"Remedies" document text

This is the text of the unsigned "Microsoft remedies document," which was first circulated around the Internet in April, 1998, has been forwarded to the US Department of Justice.

Until the Justice Department files its broader monopolization case, we are unable to completely address the issue of appropriate remedies. Much of the Justice Department's case is fact-dependent and the remedies should be a clear and measured response to the antitrust violations identified.

Nevertheless, based upon the information already available, we propose a set of remedies that will have a broad and significant impact on the way in which the owner of the dominant operating system conducts its business. We also propose a monitoring system that is streamlined and would not require Justice to seek judicial remedies for any and all infractions. Among the remedies we seek are:

1. Separate the Applications Business Units from the Operating Systems Units; equal access to technical information. There is an inherent conflict of interest when the owner of the owner of the dominant operating system also develops its own applications for competitive markets. Only the complete separate between the two business units will ensure a level playing field in the development of software applications for Microsoft's operating systems. In addition, Microsoft should provide Windows licensees with information regarding specifications without delay but within a commercially reasonable time from the time it first provides the information to its own application developers, and permit that licensee, to use its certification marks to represent truthfully that the application is interoperable or compatible with the operating system.

2. Prohibit the Crippling of Competing Products; Open Windows Interfaces. Microsoft should be prohibited from intentionally disabling, crippling or otherwise interfering with the intended functionality and execution of other products. Similarly, the firm should not suggest that other products may be incompatible that are in fact known to be compatible. We believe that the promotion of interoperability and open standards generally enhances competition and innovation in the software industry. The APIs for Windows should therefore be made public.

3. Prohibit Tying the Operating System to Other Applications. Each of Microsoft's products must be sold and priced separately from the OS. The operating system vendor should not include its own products as part of the operating system unless it gives the same ability to integrate products and services into the operating system to competing vendors.

4. Prohibit Predatory Pricing. Free isn't free when the vendor owns the operating system. Free products for more than an introductory or promotional period of time (three months) must be presumed to be part of a predatory pricing strategy. The owner of the operating system is in a unique position to subsidize tied products indefinitely in an effort to kill the market for competitive products. Each of Microsoft's products must therefore be priced, marketed, and sold on its own.

5. Prohibit Anti-Competitive Contracting and Licensing. Prohibit Microsoft from requiring in its end-user or developer license restrictions that are not reasonably related to the subject matter of the product being licensed. Among the licensing practices that must be prohibited are: a) requiring licensees to train engineers in other Microsoft products as a condition for a Windows 95 license; b)restricting the licensee from testing, or benchmarking Microsoft products; c) requiring cross-licensing of patents; d) requiring the provision to Microsoft of unrelated technical and marketing information.

6. Permit OEMs to Interrupt the "Boot-Up Sequence." Microsoft should be barred from blocking the ability of Original Equipment Manufacturers (OEMs) to interrupt the boot-up sequence to add the OEM' own content or software. In addition, artificial barriers should not be established that unreasonably limit the ability of a hardware configure the desktop to utilize other software, content or services, except where such a reconfiguration would impair the core functions of the operating system.

7. Prohibit Any Discriminatory Access to Internet Content through the Operating System. A dominant operating system should not be used to favor Internet content that is owned, offered by, or preferentially licensed to the operating system vendor. Consumers should be given the greatest possible ability to set and choose links to Internet content and to replace any links provided by the operating system vendor with links of their own choosing. Nor should the operating system vendor require web sites to display and promote products and services of the dominant operating system provider, or discourage the use of competing products and services.

8. Prohibit Pre-Announcements of Products more than 6 months in advance. Pre-announcements of specific products or features are, at times, very relevant to a broad range of industry players in terms of assisting them in determining technology trends. However, the intentional pre-announcement of products that do not yet exist can have the effect of freezing the market. When a product pre-announcement is knowingly false, it may harm competition and restrict the availability to the market of innovative products from other vendors.

9. Divestiture of Compatibility Laboratories. We believe that it is ultimately unworkable to have the owner of the dominant operating system manage the testing of compatibility for software and hardware products. Only a third party can properly manage that sensitive process of certification of compatibility.

10. Industry Monitoring of Compliance with the Remedies Identified Above. The proposed restrictions on Microsoft's business practices are broad and complex. We believe it is unworkable to require the Justice Department to file suit for any and all infractions. It is therefore necessary for Justice to establish an industry review mechanism that has the ability to hear complaints related to non-compliance, determine the accuracy of such complaints, and propose remedies that can be effectuated without judicial intervention.