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DoJ accepts trivial MS changes, refuses all the big ones

But Microsoft just keeps coming...

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The smart choice: opportunity from uncertainty

MS on Trial The DoJ's last brief before the Judge Jackson's Final Judgement shows that Microsoft has lost none of its fighting spirit, and is determined to get as many proposed provisions as possible reversed. It's going to be uphill work, because the DoJ has stonewalled the best that Microsoft could offer. The changes Microsoft was seeking could be categorised as trivial; serious clarifications of the text; and anticompetitive try-ons. The DoJ has gone along with 18 changes, and flatly rejected some 85 others.

The accepted changes are all in the trivial or clarification categories, except for two. Perhaps out of kindness, the DoJ has agreed to Microsoft's desire to call the breakup a "divestiture" rather than a "reorganisation". From Microsoft's perspective, it's of course better to have a word that can be exploited more easily when it really gets busy with a major PR and lobbying campaign and explains how it is being martyred as a result of the "divestiture" rather than the less-impressive "reorganisation".

Of management and 'covered OEMs'
Microsoft is unhappy that as well as senior staff, all employees who deal directly with OEMs, ISVs or IHVs, would have to certify in writing to the Chief Compliance Officer that the terms of the Final Judgement were understood, agreed to, and would be followed. Microsoft's point - it says - was that the proposed Final Judgement was so badly written that its lawyers could not understand it. Some small mistakes are corrected, but the important clarifications include a section on the identification of the covered OEMs, and Bill Gates' great desire not to be labelled a "covered shareholder" - more about that later.

The covered OEM point is that the DoJ had overlooked that the top 20 OEMs based on licensing volume would change over the ten years of enforcement, and there was no spelt-out mechanism for deciding how the OEMs should be changed over the years. This has now been remedied by allowing for a mechanism to redetermine the leading US OEMs each year. When the DoJ gets to Microsoft's other desired changes, the gloves are off and it's a bare knuckle fight: "Microsoft's other proposals consist largely of changes that would create loopholes and permit Microsoft to continue to engage in anticompetitive practices like those found by the Court or otherwise to frustrate or undermine the purposes of the Final Judgment. The balance are unnecessary because of existing, express provisions of the Final Judgment. They should be rejected...".

Microsoft is accused of quoting out of context when it said that OEMs would be able "to perform radical surgery on Windows, ripping and replacing large blocks of software code, while still entitling them to market the resulting Frankenstein's monster using Microsoft's valuable Windows trademark and logos". Not so, said the DoJ, "it will simply enable them to configure their systems so that non-Microsoft software can launch automatically, OEMs can offer their own Internet access provider or other start-up sequence, and non-Microsoft Middleware can be made the default."

Reorganisation as sabotage? Surely not...
The DoJ was suspicious that Microsoft would try "to shift assets before the Plan of divestiture is implemented to frustrate the effectiveness of the Final Judgment". As for the extension of time that Microsoft wanted, the DoJ is again suspicious, and said that "this provision is necessary to ensure, for example, that Microsoft does not take steps during the appeals process to make implementation of the Final Judgment more difficult or to weaken the effectiveness of the remedy. It simply requires Microsoft to preserve, maintain, and operate what will be the Applications Business and the Operating Systems Business .as separate, distinct and apart from one another as they were on April 27, 2000'".

The DoJ says that Microsoft confuses the time for the actual planning and implementation of the divestiture with the requirement that it reports to the Court on the steps it has taken "to preserve the viability and existing separateness".

The Plaintiff States meanwhile reject Microsoft's argument that they have no enforcement powers: "The plaintiff States are law enforcement officials responsible for enforcing the antitrust laws in their respective States and are therefore entitled to participate in matters relating to the enforcement of the Final Judgment" .

Point by point, the DoJ goes on to demolish Microsoft's proposed modifications. Where Microsoft proposed that it should not have to retain emails for so long, the DoJ has dug out some choice extracts from the documentation of the case: "Microsoft's claim that .the government has never had any difficulty obtaining relevant e-mail from Microsoft' is belied by the testimony of Bill Gates. In his deposition, Gates testified that .most people here delete most of the e-mail they receive every day,' .I don't keep most e-mail I receive,' .I delete 98 percent of my e-mails,' and .Q. You never preserve messages that you send? A. I don't preserve them. There is the extremely rare case, which I've done almost never, where you copy yourself on the e-mail.'" In view of this, and the amazing disclosures in the emails that we have seen, it makes you wonder what has been destroyed. ®

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