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Best of CUSM: Microsoft settlement 2001/11/03

© December 2004 (various authors)

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From: <not-for-mail@no-spam.net>
Subject: Open Letter to CA Attorney General Bill Lockyer
Date: Sat, 03 Nov 2001 20:08:08 GMT

Attorney General Bill Lockyer                              11/02/01
California Department of Justice
Anti-Trust Division, Public Inquiry Unit
P.O. Box 944255, Sacramento, CA 94244-2550

U.S. Attorney General John Ashcroft and Assistant Attorney General
Charles James, in their tentative settlement with Microsoft, have
utterly failed to enforce the Sherman Anti-Trust Act. None, not a
single one, of the consumer benefits outlined in James Love and
Ralph Nader's "A Very Public Remedy" (L.A. Times, 12/13/99,
https://www5.law.com/dc-shl/display.cfm?id=2411) would be achieved
by the limited number and scope of stipulations outlined in the
proposed Final Judgment.

The hardest hit by this abomination of America's laws and legal
system are in Silicon Valley.  Much of the software that is developed
here depends on the interoperability of applications, operating
systems, networking protocols, and data file formats.  Microsoft's
continued monopoly leverage over these foundations of information
technology bodes ill for technology in general and the Valley in

Many business have already been harmed by Microsoft's corruption
of once open network standards from TCP/IP to Java to Kerberos.
Even MSDN developers, who were counting on this suit to provide
them some relief from Microsoft's abusive licensing terms and
monopoly pricing, are outraged. Many others will continue to suffer
from viruses, data loss, poor security, and financial hardship due
to the lack of MS compatible software.

I urge Attorney General Lockyer and the other states' Attorneys
General to reject this proposed Final Judgment, to request that
U.S. District Judge Colleen Kollar-Kotelly reject the proposed
Final Judgment, and to work towards a settlement which will
substantially restrict Microsoft's illegal and destructive business

Since so many others have said it better, I've included just a few
of their comments from the last 24 hours below.

From Dan Gillmor, San Jose Mercury News, November 2, 2001


A Fraudulent, Cynical Settlement

Well, "sellout" wasn't too strong a word to describe the U.S. "Justice" 
Department's settlement (press release) with Microsoft. Neither is 
"dangerous." (Here's the full text.)

This deal, assuming it takes hold, is not even a wrist slap. It's a love 
letter to the most arrogant and unrepentant monopolist since Standard Oil. 
It's an invitation to keep on plundering and whacking competition in the most 
important marketplace of our times, the information marketplace.

"The goals of the government were to obtain relief that stops Microsoft from 
engaging in unlawful conduct, prevent any recurrence of that conduct in the 
future, and restore competition in the software market-we have achieved those 
goals," Charles James, the head of the department's antitrust division, said 
in a statement released Friday in Washington.

Those may have been the goals, once upon a time. But James and his quisling 
colleagues didn't come close. What's more, they surely know it.

Bill Gates' own statement would be amusing if the situation were less 
disturbing. The deal, he was quoted as saying, "imposes some very tough rules 
and restrictions on our business." That unctuous garbage is about what you'd 
expect from a man who made it clear that his company would never agree 
willingly to any serious curbs on its behavior.  Microsoft still hasn't made 
any such agreement.

The settlement not only doesn't doesn't even force the company to stop doing 
what eight federal judges found illegal, but it provides no penalty for the 
illegal acts. Locking in the ill-gained profits of crime -- bank robbers wish 
they could get such dispensation.

Who gets to monitor this malodorous deal? Why, the same Justice Department 
that made it, with no input from the states or anyone else apart from a 
"Technical Committee" that keeps an eye on the company's behavior. The work 
and findings of this committee, which will be appointed by the department and 
its new pal, Microsoft, will be a state

In the alleged concessions on future behavior, Microsoft gives up almost 
nothing that matters anymore. A couple of the measures, such as giving 
computer makers modestly more freedom, might have made a difference five years 
ago. They are close to meaningless today, given the pervasiveness of the 

So where do we go from here? Just where Microsoft wants us to go,

The states knew they were going to be sandbagged on this case. The Bush 
administration hasn't hidden its intentions to let the lawbreakers go free. 
The fix was in, and everyone knew it.

Will the states fold, too? Many will, no doubt. Mere state governments don't 
have the money to fight a monopolist that generates more than $1 billion in 
extra cash every month, just a portion of the profits that even in an economic 
downturn keep rolling into the coffers.

Some states will probably keep fighting. Despite having won a case that showed 
Microsoft to be a sneering, brutal lawbreaker -- with no intention of 
reforming -- they're now total underdogs.

The next step is a Tunney Act hearing, where the judge is supposed to 
determine if the settlement is in the public interest. The last judge who held 
a Tunney Act hearing on a Microsoft antitrust settlement was so incensed by 
what he saw that he, like the judge in the trial, shot off his mouth and got 
tossed off the case.

The European Union is also a slender reed of hope. But the EU will be under 
enormous pressure from the U.S. to go along.

With a nation and world preoccupied by terrorism and war, the Bush 
administration has awarded the hen house to the meanest fox in the woods. The 
message to corporate America is simple. Do whatever the hell you want, because 
antitrust law is effectively dead. Ideology and money have triumphed over 
common sense and competition.

What a sham. What a shame.

From the S.F. Chronicle:

Quoting David Readerman, an analyst at Thomas Weisel Partners: "From what I 
make out of the tentative agreement, I don't see any substantive change to 
their business model"

From Slashdot.Org (https://slashdot.org/article.pl?sid=01/11/02/

J. No provision of this Final Judgment shall:

1. Require Microsoft to document, disclose or license to third parties: (a) 
portions of APIs or Documentation or portions or layers of Communications 
Protocols the disclosure of which would compromise the security of anti-
piracy, anti-virus, software licensing, digital rights management, encryption 
or authentication systems, including without limitation, keys, authorization 
tokens or enforcement criteria; or (b) any API, interface or other information 
related to any Microsoft product if lawfully directed not to do so by a 
governmental agency of competent jurisdiction.

2. Prevent Microsoft from conditioning any license of any API, Documentation 
or Communications Protocol related to anti-piracy systems, anti-virus 
technologies, license enforcement mechanisms, authentication/authorization 
security, or third party intellectual property protection mechanisms of any 
Microsoft product to any person or entity on the requirement that the 
licensee: (a) has no history of software counterfeiting or piracy or willful 
violation of intellectual property rights, (b) has a reasonable business need 
for the API, Documentation or Communications Protocol for a planned or 
shipping product, (c) meets reasonable, objective standards established by 
Microsoft for certifying the authenticity and viability of its business, (d) 
agrees to submit, at its own expense, any computer program using such APIs, 
Documentation or Communication Protocols to third-party verification, approved 
by Microsoft, to test for and ensure verification and compliance with 
Microsoft specifications for use of the API or interface, which specifications 
shall be related to proper operation and integrity of the systems and 
mechanisms identified in this paragraph.

So right off, this means that Microsoft can continue to do whatever they want 
with MS-Kerberos and don't have to give out the source code or license the 
patented parts, because it's an "authentication system". Same goes for 
Passport. And this is just the beginning, because Microsoft can embed whatever 
they want into the security, authentication, etc., subsystems, there is no 
language to prevent this. And they will, they've got a history of doing 
exactly that, look at how parts of the IE code got mingled with unrelated 
library files to support Microsoft's IE bundling strategem.

This settlement is worth exactly as much as the 1995 consent decree.

The deal would require Microsoft to give independent monitors full access to 
its books and plans for five years to ensure compliance and to provide 
information to help rivals make products compatible with its dominant Windows 
operating software.

Like the title says. I'm sure the second the independant inspectors look at 
things, Microsoft will be as unwelcome to them as Bagdad was to the UN 

Inspector: "Look, we have this document that proves your violating the 

MS: "No, I'm sorry, that document is copyrighted and protected by patent law. 
You can't show that to anybody."

In III.A: Nothing in this provision shall prohibit Microsoft from enforcing 
any provision of any license with any OEM or any intellectual property right 
that is not inconsistent with this Final Judgment.

Put that together with III.J: J. No provision of this Final Judgment shall... 
Require Microsoft to document, disclose or license to third parties: (a) 
portions of APIs or Documentation or portions or layers of Communications 
Protocols the disclosure of which would compromise the security of anti-
piracy, anti-virus, software licensing, digital rights management, encryption 
or authentication systems, including without limitation, keys, authorization 
tokens or enforcement criteria

We've all seen the proposed text of the SSSCA. That says that
everything which processes digital information must have security
protocols for enforcing digital "rights", i.e. copyrights. Even
though signs are promising that the SSSCA per se will go down in
flames, it's not too much of a stretch to suppose that some
legislation, at some point, will get passed which does define
anything capable of processing digital data as capable of illegally
copying intellectual property-- since it, of course, is. So, put
that together with this loophole up here, and suddenly Microsoft
can argue that they don't have to tell anybody absolutely anything
about any of their protocols because it would "compromise anti-piracy

Never mind the whole Microsoft "security through obscurity" argument: they're 
always saying that Windows is more secure because nobody sees its source code, 
so therefore it's harder to hack into those systems. We know it's bull$#!+, 
but they argue it a lot. It doesn't take much of a stretch for them to argue 
that their protocols are more secure if they are hidden... and then they can 
rest nicely in this loophole right again. They can continue "embrace and 
extend" monopolistic policies, making their own protocols and keeping them 
hidden, while claiming to maintain full compliance with this judgement, since 
after all they're only keeping the stuff hidden for "security reasons."

Microsoft has been slapped with a wet noodle. This is ridiculous.

Remember all of this resulted origionally from the DOJ talking MS to court 
when they violated their last consent decree with Win98/IE integration.  That 
was 3 years ago. There are some points to keep in mind.  1. MS fought over the 
language in one sentence that the DOJ, or noone else noticed, that made the 
entire concent decree totally unenforceable.  (something about the vague term 
"consumer benefit") 2. When the DOJ tried to stop IE/Win98 using the Consent 
Decree, they were eventually over turned when CLEARLY the Consent Decree was 
meant to stop MS from bundling, even if the a few words allowed them to wiggle
out of it.  3. It took YEARS after this mess to get any form of judgement 
against MS, when any moron can clearly see they have a 90+% control over the 
computer market and use that control to run other companies out of business.

So...People should scour the judgement for ANYTHING that could remotely let 
them wiggle out of any part of the judgement. It's there, I guarantee you. Not 
only that, NOTHING stops MS from totally ignoring the consent decree because 
by time the DOJ or anyone else gets around to actually getting a legal 
judgement, whatever MS did would be irrelevent and irreversible. Any 
complicated consent decree is crap and is most likely unenforceable (due to 
the possibility of making "complicated" legal aguements that can tie of the 
system).  Which is why I would propose the following SIMPLE easy to enforce 

1. MS charges all OEMs the SAME price for Windows regardless of who they are.

2. MS should not be allowed to buy any companies, patents, or technologies for 
at least 5 years.

3. MS should not be allowed to license any additional technologies, patents, 
source code or ideas for at least 5 years.

4. OEM's should have the right to make any changes to Windows they think their 
customers want, including but not limited to removing any feature, or 
technology from Windows and replacing it with their own. 
The settlement terms stipulate that Microsoft may not retaliate against an OEM 
for distributing a dual-boot system. It does not prevent Microsoft from 
retaliating against OEMs for distributing Linux-only

From my admittedly non-expert reading of the settlement, OEMs may develop, 
use, distribute, sell, and promote alternative operating systems like Linux 
without fear, but when it comes to shipping said operating systems with a 
personal computer, the document has this to say:

Microsoft shall not retaliate against an OEM [for] ... shipping a Personal 
Computer that (a) includes both a Windows Operating System Product and a non-
Microsoft Operating System, or (b) will boot with more than one Operating 

These terms are terrible for Linux, because it means that the big OEMs will 
still have to include Windows on every system. It's no better than the bad old 
days where OEMs were charged a license for every machine shipped, Windows or 

When I originally heard about this, I thought that five years was a short 
amount of time. Even more so now that I read the press release. 

Okay. Assuming in year 1, Microsoft publishes all of its proprietary 
protocols. Your company makes a program that goes head-on with something of 
Microsoft's. (Say, an Exchange server on Solaris, or something.)

You've got a few years to make improvements and get a really reliable and 
feature-filled product. Microsoft will probably throw a few kinks your way, 
but that's fine.

What I am wondering is... the start of year 5. I would bet money that 
Microsoft would go back to something new and proprietary, and my company would 
be locked out again. So what real incentive do I have to create a competing 
product that I know won't be around five years from

The terms against Microsoft are pretty good, but the five year window really 
lessens the blow. (Even more so when you know they'll wiggle against those 
terms all during the five years.) But I don't see it as being a big win for 
competition. Maybe a small window that a few can get some short-term punches 

...achieving prompt,
effective and certain relief for consumers and businesses.
(from the press release)

Prompt? After five years? Is that really prompt?

Effective? about the only thing the justice department has proven itself to be 
effective at is in lawyering. Short of actually whimpering and running out of 
the courtroom they have all but thrown in the towel.

Certain? Oh please, the certainty of this settlement can be easily seen 
reflected in the stock market. If the market had faith that microsoft was 
being forced to behave fairly, then the competitors to and middleware 
providers of software to microsoft would be jumping up. Borland, Symantec, 
Roxio, Corel. But it is not happening, because nodoby is buying the bull. I 
feel, as the market does, that microsoft will pay no attention to this 
directive, as it has not paid attention to any other court orders in the past.

The deal is for five years, but it takes Microsoft around 2 or 3 years to come 
out with a new version of Winows and other software. So... the deal doesn't 
seem like it will have much of a lasting effect.

Also, there is a section about disclosure of server protocols, they left out 
what is the most important part: Document Formats. If Microsoft didn't have a 
monopoly on .doc and .xls, don't think for a minute that offices wouldn't 
switch to something else.

Microsoft has a monopoly on word processors and spreadsheets. And Microsoft 
keeps changing the internal file formats for these (.doc and .xls files).

Since Microsoft has a monopoly, competitors (e.g. StarOffice) can only 
realistically compete if they can read and write Microsoft file formats.  
Competitors, however, cannot do this reliably if the formats keep changing.

In other words, the DoJ settlement does not do what is necessary to introduce 
competition into the software-applications market. So, it seems to be a 

At first I missed the slash in there, and I thought that Microsoft had bought 
out the DOJ and changed it's name to MS DOJ. Well at least I can breathe a 
sigh of relief... for now.

In III.A: Nothing in this provision shall prohibit Microsoft from enforcing 
any provision of any license with any OEM or any intellectual property right 
that is not inconsistent with this Final Judgment.

III.J: J. No provision of this Final Judgment shall... Require Microsoft to 
document, disclose or license to third parties: (a) portions of APIs or 
Documentation or portions or layers of Communications Protocols the disclosure 
of which would compromise the security of anti-piracy, anti-virus, software 
licensing, digital rights management, encryption or authentication systems, 
including without limitation, keys, authorization tokens or enforcement 

Gee, Sun, Apple and GNU/Linux guys, we'd love to give you access to all of our 
specs, but you see, we're so security conscious that we have security 
protocols at all levels. Yes we do. Or software licensing. Or digital rights 
management, or encryption or authentication protocols. In fact, we can't find 
a single source file that's free of at least one of these. So you can look, 
but then we'll have to kill you.

And we'd like nothing more than to let you OEM guys unininstall components, 
but, you see, it turns out that anything you want to
unbundle will be, I mean, is central to our security and content protection 
system. Yes, that's right. Instant messenging, browsers, media players, you 
name it, it's vital.

You don't think so? OK, back to court. Is a three year case OK with you? That 
should give us time to get another OS out, make your case irrelevant, and 
insure that the penalty is another (snigger) conduct (giggle) remedy.

Take a look at section III.J, which shields Microsoft from having to disclose 
any authorization or authentication wire protocols. This loophole would allow 
Microsoft to maintain the secrecy of their BDC and PDC protocols, thereby 
locking out Samba. Ditto the III.J terms which require the company to have a 
'verifiable business plan', on Microsoft's terms, in order to get release of 
this information. Likewise, Microsoft is able to force vendors who get access 
to the API's and protocols not to release them to the public.

All of these terms put together will shield Microsoft from revealing any 
interoperability information if the protocol in question includes 
authorization or authentication (which all protocols of significance will do), 
and will shield Microsoft in any case from having to let the grubby open 
sourcers get their hands on the info.

Yuck. Microsoft has very good lawyers, indeed.

If I understand this correctly, this means that computer makers can sell Linux 
or *BSD boxes (or OSless) without retaliation. Does this mean no Microsoft 

The problem being that such such arrangments are almost never written down on 
paper, never discussed except among "family", and never enforced in public.

So XYZ Computer Company decided to take this anti-trust thing seriously and 
offer Netscape on the desktop, eh? No problem - we will just "forget" to renew 
their Windows license at the end of the year. Nothing deliberate; just an 
oversight. Of course, since they are no longer a licensee, when they do renew, 
they will be in a 200% higher price bracket. Sorry about that, but we enforce 
those rules on everyone. And by the way, the BSA will be around to audit you 
and your customers next

Anyone who has worked for a major corporation knows how these things are done. 
As did Judge Jackson, which is why he recommneded breakup. Oh well


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