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DOJ-Microsoft agreement: It's not a sellout, it's surrender

Agreement doesn't change anything, it's full of exceptions, and it has no teeth. Otherwise, it's great.

(LinuxWorld) -- If I hired a lawyer to negotiate a settlement with a predatory monopolist, a monopolist found by a federal judge, and by a federal appeals court, to have violated antitrust law in a number of ways to maintain and extend its monopoly illegally, and he or she produced a settlement like the proposed settlement between the DOJ and Microsoft, I would not just fire them. I would kick them out the door and warn them never to darken it again. Then, I would try to have them disbarred.

How bad is it? It's so bad that headlines appeared the day the settlement became public quoted Attorney General John Ashcroft saying "This is not a sellout." Ashcroft's denial sounded eerily similar to a denial heard 30 years ago when Nixon gave his famous "I am not a crook" speech.

There are three major problems with the settlement. In reverse order of magnitude, its failures are:

  • It doesn't go far enough in regulating Microsoft's future behavior. This means the agreement changes nothing.
  • The weak restraints it puts in place are more riddled with exceptions and loopholes than any possible combination of UCITA/EULA Redmond might imagine. As a result, almost none of the proposed remedies will be capable of imposing even the mild restraint intended. Instead, the settlement becomes a Bill of Rights for the monopoly, validating behaviors and practices shown to have been illegal in the proceedings.
  • It has no teeth. There are no penalties or consequences for failing to abide by its terms. The best deal those crafty winning litigators at the DOJ could get in the entire document was an equal voice with Microsoft in naming the three-person team responsible for oversight. That's the equivalent of not just letting a condemned prisoner choose the menu for his last meal, but letting him set the date, time, and location for it as well.

Even if adequate remedies had been articulated, and even if those remedies had not been emasculated by the exception mania that makes up the majority of the settlement text, they are meaningless without penalties in place for violating them.

The decree supposedly offers protections for computer makers, ISVs, IHVs, and users. If all you read is the hype flaunted jointly by the DOJ and Microsoft, you might end up with that impression. A closer reading, however, shows that it is Microsoft's interests that are protected.

Conduct (not) prohibited against OEMs

The first item addressed under the heading of "Prohibited Conduct" is retaliation against OEMs by Microsoft. This is definitely a necessary ingredient in a sufficient final judgment, and it is one of the things that can transform Microsoft from acting like the 800-pound gorilla it has been in its life as an unregulated monopoly into an honest business partner.

The so-called "Redmonian Death Penalty" has been threatened against the world's largest OEMs should they pursue a course of action in conflict with Microsoft's desires. IBM was forced to stop marketing OS/2 to get a license for Windows 95. Compaq was threatened with the loss of its license to preload Windows because of Compaq's planned use of Netscape.

Under the terms of the settlement, Microsoft can no longer penalize OEMs for offering products that compete with Microsoft platforms. OEMs will even be free (imagine that) to offer dual-boot machines featuring non-Microsoft operating systems.

Note, however, that nothing restricts Microsoft from penalizing OEMs for doing other things. What kind of other things? Anything at all not specifically stated in the settlement. In fact, the settlement protects Microsoft's right to penalize OEMs when it states: "Nothing in this provision shall prohibit Microsoft from enforcing any provision of any license with any OEM or any intellectual property right that is not inconsistent with this Final Judgment."

In other words, Microsoft is free to continue to act like an 800-pound gorilla in situations other than offering a product that competes with a Microsoft platform or that "distributes or promotes" non-Microsoft middleware. If, for example, Dell decides to offer Intuit or Real Player instead of Microsoft Money or the Windows Media player, Microsoft is hereby given permission to squeeze them until it hurts. How? Well, they could double the cost of Microsoft Office, for one thing. Nothing in the settlement prohibits it. Dell or whichever OEM it might be would still have to cave in to Microsoft's desires. Nothing changes.

The second restraint is against favorable pricing, with Microsoft being required to offer "Covered OEMs" uniform agreements with uniform terms and conditions. Microsoft will determine the pricing and allow the U.S. and "Covered OEMs" access to it. Differences in pricing are allowed for different language versions of Windows and for volume breaks, so long as they are offered on a uniform basis.

Protection for ISVs nebulous

The second group offered protection by the decree are ISVs. They are protected from retaliation and are afforded documentation to allow interoperability with Microsoft platforms. However, there are severe restrictions on the documentation, and Microsoft gets to decide who gets it and who doesn't. Open source/free software folk should not count on being included among the group that does. The decree validates the Microsoft theft of Kerberos from the open source community and specifically excludes Microsoft from the burdensome necessity of documenting the interface. This keeps the server space safe for the monopoly, but it does nothing for the rest of us.

Users are the last group to be considered. But they've been given freedom, too. Now they can add and remove icons and shortcuts to their desktops. Subject to restrictions, of course. Microsoft is restrained from changing OEM desktop settings for 14 days after the initial bootup of the PC. After that? Microsoft's right to do anything it pleases after that is part of the settlement that will make the world safe for, not safe from, the predatory monopolist.

Have I mentioned the exceptions included in the settlement? The strongest language in the document is not that restraining Microsoft's actions. It is the part of the settlement restricting the power of the settlement. Quoting from section J:

J. No provision of this Final Judgment shall:

1. Require Microsoft to document, disclose or license to third parties: (a) portions of APIs or Documentation or portions or layers of Communications Protocols the disclosure of which would compromise the security of anti-piracy, anti-virus, software licensing, digital rights management, encryption or authentication systems, including without limitation, keys, authorization tokens or enforcement criteria: or (b) any API, interface or other information related to any Microsoft product if lawfully directed not to do so by a governmental agency of competent jurisdiction.

The last part of the paragraph above doesn't make any sense to me. Not unless it is there so that Microsoft will never have to explain the NSA key found in their code. Or have to disclose any other hooks and backdoors they have installed or plan to install. Automatic software upgrades at the whim of Microsoft could easily be made to make specific machines susceptible to government eavesdropping. A crazy conspiracy theory? Probably. There has to be some reason for that statement, and for the settlement as a whole. If the government hasn't gotten something from Microsoft, even just a means for illegal wiretaps, then Ashcroft is right. It's not a sellout. It is a complete and utter surrender of the interests of the American people -- by the people sworn to protect those interests -- to the will of Microsoft.

Other hoops that have to be jumped to see API Documentation from Microsoft are left up to Microsoft. I guess the DOJ didn't want to get too involved and thought it best to leave the issues to the experts. One qualifier goes like this: "Meets reasonable, objective standards established by Microsoft for certifying the authenticity and viability of its business." Another requires Microsoft's approval of any program written based on the use of such documentation.

Your opinion, please

The brazen incompetence and dereliction of duty that was at work in producing this "settlement" boggles the mind. For all the hard work of the people involved in dragging Microsoft through the courts the past few years, exposing layer after layer of its lies, misdeeds, hidden and predatory business practices, work ending in the findings of fact and of law as set forth originally by Judge Jackson, then upheld by an appeals court meeting en banc, to be thrown out, erased, and forgiven by Ashcroft is an absolute disgrace.

Perhaps the administration meant to send a signal to big business that now they have friends in high places. There are other messages sent as well. The big one is quite clear. Corporations, the super rich, the friends of the administration are free from all those pesky laws designed to ensure the public good. They simply do not have to play by the same rules as everyone else. With a wink, a nod, and a denial of a sellout, the administration will take care of its friends.

Of course, there is still the chance that the remaining states will fare better in the court than the DOJ did in the settlement. On second thought, they could hardly do worse. Good for them for not selling out. Citizens will have their chance to comment on the proposed final judgment for a period of 60 days beginning later this week, when the document is scheduled to be published in newspapers around the country. The name and address at the DOJ to receive those comments should be available as soon as the settlement is published. I plan to submit my comments, and I hope you do too.

More Stories By Joe Barr

Joe Barr is a freelance journalist covering Linux, open source and network security. His 'Version Control' column has been a regular feature of Linux.SYS-CON.com since its inception. As far as we know, he is the only living journalist whose works have appeared both in phrack, the legendary underground zine, and IBM Personal Systems Magazine.

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