Microsoft has been sending out a regular newsletter called The Freedom To Innovate to pro-microsoft folks during the monopoly case. This is my favorite to date, it explains how the idea of a breakup is unfair because it would force Microsoft to compete! How terrifying! We all know that Microsoft's Skilled Engineers aren't prepared for that! To keep this in a healthy perspective, as Microsoft continues to point out how difficult it would be to give the Consumer useful and bug-free products like the Explorer, consider how the heck their competitors manage to do it everyday. It's almost like they're working for the government in trying to prove that they abuse monopoly power.

I underlined some of their text below for emphasis, and added a comment in [brackets], but otherwise this is the same text as found inside the original document.

- Dave Ljung, maintainer of The Fringe [Microsoft Section]


A Finflash From The Freedom
To Innovate Network

Government's Proposal Would Usher In
Era Of Unprecedented Regulation

On Friday, April 28, the DoJ and 17 of the 19 suing states submitted their proposal for remedies in the Microsoft antitrust case. Media coverage has focused on the most extreme regulatory proposition, breakup of the company, which would strip Microsoft's Windows family of operating system products from the rest of the company, creating a new "Operating Systems Business."

The rest of Microsoft, including the Office family of products, Visual Studio software development tools, consumer applications, MSN Internet properties, hardware products like keyboards, and all joint ventures would make up a new "Applications Business."

But breakup is only the most radical of the government proposals. Within that scheme are many equally regulatory and damaging proposals. The government's paper remedies would mean something very different in practice, with enormous negative consequences, not just for Microsoft and the industry, but for consumers as well.

Here are some examples:

Klein's Remedy bans any improvements by the Operating Systems Business to the Internet Explorer software in Windows, even though that software supports critical features in Windows.

Consumers' Reality: Microsoft's skilled engineers would not be able to speed the performance of Internet Explorer, to support new features for Web sites, to implement new industry technical standards or even to fix bugs.

Klein's Remedy allocates many of Microsoft's desktop and server operating system technologies to the Operating Systems Business and the Applications Business under the presumption that the two new companies will compete by developing different versions of such software.

Consumers' Reality: Forcing the two companies to develop new software products using the same base software - while forbidding those companies to work closely with one another - will result in incompatible products.

Klein's Remedy gives the Applications Business many next-generation technologies now under development at Microsoft for use in advanced operating system software, such as speech, gesture and handwriting recognition.

Consumers' Reality: Depriving Windows of the benefits of Microsoft's basic research in these areas would set back severely the company's efforts to develop innovative new operating system software that would enable computers to see, listen and learn.

Klein's Remedy appears to prohibit the development of devices that draw upon both operating systems and applications.

Consumers' Reality: Consumers would never see nor benefit from some exciting new products now under development at Microsoft, such as new versions of Web TV, the X-Box game console, the Pocket PC, an "e-book" reader, and a tablet PC device.

Klein's Remedy effectively would prohibit the two businesses from engaging in technical discussions to develop new versions of Windows' Office and other products that are designed to work closely with one another.

Consumers' Reality: The DOJ plan prohibits technical cooperation and instead mandates that no technical discussion occur unless the substance of the discussion is "simultaneously published" to the entire computer industry, which is a practical impossibility.

Klein's Remedy bans the addition of any significant new end-user features to Windows for as long as 10 years.

Consumers' Reality: The DOJ plan effectively would reduce Windows to a small core of low-level functions that perform only the most basic operations, which users would then need to supplement with an array of separate "add-on" programs.

Klein's Remedy would require, within six months of court approval, that Microsoft re-engineer all of its existing operating system products to enable computer manufacturers to remove consumer access to significant features, including use of such features by the operating system itself.

Consumers' Reality: To "remove" consumer access to Internet Explorer from within Windows, for example, would require Microsoft to develop a new user interface, a new system for displaying Help files and new system for providing consumers with updates to the operating system via the Internet because all of these important Windows features rely upon Internet Explorer to function.

Klein's Remedy: prohibits Microsoft from maintaining its copyright and trade-secret rights in any innovations it develops that entail interaction between any two Microsoft software products, such as desktop and server versions of Windows 2000. Any such innovations must be disclosed to Microsoft's competitors long before Microsoft has even released the products containing the innovations.

Consumers' Reality: Microsoft's direct competitors like Sun, Oracle, Apple and IBM will not only be able to innovate across their various product lines, but they will also freely benefit from the fruits of Microsoft's labor for their software products that compete with Microsoft's products. Conversely, the DOJ plan makes no provision for Microsoft to obtain comparable information concerning interactions among competitors' products, which are often unpublished.

Klein's Remedy prohibits Microsoft from offering computer makers discounts on the price of Windows for undertaking activities such as maintaining good customer support services, fighting software piracy or improving hardware offerings.

Consumers' Reality: It is likely than in the DOJ-rules world, consumers will face an increased need for customer support, software piracy - already rampant - will worsen, and computer makers will lose an important financial incentive to improve their hardware offerings.

Klein's Remedy effectively would prohibit Microsoft from working closely with software or hardware vendors to develop new product features and solicit feedback to improve those features.

Consumers' Reality: Again, the DOJ plan mandates that no technical discussion occur unless the substance of the discussion is "simultaneously published" to the entire computer industry, a practical impossibility.

Klein's Remedy: The DOJ plan prohibits Microsoft from entering into ANY business relationship with ANY computer manufacturer or software developer to promote ANY Microsoft product unless Microsoft is also prepared to enter into an identical relationship with any third party which is promoting a COMPETITOR's product.

Consumers' Reality: This is a severe business restriction that mandates, for example, if Microsoft entered into a relationship with one computer manufacturer to promote sales to high school students of laptops running Microsoft Office, Microsoft must also be prepared to enter into a similar relationship with any computer manufacturer who is featuring competing productivity software such as Corel WordPerfect. [they neglect to mention that the promotion here would be for Windows, not for Office, and they have to allow the promotion for Windows with WordPerfect as well. That's the whole point, isn't it?]

Klein's Remedy: The DOJ plan prohibits Microsoft from entering into any agreement of any kind that limits any third party's development, distribution, promotion or use of non-Microsoft platform software.

Consumers' Reality: This overly broad provision would prohibit Microsoft from entering into utterly routine and beneficial commercial arrangements such as agreements to use Microsoft platform software on a specified part of a Web site or use of such software to showcase new features to consumers.

© 2000 Microsoft Corporation. All rights reserved. Terms of Use.
Last Updated: May 7, 2000