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M$ Monitor: Expand DOJ Probe


From: Audrie Krause
Subject: M$ Monitor: Expand DOJ Probe
Date: Wed, 18 Mar 1998 23:17:20 -0800 (PST)

The Micro$oft Monitor
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Published by NetAction          Issue No. 25                 March 19, 1998     
Repost where appropriate. Copyright and subscription info at end of message.
* * * * * * *      
In This Issue:
Action Alert: Support Expansion of the Microsoft Antitrust Investigation
No News Is Good News On Cal State University Technology Deal
About the Micro$oft Monitor
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ACTION ALERT: SUPPORT EXPANSION OF THE MICROSOFT ANTITRUST INVESTIGATION
Contact the Justice Department:         

-- Call the toll-free antitrust hotline: 1-888-736-5287
-- Email address: address@hidden
-- Email link: mailto:address@hidden

Please contact the Justice Department by March 31, 1998.

NetAction Project Director Nathan Newman prepared this update and call
for action on the Microsoft antitrust investigation: 
 
Email Nathan at: address@hidden 
Email link: mailto:address@hidden
__________

"So how well did Bill Gates do on Capitol Hill? On balance, not great...The
impression [Bill Gates] left is that Microsoft has enough market power in its
industry to justify further investigation by federal trustbusters."
 -- BUSINESS WEEK, March 16, 1998
__________

What a difference a year makes!

A year ago, polls and puff-piece features were pumping Bill Gates and Microsoft
as heroes of the computer age, even while the media ignored a growing chorus of
consumers and competitors decrying Microsoft's abusive practices in the
marketplace.

After concentrated efforts by a wide range of activists, including
NetAction, public attention and the legal arms of state, federal and even
foreign governments are now focused on the Microsoft abuses that were once
confined to the back pages of computer magazines.

When the Senate Judiciary committee held hearings on Microsoft on March 3,
1998, it solidified a bipartisan sense in both the Congress and the nation that
Microsoft's monopoly power has become a threat to innovation and open access to
technology.  Senators on both sides of the aisle, from Republican Mike DeWine
of Ohio to Democrat Patrick Leahy of Vermont, grilled Bill Gates and his allies
on a whole string of anti-competitive behavior, with a large focus on
Microsoft's efforts to force Internet content providers, ISPs and computer
resellers to use only Explorer Internet browsers.

At the end of the hearing, Senator Orrin Hatch, chairman of the Judiciary
Committee, made the flat declaration of Microsoft, "They are now a monopoly.
[Microsoft] will have to learn to live by the rules that govern monopolies."

Highlights of the hearings included Netscape's Jim Barksdale asking everyone in
the audience to raise their hands if they owned a computer and then to keep them
up if they had an operating system other than Microsoft's.  As a sea of hands
fell into peoples' laps, everyone watching had a visual reminder of how
Microsoft's monopoly dominates the computer world.  Senator DeWine also
grilled Gates ally Michael Dell on why it was impossible to buy a Dell Computer
with a non-Microsoft browser installed.

Asked by the Washington Post if the Justice Department should expand its probe,
Chairman Orrin Hatch said simply, "It looks like they probably should."

This is the message NetAction urges consumers to give to the Justice Department:

-- EXPAND THE PROBE OF MICROSOFT!
-- BREAK UP ITS MONOPOLY AND CREATE OPEN STANDARDS AND COMPETITION!

Here's what's happening with the Justice Department probe, and what you can
do about it:

The first round of investigations by the Department of Justice has forced
Microsoft to back off from some of its most obvious abusive tactics.  Microsoft
has been forced to offer versions of Windows95 without including the Internet
Explorer and, leading up to the March 3 hearings, Microsoft has dropped
requirements on Internet Service Providers (ISPs) that limited how they could
advertise and promote Microsoft competitors.  Microsoft has also canceled a
number of deals with Web content providers, such as Paramount's Star Trek site,
that limited access for non-Microsoft browsers.

However, these will all be cosmetic changes if, as Microsoft still plans,
Internet Explorer is folded into the Windows98 operating system.

The Justice Department must file suit to block this, and launch a far-reaching
antitrust suit, what is known in legal terms as a Sherman Act case.  Up to this
point, the Justice Department has merely been seeking to enforce a consent
decree Microsoft made with the courts in 1995, but expanding the probe to a
full Sherman Act antitrust lawsuit is necessary to deal with the broad
monopoly power Microsoft wields in the computing and telecommunications fields.

One piece of good legal news is that Judge Laurence Silberman of the D.C. Court
of Appeals, which will ultimately have broad jurisdiction over any Microsoft
probe, has recused himself from the 3-judge panel overseeing lower court
rulings.  Silberman has a history of ignoring the dangers of monopoly to
consumers and was on the 3-judge panel in 1995 that threw out what would have
been a much tougher consent decree by District Judge Stanley Sporkin. Sporkin's
consent decree would have enforced much tougher antitrust restrictions against
Microsoft over the past few years. Silberman is being replaced on the panel by
Patricia Wald, a judge much more favorable towards consumers and antitrust
investigations.

NetAction urges consumers to call or email the Justice Department and ask
them to launch a full Sherman Act investigation of Microsoft.

-- Call the toll-free antitrust hotline: 1-888-736-5287
-- Email address: address@hidden
-- Email link: mailto:address@hidden

For more background information on the Microsoft antitrust issue, see
NetAction's comprehensive White Paper, "From Microsoft Word to Microsoft
World," on NetAction's Web site, at: <http://www.netaction.org/msoft/world/>.  

NetAction has called on the Justice Department to follow these principles in
dealing with Microsoft:

1.    Divestiture: Microsoft's Windows operating system monopoly should be split
off into a separate company from the application and Internet divisions. It may
also prove necessary to separate Microsoft's application and Internet divisions.

2.    Restrain Predation: Stop Microsoft from giving away browser products.
Since $0.00 is below any measure of cost, it meets the traditional test for
predatory pricing.

3.     Licensing: Microsoft should be forced to discontinue any licensing
practices (NT, database server, etc.) that restrict customer dealings with
competitors or require customer use of MSFT products.

4.    Open Standards: The government should more vigorously support open
standards processes and endeavor to defend open standards developed through
industry standards processes from anticompetitive abuse by Microsoft.

5.  Consumer Involvement: The government must establish processes to ensure
participation by Internet users in public policy decisions effecting consumer
use of the Internet, including appropriate mechanisms for addressing complaints
about product marketing and the quality and reliability of Internet services.

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NO NEWS IS GOOD NEWS ON CAL STATE UNIVERSITY TECHNOLOGY DEAL

What is the news from the Microsoft-GTE-Fujitsu-Hughes consortium that was
looking for a $3 billion, ten-year monopoly over technology development at the
California State University system?

The good news is that there is no news, meaning that after having the
California Education Technology Initiative (CETI) plan blasted by students,
faculty, staff and legislators at a January 6, 1998, hearing in Sacramento,
the consortium and the university still have not been able to agree on
acceptable revisions to the plan.

On March 17, 1998, Assembly Higher Education committee chair Ted Lempert wrote a
letter to California State University officials telling them that they were
already two weeks late on promises to deliver the revisions to the plan.  He
warned them that if a new proposal was not available within two weeks, the
plan would be essentially dead.

According to reports, the CETI consortium partners are balking at giving up the
technology monopoly provisions in the original deal, arguing that without such a
monopoly over student and faculty technology purchases, they cannot generate the
revenue to pay off their initial investment.

This highlights the fact that, as NetAction and others charged, the whole
original business plan was based on students and faculty paying for the deal
through monopoly restrictions on their technology choices. The whole CETI
project was never the "free lunch" being sold by the consortium and university
officials.

For background on CETI, see:
Micro$oft Monitor, Issue No. 20, Dec. 9, 1997
"Action Alert: Stop CETI!"
<http://www.netaction.org/monitor/mon20.html>  
and
Micro$oft Monitor, Issue No. 21, January 8, 1998
"Questions Delay Corporate Takeover of Cal State University Technology"
<http://www.netaction.org/monitor/mon21.html>
 
The next few weeks will decide whether the CETI deal is finally killed.
NetAction urges California consumers to phone or fax Chairman Ted Lempert,
thank him for his tough scrutiny of the deal, and urge him to kill this
monopoly deal once and for all.

Assembly Higher Education Chairman Ted Lempert
Phone:  916-445-7632 
Fax:    916-324-6974 

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About The Micro$oft Monitor

The Micro$oft Monitor is a free electronic newsletter, published as part of
the Consumer Choice Campaign <http://www.netaction.org/msoft/ccc.html>.
NetAction is a national, non-profit organization dedicated to educating the
public, policy makers, and the media about technology-based social and
political issues, and to teaching activists how to use the Internet for
organizing, outreach, and advocacy.

To subscribe to The Micro$oft Monitor, write to: <address@hidden>.
The body of the message should state: <subscribe monitor>.  To unsubscribe
at any time, send a message to: <address@hidden>.  The body of the
message should state: <unsubscribe monitor>

NetAction is seeking sponsors to provide financial support for the continued
publication of the Micro$oft Monitor.  Sponsors will be acknowledged in the
newsletter and on NetAction's Web site.  NetAction is supported by
individual contributions, membership dues and grants. 

For more information about contributing to NetAction, or sponsoring the
Micro$oft Monitor, contact Audrie Krause by phone: (415) 775-8674, by
E-mail: <mailto:address@hidden>, visit the NetAction Web site at:
<http://www.netaction.org>, or write to: 
NetAction * 601 Van Ness Ave., No. 631 * San Francisco, CA 94102

To learn more about how activists can use the Internet for grassroots
organizing, outreach, and advocacy, subscribe to NetAction Notes, a free
electronic newsletter published twice a month.  

To subscribe to NetAction Notes, send a message to: <address@hidden>
The body of the message should state: <subscribe netaction>.  To unsubscribe
at any time, send a message to: <address@hidden>.  The body of the
message should state: <unsubscribe netaction>.
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Copyright 1998 by NetAction/The Tides Center.  All rights reserved.
Material may be reposted or reproduced for non-commercial use provided
NetAction is cited as the source.  NetAction is a project of The Tides
Center, a 501(c)(3) non-profit organization.





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