FC: It's official: DOJ and Microsoft agree to settle antitrust case

From: Declan McCullagh (declanat_private)
Date: Fri Nov 02 2001 - 07:01:45 PST

  • Next message: Declan McCullagh: "FC: Responses to DOJ and Microsoft agree to settle antitrust case"

    [Well, so much for that. Anyone want to speculate on how different this 
    deal is from what Microsoft has been offering in settlement talks since 
    early 1998? If the differences are minimal and if the judge accepts this 
    deal, then just what did this lawsuit accomplish, beyond enriching lawyers, 
    eating up tens of millions of tax dollars, and launching a flotilla of 
    anklebiting private antitrust suits? --Declan]
    Proposed final judgment:
    What:	Microsoft Corp. news conference to discuss antitrust settlement
    Who:	Senior Microsoft executives
    When:	Friday, Nov. 2, 2001
    Media check-in: 8 a.m. PST/11 a.m. EST
    News conference begins: 9 a.m. PST/ noon EST
    Media must provide credentials and are subject to search.
    Doors to Microsoft Studios open at 8 a.m. PST.
    Where:	Microsoft Studios
    4420 148th Ave. NE
    Redmond, Wash.
    Call-In Information (Listen-Only News Conference)
    Domestic (U.S.)	(888) 593-3970	Pass code:  Microsoft
    International		(712) 271-3406	Pass code:  Microsoft
    FRIDAY, NOVEMBER 2, 2001
    (202) 514-2007
    TDD (202) 514-1888
    Settlement Provides Enforcement Measures to Stop Microsoft's Unlawful Conduct,
    Prevent Its Recurrence, and Restore Competition
             WASHINGTON, D.C. - 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:
    *       abcreating 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, 
             "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 current 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 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 Property- 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 
             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, 
    N.W., Suite 500, Washington, D.C. 20530, (202-616-0944).  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.
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