Microsofts Counterproposal: A Brief Thats Really Brief

Company warns competing application developers not to expect a level playing field.

The proposed final judgment filed Wednesday by Microsoft Corp. sends several messages at once.

By its brevity, compared to the plaintiffs proposed final judgment that seeks to break up the company, the Microsoft filing conveys contempt for the broad sweep of the findings of fact compiled by Judge Thomas Penfield Jackson. Microsoft in effect is saying, "Lets stick to the subject."

Microsofts position seems to be that since the company was brought into court for allegedly crushing Netscape by bundling Internet Explorer with Windows, any legitimate remedies must be narrowly directed against that offense. Microsoft effectively admits that it squeezed out Netscapes browser by controlling the configuration of the Windows desktop, imposing Internet Explorer as the Windows interface to the Web and playing hardball with PC makers concerning their agreements to preload Windows on their machines. Microsoft offers to submit to a ruling that it cant do those things any more.

By contrast, the plaintiffs argue that the process of discovery during this case has revealed a pattern of anticompetitive practices, and that the entire pattern is subject to remedy under the law. Moreover, the plaintiffs contend that Microsoft has evaded the spirit of past behavioral remedies (its earlier consent decree), and that a structural remedy -- partitioning the company -- is forced upon the government by that evasion.

The other messages sent by Microsofts proposal are in the detailed terms to which it offers to agree.

What Microsoft is really offering

The first of these messages concerns the speed of the software market. Microsoft proposes that the judgments provisions remain in effect for only four years; in contrast, the government proposes a judgment with a term of 10 years, just 12 days longer than the time that has elapsed between the original shipment of Windows 3.0 and the filing of Microsofts counterproposal.

The government might argue that 10 years is demonstrably the length of a generation of software, if the network-centric Windows 2000 is considered the generation that succeeds the desktop-centric 3.0 version. Microsoft will doubtless argue that Internet time makes four years long enough to transform the market beyond recognition, that the remedies in this case will be moot when the market that those remedies protect no longer exists.

The second crucial message is in the matter of what Microsoft knows about the process of writing applications for its platforms vs. what it chooses to share with developers of competing applications. Microsofts filing defies the past claims of company officials -- notably Steve Ballmer -- that there was what Ballmer called a "church and state" separation (often termed the "Chinese Wall") between its development of operating systems and its development of applications for those operating systems.

In comments during the last eight years, Microsoft has already recanted the notion of a Chinese Wall, but Wednesdays filing eliminates any remaining doubt: Microsoft specifically excludes "information about the underlying implementation of (published) APIs" from its definition of "Technical Information" that it must fairly share with competitors.

Moreover, Microsoft merely promises to be impartial -- not necessarily complete -- in its disclosures: It defines Technical Information as what is needed "to enable ISVs to design software products that will run on ... Microsoft Platform Software" (as opposed to running well).

Crucially, the company only commits to being evenhanded in granting access to information "that Microsoft makes available to the software development community at large." In other words, Microsoft can continue to maintain secret APIs and can make any use it wishes of information on underlying mechanisms and data structures.

Microsoft merely concedes, in effect, that information on the published Windows APIs constitutes an "essential facility" -- which would make it unlawful for Microsoft to deny reasonable, non-discriminatory access.

Unlike the plaintiffs, Microsoft omits "source code" from specific mention in the list of documents to be made available for scrutiny on demand during the judgments span. On the other hand, the company does not specifically exclude source code from the general category of "documents ... relating to any matters contained in this Decree."

That should keep some lawyers busy, if Microsofts language prevails.