Justice seeks swift remedy at Microsoft
USA Today
SEATTLE — So how will the government punish Microsoft for illegally maintaining its monopoly of PC operating systems?
Associated Press
The answer should come more quickly now that the Justice Department has streamlined its antitrust case against the software giant. Whether the remedy comes via settlement or trial, it could arrive within months, instead of years, and will almost surely disrupt Microsoft's plans to dominate Internet commerce, industry observers say.
Microsoft chairman Bill Gates, shown at an April 3 presentation in Seattle, scored a major victory when the Bush administration told the software manufacturer it no longer seeks to have the company broken up.
"It's a more surgical approach by the Justice Department that now says it wants to get ... to a remedy quickly," says Bob Steinberg, CEO of xSides, which is developing a competing operating system. The court could:
• Preclude Microsoft from using contract language or veiled threats to limit PC makers' offering of rival products. "The measure of the success of the remedy will be the degree to which PC makers gain control over their ability to market freely," says Chris Le Tocq, analyst at Guernsey Research.
• Open parts of the Windows operating code to competitors so they can make their software and services work well on the 92 percent of PCs that use the Microsoft operating system.
• Take other steps to limit Microsoft's ability to make its software run better on Windows than competing products.
Many of the 18 state attorneys generals participating in Justice's case believe Microsoft has continued to use illegal tactics in readying its new operating system, Windows XP. Microsoft hasn't won fans by bundling a messenger service, media player and identity authentication service in XP and by planning to weave in a new set of Web services, dubbed HailStorm.
It's all part of Microsoft's Net strategy to become the dominant supplier of software used to conduct Internet commerce, as well as the provider of the most popular Web services, such as instant messaging and notification.
Now, regulators seem bent on quickly establishing some boundaries as the company steps up its drive to dominate the Internet the way it does PCs.
"This industry moves incredibly quickly, and we hope to keep this case moving at a pace that also is swift and effective in protecting consumers, innovation and fair competition," says Iowa Attorney General Tom Miller.
While the government has indicated it won't try to halt XP's launch next month, a swift trial ending early next year might include changes to the new operating system, which the court could then order Microsoft to install retroactively via Internet download, says Rob Enderle, analyst at Giga Information Group. "This is part of an attack on the XP operating system, and they're focused on speed," says Enderle.
Because of the complexities of the case and mounting pressures over the Windows XP rollout, there was little celebrating yesterday at Microsoft's Redmond campus. Investors weren't celebrating, either: Microsoft stock fell 3 percent to $56.02.
