Mixed reactions to Microsoft settlement

The Wall Street Journal reports that at least six states have refused to sign the deal. Massachusetts was one of the first states to voice criticism of the proposed agreement. Tom Reilly, the state’s Attorney General said, “the agreement is full of loopholes and does little more than license Microsoft to crush its competition. [The settlement] was thrust on the states at the last minute, under enormous pressure, without enough time to review the details.”

The actual terms of the settlement are a far cry from the measures proposed by Microsoft’s rivals earlier in the case, some of whom had hoped to break up the company. The terms of last week’s agreement can be summarised as follows:

Enhancing disclosure

• Including the disclosure of code used by Windows to interoperate with the operating system in order to allow developers to create competing products that will emulate Microsoft's integrated functions. The agreement provides for disclosure of code to enable non-Microsoft server software to interoperate with Windows on a PC in the same way that Microsoft servers do. This hopes to ensure that Microsoft cannot use its PC operating system monopoly to restrict competition among servers.

Providing greater access

• The agreement provides for computer manufacturers and consumers to substitute competing middleware software on Microsoft's operating system.

Banning retaliation

• Microsoft will be prohibited from retaliating against computer manufacturers or software developers for supporting or developing certain competing software.

Granting fair licenses

• Microsoft will be forbidden from creating licensing arrangements which prevent companies form exercising their rights under the agreement or which effect the singular and excessive promotion of Microsoft products.

Ensuring compliance

• The settlement adds an enforcement provision and appoints a panel of experts who will have full access to all of Microsoft's books, records, systems, and personnel, including source code, and will help resolve disputes about Microsoft's compliance with the disclosure provisions in the agreement.

Not all of the 18 states involved in the case are dissatisfied with the proposed agreement, however. The Wall Street Journal reported that the Illinois attorney general, Jim Ryan felt no need to alter the proposal and that he was willing to sign it. He was reported to have said that consumers "will have gained a freer and more competitive marketplace as a result" of the agreement.

The European Commission’s antitrust investigation of Microsoft is ongoing. News agency Reuters quotes a Commission spokeswoman telling reporters on Monday that Microsoft has yet to reply to a formal statement of objections sent to the company in August. When asked if Monday’s Department of Justice settlement would have an effect on the Commission’s approach, she replied that it was “too early to say”.