Microsoft Touts Antitrust Compliance

As court weighs efficacy of antitrust settlement, Microsoft is trumpeting its compliance efforts.

A federal court is still weighing the efficacy of a proposed antitrust settlement signed between Microsoft Corp. and the Department of Justice in November, but the Redmond, Wash., software maker nonetheless must meet several deadlines under the deal this month. As the same court considers whether stricter antitrust penalties are necessary, Microsoft is trumpeting the steps it is already taking to remedy its illegal conduct.

The settlement inked with the Justice Department and nine states is considerably more lenient than an alternative remedy proposal sought by nine other states. Both proposals address the need for Microsoft to disclose more technical information, give developers a way to remove access to the companys middleware and provide greater flexibility to OEMs, but the proposals differ dramatically in the degree to which Microsoft must pursue those goals.

Tomorrow, under the terms of the settlement proposal, Microsoft will launch a program to license 113 communications protocols for other vendors to use to interoperate with Windows 2000 Professional, Windows XP and future versions of Windows. The licensing program, which the company described as novel, is based on 12 tasks that reflect how Microsofts server operating systems interoperate with desktop operating systems.

While the alternative remedy proposal sought by the non-settling states requires Microsoft to share technical information more broadly, the Justice Department settlement permits Microsoft to charge royalties and reasonable licensing fees -- which the company is not listing publicly -- for the protocols.

"Theres very substantial IP and valuable technology in these protocols," Brad Smith, senior vice president of law and corporate affairs, said in a conference call with reporters this morning. "The prices for the protocols are very small relative to the price of the products."

Beginning Aug. 28, Microsoft will also make available for free 272 internal application programming interfaces for five middleware features defined in the proposed settlement: Internet Explorer, Windows Media Player, Windows Messenger, Outlook Express and the Microsoft Java Virtual Machine. The stricter remedy proposal sought by the states more broadly defines the scope of middleware subject to the anti-trust penalties.