Bonum Certa Men Certa

The Antitrust Action Ends Amid the Biggest Microsoft Blunders

Earlier this week, in one context or another, we mentioned Microsoft's escape from the government's probation. It would clearly take us far off topic if we discussed this in depth, but there are some links in this worrisome development to stories that are covered here as well. For example, Rob Weir takes his random thoughts which we cited last week, but he puts a spin on it in his submission to Slashdot. He opines that Microsoft's recent lobbying could cause legal trouble for the company. Don't forget how they acquired votes and industry support through special deal, such as the one with Novell.

"In the wake of the exposure of Microsoft's attempt to buy Sweden's vote on OOXML and Sweden's annulment of that vote due to irregularities, IBM's Rob Weir points out that the fiasco could cause anti-trust worries for Microsoft. He quotes ALLIED TUBE & CONDUIT CORP. v. INDIAN HEAD, INC., 486 U.S. 492 (1988), which says 'What petitioner may not do (without exposing itself to possible antitrust liability for direct injuries) is bias the process by, as in this case, stacking the private standard-setting body with decision makers sharing their economic interest in restraining competition.'"


It remains somewhat uncertain whether Rob knows that Linspire, Xandros, and Novell were essentially paid to support OOXML. Just follow the money and identify incentives, even with other companies such as Apple. It is not only votes that are being bought from Microsoft partners across the world, but the entire matter at hand is just a big Web of money and favours. This is no way to define and agree on standards. This is monopoly abuse and a case of buying out (support from) the competition. It is therefore not surprising that 7 state attorneys are already protesting against the DoJ's decision to let Microsoft off the hook.

The report maintains that Microsoft's comingling violation has not been effectively addressed, that Microsoft remains in possession of the fruits of its violation and that the competitive conditions prior to Microsoft's anticompetitive conduct have not been restored.


Among the reasons cited for "increased competition" you would find GNU/Linux. The DoJ believes that because various OEMs have begun stocking Linux PCs that also says something about market share and distribution. It does not. In fact, one exhibit [PDF] from Iowa (the Petition) shows very well how Microsoft essentially blocked Linux sales over the years (the text needs tidying up a bit because it's poorly OCRed). If you wish to see more such court exhibits, just holler. I have many more and they haven't received much/any attention from the media, so they need to be made available somewhere.

Microsoft's Predatory Response to GNU/Linux

142. GNU/Linux is an "open source" operating system that runs on Intel-compatible PCs. Microsoft has targeted the competing operating system by pressuring Intel, as well as various major OEMs such as Dell and Compaq, to boycott Linux. In late 2000, for instance, Microsoft executive Joachim Kempin described his plan of retaliation and coercion to shut down competition from Linux: "I am thinking of hitting the OEM harder than in the past with anti- Linux actions" and will "further try to restrict source code deliveries where possible and be less gracious when interpreting agreements - again without being obvious about it," continuing "this will be a delicate dance."

143. LindowsOS (now known as Linspire), which is developed and marketed by Lindows.com, Inc., is an Intel-compatible PC operating system based on Linux and which competes directly with Microsoft on the. PC desktop. On information and belief, Microsoft interfered with Lindows.com, Inc.'s ability to distribute its product through the OEM channel. Microsoft also initiated a lawsuit against Lindows.com, Inc. that adversely affected Lindows.com, Inc.'s ability to exist, obtain; funding and conduct business. Microsoft's Anticompetitive Agreements With OEMs To Foreclose Competition

144. Microsoft Chairman and former CEO, Bill Gates, reportedly summarized the effects of the DOJ's 1995 consent decree--which banned "per processor" licenses, among other exclusionary licensing terms mas "nothing." Microsoft was able to devise other restrictive OEM agreements to foreclose competition in th...

145. A "per system" license was the practical equivalent of the "per processor" license. Under the "per system" license, the OEM had to pay royalties to Microsoft for every computer of a particular "model" or "system" that it shipped--again, as with the "per processor" contracts, regardless of whether the PC contained Microsoft's operating system. Microsoft defined "system" and "model" so broadly in its contracts that virtually all of an OEM's production was subject to Microsoft's "double tax" if the OEM wanted to give the consumer a choice of operating systems. Microsoft did not agree to give up its "per system" licenses in the 1995 consent decree, even though the Department of Justice warned the federal district court that "per system licenses, if not properly fencet in, could be used by Microsoft to accomplish anticompetitive ends similar to 'per processor' licenses"--and in fact were.

146. Another way that Microsoft found to circumvent the federal court's 1995 injunction forbidding its use of "minimum commitment/per processor" licenses was what Microsoft calls its "Market Development Agreements" ("MDAs"). Microsoft contrived the MDA as a device to evade the Court's decree prohibiting Microsoft from requiring OEMs to adhere to "minimum commitments." As Steve Ballmer (Microsoft's current CEO) acknowledged: "We have always given better prices to customers who work with us to make the market. Those used to take the form of commits [i.e., minimum commitments] which we do not do anymore as a result of the [federal court's] decree but we still believe in rewarding people who help us create demand. Hence the iMDA." Under the MDAs, Microsoft granted large discriminatory price concessions to those OEMs that would agree to market and promote Microsoft's Windows to the exclusion of any rival operating system. These discounts were calibrated so as to force the OEM to sell most of its computers with a Microsoft operating system in order to obtain the lowest price.

147. Because the OEM market is so competitive and profit margins are so thin, every OEM had to get the lowest price it could from Microsoft in order to survive. In March 2002, a Gateway marketing executive (Anthony Fama) testified before Judge Kollar-Kotelly in State of New York et al. v. Microsoft, Case No. 98-1233 (CKK), about how Microsoft used its MDA program in order to force OEMs to market Microsoft's operating system exclusively: "Given the substantial nature of these discounts, participation in the MDA, as a practical matter, is not optional. In other words, not receiving :these discounts would put Gateway at a substantial competitive disadvantage, and Gateway has communicated that self-evident proposition to Microsoft." Microsoft also used its MDAs to lock OEMs in and competitors out by offering a discriminatory price to the OEM in a later year provided (a) the OEM reached Microsoft's imposed goal of Windows sales over competitive sales in the prior year and (b) renewed its exclusionary contract with Microsoft for the later year. This placed the OEM on a perpetual treadmill, eliminating competition indefinitely. Microsoft continued these exclusionary terms at least past April 2002.

148. One method for encouraging competition in the operating systems market would have been the sale by OEMs of "naked machines" (i.e., computers that are sold without a predetermined suite of software forced upon the consumer). "Naked machines" would allow consumers to choose their computer's software configuration from an array of competitive software products, either for preinstallation by the OEM or installation by the end user. Microsoft sought and obtained the agreement of the OEMs to refrain from selling "naked machines." Instead, OEMs universally agree to "bundle" Microsoft applications and operating systems with their computer hardware, effectively depriving consumers of any competitive choices. These restrictive agreements exited before 2000 but, in 2000, Microsoft ratcheted the restriction up so that OEMs are forced to forfeit all discounts otherwise earned if they ship any "naked machines" to consumers. This heightened restriction, which (on information and belief) continues to the present, prohibits PC users and PC retailers from buying and installing lower priced or better quality operating systems of their choice.


Yes. And that's the company Novell wants to sell Linux with. Even Linspire gets a mention (for all the wrong reasons).

Recent Techrights' Posts

Microsoft-Connected Sites Trying to Shift Attention Away From Microsoft's Megabreach Only Days Before Important If Not Unprecedented Grilling by the US Government?
Why does the mainstream media not entertain the possibility a lot of these talking points are directed out of Redmond?
Firefox Has Fallen to 2% in New Zealand
At around 2%, at least in the US (2% or below this threshold), there's no longer an obligation to test sites for any Gecko-based browser
 
Microsoft and Its Vicious Attack Dogs (Attacking Women or Wives in Particular)
Sad, pathetic, destructive people
Upcoming Series About the Campaign to 'Disappear' the Father of GNU/Linux
Today we have Julian Assange's fate to focus on
A Month From Now Gemini Protocol Turns 5
June 20
Colombia: From Less Than 0.5% to Nearly 4% for GNU/Linux
it's not limited to this one country
Rumour: Well Overdue Red Hat Layoffs to be Announced in About 3 Days
we know they've planned the layoffs for a while
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Sunday, May 19, 2024
IRC logs for Sunday, May 19, 2024
Gemini Links 20/05/2024: Updated Noto Fontpacks and gemfeed2atom
Links for the day
GNU/Linux in Georgia: Looking Good
Windows down from 99% to less than 33%
Tomorrow is a Historic Day for Press Freedom in the UK
Take note of the Julian Assange case
Hiding in a Forest Without a Phone and Hiding Behind the First Amendment in the United States (US)
some serial defamer is trying to invert the narrative
Links 19/05/2024: Iran's President Lost in Helicopter Crash, WikiLeaks’ Julian Assange Awaits Decisions in Less Than a Day
Links for the day
Links 19/05/2024: Microsoft Investigated in Europe
Links for the day
4 Old Articles About Microsoft/IBM SystemD
old but still relevant
Winning Streak
Free software prevalence
Links 19/05/2024: Conflicts, The Press, and Spotify Lawsuit
Links for the day
GNU/Linux+ChromeOS at Over 7% in New Zealand
It's also the home of several prominent GNU/Linux advocates
libera.chat (Libera Chat) Turns 3 Today
Freenode in the meantime continues to disintegrate
[Teaser] Freenode NDA Expires in a Few Weeks (What Really Happened 3 Years Ago)
get ready
GNU/Linux is Already Mainstream, But Microsoft is Still Trying to Sabotage That With Illegal Activities and Malicious Campaigns of Lies
To help GNU/Linux grow we'll need to tackle tough issues and recognise Microsoft is a vicious obstacle
Slovenia's Adoption of GNU/Linux in 2024
Whatever the factor/s may be, if these figures are true, then it's something to keep an eye on in the future
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Saturday, May 18, 2024
IRC logs for Saturday, May 18, 2024
Links 19/05/2024: Profectus Beta 1.2
Links for the day
Site Archives (Not WordPress)
We've finally finished the work
[Meme] The EPO Delusion
on New Ways of Working
EPO Representatives Outline Latest Attacks on Staff
Not much has happened recently in terms of industrial action
Links 18/05/2024: Revisiting the Harms of Patent Trolls, Google Tries to Bypass (or Plagiarise) Sites Under the Guise of "AI"
Links for the day
Links 18/05/2024: BASIC Story, Site Feeds, and New in Geminispace
Links for the day
GNU/Linux in Kyrgyzstan: From 0.5% to 5% in Eight Years
the country is almost the size of the UK
Justice for Victims of Online Abuse
The claims asserted or pushed forth by the harasser are categorically denied
[Meme] Senior Software Engineer for Windows
This is becoming like another Novell
Links 18/05/2024: Deterioration of the Net, North Korean IT Workers in the US
Links for the day
Windows in Lebanon: Down to 12%?
latest from statCounter
[Video] 'Late Stage Capitalism': Microsoft as an Elaborate Ponzi Scheme (Faking 'Demand' While Portraying the Fraud as an Act of Generosity and Demanding Bailouts)
Being able to express or explain the facts isn't easy because of the buzzwords
Links 18/05/2024: Caledonia Emergency Powers, "UK Prosecutor's Office Went Too Far in the Assange Case"
Links for the day
Microsoft ("a Dying Megacorporation that Does Not Create") and IBM: An Era of Dying Giants With Leadership Deficits and Corporate Bailouts (Subsidies From Taxpayers)
Microsoft seems to be resorting to lots of bribes and chasing of bailouts (i.e. money from taxpayers worldwide)
US Patent and Trademark Office Sends Out a Warning to People Who Do Not Use Microsoft's Proprietary Formats
They're punishing people who wish to use open formats
Links 18/05/2024: Fury in Microsoft Over Studio Shutdowns, More Gaming Layoffs
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Friday, May 17, 2024
IRC logs for Friday, May 17, 2024
Links 18/05/2024: KOReader, Benben v0.5.0 Progress Update, and More
Links for the day