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The Litigating States' Proposed Remedy for Microsoft

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  • Hahn, Robert W.

Abstract

State officials face well-funded, well-organized coalitions of in-state businesses arguing for the prosecution of an out-of-state company, an unequal political contest. Accordingly, the state attorneys general (AGs) have resisted settlement attempts and have pushed both the Justice Department and the courts for stronger action against Microsoft. In the process, the interests of consumers, the AGs' nominal clients, have been paid little more than lip service. The nine litigating states and the District of Columbia together account for just 27 percent of the U. S. population. But they do represent many of Microsoft's most vocal rivals. California is home to Apple, Palm, Oracle, Sun Microsystems, and Netscape. Massachusetts is home to the Lotus division of IBM as well as major operations of Sun and Oracle. Utah is home to Novell. By far, the most overreaching provision in the litigating states' proposal is the prohibition on 'binding' middleware code to Microsoft's operating system software. In short, the litigating states would require Microsoft to allow licensees to remove the software code for any function that a Windows licensee could conceivably single out, while still requiring Microsoft to maintain the performance of the operating system. If Microsoft were able to comply technically, which is far from clear, it would have to rewrite Windows from scratch as a combination of thousands of separable, modular components. This would balkanize Windows as a platform for applications software. Developers would no longer be able to count on the presence of key segments of software code. Indeed, to ensure that their software worked properly, developers would have to provide those features themselves. As a result, consumers would encounter different flavors of Windows with differing capabilities. Adding to Microsoft's (and consumers') woes, the litigating states would require Microsoft to license large amounts of its intellectual property to competitors for little or no compensation. Competitors would get Microsoft's software code for free. But consumers would suffer in the long term from decreased innovation since Microsoft would be left with little incentive to develop Windows or many of its applications programs.

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Bibliographic Info

Paper provided by Regulation2point0 in its series Working paper with number 463.

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Date of creation: Mar 2002
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Handle: RePEc:reg:wpaper:463

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