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The Feds tell Microsoft they will be watching them

Despite the circus-like atmosphere punctuated with laugh-inducing testimony, United States v. Microsoft, which went to trial in 1998, remains one of the landmark federal court decisions of the 90’s. It paved the way for other government bodies worldwide, such as the European Union, to successfully pursue antitrust cases against Microsoft and other electronics giants like Intel.

Microsoft and the government reached a settlement in which Microsoft agreed to grant third-party developers access to its application-programming-interface and additionally give a court appointed panel of three people full access to it’s systems, records, and source code for five years in order to ensure compliance.

The oversight was supposed to expire November 12, 2007, but the court was not entirely satisfied with Microsoft’s progress, so it decided to meet again to evaluate a possible extension to oversight if Microsoft was found not to be fully complying.

The decision reached by the federal court, presided by Judge Colleen Kollar-Kotelly, was that Microsoft, while making significant steps to comply, seriously fell short of compliance in releasing information on its protocols to its competitors.

The result is that Microsoft will have to endure two more years of monitoring from federal agents (expiring November 12, 2009) assuming the company behaves. Judge Kollar-Kotelly said she made the final decision based on “the extreme and unforeseen delay in the availability of complete, accurate, and useable technical documentation relating to the communications protocols that Microsoft is required to make available to licensees under Section III.E of the Final Judgments.”

Seven states — California, Connecticut, Iowa, Kansas, Minnesota and Massachusetts, and the District of Columbia — pushed hard to extend the oversight five more years, claiming Microsoft still operates like a monopoly.

The extension stems from the fact that section III.E of the final 2002 judgment required Microsoft to release quality technical documentation on its interfaces and protocols. This documentation was expected to be released by February 2003. But 2003 came and went with no signs of any significant effort to produce documentation.

Judge Kollar-Kotelly explains, “More than five years later, the technical documentation is still not available to licensees in a complete, useable, and certifiably accurate form, despite the fact that III.E was intended to be the ‘most forward-looking provision’ in the Court’s remedy.”

Though acknowledging that this documentation would be time intensive to produce, she blasted Microsoft, saying it was fully culpable for “this inexcusable delay … Practically speaking, Microsoft has never complied with § III.E” she concluded.

She did note signs of progress towards producing the required documentation, but said they were too little, too late, and thus was compelled to renew the oversight. She reminded observers not to view the extended oversight as sanctions, but rather, “a means to allow the respective provisions of the Final Judgments the opportunity to operate together towards maximizing Section III.E’s pro-competitive potential.”

Microsoft’s Brad Smith, its senior vice president and general counsel, tried to put a cheery face on the glum news for his company stating that Microsoft was “gratified that the court recognized our extensive efforts to work cooperatively with the large number of government agencies involved. We built Windows Vista in compliance with these rules, and we will continue to adhere to the decree’s requirements,” he stated.

Antitrust litigation, including a $180 million settlement with Iowa, continues to plague Microsoft. Still, Microsoft shows little signs of slowing down, continuing to expand its presence in the video game industry with the Xbox 360, and the portable music industry with its Zune player line.

dailytech.com