Gates: Case could be settled if...

By John Fontana
Network World, 05/10/00

LAS VEGAS - Microsoft Chairman Bill Gates says the government's proposal to break up the company includes a number of deficiencies that ensure consumers get "screwed." However, the feisty software titan said that if he can protect the Windows trademark and retain the right to add Internet support to the software he would be open to a settlement in the ongoing antitrust case with the government.

Microsoft Wednesday submitted its proposed remedies in the case, but Gates was quiet except for a few prepared statements issued in a press release.

But the day before, Gates told Network World in an exclusive interview that there was no way the government could dictate the development of software as well as the marketplace has. Consequently, consumers will lose out.

"What the government is trying to say is that the Office user interface and the Windows user interface divert from each other so that they should be incompatible. They don't want the Windows company to ever talk to the Office company, so when you call up to get support, if you have anything that falls between the boundaries of those two things they are going to guarantee that you are screwed," Gates says. " And there are dozens of things like that in [the government's proposal]."

Microsoft Wednesday submitted its remedies proposal to a federal that outlined restrictions on its conduct and calling for an immediate rejection of the government's proposal to split the company into two parts, one focused on the operating system and the other on the applications, including Office. Among other things, the government proposal prohibits the two companies from entering into any business agreements or sharing of technology, such as APIs.

"The [government's] expertise is not what customers need in this world of software," Gates says. "And so the regulatory approach they come up with obviously is not going to work as well as the marketplace has worked on these things."

He says Microsoft is disappointed the case hasn't been settled and he is still open to that possibility. But he said any settlement must align with two specific requirements - that Microsoft can still enhance Windows with Internet support and that the integrity of the Windows brand is maintained.

"Those are the only really core things, where we say, that it is not about Microsoft, that it is about what we brought to the industry that created the PC revolution. People knew what MS-DOS was, people know what the various versions of Windows are, and we drive that forward with new things including support of the Internet."

Gates says being able to enhance Windows with Internet support is something Microsoft should not agree to block because it would not be good for consumers.

He said if there was an agreement that Microsoft's choice of designing software to support the Internet was a legal and a "great thing" for customers, "I'm sure we would have some kind of a settlement."

But he says the government disagrees with Microsoft's software design. "They don't agree that putting Internet APIs into Windows, or putting the browser into Windows, was a good thing."

Gates also said that the settlement must protect the Windows trademark.

"The name Windows has some integrity, the [government's] whole intent is that somebody can rip out part of Windows, change the user interface, and do whatever they want and call it Windows. And we say, if people do those things that is OK, but it shouldn't be called Windows."

He said that consumers who buy a computer that says it runs Windows should be assured the operating system is what they have read about or used on another machine and that the compatibility testing that Microsoft does is available.

"The idea is that the Windows trademark ought to mean something. People ought to know about that."