DOJ Releases Select Microsoft Case Feedback

The US Department of Justice (DOJ) has published 47 examples of the extensive feedback it received during the 60-day public-comment period relating to the proposed Microsoft antitrust settlement. Most of the feedback is negative and opines that the proposed settlement among Microsoft, the DOJ, and nine US states is unsatisfactory. About two-thirds of the more than 30,000 public comments that contained an opinion about the settlement criticized the DOJ for striking a deal that lets Microsoft conduct business as usual, despite the fact that the company was found guilty of sweeping antitrust crimes.

Some comments came from Microsoft competitors and others with obvious bias. However, Sony, a Microsoft partner, filed comments against the settlement, noting that a provision in the agreement that would require Microsoft to offer PC makers "licenses on uniform terms and conditions" to prevent the company from harming its partners has already had the opposite effect. Sony says that Microsoft informed Sony that it was voluntarily adopting the conditions of the proposed settlement and that the new "uniform terms and conditions" would require Microsoft to break any previous licensing agreements.

"Microsoft has been \[adjuged\] to have illegally maintained its \[OS\] monopoly in violation of the Sherman Act," Sony's comments read. "This raises the possibility that Microsoft will use its monopoly power to force its OEM licensees to give up intellectual property rights, thus affording Microsoft the opportunity to expand its power. In \[its current agreement with Microsoft\], Sony has negotiated narrow non-assertion covenants to reduce this possibility. \[But\] Microsoft maintains that the Proposed Judgment precludes it from accepting the non-assertion covenants in the \[existing agreement, which it\] freely negotiated and signed last year with Sony. Microsoft insists that, in order to comply with \[the settlement\], Sony must agree to new 'uniform' non-assertion covenants that may weaken previously negotiated protections for Sony's intellectual property. If Sony is forced to agree to these changes, the new license agreement would diminish Sony's ability to assert its patents, particularly in markets outside the operating system market, and thereby may enable Microsoft to expand its power into new areas."

The New York Times filed comments against the settlement, primarily related to the lack of public disclosure about participants in the meetings leading up to the settlement. "The New York Times respectfully submits that Microsoft's disclosures are inadequate to assure the Court and the public that the parties agreed upon the revised proposed Final Judgment at arms length and without the exertion of any improper or undue influence," the submission reads. "The public has a statutorily recognized right to information sufficient to make this determination. For this reason, The New York Times respectfully suggests that Microsoft should be required to supplement its disclosures to: (1) identify the location, date, and, where possible, time of each communication; (2) identify the names and titles of all persons present for each communication; (3) state the purpose of the participation in each communication by those other than counsel of record; (4) describe the substance of each communication; (5) disclose any other required communications, if necessary; and (6) certify that there exist no further communications required to be disclosed."

The Washington Legal Foundation came out in favor of the settlement, noting that it was "the result of intense negotiations with the assistance of two of the nation's top mediators." The foundation said that the settlement is "a rational resolution to a case formally initiated in May 1998, but effectively tracing its roots to a \[Federal Trade Commission--FTC\] investigation begun more than a decade ago, therefore now rivaling in time and burden the IBM antitrust litigation of the 1980s. The matter is overly ripe for resolution, and the States \[that\] have declined to join the settlement should in our judgment be urged by the Department and the Court to reconsider and adopt it."

The foundation also says that the Appellate Court considerably narrowed the government's case against Microsoft when it remanded the Windows and Internet Explorer (IE) tying complaint. "In light of the demonstrated insistence of consumers on a browser-operating system combination, the \[DOJ\] determined not to pursue this claim," the foundation comments read. In light of this turn of events, the settlement is more than adequate, the foundation believes.

Whatever you think about this case, the public comments will probably have an effect on its outcome. Microsoft and the DOJ have publicly recognized that public opinion is against the agreement and have asked for and received a chance to revise the settlement after a brief hearing before Judge Colleen Kollar-Kotelly early next month. To read the major comments, visit the DOJ Web site.

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