Corporate users and suppliers are concerned about the settlement in
the Microsoft-US Department of Justice (DoJ) antitrust case,
claiming it will do little to rein in the software giant's power
and position in the industry.
Under the settlement, computer manufacturers will have more
flexibility to bundle non-Windows software on new machines, and
Microsoft will have to disclose more critical technical information
to its competitors. An independent panel of monitors will oversee
Microsoft's conduct.
The settlement would be enforced for five years, but could be
extended by two years if Microsoft violates its terms and
conditions, according to reports.
"Microsoft is as guilty as sin of bad business practices and
squeezing other technologies out. But this gives them a free
five-year ride," said an IT executive at one of the top 10
companies in the US.
However, the DoJ said the restrictions "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 was reached in the face of industry opposition and
without the agreement of the 18 US states that are also suing
Microsoft.
Sun Microsystems said it was particularly concerned about how much
technical information Microsoft would be required to share,
particularly around its .Net initiative.
"It's very hard for me to integrate SunOne [with .Net]. It's very
hard for IBM with WebSphere, hard for BEA with WebLogic and hard
for Oracle with 8i to interoperate seamlessly with .Net because
it's also closed. Proprietary, none of the interfaces are published
and none of the APIs [application program interfaces] are
available. That's really the crux of what should be done here,"
said Ed Zander, Sun's president and chief operating officer.
"The entire software food chain, if we're not careful, from cell
phones to back-end systems, and then on top of that your
identification authentication, are all going to go the way of
Microsoft, because there's no way for us to compete in a very
closed world that's controlled by one company," he added.
Some users said they had little faith that the three-person review
committee charged with ensuring Microsoft complies with the ruling
could be any match for the company.
Microsoft rivals in the Linux world said the proposed settlement
would do little to improve their chances of loosening the company's
grip on the desktop operating systems and application markets. Even
being made to make its code more available to the industry could
work in Microsoft's favour, they argued.
"They [Microsoft] say they will publish code. Well, source code in
and of itself does nothing. Doing so will probably be to
Microsoft's advantage, not disadvantage, because it will allow
people to better integrate their stuff. That isn't exactly a
penalty," said Ransom Love, president and chief executive of
Caldera International.
"It's like saying Al Capone contributed greatly to Chicago's
economic well-being, so we'd better not arrest him because the
economy would be in dire straits, we'd better let him go back to
doing his thing. And we'll send someone along to watch him," Love
added.
The position of the 18 states that have not settled could prove
critical, however. Early indications are that most believe there
are not enough teeth in the terms and conditions to significantly
alter most of Microsoft's offending business practices and
policies.
In late October, several states hired top trial attorney Brendan
Sullivan to represent them in the Microsoft case, signalling to
some observers that they plan to object to the settlement.
Hillard Sterling, a partner at Chicago-based technology law firm
Gordon & Glickson, said the states have the right to object to
the proposed settlement, adding that there would be a separate set
of hearings before a judge.
However, "there is tremendous pressure on these states to fall in
line. The Justice Department is trying to sell the states on the
settlement proposal," Sterling said.
But Microsoft's history suggests that the settlement itself could
turn into a new set of legal battles, he warned.
"It's likely this settlement will face challenges as technology and
markets shift into new areas. Windows XP is a good source for
testing the parties' agreement. The government will be very focused
on ensuring Microsoft's commitment applies to XP," Sterling
said.
Despite future potential challenges to Microsoft's product
strategy, the settlement would indicate a clear victory for
Microsoft, he added.
"It's business as usual for Microsoft. This case has not affected
Microsoft's strategy in creating new products and releases."