Bush Administration Stops Microsoft Breakup

The U.S. Department of Justice announced that it had been instructed by the Bush Administration to cease its drive to break up Microsoft, which has already been found guilty of violating U.S. anti-trust law in a complaint filed by the Federal Government and 19 states. See the BBC or CNN for more. It isn't clear what wristslap, errr, remedy the Justice Department will seek instead. Update: 09/06 15:21 PM GMT by M : Declan McCullagh of Wired notes: "The text of the DOJ announcement is here. Wired News has an article. Also, the DOJ says a 'Senior Antitrust Division Official' will brief reporters at the department's DC headquarters at 11:30 am ET, so look for some followup stories from that."

Comments

and I thought MY bank was bad

[ferat]

Certainly took MS's checks long enough to clear...

Wait a minute...

[ASCIIMan]

Where does this say Bush was the reason for stopping the MS breakup? I see a reference to the Bush administration, but I assume that means someone he appointed (ie John Ashcroft) is the person who "Stop[ped] the Microsoft Breakup".

So much for being "tough on crime"

[werdna]

How can Ashcroft defend his tough-as-nails posture regarding alleged computer crime by a small-time russian company who threatens nobody, while refusing to pursue an in-the-bag conviction already won in part, of a notorious bad actor whose conduct will affect virtually every computer user on the planet?

Ashcroft's new motto: "We're tough on crime, except when they donated to our campaign fund."

Re:So much for being "tough on crime"

[Jason Earl]

The Democrats would have done the same thing. No sane President is going to push for the crucifiction of the one tech stock that isn't currently in the toilet with today's poor economy.

Not that it matters. Monopolies topple themselves eventually, and Microsoft is well on its way. PC sales are slow (and will remain slow despite Windows XP), corporate budgets are tight, and Microsoft is stuck in the unenviable position of having to compete not only against the growing tide of Free Software, but also against a huge installed base of it's own software.

If people don't start buying new computers or upgrading the software that they currently use then Microsoft is just as cooked as if we all switched over to Linux. And Microsoft isn't helping things either. For every nifty new feature that they have added (stability) they have added several anti-consumer features (the new registration procedure and other intellectual protection measures, higher price).

It's going to be an interesting year next year.

ray of hope

[davey23sol]

The article that I first saw on CNet said that this announcement was *ONLY* the Justice Department and that this did *NOT* represent the wished of the individual states.

The newest CNet article is unclear, saying that the Justice Department and the States and the Judge will all meet over the next two weeks.

There might be a chance that the states won't go along with this. The Attorneys General of the states tend to be more progressive in consumer protection.

Re:Violation of system of checks and balances?

[Foochar]

Legislative Branch - Makes the Laws = Congress
Executive Branch - Enforces the Laws = President
Judicial Branch - Evaluates the Laws = Judges

The Department of Justice is part of the Executive branch, as well it should be. The executive branch is charged with law enforcement. Bush can't order the judge in the case to rule in a certain way, but he can tell the government lawyers prosocuting the case to proceed the way he wants them to. Checks and balances are still maintained. Even if Bush were to dangle the carrot of a higher position within the courts in front of the judge checks and balances would still be maintained because congress would still have to aprove her for her new position.

And Microsoft's comment is...

[The Slashdolt]

"All your presidents are belong to us!"

exactly

[Trepidity]

From the NY Times article:

The antitrust official said the decision announced today was not connected to the introduction of the Windows XP system. He said Attorney General John D. Ashcroft had been notified of the decision but had not influenced the outcome. The official said there had been no White House involvement. "The decisions about this case are being made in the Department of Justice," he said.

Now you might speculate that they're lying, and that Bush actually did order this action, but to report so as fact is clearly very poor journalism.

Naive and incorrect

[werdna]

Clearly your position is grounded more in a kneejerk bias to defend the President, regardless of the merits, than an informed understanding of what is going on, or a valid criticism of the original posting.

Bottom line, the President is absolutely answerable for this (although it may well be the right thing to do from a legal perspective). Writing "state senators" can and will accomplish nothing.

First, the Department of Justice is an agency of the Executive Branch of Government, that is to say, they work for the President of the United States. John Ashcroft was appointed by, and serves at the pleasure of, the President. While he is sometimes granted autonomy as a matter of course, Ashcroft would take no position contrary to the wishes of the President. You may recall not too long ago, when Richard Nixon sought to have "independent counsel" Archibald Cox sacked -- two officers resigned office (or were asked to resign) rather than follow their boss' instructions. Only Robert Bork, one of the few remaining executives in DOJ who hadn't resigned, agreed to follow those instructions.

Now, just so you understand -- the Department of Justice are the lawyers for the United States Government. If they drop the case, the U.S. government will not proceed. Furthermore, and far more important, the House and the Senate have no constitutional authority to enforce any law against anyone (except a case for impeachment), presuming that, by "state senators," you meant the Senators representing your state in the Federal Senate. Your state senators wouldn't have much to say about anything -- except the cases brought by particular states -- and they would likewise be constrained under their respective state constitution separation of powers from acting against any company. You might write your governor, if you wanted to continue seeking structural relief, for all the good it will do you.

Guys, you're missing the point.

[rjh]

Really. The point is not that Bush is letting Microsoft off the hook--he's not. The Bush administration (important to remember that) is saying, ``we don't think a breakup is called for, we want to see conduct remedies instead''.

This is not necessarily a bad idea. In fact, Tom Miller, the Iowa attorney general who has been one of the biggest movers in the states' suit against Microsoft, has agreed with the Bush administration's decision on this matter.

When even the most aggressive of all the state AGs agrees that ``conduct remedies are enough, they'll do'', what in God's name are the rest of you mewling about?

Let's also note that the Bush administration is no longer pushing for a breakup. That doesn't mean a breakup won't happen, because in the end, it is the judge hearing the case who gets to decide what action is necessary to restore competition to the marketplace. If the judge in question thinks a breakup is called for, well, it doesn't matter a damn what the Bush administration or the states want--Microsoft will be broken up.

This is, realistically, not news.

Re:Guys, you're missing the point.

[rjh]

Remember: if you're a monopoly and you illegally use your monopoly power to stifle competition, you have to pay triple damages to the people you've harmed.

Let's take a hypothetical example of a small start-up worth $50 million at its peak which was brutally hammered by Microsoft's unethical business practices. This start-up might not be worth anything anymore, but whoever's handling the start-up's business affairs (even though it's defunct and bankrupt) can sue Microsoft for a hundred fifty million in damages.

Let's take a look at Be, which was worth (at its peak) $120 mil--or, at least, that's the highest price Apple ever offered for them. Be is currently worth less than a six-pack of Budweiser. Since Be was crushed in large part due to Microsoft's unethical business practices, that's $360 million dollars in damages right there--or a third of a billion.

Now let's take Sun Microsystems, which is unarguably going to be hurt by Microsoft refusing to include Java in WinXP. How many billions of dollars can Sun claim in damages? Now triple that, and you get an idea of how large Microsoft's Sun-induced headache is going to be.

The interesting thing is not going to be the breakup, or the conduct remedies, or anything else. It's when the dust finally settles and this is all over, the US government is going to wind up placing big-ass, gnarled, iron-studded clubs into the hands of the Mongol Hordes who hate Microsoft.

That's gonna hurt.

And let's not even get into the copyright issue. Under American law, any monopoly which leverages intellectual property to preserve their monopoly has their work turned over to the public domain. This isn't something the Feds or the state AGs are pursuing, because they probably think that would kill Microsoft outright, and they don't want to do that. But how long until Sun, or IBM, or someone else, discovers this--I'd be surprised if they didn't know it already--and files a suit in Federal court to get Windows turned over to the public domain, and thus slaughters Microsoft outright?

For Microsoft, the pain isn't really going to begin until after the trial ends. That's why they're stalling as long as they can--because when the trial ends, that's when the Mongol Hordes arrayed against them start chanting, Bring the Pain, Bring the Pain.

(And yes, the DOJ has used that nifty bit of copyright law as leverage to get RIAA to do things the DOJ's way. If the DOJ can use it against RIAA, then anyone can use it against Microsoft.)

Re:Guys, you're missing the point.

[Winged Cat]

It most definitely is news, at the least. Dropping the pursuit of the breakup after they'd already won it? (Granted, it got overturned on appeal, but they could have pressed for it again with the new judge.)

As for the breakup...Microsoft has demonstrated that it can and will ignore (not flout, not workaround, but outright ignore) any conduct remedy imposed on it that inconveniences it. Let's take a look at the conduct remedies listed in the CNN article as examples:

• prohibiting Microsoft from punishing companies working on competing products - a business deal is a business deal. If Microsoft starts giving away Office - one of its currently most profitable products - to try to eliminate competition, the government may eventually sue them (if they can be convinced to)...but merely filing the lawsuit and getting things to court will take long enough that any non-free competitors would be dead well before opening arguments were heard.
• prohibiting it from favoring companies that helped Microsoft exclude competitors - same deal. If Microsoft were to hand the MPAA or RIAA, or even just Real, a billion dollars tomorrow, the money would be invested and gone before the government even noticed.
• requiring Microsoft to license Windows to PC makers under uniform prices and terms according to a publicly available schedule - watch Microsoft simple ignore this, and go on as if this order never existed. Alternately, perhaps it will comply...by posting all kinds of different editions of Windows, 100% identical except for certain logos and title strings, but with prices varying by as much as 1000%. The higher-priced ones are readily available to anyone, while the lower-priced ones are by special order only...and only certain companies ever seem to have these special orders processed, or even seem able to find out how to place orders for them to begin with.
• barring Microsoft from interfering with the way PC makers set up startup screens et al - and what happens when Microsoft's contracts continue to enforce this? Government sues to get enforcement...and the contracts persist. Government sues again...and the contracts persist.

In short: laws only matter if they can be enforced. Conduct remedies can't effectively be enforced in this case, therefore they are equivalent to nothing.

Fragile Economy big motivator to avoid breakup

[count0]

I'm no fan of MS, but given my current job search headaches I'd prefer not to see a recession get triggered by something that could be avoided. Selfish? Short-sighted? probably. But I'd like the economy to recover sooner than later, and a MS breakup would result in later.

cz

Heh...

[Sarcasmooo!]

I have never seen a more perfect example of jerks with mod-points punishing opinions they disagree with than in this discussion.

Comments on a few comments, re Slashdot downtime

[jamie]

Slashdot's database was hosed from sometime around 7 AM EDT until a few minutes ago (roughly 3:40 PM EDT). We believe the problem is fixed so it won't happen again. Keep your fingers crossed for us :)

There were 13 comments on this story ("Bush [Administration] Stops Microsoft Breakup") and 1 on another story that we suspect may have had their metadata mixed up somehow. I believe some of them were actually (intended to be?) posted to other stories and they wound up here instead. They were definitely replies to other comments and we had to make them at the "root level." But I believe the rest of their metadata was correct: user id, subject, points, etc.

If anyone who posted one of these comments or otherwise knows for a fact that our metadata is wrong -- at worst we might show them posted by the wrong user, that would be bad -- please email me and I will correct things as best I can.

Sorry about this, but our first reaction is to try to save comments when at all possible in the case of DB corruption, and we all figured it would be better to leave them up, possibly with wrong metadata, than to delete them.

These are the 14 comments: 2259183 2259165 2259166 2259170 2259171 2259174 2259175 2259178 2259181 2259182 2259185 2259186 2259188 2259191

(Please note, discussion of Slashdot downtime is pretty clearly offtopic, so don't be surprised if you reply to this and get modded down as such. Feel free to mod me down. Hm, maybe we need a user-created discussion about our downtime so there's someplace it won't be offtopic...)

Re:lost vote .. As if he was going to get mine..

[ackthpt]

After trying to scrap the ICBM treaty...

In some ways this would be like FDR addressing congress on December 8, 1941, "Yesterday, Dec. 7, 1941 - a date which will live in infamy - the United States of America was suddenly and deliberately attacked by naval and air forces of the Empire of Japan.

We will therefore abandon Pearl Harbor, Hawaii, the Philippines, and all of our bases in the Pacific and leave it to the japanese as a reward for their initiative and innovative spirit, but leave them with a stern warning not to invade Texas."

From Wired: Instead, the government said, it would seek to impose severe regulations on what the world's largest software company may and may not do in the marketplace.

What this translates to:

May bundle and give products which are the sole source of income, and thus drive out of business, no more than 35 companies per year.

May not bundle and provide free of cost any of the following: oil, natural gas, lumber, minerals or mineral ores.

May not give more than $500 M^H^H^H^H^H$1 billion per annum to the Republican Party, conservative think tanks, and special shadowy organizations which shall remain nameless.

May not give more than $10.00 per annum to any parties other than those affiliated with the Republican Party, unless they have a popular, but nutty candidate which is competing in an upcoming election and may draw away votes from a party which will be remain nameless.

The Microsoft CEO may not spend more than 3 consecutive nights in the Lincoln Bedroom.

May not include less than 64,000 bugs per major release.

Will release a special W. version of Word with a spell checker which forbids use of words over 7 letters or 2 syllables in length.

Microsft products shall be distributed to all enemies of the USA, free of cost, so that we shall know of their weaknesses.

Should Microsoft be found in violation of any* of these conditions, the CEO will be sent to bed without dessert and grounded to his multimillion dollar mansion for one week of his choosing.

* Excepting the oil and gas provisions, under which punishment shall consist of the Microsoft CEO briefly discovering the resting place of James Hoffa, Sr.

A prediction

[gdyas]

Here is what I know to be true.

Microsoft will release Windows XP on time, with all of the features it alone intends to incorporate. There will be some slight cosmetic changes meant to give the misleading impression that the Bush Justice Dep't was able to reach some sort of deal with Gates et.al. It will be an almost bald-faced lie that nobody in the non-slashdot world will give a second thought to.

In truth, XP will be within approximation exactly what Microsoft intended it to be, its crowbar to begin leveraging their control of the individual PC desktop into dominance of the internet's protocols themselves and thus the server market. Microsoft will attempt to become the IBM of the 21st century, with all of the attendant lethargy, intransigence, and dictatorial control of what may and may not be done with the equipment that old dinosaur used to have. This'll be explained as the best of all possible outcomes for the consumer because it introduces "consistent standards for the protection of intellectual property and the security of personal data."

----------

Their ploy, most likely, will work. You see, I really think that there's not enough appreciation on Slashdot for the crushing masses of people who never, ever think about free software, open standards, or whether or not there are whatever sorts of privacy or antitrust issues involved with XP. They just want to use their computers to do stuff, and if XP makes it easier for them to do things online, work with video, etc, then they will use it even if installing it's a pain in the ass. And it looks all neat and new, too. For them, Linux is geek stuff. They know that Windows is "the only real OS". They've been using Windows and are quite comfortable with it, warts and all. All their friends use it. They don't want to mess with their computers all the time or have to find out what free program is available to do X, Y, or Z. They're just not at all curious about it as we are.

And MS, with a crack marketing dep't, knows all of this and more about their consumers. Linux can't even make a decent distro for idiots yet, nevermind that relatively prodigious learning curve. Linux has its market, sure, but so far it's not even on the same map as Windows & MS's efforts, and I speak as a complete advocate of open OSes. We MUST be honest with ourselves about the extent of permeation Windows enjoys and not fool ourselves with fantasies about how a government that only reflects the aforementioned popular disinterest is gigon to do anything real, anything solid, to stop the big bad company from making & selling its product.

Excuse my rant.

Wait...

[Balinares]

It might be more complicated than it looks.

I'm not sure I understand the DOJ announcement, but doesn't it say it wants to take action immediately? If I understand it right, it claims a break-up would take too long.

In short, they want to punish Microsoft effectively before XP hits the shelves.

Oh, geeze, I really hope I read that right... It might actually be a good thing, you know...

Strike a Point for the Bush Man!

[Skip666Kent]

For those who react to this news with righteous indignation over the Bush Administration's 'clear' act of 'selling out' to $$$ from Microsoft, please read the article. The Wired article in particular contains the following tidbits:

That would include restrictions such as: Microsoft can't give discounts to hardware or software developers in exchange for promoting or distributing other company products, and state and federal government lawyers may come onto Microsoft's campus to "inspect and copy" any document or file they find relevant.

Microsoft would also have to monitor all changes it makes to all versions of Windows and track any alterations that would slow down or "degrade the performance of" any third-party application such as Internet browsers, e-mail client software, multimedia viewing software, instant messaging software and voice recognition software.

Hardly favoured treatment for someone supposedly 'in bed' with the B Administration. This sets a precident that will be a lot more useful in the long run than simply 'busting up' Microsoft for the Internet Explorer issue.

This decision rocks!

Will restrictions work as a remedy?

[hillct]

One of the provisions of the proposed restrictions from judge jackson's original ruling, which the DOJ is going to model their restrictive remedy after was:

barring Microsoft from interfering with the way PC makers set up startup screens, the Windows desktop, preferences, and Internet connection wizards.

The question is, does this go to allowing PC vendors to bundle additional operating systems like Linux with new PCs without the penalties that are now part of the Microsoft Bootloader License?

There was another provision -to require a standard and consistant licensing price schedule- which obliquely touches on this issue, but none that address it directly; just as in the trial it's being ignored. Particularly troubling is the suggestion that the DOJ will model their proposed remedy on the restrictions proposed by Judge jackson in so far as those restrictions to business practices were relevant when they were originally proposed but the landscape has changed drastically sice then. Microsoft has moved on from the battle for the desktop, to the battle for the net, and if the restrictions do not relate to practices associated with the new battleground, then they will be on no value at all.

--CTH

Ever heard "The buck stops here"?

[abe ferlman]

The only way that this wasn't Bush's decision is if all the stories about Cheney really running the country are true. The decision may well have been issued and executed by Ashcroft and his cronies, but Bush is his boss, and can fire him if he makes decisions with which he disagrees.

It's not like Ashcroft is some gunslinging maverick who doesn't toe the party line- he does what Bush wants, or he is replaced by someone who will.

Bryguy

Re:Explain to me something

[cybrthng]

Your on crack.

Try removing konquerer from KDE, you can't. You would be ripping out Kparts and then your kmail would blow up and knews would barf and your KFM would be a pathetic filemanager instead of a powerfull object manager (for whichever type of objects kparts supports be it news, ftp, http whatnot).

I'm sorry, but the internet has become a part of the PC revolution and a part of the Operating system. Rip TCPIP out of linux, make it an installable module and then rip httpd/ftp/nntp support out of KDE and make it a seperate module and then you can preach about the lesser of the evils.

Until then, this is utter nonsense. Microsoft wasn't busted because of its browser, it was because of its OEM price locking and fixing of contracts, but ANYONE could have done that had they tried and marketed themselves to be able to do it.

Nonsense..

I don't even claim what microsoft did as far as BUSINESS PRACTICES are concerned was remotely right, but they sure as hell hit the nail on the head with Windows 2000 and Windows XP. You can't get much better then that.

NOT exactly

[Brand X]

From the LA Times article:

WASHINGTON -- Reversing a Clinton-era legal strategy, the Bush administration announced today it will no longer seek the breakup of Microsoft and wants to end the historic antitrust case against the software maker as quickly as possible.

...

During a ceremony on the White House lawn, President Bush declined to comment directly on the case but told reporters: "During the course of the campaign and throughout my administration I have made it abundantly clear that on issues relating to lawsuits -- to ongoing lawsuits -- that I expect the Justice Department to handle that in a way that brings honor and thought to the process.

"I respect and hold our attorney general in high esteem and I honor the work that he's done and I'm going to leave it at that," Bush said.

Now you might speculate that they're taking the quote out of context, or that there might be another implication to what he said (or almost didn't say), but to only go from one source and ignore all others is clearly very poor investigation.

Re:Bush?

[Keith Russell]

Exactly. Dubya didn't pick up the phone, call a receptionist at the DOJ, and say, "Don't break up Microsoft." (Well, not bloody likely. Oh, to be privvy to such things....)

Of course, the DOJ is run by John Ashcroft, a Bush appointee. And Bush, like any President, appointed an Attorney General with views in alignment with his party's platform. In this case, conservative Republican, which prefers to let the market police itself. Which means Bush would have some influence on DOJ v Microsoft.

But there's a world of difference between indirect influence and direct instruction, which Michael claims. By fabricating direct action by President Bush, Michael is, once again, discarding what little journalistic integrity Slashdot has, in favor of anti-Microsoft rhetoric so relentless, it has become irrational. Malda needs to bring the hammer down on Michael, and that right soon.

Venting done. Back on topic.

Would Bill Clinton or Janet Reno have enough patience to see the original break-up order this far? Or would they opt, as the Ashcroft DOJ has done, to forego the break-up and the now-moot browser commingling point in favor of a new remedy based on Microsoft's latest round of predatory behavior? Hard to say. At the very least, Microsoft still isn't off the hook.

And I was never convinced an OS/Office split would have been an effective remedy. The two BabySofts would still have monopolies in their respective markets. This lets the DOJ go after a more meaningful remedy.

Alternate remedies

[Alien54]

Justice is the most important point here. Microsoft should not benefit from it's illegal conduct.

There are other penalties that could make Microsoft wish it had been broken up.

The basic idea is that Microsoft should not benefit or profit from the proceeds of their illegal acts.

Therefore, one possible solution could be:

1) the equivalent of a jail term

• Microsoft should not release any new software or any revision or update to their operating system software in any way for an extended period of time. Occasional patches may be issued so long as they are standalone, issued for no cost, and can fit on a single standard format floppy disk. (1.44) megabytes
• The period of time that this prohibition should be in force should at least equal the period of time that they have had profit from their illegal acts (5 to 10 years), if not more. The purpose of this is to inhibit their dominance of the market as it was achieved by illegal acts, and return the conditions as much as possible to what it was when Microsoft committed the illegal acts.
• If Windows XP is not released to market, then the penalty can be reduced slightly (3 to 5 years).
• There should be a very substantial fine to remove any profits that they have accrued as a result of their illegal activity.

Again, the idea is to remove any profit or gain that resulted from their illegal acts.

2) Another alternate solution is to require that all operating system software releases must meet the approval in advance from a government commission comprised of a large number of industry experts. This includes any software integrated into the operating system, and any software intended to replace the operating system. Maybe three from each state in involved in the law suits, plus three from the Federal Government. With a quorum of 2/3 needed to vote. Again from a 5 or Ten year period.

With each of these, if this means that .NET is put on hold, then tough. It is meant to be a penalty. Similar to if you when to jail for several years.

Of course, criminals routinely protest that the jail sentences are unfair, and that they are mis-understood. This should not inhibit the administration of Justice.

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