US Department Of Justice Succumbs To Microsoft

ON November 1 this year, US District Judge Colleen Kollar-Kotelly approved of the agreement between the Justice Department and Microsoft on its anti-trust case. This agreement, while admitting that Microsoft was a monopoly and had used it’s monopoly to squeeze out its competitors and fleece the customers, has virtually allowed it to continue its past practices. The plea of some of the states (9 dissenting states) that the agreement did not address vital concerns of either the consumers or competing software companies was rejected, virtually in toto. This brings to an end the attempt to muzzle Microsoft, the most predatory multinational today, and District Judge Jackson’s earlier judgement of separating Microsoft into different companies, one for the operating system business and the other for the rest of its activity.

Judge Jackson wrote in his opinion that Microsoft used “every trick in the monopolist’s world” to crush their rivals. The major element in his judgement was that if Microsoft would have to hive off its operating system business from its other business, it would allow all other competitors to have a level playing field. Microsoft used its monopoly in the operating system to bundle other software and also build the interface that makes it easy for its own products and difficult for others. The judgement had also noted that Microsoft used the dominant position of Windows to browbeat all PC manufacturers to bundle Windows with the PC and configure it without their competitor’s products. Netscape, which was pre-eminent Internet browser earlier, today has less than 4 per cent of the market. Internet Explorer, which had a small share earlier, through Microsoft’s such practices and monopoly muscle, controls 96 per cent of the browser market today.


The current agreement does not address any of the issues of the Jackson Judgement. Not only has splitting Microsoft been abandoned, almost all other measures to restrict Microsoft has also been diluted in the Justice Department-Microsoft agreement. There is nothing to prevent Microsoft’s demand on the PC manufacturers that its products – such as Explorer – must be supplied bundled with the PCs.

Secondly, the agreement does not create the conditions for a competitive environment for the operating system business. All it does is to force Microsoft to release some of its source code to allow better interfacing (known as APIs) so that other software vendors can work better with Windows. In the long run, this only reinforces Microsoft’s Windows monopoly though it allows vendors of other software products to compete better with Microsoft’s similar products. However, what code is to be made public and when, is still left to Microsoft, which will ensure Microsoft can still wriggle out of its commitments.

The third major departure from the Jackson Judgement is that the current agreement only insists that icons of Microsoft products can be removed from the Desktop (the display that comes on when you boot up the PC). This means that for the products of software competitors that Microsoft wishes to kill, Microsoft can give its alternatives bundled with Windows and the PC manufacturer can remove only the icon: Already, Microsoft is bundling media players on Windows and killing off smaller companies who had developed the same. Given the market power of Microsoft, it is unlikely that the PC manufacturers would ever exercise this right of removing just the icons.

In an on-line discussion in the Wall Street Journal site, one of the comments illustrates clearly the problem with the agreement. It says, “Sadly, the judge’s ruling is ignorant of the pervasiveness of control that selling the operating system conveys. The effect of the final ruling still means that small companies that come up with innovative add-on products for Windows operating system computers will be crushed out of business when Microsoft releases their own version of the products. This is the fundamental fault with Microsoft’s control, which is almost completely ignored by the DOJ settlement and this ruling. Witness Netscape’s demise, the shaky future of music and video players such as Real’s, and the coming dominance by MSN over AOL. The reality is that ANYTHING “built-in” to the OS will dominate over ANYTHING that has to be “downloaded” or “added on”, no matter what the relative merits are between the products. This is a sad day for innovation and a big thumbs up for corporate autocracy.”

The worldwide fight against Microsoft’s monopoly can no longer look to the US Justice Department for any succour. It is clear that the US government has decided that is better to allow Microsoft to predate on the competitors and consumers in the US in order to rule the global software market. A sacrifice that the US people should be willing to make – according to the US government – in order to preserve US’s pre-eminent position. Though the order may still be challenged, it is unlikely the dissenting 9 states will take this route. For all practical purposes Microsoft’s monopoly is likely to continue as before, with only cosmetic changes.


So what are the alternatives before the people? Are we to surrender before Microsoft and accept that either we have to pay even more than the PC cost in order to use software or take recourse to what the current IPR regime terms as piracy: copying of software for personal use. The global alternative to Microsoft monopoly is emerging from an international “alliance” of a completely new kind. Over the last two decades, a number of people have been propagating “Free Software” and “Open Source Software” as a counter to Microsoft kind of monopolies. The founder of Free Software movement, Richard Stallman was in India recently, ironically at the same time the Indian government was busy lionising the other software visitor, Bill Gates.

The Free Software movement proposes that the current copyright and patent regime is fundamentally against the development of human society and science and must be set aside. It uses – instead of copyright – a term called copyleft: all products not only can be copied freely, but all software built using free software must also be free from copyright: people should have the right to copy and distribute such products freely. Stallman identifies free software not with its cost – free software can have some price – but with freedom to make copies and modifications. This is why Microsoft finds Stallman and the free software movement’s licence – GNU general public license fundamentally subversive.

The Open Source movement shares the vision that software should be shared and copied freely but advances this as a better way to develop better software. Thus, the Open Source Initiative defines the need for open source from a pragmatic standpoint and suggests that software developed this way would be far superior to existing commercial software. Linux, developed by Torvald Linus and his group are the major proponents of this approach.

Both these initiatives have a common enemy – monopoly commercial software such as Windows. Pooled together, they offer today fairly complete solution to basic computational needs of the market. Already, Linux has beaten Windows NT for the server market as the dominant operating system. The PC market today still continues with the Microsoft monopoly due to the axis between the PC manufacturers and Microsoft.

Internationally, various governments have started to port their work to Linux, moving away from monopoly proprietary software such as Windows. Germany, China, Argentina, Brazil, South Africa are amongst some of the countries that are choosing open source instead of Windows and other proprietary products.


It is to preserve this monopoly that Microsoft and Bill Gates is most active. The offer to provide money and other help from Microsoft in India is to lock educational institutions and governments to the Microsoft platform. If this can be achieved, then Microsoft’s future monopoly will also be intact. This is the game that Microsoft is playing.

For those who may not know history of computers in India, do not know that kicking out IBM from India is the basis of India’s software strength today. Indian companies used UNIX, then in the public domain, to run their computers. As a number of international computer vendors also chose Unix subsequently to compete with IBM, this gave a unique competitive advantage to India as India already had UNIX trained software engineers. This is how the Indian software engineers broke into the US market and were able to establish their reputation.

A similar situation and opportunity exists here too. There is a monopoly, which is being challenged globally. There is an emerging platform: GNU–Linux for all computational tasks. Other governments are already climbing onto free/open source bandwagon. The question that India has to answer is are we willing to chose freedom from monopoly in software now or are we going to succumb to the siren song of Microsoft? From the hype that Gates received in his visit, the future does not look bright. But then the minister for information technology has little time for software. The stock market is his first priority, software development coming a distant second. Meanwhile, Microsoft is already partnering 18 state governments. Posturing in international meetings for Intellectual Property Rights, as Arun Shourie did recently, does not harm multinational monopoly: it is government policy and making the right choices that does. But then, we already know the meaning of BJP nationalism; it starts with the 8th century and stops with the coming of the British in the 18th. For the rest, they are willing camp followers of imperialism.