U.S. DOJ working hard to ensure Microsoft’s slap-on-the-wrist terms apply to Longhorn

“Microsoft Corp. will meet with representatives from the U.S. Department of Justice (DOJ) next month for the first of several briefings intended to ensure that its upcoming Longhorn operating system complies with the terms of the final judgment in the government’s antitrust case against the software maker,” James Niccolai reports for IDG News Service.

Niccolai reports, “In court papers filed Tuesday, the government also said that its technical committee raised concerns about whether Windows XP and Service Pack 2 are in compliance with the judgment. Microsoft replied to those concerns recently and the government is reviewing its responses, it said.”

“The developments are outlined in a joint status report filed by Microsoft and the DOJ on the software maker’s progress in complying with the judgment, approved in November 2002. Among the requirements, Microsoft has to make it easy for customers to use non-Microsoft middleware products with its operating systems, including Web browsers and media players. The goal is to prevent Microsoft from using the ubiquity of Windows to lock rivals out of the market,” Niccolai reports. “The government already said it was talking to Microsoft about ensuring Longhorn’s compliance with the measures.”

Full article here.

MacDailyNews Take: The U.S. DOJ’s neutered “remedies / penalties” in the Microsoft antitrust case amounted to a sad joke. No doubt they’re working extremely hard to make sure Microsoft complies with their weak, spineless terms.

30 Comments

  1. since the iPod is essentially a platform, it won’t be long before companies complain about being locked out of the iPod.

    “Microsoft has to make it easy for customers to use non-Microsoft middleware products with its operating systems”

    they could make a similar ruling about Apple

  2. hey gRen, who’s forcing u to use an iPod? u can use any MP3 player. Also, iPods work on both Macs & Win2000 / XP. Nor do iPods/iTunes don’t disable other MP3 player(dont bring up Real, that was/is a mess). In fact, my co-worker doesn’t see the need 2 use an iPod. He’d rather use another MP3 player & music service. in other words, u still got choice. I myself jus listen to CDs. I don’t mind paying more to have physical disc & liner notes.

  3. Gar,
    It’s a bit more complicated than that.

    “who’s forcing u to use an iPod? u can use any MP3 player”
    – With Microsoft, just like in your comparison, you can choose to use it or choose not to use it.

    “iPods work on both Macs & Win2000 / XP”
    – Windows works on a Dell/HP/IBM/Compaq/Gateway/etc.
    – an OS is not a competitor to an iPod just like a computer manufacturer doesn’t compete directly with Microsoft. What makes something anti-competitive is how it deals with the competition.

    With Windows you can even choose which software you want to run on it. But yet it is still anti-competitive, even though you can use the competitors software. However, you can’t use competing software with the iPod. It can also be said that Apple is stifling competing music download services by not allowing legally purchased songs to be played on an iPod.

    Personally, I am not really bothered much by Apple’s closed-system stance. I would prefer to use the iTMS and iTunes over any other alternative out there. And doing so makes the whole experience seamless and enjoyable, which wouldn’t be possible if you used outside software.

    I’m not really trying to argue, and I’m not trying to justify the actions of Microsoft. I’m just saying that people (and likewise the DOJ) might see Apple as being anti-competitive. Even if they use iTMS and iTunes, they still want to have the choice available to them to use something non-Apple. The fact that you can’t makes it anti-competitive, and they may end up being in a situation similar to what Microsoft is in now.

    I never liked the whole magic word thing, but mine is “open” which i think is worth mentioning.

  4. Apple’s ipod and itunes combination is not stopping people enjoying music or is not forcing people!

    If people want to use another music player all they have to do is write a cd with the songs on and then import them into whatever music software they want to use and in any format they want.

    They can then use any music player.

    This is NOT anti-competitive.

    Put it this way – if this was M$ you wouldnt even have that option!

  5. Ipod, Ipod, Ipod ….. zzzzzzzz

    This story is about M$ and the DOJ – if they are already questioning M$ compliance with the ruling with XP SP2 then longhorn is clearly gonna be more of the same.

  6. king_alvarez: “With Microsoft, just like in your comparison, you can choose to use it or choose not to use it.”

    Wrong. Microsoft was found guilty of ABUSING its monopoly status.

    ABUSING one’s monopoly status is LEGALLY DIFFERENT than simply being a monopoly.

    One of the most famous anti-trust case arose from the U.S. breaking up Standard Oil, which was owned by John D. Rockefeller. Rockefeller at the time had a wealth equivalent to 2.5% of the entire U.S. GDP, which would make him worth $250 billion today (Bill Gates is worth less than $50 billion). Standard Oil was the biggest, baddest monopoly you’d ever seen and Rockefeller used that power to his unfair advantage. Specifically, he wielded his power to extort the railroads to give him extremely preferential discounts on moving that oil, essentially making it impossible for other oil companies to stay in business. For this anti-competitive practice, Standard Oil was sued and successfully broken up.

    Microsoft has abused its monopoly power in similar ways. In Microsoft’s case, they used their monopoly power to prevent or discourage, for example, PC makers from pre-loading alternative OSes in their boxes. Microsoft specifically tied IE into the core of the Windows so the two became inseparable, for no other reason than to kill Netscape and make sure no one, including the U.S. government, could force them to “unbundle” IE and ship a version of Windows that PC manufacturers ship with with, say, Mozilla or Firebox instead of IE.

    In the anti-trust case prior to this one, Microsoft “complied” with the court ruling by offering a version of this IE-less Windows to manufacturers….except that this Windows wouldn’t even boot up because Microsoft had successfully tied IE to Windows, which conveniently allowed them to saythen said, “See, no one wants to buy Windows without IE anyway! IE is that popular! But we are a nice, law-abiding company. (Nevermind that we tied IE to Windows specifically so that an IE-less Windows wouldn’t even work.)”

    In contrast, Apple may have a monopoly on digital music and portable players with the iPod/iTunes, but Apple is what is considered a “natural” monopoly. Apple does not force anyone to preload iTunes on their machines. It does not force restrictive contract terms on companies that sell the iPod like Microsoft does with Windows. If you remove iTunes from a Mac or Windows, everything continues to work perfectly.

    In short, it is illegal under U.S. antitrust law to abuse your monopoly power, but it is perfectly legal to be a “natural monopoly.” U.S. anti-trust law also does not look kindly on monopolies who use their monopoly to create another monopoly. To equate Microsoft’s actions with Apple’s shows a distinct lack of understanding about anti-trust laws.

  7. NewType,
    I appreciate your detailed and well supported response, as opposed to those that resort to name calling as a way to make a point. I have never really studied anti-trust laws, so I admit to having a lack of understanding regarding this situation, but I would like to make a couple statements in my defense.

    In the case of Microsoft, if someone wanted to use Netscape instead of IE, all they needed to do was download and install it. Microsoft did not create ways to disable competitor’s software from working on Windows. Ultimately the consumer still had a choice, if he was willing to go through the effort involved.

    Now look at Apple. iTunes basically comes bundled with the iPod. If I for someone reason wanted to use Windows Media Player instead, I can’t. No amount of effort on my part will get it to work. I have no choice but to use iTunes.

    Internet music stores can make the claim that their business is hurting because their songs won’t directly work with the iPod. You have to go through extra effort and the possible loss of sound quality if you want to play those songs on the iPod. If a company created a better music store than iTMS but did not work with the iPod, would you use it? I probably wouldn’t because it’s not worth the effort of burning a CD and re-importing back to iTunes. Thus, their business would suffer because the iPod is a closed system.

    I am not saying that Apple is using their monopoly power to destroy other companies. I am not saying that Apple is using any of the shady business practices that Microsoft uses. And I am not saying that the consumer is better off by having non-Apple alternatives.

    What I am saying is that people like to have the illusion of choice, even if they never make that choice. They want to feel that they are empowered, that their lives are based on their own choices and not those of a corporation. Even if they never choose the alternative, they want to have the feeling that they got to where they are because of the decisions they made, that they control their fate.

    In the end, a person’s choices are limited by Apple. I am not complaining about that because I know I’m better off using Apple products. However, not everyone will agree. My point was that it wouldn’t be unbelievable if the government decided that Apple needed to open up a bit so that consumers would feel they have a choice and other companies would feel that they have a fair chance.

  8. …you can use Windows Media Player on the Mac. Easier to install than it is on Windows, too.

    Apple hasn’t use anti-competitive practices (that we know of). Providing an app with the system isn’t anti-competitive. Refusing to do business with a retailer/manufacturer unless they sell your product and only your product is.

  9. king_alvarez,

    Thanks for the studied response. I think you do have some valid points. BTW, I apologize if my previous suggestion made it sound like you were ignorant, when it’s clear that you are not.

    “In the case of Microsoft, if someone wanted to use Netscape instead of IE, all they needed to do was download and install it. Microsoft did not create ways to disable competitor’s software from working on Windows. Ultimately the consumer still had a choice, if he was willing to go through the effort involved.”

    This is true, but Microsoft didn’t get in trouble for this. The beahvior that got Microsoft in hot water was specifically forcing manufacturers to EXCLUDE competing software in their contractual agreements, or writing their agreements in a way that would essentially punish the manufacturer economically if they opted to bundle competing products. For example, Microsoft wrote the contract with PC makers in such a way that they were forced to pay a Windows licensing fee EVEN IF the box didn’t include a copy of Windows. Basically, if the box maker wanted to pre-install a copy of Red Hat, not only would they have to suck up any costs associated with that pre-installing Red Hat, they would still have to pay Microsoft for a copy of Windows for that box anyway. It was like saying, “Hey, sure you can subscribe to DishTV, but your contract here says that you still have to pay for your cable even if you don’t use it.”

    Microsoft was forced to revise these kinds of anti-competitive terms, but as Microsoft can be quite creative with legal matters, almost all PC makers are still afraid to offer alternative OSes with their boxes. While it’s possible to download an install Firefox on Windows, you’ll never get a situation in which a manufactures ships Windows WITHOUT IE and Firefox installed as a default.

    “Now look at Apple. iTunes basically comes bundled with the iPod. If I for someone reason wanted to use Windows Media Player instead, I can’t. No amount of effort on my part will get it to work. I have no choice but to use iTunes.”

    This is admittedly a gray area, but something that I don’t believe falls into anti-trust. Anti-trust law does not forbid manufacturers from making proprietary products. Car analogies are overused, but if you buy a Hummer H2, it comes with a GM engine that gets 10 mpg, take it or leave it, regardless of the fact that it’s technically possible to replace that engine with a Toyota Hybrid Synergy system salvaged from a Prius or a biodiesel engine that already exists in the market. Similarly, Apple has the right to design the iPod so that it’s essentially mated with iTunes.

    (continued in next post…)

  10. (continued from previous post…)

    Now, this is where it gets tricky. Microsoft technically did not get in trouble for tying IE to Windows, believe it or not. Just like the Hummer analogy, it is very difficult to argue that Microsoft cannot be allowed to design its software in ways that it sees fit. So while “tying” IE to Windows was obviously a strategic move by Microsoft to allow it to flex its monopolistic muscle, Microsoft successfully argued that it was “innovation” instead, and the government did not have the right to regulate innovation.

    In the end, Microsoft was declared an abusive monopoly for its predatory PRICING policies as well as specific, clearly anti-competitive behavior (such as displaying misleading “warning” messages about how competing products might not work properly with Windows if installed in order to discourage installation of said products).

    “What I am saying is that people like to have the illusion of choice, even if they never make that choice.”

    I would say this is generally true, but to quote Steve Jobs, consumers ARE making a choice – with their wallets. It’s just that Microsoft and other companies don’t like the choice consumers are making with the iPod and iTunes.

    So, here’s the rub. Apple is completely well within its right to make the iPod only work with iTunes, just as Microsoft has been allowed to tie IE to Windows (remember, Microsoft was convicted of abusing its monopoly due to predatory pricing, not tying IE to Windows). Whether you agree with that is up to you. Apple can choose to “open up” the iPod to other software such as Windows Media Player, but only at its discretion – something which Apple will only do if the market forces it to adopt such a change.

    Thus far, the market has NOT been demanding such a change, as the whole issue with the iPod’s openness has essentially been a non-issue with the vast majority of consumers. Furthermore, at previous quarterly briefings, Steve Jobs indicated that Apple has had absolutely no request from the music labels themselves to open up iPod or iTunes, basically implying that the only people clamoring for “openness” were analysts who repeated it as a buzzword, but obviously were willfully ignoring Apple’s successful iPod strategy.

    The fact is – although this may be a bit harsh – that Apple’s competitors want to rely on bundled 3rd party music app instead of taking the effor to imitate Apple’s strategy of developing their own iTunes-killer.

    Creative spent supposedly $100 million in marketing last quarter to compete with the iPod. That’s great, except that Creative probably would never spend that kind of money hiring top software engineers and UI designers to create their own iTunes-killer. Instead, they whine about how Apple won’t let them hook into iTunes. But the whine is just an excuse for carpetbagging, otherwise known as a “free ride,” or “we don’t care enough about the consumer experience to put the development money where our mouth is.”

    Of course, Microsoft is partly responsible, by trying to sell the idea that anyone can take Microsoft software and use it with their hardware, seemlessly. It works great in theory and it worked for Windows, but I think what we’re seeing with the iPod is that the consumer electronics market is a much more finicky and demanding place. TVs damn better not crash or display control glitches, no matter how many features they have, yet to date, Apple’s competitors have been approaching this market assuming people will have the sort of tolerance for bad design that exists in the PC market.

    Sorry for the long response!

  11. DOJ: “You have to keep your software open to innovation”

    Microsoft: “SHUT THE FUCK UP, the US Intelligence Community is our best friends”

    DOJ: “Oh ok, lets just pretend ok? For publicity sake? hmm pretty please?”

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