M$ Monitor: Contact DOJ

[Audrie Krause <audrie@netaction.org>]

The Micro$oft Monitor
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Published by NetAction          Issue No. 22                January 28, 1998	
Repost where appropriate. Copyright and subscription info at end of message.
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In This Issue:
One Small Victory Over Microsoft
Campus Technology Takeover Still On Hold
About the Micro$oft Monitor
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One Small Victory Over Microsoft
A report by Nathan Newman, NetAction Project Director

Advocates for open technology standards won a minor victory this past
week with Microsoft's agreement to honor the initial court order
pursued by the Department of Justice.  That initial court order
prohibits Microsoft from forcing computer makers to give Internet
Explorer automatic placement on every Windows desktop as a condition
for purchasing Windows itself.

Combined with Netscape's announcement that it will be giving Navigator
away free just like Explorer, there is now a glimmer of hope that
Microsoft's Internet juggernaut will be successfully challenged.

WHAT YOU CAN DO:
E-mail the Department of Justice to Expand the Investigation

**  Thank DOJ for its pursuit of Microsoft's monopoly abuses
**  Urge DOJ to expand the scope of its investigation

Send E-mail to: <antitrust@usdoj.gov> or link directly to a mail form:
<Mailto:antitrust@usdoj.gov>.

For more information, contact Nathan Newman, at: <nathan@netaction.org>, or
link directly to a mail form: <Mailto:nathan@netaction.org>. 

Keep in mind that this victory should be acknowledged for the rather minor
step forward that it is, since the agreement addresses the rather gratuitous
coercive tactics used by Microsoft.  The Department of Justice has
not yet fully addressed the monopolistic advantages Microsoft has that
makes coercive agreements a sideshow to the real economic power it has
within computing.

The fact that Microsoft has chosen to give Explorer away has always
marked the fact that this is not a traditional battle for "market
share" between competing products, but rather a battle for
technological and economic control of far more than just browser
software.

NetAction has maintained that Microsoft should be barred from giving
away its software as a prima facie act of monopolistic dumping.

On one hand, if Microsoft is serious that it's only concern is with
"integrating" Explorer into Windows 98, its history of free browser
software giveaways up to this point must be treated as predatory pricing 
aimed at enhancing the value of its existing operating system
monopoly.  The very fact that Microsoft is integrating Explorer into
Windows should be a basis not only for exploring monopolistic
practices in the marketing of browser software, but in the sales and
building of Microsoft's core operating system itself.  By integrating
various kinds of software into its operating system, Microsoft has
liquidated whole areas of software competition while increasing the
Windows "tax" it collects on nearly every personal computer sold.  The
absorption of Explorer into Windows would make its giveaway of "free"
Explorer software expensive for consumers over the long term if
history is a guide.

The Department of Justice is emphasizing the monopoly aspects of
Microsoft's marketing of Internet Explorer, but the proposed
integration with Windows 98 should be cause to reopen the broader
issue of Microsoft's monopoly of the whole desktop operating
environment.  NetAction has called on the DOJ to push for Microsoft to
spin off its operating system as a separate company from its
applications and Internet divisions.

At its heart, however, the controversy over browser software is about
the most fundamental power issues of the information age -- who will
control the technical standards that underlie the Internet and who will
control Internet commerce for the new century.

Microsoft's approach to giving browsers away is about controlling
Internet standards embedded in the browser not in order to win shares
in that "product" market but to sell to a whole slew of other market
areas through the raw exercise of the control of technical standards,
rather than through competition in those areas.

Dumping browsers on the market for free is not about gaining "market
share" in any traditional sense, but about controlling those standards
and the billions of dollars that will flow to the company that
controls them. If the dominant Internet browser is designed not to
"read" a certain kind of information -- a kind of graphics, software
effect, etc. -- then web page designers will be loathe to use that kind
of information or technology, while they will have to support software
standards that are compatible with the dominant browser. And if you
are a software company like Microsoft selling web servers and web design
software, and are also involved in an array of Internet commerce, you have an
overriding interest in controlling those Web standards.

The Department of Justice has to move beyond its particularistic
focus on browser software to vigorously support the principle of open
technical standards controlled by no single company.  Without the
possibility of developing proprietary standards, Microsoft will have
to compete based on innovation rather than raw economic power.

NetAction urges you to email the Department of Justice and ask them to
support the following principles:

1. Divestiture: At a minimum, Microsoft's Windows operating system
monopoly should be split off into a separate company from the
application and Internet divisions. This would end the inherent
opportunities for abuse of one company competing in application
markets while controlling the "field" of competition as well.  It may
also prove necessary to separate Microsoft's application and Internet
divisions.

2. Restrain Predation: Stop Microsoft from giving away browser
products.  Since $0.00 is below any measure of cost, it meets the
traditional test for predatory pricing (sustaining below cost pricing
with monopoly profits in order to drive out competition and then raise
price).

3. Licensing: Microsoft should be forced to discontinue any
licensing practices (NT, database server, etc.) that restrict customer
dealings with competitors or require customer use of Microsoft products.
Exclusive dealing and tying the purchase of one product to purchase of
another should be unlawful for this monopolist where linked to the
operating system.

4. Open Standards: The government should more vigorously support open
standards processes and endeavor to defend open standards developed
through industry standards processes from anticompetitive abuse by
Microsoft.

5. Consumer Involvement: The government must establish processes to
ensure participation by Internet users in public policy decisions
effecting consumer use of the Internet, including appropriate
mechanisms for addressing complaints about product marketing and the
quality and reliability of Internet services.

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Campus Technology Takeover Still On Hold

NetAction has other progress to report in the fight for open computing
standards.  Working with faculty, students and staff throughout the
state of California, NetAction has helped to rally opposition to
a technology deal that would give a for-profit corporation owned by
Microsoft, GTE, Hughes and Fujitsu monopoly control of technology at
the 360,000 student California State University (CSU) system.

After NetAction Program Director Nathan Newman and other CETI
opponents testified at a January 6 hearing of the state Legislature,
support for the CETI initiative was obviously shaken among legislators.  
In a public letter to the CSU administration, California  Assembly Members 
Jim Cuneen and Debra Bowen called on CSU officials to radically revise their
technology plans for the university.  As the San Francisco Chronicle 
reported on January 22, the legislators wrote, "As proposed, CETI may lock 
the state into technological solutions that are likely to become obsolete 
before the term of the agreement runs out. We want to encourage CSU to move 
away from a process that effectively awards exclusive rights to any
company.''

Similarly, California Senate Majority Whip Leroy Greene wrote a letter to
CSU campus newspaper editors raising serious concerns about the CETI
proposal.  He specifically cited testimony by NetAction's Nathan Newman
that, "Given the size and importance of the California State
University system, CETI's monopoly nature will give Microsoft a
massive strategic advantage in its ongoing effort to monopolize global
software and Internet standards."  Senator Greene further noted that
the Legislative Counsel's analysis had highlighted four ways in which
CETI violates the state Constitution.

A second round of hearings on CETI is planned for the end of
February, and NetAction will continue to mobilize public pressure to
assure that California's universities remain a place of innovation and open
standards, not a private training ground for Microsoft technology.

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About The Micro$oft Monitor

The Micro$oft Monitor is a free electronic newsletter, published as part of
the Consumer Choice Campaign <http://www.netaction.org/msoft/ccc.html>.
NetAction is a national, non-profit organization dedicated to educating the
public, policy makers, and the media about technology-based social and
political issues, and to teaching activists how to use the Internet for
organizing, outreach, and advocacy.

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