The settlement reached last week between the Department of
Justice and Microsoft, which was designed to enhance competitive
prospects for Microsoft’s rivals and make the workings of Windows
more transparent, has been rejected by several of the US states
which brought the antitrust case. Attorneys General from these
states claim that the proposed agreement includes too many
loopholes to establish a healthy competitive sector.
The Wall Street Journal reports that at least six states have
refused to sign the deal. Massachusetts was one of the first states
to voice criticism of the proposed agreement. Tom Reilly, the
state’s Attorney General said, “the agreement is full of loopholes
and does little more than license Microsoft to crush its
competition. [The settlement] was thrust on the states at the last
minute, under enormous pressure, without enough time to review the
details.”
The actual terms of the settlement are a far cry from the
measures proposed by Microsoft’s rivals earlier in the case, some
of whom had hoped to break up the company. The terms of last week’s
agreement can be summarised as follows:
Enhancing disclosure
- Including the disclosure of code used by Windows to
interoperate with the operating system in order to allow developers
to create competing products that will emulate Microsoft's
integrated functions. The agreement provides for disclosure of code
to enable non-Microsoft server software to interoperate with
Windows on a PC in the same way that Microsoft servers do. This
hopes to ensure that Microsoft cannot use its PC operating system
monopoly to restrict competition among servers.
Providing greater access
- The agreement provides for computer manufacturers and consumers
to substitute competing middleware software on Microsoft's
operating system.
Banning retaliation
- Microsoft will be prohibited from retaliating against computer
manufacturers or software developers for supporting or developing
certain competing software.
Granting fair licenses
- Microsoft will be forbidden from creating licensing
arrangements which prevent companies form exercising their rights
under the agreement or which effect the singular and excessive
promotion of Microsoft products.
Ensuring compliance
- The settlement adds an enforcement provision and appoints a
panel of experts who 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 agreement.
Not all of the 18 states involved in the case are dissatisfied
with the proposed agreement, however. The Wall Street Journal
reported that the Illinois attorney general, Jim Ryan felt no need
to alter the proposal and that he was willing to sign it. He was
reported to have said that consumers "will have gained a freer and
more competitive marketplace as a result" of the agreement.
The European Commission’s antitrust investigation of Microsoft
is ongoing. News agency Reuters quotes a Commission spokeswoman
telling reporters on Monday that Microsoft has yet to reply to a
formal statement of objections sent to the company in August. When
asked if Monday’s Department of Justice settlement would have an
effect on the Commission’s approach, she replied that it was “too
early to say”.
