Microsoft Settlement Promotes Competition, DOJ Says

The Department of Justice cites alternative browsers, Web-based e-mail and Linux as examples of emerging competition with Microsoft.

Six years after the landmark antitrust settlement between the United States and Microsoft, the Department of Justice said Aug. 30 that the deal has benefited consumers by promoting competition in the middleware market.

In a filing in the U.S. District Court for the District of Columbia, the Department of Justice stated that the agreement has accomplished the goal of removing "anticompetitive exclusionary obstacles" erected by Microsoft prior to the settlement.

The Department of Justice originally charged Microsoft with unlawfully maintaining a monopoly in its personal computer operating systems by prohibiting consumers and computer manufacturers from removing Microsofts middleware and cutting deals with software developers and other third parties to exclude competing middleware.

"The final judgments have been successful in protecting the development and distribution of middleware products and in preventing Microsoft from continuing the type of exclusionary behavior that led to the original lawsuit," Assistant Attorney General Thomas O. Barnett, in Washington, said in a statement.

In the court filing, the Department of Justice cited Web browsers like Mozillas Firefox, Opera Softwares Opera and Apples Safari as examples of increasing competition for Microsofts Internet Explorer.

"All these competing browsers are crossplatform and therefore allow applications delivered over the Internet, either directly via the browser or as browser plug-ins, to work on multiple operating systems," the filing stated.

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The Department of Justice also noted the emergence of Adobe Systems Flash and Apples QuickTime for delivering Web content and the increasing popularity of software-as-a-service applications as further proof the antitrust agreement is working. Apples iTunes and media players from Yahoo and RealNetworks are also serious competitors to Microsofts Windows Media Player.

In addition, the court filing pointed to the increasing use of e-mail Web-based services and other applications that historically would have been handled by local applications like Microsofts Outlook mail program.

"Web-based e-mail typically works across platforms on a variety of browsers, and can obviate the need to install a separate e-mail software program on the users computer," the filing stated.

The filing further noted, "Microsoft has largely responded to the competitive significance of Web-based e-mail-related tools by developing its own Web-based functionality…rather than focusing on improving the e-mail client or other tools in the operating system itself."

Also, the Department of Justice pointed to Dell and Lenovos decision to begin shipping PCs loaded with Linux as examples that the OEM "distribution channel is open for Microsofts competitors."

The emerging competition, however, has not resulted in a dramatic reduction in Microsofts operating system market share. The Justice Department said that should not be a factor in determining whether the final antitrust settlement is effective.

"Microsoft was never found to have acquired or increased it monopoly share unlawfully," the filing states. Instead, the final settlement was targeted at "reinvigorating competitive conditions that Microsoft had suppressed, not to slicing off some part of Windows market share."

The settlement between Microsoft and the Department of Justice is scheduled to expire in November, but in 2006 the government and Microsoft agreed to extend until November of 2009 certain provisions related to protocol licensing. The Department of Justice and state antitrust officials may extend those provisions through 2012.

The next status conference hearing on the settlement progress will take place on Sept. 11 in Washington.

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