PublishedJanuary 28, 2002

CCIA Urges Court to Reject Microsoft/DOJ Settlement

Group says Settlement Is Not In Public Interest

Washington, DC – The Computer & Communications Industry Association (CCIA) today asked a federal court to reject the Microsoft/Department of Justice (DOJ) settlement because it will not significantly alter Microsoft’s unlawful behavior nor restore competition to the technology industry.

Over the past two years, nine different federal judges have agreed that Microsoft has harmed consumers through a wide variety of illegal, anticompetitive practices. All have agreed that Microsoft is a monopoly, and found it liable for multiple violations of the nation’s antitrust laws.

Yet, with victory now within reach, Microsoft and the Justice Department have presented federal Judge Colleen Kollar-Kotelly with a settlement that is little more than a complete surrender to the adjudicate monopolist. The CCIA urged Kollar-Kotelly to reject the government’s proposal.

“We are eager to have the Justice Department respond to our submission,” said CCIA President and CEO Ed Black, “because the shortcomings of the settlement are irrefutable. In fact, the Justice Department has largely ignored the deficiencies of the settlement, and instead constructed a “straw man” in its Competitive Impact Statement, which does not resemble the actual agreement.”

“Microsoft’s apparent obligations under the (proposed settlement) dissolve into thin air upon analysis,” the CCIA wrote in its filing. “The inadequacy of this remedy affirmatively harms the public interest.”

The association’s 90-page brief outlines a litany of loopholes and omissions that would leave Microsoft’s monopoly stronger – not weaker – if implemented. A few examples:

  • The proposed settlement vests in Microsoft alone the right to determine the scope of its Windows monopoly;
  • Microsoft may evade the modest technology disclosure requirements simply by failing to trademark — or renouncing trademarks in — the name of any application. The name “Microsoft Media Player,” for instance, is not trademarked, and would thus not be subject to disclosure;
  • The deal would let Microsoft implement a “Clean Desktop Wizard” which, after two weeks, could allow Microsoft to prompt computer users to “optimize” their Windows systems. That optimization may include removal of competitors’ icons and resetting system defaults to Microsoft applications.

“We are confident that even cursory scrutiny of this sham settlement will lead the court to conclude that it is grossly deficient and is not ‘in the public interest,’” said Black. “We are hopeful that after taking testimony from the State plaintiffs, the Justice Department, and Microsoft, that Judge Kollar-Kotelly will instead implement a meaningful, effective remedy to restore competition to our industry.”

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