November 2, 2001 7:00 PM PST

The agreement: Devil's in the details

The key word to the proposed settlement between Microsoft and the Department of Justice appears to be "except."

Although the proposal purportedly forces Microsoft to allow PC makers and others to promote products that compete with the software giant's own on the desktop, the agreement also includes a number of exceptions and provisions that appear to give Microsoft substantial wiggle room.

"From a general standpoint, it does so little compared with previous conduct remedies," said one technology executive who did not want to be named. "The tricks lie with the terms 'definition' or 'exception.' One example is the term 'non-Microsoft middleware.'"

The phrase, which is used frequently in the agreement, appears to mean "application," but it's not defined.

Here are some other examples of agreements and potential loopholes:

Microsoft agrees to let computer makers install icons or shortcuts for non-Microsoft software on the desktop or in the start menu, even if Microsoft sells a competing product (provision III.C.1).

Potential loophole
Microsoft may restrict or limit these additions to products that "provide particular types of functionality, provided that the restrictions are non-discriminatory." These shortcuts also cannot "impair the functionality of the user interface." The meaning of "particular types of functionality" is not clear. In the past, competitors alleged that Microsoft altered its operating systems so competing products would not run smoothly on Windows.

Microsoft may override a competing product with one of its own if the competing product "fails to implement a reasonable technical requirement (e.g. a requirement to be able to host a particular ActiveX control) that is necessary for valid technical reasons to supply the end user with functionality" consistent with Windows. The software developer, though, must be given notice and an opportunity to correct the problem (provision III.H.2.2).

Potential loophole
The meaning of "reasonable technical requirement" is unidentified and could be interpreted broadly.

Microsoft must disclose the API (application protocol interface) for future products to hardware makers, software developers and Internet carriers so that they can develop interoperable products (provision III.D).

Potential loophole
Microsoft does not have to disclose APIs if it would compromise security or anti-privacy safeguards (provision III.J).

In addition, the disclosure only has to be made "no later than the last major beta test" of a major revision to an application and in a "timely manner" with regard to an OS and in good faith.

Future versions of Windows cannot automatically alter shortcuts or icons placed on the desktop by computer makers. The provision essentially permits a PC maker to put non-Windows software on the desktop (provision III.H.3).

Potential loophole
Although Windows can't automatically reconfigure the desktop, it can pepper consumers with requests to drop other software and adopt competing products from Microsoft within 14 days after the PC is activated.

PC makers can include a competing OS that would be as easily accessed as Windows. The competing OS could even launch before Windows in the boot sequence (provision III.C.4).

Potential loophole
It is unclear whether PC makers can sell PCs without Windows. One of the key complaints during the testimony phase of the case was the requirement that computer makers had to load a copy of Windows on each machine.


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