Proposals Made to Shrink Power of Microsoft -NY Times

[Gene Gaines <ggaines@generation.net>]

I met someone yesterday, again, who thinks the Microsoft "flap"
as he put it, is over a browser.  Good lord.  

More stories today, with New York Times url which will work after
you register -- it's free.

  http://www.nytimes.com/yr/mo/day/tech/indexbiztech.html

      Industry Chiefs Approach U.S. on Microsoft Case
      By JOHN MARKOFF 
      ( April 7 ) Concerned computer industry executives
      have approached the Justice Department with a
      wide ranging set of proposed remedies they
      believe would help reign in the monopoly power of
      Microsoft. 

Then click on the headline to read the whole story, I'll include an
excerpt below.

Gene Gaines
ggaines@generation.net

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New York Times on the web
April 7, 1998


Proposals Made to Shrink Power of Microsoft

By JOHN MARKOFF

SAN FRANCISCO -- Concerned computer-industry executives have approached the
Justice Department with a wide-ranging set of 10 proposed remedies that they believe
would help rein in the monopoly power of Microsoft Corp. 

The proposals, which are contained in a document that is circulating among industry executives,
include forcing Microsoft to divest its applications businesses from its operating-system business
and establishing a monitoring system to track Microsoft's business practices. 

The Justice Department was not considering breaking up Microsoft, according to one industry
executive, but it was looking at a range of other possibilities. 

Microsoft officials dismissed the proposals, saying that they had responded to many of the points
previously. 

"This is a wish list from Microsoft competitors with no basis in the facts of this industry or the
laws of this country," said Mark Murray, a Microsoft spokesman. 

The issue of Microsoft's dominance of the computer industry has been sharpened in recent days
as the Justice Department turned up the heat in its investigation. 

Last week it served new civil investigative demands on leading personal-computer makers
including Compaq Computer Corp., Gateway 2000 Inc., Hewlett-Packard Co. and others. The
new round of investigative demands was first reported by CNet, a news service on the World
Wide Web, on Friday afternoon. 

The Justice Department now believes that it has collected enough evidence to bring a new
antitrust case, according to several people close to the inquiry, and government lawyers were
raising the threat of an expanded case as they prepared to confront Microsoft at the bargaining
table. 

An antitrust expert who is acting as a consultant to Microsoft said it would be surprising if the
Justice Department filed a new suit in the next month, given the state of negotiations with the
software publisher. 

"The timing is in the hands of the Department," said Charles Rule, a lawyer with the Washington
firm of Covington & Burling who headed the Justice Department's antitrust division in the Reagan
administration and is now a legal consultant to Microsoft. "But given the pace of normal
investigations and based on the available information, it doesn't appear that anything is imminent."

Microsoft officials said Monday that they had asked the Justice Department for a meeting
several weeks ago and expected to meet with the government lawyers next week. 

Microsoft is nearing completion of Windows 98, the newest version of its operating system, and
industry executives said that the Justice Department felt it was under pressure to act before the
company releases the so-called "golden master" version of the program in May or June. 

There were broad industry concerns that if the legal battle delayed shipments of Windows 98, it
could disrupt the entire computer industry by causing consumers to delay purchases of new
systems. Typically many businesses and consumers will buy new hardware to take advantage of
a new operating system's features or requirements. 

"Justice fully understands the time pressure they're under and the risk of freezing the market,"
said Ken Wasch, president of the Software Publishers Association, a Washington-based
organization. 

Although the case initially brought by the Justice Department last October centered on
Microsoft's decision to include Internet Explorer 4.0 as part of the Windows 95 operating
system, the government has significantly broadened its investigation, several people close to the
case said. 

One crucial issue that reached beyond the so-called "browser wars" was Microsoft's control of
the appearance of the user's desktop. Computer makers have continued to express to Justice
Department officials their frustration about Microsoft's total control over the computer's
"boot-up" sequence -- that is, what appears on the screen when the computer is started. 

Current licensing agreements forbid computer makers to add their own logos or other content
during boot-up, industry executives said. 

"Its a violation of the Sherman Act to condition the sale of Windows on the control of the user's
desktop," Wasch said. "Justice has to demonstrate that Microsoft is controlling the screen
display. They have that evidence; they have the contracts from the computer makers." 

The industry's proposals were put forward this month after informal conversations between Joel
Klein, the head of the Justice Department's antitrust division, and computer-industry trade
associations that have expressed concerned about Microsoft's economic power. 

Other proposed remedies offered in the industry document include the following: 

-- Forcing Microsoft to be more open in describing parts of the operating system to which
programmers have access. Software developers have long argued that Microsoft's own
programmers have a huge advantage when writing applications like word processors and
presentation software because they know things about the operating system that are not
generally shared with outside developers. 

-- Prohibiting Microsoft from tying new products to the Windows operating system. For
example, the Justice Department is concerned about the inclusion in Windows 98 of Netshow,
Microsoft's audio and video interface for the Web, which competes directly with Apple
Computer Co.'s Quicktime software. 

-- Divesting Microsoft's software compatibility laboratories, which offer a Windows
95-approved logo to certain products. 

"A dominant operating system should not be used to favor Internet content that is owned,
offered by or preferentially licensed to the operating-system vendor," the document stated.

----snip-----