Microsoft commits to new competition principles

Microsoft will commit to following the principles of its 2002 antitrust settlement with the U.S. government beyond its end in late 2007, and in some cases, the company will expand upon those requirements, a Microsoft executive said Wednesday.

Microsoft has a responsibility to encourage both innovation and competition in the IT industry, said Brad Smith, Microsoft's senior vice president and general counsel, during a speech in Washington, D.C. The company will expand the operating-system antitrust settlement by releasing all of its software APIs (application programming interfaces), for programs such as Microsoft Office, and not just middleware APIs as required in the November 2002 settlement in U.S. District Court for the District of Columbia.

Microsoft will also commit to allow OEMs (original equipment manufacturers) to remove any Microsoft products when shipping a PC with the Windows operating system, not just remove "middleware" that's tightly integrated with Windows such as Internet Explorer or Windows Media Player, Smith said. Microsoft will commit to allowing OEMs to switch defaults for applications or remove Microsoft's products entirely from Windows, he said.

Smith's policy announcement comes a week after the European Commission fined Microsoft Euro 280.5 million (AUD$470 million) for failing to comply with the terms of a March 2004 antitrust settlement. In May the U.S. Department of Justice asked a judge to extend parts of the U.S. antitrust settlement dealing with technical documentation requirements until late 2009 or beyond.

Even though some antitrust issues remain, that won't stop Microsoft from moving forward with commitments to uphold principles of competition, Smith said. "The U.S. antitrust ruling recognized that competition at all levels should be encouraged," he said.

Microsoft's 12 new "Windows principles" will ensure choice for computer manufacturers and customers and will guarantee that software developers will be able to create applications that run on top of Windows, Smith said. "Ultimately, users are in control of their PCs," Smith said. "Users get to decide what runs on their PCs when they take them home."

The principles are available at: http://www.microsoft.com/presspass/newsroom/winxp/windowsprinciples.mspx.

As part of the principles, the company will make four new commitments that weren't part of the antitrust settlement:

-- To design its Windows Live suite of Internet services separate from Windows, so that customers can choose the Windows operating system with or without Windows Live.

-- To open up most of its operating system patents to license to other developers. The only OS patents Microsoft won't license are ones on the appearance of Windows.

-- To be "more energetic" in its support of industry standards with the goal of creating interoperable products.

-- To design and license Windows in a way that allows customers to go to any lawful Web site or use any competing application or Web service.

The fourth new principle echoes Microsoft's support of a net neutrality law now being debated in Congress.

Microsoft decided to release the principles now to generate discussion among regulators and competitors before the scheduled release of the Windows Vista operating system in early 2007, Smith said. Microsoft has learned several lessons from the U.S. and European antitrust cases, he said, including that an operating system matters less to consumers than the applications that run on top of it.

"It is the platform on which other things run, but it is not an end onto itself," he said.

Smith's announcement drew praise from Ted Halstead, president and chief executive of the New America Foundation, a moderate think tank that hosted his speech. "From my perspective, this is a real historic turning point, not only for Microsoft but for the industry as a whole," Halstead said.

Representative Jay Inslee, a Democrat, praised Microsoft's new policy. Inslee, who represents the congressional district in Washington state where Microsoft is based, noted in a statement Microsoft's new principles are voluntary. That shows the company "takes seriously the responsibilities that come with being a leader in the software industry," he said.

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