It comes as a surprise, given Microsoft's notorious tenacity, but the software giant is definitely out to clear its antitrust plate. After its settlement with the Justice Department, the company has now struck an agreement to end more than 100 private class-action suits and signalled that it wants to do the same for the case brought against it by the European Commission. (41)
Yet recent events suggest that it will not be that easy for Microsoft to shrug off its legal woes. For a start, the nine state attorneys-general opposing the federal settlement have asked the trial judge to Impose tougher remedies. (42) . And this week, a Senate committee hearing was dominated by criticism of the federal settlement.
The least of Microsoft's problems are the class-action suits, filed on behalf of consumers who say they were harmed by the company's behaviour. Giving money to schools is a good idea. But half of the gift would be in the form of free Microsoft software, costing the company almost nothing, and hurting competitors in the education market, mainly Apple. So worried is Steve Jobs, Apple's boss, that he has publicly criticised the deal—after haying kept quiet during the entire antitrust trial. (43)
The proposal of the dissenting states is more serious. (44) . Central to the plan are remedies concerning Microsoft's browser software and the Java programming language: the company would be forced to license the source code m its browser, and to make sure that Java programs can run on Windows. Microsoft would also be required m offer a stripped-down version of Windows so that PC makers could choose add-ons other than its own.
Microsoft says that the proposed remedies are "extreme and not commensurate with what is left of the case". Colleen Kollar-Kotelly, the trial judge, will decide next spring. She has put the case on two parallel tracks. One is a review of the existing Justice Department settlement (under the Tunney act) to determine if it is in the public interest. The other is litigation over the newly proposed remedies.
The European Commission. for its part, will probably wait and see what transpires m America before proceeding. It is unlikely simply to rubber-stamp the outcome as Microsoft has suggested. For one thing, European regulators have disagreements of their own with the company, chiefly that it is trying to extend its monopoly into the server and media-player markets.
But competitors and critics of the software giant, who have heavily lobbied both the states and Brussels, should not get their hopes up. Given the economic and political environment, it is still unlikely that Microsoft will get more than a slap on the wrist, even if it hurts more than the company would like. (45)
To some extent this is already happening. The "Liberty Alliance", for example, is gaining momentum. American Express and AOL Time Warner recently joined this coalition, whose goal is to provide an alternative to Microsoft's online authentication service, called Passport. Similarly, if the entertainment industry got its act together, it might be able to stop Microsoft defining the standard for digital copy-protection. Perhaps this time around, such alliances will prove a better match for Microsoft's determination.
[A] Businesses and consumers want benefits of being connected anytime, anyplace—without compromising security or control of personal information.
[B] Its rivals would perhaps do better to concentrate their energies on forming alliances that could help to keep Microsoft in check.
[C] About 12,500 schools—many of which are among the nation's poorest—would be eligible to receive software from Microsoft under the proposal.
[D] Another judge supervising the class-action suits has questioned Microsoft's plan to settle all of the eases by donating $1 billion to poor schools.
[E] As if to underline this new approach, Microsoft recently announced that William Neukom, its long-serving general counsel, will soon be replaced by Brad Smith, his more convivial deputy,
[F] Their suggested remedies do more than just plug the loopholes in the main settlement and provide for tougher enforcement. They would take back much of what Microsoft has won by abusing its monopoly power.
[G] The judge's remarks suggest that Microsoft will have to pay cash in full if it wants him m approve the agreement.