[iwar] [fc:Microsoft.proposed.final.settlement]

From: Fred Cohen (fc@all.net)
Date: 2001-11-04 20:37:59
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From: Fred Cohen <fc@all.net>
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Date: Sun, 4 Nov 2001 20:37:59 -0800 (PST)
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Proposed final judgment:
<a href="http://www.microsoft.com/presspass/trial/nov01/11-02settlement.asp">http://www.microsoft.com/presspass/trial/nov01/11-02settlement.asp>

---


DEPARTMENT OF JUSTICE
FOR IMMEDIATE RELEASE
FRIDAY, NOVEMBER 2, 2001
WWW.USDOJ.GOV
AT
(202) 514-2007
TDD (202) 514-1888

DEPARTMENT OF JUSTICE AND MICROSOFT CORPORATION
REACH EFFECTIVE SETTLEMENT ON ANTITRUST LAWSUIT

Settlement Provides Enforcement Measures to Stop Microsoft's Unlawful
Conduct,
Prevent Its Recurrence, and Restore Competition

         WASHINGTON, D.C. - The Department of Justice reached a settlement
today with Microsoft Corporation that imposes a broad range of restrictions
that will stop Microsoft's unlawful conduct, prevent recurrence of similar
conduct in the future and restore competition in the software market,
achieving prompt, effective and certain relief for consumers and businesses.

          The settlement reached today accomplishes this by:

*       abcreating the opportunity for independent software vendors to
develop products that will be competitive with Microsoft's middleware
products on a function-by-function basis;

*       giving computer manufacturers the flexibility to contract with
competing software developers and place their middleware products on
Microsoft's operating system;

*       preventing retaliation against computer manufacturers, software
developers, and other industry participants who choose to develop or use
competing middleware products; and

*       ensuring full compliance with the proposed Final Judgment and
providing for swift resolution of technical disputes.

         "A vigorously competitive software industry is vital to our
economy and effective antitrust enforcement is crucial to preserving
competition in this constantly evolving high-tech arena," said Attorney
General John Ashcroft.  "This historic settlement will bring effective
relief to the market and ensure that consumers will have more choices in
meeting their computer  needs."

         The settlement, which will be filed today in U.S. District Court
in the District of Columbia with Judge Colleen Kollar-Kotelly, if approved
by the court, would resolve the lawsuit filed by the Department on May 18,
1998.

         "This settlement will promote innovation, give consumers more
choices, and provide the computer industry as a whole with more certainty
in the marketplace," said Charles A. James, Assistant Attorney General for
the Antitrust Division.  "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."

         Today's proposed settlement is modeled on the conduct provisions
in the original Final Judgment entered by Judge Jackson, but includes key
additions and modifications that take into account the current and
anticipated changes in the computer industry, including the launch of
Microsoft's new Windows XP operating system, and the Court of Appeals
decision revising some of the original liability findings.

         The proposed Final Judgment includes the following key provisions:

         Broad Scope of Middleware Products- The proposed Final Judgment
applies a broad definition of middleware products which is wide ranging and
will cover all the technologies that have the potential to be middleware
threats to Microsoft's operating system monopoly.   It includes browser,
e-mail clients, media players, instant messaging software, and future new
middleware developments.

         Disclosure of Middleware Interfaces- Microsoft will be required to
provide software developers with the interfaces used by Microsoft's
middleware to interoperate with the operating system.  This will allow
developers to create competing products that will emulate Microsoft's
integrated functions.

         Disclosure of Server Protocols- The Final Judgment also ensures
that other non-Microsoft server software can interoperate with Windows on a
PC the same way that Microsoft servers do.  This is important because it
ensures that Microsoft cannot use its PC operating system monopoly to
restrict competition among servers.   Server support applications, like
middleware, could threaten Microsoft's monopoly.

         Freedom to Install Middleware Software--Computer manufacturers and
consumers will be free to substitute competing middleware software on
Microsoft's operating system.

         Ban on Retaliation--Microsoft will be prohibited from retaliating
against computer manufacturers or software developers for supporting or
developing certain competing software.  This provision will ensure that
computer manufacturers and software developers are able to take full
advantage of the options granted to them under the proposed Final Judgment
without fear of reprisal.

         Uniform Licensing Terms- Microsoft will be required to license its
operating system to key computer manufacturers on uniform terms for five
years.  This will further strengthen the ban on retaliation.

         Ban on Exclusive Agreements- Microsoft will be prohibited from
entering into agreements requiring the exclusive support or development of
certain Microsoft software.  This will allow software developers and
computer manufacturers to contract with Microsoft and still support and
develop rival middleware products.


         The proposed Final Judgment also includes key additional
provisions related to enforcement:

         Licensing of Intellectual Property- Microsoft also will be
required to license any intellectual property to computer manufacturers and
software developers necessary for them to exercise their rights under the
proposed Final Judgment, including for example, using the middleware
protocols disclosed by Microsoft to interoperate with the operating
system.  This enforcement measure will ensure that intellectual property
rights do not interfere with the rights and obligations under the proposed
Final Judgment.

         On-Site Enforcement Monitors- The proposed settlement also adds an
important enforcement provision that provides for a panel of three
independent, on-site, full-time computer experts to assist in enforcing the
proposed Final Judgment.  These experts will have full access to all of
Microsoft's books, records, systems, and personnel, including source code,
and will help resolve disputes about Microsoft's compliance with the
disclosure provisions in the Final Judgment.

         The core allegation in the lawsuit, upheld by the Court of Appeals
in June 2001, was that Microsoft had unlawfully maintained its monopoly in
computer-based operating systems by excluding competing software products
known as middleware that posed a nascent threat to the Windows operating
system.

         Specifically, the Court of Appeals found that Microsoft engaged in
unlawful exclusionary conduct by using contractual provisions to prohibit
computer manufacturers from supporting competing middleware products on
Microsoft's operating system; prohibiting consumers and computer
manufacturers from removing Microsoft's middleware products from the
operating system; and reaching agreements with software developers and
third parties to exclude or disadvantage competing middleware products.

         The proposed Final Judgment will be published by the Federal
Register, along with the Department's Competitive Impact Statement, as
required by the Antitrust Procedures and Penalties Act.  Any person may
submit written comments concerning the proposed consent decree within 60
days of its publication to: Renata Hesse, Trial Attorney, 325 7th Street,
N.W., Suite 500, Washington, D.C. 20530, (202-616-0944).  At the conclusion
of the 60-day comment period, the Court may enter the proposed consent
decree upon a finding that it serves the public interest.

         The proposed Final Judgment will be in effect for a five year
period and may be extended for an additional two-year period if the Court
finds that Microsoft has engaged in multiple violations of the proposed
Final Judgment.

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