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No surrender: Gates draws a line in the sand

Agreed settlement unlikely - Microsoft unshiftable on key areas

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MS on Trial Bill Gates yesterday claimed that Microsoft was "willing to go a long way to address the government's concerns," and then effectively ruled out a negotiated settlement by declaring Microsoft unshiftable on two key points. Speaking to a Microsoft shareholder meeting about the current antitrust trial situation, Gates stressed that "if we can't add Internet support, we can't add any new features." He then added: "If we can't define the user experience of Windows so that all Windows machines operate the same way, then the Windows brand is meaningless." Microsoft's determination to defend both of these points is likely to result in a fruitless outcome to talks over a negotiated settlement to the case. Gates clearly intends to continue to defend the integration of the browser in Microsoft's operating systems and to continue to add and integrate new Internet-related features. That stance doesn't altogether rule out the possibility of Microsoft agreeing to offer unbundled versions of its operating systems as a sop to the DoJ, but it does close the door on any agreed settlement whose terms required Microsoft to entirely unbundle the browser. If, for example, the DoJ wanted Microsoft to provide a level playing field and offer a choice of no browser or one of several browsers, Microsoft would not agree, because the solution would be entirely the reverse of what Gates was saying yesterday. The other stake in the ground relates to the OEM market. Microsoft tightened its control of what PC manufacturers could and could not do with Windows (largely, they couldn't) with the introduction of its Windows Experience programme a few years back. The Windows Experience effectively extended Microsoft's definition of its own intellectual copyright to include installation procedures, the look and feel of the initial screens the OEMs were allowed to present to their users, and the programs the machines were permitted to run during the installation procedure. Testimony from various companies, including Compaq, Gateway and HP, showed how this has destroyed the PC companies' ability to differentiate their products. Microsoft's own internal documentation made it clear that it was an exercise in control, plus something of a land-grab. Desktop real estate is valuable, and if anybody was to derive revenue from it, it was going to be Microsoft, not the OEMs. More recently Microsoft has loosened its control a little, but Gates' words make it clear it doesn't intend to go much further. He says: "If we can't define the user interface of Windows, so all Windows machines operate the same way, then the Windows brand becomes absolutely meaningless." That rules out even relatively minor changes that the DoJ would reject out of hand as being too weak. OEMs could be allowed, as Gateway and HP wished, to put their own look and feel onto the initial install sequence, and perhaps even (as Gateway in particular wished) to develop their own alternative user interface. But Gates has made it clear Microsoft won't shift even that far. Microsoft therefore (as could be expected) won't be agreeing to more radical changes. If the judge determined that opening up Windows source code was a viable remedy, then he major PC OEMs would be prime candidates to be given access to it. They would be able to work with a common code base, and could use their new-found knowledge of what's inside and new-found ability to do something with it to differentiate their products. To some extent this could be seen as a minor remedy, because the PC companies in general wouldn't want to get into heavy engineering, but its effect would be to roll back Microsoft's definition of its own IP to approximately where it was when Dos was the OS. But Microsoft will only accept that at gunpoint. By some strange coincidence, however, this and other more drastic measures that are being talked of now could make the fears Microsoft expressed in justification of the Windows Experience come true. The company line, as expressed by Steve Ballmer among others, is that if Microsoft does not police how Windows looks and works at first boot, Unix-style schisms and chaos will ensue. This was of course laughable at a time when OEMs were arguing over being allowed to display Netscape icons and to use their own help software, but if the source winds up being parcelled out to several different companies, it looks a lot more credible. ® Complete Register Trial coverage

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