Mass.: Microsoft Still Deceiving

Massachusetts claims Microsoft continues to deceive ISVs, and the company needs tougher penalties.

Evidently unfazed by being the sole state still battling Microsoft Corp. on the antitrust front, Massachusetts insisted Wednesday that the software maker is getting off too easy when it comes to bundling middleware with the operating system and when it comes to being punished for trying to thwart Java distribution.

Massachusetts filed a brief with the U.S. Court of Appeals for the District of Columbia Wednesday arguing that the remedy approved last November does not stop Microsoft from continuing some conduct found to be illegal, and it does not deprive the company of benefits gained through the illegal conduct.

According to Massachusetts, the Redmond, Wash., software maker continues to deceive independent software vendors today, as it was found to have deceived ISVs when it came to deploying Java. "Microsofts deception of software developers is ongoing conduct that must be terminated," the Bay State told the court.

Massachusetts also charged that the remedy does not stop Microsoft from thwarting competition through deals with OEMs that might cause them to favor Microsoft middleware. The remedy settlement agreed to by the Department of Justice (and, eventually, all litigating states except Massachusetts) bans Microsoft from discriminating against OEMs, but it does not prevent the company from offering financial rewards—or "market development programs" (MDPs)—on a non-discriminatory basis.

"Competition will be harmed if Microsoft is able to use MDPs to ensure that OEMs do not exercise the freedom that the remedy aims to provide," the state charged.

In the liability phase of the antitrust case, the District Court found that Microsoft thwarted middleware platform threats that could develop into competition. The remedy settlement requires Microsoft to enable OEMs and users to conceal access to middleware code, but it does not require it to separate the code from the operating system. Massachusetts and eight other states plus the District of Columbia fought to require Microsoft to unbundle middleware code from the OS altogether, but they did not succeed.

Remaining steadfast, Massachusetts told the appeals court that the middleware code removal provision "transparently" does not remedy the illegal conduct.

"It was clear error for the district court to find that the mere hiding of icons redresses comminglings anticompetitive effects," the state wrote.

The Bay State chided the District Court for approving the remedy.

"If this is the remedy in a case of this magnitude, then there is little reason why any monopolist or would-be monopolist should hesitate to embark on a similar course of unlawful conduct," Massachusetts told the court.

The appeals court is scheduled to hear arguments from Massachusetts and Microsoft in November.