Settlement Locks Up Microsofts Role as Gatekeeper

Microsoft's behavior in the last few weeks has been decidedly unsubtle, and the ranks of the fanatics are growing in size and energy. Nevertheless, it's working for the company as the settlement is likely to enable Microsoft to maintain its leadership pos

Fictional "Dallas" patriarch Jock Ewing once challenged his son, J.R., demanding: "When are you going to learn a little subtlety?"

"Why should I," J.R. demanded.

"Because lack of it turns friends into enemies, and enemies into fanatics."

Microsofts behavior in the last few weeks has been decidedly unsubtle, and the ranks of the fanatics are growing in size and energy.

It was unsubtle to close the MSN portal, even temporarily, to browsers other than Microsofts. It was downright crude to do so on the pretext of other browsers putative lack of support for the latest Internet content standards. Competitors like Opera, and independent bodies like W3C, were quick to demonstrate that both IE and MSN were themselves substantially non-conforming: Web creator Tim Berners-Lee said, "I cringe…the propaganda involved is worrying…legislation is required."

It was unsubtle to coin the term "DownLevel" for all browsers other than Microsofts Internet Explorer. I encountered this term at Tuesdays Microsoft "DevDays" presentation on new development tools, where a new navigational aid for Web applications was proudly demonstrated – with the caveat that: "This only works in IE, of course: if you want to see how it looks in anything else, make your target a DownLevel browser." Yes, thats the keyword that gets used in application source code. More propaganda.

It was unsubtle of Microsoft to come into federal court, with an attitude of "This is our final offer," when the proposed final settlement of Microsofts antitrust case amounted to a no-limit hunting license. The specifics of the proposed settlement are astonishing; nine state attorneys general can take pride in having a functioning sense of smell.

The proposed settlement allowed Microsoft to impede the use of a competing middleware product unless its user interface was "of similar size and shape" to that of the corresponding Microsoft product. What about vendors who have genuine innovations to offer, in the pursuit of improved ease of use? Hewlett-Packard testimony during the initial District Court trial has documented the costs, to both resellers and users, of letting Microsoft dictate the form and function of the PC desktop.

The proposed settlement allowed Microsoft to give short shrift to any competing middleware product that sells fewer than a million units a year. This contravenes the appellate courts stern warning that antitrust law protects emerging competitors as well as those who are already well established. Without this settlement, Microsoft might have had to wonder if squashing a new competitor with sales of half a million units a year would bring the mob with torches to its door: now, the company has a license to kill. For that matter, as my colleague Tim Dyck asked me this afternoon, what about competing software that is given away rather than sold?

The proposed settlement allowed Microsoft to preserve secrecy around any Windows APIs associated with "anti-piracy, anti-virus, software licensing, digital rights management, encryption or authentication systems." Find me an API that has no connection with any of these functions, especially given the current trend toward pervasive technical measures for digital rights management.

Go ahead, Ill wait.

If these issues were too (ahem!) subtle to be understood by the court, then what about the proposed clause that defines a personal computer as one that has a keyboard? Did no one involved in this settlement ever see a Tablet PC demonstration? Look, Ma, no keys!

The settlement is proposed to have a term of five years. A year from now, what will be the role of the xBox (which Microsoft will sell below cost) as a home gateway to the Internet? Two years from now, what will be the role of Tablet PC (not to mention Pocket PC) devices as wireless gateways to the Internet? Three years from now, how many people will use voice-response systems in their cars as their mobile gateways to the Internet?

What will this settlement do to maintain competition for the role of gatekeeper, and to prevent the dominant platform from becoming the definer of acceptable content? No matter how carefully I read the proposed settlement language, I cant find cause for hope that it will do much.

No hope at all.