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Competitors complain that Microsoft’s recent settlement of their antitrust case with the federal government will do little to protect them or consumers from the software giant’s monopoly power^①. But they hold out hope that state attorney generals could make the deal more restrictive. "My guess is that all Bill Gates could do was to suppress a big grin when he held his press conference this morning," said Mitchell Kertz-man, chief executive of Liberate Technologies, a rival provider of software for interactive TV. "This settle merit does not come close to matching the scope of the violation of antitrust law that Microsoft has been convicted of," he added. "It was an inexplicably bad deal for the government."
Microsoft and the Justice Department presented the settlement to a federal judge Friday, saying that it would end the antitrust case in a way that would help the declining economy. US District Judge Colleen Kol-lar-Kotelly agreed to review it and gave the 18 states involved in the case until Tuesday to decide whether to accept the plan.
Several competitors called on the state attorney generals to insist on making changes to the settlement. Sun Microsystems’ general counsel, Michael Morris, said the Justice Department was "walking away from a case they had already won." Paul T. Cappuccio, the general counsel for AOL Time Warner, said the settlement ".does too little to promote competition and protect consumers, and can too easily be evaded by a determined monopolist like Microsoft."
The state attorney generals had been pressing for stiffer penalties, but on Friday several said progress had been made. Among the key elements of the settlement, Microsoft would have to:
—Help rivals make products compatible with the Windows operating system, which runs 91 percent of the world’s computers.
—Stop using exclusive deals with computer sellers to put competitors at a disadvantage.
—Let three in-house independent experts monitor its compliance.
"We are quite disappointed. We believe there are a lot of issues that have not been addressed," said Michald Mace, chief officer of handheld computer maker Palm, which makes an operating system that competes with one from Microsoft. Several tech executives said the settlement was too focused on restricting Microsoft’s Widows monopoly, and not its broader business practices and non-PC initiatives^②.
"This is a reward, not a remedy. It fails to terminate the illegal monopoly and fails to free the market from anti-competitive conduct," said Kelly Jo Macarthur, general counsel for Real Networks, which makes music and video software, threatened by Windows Media Player. "This agreement allows a declared illegal monopolist to determine, at its sole discretion, what goes into the monopoly operating system in the future," she added.
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