DOJ questions compliance over licensing

Plaintiffs in the U.S. government’s antitrust case against Microsoft Corp. expressed concern last week that the software giant was not fully complying with provisions of its settlement agreement, threatening to make the core of the decree “prematurely obsolete.”

In a joint status report on Microsoft’s compliance with the November 2002 settlement, the U.S. government and various states involved in the case said they “remain concerned” about the royalty rates and structure the company proposed for allowing competitors access to its communications protocols.

Allowing rivals to see some of the inner workings of Microsoft’s Windows operating system was among the conditions imposed on the software maker as part of the antitrust suit. Microsoft’s compliance with the provision code could affect companies such as Sun Microsystems Inc. and IBM Corp. when it comes to making their software operate properly with Windows.

Rivals have argued in the past that Microsoft has kept too tight a grip on its code, effectively squeezing them out of certain markets.

The company had three months from the entry of the final judgement to implement reasonable and non-discriminatory (RAND) terms for Microsoft’s Communications Protocol Licensing Program (MCPP), the plaintiffs said in the report filed to U.S. District Judge Colleen Kollar-Kotelly Thursday. It has so far failed to do so, they argued.

A delay in implementing RAND terms concerns the plaintiffs because it was intended by the court to be the ‘”most forward-looking provision'” of the remedy directed toward restoring competition in the market, the report states.

The plaintiffs also said that without the RAND provision, the core of the decree “would prove prematurely obsolete.”

While Microsoft has made a handful of changes to its MCPP licensing program, such as eliminating a requirement that potential licensees sign a nondisclosure agreement to review the license terms, the plaintiffs said that “further steps may need to be taken…to account for Microsoft’s delayed implementation” of the RAND terms.

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