MS/DOJ - SIIA blasts expected Microsoft remedy proposal

Microsoft's response to the US government's plan to break up the company and impose behavioral remedies to stop the software maker's anticompetitive practices isn't even out yet, but it already has drawn a withering critique.

In a press conference yesterday, Ken Wasch, president of the Software & Industry Association (SIIA), and Glenn Manishin, an antitrust attorney who previously worked for the US Department of Justice (DOJ), blasted Microsoft's monopolistic practices, its likely remedy proposal -- as outlined in recent news accounts attributed to anonymous sources -- and its top officials who, according to the SIIA officials, make "twisted" claims which only serve to perpetuate the company's monopoly.

The punishment that Microsoft will propose will be "the antitrust equivalent of no television for a week," Wasch said. Both he and Manishin think that Microsoft's proposal will fall far short of adequately restricting the company's behavior and will only address what has happened in the past, rather than future activities.

"In general, we believe that Microsoft's recommendation will be half a loaf," Manishin said.

Microsoft's response to the government's proposed remedies is due today (US time). The DOJ and 19 state attorneys general filed the landmark antitrust lawsuit against Microsoft nearly two years ago, arguing that the company has illegally used its operating system monopoly in an attempt to dominate other markets, notably Internet browser software, and also has conducted anticompetitive business practices.

US District Court Judge Thomas Penfield Jackson agreed that Microsoft is a monopoly and has used that power to break the federal Sherman Antitrust Act. The trial is now in what is called the remedy phase, at the end of which Jackson will rule on how the company is to be punished. The DOJ and 17 attorneys general have proposed that Jackson order splitting the company into two separate entities -- one company focused on the operating system and the other on all other applications. Microsoft has said it will fight any such plan. Two attorneys general dissented and have proposed behavioral remedies only.

The DOJ and the 17 attorneys general also proposed a series of behavioral remedies aimed at forcing Microsoft to be more competitive. Those remedies, if approved by US Court Judge Thomas Penfield Jackson, who is presiding over the case, would take effect soon after he agrees to them and are intended to open competitive channels before the appeals process is finished. Any breakup of the company would occur only after the appeals process is finished.

The government proposal is preferable because "it's as narrow as possible in terms of the reorganisation of Microsoft to get at the operating system abuse," Manishin said.

Microsoft has made a series of inaccurate claims regarding the effect that the DOJ proposal will have on the company, Wasch and Manishin said. The company insists that it already follows some of the behavioral remedies -- including making APIs (application programming interfaces) readily available to developers.

Microsoft Chairman Bill Gates also has said this week that if the company is broken up it will be harder to detect and eradicate viruses such as the recent ILOVEYOU worm that swept the globe. The worm was spread through Microsoft Outlook. Wasch dismissed the claim that a breakup would make virus detection and eradication more difficult, saying that contention is the opposite of the truth.

Wasch and Manishin also addressed Microsoft's publicly stated intention to ask Judge Jackson to allow the company more time to specifically prepare a defense to the proposed break up remedy. They said they won't mind if the judge allows a few more weeks, but they think Microsoft wants to delay the case past the November presidential election with the hope that, if Texas Governor George W. Bush, a Republican, wins, his administration will take a more Microsoft-friendly approach than the administration of President Bill Clinton. Vice President Al Gore is the other US presidential candidate.

The SIIA is a Washington, DC-based trade association that earlier this year filed an amicus curiae (friend of the court) brief in the Microsoft case. The SIIA has been critical of Microsoft in the past.

The SIIA can be reached at

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