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The
Microsoft Consent Agreement Revisited
This
article has been hard to write, not because I mind admitting that
lots of folks disagreed with my comments; I expected that. But
rather, because Microsoft first announced a settlement with the DOJ
and then the viability of that settlement was questioned. Only
half of the 18 states that had joined in the DOJ suit will agree to
the settlement terms.
Status
Report First,
a status report. The judge has agreed to let the settlement
agreement go forward, for the DOJ, Microsoft, and the nine
consenting states (up to six of the non-consenting nine may yet join
this group), into the 60-day review process. This is likely to
conclude with the judge approving the settlement. The
non-consenting states are, at the same time, going forward with the
penalty phase of the trial, just as if there was no agreed-upon
settlement offer on the table. What no one understands
(because there is no precedent) is what will happen if these states
get a different outcome than the existing settlement. I
guess we’ll all get to wait it out. That’s too bad,
because the uncertainty it creates will have a continuing depressing
effect on the stock market and the technology industry, although a
lessened one, based on the much smaller probability that the judge
would award the remaining states anything very dire. I’d
rate this mainly saber rattling.
Letters From Our Subscribers We
got lots of letters on our article about the Microsoft settlement.
We thought we’d share part of a few of them with you. In
some cases, I think these folks have brought up good points that I
overlooked. In other cases, although I don’t agree with
them, I would defend with my dying breath their right to their
opinion. And I have to keep remembering these are smart people
– we just see things from different points of view.
I
got to this exchange in a convoluted way. It starts out as a
query from David Isenberg (a networking guru) and my reply.
But David was really commenting on something from Brett Glass and I
had gotten to all of this from Dave Winer’s Scripting News webblog.
It’s like pulling on a string. Amy, I
invite you to compare what you say in your "Opinions"
special issue on Fri, 2 Nov 2001 below: Microsoft
must offer vendors (and customers) the opportunity to These
things must occur at varying time periods over the next 12 months. and
. . . Microsoft
must publish the API's that allow Microsoft middleware to
interoperate with Windows. This must occur no later than 12
months from now and with the last beta release of each major future
beta. Communications protocols must also be supplied. .
. . with this, from Dave Farber's IP List . . .
From:
Brett Glass I'm
not sure how many people have noticed it yet, but the proposed
settlement agreement between the DoJ and Microsoft (see http://news.cnet.com/news/0-1003-201-7758181-1.html)
contains a "killer clause" that, notwithstanding the rest
of the verbiage, would let Microsoft crush competitors at will. This
text, buried in the "definitions" near the end of the
agreement, says, "The software code that comprises a Windows
Operating System Product shall be determined by Microsoft in its
sole discretion." In short, anything which Microsoft
declares to be a part of Windows must, as a result of the agreement,
be considered by the Government to be part of Windows. In
your considered opinion, does this "killer clause" give
Microsoft David
Isenberg David
Isenberg: David,
I did carefully read the Consent Decree before writing my Opinions
special issue of November 2. My
understanding of what's there is that there is a set of prohibitions
and instructions to Microsoft and a mechanism for oversight (the
Technical Committee) and enforcement. The definitions are
designed to be looked at in the context of the Consent Decree and
ONLY IN THAT CONTEXT. It is my belief that the last definition
you refer to means that neither the government nor the Technical
Committee nor another entity (such as a competitor) can tell
Microsoft what they are putting into the Windows Operating Systems,
but it doesn't mean that this Windows Operating System doesn't have
to meet the behavior tests laid out in the Decree. You are
assuming the final sentence frees Microsoft from the language of the
decree. I am not making that assumption. I
do find it a curious and ambiguous way to arrive at what should have
been a carefully crafted document, however. It will certainly
leave open the possibility of becoming grounds for dispute in the
future. Amy
From:
Brett Glass To:
David S. Isenberg; amy@wohl.com Subject:
Re: The killer clause in the Microsoft decree . . . David
S. Isenberg wrote: In
your considered opinion, does this "killer clause" give
Microsoft the legal ability under the DOJ consent decree to define
what is middleware and what is Windows? And
Brett Glass replied: It
does. What's more, the agreement's definition of
"middleware" also allows Microsoft many "escape
hatches." For
example, the agreement states that, to be considered
"middleware," software must be "Trademarked."
...this is clearly an absurd provision. Whether a product is
"middleware" or not depends on its function, not upon
whether Microsoft has happened to register its name as a trademark.
All Microsoft needs to do is (conveniently) fail to register the
name of a bundled product as a trademark, or just call it a facility
of Windows, and it is subject to none of the restrictions on
"middleware." Another
nasty loophole: according to the agreement, "Microsoft
middleware" only includes code that "includes at least the
software code that controls most or all of the user interface
elements of that Microsoft Middleware." What
does this mean? Suppose, for example, that Microsoft wants to put
functionality into Windows that competes directly with a
competitor's product but doesn't have a direct user interface. (A
good example would be the DoubleSpace compression software with
which Microsoft destroyed the business of Stac, Inc.) Microsoft
would be off the hook. Microsoft
could also arrange for Internet Explorer to provide the user
interface for any new software added to Windows. The company could
then claim that the new software was not "middleware,"
because it did not include its own user interface code. The
DOJ is clearly out of its depth here. As was the case with the 1995
consent decree condemned by Judge Stanly Sporkin, the DoJ is totally
out of its depth. Brett
Glass Brett
Glass Brett,
you bring up several interesting issues. May we print some of
your letter as part of a discussion of the subject? Amy
Amy Sure,
why not? I'd be interested in seeing the final result. It is
difficult to tell whether the agreement -- which will not restrain
Microsoft and will in fact encourage it to do more harm -- is the
result of incompetence or influence peddling. But in either case it
is extremely disturbing. Microsoft was judged guilty on several
counts, and is now being given carte blanche to commit the same
crimes again. Brett
Glass Microsoft
Paranoia I
had to promise the author of this series that we wouldn’t identify
him to get permission to publish these letters. You’ll see
why. Amy: Off
the record...and not for attribution...because if I was quoted, our
company would be dead...they (Microsoft) keep a list of enemies... I
would submit to you that there is zero chance that Microsoft will
cooperate with companies like ours. (The writer means as is required
under the terms of the Settlement Agreement.) There
is no incentive for them to improve the user experience. They
don't have to, they own the desktop, and they may seek to make it
more stable, just to avoid the bitching and the tech support issues. I
would also submit that there is no more real competitive middle
ware. They have crushed companies like ACT, Lotus Organizer, etc. No
one has "sold" a browser for a long time. The
argument that they own the ball, and will take it home if they don't
like the game is (expletive deleted). The idea that they will
publish the "api"s is also (expletive deleted), they will,
but at a pace that will insure that by the time that ISV's
understand and implement them, there will be new one's so that
companies will die before their stuff works and/or gets to the
market. Microsoft
reminds me of Disney, they don't want some of your money, they want
it all. Win/win is not part of their lexicon. Paranoid
Developer Paranoid
Developer: I
agree with you that Microsoft is often more aggressive than is
appropriate for a very large, mature company. But so are
Oracle and Sun. Microsoft
is a monopolist in some markets, an oligopolist in others, and not
particularly successful in some markets. We keep that in mind,
although their competitors sometimes have difficulty doing so.
I don't think the fact that they are a monopolist in some markets is
in question. Whether they use tying to leverage their monopoly
power in one market to succeeding in another market is a subject of
lively debate. I'd say they have tried but not always
succeeded. I
agree that they want it all -- do you fault them for the wanting or
for the often succeeding? I think both of those things are
legal. It only bothers me when they do things that are illegal
or might be illegal in their pursuit of success. When that
happens I think we ought to promptly stop them and make them pay an
appropriate penalty. We don't do that very well. It's
taken us years, for example, to tell Microsoft that they can't tell
HW vendors what to put on a computer screen or what other software
they can load on computers. That has kept many companies like
yours out of markets they might have succeeded in. The
operative word here is "might." Small, fragile
companies with interesting little products don't succeed very often
whether there are monopolists lurking or not. I'm fond of
pointing out to journalists, for example, that Netscape was
perfectly capable of killing itself off without Microsoft's help,
through inept management, no focus, and apparently no business plan
that ever made sense. But it's convenient to blame someone
else. I
believe that great products will always succeed if they get to see
the light of day. It's hard to keep people away from them.
Terrible products will fail from their own shortcomings. It's
in the middle ground where there are "nice" products that
market conditions, competition (fair or un), timing, and other
issues count. Some nice products get a following; others
don't. Microsoft didn't kill off the middleware products (I'm
having a lot of trouble with this term -- middleware is used very
differently in the enterprise software market), the ineptness of the
vendors who built and marketed them did. May I point out that
they were well-established long before Microsoft and Lotus, for
example, had its own monopoly (for spreadsheets), which it wasted? Look
at a vendor like Citrix or Symantec, real middleware players, who
thrive even when they compete with Microsoft, by building better
products and providing better customer service. Finding the
right niche markets and the right partners may be a lot more
important than inventing the right product. The
software kitchen is a very hot place. If an ISV finds it too
hot for his taste, he should find a less competitive business that
is more to his liking. This is not a gentlemanly business like
banking or publishing (if they are still as gentlemanly as once they
were). It's a fierce place where products are invented,
improved, and re-invented. Companies wax and wane. Today's
heroes may be tomorrow's cold stories in old files. Amy Comments or Questions: Send Email to
opinions@wohl.com
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