Microsoft foes say it violates settlement terms

A trade group made up of Microsoft Corp. competitors has again sent a letter to the U.S. Department of Justice (DOJ) claiming that the software maker is not living up to its end of a proposed settlement deal in its long-running antitrust bout.

This time, ProComp, or the Project to Promote Competition and Innovation in the Digital Age, claims that Microsoft has fallen short of meeting a requirement to make available core software code that will allow competitors to tune their software to work well with Windows.

Microsoft reached an agreement almost one year ago with the DOJ and later with nine state attorneys general who were also plaintiffs in the antitrust suit. A federal judge is expected to make a decision on the settlement deal any day now. However, Microsoft has already begun implementing some of the required changes.

For one, the Redmond, Washington, software maker agreed to license certain communication protocols that would allow competing developers to build desktop and server software that enjoy the same hooks into Windows as products developed by Microsoft.

"It is our strong conclusion that the information disclosure regime imposed by Microsoft has been a failure to date," ProComp wrote in a letter addressed to Charles James, the assistant attorney general for antitrust with the DOJ.

ProComp, which is backed by Sun Microsystems Inc. and Oracle Corp., takes issue with the licensing terms to which developers must agree in order to view the technical information. Microsoft requires licensees to pay fees and sign strict nondisclosure agreements (NDA) before they can even view the protocols.

ProComp argued in its letter that such terms are onerous and prevent companies from evaluating the effectiveness of the protocols. They also argue that because even the licensing terms are kept secret, the "reasonableness" of those terms cannot be evaluated.

"They must be licensed on terms that make it practical for others to license and redistribute the technology," the letter stated.

Microsoft's legal spokesman Jim Desler denied the allegations. "Anybody who is interested in or serious about licensing the communication protocols can go through this very straightforward process," he said. "And a number have."

He noted that the communication protocols are valuable intellectual property and represent years of research and development for the company. To that end, Desler argued that the licensing procedures are adequate and follow industry standard practices.

Linux vendor Red Hat Inc. also has taken issue with the disclosure policies, although it isn't represented in ProComp's complaint, according to Mark Webbink, senior vice president and general counsel for the Raleigh, North Carolina, software maker.

"We have expressed our opinion to the DOJ that the mechanisms Microsoft has put in place to be able to utilize their proprietary protocols are inconsistent with the terms of the (settlement proposal)," Webbink said. "Those mechanisms include a requirement to sign up to Passport in order to obtain an NDA, thus disclosing who you are and providing Microsoft with the ability to determine that you are not acceptable."

ProComp's letter dated Oct. 22 is the second in two months that challenges Microsoft's efforts to comply with the deal. In September, the group sent a letter to the DOJ claiming that the software maker did not make Windows XP Service Pack 1 "readily accessible to consumers." That set of software fixes and updates includes a number of features that Microsoft was required to include, such as the ability to set the operating system to launch non-Microsoft Web browsers and media players upon startup.

The DOJ has been meeting with some companies that have taken issue with Microsoft's compliance, according to Red Hat's Webbink, who has been in contact with DOJ officials. However, Microsoft denied reports that characterized the DOJ's discussions as a second investigation into the company's competitive behavior. "There's an ongoing dialog with the DOJ to ensure that we're fully implementing the consent decree," Desler said.

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