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 In
the Wild West, mavericks and adventurers made their mark through
imagination, boldness and innovation. But even in the Wild West, there
was a sheriff and a judge to enforce the law and ensure fair play on
the frontier.
The Microsoft antitrust case is about applying
laws to the new frontiers of hi-tech. Its outcome will affect a new
American economy driven by information and technology. That is why
California, eight other states and the District of Columbia are now
fighting for tough, enforceable remedies to end Microsoft's illegal
business practices that have unfairly stifled competition, harming
business and consumers.
The decision to pursue tough remedies was made
after careful review of the federal government's proposed settlement
with Microsoft. The federal settlement simply has too many loopholes
and falls far short of restoring competition and innovation to the
computer software industry so important to California and our nation.
Taken as a whole, the settlement simply does not offer the people, the
states or the federal government the promise of reform we earned when
the courts found Microsoft guilty.
Every court that has heard this case has found
that Microsoft illegally maintained its monopoly in PC operating
systems, crushing competitors and innovation along the way. While
admiring the genius that went into inventing and marketing Microsoft
Windows and other Microsoft software, I cannot settle for allowing the
company to continue breaking the law by illegally suppressing
competition and suffocating innovative emerging technologies. When one
business breaks the law, their competitors who do play by the rules
are hurt, and they have every right to demand and expect that the
government will bring the lawbreaker to justice.
Moreover, the Court of Appeals said that remedies
in this case "must seek to unfetter a market from anti-competitive
conduct, to terminate the illegal monopoly, deny the defendant the
fruits of its statutory violation, and ensure that there remain no
practices likely to result in monopolization in the future." The
federal deal fails on all of these points.
The federal settlement would allow Microsoft to
control the scope of its own remedy through convoluted definitions of
"middleware" that would make it possible for the company to do the
same things tomorrow that courts have found unlawful in the past.
Indeed, a key definition in the deal "shall be determined by
Microsoft in its sole discretion." The settlement also would allow
Micro-soft to continue to pay off companies for not using competing
software in the form of market development agreements. For computer
makers with razor-thin margins, this means that software competitors
will not be allowed to compete on the desktop, thus fixing the game so
they can't play.
While the deal requires Microsoft to disclose
some of the interfaces needed by competitors so that their products
can be made Microsoft-compatible, the information is too limited and
too late to allow real competition against Microsoft's own products.
The term of the agreement is too short, providing the company with
incentives to drag its feet when complying with the proposed decree.
The remedies now being sought by the states would
fix what's wrong with the proposed settlement.
They would, among other things, extend the term
of the agreement to 10 years and require that Microsoft disclose the
necessary technical information so that handheld devices, servers and
networks can work with Windows, with such information available early
enough so that rival software developers have a fair shot to compete.
To prevent further unlawful commingling of Internet Explorer with the
Windows Operating System, and prevent similar anticompetitive
commingling of other products such as multimedia video and audio
software or electronic e-mail software, the remedies would require
Microsoft to offer its operating system software on an unbundled
basis.
To assist the court in settling disputes and
monitoring Microsoft's compliance, enforcement would be handled by a
special master, rather than by a technical committee that is barred,
under the federal settlement, from reporting even the most egregious
violations to the trial court.
Microsoft business practices need fixing. The
free market, not Micro-soft, should decide the fate of emerging
technologies. Computer users deserve to have a real choice among
programs, and software developers should have a fair chance to capture
the imagination of consumers with innovative products. Requiring that
Microsoft abide by antitrust laws through enforceable remedies will
provide fair competition in a free market - which is good for
business and good for consumers.
Bill Lockyer is the attorney general of California.
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