Consumer groups cheer states suing Microsoft

Consumer groups from across the U.S. Wednesday voiced their opposition to the proposed antitrust settlement between Microsoft Corp. and the federal government, calling it "vaguely worded and loophole-riddled," according to a letter sent to the nine state attorneys general who remain pitted against Microsoft in court.

Microsoft forged a settlement with the U.S. Department of Justice (DOJ) and nine states that are plaintiffs in the landmark antitrust case in November that would require the software maker to divulge some technical specifications of its Windows operating system. It would also give hardware manufactures sovereignty over the software and "middleware," such as media players and Web browsers, that they install on their PCs.

"The (settlement) plan fails to protect consumers from future pricing abuse and to restore consumer choice. Nor will it free the software industry from the oppressive practices that have chilled innovation and consumer choice," the letter read.

The nine states -- plus the District of Columbia -- that rejected the DOJ settlement are scheduled to file a proposed remedy Friday with U.S. District Judge Colleen Kollar-Kotelly. That proposal includes harsher restrictions for the software maker than the ones proposed by the DOJ. Microsoft will respond to that filing by Dec. 12.

The suing states include California, Connecticut, Iowa, Florida, Kansas, Massachusetts, Minnesota, Utah and West Virginia, as well as the District of Columbia.

Consumer groups urged the state attorneys general to press Microsoft further on five issues. The groups say that the proposed settlement doesn't adequately address the issue of enforcement and that a new remedy should add more oversight to any settlement, including "substantial penalties for failure to comply."

The DOJ's proposed settlement would create a three-person panel to monitor Microsoft's compliance with the deal but does not lay out any penalties.

The groups also urged the nine attorneys general to ensure that software developers have "meaningful access" to the Windows operating system source code so that they can develop applications that run efficiently with Microsoft's software. It also asks for more flexibility for computer manufacturers, greater consumer sovereignty, and greater protection for business and government markets.

In a statement Wednesday, Mark Cooper, director of research for Consumer Federation of America, alleged that consumers have been overcharged by $10 billion to $20 billion for desktop software due to Microsoft's monopoly in the market for desktop operating systems.

A similar argument is at the core of more than 100 private antitrust lawsuits that have been waged against the Redmond, Washington, software maker. Microsoft has proposed a settlement in those cases as well, which involves donating about $1 billion in hardware and software to the nation's low-income schools. That settlement has been heavily criticized by Microsoft competitors, including Apple Computer Inc., which argue it would only enhance Microsoft's monopoly power.

The consumer groups that endorsed the letter sent Wednesday to the attorneys general include the Consumer Federation of America and California, the Consumers Union, the Consumers' Coalition, Media Access Project, the Citizen Action Group for Connecticut and Iowa, and the Public Interest Research Groups (PRIG) for Florida, Connecticut, Iowa, Massachusetts, and the U.S.

"Allowing Microsoft to continue its monopolist course, which is what the proposed settlement does, will cost consumers tens of billions of dollars more," the letter read. "An effective remedy, which can now emerge only from the continuing litigation, will result in consumer savings that vastly exceed any costs associated with the trial."

Information about the consumer groups, and a copy of the letter, can be found online at http://www.consumerfed.org/.

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