MS ANTITRUST - DOJ: Settlement has benefited consumers

The DOJ says consumers have benefited from the Microsoft antitrust settlement.

The 2002 antitrust settlement between Microsoft and the U.S. government has yielded several benefits for consumers, with competing Web browsers, multimedia applications and Web-based services flourishing since the agreement, the U.S. Department of Justice said Thursday.

The DOJ, in an 11-page report, said the settlement seems to be working, despite questions from critics. "There have been a number of developments in the competitive landscape ... that suggest that the Final Judgments are accomplishing their stated goal of fostering competitive conditions among middleware products, unimpeded by anticompetitive exclusionary obstacles erected by Microsoft," said the report, from the DOJ and the group of states led by New York that sued the company.

Among the DOJ's evidence that the settlement is working: Increased competition to Internet Explorer from other Web browsers such as Firefox and Opera; the popularity of Apple's iTunes and QuickTime and Adobe Systems's Flash for handling multimedia content; the increasing use of Web-based services for e-mail and other applications; and the decisions by hardware vendors such as Dell to offer Linux preloaded on their computers.

Apple introduced QuickTime in 1991, long before the antitrust lawsuit. Hardware vendors have been preloading Linux on computers dating back to the late '90s.

"To be sure, none of the products mentioned ... have to date resulted in a dramatic reduction in Microsoft's PC operation system market share," the DOJ report said. "The Final Judgements were targeted to reinvigorating competitive conditions that Microsoft had suppressed, not to slicing off some part of Windows' market share."

Microsoft, in a statement, said the judgment has fostered competition. The judgment "defined clear rules for how Microsoft competes without preordaining winners in the technology marketplace," Brad Smith, Microsoft's senior vice president and general counsel, said in the statement. "The [judgment] shaped how we view our responsibilities and led us to adopt a set of voluntary principles that will continue to apply even after major parts of the U.S. antitrust ruling expire this November."

The judgment and competitive principles Microsoft has adopted "provide the industry and consumers with the benefits of ongoing innovation by Microsoft, while creating and preserving robust opportunities for competition," Smith added.

Microsoft, in its own antitrust status report issued Thursday, said competing middleware products continue to "proliferate." Seven top PC makers preinstall an average of 35 non-Microsoft software products before shipping them out, the Microsoft report said.

Other groups have questioned the benefits of the settlement. Judge Colleen Kollar-Kotelly, of the U.S. District Court for the District of Columbia, has at times questioned the benefits, even though she approved the judgment.

In a hearing in February 2005, Kollar-Kotelly questioned "what, if any, effect" the judgment has had on the software market.

Another group of states led by California that also sued Microsoft and has been critical of the judgment is scheduled to release its own report by Friday. A status report on Microsoft's antitrust compliance is scheduled before Kollar-Kotelly on Sept. 11.

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Grant Gross

IDG News Service
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