Microsoft's Rebuttal to DoJ

Deathlizard writes "CNet News.com reports that Microsoft has released their Rebuttal to the Findings of Fact. The full Rebuttal text can be found Here."

Comments

Change the title

[Nemesys]

This rebuts the proposed conclusions of law. Not the findings of fact, which are made by the judge, not the DoJ!

Do change the title.

Re:Not rebuttall - Conclutuins of Law

[Bradley]

IANAL.

Well, from a brief skim of it (how come the entire text was at cnet, not microsoft?), they seem to be trying to show not that what they did was legal, but that the DOJ didn't actually claim hat they did anything illegal. Its not a defence of what they did, more an attack on the DOJ.

Selected quotes:

"There is remarkably little law in plaintiffs? proposed conclusions of law. Rather than address the legal principles that govern their claims, plaintiffs devote page after page to recounting the Court?s findings of fact, without regard to which of the facts found (or, in some cases, not found) have decisional significance."

[No tying arrangement] "The Court did not find that Microsoft forced anyone to purchase a second product in addition to Windows 98. Because Internet Explorer is part of Windows 98, Microsoft has never charged OEMs (or others) a separate royalty for Internet Explorer."

etc, etc. Plaintiffs haven't shown this, plaintiffs haven't shown that. They're not trying to claim that their actions were misinterpreted by the DOJ (although thats poart of their argument), but that the DOJ hasn't proved anything, and that even if what the DOJ says is right, they're still innocent. At least that's how I read it.

Does a lawyer want to tell me if that sort of thing (there's nothing to defend, they haven't said we done anything) is common?

Interesting things

[Frodo]

Interesting things here are that:

1. Windows 98 Is a Single, Integrated Product.

That's true indeed. MSIE is now no more than a GUI wrapper to a set of objects for talking HTTP, displaying HTML, etc., etc. That was a clever move, and a silly move was to include this thing in a monopoly lawsuit.

2. The Alleged Tie Does Not Foreclose a Substantial Amount of Sales of the Tied Product

And here we all can cry "lie!". I'm sure most of users won't bother to d/l netscape if they have a working IE (there were times when IE was hardly working, but it did improve - it is now working in about 90% of cases and in 99.9% of cases that Netscape is working). And the fact is that IE is better than Netscape, at least for now. I'm really dissatisfied with my Netscape on Unix, and would change it to a better product, if such one was available. Maybe Opera? Mozilla, which is in permanent pre-alpha? What?
In fact, would MS care to make MSIE cross-platform, it could be a web-browser monopoly indeed. But they left the niche to competitors - which failed miserably. Too bad for us.

3. Plaintiffs Failed To Prove That There Is a Dangerous Probability That Microsoft Will Achieve Monopoly Power in the Alleged Market for Web Browsing Software. and Microsoft Does Not Have the Power To Control Prices or Exclude Competition in the Relevant Market.

Huh, this is plain silly. They not "will achieve", they "had achieved", if we talk about Windows market. And other markets would be the same if they'd care to do them. And if they, having 90% of desktop OS market, still have no power to control the market, then who has, indeed? But they aruments of why they aren't monopoly are really amazing. Not only they refer to grocery stores analogy, they say they can't raise price on Windows because they can't restrict total output of the market of OSes... As if it is possible at all to restrict number of copies of Windows, given that lovely CD-Rs :) Application of middle-age law to a current technical level could be really funny, if they'd not take it so seriously.

Re:Interesting things

[nlvp]

They not "will achieve", they "had achieved", if we talk about Windows market.

Is Windows a market or a product? They claim that the Operating System market is not their monopoly, and they're right - I use Linux. Windows is not a market as such, just a specific GUI wrapped around an Operating System with a bunch of embedded/associated software. (not 100% accurate, but it'll do).

On the other hand, what we have is a market for OSs where the most high-margin section of the market is tied to Windows. This is not because they have the ability to squash competitors with anti-competitive practices (although they do have this ability). They used their market power (possibly illegally) in the past to establish their market position, but at the moment, any company wanting to set up a few hundred workstations for employees from financial accountants to marketeers will inevitably buy PCs with pre-loaded Windows. This is because all of their suppliers, all of their customers and all of their subcontractors will also use Windows, and will want to exchange files with them. It's because when they get consultants in, the employees have to be able to work with the consultants on the same software. It's because the accounting software they want to use comes on Windows, not Linux, because the manufacturer of that software knows that Windows is the only sigificant market when it comes to large volumes of sales. It's because there is a very large pool of Windows-aware skilled individuals out there, and computer literacy is important when you are recruiting.

Nothing would please me more than to see Linux begin to erode the mountain that is Microsoft's entrenched market position, but there is a long road ahead.

Re:Interesting things

[Merk]

C. The Alleged Tie Does Not Foreclose a Substantial Amount of Sales of the Tied Product.

A lot of this hinges on strangeness that both Netscape Navigator and IE are free products. Microsoft can claim a lot since both IE and Netscape are free to download.

Adding IE doesn't change the price of Windows 98 because they're the same product and IE is free anyhow (of course they simply bury the cost of IE in the price of Windows...)

But this line is where they cheat. The legal requirement is that the tie forcloses a substantial amount of sales of the tied product. The fact is that Netscape Navigator is free now, but it used to be a product you were supposed to pay for if you were going to use it for non-educational uses. This wasn't strictly enforced, but it most definitely was for sale. It seems pretty clear to me that Netscape was forced to give Netscape away because they were trying to compete with Microsoft who was giving IE away for free. Therefore doesn't this prove that Microsoft cost Netscape a substantial amount of sales of Navigator? It didn't deny anyone the ability to download Navigator, but it sure did deny sales.

And one more question here -- at one point Microsoft announced that IE was free and would always be free. Microsoft is now claiming that IE and Windows 98 are not seperate products, but are in fact the same thing. Does this mean that Windows 98 is free?

Legal Procedure (repost...w/ formatting)

[Anonymous Coward]

From what I understand, the procedure goes as follows...

Judge presents his findings of fact (Nov)
Plaintiffs present their findings of law
Defendants present their findings of law


Basically, the schedule for all this was set out when the findings of fact came out. MS didn't take a long time to reply, they replied on the date given to them by the judge, as did the DOJ.

Also, the findings of fact only state facts, that MS was a monopoly and what they did. It doesn't state what was illegal in that or not. THe idea was to create a firm ground from which each party can argue.

So, the DOJ takes this and from it, pics out what MS did that was illegall and presented that 2 weeks ago or so.

Now, MS looks at it, and puts their spin on it, stating how it doesn't show any illegal behaviour. THey are not arguing the findings of fact, but that they didn't break the law and that the DOJ findings of law were wrong. Granted, this boils down to splitting hairs, but what else should they do?

For better or worse, they have a responsibility to their shareholders (I am not one) to proceed this way and deny deny deny. It's like a murder trial, you'd never expect the killer (even if everyone knows he did it) to get up and say "I DID IT!" would you? Hell no, he'll defend himself, split hairs, and hope to god that he convinces someone.

The other thing is, and this has been bugging me for a while, is that regardless of wheter or not MS did something immoral that harmed the industry yada yada yada....there is a fine line of what is illegal. They walked that line. DOJ says they crossed it. Who knows. But we can't, as educated people, simply assume their guilty of breaking the law simply because what they did offends us personally.

Just my two cents.

Microsoft just can't grasp what's happened to them

[Paul Crowley]

Wow. It's like one of those old science fiction movies where you tell the computer "The next sentence is false. The previous sentence was true" and it blows up, fireworks shooting from the front panel as it desperately spins its tapes trying to figure out the paradox.

The findings of fact game is over. Jackson's findings are pretty much set in stone now; they couldn't be much more irreversible if they were a constitutional amendment. But Microsoft just can't adjust to the new game, where they try to limit the damage done to them by the findings of law and the judgement, because that means working in the framework the findings of fact create. In other words, it means admitting they're at fault. And that just does not compute for them; they don't know how to do it. They'll sooner thrash about in useless, irrelevant legal nonsense, because they simply don't know how to play this new game.

Mind you, they barely knew how to play the old one. Their Achilles Heel all along has been that the court was just another trade show, and you can baffle 'em with bullshit and wow 'em with a rigged demo. They really can't adjust to what's happening to them, and now it will be their downfall.

I just hope that the sentencing is chosen to do the rest of us some good.
--

did we expect anything less?

[xeno]

Did we, the public, expect anything less? Microsoft is nothing if not an extraordinary spin factory.

The Microsoft Proposed Findings of Law (MSPFOL) is a very well-written house of cards that depends on the legal fiction that Windows 98 and Internet Explorer are one product. I don't need to go into detail with this; if IE is available for Solaris, it ain't an inseparable part of Win98. Their lawyers may be able to say "one product" in section 1A with a straight face, but that don't make it so. Pull that card out, and the whole argument falls. (Not to say that there aren't other flaws in the MSPFOL.)

Admittedly, from a purely functional standpoint it's hard to say where any given OS ends and the applications begin, but the issue here has more to do with integration that was motivated by the desire to stamp competitors out of existence. All the arguments I've seen to the contrary are just so much hot air. IE's quality took huge leaps forward *after* it gained large market share by being forced on OEMs and customers. Win95 and IE4 were separate products, and there's not much real evidence to support the notion that there was real qualifying benefit to the consumer in the ensuing (flagrantly defiant) "integration."

So the crux of the matter (for me) lies in arguments such as claiming IE5 is a product when it suits Microsoft's interest to offer it on another platform, but it's an inseparable OS component when they walk into the courtroom. And then there's the attempt to redefine the market (section 5A, where I should take into account mainframes and PalmPilots in the same breath) to support the laughable fiction that the Windows platform does not compose a monopoly power. To me there's a line short of which their legal hairsplitting that may keep them in the right, and over that line there's a ridiculous denial of reality that irreparably harms their own credibility. Once they cross that line, how can they expect to be taken seriously again? Is it just that they're dug in so far that there's no other alternative but to fight dead-on? Or is it just that the arrogance is so deeply ingrained that even the law is just another business obstacle to be overcome, without a second thought about the ethical, social, and other long-term reasoning behind the law?


Jon
Just my rambling thoughts. Me? I want to work for a company that still has a collective conscience.

Re:did we expect anything less?

[xeno]

You're right, that is glossing over an important point. Here's my thinking:

The basic design model for IE is consistent across platforms. MS used various tools (I can't remember the primary Win2Unix tool's name off the top of my head) to port the code. However, on the Windows platform Microsoft has manipulated the structure of the program such that the various functions are now distributed throughout the OS, and the IE application is pretty much just a shell that calls various network, parsing, script execution, and other components implemented as DLLs throughout the OS. However, I'm of the opinion that just because they sprinkled the DLLs into the OS and made use of them elsewhere does not justify the various claims of "integration", claims that the integration benefits the consumer, and that this integration was a natural evolution of the product. There is still a distinct application hidden in the woodwork of the operating system.

To me, Microsoft's arguments about WIn98/IE integration sound a lot like the Iraqi behavior concerning chemical weapons in the gulf war -- they separated the components and distributed them throughout the country. While some of the components may have then been legit pharmeceuticals stored in a given factory, that doesn't preclude a factual conclusion that there still existed chemical weapons in the country. I see the MS lawyers saying "Look, no browser here, just an OS." But I see a distinct app with a distinct model, development plan, characteristics, features, and even portability, all swirled around in Win98. The only real effect of that "swirling" that I can see is to prevent easy removal of the application, and to (successfully) stifle a competitor.

Jon

Re:did we expect anything less?

[xeno]

Ok, you wanted some opinions, so here you go:


Settings=Control Panel=Add/Remove Programs=Microsoft Internet Explorer 5 and Internet Tools=Add/Remove only removes a shell application, leaving behind some 30-40 megs of web-related crap that you really can't get rid of because of intentional dependencies in the OS. It may be just as hard or harder than removing the Netscape icon on your TurboLinux desktop; if TurboLinux makes it hard to get rid of then shame on them.


Microsoft only does with IE what every other OS supplier does -- they installed and featured a preferred browser. Um, no. What they did was to install a browser on a monopoly product and make it difficult enough to get rid of that the average user would become frustrated and simply use what they were given. Most users would try to drag IE to the trash and give up when told that that operation was not permitted.


There is no harm to the consumer. We all know that Netscape Navigator is an inferior product which does not support CSS in a consistent way. Flamebait! Inferiority is a matter of opinion. Personally I think that CSS is a POS junk technology that extends a terrible model of client-side content control, breaking tons of business security models in its path. IE's consistent and tight integration with a platform that suffers from major security problems means that those security problems are extended so far that even my browsing of the web can damage my system. OTOH, I can fire up Netscape as 'nobody' on Linux and safely cruise the web with Javascript and Java turned on. From this security-centric point of view (one which is much more important in a corporate setting than CSS functionality), Internet Explorer is a vastly inferior product.


Is it Microsoft's fault that Netscape degraded its own browser with useless proprietary mush that no one wanted? Nope. Netscape shot themselves in the foot by allowing Microsoft to define the development game. But then again, MS controls 90%+ of the deployment platforms, which makes fighting a feature-driven battle an almost unwinnable one.


Do we really want the government regulating the computer desktop in favor of an inferior product? Clearly not. I want the government to punish Microsoft for its illegal behavior. That's all. Netscape, IE, Linux, W2K; all of these should live or die by their own merits. A monopoly that tries to force product acceptance outside of these merits ought to be treated to interference by the DOJ. Funny that...


J

Not a FoF rebuttal, but maybe it is

[freeBill]

Technically, this is not a rebuttal of the Findings of Fact, but Microsoft's arguments for what they think should be concluded from the FoF. Of course, they say they "respectfully" disagree with the FoF, but will accept them for the sake of these arguments.

But Robin's characterization is not as far off as it sounds. Since they cannot really get from the facts as Judge Jackson originally ruled to the conclusions they want, they did try to refute the fact the judge ruled they have a monopoly.

This is a hint they are adopting an appeals-based strategy. To insult the judge by disagreeing with the judge on something he has already ruled on (for more than 25 pages, no less) indicates they believe they have no hope of winning at this level. The only way this kind of strategy can work is if -- by insulting the guy who's ruling on your case -- you can provoke him into doing something rash. Then you can get a ruling on appeal by showing he over-reached.

Not likely in this case: This is a conservative jurist who is likely to shade his Findings of Law in Microsoft's favor after shading his Findings of Fact in the government's favor. The result will be an appeal-proof compromise.

The really interesting thing about this filing is the fact that MS's lawyers still don't have the guts to tell a man who's got close to $100 billion that he blew it in his deposition. This is most interesting when you consider that MS shareholder money is being used to take actions which are probably not in their best interest (although breaking up the company -- an unlikely outcome, in my opinion -- would probably be the most favorable outcome from a stockholder viewpoint).

MS: 'We Did Nothing Wrong'

[XNormal]

Of course they did nothing wrong. You don't get to be a monopoly by doing anything wrong. You only get to be a monopoly if you do everything right. If Microsoft behaved any differently than it did it should have been sued by its stockholders, and rightly so.

But that is not the point.

Antitrust law is not about "you have been a bad boy, now you will be punished". It's not about right and wrong. It's about what works, and monopolys don't work for consumers. The free market works remarkably well most of the time but when it doesn't antittrust laws kick in.

----

Re:But...

[Darchmare]

Interesting argument. I can see it now:

"This car is nice, but... It looks just like the other one over there."

"Oh, no, ignore that. They copied our design. Besides, our car NEVER crashes, and is much easier to use. Just look at this interior, the seats, the wheel. That one is obviously a knock-off."

"Are you sure? I thought it came out in 1984? I heard your model didn't come out until a few years..."

"HEY! Look at this, this car's radio is really great. It works best with the MS Radio station standard - a vast improvement on the current, old standard. No other player can do the things ours can."

"Really? I didn't know there was such thing as MS Radio"

"There isn't. We're working on that."

"Oh, well... Can I replace it with another radio?"

"Sorry, you can't remove the radio. It's an integral part of the vehicle. We make a similar radio for a couple of other kinds of cars, but in the Super Deluxe car it must stay."

"Oh"

"We'd help you remove it, but really, it will break everything. You see, the structure of the car is built around it. Of course, this was done purely by accident - we didn't at all think it'd be a good idea to design a way for other radios to be used as well. Oh well, it's too late now."

"Yeah, I guess."

"Anyhow, here are your keys. Please enjoy your drive home. While you're at it, here's $40. Could you write a nice little letter to the editor about how much you like our cars? Thanks!"



"By the way, the swelling should go down in a few days. A soft cushion and some Preperation H, and you'll be good as new. I hope it was as good for you as it was for me - we sure do love to innovate!"


- Jeff A. Campbell
- VelociNews (http://www.velocinews.com)

Re:Windows/IE integration

[jilles]

they say somewhere in their document that no products but the simplest product cannot be split into two components. That seems like a valid claim.

I think that they have some good points about why it is not illegal to bundle two products.
I also think many of the criticism MS received for bundling IE and windows is a direct result from the fact that some people for various reasons don't symphatize with MS and dislike most of their products (for varioous reasons).

The fact remains that bundling the two adds value. I.e. the resulted integrated product provides is more valuable than the two seperate products. Since building software like any business consists of adding value it makes perfect sense to integrate two products you have.

The claim that you could also achieve this with a third party product is also not correct. MS like it or not has several non standard features in IE and in the integrated OS there are several things that depend on those features and would be difficult to provide with a third party browser. The only thing you therefore can claim that MS is stimulating the use of their propietary technology. Since there is no law stating that you should comply with W3C standards that is perfectly legal.

From a business point of view it is also a smart thing to do (See latest profit figures for MS).

Those people thinking that MS stood trial for their browser integration are wrong. Sure it was part of the trial but the real issues MS misuse of their monopoly position. The way they forced customers to buy their products rather than those of competitors.

Being anti MS is easy that's probably why it's so popular these days. In my eyes they are a normal company that operate their business like all their big competitors do. In my eyes stuff like AOL and Time warner merging is much more scary than the way MS is doing business. I'm under the impression that the only reason this trial got this far is because other companies lobbied for it to happen. The DOJ is not trying to protect our interests he's just trying to score in a big case. The companies that lobbied for this case are not interested in serving our interests but are just trying to protect their market shares.

Many people blame MS for netscape's way downhill but lets face: it they were out competed by a a better product. Perhaps it wasn't such a healthy company. Especially the first generation of web users are smart enough to download and install software. They downloaded IE more often. The stuff about AOL forcing their users to use IE is bullshit because that only accounts for a few million users (on a much larger population).

Netscape had a technological edge over internet explorer until version 3. After that they've produced crap. The one thing that kept them alive is that they could run their crap on non MS operating systems while MS chose not to do so (talking about monopolies).

Mozilla isn't crap though. If it's as good as people promise it will have a chance, also on the windows platform. It will have to compete with IE on quality. If it can provide a better end user experience (end users don't know what w3c is and don't care about the standards that originate from that institute)it will gain popularity. quickly. If it doesn't it won't gain much popularity.

The latest builds of mozilla look promising and there's definately a coolness factor around the whole thing.

The whole point of this post: compete on quality not in court.

Re:Before /. bashes MS again...

[Zoltar]

Hmmm... I repectfully disagree with you.

**Consider that it was MS dos and then windows that led to the exploding PC market**

I would have to say that the invention of the browser and hypertext and cheap hardware has led to the exploding PC market, dos/windows has just gone along for the ride.

**But they were there, with the minimal functionality and ease of use to make people take a chance and buy a PC**

I believe that most people who buy computers are not informed with regrds to technology or operating systems. They buy computers because they want to take part in this whole internet thing, or maybe they want to make their own greeting cards, etc... The OS on the machine has nothing to do with people "taking a chance to buy a PC"

IMHO most consumers are sheep, you can give MS credit for realizing this and hiring brilliant marketing people.

I respectfully disagree.

[CodeShark]

Okay, I'll bite. You'll have to trust that I am educated enough or at least judge by me response:

Where, in the Constitution, is the government permitted to seize or otherwise modify the property shareholders in Microsoft own? It's not in the Constitution, and we both know it. However, the Sherman Anti-trust act(s) have been found to be in accordance with the U.S. Constitution, ergo the government has a right to intervene, a la Standard Oil or AT&T.

I ask of all you educated Slashdotters, take a step away from the details and ask: "Who is Janet Reno to decide what a private and voluntary association of owners, employees, customers, and other contractually bound participants can do with their time and effort?"

Well, IIRC Janet Reno is the Attorney General of the US of A, and is charged with seeing that violations of federal law are prosecuted. AKA the Sherman Anti-trust acts under which the DOJ sued Microsoft.

This is software after all - the most insubstantial and ephemeral product in existence. Literally nobody is coerced to or prevented from doing anything with software.

You could just as easily argue that "literally nobody is coerced to or prevented from doing anything with electricity." [aside: too bad most of us live in communities where the local electrical company has a de facto monopoly...] My point is, if company A acts in violation of the law and in the process takes down the profitability and therefore of company B, thus limiting my choices to a quality product which would have otherwise been developed, damage has occurred.

I won't italicize and copy the my most vehement area of disagreement... the part about the suppression of legit businesses, etc. Because Microsoft has used every tactic in the book as clubs to beat new-technology competitors.

Some of those tactics have been found by Judge Jackson to be (findings of fact) horribly and completely beyond the scope of fair business practices and way into the domain of monopoly-protecting stuff that is AFAICT against the law.

Lost in the Findings

[werdna]

There seems to be quite a bit of confusion as to the subject of this document. In the United States and other common law countries, a legal result depends, in part, upon certain findings of fact, and in part, upon the application of the law to those findings.

In some cases, the facts are determined by a jury, who returns a written verdict reporting their results, and in other cases, the facts will be decided by a judge. US v. MS is the latter type of case, and thus a so-called "bench trial," was held.

Here, the Court wears two hats, one as the finder of facts, and the other as the finder of law, who will issue judgment based upon those fact-findings. Since the Court is accountable to the appellate bench, these findings are typically memorialized in an Opinion, which separately states (sometimes in numbered paragraphs) findings of fact and findings of law.

The distinction between fact and legal findings is not always clear, and there are such creatures as "mixed questions of fact and law." For these purposes, however, this much of an introduction should suffice.

It will not surprise many readers that the Court frequently invites the parties to offer their respective views on how the trial went, by submitting proposed "Findings of Law and Fact." Since neither party reasonably expects their proposed findings to be adopted entirely, they are often written somewhat as advocacy pieces.

In this case, the Court split the fact-findings and law-findings in two, publishing the Court's fact-findings. The document referred to here is Microsoft's proposal for the findings of law with respect to those facts.

However egregious the conduct in the findings of fact, it is possible that as a matter of law, those facts do not satisfy the elements required to prove an actionable offense. That is what Microsoft is trying to argue here, with a sound, albeit highly technical, legal analysis, that the government, may have proved too much (that Microsoft is really nasty), but that they didn't prove enough (the specific elements and all relevant findings required for antitrust liability).

The document, accordingly, is a rebuttal, not to the findings of fact (which are necessarily and expressly assumed "arguendo" -- for the purpose of the argument), but to the proposed findings of law set forth earlier by the government.

In due course, the Court will complete its "opinion," dropping the other shoe with its findings of law. From this composite Opinion, the Court will then determine what Judgment shall issue, and will render that Judgment by filing it with the Clerk of the Court, triggering the time for Motions and appeals.

Expect there to be substantially more action between those events, however, as I am sure that the Court, if it finds liability, will invite the parties to suggest appropriate sanctions, and so on and so forth.

Hope this is of some help to those who may have been lost in the Findings.