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With a corporate breakup off the table, Microsoft now faces a raft of potential mandates to remedy its monopolistic behavior. The simplest and most reasonable may be compulsory licensing of the Windows operating system, observers said.
“We think a universal license to the OS is the way to go,” a senior official of AOL Time Warner said.
Under such a scheme, Microsoft would be obligated to license its OS to any party, thereby denying the software giant the ability to dictate how the PC desktop should look or work.
“Opening up the desktop OS and server OS to competitors would do the least long-term damage to Microsoft,” said Rob Enderle, a research fellow of global technology advisory firm Giga Information Group. “Microsoft has been able to prove they can execute well on a level playing field. They dont need the crutch of having a monopoly that they needed back in the old days.”
Microsoft officials had no comment on the compulsory licensing issue. But industry experts said the company would likely fight such a proposal vigorously.
In general, the software industry opposes compulsory licensing because it forces a company to give away its intellectual property. But of the remedies available in this case, “this is the least bad,” Enderle said.
The Department of Justice is bent on resolving its 3-year-old antitrust case against the software giant. Whether that is done through a settlement or a court order from the new judge assigned to the case, the DOJ said it wants a final order to be based on remedies – including compulsory licensing – that were laid out by U.S. District Court Judge Thomas Penfield Jackson when he ruled the company was an illegal monopoly and ordered it broken up.
The breakup order was vacated by an appeals court and sent back to U.S. District Court Judge Colleen Kollar-Kotelly. The first briefs in that case are due this week. Justice officials said last week they would not seek a Microsoft divestiture, and they would drop the claim that the software company had illegally tied its Internet Explorer browser to its OS.
“We hope we can bring the Microsoft case to a resolution in our lifetimes,” a senior DOJ official said when announcing the decision Thursday, Sept. 6. “We can get effective relief on the monopoly maintenance claim.”
Now, the DOJ finds itself in remarkably familiar terrain: trying to get a behavioral remedy from a company that has proven to be resistant to court-sanctioned demands in the past. In fact, the antitrust case was brought because the government charged that Microsoft was not living up to the settlements of previous antitrust charges. And court-ordered limits on business practices typically require heavy regulatory oversight by the government.
“If Microsoft is smart, theyll get serious about [the] settlement,” said Robert Lande, a University of Baltimore antitrust scholar.
Both Microsoft and the DOJ, however, declined to comment on settlement talks, and on whether the new move by the DOJ might expedite a resolution outside the courtroom.
Some Microsoft critics viewed the DOJs latest move with dismay, saying the Bush administration gave up the strongest part of the case.
“As the District Court and the government plaintiffs originally concluded, structural remedies are the most effective solution to prevent Microsofts continuing illegal and anticompetitive behavior,” said Ed Black, CEO of the Computer & Communications Industry Association.
DOJ officials said the decision to abandon the breakup was made by the Bush administrations new antitrust chief, Charles A. James, without influence from U.S. Attorney General John Ashcroft.
Campaign finance watchdog groups, however, quickly pointed out how Microsoft has been flexing its political muscle. The company gave more than $4.7 million to federal candidates and parties during the 1999-2000 elections – almost three times what it contributed during the previous three election cycles combined, according to a report released Thursday by the Center for Responsive Politics. Of that, $2.5 million went to George W. Bush and other Republicans during last years election campaign.