The United States Department of Justice (DOJ) unveiled the Microsoft antitrust case settlement on November 2. Pending approval from 18 states and the District of Columbia, the agreement will establish new business terms for Microsoft and its competitors for the next five years.
Last year, because Microsoft was bundling its Windows operating system with other Microsoft applications, and bullying computer manufacturers into using the whole package, the DOJ threatened to break Microsoft up into separate operating system and applications companies. While the new settlement prohibits Microsoft from coercing companies into promoting Microsoft products--far from breaking the company in two--it lets the Redmond giant continue bundling their products. Several state attorneys general and numerous software industry executives and analysts are critical of this proposal.
For example, Microsoft would be required to disclose some of their programming codes for the Windows operating system--but not for handheld and server system codes. Computer manufacturers will be allowed to put competing software on computers featuring Windows, but the software must have sold one million copies in the U.S. the previous year.
Brendan Barnicle, a senior research analyst with Portland-based Pacific Crest Securities, an investment firm focused on technology, communications, and commerce companies, offers insight into the proposed agreement.
The Stranger: Will this settlement curb Microsoft's habit of abusing their monopoly power?
Barnicle: Ironically, Microsoft never had to admit with this agreement that they abused their monopoly power. But I think the experience has changed their business practices. Their name has been tarnished, and seen in an unfavorable light.
A RealNetworks exec was quoted in The New York Times saying, "[T]his is a reward, not a remedy."
Most readers can probably relate to this--you always have to go back and update your RealPlayer (RealNetworks' media player). Microsoft makes it more and more difficult to use the RealPlayer; they make theirs the default. And they'll continue to do that now.
But the core of RealNetworks' business is the servers that businesses use (to convert information to a format compatible with the RealPlayer)--that's the more profitable part. If Microsoft is controlling all of the desktops, that could encroach on the server side of the business.
Do consumers win or lose?
The consumers aren't really getting any more in choice. Microsoft would argue that since they created a universal platform, they made it easier for consumers. But there are no other choices--consumer choice is really limited.
Even if Microsoft had lost, it's not very likely consumers would have had any choice anytime soon, but now it's even less likely.
