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Date: Sat, 03 Nov 2001 16:11:40 -0700 To: farber at cis.upenn.edu From: Brett Glass <brett at lariat.org> Subject: MS/DoJ Settlement: "The Killer Clause"
Dave:
I'm not sure how many people have noticed it yet, but the proposed settlement agreement between the DoJ and Microsoft (see http://news.cnet.com/news/0-1003-201-7758181-1.html) contains a "killer clause" that, notwithstanding the rest of the verbiage, would let Microsoft crush competitors at will. This text, buried in the "definitions" near the end of the agreement, says, "The software code that comprises a Windows Operating System Product shall be determined by Microsoft in its sole discretion."
In short, anything which Microsoft declares to be a part of Windows must, as a result of the agreement, be considered by the Government to be part of Windows.
Let's look at the potential effects of this clause. Suppose that a new company -- let's call it "ScapeNet" -- comes out with a fantastic, new "must-have" application program that Microsoft sees as a threat to its software dominance.
No longer would Microsoft have to worry about being perceived as "dumping" a competitive product on the market to put a rival out of business. It could simply say that its new product was "a part of Windows" or "an improvement to Windows" -- even if it was released or distributed separately. The government could not complain no matter how many competitors were snuffed out in this manner.
Thus, the proposed settlement agreement is not just ineffective but is actually dangerous to free competition in the software industry.
The DoJ was tripped up once before -- in 1995 -- when similar language was inserted into a previous consent decree. Will the government be fooled again?
--Brett Glass
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