DoJ, states divided on Microsoft antitrust success

The US Department of Justice and five States have declared themselves satisfied with the antitrust enforcement efforts taken against Microsoft despite a further seven States maintaining they have had 'little or no discernible impact in the marketplace.'

The final judgments handed down against Microsoft in 2002 after it was founding guilty of abusing its monopoly position are due to expire in July this year, prompting the US District Court for the District of Columbia to ask interest parties for their thoughts on the impact of the enforcement efforts.

While the US DoJ and five States - New York, Louisiana, Maryland, Ohio, and Wisconsin (The New York Group) - reported that the final judgments have succeeded in increasing competition to the benefit of consumers, seven States making up the California Group are not convinced.

The fact that middleware and operating system competition is taking place today is encouraging and an indication that the final judgments are enabling the competition that they are designed to protect, noted the DoJ and New York Group in their filing.

The DoJ pointed to the increased competition Microsoft faces from Firefox, Opera and Safari on the browser front, as well as the success of Apple's iTunes and Adobe's Flash as examples of increased competition, along with Dell and Lenovo's pre-loaded Linux desktops.

The California Group - comprising California, Connecticut, Iowa, Kansas, Minnesota, Massachusetts, and the District of Columbia - maintained that the final judgments have been less than successful, however.

The final judgment clearly has had little or no discernible impact in the marketplace as measured by the most commonly used metric - market shares, they stated in their filing, maintaining that Microsoft did not cease its previous practices because of the judgment but because they were highlighted during the court case.

The final judgment has demanded relatively little of Microsoft other than to fulfill its [protocol] disclosure obligations... which it has still not discharged in full, they added. There can be little doubt that Microsoft's market power remains undiminished.

In its own filing Microsoft insisted that market share statistics were not a fair way to judge the success of the remedies, noting that they were not designed to diminish Microsoft's monopoly but to prevent it exploiting its position via anti-competitive behavior.

Despite that statement, the company also took the unusual step of boasting about the success of its competitors and the decline in its marketshare for desktop operating systems and web browsers.

Industry statistics confirm that by June 2007, Internet Explorer's worldwide usage share had fallen to 84.7%, while Firefox acquired a share of 12.7%, it boasted, while noting Apple 28.5% share and RealPlayer's 21.6% share of the media player market.

Following an agreement by the DoJ and Microsoft last year it was decided that the final judgments related to protocol licensing should remain in place until at least November 2009.

Despite criticism from the California Group that the MCPP protocol program has not succeeded in increasing interoperability between rival operating systems and Windows, Microsoft insisted that the rise of web-based applications that are operating system agnostic was a sign of its success.

The DoJ and New York Group also reserved criticism for the MCPP program, however, stating that it had been fraught with difficulty since its inception and that it is hardly necessary to reiterate the many problems surrounding Microsoft's implementation of this provision to date.

The DoJ has criticized Microsoft's conformance with the provisions of the licensing program in the past but maintained that extending the program to 2009 should give it time to work.

The next joint status report, which will discuss the three filings among other things, is scheduled to be held by Judge Kollar-Kotelly on September 11.

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