WinInfo Daily UPDATE, May 8, 2002

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May 8, 2002—In this issue:


  • Microsoft Remedy Hearings: Allchin, Security, Windows Demonstration, Digital Music


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(contributed by Paul Thurrott, [email protected])


  • Yesterday was a busy day at the Microsoft antitrust remedy hearings. Important developments included a hint from Judge Colleen Kollar-Kotelly that she is considering imposing at least some of the nonsettling states' more restrictive remedies.

    First, nonsettling states attorney John Schmidtlein concluded his cross-examination of Microsoft executive Linda Averett regarding Windows Media Player (WMP). Averett already made a couple of damaging admissions Monday, but Schmidtlein presented more embarrassing evidence yesterday morning. Discussing a new media-player feature in Internet Explorer (IE) 6 (part of Windows XP), Schmidtlein noted that this player doesn't work with third-party products such as RealOne and is instead hard-coded solely for WMP. "The reason it is not replaceable is that Microsoft does not allow it to be replaceable, correct?" Schmidtlein asked. "Correct, it is an integrated feature," Averett responded.

    RealNetworks apparently brought the IE/WMP integration to the states' attention. RealNetworks, maker of RealOne, had complained that Microsoft's media player often overrides user preferences. And another intriguing RealNetworks' claim brought forth yet another embarrassing statement from Averett. Responding to a complaint that XP's search function specifically ignored RealNetworks' files, Averett denied the behavior was intentional. "It was clearly a mistake by the search team," Averett said, noting that Microsoft fixed the behavior after hearing about it during the remedy hearings' opening arguments. Yes, seriously.

    Later in the day, nonsettling states attorney Kevin Hodges cross-examined Microsoft Group Vice President Jim Allchin, who played the security card, stating that Windows would be less secure if the court forced Microsoft to comply with the interoperability provisions of the states' proposed remedy. "\[The states' plan\] would make it easier for hackers to break into computer networks, for malicious individuals or organizations to spread destructive computer viruses, and for unethical people to pirate \[Windows\]," Allchin said. But Hodges noted that Microsoft's products were already the target of attacks and wondered how making Windows more interoperable would harm anything. "I guess it's a matter of how hard you make it," Allchin responded. "We have to work on our reputation for security in the marketplace."

    Hodges then told Kollar-Kotelly that the security exemption in the Department of Justice (DOJ) settlement was a "loophole" under which Microsoft would be able to circumvent any remedies. "That's a mischaracterization," Allchin said. "\[The security exception\] enables Microsoft to safeguard our customers' computer installations without denying competitors information they might want to use."

    Allchin also responded to charges that Microsoft is using Windows XP as a way to force Web services on its customers. The company bundles Windows Messenger with XP and forces people to sign up for its .NET Passport service to access certain features, Hodges said. "We are not trying to force anyone to use Microsoft products," Allchin testified. "We are instead seeking to make our products more attractive through innovation and by increasing their ability to interoperate with a broad range of existing software code."

    The most stunning news of the day, however, came late in the day when the judge announced that she would let the states present additional evidence; her decision surprised Microsoft's lawyers and most onlookers. The states had asked Kollar-Kotelly for a chance to show her a version of XP Embedded—the modular Windows version that has come to the forefront in these hearings—in which end users can remove parts of the OS, a feature that isn't present in the shipping version of XP Embedded. The judge said she would let former Microsoft employee James Bach present a video or live demonstration. Bach will contradict Microsoft Chairman and Chief Software Architect Bill Gates's testimony that removing bundled applications from Windows would "shatter" the product, the states lawyers say.

    Legal experts point to this unexpected allowance as a sign that the judge is seriously considering imposing at least some of the states' more severe remedies. If Kollar-Kotelly does approve plans for a more modular Windows version, the decision would force Microsoft to reengineer Windows to give customers, PC makers, and IT administrators more fine-grained control over the software installed on their systems. Testimony from Averett and others (which demonstrated that Microsoft "integrated" various Windows components to shut out competitors, not to aid consumers) can only have helped the judge make her decision about the new evidence. Given Microsoft's earlier guilty verdict, which involved, in part, unnecessary code commingling, the company's decision to continue artificially commingling WMP, IE 6, and XP code could come back to haunt it, especially if Bach can pull off a smooth presentation next week. Stay tuned.



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