Palm Says Microsoft/DOJ Settlement Is Inadequate
In accordance with anti-trust law, the Department of Justice has published comments submitted on its settlement of the anti-trust suit against Microsoft. Palm Inc.'s comments are very critical of Microsoft and the settlement itself.
Palm starts off by accusing Microsoft of "already engaging in actions designed to unfairly extend its personal computing operating system monopoly into the mobile computing market by eliminating competition and preventing free customer choice." According to Palm, the settlement between the DOJ and Microsoft doesn't do anything to stop what Microsoft is already doing and doesn't do anything to prevent future uncompetitive actions by Microsoft.
Earlier in this case, it was ruled that Microsoft does have a monopoly in desktop operating systems. Despite a commonly-held belief, just having a monopoly isn't illegal. What is illegal is using that monopoly to take over other markets. Microsoft has been found guilty of doing this and the settlement between the company and the DOJ and nine states is intended to prevent this from happening in the future.
This settlement has proved quite controversial. Some of the states that were originally a part of this case are looking for a much more restrictive settlement, on the grounds that this one is the equivalent of a slap on the wrist. There will be testimony from witnesses, including ones from Palm, on this in March.
In its comments on the proposed settlement, Palm says handhelds are a threat to Microsoft's monopoly on desktop computers as they can already perform many of the information storage and retrieval functions of a desktop PC and will take on more of the functions traditionally handheld by PCs as they develop further.
Because of Microsoft's monopoly, in order for handhelds to work with desktop computers they have to work well with Microsoft Windows, Office, Exchange, Visual Studio, and others. There are no real competitors so there are no options for handhelds to turn to.
According to Palm, Microsoft has already taken steps to insure that handhelds that don't run Microsoft's Pocket PC OS are at a disadvantage when working with Microsoft Office and other products, even if that means deliberately changing the applications
Palm referenced an email from Microsoft Chairman Bill Gates that ordered its developers to alter Microsoft products to ensure that Microsoft's "PDA will connect to Office in a better way than other PDAs even if that means changing how we do flexible schema in Outlook and how we tie some of our audio and video advanced work to only run on our PDAs." This email was written less than thirty days after the conclusion of the original trial in this case.
This is an example of exactly the uncompetitive activities the Sherman Anti-trust Act was designed to prevent. Handhelds running the PPC OS will work better than their competitors, not because they are designed better, but because Microsoft has a monopoly in desktop operating systems.
According to Palm, Microsoft continues to do this sort of thing. In the near future, Microsoft plans to roll out its ..NET initiative. This will involve removing many Microsoft applications from users PCs and handhelds and instead have them served by an Application Service Provider (ASP), either over a company's internal network or over the Internet.
Microsoft has refused Palm access to information and software interfaces necessary to let Palm to make its products interoperable with some Microsoft products and technologies, including some elements of .NET. Also, Microsoft has attempted to force Palm into deploying .NET software on Palm handhelds under terms that would put the Palm OS business at a prohibitive disadvantage.
Having, hopefully, established that Microsoft is unfairly using its monopoly, Palm turns to the settlement that is supposed to prevent it from doing so in the future. From Palm's standpoint, the single biggest fault with the settlement is that "it does not appear even to attempt to address handheld industry competition." All the remedies are about desktop computers and their software.
It doesn't discuss .NET at all. As Palm says, "It fails to ensure that Microsoft will not use distributed Internet-based (.NET) applications to eradicate the competitive threat of non-Microsoft platforms".
It doesn't force the company to give out information Palm needs to make its apps work as well with Windows and Office as Microsoft's own handheld software does.
Some people may feel that Microsoft has a right not not cooperate with companies it views as competitors. However, because Microsoft has a monopoly, it is in a very odd situation. While it can continue to have a desktop monopoly, it can't use that to to gain monopolies in other areas, like handheld computers.
If it did, Microsoft could potentially gain more and more monopolies and eventually come to control the entire U.S. economy. That is what happened near the end of the 19th century with Standard Oil and preventing this is the purpose behind the anti-trust legislation being enforced against Microsoft.
Thanks to Alan Hoyle for the tip. -Ed
- Comments To The Revised Proposed Final Judgment In United States v. Microsoft Corporation by Palm Inc.
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