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Microsoft antitrust compliance raises concerns
US government says ruling could be "prematurely obsolete" if Microsoft goes ahead with unreasonable licencing terms

By silicon.com

Published: Friday 04 July 2003

The US Justice Department is claiming Microsoft still has not fully complied with a key provision in its landmark antitrust settlement with the government. In a report to a federal judge, attorneys with the department said they "remain concerned" about the price Microsoft plans to charge competitors to view the inner workings of the Windows programme, which is a requirement under the antitrust settlement. The department is still not satisfied with the royalty structure and rates Microsoft has proposed to charge for access to the computer code needed to make server software function properly with the Windows operating system. The licensing terms could be important to companies such as Sun Microsystems that are battling Microsoft in the market for software that run servers, the powerful machines that manage computer networks. The report to US District Judge Colleen Kollar-Kotelly was aimed at keeping the judge updated on Microsoft's compliance with the settlement. As part of the settlement, Microsoft had promised to licence the code, or protocols, on "reasonable and non-discriminatory" terms. However, Microsoft rivals, who opposed the settlement, have since complained to the department that the licensing terms are anything but reasonable. In April, under pressure from the department, Microsoft said it had agreed to make it cheaper and easier for competitors to licence the code. Microsoft spokesman Jim Desler said the company has complied with the settlement, but "is open to considering additional feedback from government and industry".

Desler said: "We've worked together and made some initial changes to this complex and unprecedented programme and we will continue to work together." The Justice Department told the judge that complaints about the licence terms made up the majority of the 18 "substantive" complaints about Microsoft compliance. The department is particularly concerned that competitors have access to the server protocols because the provision is - in the judge's words - the most "forward-looking" part of the settlement, which is designed to restore competition. The department quoted further from Kollar-Kotelly's opinion in the case, saying the settlement could end up "prematurely obsolete" without licensing the code under reasonable terms. The Justice Department agreed to the settlement in November 2001, saying the business restrictions in it would restore competition to the software business and prevent Microsoft from engaging in anticompetitive tactics. The settlement, endorsed a year later by Kollar-Kotelly, resolved findings that the company abused its monopoly in PC operating systems. Ken Wasch, head of the Software & Information Industry Association, said problems with the licence terms are no surprise.

Of the four companies that have agreed to licence the server protocols, Wasch said, none compete directly with Microsoft. He said: "The disclosure of these protocols is a critical part of what the government claims it won from Microsoft in the settlement, and now we find that that critical part of the settlement is not in practice providing any relief whatsoever to the industry."

Other terms of the settlement gave computer manufacturers greater freedom to feature non-Microsoft software by allowing them to hide some Microsoft icons on the Windows desktop.