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Microsoft Corp.

Microsoft Settles Antitrust Case with Conditional Proposal

Strategic Insights

— 2 min read

Despite the skepticism of government lawyers, Microsoft has submitted a comprehensive proposal to settle its antitrust case, which includes strict secrecy surrounding the negotiations. US District Court Judge Thomas Penfield Jackson has indicated that he will deliver a verdict by Tuesday if no progress is made in the settlement talks. The proposal includes promises to separate the company's Internet browser software from its dominant Windows operating system, allowing PC and software makers to modify the source code and embed competitor software into Windows.

Key Takeaways:

  • Microsoft's 11th-hour proposal to settle its antitrust case is considered inadequate by government lawyers, who are skeptical about its success.
  • The proposal includes promises to separate the Internet browser software from Windows, allow PC and software makers to modify the source code, and embed competitor software into Windows.
  • The Justice Department has backed off proposals to break the company up, but is expected to demand limits on Microsoft's power to add features to Windows to protect smaller rivals.
  • Microsoft's proposal includes language that limits the firm's ability to reward or punish PC makers by manipulating prices of Windows licenses.
  • The proposal also offers to disclose Windows software instructions, known as application programming interfaces (APIs), to protect "middleware" systems that interact with Windows.
  • Microsoft has agreed that the terms of any settlement would apply to all current and future versions of Windows, including Windows 2000 and its successors.
  • The proposal has been met with skepticism by government lawyers, who are expected to demand further concessions from Microsoft.
  • Microsoft has pledged to appeal an adverse ruling and has begun considering witnesses for after the verdict.

Statistics:

  • The US District Court Judge Thomas Penfield Jackson is expected to deliver a verdict by Tuesday.
  • The proposal has been evaluated by Justice Department technical experts, who are still assessing its complexity.
  • Microsoft's proposal allows PC and software makers to modify the secret source code underlying Windows by adding rival products such as Internet browsers or media players.
  • The settlement talks have been overseen by Circuit Judge Richard Posner in Chicago, who has demanded strict secrecy surrounding the negotiations.
  • The Justice Department is expected to demand limits on Microsoft's power to add features to Windows to protect smaller rivals.
  • Microsoft's share of the browser market has been declining since the emergence of Linux and other platforms.

Sources:

  • Associated Press (2000)
  • Wall Street Journal (2000)
  • Newsbytes.com (2000)
  • "Findings of Fact" by US District Court Judge Thomas Penfield Jackson (November 1999)

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