PublishedFebruary 28, 2002

Microsoft/DoJ offer little in Revised Settlement

Washington, DC – Microsoft and the Department of Justice late last night proposed a new settlement in the historic antitrust proceedings against the PC operating-system monopoly.

The proposal’s backers say the new language makes only “clarifying modifications” to the original. Computer & Communications Industry Association President and CEO Ed Black responded with the following comments:

“These modifications are virtually meaningless,” Black said. “More than 30,000 Americans have commented on the proposal. The overwhelming majority have detailed how, the settlement would have given Microsoft broader discretion to further abuse its monopoly. Instead of offering something in the public interest, the Justice Department has made only minor changes to a fundamentally flawed proposal. These minor changes do not address the substantive shortcomings the comments detail.”

The revised settlement makes slight modifications. One modification would do away with language requiring that competitors and PC makers license their patents, copyrights and trademarks to Microsoft.

In recent depositions, Microsoft admitted that this provision had caused great concern among Microsoft’s customers. Under deposition, the company even admitted that the “settlement” would put Microsoft in a better position than the one it had before the trial.

“I suppose Microsoft realized that they could never justify this windfall to the court,” Black said. “Antitrust judgments do not normally grant monopolists a right to demand intellectual property from companies that it has been found guilty of abusing.”

“We are pleased that the Justice Departments has reclaimed this windfall from Microsoft and that Microsoft will not be able to continue to use this shocking aspect against PC makers. However, Microsoft has still not given any ground nor agreed to any real modifications to their illegal conduct. From the beginning and through all the various findings of guilt, they have insisted their unlawful business practices were nothing short of vigorous competition,” Black concluded. This proposal like the last one, does not preclude a continuation of their pattern of illegal behavior, does not provide a means of restoring meaningful competition to the industry, and does not serve the public interest.

“We believe the proposed remedy offered by the nine states that have not settled with Microsoft offer the best hope for justice in the long run.”

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