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Justice Department Decides To Break Up Microsoft
Well, it's official. The United States Department of Justice has called for the breakup of Microsoft into two separate companies: an applications company which will manage software like Microsoft Office and Internet Explorer, and an operating systems company that will manage products such as Windows NT. CNN coverage here.
This will be a big boost for the WINE effort, as I mentioned previously. More than that, we'll probably see every x86 OS that has a POSIX-compliant API module offer a Win32-compliant API module. In time, they'll all run Office just fine. Some of them will probably work better than Microsoft's OS offerings, too.
Microsoft can't arbitrarily change the APIs to break compatible software, either; the decision prohibits that. And of course none of this waits on appeal; only the breakup is delayed.
In the end, this might be good even for Microsoft. They've dumped much junk in their OS to maintain their monopoly. That strategy now stops working. So they may let the engineers determine what goes in the OS again, as they did when Dave Cutler designed NT, instead of the marketing people, as they did with Win98/98/NT4/NT2000. We'll see.
Microsoft will probably drag their feet on API disclosure. But it won't work. The only question is whether they give in before, or after, the judge sends some Microsoft executives to jail for contempt. That's a very real possibility. Federal judges have more than enough power to enforce their orders.
Microsoft probably won't win on appeal, either. Unlike Judge Sporkin, who made some mistakes in the first Microsoft antitrust case back in 1994 (yes, this is try #2), Judge Jackson has done a good job. Nobody has pointed out any serious errors on his part. The trial has been watched by so many people that any major reversable errors would have been widely publicized.
Read the actual final judgement; it's better than most of the commentary on it.
Isn't the point of democracy to first elect responsible leaders and then have them lead? Possibly, though, the democratic process doesn't quite work wherever you live?
The idea that government should not be allowed to interfere with business in any way is absolutely absurd. Business has only its own interests at heart. The government theoretically has the interests of the population at heart. If this is not true, there is somthing wrong with the process by which people come to power and this needs to be fixed, rather than bowing down before the almighty corporations.
Logi - I can do anything, but not everything.
-Jon
this is my sig.
I've been an opponent of the two way breakup since day one, and not because I don't like Microsoft. I really do hope this gets moderated up so that people will perhaps see this.
;)
Quite frankly, two companies is doing nothing. The 'applications group' definition is so blatantly ambiguous and vague that it's trivial for the applications group to say 'okay, we claim WebTV, all our cable company holdings, MSN, etcetera' and embed these kind of things within their applications, continuing to illegally support the applications side of the monopoly.
The OS group will likely compensate by raising prices - there is absolutely no clause whatsoever in the ruling against unfair pricing for consumers and OEMs. Microsoft is not forced to justify costs in any way, shape, or form.
The ruling also has a very severe loophole, which the OS group will be very quick to abuse. They know that in 10 years, if they don't win in appeals, they can get back together again. And they will. Now, what's this loophole? If you read over the ruling, Microsoft is not allowed to cause any "Middleware" to run at decreased performance levels or have difficulties with the OS, *EXCEPT* in the instance where they provide in writing a reason for this, and possible workarounds.
There are NO requirements for what the reasoning must be whatsoever, or restrictions on workarounds. So, in other words, they will DELIBERATELY collaborate WITHOUT collaborating. Microsoft will claim that Office was DESIGNED for Windows and the competitors did NOT so they are trying to 'catch up' or some such nonsense. Or they may just say 'because we feel like it' and list 'only write for OUR OS' as a workaround. There are nowhere NEAR enough preclusions and restrictions against abusing existing market share.
This ruling has more potential to cause HARM to consumers than anything else. It is VERY easy for the applications group to claim WebTV and abuse market share and marketing. There are so many ways for Microsoft's two groups to abuse this ruling *within the ruling's context* and get away with it.
I have ALWAYS advocated a three-way split. Operating Systems, Applications, and Other and Internet Holdings. In case you didn't know, Microsoft owns *MANY* Internet properties, which are tailored EXCLUSIVELY to Internet Explorer. With the applications group in control of these properties and Internet Explorer, they can continue to do this. They also own a cable company that operates near/in DC as well as WebTV. Allowing the applications group to maintain/retain control of these properties and refusing to force them to divest themselves of these properties and/or splitting these properties into a seperate group will give the applications group a painful advantage.
Assuming that the OS group does poorly, once the 10 years are up, the Applications group could merge with them again, or they could just build their own OS based on the OS group's code. There are no restrictions that will prevent Microsoft from regaining a monopoly within a month after the 10 year period has expired, much less a year. Once the 10 years are up, Microsoft will be back to their old ways.
Do you really think this is teaching Microsoft a lesson? They've probably been hiring managers and high level people like mad for weeks leading up to this. All they have done in court is posture and lie. They have known for weeks they would lose and are counting on appeal. They're ready for a split if it comes down to it, and if not, they can simply fire the extras. They won't move, either. To move would cost them all credibility.
Reguarding their stock, as a couple people have asked me, I am not an analyst, but I don't forsee their stock actually plummeting till they lose on appeal. Microsoft's cockiness, attitude, and general "we will get our way because we're the biggest thing America has going for it" (think about the tax revenue) seems to be contagious. Especially to investors. Combined with the sheer amount of shares within the company, this would tend to indicate low volume, maybe a sharp drop, but not a true freefall. Perhaps another point or two. However, Ballmer has damaged confidence and trust *SEVERELY* by filing to sell several million shares *BEFORE* the ruling was issued, as if knowing that the stock was going to plummet. This was released by the SEC today - they seem to be going out of their way, AND the DOJ (note how the ruling wasn't issued till AFTER close of the market?) to prevent a collapse in consumer confidence. Were consumer confidence in Microsoft to collapse, very VERY bad things could happen to the market, and with Microsoft's market cap and valuation, could trigger severe repercussions, in my opinion.
I don't forsee this being out of the courts for at least two years - Jackson had the option to expedite the case to the Supreme Court on appeal (IANAL, that's just how I understood it) and chose not to, indicating another force towards not destroying consumer confidence. Maybe they're counting on everyone forgetting while Microsoft waits on their appeals to be heard. I'm not sure - I don't work for the gov't, and IANAL.
Disclaimer: These are my views, not yours, not my employer's, etcetera, ad infinitum. Reproduction of this comment in whole or part is expressly prohibited without written or emailed consent. Emailed consent may be obtained by sending email to prj@nls.net. Absolutely no commercial reproduction is permitted without written consent, so much as is allowed by Slashdot and VA Linux, formerly Andover.Net's "comments are owned by the poster" policy. No, I'm not anal - I'm just sick of my quotes being stolen.
=RISCy Business
your company here.
shelby != ford
Let's take a closer look and do some analysis:
1) Split up into two companies is based on what the two portions of the company were doing as of Apr 27, 2000. No saying "Hey, Office is part of the OS"
Interpreted literally, this would mean a "Microsoft employees counting the days until they vest their stock and retire" company, and a "Microsoft employees biding their time to pad their resume" company. Those are the two biggest functional splits at MS.
2) The 2 NewCo. may not recombine, enter into Joint Ventures, provide APIs to each other that are not available to other ISVs.. or basically collude.
Big deal, the developers on the never-gonna-ship netdocs project don't even share API's with their PM.
3) The OS company cannot know OEMs for supporting other OS's, OEM's can change the boot up sequence.
Cannot know? Do you mean know in the biblical sense? That would explain why Michael Dell is so submissive and obedient.
4) Microsoft shall disclose to ISVs, IHVs, and OEMs in a Timely Manner, in whatever media Microsoft disseminates such information to its own personnel, all APIs
In a timely manner is the sticking point. Microsoft's arguement is that they've never delivered anything in a timely manner before, and this would constitute undue hardship.
--Shoeboy
I don't work for microsoft anymore.
(former microserf)
Are you kidding? Get paid to be a constant pain in the ass to corporate executives! Where's my resume....
So if the company is broken up, which one served Slashdot with a cease and desist?
--
Grant Chair, Linux Int.
Pres, SVLUG
Co-Editor, Open Sources
Open Source Program Manager, Google, Inc.
Internet Explorer was a done deal, I suppose. No point in even discussing it.
Java virtual machines? Every major OS has now successfully integrated Java, but now Windows can't? Does that mean I have to run my Java apps within IE, or application providers have to include a VM with their package?
Server software? I'm ambivalent about this. From an engineering standpoint, most server software probably can't be considered part of the OS. But for practical purposes, I think it makes sense to allow that. Especially since putting the server software in the same company as the client software defeats much of the purpose of the ruling.
Developer tools? I'm also ambivalent about this, for the opposite reason: I think compilers should be considered part of the OS, but I can see the danger in that arrangement.
Indexing server software? Does that mean ActiveDirectory, or whatever it's called? I don't know much about server systems, but isn't that basically NT's security system? It would be very dangerous to have security separated from the OS.
Voice recognition software? Oh well, I guess it'll be another few decades before we can talk to our computers. (SR won't become universal if it's not supported by the OS.)
"Client Applications"? No more command-line ftp? How about ping? More seriously, what about Windows file sharing? A server OS isn't worth much if it's not allowed to serve files.
Well, that's enough for now. As I've said before, I think splitting up Microsoft is a good thing in and of itself. (I'm not sure that the government should have that power, though.) But they need to do some more work on the line between the two companies.
MSK
Microsoft has consistenly leveraged its size and its popularity in both its OS and its various document management tools("document" including MPEG-4 video streams, mind you.)
Lets say a breakup is completed. Exactly what prevents this leverage from being executed?
So Microsoft Office gets ported to new platforms...this is new? Microsoft has been willing to port its code to popular alternatives to their Windows OS for quite some time--they're even starting to do a semi-decent job of it on the Mac. After all, why let any other Office vendor take over a market?
Splitting Microsoft will probably have the effect of making somewhat riskier steps(i.e. Media Player for an Operating System that MS/OS is seeking to prevent from gaining market acceptance) more feasable. But overall, I can't imagine either corporate culture changing significantly merely because of a simple division.
The split does not solve problems. At best, the split helps enforce whatever primary remedies Jackson can put into place--and considering the culture of MS is at least partially, "We know what's right, and we're smart enough to get around any loosely worded agreement that prevents us from doing that right", compliance is going to be damn near impossible without some truly intrusive measures.
Splitting the company isn't intrusive. It's just a bureaucratic structure.
My first thought would have to be, no matter how the split occurs, an outside board needs to be able to demand with force of law that any programmatically interesting function that's been left undocumented be remedied. The NT authentication functions, required for remote management, come to mind. This is a good example of Microsoft's technical acumen obscured by their business distrust.
It's funny, some Linux people say Microsoft can't code, can't innovate, can't do anything right. And Microsoft agrees. It must be so depressing to work in an office where your code is presumed to be so bad by your own coworkers that they'd go so far as to revoke Compaq's write to sell Windows just because they couldn't imagine that the product was good enough to eventually dominate a market on its own merits.
We shouldn't be directing our regulatory furor against the coders--honestly, they've done some damn good work over there at Microsoft, and about all they've got for it was ten instances of "innovation" per paragraph, followed by chants of "by any means necessary". Microsoft's business side needs to be muzzled--and the bottom line is, splitting one ravenous horde into two still leaves you with two ravenous hordes.
Yours Truly,
Dan Kaminsky
DoxPara Research
http://www.doxpara.com
The ultimate irony would be for someone to write a new outlook virus that distributes a copy of the court order to each computer before propagating itself. Any script kiddies working on it yet?
"If one is really a superior person, the fact is likely to leak out without too much assistance" -- John Andrew Holmes
e.g. directX - this is an obscure interface to ensure that games HAVE to be written for Windows. That's why they give it away for free- its not out of the goodness of their heart- its because it locks games into Windows. hint: what OS do most of your friends have on their PCs? Bet it isn't Linux... "I only use Windows to play games."
'Regardless, the Court of Appeals has historically been more favorable toward Microsoft than Judge Jackson, so I have no doubts Microsoft will WIN their appeal'
Lets just say that if they do it will be the biggest legal upset since OJ Simpson. The case is overwhelming. It would taking a simply amazing screw up on behalf of Judge Jackson for them to get away with it.
"You think Microsoft-Apps will port Office to Linux? Why would they?"
If they think they can make money that way then of course they will- that arm of the company couldn't before because the company overall would have lost money.
There are companies out there installing Linux right now. If the market gets big enough- they will have to. It's the only way they can ensure their continued monopoly for one thing...
-WolfWithoutAClause
"Gravity is only a theory, not a fact!"This has the potential to really change things. The one really brilliant piece of the ruling that I have not seen publicized enough is that one company will get Windows, and the other will get all the development tools.
This means that Windows, Inc will finally have to fully document their APIs. The tools to code for Windows will be in the hands of someone else. This means that anyone wanting to port gcc, yacc, or whatever will have the same level of access to the internals that the applications company will have.
It doesn't go as far as forcing them to open up the Office file formats, but this will make tricks like the Kerberos nonsense much harder to pull off.
It will be years and years before this gets enforced.
Not a chance. The breakup is scheduled for 1 year from today. It will happen on time. I predict that this will be appealed directly to the Supreme Court which will rubber stamp the decision this fall. The finding of fact is hugely damaging. The SCotUS will review the finding, but not challange it. The finding of law is equally strong. It will stand on appeal. This case was prepared to be appealed. It will stand because it is all true.
Anomalous: inconsistent with or deviating from what is usual, normal, or expected
Anomalous: deviating from what is usual, normal, or expected
Canard: a false or unfounded repor
M$ isn't getting split simply because they are big. They are getting split because they used their position as a monoploy in illegal ways. They could have remained a big powerful monopoly forever if they simply refrained from illegal tactics. They had plenty of chances to become compliant with the law, yet thumbed their noses at all of them. The basic princples of anti-trust law aren't all that complex. Their team of pedigreed lawyers are perfectly capable of compehending whether a given action is probably in violation. I imagine that the orders from the top were to either 1) ignore the sherman act since it can't possibly apply to a software company (what-ever!) and/or 2) figure out how to get away with as much as possible while still being able to have some sort of technicality based defence (kinda like the kids who fill in random numbers on their math homework and claim that they "did" their homework)
There are other huge monoploies that are not AFAIK not participating in illegal activity. The justice dept. may check up on them once in a awhile but doesn't go after them. Although, I think that threatened monopolies are very tempted to violate anti-trust law, rather than loose market share (*cough* intel *cough*)
I believe that we have the Regan administration to thank for all the media mergers (might be Bush though). FCC regulations were severly weakened in the 1980's allowing for the media merger madness of the last few decades. Unfotunately, these mergers allow for conlicts of interest and fiscal streamlining that seriously degrade the quality of journalism, without violating anti-trust law. The print and TV news has gone from crappy to downright embarrassing in my (short) lifetime and I shudder to think of what it will look like when I'm elderly.
btw, the court can decide to fast-track any apeals directly to the supreme court. whether this will happen hasn't been announced yet. some speculate that it will fast track since M$ will appeal for-e-ver if need be and a speedy resolution would benefit customers, competitors and the economy.
for names i vote for "crap" and "more crap"
- bridgette
For those who can't do PDF, here's the HTML version. Grab it before it gets slashdotted by the entire world.
"If one is really a superior person, the fact is likely to leak out without too much assistance" -- John Andrew Holmes
It will be years and years before this gets enforced. The estimates I have heard are around 2 years for this to go through the appeals process. I just skimmed the ruling now, and it appears that Microsoft has a year after the final ruling to comply. I wonder if any lawyers here know if Microsoft still gets that year after the appeals are through, or is it 12 months or whenever the appeals are done, which ever comes last. Either way, expect 2 to 3 years for this break up to occur, if and only if Microsoft loses its appeals.
I dont like Microsoft. Go Government. Wait a sec, I don't like the the government either. Go...ahh, just go.
--
+&x
Which is not to say I like Microsoft... I certainly don't. But if you love freedom, you have to be prepared to speak out for your enemies.
Microsoft is not a monopoly. It might have been closer to a monopoly when it assaulted Netscape, but it's obviously not so now. Linux (okay, okay, GNU/Linux), is prospering happily alongside Windows, and the movement has spawned its own little industry. And it's free, for crying out loud, in every sense. I, for one, don't doubt for a moment that Linux would trounce Windows on its own merits, given more time. Besides, there are other fine, though less popular, alternatives.
Instead, we're to see the US Government step in. Now I'm no lawyer, but these antitrust laws seem to me pretty darned nebulous... and if a law is vague enough, it's as good as allowing ex post facto prosecution. Sure Microsoft is scuzzy. That's what makes this action so popular... but are we sacrificing an important principle which would protect us later? I'm surprised to find so many Slashdotters hailing government for meddling with technology, using all those oft-maligned outdated laws, simply because this time it suits their purposes.
I don't know. I surely don't understand the nuances of this case very well, so perhaps I'm wrong and MS does deserve what's tantamount to a death penalty.
But what fear have I of Microsoft? They cannot arrest me or take my property. A government which picks and chooses who is a criminal is another story.
"The best we can hope for concerning the people at large is that they be properly armed." - Alexander Hamilton
Secondly, is it true or not true that the appeal will or can be pushed directly to the Supreme Court?
On a lighter note, any news on the planned names for the two companies?
Visit
Perhaps more troubling, there is nothing to prevent MS-OS from releasing new versions of the applications it 'divested' to MS-AP (i.e. creating or buying a new 'Office' and integrating it to the OS, as before) MS-OS will have a full permanent unlimited license on all current source, tools and other intellectual property related to integrating the divested Apps to the OS, but it won't have to share any *new* info/APIs/etc. with MS-AP.
The clause that explicitly prohibits MS-OS from releasing new versions of IE clearly grants MS-OS the right to release new versions of any other MS-App by default (see below). They may even be able to call it MS-Word (or whatever) depending on whether trademark is considered a business element of MS-AP (as I would argue) or an intellectual property (under the full unlimited license)
I would have expected the Judge to ban the 'Privileged App syndrome' more broadly (i.e. to lock MS-OS out of more than just the browser) The wording would be a little tricky, but that's a lawyer's stock-in-trade.
I'm not saying we'll see a wholesale regeneration of MS-Office, MS-BackOffice, etc. but I wouldn't be surprised if MS-OS tries to cherry pick, to its advantage. Buying new programs to replace the lost apps is easy for MS-OS. Buying privileged access back is explicitly banned for MS-AP.
In theory, all the 'talent/experience' behind MS apps will be reassigned to MS-AP, but we'll have to see how personnel are actually divided, won't we? The programming talent that produced the newly purchased programs will largely come along with the buyout.
1(c)(ii). Intellectual Property that is used both in a product developed, distributed, or sold by the Applications Business and in a product developed, distributed, or sold by the Operating Systems Business as of April 27, 2000, shall be assigned to the Applications Business, and the Operating Systems Business shall be granted a perpetual, royalty-free license to license and distribute such Intellectual Property in its products, and, except with respect to such Intellectual Property related to the Internet browser, to develop, license and distribute modified or derivative versions of such Intellectual Property, provided that the Operating Systems Business does not grant rights to such versions to the Applications Business. In the case of such Intellectual Property that is related to the Internet browser, the license shall not grant the Operating Systems Business any right to develop, license, or distribute modified or derivative versions of the Internet browser.
If you can go to bed, knowing you did a valuable thing today, you're very lucky. If you can't... it's not bedtime
How about MICROS~1 and MICROS~2 :)
Catchy, no?
free speach
Did you mean: free speech
Bill Gates said today of his estranged operating systems unit, " I never liked the bitch and I was only in it for the sex. All my friends told me to dump the tramp years ago, I look forward to playing the field again."
Some highlights:
From the Final Judgement
1) Split up into two companies is based on what the two portions of the company were doing as of Apr 27, 2000. No saying "Hey, Office is part of the OS"
2) The 2 NewCo. may not recombine, enter into Joint Ventures, provide APIs to each other that are not available to other ISVs.. or basically collude.
3) The OS company cannot know OEMs for supporting other OS's, OEM's can change the boot up sequence.
4) Microsoft shall disclose to ISVs, IHVs, and OEMs in a Timely Manner, in whatever media Microsoft disseminates such information to its own personnel, all APIs
5) Microsoft shall not take any action that it knows will interfere with or degrade the performance of any non-Microsoft Middleware when interoperating with any Windows Operating System Product
6) MS has to create an internal position to monitor antitrust compliance within the company (boy, there's a sucky job...)
Very interesting stuff.... nothing too surprising though...
DrLunch.com The site that tells you what's for lunch!
it should have been split into at least three companies. msft has their fingers in _many_ pies here:
1. apps (office, ie, money, blah)
2. operating systems
3. media/service (msn et al)
4. hardware
5. certification
...and so on. two companies is not enough to get a fair division of all their arms. where will hardware go? operating systems or apps? won't that allow that company to tie their software to the hardware?
anyone have a quick rundown of what goes where with the split?
--
No, you're wrong. Significant parts of the remedy take effect exactly 90 days from now. Make no mistake about it: In 90 days they're putting the handcuffs on Microsoft and marching them off to jail. From the remedies:
This Final Judgment shall take effect 90 days after the date on which it is entered;
3. Provisions In Effect Until Full Implementation of the Plan of Divestiture. The provisions in this section 3 shall remain in effect until the earlier of three years after the Implementation of the Plan or the expiration of the term of this Final Judgment...
Ban on Adverse Actions for Supporting Competing Products. Microsoft shall not take or threaten any action adversely affecting any OEM Uniform Terms for Windows Operating System
Products Licensed to Covered OEM. Microsoft shall license Windows Operating System Products to Covered OEMs pursuant to uniform license agreements with uniform terms and conditions and shall not employ market development allowances or discounts...
OEM Flexibility in Product Configuration. Microsoft shall not restrict (by contract or otherwise, including but not limited to granting or withholding consideration) an OEM from modifying the boot sequence...
Disclosure of APIs, Communications Interfaces and Technical Information. Microsoft shall disclose to ISVs, IHVs, and OEMs in a Timely Manner, in whatever media Microsoft disseminates such information to its own personnel, all APIs, Technical Information and Communications Interfaces that Microsoft employs...
Knowing Interference with Performance. Microsoft shall not take any action that it knows will interfere with or degrade the performance of any non-Microsoft Middleware...
Developer Relations. Microsoft shall not take or threaten any action affecting any ISV or IHV Ban on Exclusive Dealing. Microsoft shall not enter into or enforce any Agreement in which a third party agrees, or is offered or granted consideration...
Ban on Contractual Tying. Microsoft shall not condition the granting of a Windows Operating System Product license...
Restriction on Binding Middleware Products to Operating System Products. Microsoft shall not, in any Operating System Product distributed six or more months after the effective date of this Final Judgment, Bind any Middleware Product to a Windows Operating System...
Agreements Limiting Competition. Microsoft shall not offer, agree to provide, or provide any consideration to any actual or potential Platform Software competitor in exchange for such competitor's agreeing to refrain...
Continued Licensing of Predecessor Version. Microsoft shall, when it makes a major Windows Operating System Product release...
:-)
So, what I'm saying is: go ahead and pop the cork... Microsoft is going into the slammer, it's for real. We're got 90 days to figure out the best ways to exploit the new leverage the good judge is giving us. What's on the top of my mind is how the ban on contractual tying could be used to counter Microsoft's slimy dealings on ASF. Can we find the terms of their file format patent license to be a contractual tie? (bet you we can) And get it thrown back in their face immediately. Boy, wouldn't that be sweet? And at the same time give the DCMA and UCITA, with their oppressive new restrictions on reverse engineering etc., a swift kick in the nuts. Same goes for their attempt to pollute Kerberos, though I truly that one is being handled well through other means. But Microsoft really has some strong attacks going on the legal, intellectual property and patent fronts (just as Halloween II recommended) and up to now things haven't been going all that well for the rebel alliance.
This ruling gives us lots of groovy new ways to hit Microsoft where it hurts, starting right now. The next chapter in this sorry saga is going to be mostly fun for the barbarians
--
Life's a bitch but somebody's gotta do it.
First, a nitpick: it wasn't the DoJ that decided to break up Microsoft, it was the Court. :)
Quoting from Judge Jackson's opinion:
Basically the Court is saying, "You guys are lying, cheating, and acting like nothing has changed, and saying that you can get away with it on appeal. You know what? Go ahead and appeal. I'm getting the knives out."
It gets better: Microsoft offered a bunch of witnesses to testify to the 'detrimental effects' of a possible breakup. To which the Court replied:
Basically saying, "your witnesses are BS and you're just delaying the inevitable."
I love this judge.
You can find the text of the ruling here, btw.
The Second Amendment Sisters
Finding God in a Dog
Is Solitare considered a seperate application? I think M$ has a strong argument for Solitare being a crucial part of the OS... Definitely the most popular "utility" in the history of Windows :0)
"I always wanted to be a procrastinator,