Subject: M$ Monitor: Other Lawsuits
Audrie Krause (audrie@netaction.org)
Date: Mon, 4 May 1998 23:18:11 -0700 (PDT)
Date: Mon, 4 May 1998 23:18:11 -0700 (PDT) Message-Id: <2.2.16.19980504232031.0c7f3694@pop.igc.org> To: roundtable@cni.org From: Audrie Krause <audrie@netaction.org> Subject: M$ Monitor: Other Lawsuits
The Micro$oft Monitor
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Published by NetAction Issue No. 29 May 5, 1998
Repost where appropriate. Copyright and subscription info at end of message.
* * * * * * *
In This Issue:
Other Lawsuits Haunting Microsoft
About the Micro$oft Monitor
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Other Lawsuits Haunting Microsoft:
Ghosts of Monopolies Past, Present, and Future
Attorneys general in 13 states plan to file a joint antitrust suit in
federal court this coming week, both to prevent the integration of
Microsoft's Internet Explorer into the soon-to-be-released Windows 98, and
to challenge Microsoft's overall use of its operating system to promote the
sale of its software products. While details are not yet public, this is a
significant breakthrough since most of the attorneys general were elected by
their states' voters and represent the strongest institutional voices for
consumers within in their states.
This article was prepared by Nathan Newman, NetAction's Project Director for
the Consumer Choice Campaign. Contact Nathan with questions or comments.
Email: nathan@netaction.org or <mailto:nathan@netaction.org>
NetAction urges Micro$oft Monitor readers to call the offices of the 13
attorneys general involved in the joint lawsuit, and urge them to make their
investigations, and lawsuits, as broad as possible. If your state is not on
this list, call your state's attorney general and urge her or him to join in
the antitrust lawsuit against Microsoft. (Fax numbers and email addresses
are listed where available.)
CIRCULATE THIS NOTICE UNTIL MAY 31, 1998.
State Attorney General Phone Fax
California Dan Lungren 800-952-5225
Connecticut Richard Blumenthal 860-808-5318 860 808-5387
Attorney.General@po.state.ct.us
Florida Bob Butterworth 850-487-1963 850-487-2564
Illinois Jim Ryan 800-252-2518
attorney_general@state.il.us
Iowa Tom Miller 515-281-5164 515-281-4209
Massachusetts Scott Harshbarger 617-727-2200
Minnesota Hubert Humphrey III 800-657-3787
attorney.general@state.mn.us
New York Dennis Vacco 518-474-7330
Ohio Betty Montgomery 614-466-4320
Constituent_Services@ag.ohio.gov
South Carolina Charles Condon 803-734-4399 803-734-4323
info@scattorneygeneral.org
Texas Dan Morales 512-463-2100
dan.morales@oag.state.tx.us
West Virginia Darrell McGraw 304-558-2021
Wisconsin Jim Doyle 608-266-1221
wisag@doj.state.wi.us
========== Haunting Microsoft's Present
Many of these states have been conducting individual investigations for months
(and over a year in the case of Texas). In March, 27 states filed a joint
brief in support of the federal Justice Department's antitrust case against
Microsoft.
In that brief, the state attorneys general argued, "Microsoft is exercising
its monopoly power in the operating systems market to leverage such monopoly
power to the Internet browser market sector in order to unfairly increase its
share of the browser market by forcing OEMs to license its Internet Explorer as
a condition of licensing Microsoft's Windows operating system."
While the March filing concentrated on the browser issue, the attorneys
general have made clear that the suit to be filed this week targets a wider
array of concerns. In an earlier public statement, the attorneys general
had argued, "The competitive health of computer markets may be threatened by
the practices of a dominant firm, such as Microsoft, which could prevent
competing and potentially competing products from getting a fair market test."
Publicly expressed concerns about Microsoft from individual attorneys general
have included the anti-competitive implications of Microsoft e-commerce
ventures, its exclusive agreements with Internet service and content
providers, the proposed inclusion of Microsoft's WebTV software as part of
Windows 98, and Microsoft's licensing agreements with manufacturers that
specify that Windows automatically "boot up" on every machine - thereby
excluding competing operating system approaches.
While the Justice Department's role will most likely continue to be key to
dealing with Microsoft's anti-competitive practices, the combined suit by the
state attorneys general will add legal and political support to the emerging
public consensus to rein in Microsoft's power. The Microsoft action is part
of a growing trend of states banding together in joint actions. Similar
efforts have focused on telemarketing fraud and tobacco sales. The success
of such joint efforts in the courts has begun to have a major impact on the
legal realm, especially since a successful joint lawsuit can open the legal
and political space for more comprehensive action by the federal government.
========== Ghosts of Monopolies Past and Future
The joint attorneys general challenge to Microsoft's release of Windows 98
haunts the company's present. But two other private lawsuits -- one dealing
with Microsoft's past and the other with its future -- will set the legal
context for any broader action against Microsoft by the Justice Department.
In July 1996, Caldera, which owns DR-DOS, filed a private antitrust lawsuit
against Microsoft. DR-DOS was the most serious competitor to Microsoft's
underlying DOS operating system. In the late 1980s, DR-DOS was considered
far superior to the versions of MS-DOS then being sold, and was threatening
to undercut Microsoft's desktop monopoly. In response, Microsoft promised
the imminent release of a new version of MS-DOS with all of DR-DOS's
features and more.
In reality, Microsoft had no product to sell. The company used its
"vaporware" promises to get customers to delay purchasing DR-DOS and, in the
meantime, began implementing deals with manufacturers requiring that an
MS-DOS license fee be paid to Microsoft on every machine sold - whether
MS-DOS was installed or not. Since the hardware sellers had to pay for
MS-DOS in any case, they were unlikely to pay extra to install DR-DOS, even
if it was considered superior software. Early versions of Windows were
designed to issue false error messages that made DR-DOS appear incompatible
with Windows. This just added to Microsoft's monopolistic assault on the
competition.
These practices led to the initial Justice Department investigation in 1994,
and the consent decree Microsoft signed the following year. Whether
Microsoft has been violating that consent decree by using similar tactics in
browser competition is at the heart of Justice's initial courtroom charges
up to this point.
Caldera's lawsuit might seem like old news, but in February, Caldera was
granted permission by the courts to expand its lawsuit to include charges
that Microsoft was illegally tying MS-DOS to Windows 95. Caldera notes that
while most consumers think that Windows and MS-DOS are a single product in
Windows 95, the fact is that this integration is unnecessary. Windows 95
could be run easily on top of alternatives like DR-DOS, if MS-DOS was not
being bundled illegally with Windows. These arguments in the Caldera case
strongly parallel the charges by the Justice Department that Microsoft is
creating an artificial integration between Windows and its browser software.
A Caldera win that split DOS from Windows could prove extremely useful
legally to the Justice Department in its broader investigations.
Caldera's goals are partly to sell enhanced versions of its DR-DOS operating
system in smart appliances and older machines (Caldera is developing a DOS Web
browser useful for low-power computers). With network computers and other new
kinds of computing devices, a more competitive environment for operating
systems could give DR-DOS new life as an alternative to Microsoft.
At the broader level, Caldera hopes that a legal win will allow it to market
its version of the Linux operating system in a head-to-head challenge to
Microsoft's Windows monopoly. (WIRED magazine explains why Linux may be the
most serious operating system alternative to the Microsoft monopoly, in
<http://www.wired.com/wired/5.08/linux.html>.
Selling Linux in that case would depend on developing enough software which
works with the operating system, which brings us to the second key private
lawsuit against Microsoft, Sun Microsystems' lawsuit over the Java language.
If DOS is literally the ghost of Microsoft's monopoly past, Java is the
ghost of a future where Microsoft's monopoly no longer exists.
The Java language, developed by Sun, is designed to be "write once-run
anywhere," meaning that a Java program once written should be able to run on
a Windows, Apple, UNIX or Linux machine in exactly the same way. With Java
in place, any computer could share software and information with any other
computer without incompatibility.
Sun has worked hard to assure that everyone licensing the Java language
meets this standard and, internationally, Sun has been recognized by the
International Standards Organization (ISO) as the sanctioned arbiter of Java
standards.
Microsoft licensed Java from Sun in 1996, but in 1997 began adding features
to the language that made programs created under the Microsoft variant
compatible only with the Windows operating machine or with its own Internet
Explorer browser.
In October 1997, Sun filed a lawsuit charging Microsoft with willfully
violating the terms of its licensing contract and falsely promoting its own
proprietary version as Java compatible. On March 24, U.S. District Judge
Ronald Whyte issued a preliminary ruling barring Microsoft from claiming its
version is Java compatible or using the Java "steaming cup" logo on its
products. Judge Whyte was clear in his ruling that Microsoft's goal was to
undercut the very computer-to-computer compatibility that is at the heart of
Java's promise, arguing, "Microsoft's reading of the [contract] would
essentially allow Microsoft to destroy the cross-platform compatibility of
the Java programming environment."
In all these lawsuits, from Microsoft's past undermining of DOS competitors to
the present proposed bundling of its browser with Windows 98, to its attempt to
undermine a platform-independent Java future, there is a clear pattern of
Microsoft's monopoly strategies. While it will no doubt take a full-scale
antitrust action by the Justice Department to finally break Microsoft's
monopoly, the Caldera and Sun lawsuits put pressure on the DoJ to take that
step, and each lawsuit gives Justice more of the legal ammunition it needs
to ensure a competitive computer market with open computing standards.
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About The Micro$oft Monitor
The Micro$oft Monitor is a free electronic newsletter, published as part of
the Consumer Choice Campaign <http://www.netaction.org/msoft/ccc.html>.
NetAction is a national, non-profit organization dedicated to educating the
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Copyright 1998 by NetAction/The Tides Center. All rights reserved.
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