"Impact Statement" Reveals DOJ Settlement Strategy

By Peter Galli  |  Posted 2001-11-16 Print this article Print

The U.S. Department of Justice this week detailed its rationale for settling the landmark antitrust case against Microsoft Corp., submitting a 40-page Competitive Impact Statement to District Court Judge Colleen Kollar-Kotelly in Washington.

The U.S. Department of Justice this week detailed its rationale for settling the landmark antitrust case against Microsoft Corp., submitting a 40-page Competitive Impact Statement to District Court Judge Colleen Kollar-Kotelly in Washington. The DOJ claims in the statement that the settlement not only benefits consumers, but that the "requirements and prohibitions will eliminate Microsofts illegal practices, prevent the recurrence of the same or similar practices and restore the competitive threat that middle ware products posed prior to Microsofts unlawful undertakings."
The statement interestingly also details six remedy proposals submitted by industry participants and other interested parties that the DOJ considered before deciding on the proposed final judgment.
These suggested remedies included making Microsoft license the Windows source code to OEMs to allow them to modify, compile and distribute modified versions of the Windows operating system for certain limited purposes; making Microsoft disclose the entire Windows source code and Microsoft middleware; and making Microsoft include in Windows certain non-Microsoft middleware including the Java Virtual Machine. Another proposal explored was to require that Microsoft manufacture and distribute Windows without any of its middleware or that functionality; and would force the Redmond, Wash., software giant continue to support fully industry standards if it chose them, claimed to adopt them or extended or modified their implementation. The last proposal considered was making Microsoft waive any rights to intellectual property in related APIs, communications interfaces and technical information if the Court found that Microsoft used such rights to prevent, hinder, impair or inhibit middleware from interoperating with the operating system or other middleware. But, after carefully weighing these proposals and others, the DOJ, "concluded that the requirements and prohibitions set forth in the Proposed Final Judgment provided the most effective and certain relief in the most timely manner," the document said. The DOJ also told Judge Kollar-Kotelly that with regards to the adequacy of the relief secured by the decree, "a court may not engage in an unrestricted evaluation of what relief would best serve the public," it said. As such, the proposed final judgment "should not be reviewed under a standard of whether it is certain to eliminate every anticompetitive effect of a particular of a particular practice or whether it mandates certainty of free competition in the future … Court approval of a final judgment requires a standard more flexible and less strict than the standard required for a finding of liability," it said. "A proposed decree must be approved even if it falls short of the remedy the court would impose on its own, as long as it falls within the range of acceptability or is within the reaches of public interest," the statement said. Kollar-Kotelly will now review the departments arguments, open the matter up for a 60-day comment period, and then give the Justice Department 30 days to respond to them. She could also choose to hold public hearings before making a final decision. 9 Ways Consumers Benefit The Justice Department also used the statement to detail nine reasons why consumers would benefit from the provisions of the settlement. These included ensuring that computer manufacturers had the freedom to make decisions about distributing and supporting non-Microsoft middleware products "without fear of coercion or retaliation by Microsoft." Computer makers would also have the freedom to offer non-Microsoft middleware that they could customize without interference or reversal and which consumers could use and invoke automatically in place of Microsoft middleware. The deal would also allow software and hardware developers the freedom to develop, distribute and write to software that competed with Microsoft middleware or operating system software, the Justice Department said in the statement. But the refusal by nine state attorneys general to accept the proposed final settlement means that the case is far from over and that Microsoft will still face remedy hearings before Kollar-Kotelly next year.
Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at www.eweek.com.


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