................... 2
Section III of the PFJ: Prohibited Conduct....................... 2
Section IV Of The PFJ: Compliance and Enforcement................ 11
Section V Of The PFJ: Termination................................ 12
Section VI Of The PFJ: Definitions............................... 12
INTRODUCTION
This Court may approve the parties" Proposed Final
Judgment ("PFJ"), but only if it first determines that
the proposed decree is "in the public interest." In
reviewing the PFJ, we acknowledge that there are some beneficial and
important restrictions put on Microsoft's unlawful conduct. In too
many instances, however, these restraints are inevitably swallowed
up by broad exceptions and grants of power to Microsoft. The result
is that the proposed settlement will do little, if anything, to
eliminate Microsoft's illegal practices, prevent recurrence of those
acts, and promote competition in the marketplace. The public
interest requires more, and the Court should thus reject the
proposed settlement.
The purpose of this document is to expose--on a point-by-
point, provision-by-provision basis--the many loopholes,
"trap doors," and other critical deficiencies in the
PFJ. We present the issues in an order that tracks the proposed
decree itself so that they may be easily followed. We also provide
"real world" examples where helpful.
In general, the PFJ suffers from several global, overarching
flaws. First, in critical places, the language used in the PFJ to
define the protections for competition are not broad enough to cover
behavior the Court of Appeals held to be unlawful. Rather, only
specific rights are granted, only specific competitive products are
protected, and only specific anticompetitive practices are banned.
In many cases, the rights and limitations are further clawed-back
through carefully crafted carve-outs that benefit Microsoft.
Second, the proposed decree relies too heavily on the personal
computer ("PC") manufacturers (original equipment
manufacturers or "OEMs") to implement design
changes--particularly in the critical area of
middleware--without sufficiently ensuring their independence
from Microsoft's tight clasp. The PFJ also follows timelines that
are too loose and too generous to a company with the engineering
resources and product-update capabilities of Microsoft.
Third, in too many places, the constraints on Microsoft (once
the exceptions are taken into account) devolve into a mandate that
Microsoft act "reasonably." Aside from the obvious
concern about Microsoft's willingness to do so given its track
record, this formulation is problematic for other reasons. It does
little more than restate existing antitrust law (such provisions
cannot be said to be "remedial" if they, in essence, are
merely directives to refrain from future illegal acts).
And, in terms of enforcement, alleged violations of such
"be reasonable" provisions can only be arrested through
proceedings that will become, in essence, mini-retrials of U.S. v.
Microsoft itself.
In sum, a consent decree that causes little or no change in the
defendant's behavior cannot be found to advance the public interest,
especially when the defendant's conduct has been found by both the
district and appellate courts to be in violation of the law. As
such, based on the numerous shortcomings outlined below, the Court
should disapprove the PFJ.
SECTION-BY-SECTION CRITIQUE OF THE PFJ
Section Ill of the PFJ: Prohibited Conduct
A. Retaliation
?? The Scope Of The Protection Is Narrow: Section III.A of the
PFJ appears to be directed at preventing Microsoft from retaliating
against OEMs that attempt to compete with Microsoft products, but
Microsoft is constrained only from specified forms of retaliation.
If it retaliates against an OEM for any non-specified reason, that
retaliation is not prohibited. This formulation is particularly
problematic because the protected OEM activities are narrowly and
specifically defined. Retaliation against an OEM for installing a
non-Microsoft application that does not meet the middleware
definition is not prohibited; nor is retaliation against an OEM for
removing a Microsoft application that does not meet the middleware
definition.
For example:
?? MSN and MSN Messenger do not appear to be middleware under
the PFJ's highly specific definition of a "Microsoft
Middleware Product." Given this uncertainty, an OEM cannot
know with confidence that it is protected from retaliation if it
removes the icon and start menu promotion for MSN and/or MSN
Messenger.
?? If client software to support Sun's Liberty Alliance (a
competitor to Microsoft's Passport) were developed, it would
probably not be middleware under the PFJ definition. Thus, Microsoft
can retaliate if an OEM adds that software.
More generally, it is odd to have a formulation that de facto
approves of Microsoft's retaliation against OEMs, except where that
retaliation is forbidden. That is, given that competitors to
Passport, .Net My Services (formerly known as Hailstorm), Windows
Movie Maker, Microsoft Money, gaming programs, and Microsoft Digital
Photography programs--even when shipped through the OEM
channel--may not be included in the scope of protected
competition, Microsoft would be free to retaliate against OEMs that
promote those competitors.
Finally, the provision is substantially weakened in that only
certain types of retaliation (i.e., retaliation by changing
contractual relations and retaliation by changing promotional
arrangements) are forbidden, as opposed to prohibiting any form of
retaliation whatsoever. In order to
[[Page 29120]]
eliminate Microsoft's ability to unlawfully protect its OS monopoly,
it is essential that Microsoft be prohibited from taking any action
that directly or indirectly adversely affects OEMs or other
licensees who in any way support or promote non-Microsoft products
or services.
?? Non-Monetary Compensation Provision: Microsoft is free to
retaliate against OEMs that promote competition by withholding any
existing form of "non-monetary Compensation"--only
"newly introduced forms of non-monetary Consideration"
may not be withheld.
?? OEM Termination Clause Will Intimidate OEMs: Microsoft can
terminate, without notice, an OEM's Windows license, after sending
the OEM two notices that it believes the licensee is violating its
license. There need not be any adjudication or determination by any
independent tribunal that Microsoft's two predicate claims are
correct; after just two notices to any OEM of a putative violation,
Microsoft may terminate without even giving notice. This provision
means that the OEMs are, at any time, just two registered letters
away from an unannounced economic calamity. Obviously, that danger
will severely limit the willingness of the OEMs to promote products
that compete with Microsoft.
?? Pricing Schemes Will Allow Microsoft to Avoid Effects of the
Decree: Microsoft can price Windows at a high price, and then put
economic pressure on the OEMs to use only Microsoft applications
through the provision that Microsoft can provide unlimited
consideration to OEMs for distributing or promoting Microsoft's
services or products. The limitation that these payments must be
"commensurate with the absolute level or amount of" OEM
expenditures is hollow--given that it is not clear how an OEM's
costs will be accounted for, for this purpose.
B. Pricing
?? Microsoft Can Use Rebates To Eviscerate Competition. Under
Section III.B of the PFJ, Microsoft can provide unlimited
"market development allowances, programs, or other discounts
in connection with Windows Operating System Products." This
provision severely weakens the protection for OEM choice,
functioning the same way as the rebate provision discussed above,
but without any tether or limiting principle whatsoever. Arguably,
Microsoft can charge $150 per copy of Windows, but then provide a
$99 "market development allowance" for OEMs that install
WMP.
Presumably, this is intended to be circumscribed by Section
III.B.3.c, which provides that "discounts or their
award" shall not be "based on or impose any criterion or
requirement that is otherwise inconsistent with.., this Final
Judgment," but this circular and self-referential provision
does not ensure that the practice identified above is prohibited.
While Microsoft should be allowed to engage in legitimate pricing
decisions, those decisions should be limited to volume-based
discounts offered on a non-discriminatory basis.
C. OEM Licenses
?? Microsoft Retains Control Of Desktop Innovation: Under
Section III.C of the PFJ, Microsoft would retain control of desktop
innovation by being able to prohibit OEMs from installing or
displaying icons or other shortcuts to non-Microsoft software/
products/services, if Microsoft does not provide the same software/
product/service. For example, if Microsoft does not include a media
player shortcut inside its "My Music" folder, it can
forbid the OEMs from doing the same.
This turns the premise that OEMs be given flexibility to
differentiate their products on its head.
For example:
?? Sony--as a PC OEM and a major force in the music and
photography industries--would be uniquely positioned to
differentiate the "My Music" and "My Photos"
folder. And yet, Sony's ability to do so turns solely on the extent
to which Microsoft chooses to unleash competition in these areas.
?? Microsoft Retains Control Of Desktop Promotion."
Microsoft also, very oddly, can control the extent to which non-
Microsoft middleware is promoted on the desktop, by virtue of a
limitation that OEMs can promote such software at the conclusion of
a boot sequence or an Internet hook-up, via a user interface that is
"of similar size and shape to the user interface provided by
the corresponding Microsoft middleware." Thus, Microsoft sets
the parameters for competition and user interface.
?? Promotional Flexibility For IAPs Only, And Only For The OEM's
"Own "IAP: OEMs are allowed to offer IAP promotions at
the end of the boot sequence, but not promotions for other products.
Also, OEMs are allowed to offer IAPs at the end of a boot sequence,
but only their "own" IAP offers. Given that this phrase
is ambiguous, Microsoft may attempt to read this provision as
limiting an OEM's right to offer an IAP product to those IAPs
marketed under the OEM's brand. Helpfully, the Competitive Impact
Statement suggests otherwise, but whatever this phrase means, it is
a needless restriction on an OEM's flexibility.
D. API Disclosure
?? APIs Defined Too Narrowly: Microsoft can evade the disclosure
obligation provided under Section III.D of the PFJ by "hard-
wiring" links to its applications, and through other predatory
coding schemes. Additionally, the disclosure is limited to
"APIs and related Documentation." This is too narrow and
can be evaded. Moreover, the provision for the disclosure of
"Technical Information" found in Judge Jackson's interim
conduct remedies has been eliminated. These disclosures are
necessary to provide effective interoperability.
G. Anticompetitive Agreements
?? Joint Development Agreements Can Subvert Protections Of The
Settlement. The protection against anticompetitive agreements is
substantially undermined by the exception in Section III.G of the
PFJ that allows Microsoft to launch "joint development or
joint services arrangements" with OEMs and others. Under this
provision, Microsoft can "invite" OEMs, ISVs, and other
industry players to enter into "joint development"
agreements and then resort to an array of exclusionary practices.
For example:
?? Microsoft invites OEM X to form a "joint
development" project to create "Windows for X," a
"new product" to be installed on the OEM's PCs. As long
as Microsoft's activities are cloaked under this rubric, it is
exempt from the ban on requiring the OEM to ship a fixed percentage
of its units loaded with Microsoft's applications, and other
protections designed to promote competition.
H. Desktop Customization
?? Add/Remove Is For Icons Only, Not The Middleware
Itself." The add/remove provisions in Section III.H in the PFJ
only allow for removal of end-user access to Microsoft
middleware--not removal of the middleware itself. This position
is inconsistent with the language in the Court of Appeals"
opinion on commingling or the "add/remove" issue.
If Microsoft's middleware remains on PCs (even with the end-user
access masked), then applications developers will continue to write
applications that run on that middleware--reinforcing the
applications barrier to entry that was at the heart of this case.
Allowing Microsoft to forbid the OEMs from removing its middleware,
and allowing Microsoft to configure Windows to make it impossible
for end-users to do the same, allows Microsoft to reinforce the
applications barrier to entry, irremediably.
As we have seen with the implementation of this approach (i.e.,
icon removal only) with regard to Internet Explorer in Windows XP,
Microsoft can use the presentation of this option in the utility to
make it less desirable to end-users.
Moreover, limiting the required "add/remove"
provision to icons only is actually a step backward from the current
state of affairs in Windows XP, where code is removable for several
pieces of Microsoft middleware.
?? Why Are Non-MS Icons Subject To Add/Remove?: The PFJ gives
Microsoft an added benefit: it can demand that OEMs include icons
for non-MS middleware in the add/remove utility. Why this should be
required, in the absence of any finding that assuring the permanence
of non-Microsoft middleware on the desktop is anticompetitive, is
bizarre. This essentially treats the victims of Microsoft's
anticompetitive behavior as if they were equally guilty of
wrongdoing.
?? Microsoft Can Embed Middleware And Evade Restrictions: Under
Section III.H.2, end-users and OEMs are allowed to substitute the
launch of a non-Microsoft Middleware product for the launch of
Microsoft middleware only where that Microsoft middleware would be
launched in a separate Top-Level Window and would display a complete
end-user interface or a trademark. This, in essence, allows
Microsoft to determine which middleware components will or will not
be subject to effective competition. By embedding its middleware
components in other middleware (and thereby not displaying it in a
Top Level Window with all user interface elements), or by simply not
branding the middleware with a trademark, Microsoft can essentially
stop rivals from launching their products in lieu of the Microsoft
products.
?? Harder For Consumers To Choose Non-Microsoft Products Than
Microsoft Products: In the same provision (III.H.2), Microsoft may
[[Page 29121]]
require an end-user to confirm his/her choice of a non-Microsoft
product, but there is no similar "double consent"
requirement for Microsoft Middleware. There is no reason why it
should be harder for users to select non-Microsoft products than
Microsoft products.
?? Microsoft Can "Sweep" The Desktop, Eliminating
Rival Icons: Additionally, the OEM flexibility provisions are
substantially undermined by a provision that allows Microsoft to
exploit its "desktop sweeper" to eliminate OEM-installed
icons by asking an end-user if he/she wants the OEM-installed
configuration wiped out after 14 days. Thus, the OEM flexibility
provisions will only last on the desktop with certainty for 14 days,
and after that period, persistent automated queries from Microsoft
can reverse the effect of the OEM's installations. The effect of
this provision is to severely devalue the ability of OEMs to offer
premier desktop space to ISVs--and to undermine the ability of
OEMs to differentiate their products and provide consumers with real
choices.
?? Desktop "MFN" Requirements: Finally, nothing in
the decree appears to forbid Microsoft from
requiring--especially where non-middleware is concerned- so-
called MFN agreements from the OEMs. These agreements tax OEM
efforts to promote Microsoft rivals by requiring that equal
promotion or placement be given to Microsoft products, often without
compensation.
I. Licensing Provisions
?? Licenses Put In Hands Of OEMs Only--They May Not Be Able
To Use Them Without Help:
The OEM licensing provision is limited in its effectiveness
because the OEMs are prevented in Section 111.1.3 from
"assigning, transferring, or sublicensing" their rights.
This may severely limit their ability to partner with software
companies to develop innovative software packages to be pre-
installed on PCs. This provision is especially harmful when
contrasted with the broad partnering opportunities afforded to
Microsoft under Section III.G. In addition, the OEMs"
willingness to use these provisions--even if they have the
financial and technical wherewithal to do so--may be limited by
the weakness of the retaliation provisions discussed above.
?? Reciprocal License? "Equal Treatment" For Law
Abiders And Law Breakers Is Not Equal:
Under Section III.I.5, the PFJ requires ISVs, OEMs, and other
licensees to license back to Microsoft any intellectual property
they develop in the course of exercising their rights under the
settlement. But that simply rewards Microsoft for having created the
circumstances (i.e., having acted illegally) that necessitated the
settlement in the first place. Microsoft should not be able to
obtain the intellectual property rights of others simply because
those law abiding entities have been required to work with a
lawbreaker.
In addition, this provision may inadvertently work as a
"poison pill" to discourage 1SVs, et al., from taking
advantage of the licensing rights ostensibly provided to them in
Section III.I. The risk that an ISV would have to license its rights
to Microsoft will be a substantial deterrent for that ISV from
exercising its rights under Section III.I.
J. "Security and Anti-Piracy" Exception to API
Disclosure
?? The Settlement Exempts The Software And Services That Are The
Future Of Computing: One of the most seemingly innocuous provisions
in the PFJ is, in fact, one of the biggest loopholes: the provision
found in Section III.J.1 that allows Microsoft to withhold from API,
documentation or communication protocol disclosure any information
that would "compromise the security of .... digital rights
management, encryption or authentication systems." This
provision raises several critical concerns:
?? Digital Rights Management Exception "Swallows"
Media Player Rule." Since the most prevalent use of media
players in the years ahead will be in playing content that is
protected by digital rights management ("DRM") (i.e.,
copyrighted content licensed to users on a "pay-for-
play" basis), allowing Microsoft to render its DRM solution
non-interoperable with non-Microsoft Media Players and DRM solutions
essentially means that non-Microsoft media players will be virtually
useless when loaded on Windows computers.
?? Authentication Exception Allows Microsoft To Control Internet
Gateways, Server-Based Services: Most experts agree that the future
of computing lies with server-based applications that consumers will
access from a variety of devices. Indeed, Microsoft's
".Net" and ".Net My Services" (formerly
known as Hailstorm) are evidence that Microsoft certainly holds this
belief. These services, when linked with Microsoft's
"Passport," are Microsoft's self-declared effort to
migrate its franchise from the desktop to the Internet.
By exempting authentication APIs and protocols from the PFJ's
disclosure/licensure requirement, the settlement exempts the most
important applications and services that will drive the computer
industry over the next few years. If Microsoft can wall off
Passport, .Net, and .Net My Services with impunity--and link
these Internet/server-based applications and services to its desktop
monopoly--then Microsoft will be in a commanding position to
dominate the future of computing.
Additional Problems Raised By Numerous Provisions in Section III
?? No Ban On Commingling Of Code: Nothing in the agreement
prohibits Microsoft from commingling code or binding its middleware
to the OS. This was a major issue in the case; the Court of Appeals
specifically found Microsoft's commingling of browser and OS code to
be anticompetitive; it rejected a petition for reheating that
centered on this issue. And yet, the PFJ would permit this activity
to continue.
?? The danger of the absence of this provision is reinforced by
what is found in the definition of the Windows Operating System
Product ("Definition U"), which states that the software
code that comprises the Windows Operating System Product
"shall be determined by Microsoft in its sole
discretion." Thus, Microsoft can, over time, render all the
protections for middleware meaningless, by binding and commingling
code, and redefining the OS to include the bound/commingled
applications.
?? Too Many Of The Provisions Require A Mini-Retrial To Be
Enforced: In numerous places throughout Section III, the limitations
on Microsoft's conduct are basically rephrased versions of the Rule
of Reason. For example, in Section III.F.2, Microsoft may enter into
restrictive agreements with ISVs as long as those agreements are
"reasonably necessary;" likewise, the Joint Venture
provisions found in Section III.G also employ a rule-of-reason test.
As such, they simply restate textbook antitrust law, and alleged
violations of these provisions could only be resolved through mini-
trials.
Server Interoperability Issues (Found in Sections III.E, III.H
and III.J)
?? Only Full Interoperability Can Reduce Microsoft's Barriers To
Desktop Competition: The PFJ's proposed server remedy will fail to
provide meaningful, competitive interoperability between Microsoft
desktops and non-Microsoft servers because:
?? The applications barrier to entry is central to this case and
to Microsoft's desktop monopoly. A remedy that provides true server
interoperability can be a powerful tool to reduce the applications
barrier to entry. The server has the same potential to provide an
alternative platform as did the browser or Java. In that sense, it
is directly analogous to middleware products.
?? Microsoft has plainly recognized the threat that non-
Microsoft servers pose as an alternative applications platform and
has acted to exclude those products from full interoperation with
the desktop and to advantage its own server products. It is able to
do so because it controls the means by which servers may
interoperate with the functions and features of the Windows desktop.
In order to succeed in establishing non-Microsoft servers as an
effective alternative application platform, both consumers and
application developers have to be convinced that such servers: (1)
can overcome the interoperability barriers that Microsoft has
erected, and (2) have become viable alternatives to Microsoft's own
servers, insofar as they can fully interoperate with the desktop. An
incomplete interoperability remedy fails to meet this test. Neither
consumers (professional IT managers) nor server application
developers will be attracted to non-Microsoft servers that lack any
important interoperability functionality. If important
interoperability barriers are left in place, IT managers simply will
not buy the product and the remedy will fail to achieve its intended
purpose. This is an important guiding principle.
The proposed decree allows Microsoft to continue to exploit
dependencies between its desktop applications or its desktop
middleware and its servers or handheld devices to exclude server and
handheld competition.
?? Section III.I Excludes Competing Server Vendors From The
Benefits Of Section III. E's
Disclosures: Section III.I limits Microsoft's obligation to
license its desktop-server Communications Protocols to ISVs, IHVs,
IAP, ICPs, and OEMs; thus, server
[[Page 29122]]
competitors are excluded from the group of companies that Microsoft
must license information to under section III.E.
?? The Failure To Define "Interoperate" Is A
Mistake: Neither Section III.E nor any other provision of the PFJ
defines the meaning of "interoperate." The failure to
define "interoperate" is tantamount to the Department of
Justice's ("DOJ") prior failure to define
"integrate" in the 1995 consent decree, and will form
the basis for unending disputes over the scope of Microsoft's
disclosure obligations.
?? "Communications Protocol" Is Defined Too Narrowly
And Too Ambiguously: The definition of "Communications
Protocol," which determines the scope of server information to
be disclosed by Microsoft, is highly ambiguous and potentially very
narrow in scope:
?? It appears to be limited to the Windows 2000 server, and thus
may exclude Microsoft's Advanced Windows 2000 server and Datacenter
server.
?? It is unclear whether "rules for information
exchange" that "govern the format, semantics, timing
sequencing, and error control of messages exchanged over a
network" mean the rules for transmitting information packets
over a network, or the rules for formatting and interpreting
information within such packets.
?? It appears to be limited to information exchanged via LANs
and WANs, and therefore may exclude information exchanged over the
Internet. In other words, having illegally seized dominance over
browsers, Microsoft will be allowed to use that power to establish
de facto proprietary protocols for Internet communication and keep
them entirely to itself. Even in its broadest possible meaning, the
term "Communications Protocols" is insufficiently broad
or comprehensive to require disclosure of the information needed to
permit interoperability between non-Microsoft servers and the full
features and functions of Windows desktops.
?? Section III.J's Carve-Out Eliminates the Most Important
Disclosures: What little Section III.E provides, Section III.J takes
away by permitting Microsoft to refuse to disclose the very
protocols and technical dependencies it is currently using to
prevent non-Microsoft servers from interoperating with Microsoft
desktops and servers.
Section IV Of The PFJ: Compliance and Enforcement
A. Enforcement Authority
?? Enforcement Authority Is Too Difficult To Employ: Clearly,
what is missing from the agreement is a quick, meaningful, and
empowered mechanism for preventing and rectifying Microsoft's
inevitable violations of the agreement. Thus, while the provision
allowing Microsoft to cure any violations of Sections III.C, D, E,
and H before an enforcement action may be brought is not itself
objectionable, it is but one of a number of provisions that make
enforcing the agreement cumbersome, expensive and time-consuming.
B. Technical Committee / D. Voluntary Dispute Resolution
?? Source Code Access Is Not Enough: While it is helpful that
the Technical Committee ("TC") will have access to
Microsoft's source code and can resolve disputes involving that
issue, the TC is otherwise powerless to compel Microsoft's
compliance with the agreement in any other respect. The prospects
that Microsoft will accept the decisions of the TC in a voluntary
dispute resolution process are near zero. And the entire mechanism
seems designed to extend disputes indefinitely: no time limits or
time-lines are specified for dispute resolution.
As it stands now, a party injured by Microsoft's violation of
the decree can complain to the TC, which will then conduct an
investigation:
?? Once the investigation is complete, the TC will presumably
issue some decision; while the investigation is ongoing, the TC is
supposed to consult with Microsoft's Compliance Officer, for an
indefinite period;
?? If the TC concludes that Microsoft violated the agreement,
and Microsoft does not agree to change its behavior or rectify the
wrong, then the TC must decide whether to recommend the matter to
the DOJ for further action;
?? Once recommended, the DOJ--after some review
period--may decide to take action, and apply to the court for a
remedy, or it may not;
?? And once the DOJ applies for action, the process in court to
obtain relief or remedy may extend for an indefinite period.
This is obviously a lengthy and ineffective process for ensuring
that Microsoft complies with its obligations under the decree. In an
industry where time is of the essence and delays can be fatal, the
built-in delays that allow Microsoft to drag its feet are wholly
unacceptable.
?? Technical Committee's Investigation Has Only Limited Use: The
work of the Technical Committee cannot "be admitted in any
enforcement proceeding before the Court for any purpose," and
the members of the TC are forbidden to appear. Thus, under the terms
of the decree, the substantial time, effort and expense that can go
into a TC process may need to be duplicated in an enforcement action
adding to the complexity and expense that the process will pose for
victims of Microsoft violations.
Section V Of The PFJ: Termination
A. Five-Year Limit
?? Five-Year Coverage Is Inadequate: Given the scope of
Microsoft's violations, the time period required to restore
effective competition, and the pattern of willful lawbreaking on
Microsoft's part, a five-year consent decree is inadequate.
B. Two-Year Extension
?? Penalty For Knowing Violations Is Too Lenient: Amazingly, the
PFJ provides that no matter how many knowing and willful violations
Microsoft engages in, the restrictions found in the settlement may
be extended only for a single two-year period. Thus, if Microsoft is
adjudged to have engaged in such a pattern of violations, it
essentially has a "free reign" to repeat those
violations with impunity.
Section VI Of The PFJ: Definitions
A. APIs
?? API Definition Too Narrow: This is discussed above.
I. ISV
?? Definition Is Not Forward-Looking: The definition of ISV is
drafted too narrowly and should more clearly encompass developers of
software products designed to run on new versions of the Windows
operating system and next generation computing devices.
K. Microsoft Middleware Product
?? Definition Exempts Too Much Middleware: Much of the decree is
based on this definition--the OEMs" flexibility turns on
what is included or excluded from this category of application. And
yet the definition, which is different from the definition used by
the District Court (affirmed and employed by the Court of Appeals)
is fatally flawed.
?? First, there are only five existing products that can be
known with certainty to be "Microsoft Middleware
Products." That means that highly similar items, such as MSN,
MSN Messenger, MSN Explorer, Passport, Outlook, and Office may be
excluded from the definition of middleware. Why Windows Messenger
would be covered by the PFJ, but MSN Messenger would be exempt; or
why Internet Explorer would be covered, while MSN Explorer would be
exempt--if this is, in fact, how the provision
operates--is a mystery. Why ambiguity would be accepted in such
a critical area is an even greater mystery.
Given the uncertainty, Microsoft may attempt to retaliate
against OEMs that remove even the icons for its applications; it may
also attempt to prohibit end-users from removing these applications
(or even their icons). This is a step backward from the status quo
(even in Windows XP); the ambiguity is a gaping hole.
?? Second, the generic middleware definition, which applies only
to new products, and therefore does not capture any product now in
existence, allows Microsoft to define which products are included or
not, by virtue of Microsoft's trademark and branding choices. Thus,
as long as Microsoft buries these products inside other
applications, they are not independently considered middleware.
?? Third, as suggested in the points above, the definition
misses the future platform challenges to Microsoft's Windows
monopoly: web-based services. These services should be specifically
defined and included in the class of protected middleware.
N. Non-Microsoft Middleware Product
?? Only Developers With Substantial Resources Will Be Protected:
The competitive offerings protected by the decree are narrowly
limited to offerings that fall within the definition of "Non-
Microsoft Middleware Products." Again, as noted above, the
guarantees of OEM flexibility, promotion, and end-user choice apply
only to these specified products--not to any other software
applications.
And yet, sadly, this narrow definition extends protection only
to applications "of which at least one million copies were
distributed in the United States within the previous year."
Thus, "an innovator in his garage," creating a new form
of middleware to revolutionize the computer industry, has no
protection from Microsoft's rapacious
[[Page 29123]]
ways until he can achieve the distribution of 1 million copies of
his software.
Also, as noted above, "web-based services" are not
captured in this definition, notwithstanding their importance to
future competition to the Windows OS.
R. Timely Manner
?? Netscape, All Over Again: Microsoft's obligation to disclose
APIs and other materials needed to make applications interoperable
with Windows in a "timely manner" is keyed off the
definition of that term in Section R. But Microsoft retains complete
control over this timeline because the definition provides that
Microsoft is under no obligation to engage in these disclosures
until it distributes a version of the Windows OS to 150,000 beta
testers. Thus, as long as Microsoft restricts its beta testing
program to 149,999 individuals until very late in the development
process, it can effectively eviscerate the disclosure requirements.
Our review of the available documentation shows, for example, that
Microsoft had no more than 20,000 beta testers for Windows XP until
very late in the release cycle; thus, had this provision been in
place during the Windows XP release cycle, Microsoft would have been
under no obligation to release APIs until the eve of product
shipping.
Slow disclosure of APIs is precisely how Microsoft defeated
Netscape's timely interoperability with Windows 95. Thus, in this
way, not only is the decree inadequate to prevent future wrongdoing,
it does not even redress proven illegal acts in the past.
U. Windows Operating System Product
The scope of Microsoft's disclosure obligations under the
agreement are determined in large part by the meaning of
"Windows Operating System Product." The definition of
Windows Operating System Product leaves Microsoft free to determine
in "its sole discretion" what software code comprises a
"Windows Operating System Product." In other words,
Microsoft's disclosure obligation is subject entirely to its
discretion.
Added Definitions--Bind, Interoperate, Technical
Information and Web-Based Service
?? Missing Definitions From Remedial Order: As discussed above,
the PFJ omits the definitions for "Bind,"
"Interoperate" and "Technical Information,"
which are critical for ensuring that this agreement provides real
constraints on Microsoft's illegal activities.
?? Exclusion Of Web-Based Services: In addition, the exclusion
of web-based services from the category of protected competitive
threats to the Windows OS is a grave omission. The definition of
middleware should include a proviso that stipulates that web-based
services be considered as if they were middleware (whether or not
they technically fit in the category).
MTC-00030616
PATRICIA G. BUTLER
DANIELLE R. ODDO
Howrey Simon Arnold & White, LLP
1299 Pennsylvania Avenue, NW
Washington, DC 20004
(202) 783-0800
KENNETH M. FRANKEL
Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P.
1300 1 Street, NW
Washington, DC 20005
(202) 408-4000
Attorneys for non-party Red Hat, Inc.
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, Plaintiff, V. MICROSOFT CORPORATION,,
Defendant.
Civil Action No. 98-1232 (CKK)
STATE OF NEW YORK ex. rel. Attorney General ELIOT SPITZER, et
al., Plaintiffs, V.
MICROSOFT CORPORATION, Defendant.
Civil Action No. 98-1233 (CKK)
COMMENTS OF RED HAT, INC. TO REVISED PROPOSED FINAL JUDGMENT AND
COMPETITIVE IMPACT STATEMENT IN UNITED STATES V. MICROSOFT CORP.,
CIVIL NO. 98-1232, IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF COLUMBIA
I. INTRODUCTION
Pursuant to the Antitrust Procedures and Penalties Act, 15
U.S.C. 16, Red Hat, Inc. ("Red Hat") files comments to
the revised Proposed Final Judgment, filed November 6, 2001, and the
Competitive Impact Statement, filed November 15, 2001, in United
States v. Microsoft Corp., Civil No. 98-1232, in the United
States District Court for the District of Columbia. Red Hat files
these comments because the Proposed Final Judgment will not remedy
the anti-competitive effects of Microsoft's antitrust violations
that were upheld by the United States Court of Appeals for the
District of Columbia Circuit in its June 23, 2001 decision. As a
result, the market for PC-compatible operating systems--in
which Microsoft unlawfully maintained its monopoly--will not
return to a competitive environment, and the mandate of the District
of Columbia Court of Appeals will be thwarted.
The Litigating States have filed their own Proposed Final
Judgment and, to the extent it contains additional modifications to
DOJ's revised proposed Final Judgment. Red Hat supports those
modifications.
II. BACKGROUND
It is no exaggeration to say that Linux is the operating system
that provides the most serious and fastest growing competition to
the Microsoft operating system. Linux is the PC-compatible open
source operating system based on the kernel developed by Mr. Linus
Torvalds in the early 1990s, and in the short amount of time that it
has been in the marketplace, the Linux operating system has become a
viable competitor to other operating systems. Red Hat, which began
in 1994, offers the Red Hat version of the Linux operating system
with support and software applications and is the largest
distributor of open source Linux. In order for the Proposed Final
Judgment to have an effect in restoring the competitive nature of
the PC-compatible operating system market, Red Hat believes that
each and every provision must be viewed with the overall perspective
of whether the provision provides a level playing field for
companies such as Red Hat, which offer direct competition in the
injured market, or whether the provision directly or indirectly will
enable Microsoft to perpetuate the monopoly it has been found to
have maintained illegally. In order to provide a background for
these comments to the Proposed Final Judgment, a brief overview of
open source, and Red Hat Linux follows.
Open source and free software is distinct from traditional
(proprietary) software in that it is produced by a generally
voluntary, collaborative process, and accompanied by a license that
pants users the right to:
1) have the source code,
2) freely copy the software,
3) modify and make derivative works of the software, and
4) transfer or distribute the software in its original form or
as a derivative work, without paying copyright license fees.
Many open source and free software licenses also embody the
concept known as copyleft. Simply put, this is the condition that
all versions of the product, including derivative works, be
distributed along with, and subject to, the conditions and rights in
the license under which they were received. This concept is central
to the ability of a licensor to ensure that its product remains open
source or free software.
The underlying principle is that improvements to a product are
given back to the open source and free software community. In this
way, open source and free software is continually improved, with the
modifications being made available to all. Without the ability to
impose this condition on further distribution, a copy, or a
derivative work made pursuant to the authorization granted in the
license, could be distributed without the right to copy, modify,
distribute or have the source code--in effect it would be
transformed into a proprietary work. It would cease to be
"free." The benefits of open source and free software
are numerous. In practical and commercial terms, open source and
free software is stable, high quality software, which users are free
to tailor to their own purposes. As the source code is available to
all, a user is free to remedy any bugs it may find, maintain the
software itself, or hire a third party to do so. The availability of
the source code also allows the creation of complementary and
interoperable programs by anyone and everyone, with no need to
reverse engineer the product. As an element in the competitive
environment, open source software provides an almost pure form of
competition in the software (and, of course, operating system)
competitive environment. Improvements are quickly available and
users are able to make product-quality based choices, unfettered by
many of the considerations that occur in other competitive markets.
Moreover, because of the size of the community that participates in
the open source arena, products are quickly debugged, refined and
improved; greatly benefiting the ultimate end user.
From a company with only $482,000 in revenue in 1995, Red Hat
has grown to over $100 million in revenue in 2001. The vast majority
of Red Hat's revenues are derived from the services it offers around
its well-known Linux distribution, not from license fees or
royalties. Despite its rapid growth, however, until last year Red
Hat Linux was not considered an effective competitor with either Sun
Microsystems or Microsoft in the
[[Page 29124]]
server market. With increasing success, Red Hat has now penetrated
that market, demonstrating that it can be an effective competitor
where no illegal monopoly exists. The same cannot be said for the
desktop operating system market, the subject of many of the claims
and findings against Microsoft in this matter. Because of
Microsoft's stranglehold on that market, with over a 94%
marketshare--a stranglehold unlawfully maintained--Red Hat
has elected not to attempt to compete until a level playing field
can be established. Any efforts by Red Hat toward competing would be
utterly fruitless and an unjustified use of corporate resources.
Microsoft has made no secret of the fact that it considers
companies such as Red Hat to be potential competitive threats in the
marketplace. According to Microsoft's own executives, Microsoft has
contacted "U.S. lawmakers" in an effort to curtail the
spread of the Linux operating system. Microsoft Executive says Linux
Threatens Innovation, Feb. 14, 2001, Bloomberg News, at http://
news.cnet.com/investor/news/newsitem/0-99001028-4825719-
RHAT.html. (Ex. A attached hereto.) Microsoft's CEO, Steve Ballmer
has described Linux as a "cancer that attaches itself in an
intellectual property sense to everything it touches."
Microsoft CEO takes lunch break with the Sun-Times, Chicago Sun
Times, June 1, 2001, at http://www.suntimes.com/output/tech/cst-fin-
micro01.html (Ex. B attached hereto.); see also Joe Wilcox &
Stephen Shankland, Why, Microsoft is wary of open source, CNET
News.com, June 18,2001, at http://news.com.corn/
21001001-268520.html (Ex. C attached hereto.); Stephen
Shankland, Microsoft license spurns open source, CNET News.com, June
22, 2001, at http://news.com.com/2100-1001268889.html (Ex. D
attached hereto.); Mike Ricciuti, Microsoft memo touts Linux, CNET
News.com, Nov. 5, 1998, at http://news.com.com/
2100-1001-217563.html (Ex. E attached hereto.); Joe
Wilcox & David Becker, Microsoft sues Linux start-up over name,
CNET News.com, Dec. 20, 200l, at http://news.com.com/
2100-1001-277314.html (Ex. F attached hereto.). From
these comments, it is clear, that, unless the Proposed Final
Judgment protects the ability of non-Microsoft operating systems
such as Red Hat Linux to gain access to, and compete for, software
developers and users, and to compete, the remedies aspect of this
lawsuit will be a failure. Therefore, in order for the Department of
Justice to effect a remedy scheme that will address the findings of
the Court of Appeals, the Department of Justice must ensure the
ability of companies such as Red Hat to compete. A review of the
Proposed Final Judgment, however, shows little to no attention paid
to the very companies that directly compete in the market in which
Microsoft unlawfully has maintained its monopoly. Unfortunately,
this is despite the clear intent of the Competitive Impact
Statement, in which the Department of Justice states:
Appropriate injunctive relief in an antitrust case should: (1)
end the unlawful conduct; (2) "avoid a recurrence of the
violation" and others like it; and (3) undo its
anticompetitive consequences. See Nat'l Soc'y of Prof'l Eng'rs v.
United States, 435 U.S. 679, 697 (1978); United States v. E.I du
Pont de Nemours & Co., 366 U.S. 316, 326 (1961); Int'l Salt Co.
v. United States, 332 U.S. 392,401 (1947); United States v/Microsoft
Corp., 253 F.3d 34, 103, 107 (DC Cir. 2001) Restoring competition is
the "key to the whole question of an antitrust remedy,"
du Pont, 366 U.S. at 326. Competition was injured in this case
principally because Microsoft's illegal conduct maintained the
applications barrier to entry into the personal computer operating
system market by thwarting the success of middleware that would have
assisted competing operating systems in gaining access to
applications and other needed complements. Thus, the key to the
proper remedy in this case is to end Microsoft's restrictions on
potentially threatening middleware, prevent it from hampering
similar nascent threats in the future and restore the competitive
conditions created by similar middleware threats. The Proposed Final
Judgment imposes a series of prohibitions on Microsoft's conduct
that are designed to accomplish these critical goals of an antitrust
remedy.
Competitive Impact Statement filed in U.S. v. Microsoft (D.DC
Nov. 15, 2001) at 9. It is with consideration being given to the
findings of the Court of Appeals and the realistic impact of the
Proposed Final Judgment that Red Hat files these comments.
III. COMMENTS ON INTELLECTUAL PROPERTY ISSUES ASSOCIATED WITH
THE FINAL JUDGMENT
A. The Proposed Final Judgment Would Neither Remedy Microsoft's
Monopolization of, Nor Restore Competitive Conditions to, the Market
for PC-Compatible Operating Systems, Because Microsoft Would Remain
Free to Shut Down Competitive Operating Systems and Middleware
Through Assertion of Microsoft's Intellectual Property Portfolio
For intellectual property reasons, the Proposed Final Judgment
would fail to remedy Microsoft's monopolization of the operating
systems market and fail to accomplish the goal to restore
competitive conditions to the market. It would fail because it would
permit Microsoft to block software and hardware developers, users,
and vendors from developing, using, distributing, or promoting
competitive operating systems by threatening or bringing suits for
infringement of Microsoft's extensive intellectual property
portfolio. To provide an effective remedy and accomplish that goal,
the narrow scope of licenses to Microsoft's intellectual property
fights required by the Proposed Final Judgment must, at a minimum,
be expanded to allow those persons to engage in that competitive
conduct without the threat of an infringement suit by Microsoft.
More specifically, the Proposed Final Judgment would prohibit
Microsoft from retaliating against software and hardware developers,
users, and vendors if they were to develop, use, distribute, or
promote operating systems or middleware that competes with
Microsoft's Windows operating system or middleware. But giving with
its right hand and taking with its left, the Proposed Final Judgment
would exempt from prohibited retaliation--and expressly
allow--Microsoft to sue those persons for infringement of
Microsoft's intellectual property fights if they engage in that
conduct.
Two primary effects would flow from this exemption. First,
Microsoft would remain free to assert its intellectual property
fights to stop developers and vendors of competitive operating
systems and middleware from developing, using, distributing, or
promoting their software. In that event, the downstream software and
hardware developers, users, and vendors who want to use and work
with competitive operating systems and middleware would not have any
competitive operating systems or middleware to use, distribute, or
promote. Second, Microsoft would remain free to assert the same
intellectual property rights to stop those downstream developers,
users, and vendors from using, distributing, or promoting such
competitive operating systems and middleware.
If no competitive operating systems and middleware were
available or if the downstream developers, users, and vendors could
not use, distribute, or promote competitive operating systems or
middleware because Microsoft threatens or brings intellectual
property infringement suits, the Proposed Final Judgment cannot
accomplish its purpose: to remedy Microsoft's unlawfully maintenance
of its monopoly and restore competitive conditions to the market
Microsoft in which Microsoft's monopoly was unlawfully maintained.
The antitrust remedy should at least remove this exemption and
define retaliation to include threatening or bringing suit for
infringement of Microsoft's intellectual property portfolio. Such a
remedy would be proper and consistent with both Supreme Court and
Justice Department precedent.
1. Microsoft Illegally Maintained a Monopoly in the Market for
Intel-Compatible Operating Systems
The district court held, and the court of appeals affirmed, that
Microsoft had illegally "maintained a monopoly in the market
for Intel-compatible PC operating systems in violation of [Sherman
Act] "2." United States v. Microsoft Corp., 253 F.3d 34,
45, 50 (DC Cir. 2001). The remedy in this case should at the very
least restore competition to that market, because that was the only
district court holding that the court of appeals affirmed. See id.
at 46. Unless the remedy restores competition within that market,
the courts" holdings, and the Justice Department's and
States" efforts in proving that antitrust violation, will be
nullities.
2. The Purpose of an Antitrust Remedy Is to Terminate the
Monopoly and Restore Competition to the Monopolized Market
Controlling case law and the Justice Department both recognize
that the purpose of the remedy in a Section 2 case is to end the
monopoly and restore competition to the market that the defendant
monopolized. As the Supreme Court explained, and as the Court of
Appeals recognized in Microsoft, in a monopolization case "it
is the duty of the court to prescribe relief which will terminate
the illegal monopoly, deny to the defendant the fruits of its
statutory violation, and ensure that there remain no practices
likely to result in monopolization in the future."
[[Page 29125]]
United States v. United Shoe Mach. Corp., 391 U.S. 244, 250 (1968);
see Microsoft, 346 F.3d at 103 (quoting United Shoe). Indeed, the
goal of relief is to make sure that competition results, not just to
end a lawsuit. As the Supreme Court instructed:
In an equity suit, the end to be served is not punishment of
past transgression, nor is it merely to end specific illegal
practices. A public interest served by such civil suits is that they
effectively pry open to competition a market that has been closed by
defendants" illegal restraints. If this proposed Final
Judgment accomplishes less than that, the Government has won a
lawsuit and lost a cause.
International Salt Co. v. United States, 332 U.S. 392, 401
(1947).
In accordance, the Justice Department explained that its purpose
in entering into the Proposed Final Judgment was to "restore
competitive conditions to the market." Competitive Impact
Statement at 2. Likewise, the Justice Department told the public in
its press release that the "settlement will bring effective
relief to the market and ensure that consumers will have more
choices in meeting their computer needs." Press Release, U.S.
Justice Department, Department of Justice and Microsoft Corporation
Reach Effective Settlement on Antitrust Lawsuit, Nov. 2, 2001, at
http://www.usdoj.gov/opa/pr/2001/November/01 at 569.htm (Ex. G
attached hereto.). 3. Intellectual Property Restrictions Would
Prevent the Proposed Final Judgment From Restoring Competitive
Conditions to the Monopolized Market for Operating Systems
a. The Proposed Final Judgment Would Ban Microsoft from
Retaliating Against Certain Groups if They Work with Operating
Systems or Middleware that Compete with Microsoft's Windows or
Middleware
The Proposed Final Judgment would protect certain groups of
software or hardware developers, users, and vendors (OEMs, ISVs, and
IHVs)\2\ from undefined "retaliation" by Microsoft if
the groups were to work with operating systems or middleware that
compete with Microsoft's Windows or middleware. It would provide
that Microsoft shall not "retaliate" against those
groups if they engage in certain conduct with any "software
that competes with Microsoft Platform Software," which the
Proposed Final Judgment defines to include Microsoft's Windows
operating system "and/or a Microsoft Middleware
Product."\3\ For example, the Proposed Final Judgment would
provide that Microsoft "shall not retaliate" against an:
2. Under the Proposed Final Judgment: OEM is an "original
equipment manufacturer of Personal Computers that is a licensee of a
Windows Operating System Product"; ISV is an "entity
other than Microsoft that is engaged in the development or marketing
of software products"; and IHV is an "independent
hardware vendor that develops hardware to be included in or used
with a Personal Computer running a Windows Operating System
Product." See Proposed Final Judgment, Sections VI.O, I, II.
3. "Microsoft Platform Software" is defined as
including "a Windows Operating System Product" (either
alone or with a middleware product), which in turn is defined as
"the software code.., distributed commercially by Microsoft
for use with Personal Computers as Windows 2000 Professional ....
"Proposed Final Judgment, Section VI.L, U. An Operating System
is defined as "the software code that, inter alia, (i)
controls the allocation and usage of hardware resources ... of a
Personal Computer, (ii) provides a platform for developing
applications by exposing functionality to ISVs through APIs, and
(iii) supplies a user interface that enables users to access
functionality of the operating system and in which they can run
applications." Id., Section VI?
I. OEM for "developing, distributing, promoting, using,
selling, or licensing any software that competes with"
Microsoft's Windows operating system or middleware. Proposed Final
Judgment Section III.A. 1.
II. ISV or IHV for "developing, using, distributing,
promoting or supporting any software that competes with"
Microsoft's Windows operating system or middleware. Proposed Final
Judgment Section III.F. 1 .a.
b. The Ban on Retaliation Would Not Ban Infringement Suits
While the term "retaliate" is undefined, the
Proposed Final Judgment contradictorily exempts from the scope of
prohibited retaliation--and therefore expressly
permits--suits for infringement of Microsoft's intellectual
property rights. More specifically, the provisions banning
retaliation against OEMs, ISVs, and IHVs are followed by an
exemption:
Nothing in this provision shall prohibit Microsoft from
enforcing.., any intellectual property right that is not
inconsistent with this Final Judgment.
Proposed Final Judgment Section III.A; see Section III.F.3.
While the term "inconsistent" also is undefined, it is
clear from a later section that a suit to enforce intellectual
property rights against conduct that is protected from Microsoft's
retaliation nevertheless is "not inconsistent with" the
Proposed Final Judgment.
The later section, Section III.I, provides that Microsoft must
offer to license its intellectual property rights to the groups if
those rights are required to exercise an option expressly provided
under the Proposed Final Judgment. If it stopped there, the
provision would be fine. But an exemption to that license provision
emphasizes that the required license is very narrow, and that
Microsoft could still bring infringement suits if the groups engage
in the very conduct that is protected from Micros0ft's retaliation:
I. Microsoft shall offer to license to ISVs, IHVs,... and OEMs
any intellectual property rights owned or licensable by Microsoft
that are required to exercise any of the options or alternatives
expressly provided to them under this Final Judgment, provided that
2. the scope of any such license (and the intellectual property
rights licensed thereunder) need be no broader than is necessary to
ensure that an ISV, IHV,... or OEM is able to exercise the options
or alternatives expressly provided under this Final Judgment (e.g.,
an ISV's, IHV's ... and OEM's option to promote Non-Microsoft
Middleware shall not confer any rights to any Microsoft intellectual
property rights infringed by that Non-Microsoft Middleware);
Beyond the express terms of any license granted by Microsoft
pursuant to this section, this Final Judgment does not, directly or
by implication, estoppel or otherwise, confer any fights, licenses,
covenants or immunities with regard to any Microsoft intellectual
property to anyone. Proposed Final Judgment, Section III.I (emphasis
added). In accordance, the Justice Department's November 15, 2001
Competitive Impact Statement explains that a purpose of this
provision is to "[permit] Microsoft to take legitimate steps
to prevent unauthorized use of its intellectual property."
Competitive Impact Statement at 49.
"Unauthorized use" would include infringement. A
patent, for example, provides the patent owner the exclusive fights
to make, use, sell, and offer to sell the patented subject matter.
35 U.S.C. 271(a). Those exclusive fights cover developing,
distributing, promoting, using, and selling. Thus, while earlier
sections of the Proposed Final Judgment say Microsoft could not
"retaliate" against that conduct (Proposed Final
Judgment Sections III.A.1, III.F.1.a), this later section
contradictorily provides that Microsoft could retaliate against the
conduct--by lawsuits (Proposed Final Judgment Section III.1.2).
To illustrate the problem, apply the specific example quoted
above, from Section III.I.2 of the Proposed Final Judgment, to an
ISV that promotes an operating system that competes with Windows,
and assume that Microsoft has patents that arguably cover that
competitive operating system. Under the Proposed Final Judgment,
Microsoft would be prohibited from "retaliat[ing]" if
the ISV were "promoting" the competitive operating
system, such as by offering it for sale. Proposed Final Judgment
Section III.F.1.a. But the exemption provides that the option to
promote the software without retaliation "shall not confer any
rights to any Microsoft intellectual property rights [e.g., patents]
infringed by that" competitive operating system. Proposed
Final Judgment Section III.I.2. Thus, Microsoft could sue the ISV
for infringing its patents by promoting the competitive software.
Consequently, the Proposed Final Judgment would prohibit
Microsoft from "retaliating" against an ISV or IHV for
"developing, using, distributing, [or] promoting" the
competitive operating system--but Microsoft could sue the ISV
or IHV for patent infringement for the same acts: making
(developing), using, selling (distributing), or offering to sell
(promoting) that system. Likewise, it would prohibit Microsoft from
"retaliating" against an OEM for "developing,
distributing, promoting, using, or selling" a competitive
operating system--but Microsoft nonetheless could sue the OEM
for patent infringement for that conduct.
Thus, while Microsoft could not "retaliate," it
could sue for infringement, thereby completely eviscerating the ban
on retaliation.
B. Infringement Suits by Microsoft Based on Its Massive
Intellectual Property Portfolio Could Stop Competitive Operating
Systems or Middleware
[[Page 29126]]
These intellectual property exemptions could permit Microsoft to
completely prevent any competition from other operating systems or
middleware, both at the development level and downstream throughout
the development and distribution chain. ISVs, i.e., non-Microsoft
entities that develop or market software products, would include
developers and vendors of competitive operating systems. See
Proposed Final Judgment Section VI.I. 4 A patent suit against such a
developer or vendor for infringement of Microsoft's patents covering
competitive operating systems could result in an injunction against
making, using, selling, or offering to sell the competitive system,
as well as damages (which could be trebled) and attorney fees for
any sales. See 35 U.S.C. 283-285. If that
occurred, downstream ISVs, IHVs, and OEMs would not have any
competitive operating systems with which they could work.
4. See. also, discussion in Parts IV.B. and V, infra, concerning
the definition of ISVs. ISVs also would include downstream
developers and vendors of middleware or applications software. A
patent suit against them for infringement of Microsoft's patents
would prevent them from, e.g., using a competitive operating systems
to develop their software. Downstream IHVs and OEMs would include
developers and vendors of personal computers. A patent suit against
them for infringement of those Microsoft patents would prevent them
from, e.g., making or selling any computers using competitive
operating systems.
The same would apply to competitive middleware. A patent suit
against an ISV that develops competitive middleware would preclude
the availability of competitive middleware. A patent suit against
downstream developers or vendors of applications software would
preclude them from using competitive middleware to develop their
software. And a patent suit against downstream IHVs and OEMs would
preclude them from making or selling computers using competitive
middleware.
Microsoft has amassed a large portfolio of numerous patents and
other intellectual property that potentially covers competitive
operating systems and middleware. While any infringement analysis
must be specific to a particular software, it is clear that
Microsoft has numerous patents that potentially could be asserted
against that competitive software. The chart attached as Exhibit H
lists over 1400 patents owned by Microsoft in December 2001 that are
in Patent and Trademark Office classes that include operating
systems and middleware software. Additional Microsoft patents
covering operating systems and middleware may be in other classes.
If Microsoft were to bring suit on multiple patents, the accused
infringer would have to win against every patent to avoid an
injunction and damages. The odds of losing are so great that only
the most well financed competitive operating system or middleware
developer or vendor could consider fighting that battle. The result
would be the same downstream. If the competitive operating system or
middleware developer or vendor indemnified its downstream customers
(ISVs, IHVs, OEMs, and ultimate consumers), it would face the same
problem. If it did not indemnify the downstream customers, those
customers would face the problem directly. As a result, a threat of
suit by Microsoft could be enough to stop the making, using,
selling, or offering to sell competitive operating systems and
middleware at all levels in the development-distribution chain.
1. Microsoft Intends to Enforce Its Intellectual Property
Microsoft clearly declared its intent to enforce its
intellectual property rights against competitors by including the
exemption for infringement suits in Section III.I of the Proposed
Final Judgment and by arguing that the non-settling states were
seeking to confiscate its intellectual property. See, Defendant
Microsoft Corporation's Remedial Proposal at 2. (Dec. 12, 2001)
("Microsoft Remedial Proposal"). Similarly, Craig
Mundie, Microsoft's Senior Vice President of Advanced Strategies,
reportedly told the audience at an Open Source convention last July:
Well, at the end of the day, if you have a patent, you enforce
the patent if it's valuable to you. And so I think that Microsoft
and other people who have patents will ultimately decide to enforce
those patents.
Shared Source v. Open Source: Panel Discussion, O'Reilly
Network, Aug. 9, 2001, at http://linux.oreillynet.com/pub/a/linux/
2001/08/09/oscon panel.html (Ex. I attached hereto.). The threat of
Microsoft's patent enforcement has caused concern among the open-
source community, as reported last August. Galli, Peter,
"Microsoft Patents a Threat to Open Source," eWEEK, Aug.
28, 2001, at http://techupdate.zdnet.com/techupdate/stories/main/
0,14179,2808548.00.html ("Members of the open-source community
are becoming increasingly concerned by ongoing moves from Microsoft
Corp. to acquire a range of software patents that the company can
potentially use down the line to attack and try to restrict the
development and distribution of open-source software.") (Ex. J
attached hereto.).
2. The Intellectual Property Problem Can Be Fixed by Defining
Retaliation to Include Infringement Suits and Eliminating the
Exemptions
The Proposed Final Judgment should define
"retaliate" in Section VI of the Proposed Final
Judgment. While the term should remain broad to bar any type of
retaliation, it can specifically include bringing infringement
suits:
"Retaliate" means any type of retaliation and is
intended to be construed broadly. It specifically includes
threatening or bringing a suit for infringement of any intellectual
property rights owned or licensable by Microsoft.
In addition, the exemption sections should be modified to
prevent infringement suits against the protected groups for engaging
in conduct that the Proposed Final Judgment would prohibit Microsoft
from retaliating against:
For OEMs, Section III.A should be modified as
follows--after the sentence "Nothing in this provision
shall prohibit Microsoft from enforcing any provision of any license
with any OEM or any intellectual property right that is not
inconsistent with this Final Judgment," add the following:
Acts that would be inconsistent with this Final Judgment
include, but are not limited to, threatening or bringing suit for
infringement of any intellectual property rights that would restrict
the OEM from developing, distributing, promoting, using, selling, or
licensing any software that competes with Microsoft Platform
Software or any product or service that distributes or promotes any
Non-Microsoft Middleware.
For ISVs and IHVs, Section III.F.3 should be modified as
follows--after the sentence "Nothing in this section
shall prohibit Microsoft from enforcing any provision of any
agreement with any ISV or IHV, or any intellectual property right,
that is not inconsistent with this Final Judgment," add the
following:
Acts that would be inconsistent with this Final Judgment
include, but are not limited to, threatening or bringing suit for
infringement of any intellectual property rights that would restrict
the ISV or IHV from developing, using, distributing, promoting, or
supporting any software that competes with Microsoft Platform
Software or any software that runs on any software that competes
with Microsoft Platform Software, or exercising any of the options
or alternatives provided for under this Final Judgment.
Also, Section II1.1.2. should be deleted and replaced as
follows--the scope of any such license (and the intellectual
property rights licensed thereunder) need be no broader than is
necessary to ensure that an ISV, IHV, IAP, ICP or OEM is able to
exercise the options or alternatives expressly provided under this
Final Judgment, and to engage in conduct against which this Final
Judgment prohibits Microsoft from retaliating; To enable those third
parties to obtain those licenses, Section VIII of the Proposed Final
Judgment should be modified as follows:
Nothing in this Final Judgment is intended to confer upon any
other persons any rights or remedies of any nature whatsoever
hereunder or by reason of this Final Judgment, except as provided in
Section III.I.
3. The Proposed Relief Requiring Licensing of Microsoft's
Intellectual Property Is Proper and Consistent with Precedent
The proposed modifications would require Microsoft to license
certain of its intellectual property: that which potentially covers
competitive operating systems, middleware, or other software or
hardware and is necessary to ensure that the protected groups are
free to engage in the conduct against which the Proposed Final
Judgment would prohibit Microsoft from retaliating. Compulsory
licensing of intellectual property to remedy monopolization is
consistent with Supreme Court and Justice Department precedent,
including the Proposed Final Judgment as it now stands, even though
abuse of intellectual property rights was not found to be predatory
conduct.
To achieve the goal of restoring competitive conditions to the
marketplace discussed above, the court has "large
discretion" to fit the decree to the special needs of the
individual case." Ford Motor Co. v. United States, 405 U.S.
562, 573 (1972)
[[Page 29127]]
(quoting International Salt Co. v. United States, 332 U.S. 392, 401
(1947)). That discretion includes prohibiting acts that may
otherwise be valid, if necessary to correct the effects of the
violation. "Equity has power to eradicate the evils of a
condemned scheme by prohibition of the use of admittedly valid parts
of an invalid whole." United States v. Bausch & Lomb
Optical Co., 321 U.S. 707, 814 (1944). As the Court similarly
instructed in United States v. Paramount Pictures, Inc., 334 U.S.
131,148 (1948), to achieve effective relief a court can include
restrictions on otherwise lawful conduct: "[E]quity has the
power to uproot all parts of an illegal scheme--the valid as
well as the invalid--in order to rid the trade or commerce of
all taint of the conspiracy."
Compulsory licensing of patents was ordered to remedy
monopolization in, for example, United States v. United Shoe Mach.
Corp., 110 F. Supp. 295 (D. Mass. 1953), aff'd, 347 U.S. 521 (1954),
even though enforcement of the patents was not an alleged predatory
act. The court concluded that the defendant had not improperly
asserted its patents, but they were a barrier to entry into the
monopolized market. See 110 F. Supp. at 297,332-33. In
determining the remedy, the court's goals were not only to eliminate
specific predatory practices that had caused or would cause
monopolization, but also "to restore workable competition in
the market." Id. at 346-47. The court explained that
licensing of patents was proper as part of the remedy to reduce the
effects of the defendant's monopolization caused by non-patent
predatory business practices: Defendant is not being punished for
abusive practices respecting patents, for it engaged in none .... It
is being required to reduce the monopoly power it has, not as a
result of patents, but as a result of business practices. And
compulsory licensing, on a reasonable royalty basis, is in effect a
partial dissolution, on a non-confiscatory basis. Id. at 351.
Fifteen years later, the Supreme Court again concluded that the
relief granted was within the proper scope of relief for an
antitrust violation. United States v. United Shoe Mach. Corp., 391
U.S. 244, 251 (1968).
Similarly, the Justice Department has required compulsory
licensing of intellectual property as part of the remedy in proposed
final judgments in antitrust cases. One of the latest examples, and
perhaps the most pertinent, is this Proposed Final Judgment's
requirement that "Microsoft shall offer to license to ISVs,
IHVs .... and OEMs any intellectual property rights owned or
licensable by Microsoft that are required to exercise any of the
options or alternatives expressly provided to them under this Final
Judgment .... "(Proposed Final Judgment Section III.I.)
Indeed, the Competitive Impact Statement provides that some of those
provisions "are designed specifically to prevent Microsoft
from using its intellectual property rights to frustrate the
intended effectiveness of the Proposed Final Judgment's disclosure
provisions." Competitive Impact Statement at 49. The exemption
from retaliation by infringement suits, however, allows that
frustration. The issue, therefore, is not whether the remedy can
properly include compulsory licensing of Microsoft's intellectual
property. Instead, the issue is the scope of the licensing required.
As shown above, the scope of the proposed modifications to the
intellectual property provisions is reasonable and required to
remedy the monopolization and restore competition to the market. The
proposed modifications would not "result in... wholesale
confiscation of Microsoft's intellectual property," a
criticism that Microsoft wrongly asserted against the non-settling
states" proposed remedy. Microsoft Remedial Proposal at 2. It
would require only licensing that is necessary to prevent
frustration of the anti-retaliation provisions. Moreover, the
licenses could include royalties or other consideration on a
reasonable and non-discriminatory basis, as provided in Section
III.I. 1.
Nor would the proposed modifications be a significant
disincentive to innovation by Microsoft. Since the Proposed Final
Judgment would expire in five years (see Proposed Final Judgment,
Section V), the obligation to license would exist only for that
limited time period. Any future innovation by Microsoft also would
be free of this obligation after those five years. Any arguable
effect on Microsoft's incentives to innovate during those five years
would be limited and only to the extent necessary to provide
effective relief from Microsoft's monopolization.
In opposing the non-settling states" proposed relief,
Microsoft pointed to the Court of Appeals" comment that the
relief in this case "'should be tailored to fit the
wrong creating the occasion for the remedy."' Microsoft
Remedial Proposal at 5 (quoting Microsoft, 253 F.3d at 107).
Microsoft also relied upon this Court's statement that the
"scope of any proposed remedy must be carefully crafted so as
to ensure that the enjoin[ed] conduct falls within the penumbra of
behavior which was found to be anticompetitive." Microsoft
Remedial Proposal at 6 (quoting Sept. 8, 2001 Tr. at 8). Removing
the infringement suit exemption and defining retaliation to include
threatening or bringing suit for infringement of Microsoft's
intellectual property portfolio would fall well within that scope.
C. Conclusion Regarding Intellectual Property
The scope of the required intellectual property licensing under
the Proposed Final Judgment is far too narrow to remedy the
monopolization of, and restore competitive conditions to, the market
the courts held Microsoft monopolized--Intel-compatible
operating systems. The modifications to the scope proposed above
would be no broader than that which is necessary to allow the groups
protected under the Proposed Final Judgment to engage in the
specific conduct that the Proposed Final Judgment allows them to
engage in without fear of retaliation from Microsoft. As shown
above, unless the scope of the licensing is expanded, and the
exemptions for infringement suits removed, "the Government has
won a lawsuit and lost a cause." International Salt, 332 U.S.
at 401.
IV. COMMENTS TO SECTION III--PROHIBITED CONDUCT
A focus of any final judgment in this litigation must be to put
in place safeguards and protections against future actions by
Microsoft that may not fit the known pattern, but that will obtain a
familiar result--unlawful continuation of the Microsoft
monopoly. An important aspect of this focus is to make sure that the
participants in the marketplace are given a chance at viability in a
competitive marketplace. As worded, Section III does not provide the
safeguards and protections that are necessary. Prohibiting actual
retaliatory conduct by Microsoft is simply insufficient to obtain
the goals of the final judgment.
A. Section III.A
The Department of Justice set forth a clear intent for the
impact of Section III.A. As stated in the Competitive Impact
Statement, the perceived effect of Section III.A is to
"ensure[] that OEMs have the contractual and economic freedom
to make decisions about distributing and supporting non-Microsoft
software products that have the potential to weaken Microsoft's
personal computer operating system monopoly without fear of coercion
or retaliation by Microsoft." Competitive Impact Statement at
9.
Unfortunately, Section III.A fails to protect the ability of
OEMs to make business choices in a non-coercive atmosphere, for
reasons in addition to those discussed above concerning intellectual
property.
The conduct that is prohibited in Section III.A is actual
retaliatory action by Microsoft against OEMs for, inter alia, dual
booting personal computers with other operating systems. More
specifically, Section III.A provides that "Microsoft shall not
retaliate against an OEM by altering Microsoft's commercial
relations with that OEM, or by withholding newly introduced forms of
non-monetary Consideration (including but not limited to new
versions of existing forms of non-monetary Consideration) from that
OEM, because it is known to Microsoft that the OEM is or is
contemplating .... "Proposed Final Judgment, Section III.A. As
worded, the only point at which injunctive relief is available is
after an OEM can show actual retaliation.
The problem with prohibiting only action "after the
fact," is that it provides for enforcement only after
Microsoft has taken negative action against an OEM. It is no secret
that Microsoft is an important business partner to may OEMs and even
the potential or implication of the change in an OEMs business
relationship with an OEM can be sufficient to prevent action.
Section III.A does not remove the business threat that will prevent
OEMs from "crossing" Microsoft.
Therefore, the parameters of the prohibitions on Microsoft's
conduct need to be extended so that enforcement is not triggered
only after an OEM has been harmed. By then, it may be too late and
an OEM may find itself competitively or financially crippled by an
impairment in its relationship with Microsoft. Moreover, by the time
the retaliation is remedied, the OEM may even be out of the market.
Ideally, Microsoft must be prohibited from maintaining the
intimidating business environment that it has created--an
environment that inhibits OEMs from the free exercise of competitive
decision making. The language of the Proposed Final Judgment
[[Page 29128]]
ignores what the Competitive Impact Statement and the Court of
Appeals have acknowledged.
Thus, the actions prohibited under Section III.A must encompass
a range of activities and not just after the fact retaliation in
order to ensure that Microsoft does not continue to maintain
unlawfully its monopoly. A possible modification of Section III.A is
as follows: A. Microsoft shall not retaliate against an OEM by
threatening to or altering Microsoft's commercial relations with
that OEM, or by threatening to or withholding newly introduced forms
of non-monetary Consideration (including but not limited to new
versions of existing forms of non-monetary Consideration) from that
OEM, because it is known to Microsoft that the OEM is or is
contemplating: ....
B. Section III.D
An underlying premise of the Proposed Final Judgment is that if
middleware software developers are able to develop and market
middleware that can be used on either Microsoft or non-Microsoft
operating systems or "that would have assisted competing
operating systems in gaining access to applications and other needed
complements" (Competitive Impact Statement at 9), then the
competitive harm to the operating system market caused by
Microsoft's unlawful maintenance of its monopoly will be remedied.
With respect to Section III.D, the Competitive Impact Statement
indicates an intent by the Department of Justice to: ensure[ ] that
developers of competing middleware--software that over time
could begin to erode Microsoft's Operating System
monopoly--will have full access to the same interfaces and
related information as Microsoft Middleware has to interoperate with
Windows Operating Products. Microsoft will not be able to hamper the
development or operation of potentially threatening software by
withholding interface information or permitting its own products to
use hidden or undisclosed interfaces.
Competitive Impact Statement at 12.
The Proposed Final Judgment makes an effort to provide the
interface and related technical information
"transparency" to the entities that the Department of
Justice believes will need access to Microsoft software in order to
develop software compatible with Microsoft and non-Microsoft
operating systems. While the named entities include ISVs, however,
they do not specifically include entities that provide non-Microsoft
Operating Systems. An argument can be made that the definition for
"ISVs" appears to be broad enough to include providers
of non-Microsoft operating systems because under the definition
"ISV" means an entity other than Microsoft engaged in
the development or marketing of software products." Proposed
Final Judgment, Section VI.I. The question and possible loophole
remains, however, that Microsoft might argue that the transparency
extends only to entities that develop middleware, but not to
entities such as Red Hat--entities that provide non-Microsoft
operating systems. In order to ensure that the protections are as
inclusive as possible, the definition of "Independent Software
Vendor" can be supplemented to include specifically entities
that compete in the operating system market. Thus, under the Section
VI--Definitions--"ISV" would be modified to
mean an entity other than Microsoft that is engaged in the
development, marketing or providing of software products or
services, including Operating System Providers.
C. Section III.F
According to the Competitive Impact Statement, Section III.F
"redresses conduct by Microsoft specifically found unlawful by
the District Court and the Court of Appeals." By addressing
only actual retaliatory conduct, however, Section III.F suffers from
the same infirmity as Section III.A, and may provide injunctive
relief only after Microsoft has taken action that will harm a
business entity. Microsoft must not be prohibited only from actual
retaliation, but must also be prohibited from intimidating,
threatening to withhold business from, coercing or retaliating
against any ISV or IHV because of activities that will further
competing middleware or operating systems. See comment on Section
III.A, supra.
D. Section III.J
As worded, Section III.J provides exceptions to Microsoft's
disclosure obligations that have a serious potential to defeat the
intent of the Proposed Final Judgment. The Competitive Impact
Statement makes it clear that the exception to Microsoft's
disclosure obligations is meant to be a "narrow exception
limited to specific end-user implementations of security items such
as actual keys, authorization tokens or enforcement criteria, the
disclosure of which would compromise the security of a
'particular installation or group of installations" of
the listed security features." Competitive Impact Statement at
18. The nature of security, however, requires that Section III.J
should be modified so that there is a detailed specification of what
Microsoft must provide under the mandates of the Proposed Final
Judgment, rather than what it is excluded from providing within the
context of security. Because of the potentially wide-ranging
negative impact of this Section, Red Hat believes some background on
the nature of security is required.
All security experts agree that there is no such thing as
perfect security, and indeed this pessimistic view extends to the
field of computer security. In his book "Secrets and Lies:
Digital Security in a Networked World", noted security expert
Bruce Schneier explains "modem systems have so many components
and connections--some of them not even known by the
systems" designers, implementers, or users--that
insecurities always remain. No system is perfect." If no
computer system can be made perfectly secure, then any computer
system can potentially suffer a security compromise. Moreover, it is
not knowable whether the security compromise will be a result of
people having access to information about a security weakness (which
they can exploit) or people not having access to such information
(which allows others to exploit something one might otherwise be
able to defend against). Thus, on the one hand, one could argue that
divulging any information whatsoever could lead to a security
compromise, but on the other hand, that not divulging any
information of any kind could also lead to a security compromise.
Such is the nature of computer security (indeed, all security).
One of the main issues in the antitrust case against Microsoft
is the fact that Microsoft has controlled information about and
permission to use system APIs, Documentation, licenses, and
Communications Protocols to discriminate against or retaliate
against one or more parties (or classes of parties), and has done so
strategically to protect, extend, and indeed abuse its monopoly
powers. Certainly any valid remedy for this anti-trust case would
enjoin Microsoft from such conduct in the future.
While the Proposed Final Judgment attempts to set guidelines
under which Microsoft would be required to document, disclose, or
license to third parties portions of APIs or Documentation or
portions or layers of Communications Protocols, Section III.J(1)
carves out a specific exemption: the case where the disclosure of
such would compromise the security of anti-piracy, anti-virus,
software licensing, digital fights management, encryption or
authentication systems, including without limitation, keys,
authorization tokens or enforcement criteria. While this may sound
like a fair and reasonable exemption, it is not because Microsoft
could legitimately argue that any requirement to document, disclose,
or license anything to third parties could, in theory, result in a
security compromise of one or more of these systems. Such is the
nature of computer security.
Thus, Section III.J(1) grants Microsoft legal protection for the
very behavior that this Proposed Final Judgment was designed to
remedy.
As noted, the Competitive Impact Statement interprets Section
III.J(1) as being an extremely limited exemption, essentially only
extending to specific keys and security tokens, not to technologies,
interfaces or interoperability. This interpretation, however, is not
carried over to the language of the Proposed Final Judgment, which
gives almost blanket permission to Microsoft to invoke the
exemption. An appropriate modification of Section
III.J(1)--other than removing it entirely--is as follows:
No provision of this Final Judgment shall:
1. Require Microsoft to disclose to any specific end-user
implementations of security items such as actual end-user keys,
authorization tokens, or enforcement criteria, the disclosure of
which would compromise the security of a particular installation or
group of installations of the security item. Notwithstanding the
foregoing, if any such implementation of a security item requires a
specific end-user key, authorization token, enforcement criteria, or
analogous information to fully and equitably interoperate with
Microsoft Platform Software, Microsoft Middleware, APIs,
Communication Protocols, Microsoft applications software, or
Microsoft network services (such as e-commerce or internet
services), then Microsoft must either (a) disclose such specific
end-user key, authorization token, enforcement criteria, or
[[Page 29129]]
analogous information, (b) provide alternative end-user keys,
authorization tokens, enforcement criteria, or analogous information
that enable third parties to fully and equitably interoperate with
those software, products, or services, or (c) disclose how to make
such end-user keys, authorization tokens, enforcement criteria, or
analogous information that will fully and equitably interoperate
with such software, products, or services; Microsoft must disclose
or provide such keys, authorization tokens, enforcement criteria, or
analogous information to third parties upon request and in a
nondiscriminatory manner. In no event, however, shall Microsoft
reserve to itself any functionality for such keys, authorization
tokens, enforcement criteria, or analogous information.
E. Section III.J(2)
Section III.J(2) presents another loophole that Microsoft can
manipulate to avoid disclosure of necessary information. Under the
provisions of Section III.J(2), Microsoft is permitted to require a
certification of the "authenticity and viability" of any
business seeking a license of "any API, Documentation or
Communications Protocol related to anti-piracy systems, anti-virus
technologies, license enforcement mechanisms, authentication/
authorization security, or third party intellectual property
protection mechanisms of any Microsoft Product." Although the
certification is required to be pursuant to "reasonable and
objective standards," those standards are established by
Microsoft and there is no independent third party approval either of
the development or of the implementation of those standards. The
Competitive Impact Statements indicates that: the requirements of
this subsection cannot be used as a pretext for denying disclosure
or licensing, but instead are limited to the narrowest scope of what
is necessary and reasonable, and are focused on screening out only
individuals or firms that should not have access to or use of the
specified security-related information either because they have a
history of engaging in unlawful conduct related to computer software
(e.g., they have been found to have engaged in a series of willful
violations of intellectual property rights or of one more violations
consisting of conduct such as counterfeiting), do not have any
legitimate basis for needing the information, or are using the
information in a way that threatens the proper operation and
integrity of the systems and mechanisms to which they relate.
Competitive Impact Statement at 19. This will not be the case if
there is no safeguard on the development or implementation of the
standards. For example, Microsoft may decide to include financial or
organizational requirements in order for a (1) an entity to be
considered a "business" and (2) an entity to be
considered an "authentic and "viable" business.
Microsoft may decide to require that, in order for an entity to be a
"business," it must operate in the market in a currently
"traditional" manner, such as Microsoft operates, but
not as many open source companies operate. Will a company need to
undertake its own software development? Will a company need to own
and license its software? Unless Microsoft is held to certain
independent guidelines or policing, this provision may gut the
intent of the Proposed Final Judgment.
The potential for abuse with this provision is particular Feat
when considering the open source development community. Most open
source software is not developed or owned by a for-profit business
entity. It is the result of collaborative development, with software
code contributed by its author for the benefit of all. The
restrictive language of Section III.J(2) would expressly permit
Microsoft to deny access to such open source development projects.
COMMENTS TO VI--DEFINITIONS
A fair reading of the Proposed Final Judgment supports that the
protections extend to the direct participants in the market in which
Microsoft was found to have unlawfully maintained its
monopoly--the providers of competing operating systems. The
Proposed Final Judgment, however, needs to ensure that the
protections extend to all possible readings. It cannot be ignored
that the clear finding Upheld by the Court of Appeals is that
Microsoft unlawfully maintained its monopoly in the PC-compatible
operating system market. Thus, if there is any possibility that
Microsoft can find a loophole, that possible loophole should be
closed. It is in this vein that we recommend that the definitions
should be expanded to include providers of competing operating
systems--the participants in the market in which Microsoft
unlawfully has maintained its monopoly. Operating System Providers,
then, should be specifically included within the "ISV"
definition--as recommended, supra. Furthermore, a proposed
definition for Operating System Providers follows:
"OSP" means an operating system provider that
provides a non-Microsoft software code that, inter alia, (i)
controls the allocation and usage of hardware resources (such as the
microprocessor and various peripheral devices) of a Personal
Computer, (ii) provides a platform for developing applications by
exposing functionality to ISVs through APIs, and (iii) supplies a
user interface that enables users to access functionality of the
operating system and in which they can run applications.
VI. COMMENTS TO SECTION IV--COMPLIANCE AND ENFORCEMENT
PROCEDURES
A. Special Master
By not providing for the appointment of a Special Master to
ensure enforcement of the Proposed Final Judgment, the Justice
Department has left the injunctive relief toothless. There is
absolutely nothing in the Proposed Final Judgment that provides a
speedy vehicle for the resolution of complaints from an independent
third party, such as Red Hat, that Microsoft has violated the
Proposed Final Judgment. As suggested by the Litigating States in
their proposed final judgment, the appointment of a Special Master
could be made pursuant to Rule 53 of the Federal Rules of Civil
Procedure.
B. Section IV.B--Appointment of a Technical Committee
The Technical Committee ("TC") as constituted and
mandated has no real authority or ability to address quickly and
thoroughly third-party complaints regarding Microsoft's
compliance with the Proposed Final Judgment. Moreover, it is
structured as a committee of compromise and not enforcement. One of
the members of the TC is to be selected by Microsoft, one of the
members is selected by the plaintiffs and the third member is a
joint selection. All of the members are to be "experts in
software design and programming." This narrowly restricts the
scope of the TC to technical interpretations. It takes out of the
realm of the TC's expertise issues relating to business practices
and acts that may have a competitive impact on the market.
The TC should be supplemented with or assisted by a Special
Master with the authority to order compliance with the Proposed
Final Judgment. The Special Master will be able to address
complaints relating to business practices as well as complaints
relating to software disclosure or use.
C. Section IV.D--Voluntary Dispute Resolution
Section D sets forth the actual procedures for the Technical
Committee to follow in the event that a third party makes a
complaint regarding Microsoft's compliance with the Proposed Final
Judgment. The procedures are general and the intent is to resolve
complaints, not handle issues of enforcement. The Justice Department
states that "It]his dispute resolution function reflects the
recognition that the market will benefit from rapid, consensual
resolution of issues, where possible. It complements, but does not
supplant, Plaintiffs" other methods of enforcement. If the TC
concludes that a complaint is meritorious, the TC will so advise
Plaintiffs and Microsoft and propose a remedy." Competitive
Impact Statement at 20. Despite this statement, the provision does
nothing to ensure a resolution of issues. There is no requirement
that Microsoft accept the remedy and no sanctions if Microsoft does
not accept the remedy. In effect, there appears to be no ultimate
control on Microsoft's conduct except for a separate action or
convincing the Justice Department to seek an order to enforce the
Proposed Final Judgment. This dispute resolution provision should be
removed from the TC. The Special Master should administer the
process for resolving third party complaints and have the authority
to develop and administer a speedy process for resolving complaints
and to order compliance if Microsoft is found to have violated the
Proposed Final Judgment.
Respectfully submitted,
PATRICIA G. BUTLER
DANIELLE R. ODDO
Howrey Simon Arnold & White, LLP 1299 Pennsylvania Ave., NW
Washington, DC 20004
(202) 783-0800
KENNETH M. FRANKEL
Finnegan, Henderson, Farabow, Garrett &
Dunner, L.L.P.
1300 1 Street, NW
Washington, DC 20005
(202) 408-4000
Attorneys for non-party
Red Hat, Inc.
Exhibit A
[[Page 29130]]
Microsoft Executive Says Linux Threatens
Innovation (Update1)
Related News
2/14/01 4:57 PM
Source: Bloomberg News
Redmond, Washington, Feb. 14 (Bloomberg)--Microsoft Corp.'s
Windows operating-system chief, Jim Allchin, says that freely
distributed software code such as rival Linux could stifle
innovation and that legislators need to understand the threat.
The result will be the demise of both intellectual property
rights and the incentive to spend on research and development, he
said yesterday, after the company previewed its latest version of
Windows. Microsoft has told U.S. lawmakers of its concern while
discussing protection of intellectual property rights.
Linux is developed in a so-called open-source environment in
which the software code generally isn't owned by any one company.
That, as well as programs such as music-sharing software from
Napster Inc., means the world's largest software maker has to do a
better job of talking to policymakers, he said.
"Open source is an intellectual-property destroyer,"
Allchin said. "I can't imagine something that could be worse
than this for the software business and the intellectual-property
business." Microsoft distributes some of its programs without
charge to customers, although it generally doesn't release its
programming code, and it retains the ownership rights to that code.
Linux is the most widely known open-source product, though other
programs including the popular Apache system for Web server
computers also are developed the same way.
$135 million investment in software maker Corel Corp. last
October is being reviewed by the U.S. Justice Department. Corel said
last month it willl drop efforts to develop the Linux operating
system, though it will continue to make Linux applications. Corel
said it hadn't consulted with Microsoft before making that decision.
Brian Behlendorf, founder of open-source company CollabNet Inc.,
said most companies that use the open-source development model do
retain the rights to some of their intellectual property. "I
think Microsoft is trying to paint the open-source community as
being fascist; that all software have has to be free, or none of it
can be," said Behlendorf, whose company helps businesses run
their own open-source projects.
Allchin said he's concerned that the open-source business model
could stifle initiative in the computer industry.
Tin an American, I believe in the American Way," he said.
"I worry if the government encourages open source, and I don't
think we've done enough education of policy makers to understand the
threat."
Linux Adoption
Some leading computer companies including International Business
Machines Corp. and Hewlett-Packard Co. are selling Linux- based
products and working on open-source projects, noted Jeremy Allison,
a VA Linux Systems Inc. software developer. He's also a leader in a
project develop an open-source file and printer server program.
Microsoft only began significant lobbying efforts in the last few
years. The Redmond, Washington-based company also talks to lawmakers
about issues including the need for more visas for people with
computer skills and computer privacy and security.
Linux is the fastest-growing operating system program for
running server computers, according to research firm IDC. It
accounted for 27 percent of unit shipments of server operating
systems in 2000. Microsoft's Windows was the most popular on that
basis, with 41 percent.
Despite Linux's success in some markets, Allchin says he isn't
concerned about sales competition from the product. Microsoft
provides support to change and develop products based on its
operating system software that Linux companies don't, he said.
Companies that use Linux in their products then must pay someone
else for support, he said.
"We can build a better product than Linux," he said.
"There is always something enamoring about thinking you can
get something for free."
Contact usCorrectionsHow to
advertiseSupportCNET Jobs
Copyright 1998-2001, Bloomberg L.P. All Rights Reserved.
The information herein was obtained from sources which Bloomberg
L.P. and its suppliers believe reliable, but they do not guarantee
its accuracy. Neither the information, nor any opinion expressed,
constitutes a solicitation of the purchase or sale of any securities
or commodities.
Quotes are delayed 15 minutes for Nasda??, 20 minutes otherwise
(except on designated real-time quote page).
Questions? Comments? Contact us at
investor @ news.com
Copyright @ 1995-2002 CNET Networks,
Inc. All rights reserved. Privacy policy
Exhibit B
Microsoft CEO takes launch break with the Sun-Times
June 1, 2001
It's hard to find a computer that doesn't run a Microsoft
product, particularly in Chicago. Microsoft's Chicago-based Midwest
district office, which covers Illinois, Indiana and Wisconsin, is
the tech giant's biggest moneymaker in the country, with more than
500 customers generating $500 million in revenue annually for
Microsoft.
It should come as no surprise, then, that the Seattle-area
company sent its No. 2 man, CEO Steve Ballmer, for the official
launch of its new Office XP software Thursday at the United Center
(yes, Bill Gates went to New York).
Between appointments in a whirlwind visit to Chicago--which
included a lunch with 100 local companies and back-to-back-to-back
media interviews-Ballmer sat down with Chicago Sun-Times reporter
Dave Newbart to discuss the local tech economy, Microsoft's
dominance in the market, the federal antitrust case, Microsoft's new
licensing requirements and the open-source movement (in effect, free
software on the Web, which he called a "cancer").
Q: Boeing recently moved to Chicago. Why doesn't Microsoft
relocate here?
A: [laughs] We are quite comfortable with our headquarters in
Seattle. Chicago is a great city. I'm from Detroit. I like it here.
But we have 20,000 people comfortably ensconced in Seattle.
Q: More seriously, in Chicago we do seem to have an inferiority
complex about our place in the tech world. Rankings frequently put
us toward the bottom among major cities in terms of our tech
presence. How do you view the state of our tech economy?
A: I think there is a lot of great stuff going on in Chicago.
There are a lot of innovative users in the Chicago area, which is
exciting. We have a lot of great partners. I'll be on stage with a
company called Genesis [Consulting], which I'm very excited about.
We have a local partner named Calypso [Systems].
We literally have dozens of partners doing very innovative work
with customers here. I don't know what the national surveys say.
Other than Silicon Valley, I think it's hard to point to any one
place and say, "That's where it's all happening."
Q: Microsoft's market dominance and financial position are
stronger than ever, despite the government's antitrust case and the
weakening economy. Has the government's case had any impact on the
way you do business?
A: There has been no legal ruling put into effect. We have and
continue to innovate within the spirit and letter of the law. We
continue to do what we have always done, because we think it's 100
percent correct. We add new capabilities to our product, we keep our
prices low, we try to offer our customers better and better values.
The laws were designed to encourage that and protect that behavior,
because it's good for consumers.
Q: Microsoft has expanded to a number of markets, especially
with the development of the Xbox and a smart phone. What's next, and
is there any area that you don't see yourself entering?
A: We have a lot on our plate. We have a big dream about what
XML (a markup language for documents containing structured
information, such as words and graphics) can do for the world. The
way software gets built will change over the years, which we are
pursuing with our .Net platform. But we are hardly trying to do
everything. I won't sit here and try to rule out that we might do
other things in the future, but we have a few clear priorities.
Q: The new Windows XP software, I've seen a trial version,
contains a number of free products--media player, a CD burner,
an Internet firewall. Could that bundling hurt smaller competitors
who make stand-alone software? Isn't this kind of bundling that you
offered with Windows and Internet Explorer?
A: Just as with Internet Explorer, our job is to offer customers
what they want. We are trying to provide more functionality at the
same or better prices every day. [A]11 the new capabilities of
Windows XP are open to software developers to add onto, to build
value around. I think Windows XP ought to be a real boon to the
kinds of innovations that come from smaller companies. The inclusion
of Internet Explorer with Windows has been absolutely great ... for
innovation in the software industry. Whether it was great for
Netscape is a different question.
Q: Independent analyses of your new licensing policy indicate
that unless a
[[Page 29131]]
company upgrades its software every two years, it could face costs
from one-third to double what they are paying now to upgrade. What
do you think of the criticism that says Microsoft is forcing
companies to upgrade to Windows XP by October or face much higher
costs later?
A: We are trying to simplify our licensing practices in many
ways. We are clearly providing some incentive to upgrade more
regularly. Your better customers get a better price. An analysis
we've done, 80 percent of our customers are going to see the same or
lesser prices, and 20 percent are going to see very small to
somewhat larger increases.
Q: The new software also allows a user to install it only twice.
You have recently cracked down on corporate piracy and large-scale
pirating operations. Are home users next?
A: Intellectual property should be protected. That's the only
way that a newspaper or a software company or record company or
artist can get a fair return on their work. Our goal is to try to
educate people on what it means to protect intellectual property and
pay for it properly. We are trying to help customers understand when
they are crossing the line by putting some bumps in the road so they
can't do the wrong thing.
Q: Do you view Linux and the open-source movement as a threat to
Microsoft?
A: Yeah. It's good competition. It will force us to be
innovative. It will force us to justify the prices and value that we
deliver. And that's only healthy. The only thing we have a problem
with is when the government funds open-source work. Government
funding should be for work that is available to everybody. Open
source is not available to commercial companies. The way the license
is written, if you use any open-source software, you have to make
the rest of your software open source. If the government wants to
put something in the public domain, it should. Linux is not in the
public domain. Linux is a cancer that attaches itself in an
intellectual property sense to everything it touches. That's the way
that the license works.
Q: You've been on this job [as CEO] almost 18 months. What has
it been like replacing Bill Gates?
A: [I]n a weird and strange way I probably feel more pressure
now, no reason I should, but I feel a little more pressure,
responsibility. The great thing is we get a chance to do two things.
Bill gets a chance to put the highest possible percentage of time
into our strategy. My particular capability and focus are really
about building a management team, the business processes, etc. Bill
and I are going to be around for a lot of years, but we are not
going to be around forever. In some senses I'll put a little more
time and energy into setting us up so the business is a business
that doesn't depend on one guy, even a guy who is as talented as
Bill Gates.
Exhibit C
Why Microsoft is wary of open source
By Joe Wilcox and Stephen Shankland
Staff Writers, CNET News.com
June 18, 2001, 11:00 AM PT
There's more to Microsoft's recent attacks on the open-source
movement than mere rhetoric: Linux's popularity could hinder the
software giant in its quest to gain control of a server market
that's crucial to its long-term goals.
Recent public statements by Microsoft executives have cast Linux
and the open-source philosophy that underlies it as, at the minimum,
bad for competition, and, at worst, a "cancer" to
everything it touches.
Behind the war of words, analysts say, is evidence that
Microsoft is increasingly concerned about Linux and its growing
popularity. The Unix-like operating system "has clearly
emerged as the spoiler that will prevent Microsoft from achieving a
dominant position" in the worldwide server operating-system
market, IDC analyst AI Gillen concludes in a forthcoming report.
While Microsoft's overall operating-system market leadership is
by no means in jeopardy, Linux's continued gains make it harder for
Microsoft to further its core plan for the future, Microsoft. Net.
The plan is a software-as-a-service initiative similar to plans from
competitors including Hewlett-Packard, IBM and Sun Microsystems.
One of the cornerstones of .Net is HailStorm, which is built
around the company's Passport authentication service.
Microsoft.Net and HailStorm make use of XML (Extensible Markup
Language) to pass information between computers based on Windows and
computers using other operating systems. However, many .Net
components-such as Passport and server-based software including the
company's SQL Server database software and BizTalk e-commerce
server-only on Windows. "The infrastructure to operate XML Web
services relies on the Windows operating system and the .Net
Enterprise Servers," Microsoft's marketing literature states.
Microsoft needs to control the server operating-system market if
HailStorm and all the .Net services and subscriptions associated
with it are to succeed, analysts say.
"HailStorm itself by definition needs Microsoft-provided
or -partnered services, which means Microsoft's or its
partners" servers," said Gartner analyst David Smith.
"In that sense, Linux is a threat to .Net."
Microsoft is expected to spend hundreds of millions of dollars
marketing and developing .Net. Virtually every product from the
company ties in to the plan at some point.
While Linux hasn't displaced Windows, it has made serious
inroads. Linux accounted for 27 percent of new worldwide operating-
system licenses in 2000, and Microsoft captured 41 percent of new
licenses, according to IDC.
Overall, Gartner estimates Linux runs on nearly 9 percent of
U.S. servers shipped in the third quarter of 2000, with worldwide
projected Linux server sales of nearly $2.5 billion in 2001 and
about $9 billion in 2005.
But Linux continues to gain credibility, particularly because of
the massive support provided by IBM, which has pledged to spend $1
billion on Linux development.
In attacking Linux and open source, Microsoft finds itself
competing "not against another company, but against a
grassroots movement," said Paul Dain, director of application
development at Emeryville, Calif.-based Wirestone, a technology
services company.
"My guess is that they are now under pressure to defend
themselves against the criticism from the open-source and free-
software communities--whether it's justified or not--as
well as companies like IBM that are aggressively marketing
Linux," Dain said. "In order to combat that, they have
to use strong language to get their point across."
Increasing Linux use makes it more difficult to spread the .Net
message. That, in turn, has led to a string of comments from
Microsoft executives publicly denouncing Linux and open source.
"Linux is a cancer that attaches itself in an intellectual
property sense to everything it touches," Chief Executive
Steve Ballmer said in an interview with the Chicago Sun-Times.
Despite Microsoft's criticism, the company still uses open-
source code in some products. Servers for the company's Hotmail e-
mail service use FreeBSD for some DNS (domain name server)
functions.
"This is a legacy issue that came from Hotmail when we
originally got it," said Microsoft spokesman Rick Miller.
"We haven't gone out, purchased and put into place FreeBSD. It
came when we purchased other companies. We didn't build any of our
infrastructure on FreeBSD. We build it on Windows."
In the mid 1980s, Microsoft licensed its TCP/IP (transmission
control protocol/Internet protocol) networking stack from another
company that used open-source code. "You could say it had its
genesis in FreeBSD, but it's now absolutely Windows," Miller
said. The code first appeared in Windows NT and also was used in
Windows 2000.
Critical of change
Microsoft has also criticized the General Public License (GPL)
that governs the heart of Linux. Under this license, changes to the
Linux core, or kernel, must also be governed by the GPL. The license
means that if a company changes the kernel, it must publish the
changes and can't keep them proprietary if it plans to distribute
the code externally.
Other open-source projects, such as FreeBSD, allow changes that
are kept proprietary. That provision was one reason FreeBSD proved
appealing to Wind River Systems, the dominant seller of operating
systems for non-PC "embedded" computing devices such as
network routers. Microsoft's open-source attacks come at a time when
the company has been putting the pricing squeeze on customers. In
early May, Microsoft revamped software licensing, raising upgrades
between 33 percent and 107 percent, according to Gartner. A large
percentage of Microsoft business customers could in fact be
compelled to upgrade to Office XP before Oct. 1 or pay a heftier
purchase price later on.
The action "will encourage--'force" may
be a more accurate term--customers to upgrade much sooner than
they had otherwise planned," Gillen noted in the IDC report.
"Once the honeymoon period runs out in October 2001, the only
way to 'upgrade" from a product that is not considered
to be current technology is to buy a brand-new full
license."'
This could make open-source Linux's GPL more attractive to some
customers feeling
[[Page 29132]]
trapped by the price hike, Gillen said. "Offering this form of
"upgrade protection" may motivate some users to
seriously consider alternatives to Microsoft technology."
Ray Bailey, information services manager at The Bergquist
Company, said a recent meeting with Microsoft changed the technology
direction of his company, which manufactures electronic components
and other goods.
"Our IS team agreed that, due to Microsoft's changing of
the licensing rules and the manner in which they have given us less-
than-adequate time to process those changes, we are seriously
looking at other platforms," he said. "Linux is a strong
contender for our next server because of the low-cost nature of the
licensing."
Internally, Microsoft seems somewhat torn on how to approach the
open-source movement. While the company denounces the move toward
free software, it does recognize at least some of the value of open-
source development.
"Microsoft views open source as a competitor, but it's
hard to treat it as a competitor," Gartner's Smith said.
"So they have to attack basic tenets, mentality, way of life
and thought processes." Since last year, Microsoft has made
available to hundreds of its larger customers copies of its closely
guarded Windows source code. The company hopes its best customers
can help it improve Windows.
Microsoft has been touting plans to broaden Windows source-code
access to business partners in an initiative it calls its
"shared-source philosophy."
In particular, Microsoft wants to emulate the spirit of
cooperation that has spawned groups of volunteer Linux programmers.
"Having a sense of community is a good thing. It's one thing
we've watched with interest," Craig Mundie, senior vice
president of advanced strategies at Microsoft, said in a recent
interview. "The more of that we can foster in our community,
the better."
Building a better community
Microsoft hopes to imbue its programmer network with some of
this community spirit, Mundie said. "The Microsoft Developer
Network hasn't been one where there was a lot of dialogue between
(developers) and with Microsoft developers."
Though Microsoft will be expanding how it engages directly with
those who see its source code, the company isn't going to extend the
right granted to many members of the open-source community-the power
to change the software. People may submit bug fixes, but
"customers aren't trying to buy the rights to produce
derivatives," Mundie said. "In general, we're going to
control that reintegration. We worry a lot about uniformity and
avoiding fragmentation."
But how far Microsoft is willing to go with open source appears
limited, said Smith, who noted that while attacking Linux, the
company promises to support the Unix variant through .Net. It's
"a nice PR story for Microsoft to talk about the possibilities
about .Net on Linux," he said. "It is true that Linux
can participate in those .Net services, but don't expect Microsoft
to provide any incentive or anything else that would make that
possible."
Dain said Microsoft's attacks on Linux and open source may in
the long run benefit technology buyers. "Personally, I think
the talk on both sides-Microsoft vs. open source--will end up
benefiting consumers in the workplace and at home. There definitely
is competition in the marketplace, and this battle simply proves the
point."
And while Microsoft may have the advantage in the consumer
market with Windows, it's still the underdog in the large-scale
business server market.
"To many people, including myself, implementing a
Microsoft solution is a much more cost-effective way to go than a
Sun or other high-end Unix/mainframe solution," Dain said.
Exhibit D
Microsoft license spurns open source
By Stephen Shankland
Staff Writer, CNET News.com
June 22, 2001, 12:05 PM PT
Microsoft lawyers have joined the company's campaign against
open-source software, restricting how developers may use what it
terms "viral software" in connection with Microsoft
programming tools.
The license of the second beta version of Microsoft's Mobile
Internet Toolkit--software used so programmers can create
server software to connect with handheld computers over the
Internet--prohibits customers from using the Microsoft software
in conjunction with "potentially viral software." (Read
an excerpt here)
In describing this category of software, Microsoft includes the
most common licenses used for publishing open-source software, such
as the Linux operating system. Licenses specifically excluded by
Microsoft include the General Public License, the Lesser General
Public License, the Mozilla Public License and the Sun Industry
Standards License.
While the provision in Microsoft's license isn't surprising,
Fenwick & West intellectual property attorney Dana Hayter said
the company could have picked a more neutral term, such as
"open software."
"The choice of the term says more about Microsoft's view
than the rest of it," Hayter said. "I think it's a
pejorative and misleading term. To suggest that open-source software
is somehow "vital" is to confuse harm to your
customers" machines and data with harm to Microsoft's
profits." Microsoft representatives weren't immediately
available for comment.
The license provision, posted Thursday at Linux Today, is the
latest step in an increasingly vocal campaign by Microsoft Chairman
Bill Gates, Senior Vice President Craig Mundie and Chief Executive
Steve Ballmer to disparage open-source software.
The campaign, in which the executives have compared open-source
software to viruses and cancer, comes at a time when some observers
believe Microsoft is worried that Linux--the best-known open-
source project--will undermine the Microsoft. Net strategy for
joining desktop computer users with sophisticated Internet services.
Some open-source fans weren't happy with Microsoft's view of the
software world and its use of the term "viral software."
"The GPL is not a virus, it is a vaccine, an inoculation
against later abuse of your code by having someone, such as
Microsoft, take your hard work, incorporate it into a proprietary
product which is then extended and kept closed, marginalizing your
project in the process," said one comment at discussion site
Slashdot.
The Microsoft license seeks to prevent the possibility that a
program that links both to Microsoft and open-source software
components could force Microsoft to expose the now-secret source
code of its software, Hayter said.
"They're saying you cannot use (Microsoft) software in a
way that would create in Microsoft any obligations to do anything
with (Microsoft's) code, for example to make the source
public," Hayter said.
One example of a forbidden move would be to create software that
used prepackaged components called libraries from Microsoft as well
as a library covered by the GPL, Hayter said. Under the terms of the
GPL, software covered by it may be directly incorporated only into
other GPL software.
But a legally grayer area is creating software that merely calls
upon such libraries rather than incorporating the library code
directly. The Free Software Foundation created the LGPL license for
precisely such occasions; this license allows links to proprietary
software.
One example is the use of a library called
"readline" that lets people use arrow keys and perform
some other tasks when typing information into a computer, said
PostgreSQL database developer Bruce Momjian. Because PostgreSQL is
released under a BSD-style license that has different terms than the
GPL, GPL code may not be freely mixed within PostgreSQL.
"If we required the readline library, then the entire
PostgreSQL software would have to be GPL'd," Momjian said,
noting that programs such as the BSD-licensed libedit software offer
an alternative. "If you use (readline) in any application,
your entire application is GPL." Regardless of the legalities
involved, the provision in the license is significant, Hatyer said.
"This demonstrates they're taking open source
seriously."
Exhibit E
By Mike Ricciuti
Staff Writer, CNET News.com
November 5, 1998, 11:20 AM PT
Microsoft engineers see Linux as a "best-of-breed"
Unix that outperforms the company's own Windows NT operating system
and is a "credible alternative" to commercially
developed servers, according to an internal memo posted to the Web
this week.
The admission, contained in the second so-called Halloween memo
posted to the Web this week by programmer Eric Raymond, is counter
to the company's public statements downplaying the significance of
Linux, and its suggestions that Fortune 1,000 companies have little
interest in open source software (OSS).
The new memo also contains a single sentence suggesting that the
company may investigate the use of patents and copyrights to combat
Linux. Microsoft representatives were not immediately available to
comment further on the statement.
[[Page 29133]]
In a preface to the memo, Raymond states that the document had
been leaked to him by a former Microsoft employee. A Microsoft
representative today said the document appears to be authentic, and
said it is the second in "what could be a series" of
similar memos posted to the Web. Yesterday, a Microsoft
representative downplayed the significance of the initial memo.
According to the new memo, written by Microsoft engineer Vinod
Valloppillil, Linux "represents a best-of-breed Unix, that is
trusted in mission critical applications, and--due to its open
source code--has a long term credibility which exceeds many
other competitive OS's."
In what the memo's author considers the "worst case"
scenario for Microsoft, Linux will "provide a mechanism for
server OEMs to provide integrated, task-specific products and
completely bypass Microsoft revenues in this space."
Another new revelation contained in the new memo is that
Microsoft considers Linux to be a threat on both server and client
systems. "Long term, my simple experiments do indicate that
Linux has a chance at the desktop market..," the memo states.
The initial memo only cited the server market as a competitive
battleground between Linux and Windows NT, now renamed Windows 2000.
The first memo, posted to the Web over the weekend, showed that
Microsoft executives fear that the growing popularity of Linux and
other open source software poses a direct threat to the company's
revenue stream, and suggests the company could respond by modifying
Internet protocols to become proprietary technologies that tie
consumers and developers to Microsoft products.
In the new memo, some of the reasons for the company's fears are
more clearly defined. The memo states:
. "Most of the primary apps that people require when they
move to Linux are already available for free. This includes Web
servers, POP clients, mail servers, text editors, etc."
. "An advanced Win32 GUI user would have a short learning
cycle to become productive [under Linux]."
. "I previously had [Internet Explorer and Windows NT] on
the same box and by comparison the combination of Linux /[Netscape
Navigator] ran at least 30 to 40 percent faster when rendering
simple HTML + graphics."
. "Linux's (real and perceived) virtues over Windows NT
include: Customization. Availability/Reliability. Scalability/
Performance. Interoperability." The author of the memo also
writes that he believes consumers "love" Linux.
Exhibit F
Microsoft sues Linux start-up over name
By Joe Wilcox and David Becker
Staff Writers, CNET News.com
December 20, 2001,3:50 PM PT
Microsoft asked a court on Thursday to stop a Linux start-up
from using a name the software giant contends infringes on the
Windows trademark.
The Redmond, Wash.-based software giant filed a motion with the
U.S. Court for the Western District of Washington against Lindows,
which is developing a version of the Linux operating system that
will run popular applications written for Microsoft's Windows OS.
Microsoft contends the company, which plans to formally release
its product next year, purposely is trying to confuse Lindows with
Windows. The suit asks the court to order the start-up to stop using
the Lindows name and also seeks unspecified monetary damages.
"We're not asking the court to stop the company from
making their products," said Microsoft spokesman Jon
Murchinson. "What we're saying is they should not use a name
that could confuse the public and infringe on our valuable
trademark."
Lindows is based on the Wine project, an open-source effort to
mimic the commands that Windows programs use. The San Diego-based
Lindows company was launched earlier this year by Michael Robertson,
former CEO of digital music site MP3.com.
Robertson characterized the move as another attempt by Microsoft
to thwart a viable threat to its Windows empire.
"If they're alleging that people are going to be confusing
Microsoft Corp. with Lindows.com, I think there's zero potential of
that happening," he said. "If people are confused, just
remember that we're not the convicted monopolist."
Murchinson said Microsoft considered legal action a last resort.
"Clearly we prefer to work with them to resolve this
problem voluntarily. Their product name infringes on our
trademark," Murchinson said. "We hope they will work
with us to resolve this problem without the need for legal
action." Robertson said he had heard from nobody at Microsoft
regarding the name dispute. "They
Microsoft has been involved in an increasingly fractious war of
words with Linux supporters this year, with Microsoft executives
castigating the open-source distribution model behind Linux as a
sure road to commercial failure and on blight for software
development. Emmett Stanton, an attorney at Palo Alto, Calif.-based
Fenwick & West, said Microsoft has not been overzealous in the
past about protecting its trademark, allowing spoof sites and others
to go unchallenged.
"They're not the type to sue at the drop of a hat,"
he said, concluding that there appears to be solid ground for the
Lindows complaint. "Superficially, you would have to say
there's some potential for confusion, and the defendant may be
trying to trade on Microsoft's position in the marketplace."
Robertson said he hoped to have a preview version of Lindows
ready for download by next week, with a full version ready early
next year. He said the company is targeting small and medium-sized
business that might be interested in switching to a less expensive
operating system but have invested in Windows applications such as
Office. "We're trying to give consumers a choice, where
there's really no choice today," he said.
FOR IMMEDIATE RELEASE FRIDAY, NOVEMBER 2, 2001 WWW.USDOJ.GOV AT
(202) 514-2007 TDD (202) 514-1888
DEPARTMENT OF JUSTICE AND MICROSOFT CORPORATION REACH EFFECTIVE
SETTLEMENT ON ANTITRUST LAWSUIT
Settlement Provides Enforcement Measures To Stop Microsoft's
Unlawful Conduct, Prevent Its Recurrence, And Restore Competition
WASHINGTON, DC--The Department of Justice reached a
settlement today with Microsoft Corporation that imposes a broad
range of restrictions that will stop Microsoft's unlawful conduct,
prevent recurrence of similar conduct in the future and restore
competition in the software market, achieving prompt, effective and
certain relief for consumers and businesses. The settlement reached
today accomplishes this by: creating the opportunity for independent
software vendors to develop products that will be competitive with
Microsoft's middleware products on a function-by-function basis;
giving computer manufacturers the flexibility to contract with
competing software developers and place their middleware products on
Microsoft's operating system; preventing retaliation against
computer manufacturers, software developers, and other industry
participants who choose to develop or use competing middleware
products; and ensuring full compliance with the proposed Final
Judgment and providing for swift resolution of technical disputes.
"A vigorously competitive software industry is vital to
our economy and effective antitrust enforcement is crucial to
preserving competition in this constantly evolving high-tech
arena," said Attorney General John Ashcroft. "This
historic settlement will bring effective relief to the market and
ensure that consumers will have more choices in meeting their
computer needs." The settlement, which will be filed today in
U.S. District Court in the District of Columbia with Judge Colleen
Kollar-Kotelly, if approved by the court, would resolve the lawsuit
filed by the Department on May 18, 1998.
"This settlement will promote innovation, give consumers
more choices, and provide the computer industry as a whole with more
certainty in the marketplace," said Charles A. James,
Assistant Attorney General for the Antitrust Division. "The
goals of the government were to obtain relief that stops Microsoft
from engaging in unlawful conduct, prevent any recurrence of that
conduct in the future, and restore competition in the software
market-we have achieved those goals."
Today's proposed settlement is modeled on the conduct provisions
in the original Final Judgment entered by Judge Jackson, but
includes key additions and modifications that take into account the
and anticipated changes in the computer industry, including the
launch of Microsoft's new Windows XP operating system, and the Court
of Appeals decision revising some of the original liability
findings.
The proposed Final Judgment includes the following key
provisions:
Broad Scope of Middleware Products- The proposed Final Judgment
applies a broad definition of middleware products which is wide
ranging and will cover all the technologies that have the potential
to be middleware threats to Microsoft's operating system monopoly.
It includes browser, e-mail clients, media players, instant
messaging
[[Page 29134]]
software, and future new middleware developments.
Disclosure of Middleware Interfaces- Microsoft will be required
to provide software developers with the interfaces used by
Microsoft's middleware to interoperate with the operating system.
This will allow developers to create competing products that
will emulate Microsoft's integrated functions.
Disclosure of Server Protocols- The Final Judgment also ensures
that other non-Microsoft server software can interoperate with
Windows on a PC the same way that Microsoft servers do. This is
important because it ensures that Microsoft cannot use its PC
operating system monopoly to restrict competition among servers.
Server support applications, like middleware, could threaten
Microsoft's monopoly.
Freedom to Install Middleware Software--Computer
manufacturers and consumers will be free to substitute competing
middleware software on Microsoft's operating system.
Ban on Retaliation--Microsoft will be prohibited from
retaliating against computer manufacturers or software developers
for supporting or developing certain competing software. This
provision will ensure that computer manufacturers and software
developers are able to take full advantage of the options granted to
them under the proposed Final Judgment without fear of reprisal.
Uniform Licensing Terms- Microsoft will be required to license its
operating system to key computer manufacturers on uniform terms for
five years. This will further strengthen the ban on retaliation.
Ban on Exclusive Agreements- Microsoft will be prohibited from
entering into agreements requiring the exclusive support or
development of certain Microsoft software. This will allow software
developers and computer manufacturers to contract with Microsoft and
still support and develop rival middleware products.
The proposed Final Judgment also includes key additional
provisions related to enforcement: Licensing of Intellectual
Propert--Microsoft also will be required to license any
intellectual property to computer manufacturers and software
developers necessary for them to exercise their rights under the
proposed Final Judgment, including for example, using the middleware
protocols disclosed by Microsoft to interoperate with the operating
system. This enforcement measure will ensure that intellectual
property rights do not interfere with the rights and obligations
under the proposed Final Judgment.
On-Site Enforcement Monitors- The proposed settlement also adds
an important enforcement provision that provides for a panel of
three independent, on-site, full-time computer experts to assist in
enforcing the proposed Final Judgment. These experts will have full
access to all of Microsoft's books, records, systems, and personnel,
including source code, and will help resolve disputes about
Microsoft's compliance with the disclosure provisions in the Final
Judgment. The core allegation in the lawsuit, upheld by the Court of
Appeals in June 2001, was that Microsoft had unlawfully maintained
its monopoly in computer-based operating systems by excluding
competing software products known as middleware that posed a nascent
threat to the Windows operating system.
Specifically, the Court of Appeals found that Microsoft engaged
in unlawful exclusionary conduct by using contractual provisions to
prohibit computer manufacturers from supporting competing middleware
products on Microsoft's operating system; prohibiting consumers and
computer manufacturers from removing Microsoft's middleware products
from the operating system; and reaching agreements with software
developers and third parties to exclude or disadvantage competing
middleware products.
The proposed Final Judgment will be published by the Federal
Register, along with the Department's Competitive Impact Statement,
as required by the Antitrust Procedures and Penalties Act. Any
person may submit written comments concerning the proposed consent
decree within 60 days of its publication to: Renata Hesse, Trial
Attorney, 325 7th Street, NW, Suite 500, Washington, DC 20530,
(202-6160944). At the conclusion of the 60-day comment period,
the Court may enter the proposed consent decree upon a finding that
it serves the public interest. The proposed Final Judgment will be
in effect for a five year period and may be extended for an
additional two-year period if the Court finds that Microsoft has
engaged in multiple violations of the proposed Final Judgment.
6330670 Digital rights management operating system 11-Dec-
01
6330589 System and method for using a client database to
manage conversation threads generated from email or news messages
11-Dec-01
6330566 Apparatus and method for optimizing client-state
data storage 11-Dec-01
6330563 Architecture for automated data analysis 11-Dec-01
6330003 Transformable graphical regions 11-Dec-01
6327705 Method for creating and maintaining user data 04-
Dec-01
6327702 Generation a compiled language program for an
interpretive runtime environment 04-Dec-01
6327699 Whole program path profiling 04-Dec-01
6327652 Loading and identifying a digital rights management
operating system 04-Dec-01
6327617 Method and system for identifying and obtaining
computer software fro a remote computer 04-Dec-01
6327608 Server administration tool using remote file
browser 04-Dec-01
6327589 Method for searching a file having a format
unsupported by a search engine 04-Dec-01
6326964 Method for sorting 3D object geometry among image
chunks for rendering in a layered graphics rendering system 04-Dec-
01
6326953 Method for converting text corresponding to one
keyboard mode to text corresponding to another keyboard more 04-Dec-
01
6326947 Ractile character input in computer-based devices
04-Dec-01
6324587 Method, computer program product, and data
structure for publishing a data object over a store and forward
transport 27-Nov-01
6324571 Floating single master operation 27-Nov-01
6324546 Automatic logging of application program launches
27-Nov-01
6324544 File object synchronization between a desktop
computer and a mobile device 27-Nov-01
6324492 Server stress testing using multiple concurrent
client simulation 27-Nov-01
6321334 Administering permissions associated with a
security zone in a computer system security model 20-Nov-01
6321276 Recoverable methods and systems for processing
input/output requests including virtual memory addresses 20-Nov-01
6321275 Interpreted remote procedure calls 20-Nov-01
6321274 Multiple procedure calls in a single request 20-
Nov-01
6221243 Laying out a paragraph by defining all the
characters as a single text run by substituting, and then
positioning the glyphs 20-Nov-01
6321226 Flexible keyboard searching 20-Nov-01
6321225 Abstracting cooked variables from raw variables 20-
Nov-01
6321219 Dynamic symbolic links for computer file systems
20-Nov-01
6320978 Stereo reconstruction employing a layered approach
and layer refinement techniques 20-Nov-01
6317880 Patch source list management 13-Nov-01
6317818 Pre-fetching of pages prior to a hard page fault
sequence 13-Nov-01
6317774 Providing predictable scheduling of programs using
a repeating precomputed schedule 13-Nov-01
6317760 Extensible ordered information within a web page
13-Nov-01
6317748 Management information to object mapping and
correlator 13-Nov-01
6314562 Method and system for anticipatory optimization of
computer programs 06-Nov-01
6314533 System and method for forward custom marshaling
event filters 06-Nov-01
6314417 Processing multiple database transactions in the
same process to reduce process overhead and redundant retrieval from
database servers 06-Nov-01
6313851 User friendly remote system interface 06-Nov-01
6311323 Computer programming language statement building
and information tool 30-Oct-01
6311228 Method and architecture for simplified
communications with HID devices 30-Oct-01
6311216 Method, computer program product, and system for
client-side deterministic routing and URL lookup into a distributed
cache of URLS 30-Oct-01
6311209 Methods for performing client-hosted application
sessions in distributed processing systems 30-Oct-01
6308274 Least privilege via restricted tokens 23-Oct-01
6308273 Method and system of security location
discrimination 23-Oct-01
[[Page 29135]]
6308266 System and method for enabling different grades of
cryptography strength in a product 23-Oct-01
6308222 Transcoding of audio data 23-Oct-01
6308173 Methods and arrangements for contro??ing resource
access in a networked computing environment 23-Oct-01
6307566 Methods and apparatus for performing image
rendering and rasterization operations 23-Oct-01
6307547 Method and system for providing enhanced folder
racks 23-Oct-01
6307538 EMC enhanced peripheral device 23-Oct-01
6305008 Automatic statement completion 16-Oct-01
6304928 Compressing/decompressing bitmap by performing
exclusive- or operation setting differential encoding of first and
previous row therewith outputting run-length encoding of row 16-Oct-
01
6304918 Object interface control system 16-Oct-01
6304917 Negotiating optimum parameters in a system of
interconnected components 16-Oct-01
6304914 Method and apparatus for pre-compression packaging
16-Oct-01
6304879 Dynamic data cache for object-oriented computing
environments 16-Oct-01
6304878 Method and system for improved enumeration of tries
16-Oct-01
6304261 Operating system for handheld computing device
having program icon auto hide 16-Oct-01
6304258 Method and system for adding application defined
properties and application defined property sheet pages 16-Oct-01
6303924 Image sensing operator input device 16-Oct-01
6301616 Pledge-based resource allocation system 09-Oct-01
6301612 Establishing one computer as a replacement for
another computer 09-Oct-01
6301601 Disabling and enabling transaction committal in
transactional application components 09-Oct-01
6298440 Method and system for providing multiple entry
point code resources 02-Oct-01
6298391 Remote procedure calling with marshaling and
unmarshaling of arbitrary non-conformant pointer sizes 02-Oct-01
6298373 Local service provider for pull based intelligent
caching system 20-Oct-01
6298342 Electronic database operations for perspective
transformations on relational tables using pivot and unpivot columns
02-Oct-01
6298321 Trie compression using substates and utilizing
pointers to replace or merge identical, reordered states 02-Oct-01
6297837 Method of maintaining characteristics information
about a system component either modified by an application program
or a user initiated change 02-Oct-01
6295608 Optimized allocation of data elements among cache
lines 25-Oct-01
6295556 Method and system for configuring computers to
connect to networks using network connection objects 25-Oct-01
6295529 Method and apparatus for indentifying clauses
having predetermined characteristics indicative of usefulness in
determining relationships between different texts 25-Oct-01
6292934 Method and system for improving the locality of
memory references during execution of a computer program 18-Oct-01
6292857 Method and mechanism for coordinating input of
asynchronous data 18-Oct-01
6292840 Voice/audio data communication with negotiated
compression scheme and data header compressed in predetermined
scheme 18-Oct-01
6292834 Dynamic bandwidth selection for efficient
transmission of multimedia streams in a computer network 18-Sep-01
6292822 Dynamic load balancing among processors in a
parallel computer 18-Sep-01
6292194 Image compression method to reduce pixel and
texture memory requirements in graphics applications 18-Sep-01
6289464 Receiving wireless information on a mobile device
with reduced power consumption 11-Sep-01
6289458 Perproperty access control mechanism 11-Sep-01
6289390 System and method for performing remote requests
with an on-line service network 11-Sep-01
6288726 Method for rendering glyphs using a layout services
library 11-Sep-01
6288720 Method and system for adding application defined
properties and application defined property sheet pages 11-Sep-01
6286131 Debugging tool for linguistic applications 04-Sep-
01
6286013 Method and system for providing a common name space
for long and short file names in an operating system 04-Sep-01
6285998 System and method for generating reusable database
queries 04-Sep-01
6285374 Blunt input device cursor 04-Sep-01
6285363 Method and system for sharing applications between
computer systems 04-Sep-01
6282712 Automatic software installation on heterogeneous
networked computer systems 28-Aug-01
6282621 Method and apparatus for reclaiming memory 28-Aug-
01
6282561 Method and system for resource management with
independent real-time applications on a common set of machines 28-
Aug-01
6282327 Maintaining advance widths of existing characters
that have been resolution enhanced 28-Aug-01
6282294 System for broadcasting to, and programming, a
motor device in a protocol, device, and network independent fashion
28-Aug-01
6281881 System and method of adjusting display
characteristics of a displayable data file using an ergonomic
computer input device 28-Aug-01
6281879 Timing and velocity control for displaying
graphical information 28-Aug-01
6279111 Security model using restricted tokens 21-Aug-01
6279032 Method and system for quorum resource arbitration
in a server cluster 21-Aug-01
6279016 Standardized filtering control techniques 21-Aug-01
6279007 Architecture for managing query friendly
hierarchical values 21-Aug-01
6278989 Histogram construction using adaptive random
sampling with cross-validation for database systems 21-Aug-01
6278462 Flexible schemes for applying properties to
information in a medium 21-Aug-01
6278450 System and method for customizing controls on a
toolbar 21-Aug-01
6278448 Composite Web page built from any web content 21-
Aug-01
6278434 Non-square scaling of image data to be mapped to
pixel sub-components 21-Aug-01
6275957 Using query language for provider and subscriber
registrations 14-Aug-01
6275938 Security enhancement for untrusted executable code
14-Aug-01
6275912 Method and system for storing data items to a
storage device 14-Aug-01
6275868 Script Engine interface for multiple languages 14-
Aug-01
6275857 System and method for freeing shared resources in a
computer system 14-Aug-01
6275829 Representing a graphic image on a web page with a
thumbnail-sized image 14-Aug-01
6275496 Content provider for pull based intelligent caching
system 14-Aug-01
6272631 Protected storage of core data secrets 07-Aug-01
6272593 Dynamic network cache directories 07-Aug-01
6272581 System and method for encapsulating legacy data
transport protocols for IEEE 1394 serial bus 07-Aug-01
6272545 System and method for interaction between one or
more mobile devices 07-Aug-01
6271858 Incremental update for dynamic/animated textures on
three-dimensional models 07-Aug-01
6271855 Interactive construction of 3D models from
panoramic images employing hard and soft constraint characterization
and decomposing techniques 07-Aug-01
6271847 Inverse texture mapping using weighted pyramid
blending and view-dependent weight maps 07-Aug-01
6271839 Method and system for sharing applications between
computer systems 07-Aug-01
6269477 Method and system for improving the layout of a
program image using clustering 31-Jul-01
6269403 Browser and publisher for multimedia object
storage, retrieval and transfer 31-Jul-01
6269382 Systems and methods for migration and recall of
data from local and remote storage 31-Jul-01
6269377 System and method for managing locations of
software components via a source list 31-Jul-01
6368855 Method and system for sharing applications between
computer systems 31-Jul-01
[[Page 29136]]
6268852 System and method for facilitating generation and
editing of event handlers 31-Jul-01
6266729 Computer for encapsulating legacy data transport
protocol for IEEE 1394 serial bus 24-Jul-01
6266665 Indexing and searching across multiple sorted
arrays 24-Jul-01
6266658 Index tuner for given workload 24-Jul-01
6266064 Coherent visibility sorting and occlusion cycle
detection for dynamic aggregate geometry 24-Jul-01
6266059 User interface for switching between application
modes 24-Jul-01
6266054 Automated removal of narrow, elongated distortions
from a digital image 24-Jul-01
6266043 Apparatus and method for automatically positioning
a cursor on a control 24-Jul-01
6263492 Run time object layout model with object type that
differs from the derived object type in the class structure at
design time and the ability to store the optimized run time object
layout model 17-Jul-01
6263491 Heavyweight and lightweight instrumentation 17-Jul-
01
6263379 Method and system for referring to and binding to
objects using identifier objects 17-Jul-01
6263367 Server-determined client refresh periods for
dynamic directory services 17-Jul-01
6263352 Automated web site creation using template driven
generation of active server page applications 17-Jul-01
6263337 Scalable system for expectation maximization
clustering of large detabases 17-Jul-01
6263334 Density-based indexing method for efficient
execution of high dimensional nearest-neighbor queries on large
databases 17-Jul-01
6262733 Method of storing and providing icons according to
application program calls and user-prompted system metric changes
17-Jul-01
6262730 Intelligent user assistance facility 17-Jul-01
6262712 Handle sensor with fade-in 17-Jul-01
6260148 Methods and systems for message forwarding and
property notifications using electronic subscriptions 10-Jul-01
6260043 Automatic file format converter 10-Jul-01
6256780 Method and system for assembling software
components 03-Jul-01
6256668 Method for identifying and obtaining computer
software from a network computer using a tag 03-Jul-01
6256650 Method and system for automatically causing
editable text to substantially occupy a text frame 03-Jul-01
6256642 Method and system for file system management using
a flash-erasable, programmable, read-only memory 03-Jul-01
6256634 Method and system for purging tombstones for
deleted data items in a replicated database 03-Jul-01
6256623 Network search access construct for accessing web-
based search services 03-Jul-01
6256069 Generation of progressive video from interlaced
video 03-Jul-01
6256031 Integration of physical and virtual namespace 03-
Jul-01
6256028 Dyanmic site browser 03-Jul-01
6256013 Computer pointing device 03-Jul-01
6256009 Method for automatically and intelligently
scrolling handwritten input 03-Jul-01
6253374 Method for validating a signed program prior to
execution time or an unsigned program at execution time 26-Jun-01
6253324 Server verification of requesting clients 26-Jun-01
6253255 System and method for batching data between
transport and link layers in a protocol stack 26-Jun-01
6253241 Selecting a cost-effective bandwidth for
transmitting information to an end user in a computer network 26-
Jun-01
6253195 Optimized query tree 26-Jun-01
6253194 System and method for performing database queries
using a stack machine 26-Jun-01
6252608 Method and system for improving shadowing in a
graphics rendering system 26-Jun-01
6252593 Assisting controls in a windowing environment 26-
Jun-01
6252589 Multilingual user interface for an operating system
26-Jun-01
6249908 System and method for representing graphical font
data and for converting the font data to font instructions 19-Jun-01
6249866 Encrypting file system and method 19-Jun-01
6249826 System and method for media status notification 19-
Jun-01
6249822 Remote procedure call method 19-Jun-01
6249792 On-line dynamic file shrink facility 19-Jun-01
6249284 Directional navigation system in layout managers
19-Jun-01
6249274 Computer input device with inclination sensors 19-
Jun-01
6247061 Method and computer program product for scheduling
network communication packets originating from different flows
having unique service requirements 12-Jun-01
6247057 Network server supporting multiple instance of
services to operate concurrently by having endpoint mapping
subsystem for mapping virtual network names to virtual endpoint IDs
12-Jun-01
6247042 Method and system for restoring the state of
physical memory as the focus changes among application programs in a
computer 12-Jun-01
6246977 Information retrieval utilizing semantic
representation of text and based on constrained expansion of query
words 12-Jun-01
6246412 Interactive construction and refinement of 3D
models from multiple panoramic images 12-Jun-01
6246409 Method and system for connecting to, browsing, and
accessing computer network resources 12-Jun-01
6246404 Automatically generating code for integrating
context-sensitive help functions into a computer software
application 12-Jun-01
6243825 Method and system for transparently failing over a
computer name in a server cluster 05-Jun-01
6243821 System and method for managing power consumption in
a computer system 05-Jun-01
6243766 Method and system for updating software with
smaller patch files
6243764 Method and system for aggregating objects 05-Jun-01
6243753 Method, system, and computer program product for
creating a raw data channel form an integrating component to a
series of kernel mode filters 05-Jun-01
6243721 Method and apparatus for providing automatic layout
capabilities for computer forms 05-Jun-01
6243701 System and method for sorting character strings
containing accented and unaccented characters 05-Jun-01
6243093 Methods, apparatus and data structures for
providing a user interface, which exploits spatial memory in three-
dimensions, to objects and which visually groups matching objects
05-Jun-01
6243070 Method and apparatus for detecting and reducing
color artifacts in images 05-June-01
6240472 Method and system for sharing a communications port
29-May-01
6240465 Method and system for aggregating objects 29-May-01
6240456 System and method for collecting printer
administration information 29-May-01
6239814 Method for indicating the existence of a control
object 29-May-01
6239783 Weighted mapping of image data samples to pixel
sub-components on a display device 29-May-01
6237144 Use of relational databases for software
installation 22-May-01
6236390 Methods and apparatus for positioning displayed
characters 22-May-01
6233731 Program-interface converter for multiple-platform
computer systems 15-May-01
6233624 System and method for layering drivers 15-May-01
6233606 Automatic cache synchronization 15-May-01
6233570 Intelligent user assistance facility for a software
program 15-May-01
6232976 Optimizing dynamic/animating textures for use in
three-dimensional models 15-May-01
6232974 Decision-theoretic regulation for allocating
computational resources among components of multimedia content to
improve fidelity 15-May-01
6232972 Method for dynamically displaying controls in a
toolbar display based on control usage 15-May-01
6232966 Method and system for generating comic panels 15-
May-01
6232958 Input device with multiplexed switches 15-May-01
6232957 Technique for implementing an on-demand tool glass
for use in a desktop user interface 15-May-01
6230318 Application programs constructed entirely from
autonomous component objects 08-May-01
6230312 Automatic detection of per-unit location
constraints 08-May-01
6230269 Distributed authentication system and method 08-
May-01
[[Page 29137]]
6230212 Method and system for the link tracking of objects
08-May-01
6230173 Method for creating structured documents in a
publishing system 08-May-01
6230172 Production of a video stream with synchronized
annotations over a computer network 08-May-01
6230159 Method for creating object inheritance 08-May-01
6230156 Electronic mail interface for a network server 08-
May-01
6229539 Method for merging items of containers of separate
program modules 08-May-01
6229537 Hosting windowed objects in a non-windowing
environment 08-May-01
6226747 Method for preventing software piracy during
installation from a read only storage medium 01-May-01
6226742 ciphertext message through use of a message
authentication code formed through cipher block chaining of the
plaintext message 01-May-01
6226689 Method and mechanism for interprocess communication
using client and server listening threads 01-May-01
6226665 Application execution environment for a small
device with partial program loading by a resident operating system
01-May-01
6226635 Layered query management 01-May-01
6226628 Cross-file pattern-matching compression 01-May-01
6226407 Method and apparatus for analyzing computer screens
01-May-01
6226017 Methods and apparatus for improving read/modify/
write operations 01-May-01
6225973 Mapping samples of foreground/background color
image data to pixel sub-components 01-May-01
6223292 Authorization systems, methods, and computer
program products 24-Apr-01
6223212 Method and system for sharing negotiating
capabilities when sharing an application with multiple systems 24-
Apr-01
6223207 Input/output completion port queue data structures
and methods for using same 24-Apr-01
6223171 What-if index analysis utility for database systems
24-Apr-01
6222937 Method and system for tracking vantage points from
which pictures of an object have been taken 24-Apr-01
6222182 Apparatus and method for sampling a phototransistor
24-Apr-01
6219782 Multiple user software debugging system 17-Apr-01
6219675 Distribution of a centralized database 17-Apr-01
6219025 Mapping image data samples to pixel sub-components
on a striped display device 17-Apr-01
6216177 Method for transmitting text data for shared
application between first and second computer asynchronously upon
initiation of a session without solicitation from first computer 10-
Apr-01
6216175 Method for upgrading copies of an original file
with same update data after normalizing differences between copies
created during respective original installations 10-Apr-01
6216154 Methods and apparatus for entering and evaluating
time dependence hypotheses and for forecasting based on the time
dependence hypotheses entered 10-Apr-01
6216141 System and method for integrating a document into a
desktop window on a client computer 10-Apr-01
6216134 Method and System for visualization of clusters and
classifications 10-Apr-01
6215503 Image generator and method for resolving non-binary
cyclic occlusions with image composting operations 10-Apr-01
6215496 Sprites with depth 10-Apr-01
6212676 Event architecture for system management in an
operating system 03-Apr-01
6212617 Parallel processing method and system using a lazy
parallel data type to reduce inter-processor communication 03-Apr-01
6212574 User mode proxy of kernel mode operations in a
computer operating system 03-Apr-01
6212553 Method for sending and receiving flags and
associated data in e-mail transmissions 03-Apr-01
6212541 System and method for switching between software
applications in multi-window operating system 03-Apr-01
6212526 Method for apparatus for efficient mining of
classification models from databases 03-Apr-01
6212436 Dynamic inheritance of software object services 03-
Apr-01
6209093 Technique for producing a privately authenticatable
product copy indicia and for authenticating such an indicia 27-Mar-
01
6209089 Correcting for changed client machine hardware
using a server-based operating system 27-Mar-01
6209088 Computer hibernation implemented by a computer
operating system 27-Mar-01
6209041 Method and computer program product for reducing
inter-buffer data transfers between separate processing components
27-Mar-01
6209040 Method and system for interfacing to a type library
27-Mar-01
6209011 Handheld computing device with external
notification system 27-Mar-01
6208996 Mobile device having notification database in which
only those notifications that are to be presented in a limited
predetermined time period 27-Mar-01
6208952 Method and system for delayed registration of
protocols 27-Mar-01
6208337 Method and system for adding application defined
properties and application defined property sheet pages 27-Mar-01
6205561 Tracking and managing failure-susceptible
operations in a computer system 27-Mar-01
6205498 Method and system for message transfer session
management 20-Mar-01
6205492 Method and computer program product for
interconnecting software drivers in kernel mode 20-Mar-01
6202202 Pointer analysis by type inference for programs
with structured memory objects nd potetially inconsistent memory
object accesses 13-Mar-01
6202121 System and method for improved program launch time
13-Mar-01
6202089 Method for configuring at runtime, identifying and
using a plurality of remote procedure call endpoints on a single
server process 13-Mar-01
6202085 System and method for incremental change
synchronization between multiple copies of data 13-Mar-01
6201549 System and method for drawing and painting with
bitmap brushes 13-Mar-01
6201540 Graphical interface components for in-dasn
automotive accessories 13-Mar-01
6199166 Method and system for managing data while sharing
application programs 06-Mar-01
6199107 Partial file caching and read range resume system
and method 06-Mar-01
6199082 Method for delivering separate design and content
in a multimedia publishing system 06-Mar-01
6199081 Automatic tagging of documents and exclusion by
content 06-Mar-01
6199061 Method and apparatus for providing dynamic help
topic titles to a user 27-Mar-01
6198852 View synthesis from plural images using a trifocal
tensor data structure in a multi-view parallax geometry 06-Feb-01
6195655 Automatically associating archived multimedia
content with 27-Feb-01
6195622 Methods and apparatus for building attribute
transition probability models for use in pre-fetching resources 27-
Feb-01
6192487 Method and system for remapping physical memory 20-
Feb-01
6192432 Caching uncompressed data on a compressed drive 20-
Feb-01
6192360 Methods and apparatus for class fying text and for
building a text classifier 20-Feb-01
6191790 Inheritable property shading system for three-
dimensional rendering of user interface controls 20-Feb-01
6189146 System and method for software licensing 13-Feb-01
6189143 Method and system for reducing an intentional
program tree represented by high-level computational constructs 13-
Feb-01
6189100 Ensuring the integrity of remote boot client data
13-Feb-01
6189069 Optimized logging of data elements to a data
storage device 13-Feb-01
6189019 Computer system and computer-implemented process
for presenting document connectivity 13-Feb-01
6189016 Journaling ordered changes in a storage volume 13-
Feb-01
6189000 System and method for accessing user properties
from multiple storage mechanisms 13-Feb-01
6188405 Methods, apparatus and data structures for
providing a user interface, which exploits spatial memory, to
objects 13-Feb-01
6188401 Script-based user interface implementation defining
components using a text markup language 13-Feb-01
6188387 Computer input peripheral 13-Feb-01
6188358 Method and apparatus for displaying images such as
text 13-Feb-01
6185579 Method and system for expanding a buried stack
frame 06-Feb-01
6185569 Linked data structure integrity verification system
which verifies actual
[[Page 29138]]
node information with expected node information stored in a table
06-Feb-01
6185568 Classifying data packets processed by drivers
included in a stack 06-Feb-01
6185564 Generation and validation of reference handles in a
multithreading environment 06-Feb-01
6184891 Fog simulation for partially transparent objects
06-Feb-01
6182286 Dynamic versioning system for multiple users of
multi-module software systems 30-Jan-01
6182160 Method and system for using editor objects to
connect components 30-Jan-01
6182133 Method and apparatus for display of information
prefetching and cache status having variable visual indication based
on a period of time since prefetching 30-Jan-01
6182108 method and system for multi-threaded processing 30-
Jan-01
6182029 Method and system for converting between structured
language elements and objects embeddable in a document 30-Jan-01
6182086 Client-server computer system with application
recovery of server applications and client applications 30-Jan-01
6181351 Synchronizing the moveable mouths of animated
characters with recorded speech 30-Jan-01
6178529 Method and system for resource monitoring of
disparate resources in a server cluster 23-Jan-01
6178423 System and method for recycling numerical values in
a computer system 23-Jan-01
6177945 Advanced graphics controls 23-Jan-01
6175916 Common-thread inter-process function calls invoked
by jumps to invalid addresses 16-Jan-01
6175900 Hierarchical bitmap-based memory manager 16-Jan-01
6175879 Method and system for migrating connections between
receive-any and receive-direct threads 16-Jan-01
6175878 Integration of systems management services with an
underlying system object model 16-Jan-01
6175863 Storage of sitemaps at server sites for holding
information regarding content 16-Jan-01
6175834 Consistency checker for documents containing
Japanese text 16-Jan-01
6175833 System and method for interactive live online
voting with tallies for updating voting results 16-Jan-01
6173421 Centrally handling runtime errors 09-Jan-01
6173406 Authentication systems, methods, computer program
products 09-Jan-01
6173404 Software object security mechanism 09-Jan-01
6173325 Method computer program product, and system for
assessing the performance of a packet schedule 09-Jan-01
6173317 Streaming and displaying a video stream with
synchronized annotations over a computer network 09-Jan-01
6172354 Operator input device 09-Jan-01
6169993 Method, data structure, and computer program
product for object state storage 02-Jan-01
6169984 Global incremental type search navigation directly
from printable keyboard character input 02-Jan-01
6169983 Index merging for database systems 02-Jan-01
6169546 Global viewer scrolling system 02-Jan-01
6167565 Method and system of custom marshaling of inter-
language parameters 26-Dec-00
6167423 Concurrency control of state machines in a computer
system using cliques 26-Dec-00
6166738 methods, apparatus and data structures for
providing a user interface, which exploits spatial memory in three-
dimensions, to objects 26-Dec-00
6166732 Distributed object oriented multi-user domain with
multimedia presentations 26-Dec-00
6163855 method and system for replicated and consistent
modifications in a server cluster 19-Dec-00
6163841 Technique for producing privately authenticatable
cryptographic signatures and for authenticating such signatures 19-
Dec-00
6163809 System and method for preserving delivery status
notification when moving from a native network to a foreign network
19-Dec-00
616377 System and method for reducing location conflicts in
a database 19-Dec-00
6163324 Median calculation using SIMD operations 19-Dec-00
6161176 System and method for storing configuration
settings for transfer from a first system to a second system 12-Dec-
00
6161130 Technique which utilizes a probabilistic classifier
to detect "junk" e-mail by automatically updating a
training and re-training the classifier based on the updated
training set 12-Dec-00
6161084 Information retrieval utilizing semantic
representation of text by identify hyponyms and indexing multiple
tokenized semantic structures to a same passage of text 12-Dec-00
6160553 Methods, apparatus and data structures for
providing a user interface, which exploits spatial memory in three-
dimensions, to objects and in which object occlusion is avoided 12-
Dec-00
6160550 Shell extensions for an operating system 12-Dec-00
6157942 Imprecise caching of directory download responses
for dynamic directory services 05-Dec-00
6157905 Identifying language and character set of data
representing text 05-Dec-00
6157747 3-dimensional image rotation method and apparatus
for producing image mosaics 05-Dec-00
6157618 Distributed internet user experience monitoring
system 05-Dec-00
6157383 Control polyhedra for a three-dimensional (3D) user
interface 05-Dec-00
6154843 Secure remote access computing system 28-Nov-00
6154767 Methods and apparatus for using attribute
transition probability models for pre-fetching resources 28-Nov-00
6154220 Rectilinear layout 28-Nov-00
6154219 System and method for optimally placing labels on a
map 28-Nov-00
6154205 Navigating web-based content in a television-based
system 28-Nov-00
6151708 Determining program update availability via set
intersection over a sub-optical pathway 21-Nov-00
6151632 Method and apparatus for distributed transmission
of real-time multimedia information 21-Nov-00
6151618 Safe general purpose virtual machine computing
system 21-Nov-00
6151607 Database computer system with application recovery
and dependency handling write cache 21-Nov-00
6151022 Method and apparatus for statically testing visual
resources 21-Nov-00
6148325 Method and system for protecting shared code and
data in a multitasking operating system 14-Nov-00
6148304 Navigating multimedia content using a graphical
user interface with multiple display regions 14-Nov-00
6148296 Automatic generation of database queries 14-Nov-00
6147685 System and method for editing group information 14-
Nov-00
6145003 Method of web crawling utilizing address"
mapping 07-Nov-00
6144964 Methods and apparatus for tuning a match between
entities having attributes 07-Nov-00
6144378 Symbol entry system and methods 07-Nov-00
6144377 Providing access to user interface elements of
legacy application programs 07-Nov-00
6141722 Method and apparatus for reclaiming memory 31-Oct-
00
6141705 System for querying a peripheral device to
determine its processing capabilities and then offloading specific
processing tasks from a host to the peripheral device when needed
31-Oct-00
6141696 Secure decentralized object exporter 31-Oct-00
6141018 Method and system for displaying hypertext
documents with visual effects 31-Oct-00
6141003 Channel bar user interface for an entertainment
System 31-Oct-00
6138128 Sharing and organizing world wide web references
using distinctive characters 24-Oct-00
6138112 Test generator for database management systems 24-
Oct-00
6137492 Method and system for adaptive refinement of
progressive meshes 24-Oct-00
6137491 Method and apparatus for reconstructing geometry
using geometrically constrained structure from motion with points on
planes 24-Oct-00
6134658 Multi-server location-independent authentication
certificate management system 17-Oct-00
6134602 Application programming interface enabling
application programs to group code and data to control allocation of
physical memory in a virtual memory system 17-Oct-00
6134596 Continuous media file server system and method for
scheduling network resources to play multiple files having different
data transmission rates 17-Oct-00
6134594 Multi-user, multiple tier distributed application
architecture with
[[Page 29139]]
single-user access control of middle tier objects 17-Oct-00
6134582 System and method for managing electronic mail
messages using a client-based database 17-Oct-00
6134577 Method and apparatus for enabling address lines to
access the high memory area 17-Oct-00
6134566 Method for controlling an electronic mail preview
pane to avoid system disruption 17-Oct-00
6133925 Automated system and method for annotation using
callouts 17-Oct-00
6133917 Tracking changes to a computer software application
when creating context-sensitive help functions 17-Oct-00
6133915 System and method for customizing controls on a
toolbar 17-Oct-00
6131192 Software installation 10-Oct-00
6131102 Method and system for cost computation of spelling
suggestions and automatic replacement 10-Oct-00
6131051 Interface between a base module and a detachable
faceplate in an in-dash automotive accessory 10-Oct-00
6128737 Method and apparatus for producing a message
authentication code in a cipher block chaining operation by using
linear combinations of an encryption key 10-Oct-00
6128713 Application programming interface enabling
application programs to control allocation of physical memory in a
virtual memory system 03-Oct-00
6128661 Integrated communications architecture on a mobile
device 03-Oct-00
6128653 Method and apparatus for communication media
commands and media data using the HTTP protocol 03-Oct-00
6128633 Method and system for manipulating page-breaks in
an electronic document 03-Oct-00
6128629 Method and apparatus, for automatically updating
data files in a slide presentation program 03Oct-O0
6128012 User interface for a portable data management
device with limited size and processing capability 03-Oct-00
6125373 Identifying a driver that is an owner of an active
mount point 26-Sep-00
6125369 Continuous object sychronization between object
stores on different computers 26-Sep-00
6125366 Implicit session context system with object state
cache 26-Sep-00
6125352 System and method for conducting commerce over a
distributed network 26-Sep-00
6122658 Custom localized information in a networked server
for display to art end user 19-Sep-00
6122649 Method and system for user defined and linked
properties 19-Sep-00
6122644 System for halloween protection in a database
system 19-Sep-00
6121981 Method and system for generating arbitrary-shaped
animation in the user interface of a computer 19-Sep-00
6121968 Adaptive menus 19-Sep-00
6121964 Method and system for automatic persistence of
controls in a windowing environment 19-Sep-00
6119153 Accessing content via installable data sources 12-
Sep-00
6119131 Persistent volume mount points 12-Sep-00
6119120 Computer implemented methods for constructing a
compressed data structure from a data string and for using the data
structure to find data patterns in the data string 12-Sep-00
6119115 Method and computer program product for reducing
lock contention in a multiple instruction execution stream
processing environment 12-Sep-00
6115708 Method for refining the initial conditions for
clustering with applications to small and large database clustering
05-Sep-00
6115705 Relational database system and method for query
processing using early aggregation 05-Sep-00
6112216 Method and system for editing a table in a document
29-Aug-00
6112214 Method and system for the direct manipulation of
cells in an electronic spreadsheet program or the like 29-Aug-00
6111574 Method and system for visually indicating a
selection query 29-Aug-00 63111567 Seamless multimedia
branching 29-Aug-00
6110227 systems and methods for pre-processing variable
initializers 29-Aug-00
6108784 Encryption of applications to ensure authenticity
22-Aug-00
6108715 Method and system for invoking remote procedure
calls 22-Aug-00
6108706 Transmission announcement system and method for
announcing upcoming data transmissions over a broadcast network 22-
Aug-00
6108661 system for instance customization 22-Aug-00
6108006 Method and system for view-dependent refinement of
progressive meshes 22-Aug-00
6106575 Nested parallel language preprocessor for
converting parallel language programs into sequential code 22-Aug-00
6105041 Using three-state references to manage garbage
collection of referenced objects 15-Aug-00
6105039 Generation and validation of reference, handles 15-
Aug-00
6105038 Hysteresis System and method for achieving a mean
constant cost per action in a computer system 15-Aug-00
6105024 System for memory management during run formation
for external sorting in database system 15-Aug-00
6104377 Method and system for displaying an image at a
desired level of opacity 15-Aug-00
6104359 Allocating display information 15-Aug-00
6102967 Testing a help system of a computer software
application without executing the computer software application 15-
Aug-00
6101546 Method and system for providing data files that are
partitioned by delivery time and data type 08-Aug-00
6101513 Method and apparatus for displaying database
information according to a specified print layout and page for mat
08-Aug-00
6101510 Web browser control for incorporating web browser
functionality into application programs 08-Aug-00
6101499 Method and computer program product for
automatically generating an internet protocol (IP) address 08-Aug-00
6101325 Parameterized packaging system for programming
languages 08-Aug-00
6098081 Hypermedia navigation using soft hyperlinks 01-Aug-
00
6097888 Method and system for reducing an intentional
program tree represented by high-level computational constructs 01-
Aug-00
6097854 Image mosaic construction system and apparatus with
patch-based alignment, global block adjustment and pair-wise motion-
based local warping 01-Aug-00
6097392 Method and system of altering an attribute of a
graphic, object in a pen environment 01-Aug-00
6097380 Continuous media stream control 01-Aug-00
6097371 System and method of adjusting display
characteristics of a displayable data file using an ergonomic
computer input device 01-Aug-00
6096095 Producing persistent representations of complex
data structures 01-Aug-00
6094680 system and method for managing distributed
resources networks 25-Jul-00
6094679 Distribution of software in a computer network
environment 25-Jul-00
6092208 System and method for waking a computer having a
plurality of power resources from a system state using a data
structure 18-Jul-00
6092144 Method and system for interrupt-responsive
execution of communications protocols 18-Jul-00
6092067 Desktop information manager for recording and
viewing important events data structure 18-Jul-00
6091411 Dynamically updating themes for an operating system
shell 18-Jul-00
6091409 Automatically activating a browser with internet
shortcuts on the desktop 18-Jut-00
6088739 Method and system for dynamic, object clustering
11-Jul-00
6088718 Meth0ds and apparatus for using resource transition
probability models for pre-fetching resources 11-Jul-00
6088711 Method and system for defining and applying a style
to a paragraph 11-Jul-00
6088708 System and method for creating an online table from
a layout of objects 11-Jul-00
6088511 Nested Parallel 2D Delaunay triangulation method
11-Jul-00
6088041 Method of dropout control for scan conversion of a
glyph comprising a plurality of discrete segments 11-Jul-00
6086618 Method and computer program product for estimating
total resource usage requirements of a server application in a
hypothetical user configuration 11-Jul-00
6085247 Server operating system for supporting multiple
client-server sessions and dynamic reconnection of users to previous
sessions using different, computers 04-Jul-00
608522 Method and apparatus for utility-directed
prefetching of web pages into local cache using continual
computation and user models 04-Jul-00
6085206 Method and system for verifying accuracy of
spelling and grammatical composition of a document 04-Jul-00
6084592 Interactive construction of 3D models from
panoramic images 04-Jul-00
[[Page 29140]]
6084582 Method and apparatus for recording a voice
narration to accompany a slide show 04-Jul-00
6083282 Cross-project namespace compiler and method 04-Jul-
00
6081898 Unification of directory service with file system
service 27-Jun-00
6081846 Method and computer program product for reducing
intra-system data copying during network packet processing 27-Jul-00
6081816 Method for placing text around Polygons and other
constraints 27-Jun-00
6081802 System and method for accessing compactly stored
map element information from memory 27-Jun-00
6081775 Bootstrapping sense, characterizations of
occurrences of polysemous words in dictionaries 27-Jun-00
6081598 Cryptographic system and method with fast
decryption 27-Jun-00
6071264 optimal frame rate selection user interface 27-Jun-
00
6078999 Recovering from a failure using a transaction table
in connection with shadow copy transaction processing 20-Jun-00
6078942 Resource management for multimedia devices in a
computer 20-Jun-00
6078746 Method and system for reducing an intentional
program tree represented by high-level computational constructs 20-
Jun-00
6077313 Type partitioned dataflow analyses 20-Jun-00
6076100 Server-side chat monitor 13-Jun-00 6976051
Information retrieval utilizing semantic representation of text 13-
Jun-00
6075545 Methods and apparatus for storing, accessing and
processing images through the use of row and column Pointers 13-JUn-
00
6075540 Storage of appearance attributes in association
with wedges in a mesh data model for computer graphics 13-Jun-00
6075532 Efficient redrawing of animated windows 13-Jun-00
6073226 system and method for minimizing page tattles in
virtual memory systems 06-Jun-00
6073214 Method and system for identifying and obtaining,
computer software from a remote computer 06-Jun-00
6073137 Method for updating and displaying the hierarchy of
a data store 06-Jun-00
6072950 Pointer analysis by type inference combined with a
non-pointer analysis 06-Jun-00
6072496 Method and system for capturing and representing 3D
geometry, color and shading of facial expressions and other animated
objects 06-Jun-00
6072486 System and method for creating and customizing a
deskbar 06-Jun-00
6072485 Navigating with direction keys in an environment
that permits navigating with tab keys 06-Jun-00
6072480 Method and apparatus for controlling composition
and performance of soundtracks to accompany a slide show 06-Jun-00
6070007 Method and system for reducing an intentional
program tree represented by high-level computational constructs 30-
May-00
6069622 Method and system for generating comic panels 30-
May-00
6067639 Method for integrating automated software testing
with software development 23-May-00
6067578 Container independent control architecture 23-May-
00
606756 Fast-forwarding and filtering of network packets in
a computer system 23-May-00
6067565 Technique for prefetching a web page of potential
future interest in lieu of continuing a current information download
23-May-00
6067559 Server architecture for segregation of dynamic
content generation applications into separate process spaces 23-May-
00
6067551 Computer implemented method for simultaneous multi-
user editing of a document 23-May-00
6067550 Database computer system with application recovery
and dependency handling, write cache 23-May-00
6067547 Hash table expansion and contraction for use with
internal searching 23-May-00
6067541 Monitoring document changes in a file system of
documents with the document change information stored in a
persistent log 23-May-00
6067412 Automatic bottleneck detection by means of workload
reconstruction from performance measurements 23-May-00
6067095 Method for generating mouth features of an animated
or physical character 23-May-00
6067087 Method for building menus during idle times 23-May-
00
6065035 Method and system for procedure boundary detection
16-May-00
6065020 Dynamic adjustment of garbage collection 16-May-00
6065012 System and method for displaying and manipulating
user-relevant data 16-May-00
6065011 System and method for manipulating a categorized
data set 16-May-00
6065008 System and method for secure font subset
distribution 16-MAY-00
6065003 System and method for finding the closest match 0f
a data entry 16-May-00
6064999 Method and system for efficiently performing
database table aggregation using a bitmask-based index 16-May-00
6064406 Method and system for caching presentation data of
a source object in a presentation cache 16-MAY-00
6064393 Method for measuring the fidelity of warped image
layer approximations in a real-time graphics rendering pipeline 16-
May-00
6064383 Method and system for selecting an emotional
appearance and prosody for a graphical character 16-May-00
6061792 System and method for fair exchange of time-
independent information goods over a network 09-May-00
6061695 Operating system shell having a windowing graphical
user interface with a desktop displayed as a hypertext multimedia
document 09-MAY-00
6061692 System and method for administering a meta database
as an integral component of an information server 09-May-00
6061684 Method and system for controlling user access to a
resource in a networked computing environment 09-May-00
6061677 Data base query system and method 09-May-00
6059838 Method and system for licensed design and use of
software objects 09-May-00
6058263 Interface hardware design using internal and e
external interfaces 02-May-00
6057841 System and method for processing electronic
messages with rules representing a combination of conditions,
actions or exceptions 02-May-00
6057837 On-screen indentification and manipulation of
sources that an object depends upon 02-May-00
6057836 System and method for resizing and rearranging a
composite toolbar by direct manipulation 02-May-00
6055548 Computerized spreadsheet with auto-calculator 25-
Apr-00
6055314 system and method for secure purchase and very of
video content- Programs 25-Apr-00
6054989 Methods, apparatus and data structures for
providing a user interface, which exploits spatial memory in three-
dimensions, to objects and which provides spatialized audio 25-Apr-
00
6052735 Electronic mail object synchronization between a
desktop computer and mobile device 18-Apr-00
6052710 System and method for making function calls over a
distributed network 18-Apr-00
6052707 Preemptive multi-tasking with cooperative groups of
tasks 18-Apr-00
6052698 Reorganization of collisions in a hash bucket of a
hash table to improve system performance 18-Apr-00
6052697 Reorganization of collisions in a hash bucket of a
hash table to improve system performance 18-Apr-00
6049869 Method and system detecting and identifying text or
data encoding system 11-Apr-00
6049809 Replication optimization system and method 11-Apr-
00
6049805 Dynamic event mechanism for objects with
associational relationships 11-Apr-00
6049671 Method for identifying and obtaining computer
software from a network computer 11-Apr-00
6049663 Method and facility for uninstalling a computer
program package 11-Apr-00
6049636 Determining a rectangular box encompassing a
digital picture within a digital image 11-Apr-00
6049341 Edge cycle collision detection in graphics
environment 11-Apr-00
6047307 Providing application programs with unmediated
access to a contested hardware resource 04-Apr-00
6047300 System and method for automatically correcting a
misspelled word 04-Apr-00
6047297 Method and- system for editing actual work records
04-Apr-00
6046744 Selective refinement of progressive meshes 04-Apr-
00
[[Page 29141]]
6044408 Multimedia device interface for retrieving and
exploiting software and hardware capabilities 28-Mar-00
6044387 Single command editing of multiple files 28-Mar-00
6044366 Use of the UNPIVOT relational operator in the
efficient gathering of sufficient statistics for data mining 28-Mar-
00
6044181 Focal length estimation method and apparatus for
Construction of panoramic mosaic images 28-Mar-00
6044155 Method and system for securely archiving core data
secrets 28-Mar-00
6043826 Transferring outline fonts to devices requiring
raster fonts 28-Mar-00
6043817 Method and apparatus for arranging displayed
graphical representations on a computer interface 28-Mar-00
6041359 Data delivery system and method for delivering
computer data over a broad, cast network 21-Mar-00
6041345 Active stream format for holding multiple media
streams 21-Mar-00
6041333 Method and apparatus for automatically updating a
data file from a network 21-Mar-00
6041311 Method and apparatus for item recommendation using
automated collaborative filtering 21-Mar-00
6040841 Method and system for virtual cinematography 21-
Mar-00
6038628 System and method for encapsulating legacy data
transport Protocols for IEEE 1394 serial bus 14-Mar-00
6038610 Storage of sitemaps at server sites for holding
information regarding content 14-Mar-00
6038567 Method and system for propagating object properties
in a desktop publishing program 14-Mar-00
6038551 System and method for configuring and managing
resources on a multi-purpose integrated circuit card using a
personal computer 14-Mar-00
6037932 Method for sending computer network data as part of
vertical blanking interval 14-Mar-00
6036495 interactive simulation including force feedback 14-
Mar-00
6035379 Transaction processing for user data employing both
togging and shadow copying 07-Mar-00
6035342 Method and computer program product for
implementing object relationships 07-Mar-00
6035327 SMTP extension to preserve per-message and per-
recipient properties 07-Mar-00
6035269 Method for detecting stylistic errors and
generating replacement strings in a document containing Japanese
text 07-Mar-00
6035119 Method and apparatus for automatic generation of
text and computer-executable code 07-Mar-00
6032197 Data packet header compression for unidirectional
transmission 29-Feb-00
6032188 Method and system for controlling data flow 29-Feb-
00
6031989 Method of formatting and displaying nested
documents 29-Feb-00
6031534 Operating system function for specifying a checked
image representation and an unchecked image representation of a menu
item 29-Feb-00
6031518 Ergonomic input device 29-Feb-00
6029200 Automatic protocol rollover in streaming multimedia
data delivery system 22-Feb-00
6029147 Method and system for providing an interface for
supporting multiple formats for on-line banking services 22-Feb-00
6028604 User friendly remote system interface providing
previews of applications 22-Feb-00
6026417 Desktop publishing software for automatically
changing the layout of content-filled documents 15-Feb-00
6026416 System and method for storing, viewing, editing,
and processing ordered sections having different file formats 15-
Feb-00
6026239 Run-time code compiler for data block transfer 15-
Feb-00
6026238 Interface conversion modules based upon generalized
templates for multiple platform computer systems 15-Feb-00
6026233 Method and apparatus for presenting and selecting
options to modify a programming language statement 15-Feb-00
6025841 Method for managing simultaneous display of
multiple windows in a graphical user interface 15-Feb-00
6023744 Method and mechanism for freeing disk space in a
file system 08-Feb-00
6023714 Method and system for dynamically adapting the
layout of a document to an output device 08-Feb-00
6023710 System and method for long-term administration of
archival storage 08-Feb-00
6023523 Method and system for digital plenoptic imaging 08-
Feb-00
6023275 System and method for resizing an input Position
indicator for a user interface of a computer system 08-Feb-00
6023272 Continuously accessible computer system interface
08-Feb-00
6021412 Method and system for automatically adding graphics
to a document to illustrate concepts referred to therein 01-Feb-00
6021262 System and method for detection of, notification
of, and automated repair of problem conditions in a messaging system
01-Feb-00
6021203 Coercion resistant one-time-pad cryptosystem that
facilitates transmission of messages having different levels of
security 01-Feb-00
6018619 Method, system and apparatus for client-side usage
tracking of information server systems 25-Jan-00
6018349 Patch-based alignment method and apparatus for
construction of image mosaics 25-Jan-00
6018340 Robust display management in a multiple monitor
environment 25-Jan-00
6016520 Method of viewing at a client viewing station a
multiple media title stored at a server and containing a plurality
of topics utilizing anticipatory caching 18-Jan-00
6016515 Method, computer program product, and data
structure for validating creation of and routing messages to file
object 18-Jan-00
6016508 Server-determined client refresh periods for
dynamic directory services 18-Jan-00
6016497 Methods and system for storing and accessing
embedded information in object-relational databases 18-Jan-00
6016492 Forward extensible property modifiers for
formatting information in a program module 18-Jan-00
6016488 Method arid System for constructing queries 18-Jan-
00
6016150 Sprite compositor and method for performing
lighting and shading operations using a compositor to combine
factored image layers 18-Jan-00
6016145 Method and system for transforming the geometrical
shape of a display window for a computer system 18-Jan-00
6014744 State governing the performance of optional booting
operations 11-Jan-00
6014733 and System for creating a perfect hash using an
offset table 11-Jan-00
6014706 Methods and apparatus for implementing control
functions in a streamed vide display system 11-Jan-00
6014701 Selecting a cost-effective bandwidth for
transmitting information to an end user in a computer network 11-
Jan-00
6014681 Method for saving a document using a background
save thread 11-Jan-00
6014666 Declarative and programmatic access control of
component-based server applications using roles 11-Jan-00
6014518 Terminating polymorphic type inference program
analysis 11-Jan-00
6012096 Method and system for peer-to-peer network latency
measurement 04-Jan-00
6012075 Method and System for background grammar checking
an electronic document 04-Jan-00
6012058 Scalable system for K-means clustering of large
databases 04-Jan-00
6012052 resources, editing resource link topology, building
resource link topology templates, and collaborative filtering 04-
Jan-00
6009459 Intelligent automatic searching for resources in a
distributed environment 28-Dec-99
6009462 Apparatus and methods for optimally using available
computer resources for task execution during idle-time based on
probabilistic assessment of future task instances 28-Dec-99
6009441 Selective response to a comment line in a computer
file 28-Dec-99
6009190 Texture map construction method and apparatus for
displaying panoramic image mosaics 28-Dec-99
6009188 Method and system for digital plenoptic imaging 28-
Dec-99
6008820 processor for controlling the display of rendered
image layers and method for controlling same 28-Dec-99
6008816 Method and system for managing color specification
using attachable palettes and palettes that refer to other palettes
28-Dec-99
6008807 Method and system for controlling the display of
objects in a slide show presentation 28-Dec-99
6008806 Shell extensions for an, operating system 28-Dec-99
6008803 System for displaying programming information
287Dec-99
6008799 Method and system for entering data using an
improved on-screen keyboard 28-Dec-99
[[Page 29142]]
600633 Recovery of online sessions for dynamic directory
services 21-Dec-99
6006241 Production of a video stream with synchronized
annotations over a computer network 21-Dec-99
6006239 Method and system for allowing multiple users to
simultaneously edit a spreadsheet 21-Dec-99
6006218 Methods and apparatus for retrieving and/or
processing retrieved information as a function of a user's estimated
knowledge 21 -Dec-99
6005582 Method and system for texture mapping images with
anisotropic filtering 21-Dec-99
6005575 Foreground window determination through, process
and thread initialization 21-Dec-99
6005551 Offline force effect rendering 21-Dec-99
6003108 Method and system for interrupt-responsive
execution of communications protocols 14-Dec-99
6003097 System for automatically configuring a network
adapter without manual intervention by using a registry data
structure maintained within a computer system memory 14-Dec-99
6003061 Method and system for scheduling the use of a
computer system resource using a resource planner and a resource
provider 14-Dec-99
6003050 Method for integrating a virtual machine with input
method editors 14-Dec-9
6002852 Method and system for confirming receipt of data
opportunistically broadcast to client computer systems 14-Dec-99
5999996 Adapter for wirelessly interfacing a full-size
stand alone keyboard with a handheld computing device 07-Dec-99
5999986 Method and system for providing an event system
infrastructure 07-Dec-99
5999979 Method and apparatus for determining a most
advantageous protocol for use in a computer network 07-Dec-99
5999938 System and method for creating a new data structure
in memory populated with data from an existing data structure 07-
Dec-99
5999896 Method and system for identifying and resolving
commonly confused words in a natural language parser 07-Dec-99
5999711 Method and system for providing certificates
holding authentication and authorization information for users/
machines 07-Dec-99
5995997 Apparatus and methods for optimally allocating
currently available computer resources to future task instances
versus continued execution of current task instances 30-Nov-99
5995940 Method and system for editing multivalued
properties of an object 30-Nov-99
5995922 Identifying information related to an input word in
an electronic dictionary 30-Nov-99
5991804 Continuous media file server for cold restriping
following capacity change by repositioning data blocks in the
multiple data servers 23-Nov-99
5991802 Method and system for invoking methods of objects
over the internet 23-Nov-99
5991794 Component integration system for an application
program 23-Nov-99
5991777 System and method for performing defined actions
when grafting the name space of one storage medium into the name
space of another storage medium 23-No799
5990905 System provided child window controls 23-Nov-99
5990904 Method and system for merging pixel fragments in a
graphics rendering system 23-Nov-99
5990901 Model based image editing and correction 23-Nov-99
5990899 Method for compressing journal streams 23-Nov-99
5990886 Graphically creating e-mail distribution lists with
geographic area selector on map 23-Nov-99
5990883 Unified presentation of programming from different
physical sources 23-Nov-99
5990871 Ergonomic pointing device 23-Nov-99
5987517 System having a library of protocol independent
reentrant network interface functions for providing common calling
interface for communication and application protocols 16-Nov-99
5987481 Method and apparatus for using label references in
spreadsheet formulas 16-Nov-99
5987376 System and method for the distribution and
synchronization of data and state information between clients in a
distributed processing system 16-Nov-99
5987257 Metafile optimization 16-Nov-99
5987164 Block adjustment method and apparatus for
construction of image mosaics 16-Nov-99
5986675 System and method for animating an object in three-
dimensional space using a two-dimensional input device 16-Nov-9
5986668 Deghosting method and apparatus for construction of
image mosaics 16-Nov-99
5986623System and method for interlaced display device data
transmission 16-Nov-99
5983274 Creation and use of control information associated
with packetized network data by protocol drivers and device drivers
09-Nov-99
5983242 Method and system for preserving document integrity
09-Nov-99
5983240 Method and system of converting data from a source
file system to a target file system 09-Nov-99
5982389 Generating optimized motion transitions for
computer animated objects 09-Nov-99
5982381 Method and apparatus for modifying a cutout image
for compositing 09-Nov-99
5978815 File system primitive Providing native file system
support for remote storage 02-Nov-99
5978814 Native data signatures in a file system 02-Nov-99
5978802 System and method for providing opportunistic file
access in a network environment 02-Nov-99
5978795 Temporally ordered binary search method and system
02-Nov-99
5978566 Client side deferred actions within multiple MAPI
profiles 02-Nov-99
5978484 system and method for safety distributing
executable objects 02-Nov-99
5977977 Method and system for multi-pass rendering 02-Nov-
99
5977973 window linking 02-Nov-99
5977971 free view control 02-Nov-99
5977966 System-provided window elements having adjustable
dimensions 02-Nov-99
5977951 System and method for substituting an animated
character when a remote control physical character is unavailable
02-Nov-99
5974483 Multiple transparent access to in put peripherals
26-Oct-99
5974454 Method and system for installing and updating
program module components 26-Oct-99
5974427 Method and computer system for implementing
concurrent accesses of a database record by multiple users 26-Oct-99
5974421 Cache-efficient object loader 26-Oct-99
597416 Method of creating a tabular data stream for sending
rows of data between client and server 26-Oct-99
5974410 Method and system for filtering in a uniform data
interface 26-Oct-99
5974409 System and method for locating information in an
on-line network 26-Oct-99
5970496 Method and system for storing information in a
computer system memory using hierarchical data node relationships
19-Oct-99
5970173 Image compression and affine transformation for
image motion compensation 19-Oct-99
5968121 Method and apparatus for representing and applying
network topological data 19-oct-99
5966719 Method for inserting capitalized Latin characters
in a non-Latin document 12-Oct-99
5966716 Automatic spreadsheet forms 12-Oct-99
5966705 Tracking a user across both secure and non-secure
areas on the Internet wherein the users is initially tracked using a
globally unique identifier 12-Oct-99
5966686 Method and system for computing semantic logical
forms from syntax trees 12-Oct-99
5966140 Method- for creating progressive simplicial
complexes 12-Oct-99
5966133 Geomorphs and variable resolution control of
progressive meshes 12-Oct-99
5964886 Method and system for recovering text from a
damaged electronic file 12-Oct-99
5964843 System for enhancing device drivers 12-Oct-99
5963945 Synchronization of a client and a server in a
prefetching resource allocation system 05-Oct-99
5963894 Method and system for bootstrapping statistical
processing into a rule-based natural language Parser 05-Oct-99
5963893 Identification of words in Japanese text by a
computer system 05-Oct-99
5963209 Encoding and progressive transmission of
progressive meshes 05-Oct-99
5963197 3-D cursor positioning device 05-Oct-99
[[Page 29143]]
5961591 Downloading data while rejection of its use may be
overridden 05-Oct-99
5960423 Database system index selection using candidate
index selection for a workload 28-Sep-99
5959621 System and method for displaying data items in a
ticker display pane on a client computer 28-Sep-99
5958004 Disabling and enabling transaction committal in
transactional application components 28-Sep-99
5956724 Method for compressing a data file using a separate
dictionary file 21-Sep-99
5956721 Method and computer program product for classifying
network communication packets processed in a network stack 21-Sep-99
5956715 Method and system for controlling user access to a
resource in a networked computing environment 21-Sep-99
5956509 System and method for performing remote requests
with an 0n-line service network 21-Sep-99
5956489 Transaction replication system and method for
supporting replicated transaction-based services 21-Sep-99
5956483 System and method for making function calls from a
web browser to a local application 21-Sep-99
5956481 Method and apparatus for protecting data files on
a computer from virus infection 21-Sep-99
5956033 Document control interface and method for graphical
message document software 21-Sep-99
5953729 Using sparse file technology to stage data that
will then be stored in remote storage 14-Sep-99
5953012 Method and system for connecting to, browsing, and
accessing computer network resources 14-Sep-99
5951694 Method of redirecting a client service session to a
second application server without interrupting the session by
forwarding service-specific it]formation to the second server 14-
Sep-99
5951653 Method and system for coordinating access to
objects of different thread types in a shared memory space 14-Sep-99
5950221 Variably-sized kernel memory stacks 07-Sep-99
5950193 Interactive records and groups of records in an
address book database 07-Sep-99
5950186 Database system index selection using cost
evaluation of a workload for multiple candidate index configurations
07-Sep-99
5949975 Method and system for negotiating capabilities when
sharing an application program with multiple computer systems 07-
Sep-99
5949430 Peripheral lenses for simulating peripheral vision
on a display device 07-Sep-99
5949429 Method for performing pixel addressing operations
for a tiled image 07-Sep-99
5949428 Method and apparatus for resolving pixel data in a
graphics rendering system 07-Sep-99
5949418 Operating system for handheld computing device
having graphical window minimization/enlargement functionality 07-
Sep-99
5948113 System and method for centrally handling runtime
errors 07-Sep-99
5946698 Database computer system with application recovery
31-Aug-99
5946697 Rapid transfer of HTML files 31-Aug-99
5946696 Object property lists 31-Aug-99
5946691 Method of presenting, storing, and updating a
filing identifier for a data record 31-Aug-99
5946648 Identification of words in Japanese text by a
computer system 31-Aug-99
5945987 Interactive entertainment network system and method
for providing short sets of preview video trailers 31-Aug-99
5945981 Wireless input device, for use with a computer,
employing a movable light-emitting element and a stationary light-
receiving element 3-Aug-99
5943048 Method and apparatus for testing a graphic control
area 24-Aug-99
5941947 System and method for controlling access to data
entities in a computer network 24-Aug-99
5941944 Method for providing a substitute for a requested
inaccessible object by identifying substantially similar objects
using weights corresponding to object features 24-Aug-99
5940847 System and method for automatically correcting
multi-word data entry errors 17-Aug-99
5940833 Compressing sets of integers 17-Aug-99
5938752 System and method for encapsulating legacy data
transport protocols for IEEE 1394 serial bus 17-Aug-99
5938729 System and method for monitoring server performance
at a client computer 17-Aug-99
5936616 Method and system for accessing and displaying a
compressed display image in a computer system 10-Aug-99
5935224 Method and apparatus for adaptively coupling an
external peripheral device to either a universal serial bus Port on
a computer or hub or a game port on a computer 10-Aug-99
5935211 Distributed notification 10-Aug-99
5935210 Mapping the structure of a collection of computer
resources 10-Aug-99
5933842 Method and system for compressing publication
documents in a computer system by selectively eliminating redundancy
from a hierarchy of constituent data structures 03-Aug-99
5933838 Database computer system with application recovery
and recovery log sequence numbers to optimize recovery 03-Aug-99
5933822 Apparatus and methods for an information retrieval
system that employs natural language processing of search results to
improve overall precision 03-Aug-99
5933599 Apparatus for presenting the content of an
interactive on-line network 03-Aug-99
5933535 Object-based video compression process employing
arbitrarily-shaped features 03-Aug-99
5933145 Method and system for visually indicating a
selection query 03-Aug-99
5933139 Method and apparatus for creating help functions
03-Aug-99;
5931935 File system primitive allowing reprocessing of I/O
requests by multiple drivers in a layered driver I/O system 03-Aug-
99
5929860 Mesh simplification and construction of progressive
meshes 27-Jul-99
5929840 System and method for computer cursor control 27-
Jul-99
5926813 Database system index selection using cost
evaluation of a workload for multiple candidate index configurations
20-Jul-99
5926807aMeth0d and system for effectively representing query
results in a limited amount of memory 20-Jul-99
5926805 Dual namespace client having long and short
filenames 20-Jul-99
5925127 Method and system for monitoring the use of rented
software 20-Jul-99
5924108 Document summarizer for word processors 13-ju799
5924099 Data transfer with expanded clipboard formats 13-
Jul-99
5923897 System for adapter with status and command
registers to provide status information to operating system and
processor operative to write eject command to command register 13-
Jul-99
5923838 System and method for resolving names in an
electronic messaging environment 13-Jul-99
5923846 Method of uploading a message containing a file
reference to a server and downloading a file from the server using
the file reference 13-Jul-99
5923328 Method and system for displaying a hierarchical
sub-tree by selection of a user interface element in a sub-tree bar
control 13-Jul-99
5923307 Logical monitor configuration in a multiple monitor
environment 13-Jul-99
5922058 Optical transmission system for generating first-
edge-based serial data bit stream by inverting control output line
at mark times 13-Jul-99
5920895 Mapped file input/output with delayed zeroing 06-
Jul-99
5920734 System for providing electrical power to a computer
input device according to the interface types through the shared use
of wires and a voltage clamp 06-Jul-99
5920720 Efficient computer based virtual machine object
structure 06-Jul-99
5920697 Method of automatic updating and use of routing
information by programmable and manual routing information
configuration based on least lost routing 06-Jul-99
5920327 Multiple resolution data display 06-Jul-99
5920316 Taskbar with start menu 06-Jul-99
5919264 System and method for using data structures to
share a plurality of power resources among a plurality of devices
06-Jul-99
5917499 Interactive graph display system 29-Jun-99
5917489 System and method for creating, editing, and
distributing rules for processing electronic messages 29-Jun-99
[[Page 29144]]
5917480 Method and system for interacting with the content
of a slide presentation 29-Jun-99
5915129 Method and system for storing uncompressed data in
a memory cache that is destined for a compressed file system 22-Jun-
99
5914717 Methods and system for providing fly out menus 22-
Jun-99
5914716 Slide out interface bar 22-Jun-99
5914714 System and method for changing the characteristics
of a button by direct manipulation 22-Jun-99
5913217 Generating and compressing universally unique
identifiers (UUIDs) using counter having high-order bit to low-order
bit 15-Jun-99
5913207 Database system index selection using index
configuration enumeration for a workload 15-Jun-99
5913206 Database system multi-column index selection for a
workload 15-Jun-99
5913038 system and method for processing multimedia data
streams using filter graphs 15-Jun-99
5912661 Z-encoder mechanism 15-Jun-99
5911072 Method and system for reducing an intentional
program tree represented by high-level computational constructs 08-
Jun-99
5911068 Container independent control architecture 08-Jun-
99
5911066 Data transfer utilizing a single functionally
independent data transfer mechanism 08-Jun-99
5910802 Operating system for handheld computing device
having taskbar auto hide 08-Jun-99
5910800 Usage tips for on-screen touch-sensitive controls
08-Jun-99
5907837 Information retrieval system in an on-line network
including separate content and layout of published titles 25-May-99
5907685 System and method for synchronizing clocks in
distributed computer nodes 25-May-99
5905987 Method, data structure, and computer program
product for object state storage in a repository 18-May-99
5905981 Automatically associating archived multimedia
content with current textual content 18-May-99
5905894 Meta-programming methods and apparatus 18-May-99
5905890 Event architecture system management in an
operating system 18-May-99
5905884 Method and system for registering and retrieving
data formats for objects using a persistent registry 18-May-99
5905522 Resource allocation method for interactive
televideo system 18-May-99
5905508 Method and System for dynamically plotting an
element on an image using a table 18-May-99
5905492 Dynamically updating themes for an operating system
shell 18-May-99
5903917 Method and system-for alignment of blocks in a
program image 11-May-99
5903905 Method for simultaneously constructing and
displaying a dynamic preview of a document that provides an accurate
customized document 11-May-99
5903903 System for determining the sequence and placement
of pages for a multiple-page document 11-May-99
5903896 Method for installing a file on demand using a
preview 11-May-99
5903894 System and method for using a hierarchical data
structure to control and identify devices and represent connections
between the devices 11-May-99
5903754 Dynamic layered protocol stack 11-May-99
5903728 Plug-in control including an independent plug-in
process 11-May-99
5903265 System-provided window elements having adjustable
dimensions 11-May-99
5903255 Method and system for selecting a color value using
a hexagonal honeycomb 11-May-99
5901312 Providing application programs with unmediated
access to a contested hardware resource 04-May-99
5900905 System and method for linking video, services and
applications in an interactive television system 04-May-99
5900004 Method and system for interactive formatting of
word processing documents with deferred rule evaluation and format
editing 04-May-99
5899999 Iterative convolution filter particularly suited
for use in an image classification and retrieval system 04-May-99
5898868 Method and system for file system management using
a flash-erasable, programmable, read-only memory 27-Apr-99
5898819 System for black and white printing of colored
pages 27-Apr-99
5898170 Apparatus and method for finding optimal sensitivity
level for optical encoding circuit 27-Apr-99
5897650 Encapsulation of extracted portions of documents
into objects 27-Apr-99
5897642 Method and system for integrating an object-based
application with a version control system 27-Apr-99
5897640 Method and system of associating, synchronizing and
reconciling computer files in an operating system 27-Apr-99
5897622 Electronic shopping and merchandising system 27-
Apr-99
5893915 Local font face selection for remote electronic
document browsing 13-Apr-99
5893107 Method and system for uniformly accessing multiple
directory services 06-Apr-99
5893077 Method and apparatus for generating and collecting
a billing event object within an on-line network 06-Apr-99
5892917 System for log record and tog expansion with
inserted log records representing object request for specified
object corresponding to cached object copies 06-Apr-99
5892904 Code certification for network transmission 06-Apr-
99
5892521 System and method for composing a display frame of
multiple layered graphic sprites 06-Apr-99
5890174 Method and system for constructing a formula in a
spreadsheet 30-Mar-99
5890171 Computer system and computer-implemented method for
interpreting hypertext links in a document when including the
document within another document 30-Mar-99
5890161 Automatic transaction processing of component-based
server applications 30-Mar-99
5890147 Scope testing of documents in a search engine using
document to folder mapping 30-Mar-99
5889952 Access check system utilizing cached access
permissions 30-Mar-99
5889522 System provided child window controls 30-Mar-99
5889521 System provided child window controls 30-Mar-99
5886701 Graphics rendering device and method for operating
same 23-Mar-99
5886699 Method and system for transferring data to common
destinations using a common destination list 23-Mar-99
5886695 System provided child window controls 23-Mar-99
5886694 Method for automatically laying out controls in a
dialog window 23-Mar-99
5884316 Implicit session context system with object state
cache 16-Mar-99
5884306 System and method for directly manipulating fields
for grouping items 16-Mar-99
5883633 Method and system of variable run length image
encoding using sub-palette 16-Mar-99
5883627 Advanced graphics controls 16-Mar-99
5881292 Dynamic versioning system for multiple users of
multi-module software system 09-Mar-99
5881252 Method and apparatus for automatically configuring
circuit cards in a computer system 09-Mar-99
5881230 Method and system for remote automation of object
oriented applications 09-Mar-99
5880744 Method and apparatus for vector transformation
involving a transformation matrix 09-Mar-99
5880737 Method and system for accessing texture data in
environments with high latency in a graphics rendering system 09-
Mar-99
5880733 Display system and method for displaying windows of
an operating system to provide a three-dimensional workspace for a
computer system 09-Mar-99
5880731 Use of avatars with automatic gesturing and bounded
interaction in on-line chat session 09-Mar-99
5878421 Information map 02-Mar-99
5878410 File system sort order indexes 02-Mar-99
5878386 Natural language parser with dictionary-based part-
of-speech probabilities 02-Ma-99
5878282 Portable information device and system and method
for downloading executable instruction from a computer to the
portable information device 02-Mar-99
5877765 Method and system for displaying internet shortcut
icons on the desktop 02-Mar-99
5877758 System and method for using a slider control for
controlling parameters of a display item 02-Mar-99
5875289 Method and system for simulating auto-init mode DMA
data transfers 23-Feb-99
[[Page 29145]]
5874960 Method and system for sharing applications between
computer systems 23-Feb-99
5873660 Morphological search and replace 23-Feb-99
5873124 Virtual memory scratch pages 16-Feb-99
5873118 Method and system for storing file system state
information in multiple sectors based on update frequency 16-Feb-99
5873081 Document filtering via directed acyclic graphs 16-
Feb-99
5872930 Load balancing between E-mail servers within a
local area network 16-Feb-99
5870763 Database computer system with application recovery
and dependency handling read cache 09-Feb-99
5870556 Monitoring a messaging link 09-Feb-99
5870097 Method and system for improving shadowing in a
graphics rendering system 09-Feb-99
5867657 Distributed scheduling in a multiple data server
system 02-Feb-99
5867652 Method and apparatus for supporting multiple
outstanding network requests on a single connection 02-Feb-99
5867650 Out-of-band data transmission 02-Feb-99
5867646 Providing secure access for multiple processes
having separate directories 02-Feb-99
5867175 Method and apparatus for scriping animation 02-Feb-
99
5867173 Method for rendering a spline for scan conversion
of a glyph comprising a plurality of discrete segments 02-Feb-99
5867166 Method and system for generating images using
Gsprites 02-Feb-99
5867144 Method and system for the direct manipulation of
information, including non-default drag and drop operation 02-Feb-99
5864848 Goal-driven information interpretation and
extraction system 26-Jan-99
5864711 System for determining more accurate translation
between first and second translator, and providing translated data
to second computer if first translator is more accurate 26-Jan-99
5864669 Method and system for accessing a particular
instantiation of a server process 26-Jan-99
5864342 Method and system for rendering graphical objects
to image chunks 26-Jan-99
5864337 Mehtod for automatically associating multimedia
features with map views displayed by a computer implemented atlas
program 26-Jan-99
5862337 Determining throughput dynamically 19-Jan-99
5862318 System generating a gapless series of identity
values 19-Jan-99
5860073 Style sheets for publishing system 12-Jan-99
5859648 Method and system for providing substitute computer
fonts 12-Jan-99
5857190 Event logging system and method for logging events
in a network system 05-Jan-99
5854932 Compiler and method for avoiding unnecessary
recompilation 29-Dec-91
5854931 Method and system for accessing virtual base
classes 29-Dec-98
5852823 Image classification and retrieval system using a
query-by-example paradigm 22-Dec-98
5852443 Method and system for memory decomposition in a
graphics rendering system 22-Dec-98
5852441 Shell extensions for an operating system 22-Dec-98
5852436 Notes facility for receiving notes while the
computer system ??s in a screen mode 22-Dec-98
5850232 Method and system for flipping images in a window
using overlays 15-Dec-98
5845300 Method and apparatus for suggesting completions for
a partially entered data item based on previously-entered,
associated data items 01-Dec-98
5845293 Method and system of associating, synchronizing and
reconciling computer files in an operating system 01-Dec-98
5845280 Method and apparatus for transmitting a file in a
network using a single transmit request from a user mode process to
a kernel-mode process 01-Dec-98
5845273 Method and apparatus for integrating multiple
indexed files 01-Dec-98
5845084 Automatic data display formatting with a networking
application 01-DEC-98
5845077 Method and system for identifying and obtaining
computer software from remote c9mputer 01-Dec-98
5844569 Display device interface including support for
generalized flipping of surfaces 01-Dec-98
5844551 Shell extensions for an operating system 01-Dec-98
5842214 Distributed file system providing a unified name
space with efficient name resolution 24-Nov-98
5842211 Method and system for transferring a bank file to
an application program 24-Nov-9
5842180 Method and system for detecting and correcting
errors in a spreadsheet formula 24-Nov-98
5842018 Method and system for referring to and binding to
objects using identifier objects 24-Nov-98
5842016 Thread synchronization in a garb age-collected
system using execution barriers 24-Nov-98
5838963 Apparatus and method for compressing a data file
based on a dictionary file which matches segment lengths 17-Nov-98
5838923 Method and system synchronizing computer mail user
directories 17-Nov-98
5838336 Method and system for displaying images on a
display device 17-Nov-98
5838322 Shell extensions for an operating system 17-Nov-98
5838320 Method and system for scrolling through data 17-
Nov-98
5838319 System provided child window control far displaying
items in a hierarchical fashion 17-Nov-98
5838317 Method and apparatus for a arranging displayed
graphical representations on a computer interface 17-Nov-98
5838304 Packet-based mouse data protocol 17-Nov-98
5835964 Virtual memory system with hardware TLB and
unmapped software TLB updated from mapped task address maps using
unmapped kernel address map 10-Nov-98
5835908 Processing multiple database transactions in the
same process to reduce process overhead and redundant retrieval from
database servers 10-Nov-98
5835904 System and method for implementing database cursors
in a client/server environment 10-Nov-98
5835086 Method and apparatus for digital painting 10-Nov-98
5835084 Method and computerized apparatus for
distinguishing between read and unread messages listed in a
graphical message window 10-Nov-98
5832528 Method and system for selecting text with a mouse
input device in a computer system 03-Nov-98
5832514 System and method for discovery based data recovery
in a store and forward replication process 03-Nov-98
5832502 Conversation index builder 03-Nov-98
5832479 Method for compressing full text indexes with
document identifiers and location offsets 03-Nov-98
5832225 Method computer program product and system for
maintaining replication topology information 03-Nov-98
5831606 Shell e extensions for an operating system 03-Nov-
98
5828885 Method and system for merging files having a
parallel format 27-Oct-98
5828364 One-piece case top and integrated switch for a
computer pointing device 27-Oct-98
5828361 Method and system for rapidly transmitting
multicolor or gray scale display data having multiple bits per pixel
to a display device 27-Oct-98
5826269 Electronic mail interface for a network server 20-
Oct-98
5826257 Method and structure for maintaining and utilizing
a lookup value associated with a stored database value 20-Oct-98
5826041 Method and system for buffering network packets
that are transferred between a V86 mode network driver and a
protected mode computer program 20-Oct-98
5825363 Method and apparatus for determining visible
surfaces 20-Oct-98
5825357 Continuous?? accessible computer system interface
20-Oct-98
5822751 Efficient multidimensional data aggregation
operator implementation 13-Oct-98
5822526 system, and method for maintaining and
administering email address names in a network 13-Oct-98
5822525 Method and system for Presentation conferencing 13-
Oct-98
5819293 Automatic Spreadsheet forms 06-Oct-98
5819288 Statistically based image group descriptor
particularly suited for use in an image classification and retrieval
system 06-Oct-98
5819272 Record tracking in database replication 06-Oct-98
5819112 Apparatus for controlling an I/O port by queuing
requests and in response to
[[Page 29146]]
a predefined condition, enabling the I/O port receive the interrupt
requests 06-Oct-98
5819107 Method for managing the assignment of device
drivers in a computer system 06-Oct-98
5819055 Method and apparatus for docking re-sizeable
interface boxes 06-Oct-98
5819032 Electronic magazine which is distributed
electronically from a publisher to multiple subscribers 06-Oct-98
5819030 System and method for configuring a server computer
for optimal performance for a particular server type 06-Oct-98
5818465 Fast display of images having a small number of
colors with a VGA-type adapter 06-Oct-98
5818447 System and method for in-place editing of an
electronic mail message using a separate Program 06-Oct-98
5815793 Parallel computer 29-Sep-98
5815705 Method and computer system for integrating a
compression System with an operating System 29-Sep-98
5815703 Computer-based uniform data interface (UDI) method
and system using an application programming interface (API) 29-Sep-
98
5815689 Method and computer program product for
synchronizing the processing of multiple data streams and matching
disparate processing rates using a standardized clock mechanism 29-
Sep-98
5815682 Device independent modem interface 29-Sep-98
5815665 System and method for providing trusted brokering
services over a distributed network 29-Sep-98
5813013 Representing recurring events 22-Sep-98
5813008 Single instance Storage of in formation 22-Sep-98
5812844 Method and system for scheduling the execution of
threads using optional time-specific scheduling constraints 22-Sep-
98
5812793 System and method for asynchronous store and
forward data replication 22-Sep-98
5812784 Method and apparatus for supporting multiple,
simultaneous services over multiple, simultaneous connections
between a client and network server 22-Sep-98
581278?? Method, system, and product for assessing a server
application performance 22-Sep-98
5812773 System and method for the distribution of
hierarchically structured data 22-Sep-98
5812430 Componentized digital signal processing 22-Sep-98
5812136 System and method for fast rendering of a three
dimensional graphical object 22-Sep-98
5812123 System for displaying Programming information 22-
Sep-98
5809564 Apparatus and method for swapping blocks of memory
between a main memory area and asecondary storage area of a computer
system 15-Sep-98
5809329 System for managing the configuration of a computer
system 15-Sep-98
5809295 Method and apparatus for storing compressed file
data on a disk where each MDFAT data structure includes an extra
byte 15-Sep-98
5808617 Method and system for depth complexity reduction in
a graphics rendering system 15-Sep-98
5808604 Apparatus and method for automatically positioning
a cursor on a control 15-Sep-98
5806065 Data system with distributed tree indexes and
method for maintaining the indexes 08-Sep-98
5805911 Word prediction system 08-Sep-98
5805896 System for writing main memory address of object to
secondary storage when storing object and reading main memory
address of object when retrieving object from secondary storage 08-
Sep-98
5805885 Method and system for aggregating objects 08-Sep-98
5805170 Systems and methods for wrapping a closed polygon
around an object 08-Sep-98
5805165 Method of selecting a displayed control item 08-
Sep-98
5805164 Data display and entry using a limited-area display
panel 08-Sep-98
5802590 Method and system for providing secure access to
computer resources 01-Sep-98
5802526 system and method for graphically displaying and
navigating through an interactive voice response menu 01-Sep-98
5802380 Method and system for uniform access of textual
data 01-Sep-98
5802367 Method and system for transparently executing code
using a surrogate Process 01-Sep-98
5802305 System for remotely waking a sleeping computer in
power down state by comparing incoming packet to the list of packets
storing on network interface card 01-Sep-98
5802304 Automatic dialer responsive to network programming
interface access O1-Sep-98
5801717 Method and System in display device interface for
managing surface memory 01-Sep-98
5801701 Method and system for ??place interaction with
contained objects 01-Sep-98
5801692 Audi0-visual user interface controls 01-Sep-98
5801664 System and method for transmitting data from a
computer to a portable information device using RF emissions from a
computer monitor 01-Sep-96
5835881 Method and system for traversing linked list record
based upon write-once predetermined bit value of secondary pointers
25-Aug-98
5799321 Replicating deletion information using sets of
deleted record lbs 25-Aug-98
5799184 System and method for identifying data records
using solution bitmasks 25-Aug-98
796988 Method and system using dedicated location to share
information between real mode and protected mode drivers 18-Aug-98
796402 Method and system for aligning windows on a computer
screen 18-Aug-98
794256 Pointer swizzling facility using three-state
references to manage access to referenced objects 11-Aug-96
5794253 Time based expiration of data objects in a store
and forward replication enterprise 11-Aug-98
5794230 Method and system for creating and searching
directories on a server 11-Aug-98
5794038 Method and system for notifiying clients using
multicasting and for connecting objects using delayed m?? binding
11-Aug-98
5794006 System and method for editing content in an on-line
network 11-Aug-98
5793973 Method and system for opportunistic broadcasting of
data 11-Aug-98
5793970 Method and computer program product for converting
message identification codes using a conversion map accesible via a
data link 11-Aug-98
5793374 Specialized shaders for shading objects in computer
generated images 11-Aug-98
5793356 System and method for the software emulation Of a
computer joystick 11-Aug-98
5790863 Method and system for generating and displaying a
computer program 04-Aug-98
5790858 Method and system for selecting instrumentation
points in a computer program 04-Aug-98
5790677 System and method for secure electronic commerce
transactions 04-Aug-98
5790126 Method for rendering, a spline for scan conversion
of a glyph 04-Aug-98
5790115 System for character entry a display screen 04-Aug-
91
5787451 Method for background spell checking a word
processing document 28-Jul-98
5787442 Creating interobject reference links in the
directory service of a store and forward replication computer
network 28-Jul-98
5787417 Method and system for selection of hierarchically
related information using a content-variable list 28-Jul-98
5787411 Method and apparatus for database filter generation
by display selection 28-Jul-98
5787262 System and method for distributed conflict
resolution between data objects replicated across a computes network
28-Jul-98
5787259 Digital interconnects of a PC with consumer
electronics devices 28-Jul-98
5787247 Replica administration without data loss in a store
and forward replication enterprise 28-Jul-98
5787246 System for configuring devices for a computer
system 28-Jul-98
5786818 Method and system for activating focus 28-Jul-98
5784628 Method and system for controlling power consumption
in a computer system 21-Jul-98
5784618 Method and system for managing ownership of a
released synchronization mechanism 21-Jul-98
5784616 Apparatus and methods for optimally using available
computer resources for task execution during idle-time for future
task instances exhibiting incremental value with computation 21-Jul-
98
5784615 Computer system messaging architecture?? 21-Jul-98
[[Page 29147]]
5784555 Automation and dial-time checking of system
configuration for internet 21-Jul-98
5781902 Method, computer program product, and system for
extending the capabilities of an existing process to store and
display foreign data 14-Jul-98
5781896 Method and system for efficiently performing
database table aggregation using an aggregation index 14-Jul-98
5781797 Method and system for configuring device driver by
selecting a plurality of component drivers to be included in the
device driver 14-Jul-98
5781723 System and method for self-identifying a portable
information device to a computing unit ??4-Jul-98
5781195 Method and system for rendering tw0-dimensional
views of a three-dimensional surface 14-Jul-98
578119 Method and System for transferring a slide
presentation between computers 14-Jul-98
5778403 Method for displaying text on a rendering device to
accurately represent the text as if displayed on a target device 07-
Jul-98
5778??02 Method and system for auto-formatting a document
using an event-based rule engine to format a document as the user
types 07-Jul-98
5778375 Database normalizing system 07-Jul-98
5778372 Remote retrieval and display management of
electronic document with incorporated, images 07-Jul-98
5778361 Method and system for fast indexing and searching
of text in compound-word languages 07-Jul-98
5778069 Non-biased pseudo random number generator 07-July-
98
5774725 Method and computer program product for simplifying
construction of a program for testing computer software subroutines
in an application programming interface 30-Jun-98
5774668 System for on-line service in which gateway
computer uses service map which includes loading condition of
servers broadcasted by application servers for load balancing 30-
Jun-98
5774126 Method and apparatus for dynamically changing the
color depth of objects displayed in a computer system 30-Jun-98
5771399 Optical wand having an end shaped to register to
the surface of a portable device to align respective optical element
pairs for data transfer 23-Jun-98
5771384 Method and system for replacement and extension of
container interfaces 23-Jun-98
5771381 Method and System for adding configuration files
for a user 23-Jun-98
5771034 Font format 23-Jun-98
5771033 Method and system for dissolving an image displayed
on a computer screen 23-Jun-98
5768566 Method and facility for uninstalling a computer
program package 16-Jun-98
5768519 Method and apparatus for merging user accounts from
a source security domain into a target security domain 16-Jun-98
5768515 Method for generating and storing two segments of
HTTP message headers with different lifetimes and combining them to
form a single response header 16-Jun-98
5767835 Method and system for displaying buttons that
transition from an active state to an inactive state 16-Jun-98
5765180 Method and system for correcting the spelling of
misspelled words 09-Jun-98
5765156 Data transfer with expanded clipboard formats 09-
Jun-98
5764983 Method and system for efficiently creating a new
file associated with an application program 09-Jun-98
5764913 Computer network status monitoring system 09-Jun-98
5764890 Method and system for adding a secure network
server ??o an existing computer network 09-Jun-98
5764241 Method and system for modeling and presenting
integrated media with a declarative modeling language for
representing reactive behavior 09-Jun-98
5761689 Autocorrecting text typed into a word processing
document 02-Jun-98
5761669 Controlling access to objects on multiple operating
systems 02-Jun-98
5761510 Method for error identification in a program
interface 02-Jun-98
5761477 Methods for safe and efficient implementations of
virtual machines 02-Jun-98
5760788 Graphical Programming system and method for
enabling a person ??o learn text-based programming 02-Jun-98
5760773 Methods and apparatus for interacting with data
objects using action handles 02-Jun-98
5760770 System and method defining a view to display data
02-Jun-98
5760768 Method and system for customizing a user interface
in a computer system 02-Jun-98
575836 Meta-data structure and handling 26-May-98
5758358 Method and system for reconciling sections of
documents 26-May-98
5758352 Common name space for long and short filenames 26-
May-98
5758337 Database partial replica generation system 26-May-
98
5758184 System for performing asynchronous file operations
requested by runnable threads by processing completion messages with
different queue thread and checking for completion by runnable
threads 26-May-98
5758154 Method and system for storing configuration data
into a common registry 26-May-98
5757920 Logon certification 26-May-98
5757371 Taskbar with start menu 26-May-98
5754890 System for automatic identification of a computer
data entry device interface type using a transistor to sense the
voltage generated by the interface and output a matching voltage
level 19-May-98
5754862 Method and System for accessing virtual base
classes 19-May-98
5754858 Customizable application project generation process
and system 19-May-98
5754854 Method and system for providing a group of parallel
resources as a proxy for a single shared resource 19-May-98
5754175 Method and system for in-??ace interaction with
contained objects19-May-98
5752252 Storage of file data on disk in multiple
representations 12-May-98
5752243 Computer method and storage structure for storing
and accessing multidimensional data 12-May-98
5752038 Method and system for determining an optimal
placement order for code portions within a module 12-May-98
5752031 Queue object for controlling concurrency in a
computer system 12-May-98
5752025 Method, computer program product, and system for
creating and displaying a categorization table 12-May-98
5751283 Resizing a window and an object on a display screen
12-May-98
5751282 System and method for calling video on demand using
an electronic programming guide 12-May-98
5751276 Method for calibrating touch panel displays 12-May-
98
5748980 System for configuring a computer system 05-May-98
5748895 transmitted from a display device while
concurrently displaying human-readable explanation of the Pattern
05-May-98
5748512 Adjusting keyboard 05-May-98
5748468 Prioritized c0-processor resource manager and
method 05-May-98
5748191 Method and system for creating voice commands using
an automatically maintained log interactions performed by a user 05-
May-98
5745904 Buffered table use index 28-Apr-98
5745902 Method and system for accessing a file using file
names having different filename formats 28-Apr-98
5745767 Method and system, for testing the interoperability
of application Programs 28-Apr-98
5745764 Method and system for aggregating objects 28-Apr-98
5745752 Dual namespace client having long and short
filenames 28-Apr-98
5745738 Method and engine for automating the creation of
simulations for demonstrating use of software 28-Apr-98
5745119 C01or data conversion using real and virtual
address spaces 28-Apr-98
5745110 Method and apparatus for arranging and displaying
task schedule information in a calendar view format 28-Apr-98
5745103 Real-time palette negotiations in multimedia
presentations 28-Apr-98
5745095 Compositing digital information on a display screen
based on screen descriptor 28-Apr-98
5742848 System for passing messages between source object
and target object utilizing generic code in source object to invoke
any member function of target object by executing the same
instructions 21-Apr-98
5742835 Method and system of sharing common formulas in a
spreadsheet program and of adjusting the same to conform with
editing operations 21-Apr-98
5742829 Automatic software installation on heterogeneous
networked client computer systems 21-Apr-98
[[Page 29148]]
5742826 Compiler and method for evaluation or foreign
syntax expressions in source code 21-Apr-98
5742825 Operating System for office machines 21-Apr-98
574281.8 Method and system of converting data from a source
file system to a target file system 21-Apr-98
5742773 Method and System for audio compression negotiation
for multiple channels 21-Apr-98
5742756 System and method of using smart cards to perform
security-critical operations requiring user authorization 21-Apr-98
5742278 Force feedback Joystick with digital signal
processor controlled by host processor 2??-Apr-98
5742260 System and method for transferring data using a
frame-scanning display device 21-APr-98
5740456 Methods and system for controlling intercharacter
spacing as font size and resolution of output device vary 14-Apr-98
5740439 Method and System for referring to and binding to
objects ??sing identifier objects14-Apr-98
5740405 Method and system for providing data compatibility
between different versions of a software program 14-Apr-98
5737733 Method and system for searching compressed data 07-
Apr-98
5737611 Methods or dynamically, escalating locks On a
shared resource 07-Apr-98
5737591 Database view generation system 07-Apr-98
5736987 Compression of graphic data normals 07-APr-98
5736983 Shellextensions for an 0Perating system 07-Apr-98
5734904 Method and system for calling one of a set of
routines designed for direct invocation by programs of a second type
when invoked by a program of the firs type 31-Mar-98
5734858 Method and apparatus for simulating banked memory
as a linear address space 31-Mar-98
5734387 Method and apparatus for creating and performing
graphics operations on device-independent bitmaps 31-Mar-98
5732267 Caching/prewarming data loaded from ?? 24-Mar-98
5732265 Storage optimizing encoder and method 24-Mar-98
5732256 CD-ROM optimization and stream splitting 24-Mar-98
5731844 Television scheduling system for displaying a grid
representing scheduled layout and selecting a programming parameter
for display or recording 24-Mar-981
5729748 Call template builder and method17-Mar-98
5729745 Methods and apparatus for creating a base class for
manipulating external data connections in a computer generated
document 17-Mar-98
5729689 Network naming services proxy agent 17-Mar-98
5727178 System and method for reducing stack physical
memory requirements in a multitasking operating system 10-Mar-98
5726687 Auto-scrolling with mouse speed computation during dragging
10-Mar-98
5724594 Method and system for automatically identifying
morphological information from a machine-readable dictionary 03-Mar-
91
5724588 Method and system for network marshaling of
interface pointers for rem0te procedure Calls 03-Mar-98
5724558 System and method for dynamic data packet
configuration 03-Mar-98
5724492 Systems and method for displaying control objects
including a plurality of panels 03-Mar-98
5724074 Method and system for graphically programming
mobile toys 03-Mar-98
5724070 common digital representation of still images for
data transfer with both slow and fast data transfer rates 03-Mar-98
5724068 Joystick with uniform center return force 03-Mar-98
5721919 Method and system for the link tracking of objects
24-Feb-98
5721916 Method and system for shadowing file system
structures from multiple types, of networks 24-Feb-98
5721847 Method and system for liking controls with cells of
a spread sheet 24-Feb-98
5721781 Authentication system and method for smart card
transactions 24-Feb-98
5719941 Method for changing passwords on a remote computer
17-Feb-98
5717902 Method and system for selectively applying an
appropriate object ownership model 10-Feb-98
5717845 Method and apparatus for transferring a brush
pattern to a destination bitmap 10-Feb-98
5715441 Method and system for storing and accessing data in
a compound document using object linking 03-Feb-99
5715415 Computer application with help pane integrated into
workspace 03-Feb-98
5713020 Method and system for generating database queries
containing multiple levels of aggregation 27-Jan-98
5713003 Method and system for caching data 27-Jan-98
5713002 Modified buddy system for managing storage space
27-Jan-98
5710941 System for substituting protected mode hard disk
driver for real mode driver by trapping test transfers to verify
matching geometric translation 20-Jan-98
5710928 Method and system for connecting objects in a
computer system 20-Jan-98
5710925 Method and system for aggregating objects 20-Jan-98
5710880 Method and system for creating a graphic image with
geometric descriptors 20-Jan-98
5709219 Method and apparatus to create a complex tactile
sensation 20-Jan-9
5708814 Method and apparatus for reducing the rate of
interrupts by generating a single interrupt for a group of events
13-Jan-98
5708812 Method and apparatus for Migrating from a source
domain network controller to a target domain network controller 13-
Jan-98
5706505 Method and system for binding data in a computer
system 06-Jan-98
5706504Method and system for storing 06-Jan-98
5706483 Run-time code compiler for data block transfer 06-
Jan-98
5706462 Self optimizing font width cache 06-Jan-98
5706458 Method and system for merging menus of application
programs 06-Jan-98
5706450 Method and system for presenting alternatives for
selection using adaptive learning 06-Jan-98
5706411 Printer status user interface and methods relating
thereto 06-Jan-98
5701511 Redbook audio sequencing 23-Dec-97
5701499 Method and system for automatically entering a data
series into contiguous cells of an electronic spreadsheet Program or
the like 23-Dec-91
5701491 Method and system for transitioning the network
mode of a workstation 23-Dec-97
5701469 Method and System for generating accurate search
result using a content-index 23-Dec-97
5701462 Distributed file system providing a unified name
space with efficient name resolution 23-Dec-97
5701461 Method and system for accessing a remote database
using pass-through queries 23-Dec-97
5701460 Intelligent joining system for a relational
database 23-Dec-97
5701424 Palladian menus and methods relating thereto 23-
Dec-97
5701137 Method for separating a hierarchical tree control
into one or more hierarchical child tree controls in a graphical
user interface 23-Dec-97
5699518 System for selectively setting a server node,
evaluating to determine server node for executing server code, and
downloading server code prior to executing if necessary??6??Dec-91
696946 Method and apparatus for efficient transfer of data
to memory 09-Dec-97
5694610 Method and system for editing and formatting.data
in a dialog window 02-Dec-97
5694606 Mechanism for using common code to handle hardware
interrupts in multiple processor modes 02-Dec-97
5694563 Method and system for transferring data to common
destinations using a common destination list 02-Dec-97
5694561 Method and System for grouping and manipulating
windows 02-Dec-97
5694559 on-line help method and system utilizing free text
query 02-Dec-97
5694153 Input device for providing multi-dimensional
position coordinate signals to a computer 02-Dec-97
5692189 Method and apparatus for isolating circuit boards
in a computer system 25-Nov-97
5692177 Method and system for data set storage by
iteratively searching for perfect hashing functions 25-Nov-9
569217 Methodarid System for combining prefix and first
character searching of a list 25-Nov-97
5692157 Method and system for transferring data between
objects using registered data formats 25-N0v-97
[[Page 29149]]
5692??44 Method and System for depicting an object,
springing back from a position 25-Now97
5691745 Low power pixel-based visual display device having
dynamically changeable number of grayscale shades 25-Nov-97
5689709 Method and system for invoking methods of an object
18-Nov-97
5689703 Method and system for referring to and binding to
objects using identifier objects 18-Nov-97
5689700 Unification of directory service with file system
services 18-Nov-97
5689664 Interface sharing between objects 18-Nov-97
5689663 Remote controller user interface and methods
relating thereto 18-Nov-97
5689662 Shell extensions for an operating system 18-Nov-97
5689638 Method for providing access to independent network
resources by establishing connection using an application
programming interface function call without prompting the user for
authentication data 18-Nov-97
5689565 Cryptography System and method for providing
cryptographic services for a computer application 18-N0v-97
5687392 System for allocating buffer to transfer data when
user buffer is mapped to physical region that does not conform to
physical addressing limitations of controller ??-Nov-97
5687331 Method and system for displaying an animated focus
item 11-Nov-97
5685003 Method and system for automatically indexing data
in a document using a fresh index table 04-Nov-97
5685001 Method and system for automatically entering a data
series into contiguous cells of an electronic spreadsheet program or
the like 04-Nov-97
5684993 Segregation of thread-specific information from
shared task information 04-Nov-97
5684510 Method Of font rendering employing grayscale
processing of grid fitted fonts 04-Nov-97
5682536 Method and system for referring to and binding to
objects using identifier objects 28-Oct-97
5682532 System and method having programmable containers
with functionality for managing objects 28-Oct-97
5682511 Graphical viewer interface for an interactive
network system 28-Oct-97
5682510 Method and system for adding application defined
properties and application defined property sheet pages 28-Oct-97
5682478 Method and apparatus for supporting multiple,
simultaneous services over multiple, simultaneous connections
between a client and network server 28-Oct-97
5682469 software platform having a real world interface
with animated characters 28-Oct-97
5680629 Method and system for previewing computer output
21-Oct-97
5680616 Method and system for generating and maintaining
property sets with unique format identifiers 21-Oct-97
5680582 Method for heap coalescing where blocks do not
cross page of segment b0ur??dartes 21-Oct797
5680559 Shell extensions for an operating system
21-00t-97
5680458 Root key compromise recovery 2??-Oct-97
5678034 Accessbar arbiter 14-Oct-97
5678014 Folder rack icons 14-Oct-97
5678012 Method and system for selecting a video piece from
a database 14-Oct-97
5678007 Method and apparatus for supporting multiple
outstanding network requests on a single connection 14-Oct-97
5678002 System and method for providing automated customer
support 14-Oct-97
5677708 System for displaying a list on a display screen
14-Oct-97
5675833 Apparatus and method for detecting insertions and
removals of floppy disks by monitoring write-protect signal 07-Oct-
97
5675831 Method for automatic installation of a modem
wherein unique identification for the device registry is computed,
from modem responses to queries by the system 07-Oct-97
5675813 system and method for power control in a universal
serial bus 07-Oct-97
5675796 Concurrency management component for use by a
computer program during the transfer of a message 07-Oct-97
5675793 Dynamic allocation of a common buffer for use by a
set of software routines 07-Oct-97
5675787 Unification of directory service with file system
services 07-Oct-97
5675782 Controlling access to objects on multiple operating
systems 07-Oct-97
5675520 Method for extending a common user interface 07-
Oct-97
5673401 Systems and methods for a customizable sprite-based
graphical user interface 30-Sep-97
5673394 Method of sharing memory between an operating
system and an application program 30-Sep-97
5670955 Method and apparatus for generating directional and
force vector in an input device23-Sep-97
5668996 Rendering CD redbook audi0 using alternative
storage, locations and formats 16-8ep-97
5666526Method and system for supporting scrollable, updatable
database queries 09-Sep-97
5666523 Method and system for distributing asynchronous
input from a system input queue to reduce context switches 09-Sep-97
5666489 Method and apparatus for enhancing capabilities of office
machines 09-Sep-97 Portable information device and system and method
for downloading executable instructions from a
5664228 computer to the portable in formation device 02-
Sep-97
5664191 Method and system for improving the locality of
memory references during execution of a computer program 02-Sep-97
5664??78 Method and system for organizing internal
structure of a file 02-Sep-97
5664173 Method and apparatus for generating database
queries from a meta-query pattern 02-Sep-97
5664133 Context sensitive menu system/menu behavior 02-Sep-
97
5659791 Encapsulation of extracted portions of documents
into objects 19-Aug-97
5659747 Multiple level undo/redo mechanism ??9??-Aug-97
5659685 Method and apparatus for maintaining network
communications on a computer capable of connecting to a WAN and LAN
19-Aug-97
5659674 System and method for implementing an operation
encoded in a graphics image 19-Aug-9
56.59336 Method and apparatus for creating and transferring
a bitmap 1g-Aug-g??
5657050 Distance control for displaying a cursor 12-Aug-97
5655154 Method and system for sharing utilities between
operating systems 05-Aug-g7
5655148 Method for automatically configuring devices
including a network adapter without manual intervention and without
prior configuration information 05-Aug-97
5655077 Method and System for authenticating access to
heterogeneous computing services 29-Aug-97
5652913 System for providing intercommunication of I/O
access factors stored in a shared data structure,accessed and
maintained by both file System and device driver 29-Jul-9
5652901 Method and system for previewing computer Output
29-Jul-97 System for interconnecting software components in an
object oriented programming environment
5652888 using a separate editor object/or each run-time
object instantiated for each selected component 29-Jul-97
5652883 Computer method and system for conservative-stack
and generational heap garbage collection 29-Jul-97
5652602 Fast serial data transmission using a CRT 29-Jul-97
5651676 Method of organizing and storing simulated scenery
in a flight simulation system 29-Jul-97
5628005 System and method for providing opportunistic file
access in a network environment 06-May-97
5627997 Method and system for converting computer mail
messages using an extensible set of conversion routines 06-May-97
5625799 Method and apparatus for determining the logic and
functionality of a changeline 29-Apr-97
5625783 Automated system and method for dynamic menu
construction in a graphical user interface 29-Apr-97
5623674 Method for determining steerable interrupt request
lines used by PCMCIA controllers 22-Apr-97
5623651 Method and system for repairing cross-linked
clusters an d reattaching lost directories on a storage device 22-
Apr-97
5623613 System for displaying programming information 22-
Apr-97
5623282 Method and system for the direct manipulation of
cells in an electronic spreadsheet program or the like 22-Apr-97
5621894 System and method for exchanging Computer data
processing capabilites 15-Apr-97
5621875 Method and system for automatic formatting of user
selected text 15-Apr-97
[[Page 29150]]
5619688 Method and system for constructing database queries
using a field selection grid 05-Apr-97
5617569 Method and system for implementing pointers to
members in a compiler for an object-oriented programming language
01-Apr-97
5617526 Operating system provided notification area for
displaying visual notifications from application programs 01-Apr-97
5613131 Auto-formatting of tables in a spreadsheet program
18-Mar-97
5613124 Method and system for generating and storing
multiple representations of a source object in object storage 18-
Mar-97
5613123 Method and system for configuring and executing
device drivers based on configuration requirements 18-Mar-97
5613105 Efficient storage of objects in a file system 18-
Mar-97
5613079 System for verifying the proper operation of a
replication facility 18-Mar-97
5613058 Method and system for in-place interaction with
contained objects 18-Mar-97
5613019 System and methods for spacing, storing and
recognizing electronic representations of handwriting, printing and
drawings 18-Mar-97
5611060 Auto-scrolling during a drag and drop operation 11-
Mar-97
5611040 Method and system for activating double click
applications with a single click 11-Mar-97
5608909 Method and system for caching presentation data of
a source object in a Presentation cache 04-Mar-97
5608901 Method and system for improving the contiguity of
sectors of a file 04-Mar-97
5608853 System and method for graphics scaling and
localized color enhancement 04-Mar-97
5604897 Method and system for correcting the spelling of
misspelled words 18-Feb-97
5604887 Method and system using dedicated location to share
information between real and protected mode device drivers 18-Feb-97
5604856 Motion compensated noise reduction method--and
system for computer generated images 18-Feb-97
5604850 Method and system for dynamically generating
computer instructions for performing a logical operation 0n bit maps
18-Feb-97
5604849 Overlay management system, and method 18-Feb-97
5604847 System and method of printer banding 18-Feb-97
5603030 Method and system for destruction of objects using
multiple destructor functions in an object-oriented computer system
11-Feb-9
5602981 Quickselect icon button on a computer display which
redisplays the last view style activated by the icon button 11-Feb-
97
5598563 Method of loading device drivers from ROM without
requirement of system to have any harddisks or floppy drives and
without using config.sys file 28-Jam-97
5598520 Methods and apparatus for hinting a font for
controlling stem width as font size and resolution of output device
vary 28-Jan-97
5598519 Method and system for direct cell formatting in a
spreadsheet 28-Jan-97
5598183 System and method for computer cursor control 28-
Jan-97
5596755 Mechanism for using common cede to handle hardware
interrupts in multiple processor modes 21-Jan-97
5596726 Method and system for buffering transient data
using a single physical buffer 21-Jan-97
5596347 System and method for computer cursor control 21-
Jan-97
5594905 Exception handler and method for handling
interrupts 14-Jan-97
5594898 Method and system for joining database tables using
compact row mapping structures 14-Jan-97
5594847 System and method for selecting free form objects
associated with a selection region displayed by a computer 14-Jan-97
5594462 Calibrating data transmission line spacing on a
frame-scanning display device for optically transmitting data to a
Portable programmable device 14-Jan-97
5592670 Avoidance of deadlocks in a demand paged video
adapter 07-Jan-97
5590347 Method and system for specifying alternate behavior
of a software system using alternate behavior indicia 31-Dec-96
5590336 Method and apparatus for performing overlapping
service of multiple IDE peripheral devices 31-Dec-96
5590318 Method and system for tracking files pending
processing 31-Dec-96
5590267 Method and system for scalable borders that provide
an appearance of depth 31-Dec-96
5588147 Replication facility 24-Dec-96
5588100 Method and system for creating .a freeform drawing
object 24-Dec-96
5588099 Method and system for automatically resizing tables
24-Dec-96
5586328 Module dependency based incremental compiler and
method 17-Dec-96
5586318 Method and system for managing ownership of a
released synchronization mechanism 17-Dec-96
5585838 Program time guide 17-Dec-96
5583981 Method and system for managing the size o? edit C??
graphical user in interface 10-Dec-96
5581760 Method and system for referring to and binding to
Objects using identifier objects 03-Dec-96
5581736 Method and system for dynamically sharing RAM
between virtual memory and disk cache 03-Dec-96
5581686 Method and system for in-place interaction with
contained objects 03-Dec-96
5579517 Common name space for long and short filenames 26-
Nov-96
5579466 Method and system for editing and formatting data
in a dialog window 26-Nov-96
5579223 Method and system for incorporating modifications
made to a computer program into a translated version of the computer
program 26-Nov-96
5577224 Method and system for caching data 19-Nov-96
5577187 Method and system for tiling windows based on
previous position and size 19-Now-96
5577173 System and method of printer banding 19-Nov-96
5574920 Method for controlling power down of a hard disk
drive in a computer 12-Nov-96
5574907 Two-pass defragmentation of compressed hard disk
data with a single data rewrite 12-Nov-96
5574840 Method and system for selecting text utilizing a
plurality of text using switchable minimum granularity of selection
12-Nov-96
5572589 Disc serialization 05-Nov-96
5566068 Method and system for locating field breaks within
input data 15-Oct-96
5565887 Method and apparatus for moving a cursor on a
computer screen 15-Oct-96
5565886 Method and system for rapidly transmitting
multicolor or gray scale display data having multiple bits per pixel
to a display device 15-Oct-96
5561788 Method and system for executing programs using
memory wrap in a multi-mode microprocessor 01-Oct-96
5561786 Computer method and system for allocating and
freeing memory utilizing segmenting and free block lists 01-Oct-96
5561751 System and method for displaying a color image
using vector error diffusion 01-Oct-96
5559943 Method and apparatus customizing a dual actuation
setting of a computer input device switch 24-Sep-96
5559884 Method and system for generating and auditing a.
signature for a computer program 24-Sep-96
5557723 Method and system for customizing forms in an
electronic mail system 17-Sep-96
5557714 Method and system for rotating a three-dimensional
model about two orthogonal axes 17-Sep-96
5557440 Noise-insensitive optoencoding techniques with
compensation for device variations 17-Sep-96
5553215 Method and system of sharing common formulas in a
spreadsheet program and of adjusting the same to conform with
editing operations 03-Sep-96
5552982 Method and System for processing fields in a
document processor 03-Sep-96
5551024 System for identifying data records in a database
using a data structure with linked parameters in a search range 27-
Aug-96
5550972 Method and apparatus for efficient transfer of data
to memory 27-Aug-96
5548759 System for storing executable cede within a
resource data section of an executable file 20-Aug-96
5548305 Method and apparatus for displaying color on a
computer output device using dithering techniques 20-Aug-96
5546518 System and method for composing a display frame of
multiple layered graph sprites 13-Aug-96
5544082 Method and system for placing a computer in a
reduced power State 06-Aug-96
5537628 Method for handling different code pages In text
16-Jul-96
[[Page 29151]]
5537589 Method and system for efficiently performing
database table aggregation using an aggregation index 16-Jul-96
5535324 Method and System for dragging and plotting new
data onto an embedded graph 09-Jul-96
5530895 System and method for computer interface board
identification by serially comparing identification address bits and
asserting complementary logic patterns for each match 25-Jun-96
5530794 Method and system for handling text that includes
p-paragraph delimiters of differing formats 25-Jun-96
5528742 Method and system for processing documents with
embedded fonts 18-Jun-96
5526523 Interface between operating system and operating
system extension 11-Jun-96
5522068 Statistic-based reorganization of B-trees yielding
an approximate optimal fill on substantially every page 28-May-96
5519855 Summary catalogs 21-May-96
5517645 Method and system for interfacing components via
aggregate components formed by aggregating the components each with
an instance of a comp0nent manager 14-May-96
5517257 Video control user interface for interactive
television systems and method for controlling display of a video
movie 14-May-96
5515536 Method and system for invoking methods of an object
through a dispatching interface 07-May-96
5512921 Visual display system having low energy data
storage subsystem with date compression capabilities, and method f0r
operating same 30-Apr-98
5511197 Method and system for network marshalling of
interface pointers for remote procedure calls 23-Apr-96
5510980 Method and system for selecting and executing
arithmetic functions and the like 23-Apr-96
5510811 Apparatus and method for controlling cursor
movement 23-Apr-96
5506983 Method and system for transactioning of
medifications to a tree structured file 09-Apr-96
5504889 Method and system for monitoring file attributes
using bitmaps to determine group membership of files and to
determine which files have been processed 02-Apr-96
5504500 User programmable orientation of cursor movement
direction 02-Apr-96
5499369 Method and system for connecting objects using
alert and running states 12-Mar-96
5499335 Method and system for Providing standard resources
in different natural languages 12-Mar-96
5499334 Method and system for displaying window
configuration of inactive programs 12-Mar-96
5497492 System and method for loading an operating system
through use of a fire system 06-Mar-96
5495571 Method and system for performing parametric testing
of a functional programming interface 27-Feb-96
5495566 Scrolling contents of a window 27-Feb-96
5490274 Modified buddy system for managing disk space 06-
Feb-96
5485617 Method and system for dynamically generating 0bject
connections 16-Jan-9
5485574 Operating system based performance monitoring 0f
programs 16-Jam-96
5485558 Method and system for displaying color on a
computer output device using dithering techniques 16-Jan-96
5485460 System and method for running multiple incompatible
network protocol stacks 16-Jan-96
5481667 Method and system for instructing a user of a
computer system how to perform application program tasks 02-Jan-96
5473691 System and method !or computer data transmission
05-Dec-95
5473344 3-D cursor positioning device 05-Dec-95
5473343 Method and apparatus for locating a cursor on a
computer screen 05-Dec-95
5471564 System and method for dynamic printer timeout 28-
Nov-95
5471563 System and method for automatic resolution
reduction 28-Nov-95
5467472 Method and system for generating and maintaining
property sets with unique format identifiers 14-Nov-95
5455600 Method and apparatus for mapping colors in an image
through dithering and diffusion 03-Oct-95
5452406 Method and system for scalable borders that provide
an appearance Of depth 19-Sep-95
5450536 Technique for automatically resizing tables 12-Sep-
95
5446887 Optimal reorganization of a B-tree 29-Aug-95
5442793 Method and system for locating an inherited virtual
function member of a derived class 15-Aug-95
5442751 Method and apparatus for processing data through a
register potion by portion 15-Aug-95
5437036 Text checking application programming interface 25-
Jul-95
5437013 Method and system for network communications using
raw mode protocols 25-Jul-95
5437006 Spreadsheet command/function capability from a
dynamic-link library 25-Jul-95
5432941 Method and system for dynamically configuring a
software System using configurati0n groups 11-Jul-95
5432936 Method for implementing pointers to members in a
compiler for an object-oriented programming language 11-Jul-95
5432928 Updating objects stored in a permanent container
while preserving logical contiguity 11-Jul-95
5432924 Method and system for selectively applying an
appropriate object ownership model 11-Jul-95
5430878 Method for revising a program to obtain
compatibility with a computer configuration 04-Jul-5
5426760 Method and system for storing index information
using a base number of bits 20-Jun-95
5426729 Method and system for nonuniformly adjusting a
predefined shape 20-Jun-95
5418956 Method and System for avoiding selector loads 23-
May-95
5416726 Method and system for placing a computer in a
reduced power state 16-May-95
5414445 Ergonomic pointing device 09-May-95
5412807 System and method for text searching using an n-ary
search tree 02-May-95
5410705 Method for generating an object data structure
layout for a class in a compiler for an object-oriented programming
language 25-Apr-95
5394518 Luminance sensitive palette 28-Feb-95
5392427 System for updating data stored on a flash-
erasable, programmable, read-only memory (FEPROM) based upon
predetermined bit value of indicating pointers 21-Feb-95
5381521 System and method of rendering curves 10-Jan-95
5381347 Method and system for displaying images on a
display device using an offscreen video memory 10-Jan-95
5375241 Method and system for dynamic-link library 20-Dec-
94
5371891 Method for object construction in a compiler for an
object-oriented programming language 06-Dec-94
5371885 High performance file system 06-Dec-94
5371847 Method and system for specifying the arrangement of
windows on a display 06-Dec-94
5369770 Standardized protected-mode interrupt manager 29-
Nov-94
5367617 System and method of hybrid forward differencing to
render Bezier splines 22-Nov-94
5363487 Method and system for dynamic volume tracking in an
installable file System 08-Nov-g4
5363479 System and method for rendering bezier splines 08-
Nov-94
5357605 Method and System for displaying patterns using a
bitmap display 18-Oct-94
5357603 Method and system for changing, a shape type while
maintaining existing graphic characteristics 18-Oct-94
5341464 Luminance emphasized color image rendering 23-Aug-
94
5339432 Method and system for providing user control of
device driver configuration 16-Aug-94
5327562 Method for implementing virtual function tables in
a compiler for an object-oriented programming language 05-Jul-94
5301326 Method and system for controlling the execution of
an application program 57-Apr-94
5300946 Method for outputting transparent text 05-Apr-94
5297284 Method and system for implementing virtual
functions and virtual base classes and setting a this pointer for an
object-oriented programming language 22-Mar-94
5287514 Method and System for customizing a user interface
in a computer system 15-Feb-94
[[Page 29152]]
5287417 Method and system for recognizing a graphic
object's shape, line style, and fill pattern in a pen environment
15-Feb-94
5281958 Pointing device with adjustable clamp attachable to
a keyboard 25-Jan-94
5274751 System and method for printing graphic objects 28-
Dec-93
5272628 Method and system for aggregating tables having
dissimilar formats 21-Dec-93
5268675 Computer command and pointing device with multi-
axis engagement assembly 07-Dec-93
5265261 Method and system for network communications using
raw mode protocols 23-Nov-93
5261101 Method for calling and returning from subroutine
that is invoked by either a near call or a far call 09-Nov-93
5261051 Method and system for open file caching in a
networked computer system 09-Nov-93
5257370 Method and system for optimizing data caching in a
disk-based computer system 26-0ct-93
5255356 Method for hiding and showing spreadsheet cells
19-0ct-931
5247658 Method and system for traversing linked list record
based upon write-once predetermined bit value of secondary Pointers
21-Sep-93
5231577 Method and system for processing formatting
information in a spreadsheet 27-Jut-93
5220675 Method and system for customizing a an user
interface in integrated environment 15-Jun-93
5218697 Method and system for networking computers having
varying file architectures 08-Jun-931
5214755 Document processing method and system 25-May-92
5204960 Incremental compiler 20-Apr-93
5187468 Pointing device with adjustable clamp attachable to
a keyboard 16-Feb-93
5146580 Method and system for using expanded memory for
operating system buffers and application buffers 08-Sep-92
5138303 Method and apparatus for displaying color on a
computer output device using dithering techniques 11-Aug-92
5125077 Method of formatting data from am use 23-Jun-92
5027273 Method and operating system for executing programs
in a multi-mode microprocessor 25-Jun-91
5021974 Method for updating a display bitmap with a
character string or the like 04-Jun-91
4974159 Method of transferring control in a multitasking
computer system 27-Nov-90
4967378 Method arid system for displaying a monochrome
bitmap on a color display 30-Oct-90
4866602 Power Supply for a computer peripheral device which
positions a cursor on a computer display 12-Sep-89
4825358Method and operating system for executing programs in a
multi-mode microprocessor 25-Apr-89
4779187 Method and operating system for executing programs
in a multi-mode microprocessor 18-Oct-88
Articles
Interviews
Living Linux
Linux in the Enterprise
Linux Network Administration
Security Alerts
The Linux
Professional
Tutorials
Topics
Devices
Email
Game Development
LDAP
PDA
Administration
Browsers
Certification
Community
Database
Desktop
Device Drivers
Firewalls
Getting Started
Kernel
08/09/2001
Part 1: The Debate
Tim:
Sounds like some of Michael's speech was maybe a treaty with the
free software people. [laughter]
Anyway, there probably are divisions within Microsoft just as
there are divisions within our community. It's kind of interesting,
because the diversity of opinions often leads not to division but to
strength, and I think we're going to demonstrate that strength as we
hear from a number of people who are prominent in our community and
are allied under the banner of the core principles of open source,
but who do have different takes on how it works and what's important
about it.
Anyway, I'd like to invite up the rest of our panel. Michael and
Craig, you may want to come back up and sit down. I have here with
us Brian Behlendorf, who's one of the cofounders of the Apache
Project. [applause] I'll just start down at the far end, then.
Clay Shirky is a partner at an incubator called the Accelerator
Group. He's also a well-known
Panelists:
Clay Shirky
Accelerator Group
Shirky.com
Michael Tiemann,
Multimedia
Networking
Programming
Security
Tools
Utilities
X Window System
commentator on coming technologies, and he's recently done some
very interesting thinking about some of Microsoft's new
technologies, in particular Hailstorm. That's why he's here to talk
to us. [applause]
Dave Stutz is, I believe, now the program manager for the shared
source implementation of the common language run time and so forth.
Is that the appropriate designation?
Dave:
Sure. It'll work.
Tim:
Dave is--
Dave:
--Craig's Mini-Me.
Chief Technical Officer RedHat
David Stutz
Software architect
Microsoft
Mitchell Baker
Chief Lizard Wrangler
Mozilla.org
Ronald Johoston
Partner
Arnold & Porter
Craig Munclie,
Senior Vice President
Advanced Strategies
Microsoft
Brian Behlendort
Founder & CTO
ColtabNet
Tim O'Reilly
Founder & President
O'Reilly & Associates
Tim:
Yeah, I was going to say, I don't know, maybe something like, if
you had the hat [reference to the red hats on heads all through the
room], I would say, "Mini-Me. Do not chew on your hat."
[laughter]
Next in line is Mitchell Baker, who's known as the Chief Lizard
Wrangler at Mozilla.org. Mitchell is also the person who wrote the
Mozilla license, so she's done a lot of thinking about free software
and open source licenses and the needs of corporations. [applause]
We have with us Ron Johnson, who's an attorney at Arnold &
Porter and the chair of the 22nd Annual Computer and Internet Law
Institute.
And obviously you know Craig, and I already introduced Brian.
So, Craig, I don't know if you wanted to respond at all to any of
Michaers comments [laughter], or whether you want to hear from a few
other people before we get there.
Craig:
I'll just offer one general thought, which is, you know, in some
sense it's easy to poke fun or think you know what is the look-in
from the outside and to be at Microsoft.
We're a company now of 50,000 people, and among any community of
50,000 people, particularly fairly smart people, you're going to
have a lot of people who think carefully about a lot of issues, and
feel passionately as you do about a lot of issues. So I don't think
we're embarrassed at all to find that people would come forward at
Microsoft and ask questions or ask whether we do the right thing or
not.
What I can tell you is that there is a single-purpose focus in
the management of the company. The leadership of the company is not
uncertain about what we're doing. We welcome people asking questions
in the company, but ultimately we recognize our job is to make
decisions and provide consistent leadership. And so if people don't
like what the company wants to do, there's no indentured servitude.
You know, they're free to go do something else. But the company is
clear about what it will do. And I can just tell you that as a
member of a management committee of the company, and while listening
to Michael's comments that many of the ways he characterizes what he
thinks may go on inside the company in
[[Page 29153]]
terms of a civil war or anything, frankly [it] just doesn't exist.
It may be fine to ruminate about what you think could exist or does
exist. I can tell you quite specifically, there's no civil war at
the management level and, to me, no observable civil war among the
rank and file either. So that's one thought I'd leave with you
today.
Tim:
So, Brian, you're obviously someone who has, you know, come up
from the GPL side of the house but from the university style
of" license regime. Clearly you have done a lot of thinking
about what licenses you would choose and why. Do you have any
thoughts on that, or any things you'd like to talk to Craig about
with regard to the BSD orientation .... [laughter]
Brian:
Sure. [more laughter] You don't want to call on anybody else, do
you? [laughter] One of the slides in [Craig Mundie's] presentation
was actually a very useful slide. It showed that there is a
relationship--a set of relationships between the public
research through universities, corporations, users, and government.
I think what we've seen is that it's not one-directional like that.
What we've seen is that it's actually bi-directional in all those
things--in fact, bi-directional across universities and
consumers and government and business and all those directions.
And so while Apache, for example, is under a BSD-style license,
it was very important while we were building the Apache community
that we not only have other corporations use it and adopt it into
their commercial products, but also that we communicate to those
companies the need to reinvest back, the need to build Apache itself
as a strong force as they build up the momentum behind it. And to
us, even though the obligation isn't there to share their code back,
the companies that are participating in the Apache Software
Foundation and even more broadly, within the BSD communities,
understand the need to reinvest, to build it back up. And that's one
thing that I think may be missing in some of this debate: the
creation of licenses, the creation of regimes that really are bi-
directional, that really put all the participants at an equal level.
I totally welcome Microsoft exploring shared source licenses. I
think for proprietary software, I'd much rather have the code to it
than not have the code to it. I think we're going to see a big
difference in the amount of resources that people will put in to a
shared source license regime versus one that is an open source
license regime. So it's all a matter of experimentation. I'm all for
experimenting with different licenses. I think history has shown
that open source is a more efficient way to go in certain
circumstances. At the same time, there are 10 million Microsoft
developers out there who might have a different opinion. I think
it's worth finding out.
Craig:
One thought on that. I agree with you that it is bi-directional,
and in a way, when you look at all the different licensing regimes,
you're correct to point out that there are many different ways to
give back. In a sense, giving the code back is just one way. You
know giving taxes to the government to give back is essentially
another institutionalized way.
Tim:
So how much does Microsoft pay in taxes?
[laughter]
Craig:
It's a lot. I don't know the exact number this year, but it's
billions. One of the things that we've been fascinated by, and I
guess you could say it's some benchmark of this, [is that] this
week, as I kind of predicted in May, we actually came out with this
Windows CE source license. I guess we actually posted it three,
maybe four days ago. And the first three days, ten thousand people
downloaded the entire source tree. And we had had a kit that we had
offered to people who just wanted to use it for commercial purposes
and we had sold about four
Shared Source vs.
Open Source Related
Links
Debate and Panel
Discussion
Technetcast of the debate
Part 1: The Debate
OSCON Conference
Coverage
For the bulk of the panel discussion, Dave Stutz and Craig
Mundie defended Microsoft's business position to the other
panelists. Do you think this conversation helped bridge the gap
between open source and Microsoft?
Post your comments hundred of those in the last year. I guess
only time will tell whether people will decide that they really want
to make an investment or whether they're just curious. But we were
quite happy to see that when we offered it for noncommercial
use--really targeting the academic environment, primarily -that
ten thousand people in the first three days decided to take it and
take a look at it.
So we're enthused with that kind of reaction, and it is, you
know, some way of giving back. You know, we give back financially,
we give back in the standards world, as Michael said, with XML and
other things. I mean, well before XML, we've been a big participant
in the process of standardization, and so I think we will continue
to seek ways to share and give back. Microsoft patents a threat to
open source
By Peter Galli, eWEEK
August 28, 2001 10:55 AM PT
URL: http://techupdate.zdnet.com/techupdate/stories/main/
0,14179,2808548,00.html
Members of the open-source community are becoming increasingly
concerned by ongoing moves from Microsoft Corp. to acquire a range
of software patents that the company can potentially use down the
line to attack and try to restrict the development and distribution
of open-source software.
And much of that concern is being directed toward open-source
desktop company Ximian Inc.'s Mono Project, an open-source
initiative to replace part of Microsoft's .Net product line,
including a way to run C# programs and the .Net Common Language
Infrastructure on Linux. Leading the charge is Bruce Perens,
Hewlett-Packard Co.'s open-source and Linux strategist who helped to
craft the Debian Social Contract, which later became the Open Source
Definition. Perens told eWEEK in an interview on Monday in San
Francisco ahead of the LinuxWorld conference that an increasing
number of people in the open-source community are very concerned
about the Mono Project and by Microsoft's initiative to buy software
patents and to patent as much of its own technology as it can.
"If I were in Microsoft's position, I would be looking
through all the patents I had been buying that are potentially being
infringed by open-source software," Perens said. "They
are going to hold onto these patents until they see what happens
with the antitrust case against them. Once that is resolved, they
will then use them against the open-source industry." But Doug
Miller, the director of competitive strategy for Microsoft's Windows
division, told eWEEK he was unaware of any intended move by
Microsoft to acquire software patents. "Not to say it isn't
happening, but I'm not aware of any such planned attack,"
Miller said.
"With that being said, we strive to protect our
intellectual property, and holding patents is one of the ways we do
that. But nothing has changed, we're certainly no more aggressive
now about filing patents or other copyright protections than we have
been over the past couple of decades," he said.
But Perens isn't buying this, saying that with regard to the
Mono Project, Ximian needs to draw up an advance agreement with
Microsoft that states the Redmond, Wash., company does not intend to
assert its patents on this technology.
"If we don't get that agreement, I'll be happy to see
Ximian implement this stuff, but I'm not sure I'll touch it,"
Perens said. "I'm also not sure I want to let it touch the
rest of GNOME [GNU Network Object Model Environment] very much
because if GNOME becomes dependent on it, it would have a potential
weakness there."
Ximian is an active contributor to the GNOME Project, which has
built a desktop environment for the user and a powerful application
framework for the software developer. Ximian in fact this week
launched two versions of the boxed Ximian Desktop, which includes
the GNOME desktop interface.
No Linux app is safe
But Miguel de Icaza, the chief technical officer at Ximian,
disagreed with Perens, saying that any application that runs on
Linux could be infringing on some hidden and unknown patent owned by
Microsoft.
"Microsoft has not historically used its patents in an
aggressive way," he said. "They've previously used it to
defend themselves. While I suppose they might use it for attack
purposes going forward, I don't think they'll go after Mono as we
are only in the early stages and are sticking to developing
technology from existing concepts. There's nothing new in .Net; it's
just a combination of existing technologies."
Nat Friedman, Ximian's vice president of product development,
also stressed that Ximian is not co-operating with Microsoft on the
Mono Project. "They are not assisting us in any way," he
said. "We have talked to them twice--that's the extent of
it.
"We believe this technology and infrastructure is too
important to be
[[Page 29154]]
controlled and wholly owned by Microsoft. We believe there has to be
a free implementation of it out there," he said. But while
Perens acknowledged that Microsoft has largely not invoked its
patent rights to date, he said, "Past performance is not
predictive of future behavior. Microsoft's [senior vice president]
Craig Mundie has previously said the company intends to enforce all
its patents." An example of a patent held by Microsoft that
could be detrimental to open-source initiatives going forward was
clearly demonstrated in the password change protocol found in Samba,
he said. Microsoft had modified the password change technology and
then patented the new protocol of the password change.
"This means you cannot make a compatible implementation
without potentially infringing on a Microsoft patent," Perens
said. "We went ahead and did it anyway, and Microsoft hasn't
enforced that patent, but it doesn't mean they never will. This is a
telling case as they've taken what was an open protocol and
deliberately put in a patent to close it and then introduced the
patented feature in all new systems."
Samba, which develops open-source software that lets a Linux
machine share files or manage print jobs like a Windows file server
or print server, has included this patented technology. "In
the climate of antitrust it would be nice to force them to overplay
their hand, and Microsoft overplays their hand consistently, Perens
said.
But while Jeremy Allison, a lead developer for Samba, confirmed
that Microsoft holds the patent for the password change protocol, he
believed this "was done with no malicious intent at all. All
big companies patent software for protection. I also think this is
probably a defective patent anyway," he said.
Microsoft's Mundie said he wasn't familiar with the Samba
example, "but in any case where someone reverse-engineers
technology--and there's certainly lots of this in the Linux
world--there's always the risk they'll infringe on someone%
patent. We highly value intellectual property and the laws created
to protect this," he said.
But Samba's Allison said the Mono Project is "a very bad
idea--in fact, it's a terrible idea. By doing this they are
helping .Net become a standard ..... Net will become important if a
majority of the clients use it, but it will not be mandatory if
only, say, 50 percent use it, as Web sites will then still have to
do Java stuff," Allison said. "By implementing an open-
source version of this, they are making it easier for Microsoft to
get to that magic monopoly figure.
"And when they've got that on the client, all the servers
are in trouble. Look at the way they leveraged their client base to
take over services like authentication, e-mail with Exchange, and
DNS services by tying Active Directory to DNS. It's a continual case
of taking their monopoly on a client system and tying servers to
it," he said.
MTC-00030617
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvenia Avenue, NW
Washington, DC 20630
Dear Mr. Ashcroft:
The intention of this letter ?? that I may express my feelings
about the antitrust suit against Microsoft, and the settlement that
was reached last November that ended that suit. The Department of
Justice and Microsoft agreed to terms on a proposed settlement, and
I support that proposition.
I do believe however, that Microsoft should have been left alone
In the flint place. There are many other corporations that should
have received the attention from the government that Microsoft did.
There are terms in the settlement that go a little far, especially
the ones that force Microsoft to turn over their Intellectual
property to competitors. They will be documenting various interfaces
and source code that Is Internal to the Windows" operating
system, and giving that to their competitors. This is a travesty of
justice.
The antitrust suit against Microsoft was uncalled for, but I
guess that the settlement Is the best thing that could have
happened. It could have been much worse. I support the settlement
because I do not wish to see any further legal action taken against
Microsoft. This entire law suit was brought about because of sour
grapes on the part of a few people, namely Sunmicro system's CEO.
With his connections with a few Senators, namely Warren Hatch from
Utah). He was able to get a senate hearing, and the rest is history.
Gosh darn it, the Federal Government can do us a great deal more
good by going after such corporations as big oil. Look at what they
are doing with the price of oil, at this very moment, with market
control of prices almost varying by zip code. And they talk of Bill
??ging the public for his Windows programs and getting by with It
due to e lack of competition--please, give me a break.
Sincerely,
Harry Riddle
P.O. Box 88
No. Lakewood, WA 98259
MTC-00030618
Subj: Microsoft Settlement
Date: Monday, January 28, 2002 9:39:34 PM
To: Renata B. Hesse, Antitrust Division, US Department of Justice
Suite 1200 Washington DC
Ms: Renata B. Hesse
Just a short note asking for a swift settlement of the Microsoft
lawsuit, this whole thing started with Pres. Clinton, and Janet
Reno, since then the landslide has taken this country economic
situation from stable to recession. Microsoft has worked hard for
the consumer and its stockholder, and has agreed to settle this
situation out of court and make some competitors happy because they
did not have the foresight and dedication to make a great product,
and now they want the same access and market share that Microsoft
has developd. Its time to move on with progress and settle this
situation and get the economy moving again.
Thank you for your time and consideration.
Gunther Hausmann
14311-206 St. SE
Snohomish Wash. 98296
425-481-0926
MTC-00030619
W. Thomas
3864 Quail Ridge Road
Lafayette, CA 94549-291Z
(925) 283-6569
Fax: (925) 284-7619
January 27, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
We five in a country that has been built upon the foundations of
capitalism and free enterprise. The antitrust suit against Microsoft
is a direct violation of these very ideals. When we attack free
business we undermine the very foundation of this nation. I feel
that the settlement that has been reached m this case must be
accepted as soon as possible so that American business can continue
to thrive.
According to this settlement Microsoft will license the internal
code of its Windows operating system to twenty of its biggest
competitors. This basically requires Microsoft to tell their
competition how to make their product. While I believe that this
term is a bit extreme I feel that the rest of the settlement will
have a positive affect on the IT industry and thus the U.S. economy.
The fact that this litigation will now be put to rest will, l
believe, help mend some of the damage that has been done to the
economy since this case was instigated three years ago. Please
continue to support this settlement and American business in
general. Thank you for your time and consideration of this case,
your diligence is to be commended.
Sincerely,
W. Thomas
MTC-00030620
344 Hedgehope Dr.
Las Vegas, NV 89123-0004
January 28, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing to express my support of the settlement in the
antitrust case between Microsoft and the Department of Justice.
Although I am happy to see that Microsoft will not be broken up, I
do think that litigation should have never occurred in the first
place. As a Microsoft user, I do not feel that my rights as a
consumer have been infringed upon. Microsoft created a product that
is superior to its competitors and made navigating certain systems
much easier. This has allowed many people who were computer
illiterate to become competent on Microsoft Windows systems.
I regret that nine states feel the need to continue lawsuits. I
hope the Attorney General will act to suppress this opposition
because it is in the best interest of the American Public.
Sincerely,
Evan Emett
cc: Senator Harry Reid
[[Page 29155]]
MTC-00030621
Charles W. Guildnet
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am pleased that a settlement has been reached between
Microsoft and the U.5. Department of Justice concerning the
antitrust lawsuit. Though this is good news, I dare not fool myself
into thinking that this matter has come to an end. The fact that
there are still nine States who wish to pursue litigation against
Microsoft is simply outrageous. What has Microsoft done to deserve
such harsh treatment? From the very beginning Microsoft has proven
itself to be a very strong company with timeless innovations. This
company has done much to enhance the quality of the personal and
professional lives of consumers all over the globe. Microsoft should
not be punished for their competitors" inability to keep with
Microsoft very distinct strides to revolutionize the IT industry.
Despite the harsh terms of the proposed settlement, Microsoft
has not only agreed to these terms, they have also agreed to terms
that were not even at issue in the lawsuit. This is the perfect
illustration of Microsoft's willingness to comply. As part of their
compliance efforts, Microsoft has agreed to enhance competition to
the computer industry by granting their competitors greater access
to their protocols and intellectual property. Microsoft has proven
beyond a shadow of a doubt that they will do every thing they
possibly can to prevent future antitrust violations. After oil, no
one wants to repeat any of the events of the last three years of
litigation. I hope that you make sincere strides to really listen to
the public and give Microsoft the chance to continue their
innovative and creative service to the computer industry and to as
many consumers that want to utilize their products!
Sincerely,
MTC-00030622
Helen B. Gamsey
6006 S River Road
Norfolk. VA 23505-4711
January 27, 2002
Attorney General John Ashcroft
US Department of Justice, 950 Peansylvania Avenue, NW
Washington, DC 20530-O001
Dear Mr. Ashcroft:
I am writing you today to voice my opinion in regards to the
Mierosoft settlement issue. I feel that this debate has gone on long
enough and that it is time to end this litigation. After three years
of litigation, it is time to focus on more pressing issues. The
nation is under attack and may soon be involved in a major war. In
my opinion, this lawsuit should never have occurred in file first
place. R was orchestrated by Microsoft's competitors like Sun
Microsystems, Oracle, AOL, IBM, and others. I have not been a
shareholder for almost a year but I am still very concerned about
what I feel is gross miscarriage of justice in tiffs case.
Microsoft should be rewarded for all the technological and
economic advances their products allowed in the last decade, Instead
their persecution, instigated by their competitors persists. I hoped
the Appeals Court Judges would vacate Judge Jackson's findings. The
Oral arguments certainly indicated this might happen, considering
their horror upon discovering Judge Jackson's judicial misconduct,
and the way they mocked the government's case. Even though their
final decision admitted that "All indications are that the
District Judge violated each of these ethical precepts. The
violations were deliberate, repeated, egregious, and
flagrant." Section 455(a) of the Judicial Code requires judges
to recuse them-selves when their "impartiality might
reasonably be questioned." The Appeals Court basically did
nothing to remedy Jackson's inexcusable conduct beyond giving him a
verbal tongue lasting, and they failed to hate Jackson recused
retroactively from the first time there was evidence of judicial
misconduct.
Contrary to Mierosoft's competitors whinings,,,this settlement
goes beyond that suggested by the Appeals Court. The AC court threw
out all of Jackson's remedies which would have broken up the
company. They rejected the remedies not only because Jackson erred
by not allowing an evidentiary hearing on remedies: but because
those remedies no longer applied to the violations they found; which
were much less severe than those found by Jackson. They also said
that a structural remedy is rarely indicated and only if there was
actual proof that "exclusionary her words, there was no
evidence to show that Netsape and Java would
The Appeals Court judges threw out Judge Jackson entire remedy,
partly because Jackson violated basic procedural rule m not allowing
an evidentiary hearing on the remedy. In their words; "It is a
cardinal principle of our system of justice that factual disputes
must be heard in open court and resolved through trial-like
evidentiary proceedings. Any other course would be contrary
"to the spirit which imbues our judicial tribunals prohibiting
decision without bearing." Yet the Appeals Court ignored their
own advice, and failed to hold an evidentiary hearing to determine
when these 'egregious ethical violations" occurred. This
allowed them to arbitrarily select a date, which conveniently was
after Jackson issued his Findings of Fact and Conclusions of Law,
even though evidence was presented that revealed the violations
occurred before the Findings of Fact were issued.. The entire
decision should at least have been vacated and the case remanded to
a different judge or the case should have been thrown out in toto.
If this settlement is rejected, I only hope the Supreme Court
does the fight thing and throws it out entirely. The respected
mediator from the first trial, Judge Posner, is strongly opposed to
the participation of the States Attorney Generals who are the mason
this case was not settled during the first trial and are the reason
why this settlement is being disputed now. Posner has recommended
that future antitrust cases brought by the Federal government not
allow the States Attorney Generals to participate. Unfortunately, he
acknowledged that any change to the laws would occur too late to
help this case be resolved.
Further, Posner acknowledges "A complication is that it is
difficult to find truly neutral competent experts to advise the
lawyers judges and enforcement agencies on technical questions in
the new economy. There aren't that many competent experts, and
almost all of them are employed by or have financial pies to firms
involved in or potentially affected by antitrust litigation in this
sector. It is difficult to find a consultant in the new economy who
is both competent and disinterested, or "find neutral experts
they could help the judge administer a consent decree."
"The new economy presents unusually difficult questions of
fact, such as where a plaintiff complains that the defendant has
changed the interface to make it more difficult for the plaintiffs
product to work with the network or a defendant contends that it
disclosing a protocol would allow its competitors by reverse
engineering to copy its trade secret, that cannot be protected by
copyright or patent law. Both questions are very technical and
difficult." "Antitrust in the New Economy. Antitrust Law
Jounal, 2001, 68, 920-940
There were no impartial neutral experts to help Judge Jackge nor
to advise file appeals Court Judges. Unfortunately, the Appeals
Court Judges relied on the expertise of antitrust experts who they
thought were impartial. but were actually hired by Microsoft's
competitors. Jackson admitted to being completely completely about
technology and the economies behind any any, dies. There is little
doubt he had much to do with the Findings of Fact or with the
Conclusions of Law fudge Jackson admitted frequently he was not
competent m technology issues nor in economic issues involved in any
remedies. In other words, Jackson was "technologically and
economically, challenged. He admitted that his secretaries would
explain certain issues to him. Jackson just rubber stamped the
remedy submitted by the Government, who consulted heavily with
Microsoft's competitors. The government in turn accepted what
Microsoft's competitors gave them, they in turn got ProComp and
SIIAA and CIIAA to do their work. Even the Appeals Court judges
admitted their ignorance of basic technologicalological issues which
were essential to the essence of this case.
THE COURT: I mean I have to say that I have only done
downloading of these things with the help of much more skilled
people. So I took seriously the proposition that that was a big
harrier. But 60 million people just downloaded it? The Appeals Court
judges in Microsoft's appeal were astonished to learn that 160
million copies of Netscape browsers were distributed overall, and
that their user base doubled to 33 million 1998 when Microsoft's
competitors were accusing Microsoft of foreclosing competion. The
Appeals Court judges vacated Jackson's finding of attempted
monopolization; they remanded the issue of tying to be decided under
new standards, (even thouugh they categorically dismissed the
charges of lying
[[Page 29156]]
during the Oral arguments. (They indicated they were told (by
Microsoft's competitors, no doubt) that they used the wrong
standards. The only finding they accepted, and not on all of the
original counts was fixer of illegal monopoly maintenance.
Curiously, this theory of monopoly maintenance was created by Susan
Creighton in the original White Paper about Netscape in 19977 Susan
Creighton has been a diehard foe and "card-carrying anti-
Microsoft agitator" of Microsoft from the early "90's.
More curiously, Susan Creighton is now tile deputy director for the
P-TC. I hope she has recused herself from any involvement in this
case.
The judges unknowingly relied on at least one economist's novel
theories--whose theories were apparently created just for fills
case. Derails Carlton was an original participant in Project
Sherman. "The Truth, The Whole Truth, and Nothing But The
Truth" http://www.wired.com/wired/archive/811/microsoft.html
Mike Morris was counsel for Sun Micros)stems. "Morris had
been in contact with Joel Klein (in 1998) as part of a three-way
effort to nudge the government toward a case against
Microsoft" "for the past nine months." Wired 11/
2000 Page 280. The other two parties were Netscape's Roberta Katz
and Sabre's counsel, Andy Steinberg. Together they had founded
ProComp, "Now Morris was plotting a solo mission: to put
together a sort of private blue-ribbon commission of nationally
renowned antitrust lawyers and economists, have them draw up an
outline of the kind of Sherman Act case that would make sense for
the DOJ to file, including a discussion of possible remedies, and
then present the whole firing to Klein and his people.
"According to the article, Joel Klein thought this would be
useful. From Wired 1112000 Page 280.
"The political sensitivity of Project Sherman was,
needless to say, extremely high, for here was one of Microsoft's
most ardent competitors bankrolling a costly endeavor to influence
the DOJ--an endeavor undertaken with the department's
encouragement." "So began a project that would span
three months and consume $3 million of Sun's money: Project
Sherman." "Morris look care to select people with
impeccable credentials;--mainstream credentials, establishment
credentials; the kind of people who spoke Joel Klein's language; the
kind who might appear reasonably objective despite the fact that Sun
was paying them $600 to $700 an hour." (From Wired Magazine,
11/2000, p 280)
"The "superstar" cast included economists from
the firm of Lexecon; an attorney from Arnold & Porter: a
Strafford economist and a former FTC counsel who handles Surfs
antitrust work m Washington. "Members of Project Sherman met
every two weeks for three months and then Morris got Gary Reback to
assemble industry figures for a hush hush meeting, not knowing they
had been paid by Sun. (From Wired Magazine, l 1/2000, p 280)
"Apart from MeNeatey, Morris informed almost no one at Sun,
and the other participants were sworn to strict
confidentiality." (page 280, Wired November 2000).
According to Heilemann, Reback and Creighton lobbied the FTC,
the Senate Judiciary Committee, the European Commission, other
Attorney Generals and anyone who would listen. A few others who
helped out were Mike Hirshland, Republican Senate aid to Senator
Orrin Hatch; Jim Clark and Jamcs Barksdate from Nescape, and Venture
Capitalist John Doer. "A few weeks later, Morris and his
"team" flew to Washington to meet with the DOJ
attorneys: Jocl Klein, Melamed, Rubinreid, Malone, Boise for many
hours. "Morris's team "proceeded to outline the case
they believed the DOJ should file." The charges were straight
from the Netscape White Paper written by Susan Creighton
"illegal monopoly maintenance arid monopoly extension; a
violation of Section 2 of the Sherman Act" They addressed the
question of so called "harm to consumers;" the so called
"damage to innovation" and "then the talk turned
to remedies" and a range of conduct remedies" was
presented as well as the "case for a structural remedy"
(From Pages 282-283 of Wired Magazine, November 2000)
"In 1975 Microsoft had 3 employees and revenues of
$16,000. Over the next 25 years they grew to 36,000 employees and
revenues of $20 billion by obsessively figuring out what computer
users needed and delivering it to them." "Over the )
years Gates and his colleagues made a lot of people mad, especially
their competitors. Some of those competitors delivered a 222-page
white paper in 1996 to loci Klein, head of the Justice Department's
antitrust division, and urged him to do to Microsoft in court what
they couldn't do in the marketplace. (Susan Creighton wrote that
White Paper).
Another peculiarity of this case is the presence of U.C.
Berkeley Haas Business School Professor Michael L. Katz as chief
economist of the DOJ antitrust division Apart from his strong
support for government regulation, Katz. wrote papers iii support of
the DOJ case against Microsoft; including one co-written with Carl
Shapiro, the economic counsel to the States Attorney Gencrals ....
hmmmm...
Curiously, the Department of Justice worked closely with the
competitors like Sire Microsystems for four years, often showing
sentences or paragraphs in drafts of the department's plans and
soliciting their approval. The politics of the case is a far cry
from th?? Platonic ideal of rigorous economists devising the best
possible antitrust rules and wise, disinterested judges carefully
weighing the, evidence." Microsoft's competitors have used the
Department of Justice to try to take not just their money but their
intellectual pt, well. From "The Theft of Microsoft" by
David Boaz. http://www.cato.org/dailvs/07-27-00.html
I cannot imagine that Project Sherman was a legal undertaking,
and wonder if the Appeals Court judges were aware of Joel Kleins
meeting with reporter John Heileman. I wonder if the DOJ would have
brought the case if it was publicly acknowledged at the time that
they were listening to testimony from hired experts paid handsomely
by Microsoft's.
During these difficult times, it is vital to do all we can to
boost our economy. Restricting Microsoft will not accomplish this.
This country is at war with a world wide network of Islamic
extremists intent on destroying us. The Department of Justice needs
to focus on "fixing" the FBI and improving the security
of our nation and protecting American citizens against more
terrorist attacks. Has this short passage of time since September 11
dulled memories so quickly that we are back to the old games of
using lawyers and politicians and the Department of Justice to
squash competitors? Are things really back to normal? I don't think
so...until the next terrorist attack. . .
Antitrust laws are not meant to protect competitors against
their inability to compete in the marketplace due to their own
incompetence...Look who is suing? AOL, Sun Microsystems, Oracle, IBM
are multibillion corporations... not more and pop outfits threatened
by a bully...The antitrust laws were meant to protect consumers and
to allow fair competition. Consumers are not complaining. However
antitrust laws are now being used to protect competitors, and to
make trial lawyers even richer,,,at the expense of consumers and the
economy, How many companies have been forced into bankruptcy now by
trial lawyers over asbestos? 20? 30? 50?
AOL, Time Warner, IBM, Sun Microsystems, Oracle, etc have
contributed heavily to politicians for years...long before Microsoft
was forced to play tiffs game, as a result of their persistent
efforts to prosecute and persecute Microsoft.
Should the DOJ continue to "work" on behalf of
Attorney Generals who are receiving large contributions and specific
instructions from Microsoft's competitors via ProComp and other such
organizations? After all, it was Sun Microsystems" who paid
antitrust experts like Dennis Carlton to "produce"
antitrust charges which would appear credible to the DOJ. Reputable
antitrust experts like Carlson produced novel antitrust theories of
harm from incomplete exclusionary conduct. Almost all of the
violations upheld by the Appeals Court were based on Carlton's
"novel" theories. Others were based on
"novel" theories developed by Susan Creighton, an ardent
Microsoft foe.
I would think that the Enron scandal would make politicians and
regulators more wary of the dangers involved from large
contributors... I was surprised to learn the extent of Euron's
contributions. They gave $50,000 to Paul Krugmnan, from the New York
Times, who writes about economic matters, and not too surprisingly,
Krugman apparently wrote positive articles in the past about Enron
....
It was a complaint from Sum Microsystems that lead the European
Union to launch an antitrust case against Microsoft by the EU. There
is something about certain American companies that run to other
countries to crush their competition .if they can't get the DO/or
FTC to do it... It is telling that Sun Microsystems has 200 lawyers
in their legal department, more than many large firms, even in
Washington. I think their shareholders might prefer they spent more
on improving their products and competing...as their stock contire,
es to decline.
Microsoft was consistently been rated one of the top
corporations to work for and one
[[Page 29157]]
of the most admired companies by Fortune until the trial lawyers and
AG and MSFT's competitors started their hatchet jobs and made
Microsoft into an "unsympathetic target." http://
www.tcchcentralstation.cont/1051/
techwrapper.jsp?PLD=1051-250&CID=1051-012901A
Microsoft's competitors lobbied politicians for years before
Microsoft was finally forced to join their game and forced to pay
this "protection money." "For about 20 years Gates
and his colleagues just sat out there in "the other
Washington" creating and selling. As file company got bigger,
Washington DC, politicians and journalists began sneering at
Microsoft's political innocence. A congressional aide told the
press, "They don't want to play the 1). C. game, that's clear,
and they've gotten away with it so far. The problem is, in the long
run they won't be able to." Politicians told Bill Gates,
"Nice little company ya got there. Shame if anything happened
to it." And Microsoft got the message" If you want to
produce something in America, you'd better play the game. In 1995,
after relocated assaults by the Federal Trade Commission mid the
Justice Department, Microsoft broke down and started playing the
Washington game. It hired lobbyists and Washington PR firms. Its
executives made political contributions. And every other high-tech
company is getting the message, too, which is great news for
lobbyists and fundraisers." (but not for consumers or
innovators or successful companies..) From "The Theft of
Microsoft" by David Boaz. http://www.cato.org/dailvs/
07-27-00.html
"What lesson should they draw? The antitrust laws are
fatally flawed. When our antitrust laws are used by competitors to
harm success fid companies, when our most innovative companies are
under assault from the federal government, when lawyers and
politicians decide to restructure the software, credit, card and
airline industries, it's time to repeal the antitrust laws and let
firms compete in a free marketplace.
Microsoft's competitors and these phony front groups are using
their influence over the media, and their power from contributions
to politicians to give the appearance that they are concerned with
consumers, when they are only advancing their own agenda, which is
harmful to most of us. Microsoft's competitors claim to have the
interest of consumers at heart, when in reality their own
incompetence lead to their loss of market share. AOL 5 was such a
terrible product that even computer experts could not deal with the
changes it made to the computer. It changed your default settings
and took over. Mossberg from the Wall Street Journal. who has never
been a fan of Microsoft, acknowledged this at the tune and there
were lawsuits over this which somehow failed to make the news.
Anyone who has ever used AOL knows about their inferior products and
their poor customer service.
Nonetheless, it is time to end this case that should have never
been. and to stop being influenced by Microsoft's competitors who
have been behind the case from the beginning of Microsoft's
persecution by the Department of Justice, starting in the early
"90's. This settlement is the perfect means to end this
dispute. Microsoft will remain together and continue designing and
marketing their innovative software, while fostering competition and
making it easier for other companies to compete. Microsoft has
pledged to share more information about Windows operating system
products and has agreed to be monitored for compliance.
I sincerely hope the Department of Justice accepts this
settlement and puts an end to this mess and turns their attention to
real threats to the Nation- the terrorists who want to destroy the
West. Caving into Microsoft's major competitors who are behind the
Attorney Generals hurt consumers and the economy further. Let them
innovate like Microsoft does, rather than litigate.
Thank you for your attention.
Sincerely.
Helen B. Gamsey
Helen Gamsey
MTC-00030623
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington DC 20530-0001
Dear Mr Ashcroft,
I am writing to you about the Microsoft settlement as is
permitted under the Tunney Act. I am now retired following a 40 year
career in banking. I followed the daily reporting of the hearing
before Judge Thomas Penfield Jackson and read his entire opinion by
downloading it from the internet. The press reporting during the
trial led me to certain conclusions, One, the judge was biased
against Microsoft during the trial. This was born out when the press
characterized one of the expressions of this judge as a look of
incredulity such as "can you really believe this guy"
when David Boles was examining a Microsoft executive during the
case. In my opinion this bias carried over and influenced his
findings of fact and proposed remedies. Secondly, the judge erred in
suggesting harm to the consumer by Microsoft pricing practices
But the purpose of this letter is not to rehash the origina;
trial. The Federal Court of Appeals has ruled and remanded the case
back for remedies The Department of Justice has a settlement now
before the court. I believe that the Department of Justice's most
recent decision to end the antitrust case is truly the right one
Several states have agreed with thai decision. The remaining
recalcitrant states, and that is my term, are defending not the
consumer but vested interests of competitors of Microsoft
During the 1980's, various competitors of Microsoft (Sun,
Oracle, DEC, iBM) formed a consodium to ostensibly create standards
for Personal Computer Operating Systems. It was reported in all of
the computer trade journals from the mid 1980's on. As 1 recall they
had several meetings over a period of a couple of years, before it
broke down. and IBM then proceeded to create their own OS/2
operating system
Dunng the 1950's IBM was the dominant force in large Main Frame
Operating systems. This did not deter Burroughs, National Cash
Register (NCR), Wang Systems, Digital Equipment and others from
creating competing operating systems. Sun Computers had a high-
priced engineering operating system in the 1980's and trade journals
all reported that Scott McNeely desired to develop a competitor
system to Microsoft for Personal Computers. There was only one
problem. He could not develop a mass market, few priced system
This fact has been lost in the case against Microsoft It has
saddened me to see our courts and some politicians being used as a
referee to reward certain competitors, not in the market place of
commerce and ideas, but in the courts P.B2
I am retired and do a bit of financial consulting on the side. l
use computers quite regularly and would be hard-pressed to find a
better set of software products than those created by Microsoft. My
first personal computer in 1984 was a Macintosh and I enjoyed it
very much, The only problem with it however was that most of the
software created by others was buggy and would sometimes crash. I am
reminded particulary of some Oracle software which was very buggy
and was continually a problem. There was a spreadsheet program
however, created by a little company that l had never heard of
callled Microsoft, and if worked seamlessly on the Macintosh. I made
the conversion to PC's in [he early 90's and would never look back,
The affordability and stability of Microsoft products convinced me.
Please express my views to the judge. As a retired business
person and a consumer of computer software, f would ask the court to
affirm the Department of Justice settlement agreed to by nine states
and reject the continued attempts by certain other states to reward
the competitors of Microsoft.
Continued litigation will only threaten the Computer software
and hardware industry and consequently, the entire economy. I ask
that you please stop these lawsuits and let Microsoft concentrate on
the business of business once again,
I would greatly appreciate your reflecting my views, or a
summary of them to the judge.
Thank you for your time and thoughtful consideration of this
matter.
Cordiaily.
Gerald G Lacey
cc: Senator Strom Thurmond
cc: Senator Fritz Hoilings
MTC-00030624
January 14, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing to let you know that I am in favor of the
Department of Justice ending its antitrust case against Microsoft. I
believe that Microsoft is operating under fair business practices,
and that the terms of the settlement agreement reached in November
are reasonable. Microsoft will now share information with its
competitors about Windows, which will allow them to place their own
programs on the operating system.
Ending the case against Microsoft will allow them to concentrate
on developing new technologies and services, and their continued
success is beneficial to the overall
[[Page 29158]]
economy. Their concessions in the settlement agreement will allow
them to continue innovating the technology industry.
Please support finalizing the settlement under the current
conditions.
Sincerely,
Jack Westbrooks 16590 Heim Road Chelsea, MI 48118
Jack Westbrooks
Network Consultant
MCT, MCSE, CNE, CCNA
MTC-00030625
ATT: RENATA B. HESSE
ANTITRVST DIVISION
MICROSOFF SETTLENT
5645 Lord Cecil Street San Diego, CA 92122
January 27, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
The settlement of the antitrust case appears to me to be fair,
workable, in the best interests of America. The new judge from the
Federal District Court who was assigned to the case, and who
assigned the mediator, should approve it.
The settlement will change Microsoft is many ways, even beyond
the scope of the original litigation. The use of exclusive marketing
agreements with companies that build computers will be banned. A
uniform price list, with only discounts for large volume shipments,
will be instituted with large computer makers, instead of individual
negotiations. A committee of experienced software engineering
experts will see that the agreement is enforced. This settlement
seems like it will be in the best interests of the country, because
the technology sector has been slumping. The end of the litigation
will help. The increased flexibility and cooperation within the
industry will also help.
Let's see this settlement approved as soon as legally possible.
Let's see
America strong again.
Thank you for your help.
Sincerely,
Alvaro Munevar
MTC-00030626
Robert Sylvester . 135 Claridge Drive . Moon Twp, PA 15108
January 28, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I understand the Department of Justice is accepting and
publishing public comments for the first time since the antitrust
suit was brought against Microsoft more than three years ago. Here
are some of my views on what I'd like to see happen.
Microsoft has been cooperative throughout this lawsuit. They
have agreed that if a third party's exercise of any options provided
for by the settlement would infringe any of Microsoft's intellectual
property rights, Microsoft will provide the third party with a
license to use the necessary intellectual property on reasonable and
non-discriminatory terms. Microsoft has also agreed to the
establishment of a technical committee that will monitor Microsoft's
compliance with the settlement and assist in resolving disputes.
I urge you to do your part in ending this lawsuit. We've already
reached an agreement. Let's move forward and deal with some of the
more pressing issues, such as rebuilding the technology sector so
that we can revive this economy.
WAYNE E. QUINTON
The Highlands
January 23, 2002
Attorney General John Ashcroft
US Department of Justice,
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft:
I am writing to tell you what I think of the Microsoft Case.
This case is certainly not serving the public interest; it wasn't
even brought on by the public. It was brought on because of their
competitors" influence and is now being paid for with tax
money. This case is a ridiculous waste of tax money. People are
suing Microsoft because they can't compete. I think there is
something wrong when the law allows that.
Microsoft is passing on their technology secrets to their
competitors and has even promised not to retaliate when competitors
create products from that technology that would compete with
Microsoft. If that's not fair, then 1 don't see what would be.
Breaking up the company would be disastrous to our country's
economy.
This settlement is long past due and needs to be accepted
immediately. Accepting this settlement is the right way to end this
mess. Thank you for your time.
Sincerely,
Wayn Quinton
The Highlands
Seattle, WA 98177
MTC-00030627
Date: Monday, January 28, 2002
To: Attorney General John Ashcroft
Company: U.S. Department of Justice, Washington, D.C
Fax Phone #: +1 (202) 307-1454
CC:
From: Lucille M. Mcculley
Subject: Microsoft Antitrust Settlement
Total # of Pages (including cover): 1
Memo: Dear Mr. Ashcroft:
I am writing to express support for the Microsoft antitrust
settlement. It seems like a good plan and a fair way to resolve what
has beeen a lengthy and unnecessary inuiry into Microsft's business
dealings. The settlement's terms are very generous to Microsoft's
competitors, and giving them access to Windows programming codes
will enable them to make their programs more compatible with
Microsoft's operating system.
Forgoing further exclusivity agreements with computer
manufacturers will also diversify the market more than it already
is. The settlement should give both the government and Microsoft
what they want to ultimarly put the situation to rest. Please
finalize the settlement without further delay.
Sincerely,
Lucille M. McCulley, 221 East 78th Street, NY NY 10021
If all pages were not received, please call back immediately:
Jacobo Kravec
21011 NE 34th Place
Miami, FL 33180-3585
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft,
The settlement that has been reached between the US Department
of Justice and Microsoft is harsh to Microsoft, but should be
implemented because it is in the best interests of the American
public. Microsoft is one of our nation's strongest assets and we
cannot afford to have them sitting on the sideline when there is a
technological race for superiority in the Technology Industry.
Microsoft's innovation has standardized the IT sector and has served
as the leader in development for America's tech sector.
Yes, Microsoft's marketing tactics have been heavy-handed at
times, but the terms of the settlement should serve to appease all
competitors, as Microsoft will be disclosing for their use
interfaces that are internal to Windows operating system
products--a first in an antitrust case settlement. Microsoft
will also be granting computer makers broad new rights to configure
Windows so that nonMicrosoft products can be more easily promoted.
Please use your influence to finalize the settlement. It is in
the best interests of the American public, IT sector, and our
economy to end the dispute and allow Microsoft to focus on business,
not politics.
Sincerely,
Jacobo Kravec
MTC-00030628
Carl Lochen
30010 Rancho California Road
Apartment 124
Temecula, CA 92591-2952
January 28, 2002
Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Mr. Ashcroft,
As an independent developer and supporter of Microsoft, I write
you in regard to the recent Microsoft Settlement. After three years
of negotiations, it seems strange that there may even be more delays
in the implementation of this plan. The process was extremely well
thought out and well monitored throughout. Because of this, the
terms that were reached benefit all involved. As we go through these
economically stressful times, it is crucial that we support our
technology at all levels. By holding up this settlement, we take a
backseat in the global market. Our entire technology industry needs
to get back to business, and because of the agreement, we are ready
to do so. Let us support our IT sector and allow the terms to speak
for themselves, including anti-retribution and retaliation acts, and
the sharing of selected intellectual property.
Splitting up Microsoft
Specifically the non-Windows platform community has attacked
Microsoft for adding
[[Page 29159]]
to much functionality to its OS, and therefore stifling competition.
They argue splitting up Microsoft, would make it easier to compete
with Microsoft. This ignores the large amount of developers and
companies that have made available more than 100 000 programs
available on the Windows platform. Splitting up Microsoft, will for
them mean disrupting the dynamics of developing cutting edge
technology for Windows.
Windows Building blocks
Splitting up Microsoft into pieces, will create smaller
companies developing solutions/libraries that will not be included
in Windows and therefore be keeping secrets from other independent
developers who will have to develop their own incompatible
solutions. Splitting up Microsoft, destroys Windows's ability to
offer solutions for connecting together building blocks with the
latest technology. Solutions that are now incorporated in Windows
and documented for everyone, will end up as proprietary solutions
outside Windows. Making it less feasible for smaller developers to
keep up with the latest in technology.
Microsoft is giving us pre-tested building blocks guaranteed to
be interchangeable and compatible with each other. Developers using
these building blocks for their own designs, know that their
programs will be compatible with combinations of future designs
trying to link up with or work together with their designs. Think of
the many millions of errors windows is getting rid of for current
and future developers of software...
Whenever building blocks are rewritten with new interfaces,
previous interface(s) are still available to let older designs work
as building blocks change. This is true of COM+ and any of the API's
that come with Windows. It beats trying to design applications to
hook up to zillions of applications not using support from the OS.
The Internet building blocks
Internet technology built into Windows, assists applications
using various Windows technologies in communicating and sharing data
with each other over the Internet. This degree of integration
between applications/components is only possible by having these
technologies built into the platform they are running on. Internet
Explorer built into Windows facilitates in building web browsers.
Any developer can build their own Web Browser with their own
customized controls. In less than a day they can design their own
Web Browser that is equal in power to Internet Explorer. Just
download the MFCIE project from Microsoft Developer Network (has
been available a couple of years). In less than a day you implement
remaining Internet Explorer Functions through the OLE/COM+
interface. In a matter of days any organization can design their own
Internet portals that access primarily sites of their own choosing.
Documentation for developing software
Microsoft develops the functionality and the building blocks
needed for applications and distributed components to interact with
each other on the Windows platform. Microsoft also provides
Documentation and Developer information for all developers to take
advantage of these features. Preventing Microsoft from freely
expanding these features to provide the latest technologies, will
damage the industry's ability to develop comprehensive integrated
software solutions for the Windows platform. Instead you will end up
with incompatible proprietary solutions and a less versatile Windows
platform.
I urge you to support our economy at this time, and help this
settlement go through as it stands. I thank you for your support.
Sincerely,
CJ
Carl Lochen
cc: Representative Darrell Essa
MTC-00030629
25010 42nd Avenue S Kent, WA 98032
January 25, 2002
Attorney General John Ashcroft
US Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Mr. Ashcroft:
I am of the opinion that the antitrust lawsuit against Microsoft
is unnecessary. I do not believe that Microsoft was guilty of
antitrust violations in the first place. As a computer user I want
an operating system that is complete, and a system that does not
include an Internet browser is incomplete. Microsoft wants to be
able to provide the best, most complete, products on the market. The
addition of Internet Explorer is the natural progression of the
Windows operating system. The grounds of this suit are faulty, and
in my opinion the best resolution to this case is the dismissal of
the charges.
On the other hand I feel that this case needs to come to an end,
and the quickest way to accomplish this is to accept the terms of
the settlement that was reached in early November. I feel that this
settlement is a bit harsh, however Microsoft has committed
themselves to the terms and are willing to make the necessary
sacrifices to get this litigation finished, and themselves back to
business. The terms require that Microsoft disclose information
pertaining to the internal interface of the Windows operating system
so that other companies can create products that work within the
system. This term of the settlement in particular is extreme. It
requires Microsoft to reveal information that was formerly known and
kept as a trade secret. Terms of this nature have never been
included in an antitrust settlement before, and its inclusion in
this one is not necessary, however Microsoft has agreed to the
settlement and therefore it should stand.
Thank you for all of the work that you have done to bring this
suit to a close. Please continue to support American business and
free enterprise in the future.
sincerely,
Douglas Harper
MTC-00030630
www.microsoft.com/freadomtoinnovate/
www.usdoj.gov/atr/cases/ais-settie.htm
The letter follows:
January 28, 2002
Attorney General John. Ashcront
Department of Justice
950 Pennsylvania Avenue
Washington. DC 20530-0001
Dear Mr, Ashcroft:
My name is Ruth Burke, I am a resident of Fenton. Missount. My
reason for writing is to let you know that I support the Justice
Department's proposed settlement with Microsoft and that I
appreciate your bringing this matter to at least a partial close.
I do not feel that this case should drag on when a fall
agreement has been reached. I am sure that people will have gripes
with particular provisions of the settlement, but the agreement,
when taken as a whole, is beneficial to the all involved.
By agreeing to a more level playing held in the are as of
pricing, distribution, and software combetition, Microsoft has
opened the door to both increased competition and ch??e. As I
understand it, that is the goal in any antitrust litigation. It is
time for everyone involved to get out of Court and get back to work.
Sincerely,
MTC-00030631
01/29/02 TUE 0l:05 FAX 2024085200 STEVENS DAVIS
MILLER MOS 001
To :
From:
VIA FACSIMILE ONLY TO 202-307-1545
Renata B. Hesse, Esq.
U.S. Department of Justice
Antitrust Division
601 D Street, NW
Suite 1200
Washington, DC 20530
Telecopier: 202-307-1545/202-616-9937
Telephone: 202-514-8276
Peter Peckarsky, Esquire
1615 L Street, NW
Suite 850
Washington, DC 20036
Telecopier: 202-408-5200
Telephone: 202-785-0100
Re: U.S.v. Microsoft, Civil Action No. 98-1232
Date: January 28, 2002
No. of pages (including this sheet):
01/29/02 TUE 01:05 FAX 2024085200 STEVENS DAVIS
MILLER MOS
002
January 28, 2002
Renata Hesse, Esq.
Trial Attorney
Antitrust Division
U.S. Department of Justice
Suite 1200
601 D Street NW
Washington, DC 20530
Facsimile: 202-616-9937 or 202-307-1545
E-mail: microsoft.atr @ usdoc.gov
The Honorable John Asbcroft
Attorney General of the United States
U.S. Department of Justice
Room 4400
950 Pennsylvania Avenue, NW
Washington, DC 20530 (without exhibits or attachments)
The Honorable Charles A. James
Assistant Attorney General
Antitrust Division
U.S. Department of Justice
901 Pennsylvania Avenue, NW
Washington, DC 20530 (without exhibits or attachments)
[[Page 29160]]
Mary Braden, Director
Departmental Ethics Office
U.S. Department of Justice
Room 6642
950 Pennsylvania Avenue, NW
Washington, DC 20530 (without exhibits or attachments)
Re:
Comments of Relpromax Antitrust Inc. with respect to the Revised
Proposed Final
Judgment dated November 6, 2001, and filed in U.S.v. Microsoft,
Civil Action No. 98-1232, United States District Court for the
District of Columbia
Dear Ms. Hesse:
Defendant Microsoft has been found liable for multiple
violations of Section 2 of the Sherman Act, 15 U.S.C. 2. A proposal
for a consent judgment (in the form of a Revised Proosed Final
Judgment ("RPFJ") dated November 6, 200l, and signed for
the United States by Charles A. James, Assistant Attorney General,
Antitrust Division, United States Department of Justice) has been
submitted in the captioned civil action. As will be made clear below
and has beer made clear by others who have submitted comments, the
RPFJ does not meet the requirement,, of law and makes a mockery of
the judicial power.
Assistant Attorney General James freely concedes that one of the
products at issue is one of the necessaries of modern life. As Mr.
James recently wrote:
[The case] involves the signature product of the digital age,
the Windows operating system, through which the vast majority of
computer users worldwide interne; with what has become a basic
appliance in human life.
The Act was named for Senator John Sherman (R.--Ohio). The
following is what Senator Sherman told the Senate about concentrated
economic power controlling the necessaries of life during the debate
that led to the passage of the Sherman Act:
If the concentered [concentrated] powers of [a trust] are
intrusted to a single man, it is a kingly prerogative, inconsistent
with our fore1 of government, and should be subject to the strong
resistance of the State and national authorities. If anything is
wrong this is wrong. If we will not endure a king as a political
power we should not endure a king over the production,
transportation, and sale of any of the necessaries of life. If we
would not submit to an emperor we should not submit to an autocrat
of trade, with power to prevent competition and to fix the price of
any commodity.
INTRODUCTION
I am the President of Relpromax Antitrust Inc. I am an economist
by education and experience. I received a Ph.D. in economics from
Princeton University and an A.B. in economics
See, among others, the Comment (dated January 17, 2002) of
Robert E. Litan, Roger D. Noll, and William D. Nordhaus on the
Revised Proposed Final Judgment: and the letter (dated January 24,
2002) on behalf of the American Antitrust Institute by Albert A.
Foot, Robert H. Lande, Norman W. Hawker, and Oded Pincas.
Charles A. James. The Real "Microsoft" Case and
Settlement, l6 Antitrust 58 (ABA Fall 2001) (a copy of the article
is attached as Exhibit 12). Congressional Record, Senate, March 21,
1890, page 2457.
01/29/02 TUE 01:05 FAX 2024085200 STEVENS DAVIS MILLER MOS from
the University of California at Davis. I taught economics at
Cleveland State University, Central Michigan University, and Kansas
State University. I was a post-doctoral research fellow at Wayne
State University. At Kansas State University, I was a Visiting
Assistant Professor and taught a course in industrial organization
economics. I have worked as an economic analyst at the Illinois
Commerce Commission which regulates public utilities.
EXECUTIVE SUMMARY
1. My analysis of the competitive impact of the RPFJ using a
computerized model demonstrates that the law requires a structural
remedy splitting Microsoft into at :least two (2) competing
companies if the compensation for the executives of these companies
is based on relative profit maximization (RPM). A re-structuring
into at least three (3) competing companies if the compensation for
the executives of these firms is based on absolute profit
maximization (APM).
2. The conduct of the United States Department of Justice and
Microsoft with respect to the RPFJ since about September, 200l, has
demonstrated contempt for the Court and the statutory rights of all
Americans.
3. The RPFJ affirmatively declares that it creates no rights for
Original Equipment Manufacturers (OEMs), Covered OEMs, Interact
Access Providers (IAPs), Internet Content Providers (ICPs),
Independent Hardware Vendors (IHVs), or Independent Software Vendors
(ISVs).
4. The RPFJ will not stop Microsoft's violations of the
antitrust laws, prevent a recurrence, restore competition to the
market, or deny Microsoft the fruits of its illegal conduct.
5. To avoid a conflict of interest or the appearance of
impropriety, the Attorney General, the Assistant Attorney General in
charge of the Antitrust Division, and all other political nominees
or appointees of the current Administration should recuse themselves
from any further involvement in matters related to Microsoft; the
authority to continue to represent the United States should be
delegated to a non-political career trial attorney of the Antitrust
Division of the Justice Department pursuant to 28 U.S.C. 510 by a
career employee of the Justice Department acting as the delegatee of
the Attorney General.
DISCUSSION
A. The Violations of Law and What The Remedy Must Do By Law
The Antitrust Procedures and Penalties Act (Tunney Act) governs
this court's consideration of the RPFJ.
The Tunney Act was signed on December 21, 1974, to remedy one of
the remy abuses of power which led to the adoption of the second of
three Articles of Impeachment of the President by the Committee on
the Judiciary of the United States House of Representatives on July
27, 1974. and to the only Presidential resignation in the history of
our nation on August 9, 1974. The Tunney Act is not merely some
procedural nicety.
The Tunney Act was intended to protect all Americans against an
abuse of the antitrust settlement power. See Exhibit 10 hereto,
pages 13-22.
In a unanimous 7-0 decision, the United States Court of
Appeals for .'.:he District of Columbia Circuit found Microsoft
liable for multiple violations of 15 U.S.C. 2 due to unlawful
maintenance of a monopoly. U.S.v. Microsoft, 253 F.3d 34 (DC Cir.
2001).
The violations of law related to anti-competitive restrictions
on OEMs, the, integration of Internet Explorer with Windows,
exclusionary agreements with IAPs, anti-competitive agreements with
ISVs, dealings with Apple Computer, First Wave agreements with ISVs,
the fraudulent deception of software developers using Java, and
threats to Intel.
By law, the remedy must stop the violations, prevent a
recurrence, restore competitive conditions in the market, and deny
to Microsoft the fruits of its statutory violation.
171/29/02 TUE 01:06 FAX 2124085200 STEVENS DAVIS MILLER MOS 006
Given that the United States won a judgment sufficient to
support these remedies, it is not in the public interest for this
Court to rubber stamp its approval on a sweetheart dea?? to protect
a campaign contributor to both the Attorney Genera/and the President
who put the Attorney General and Assistant Attorney General in
charge of the Antitrust Division in their current offices. See
Exhibit 10 hereto, pages 16-18, 21, and 25, and Attachments I
and 9-43 to the Dautch Declaration which is Exhibit A to
Exhibit 10 of this letter.
The Court of Appeals suggests, U.S.v. Microsoft, 253 F.3d 34,
107 (DC Cir. 2001) that: If the Court on remand is unconvinced of
the causal connection between Micro sort's exclusionary conduct and
the company's position in the OS market, it may well conclude that
divestiture is not an appropriate remedy.
It follows that if the Court is convinced of the causal
connection, the Court may conclude that divestiture is an
appropriate remedy.
Pursuant to 15 U.S.C. 16(e), this Court must make a
determination that entry of the RPFJ is in the public interest. The
statute provides, in pertinent part, that for the purpose of making
a decision on whether entry of the RPFJ is in the public interest,
the court may consider:
(1) the competitive impact of such judgment, including
terrains*ion of alleged violations, provisions for enforcement and
modification, duration or relief sought, anticipated effects of
alternative remedies actually considered, and any other
considerations bearing upon the adequacy of such judgment;
(2) the impact of entry of such judgment upon the public
generally and individuals alleging specific injury from the
violations set forth in the complaint including consideration of the
public benefit, if any, to be derived from a determination of the
issues at trial. limited to the The Court may consider other issues
it deems relevant also
[[Page 29161]]
and is not considerations set forth in the statute. Some of these
issues are discussed below.
1. The Model After the United States Failed to comply with its
legal obligation sunder the Tunney Act to provide an analysis of the
competitive impact of the RPFJ, 1 prepared a computerized model for
the analysis of the competitive impact of the RPFJ. The model is
described in derail in Exhibit A hereto.
This economic model considers and calculates the effects on
competition of both conduct- only remedies and structural remedies.
The model calculates, in dollar terms, the competitive impact of
alternative remedies under various sets of assumptions. The model
calculates the dollar value of such important economic quantities as
consumer surplus, profits of Microsoft and competitors, and total
surplus. The main conclusions arc 1) only a structural remedy fully
repair the economic damage which Microsoft has caused, and 2) most
structural remedies require additional measures to reduce or
eliminate the "fruits" of Microsoft's unlawful
"victories."
2. The Conduct of the United States and Microsoft Has Been
Contumacious As discussed in Exhibits 10 and 11 hereto, both the
United States and Microsoft have defied the court and denied the
public the information they are stautorily entitled to have to
assess the RPFJ.
3. Tile RPFJ Explicitly Denies Any Protection To Third Parties
After purporting to create rights and protections for OEMs, ISVs,
IHVs, ISPs, and ICPs, among others, the RPF] takes it oil away in
the last section (section VIII) which states: Nothing in this Final
Judgment is intended to confer upon any other persons any rights or
remedies of any nature whatsoever hereunder or by reason of this
Final Judgment. Entry of the RPFJ would make a mockery of the
judicial power.
There are a host of other problems with the RPFJ, some of which
are due to a lack of econoic analysis.
For example, paragraph 2 of the Revised Proposed Final Judgment
says, "IT]his Final
MTC-OOO30631 OOO7
STEVENS DAVIS MILLER MOS
Judgment does not constitute any admission by any party
regarding any issue of fact or law." This provision is not in
the public interest, and is partial evidence that this consent
agreement is a sweetheart deal. Microsoft has been duly convicted of
serious antitrust violations, and many of these convictions were
upheld by the Appeals Court. The Appeals Court for the District of
Columbia is widely perceived to be more conservative on antitrust
issues than the Supreme Court.
There is virtually no chance that the Supreme Court will
overturn those cornvictions which the Appeals Court has upheld.
The failure to obtain an admission of guilt, under these
circumstances, is really quite remarkable. It requires some
explanation for why it is in the public interest to accept: an
agreement with no admission of guilt. The Competitive Impact
Statement provides no such explanation. Also no estoppel against
Microsoft for private parties.
Another example is the proposed set-up is that the work of the
TC is completely secret. Section IV.B.9. requires that the TC's work
be kept secret. Section IV.B.10. prohibits the TC members from
making public statements. Section [V.D.4.d. requires that everything
the TC does must be kept secret, and that TC members may not testify
about their work. Section:IV.B.8.g. does allow TC members to
communicate to third parties "how their complaints or
inquiries might be resolved," but requires confidentiality of
all information obtained from Microsoft. The work of the TC, whether
good or bad, is not subject to any public check or verification.
Such secrecy allows a corrupt DOJ to hide the fact that no
enforcement actions against violations by Microsoft are being
undertaken. All this secrecy gives no confidence to the public, or
to potential complainants, that their complaints will be resolved
fairly or expeditiously. This is especially so, giver the widespread
perception among Microsoft's would-be competitors that this
agreement is essentially a sweetheart deal.
01/29/02 TUE 01:07 FAX 20240.85200 STEVENS DAVIS
MILLER MOS
By way of further example of lack of economic analysis in the
Competitive impact Statement, consider the following.
A thorough reading of both the Stipulation and the Competitive
Impact Statement indicates that neither document contains any
substantive economic analysis of any kind whatsoever. Nor is there
any reference to may document which does contain any substantive
economic analysis. This is a very serious omission, which is not
permitted with respect to other types of proposed government
regulation. This omission prevents both the Court and the public
from having any genuine basis by which to declare this agreement to
be in the public interest. Accordingly, for this reason alone,
review of the proposed agreement should be postponed, at least until
such time as the Department of Justice revises its Competitive
Impact Statement to provide such analyses.
The very words, "Competitive Impact Statement,"
suggest an attention to,the economic impacts of competition or lack
of competition. The nature of these possible impacts is well knower.
There can be competitive impacts on prices, sales quantities,
costs, quality of products or service, number of competitors, market
shares of competitors, the number and variety of products, and other
impacts of competition, imperfect competition, or no competition.
There is a whole field of economics, "industrial
organization," which is specifically devoted to analyzing
these impacts. Many of the economists who are employed by the
Antitrust Division of the Department of Justice have studied
industrial organization. The Department of Justice has access to
numerous consulting economists. It is therefore quite surprising,
indeed quite incongruous, that the D(c)J would issue a
"Competitive Impact Statement" in the very major case
before us, which is so completely devoid of any substantive economic
analysis.
In accordance with well-established practice, the Court should
require prier publication of a substantive economic analysis as part
of the government's "Competitive Impact: Statement" and
allow 60 days for public comments thereafter.
Certainly, there needs to be a quantitative assessment of the
likely competitive impacts of the various remedy alternatives.
Whether this quantitative assessment should be called cost-benefit
analysis or something else is not the primary issue. The primary
issue is whether the quantitative analysis of potential remedies
illuminates the equity criteria enunciated by the Supreme Court for
the resolution of antitrust cases. One important equity criterion is
whether a proposed remedy eliminates the "public injury"
from unlawful conduct. This requires a quantitative assessment of
past and prospective injuries, and a quantitative assessment of how
particular remedies reduce or eliminate that injury. Another
important equity criterion is whether the monopolist has been
deprived of the fruits of an unlawful victory. This requires a
quantitative measure, of how large those "fruits" are
and how effective each remedy would be in reducing or eliminating
such fruits.
The government provides no economic analysis at all. There are
no facts, figures. statements, tables, or economic models concerning
Microsoft's costs, prices, revenues, or profits. There is no
projection of costs, prices, revenues, profits, or consumer surplus
under various alternative scenarios or remedies. Nor is there any
economic analysis of any other competitive impacts, real or
imagined, which might flow from this proposed remedy or alternative
remedies. There is, in short, no genuinely substantive
"Competitive Impact Statement" which the public may
either approve or critique.
Without an economic analysis, there can be no substantive
statement of competitive impacts. 15 U.S.C.
16 @ ) requires filing a competitive impact
statement. Clause (3) requires " explanation of the proposal
.... including..the anticipated effects on competition of such
relief."
There are areas (1) where an economic analysis would have been
useful, but was not provided, and (2) where weakness in the
agreement suggests that the whole agreement is, and was perhaps
intended to be, essentially a sweetheart deal, For example,
Microsoft's predatory acts were undertaken for the purpose of
maintaining its highly profitable monopoly. Microsoft's profit from
these acts may be counted in the billions of dollars. Only multi-
billion dollar fines on Microsoft for failure to obey the terms of
the consent agreement can fully deter rational disobedience. The
Competitive Impact Statement provides no indication that the
settling Plaintiffs contemplate fines of this magnitude, nor is
there my economic analysis in the CIS which shows that fines of this
size are not needed. If" fines in the billions of dollars are
contemplated, the DOJ ought to say so. We may presume that Microsoft
will gladly pay its attorneys even as much as $100 million to avoid
a multi-billion dollar fine. Continued litigation by Microsoft is
virtually assured. If fines of this magnitude are not contemplated,
how does the DOJ intend to enforce this agreement?
By way of further example, the only "penalty"
specified in the consent agreement
[[Page 29162]]
for disobedience to the agreement is to extend the term of the
agreement for an additional two years (Section V.B.). However, it
would seem to be common-sense economics that if five years of an
ineffective regime is insufficient to deter unlawful behavior, then
an additional two years of the same ineffective regime is unlikely
to deter the unlawful behavior. A more sensible
"penalty" would be a five-year extension, renewable
indefinitely, not just once. In addition, real penalties for
disobedience should be instituted. For example, a fine equal to
triple the value of expected profits from uncaught disobedience
might be imposed. The proposed "penalties" of this
agreement also constitute partial evidence that, in reality, this is
a "sweetheart" agreement which the political leadership
of the DOJ has no intention of seriously enforcing.
By way of yet further example, section III.B. requires Microsoft
to post and publicize uniform licensing terms. This affirmative
obligation is all well and good. However there are some puzzles
here, which the Competitive Impact Statement does little to
elucidate.
First, Section III.B.2. allows the schedule to "specify
reasonable volume discounts." However, neither the agreement
nor the Competitive Impact Statement specifies what constitutes a
"reasonable" volume discount. Can there exist any set
of" volume discounts which is "unreasonable"? If
the answer is yes, presumably the DOJ can provide examples of
"unreasonable" volume discounts, and a methodology
(presumably based on economics) for determining whether volume
discounts are either "reasonable" or
"unreasonable." However, the Competitive Impact
Statement (pages 27-29) provides neither examples nor
methodology. If the answer is no, what is the purpose of this term
"reasonable"? This is one place where an economic
analysis is indicated, if only to clarify the meaning of this
agreement.
Second, Section III.B.3.a. makes a distraction between the top
ten Covered OEMs, and the second ten Covered OEMs, and allows two
different uniform schedules, Since the uniform schedules already
permit "reasonable volume discounts," what is the
purpose of further distinguishing the size of the OEMs? This
additional and unneeded flexibility simply gives Microsoft further
opportunities for discrinination and retaliatron If Microsoft is
especially interested in punishing one particular firm, Microsoft
may punish ten firms, while falsely daiming to be nondiscriminatory.
While this opportunity to discriminate may not be especially J
valuable, why offer this opportunity in the first place? Uniform
schedules for everyone is the better approach.
Third, Section III.B. only applies to 20 Covered OEMs. Section
VI.D. define:; these Covered OEMs as those manufacturers of personal
computers who had the largest purchases of Windows Operating System
Products during the previous fiscal year. However, why are these
uniform schedules applicable only to the top 20 OEMs? Why not simply
apply the uniform schedules to anybody who wishes to purchase
Windows Operating Systems, whether an OEM or not? Also, why should
these uniform schedules apply only to OEMs who previously purchased
Windows Products? It is the essence of non-discrimination that OEMs
should not be penalized for using non-Microsoft products. Yet, if an
OEM uses a competitor's product, it may find itself in the group of
non- Covered OEMs. This does not aid the professed goal of
preventing discrimination a, and retaliation.
Explanations for these various oddities are required. An
economic analysis of these oddities would be even better. What is
the past and projected market share of the top ten OFMs? What is the
past and projected market share of the second ten OEMS? What is the
past and projected market share of all remaining wholesale and
retail purchasers of Windows products? What differences in
competitive outcomes does the DOJ expect for the various possible
rules concerning the uniform schedules? This economic analysis
should have been provided as part of" the Competitive Impact
Statement.
Another example is as follows: Section III.D. requires Microsoft
to disclose A PIs and related documentation to all its Windows
Operating System Products and its Microsoft Middleware. This
affirmative obligation is also well and good. Again, however, there
are some puzzles, which the Competitive Impact Statement does little
to elucidate.
First, there are the timing differences on when these
disclosures must be made. In the case of Microsoft Middleware, it is
the "last major beta test release," which is not farther
defined. Presumably, the last beta test release could be a mere few
weeks before the commercial sale of the product, which is not much
advance notice to developers and competitors. For a: new Windows
Operating System Product, these disclosures must occur in a
"Timely Manner," which is further defined as the first
beta test version that is distributed to 150,000 or more beta
tester's. Is it possible that Microsoft might therefore choose to
beta test future versions o fits operating systems with fewer that
150,000 beta testers? The Competitive Impact Statement (pages
33-35) provide's no explanation for these differences in
timing. Nor does it provide any economic analysis concerting whether
Microsoft will henceforth have an incentive to "game"
these restrictions to avoid the intended competitive impact on its
future behavior. Nor has the DOJ provided any economic analysis of
how possible changes in the timing of API disclosures would affect
the competitive impacts.
Second, there is the timing of disclosures for Windows X. This
disclosure midst occur upon release of the first Service Pack, or
within twelve months, whichever is earlier. It is not explained
whether or why Microsoft needs twelve months to provide its
disclosures. If this amount of time is not needed, a lesser time
interval should have been provided. However, if several months time
is needed, then this necessarily delays Microsoft's issuance of
Service Pack 1.
Recent newspaper accounts indicate that Windows XP (and some
prior products) has a very serious bug which can allow a malicious
hacker to take control of thousands of computers running Windows XP.
This circumstance would ordinarily imply that Microsoft is under
very serious pressure to issue its first Service Pack on an
emergency, expedited basis. However, if the required disclosures
take too much time to prepare, then Section III.D. harms both
Microsoft and the public. If a proper economic analysis had been
performed, this oddity of the agreement likely would have been
exposed and corrected before being submitted to the public. In any
case, without a published economic analysis, it is difficult to
decipher why the DOJ thought this provision made good sense.
Yet another example of missing information arises from section
VI.J. which provides a confusing definition for "Microsoft
Middleware." In the consent agreement, the !four conditions
within the definition are combined with the word "and."
However, the Competitive Impact Statement (pages 17-19)
explains this term in a manner which suggests that these four
conditions ought to be combined with the term "or," not
"and." The Competitive Impact Statement (pages
18-19) discusses the situation where Microsoft might choose to
divide up its redistributables in such manner that the fourth
condition is not met, or even not provide a redistributable, yet the
Competitive Impact Statement suggests that such non-qualifying
software code is included under the definition. Either all four of
the conditions must be present to qualify as "Microsoft
Middleware" (an "and" requirement) or only some of
the four conditions need be present (an "or"
requirement). If the Competitive Impact Statement is correct, then
the language of the Stipulation requires revision (or vice versa).
Very, likely, if the Competitive Impact Statement is correct, then
the language of the Stipulation needs to be more extensively revised
than simply replacing "and" with "or."
Since this defined term "triggers Microsoft's
obligations" (page 17 of the,. Competitive Impact Statement),
it is important that the public and the Court be provided with a
clear conception of what this term means, it is difficult for me, or
any other member of the public, t comment on the suitability of an
agreement which might mean one thing, or might mean another thing.
In view of this apparent error regarding a key matter, I would
suggest that the DOJ revise the Stipulation, revise the Competitive
Impact Statement, or both, and resubmit to the public for further
comment.
Section VI.T. provides a definition of "Trademarked"
as used in the consent agreement. Pages 22-23 of the
Competitive Impact Statement elucidate this definition further. The
Competitive Impact Stateroom makes much of the supposition that
Middleware is Trademarked, or if not Trademarked then it is not
Middleware. Is this a distinction with a difference, or that will
make a difference? Here is one place where an economic analysis
would be useful, both to clarify whether this is a substantive part
of the agreement, and if it is substantive, the likely competitive
impacts of this provision of the agreement.
[[Page 29163]]
Obviously, there are many other provisions of this consent
agreement for which an economic analysis of competitive impacts
would have been useful. Such economic analysis, would have been
useful, both to clarify the meaning of the agreement, and to help
educate the Court and the public on the expected or intended
competitive impacts of the agreement. In addition, such economic
analyses would have provided a framework upon which the public, in
its commentary on the alleged competitive impacts, might accept,
modify, or reject. As it is, the public is left with many questions
and no answers; the public is given the unfair burden of developing
its own economic models for
4, The RPFJ Does Not Meet The Minimum Requirements Of Law
As many commentators have noted, the RPFJ does not accomplish
the four goals of antitrust remedies.
Further, by not entering an admission of guilt, Microsoft is
presumably free to. engage ha the same anti-competitive practices
enjoined by the agreement, after the five (or sever:) year term is
completed. This means that if Microsoft continues these anti-
competitive practices, after the term of the agreement is finished,
the antitrust authorities must prove anew that these: are unlawful
practices. Since there is no assurance that a competitive market
will be restored within five years, and no assurance that Microsoft
will no longer be the dominant firm in these markets, renewal of
these practices would be detrimental to the public. Also, the
expectation that these practices may be renewed at the end of the
five-year term puts a damper on competitors" beliefs that
Microsoft is truly enjoined from retaliation, since Microsoft can
simply wait before retaliating. This consent agreement essentially
throws away Microsoft's conviction.
The proposed five-year term is by no means long enough. A Final
Judgment was entered in 1995 and expires on February 21, 2002.
Exhibits 2, 3, and 4 hereto explain the problems with the prior FJ.
From the Declaration of grain Dautch attached hereto as Exhibit 5,
it appears that Microsoft may still be engaging in the banned per
processor licensing. In any event: the prior FJ did not restore
competition to the market for operating systems.
Microsoft has maintained its dominant monopoly position for a
period of over ten years. There is no reason to suppose that
Microsoft's dominant position will suddenly evaporate as a result of
this consent agreement. So long as Microsoft remains the dominant
firm, restrictions on its conduct will continue to be necessary. A
far better approach for the conduct remedy is to institute a ten-
year term, renewable indefinitely at ten-year intervals. If during
the term of the conduct remedy Microsoft no longer has dominance in
the industry (e.g., has less than 30% market share), Microsoft may
petition the Court for relief from the conduct restrictions.
Further, even assuming that the notion of setting up a Technical
Committee to investigate complaints is inherently justifiable, there
are obvious problems with this particular proposed set-up. The first
problem is that Microsoft is allowed to choose half the
investigators (Section IV.B.3.). Microsoft's appointment of an
internal Compliance Officer (Section 1V.C.), as well as its own
regular attorneys, should be sufficient protection for Microsoft;
Microsoft does not need to appoint half the investigators. I am
unaware of any administrative agency for investigating,
discrimination and retaliation complaints which is set up in such a
manner that the accused discriminator or retaliator is allowed to
choose half the investigators. This provision by itself constitutes
partial evidence that this is a corrupt, sweetheart deal between DOJ
and Microsoft. Microsoft should play no role in the selection of TC
members,
Further, with regard to discrimination, the consent agreement
appears deficient, because it does not overflow with objectively
verifiable, affirmative obligations upon Microsoft. In the whole of
Section Ill, "Prohibited Conduct," only sub-sections
III.B. and III..D. require any affirmative obligation by Microsoft.
The remaining sub-sections of Section III either do not impose
obligations (Sub-section J) or are suffused with anti-discrimination
and anti-retaliatory language (Sub-sections A, C, E, F, G, I-t, and
I). In the absence of considerable amounts of trust and goodwill by
both Microsoft and its competitors, such provisions may prove either
unenforceable or enforceable only after extensive litigation. The
delays inherent in a) first having a TC investigation, and b)
perhaps followed by litigation, provide cold comfort to any
competitor or would-be competitor who may experience or fear
discrimination or retaliation by Microsoft.
Labor economists have analyzed discrimination for decades. One
economic proposition concerning discrimination is that its effects
are likely to be worse in monopoly markets roan in competitive
markets. If a monopolist discriminates, one must suffer the
discrimination, because there is no one else to do business with.
However, if one of many competitors discriminates, one may still
attempt to do business with the others. Even if half of all
employers discriminate, minorities may still find employment on
favorable terms with the other half of the employers.
This simple economic proposition has a clear application in this
case. If :toe's primary concern is to prevent discrimination and
discriminatory retaliation by Microsoft, the best way to achieve
this objective is through a structural remedy: Break up Microsoft
into two or more firms. Eliminate the monopoly, and the threat of
discrimination and retaliation loses its fearsome power, and also
becomes mostly unprofitable. Not performing a structural remedy
means that discrimination and retaliation is both profitable for
Microsoft and fearsome to Microsoft's would-be competitors. This
consent agreement fails to use the most efficacious means to achieve
its primary objective. The most likely result of the consent
agreement is continued fear, continued discrimination, continued
retaliation, continued litigation, and continued monopoly.
Labor economists also know that under a wide variety of economic
assumptions and circumstances, discrimination against minority
workers is an unprofitable activity for employers. 4 In a
competitive market, the result is segregation of minority workers
into separate firms, but not lower wages, assuming equal skill by
the minority workers.
The outlawing of unprofitable activities is easier to enforce
than the outlawing of profitable activities. Even though the laws
against discriminatory motives are inherently difficult to enforce,
their enforcement is aided by the fact that employment
discrimination is normally not profitable. This is not the
circumstance for discriminatory acts by Microsoft.
5. Appearance Of A Conflict Of Interest
Microsoft has made an investment of about $23 million in
politicians from 199:7 to 2001. See Exhibit A (Dautch Dec. and
attachments) to Exhibit 10 hereto.
Given an estimated value of AOL's private antitrust suit against
Microsoft in the neighborhood of $20 billion, Microsoft may be about
to earn close to a 1000 to I on just the AOL suit.
The Attorney General and Assistant Attorney General along with
the Other political nominees or appointees of the current
Administration should consider recusing themselves and leaving
further consideration of this matter to the career employees of the
Antitrust Division.
LIMITED COPYRIGHT LICENSE
For the sole purpose of allowing the United States (including
all three branches of the government) to analyze these comments, to
publish these comments in the Federal Fegister and to file a copy of
these comments with any courts it deems appropriate (including the:
United States District Court for the District of Columbia), l hereby
grant the United States a time-limited non-transferable royalty free
non-exclusivc license without the right to sublicense and without
the right to enforce limited to the purposes stated herein to make
such copies of the copyrighted material as are necessary; 1) to
publish the copyrighted computer programs submitted as part of these
comments in the Federal Register; 2) to make such copies of the
computer programs as are necessary to: file a copy of these comments
with the United States District Court for the District of Columbia;
and, 3) to run and modify only the inputs and source code to the
computer programs for the purpose of preparing a response to these
comments or for the purpose of analyzing these comments (no license
to create a derivative work is granted by his license).
The limited copyright license granted hereby terminates one day
after the last possible clay to file any appeal in any court from
the entry of the RPFJ or termination of consideration of the RPFJ in
U.S.v. Microsoft, Civil Action No. 98-1232, presently pending
in the U.S. District Court for the District of Columbia.
B. The Public Interest The Public interest is in seeing that the
laws are fairly and fully enforced by mpartial law enforces without
regard to the political or other connections of the alleged
violators of the law. Entry of the RPFJ is not in the public
interest for many reasons as discussed above and by many of the
other commentators on the RPFJ such as
[[Page 29164]]
Drs. Litan, Nell, and Nordhaus and the American Antitrust Institute.
The RPFJ will not stop the antitrust violations. The RPFJ will not
prevent a recurrence of the current violations or very similar
violations. The RPFJ will not unfetter the market from predatory
anti-competitive conduct. The RPFJ will not deny to Microsoft the
flints of it illegal conduct.
The RPFJ, if entered, will make a mockery of the judicial power.
The RPFJ may send a clear message to all Americans that if you
violate the law and then contribute enough money to the party in
power, you may be able to operate outside the law indefinitely and
profitably. ".[he RPFJ may undermine public confidence in the
fairness and agility of the Department of Justice It is not in the
public interest to achieve the ends set forth in this paragraph.
Entry of file RPFJ is not in the public interest. The court
should refuse to approve or enter the RPFJ. in order to avoid a
conflict of interest or the appearance of impropriety due t,) the
massive amount of campaign contributions by Microsoft to the current
Administration and its leaders, the Attorney General and the other
nominees or appointees of the current President or Attorney General
should recuse themselves from any further consideration of this
matter and delegate further consideration to career lawyers in
Antitrust Division all of whom should be protected by this Court in
advance (in addition to any statutory rights they may have) against
reprisals by the political nominees and appointees.
While many issues are raised by these comments, we hereby
specifically request a response to questions and issues including,
but not in any way limited to, the following:
1. Does Attorney General Ashcroft intend to recuse himself from
any further involvement in matters involving Microsoft and, in
particular, U.S.v. Microsoft, Civil Action No. 98-1232,
presently pending before the U.S. District Court for the District of
Columbia? If so, when? if not, why not?
2. Does Attorney General Ashcroft intend to recuse (or remove)
any political appointees serving under him in the Department of
Justice from any further involvoment in matters involving Microsoft
and, in particular, U.S. v. Microsoft, Civil Action No.
98-1232, presently pending before the U.S. District Court for
the District of Columbia? If so, which appointee or appointees? If
so, when? If not, why not?
3. Does Assistant Attorney General James intend to recuse
himself from any further involvement in matters involving Microsoft
and, in particular, U.S.v. Microsoft, Civil Action No.
98-1232, presently pending before the U.S. District Court for
tile District of Columbia? If so, when?
If not, why not?
4. lf he remains involved in U.S.v. Microsoft, does Assistant
Attorney G moral James who has personal "knowledge that a non-
counsel of record (e.g. Charles f". Rule, Esq.) engaged in
undisclosed written and/or oral communications on behalf of
Microsoft with officers and/or employees of the United States
(specifically officers and/or employees of the Department of
Justice) concerning or relevant to the RPFJ (including negotiations
leading to agreement on the terms of, and the signing of, the RPFJ)
intend to sign and file with the United States District Court for
the District of Columbia a certification of compliance (as ordered
by the Court on November 8, 2001) with the requirements of the
Antitrust Procedures and Penalties Act (Turnkey Act).: 15 U.S.C.
16(b)-(h)? If he remains involved in U.S.v. Microsoft and Microsoft
does not amend !he Microsoft Description and Assistant Attorney
General James does not sign and file a certificate of compliance
himself, does he intend to order or allow one of his subordinates to
sign and file such a certificate of compliance? Why did Assistant
Attorney General James sign the Stipulation and RPFJ (both dated)
November 6, 2001, but not the CIS?
5. Does the United States intend to amend and publish in the
Federal Register an amended Competitive Impact Statement
("CIS")? If so, when? If not, what is the basis for the
United States" position that the current CIS complies with 15
U.S.C. 16(b)(3), (4), and (6!I?
PROTEST AND RESERVATION OF RIGHTS
This letter including the exhibits, attachments, and enclosures
to and with this letter all of which are hereby incorporated fully
by reference herein constitute the comments by Relpromax Antitrust
Inc. ("Relproma") pursuant to the notice published by
the United States at Fed. Reg. 59452, Vol. 66, No. 229 (Nov. 28,
2001) and pursuant to 15 U.S.C. 16@) with respect to the
Revised Proposed Final Judgment dated November 6, 2001, and filed in
U.S.v. Microsoft, Civit Action No. 98-1232, presently pending
before the United States District Court for the District of
Columbia.
Relpromax has filed with the United States District Court for
the District of Columbia two motions related to these comments,
certain statutory deadlines, and a court Order related to these
comments. The first motion seeks, among other things, an order to
compel Microsoft to meet its disclosure obligations under 15 U.S.C.
16(g). A copy of the brief (including exhibits and attachments) in
support of the first motion ("Memorandum Of Points And
Authorities in Support Of The Motion Of Relpromax Antitrust Inc. For
Limited Participation As An Amicus Curiae And For An Extension Of
Time") is attached hereto as Exhibit 10 and incorporated
herein fully by reference. The second motion seeks, among other
things, an order to compel the United States of America
("United States") to meet its obligations with respect
to a Competitive Impact Statement ("CIS") under 15
U.S.C. 16@). A copy of the brief in support of the second
motion ("Memorandum Of Points And Authorities In Support Of
The Motion Of Relpromax Antitrust Inc. For Limited Participation As
An Amicus Curiae And For An Extension Of Time On The Grounds That
The United States Has Not Provided A Competitive Impact Statement In
Compliance With The Requirements Of 15 U.S.C. 16(b) ") is
attached hereto as Exhibit 11 and incorporated herein rally by
reference.
The failures of the United States and Microsoft to comply fully
with the requirements of the Antitrust Procedures and Penalties Act
("Tunney Act"), 15 U.S.C. 16(b)-(h), have kept Relpromax
and the public generally from receiving all the information that is
required by statute to be provided no less than sixty (60) days (in
the case of the CIS) and fifty (50) days (in the case of Microsoft's
disclosures) before the deadline for filing these comments.
Accordingly, these comments are filed under protest, with a full
reservation of all rights available to Relprornax, and must be
viewed as preliminary and subject to amendment or expansion if and
when additional public disclosures are made by the United States or
Microsoft or by third parties making available information which
should have been made available by either the United States or
Microsoft.
We look forward to receiving the response of the United States
to the foregoing and to the publication of all of these comments
(including the exhibits and attachments submitted herewith all of
which are again incorporated by reference) in the Federal Register
and to the submission of these comments to the court by the United
States.
Thank you very much for your attention to this matter.
Sincerely,
President
Relpromax Antitrust Inc.
Exhibit 1
Exhibit 2
Exhibit 3
Exhibit 4
Exhibit 5
Exhibit 6
Exhibit 7
Exhibit 8
Exhibit 9
Exhibit 10
Exhibit 11
Exhibit 12
Exhibit 13
EXHIBIT LIST
Discussion of computerized model, data inputs to model, and
computer source code for model for analysis of competitive impact of
the RPFJ consisting of:
a. Explanation, model inputs, and intermediate outputs used as
inputs to final calculations: Attachments A-l, A-2, B-F, and R-S
b. Results: Attachments G-J
c. Source code for model: Attachments K-Q
d. Article by Carl Lundgren, Review of Industrial Organization,
Volume 1 I, Number 4, August 1996, pp. 533-550: Attachment T
Proposed Final Judgment dated on or about July 15, 1994, in U.S.
v.Microsoft, Civil Action No. 94-1564, U.S. District Court for
the District of Columbia
Competitive impact Statement dated July 27, 1994 Memorandum Of
Amici Curiae In Opposition To Proposed Final Judgment, signed by
Gary L. Reback and dated January 10, 1995
Declaration of Brian Dautch dated January 27, 2002
Declaration of Paul M. Romer (Redacted Public Version) dated
April .27, 2000
Declaration of Carl Shapiro dated April 28, 2000
Affidavit of former Senator John Tunney dated January 22, 2002
[[Page 29165]]
Letter dated August 9, 2001, from 88 Members of Congress to The
Honorable John Ashcroft (Attorney General of the United States),
Steven Ballmer (Chief Executive Officer of Microsoft), and The
Honorable Tom Miller (Attorney General of Iowa) Memorandum Of Points
And Authorities In Support Of The Motion 05 Relpromax Antitrust Inc.
For Limited Participation As An Amicus Curiae And For An Extension
Of Time Memorandum Of Points And Authorities In Support Of The
Motion Of Relpromax Antitrust Inc. For Limited Participation As An
Amicus Curiae And For An Extension Of Time On The Grounds That The
United States Has Not Provided A Competitive Impact Statement In
Compliance With The Requirements Of 15 U.S.C. 16(b)
Charles A. James, The Real "Microsoft" Case and
Settlement,
16 Antitrust 58 (ABA Fall 2001)
Dan Eggen, Enron Executives Contributed to Ashcroft Campaign,
The/Washington Post, January 11, 2002, p. A7
EXHIBIT 1 TO THE COMMENTS OF RELPROMAX ANTITRUST INC.
ATTACHMENT A- 1
ECONOMIC MODEL FOR ANALYSIS OF COMPETITIVE IMPACT OF THE RPFJ
A. THE MODELING PROBLEMS CAUSED BY THE SHORTCOMINGS OF THE
COMPETITIVE IMPACT STATEMENT
As indicated above, the Competitive Impact Statement provides no
economic analysis or economic modeling of any kind. The Competitive
Impact Statement does not even provide raw economic data upon which
an economic analysis might be made. It provides no information
concerning revenues, costs, profits, quantities, or product
qualities of Microsoft, its competitors, or potential competitors
which might usefully be incorporated into an economic model. The CIS
does not indicate the United States reviewed or considered any such
items (i. e. revenues, costs, profits, quantities, or product
qualities of Microsoft, its competitors, or potential competitors )
in connection with the RPFJ or the CIS. The DOJ's "Competitive
Impact Statement" may be a "statement" of sorts,
but it is clearly not a statement of "competitive
impacts," about which the statement truly says nothing at all.
This places a heavy burden on the public. Members of the public
who wish to critique the consent agreement, must not only devise
their own economic models and collect their own economic data, they
can only guess at what economic models and economic analysis the D0J
is hiding from the public.
Accordingly, a member of the public who wishes to comment is
forced to devise her own economic models and collect her own
economic data. In the case of this model, the work has been
performed by a professional economist. It would be preferable to use
or critique the DOJ's own economic models of the software -industry.
However, the DOJ has provided no such economic models and no
analysis of the competitive impact of the Revised Proposed Final
Judgment.
B. How an Economist Analyzes Competition
To an economist, an assessment of the competitive impacts of a
remedy proposal requires an assessment of the factors impacting on
competition. Competition can be measured or understood in a variety
of ways. One paradigm that is often used by economists is the
Structure-Conduct-Performance paradigm. The Structure of an industry
concerns such matters as the number of firms in a market and the
market shares of firms in a market. For example, if an industry has
twenty business firms, and no firm has more than a twenty percent
market share, the industry is probably competitive. If the industry
has only two firms, and one of the firms has an eighty percent
market share, the industry is probably not competitive.
The Conduct of an industry refers to the behavior of business
firms within an industry. How do they conduct business? Are they
actively colluding? Do they frequently share price information? Does
one firm normally set prices, while the other firms simply set the
same price in response? These are all behaviors which may indicate
lack of competition. Some of these behaviors may also be a violation
of the antitrust laws.
Finally, the Performance of an industry refers to how well the
industry serves the interests of consumers (or society generally).
For example, are prices high or low relative to the costs of
production? Is the quality of goods and services high or low
relative to the cost of producing quality, and relative to what
consumers are willing to pay for quality? Is the variety of goods
and services high or low relative to the value which variety and
choice have for consumers, and relative to the extra costs (if any)
associated with producing and selling that variety?
Economists typically measure the interests of consumers using a
concept called "consumer surplus" ("CS").
Consumer surplus is a dollar measure of the value which consumers
receive by being able to purchase goods at a low price rather than a
high price, by being able to purchase goods they want, and by
obtaining good quality from what they purchase. For example, if a
consumer would have been willing to pay $200 for an operating
system, but only paid $50, then that consumer receives a consumer
surplus of $150. If a second consumer would have been willing to pay
$75, but only pays $50, then the second consumer receives a consumer
surplus of $25.
Economists also typically evaluate the performance of an
industry using a related concept called "total surplus"
("TS"). Total surplus is simply the sum of
"consumer surplus" and "producer surplus"
("PS"). Producer surplus is a dollar measure of the
value which producers receive by being able to sell their land,
labor, or capital at a higher price rather than a lower price. For
example, if a worker would have been willing to sell his labor for
$35,000 a year, but is paid $50,000 a year, that worker receives a
producer surplus of $15,000 a year. If a capitalist is willing to
lend or invest his money for a 10% return, but receives a 25%
return, that capitalist receives a producer surplus of 15%.
When an industry is competitive, its performance in terms of
"total surplus" will be at a maximum. Its performance
for consumers will also be near a maximum. When an industry is
competitive, the only way to improve consumer surplus is to lower
prices still further, but this would cause producers to suffer
losses. Hence, when an industry is competitive, consumer surplus is
at a practical maximum, because there must either be government
subsidies or unhappy producers, if consumer surplus is to be
..increased still further.
When an industry is not competitive, its performance in terms of
total surplus is reduced. When an industry is not competitive,
prices are higher and output is lower, than what would occur if the
industry were competitive. Because prices are higher, consumer
surplus is lower, but producer surplus is higher. However, the total
surplus is reduced, because the producer surplus is increased by
less than the amount by which consumer surplus falls, so the sum of
the two surpluses is reduced. Hence, whether we measure industry
performance by the metric of "consumer surplus" or by
the metric of "total surplus", more competition is
better than less competition.
C. How an Economic Analysis Impacts this Case
Industry performance can be poor, either because the industry
structure is bad, because the industry conduct is bad, or because
both structure and conduct are bad. A well-designed competition
policy would attempt to remedy or prevent both bad structure and bad
conduct.
However, the antitrust law as it is presently formulated is not
a well-designed competition policy. The antitrust law attacks bad
conduct, but does not attack bad structure per se. A monopoly is
usually a bad industry structure, which frequently leads to bad
competitive performance, but a monopoly as such is not illegal under
the antitrust laws. A monopoly is only illegal if it is acquired or
maintained through anti-competitive conduct. Hence, even though
Microsoft is a monopoly, if Microsoft never does anything illegal,
Microsoft is perfectly free to record its monopoly profits at the
expense of consumers.
However, Microsoft did act unlawfully.
It is, of course, the primary aim of the antitrust laws to
protect consumers and competition, not competitors as such.
Naturally, competition requires competitors, and consumers are
better off when competitors are protected from certain types of
anti-competitive conduct. Nevertheless, the interests of consumers
are paramount when fashioning a remedy. The interests of competitors
are of secondary importance. A disinterested economic analysis will
always keep this goal in mind when comparing remedies for the
Court's consideration.
D. Preliminary Data for the Economic Model
In order to be useful, an economic model must have as close a
relationship to reality as possible given the constraints inherent
in any model. An economic model cannot mimic economic reality
entirely, because economic reality is too complex to model in its
entirety, many aspects of economic reality are not humanly known,
and such an exacting economic model would be far too complex for
either humans or computers to calculate in a reasonably timely
fashion. Hence, all economic models (like all
[[Page 29166]]
scientific models) are a simplification of reality.
The first consideration is the basic economic data and
assumptions. The primary data of interest are costs, revenues,
profits, and market shares for each of Microsoft's three monopolies.
These three monopolies are the Windows operating system monopoly,
the Internet Explorer browser monopoly, and the Office (e.g., word
processing, spreadsheet, and database) software monopoly. Each of
these three monopolies is implicated in antitrust violations
committed by Microsoft. The Windows operating system monopoly is
especially implicated in these violations. There is the question of
whether we should model all three monopolies, or only one monopoly,
for purposes of corrective action. This problem is solved by running
one version of the model for Platform revenues only and another
version of the model for all types of product revenue.
Neither Microsoft nor the DOJ has provided data on costs,
revenues, and profits for each of Microsoft's three monopolies, or
for any of them. The DOJ has not provided such data as part of its
Competitive Impact Statement, nor has Microsoft provided such data
on its Investor Relations website. However, Microsoft does provide
data for revenues for various business units since July 1997. These
business units are "Desktop Platforms", "Desktop
Applications", "Enterprise Software and Services",
and a few other misce1Ianeous units. The "Platforms"
unit corresponds most closely to Microsoft's operating system
monopoly. The "Applications" unit corresponds most
closely to its Office, and possibly its browser, monopoly. It is
unclear at this time whether, and to what extent, the
"Enterprise Software" unit corresponds to either
competitive or monopoly markets, including operating systems for
server markets, the browser market, or commercial services based on
the Internet.
Hence, as initial data for the economic model, four sets of
revenue figures for Microsoft's monopolies were used. The first set
of revenue figures is based solely on Microsoft's Platform Revenues,
which most closely conforms to a narrow vision of Microsoft's
monopoly. The second set of revenue figures is a summation of
Platforms & Enterprise Software. The third set of revenue
figures is a summation of Platforms & Applications. The fourth
set of revenue figures is a summation of Platforms, Applications
& Enterprise Software. The revenue figures are arranged in
increasing order of size, with the first set of figures being the
smallest, and the fourth set of figures being the largest. This
information is shown in Attachment A-2 which immediately follows
this Attachment A-1.
As it turns out upon analyzing the results produced by the
model, the qualitative conclusions of the economic model are
basically unaffected by whether the model uses Platform revenues as
a base or essentially all product revenues as a base. Quantitative
results will change, of course, because the fourth set of figures
roughly triples the calculated values compared with the first set of
figures. Nevertheless, the qualitative conclusions remain the same.
In order to p1ace these historical figures into useful format, the
revenue figures are projected backwards in time through calendar
year 1995. This is done by computing quarterly revenues for each
business unit as a percentage of total revenues. A statistical
regression on these percentages was used to determine if these
percentages were growing or shrinking. These statistical tests
indicated modest, but statistically significant, changes in these
percentages over the time interval July 1997 through September 2001.
Hence, similar percentage changes were used to determine the missing
historical data for January 1995 through June 1997. These projected
percentage changes for the three business units were multiplied by
Microsoft's reported total quarterly revenues for the quarters of
these prior years to obtain estimated values for the revenues of
each of Microsoft's three main business units for each such quarter.
These data were converted from nominal dollars to real dollars.
Nominal dollars are simply the actual reported dollars, without any
adjustment for changes in purchasing power due to inflation. Real
dollars are nominal dollars as of a given year, but adjusted for
inflation for years other than the base year in which the real
dollars are being reported. In order to convert the nominal dollars
into real dollars, the U.S. Bureau of Labor Statistics" (BLS)
Consumer Price Index (CPI) for "All Urban Consumers (Current
Series)" was used. This is the most commonly used inflation
index. The nominal dollars were converted to real dollars using 2001
as the base year.
Next, the real quarterly revenues were projected into the
future. For each of the three business units, the 1995-2001
historical growth rates were calculated using log-linear statistical
regressions. Revenue growth rates were very high, 19.8% annual
growth for Platforms, 18.5% annual growth for Applications, and
28.9% for Enterprise Software, all expressed in real dollars.
However, revenues did falter a bit in the last year of data. Hence,
I used the average of the last four quarters of the data available
to me as the baseline to estimate the last quarter of revenue data
for calendar year 2001.5 Upon this baseline estimate of revenue for
the fourth quarter of 2001, I projected all future growth.
In order to project future growth, I assumed that software
Downloaded December 5, 2001 from the BLS's CPI web page, available
at http://stats.bls.gov/cpi/home.htm . The average CPI for 2001 was
computed as the eight- month, mid-year average for 2001. Since the
last two months of 2001 were not yet available, the first two months
were dropped for symmetry.
Microsoft's accountants use a fiscal year which differs from the
calendar year. I re-dated all Microsoft figures to their true
calendar years. production would eventually become a
"mature" industry. As a mature industry, real growth
rates are unlikely to exceed some modest figure, such as 3% per
year. However, computer software has not yet reached this stage of
maturity. Software growth is very much driven by the phenomenal
growth in computer hardware capabilities. The growth rate of
computer hardware capacity is -unlikely to taper off anytime soon,
even if we restrict our attention to foreseeable technological
developments.
However, revenue growth rates for software are unlikely to be
sustained indefinitely into the future at annual rates of 18%-30%,
no matter how amazing these future developments in computer hardware
may be. Accordingly, I project that the current rapid growth in
monopoly revenues will gradually slow down to the more modest growth
rate of 3% a year. In my projections, I allow the historically-
observed, rapid growth rates to converge towards the slower
"mature industry" growth at the convergence rate of 5%
per quarter. That is, if the growth rate in quarter I is 20%, then
the growth rate in quarter 2 is assumed to be (20% x 0.95) + (3% x
.05) = 19.15%. Alternative projections for Microsoft's future
monopoly revenues may also be reasonable. However, it is unlikely
that alternative projections will fundamentally alter the
qualitative conclusions.
These quarterly estimates and projections for Microsoft's
revenues by business division were then summed into annual figures
for each calendar year from 1995-2025. Attachment A-2 provides
the real revenue figures and projections which were used in the
computerized economic model.
The next main piece of data is data on costs. Data on costs were
also obtained from Microsoft's Investor Relations website. Data on
Microsoft's expenses are available for the company as a whole, but
do not appear to be available by business division. Hence, the only
option is to take an average across business divisions as being
representative of Microsoft's three main business divisions.
Microsoft's spreadsheets available on the microsoft website list
their expense items as a percentage of revenue for each microsoft
Fiscal Year. The percentages from the last ten fiscal years were
used to compute ten-year averages for each expense item as a percent
of revenue. These 10-year averages are listed in Attachment B.
These expense items were then classified as either short-run
costs or long-run costs. Microsoft's profit and loss sheet does not
show capital expenses as such. However, it does show Research and
Development (R&D) expense. It is assumed that R&D for its
software products is Microsoft's main long-term cost. "General
and administrative" expense is also classified as a long-term
cost. The other expenses I classify as short-run costs. According to
this classification, Microsoft spends 41.01% of its revenue on
short-term costs, and 18.55% of its revenue on long-term costs.
These percentages have held fairly steady over the years, with some
variations.
To the extent that long-term costs take time to develop their
respective revenues, and to the extent that Microsoft's revenues are
growing, these long-term costs as a percent of revenue are probably
overstated. For example, if Microsoft's revenue in Year I is $100,
and its R&D expense in Year 1 is $20, that is 20% of revenue.
However, suppose that it takes 4 years for Microsoft's R&D
expenditure to pay off. Suppose that in the
[[Page 29167]]
same 4 years Microsoft's revenue has doubled to $200. Microsoft's
$20 R&D expenditure in Year I has helped to create $200 of
revenue in Year 5. This is a percent of revenue of only 10%, not
20%.
However, to the extent that investors require a positive return
on their capital investments, these long-term costs as a percent of
revenue may be understated. For example, if investors require a
return of 50% on their capital over a 4-year period, then an
investment of $20 in Year I will require repayment of $30 in year 5.
If Microsoft's revenues had remained at $100 in Year 5, this would
be a percent of revenue of 30%, not 20%. If Microsoft's revenues
rose to $200 in Year 5, this would be a percent of revenue of 15%,
and not 10%, 20%, or 30%.
For purposes of the computerized economic model, it is assumed
that these two effects offset each other, and accordingly the model
uses the raw percentage, 18.55%, as Microsoft's long-term cost of
production. These two effects will exactly offset each other only if
investors" required return on capital exactly matches
Microsoft's growth rate. This is unlikely to happen exactly. It is
most likely that the investors" required real rate of return
on capital investment is less than Microsoft's phenomenally rapid
growth rates in revenue. Hence, Microsoft's long-term cost of
production is probably somewhat less than 18.55%.
Finally, we consider Microsoft's market share. In the Findings
of Fact, Judge Jackson indicated that Microsoft's market share in
operating systems was over 90% for over a decade.7 More recent
market share data indicates that Microsoft has approached or Finding
of Fact number 35. U.S. v. Microsoft, 84 F.Supp.2d 9, 19 (D.DC 1999)
exceeded a 90% market share in all three of Microsoft's monopolies:
Since the beginning of the trial, Microsoft's share of the web
browser market has increased from less than %5% to more than B7%,
its position in the desktop operating system market has risen to 92%
(a 3% increase in the last year) and its market share for business
productivity applications, such as word processing and e- mail, is
now over 96%.
E. Equations for the Economic Model
An economic model must model both the demand side and the supply
side of the markets in question. However, to keep the model simple
and tractable, it is best to use equations that are fairly easily
solved and calculated. For the demand side, I assume that the
product being produced is "homogenous". This means that
the product is essentially the same, in the eyes of the consumer,
whether the product is produced by one firm or another firm.
Software products produced by different firms are probably not
completely homogenous, either because a firm's reputation, or its
product quality, or other product features may differ across firms.
However, the assumption of product similarity across firms is often
& true enough for modeling purposes. In addition, even though
product quality may differ, a simple reinterpretation of the model
can handle such situations. To the extent that people are willing to
pay more for higher quality, we can interpret this situation as if
the higher quality is equivalent to higher quantity.
Another simplifying assumption for the demand side is that the
industry demand curve (graph of the price of a product vs. quantity
of a product demanded at each price) is linear. A demand curve is
unlikely to be linear (that is, it is unlikely to be a straight
line). However, the only range of prices worth considering for the
competitive analysis is the prices and outputs that lie between the
monopoly price and output and the competitive price and output. Over
a small range of prices and outputs, the demand curve is likely to
be close to a straight line. Therefore, it is unlikely that assuming
curvature or lack of curvature in the demand curve will play any
significant qualitative role in the conclusions of such a
competitive analysis.
Accordingly, the demand side assumes that products are
homogenous and that demand curves are linear, according to the
equation:
P = A--bQ (1)
Where P=Price (same for all firms), Q=Industry Output Quantity,
and A and b are positive parameters (intercept and slope of the
demand curve) .
We now turn to the supply side. Technically, only competitive
firms have supply curves (graph of the price of a product vs.
quantity of a product supplied at each price). Monopoly firms have
only marginal cost curves. In this industry, we assume that firms
are few in number, either one or a very few firms. Hence, the
industry at all times is either a monopoly or an oligopoly. Standard
textbook theory tells us how to analyze the production decisions of
a monopoly firm. However, there is no single textbook model for how
to analyze an oligopoly. This is because there are multiple ways in
which an oligopoly industry might behave.
In order to analyze the production decisions of either a
monopoly or an oligopoly, it is necessary to posit the nature of the
cost curves which they face. It is assumed that different firms may
have different costs of production. However, for simplification, it
is assumed that each firm (subscripted i for each firm i, where i =
1, 2, 3 .... ) has both a fixed cost (Fi) and a marginal cost (Ci).
It is assumed the marginal cost is constant (but different) for each
firm. Since the fixed cost has an effect only on entry decisions,
exit decisions, and shut-down decisions, rather than pricing
decisions, it is assumed that the fixed cost is the same for all
firms (Fi=F for all i). These simplifying assumptions are unlikely
to have a significant qualitative impact on the conclusions.
Hence, the total cost or cost curve for each firm is assumed to
be:
TCi = Fi + QiCi (2)
Where TCi = Total Cost for firm i, Fi = Fixed Cost for firm i,
Qi = Quantity of output for firm i, and Ci is the constant marginal
cost for firm i. In addition, we assume that Fi = F for all firms
which are producing and Fi = 0 for all firms which are not
producing.
For a monopoly firm, it is sufficient to know the cost side and
the demand side to obtain a prediction for the production decision.
The monopolist's profit is:
Profiti = TRi--TCi
= PQi--(Fi + QiCi)
= PQi--QiCi--Fi (3)
Where TRi = Total Revenue for firm i = PQi, and TCi comes from
equation (2).
Assuming that the fixed cost is not so high as to make
production not profitable, the monopolist finds it most profitable
to produce at the output level where marginal cost (MC) equals
marginal revenue (MR). On a graph showing a plot (or curve) of
dollars of profit per unit vs. the quantity of units produced, this
output level (where MC = MR) is the highest point on the curve. The
eye can determine this point at a glance.* To determine this output
-level by computer, calculus is used and this output level is
determined by obtaining the partial derivative of Profits with
respect to the firm's choice of Qi and setting these derivatives
equal to zero:
(d Profiti / d Qi) =
(d P / d Qi)Qi + P--Ci = 0
bQi + P--Ci = 0 (4)
Where we substitute (d P / d Qi) = b from the derivative of the
demand curve in equation (1).
For an oligopoly firm, we must make a choice from many possible
oligopoly models, a model which is reasonable for the situation at
hand. A standard oligopoly model, first developed by a French
economist named Cournot over 150 years ago, is still frequently used
by economists today because it is fairly easy to compute. The
Cournot model assumes that each oligopoly firm makes its output
decision under the assumption that rival firms will not change their
output in response to its own change in output. The Cournot model
yields an oligopoly price and output which is intermediate between
competition and monopoly. Also in the Cournot model (when firms have
the same marginal cost), an increase in the number of firms causes
prices to fall and output to rise. When there are a very large
number of firms, the Cournot model predicts competitive pricing,
which is what we would expect.
When all firms attempt to maximize their absolute level of
profits, the profit-maximizing equations for each firm under the
Cournot model are:
Profiti = PQi--QiCi--Fi (4)
(d Profiti / d Qi) =
(d P / d Qi)Qi + P--Ci = 0
bQi + P--Ci = 0 (5)
The Cournot model is reasonable for the circumstances of this
industry. Given a fairly significant level of fixed costs for this
industry, it is unlikely that more than two or three firms can
survive as major players in this industry. Fixed costs for software
production (i.e., for research and development) require that firms
must have significant sales simply to break even. This limits the
number of firms which can survive as major players in the industry.
Microsoft's long-run costs appear to be about 18.55% of
revenues. If all of these costs are fixed costs, then no more than
five firms can exist in the industry, because fixed costs for six
firms would eat up 18.55% x 6=111.3% of the industry's
total revenue. This is unviable. In addition, there are also the
short- run costs that must be covered. Furthermore, when there are
two or more firms in the industry, we expect prices to fall, which
allows firms to sell more, but only at a lower profit margin.
[[Page 29168]]
Computer results from a preliminary economic model, which
allowed up to five firms in the industry, indicated that if fixed
costs are either 75% or 100% of the long-run costs, then only two
firms can survive in this industry. If fixed costs are either 25% or
50% of the long-run costs, then only three firms can survive in this
industry. If fixed costs are 0% of the long-run costs (i.e., all
long-run costs are variable costs), then it is possible for four or
five firms to survive in this industry. Accordingly, the computer
model was revised to consider a maximum of three firms in the
industry.
Given that only two or three firms can successfully survive,
under Cournot assumptions, we may ask if the Cournot model is a
reasonable description. Alternative oligopoly models do exist, and
these may suggest either higher prices or lower prices than what the
Cournot model would predict.
Under the circumstances of an industry structure with only two
or three firms, it is more reasonable to assume that prices may be
higher than the Cournot model would predict. This is so for two
reasons. First, software products are likely to be somewhat
differentiated, rather than homogenous, as the computer model
assumes. If products are differentiated, then consumers see the
products of different firms as being somewhat different from each
other, albeit also similar to each other. For example, Corel
WordPerfect and Microsoft Word have their differences, as well as
their similarities. Within a small range of prices, each software
product can act as a kind of "mini-monopolist" with
respect to its own product price.
Second, when there are only two or three firms, tacit collusion
which raises prices is easier to implement, and difficult to prove.
Moreover, unlawful conspiracies to raise prices are less easily
discovered. However, it is the general experience that oligopolies
with very few firms rarely collude by means of unlawful conspiracies
(which could net jail time), presumably because tacit collusion is
so much easier.
For both these reasons, it is substantially more likely that
oligopoly prices would be higher than what the simple Cournot model
would predict, than that the oligopoly prices would be lower. If we
assume that prices would be higher, this means that more firms can
survive in the industry. For example, if the Cournot model would
predict that only one firm can be profitable, it may be that two
firms can be profitable. If the Cournot model predicts only two
firms can survive, it may be that three firms can survive. And so
forth.
Hence, the Cournot model is probably a bit cautious in its
predictions about how many firms can actually compete and survive in
this industry. This is probably a good thing. One of the issues in
this case, at least implicitly, is whether or not Microsoft is a
"natural monopoly." If Microsoft is a natural monopoly,
someone might argue, then Microsoft caused little or no harm by
keeping out the competition, since the competitors could not have
survived anyway. The computerized model does not in any way lend
support to this type of argument. Hence, the Court should not be
reluctant to consider structural remedies which divide Microsoft
into two or more firms.
F. Equations For a Relative Profit Maximizing Firm
One of the options for a structural remedy is to change the
incentives of the business managers of the successor firms to
Microsoft when Microsoft is re-structured. The incentives of the
business managers can be altered by changing the method of
compensation for the officers of the business firm. A method of
incentives for preventing collusion is further explained in a paper
published in a refereed academic journal.
For purposes of this comment and the computer economic model,
attention is restricted to the simplest possible methods for
implementing this incentive system. More complex methods for
implementing the incentive system are certainly possible, and some
of these more complex implementations may even be better or more
effective than the simple implementation discussed here. In its
purest implementation, the incentive scheme sets up a zero-sum game
for two or more firms in an industry. In the zero-sum game, there is
no incentive for all firms in the industry to engage in any type of
collusion. The method even prevents tacit collusion, which may be
hard to detect, and difficult or impossible to prosecute. The method
accomplishes this amazing feat simply by changing the financial
incentives of business managers, not by passing strict new antitrust
laws with draconian penalties.
The method sets up a set of incentives called Relative Profit
Maximizing (RPM) incentives. Business firms whose managers are
motivated by these incentives may be called Relative Profit
Maximizing (RPM) firms. Each business manager is assumed to be
motivated by at least some desire to increase his wealth. In a well-
run business firm, managers are normally paid in a manner which
motivates them to increase their wealth by increasing the profits of
their firm. RPM incentives alter these common methods of financial
compensation by additionally motivating the manager to maximize the
firm's profits relative to competing firms' profits.
In its most general form, the goal of the RPM manager is to
maximize his profits relative to the profits of rival firm(s). It is
only be achieving this goal that the RPM manager can attain maximum
financial satisfaction, because that is how the manager is being
paid. In its simplest form, the goal functions for two rival RPM
farms look as follows:
Goal1=Profit1--z(Profit2)
Goal2=Profit2--z(Profit1)
When z=1.0 in the above two goal functions, we set up the
pure zero-sum game. In the zero-sum game there is no incentive to
collude. If instead, z = 0.0 in the above two goal functions, then
both firms are motivated by Absolute Profit Maximizing (APM)
incentives. APM incentives are simply the incentives we normally
expect to find in business firms. Absolute Profit Maximizing (APM)
firms simply try to maximize their own level of profits, regardless
of the level of other firms" profits. APM firms-which are the
most common type of business firm in a capitalist economy--do
have an incentive to collude, if an opportunity arises.
In simple terms in a two firm industry using RPM incentives, if
a manager increases his firm's annual profits by 10% which is
equivalent to $1 billion he only gets a bonus (or salary in the case
of absolute dependence on RPM) if the profits of the other firm in
the industry increase by less than 10%. In a two firm industry using
APM incentives, the manager would get a bonus for the extra $1
billion even if his firm's profits increased less than the other
firm's profits in terms of annual percentage gain.
The parameter z in the above goal functions can also take on
additional values. For example, if z is set less than zero, the two
firms would have Joint Profit Maximizing (JPM) incentives. JPM
incentives would likely create less vigorous competition between the
two business firms than would otherwise occur with APM incentives.
If z in the above goal functions is between 0.0 and 1.0, this
creates an impure system of relative profit maximizing incentives.
For example, if z=0.3, this creates a mixture of two
incentive schemes which might be described as "30% RPM plus
70% APM." An impure RPM incentive scheme partially reduces the
incentive for collusion, but does not completely eliminate the
incentive for collusion. An RPM firm, even one with an impure RPM
incentive, can normally be expected to compete more vigorously than
an APM firm. For this reason, the Court should consider using RPM
incentives as part of an overall structural remedy.
For purposes of illustration with the computerized economic
model, only values of z between -0.3 and 0.9 are used.
Generally, z is in the range of 0.0 to 0.9 in the model and no
preferred solution has z less than 0.0. The value of 1.0 (pure RPM)
is avoided, because with this simple illustrative model (with no
mechanism for avoiding losses), pure RPM would practically guarantee
that one or both firms will lose money. This is because if the
industry has little or no product differentiation, pure RPM causes
prices to be set to the average of marginal costs. If in addition,
software firms have high fixed costs, pure RPM practically
guarantees that at least one firm, and possibly both firms, will be
unable to recover their fixed costs of production. Pure RPM may
still be useful and beneficial, but only if additional mechanisms
are instituted to avoid this outcome.
The goal-maximizing outputs for the goal functions listed in
equations (6) and (7) are:
(d Goall / d Q1)
(d P / d Q1)Q1 + p--C1 + (d P / d Q1)Q2 = 0
bQ1 + p--C1 + bQ2 = 0 (8)
(d Goal2 / d Q2) =
(d P / d Q2)Q2 + p--C2 + (d P / d Q2)Q1 = 0
bQ2 + p--C2 + bQ1 = 0 (9)
G. Basics of Scenario Analysis
The purpose of a scenario analysis is to provide a projection of
a range of possible futures. The basic parameters of an economic
model are usually not known, although they can often be estimated
(through empirical or theoretical analysis). These estimates may be
arrived at with a greater or lesser degrees of confidence, accuracy,
and reliability. Additionally, even if the basic parameters of
[[Page 29169]]
an economic model were known with certainty, most economic models
allow for uncertainty in how those basic parameters will vary for
particular firms or individuals. For example, even if it were known
with certainty that the probability of bankruptcy for a particular
firm in a particular industry was exactly 3% a year, this would not
tell us whether that particular firm will be bankrupt in twenty
years.
In a well-done scenario analysis, one should vary the parameters
through a reasonable range of values, including both moderate values
and extreme values. In addition, the fate of individual firms (given
the assumed parameters for a particular scenario) is varied
according to the laws of probability governing that particular
scenario.
There are two basic ways of conducting a scenario analysis. One
way is to compute all the possibilities (appropriately weighted by
probabilities) for a limited number of parameters that are allowed
to vary through a small number of reasonable values for each
parameter, including both moderate and extreme values. The second
method is called a "Monte Carlo" study. The Monte Carlo
study allows a large number of parameters to be varied, randomly,
through a large set of possible values. The Monte Carlo study
necessarily uses random numbers, which are available in many
computer packages. The first type of study might or might not use
random numbers.
The computer model used for these comments employs the first
method of scenario analysis. Probabilities for every scenario are
exhaustively computed and assigned. No random numbers or random
number generators were used in the analysis.
The computer model computes probabilities and outcomes for two
distinct types of scenarios. One type is a static scenario. The
static scenario occurs at a particular period of time, within a
single transition period. These transition periods (for a change or
transition from one short run cost level to another as is discussed
further in section H below) are assumed to have a length of three,
five, or eight years.
The other type is a dynamic scenario, which is a path that links
two or more static scenarios occurring in two or more time periods.
For each set of initial conditions and basic parameters, the
computer starts with a single scenario in transition period zero.
The computer then calculates the probability that various additional
static scenarios will be reached in transition periods one through
ten. The probability that one static scenario will turn into another
static scenario depends on how similar or dissimilar are the two
scenarios. The computer calculates the outcomes for every static
scenario, and weights those outcomes by the probability that the
static scenario will occur in each of the eleven transition periods
(periods zero through ten).
H. Details of Static Scenarios
The static scenarios assume that firms differ only by level of
cost. The computerized economic model assumes that there are three
firms and five levels of short-run cost. These five levels of cost
are level one (lowest cost), level two, level three, level four, and
level five (highest cost). These five levels of cost are assumed,
over the long run, to have differing probabilities of occurrence. In
particular, the probability of cost level one (lowest cost, 10%
chance) is assumed be lower than the probability of cost level five
(highest cost, 30% chance). This reflects the plausible assumption
that it is easier to be a high-cost firm than a low-cost firm.
All possible combinations of the five cost levels for three
firms are computed. These possible combinations are organized into
35 static scenarios. Whenever a static scenario has the same cost
level for two or more firms, the costs of each firm are adjusted
slightly so that no two firms have the same level of cost. A list of
the cost levels associated with each static scenario is shown in
Attachment C. The weighted average of cost levels over all firms and
scenarios is 3.5.
The basic parameters for static scenarios are varied along two
dimensions. The first dimension is the cost spread for short- run
costs. The cost spread is defined as the ratio of cost level one to
cost level five. For example, if the lowest cost level is twice as
efficient as the highest cost level, then the cost spread is 50%.
Five different ratios for the cost spread were chosen for the
analyses. These cost spread ratios were 25%, 33%, 40%, 50%, and 67%.
The second dimension for variation is the portion of long-run
cost which is allocated to fixed cost. The portion of long-run cost
which is actually a fixed cost is open to some question or
interpretation. The mere fact that a software firm has spent $X
billion on software development does not mean that the whole
expenditure was necessary to develop the software in question. Five
different values for the fixed-cost portion of long-run costs were
computed. These percentages were 0%, 25%, 50%, 75%, and 100%. In all
cases, the remainder of the long-run cost was classified as a
variable cost.
Thus, twenty-five static variations on the basic parameters were
computed. For each of these variations, the computer programs
computed the prices, quantities, profits, and consumer surplus
outcomes for each of the thirty-five static scenarios. These static
numbers were applied to the probabilities computed for each static
scenario for each of the eleven transition periods. The computer
model uses the static figures and the associated probabilities for
each transition period to compute the expected profit and consumer
surplus outcomes for each transition period.
I. Details of Dynamic Transitions
The basic parameters for determining the probabilities of
transition effectively vary along only one dimension: The speed with
which transitions occur from one cost level to another. This speed
variable is implemented in two different ways.
The first method is relatively straightforward. The length of
time for the transition periods is allowed to vary. A three-year
length for the transition period implies a fast transition speed. A
five-year length implies moderate transition speed, and an eight-
year length implies a slow transition speed.
The second method influences the speed of transition by
determining the extent by which one static scenario may change into
another static scenario, from one transition period to the next
transition period. For all transition speeds, the model assumes that
one static scenario is more likely to change to another static
scenario, the more similar are the two scenarios. The measure of
similarity or dissimilarity between two scenarios is determined by
how similar or dissimilar the short-run costs are for each firm in
the industry.
In the slow speed for transition, the second method presumes
that a firm's short-run cost cannot change more than one level at a
time. For example, a firm whose cost level is four, can change to
cost levels five or three, and it can stay at cost level four, but
it cannot move to cost levels one or two in only one period of
transition. In the slow transition, the firm is more likely to stay
at the same cost level, from one transition period to the next, than
to move to the cost level above or below.
In the moderate speed for transition, the second method presumes
that a firm's short-run cost cannot change more than two levels at a
time. For example, a firm whose cost level is four, can change to
cost levels two, three, or five, and it can stay at cost level four,
but it cannot move to cost level one in only one period of
transition. In the moderate speed transition, the firm is more
likely to move only one cost level, rather than two cost levels,
from one transition period to the next.
In the fast speed for transition, the second method presumes
that a firm's short-run cost can change as many as four levels at a
time. For example, a firm whose cost level is one, can change to
cost levels two, three, four, or five, and it can also stay at cost
level one. In the fast transition, a firm is more likely to move
only one cost level than two cost levels, more likely to move two
levels than three levels, and more likely to move three levels than
four levels, from one transition period to the next.
The computer model also causes the exit of firms from the
industry when their short-run costs become too high. If a firm's
short-run costs reach the adjusted cost level of five or greater,
the firm is presumed to exit the industry. This is because an
experienced firm which cannot keep its costs down (or quality up)
has no competitive advantage over potential competitors, and has
presumably lost its ability to compete profitably. The model
presumes that the exiting firm is replaced by a new firm which is
equally high cost. The new firm then has the opportunity to reduce
its cost in future transition periods. Hence, all new entrants to
the industry are presumed to enter with high short-run costs.
The computer model starts transition period zero, either with
Microsoft as a monopoly, or with Microsoft divided into two or three
firms. If Microsoft starts as a monopoly, Microsoft is presumed to
start at cost level three. Cost level three is midway between cost
level one (lowest cost) and cost level five (highest cost). Cost
level three is slightly more efficient than the long- term average
cost level of three and a half. Although some may argue that
Microsoft acquired its monopoly because it was so much more
efficient than its competitors,
[[Page 29170]]
that monopoly acquisition happened at least ten years ago and was
probably due to the arguably per processor licensing which was the
subject of a prior consent judgment (attached as Exhibit 2 to this
comment letter). There is no reason to suppose, today, that
Microsoft has anything other than about average efficiency for an
incumbent firm.
If Microsoft is split into two or three firms, we may suppose
that there could be some cost-efficiency losses due to initial
disorganization. To see this possibility in extremis, suppose that
the Court ordered Microsoft divided into ten competing firms. We
might consider ourselves lucky if three of the ten firms were
equally efficient as Microsoft is today. However, we should not
exaggerate the likely cost-inefficiency impacts of dividing a very
large company into two or three very large companies. If Microsoft
is split into two firms, the model assumes that one of the Microsoft
successor firms starts at cost level three, while the other starts
at cost level four. If Microsoft is split into three firms, the
model assumes that one of the Microsoft successor firms starts at
cost level three, while the other two successor firms start at cost
level four.
The computerized economic model also treats the initial period
(period zero) differently from the subsequent transition periods. In
the initial period, potential competitors do not produce; only
Microsoft or Microsoft's successors produce. In subsequent periods,
both Microsoft and competitors can produce. This is because, at
least initially, major competitors do not exist, because their entry
has been blocked by anti-competitive acts. However, under the
presumption that an effective conduct or structural remedy creates
the opportunity for entry, competitors can produce in subsequent
transition periods.
J. Construction and Computation of Remedy Alternatives
The computerized economic model developed for these comments is
best suited for analyzing structural remedies. Nevertheless, the
model can be applied to analyze conduct remedies, albeit with some
caveats.
The model computes several alternative basic outcomes for the
industry. The first basic alternative is "no remedy". If
there is no remedy, it is assumed that Microsoft is a monopoly in
all years from 1995 through 2025.
The second basic alternative is a 100% effective conduct remedy,
starting in 2002. To calculate the results in terms of CS, TS, and
the profits of Microsoft and its competitors in the case of a 100%
effective conduct remedy, the model assumes all barriers to entry
are removed and there is no anti-competitive conduct in the market.
Under the assumption that there are no barriers to entry into the
market, Microsoft starts as a monopoly in 2002, but is subject to
entry from competitors thereafter. The choice of an early date for a
conduct remedy is due to the timing of the negotiated conduct
remedy, or alternatively the timing of the conduct remedy offered by
the Litigating States. Hence, either conduct remedy can go into
effect almost immediately.
In practice, no conduct remedy is likely to be 100% effective.
The Litigating States" strong conduct remedy may be perhaps
60% to 80% effective as a conduct remedy. The DOJ's weak conduct
remedy may be about 20% effective. If we optimistically assume that
the DOJ has hidden all the convincing and persuasive evidence which
should have been in the Competitive Impact Statement, the DOJ might
someday provide evidence to the public and the Court that the
negotiated agreement with Microsoft may be 40% effective.
The model does not specifically compute the effects which any
particular provision of a conduct remedy may have on future
competition. Rather, it is up to the Court or the analyst to
subjectively assess the overall effectiveness of a particular
proposed conduct remedy, and to judge it accordingly. The computer
model simply combines the two basic alternatives, "no
remedy" and "100% effective conduct remedy" to
compute estimated outcomes for conduct remedies with only partial
effectiveness. For example, to compute a "60% effective
conduct remedy" the program computes a weighted average of the
two basic remedies, with a 60% weight on "100% effective
conduct remedy" and a 40% weight on "no remedy."
The outcomes in the case of other partially effective remedies
are calculated in a similar manner.
The third set of basic alternatives is a structural remedy in
which Microsoft is divided into two or three competing firms. If we
accept the DOJ's pessimistic appraisal, no structural remedy can
reasonably go into effect before 2005. More optimistically, if the
Court follows the road maps laid out by the Appeals Court and the
Supreme Court, there is at least a 50% chance that a structural
remedy could take effect in 2003, without such remedy being
overturned or stayed.
In any case, the computer model pessimistically assumes that a
structural remedy is not available before 2005. This time delay
somewhat disadvantages the structural remedy, but the structural
remedy is sufficiently superior to the conduct remedy, that it is
not much of a disadvantage. Without the time delay, a structural
remedy would always be superior to a conduct remedy.
The model computes several variations on a structural remedy.
The first main variations are the division of Microsoft into two or
three absolute profit maximizing (APM) firms. An APM firm is simply
the conventional profit-maximizing firm that we see everyday in the
business world. This type of division of Microsoft into two or more
firms has been advocated by several economists, including four
economists who filed an amicus brief before this Court.
The second main variations are the use of relative profit
maximizing (RPM) incentives after Microsoft is split up into two
firms. A primary advantage of the RPM incentives is that competition
can be maintained even if there are only two RPM firms in the
industry. RPM incentives can be applied to two firms, three firms,
or even more firms, but this computer model only applies RPM
incentives to two Microsoft successor firms. The RPM incentives are
assumed to be An effect so long as both Microsoft successor firms
are still in the industry. If either RPM firm exits the industry,
the goal function of the remaining Microsoft successor firm returns
to the usual APM incentives.
The computer model also prints out estimates for the two-
monopolies remedy previously proposed by the Plaintiffs in this
case. If Plaintiffs" remedy worked as planned, it would be
akin to a conduct remedy with enhanced effectiveness. In addition to
removing the applications barrier to entry, the proposal would
possibly introduce some measure of extra competition, because the
two monopolists might decide to compete with each other. The
computer model does not specifically analyze this remedy, but simply
estimates its value as being a third of the distance between a
"100% effective conduct remedy" and a 2-firm APM
structural remedy. This is calculated as a weighted average of these
two basic remedies, with a 2/3 weight on the "100% effective
conduct remedy" and a 1/3 weight on the 2-firm APM structural
remedy.
Finally, the model computes what might have happened along a
"Lawful Path." The lawful path assumes that Microsoft
starts as a lawful monopoly in the year 1995, and commits no
antitrust violations at any time. Although some private lawsuits
allege antitrust violations which occurred before 1995, this case
does not concern those allegations. This case concerns anti-
competitive acts committed by Microsoft in the browser wars, which
did not start until 1995. To simulate the lawful path, Microsoft
starts as a monopoly in 1995, but is subject to potential
competition in 1996 and later years.
The purpose of calculating the "Lawful Path" is to
serve as an equity standard for evaluating alternative remedies. The
Lawful Path tells us what Microsoft likely would have earned, if
Microsoft committed no violations. To the extent that Microsoft's
profits exceed those lawful earnings, we may refer to those excess
earnings as the fruits of its unlawful actions. Likewise, to the
extent that consumer surplus exceeds (or falls short) of what would
occur along the Lawful Path, this is the extent to which consumers
benefit (or remain harmed) as a result of a particular remedy. K.
Weighting of Alternative Scenario Parameters
The computerized economic model computes and weights 225 sets of
scenarios, which differ by the basic parameters assumed for each
scenario. These differ along four dimensions. Not all scenarios are
equally likely. Hence, in the reporting of results, they are
weighted by their likelihood of occurring. Attachment D shows the
four basic parameters, the sixteen parameter values, the point
values of their weighting, and their implied probability of
occurring.
The first dimension of parameter variation is the cost-spread
for short-run cost. Five different ratios for the cost spread were
used: 25%, 33%, 40%, 50%, and 67%. In Attachment D these are labeled
"Cost-Spread Ratio."
Studies of production efficiency between firms suggest that some
firms can be only half as efficient as other firms. So that cost-
spread ratios of 50% and 67% are certainly within the realm of
plausibility. In addition, the
[[Page 29171]]
short-run cost variable is doing double duty as a stand-in for
possible differences in software quality between firms. If we assume
similar ratios for differences in quality, then a 25% cost spread is
certainly possible, though less likely. Such a cost spread implies
that the inefficient firm has both double the costs and half the
quality; it is an unlucky combination of extremes that is therefore
less likely. Hence, I weight the 25% and 33% cost-spread ratios with
a point value of 1, and weight the 40%, 50%, and 67% ratios with a
point value of 2.
The second dimension of parameter variation is the portion of
long-run cost which is allocated to fixed cost. Five different
percentages for the fixed-cost portion were used: 0%, 25%, 50%, 75%,
and 100%. In Attachment D these are labeled "Fixed-Cost
Portion of Long-Run Cost." At this point, there is no
particular reason to suppose that one allocation of the fixed-cost
portion is better than another. Hence, I assume a uniform
distribution over the interval, 0% to 100%. This implies assigning
point values of 1 to the two extremes (0% and 100%) and a point
value of 2 to the in-between values (25%, 50%, and 75%).
The third and fourth dimensions for parameter variation are the
speed of transition and the length of transition periods. In
Attachment D "Transition Speed" takes on values of 1.5
(slow), 2.5 (moderate), and 4.5 (fast). In Attachment D, the length
of transition periods is given by "Transition Length" of
3 years (short), 5 years (moderate), or 8 years (long). Extremes may
either amplify each other (e.g., slow and long) or offset each other
(e.g., slow, but short). Hence, even if we do not weight these
values further, moderate combinations are more likely than genuinely
extreme combinations. Hence, all transition speeds and transition
length receive the same point value of 1.
Finally, for each of the 225 combinations of parameters, the
points assigned to each parameter value are multiplied together.
This yields a total of 576 points. Based on these point values, the
computer model assigns each combination of parameter values an
assumed probability of occurrence. These probabilities are used to
weight the outcomes of the various calculations when reporting the
final results, which we come to shortly.
L. Method of Computing Remedy Alternatives
For each remedy alternative, dollar values for costs, revenue,
profits, and consumer surplus are calculated by the model in real
dollars for each of the years, 1995-2025. These dollar values
are calculated in real terms, in dollars of constant purchasing
power, as of the year 2001.
It is generally standard practice to assume that money has at
least some time value. That is, a dollar now is preferable to a
dollar ten years from now, even if both dollars otherwise have the
same purchasing power. One reason people prefer the dollar now is
that money can be invested and earn interest. Another reason is that
people are impatient.
In regulatory analysis of U.S. government regulations (e.g.,
under Executive Order 12886), it is standard practice to use a 7%
real discount rate. This discount rate is somewhat akin to an
interest rate. This means that future dollars will be discounted
compared with present dollars, while past dollars will accumulate
interest compared to present dollars.
Attachment E provides an example of how the 7% real discount
rate can be applied to Microsoft's real monopoly revenues. In
Attachment E it can be seen that Microsoft's revenues for its
Windows monopoly were rather small, compared to what they will be if
Microsoft operating systems continue to be a rapidly growing
monopoly. In 1995 Microsoft's revenues for its Windows monopoly were
only $3.0 billion in 2001 dollars. In 2002 they were estimated at
$9.1 billion. In 2025 they are projected to be $34.1 billion in 2001
dollars.
When we apply the 7% discount factor, the picture changes
somewhat. Revenues for 1995 "earn interest" of 50% when
brought to 2001, while revenues from 2025 are discounted 80.3% from
the value of equivalent purchasing power in of 2001. Discounted
revenues for 1995 become larger ($4.5 billion) while discounted
revenues for 2025 become smaller ($6.7 billion). The projected
undiscounted revenues always grow, but the discounted revenues are
projected to reach a peak in 2008, with $17.1 billion in
undiscounted revenues and $10.65 billion in discounted revenues.
This illustrates an important cause of one of the more
interesting results which emerge from the economic analysis: Because
Microsoft's monopoly revenues are growing rapidly, we may anticipate
worse damage to consumers in the future than what has already
occurred in the past. Attachment F provides some comparisons for the
Windows operating system monopoly which illustrate this result.
In Attachment F, the values for consumer surplus,
competitors" profits, Microsoft's profits, and for the sum of
these, total surplus, are provided for the past (1995-2001),
the future (2002- 2025), and in total (1995-2025). The top
half of the Attachment shows the aggregated values of these
quantities. The bottom half shows how these quantities compare with
the same quantities along the Lawful Path. All quantities from the
past earned interest at 7% per year, while all quantities from the
future are discounted at the rate of 7% per year back to 2001
dollars.
Looking at the top half of Attachment F, we see both past and
future values for "No Remedy," a "100% Effective
Conduct Remedy," and a "3-firm APM Structural
Remedy." In all cases, the future values for consumer surplus,
Microsoft profits, and Total Surplus are substantially larger in the
future, than in the past. In all these cases, the future values are
more than double the size of the past values, even though the future
is discounted and the past is inflated.
In the middle of Attachment F, we see the aggregated values for
Lawful Path. Again all the future values are at least double the
past values. If Microsoft had always pursued the Lawful Path, its
profits would be lower, both in the past and in the future. Even on
the Lawful Path, Microsoft's future profits are more than double its
lawful past profits. Again, this is true even though past profits
are inflated and future profits are discounted.
In the bottom half of Attachment F, the various aggregates in
the top half of the Attachment are compared with the Lawful Path. If
we compare "No Remedy" with the Lawful Path, we see very
interesting differences between past and future. These differences
are on the order of 10 to 1. Consumers in the past lost $4.1 billion
in consumer surplus, but are scheduled to lose $35.0 billion in the
future. Competitors lost $2.6 billion profit in the past, but are
scheduled to lose $31.5 billion profit in the future.
Microsoft, by contrast, does extremely well. Microsoft gained
$6.7 in unlawful extra profit in the past, but is scheduled to
receive $60.4 billion in unlawful extra profit in the future. These
numbers should give the Department of Justice and the Court some
pause before adopting any settlement which effectively endorses
continued extraction of profits from consumers due to anti-
competitive conduct by Microsoft.
We may compare these numbers with what may happen under two
alternative remedies. In the past (which no remedy can change),
consumers lost $4.1 billion. In the future, they will lose an
additional $4.7 billion under a 100% effective conduct remedy, but
only an additional $0.3 billion under a 3-firm structural split-up
of Microsoft Corporation.
Under a 100% effective conduct remedy, competitors in the future
will still lose $6.7 billion while Microsoft gains $9.1 billion,
relative to the Lawful Path. By contrast, under the 3-firm
structural remedy, competitors lose $26.4 billion in the future,
while Microsoft gains $26.5 billion in the future, relative to the
lawful path. In other words, competitors benefit more from a 100%
effective conduct remedy, while both consumers and Microsoft gain
more from a structural remedy. This is an amazing result, which has
some startling implications for how best to resolve this case.
This result does not appear to be an artifact of making peculiar
assumptions in the economic model. The result is most likely due to
the limited space available in the market for more than two or three
firms. If Microsoft remains intact, competitors have room to enter
the market and earn profits. However, if Microsoft is split into two
or three firms, there is less room in the market for competitors to
enter. Accordingly, under a structural remedy, the Microsoft
successor firms all presumably initially owned by current Microsoft
shareholders earn much of the profits which competitors might
otherwise be able to take away.
This does not mean, as a practical matter, that competitors are
necessarily better off with a conduct remedy than with a structural
remedy. In actual practice, a pure conduct remedy cannot be 100%
effective. A weak conduct remedy might be worse for competitors,
while a strong conduct remedy may be better for competitors, as
compared with a structural remedy. Likewise, Microsoft is not
necessarily worse off with a conduct remedy than with a structural
remedy. In comparison with a structural remedy, Microsoft may fare
better with a weak conduct remedy than with a with a strong conduct
remedy
M. Analysis of Computed Remedy Alternatives
[[Page 29172]]
Attachments G, H, I, and J provide a summary of the computations
for several remedy alternatives. These summaries provide estimates
of consumer surplus, profits for both Microsoft and its competitors,
and total surplus. Total surplus is simply the sum of consumer
surplus and the profits of all firms in the industry. These figures
are aggregated for all the years, 1995- 2025. They are expressed in
real dollars, as of 2001. They are also appropriately discounted to
the year 2001 at the standard 7% real discount rate which is
commonly used in the analysis of United States government
regulations.
The first page of each of these Attachments provides the total
values for each of the quantities, Consumer Surplus,
Competitors" Profits, Microsoft's Profits, and Total Surplus.
These figures are computed and summarized for each of the
alternative circumstances. These circumstances are "No
Remedy," conduct remedies with various levels of
effectiveness, thirteen structural remedies which split Microsoft
into two or more firms, and the "Lawful Path" in which
Microsoft never disobeyed the antitrust laws.
The second page of each of these attachments compares each of
the alternative circumstances with the Lawful Path. These numbers
are calculated by subtracting the total quantities under the Lawful
Path from the total quantities available under each alternative
circumstance.
For example, in Attachment G Consumer Surplus under the Lawful
Path is $105.9 billion, but under "No Remedy" the
Consumer Surplus is only $66.7 billion. On the second page of the
Attachment these two numbers are subtracted, so that we can see that
consumers were/will be deprived of $39.2 billion in consumer value,
if there is no remedy. Likewise, Microsoft has obtained/will obtain
$108.5 billion under "No Remedy", but would have
obtained only $41.3 billion under Lawful Path. The difference of
$67.2 billion in profit is shown on the second page of the
Attachment. This figure is representative of the unjust gain (the
fruits of Microsoft's unlawful conduct) that Microsoft has obtained
or will obtain if there is no remedy.
Attachments G and I calculate the remedy alternatives under the
assumption that the only monopoly of concern is the Operating System
("Desktop Platforms") monopoly. Attachments H and J
calculate the remedy alternatives under the assumption that all of
Microsoft's monopolies ("Platforms" +
"Applications" + "Enterprise Software")
are of concern. The figures in Attachments H and J are approximately
three times as large as the figures in Attachments G and I.
Clearly, "No Remedy" is not an option for this
Court. These attachments also provide bottom line information on
various conduct and structural remedies which the Court is entitled
to consider. The first eight remedies are conventional remedies of a
conduct or structural variety. In all four attachments, it may be
seen that "APM, 3-firms" is the best of the conventional
(non-RPM) remedies in the sense that best means maximum CS or TS.
The "APM, 3-firms" remedy is simply a split-up of
Microsoft Corporation into three competing successor companies, of
the ordinary absolute profit maximizing (APM) variety.
The three-firm split-up is similar to what other economists have
advocated.
We may confirm this conclusion by reading the first nine entries
in the columns for "Consumer Surplus" and in the columns
for "Total Surplus," on either the first or second page
of each attachment. Of the first nine entries, the 3-firm APM remedy
always has the largest consumer surplus, and also has the largest
total surplus. It may also be noted that this 3-firm remedy restores
most, but not all, of the consumer surplus and total surplus that
would otherwise be wrongfully taken by Microsoft.
This may be seen by the negative numbers for this remedy on the
second page of each attachment.
Also of note for the 3-firm structural remedy is that Microsoft
profits considerably from its unlawful acts, relative to the Lawful
Path. This may be seen from the large positive numbers for
Microsoft's Profits for this remedy on the second page of each
attachment. For Attachments G and I, Microsoft achieves an unlawful
gain of $33.2 billion, even with the 3-firm split up. For
Attachments H and J, Microsoft achieves an unlawful gain of $96.2
billion. Most of these remaining unlawful profits come from the
pockets of competitors and would-be competitors (many of whom are
not identifiable) who were excluded or deterred from competition by
Microsoft's anti-competitive acts.
The consideration of structural remedies involving relative
profit maximizing (RPM) incentives is as follows. In all cases, the
RPM remedy is applied to only two Microsoft successor farms, after
Microsoft is split into two competitors. These are shown in the
attachments as "RPM, z=0.000" through "RPM,
z=0.900". "z" is the value of the parameter z in
the RPM firm's goal function. "z" tells us the extent to
which a firm's business managers are financially motivated to
maximize the relative profits of their business firm, rather than
absolute profits. If z=0.0, there is no RPM incentive. If z=1.0,
managers are solely motivated to maximize relative profits. For
purposes of these comments, only the outcomes for values of z
generally between 0.0 and 0.9 are illustrated. However, in the
scenarios shown on Attachments I and J which allow a change in z
(referred to as zbump=0.3) some percentage of all scenarios listed
as having z values from 0.0 to 0.2 will have a z value of less than
0.0.
Attachments G and H assume that the value of z remains fixed,
and that it does not respond to changing circumstances. In both
attachments, consumer surplus is maximized when z=0.4 and total
surplus is maximized when z=0.5. In Attachment G, the RPM solution
can improve consumer surplus by $2.9 billion, and can improve total
surplus by $4.6 billion over the 3-firm split up, which is the best
conventional remedy. In Attachment H, the RPM solution can improve
consumer surplus by $8.6 billion, and can improve total surplus by
$13.5 billion over the 3-firm split up.
Attachments I and J assume that the value of z is more flexible,
and can change in response to changing circumstances.
The circumstance to which z is allowed to respond is the
circumstance where one (or both) RPM firms are experiencing losses.
These losses, of course, should not simply be short-term or even
annual losses, but losses that are more chronic or long-term. In
these computer runs, z is allowed to vary through a small range of
values. In these attachments, z was allowed to range from the
indicated value of z down to the smaller value of z which is 0.3
lower.
In Attachments I and J, consumer surplus is maximized when
z=0.6, but this line includes some scenarios which can range down to
z=0.3 due to the effect of a change in z as large as 0.3 (i.e.,
zbump = 0.3). Total surplus is maximized when z=0.8, but can range
down to z=0.5 in the same manner due to a change in z as large as
0.3. In Attachment I, the RPM solution can improve consumer surplus
by $9.3 billion, and can improve total surplus by $5.2 billion over
the 3-firm split up, which is the best conventional remedy. In
Attachment J, the RPM solution can improve consumer surplus by $27.2
billion, and can improve total surplus by $15.2 billion over the 3-
firm split up.
In each of the Attachments, the 2-firm RPM remedy also reduces
Microsoft's unlawfully acquired profits by a few billion dollars,
relative to what Microsoft would obtain from the conventional 3-
firm APM remedy. Hence, in all respects, whether measured in terms
of increasing consumer surplus, increasing total surplus, or in the
diminution of Microsoft's unjust fruits of its unlawful conduct, the
RPM incentive system is capable of doing better than the best of the
conventional economic remedies (APM).
N. Equity Analysis in Light of the Economic Analysis
The primary objectives of the antitrust laws, expressed in
economic terms, is either to maximize consumer surplus or to
maximize total surplus (or perhaps both, though it may not be
possible to maximize both simultaneously). The Court should select a
remedy according to whichever objective best fits the equity
requirements of the antitrust law. According to the economic
analysis just provided, a structural remedy combined with an RPM
incentive, is better than any conventional structural or conduct
remedy. Among the conventional remedies, the 3-firm split-up is
better than any conceivable conduct remedy, including even a 100%
effective conduct remedy. And, of course, among the conduct
remedies, a strong conduct remedy (such as the Litigating States
have proposed)is better than the weak conduct remedy which the DOJ
has proposed.
A secondary objective is to assure that Microsoft does not gain
extra profit in the future as a result of the future effect of its
past (and continuing) unlawful behavior.
The computerized economic model (whose source code is attached
as Attachments K-S) only models the price effects of Microsoft's
anti-competitive acts. An additional harm caused by Microsoft in
this case includes losses of innovation in the software industry.
Due to the failure of the United States to address this issue
analytically in the CIS resource constraints precluded modeling
these additional losses in consumer surplus and total surplus. It is
possible that the dollar value of this damage to the consuming
public (in the form of innovation which did not
[[Page 29173]]
occur) caused by Microsoft's unlawful conduct exceeds the unlawful
profits calculated by the model. Thus, it is unlikely that consumers
and the public will ever regain that to which they are entitled as a
matter of equity.
Attachment A-2.--Microsoft Corporation, Annual Revenue by Business Division, Real 2001 dollars
[In billions] Platforms,
----------------------------------------------------------------------------------------------------------------
Platforms,
Desktop Platforms Platforms Applications
Calendar Year Platforms & & &
Enterprise Applications Enterprise
----------------------------------------------------------------------------------------------------------------
1995...................................................... 3.003532 4.207892 6.855180 8.059541
1996...................................................... 3.727131 5.347350 8.460443 10.080662
1997...................................................... 5.035883 7.458570 11.217205 13.639892
1998...................................................... 6.454595 9.391382 14.204543 17.141330
1999...................................................... 7.693463 12.210871 17.149630 21.667038
2000...................................................... 8.186612 13.192271 17.729841 22.735500
2001...................................................... 7.204304 11.348110 16.786433 20.930239
2002...................................................... 9.142475 14.955194 19.792872 25.605591
2003...................................................... 10.588836 17.711490 22.821122 29.943776
2004...................................................... 12.001410 20.453823 25.771053 34.223466
2005...................................................... 13.364562 23.136215 28.613009 38.384662
2006...................................................... 14.670118 25.728773 31.332338 42.390993
2007...................................................... 15.915669 28.215390 33.925832 46.225553
2008...................................................... 17.102945 30.590792 36.398387 49.886235
2009...................................................... 18.236419 32.857597 38.760186 53.381363
2010...................................................... 19.322209 35.023736 41.024499 56.726025
2011...................................................... 20.367255 37.100384 43.206070 59.939200
2012...................................................... 21.378745 39.100399 45.319994 63.041648
2013...................................................... 22.363742 41.037214 47.380985 66.054457
2014...................................................... 23.328943 42.924094 49.402933 68.998085
2015...................................................... 24.280557 44.773678 51.398672 71.891793
2016...................................................... 25.224251 46.597717 53.379885 74.753351
2017...................................................... 26.165138 48.406960 55.357103 77.598925
2018...................................................... 27.107806 50.211128 57.339763 80.443086
2019...................................................... 28.056353 52.018953 59.336296 83.298896
2020...................................................... 29.014438 53.838247 61.354226 86.178035
2021...................................................... 29.985331 55.675990 63.400283 89.090942
2022...................................................... 30.971962 57.538426 65.480504 92.046967
2023...................................................... 31.976974 59.431156 67.600333 95.054514
2024...................................................... 33.002757 61.359227 69.764708 98.121178
2025...................................................... 34.051497 63.327217 71.978146 101.253866
----------------------------------------------------------------------------------------------------------------
Source: Computed from spreadsheet data provided on Microsoft's Investor Relations website (downloaded December
5, 2001 from http://www.microsoft.com/msft/history.htm) and CPI indices from the BLS website (Downloaded
December 5, 2001 from http://stats.bls.gov/cpi/home.htm).
Attachment B.--Microsoft Corporation, Profit & Loss Items, As a Percent of Revenue, Ten-Year Average of
Percentages (Microsoft Fiscal Years 1992-2001) & Classification of Expense Items Into Short-Run and
Long-Run Cost
[FY 1992-2001 ten-year average]
----------------------------------------------------------------------------------------------------------------
As a
Profit & Loss Item Percent of Categorized as
Revenue
----------------------------------------------------------------------------------------------------------------
Revenue....................................... 100.00%
Operating expenses:
Cost of revenue........................... 18.51% Short-Run Cost
Research and development.................. 14.73 Long-Run Cost
In-process R&D........................ 0.19 Long-Run Cost
Sales and marketing....................... 22.14 Short-Run Cost
General and administrative................ 3.63 Long-Run Cost
Other expenses................................ 0.36 Short-Run Cost
Total operating expenses.................. 59.59
Total Short-Run Cost.................. 41.01%
Total Long-Run Cost................... 18.55%
Operating income.............................. 40.41%
Losses on equity investees and other.......... -0.55
Investment income............................. 6.04
Noncontinuing items........................... -0.27
Income before income taxes.................... 45.97
Provision for income taxes.................... 15.67
Net income.................................... 30.29
----------------------------------------------------------------------------------------------------------------
Source: Computed from spreadsheet data provided on Microsoft's Investor Relations website (downloaded December
5, 2001 from http://www.microsoft.com/msft/history.htm).
[[Page 29174]]
Attachment C.--Adjusted and Unadjusted Cost Levels For Firms in 35 Static Scenarios And Long-Run
Probability of Scenario
----------------------------------------------------------------------------------------------------------------
Unadjusted Adjusted Cost Level
Long-Run Cost -------------------------------
Static Scenario Propability Levels Firm 1 Firm 2
Firm Firm 1 Firm 2 Firm 3
----------------------------------------------------------------------------------------------------------------
1............................. 2.7000% 5 5 5 4.7500 5.0000 5.2500
2............................. 6.7500% 4 5 5 4.0000 4.8333 5.1667
3............................. 5.6250% 4 4 5 3.8333 4.1667 5.0000
4............................. 1.5625% 4 4 4 3.7500 4.0000 4.2500
5............................. 5.4000% 3 5 5 3.0000 4.8333 5.1667
6............................. 9.0000% 3 4 5 3.0000 4.0000 5.0000
7............................. 3.7500% 3 4 4 3.0000 3.8333 4.1667
8............................. 3,6000% 3 3 5 2.8333 3.1667 5.0000
9............................. 3.0000% 3 3 4 2.8333 3.1667 4.0000
10............................ 0.8000% 3 3 3 2.7500 3.0000 3.2500
11............................ 4.0500% 2 5 5 2.0000 4.8333 5.1667
12............................ 6.7500% 2 4 5 2.0000 4.0000 5.0000
13............................ 2.8125% 2 4 4 2.0000 3.8333 4.1667
14............................ 5,4000% 2 3 5 2.0000 3.0000 5.0000
15............................ 4.5000% 2 3 4 2.0000 3.0000 4.0000
16............................ 1.8000% 2 3 3 2.0000 2.8333 3.1667
17............................ 2.0250% 2 2 5 1.8333 2.1667 5.0000
18............................ 1.6875% 2 2 4 1.8333 2.1667 4.0000
19............................ 1.3500% 2 2 3 1.8333 2.1667 3.0000
20............................ 0,3375% 2 2 2 1.7500 2.0000 2.2500
21............................ 2,7000% 1 5 5 1.0000 4.8333 5.1667
22............................ 4,5000% 1 4 5 1.0000 4.0000 5.0000
23............................ 1,8750% 1 4 4 1.0000 3.8333 4.1667
24............................ 3,6000% 1 3 5 1,0000 3.0000 5.0000
25............................ 3,0000% 1 3 4 1.0000 3.0000 4.0000
26............................ 1,2000% 1 3 3 1.0000 2.8333 3.1667
27............................ 2.7000% 1 2 5 1.0000 2.0000 5.0000
28............................ 2.2500% 1 2 4 1.0000 2.0000 4.0000
29............................ 1,8000% 1 2 3 1.0000 2.0000 3.0000
30............................ 0.6750% 1 2 2 1.0000 1.8333 2.1667
31............................ 0,9000% 1 1 5 0.8333 1.1667 5.0000
32............................ 0.7500% 1 1 4 0.8333 1.1667 4.0000
33............................ 0.6000% 1 1 3 0.8333 1.1667 3.0000
34............................ 0.4500% 1 1 2 0.8333 1.1667 2.0000
35............................ 0.1000% 1 1 1 0.7500 1.0000 1.2500
----------------------------------------------------------------------------------------------------------------
Source: Adapted from file "CostList.txt" generated by the computer program
"MS1File.bas".
Attachment D.--Point Values and Equivalent Probabilities for the
Weighting of Alternative Basic Parameters for the Scenario Analyses.
------------------------------------------------------------------------
Point Equivalent
Values Probability
------------------------------------------------------------------------
Cost-Spread Ratio (Low Cost/High Cost):
25.00%.................................... 1 12.5%
33.33%........................................ 1 12.5%
40.00%........................................ 2 25.0%
50.00%........................................ 2 25.0%
66.67%.................................... 2 25.0%
Fixed-Cost Portion Point Equivalent Of Long-
Run Cost:
0.00%..................................... 1 12.5%
25.00%.................................... 2 25.0%
50.00%.................................... 2 25.0%
75.00%.................................... 2 25.0%
100.00%................................... 1 12.5%
Transition Speed (Allowed Cost Level Jumps):
1.5....................................... 1 33.3%
2.5....................................... 1 33.3%
4.5....................................... 1 33.3%
Transition Length (Number of Years):
3......................................... 1 33.3%
5......................................... 1 33.3%
8......................................... 1 33.3%
------------------------------------------------------------------------
[[Page 29175]]
Attachment E.--Microsoft's Real Monopoly Revenues by Year
Discounted at 7% Rate per Year, Real 2001 dollars
[In billions]
------------------------------------------------------------------------
Undiscounted Discount Discounted
Year Revenues Factor Revenue
------------------------------------------------------------------------
1995............................ 3.003532 1.500731 4.507492
1996............................ 3.727131 1.402552 5.227496
1997............................ 5.035883 1.310796 6.601017
1998............................ 6.454595 1.225043 7.907158
1999............................ 7.693463 1.144900 8.808247
2000............................ 8.186612 1.070000 8.759675
2001............................ 7.204304 1.000000 7.204304
2002............................ 9.142475 0.934579 8.544368
2003............................ 10.588836 0.873439 9.248699
2004............................ 12.001410 0.816298 9.796724
2005............................ 13.364562 0.762895 10.195759
2006............................ 14.670118 0.712986 10.459589
2007............................ 15.915669 0.666342 10.605279
2008............................ 17.102945 0.622750 10.650851
2009............................ 18.236419 0.582009 10.613758
2010............................ 19.322209 0.543934 10.509997
2011............................ 20.367255 0.508349 1 0.353674
2012............................ 21.378745 0.475093 10.156882
2013............................ 22.363742 0.444012 9.929763
2014............................ 23.328943 0.414964 9.680676
2015............................ 24.280557 0.387817 9.416412
2016............................ 25.224251 0.362446 9.142423
2017............................ 26.165138 0.338734 8.863031
2018............................ 27.107806 0.316574 8.581630
2019............................ 28.056353 0.295864 8.300855
2020............................ 29.014438 0.276508 8.022726
2021............................ 29.985331 0.258419 7.748772
2022............................ 30.971962 0.241513 7.480127
2023............................ 31.976974 0.225713 7.217616
2024............................ 33.002757 0.210947 6.961821
2025............................ 34.051497 0.197146 6.713130
------------------------------------------------------------------------
Source: Adapted from the "Rev--Disc.txt" file generated
by the "MS6Summ.bas" program using RevStream=1
(Microsoft's Platform-only revenues) and the data in Attachment A.
Attachment F.--Consumer Surplus & Profits For Past (1995-2001) & Future (2002-2025)
Time Intervals, Comparisons for Selected Remedies and Lawful Path
----------------------------------------------------------------------------------------------------------------
Consumer Competitor Microsoft
Time Interval Surplus Profits Profits Total Surplus
----------------------------------------------------------------------------------------------------------------
Aggregates for No Remedy Path
----------------------------------------------------------------------------------------------------------------
Past...................................... 12.1839999 0.0000000 19.8218227 32.0058226
Future.......................................... 54.4862867 0.0000000 88.6422783 143.1285650
Total........................................... 66.6702866 0.0000000 108.4641010 175.1343876
-------------------------------------------------
Aggregates for 100% Effective Conduct Remedy
----------------------------------------------------------------------------------------------------------------
Past...................................... 12.1839999 0.0000000 19.8218227 32.0058226
Future.......................................... 84.8797426 24.7805427 37.2686222 146.9289075
Total........................................... 97.0637425 24.7805427 57.0904448 178.9347301
-------------------------------------------------
Aggregates for 3-firm APM Structural Remedy
----------------------------------------------------------------------------------------------------------------
Past...................................... 12.1839999 0.0000000 19.8218227 32.0058226
Future.......................................... 89.2098711 5.1158769 54.7189826 149.0447306
-------------------------------------------------
Total..................................... 101.3938710 5.1158769 74.5408053 181.0505532
Aggregates for
Lawful Path
-------------------------------------------------
Past...................................... 16.3216726 2.6242527 13.0930073 32.0389326
Future.......................................... 89.5353459 31.5087389 28.2007864 149.2448711
Total........................................... 105.8570185 34.1329915 41.2937937 181.2838037
-------------------------------------------------
[[Page 29176]]
Comparing: No Remedy minus LawfulPath
----------------------------------------------------------------------------------------------------------------
Past...................................... -4.13767 -2.62425 6.7288153 -0.03311
27 27 01
Future.......................................... -35.0490 -31.5087 60.4414920 -6.11630
592 389 61
Total........................................... -39.1867 -34.1329 67.1703073 -6.14941
319 915 61
-------------------------------------------------
Comparing: 100% Effective Conduct Remedy minus LawfulPath
----------------------------------------------------------------------------------------------------------------
Past...................................... -4.13767 -2.62425 6.7288153 -0.03311
27 27 01
Future.......................................... -4.65560 -6.72819 9.0678358 -2.31596
32 61 36
Total........................................... -8.79327 -9.35244 15.7966511 -2.34907
59 88 36
-------------------------------------------------
Comparing: 3-firm APM Structural Remedy minus LawfulPath
----------------------------------------------------------------------------------------------------------------
Past...................................... -4.13767 -2.62425 6.7288153 -0.03311
27 27 01
Future.......................................... -0.32547 -26.3928 26.5181963 -0.20014
47 620 04
Total........................................... -4.46314 -29.0171 33.2470116 -0.23325
74 147 05
----------------------------------------------------------------------------------------------------------------
Source: Adapted from output file "AGGRWTD8.txt" from Lundgren's six computer programs, where
revstream=1 in "MS6Summ.bas".
Attachment G.--Summary Output of Alternative Remedies for Microsoft
[Total Aggregates for Alternative Remedies]
----------------------------------------------------------------------------------------------------------------
Consumer Competitor icrosoft
Remedy Surplus Profits M Profits Total Surplus
----------------------------------------------------------------------------------------------------------------
No-Remedy:...................................... 66.6702866 0.0000000 108.4641010 175.1343876
20% Conduct:.................................... 72.7489789 4.9561086 98.1893712 175.8944587
40% Conduct:.................................... 78.8276711 9.9122172 87.9146414 176.6545298
60% Conduct:.................................... 84.9063629 14.8683262 77.6399093 177.4145984
80% Conduct:.................................... 90.9850527 19.8244345 67.3651770 178.1746642
100% Conduct:................................... 97.0637425 24.7805427 57.0904448 178.9347301
2-Monopolies:................................... 97.2443831 20.0995342 61.7667505 179.1106678
APM, 2-firms:................................... 97.6056643 10.7375170 71.1193619 179.4625432
APM, 3-firms:................................... 101.3938710 5.1158769 74.5408053 181.0505532
RPM, z=0.000:................................... 97.6056643 10.7375170 71.1193619 179.4625432
RPM, z=0.100:................................... 100.0494922 10.5198190 70.1711669 180.7404781
RPM, z=0.200:................................... 101.7502572 10.2983154 70.2577918 182.3063644
RPM, z=0 300:................................... 104.1852610 10.0963259 69.3834217 183.6650087
RPM, z=0 400:................................... 104.3235767 9.9646972 70.6687936 184.9570675
RPM, z=0 500:................................... 103.6437601 9.8490147 72.1858682 185.6786430
RPM, z=0 600:................................... 100.2265622 9.7727729 75.5755929 185.5749280
RPM, z=0 700:................................... 95.5628679 9.7447668 79.3962211 184.7038557
RPM, z=0 800:................................... 89.8870594 9.7966324 83.5152687 183.1989605
RPM, z=0 900:................................... 84.3841146 10.0564241 87.0578989 181.4984376
Lawful Path:.................................... 105.8570185 34.1329915 41.2937937 181.2838037
----------------------------------------------------------------------------------------------------------------
Revenue Stream = Platforms only.
The value of z in the RPM scenarios is fixed as indicated.
Figures are in billions of real 2001 dollars (7% discount rate).
Figures are aggregated for the years 1995-2025.
Figures are a weighted average of all computed scenarios.
Attachment G--Comparing Remedies: Each remedy minus Lawful Path:
----------------------------------------------------------------------------------------------------------------
Consumer Competitor icrosoft
Remedy Surplus Profits M Profits Total Surplus
----------------------------------------------------------------------------------------------------------------
No-Remedy: 39.1867319........................... -34.1329 -67.1703
915 073
D-6.1494
161
20% Conduct:.................................... -33.1080 -29.1768 -6.89557 -5.38934
412 834 69 77
40% Conduct:.................................... -27.0293 -24.2207 -46.6208 -4.62927
505 753 465 93
60% Conduct:.................................... -20.9506 -19.2646 -36.3461 -3.86921
588 663 144 07
80% Conduct:.................................... -14.8719 -14.3085 -26.0713 -3.10914
674 576 827 22
100% Conduct:................................... -8.79327 -9.35244 -15.7966 -2.34907
59 88 511 36
2-Monopolies:................................... -8.61263 -14.0334 -20.4729 -2.17313
54 574 568 59
APM, 2-firms:................................... -8.25135 -23.3954 -29.8255 -1.82126
42 745 682 05
APM, 3-firms:................................... -4.46314 -29.0171 -33.2470 -0.23325
74 147 116 05
RPM, z=0.000:................................... -8.25135 -23.3954 -9.82556 -1.82126
42 745 82 05
RPM, z=0.100:................................... -5.80752 -23.6131 -28.8773 -0.54332
63 726 732 56
RPM, z=0.200:................................... -4.10676 -23.8346 28.9639981 1.0225607
13 762
[[Page 29177]]
RPM, z=0.300:................................... -1.67175 -24.0366 -28.0896 2.3812049
75 656 281
RPM, z=0.400:................................... -1.53344 -24.1682 -29.3749 3.6732638
18 943 999
RPM, z=0.500:................................... -2.21325 -24.2839 -30.8920 4.3948392
84 768 745
RPM, z=0.600:................................... -5.63045 -24.3602 34.2817992 4.2911243
63 186
RPM, z=0.700:................................... -i0.2941 -24.3882 38.1024274 3.4200520
506 248
RPM, z=0.800:................................... -15.9699 -24.3363 -42.2214 1.9151568
591 591 750
RPM, z=0.900:................................... -21.4729 -24.0765 45.7641052 0.2146339
039 674
----------------------------------------------------------------------------------------------------------------
Source: Adapted from output file "AGGCWTD8.txt" from Lundgren's six computer programs, where
zbump=0.0 in "MS5TranR.bas" and revstream=l in "MS6Summ.bas".
Attachment H.--Summary Output of Alternative Remedies for Microsoft
[Total Aggregates for Alternative Remedies]
----------------------------------------------------------------------------------------------------------------
Consumer Competitor Microsoft
Remedy Surplus Profits Profits Total Surplus
----------------------------------------------------------------------------------------------------------------
No-Remedy....................................... 193.2538881 0.0000000 314.3995669 507.6534549
20% Conduct..................................... 211.1377498 14.6052416 284.1619090 509.9049004
40% Conduct..................................... 229.0216116 29.2104832 253.9242510 512.1563459
60% Conduct..................................... 246.9054718 43.8157260 223.6865862 514.4077840
80% Conduct..................................... 264.7893265 58.4209665 193.4489212 516.6592142
100% Conduct.................................... 282.6731812 73.0262070 163.2112562 518.9106443
2-Monopolies.............................. 283.2511215 59.2815132 176.9034634 519.4360981
APM, 2-firms.................................... 284.4070022 31.7921257 204.2878778 520.4870056
APM, 3-firms.................................... 295.4965492 15.1737142 214.5194539 525.1897174
RPM, z=0.000.................................... 284.4070022 31.7921257 204.2878778 520.4870056
RPM, z=0.100.................................... 291.5721057 31.1496087 201 5156026 524.2373169
RPM, z=0.200.................................... 296.5683886 30.4958291 201 7670167 528.8312345
RPM, z=0.300.................................... 303.7018786 29.8995957 199 2199958 532.8214701
RPM, z=0.400.................................... 304.1242099 29.5110516 202 9787968 536.6140583
RPM, z=0.500.................................... 302.1262579 29.1695258 207 4368322 538.7326159
RPM, z=0.600.................................... 292.1012489 28.9444187 217 3834949 538.4291624
RPM, z=0.700.................................... 278.4197409 28.8617920 228 5928304 535.8743633
RPM, z=0.800.................................... 261.7511839 29.0150366 240 6874245 531.4536450
RPM, z=0.900.................................... 245.5925757 29.7822425 251.0843904 526.4592086
Lawful Path..................................... 307.5699061 99.8842184 118.3262301 525.7803546
----------------------------------------------------------------------------------------------------------------
Revenue Stream = Platforms+Applications+Enterprise.
The value of z in the RPM scenarios is fixed as indicated.
Figures are in billions of real 2001 dollars (7% discount rate).
Figures are aggregated for the years 1995-2025.
Figures are a weighted average of all computed scenarios.
Attachment H.--Comparing Remedies Each remedy minus Lawful Path
----------------------------------------------------------------------------------------------------------------
Competitor Microsoft
Remedy Consumer Surplus Profits Profits Total Surplus
----------------------------------------------------------------------------------------------------------------
No-Remedy............................... -114.31601 -99.884218 196.0733368 -18.126899
80 4 6
20% Conduct............................. -96.432160 -85.278978 165 8356771 -15.875462
9 3 0
40% Conduct............................. -78.548303 -70.673738 135 5980175 -13.624024
7 1 4
60% Conduct............................. -60.664443 -56.068495 105 3603526 -11.372586
5 4 3
80% Conduct............................. -42.780584 -41.463253 75 1226894 -9.1211483
2 4
100% Conduct............................ -24.896724 -26.858011 44 8850261 -6.8697102
9 4
2-Monopolies...................... -24.318784 -40.602705 58 5772333 -6.3442565
6 2
APM, 2-firms............................ -23.162904 -68.092092 85 9616478 -5.2933489
0 7
APM, 3-firms............................ -12.073356 -84.710504 96.1932238 -0.5906372
9 2
RPM, z=0.000............................ -23.162904 -68.092092 85.9616478 -5.2933489
0 7
RPM, z=0.100............................ -15.997800 -68.734609 83.1893726 -1.5430376
5 8
RPM, z=0.200............................ -11.001517 -69.388389 83.4407867 3.0508799
5 3
RPM, z=0.300............................ -3.8680276 -69.984622 80.8937657 7.0411155
7
RPM, z=0.400............................ -3.4456962 -70.373166 84.6525667 10.8337037
8
RPM, z=0.500............................ -5.4436482 -70.714692 89.1106021 12.9522613
6
RPM, z=0.600............................ -15.468657 -70.939799 99.0572648 12.6488078
2 7
RPM, z=0.700............................ -29.150165 -71.022426 110.2666003 10.0940087
2 4
RPM, z=0.800............................ -45.818722 -70.869181 122.3611945 5.6732904
3 8
RPM, z=0.900............................ -61.977330 -70.101975 132.7581603 0.6788540
4 9
----------------------------------------------------------------------------------------------------------------
Source: Adapted from output file "AGGCWTD8.txt" from Lundgren's six computer programs, where
zbump=0.0 in "MS5TranR.bas" and revstream=4 in "MS6Summ.bas".
[[Page 29178]]
Attachment I.--Summary Output of Alternative Remedies for Microsoft
[Total Aggregates for Alternative Remedies:]
----------------------------------------------------------------------------------------------------------------
Consumer Competitor Microsoft
Remedy Surplus Profits Profits Total Surplus
----------------------------------------------------------------------------------------------------------------
No-Remedy....................................... 66.6702866 0.0000000 108.4641010 175.1343876
20% Conduct..................................... 72.7489789 4.9561086 98.1893712 175.8944587
40% Conduct..................................... 78.8276711 9.9122172 87.9146414 176.6545298
60% Conduct..................................... 84.9063629 14.8683262 77.6399093 177.4145984
80% Conduct..................................... 90.9850527 19.8244345 67.3651770 178.1746642
100% Conduct.................................... 97.0637425 24.7805427 57.0904448 178.9347301
2-Monopolies.............................. 97.2443831 20.0995342 61.7667505 179.1106678
APM, 2-firms.................................... 97.6056643 10.7375170 71.1193619 179.4625432
APM, 3-firms.................................... 101.3938710 5.1158769 74.5408053 181.0505532
RPM, z=0.000.................................... 97.6178004 i0.7375170 71.0922687 179.4475861
RPM, z=0.100.................................... 100.0792119 10.5200355 70.1142454 180.7134929
RPM, z=0.200.................................... 102.4749421 10.3041911 69.0645211 181.8436543
RPM, z=0.300.................................... 105.5117884 10.1207266 67.4459993 183.0785144
RPM, z=0.400.................................... 107.9097123 10.0131838 66.0581453 183.9810414
RPM, z=0.500.................................... 109.3712929 9.9176811 65.7228881 185.0118620
RPM, z=0.600.................................... 110.6707337 9.8362632 65.0862391 185.5932361
RPM, z=0.700.................................... 109.3070756 9.7864170 67.0511494 186.1446421
RPM, z=0.800.................................... 106.7436886 9.7342133 69.7748845 186.2527864
RPM, z=0.900.................................... 101.4498564 9.7168714 74.5723925 185.7391203
Lawful Path..................................... 105.8570185 34.1329915 41.2937937 181.2838037
----------------------------------------------------------------------------------------------------------------
Revenue Stream = Platforms only.
The actual value of z in the RPM scenarios varies between the indicated z and z-0.3.
Figures are in billions of real 2001 dollars (7% discount rate).
Figures are aggregated for the years 1995-2025.
Figures are a weighted average of all computed scenarios.
Attachment I.--Comparing Remedies: Each remedy minus Lawful Path
----------------------------------------------------------------------------------------------------------------
Competitor
Remedy Consumer Surplus Profits Microsoft Profits Total Surplus
----------------------------------------------------------------------------------------------------------------
No-Remedy........................... -39.1867319 -34.1329915 67.1703073 -6.1494161
20% Conduct......................... -33.1080412 -29.1768834 56.8955769 -5.3893477
40% Conduct......................... -27.0293505 -24.2207753 46.6208465 -4.6292793
60% Conduct......................... -20.9506588 -19.2646663 36.3461144 -3.8692107
80% Conduct......................... -14.8719674 -14.3085576 26.0713827 -3.1091422
100% Conduct........................ -8.7932759 -9.3524488 15.7966511 -2.3490736
2-Monopolies.................. -8.6126354 -14.0334574 20.4729568 -2.1731359
APM, 2-firms........................ -8.2513542 -23.3954745 29.8255682 -1.8212605
APM, 3-firms........................ -4.4631474 -29.0171147 33.2470116 -0.2332505
RPM, z=0.000........................ -8.2392181 -23.3954745 29.7984750 -1.8362176
RPM, z=0.100........................ -5.7778066 -23.6129560 28.8204517 -0.5703108
RPM, z=0.200........................ -3.3820764 -23.8288004 27.7707274 0.5598506
RPM, z=0.300........................ -0.3452300 -24.0122649 26.1522056 1.7947106
RPM, z=0.400:....................... 2.0526938 -24.1198077 24.7643516 2.6972377
RPM, z=0.500:....................... 3.5142744 -24.2153105 24.4290944 3.7280583
RPM, z=0.600:....................... 4.8137152 -24.2967283 23.7924455 4.3094323
RPM, z=0.700:....................... 3.4500571 -24.3465745 25.7573557 4.8608383
RPM, z=0.800:....................... 0.8866701 -24.3987783 28.4810908 4.9689827
RPM, z=0.900........................ -4.4071621 -24.4161201 33.2785988 4.4553166
----------------------------------------------------------------------------------------------------------------
Source: Adapted from output file "AGGCWTD8.txt" from Lundgren's six computer programs, where
zbump=0.3 in "MS5TranR.bas" and revstream=l in "MS6Summ.bas".
Attachment J.--Summary Output of Alternative Remedies for Microsoft
[Total Aggregates for Alternative Remedies]
----------------------------------------------------------------------------------------------------------------
Consumer Competitor Microsoft
Remedy Surplus Profits Profits Total Surplus
----------------------------------------------------------------------------------------------------------------
No-Remedy....................................... 193.2538881 0.0000000 314.3995669 507 6534549
20% Conduct:.................................... 211.1377498 14.6052416 284.1619090 509 9049004
40% Conduct:.................................... 229.0216116 29.2104832 253.9242510 512 1563459
60% Conduct:.................................... 246.9054718 43.8157260 223.6865862 514 4077840
80% Conduct:.................................... 264.7893265 58.4209665 193.4489212 516 6592142
100% Conduct:................................... 282.6731812 73.0262070 163.2112562 518 9106443
2-Monopolies:................................... 283.2511215 59.2815132 176.9034634 519.4360981
APM, 2-firms:................................... 284.4070022 31.7921257 204.2878778 520.4870056
APM, 3-firms:................................... 295.4965492 15.1737142 214.5194539 525.1897174
RPM, z=0.000:................................... 284.4427827 31.7921257 204.2079998 520.4429082
[[Page 29179]]
RPM, z=0.100:................................... 291.6597578 31.1502485 201.3477301 524.1577365
RPM, z=0.200:................................... 298.6895994 30.5131724 198.2740901 527.4768619
RPM, z=0.300:................................... 307.5955291 29.9716086 193.5330233 531.1001609
RPM, z=0.400:................................... 314.6358118 29.6541255 189.4628042 533.7527415
RPM, z=0.500:................................... 318.9329183 29.3722039 188.4709348 536.7760570
RPM, z=0.600:................................... 322.7383754 29.1318953 186.6145056 538.4847762
RPM, z=0.700:................................... 318.7571699 28.9848037 192.3609534 540.1029270
RPM, z=0.800:................................... 311.2289728 28.8306843 200.3597163 540.4193734
RPM, z=0.900:................................... 295.6928896 28.7794391 214.4391657 538.9114945
Lawful Path:.................................... 307.5699061 99.8842184 118.3262301 525.7803546
----------------------------------------------------------------------------------------------------------------
Revenue Stream = Platforms+Applications+Enterprise.
The actual value of z in the RPM scenarios varies between the indicated z and z-0.3.
Figures are in billions of real 2001 dollars (7% discount rate).
Figures are aggregated for the years 1995-2025.
Figures are a weighted average of all computed scenarios.
Attachment J.--Comparing Remedies: Each remedy minus Lawful Path
----------------------------------------------------------------------------------------------------------------
Competitor
Remedy Consumer Surplus Profits Microsoft Profits Total Surplus
----------------------------------------------------------------------------------------------------------------
No-Remedy:.......................... -114.316018 -99.8842184 196.0733368 -18.1268996
0
20% Conduct:........................ -96.4321609 -85.2789783 165.8356771 -15.8754620
40% Conduct:........................ -78.5483037 -70.6737381 135.5980175 -13.6240244
60% Conduct:........................ -60.6644435 -56.0684954 105.3603526 -11.3725863
80% Conduct:........................ -42.7805842 ,41.4632534 75.1226894 -9.1211483
100% Conduct:....................... -24.8967249 -26.8580114 44.8850261 -6.8697102
2-Monopolies:....................... -24.3187846 -40.6027052 58.5772333 -6.3442565
APM,2-firms:........................ -23.1629040 -68.0920927 85.9616478 -5.2933489
APM, 3-firms:....................... -12.0733569 -84.7105042 96.1932238 -0.5906372
RPM, z=0.000:....................... -23.1271235 -68.0920927 85.8817698 -5.3374464
RPM, z=0.100:....................... -15.9101483 -68.7339699 83.0215001 -1.6226181
RPM, z=0.200:....................... -8.8803067 -69.3710460 79.9478600 1.6965073
RPM, z=0.300:....................... 0.0256230 -69.9126099 75.2067932 5.3198063
RPM, z=0.400:....................... 7.0659057 -70.2300929 71.1365742 7.9723870
RPM, z=0.500:....................... 11.3630122 -70.5120145 70.1447047 10.9957024
RPM, z=0.600:....................... 15.1684692 -70.7523231 68.2882755 12.7044217
RPM, z=0.700:....................... 11.1872638 -70.8994147 74.0347234 14.3225724
RPM, z=0.800:....................... 3.6590666 -71.0535341 82.0334862 14.6390188
RPM, z=0.900:....................... -11.8770165 -71.1047793 96.1129357 13.1311399
----------------------------------------------------------------------------------------------------------------
Source: Adapted from output file "AGGCWTD8.txt" from Lundgren's six computer programs, where
zbump=0.3 in "MS5TranR.bas" and revstream=4 in "MS6Summ.bas".
Documentation for BASIC Programs to Simulate Antitrust Remedies
for Microsoft Case.
This document, "MS--Sim--Doc.txt", simply
describes and documents six programs for the Microsoft antitrust
remedy simulations.
These six programs are named:
MS1File.bas (0.2 seconds)
MS2ProbA.bas (10.3 minutes)
MS3ProbR.bas (18.1 minutes)
MS4TranA.bas ( 1.6 minutes)
MS5TranR.bas (24.9 minutes)
MS6Summ.bas ( 1.7 minutes)
The programs should be run in the order indicated, since files
generated by one program are used by subsequent programs. The
running times are approximate, based on the running times for a 1.6
GHz home computer. The programs were coded and run in Microsoft
QuickBASIC. The programs may require some recoding, if it is desired
to run them in other versions of the BASIC computer language.
Below is a summary description of what each program does. Each
program has its own more detailed description.
Program MS1File.bas: This program generates files needed by
subsequent programs. The program generates the
"COSTLIST.txt" file, which details the assumed cost
levels for each scenario. For 3 firms and 5 levels of cost, 35 cost
scenarios are generated. The program also generates the
"Ordering.txt" and "OrderRPM.txt" files.
These files generate the permutations by which the ranking of
firms can be reordered. For 3 firms, there are 6 permutations.
"OrderRPM.txt" allows the "MS3ProbR.bas"
program to track the rankings of two Microsoft successor firms
simultaneously. Program MS2ProbA.bas:
This program computes the probabilites associated with each
scenario, as the industry transitions from a particular starting
point, and gradually converges towards a long-run stochastic
equilibrium. This program assigns probabilities for equilibria
consisting only of Absolute Profit Maximizing ("APM")
firms. The starting point varies by the number of Microsoft firms
(msfirms) in period zero. If msfirms=l, Microsoft starts as a
monopoly.
If msfirms=2, Microsoft is split into two firms.
ATTACHMENT K
PAGE 2 OF 4
If msfirms=3, Microsoft is split into three firms. The program uses
three different speeds (speed=l,2,3) for the transition. Probability
files are outputted for each msfirms=l,2,3 starting point, and each
speed=l,2,3 for the transition speed. Program MS3ProbR.bas:
This program is similar to "MS2ProbA.bas", since it
computes probabilites associated with each scenario, as the industry
transitions from a particular starting point, and gradually
converges towards a long-run stochastic equilibrium. This program
differs from "MS2ProbA.bas", because it assigns
probabilities for equilibria consisting of two Relative Profit
Maximizing ("RPM") firms, along
[[Page 29180]]
with such APM firms as may be involved in the transitions. The
equilibria automatically convert to APM equilibria if one or both
RPM firms exits the industry.
The program uses three different speeds (speed=l,2,3) for the
transition.
Probability files are outputted for the one starting point
(msfirms=2), and each speed=l,2,3 for the transition speed. This
program is more complex than "MS2ProbA.bas" because it
must simultaneously track the rankings of two Microsoft-successor
firms simultaneously. Program MS4TranA.bas:
This program uses the probability data computed by
"MS2ProbA.bas" to compute Consumer Surplus and Profits
for both Microsoft and Microsoft's competitors. These are determined
for transition period zero (iter=0) under the assumption that
Microsoft has no competitors in period zero. In transition periods
one through ten, Microsoft is assumed to have (at least potentially)
one or more competitors. This program only calculates APM
equilibria.
The 225 outputted transition (TRAN .... txt) files are computed for
three speeds of transition (speed=l,2,3), five cost ratios for
short-run cost (cratio=l,2,3,4,5), five assumptions concerning the
portion of long-run costs allocated to fixed costs (port=0,1,2,3,4),
and three starting points (msfirms=l,2,3).
ATTACHMENT K
PAGE 3 OF 4
Program MS5TranR.bas:
This program uses the probability data computed by
"MS3ProbR.bas" to compute Consumer Surplus and Profits
for both Microsoft and Microsoft's competitors. These are determined
for transition period zero (iter=0) under the assumption that
Microsoft has no competitors in period zero. In transition periods
one through ten, Microsoft is assumed to have (at least potentially)
one or more competitors. This program calculates both RPM and APM
equilibria.
The 750 outputted transition (TRPM .... txt) files are computed
for three speeds of transition (speed=l,2,3), five cost ratios for
short-run cost (cratio=l,2,3,4,5), five assumptions concerning the
portion of long-run costs allocated to fixed costs (port=0,1,2,3,4),
and ten starting points (z = 0.0, 0.i, 0.2, 0.3, 0.4, 0.5, 0.6, 0.7,
0.8, 0.9).
The starting point always has Microsoft divided into two RPM
firms, where the goal functions for the two firms are:
Goal1 = Profit1--z * Profit2
Goal2 = Profit2--z * Profit1
An additional feature of the program allows the value of z to
change in response to circumstances. If zbump=0.0, then z is fixed,
and does not change in response to circumstances. If zbump > 0,
then z changes in response to circumstances. In the program, z
responds to the circumstance that one of the RPM firms is not
producing, because it is achieving negative absolute profit.
In this circumstance, the program automatically "bumps
down" the value of z for both RPM firms by the amount of
zbump. For example, if z=0.7 and zbump=0.4, then if one or both RPM
firms would shut down, then the value of z is automatically bumped
down to z=0.3.
In many circumstances, this allows both RPM firms to continue
producing.
Program MS6Summ.bas:
This program computes and summarizes the data produced by prior
programs, including both "MS4TranA.bas" and
"MS5TranR.bas" The program produces data summarized for
particular scenarios in files marked "AGGC .... txt",
"AGGR .... txt", and "YEAR .... txt". The
"AGGC .... txt" files (which are most user friendly)
summarize all past and future data, appropriately discounted, into a
single set of figures which may be compared across remedy proposals.
The "AGGR .... txt" files categorize the aggregate data
into past and future amounts of consumer surplus, profits, and total
surplus for each remedy proposal, and how these amounts compare with
the same amounts along the lawful path. The "YEAR ....
txt" files (which are least user friendly) output the
calculated amounts, by year, for each remedy proposal and the lawful
path.
ATTACHMENT K
PAGE 4 OF 4
ATTACHMENT L
PAGE 1 OF 10
Attachment L.
"BASIC Program "MS1File.bas".
"Program Number 1 in a series of six programs "designed
to simulate alternative antitrust "remedies for the Microsoft
software industry. "Copyright, January 23, 2002, Carl
Lundgren. "This program, "MS1File.bas", generates
files "needed by the subsequent computer programs "for
the Microsoft antitrust remedy simulations. "This program
generates the "COSTLIST.txt" file, "which details
the assumed cost levels for each scenario. "For 3 firms and 5
levels of cost, 35 cost scenarios are generated. "This program
also generates the "Ordering.txt" "and
"OrderRPM.txt" files. These files generate the
"permutations by which the ranking of firms can be reordered.
"For 3 firms, there are 6 permutations. "The file
"OrderRPM.txt" allows the "MS3ProbR.bas"
program to track "the rankings of two Microsoft successor
firms simultaneously.
DEFDBL A-Z
DIM broadscen(1023), class(5), cost(5)
DIM weight(50), newclass1(50), newclass2(50), newclass3(50)
DIM newclass4(50) , newclass5(50)
DIM c1(50), c2 (50), c3 (50), c4(50) , c5(50)
DIM pv(50, 3), finprob(50)
DIM new(5), ORDER(6, 3), 0RDERRPM(6, 15)
timex = TIMER
CLS
GOSUB GENERATE:
GOSUB COLLAPSE:
GOSUB COSTIT:
GOSUB PVASSIGN:
GOSUB FINALPROB:
GOSUB PRINTCOST:
GOSUB ORDER:
GOSUB PRINTORDER:
GOSUB PRINTORDERRPM:
MTC-00030631--O1O5
ATTACHMENT L
PAGE 2 OF i0
PRINT TIMER--timex END GENERATE:
"Submodule to generate possible scenarios.
FOR scennum = 0 TO 215
broadscen(scennum) = 0
NEXT scennum FOR firm1 = 1 TO 5
FOR firm2 = 1 TO 5
FOR firm3 = 1 TO 5
GOSUB CLASSIFY:
NEXT firm3
NEXT firm2
NEXT firm1
RETURN
"*****END of Generate Submodule*****
CLASSIFY:
"Submodule of Generate submodule" to classify the
generated scenarios.
class (1) = 0
class (2) = 0
class(3) = 0
class (4) = 0
class (5) = 0
class(firm1) =
class(firm1) + 1
class(firm2) = class(firm2) + 1
class(firm3) = class(firm3) + 1
scennum = 256 * class(l) + 64 * class(2) + 16 * class(3) + 4 *
class(4) + class(5)
broadscen(scennum) = broadscen (scennum) + 1
RETURN
"*****END of Classify Submodule*****
COLLAPSE:
"Submodule to collapse the number of scenarios" to a
more manageable number.
newnum = 0
FOR class1 = 0 TO 3
FOR class2 = 0 TO 3
ATTACHMENT L
PAGE 3 OF 10
FOR class3 = 0 TO 3
FOR class4 = 0 TO 3
FOR class5 = 0 TO 3
scennum = 256 * class1 + 64 * class2 + 16 * class3 + 4 *
class4 + class5
broadnum = broadscen(scennum)
IF broadnum > 0 THEN
newnum = newnum + 1 weight(newnum) = broadnum
newclass1(newnum) = class1
newclass2(newnum) = class2
newclass3(newnum) = class3
newclass4(newnum) = class4
newclass5(newnum) = class5
END IF
NEXT class5
NEXT class4
NEXT class3
NEXT class2
NEXT class1
newtot = newnum
RETURN
"*****END of Collapse Submodule*****
COSTIT:
"Submodule to assign cost levels to firms," with lowest-
cost firms ordered first.
FOR scen = 1 TO newtot
[[Page 29181]]
n1 = newclass1(scen)
n2 = newclass2(scen) + n1
n3 = newclass3(scen) + n2
n4 = newclass4(scen) + n3
FOR n = 1 TO n1
cost(n) = 1
NEXT n
FOR n = n1 + 1 TO n2
cost(n) = 2
NEXT n
FOR n = n2 + 1 TO n3
cost(n) = 3
NEXT n
FOR n = n3 + 1 TO n4
cost(n) = 4
ATTACHMENT L
PAGE 4 OF 10
NEXT n
FOR n = n4 + 1 TO 3
cost(n) = 5
NEXT n
c1(scen) = cost(1)
c2(scen) = cost(2)
c3(scen) = cost(3)
NEXT scen
RETURN
"*****END of Costit Submodule*****
PVASSIGN:
"Submodule to assign point values for firm cost levels, with
lowest-cost firms ordered first. The point values are 60 times the
cost level, with some adjustment in point values, when two or more
firms share the same cost level.
FOR scen = 1 TO newtot
pv(scen, 1) = c1(scen) * 60
pv(scen, 2) = c2(scen) * 60
pv(scen, 3) = c3(scen) * 60
NEXT scen FOR scen = I TO newtot
n1 = newclass1(scen)
n2 = newclass2(scen) +
n1 n3 = newclass3(scen) + n2
n4 = newclass4(scen) + n3
"Assign point values to level one costs.
ns = 0
nc = newclass1(scen)
IF nc = 2 THEN
pv(scen, ns + 1) = pv(scen, ns + 1)--10
pv(scen, ns + 2) = pv(scen, ns + 2) + 10
END IF
IF nc = 3 THEN
pv(scen, ns + 1) = pv(scen, ns + 1) 15
pv(scen, ns + 3) = pv(scen, ns + 3) + 15
END IF
"Assign point values to level two costs.
us = ns + nc
nc = newclass2(scen)
IF nc = 2 THEN
pv(scen, ns + 1) = pv(scen, ns + 1) 10
ATTACHMENT L
PAGE 5 OF 10
pv(scen, ns + 2) = pv(scen, ns + 2) + 10
END IF
IF nc = 3 THEN
pv(scen, ns + 1) = pv(scen, ns + 1)--15
pv(scen, ns + 3) = pv(scen, ns + 3) + 15
END IF
Assign point values to level three costs.
ns = ns + nc
nc = newclass3 (scen)
IF nc = 2 THEN
pv(scen, ns + 1) = pv(scen, ns + 1)--10
pv(scen, ns + 2) = pv(scen, ns + 2) + 10
END IF
IF nc = 3 THEN
pv(scen, ns + 1) = pv(scen, ns + 1)--15
pv(scen, ns + 3) = pv(scen, ns + 3) + 15
END IF
"Assign point values to level four costs.
ns = ns + nc
nc = newclass4(scen)
IF nc = 2 THEN
pv(scen, ns + 1) = pv(scen, ns + 1)--10
pv(scen, ns + 2) = pv(scen, ns + 2) + 10
END IF
IF nc = 3 THEN
pv(scen, ns + 1) = pv(scen, ns + 1)--15
pv(scen, ns + 3)--pv(scen, ns + 3) + 15
END IF
"Assign point values to level five costs.
ns = ns + nc
nc = newclass5(scen)
IF nc = 2 THEN
pv(scen, ns + 1) = pv(scen, ns + 1) 10
pv(scen, ns + 2) = pv(scen, ns + 2) + 10
END IF
IF nc = 3 THEN
pv(scen, ns + I) = pv(scen, ns + 1)--15
pv(scen, ns + 3)--pv(scen, ns + 3) + 15
END IF NEXT scen
RETURN
"*****END of PVassign Submodule*****
ATTACHMENT L
PAGE 6 OF 10
FINALPROB:
"This submodule computes the final probability "for each
scenario--the probability toward which "each scenario
tends to converge over the long run.
"cost(s,f) = short-run marginal cost of firm f in scenario s.
"finprob(s) = final probability assumed for scenario s.
"weight(s) = number of permutations of scenario s.
"finprob is computed as weight(s) * assumed probabilities
for each cost level:
Prob(cost level one) = 10% (low cost)
Prob(cost level two) = 15% (low-middle cost)
Prob(cost level three) = 20% (middle cost)
Prob(cost level four) = 25% (middle-high cost)
Prob(cost level five) = 30% (high cost)
FOR scen = I TO newtot fprob = weight(scen)
L1 = newclass1(scen)
L2 = newclass2 (scen)
L3 = newclass3 (scen)
L4 = newclass4 (scen)
L5 = newclass5 (scen)
IF L1 > 0 THEN fprob = fprob * .1#
IF L1 > 1 THEN fprob = fprob * .1#
IF L1 * 2 THEN fprob = fprob * .1#
IF L2 * 0 THEN fprob = fprob * .15#
IF L2 * 1 THEN fprob = fprob * .15#
IF L2 * 2 THEN fprob = fprob * .15#
IF L3 * 0 THEN fprob = fprob * .2#
IF L3 > 1 THEN fprob = fprob * .2#
IF L3 > 2 THEN fprob = fprob * .2#
IF L4 > 0 THEN fprob = fprob * .25#
IF L4 * 1 THEN fprob = fprob * .25#
IF L4 > 2 THEN fprob = fprob * .25#
IF L5 > 0 THEN fprob = fprob * .3#
IF L5 > 1 THEN fprob = fprob * .3#
IF L5 > 2 THEN fprob = fprob * .3#
finprob (scen) = fprob
NEXT scen
RETURN
"***** END OF FinalProb SUBMODULE *****
PRINTCOST:
"Submodule to print out the collapsed scenarios
ATTACHMENT L
PAGE 7 OF 10
"and the ordered cost assignments
"as part of file "CostList.txt".
costs =
":-bsbasic-bs
ms--sim-bscostlist.txt"
"Output cost list
OPEN costs FOR OUTPUT AS #1
PRINT #1, "Scen"; "L1 L2 L3 L4 L5";
"Wgt"; "Fin-Prob";
PRINT #1, "C1 C2 C3"; "PV1 PV2 PV3"
FOR scennum = 1 TO newtot
PRINT #1, USING "##"; scennum;
PRINT #1, "";
PRINT #1, USING "###";
newclass1(scennum);
PRINT #1, USING "###";
newclass2(scennum);
PRINT #1, USING "###"; newclass3
(scennum);
PRINT #1, USING "###";
newclass4(scennum);
PRINT #1, USING "###";
newclass5(scennum);
PRINT #1, USING "#####";
weight(scennum);
PRINT #1, USING
"###.######";
finprob(scennum);
PRINT #1, "";
PRINT #1, USING "###"; c1(scennum);
PRINT #1, USING "###"; c2(scennum);
PRINT #1, USING "###"; c3(scennum);
PRINT #1, "";
PRINT #1, USING "####"; pv(scennum,
1);
PRINT #1, USING "####"; pv(scennum,
2);
PRINT #1, USING "####"; pv(scennum,
3);
PRINT #1, NEXT scennum
CLOSE #1
RETURN
"*****END of PrintCost Submodule*****
ORDER:
"Submodule to compute all possible orderings" of three
firms (six permutations total).
ordernum = 0
FOR o3 = 5 TO 1 STEP -1
FOR o2 = 5 TO 1 STEP -1
FOR o1 = 5 TO 1 STEP -1
GOSUB TESTORDER:
NEXT o1
NEXT o2
NEXT 03
ordertot = ordernum
RETURN
MTC-00030631 0111
ATTACHMENT L
PAGE 8 OF 10
"*****END of Order Submodule*****
TESTORDER:
"Submodule of Order submodule to test" whether proposed
ordering is acceptable.
IF o1 + 02 + 03 <> 6 THEN RETURN
IF o1 * o2 * 03 <> 6 THEN RETURN
ordernum = ordernum + 1
ORDER(ordernum, 1) = o1
ORDER(ordernum, 2) = o2
ORDER(ordernum, 3) = o3
GOSUB ORDERRPM:
RETURN
"*****END of Order Submodule*****
[[Page 29182]]
ORDERRPM:
Submodule to provide ordering information to track location of two
MS firms among five firms, for purpose of determining costs of such
two firms for calculating RPM remedy.
There are six basic permutations of three firms, among which the
rankings of two firms must be tracked simultaneously.
new(O) = 0
FOR old = 1 TO 3
new(old) = ORDER(ordernum, old)
NEXT old
FOR old1 = 0 TO 3
FOR old2 = 0 TO 3
oldnum = old1 * 4 + old2
new1 = new(old1)
new2 = new(old2)
newnum = new1 * 4 + new2
ORDERRPM(ordernum, oldnum) = newnum
NEXT old2
NEXT old1
RETURN
"*****END of OrderRPM Submodule*****
PRINTORDER:
"Submodule to print out the 6 permutations
MTC-00030631 0112
ATTACHMENT L
PAGE 9 OF 10
" in which 3 firms can be ordered.
"Printing is to the file ,,Ordering.txt".
ORDERS =
,,c:-bsbasic-bsms
--sim-bsordering.txt"
"Output ordering list
OPEN ORDERS FOR OUTPUT AS #1
PRINT #1, ,'Onum"; "o1 o2 03"
FOR ordernum = 1 TO ordertot
PRINT #1, USING "###"; ordernum;
PRINT #1, "";
PRINT #1, USING "###"; 0RDER(ordernum,
1);
PRINT #1, USING "###"; ORDER(ordernum,
2);
PRINT #1, USING "###"; ORDER(ordernum,
3);
PRINT #1,
NEXT ordernum
CLOSE #1
RETURN
*****END of PrintOrder Submodule*****
PRINTORDERRPM:
"Submodule to print out the 6 permutations in which 3 firms
can be ordered, with further information to track two firms
simultaneously, for further use in later programs to calculate the
effects of RPM firms.
Printing is to the file ,,OrderRPM.txt"
ORDERRPM$ = "c:
-bsbasic-bsms
sim-bsorderrpm.txt" "Output
RPM ordering
list
PEN ORDERRPM$ FOR OUTPUT AS #1
PRINT #1, "Onum"; "o00 o01 o02 o03";
PRINT #1, "o10 o11 o12 o13";
PRINT #1, "020 o21 022 023";
PRINT #1, "o30 o31 032 o33";
PRINT #1,
FOR ordernum = 1 TO ordertot
PRINT #1, USING "###"; ordernum;
PRINT #1, "";
FOR oldnum = 0 TO 15
PRINT #1, USING "####";
0RDERRPM(ordernum, oldnum);
NEXT oldnum
PRINT #1,
NEXT ordernum
CLOSE #1
RETURN
*END of PrintOrderRPM Submodule*
ATTACHMENT L
PAGE 10 OF 10
END OF Program "MS1File.bas".
ATTACHMENT M
PAGE 1 OF 14
Attachment M.
"BASIC Program "MS2ProbA.bas"
"Program Number 2 in a series of six programs "designed
to simulate alternative antitrust "remedies for the Microsoft
software industry. "Copyright, January 23, 2002, Car1
Lundgren.
This program, "MS2ProbA.bas", computes the
probabilites associated with each scenario, as the industry
transitions from a particular starting point, and gradually
converges towards a long-run stochastic equilibrium.
This program assigns probabilities for equilibria consisting
only of Absolute Profit Maximizing ("APM") firms. The
starting point varies by the number of
"Microsoft firms (msfirms) in period zero:
If msfirms=1, Microsoft starts as a monopoly.
If msfirms=2, Microsoft is split into two firms.
If msfirms=3, Microsoft is split into three firms.
"The program uses three different speeds (speed=l,2,3) for the
transition.
"Probability files are outputted for each starting point
(msfirms=l,2,3),
"and for each transition speed (speed=l,2,3).
The parameters controlling the transition speed (pvmax in
submodule InitProb10) are supplied by the user.
The program reads in 35 possible cost structures for the
industry, each with 3 firms.
The program assigns probabilities for each scenario, and for
whether a Microsoft firm (either Microsoft or a successor to
Microsoft after divestiture) is ranked as firm 1, 2, or 3, or is
firm 0 (with zero market share).
DEFDBL A-Z
DIM pvtot0(35, 3), pvtot1(35, 3), pvtot2(35, 3)
DIM pvtot3 (35, 3)
DIM prob2 (35, 3)
DIM diff(3, 3)
DIM finprob (35)
ATTACHMENT M
PAGE 2 OF 14
" CONTROL MODULE
CLS
timex--TIMER
"This section calls the main module 3 times.
"This control module chooses speed for cost shifts:
"speed = 1 "Slow speed for cost shifts.
"speed = 2 "Moderate speed for cost shifts.
"speed = 3 "High speed for cost shifts.
FOR speed = 1 TO 3
GOSUB MAINMODULE:
NEXT speed
PRINT TIMER--timex
END
MAINMODULE:
GOSUB FILENAMES: "Assign file names to input/output files.
PRINT "Computing transition weights (deviation):,,
GOSUB INITIALIZE0: "Initialize transition weights.
endcomp = 0
FOR iter = 1 TO 100
GOSUB TRANSCOMP: "Iterate transition weights.
IF endcomp = 1 THEN 99
NEXT iter
99 GOSUB PRINTPROBT: "Print last computed transition weights.
CLOSE #2
PRINT "Computing transitions from MS=1 APM firm:"
msfirms = 1
iter = 0
GOSUB INITIALIZE1: "Microsoft starts as monopoly.
iter = 1
GOSUB TRANSIT0:
GOSUB PRINTPROB:
FOR iter = 2 TO 10
GOSUB TRANSFERPROB:
GOSUB TRANSIT1:
GOSUB PRINTPROB:
NEXT iter
CLOSE #2
PRINT "Computing transitions from MS=2 APM firms:"
msfirms = 2
ATTACHMENT M
PAGE 3 OF 14
iter = 0
GOSUB INITIALIZE2: "Microsoft split into 2 firms.
iter = 1
GOSUB TRANSIT0:
GOSUB PRINTPROB:
FOR iter = 2 TO 10
GOSUB TRANSFERPROB:
GOSUB TRANSIT1:
GOSUB PRINTPROB:
NEXT iter
CLOSE #2
PRINT "Computing transitions from MS=3 APM firms:"
msfirms = 3
iter = 0
GOSUB INITIALIZE3: "Microsoft split into 3 firms.
iter = 1
GOSUB TRANSIT0:
GOSUB PRINTPROB:
FOR iter = 2 TO 10
GOSUB TRANSFERPROB:
GOSUB TRANSIT1:
GOSUB PRINTPROB:
NEXT iter
CLOSE #2
CLOSE
RETURN
"***** END OF MAIN MODULE *****
FILENAMES:
costs =
"c:-bsbasic-bs
ms--sim-bscostlist.txt"
"Input scenario costs
orders =
"c:-bsbasic-bs
ms--sim-bsordering.txt"
"Input firm re-orderings
prob0$ =
"c:-bsbasic-bs
ms--sim-bsout-bs
prob00.txt" "Output iwgt
convergence
prob1$ =
"c:-bsbasic-bs
ms--sim-bsout-bs
prob10.txt" "Output 1-firm APM
transition probs
prob2$ =
"c:-bsbasic-bs
ms--sim-bsout-bs
prob20.txt"
[[Page 29183]]
"Output 2-firm APM
transition probs
prob3$ =
"c:-bsbasic-bs
ms--sim-bsout-bs
prob30.txt" "Output 3-firm APM
transition probs
IF speed = 1 THEN sp$ = "1"
IF speed = 2 THEN sp$ = "2"
ATTACHMENT M
PAGE 4 OF 14
IF speed = 3 THEN sp$ = "3"
replaces = sp$
MID$(prob0$, 26, 1) = replaces
MID$(prob1$, 26, 1) = replaces
MID$(prob2$, 26, 1) = replaces
MID$(prob3$, 26, 1) = replaces
RETURN
"***** END OF FileNames SUBMODULE *****
INITIALIZE0:
"Submodule to find transition weights.
GOSUB SCENREAD: "Read in scenario list.
GOSUB ORDERREAD: "Read in ordering list.
GOSUB INITPROB10:
iter = 0
GOSUB TRANSCOMP: "Computes transition weights to scenarios.
OPEN prob0$ FOR OUTPUT AS #2
RETURN
"***** END OF Initialize0 SUBMODULE *****
INITPROB10:
"This submodule sets the prob1 variables to zero," and
then sets initial values for non-zero prob1.
DIM prob1(35, 3), cost(35, 3), herf(35)
DIM iwgt(35), iwgt0(35)
"****User supplies pvmax, which controls transition speed.****
IF speed = I THEN pvmax = 1.5 "Slow speed for cost shifts.
IF speed = 2 THEN pvmax = 2.5 "Moderate speed for cost shifts.
IF speed = 3 THEN pvmax = 4.5 "High speed for cost shifts.
FOR scen1 = 0 TO 35
FOR firm1 = 0 TO 3
prob1(scen1, firm1) = 0
NEXT firm1
NEXT scen1
"This section sets initial values to reflect"
distribution of final probabilites.
FOR scen1 = I TO 35
prob1(scen1, 0) = finprob(scen1)
iwgt(scen1) = finprob(scen1)
NEXT scen1
RETURN
"***** END OF InitProb10 SUBMODULE *****
ATTACHMENT M
PAGE 5 OF 14
TRANSCOMP:
Submodule to compute transition weights.
Transitions are from any scenario (scen1)
to any same or different scenario (scen2).
Goal is to find transition weights (iwgt) such that if prob1 is set
at final probabilities, then computed prob2 also reflects final
probabilities. The transition weights are iteratively adjusted,
until there is convergence. Such convergence means that the long-run
distribution of scenarios will reflect the final probabilities
selected.
GOSUB INITPROB2: "Initialize prob2 variables.
PRINT speed; iter; "*";
FOR scen1 = 1 TO 35
PRINT "";
iprob0 = prob1(scen1, 0)
iprob1 = prob1(scen1, 1)
iprob2 = prob1(scen1, 2)
iprob3 = prob1(scen1, 3)
FOR scen2 = 1 TO 35
GOSUB PVADD:
NEXT scen2
GOSUB PVADJUST:
NEXT scen1
devtot = 0
itotal = 0
FOR scen = 1 TO 35
iwgt0(scen) = iwgt(scen)
iwgt(scen) = iwgt(scen) * prob1(scen, 0) / prob2(scen, 0)
itotal = itotal + iwgt(scen)
dev = prob1(scen, 0)--prob2(scen, 0)
devtot = devtot + ABS(dev)
NEXT scen
FOR scen = 1 TO 35
iwgt(scen) = iwgt(scen) / itotal
NEXT scen
IF devtot < .000001 THEN endcomp = 1
PRINT USING###"; devtot
RETURN
This submodule finds transition weights (iwgt) to each scenario,
that cause convergence to the assumed final probabilities
(FinProb)
attached to the various possible market outcomes
ATTACHMENT M
PAGE 6 OF 14
" in a very long-run stochastic equilibrium.
"***** END OF TransComp SUBMODULE *****
INITIALIZE1:
"Submodule to initialize Microsoft starts as monopoly.
GOSUB INITPROB11:
OPEN prob1$ FOR OUTPUT AS #2
GOSUB PRINTPROB0:
RETURN
"***** END OF Initializel SUBMODULE *****
INITPROB11:
"This submodule of Initialize1 sets the prob1 variables to
zero,
" and then sets initial values for non-zero prob1.
FOR scen1 = 0 TO 35
FOR firm1 = 0 TO 3
prob1(scen1, firm1) = 0
NEXT firm1
NEXT scen1
"This section sets initial scenario to
" Microsoft is a monopoly,
" Scenario 5, Cost levels 3(MS), 5(comp), 5(comp).
scen0 = 5
prob1(0, 1) = 1
FOR firm = 1 TO 3
cost(O, firm) = cost(scen0, firm)
NEXT firm
RETURN
"***** END OF InitProb11 SUBMODULE *****
INITIALIZE2:
"Submodule to initialize splitting Microsoft into two firms.
GOSUB INITPROB12:
OPEN prob2$ FOR OUTPUT AS #2
GOSUB PRINTPROB0:
RETURN
"***** END OF Initialize2 SUBMODULE *****
INITPROB12:
"This submodule sets the prob1 variables to zero,
ATTACHMENT M
PAGE 7 OF 14
and then sets initial values for non-zero prob1.
FOR seen1 = 0 TO 35
FOR firm1 = 0 TO 3
prob1(scen1, firm1) = 0
NEXT firm1
NEXT scen1
This section sets initial scenario to
Microsoft is split into two equal-sized firms,
Scenario 6, Cost levels 3(MS-1), 4(MS-2), 5(comp).
scen0--6
prob1(0, 1) = 1# / 2#
prob1(0, 2) = 1# / 2#
FOR firm = 1 TO 3
cost(0, firm) = cost(scen0, firm)
NEXT firm
RETURN
"***** END OF InitProb12 SUBMODULE *****
INITIALIZE3:
"Submodule to initialize splitting Microsoft into three firms.
GOSUB INITPROB13:
OPEN prob3$ FOR OUTPUT AS #2
GOSUB PRINTPROB0:
RETURN
"***** END OF Initialize3 SUBMODULE *****
INITPROB13:
"This submodule sets the prob1 variables to zero,
" and then sets initial values for non-zero prob1.
FOR scen1 = 0 TO 35
FOR firm1 = 0 TO 3
prob1(scen1, firm1) = 0
NEXT firm1
NEXT scen1
"This section sets initial scenario to
" Microsoft is split into three equal-sized firms,
" Scenario 7, Cost levels 3(MS-l), 4(MS-2),
4(MS-3).
scen0 = 7
prob1(0, 1) = 1# / 3#
prob1(0, 2) = 1# / 3#
prob1(0, 3) = 1# / 3#
FOR firm = I TO 3
MTC-00030631--0121
ATTACHMENT M
PAGE 8 OF 14
cost(0, firm) = cost(scen0, firm)
NEXT firm
RETURN
"***** END OF InitProb13 SUBMODULE *****
SCENREAD:
"This submodule reads in the scenario costs list.
OPEN costs FOR INPUT AS #1
LINE INPUT #1, dummy$
"cost(s,f) = short-run marginal cost of firm f
[[Page 29184]]
in scenario s.
"finprob(s) = final probability assumed for scenario s.
"wgt(scen) = number of permutations of scenario s.
FOR scen = 1 TO 35
INPUT #1, scen2, L1, L2, L3, L4, L5, wgt, finprob(scen)
IF scen <> scen2 THEN PRINT "Scenario mismatch",
scen, scen2
INPUT #1, c1, c2, c3
FOR firm = 1 TO 3
INPUT #1, ctemp
cost(scen, firm) = ctemp / 60#
NEXT firm
NEXT scen
CLOSE #1
RETURN
"***** END OF ScenRead SUBMODULE *****
ORDERREAD:
"This Submodule reads in the ordering list,
" which is a list of 6 permutations by which firms 1-3
" may become firms 1-3 in the same or a different order.
OPEN orders FOR INPUT AS #1
LINE INPUT #1, dummy$
"ordnum = number of ordering.
"order(o,f) = ordering number o for firm f,
" the firm number which firm f becomes in ordering o.
DIM order(6, 3)
FOR ordnum = 1 TO 6
INPUT #1, ordnum2
IF ordnum <> ordnum2 THEN PRINT "Order Number
mismatch",
ordnum, ordnum2
FOR firm = 1 TO 3
INPUT #1, order(ordnum, firm)
NEXT firm
ATTACHMENT M
PAGE 9 OF 14
NEXT ordnum
CLOSE #1
RETURN
"***** END OF OrderRead SUBMODULE *****
TRANSIT0:
"This submodule controls the initial transitions.
" Transitions are from scenario zero (scen1)
" to the other possible scenarios (scen2).
GOSUB INITPROB2: "Initialize prob2 variables.
PRINT speed; iter; ,,*,,;
scen1 = 0
PRINT -.-;
iprob0 = prob1(scen1, 0)
iprob1 = prob1(scen1, 1)
iprob2 = prob1(scen1, 2)
iprob3 = prob1(scen1, 3)
FOR scen2 = 1 TO 35
GOSUB PVADD:
NEXT scen2 GOSUB PVADJUST:
GOSUB MSEXITS:
PRINT
RETURN
"***** END OF Transit0 SUBMODULE *****
TRANSIT1:
"This submodule controls the subsequent transitions.
"Transitions are from any scenario (scen1)
" to any same or different scenario (scen2).
GOSUB INITPROB2: "Initialize prob2 variables.
PRINT speed; iter; "*',;
FOR scen1 = 1 TO 35
PRINT ".,,;
iprob0 = prob1(scen1, 0)
iprob1 = prob1(scen1, 1)
iprob2 = prob1(scen!, 2)
iprob3 = prob1(scen1, 3)
IF iprob0 + iprob1 + iprob2 + iprob3 = 0 THEN 10
FOR scen2 = 1 TO 35
GOSUB PVADD:
NEXT scen2
ATTACHMENT M
PAGE 10 OF 14
GOSUB PVADJUST:
10 NEXT scen1
GOSUB MSEXITS:
PRINT
RETURN
"***** END OF Transit1 SUBMODULE *****
INITPROB2:
"This submodule of TRANSIT sets the prob2 variables to zero.
FOR scen2 = 0 TO 35
FOR firm2 = 0 TO 3
prob2(scen2, firm2) = 0
NEXT firm2
NEXT scen2
RETURN
"***** END OF InitProb2 SUBMODULE *****
PVADD:
This submodule adds up point values (pv) for transition from a
single scenario (scen1) to a single scenario (scen2).
pvtot0(s,f) = point value for probability of transition from
scenario with Microsoft=firm 0 (zero market share), to scenario s
and to Microsoft=firm f.
"pvtot1(s,f) = same, but from Microsoft=firm 1.
"pvtot2(s,f) = same, but from Microsoft=firm 2.
"pvtot3(s,f) = same, but from Microsoft=firm 3.
FOR firm1 = 1 TO 3
FOR firm2 = 1 TO 3
diff(firm1, firm2) = ABS(cost(scen1, firm1) cost(scen2, firm2))
NEXT firm2
NEXT firm1
FOR firm2 = 0 TO 3
pvtot0(scen2, firm2) = 0
pvtot1(scen2, firm2) = 0
pvtot2(scen2, firm2) = 0
pvtot3(scen2, firm2) = 0
NEXT firm2
sprob = iwgt(scen2)
sprob3 = sprob / 6#
ATTACHMENT M
PAGE 11 OF 14
GOSUB PVADD3:
RETURN
"***** END OF PVadd SUBMODULE *****
PVADD3:
"This submodule of PVADD adds up point values for transition
from a single scenario (scen1) to a single scenario (scen2), where
scen1 and scen2 both have 3 firms.
FOR o = 1 TO 6
o1 = order(o, 1)
o2 = order(o, 2)
o3 = order(o, 3)
pv = 1
pvtemp = pvmax--diff(1, o1)
IF pvtemp < 0 THEN pvtemp = 0
pv = pv * pvtemp
pvtemp = pvmax--diff(2, o2)
IF pvtemp < 0 THEN pvtemp = 0
pv = pv * pvtemp
pvtemp = pvmax--diff(3, o3)
IF pvtemp < 0 THEN pvtemp = 0
pv = pv * pvtemp
pvtot0(scen2, 0) = pvtot0(scen2, 0) + pv * iprob0 * sprob3
pvtot1(scen2, o1) = pvtot1(scen2, o1) + pv * iprob1 * sprob3
pvtot2(scen2, 02) = pvtot2(scen2, 02) + pv * iprob2 * sprob3
pvtot3(scen2, o3) = pvtot3(scen2, 03) + pv * iprob3 * sprob3
NEXT o
RETURN
"***** END OF PVadd3 SUBMODULE *****
PVADJUST:
"This module adjusts computed point values (pv)
" to reflect true probability measures (prob2).
pvtota10 = 0
pvtotal1 = 0
pvtota12 = 0
pvtota13 = 0
FOR scen = 1 TO 35
FOR firm2 = 0 TO 3
pvtota10 = pvtota10 + pvtot0(scen, firm2)
pvtotal1 = pyrotal1 + pvtot1(scen, firm2)
ATTACHMENT M
PAGE 12 OF 14
pvtota12 = pvtota12 + pvtot2(scen, firm2)
pvtota13 = pvtota13 + pvtot3(scen, firm2)
NEXT firm2
NEXT scen
ratio0 = 0
ratio1 = 0
ratio2 = 0
ratio3 = 0
20 IF pvtota10 = 0 THEN 21
ratio0 = prob1(scen1, 0) / pvtota10
21 IF pvtotal1 = 0 THEN 22
ratio1 = prob1(scen1, 1) / pyrotal1
22 IF pvtota12 = 0 THEN 23
ratio2 = prob1(scen1, 2) / pvtota12
23 IF pvtota13 = 0 THEN 24
ratio3 = prob1(scen1, 3) / pvtota13
24 REM
FOR scen = 1 TO 35
FOR firm2 = 0 TO 3
pvtemp = pvtot0(scen, firm2) * ratio0
pvtemp = pvtemp + pvtot1(scen, firm2) * ratio1
pvtemp = pvtemp + pvtot2(scen, firm2) * ratio2
pvtemp = pvtemp + pvtot3(scen, firm2) * ratio3
prob2(scen, firm2) = prob2(scen, firm2) + pvtemp
NEXT firm2
NEXT scen
RETURN
"***** END OF PVadjust SUBMODULE *****
MSEXITS:
"This submodule determines which
[[Page 29185]]
prob2(s,f) and cost(s,f)
numbers imply zero market share for Microsoft.
Where this occurs for f>0 (MS still in market),
the probability values are transferred
to f=0 (Microsoft not in market).
The criterion for exit is that the firm in question
has very high short-run costs.
FOR scen = 1 TO 35
FOR firm = 1 TO 3
IF cost(scen, firm) > 4.999 THEN
ATTACHMENT M
PAGE 13 OF 14
prob2(scen, 0) = prob2(scen, 0) + prob2(scen, firm)
prob2(scen, firm) = 0
END IF
NEXT firm
NEXT scen
RETURN
"***** END OF MSexits SUBMODULE *****
PRINTPROBT:
"This submodule prints the last iteration (presumed
convergence)
" computed for the the transition weights for each scenario.
PRINT #2, "Iter "; "Scen ";
PRINT #2, "Init-weight(0) "; "Prob1(target)
"; "Prob2(result)
"; "Init-weight(1) "
FOR scen= 1 TO 35
PRINT #2, USING "#####"; iter;
scen;
PRINT #2, USING ;###" iwgt0(scen); prob1(scen,
0); prob2(scen, 0); iwgt(scen)
NEXT scen
RETURN
"***** END OF PrintProbT SUBMODULE *****
PRINTPROB0:
"This submodule prints the probabilities for scenario zero.
PRINT #2, "Iter "; "Scen ";
PRINT #2, "Prob(firm0) "; "Prob(firm1)
"; "Prob (firm2)
PRINT #2, "Prob(firm3)
scen = 0
PRINT #2, USING "#####"; iter;
scen0;
FOR firm = 0 TO 3
PRINT #2, USING #"; prob1(scen, firm);
NEXT firm
PRINT #2,
RETURN
"***** END OF PrintProb0 SUBMODULE *****
PRINTPROB:
"This submodule prints the probabilities for each subsequent
" scenario and MS firm number.
FOR scen= 1 TO 35
ATTACHMENT M
PAGE 14 OF 14
PRINT #2, USING "#####"; iter;
scen;
FOR firm = 0 TO 3
PRINT #2, USING #####"; prob2(scen,
firm);
NEXT firm
PRINT #2,
NEXT scen
RETURN
"***** END OF PrintProb SUBMODULE *****
TRANSFERPROB:
"This submodule transfers the prob2 values to prob1,
" so that the next transition iteration can proceed.
FOR scen = 0 TO 35
FOR firm = 0 TO 3
prob1(scen, firm) = prob2(scen, firm)
NEXT firm
NEXT scen
RETURN
"***** END OF TransferProb SUBMODULE *****
"**********END OF Program "MS2ProbA.bas"
.**********
ATTACHMENT N
PAGE 1 OF 11
Attachment N.
"BASIC Program .MS3ProbR.bas".
"Program Number 3 in a series of six programs
"designed to simulate alternative antitrust
"remedies for the Microsoft software industry.
"Copyright, January 23, 2002, Carl Lundgren.
" This program, "MS3ProbR.bas", computes the
probabilites
"associated with each scenario, as the industry transitions
"from a particular starting point, and gradually converges
"towards a long-run stochastic equilibrium.
"This program assigns probabilities for equilibria consisting
"of two Relative Profit Maximizing ("RPM") firms,
along with
"such Absolute Profit Maximizing "APM" firms as
may be involved
"in the transitions. The equilibria automatically convert to
"APM equilibria if one or both RPH firms exits the industry.
"The program uses three different speeds (speed=1,2,3) for the
transition.
"Probability files are outputted for the one starting point
"(msfirms=2), and each transition speed (speed=1,2,3).
" This program is similar to "MS2ProbA.bas",
"since it computes probabilites associated with each scenario,
"for a total of 11 transition periods.
"This program differs from "MS2ProbA.bas",
"because it assigns probabilities for equilibria consisting
"of both RPM and APM firms, rather than APM firms only.
"This program is more complex than "MS2ProbA.bas"
"because it must simultaneously track the rankings
"of two Microsoft-successor firms simultaneously.
" This program calculates transition probabilities
"where Microsoft starts as two firms, and simultaneously
"tracks the outcomes and rankings for both firms.
" The parameters controlling the transition speed
"(pvmax in submodule InitProb10) are supplied by the user.
"The program reads in 35 possible cost structures
"for the industry, each with 3 firms.
"The program assigns probabilities for each scenario,
"and also tracks whether Microsoft #1 is ranked as
"firm 1, 2, or 3, or is firm 0 (with zero market share).
ATTACHMENT N
PAGE 2 OF 11
"Likewise, the program tracks whether Microsoft #2 is
"ranked as firm 1, 2, or 3, or is firm 0.
DEFDBL A-Z
DIM pvtot(35, 15), prob1t(35, 15), prob2r(35, 15)
DIM diff(3, 3), iwgt(35), cost(35, 3)
"CONTROL MODULE
CLS
timex = TIMER
"This section calls the main module 3 times.
"This control module chooses speed for cost shifts:
"speed = 1 "Slow speed for cost shifts.
"speed = 2 "Moderate speed for cost shifts.
"speed = 3 "High speed for cost shifts.
FOR speed = 1 TO 3
GOSUB MAINMODULE:
NEXT speed
PRINT TIMER--timex
END
MAINMODULE:
IF speed = 1 THEN pvmax = 1.5 "Slow speed for cost shifts.
IF speed = 2 THEN pvmax = 2.5 "Moderate speed for cost shifts.
IF speed = 3 THEN pvmax = 4.5 "High speed for cost shifts.
GOSUB FILENAMES: "Assign file names to input/output files.
GOSUB SCENREAD: "Read in scenario costs.
GOSUB ORDERREAD: "Read in ordering list.
GOSUB ORDERRPMREAD: "Read in orderRPM list.
GOSUB READIWGT: "Read in values for transition weights.
PRINT "Computing transitions from MS=2 RPM firms:"
msfirms = 2
iter = 0
GOSUB INITIALIZER: "Microsoft split into 2 RPM firms.
iter = 1
GOSUB TRANSITOR:
GOSUB PRINTPROBR:
FOR iter = 2 TO 10
GOSUB TRANSFERPROBR:
GOSUB TRANSITIR:
GOSUB PRINTPROBR:
ATTACHMENT N
PAGE 3 OF 11
NEXT iter
CLOSE #2, #3
CLOSE
RETURN
"***** END OF MAIN MODULE *****
FILENAMES:
costs =
"c:-bsbasic-bs
ms--sim-bscostlist.txt"
"Input scenario costs
orders =
"c:-bsbasic-bs
ms--sim-bsordering.txt"
"Input firm re-orderings
orderrpm$ =
"c:-bsbasic-bs
ms--sim-bsorderrpm.txt"
"Input RPM firm-pair
re-orderings
prob0$ =
"c:-bsbasic-bs
ms--sim-bsout-bs
prob00.txt"
[[Page 29186]]
"Input 2 RPM firms I- weight probs
probr$ =
"c:-bsbasic-bs
ms--sim-bsout-bs
probr0.txt" "Output 2 RPM firms
transition probs
IF speed = 1 THEN sp$ = "1"
IF speed = 2 THEN sp$ = "2"
IF speed = 3 THEN sp$ = "3"
replaces = sp$ MID$(prob0$, 26, 1) = replaces
MID$(probr$, 26, 1) = replaces
RETURN
"***** END OF FileNames SUBMODULE *****
READIWGT:
"This submodule reads in the transition weights (iwgt)
" previously computed by the "MS2ProbA.bas"
program.
OPEN prob0$ FOR INPUT AS #1
LINE INPUT #1, temps
FOR scen = 1 TO 35
INPUT #1, iter2, scen2, iwgt0, prob1scen, prob2scen,
iwgt(scen)
IF scen2 <> scen THEN PRINT "Scenario mismatch:";
scen; scen2
NEXT scen
CLOSE #1
RETURN
"***** END OF ReadIwgt SUBMODULE *****
INITIALIZER:
"Submodule to initialize Microsoft split into 2 RPM firms.
ATTACHMENT N
PAGE 4 OF 11
GOSUB INITPROB1R:
OPEN probr$ FOR OUTPUT AS #2
GOSUB PRINTPROBOR:
RETURN
"***** END OF InitializeR SUBMODULE *****
INITPROB1R:
"This submodule sets the prob1r variables to zero,
" and then sets initial values for non-zero prob1.
FOR scen1 = 0 TO 35
FOR pair1 = 0 TO 15
prob1r(scen1, pair1) = 0
NEXT pair1
NEXT scen1
"This section sets initial scenario to
"Microsoft is split into two RPM firms,
" Scenario 6, Cost levels 3(MS-1), 4(MS-2), 5(comp).
scen0 = 6
firm1 = 1
firm2 = 2
pair = firm1 * 4 + firm2
prob1r(0, pair) = 1
FOR firm = 1 TO 3
cost(0, firm) = cost(scen0, firm)
NEXT firm
RETURN
"***** END OF InitProb12 SUBMODULE *****
SCENREAD:
"This submodule reads in the scenario costs list.
OPEN costs FOR INPUT AS #1
LINE INPUT #1, dummy$
"cost(s,f) = marginal cost of firm f in scenario s.
"finprob = final probability assumed for scenario s.
"wgt = number of permutations of scenario s.
FOR scen= 1 TO 35
INPUT #1, scen2, L1, L2, L3, L4, L5, wgt, finprob
IF scen <> scen2 THEN PRINT "Scenario mismatch",
scen, scen2
INPUT #1, c1, c2, c3
FOR firm = 1 TO 3
INPUT #1, ctemp
cost(scen, firm) = ctemp / 60#
ATTACHMENT N
PAGE 5 OF 11
NEXT firm
NEXT scen
CLOSE #1
RETURN
"***** END OF SCENREAD SUBMODULE *****
ORDERREAD:
"This Submodule reads in the ordering list,
"which is a list of 6 permutations by which firms 1-3
" may become firms 1-3 in the same or a different order.
OPEN orders FOR INPUT AS #1
LINE INPUT #1, dummy$
"ordnum = number of ordering.
"order(o,f) = ordering number o for firm f,
"the firm number which firm f becomes in ordering o.
DIM order(6, 3)
FOR ordnum = 1 TO 6
INPUT #1, ordnum2
IF ordnum <> ordnum2 THEN PRINT "Order Number
mismatch",
ordnum, ordnum2
FOR firm = 1 TO 3
INPUT #1, order(ordnum, firm)
NEXT firm
NEXT ordnum
CLOSE #1
RETURN
"***** END OF OrderRead SUBMODULE *****
ORDERRPMREAD:
This Submodule reads in the orderRPM list, which is a list of 6
permutations by which firms 1-3 may become firms 1-3 in
the same or a different order.
The orderRPM list simultaneously tracks the cost rankings of two RPM
firms.
OPEN orderrpm$ FOR INPUT AS #1
LINE INPUT #1, dummy$
ordnum = number of ordering.
orderrpm(o,f) = ordering number o for pair of firms p,
the firm-pair number to which the firm-pair p
becomes in ordering o.
p is firm-pair where p=4*firm1+firm2.
Firm1 and firm2 take on values (0, 1, 2, 3).
MTC-00030631--0133
ATTACHMENT N
PAGE 6 OF 11
DIM orderrpm(6, 15)
FOR ordnum = 1 TO 6
INPUT #1, ordnum2
IF ordnum <> ordnum2 THEN PRINT "Order Number
mismatch",
ordnum, ordnum2
FOR pair--0 TO 15
INPUT #1, orderrpm(ordnum, pair)
NEXT pair
NEXT ordnum
CLOSE #1
RETURN
"***** END OF OrderRPMread SUBMODULE *****
TRANSITOR:
This submodule controls the initial transitions.
Transitions are from scenario zero (scen1)
to the other possible scenarios (scen2).
GOSUB INITPROB2R: "Initialize prob2 variables.
PRINT speed; iter; "*";
scen1 = 0
PRINT ".";
FOR pair1 = 0 TO 15
iprob = prob1r (ecen1, pair1)
IF iprob = 0 THEN 10
FOR scen2 = 1 TO 35
GOSUB PVADDR:
NEXT scen2
GOSUB PVADJUSTR:
10 NEXT pair1
GOSUB MSEXITSR:
PRINT
RETURN
***** END OF Transit0R SUBMODULE *****
TRANSIT1R:
This submodule controls the subsequent transitions.
Transitions are from any scenario (scen1)
to any same or different scenario (scen2).
GOSUB INITPROB2R: "Initialize prob2 variables.
PRINT speed; iter; "*";
FOR scen1 = 1 TO 35
PRINT ".";
MTC-00030631--0134
ATTACHMENT N
PAGE 7 OF 11
FOR pair1 = 0 TO 15
iprob = prob1r(scen1, pair1)
IF iprob = 0 THEN 11
FOR scen2 = 1 TO 35
GOSUB PVADDR:
NEXT scen2
GOSUB PVADJUSTR:
11 NEXT pair1
NEXT scen1
GOSUB MSEXITSR;
PRINT
RETURN
***** END OF Transit1R SUBMODULE *****
INITPROB2R:
This submodule of TRANSIT sets the prob2r variables to zero.
FOR scen2 = 0 TO 35
FOR pair2 = 0 TO 15
prob2r(scen2, pair2) = 0
NEXT pair2
NEXT scen2
RETURN
***** END OF InitProb2R SUBMODULE *****
PVADDR:
This submodule initializes the variables in preparation
for submodule PVADD3R,
which adds up point values (pv) for transition
from a single scenario (scen1) and firm pair (pair1)
to a single scenario (scen2) and multiple
[[Page 29187]]
pairs (pair2).
pvtot(s,p) = point value for probability of transition
from current scenario and current MS firm pair
to scenario s and to MS firm pair p.
FOR firm1 = 1 TO 3
FOR firm2 = 1 TO 3
diff(firm1, firm2) = ABS(cost(scen1, firm1)--cost(scen2,
firm2) )
NEXT firm2
NEXT firm1
FOR pair2 = 0 TO 15
pvtot(scen2, pair2) = 0
ATTACHMENT N
PAGE 8 OF 11
NEXT pair2
sprob = iwgt(scen2)
sprob3 = sprob / 6#
GOSUB PVADD3R:
RETURN
***** END OF PVaddR SUBMODULE *****
PVADD3 R:
This submodule of PVADDR adds up point values for transition from a
single scenario (seen1) and firm pair (pair1) to a single scenario
(scen2) and multiple firm pairs (pair2).
FOR o = 1 TO 6
o1 = order(o, 1)
o2 = order(o, 2)
o3 = order(o, 3)
pv = 1
pvtemp = pvmax--diff(1, o1)
IF pvtemp < 0 THEN pvtemp = 0
pv = pv * pvtemp
pvtemp = pvmax--diff(2, o2)
IF pvtemp < 0 THEN pvtemp = 0
pv = pv * pvtemp
pvtemp = pvmax--diff(3, o3)
IF pvtemp < 0 THEN pvtemp = 0
pv = pv * pvtemp
orpm = orderrpm(o, pair1)
pvtot(scen2, orpm) = pvtot(scen2, orpm) + pv * iprob * sprob3
NEXT o
RETURN
***** END OF PVadd3R SUBMODULE *****
PVADJUSTR:
This module adjusts computed point values (pv) to reflect true
probability measures (prob2).
pvtotal = 0
FOR scen = 1 TO 35
FOR pair2 = 0 TO 15
pvtotal = pvtotal + pvtot(scen, pair2)
NEXT pair2
EXT scen
ATTACHMENT N
PAGE 9 OF 11
ratio = 0
20 IF pvtotal = 0 THEN 21
ratio = prob1r(scen1, pair1) / pvtotal
21 REM
FOR scen= 1 TO 35
FOR pair2 = 0 TO 15
probtemp = pvtot(scen, pair2) * ratio
prob2r(scen, pair2) = prob2r(scen, pair2) + probtemp
NEXT pair2
NEXT scen
RETURN
***** END OF PVadjustR SUBMODULE *****
MSEXITSR:
This submodule determines which prob2r(s,f) and cost(s,f) numbers
imply exiting the industry for Microsoft or a Microsoft successor.
Where this occurs for firm1>0 (MS #1 still in market) or for
firm2>0 (MS #2 still in market), the probability values are
transferred respectively to firm1=0 (Microsoft #1 not in market)
or to firm2=0 (Microsoft #2 not in market).
The criterion for exit is that the firm in question has very high
short-run costs.
FOR scen = 1 TO 35
FOR firm1 = 1 TO 3
FOR firm2 = 0 TO 3
pair = firm1 * 4 + firm2
IF cost(scen, firm1) > 4.999 THEN
pair0 = firm2'firm1=0
prob2r(scen, pair0) = prob2r(scen, pair0) + prob2r(scen,
pair)
prob2r(scen, pair) = 0
END IF
NEXT firm2
NEXT firm1
FOR firm1 = 0 TO 3
FOR firm2 = 1 TO 3
pair = firm1 * 4 + firm2
IF cost(scen, firm2) > 4.999 THEN
pair0 = firm1 * 4 "firm2=0
ATTACHMENT N
PAGE 10 OF 11
prob2r(scen, pair0) = prob2r(scen, pair0) + prob2r(scen, pair)
prob2r(scen, pair) = 0
END IF
NEXT firm2
NEXT firm1
NEXT scen
RETURN
***** END OF MSexitsR SUBMODULE *****
PRINTPROB0R:
This submodule prints the probabilities for each firm-pair number
for scenario zero.
PRINT #2, "Iter "; "Scen "; "Firm
";
PRINT #2, "Prob(firm0) "; "Prob(firm1)
"; "Prob(firm2) ";
PRINT #2, "Prob(firm3) "
seen = 0
FOR firm1 m 0 TO 3
PRINT #2, USING "#####"; iter;
scen0; firm1;
FOR firm2 = 0 TO 3
pair = 4 * firm1 + firm2
PRINT #2, USING
"##.###########
##"; prob1r(scen, pair);
NEXT firm2
PRINT #2,
NEXT firm1
RETURN
***** END OF PrintProb0 SUBMODULE *****
PRINTPROBR:
This submodule prints the probabilities for each MS firm-pair number
for each subsequent scenario.
FOR scen= 1 TO 35
FOR firm1 = 0 TO 3
PRINT #2, USING "#####"; iter;
scen; firm1;
FOR firm2 = 0 TO 3
pair = 4 * firm1 + firm2
PRINT #2, USING
###.###########
##"; prob2r(scen, pair);
NEXT firm2
PRINT #2,
NEXT firm1
ATTACHMENT N
PAGE 11 OF 11
NEXT scen
RETURN
***** END OF PrintProb SUBMODULE *****
TRANSFERPROBR:
This submodule transfers the prob2 values to prob1, so that the next
transition iteration can proceed.
FOR scen = 0 TO 35
FOR pair = 0 TO 15
prob1r(scen, pair) = prob2r(scen, pair)
NEXT pair
NEXT scen
RETURN
***** END OF TransferProbR SUBMODULE *****
**********END OF Program "MS3ProbR.bas".**********
ATTACHMENT O
PAGE 1 OF 14
Attachment O.
BASIC Program "MS4TranA.bas".
Program Number 4 in a series of six programs designed to simulate
alternative antitrust remedies for the Microsoft software industry.
Copyright, January 23, 2002, Carl Lundgren.
This program, "MS4TranA.bas", uses the probability data
computed by "MS2ProbA.bas" to compute Consumer Surplus
and Profits for both Microsoft and Microsoft's competitors.
In transition period zero (iter=0), Microsoft (and its successor
firms after divestiture) are assumed to have no competitors.
In subsequent transition periods (iter=1 to 10), Microsoft has
(potentially) one or more competitors.
This program only calculates Absolute Profit Maximizing
("APM") equilibria.
The program uses the computed probabilities for each scenario that
was previously outputted by the "MS2ProbA.bas" program
as various "PROB....txt" files.
This program outputs as "TRAN....txt" files the computed
transition factors for several alternative timepaths for the
software industry, under several alternative assumptions.
These transition factors are computed as a fraction of the revenues
which Microsoft would earn if it remained a monopoly. The
assumptions for the transitions are:
(Tran1) Strong conduct remedy & Lawful Path: Microsoft is not
broken up, but competitive conditions start in transition period
zero. A companion program, "MS6Summ.bas", uses the
transition factors to compute the lawful path (starting in 1995) and
a conduct remedy (starting in 2002).
Tran2-Tran3) APM Structural remedies: Microsoft is broken up into
two or three competing APM firms, beginning in transition period
zero. The companion program uses these transition factors to compute
the effects of structural remedies starting in 2005.
[[Page 29188]]
The 225 outputted transition (TRAN....txt) files are computed for
three speeds of transition (speed=1,2,3),
ATTACHMENT O
PAGE 2 OF 14
five cost ratios for short-run cost (cratio=1,2,3,4,5), five
assumptions concerning the portion of long-run costs allocated to
fixed costs (port=0,1,2,3,4), and three starting points
(msfirms=1,2,3).
DEFDBL A-Z
DIM proh1(35, 3), herf(35), mshare(35, 3), pnum(35)
DIM quant(35, 3), cost(35, 3), pv(35, 3), price(35)
DIM pims(35, 3), picomp(35, 3)
CONTROL MODULE
CLS
timex = TIMER
GOSUB SCENREAD:
This section calls the main module 225 times.
This control module chooses market tendency:
cratio=1 Ratio for low/high short-run cost is 0.2500 (1/4.0).
cratio=2 Ratio for low/high short-run cost is 0.3333 (1/3.0).
cratio=3 Ratio for low/high short-run cost is 0.4000 (1/2.5).
cratio=4 Ratio for low/high short-run cost is 0.5000 (1/2.0).
cratio=5 Ratio for low/high short-run cost is 0.6667 (1/1.5).
This control module chooses speed for market share shifts:
speed = 1 Slow speed for market share shifts.
speed = 2 Moderate speed for market share shifts.
speed = 3 High speed for market share shifts.
This control module chooses # of msfirms at iteration zero.
msfirms = 1 Microsoft starts as a monopoly.
msfirms = 2 Microsoft split into 2 APM firms.
msfirms = 3 Microsoft split into 3 APM firms.
This control module chooses proportion of long-run cost which is
assumed to be a fixed cost.
port = 0 Fixed cost is 0% of long-run cost.
port = 1 Fixed cost is 25% of long-run cost.
port = 2 Fixed cost is 50% of long-run cost.
port = 3 Fixed cost is 75% of long-run cost.
port = 4 Fixed cost is 100% of long-run cost.
ATTACHMENT O
PAGE 3 OF 14
FOR cratio = 1 TO 5
FOR speed = 1 TO 3
FOR port = 0 TO 4
FOR msfirms = 1 TO 3
GOSUB MAINMODULE:
NEXT msfirms
NEXT port
NEXT speed
NEXT cratio
PRINT TIMER--timex
END
MAINMODULE:
GOSUB FILENAMES: "Assign file names to input/output files.
GOSUB INITIALIZE:
FOR iter = 1 TO 10
GOSUB PROBREAD:
GOSUB PRINTTRAN:
NEXT iter
CLOSE
RETURN
***** END OF MAIN MODULE *****
FILENAMES:
prob$ =
"c:-bsbasic-bs
ms--sim-bsout-bs
prob00.txt" "Input transition
probabilities
trans =
"c:-bsbasic-bs
ms--sim-bsout-bs
tran0000.txt" "Output transition factors
IF cratio = 1 THEN crt$ = "1"
IF cratio = 2 THEN crt$ = "2"
IF cratio = 3 THEN crt$ = "3"
IF cratio = 4 THEN crt$ = "4"
IF cratio = 5 THEN crt$ = "5"
IF speed = 1 THEN sp$ = "1"
IF speed = 2 THEN sp$ = "2"
IF speed = 3 THEN sp$ = "3"
IF msfirms = 1 THEN msf$ = "1"
IF msfirms = 2 THEN msf$ = "2"
IF msfirms = 3 THEN msf$ = "3"
IF port = 0 THEN prt$ = "0"
IF port = 1 THEN prt$ = "1"
ATTACHMENT O
PAGE 4 OF 14
IF port = 2 THEN prt$ = "2"
IF port = 3 THEN prt$ = "3"
IF port = 4 THEN prt$ = "4"
replacep$ = msf$ + sp$
replacet$ = msf$ +crt$ + sp$ + prt$
MID$(prob$, 25, 2) = replacep$
MID$(tran$, 25, 4) = replacet$
PRINT replacet$; "";
RETURN
***** END OF FileNames SUBMODULE *****
INITIALIZE:
Submodule to perform various initialization tasks.
OPEN prob$ FOR INPUT AS #2
OPEN trans FOR OUTPUT AS #3
GOSUB ZEROPROB:
GOSUB PROBREAD0:
GOSUB SCENREAD: "Read scenario list.
GOSUB COSTCOMPUTE: "Compute costs.
GOSUB PQZERO: "Iteration 0 prices, quantities, profits &
Consumer
Surplus.
GOSUB PQCOMPUTE: "Compute prices, quantities, profits &
Consumer Surplus.
GOSUB HHI: "Compute HHI and market shares.
GOSUB PROFITS: "Assign profits to MS and competitors.
GOSUB PRINTTRAN0: "Print transition files.
RETURN
***** END OF Initialize SUBMODULE *****
ZEROPROB:
This submodule sets the prob1(0, .) and mshare(0, .) variable values
to zero.
FOR firm1 = 0 TO 3
prob1(0, firm1) = 0
NEXT firm1
RETURN
***** END OF ZEROPROB SUBMODULE *****
SCENREAD:
This submodule reads in the scenario costs list.
ATTACHMENT O
PAGE 5 OF 14
costs =
"c:-bsbasic-bs
ms--sim-bscostlist.txt"
"Input scenario costs
OPEN costs FOR INPUT AS #1
LINE INPUT #1, dummy$
cost(s,f) = short-run marginal cost of firm f in scenario s.
finprob(s) = final probability assumed for scenario s.
wgt(scen) = number of permutations of scenario s.
FOR scen = 1 TO 35
INPUT #1, scen2, L1, L2, L3, L4, L5, wgt, finprob
IF scen <> scen2 THEN PRINT "Scenario mismatch",
scen, scen2
INPUT #1, c1, c2, c3
FOR firm = 1 TO 3
INPUT #1, pv(scen, firm)
NEXT firm
NEXT scen
CLOSE #1
RETURN
***** END OF SCENREAD SUBMODULE *****
COSTCOMPUTE:
Submodule to compute short-run costs, long-run costs, and assumed
elasticity of demand.
This section computes parameters for long-run costs under the
assumption that each firm has the same long-run cost function.
Assume that one portion of Microsoft's long-run cost (LRC) is a
long-run fixed cost (FC), while the other portion is a long-run
variable cost (VC), which is proportional to output.
1rc = .1855 "computed as MS long-run cost divided by MS
monopoly revenue.
IF port = 0 THEN portion = 01!
IF port = 1 THEN portion = .25
IF port = 2 THEN portion = .5
IF port = 3 THEN portion = .75
IF port = 4 THEN portion = 1!
fc = 1rc * portion
vc = 1rc * (1--portion)
This section computes elasticity of demand (Elas) at monopoly profit
maximum, as a function of marginal cost, which is composed of short-
run marginal cost (SRC)
ATTACHMENT O
PAGE 6 OF 14
plus long-run variable cost (VC).
src = .4101 "computed as MS short-run cost divided by MS
monopoly revenue.
mc= src + vc
elas = 1/(mc--1)
elasminus = elas--1
elasplus = elas + 1
A = elasminus / elas "Intercept of linear demand curve with
price axis.
b = -1/elas "Slope of linear demand curve.
cbase = src "Base level of short-run marginal cost (cost level
2).
logcbase = LOG(cbase / (A--vc--cbase)) "Chase
converted to log-ratios.
This section computes short-run costs and marginal costs for a given
cost spread.
IF cratio = 1 THEN cspread = .950980935#
IF cratio = 2 THEN cspread = .748669813#
IF cratio = 3 THEN cspread = .622288438#
IF cratio = 4 THEN cspread = .469161475#
IF cratio = 5 THEN cspread = .273626703#
FOR scen = 1 TO 35
FOR firm = 1 TO 3
pvtemp = (pv(scen, firm)--180) / 120
logpv = logcbase + pvtemp * cspread
pvratio = EXP(logpv)
[[Page 29189]]
cost(scen, firm) = vc + (A--vc) * pvratio / (1 + pvratio)
NEXT firm
NEXT scen
RETURN
***** END OF CostCompute SUBMODULE *****
PQZERO:
Submodule to compute prices, quantities, profits, and consumer
surplus for selected scenarios, for iteration zero, where 1, 2, or 3
Microsoft APM firms are assumed initially to have no competitors.
Pi(s,f) is long-run profit for firm f within scenario s.
CS(s) is Consumer Surplus parameter for scenario s.
DIM cs(35), pi(35, 3)
num = msfirms
ATTACHMENT O
PAGE 7 OF 14
costsum = 0
FOR firm = 1 TO num
cost(0, firm) = cost(scen0, firm)
costsum = costsum + cost(0, firm)
NEXT firm
price = (A + costsum) /(num + 1)
qtot = 0
FOR firm = 1 TO num
qtemp = (price--cost(0, firm)) / b
qtot = qtot + qtemp
quant(0, firm) = qtemp
pitemp = (price--cost(0, firm)) * qtemp
pitemp = pitemp--fc
pi(0, firm) = pitemp
NEXT firm
FOR firm = num + 1 TO 3
quant(0, firm) = 0
pi(0, firm) = 0
NEXT firm
cs(0) = qtot * (A--price) / 2
pdummy = 1 "Is last firm producing?
IF quant(0, num)< 0 THEN pdummy = 0
IF pi(0, num) < 0 THEN pdummy = 0
IF pdummy = 0 THEN scen = 0
IF msfirms = 3 THEN GOSUB PQSUB2:
IF msfirms = 2 THEN GOSUB PQSUB1:
IF msfirms = 1 THEN GOSUB PQSUB0:
END IF
price(0) = price
pnum(0) = num
RETURN
***** END OF PQzero SUBMODULE *****
PQCOMPUTE:
Submodule to compute prices, quantities, profits, and consumer
surplus for each scenario.
Pi(s,f) is long-run profit for firm f within scenario s.
CS(s) is Consumer Surplus parameter for scenario s.
FOR scen = 1 TO 35
num = 3
costsum = 0
ATTACHMENT O
PAGE 8 OF 14
FOR firm = 1 TO num
costsum = costsum + cost(scen, firm)
NEXT firm
price = (A + costsum) /(num + 1)
qtot = 0
FOR firm = 1 TO num
qtemp = (price--cost(seen, firm)) / b
qtot = qtot + qtemp
quant(scen, firm) = qtemp
pitemp = (price--cost(scen, firm)) * qtemp
pitemp = pitemp--fc
pi(scen, firm) = pitemp
NEXT firm
cs(scen) = qtot * (A--price) / 2
pdummy = 1 "Is last firm producing?
IF quant(scen, num) < 0 THEN pdummy = 0
IF pi(scen, num) < 0 THEN pdummy = 0
IF pdummy = 0 THEN GOSUB PQSUB2:
price(scen) = price
pnum(scen) = num
NEXT scen
RETURN
***** END OF PQcompute SUBMODULE *****
PQSUB2:
Submodule of PQcompute/PQsub4/PQsub3 submodule, to compute prices
and quantities when fewer than 3 firms are producing.
num = 2
quant(scen, num + 1) = 0
pi(scen, num + 1) = 0
costsum = 0
FOR firm = 1 TO num
costsum = costsum + cost(scen, firm)
NEXT firm
price = (A + costsum) /(num + 1)
qtot = 0
FOR firm = 1 TO num
qtemp = (price cost(scen, firm)) / b
qtot = qtot + qtemp
quant(scen, firm) = qtemp
pitemp = (price--cost(scen, firm)) * qtemp
ATTACHMENT O
PAGE 9 OF 14
pitemp = pitemp--fc
pi(scen, firm) = pitemp
NEXT firm
cs(scen) = qtot * (A--price) / 2
pdummy = 1 "Is last firm producing?
IF quant(scen, num) < 0 THEN pdummy = 0
IF pi (scen, num) < 0 THEN pdummy = 0
IF pdummy = 0 THEN GOSUB PQSUB1:
RETURN
.***** END OF PQsub2SUEMODULE *****
PQSUB1:
"Submodule of PQcompute/PQsub4/PQsub3/PQsub2 submodule,
"to compute prices and quantities " when fewer than 2
firms are producing.
num = 1
quant(scen, hum + 1) = 0
pi(scen, hum + 1) = 0
costsum = 0
FOR firm = 1 TO num
costsum = costsum + cost(scen, firm)
NEXT firm
price = (A + costsum) / (hum + 1)
qtot = 0
FOR firm = 1 TO num
qtemp = (price- cost(scen, firm)) / b
qtot = qtot + qtemp
quant(scen, firm) = qtemp
pitemp = (price--cost(scen, firm) ) * qtemp
pitemp = pitemp fc
pi (scen, firm) = pitemp
NEXT firm
cs(scen) = qtot * (A--price) / 2
pdummy = I "Is last firm producing?
IF quant(scen, num)< 0 THEN pdummy = 0
IF pi(scen, num)< 0 THEN pdummy = 0
IF pdummy = 0 THEN GOSUB PQSUB0:
RETURN
"***** END OF PQsub1 SUBMODULE *****
PQSUB0:
ATTACHMENT 0
PAGE 10 OF 14
"Submodule of PQcompute/PQsub4,3,2,1 submodules, " to
compute prices and quantities " when no firms are producing.
num = 0
quant(scen, hum + 1) = 0
pi(scen, hum + 1) = 0
price = A
cs (scen) = 0
RETURN
"***** END OF PQsub0 SUBMODULE *****
HHI:
"Submodule to compute Herfindahl-Herschmann Indices "for
each given cost spread.
FOR scen = 0 TO 35 qtot = 0
FOR firm = 1 TO 3
qtot = qtot + quant(scen, firm)
NEXT firm
IF qtot = 0 THEN
HHI = 10000
mshare(scen, 1) = 1
mshare(scen, 2) = 0
mshare(scen, 3) = 0
GOTO 333
END IF
HHI = 0
FOR firm = 1 TO 3
mtemp = quant(scen, firm) / qtot
mshare(scen, firm) = mtemp
HHI = HHI + mtemp * mtemp * 10000
NEXT firm
herf(scen) = HHI
333 NEXT scen
RETURN
"***** END OF HHI SUBMODULE *****
PROFITS:
"This submodule assigns the previously computed " long-
run business profits for each firm " to Microsoft and
Microsoft's competitors.
ATTACHMENT O
PAGE 11 OF 14
"PiMS(s,f) = Microsoft's profit in scenario s, "assuming
that Microsoft is firm f.
"PiComp(s,f) = Competitors" profits in scenario s,
"assuming that Microsoft is firm f.
"If f=0, Microsoft has zero market share.
FOR scen = 0 TO 35
pitot = 0
FOR firm = 1 TO 3
pitot = pitot + pi(scen, firm)
NEXT firm
pims(scen, 0) = 0
picomp(scen, 0) = pitot
FOR firm = 1 TO 3
pitemp = pi (scen, firm)
pitemp = pitemp * msfirms
pins(scen, firm) = pitemp
picomp(scen, firm) = pitot pitemp
NEXT firm
NEXT scen
"Microsoft profit (pitemp) is multiplied by the number of
Microsoft firms.
"When MSfirms=1, all profit calculations are accurate.
"When MSfirms=2 or 3, pims is accurate, but picomp is not
accurate
[[Page 29190]]
for "particular scenario/firm #, because this APM program
"does not simultaneously track more than one Microsoft firm.
"However, probability-weighted averages over all firm #s
"for a given scenario are an accurate average for both pims
and picomp.
RETURN
"***** END OF PROFITS SUBMODULE *****
PRINTTRAN0:
"This submodule prints the transition factors for iteration
zero, including average consumer surplus, average profits for
Microsoft and its competitors, average market share for Microsoft,
the industry-wide Herfindahl-Hershman Index (HHI), and the average
number of main firms in the industry.
"These transition factors must be multiplied by Microsoft's
"annual monopoly revenues to determine dollar values.
cstot = 0
ATTACHMENT O
PAGE 12 OF 14
pimstot = 0
picomptot = 0
mktshare = 0
herfindahl = 0
firmnum = 0
scen = 0 "Choose scen=scen0 to assume competitors in period 0.
FOR firm = 0 TO 3
tempprob = prob1 (0, firm)
cstot = cstot + cs(scen) * tempprob
pimstot = pimstot + pims(scen, firm) * tempprob
picomptot = picomptot + picomp(scen, firm) * tempprob
mktshare = mktshare + mshare(scen, firm) * tempprob
herfindahl = herfindahl + herf(scen) * tempprob
firmnum = firmnum + pnum(scen) * tempprob
NEXT firm
PRINT #3, "Iter";
PRINT #3, "ConsumerSurpls ";
PRINT #3, "Profit (MS) ";
PRINT #3, "Profit(comp) ";
PRINT #3, "MktShare(1-MS)";
PRINT #3, "MktShare (n-MS) ";
PRINT #3, "Herfindahl ";
PRINT #3, "# firms
PRINT #3, USING "###"; 0;
PRINT #3, USING
"###.##########
###,,; cstot; pimstot; picomptot;
PRINT #3, USING
"####.#########
##,,; mktshare * 100; msfirms *
mktshare * 100;
PRINT #3, USING
"######.#######
##.; herfindahl;
PRINT #3, USING
"##.###########
##.; firmnum
RETURN
"***** END OF PRINTTRAN0 SUBMODULE *****
PRINTTRAN:
This submodule prints the transition factors for each subsequent
iteration, including average consumer surplus, average profits for
Microsoft and its competitors, average market share for Microsoft,
the industry-wide Herfindahl-Hershman Index (HHI), and the average
number of main firms in the industry.
These transition factors must be multiplied by Microsoft's annual
monopoly revenues to determine dollar values.
cstot = 0
ATTACHMENT 0
PAGE 13 OF 14
pimstot = 0
picomptot = 0
mktshare = 0
herfindahl = 0
firmnum = 0
FOR scen = 1 TO 35
FOR firm = 0 TO 3
tempprob = prob1(scen, firm)
cstot = cstot + cs(scen) * tempprob
pimstot = pimstot + pims(scen, firm) * tempprob
picomptot = picomptot + picomp(scen, firm) * tempprob
mktshare = mktshare + mshare(scen, firm) * tempprob
herfindahl = herfindahl + herf(scen) * tempprob
firmnum = firmnum + pnum(scen) * tempprob
NEXT firm
NEXT scen
PRINT #3, USING "###,,; iter;
PRINT #3, USING
"###.##########
###,,; cstot; pimstot; picomptot;
PRINT #3, USING
"####.#########
##,,; mktshare * 100; msfirms *
mktshare * 100;
PRINT #3, USING
"######.#######
##,,; herfindahl;
PRINT #3, USING
,,##.############
#,,; firmnum
RETURN
"***** END OF PRINTTRAN SUBMODULE *****
PROBREAD0:
"Submodule to read iteration 0 transition probabilities.
LINE INPUT #2, temps
INPUT #2, iter2, scen0
IF 0 <> iter2 THEN PRINT "Iteration 0 mismatch:,; 0,
iter2
FOR firm = 0 TO 3
INPUT #2, prob1(0, firm)
NEXT firm
RETURN
"***** END OF PROBREAD0 SUBMODULE *****
PROBREAD:
"Submodule to read subsequent iteration transition
probabilities
FOR scen = I TO 35
INPUT #2, iter2, scen2
IF iter <> iter2 THEN PRINT "Iteration S mismatch:,,;
iter,
ATTACHMENT O
PAGE 14 OF 14
iter2
IF scen <> scen2 THEN PRINT "Scenario S mismatch:,;
scen;
scen2
FOR firm = 0 TO 3
INPUT #2, prob1(scen, firm)
NEXT firm
NEXT scen
RETURN
"***** END OF PROBREAD SUBMODULE *****
"**********END OF Program "MS4TranA.bas,,.**********
ATTACHMENT P
PAGE I of 21
Attachment P.
"BASIC Program "MS5TranR.bas". "Program
Number 5 in a series of six programs "designed to simulate
alternative antitrust "remedies for the Microsoft software
industry.
"Copyright, January 23, 2002, Carl Lundgren.
" This program, "MS5TranR.bas", uses the
probability data "computed by "MS3ProbR.bas" to
compute Consumer Surplus and "Profits for both Microsoft and
Microsoft's competitors.
"In transition period zero (iter=0), Microsoft (and its
"successor firms after divestiture) are assumed to have no
competitors.
"In subsequent transition periods (iter=1 to 10),
"Microsoft has (potentially) one or more competitors.
"This program calculates both Relative Profit Maximizing
("RPM") "and Absolute Profit Maximizing
("APM") equilibria.
" The program uses the computed probabilities for each
"scenario that was previously outputted by the
""MS3ProbR.bas" program as various "PROB
.... txt" files.
" This program outputs as "TRPM .... txt" files
the "computed transition factors for several alternative
timepaths "for the software industry, under several
alternative assumptions.
"These transition factors are computed as a fraction "of
the revenues which Microsoft would earn if it remained "a
monopoly.
" This program computes transition factors "for
alternative timepaths for the software industry, "under the
assumption that Microsoft is split into two firms, "and these
two firms adopt relative profit maximizing (RPM) "incentives
in either a pure or impure form.
"The goal functions for the two RPM firms are:
Goal1 = Profit1--z * Profit2
Goal2 = Profit2 z * Profit1
"All other (non-Microsoft, competitor) firms are assumed
"to have absolute profit maximizing (APM) incentives.
"The assumed values for z in the transitions are:
" TRPM0) The value of z=0.0 "Same as Absolute Profit
ATTACHMENT P
PAGE 2 of 21
Maximizing (APM).
TRPM1) The value of z=0.1 "10% RPM, 90% APM.
TRPM2) The value of z=0.2 "20% RPM, 80% APM.
TRPM3) The value of z=0.3 "30% RPM, 70% APM.
TRPM4) The value of z=0.4 "40% RPM, 60% APM.
TRPM5) The value of z=0.5 "50% RPM, 50% APM.
[[Page 29191]]
TRPM6) The value of z=0.6 "60% RPM, 40% APM.
TRPM7) The value of z=0.7 "70% RPM, 30% APM.
TRPM8) The value of z=0.8 "80% RPM, 20% APM.
TRPM9) The value of z=0.9 "90% RPM, 10% APM.
This program differs from the MS4TranA.bas program in that it
considers only two successor firms for Microsoft, and simultaneously
tracks the rankings of both firms.
The 750 outputted transition (TRPM .... txt) files are computed for
three speeds of transition (speed=l,2,3), five cost ratios for
short-run cost (cratio=l,2,3,4,5), five assumptions concerning the
portion of long-run costs allocated to fixed costs (port=0,1,2,3,4),
ten different values of z
(z = 0.0, 0.1, 0.2, 0.3, 0.4, 0.5, 0.6, 0.7, 0.8, 0.9).
"The starting point for the transitions in this program
"always has Microsoft divided into two RPM firms (msfirms=2).
"An additional feature of the program allows the value of z to
"change in response to circumstances. If zbump=0.0, then z is
fixed, "and does not change in response to circumstances. If
zbump > 0, "then z changes in response to circumstances. In
the program, "z responds to the circumstance that one of the
RPM firms "is not producing, because it is achieving negative
absolute profit.
"In this circumstance, the program automatically "bumps
down" the value "of z for both RPM firms by the amount
of zbump. For example, "if z=0.7 and zbump=0.3, then if one or
both RPM firms would shut down, "then the value of z is
automatically bumped down to z=0.4.
"In many circumstances, this allows both RPM firms to continue
producing.
"The user determines the value of zbump as part of the control
module.
DEFDBL A-Z
ATTACHMENT P
PAGE 3 of 21
DIM problr(35, 15), herf(35, 15), sharems(35, 15), pnum(35, 15)
DIM qtotal(35, 15), cost(35, 3), pv(35, 3), price(35, 15)
DIM pims(35, 15), picomp(35, 15)
DIM cs(35, 15), pi(35, 15)
"CONTROL MODULE
CLS
timex = TIMER
"*****User Determines amount by which z should be bumped down,
if RPM firm2 is not producing when z=zhold(zcount).*****
zbump = 0! "*****User determines zbump.*****
"*****If zbump=0, then z is fixed and never changes.
"*****zbump >= 0. Recommended value is zbump=0.3.****
GOSUB PRINTZCOUNT:
GOSUB SCENREAD:
"This section calls the main module 750 times.
"This control module chooses market tendency:
"cratio=1 "Ratio for low/high short-run cost is 0.2500
(1/4.0) .
"cratio=2 "Ratio for low/high short-run cost is 0.3333
(1/3.0).
"cratio=3 "Ratio for low/high short-run cost is 0.4000
(1/2.5) .
"cratio=4 "Ratio for low/high short-run cost is 0.5000
(1/2.0).
"cratio=5 "Ratio for low/high short-run cost is 0.6667
(1/1.5).
"This control module chooses speed for market share shifts:
"speed = 1 "Slow speed for market share shifts.
"speed = 2 "Moderate speed for market share shifts.
"speed = 3 "High speed for market share shifts.
"In this program, # of msfirms at iteration zero is always
two.
msfirms = 2
"This control module chooses z (weight on rival firm's
profits).
zcount=0 "z = 0.0
zcount=1 z = 0.1
zcount=2 z = 0.2
zcount=3 z = 0.3
zcount=4 z = 0.4
zcount=5 z = 0.5
zcount=6 z = 0.6
zcount=7 z = 0.7
zcount=8 z = 0.8
ATTACHMENT P
PAGE 4 of 21
"zcount=9 "z = 0.9
"This control module chooses proportion of long-run cost
" which is assumed to be a fixed cost.
"port = 0 "Fixed cost is 0% of long-run cost.
"port = I "Fixed cost is 25% of long-run cost.
"port = 2 "Fixed cost is 50% of long-run cost.
"port = 3 "Fixed cost is 75% of long-run cost.
"port = 4 "Fixed cost is 100% of long-run cost.
FOR cratio = 1 TO 5
FOR speed = 1 TO 3
FOR port = 0 TO 4
FOR zcount = 0 TO 9
GOSUB MAINMODULE:
NEXT zcount
NEXT port
NEXT speed
NEXT cratio
PRINT TIMER--timex
END
PRINTZCOUNT:
"This submodule assigns values of z to each zcount, "
and prints these z values for transfer to " the subsequent
"MS6Summ.bas" program.
DIM zhold(9)
zcount$ =
"c:-bsbasic-bs
ms--sim-bsout-bs
zcount.txt" "Output zcount data.
OPEN zcount$ FOR OUTPUT AS #1
PRINT #1, "Zcount Z"
FOR zcount = 0 TO 9
IF zcount = 0 THEN z = 01
IF zcount = I THEN z = .1
IF zcount = 2 THEN z = .2
IF zcount = 3 THEN z = .3
IF zcount = 4 THEN z = .4
IF zcount = 5 THEN z = .5
IF zcount = 6 THEN z = .6
IF zcount = 7 THEN z = .7
IF zcount = 8 THEN z = .8
IF zcount = 9 THEN z = .9
zhold(zcount) = z
PRINT #1, USING "######";
zcount;
PRINT #1, USING
"###.######"; z
ATTACHMENT P
PAGE 5 of 21
NEXT zcount
CLOSE #1
RETURN
"***** END OF PrintZcount SUBMODULE *****
MAINMODULE:
z = zhold(zcount)
GOSUB FILENAMES: "Assign file names to input/output files.
GOSUB INITIALIZE:
FOR iter = I TO 10
GOSUB PROBREAD:
GOSUB PRINTTRAN:
NEXT iter
CLOSE
RETURN
"***** END OF MAIN MODULE *****
FILENAMES:
prob$ = "c:
-bsbasic-bsms-
sim-bsout-bspr
obr0. txt" "Input RPM transition
probabilities
tran$ =
"c:-bsbasic-bs
ms--sim-bsout-bs
tRPM0000.txt" "Output RPM transition factors
IF cratio = I THEN crt$ = "1"
IF cratio = 2 THEN crt$ = "2"
IF cratio = 3 THEN crt$ = "3"
IF cratio = 4 THEN crt$ = "4"
IF cratio = 5 THEN crt$ = "5"
IF speed = 1 THEN sp$ = "1"
IF speed = 2 THEN sp$ = "2"
IF speed = 3 THEN sp$ = "3"
IF zcount = 0 THEN zc$ = "0"
IF zcount = 1 THEN zc$ = "1"
IF zcount = 2 THEN zc$ = "2"
IF zcount = 3 THEN zc$ = "3"
IF zcount--4 THEN zc$ = "4"
IF zcount = 5 THEN zc$ = "5"
IF zcount = 6 THEN zc$ = "6"
IF zcount = 7 THEN zc$ = "7"
IF zcount = 8 THEN zc$ = "8"
IF zcount = 9 THEN zc$ = "9"
IF port = 0 THEN prt$ = "0"
IF port = 1 THEN prt$ = "1"
ATTACHMENT P
PAGE 6 of 21
IF port = 2 THEN prt$ = "2"
IF port = 3 THEN prt$ = "3"
IF port = 4 THEN prt$ = "4"
replacep$ = sp$
replacet$ = zc$ + crt$ + sp$ + prt$
MID$(prob$, 26, 1) = replacep$
MID$(tran$, 25, 4) = replacet$
PRINT replacet$; "";
RETURN
"***** END OF FileNames SUBMODULE *****
INITIALIZE:
"Submodule to perform various initialization tasks.
OPEN prob$ FOR INPUT AS #2
OPEN tran$ FOR OUTPUT AS #3
GOSUB ZEROPROB:
GOSUB PROBREAD0:
GOSUB SCENREAD: "Read scenario list.
[[Page 29192]]
GOSUB COSTCOMPUTE: "Compute costs.
GOSUB PQZERO: "Iteration 0 prices, quantities, profits a
Consumer Surplus.
GOSUB PQCOMPUTE: "Compute prices, quantities, profits &
Consumer Surplus.
GOSUB PRINTTRAN0: "Print transition files.
RETURN
"***** END OF Initialize SUBMODULE *****
ZEROPROB:
"This submodule sets the prob1r(0, .)
" variable values to zero.
FOR pair = 0 TO 15
prob1r(0, pair) = 0
NEXT pair
RETURN
"***** END OF ZeroProb SUBMODULE *****
SCENREAD:
"This submodule reads in the scenario costs list.
cost$ =
"c:-bsbasic-bs