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Features: Microsoft Decision: Instant Analysis |
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Click through for analysis of the Opinion, live from LawMeme HQ. We're reading the Opinion and other documents and will be posting our thoughts as we work through the 344+ pages.
Disclaimer:everything here is based on a quick skim through a very complicated opinion. We may be taking quotes out of context or getting the fine details wrong. Very wrong. You probably shouldn't go sign new contracts with Microsoft on the basis of what we say.
Quick outline of the entered remedies: - JG
- Microsoft can't retaliate against OEMs that ship non-Microsoft OSes and middleware or that ship dual-boot or OS-free computers. Microsoft is allowed to reward OEMs proportionally for the amount of MS software they sell or promote.
- Royalties for Windows must be uniform. There are some exceptions, but the exceptions are obvious: volume discounts and different prices for different language versions. Of course, these discounts and prices have to be the same for all OEMs.
- OEMs have the right to not be penalized by Microsoft for:
- Including icons for non-MS products on the Desktop, Start Bar, Active Toaster, etc.
- Launching non-MS middleware on system startup -- unless that middleware "replaces or drastically alters" the Windows UI.
- Letting users dual-boot from a non-MS boot loader.
- Putting up its own ads during boot.
- MS must disclose all the APIs used by its own middleware to communicate with Windows. The disclosure has to take place by beta. But they can't use the APIs to do anything other than interop with Windows.
- Same thing with comminications protocols -- those used by MS clients to talk to MS servers must be public.
- No retaliation against vendors who sell or work with other OSes (or apps that run on those OSes). There's an exception here for "bona fide contractual obligation[s]" of "reasonable scope and duration" for selling MS software.
- MS can only demand that OEMs &c. make a fixed fraction of their sales be Windows if it's "commerically practicable" to provide equal distribution for non-MS software. [JG: this appears to be completely meaningless in practice. Please, someone, post an analysis of why I'm wrong] Nor can MS insist that OEMs show the IE icon only on Mozilla-free computers.
- MS has to add to Windows XP Service Pack 1 the ability remove all middleware, product-by-product, in a non-discriminatory way. Add/Remove Programs just about does this already. Similarly, they should have a free and unbiased choice of middleware. Again, XP is just about there already. [JG: don't seem like much, do it?]
- IE can't make itself your default browser and delete your Opera icon unless it it pops up a yes/no box first. And it's not allowed to pop that box up for two weeks from when you turn the computer on. [JG: My government sued Microsoft and all I got was this lousy OK/Cancel box]
- MS has to give other companies licenses to its intellectual property -- on reasonable terms -- as far as those other companies need to use that IP to do all the things the settlement lets them do.
- No provision of this Final Judgment shall require 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 . .
- The states have to form a committee to enforce the settlement. The states get to look at any and all source code and documents MS owns and interview all MS employees. Of course, they can't tell anyone else. They then have to come back to the court to get further orders to enforce this Order -- except that MS gets a "reasonable opportunity" to fix any "unknowing" violations. [JG: oh, great. wasn't this where we were half a decade ago?]
- MS has to appoint a Compliance Officer who's responsible for going around whispering in the ears of MS executives, "Remember that you are mortal and must comply with the Final Judgment."
- And, oh yeah, this order will only last five years, with a two-year extension if MS really screws up.
Thoughts: - JG
"Retaliation" includes almost anything, actually: "altering . . . commercial relations" is a pretty wide net.
"Replaces or drastically alters" is fuzzy. The stage is set for MS to argue that Windows has been "drastically altered" if you change the the background color of the splash screen. This provision also seems like it gives MS veto power over any real UI changes. Looks like OSX won't have much competition from the Windows world for interface innovation.
Trying to figure out the implications of the "contractual obligation" exception to the rule that keeps MS from retaliating against software vendors who sell non-MS software. Who'll say whether it's "reasonably necessary" to Office's functionality that you not have installed another email client? Or am I just misreading (F)(2) of the remedies?
On the New Alleged "Bad" Acts by Microsoft - EM
As you can see from these quotes below, these additional bad acts did not weigh very much in the opinion:
These factual findings, abundant and daming as they appear, have not, in fact, been weighed for competitive and anticompetitive effect. It has never been the contention of the parties that, during this remedy phase of the proceeding, the Court should undertake such a balancing of anticompetitive effect and procompetitive justification with regard to these factual findings. As a result, these factual findings, standing alone and unconnected to specific liability findings, cannot be utilized to justify specific remedial provisions. [page 94]
Not withstanding this approach, because Plaintiffs identify an elaborate series of new "bad" acts by Microsoft relating to Microsft's alteration and extension of industry standards, use of proprietary technology, disclosure of technical information, or lack thereof, and the ensuing effect of all this conduct upon interoperability in the context of server/network computing, the Court will address these acts en masse. After reviewing the evidence in this regard, the Court concludes that the alleged "bad" acts are tenuously related to the liability findings and, therefore, are of little use in crafting a remedy. [bold Emphasis added] [page 96]
(JG: that's been the problem all along. this case has been like nailing Al Capone for tax evasion, except that Microsoft has better lawyers than Capone.)
First Mention of "Open Source" in the body of the opinion - EM
Page 98, when discussing SAMBA. See also footnote 59 - for the definition.
On Kerberos - EM
Kerberos is a security protocol that provides a mechanism for "authenticating" a user to a computing network. Microsoft added proprietary extensions to this open standard. See this Slashdot article (Proprietary Extension to Kerberos in W2K) or a posse of articles, some on topic some not (Slashdot: Search kerberos). As the standard, like many good standards, included some undefined fields, Microsoft's extensions were not technically inconsistent. As Microsoft has now submitted the extensions to the IETF, no harm no foul.
On SAMBA, aka CIFS - EM
SAMBA is an open source implementation of Windows file and print sharing protocol, allowing other operating systems to talk to Windows systems for purposes of file and print sharing. The allegation is that Microsoft uses their protocols to inhibit interoperability. Microsoft did not explain their actions in this case, but promised to license the protocol under terms of the settlement agreement, which still shuts out open source.
On LDAP and ADSI - EM
You need a directory to keep track of information in a network. Windows' calls its system "Active Directory." The claim is that the Active Directory Service Interface (ADSI), which is the protocol that talks to the industry standard Lightweight Directory Access Protocol (LDAP), is an undocumented proprietary extension. Microsoft says that they disclose the ADSI protocol to their developers network - what is the problem?
On TDS - EM
The protocol for Windows PCs to talk directly to SQL servers. Microsoft's response: the protocol is already reverse engineered and its a server program, not part of the operating system anyway.
On MUP - EM
MUP is Microsoft's proprietary code that facilitates communications between clients and servers in a network. When the code changed it inhibited Novell's software's ability to communicate. Microsoft claimed that their own legacy code was also harmed, so no problem.
On Java - EM
The judge basically agrees that the problem with Microsoft's implementation of Java was not that it added proprietary extensions, but that Microsoft mislead programmers into thinking that their implementation of Java was compatible with Sun's.
Network Effects - EM
Well, at least they get more mention in this opinion, primarily when discussing the length of the remedy. Still, there appears to be no discussion linking network effects, installed bases and proprietary extensions to open protocols. Creating a proprietary extension is not a problem in an open market. But when the actor creating the extension has an overwhelming installed base reinforced by network effects, then proprietary extensions to a protocol become important. The proprietary extensions more easily become de facto standards. Does this not make a difference?
Ultimately, one of the most critical and crucial issues of Microsoft's monopoly power, its ability to control API's and protocols, was found to be too remote to the liability findings.
Overly Broad Disclosures = Bad or Why Copyright Should Protect Functional Elements of Software - EM
Basically this section of the decision argues that fully revealing API's and protocols would mean that it would be too easy to create programs that can replace Microsoft's programs. If Microsoft were forced to reveal the Microsoft Word format, then Microsoft might not be able to sell too many copies of Word and what a tragedy that would be. Here is an interesting quote:
To broadly enable the cloning of Microsoft's operating system and portions thereof, as well as Microsoft products unrelated to Microsoft's monopoly, runs contrary to the theory of protection of intellectual property rights. In general, the protection of intellectual property rights encourages innovation by rewarding the innovator's investment in creating something new, while making the innovation available to the public. To enable the cloning of Microsoft's products sets this scheme askew by denying Microsoft the returns from its investment in innovation and effective divesting Microsoft's intellectual property of its value.
Let's be clear here. The plaintiffs were not asking Microsoft to abandon any copyrights, trademarks or patents. API's and protocols are functional elements and, generally, cannot be copyrighted. They can be patented, but they aren't. At best, Microsoft is claiming that their API's and protocols are trade secrets. If this is the claim, then it should be put forth clearly, not hidden with the words "intellectual property." What is contrary to our system of intellectual property is to protect functional elements of interoperation. Might as well say the Microsoft should have a copyright on their API's and protocols and be done with traditional theories of intellectual property.
On Reasonable, Non-Discriminatory Licenses - EM
Strangely, there is not much discussion about fostering competition in this section. Nor is there a mention of "open source." You see, the only form of competition worthy of the name is the type of competition that is able to pay royalties to Microsoft. Once again, courts are blind to the strange economics of the digital age (and, especially, software).
On Set-top boxes not being covered - EM
At present, however, unlike the middleware threat posed by Navigator, interactive television software does not reside on the PC, but instead is present predominantly on the server, with a small portion on the television set-top box. Therefore, Plaintiff's view of interactive television software as a "middleware platform threat" is based upon the presumption that the functionality presently residing on the set-top box will someday be ported from the set-top box to run on desktop personal computers. This presumtion is the fundamental flaw in Plaintiff's argument.
I have four words: Windows XP Media Edition
Words you never expected to see in a judicial opinion: -JG
The Worst Provision: - JG
Section J of the order. It's the security exception. MS doesn't need to disclose APIs or protocols that would compromise the security of ANYTHING, just about. That includes "digital rights management," which is itself a huge catch-all, just in case "encryption or authentication" isn't good enough to drag in any product MS wants to protect. Windows Media Player is basically safe from disclosure; if MS takes Palladium secret again, that'd probably be safe, too. This is it, folks. If middleware was yesterday's battle and DRM is tomorrow's, MS has basically free reign to do whatever it wants in secret in the important arena of the future.
The Bottom Line - JG
Microsoft wins. The judge has entered the settlement as MS wanted it. The "amendment" to that settlement isn't substantive -- the court decided that it needed to reserve some power for itself a little longer. It didn't change any of the terms of the settlement, just said "if I change my mind, I'll come back and impose new orders in the future, okay?" But antitrust courts do this regularly; it's a sort of employment act for judges.
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Average Score: 4.75 Votes: 8

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"User's Login" | Login/Create an Account | 9 comments |
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Re: Microsoft Decision: Instant Analysis (Score: 0) by Anonymous (Name Withheld on Advice of Counsel) on Friday, November 01 @ 18:05:37 EST | Yeah, well this sucks. Although I didn't expect to see a break up or anything (this was ruled out in appeal), I did expect to see MORE actual steps to REALLY STOP M$ from monopolistic practice.
Wasted tax dollars to be followed by MORE wasted [tax] dollars to M$. Damn. |
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Re: Microsoft Decision: Instant Analysis (Score: 1) by Vacuum on Friday, November 01 @ 18:50:56 EST (User Info | Send a Message) | Thanks for the quick and helpful analysis.
Two questions:
How did this happen? No, really. I'm not a lawyer and most of the verbiage in the documents released are over my head, but the case against Microsoft seemed clear in light of the "findings of fact." Did she not understand the current technology landscape? Was she influenced? Are Microsoft's lawyers that much better? Or (gasp) is there solid law to defend her ruling?
What's next? Microsoft's Palladium "initiative" and Windows Media Player, two of the next monopolies (if Gates & Co. get their way), will undoubtedly be tied to the OS as Explorer was, rendering this settlement useless. Are they a monopoly in perpetuity?
To say I'm disenfranchised is an understatement. |
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NDA/Anti-GPL Protocol/API Licensing-an agreement to restrict output? (Score: 1) by NZheretic on Saturday, November 02 @ 05:06:38 EST (User Info | Send a Message) | Note: I am NOT a lawyerBut, Since the Open Source collaborative development model has proven
itself fully capable of output-ing and providing consumers with high quality
software with better reliability, performance, scalability,
security at a lower total cost of ownership... ( see David A. Wheeler's
"Why Open Source Software/Free Software (OSS/FS)? Look at the Numbers!"
http://www.dwheeler.com/oss_fs_why.html
) ... and the Open Source development model requires public access
to the source code under an open license to encorage developer
participation... ( see "The Open Source Definition"
http://www.opensource.org/docs/definition.php
) ... does not the terms and conditions in
Microsoft Communications Protocol Program ( see
http://www.microsoft.com/legal/protocols/faq.asp
), including the NDA requirements, represent a clear case of a proven monopoly enacting an
agreement to restrict output?.
SAMBA, which is licensed under the GPL, is used by many vendors (
see http://www.samba.org/samba/vendors/ ). On 30 August 2001, the European Commerce Commision stated that Microsoft was engaging
in a policy of discriminatory and selective disclosure on the
basis of a "friend-enemy" scheme. ( see http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/01/1232%7C0%7CRAPID&lg=EN ). Does not Microsoft the Anti-GPL clauses in Microsoft's terms and
conditions also represent a clear case of a proven monopoly
enacting an agreement to restrict output?
The W3C's patent policy board has recognized the requirements to
encorage interoperation and open development and therefore have have voted to recommend a royalty-free patent policy for all their standards and protocols. ( see http://slashdot.org/articles/02/10/07/1159206.shtml ). In fact Fully documented, NDA-free and royalty-free interfaces
and protocols are the only way Give Software Users a Sincere Choice! ( see http://www.sincerechoice.org/ ).
Lastly, how can Microsoft grant access to API documentation on a royalty-free basis, yet require a per-seat royalty for protocols required for interoperation, and still claim that it is not enacting an agreement to restrict output?
( see http://www.microsoft.com/legal/settlementprogram/ )
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WinXP Media Centre (Score: 0) by Anonymous (Name Withheld on Advice of Counsel) on Monday, November 04 @ 18:58:39 EST | Note: IANAL. Is incompetence grounds for Judicial Review/Appeal? As part of her decision rests on the basis of something that has already been provent to be false, even before the decision was finalised, can the whole decision be thrown out? |
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Re: Microsoft Decision: Instant Analysis (Score: 1) by HowardGilbert on Monday, November 04 @ 22:40:55 EST (User Info | Send a Message) http://www.yale.edu/pclt | You got the Java "misleading" issue wrong. Microsoft's version of Java was always compatible with Sun Java. That is, a portable Sun Java program ran on the Microsoft runtime system. Microsoft added extensions. If you used the extensions, then your program would not run on other versions of Java.
The court had found that Microsoft tried to deceive users of its Visual J++ Java development environment by enabling the extensions by default, by making the extensions available to "drag and drop" and not warning the user of the development system that a program that used the extensions would not run on other versions of Java.
Given that any programmer could test their code on the Sun version of Java and verify the problem in about 10 seconds, it is not clear if anyone was actually fooled. That is not, however, my biggest problem with this claim.
My problem is that this is a claim against Microsoft in the one area where it clearly doesn't have a monopoly or even a substantial market share. The problem was in Visual J++. Given that Java development IDEs are available from Borland, Semantic, IBM, and Sun, whatever Microsoft did in Visual J++ didn't much matter. There is no evidence in any of the court decisions or discussions of this subject that the court appreciated that Microsoft's operating system and Java runtime are one thing, but that its language development tool was an entirely differnt product with a different market, different market share, and no particular clout.
Antitrust is supposed to prevent someone with a monopoly from using its monopoly power to expand, protect, or abuse. But this is a case where a company with substantial monopoly power in one product is accused of trying to protect that monopoly using another product in another market where it was a bit player. Whatever Microsoft did in Visual J++, it wasn't using any "monopoly power" there. The courts did not follow the argument carefully enough to realize this. |
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