After years in the courts, the proposed settlement of the United States of America and nine states vs. Microsoft is as toothless as the consent decree of 1995.
Microsoft again must make only nominal behavior changes. In return, it gains legal protection for many practices that landed it in court. The holes in the proposed settlement are gaping.
First, OEMs looking for non-Microsoft options that better meet the needs of customers may still find Microsoft impeding third-party products that sold fewer than 1 million units in the United States the year before.
Second, Microsoft may keep secret and refuse to license any APIs or protocols to would-be competitors that "compromise the security of ... anti-piracy, anti-virus, software licensing, digital rights management, encryption or authentication systems." These are the very stumbling blocks for those trying to compete with native Windows components for multimedia, e-commerce, messaging and file sharing.
Third, competitors must then, at their own expense, submit their software to a third-party testing organization to ensure compliance with Microsoft protocol specifications.
Fourth, the agreement specifically excludes servers, PDAs and handhelds and may even exclude tablet PCs, which Bill Gates, in his Comdex keynote, said will be the most popular computing platform in five years.
Fifth, Microsoft now has legal protection to add whatever it wishes to its operating systems, offering the same preload and default invocation benefits as before. OEMs have new freedoms to change these defaults, but how many real alternatives will be available?
Sixth, Microsoft is not required to disclose the format of locally stored data files, such as document, address book, mail or stored music formats, that leverage the Windows desktop monopoly to tie users to other Microsoft software as much as APIs or network protocols do.
Finally, the agreement lacks any penalty for Microsofts gains in market share and revenue as a result of past illegal behavior.
The proposed settlement wont protect the marketplace from Microsofts product- and service-tying, nor will it encourage new competition. The agreement needs to be toughened to provide substantive remedies for substantive violations.
The nine states, plus the District of Columbia, that have rejected this settlement should hold their courses, as should the European Union.
We call on U.S. District Judge Colleen Kollar-Kotelly to use the upcoming 60-day public comment phase to carefully determine if this agreement is, in fact, in the public interest.