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Daily Wrap and Flow

Reading the Daily Wrap and Flow is a quick and easy way to follow the ebb and flow of the trial. This link will always contain the latest commentary making it easy to bookmark. This column is updated throughout the day with the latest commentary placed at the top. If you prefer external links to use a full screen see help.

10:25 PM PDT - Obvious after awhile...

It seems that only Microsoft Corporation and their high paid lawyers have yet to admit the obvious.

It is obvious that Microsoft Corporation has a monopoly in the consumer OS marketplace for Intel/AMD processors. As the judge noted in his findings, even if you toss in Apple Microsoft still possesses a monopoly position and power over consumers.

It is obvious that Internet Explorer is costing consumers a bundle of money to buy. Half a billion dollars plus in R&D for a product and yet some fools and frauds claim IE is free when you pay money to take it home. Not even your mother believes that lie.

Microsoft Corporation not only violates antitrust law it also uses fraud as it main component in the forced selling of IE.

Microsoft Corporation does not tell consumers what portion of their money they pay for the Windows IE bundle goes to the OS and what portion goes to IE. Oh no. That is a secret. Microsoft keeps that secret (while reporting higher and higher profits) even though the DOJ charges them with predatory prices for IE and if Microsoft would just admit the price they are charging consumers, they would have an instant defense. If Microsoft would just admit that $35 or so goes to IE (like it used to), the predatory price charge would disappear overnight. It is also possible that the consumer class action fraud cases would also disappear. If you do not lie about the product and how much you are charging there is not much of a case for fraud.

But, fraud it is. There is no doubt that fraud sells products. Everyone knows that. A good fraudulent sales pitch will greatly increase sales. And, right now 100% of all windows buyers buy IE. Is that not strange? No other product anywhere is selected by 100% of the potential customers. It must be "forced". It must be. It is obvious.

Yet. We have Microsoft lawyers standing on the court house steps telling us that the DOJ introduced no admissible evidence related to the charges they have brought upon Microsoft Corporation. These guys are lawyers? Did they really say that? Obviously, the judge disagrees. If no admissible evidence was submitted, there would be no findings of fact. None. Yet the judge found 412 of them. I think it is safe to say that the Microsoft lawyers lied. They can not be that dumb. Certainly they went to law school. Some things are obvious.

And, now we are to believe their claim that no laws were broken? Well. Claiming your client is not guilty when it is obvious to the entire world that the client is liable, is simply wishful thinking. It is the rejection of reality. And, as far as Microsoft Corporation is concerned, the findings of fact are the legal reality. Of course, they do not like reality. They were hoping that if they lied enough and on enough topics reality itself would change. Well. Deceit can accomplish fraud. But accomplished fraud does not alter reality. It only proves it.

January 18, 2000 - Tuesday

5:30 PM PDT - "We deny everything" defense?

I guess if you are going to just deny everything you might as well deny the obvious:

In the document, Microsoft directly addressed last month's DOJ filing. Specifically, the company denied:

".denied illegally tying IE to Windows,"

Oh really? Is there a possible way to buy Windows without buying IE?

"..denied striking exclusive agreements that illegally prevented Netscape Communications Corp. from shipping its rival browser,"

This is a funny one. Microsoft is claiming extortion is legal?

"...denied illegally preventing computer makers from altering Windows,"

Microsoft was selective in how it prevented OEMs from altering windows.

"...denied trying to monopolize the market for Web browsing software,"

This joke does not sell anywhere.

" and ... denied illegally attempting to maintain that monopoly".

Well. Just about any attempt to maintain a monopoly is illegal.

The only interesting issue is the one of copyright. But, Microsoft is wrong on the copyright issue. First, copyright law does not pre-empt antitrust law. In fact, copyright law does not give anyone any right to violate any law. Copyright law only prevents others from selling and profiting from the works of the copyright holder. Copyright law is not a "design-right" law. No law is. Not even patents give the holder to design or sell anything.

The DOJ allegations are precisely what Microsoft Corporation has done. Precisely.

4:45 PM PDT - "Facts are known."

Judge Jackson has not issued his conclusions of law yet but the facts of the case are known.

No appellate court re-tries the evidence nor drafts there own "findings of fact". Only the trial court does that. And, Judge Jackson has already issued his findings in that regard.

The courts conclusions of law are not yet announced. And, those conclusions of law can be challenged as not being pursuant to the facts of the case or the laws as they should apply to those facts.

But, keep in mind that Microsoft lawyers already spoke from the court house steps and claimed that no admissible evidence was brought before the court in support of the DOJ findings. Of course, that claim by the same lawyers you hear from now was clearly in error. It was not even close to being true or accurate.

Microsoft Corporation can certainly drag out the litigation for a very long time. And, knowing how bad they want to force themselves into a monopoly position on the internet, they are likely to do just that.

Typical monopoly thinking.

January 16, 2000 - Sunday

1:15 PM PDT - Break up is necessary.

Microsoft Corporation needs to be broken up. There is no doubt about that. It would be irresponsible not to break it up.

For one, every single product currently developed, distributed and owned by Microsoft is capable of standing on its own or capable of surviving if it were sold multiple times non-exclusively to other players in the industry.

Microsoft Corporation as a corporation is not necessary at all. In fact, the computer software industry and consumers alike would benefit greatly from its removal.

Microsoft Corporation has used bundling over the years to suppress a number of superior technologies to its own. These include GUIs(i.e. Quarterdeck), DOS (ie. DrDos), disc compression (i.e. Stac), networking (i.e. Lantastic, Novell and others), Java and Communicator.

There is absolutely no doubt that Bill Gates will continue to bundle inferior products with any monopoly product he may control simply to force its sale, harm consumers financially and preclude competitors from "his" markets. There is no doubt about it. Testimony and the Findings of Fact in the antitrust trial prove that. Public comments from Bill Gates currently prove that as well. Bill Gates demands his ability to preclude competitors illegally.

Specifically, the following technologies must be unbundled from the consumer OS.

1) all networking technology
2) disc compression and disk utilities
3) browsers and all internet related technologies
4) all cross platform and subsystem technologies such as web servers, Java, networking, SQL-Servers, etc.
5) and of course any dependency for favoritism with or for Microsoft applications.

This can be accomplished in two simple ways.

One, split Microsoft along the lines of individual applications. If those applications can not succeed over time on their own merits, so be it. No other company has the advantage of a monopolist helping to promote their products. Microsoft products should all lose that support as well.

Key technologies such as the operating system, networking and the browser should be sold non-exclusively to 6 or 8 major players in the industry on a bid basis. The operating system monopoly must be eliminated. Networking and internet technologies must be separated from the OS product. Millions of consumers should not be forced to buy any subsystem or application just because they buy a computer and need an operating system. That is illogical, unfair and harmful.

http://www.lamlaw.com/DOJvsMicrosoft/BundlingUnfair.html

Testimony in the antitrust trial was offered to prove that bundling these kinds of technology with the OS cause direct harm to consumers and only serve to strengthen the monopoly buy increasing barriers of entry into each of those markets (i.e. operating systems, browsers and networking technologies).

Bundling is inherently unfair to consumers and harmful to almost all of them. Therefore, the ability of Microsoft Corporation to bundle must be eliminated and the likelihood that other companies will likewise use bundling to preclude competition should also be reduced.

Right now, networking and internet technologies are both multibillion dollar markets dominated by Microsoft the monopolist. That needs to be corrected in the current antitrust case. If it is not, the entire effort is of no value.

All developers must feel that they can develop and market any and all networking or internet related technologies without the fear of being precluded from the market by illegal acts engaged in by a monopolist.

A simple split of Microsoft (as has been disclosed in the press) is not sufficient.

A simple divestiture of IE as proposed by Ralph Nader is likewise not sufficient.

The problem needs to be solved. The monopoly position in browsers currently achieved by Microsoft needs to be undone and the barriers to entry for the consumer OS marketplace need to be significantly reduced by the unbundling of networking technology and all other applications and/or utilities.

And, of course, the wide range of applications currently offered under the Microsoft brand must be freed of any tie or preference to a single OS.

If you agree with these principals I request that you send a copy of this letter to the DOJ, Ralph Nader, Microsoft and any publication of your choice.

If you do not agree, I advise you to disclose which corporate interest you are promoting because you clearly do not represent consumers nor the computer software industry.

January 15, 2000 - Saturday

8:20 AM PST - Gates is reckless not the DOJ.

Microsoft Corporation is still blaming the DOJ for their own stupid mistakes.

Microsoft sounds just like the burglar who blames the cops for being arrested and the judge for putting him in prison.

Typical Microsoft thinking.

January 12, 2000 - Wednesday

9:40 AM PST - A simple split of Microsoft Corporation will mean nothing

Solve the problem ...

A simple split will mean nothing.

The Windows code base must be sold outright non-exclusively to at least 6 or 8 players in the industry.

Keeping the OS monopoly intact and the corrupt Microsoft management in charge will mean nothing.

January 5, 2000 - Wednesday

10:00 AM PST - Microsoft bundling and inflexibility bites (Intel lines up with Linux instead)

Microsoft "bundling" bites.

Linux is best for many computer situations. For one, OEMs can configure the system according to the needs of the target consumers. Microsoft Corporation has a corporate plan to prevent both OEMs and end consumers from using the system as they need to do.

Windows is clearly overpriced. But, it does not matter whether Microsoft is just over charging for Windows and giving away IE or simply charging a fair price for all the crap bundled with every system (i.e. networking technology, internet technology, disc utilities and what have you including some games). All that does is overcharge the consumer and violate the antitrust law.

Of course, Microsoft chose to violate more laws by lying about the price charged for key Microsoft branded products such as networking (when few home users would pay for such technology) and internet browsers (when millions of business systems will never connect with the internet).

An unbundled Windows would cost about half as much. And if Microsoft had fair and open competition the market price would drop even further. Most likely to about 1/4th of what it is today.

Monopolies do overcharge it seems.

December 21, 1999 - Tuesday

5:03 PM PST - Consumer Harm in the Microsoft Case by Ralph Nader

December 17, 1999 - Friday

10:00 AM PST - By popular request I wrote an article regarding harm to Bill Gates via the bundling of networking technology with the OS. This article has also been submitted to ZDNet op-ed but I do not know if they want to publish it.

(If you know of any publication that might want to publish this article, let me know.)

Bill Gates harmed by the bundling of networking technology with the OS.

By Lewis A. Mettler

Much has been said about the harm caused when user applications are bundled with the operating system but does this concept also apply to subsystems such as networking technology?

Sure does.

Let take a true die-hard Microsoft supporter like Bill Gates as an example.

Bill Gates has a rather large home in which he can pretty much hide from just about anyone if he wants to. After all, even Bill does need a moment of privacy once in a while. You never know. He might want to surf the web he has heard so much about. Or, he might want to attend to personal matters.

The other thing he might want to do privately is check out Linux. After all, he has heard a lot about Linux and all his paid informants are not always trustworthy or completely honest. So. A personal investigation is called for. This time Bill looks around the house for a room without a PC. This is getting harder and harder to do. Just about everywhere he looks, a PC is already set up and running Windows. Well. Windows and Linux are like acid and water. You have to be real careful how you deal with them and putting them in close proximity could be disastrous.

Well. As luck would have it. When you have a large house, there is always one more room that nobody seems to have put to good use. If it has a lock on the door, so much the better.

So. Off to the local computer store goes Bill. Now, Gates is not dumb. (The last time he went shopping for a computer he was overcharged for buying a second copy of software he already had. But, this time will be different. Even an old dog can learn a new trick when it counts. This time, instead of downloading a copy of IE 5, Bill downloads a copy of Linux. Not just one copy of Linux, but three different copies of Linux. Those high speed lines really do come in handy around Christmas time when shopping time is hard to squeeze in. So. Bill is ready. He has three copies of Linux on private labeled CDs. Bill labeled them Curly, Moe and Jackson. He wanted to name them after the three stooges but could not remember the third guy's name and "Jackson" just came up for no good reason.) [I think Larry was the name Bill wanted to come up with.]

This time Bill Gates is shopping for an Intel/AMD machine without Windows on it at all. After all, should anyone find his Linux box in the house, he will need a clean story to disavow any connection with the rogue device. So, the box must not come with Windows. Besides he already owns a copy of that stuff and does not need another one for a machine running Linux anyway.

Well. Shopping for a PC without Windows on it already is not an easy task. All the display models clearly indicate that you pay for Windows whether you want it or not. And, besides it comes pre-installed. But, Bill is a tight wad. At work, he never cuts anyone any slack whether they are a new employee just learning the ropes or a customer with a special need.

So. He asks the salesman how he can buy an Intel/AMD machine without Windows already running on the damn thing. The salesman (recognizing Bill is back for the second time this week but not really knowing who he is but remembering that this fellow rejected Apple before) simply says if you do not want to pay for Windows and IE, you will have to buy your computer in parts and assemble it yourself. Bill is thinking life should not be so difficult. First he had to slip out of the house in a trench coat and now this.

But, the game is in play. So. Bill asks for help gathering the necessary parts from all over the store. After all, when you buy parts, you have to pick and choose the parts you want. You have to decide on a monitor, keyboard, case style, motherboard, chip and memory. And, then there are about 30 different disc drives to pick from. CD rom drives need to be selected. Speakers have to be picked out. This could take a while. But, Bill has luck. The salesman is willing to walk Bill around the store helping him make good selections. Besides, the guy is really curious about Bill. Bill seems to be an intelligent guy but does not seem to know much about the realities of the computer industry for some reason.

Regardless, the salesman helps Bill pick out good parts.

Then, the salesman hoping to pad his commission, asks Bill about software. "What software will you need?", asked the salesman (whose name is Marc, but that is another story). Bill says, "I have 3 copies of Linux already, so all I will need is a nice selection of applications". The salesman blurts out, "We have WordPerfect for Linux", as he tosses the box into Bill's cart. But, Bill immediately grabs it and complains, "the box says Linux is included, I already have 3 copies of Linux and I am not buying another one". So WordPerfect stays on the shelf. Besides Bill does not plan on writing any documents with the Linux machine but only wants to check it out, right?

"Okay", Bill says. "What about networking software?". I need to network this system with another system I have. "What OS does that system run?", asked the salesman. Bill, hoping not to be too obvious, says "I think it runs Windows now". The salesman, being a fairly knowledgeable guy says, "Well. Microsoft networking is not available for Linux or any other system for that matter. And, I think Linux bundles networking with their OS, but we can not sell you that technology for Windows". "You might be able to get them to network, but we can not sell you anything that makes it easy." Bill asks, "Then how in the hell am I supposed to get my new computer to network with the one I already have?". The salesman says, "I have no idea. Some guy came in here about a month ago and said he was able to do it. But, I have no idea what he did. And, as luck would have it, he was run over by a Cable TV Service vehicle about a week ago down at the corner of Main and Fifth". "I think he died."

Well. Gates is fit to be tied. Here, he is hoping to pick up a new computer, install Linux, find out what all the hoopla is about and now it appears he will have to hire a staff of engineers in order to figure out how to test Linux.

"This is absurd", blurts Bill Gates as he steams out the front door leaving his shopping cart with all those great selections (including the very fast 15 gig hard disc) parked in isle 3B.

The salesman has no idea what he did wrong. But, the stuff has to go back on the shelves.

December 16, 1999 - Thursday

12:02 PM PST - ZDNet decides to publish my op-ed piece on consumer harm caused by bundling

December 15, 1999 - Wednesday

10:30 PM PST - Article by Ralph Nader and James Love; additional commentary by Lewis A. Mettler

My own comments on the article below are in blue italics.

>
> This is an article on remedies that Ralph Nader and James Love
> wrote for Legal Times. It covers four topics, OEM licensing,
> breaking up Microsoft, Interoperability remedies (the longest
> and most value added section, with discussion of the 1984 IBM
> understaking as a model, and Richard Stallman's proposals
> regarding Interface information and patenting issues), and
> a requirement to port a divested MS Office to 2 new platforms.
>
> Jamie Love
>
> Published in Legal Times on: Monday, December 13, 1999
> Web Published Tuesday, December 14, 1999
>
> http://www.legaltimes.com/expcfm/display.cfm?id=2411&query=microsoft
>
> A Very Public Remedy
>
> We need a much wider debate on potential
> outcomes in the first great antitrust case of
> the e-commerce age
>
> By Ralph Nader and James Love
>
> A public dialogue on potential remedies in the Microsoft
> antitrust case has been slow to develop. In part, that's
> because remedies have not yet been addressed in the
> litigation. But the judge's Dec. 5 findings of fact invite -
> indeed, demand - a much fuller discussion of what comes
> next.
>
> And that discussion should not proceed solely within the narrow
> confines of the antitrust bar. We need a broader public
> debate to ensure that the interests of all Americans in greater
> competition, innovation, and consumer choice are recognized when
> the remedies are chosen.

This discussion should clearly include the consumers perspective and not
just those who promote any particular product whether it competes with
Microsoft products or not.

>
> Everyone who expresses an opinion about the Microsoft
> case works from a set of basic beliefs about markets and
> technology. Here are ours:
>
> Original equipment manufacturers are important. Many
> consumers do not feel comfortable installing or
> reconfiguring software or hardware. They're likely to use
> their PC in the condition in which it was bought. Therefore,
> the original equipment manufacturers (OEMs) play a crucial
> role in the distribution of software and computing devices.

This is very true. OEMs should have complete freedom in designing and
packaging systems they feel will have consumer appeal. Specifically, if
an OEM wants to offer Windows with Lantastic as the networking
technology, then that OEM should be able to do so without financial
penalties from being forced to also pay for the Microsoft brand of that
technology. The separation of products at the OEM should be liberally
applied. If any OEM combines products that result in a poor product
that is their risk and their risk alone. Might they need to offer
support? Yes. And, the OEMs are the appropriate parties to offer that
support. If a consumer is going to use products from more than one
vendor a common source of support is essential. If any one OEM does not
wish to offer such products and support, then that is their call.

>
> With the exception of Apple (and maybe even Apple), all
> major PC OEMs license software from Microsoft. This gives
> Microsoft the power to discipline "uncooperative" OEMs by
> charging higher prices and by discriminating in areas such as
> technical support. Not surprisingly, Microsoft rivals often
> find it difficult to distribute their software through the OEM
> channel.

If OEMs are not given multiple sources for their products (including
Windows and Office, etc.) then regulation will be required.

>
> Internet navigation is important. Since the time and
> attention of computer users is scarce, companies can
> profitably use control of the "first screen," or default
> choices, of an Internet browser to promote e-commerce
> sites. If a single firm exercises too much control over
> Internet browsers, competition in e-commerce markets will
> suffer.

The internet has already suffered at the hand of Microsoft. R&D moneys
for Netscape or any other company are non-existent while Microsoft
forces the sale of IE (piling up their R&D moneys) at an undisclosed
price. This is untenable.

>
> Interoperability is important. The usefulness of software
> programs often depends on their ability to work with other
> software programs. As indicated by the record in the trial
> and extensive documentation elsewhere, Microsoft has used
> interoperability as a weapon against its competitors.

And Microsoft management will always continue to do so.

>
> Applications are important. People buy PCs to run
> applications, and these applications have to work with other
> applications. Happily for those who place themselves entirely
> in the hands of Microsoft, files can be easily shuffled
> between the dominant Windows applications and the
> company's Microsoft Office applications. Indeed, Microsoft
> Office is as much a source of monopoly power as is
> Windows. They present many of the same issues - OEM
> licensing, bundling, product integration, access to
> programming interfaces, etc.

Microsoft (Office) products right now are designed to require other
Microsoft products and frustrate the consumers ability to benefit from
other possibly superior technology. Independent developers everywhere
are frozen out of key future markets by this process.

>
> Remedies should be forward looking. They should look at
> problems that will be faced tomorrow, not yesterday. There
> has been much criticism that the Justice Department's
> earlier antitrust cases against Microsoft focused on battles
> that the company had already won and offered little to
> address new technologies.
>
> Microsoft can't be trusted. The past six years have
> demonstrated that Microsoft cannot be trusted, and one
> should not predict that Microsoft will carry out any
> settlement in good faith. The company's conduct during the
> trial itself was the best evidence. When the judge ordered
> Microsoft to offer OEMs a version of Windows that did not
> include the company's Internet Explorer browser, Microsoft
> served up an outdated 1995 version of Windows that
> wouldn't even work with modern PC hardware. If Microsoft
> was willing to insult a federal judge in the middle of an
> antitrust proceeding, it's likely to be pretty bold after it
> enters into a consent degree.

It is very clear that any agreement that Microsoft makes will be ignored
completely and the lawyers instructed to defend that refusal to obey in
court. This is a clear and obvious business policy.

>
> So what's the solution? How can we break Microsoft's lock
> on the market in ways that will encourage a competitive,
> innovative future for the computer industry?
>
> Here are four remedies that the Justice Department, the
> court, and the rest of us should consider.
>
> Reforming OEM licensing. There are more than 300
> references to OEMs in the court's findings of fact and lots of
> details about Microsoft bullying. Nondiscriminatory
> licensing of Windows to OEMs would go a long way toward
> helping those companies stand up to Microsoft. At least,
> OEMs should be able to say no to Microsoft's pressures to
> eschew its rivals' products.

Making sure that OEM's have multiple sources for essentially the same
product goes a long way to assuring this.

If only one company (particularly Microsoft) is able to offer the
products then they must be highly regulated.

>
> There may be enough in the trial record to justify changes in
> Microsoft Office licensing, as well. This would be useful,
> particularly since Microsoft continues to eliminate
> competitive office productivity tools and is turning Office
> applications into Internet authoring tools that embed
> proprietary technologies into a new generation of Web
> documents.

Microsoft Office and Networking technology need to both be looked at
very seriously. Both technologies enhance the power of the monopoly.

Microsoft Office (even though it remains available on the Mac for now)
greatly limits the ability of any OS to enter the marketplace and all
but prevents any office product competitor from entering the market
unless they do so on another non consumer OS. WordPerfect has taken
this route as well as Star(Sun). But, competing fairing and opening on
the Windows platform is against Microsoft Corporate policy.

Microsoft Networking technology bundled with the OS also prevents most
consumers from considering non-Microsoft platforms because of the
extreme difficulty in adding non-Microsoft systems to a network.
Bundling networking technology with the OS only forces all consumers to
buy all systems of one brand. A dominant or monopoly will always hold
off superior technology simply by first forcing all consumers to buy the
branded product before the customer can shop for competing technology
they may want and need.

>
> Breaking up Microsoft. In many respects, this is the
> obvious option because Microsoft itself has made it clear
> that it will resist change without strong economic incentives.
> Separating the operating system and the applications into
> different companies would remove Microsoft's incentive to
> make alternative products crash.

Both Office and Networking technology should be divested together with
the requirement to support at least 3 different platforms or divested
multiple times non exclusively (6 or 8) so that a number of independent
companies can pursue the support on other platforms.

>
> Ideally, the court would go further. Microsoft has anticipated
> an adverse ruling on bundling Internet Explorer by seeking
> to make the program an integrated part of Microsoft Office
> and other applications. If Internet Explorer itself were a
> separate divestiture, the entire browser market might
> become competitive again. The owner of Office would find a
> way to make his program function with more than one
> browser.

Both the internet technologies and networking technologies are a
multibillion dollar marketplace that should have its own open, fair and
competitive markets. No internet or networking technologies should be
bundled with operating systems, other middleware or applications
exclusively. Bundling across product types only restricts competition,
removes choices from consumers and limits the business ventures that
independent software developers can pursue.

At this stage in the development of the internet, the absolute worst
thing that can be done is limiting the business ventures that software
developers everywhere can pursue. Microsoft's policy is to do to
everyone else what they did with Netscape if they can possibly do so.
Any laws be damned in the process.

>
> Fixing interoperability problems. As indicated by the
> record in the trial and extensive documentation elsewhere,
> Microsoft has used compatibility and interoperability as
> weapons against its competitors. Some have proposed
> opening up the Windows source code. While we think it
> useful to require such disclosures, they aren't enough.

Selling the windows source code to 6 or 8 players non exclusively may
have the same affect. Furthermore, a "Windows" standards body could be
required to publish either their code or their specifications. You
could also require something similar to what Sun is doing with Java.
The technology is freely available with royalties paid for commercial
utilization of that technology.

>
> A much better framework for dealing with interoperability
> concerns comes from Europe. In the early 1980s, the Reagan
> administration dismissed the government's long-standing
> antitrust case against the IBM Corp, but the European
> Commission's antitrust authorities did not quit. In 1984,
> they reached a settlement with IBM over a long history of
> complaints that echo today's concerns about Microsoft.
>
> In December 1980, the EC had found IBM to be a dominant
> supplier and accused it of abusing that position by failing to
> supply its competitors "in sufficient time" with technical
> information needed to create products that would work with
> IBM's mainframe computers. The EC also complained about
> hardware and software bundling and about various refusals
> to supply services to customers who used non-IBM
> hardware. There were extensive hearings and negotiations
> about remedies, including discussions with an advisory
> committee of national experts.

Both the Data General and AT&T (Bell labs and Unix) cases also provide
some insight as to possible solutions.

>
> After tough bargaining, IBM agreed to a sweeping remedy to
> ensure competitors' access to mainframe interface
> information. The so-called IBM Undertaking covered the
> company's System/370 computers, the dominant platform
> for mainframe computers. It began in Aug. 1, 1984, and it
> worked like this:
>
> IBM agreed to provide interface information to competitors
> by specific benchmark dates, such as "as soon . . . as such
> interfaces had become reasonably stable." That information
> would be provided either through established documentation
> and related materials (such as source code) or through some
> other adequate means, including newly prepared documents
> containing only the interface information.
>
> IBM acknowledged the "widespread interest in
> interconnecting systems and networks of different
> manufacturers," and agreed to publish extensive information
> to facilitate the attachment of competitors' systems or
> networks to IBM networks.
>
> Any company that was doing business in the EC and
> developing relevant products, including U.S. and Japanese
> companies, could ask IBM for such interface information.
> And IBM would charge only reasonable and
> nondiscriminatory fees for the information.
>
> IBM was required to support international standards for
> interconnection - including "open system" interconnection
> - for the products, systems, and networks of rival
> manufacturers.
>
> In addition to signing the Undertaking, IBM agreed to a
> system of oversight that required the company (1) to meet
> with EC authorities every year to "take stock of the
> implementation of the Undertaking and its effects," and (2)
> to present the EC with an annual report describing in detail
> "IBM's response to each question or request received under
> the terms of the Undertaking." IBM would also discuss the
> outcome of these cases with EC antitrust authorities.
>
> After five years, the company could have ended this
> arrangement. But IBM seemed to recognize that the EC
> process had created a new level of comfort for companies
> that made third-party products for the IBM mainframe
> platform and, in the eyes of some observers at least, helped
> protect IBM from itself. Thus, IBM voluntarily permitted
> the agreement to run for 11 years - six more than the
> minimum requirement.

If Microsoft does not develop a similar attitude its breakup will be
necessary.

The Microsoft problem is a management problem as much as a technological
one.

>
> The EC reported that by July 1995, IBM had received 262
> requests from 24 competitors and addressed 2,001 individual
> questions. In the 11th year alone, there were 50 requests and
> 436 individual questions.
>
> The IBM Undertaking sets a benchmark for evaluating the
> remedies currently proposed in the Microsoft case. It also
> provides a model of ongoing oversight that few so far have
> been willing to apply to Microsoft, but that may be needed to
> ensure that Microsoft follows through on its commitments.
>
> Another means of ensuring that Microsoft discloses
> information in a nondiscriminatory way has been suggested
> by Richard Stallman, founder of the modern free-software
> movement. Why not bar Microsoft from requiring
> nondisclosure by other companies as a condition of receiving
> interface information? Stallman's rule is: "If they cannot
> publish the interface, they cannot release an implementation
> of it."

Or, you could just require that no products can be sold until 6 months
after key information is released publicly.

However, this process still limits the advance of technology to only one
company. Selling the technology outright non exclusively is more likely
to result in a more rapid advance of technology.

All the smart engineers do not work for Microsoft. Most or many of them
refuse to work for Microsoft. So, there is no reason to require the
industry to follow Microsoft (or any company for that matter). Java was
not stolen from Microsoft. Navigator was not either.

The advancement of technology would call for the break-up of Microsoft
just so superior technology can in fact succeed.

>
> The most recent twists on interoperability remedies
> highlight concerns of the free-software movement. By "free
> software," we mean the type of software, like Linux or
> FreeBSD, that is largely developed by volunteers. Stallman
> and others are rightly worried that Microsoft will seek to use
> software patents to cripple the free-software movement - a
> strategy mentioned in internal Microsoft documents.
> Therefore, Stallman also suggests that Microsoft only be
> allowed to use its patents defensively, possibly through a
> mutual-defense pooling agreement. Microsoft patents would
> be cross-licensed to other companies and individuals who
> agreed to join the mutual-defense pool.

Regulating one company and not others simply to restrict its ability to
do business is fraught with problems. The FTC is not equipped to do
it. Neither is the court. However, if you do not solve the problem
then regulation of the Microsoft management will be required.

Keep in mind that any regulation is the regulation of the management of
the company not the products themselves.

>
> Porting Office to new platforms. Finally, once the court
> separates Microsoft Office from Windows, it should require
> the owner of Office to port the entire platform to at least two
> additional operating systems. For five years, the owner would
> be required to release simultaneous updates to the four
> supported platforms (Apple, Windows, and the two new
> ones). This would be expensive but hardly unreasonable
> since Office generates billions of dollars a year with huge
> profit margins.

Office and networking technology could easily be sold non exclusively to
6 or 8 players in the industry or sold to one company which in turn must
be highly regulated. If we want a "PUC" of the software industry, keep
the company and products intact.

Separating the products does not harm the products. It removes the
corrupt management. Management that is all too willing to ignore any
and all laws that limit their power to preclude others from key markets
and force the sale of one brand of key products.

Corrupt management that supports hacking (of AOL services) and
encourages hackers all over the internet to just try and take what they
are refused needs to be removed from power. Do you really think that
AT&T would have tried hacking into AOL without being pushed by
Microsoft? Was AT&T pushed by Bill Gates to also try hacking into AOL?
Microsoft does own a part of AT&T. Could AT&T and Tribal Voice simply
be pawns doing Microsoft's bidding? Did Netscape (AOL) give Microsoft a
cease and desist order regarding that hacking attempt?

The products are not the problem. Removal of power from the management
(by whatever means) will be required.

>
> The extension of Office to more operating systems may also
> be necessary to generate real competition in the operating
> systems market. Right now, Windows is perhaps the
> fourth-best operating system for people who use a PC for
> everyday tasks such as word processing or browsing the Web.
> BeOS and Linux are potentially important alternatives, and
> Gateway is also working on a new operating system. But
> Windows will not likely face much competition in the PC
> market until popular applications can run on the new
> operating systems.

Applications such as Office do need to be either required to be
available on alternative platforms or split up in such a way that
porting to other systems is highly likely. Selling a copy of Office to
Corel will most likely put those applications on Linux as well as OS/2
and BeOS.

Networking technology must also be separated from the OS. Bundling that
technology only limits the ability of superior operating system
technology from competing within any particular customer. All consumers
need solutions permitting them to benefit from the relative advantages
of all platforms and should be limited to an all Microsoft or all Linux
or all OS/2 solution. Even BeOS will benefit. And, most importantly
any future OS technology will likewise benefit. Unbundling networking
technology greatly reduces the barriers to entry for the OS marketplace.

>
> Ultimately, the purpose of debating Microsoft remedies is to
> address not only the immediate problem, but also the next
> generation of competitive challenges in the new information
> technologies. The remedies for anti-competitive conduct
> that may be ordered by the court here will have enormous
> impact on consumers, the Internet, and the computer
> industry. Indeed, we would not be exaggerating if we said that
> the Microsoft case could be instrumental in defining the
> nature of competition in electronic commerce in the coming
> century.

There is no doubt about this.

And, key to any possible remedy must focus upon offering appropriate
choices to consumers and fair, open market opportunities for all
software developers not just one company (with an ethics problem).

>
> Ralph Nader is a consumer advocate, and James Love is a
> director of the Consumer Project on Technology.
>
> Web Published Tuesday, December 14, 1999
> Published in Legal Times on: Monday, December 13, 1999
>
> --
> --
> James Love / Director, Consumer Project on Technology
> http://www.cptech.org / love@cptech.org
> P.O. Box 19367, Washington, DC 20036
> voice 202.387.8030 / fax 202.234.5176

December 10, 1999 - Friday

12:12 PM PST - Op-Ed piece sent to ZD Net for publication

Bill Gates himself harmed financially by the bundling of IE?

By Lewis A. Mettler, Esq.

Bundling applications and subsystems with the operating system is inherently unfair to consumers and in fact harmful to most if not all of them.

This is an interesting statement to make and, of course, Microsoft Corporation would wish that reality did not exist in many ways. They clearly wish that the findings of facts issued by Judge Jackson were never published. That we all know to be true.

However, the observation that bundling harms consumers and is indeed unfair to them is an interesting one indeed.

It is easy to understand how consumers who do not connect to the internet are harmed by being forced to buy IE anyway. And, it is easy to understand how those consumers who prefer Opera or Navigator as their browser are harmed by being forced to buy a copy of IE.

But, is that really a financial harm to consumers? After all, Microsoft publicly proclaims that IE is a free product. And, how can anyone be financially harmed by buying a so-called free product?

Let's consider the financial harm caused to the most ardent die-hard promoters of Microsoft Corporation. Let's consider the financial harm caused to Bill Gates by the bundling of IE with the operating system, Windows 98. Impossible, you say? Promoters of Microsoft (shareholders, employees and enslaved ISVs) could not possibly be harmed, right? Wrong. And, worse yet, the harm is financial. And, it happens today.

Let's assume Bill Gates needs one more PC at home. Now. We all know his house has a lot of rooms. Many of them have computers installed, right? Of course, they do. They are all over the place. But, lets assume there is one room left. Let's assume there is one room that does not have a PC and Gates finds out.

So. Bill Gates is in the market for a PC. (Forget the Mac, he is an Intel/AMD guy.)

Now. Gates is no dummy. He knows he can download free copies of all kinds of software. In fact, he was reading the findings of facts issued by a fellow named Jackson just a few weeks ago. Bill Gates found out that anyone could log onto the internet and download a copy of IE 5.0. Now, Gates (not being a dummy) knows that IE 5.0 is a pretty good
browser. So. He finds a PC not currently in use around the house and precedes to download a fresh copy of Internet Explorer 5.0. It works great! Those high speed lines really pay off with the big downloads. Now, Bill is all ready for the new PC.

Bill Gates runs down the street to the nearest computer store and orders up the best unit they have. "What comes on that fine machine?", he blurts out. The clerk, never aware of who he is dealing with says, "Why, it comes with Windows 98 and Internet Explorer for your web surfing pleasure". But, Bill Gates being the sharp guy and tight wad
that he is, says, "But, I just downloaded a fresh copy of Internet Explorer 5.0 last night.". Then Bill continues, "I want a $35 discount because I already have a fresh copy of that application.". (See. Bill Gates knows that browsers from Microsoft and Netscape both sold for $35 a piece in this store only a few months ago.)

Of course, the clerk says, "No one in this world is given that option!". "I do not know who you think you are, but you will pay the full price for this system regardless of what software you already own".

Well. Bill Gates is not used to being told what he must buy and pay for (regardless of his needs) but in the back of his mind something tells him he is powerless as a consumer. So he gets out his plastic and the cash register rings him up.

Bingo.

Bill Gates himself is harmed financially due to the bundling of internet explorer with the operating system. He wants IE! He wants IE badly! He wants IE so badly it is killing him! But, he has to pay the higher bundled price because the local store will not or can not offer him or anyone else a discount for applications he already has.

Do all Microsoft promoters get harmed this way? Do they all pay $35 to $140 more per PC because of the bundling of Internet Explorer with the operating system? The short answer is, "all of the intelligent ones do". The intelligent ones know for a fact they can download a free copy of Internet Explorer the night before they do their shopping. They are
not dumb. They are intelligent. They know what options they have available to them. If they do not have a PC (or theirs busted on them) they can ask a friend to download a copy of IE for them, right? Of course then can. Friends like to help out friends. Particularly smart ones.

So. The only consumers who show up at the store not knowing that they could have downloaded IE the day before are the consumers pretty much without any current knowledge about the industry or the products available on the internet. Certainly, no die-hard Microsoft supporter (including Bill Gates himself) would fit in that class of consumers.

So. Is the practice of bundling applications with the OS inherently harmful to consumers and unfair? With Internet Explorer it clearly is.

That practice financially harms die-hard Microsoft promoters and supporters (including Bill Gates himself).

December 8, 1999 - Wednesday

2:30 PM PST - Java is maturing but more must be done.

Not just Java. Networking and internet technologies need to be unbundled from operating systems so they too can provide the solutions for cross or multiple platforms.

Java is not the only issue. Sure, Java has matured. But, more importantly it has focus the attention upon the idea that single platform solutions are just plain stupid. They are horrible examples of engineering and harm consumers directly.

In the DOJ case, IE may very well be divested from Microsoft. And, that should absolutely be the minimum remedy. But, networking technology should also be separated from Windows and all networking technology companies should have equal opportunity to market networking capability to all platforms including Windows without being forced to sell only to those customers who have already been required to buy the Microsoft brand.

Separating cross-platform technologies from operating system bundles is absolutely necessary.

There is very little difference in the bundling of IE with Windows and bundling networking with Windows. Netscape was precluded from the market with one. Lantastic and others were precluded from that multibillion dollar market with the other. Java was not precluded but is has suffered enormous damage as a direct result of Microsoft's illegal acts.

Cross-platform technologies such as networking, Java and internet technologies must be developed, marketed and distributed independent of any and all operating systems. They are all subsystems or middleware that are sufficiently different from operating systems to be required to be sold in their own market.

Bundling across markets as Microsoft has done with its monopoly power must be ended.

11:00 AM PST - The DOJ files their joint proposed conclusions of law

December 6, 1999 - Monday

8:10 AM PST - The DOJ charges Microsoft with violations and remedies are on tap (also read)

Divest IE and Networking from the consumer OS.

You have to be a pretty slow learner to think that Microsoft will not use every trick it can think of to gain a monopoly power on the internet regardless of any laws. They (Microsoft) already agreed in writing with the consent decree not to tie IE to the OS. They (Microsoft) just ignore any law or agreement that limits their ability to monopolize or maintain their monopoly.

The fact that Navigator still exists as a browser (but must be given away) while Microsoft sells Internet Explorer to all consumers is not a sign of a competitive industry. If Microsoft Corporation gets money for IE then Netscape (AOL) should get money for Communicator. Unless you really think that only one company should be able to earn revenue and others must not? Is anyone so stupid to think that other than Bill Gates?

You have to be a real idiot to think that a normal market exists when one company sells its products at excessive profits while another must give theirs away. IE and Microsoft networking must be separated from the consumer OS and divested. Without that change at a minimum, Microsoft's monopoly power will be used by Microsoft to continue to force the sale of unwanted and unusable products upon all consumers.

Microsoft flatly ignores all rights that consumers might have to buy in a fair marketplace.

November 30, 1999 - Tuesday

11:21 AM PST - Consumer harm by Microsoft is real in both the short and long term views

You have to keep in mind that proof of consumer harm is not required in the antitrust case against Microsoft. Antitrust laws protect competitors from being precluded from markets. It is assumed that precluding competitors will in fact harm consumers.

As this article points out, Judge Jackson made the connection between precluding competitors and consumer harm. It is just fine to do so.

Microsoft has made a rather extensive effort in their attempt to fool consumers into thinking they are not harmed when forced to buy the Microsoft brand products. But, of course that suggestion is a bit stupid to say the least.

Would you be harmed if you were forced to buy Bayer Aspirin?

Would you be harmed if you were forced to buy a new Ford automobile?

Would you be harmed if you were forced to buy a Serta mattress?

Are any of these "bad" products? No. Of course not. And, it is fair to suggest that Windows is not a bad product either. (Although some would argue that point.) The point here is that consumers are in fact harmed every single time they are forced to buy any brand of a product. And, it is stupid of Microsoft to suggest otherwise. If IE were perfect, it would not be justified in any way.

9:15 AM PST - As settlement talks get underway...

Other law suits count as much or more that the action filed by the DOJ against Microsoft Corporation.

A settlement can cut short the legal rights of many individuals and even other corporations. It may all depend upon the wording of the settlement. However, if the settlement takes the final form of a consent decree it may also be free of any appeal process. If you consent to a judgment you pretty much have waived any right to an appeal. After all, you agreed to it.

Because of the stakes involved, I personally find the possibility of a settlement quite remote. It could happen. And, if it does happen in such a way as to solve the basic problem at Microsoft, that would be fine.

However, you must keep in mind that to this date Microsoft Corporation has chosen to completely ignore antitrust laws when they put together their business plan. (They also ignored the laws of some 19 States as well.) And, they chose to ignore the last consent decree they signed with the judge. That decree was supposed to make this suit unnecessary. Bill Gates just laughed at it.

So. I would not expect the DOJ to agree to anything that does not remove Microsoft's monopoly power. And, I trust the DOJ will not sell out the rights of individual consumers and other competitors.

Mr. Boies, counsel for the DOJ, made a public comment when the idea of a mediator was first announced. He said there were overriding public policy decisions that will make settlement difficult for the DOJ. He did not spell out precisely which policies were involved, however, I would assume that he was referring to the legal rights of other companies and consumers to sue for antitrust damages.

Caldera already has a suit pending. The Bristol case is yet to be made final. IBM, Lantastic, Corel, Novell, Intel, HP, AOL (Netscape) and others are certainly weighing their chances for a suit for monetary damages caused directly by Microsoft's illegal acts. In some of these cases, we already have been exposed to the facts that might give rise to a claim for damages. In other cases, the facts have not been so exposed. However, the total amount of antitrust damages could easily reach into the billions of dollars. And, you have to keep in mind that antitrust damages could be tripled.

You also have to keep in mind that Microsoft's lawyers were fully aware of the potential antitrust law suits since the beginning. They know the law even if they do not disclosed that in their public statements. They knew from day one that proceeding to trial might mean the company would be split up and that enormous money damages could be awarded to those companies they have illegally caused harm. But, and this is very important, they proceeded with their eyes wide open.

Why is this important? Simply because the existence of the antitrust laws and the potential remedies that could be assessed (splitting the company and triple damages) should be enough for most law abiding corporations to back off from their evil plans. Not Microsoft Corporation.

Slapping the hand and telling Bill Gates to "not do this or not do that" will be completely meaningless. That would be as meaningless as telling a hardened criminal to not sell anymore drugs as you let him go home free of any imprisonment. People like that ignore all laws at their convenience. Bill Gates and Microsoft Corporation have already proven their true character.

November 22, 1999 - Monday

1:45 PM PST - Ralph Nader goes on record suggesting that IE be divested from Microsoft

Microsoft proved IE is a separate application by distributing it completely independent of any operating system.

Microsoft also proved IE is a separate application by writing it for Apple, Solaris, HP-UX and other operating systems.

Microsoft lawyers apparently have no idea what an operating system or an application is. They are completely clueless. Or, at least that is what they want you to think.

IE should be divested.

Microsoft networking technology should likewise be divested.

And, even the operating system should be divested.

The monopoly problem and all of the harm that Microsoft has caused can be corrected. But, of course, Microsoft will never do that when they can not even define what an application is.

Home - Lewis A. Mettler, Esq.