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DOJ Tilting at Windmills AGAIN!
An Opinion by Ralph F. Mariano. To begin, I
respectfully submit
WASHINGTON (Reuters) - The Justice Department
Monday accused Microsoft Corp. of using its Windows
"monopoly" to force computer makers to include the
Microsoft Internet browser in pre-loaded software, putting rivals
such as Netscape at a competitive disadvantage.
The department charged that the software giant
had violated its 1995 antitrust agreement with the government and
asked a federal court here to slap a $1 million a day fine on
Microsoft if the alleged violations continue.
The new legal assault represents a big boost
for Netscape Communications Corp., a bitter rival in the
"browser war" that had accused Microsoft of using
"clandestine" tactics to persuade personal computer
makers and others to offer its browser rather than Netscape's.
Browsers are used to navigate the Internet's World Wide Web.
In its petition, the Justice Department asked
the court to stop Microsoft, based in Redmond, Washington, from
requiring PC manufacturers to accept Internet Explorer as a
condition of receiving the company's widely used Windows 95
software.
It sought to force Microsoft to notify
consumers who have Windows 95 that they do not have to use
Internet Explorer and that they can use any compatible Internet
browser.
Consumers also would receive simple
instructions on how to remove the Internet Explorer browser icon
from their PC. To get more companies to offer evidence against
Microsoft, the department wants the court to nullify key portions
of the secrecy pacts Microsoft requires manufacturers to sign.
Microsoft chairman and CEO Bill Gates defended
the company's strategy.
"Today people want to use PCs to access
the Internet. We are providing that functionality in Windows, and
providing a platform for innovation by thousands of other software
companies," Gates said in a statement.
The department, meanwhile, said a wide-ranging
investigation of Microsoft's practices would continue.
"Forcing PC manufacturers to take one
Microsoft product as a condition of buying a monopoly product like
Windows 95 is not only a violation of the court order, but it's
plain wrong," Attorney Janet Reno told a news conference.
Microsoft's stock skidded on the news to $131
before rebounding to end up 37.5 cents at $132.625, while
Netscape's stock surged $4.3125 to end at $39.25, both on Nasdaq.
Separately, Microsoft said its first-quarter
profit from operations jumped 53 percent, slightly better than
Wall Street had expected, on strong sales of its PC software
products.
Microsoft said it had net income of $663
million, or 50 cents a share, compared with $614 million, or 47
cents, in the same quarter a year ago. Revenue for the quarter
ended Sept. 30 rose 36 percent to $3.13 billion from $2.295
billion.
The 1995 consent decree barred Microsoft from
imposing anti-competitive licensing terms on personal computer
makers. The company agreed to modify its licensing practices.
The department said it brought Monday's action
to enforce that pact and prevent Microsoft from being able to
expand its monopoly in the market for PC operating systems through
anti-competitive practices. Microsoft will have 11 days to respond
formally to the department's charges.
A spokesman said Microsoft is confident it is
operating within limits set by the 1995 consent decree, which he
said "specifically allows Microsoft to integrate new features
into the operating system", such as its Internet Explorer
browser.
"We have never tried to stop any computer
manufacturer from shipping any other browser," said spokesman
Mark Murray.
According to the department, much of
Microsoft's market power today stems from the fact that most
applications programs for PCs -- such as word processing, spread
sheets and money managers -- are written to work with Microsoft's
Windows 95 PC operating system.
Microsoft's operating system is installed on
more than 80 percent of the nation's PCs. The department said many
PC makers want to choose freely among competing software products
when they decide what to package with their computers.
"Even as we go forward with this action,
we also want to make clear that we have an ongoing and
wide-ranging investigation to determine whether Microsoft's
actions are stifling innovation and consumer choice," said
assistant attorney general Joel Klein, who is in charge of the
department's antitrust division.
The department charged that Microsoft had
refused requests from at least three PC makers to remove the
Internet Explorer program or the browser's icon from the Windows
95 package.
It cited a 1996 incident in which Microsoft
issued a formal notice to one of the nation's largest computer
makers that it intended to end its Windows 95 license agreement
unless the manufacturer continued to preinstall the Internet
Explorer icon and another Microsoft icon.
"Browsers are potentially the kind of
product that could erode Microsoft's operating system
monopoly," said Klein.
Department officials stressed that they were
not taking sides in the battle between Microsoft and Netscape, or
in any emerging competition between Windows and other products.
The Computer & Communications Industry
Association applauded the move, saying Microsoft's practice seemed
"designed to leverage the dominance of Microsoft's operating
system ... and choke off competition in the browser market."
In Mountain View, Calif., Netscape Chief
Counsel Roberta Katz said the company supports the department's
action against Microsoft. But she said it was too early to judge
the financial implications for Netscape's business.
Industry estimates suggest that Netscape
accounts for about 70 percent to 80 percent of the browser market
and that Microsoft accounts for about 30 percent. The numbers can
add up to more than 100 percent because computer users can use
more than one browser.
What
exactly is this country and its government coming to? Why are the
Whigs on the Hill (Reno & Co.) trying so hard to divert
attention away from the matters that will and do affect the nation’s
citizens the most? What is Janet Reno’s point in trying to
persecute (that’s right persecute instead of prosecute)
Microsoft Corporation? I’ll try to answer these questions as I
see it. In my best… "Telling It Like It Is" manner.
On
the Hill, we have a both a lame duck Congress, both House and
Senate divided Republican vs. Democrat. A "herd" of
elected representatives so busy shooting at each other and trying
to destroy the gains made by each party that the genuine issues
that strongly concern and affect this Nation’s citizens and
taxpayers are falling, left and right, by the wayside. That, my
friends, is one of the real CRIMES the DOJ should be vigorously
pursuing.
Madam
Reno and the DOJ should be posting wonderful and highly reassuring
headlines about the TRUE interdiction and curtailment, if not the
total eradication, of DRUGS flowing freely into the USA. But no,
they’re ever so busy pounding on Microsoft’s Door to seemingly
make headlines for themselves. This couldn’t also be a diversion
to take the heat off RENO about side stepping, backpedaling and
coddling "Slick Willie" and or the Republican National
Party over the Campaign Funds Issue now could it??
Obviously,
Janet Reno hasn’t a clue about the huge amount of tax money
Microsoft generates both directly and indirectly Federally and for
each and every State in the Union (not to mention Worldwide) nor
does she seem to care. Yet, on the real CRIME FRONT… One can
only wonder why the Drug Lords are operating with impunity and why
the Mafioso based in Las Vegas, Reno, Los Angeles, Miami,
Philadelphia, Chicago, New Orleans, New York City, New Jersey and
Boston still have an iron grip on commercial fishing, unions,
concrete distribution, trucking, construction, garbage collection,
medical coverage plans, fuel distribution terminals,
transportation enterprises and entertainment centers… along with
the "regular" underworld activities robustly flourishing
without what appears to be the least bit of DOJ interception or
mere interference.
Microsoft is
unlawfully taking advantage of its Windows monopoly to protect and
to extend that monopoly and undermine consumer choice."
:Attorney General Janet Reno
"We have never tried to stop any computer
manufacturer from shipping any other browser."
:Microsoft spokesman Mark Murray
The government asked the federal court in
Washington to hold Microsoft in contempt of a 1995 court order
barring the Redmond, Wash.-based company from anti-competitive
software licensing practices.
"This action is unfortunate and
misguided," said Microsoft spokesman Mark Murray. "The
facts will show that Microsoft is in full compliance with the
consent decree."
William Neukom, senior vice president of law
and corporate affairs at Microsoft, said the consent degree
affirms Microsoft's right to enhance its operating system.
"This was carefully negotiated with the
then-lawyers at the antitrust division of the Department of
Justice," Neukom said.
Those negotiations support "that Microsoft
was quite free to do precisely what we have done," and add
new functions to the operating system. The agreement especially
allows new functions that permit users of operating systems to
locate and collect information from new sources_in this case, the
Internet.
Internet is New Battle Ground
In many ways, the Internet is the biggest
threat to Microsoft. The company makes the software that runs more
than 80 percent of the personal computers in the United States. It
also makes word processing programs, spreadsheets, databases and
programming tools, all closely linked with the Windows 95
operating system. Microsoft's dominance of these markets allows it
to collect huge licensing revenues. But the Internet is eroding
the importance of operating systems. As use of the Internet grows,
and the software for accessing it more sophisticated, it doesn't
matter whether the computer being used runs Windows 95 or not.
"This is not about the Internet,"
said Netscape's general counsel, Roberta Katz. "It's about
doing away with competition in the browser market because the
browser threatens the operating system." The government told
the court that "as Microsoft fears, Browsers have the
potential to become both alternative "platforms" on
which various software applications and programs can run and
alternative `interfaces' that PC users can employ to obtain and
work with such applications and programs."
Its
fairly obvious Katz is sidestepping the real issue at hand. That
is: Who is to be the "Big Dog" on the Internet and tries
to make the rules? Netscape is already the predominate
Browser in use. So, what’s HER (Reno's) Problem?? They (the
criers) want their (Netscape, Oracle, Sun) version of Java to be
the THE Java used by everyone. By MS using a variation, the user
is indirectly protected from the monopolistic shot being taken by
Oracle, Netscape and Sun at tying up the Net in THEIR snare. OOOOPs,
all of a sudden the shoe is in the other foot. How about that? Web
Trends produces pages all over the net that show true statistics
prove this time and time again. Yet Katz is saying its not about
the Net? Come now, are they now trying to sell bridges in
Brooklyn? Of Course they are! Its ALL about the ‘Net. Netscape’s
Communicator is the best Netscape can muster against Internet
Explorer. So, in light of this fact, Netscape has every reason to
be putting up all sorts of weird fronts. Has anybody asked about
the Stringent, if not rediculous, requirements Netscape puts forth
relative to PLUGINS and how they steadfastly refuse to accommodate
the users in the midi and marquee areas? No, that’s ok for poor
little old downtrodden Netscape to do these things while taking
pot shots at MS and IE4. Sorry, but somebody at Justice had better
take a deeper more informed look at this entire picture.
Windows
Dominance Threatened
Netscape's software, Communicator, acts as both
platform and interface. It gives users an all-in-one program for
e-mail, the World Wide Web and allows groups to collaborate over a
network. And it runs on more than just Windows machines. And Java,
a software language from Sun Microsystems, allows programs to be
run straight off the Web, without worrying about the operating
system. Already, crude word processors and spreadsheets are
available, and they don't need Windows 95 to run. Oracle, Sun
Microsystems, Netscape and other companies are working on low-cost
personal computers that use Java rather than Windows programs
stored on personal computers' hard drives.
Folks, there is no
threat to Windows95 or any later version for that matter. The REAL
underlying reason for Oracle, Sun, Netscape and Compaq prodding
the DOJ to act is because THEY wish to take the ‘Net over with
their Net TV garbage. People, the whole premise behind the Net TV
thing is to ultimately bring the user into total dependence upon
the service provider ie., Oracle.. you will RENT the use of
programs. Once you log off you no longer have access to the
program(s) until you rent the use of it again. Talk about a
fleecing monopoly! Give these sharpies half a chance and you’ll
PAY dearly for every split second you’re on the ‘Net. We might
as well hook up intravenously and let ‘em have the pint of blood
right off the bat!! After all that’s what they are really after.
And if Windows becomes irrelevant, Microsoft's
dominance of these other software sectors could come crashing
down. To avoid such a fate, Microsoft's strategy is to siphon away
Netscape's customers and control the browser market, one that
Netscape currently dominates with a 62 percent marketshare. And by
tightly integrating its browser with the operating system,
Microsoft can ensure that Windows 95 and its successor, Windows
98, which is due out by next summer, remain in a dominant
position. Netscape would be pushed off the desktop.
Control of the operating system market allows
Microsoft to set standards that software designers have to use,
whether they want to or not, said Mike Morris, general counsel for
Sun.
"When they control the standards it means
they know first what's coming down the pipe," he said.
"Their developers will get a leg up."
Legal Troubles for Microsoft
If U.S. District Judge Thomas Penfield Jackson
agrees Microsoft violated the court order but Microsoft continues
the questioned licensing, the government wants a record $1 million
daily fine, well above the $10,000 a day it usually requests in
antitrust contempt actions. Microsoft has 11 days to file a
written response. A hearing is likely later.
"This is a very serious abuse," said
Assistant Attorney General Joel I. Klein, head of the antitrust
division. He argued that Windows and Internet Explorer "are
two different products" and should be sold separately.
"Each of Microsoft's products should compete on its own
merits."
Justice's action comes on the heels of a
lawsuit by Sun accusing Microsoft of improperly adapting Sun's
Java language for Internet Explorer.
"This is just one more piece of bad news
for Microsoft about their new browser, which has gotten very
strong technical reviews but seems to be having some trouble on
the legal front," said Dwight Davis of Windows Watcher
newsletter in Redmond.
Microsoft
Corporation is one of the world’s largest employers. Microsoft
employs thousands of folks globally. But by far, not larger than
say.. General Motors, or the HUGE Grain and FEED Conglomerates
like General Mills, ConAgra etc.. Yet the Department of Justice, (Justice?)
under the seemingly inept and woefully inadequate "Leadership
and Guidance" of Janet Reno, sees fit to hack away at
Microsoft, on an almost continual basis, for the last two and half
to three years for one absurd reason or another. Why? Because
Microsoft is in the forefront of tomorrow’s technology today?
Because MS has produced the most powerful and reliable Operating
System for the everyday computer user and the very best Web
Browser??
No, its primarily because Microsoft’s competition (lame
at best) has found Reno’s "magic GO button!" The
competition, (if you wish to call them that, I call it sour
grapes), has discovered which of the DOJ underlings are seemingly
willing to institute most any action involving MS to gain
notoriety for themselves. (the very same ones year in and year
out, check who were the DOJ rep(s) in each and every instance of
their constant hounding of MS) They seem to have forgotten they
are public servants, each and every one of them, from Reno on
down. Is what they are doing and the amount of taxpayer dollars
they are consuming (read wasting) in the public’s best interest
or, is it in the best interests of say, Netscape.. Sun or any
other wild and opportunistic number of Microsoft wanna-be’s? Or, is it another "sacrificial
ritual" of the "Control Freaks" in this Nation’s
present Administration?
Steven Decker
of Compaq Computer Corp. supplied
government lawyers with documents and testimony that allegedly
show Microsoft Corp. threatened to withhold its Windows 95
operating system from PC makers if they did not include a link to
its Web software on their computer display. Documents and
testimony from Compaq, a Microsoft ally and the world's biggest PC
maker, other PC makers and Microsoft are the underpinnings
bolstering the Justice Department's complaint Microsoft violated a
1995 antitrust agreement. The fact that the Justice Department
revealed the documents showed its lawyers are confident they have
a good case, an antitrust expert said.
Someone
ought to ask Mr. Decker and the others at Compaq about the high
priced proprietary hardware they use in their assembled computers
they sell as the industry’s "best." About the
close-outs and Job lots they buy to build these things, about the
$25.00 chassis rails and custom connectors they use thus forcing
the consumer to pay through the nose for simple upgrades and
repairs.
Microsoft,
on the other hand, has a positive and proven 15-year history of
adding features and functionality to its operating systems
products to provide more value for consumers and a rich platform
for software development. Microsoft generally requires PC
manufacturers to ship all of Windows, so that customers and
software developers will have the full benefit of the platform and
a consistent experience. From time to time Microsoft also issues
updates to Windows to keep pace with consumer demand for new
features and functionality, and PC manufacturers generally ship
the latest updates to Windows as they become available.
Over
the past two years Microsoft has been enhancing Windows with a
broad range of Internet functionality, including Internet
Explorer. PC manufacturers and customers have greeted these
enhancements to Windows with enthusiasm. Today nearly all of the
leading PC manufacturers are already shipping or plan soon to ship
Internet Explorer 4.0, the latest update to Windows, though they
are not contractually obligated to do so at this time. PC
manufacturers are shipping Internet Explorer 4.0 because they want
to provide their customers with the latest operating system
technology. That will continue regardless of the outcome of the
Justice Department’s proceeding against Microsoft.
It
is important to note that all PC manufacturers are always free to
ship any other software product from any other vendor. For
example, consumers today can purchase PCs loaded with the Windows
operating system and the Netscape Navigator browser from a variety
of manufacturers, including IBM, Hewlett-Packard, Digital,
Toshiba, Compaq and others.
Is
the DOJ going to fine Microsoft $1 million a day for
non-compliance with the consent decree?
No, the DOJ does not have the authority
to impose any fines. The DOJ has asked the court to impose
certain requirements on Microsoft, and to fine Microsoft if
the company fails to comply with those new requirements in the
future. The DOJ is not seeking any fine for things that
happened in the past.
What
are the next steps now that DOJ has filed suit?
Microsoft will have the opportunity to
present its facts and arguments to the Hon. Thomas Penfield
Jackson, the federal district judge who oversees the consent
decree, within the next few weeks. Microsoft is confident that
the Court will agree that Microsoft is complying with the
consent decree, and is competing in a fair and appropriate
manner.
Will
this action delay the shipment or impact the shipment of Windows
’98?
No. The Justice
Department’s action does not address Windows ’98.
The
Justice Department expressed concern that the non-disclosure
provisions in Microsoft’s license agreements might discourage
computer manufacturers from providing information to the
government’s investigation. Is there something unique about
Microsoft’s non-disclosure provisions?
No. There is nothing unusual about the
non-disclosure provisions in Microsoft’s licenses. Microsoft’s
non-disclosure provisions are standard provisions, very
similar or identical to provisions used by virtually every
other software company.
In
Summation.
If
and when anyone can prove the actions of Reno and the DOJ are in
the TAXPAYER’S and Citizens of this great Nation’s best
interests We will all begin to listen very seriously. So far,
all everyone has seen is another magnanimous grandstanding attempt
by Reno and Co. to take the public eye away from;
-
its coddling
"Slick Willie" and his antics with campaign dollars
-
the White Water
Affair
-
the Paula Jones
"thing"
-
its failure to
eliminate the Mafia
-
a pending
motion to impeach "Slick Willie"
-
its failure to
eliminate the curse of illegal drugs which poison our entire
society from the womb to the tomb.
One
last point. when is Janet (Waco & Ruby Ridge) Reno going to
face up to the fact the DOJ is a miserable failure under the inept
guidance Reno offers or, FAILS to offer?
Have a differing viewpoint or opinion?? Let me hear from
you and we’ll publish it right here in follow-ups to our ongoing
series "The DOJ vs. Microsoft Right or
Wrong?"
Is
this emblem soon to be regarded as a Turkey rather than the proud
Eagle it is?? Reno appears determined to make it either a Roasted
Turkey or a miserably Lame Duck!
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