Microsoft Consent Decree, Phase X

In November 2002, Microsoft agreed to abide by the terms of a consent decree with the department of justice and most of the states after the antitrust ruling against Microsoft. The decree included a number of milestones, which you can find described on numerous sites, including Microsoft's (http://www.microsoft.com/about/legal/settlementprogram/default.mspx). The decree states that third parties may submit complaints concerning Microsoft's compliance with the Consent Decree.

This decree was supposed to expire November 12th of this year (this past Monday). However, at the last minute it was temporarily extended – temporarily meaning a decision will be made no later than January 31, 2008. So what happened?

Some of the states such as New York, California, Connecticut, Iowa, Kansas, Minnesota, Massachusetts, and the District of Columbia (not technically a "state") are now seeking to extend the decree for an additional five years, as they claim it hasn't diminished Microsoft's monopoly. However, Judge Colleen Kollar-Kotelly says the decree wasn't supposed to do that - it was to correct anti-competitive policies.

Judge Kollar-Kotellly (who has been called Microsoft's probation officer), extended the decree and gave Microsoft, the Department of Justice (DOJ), and the states time to respond. Microsoft of course, opposes an extension. The DOJ filed an amicus brief siding with Microsoft, arguing that the consent decree has been effective and that competition will not be undermined in the software market if the decree was allowed to expire as originally intended. The states have until November 16th to respond. They want to be sure that Vista complies with the consent decree, and the DOJ says that it does.

Some other interesting developments in this case include Google's actions in June of this year, when it was disclosed that the company had petitioned the US government to extend its oversight of Microsoft's business practices. Google claimed that Microsoft is continuing to abuse its monopoly and violate the terms of the decree. Those concerns included Microsoft's including its desktop search product as a part of Windows Vista - since having both search engines running slows down the PC. Google claimed this was is in violation of the judgment in the antitrust case [which requires Microsoft to allow end users to remove middleware; although it is not clear that search engines were considered middleware at the time of the decree, and search engines was not one of the 5 categories specified by the decree]. Microsoft, in SP1 is fixing this problem in Vista, although that has not stopped Google from continuing to complain. Google and Microsoft have been at each other’s throat for some time.

While Microsoft (of course) says its been meeting competitors such as Google half-way, the competitors will always want more. That's the nature of the beast.

Interestingly enough, Microsoft claims that Google's success in itself is a notable example of how open and competitive the software industry has become! Its not unprecedented for Microsoft's attorneys to cite a competitor's success this way. During the European Commission case, Microsoft pointed to the success of Apple's iTunes as an example that competition was thriving in the market for digital media players (see my previous blog entry discussing this at http://www.networkworld.com/community/node/20074). The success of Flash, which is on almost 100% of computers, is also used as evidence of the level of competition in the industry.

This is an issue on which few people have a neutral opinion. Either you love Microsoft or you hate it. The question is: has the consent decree accomplished what it was intended to do? Was the consent decree even needed? That is the important question, not whether Microsoft screwed up its testimony (in the case) about removing Internet Explorer from Windows 98 or if Bill Gates wasn't photogenic for his video-taped deposition. But where Microsoft is concerned, debates seem to center on whether you like the company or not.

• Microsoft
• antitrust
• consent decree
• Desktop Search