Settlement in DOJ case

After years moving through the American legal system at a particularly glacial pace, the American Department of Justice (DOJ) and Microsoft Corp. have finally reached a settlement which has left the Redmond, Wash.-based software giant essentially unscathed, according to some analysts.

“It leaves the status quo pretty much in place. It unfetters Microsoft to keep feeding its core technologies into the market in high volumes by bundling them into the operating system,” said Dwight Davis, an analyst with Summit Strategies Inc., in Kirkland, Wash.

Alister Sutherland, director of software with IDC Canada in Toronto, agrees.

“Back in the earlier part of the year, when the [DOJ] announced that they would not be pursuing a break up of the company, I think that, that was a pretty clear signal that Microsoft was going to get off pretty lightly on this compared to [what] I think would have been the preference of the litigators.”

Not surprisingly Microsoft sees things differently.

“I don’t agree that Microsoft got off easy,” said Michael Eisen, director, law and corporate affairs with Microsoft Canada Inc. “We have had to make adjustments to our business practices in a number of respects.”

Yet not long ago there was talk of a Microsoft break up, much akin to the way telecommunications behemoth AT&T was split up back in the 1980s. That talk is now dead as the DOJ appears to be trying to put the whole affair behind it. On the other hand Microsoft’s woes are not completely over since the 18 states which participated in the lawsuit have not yet agreed to the settlement. In a Nov. 5 hearing, attorney for the states Brendan Sullivan told District Court Judge Colleen Kollar-Kotelly that one-third of the states have agreed to a revised version of the settlement, one-third are undecided, and one-third want to proceed with litigation.

Ironically, the sorry state of the global economy may have actually played into Microsoft’s hands, not to mention an increase in the pro business political landscape south of the border.

“Given the economic conditions, the state of the IT industry at large…the (DOJ) has got even more of an imperative to just sort of gloss it over, put it to bed and say lets just get on with doing business here,” Sutherland said.

Another factor which may have benefited Microsoft is the sheer length of the legal battle.

“I takes so long to get these things thorough the courts, that by the time it winds its way through the technology has changed so much, the environment has changed so much that is becomes a lot less relevant,” said Alan Gahtan, an IT lawyer and partner with Mann & Gahtan in Toronto.

“If you look at the amount of time it takes to reach a result, it is too late to fix the problem.”

at MicroSoft Canada

Had the end result of the DOJ Microsoft battle royale ended up with a Microsoft divided, then Microsoft Canada definitely would have felt some empathy. How much it would have changed the landscape north of the border is difficult to determine, but with Microsoft Corp. exiting the fray with few wounds to lick, it is now apparent little will change at Microsoft Canada.

In any case, Canada is still very much a sovereign nation and rulings passed south of the 49th parallel generally do not greatly influence business practices here.

“From a technical legal standpoint Microsoft Canada’s conduct is governed by Canadian not American or any other law,” Eisen said. “Whatever agreement is ultimately struck in the United States will be abided by Microsoft around the world including Microsoft Canada.”

Both Gahtan and Sutherland agree with Eisen that Microsoft is unlikely to create individual national strategies unless required to do so.

“I don’t think it has a huge impact one way to another (on Microsoft Canada), but I do think that Microsoft will run their strategy corporately,” Sutherland said.

Though things are slowly coming to an end in the U.S., Europe may very well be the next battleground for Microsoft.

“They have got problems that have been brewing in Europe with the same type of things, with antitrust,” Sutherland said.

the end result

The settlement is a detailed 21-page document that is broadly intended to give protection to a range of middleware products that have the potential to threaten Microsoft’s operating system monopoly.

As part of the agreement, Microsoft will be required to disclose its middleware application programming interfaces. But whether this will make any difference is up for debate.

“You know for the most part…all of these multimedia applications and stuff like that, it is all peanuts when you look at the software market in the big scheme of things,” Sutherland said.

“If [the application] works, as a consumer I am happy…I don’t want to spend any time on this stuff at this point in my life, I’ve got better things to do.”

The net result is whether or not you can install another media player, Internet browser or e-mail program, you probably won’t.

“So in that respect Microsoft wins,” Sutherland said.

– With files from IDG News Servic