AAI Applauds New States' Microsoft Proposal

Date: Dec. 7, 2001

Contacts: Norman Hawker, AAI Research Fellow,616-387-6118; Robert Lande, Senior Research Fellow , 410-837-4538; Albert A. Foer, President, 202-244-9800.

American Antitrust Institute Applauds New States' Microsoft Proposal

The American Antitrust Institute applauds the Remedy Proposals filed by 9 states and the District of Columbia in the Microsoft case today. It contains a tough but fair series of remedies that are likely to restore competition to the operating system market, deprive Microsoft of the fruits of its illegal conduct, and prevent Microsoft from engaging in similar conduct.

Among its most important provisions are the following: 1. Microsoft must continue to develop a version of Office that will port to Macintosh, and to license three independent companies to produce versions of Office that will port to other operating systems; 2. Windows will be required to carry Java; 3. Microsoft will be required to offer an unbundled version of Windows (one without a media player or other middleware); and 4. Microsoft will have to open source Internet Explorer.

The Proposal also closes a variety of loopholes in the November 6 Settlement entered into by Microsoft, the Department of Justice, and some States. It calls for the appointment of a Special Master to enforce the decree. And it contains a crown jewel provision that will give Microsoft a strong incentive to comply with any Order the Court imposes. If Microsoft does not comply with the remedy Order, the source code of the relevant software will be opened, and Microsoft can also face a civil penalty and other appropriate relief.

The proposed remedy goes no further than is absolutely necessary. Indeed, it is generally as conservative an approach as one could take and still have an effective remedy against Microsoft for the numerous illegally abusive activities identified in the unanimous decision of the United States Court of Appeals for the District of Columbia. It will not deprive Microsoft of any incentives to innovate. Instead, it will give other computer companies these same incentives, and this greatly will benefit competition and consumers. We strongly urge Judge Kollar-Kotelly to adopt this proposal.