Pushing the Envelope

Microsoft's latest XP moves are monopolistic, critics say

Despite Microsoft Corp.s confidence that it will ultimately prevail in its federal court battle, critics feel the company is playing with fire in its recent maneuvers.

With Microsofts inclusion of so-called smart tags and other technologies in the forthcoming Windows XP operating system, legal experts say the company is practicing the same types of behavior that got it in trouble in the first place.

"What we have here is a very aggressive, monopolist working way beyond what are appropriate standards for its activities," said John Soma, who was part of the U.S. Department of Justices legal team on the IBM antitrust case and is now a law professor at the University of Denver. "The totality of all the technologies Microsoft is bundling and all the other initiatives it has introduced will effectively ... limit competition."

In addition, the Redmond, Wash., company is taking a risk by being so aggressive before the court rules on the pending antitrust case, Soma said.

If the Appeals Court sends the remedy portion of Judge Thomas Penfield Jacksons ruling last year back to the District Court for review, as is widely expected, the DOJ and the state attorneys general will then be able to introduce new evidence—specifically, evidence of Microsoft continuing to allegedly abuse its monopoly since the original verdict, Soma said.

The bundling of Windows Messenger into XP, the inclusion of smart tags—a technology that can link other sites and services—and the possible exclusion in XP of an encoder that would allow people to convert audio tracks from CDs to the MP3 format are issues that could be introduced by the Justice Department, he said.

Microsoft officials have denied any wrongdoing and said the company is innovating and giving customers what they want.

"Third parties can offer the same functionality in separate applications that can run well on Windows. I dont see how this in any way stifles competition," said Microsoft spokesman Jim Cullinan. "Exactly how this [smart tags] technology will be utilized in the final product has yet to be determined."

Cullinan declined to comment on the possibility of new evidence being allowed if Jacksons remedy were returned to the District Court, saying this was "too premature to talk about" given that Microsoft had appealed the entire ruling and the Appeals Court had not yet released its opinion.

Still, there is mounting suspicion that Microsofts attitude toward the imminent verdict is premature at best.

Ed Black, president of the Computer & Communications Industry Association, in Washington, said that Microsoft "could have a lot to lose" if the Appeals Court upholds any findings of wrongdoing on Microsofts part and sends the remedy package back to the District Court.

"The remedy is supposed to take account of changed circumstances, including what theyve done, are doing and have announced they intend to do," said Black, who filed friend-of-the-court briefs in the DOJ trial. "Theres no reason that all of its behaviors since the trial cannot be addressed in the remedy phase of this existing case. Initiatives like Passport, HailStorm and everything else are all relevant. And, if the remedy is not bounced back for review, I believe there are sufficient grounds to bring additional cases."

Black said the CCIA, whose members include equipment manufacturers, software developers, and telecommunications and service providers, has no problem with fair market competition and innovation, but that is not how Microsoft works, he said.

"Their behavior is unfair and illegal, and we do not believe that this blatant lawbreaking will go unpunished," he said. The inclusion of smart tags technology is "the latest way Microsoft continues to use its market monopoly power to give itself a unique advantage over its competitors," he said.