DOJ releases comments on Microsoft case

The U.S. Department of Justice Friday began releasing some of the 30,000 comments it has received on its proposed settlement in the Microsoft antitrust case.

The first batch of 47 were the so-called "major" filings, mostly by large corporations, many competitors of Microsoft, industry groups and think tanks. Only a handful of this group appeared to support the settlement.

The filings were part of the federal Tunney Act process, a law that's intended to provide the opportunity for public comment on antitrust settlements. U.S. District Judge Colleen Kollar-Kotelly has to decide whether to accept the settlement or not. Nine of the 18 states involved in this case are pursuing tougher remedies.

The government has received 30,000 comments -- 7,500 are in favor of the settlement; 15,000 oppose it; and 7,000 express no particular view. The Justice Department plans to release the remaining comments by the end of the month on the Internet and also make them available on CD-ROM.

Among those opposing the settlement was U.S. Sen. Herb Kohl (D-Wis.), chairman of the Senate Judiciary Subcommittee on Antitrust, Business Rights and Competition. Kohl said the settlement has "so many loopholes, exceptions, qualifications and definitional limitations that Microsoft can easily avoid its requirements."

For instance, Kohl said the settlement allows PC makers to replace icons, or shortcuts, on the desktop with non-Microsoft applications. But the settlement says these rival products must have distributed 1 million copies of their products in the prior year. He said this "loophole" could "have a negative impact on the flow of venture capital and investment to technology start-ups -- precisely the engine that drove the economic expansion of the late 1990s and a key to further expansion of our all-important technology sector."

Here are some of the other filings released Friday:

-- Palm Inc., maker of handheld devices, said in its statement that Microsoft "is already engaging in actions designed to unfairly extend its personal computing operating system monopoly into the mobile computing market by eliminating competition and preventing free choice."

Palm products need to be compatible with Windows to win consumer acceptance, but the company alleged that Microsoft is refusing Palm access to information and software interfaces it needs for Microsoft interoperability. Palm said it has been prevented from working with Microsoft's software development tools, and the software company has refused to make Internet Explorer operate on Palm OS handhelds, among other complaints.

-- AOL Time Warner Inc., the company that owns Netscape Communications Corp., said the settlement is "too limited in its objectives and too flawed," and that the settlement's "patchwork of constraints on Microsoft's conduct is so loophole-ridden and exception-laden as to render its provisions ineffective."

-- Another competitor that urged rejection of the settlement was Catavault Inc., a developer of authentication software that competes with Microsoft .Net Passport. The Conshohocken, Pa.-based company said it's "in the crosshairs of the most powerful software company in the world" and said it's "severely endangered by the steps Microsoft is taking to ensure that .Net Passport becomes the dominant occupant of the online identity."

-- Individuals also submitted comments, including Einer Elhauge, a Harvard University Law School professor, who said the settlement wouldn't restrict Microsoft's ability to bundle products in its operating system and close out rivals. "... the appeals court concluded that Microsoft failed to show any technological benefit for its technological bundling, and the proposed settlement leaves Microsoft free to repeat bundling that lacks any technological merit."

Telecom firm SBC Communications Inc. in San Antonio also opposed the settlement.

"Nothing in the proposed settlement would stop the threat that Microsoft's adjudicated and unlawfully maintained monopoly poses to the very heart of consumer choice in the American economy," wrote SBC. "The settlement ignores Microsoft's ability to effectively destroy free consumer choice among the far greater array of businesses that use electronic means of communication -- such as telecommunications services [local, long distance and cellular], Internet access, voice messaging, instant messaging, video and music services, e-commerce, interactive games, to name a few."

-- The Washington Legal Foundation, a public interest law group, urged acceptance of the settlement and argued that it provided sufficient safeguards.

For instance, the group cited the settlement's requirement that Microsoft disclose its application programming interfaces (API) for new products, "unless the disclosure would compromise security or antiprivacy safeguards."

"No ambiguity exists here, and the burden would certainly be on Microsoft to demonstrate that the API disclosure would impair security or privacy, which should in any event be a primary goal of the competitor as well," the foundation said.

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