REDMOND, Washington, 3 November — Microsoft Corp. chief Bill Gates lauded Friday’s court approval of his antitrust deal with the US government as “fair” and vowed that his firm would stick to the terms of the landmark pact.
But the global software titan’s competitors slammed the deal as “extremely disappointing” while a group of US states that had held out against the agreement refused to rule out appealing the decision.
Proclaiming the ruling unveiled by a federal judge in the US capital as a “milestone,” Gates told a press conference at the software giant’s west coast headquarters that it would allow him to focus on next generation technology. “We believe that settlement we have reached ... represents a fair settlement of this case,” the billionaire tycoon said. “It’s a major milestone.” Gates said that his firm would bow to the new restrictions placed on it by the deal in the case.
“This settlement puts new responsibilities on Microsoft and we accept them,” he said stressing that much had changed in the fast-moving industry in the four years since the legal battle began.
“We recognize that we will be closely scrutinized by the government and our competitors. We will devote the time energy and resources needed to meet these new rules. I am personally committed to full compliance.”
The settlement, which Microsoft said was a — “tough, but fair, compromise” — reached between the government and Microsoft in November last year and conditionally approved Friday, imposes no financial penalty. Instead, it forces Microsoft to disclose some technical information and bars agreements on Microsoft products that would exclude competitors, steps that Gates said the company had already begun to take. Other changes the firm had made included making it easier for computer manufacturers to replace Microsoft’s flagship software with other programs to boost industry competition, he said. The company’s industry competitors were however bitter over the ruling which they said neither leveled the playing field nor restored fair competition in the market.
Mike Pettit, president of ProComp, a trade group backed by Microsoft rivals, said the group was “extremely disappointed” by the ruling. “This represents a systemic failure of the legal system, a failure to protect consumers, competition, and companies like Netscape whose innovations literally changed the world.”
Media giant AOL Time Warner vowed that its battle to restrain Microsoft’s grip on the global software market would continue. Officials from nine hold-out states and the District of Columbia had fought in vain for tougher penalties against Microsoft said no decision had been made whether to appeal the ruling, but did not rule out such a move.
Robert Litan, a Brookings Institution antitrust expert, was of the view that the government’s proposed limits on the company would not protect consumers or its competitors. Asked if the settlement had succeeded in its target to benefit consumers and punish Microsoft by forcing the company to endorse software developed by its competitors, Litan said: “It’s too early to tell. I think everything depends on how effectively the agreement is enforced. The judge, in approving the settlement, recognized the importance of enforcement. But whether that materializes will depend largely on how diligent the Justice Department is in seeking out, and preventing violations.”
In response to some experts who call the agreement a sellout and filled with loopholes, Litan said: “There are many loopholes, and I suspect Microsoft will do its best to try to drive trucks through every one of them. “I think this decision will be perceived by the direct competitors to Microsoft as a kick in the teeth. But there will be other software developers, who work closely with Microsoft, who will be satisfied, if not relived, with the settlement.”
Robert Levy, an antitrust and software expert at the Washington-based CATO Institute, said the case should never have been brought to court. Adding: “To the extent that any remedies were imposed, those remedies were more than justified by Microsoft’s conduct.
“There are two deep-rooted longer termed problems here,” said Levy. “The first is that the entire antitrust process has been coopted by disgruntled competitors, seeking to accomplish, through the political process and the courts, what they have been unable to accomplish in the marketplace.
“The second problem is that a number of states have decided that they can substitute themselves for the US Department of Justice, as the principle enforcer of the federal anti-trust laws. Congress needs to act to strip the states of their authority to enforce federal antitrust laws, unless the states can show that their citizens have suffered injuries that are unique and that are not being redressed by the federal government.” Levy said the 9 non-settling states “did not meet that burden.”
