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Friday, February 28, 2020

AGs' report: Microsoft monopoly strong as ever

By John O'Brien | Sep 5, 2007


WASHINGTON, D.C. - Despite an agreement with the federal Department of Justice, a group of state attorneys general have been arguing that Microsoft still possesses a monopoly in the world of personal computer operating systems.

Wednesday, Legal Newsline obtained a copy of the report from Connecticut Attorney General Richard Blumenthal's office. Blumenthal is one of six attorneys general who joined in submitting the report Friday, along with California's Jerry Brown, Massachusett's Martha Coakley, the District of Columbia's Linda Singer, Iowa's Tom Miller, Kansas' Paul Morrison and Minnesota's Lori Swanson.

The attorneys general are part of Brown's 18-member California Group that is worried what will happen when the requirements that were implemented in a 2002 settlement and forced Microsoft to submit quarterly activity reports to a federal judge expire in two months.

In the report (which can be seen here), they claim the settlement has had little effect on Microsoft's power.

"There can be little doubt that Microsoft's market power remains undiminished and that key provisions of the Final Judgment -- those relating to middleware -- have had little or no competitively significant impact," the report says.

The attorneys general admit no product has been introduced in the past 15 years that seriously rivals Microsoft's middleware, software that connects software components and applications, but insinuates that may be because no other company has the means to compete. Microsoft's web browser Internet Explorer is an example of middleware enjoying the benefits of the company's monopoly.

Added is the fact that Microsoft's share of the operating system market has remained steady, at 93 percent in 1991 to 92 percent in 2006, and its share of the web browser market is 85 percent.

"The (Original Equipment Manufacturer) flexibility provisions of the Final Judgment have not produced competitively significant results because they do not adequately address the persistent disincentives (including Microsoft's advantage of free universal distribution, additional support costs, potential consumer confusion and PC resource constraints) that discourage OEMs from preloading rival middleware products on a Windows PC that already comes bundled with similar Microsoft products," the report says.

"Particularly telling is the fact that, despite widespread consumer acceptance of the Firefox web browser, no major OEM has preloaded it onto new PC systems."

The rest of the 21-page report makes several other complaints, including an argument that the five-year agreement with Microsoft is a deviation from the DOJ's practice of entering into consent decrees of at least 10 years.

"(T)he California Group respectfully submits, Microsoft's commingling violation has not been effectively addressed, Microsoft remains in possession of the fruits of its violation, and the competitive conditions antedating Microsoft's anticompetitive conduct have not been restored."

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