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Will The DOJ Split Microsoft In Three?
cbull writes: "Yahoo! has an article that indicates the judge in the Microsoft case thinks splitting Microsoft into three companies is attractive to him. This is based on a friend-of-the-court brief filed by the
Computer and Communications Industry Association and Software and Information Industry Association."
And mfinke wrote: "Just saw the CNN article here about Judge Jackson's ruling that DOJ's proposal to split the company will still be considered when he rules. " Finally, mizhi pointed out this ZDNet coverage of the proceedings, saying "Basically, the government says that instead of splitting Microsoft into an operating system company and applications company, it should also split it into a third independent company for Internet Explorer."
Here's an article about the subject in the NY Times.
Oh. Wait. That's what we've got already and are trying to get rid of. My bad.
So why hasn't anyone suggested tossing them into Mount Doom? :-)
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The real meaning of the GNU GPL:
The real meaning of the GNU GPL:
"The Source will be with you... Always."
Found a story on that email here.
if they do break MS up into three companies, who is going to get EDLIN?
Richard Stallman has his own views on what should happen to Microsoft
Of course he does. Of course they extend to his vision of what software should be far more than any legal court in the US could ever consider. There is no legitimate way a court could direct a company to only use its patents in defense, for example.
The issue is quite simple. What do we do to M$ to prevent them from using their monopoly in ways that hurt consumers in order to hurt their competition more (and preserve their monopoly). Well, one thing they do is leverage their operating system monopoly to allow applications to become monopolies. Witness Office and IE. So, to prevent that, break them apart, and allow all application developers equal access to Windows, in whatever form that may be. Further, the OS company would not be allowed to develop consumer applications that have their own markets, like Office Suites, Database servers, Mail Servers. And, Internet Explorer, as it is the focus of the trial, would necessarily be split from Windows and belong to the application company.
A second tactic used by M$, demonstrated in this trial, is selective licensing to strengthen its monopoly (IBM paid more for Windows than anyone else because it didn't ship Windows on ALL its machines). In that case M$ is hurting the consumer in order to hurt IBM more. Therefore, no more selective licensing.
That ought to take care of it. It isn't rocket science. They need to stick closely to things demonstrated in the trial for this to be robust against appeal anyway.
Each of those Baby Bills would certainly be able to compete WITH EACH OTHER. However, Corel Office would still not be able to compete with any office suite that was written by the same company that wrote the closed-source OS. This is the real problem, IMHO. If you split the company horizontally, then MS#1-office would still always be the best office suite for MS#1-windows, and so on with the other two (reasons below). You would have 3 companies each doing the same thing that one company is now.
I really don't think that this would solve the problem at all. If MS#3 decided to write their own antivirus software (which sends me into gales of laughter...), then eventually that would become the most widely-used antivirus software on MS#3-windows. Why? Because it would run faster (since they know all those secret APIs), know the OS inside+out from the start, and, most importantly, MS#3 could offer it bundled with MS#3-windows. If someone already has a product which is adequate, why go out and buy (or even download for free) another?
No, I am still firmly of the opinion that MS must be split into OS + Apps companies in order for true competition to begin.
WMBC freeform/independent online radio.
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Is anyone else afraid that splitting MS up would results in three smaller, more nimble, more competitive, and more aggressive companies?
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Isn't that the whole idea?
They'd have to work for their success, instead of having it handed to them on a platter...
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Large corporations move more slowly than smaller ones, and the last thing we need is a faster, deadlier MS
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If they actually make products deserving of success, they'll get it. This isn't about punishing the entire company, but rather making it where innovation (the real kind - not the Microsoft kind) is fostered. As much as I'd like to see MS spanked, forcing them to actually make decent products and letting others swallow them up if they don't is far more fulfilling in the long run...
- Jeff A. Campbell
- VelociNews (http://www.velocinews.com)
- Jeff
So that everyone can get a piece of the PI.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
The alternatives that he mentions would also benefit non-free software. If you look at them (publishing interfaces, preventing MS from using patents offensively, making hardware certifications "open") they aren't really geared toward free software specifically. They are geared toward free development and competition. RMS' desired remedies don't say anything about how MS competitors license their software; the remedies simply allow competitors to exist (freely and independantly). I guess RMS has faith that this would lead to some free software (and he's probably right).
Actually, it is. It's just that there's two parties who want freedom. RMS wants to protect the freedom of users, and in order to get that, the users' agents (developers) must be free to do whatever is necessary. DoJ's motivation is a bit more abstract: to protect freedom in the market, ostensibly to benefit consumers. The two motivations are a bit different, but they're compatable. And if the judge "realizes" that you can't have a free market without developers having certain freedoms, then RMS will get his way.
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As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.
No they won't. That's the whole point of breaking up a company -- breaking up assets and code and giving them to one of the new companies. The Baby Bills will be fighting over which company gets to keep what.
The government would never allow that to happen. They'd get dragged back into court the second the even thought about it.
Seriously though, what exactly will it do? Microsoft's employees, from what I understand of it, talk to each other -- the OS team, the IE team, and the Office team -- so that they can interweave their applications together. What's going to stop them from doing it after the breakup?
Does this
MSK
from using its unique position to leverage its monopolies, not to sate
our vindictiveness. Separating the OS from the applications
accomplishes this goal.
Remember being a monopoly is not the harm that antitrust law sets
out to correct. It is using that monopoly power in restraint of
competition. I'm in favour of the original DOJ submission (split MS
in two). I think the more drastic remedies would hurt current MS
consumers.
"dir" is a basic system tool to browse a filesystem (in this case FAT and/or its derivatives) - Admittedly with Windows' emphasis on GUI rather than CLI, it's deprecated (MS would probably prefer you use Explorer to browse the filesystem), but it's still an essential tool for basic use of the OS under a CLI interface (DOS).
So no problem there...it's a part of the OS - since you've paid for the OS, it's only natural that you get enough tools to effectively use it.
Notepad is a simple, no-frills text editor. It allows basic access to ascii text files, which are the de-facto standard for cross-system text data transfer (although HTML is making some inroads in this area, it's not quite there yet - and there are some other formats like RTF, etc... but none as ubiquitous as plain ascii text)
Again, this is a basic tool. Would you believe it if a user-targeted linux/*bsd distro shipped WITHOUT a text editor (vi, emacs, hell, even pico or nedit!)?
So again, this is a basic tool for effective use of the OS. No problems here - they're making $ off the OS. (Or more likely breaking even on the OS and making the big bucks with licencing fees to manufacturers and development tools to developers)
They originally released IE for free. Two reasons: One - they wanted to dominate the market by forcing Netscape out of business (pay $40 for theirs, or try ours for free!), and Two - they planned all along to add it to the OS once the market was theirs.
Splitting IE off to a company of its own isn't a smart idea - a product that is free doesn't make much money on its own - people aren't going to pay for IE - they're used to getting it for free. So there's no money to be made there.
Selling support is tricky business, and MS's support doesn't exactly have the best of reputations. In addition to this, if your only method of income is selling support, there is a real urge to release a buggy product, simply because it means more people will need support.
Selling documentation isn't going to help MS in the web browser market - the web browser should be (and in most cases is) implicitly easy to use. Click on a link. Press back to go back. etc... An argument could be made that this would give MS a new urge to break compatibility with existing standards to FORCE developers to buy their documentation - but again, without a standards-compliant browser, people aren't going to use it - so there'll be little demand.
In the even that IE is split off into a seperate entity, MS will have effectively shot itself in the foot. Sort of a "They made the browser free, now they've got to deal with the consequences." thing.
I'd expect one of two things to happen - either the IE html rendering engine to be made public (open-source), or the company that is IE to fold under its own weight. The former is probably not possible (this being MS), and the latter most likely in this instance.
Another thought while I'm rambling here - Since the IE html renderer is a DLL that can be used by (really) any app - is there a chance that during such a breakup that the library itself might be allocated to MS, while the application that is IE (which calls on the renderer) would go to the IE company and there die a quick, rather painless death, leaving us in about the same situation as if the OS company were to still have control of IE?
Just MHO - and a little food for thought.
As always, I can be, and sometimes am wrong.
To a large degree, what DOJ and the states are doing here is slamming the barn door shut with authority years after the horse disappeared over the horizon. Trying to fix the existing desktop OS/apps monopoly is a low return deal. Preventing MS from extending its monopoly into the server space is possible, but only if the correct remedy is employed, as MS is now using its desktop monopoly to achieve monopoly on the server side as well.
Don't believe me? Have a look at the number of attractive features in Windows 2000 that don't work unless you also have Windows 2000 servers. This matters! As much as the crowd here likes to bash MS, Win2K is a pretty damn good OS, and the things it offers when deployed on both servers and desktops are things like TCO that companies care about right now. (And, sadly, the things I see the Linux community ignoring...) As a practical matter, deploying W2K on the desktop demands its deployment on the servers as well, or there's no point in migrating. (As one industry pundit has noted, the ugly secret of W2K is that its great so long as you don't mind replacing all of your software and hardware.)
Microsoft is using its desktop monopoly to deadly effect to ensure that it controls the servers too - all the way up to the datacenter, through Active Directory, Intellimirror, Terminal Server, and the bundling of dozens of apps that are "just good enough" to prevent "competitors" from making a living selling them. (Go do the math - there is a very long list of products displaced by Win2K, many of which provide functions not commonly part of any OS distribution today.)
Until and unless Microsoft is prevented from using its desktop monopoly to drive a server monopoly, nothing the government does will have the slightest effect.
Note that splitting Microsoft in *either* of the ways proposed does not eliminate this problem. Since this is driven primarily by the OS monopoly, any split that allows the OS company to operate across desktop and server platforms is ineffective, as are the "baby Bill" scanarios like Ellison's in which Microsoft is split vertically (not horizontally as a poster says elsewhere) into three or so companies containing all of MS's assets. Any effective remedy must prevent MS from using is desktop monopoly to force customers into giving it a server monopoly as well.
This may be the only aspect of a structural remedy that matters, but it looks like it's not going to happen, and Microsoft will laugh all the way to the bank again...
(Note: these comments are mine and may or may not represent my employers' views.)
"The future's good and the present is nothing to sneeze at." - Roblimo's last
No one *wants* their crappy code ... but there's gold in them there file formats!
I don't think it was addressed in this case but MS Office is very close to being a monopoly (if it isn't one already). The biggest barrier to entry for competitors is that MS proprietary file formats dominate both new and legacy documents. After all, no one want's to risk "loosing" all thier old docs to incompatability. And a lot of people end up using office cuz they get sick of getting mailed otherwise unreadable office files. If 3rd parties could have unlimited file format access, then they could compete on a much more even playingfield.
- bridgette
Let's just wait and see, and stop capitalizing on the fact that everyone is curious by posting supposedly blow-by-blow accounts of where the case is headed. At this point, nobody seems to know.
Got Rhinos?
Excerpt from the CIIA brief:
). In the alternative, the Court should order that the applications company make the Internet Explorer product -- which provides no royalties now -- an "open source" product so that other software developers could use the source code. Either of these small additions would ensure that the monopoly over productivity applications that Microsoft holds does not supplant the operating system as the point of leverage for a monopoly over the software used in Internet computing.
Microsoft will do.
Yep, I've been waiting a long time for this one! tcd004
Perhaps they can team up with MasterCard: Price of Internet Explorer: $0 Look on your face when Internet Explorer GPF's: priceless
What do you think? Would an open sourced Microsoft lead to real competition in the Microsoft market (which must exist if it is truly a monopoly)?
-- @rjamestaylor on Ello
I still think that Larry Ellison had the best idea, which was to split Microsoft horizontally, in effect creating 3 mini-microsofts, each selling windows, office, developers tools, etc... That way there'd be real competition in the Windows arena, and with multiple suppliers, no one could strong arm the customers around because they could just take their business elsewhere. It'd also require a minimal amount of oversight, as opposed to now where it seems that once Microsoft is split up, all the decisions made by the individual companies are likely to face governmental scrutiny ("hmmm... should this program be allowed to be distributed with the operating system?").
Not only that, but it seems (in my eyes) that the DOJ is making unreasonable demands on the conduct of Microsoft once it is broken up... Just for starters, requiring them to notify all affected developers if they intend to change the OS in such a way that their programs will break... It just seems unworkable, because there are slews of compilers and programing languages, each with their own nuances, so that Microsoft will have to test too many 3rd party apps to be assured of compatiability. I know what the DOJ is trying to accomplish with that demand, but again, I think it would be better solved with a horizontal split, because then the companies would be forced to compete and gain customers and therefore wouldn't make any wholesale changes to the OS just to break a competitors product, because all the users of that product could switch to Microsoft #2's Windows operating system.
His comments to David Boies were _so_ hip they were like another level of the findings of fact- startled me even though I already expected him to be clued.
Boies: "We want to break them in two, that might be the easier path since they'll fight having IE broken off"
Jackson: "Are you kidding? Forget their response just for a second and think about what will provide maximum relief in a structural way (without lots of little regulations and overseeing). Nothing about this is going to be simple- hell, you could try to fine them 2$ and they'd take it to the Supreme Court. Quit pandering to what you think their lawyers would like and go for a real solution. There _is_ no softer path that they will consent to honorably cooperate with. Haven't you been listening all this time?"
*g*
I _love_ hearing this stuff. This judge is a smart cookie and understands Microsoft all too well. It's absolutely great to see how clearly he understands the situation in spite of the massive confusion, FUD and propaganda everywhere (even on Slashdot o_O )
Short form: Microsoft is guilty, they are unrepentant, they are pissed off and actively trying to do as much damage as possible, and they have the economy _hostage_. In no sense is that a worthy justifiable position deserving of being protected- so Jackson is not going to try and coddle them. But at the same time there has rarely been such a totally amoral, remorseless, psychotic and sociopathic corporate criminal- so Jackson is not going to try to negotiate with them in good faith.
GOOD. Negotiating in good faith doesn't work with Microsoft. Three cheers for Jackson and hopefully the heavy hints he dropped will be enough.
The third company should have more then just internet explorer. How is that one going to survive with just IE? After all shipping IE for free is what started this, if they up the price and netscape is still free, who's going to get all the market share? With just IE in this company then this one will fail faster then a Art's major taking a quantum physic exam.
/NEED/ a product they can sell, and they can't sell IE.
The third company should have IE, and all the Internet products. Like IS, Exchange, and anything else they have dealing with the internet. The other two companies should probably stay the same, one OS, and the other Applications and the rest. For the third company to survive they
I can actually see a forth company coming out of this, one dealing with hardware. They keyboards and mice are actually quite good. That way you'll have four baby bills: OS, Internet software, General Software, and Hardware. Each of them have products that they can use to make money on.
Just my 2 cents.
Software Engineer & Writer of Military Science Fiction and Fantasy Blog: petermwright.com Twitter: WrightPeterM
The problem is not that MS did a single evil action, or that it sells more than one product.
The legal with monopolies is that they are able to take advantage of their position to unfairly compete against others. (IE in such a way that the other companies have no chance of getting into that market.)
Therefore, there's nothing wrong with Apple selling a single computer system, and not licensing the OS or the hardware. But if they were to have nearly the entire market, and play with compatibility to prevent others from competing, then that would be a different story.
The government is simply saying that MS is in a position to keep others out of the market, and is doing unfair things to keep it that way.
Solution to blink tags: wrap them in another blink tag, with a javascript delay loop, so they cancel each other out
The key point to realize is that the interim conduct restrictions DOJ proposes (which, note, Judge Jackson did not ask DOJ to remove) kick in while appeals are pending. The rationale here is that Microsoft is engaging in ongoing illegal conduct, and it's appropriate to stop that while appeals are pending. If Microsoft wins on appeal, maybe they get to resume their monopolistic practices at some future date. Meanwhile, Microsoft is going to have to start disclosing those hidden interfaces. Probably by fall, the way things are going.
This is great for the Open Source community. Among other things, the WINE people will finally get the info needed to make it work right. One of the big Linux players may pick up on WINE and do the grunt work to make it run Microsoft Office. At that point, Linux on the desktop looks a lot more attractive.
As for the breakup, the financial community seems to agree on what the applications part is worth, but estimates of the value of the OS part are all over the place. This reflects reality - Microsoft Office is a good, useful product that sells on its own merits, and Microsoft's operating systems require coercive, monopolistic sales practices to sell them.
FYI about Microsoft hardware from personal experience in the industry: MS established themselves in the PC hardware business by again leveraging their OS and apps monopolies, and not on the merits of their product.
Put yourself in the place of a PC manufacturer for a moment: Guess what happens to the cost of your OS and apps licenses if you decide you *don't* want to ship MS keyboards and mice? The simple fact is that if you want "most favored nation" pricing from MS, you *will* ship a significant portion of your orders with MS hardware. You'll also build your hardware to conform to Microsoft's hardware specifications and do whatever else they tell you to to, simply because you can't afford not to. It's precisely this sort of abuse of monopoly power that's illegal, and for good reason.
Back in your role again: You don't have to sell MS hardware of course, but remember that the OEM PC business has become one of thin margins and volume, so if you pay another $30/unit for your OS and apps license simply because you'd like to specify your own keyboard, you are now at a significant disadvantage to your competitors in a world of $150-$300 margins for desktop PCs.
It would be interesting indeed to see how many OEMs would continue to buy Microsoft's hardware if they didn't have to.
Don't ever forget that the computer makers don't even get to decide what the hardware standards are for your next PC: that's Microsoft's turf (PC9x, et al), and again, if you don't play, you pay - big. This control will bite Linux and other alternative OSes big-time in the near future, as it already is to some degree with the new "legacy-free" PCs required by the newest versions of the specs.
(Opinions here are mine.)
"The future's good and the present is nothing to sneeze at." - Roblimo's last
You know, listening to all of these breakup plans until this very moment, I hadn't been swayed. The idea of the government interfering in the computer industry, particularly in the workings of a single company, repulsed me. The idea of tearing apart the wealth people had built up from a little piss-ant company that started back in the seventies appalled me (and don't give me the "stock boost" stuff - at least some of the proposals specifically ban Gates and others from owning stock in both or more companies, so all concerned WILL lose money). The idea of a bunch of someone's competitors using the DOJ to attack one's company when they couldn't out-compete disgusted me.
But now I've seen the light!
It's silly, at best, for a company to produce more than one product, and at worst, it's an attempt at evil corporate dominance! Some companies use their multiple product lines to reinforce the profits of all their products. This is clearly a manipulation of consumers.
Let's look at our own beloved computer industry.
Further, these companies also make a crucial, horrible mockery of the open software market - they don't release the source code of their products so that any chump with GCC and a CD-R can compile and sell "his" or "her" own competing versions of those programs. That's just wrong.
I think I see a glorious future for our industry, and maybe many others. There are a lot of companies that just need to be broken up into smaller, more intelligent businesses. The people running the companies and the shareholders can't be trusted to judge this for themselves. Who is better-prepared than the lawyers of the DOJ to perform this sort of micro-management of the market? Certainly, this will cause a temporary period of adjustment, and the legal profession's ranks will swell, but in just a few decades the computer industry would be unstrung enough from the courts to come back to life and start work on the long-awaited next versions of all those products...
And then, all those out-of-work lawyers can start taking a look at the "GNU/Linux" racket. I mean, come on! They give all these things away, then start leaning on any companies that makes use of the software to release versions of the companies' products that are compatible through astroturfing by users who barely use any of the software to begin with...
Yeah, my karma was getting too high, anyway. ;)
Suppose your opinion to be the prevailing one. What should be done to a company that has done something which is illegal but should not be? Enforce the law because it is the law, or ignore the law because it is a bad law?
I would prefer that all laws be enforced, primarily for two reasons. First and ironically, generally unenforced laws give too much power to the government. If people/companies begin engaging in tecnically illegal activities that have become tacitly accepted, they give the government leverage over them because they could be prosecuted at any time. Second, I believe that the best way to eliminate bad laws is to make their consequences felt. Mitigating their effects just lets them live longer.
Has Microsoft bought them out too?
Got Rhinos?
As a software developer who has studied intellectual property law, I would like to present an alternative remedy for the Microsoft anti-trust case. I strongly feel that the root cause of our difficulty is an imbalanced copyright law, which is being used by Microsoft and many other software companies in a manner which undermines its constitutional justification and causes adverse economic effects. While remedies on the table will correct symptoms, the following proposal may additionally restore balance and could be applied industry wide.
In an emerging market, where prior investment is negligible, consumers desire highly differentiated software offerings; our legal environment supports this need exquisitely. However, in established markets, where consumers have invested in and have become dependent upon a particular software, these same consumers no longer desire competition for new and different software offerings. Instead, if given a choice, they would prefer competition for the change in the software they currently use. Unfortunately, our current legal practices, focused on emerging markets and justified with natural-right copyright thinking, deny the marketplace this alternative style of competition.
I do think that a contractual remedy for Microsoft, designed to establish such a competitive market for software upgrades, could prove more effective than a breakup. This proposal necessitates the creation of a non-profit registry-of-deeds tasked with maintaining records of software produced by revisions from competing authors. Specifically, the registry would administer access to source code and would calculate royalties from the licensing of administered software. The proposal rests on the following principles:
1. Before offering software to the marketplace, a developer would deposit into the registry all source code, description of patents, and design materials necessary to understand and build the program offered.
2. As part of each deposit, the developer would also specify a per-end-user licensing fee for programs derived from the material deposited.
3. Anyone can then retrieve these deposits and build from the material contained provided that any derived or competing work which the reader is thereafter involved is registered according to this same method.
4. When a derivative program is licensed, the sale price is calculated with the licensing fees for the materials upon which the program is derived. A technique involving anonymous serial numbers can be employed so that a given deposit is only licensed and charged once per user.
5. The developer may at any time reduce the posted price for their deposits; but may not license use of the material separately for amounts less than the posted price.
6. When fees are collected, royalties are distributed to each developer according to the number of licenses issued for each of their deposits.
7. The license for each deposit does not extend to trademarks, intellectual property of other parties, or material that was deposited separately. Deposits which would overlap in material must be decomposed into smaller units; the original treated as a derived work.
While the above may seem complicated, it will administer software that is a composite of revisions from competing authors. I am positive that most of this process can be automated so that developers, customers, and distributors are shielded from the administrative burden.
I believe that this mechanism could bring about more professionalism within the industry. It would eliminate bait-and-upgrade schemes. It would also improve software reliability. Lacking serious competition for upgrades, established software vendors have little incentive to work on quality control issues. Furthermore, with source code and design documents publicly available, retired programmers could be independently contracted for the evaluation of commercial applications. I can even imagine professional review organizations emerging, helping the consumer sort through the hype to identify those products with good, solid engineering.
I feel that the consumer benefits to this proposal are more clear than those benefits resulting from a breakup. Further, this proposal is not necessarily a penalty for Microsoft, but a more industry focused solution which other software organizations could voluntarily adopt. This proposal also does exactly what is needed for Microsoft, it forces a decreasing price non-discriminatory license. And the proposal opens up the operating system market for competition, albeit a different style of competition. With a bootstrap, such as the Microsoft Windows Operating System, this type of competition could gain much credibility as consumers realize the benefits and demand registration for other commercial software.
In short, this proposal provides the community of users with some say in the destiny of the software they have invested in and have become dependent upon.
Richard Stallman has his own views on what should happen to Microsoft, which seem a lot more reasonable than simply splitting up the company.
What needs to be done is to get beyond the "We must *hurt* Microsoft" mentality into the "How will doing this to Microsoft effect the industry in the long-term?" mentality. Splitting the company up just seems like an appealing way of hurting them. It doesn't seem like it is doing anything constructive.
Splitting seems like changing one successful company with popular products into three.
I don't see any problem with Microsoft giving away its browser. You get netscape and lynx with Red Hat, and konquerer with KDE, and nobody is complaining. It isn't the giving away for free that's the issue, its unnecessarily tying the software into the system in a way that makes it non-trivial to replace, and bullying its OEMs into installing their browser exclusively. I use Notetab for editing text on the PC; I'd hate to see notepad tied deeply into the guts of the operating system. It just doesn't make technical sense and doesn't benefit the user.
IE's tight integration with windows is because the browser is the linchpin in Microsoft's strategy to leverage Desktop dominance into dominance in the server market, on to content creation and ultimately to content itself. It is critically important to thwart the use of monopoly power to implement this strategy. If MS sucessfully ties even two of these areas together it would severely restrict customer choice.
If I were to go to more than two companies, I would split off these areas:
In other words, force each of these strategic areas to cooperate via public standards.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
The ENTIRE reason this anti-trust case came to being is because Microsoft didn't obey the new rules that were set out in the consent decree that they agreed to in 1995. They had their chance and they've shown they're not going to obey any restrictions placed on their behavior.
Breaking Microsoft up, in anyway, will lessen their dominace of the industry... Split horiztonally, they'ed have to compete against one another. Splet vertically, the windows group will no longer be able to trust the fact that Office is basically developed solely for them...
If the office group decided to start developing for Linux, BeOS, Solaris, or any other OS, today (yes, they do develop for the mac, but the mac isn't a commodity x86 platform, so many corporations shy away from it), Windows sales would stand to take a beating because then people and offices could run their operations using cheaper OSes... Therefore alternative versions of Office never surface. If the Office group was separated and didn't have to keep the OS group happy and prop up their income, Office might still remain the only game in town for Office Suites, but the OS landscape would change dramatically. And with more and more online applications arriving, the application landscape stands to shift on it's own.
1. OS (DOS, Windows operating environment, NT)
2. Applications (Office, Games, Wordpad, Solitaire and other apps that are now included in the Windows operating environment)
3. Media (MSNBC, MSN (including Hotmail), MicrosoftPress)
The idea of splitting the company into two pieces always seemed a bit dumb to me.  Under that scheme, the media (specifically MSN) could operate at a loss under the profits from Office and other software.  This way MSN and other media outlets need to compete fairly in the marketplace and not ride of the coattails of other established monopilies (eg. the Office suite.)
Not wishing to throw water on this idea - but given that this isn't socialist Europe - Bill is not going to lose ownership of shares in all three companies is he - nor are all the other stockeholders. So how does this work ? Microsoft won't be nationalised...
I like the comment about Microsoft losing the thing that gives them the monopoloy power - IP protection... (copyright, trademarks, patents, trade secrets).
Winton
Please read the DOJ proposal. The proposal contains more than a recommendation to split. It is actually a very thorough point-to-point remedy solution that compliments the Findings of Fact. Please please please read it before posting more ignorant comments. After reading it, read MakeYouSoft's reply and compare the two. DOJ and Judge Jackson have impressed me with their thoroughness and their logic.
On another note, the version of the story I read stated the third company would not be IE, but microsoft's Internet holdings including MSN. MSN is actively competing with AOL. Office and the other microsoft software products have their competitors. Then the OS division has its competitors. Makes perfect sense to me. Cheers to Judge Jackson!
http://www.siia.net/shar edcontent/press/2000/amicusbr2.pdf
It suggests how Microsoft #3 (IE, Inc.) might turn a profit (hosting a web portal on the new default home page, ala www.netscape.com; selling engineering services, to customers including Microsoft #1 and Microsoft #2; pp. 59-60), and even mentions the Microsoft vs. Slashdot battle over the Kerebos extension specs (p. 53).
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Many people here are assuming that the appeals process will last years and years. But the appeals don't have to last long at all, perhaps not more than another year -- it might even be all over by Christmas. Certainly, the government should do everything in its power to make that happen.
Remember that in a Sherman case, the government can ask to bypass the Court of Appeals and go straight to the Supreme Court. The idea is that breaking up a monopoly requires fast action without all of the delays of appeals, because the economy changes so quickly. Neither Microsoft nor the Court of Appeals can prevent the government from asking for this -- if the DOJ wants it, then it's up to the Supremes to decide whether to accept the task. They could say no and send the case back to the Court of Appeals, but in that case the government loses nothing for having asked.
Now IANAL, but here's how I figure it. The DOJ has a good case for asking for the fast track to the Supremes, because the software industry does indeed move very quickly, and the Feds can whip out dozens, maybe hundreds of M$ quotations in the court record saying exactly that. They've been emphasizing the fast-changing industry as a part of their defense, and now the DOJ can use their own words to get the fast track. So if they do ask, I'd be very surprised if the Supremes refuse.
The Court of Appeals has already indicated in earlier rulings that it may be more sympathetic to M$ than Judge Jackson, having overruled him on some key issues. Certainly M$ wants to head there; but the DOJ doesn't have to go there at all if it doesn't want to.
The current Supreme Court is relatively conservative and hence maybe sympathetic to big business, so the Feds may worry that they won't prevail there. But on the other hand, if the case is destined to end up in the Supreme Court some day anyway, then they might as well face that music now rather than later. Perhaps some justices will die or something if the case doesn't get there for a few years, but who knows if the replacements will be any more or less on M$'s side than the current justices are? No point in betting on that now; might as well just take your chances.
And after all, the current Court, despite its conservatism, does not appear especially beholden to industry in anti-trust cases. This Court is most passionate about matters of federalism and respecting the decisions of lower courts. They certainly won't overrule any of Judge Jackson's findings of fact, and these are particularly harsh for M$ (which is precisely why the Judge made his findings of fact so emphatic). Moreover, they are not likely IMO to overrule any of his findings of law unless there is a major, controversial and unclarified matter of the constitution or judicial procedure at stake. I don't know of any such issue in this case. For these reasons, I believe that the DOJ can win in the present Supreme Court.
M$ wants to delay and postpone as much as they can, since they'd rather have the Court of Appeals, who may be on their side, and they want to fight off a breakup for as long as they possibly can. But most of all, they want to wait out this November's elections. If George W. is elected, then they might get a sympathetic Attorney General who will stop the suit, or at least scale it back, for example by accepting M$'s proposed remedies rather than a breakup.
All the more reason for the DOJ to push ahead to the Supreme Court right away, before the election. The Court takes a break in the summer and begins its term in October. The DOJ should see to it that they have the M$ case on their docket when the term begins. If they do that and the Supremes accept the case, then the case cannot be stopped no matter who wins the presidential election. George W. Bush himself may end up with the job of presiding over M$'s breakup on orders from the Supreme Court, whether he likes it or not.
In fact, I can imagine that one of the reasons for Judge Jackson to press ahead with his decision so quickly is so that the DOJ has the time to do all of this. I can't imagine why the DOJ wouldn't try it. No wonder the M$ lawyers are pissed off.
So rather than years, we may very well have the final appeal before the Supreme Court in about three months; and after that, the Supremes can reach their decision any time they want to. They could rule in favor of the government within weeks, if they so desire. The Micro$oft monopoly may not survive to see the year 2001.
Always keep a sapphire in your mind
The correct breakup is:
1. OS
2. Apps (Office, games, etc)
3. Internet (MSN, IE, etc)
4. Tools (Visual Studio, MSDN, etc)
All 4 of these pillars support the others in maintaining the monopoly. Breaking up along these lines would place MS in direct, level competition with other established companies:
1. OS (Linux, BE, Unix, etc)
2. Apps (lots of examples)
3. Net (AOL, Netscape, Opera)
4. Tools (Symantec, Borland)
Is (2) true because of (1)? Is (2) true in spite of (1)?
These regulations didn't just spring magically into being. They are the result of our experiences trying to keep the market working. When it goes out of whack somehow, we usually try to figure out what went wrong and then make some regulation that will keep it from happening again. Kind of like fixing bugs in code.
If regulations are good, are more regulations better? Are regulations good up to a point, then bad beyond it?
There is no ideal amount of regulation. It is created as we deem necessary. When something happens to screw things up, we try to fix it. Granted, some regulations are created for political reasons, and are probably bad, but most, and I include anti-trust laws in this, are generally good and helpful in keeping the market free and open and running properly.
Did the congressmen receiving campaign contributions from microsoft's competitors happen to stumble on the perfect level of regulation?
First of all, Microsoft can easily outspend any of its competitors when it comes to political contributions. So, if you have actual numbers, it would be very helpful. It might be interesting to see who spent how much in contributions. I think it would say more about the quality of our congresscritters and our election system than that of the contributors though.
Second, whether the current trial occured because of Microsoft's competitors' complaints or not is irrelevant if they actually broke the law, and it seems abundantly clear that they did. As I've said before, selective enforcement is a bad thing, but that doesn't mean we should just let any offenders go, it means we should work to make sure that all offenders are prosecuted. If you think other companies are guilty of anti-trust offenses, then please, point them out and explain it to us.
Do you have any support beyond "obviously"?
Don't think I even used that word, although it does seem obvious to me that regulation is needed if we are to maintain an open, free market. Simply because the natural instincts of a corporation are to try to get rid of anything that hurts profits, which competition can certainly do.
Assuming that consumers would, in fact, benefit from a break up of microsoft, would this breakup still be desirable once the effect on aspiring entrepreneurs' incentives in the future is considered?
Even ignoring the fact that nobody made Microsoft break the law, and that they had abundant warning that this was coming, I still find that statement to be utterly ridiculous. Does someone need to think that they'll be able to make billions upon billions of dollars before they start a business of their own? Most people are happy to make a good living. The fact that some corporations get huge is a nice dream for some people, but it's not what makes most people start a business. Entrepreneur's everywhere will still come up with new ideas and still create new companies and new markets. A break-up of Microsoft won't change that one bit, just as previous break-ups didn't cause entrepreneurs to throw up their hands and go apply at McDonald's.
It's not enough to bash in heads, you've got to bash in minds. - Captain Hammer